Saturday, October 6, 2012

Morning Report: Global Inflation Fears Pressure Futures

By Bryan McCormick

U.S. stock index futures are lower this morning after a weak session in Asia and a broadly negative day in Europe.

Asian markets fell after China raised bank capital reserves by 50 basis points, the latest in a series of attempts to cool off its overheating economy. Asian markets ended lower on the day as a result.

In Europe concerns over inflation prompted a downturn in markets as well, especially in Germany. Inflation exceeded the European Central Bank's target for the first time since May 2007. The size of the eurozone bailout fund would potentially rise, according to French officials, as the crisis in the peripheral economies continues.

The concerns overseas have helped to send the euro lower after its sharp spike higher yesterday. The dollar is trading up this morning as a result. Most commodity prices have eased after a week that saw very large moves.

Intel (INTC) and JP Morgan (JPM) both beat consensus expectations when they reported earnings results, but the market reaction at the time of this writing has been very muted. Intel shares are up $0.30 from yesterday's close, while JP Morgan shares are virtually flat. Although this could change after the opening bell, this apparent lack of interest may prove to be a longer-term problem for bulls as we head deeper into earnings season next week.

Coinstar is the disaster of the day, down more than 26 percent in the pre-market after reporting earnings last night. The company dramatically lowered its fourth-quarter and full-year estimates by nearly 30 percent at the extreme of the new range.

With American markets closed for Martin Luther King Day on Monday, we will see a compressed reporting schedule next week. Among the names reporting on Tuesday are Apple (AAPL), Citigroup (C), Fastenal (FAST), Forest Laboratories (FRX), IBM (IBM), Linear Technology (LLTC), and Western Digital (WDC).

Disclosure: No position

The Best Performing Stocks of 2010

At least one thing went right in 2010 — the stock market soared.

Despite the never-ending housing bust, sky-high unemployment, and an ongoing debt crisis in Europe, the S&P 500 index rose by about 13 percent in 2010, and that came after a 23 percent gain in 2009. Deep cost-cutting and a modest recovery in sales led to record profits at big firms, and some even started to hire again.

To analyze the highest of the high-flyers, I asked research firm Capital IQ to rank the 2010 stock-price performance of about 1,100 publicly traded U.S. companies with a market value of $1 billion or more. About 150 of those firms enjoyed stock-price gains of more than 50 percent. A few of those companies might be the next Google (GOOG) or Facebook, with killer technology that could help drive the next phase of the digital revolution. Many others are firms on the rebound after being severely beaten down during the recession. And some are simply well-run companies that have become very profitable thanks to innovative products, low debt, and a sharp business plan. Here are the top 10 stock-market performers* of 2010:

  • Netflix (NFLX) (stock price up 226 percent in 2010). Life's good when your main competitor declares bankruptcy, which movie-rental chain Blockbuster (BLOKA.PK) did in September. Netflix outflanked its rival with its popular DVD-by-mail service, and has been aggressively preparing for the future by inking distribution deals with studios and securing new kinds of technology for online video streaming. Some analysts think the stock is overpriced, but others feel Netflix is on the verge of becoming a new media titan.
  • Crocs (CROX) (up 209 percent). Toward the end of 2008, the colorful, rubbery shoes made by this company seemed like a fad destined to peter out, as sales plummeted. Worse, an aggressive expansion plan had loaded the company with debt it suddenly struggled to pay off. As losses mounted, the stock plunged to nearly $1. But the company slashed costs, and new products began to catch on. By 2010, sales were soaring above expectations, making Crocs one of the year's comeback stories.
  • Riverbed Technology (RVBD) (up 201 percent). This San Francisco-based tech firm sells software and equipment that helps companies improve the speed and performance of their digital networks — an important way companies are cutting costs and becoming more efficient. Sales and earnings have surged this year, a trend likely to continue since Riverbed is positioned to be a big beneficiary of the move to "cloud computing" using the Internet and other global networks. The stock continued to rise even after a two-for-one split in November.
  • Chipotle Mexican Grill (CMG) (up 153 percent). There was barely a recession at this upscale fast-food chain, where traffic and sales have grown consistently over the last several years. While other restaurants have cut prices or offered deals to draw customers, Chipotle has boosted sales with an appealing menu and fresh, all-natural ingredients — and even raised some prices. Minimal debt allows the company to invest heavily in marketing and quality improvements, while continuing to expand.
  • Atmel Corp. (ATML) (up 167 percent). Sales fell during the recession at this firm that builds specialized computer chips and other components for consumer electronics, cars, avionics, and networking equipment. But cost-cutting and the sale of one expensive division improved performance in 2010, while deals to provide parts for new Smart (SMT) and Samsung (SSNLF.PK) devices boosted the sales outlook. The majority of Amtel's sales come from overseas markets — particularly Asia — which are generally growing much faster than the U.S. economy.
  • F5 Networks (FFIV) (up 153 percent). Like Riverbed, F5 is sitting pretty thanks to hardware and software that makes corporate computer networks run faster and more securely. The shift to Internet-based "cloud computing" has boosted demand for F5's products and helped it beat sales and earnings estimates all year, which has kept the stocked juiced.
  • Cummins (CMI) (up 140 percent). The transportation industry stalled during the recession, but this Indiana-based maker of diesel engines has come roaring back, thanks largely to sales in developing nations, which are growing faster than the U.S. market and other mature economies. The company raised its dividend by 50 percent in 2010, and boosted sales and earnings estimates for the next several years.
  • Deckers Outdoor (DECK) (up 149 percent). Follow a gaggle of teenage girls — practically all of them wearing some form of UGGs — and you'll understand why profits have been soaring at this innovative footwear company. The sheepskin boots are becoming popular in China too, which gives Deckers a strong diversification strategy. And other brands, like Teva and Simple, add depth to Deckers' product portfolio. A three-for-one split in July underscored the company's rich outlook.
  • United Rentals (URI) (up 129 percent). This heavy-equipment rental company ended 2007 like a spurned bride, after a private-equity firm broke off plans to buy it. Then the recession hammered the construction industry — where much of the demand for United Rentals' earthmoving equipment, power tools, and landscaping gear comes from — driving the stock price more than 90 percent below its 2006 peak. To recover, the company cut staff, closed underperforming outlets, and formed a variety of partnerships. Revenues started to recover in 2010, and analysts think the firm could be a prime beneficiary of a recovery in construction and the broader economy.
  • LogMeIn (LOGM) (up 129 percent). This Boston-area tech firm conducted one of the few successful public offerings of 2009, and the stock is now almost three times higher than the offering price. That's because LogMeIn is hitched to the success of gizmos like the iPad and iPhone, with software that lets users access a desktop computer from a mobile device. The firm raised its revenue and profit outlook at least three times in 2010, making it a Wall Street darling — just like Apple (AAPL).
  • *Based on market capitalization as of mid-December, and stock prices as of Dec. 27, 2010.

    Related posts:

    • See 20 companies that cratered in 2010
    • See who will prosper in 2011
    • See who will struggle in 2011
    • See the worst-performing stocks of 2010

    Disclosure: No positions

    Mutual Fund Investing: Tech Winter

    Now that summer is winding down, its time to look ahead. Historically, from the end of October to the end of February, tech stocks tend to outperform the overall stock market. This phenomenon is something I call "Tech Winter." You can think of it as the prime time to overweight tech. While it may seem strange that tech stocks follow a seasonal pattern, there are actually several factors I’ve found that can explain it.

    #1: Fourth-Quarter Spending

    The first is fourth-quarter spending by corporations. Over the course of a year, information technology managers tend to hold back some of the money in their budgets. That way they won’t be caught penniless in case of a late emergency or some technological innovation that becomes necessary to stay competitive as the year progresses.

    But as year-end approaches, this unspent money needs to be used. Why? Because the tech managers know that if they have something left over, their budget for the next year will probably be cut (see also, “Apple’s 3G Boosts Grim Corporate IT Outlook“). They don’t want that, so they spend freely in the year’s final months. That spending also has tax implications for companies that want to cut down on what they owe the government.

    #2: European Purchasing Power

    A second, separate factor is Europe. European purchasers account for about 35% of U.S. technology orders. During the fourth quarter, they do a significant amount of buying. This happens year after year because of the longer summer vacations European companies give their workers. Orders slack off while they’re away, and when they return, orders begin rising in the fall and through the winter, often hitting a peak in the last few months of the year.

    #3: Year-End Discounts

    A third factor is year-end discounts. Hardware companies, preparing for new product launches, start offering discounts on existing inventory to speed sales. These discounts allow corporate purchasers looking for proven technology to buy the cheap, well-tested products still sitting on manufacturers’ shelves.

    The net effect is that technology companies begin to… see increased demand, and tech stocks rally in advance of earnings news. “Tech Winter” draws to a close in the first couple of months of the new year, when tech companies restock their inventories and a new purchasing cycle commences. As this happens, tech stocks don’t necessarily under-perform the stock market as a whole, but they do become less predictable in their movement.

    Okay, that’s the background. Now here’s the proof:

    Proof-Positive Profits

    When I’ve looked at this four-month period during each of the last 22 years, Vanguard’s oldest and tech-heaviest funds have significantly outperformed 500 Index (VFINX), which currently has about a 16% tech weighting.

    Over just the last 10 years, the numbers are again pretty convincing. Only Growth Index failed to outperform 500 Index, on average, simply matching its average 4.3% return for the four-month Tech Winter period.

    The trend holds true for a number of tech-heavy Fidelity funds. (Jim Lowell, editor of Fidelity Investor, was gracious enough to supply this information.)

    (But please don’t get too eager! If “Tech Winter” were a sure thing, there wouldn’t be any need for my newsletter, The Independent Adviser for Vanguard Investors, and my diversified Model Portfolios!)

    I don’t recommend making major investment decisions based upon short-term trends such as “Tech Winter.” Year-to-year results can vary immensely. Between Nov. 1, 2000, and Feb. 28, 2001, for instance, Fidelity’s tech sector funds, for instance, faced losses ranging from Select Software’s 33.2% decline to a 45.2% loss for Select Computers. Compare that to what looks like a minimal 12.9% drop for the S&P 500.

