Saturday, October 26, 2013

What to Expect from AMCOL International

AMCOL International (NYSE: ACO  ) is expected to report Q2 earnings on July 26. Here's what Wall Street wants to see:

The 10-second takeaway
Comparing the upcoming quarter to the prior-year quarter, average analyst estimates predict AMCOL International's revenues will grow 1.6% and EPS will wither -16.9%.

The average estimate for revenue is $261.7 million. On the bottom line, the average EPS estimate is $0.54.

Revenue details
Last quarter, AMCOL International tallied revenue of $236.7 million. GAAP reported sales were 0.5% higher than the prior-year quarter's $235.5 million.

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

EPS details
Last quarter, non-GAAP EPS came in at $0.42. GAAP EPS of $0.32 for Q1 were 22% lower than the prior-year quarter's $0.41 per share.

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

Recent performance
For the preceding quarter, gross margin was 26.9%, 60 basis points worse than the prior-year quarter. Operating margin was 8.0%, 140 basis points worse than the prior-year quarter. Net margin was 4.4%, 130 basis points worse than the prior-year quarter.

Looking ahead

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The full year's average estimate for revenue is $1.02 billion. The average EPS estimate is $2.00.

Investor sentiment

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on AMCOL International is hold, with an average price target of $29.00.

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How Starbucks Built a Global Coffee Empire

With more than 20,000 coffeehouses spread over 60 countries, Starbucks (NASDAQ: SBUX  ) has built a very profitable coffee empire. Impressive marketing efforts, continuous menu innovation, and strategic geographical expansion helped Starbucks grow its revenue quickly; in fact, revenue reached $13.3 billion last year. Furthermore, Starbucks enjoys one of the highest operating margins in the industry thanks to its strong branding.

The attractive combination of high margins and aggressive revenue expansion has caused Starbucks' value to increase enormously. How did Starbucks manage to create a strong coffee empire despite increasing competition from traditional players such as Dunkin' Brands (NASDAQ: DNKN  ) , and the emergence of challengers like Panera Bread (NASDAQ: PNRA  ) ? More importantly, how long will Starbucks' dominance in the coffee world last?

Source: Starbucks Investor Relations

The Coffee empire
A business needs to have plenty of competitive advantages to become an empire. First, Starbucks directly controls every important step of its business, from buying high-quality coffee beans to designing its franchise decor. This allows Starbucks to minimize its operating risks. For example, by being one of the most important buyers of coffee arabica in the world, the company has enormous influence over its suppliers and it can ensure competitive prices, superior quality, and the necessary quantities at the right time.

Second, Starbucks creates a unique atmosphere surrounding its products based on four key factors: quality, service, ambiance, and culture.

The company maximizes quality not only by buying high-quality coffee beans, but also by equipping its coffee houses with excellent coffee machines.

To ensure perfect service, the company trains its baristas for over 30 hours. Baristas become very professional, not only at making coffee, but also at handling as many as 200 customers per hour.

In terms of ambiance, Starbucks has carefully chosen its color combination, couches, and lights to create a great place for coffee-lovers. The company keeps its customer loyalty high by promoting a genuine passion for coffee that goes beyond a cup of cappuccino. Starbucks promotes coffee rituals, love for organic ingredients, environmental friendship, and millennial values.

Finally, Starbucks is constantly innovating its menu and starting new businesses, such as selling energy drinks or coffee machines. The company has recently focused on strengthening its sandwiches and bakery business. That's why last year the company shelled out $100 million to acquire La Boulange Bakery, which specializes in traditional pastries. More recently, the company launched a £2 breakfast offer in the U.K. to capture price-sensitive customers.

Starbucks' sandwiches and bakery compete directly against Panera Bread, which was recently downgraded by Morgan Stanley based on research suggesting that a third of Panera's customers think menu prices are high.   The truth is that although Panera may have an excellent menu offering, its brand is not as strong as that of Starbucks. Panera is not synonymous to bakery, but Starbucks basically means coffee in more than 50 countries. Furthermore, Panera does not have the same scale advantages that Starbucks enjoys thanks to Starbucks' amazing global supply chain.   With more than 17,000 locations worldwide, Dunkin' Brands has economies of scale that are as strong as Starbucks. Both companies face similar challenges. Just like Starbucks wants to become more than a coffee shop, Dunkin wants to become more than a doughnut shop. Dunkin wants to attract more coffee lovers, and is also expanding its menu to include sandwiches and other high-margin offerings that go well with coffee.    Interestingly, Dunkin is strong in the east side of the U.S. while Starbucks is very powerful in the west. Since both companies plan to infringe upon the other's territory, competition will get fiercer. If Dunkin can change its image to attract more coffee lovers while retaining doughnut fans, it could see an acceleration in revenue growth at the expense of Starbucks.

Final Foolish takeaway
Few companies are more innovative than Starbucks. From offering unique decor to controlling every step of its supply chain, the company has plenty of competitive advantages in motion to protect its business. Furthermore, although Starbucks has thousands of locations all over the world, the market does not seem saturated. Previous success in China and Japan, where the company recently opened its 1,000th store, suggests that the company can raise its penetration ratios in those countries as high as its penetration ratio in the U.S. market.

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Friday, October 25, 2013

This Week in Sirius XM Radio

Things never get dull for the country's lone satellite-radio provider. Shares of Sirius XM Radio (NASDAQ: SIRI  ) moved sharply higher on the week, climbing 10% to close at $3.72. The media darling's gain was well ahead of the general market.

There was more going on beyond the share-price gyrations, though. Sirius XM preannounced a healthy subscriber tally for the second quarter, sending the stock to a fresh five-year high. Pandora (NYSE: P  ) went the other way, warning of a large sequential decline in usage between tMay and June.

Let's take a closer look.

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25 million reasons to remain bullish
Sirius XM has occasionally delivered strong subscriber numbers early, waiting a week or so after the end of a quarter to put out a press release bragging about its magnetism during the three prior months.

It happened this time. The satellite-radio star closed out the second quarter with 715,000 net new subscribers, crossing the mark of 25 million accounts along the way.

Tack on the first quarter's numbersm and Sirius XM already has 1.168 million net new subscribers through the first half of the year. Its earlier forecast for 1.4 million net additions for all of 2013 seems silly now, and Sirius XM is actually only raising that target to 1.5 million.

Don't worry. Sirius XM will probably gain more than 332,000 net new subs for the balance of this year. Mel Karmazin is gone, but Sirius XM is continuing his practice of offering conservative outlooks. Sirius XM bumped its subscriber guidance higher four times last year. There should be more of the same in three months.

Boxing Pandora
As good news at Sirius XM sent those shares to a fresh five-year high of $3.73 on Friday, Pandora went the other way after announcing problematic metrics for the month of June.

Pandora served up 1.25 billion hours of audio last month, less than the 1.35 billion it delivered in May. There are seasonal considerations here, but the sequential dip -- when it has happened -- has never been this bad.

Whether it's heavy users recoiling after February's move to cap mobile ad-supported usage or the growing realm of rival streaming applications, Pandora is going to have to prove that it can make more money serving up less content.

A Sirius future
It was an interesting week for Sirius XM. The new week isn't likely to be dull.

Another media revolution is afoot
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Fort Lauderdale, Fla.-based MAKO Surgical (NASDAQ: MAKO  ) shares were surging today on news that the company has settled its patent infringement dispute with Stanmore Implants Worldwide.

In a press release Tuesday, the robotic-surgery company announced that it has withdrawn its complaint against Stanmore and agreed to buy Stanmore's Sculptor Robotic Guidance Arm assets, including intellectual property, for a cash payment. Part and parcel of the settlement is Stanmore's agreement to stop doing business in the field of robotics -- removing a competitor to MAKO absolutely.

MAKO CEO Dr. Maurice R. Ferre, M.D., noted that acquiring Stanmore's robotics business not only removes a competitive threat to MAKO but also "improves MAKO's intellectual property position in robotically assisted orthopedic surgery."

5 Best High Tech Stocks To Own Right Now: Domino Printing(DNO.L)

Domino Printing Sciences plc engages in the research and development, manufacture, and sale of industrial printing equipment, controllers, and consumables for the high-speed printing of variable information. Its primary products include printers, controllers, consumables, fluids, and spare parts, as well as provides after sales support services. The company also offers black ink for a range of plastic-based substrates; coding and marking solutions to identify, authenticate, and personalize products; and codes and marks for protection of brand value. In addition, Domino Printing Sciences plc provides various technology solutions, including ink jet, thermal ink jet, scribing laser, binary, thermal transfer overprinting, drop on demand, print and apply labelling machinery, and laser printers. Further, it offers digital printing technologies, which are used in Web-based applications. Domino Printing Sciences plc serves beverage, binding, cable and wire, construction, cosmetics and personal care, electronics, finishing, food, games management, mailing, pharmaceutical, plastic cards, newspaper, postal systems, and tobacco, as well as for tickets, tags, and labels industries. The company distributes its products through third party distributors primarily in North America, South America, Europe, the Asia Pacific, and the Middle East/Africa. Domino Printing Sciences plc was founded in 1978 and is headquartered in Cambridge, the United Kingdom.

5 Best High Tech Stocks To Own Right Now: Highway Capital(HWC.L)

Highway Capital plc does not have significant operations. It intends to seek and acquire a suitable business. The company is based in London, the United Kingdom.

Best Clean Energy Stocks To Own Right Now: Intl Samuel Exploration Corp (ISS.V)

International Samuel Exploration Corp. engages in the acquisition, exploration, and development of resource properties in Canada. It primarily explores for copper, gold, base metal, and diamond properties. The company holds a 50% interest in the Reed Lake base metal project located in Manitoba; and has an option to acquire a 100% interest in the 256 hectare Rasp copper-gold property located north of Thompson, Manitoba. Its property portfolio also includes the Niv property and the Omega property located in British Columbia. In addition, the company, through its joint venture agreement with Diamonds North Resources Ltd., holds an interest in the Ualliq diamond project in Nunavut. The company was formerly known as TranDirect Holdings Inc. The company is based in Vancouver, Canada.

