Saturday, March 16, 2013

Dow Sets New High, S&P 500 Closes On Record

The Dow Jones Industrial Average rose 42.47 points, or 0.3%, Wednesday to close at 14,296.24, a new record. The Dow is up 1.72% in the past four days, and has risen 9.1% in 2013.

The Standard & Poor’s 500 index gained 0.11% to close at 1,541.46, its highest close since Oct. 31, 2007. The index is now just 1.5% off its record close of 1,565.15, hit on Oct. 9, 2007. There many stocks in the S&P 500 that aren’t in the Dow, of course, but one can’t help but notice that only one of the two indexes features Apple (AAPL) and its 20% year-to-date decline.

The small-cap Russell 2000 index rose 0.28% today, to close at 929.96, the second highest level in its history behind the record 932 hit on Feb. 19. The index is up 9.49% this year.



Top Stocks For 3/7/2013-19

Crown Equity Holdings Inc. (OTCBB:CRWE) announced recently that its sales this year have already surpassed $1,000,000. This compares to $232,510 for the three quarters ending September 30, 2009 and $ 659,907 total sales for the year 2009.

“Based on our sales to date, we had more than 4 times the sales for the same period last year and are 34% ahead of last year’s total sales,” commented Kenneth Bosket, President and CEO of Crown Equity Holdings Inc. “Our growth in sales along with our investments in infrastructure and people give the company a basis for supporting future growth of the magnitude we have seen so far this year,” stated Bosket.

Crown Equity Holdings Inc. has expanded its internet footprint internationally to include the following countries: Argentina, Australia, Brazil, Canada, China, France, Germany, Hong Kong, India, Ireland, Italy, Japan, Korea, Mexico, New Zealand, Singapore, Spain, Taiwan and the UK.

EQ Labs, Inc. (Pink Sheets:EQLB) reported recently that poker superstar and celebrity spokesperson Vanessa Rousso appeared with Company CEO Mo Owens on the Las Vegas affiliate of ABC television (KTNV – Channel 13) promoting EQ Labs effervescent energy tablet.

On June 24, 2010, the company announced that Vanessa Rousso had signed an endorsement contract with EQ Labs. Ms. Rousso is a member of the prestigious Team PokerStars. In addition, she signed an endorsement contract as a celebrity spokesperson for Go Daddy in 2009. Ms. Rousso also appeared in the Sports Illustrated Swimsuit Issue.

EQ Labs is engaged in the development, marketing and sale of EQ (�The Smart Energy Drink�). EQ is an effervescent tablet that can be dissolved in any beverage to provide instant energy. Consisting of a blend of essential vitamins, Gingko Biloba, and less caffeine than a cup of coffee. EQ is currently sold at Best Buy, 7-Eleven, Walgreens and other leading retailers.

Oracle (NASDAQ: ORCL) reports that Mark V. Hurd has joined Oracle as President and has been named to Oracle�s Board of Directors. Mr. Hurd will report to Oracle CEO Larry Ellison.

�Mark did a brilliant job at HP and I expect he�ll do even better at Oracle,� said Oracle CEO Larry Ellison. �There is no executive in the IT world with more relevant experience than Mark. Oracle�s future is engineering complete and integrated hardware and software systems for the enterprise. Mark pioneered the integration of hardware with software when Teradata was a part of NCR.�

�Mark is an outstanding executive and a proven winner,� said Oracle President Safra Catz. �I look forward to working with him for years to come. As Oracle continues to grow we need people experienced in operating a $100 billion business.�

�I believe Oracle�s strategy of combining software with hardware will enable Oracle to beat IBM in both enterprise servers and storage,� said Mark Hurd. �Exadata is just the beginning. We have some exciting new systems we are going to announce later this month at Oracle OpenWorld. I�m excited to be a part of the most innovative technology team in the IT industry.�

NOTE: HP has filed a lawsuit to stop Mr. Hurd from becoming President of Oracle.

Is Tidewater Going to Burn You?

There's no foolproof way to know the future for Tidewater (NYSE: TDW  ) or any other company. However, certain clues may help you see potential stumbles before they happen -- and before your stock craters as a result.

A cloudy crystal ball
In this series, we use accounts receivable and days sales outstanding to judge a company's current health and future prospects. It's an important step in separating the pretenders from the market's best stocks. Alone, AR -- the amount of money owed the company -- and DSO -- the number of days' worth of sales owed to the company -- don't tell you much. However, by considering the trends in AR and DSO, you can sometimes get a window onto the future.

Sometimes, problems with AR or DSO simply indicate a change in the business (like an acquisition), or lax collections. However, AR that grows more quickly than revenue, or ballooning DSO, can, at times, suggest a desperate company that's trying to boost sales by giving its customers overly generous payment terms. Alternately, it can indicate that the company sprinted to book a load of sales at the end of the quarter, like used-car dealers on the 29th of the month. (Sometimes, companies do both.)

Why might an upstanding firm like Tidewater do this? For the same reason any other company might: to make the numbers. Investors don't like revenue shortfalls, and employees don't like reporting them to their superiors.

Is Tidewater sending any potential warning signs? Take a look at the chart below, which plots revenue growth against AR growth, and DSO:

Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. FQ = fiscal quarter.

The standard way to calculate DSO uses average accounts receivable. I prefer to look at end-of-quarter receivables, but I've plotted both above.

Watching the trends
When that red line (AR growth) crosses above the green line (revenue growth), I know I need to consult the filings. Similarly, a spike in the blue bars indicates a trend worth worrying about. Tidewater's latest average DSO stands at 103.3 days, and the end-of-quarter figure is 107.6 days. Differences in business models can generate variations in DSO, and business needs can require occasional fluctuations, but all things being equal, I like to see this figure stay steady. So, let's get back to our original question: Based on DSO and sales, does Tidewater look like it might miss its numbers in the next quarter or two?

The raw numbers suggest potential trouble ahead. For the last fully reported fiscal quarter, Tidewater's year-over-year revenue grew 13.7%, and its AR grew 26.1%. That's a yellow flag. End-of-quarter DSO increased 10.9% over the prior-year quarter. It was up 9.5% versus the prior quarter. That demands a good explanation. Still, I'm no fortuneteller, and these are just numbers. Investors putting their money on the line always need to dig into the filings for the root causes and draw their own conclusions.

Is Tidewater the right energy stock for you? Read about a handful of timely, profit-producing plays on expensive crude in "3 Stocks for $100 Oil." Click here for instant access to this free report.

  • Add Tidewater to My Watchlist.

Automotive Milestones and Financial Meltdowns

On this day in economic and financial history ...

JPMorgan Chase (NYSE: JPM  ) made an offer to acquire freefalling Bear Stearns for just $2 per share on March 16, 2008. The Sunday deal, a 93% discount to Bear Stearns' closing price of two days earlier, was put forth after an earlier bridge-loan agreement between the two banks and the Federal Reserve fell through. It was one of the watershed moments in the 2008 financial crisis, a signal that the problems plaguing the financial sector were both deeper and more systemic than previously believed. The minuscule offer price, at just $236 million in total, was a third of Bear Stearns' 1985 offer price, and a tiny sliver of the $170 shares fetched in March of 2007. The Fed, rather than offering loans to prop up Bear Stearns, provided financing to help JPMorgan close the transaction and promised up to $30 billion in funding to prop up Bear Stearns' "less-liquid assets."

Bear Stearns shareholders and employees were furious with the backroom deal, which all but wiped them out. Fierce protests pushed JPMorgan CEO Jamie Dimon to raise the offer to $10 per share �less than two weeks later, in an effort to stem mass defections of key talent and avoid an outright shareholder revolt. This offer pushed Bear Stearns' shares above the offer price to $11.25, but it proved immaterial when the $10-per-share sale price was approved at the end of May. Bear Stearns' tortured saga was over, but the financial crisis had yet to enter high gear.

Might as well call it a day
On the other side of the coin from the wild crisis days is the dullness of March 16, 1830, the slowest day in New York Stock Exchange (NYSE: NYX  ) history. That day, a mere 31 shares exchanged hands -- 26 shares of the United States Bank and five shares of Morris Canal and Banking, at a total value of just $3,470. That was low even by 1830s standards, as the first years of that decade typically saw at least 1,000 shares traded on a given day. Maybe stockbrokers would have been better off going fishing.

Up, up and away!
Robert Goddard inaugurated the age of modern rocketry when he launched the first liquid-fueled rocket into the sky over Auburn, Mass., on March 16, 1926. Like other first flights, Goddard's first rocket wasn't especially impressive by modern standards. The liquid oxygen and gasoline-fueled rocket rose 40 feet in the air over 2.5 seconds, traveling 185 feet across the earth before crashing.

Goddard continued to experiment with rocketry until his death in 1945, amassing more than 200 rocket-related patents in the process. His work helped lay the foundation of the Apollo program, which sent men to the moon and produced many technological advances that continue to benefit humanity today.

The auto industry represents
General Motors (NYSE: GM  ) joined the Dow Jones Industrial Average (DJINDICES: ^DJI  ) for the first time on March 16, 1915. It became the first automaker ever to join the prestigious index at a time when there were only 12 components, and no other component produced a consumer-focused finished product. The automaker's addition was an early indicator of the automaker bubble that would begin two years later, which produced incredible gains for GM and other automakers that had successfully adopted Ford's (NYSE: F  ) assembly-line innovations for their own production.

Unfortunately, GM wouldn't help buoy the Dow during this boom time -- it was replaced on the index by Studebaker less than two years later. GM would return to the Dow for an extended stay in 1925, at which point it was one of three automakers (but the only consumer automaker, as the other two built industrial machines) on a 20-component index.

