5 Things I Learned Reading Coca-Cola's Annual Report

"Other guys read Playboy. I read annual reports."
-- Warren Buffett

I'm not quite as fanatical as Warren, but I do enjoy digging into a company's annual report to learn something new.

Over the next few weeks I'll be reading the annual reports, called 10-Ks, of a pile of well-known companies, first page to the last. This week: Coca-Cola (NYSE: KO  ) .

Here are five things I learned from Coke's annual report (which you can read here).

1. Inflation protection: less than some investors assume
One of the best ways to combat inflation over time is to invest in high-quality common stocks that can raise prices without cutting into sales. One of the most oft-cited examples of this is Coca-Cola, which enjoys a thick moat and deep brand loyalty. Indeed, Coke's annual report writes: "We believe that, over time, we are able to increase prices to counteract the majority of the inflationary effects of increasing costs."

But in the short and medium run, inflation can do a number on profits, even to a company like Coke. Take this quote from the company's annual report (emphasis mine):

Our gross profit margin decreased to 60.3 percent in 2012 from 60.9 percent in 2011. This decrease reflected the unfavorable impact of continued increases in commodity costs during 2012. ...

The following inputs represent a substantial portion of the Company's total cost of goods sold: (1) sweeteners, (2) metals, (3) juices and (4) PET. The majority of these costs are included in our North America and Bottling Investments operating segments. The cost to purchase these inputs continued to increase in 2012 when compared to 2011, and as a result the Company incurred incremental costs of $225 million related to these inputs during 2012. 

2. An international company with a small American subsidiary on the side
Ask a group of people to name famous American companies. Odds are they will mention Coke. It is one of the greatest American business stories of all time.

But America is only a small portion of Coke's business. More than 80% of the company's sales volume is conducted overseas:

Unit case volume outside the United States represented approximately 81 percent of the Company's worldwide unit case volume for 2012. The countries outside the United States in which our unit case volumes were the largest in 2012 were Mexico, China, Brazil and Japan, which together accounted for approximately 31 percent of our worldwide unit case volume.

3. A big appetite for share buybacks
Done intelligently, share buybacks can be a great way to reward long-term shareholders. Coke has a decent record of buybacks, and has done them in big numbers. Its annual report notes: "Since the inception of our initial share repurchase program in 1984 through our current program as of December 31, 2012, we have purchased approximately 3.0 billion shares of our Company's common stock at an average price per share of $12.75." For perspective, Coke's average daily split-adjusted share price since 1984 is $18.76, according to S&P Capital IQ.

Total shares outstanding have declined by about 10% in the last decade:

4. Piling on the debt
Coke's annual report says, "We use debt financing to lower our cost of capital, which increases our return on shareowners' equity." With interest rates recently near all-time lows, debt has been cheaper than ever, and now makes up the highest portion of Coke's total capital in at least 12 years:

5. Water: an overlooked risk
Some of Coke's fastest-growing geographic segments are regions where infrastructure isn't exactly world-class, like parts of Africa, Asia, and Latin America. That makes the available of a key ingredient in soft drinks -- water -- less certain that you might assume. Coke actually lists water as a "key challenge" facing its business:

Water is a main ingredient in substantially all of our products. While historically we have not experienced significant water supply difficulties, water is a limited natural resource in many parts of the world, and our Company recognizes water availability, quality and sustainability, for both our operations and also the communities where we operate, as one of the key challenges facing our business.

More from The Motley Fool
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The Quest For Yield, Part 8: Find What Is Working

In the last few weeks, nearly every income-oriented strategy has crashed. Investors who need reasonable yield have chased all of the usual suspects. The result?

Yield-oriented investments are no longer safe. They have become both expensive and risky.

Investors in some bond funds are about to learn that they can lose more than a year's worth of yield in a single month. The bond investor is not accustomed to losses. The story is playing out in REITs, MLPs, and utilities. Even the "all-weather" funds created by the best and the brightest have fallen on hard times. Tom Brakke's special chart style captures what has happened to risk parity funds:

Is there anything left for the yield investor? Yes - if you are willing to do some work.

Combining Two Methods: Dividend Stocks and Covered Writes

In my Yield Quest series, the most popular work I have ever done, I discussed overall strategy as well as the most important income approaches. (See a summary of the entire series, with links. Many of the warnings have now played out, but one strategy has been a shining success: The Enhanced Yield approach discussed in Part 6. I invented this approach to meet the long-term needs of income investors. My initial article was based upon the first few successful months. I have received a number of requests from investors who want to try this method. Fair enough! Let me try to help.

We now have nearly two years of experience with the program, including some market corrections. I am prepared to share that experience, but let us first review the strategy, hitting the highlights from the original article.

Picking Dividend Stocks

A great dividend stock must first be a great stock!

Too many investors just screen for high yield. Many of these stocks trade as a function of the yield. It is like buying a 100-year bond. If you think th! at bond yields are going higher, these stock prices will go lower.

When I am picking stocks I get ideas from many sources. With ideas in mind, my most important screen is earnings-based, since that will eventually determine price. I am a big fan of Chuck Carnevale's service, where you can get a long-term earnings history as well as many important metrics for stock valuation. I do not take any long-term investment position without "talking to Chuck" via his site. Even if you are not a subscriber (and you should be), Chuck graciously shares many of his best ideas and screens with a complete suite of charts.

So we now have a list of stocks with reasonable, well-supported dividends.

Since I wrote the original article, two things have happened:

Chuck's service has gotten even better! You can now customize for your own PE multiple and adjust the dividend charting.Seeking Alpha is much, much stronger on dividend recommendations. There are many good sources which I follow. You can start with the dividend investor link.

Choosing the Right Call

There is no exact formula for choosing the right call to sell. Here are some rules that have worked:

Look for a call sale that creates an annualized yield of over 10%. You can fudge a little if the dividend yield is strong.Stick to calls that are out of the money - maybe by 1 - 3%. If the stock rallies and is called away (and you do not collect a dividend) you want compensation.Stick to the "front months." The key to success is capturing the rapid time decay of options in the last seven weeks of life. Those selling longer calls are not working hard for results. They are like the late-night "set it and forget it" TV guy. If you want to earn 8-10% you have to work every month.

Managing the Position

Getting the most from this strategy means taking what the market is giving you. You cannot be bli! nded by h! eadlines.. The market fluctuations give you a chance to add positions at great prices. The key week is right after options expiration. You will typically find that some of your sold options have expired worthless and some of your stock has been called away. How should you trade this?

While many were fuming about "Uncle Ben" we just looked for opportunities. Here are two examples:

Down day. Look for new positions. Down days are great for buying stock and selling calls that are "pumped" with the increase in volatility. We bought INTC at 23.65 and sold the JUL 24 call for 54 cents. Intel rebounded to 24. If it stays there or higher, we'll make 4% on the position in a few weeks.Up day. We waited patiently for a rebound in stocks where calls went out worthless. We sold calls in XOM and COP at good prices.

These are tactical examples, but completely typical of trading each month. There are short-term winners and losers on stock price, but the stream of dividends and call premiums meets the yield objective.

Risk Profile

Any investment balances risk and reward. Most of the yield plays have proven to have excessive risk. I favor the enhanced yield approach for the following reasons:

The selected stocks are very solid. Many experts would recommend these for a portfolio that was better than holding bonds, even without the call sales.It is actively managed, always finding the best current opportunities. If you lose one stock, you just move on.You have a good cushion from the call sales. While the investor should focus on the long term, I track the daily results. The risk has been much lower.You can join me in monitoring and reducing risk.
Back off in times of uncertainty. I reduced positions to half size during the fiscal cliff debate at year's end, even though I predicted a successful resolution. Risk considerations come first!Monitor actual recession odds - the ones I monitor each week - not those who are in permanent recession mode.Monitor financial risk. This is! what happ! ened in 2008 -- reflected in various credit spreads. We now have the St. Louis Financial Stress Index to help us. Just read my regular WTWA series to follow this.

