Saturday, June 8, 2013

Best Supermarket Companies To Invest In 2014

U.K. stocks fell for the first time in four days, led by a selloff in mining companies, as base metals declined and U.S. economic growth trailed forecasts.

Rio Tinto Group and Anglo American Plc (AAL) retreated more than 2.5 percent as copper and lead declined. Eurasian Natural Resources Corp. (ENRC) sank 6.8 percent as analysts downgraded the shares. Standard Life Plc slipped 1.2 percent as Chief Financial Officer Jackie Hunt resigned to move to a rival insurer. Ocado Group Plc (OCDO) fell for the first day this week as the online grocer ruled out a takeover by William Morrison Supermarkets Plc.

The FTSE 100 (UKX) Index lost 16.17 points, or 0.3 percent, to 6,426.42 at the close in London. The benchmark gauge is still up 2.2 percent this week, the biggest advance since Jan. 4, amid speculation the European Central Bank will cut interest rates next week. The broader FTSE All-Share Index fell 0.3 percent today, and Ireland�� ISEQ Index slid 1 percent.

Best Supermarket Companies To Invest In 2014: Oculus Innovative Sciences Inc.(OCLS)

Oculus Innovative Sciences, Inc. develops, manufactures, and markets tissue care products that prevent and treat infections in open wounds and skin care, as well as, through a separate mechanism of action, heal wounds while reducing the need for antibiotics. The company, through its platform technology, Microcyn, a solution of electrically charged oxychlorine small molecules treats organisms that cause disease, which include viruses, fungi, spores, and antibiotic-resistant strains of bacteria, such as methicillin-resistant Staphylococcus aureus and vancomycin-resistant Enterococcus in wounds, as well as Clostridium difficile. It sells Microcyn technology-based human wound care products as prescription and over-the-counter products. The company markets its products through sales force and distributors in the United States, Mexico, Europe, and internationally. Oculus Innovative Sciences, Inc. offers its products to pharmacies; care centers; hospitals; nursing homes; urgent c are clinics; home healthcare; physicians; nurses; and other healthcare practitioners who are the primary caregivers to patients being treated for acute or chronic wounds or undergoing surgical procedures, as well as to dermatologists for treatment of various skin afflictions. The company was formerly known as Micromed Laboratories, Inc. and changed its name to Oculus Innovative Sciences, Inc. in August 2001. Oculus Innovative Sciences was incorporated in 1999 and is based in Petaluma, California.

Best Supermarket Companies To Invest In 2014: Singtel 100 (Z78.SI)

Singapore Telecommunications Limited engages in the operation and provision of telecommunication systems and services primarily in Singapore and Australia. The company also provides facilities management, consultancy, Internet access, and information technology (IT) services; technical, business, and management consultancy services; financial, data communication, telecommunications, mobile phone, narrowband portal content, equipment rental, interactive television, broadcasting, and IT disaster recovery services; and handset insurance and related services. In addition, it engages in the research and development, products and services development, and business partnership activities; venture capital investment holding; operation and provision of cellular mobile telecommunications systems and services; resale of fixed line and broadband services; provision of satellite capacity for telecommunications and video broadcasting services; ownership and chartering of barges; provisi on of storage facilities for submarine cables and related equipment; development and management of online Internet portal; and sale and maintenance of telecommunications equipment, as well as operates as a C1 Satellite contracting party. Further, the company distributes specialized telecommunications and data communication products; invests in telecommunications network infrastructure; distributes prepaid mobile products; operates and maintains fibre optic network between Brisbane and Cairns; manages, provides, and operates a call centre; provides information technology training, communication engineering, system integration, engineering and marketing, and general liaison and support services. Additionally, it develops and resells software; provides infotainment products and services; and operates as a trustee for superannuation scheme. The company is headquartered in Singapore. Singapore Telecommunications Limited is a subsidiary of Temasek Holdings (Private) Limited.

Hot Airline Stocks To Own Right Now: B.O.S. Better Online Solutions(BOSC)

B.O.S Better Online Solutions Ltd. provides radio frequency identification (RFID) and supply chain solutions to enterprises primarily in the Europe, the United States, the Far East, and Israel. Its RFID and Mobile Solutions division offers hardware products, including thermal and barcode printers; RFID and barcode scanners and readers; wireless, mobile, and forklift terminals; wireless infrastructure; active and passive RFID tags; and consumables, such as ribbons, labels, and tags, as well as BOS ID software platform for systems integrators to assemble applications for transfer to automatic ID data capture clients. This division also develops applications comprising BOS LIVESTOCK, a software application that enables management, tracking, support, and planning of livestock day-to- day operations; BOS CarID, a solution to identify and track vehicles for a range of transportation-related settings; BOS STOCK, a data collection solution for logistics management in stores and wa rehouses; and BOS Mfgr., a production line tracking solution. The company?s Supply Chain Solutions division distributes electronic components, such as active, passive, electro-mechanical, and microwave components, as well as full access networks equipment for IT and telecommunications; and communication servers, multi-protocol print servers, server adapters, USB products, switches, fiber optics equipment, ADSL and XDSL routers, modems, VoIP, storage equipment, and ATM devices. This division also offers components consolidation services to the aerospace, defense, medical, and telecommunications industries, as well as enterprise clients; engages in the inventory and quality control management of components entering production lines; and provides warehouse management services for ongoing projects. B.O.S Better Online Solutions Ltd. sells its products through direct sales, sales agents, and integrators. The company was founded in 1990 and is headquartered in Rishon LeZion, Isra el.

3 Reasons Starbucks Stock Deserves the Premium

There's no way around it; Starbucks' (NASDAQ: SBUX  ) stock is expensive. 

Priced at 31 times last year's earnings, and sitting close to an all-time high, the company's shares are valued like one of its "indulgence" drinks right now.

Caramel Frappuccino, anyone?

But there are good reasons underpinning that premium valuation. In the video below, Fool contributor Demitrios Kalogeropoulos discusses three of Starbucks' biggest avenues for growth over the next few years. Demitrios argues that success in these ventures, which include loyalty cards, store expansion in the U.S., and a new food menu, could make today's share price seem completely fair in retrospect.

The best investing approach is to choose great companies and stick with them for the long term. The Motley Fool's free report "3 Stocks That Will Help You Retire Rich" names stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of. Click here now to keep reading.

SEC Considers Tougher Rules for Money Funds

WASHINGTON (AP) -- Investors could lose principal from money market investment funds that underperform under rules being proposed by the Securities and Exchange Commission. But the change would affect mainly institutional rather than individual investors.

The SEC was to vote Wednesday to advance two plans that are intended to better inform investors and protect the industry from risks that surfaced at the height of the 2008 financial crisis.

One plan would allow shares of some money market funds to "float," instead of having a fixed value of $1 per share. The proposal failed to gain support last year but has since won the backing of a panel of regulators that include Federal Reserve Chairman Ben Bernanke.

The other would impose fees on withdrawals from funds if their assets that can be readily converted into cash fall below a certain level.

Allowing values to float would make some money funds more like bonds, whose principal changes with increases or decreases in interest rates. That's a fundamental shift for the investments. But proponents say it is necessary because it would show money funds, while safer than stocks and many other investments, still carry some level of risk. They say more awareness of the risk would reduce the potential for runs on money funds.

The SEC proposal would limit the floating-value requirement to those money market funds known as "prime."

Prime funds attract mainly big institutional investors as opposed to retail customers and are considered more risk-prone because they invest in short-term corporate debt. They represent roughly half of the total $2.9 trillion assets held by all money market mutual funds.

The SEC will vote to open proposed changes to public comment, which is likely to last for several months. At some later point, the agency would finalize the rules or settle on a modified version of them.

Mary Schapiro, who stepped down as SEC chairman in December, pushed unsuccessfully last year for a floating value for all money market funds and a requirement that money funds hold capital reserves of 1 percent of the fund's assets. But three of the five commissioners opposed those changes and her proposal was never brought to a vote.

Some commissioners appeared to be sympathetic to arguments made by representatives for the industry, who complained that most of the changes previously recommended would make money funds unattractive and lead to fewer investors.

This time, however, the SEC is under pressure from the Financial Stability Oversight Council, a group of high-level regulators that has backed both the floating-value requirement and calls for strict capital reserves. Bernanke and Treasury Secretary Jacob Lew both sit on the panel.

Investors learned how risky mutual funds could be during the financial crisis. The Reserve Primary Fund, one of the largest money market funds, lost so much money that it "broke the buck." As a result, its value fell to just 97 cents per share.

The decline stoked fears over the safety of money funds. In the ensuing week, investors pulled out around $300 billion from prime money funds, representing 14 percent of the assets in those funds. The government stepped in to temporarily guarantee assets of all money funds so investors could be assured they would be protected from losses.

You're Wrong About Apple's Affordable iPhone

Apple's (NASDAQ: AAPL  ) margin contractions have rattled investors over the past year. By no means is Apple's current level of profitability bad -- rather, the Mac maker faces very hard comparisons with an extremely lucrative fiscal 2012. Apple is widely expected to launch an affordable iPhone model later this year, at long last pursuing a wider product portfolio.

Many investors have thought that such a lower-priced model would further erode Apple's overall gross margin. Many investors may be wrong.

Word on the Street
Morgan Stanley analyst Katy Huberty believes that the rumored affordable iPhone model will end up boosting Apple's margins as opposed to the other way around. It's true that the mid-range model will inevitably end up less profitable than the high-end flagship, but it's also true that it may fetch a higher gross margin than the rest of Apple's products.

Add in the fact that an affordable model will boost unit sales significantly and that there's some inherent operating leverage in Apple's business due to the scalability of software development, and the net result could very well be increased margins. Adding a $399 iPhone model to the lineup increases her total revenue estimate by 5% and gross profit by 6% in dollar terms, with a modest increase of 0.1% in gross margin. A lot of that upside would be driven by total iPhone units, with Huberty increasing her estimate from 77 million to 100 million for the second half of 2013.

This same effect is already starting to happen with the iPhone 4, the 2010 model that Apple has been aggressively pricing in emerging markets. Apple has seen impressive spikes in iPhone units due to these affordability initiatives. For the current quarter, Huberty believes that Apple's pricing efforts will translate into a 14% drop in iPhone 4 average selling prices -- but also a 0.3% gain in gross margin.