    Should you want to both own great funds and try to make a bet on a good tech season, I announce my favorite choices among funds with heavy tech holdings and managers who know how to use them every November in my monthly newsletter, The Independent Adviser for Vanguard Investors.  Each month I help my subscribers make more than 144% more than the average Vanguard investor.  And with my risk-free money-back guarantee, you have nothing to lose, but a ton to gain.

    Futures Rise After CPI, Strength in Europe

    Stock futures rose early Friday as the consumer price index was flat in November, with the core rate rising 0.2%. European stocks were trading higher, and U.S. banks rode that momentum despite an announcement by Fitch Ratings late on Thursday of downgrades to major banks including Morgan Stanley (MS), Bank of America (BAC) and Goldman Sachs (GS).

    Dow futures rose 69 points to 11,891; S&P 500 futures rose 8.7 points to 1,220.4.

    Tech stocks are in the spotlight this morning, with Research in Motion (RIMM) falling 10% on a weak forecast, and social-game company Zynga (ZNGA) set to start trading today.

    Cablevision (CVC) fell 9% after its COO suddenly resigned.

    Huge Untapped Profits Are Waiting In The Chilean Desert

    Look around the room you are in. I guarantee there's at least a dozen devices powered by electricity, and of those, at least a few are powered by batteries.

    Batteries -- or in more precise terms, energy storage devices -- have remained pretty much unchanged for almost a century. And it's only been in the past two decades, with the advent of the portable computer, that engineers have been working diligently to find smaller, lighter, cooler and more durable energy storage technologies.

    The biggest breakthrough at this point is lithium ion batteries. They can store a charge in a relatively small package and can be cycled -- one cycle is a run from full to empty -- many times, making them durable and reliable.

      All these advantages have made our mobile lives much more tech-laden, since we can now take devices to places and do things with them we never dreamed of 20 years ago. Lithium ion batteries are game-changers, and exactly the kind of trend I look for in my premium letterGame-Changing Stocks.

    From cameras to mobile phones to computers to cars, lithium ion energy storage is going to be around for a long while. And as emerging markets grow, so will demand for the consumer products that are powered by these devices -- none more so than cars and busses.

    I bet just a few years ago the thought of battery-powered cars would have made you smirk. Sport utility vehicles ruled the road. And while we knew it was possible to get from Point A to Point B in a vehicle powered by batteries, the thought also conjured up images of a tiny car that looked more like a tin can than an automobile.

    How times have changed. With a push toward "green" fuel sources and a dramatic rise in gasoline prices, battery-powered cars not only became popular -- they became status symbols.

    Sales have similarly followed suit, as you can see from the chart below. But they're just going to increase. I think a record number of electric and hybrid cars could be sold in the United States in 2011, especially if gasoline prices shoot back up. And keep in mind that Japan buys just about as many hybrids right now as the U.S.

    General Motors is going electric with the Volt. Ford is planning a battery-powered car based on the Focus. And of course Toyota has the Prius... Honda, the Insight... and Nissan's Leaf just debuted in Europe.

    Despite record sales, the big winners won't be the car makers. I think there is another way to make even more money from the transition and growth of battery power.

    Investors who win big will be looking at a desert in Chile. Salar de Atacama is a salt flat in Chile that at first glance doesn't look like it would offer much in the way of natural resources. But what this special place holds might be the auto industry's most valuable piece of real estate. It contains one of the world's largest deposits of a rare metal needed in every new electric car rolling off the assembly line: lithium.

    Lithium is the key component in next-generation electric car batteries, and it may prove as valuable as gold. And to play the increased demand, I like one miner in particular. It's the world's largest producer of lithium (31% of the world's production), thanks to Salar de Atacama.

    But just because it's a large company is not why I like this company. Lithium mining is actually kind of interesting. Miners collect brine from the salt flats and put it into solar drying ponds. It helps that the Atacama is one of the hottest places on earth, which means this firm can not only operate faster than its competitors, but it can also operate year-round.

    This miner's other advantage lies in the fact that its brine has an extremely high concentration of lithium. As a result, the company can produce the metal at a cost that's significantly lower than its competitors (about 30-50% lower).

    Being the low-cost producer is a powerful competitive advantage, especially given the future demand for lithium. In fact, I think the potential for lithium to be a game-changer is so great, I've named it one of my 10 Hottest Investment Opportunities for 2011.

    > Given the future demand for lithium and Chile's huge reserves of the commodity, the future seems very bright.

    Monday’s Stocks to Watch: Corn Products, Int’l Coal

    Here are a few stocks to keep on your radar:

    • Corn Products (NYSE:CPO) shares rose�nearly 4%�after the company beat analysts’ first-quarter profit and revenue expectations.
    • International Coal (NYSE:ICO) jumped�more than 30% to $14.42�on news that Arch Coal (NYSE:ACI) would buy the company for $14.60 a share — a 33% premium — in an all-cash deal worth about $3.4 billion.
    • Armstrong World Industries (NYSE:AWI) gained�2.2% after the company beat Wall Street’s first-quarter earnings and revenue estimates.
    • Shares of Echostar (NASDAQ:SATS) slipped�5.7% after the company missed analysts’ first-quarter earnings expectations. Revenue fell more than 23% from a year earlier.
    • LyondellBasell (NYSE:LYB) rose�5.6% after the company’s first-quarter earnings report, which included the company noting that the second quarter was “off to a good start.”

    Fiduciary Debate Lands at Supreme Court

    The debate over investment advisors' fiduciary duty has made it all the way to the Supreme Court. On Monday, November 2, Supreme Court Justices heard oral arguments from lawyers for three investors who claimed that Harris Associates of Chicago, the investment advisor for the Oakmark family of mutual funds, charged them higher fees for similar services than it did to independent institutional investors such as pension funds.

    While it's unclear how the Supreme Court will ultimately decide Jones v. Harris Associates--the High Court likely won't render its decision until March--the Justices' questions "got at the heart of the issue in terms of what is fair [regarding] fund fees and how can we develop a process that consistently delivers fair fees to shareholders," says Laura Lutton, editorial director in the Fund Research Group at Morningstar.

    Justice Sonia Sotomayor focused her questions on whether the inequity in fund fees was due to how the fund board is negotiating, Lutton says, while the more conservative Justices questioned whether in a market of 8,000 mutual funds investors could just switch to fundswith lower fees. But as one of the attorneys noted during the hearing, Lutton points out, that's easier said than done because there are costs associated with switching funds, an investor may be limited to the choice of funds within a 401(k) plan, or there may be embedded gains in a fund and switching would trigger a taxable event.

    Important questions were raised during the hearing, such as whether it's okay for a fund to charge higher fees if it's outperforming, Lutton says. However, based on Morningstar's research, she says, "fees are the most important predictor of performance." The lower the fee, Lutton says, "the more likely the fund will outperform over the long term."

    The Supreme Court case also shines the light once again on how fees are disclosed to investors. "The industry's accounting when it comes to fees has not been as clean as it could be," Lutton says. Case in point is the Securities and Exchange Commission's goal to revamp 12b-1 fees, which took root a couple years ago. "Where are these fees going in terms of offsetting costs for the funds or compensating brokers, or distribution platforms? That's not clear," she says.

    SEC Chairman Mary Schapiro has said that the SEC still plans to tackle 12b-1 fees. The question still remains, however, as to "whether the SEC takes that matter up and changes the way fees are disclosed," Lutton says.

    Both Lutton and James Gregory, a partner in Proskauer Rose LLP's Employee Benefits and Executive Compensation Group in New York, agree that the Supreme Court may vote to give more teeth to what's known as the Gartenberg standard, which Lutton says "has been the standard that fees have been judged legally on the last 20 or so years."

    The Investment Company Institute (ICI) filed friend-of-the-court briefs in support of Harris Associates. As the ICI notes in a recent overview of the Jones v. Harris case on its Web site, "At issue in the case is the standard a federal court would use to review a claim by a fund shareholder alleging that a fund adviser received excessive fees under Section 36(b) of the Investment Company Act of 1940." The Seventh Circuit's decision departed from the standard established in 1982 by the U.S. Court of Appeals for the Second Circuit in Gartenberg v. Merrill Lynch Asset Management Inc., the ICI says, "which held that a fund adviser breaches its fiduciary duty to shareholders if it charges a fee 'so disproportionately large that it bears no reasonable relationship to the services rendered and could not have been the product of arm's-length bargaining.'"

    There was speculation that the Supreme Court would use the mutual fund fees case as a springboard to issue a larger ruling on executive compensation. However, Gregory of Proskauer says that "after reading the transcript from the oral arguments, my sense is that the court will take a more narrow approach. A lot of the questions had a narrow focus."

    Chesapeake Energy: BofA Still Says Buy, Sterne Agee Is Cautious

    Shares of Chesapeake Energy (CHK) took a beating yesterday after news broke of the CEO’s loan practices, and the stock was about flat this afternoon.

    Analysts are reacting to the news today, with Bank of America Merrill Lynch analyst Doug Leggate reiterating his Buy rating and $38 price target, as he sees the news as �immaterial to the investment case,� and the stocks� steep decline as �unfounded.�

    �By our analysis CHK has no balance sheet stress � but this appears still to lie at the root of CHK�s share price volatility and ignores the fact that the 2012 capital plan is almost entirely discretionary: no one is forcing management to spend $12bn of capital. But it is perhaps the disconnect between embedded asset value that will be made all the more tangible through disposals in 2012 and the current share price that is the most salient aspect of recent performance: with ~$3-$4bn of operating cash flow expected in 2012 even in the worst of gas price scenarios and some $10bn-$12bn of noncore asset monetization well under way, on our estimates, the scale of cash likely to be released in 2012 alone exceeds the entire market capitalization of the stock at current levels. We contend this mismatch suggests something is being mispriced in the stock.