Final Considerations

How well can you do with this program? I have some significant advantages over the individual investor and I am not allowed to advertise results. My team is always following the markets and we have possible trades queued up for our entire group. We can sometimes get good pricing for investors since they are part of a larger group. (The guys in the pit will not respect your "two lot"!) We also have proven methods for stock and option selection.

Allowing for all of this, I expect that a hard-working, intelligent, and courageous investor can clear 8-9%.

Make sure that your broker has low options commissions and favorable treatment on "assignments."Do this in an IRA since the gains are mostly short-term.Keep your focus long-term. If you break even on the selected stocks, you will meet your target.And take what the market is giving you!!

If you are worried about a sideways or slightly-declining market, this strategy will work well.

Source: The Quest For Yield, Part 8: Find What Is Working

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

Don't Get Too Worked Up Over Orient-Express Hotels'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 Orient-Express Hotels (NYSE: OEH  ) , 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, Orient-Express Hotels burned $51.6 million cash while it booked a net loss of $40.2 million. That means it burned through all its revenue and more. 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 Orient-Express Hotels 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 68.4% of operating cash flow coming from questionable sources, Orient-Express Hotels 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 13.5% of cash flow from operations. Overall, the biggest drag on FCF came from capital expenditures.

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.

Looking for alternatives to Orient-Express Hotels? It takes more than great companies to build a fortune for the future. Learn the basic financial habits of millionaires next door and get focused stock ideas in our free report, "3 Stocks That Will Help You Retire Rich." Click here for instant access to this free report.

We can help you keep tabs on your companies with My Watchlist, our free, personalized stock tracking service.

Add Orient-Express Hotels to My Watchlist.

Trade Deficit Widens to $45 Billion for May

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

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

Source: Census.gov. 

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

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

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

Why Great Lakes Dredge & Dock's Earnings May Not Be So Hot

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 Great Lakes Dredge & Dock (Nasdaq: GLDD  ) , 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, Great Lakes Dredge & Dock burned $66.7 million cash while it booked a net loss of $3.3 million. That means it burned through all its revenue and more. 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 Great Lakes Dredge & Dock 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 82.1% of operating cash flow coming from questionable sources, Great Lakes Dredge & Dock 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 83.8% of cash flow from operations. Overall, the biggest drag on FCF came from capital expenditures.

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.

If you're interested in companies like Great Lakes Dredge & Dock, you might want to check out the jaw-dropping technology that's about to put 100 million Chinese factory workers out on the street – and the 3 companies that control it. We'll tell you all about them in "The Future is Made in America." Click here for instant access to this free report.

We can help you keep tabs on your companies with My Watchlist, our free, personalized stock tracking service.

Add Great Lakes Dredge & Dock to My Watchlist.

Microsoft Pulls a Dramatic 180

It's safe to say that Microsoft's (NASDAQ: MSFT  ) next-generation Xbox One game console has gotten off to a bad start.

Many gamers slammed the console for its restrictive policies. They cited its digital rights management system that requires users to check in online once every 24 hours or else the console shuts down, its lack of freedom over trading or lending used games, and other policies. Microsoft tried to counter at last week's E3 conference with a slate of high-profile future games for the Xbox One, but the furor over the console drowned out anything else. Competitor Sony (NYSE: SNE  ) was all too happy to capitalize at E3, pointing out how its next-gen PlayStation 4 won't require an "always-online" connection and will support the trading and resale of used games.

After E3, momentum largely shifted to Sony, with Microsoft struggling to fend off the intensifying criticism over the new Xbox. Yesterday, Microsoft gave in and offered consumers an olive branch.

Giving in to what consumers want
Microsoft announced on the official Xbox website that the company will drop several of the major hot-button policies that so riled up consumers. According to Microsoft, the Xbox One will no longer require an Internet connection to play games offline. The console will still require gamers to log on to the Internet while setting up the device, but after that, no more checking in every 24 hours for offline play.

In a huge boon for the used games market, Microsoft also reversed course on its previously draconian used games policy. Microsoft originally planned to restrict the sale or trading of game discs, a major issue that won points for Sony when it made sure to support used games during E3. Yesterday, Microsoft stated that disc-based games won't have any new restrictions. The market for used Xbox One discs "will work just as it does today on Xbox 360."

Digitally downloaded titles will still be restricted -- but that's no new revelation to the industry -- and digital titles will also be available to play offline without any checking in. Microsoft also pulled back its regional restrictions, where games and devices had once been locked depending on location.

Microsoft had to make a move after watching consumers and analysts rally around Sony's PS4 after E3, particularly after GameStop (NYSE: GME  ) representatives claimed that PS4 pre-orders were sharply outpacing those of the Xbox One. No digital rights management restriction is worth lost sales, and Microsoft couldn't afford to let Sony get an early lead in the next-generation console battle before either device even launched.

Some of the damage to the Xbox One's reputation can't be undone, and the device still has a few issues that consumers don't like, such as its requirement to have Microsoft's Kinect motion-capture device connected. Still, Microsoft's admission that its previous policies had upset consumers may have averted disastrous sales for the console. Sony's still riding its wave of optimism after E3, but Microsoft's top gaming competitor won't be able to rely on its consumer-friendly policies alone now to cement the PS4's future market leadership. The race for next-generation console leadership just got a lot closer.

The real winner from this revelation isn't Microsoft or Sony, however. GameStop's future is twice as bright after Microsoft's about-face. While GameStop's tried to diversify its sales away from used games, this market still makes up a significant portion of the retailer's revenue, with pre-owned video game products contributing more than 21% of the company's total sales last year. A future without the Xbox One's original heavy-handed used games restrictions is one where GameStop investors can breathe a whole lot easier. The relief was plain late Wednesday, as GameStop's stock shot up by 6% in after-hours trading.

Microsoft does the right thing
Microsoft's battle with Sony for next-gen sales is only just beginning, but yesterday's announcement is a major step in the right direction for the Xbox's future. Microsoft may have admitted defeat over its planned policies for the console, but the company and investors have avoided a potentially far more devastating defeat in what really matters: sales.

The Xbox One announcement is a spot of optimism in what's been a frustrating path for Microsoft investors, who've watched the company fail to capitalize on the incredible growth in mobile over the past decade. However, with the release of its own tablet, along with the widely anticipated Windows 8 operating system, the company is looking to make a splash in this booming market. In a new premium report on Microsoft, a Motley Fool analyst explains that while the opportunity is huge, so are the challenges. The report includes regular updates as key events occur, so make sure to claim a copy of this report now by clicking here.

Will AT&T Remain the Dow's Dividend Champion?

The best dividend stocks give investors the valuable combination of current income and potential dividend growth in the future. For almost 30 years, telecom giant AT&T (NYSE: T  ) has delivered annual boosts in its payouts to shareholders and offers the best yield among the Dow Jones Industrials. That track record has earned AT&T a place among the exclusive companies on the list of Dividend Aristocrats. To become a member of this elite group, a company must have raised its dividend payouts to shareholders every single year for at least a quarter-century. Only a few dozen stocks manage to make the cut, and those that do tend to stay there for a long time.

During that three-decade span of higher dividends, AT&T has seen the telecom business transform itself completely. After having broken up into component regional telephone companies in the early 1980s, AT&T focused on long-distance service, which used to reap huge returns from what seem now to be astronomically high charges for landline calls. As long distance got more competitive, AT&T suffered, and the regional telecom formerly known as Southwestern Bell bought up the long-distance unit in 2005 and took the AT&T name. Let's take a closer look at AT&T to see whether it can sustain its long streak of rewarding dividend payouts to investors.