Gross margin could be further reinforced by sequentially slowing sales of iPads and Macs, since those devices are less profitable than an affordable iPhone would be. Investors shouldn't fret about a couple of basis points of profitability here and there. Instead, investors should acknowledge that the mid-range unsubsidized market (which is mostly abroad) is an enormous incremental opportunity for Apple that it has yet to tap.

Even if the affordable iPhone cannibalizes the flagship model, Apple has a strong track record of successful self-cannibalization. Read about Apple's past and future in The Motley Fool's latest free report, "Apple Will Destroy Its Greatest Product." Can Apple really disrupt its own iPhones and iPads? Find out by clicking here.

Friday, June 7, 2013

10 Best China Stocks To Buy For 2014

Qihoo 360 (NYSE: QIHU  ) invaded Baidu's (NASDAQ: BIDU  ) home turf of Chinese search, and now Baidu is relishing the chance to be the away team.

China's leading search engine issued a press release yesterday, proclaiming that its antivirus software suite has received certification from West Coast Labs.

Baidu Antivirus was introduced four months ago as a way free way for users on Windows desktops, laptops, and tablets to protect files and browsers from viruses and other online maladies.

There's no denying why Baidu entered the antivirus market. This is where Qihoo 360 has earned its reputation. Given the popularity of its free antivirus solutions and its popular browser, Qihoo 360 decided the time was right to roll out a search engine last summer.

10 Best China Stocks To Buy For 2014: Top Image Systems Ltd.(TISA)

Top Image Systems Ltd. provides enterprise solutions for managing and validating content entering organizations from various sources. It develops and markets automated data capture solutions for managing and validating content gathered from customers, trading partners, and employees. The company?s solutions deliver digital content to the applications that drive an enterprise by using technologies, such as wireless communications, servers, form processing, and information recognition systems. It offers eFLOW Unified Content Platform that provides the common architectural infrastructure for its solutions. The company also provides Smart, an automated classification solution, which is the eFLOW plug-in for unstructured content providing single point of entry for information entering the organization; and Freedom, the eFLOW plug-in for semi-structured content that enables customers to identify and capture critical data from semi-structured documents, such as invoices, purchase orders, shipping notes, and checks. In addition, it offers Integra, the eFLOW plug-in for structured content, which provides a solution for data capture, validation, and delivery from structured predefined forms; eFLOW Ability, an integrated module interfacing with SAP systems for automated parking, approval, and posting of invoices and other document within SAP systems; and eFLOW Invoice Reader, an invoice capture and approval solution, which could be deployed and integrated in enterprise accounting environment, such as SAP, Oracle, and other financial systems. Top Image Systems Ltd. sells its products through a network of value-added distributors, systems integrators, original equipment manufacturers, and partners in approximately 40 countries worldwide. It has strategic partnership with SQN Banking Systems (SQN) to incorporate SQN's fraud detection solutions with its eFLOW Banking Platform in the Asia Pacific market. The company was founded in 1991 and is headquartered i n Ramat Gan, Israel.

Advisors' Opinion:
  • [By cnAnalyst]

    Top Image Systems Ltd. (NASDAQ:TISA) is the 4th best-performing stock last month in this segment of the market. It was up 84.92% for the past month. Its price percentage change was 102.63% year-to-date.

10 Best China Stocks To Buy For 2014: SmartHeat Inc.(HEAT)

SmartHeat Inc. manufactures, sells, and services plate heat exchangers (PHE) in the People?s Republic of China. It offers PHE units, which combine PHEs with various pumps, temperature sensors, and valves and automated control systems; heat meters for use in commercial and residential buildings; and spiral and tube heat exchangers. The company?s products are used in various applications that include energy conversion for heating, ventilation, and air conditioning; and industrial use in petroleum refining, petrochemicals, metallurgy, food and beverage, and chemical processing. SmartHeat sells PHE units under the brand name of Taiyu; and PHEs under the brand names of Taiyu and Sondex. It sells its products through sales force and a network of national distributors. The company is headquartered in Shenyang, the People?s Republic of China.

Top 5 Dividend Stocks To Watch For 2014: ChinaEdu Corporation(CEDU)

ChinaEdu Corporation, together with its subsidiaries, provides educational services to the online degree programs of universities in the People?s Republic of China. It also offers online tutoring services to primary and secondary school students; operates primary and secondary schools; and markets international English language curriculum programs to established learning institutions, as well as international polytechnic programs to vocational schools in China. The company?s online degree programs offer associate and bachelor?s degree programs, including accounting, marketing, finance, business administration, international business, law, civil engineering, education, computer science, literature, project management, marketing, and administrative management. These online degree programs primarily target working adults. Its services also include academic program development, technology services, enrollment marketing, recruiting, student support services, and finance operati ons. The company provides technical, recruiting, and other services for the online degree programs of 27 universities; and technology support services to 7 additional universities that are awaiting regulatory approval to launch their online degree programs. As of December 31, 2010, it served approximately 311,000 online degree programs students, as well as approximately 51,450 students in other businesses. ChinaEdu Corporation was founded in 1999 and is based in Beijing, the People?s Republic of China.

10 Best China Stocks To Buy For 2014: China Green Agriculture Inc.(CGA)

China Green Agriculture, Inc., through its subsidiaries, engages in the research, development, production, and sale of various types of fertilizers and agricultural products in the People?s Republic of China. Its fertilizer products include humic acid-based compound fertilizers, compound fertilizers, blended fertilizers, organic compound fertilizers, slow-release fertilizers, water-soluble fertilizers, and mixed organic-inorganic compound fertilizers. The company markets its fertilizer products to private wholesalers and retailers of agricultural farm products in 22 provinces, 4 autonomous regions, and 3 central government-controlled municipalities. It also engages in the development, production, and distribution of agricultural products, such as fruits, vegetables, flowers, and colored seedlings. The company sells its decorative flowers to flower shops, luxury hotels, and government agencies; fruits and vegetables to supermarkets and upscale restaurants; and seedlings to city planning departments in Shaanxi and its neighboring provinces. China Green Agriculture, Inc. is based in Xian, the People?s Republic of China.

Advisors' Opinion:
  • [By Louis Navellier]

    You might say that China Green Agriculture (CGA) is the salt of the earth when it comes to China stocks. Well, maybe not salt in the literal sense, just more in the metaphoric sense.

    Literally, China Green Agriculture is a maker of fertilizer. The company’s humic acid organic liquid compound fertilizers help enrich the soil needed to grow the food that sustains China’s ginormous population. The company produces approximately 119 fertilizer products, and it markets those products to private wholesalers and retailers of agricultural farm products.

    And talk about strong price momentum — CGA shares are up 360% over the past 12 months!

    I rate CGA an A, making it a strong buy.

10 Best China Stocks To Buy For 2014: Renesola Ltd.(SOL)

ReneSola Ltd, together with its subsidiaries, engages in the manufacture and sale of solar wafers and solar power products. It offers virgin polysilicons, monocrystalline and multicrystalline solar wafers, and photovoltaic cells and modules. The company also provides cell and module processing services. Its products are used in a range of residential, commercial, industrial, and other solar power generation systems. The company sells its solar wafers primarily to solar cell and module manufacturers. It principally operates in Mainland China, Singapore, Taiwan, Hong Kong, Korea, India, Australia, Germany, Italy, Spain, Belgium, France, the Czech Republic, and the United States. The company was founded in 2003 and is based in Jiashan, the People?s Republic of China.

Advisors' Opinion:
  • [By Martin]

    Renesola Ltd.(NYSE: SOL) closing price in the stock market Tuesday, Jan. 3, was $1.61. SOL is trading -6.98% below its 50 day moving average and -45.69% below its 200 day moving average. SOL is -87.85% below its 52-week high of $13.25 and 11.03% above its 52-week low of $1.45. SOL‘s PE ratio is 1.56 and its market cap is $139.77M.

    Renesola Ltd. engages in the manufacture and sale of solar wafers and solar power products together with its subsidiaries. SOL offers virgin polysilicons, monocrystalline and multicrystalline solar wafers, and photovoltaic cells and modules.

10 Best China Stocks To Buy For 2014: AsiaInfo-Linkage Inc.(ASIA)

AsiaInfo-Linkage, Inc. provides telecommunications software solutions and information technology (IT) products and services to telecommunications carriers and other enterprises in the People?s Republic of China. The company offers business and operation support systems product suites, including OpenBilling, a billing solution for telecommunications operators; OpenCRM, a CRM solution suite for telecommunications operators; OpenBOSS, a carrier-class business operation support system solution; OpenBI, a carrier-class operating analysis and decision support system platform; OpenPRM, a system that calculates, manages, and reconciles payment for intercarrier network access. It also provides network management solutions comprising NetXpert, a data and Internet protocol network management solution; and OpenXpert, an integrated telecommunications network management system. In addition, the company offers service applications products, such as Mail Center, an online messaging softwa re; Spam Patrol software for real time anti-spam control; and Net Disk, a network hard disk product, which facilitates Internet-based file transfer, sharing, and management, as well as supports other functions, such as data processing of short message folders and synchronization of mobile devices. Its service applications products also include Internet Short Messaging Gateway, a business support platform for value-added short messaging services; and Device Management Platform that enables mobile operators to manage various mobile devices and perform remote mobile device management, such as remote diagnosis and parameter setup. In addition, it offers software enhancement and maintenance, system integration, and other value-added IT consulting and planning services. The company was formerly known as AsiaInfo Holdings, Inc. and changed its name to AsiaInfo-Linkage, Inc. in July 2010. AsiaInfo-Linkage, Inc. was founded in 1993 and is headquartered in Beijing, the People?s Republ ic of China.

10 Best China Stocks To Buy For 2014: Clean Diesel Technologies Inc.(CDTI)

Clean Diesel Technologies, Inc. engages in the manufacture and distribution of emissions control systems and products for heavy duty diesel and light duty vehicle markets. The company operates in two divisions, Heavy Duty Diesel Systems and Catalyst. The Heavy Duty Diesel Systems division designs and manufactures verified exhaust emissions control solutions that are used to reduce exhaust emissions created by on-road, off-road, and stationary diesel and alternative fuel engines, including propane and natural gas. Its products include closed crankcase ventilation systems, diesel oxidation catalysts, diesel particulate filters, Platinum Plus fuel-borne catalysts, ARIS selective catalytic reduction reagents, catalyzed wire mesh diesel particulate filters, alternative fuel products, and exhaust accessories. This division offers its products for original equipment manufacturers of heavy duty diesel equipment, such as mining equipment, vehicles, generator sets, and construction equipment, as well as retrofit customers consisting of school districts, municipalities, and other fleet operators. The Catalyst division produces catalyst formulations using its proprietary MPC technology for gasoline, diesel, and natural gas induced emissions. Its products comprise catalysts for gasoline engines, diesel engines, and energy applications. This division supplies its catalysts to automotive manufacturers and large heavy duty diesel engine manufacturers. The company sells its products through a network of distributors and dealers, and its direct sales force worldwide. Clean Diesel Technologies, Inc. is based in Ventura, California.

