Should I Buy TJX Stock? 3 Pros, 3 Cons

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Many retailers are looking dicey heading into the 2013 holiday shopping season, but discounter TJX Companies (TJX) has been upbeat. Investors have taken notice, bidding up TJX stock by roughly 7% in the past month to contribute to a sizzling 50% year-to-date return.

Analysts have taken notice, too, and have upped their estimates on TJX stock. For instance, Sterne Agee’s Ike Boruchow increased his 2013 earnings forecast to by 4 cents to $2.88 and also raised his 2014 forecast by 10 cents to $3.32.

However, there might be a little reason for caution — TJX did not raise its outlook during its latest earnings report.

So, should you buy TJX stock regardless, or has the red light just come on? To see, we look at the pros and cons of TJX:

TJX Pros

Global Platform: TJX is a leading off-price apparel and home fashions retailer that sports more than 3,000 locations across four major divisions:

Marmaxx: These include T.J. Maxx and Marshalls chains in the U.S. Each has different merchandise mixes, such as in terms of jewelry, accessories and footwear. Homegoods: Launched over 20 years ago, this is a chain that sells home basics, furniture, lamps, rugs and wall décor. TJX Canada: This includes Marshalls, HomeSense and Winners brands across Canada. TJX Europe: TJX operates T.K. Maxx and HomeSense in the U.K., Ireland, Germany and Poland.

Together, these divisions generally aim to offer discounts between 20% and 60% — a huge draw for increasingly squeezed consumers.

Business Model: For more than three decades, TJX has built a solid infrastructure that includes a buying organization of 900-plus people operating out of 13 offices in 10 countries. Since 2008, TJX has increased the network of global vendors from 10,000 to 16,000, and as a result, TJX is able to quickly react to consumer tastes, trends and even macro changes and weather events. Of course, TJX also has focused on getting more efficiencies, introducing lean approaches to its supply chain and strategies to reduce inventory turns. TJX now operates 20 distribution centers in five countries.

Growth: In the latest quarter, consolidated comparable store sales increased 5% year-over-year, on top of 2012′s 7% increase. The drivers included a combination of increased ticket and traffic volume. Also, growth has been strong across all segments and countries — even Europe has been robust, and enjoyed 5% comps growth in Q3. Finally, TJX has gotten into the online game, launching its e-commerce site in September.

TJX Cons

Competition: While TJX attempts to undercut more traditional retailers, it has plenty of competition in the deep-discount game, Ross Stores (ROST), Kohl’s (KSS) and Burlington Stores (BURL). TJX also must contend with big-box operators like Target (TGT). So far, TJX has been able to dig itself a niche and remain fairly differentiated, but it’s fair to point out the danger in slipping — in retail, customers always have plenty of alternatives.

Consumer Tastes: Again, TJX has done a pretty good job with merchandising, but a retailer can easily go into a slump. In some cases, the results can be devastating, as seen with JCPenney (JCP). For TJX, it also has the challenge of making sure it gets the right merchandise for a global operation, which means it’s vulnerable to misfires.

Valuation: TJX isn’t necessarily overvalued. But then again, investors certainly are not getting a discount. TJX stock currently trades at 21 times earnings, and you’re not even getting much of a dividend to lean on, either, at a yield of less than 1%. On a relative basis, there definitely are better values out there, such as Target, which is trading at 15 times earnings and yields 2.6%.

Verdict

TJX has been able to thrive regardless of the macroeconomic environment. Then again, who doesn't want big discounts on branded goods?

Over the years, TJX has built a powerful infrastructure spanning various strong brands. More importantly, if TJX is to believed, there’s plenty of growth potential — TJX thinks it can reach more than $40 billion in revenues, which would be a big leap from 2012′s roughly $26 billion.

So should you buy TJX stock? Yes — this retailer has a winning formula that will be tough to beat.

Tom Taulli runs the InvestorPlace blog IPO Playbook. He is also the author of High-Profit IPO Strategies, All About Commodities and All About Short Selling. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.

AT&T Inc. Eyes Vodafone Group Plc Takeover (T)

Telecom giant AT&T Inc. (T) is looking to make a big move after watching its main competitor, Verizon Wireless (VZ), turn in a big earnings win.

The strategy may actually involve a firm that was, until recently, heavily involved with Verizon. Vodafone Group Plc (VOD) held a major stake in Verizon, which the latter only recently purchased back to operate on its own.

With AT&T looking to expand its operations, joining forces with a firm like Vodafone can help push the boundaries on its reach and customer base. Though the companies have yet to enter formal negotiations, sources state that executives at AT&T are discussing a bid to takeover Vodafone.

It is also rumored that T is looking at the U.K. firm, EE, but that seems less likely than the Vodafone deal. The company is expected to announce a bid sometime next year and the move is heavily expected by buy-side investors. The rumors alone had Vodafone’s stock trading higher on the day.

T shares were up 1 cent at Thursday’s close. The stock is up approximately 7.5% on the year.

Ford workers to get record $8,800 profit share checks

Ford said it will pay an average of $8,800 to about 47,000 hourly U.S. workers, up about $500 from last year.

NEW YORK (CNNMoney) Ford Motor will pay record profit sharing checks to United Auto Workers members after posting record profits in North America.

Ford (F, Fortune 500)said it will pay an average of $8,800 to about 47,000 hourly U.S. workers, up about $500 from last year.

The company agreed to more generous profit sharing in the most recent labor agreement; in return, veteran workers gave up an increase in their hourly pay rate. Ford also agreed to hire more workers and has increased the number of hourly workers by 6,000 over the last two years.

Ford plans to continue hiring workers in 2014, saying it will have its largest staffing increase in 50 years.

General Motors (GM, Fortune 500) and Chrysler Group, which both agreed to similar labor contracts two years ago, are also expected to report improved profit sharing payments in the coming week.

Ford's net profit for the quarter matched year-ago results. Its full-year net income was the strongest in more than a decade.

While full-year results improved in North America, fourth quarter earnings were down slightly. But losses in Europe narrowed, and Ford improved earnings in Asia. Revenue and vehicle sales increased worldwide and in North America for the quarter and the year.

But Ford repeated its earlier guidance that profits will be lower in 2014 as it spends more on vehicle introductions.

  Ford F-150: Lighter and more efficient

Ford announced Tuesday that it will shut the plants that make its best-selling Ford F-150 pickup for 11 weeks later this year as it prepares for a radical change in the pickup's design, using far more aluminum. The company also said vehicle pricing is likely to be lower as it has to discount the current year models as it introduces a record number of new models this year.

Market Focus - Copper

The Market Focus blog post is an opportunity to highlight a market or chart of interest. The copper market is seen as a window into economic activity. It is a basic commodity used extensively in electronics and construction, produced and consumed internationally. A global commodity priced in US dollars, copper prices are also subject to price movement based on currency fluctuations.

I highlighted copper in yesterday's entry about Commitments of Traders, remarking that prices have seen "broad sideways price action since at least mid-June." Today's sharp rally cuts into a resistance area, noted in the third chart here.

The weekly chart shows a bearish moving average array, with momentum (RSI) having returned to neutral. That is a move from a double bottom in RSI in oversold territory. The lines describe a descending triangle and emphasize the support at the $3 area in 2011 and again recently.

You can read more of this blog here. Written by Stanley Dash, VP, Applied Technical Analysis, TradeStation. Follow TradeStation

Top 5 Managed Healthcare Stocks To Invest In 2015

WASHINGTON (AP) ��The government for the first time has enforced environmental laws protecting birds against wind energy facilities, winning a $1 million settlement from a power company that pleaded guilty to killing 14 eagles and 149 other birds at two Wyoming wind farms.

The Obama administration has championed pollution-free wind power and used the same law against oil companies and power companies for drowning and electrocuting birds. The case against Duke Energy and its renewable energy arm was the first prosecuted under the Migratory Bird Treaty Act against a wind energy company.

"In this plea agreement, Duke Energy Renewables acknowledges that it constructed these wind projects in a manner it knew beforehand would likely result in avian deaths," Robert G. Dreher, acting assistant attorney general for the Justice Department's Environment and Natural Resources Division, said in a statement Friday.

Top 5 Managed Healthcare Stocks To Invest In 2015: FTI Consulting Inc. (FCN)

FTI Consulting, Inc. operates as a business advisory firm enabling organizations to protect enterprise values in complex legal, regulatory, and economic environments worldwide. Its corporate finance/restructuring service offerings include restructuring/turnaround, bankruptcy support, transaction advisory, private equity, performance improvement, interim management, and investment banking services; and economic consulting service offerings comprise business valuation, intellectual property, international arbitration, labor and employment, public policy, securities litigation and risk management, antitrust and competition economics, and regulated industries. The company offers forensic and litigation consulting services, including forensic accounting and advisory services, financial and enterprise data analytics, global risk and investigations practice, intellectual property, dispute advisory services, trial services, and compliance, monitoring, and receivership; and strateg ic communications services, such as financial communications, strategy consulting and research, corporate communications, public affairs, and creative engagement. It also provides technology services consisting of computer forensics and investigations, e-discovery software and services, and discovery consulting services. The company services clients in various industries, including aerospace and defense, agriculture, automotive, banking and financial services, construction, energy and utilities, environmental, government and public contracts, healthcare, hospitality, gaming and leisure, information technology, insurance, media and entertainment, mining, petroleum and chemicals, pharmaceutical and life sciences, real estate, retail, telecommunications, and transportation. FTI Consulting, Inc. was founded in 1982 and is based in West Palm Beach, Florida.

Top 5 Managed Healthcare Stocks To Invest In 2015: Central Goldtrust (GTU)

Central GoldTrust (GoldTrust) is a passive, self-governing, single purpose, closed-end trust. GoldTrust is a gold holding trust created to buy and hold substantially all of its assets in long-term holdings of gold bullion. The primary objective of GoldTrust is to provide a exchange-tradeable alternative for investors interested in holding an investment in gold bullion. All gold bullion owned by GoldTrust must be stored in Canada in the treasury vault facilities of a tier 1 Canadian chartered bank on an allocated and segregated basis.

GoldTrust holds long-term holdings of pure, unencumbered gold bullion, in 400 troy ounce international bar sizes, and does not speculate with regard to short-term changes in gold prices. At least 95% of the total net assets of GoldTrust should be held in gold with at least 90% in physical bullion and up to 5% in gold certificate form. The property of GoldTrust, as at December 31, 2011, was consisted of 698,496 fine ounces of gold bullion and 6,156 fine ounces of gold in certificate form for a total of 704,652 fine ounces. GoldTrust is almost entirely invested in pure refined gold bullion in international bar form. As at December 31, 2011, GoldTrust�� assets were made up of 98.1% gold.