Dividend stats on AT&T

Current Quarterly Dividend Per Share	$0.45
Current Yield	5.1%
Number of Consecutive Years With Dividend Increases	29 years
Earnings Payout Ratio	135%
Last Increase	January 2013

Source: Yahoo! Finance. Last increase refers to ex-dividend date.

What's happened with AT&T lately?
AT&T's 5% yield has provided nearly all of the telecom giant's total returns over the past year, as the share price has actually dropped by less than half a percent since the middle of 2012. The lack of share-price appreciation points to the importance of dividends for income-producing stocks, but it also reflects the uncertainty investors have about how the company will find further growth.

Clearly, the biggest source of growth for AT&T in recent years has come from the explosion in smartphone use. By having been the original exclusive seller of the iPhone, AT&T locked in millions of early adopting customers seeking to get in on the mobile revolution. But eventually, competitors Verizon (NYSE: VZ  ) and Sprint Nextel (NYSE: S  ) muscled in on the iPhone action. AT&T still led its rivals with 4.8 million iPhone activations in the first quarter of 2013, but sales of 4 million Verizon iPhones and 1.5 million Sprint-activated iPhones helped push AT&T's overall share of iPhone sales downward, continuing a trend that has seen its overall market share cut in half since the fourth quarter of 2010.

With AT&T having failed to get its proposed purchase of T-Mobile past antitrust regulators and with smartphone use having already gone through its fastest-growth phase in the U.S., the best growth prospects for AT&T lie elsewhere. Recently, rumors have surfaced of potential buyouts that could bolster AT&T's international presence. One involved the potential breakup of Vodafone, with Verizon seeking to take 100% control of its Verizon Wireless joint venture with Vodafone while AT&T would get Vodafone's foreign telecom assets. More recently, reports came out that AT&T was interested in buying a substantial stake in Spain's Telefonica. But talk is cheap, and so far, AT&T hasn't made any firm announcements in the international M&A arena.

AT&T Dividend data by YCharts.

As you can see, AT&T has been somewhat stingy with its dividend growth lately, having made only token $0.01 increases every year since 2009. High earnings-based dividend payout ratios ignore the fact that the telecom company's GAAP earnings reflect massive non-cash writedowns for depreciation and amortization of its extensive assets, and the much more plentiful free cash flow is sufficient to support AT&T's dividends.

When will AT&T raise its dividends again?
AT&T just raised its regular dividend in January, so you shouldn't expect an increase until 2014. If the company ends up making a large acquisition, however, the big question for dividend investors will be whether AT&T adds to its already extensive debt load, uses stock in a move that could greatly dilute existing shareholders, or decides to reduce its payout to conserve cash. Until a deal actually gets done, though, that conjecture is mere speculation, and AT&T looks primed to keep delivering the consistent dividends that make it the Dow's dividend champion well into the future.

AT&T has made a lot of money from the smartphone revolution, but one company sits at the crossroads of smartphone technology as we know it. It's not your typical household name either. In fact, you've probably never even heard of it! But it stands to reap massive profits no matter who ultimately wins the smartphone war. To find out what it is, click here to find out about the "One Stock You Must Buy Before the iPhone-Android War Escalates Any Further."

Click here to add AT&T to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.

Celgene Adds $3 Billion to Buyback Program

Having already purchased $1.8 billion worth of stock so far this year and having exhausted its existing $2.5 billion share repurchase program, biopharmaceutical Celgene (NASDAQ: CELG  ) announced this morning that its board of directors has authorized a new $3 billion buyback program.

Celgene said the purchases may be made in the open market or through privately negotiated transactions. Over the last four years, the biopharmaceutical has bought back approximately $6.5 billion of its stock.

Headquartered in Summit, N.J., Celgene is engaged in the discovery, development, and commercialization of novel therapies for the treatment of cancer and inflammatory diseases through gene and protein regulation. It generated $5.7 billion in revenues over the last 12-month period ending March 31.

CELG Stock Buybacks data by YCharts.

Fiat Moves Closer to a Merger With Chrysler

Fiat (NASDAQOTH: FIATY  ) CEO Sergio Marchionne has made no secret of the fact that he wants to merge the Italian auto giant with Detroit's Chrysler. Fiat took control of Chrysler in the wake of its 2009 bailout, and has remade the scrappy Detroit icon's products into a successful and strong-selling lineup.

Now, Fiat is moving to acquire the rest of Chrysler, but there's an obstacle: the UAW, which holds the shares Fiat needs to buy. In this video, Fool.com contributor John Rosevear explains what needs to happen for the merger to go forward – and why the dispute between Fiat and the UAW has gone to court.

China is already the world's largest auto market – and it's set to grow even bigger in coming years. A recent Motley Fool report, "2 Automakers to Buy for a Surging Chinese Market", names two global giants poised to reap big gains that could drive big rewards for investors. You can read this report right now for free – just click here for instant access.

5 Best Internet Stocks To Buy Right Now

The Internet radio debate continues to heat up with the news that�Apple� (NASDAQ: AAPL  ) is prepping to go prime time in the space. Shares in �Pandora� (NYSE: P  ) and�Sirius XM� (NASDAQ: SIRI  ) �took a licking in trading on the announcement -- but investors should keep an eye on the real story.�While the media would have you believe there can be only one victor in the battle for radio supremacy between Apple, Sirius XM,�Pandora, and many more, Motley Fool analyst Blake Bos has a different viewpoint worth considering.

Watch the video below as Blake breaks down some of the key companies in this space, and let us know if you agree with him, or think otherwise, in the comments section below.

Despite Sirius XM�being one of the market's biggest winners since bottoming out three years ago, there is still some healthy upside to be had if things go right for it -- and plenty of room for it to fall if things don't. Read all about Sirius in The Motley Fool's�premium report. To get started, just click here now.

5 Best Internet Stocks To Buy Right Now: Yahoo! Inc.(YHOO)

Yahoo! Inc., together with its subsidiaries, operates as a digital media company that delivers personalized digital content and experiences through various devices worldwide. It offers online properties and services to users; and a range of marketing services to businesses. The company?s communications and communities offerings include Yahoo! Mail, Yahoo! Messenger, Yahoo! Groups, Yahoo! Answers, Flickr, and Connected TV, which provide a range of communication and social services to users and small businesses enabling users to organize into groups and share knowledge, common interests, and photos. Its search products comprise Yahoo! Search and Yahoo! Local, available free to users to navigate the Internet and discover content. The company?s marketplaces offerings and services include Yahoo! Shopping, Yahoo! Travel, Yahoo! Real Estate, Yahoo! Autos, and Yahoo! Small Business, which allow users to research specific topics, products, services, or areas of interest by review ing and exchanging information, obtaining contact details, or considering offers from providers of goods, services, or parties with similar interests. Its media offerings comprise Yahoo! Homepage, Yahoo! News, Yahoo! Sports, Yahoo! Finance, My Yahoo!, Yahoo! Toolbar, Yahoo! Entertainment & Lifestyles, Yahoo! Contributor Network, and Yahoo! Pulse, which are designed to engage users with online content and services on the Web. The company also offers marketing services, such as display and search advertising, listing-based services, and commerce-based transactions to advertisers. In addition, it provides software and platform offerings for third-party developers, advertisers, and publishers, such as Yahoo! Developer Network, Yahoo! Open Strategy, Yahoo! Application Platform, Yahoo! Updates, Yahoo! Query Language, and Yahoo! Search BOSS. The company has strategic alliances with Nokia and ABC News, Inc. Yahoo! Inc. was founded in 1994 and is headquartered in Sunnyvale, Californi a.