    Recognizing again the obvious controversies surrounding the stock, we believe at current levels the value proposition associated with execution of its three stage plan to harvest assets, shift production to liquids and reduce debt is compelling. If the disconnect is simply an aversion to Aubrey�s alleged personal financial appropriations, at some point, we wonder when management�s patience wears thin enough to embark on another asset buying spree � perhaps to buy back its own stock. Buy.�

    However, Sterne, Agee & Leach analyst Tim Rezvan was more cautious on the name, reiterating his Neutral rating on Chesapeake as he does not see any imminent liquidity issues facing the stock. But he thinks investors should understand the �impact of prolonged weak gas prices on their cash flow generation ability.� His analysis is below:

    “We assume a capital program of $11.675 billion in 2012 and $11.375 billion in 2013, and asset sales of $10 billion in 2012 and $4.5 billion in 2013. Our current price deck for natural gas is $2.80/mcf in 2012 and $3.60/ mcf in 2013. We held spending and asset sales constant when stressing natural gas prices. We would note that we did not plan for debt paydown in 2012, although the company has pledged to reduce debt to $9.5 billion from the current level of $10.6 billion.

    Results Suggest no Issue in 2012, Although Smaller 2012 Cushion Minimizes Capital to Offset 2013 Gas Price Weakness. By stressing gas down to $1/mcf from 2Q12 through 4Q12, we still see positive FCF of over $1.6 billion. However, we believe the company will need to build up a larger cash buffer to fund 2013 plans, which will not benefit from such substantial asset sales.

    2013 Gas Prices Could Force Company Hand on Capital Spending. Assuming a flat $2/mcf price through 2013, we believe the company would have to decrease spending or accelerate 2013 asset sales above its stated target of $4.5 billion. We estimate aggregate FCF neutrally from 2012-13 at approximately $1.75/mcf. At that price, total FCF of ~$1.1 billion would be netted out by the $1.1 billion debt paydown by year-end 2012. We view this scenario as unlikely but plausible, with gas trading at $1.94/mcf today.”

    AutoZone Inc. (AZO) Posts Q3 Results

    AutoZone Inc. (AZO) Posts Q3 Results

    Shares of AutoZone Inc. (NYSE: AZO) jumped more than 4% in today�s trading. The stock reached a high of $193.74 in trading. At last check, it was up 4.54% to $192.62, with volume up from daily average of 429,000 to 1.43 million. Memphis, Tennessee-based AutoZone is involved in the retailing and distribution of automotive replacement parts and accessories.

    AutoZone today reported its third-quarter results, posting net sales of $1.8 billion in the quarter, up 9.9% from the same period last year. Same-store sales increased 7.1% in the quarter. Net income increased 16.7% to $202.7 million. Diluted EPS increased 31.5% to $4.12 in the quarter. The company�s gross margin improved from 50.2% to 50.7%. The improvement in gross margin can be mainly attributed to higher merchandise margins. Also, the company repurchased 1.5 million of its shares of common stock for $266 million in the quarter. The company is authorized to buyback another $251 million worth of its shares.

    Commenting on the third-quarter results, Bill Rhodes, chairman, president, and CEO of AutoZone, said that the company�s plan remains consistent as it continues to focus on improving parts coverage. Rhodes said that the company remains focused on growing its operating earnings and utilizing its capital effectively.

    AutoZone will continue to benefit as the U.S. economy recovers from the recession as it looks for a complete rebound in the crucial consumer spending. Recent data that has come out indicates that there has been a rebound in consumer spending, which is good sign for the company.

    AutoZone�s stock is trading above its 50-day and 200-day moving averages, at the moment. It has a 52-week range of $135.13-$193.74, which was reached in today�s trading. The stock has a beta of 0.52, which is in-line with the beta for other major U.S. auto part sellers. Currently, the stock has a consensus recommendation of Outperform, with 9 Buy and 1 Outperform ratings against 14 Hold ratings.

    About is committed to producing the highest-quality insight and analysis of small cap stocks, emerging technology stocks, hot penny stocks and helping investors make informed decisions. Our focus is primarily on the underserved OTC stocks market, or �penny stock� market, which has traditionally been shunned by Wall Street. We have particular expertise with renewable energy stocks, biotech stocks, oil stocks, green energy stocks and internet stocks. There are many hot penny stock opportunities present in the OTC market everyday and we seek to exploit these hot stock gains for our members before the average daytrader is aware of them.

    3 Stocks for Investors Seeking Safety; Hough: Worried about a summer sell-off for the market? Consider these shares.

    Don't expect the stocks below to escape losses entirely if the broad market slides this summer. But history says they hold up relatively well in downturns, making them a good fit for jittery investors who want to stay in the market.

    There's plenty to worry about. Spain's 10-year government bonds are flirting with 6% yields, close to what U.S. companies with junk credit ratings pay. That shows that investors aren't fully confident about Spain's ability to ultimately pay what it owes. Spain, whose economy is four times the size of Greece's, has a key bond auction scheduled for Thursday.

    In the U.S., earnings season has brought mostly upside surprises, but not much growth. That's because forecasts were lowered so much over the past seven months that positive surprises aren't much of a surprise. If earnings growth is fizzling, and if earnings were what drove stock prices sharply higher over the past three years, then stock gains may now prove harder to come by.

    Also See
    • 4 Growth Stocks Without the Hefty Price
    • How to Invest in a U.S. Manufacturing Boom

    Yet stocks remain reasonably priced relative to earnings, and the alternatives look lousy. A 10-year, inflation-protected Treasury bond yields slightly less than zero. Better to swap risky shares for safe ones than to commit more money to sure losses with bonds.

    The stocks below have low "betas," which means they have tended to swing less wildly than the broad market in recent years. The have modest prices relative to their earnings, which makes them better suited than pricey stocks to a broad slowing of earnings growth. And they pay healthy dividends, which will be a welcome source of returns if market gains prove smaller in coming years. Lastly, they sell goods and services that tend to find stable demand in good and lean years.

    Abbott Laboratories (ABT)

    Price-to-earnings ratio: 12

    Dividend yield: 3.4%

    Abbott Laboratories makes drugs, nutritional products and medical devices. On Wednesday, it topped Wall Street's earnings forecasts and, perhaps more important for investors, raised its 2012 guidance. The company reported 4.6% sales growth, including 7.1% growth in its key proprietary drug division and 10.1% growth in nutritionals, which include Similac baby formula and Ensure meal replacement drinks. Abbott plans to spin off its drug business later this year in order to try to attract a higher valuation for its remaining businesses. The company has paid dividends since 1924, and is a member of the S&P Dividend Aristocrats, which have increased their payments for at least 25 years running.

    Exxon Mobil (XOM)

    Price-to-earnings ratio: 10

    Dividend yield: 2.2%

    By 2040, world economic output will double, the population will swell to more than nine billion and demand for energy will rise 30%. So says Exxon Mobil in its latest long-term energy forecast. The company right now is enjoying rising profits thanks to high oil prices and strong overseas demand, amid a production boom in U.S. shale fields. But it is also investing heavily in natural gas, whose price has sagged to near decade lows on a glut in supply. That's because Exxon expects demand for natural gas to rise 80% by 2040 as it supplants coal as a fuel for power plants. Energy prices can be volatile, but Exxon stock has been a steady performer, and it trades at a discount of about one-quarter to the broad market.

    Wal-Mart (WMT)

    Price-to-earnings ratio: 13

    Dividend yield: 2.6%

    Wal-Mart raised its dividend payment nearly 9% last month. It also spent $6.3 billion to buy back shares during its fiscal year ended Jan. 31. That's about 3% of its current stock market value, putting the company's total payout to shareholders (dividends plus repurchases) at more than 5.5%. The company has raised its dividend each year since 1974. Last year, Wal-Mart reversed a two-year sales decline at longstanding U.S. stores. Recently, it has signalled a push to better compete for online sales with the likes on (AMZN), creating an e-commerce committee, appointing a Google (GOOG) executive to its board and hiring software developers in India.

    NeoStem Receives SFDA Approval for Reflux Drug

    NeoStem, Inc. (NBS) said its China subsidiary, Suzhou Erye Pharmaceutical, was granted SFDA approval for omeprazole 20mg capsules. Omeprazole is a proton pump inhibitor prescribed to treat peptic ulcer disease and gastroesophageal reflux disease. The drug is on China's National Medical Reimbursement Insurance List, making it eligible for insurance reimbursement.

    NeoStem acquired a 51% interest in Erye in October 2009. It says that omeprazole is the first of seven drugs awaiting approval. The market for the product, while crowded, is very large, which it thinks will give it ample opportunity to capture a share. Erye plans to launch the product this summer.

    Suzhou Erye Pharma is a 50-year old pharmaceutical company that forecast $60 million in revenue and $12 million of net income in 2009. The company boasts a portfolio of 100 products on seven cGMP lines, which it markets exclusively in China.

    Disclosure: none.

    Verizon to end unlimited data for upgraders

    NEW YORK (CNNMoney) -- Verizon Wireless is planning this summer to begin forcing smartphone customers with unlimited data plans to switch to tiered plans when they upgrade, the company's chief financial officer told Wall Street analysts on Wednesday.

    At the JP Morgan Technology, Media and Telecom conference in Boston, Verizon CFO Fran Shammo said the company will unveil a "data share" pricing model by mid-summer, which will give customers the ability to buy an allotment of data that can be used across multiple devices linked to the same account.

    As that plan rolls out, Verizon (VZ, Fortune 500) will discontinue its practice of allowing customers who have legacy unlimited data plans to keep those plans when they buy a new smartphone. Verizon stopped allowing new customers to buy unlimited data plans a year ago.

    "As you come through an upgrade cycle and you upgrade in the future, you will have to go onto the data share plan," Shammo said, "[We're] moving away from, if you will, the unlimited world and moving everybody into a tiered structure data share-type plan."

    The CFO emphasized that the plan is "paper, not actual." A Verizon Wireless spokesman declined to comment on issue.

    AT&T (T, Fortune 500) Wireless, which led the industry with the first tiered data plans, continues to allow customers with legacy unlimited plans to keep that service when they upgrade. Sprint (S, Fortune 500) remains the only national carrier that offers new customers an unlimited data plan.

    The idea behind Verizon's change in strategy, Shammo said, is to increase the company's revenue at a time when the cell phone market is already saturated with customers and voice minutes are dropping, sending average revenue per smartphone user down $10 over the past two years.