Advisors' Opinion:

• [By Eric Parnell]

  It also remains worthwhile to hedge stock allocations to protect against any major downside event along the way. This includes positions with low correlations such as the PIMCO Total Return ETF (BOND) or the PIMCO Global Advantage Inflation Linked Bond ETF (ILB). This also includes allocations that are likely to rally sharply in the event of a stock pullback but can also continue to rise along with the market such as long-term Treasuries (TLT) or Build America Bonds (BAB). And despite the recent thrashing they have endured, the precious metals complex including gold (GLD), silver (SLV), platinum (PPLT) and palladium (PALL) continue to provide attractive long-term portfolio diversification benefits. I remain long all of these metals via the Central GoldTrust (GTU), the Central Fund of America (CEF), the Sprott Physical Silver Trust (PSLV) and the Sprott Physical Platinum and Palladium Trust (SPPP).

10 Best Penny Stocks To Buy Right Now: Genting Singapore Plc (G13.SI)

Genting Singapore PLC, an investment holding company, engages in the development and operation of integrated resorts. It operates casinos; hotels with approximately 1500 rooms; approximately 22 beach villas; and a marine life park. The company is also involved in the provision of sales and marketing support services to leisure and hospitality related businesses; online gaming operations; and the food street business. It has operations in Europe and the Asia Pacific. The company was incorporated in 1984 and is headquartered in Singapore. Genting Singapore PLC is a subsidiary of Genting Overseas Holdings Limited.

Top 5 Managed Healthcare Stocks To Invest In 2015: Local.com Corporation(LOCM)

Local.com Corporation operates as an Internet search advertising company that enables businesses and consumers to find each other and connect locally. Its Owned and Operated business unit manages its flagship online property Local.com and a proprietary network of approximately 20,000 local Websites that reach approximately 15 million monthly unique visitors. The company places various display, performance, and subscription advertisement products on its Local.com and proprietary network. Its Network business unit operates a private label local syndication network of approximately 1,000 U.S. regional media Websites; 80,000 third-party local Websites; and its own organic feed of local businesses plus third-party advertising feeds that focus primarily on local consumers to a distribution network of hundreds of Websites. The company?s Sales and Ad Services business unit provides approximately 45,000 direct monthly subscribers with Web hosting or Web listing products. The compan y was formerly known as Interchange Corporation and changed its name to Local.com Corporation in November 2006. Local.com Corporation was founded in 1999 and is headquarters in Irvine, California.

Top 5 Managed Healthcare Stocks To Invest In 2015: Ditem Explorations Inc. (DIT.V)

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

Top 5 Managed Healthcare Stocks To Invest In 2015: Actionview International Inc (AVEW)

ActionView International, Inc., incorporated on January 26, 1986, through ActionView, its wholly owned subsidiary, is engaged in the business of designing, marketing and manufacturing proprietary illuminated, programmable, motion billboard signs for use in airports, mass transit stations, shopping malls, and other high traffic locations to reach people on-the-go with targeted messaging. In August 2009, the Company completed the acquisition of MatchFights, LLC, which is launching live, pay-per-view entertainment events delivered in high-definition over the Internet.

The Company�� billboards utilize digital motor controllers for enhanced advertising capabilities, source code for enhanced operating performance and light emitting diode (LED) displays for timely onsite communications. The Company also designs and distributes a 4 x 6 non-scrolling (static) sign with a depth of 5 inches, which is ideal for narrow passage ways where advertising on the walls has typically been confined to non-backlit products.

Top 5 Managed Healthcare Stocks To Invest In 2015: Dole Food Company Inc(DOLE)

Dole Food Company, Inc. engages in sourcing, growing, processing, marketing, and distributing fresh fruits and vegetables, and food products to wholesale, retail, and institutional customers worldwide. It operates in three segments: Fresh Fruit, Fresh Vegetables, and Packaged Foods. The Fresh Fruit segment involves in growing and selling bananas under the DOLE brand name primarily in North America, Europe, and Asia; ripening and distributing DOLE and non-DOLE branded fresh produce in Europe; growing, sourcing, and selling fresh pineapples under the DOLE TROPICAL GOLD label; and exporting Chilean fruits, including grapes, apples, pears, stone fruits, and kiwifruits primarily to North America, Latin America, and Europe. The Fresh Vegetables segment engages in sourcing, harvesting, cooling, distributing, and marketing various fresh and fresh-cut vegetables, including iceberg lettuce, red and green leaf lettuce, romaine lettuce, butter lettuce, celery, cauliflower, broccoli, c arrots, Brussels sprouts, green onions, asparagus, snow peas, artichokes, and radishes, as well as fresh strawberries and raspberries. This segment also processes and markets value-added vegetable products, such as packaged salads and packaged fresh-cut vegetables. The Packaged Foods segment produces and markets canned pineapples, canned pineapple juice, fruit juice concentrate, fruit parfaits, snack foods, and frozen fruits, as well as fruits in plastic cups, jars, and pouches. Its principal customers include mass merchandisers and supermarkets. Dole Food Company, Inc. was founded in 1851 and is based in Westlake Village, California.

Advisors' Opinion:

• [By Michael Nau]

  How would you react as a shareholder if the management of a company you owned behaved erratically and consequently pushed down the company's share price? What if after pushing down the share price, management offered to buy you out on the cheap? That is exactly what the Chairman, CEO and 40% owner of Dole (DOLE) David Murdock appears to have done.

• [By Michael Lewis]

  On a valuation basis, Chiquita isn't richly valued, though not the extreme bargain it once was, either. Set to return to profitability this year, Chiquita is trading at a little over 10 times forward earnings. Competitor Dole (NYSE: DOLE  ) , which just this week received a buyout offer led by its CEO, is now valued at 20 times forward earnings. On an EV/EBITDA basis, Dole has been valued by its CEO's offer at nearly 19 times. Chiquita trades at 12.6 times.

• [By Chris Hill]

  Shares of Sony (NYSE: SNE  ) rise after the company's new PlayStation4 game console is priced at $399. Softbank raised its offer to buy Sprint Nextel (NYSE: S  ) by $1.5 billion. Dole Food (NYSE: DOLE  ) CEO David Murdock offers to buy the entire company. And bricks-and-mortar retailer GameStop (NYSE: GME  ) also gets a boost from Sony's news that the new PlayStation4 will allow unlimited used-game sales. In this installment of Investor Beat, our analysts discuss four stocks making big moves.

Top 5 Managed Healthcare Stocks To Invest In 2015: Apollo Group Inc.(APOL)

Apollo Group, Inc., through its subsidiaries, provides online and on-campus educational programs and services at the undergraduate, master?s, and doctoral levels. The company offers various degree programs in arts and sciences, business and management, criminal justice and security, education, health care, human services, nursing, psychology, and technology through its campus locations and learning centers in 40 states and the District of Columbia, and Puerto Rico, as well as through its online education delivery system. It also provides various degree programs in Chile and Mexico, and through online; financial services education programs, including Master of Science in three majors, as well as certification programs in retirement, asset management, and other financial planning areas; and training and education to professionals in the legal and finance industries through its schools in the United Kingdom and a network of offices in Europe. In addition, the company offers p rogram development, administration, and management consulting services comprising degree program design, curriculum development, market research, student admissions, and accounting and administrative services to private colleges and universities for their working learners? programs; and sells books and other publications. Apollo Group, Inc. was founded in 1973 and is based in Phoenix, Arizona.

Advisors' Opinion:

• [By John Divine]

  There's an old Wall Street saying: "Never try to catch a falling knife." While I also try to heed that advice on a day-to-day basis, bearish momentum sure can develop some killer inertia in the stock market. Few investors know this better than Apollo Group (NASDAQ: APOL  ) shareholders, as its 2.4% slip today continued its horrific and extended slide. The company that runs the University of Phoenix is facing high dropout rates and the specter of losing its federal funding and accreditation if loan default rates climb.�

• [By Holly LaFon]

  We initiated one new position in the third quarter, Aarons (AAN), and purchased shares in several existing investments, including small amounts in Apollo Group (APOL) and Devry (DV) and a larger increase in Arris Group (ARRS). We have written about the for-profit education companies in previous letters, so please refer to those letters should you want to familiarize yourself with APOL or DV.

• [By Sean Williams]

  For-profit education company Apollo Group (NASDAQ: APOL  ) also advanced 4.9% without any primary news. The thought process for investors here -- other than piling into a company that tends to be more volatile than the S&P 500 on a very big up day -- is that an improving economy should encourage people who've previously given up on finding employment to attempt to retrain themselves through online education. I, on the other hand, still think much of the sector will continue to see declining enrollments and fewer subsidies from the U.S. government, which makes Apollo an extremely risky bet.

• [By Matt Thalman]

  Another big loser was the Apollo Group (NASDAQ: APOL  ) , which lost 10.27% of its value today. The company announced earnings yesterday after the market closed, and although it beat the Street's estimates for adjusted profit, its revenue misses expectations. For the quarter, revenue was down 16% as enrollment for the company's for-profit education unit, The University of Phoenix, fell 17% to 287,500 students. Apollo also announced that it expects revenue to come in at $3.65 billion to $3.7 billion for the full 2013 year while analysts had pinned the number to be higher at $3.71 billion. �

Top 5 Managed Healthcare Stocks To Invest In 2015: OceanFirst Financial Corp.(OCFC)

OceanFirst Financial Corp. operates as the holding company for OceanFirst Bank that provides community banking services to retail, government, and business customers primarily in Ocean, Monmouth, and Middlesex counties in New Jersey. Its deposit products include money market accounts, savings accounts, interest-bearing checking accounts, non-interest bearing accounts, and time deposits. The company?s loan portfolio comprises conventional first mortgage loans secured by one-to-four family residences, residential mortgage loans, commercial real estate loans, multi-family and land loans, and real estate construction loans; consumer loans, such as home equity loans and lines of credit; and commercial loans. In addition, it offers trust and asset management, and merchant check card services; and sells alternative investment products, including mutual funds, annuities, and life insurance. The company operates 22 branches, as well as a loan production office and a trust and weal th management office. OceanFirst Financial Corp. was founded in 1902 and is based in Toms River, New Jersey.

Average 30-year mortgage rate dips to 4.39%

WASHINGTON (AP) — Average U.S. rates for fixed mortgages dipped slightly this week.

Mortgage buyer Freddie Mac says the average for the 30-year loan declined to 4.39% from 4.41% last week. The average for the 15-year loan eased to 3.44% from 3.45%.

Mortgage rates have risen about a full percentage point since hitting record lows roughly a year ago.

The increase was driven by speculation that the Federal Reserve would reduce its $85 billion a month in bond purchases. The Fed determined last month that the economy was strong enough to start trimming the purchases, which have kept long-term interest rates low.

The rise in mortgage rates and higher home prices slowed sales of existing homes, which have fallen for three straight months.

But overall, 2013 was the best year for housing in seven years. The National Association of Realtors reported Thursday that sales of existing homes edged up slightly in December, helping lift sales for the year to the highest level since 2006.

Most economists expect home sales and prices to keep rising this year, but at a slower pace. They forecast sales and prices will likely rise around 5%, down from double-digit gains in 2013.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country between Monday and Wednesday each week. The average doesn't include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fee for a 30-year mortgage was unchanged at 0.7 point. The fee for a 15-year loan also remained at 0.7 point.

