Saturday, July 7, 2012

Tech Stocks: Salesforce surge highlights tech action

SAN FRANCISCO (MarketWatch) � led a day of gains across the technology sector, as the company�s results won rave reviews on Wall Street.

/quotes/zigman/338061/quotes/nls/crm CRM 135.75, -6.67, -4.68% /quotes/zigman/68270/quotes/nls/aapl AAPL 605.88, -4.06, -0.67% /quotes/zigman/3870025 SPX 1,354.68, -12.90, -0.94% CRM �closed the day up 9% to $143.64. The stock has risen more than 40% since the beginning of the year, outpacing Wall Street favorite Apple Inc.,�which has gained 29% year-to-date.

Apple AAPL shares closed up 1.2% at $522.41. The company has agreed to buy mobile software applications company Chomp Inc. for about $50 million, according to media reports.�s financials highlighted optimism about the future of the software-as-a-service market in which companies offer business applications as a Web-based service, allowing companies to slash IT costs. This was evident Friday as shares of Salesforce rival NetSuite Inc. N jumped more than 5% by the close to $49.47.

Salesforce reported an adjusted profit of 43 cents a share, on revenue of $632 million, topping Wall Street expectations for a profit of 40 cents a share and sales of $624 million. But what truly wowed analysts was the company�s 57% billings growth.

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�Good heavens!� JMP Securities analyst Patrick Walravens said in an email. �I think it�s fair to say it�s historically significant for the software industry.�

In a note, he said, �While the software-as-a-service trend has been growing rapidly since 2005, it is now exploding as major enterprises are accelerating their adoption of cloud computing.�

Cloud computing is the new IT model in which businesses, instead of spending loads of money on running their own data centers, access IT needs through a network. Customers typically pay a fee based on the number of users for access to applications used for such tasks as managing a company�s finances to keeping track of inventory.

The trend is catching on fast.

In a call with analysts on Thursday, Salesforce Chief Executive Marc Benioff said the company �signed more than 100 seven-figure transactions and nine eight-figure transactions in the quarter.� Among the customers he mentioned were Hewlett-Packard Co. HPQ �, Time Warner Cable, Nvidia Corp. NVDA � and Activision Blizzard Inc. ATVI �

Not all analysts were impressed, however.

Cowen analysts Peter Goldmacher and Joe Del Callar maintained an underperform rating on Salesforce, arguing that the company�s billings growth was �artificially inflated� by a couple of factors, including the impact of the company�s shift to an annual billing system from a mainly quarterly system.

Click to Play High-end headphone sales surge

Celebrities such as Dr. Dre and 50 Cent are entering the high-end headphone market, Dan Gallagher reports on digits.

�Looking at deferred [revenue] on an apples to apples comparison, we believe that sales force productivity likely declined again this quarter,� they wrote.

In an interview, Del Callar said, �It�s a solid quarter. It�s just not a blowout quarter. And valuation is still high.�

In December, Cowen downgraded Salesforce, pointing to the growing competitive threat from bigger software companies led by Oracle Corp. ORCL �and Microsoft Corp.MSFT �

Traditional software companies have made money by licensing their products to businesses. But Oracle has been aggressively building up its software-as-a-service capabilities.

Oracle shares were up 1.5% Friday, giving the broader sector a lift, as the Nasdaq Composite Index COMP �edged higher by 0.2% to 2,964. Gains also came from Dell Inc.DELL �, Google Inc. GOOG �and Advanced Micro Devices. AMD �

On the downside, shares of Marvell Technology MRVL �were down 3.7% after the chip company posted a drop in profit. Also in the red were shares of Hewlett-Packard HPQ IBM

Has Bed Bath & Beyond Become the Perfect Stock?

Every investor would love to stumble upon the perfect stock. But will you ever really find a stock that provides everything you could possibly want?

One thing's for sure: You'll never discover truly great investments unless you actively look for them. Let's discuss the ideal qualities of a perfect stock, then decide if Bed Bath & Beyond (Nasdaq: BBBY  ) fits the bill.

The quest for perfection
Stocks that look great based on one factor may prove horrible elsewhere, making due diligence a crucial part of your investing research. The best stocks excel in many different areas, including these important factors:

  • Growth. Expanding businesses show healthy revenue growth. While past growth is no guarantee that revenue will keep rising, it's certainly a better sign than a stagnant top line.
  • Margins. Higher sales mean nothing if a company can't produce profits from them. Strong margins ensure that company can turn revenue into profit.
  • Balance sheet. At debt-laden companies, banks and bondholders compete with shareholders for management's attention. Companies with strong balance sheets don't have to worry about the distraction of debt.
  • Money-making opportunities. Return on equity helps measure how well a company is finding opportunities to turn its resources into profitable business endeavors.
  • Valuation. You can't afford to pay too much for even the best companies. By using normalized figures, you can see how a stock's simple earnings multiple fits into a longer-term context.
  • Dividends. For tangible proof of profits, a check to shareholders every three months can't be beat. Companies with solid dividends and strong commitments to increasing payouts treat shareholders well.

With those factors in mind, let's take a closer look at Bed Bath & Beyond.


What We Want to See


Pass or Fail?

Growth 5-Year Annual Revenue Growth > 15% 8.0% Fail
1-Year Revenue Growth > 12% 9.1% Fail
Margins Gross Margin > 35% 41.5% Pass
Net Margin > 15% 9.9% Fail
Balance Sheet Debt to Equity < 50% 0% Pass
Current Ratio > 1.3 2.86 Pass
Opportunities Return on Equity > 15% 23.9% Pass
Valuation Normalized P/E < 20 15.88 Pass
Dividends Current Yield > 2% 0% Fail
5-Year Dividend Growth > 10% 0% Fail
Total Score 5 out of 10

Source: S&P Capital IQ. Total score = number of passes.

Since we looked at Bed Bath & Beyond last year, the retailer has dropped a point. A drop in revenue growth is responsible for the decline. But the company has actually done better than one might have thought in a tough economic environment.

You'd think that with the housing market in a rut, anything to do with home furnishings would be in the cellar along with it. Yet after hitting bottom in early 2009, Bed Bath & Beyond actually posted a long string of double-digit revenue growth, with sales at record levels. That's similar to the experience at Pier 1 Imports (NYSE: PIR  ) , although Pier 1 has done even better, with same-store sales also often hitting 10% or higher during that period. Even higher-end Williams-Sonoma (NYSE: WSM  ) has encountered that phenomenon, although its sales have grown at a slower pace.

But more recently, growth has started to slow. As Fool contributor Rick Munarriz suggests, consumers liked Bed Bath & Beyond because its goods were cheap and portable in the event of foreclosure. But now as higher-cost projects boost results at Home Depot (NYSE: HD  ) and Lowe's (NYSE: LOW  ) , homeowners will necessarily have less money available for the lower-ticket items that are Bed Bath & Beyond's bread and butter.

To improve its lot, Bed Bath & Beyond needs to buck that slower sales trend and start matching up to its competition. If it can do so, though, then it could find the growth it needs to earn some extra points toward perfection.

Keep searching
No stock is a sure thing, but some stocks are a lot closer to perfect than others. By looking for the perfect stock, you'll go a long way toward improving your investing prowess and learning how to separate out the best investments from the rest.

Bed Bath & Beyond may not be a perfect stock, but we've got some ideas you may like better. Let me invite you to learn about three smart long-term stock plays in the Fool's latest special report. It's yours for the taking and is absolutely free, but don't miss out -- click here and read it today.

Click here to add Bed Bath & Beyond to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks. Editor’s Best — and WORST — Calls of 2011

It has been a wild 2011, and like all financial journalists and stock-pickers out there, I made my share of bonehead calls. Case in point: A painful endorsement of Bank of America (NYSE:BAC) at the beginning of the year when it was worth twice what it is now!

But some of my writing proved to be right on the money. My take on some big issues like the debt debacle, for instance, as well as specific recommendations — mostly buy recommendations on dividend stocks and sell-side calls on some high-profile blue chips facing headwinds.

I don�t pretend to have a perfect track record. A review of my columns on InvestorPlace shows that I basically moved with the market this year — sideways, with a mixed bag of good calls and bad ones. Most often I managed to get it right and wrong in the same article — such as a March call on Walgreen (NYSE:WAG) that said Walgreen stock was a bargain after an earnings miss. If you bought when I wrote my column on March 23, you saw 15% gains in just two months — then the bottom fell out of the market during the summer, and WAG remains in the red on the year.

That pretty much sums up what this year was like for most investors, I reckon.

In the spirit of disclosure, I thought it would be nice to share some of my worst advice as well as my best predictions from the past year. Here they are:

Debt Crisis Commentary

In an Aug. 11 column on MarketWatch and here on InvestorPlace, I named �three bedrock blue chips to buy at fire sale prices� that included Wal-Mart (NYSE:WMT), Cisco (NASDAQ:CSCO) and AT&T (NYSE:T). AT&T has been lackluster, but Wal-Mart is up almost 25% since that writing and Cisco is up 35%.

I am particularly proud of this call because it came coupled with an earlier column about the August S&P downgrade of U.S. debt. In an article widely distributed on MarketWatch, InvestorPlace, Huffington Post and others, I asserted that the downgrade changed little — it wouldn�t fix Washington, it wouldn�t affect the economy and it wouldn�t affect Treasury rates. When the market opened down 500-plus points on Monday, some folks thought I was crazy.

Time, it seems, has proven me right � so far.