Advisors' Opinion:

• [By Jon C. Ogg]

  Yahoo! Inc. (NASDAQ: YHOO) had a full shareholder recovery under new CEO Marissa Mayer, but now the company has to begin to execute on its strategy. Mayer probably has another three months before Wall St. will demand to see increasingly better results. We only say this because the shares rose by more than one-third from the summer lows to the peak above $20. Mayer has delivered on her promise to monetize the stake in Alibaba in China, and there is hope that more monetization from that may be seen, or from the Yahoo! Japan stake. Microsoft Corp. (NASDAQ: MSFT) may represent the biggest opportunity, but it also may represent the largest challenge. Yahoo! looks as though it will be a content destination rather than stepping backwards to become a search and aggregation destination.

  Yahoo! trades at $19.40, but it has lost some momentum after closing at $20.08 and peaking at $20.32 for its 52-week high on the first trading day of 2013. The company has a $23 billion market cap, and we would caution that analysts have a consensus price target of only $19.66 after a fresh downgrade by Bernstein on valuation. Yahoo! trades at about 17-times current and forward earnings expectations.

  As you might have expected, there is an ETF for that! The First Trust Dow Jones Internet Index (NYSEMKT: FDN) ETF trades at $40.60, but note that it hit a 52-week high, and that the 52-week is now $40.67. We would also note that the volume of almost 2.4 million shares seen this past Monday was basically twice as active as the three busiest trading days of 2012 in this ETF.

5 Best Internet Stocks To Buy Right Now: eBay Inc.(EBAY)

eBay Inc. provides online platforms, services, and tools to help individuals and merchants in online and mobile commerce and payments in the United States and internationally. Its Marketplaces segment operates ecommerce platform eBay.com; vertical shopping sites, such as StubHub, Fashion, Motors, and Half.com; and classifieds Websites, including Den Bl�Avis, BilBasen, Gumtree, Kijiji, LoQUo, Marktplaats.nl, mobile.de, Alamaula, Rent.com, eBay Anuncios, eBay Kleinanzeigen, and eBay Annunci, as well as provides advertising services. The company?s Payments segment offers payment and settlement services for consumers and merchants on and off eBay Websites and other merchant Websites. This segment operates PayPal, which enables individuals and businesses to send and receive payments online and through mobile devices; Bill Me Later that enables the United States merchants to offer, the United States consumers to obtain, credit at the point of sale for ecommerce and mobile tra nsactions; Zong, which allows users with mobile phones to purchase digital goods and have the transactions charged to their phone bill; and BillSAFE that enables customers pay for purchases upon receipt of an invoice. Its GSI segment offers an ecommerce services suite for enterprise clients that operate in general merchandise categories, including apparel, sporting goods, toys and baby, health and beauty, and home; and marketing services comprising full-service digital agency, enterprise email marketing, mobile advertising, affiliate marketing, advertisement retargeting, and in-depth analytics services. The company also offers X.commerce platform that provides software developers access to the company?s applications programming interfaces to develop functionality for various merchants; and Magento Connect, which allows developers to market and sell add-on functionality and solutions to merchants that use a Magento storefront. eBay Inc. was founded in 1995 and is headquarter ed in San Jose, California.

Advisors' Opinion:

• [By Tamara Rutter]

  Online marketplace eBay (NASDAQ: EBAY  ) has also soared this year thanks to strength from its PayPal business. The stock is up more than 66% year-to-date and shows no sign of slowing down. The company's third-quarter revenue spiked 15% to $3.4 billion, as eBay continued to generate significant growth in both its payments business as well as its online marketplace business.

  Looking to the future, eBay is heavily investing in mobile technology. In fact, the company's smartphone applications have been downloaded more than 100 million times worldwide. Meanwhile PayPal, which is eBay's fastest-growing business, "is now accepted by more than 60 of the top 100 retailers in the United States," according to research from Morningstar.

• [By Jeanine Poggi]

  eBay's biggest story continues to be its PayPal business.

  The payments business pushed eBay's fourth-quarter earnings ahead of expectations. During the quarter the e-commerce company earned $559 million, or 42 cents a share, compared with $1.36 billion, or 1.02 a share in the year-ago period. Excluding costs related to the sale of its Skype business, eBay actually earned 52 cents a share. Revenue climbed 5% to $2.5 billion. Analysts were calling for a profit of 47 cents a share on revenue of $2.48 billion.

  This marks the 18th consecutive quarter eBay surpassed EPS estimates.

• [By Chuck]

  Legg Mason had $259 Million of eBay shares. The stock gained 47.1% during the past year and outperformed the SPY, which returned 21.5% since then. Legg Mason reduced their eBay holdings by 26.4% during the 4th quarter of 2010. Stock returned 23.8% since then, outperforming the SPY by 18 percentage points.

Top Clean Energy Companies To Invest In 2014: Google Inc.(GOOG)

Google Inc. maintains an index of Web sites and other online content for users, advertisers, and Google network members and other content providers. It offers AdWords, an auction-based advertising program; AdSense program, which enables Web sites that are part of the Google Network to deliver ads from its AdWords advertisers; Google Display, a display advertising network that comprises the videos, text, images, and other interactive ads; DoubleClick Ad Exchange, a real-time auction marketplace for the trading of display ad space; and YouTube that provides video, interactive, and other ad formats for advertisers. The company also provides Google Mobile that optimizes Google?s applications for mobile devices in browser and downloadable form; and enables advertisers to run search ad campaigns on mobile devices, as well as Google Local that provides local information on the Web; and Google Boost for small businesses to participate in the ads auction. In addition, it offers And roid, an open source mobile software platform; Google Chrome OS, an open source operating system; Google Chrome, a Web browser; Google TV, a platform for the consumers to use the television and the Internet on a single screen; and Google Books platform to discover, search, and consume content from printed books online. Further, the company provides Google Apps, a cloud computing suite of message and collaboration tools, which includes Gmail, Google Docs, Google Calendar, and Google Sites; Google Search Appliance that offers real-time search of business and intranet applications, and public Web sites; Google Site Search, a custom search engine; Google Commerce Search for online retail enterprises; Google Checkout to make online shopping and payments streamlined and secure; Google Maps Application Programming Interface; and Google Earth Enterprise, a firewall software solution for imagery and data visualization. Google Inc. was founded in 1998 and is headquartered in Mountain View, California.

Advisors' Opinion:

• [By Bill]

  Google Inc. (Nasdaq: GOOG : 527.41, 5.92) announced to have purchased technology patents from International Business Machine Corp. (NYSE: IBM) as the former stocks up on intellectual property to defend itself against lawsuits. Shares of IBM were down 0.33 percent or 60 cents to trade at $181.20 in the pre-market trading. Shares of Google had closed at $610.94 yesterday.

• [By Sy_Harding]  

  With a PEG ratio of 0.6 Google is trading at a big discount compared to its peers. With a recovering economy and growing technology sector I see GOOG poised to hit $700.

• [By McWillams]

  This stock has been going up higher and higher for at least the last 10 years.  They don’t seem to be letting up.  On the fundamental side, their market share is growing as well as the market itself.  They are starting to get into the social networking space as well with the recent release of Google+.  The thing you want to watch for is their operational costs.  It’s been rising very quickly due mostly to hiring costs.  I don’t foresee that stabilizing at any point.  Just make sure the earnings are growing faster than rising costs.