The average rate on a one-year adjustable-rate mortgage declined to 2.54% from 2.56%. The fee was unchanged at 0.5 point.

The average rate on a five-year adjustable mortgage increased to 3.15% from 3.10%. The fee was steady at 0.5 point.

Mortgage rates dip

Average rate nationwide for 30-year fixed-rate home loan

Sponsored byPercent!

30-year

0,4.10

1,4.16

2,4.35

3,4.22

4,4.29

5,4.46

6,4.42

7,4.47

8,4.48

9,4.53

10,4.51

11,4.41

12,4.39

Source: Source: Freddie Mac weekly survey of about 125 lenders

One on one with Wells Fargo CEO John Stumpf

2014 started off better than the year before for the major banks, with Wells Fargo claiming the top spot in terms of profit, overtaking rival J.P. Morgan as the most profitable bank for 2013. Even though the mortgage business has slowed as interest rates rise, refinancing, capital markets and a better economy are all contributing to a stronger environment for the year. Wells Fargo creates about a third of all mortgages in the country, so I caught up with CEO John Stumpf to find out what higher interest rates, changes at the Federal Reserve and more regulation will mean for 2014. My interview follows, edited for clarity and length.

Q: Characterize what you saw in the final quarter of the year and what you're expecting from the business climate in coming months.

A: The quarter was very strong. We had strong loan growth and deposit growth, which are fundamental parts of the business. A lot of people focus in the mortgage business, but if you look year-over-year, about two thirds of our originations were refinances, and about a third were purchases. In the quarter, just the reverse happened. About two thirds of originations were purchases and a third were refinancing. As loan prices go up, refinancing ebbs, which is not a bad thing. It means that housing is getting better. Another thing that showed up in our numbers in the fourth quarter was the best credit we have seen in this company in my 32 years here.

Q: Does this tell us that the consumer is healthier? Or are we talking the business environment?

A: This is the $64 question. Where is the consumer? It's not perfect, but compared to the last five Januaries, this is the best I've seen. Washington, D.C., seems to be working better together. There is a budget passed. We're not talking about fiscal cliffs and the debt ceilings and so forth. Unemployment is under 7%. Gas prices are down. Housing values are up. These are all positive signs. Business balance sheets are in the best shape I've ever seen, and consumers have p! aid down debt. As far as interest rates, people have reset their mortgages so that the "interest carry," the debt they carry, is back to something that was like it was in the '80s. Where is the consumer? It depends a lot on confidence. We are a retail spending-driven economy.

Q: Interest rates have moved up, as you noted. Are you expecting this to continue, and how will that affect this better environment?

A: We have to look at short-term as well as long-term rates. I see movement in the long end before I see it on the short end, although I'm not expecting big changes this year. There is talk about "taper" (the Fed pulling back on its buying of bonds). But remember, taper means buying less, and there's also less product available. When you have fewer mortgages being made, there is less product on the market. That will need to work through.

Ultimately, we need the Fed to get away from this exceptionally active involvement they have been in with monetary stimulus because it's not natural this late in the cycle. I don't know that that helps too many people that much. (With such low rates), I worry about the people who are retired who are earning less on their deposits and their investments than they planned. But still I don't think we will see big rate moves this year even though It will be in that direction.

Q: What kind of a 2014 are you looking for?

A: I think you are going to see increases in the value of homes by between 3% and 5% year over year. I think we will see a mortgage market that is largely dominated by purchase money. It would not surprise me if we were in a $1 trillion- to $2 trillion-mortgage marketplace. I think we will see continued job creation, albeit not as strong as we would like to see. Gas prices, it would not surprise me to see them moderate or stay where they are right now. I think we will see a little better economy than 2013. I'm optimistic. But I don't think it's gonna be a breakout year. I don't think we're at that point yet.

Q! : What ab! out the regulatory environment? This was top of mind last year. Are we seeing the rule-making get tougher and more expensive, and will it still top the agenda?

A: I don't think it will be as much as it was last year. We're starting to get a lot more clarity about what the rules are. Clearly, there is a review going on, and there's a lawsuit between the merchants and the Fed regarding where they came out on debit interchange fees. But I can tell you on that issue alone, with what happened recently, the breaches in big merchants, you can sure tell that this is not a risk-free environment. The banks need returns so we can invest in technology and safety (of customers data) because frankly, we have some old technology in that industry, and we are behind where other countries are. That will be dealt with between the Fed and the merchants.

I think there is more regulatory certainty today than there was in the last five years. On top of that, at least in our company, we have gotten a lot of litigation done and have dealt with the issues. We settled our Fannie Mae and Freddie Mac issues last quarter, so we are on our front foot here, looking to do things that are real business- and economy-type moves.

Q: In terms of getting back to regular business, are you expecting to increase your dividend this year? How will you allocate capital to shareholders?

A: This is an important question. This is the time of the year we submit our capital plans to the Fed and wait to hear back in early March where we come out. Last year, we paid out either through dividends or stock repurchases $11.4 billion, which is a lot of money. This year, we have asked to pay out more. It's really great to be able to reward stockholders. We've talked about a 50% to 65% payout because we have built up so much capital, and our liquidity is in such a great spot. We are excited to hear from the Fed and hopefully, will be able to do that.

Q: In terms of allocating capital toward technology improvements, what are y! ou expect! ing? What should consumers who are worried about those account data breaches do? How can people protect themselves?

A: We don't publicly state our total capital expenditures budget. But I can tell you that technology does dominate that spending, and this is a great example of why we are making this investment. From cybersecurity and from the consumer's perspective, as in the Target case, the consumer must be kept from harm. We are offering credit monitoring. If someone uses their card, debit or credit, and it is compromised in some way, we stand behind them. That's a great benefit and a great value. But you're right, we are making lots of investments in that area, and that will continue.

Q: What about the talk of splitting up the banks? Do you expect this to get more traction?

A: It goes up and down. It manifests itself in different ways. I wrote an article for the American Banker not long ago to say that all banks, small, medium and big, are important to the ecosystem of America. When I got in the industry, in 1975, we had 14,500 banks. Today, we have 7,000, and every one of those, I want to advocate for.

My little home town of Pierz, Minn., is a one-bank town. If that bank went away, that town would roll up and blow away. They are all important. America has been good to us, and we try to be good citizens for America. We serve large customers, small customers. We are one of the largest taxpayers in the country. It's important we do our share in philanthropy.

That being said, no bank and no company in any industry should be too big to fail. The fact is, when you look at Wells Fargo, we are not even one of the 20 top banks in the world. We are No. 4 in the United States. But our size is less than 10% of the GDP in the United States. This is small relative to the rest of the world, where some banks are over 100% of their GDP.

Q: Where is the biggest growth engine for Wells Fargo this year?

A: All of our businesses have an opportunity to grow but may! be the bi! ggest would be in the area of wealth-managed brokerage and retirement. We serve one in three Americans, one way or another. We have about 10% of the deposits in the country, but we don't have that same share of wealth. Many of our customers who call us their bank, keep their wealth somewhere else. That is a huge opportunity for us. I like the insurance distribution business, and I like some of the business we are doing in capital markets. I think the credit card business is also an opportunity for growth. Only 37% of our customers carry our credit card.

Q: I'm glad you mentioned retirement. Most people are not prepared for it financially.

A: You are absolutely right. I think the saddest situation I see is a 60-year-old person or family or couple that looks at their situation and says, "Uh, oh. I don't have enough to retire, and there's not enough years to earn that." The sooner people can do that, sit down, have some rudimentary financial plan — "What do I need to do today to retire when I am 65" or whatever age they think about — they will be less reliant on government. This is not just for the wealthy. This is for the mass market to get in front of before it's too late.

USA TODAY contributor and CNBC host Maria Bartiromo.(Photo: Todd Plitt, USA TODAY)

Commentary: The Twitter spin cycle is on heavy…

SAN FRANCISCO – If Twitter hasn't convinced us of the force of its fire hose of forceful opinions, consider the piling on of Yahoo over the past few days – while Google was mythologized.

As Yahoo thinned the herd with the departures of its chief operating officer and head of editorial operations, Google was showered with praise for its latest wearable: smart contact lenses.

Yahoo CEO Marissa Mayer was scorched with tweets en masse after jettisoning COO Henrique de Castro on Wednesday. He allegedly cost the company $109 million for less than two years of work amid mounting evidence Yahoo display ad sales have been a dud. A day later, editor-in-chief Jai Singh exited – days after the launch of Yahoo Tech. Editorial operations are now overseen by marketing chief Kathy Savitt.

The verbal knives quickly came out, in a wave of tweets about the advertising and management failures of Mayer, who is trying to turn around what was a moribund franchise when she took over as CEO in July 2012. Since then, Yahoo traffic has grown more than 20%, the stock is hovering at $40 – near a 52-week high – and Mayer wowed the crowd at the International CES show in Las Vegas with her keynote speech.

But the convenient storyline was her shortcomings in the rush-to-judgment prism of Twitter. De Castro was the No. 2 at Yahoo, hired by Mayer. It's a simplistic narrative, which sells online.

Bookending Mayer was the shower of Twitter love for Google and its latest moon shot: smart contact lens. Google hopes the early-stage lens, which measures glucose in tears using a wireless chip and miniaturized glucose sensor, will help people better manage diabetes.

The search engine was quickly, and rightly, whispered in the same reverential tones as Bell Labs and General Electric. Entering its 16th year, Google is the shining example of a wildly successful tech company that isn't shy about taking bold risks in an industry sometimes lacking them.

The invention is the latest to emerge from Goog! le X, the top-secret lab that works on mind-blowing technology such as self-driving cars and digital eyewear Google Glass. It may never become commercially successful but has the potential to dramatically change the way people live.

That is, until the privacy police and security advocates bemoan the dangers of Google's ubiquity in our lives.

In other words, Google's time will come soon in the Twitter echo chamber. Perhaps by then, Mayer will be hailed for her latest acquisition at Yahoo. The virtual spin cycle is heavy rotation these days.

Taco Bell to roll out major beverage expansion

Taco Bell has seen the future of fast food, and it might not be what folks eat — but what they drink.

Today, the Mexican fast-food giant will announce the largest-ever expansion of its beverage menu — with six new drinks rolling out at once, including three carbonated and three new non-carbonated beverages.

More typically, fast-food chains will introduce one, two or maybe three new drinks at a time — but rarely six. The biggest of the bunch is expected to be a fruit-infused Mountain Dew Sangrita Blast, that will be available only at Taco Bell. Other new offerings: Manzanita Sol (an apple-flavored, carbonated drink); Diet Mountain Dew Baja Blast; SoBe Lifewater Yumberry Pomegranate; Brisk Mango iced tea and Brisk Half and Half (half tea, half lemonade.)

The national rollout is just getting underway.

"We asked ourselves: Why can't we make our beverages as crave-able as our food?" says Chris Brandt, chief marketing officer. "That's been our mission for the past 18 months."