Good Sell Calls

Picking stocks to sell was easy in 2011. But I�ll stick to some of the articles about big-name stocks that made big moves:

In April, I warned of some big-name stocks to avoid. The market�s flop helped prove this call right — but the bearish take on Sprint (NYSE:S) was particularly well-timed. The stock flopped more than 50% since the column was published April 14.

A May 5 column on stocks to sell is much of the same. While some were good calls based on broader market moves, General Motors (NYSE:GM) gave up about 40% since I sounded the warning bell.

And in what I hope was one of the most obvious calls of the year, in February I discussed whether the Market Vectors Egypt Index Fund (NYSE:EGPT) was a bargain or a bust amid unrest in the region — and came down clearly on the sell side. The ETF is off 50% since then.

Another no-brainer was a Sept. 26 column on Eastman Kodak (NYSE:EK), saying the stock was heading to zero. Shares are off 70%, and at less than $1, that target of nothing seems to be pretty accurate.

Good Buy Calls

The buy side was much more difficult, and frequently when I got it �right,� it resulted in lackluster single-digit returns that more or less tracked the market. But a few big winners include dividend stocks I called out amid the volatility as a safe haven.

In March, taking my advice on Lorillard (NYSE:LO) would have netted you about 18% during the next nine months.An April call on AmBev (NYSE:ABV) garnered 22% gains.

And then there was a July 28 article about blue chips for the debt crisis where all are winners even though the market is in the red — led by 15% returns in McDonald�s (NYSE:MCD) since publication. The story is the same for a September column on other dividend stocks, with all five picks posting profits and pharma stock Bristol-Myers Squibb (NYSE:BMY) leading the pack with 20% gains in just a few months — double the market.

My WORST Calls

The ugliest recommendation of the year that I made involved, embarrassingly enough, a feature promoting the top picks from top contributors. I made a very aggressive recommendation on Bank of America (NYSE:BAC) because I wanted to win — and I knew a sleepy blue chip wouldn�t get me to the head of the pack.

I briefly was in the lead across the first few months as BAC moved upward � but then it began a steady downward spiral to current valuations around $5.50 per share.

I ate a lot of crow as a result of this boneheaded call � but at least I warned folks that while I had to stick with the stock as part of our contest, I already had thrown in the towel and considered BAC a horrible investment.

If you think that was bad, it gets worse.

In a controversial column on MarketWatch and on InvestorPlace after the Japanese earthquake and tsunami, I offered up some stocks in the nuclear industry to buy — all have underperformed the market, but the biggest black eye came from USEC Inc. (NYSE:USU). The stock is off a gut-wrenching 70% since my article.

I could try to explain away that this has more to do with the debt crisis in Europe affecting nuclear plant funding than any aversion to uranium, but that�s all academic. A 75% loss is pretty brutal — and I sincerely hope nobody followed my advice on that doozy.

Accountability at

In the new year, I hope to continue some regular disclosures from all our InvestorPlace columnists as a way to show that we are giving recommendations in good faith and that we are not afraid to own up to our mistakes.

If you have any comments to share with our writers or have ideas on how we can best achieve some form of transparency, please send your thoughts to me at

We are a site run by investors, for investors, and we are in this together. It�s very important to me that all readers can trust our commentary — so please don�t hesitate to drop us a line.

Jeff Reeves is the editor of Write him at, follow him on Twitter via @JeffReevesIP and become a fan of InvestorPlace on Facebook. Jeff Reeves holds a position in Alcoa, but no other publicly traded stocks.

Exploring Money Supply Over the Past 10 Years Through Charts

In Part 3 of the series Charting the Economy, we examine money. This series is intended to present a recent history of the economy in an easy to understand format using graphs. You can find Part 2 here.

Our opening chart looks at the broadest measures of cash and credit in the U.S. money supply, M2 and M3. We can see that both measures have been expanding this decade. Note: The Federal Reserve stopped reporting on M3 after 2006 due to what it considered low importance to the measurement of money in the system.

[Click all to enlarge]

M3 is the broadest measure of money and credit in the U.S. It consists of credit, savings, and cash in the system. For our purposes, we want to examine those elements of U.S. monetary measures that are inflationary and affect the prices of goods that people buy every day.

The following chart shows the pieces of M3 that are not included in M2, for a look at how they specifically are expanding. These non-M2 components of M3 include large time deposits, repurchase agreements, eurodollars, and money funds.

In addition, M2 also has some credit components in addition to cash. So we can examine how those specific parts of M2 are expanding.

Deposits moved out of the money markets and CDs and moved into savings accounts. People want liquidity while avoiding risk.

M1 is the leanest measure of money and credit in the U.S. system. It includes currency itself plus traveler’s checks, demand deposits, and other checkable deposits. M1 by itself, however, does not measure all inflationary money in the system that will affect prices. More on that later.

Most of the increase in M1, about 53%, is in currency in circulation. Most of the rest is in deposit accounts, including checking accounts. Currency circulation is up about 6 % from 2001, suggesting more is being spent and less is being saved from 10 years ago.

M1, M2, and M3 have shown that people are moving away from risk and into liquidity and "safe" returns.

Austrian True Money Supply (TMS)

True Money Supply, or TMS, is an Austrian economist’s tool for measuring “medium of exchange" and does not double-count money in the system. Any money measurement that is the result of a credit transaction requiring selling of one asset to produce money is excluded, and any measures requiring a lapse in time (not immediately available) are excluded because they result in those time-lapse deposits being lent out and not stored in the banks' vaults. In addition, TMS includes non-M3 money measures of U.S. government demand deposits, demand deposits due to foreign commercial banks, and demand deposits due to foreign official institutions.

TMS shows that we have had a substantial increase in money supply as a medium of exchange, which will more accurately reflect those amounts that can be spent on demand, and therefore are inflationary to the economy. As a corollary, the difference between TMS and M3 money measures represents those credit transactions in which money has been promised but is not held in vault.

For example, if a corporation wants its securities back from a repurchase agreement, it must come up with cash from another transaction -- sales of goods, issues of stock, or loans from other sources. If it had the cash on hand, it would not have pledged assets to obtain cash. These are exchanges of future production for current income. They may be temporarily inflationary when the money is spent, but this is a one-time proposition limited by future production, and not a continual inflation of the money supply.

U.S. Dollar and Other Currencies

A popular measure of the U.S. dollar is the U.S. Dollar Index. This index puts the dollar against a basket of other popular currencies, including the euro, British pound, Japanese yen, Canadian dollar, Swedish krona, and Swiss franc. Each currency is weighted differently against the dollar, with the euro having by far the largest weighting. This is an attempt to value the dollar against other popular currencies, though some very important currencies were left out of the index.

We can see that the U.S. Dollar Index is falling, meaning that the U.S. dollar is devaluing faster than the overall basket of currencies included in the U.S. Dollar Index.

The next chart examines Austrian TMS versus the U.S. Dollar Index to see if the U.S. Dollar Index is a good measurement of U.S. dollar strength.

Set to a reference value of 1 in 2001, this chart shows that the TMS has grown 84% by 2009 while the dollar, weighted against other currencies, has only fallen about 30% in value relative to other currencies measured in the U.S. Dollar Index. All currencies in the USD Index are inflating, and so therefore the USD Index should not be used as a measure of purchasing power for the dollar itself. The phrase "it’s all relative" applies here.

I set up the following chart to compare the USD Index, TMS, and M2 together. M2 is popularly used as a measure of the inflationary effects of the dollar, or the amount of currency in circulation and savings that would apply to the purchasing power of the dollar.

The USD loses 30%, compared to a TMS increase of 84% and M2 increase of 56% since 2001. M2, in this case, understates the real medium of exchange value of money growth in the U.S. by 28% since 2001. So when you see M2 used in economic analysis, remember that it does not include all the measures of money that can cause a subsequent inflation in prices, or reduction in consumer purchasing power.

Other World Currencies

To compare the dollar against other currencies, it is helpful to find corresponding values in those currencies. Here we look at the different measurements of the euro.

The euro measures are composed thusly:

M1: Currency in circulation + overnight deposits

M2: M1 + deposits with an agreed maturity up to two years + deposits redeemable at a period of notice up to four months.
M3: M2 + repurchase agreements + money market fund (MMF) shares/units + debt securities up to two years.

The closest comparison to TMS in euro measures would be M1, because M2 and M3 include time deposits and credit transactions.

The euro rate has exploded past the dollar starting in 2005. Euro issuance has increased by 102% since 2001, compared to the U.S. TMS of 84% and M2 of 56%.

Japan M1 is closest measure to TMS, excluding savings accounts which are part of M2. Other M2 data includes time deposits and credit transactions. M1 increased by 45% while M2 only increased by 15%.

Here we see the Austrian TMS against four major currencies in the U.S. Dollar Index basket (by weighting).

The euro is the highest-weighted currency in the USD Index basket, and has depreciated in value more than the dollar, which has allowed the dollar to appear less devalued than it is. Again, the USD Index is not a measure of purchasing power, as all currencies in the basket have been inflated.

Note: Reporting on British M0, the closest measure of the two made available to actual money in the system stopped in 2006. The British money measures were the following:

M0: Cash outside Bank of England + banks’ operational deposits with Bank of England. (No longer published.)

M4: Cash outside banks (i.e. in circulation with the public and non-bank firms) + private-sector retail bank and building society deposits + private-sector wholesale bank and building society deposits and certificate of deposit.

