Saturday, August 3, 2013

Coach Beats Analyst Estimates on EPS

Coach (NYSE: COH  ) reported earnings on April 23. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended March 30 (Q3), Coach met expectations on revenues and beat expectations on earnings per share.

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

Gross margins grew, operating margins dropped, net margins shrank.

Revenue details
Coach chalked up revenue of $1.19 billion. The 27 analysts polled by S&P Capital IQ expected revenue of $1.18 billion on the same basis. GAAP reported sales were 7.1% higher than the prior-year quarter's $1.11 billion.

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

EPS details
EPS came in at $0.84. The 29 earnings estimates compiled by S&P Capital IQ forecast $0.80 per share. GAAP EPS of $0.84 for Q3 were 9.1% higher than the prior-year quarter's $0.77 per share.

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

Margin details
For the quarter, gross margin was 74.1%, 30 basis points better than the prior-year quarter. Operating margin was 29.3%, 110 basis points worse than the prior-year quarter. Net margin was 20.1%, 20 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $1.24 billion. On the bottom line, the average EPS estimate is $0.89.

Next year's average estimate for revenue is $5.09 billion. The average EPS estimate is $3.70.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 2,938 members out of 3,119 rating the stock outperform, and 181 members rating it underperform. Among 866 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 839 give Coach a green thumbs-up, and 27 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Coach is outperform, with an average price target of $60.30.

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Thursday, August 1, 2013

5 Best Safest Stocks To Buy For 2014

Join The Motley Fool for a conversation with author, investor and philanthropist, Whitney Tilson. In addition to managing Kase Capital, Whitney has coauthored More Mortgage Meltdown: 6 Ways to Profit in These Bad Times, Poor Charlie's Almanack, and most recently The Art of Value Investing, a collection of interviews with over 200 successful value investors.

A full transcript follows the video.

The Motley Fool's chief investment officer has selected his No. 1 stock for the next year. Find out which stock it is in the brand-new free report: "The Motley Fool's Top Stock for 2013." Just click here to access the report and find out the name of this under-the-radar company.

Brendan Byrnes: What's your biggest worry about Berkshire (NYSE: BRK-B  ) ? Did Doug Kass bring up anything on the bearish side that made you say, "Wow?" It seemed like more he regurgitated a lot of the bear argument: "Warren Buffett, at some point, is going to be gone." "It's so big, how much bigger can it get?" Are you buying those?

5 Best Safest Stocks To Buy For 2014: Under Armour Inc.(UA)

Under Armour, Inc. develops, markets, and distributes performance apparel, footwear, and accessories for men, women, and youth primarily in the United States, Canada, and internationally. It offers products made from moisture-wicking synthetic fabrics designed to regulate body temperature and enhance performance regardless of weather conditions. The company provides its products in three fit types: compression (tight fitting), fitted (athletic cut), and loose (relaxed) extending across the sporting goods, outdoor, and active lifestyle markets. Its footwear offerings comprise football, baseball, lacrosse, softball, and soccer cleats; slides; performance training footwear; and running footwear. The company also provides baseball batting, football, golf, and running gloves, as well as licenses bags, socks, headwear, custom-molded mouth guards, and eyewear that are designed to be used and worn before, during, and after competition. Under Armour sells its products through retai l stores, as well as directly to consumers through its own retail outlets and specialty stores, Website, and catalogs. The company was founded in 1996 and is headquartered in Baltimore, Maryland.

Advisors' Opinion:
  • [By Roger]

    Under Armour (NYSE:UA), a maker and designer of apparel, footwear and accessories that target sports enthusiasts, has more than doubled in one year. But despite the advance, many research firms still have a “strong buy” recommendation on the stock. And S&P recently revised its annual target to $93.

    Technically UA has advanced on a series of stair steps, sometimes called “base moves.”? These are very bullish formations that resemble cups. UA reversed up recently following a signal from our proprietary Collins-Bollinger Reversal (CBR) indicator. If the recent pullback to its 50-day moving average (blue line) holds, then the next move up should break the prior high with a target of $85.

    Traders could take risk positions now with a target of $85 to $90. But be careful and use stop-loss orders to protect against a violent reversal, which could drop prices back to support at $62 where this volatile stock could be bought again.

  • [By Glenn]  

    Current Price: $27.27 12-month target: $37

    I see potential in opportunities for new product adjacencies, and expanding distribution worldwide. Footwear growth will continue to increase. Revenues for these products have increased over 69% in 2009. Adding to this I still see growth in Under Armour’s apparel sales, which are up 8%. Under Armor had yet to even break into the international market, which offers a plethora of new opportunities for this growing brand. I believe sales will rise drastically in 2010 driven by international sales, new women’s clothing line, and expansion within their own footwear line.
  • [By Fernandez]

    Under Armour designs, develops, markets, and distributes performance apparel, footwear, and accessories for men, women, and youth primarily in the United States and Canada.

    You’ve probably seen the company’s “Protect This House” or “Click-Clack” commercials, and probably seen anyone from the weekend warrior to professional sports teams wearing the company’s moisture-wicking synthetic fabrics, which are designed to keep perspiration away from the skin, and regulate body temperature regardless of weather conditions.

    I must admit for full disclosure that I am an Under Armour nut, and own about 20 pairs of their shorts, shirts and shoes.

    I can attest from personal experience as a natural bodybuilder and athlete that the Under Armour apparel are the best workout clothing I have ever worn, and they look pretty darn cool too.

    Now let me make a clear distinction between a great company, and a great stock.

    Up until recently, Under Armour was the former, but not the latter.

    It has now entered into a zone where the valuation metrics, even in the face of a consumer slowdown, is looking more and more attractive.

    In fact, Under Armour just released earnings Monday.

    They were pretty much in line with analyst’s expectations, and then Under Armour slightly lowered their forward guidance for the remainder of 2008 based on those same consumer headwinds.

    The market liked what it heard sending shares up 20% (of course, the overall market was up 10%, so…). Shares have since rebounded further are now up almost 50% from their lows just last week!

    This leads me to my investment thesis in shares of Under Armour.

    I believe that Under Armour represents one of the quintessential brands of this decade when it comes to sports apparel, the way Under Armour’s fiercest rival Nike (NYSE: NKE) dominated the 90’s.

    Until now the valuation of the company was not commensurate with the! projected profit and growth, which I thought were way too high, and still might be, along with certain inventory related problems that the company now seems to be getting a handle on.

    Still, with the spike in share price, along with the uncertainty in the market and overall economy, I feel that we will still be able to purchase shares of this great company at a great price in the near future and that we’re seeing a bit of a short squeeze in shares of Under Armour.

    Why I Like the Company: One of the quintessential brands of this decade; Valuation is reaching reasonable to “cheap” levels depending on direction of consumer market and Under Armour’s stock price; Dedicated and fully invested founder with over 77% voting power via class B shares; Improved business fundamentals via better inventory controls and operational structure, and new product offerings; Further expansion available outside the U.S.; Relatively higher margins than competition

5 Best Safest Stocks To Buy For 2014: Fluor Corporation(FLR)

Fluor Corporation, through its subsidiaries, provides engineering, procurement, construction, maintenance, and project management services worldwide. Its Oil & Gas segment offers design, engineering, procurement, construction, and project management services to upstream oil and gas production, downstream refining, chemicals, and petrochemicals industries. This segment also provides consulting services comprising feasibility studies, process assessment, and project finance structuring and studies. The company?s Industrial & Infrastructure segment offers design, engineering, procurement, and construction services to the transportation, wind power, mining and metals, life sciences, manufacturing, commercial and institutional, telecommunications, microelectronics, and healthcare sectors. Its Government segment provides engineering, construction, logistics support, contingency response, management, and operations services to the United States government focusing on the Departme nt of Energy, the Department of Homeland Security, and the Department of Defense. The company?s Global Services segment offers operations and maintenance, small capital project engineering and execution, site equipment and tool services, industrial fleet services, plant turnaround services, temporary staffing services, and supply chain solutions. Its Power segment provides engineering, procurement, construction, program management, start-up and commissioning, and operations and maintenance services to the gas fueled, solid fueled, plant betterment, renewables, nuclear, and power services markets. The company also offers unionized management and construction services in the United States and Canada. Fluor Corporation was founded in 1912 and is headquartered in Irving, Texas.

5 Best Insurance Stocks To Own Right Now: Petroleo Brasileiro S.A.- Petrobras(PBR)

Petroleo Brasileiro S.A. primarily engages in oil and natural gas exploration and production, refining, trade, and transportation businesses. The company?s Exploration and Production segment involves in the exploration, production, development, and production of oil, liquefied natural gas (LNG), and natural gas in Brazil. This segment supplies its products to the refineries in Brazil, as well as sells surplus petroleum and byproducts in domestic and foreign markets. Its Supply segment engages in the refining, logistics, transportation, and trade of oil and oil products; export of ethanol; and extraction and processing of schist, as well as holds interests in companies of the petrochemical sector in Brazil. The Gas and Energy segment involves in the transportation and trade of natural gas produced in or imported into Brazil; transportation and trade of LNG; and generation and trade of electric power. In addition, the segment has interests in natural gas transportation and d istribution companies; and thermoelectric power stations in Brazil, as well engages in fertilizer business. The Distribution segment distributes oil products, ethanol, and compressed natural gas in Brazil. The International segment involves in the exploration and production of oil and gas, as well as in supplying, gas and energy, and distribution operations in the Americas, Africa, Europe, and Asia. Further, the company involves in biofuel production business. Petroleo Brasileiro was founded in 1953 and is based in Rio de Janeiro, Brazil.