For the fast-food giants, drinks matter. About 56% of fast-food purchases involved a beverage last year, says NPD Group/CREST. "Beverages are a significant portion of profits," says Christopher Muller, who teaches at Boston University's School of Hospitality Administration. "You're basically serving water with ice." Drinks can account for 30% to 40% of sales — and can quickly boost profits 10% to 15%, he says.

The beverage move by Taco Bell comes less than two years after it nearly turned the fast-food business upside down with its wildly successful Doritos Locos Tacos — which puts tacos inside Doritos-flavored taco shells. The product line is widely considered one of the most successful in the brand's history and one of fast food's most innovative in years.

But Taco Bell has been somewhat on the sidelines in recent years while other fast-food chains — particularly McDonald's and Starbucks — have vastly expanded their beverage lines, mostly hoping to lure Millennials for late! -day and late-night snacking. McDonald's has rolled out various smoothies and frappés even as Starbucks has rolled out a unique line of Refreshers. Also, the new Coca-Cola Freestyle drink machine — which can mix and match 127 different drinks — is catching on as it shows up at some retailers that sell Coke products

While Taco Bell — which sells Pepsi products — has expanded its line of Freezes, the creative growth of its beverage menu arguably hasn't kept up with the growth of its foods over the past few years.

Now, with an eye on Millennials, who demand more creative — and healthy — carbonated and non-carbonated drinks, Taco Bell is trying to move the beverage needle. But will folks choose a fast food because of the drinks?

"I do," says Boston University's Muller. And when it's a tossup between one fast-food outlet and another, the beverages can be the deciding factor, he says.

The beverage move also is about attracting customers into stores during off-peak hours — like late afternoon or late night. At least, that's what it did when Taco Bell tested the drinks at some locations last year, says Brandt.

The way Muller figures it, bolstering the beverage menu certainly can't hurt. "We're going from the year of the carbs, to the year of the beverages."

Disney: “The Force is Strong With This One”

We always love when analysts try to get clever, and Nomura’s Anthony DiClemente sure gave it the old-college try when he stuck that title on his report about Disney (DIS).

Walt Disney Co./Everett

As should be obvious, DiClemente is bullish on Disney. Very bullish. He explains why:

With perhaps the industry's most well-rounded and global stable of media brands, we believe Disney is positioned best to manage industry changes that are driven by digital technology. Why? Of any media company, we think Disney best monetizes content across multiple business segments; looking broadly at the Disney "halo effect," the synergies produced between the Studio, Parks, and Consumer Products segments are what defines Disney's "edge." Technology allows this effect to reverberate globally; while Disney's cable networks are primarily US.-focused, proliferation of mobile technology will also allow for Disney's content to touch many more customers at many more points of purchase. Although FY13 financial results were impacted by declines at Broadcasting and the Studio, we believe that further growth at ESPN and the theme parks will drive operating income acceleration in F2014E and generate consistent EPS growth in the coming years. At a historically reasonable valuation, we rate the shares Buy.

And what content Disney could be producing in the years ahead. DiClemente explains:

Following a year hampered by the financial burden of The Lone Ranger, we are expecting further success of Marvel and Disney's animation studio content (like its successful holiday release of Frozen) to drive an acceleration in studio operating income off a year that has created easy YoY comparables. This will serve as a prelude for the return of a Pixar film in 2015, followed by the much-anticipated Star Wars (Epidode 7) at
the end of 2015. Marvel, Pixar, and Lucasfilm content will reverberate throughout the Disney businesses, as international box office, consumer products, and theme parks are all poised to benefit from their halo.

So yes, Disney is a Buy, and DiClemente’s $90 price target suggests another 19% of upside from yesterday’s close, though it should be noted he also likes CBS (CBS), Twenty-First Century Fox (FOXA) and Discover Communications (DISCA).

Shares of Disney have dropped 0.1% to $74.34 at 2:34 p.m., while CBS has gained 0.3% to $60.80, Twenty-First Century Fox has risen 1.5% to $32.77 and Discovery Communications is off 0.1% at $82.61.

Tentative Markets Ahead of Big Data - Ahead of Wall Street

Tuesday, July 30, 2013

The overall mood in the market is expected to remain tentative in today's session as well despite the modestly positive open on positive home price numbers. The economic calendar goes into over drive later this week with the Fed announcement and GDP reports tomorrow and the jobs report on Friday. The market is looking for confirmation that the U.S. economic outlook is improving in a backdrop of continued Fed support.

The two interconnected drivers of the improved U.S. growth outlook relative to the rest of the world include the labor and the housing markets. We will get the latest pulse of the labor market from Friday's July non-farm payroll reading, which is expected to show 'headline' gains around recent monthly levels of a little under 200K. Some acceleration from this level will be highly beneficial, but even sustained gains around current levels should help support steady improvement in consumer spending, the mainstay of the U.S. economy.

The housing momentum is for real as well, but housing is a very interest rate sensitive sector and remains vulnerable to further interest rate increases. The roughly 100 basis point jump in long-term interest rates over the last two months may be just a sign of things to come if the Fed's 'Taper' plan gets underway. The strong gains in this morning's Case-Shiller home price index appear to run counter to these interest rate concerns. We should keep in mind, however, that this home-price measure is essentially meaningless in gauging current home-pricing conditions as it's so backward looking – today's report is for the month of May which only partly overlaps with the period when interest rates started moving up.

Tomorrow's Fed announcement isn't expected to shed any fresh light on the 'Taper' issue and the growth picture emerging from the Q2 GDP report in the morning isn't expected to pack many surprises either. The consensus expectation is for GDP growth of about +1% in Q2 after t! he +1.8% increase in Q1. But the GDP data will be accompanied by revisions to prior data and there could plenty of surprises on that count. It will be interesting to see how the growth numbers for recent quarters and the last few years, particularly since the start of the recovery in 2009, appear with updated numbers.

Accurate data about the recent past is useful, but the markets care far more about forward-looking numbers and the expectation on that front is for the U.S. growth picture to start improving from Q3 onwards. We haven't seen much evidence of such improvement yet, but that's what consensus expectations reflect. Similar expectations underpin earnings estimates for the second half of the year and next year as well, though estimates for Q3 have started coming down under the weight of predominantly negative guidance from management teams on the ongoing Q2 earnings calls.

There is some debate in the market as to whether to label the Q2 earnings season as 'above average', 'average' or 'below average'. Market bulls cite the record total earnings tally in the quarter, the improved beat ratios on the revenue side relative to the prior quarter and the positive earnings growth picture as reasons for calling it an 'above average' reporting season. All of this is true – total Q2 earnings are on track to make a new quarterly record and more companies have beat on the top-line compared to the extremely low level seen in Q1. But the aggregate earnings growth picture is misleading as it primarily reflects gains in one sector – Finance. The growth picture is extremely weak once Finance is excluded from the aggregate numbers. I label the Q2 earnings season as 'below average' because of this weak earnings growth picture and the preponderance of weak guidance.

Including this morning's results from Pfizer (PFE), Merck (MRK), Coach (COH), Aetna (AET) and others, we now have Q2 results from 302 S&P 500 members or 60.4% of the index's total membership. Tota! l earning! s for these 302 companies are up +2.9%, with 65.9% beating earnings expectations. On the revenue side, we have a growth rate of +3.4%, with 49.7% coming ahead of top-line expectations. This compares to total earnings growth rate of +1.8% on +3.7% higher revenues in Q1 for the same group of 302 companies. In terms of beat ratio, 68.2% of these 302 companies had come out with positive surprises in Q1, while only 40.1% had beat on top-lines in Q1. What this tells us that the earnings beat ratio is a bit soft relative to Q1, while favorable top-line surprises are a bit more common.

This aggregate Q2 picture changes materially once the Finance sector is excluded. Total earnings growth turns negative (-3.5% excluding Finance vs. +2.9% including Finance) and even the beat ratios are far less numerous. This lack of breadth in the growth picture is troubling given loftier growth expectations from these sectors in the coming quarters. Given what we have seen outside of Finance in Q2, we will have to bring those expectations down to more realistic levels. That process may have started already, but it still has plenty of room to go.

Sheraz Mian
Director of Research


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Will Netflix Surge Higher On the Dreamworks Deal?

With shares of Netflix (NASDAQ:NFLX) trading around $229, is NFLX 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

Netflix is an Internet subscription service streaming television shows and movies. The company's subscribers can watch unlimited television shows and movies streamed over the Internet to their televisions, computers, and mobile devices, and in the United States, subscribers can also receive DVDs delivered to their homes. A recent deal with Dreamworks (NASDAQ:DWA) is fueling demand for Netflix stock as the streaming service is ramping-up its original programming menu with popular choices from the maker of Shrek, Madagascar, and Kung Fu Panda. Netflix has revolutionized the television and movie industry with its services. Consumers in the United States and around the world look to access their favorite shows and movies via Internet mediums at increasing rates. Look for Netflix's increasing popularity to lead it to rising profits.

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T = Technicals on the Stock Chart are Strong

Netflix stock has seen an explosive run in its stock after seeing a mediocre last two years. The stock continues to plow higher and looks set to test previous all-time highs in the near future. 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, Netflix is trading above its rising key averages which signal neutral to bullish price action in the near-term.

(Source: Thinkorswim)

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

	Implied Volatility (IV)	30-Day IV Percentile	90-Day IV Percentile
Netflix Options	45.78%	56%	55%

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

	Put IV Skew	Call IV Skew
July Options	Flat	Average
August 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 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 Netflix’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for Netflix look like and more importantly, how did the markets like these numbers?

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	2013 Q1	2012 Q4	2012 Q3	2012 Q2
Earnings Growth (Y-O-Y)	162.50%	-78.96%	-88.79%	-91.27%
Revenue Growth (Y-O-Y)	17.72%	7.96%	10.13%	12.75%
Earnings Reaction	24.28%	42.22%	-11.87%	-25.01%

Netflix has seen mixed earnings and increasing revenue figures over the last four quarters. From these numbers, the markets are getting excited about Netflix’s recent earnings announcements.

P = Excellent Relative Performance Versus Peers and Sector

How has Netflix stock done relative to its peers, Amazon (NASDAQ:AMZN), Comcast (NASDAQ:CMCSA), Coinstar (NASDAQ:CSTR), and sector?

	Netflix	Amazon	Comcast	Coinstar	Sector
Year-to-Date Return	148.81%	11.44%	7.84%	13.98%	7.31%

Netflix has been a relative performance leader, year-to-date.

Conclusion

Netflix offer entertainment services highly valued by a growing user base. A recent deal with Dreamworks has investors flocking to the stock. The stock has displayed an explosive move this year that does not show any signs of slowing. Over the last four quarters, earnings have been mixed while revenue figures have been rising which have really made investors excited about the company. Relative to its peers and sector, Netflix has blown them out of the water and has led in year-to-date performance. Look for Netflix to continue to OUTPERFORM.