M4 is a poor substitute for actual inflationary money supply, so I did not graph it.


China is a large trading partner of the U.S., and currently holds the most Treasury debt behind the Federal Reserve. Therefore, China’s currency strength is an important factor in how the U.S. trades with it and how much debt the Chinese can afford to buy from the U.S.

China has been inflating money supply to support its rapid economic expansion. It appears as though it is very vulnerable to rising prices resulting from currency inflation. Japan has the lowest rates of currency inflation since 2001 as it tries to keep exports competitive.

Lastly, we have U.S. Austrian TMS versus other major currencies.

Notice China has been printing renminbi at a faster pace this decade than the dollar or euro. When researching for this project, this was quite a shock. While China’s currency is not a world reserve currency as the U.S. dollar is, the Chinese are following the same path the U.S. has. This piece of data reinforces the idea that at least part of China’s economy is in a fiat money-induced bubble, which is a topic for another article.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Friday, July 6, 2012

Consumer Confidence Report Brings SPDR Retail ETF Into Focus

Thanks to some solid economic data and encouraging news on the job front, many are feeling just a little better about the economy. However, with oil prices surging and the price for a host of other vital commodities also reaching new highs, some are growing increasingly concerned that more of their disposable income will be eaten up by basic necessities, leaving little for discretionary purchases. Due to this, many investors will likely hone in on the most recent consumer confidence report in order to get more clues about how the embattled consumer feels about the economic situation.

Analysts are expecting April’s reading of consumer confidence to rise to 64.5 up from 63.4 last month. If this takes place, it suggests that consumers are growing increasingly optimistic about the overall economy something that would be especially welcomed news given the surging prices for commodities and especially oil. A gain in confidence will be especially important this month as March’s reading was off by more than 10 points when compared to February leaving the important mark at a three-month low. It will be interesting to see if April’s figures mark a continuation of this downtrend or if consumers are able to bounce back in April as some are predicting.

Thanks to this report, investors should look for the SPDR S&P Retail ETF (XRT) to remain in focus throughout today’s trading session. The fund is one of the most popular in the retail segment, tracking the S&P Retail Select Industry Index. This benchmark represents the retail sub-industry portion of the S&P TMI which tracks all the U.S. common stocks listed on the NYSE, AMEX, NASDAQ National Market and NASDAQ Small Cap exchanges. This index is an equal-weighted one and holds 93 securities with most stocks making up about 1.07% of see more XRT’s total holdings.

Should consumer confidence surprise on the upside and if some of the larger consumer product names such as Coca-Cola (KO) are able to produce robust results in their quarterly reports, XRT could surge on the day. If, however, consumer confidence plunges thanks to high oil prices and a general concern over the health of the fragile economic recovery, this popular State Street fund could be one of the main losers in the session.

click to enlarge

Disclosure: No positions at time of writing.

Disclaimer: ETF Database is not an investment advisor, and any content published by ETF Database does not constitute individual investment advice. The opinions offered herein are not personalized recommendations to buy, sell or hold securities. From time to time, issuers of exchange-traded products mentioned herein may place paid advertisements with ETF Database. All content on ETF Database is produced independently of any advertising relationships.

Original post

Should you invest half your money in the same stock?

Most financial planners would tell you that's a crazy idea, that you need to be more "diversified." But that's what Allan Mecham at Arlington Value -- aka the 400% Man -- has just done.

Mecham, whose stellar returns were highlighted in the March edition of Smart Money, tells his investors that last year he levered up the fund and has invested half the money in Warren Buffett's Berkshire Hathaway.

Also See
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  • The Dumbest Investment Move

"Able to borrow at around 1.5%, we levered (Berkshire) into a 50%+ position," he wrote in his annual letter to shareholders. "Though not advocates of leverage, we believe the low cost and modest amount, combined with [Berkshire's] iron-clad safety and cheap price, makes our action sensible."

There is some method to the madness. Mecham, a long-term Buffett disciple, argues that Berkshire Hathaway stock, on its own, "provides ample diversity, with exposure to disparate businesses (more than 70), sectors, and asset allocations." Berkshire's assets include a ton of cash-generative businesses, a book of blue-chip public stocks valued at more than $75 billion, and nearly $40 billion in cash, he says.

Short-term gains are irrelevant, but Mecham built up the huge Berkshire Hathaway position before the announcement, last September, that Berkshire would start buying back stock.

Since then stock has zoomed about 16%, from around $105,000 to $122,000.

No one is suggesting you should follow suit -- even if you could borrow at 1.5%. But Mecham's track record makes his moves worth noting. He's trounced the market since launching Arlington in 1999, posting gains of more than 400% after costs. Arlington's five-year return through 2011 averages 18.7% net of fees, while the Standard & Poor's 500 has lost ground.

Last year, Mecham reports, the fund gained 1.4% net of fees -- actually underperforming the S&P 500, a rare event, by just over half a percentage point. His existing holdings in Berkshire, which was slightly down overall in 2011, were among the reasons.

Mecham's annual letter offers a rare glimpse into his portfolio.

In addition to Berkshire Hathaway, he says he is also holding positions in SandRidge Energy (SD), XPO Logistics, Loews, and two "unnamed" financial stocks he scooped up last year after they fell more than 50%. (My imagination runs riot. Bank of America?).

Of SandRidge, Mecham likes its "enviable acreage holdings," a low-risk high-return drilling program, low and stable operating costs, and a screamingly cheap stock price." SandRidge stock hit $68 during the oil boom in 2008 -- compared to $8.42, or 37 times forecast earnings, now.

XPO Logistics (XPO), parent of emergency shipments company Express-1, is also in freight forwarding and freight brokerage. New management wants to buy up small competitors and build economies of scale. The company just raised $126 million at $15.75 a share. Mecham thinks the fund-raising was unneeded, but sees "enormous potential" for attractive growth going well into the future, as the company snaps up mom-andp-op operators in a potential $200 billion market. "XPO employs an asset-light business model that generates high returns on invested capital and spins off free cash flow to owners in nearly all economic environments," he writes. The shares, $17, are 0.8 times annual sales.

As for Loews (L), it's a diversified holding company which owns energy-related businesses, an insurance company, and Loews' luxury hotels. Mecham calls it "a low-risk proposition with significant upside." The stock is twelve times forecast earnings, but with a meager dividend yield of 0.65%.

Make of these ideas what you will. There are no guarantees that Allan Mecham's stock picks will do better than the market, bonds or a fistful of gold bullion. As ever, you pays your money and you takes your choice.

Canaccord U.K. Acquisition Has Investors Worried

Canaccord Financial Inc.(CCORF.PK) has spent the past two years on an acquisition spree, capped off by a $400-million agreement Thursday to buy a London-based brokerage firm. Now, the focus is going to be on making all the businesses generate profits in a tough market.

The deal to buy London-based Collins Stewart Hawkpoint PLC is Canaccord’s largest-ever acquisition. It gives Toronto-based Canaccord, already Canada’s biggest independent brokerage, a company with 850 workers and businesses ranging from wealth management to stock trading to advising companies on mergers. It vaults Canaccord from a niche player in London’s financial scene to one of the biggest independents there.

Canaccord chief executive officer Paul Reynolds has now spent close to $750-million since 2010 buying businesses around the globe. It started in Canada with the acquisition of Genuity Capital Markets, and continued abroad with investments in China and Australia. The total outlay is close to Canaccord’s own market value.

The plan now is to cut back on acquisitions and try to squeeze more revenue and earnings from the stable of businesses that the firm has acquired, Mr. Reynolds said. The Collins Stewart deal should “significantly” add to earnings, he added. “We now have a global platform that very few people have,” Mr. Reynolds said in an interview from London, where he had traveled to close the deal. “Getting that model at peak performance is what we have to work to get.”

The prior acquisitions have mostly been in the investment-banking and securities business, where the focus is on raising money for companies and advising them on deals. With this latest purchase, Canaccord gets more of that. It also almost doubles its asset management business by bringing on a raft of U.K. brokers and the £8.1-billion ($13-billion) they manage.

The fee income from running that money should help steady Canaccord’s volatile earnings, which tend to rise and fall with the number of deals its investment bankers are doing. Still, investors signaled they are nervous about the size of the deal and the fact that it takes cash off the firm’s balance sheet at a time when capital is crucial for financial companies. Shares of Canaccord fell 8 per cent Thursday on the Toronto Stock Exchange.

“The wealth business provides needed diversification, but at this point shareholders want management to focus on making all of these moving parts work together to provide better returns,” said analyst Sumit Malhotra of Macquarie Capital Markets.

Financial firms around the globe have been building in wealth-management because of the consistent fee income. That has increased competition for top wealth assets.

Canaccord believes that buying in London, where markets are depressed, is a better option than trying to attract or buy brokers in Canada. At home, bidding wars for brokers have driven their compensation to levels that some in the industry say make the business unprofitable.

It makes more sense to add brokers in Britain, where they are paid less, with much more of their revenue flowing to the firms they work for, Mr. Reynolds said. A top broker in Canada will keep more than half of the revenue he or she brings in, and the firm covers a lot of costs. In the U.K., the broker covers more costs and keeps only about a third of the revenue.

“The margins are just that much better,” he said.

Best Bet Investments – Is Anything Safe Still?

Earlier, whenever you had spare cash you found that stock markets were the most lucrative place for best bet investments. But economic recession has hit us bad in the recent years and stocks fell like a pile of cards. Investors felt the shock waves of this horrendous financial situation for years to come. All their investments have become elusive. When you run out of cash during the harsh financial times you begin incessant use of credit cards.