5 Best High Tech Stocks To Own Right Now: Bitauto Holdings Limited (BITA)

Bitauto Holdings Limited provides Internet content and marketing services for the automotive industry primarily in the People?s Republic of China. The company offers subscription services to new automobile dealers that enable them to list pricing and promotional information on its Website and partner Websites, and to interact with consumers through its virtual call center, as well as provides advertising service to dealers and automakers on its Website. It also offers listing services to used automobile dealers, which enable them to display used automobile inventory information through its Website and partner Websites; and advertising services to used automobile dealers and automakers with certified pre-owned automobile programs on its Website. In addition, the company provides digital marketing solutions, including Website creation and maintenance, online public relationship, online marketing campaigns, and advertising agent service s. Bitauto Holdings Limited was founded in 2000 and is headquartered in Beijing, the People?s Republic of China.

Advisors' Opinion:
  • [By Evan Niu, CFA]

    What: Shares of Bitauto (NYSE: BITA  ) have plunged today by as much as 18% after the company reported first-quarter earnings.

    So what: Revenue in the first quarter added up to $38.6 million, which translated into non-GAAP profits of $3.7 million. The top and bottom lines were up 34.6% and 29.1% relative to a year ago, but investors were still left wanting more. The results were in line with Bitauto's guidance.

5 Best High Tech Stocks To Own Right Now: Banco Latinoamericano de Comercio Exterior S.A. (BLX)

Banco Latinoamericano de Comercio Exterior, S.A. provides trade financing to commercial banks, middle-market companies, and corporations primarily in Latin America and the Caribbean. The company operates in three segments: Commercial, Treasury, and Asset Management. The Commercial segment offers deposits and loans for foreign trade transactions. This segment also provides various products, services, and solutions relating to foreign trade, which include co-financing arrangements, underwriting of syndicated credit facilities, structured trade financing, asset-based financing in the form of factoring, vendor financing and leasing, and other fee-based services, such as electronic clearing services. The Treasury segment offers liquidity management and investment securities activities, including management of interest rate, liquidity, price, and currency risks. The Asset Management segment provides asset management services, including investment advisory services for funds and managed accounts. This division is involved in trading foreign exchange, interest rate swaps, and derivative products. The company was formerly known as Banco Latinoamericano de Exportaciones, S.A. and changed its name to Banco Latinoamericano de Comercio Exterior, S.A. in June 2009. Banco Latinoamericano de Comercio Exterior, S.A. was founded in 1977 and is headquartered in Panama City, the Republic of Panama.

Advisors' Opinion:
  • [By Eric Volkman]

    Banco Latinoamericano de Comercio Exterior (NYSE: BLX  ) , better and more conveniently known as Bladex, is maintaining its dividend policy. The lender has declared a payout of $0.30 per share of its stock for its Q1, to be paid on May 7 to shareholders of record as of April 29. This amount matches the company's previous disbursement, which has been paid in both of the preceding two quarters. Before that, Bladex dispensed $0.25 per share.

  • [By Rich Duprey]

    Panama-based supranational bank�Banco Latinoamericano de Comercio Exterior� (NYSE: BLX  ) announced yesterday its second-quarter dividend of $0.30 per share, the same rate it's paid for the past three quarters after raising the payout 20% from $0.25 per share.

Thursday, October 24, 2013

Oakmark finding value in unlikely places

oakmark, harris associates, value, growth, stocks, investing

Portfolios at deep-value equity shop Harris Associates, manager of the Oakmark Funds, are full of stocks that would have a typical value investor scratching his or her head.

As investors have plowed into classic value stocks such as consumer staples and health care in search of yield, Oakmark's funds have shifted toward, gulp, your grandfather's growth stocks, e.g., companies with high retained earnings.

"Our portfolios are full of the names we spent our careers rooting against," said Win Murray, director of U.S. equity research and co-manager of the $4.2 billion Oakmark Select Fund (OAKLX).

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It isn't Oakmark that has changed, though. It is the market.

"We've always valued growth, just not as much as the market has," Mr. Murray said.

"It's not that we've started valuing it more. It's just that the market has started valuing it less," Mr. Murray said.

Equity income mutual funds, for example, had net inflows of $8.2 billion year-to-date through Sept. 30, the most of any U.S. mutual fund category, according to Lipper Inc.

It is certainly not a new phenomenon.

Equity income mutual funds have led inflow statistics in the domestic-equity-fund category every year since 2009. All that money coming into the old-school value pool has pushed up valuations to the point where Oakmark had to look elsewhere.

"The opportunity's not there," Mr. Murray said.

So technology has become a particular area of interest for the firm. The Oakmark Select Fund has a 24% weighting to technology, and the flagship $11 billion Oakmark Fund (OAKMX) has a 19% weighting.

"We have more tech in our portfolios now than we have had in our entire careers," Mr. Murray said.

When selecting companies, he said that he doesn't get too caught up in value or growth labels.

"It's a fake distinction," Mr. Murray said. "The real opposite of value is momentum."

Best Oil Companies To Watch In Right Now

NEW YORK (TheStreet) -- I love natural gas and energy in general. I follow natural gas and oil using U.S. Natural Gas Fund (UNG) and United States Oil Fund (USO) exchange-traded funds because of their ease in trading.

Add in the S&P 500 ETF (SPY) and PowerShares 100 (QQQ) and you can ascertain the entire economy as quickly as any other method. [Read: 5 Breakout Trades to Take Ahead of the Fed]

For example, if you want to budget for heating your home this winter compared to last year, reviewing the weekly natural gas chart will paint a picture accurate as anywhere else. You may not know it but natural gas can do much more than heat our homes, it has the potential to end our dependence on foreign energy imports.

Best Oil Companies To Watch In Right Now: Abraxas Petroleum Corp (AXAS)

Abraxas Petroleum Corporation is an independent energy company primarily engaged in the acquisition, exploitation, development and production of oil and gas in the United States and Canada. As of December 31, 2011, the Company�� estimated net proved reserves were 29.0 million barrels of oil equivalent (MMBoe), (including reserves attributable to its 34.7% equity interest in the proved reserves of Blue Eagle), of which 53% were classified as proved developed, 54% were oil and natural gas liquids (NGL��) and 94% by PV-10 were operated. Its daily net production during the year ended December 31, 2011, was 3,484 barrels of oil equivalent per day, of which 45% was oil or liquids. Its oil and gas assets are located in four operating regions in the United States, the Rocky Mountain, Mid-Continent, Permian Basin and onshore Gulf Coast, and in the province of Alberta, Canada.

The Company�� properties in the Rocky Mountain region are located in the Williston Basin of North Dakota and Montana and in the Green River, Powder River and Unita Basins of Wyoming and Utah. In this region, its wells produce oil and gas from various reservoirs, including the Niobrara, Turner, Bakken and Three Forks formations. Well depths range from 7,000 feet down to 14,000 feet. The Company�� properties in the Mid-Continent region are primarily located in the Arkoma Basin and principally produce gas from the Hartshorne coals at 3,000 feet. Its properties in the Permian Basin region are primarily located in two sub-basins, the Delaware Basin and the Eastern Shelf. In the Delaware Basin, its wells are located in Pecos, Reeves, and Ward Counties, Texas and produce oil and gas from multiple stacked formations from the Bell Canyon at 5,000 feet down to the Ellenburger at 16,000 feet.

In the Eastern Shelf, its wells are principally located in Coke, Scurry, Midland, Mitchell and Nolan Counties, Texas and produce oil and gas from the Strawn Reef formation at 5,000 to 7,500 feet and oil from the shallower Clea! rfork formation at depths ranging from 2,300 to 3,300 feet. The Company�� properties in the onshore Gulf Coast region are located along the Edwards trend in DeWitt and Lavaca Counties, Texas and in the Portilla field in San Patricio County, Texas. In the Edwards trend, its wells produce gas from the Edwards formation at a depth of 14,000 feet and in the Portilla field, its wells produce oil and gas from the Frio sands and the deeper Vicksburg from depths of approximately 7,000 to 9,000 feet. In addition, the Company also owns a 34.7% equity interest in a joint venture targeting the Eagle Ford in South Texas. Its properties in the province of Alberta, Canada are located in the Pekisko fairway and the Nordegg/Tomahawk area of Central Alberta.

As of December 31, 2011, the Company leased approximately 20,835 net acres, primarily in counties located on the Nesson Anticline and in areas west, including Rough Rider and Lewis & Clark in North Dakota and in Sheridan County, Montana, which are prospective for the Bakken and Three Forks formations. During the year ended December 31, 2011, the Company drilled two operated wells and participated in an additional 19 gross (1.0 net) non-operated wells. In July 2011, Abraxas purchased a used Oilwell 2000 horsepower diesel electric drilling rig. In August 2010, the Company formed a joint venture, Blue Eagle, with Rock Oil to develop its acreage in the Eagle Ford Shale play. As of December 31, 2011, the Company owned a 34.7% interest in Blue Eagle. During 2011, Blue Eagle drilled, completed or participated in three gross (2.4 net) wells and added approximately 3,800 net acres to its holdings, principally in McMullen County, Texas.

As of December 31, 2011, the Company leased a total of approximately 20,720 gross (17,800 net) acres in the southern Powder River Basin, of which 17,800 gross (15,700 net) acres were located in the Brooks Draw field of Converse and Niobrara Counties, Wyoming. In addition, it owns approximately 2,100 net acres in sout! hern Camp! bell County, Wyoming which are held by production and are near the Crossbow field operated by EOG Resources, Inc. and other recent horizontal activity. As of December 31, 2011, the Company leased 6,880 net acres in western Alberta. In 2011, it drilled or completed six gross (6 net) wells in the Twining area. In the emerging southern Alberta Basin Bakken play of Toole and Glacier Counties, Montana, the Company leased approximately 10,000 gross/net acres under long-term leases or direct mineral ownership. As of December 31, 2011, it leased approximately 5,600 gross/net acres in Nolan County, Texas. In 2011, the Company drilled three wells in the Spires Ranch offsetting the prolific Nena Lucia field.

Advisors' Opinion:
  • [By Rick Munarriz]

    The market is typically quiet on Friday, but that's certainly not the case during earnings season. Abraxas Petroleum (NASDAQ: AXAS  ) checks in with its latest quarterly results on Friday morning. The San Antonio-based crude oil and natural gas exploration and production company is expected to post breakeven results.