Two massive auto milestones
GM and Ford both experienced notable production milestones on March 16. GM built its 100 millionth car, an Oldsmobile Toronado, on March 16, 1966. The Toronado was a well-regarded car that won Motor Trend's Car of the Year, and it was also the first front-wheel-drive production car in the United States in nearly three decades. Eight years earlier, on March 16, 1958, Ford announced the production of its 50 millionth automobile, a Thunderbird. The milestone car was to be painted green in honor of St. Patrick's Day, and it was donated to the American Cancer Society for a fundraising raffle.

Ford has been performing incredibly well as a company over the past few years -- it's making good vehicles, is consistently profitable, recently reinstated its dividend, and has done a remarkable job paying down its debt. The stock has recently taken off, and it appears that investors have begun to notice what Ford is doing right. Does this create an incredible buying opportunity, or are there hidden risks with the stock that investors need to know about? For in-depth analysis on whether Ford is a buy right now, and why, you're invited to check out The Motley Fool's premium research report on the company, authored by one of our top equity analysts. Simply click here now to claim your copy today.

Bank Stocks to Watch

The following video is from Friday's Motley Fool Money roundtable discussion, in which host Chris Hill and analysts Charly Travers, James Early, and Jason Moser break down the week's biggest investing stories.

The Federal Reserve conducted its stress test of major banks this week. This year's round of tests had several surprises, including Citigroup's (NYSE: C  ) performance, and the fact that only one bank failed this year. Our analysts discuss which banks said they will be raising dividends after the stress test results, and what this means for investors in the big banks.

Citigroup's stock looks tantalizingly cheap. Yet the bank's balance sheet is still in need of more repair, and there's a considerable amount of uncertainty after a shocking management shakeup. Should investors be treading carefully, or jumping on an opportunity to buy? To help figure out whether Citigroup deserves a spot on your watchlist, read our premium research report on the bank today.�We'll fill you in on both reasons to buy and reasons to sell Citigroup, and what areas that Citigroup�investors need to watch going forward.�Click here now�for instant access to our best expert's take on Citigroup.

The relevant video segment can be found between 7:20 and 9:19.

Green Plains Renewable Energy Outruns Estimates Again

Green Plains Renewable Energy (Nasdaq: GPRE  ) reported earnings on Feb. 6. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Green Plains Renewable Energy beat expectations on revenues and crushed expectations on earnings per share.

Compared to the prior-year quarter, revenue dropped and GAAP earnings per share expanded significantly.

Gross margins dropped, operating margins dropped, net margins increased.

Revenue details
Green Plains Renewable Energy booked revenue of $883.7 million. The six analysts polled by S&P Capital IQ anticipated a top line of $806.5 million on the same basis. GAAP reported sales were the same as the prior-year quarter's.

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

EPS details
EPS came in at $0.94. The five earnings estimates compiled by S&P Capital IQ forecast $0.10 per share. GAAP EPS of $0.94 for Q4 were 161% higher than the prior-year quarter's $0.36 per share.

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

Margin details
For the quarter, gross margin was 4.7%, 90 basis points worse than the prior-year quarter. Operating margin was 2.4%, 110 basis points worse than the prior-year quarter. Net margin was 3.7%, 230 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $712.5 million. On the bottom line, the average EPS estimate is -$0.03.

Next year's average estimate for revenue is $3.00 billion. The average EPS estimate is $0.51.

Investor sentiment
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 83 members out of 136 rating the stock outperform, and 53 members rating it underperform. Among 39 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 17 give Green Plains Renewable Energy a green thumbs-up, and 22 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Green Plains Renewable Energy is outperform, with an average price target of $9.00.

Is Green Plains Renewable Energy the right energy stock for you? Read about a handful of timely, profit-producing plays on expensive crude in "3 Stocks for $100 Oil." Click here for instant access to this free report.

  • Add Green Plains Renewable Energy to My Watchlist.

3 More FTSE 100 Dividends Lifted This Week

LONDON -- The FTSE 100 (FTSEINDICES: ^FTSE  ) rose another 0.18% today to close at 6,439 points after bouncing as high as 6,460 earlier in the day -- just a point short of the 52-week intraday high of 6,461 it set yesterday. The market has been strengthened by a series of upbeat company results this week, with a number of companies paying out bigger dividends.

Against the FTSE's average dividend yield of about 3%, here are some companies from the top tier that have all boosted their payouts this week.

Xstrata (LSE: XTA  )
Xstrata and Glencore (LSE: GLEN  ) , the two partners in the ongoing FTSE 100 megamerger, both released annual results on Tuesday -- and both raised their full-year dividends. Xstrata's dividend was boosted by 14% to $0.455 per share after the miner reported pre-exceptional earnings per share of $1.24. And Glencore, after revealing EPS of $0.44, announced a $0.1575 per-share dividend, up 5%.

Next year, of course, we should be seeing combined results and a combined dividend. The final steps in the merger have been delayed, but it should all be done and dusted by April 16. Xstrata shares are currently trading at 1,150 pence, with Glencore at 385 pence.

Legal & General (LSE: LGEN  )
Legal & General Group raised its annual dividend on Wednesday by 20% to 7.65 pence per share, up from 6.4 pence in 2011. That represents a yield of 4.7% at a share price of 164 pence -- and after fellow insurers RSA and Aviva cut their final dividends, Legal & General's is pretty much in line with the sector.

Chief executive Nigel Wilson said, "Our 20% increase in dividend is underpinned by 12% EPS growth and strong cash flow." Current forecasts suggest a further dividend rise of 7% to 8.2 pence per share for 2013.

Melrose (LSE: MRO  )
Final results from Melrose Industries on Wednesday allowed the manufacturing turnaround specialist to lift its full-year dividend by 2.7% to 7.6 pence per share. On today's 260 pence share price, that's a yield of 2.9%, which is perhaps not a payout that income investors would dream of, but the share price has quadrupled since early 2009.

Melrose, which buys up struggling companies and revamps them, has been growing its earnings and dividends for years, and forecasts suggest more of the same for 2013 and 2014.

Dividend rises like these three are always welcome, and companies that manage steady payouts form the cornerstones of many a portfolio. Whether you're investing for income or growth, good old cash is always welcome. And that's why I recommend the brand-new Fool report "The Motley Fool's Top Income Share For 2013," in which our top analysts identify a share they believe will provide handsome dividend income for years to come. But it will only be available for a limited period, so click here to get your copy today.

Top Stocks For 2/24/2013-10

Majestic Gold Corp. (TSX.V:MJS) (FSE:MJT) is pleased to announce the results of an updated resource estimate on its Song Jiagou Mine.

As part of the ongoing assessment on the Song Jiagou Mine, Wardrop Engineering Inc. (“Wardrop”) has revised their previous resource estimate (NR 23 April, 2010) as a result of the revision to the contract mining costs (NR 30 September 2010) which allowed cut-off grades to be reduced from 0.40 g/t to 0.30 g/t and warranted a revision of the block model.

Subsequent to the initial resource estimate, Wardrop determined that rotating the block model perpendicular to drilling direction was the most favorable orientation to evaluate the deposit and to calculate the revised resource. The new cut-off grade and the re-orientation of the model significantly increased the overall size of the resource and the contained ounces of gold in both the inferred and indicated categories.

The revised resource is:

Grade Au
Category Tonnes(i) (g/t)(ii) Contained oz Au
Indicated 33,739,586 1.147 1,244,211
Inferred 38,812,054 1.467 1,830,576
(i)Calculations conducted using 0.30 g/t cut-off
(ii)Gold grades were capped at 40 g/t

The most significant changes from the previous estimate are:

– Increase in Indicated tonnes by 35.34% to 33,739,586 tonnes
– Increase in Indicated contained gold by 24.09% to 1,244,211 ounces
– Increase in Inferred tonnes by 37.96% to 38,812,054 tonnes
– Increase in Inferred contained gold by 7.48% to 1,830,576 ounces

The increase in the size of the resource from 53 to 72.5 million tonnes will very significantly reduce the strip ratios to be used as Majestic continues its engineering studies on the Song Jiagou mine. Wardrop will move forward now to re-evaluate a production pit design.

For More Information On Majestic Gold:

SavWatt USA, Inc. (SAVW.PK), will attend the WEEC convention on December 8th and 9th, 2010. This annual Word Energy Engineering Congress convention will be held at the Washington DC convention center. This will be one of the most anticipated events of the year as SavWatt will unveil its highly anticipated Eco-Pole. The Eco-Pole will be on display at Booth #606. SavWatt’s Eco-Pole, a 60 watt LED light powered by a 100 watt micro-wind turbine and 120 watt solar panel, is expected to draw hundreds of people to the booth.

Michael Haug, SavWatt’s CEO, commented, “SavWatt will continue to add new features to its web site, the latest upgraded version has been given accolades for its user friendly features. Browsing through the updated site gives one the feeling that SavWatt is the BRAND for LED lights. For the novice to the expert in lighting the updated web site provides a thorough analysis on the features and benefits of SavWatt LED lights. SavWatt is proud to let public and private entities see what the costs and benefits of LED lighting products are, available from SavWatt. The time has come where there should be no mystery and secrets when it comes to LED lighting.”

SavWatt is leading the LED lighting revolution and setting the stage to obsolete the incandescent light bulb through the use of energy-efficient, environmentally friendly LED lighting. SavWatt is a market-leading innovator of LED lighting. SavWatt’s product families include LED fixtures, bulbs, Street Lights and Parking Lights.