Advisors' Opinion:
  • [By Dave Friedman]

    Institutional investors bought 78,663,680 shares and sold 101,125,380 shares, for a net of -22,461,700 shares. This net represents 0.23% of common shares outstanding. The number of shares outstanding is 9,872,826,100. The shares recently traded at $27.61 and the company’s market capitalization is $170,178,700,000.00. About the company: Petroleo Brasileiro S.A. – Petrobras explores for and produces oil and natural gas. The Company refines, markets, and supplies oil products. Petrobras operates oil tankers, distribution pipelines, marine, river and lake terminals, thermal power plants, fertilizer plants, and petrochemical units. The Company operates in South America and elsewhere around the world.

  • [By ETF Authority]  

    Current Price: $47.68 12-month target: $80

    PBR plans to invest $174 billion by 2013 to support the largest oil discovery in 30 years. PetroBras has both the backing of the Brazilian government who invested over $30 billion and the Chinese private investors who have pledged over $20 billion to PBR’s discovery. Brazils government proposed to make PBR the only operator of all new offshore pre-salt oil fields yet to be exploited. PetroBras expects oil production to increased from 2.4 million barrels a day to around 5.7 million barrels a day by 2020. PBR has long-term views and have been expanding renewable energy programs such as solar, biofuel, and energy. Biofuel production is expected to increase 18% by 2013.

5 Best Safest Stocks To Buy For 2014: Goldman Sachs Group Inc.(The)

The Goldman Sachs Group, Inc., together with its subsidiaries, provides investment banking, securities, and investment management services to corporations, financial institutions, governments, and high-net-worth individuals worldwide. Its Investment Banking segment offers financial advisory, including advisory assignments with respect to mergers and acquisitions, divestitures, corporate defense, risk management, restructurings, and spin-offs; and underwriting securities, loans and other financial instruments, and derivative transactions. The company?s Institutional Client Services segment provides client execution activities, such as fixed income, currency, and commodities client execution related to making markets in interest rate products, credit products, mortgages, currencies, and commodities; and equities related to making markets in equity products, as well as commissions and fees from executing and clearing institutional client transactions on stock, options, and fu tures exchanges. This segment also engages in the securities services business providing financing, securities lending, and other prime brokerage services to institutional clients, including hedge funds, mutual funds, pension funds, and foundations. Its Investing and Lending segment invests in debt securities, loans, public and private equity securities, real estate, consolidated investment entities, and power generation facilities. This segment also involves in the origination of loans to provide financing to clients. The company?s Investment Management segment provides investment management services and investment products to institutional and individual clients. This segment also offers wealth advisory services, including portfolio management and financial counseling, and brokerage and other transaction services to high-net-worth individuals and families. In addition, it provides global investment research services. The company was founded in 1869 and is headquartered in New York, New York.

This Acquisition Strategy Makes Sense

Even though growth stocks fueled by acquisition can sometimes hide the true or even negative trend, MoneyShow's Jim Jubak, also Jubak's Picks, feels that, in regards to this company, this time could be different.

On July 25, Precision Castparts (PCP) reported earnings for the first (June) quarter of its fiscal year of $2.88 a share. Earnings were up 22.6% from the June quarter of 2012. But the results were two cents a share short of the consensus earnings estimate on Wall Street. Revenue climbed by 20.4% year over year to $2.37 billion. That was below the $2.52 billion consensus.

On the miss, the stock dropped back from its record closing high on July 11 of $237.27. The shares closed at $221.69 on Tuesday, July 30. That's a drop of 6.6% from the high.

The drop seems like an attractive buying opportunity and the stock is cheap on its earnings growth rate of 22.6% and trailing 12-month price to earnings ratio of 21.5.

I'd suggest buying, but you need to be clear that the next six to eight months aren't going to be the easiest on the stock or your nerves.

Precision Castparts' impressive growth in the June quarter was largely a result of acquisitions. Organic sales growth year over year came to just 2%. Most of the time I don't like growth stocks that are fueled by acquisition since these deals can hide the true (frequently negative) trend in core sales and earnings growth. But in the case of Precision Castparts, an acquisition strategy makes sense to me, because it is a reflection of what's going on in the aerospace sector. Companies like Boeing (BA) and Airbus (EAD) are looking to simplify their supply chain and to deal with fewer suppliers. Rolling up part of the supply chain under one roof, which is what Precision Castparts is doing right now, is a way to gain a bigger share of the business of these big end customers.

In the long term, I think this is a great strategy for a company that knows how to execute-and that is one of Precision Castparts' strengths.

The problem for Precision Castparts in the short term, however, is that delays in the very complicated business of getting new generations of aircraft to market, from both Boeing and Airbus, have led to bloated inventories at engine makers. As the manufacturing rate for planes like Boeing's 787 increase over the next year-Boeing has talked of doubling its production rate on the 787-engine makers will sell down their inventories of turbine components from Precision Castparts and begin to order again.

Destocking looks like it will be over sometime in the first half of calendar 2014, with growth in orders resulting in increased sales in the second half of 2014.

And that should be enough to push organic sales growth well above the current 2%.

Until that happens, though, Precision Castparts' shares will rise or fall on management's ability to wring higher profits out of slow sales growth. On its track record, I think betting that management can pull that off is a sound move. In this quarter, management grew EBIT (earnings before interest and taxes) margins to 27.2%, a one percentage point gain. Margins in the casting segment (34.6%) and in the forged product segment (25.1%) were both records for the company.

Precision Castparts is a member of my Jubak's Picks portfolio. With this post I'm moving my target price up to $242 by December from the current $238.

Full disclosure: I don't own shares of any of the companies mentioned in this post in my personal portfolio. When in 2010 I started the mutual fund I manage, Jubak Global Equity Fund, I liquidated all my individual stock holdings and put the money into the fund. The fund may or may not now own positions in any stock mentioned in this post. The fund did own shares of Precision Castparts as of the end of June. For a full list of the stocks in the fund as of the end of June see the fund's portfolio here.

McDonald's Falls Behind on Weak Sales

U.S. stock markets are moving slightly higher today as the earnings-fueled rally continues. The only major economic data was a 1.2% drop in existing-home sales, which shouldn't be a big shock, because interest rates have been rising for two months now. With 20 minutes left in trading, the Dow Jones Industrial Average (DJINDICES: ^DJI  ) is down a forgettable four points, while the S&P 500 (SNPINDEX: ^GSPC  ) is also rather flat, up just 0.13%.

Shares of McDonald's (NYSE: MCD  ) have fallen 2.7% after the company reported earnings that fell short of expectations. Revenue rose 2.4% to $7.08 million, and earnings rose 4.5% to $1.38 per share, but both results were short of expectations. Performance in Europe and China was disappointing, and management said the rest of the year would be challenging as well. The company is facing headwinds such as slowing global growth and increasingly health-conscious consumers, which will keep growth low for the fast-food giant. 

Hewlett-Packard (NYSE: HPQ  ) rose 1.3% after an analyst from Wells Fargo said worries about PC sales are overblown. The company's PC unit only accounts for 10% of the company's profit, so falling sales won't be devastating. However, keep in mind that none of the company's operating segments is growing, and management is cutting workers to save costs. The stock may be a value trap already.

Microsoft (NASDAQ: MSFT  ) is up 1.5% in the first trading day after a devastating drop. Wall Street pummeled the stock on Friday following its earnings report, but the company isn't nearly so troubled as many think. Every operating segment reported rising revenue, and the server and office business is going strong. This is still one of the most powerful companies in tech, and even though it failed with the Surface, Microsoft isn't going away anytime soon. 

It's incredible how much our digital and technological lives are shaped by just a handful of companies, including Microsoft. Find out "Who Will Win the War Between the 5 Biggest Tech Stocks?" in The Motley Fool's latest free report, which details the knock-down, drag-out battle being waged by the five kings of tech. Click here to keep reading.

Wednesday, July 31, 2013

2 Big Reasons to Sell Apple Stock Today

I'm going to attempt something a little odd today, Fools. Even though Apple (NASDAQ: AAPL  ) makes up 6.2% of my real-life holdings, and I recently considered  buying shares of Apple stock, I'm going to be giving you two reasons to consider selling shares of the company 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 we can predict the future with relative certainty. In reality, he argued, we're 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, although I don't plan on selling my Apple stock anytime soon, I think it's healthy for me to practice and model this behavior.

1. No sustainable competitive advantages
Anyone who has watched Apple's remarkable comeback from near bankruptcy over a decade ago would argue that Apple has tons of competitive advantages. But the key word here is sustainable. In other words, what might Apple have going for it -- that others don't -- that will likely remain for years to come?