    As attracting new customers grows more difficult, finding new ways to increase revenue from the customers Verizon already has is becoming the company's top priority.

    Though Verizon's lowest, 2 gigabyte-per-month tier currently costs $30 -- the same price as its legacy unlimited offering --- the company knows that data usage is increasing, particularly as 4G-LTE networks make possible huge HD video downloads and machine-to-machine communications.

    As customers increase their data usage on their devices, the company thinks they'll move to higher and pricier tiers.

    Or, in CFO-ese: "With the construct that we have dealt with around data share and where we see consumption of LTE going, when you put the combination of them together, we are fairly confident that we will see people start to uptake in the tiers, which is really where we will get the revenue accretion in the future."

    That's how Shammo put it in his JP Morgan talk. Translation: You're going to suck down more data and pay Verizon more for that privilege.

    Dragging existing unlimited customers away from their unlimited data plans isn't the only way Verizon is upping its take. The company recently imposed a $30 "upgrade fee" on customers, which Shammo said has been a success.

    "We are really not seeing any impact from a customer base from that fee, so that was the right thing to do," he said. 

    The Truth About the U.S. Housing Market

    Last week, the United States Case-Shiller 20-Cities Composite House Price Index took an unexpected plunge, falling 1.3% in October from a month earlier. Prices have now fallen by around one-third:

    [Click all to enlarge]

    Month-over-month prices fell in all metro areas covered by the index. And in six markets -- Atlanta, Charlotte, Miami, Portland, Seattle and Tampa -- house prices reached their lowest level since the housing bust began in 2006-07.

    The destruction of household wealth since 2007 has been shocking. According to the Federal Reserve, household net worth has declined $11 trillion from its peak in 2007. Relative to GDP, household net worth has fallen from around 470% in 2007 to around 375% currently. In fact, household net worth is currently near its long-run average level prior to the stock market and housing bubbles, as the following chart from Calculated Risk illustrates:

    Much of the destruction of household wealth is due to the decline in housing values. United States housing values as a percent of GDP have fallen considerably and are not far above historical levels. However, mortgage debt as a percent of GDP remains near historically high levels, suggesting more deleveraging ahead for households, as the following Calculated Risk chart shows:

    As bad as the situation has become, it appears that U.S. house prices have further to fall. A recent articleby the Dallas Federal Reserve ?shows that United States house prices are still 23% above their long-term mean, as this chart shows:

    The Dallas Fed's paper notes that the United States government has artificially supported house prices through: purchases of Fannie Mae (FNMA.OB) and Freddie Mac (FMCC.OB) government-sponsored entity bonds, which have eased mortgage rates; mortgage modification plans, which have deferred foreclosures; and tax credits, which boosted entry-level home sales.

    Whirlpool Rising: Reiterates Year EPS View

    Shares of Whirlpool (WHR) are up $1.43, or 2.4%, at $61.86 after the company’s management made a presentation this morning at a JP Morgan homebuilding and building products conference in New York that included a reiteration of this year’s profit outlook.

    Today’s deck of slides includes, on slide�18, a reference to $6.50 to $7 per share from “ongoing business operations” for all of 2012. That matches with the 2012 outlook the company offered on April 26th (see slide 23).

    The current non-GAAP EPS consensus is $6.42 per share, per FactSet.

    Friday, October 5, 2012

    MetroPCS: Perfect Products and Equity for Rational Consumers and Investors

    When one looks around at the economy, one finds a historically high level of unemployment and a myriad of other negative factors. In terms of portfolio theory, equities are generally in favor only when there is somewhat of a boom in the economy. The exceptions are the equities from companies which have low betas. Now and then, stocks with low betas don't have that beta based on any logic other than pure coincidence. Maybe a company did really well by accident while the market was down, so it could result in a low or even negative beta.

    That isn't the case with MetroPCS (PCS). It has a low beta, and deservingly so. When scanning the mobile phone market, one is hard pressed to find any company in the United States offering a cheaper plan than Metro. Metro charges $40 per month for unlimited talking, texting, and web browsing. So in other words, management at Metro has chosen to go after the low end market and become a low beta equity. And with the economy the way it is, who wouldn't call that a smart strategy and great management? So even stopping the analysis there, I feel it is the stongest mobile carrier equity.

    Furthermore, Metro hasn't just created the cheapest service and stuck users with the worst quality. In fact, Metro just released a major upgrade to its service by releasing 4G LTE technology. The speeds are set at about 3G speeds from other providers, but the system runs very efficiently how Metro has set it up, saving costs and allowing Metro to undercut the competition and continue to increase market share.

    Who can beat $40 per month for unlimited 3G speed and service? Nobody. Plain and simple. Metro has consistently sent a message to the market that it won't be underpriced. The only true competitor it has only has small pockets of service in the US (LEAP). Logically, LEAP has been the only mobile operator equity that has been able to keep up with PCS (see chart).

    The major complaint from most potential Metro users is that metro doesn't offer any Android phones. Well, recently, metro addressed that weakness and now offers several. Even without Android though, Metro phones offer absolutely everything anybody would ever need: phone, Internet, texting, navigator, touchscreen, email, instant messenger, decent camera, mp3 player, bluetooth, and quite a bit more.

    But the best yet really is still to come for metro. In the coming months, it is almost a certainty that several low cost (sub $200) 4G LTE Android phones will be released. These phones will provide the best value in the entire US.

    Think of it from a financial advisor's standpoint. If you have a client who just lost her job, or hasn't had one in three years, yet she spends $130 per month on her iPhone, what would you suggest to her? If you are worth your fees, you'd advise her to cut her expenses. And with Metro providing absolutely everything necessary to live in today's world for only $40 per month, it is without any doubt the number one choice in the mobile phone market for a sluggish economy.

    Valuation of the company is decent too, but over the last two days the company has fallen approximately 10% on news that its subscriber growth was below analysts' consensus, but growth really still was excellent, so now could be a good time to add shares on the pullback. The chart below shows the Christmas shopping season and includes dividends.

    click to enlarge

    It is a mistake to look at a company's numbers first then its products. You need to analyze the company's products, then its numbers. Get the macro view straight, then the micro view straight, then the books, and lastly, the actual trade you want.

    I actually own a Metro PCS phone, and have a long position in the equity as well because I believe in the company. It makes products that people like myself actually need, want, and that are affordable. I used to use VZ until I switched over to PCS and have found the service to be essentially identical. The only downside I've seen at all is there are a few very tiny dead zones here and there, but the Metro website coverage map is very, very accurate, so it can greatly help you determine if it is worth switching over for you. Why would anybody really want to spend $100 or more per month on a phone? Even millionaires should rationally not want to waste money on useless spending. My girlfriend recently switched her service over from T-Mobile over to Metro and has been pleased. My mother is soon going to cancel her land line from Comcast (CMCSA) and switch over to Metro as well.

    PCS has a price book of 1.88 and a price sales ratio of 1.20, which is very average for the industry, but an esimated earnings growth rate of 89% next quarter, and 215% the quarter after that, and 22% the quarter after that.


    Valuation-wise, the stock is priced average versus the industry, yet it has a much lower beta than the industry. This will not stay the case. Companies with low risk deserve higher than average valuation.

    If you are tired of owning stocks from companies with poor management which have no ability to find a market, and you need a tank in your portfolio with growth potential, yet which holds its ground in a down economy, you might need PCS in your portfolio. PCS was slightly overbought before the 10% correction the last two days, but it is now well priced again.

    Disclosure: I am long PCS.

    U.S. stock indexes stumble on Europe

    NEW YORK (MarketWatch) � U.S. stocks retreated Wednesday, wiping out the prior session�s rally, as bond yields in Spain and Italy surged and polls out of Greece added to the uncertainty over whether it would remain in the euro zone.

    Click to Play ECB opposes Spain's banks plan

    European Central Bank officials signal they would oppose any attempt to fund the $23.8 billion recapitalization of Spain's Bankia via the central bank's facilities. Brian Blackstone explains.

    �If Greece ends up leaving the European Union and the debt crisis remains reasonably well contained, then world growth will continue at a modest pace. But if that contagion becomes chaotic, then all bets are off,� said Mark Martiak, senior wealth strategist at Premier/First Allied Securities.

    The Dow Jones Industrial Average DJIA �dropped 160.83 points, or 1.3%, to 12,419.86, with all but one of its 30 components in the red. On Tuesday, it had gained nearly 126 points in a broad surge fueled by hopes for Greece and more global stimulus.

    The S&P 500 Index SPX �on Wednesday shed 19.10 points, or 1.4%, to end at 1,313.32, with energy and financial firms hardest hit among its 10 sectors. All sectors ended lower.

    The Nasdaq Composite Index COMP �declined 33.63 points, or 1.2%, to 2,837.36.

    For the month that ends Thursday, the benchmark indexes are down at least 6%.

    For every stock rising, roughly six fell on the New York Stock Exchange, where 768 million shares traded. NYSE composite volume was 3.5 billion, while volume of Nasdaq-listed shares was 1.7 billion.

    Gold gained, with the futures contract for August delivery GCQ2 �rising $14.70 to end at $1,565.70 an ounce. Oil �tumbled $2.94 to finish at $87.82 a barrel. Read more on oil futures and gold futures.

    Reuters The bourse in Madrid.

    Spain�s 10-year bond yields ES:10YR_ESP �hit a six-month high and closed 22 basis points higher, at 6.7%, as Spanish authorities discussed how they would pay for the $23.6 billion bailout of lender Bankia S.A. ES:BKIA , and new data showed private deposits fled Spanish banks in April. Read more on spike in Spanish debt yields

    Italy�s borrowing costs rose as the government sold debt but fell short of its target. Read more on Italian bonds.

    As stocks in Europe tumbled, the European Commission called for direct aid for troubled euro-zone banks. Read more on European Commission.

    The latest poll from Greece had the leftist Syriza party taking the lead against the pro-bailout conservatives ahead of a parliamentary election June 17 that could determine if the nation remains in the euro zone.

    Bloomberg News reported that a survey found most Greek voters want to revise the terms of the nation�s financial rescue.