  • [By Tyler Crowe]

    In the energy world, it's never much of a surprise when an oil company picks up natural gas assets or vice versa. But a coal company getting into the oil business? Now that's a rarity. This week, Natural Resources Partners (NYSE: NRP  ) �did just that. The company announced that it's taking a working interest in some of Abraxas Petroleums (NASDAQ: AXAS  ) assets in the Bakken. While the $35 million purchase was not that large, it's a rare case where a coal company branches out into other natural resources.�

  • [By Rich Duprey]

    With steam coal prices continuing to be weak due to the inroads made by natural gas, Natural Resource Partners (NYSE: NRP  ) has decided if you can't beat 'em, join 'em. It announced Monday it is buying producing�oil and gas�properties located in the Williston Basin of North Dakota and Montana from�Abraxas Petroleum (NASDAQ: AXAS  ) for $35.3 million in cash.

  • [By Ben Levisohn]

    Penn Virginia has gained 6.9% to $7.15 at 11:56 p.m. today, while Sanchez Energy (SN) has advanced 5.2% to $29.10, Abraxas Petroleum (AXAS) has risen 2.4% to $2.97 and Gulfport Energy (GPOR) is up 1.3% at $67.31.

Best Oil Companies To Watch In Right Now: Linn Energy LLC (LINE)

Linn Energy, LLC (LINN Energy) is an independent oil and natural gas company. The Company�� properties are located in the United States, primarily in the Mid-Continent, the Permian Basin, Michigan, California and the Williston Basin. Mid-Continent Deep includes the Texas Panhandle Deep Granite Wash formation and deep formations in Oklahoma and Kansas. Mid-Continent Shallow includes the Texas Panhandle Brown Dolomite formation and shallow formations in Oklahoma, Louisiana and Illinois. Permian Basin includes areas in West Texas and Southeast New Mexico. Michigan includes the Antrim Shale formation in the northern part of the state. California includes the Brea Olinda Field of the Los Angeles Basin. Williston Basin includes the Bakken formation in North Dakota. On December 15, 2011, the Company acquired certain oil and natural gas properties located primarily in the Granite Wash of Texas and Oklahoma from Plains Exploration & Production Company (Plains).

On November 1, 2011, and November 18, 2011, it completed two acquisitions of certain oil and natural gas properties located in the Permian Basin. On June 1, 2011, it acquired certain oil and natural gas properties in the Cleveland play, located in the Texas Panhandle, from Panther Energy Company, LLC and Red Willow Mid-Continent, LLC (collectively Panther). On May 2, 2011, and May 11, 2011, it completed two acquisitions of certain oil and natural gas properties located in the Williston Basin. On April 1, 2011, and April 5, 2011, the Company completed two acquisitions of certain oil and natural gas properties located in the Permian Basin. On March 31, 2011, it acquired certain oil and natural gas properties located in the Williston Basin from an affiliate of Concho Resources Inc. (Concho). During the year ended December 31, 2011, the Company completed other smaller acquisitions of oil and natural gas properties located in its various operating regions. As of December 31, 2011, the Company operated 7,759 or 69% of its 11,230 gross productiv! e wells.

Mid-Continent Deep

The Mid-Continent Deep region includes properties in the Deep Granite Wash formation in the Texas Panhandle, which produces at depths ranging from 10,000 feet to 16,000 feet, as well as properties in Oklahoma and Kansas, which produce at depths of more than 8,000 feet. Mid-Continent Deep proved reserves represented approximately 47% of total proved reserves, as of December 31, 2011, of which 49% were classified as proved developed reserves. The Company owns and operates a network of natural gas gathering systems consisting of approximately 285 miles of pipeline and associated compression and metering facilities that connect to numerous sales outlets in the Texas Panhandle.

Mid-Continent Shallow

The Mid-Continent Shallow region includes properties producing from the Brown Dolomite formation in the Texas Panhandle, which produces at depths of approximately 3,200 feet, as well as properties in Oklahoma, Louisiana and Illinois, which produce at depths of less than 8,000 feet. Mid-Continent Shallow proved reserves represented approximately 20% of total proved reserves, as of December 31, 2011, of which 70% were classified as proved developed reserves. The Company owns and operates a network of natural gas gathering systems consisting of approximately 665 miles of pipeline and associated compression and metering facilities that connect to numerous sales outlets in the Texas Panhandle.

Permian Basin

The Permian Basin is an oil and natural gas basins in the United States. The Company�� properties are located in West Texas and Southeast New Mexico and produce at depths ranging from 2,000 feet to 12,000 feet. Permian Basin proved reserves represented approximately 16% of total proved reserves, as of December 31, 2011, of which 56% were classified as proved developed reserves.


The Michigan region includes properties producing from the Antrim Shale formation in the northern ! part of t! he state, which produces at depths ranging from 600 feet to 2,200 feet. Michigan proved reserves represented approximately 9% of total proved reserves, as of December 31, 2011, of which 90% were classified as proved developed reserves.


The California region consists of the Brea Olinda Field of the Los Angeles Basin. California proved reserves represented approximately 6% of total proved reserves, as of December 31, 2011, of which 93% were classified as proved developed reserves.

Williston Basin

The Williston Basin is one of the premier oil basins in the United States. The Company�� properties are located in North Dakota and produce at depths ranging from 9,000 feet to 12,000 feet. Williston Basin proved reserves represented approximately 2% of total proved reserves, as of December 31, 2011, of which 48% were classified as proved developed reserves.

Advisors' Opinion:
  • [By Rich Duprey]

    Oil and gas MLP�LINN Energy (NASDAQ: LINE  ) announced yesterday its monthly distribution of $0.2416 per unit, the same rate it's paid for the past two months after switching to a monthly payout scheme.�The distribution is payable Sept. 13 to unitholders of record at the close of business on Sept. 10.

  • [By Selena Maranjian]

    Renaissance Technologies reduced its stake in lots of companies, including Houston-based oil and natural gas company Linn Energy (NASDAQ: LINE  ) . Linn offers a whopping 8.8% dividend yield, and has been making some income-generating acquisitions. The company specializes in buying mature, productive energy assets -- and is poised to eventually profit from the rich Bakken fields. It's also admired for its successful long-term hedging and organic growth, and is seen by some as a solid investment.

  • [By Matt DiLallo]

    First-quarter earnings for LINN Energy (NASDAQ: LINE  ) �-- and by extension, its affiliate LinnCo (NASDAQ: LNCO  ) �-- have just been released. At first look, the numbers came in a little light; however, the long-term story still remains very much intact. Let's drill down to see what happened in the quarter and what investors can expect going forward.

Top High Tech Companies To Watch In Right Now: American Petro-Hunter Inc (AAPH)

American Petro-Hunter Inc., incorporated on January 24, 1996, is an oil and natural gases exploration and production company with projects in Kansas and Oklahoma. As of March 15, 2012, the Company has two producing wells in Kansas and six producing wells in Oklahoma. The Company also has rights for the exploration and production of oil and gas on an aggregate of approximately 6,230 acres in those states. On January 4, 2011, the Company announced plans to drill the NOS227 Well as a direct offset to the NOJ26 Well.

On March 25, 2011, the Company announced that the Company had acquired a working interest in an additional 2,000 acres located in Payne County in northern Oklahoma, near the Company�� Yale Prospect. The project has been named North Oklahoma Mississippi Lime Project. On May 16, 2011, the Company announced that drilling operations had commenced at the Company�� first horizontal well, NOM1H. The Company owns a 25% Working Interest in the lease. On June 29, 2011, the Company announced that NOM1H had begun commercial production. On July 18, 2011, the Company announced drilling plans for a total of 11 horizontal wells at the North Oklahoma Project. On July 20, 2011, the Company announced the acquisition of a 40% working interest in the South Oklahoma Project on 3,000 acres of land in south-central Oklahoma.

On February 6, 2012, the Company announced that the Company had drilled a total of 1,988 feet in the horizontal well segment penetrating into the 100 plus foot thick Mississippi pay zone. As of March 2012, there are nine locations left to drill on the acreage. The Company's crude oil production is sold to N.C.R.A. in MacPherson Kansas and Sunoco in Oklahoma. The Company sells natural gas through such pipeline to DCP Midstream, LP of Tulsa, Oklahoma.

Best Oil Companies To Watch In Right Now: Williams Partners L.P.(WPZ)

Williams Partners L.P. focuses on natural gas transportation, gathering, treating and processing, storage, natural gas liquid fractionation, and oil transportation activities in the United States. The company operates in two segments, Gas Pipeline, and Midstream Gas and Liquids. The Gas Pipeline segment owns and operates approximately 13,900 miles of pipelines with annual throughput of approximately 2,700 trillion British thermal units of natural gas and delivery capacity of approximately 13 million dekatherms of gas. This segment also owns interests in joint venture interstate and intrastate natural gas pipeline systems. The Midstream Gas and Liquids segment includes natural gas gathering, processing, and treating facilities; and crude oil gathering and transportation facilities that serve the producing basins in Colorado, New Mexico, Wyoming, the Gulf of Mexico, and Pennsylvania. Williams Partners GP LLC serves as the general partner of the company. Williams Partners L.P . was founded in 2005 and is based in Tulsa, Oklahoma.

Advisors' Opinion:
  • [By Rich Duprey]

    Natural gas transportation and storage MLP�Williams Partners (NYSE: WPZ  ) announced yesterday its third-quarter dividend of $0.8625 per unit, a 9% increase from the payout it made to investors last quarter of $0.8475 per unit.

Best Oil Companies To Watch In Right Now: Alon USA Energy Inc. (ALJ)

Alon USA Energy, Inc. engages in refining and marketing petroleum products primarily in the South Central, Southwestern, and Western regions of the United States. The company operates in three segments: Refining and Marketing, Asphalt, and Retail. The Refining and Marketing segment refines crude oil into petroleum products, including gasoline, diesel fuel, jet fuel, petrochemicals, feed stocks, asphalts, and other petroleum products. It markets finished products and blend stocks through sales and exchanges with other oil companies, state and federal governmental entities, unbranded wholesale distributors, and various other third parties. This segment also markets motor fuels to distributors under the Alon brand; and licenses Alon brand name and provides payment card processing services, advertising programs, and loyalty and other marketing programs to licensed locations. The Asphalt segment is involved in the marketing of patented tire rubber modified asphalt products; and production of paving and roofing grades of asphalt comprising performance-graded asphalts, emulsions, and cutbacks. This segment sells paving asphalt to road and materials manufacturers and highway construction/maintenance contractors; polymer modified or emulsion asphalt to highway maintenance contractors; and roofing asphalt to roofing shingle manufacturers or other industrial users. The Retail segment operates retail convenience stores that offer various grades of gasoline, diesel fuel, food products, tobacco products, non-alcoholic and alcoholic beverages, and general merchandise primarily under the 7-Eleven and Alon brands. As of December 31, 2012, it had 298 retail convenience stores located in Central and West Texas, and New Mexico. The company was founded in 2000 and is headquartered in Dallas, Texas. Alon USA Energy, Inc. is a subsidiary of Alon Israel Oil Company, Ltd.