On every transaction, whether it is a medical emergency or a school fee, you are charged a hefty interest. This is the beginning of the end for you. From then on you have to pay a huge amount at the end of each month. It may also happen that after a point of time you will have to declare yourself bankrupt. In the peak of this financial trouble, people ask themselves if there are any other alternative which can save their economic well being from extermination.

A majority of the investors consider life insurance policies as an unworthy investment. But a closer look into the prevalent economic condition will make you understand why in the advent of the economic turmoil, life insurance policies are the safest option to invest. Although Life insurance does not make you wealthy in a matter of minutes, it gives you a sound and secure financial health. It helps you lift the burden of credit cards from your shoulders and in a certain period of time your position takes a turn for the better. Among the various policies some can even be considered as best bet investments.

You may ask as to how this can be possible as most insurance policies pay after termination. This means that you will not get any ready cash when you require most. But what we are talking about is a cash value life insurance policy. This one, unlike most, pays dividends at regular intervals allowing you to take care of the expenses. So now you can bid adieu to credit cards and relieve yourself from the shadow of debt. The past record of cash value life insurance shows that the dividends have never ceased. Hence investors can be assured that it will never cease in future if they have one of these best bet investments.

Cash value life insurance policy has couple of great attributes. It gives you a guaranteed fixed return after the completion of the term. In addition, the policy pays you dividends at intervals which are completely tax-free. This is one of the best bet investments that have risen to significance. So you will not have to get credits at high interest rates. Also you can hope for a secured old age free from worries of medical emergencies.

In times of crisis, cash value life insurance policy provides a solution to free ourselves from the appalling condition and stabilizes our financial condition. The continuous flow of dividends takes care of our needs and aspirations and we are saved from deprivation. Thus it is prudent to consider cash value life insurance as a great alternative. It is surely one of the best bet investments these days.

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Book Review: The Essential Buffett

The Essential Buffett: Timeless Principles for the New Economy by Robert G. Hagstrom (John Wiley & Sons, 2001)

A great starter for those who are new to Buffett-style investing. Provides all you need to know to kick-start as a value-growth based long-term investor.

This book is an extension of the author's first book on Buffett, The Warren Buffett Way.

While the first book is based on examples from Buffett's stock picking decisions, the sequel focuses more on the ideologies and inspirations of Buffett-style investing. The first two chapters are a recap of his first book. It sets the stage by giving an overview of Buffett-style investing, his thinking and his history, growing up as an investor with an acute interest in crunching numbers and thinking independently.

Influences and Inspirations of Buffett's Investing Approach

Having been influenced by his father, who was a stock broker, and his penchant for numbers Buffett tested the stock market at the age of eleven. He read all the books he could during his teens and when he was ready to go to college he already knew most of the subject matter taught in his undergrad classes. Apart from his readings, there are three important people whose teaching and acquaintance greatly shaped Buffett into what he is today.

They were: Ben Graham, Buffett's mentor, employer and the father of value investing; Charlie Munger, Buffett's partner in business; and Philip Fisher, the pioneer of growth investing. Buffett blended the principles from Ben Graham's value based approach, Philip Fisher's "soundness of business growth prospect" approach and Charlie Munger's "great business does not sell cheap" approach.

Tenets of Buffett-style Investment

The author dissects Buffett's principles into twelve investing tenets categorized as Business Tenets, Management Tenets, Financial Tenets, and Marketing Tenets. These tenets form the foundation of Buffett's blended approach to investing. Just by adhering to these tenets and spending time to research about a company can help an investor do better than the market average.

Focused Investing is the Key to Success

The essence of the book is in the concept of focused investing. Buffett thinks of investing as a punch card which can be used for only 20 punches for the lifetime. An investor should be so diligent that he/she should use those 20 punches wisely. The book provides results of a statistical analysis of the performance of sample stock portfolios with varying numbers of stocks.

The results reveal that the fewer the number of stocks in the portfolio, the greater the return over a long term. Needless to say, these stocks should be carefully selected based on sound research, estimate of intrinsic value, and margin of safety.

Ocean of Opportunity in Technology & Emerging Economies

While Buffett has set his foot into all kinds of traditional businesses from candies to insurance, he has always stayed away from the technology industry. The model of traditional businesses has pretty much remained the same since the dawn of time and they will not change. On the other hand, technology business models are ever-changing, evolving and are more competitive.

This book was published at the peak of the technology bubble and there has been a tremendous change in the information and communication technologies. The value of a technology can be calculated using the financial statements. But predicting the growth of a technology company is relatively very difficult.

The book provides a few factors that can be used to evaluate a technology company. But these factors keep changing according to the technology. This industry is an unexplored frontier for a "value-growth' based investor and the author sees a great opportunity in this. Buffett has not invested a lot in other countries. The author sees a plethora of opportunity in emerging economies as well.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Oil Vey! Crude Slips to $70.58 as Gas Stockpiles Rise

Oil gave up early morning gains as Light Sweet Crude futures for delivery in January slipped to $70.27 a barrel, down over two bucks. The decline reversed a rise to $73 and change this morning, prompted by a report late yesterday by the American Petroleum Institute showed U.S. supplies had unexpectedly dropped to an eight-week low. But this morning the U.S. Department of Energy said U.S. stockpiles of gasoline rose 2.25 million barrels to 216.3 million.

Oil equities were mixed, with ExxonMobil (XOM) down 71 cents, or 1%, at $72.24, ConocoPhillips (COP) up four cents at $49.98, and Chevron (CVX) down 37 cents, or half a percent, at $76.39.

Thursday, July 5, 2012

Should You Love This Dow Stock?: Boeing

The following video is part of our "Motley Fool Conversations" series, in which industrials editor/analyst Brendan Byrnes and technology editor/analyst Andrew Tonner discuss topics across the investing world.

In today's edition, Brendan and Andrew continue their series, "Should You Love This Dow Stock?". Today, we take a look at aerospace giant Boeing. Boeing just received its biggest plane order ever -- a $22.4 billion deal with Indonesian airline Lion Air. The company has never had problems getting orders; its total backlog sits at over $350 billion. Boeing must improve their production and turn this massive backlog into revenue as quickly as possible. Brendan talks about the main reasons he likes Boeing, and how the Asia-Pacific region will be critical for the company going forward.

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Boeing pays a solid 2.3% dividend, but if you're looking for even higher-yielding stocks, we've compiled a special free report outlining our top 11 dividend-paying stocks. It's called "Secure Your Future With 11 Rock-Solid Dividend Stocks." You can access your complimentary copy today at no cost! Just click here to discover the winners we've picked.

Tibco Rising: FYQ2 Rev, EPS Beat

Shares of enterprise software provider Tibco (TIBX) are up 67 cents, or 2.5%, at $27.50 in late trading after the company this afternoon reported fiscal Q2 revenue and profit per share that topped analysts’ expectations.

Revenue in the three months ended in May rose 14.4%, year over year, to $247.4 million, yielding EPS of 26 cents, excluding some costs.

Analysts on average had been expecting $244.9 million and 23 cents.

Total revenue rose 20% on a constant currency basis, while license revenue was up 13%.

CEO Vivek Ranadive remarked that the company’s software continued to be a priority for “big data” applications “in up markets and down.”

U.S. stocks rise on economic data


U.S. stocks tally mild gains as economic reports continue to offer reassurance to investors contending to mixed messages from corporate America See full story.

Gold futures edge higher as dollar pulls back

Gold futures extend gains as the dollar eases and on the view that central banks will keep monetary policies loose for some time. See full story.

Dollar slips; Germany�s Ifo gauge boosts euro

The dollar trades lower as stronger-than-expected jump in Germany�s Ifo business climate index boosts the euro. See full story.

Treasurys slip, company debt market improves

Treasury prices slip and companies continued to take advantage of low interest rates in order to issue more debt. See full story.

H-P, MetroPCS highlight tech action

Reaction to earnings reports leads to diverging directions for PC giant, discount wireless carrier See full story.


Instead of acknowledging that banks have become a part of government, we keep pretending they are private institutions, writes David Weidner. See full story.


Americans are falling behind on savings and need to catch up. Here�s how. See full story.

8 Companies Increasing Dividends

It�s the first week of the second quarter, and after a bumper crop of payout performers in Q1, we�ve already seen a strong start for this quarter when it comes to companies increasing dividends.

Although earnings season doesn�t kick into high gear for another few weeks, a number of companies got a jump start on issuing positive news by opting to lift their payouts to shareholders.

This week�s batch of dividend divas is diverse, and includes a trendy retailer, a big financial firm, a steel producer and even a race track operator. All told, eight companies made it onto our Companies Increasing Dividends list this week:

Regional financial holding company Bank of the Ozarks (NASDAQ:OZRK) boosted its quarterly payout 9.1% to 12 cents per share. The new dividend is payable April 20 to shareholders of record as of April 13. The new dividend yield, based on the April 2 closing price of $31.96 (the day the dividend was announced), is 1.5%.

Rock ‘n’ roll and gothic garb retailer Hot Topic (NASDAQ:HOTT) put on a new dividend on display that’s 14.3% larger than the previous payout. The new dividend of 8 cents per share is payable April 30 to shareholders of record as of April 16. The new dividend yield, based on the April 5 closing price of $10.07, is 3.18%.