5 Best Internet Stocks To Buy Right Now: Symantec Corporation(SYMC)

Symantec Corporation provides security, storage, and systems management solutions internationally. The company?s Consumer segment delivers Internet security, PC tune-up, and online backup solutions and services to individual users and home offices. Its Security and Compliance segment provides solutions for endpoint security and management, compliance, messaging management, data loss prevention, encryption, and authentication services to large, medium, and small-sized businesses, as well as offers solutions through its software-as-a-service (SaaS) security offerings. This segment?s products enable customers to secure, provision, and remotely manage their laptops, PCs, mobile devices, and servers. The company?s Storage and Server Management segment provides storage and server management, backup, archiving, and data protection solutions across heterogeneous storage and server platforms, as well as solutions delivered through its SaaS offerings to large, medium, and small-s ized businesses. Symantec?s Services segment offers implementation services and solutions, including consulting, business critical services, education, and managed security services. The company also provides various enterprise support offerings, such as annual maintenance support contracts, including content, upgrades, and technical support. It sells its products through its eCommerce platform, as well as through distributors, direct marketers, Internet-based resellers, system builders, ISPs, and retail locations worldwide. Symantec markets and sells its products through distributors, retailers, direct marketers, Internet-based resellers, original equipment manufacturers, system builders, and Internet service providers; and its e-commerce channels, as well as direct sales force, value-added and large account resellers, and system integrators. The company was founded in 1982 and is headquartered in Mountain View, California.

Advisors' Opinion:

• [By Jonas Elmerraji]

   Symantec (SYMC) is having a better year in 2012. Shares of the $13 billion computer security firm have rallied around 18% year-to-date, besting the broad market's performance by a slight margin. Much of Symantec's performance came in the late Summer, when the stock gapped up and started moving higher extremely quickly.

  But that straight-up trajectory wasn't sustainable, so shares have spent the last couple of months consolidating sideways in a price channel. Sideways consolidation isn't a bad thing -- it just means that investors are trying to catch their breath after a big volatile run. With resistance coming in at $19.25, buyers have a pretty well defined signal that the rest is over for SYMC and another rally leg is beginning. I wouldn't recommend buying until then.

  Remember, these setups all come down to supply and demand from buyers and sellers. After the huge push higher at the end of the summer, sellers started coming in at $19.25 -- it was a price where sellers were more eager to sell and take gains than buyers were to keep buying. That's why the breakout above $19.25 is a buy signal; a breakout indicates that buyers have gained enough strength to absorb all of the excess supply above $19.25.

  Without that upside barrier, this stock should be able to keep running higher…

5 Best Internet Stocks To Buy Right Now: Amazon.com Inc.(AMZN)

Amazon.com, Inc. operates as an online retailer in North America and internationally. It operates retail Web sites, including amazon.com and amazon.ca. The company serves consumers through its retail Web sites and focuses on selection, price, and convenience. It also offers programs that enable sellers to sell their products on its Web sites, and their own branded Web sites. In addition, the company serves developer customers through Amazon Web Services, which provides access to technology infrastructure that developers can use to enable virtually various type of business. Further, it manufactures and sells the Kindle e-reader. Additionally, the company provides fulfillment; miscellaneous marketing and promotional agreements, such as online advertising; and co-branded credit cards. Amazon.com, Inc. was founded in 1994 and is headquartered in Seattle, Washington.

Advisors' Opinion:

• [By Karim]

  Jeff Bezos is a very smart and committed CEO.  They have a stranglehold as the world’s largest online retailer.  It makes a lot of sense to buy stuff online and the younger generations are getting more and more comfortable doing so.  The logistics and economies of scale make it almost impossible for any other company to come into this space.  The stock price has risen considerably lately but there is still a lot more room for growth.  When they start selling their tablets with the ability to sell the largely discounted e-books, expect the stock to jump.  All the readers out there will love to buy this new tablet and they are continually making the online shopping experience better, cheaper, and easier.  People are now even buying from their mobile phones with the Amazon App.  Solid long term hold.

• [By Robert Holmes]

   Analyst Scott Devitt says that Amazon is the best positioned to lead the continuing secular transition from traditional retail to online ecommerce.

  "On multiple occasions, at different points in the company's life-cycle, Amazon.com has chosen to innovate, oftentimes cannibalizing existing business platforms in order to better position itself to provide its customers the products they will want," Devitt writes.

  Devitt's most optimistic view of Amazon would see shares rise 71% by the end of 2012, while his bearish scenario for the Internet retailer would see shares fall about 21% over the next 12 months.

• [By Rebecca Lipman]

  Together with its subsidiaries, supplies technology, integrated project management, and information solutions to the oil and gas exploration and production industries worldwide. Market cap of $91.49B. EPS growth (5-year CAGR) at 24%. According to Morgan Stanley: "Thanks to an estimated $1 billion investment per year in R&D, Schlumberger has what we consider the most advanced technology portfolio in the industry."

• [By Michael]

  Amazon.com, Inc. (NASDAQ:AMZN): On 3/31/11 Viking Global Investors reported holding 416,100 shares with a market value of $74,952,095. This comprised 0.65% of the total portfolio. On 6/30/11, Viking Global Investors held 2,031,800 shares with a market value of $415,482,793. This comprised 3.48% of the total portfolio. The net change in shares for this position over the two quarters is 1,615,700. About the company: Amazon.com, Inc. is an online retailer that offers a wide range of products.? The Company’s products include books, music, videotapes, computers, electronics, home and garden, and numerous other products.? Amazon offers personalized shopping services, Web-based credit card payment, and direct shipping to customers.

PPG Completes Deft Acquisition

Specialty coatings leader PPG Industries (NYSE: PPG  ) has announced that it has completed the previously announced acquisition of structural and aviation coatings maker Deft for an undisclosed sum. 

The purchase will complement PPG's own aerospace coatings business. The performance coatings segment, which comprises its aerospace, protective, marine, and architectural businesses, had $4.75 billion in revenues in 2012.

In addition to Deft's structural primers and military topcoats for the North American aviation industry, it also produces coatings used within the architectural and general industrial markets.

PPG Vice President of Aerospace Barry Gillespie said: "With the acquisition of Deft, we are now able to offer an even broader portfolio of innovative coatings that benefit our customers and reduce the impact on the environment. Deft's waterborne and chrome-free technologies complement PPG's existing coatings capabilities, particularly in the aerospace industry, and support PPG's ongoing commitment to sustainability."

Headquartered in Pittsburgh, PPG operates in nearly 70 countries around the world, recording sales of $15.2 billion last year.

More Expert Advice from The Motley Fool

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Why the Street Should Love CA Technologies'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 CA Technologies (Nasdaq: CA  ) , 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, CA Technologies generated $1,358.0 million cash while it booked net income of $955.0 million. That means it turned 29.2% of its revenue into FCF. That sounds pretty impressive.

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 CA Technologies 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 12.9% of operating cash flow coming from questionable sources, CA Technologies 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 5.5% of cash flow from operations. Overall, the biggest drag on FCF also came from changes in taxes payable, which represented 4.0% of cash from operations.

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.

Can your retirement portfolio provide you with enough income to last? You'll need more than CA Technologies. Learn about crafting a smarter retirement plan in "The Shocking Can't-Miss Truth About Your Retirement." Click here for instant access to this free report.

We can help you keep tabs on your companies with My Watchlist, our free, personalized stock tracking service.

Add CA Technologies to My Watchlist.

This Bank Is Leading the Dow Higher

The Dow Jones Industrial Average (DJINDICES: ^DJI  ) is up after a positive report on manufacturing activity in the U.S. As of 1:15 p.m. EDT, the Dow was up 25 points to 14,999. The S&P 500 (SNPINDEX: ^GSPC  ) was up 6 points to 1,620.

There were two U.S. economic releases today.

Report

Period

Result

Previous

CoreLogic home prices	May	12%	11%
Factory orders	May	2.1%	1.3%

The one to pay attention is factory orders. It's well known that home prices were up in May; the big question is whether they will continue their rise now that mortgage rates have jumped. The Department of Commerce reported factory orders rose 2.1% in May, slightly above analyst expectations of 1.9% growth and above April's 1.3% growth. Excluding transportation, new orders were up just 0.6%. Durable goods orders were up 3.7% while nondurable goods were up 0.7%. The durable goods growth is an especially good sign of a resurgent economy as it shows that consumers and businesses are investing in appliances, cars, and other purchases that could be put off if the economy were doing poorly.