When I look at Apple's competition, I see lots of sustainable competitive advantages. Google (NASDAQ: GOOG  ) has such a wide moat through the ubiquity of its search engine, which is bolstered by the global dominance of the Android operating system, that Charlie Munger once said, "Google has a huge new moat. I've probably never seen such a moat."

As (NASDAQ: AMZN  ) has grown, it has become a one-stop-shop for e-commerce. That network effect, combined with the buildout of wildly expensive -- but equally important -- fulfillment centers  has made it virtually impossible for another company to offer the value proposition Amazon has

Even Microsoft (NASDAQ: MSFT  ) has the protective moat of its ubiquitous Office Suite. In 2012, 31% of Microsoft's revenue came from people buying access to use Microsoft Word, PowerPoint, Excel, and the rest of the products in the Suite. The necessity of these products isn't going anywhere anytime soon.

Apple simply doesn't have this type of advantage. The growth of the iEmpire was based upon continually out-innovating the competition, whether through the iPod, the iPhone, or the iPad.

Top Stocks To Own For 2014

The sustainable advantages that Google, Amazon, and Microsoft have are incredibly important. While Apple innovates new products, these three can come along and create knock-off versions -- like the Nexus, Kindle Fire, or Surface tablets, respectively. The tablets can be offered for less than Apple charges because all three companies have money coming in from other sources, and those sources have sustainable advantages.

That means that all Apple is left with is innovation. While that innovation has been beyond impressive, there's nothing sustainable -- like a search engine, network of fulfillment centers, or a popular Office Suite -- to let investors know that this advantage will be around for the next decade.

Which brings me to my second point:

2. Where's the innovation?
Apple has spoiled us over the past decade. The company had rollout after rollout of new or significantly upgraded products from 2001 to 2012, and Apple stock's rise (eventually) followed suit.

Source: Apple.

But since the death of Steve Jobs, it's been difficult to pin down whether the brilliance in innovation was due to one man, or if it had become something institutional.

I think the website Ad Contrarian has one of the most interesting views of how to tell if the innovative genius is still there. In it, the author contends that the quality of ads are a tell as to how the company is fairing:

The product pipeline will take years to screw up. But the ad pipeline can be screwed up in no time...the "ad pipeline" is now officially screwed up. Apple has two problems. First is that they have nothing to talk about. They haven't produced anything of major interest to consumers in a long time. Second, they have lost their voice. They no longer know who they are. And neither do we. 

How can Apple fix this?
In the end, there's only one way Apple can fix this: by proving that they're innovative. At today's prices, I'm willing to stick around and see if the magic is still there.

But to prove themselves, Apple is going to have to do something that's rarely attempted, and even more rarely successful: cannibalize its best sellers.

Apple has a history of cranking out revolutionary products... and then creatively destroying them with something better. It's worked so far, but will it continue to?  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.

AMD Results: Better Than Expected Is Still Pretty Bad

On Thursday afternoon, troubled chip maker Advanced Micro Devices (NYSE: AMD  ) reported a non-GAAP loss of $0.13 per share on revenue of $1.09 billion. The revenue and earnings results were both slightly better than Wall Street expected, and AMD also guided Q2 revenue somewhat above expectations. AMD is attempting to transform its business away from its current reliance on PC sales, which seem to be in permanent decline. CEO Rory Read wants the company to focus on sales of embedded and semi-custom processors, graphics processors, and other growth initiatives, in order to diversify away from the company's bread-and-butter of selling x86 processors in competition with Intel (NASDAQ: INTC  ) .

That said, AMD's Q1 results were still pretty discouraging. Revenue was down more than 30% from the prior-year quarter, and the company swung from non-GAAP EPS of $0.12 in last year's Q1 to this year's loss. AMD expects to continue losing money and bleeding cash in the current quarter, before (hopefully) returning to profitability in the second half of the year. However, its guidance for a return to profitability depends to a large extent on the popularity of new products like Sony's PlayStation 4 and Microsoft's (NASDAQ: MSFT  ) expected Xbox 360 successor, as well as better customer acceptance of Windows 8. To put it another way, AMD's revival depends on things almost completely outside of the company's control. This does not sound like a good investment case to me.

Stabilizing the business
I will give Rory Read credit for taking decisive action to stabilize AMD's financial position and reduce its operating expenses. Considering the 31% slide in revenue last quarter, strong gross margin and reduced expenses kept the net loss relatively small. Furthermore, AMD was able to close a sale-leaseback transaction for its Austin campus in March, which generated $164 million of cash and kept the company's cash balance steady.

AMD is also entering a significant product launch cycle, and management believes it can retake share from Intel, particularly for entry-level PCs. The management team is also bullish about its ability to regain share in GPUs from NVIDIA (NASDAQ: NVDA  ) following new product launches later this year. However, the big long-term goal seems to be gaining embedded and semi-custom design wins, and AMD has made progress here by winning the slots for Nintendo's new Wii U, the PlayStation 4, and (reportedly) the new Xbox.

Problems linger
However, AMD's pursuit of game console design wins may prove futile. Early sales results for the Wii U have been poor, and there is no guarantee that the new PlayStation or Xbox entries will fare better. NVIDIA is making big bets on cloud gaming and mobile gaming with its GRID gaming platform and Project Shield handheld gaming device, both announced at CES earlier this year. Cloud gaming in particular could render the home game console obsolete, by centralizing the computing power on servers, while delivering the output to TVs, tablets, or even smartphones. Plenty of game console enthusiasts will upgrade, but there is a good chance that console sales peaked in the last generation.

Moreover, AMD still faces its traditional problem in the x86 market: Intel has far more resources at its disposal to build better products more profitably. Intel spent more than $2.5 billion on research and development last quarter, whereas AMD cut back to just $312 million. Even NVIDIA seems to be on pace to overtake AMD in R&D spending this year. I am skeptical that AMD can be so efficient with its R&D spending that it will be able to keep up with its deep-pocketed rivals. In the technology world, falling behind can quickly become fatal.

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Foolish conclusion
From a high-level perspective, AMD's "better-than-expected" results were still pretty bad. AMD needs a lot of good things to happen to become sustainably profitable. Windows 8 needs to become successful, game console sales need to rebound, and the company needs to keep up with Intel and NVIDIA despite a slim R&D budget. It's not impossible, but I'm still not willing to bet any money on an AMD turnaround.

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Why KLA-Tencor Shares Crashed

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of KLA-Tencor (NASDAQ: KLAC  ) are down today by about 8% after bottoming at a 10% loss in the morning. The market is not happy with the company's forward guidance, despite a decent earnings report for the fiscal third quarter.

So what: KLA's revenue of $729 million represented a 13% year-over-year decline, but still narrowly beat the $726.8 million consensus. Earnings per share of $1.01 were better, as that figure bested the $0.85 consensus by 19% on the upside. However, the company's upcoming quarter looks to be ugly -- KLA expects revenue in the $670 million to $730 million range, and EPS in the $0.66 to $0.86 range. Not only are these well below the current quarter's results, they also undershoot the Street's consensus figures of $763.2 million in revenue, and $0.97 in EPS.

Now what: This wasn't a pretty quarter, and guidance isn't pleasant, but KLA looks rather cheap at a 12.6 P/E with a 3% dividend yield after the drop. However, the guidance begs the question -- is this company simply becoming a value trap now? The stock has moved around a lot over the past year, but appears largely range-bound and, until today, KLA was near the top of its range. Without forward momentum, cheap won't matter. Investors need to see growth over the long term.

Want more news and updates? Add KLA-Tencor to your Watchlist now.

It's incredible to think just how much of our digital and technological lives are almost entirely shaped and molded by just a handful of companies. Find out "Who Will Win the War Between the 5 Biggest Tech Stocks?" in The Motley Fool's latest free report, which details the knock-down, drag-out battle being waged by the five kings of tech. Click here to keep reading.

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Tuesday, July 30, 2013

Best Growth Stocks To Own For 2014

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 Encore Wire (Nasdaq: WIRE  ) out of line? To figure that out, start by comparing the company's inventory growth to sales growth. How is Encore Wire doing by this quick checkup? At first glance, not so great. Trailing-12-month revenue decreased 9.2%, and inventory increased 0.3%. Comparing the latest quarter to the prior-year quarter, the story looks decent. Revenue grew 3.9%, and inventory expanded 0.3%. Over the sequential quarterly period, the trend looks healthy. Revenue dropped 4.1%, and inventory dropped 5.1%.

Best Growth Stocks To Own For 2014: Nordstrom Inc.(JWN)

Nordstrom, Inc., a fashion specialty retailer, offers apparel, shoes, cosmetics, and accessories for women, men, and children in the United States. It offers a selection of brand name and private label merchandise. The company sells its products through various channels, including Nordstrom full-line stores, off-price Nordstrom Rack stores, Jeffrey? boutiques, treasure & bond, and Last Chance clearance stores; and its online store,, as well as through catalog. Nordstrom also provides a private label card, two Nordstrom VISA credit cards, and a debit card for Nordstrom purchases. The company?s credit and debit cards feature a shopping-based loyalty program. As of September 30, 2011, it operated 222 stores, including 117 full-line stores, 101 Nordstrom Racks, 2 Jeffrey boutiques, 1 treasure & bond store, and 1 clearance store in 30 states. The company was founded in 1901 and is based in Seattle, Washington.