3D Adds Tech Pioneer Peter Diamandis to Its Board

3-dimensional "printing" pioneer 3D Systems (NYSE: DDD  ) firmed up its ties with would-be asteroid ore miner Planetary Resources Wednesday.

Last month, the companies announced an alliance whereby Planetary Resources would use 3D's additive manufacturing machines to produce parts for its planned fleet of ARKYD spacecraft. Today, 3D took another step toward outer space when it announced it has added Planetary Resources co-founder Dr. Peter H. Diamandis to its board of directors.

In addition to co-founding Planetary Resources, Diamandis is a founder of hypertech learning institution Singularity University, as well as chairman and CEO of the X PRIZE Foundation and of space tourism company Space Adventures.

Welcoming him aboard the 3D Board, Chairman Walter Loewenbaum announced: "We are very pleased to have a person of Peter's caliber join our Board of Directors. Peter brings a unique blend of experience that we expect to enhance the range of skills and expertise within our Board of Directors."

Top 5 Value Stocks To Buy For 2014

Alpha and Omega Semiconductor (AOSL) is a small-cap company whose 2010 IPO can only be described as a complete disaster. Within only a few months of its offering, share prices plunged from the asking price of $18 per share to just over $10 per share. In its short history, the stock has done nothing but disappoint shareholders, slapping them in the face with its current market value of around $7.50 per share.

Valuation has gotten so low that the company looks like a prime takeover target via any one of the major consumer technology companies it supplies. Its portfolio of close to 250 patents (and over 200 more pending) is valued at exactly $0, adding bonus points to the already appealing $11.12 book value per share. Furthermore, rapidly shrinking margins and net income are masking healthy growth in operating cash flow.

Top 5 Value Stocks To Buy For 2014: Tupperware Corporation(TUP)

Tupperware Brands Corporation operates as a direct seller of various products across a range of brands and categories through an independent sales force. The company engages in the manufacture and sale of kitchen and home products, and beauty and personal care products. It offers preparation, storage, and serving solutions for the kitchen and home, as well as kitchen cookware and tools, children?s educational toys, microwave products, and gifts under the Tupperware brand name primarily in Europe, Africa, the Middle East, the Asia Pacific, and North America. The company provides beauty and personal care products, which include skin care products, cosmetics, bath and body care, toiletries, fragrances, nutritional products, apparel, and related products principally in Mexico, South Africa, the Philippines, Australia, and Uruguay. It offers beauty and personal care products under the Armand Dupree, Avroy Shlain, BeautiControl, Fuller, NaturCare, Nutrimetics, Nuvo, and Swissgar de brand names. The company sells its Tupperware products directly to distributors, directors, managers, and dealers; and beauty products primarily through consultants and directors. As of December 26, 2009, the Tupperware distribution system had approximately 1,800 distributors, 61,300 managers, and 1.3 million dealers; and the sales force representing the Beauty businesses approximately 1.1 million. The company was formerly known as Tupperware Corporation and changed its name to Tupperware Brands Corporation in December 2005. The company was founded in 1996 and is headquartered in Orlando, Florida.

Advisors' Opinion:

• [By John Udovich]

  Everyone is familiar with�the Tupperware brand from�consumer products stock Tupperware Brands Corporation (NYSE: TUP) and you are probably familiar with the brands�of mid cap stock Jarden Corp (NYSE: JAH) along with small cap stocks Libbey Inc (NYSEMKT: LBY) and Lifetime Brands Inc (NASDAQ: LCUT); but what about the stocks themselves? Chances are, their brands or products are right under your nose at home and you probably don�� know anything about the mid cap or small cap stock behind them.

• [By Eric Volkman]

  Tupperware Brands (NYSE: TUP  ) is reaching into its corporate bowl for a fresh payout to shareholders. The company has declared a quarterly dividend of $0.62 per share. This will be paid on July 8 to stockholders of record as of June 19. That amount matches the firm's previous distribution, which was paid in early April. Prior to that, Tupperware Brands was rather less generous, handing out $0.36 per share.

• [By Monica Gerson]

  Tupperware Brands (NYSE: TUP) is expected to report its Q3 earnings at $1.03 per share on revenue of $623.34 million.

  Varian Medical Systems (NYSE: VAR) is projected to post its Q4 earnings at $1.12 per share on revenue of $779.02 million.

Top 5 Value Stocks To Buy For 2014: Schlumberger N.V.(SLB)

Schlumberger Limited, together with its subsidiaries, supplies technology, integrated project management, and information solutions to the oil and gas exploration and production industries worldwide. The company?s Oilfield Services segment provides exploration and production services; wireline technology that offers open-hole and cased-hole services; supplies engineering support, directional-drilling, measurement-while-drilling, and logging-while-drilling services; and testing services. This segment also offers well services; supplies well completion services and equipment; artificial lift; data and consulting services; geo services; and information solutions, such as consulting, software, information management system, and IT infrastructure services that support oil and gas industry. Its WesternGeco segment provides reservoir imaging, monitoring, and development services; and operates data processing centers and multiclient seismic library. This segment also offers variou s services include 3D and time-lapse (4D) seismic surveys to multi-component surveys for delineating prospects and reservoir management. The company?s M-I SWACO segment supplies drilling fluid systems to improve drilling performance; fluid systems and specialty tools to optimize wellbore productivity; production technology solutions to maximize production rates; and environmental solutions that manages waste volumes generated in drilling and production operations. Its Smith Oilfield segment designs, manufactures, and markets drill bits and borehole enlargement tools; and supplies drilling tools and services, tubular, completion services, and other related downhole solutions. The company?s Distribution segment markets pipes, valves, and fittings, as well as mill, safety, and other maintenance products. This segment also provides warehouse management, vendor integration, and inventory management services. Schlumberger Limited was founded in 1927 and is based in Houston, Texas.

Advisors' Opinion:

• [By Arjun Sreekumar]

  Opportunities for oilfield services firms
  Not surprisingly, Halliburton and other major energy companies view Chinese shale gas development as a significant opportunity for future growth. Many of them, including Baker Hughes (NYSE: BHI  ) , ConocoPhillips (NYSE: COP  ) , and Schlumberger (NYSE: SLB  ) , have already developed strategic relationships with Chinese firms to better evaluate the nation's shale gas potential.

• [By David Smith]

  Big and not so big at your service
  In the services sector, perhaps the most difficult to comprehend of the sub-sectors, you likely have a good handle on the kingpin, Schlumberger (NYSE: SLB  ) . The company, with a $100 billion market cap, operates in about 85 countries, through the efforts of more than 100,000 employees. Its services include everything from soup to nuts, or seismic to production assistance. So, if you're looking for an ideal company to constitute a single proxy for the services contingent, Schlumberger's a good bet.

5 Best High Tech Stocks To Own For 2014: Dollar Tree Inc.(DLTR)

Dollar Tree, Inc. operates discount variety stores in the United States and Canada. Its stores offer merchandise primarily at the fixed price of $1.00. The company operates its stores under the names of Dollar Tree, Deal$, Dollar Tree Deal$, Dollar Giant, and Dollar Bills. Its stores offer consumable merchandise, including candy and food, and health and beauty care, as well as household consumables, such as paper, plastics, household chemicals, in select stores, and frozen and refrigerated food; variety merchandise, which includes toys, durable housewares, gifts, party goods, greeting cards, softlines, and other items; and seasonal goods, such as Easter, Halloween, and Christmas merchandise. As of April 30, 2011, it operated 4,089 stores in 48 states and the District of Columbia, as well as 88 stores in Canada. The company was founded in 1986 and is based in Chesapeake, Virginia.

Advisors' Opinion:

• [By Dan Moskowitz]

  The shiniest dollar
  Many investors and analysts like to debate which dollar store offers the best investment opportunity. The truth is that Dollar General, Dollar Tree Stores (NASDAQ: DLTR  ) , and Family Dollar Stores (NYSE: FDO  ) are all likely to be quality long-term investments.

Top 5 Value Stocks To Buy For 2014: Caterpillar Inc.(CAT)

Caterpillar Inc. manufactures and sells construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives worldwide. It operates through three lines of businesses: Machinery, Engines, and Financial Products. The Machinery business offers construction, mining, and forestry machinery, including track and wheel tractors, track and wheel loaders, pipelayers, motor graders, wheel tractor-scrapers, track and wheel excavators, backhoe loaders, log skidders, log loaders, off-highway trucks, articulated trucks, paving products, skid steer loaders, underground mining equipment, tunnel boring equipment, and related parts. It also manufactures diesel-electric locomotives; and manufactures and services rail-related products and logistics services for other companies. The Engines business provides diesel, heavy fuel, and natural gas reciprocating engines for Caterpillar machinery, electric power generation systems, marine, petrol eum, construction, industrial, agricultural, and other applications. It offers industrial turbines and turbine-related services for oil and gas, and power generation applications. This business also remanufactures Caterpillar engines, machines, and engine components; and offers remanufacturing services for other companies. The Financial Products business provides retail and wholesale financing alternatives for Caterpillar machinery and engines, solar gas turbines, and other equipment and marine vessels, as well as offers loans and various forms of insurance to customers and dealers. It also offers financing for vehicles, power generation facilities, and marine vessels. The company markets its products directly, as well as through its distribution centers, dealers, and distributors. It was formerly known as Caterpillar Tractor Co. and changed its name to Caterpillar Inc. in 1986. Caterpillar Inc. was founded in 1925 and is headquartered in Peoria, Illinois.

Advisors' Opinion:

• [By John Maxfield]

  Blue-chip stocks are lower today after mixed earnings results from Apple (NASDAQ: AAPL  ) and Caterpillar (NYSE: CAT  ) competed with a report that new-home sales came in above expectations for the month of June. With roughly an hour left in the trading session, the Dow Jones Industrial Average (DJINDICES: ^DJI  ) is down by 41 points, or 0.26%.

• [By Ben Eisen]

  Caterpillar Inc. (CAT) �gained 1.8% after Bank of America analysts upped the stock to buy from neutral. The price target was raised to $100 from $87, reflecting a brighter earnings outlook, fueled by growth in the construction equipment company�� power-systems unit.

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.

Trade Deficit Widens to $45 Billion for May

The U.S. international trade deficit widened again in May, according to a Commerce Department report (link opens as PDF) released today.

After worsening to a revised $40.1 billion for April, analysts had expected a slight slump to $40.8 billion. Their predictions proved overly optimistic, as the deficit (exports minus imports) widened to $45.0 billion for May.

Source: Census.gov. 

In a trade deficit double-whammy, exports fell $0.5 billion from April's $187.6 billion, while imports increased $4.4 billion to $232.1 billion.

Trade deficits prove quite different across sectors. While the services sector added another $0.2 billion for a $18.4 billion surplus, the goods deficit worsened $5.0 billion to $63.4 billion. The biggest goods losses came from major import increases in industrial supplies ($1.0 billion), consumer goods ($1.0 billion), and automotive vehicles and parts ($0.8 billion).

Compared to May 2012, overall exports are up 1.5%, more than enough to offset a 0.7% import increase .