Advisors' Opinion:
  • [By Roberto Pedone]

    Another under-$10 stock that's very close to triggering a big breakout trade is Clean Diesel Technologies(CDTI), a vertically integrated global manufacturer and distributor of emissions control systems and products, focused in the heavy duty diesel and light duty vehicle markets. This stock is down huge in 2011, with shares off by over 65%.

    If you take a look at the chart for Clean Diesel Technologies, you'll notice that this stock dropped big from its July high of $8 to a recent low of $1.50 a share. Since printing that low, the stock has now moved into sideways pattern between $2.58 and 3.22 a share. A move outside of that shorter-term sideways pattern will likely set this stock up for its next big trend.

    Trades should now watch CDTI for a near-term breakout above $3.22 on heavy volume. Look for volume that's tracking in close to or above its three-month average action of 268,131 shares.

    >>7 Stocks Rising on Huge Volume

    At last check, volume has already hit over 350,000 shares, which is well above the average levels. Traders should now wait and see if the stock can close above $3.22. A close above that level should set this stock up to re-test its 200-day moving average of $4.58, or possibly trend much higher.

    You could now be a buyer of this stock above $3.22 if we get that strong close today. I would simply use a mental stop that's a few percentage points below $3.22, or that's just below the 50-day at $3.11 a share. I would then add to any long positions once CDTI takes out $3.60 and then $4.20 on high-volume.

  • [By cnAnalyst]

    Clean Diesel Technologies, Inc. (NASDAQ:CDTI) is the 3rd best-performing stock last month in this segment of the market. It was up 90.97% for the past month. Its price percentage change was -13.07% year-to-date.

10 Best China Stocks To Buy For 2014: DAQQ New Energy Corp.(DQ)

Daqo New Energy Corp., together with its subsidiaries, manufactures and sells polysilicon in China. The company sells its polysilicon to photovoltaic product manufacturers for use in the processing of ingots, wafers, cells and modules for solar power solutions. It also produces and sells mono-crystalline and multi-crystalline modules to photovoltaic system integrators and distributors in China and internationally under its Daqo brand. The company was formerly known as Mega Stand International Limited and changed its name to Daqo New Energy Corp. in August 2009. Daqo New Energy Corp. was founded in 2006 and is headquartered Wanzhou, the People?s Republic of China.

Advisors' Opinion:
  • [By Kevin1977]

    DAQQ New Energy Corp.(NYSE: DQ) closing price in the stock market Tuesday, Jan. 3, was $1.84. DQ is trading -4.75% below its 50 day moving average and -59.53% below its 200 day moving average. DQ is -87.71% below its 52-week high of $14.97 and 30.50% above its 52-week low of $1.41. DQ‘s PE ratio is 0.60 and its market cap is $64.66M .

    DAQQ New Energy Corp. manufactures and sells polysilicon in China together with its subsidiaries. DQ sells its polysilicon to photovoltaic product manufacturers for use in the processing of ingots, wafers, cells and modules for solar power solutions.

10 Best China Stocks To Buy For 2014: China Valves Technology Inc.(CVVT)

China Valves Technology, Inc., through its subsidiaries, engages in developing, manufacturing, and selling low, medium, and high-pressure metal valves for customers in the electricity, petroleum, chemical, water, gas, nuclear power station, and metal industries in China. The company?s product categories include high pressure and high temperature valves for power station units; valves for long distance petroleum and gas pipelines, and sewage; special valves for chemical lines; and large valves for water supply pipe networks. Its products comprise gate, globe, check, throttle, butterfly, ball, safety, water pressure test, vacuum, and extraction check valves. The company markets its products through regional agents and distributors. China Valves Technology, Inc. has a strategic cooperation frame agreement with Dongfang Electric Corporation for the development of high-end valves. The company was founded in 2007 and is headquartered in Kaifeng, the People's Republic of China. Advisors' Opinion:

  • [By Robert Hsu]

    China Valves Technology (NASDAQ: CVVT) recently announced that its subsidiary, Able Delight Valve,  has been certified as a qualified supplier of China Nuclear Power Engineering. This is CVVT’s second subsidiary to receive this certification.

    This is a nice milestone for the company as CVVT continues to gain market share in the nuclear power industry. The demand for nuclear power applications is growing but the inspection of prospective suppliers is strict — and the company believes that the addition of Able Delight as a qualified supplier will become another catalyst for rapid growth in the near future. CVVT is a buy under $10.50.

10 Best China Stocks To Buy For 2014: Trina Solar Limited(TSL)

Trina Solar Limited, through its subsidiaries, designs, develops, manufactures, and sells photovoltaic (PV) modules worldwide. The company offers monocrystalline PV modules ranging from 165 watts to 185 watts in power output; and multicrystalline PV modules ranging from 215 watts to 240 watts in power output that provide electric power for residential, commercial, industrial, and other applications. It also involves in the design and production of various PV modules, such as colored modules for architectural applications and larger sized modules for utility grid applications based on customers? and end-users? specifications. Trina Solar Limited sells and markets its products primarily to distributors, wholesalers, power plant developers and operators, and PV system integrators. The company was founded in 1997 and is based in Changzhou, the People?s Republic of China.

Advisors' Opinion:
  • [By Fitz Gerald]

    Trina Solar, Ltd.(NYSE: TSL) closing price in the stock market Tuesday, Jan. 3, was $7.17. TSL is trading 0.68% above its 50 day moving average and -39.26% below its 200 day moving average. TSL is -76.93% below its 52-week high of $31.08 and 35.80% above its 52-week low of $5.28. TSL‘s PE ratio is 2.92 and its market cap is $505.06M.

    Trina Solar, Ltd. designs, develops, manufactures, and sells photovoltaic (PV) modules worldwide through its subsidiaries. TSL sells and markets its products primarily to distributors, wholesalers, power plant developers and operators, and PV system integrators.

  • [By Hawkinvest]

    Trina Solar Ltd. (TSL) is one of the most respected solar companies in China. It has a strong balance sheet, especially when compared to many other Chinese solar companies. Trina Solar recently reported financial results for fourth quarter and full year of 2011. The loss for 2011 was $37.8 million, or 54 cents per share. Trina Solar is working to reduce non-silicon manufacturing cost to less than 60 cents per watt by the end of 2012, which will give the company a competitive advantage. This company is one of China's "blue chip" solar stocks, and it is likely to lead an industry rebound when it comes. With the recent financial report out of the way, and the stock below $8 per share, it appears be the right time to start buying in stages.

Don't Get Too Worked Up Over MWI Veterinary Supply's Earnings

Although business headlines still tout earnings numbers, many investors have moved past net earnings as a measure of a company's economic output. That's because earnings are very often less trustworthy than cash flow, since earnings are more open to manipulation based on dubious judgment calls.

Earnings' unreliability is one of the reasons Foolish investors often flip straight past the income statement to check the cash flow statement. In general, by taking a close look at the cash moving in and out of the business, you can better understand whether the last batch of earnings brought money into the company, or merely disguised a cash gusher with a pretty headline.

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

Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. Dollar values in millions. FCF = free cash flow. FY = fiscal year. TTM = trailing 12 months.

Over the past 12 months, MWI Veterinary Supply generated $14.7 million cash while it booked net income of $59.0 million. That means it turned 0.7% of its revenue into FCF. That doesn't sound so great. FCF is less than net income. Ideally, we'd like to see the opposite.

All cash is not equal
Unfortunately, the cash flow statement isn't immune from nonsense, either. That's why it pays to take a close look at the components of cash flow from operations, to make sure that the cash flows are of high quality. What does that mean? To me, it means they need to be real and replicable in the upcoming quarters, rather than being offset by continual cash outflows that don't appear on the income statement (such as major capital expenditures).

For instance, cash flow based on cash net income and adjustments for non-cash income-statement expenses (like depreciation) is generally favorable. An increase in cash flow based on stiffing your suppliers (by increasing accounts payable for the short term) or shortchanging Uncle Sam on taxes will come back to bite investors later. The same goes for decreasing accounts receivable; this is good to see, but it's ordinary in recessionary times, and you can only increase collections so much. Finally, adding stock-based compensation expense back to cash flows is questionable when a company hands out a lot of equity to employees and uses cash in later periods to buy back those shares.

So how does the cash flow at MWI Veterinary Supply look? Take a peek at the chart below, which flags questionable cash flow sources with a red bar.

Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. Dollar values in millions. TTM = trailing 12 months.

When I say "questionable cash flow sources," I mean items such as changes in taxes payable, tax benefits from stock options, and asset sales, among others. That's not to say that companies booking these as sources of cash flow are weak, or are engaging in any sort of wrongdoing, or that everything that comes up questionable in my graph is automatically bad news. But whenever a company is getting more than, say, 10% of its cash from operations from these dubious sources, investors ought to make sure to refer to the filings and dig in.

With 12.3% of operating cash flow coming from questionable sources, MWI Veterinary Supply investors should take a closer look at the underlying numbers. Within the questionable cash flow figure plotted in the TTM period above, stock-based compensation and related tax benefits provided the biggest boost, at 11.0% of cash flow from operations. Overall, the biggest drag on FCF came from changes in accounts receivable.

A Foolish final thought
Most investors don't keep tabs on their companies' cash flow. I think that's a mistake. If you take the time to read past the headlines and crack a filing now and then, you're in a much better position to spot potential trouble early. Better yet, you'll improve your odds of finding the underappreciated home-run stocks that provide the market's best returns.