Advisors' Opinion:
  • [By Kevin1977]

    Director of Nordstrom Inc., Felicia D Thornton, bought 1,140 shares on 9/09/2011 at an average price of $47.89. Nordstrom, Inc. is one of the nation's fashion specialty retailers, with stores located in a number of states, including full-line stores, Nordstrom Racks, Faconnable boutiques, and free-standing shoe stores. Nordstrom Inc. has a market cap of $10.44 billion; its shares were traded at around $47.89 with a P/E ratio of 15.7 and P/S ratio of 1.1. The dividend yield of Nordstrom Inc. stocks is 2% Nordstrom Inc. had an annual average earnings growth of 27.3% over the past 10 years. GuruFocus rated Nordstrom Inc. the business predictability rank of 3.5-star.

    On August 11, Nordstrom Inc. reported net earnings of $175 million, or $0.80 per diluted share, for the second quarter ended July 30, 2011. This represented an increase of 20 percent compared with net earnings of $146 million, or $0.66 per diluted share, for the same quarter last year.Second quarter same-store sales increased 7.3 percent compared with the same period in fiscal 2010. Net sales in the second quarter were $2.72 billion, an increase of 12.4 percent compared with net sales of $2.42 billion during the same period in fiscal 2010.

    Last week, Director Felicia D Thornton bought 1,140 shares of JWN stock.

    Executive Vice President Ken Worzel and Director Philip G Satre bought shares in August.

Best Growth Stocks To Own For 2014: Eastern Insurance Holdings Inc.(EIHI)

Eastern Insurance Holdings, Inc., through its subsidiaries, provides workers compensation insurance and reinsurance products in the United States. The company?s Workers Compensation Insurance segment provides traditional workers compensation insurance coverage products, including guaranteed cost policies, policyholder dividend policies, retrospectively-rated policies, deductible policies, and alternative market products to employers. This segment distributes its workers? compensation products and services through its independent insurance agents primarily in Pennsylvania, Delaware, North Carolina, Maryland, Indiana, and Virginia. Its Segregated Portfolio Cell Reinsurance segment offers alternative market workers compensation solutions comprising program design, fronting, claims administration, risk management, segregated portfolio cell rental, asset management, and segregated portfolio management services to individual companies, groups, and associations. Eastern Insurance Holdings, Inc. is headquartered in Lancaster, Pennsylvania.

Hot Cheap Stocks To Watch Right Now: Sara Lee Corporation(SLE)

Sara Lee Corporation engages in the manufacture and marketing of a range of branded packaged meat, bakery, and beverage products worldwide. Its packaged meat products include hot dogs and corn dogs, breakfast sausages, sandwiches and bowls, smoked and dinner sausages, premium deli and luncheon meats, bacon, beef, turkey, and cooked ham. It also offers frozen baked products, which comprise frozen pies, cakes, cheesecakes, pastries, and other desserts. In addition, Sara Lee provides roast, ground, and liquid coffee; cappuccinos; lattes; and hot and iced teas, as well as refrigerated dough products. The company sells its products under Hillshire Farm, Ball Park, Jimmy Dean, Sara Lee, State Fair, Douwe Egberts, Senseo, Maison du Caf Advisors' Opinion:

  • [By Carlson]

    Director of Sara Lee Corp., James S Crown, bought 37,500 shares on 9/12/2011 at an average price of $17.5. Sara Lee Corporation is a global manufacturer and marketer of high-quality, brand-name products for consumers throughout the world. Sara Lee Corp. has a market cap of $10.24 billion; its shares were traded at around $17.5 with a P/E ratio of 19.9 and P/S ratio of 1.2. The dividend yield of Sara Lee Corp. stocks is 2.7%.

    On August 11, Sara Lee Corp. reported earnings for the fourth quarter 2011. The fourth quarter included an 8% increase in adjusted net sales from continuing operations to $2.3 billion; 9% reported net sales increase, 40% increase in adjusted operating income to $189 million; and reported operating income increase of 19%.

    Last week, Director James S Crown bought 37,500 shares of SLE stock. Executive Chairman Jan Bennink bought 58,400 shares in August.

Best Growth Stocks To Own For 2014: Buffalo Wild Wings Inc.(BWLD)

Buffalo Wild Wings, Inc. engages in the ownership, operation, and franchise of restaurants in the United States. The company provides quick casual and casual dining services, as well as serves bottled beers, wines, and liquor. As of July 26, 2011, it had 773 Buffalo Wild Wings locations in 45 states in the United States, as well as in Canada. The company was founded in 1982 and is headquartered in Minneapolis, Minnesota.

Advisors' Opinion:
  • [By Fabian]  

    While Chipotle has captured most of the attention among the restaurant stocks, Buffalo Wild Wings (BWLD: 56.62 0.00%) could be 2011’s big winner. Wall Street is expecting 19% earnings growth from Buffalo Wild Wings in 2011 which is only slightly lower than Chipotle’s 20% growth rate. However, BWLD trades at only 18x consensus 2011 estimates while CMG trades at a pricey 40x. On an EBITDA basis, Chipotle trades at over 20x, while Buffalo Wild Wings trades at less than 9x.

Best Growth Stocks To Own For 2014: Thoratec Corporation(THOR)

Thoratec Corporation engages in the development, manufacture, and marketing of proprietary medical devices used for circulatory support. The company?s primary product lines include ventricular assist devices, such as HeartMate II, an implantable left ventricular assist device consisting of a rotary blood pump to provide intermediate and long-term mechanical circulatory support (MCS); and HeartMate XVE, an implantable and pulsatile left ventricular assist device for intermediate and longer-term MCS. Its ventricular assist devices also comprise Paracorporeal Ventricular Assist Device, an external pulsatile ventricular assist device, which provides left, right, and biventricular MCS approved for bridge-to-transplantation (BTT), including home discharge, and post-cardiotomy myocardial recovery; and Implantable Ventricular Assist Device, an implantable and pulsatile ventricular assist device designed to provide left, right, and biventricular MCS approved for BTT comprising hom e discharge, and post-cardiotomy myocardial recovery. The company also provides CentriMag, an extracorporeal full-flow acute surgical support platform that offers support up to 30 days for cardiac and respiratory failure. In addition, it offers PediMag and PediVAS extracorporeal full-flow acute surgical support platforms designed to provide acute surgical support to pediatric patients. The company sells its products through direct sales force in the United States, as well as through a network of distributors internationally. Thoratec Corporation was founded in 1976 and is headquartered in Pleasanton, California.

Advisors' Opinion:
  • [By McWillams]

    Wall Street is expecting Thoratec’s (THOR: 30.70 0.00%) growth rate to accelerate to 15% next year with earnings growth of over 20%. That type of growth has Wall Street analysts bullish on the medical device stock. The stock has a consensus price target of $38 and some analysts think THOR could go to $50.

Best Growth Stocks To Own For 2014: Intuitive Surgical Inc.(ISRG)

Intuitive Surgical, Inc. designs, manufactures, and markets da Vinci surgical systems for various surgical procedures, including urologic, gynecologic, cardiothoracic, general, and head and neck surgeries. Its da Vinci surgical system consists of a surgeon?s console or consoles, a patient-side cart, a 3-D vision system, and proprietary ?wristed? instruments. The company?s da Vinci surgical system translates the surgeon?s natural hand movements on instrument controls at the console into corresponding micro-movements of instruments positioned inside the patient through small puncture incisions, or ports. It also manufactures a range of EndoWrist instruments, which incorporate wrist joints for natural dexterity for various surgical procedures. Its EndoWrist instruments consist of forceps, scissors, electrocautery, scalpels, and other surgical tools. In addition, it sells various vision and accessory products for use in conjunction with the da Vinci Surgical System as surgical procedures are performed. The company?s accessory products include sterile drapes used to ensure a sterile field during surgery; vision products, such as replacement 3-D stereo endoscopes, camera heads, light guides, and other items. It markets its products through sales representatives in the United States, and through sales representatives and distributors in international markets. The company was founded in 1995 and is headquartered in Sunnyvale, California.

Advisors' Opinion:
  • [By Jim Lowell]

    Intuitive Surgical (ISRG: 329.49 0.00%) is an expensive stock and their stock price is currently well below the $400 level that it flirted with in April. However, the stock is a compelling growth story with revenues and earnings expected to climb 19% in 2011. The company faces little competitive pressure and 2011 is likely the year that consumers opt for procedures that they delayed in 2009-10. That could produce some blowout earnings results for ISRG in 2011.

The Carbon Bubble and Disappearing Value

Burning all the carbon reserves currently in corporate and government hands would take atmospheric carbon dioxide levels way beyond what scientists consider safe. As a result, the powerful and deep-pocketed fuel lobby has a vested interest in convincing people that burning fossil fuel is unrelated to climate change. Indeed, companies like ExxonMobil (NYSE: XOM  ) spend a lot of money trying to discredit climate science in the public domain.

HSBC recently conducted an analysis that looked at European oil majors' at-risk carbon reserves. The study found Norway's Statoil (NYSE: STO  )  to be the worst affected, with approximately 17% of its market capitalization at risk. HSBC also calculated that 6% of BP's  (NYSE: BP  ) reserves are at risk, along with 5% of Total's (NYSE: TOT  ) and 2% of Shell's  (NYSE: RDS-A  ) . 