Advisors' Opinion:
  • [By Rich Smith]

    The Department of Defense issued $1.3 billion worth of new contract awards Friday. However, a single, $950 million award for engineering services accounted for the bulk of the spending -- and that one went to a series of privately held companies. Publicly traded names fared less well. Among the few winners:

  • [By Dan Dzombak]

    Among companies with over a $1 billion market cap, today's oil and gas stocks leader was Alon USA Energy (NYSE: ALJ  ) , up 4.95% to $17.16. During the refiners' drop on Tuesday and Wednesday, Alon dropped 12.89%. Despite the comeback today, the stock is still down 8.6% from where it was before the plunge. Alon USA owns refineries in Louisiana and California, 11 asphalt terminals, as well as 300 7-11 retail locations. The company has been profiting heavily from the massive price difference between WTI and Brent crude. In November of 2012, the company IPO'd its Big Springs refinery as a master limited partnership, Alon USA Partners LP,�the proceeds of which Alon used to pay down debt.

Wednesday, October 23, 2013

The Most Popular Video Sites in America

Online video has radically changed the way Americans consume media. People want to watch when it is convenient for them, not when network programmers want them to. The industry's term for it is "video everywhere" — from the largest plasma screens to the smallest smartphones. And while online video is ubiquitous, only a small number of companies dominate this new world.

Google Inc. (NASDAQ: GOOG) sites, led by YouTube, accounted for nearly 88% of the 189 million unique U.S. viewers registered by video sites in September. The video behemoth was more than twice as large as Facebook Inc. (NASDAQ: FB), the second largest site. YouTube, in effect, defines the entire industry.

Click here to see what video sites have the most viewers

YouTube has such a vast audience partly because it was among the first to offer a comprehensive platform for online video posting, viewing and sharing. Those early (and largely amateur) videos have been joined by polished, professional ones that have attracted a much wider audience, both to YouTube and a growing number of online video sites. The content that these consumers view ranges from short clips to full-length movies available to rent or own. Inc. (NASDAQ: AMZN) and Hulu are examples of the full-length video option.

YouTube's model will be nearly impossible for any competitor to duplicate. The company owns its own advertising network and has begun its own paid video subscription service. The site is also the leading music video publisher as a result of its VEVO channel. The site is also well positioned in the video everywhere world. According to the company, mobile makes up nearly 40% of YouTube's total number of video streams.

Portal companies like Yahoo! Inc. (NASDAQ: YHOO), AOL Inc. (NYSE: AOL) and Microsoft Corp. (NASDAQ: MSFT) are trying to overcome collapsing revenues for display advertising. Their latest business model aims to appeal to marketers who use video ads. These video ads can command 10 times more revenue than display ads. Online publishers and advertisers both benefit from the fact that commercials frequently already have been created for broadcast and cable TV.

24/7 Wall St. examined the top 10 video sites in America based on comScore's September 2013 report, "September 2013 U.S. Online Video Rankings." According to comScore, a video is defined as "any streamed segment of audiovisual content, including both progressive downloads and live streams." For long-form content (e.g., television episodes with ad pods in the middle), each segment is counted as a distinct video stream. Video views include both user-initiated and auto-played videos that are viewed for longer than three seconds.

These are the most popular video sites in America.

Obama officials meet with insurance CEOs

kathleen sebelius

Obama's health and human services chief Kathleen Sebelius will meet with health insurance CEOs at the White House on Wednesday.

WASHINGTON (CNNMoney) As technical issues continue to plague the sign-up for Obamacare, several major health insurer CEOs are headed to Washington to talk to White House officials Wednesday.

Aetna (AET, Fortune 500) CEO Mark Bertolini, Wellpoint (WLP, Fortune 500) CEO Joseph R. Swedish and Humana Inc. (HUM, Fortune 500) CEO Bruce Broussard will attend the meeting, representatives of those companies confirmed.

Health and Human Services Secretary Kathleen Sebelius will meet with the CEOs, CNN confirmed Wednesday.

On Oct. 1, the Affordable Care Act started allowing consumers to shop and sign up for subsidized health insurance coverage. But the President's signature healthcare sign-up Web page has not been able to keep up with the traffic volume and been plagued by glitches, making it tough for Americans to sign up for insurance coverage.

Wellpoint is one of the larger participants in Obamacare, with health exchanges in 14 states where it operates on Blue Cross Blue Shield licenses.

Aetna offers coverage in 10 states, through Aetna or Coventry Health Care, which was acquired this spring, spokeswoman Cynthia Michener confirmed. The firm is also offering coverage in seven other states, but just in "limited geographic areas," she said.

Aetna has received much criticism for withdrawing from a number of states where it had originally applied to offer health insurance, including California, New York and New Jersey.

Humana is another larger participant offering insurance on state health exchanges in Illinois, Mississippi, Kentucky and Colorado, among others.

Cigna (CI, Fortune 500) CEO David Cordani was invited but was unable to attend, according to a spokesman.

In an interview with CNN's Dr. Sanjay Gupta, Sebelius said Tuesday she and her department are concerned about the technical problems surrounding the Obamacare website's rollout.

The site was supposed to make it simple for people to search and sign up for new health care policies starting on Oct. 1. But instead, it has been clunky and, at times, inoperable.

Buffett weighs in on Obamacare   Buffett weighs in on Obamacare

Best Dividend Stocks To Watch Right Now

"We're not at all satisfied with the workings of the website," Sebelius said. "We want it to be smooth and easy, and let consumers compare plans."

The Secretary attributed some of the problems to "extremely high" volume, saying nearly 20 million people have come to the Obamacare website in the first three weeks after it launched.

Yet only a fraction of those visitors have signed up for new health-care policies.

In the meantime, a team of high-tech experts from within the government and from Silicon Valley is going to tackle the issues, Sebelius said. Jeff Zients, acting director of the Office of Management and Budget, will lead the team.

Besides Sebelius, the insurance chiefs will meet with White House Chief of Staff Denis McDonough and Valerie Jarrett, a senior adviser to President Obama, according to Politico, which first reported the meeting.

-- CNN's Laura Koran, Kevin Liptak, Greg Botelho and Holly Yan contributed to this report. To top of page

How Effective Is The Chinese Wall?

The financial services business is a complex enterprise with many moving parts. Finance companies are often multi-faceted organizations engaging in overlapping activities that present opportunities for conflicts of interest. To avoid such conflicts, regulators require what is referred to as a "Chinese wall." Like the Great Wall of China, which was designed to separate two parties, the Chinese wall in the securities industry serves a similar purpose. For the Chinese, the wall was designed as a barrier between the Ming dynasty and the nomadic invaders known as the Huns. For the financial services industry, the wall is designed to separate underwriters and analysts. It is supposed to eliminate the transfer of information between these parties, but does it actually work?


Underwriters and analysts have separate and distinct roles, and are supposed to operate independently. Underwriters evaluate companies to gain information or get a picture of each firm's financial health. The information is used for a variety of tasks, including to determine creditworthiness when a company seeks a loan, and to determine value when a company puts itself up for sale. The insight and data that underwriters gain from evaluating companies may include details about financial health, business developments or pending staff changes, which could not be obtained without direct access to information unavailable to the general public or to securities analysts.

Analysts also evaluate companies. They do so to gain information that will help them make investment decisions. Such decisions could include recommending that portfolio managers or investors purchase securities issued by the firms that have been analyzed. To create a level playing field, analysts are tasked with making their recommendations based on the same information that is available to their competitors. In other words, they are banned from using "inside information," which includes any non-public fact regarding the plans or condition of a! publicly traded company that could provide a financial advantage when used to buy or sell shares of the company's stock. Using this information is a crime punishable by fines, jail time and a possible ban from working in a role making security recommendations.

Because underwriters work on one side of the Chinese wall and analysts work on the other side, information gathered by the underwriters is not supposed to be shared with analysts. To keep information transfer from happening, financial services firms (including banks, brokerage firms and similar entities) have training programs, written policies and procedures, risk management processes, compliance review procedures and supervisory personnel.


In reality, the Chinese wall is porous. As noted earlier, the financial services business is a complex enterprise with many moving parts. There are a multitude of ways to cheat the system. These range from corporate-sponsored procedures for sharing information between underwriters and analysts to sloppy internal controls, intentional use of information gained at work to use in personal trading, and scams involving complex repurchase agreement transactions that few investors even understand. All of these criminal activities and more have been discovered since the Chinese wall mandate was implemented in 2003 in the wake of the massive Wall Street scandals. These activities were best characterized by the famous advertisement that Charles Schwab ran in 2002, in which a group of brokers were encouraged to sell a fundamentally unsound stock to unsuspecting investors with the encouraging recommendation to "put some lipstick on this pig." A variety of studies, including "Do Bank-Affiliated Analysts Benefit from Lending Relationships?" (Ting Chen, Xiumin Martin 2011) and "Are Chinese Walls the Best Solution to the Problems of Insider Trading and Conflicts of Interest at Broker Dealers?" (Christopher M. Gorman 2004), reach the same conclusion. Chinese walls are not a particularl! y effecti! ve barrier.

Scandals and Legislation

While the Chinese wall's failure is a notable chapter in Wall Street's scandal-plagued history, conflicts of interest are not a new problem. In fact, regulators have a long history of stepping in with a slate of new rules designed to fix the problem after investors have been ripped off by conflicts of interest in the financial services industry:

Glass-Steagall Act of 1933 The Great Depression, an economic recession that began on Oct. 29, 1929 following the crash of the U.S. stock market, resulted in poverty, hunger, unemployment and political unrest on a global scale. Greed, of course, was to blame. Improper banking activity, or what was considered "overzealous commercial bank involvement in stock market investment" was deemed the main culprit of the Great Depression. The Glass-Steagall Act was passed to separate commercial and investment banking by prohibiting commercial banks from owning securities brokerage firms.