    �There�s a Greek myth about a guy named Sisyphus who was compelled to roll a rock up a hill, only to see it roll back down over and over again, and it seems like that�s what we have here,� said Robert Pavlik, chief market strategist at Banyan Partners in New York, of the European debt crisis.

    �Even if Greece stays in the euro and Spain can somehow recapitalize its banks, they are still in an austerity-plagued environment with low or negative growth, and that�s going to impact the rest of the world,� he added.

    In the United States, the 10-year Treasury yield 10_YEAR fell to a record low of 1.62%. Read more on bonds.

    The National Association of Realtors reported its index of pending home sales in April unexpectedly declined, offsetting recent data that inspired hopes that housing had hit a bottom.

    Citigroup Lost in Fourth Quarter and Full Year

    Citigroup reported a fourth quarter net loss, after repayments of TARP bailout funding, of $7.6 billion versus a loss of $17.26 billion a year earlier. Citigroup also reported a $1.6 billion full-year net loss for 2009 versus the 2008 full-year loss of $28.7 billion. Much of the quarterly and full-year losses are blamed on the repayment of TARP funding that helped keep banks afloat during the financial crisis.

    Citigroup is still reeling from the impact of the financial crisis. Since fall 2008, the bank has been actively divesting businesses. In 2009, the big bank spun off its Smith Barney brokerage division to Morgan Stanley. Timing of TARP repayments remains an issue as banks have repaid the bailout funding in order to be eligible to give employees big bonuses for 2009.

    The full news release with financials is available here.

    Comments? Please send them to Kate McBride is editor in chief of Wealth Manager and a member of The Committee for the Fiduciary Standard.

    Thursday, October 4, 2012

    The Case For Pair Trading In This Market.

    For our loyal readers and members you will know how we feel about pair trading in highly volatile markets without a real trend in place.  We wanted to publish an older article that we feel is necessary for anyone who is not hedged or pairing during the last couple months.  Since September 1st our members have enjoyed +30% gains, which +12.75% have been derived from pair trades.  This is vs. The S&P 500 +3.48% gain for the same time period.  Pair trading maybe not be exciting for those of you who are day trading because your are neutralizing beta.  However, when you have a the S&P move 50 to 100 points in 5 trading days you have to be insane to have 100% directional exposure.   The following article was written back on August 5th on Forbes  �Are we heading into another Bear Market? � Relieve your Anxiety; Focus on out-performance via �Pair Trading�. is launching it�s automated platform; which will help you determine buy/sell levels, pattern recognition and much more.  Get 1 month Free.

    We want to take a look at trades we have recommended and if you held today since we wrote the article on the trade idea.   As you can see all financials have been lumped together during the trade duration and no outperformance.  If you want to get long

    Electricity and Water: Scarcity Will Drive Prices Upwards

    Today we're going to talk about utilities, if for no other reason than because I got my son the board game Monopoly for Christmas. I remembered playing the game when younger, and thought it was about time that he learned the value of money. Thinking back, I recall those two utilities in the game, the "Electric Company" and "Water Works", neither which truly excited me as investments. There were only two of them, set far apart on the board from each other so that it was unlikely someone would land on either of them. Besides which, the rates were never set, as they were dependent on the dice roll. That said, right now may be a good time to invest in utilities, as fate may have just turned up a pair of sixes.

    There are two types of utilities, the ones that deal with energy and the ones that deal with water. Both energy and water are becoming increasingly scarce commodities internationally. As scarcity drives up prices for both, those companies that either deliver or provide these vital commodities will be sitting in a lucrative position. Just like oil companies back in 2007-2008.

    Utilities drive other businesses. Energy is necessary for every modern industry. Water is essential to life, and to agriculture. Even during recessions, utilities do well.

    Energy Providers

    A year ago, Adam Feinberg wrote on this blog about the probability that increased investment in energy utilities will see IT companies flourish as they provide electrical utilities with infrastructure to make them more efficient. We are seeing this happening, and we are also seeing an ever increasing investment in green technology as it relates to all utilities.

    I note, however, a recent post by Jim Cramer of CNBC, in which he mentions Emerson Electric (NYSE: EMR). It should be noted as well, that Emerson's CEO is remarkably cynical about the US government's stimulus activity during the downturn, and that Emerson is looking internationally for growth rather than in the US. That means that with half its business international, Emerson will do all right even if the US economy remains sluggish.

    Another company to look for is FPL Group (NYSE: FPL), which gets over half its energy from renewable sources. Two others to watch are Exelon Corp (NYSE: EXC) and Entergy Corp (NYSE: ETR), the top two producers of nuclear energy. Odds are nuclear will factor into any carbon lowering agenda.

    Look too at smart grids, which will save consumers from 10-30% on their monthly bills and other such technology that controls electrical consumption. Prices of energy will have to increase significantly, however, according to studies of consumers and their likelihood of using the system.

    Water Suppliers

    Living at the tip of Africa, I recognize the importance of water. Just to the east of us, a drought has made water so scarce that reservoirs are drying up. Salt desalinization plants are being built along South Africa's Garden Route in response to the lack of water that is bringing communities there to their knees. Here in Cape Town, in some of the poorer areas, households are limited as to how much water they can have. Whether this is due to climate change does not really matter, though this may be a precursor of it. Water utilities will have to start using ever more drastic measures to ensure that people conserve.

    Water utilities are in a good position. According to William S Brennan:

    In a low growth environment... water utilities bought at the proper valuation metrics, provide just that opportunity. A basket of high yield water utilities such as American Water (NASDAQ: AWK), American States (NYSE: AWR), Cascal (NYSE: HOO), United Utilities (OTC: UUGRY) and certain Hydro electric companies such as CEMIG (NYSE: CIG) should be considered by investors that are in search of sustainable yield and stable growth.

    All in all it will be those energy and water utilities that seek to cut carbon emissions, conserve finite energy and water resources, and aggressively pursue renewable energy that will be in the best position, as governments seek green energy alternatives and deal with issues of scarcity. Consumers too will hop on the wagon if energy or water prices rise significantly.

    StatOil Is A Trifecta Of Value, Income And Growth Potential

    StatOil (STO) is a fully integrated oil and gas company headquartered in Norway. It is the world's 13th largest oil and gas company by market capitalization. It is producing oil in eleven countries and has retail operations in eight. Key metrics courtesy of Yahoo Finance as of 1/9/2012:

    Statoil ASA (NYSE: STO)

    Real Time 25.85 0.06 (0.23%) 10:05AM EST

    Last Trade: 25.83
    Trade Time: 9:51AM EST
    Change: 0.04 (0.16%)
    Prev Close: 25.79
    Open: 25.94
    Bid: 25.82 x 700
    Ask: 25.83 x 800
    1y Target Est: 26.88
    Day's Range: 25.82 - 25.94
    52wk Range: 20.12 - 29.67
    Volume: 160,569
    Avg Vol (3m): 2,326,350
    Market Cap: 82.19B
    P/E (ttm): 7.88
    EPS (ttm): 3.28
    Div & Yield: 0.94 (3.60%)

    StatOil is a leading supplier of natural gas to the European continent. Long-term this will be a growth story as natural gas transportation takes off in Europe due to the cost and environmental advantages over imported oil. StatOil had the best exploration results of any oil company in 2011. Key discoveries include:

    • On the NCS the company made the largest oil discovery in the world last year – Aldous. The company estimates between 900 million and 1.5 billion barrels of recoverable oil.
    • The giant Skrugard discovery in the Barents Sea estimated to hold 400-600 million barrels of recoverable oil with much upside potential to that estimate. The company is projecting a 95,000 BOE/day capacity.

    Strategic Acquisition of Brigham Exploration Statoil tendered all Brigham Exploration (BEXP) shares for $36.50, a price so low ($4.4 billion) some BEXP shareholders cried foul. Too bad - done deal. The transaction will provide Statoil with more than 375,000 net acres in the Williston Basin, which holds potential for oil production from the Bakken and Three Forks formations. Brigham also holds interests in 40,000 net acres in other areas. At this early stage of development, the risked resource base is estimated at 300-500 million barrels of oil equivalent (boe), equity. At the time of the takeover announcement, BEXP was producing over 21,000 boe per day. StatOil's new acreage has potential to ramp up to 60,000-100,000 boe per day over a five year period. At the time of the announcement, BEXP was producing over 20,000 BOE/day. This was a major strategic and financial coup by STO. It must have left Conoco-Phillips (COP), Occidental Petroleum (OXY), Chevron (CVX) and Exxon (XOM) feeling like jilted wall flowers. One must wonder how long these major oil companies will ignore a company like Whiting Petroleum (WLL) . Will they allow StatOil to add this gem to its portfoilio as well?

    Great News from the GOM

    Under a settlement with the U.S. government, announced Friday, Exxon Mobil and Statoil will get to keep their leases in the Julia deepwater field—which Exxon estimates could hold one billion barrels of recoverable oil. it agreed to build and install an offshore platform and begin producing oil by the middle of 2016. This is one of the largest discoveries in the GOM, and the government had attempted to revoke XOM's lease. XOM subsequently sued, and the settlement was good news for StatOil, which holds a 50% interest in the field. I have just hit the highlights here. There is much more good news on StatOil with even more discoveries already in 2012. Before investing, do some of your own research and be sure to learn about StatOil's important operations in Brazil and Angola. StatOil has announced plans to grow production from 1.9 million BOE/day to 2.5 million BOE/day by 2020. The company has a wonderfully diversified group of assets: the NCS, the Bakken, Eagle Ford, Marcellus, the GOM, Brazil, and Angola. It offers a great dividend (once a year) that has averaged close to 5% the last few years. It is has a PE under 8. The company has long sold at a discount to its peers for two reasons: 1) concern that the NCS was played out (reserve replacement) 2) the large stake held by the Norwegian government.