Dice Holdings, Inc. (NYSE:DHX) announced that after ten consecutive months of private sector employment growth, half of employers and recruiters anticipate more professionals will be hired in the first half of 2011 than the previous six months, according to a new survey by Dice Holdings, Inc., a leading provider of specialized career websites for professional communities. This result closely mirrors findings six months ago which are being reflected in the general labor market – with private employers adding 132,000 jobs per month on average since July, as compared to just 98,000 new positions per month in the first half of 2010, according to the Bureau of Labor Statistics.

Dice Holdings, Inc., through its subsidiaries, provides online recruiting and career development services in the United States and internationally. The company, through its career Web sites, serves as online marketplaces, where employers and recruiters find and recruit prospective employees, and professionals find relevant job opportunities and information. Its career Websites offer job postings, content, career development, and recruiting services to the specific needs of the professional community.

Cobalt International Energy, Inc. (NYSE:CIE) announced that a subsidiary of Ensco plc has sub-let the ENSCO 8503, a new ultra-deepwater semisubmersible drilling rig currently under contract to Cobalt. The ENSCO 8503 was recently mobilized to the U.S. Gulf of Mexico, and is scheduled to begin sea trials shortly. Under the sub-let agreement, once rig acceptance procedures have been completed in the U.S. Gulf of Mexico, the ENSCO 8503 will mobilize to offshore French Guiana to commence drilling operations for a subsidiary of Tullow Oil plc on behalf of itself and its coventurers in the license (Shell, Total, and Northpet Investments). Acceptance procedures will be witnessed jointly by Cobalt and Tullow.

Cobalt International Energy, Inc. operates as an independent oil-focused exploration and production company. The company focuses on the deepwater U.S. Gulf of Mexico, and offshore Angola and Gabon in West Africa. It has strategic relationships with TOTAL E&P USA, INC. and Sociedade Nacional de Combust�veis de Angola�Empresa P�blica. The company was founded in 2005 and is based in Houston, Texas.

Cohen & Steers Closed-End Oppor (NYSE:FOF) announced that capital gain distributions are projected in 2010 from one of its U.S. registered closed-end funds: Cohen & Steers Total Return Realty Fund, Inc. The projected capital gain distribution will be paid together with RFI�s regular quarterly dividend in December. Actual capital gain distributions will appear on shareholders� year-end tax forms, which will be mailed in early 2011. Shareholders should keep in mind that some broker-dealers may distribute information on fund capital gain distributions based on preliminary data and subsequently distribute revised reports after the fund calculates final distribution amounts for the 2010 tax year.

Cohen & Steers is a manager of portfolios specializing in U.S. and international real estate securities, large cap value stocks, listed infrastructure and utilities, and preferred securities. The company also manages alternative investment strategies such as hedged real estate securities portfolios and private real estate multimanager strategies for qualified investors

Why These Companies Are My Top 2 Investments

Since buying into Cheniere Energy (NYSEMKT: LNG  ) and Starbucks (NASDAQ: SBUX  ) , these two companies have grown into my top two holdings. My investment rationale behind these two companies was vastly different at the time I bought shares, but one thing I saw that they held in common was that the future of their business models was very bright and lacking in serious competition.

Looking at Starbucks, I really liked the worldwide brand name and its ability to continue growing under CEO Howard Schutlz. The recent expansion into China and India bodes very well for the company, and are prospects that allayed my concerns that Starbucks was trading at a relatively high price-to-earnings multiple. With this company, we could be looking at its U.S. growth all over again but in�two new markets.

Cheniere Energy immediately piqued my interest given its first-mover advantage with its approval to export liquefied natural gas to nations who are not members of the Free Trade Agreement. To this day, it is the only company of its kind. With 18 million proposed tons per year of�liquefied natural gas capacity already spoken for, and an additional nine million awaiting approval, the company's gains are locked in for the long term. What's more, Cheniere's Corpus Christi, Texas, facility is awaiting approval. The potential of the company's position in the liquefied natural gas market supports my purchase despite the company's lack of income at the moment.�

Do these two companies fit your investing profile?
You might be better off taking a look at what our co-founder Tom Gardner is holding; he also recently revealed�his top two stocks. For the names of that surprising pair of companies,�just click here.

What to Expect from Renren

Renren (NYSE: RENN  ) is expected to report Q4 earnings on March 11. Here's what Wall Street wants to see:

The 10-second takeaway
Comparing the upcoming quarter to the prior-year quarter, average analyst estimates predict Renren's revenues will grow 41.5% and EPS will remain in the red.

The average estimate for revenue is $46.4 million. On the bottom line, the average EPS estimate is -$0.06.

Revenue details
Last quarter, Renren notched revenue of $50.4 million. GAAP reported sales were 47% higher than the prior-year quarter's $34.2 million.

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

EPS details
Last quarter, non-GAAP EPS came in at -$0.03. GAAP EPS were -$0.04 for Q3 compared to $0.00 per share for the prior-year quarter.

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

Recent performance
For the preceding quarter, gross margin was 61.4%, much worse than the prior-year quarter. Operating margin was -41.0%, much worse than the prior-year quarter. Net margin was -30.6%, much worse than the prior-year quarter.

Looking ahead

The full year's average estimate for revenue is $173.9 million. The average EPS estimate is -$0.19.

Investor sentiment
The stock has a one-star rating (out of five) at Motley Fool CAPS, with 181 members out of 241 rating the stock outperform, and 60 members rating it underperform. Among 41 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 18 give Renren a green thumbs-up, and 23 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Renren is hold, with an average price target of $4.40.

Internet software and services are being consumed in radically different ways, on new and increasingly mobile devices. Is Renren on the right side of the revolution? Check out the changing landscape and meet the company that Motley Fool analysts expect to lead "The Next Trillion-dollar Revolution." Click here for instant access to this free report.

  • Add Renren to My Watchlist.

In Canada, the Phaseout of the Penny Begins

TORONTO (AP) -- Canada has begun phasing out its penny, whose production costs have come to exceed its monetary value.

The Royal Canadian Mint on Monday officially ended its distribution of one-cent coins to financial institutions.

While people may still use pennies, the government has issued guidelines urging store owners to start rounding prices to the nearest nickel for cash transactions. Electronic purchases will still be billed to the nearest cent.

New Zealand, Australia, the Netherlands, Norway, Finland, Sweden, and others have also dropped the penny.

Google is marking the passing of the penny with a dedicated doodle on its Canadian home page.

Friday, March 15, 2013

Why Did the Fed Deny BB&T?

Results from the annual CCAR round of banking stress tests were released last night, which are the results upon which the Fed makes decisions about whether or not to allow banks to initiate new capital allocation programs, such as dividend increases or share repurchases.

In this video, Motley Fool financials analysts Matt Koppenheffer and David Hanson discuss one bank whose request for more capital allocation came back painfully denied:�BB&T (NYSE: BBT  ) . David tells investors why this rejection happened despite a strong performance in last week's Dodd-Frank round of stress tests, why it isn't necessarily related to the amount of capital the company has on hand at the moment, and why increased dividends and share buybacks may still be on the way for BB&T investors after all.�

With big finance firms still trading at deep discounts to their historic norms, investors everywhere are wondering if this is the new normal, or whether finance stocks are a screaming buy today. The answer depends on the company, so to help you figure out whether BB&T should be on you radar, I invite you to read our premium research report on the company today. We'll fill you in on both reasons to buy and reasons to sell BB&T, and what areas BB&T investors need to watch going forward.�Click here now for instant access!

Proof That Ben Bernanke Loves Bank of America

At long last, it seems as if shareholders in Bank of America (NYSE: BAC  ) finally have a tangible reason to celebrate. After the market closed on Thursday, the Federal Reserve announced the results of this year's comprehensive capital analysis and review, or CCAR, giving B of A and others permission to increase the amount of capital they returning to shareholders over the next four quarters. In B of A's case, that means using $5 billion for share buybacks and an additional $5.5 billion to redeem all of the outstanding shares of two of the company's preferred stock.

Making it even sweeter was the fact that two of the Charlotte-based bank's fiercest competitors were put on notice about the adequacy of their capital planning processes, and two additional banks had their capital plans outright rejected. With respect to the former, while the Fed was careful to point out that it did not object to the capital plans of Goldman Sachs (NYSE: GS  ) and JPMorgan Chase (NYSE: JPM  ) , it is nevertheless requiring them to submit new plans by the end of the third quarter in order to remedy the aforementioned inadequacy. By all indications, meanwhile, B of A seems to have sailed through the process.

What about the dividend?
Of course, the biggest question is why didn't B of A increase its dividend like so many analysts, me included, had expected it to? Last October, I stated that "all of the evidence suggests to me that B of A will be in a position to increase its dividend at the beginning of next year after submitting its capital plan to regulators." In the middle of December, noted banking analyst Meredith Whitney said basically the same thing, predicting that the bank could as much as quadruple its payout. And in an article I wrote earlier this week, a reader commented that: "I think everyone will be shocked if B of A doesn't get at least a $0.03/share dividend.... [T]he real question will be how soon it can go higher."

The answer to this question is threefold. First, it obviously appears as if CEO Brian Moynihan sees more value in buybacks than he does in dividends right now. This is probably because B of A's shares trade at a 10% discount to tangible book value compared to, say, Wells Fargo (NYSE: WFC  ) , which trades for a 60% premium over tangible book, or JPMorgan, which trades for a 27% premium.

Second, Moynihan is clearly preparing the bank for the heightened capital requirements that are coming down the pike. In explaining his capital strategy to Fortune's Shawn Tully back in 2011, Moynihan divided the then-future into two main periods. During the first period, lasting for two years, he said that B of A would retain "virtually all of its earnings to build the funds necessary to comply with the new Basel III [capital standards]." B of A has now accomplished this, sporting the highest Basel III tier 1 common capital ratio of the four too-big-to-fail banks -- as a side note, the following chart shows the progression of its Basel I tier 1 common capital ratio through last week's stress tests and the CCAR process.