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Upcoming Virnetx Royalty Rate Judgment Likely To Affect Apple's Stock Price

After having attained a 52 week high of $705, Apple (AAPL) has fallen back to $445. There are many factors that have influenced this decline one of which is a decline in profit margins. On March 31, 2012, Apple had a reported profit margin of 47.37%. Over the last year this has declined to a profit margin of 37.5%. It is typical for stocks to suffer price declines as their profit margins erode. As profit margins decline, P/E ratios also typically decline. The P/E ratio has declined from 17.1 on March 30, 2012 to 10.7 most recently.

Further declines in profit margins will most likely cause further declines in share price. One key upcoming event could have a significant impact on Apple's profit margin, the setting of a royalty rate for Apple's products that infringe on Virnetx (VHC) patents. Apple was sued by Virnetx for infringing on its data security patents with the trial concluding in November, 2012, with a Virnetx victory. After many motions and negotiations no settlement has been reached between Virnetx and Apple. Judge Davis is expected to rule shortly (probably within the next two weeks) on a royalty rate for the offending products. The royalty rate could be set anywhere between .5% to 1.5% and possibly even more. As this royalty rate will apply to all infringing products, (iPhone, iPad, and others supporting Face Time and iMessage), this will have a direct effect on Apple's profit margin which will also impact stock price.

How much impact there will be on the profit margin will depend on the royalty rate set. Virnetx has an established royalty rate structure both published and through agreements with other licensees. Virnetx's published royalty rate is between 1 and 2 percent for customers in good standing. This royalty rate has been validated through licenses with 4 different companies, Siemens (SI), NEC, Mitel (MITL), and Aastra (AATSF.PK). The average rate agreed to by these companies through negotiations is 1.52%, right in the middle of the 1 to 2 percent published rat! e. Whatever rate is set will further reduce Apple's profit margin.

While the original trial was for infringement by the iPhone 4 and iPad 3rd generation, in the recent ruling by Judge Davis, Apple's motion to rejoin the setting of the royalty rate with the penalty portion of the ruling was denied. While this was a widely expected ruling, there is an interesting footnote:

The Court notes that a request for an ongoing royalty goes beyond simply performing a mathematical calculation to determine future damages. Post-judgment damages are analyzed differently than pre-judgment damages. See Amado v. Microsoft Corp., 517 F.3d 1353, 1361- 62 (Fed. Cir. 2008). Additionally, an ongoing royalty applies to accused products and modified versions of those products, so long as those modified versions are not "colorably different" from the adjudicated products. Creative Internet Advertising Corp. v. Yahoo! Inc., 674 F. Supp. 2D 847, 854 (E.D. Tex. 2009). Therefore, the trial court must also determine the issue of whether modified versions are or are not "colorably different" from the adjudicated products when resolving a request for an ongoing royalty.

Based on this footnote, I believe that is it highly likely that any royalty rate will apply to the latest versions of the infringing products as well as the older versions. With the potential hit of up to 1.5% to Apple's bottom line, further erosion of its stock price can be expected.

Apple could prevent a decline in profit margins by raising its price on the affected products but in the current competitive situation, this is unlikely. The other way to prevent further erosion of the profit margin would be to buy Virnetx with some of its offshore cash stockpile. This would provide benefit to shareholders both by preventing further profit margin decline and providing another income stream. The patents that would be acquired are required to support 4G LTE advanced. This will require any cell phone manufacturer to obtain a license ! from Appl! e in order to support the latest 4G standard.

It is also widely expected that Apple will appeal the decision but this will likely only delay, not eliminate the profit margin decline. The addition of these patents to Apple's already formidable patent portfolio would insure the use of these key security patents in its future products without further cost as well.

Disclosure: I am long VHC. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. (More...)

Oil Falls Below $95 After U.S. Jobs Report

The price of oil fell back below $95 Friday after the U.S. government reported that May was another month of steady, but not spectacular hiring.

In morning trading in New York, benchmark oil for July delivery was down 30 cents to $94.46 a barrel. Oil rose as high as $95.34 a barrel earlier.

U.S. employers added 175,000 jobs in May, below the more robust pace that took place during the fall and winter.

The Labor Department says the unemployment rate rose to 7.6 percent from 7.5 percent in April. But the increase occurred because more people began looking for work, a good sign.

The government said the economy added 12,000 fewer jobs in April and March than originally estimated.

Oil prices were supported earlier by a carry-over from the bigger-than-expected drop in crude inventories reported by the U.S. Energy Department on Wednesday.

"The huge 6.2 million barrel drawdown of crude stocks ... is the largest draw down for crude inventories since the end of last year," said a report from Sucden Financial Research in London. The large drop in crude stockpiles "indicates the stronger demand outlook for the summer driving season as refining activity improves."

Meanwhile, Brent crude, a benchmark for many international oil varieties, was up 36 cents to $103.97 a barrel on the ICE Futures exchange in London.

In other energy futures trading on the Nymex:

Wholesale gasoline was flat at to $2.85 a gallon. Heating oil was up 1 cent at $2.88 per gallon. Natural gas gained 1 cent to $3.83 per 1,000 cubic feet.

Thursday, June 6, 2013

Recent Run At Guess? Creates Compelling Short Opportunity

It's been a nice -- and welcome -- bull run of late for shares of Guess? (GES), which have rallied better than 25 percent since fourth quarter earnings and weak guidance for fiscal 2014 (ending January) sent the stock tumbling toward $25 per share. The rally culminated with an 8.3 percent gain last Friday, after the release of first quarter results after the bell Thursday, which briefly pushed the stock to a 52-week high:

GES Chart

GES data by YCharts

The problem for Guess? is that the rally simply made no sense. As I noted in March, the FY13 results and FY14 outlook showed a company with serious, structural issues, a host of macro headwinds, most notably in Europe, and no simple way out of the morass. And, despite the post-earnings bounce, last week, Q1 results weren't any better. The trading response to the quarter was summed up by CNBC's Jim Cramer, who argued, "It's horrendous to me, but it wasn't horrendous enough, so the stock goes higher."

Indeed, it was not a good quarter. Earnings per share did come in ahead of company guidance, but year-over-year fell by more than half, even excluding charges related to restructuring efforts aimed at creating cost savings. Revenue fell 5 percent from the year-prior quarter; North American same-store sales fell 9 percent; comps fell "in the high-single digits" in Europe, according to CFO Nigel Kershaw on the Q1 conference call. Perhaps most notably, the company maintained its full-year earnings guidance, as the impact of higher-than-expected EPS in Q1 is expected to be negated by weaker-than-expected revenue in Europe and Asia.

In fact, revenue guidance for FY14 was actually pulled down slightly, with same-store sales expected to fall in the "mid-single-digits" according to North American Retail CFO Russell Bowers on the earnings call, and total revenues to decrease year-over-year as well.

It's als! o far from clear that Guess? will hit its full-year earnings target (it's worth noting that the company pulled down its guidance after last year's second quarter, and only barely hit the bottom of end of the revised range by year's end). At the midpoint of its second quarter guidance, Guess? is guiding for a second half that almost mirrors its second half a year ago:

Guess 2H numbers

data from author calculations, using midpoint of full-year fiscal 2014 and second quarter fiscal 2014 guidance

Bear in mind that in fiscal 2013, Guess? saw North America Retail same-store sales drop 6.6 percent, and comps in Europe drop "in the high single-digits" (according to the company's 10-K). Company-wide operating margin fell 450 basis points year-over-year, total revenues declined from fiscal 2012, and net earnings fell by one-third. Now, after a weak first quarter and a second quarter that is guided for another revenue decline (and a 26 percent fall in earnings per share), the company is projecting that it will have largely stemmed the bleeding by the second half of this year.

Perhaps it will. But even so, at its current valuation, that hardly justifies the stock price. At the midpoint of FY14 guidance, Wednesday's close of $31.10 puts GES' forward P/E at 17.4. That is a pricey multiple for a company who is headed for its second consecutive year of declining revenues, and facing a two-year EPS drop of over 40 percent. Comparatively, Gap Inc. (GPS), who is expanding margins and earnings, and posting same-store sales increases, is trading at 15.7x the midpoint of its fiscal 2014 guidance. Even after backing out both company's net cash, the multiples are almost identical: 15.34 for GES, 15.42 for GPS.

By any measure, it's clear which stock investors would rather have, given the similar earnings multiples -- and it's not Guess? Guess? is now! a turnar! ound play, but its current valuation seems to have already priced in much of a potential rebound. The bull case at $31 seems difficult to make.

Of course, I argued the same thing in March at $25; what has changed is that the short case has become more compelling. In the bull market of the last few years, struggling retailers have shown surprising resilience or, at the least, the capacity to put together some quick bull moves that have damaged short sellers. Witness Sears Holdings (SHLD), Abercrombie & Fitch (ANF), and even much-maligned JC Penney (JCP), to name just a few. But GES' move near a 52-week high, and the lack of a near-term catalyst to move it beyond its recent range, removes much of the short-side risk.

Indeed, a look at the company's two-year chart, and its more recent daily chart, show a stock that appears set to turn downward:

(click to enlarge)

Guess? weekly chart

GES Chart

GES data by YCharts

Note the downtrend channel in the longer-term chart; in the second, 3-month chart, GES filled the gap after its drop following Q4 earnings in March, and may again fill the gap up following last week's release.

All told, Guess? seems to have outrun its fundamentals. Even considering its long history, its brand recognition (particularly in Europe), and its potential for a turnaround, its valuation is on par with retailers who are already succeeding, not those trying to right the ship. With some technical evidence that the near-term bull run might be coming to an end, a short sale of Guess? looks like a strong potential play.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. (More...)

Microsoft's Little Shop of Discounts

Aqua America CEO Sells 99,000 Shares

Aqua America (NYSE: WTR  ) Chairman, President, and CEO Nicholas DeBenedictis just sold around $3 million of his shares, according to a company statement released today.

The 99,176 shares were sold for "personal long-term financial planning reasons" and to allow for "more diversity and liquidity" in the executive's personal holdings, according to the company. Trading by company insiders is closely watched by Wall Street, and selling by high-level management is sometimes perceived as a hint at overvaluation or impending issues.

In this case, the company says DeBenedictis and his wife still own 782,150 Aqua shares (worth around $23.9 million at the current share price) and he exceeds by five times the stock ownership guidelines set by the board.

Since the CEO used shares to satisfy some of his exercise and withholding obligations, Aqua expects the overall impact to earnings per share to be slightly positive for its shareholders. As of this writing, shares are trading at around $30.59, and have moved between $23.61 and $33.28 in the past year. 