The one big question on the market's mind is "is the unemployment situation improving?" We will find out more when ADP releases its private sector jobs report tomorrow and when the Department of Labor releases the nonfarm payrolls report Friday. The market is currently being sustained by the Federal Reserve's purchasing of $85 billion worth of long-term assets each month, which the Fed has said will continue until inflation picks up or the jobs market improves to 6.5%-7% unemployment. If the jobs report comes in better than expected, the market may drop as that would mean that the Fed will taper sooner than expected.

One company that won't mind higher rates is today's Dow leader, JPMorgan Chase (NYSE: JPM  ) , which is up 2.01% to $53.16. The bank is up today after being upgraded by Raymond James from "outperform" to "strong buy" with a target price of $64, as the analyst expects the bank's earnings to be better than they previously expected. We will get some idea of how the bank is doing after it reports second-quarter earnings next Friday. While the bank has faced some short-term challenges and now faces another with the rise in interest rates, these will all be nothing more than short-term headwinds for the bank. In the medium term, higher rates are better for banks as they can lend out their deposits and make a higher return on those deposits.

Many investors are terrified about investing in big banking stocks after the crash, but the sector has one notable stand-out. In a sea of mismanaged and dangerous peers, it rises above as "The Only Big Bank Built to Last." You can uncover the top pick that Warren Buffett loves in The Motley Fool's new report. It's free, so click here to access it now.

Top Life Sciences Companies To Watch For 2014

Another week of new all-time highs for the Dow Jones Industrial Average coupled with a good start to earnings season has given optimists little reason to fret. For skeptics like me, that's an opportunity to see whether companies have earned their current valuations.

Keep in mind that some companies�deserve�their current valuations. Life sciences company Life Technologies�jumped to new highs this week following word that Thermo Fisher Scientific�will make a bid for the company, and that other private-equity firms are finalizing their bids.�With Life Technologies having publicly announced a strategic review in January, it seems like a long-awaited buyout could be right around the corner for shareholders.

Still, other companies might deserve a kick in the pants. Here's a look at three companies that could be worth selling.

Top Life Sciences Companies To Watch For 2014: Premier Exhibitions Inc.(PRXI)

Premier Exhibitions, Inc. provides museum quality touring exhibitions worldwide. It develops, deploys, and operates exhibition products; sells apparel, posters, and Titanic-related jewelry; publishes exhibition catalogs; and provides ancillary services, such as audio tours and photographs for public in the exhibition centers, museums, and non-traditional venues. The company operates and promotes various exhibitions, including Bodies Revealed and Bodies, The Exhibition, that display multiple human anatomy sets, which contain a collection of whole human body specimens, single human organs, and body parts; Titanic, the artifact exhibition, which features the artifacts recovered from the wreck site; and Dialog in the Dark that is intended to provide insight and experience to the paradox of learning to see without the use of sight. Premier Exhibitions, Inc. was founded in 1987 and is based in Atlanta, Georgia.

Top Life Sciences Companies To Watch For 2014: Raffaele Caruso SpA (YRC)

Raffaele Caruso SpA is an Italy-based company, operating in the apparel sector. It produces tailor-made suits, coats and jackets, for men only. The Company owns three industrial facilities in Soragna and in Ponte dell��glio, Italy. The Company distributes its products worldwide through its own brands Raffaele Caruso and Fluo. The Company also acts as wholesaler for brands of other companies.

Top 5 Net Payout Yield Stocks To Invest In 2014: EastGroup Properties Inc. (EGP)

EastGroup Properties, Inc., a real estate investment trust (REIT), focuses on the development, acquisition, and operation of industrial properties in the United States. As of December 31, 2007, it owned 202 industrial properties and 1 office building, as well as approximately 1.7 million square feet properties in Florida, Texas, Arizona, and California. The company has elected to be taxed as a REIT under the Internal Revenue Code. As a REIT, it would not be subject to federal income tax purposes, provided it distributes at least 90% of its REIT taxable income to its shareholders. EastGroup Properties, Inc. was founded in 1969 and is headquartered in Jackson, Mississippi.

Top Life Sciences Companies To Watch For 2014: Watson Pharmaceuticals Inc.(WPI)

Watson Pharmaceuticals, Inc., a specialty pharmaceutical company, engages in the development, manufacture, marketing, sale, and distribution of generic and brand pharmaceutical products in the United States, western Europe, Canada, Australasia, Asia, South America, and South Africa. The company offers its products for therapeutic categories, such as central nervous system, cardiovascular, hormones and synthetic substitutes, anti-infective agents, and urology. It operates in three segments: Global Generics, Global Brands, and Distribution. The Global Generics segment develops, manufactures, and sells generic pharmaceutical products, as well as distributes generic versions of third parties? brand products. This segment offers various dosage forms, such as oral solids, transdermals, injectables, inhalation products, and transmucosals for indications, including pregnancy prevention, pain management, depression, hypertension, and smoking cessation. The Global Brands segment pr omotes and co-promotes Rapaflo, Gelnique, Trelstar, Androderm, Crinone, ella, INFeD, Generess, sodium ferric gluconate, AndroGel, and Femring branded products; and markets its products through sales professionals. It also sells various non-promoted products. The Distribution segment distributes generic and select brand pharmaceutical products, vaccines, injectables, and over-the-counter medicines to independent pharmacies, alternate care providers, pharmacy chains, and physicians? offices. The company sells its generic and brand pharmaceutical products primarily to drug wholesalers, retailers, and distributors, including national retail drug and food store chains, hospitals, clinics, mail order, government agencies, and managed healthcare providers, such as health maintenance organizations and other institutions. Watson Pharmaceuticals, Inc. was founded in 1983 and is headquartered in Parsippany, New Jersey.

Top Life Sciences Companies To Watch For 2014: MoSys Inc.(MOSY)

MoSys, Inc., together with its subsidiaries, designs, develops, markets, and licenses embedded memory intellectual property (IP) for systems on chips (SOCs) designs. It provides a semiconductor memory technology, 1T-SRAM, which offers a combination of high density, low power consumption, and high-speed; and licenses this technology to companies that incorporate or embed memory on integrated circuits (ICs), such as system-on-chips. The company also designs, develops, markets, and licenses high-speed parallel and serial interface IP that includes physical layer circuitry, which allows ICs to communicate with each other or to discrete memory devices in networking, storage, computer, and consumer devices. Additionally, it supports serial I/O technologies, such as 10G KR, XAUI, PCI Express, and SATA, as well as parallel interfaces comprising DDR3. MoSys, Inc. offers its memory and I/O IP technologies to semiconductor companies, electronic product manufacturers, foundries, intel lectual property companies, and design companies through product development, technology licensing, and joint marketing relationships. It operates in Japan, the United States, Taiwan, and rest of Asia. The company was founded in 1991 and is headquartered in Santa Clara, California.

Canadian Solar Wins 91 MW Thailand Supply Deal

Warren Buffett Gives It Away

On this day in economic and business history...

Berkshire Hathaway (NYSE: BRK-B  ) CEO Warren Buffett shocked the worlds of both investing and philanthropy on June 25, 2006, when he announced his intent to give 85% of his fortune to charity. The vast majority of that fortune was earmarked for the Bill & Melinda Gates Foundation, a decision spurred in no small measure by the long-standing friendship between Buffett and Bill Gates. The CNNMoney/Fortune exclusive that broke the story offered the following details on Buffett's gift:

Beginning in July and continuing every year, Buffett will give a set, annually declining number of Berkshire B shares -- starting with 602,500 in 2006 and then decreasing by 5% per year -- to the five foundations. The gifts to the Gates foundation will be made either by Buffett or through his estate as long as at least one of the pair -- Bill, now 50, or Melinda, 41 -- is active in it.