Source: Comprehensive Capital Analysis and Review 2013: Assessment Framework and Results.

And last but not least, during the second stage of Moynihan's strategy, he said that the bank plans on returning "all earnings to investors in dividends or share buybacks." The normally reticent CEO was particularly keen to note that, "We need to get back most of the shares we issued in the crisis that caused all the dilution." What he's referring to here is the fact that between the end of 2007 and now, the bank's outstanding share count increased by a factor of 2.5.

Moynihan's decision to use buybacks as opposed to dividend aside, however, it's important to note the magnitude and likely impact of the permission. There are a few different ways to put this into context. If the $5 billion buyback were instead committed to dividends, for instance, that would equate to a roughly $0.50 per share each year in payouts, including the current $0.04 that it pays out now. At Thursday's closing price of $12.11 per share, that translates into a not insignificant 4.1% yield. And speaking just in terms of buybacks, at that same price, the $5 billion program would allow B of A to repurchase 3.82% of its outstanding stock. In addition, the $5.5 billion committed to redeeming preferred shares will save the bank upwards of $470 million a year in payments thereon.

At the end of the day, in turn, while some shareholders may be disappointed with B of A's decision to forgo a dividend increase in lieu of a repurchase program, the performance of the bank's shares in after-hours trading last night should help cushion the blow. Unlike Goldman Sachs and JPMorgan, both of which are seeing their shares fall, B of A's shot up by more than 4% at certain points. Consequently, at least for the time being, the powers that be are clearly content with the move.

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AAPL: Samsung S4 ‘Major Issue,’ Says Barclays; ‘Shell Game,’ Says Topeka

The Street today is debating the implications of Samsung Electronics‘s (005930KS) unveiling last night in New York of its next flagship smartphone model, the Galaxy S4, which received warm reviews for features such as its brilliant display and 13-megapixel camera, but which has analysts divided over who serious a threat it may pose to Apple’s (AAPL) iPhone business.

Apple shares today are up $8.31, or 2%, at $440.80 in a down market, helped perhaps by a vigorous endorsement of the stock this morning by Legg Mason‘s Bill Miller on CNBC.

Barclays Capital‘s Ben Reitzes, who has an Overweight rating on Apple shares and a $530 price target,�was at last night’s event at Radio City Music Hall, and he writes today that “In terms of competition vs. Apple, the GS4 seems largely as expected � and there could be some relief for Apple (certain versions of LTE won�t be available until later this year).”

“However,” he adds, “as we stated recently in a recent report � we believe that Samsung�s momentum is a major issue for Apple”:

As a result, we need to see Apple expand its iPhone market this year in a big way � and improve its platform. However, Apple seems rather silent of late � and could be waiting until C3Q to make any competitive response outside of potential adjustments to pricing. We believe Apple is currently making moves that include international expansion, new iPhones and eventually a bigger screened phone in 2014. In mid 2013 we expect the company to introduce both a lower cost (but high quality) iPhone 5 with a plastic case as well as an �iPhone 5S�. Even before that launch, we could see further international expansion for the iPhone. Later this summer, we expect the lower end iPhone to be available globally but be more popular in emerging markets. This product should be priced in the mid tier range � likely at the higher end of the $250-$350 price band. If Apple is to rebound in terms of share, we believe that advances to the ecosystem will be the reason � with potential innovations around payments.

Brian White of Topeka Capital Markets, who has a Buy rating on Apple shars and an $888 price target, writes that “we view the Galaxy S 4 as a refresh but NOT a game changer.”

“We believe the iPhone 5S will handily outsell Samsung’s new flagship smartphone in the second-half of the year, while we believe Apple will expand its world with a lower-priced iPhone in 2013.”

Samsung is engaging in something of a “shell game,” thinks White:

One of the strong points of the Galaxy S 4 is the Full HD Super AMOLED display with 441 ppi, above the 326 ppi found on the iPhone 5 and the 400 ppi on the new LG (066570 KS- KRW79,800: NR) Optimus G Pro. However, the Galaxy S 4 is slightly below the 443 ppi five-inch smartphone introduced by Sharp (6753JP) in 4Q12 with IGZO technology and the 498 ppi display that was shown off at CES. Essentially, we expect competitors to unveil smartphones with a similar ppi this year and ultimately we believe Apple will adopt Sharp’s IGZO display technology [...] We consider the iPhone 5 a work of art and Apple’s ability to deliver a device that came with a larger screen (4-inch vs. 3.5-inch) versus the 4S but one that was 18% thinner and 20% lighter was a monumental task. By comparison, the Samsung Galaxy S 4 is 5 inches vs. 4.8 inches for the Galaxy S 3 but only 8% thinner and 2% lighter. At the same time, the iPhone 5 is 4% thinner than the Galaxy S 4 and 14% lighter. With the iPhone 5S expected to launch this summer, we believe Apple has the potential for even further improvements in this department. Also, polycarbonate (i.e., plastic) casing of the Galaxy S 4 is still no match for the aesthetics of the iPhone 5 with the aluminum unibody enclosure. Samsung’s Smartphone Shell Game Obfuscates Apple’s Share Growth. We are amazed by how analysts and the media have turned on Apple during the recent stock downdraft with statements that Samsung is “out-innovating” Apple. One would believe that Samsung is crushing Apple in the mobile phone market. We believe this is complete nonsense. We believe the smartphone market share comparison between Samsung and Apple is like comparing apples with oranges. When analyzing the mobile phone market in 4Q12 as reported by IDC, Samsung grew its mobile phone unit shipments by 12.3% YoY vs. 29.2% for Apple.

Facebook Just Dethroned Apple

While Apple (NASDAQ: AAPL  ) and Facebook (NASDAQ: FB  ) are partners in many ways and don't directly compete on any fronts, the social networker has just dethroned the Mac maker in an important way: CEO approval ratings.

Career site Glassdoor has just released its annual survey of employee approval ratings of major companies, and Facebook's Mark Zuckerberg has shot up to claim the No. 1 spot. Zuckerberg earned a whopping 99% approval rating among professional Facebookers. Apple's Tim Cook earned a 93% approval rating, down from 97% last year.

Other notable tech mentions in the 2013 rankings were Qualcomm's (NASDAQ: QCOM  ) Paul Jacobs and Google's (NASDAQ: GOOG  ) Larry Page, both of whom got thumbs up ratings from 95% of respondents. NVIDIA (NASDAQ: NVDA  ) CEO Jen-Hsun Huang wasn't far behind, with 94% of employees backing him.

CEO / Company

2012 Approval Rating

2012 Rank

2013 Approval Rating

2013 Rank

Mark Zuckerberg / Facebook





Paul Jacobs / Qualcomm





Larry Page / Google





Jen-Hsun Huang / NVIDIA





Tim Cook / Apple





Source: Glassdoor. N/A = not available because CEO did not rank in top 25 for 2012.

The rankings have tightened as employee approval ratings climbed. Even though Larry Page earned a higher rating in 2013, Google's overall ranking fell from No. 5 to No. 11 this year. The same is true for Paul Jacobs, since Qualcomm's ranking also fell even though the CEO kept the same approval rating.

Neither Facebook nor NVIDIA ranked within the top 25 last year, but now the CEOs of both companies have jumped to earn respectable 2013 rankings. NVIDIA has increased its competitive pressure on Qualcomm over the past year, and employees seem to support Huang's strategic advances. Tim Cook appears to be losing support from employees, even though investors should still believe in him.

Cook aside,�is Apple still a buy?�The Motley Fool's senior technology analyst and managing bureau chief, Eric Bleeker, is prepared to fill you in on both reasons to buy and reasons to sell Apple, and what opportunities are left for the company (and your portfolio) going forward. To get instant access to his latest thinking on Apple, simply click here now.

Opinion: Best of the Web Today: Barack Obama, Straight Shooter?

Just seven weeks after a massacre at an American elementary school, the White House released a photo of the president firing a gun. Strangely, no one seems to think this is in atrocious taste. We imagine the reaction would be quite different if it were, say, George W. Bush.

But a lot of people, including this columnist, doubt that the photo depicts what it purports to show. The White House distributed the pic in response to widespread skepticism of President Obama's assertion, in an interview with a liberal editor and a former campaign coordinator, that "up at Camp David, we do skeet shooting all the time." The man who infamously said that rural Pennsylvanians and Midwesterners "cling to guns" had never before publicly indicated any interest in shooting sports.

Enlarge Image

Close White House


The photo, purportedly shot last Aug.�4 (which happens to be the president's birthday), shows Obama holding a shotgun. The barrel is smoking, indicating that the gun has just been fired. What's odd about it is that the president is aiming straight ahead, as if he were firing a rifle at a stationary target.

But in skeet shooting, the target, a disk known as a clay pigeon, is moving. It is launched from one of two "houses" and travels in a parabolic trajectory across the field. In order to hit it, one has to move the gun so as to follow the path of the clay. It's not impossible that one would fire at shoulder level, as Obama is doing in the photo, but it's unlikely. We therefore surmise that the picture is the product of a photo shoot, not a skeet shoot.

Expressions of dubiety about the photo have prompted some weirdly intense reactions from Obama partisans. Our old pal John Avlon lashes out at "Republican conspiracy nuts" who are "partakers of the paranoid style in American politics" and have succumbed to "the unhinged, hate-fueled impulse" toward "disrespect and near-dehumanization of this president."