Gramm–Leach–Bliley Act of 1999 Glass-Steagall was repealed by the Gramm–Leach–Bliley Act of 1999. This resulted in the dotcom-era scandals with big-name analysts publicly promoting securities to investors despite the private negative research results of these securities. The analysts had been pressured into providing good ratings (despite personal opinions and research that indicated the stocks were not good buys) to bolster profits on the investment-banking side of the business.

Sarbanes-Oxley Act of 2002 Congress passed the Sarbanes-Oxley Act in 2002 following accounting scandals at Enron, WorldCom and Tyco. Auditors and analysts from investment-banking firms had given clean bills of health to insolvent firms to build relationships for investment bankers. The result was a series of the largest bankruptcies in U.S. history.

Spitzer Settlement/April 2003 In the wake of the dotcom crash, 10 big-name firms, including Bear Stearns & Co., Credit Suisse First Boston (NYSE:CS), Goldman Sachs & Co. (NYSE:GS), Lehman Brothers, J.P. Morgan Securities (NYSE:JPM), Merrill Lynch, Pierce, Fenner & Smith, Morgan Stanley & Co. (NYSE:MS) and Citigroup Global Markets, were forced to "dramatically reform their future practices, including separating the research and investment banking departments at the firms" as a direct result of conflicts of interest. This reform effort resulted from a settlement with both federal and state regulators. It led to the creation of the Chinese wall between analysts and underwriters, as well as a reform in compensation practices, as prior practices provided a financial incentive for analysts to provide favorable evaluations of underwriting clients.

The Great Recession The 20-month economic downturn that began in December 2007 was, once again, linked to conflicts of interest. Legislators are still grappling with the aftermath as of 2013, and much of the discussion revolves around the possible reintroduction of Glass-Steagall type separation of brokerage and banking activities.

The Bottom Line

The financial services industry has a long history of conflicts of interest. Despite the best efforts of regulators, the Chinese wall has proven ineffective at thwarting intentional information-sharing between various parts of financial services organizations. Every little niche that can be exploited is exploited (much of it too complex for the average investor to understand). In the end, greed wins as the motivation to make money entices employees and their employers to break the rules in pursuit of profits. If nothing else, the efforts to regulate the industry by using the Chinese wall has demonstrated that as long as firms are permitted to engage in business activities on both sides of the wall, information will pass through from one side to the other.

Tuesday, October 22, 2013

Weekend Edition: Your best chance at living well in the End of America

Top 10 Dividend Stocks To Buy Right Now

I've spent much of the last several years warning people about the "End of America"...   I've showed my readers what is about to happen and tried to convince them to take precautions before it's too late.   But let's face it... my work is mostly for wealthy people who mainly want to continue to be wealthy. So I've focused on how to prepare for these changes from the perspective of an investor – someone whose primary goal is to earn a return on his capital. I had precious little to offer regular wage-earners.   But the real danger right now is mostly to the middle class in America.   Americans owe more money, collectively, than ever before in our history – far, far, far more. We owe at every level: $17 trillion at the federal level, $13 trillion in mortgages, another trillion in student loans, and nearly $3 trillion in state and local government debt. Put all of these numbers together, and you end up with a $60 trillion pile of obligations. That's nearly four years' worth of our entire country's total production.   To make sense of the numbers, just take a bunch of the zeroes away. Put these facts into a storyline that's become all too common in America. Our economy is like a tattooed thug living in Detroit. In between burning broken-down cars and selling crack, he makes $16,000 a year working "security" at a local nightclub. Outside of busting heads, he has no real skills.   And why would he want to work hard to acquire them? Thanks to his public school education, he is convinced other people have a moral obligation to provide for him... especially rich people. They will give him health care, a clean apartment, a phone, etc. In his worldview, that's what's fair.   And if they won't? He's got no qualms about firing first and taking what he needs. After all, they owe him. For now though, he's doing great.   The Korean grocer up the street gave him a credit account. In only a few short years, he's run up a $60,000 tab. What are the chances he's going to drastically cut his expenses, work hard to get a promotion, and find a way to repay these debts? Zero. What are the chances he ends up knocking over the Korean grocer and teaching him something about life in America?   You may object to my metaphor. But believe me, it's far more accurate than most people are comfortable talking about. We live in a country that's coming apart at the seams – financially, culturally, morally, and spiritually. The reason is simple. We have collectively become addicted to living way, way beyond our means.   My favorite example about how absurd our debts have become? The state of New Jersey still owes $110 million for a football stadium (Giants Stadium) that was demolished in 2010. It won't retire this debt until 2025.   Similar debts exist on defunct or torn-down stadiums in Houston, Kansas City, Memphis, Seattle, and Pittsburgh. These stadiums are physical reminders of the absurd promises the government has made to its citizens.   On top of the debt it now owes, our federal government has promised its citizens $124 trillion of additional benefits. That's more than $1 million per citizen. That's not only more money than we could ever finance with tax revenues, but it's considerably more money than all of the privately owned assets in the United States (roughly $99 trillion).   Keeping this lie alive... the lie that we can afford our debts (or even our defunct stadiums)... has become the most important national goal. That's why everything stops when Federal Reserve Chairman Ben Bernanke speaks. Our obsession with Fed policy statements is the best proof I have that we're far more concerned with maintaining "The Great Lie" than we are at actually building a better real economy.   Have you ever told a big lie? Did you ever exaggerate something to hide a weakness or insecurity? Or maybe you lied to cover a big mistake you'd made. Did you get away with it? Or did maintaining the lie suddenly consume all of your attention and energy?   Seemingly forgotten in our obsession to maintain the fiction of our solvency are the huge costs of lying, running our country on Asian loans, and keeping the printing press churning. Nobody notices that the purchasing power of the dollar is down by almost 50% in the last 10 years... or that real wages have been falling since the early 1970s... or that almost half of the able-bodied men in our country no longer work. Nobody mentions that most of the students at most of the urban schools in our country either don't graduate or can't achieve test scores above minimum standards. Sooner or later, the consequences of our lies will fall upon us.   Your taxes are going up. The number of people you will be forced to support (those on disability, food stamps, or Medicare... retirees... people living in war-torn countries...) is soaring. And your ability to pay for these benefits is being destroyed by global competition and the decline of the dollar. America is promising everyone more. And you're the person who will have to pay.   Make no mistake... Every time the president says only "the rich" will pay taxes, just imagine he's saying "you." That's far closer to the truth.   So... what can you do if you're already struggling to maintain your standard of living? How can you hope to maintain your lifestyle as your wages collapse and the rate of economic growth slows or even reverses?   I believe your best alternative is to find a way to build your own business. Nothing good is going to happen for you in your life unless you make it happen. This is a harsh but important reality.   As an entrepreneur, I've gotten used to this fact. But for most people, it is an impossible hurdle. Most people can contrive an infinite number of reasons why they can't do something for themselves. I used to think it was impossible to coach people past this inertia. But...   I'm reading a book that has changed my mind. It's called Choose Yourself, by James Altucher. I believe this book will become a true classic. Anyone who reads it and follows its advice will become vastly more successful. It is, without a doubt, the best book I've ever read on how to build a new business.   I'm using it as my guidebook. The book covers the basics – including how to brainstorm for new business ideas, how to partner, and how to sell your business. It includes contrarian ideas that I know from experience are real secrets to success – like why you should never negotiate.   But the best part of the book – and the part I'm sure you won't find anywhere else – is James' ideas about how to manage your health and spirit while you're going through the rigors of entrepreneurship. I can tell you that I discovered the same valuable keys – how important it is to exercise, sleep, and be grateful. And I can tell you that when my life gets out of whack, I return to the same kind of daily practice James describes.   Even if you never start your own business, I believe this book can serve as a guide to maintaining your happiness in the face of what's likely to become a tough economy. It might sound strange to say this, but I wish I'd written the book. I think it will be as useful over the next few years as what I publish. James can teach you how to handle pressure, stress, failure, and success. Without these skills, all of the best financial advice in the world won't make much of a difference.   Regards,   Porter Stansberry

U.S. Stocks Little Changed on Earnings Before Jobs Data

U.S. stocks were little changed, after the Standard & Poor's 500 Index rallied to a record, as investors watched corporate earnings to assess the strength of the economy before tomorrow's employment data.

Apple Inc. (AAPL) rose 2.5 percent as Chief Executive Officer Tim Cook will likely introduce a high-definition iPad mini and thinner iPad tomorrow. General Electric Co. gained 2.3 percent to the highest level since 2008. VF Corp. (VFC) and Hasbro Inc. climbed at least 3.4 percent, reaching all-time-highs, on better-than-estimated earnings. Homebuilders slumped 2 percent as a group amid a report showing existing-home sales declined for the first time in three months. Halliburton Co. dropped 3.5 percent as revenue fell short of forecasts.

The S&P 500 added less than 1 point to 1,744.66 at 4 p.m. in New York. The Dow Jones Industrial Average fell 7.45 points, or less than 0.1 percent, to 15,392.20. About 5.7 billion shares changed hands on U.S. exchanges, in line with the three-month average.

"There are certainly some digestions going on as these earnings are being reported," Jim King, president and chief investment officer who helps oversee about $2.4 billion at Wyomissing, Pennsylvania-based National Penn Investors Trust Co., said by phone. "What we know is that earnings are continuing to come through pretty strongly and the Fed continues to promote asset growth. Those two things are the drivers of seeing higher stock prices over the next several quarters."

The S&P 500 had its best weekly gain since July last week as results from Google Inc. topped estimates and speculation grew that the Federal Reserve will delay cutting monetary stimulus. The index has gained 3.8 percent so far in October as Congress agreed on a new federal budget that avoided a default and ended the first partial government shutdown in 17 years.

New Highs

The benchmark measure has advanced 22 percent this year as Fed Chairman Ben S. Bernanke refrained from reducing $8! 5 billion of monthly bond purchases to stimulate the economy.

The Labor Department will tomorrow release the September jobs report, which was delayed from its original Oct. 4 date because of the 16-day partial federal shutdown that ended Oct. 17. The data will probably show employers added 180,000 workers in September, the most since April, after a 169,000 gain in August, according to the median estimate of 93 economists surveyed by Bloomberg.

Money has been flowing in and out of financial markets more rapidly than ever before this year, a bullish signal as the threat of a U.S. sovereign default fades.

Since Sept. 1, about $47 billion has gone to exchange-traded funds that track everything from stocks to bonds to commodities, according to data compiled by Bloomberg. That followed $18 billion pulled in August, $40 billion added in July and $11 billion pulled in June, making it the most volatile period on record for flows. Almost $7 billion went to ETFs on Oct. 17 alone.