    While I will agree with reason #2, the stock is still selling at a discount despite long-life massive reserve discoveries on the NCS which disprove reason #1. Also, from an income perspective, StatOil has a history of generous payouts. If you believe, as I do, that worldwide supply/demand fundamentals combined with geo-political risks and the U.S.'s inability to embrace natural gas transportation will lead to continued upward pressure on oil prices, what better way to protect your net worth than to invest in the value, income and growth potential of superbly managed company like StatOil? StatOil could easily trade up to $30 in 2012, and approach its historic high of $40 in 2013. Any spike in oil prices due to geo-political events would cause me to raise those targets. And yes, the European situation is already baked into my estimates. Of course, all bets are off if there is a systemic break-down in global finance. As usual, please do your own research before investing. Good luck!

    Disclaimer: I am not a professional money manager. I merely express my opinions and analysis. Please conduct your own stock research. Include other sources and opinions before investing in any stock mentioned in this article.

    Disclosure: I am long STO, WLL, COP.

    NIRS Releases Retirement Conference Report

    The National Institute for Retirement Security released Monday, August 30, a conference report outlining policy solutions to improve retirement security. The conference, which was held for the first time in February 2010, addressed ways to improve Americans' retirement prospects.

    Among the solutions suggested by conference speakers were to strengthen and encourage traditional pensions; improve defined-contribution plans; and build new opportuni-ties for individual retirement savings.

    Defined-Benefit Plans

    Speakers agreed that traditional pensions were a boon to employees, according to the report, but that a strict regulatory environment made it difficult for plan sponsors to continue offering defined-benefit plans.

    One solution was to offer employers pension funding relief that wouldn't relieve them of the burden of fully-funding pension commitments, but would extend the timeframe they have to do so.

    Individual Retirement Savings

    David John, a senior research fellow for conservative think tank The Heritage Foundation, explained incremental changes to defined-contribution plans are easier to implement than reworking the entire retirement system.

    Speakers called for improved access to lifetime income streams, automatic enrollment and escalation, fee disclosure, and financial education, as well as addressing the "leakage of retirement savings." Defined-benefit plans address several of these challenges, according to the report, and as defined-contribution plans become more popular, defined-benefit-like features do, as well.


    Roger Ferguson, CEO of TIAA-CREF, called for a "holistic" retirement system that would share risks between defined-benefit plans, which place more risk on employers, and defined-contribution plans, which place more risk on participants. He recommended a system that would incorporate "the inclusivity and lifetime income stream characteristics of DB plans, but also the portability and employee contri-bution aspects prevalent in the DC system," according to the report.

    Automatic IRAs were suggested as a simple way to increase retirement participation without placing an undue burden on employers. The Heritage Foundation's David John noted that an employment-based IRA funded with workers' payroll deductions already had bipartisan support.

    Gregory Dean, minority counsel for the U.S. Senate Committee on Health, Education, Labor and Pensions, cautioned that mandatory retirement provisions should be simple for employers and participants alike. Debra Whitman, staff director for the U.S. Senate Special Committee on Aging, warned that auto IRAs would increase coverage, but called for plan design that would ensure low fees, efficient use of markets, and security for workers' funds.

    The full report is available online at

    Ralph Lauren: Analyst Excited About Growth in Asia and Europe

    Ralph Lauren (RL) plans to grow rapidly in Europe and Asia, an expansion that should prove very profitable, writes Cowen & Company analyst John Kernan in a note upgrading the shares to Outperform from Neutral. More than 60% of Ralph Lauren’s growth will likely come from those two regions, Kernan writes.

    “We expect $500 million in capex alone for international door growth and e-commerce development during the next three years as RL significantly increases its penetration overseas in higher margin and higher returning regions.”

    Kernan also thinks the retailer should benefit from a sharp decline in cotton prices, which are down 50% from their peak in March.

    3 Winning Investment Strategies Used by Fund Managers

    Just as some European countries combine capitalism and socialism -- called the third way -- investors would do well to find a new strategy that combines long-term and short-term trading strategies.

    This year has been marked by big stock-market moves -- in both directions, sometimes on a daily basis. Last week alone, the Dow Jones Industrial Average moved almost 200 points each day in both directions. Watching the ups and downs has been an emotional roller-coaster ride for investors. Unfortunately, the craziness isn't going to end any time soon, with the European credit crisis far from being over, a sputtering U.S. economy, and emerging markets that are slowing.

    See if (F) is in our portfolio

    It's a challenging time to invest when company fundamentals are ignored. If the standard buy-and-hold strategy isn't working, and the shorter-term risk-on/risk-off far too risky, what type of strategy would?The answer is one that addresses long-term needs by managing short-term unpredictability. Like most rewarding things in life, it's not an easy strategy. It involves actively managing your portfolio and keeping on a steady course even when there's bad news all around.Most, not all, money managers TheStreet spoke with are cautiously optimistic about 2012. Even though the U.S. economy is grinding along, it isn't getting worse. Still, professional investors are being selective on bets in the market.The UBS Investment Research team says "the greatest opportunities are between groups of stocks that have been mispriced by recent gyrations. Companies with high foreign sales and more volatile names appear undervalued."Among attractive companies are those at historically low values hurt by events such as worries over Europe but with consistent avenues of growth. Cisco Systems(CSCO) is a good example, trading at only 11 times its earnings estimates. Shares of the company, which reports quarterly earnings this week, are down 10% this year, even as revenue has risen for the past four quarters.Along the same line, money managers prefer to invest in stocks with what is known as an accidental yield. That occurs when the stock price declines enough to produce a higher-than-normal dividend yield (annual dividend divided by the stock price). A decent dividend yield is considered to be 3% to 5%, a much better return than what you get investing in U.S. Treasuries. Household-cleaning-products company Clorox(CLX), which has a stable business model, currently has about a 3.5% dividend yield.

    1 2 Next › Last »

    Over the past three years, dividend-paying stocks have outperformed the S&P 500 by 15 percentage points.

    For most of this year, defensive stocks have led the market. But over the past month, cyclical names took charge. UBS expects the outperformance by this group to continue, saying: "The energy and material sectors are most sensitive to shifts in the economy and markets. Additionally, we continue to see opportunities in tech, industrials and financials."

    So far this earnings season, the materials sector has reported the largest revenue surprise. On top of that, it's also the cheapest sector. Industrials have also reported solid third-quarter earnings, with strong sales to agriculture, mining and car companies. Additionally, many companies, such as Ford(F) and DuPont(DD), are reporting accelerating growth in U.S. sales as international sales slow. Those cyclical sectors will be among the first to emerge from a global recession, representing a great investment opportunity.All told, corporate fundamentals are starting to show signs of improvement, with around 70% of the S&P 500 beating third-quarter earnings estimates. Employing some of the strategies listed above may mean better-than-average returns when the world economy rebounds. Nevertheless, stock investing is still far better than leaving your cash in a savings account.

    >To order reprints of this article, click here: Reprints « First ‹ Previous 1 2

    AT&T Blames Alcatel Software Glitch For Slow Data Connections

    AT&T (T) says a software glitch in some network equipment supplied by Alcatel-Lucent (ALU) is responsible for slowing the wireless connection speeds of some customers on iPhones and other devices.

    The Wall Street Journal notes that the companies say the problem affects less than 2% of AT&T wireless customers, or about 1.75 million people. Alcatel is reportedly working on a fix.

    The telco says the issues affects some customers in certain markets who use “Laptop Connect” wireless cards, as well as owners of some smart phones, including the Apple (AAPL) iPhone 4. The company did not say which markets are affected by the issue.

    Gold Mining Index To Double Over The Next Couple Of Years?

    The behaviour of gold stocks during this gold bull market is really not that different to the gold bull market of the 70s. It was not until almost the end of the bull market (in 1979) that the gold stocks really started to take-off. Those who think gold stocks will not rise during this bull market will be disappointed, and need to consider the evidence presented here.

    Below, is a long term chart for the Barron’s Gold Mining Index (BGMI):


    On the chart, I have highlighted two fractals (or patterns), marked 1 to 6, which appea?r similar. What makes these two fractals so special is the similarity of the circumstances in which they exist.

    Both patterns started where the Dow/Gold ratio peaked, as well as where the gold bull markets started.

    There was a significant peak in the Dow (1973 and 2007) between point 1 and 2 of both fractals. Both peaks in the Dow came about 7 years after the peak in the Dow/Gold ratio. After point 2, on both fractals, the oil price made a significant peak (1974 and 2008), about 8 years after the peak in the Dow/Gold ratio.

    Based on the fractals on the chart, we could still have more than two years before we could get a top in the BGMI, like we had at the end of 1980. That is more than 14 years after the Dow/Gold ratio top (beginning of 1966 to the end of 1980 vs the end of 1999 to some time in 2014).

    If you compare the two patterns, then it seems we are currently just past point 6, which is similar to the beginning of 1979. The correction since the beginning of 2011 is in the closing stages, and price should advance significantly over the next couple of years. If the patterns continue their similarity, then we should expect the BGMI to reach levels more than double its current peak.

    *Post courtesy of Hubert Moolman, a gold and silver analyst, specializing in fractal analysis as well as the fundamentals of gold silver. He offers a newsletter service, which provides research to investors from various countries, including: USA, UK, Europe, India and Australia. His work is regularly published on the established precious metals sites. 

     You can read more at and reach him at


    RIM CEO Sees ‘BB10′ Licensing Possible, Says Bloomberg

    Following intense speculation of late about the possibility of Research in Motion (RIMM) doing deals to broaden the prospects for its “BB10” update to its BlackBerry handhelds, Bloomberg’s Hugo Miller this afternoon reports that RIM’s CEO Thorsten Heins said in an interview today that the company can, if it chooses to, license BB10 to other manufacturers, without his actually committing the company to do so.

    Samsung Electronics (005930KS) has been mentioned repeatedly as a possible licensee of BB10, or even an acquirer of RIM, as the company tries to make a comeback amidst assaults from both Samsung and Apple (AAPL),�though today’s article does not include any remarks by Heins about Samsung.

    RIM shares today fell 22 cents, or 2.7%, to $8.07.

    Health Care REIT Adds to Sunrise Deal

    Health Care REIT Inc., which last month said it would acquire Sunrise Senior Living Inc., said Tuesday, Sept. 18, it and its merger partner were buying out certain Sunrise joint ventures in deals valued at $710 million.