John Vechey of PopCap Games recently joined The Motley Fool for a climate change summit. His first panel guests were Dr. Rachel Cleetus, a climate economist with the Union of Concerned Scientists, and Dr. Joe Casola, the program director for science and impacts at the Center for Climate and Energy Solutions. They both offer insights in this video into what may be a looming carbon bubble.

Best Clean Energy Stocks To Own For 2014

With the swelling of the global middle class, energy consumption will skyrocket over the next few decades, just as climate change and environmental pressures are putting the squeeze on carbon-intensive energy sources. Long-term investors know that you want exposure to energy solutions now. We've picked one incredible natural gas company that presents a rare "double-play" investment opportunity today. We're calling it "The One Energy Stock You Must Own Before 2014," and you can uncover it today, totally free, in our premium research report. Click here to read more.

Slow Retail Sales Can't Stop the Dow

The Dow Jones Industrial Average (DJINDICES: ^DJI  ) crept higher once again today, gaining 20 points, or 0.13%, to close at 15,484, after briefly topping 15,500. Strong earnings from Citigroup helped reassure Wall Street, going into the heart of earnings season and coming on the heels of solid reports from JPMorgan Chase and Wells Fargo last week. The nation's No. 3 bank by assets reported adjusted profits up 26% on strong investment banking earnings to $1.25 a share, topping the $1.18 analysts expected. Shares finished up 2%.

Elsewhere, June retail sales disappointed, growing just 0.4% on expectations of 0.7%. Excluding auto sales, growth was flat, and spending in several discretionary categories such as restaurants actually dropped from May. Retail sales are always a closely watched economic indicator, as consumer spending is one of the biggest drivers of economic growth. In the day's other noteworthy reports, the July Empire Stare Manufacturing index blew past estimates of 3.6, coming in at 9.5, indicating that manufacturing growth remains strong in the Northeast, and May business inventories topped estimates, growing 0.1%.

Back on the Dow, Boeing (NYSE: BA  ) shares bounced back impressively today, gaining 3.7% after sliding 4.7% on Friday, when a fire broke out in one of its Dreamliner 787 jets parked at Heathrow airport. Today, however, shares rebounded as airlines said they were confident in the safety of the new composite jet, and early reports said the source of the fire was different from what had plagued it before. As of the time of writing, investigators were looking into a battery made by in Honeywell in an emergency locator transmitter, a separate issue from the lithium-ion battery that had caused the fires at the beginning of this year.

Microsoft (NASDAQ: MSFT  ) shares were also moving north today, climbing 1.4% as the software maker announced that it would throw its hat into the smart-watch ring amid increasing rumors about Apple's iWatch. The new Paparazzi smartwatch will have a 1.5-inch screen and connect remotely with other Microsoft mobile products. Analysts expect to be on shelves in 2014. After arriving late to the smartphone and tablet market, Microsoft seems to have learned from those blunders and is getting in on the first wave of smart watches. Notably, the company introduced a smart watch nine years ago, but the product flopped, as the market seemed to not be ready for it.

5 Best Tech Stocks To Own Right Now

Finally, investors had their first chance to react to AT&T's (NYSE: T  ) decision to buy Leap Wireless for $1.19 billion, with the stock closing down 0.7% after shares fell 1.6% at opening. AT&T's purchase caused Leap stock to more than double as Ma Bell is offering a steep premium. Still, if the acquisition goes through, it will give AT&T much-needed spectrum and 7 million additional subscribers.

After Citigroup's strong report, investors may be wondering if it's time to get back into banking stocks. Well, there was one banking giant that's got a track record that can't be beat. Find out which one rises above the rest 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.

Monday, July 29, 2013 This Teflon Stock Hits a New High

On Thursday afternoon, (NASDAQ: AMZN  ) reported a small loss for Q2, missing analyst estimates for EPS of $0.05. Revenue grew 22% year over year to $15.7 billion, meeting analyst expectations. The strengthening of the U.S. dollar over the past year was partly to blame; holding exchange rates constant, revenue growth would have been 25%.

The outlook for Q3 was also disappointing. Management expects revenue to grow in the range of 12%-24% year over year, implying further deceleration at the midpoint. Moreover, Amazon expects to post an operating loss of $440 million to $65 million. The company has recently been offering very conservative guidance on operating income, but given the magnitude of the projected loss, it seems unlikely that Amazon will reach breakeven this quarter.

Amazon's mixed results and weaker-than-expected guidance led Therese Poletti of MarketWatch to state that "Amazon investors may start to get fed up." Poletti notes that Amazon trades for more than 100 times forward earnings estimates, far ahead of e-commerce rivals like eBay (NASDAQ: EBAY  ) . Yet while Amazon initially dropped after-hours following the report, the stock surged to an all-time high on Friday.

10 Best Energy Stocks To Buy Right Now

AMZN Chart Five-Year Price Chart. Data by YCharts

For now, Amazon seems like a "Teflon stock": bad news slides right off. Most Wall Street analysts seemed to ignore or discount the bad aspects of Thursday's report, instead focusing on positive operating income, increases in gross profit, or other factors that seem more bullish.

However, with Amazon's market cap now approaching $150 billion, the company will have to produce tens of billions of dollars of annual cash flow at some point down the road to support long-term share appreciation. None of Amazon's businesses seem likely to produce this level of profitability in the foreseeable future. Investors should instead consider locking in profits now.

Bright spots
There certainly were some bright spots in Amazon's earnings report. While the international segment is being weighed down by currency fluctuations and economic weakness abroad, North American sales grew an impressive 30% year over year, showing some acceleration from the prior quarter.

That said, growth in the "electronics and general merchandise" category -- which makes up about two-thirds of Amazon's total sales -- is clearly on a downward trajectory. North American sales in that category grew 31% last quarter, after growing 41% in Q2 2012 and 67% in Q2 2011. As this category continues to mature, its growth rate will moderate even further.

A similar trend has already played out in the media business, where Amazon got its start. Despite investing lots of money in the Kindle line of e-readers and tablets in order to drive content sales, North American media sales have grown by just 15% year to date, following 17% growth last year.

20% growth is unsustainable
Many analysts seem to expect Amazon to continue growing the top line by 20% annually for many more years. That projection implies that Amazon will be able to do something no other retailer has ever achieved, by defying the natural pattern of slowing revenue growth caused by scale. (Think of it this way: If you have $50 billion in annual sales, you can grow by 20% by adding $10 billion the next year; if you start with $200 billion in annual sales, you would need to add $40 billion in one year to hit 20% growth.)

Wal-Mart (NYSE: WMT  ) , which today seems like a lumbering behemoth, was once in the position that Amazon occupies now. In the early 1990s, Wal-Mart regularly grew revenue by more than 20% annually, and it even achieved revenue growth of 20% in FY 2000, when sales jumped from less than $138 billion to $165 billion. However, from that point onward, Wal-Mart's revenue growth rate has inexorably moved toward the low-mid single digit range that is normal today.

The same process is bound to play out at Amazon, and the only question is how quickly growth will decelerate. If you measure Amazon by "gross merchandise value" by including total sales generated by third-party sellers on Amazon's site, Amazon already generates nearly $100 billion in annual sales (or more, based on some estimates). Just as Wal-Mart's growth eventually hit a wall as it ran short of new markets and categories to penetrate, Amazon's will, too.

Foolish bottom line
I expect Amazon's revenue growth rate to slip below the 20% threshold for good in the next two to three years. At some point further down the road -- perhaps 10 years from now, perhaps 15 -- the growth rate will drop into the single digits.

There's nothing unusual or "bad" about any of this;'s business is clearly very healthy. The problem is Amazon's runaway stock price. Not only does the stock have a forward P/E above 100, but it would have a very high valuation even if operating margins immediately returned to historical highs.

Analysts' uber-bullish expectations are setting up long-term investors for disappointment down the road. The company's long-term upside simply cannot justify today's stock price. Eventually Amazon's Teflon will wear off, and when it does, the stock is likely to drop significantly.

Amazon and Wal-Mart are locked in a battle for retail supremacy.  If you want to learn more about how Amazon and another mass retailer are challenging Wal-Mart's dominance, take a look at The Motley Fool's special free report: "The Death of Wal-Mart: The Real Cash Kings Changing the Face of Retail." In it, you'll see how these two cash kings are able to consistently outperform and how they're planning to ride the waves of retail's changing tide. You can access it by clicking here.

50 Ways to Make Money at Home and Online

In this economy, making money online or part-time is an attractive proposition. It may seem intimidating at first, but don't worry -- you needn't be a design maven, crochet whiz or computer savant to earn a little extra on the side. Here are a few ways to turn what you currently have (stuff, skills, un-skills) into a little extra cash.

Plug your money leaks
Remember that while cutting back on expenses definitely helps your budget, the easiest way to save money is to make more. Still, we'll start off with some easy tips to stop bleeding money where it doesn't actually help much.

1. Refinance your mortgage
Interest rates are at an all time low, and many families are considering refinancing their home to save on monthly mortgage payments. Determine whether or not refinancing will save you money in the long term by following this guide.