Can NVIDIA's Shield Kick-Start Android Gaming?

The following video is from The Motley Fool's weekly Tech Review, in which host Chris Hill talks all things tech with Fool analysts Eric Bleeker and Lyons George.

NVIDIA (NASDAQ: NVDA  ) will be releasing its Shield mobile gaming console, which will be a platform for Android-based games, at a $300 price point. Is this going to be a product that will be attractive to consumers? Is there enough content available in terms of Android games geared toward a gamepad to make this an interesting device? In this segment, Lyons and Eric discuss the many challenges NVIDIA's new device will face to find a place in the market, and why this may be way too far out of the company's core competency to succeed.

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

The relevant video segment can be found between 10:54 and 15:26.

For the full video of this edition of the weekly Tech Review, click here.

How many more wolves are left on Wall Street?

Stratton Oakmont, the notorious Long Island, N.Y., boiler room brokerage, was shut down by securities regulators at the end of 1996. Almost two decades later, “The Wolf of Wall Street” has brought the firm back to life, with drugs, sex and greed as the stars in the Martin Scorsese hit.

Stratton Oakmont because infamous in the first half of the 1990s as hundreds of brokers, working from scripts, cold-called prospects to hawk essentially worthless initial public offerings, eventually raising more than $1 billion in IPO cash. Its listings included the shoe company Steve Madden Ltd. and KICK, the stock symbol for karate school Master Glazier's Karate International Inc.

The movie has spurred a debate about morality and Wall Street. A movie about Stratton Oakmont, however, raises another set of questions, not about morality, but rather investor safety.

Advisers and their clients may want to know whether the securities and financial advice industries have evolved since 1996, when Stratton Oakmont was at its apex.

Could a Stratton Oakmont rise again? Is the American investing public better protected now than it was almost two decades ago? And does it still believe that investing in the IPOs of shoe salesmen and karate schools will lead to fabulous riches?

“Could there be another Stratton Oakmont today? Certainly, but not on as grand a scale,” said Barry Goldsmith, a partner at Gibson Dunn & Crutcher and former executive vice president of enforcement at NASD, now the Financial Industry Regulatory Authority Inc. “There are still bad brokers and plenty of bad firms out there, but the boiler rooms are smaller.”

Investors and securities regulators, to varying degrees, are more wise to pump-and-dump stock scams, said Mr. Goldsmith, who joined NASD in 1996 as securities regulators were preparing to shut Stratton Oakmont down. And the lousy firms are no longer concentrated in one area, such as Long Island, as they were in the Stratton Oakmont era, making it more difficult for rogue brokers to jump from one firm to the next.

“People are still sold Ponzi schemes and bank notes with fictitious returns, but investors are more sophisticated when it comes to securities transactions,” Mr. Goldsmith said. “When it comes to pushing securities and orchestrating pump-and-dumps using retail customers, investors are more sophisticated and regulators are less tolerant.”

Investment fraud has not abated since Stratton Oakmont was shut down. If anything, it's gotten worse. Bernie Madoff's Ponzi scheme, which created $18 billion in losses for investors, makes Stratton Oakmont's pump-and-dump frenzy look like kids' play.

But securities regulators, criticized for missing the Madoff scheme and dozens of other Ponzis revealed during the credit crisis, appear to be moving against penny stock promoters before they! can establish deep roots.

The Securities and Exchange Commission last month barred Anastasios “Tommy” Belesis, chief executive of the defunct John Thomas Financial Inc., for negligence. He still faces an open fraud complaint from Finra that alleges he bullied brokers, lied to senior staff and intimidated colleagues as his firm sold penny stocks. According to sworn affidavits submitted last winter by ex-John Thomas brokers, the firm promoted at least one pump-and-dump stock scheme of a silver mining firm.

The boiler room broker is a dying breed, noted Josh Brown, a blogger and investment adviser. “These guys are dying out,” Mr. Brown wrote in a blog post last month. Mr. Brown began his career on Long Island in the late 1990s, rubbing shoulders with some refugees from assorted boiler rooms.

“Their licenses are Swiss cheese, and potential suckers don't answer their land line phones anymore,” he wrote. “It's hard to con someone you can't get in touch with.”

This is good news for investment advisers and their clients. However, plenty of dangers remain in the marketplace, particularly involving the sale of single products, Mr. Goldsmith noted. In the run up to the credit crisis, such high-paying schemes ranged from Mr. Madoff's phony hedge fund to false notes issued by Medical Capital Holdings Inc.

The Stratton Oakmont story is a reminder that financial advisers and their clients need to be as vigilant as ever. Victims of such frauds typically recover pennies for each dollar they invest.

“A lot [of Stratton Oakmont clients] weren't wealthy and couldn't afford to lose what they lost,” Mr. Goldsmith said. “The brokers used high-pressure sales tactics. It was relentless.”

DigitalGlobe Beats on EPS But GAAP Results Lag

DigitalGlobe (NYSE: DGI  ) reported earnings on May 7. Here are the numbers you need to know.

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

Compared to the prior-year quarter, revenue grew significantly. Non-GAAP earnings per share didn't move. GAAP earnings per share shrank to a loss.

Margins dropped across the board.

Revenue details
DigitalGlobe chalked up revenue of $127.6 million. The nine analysts polled by S&P Capital IQ wanted to see a top line of $137.8 million on the same basis. GAAP reported sales were 47% higher than the prior-year quarter's $87.0 million.

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

EPS details
EPS came in at $0.08. The five earnings estimates compiled by S&P Capital IQ predicted -$0.36 per share. Non-GAAP EPS of $0.08 were the same as the prior-year quarter. GAAP EPS were -$0.96 for Q1 compared to $0.08 per share for the prior-year quarter.

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

Margin details
For the quarter, gross margin was 67.9%, much worse than the prior-year quarter. Operating margin was -31.7%, much worse than the prior-year quarter. Net margin was -47.5%, much worse than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $159.2 million. On the bottom line, the average EPS estimate is -$0.05.

Next year's average estimate for revenue is $644.9 million. The average EPS estimate is -$0.19.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 100 members out of 106 rating the stock outperform, and six members rating it underperform. Among 24 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 23 give DigitalGlobe a green thumbs-up, and one give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on DigitalGlobe is outperform, with an average price target of $32.06.

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Add DigitalGlobe to My Watchlist.

Small Cap CytRx Corporation (CYTR) Starts the Year Out With a Bang (IBB & XBI)

Small cap biotech stock CytRx Corporation (NASDAQ: CYTR) started the new year jumping 10.05% for an almost 50% rise over the past week or so after it surged 68.2% in one day in early December, meaning it might be time to take a closer look at the stocks along with the performance of biotech ETF benchmarks like the iShares NASDAQ Biotechnology Index ETF (NASDAQ: IBB) and SPDR S&P Biotech ETF (NYSEARCA: XBI). I should mention that we have recently added CytRx Corporation to our SmallCap Network Elite Opportunity (SCN EO) portfolio since December 20th and we are up around 49% since then.

What is CytRx Corporation?

Small cap CytRx Corporation is a biopharmaceutical research and development company specializing in oncology whose pipeline is focused on the clinical development of aldoxorubicin (formerly known as INNO-206), an improved version of the widely used chemotherapeutic agent doxorubicin. In addition, CytRx Corporation is expanding its pipeline of oncology candidates:

CytRx Corporation also has rights to two additional drug candidates, tamibarotene and bafetinib with the company having completed its evaluation of bafetinib in the ENABLE Phase 2 clinical trial in high-risk B-cell chronic lymphocytic leukemia (B-CLL). There are plans to seek a partner for further development of bafetinib plus the company is evaluating further development of tamibarotene. 

As for performance benchmarks or peers, the iShares NASDAQ Biotechnology Index ETF tracks the Nasdaq Biotechnology Index through 119 stocks and has a 77.18% weight in "biotechnology" and a 22.78% weight in Pharma while the SPDR S&P Biotech ETF tracks the S&P Biotechnology Select Industry Index with a 100% allocation in 57 biotechnology stocks

What You Need to Know or Be Warned About CytRx Corporation

There appears to be no end of the year news about CytRx Corporation to account for the sudden nearly 50% rise in shares for the last trading week of the year beyond a positive article on Seeking Alpha (CytRx Corporation Poised For Success In 2014) last Tuesday and another one in Forbes (The Race To Develop A Brain Cancer Treatment Takes An Interesting Turn) last Friday which appeared to get things moving for the stock.

Earlier in December, CytRx Corporation surged 68.2% when the company announced that its potential treatment aldoxorubicin had fared much better than an established chemotherapy in mid-stage testing on patients with soft-tissue sarcoma (a cancer that occurs in muscle, fat, blood vessels, tendons and other tissue) with the median progression-free survival being 8.4 months verses 4.7 months for patients who just took the chemotherapy doxorubicin (which has been on the market for decades). Investigators also found that the disease had not progressed after six months for 67% of aldoxorubicin patients verses 36% for patients in the other group. It should be mentioned that according to the American Cancer Society, about 11,410 new soft tissue sarcomas would have been diagnosed (6,290 cases in males and 5,120 cases in females) in the USA this year and 4,390 Americans (2,500 males and 1,890 females) are expected to have died from the disease at the end of this year - not particularly big numbers, but that may not matter as CYTR can probably charge a premium for aldoxorubicin should it gain FDA approval. 

Moreover, the Forbes article gave this rather rosy forecast:

Given the remarkable results that aldoxorubicin demonstrated in 1st-Line STS, it's hard not to believe that something similar could be in store for the Phase 2 GBM trial.  CytRx certainly appears poised for a significant run in the months and years ahead as the company's platform continues to be validated by science….. CytRx Corporation appears to be an extremely compelling investment story and investors may want to consider taking a position before the share price really starts to take off.

On the financials side of things, CytRx Corporation has reported revenues of $100k (2012), $250k (2011), $100k (2010) and $9.5M (2009) for the past four years plus net losses of $17.96M (2012) and $14.42M (2011), net income of $41k (2010) and a net loss of $4.80M (2009) while for this year, the company has reported just $200k in revenues and net losses of $9.980M (Sept 30, 2013), $3.423M (June 30, 2013) and $6,864M (March 31, 2013). More importantly though, CytRx Corporation had $6.036M in cash and $17M in short term investments at the end of September before an October share offering raised approximately $25.9 million (gross) to add to that. In other words, the company is not endanger of running out of cash any time soon. 

Share Performance: CytRx Corporation vs. IBB and XBI

On Thursday, small cap CytRx Corporation jumped 10.05% to $6.90 (CYTR has a 52 week trading range of $1.83 to $7.30 a share) for a market cap of $289.63 million plus the stock is up 277% over the past year and up 228.7% over the past five years. Here is a look at CytRx Corporation's performance verses that of biotech ETF benchmarks the iShares NASDAQ Biotechnology Index ETF and SPDR S&P Biotech ETF:

As you can see from the above chart, the performance of small cap CytRx Corporation has finally caught up to the performance of biotech ETFs.