Automobile race track operator International Speedway (NASDAQ:ISCA) put the pedal to the metal on its quarterly payout, boosting the RPMs on its dividend by 11% to 5 cents per share. The new dividend will be paid June 29 to shareholders of record as of May 31. The new dividend yield, based on the April 4 closing price of $28.37, is 0.7%.

Bank holding company National Penn Bancshares (NASDAQ:NPBC) gave shareholders a little more bank by boosting its quarterly payout 40% to 7 cents per share. The new dividend is payable May 17 to shareholders of record as of May 5. The new dividend yield, based on the April 2 closing price of $9.31, is 3.01%. The company also authorized the repurchase of up to 7.5 million shares through year-end.

Financial services giant PNC Financial (NYSE:PNC) raised its quarterly dividend 14% to 40 cents per share. The new payout will be delivered May 5 to shareholders of record as of April 17. The new dividend yield, based on the April 5 closing price of $63.53, is 2.52%. The company also reaffirmed its authorization to buy up to 24.7 million shares under a buyback plan that has been in effect since October 2007.

Energy concern Sabine Royalty Trust (NYSE:SBR) declared a cash distribution of 41.89 cents per unit. That distribution represents a 49.3% increase from the previous payout. The new distribution will be paid April 30 to unitholders of record as of April 16. The new dividend yield, based on the April 5 closing price of $61.35, is 8.2%.

Schnitzer Steel (NASDAQ:SCHN) really hardened up its quarterly dividend, forging a whopping 971% increase in its quarterly payout to 18.75 cents per share. The new dividend is payable May 31 to shareholders of record as of May 17. The new dividend yield, based on the April 5 closing price of $39.46, is 1.9%. Schnitzer has paid dividends for the past 72 consecutive quarters.

Discount retail mall operator Tanger Factory Outlet Centers (NYSE:SKT) raised the rent it pays to shareholders by 5% to 21 cents per share. The new dividend will be paid on May 15 to shareholders of record as of April 30. The new dividend yield, based on the April 5 closing price of $29.69, is 2.83%. The company has paid its shareholders dividends each quarter since becoming a public company in May 1993.

As of this writing, Jim Woods did not hold a position in any of the aforementioned stocks. For more payout winners, see previous weeks’ lists of Companies Increasing Dividends.

Brazilian stocks drop as Chinese growth cools

LOS ANGELES (MarketWatch) � Brazil�s stocks fell Friday, deepening losses for the week following a soft quarterly growth report from the country�s largest trading partner, China.

Brazil�s Ibovespa BR:BVSP �closed 1.5% lower at 62,105.60, and all sectors waded in the red. Finance stocks were off nearly 3%, with Banco Santander Brasil BR:SANB11 �down 5%. Among the heavily weighted steel group, Gerdau GGB �dropped 1.1%, but shares of iron-ore miner Vale VALE �turned higher by 0.1%.

Shares of state-run oil producer Petrobras PBR �sloughed off 1.5%.

Click to Play U.S. week ahead: Banks, retail

The coming week will bring more bank earnings from Citigroup and Bank of America, plus retail sales and data from the Philly Fed. Laura Mandaro reports on Markets Hub. (Photo: Reuters)

The Ibovespa, which has fallen four out of the past five sessions, posted a weekly loss of 2.5%, its fourth consecutive weekly decline.

Investors in Brazilian assets received a downbeat update on quarterly growth in China, an important export market for Brazil. China�s National Bureau of Statistics said the economy expanded at 8.1% in the first quarter, the slowest pace of growth in 11 quarters. The latest rate was below analysts� expectations of 8.3% growth. In the fourth quarter of 2011, the economy expanded by 8.9%.

The first-quarter figures reflected weaker exports and construction activity. See more about China's slower growth in the first quarter.

While some analysts viewed the report as pointing to a gradual slowing, it also spurred worries among investors about lower demand from China for natural resources, such as iron ore supplied by Brazil.

An executive with price provider the Steel Index this week told Dow Jones Newswires that slowing in China hasn�t hit the iron-ore market. Read more about the iron-ore market.

While growth in China decelerated during the first three months of the year, Danske Research noted the country�s leading indicators � such as growth in money supply and credit and steel production � recently have started to improve.

This indicates �that growth should start to improve in the coming quarters. In this light, we also believe that the probability of a hard landing is currently declining, albeit the property market remains a concern,� Danske Research�s senior analyst Flemming Nielsen told clients Friday.

The GDP report didn�t sit well with investors in U.S. equities, with the S&P 500 Index SPX �ending the session down 1.3% at 1,370.26 and the Dow Jones Industrial Average DJIA �lower by 137 points. The major indexes logged their worst week this year. Read about Friday's slide in U.S. stocks.

The slower growth figures from China arrived at a time when the Brazilian government itself is enacting measures to bolster domestic growth.

Barclays Capital said Friday that despite a soft reading on Friday in monthly Brazilian retail sales, data flow �continue to indicate that the worst activity is behind us.�

Brazil�s IBGE statistics agency said the volume of sales in February fell 0.5% from January on a seasonally adjusted basis, which �interrupts a sequence of three months of positive rates,� it said in a statement. Sales in February from the same month a year ago climbed 9.6%.

January�s seasonally adjusted sales growth was upwardly revised to 3.3% from 2.6%.

February�s slowdown in spending �was driven largely by a payback in the same groups that pushed retail sales up in January,� wrote Barclays economist Guilherme Loureiro in a note, citing declines in sales at supermarkets and of food and beverages, as well as a contraction in apparel spending.

�Overall, our view is that February�s weaker reading is a one-off event rather than a trend,� said Loureiro. With �strong stimulus in the pipeline, we continue to see strong domestic demand.�

Barclays held to its first-quarter forecast for real GDP growth of 0.7% on a seasonally adjusted basis, in line with its 2012 projection for expansion of 3.3%. A weekly survey of economists conducted by the central bank indicated they expect, on average, growth of 3.2% this year.

Brazil�s economy expanded 2.7% in 2011, decelerating from 7.5% in 2010.

Retail stocks fell Friday, but in the consumer-discretionary group, shares of consumer-goods seller Hypermarcas BR:HYPE3 �rose 2.5% and apparel company Hering BR:HGTX3 �gained 1%. Tobacco company Souza Cruz BR:CRUZ3 �and brewer AmBev ABV �also outperformed the broader market.

Chile�s IPSA CL:IPSA �lost 0.5% to 4,527.46. The weekly decline was 2.6%, the worst weekly performance since late November.

Argentina�s Merval AR:MERV �slumped 2.4% to 2,502.08 on Friday. It gave up 2.2% for the week, marking the fourth straight weekly fall. Shares of YPF YPF �ended the daily session down 3.3%, remaining under pressure on government-takeover concerns.

In Mexico City, a steep decline in stocks in the final minutes of trading pushed the main IPC equity index MX:IPC �down more than 2%, with the move being investigated by exchange officials, according to reports. A representative for exchange operator Bolsa Mexicana de Valores wasn�t immediately available for comment.

The IPC had been lower by about 0.8% when roughly 15 minutes before the regular session closed, it slid 2.3% at 38,444.01.

4 Biotech Stocks With Strong Cash Flow Growth Over the Last 5 Years

Biotech companies have projects with very long time horizons, sometimes 10 years or more, and because of that some biotech firms operate for years before generating any cash. Therefore, one way to look for more reliable biotech firms is to find those with a history of generating cash.

We ran a screen on U.S. biotech firms for those that have seen significant growth in operating cash flow/common equity over the past 5 years, with the trailing-12-month ratio at least 10% higher than the 3-year average, which is at least 10% higher than the 5-year average.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the top six stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.

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We also created a price-weighted index of the stocks mentioned below, and monitored the performance of the list relative to the S&P 500 index over the last month. To access a complete analysis of this list's recent performance, click here.

Do you think these companies will continue to generate cash? Use this list as a starting-off point for your own analysis.

List sorted by market cap.

1. Genomic Health Inc. (GHDX): Medical Laboratories & Research Industry. Market cap of $834.20M. TTM Operating cash flow/common equity at 0.28 vs. 3-year average at 0.08 and 5-year average at -0.04. The stock is a short squeeze candidate, with a short float at 8.93% (equivalent to 23.09 days of average volume). The stock has gained 115.91% over the last year.

2. Optimer Pharmaceuticals, Inc. (OPTR): Biotechnology Industry. Market cap of $558.05M. TTM Operating cash flow/common equity at 0.15 vs. 3-year average at -0.65 and 5-year average at -2.18. The stock is a short squeeze candidate, with a short float at 11.35% (equivalent to 6.15 days of average volume). The stock has gained 31.87% over the last year.

3. MAP Pharmaceuticals, Inc. (MAPP): Drug Manufacturers Industry. Market cap of $484.48M. TTM Operating cash flow/common equity at 0.08 vs. 3-year average at -1.13 and 5-year average at -1.79. This is a risky stock that is significantly more volatile than the overall market (beta = 3.11). The stock is a short squeeze candidate, with a short float at 5.15% (equivalent to 13.16 days of average volume). The stock has gained 22.61% over the last year.

4. DepoMed Inc. (DEPO): Drug Manufacturers Industry. Market cap of $469.08M. TTM Operating cash flow/common equity at 1.26 vs. 3-year average at 0.52 and 5-year average at -0.20. The stock is a short squeeze candidate, with a short float at 11.89% (equivalent to 7.43 days of average volume). The stock has had a couple of great days, gaining 6.85% over the last week.