    Toledo, Ohio-based Health Care REIT on Aug. 22 announced plans to buy Sunrise for $1.9 billion in cash and assumed debt in a deal that would position it as one of the world's largest owners of senior housing facilities. The company said at the time that it would likely exercise options held by McLean, Va.-based Sunrise to acquire 100% ownership of certain joint venture properties.

    Health Care REIT said Tuesday that since the deal announcement, the companies have acquired or agreed to acquire majority interests in 38 of Sunrise's 105 joint venture properties. Including assumed debt, the follow-on deals have increased the value of real estate to be acquired by 68%, to $3.2 billion.

    See if (HCN) is in our portfolio

    The company said it had closed the acquisition of five of the 38 properties for $243 million. Those properties are in the United Kingdom and are managed by Sunrise but purchased from a partnership between Sunrise and an institutional investor. The remaining 33 majority interests will be acquired by Sunrise using proceeds from a $467 million loan to be provided by Health Care REIT.Company chairman and CEO George L. Chapman in a statement said, "We are extremely pleased with our initial success in reaching agreements to purchase additional Sunrise joint venture partner interests.""The ability to transform what was initially announced as a $1.9 billion real estate opportunity into a $3.2 billion transaction upon closing accelerates our portfolio quality enhancement initiatives including increasing the private pay component of our portfolio and its concentration in east and west coast markets and top 31 MSAs," Chapman said.Health Care REIT has been an aggressive acquirer. Since the beginning of 2011, it has announced deals to buy Benchmark Senior Living LLC for $890 million, Silverado Senior Living Inc. for $298 million and the real estate assets of Genesis HealthCare Corp. for $2.4 billion.The company also plans to offer 22 million shares of its common stock with an underwriter option to buy an additional 3.3 million shares. Proceeds from the offering run by Bank of America Merrill Lynch, JPMorgan and Morgan Stanley would be used to repay outstanding indebtedness and for general corporate purposes, including investing in additional properties.

    >To order reprints of this article, click here: Reprints FREE from Real Money's Jim Cramer: Winners and Losers Election 2012 - Steps to take NOW so you can profit no matter who is in charge! Get your FREE download now.

    AAPL: iCloud As Big As iTunes, Says Barclays

    In case you missed it, Barclays Capital’s Ben Reitzes late yesterday published a note making the case that “iCloud,” Apple‘s (AAPL) hosted data service for its computers and iOS-based devices, is the biggest thing for the company since the introduction of iTunes.

    Reitzes mentions 2003, though I’d note that iTunes was unveiled at Apple’s Macworld presentation in January of 2001. I think he’s in this case referring not to the software program for ripped music, but rather the online shop that followed it.

    Reitzes, who has an Overweight rating on Apple shares and a $555 price target, writes that “A truly reliable cloud service that frees customers from wires should foster more customer loyalty and convenience, in our view,” and that CEO Tim Cook “gets it” when he says iCloud is “profound.”

    “It basically makes the cloud the digital hub — not the Mac or the PC,” continues Reitzes. “Furthermore, iCloud lays the groundwork,in our opinion, for a foray not only into TVs, but devices we haven’t thought of yet.”

    Apple shares today are up $6.48, or 1.6%, at $406.21.

    Italy Downgrade, Time Warner Split?: The Water Cooler

    Here's your quick fix of company, market, economic and investing news for Tuesday, Sept. 20, including the downgrade of Italy's credit rating by Standard & Poor's.

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    The Big Story

    See if (TWX) is traded within the Action Alerts PLUS portfolio by Cramer and Link

    Was this really a surprise? Credit ratings agency Standard & Poor's downgraded Italy's debt to A from A+. S&P cites the obvious: weak economic growth and government dysfunction. S&P also said it's not a believer in the country's austerity program. [Financial Times]The most shocking part of the downgrade announcement is that S&P blamed Italy's austerity measures for hurting its economic growth. [Business Insider]Italy's Prime Minister Silvio Berlusconi blames the media for the downgrade, apparently forgetting that he owns the media. [Adnkronos]Quote of the Day"I think you're going to see them draw on the lessons of our crisis, draw on the lessons of things that worked here in the United States," said U.S. Treasury Secretary Timothy Geithner. And that worked out incredibly well for the U.S., didn't it? [Bloomberg]Company NewsStat of the day: Citigroup(C) sent 346 million card offers to North American customers, more than one for every person in the U.S. [WSJ]One shareholder pleads with Yahoo!(YHOO) to consider a proposal to create three tracking stocks. [MarketWatch]Time Warner(TWX) should take a page out of Netflix's(NFLX) Qwickster playbook and consider spinning off some of its cable networks, the Wall Street Journal reported in its Heard on the Street column. [WSJ]MarketsWhen China doesn't even want to do business with you, it's bad, right? Well, Bank of China has reportedly halted foreign exchange swaps with some European banks. [Reuters]Consumer discretionary stocks continue to lead the market, even as the world falls apart. [All Star Charts]More money has been pulled from U.S. equity funds in the past four months ($75 billion) than in the five months after Lehman Brothers' collapse in 2008 ($72.8 billion). [Bloomberg]Investment StrategySkip TIPS and zero percent real return strategies and go after mega-cap dividend paying stocks. [iShares Blog]Using S&P 500 seasonality to determine whether to be bullish or bearish through the end of the year. [Bespoke Investment]Shorting the euro is a trade "not even a dummy can pass." [MarketWatch]Odds and EndsGeorge Soros hires Scott Bessent as new chief investment officer of his hedge fund, even as it returns money to investors. [New York Times DealBook]Perhaps Netflix(NFLX) should have checked all digital avenues, including Twitter, before unveiling Qwickster to the masses. [BBC]My excuse to my wife for playing more Call of Duty: online gamers figured out an AIDS enzyme puzzle that baffled scientists for a decade. [Yahoo!].>To follow Robert Holmes on Twitter, go to>To submit a news tip, send an email to:

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    Wednesday, October 3, 2012

    Caterpillar Still Has Room To Run After Early 2012 Rally

    Caterpillar, Inc. (CAT) trades at about $110 a share after a 22 percent pop thus far in 2012. Is this stock washed out, or is it just getting into high gear? Let's analyze this bellwether equity to see if there's additional upside.

    We will review some fundamentals benchmarks, the current charts, recent news, and project a reasonable valuation.

    Business Brief

    Caterpillar is the world's leading manufacturer of construction and mining equipment. The company was founded in 1925 and is headquartered in Peoria, Illinois. In July 2011, CAT completed the acquisition of Bucyrus International, a leading mining equipment manufacturer.

    Fundamental Highlights and Analysis

    Caterpillar shareholders have enjoyed solid return fundamentals of late. I like to check return metrics, EPS growth, and margins to screen company performance.

    Management has lead the company to register a TTM 38 percent return-on-equity and a 6 percent return-on-assets. The RoE figure is far ahead of their industrial peers. A 13.5 percent return-on-capital-employed (ROCE) buttresses the ongoing efficient use of capital.

    Earnings per share has risen dramatically over the past several years. EPS has rallied from $2.09 in 2009 to $7.40 in 2011. Management announced midpoint guidance of $9.25 a share in 2012. Meanwhile, revenues have nearly doubled in this period. Sales of $32 million in 2009 have ballooned to $60 million last year. Revenues of $70 million are projected for this year.

    Using recently released figures, the gross margins ex-Bucyrus eased from 28.7 percent in 2012 to 28.1 percent last year. However, net margins have increased over the same YoY period.

    Behind the numbers is a management team that has demonstrated the discipline to get cash to the bottom line. During the previous business up-cycle in the mid 2000s, Caterpillar management was not as fixated upon this. Margins deteriorated as the business ramped up. Of late, the company has beat the Street in ten of the last twelve quarters. Indeed, management has provided strong guidance forecasts throughout. Despite the economic and political turmoil, Caterpillar management has not wavered. They continue to remain bullish on future prospects for the company.

    Recently, Caterpillar CEO Ed Rapp offered his opinion that Caterpillar is only two years into what is typically a six or seven year cycle. Furthermore, "tail winds" from eventual North American and European economic recoveries will propel the business in the out years.

    Caterpillar booked a record order backlog of almost $30 million heading into 2012, putting an exclamation point on the narrative.

    Technical Charts and Review

    CAT shares have offered technicians a solid chart for some time now. I do see a few trends that indicate the stock may tire in the near-term. The 3-year weekly RSI is looking a little frothy, while the Slow Stochastic is in overbought territory.

    On the flip side, the 50-day moving average just crossed the 200-day MA for the "golden cross." Chartists may see a reverse "head and shoulders" pattern that unfolded over the second half of 2011 blossom into a powerful January 2012 uptrend. I now see the stock sitting at a $111.50 resistance level. A breakout above that could take the stock up to $115 a share: the all-time high.

    Trading volume has been good over the last several months.

    Valuation Targets -- Yes, there's More Upside

    My basic valuation methodology is straightforward. I project future EPS, then apply what I believe is the appropriate multiple using history and my experience as direction.

    Caterpillar management has projected a 2012 EPS midpoint of $9.25 per share. Given their recent track record of beating expectations consistently, this is a good starting point. For the record, the Street consensus is a bit higher; about $9.38 a share. I suggest using the management benchmark affords a margin of safety; recall they have beat the street ten times in the last three years.

    Reviewing historic Caterpillar P/Es during previous up-cycles, I apply a multiple between 13X (low end) and 15X (high end). These bookends will be largely contingent upon the strength of the overall market, the economy, and of course the company's ability to meet the Street.

    Note to reader: The TTM P/E is 15X. The 2012 EPS P/E is 12X. The five-year average multiple is 18X earnings.

    As an adjunct, I'm also heartened by a current Price/Cash Flow multiple of 9.6. Anything below 10 is good. This is another confirmation that cash is getting to the bottom line. A safe dividend of $1.44 a share provides a little extra juice to this stock.

    Going through the math, my 2012 target range is $120 to $139 a share. That's enough to keep me in the game. Assuming we are still relatively early in the global business up-cycle, this CAT may have a lot more room to run. Each quarter, I re-evaluate everything via the conference calls, financial statements, and 10-Q reports.