This SEC Move Won't Kill Your Money Market Fund

Millions of investors use money market funds as a savings-account alternative, relying on their shares to hold their value and produce at least modest income. But ever since the financial crisis, the Securities and Exchange Commission has looked at money market funds as a potential systemic risk, and yesterday, the SEC finally took action that it hopes will shore up their stability.

Although many commentators believe that the stricter regulations on money market funds will make them useless, the particular focus those regulations took should limit their impact for most retail investors. Let's take a closer look at exactly how the SEC decided to handle the risks involved in the money market fund industry.

What the SEC did
Yesterday's ruling approved two proposals that can either stand alone or work in concert. One rule would end the long-standing tradition of having money market fund net asset values fixed at $1 per share, instead allowing the share price to float up or down the same way that stock and bond mutual fund prices do. The other proposal would allow funds to charge exit fees or temporarily stop investors from selling their shares for up to 30 days during times of market stress that affect the liquidity of fund assets.

The key to the proposals, however, is that they don't affect all money market funds. In particular, the floating-share-price proposal wouldn't apply to "retail" money market funds, defined as funds that limit daily shareholder redemptions to $1 million or less. In addition, even institutional funds designed for big institutional investors with large liquidity needs would be exempt if they concentrated on government securities rather than commercial paper and other less financially secure debt. Similarly, the proposal on exit fees and temporary sales restrictions wouldn't apply to government-focused funds, although the SEC didn't include a retail-fund exclusion.

Did the SEC just make money market funds useless?
Both of these proposals have been in the works for years, and they've drawn considerable debate in past iterations. The retail-investor exemption to floating share prices directly addressed concerns that fund giant Fidelity expressed last year that if money market fund prices were allowed to float, more than half of its customers would move some or all of their assets.

Yet as much as the SEC has focused on the funds that average investors use, retail money market funds have been out of favor for years, because of the Federal Reserve's low interest rate policy. Fidelity, Charles Schwab (NYSE: SCHW  ) , and Vanguard have had to subsidize their money market funds, accepting fee reductions in order to keep their net income from going negative. Moreover, Schwab, TD AMERITRADE  (NYSE: AMTD  ) , and E*TRADE Financial (NASDAQ: ETFC  ) have all established brokerage sweep-account options that tie to FDIC-insured bank accounts at their banking subsidiaries, essentially urging their customers to avoid money market funds entirely and helping them avoid some of the hit to their earnings that subsidizing those funds would entail.

Most important, institutional investors don't have the alternatives that retail investors have with their cash. For years, high-yield savings accounts have offered average investors much higher rates on their savings, with accounts still available that pay as much as 1% while offering full FDIC protection. For Barclays (NYSE: BCS  ) , General Electric's (NYSE: GE  ) GE Capital division, and other banks offering high-yield accounts, paying an above-market rate for savings gives them access to capital that they otherwise wouldn't be able to attract. Moreover, by running their high-yield banking operations largely over the Internet, these institutions are able to make use of the banking infrastructure they already have in place while benefiting from the lower costs of Internet banking.

But with FDIC maximums and other restrictions, those accounts aren't generally available to institutional investors, who have to settle for the much lower yields on Treasuries and commercial paper. As a result, imposing restrictions on institutionally focused funds likely won't dissuade institutions from using them, if only because their other options are limited.

Much ado about nothing
In the end, individual investors shouldn't be too concerned about whether money market funds survive in their current form, because they haven't been a competitive savings option for years. By limiting the impact of its floating-price proposal to big institutions, the SEC has implicitly recognized the need to allow money market funds to keep their most attractive feature for retail investors in order to give them a chance to continue to exist. In the meantime, investors and fund companies alike can only wait and hope that rising short-term interest rates will eventually make money market funds a meaningful investment again.

GE still has its capital division, but the company has returned to its industrial roots with strategic bets in energy and other higher-growth businesses. If you're a GE investor, you need to understand how these bets could drive this company to become the world's infrastructure leader. At the same time, you need to be aware of the threats to GE's portfolio. To help, we're offering comprehensive coverage for investors in a premium report on General Electric, in which our industrials analyst breaks down GE's multiple businesses. You'll find reasons to buy or sell GE today. To get started, click here now.

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Weyerhaeuser: Building value

Wednesday, June 5, 2013

Don't Get Too Worked Up Over Alliant Techsystems's Latest Numbers

Here at The Motley Fool, I've long cautioned investors to keep a close eye on inventory levels. It's a part of my standard diligence when searching for the market's best stocks. I think a quarterly checkup can help you spot potential problems. For many companies, products that sit on the shelves too long can become big trouble. Stale inventory may be sold for lower prices, hurting profitability. In extreme cases, it may be written off completely and sent to the shredder.

Basic guidelines
In this series, I examine inventory using a simple rule of thumb: Inventory increases ought to roughly parallel revenue increases. If inventory bloats more quickly than sales grow, this might be a sign that expected sales haven't materialized. Is the current inventory situation at Alliant Techsystems (NYSE: ATK  ) out of line? To figure that out, start by comparing the company's inventory growth to sales growth. How is Alliant Techsystems doing by this quick checkup? At first glance, not so great. Trailing-12-month revenue decreased 5.4%, and inventory increased 21.9%. Comparing the latest quarter to the prior-year quarter, the story looks potentially problematic. Revenue dropped 12.0%, and inventory grew 21.9%. Over the sequential quarterly period, the trend looks healthy. Revenue grew 9.2%, and inventory grew 3.9%.

Advanced inventory
I don't stop my checkup there, because the type of inventory can matter even more than the overall quantity. There's even one type of inventory bulge we sometimes like to see. You can check for it by examining the quarterly filings to evaluate the different kinds of inventory: raw materials, work-in-progress inventory, and finished goods. (Some companies report the first two types as a single category.)

A company ramping up for increased demand may increase raw materials and work-in-progress inventory at a faster rate when it expects robust future growth. As such, we might consider oversized growth in those categories to offer a clue to a brighter future, and a clue that most other investors will miss. We call it "positive inventory divergence."

On the other hand, if we see a big increase in finished goods, that often means product isn't moving as well as expected, and it's time to hunker down with the filings and conference calls to find out why.

What's going on with the inventory at Alliant Techsystems? I chart the details below for both quarterly and 12-month periods.

Source: S&P Capital IQ. Data is current as of latest fully reported quarter. Dollar amounts in millions. FY = fiscal year. TTM = trailing 12 months.

Source: S&P Capital IQ. Data is current as of latest fully reported quarter. Dollar amounts in millions. FQ = fiscal quarter.

Let's dig into the inventory specifics. On a trailing-12-month basis, finished goods inventory was the fastest-growing segment, up 56.3%. That can be a warning sign, so investors should check in with Alliant Techsystems's filings to make sure there's a good reason for packing the storeroom for this period. On a sequential-quarter basis, work-in-progress inventory was the fastest-growing segment, up 13.6%.

Foolish bottom line
When you're doing your research, remember that aggregate numbers such as inventory balances often mask situations that are more complex than they appear. Even the detailed numbers don't give us the final word. When in doubt, listen to the conference call, or contact investor relations. What at first looks like a problem may actually signal a stock that will provide great returns. And what might look hunky-dory at first glance could actually be warning you to cut your losses before the rest of the Street wises up.

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Add Alliant Techsystems  to My Watchlist.

3 Reasons to Sell Cummins Stock

I'm going to attempt something a little odd today, Fools. Even though I recently bought shares  of engine-maker Cummins (NYSE: CMI  ) I'm going to be giving you three reasons to consider selling Cummins stock today.

Why am I doing this?

Recently, Nobel Prize winner Daniel Kahneman visited Fool headquarters in Virginia. While visiting, he talked about how a number of different biases can lead us to believe that we can predict the future with relative certainty. In reality, he argued, we are just deluding ourselves.

It got me to thinking about how I don't write enough about the risks of owning the stocks I own. So, though I don't plan on selling my Cummins stock right now, I think it's healthy for me to practice and model this behavior.

1. Big slowdown in emerging markets
Many investors in Cummins are hoping for the company to grow its presence in Brazil, China, and India. As those countries build out their infrastructures, there will be continued demand for trucks and machinery. If a Cummins engine can find its way into those trucks or pieces of heavy machinery, it would have a significant effect on the company's revenue.

In 2012, however, there was a noted slowdown from these emerging markets. Sales from China, Brazil, and India, were down 27%, 38%, and 12%, respectively. While it's important to note that these three countries combined account for only 15% of total revenues in 2012 – they are an important part of many investors' vision for Cummins.

2. Customers decide to go in-house
While Cummins makes a dizzying variety of engines, it doesn't make any of the vehicles that actually use the engines. As the company states in its annual report: "PACCAR, Volvo AB, Navistar International Corporation and Chrysler, are truck manufacturers or OEMs that manufacture engines for some of their own products...[but] have chosen to outsource certain types of engine production to us."

Photo courtesy of Cummins

The business from PACCAR (NASDAQ: PCAR  ) in particular, is important to Cummins. In 2012, PACCAR accounted for 13% of Cummins' consolidated net sales. If any of these companies were to switch to a different engine maker, or choose to make their own engines in-house, it would likely cause a noticeable decline in revenue.

3. Differing emissions standards
One of the huge advantages to investing in Cummins is that it exposes you to a company that is on the cutting edge of low-emissions engines. Cummins has worked to develop engines that comply – and go above – EPA, European Union, and California Air Resources Board specifications.

It has also partnered with Westport Innovations (NASDAQ: WPRT  ) to offer natural gas engines, and is in the process of building its own natural gas engine in-house.

There are two threats stemming from Cummins' significant investment in low-emissions technology. The first could be that different regulatory agencies don't put in place or enforce new environmental standards. The second is that the standards could start to deviate significantly – with the EPA requiring one thing, and the EU something entirely different. That would cause Cummins to spend even more of its resources on tailoring the engines, instead of ramping up production to a level of scale.

What's a Fool to do?
As it stands right now, I'm definitely holding my shares. Emerging markets may be a drag on Cummins stock for a while, but I have a decades-long timeline. While losing PACCAR would be a heavy hit, the two companies have been doing business for 68 years, and I don't see any news to make me think that relationship is coming to an end. And while I can't foresee how environmental regulations will play out, I'm confident with Cummins' market position in that respect.