Earnings Forecasts

Analysts have raised their forecasts for profits and now forecast an average increase of 2.5 percent for all companies in the S&P 500, according to estimates compiled by Bloomberg. That compares with an expected gain of 1.7 percent at the beginning of the month.

Earnings at the 108 companies that have reported so far grew 4.5 percent, while sales gained 2.1 percent. Some 70 percent of the companies have topped analysts' profit estimates, while 54 percent have beaten on sales.

The Chicago Board Options Exchange Volatility Index, the gauge of S&P 500 options prices known as the VIX, climbed 0.9 percent today to 13.16, following three days of declines. The measure has fallen 21 percent this month.

Industry Groups

Four out of 10 S&P 500 main industries gained as telephone and technology stocks rose at least 0.5 percent for the best performance. Health-care, energy and consumer-staples shares fell more than 0.3 percent.

Apple climbed 2.5 percent ! to $521.3! 6. The stock is up nine straight days, the longest stretch since October (SPX) 2010. The company is upgrading its iPad lineup to fend off a growing list of competitors, which are introducing their own tablets at lower prices with snazzier features.

Cook, facing two straight quarters of declining profit and a stock that's down by more than a quarter from a September 2012 record, will introduce the new models at a San Francisco event tomorrow, people with knowledge of the plans have said.

GE rallied 2.3 percent to $26.14, the highest level since September 2008. The company has climbed 8.1 percent over four days, the biggest gain for that time span since December 2011. The maker of jet engines, power generation equipment and locomotives was added to Citigroup Inc.'s U.S. focus list. The company last week assured investors that its industrial business is poised to meet a goal for profit-margin growth.

Dividend Increase

VF gained 3.4 percent to $211.23. The world's largest apparel maker increased its quarterly dividend to $1.05 a share from 87 cents as profit exceeded analysts' estimates. The company announced a 4-for-1 stock split.

Hasbro jumped 5.3 percent to $49.72. The world's second-biggest toymaker reported third-quarter earnings and sales that topped analysts' estimates.

AT&T (T) Inc., the largest U.S. phone company, advanced 1.8 percent to $35.22. The company announced yesterday it has agreed to sell or lease 9,700 wireless towers with Crown Castle International Corp. for $4.85 billion, giving it extra cash as it considers a European expansion. The agreement makes AT&T the latest carrier to offload towers to independent operators.

Netflix Inc. jumped 6.4 percent to $354.99 ahead of its earnings announcement. After the market close, the world's largest subscription-video service reported third-quarter profit that beat analysts' estimates, and signed up U.S. customers faster than projected. The shares added 9.4 percent as of 4:47 ! p.m. New ! York time.

Homebuilders Decline

An S&P index of homebuilders slipped 2 percent as all its 11 members dropped. Purchases of previously owned homes fell 1.9 percent to a 5.29 million annual rate in September, retreating from an almost four-year high as rising prices and mortgage rates discouraged would-be buyers, a report from the National Association of Realtors showed.

D.R. Horton Inc. declined 1.8 percent to $18.67 while PulteGroup Inc. lost 1.2 percent to $16.38.

Halliburton slid 3.5 percent to $50.66. The world's largest provider of hydraulic-fracturing services reported third-quarter revenue that missed forecasts. Excluding one-time items, earnings beat analysts' estimates.

Goodyear Tire & Rubber Co. tumbled 6.7 percent to $21.12. The biggest U.S. tiremaker was cut to hold from buy at Deutsche Bank AG on concern the company's profit margins may have peaked. Separately, Goodyear said it hasn't received any new offer for its Amiens Nord plant in France.

J.C. Penney Co. slumped 8.3 percent to $6.42, extending a 13 percent plunge from last week, when the company was forced to fend off anonymous attacks on Twitter saying it had hired a bankruptcy attorney and had lost access to credit in Canada.

Mary Ross-Gilbert, an analyst at Imperial Capital LLC in Los Angeles, cut the stock's price target to $1 from $5. While the Twitter posts "may be inaccurate or potentially misleading," they appear to be "wearing down vendors and management," Ross-Gilbert wrote in a note today.

Monday, October 21, 2013

Top 5 Medical Companies To Own In Right Now

The dual headwinds of being both tied to discretionary consumer spending as well as being part of the real estate complex, made the hotel & resort sector one of the worst performers during the Great Recession. The resulting commercial real estate recovery wasn�� necessarily kind to the hotel real estate investment trusts (REITs) as well. The sub-sector was left behind by many of its office, retail and medical property peers.

However, recent data points and rising business travel spending are finally beginning to push the hotel REITs upwards. For investors, the former beaten down and ignored sector could finally be a buy.

Rising RevPAR & Business Spending

The hotel operators are finally breathing a sigh of relief as several key metrics are now showing positive growth for the year, all of which should make their investors quite happy.

First, the industries key metric- revenue per available room or RevPAR- has been steadily improving since the sector's lows. According to commercial property brokerage house Jones Lang LaSalle (NYSE:JLL), RevPAR metrics came in at an average $102.99 for resorts at the end of August. This is nearly a $7 year-over-year improvement and sits closer to historical averages. RevPAR averages are expected to rise about 6% this year and in 2014, as business and leisure travel continues to rebound. Additionally, average hotel occupancies continue to increase and marked a 1.1% gain to sit at 67% total occupancy.

Top 5 Medical Companies To Own In Right Now: Rexahn Pharmaceuticals Inc (RNN)

Rexahn Pharmaceuticals, Inc. (Rexahn) is a development-stage biopharmaceutical company. The Company focuses on the development of cures for cancer to patients worldwide. The Company�� pipeline features one drug candidate in Phase II clinical trials. The Company also has several other drug candidates in pre-clinical development. In addition, the Company has two renal cell carcinoma (CNS) candidates, Serdaxin, CNS Disorders drug for depression and neurodegenerative diseases and Zoraxel, which is a erectile dysfunction (ED) and sexual dysfunction drug that are in clinical stages and the Company is are exploring options for further development . The Company�� drug candidate, Archexin is an anticancer Akt inhibitor.


Archexin is potent inhibitor of the Akt protein kinase (Akt) in cancer cells. Archexin has FDA orphan drug designations for five cancers (RCC, glioblastoma, and cancers of the ovary, stomach and pancreas). Multiple indications for other solid tumors can also be pursued. Archexin inhibit both activated and inactivated forms of Akt, and to reverse the drug resistance observed with the protein kinase inhibitors. Archexin is an antisense oligonucleotide (ASO) compound that is complementary to Akt mRNA, and selective for inhibiting mRNA expression and production of Akt protein. As of December 31, 2011, Archexin was in Phase II clinical trials for the treatment of pancreatic cancer with enrollment completed in September, 2011.


Serdaxin is an extended release formulation of clavulanic acid, which is an ingredient present in antibiotics approved by the FDA. The Company had been developing Serdaxin for the treatment of depression and neurodegenerative disorders. From January to September, 2011, the Company conducted a randomized, double-blind, placebo-controlled study compared two doses of Serdaxin, 0.5 milligram and 5 milligram, to placebo over an eight-week treatment period for major depressive disorder (MDD) patients. As of Dec! ember 31, 2011, the Company had not made a determination of Serdaxin�� future paths or resource allocations to further develop Serdaxin to treat MDD.


Zoraxel is an orally administered, on-demand tablet to treat sexual dysfunction. Zoraxel is a dual enhancer of neurotransmitters in the brain that play a key role in sexual activity phases of motivation and arousal, erection and release, and may be the ED drug to affect all three of these phases of sexual activity. As of December 31, 2011, the Company was evaluating how to proceed with the Phase IIb study of Zoraxel.

The Company�� Pre-clinical Pipeline Drug Candidates includes RX-1792, which is a small molecule anticancer EGFR inhibitor; RX-5902, which is a small molecule anticancer ribonucleic acid (RNA) helicase regulator; RX-3117, which is a Small molecule anticancer deoxyribonucleic acid (DNA) synthesis Inhibitor; RX-8243, which is a small molecule anticancer aurora kinase inhibitor; RX-0201-Nano, which is a nanoliposomal anticancer Akt inhibitor; RX-0047-Nano, which is an nanoliposomal anticancer HIF-1 alpha inhibitor and RX-21101, which is a nano-polymer Anticancer.

Advisors' Opinion:
  • [By Roberto Pedone]

    One under-$10 biopharmaceutical player that's just starting to move into breakout territory is Rexahn Pharmaceuticals (RNN), which is engaged in the development of novel treatments for cancer to patients. This stock has been on fire so far in 2013, with shares up sharply by 62%.

    If you take a look at the chart for Rexahn Pharmaceuticals, you'll notice that this stock has been uptrending strong for the last month, with shares moving higher from its low of 36 cents per share to its intraday high of 53 cents per share. During that uptrend, shares of RNN have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of RNN into breakout territory above some near-term overhead resistance levels at 49 cents to 50 cents per share. It's worth noting that volume today is tracking in extremely strong with over 3 million shares traded, versus its three-month average action of 1.22 million shares.

    Traders should now look for long-biased trades in RNN if it manages to break out above Thursday's intraday high of 53 cents per share with high volume. Look for a sustained move or close above that level with volume that hits near or above its three-month average action of 1.22 million shares. If that breakout hits soon, then RNN will set up to re-test or possibly take out its next major overhead resistance levels at 64 cents to its 52-week high at 66 cents per share. Any high-volume move above 66 cents to 67 cents per share could then send RNN towards its next major overhead resistance levels at 81 cents per share.

    Traders can look to buy RNN off any weakness to anticipate that breakout and simply use a stop that sits right below its 50-day moving average at 47 cents per share. One can also buy RNN off strength once it clears 53 cents per share with volume and then simply use a stop that sits a comfortable percentage from your entry point.

  • [By James E. Brumley]

    With just a quick glance at a chart of Rexahn Pharmaceuticals, Inc. (NYSEMKT:RNN), it would be easy to conclude it's nothing but a volatile mess. When you take a step back and look at a long-term weekly chart of RNN, however, it starts to become clear that this small cap biopharma name is on the verge of a monster-sized breakout. First things first, however.