*Operating cash flow/common equity sourced from, all other data sourced from Finviz.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Wednesday, July 4, 2012

Broadcom: Canaccord Starts At Buy, $45 Target

Canaccord Genuity’s Bobby Burleson late yesterday initiated coverage of Broadcom (BRCM) with a Buy rating and a $45 price target, a day after the company reported better-than-expected Q4 results and a Q1 view that also topped expectations.

“We see shares of Broadcom moving higher on strength at key Mobile & Wireless customers,” writes Burleson, “resumption of growth for Infrastructure & Networking following inventory digestion and spending delays, and a more constructive stance on dividends.”

Broadcom is entrenched with the dominant smartphone vendors, Apple (AAPL) and Samsung Electronics (SSNLF), he observes. The company’s infrastructure and networking products may start to see a recovery in sales: “We expect revenues will begin to recover following a multi-quarter inventory correction as spending resumes from service providers and lean inventory initiatives are completed.”

And on the payout front, “Use of cash is shifting from buyback to a larger dividend (currently yields 1%), given the stock was down steeply last year despite the buyback.”

Burleson is modeling $7.74 billion in revenue this year and $2.77 in EPS. That’s more or less in line with consensus $7.77 billion and $2.77.

Broadcom shares are up 27 cents, or 0.7%, at $37.13 in early trading.

Earnings Preview: Clarcor

CLARCOR Inc. (CLC) provides filtration products, filtration systems and services, and consumer and industrial packaging products worldwide. Its Engine/Mobile Filtration segment offers oil, air, fuel, coolant, transmission, and hydraulic fluid filters for engines used in stationary power generation and for engines in mobile equipment applications, including trucks, automobiles, buses, and locomotives, as well as marine, construction, industrial, mining, and agricultural equipment.

It is scheduled to report its Q2 2012 results on June 20, 2012, after the market closes.

Technical Overview

Key Metrics

  • Market Cap: 2.49B
  • 52-week trading range: 39.13 - 54.22
  • Trailing P/E: 20.23
  • Forward P/E: 16.81
  • Price/Sales: 2.17
  • Price/Book: 2.89
  • PEG Ratio: 1.53
  • Total Debt: 17.20M
  • Annual dividend yield: 0.90%
  • Return on Equity: 15.30%
  • Return on Assets: 10.56%

Recent EPS Actuals vs. Estimates

The company has met or beaten analysts' estimates in the last two quarters. In the last quarter it reported $0.50 EPS, beating analyst estimates of $0.47.

The consensus EPS is $0.70 based on 7 analysts' estimates, up from $0.64 a year ago. Revenue estimates are $305.68M, up from $288.53M a year ago. The median target price by analysts for the stock is $57.00.

Average recommendation: Overweight

Source: Marketwatch

Latest Developments

  • On May 11, 2012, CLARCOR Inc. announced that it has acquired 100% of the shares of Modular Engineering Pty Ltd. Modular will become a part of CLARCOR's PECOFacet division, which is included within CLARCOR's Industrial/Environmental Filtration segment.
  • On March 21, 2012, CLARCOR Inc. announced that for fiscal 2012, it expects diluted earnings per share (EPS) to be in the range of $2.55-$2.70. According to I/B/E/S Estimates, analysts on average were expecting the company to report EPS of $2.68 for fiscal 2012.
  • On January 19, 2012, CLARCOR Inc. announced that for fiscal 2012, it expects earnings per share to be between $2.55 to $2.70. The guidance does not consider major global economic disruptions in fiscal 2012 including in Europe and the U.S.


CLARCOR Inc. operates in Diversified Machinery industry. The company could be compared to AO Smith Corp. (AOS), Itron, Inc. (ITRI), Met-Pro Corp. (MPR), and PMFG, Inc. (PMFG). Below is the table comparison of the most important ratios between these companies and the industry.

Below is the chart comparison with the stock price changes as a percentage for the selected companies and S&P 500 index for the last one year period.

(click to enlarge)

CLC data by YCharts

Competitors' Latest Development

  • On May 14, 2012, Itron, Inc. announced that it signed contract with ENAMC (National Company of Measurement and Control Instruments), which is located in Algeria. Under this contract, the companies will deploy the C&I advanced data collection system over the next 18-months to support the modernization of the electricity network and enable commercial and industrial clients to better manage their electricity consumption.
  • On May 7, 2012, PMFG Inc announced it was awarded two orders for environmental emissions control equipment valued in excess of $4.7 million. The first order is for a Selective Catalytic Reduction (SCR) system for a fractionation facility in the United States that will produce 100,000 barrels per day of natural gas liquids (NGL).
  • On May 1, 2012, Itron, Inc. announced that it has completed its previously announced acquisition of privately held SmartSynch for $100 million.
  • On April 20, 2012, A. O. SMITH CORPORATION raised fiscal 2012 earnings per share guidance to a range of $2.75 to $2.90 per share. According to I/B/E/S Estimates, analysts were expecting the company to report EPS of $2.81 for fiscal 2012.
  • On April 19, 2012, PMFG Inc announced that it was awarded an order in excess of $4.0 million to provide large-scale separation equipment for a new liquefied natural gas (LNG) terminal project in Australia.
  • On April 5, 2012, Met-Pro Corp. announced that effective April 2, 2012, Neal E. Murphy was elected Vice President-Finance, Chief Financial Officer, Secretary and Treasurer of the company.
  • On April 5, 2012, PMFG Inc announced that it has been awarded three new international orders with a combined value of more than $6.5 million for an assortment of process systems equipment to be used in natural gas and oil exploration applications.
  • On March 9, 2012, PMFG Inc announced that it has been awarded Environmental Systems orders totaling more than $2.5 million. One of these projects is for Selective Catalytic Reduction equipment on a new natural gas combined-cycle power plant in Texas.
  • On March 7, 2012, Met-Pro Corp. announced that the company's Environmental Air Solutions business unit has received an order to supply a Flex-Kleen brand dust collection system to a petrochemical refinery located in The Russian Federation.
  • On February 16, 2012, Itron, Inc. announced that the City of Madison, WI Water Utility will implement Itron`s advanced metering infrastructure (AMI) for Project H2O, the City`s program to automate the collection and analysis of water meter reads.
  • On February 16, 2012, PMFG Inc announced the pricing of its previously announced public offering of 2,600,000 shares of its common stock at a price to the public of $16.00 per share.
  • On February 15, 2012, Itron, Inc. and National Grid announced that they are collaborating on a project to build and evaluate an advanced smart grid in Massachusetts utilizing a new generation of standards-based network technology.
  • On February 15, 2012, Itron, Inc. announced that for fiscal 2012, it expects revenue to be between $2.1 billion and $2.3 billion and non-GAAP diluted EPS between $3.80 and $4.20.
  • On February 7, 2012, PMFG Inc announced a follow-on public offering of 2,600,000 shares of its common stock. All shares will be offered by the company. The company intends to use the net proceeds from the offering to repay all of its outstanding borrowings under its senior term loan and for general corporate purposes, including international expansion and strategic acquisitions.
  • On January 27, 2012, A. O. SMITH CORPORATION announced that for fiscal 2012, it expects earnings per share in the range of $2.65-$2.85. According to I/B/E/S Estimates, analysts were expecting the company to report EPS of $2.83 for fiscal 2012.
  • On January 19, 2012, PMFG Inc announced that it has been awarded an Environmental Systems order in excess of $3 million for Selective Catalytic Reduction systems for installation on boilers on a turnkey installed basis.
  • On December 22, 2011, PMFG, Inc. announced that it has been awarded multiple international orders totaling $15 million for projects related to natural gas processing and transmission in South America and southern Asia.
  • On December 19, 2011, Met-Pro Corp. announced that the company's Board of Directors, at their meeting on December 16, 2011, declared a quarterly dividend of $0.071 per share payable on March 16, 2012 to shareholders of record at the close of business on March 2, 2012.

Sources: Yahoo Finance, Google Finance, Marketwatch, Finviz, Reuters.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

How To Set Up Your Own Credit Card Processing System

More than sixty percent of all business sales are accounted for by credit card transactions, and if you sell exclusively online that number can typically jump up to a hundred percent. Credit cards are still the most preferred payment method of American consumers, despite the occasional identity theft-related news report. If you are starting your own business, one of the key things that you should have set up right away is your own credit card processing system. Credit cards are a much safer alternative for both you and your customers and it is also much more convenient to shop with. Simply advertising your capability of accepting credit card payments with a sign on your storefront window is enough to attract more customers, even those who typically pay with cash. It is important to choose the right credit card processing merchant, one that allows you to accept a wide variety of cards while providing fraud resolution services, tech support and other value added services, all the while at a rate that is reasonable compared to other processors. Also remember to ask about any bonuses that can lower your monthly service fees such as reaching a certain amount of credit card transactions each month.

Processing credit cards is a little bit more of a challenge if your business is regularly on the road or has no permanent venue. It requires specialized equipment that is slightly different than what you would see on a stationary P.O.S. system. This is especially useful at trade shows and fairs and most card processing merchants have mobile credit card processing services specifically for this type of business. They can sometimes charge on a per-transaction basis for utilizing a wireless transmission in addition to other extra costs that help accommodate this added functionality. You can also either purchase or lease the necessary equipment through your merchant. Keep in mind that security protocols that govern credit card transactions change every now and then, meaning that a machine can all of a sudden become outdated with little warning. Whether to buy or lease the equipment becomes a much harder decision to make because of this.