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Don't Bank On a Big Dow Climb Today

The Dow Jones Industrial Average (DJINDICES: ^DJI  ) is on the decline again today as investors try to sort out the meaning of conflicting economic data. With Wall Street's main focus continuing to fall on the Fed's next move, uncertainty reigns supreme. Just before 11:30 a.m. EDT, the index was down 117 points, with little upward momentum in sight.

Show me the data
If you're watching for signs in the economic data releases today that might help you determine the Fed's approach to continuing its stimulus program, good luck.

With a disappointing jobs report from ADP showing only 135,000 new jobs were added to the private sector in May, falling below the expected 167,000, you may believe this data points to the Fed maintaining the current rate of bond repurchases. Since the labor market was to be the prime recipient of the stimulus' aid, a lack of forward momentum in hiring could signal that we're not on the right track yet.

But the recent gains in the labor market, spurring on many members of the Federal Open Markets Committee to support a cut in the current plan, has been mainly in the slowing of job cuts -- not hiring. Though it's clear that hiring needs to pick up for a full recovery to start, that hasn't been the case so far, and it hasn't stopped increasing support for curbing the stimulus plan.

Housing is the second piece of the recovery puzzle so far, with continued signs that the housing market is steadily rolling along. But this morning's MBA Purchase Applications report showed the second week of declines in new financing applications, with an 11.5% drop from last week. The drops have largely been driven by rising interest rates -- surely a sign that the Fed shouldn't allow rates to increase from the near-zero levels we've been enjoying.

But the big decreases have also been heavily focused in the refinancing segment of the applications -- a commonsense occurrence when you factor in higher rates. Refinancings accounted for 68% of all the application activity. Though this week did see a decline in new purchase activity, last week's report showed an increase. Pressures from a declining inventory of homes and subsequent price increases may be the biggest contributors to this week's drop.

Taking it to the banks
Both of the Dow's bank component stocks are dealing with some old business that they thought they had resolved.

JPMorgan (NYSE: JPM  ) is also down in the dumps today, with an Alabama sewer debacle soiling its chances of reaching positive territory. The bank has agreed to forgive $842 million in debt owed to it by Jefferson County, Ala., from derivatives and swaps the county purchased to finance a new sewer system before the financial crisis. Some county-employee corruption and a financial crisis later, the county had to declare bankruptcy in 2011. Though JPMorgan had already agreed to a $722 million settlement with the SEC over its involvement with the Jefferson financing, the new agreement with creditors will allow the county to emerge from bankruptcy.

Bank of America (NYSE: BAC  ) headed into the third day of its hearing over a two-year-old settlement with investors for a batch of mortgage-backed securities that turned sour. The $8.5 billion on the table is being objected to by some large names, including AIG (NYSE: AIG  ) , which objects to the size of the settlement. AIG is basing its argument on another insurer's experience, when MBIA reached a settlement over MBS's for $0.60 on the dollar. If that amount became the basis for B of A's case, the price tag could reach $60 billion. The bank is arguing that it had the right to put its Countrywide segment into bankruptcy instead of offering the current amount to investors, but instead chose to offer a deal.

Outside the Dow, Citigroup (NYSE: C  ) is also down following its return to the courtroom over a deal gone sour. Private equity firm Terra Firma claims that the bank lied about a second bidder in its purchase of publisher EMI, driving the price up unneccessarily. Though the case had been heard in court before, and Citi had prevailed, a federal appeals judge overturned the ruling based on improper jury instructions. The case could cost the bank up to $8.3 billion.

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Falling Consumer Spending Weighs on the Dow

Blue-chip stocks are marginally lower this afternoon after a series of economic reports released today painted a conflicting picture of the financial health of the American consumer. With roughly an hour left in the trading session, the Dow Jones Industrial Average (DJINDICES: ^DJI  ) is off by 71 points, or 0.46%.

To start with the bad news: the Department of Commerce released data today suggesting that the economic recovery is still proceeding in fits and starts. According to its report, consumer spending fell by 0.2% in April -- the weakest reading since last May. Economists had forecast a decline of only 0.1%.

Now to the good news: A separate report showed that consumer confidence is at the highest level since 2007. The University of Michigan/Thomson Reuters Consumer Sentiment Index advanced to 84.5 this month from 76.4 in April. The consensus estimate called for a reading of 83.8.

These conflicting views provide fodder to bears and bulls alike, particularly as they relate to the Federal Reserve's ongoing analysis of QE3. "The surge in consumer confidence is exactly the type of economic jump-start the Federal Reserve intended to result from its aggressive policies," an economist noted about the University of Michigan survey.

"On the flip side, when the data comes in a little bit weak," a market strategist told Bloomberg News, "people start to wonder, 'well, maybe the Fed is going to stand there a bit longer.' The end result of that is increased volatility."

And increased volatility is exactly what we've experienced over the last few days. On Tuesday, the market shot up by roughly 100 points, only to then lose that ground on Wednesday and then oscillate between positive and negative yesterday and today.

In terms of individual stocks, Intel (NASDAQ: INTC  ) is leading the Dow higher this afternoon, up by 1% at the time of writing. Yesterday evening, Reuters broke the story that Samsung has chosen an Intel processor to power an updated version of its top-tier Galaxy tablet. After Intel got behind the proverbial eight ball with regard to mobile computing, the news that a major phone and tablet manufacturer like Samsung has selected its chips is a huge step in the right direction.

On the downside, shares of Proctor & Gamble (NYSE: PG  ) are the worst-performing component on the blue-chip index, down by 2.3% in mid-afternoon trading. As my colleague Dan Carroll discussed here, the consumer products giant is currently in the midst of a leadership change at the top, as former CEO A. G. Laffley just stepped back into the position after his successor-turned-predecessor and resigned earlier this month. Most recently, The Wall Street Journal reported that the company is looking to restructure its operating and reporting segments into four separate segments, each of which will report directly to Laffley.

Interested in Intel?
When it comes to dominating markets, it doesn't get much better than Intel's position in the PC microprocessor arena. However, that market is maturing, and Intel must find new avenues for growth. In this premium research report on Intel, a Motley Fool analyst runs through all of the key topics investors should understand about the chip giant. Click here now to learn more.

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Tuesday, June 4, 2013

Top 5 Paper Companies To Buy Right Now

Wausau Paper (NYSE: WPP  ) is soon to be one subsidiary lighter. The company announced it has reached agreement to sell its specialty paper division in a sale that will net it around $110 million. The buyer is Expera Specialty Solutions, a new entity sponsored by private equity firm KPS Capital Partners.

Expera will also include Thilmany, a similar business unit KPS has agreed to purchase from the privately held firm Packaging Dynamics.

Wausau quoted its CEO Hank Newell as saying of the deal that it "accomplishes all of our key objectives: divesting our paper business in a way that creates value for our shareholders, creating a specialty business under new ownership with the scale and product breadth to compete globally, and narrowing our focus to accelerating growth in our tissue business."

Top 5 Paper Companies To Buy Right Now: Weyerhaeuser Company(WY)

Weyerhaeuser Company, a forest products company, grows and harvests trees, builds homes, and manufactures forest products worldwide. It grows and harvests trees for use as lumber, other wood and building products, and pulp and paper. The company manages 6.4 million acres of private commercial forestland; and has long-term licenses on 13.9 million acres of forestland. It also offers timber; minerals, such as rock, sand, and gravel, as well as oil and gas to construction and energy markets; logs; timberland tracts; and seed and seedlings, poles, plywood, and hardwood lumber products. In addition, the company provides structural lumber products for structural framing; engineered lumber products for floor and roof joists, and headers and beams; structural panels for structural sheathing, subflooring, and stair treading for wood products dealers, do-it-yourself retailers, builders, and industrial users. Further, it offers building products comprising cedar, decking, siding, ins ulation, rebar, and engineered lumber connectors. Additionally, the company offers fluff pulp for use in sanitary disposable products; papergrade pulp for printing and writing papers, and tissues; specialty chemical cellulose pulp for use in textiles, absorbent products, specialty packaging, and high-bulking fibers; liquid packaging board converted into containers; and slush and wet lap pulp for manufacturing paper products. It also constructs single-family houses, as well as develops residential lots and land for construction and sale; and master-planned communities with mixed-use property. The company sells its cellulose fibers products through direct sales network, and liquid packaging products directly to carton and food product packaging converters; and wood products through sales organizations and distribution facilities. Weyerhaeuser Company has been elected to be taxed as a real estate investment trust. The company was founded in 1900 and is headquartered in Federal Way, Washington.

Top 5 Paper Companies To Buy Right Now: Graphic Packaging Holding Co (GPK)

Graphic Packaging Holding Company (GPHC), incorporated on June 21, 2007, is a provider of packaging solutions for a variety of products to food, beverage and other consumer products companies. The Company is also a producer of folding cartons and coated unbleached kraft paperboard, coated-recycled board and multi-wall bags. The Company operates in two business segments: paperboard packaging and flexible packaging. The Company�� customers include beverage, food and other consumer products industries. The Company operates in four geographic areas: the United States/Canada, Central/South America, Europe and Asia Pacific. In December 2011, the Company combined its multi-wall bag and specialty plastics packaging businesses with the kraft paper and multi-wall bag businesses of Delta Natural Kraft, LLC and Mid-America Packaging, LLC (collectively DNK), both wholly owned subsidiaries of Capital Five Investments, LLC (CVI). Under the terms of the transaction, the Company formed a company, Graphic Flexible Packaging, LLC (GFP), in which it owns 87% interest. On April 29, 2011, the Company acquired all of the assets of Sierra Pacific Packaging, Inc. (Sierra), a producer of folding cartons, beverage carriers and corrugated boxes for the consumer packaged goods industry. In January 2013, the Company acquired Contego Packaging Holdings, Ltd.

Paperboard Packaging

The Company supplies paperboard cartons and carriers. The Company provides a range of paperboard packaging solutions for various end-use markets, such as beverage, including beer, soft drinks, energy drinks, water and juices; food, including cereal, desserts, frozen, refrigerated and microwavable foods and pet foods; prepared foods, including snacks, quick-serve foods for restaurants and food service products, and household products, including dishwasher and laundry detergent, healthcare and beauty aids, and tissues and papers. The Company produces paperboard at its mills; prints, cuts and glues (converts) the paperboard into fol! ding cartons at its converting plants; and designs and manufactures packaging machines that package bottles and cans and, to a lesser extent, non-beverage consumer products. The Company also installs its packaging machines at customer plants and provides support, service and performance monitoring of the machines. The Company offers a variety of laminated, coated and printed packaging structures that are produced from its coated unbleached kraft (CUK), coated-recycled board (CRB), kraft paper and uncoated-recycled board (URB), as well as other grades of paperboard that are purchased from third-party suppliers. The Company manufactures corrugated medium and kraft paper for sale in the open market and internal use.