Finally, here is a look at the latest technical charts for CYRT (note the pull back after the early December surge) plus the iShares NASDAQ Biotechnology Index ETF and SPDR S&P Biotech ETF:

The Bottom Line. If you were like us and got into small cap CytRx Corporation when we did or before early December, then congratulations while new investors might want to be more cautious and wait for some pull back (as what happened after the early December surge) before getting in. Nevertheless, CytRx Corporation is looking like a pretty good long term biotech bet.

SmallCap Network Elite Opportunity (SCN EO) has an open position in CYTR. To find out what other open positions SCN EO currently has, and to learn why so many traders and investors are relying on this premium subscription service, click here to find out more.

10 small-business resolutions for the new year

Let these New Year's Resolutions from small-business owners and managers in the Shreveport, La., area inspire you to get started on a more prosperous 2014.

1. Analyze your customer service. "If customers don't think they are getting the best service, they are going to go elsewhere." — Diana M. Simek of Ark-La-Tex Export & Technology Center

COLUMN: Nail down resolutions for your business
COLUMN: Resolutions too daunting? Try intentions

2. Focus on a customer's needs. — Theudas Allen of Allen's Grill

3. Operate with integrity, treat people well and keep prices reasonable. — Eddie J. Brumfield of Jace Consulting

4. Reach out to the generation that grew up with the Web to persuade them that not all shopping is best online. — Ginger Clarke of Clarkes Jewelers

5. Emphasize that buying from us means service is free. If they buy online, they'll still have to pay elsewhere for service. — Don Peach of Shreveport Music

6. Make it convenient for a client to do business with you. We're going to be focusing on better pick-up and drop-off. — Edric Richardson of Cool Geeks computer repair and website design

7. Market to everybody in your neighborhood. We've got 8,000 to 12,000 potential customers downtown right near us. — Gayle Dixon of Downtown Tire and Accessories

8. Set your sights beyond local customers. — Zayne Grantham of Diamond Heart Design, graphic design and Web development

9. Work from home when you can. Sometimes planning can get lost in a crush of clients. — Bobby Jones of Fork and Spoon Market

10. Plan 2014 out now, so clients can count on you each week throughout the year. — Laura Hayes of Healthy Me Nutrition and River Cities Nutrition

Jay Mitchell, chief executive of Clarkes Jewelers in Shreveport, La., with a display case of Rolex watches.(Photo: Jim Hudelson, The (Shreveport, La.) Times)

Best Cheap Companies To Buy For 2014

Apple (NASDAQ: AAPL  ) shares are finally starting to heat up, but it's Yum! Brands' (NYSE: YUM  ) Taco Bell that's getting Fiery.

Fiery Doritos Locos Tacos -- the latest installment in the wildly successful line of crunchy tacos served on Doritos-flavored shells -- hits the market on Thursday.

Taco Bell knows what it's doing. Comps at its domestic eateries soared 8% last year, and a major contributor was the Doritos Locos Tacos that were introduced in March. The original Nacho Cheese Doritos-flavored shells were a smash hit, so Taco Bell followed that up with Cool Ranch earlier this year. The spicier Fiery offering is now just days away from joining the growing product line.

Taco Bell has sold 600 million Doritos Locos Tacos since last year's rollout.�

Now, Apple fans may very well be fuming right now. How dare I compare Apple to the haven of cheap and convenient fast food? If anything, Apple is Chipotle Mexican Grill. Its products are worth a little more, but there's a cult following where folks don't mind waiting in long lines for what they want.�

Best Cheap Companies To Buy For 2014: Sprott Resource Lending Corp.(SILU)

Sprott Resource Lending Corp., a natural resource lender, provides bridge and mezzanine financing to precious and base metal mining, exploration, and development companies, as well as energy companies worldwide. The company was formerly known as Quest Capital Corp. and changed its name to Sprott Resource Lending Corp. in September 2010. Sprott Resource Lending Corp. was incorporated in 1980 and is based in Toronto, Canada.

Best Cheap Companies To Buy For 2014: Lionbridge Technologies Inc.(LIOX)

Lionbridge Technologies, Inc. provides language, development, and testing services. Its Global Language and Content segment provides product localization services, such as creating foreign language versions of its clients? products and software applications, including the user interface, online help systems, and documentation; and content translation services, such as translating and maintaining clients? Web-based content, eLearning courseware and training materials, technical support, and sales and marketing information. It also offers technical authoring, eLearning courseware development, and production and integration of content; and global language and content services delivery. The company?s Global Development and Testing segment develops and maintains on-premise, SaaS, and smart phone and tablet applications, as well as provides Web production services. This segment also offers various testing services under the VeriTest brand, including managed test teams, test proc ess design, test automation, functional testing, performance testing, globalization testing, and product certification. In addition, it provides specialized search relevance, online content editorial, keyword optimization, and related services. Its Interpretation segment offers interpretation services for government business and healthcare organizations that require experienced linguists to facilitate communication. It provides interpretation communication services, such as onsite interpretation, over-the-phone interpretation and interpreter testing, training, and assessment services in approximately 360 languages and dialects. The company serves the technology, mobile and telecommunications, Internet and media, life sciences, government, manufacturing, automotive, retail, and aerospace sectors in the Americas, Europe, and Asia. Lionbridge Technologies, Inc. was founded in 1996 and is headquartered in Waltham, Massachusetts.

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 Lionbridge Technologies (Nasdaq: LIOX  ) , whose recent revenue and earnings are plotted below.

Top 10 Penny Companies To Buy Right Now: AeroVironment Inc.(AVAV)

AeroVironment, Inc. designs, develops, produces, and supports unmanned aircraft systems (UAS), and efficient energy systems for various industries and governmental agencies. Its UAS provide intelligence, surveillance, and reconnaissance, including real-time tactical reconnaissance, tracking, combat assessment, and geographic data to the small tactical unit or individual war fighter. The UAS wirelessly transmit critical live video and other information generated by their payload of electro-optical or infrared sensors directly to a hand-held ground control system, enabling the operator to view and capture images during the day or at night on a hand-held ground control unit. AeroVironment also provides spare equipment, alternative payload modules, batteries, chargers, repair services, and customer support for the UAS. In addition, the company produces industrial productivity and clean transportation solutions for commercial and government customers, develops potential clean t ransportation solutions, and performs contract engineering services; offers PosiCharge electric vehicle charging systems for industrial electric material handling fleets, electric vehicle charging systems for passenger and fleet vehicles, and power cycling and test systems for developers and manufacturers of plug-in electric and hybrid vehicles, as well as battery packs, electric motors, and fuel cells; and supplies power cycling and test systems to research and development organizations that focus on developing electric propulsion systems, electric generation systems, and electricity storage systems. It supplies its UAS primarily to the organizations within the United States department of defense. AeroVironment, Inc. was incorporated in 1971 and is headquartered in Monrovia, California.

Advisors' Opinion:

• [By Alex Planes]

  Investors love stocks that consistently beat the Street without getting ahead of their fundamentals and risking a meltdown. The best stocks offer sustainable market-beating gains, with robust and improving financial metrics that support strong price growth. Does AeroVironment (NASDAQ: AVAV  ) fit the bill? Let's look at what its recent results tell us about its potential for future gains.

• [By Jon C. Ogg]

  Aerovironment�Inc. (NASDAQ: AVAV) was maintained Neutral but its 2014 earnings estimates were cut by almost half after the company signaled order delays in its earnings report.

Best Cheap Companies To Buy For 2014: Local.com Corporation(LOCM)

Local.com Corporation operates as an Internet search advertising company that enables businesses and consumers to find each other and connect locally. Its Owned and Operated business unit manages its flagship online property Local.com and a proprietary network of approximately 20,000 local Websites that reach approximately 15 million monthly unique visitors. The company places various display, performance, and subscription advertisement products on its Local.com and proprietary network. Its Network business unit operates a private label local syndication network of approximately 1,000 U.S. regional media Websites; 80,000 third-party local Websites; and its own organic feed of local businesses plus third-party advertising feeds that focus primarily on local consumers to a distribution network of hundreds of Websites. The company?s Sales and Ad Services business unit provides approximately 45,000 direct monthly subscribers with Web hosting or Web listing products. The compan y was formerly known as Interchange Corporation and changed its name to Local.com Corporation in November 2006. Local.com Corporation was founded in 1999 and is headquarters in Irvine, California.

Best Cheap Companies To Buy For 2014: Advance Auto Parts Inc(AAP)

Advance Auto Parts, Inc., through its subsidiaries, operates as a retailer of automotive aftermarket parts, accessories, batteries, and maintenance items. It operates in two segments, Advance Auto Parts (AAP) and Autopart International (AI). The AAP segment operates stores, which primarily offer auto parts, including alternators, batteries, chassis parts, clutches, engines and engine parts, radiators, starters, transmissions, and water pumps; accessories comprising floor mats, mirrors, vent shades, MP3 and cell phone accessories, and seat and steering wheel covers; chemicals consisting of antifreeze, freon, fuel additives, and car washes and waxes; and oil and other automotive petroleum products. This segment also provides battery and wiper installation, battery charging, check engine light reading, electrical system testing, video clinics and project brochures, loaner tool programs, and oil and battery recycling services; and sells its products through online. The AI segm ent operates stores that offer replacement parts for domestic and imported cars, and light trucks to customers in northeast and mid-Atlantic regions, as well as to warehouse distributors and jobbers in North America. As of January 1, 2011, the company operated 3,369 AAP stores, including 3,343 stores located in the northeastern, southeastern, and Midwestern regions of the United States under the Advance Auto Parts and Advance Discount Auto Parts trade names; 26 stores situated in Puerto Rico and the Virgin Islands under the Advance Auto Parts and Western Auto trade names; and 194 stores under the Autopart International trade name in the United States. It serves do-it-yourself, do-it-for-me, or commercial customers. The company was founded in 1929 and is based in Roanoke, Virginia.

Advisors' Opinion:

• [By Lauren Pollock]

  Among the companies with shares expected to actively trade in Wednesday’s session are Mattel Inc.(MAT), Stanley Black & Decker Inc.(SWK) and Advance Auto Parts Inc.(AAP)

• [By Ben Levisohn]

  Autozone has dropped 0.3% to $413.22 �, while�Pep Boys (PBY) has gained 0.2% to $12.19 , Advanced Auto Parts�(AAP) has risen 0.3% to $80.35, and O’Reilly Automotive (ORLY) has advanced 0.3% to $124.42 .

• [By CanadianValue]

  At the end of 2011, Advance Auto Parts (AAP) and O��eilly Automotive (ORLY) were the fifth- and tenth-largest positions in the Fund, respectively, and together constituted 6.2% of our assets. Auto parts retail is a difficult business for all but the most efficient players. An auto parts retailer must carry literally thousands of hard parts for hundreds of models of cars. Not many people walk in the door needing an alternator for a 1994 Ford, but the person who does is probably experiencing a crisis. The retailer who can manage a substantial investment in slow-turning parts inventory is able to earn a high margin on sales.