Keep in mind that there are other pieces of equipment in addition to the credit card swiper that make up a credit card processing terminal. To help keep track of their transaction, some people find that receipts are important. A thermal printer comes in handy in this kind of situation. Depending on the needs of your business there are both wired and wireless models that you can take advantage of. This equipment can also be bought or leased like credit card terminals.

Sell in May and Go Away? Yes.

Once April rolls around, the seasonal effect of selling-in-May-and-going-away makes its comeback in media. Should an investor follow this adage? Let me break it down. The original academic article written by colleagues of mine, Bouman and Jacobsen (2002), called the seasons effect "The Halloween Indicator."

Their research concludes that for a U.S. portfolio the return between a portfolio that is invested during the summer and a portfolio not invested during earn a very similar return over a long period. However, the portfolio that raised cash during the summer had lower volatility. This research does not take into account the affect of taxes or trading costs. It appears for the average investor it does not make sense to sell in May and try to time a re-entry point. Then you must pay transaction costs, can not defray capital gain taxes, and emotional biases may set in where you buy in at the wrong time or sell and regret it.

I have recently been working on an academic paper that examines this seasonal effect at a deeper level. I have been looking the seasonal effect during different economic environments. For example, during May to August of 2009 the United States was in the midst of a rebound from depressed stock levels. The same for the summer of 2003. Those periods were horrible time to sell in May and go away. However, other periods such as 2004 sell in May and go away worked. I find that investing based on this seasonal effect works only in certain economic environments. If one can identify those environments than one can successfully sell in May and go away.

What cycle or environment are we in now? Based on the Behavioral Finance Investment Advisors (BFIA), we have detected three periods in the past forty years that are similar to today. One of those periods is 2004. Let us take a look at 2004. From the beginning of January to the 3rd week in April the S&P 500 increased over 4%. From the end of April to the beginning of August it fell over 4% and from August to December is increased around 13%. From the beginning of January to April 15th, 2011 the &P 500 is up around 5% similar to the first quarter of 2004.

So far our indicators since November of 2010 have been tracking the 2003-2004 indicators very closely. Take a look at the chart below which plots our indicators for the January - April period for 2004 and 2011.

Figure 1: BFIA Indicators 2004 vs. 2011

It can been seen that they are tracking each other very closely.

The conclusion here is that it is important to identify the investment cycle that we are currently in and then decide whether the seasonal effect applies. Forget all the other noise in the market. Where we are in the cycle is what matters.

Based on our indicators we see a continuation of 2004. Therefore, we suggest to sell in May and go away. For the other two periods that match today's indicator level, the next three months were also down months. However, the U.S. indicator level is at a bullish level, which signifies that there will not be another flash crash. That volatility will not increase to absurd levels as in the flash crash. The market will trend down for three months starting in a week or two, with occasional pops.

What are the ways to play the U.S. stock market in the next three months?

  • Raise cash to at least 50%. Wait for three months and then re-deploy that cash.
  • Keep your current portfolio but buy protection for the next three months. This could mean buying inverse ETFs such as ProShares Short S&P 500 ETF (SH) to protect some or all of your portfolio. One may also want to short the European market since the paper above suggests that the seasonal effect is strongest in Europe. One can either short an European ETF such as iShares S&P Europe 350 (IEV) or buy an inverse ETF such as ProShares UltraShort MSCI Europe (EPV).
  • Long volatility by buying a call on the VIX or buying iPath S&P 500 VIX Short-Term Futures ETN (VXX). Currently the VIX is around 15, below its long-term average. However, I suggest against this since our indicators suggest the next three months will not be very volatile but more of a slow downward trend. The market could trend down with the VIX not increasing by very much or at all.
  • To conclude, it matters where we are in the investment cycle, and our research indicates that the next several months will be down months.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Top Stocks For 4/9/2012-20

    Nautilus Inc. (NYSE:NLS) announced unaudited results for the fourth quarter and full year ended December 31, 2010. Direct Channel: Total sales through the Company�s direct channel in the fourth quarter of 2010 were $28.2 million, a slight decline of 2.3% from total direct sales in the comparable period in 2009. In the fourth quarter of 2009, the Company experienced a 19.9% decline in total direct sales from sales levels in the fourth quarter of 2008. Direct channel sales of the Company�s cardio oriented products in the fourth quarter of 2010 increased 17.0% compared to the fourth quarter of 2009, primarily due to increased sales of its proprietary Bowflex� TreadClimber cardio product line. This largely offset continuing sales declines of the Company�s legacy strength oriented products, including Bowflex� rod-based home gyms, which fell 32.3% in the fourth quarter of 2010 compared to 2009.

    Nautilus, Inc., together with its subsidiaries, operates as a fitness products company primarily in the United States and Canada.


    A substantial body of research shows that there are serious health and financial reactions associated with being uninsured. Moreover, research shows that leaving a large share of the population without health insurance affects not only those who are uninsured, but also the health and economic satisfaction of the nation. Yet, in spite of these findings, the number of Americans without insurance continues to grow. Although the national discussion over confirming health coverage for more Americans periodically gains force, it then stalls�perhaps in part because not enough is known about both the benefits and the costs of amplifying coverage to more, if not all, of the uninsured.

    NATIONAL HEALTH PARTNERS, INC. (NHPR.OB) is a leading national healthcare savings organization that provides unique discount healthcare membership programs to uninsured and underinsured people through a national healthcare savings network called �CARExpress.�

    CARExpress membership programs provides a variety of benefits to members, businesses and association, and healthcare providers and provider networks.


    Benefits to Members. CARExpress membership programs are attractive to our members because our programs provide them with access to a variety of healthcare products and services at discounted prices. Membership in CARExpress membership programs is unrestricted and provides benefits to individuals who, because of their medical history, age, occupation or financial condition, are unable to obtain health insurance.

    Benefits to Unions, Associations and Businesses. CARExpress membership programs are attractive to unions, associations, businesses and other organizations with large numbers of members or employees because our programs can assist these organizations in their efforts to attract and retain members and employees by enabling them to offer a more complete healthcare benefits package.

    Benefits to Healthcare Providers and Provider Networks. CARExpress membership programs are attractive to physicians, hospitals and other healthcare providers because our programs help healthcare providers and provider networks increase their customer base. In addition, healthcare providers are paid at the time of service, reducing the billing procedures and cost associated with insurance and allowing the provider to immediately collect payment.

    National Health Partners CARExpress health discount programs cover various aspects of healthcare, including physicians, hospitals, ancillary services, dentists, prescription drugs, vision care, hearing aids, chiropractic services, alternative care, 24-hour nurseline, medical supplies, and equipment, as well as long-term care facilities, which include skilled nursing facilities, assisted living facilities, respite care, and home health care.


    Orofino Gold Corp. (ORFG)

    Orofino Gold is a Colombia based gold producer, founded as a private company in 2009 by former executives with over 50 cumulative years in mining exploration, finance, and development expertise.

    Orofino Gold recently announced the appointment of Mr. Salvador Rivero to the company’s Board of Directors. At Orofino, Mr. Rivero, a Spanish-speaking executive, will assist in overseeing the acquisition of new properties. In addition, Mr. Rivero will utilize his extensive international experience in development and selection of partners for the progression toward large-scale production.

    Mr. Rivero will play a key role in the development of the properties in Orofino’s current Senderos de Oro gold camp in the mining area of central Sur de Bolivar, a project area comprised of more than 3000 hectares of mineral concessions in Colombia’s highest producing artisanal mining region.

    Orofino’s strategy to become a recognized player in the Colombia mining sector began with the acquisition of the La Azul/La Estrella property in the Senderos de Oro region of Colombia, a Northern extension of South America’s highly mineralized Andes Mountain Range. Development of this property has included acquisition of concessions for the surrounding lands, including adding the San Carlos and Culo Alzado properties, detailed analysis of historic geological and cultural records of the area, and regular mineral analysis of newly obtained resource samples.

    Gold is not just for rings, coins and ingots stored at the Federal Reserve Bank. It’s a natural element with excellent properties for electronics. Gold is a good conductor of electricity, better than copper or aluminum. It’s also a good conductor of heat and very malleable.

    In addition, Orofino has acquired a database comprised of exploration and mining results from previous operators who left as a result of pre-21st century regional civil and economic instability.

    For more information about ORFG at:

    Alpha Natural Resources, Inc. (NYSE:ANR) has made a strategic equity investment in Alexandria, Va.-based CERATECH, Inc. (CTI). CTI manufactures a revolutionary “green cement” that utilizes 95 percent waste fly ash from electric utilities, dramatically reducing their landfill requirements while generating zero carbon dioxide emissions from the cement production process. CTI’s technology allows for beneficial repurposing of fly ash, a by-product of coal combustion, dramatically reducing the volume of ash that is being land filled. About three of every five tons of ash produced�approximately 42 million tons a year�end up in a landfill. A ton of CTI “green cement” diverts approximately 1,800 pounds of landfill waste. An additional benefit of CTI’s unique technology is that its cement production process generates no carbon dioxide emissions furthering its attractiveness.

    Alpha Natural Resources, Inc. operates as a coal producer primarily in the central Appalachian and northern Appalachian regions.