Top 5 Medical Companies To Own In Right Now: Quintiles Transnational Holdings Inc (Q)

Quintiles Transnational Holdings Inc. is a provider of biopharmaceutical development services and commercial outsourcing services. The Company operates in two segments: Product Development and Integrated Healthcare Services. The Company�� Product Development segment operates as a contract research organization (CRO) focused primarily on Phase II-IV clinical trials and associated laboratory and analytical activities. The Company�� Integrated Healthcare Services segment is a global commercial pharmaceutical sales and service organizations and Integrated Healthcare Services provides a range of services, including commercial services, such as providing contract pharmaceutical sales forces in geographic markets, as well as healthcare business services for the healthcare sector, such as outcome-based and payer and provider services. In August 2012, it acquired Expression Analysis, Inc.

Product Development

Product Development provides services and that allow biopharmaceutical companies to outsource the clinical development process from first in man trials to post-launch monitoring. The Company�� service offering provides the support and functional necessary at each stage of development, as well as the systems and analytical capabilities. Product Development consists of clinical solutions and services and consulting. Clinical solutions and services provides services necessary to develop biopharmaceutical products, including project management and clinical monitoring functions for conducting multi-site trials (generally Phase II-IV) (core clinical) and clinical trial support services that improve clinical trial decision making and include global laboratories, data management, biostatistical, safety and pharmacovigilance, and early clinical development trials, and strategic planning and design services that improve decisions and performance. Consulting provides strategy and management consulting services based on life science and advanced analytics, as well as regulatory and comp! liance consulting services.

The Company competes with Covance, Inc., Pharmaceutical Product Development, Inc., PAREXEL International Corporation, ICON plc, inVentiv Health, Inc. (inVentive), INC Research and PRA International.

Integrated Healthcare Services

Integrated Healthcare Services provides the healthcare industry with both geographic presence and commercial capabilities. The Company�� commercialization services are designed to accelerate the commercial of biopharmaceutical and other health-related products. Service offerings include commercial services (sales representatives, strategy, marketing communications and other areas related to commercialization), outcome research (drug therapy analysis, real-world research and evidence-based medicine, including research studies to prove a drug�� value) and payer and provider services comparative and cost-effectiveness research capabilities, clinical management analytics, decision support services, medication adherence and health outcome optimization services, and Web-based systems for measuring quality improvement.

The Company competes with inVentiv, PDI, Inc., Publicis Selling Solutions, United Drug plc, EPS Corporation and CMIC HOLDINGS Co., Ltd.

Top Undervalued Companies To Invest In 2014: NeoStem Inc (NBS)

NeoStem, Inc., incorporated on September 18, 1980, operates in cellular therapy industry. Cellular therapy addresses the process by which new cells are introduced into a tissue to prevent or treat disease, or regenerate damaged or aged tissue, and consists of a separate therapeutic technology platform in addition to pharmaceuticals, biologics and medical devices. The Company�� business model includes the development of novel cell therapy products, as well as operating a contract development and manufacturing organization (CDMO) providing services to others in the regenerative medicine industry. Progenitor Cell Therapy, LLC, the Company�� wholly owned subsidiary (PCT), is a CDMO in the cellular therapy industry. PCT has provided pre-clinical and clinical current Good Manufacturing Practice (cGMP) development and manufacturing services to over 100 clients advancing regenerative medicine product candidates through rigorous quality standards all the way through to human testing.

PCT has two cGMP, cell therapy research, development, and manufacturing facilities in New Jersey and California, serving the cell therapy community with integrated and regulatory compliant distribution capabilities. Its core competencies in the cellular therapy industry include manufacturing of cell therapy-based products, product and process development, cell and tissue processing, regulatory support, storage, distribution and delivery and consulting services. The Company�� wholly-owned subsidiary, Amorcyte, LLC (Amorcyte) is developing its own cell therapy, AMR-001, for the treatment of cardiovascular disease. AMR-001 represents its clinically advanced therapeutic product candidate and enrollment for its Phase II PreSERVE clinical trial to investigate AMR-001's safety and efficacy in preserving heart function after a heart attack in a particular type of post Acute Myocardial Infarction (AMI) patients.

Through the Company�� subsidiary, Athelos Corporation (Athelos), the Company is collaborating w! ith Becton-Dickinson in early stage clinical development of a therapy utilizing T-cells, collaborating for autoimmune and inflammatory conditions, including but not limited to, graft vs. host disease, type 1 diabetes, steroid resistant asthma, lupus, multiple sclerosis and solid organ transplant rejection. The Company�� pre-clinical assets include its Very Small Embryonic Like (VSEL) Technology platform. The Company has basic research and development capabilities, manufacturing facilities on both the east and west coast of the United States.

Advisors' Opinion:
  • [By John Udovich]

    From stem cell burgers to earnings reports, the stem cell industry and small cap players in it like NeoStem Inc (NASDAQ: NBS), International Stem Cell Corp (OTCMKTS: ISCO) and BioRestorative Therapies (OTCBB: BRTX) have been producing some news lately that has probably been overlooked by investors and traders alike given its August. Nevertheless, you might want to pay attention to the following stem cell news:

  • [By Stock Investor]

    Back in April in my article titled, "Regenerative Medicine's Time Has Come", I covered two very interesting companies focused on this field: NeoStem Inc. (NBS) and Neuralstem Inc. (CUR).

  • [By John Udovich]

    The results of a recent Pew Center Poll regarding attitudes towards abortion and various forms of stem cell research could be a good sign for the stem cell industry along with small cap stem cell stocks like StemCells Inc (NASDAQ: STEM), NeoStem Inc (NASDAQ: NBS), Neuralstem, Inc (NYSEMKT: CUR),�International Stem Cell Corp (OTCMKTS: ISCO) and BioRestorative Therapies (OTCBB: BRTX). Basically, Americans think that having an abortion is a moral issue with 49% of American adults believing abortion is morally wrong, 23%�view it not as a moral issue and and 15% view it as morally acceptable. However and when Americans were asked about issues surrounding�human embryos, such as stem cell research or in vitro fertilization, as a matter of morality, their views were different.

Top 5 Medical Companies To Own In Right Now: Hemispherx Biopharma Inc (HEB)

Hemispherx Biopharma, Inc. (Hemispherx) is a specialty pharmaceutical company engaged in the clinical development of new drugs therapies based on natural immune system enhancing technologies for the treatment of viral and immune based chronic disorders. Hemispherx focuses on two core pharmaceutical technology platforms Ampligen and Alferon N Injection.The commercial focus for Ampligen includes application as a treatment for Chronic Fatigue Syndrome (CFS) and as an influenza vaccine enhancer (adjuvant) for both therapeutic and preventative vaccine development. Alferon N Injection is a United States Food and Drug Administration (FDA) approved product with an indication for refractory or recurring genital warts. Alferon LDO (Low Dose Oral) is a formulation under development targeting influenza. It has three subsidiaries BioPro Corp., BioAegean Corp., and Core BioTech Corp. The Company's foreign subsidiary is Hemispherx Biopharma Europe N.V./S.A.


Ampligen is an experimental drug, which is undergoing clinical development for the treatment of Myalgic Encephalomyelitis/Chronic Fatigue Syndrome (ME/CFS). Over 1,000 patients have participated in the Ampligen clinical trials representing the administration of more than 90,000 doses of this drug. The Company is also engaged in ongoing, experimental studies assessing the efficacy of Ampligen against influenza viruses.

Alferon N Injection

Alferon N Injection is the registered trademark for the Company's injectable formulation of natural alpha interferon. Interferons are a group of proteins produced and secreted by cells to combat diseases. The Company's natural alpha interferon is produced from human white blood cells. Alferon N Injection [Interferon alfa-n3 (human leukocyte derived)] is a highly purified, natural-source, glycosylated, multi-species alpha interferon product.

Alferon LDO (Low Dose Oral)

Alferon LDO [Low Dose Oral Interferon Alfa-n3 (Human Leukocyte Derived)]! is an experimental low-dose, oral liquid formulation of Natural Alpha Interferon and like Alferon N Injection should not cause antibody formation, which is a problem with recombinant interferon. It is an experimental immunotherapeutic that works by stimulating an immune cascade response in the cells of the mouth and throat, enabling it to bolster systemic immune response through the entire body by absorption through the oral mucosa.

The Company competes with Pfizer, GlaxoSmithKline, Merck, AstraZeneca, Baxter International, Fletcher/CSI, AVANT Immunotherapeutics, AVI BioPharma and Genta.

Top 5 Medical Companies To Own In Right Now: Impax Laboratories Inc.(IPXL)

Impax Laboratories, Inc., a specialty pharmaceutical company, engages in the development, manufacture, and marketing of bioequivalent pharmaceutical products. The company operates in two divisions, Global Pharmaceuticals and Impax Pharmaceuticals. The Global Pharmaceuticals division develops, manufactures, sells, and distributes generic pharmaceutical products. It provides its generic pharmaceutical prescription products directly to wholesalers and retail drug chains; and generic pharmaceutical over-the-counter and prescription products through unrelated third-party pharmaceutical entities. The Impax Pharmaceutical division develops proprietary brand pharmaceutical products that address central nervous system disorders, including Alzheimer?s disease, attention deficit hyperactivity disorder, depression, epilepsy, migraines, multiple sclerosis, Parkinson?s disease, and schizophrenia, as well as promotes third-party branded pharmaceutical products. As of May 2, 2011, the com pany marketed 101 generic pharmaceuticals, which represent dosage variations of 29 different pharmaceutical compounds; and another 16 of its generic pharmaceuticals representing dosage variations of 4 different pharmaceutical compounds. It markets and sells its generic pharmaceutical prescription drug products in the continental United States and the Commonwealth of Puerto Rico. The company has a strategic alliance agreement with Teva Pharmaceuticals Curacao N.V. Impax Laboratories, Inc. was founded in 1993 and is headquartered in Hayward, California.

Advisors' Opinion:
  • [By Max Macaluso, Ph.D.]

    RLS hasn't been a high-priority target for the pharma industry given the lackluster sales of Requip and Horizant, a third competitor of�UCB's Neupro, and a number of generic alternatives. Impax Laboratories (NASDAQ: IPXL  ) was one of the few developing a new therapy, called IPX159, but Impax put the kibosh on the drug after it failed to meet its primary endpoint in a phase 2b study. According to its latest quarterly report, Impax has no other RLS drugs in development and seems to be focusing on getting its rejected Parkinson's disease drug Rytary back to the FDA for a second chance at approval.