2. Switch providers
Don't assume that your cable, phone and Internet bills are locked into a slow but inexorable climb. Taking the first provider that comes along is a great way to waste money that can be saved elsewhere. Once you reach the terms of your contract, get on the phone or in an office and negotiate your bill down – or at least get a few perks thrown in for free.

3. Get rid of cable
Cable can rack up a hefty bill over a year, especially when you keep pay-per-view, premium channel, and miscellaneous costs in mind. Opt for online providers like Netflix or Hulu Plus that let you stream shows directly onto your computer, mobile device, or TV.

Pro tip: Switch between 30-day trial periods of Netflix, Hulu Plus and Amazon Prime to get a full season of free watching.

4. Use credit cards with the best rewards
The best parts about credit cards are the perks and rewards that come with them. By using a card with shoddy rewards or cash back, you are doing yourself and your budget a disservice. Find a credit card that rewards wherever you spend the most, whether that's travel, gas, groceries, or (ohmigod) shoes -- the NerdWallet credit card tool makes personalized recommendations based on your own spending habits.

Pro tip: Use the calculator button to further customize your recommendation.

5. Invest wisely
You're never too young to start investing -- in fact, the time to have an aggressive (high risk, high reward) profile is when you're younger, and you don't plan to use the money for a couple decades. But there's no reason to pay top dollar for actively managed mutual funds. Despite the prestige and high fees, active funds outperform the market only 24% of the time. You're much better with an index fund, which has much lower fees and will probably get you a better return for your money. Stop paying to lose money!

6. Pay off your debt
You know how I just told you to invest? Paying off high-interest debt is the best investment you can make. It's virtually impossible to get a guaranteed 12% return on your investments -- unless you're getting rid of credit card debt. Get in the black first before you start looking for babies that talk about stocks. Check out our in-depth article on getting rid of debt for guidelines and ways to lower the interest on your debts.

7. Improve your credit score
This one is a no-brainer. There are multiple sites that let you check your credit score for free. After finding out where you stand, work on improving your score and contact your credit card, personal loan or other issuer to negotiate a lower interest rate.

8. Maximize your tax returns
A great way to boost your income part time happens during a particular part of the year. Take advantage of tax loopholes and exceptions to maximize your long-anticipated tax refund check.

9. Use rewards malls and cashback websites
Little-known fact: You can earn cash back for the money you spend online anyway, just by clicking through another website first. Your credit card probably has a rewards mall that offers 5% back or more on everything from Expedia to Macy's to Zales, and even if it doesn't, you can use straight-up cash-back sites like eBates or Upromise to get an automatic discount on online purchases.

10. Take advantage of rebates and coupons
Often, stores will advertise that they'll beat the lowest price offered by any other competitor. Many credit cards also give price match guarantees, paying the difference if the price drops below a certain amount after you've made the purchase. Check your card's fine print for details. Also, use coupon comparison tools to score quick deals without scouring the Internet or pawing through your neighbors' mail.

11. Consider a flexible savings account (FSA)
Your employer may offer an FSA, which allows you to cover medical expenses not paid by insurance tax-free. This can be anything from out-of-pocket costs to prescriptions to dependent coverage. Because it's tax-advantaged, you'll save up to 30% on medical expenses. Keep in mind, though, that you lose any funds you don't spend at the end of the year, so you need to know your budget well. If you have a high-deductible insurance plan, you can also contribute to a health savings account (HSA), which doesn't lose money at year-end.

Turn money into more money
You can set policies in place to grow your existing money further. Someone pretty smart once said that compounding is the greatest force in the universe. Keep in mind that both of the following techniques compound, meaning that taking action now will yield even larger benefits in the future.

12. Max out your IRA and 401(k)
Max out your 401(k) and IRA contributions every year -- not only will you receive a tax benefit, but given the low interest-rate environment, you're much better putting your money in the markets than sticking it into a savings account that doesn't beat inflation. A 22-year-old who invests $5,000 in an IRA and never invests again will enjoy $137,000 at retirement, compared to just $101,000 if she invested in a regular savings account. It doesn't matter how old you are -- unless you're paying off debt, the time to start saving for retirement is now.

Hot Clean Energy Stocks To Own For 2014

13. Ask for a raise
Like we said, saving money is all well and good, but making more money is even better. Try negotiating for a raise -- even in a tough job economy, sitting down at the bargaining table with politeness, confidence and respect for yourself and the organization can have its benefits. Here's a great flow chart scripting a possible conversation -- preparation is key.

Pro tip: Catch your boss when she's in a good mood, but don't let her know you know she's in a good mood.

Mo' money, less clutter
Okay, let's be honest. Chances are, you have too much stuff. If you can identify high-value items and present them well, you can have a cleaner, more simple living space as well as money to spend on what you really want.

14. Have a garage sale
Wipe off the dust, clear out the storage closet, and set up a garage sale. Put some effort into presentation: Items lovingly arrayed on a plastic tablecloth will sell better than those chucked into a cardboard box. If you don't have enough clutter to warrant a garage sale on your own, rope a few other neighbors into a neighborhood-wide sale.

15. Value your antiques and collectibles
Dig into storage, sell off what is valuable and throw away the rest. Before you sell indiscriminately, get your collectibles, antiques, and heirlooms appraised. You may be selling rare valuable items at underpriced rates otherwise. After you've consulted with an expert, do a gut check by looking at eBay and similar websites to see if the price is reasonable.

16. Free and flea market flipping
Browse the "free" section on Craigslist or your local flea market for interesting items. Add your own special touches, restore the items, and resell for a profit. Buy interesting items both online and at your local flea market and restore them and resell for a profit. Flea Market Flips offers some great ideas for trash-to-treasure projects.

17. Sell your old mobile phone
Given the rate at which we churn through cell phones these days, you probably have an old cell phone lying around. Amazon offers gift cards for fully functional iPhones, while specialty sites like Gazelle and Swappa specialize in cash for cell phones.

18. Turn in printer cartridges
Many office supply stores, from Staples to Office Depot, will offer credits for empty printer cartridges. Not only is it good for your wallet, but it's good for the environment.

Take part in the share economy
If you have an extra anything, chances are there's someone who'd like to borrow it from you. As the so-called "share economy" grows, you have an increasing opportunity to get cash for your idling machines and empty space.

19. Rent out an underused parking spot
Parking spots can be a hot commodity, particularly in crowded cities. If you happen to be holding on to a coveted spot that you do not use all the time, put it up for rent on Craigslist. If your landlord or building offers you parking at a discount rate, consider seeing whether you can rent it out for a higher price -- assuming you're allowed to do so, of course.

20. Rent out a spare bedroom
If that extra guest bedroom in your midtown Manhattan walk-up is left unused, consider renting it out on or other vacation rental sites. Make sure that everything is kosher with your rental agreement beforehand.

Pro tip: Even if you don't have a spare bedroom, chances are there's a college kid willing to pay for four walls, a door, an air mattress, a shower and more privacy than a hostel affords.

21. Rent out your car
Don't need your car on the weekend or during the day? Going on a trip? Services like Getaround and RelayRides let you rent out your car by the hour, while FlightCar arranges for an incoming traveler to rent your car rather than you having to pay for airport parking and letting it sit idle.

Turn talent into a paycheck

22. Crafty? Crochet away!
Have a penchant for crocheting, jewelry-making or embroidery? Sell your goods on Etsy is the go-to site for artisans and simply impassioned folk selling home goods, paintings, and knickknacks.

Pro tip: Offer to make personalized products -- not only does it establish an emotional connection with the customer, but it often brings in more income.

23. Become a freelance writer
Sites like eHow and Livestrong will pay by the article for content on anything from business to tech to how to fart. While they say you'll need "professional experience" or a degree or certification, honestly, there's not much you'll be asked to write that a quick tour of Google can't make you an expert on.

24. Take up a skilled freelance gig
Websites like TaskRabbit, Odesk, and Craigslist offer opportunities to avid freelancers to pick up programming, design, and marketing jobs on the side. Working on a per-project basis lets your balance your side job with your current one. Sites like can also offer a leg up.

25. Small-scale catering
Fancy yourself to be the next Iron Chef? Take those skills to the marketplace by setting up your own catering business that you can run out of your own kitchen on the weekend. Cook for dinners, birthday parties and friends' events; or just bake a bunch of cookies and stand outside the nearest bar at 2 a.m.

Heads up: Be careful to comply with food safety laws.

26. Become an online travel agent
Have a knack for finding the best deals on Expedia? Hawk your services as a low-cost alternative to full service travel agencies. You can earn a pretty commission by doing what you love.

27. Bartend
The great thing about nightlife is that it doesn't conflict with day life. Pick up late-night or weekend shifts to earn some extra income without sacrificing hours at your current job or studies.

28. Tutor
If you were an SAT whiz, there is a huge market for competitive parents and children looking for private tutors. Join a large company like Kaplan or Princeton Review, or tutor at your own schedule by going private.

29. Affiliate marketing
Do you write emails to your friends and family that actually get read? Are you blessed with a silver tongue, razor wit or keen eye for society? Write it up. Join an affiliate network (Amazon has a good one) to earn money whenever someone buys the product by going through your website or blog.