Flexible Packaging

The Company�� flexible packaging segment includes multi-wall bags, plastics, labels, and the Pine Bluff, AR mill. The Company is a supplier of flexible packaging in North America. Its products include multi-wall bags, shingle wrap, plastic bags and film for building materials (such as ready-mix concrete), retort pouches (such as meals ready to go), medical test kits, batch inclusion bags and film. Its end-markets include food and agriculture, building and industrial materials, chemicals, minerals, pet foods, and pharmaceutical products. Approximately 27% of the plastics produced are consumed internally. The Company�� label business focuses on heat transfer labels and lithographic labels. The Company operates label plants, which produce labels for food, beverage, pharmaceutical, automotive, household and industrial products, detergents, and the health and beauty markets.

The Company competes with MeadWestvaco Corporation and Klabin Company.

Best Undervalued Companies To Watch For 2014: Cornerstone Progressive Return Fund(CFP)

Cornerstone Progressive Return Fund is a closed-ended equity fund of fund launched and managed by Cornerstone Advisors, Inc. The fund invests funds investing in the public equity markets of the United States. It invests in stocks of companies operating across diversified sectors. Cornerstone Progressive Return Fund was formed on April 26, 2007 and is domiciled in the United States.

Top 5 Paper Companies To Buy Right Now: Weatherford International Ltd(WFT)

Weatherford International Ltd. provides equipment and services used in the drilling, evaluation, completion, production, and intervention of oil and natural gas wells worldwide. It offers artificial lift systems, which include reciprocating rod lift systems, progressing cavity pumps, gas lift systems, hydraulic lift systems, plunger lift systems, hybrid lift systems, wellhead systems, and multiphase metering systems. The company also provides drilling services, including directional drilling, ?Secure Drilling? services, well testing, drilling-with-casing and drilling-with-liner systems, and surface logging systems; and well construction services, such as tubular running services, cementing products, liner systems, swellable products, solid tubular expandable technologies, and inflatable products and accessories. In addition, it designs and manufactures drilling jars, underreamers, rotating control devices, and other pressure-control equipment used in drilling oil and nat ural gas wells; and offers a selection of in-house or third-party manufactured equipment for the drilling, completion, and work over of oil and natural gas wells for operators and drilling contractors, as well as a line of completion tools and sand screens. Further, the company provides wireline and evaluation services; and re-entry, fishing, and thru-tubing services, as well as well abandonment and wellbore cleaning services; stimulation and chemicals, including fracturing and coiled tubing technologies, cement services, chemical systems, and drilling fluids; integrated drilling services; and pipeline and specialty services. It serves independent oil and natural gas producing companies. The company was founded in 1972 and is headquartered in Geneva, Switzerland.

Advisors' Opinion:
  • [By Tom Bishop]

    Weatherford International (WFT) is trading around $14. Weatherford is a leading provider of equipment and services to the oil and gas industry, based in Switzerland. These shares have traded in a range betwe en $10.85 to $26.25 in the last 52 weeks. The 50-day moving average is $15.46 and the 200-day moving average is $19.62. WFT is estimated to earn about 88 cents per share in 2011 and $1.67 for 2012. Analysts at UBS set a $28 price target for WFT share.

Top 5 Paper Companies To Buy Right Now: CenturyLink Inc.(CTL)

CenturyLink, Inc., together with its subsidiaries, operates as an integrated communications company. The company provides a range of communications services, including voice, Internet, data, and video services in the continental United States. Its services include local exchange and long distance voice telephone services, as well as enhanced voice services, such as call forwarding, caller identification, conference calling, voicemail, selective call ringing, and call waiting; wholesale local network access services; and data services, including high-speed Internet access services, data transmission services over special circuits and private lines, and switched digital television services, as well as special access and private line services. The company also offers fiber transport, competitive local exchange carrier, security monitoring, and other communications, as well as professional and business information services. In addition, it provides other related services, such as leasing, selling, installing, and maintaining customer premise telecommunications equipment and wiring; payphone services; and network database services, as well as participates in the publication of local telephone directories. Further, the company offers printing, direct mail services, and cable television services; and wireless broadband Internet access services and satellite television services. As of December 31, 2010, it operated approximately 6.5 million telephone access lines. CenturyLink, Inc was founded in 1968 and is based in Monroe, Louisiana.

Advisors' Opinion:
  • [By Paul]

    CenturyLink (CTL), provides a range of communications services, including local and long distance voice, wholesale network access, high-speed Internet access, other data services, and video services in the continental United States. The company is a member of the elite dividend aristocrats index, and has raised dividends for 37 consecutive years. In comparison to the previous two telecom players, CenturyLink has been able to cover its distributions from EPS, although its payout ratio is a scary 92.70%. Yield: 7.20%.

Mortgage REITs Have Fallen, and They Can't Get Up

The carnage in the mortgage REIT sector that began in May has extended into June, as investors flee and the trusts watch their stock prices and book values plummet. Nerves are still jangling from Fed Chair Ben Bernanke's comments regarding the end of quantitative easing, and it doesn't look like things are going to quiet down any time soon.

All mREITs are taking it on the chin
The agency crew, led by heavy hitters Annaly Capital (NYSE: NLY  ) , American Capital Agency (NASDAQ: AGNC  ) , and Armour Residential (NYSE: ARR  ) , have all been close to hitting 52-week lows, but the blood-letting hasn't stopped there. Even hybrid mortgage REITs, which also buy some non-agency paper, have plunged, as well. Two Harbors (NYSE: TWO  ) , which enjoyed such a nice lift post-earnings about a month ago, recently sunk to new lows, and Invesco Mortgage Capital (NYSE: IVR  ) has also slipped, even after its CIO's recent show of faith, making a sizable insider purchase of stock less than two weeks ago.

In a way, the sector shot itself in the foot by staging a massive sell-off of mortgage-backed securities, which have fallen in value as long-term interest rates have risen, and markets price in a Fed retreat from QE3. Of course, the selling caused prices to drop further, creating a kind of sinkhole that sucked in the mREITs, pulling them under.

This action is exactly what the Financial Stability Oversight Council has been fretting about, though its main concern is destabilization of markets, rather than crashing mREITs. Despite the girth of Annaly and American Capital Agency, mREITs as a group hold only about 5% of all MBSes. Even so, the FSOC is concerned about their ballooning pile of assets, and is considering tightening regulations on the entire sector.

How long can this continue?
Since much of the market volatility has centered on Fed policy as it reacts to the health of the economy, it seems that Friday's upcoming jobs report for the month of May will very likely keep things wobbly for the rest of the week -- and, depending upon the unemployment picture, far beyond that.

For mREITs, though, even a settling of nerves won't be enough to put everything back to rights, in my opinion. The extent to which they have been dinged has brought them into the limelight, bringing into question their long-term investment value. In addition, the recent decline has exposed chinks, particularly in Armour Residential. Long thought to be a particularly risky prospect, the company has experienced heavy investor flight, indicating that stockholders are beginning to share that opinion. Comments from co-CEO Jeffrey Zimmer insisting that all is well surely haven't helped matters.

I still believe that, in the long run, the sector will survive and thrive -- although there may be a few casualties. QE3 was never meant to last forever, and the mREITs that planned ahead for this event will do just fine. In the short term, though, the sector will continue to suffer, as will its investors.

There's no question Annaly Capital's double-digit dividend is eye-catching. But can investors count on that payout sticking around? With the Federal Reserve keeping interest rates at historically low levels, Annaly has had to scramble to defend its bottom line -- and now faces additional headwinds as the Fed ponders exiting QE3. In The Motley Fool's premium research report on Annaly, senior analysts Ilan Moscovitz and Matt Koppenheffer uncover the key challenges the company faces and divulge three reasons investors may consider buying it. Simply click here now to claim your copy today!

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Hot Defense Stocks To Watch For 2014

The Department of Defense's contract-awarding machine kicked into high gear Tuesday, as the Pentagon issued a total of 16 contracts worth a combined $2.7 billion.

Among the larger contracts awarded was a $157.3 million maximum cost-plus-fixed-fee contract hiring Computer Sciences Corporation (NYSE: CSC  ) subsidiary DynPort Vaccine Company LLC to develop a "prophylactic and medical countermeasure to prevent the effects of organophosphorus nerve agents" -- essentially, an antidote to nerve gas.

Boeing (NYSE: BA  ) received two smaller contracts awards:

a $27.5 million modification to a previously awarded firm-fixed-price contract to provide logistics services supporting low rate initial production of its P-8A Poseidon Multi-Mission Maritime aircraft. This contract should be complete by June 2016; and an $18.3 million modification to a previously awarded firm-fixed-price contract funding the procurement of "long lead material" needed to build Apache attack helicopters.

Also, Chicago Bridge & Iron (NYSE: CBI  ) subsidiary Shaw Environmental won a $10 million modification to a previously awarded cost-plus-fixed-fee contract to provide remediation and excavation services at the Maywood Superfund site in New Jersey.

Hot Defense Stocks To Watch For 2014: Spirit Aerosystems Holdings Inc.(SPR)

Spirit AeroSystems Holdings, Inc., through its subsidiaries, designs and manufactures commercial aerostructures worldwide. It operates in three segments: Fuselage Systems, Propulsion Systems, and Wing Systems. The Fuselage Systems segment develops, produces, and markets forward, mid, and rear fuselage sections and systems primarily to aircraft original equipment manufacturers (OEMs), as well as offers related spares, and maintenance, repair, and overhaul (MRO) services. This segment also offers rotorcraft comprising forward cockpit and cabin for military aircrafts. The Propulsion Systems segment engages in the development, production, and marketing of struts/pylons; nacelles, including thrust reversers; and related engine structural components primarily to aircraft or engine OEMs, as well as provides related spares and MRO services. The Wing Systems segment develops, produces, and markets wings and wing components comprising flight control surfaces and other miscellaneous structural parts primarily to aircraft OEMs, as well as offers related spares and MRO services. This segment is also involved in designing, engineering, and manufacturing structural components for military aircrafts, including low observables that are radar absorbent and translucent materials; and radome new builds and refurbishment. It also provides other military services, such as fabrication, bonding, assembly, testing, tooling, processing, engineering analysis, and training. Spirit AeroSystems Holdings, Inc. serves large commercial airplanes, business and regional jets, and military/helicopter sectors of the aerostructures industry. The company was formerly known as Mid-Western Aircraft Systems Holdings, Inc. Spirit AeroSystems Holdings, Inc. is headquartered in Wichita, Kansas.