Dehumanization? The suspicion here is that when he claimed to be a skeet shooter, Obama was talking to Buncombe--that is, speaking insincerely for political purposes. Has Avlon had so little contact with Homo sapiens that he fails to recognize that is an all too human thing to do? Is he too naive to know it is a behavior characteristic of politicians?

The photo release has provided yet another occasion for journalists writing about firearms to display their basic ignorance about the subject. Here's a correction from the New York Times: "An earlier version of this article misstated the type of weapon that President Obama fired in a photo released Saturday by the White House. It was a shotgun, not a rifle." The BBC made the same mistake, which it corrected without acknowledging error.

Our favorite is this description of the photo from the Associated Press's Darlene Superville:

Obama is outdoors amid grass and trees with a rifle cocked in his left shoulder, his left index finger on the trigger and smoke coming from the barrel. He is wearing jeans, a dark blue, short-sleeved polo shirt, sunglasses and headphones.

As already noted, it's a shotgun, not a rifle, and the gun isn't cocked but has just been fired. In addition, the president isn't wearing headphones but hearing protection; earmuffs would also be an accurate term. And although the "sunglasses" are tinted, it would be more correct to describe them as safety glasses.

But let's give credit where due: Obama is indeed wearing jeans and a dark blue, short-sleeved shirt. Superville is probably correct in deducing that it is a polo shirt, even though the placket is obscured by the president's left forearm. She may have a future on the fashion beat.

In an episode of the 1960s sitcom "The Beverly Hillbillies," the title characters go skeet shooting at the invitation of a wealthy, sophisticated banker. Hilarity ensues when Jed Clampett insists on shooting with a rifle instead of a shotgun, and then makes the shot anyway. "To do it with a rifle is absolutely remarkable," says the man from the gun club. Clampett's young cousin Jethro then takes a crack at it and hits four targets in rapid succession. "Fantastic feat!" marvels the gun-club guy. (To which Jed replies, looking at Jethro's feet: "Yeah, they is big all right.")

The conceit of "The Beverly Hillbillies" was that the Clampetts were rubes, ignorant even of such obvious matters as the difference between a shotgun and a rifle. Today's journalists are a lot like the Clampetts, albeit without the impeccable aim.

Recycling Is Garbage So what did last week's confirmation hearings tell us about Defense Secretary-designate Chuck Hagel? Let's ask the editorialists at the New York Times. In a Jan.�8 editorial in praise of Hagel's nomination, they wrote:

On national security policy, there is much to like about Mr. Hagel, one of a fading breed of sensible moderate Republicans.

In a Feb.�1 editorial, after the hearings, they had a slightly different take:

There is much to like about the approach to national security policy taken by this decorated Vietnam veteran and former senator who is among a fading breed of sensible, moderate Republicans.

The Jan.�8 editorial also included this trenchant observation:

The opponents are worried that Mr. Hagel will not be sufficiently in lock step with the current Israeli government and cannot be counted on to go to war against Iran over its nuclear program if it comes to that.

And here's what they said after the hearing:

Mr. Hagel's opponents fret that he will not be sufficiently in lock step with the current Israeli government and cannot be counted on to go to war over Iran's nuclear program if it comes to that.

Not only do the Times's editorialists turn out boilerplate, but they don't even bother updating it to account for new facts. Anyone who marches "in lock step with the current Israeli government" will find himself in oblivion within the next few weeks. Israel held an election Jan.�22 and is in the process of forming a new government.

Somebody should let the Times know of its mistake by sending a form letter to the editor.

He Filed a Schedule SE. She Demanded a Schedule X. "An Oregon man has filed a lawsuit against an IRS agent with whom he had sex," the Associated Press reports from Eugene:

According to the suit, [defendant Dora] Abrahamson contacted [plaintiff William] Burroughs about an audit in August 2011. Abrahamson allegedly told Burroughs "she knew who he was, and that it was lucky for him that this was the case, and that they should meet."The agent subsequently flirted with Burroughs over the telephone and via text messages, offered him massages and sent him a photo of herself in her underwear, the lawsuit states.Burroughs initially ignored the woman's advances, according to the lawsuit, but he surrendered after a "provocatively attired" Abrahamson arrived at his home in September 2011, the lawsuit states."She told (Burroughs) that she could be a bitch, or that she could be nice," the suit states. "She said that she could impose no penalty, or a 40 percent penalty, and that if he would give her what she wanted, she would give him what he needed."Burroughs had sex with Abrahamson that day, the suit states.

We blame Chief Justice John Roberts. The permissive construction of the taxing power is getting out of hand.

War Paint "A week after women were cleared to serve in combat, Defense Intelligence Agency employees got a different message," according to U.S. News & World Report:

"Makeup makes you more attractive." "Don't be a plain Jane." "A sweater with a skirt is better than a sweater with slacks." "No flats." "Paint your nails." "Don't be afraid of color." And, "brunettes have more leeway with vibrant colors than blondes or redheads."Men and women at DIA were given fashion advice in a presentation prepared by an employee at the agency [last] week.�.�.�. The presentation offered gender-specific advice on how to improve one's success in the workplace through appearance.

The magazine reports that the presentation "raised eyebrows among some employees." Had they been paying attention, they'd have known to use a stencil.

Super Bowl XLVII: Brought to You by Solyndra "While the Baltimore Ravens and San Francisco 49ers compete to hoist the Vince Lombardi trophy this weekend, eco-friendly fans and city leaders in New Orleans are competing to maximize sustainability practices to the fullest," exults a U.S. Energy Department press release:

To make this the greenest Super Bowl, the New Orleans Host Committee has partnered with fans and the community to offset energy use across the major Super Bowl venues. The exterior of the Mercedes-Benz Superdome features more than 26,000 LED lights on 96 full-color graphic display panels, designed to wash the building in a spectrum of animated colors, patterns and images. The system draws only 10 kilowatts of electricity--equivalent to the amount of energy used by a small home--and the lights are expected to last for many years before needing replacement. Off the football field, New Orleans is embracing energy efficiency with help from the Energy Department. The city retrofitted four libraries using an integrative design approach--adding motion sensor lights, energy-efficient heating and cooling systems, and upgrades to the building envelopes. These improvements helped cut the libraries' energy costs by 30 percent and serve as a standard for other city-owned buildings. New Orleans streets feature more than 1,200 energy-efficient light fixtures. In addition to saving the city money on energy costs--an estimated $70,000 annually--the new lights help the city reduce routine maintenance due to their longer lifespan.Embracing energy efficiency and renewable energy is having a profound impact on attracting developers and private industry in the New Orleans' re-building efforts. The push to re-invent this destination city contributes to making Sunday's game the greenest in Super Bowl history.

For about 35 minutes, it was also the darkest.

Fox Butterfield, Is That You? "Chicken Wings Flying to No. 1 Super Bowl Snack Despite Rising Prices"--headline, WRDW-TV website (Augusta, Ga.), Feb.�3

We Blame George W. Bush

  • "Tripped Breaker Blamed for Super Bowl Power Outage"--headline, WDSU-TV website (New Orleans), Feb.�4
  • "Power Company Blames Superdome for Super Bowl Power Outage"--headline, Miami Herald, Feb.�4
  • "Officials Blame Super Bowl 2013 Blackout on 'Abnormality' in System"--headline, Times-Picayune (New Orleans), Feb.�4
  • "Beyonce Not the Cause of Super Bowl Blackout, NFL Says"--headline, Associated Press, Feb.�4

Too Late for the Super Bowl "With Brown Out, GOP Mulls Romney Energy"--headline, Boston Herald, Feb.�2

Just Ask Ray Lewis "Super Bowl Ads Best Capture Audience When Arresting Party's Entirety"--headline, Denver Post, Feb.�4

One Man's Terrier Is Another Man's Freedom Fido "Goodbye Barney: Thousands Mourn Bush's Terrier"--headline, Associated Press, Feb.�2

He Was for Tweeting Before He Was Against It

  • "#SecKerry will start tweeting from @StateDept. Tweets from him will have his initials -JK"--tweet, @StateDept, Feb.�4
  • "Just kidding. Used at the end of a sentence to make it completely void, therefore contributing nothing to the conversation and wasting everyone's time."--definition of "jk,"

Is There a Photo?