This arrangement was no doubt modified by a 50-to-1 split of Berkshire's Class B shares in 2009. As a result of that split, the total gift Buffett originally promised in 2006 now looks like this:

To the Bill & Melinda Gates Foundation: 500 million shares To the Susan Thompson Buffett Foundation: 50 million shares To the Susan A. Buffett Foundation: 17.5 million shares To the Howard G. Buffett Foundation: 17.5 million shares To the NoVo Foundation: 17.5 million shares

Buffett has already given away many millions of shares to the Gates Foundation (based on split-adjusted totals). At the current price of Berkshire's B shares, seven years after it was first pledged, this gift is worth nearly $67 billion. That's nearly twice the original value of the pledge, which was calculated at $37 billion in 2006.

The record-breaking nature of Buffett's gift would inspire Gates and Buffett to develop the Giving Pledge, a campaign begun in 2010 to encourage the world's wealthiest to leave most of their money to charity. Seven years after Buffett unofficially kicked off the greatest charity drive in history, the Giving Pledge has swelled to 114 signatories, virtually all of whom are worth at least $1 billion.

Incorporating for the future
Two of the Dow Jones Industrial Average's (DJINDICES: ^DJI  ) components took the necessary steps toward public markets when they incorporated on June 25.

3M (NYSE: MMM  ) was the first, having incorporated on June 25, 1929. The company had been founded in 1902 as Minnesota Mining and Manufacturing, and after some early struggles it grew rapidly through the 1920s on the strength of innovations like waterproof sandpaper and Scotch tape. By 1929, the company was getting big enough to require a more investor-friendly corporate structure, which was one key reason for the change from partnership to corporation. Unfortunately for investors, 1929 was the worst possible year in decades in which to buy shares of small industrial concerns. 3M survived and eventually thrived despite the Great Depression, and it eventually became a Dow component in 1976. Want to learn more about 3M's origins? Click here.

Microsoft (NASDAQ: MSFT  ) came much later, but it incorporated on the same day of the year as 3M -- on June 25, 1981. It had been founded six years earlier by Bill Gates and Paul Allen once they found a buyer for their first product -- a tape-based BASIC interpreter for the primitive Altair 8800. Now the company was on the cusp of perhaps its greatest coup, as the IBM PC would launch within months, allowing its users to interact through an operating system called MS-DOS. The PC's launch set Microsoft on a rocket trajectory that would lead it to become the largest publicly traded company in American history.

Microsoft generated $7.5 million in annual revenue the year before the PC. That number would grow nearly 20 times larger, to $140 million, by the time Windows 1.0 launched in 1985. Microsoft had less reason to issue shares than 3M, as it had always been phenomenally profitable, but Gates understood the importance of luring top talent with equity in his fast-growing company. The incorporation in Washington (it would later reincorporate in Delaware) helped advance that goal extraordinarily well; one Seattle-based economist would later estimate that approximately 10,000 Microsoft employees became millionaires by the time the company's stock peaked in 1999. Not all of them had been with Microsoft since its private days, but it's safe to assume that most of its roughly 1,400 full-time employees in 1986 were quite richly compensated with Microsoft's stock growth.

A new (minimum) deal for American workers
President Franklin D. Roosevelt signed the Fair Labor Standards Act, or FLSA, into law on June 25, 1938. It was the last major element in Roosevelt's prewar New Deal era, and it became the first law to impose minimum-wage standards that withstood the judgment of the Supreme Court. Several earlier state and national minimum-wage laws had fallen before the Supreme Court in the preceding two decades, including one made law during Roosevelt's first year in office. This law, to hold up, had to be both legally impeccable and backed by one of the strongest publicity campaigns of Roosevelt's four-term tenure.

Roosevelt had campaigned ferociously for the bill, both during and after the election. Its first draft arrived in the Capitol with a message that all of America's "able-bodied working men and women [should receive] a fair day's pay for a fair day's work." This effort wound up watered down from $0.40 an hour and 40 hours a week, but it still couldn't pass the House before its summer recess. Roosevelt pushed forward in the fall with a tighter message, railing against "the exploitation of child labor and the undercutting of wages and the stretching of the hours of the poorest paid workers in periods of business recession." Despite congressional opposition, public-opinion polls showed strong backing for the President: One conducted in early 1938 found that a full two-thirds of the national populace supported minimum-wage standards.

The FLSA, in order to withstand Court scrutiny, initially applied to only a fifth of the nation's workforce. It set the minimum wage at $0.25 per hour and restricted the workweek to 44 hours. However, the FLSA also benefited from the infamous "switch in time" that led to the Court's liberalization on labor issues following Roosevelt's threat to pack the court with additional liberal justices after his landslide 1936 electoral victory. Without this combination of restricted impact and liberalized attitudes in the Supreme Court, the FLSA might not have withstood scrutiny. Even so, Roosevelt acted quickly to avoid a pocket veto, and the act was signed in a massive wave of 121 bills nine days after the start of Congress' 1938 recess.

The minimum wage has been raised many times since 1938. It was at its absolute highest on an inflation-adjusted basis in 1968, when the hourly minimum wage of $1.60 was equivalent to more than $10 an hour in present-day terms, or 90% of the federal poverty level. In 2007, Congress finally gave states the power to establish their own minimum-wage laws at higher rates than those imposed by federal law. Nine states have taken advantage of this freedom to raise their statewide minimum wage past the present federal level of $7.25 per hour.

Apple Makes a Small but Important Move in Russia

Within the important BRIC emerging markets, Apple (NASDAQ: AAPL  ) has been focusing most heavily on China, Brazil, and India, in that order.

The "Greater China" segment has grown large enough that Apple now discloses it as a separate geographical operating segment, bringing in $8.8 billion last quarter including retail operations. Apple cut iPhone prices in Brazil earlier this year. The company has also overhauled its Indian operations in an effort to grow its presence.

What about Russia? Apple has just opened its online store in Russia for the first time.

Russian direct sales, check
Last August, I compiled a table of which BRIC countries Apple operates retail stores in and where it offers direct sales to consumers. Both aspects have proven critical to Apple's overall success in a given geography, since it can better control the purchase experience and bolster its relationship directly with consumers. With Apple setting up online shop in Russia, investors can now check off a box in this table.

Country

Direct Sales

Retail Stores

Brazil	Yes	No
Russia	Yes	No
India	No	No
China	Yes	Yes

Source: Apple. Change since August 2012 shown in bold.

Apple now sells directly online in three out of the four BRIC countries.

On the retail side, there's still a lot of work to do. Apple has already confirmed that it's preparing to open a retail store in Rio de Janeiro, marking its first direct foray into Brazil. Apple has also reportedly scouted out potential retail locations in Moscow. India remains a challenge with direct sales and retail stores, in part due to complex regulations about foreign ownership of single-branded retail stores.

The big Russian smartphone picture
Russian carrier Mobile TeleSystems compiles quarterly reports about the market, giving investors a valuable glimpse into the foreign market. MTS is the largest carrier in Russia, with 71.3 million subscribers, so it has a pretty good pulse on the market. MTS estimates that there were a total of 3.5 million smartphones sold in the first quarter, accounting for 78% of all mobile handsets sold.

The average smartphone selling price in Q1 was approximately $333. This shows how important it is for Apple to release its expected mid-range iPhone, since the oldest and cheapest model it currently sells in Russia is the iPhone 4 that costs $455. The newest iPhone 5 costs an astonishing $912 for an entry-level model (a 64 GB model costs over $1,200).