Turn lack of talent into a paycheck
You don't need to be a master craftsman, mixologist or Iron Chef to earn supplementary income. Here are some income boosters that don't require specialized skills.

30. Get paid to be a reviewer
Although you may fancy your Yelp Elite status, all those reviews really did not pay for much but a fancy badge and a few exclusive invites. Take your review skills to the marketplace and earn $1-$50 per review, depending on quality and technical knowledge required.

31. Sell your photos
Stock photo websites like iStockPhoto purchase images from everyday people. Even if you aren't Ansel Adams, the most commonly requested (and often overlooked) photos often include everyday images like stop signs, coffee cups and other everyday objects.

32. Resell food
True story: In college, Zappos founder Tony Hseih bought pizza from a parlor down the road and resold it at a profit in his college dorm room. His friend Alfred Lin would always buy two pizzas a night -- Hseih assumed he was just hungry. Turns out Lin was actually taking the pizzas upstairs and selling them at a slice for an even tidier profit. He later went on to become the Zappos COO.

Anyway, long story short, you can probably find lazy, hungry college kids and young adults outside of bars and in parks. They will happily buy pizza, beer and water by the unit and pay handsomely for the convenience.

Heads up: This is not exactly FDA-approved.

33. Referrals
Services as diverse as your cable company to your orthodontist will pay a nice little gift for both referrer and referred. Small businesses and companies just getting off the ground are often the most likely to give referral bonuses.

Pro tip: Your employer might well give referral bonuses, too, so scour your personal networks to see if you know a good fit for open positions.

34. Survey websites
Although those posters on the side of the road may overshoot how much you can potentially make by simply answering surveys online, generating a side income from online surveys is still possible and profitable.

35. You must be good at babysitting
Get yourself registered on a reliable sitter search website and get to work. Babysitters can make great pay and get some benefits like free Wi-Fi thrown in as well.

36. You aren't? Are you good at petsitting?
Most pet owners actually cannot afford a luxury weekend for their pet at the kennel. Price your rates competitively during your stint as a pet sitter and make sure your place allows for multiple pets. Many sites, such as, offer job boards for pet sitters and those looking for animal care.

37. Really? Still? Okay, how about house-sitting?
Even if you hate kids and animals, you can look for house-sitting gigs through personal referrals, Craigslist, or websites like Mind My House.

Pro tip: Double up the income by renting our your own domicile while house-sitting.

38. Participate in clinical research
Hospitals and academic medical centers live, breathe, and thrive on clinical trials. Most participants are paid a good amount of money for their dedication to research and the trial. Do not overload on this option, as being enrolled in too many trials with conflicting pharmaceutical regiments may lead to skewed results and a medically unhappy you.

39. Engage in market research
Market research is the bread and butter of advertisement agencies. Many large ad agencies will conduct large focus groups to better tailor their strategies. Contact a local or large market research firm and secure your spot in a future group.

40. Become a tour guide
If you happen to know a bit more history concerning the old town square than the average citizen (or if you can just Wikipedia it), consider running your own personal tour guide business. Walking tours are en vogue, and you can advertise your services on TripAdvisor for tourists looking for an insider's perspective.

41. Find seasonal work
Snow shoveling, amusement park work, holiday staffing and lifeguarding are all seasonal work options that are low commitment and can be done sparingly according to your schedule. You want flexibility, employers want flexibility -- it works.

42. Become a part-time care taker
With the baby boomer generation retiring, many older folk in your community will require the services of a caretaker to help them around the house and with chores. Make a side income at a job that helps you contribute to your local community.

43. Host a foreign exchange student
Hosting an exchange student can be a source of cultural, as well as material, enrichment. Check out the number of hosting sites online, or contact your local high school or college for international student programs.

44. Data entry
Pick up administrative and data entry jobs that can be done by telecommuting, on Craigslist, or at your college campus's career center.

45. Become an on-site manager or landlord
Earn a spot to live rent-free while making a side income as an on-site manager for apartment building owners that live outside of town.

46. Garden
Turn your passion for all things green into a side business by offering landscaping and gardening tutorials to fellow flower aficionados.

47. Donate plasma, sperm or blood
These three precious bodily liquids are always in demand, and you can often get paid for the service. Be careful, though: Only go with reputable organizations that won't leave you in an ice-filled bathtub minus a kidney.

Heads up: The Red Cross recommends waiting 28 days between plasma donations and 56 between blood donations, and not exceeding 13 plasma donations a year.

48. Become a mystery shopper
Yes, they really do exist. Market research firms and companies doing internal audits often want to see how their stores perform from a customer's perspective, so sign up to become their eyes and ears.

49. Micro-task
Services such as Amazon Mechanical Turk connect businesses with a cohort of individuals looking to make a little cash on the side (i.e., you), in order to crowdsource small tasks. You can walk away with a nice check or gift card for a few hours of work.

50. Join a car service
The taxicab industry used to be limited to a handful of licensed professionals. Now, companies like Sidecar, Lyft and Flightcar allow anyone with a license to perform the same functions as a taxi driver, but with greater flexibility, and sometimes better pay.

JPMorgan Deserves a Dimon Discount

What gives JPMorgan Chase (NYSE: JPM  ) its premium valuation? According to one analyst, it's having a CEO who certifies flawed internal controls processes and otherwise obscures risk so shareholders think their investment is safer than it actually is.

That's right... according to Charles Peabody, an analyst at Portales Partners, "shareholders may just find that [JPMorgan's stock] loses its premium valuation" if Jamie Dimon leaves the company. Peabody elaborates, "If that were to occur, is there someone with Mr. Dimon's talents capable of stepping into the breach?"

Here's why I think that's a bunch of baloney.

Dimon's "talents"
Given Dimon's recent track record of ticking off regulators, misleading shareholders, and taking on excessive risk, I don't believe his particular set of "talents" hold so much appeal. Here are just a few of his most egregious recent sins:

After certifying the adequacy of JPMorgan's internal controls in May of 2012, the company had to restate its financials and report material weaknesses in its internal controls in June. Dimon obscured risk from shareholders by dismissing investor concerns about the London Whale trades by calling the threat a "tempest in a teapot" even though he was allegedly aware of the size and complexity of the bet and the losses already incurred from it. The company took on excessive risk under Dimon through the London Whale trades and chose to deal with risk limit breaches by ignoring them and by altering risk models to obscure the risk. An investigation by the U.S. Senate found that Dimon withheld profit and loss data from federal regulators. One employee of the Office of the Comptroller of the Currency (OCC) recalled that the bank would regularly challenge findings and recommendations, and that bank executives would even yell at OCC examiners and call them "stupid."

10 Best Stocks To Watch For 2014

Premium valuation
In the face of Dimon's missteps, I suspect much of JPMorgan's premium valuation has resulted from some of the achievements reported in its 2013 preliminary proxy, including:

Reported a 15% return on tangible common equity Put up record earnings per share of $5.20 in 2012 Offered five-year compound annual growth rate of 7% in its book value per share

But as I pointed out in a previous article, Dimon's propensity to hide risk by using misleading pricing and risk models suggests that shareholders may not be able to rely on these performance numbers. Let's not forget that it was only a year ago that the London Whale blew a $6 billion hole in JPMorgan's balance sheet, a trade that Dimon obfuscatingly attributed to poor hedging.

To account for this possibility, I think rational investors should apply a "Dimon discount" when valuing JPMorgan's stock to account for the possibility that these performance numbers still aren't trustworthy, or that their achievement still relies on excessive risk.

A familiar tune
When Aubrey McClendon was still the CEO of Chesapeake (NYSE: CHK  ) , the company suffered from a reduced valuation that became known as the "Aubrey discount," even after he lost his seat as chairman. But once the company announced that McClendon was leaving the company, investors bid up the stock price.

While it's not as clear that Dimon is as corrupt as McClendon, I believe investors would do well to take a similar approach to JPMorgan. I think the missteps highlighted above demonstrate that Dimon has repeatedly shown himself to be incompetent, prone to abuse his power, or both. For these reasons, I believe shareholders would do well to remain wary of JPMorgan under his leadership, and to reserve a premium valuation for a more trustworthy leader.

With big finance firms still trading at deep discounts to their historic norms, investors everywhere are wondering if this is the new normal, or whether finance stocks are a screaming buy today. The answer depends on the company, so to help figure out whether JPMorgan is a buy today, I invite you to read our premium research report on the company. Click here now for instant access!

Sunday, July 28, 2013

Top 5 Dividend Stocks For 2014

It's hard to believe, for me at least, that I've been a Motley Fool member for a decade now. Some of you might have passed that milestone a while ago while others might be just getting to know us here at the Fool. Either way, I thought I would reflect back at three of the most important lessons I've learned from hanging around other Foolish investors these past 10 years.

Dividends are dynamic
When I first discovered the Fool a decade ago I was a broke grad school student looking to get my financial future started on the right foot. I didn't have a lot to invest in those days; in fact, my first stock purchase was $50 worth of Sun Microsystems. While that purchase didn't end up making me as rich as I thought it would, it started me on a very profitable journey.