    While not a trader, I do acknowledge that the stock has run up fast and hard of late. It would not surprise me to see a pullback on any market weakness. Selling some March $120 call options on part of a position or placing a limit order to sell a few shares around that mark (with the intent to buy them back upon retracement) is a reasonable strategy.

    In any case, I believe this company has plenty of gas left in the tank.

    Disclosure: I am long CAT.

    Goldman Sued Over Kinder Morgan, El Paso Deal: Report

    Goldman Sachs(GS) is being sued by a pension fund over its allegedly "conflicted" role in Kinder Morgan's(KMI) $21 billion takeover of El Paso(EP), Bloomberg News reported.

    Goldman was advising El Paso on a possible spinoff of its exploration and production unit to shareholders.In August, Kinder Morgan, in which Goldman owns a 20% stake, approached El Paso to discuss a possible takeover, derailing the plan for spinoff. Morgan Stanley(MS) acted as El Paso's adviser to the deal. Still, Goldman continued to act as financial adviser on "related matters" in connection with the transaction, which "tainted the process," according to the complaint filed by the lawyers for Louisiana Municipal Police Employees Retirement System. "The El Paso board impermissibly heeded the advice of its conflicted financial adviser Goldman Sachs and abandoned a previously announced spinoff of its exploration and production business in favor of a low premium sale to competitor Kinder Morgan," the complaint said, according to the report. The complaint accuses Goldman of aiding and abetting a breach of fiduciary duty by El Paso directors, according to the report. In addition to seeking unspecified damages, the suit is asking the judge to order the directors to explore other alternatives for the company.A Goldman Sachs spokesperson would not comment on the lawsuit to Bloomberg, but said that Goldman had recused itself from the deal process.>To follow the writer on Twitter, go to>To submit a news tip, send an email to: >To order reprints of this article, click here: Reprints

    GOOG, AMZN Favorites In Bernstein’s Internet Initiation

    Sanford Bernstein’s Carlos Kirjner, formerly of the Federal Communications Commission, today kicked off coverage of Internet stocks, placing Outperform ratings on (AMZN) and Google (GOOG), and Market Perform ratings on eBay (EBAY), Netflix (NFLX), and Yahoo! (YHOO).

    Kirjner’s theme in this 109-page opus is the “transformation of retail, media, and payments,” by which he means the constant specter of “creative destruction” that hangs over the Internet.

    Kirjner prefers Amazon and Google as two companies with “sustainable competitive advantages and strong growth potential.”

    Google’s keyword search business is likely to grow faster than people realize, and for a longer period of time than they appreciate, Kirjner writes. He assigns the stock a $743 price target, and he’s estimating 2011 EPS of $30.66 and 2012 EPS of $41.06, which is lower than the consensus $36.86 for this year but ahead of next year’s $43.86 non-GAAP consensus.

    Amazon is going to grow faster than overall e-commerce because it has things such as “Prime,” its membership benefits program that includes free shipping, its digital media strategy with the Kindle, and its Amazon Web Services cloud computing offering. Kirjner is modeling net sales of $50.1 billion this year and $67.2 billion next year, and EPS of $2.69 per share in 2012. Analysts have been modeling $48.73 billion in revenue this year, $64.78 billion next year, and EPS of $2.07 a share. Kirjner’s price target is $271.

    People are over-estimating the U.S. market opportunity for Netflix, as the number of homes “penetrated” by the service that are “addressable” by the service is higher than people think. The domestic market is saturated, in other words. The expansion of Netflix’s streaming operations to Latin America is limited by “low income and poor infrastructure” in that market. Competition in Europe, and the prospect of “capped” broadband usage could limit expansion in that geography, he thinks. Kirjner has a $79 price target on NFLX.

    Yahoo’s stock is currently enjoying a buyout premium that puts the stock at about fair value, in his view. The Asian asssets (Ablibaba, Yahoo! Japan) are worth perhaps $12 a share, while the “core business” is worth $8 a share. Although Yahoo! may beat consensus revenue and earnings estimates next year, it won’t do so by enough of a margin to justify buying the stock, he thinks.

    Lastly, Kirjner maintains eBay at a $37 price target. Growth is likely to fall below that of e-commerce overall, and especially trail that of Amazon. The shift of eBay’s gross merchandise value to large sellers is reducing eBay’s take rate, he writes. On the other hand, PayPal‘s payment volume will continue to grow faster than e-commerce, though a revamped “Google Checkout” may dampen PayPal’s take rate.

    Top Stocks For 4/5/2012-7

    National Health Partners, Inc (NHPR)

    As a nation, the Amercians face enormous challenges on the healthcare front. Their country is the home to the most advanced medical expertise on the planet, yet many of them have little or no access to affordable health care. While their healthcare system has helped more and more Americans to live longer and healthier lives, the medical needs of a growing elderly population mean they must discover new and better ways to help our system deliver the kinds and levels of care that are needed.

    National Health Partners, Inc. is a national healthcare savings organization that provides discount healthcare membership programs to uninsured and underinsured people through a national healthcare savings network called “CARExpress.” CARExpress is one of the largest networks of hospitals, doctors, dentists, pharmacists and other healthcare providers in the country and is comprised of over 1,000,000 medical professionals that belong to such PPOs as CareMark and Aetna. The company’s primary target customer group is the 47 million Americans who have no health insurance of any kind. The company’s secondary target customer group includes the millions of Americans who lack complete health insurance coverage. The company is headquartered in Horsham, Pennsylvania.

    National Health Partners Inc recently announced the launch of a new network marketing program by one of its strategic partners, Xpress Healthcare, LLC. Xpress Healthcare has teamed up with CARExpress in an effort to revolutionize the discount healthcare industry while at the same time bringing financial freedom to families across the nation.
    By the end of the second quarter of 2011, Xpress Healthcare anticipates adding over 100 new brokers both participating in and promoting National Health Partners’ CARExpress program and should enroll over 2,500 new members.

    Xpress also expects its growth to accelerate in the 3rd quarter as it anticipates recruiting an additional 200 new brokers which should generate over 10,000 new CARExpress sales. According to National Health Partners, Offering tremendous growth potential, Xpress Healthcare is well positioned to become the leading marketing arm for its CARExpress and now Strong Sales are projected for 2nd Quarter from this new strategic partnership.

    For more information on the company, please visit its website at

    Crown Equity Holdings Inc., (CRWE)

    For many businesses and business owners, the big question is all about advertising and how to most effectively manage resources. There are quite a few options available to business owners today, so they have to be able to sift through what won’t work until they find something that will work. Today’s new age business owners are learning more and more about the power of the internet. They are seeing it as more than just an information portal. Instead, it is a place where people interact and because of that, it has become one giant online marketplace. One of the best new ways to reach people is through online advertising, which has quite a few advantages when done online.

    There are many advantages and disadvantages associated with advertising online. The first aspect of advantages is the World Wide Web opens up new communication possibilities for personalized messages to be delivered to targeted individuals. By positioning an advertisement on a website which relates to the target markets specific interests, interest and further speculation should occur. Advertising online enables target marketing, message tailoring, information access, sales potential, creativity, exposure and speed.

    Secondly, online advertising has the capability to reach a global audience at a fast rate. This enables extensive exposure and is an important characteristic of online advertising, and a major component of why online advertising is so successful.

    Crown Equity Holdings Inc., together with its digital network, currently provides electronic media services specializing in online publishing, which brings together targeted audiences and advertisers. Crown Equity Holdings Inc. offers internet media-driven advertising services, which covers and connects a range of marketing specialties, as well as search engine optimization for clients interested in online media awareness.

    Crown Equity Holdings Inc. recently announced that it has extended its CRWENEWSWIRE global platform web presence and is now publishing online news and information to the following countries: Argentina, Australia, Brazil, Canada, China, France, Germany, India, Ireland, Italy, Japan, Malaysia, Mexico, New Zealand, Russia, Singapore, South Africa, South Korea, Spain, Taiwan, United Arab Emirates and the United Kingdom, using their specific country code domain and native language.

    For more information, visit

    Unilife Corporation (Nasdaq:UNIS) announced it has commenced initial production of the Unifill� ready-to-fill (prefilled) syringe at its FDA-registered manufacturing facility in York, Pennsylvania. The initial production of the Unifill syringe, the world’s first prefilled syringe with safety features fully integrated within the glass barrel, will enable Unilife to further accelerate discussions with more than 20 pharmaceutical companies. These pharmaceutical companies are at various stages of review in the potential use of the Unifill syringe with a number of approved and pipeline injectable drugs and vaccines across more than a dozen therapeutic classes.

    Unilife Corporation, a medical device company, focuses on the design, development, manufacture, and supply of a proprietary range of retractable syringes in the United States and internationally.

    EZchip Semiconductor Ltd. (Nasdaq:EZCH) announced it has filed its annual report containing audited consolidated financial statements for the year ended December 31, 2010 with the U.S. Securities and Exchange Commission. The annual report is available on the EZchip website ( Shareholders may receive a hard copy of the annual report free of charge upon request. EZchip is a fabless semiconductor company that provides Ethernet network processors for networking equipment. EZchip provides its customers with solutions that scale from 1-Gigabit to 200-Gigabits per second with a common architecture and software across all products.

    EZchip Semiconductor Ltd., a fabless semiconductor company, through its subsidiary, EZchip Technologies Ltd., engages in the development and marketing of Ethernet network processors for networking equipment.

    United Fire & Casualty Company (Nasdaq:UFCS) announced that it has completed its acquisition of Mercer Insurance Group, Inc. (Nasdaq:MIGP). With this acquisition, initially announced on November 30, 2010, there is no overlap between the agency networks of United Fire and Mercer, as Mercer primarily markets in six Western and Mid-Atlantic states in which United Fire has no appointed property and casualty agencies. United Fire will now market through over 1,000 independent agencies, diversifying exposure to weather and other catastrophe risks across our geographic markets. Also with the completion of the acquisition, the combined company will be able to build on common conservative underwriting and investment cultures.

    United Fire & Casualty Company, together with its subsidiaries, engages in writing property, casualty, and life insurance; and selling annuities in the United States.