• [By Ben Levisohn]

  Investors really like Advance Auto Parts (AAP) deal to buy a chain of repair shops–so much so that a stock that finished yesterday in the low 80s is now trading in the mid-90s.

  Agence France-Presse/Getty Images

  Reuters has the details on the deal:

  Advance Auto Parts Inc will buy 1,418 outlets of the Carquest chain to boost its auto repair operations to complement its car parts business, sending its shares up as much as 20 percent to a record high.

  Advance Auto, which sells products such as batteries, air fresheners and engine parts, said it would buy General Parts International Inc for just over $2 billion, creating the largest North American retailer of auto parts.

  General Parts is the biggest operator of the Carquest chain, which runs auto repair shops and car parts stores. General Parts also owns Worldpac, the No.1 supplier of replacement parts for imported car and truck brands.

  Reuters notes that the finished product will be the largest supplier of auto parts by sales, just beating out Autozone (AZN).

  Credit Suisse analyst Simeon Gutman and team call the deal a “smart strategic acquisition.” They write:

  The acquisition would solve two important issues for AAP. First, it has struggled in the DIFM segment, primarily due to a weaker and less accessible distribution network. General Parts has one of the most established distribution networks in the country (~40 DCs vs. AAP’s 10) and long standing relationships with mechanics nationwide. More importantly, WORLDPAC (estimated $1 billion in sales) is the leader in foreign parts with AAP owning the number three player and we see synergies from AI flooding into WORLDPAC.

  A meaningfully positive aspect of the transaction is targeted annual cost savings of roughly $160 million within three years (~6.1% of acquired sales). This seems relatively consistent with previous DIY Auto deals. The deal is expected to be 20%+ accretive to FY 14 ca

Best Cheap Companies To Buy For 2014: S&P Smallcap 600(PH)

Parker Hannifin Corporation manufactures fluid power systems, electromechanical controls, and related components worldwide. Its Industrial segment offers pneumatic and electromechanical components, and systems; filters, systems, and instruments to monitor and remove contaminants from fuel, air, oil, water, and other liquids and gases; connectors that control, transmit, and contain fluid; hydraulic components and systems for builders and users of industrial and mobile machinery and equipment; critical flow components for process instrumentation, healthcare, and ultra-high-purity applications; and static and dynamic sealing devices. This segment sells its products to original equipment manufacturers (OEMs) and their replacement markets in the manufacturing, transportation, and processing industries. The company?s Aerospace segment provides flight control systems and components, including hydraulic, electrohydraulic, electric backup hydraulic, electrohydrostatic, and electro -mechanical components for precise control of aircraft rudders, elevators, ailerons, and other aerodynamic control surfaces. It also provides electronics thermal management heat rejection systems, and single-phase and two-phase heat collection systems for radar, ISAR, and power electronics. This segment markets its products primarily to OEMs in the commercial, military, and general aviation markets, as well as to end users. Its Climate and Industrial Controls segment offers systems and components primarily for use in the mobile and stationary refrigeration, and air conditioning industry; and in fluid control applications in various industries, such as processing, fuel dispensing, beverage dispensing, and mobile emissions. This segment serves OEMs and their replacement markets. Parker-Hannifin Corporation markets its products through direct-sales employees, independent distributors, wholesalers, and sales representatives. The company was founded in 1918 and is headquartered i n Cleveland, Ohio.

Advisors' Opinion:

• [By Sue Chang and Ben Eisen]

  Parker-Hannifin Corp. (PH) �shares climbed 5.2% after the motion and control technologies company reported its first-quarter earnings rose to $1.61 a share from $1.57 a share.

Best Cheap Companies To Buy For 2014: CVS Corporation(CVS)

CVS Caremark Corporation operates as a pharmacy services company in the United States. The company?s Pharmacy Services segment provides a range of pharmacy benefit management services, including mail order pharmacy services, specialty pharmacy services, plan design and administration, formulary management, and claims processing; and drug benefits to eligible beneficiaries under the Federal Government?s Medicare Part D program. This segment primarily serves employers, insurance companies, unions, government employee groups, managed care organizations and other sponsors of health benefit plans, and individuals. As of December 31, 2010, it operated 44 retail specialty pharmacy stores, 18 specialty mail order pharmacies, and 4 mail service pharmacies located in 25 states, Puerto Rico, and the District of Columbia. This segment operates business under the CVS Caremark Pharmacy Services, Caremark, CVS Caremark, CarePlus CVS/pharmacy, CarePlus, RxAmerica, Accordant, and TheraCom names. The company?s Retail Pharmacy segment sells prescription drugs, over-the-counter drugs, beauty products and cosmetics, seasonal merchandise, greeting cards, and convenience foods through its pharmacy retail stores and online, as well as offers film and photo finishing, and health care services. This segment operated 7,182 retail drugstores located in 41 states, Puerto Rico, and the District of Columbia; and 560 retail health care clinics in 26 states and the District of Columbia under the MinuteClinic name. It has a strategic alliance with Alere, L.L.C. for the management of disease management program offerings that cover chronic diseases, such as asthma, diabetes, congestive heart failure, and coronary artery disease. CVS Caremark Corporation was founded in 1892 and is based in Woonsocket, Rhode Island.

Advisors' Opinion:

• [By Barbara Kollmeyer]

  CVS Caremark Corp. (CVS) �shares rose 2.5% in premarket trading after the company said profit rose to $1.02 a share, from 79 cents a share. The firm increased and narrowed its outlook for the 2013 fiscal year, projecting a range of $3.98 to $4.01 per share, including gains from a legal settlement.

• [By Keith Speights]

  Express Scripts isn't alone in experiencing improved generic utilization. CVS Caremark (NYSE: CVS  ) saw its overall rate increase from 76.5% in its first quarter of 2012 to 80.5% in the same quarter this year. UnitedHealth didn't report detailed numbers for OptumRx last quarter, but noted that it was seeing improvements in its generic mix that helped drive earnings higher. Catamaran (NASDAQ: CTRX  ) also experienced a solid 3% year-over-year jump during the first quarter to 83%.

• [By Anh HOANG]

  While Rite Aid is considered a good turnaround story, its bigger peers�CVS Caremark (NYSE: CVS  ) and Walgreen (NYSE: WAG  ) are seen as having better-established businesses with more stable operating performances. Let's take a closer look at Rite Aid to see whether or not it is a good buy compared to the competition.

Best Cheap Companies To Buy For 2014: Ford Motor Credit Company(F)

Ford Motor Company primarily develops, manufactures, distributes, and services vehicles and parts worldwide. It operates in two sectors, Automotive and Financial Services. The Automotive sector offers vehicles primarily under the Ford and Lincoln brand names. This sector markets cars, trucks, and parts through retail dealers in North America, and through distributors and dealers outside of North America. It also sells cars and trucks to dealers for sale to fleet customers, including daily rental car companies, commercial fleet customers, leasing companies, and governments. In addition, this sector provides retail customers with a range of after-sale vehicle services and products in the areas, such as maintenance and light repair, heavy repair, collision repair, vehicle accessories, and extended service contracts under the Ford Service, Lincoln Service, Ford Custom Accessories, Ford Extended Service Plan, and Motorcraft brand names. The Financial Services sector offers vari ous automotive financing products to and through automotive dealers. It offers retail financing, which includes retail installment contracts for new and used vehicles; direct financing leases; wholesale financing products that comprise loans to dealers to finance the purchase of vehicle inventory; loans to dealers to finance working capital, purchase real estate dealership, and/or make improvements to dealership facilities; and other financing products, as well as provides insurance services. Ford Motor Company was founded in 1903 and is based in Dearborn, Michigan.

Advisors' Opinion:

• [By Daniel Miller]

  As the U.S. economy continues its gradual rebound, it's mirrored by a surge in automotive sales. That news is to the delight of Detroit rivals Ford (NYSE: F  ) and General Motors (NYSE: GM  ) . Ford's having great success with its fuel-efficient vehicles such as the Fusion and Focus. It's also enjoying record sales with the Escape and Explorer. One thing that GM has over Ford ��by far ��is a luxury lineup that's actually selling: Last year the Escape more than doubled the sales of the entire Lincoln brand ��ouch. Let's see what's going on with the Cadillac lineup and why it's important for investors.

• [By Jason Moser]

  I owe my love of investing to my father. And with that in mind, I give you the Father's Day Portfolio. These are 10 stocks that remind me of my dad, and together they will form a formidable, market-beating team that will offer investors outstanding returns for years to come.

  Dick's Sporting Goods� (NYSE: DKS  ) is a family affair. CEO Edward Stack is the son of founder Richard Stack, and he owns close to 18%�of the shares outstanding. I like what this company has done and where it's headed. It controls 8.5% of the tremendous sporting-goods market. Boston Beer� (NYSE: SAM  ) �seems an appropriate call here. Having a beer with your dad is one of the great moments in life, and given that this company sold more than 50 beer varieties under the Samuel Adams brand in 2012, chances are pretty darn good that there may be a Sam Adams in Dad's fridge. My dad drives a�Ford� (NYSE: F  ) Expedition, and he's owned a few other Fords in his life. Every time I see the blue oval I think of him, and I think this company will play a big part in the fast-changing automobile market.� I smile so wide it looks like I have a coat hanger in my mouth when I see my dad using his iPhone and iPad, courtesy of�Apple. The guy turned 71 this Father's Day (happy birthday, Dad!) and he's embraced technology like a 15-year-old. We all know that if you have a question these days you can just ask�Google. These guys do a lot of things well, but search and maps are their specialty. It's not just iDevices for my dad, either. He loves his new Kindle Paperwhite from Amazon.com, not to mention the fact that he can order just about anything from the e-commerce giant. My dad's a doctor, and�St. Jude Medical� (NYSE: STJ  ) is a device company that has a wonderfully diverse product mix. From heart devices to strokes, Parkinson's, and migraines, �this company is playing a big role in up-and-coming medical technology. Shout-out No. 1 to our Ge
• [By Daniel Miller]

  The financial crisis and ensuing recession caused a lot of pain for Detroit's Big Three automakers, Ford (NYSE: F  ) , General Motors (NYSE: GM  ) and Chrysler. Inefficient operations, massive incentives, and drastic declines in sales ended in two bankruptcies ��with Ford the lone survivor ��and a huge cash crunch. The companies are still feeling some of the after effects of the cash crunch; it's a big reason GM has the oldest vehicle lineups in the industry. With a limited amount of cash, redesigning and developing vehicles was very limited for all three automakers, and is also the reason Ford's Lincoln brand was left for dead.

• [By John Rosevear]

  Luxury cars are huge in China, where Volkswagen's (NASDAQOTH: VLKAY  ) Audi brand rules the market, a market that is expected to grow rapidly for years to come. A bunch of big global automakers, including both General Motors (NYSE: GM  ) and Ford (NYSE: F  ) , are angling for a share of this rich pie -- and now, Honda (NYSE: HMC  ) is throwing its hat into the ring.