It was in sitting and watching Sun do nothing that the Fool taught me about the wonderful world of dividend-paying stocks. Not making a whole lot of money at the time, I loved the idea that my money could make money for me. I got hooked on buying dividend-paying stocks and seeing the income credited to my account every few months.

Top 5 Dividend Stocks For 2014: Philip Morris International Inc(PM)

Philip Morris International Inc., through its subsidiaries, engages in the manufacture and sale of cigarettes and other tobacco products in markets outside of the United States. Its international product brand line comprises Marlboro, Merit, Parliament, Virginia Slims, L&M, Chesterfield, Bond Street, Lark, Muratti, Next, Philip Morris, and Red & White. The company also offers its products under the A Mild, Dji Sam Soe, and A Hijau in Indonesia; Diana in Italy; Optima and Apollo-Soyuz in the Russian Federation; Morven Gold in Pakistan; Boston in Colombia; Belmont, Canadian Classics, and Number 7 in Canada; Best and Classic in Serbia; f6 in Germany; Delicados in Mexico; Assos in Greece; and Petra in the Czech Republic and Slovakia. It operates primarily in the European Union, Eastern Europe, the Middle East, Africa, Asia, Canada, and Latin America. The company is based in New York, New York.

Advisors' Opinion:
  • [By Fitz Gerald]

    Philip Morris International Inc. (NYSE: PM), through its subsidiaries, engages in the manufacture and sale of cigarettes and other tobacco products in markets outside of the United States. The company has raised dividends every year since it was spun-off from Altria (MO) in 2008 and yields 3.70%.

  • [By Louis Navellier]

    Philip Morris International (NYSE:PM) is involved with the manufacture and sale of cigarettes and other tobacco products in over 180 countries across the globe. Year to date, PM stock is up 16%, compared to a loss of nearly 2% for the Dow Jones.

  • [By Michael Brush]

    Philip Morris International (PM) has a dividend yield of 3.7%.

    This company is the world's second-biggest cigarette seller, after China National Tobacco. Philip Morris International controls the rights outside the United States to such brands as Marlboro, Virginia Slims and Parliament. So it's positioned to sell more cigarettes as smokers in rapid-growth emerging markets earn more and trade up to premium brands.


    Insiders continue to buy the stock, suggesting room for further appreciation. And, of course, tobacco's addictive nature assures steady revenue. If you oppose smoking for moral, health or other reasons, this stock is not for you. As an ex-smoker, I'd understand.

  • [By MelvinPasternak]

    Philip Morris International Inc. (PM), through its subsidiaries, manufactures and sells cigarettes and other tobacco products. The company has raised distributions since the spin-off from Altria Group in 2008. The last dividend increase was 20.30% to 77 cents/share. Analysts are expecting that Philip Morris International will earn $5.22/share in 2012. I expect that the quarterly distribution will reach 85 cents/share in 2012. Yield: 3.90%

Top 5 Dividend Stocks 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.

Top 5 Safest Stocks To Watch For 2014: UniSource Energy Corporation(UNS)

UniSource Energy Corporation engages in the electric generation and energy delivery businesses. The company?s TEP segment generates, transmits, and distributes electricity to approximately 403,000 retail electric customers, including residential, commercial, industrial, and public sector customers in southeastern Arizona. It also sells electricity to other utilities and power marketing entities. As of December 31, 2010, this segment owned or leased 2,245 MW of net generating capacity, as well as owned or participated in electric transmission and distribution system consisting of 512 circuit-miles of 500-kV lines; 1,087 circuit-miles of 345-kV lines; 379 circuit-miles of 138-kV lines; 478 circuit-miles of 46-kV lines; and 2,621 circuit-miles of lower voltage primary lines. TEP segment generates electricity from coal, gas, oil, and solar sources. The company?s UNS Gas segment distributes gas to approximately 146,500 retail customers in Mohave, Yavapai, Coconino, and Navajo c ounties in northern Arizona, as well as Santa Cruz County in southeastern Arizona. As of December 31, 2010, this segment?s transmission and distribution system consisted of approximately 30 miles of steel transmission mains, 4,211 miles of steel and plastic distribution piping, and 136,439 customer service lines. The company?s UNS Electric segment transmits and distributes electricity to approximately 91,000 retail customers consisting of residential, commercial, and industrial customers in Mohave and Santa Cruz counties. As of December 31, 2010, UNS Electric?s transmission and distribution system consisted of approximately 56 circuit-miles of 115-kV transmission lines, 271 circuit-miles of 69-kV transmission lines, and 3,599 circuit-miles of underground and overhead distribution lines. This segment also owns the 65 MW Valencia plant, as well as 39 substations having an installed capacity of 1,788,050 kilovolt amperes. The company was founded in 1902 and is based in Tucson, Arizona.

Advisors' Opinion:
  • [By Dirk_Van_Dijk]

    Uni-Select Inc. (UNS-T28.15-0.39-1.37%) will announce its fourth-quarter results for the period ended Dec. 31, 2011, on Thursday. Its stock gained nearly 2 per cent and moved to within a $1 of a year high $29.47 Wednesday.

  • [By Jeff Reeves]

    Unisource Energy (NYSE: UNS) is an energy utility based in Arizona that provides gas and electric service in the Southwest across some 1,200 square miles.

    Current Yield: 4.5% ($1.68 a share annually)

    Dividend History: In June 2010, Unisource paid a quarterly dividend of 39 cents a share. This June, it will pay 42 cents, or a nearly 8% increase.

    Dividend Outlook: According to Bloomberg, Unisource has a very impressive three-year dividend growth rate expected to be 16.9%.

    Recent Performance: UNS stock has basically tracked the market over the last year or so, but more importantly, this low-risk utility has added about 25% in the last five years — more than double the Dow.

    Strong Outlook for Shares: While there’s nothing to indicate this utility will blow the doors off in 2011, Unisource is a low-risk income investment that has seen good revenue growth from 2009 to 2010, and is on track for another solid year. Shares are approaching a new 52-week high and could continue to march higher.

Top 5 Dividend Stocks For 2014: S&P Smallcap 600(PH)

Parker Hannifin Corporation manufactures fluid power systems, electromechanical controls, and related components worldwide. Its Industrial segment offers pneumatic and electromechanical components, and systems; filters, systems, and instruments to monitor and remove contaminants from fuel, air, oil, water, and other liquids and gases; connectors that control, transmit, and contain fluid; hydraulic components and systems for builders and users of industrial and mobile machinery and equipment; critical flow components for process instrumentation, healthcare, and ultra-high-purity applications; and static and dynamic sealing devices. This segment sells its products to original equipment manufacturers (OEMs) and their replacement markets in the manufacturing, transportation, and processing industries. The company?s Aerospace segment provides flight control systems and components, including hydraulic, electrohydraulic, electric backup hydraulic, electrohydrostatic, and electro -mechanical components for precise control of aircraft rudders, elevators, ailerons, and other aerodynamic control surfaces. It also provides electronics thermal management heat rejection systems, and single-phase and two-phase heat collection systems for radar, ISAR, and power electronics. This segment markets its products primarily to OEMs in the commercial, military, and general aviation markets, as well as to end users. Its Climate and Industrial Controls segment offers systems and components primarily for use in the mobile and stationary refrigeration, and air conditioning industry; and in fluid control applications in various industries, such as processing, fuel dispensing, beverage dispensing, and mobile emissions. This segment serves OEMs and their replacement markets. Parker-Hannifin Corporation markets its products through direct-sales employees, independent distributors, wholesalers, and sales representatives. The company was founded in 1918 and is headquartered i n Cleveland, Ohio.

Advisors' Opinion:
  • [By Putnam]

    Parker Hannifin (PH) operates in a broadly diversified engineering industry with peers such as General Electric (GE) and 3M Company (MMM). Its products serve aerospace, commercial, mobile and industrial markets.

    The 2011 fiscal year was stellar for Parker. An all time record of $12.3 billion in sales was reached, a 23.5% increase. Net income increased a whopping 90%.

    The common stock currently trades at a price to earnings ratio of 10.5, below the industry average of 14.8 and historical average of 14. Price to book ratio is 2.02 with price to cash flow being 7.3.

    Making comparisons in a broadly diversified industry is difficult, since products and service offerings vary greatly between businesses. Therefore, the peer company’s business lines and products were used as the main selection criteria for peer analysis.

Top 5 Dividend Stocks For 2014: Tyco International Ltd.(Switzerland)

Tyco International Ltd. provides security products and services, fire protection and detection products and services, valves and controls, and other industrial products worldwide. The company?s Tyco Security Solutions segment designs, sells, installs, services, and monitors electronic security, productivity, and lifestyle enhancement systems for residential, commercial, industrial, and governmental customers. This segment also designs, manufactures, and sells security products, including intrusion, security, access control, electronic article surveillance, and video management systems. Its Tyco Fire Protection segment designs, manufactures, sells, installs, and services fire detection and fire suppression systems, and building and life safety products for commercial, industrial, and governmental customers. The company?s Tyco Flow Control segment designs, manufactures, sells, and services valves, pipes, fittings, valve automation, and heat tracing products for general proce ss, energy, and mining markets, as well as the water and wastewater markets. Tyco International Ltd. was founded in 1960 and is based in Schaffhausen, Switzerland.