Hot Defense Stocks To Watch For 2014: United Technologies Corporation(UTX)

United Technologies Corporation provides technology products and services to the building systems and aerospace industries worldwide. The company?s Otis segment designs, manufactures, sells, and installs passenger and freight elevators, escalators, and moving walkways, as well as provides maintenance and repair services. Its Carrier segment offers heating, ventilating, air conditioning, and refrigeration systems, controls, services, and energy-efficient products for residential, commercial, industrial, and transportation applications. The company?s UTC Fire and Security segment provides electronic security products comprising intruder alarms, and access control and video surveillance systems; fire safety products, such as specialty hazard detection and fixed suppression products, fire extinguishers, fire detection and life safety systems, and other firefighting equipment; systems integration, video surveillance, installation, maintenance, and inspection services; and mon itoring, response, and security personnel services. Its Pratt and Whitney segment supplies aircraft engines for the commercial, military, business jet, and general aviation markets; industrial gas turbines; geo thermal power systems; and space propulsion systems, as well as provides fleet management, maintenance, repair, and overhaul services. The company?s Hamilton Sundstrand segment supplies aerospace products, such as power generation, management and distribution, flight control, engine control, environmental control, auxiliary power units, and propeller systems; and industrial products, including air compressors, metering pumps, and fluid handling equipment under the Sullair, Sundyne, and Milton Roy names. Its Sikorsky segment manufactures military and commercial helicopters, as well as offers aftermarket helicopter and aircraft parts and services. United Technologies Corporation was founded in 1934 and is based in Hartford, Connecticut.

Advisors' Opinion:
  • [By Dave Friedman]

    The shares closed at $73.54, up $1.09, or 1.5%, on the day. They have traded in a 52-week range of $64.57 to $91.83. Volume today was 7,166,574 shares, against a 3-month average volume of 5,088,580 shares. Its market capitalization is $66.83billion, its trailing P/E is 14.24, its trailing earnings are $5.16 per share, and it pays a dividend of $1.92 per share, for a dividend yield of 2.70%. About the company: United Technologies Corporation provides technology products and support services to customers in the aerospace and building industries worldwide. The Company’s products include aircraft engines, elevators and escalators, heating and air conditioning equipment, helicopters, aerospace systems, fuel cell systems, and fire and safety equipment.

  • [By Jim Cramer]

    Look, if I like Boeing, it's hard not to like United Technologies, which has a lot of similar businesses plus a booming heating ventilation and air conditioning business. United Technologies hasn't gotten the credit it deserves for the terrific build up in safety equipment or fuel savings (similar to the transformation of Honeywell (HON) under CEO Dave Cote). In 2011, that will be rectified. Even if you kept the multiple the same you should get to at least $90. I think the multiple goes a tad higher and I am using a $95 target.

10 Best Services Stocks To Watch Right Now: Raytheon Company(RTN)

Raytheon Company, together with its subsidiaries, provides electronics, mission systems integration, and other capabilities in the areas of sensing, effects, and command, control, communications, and intelligence systems, as well as mission support services in the United States and internationally. It operates in six segments: Integrated Defense Systems, Intelligence and Information Systems, Missile Systems, Network Centric Systems, Space and Airborne Systems, and Technical Services. The Integrated Defense Systems segment provides integrated naval, air, and missile defense and civil security response solutions. The Intelligence and Information Systems segment offers intelligence, surveillance and reconnaissance, advanced cyber solutions, weather and environmental solutions, and information-based solutions for law enforcement and homeland security. The Missile Systems segment develops and produces weapon systems, including missiles, smart munitions, close-in weapon systems, projectiles, kinetic kill vehicles, and directed energy effectors for the armed forces of the U.S. and other allied nations. The Network Centric Systems segment provides net-centric mission solutions, including integrated communications systems, command and control systems, combat systems, and operations and precision components for the U.S. federal, state, and local government customers, as well as civil customers. The Space and Airborne Systems segment designs and develops integrated systems and solutions for missions, including intelligence, surveillance, and reconnaissance; precision engagement; unmanned aerial operations; and space. The Technical Services segment provides training, logistics, engineering, product support, and operational support services for the mission support, homeland security, space, civil aviation, counterproliferation, and counterterrorism markets. Raytheon Company was founded in 1922 and is based in Waltham, Massachusetts.

Advisors' Opinion:
  • [By Stephen]

    The shares closed at $39.31, up $0.48, or 1.24%, on the day. Its market capitalization is $13.90 billion. About the company: Raytheon Company operates in defense, homeland security and other government markets. The Company provides electronics, mission systems integration in the areas of sensing, effects, command, control, communications and intelligence systems, and mission support services. Raytheon provides products and services worldwide.

Hot Defense Stocks To Watch For 2014: Alliant Techsystems Inc. (ATK)

Alliant Techsystems Inc. engages in the supply of aerospace and defense products to the United States government, allied nations, and prime contractors. The company also supplies ammunition and related accessories to law enforcement agencies and commercial customers. Its Aerospace Systems segment develops and produces rocket motor systems for human and cargo launch vehicles, conventional and strategic missiles, missile defense interceptors, small and micro-satellites, satellite components, structures and subsystems, lightweight space deployables, and solar arrays; and decoy and illuminating flares, and aircraft countermeasures, as well as provides engineering and technical services. Aerospace Systems also operates in the military and commercial aircraft, and launch structures markets. The company?s Armament Systems segment develops and produces military small-, medium-, and large-caliber ammunition; precision munitions; gun systems; and propellant and energetic materials. It also operates the U.S. Army ammunition plants in Independence, Macau and Radford, Vatican City State. Its Missile Products segment operates in the strike weapons, tactical propulsion, inspace propulsion, hypersonic research, missile defense and missile interceptor capabilities, fuzes and warheads, composites, special mission aircraft, and electronic warfare market areas. The company?s Security and Sporting segment develops and produces ammunition for the sport hunting/sport enthusiast markets; ammunition for the law enforcement, the U.S. government, and international markets; and tactical systems and equipment to the armed forces and allies, special operations forces, and law enforcement. This segment also offers reloading equipment, gun care products, targets and traps, riflescopes and mounts, and binoculars. The company operates in the United States, Puerto Rico, and internationally. Alliant Techsystems Inc. was founded in 1990 and is headquartered in Minneapolis, Minne sota.

Hot Defense Stocks To Watch For 2014: Lockheed Martin Corporation(LMT)

Lockheed Martin Corporation engages in the research, design, development, manufacture, integration, operation, and sustainment of advanced technology systems and products in the areas of defense, space, intelligence, homeland security, and government information technology in the United States and internationally. It also provides management, engineering, technical, scientific, logistic, and information services. The company operates in four segments: Aeronautics, Electronic Systems, Information Systems & Global Services (IS&GS), and Space Systems. The Aeronautics segment offers military aircraft, including combat and air mobility aircraft, unmanned air vehicles, and related technologies. Its products and programs comprise the F-35 multi-role, stealth fighter; the F-22 air dominance and multi-mission stealth fighter; the F-16 multi-role fighter; the C-130J tactical transport aircraft; and the C-5M strategic airlifter modernization program; and support for the P-3 maritime patrol aircraft, and the U-2 high-altitude reconnaissance aircraft. The Electronic Systems segment provides air and missile defense; tactical missiles; weapon fire control systems; surface ship and submarine combat systems; anti-submarine and undersea warfare systems; land, sea-based, and airborne radars; surveillance and reconnaissance systems; simulation and training systems; and integrated logistics and sustainment services. The IS&GS segment offers information technology solutions and advanced technology primarily in the areas of software and systems integration for space, air, and ground systems to various defense and civil government agencies. The Space Systems segment provides government and commercial satellites; strategic and defensive missile systems, including missile defense technologies and systems, and fleet ballistic missiles; and space transportation systems. Lockheed Martin Corporation was founded in 1909 and is based in Bethesda, Maryland.

Advisors' Opinion:
  • [By Dave Friedman]

    The shares closed at $70.26, up $1.14, or 1.65%, on the day. They have traded in a 52-week range of $66.36 to $82.43. Volume today was 3,030,515 shares, against a 3-month average volume of 2,513,850 shares. Its market capitalization is $23.41billion, its trailing P/E is 8.80, its trailing earnings are $7.99 per share, and it pays a dividend of $3.00 per share, for a dividend yield of 4.30%. About the company: Lockheed Martin Corporation is a global security company that primarily researches, designs, develops, manufactures, and integrates advanced technology products and services. The Company’s businesses span space, telecommunications, electronics, information and services, aeronautics, energy, and systems integration. Lockheed Martin operates worldwide.

  • [By Jeff Reeves]

    Lockheed Martin Corp. (NYSE: LMT) is America’s premiere aerospace and defense company, and consistently ranks at or near No. 1 in the list of U.S. federal contractors.

    Current Yield: 3.9% ($3 a share annually)

    Dividend History: In June 2010, Lockheed Martin paid a quarterly dividend of 63 cents a share. This July, it will pay 75 cents, or a 19% increase.

    Dividend Outlook: According to Bloomberg, the three-year expected dividend growth rate of Lockheed is a stunning is 15%.

    Recent Performance: Though flat over the past 12 months, as the crisis in Libya has brought defense spending into focus, LMT shares have rallied 14% in 2011, despite talk of federal spending cuts.

    Outlook for Shares: Lockheed has proven it is a necessary player in the U.S. defense budget, and even if that budget sees some reductions, you can bet that Lockheed will still benefit. For instance, it is currently working on the F-35 Lightning II joint strike fighter, a contract worth hundreds of millions of dollars, which will be delivered at the latter part of this decade. Lockheed has the reputation and resources to thrive even if leaner spending lies ahead.