  • "Villaraigosa Takes Obama's Gun Control Reform One Step Further"--headline, KCBS-TV website (Los Angeles), Jan.�16
  • "LA Mayor Shoots Down Rumors of Cabinet Position"--headline, Associated Press, Feb.�2

Shortest Books Ever Written "Geraldo Rivera and Common Decency"--headline, Commentary website, Feb.�3

Another Failed Obama Initiative

  • "U.S. Proposes to Protect Wolverines"--headline, New York Times, Feb.�2
  • "Hoosiers Knock Off No. 1 Wolverines"--headline, Augusta (Ga.) Chronicle, Feb.�2

Do Women Know About Shrinkage? "With the economy teetering on a knife edge, it is clear that this is the worst moment to initiate an indiscriminate budget cut. Government spending at this time can spell the difference between growth and shrinkage."--editorial, New York Times, Feb.�4

Life Imitates the Onion

  • "NATO Admits Slovenia, Mummenschanz, Czech Republic"--headline, Onion, July�23, 1997
  • "Slovenia to Send Up to 4 Soldiers to Mali"--headline, Slovenian Press Agency, Feb.�1, 2013

We Guess They'll Get Their Money Back

  • "Hoover Institution director John Raisian and Policy Review editor Tod Lindberg announce that the February-March 2013 edition of Policy Review, Hoover's bimonthly journal, will be its last. The journal's online archive will remain available on the Hoover Institution website.", Feb.�1
  • "Texas Regents Order Policy Review"--headline, ESPN website, Feb.�4

We Recommend the Tikka Masala "Zucker Shakes Up CNN, Still Eyeing Curry"--headline, Accuracy in Media website, Feb.�1

Caveat Emptor

  • "Selling My Eggs to Make Rent"--headline,, Feb.�3
  • "Are Free-Range Eggs All They're Cracked Up to Be?"--headline, New Zealand Herald, Feb.�4

You've Gotta Admit, He's Got Game "NJ Man Shot Deer From Truck While Using Girlfriend as Gunrest: Authorities"--headline, South Jersey Times, Feb.�1

Remember to Spay or Neuter Your Pets "Top European Football [sic] Matches 'Fixed', Europol Finds"--headline, BBC website, Feb.�4

Stone Cold Sober as a Matter of Fact "Elton, the 'Gay' Dog, Spared the Gas Chamber"--headline,, Jan.�31

Hey, Kids! What Time Is It? "Time for a Reboot With North Korea"--headline, Washington Post, Feb.�2

Questions Nobody Is Asking

  • "What's Happened to Gov. Christie's Twitter Chatter?"--headline, Philadelphia Inquirer, Feb.�3
  • "If a Real Raven Fought a Real 49er, Who Would Win?"--headline,, Feb.�3
  • "What's That Other 90 Percent of Our Brains For?"--headline, Free-Lance Star (Fredericksburg, Va.), Feb.�1

Answers to Questions Nobody Is Asking

  • "Katie Couric: Larry King 'Lunged' at Me During Our Bad Date"--headline, New York Post, Feb.�2
  • "Why This Lump of Whale Dung Is Worth �43,000: It's an Aphrodisiac and Was Used to Annoint the Queen. A Dog Walker's Discovery on Morecambe Beach Is Truly 'Floating Gold'�"--headline, Daily Mail (London), Jan.�31

Look Out Below! "San Diego Drops Red-Light Cameras"--headline, U-T San Diego, Feb.�1

It's Always in the Last Place You Look

  • "What We Will Lose When Tom Harkin Leaves the Senate"--headline,, Feb.�1
  • "Muslims Find a 'Shtender' at UK Jewish Study Confab"--headline, Times of Israel, Feb.�3

Too Much Information "Youngest American Woman Billionaire Found With In-N-Out"--headline, Bloomberg, Feb.�4

Everything Seemingly Is Spinning Out of Control "Women in Paris Finally Allowed to Wear Trousers"--headline, Daily Telegraph website (London), Feb.�3

News You Can Use "Don't Fire an Employee And Leave Them [sic] in Charge of the Corporate Twitter Account"--headline,, Feb.�1

Bottom Stories of the Day

  • "Scottish Independence: SNP Welfare Plan Not Outlined"--headline, Scotsman, Feb.�1
  • "Google Data: Americans Care Less About Sarah Palin Than Ever Before"--headline, U.S. News & World Report website, Feb.�1

Sick as a Dog David Eddie, an advice columnist for Toronto's Globe and Mail, printed the following query the other day:

We live in a family-oriented neighbourhood in the heart of our city. Dozens of kids ride bikes, play soccer and so on while adults chat and watch. Last summer, one of my neighbours (with three sons) told me he saw a woman walking her girlfriend on a leash. I told him he must have been fantasizing. Sure enough, a woman with long dreads and multiple piercings (I'd seen her before; she rents a basement apartment on the street) came around the corner walking her girlfriend on a leash. We've seen it many times since then, in the middle of the day. My four-year old daughter asked me why the lady was wearing a leash. I told her that she was pretending to be a dog and that the other lady was playing the owner. My daughter loves inventing her own play scenarios and easily accepted my explanation. This has been going on since last summer, so it's obviously a happy, long-term relationship. But I don't love having to explain S&M role-play to my four-year old and would appreciate if the dog-walking happened after, say 9 p.m. What would you do?

After some horsing around, Eddie gets to the advice:

If your daughter somehow discovers the truth--well, that's no biggie, either, in the grand scheme. Just take her hand in yours, look into her eyes, and say: "Honey, it takes all kinds to make up this world." Maybe it'll help her grow up to be ultra-tolerant and hard to surprise.

We think we'd be a tad more judgmental than that, though it's hard to dispute the premise that "it takes all kinds." We worry, though, that the girl is going to grow up with some very warped ideas of what constitutes "a happy, long-term relationship."

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Zynga Beats Expectations But Takes A Step Back Anyway

Zynga (Nasdaq: ZNGA  ) reported earnings on Feb. 5. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Zynga crushed expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue was unchanged and GAAP loss per share dropped. The non-GAAP profit was a surprise, as analysts had predicted a loss.

Margins grew across the board.

Revenue details
Zynga booked revenue of $311.2 million. The 16 analysts polled by S&P Capital IQ anticipated a top line of $248.6 million on the same basis. GAAP reported sales were 0.0% lower than the prior-year quarter's $311.2 million.

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

EPS details
EPS came in at $0.01. The 23 earnings estimates compiled by S&P Capital IQ predicted -$0.03 per share. GAAP EPS were -$0.06 for Q4 against -$1.22 per share for the prior-year quarter.

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

Margin details
For the quarter, gross margin was 75.2%, 870 basis points better than the prior-year quarter. Operating margin was 12.1%, 16,910 basis points better than the prior-year quarter. Net margin was -15.6%, 12,420 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $263.0 million. On the bottom line, the average EPS estimate is -$0.01.

Next year's average estimate for revenue is $1.06 billion. The average EPS estimate is $0.01.

Investor sentiment
The stock has a one-star rating (out of five) at Motley Fool CAPS, with 309 members out of 644 rating the stock outperform, and 335 members rating it underperform. Among 174 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 65 give Zynga a green thumbs-up, and 109 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Zynga is hold, with an average price target of $3.08.

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PMC-Sierra Beats on Both Top and Bottom Lines

PMC-Sierra (Nasdaq: PMCS  ) reported earnings on Jan. 31. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 29 (Q4), PMC-Sierra beat expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue shrank significantly and GAAP earnings per share dropped significantly.

Gross margins increased, operating margins dropped, net margins contracted.

Revenue details
PMC-Sierra logged revenue of $129.4 million. The nine analysts polled by S&P Capital IQ hoped for a top line of $126.5 million on the same basis. GAAP reported sales were 15% lower than the prior-year quarter's $152.6 million.

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

EPS details
EPS came in at $0.12. The 10 earnings estimates compiled by S&P Capital IQ anticipated $0.10 per share. GAAP EPS of $0.05 for Q4 were 58% lower than the prior-year quarter's $0.12 per share.

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

Margin details
For the quarter, gross margin was 71.7%, 310 basis points better than the prior-year quarter. Operating margin was 4.6%, 440 basis points worse than the prior-year quarter. Net margin was 8.6%, 1,000 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $124.3 million. On the bottom line, the average EPS estimate is $0.08.

Next year's average estimate for revenue is $538.5 million. The average EPS estimate is $0.40.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 212 members out of 231 rating the stock outperform, and 19 members rating it underperform. Among 48 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 45 give PMC-Sierra a green thumbs-up, and three give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on PMC-Sierra is hold, with an average price target of $5.75.

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Top Stocks To Buy For 3/15/2013-5

Intel Corporation NASDAQ:INTC opened at $ 20.81and with a gain of 0.19% closed at $20.88 Company’s fifty days average price is $20.89 whereas it has a market capitalization $116.47 billion.
The total of 21.17 million shares was transacted over last trading day.

Level 3 Communications, Inc. NASDAQ:LVLT opened at $0.96 and with a fall of 1.38% closed at $0.95 Company’s fifty days average price is $0.97 whereas it has a market capitalization $1.59 billion.
The total of 17.28 million shares was transacted over last trading day.

Micron Technology, Inc. NASDAQ:MU opened at $ 7.81 and with a fall of 0.64% closed at $7.76 Company’s fifty days average price is $7.83 whereas it has a market capitalization $7.73 billion.
The total of 15.17 million shares was transacted over last trading day.

Sunesis Pharmaceuticals, Inc. NASDAQ:SNSS opened at $ 0.59 and with a gain of 9.45% closed at $0.58 Company’s fifty days average price is $0.36 whereas it has a market capitalization $154.34 million.
The total of 14.05 million shares was transacted over last trading day.

DryShips Inc. NASDAQ:DRYS opened at $ 5.59 and with a fall of 0.36% closed at $5.53 Company’s fifty days average price is $5.17 whereas it has a market capitalization $1.63 billion.
The total of 13.94 million shares was transacted over last trading day.

Using a tweet to get the power back on faster - 10:48 AM

( -- Your power just died — what’s the first thing you do? No, not go get candles. If you’re like many of us, you probably grab your phone and tweet, or write a Facebook message, about how supremely annoying and inconvenient losing power is (ugh, you were in the middle of Downton Abbey!). But turns out, bitching publicly on social media could actually be helpful to your local utility, if they’re using new big data software recently launched by GE.

This week at Distributech — it’s like the CES for the power grid sector — GE is formally unveiling its big data analytics and visualization software called Grid IQ Insight. It sucks in data from everywhere — grid sensors, smart meters, weather reports — including public social media data that consumers write about their electricity. The analytics can find and determine if the data is relevant (“My power’s been out for an hour, PG&E sucks!”) and can use the location data from the phone tweet to get a picture of an outage in a certain area.

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The idea is to give utilities a better window into when outages occur before they start getting phone calls from angry customers. They’ll still get those, but if they see an explosion of social media messages coming from a certain neighborhood, they can potentially reach out to those customers first and let them know they’re working on the problem. It’s about better customer service and quicker fixes to power outages.