Since Russia is an unsubsidized market, Apple grabs only an 8% market share, according to the MTS estimates. Google (NASDAQ: GOOG  ) has strengthened its Android lead over the past year.

Operating System

Q1 2012

Q1 2013

Android	43.9%	70.1%
Asha	--	8.4%
iOS	5.6%	8%

Source: MTS.

Nokia's (NYSE: NOK  ) Asha lineup, which didn't exist a year ago, is off to a strong start, but Asha will be pressured as Android devices inevitably become cheaper. Nokia's overall market share as a vendor dropped by over half to 14.5%, mostly as it abandoned Symbian.

MTS also provides data on popular models within different pricing categories. Nokia devices are popular in the low-end, and Samsung's Android offerings occupy all price points, with strength in the high-end. Apple doesn't rank within the top five high-end models.

Next steps
Opening its online store is an important step for Apple, but the company still needs to work its way toward opening retail stores and targeting mid-range price points if it hopes to reach double-digit market share.

Apple has a history of cranking out revolutionary products... and then creatively destroying them with something better. Read about the future of Apple in the free report, "Apple Will Destroy Its Greatest Product." Can Apple really disrupt its own iPhones and iPads? Find out by clicking here.

Why Ford's CEO Is Mad at Japan

Ford (NYSE: F  ) CEO Alan Mulally is a very reasonable guy -- but lately, he's been quoted in the business press with some very tough talk about Japan. Mulally says the Japanese government is manipulating its currency to give Japanese automakers an advantage -- part of the prime minister's efforts to jump-start Japan's slow economy.

Is Mulally right to be angry? In this video, Fool contributor John Rosevear looks at what's actually happening, and what's at stake for Ford -- and at why Alan Mulally might be right to be worried about Ford's Japanese rivals.

China is already the world's largest auto market – and it's set to grow even bigger in coming years. A recent Motley Fool report, "2 Automakers to Buy for a Surging Chinese Market," names two global giants poised to reap big gains that could drive big rewards for investors. You can read this report right now for free – just click here for instant access.

CIBC Pressured as Aimia Picks TD Bank for Aeroplan

Aimia (AIM) Inc.'s decision to move its Aeroplan reward-partnership to Toronto-Dominion (TD) Bank is a blow to Canadian Imperial Bank of Commerce, which stands to lose customers and as much as C$3 billion ($2.9 billion) in credit-card balances.

Toronto-Dominion, Canada's second-largest bank, conditionally agreed yesterday to become the primary credit-card partner for Aimia's Aeroplan program starting Jan. 1, replacing an accord with Canadian Imperial that expires at year end. CIBC, Canada's fifth-largest lender, has the right to match the terms of the new agreement by Aug. 9 to retain the partnership.

"It hamstrings CIBC," Cameron Webster, who helps manage C$250 million including Toronto-Dominion shares at Sandstone Asset Management Inc. in Calgary, said yesterday in a telephone interview. "It's a bit of a dent to CIBC and it creates the potential for them to lose some customers."

Canadian Imperial (CM) said it's being shut out in the new agreement. The deal "appears to have been intentionally structured in a way that attempts to nullify CIBC's right of first refusal and any ability to match," the bank said yesterday in a statement. "Given the structuring of the document and our contractual rights, we are exploring our options."

Aerogold Visa

The bank's 22-year partnership with Aimia has made the CIBC Aerogold Visa its most popular credit card. Toronto-based CIBC buys Aeroplan miles from Montreal-based Aimia to give to cardholders on purchases, including flights with Air Canada (AC/A), the country's biggest carrier. Aimia, which owns and manages rewards programs including Nectar in the U.K. and Italy, counts CIBC as its biggest partner.

"The effect on CIBC, whether the bank renews or not, is negative," Mario Mendonca, an analyst with Canaccord Genuity in Toronto, said yesterday in a note.

CIBC's adjusted per-share earnings may fall 40 cents to 65 cents next year -- or as much as 7.5 percent -- as it loses as much as C$3 billion in card balances to Toronto-Dominion and other card providers, Mendonca said. He estimates that half of CIBC's card balances are tied to Aeroplan and that 50 percent to 60 percent of the cardholders would move to the new provider if they didn't renew.

Shares Rise

CIBC fell 0.9 percent to close at C$74.64 at 16:07 a.m. in Toronto today, while Toronto-Dominion gained 0.7 percent. Aimia rose 2.2 percent to C$15.74 after surging 11 percent yesterday, the biggest gain in about four years. CIBC is the worst performer on the eight-company Standard & Poor's/TSX Commercial Banks Index this year, falling 6.1 percent.

CIBC is Canada's largest credit-card issuer based on outstanding balances, according to an April 2013 issue of the Nilson Report, a credit-card industry publication. Toronto-Dominion is the second-largest.

Aeroplan began in 1984 as a promotional tool for business travelers on Air Canada. CIBC Aerogold Visa was started in 1991, according to Aimia. The card allows users to collect Aeroplan points for travel on Air Canada and get goods from retailers.

The Aerogold program accounts for 8 percent to 10 percent of CIBC's earnings, Robert Sedran, an analyst at CIBC World Markets in Toronto, said yesterday in a note.

"Some of this business will no doubt be lost -- and not just by TD," Sedran said. "The Aerogold program has been very successful and contributes a meaningful amount of earnings to CIBC."

Marketing Spending

Kevin Dove, a CIBC spokesman, and TD's Ali Duncan Martin declined further comment from the bank statements.

Toronto-Dominion would commit C$100 million to the loyalty program and agree to minimum annual miles purchases as part of a 10-year agreement. The two companies also agreed to spend about C$140 million over four years on marketing. TD is entitled to an C$80 million fee to cover costs if CIBC agrees to match the terms of the agreement and continues as Aimia's partner.

"The tone of the press release and Aimia's conference call suggest that the likelihood of CIBC matching the terms is low," CIBC's Sedran said. "CIBC will choose not to renew its deal with Aimia, preferring to build its own travel card."

The agreement Aimia negotiated with TD brings the price for the Aeroplan loyalty points much closer to market rates than the current pact with CIBC, according to Aimia Chief Executive Officer Rupert Duchesne.

Pay More

"With the existing agreement with CIBC, we've made a reasonable level of profit out of it, nothing extraordinary," Duchesne, 53, said yesterday in a phone interview. "For CIBC is was an extremely profitable relationship."

There are "well more than a million" Aeroplan members who accumulate points with Aimia's two card partners, CIBC and American Express Co. (AXP), according to Duchesne. Aeroplan has almost five million members, he said.

Aimia's new agreement would see its bank partner pay at least 15 percent more for Aeroplan miles, and the extra money will go to improving its rewards program, Duchesne said.

CIBC has been preparing to go it alone with its own card. CEO Gerald McCaughey, 57, said on a May 30 conference call that the bank is spending more than C$50 million over four quarters to create an alternative card if the Aimia agreement isn't renewed. Canadian Imperial also has its Aventura Gold Visa card, which it introduced in 2003 to offer lifestyle and travel rewards with purchases.

Maximum Return

CIBC investor Anil Tahiliani of McLean & Partners Wealth Management Ltd. said the bank shouldn't be held hostage to the Aimia agreement.

"I prefer they stick to their guns on where they can get the maximum return," Tahiliani, who helps manage C$1 billion at the Calgary-based firm, said yesterday in an interview. "If they think they can do better having their own card or their own rewards program rather than be married to Aimia, I'm fine with that."

TD has increased its push into cards through acquisitions, including its purchase of Bank of America Corp.'s MBNA Canada unit to gain its MasterCard portfolio in December 2011.

"I don't think this will be instant riches for TD," said David Cockfield, a fund manager with Northland Wealth Management in Toronto, who helps manage C$225 million at the firm including TD shares. "It's not an area free of competition, but it's a step in the right direction."