    Molycorp, Inc. (NYSE:MCP) announced financial and operating performance for the fourth quarter and full year 2010. Revenues in 4Q 2010 rose 154% to $21.7 million compared to 3Q 2010 revenues. Compared to 4Q 2009, revenues rose 885%. Both sequential and annual growth was driven by a combination of increased sales volume and significantly higher pricing. Net loss in 4Q 2010 was ($7.9 million). However, excluding special items and certain non-cash accounting charges attributable to stock-based compensation and equipment write-offs, Molycorp generated positive earnings of $2.2 million, or $0.03 per share, in 4Q 2010. The Company sold approximately 638 metric tons of rare earth oxide (REO) products in the fourth quarter 2010, a 20% increase compared to 3Q 2010, and a 37% increase from the approximately 467 metric tons sold in 4Q 2009. The Company realized an average sales price of approximately $34.02 per kilogram, compared to an average sales price of $16.10 per kilogram in 3Q 2010, and an average sales price of $4.72 per kilogram for 4Q 2009.

    Molycorp, Inc., a development stage company, focuses on the production and sale of rare earth oxides (REOs) from stockpiled feedstocks in the western hemisphere. It operates the Mountain Pass mine, a non-Chinese rare earth deposit.

    Winning Sector of 2011 Still Making New Highs

    Stocks closed mixed in light trading yesterday, as the low-volume rally that began on Thursday ground to a halt. A rise in crude oil to over $100 a barrel was blamed for the lack of enthusiasm. But a focus on defensive issues and special situations indicates a loss of interest in continuing a broad advance during the shortened trading week.

    Even the lack of bad news fromEuropeand a significant rise in the Consumer Confidence Index for December failed to draw in many buyers. The index rose to 64.5 from 56; it was expected to rise to just 58.

    At the close, the Dow Jones Industrial Average fell 3 points to 12,291, the S&P 500 rose less than a point to 1,265, and the Nasdaq rose 7 points to 2,625. The NYSE traded 494 million shares and the Nasdaq crossed 200 million. Breadth was even on both exchanges.

    The conservative Dow Jones Utility Average received scant attention from the media throughout the year, as they focused on the wild swings generated by European contagion and other more exciting topics.

    But even as the dangerous European situation created unprecedented volatility in the world�s markets, the utility stocks plodded on. By yesterday�s close, �the index for widows and orphans� had gained over 15% since the year�s start. That, coupled with an average dividend rate of about 3%, made the utilities the winning sector of the year.

    Yesterday, even as the year is grinding to a close, the Dow Jones Utility Average broke from the top of its bullish channel and made a new high for the year, while The Wall Street Journal was praising the S&P 500 for just breaking even. To be fair, the Journal was comparing the performance of U.S. stocks to underperforming European markets and even such former high-flyers as the Tokyo and Shanghai benchmark indices.

    Unlike the utility stocks, gold had a wild ride losing 16% since August while still achieving a 12% gain for the year. The new year could begin with another rush after key commodities like oil, gold and other hard assets.

    If so, the reversal from the SPDR Gold Shares (NYSE:GLD) support line may be hinting that a new bottom is forming. However, in order for the bottom to have substance, it must hold its December low and close above the 200-day moving average at $158.

    If you�re looking for fast profits in the new year, my colleague Joe Burns just closed a BIDU trade for a 158% profit, a FSLR trade for 143.75%, and a GOOG trade for 80%. Get in on his new trades now.

    What to Expect From Carnival Cruise Lines for the Rest of 2012

    So far in 2012, Carnival Cruise Lines (NYSE: CCL  ) and its investors have dealt with highs and lows. In January, a tragic accident caused the stock's price to fall 15.8% in a single day, but it has slowly climbed its way back up and is now up 5% for 2012, but what can investors hope to see for the rest of the year? Let's take a look.
    52-Week High $38.83
    52-Week Low $28.52
    Market Cap $26.72 billion
    Price/Earnings Ratio 19
    CAPS Rating (out of 5) **

    Source: Yahoo! Finance.

    Gas prices are a big concern for the cruise industry. High oil prices can eat away at a company's profits in no time. Currently, only 38% of the company's fuel consumption for 2012 is hedged, which gives it a great opportunity to take advantage of the lower fuel prices we're seeing right now.

    This unexpected turn could help make up for some of the losses the company has dealt with this year and gives them an edge over competitor Royal Caribbean Cruise Lines (NYSE: RCL  ) which had 55% of 2012's fuel consumption hedged, as of April 20.

    While Carnival does expect net revenue to be down for 2012 compared to 2011, the company is already seeing a strong recovery from January's accident. Since March, fleetwide bookings excluding Costa are up 8% compared to the prior year, and booking volume for Costa is up more than 25% for the same period.

    Unfortunately for the rest of 2012 advance bookings are trailing their prior-year comparison. While there is room for this to improve throughout the rest of the year, it's not a great start to the second half of 2012. Neither Carnival nor Royal Caribbean is beating the market so far, and it's unlikely they'll be able to for the rest of the year given the cruise industry's tough dynamics.

    RCL data by YCharts

    Beyond 2012, though, the cruise industry has great prospects. As more and more baby boomers enter retirement, they'll be looking for ways to relax and travel. Cruises offer just that at a variety of price points. Global tourism is another developing area where cruise companies are likely to benefit.

    Carnival's P/E ratio, though, is a bit high for a company in such a strained industry right now, especially when you compare it to Royal Caribbean's 9.4. While the company has recovered admirably, it's probably not the best place for your money right now.

    There are lots of great stocks that will help boost your portfolio this year, though. Carnival may not be one of them, but our analysts have found one that they not only think will provide great returns, but will end up being the top stock for 2012. They put everything you need to know in a free report -- all you need to do is click here to read it now.

    Dell Reportedly Plans 5-, 7-, 10-Inch “Streak” Android-Based Tablets

    The Apple (AAPL) iPad may be the first serious move into the tablet market, but it won’t be the last.

    Dell (DELL), for one, is reportedly developing a line of tablets branded as “Streak.” The blog Engadget has been gradually ferreting out information on what Dell is up to, and on Friday wrote that the company is apparently walking on versions of the Android-based products in 5-inch, 7-inch and 10-inch sizes.

    The post contends that the Streak 5 is coming this summer, to be followed by a 7-inch version later this year, and a 10-inch version in early 2011.

    How to Tell If Lockheed Martin Is Hiding Weakness

    Lockheed Martin (NYSE: LMT  ) carries $9.6 billion of goodwill and other intangibles on its balance sheet. Sometimes goodwill, especially when it's excessive, can foreshadow problems down the road. Could this be the case with Lockheed Martin?

    Before we answer that, let's look at what could go wrong.

    AOL blows up
    In early 2002, AOL Time Warner was trading for $66.27 per share. It had $209 billion of assets on its balance sheet, and $128 billion of that was in the form of goodwill and other intangible assets. Goodwill is simply the difference between the price paid for a company during an acquisition and the net assets of the acquired company. The $128 billion of goodwill in this case was created when AOL and Time Warner merged in 2000.

    The problem with inflating your net assets with goodwill is that it can -- being intangible, after all -- go away if the acquisition or merger doesn't create the amount of value that was expected. That's what happened in AOL Time Warner's case. It had to write off most of the goodwill over the next few months, and one year later that line item had shrunk to $37 billion. Investors punished the stock along the way, sending it down to $27.04 -- or nearly a 60% loss.

    In his fine book It's Earnings That Count, Hewitt Heiserman explains the AOL situation and how two simple metrics can help minimize your risk of owning a company that may blow up like this. Let's see how Lockheed Martin holds up using his two metrics.

    Intangible assets ratio
    This ratio shows us the percentage of total assets made up by goodwill and other intangibles. Heiserman says he views anything over 20% as worrisome, "because management might be overpaying for the acquisition or acquisitions that gave rise to the goodwill."

    Lockheed Martin has an intangible assets ratio of 27%. This is not so far over Heiserman's threshold as to cause panic, but you'll want to keep an eye on this number over the next few quarters. It's also useful to compare it to tangible book value.

    Tangible book value
    Tangible book value is simply what remains after subtracting goodwill and other intangibles from shareholders' equity (also known as book value). If this is not a positive value, Heiserman advises you to avoid the company because it may "lack the balance sheet muscle to protect [itself] in a recession or from better-financed competitors."

    Lockheed Martin's tangible book value is -$6.7 billion, so we have another yellow flag.

    I asked Heiserman about the tendency for some large-cap blue chips -- names like Procter & Gamble, IBM, and Altria -- to have a high intangible assets ratio and negative tangible book value. He says this can be OK, provided the company has (1) modest or no net debt, (2) persistent and rising levels of free cash flow, and (3) stock buybacks at a discount to intrinsic value.

    Lockheed Martin fares well in all but its debt load. Because of its strong history -- and research I've done indicating negative book value may not be detrimental to large caps -- I give this company the benefit of the doubt.

    Lockheed Martin Stock Chart by YCharts

    Foolish bottom line
    To recap, here are Lockheed Martin's numbers, as well as a bonus look at a few other companies in its industry.



    Book Value�

    Lockheed Martin 27% ($6,663)
    Boeing (NYSE: BA  ) 11% ($2,067)
    Northrop Grumman (NYSE: NOC  ) 50% ($589)
    Raytheon (NYSE: RTN  ) 52% ($2,213)

    Data provided by S&P Capital IQ.

    If you own Lockheed Martin, or any other company that fails one of these checks, make sure you understand the business model and management's objectives. You can never base an entire investment thesis on one or two metrics, but there is a yellow flag here. I'll help you keep a close eye on these ratios over the next few quarters by updating them soon after each earnings report.