During a demo on Monday night, GE execs showed a demo of a visualization of a grid in a neighborhood and tweets that would come into the system in real time. The social media messages were coded — red for negative, blue for neutral and green for positive. ‘They’re usually red,” joked a GE exec.

The grid visualization can show all sorts of other data in real time, not just social media messages. Importantly utility workers can see when connected grid systems like substations and transformers are having problems. The big data analytics platform uses Cassandra and MySQL databases under the hood.

GE isn’t the first to do this. A startup called Space Time Insight has built a grid data visualization tool that organizations like the California Independent System Operator Corporation use to watch California’s grid in real time. For Distributech — or DTech as the industry likes to call it — Space Time Insight launched the latest version of its software and also announced Canadian utility Hydro One as a new customer.

Developing tools to help utilities manage the massive influx of big data from the power grid is a hot space. (Make sure to check out our 13 energy data startups to watch in 2013). GE’s big data software is also part of its efforts to sell technology for the “Industrial Internet,” or bringing digital technologies to the sectors like transportation, aviation, locomotives, power generation, oil and gas development, and other industrial processes.

Opinion: Can This Non-Marriage Be Saved?294 comments

"President Barack Obama said he could not imagine a circumstance in which a state banning gay marriage was legal," the Puffington Host reports. The comment came during an interview with Clinton aide turned ABC Newsman George Stephanopoulos, who asked Obama, in the Puffington paraphrase, "whether gay marriage was a right under the Constitution."

Obama's answer:

"Well, I've gotta tell you that--in terms of practical politics, what I've seen is a healthy debate taking place state by state, and not every state has the exact same attitudes and cultural mores. And I--you know, my thinking was that this is traditionally a state issue and--that it will work itself out," he said. "On the other hand--what I also believe is that the core principle that people don't get discriminated against--that's one of our core values. And it's in our Constitution."Stephanopoulos then asked whether Obama could imagine a circumstance wherein a state's gay marriage ban could pass constitutional muster."Well, I can't, personally. I cannot," Obama responded. "That's part of the reason I said, ultimately, I think that, same-sex couples should be able to marry. That's my personal position. And, frankly, that's the position that's reflected--in the briefs that we filed--in the Supreme Court."

That's a misleading description of the administration's friend-of-the-court brief in Hollingsworth v. Perry, the case challenging the constitutionality of California's Proposition 8. The administration does not go so far as to urge the court to strike down all state bans on same-sex marriage. Instead it urges a novel solution that would have the effect of abolishing nonmarital civil unions, until now the compromise of choice between supporters and opponents of same-sex marriage.

Profit From These Rapidly Growing Small Caps

Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you'd like to add some small-cap stocks to your portfolio, the SPDR S&P 600 Small Cap ETF� (NYSEMKT: SLY  ) could save you a lot of trouble. Instead of trying to figure out which companies will perform best, you can use this ETF to invest in lots of them simultaneously.

The basics
ETFs often sport lower expense ratios than their mutual fund cousins. The SPDR ETF's expense ratio -- its annual fee -- is a very low 0.20%.�The fund is a bit on the small side, too, so if you're thinking of buying, beware of possibly large spreads between its bid and ask prices. Consider using a limit order if you want to buy in.

This ETF has performed�well, handily beating the S&P 500 over the past three and five years. As with most investments, of course, we can't expect outstanding performances in every quarter or year. Investors with conviction need to wait for their holdings to deliver.

Why small caps?
It's common, and reasonable, to invest in lots of large-cap companies, as they've typically proven themselves enough to grow large, and tend to have some competitive strengths. But it's also smart to include smaller companies in your portfolio, as the best of them can grow rapidly and eventually become large caps.

More than a handful of tiny growers had strong performances over the past year. 3D Systems (NYSE: DDD  ) , for example, surged 110%, but it's been a bumpy ride for investors. Its last earnings report featured big double-digit growth rates, but that wasn't enough for some, who expect huge things from the 3-D printing industry � including even health-care-related printing (new body parts, anyone?).

Hain Celestial (NASDAQ: HAIN  ) popped 34%, rewarding my socially conscious colleague Alyce Lomax, who added it to her portfolio. The organic food maker is expanding into the promising "Big Yogurt" market via an acquisition, and its acquisitions have been performing well.

Align Technology (NASDAQ: ALGN  ) gained 23%. It's behind the fairly well-known Invisalign dental aligner, as well as various CAD/CAM software, and its last earnings report was strong, featuring revenue up 11%. It beat analyst expectations, as well. Analysts at Zacks upgraded �the stock recently.

Other companies didn't do quite as well last year, but could see their fortunes change in the coming years. Cubist Pharmaceuticals (NASDAQ: CBST  ) , for instance, gained 8%. Its 2012 revenue gained 23% over 2011, and EPS surged 304%. It has several products on the market, and several more nearing the end of clinical trials. It has also acquired the right to buy�in-development pain medication Adynxx, as well as global rights�to an antibiotic candidate.

The big picture
A well-chosen ETF can grant you instant diversification across any industry or group of companies -- and make investing in and profiting from it that much easier.

With the European debt crisis and slowing growth in China, many investors are worried about heady growth going forward; but fear not, because�The Future is Made in America. Domestic manufacturing is poised to once again become the investment driver of the world, and all because of one disruptive technology. You can uncover the three companies that will become the American Steel of tomorrow in The Motley Fool's�new free report. Just click here to read more.

Why Prudential Is Telling Me to Buy Aviva

LONDON -- �Prudential� (LSE: PRU  ) (NYSE: PRU  ) �is the flavor of the month.

Its share price hopped and skipped almost 10% on Wednesday and jumped another 5% on Thursday morning. Which is great news for me, because I bought this FTSE 100-listed insurance behemoth three years ago, and it has doubled in value since then.

I shouldn't brag about my stock-picking abilities, because around the same time I sank an even bigger sum into its troubled rival�Aviva� (LSE: AV  ) (NYSE: AV  ) . It is down 18% over three years, wiping out a good chunk of my Prudential profits.

We have one winner, one loser. The question is, which one should you buy next?

Mob rule
Let's take the good news first. Prudential rocks.

But it wasn't always that way. When I bought the stock, chief executive Tidjane Thiam had just made a complete�Horlicks�of his 36 billion-pound attempt to buy AIA Group, the Asian arm of American International Group, and was nearly pitchforked out by upset shareholders.

I always thought the takeover was risky, and was glad it fell through. The market thought differently, and handed me a great buying opportunity. Who doesn't like buying good companies on bad news?

Since then, all the headlines have been happy. Indeed, Prudential's latest full-year results thrashed the sector generally, and Aviva in particular.

Highlights included a 25% increase in operating profits to 2.53 billion pounds, of which nearly 1 billion pounds come from its target Asian market, notably Indonesia, Singapore and Malaysia.

Asia now contributes more cash to Prudential than any other region, a mighty 341 million pounds in 2012, up from 40 million pounds just three years earlier. Prudential did pretty well in the U.S. as well, adding 200,000 new policies.

The firm has also continued to plump up its financial cushion, which now represents three times its solvency requirements. Best of all, Prudential whacked up its dividend by a whopping 16%.

Strong stuff
The turbulent Indian life-insurance market, challenging conditions in China, uncertainties over EU Solvency II requirements and the wider economic malaise are all worries, but given the jubilant market response to Prudential's progress, they are clearly minor concerns.

This is a company that is even throwing off cash in the U.K. Is there anything Prudential can't do? No wonder analysts are nailing it has a strong buy. I decided that three years ago.

And so to Prudential's whey-faced rival, poor, sickly Aviva.

I've just checked Aviva's past share-price performance, and it has pointy-down red arrows all over it.

Aviva has "red-arrowed" over five, three, two, one years... just about every timescale you can name.

The price is down 14% over the past 12 months, against a 10% rise for the FTSE 100 as a whole. The group's market cap has sunk to a lowly 9.5 billion pounds, against 30 billion pounds for the chubby-cheeked Pru. When Aviva announced its results last week, its share price fell 13% in moments. Bleh.

Just about everything Prudential has done right, Aviva has done wrong.

Aviva reported a pre-tax loss of 3.1 billion pounds, down from a profit of 60 million pounds last year, although in mitigation, that was mostly down to a 3.3 billion pounds writedown in the value of its disposed U.S. business.

While Prudential gains ground in Asia, Aviva is on the run in France, Italy and Spain, thanks to a sharp drop in long-term savings rates. Even foreign-exchange movements are against it, knocking 65 million pounds off its adjusted operating profit, which fell 4.3% to 1.78 billion pounds.

That's what happens when your luck runs out.

Finally, the one thing still in Aviva's favor, its 7%-plus yield, went under the knife. The final 2012 dividend was cut by a mighty 44%, leaving the full-year payout down 27%. That wasn't a nip and tuck, it was an amputation. Hence the share-price punishment.

Buy what?
Prudential rocks, Aviva sucks.

Prudential is cash-rich, has a strong balance sheet and an 11.6% operating margin. It's Asian strategy isn't a vague intention, it's a lucrative fact on the ground.

Aviva is Prudential's cash-poor cousin, financially weaker, embarrassed in Europe, strategically confused and overly complex, with a feeble operating margin of just 5.5%. So which stock should you consider? It's a no-brainer for me: Aviva.

I�feel you should consider Aviva for the same reason I bought Prudential three years ago: The market hates it, and the share price reflects that.

If you're patient, you might just be buying a bargain. The recent dismal results could be a turning point for Aviva. The bad news is well and truly out there.

But that 3.3 billion-pound U.S. writedown is out of the way. Management is now simplifying the business, slashing costs, reducing debt, and plumping up its capital cushion.

Given the insurer's problems, Aviva knows it must take aggressive action to restore its fortunes.

Yes, the dividend is down, but it still yields 5.9%, more than double Prudential's 2.6%. So you should be rewarded for your patience. And you won't be surprised to hear that Aviva is a lot cheaper, trading at 9.24 times adjusted earnings, while Prudential is a more fully priced 14.6 times earnings.

Buying great companies on great news is perfectly acceptable thing to do. But buying good companies on terrible news is far better. But you will need to be patient...

Let me finish by adding that if you're hungry for income, you'll want to feast your eyes on the "Motley Fool's Top Income Share for 2013." This low-volatility stock currently yields�a whopping 5.7% a year. To find out what it is, simply download our free guide, "Power Up Your Portfolio." The report is completely free for a limited period only, so�click here now.

Thursday, March 14, 2013

Apple Updates Mac OS X to Include Windows 8 Support

Even if others can't, Apple (NASDAQ: AAPL  ) has no problem backing Windows 8.

In an update released Thursday afternoon, the company added support for running Microsoft's (NASDAQ: MSFT  ) latest Windows operating system in Macs running the 10.8.3, or "Mountain Lion," edition of the Macintosh OS.

Apple has long made it possible to "boot" or load Windows on a Mac via a native software program called Boot Camp. The company upgraded the app in 10.8.3. Other improvements include fixes to certain flaws found in earlier versions of the OS, plus the latest edition of the Safari browser.

More Expert Advice from The Motley Fool There is absolutely no argument that Apple is at the center of technology's largest revolution ever, and that longtime shareholders have been handsomely rewarded with over 1,000% gains. However, there is a debate raging as to whether Apple remains a buy. The Motley Fool's senior technology analyst and managing bureau chief, Eric Bleeker, is prepared to fill you in on both reasons to buy and reasons to sell Apple, and what opportunities are left for the company (and more importantly, your portfolio) going forward. To get instant access to his latest thinking on Apple, simply click here now.

Which Apple Supply Chain Rumor Should You Believe?

The battleground stock that is Apple (NASDAQ: AAPL  ) continues to see investors focus heavily on supply chain rumblings from the other side of the world. Shares were weak today, down over 1% this morning, in part due to bearish sentiment among analysts. On the other hand, there's also some data that could potentially be good news for the iPhone maker.

Which supply chain rumors should investors believe?

The bad news
Topeka Capital analyst Brian White, who has the Street high price target of $888, says that things aren't so great within Apple's supply chain. White is the analyst that has compiled a group of Apple suppliers and bundled them into what he refers to as the "Apple Monitor." The goal is to gain insight into Apple's pipeline by looking at sales activity of suppliers.

White's data shows that the Apple Monitor saw February sales drop by a whopping 31% sequentially from January, far worse than the average 8% decline due to normal seasonality. That figure is the worst performance that the analyst has on record.

CLSA analyst Avi Silver has now downgraded his rating on Apple from "outperform" to "buy" while reducing his price target from $575 to $505, citing lower iPhone unit estimates in the June quarter. This expectation is partially based on a rumored iPhone launch during the summer, in which case sales may decline ahead of new models as consumers are now well attuned to Apple's rumored product cycles. Silver also sees an upcoming "iPhone Mini" having a negative effect on product mix and margins.

Baird Capital analyst William Power is on record saying the firm's semiconductor team expects iPhone 5 and iPad shipments to come in below consensus estimates. With the Mobile World Congress wrapping up last week, consumers and investors have gotten a glimpse of the competitive landscape and Power has concerns over Apple's product demand following the trade show. The analyst is sticking with his $465 price target, which represents modest upside from current prices.

The good news
Reuters is now reporting that both Taiwan Semiconductor (NYSE: TSM  ) and Hon Hai (Foxconn's parent company) are each planning on adding 5,000 workers to their ranks. Both companies are looking to recruit students that are preparing to graduate from Taiwan University this year.

The reported job additions are notable for several reasons. First off, Apple shares fell 2% last month on reports that Foxconn was instituting a hiring freeze. Part of the pessimism was since the Financial Times speculated it was due to "weakening demand." It didn't matter much that other analysts actually thought the hiring freeze was due to improved working conditions and better wages, leading to higher employee retention.

Regardless, reports that Hon Hai is now ramping up recruiting could signal that it needs more employees to ramp up production of upcoming Apple devices. Apple is hardly Hon Hai's only customer, but it is easily the company's biggest.

To date, Taiwan Semiconductor and Apple have had no publicly direct business relationship. Speculation has persisted for years that the two companies would inevitably ink a partnership as Apple tries to reduce its reliance on Samsung, but nothing has materialized yet. Apple indirectly gets iDevice chips made by TSMC through other suppliers like Qualcomm and Broadcom, but has never tapped the chip manufacturer directly.

There's even a possibility that the two have now quietly hooked up. Apple has nonchalantly upgraded its Apple TV set-top box, and the improvements are all internal. Interestingly, the A5 processor found inside the new models is slightly smaller than the ones found in previous generations. That points to a die shrink, possibly to TSMC's 28-nanometer manufacturing node. We'll have to wait for deeper analysis before knowing where these newer, smaller A5 processors came from.

TMSC adding to its ranks could still mean increased activity related to Apple devices, either directly or indirectly.

The ugly news
Ultimately, supply chain rumors are just that: rumors. Investors have been warned time and time again not to pay too much attention to such speculation. While supply chain rumors can help add some perspective to what may possibly be happening behind the scenes, investors would be mistaken to make buy or sell decisions based solely on them. That's what long-term fundamentals are for.

Fretting about Apple?
Ignoring emotions is hard, but that's exactly why we've put together bonus reports to ease investors' minds. Apple's growth story is far from over, and the company still has massive opportunities ahead. We've outlined them right here in The Motley Fool's premium Apple research service, and it may�give you the courage�to be greedy when others are fearful. If you're looking for some guidance on Apple's prospects, get started by�clicking here.

Caterpillar May Cut 1,400 Jobs at Belgian Plant

On Thursday, Caterpillar's (NYSE: CAT  ) Belgian subsidiary announced a plan to create a "more efficient and competitive business structure for its Gosselies, Belgium facility."

The company said in a press release that it might need to close down "some operations that negatively impact the total cost structure of the plant." It might also include layoffs of about 1,400 "permanent jobs" out of the plant's total work force of 3,700 employees. That would be nearly 38%.

The subsidiary cited "limited" growth prospects and a "multi-year, economic downturn" in its home European market as catalysts for the cost-cutting, adding that divergent environmental standards in various markets, as well as increased foreign competition in Europe, exacerbated its financial woes.

Caterpillar also said it's quite simply often cheaper to import machines from other factories abroad, for sale in Europe, than to build them locally.

The company has not yet made a final decision on the planned layoffs, and says it is consulting with union representatives on its plans.


The energy innovations of the future need today’s machines - 07:12 PM

( -- The entrepreneurs who are still willing to attempt large scale manufacturing of next-gen energy technologies — whether it’s solar materials, LEDs, futuristic batteries or advanced biofuels — are increasingly looking to using existing machines from other industries to make their products. Many of the executives, and investors at the ARPA-E Summit this week told me they are building this requirement into their original business models.

While the move might seem obvious, the trend is in contrast to high-profile companies from yesteryear like Solyndra, which built expensive custom machines to produce their solar panels and had to raise and spend hundreds of millions of dollars on manufacturing. The added expense and complexity of developing new machines and new products just added to Solyndra’s struggles and contributed to its bankruptcy.

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The CEO of Alphabet Energy, Matthew Scullin, told me at the Summit this week that his goal from day one was to require all of Alphabet’s products to be made on existing toolsets. Alphabet Energy develops thermoelectric materials and devices, which convert heat into electricity, and the technology can be built on standard chip industry machines. “A startup needs to focus on developing one product in order to be successful, and developing a tool is like developing a second product in parallel. The risk is high,” said Scullin.

Scullin also pointed out that by using traditional semiconductor tools Alphabet can more easily find skilled operators and can also outsource manufacturing to chip foundries, if they choose to do so. For custom machines, “the lack of existing know-how, secondhand equipment, service people, and competition means the cost of doing business is high, adding to risk.”

Battery startup Seeo is using standard machines used to make traditional lithium ion batteries to make its batteries, including its secret sauce: its unique electrolyte. The company employs basic mixers, coaters, and assembly and testing machines at its pilot line factory in Hayward, Calif. and is also using battery cell, module and pack materials that are commonly used to make lithium ion batteries. Later this year the Seeo team hopes to build a larger fab with the same equipment somewhere in the U.S.

Startup Imprint Energy, which is making a zinc battery, uses off-the-shelf  printing equipment from prototyping to scaled production, says Imprint Energy CEO Devin MacKenzie. They haven’t done any customization of the equipment and MacKenzie tells me they do not anticipate requiring any large scale special equipment or significant modifications of commercially-available systems.

Many of the companies in its sustainability portfolio are embracing the practice of using standard plug and play manufacturing machines, Khosla Ventures’s partner Andrew Chung said at the Summit this week. Seeo has raised funds from Khosla Ventures.

Not all energy innovations, by their nature, can use existing machines. Tesla has invested significantly in its factory in Fremont, Calif. that is now churning out the Model S and using programmed robots to assemble the cars in an entirely new way. But Tesla has also long been smart about taking advantage of the cost savings and innovation of the traditional battery sector, as it uses basic Panasonic laptop batteries linked together to power its Model S.

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