Google's Next Nexus Evolution Begins Today

The future of Google's (NASDAQ: GOOG  ) Nexus phones appears to be up in the air. On one hand, Android/Chrome chief Sundar Pichai told AllThingsD at D11, "The goal with Nexus was to push forward hardware with partners. That will continue as well." That somewhat vague statement seems to confirm that there will be more Nexus-branded phones in the future.

HTC One Google Edition. Source: Google.

On the other hand, OEMs don't seem particularly interested in releasing Nexus phones. LG, the current manufacturer of the Nexus 4, has publicly expressed disinterest in building a next-generation model, colloquially known as the Nexus 5. The two other high-profile OEMs that have made Nexus phones in the past, HTC and Samsung, are launching Google Editions of their flagship devices.

The Google Editions of the Galaxy S4 and One are available starting today directly through Google Play. Each device sells unsubsidized for $649 and $599, respectively. That's significantly higher than the $299 starting price of the Nexus 4. Thus marks the next evolution of the "Nexus experience" -- or at least until a Nexus 5 is actually launched, if at all.

Google's vision of the smartphone market entails unsubsidized devices without service contracts, but consumers have voted overwhelmingly in favor of the subsidy model. These Google Editions will deliver a stock Android experience, but only to the tiny portion of the market willing to pay full retail price. In addition, there are some trade-offs. The stock Android devices won't take advantage of some of the unique hardware or software features that HTC and Samsung offer.

One of the key benefits of buying directly through Google Play will be direct software updates. Android's biggest weakness is software fragmentation, since OEMs and wireless carriers drag their feet with getting the newest versions of Android on their devices.

With today's release, there are now three stock Android devices available, two of which don't carry Nexus branding. If Google doesn't land an OEM partner for future Nexus devices, these Google Editions may ultimately be the next phase of stock Android.

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.

Sunday, October 20, 2013

1 Underrated Reason Why Verizon Stock Looks Great Now

Mobile data use is on the rise, and that's good news for Verizon (NYSE: VZ  ) stock. The carrier's shares are slightly ahead of the S&P 500 so far this year.

There's good reason to be believe we'll see further gains in the months and years ahead. Verizon activated 25% more iPhones in the first quarter and 7.2 million smart handsets overall thanks, in part, to surprisingly strong Windows Phone sales. Meanwhile, wireless industry analyst Chetan Sharma says U.S. revenue from mobile data grew 14% to $21 billion in the first quarter. All signs point to greater demand for Verizon's gear and services.

But investing is also a game best played in context. How does Verizon stock compare to peers AT&T (NYSE: T  )  and Sprint Nextel (NYSE: S  ) ? Here's what the numbers say:

Key Statistics Verizon AT&T Sprint Nextel

Current share price




Shares outstanding

2.86 billion

5.38 billion

3.02 billion

Market cap

$143.2 billion

$189.6 billion

$21.1 billion

Trailing P/E ratio



Not available

PEG ratio




Gross margin




Cash from operations

$33.06 billion

$39.53 billion

$2.96 billion

Sources: S&P Capital IQ and Yahoo! Finance.

And here's what Fools say, going by the data available in our CAPS investor intelligence database:

CAPS Category Verizon AT&T Sprint Nextel

CAPS stars (out of 5)

Top Tech Companies For 2014




No. of CAPS ratings




Bullish CAPS ratings




Bearish CAPS ratings




Bull ratio




Source: Motley Fool CAPS.

Fools rate Verizon tops among carriers for a variety of reasons, including optionality in the business. "The top cell phone network provider and their purchase of Hughes Telematics was a wise move given the personal auto insurance potential use of telematics universally," writes CAPS investor bccleveland.

Verdict: Verizon stock is a buy
Skeptics will note that telecom hasn't exactly been a great business of late. T-Mobile has all but eliminated long-term contracts, which also threatens subsidies. Consumers who want the latest gear may soon have to pay up for it in ways they haven't previously. Handset sales could dip as a result.

Or not. Telecom is a tough business with a tumultuous history. I'd rather bet on Verizon's ability to navigate treacherous waters while collecting (and reinvesting) a quarterly dividend that yields 4% as of this writing. As such, I've taken a long position in my CAPS portfolio.

Now it's your turn to weigh in. What you do with Verizon stock right now? Let us know what you think of Big Red's business, and whether you'd buy, sell, or short at current prices, using the comments box below.

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The Investment Climate In 6 Points

1. Long-term interest rates may have bottomed several months ago, but rates will remain low for several more months. It is becoming clearer to many that the Federal Reserve is most likely not going to reduce the $85 bln of long-term securities it is purchasing every month. The BOJ remains committed to buying the equivalent of $75 bln of assets a month. The ECB continues to provide full allotment at its fixed rate repo operations, even if strong banks have repaid their long-term repo borrowings. The Bank of England's economist Dale tweeted at the end of last week that UK rates are unlikely to rise next year.

The Bank of Canada, as it will likely reaffirm at this week's meeting, retains a tightening bias, but it is of little consequence as it keeps pushing out in time when it anticipates removing some monetary accommodation. Unlike the Fed and BOE that have included macro-economic thresholds in their forward guidance, there has been continuity in BOC's forward guidance from Carney to Poloz in that its forward guidance has been date, not data, oriented. The Reserve Bank of Australia is at the tail end of its easing cycle. Many think it is done. However, we continue to see scope for another rate cut, especially if, as we suspect, this week's Q3 CPI report is tame. In addition, the strengthening of the Australian dollar also tilts the odds in favor of a cut.

Investment conclusion: This favors carry trade strategies, risk assets, including emerging markets, commodities and equities.

2. For good reason, many observers and investors are concerned that the dysfunctional political system in the US will renew the default threat again early next year. Yet given the failure of such tactics, in terms of results and in the court of public opinion, that does not seem to be the most likely scenario.

The Congressional Budget Office projects the deficit in the fiscal year that just began will be near 3.4% and FY2015, the shortfall is projected to be 2.1%. There is no immediate deficit problem. Th! e real fiscal challenge is still some years away. Essentially the cost of what are often called entitlements, which is a pejorative way to talk about the basket of goods one gets as a citizen and member of nearly every other high income country, is projected to require a larger part of GDP than has ever been raised in federal taxes. Neither party has it in their interest to let this be settled before next year's election. Perhaps that is what the 2016 presidential race will be about. The most likely outcome therefore is some soft of compromise that includes some reforms of Medicare and Medicaid, and slowing the rise in Social Security payments, without really addressing the structural issue.

In the traditional media and blogosphere there was much hand wringing and chin wagging about how the US fiscal melodrama was going to undermine confidence in the role of Treasuries at the center of the global financial system, including reserves. To the contrary, the Federal Reserve's custodial holdings for foreign central banks rose $28.6 bln in the week through last Wednesday, while the government was still closed and the threat of default hung in the air. This was the third largest rise in three years. This is not to say one week makes a trend. After falling in June and July, the Fed's custody holdings rose in August, September and the first half of October. They are now about $7 bln from the record high set in May.

While US government data will begin being reported, with the highlight being Tuesday's release of September's employment data, it is unlikely to be a significant market mover. The data has been superseded by events. Surveys suggest the market consensus for Fed tapering is shifting to March and a modest $10 bln reduction. Near-term data is not going to change this view.

Investment conclusion: The role of Treasuries and the dollar are unlikely to be impacted by the domestic brinkmanship over fiscal policy.

3. The flash euro area PMIs, due Thursday, stand out as the most market se! nsitive e! conomic data from the euro area. Although the sentiment has been running ahead of real sector data, slight positive growth has replaced the recent contraction. Next Wednesday, the ECB is expected to unveil the broad details of the Asset Quality Review (AQR). This is not a stress test. It is a preliminary review of the books of the banks for which it will soon have supervisory responsibilities. Definitions of risk-weighted assets various in the euro area and some uniformity is a necessary condition of a banking union. New stress tests will be conducted next year.

Separately, news broke (MNI) over the weekend that ECB President Draghi argued for precautionary state recapitalization funds (for solvent institutions) instead of forcing a bailing-in of share holders and subordinated creditors. While his argument is that it could renew the financial crisis, it is also yet another way to put tax payers' money ahead of those who made in the investment decisions.

While the existential part of the euro crisis appears to have passed, the political fallout continues to be seen. This is true not just in countries that have suffered greatly, like Greece, but also may those that have come out relatively unscathed, like Austria. The declining support for the French Socialists and the internal divisions of the UMP has created an opportunity for the national socialism for the Len Pen variety.

Investment Conclusion: The euro may enjoy additional near-term gains; it will serve to aggravate the tightening of financial conditions (lending, money supply growth). We see euro area challenges once again rising in importance to investors.

4. There are two major events for the UK in the week ahead. First, the minutes from this month's MPC meeting will be released. It would be a surprise if there was any dissent. Recent comments, however, do suggest there are in fact disagreements below the surface. Under the terms of one person-one vote, demands for consensus seems to be a recipe for group think. Of ! interest ! may be the MPC's assessment of price pressures. Perhaps Dale tipped the BOE's hand when he suggested that the increase in sterling could dampen import prices and help boost real incomes.

Second, on Friday the UK will be the first of the G7 to report Q3 GDP figures. The Bloomberg consensus calls for an 0.8% increase, which would be the third increases sequentially and lift the year-over-year rate to 1.5% from 1.3% in Q2 and 0.2% in Q1. Despite the economic improvement, we note that he recent Ipsos/Mori polls shows Labour has pulled into a tie with the Tories, while the Lib-Dems have slipped into fourth place behind the UKIP.

10 Best Biotech Stocks For 2014

Investment conclusion: Strong data and a BOE that finds virtue in sterling's strength is likely to underpin the currency in the period ahead.

5. Japan reports the September trade balance first thing Monday. The deficit is expected to widen sharply on seasonally adjusted terms (JPY1.12 trillion from JPY791 bln), but improve slightly on an unadjusted basis. It is the fifteenth consecutive monthly deficit. The deficit is not a result of exports drying up. Indeed, exports are growing at a heady clip: 14.6% year-over-year in August and in September may have accelerated to 15.6%. The problem is that imports are going up even quicker. The 16% pace seen in August is expected to have risen to almost 20%.

The week concludes with the latest inflation report. The national headline September CPI is expected to remain steady at 0.9%. However, this inflation is due solely to food and energy prices. However, excluding these items, CPI would be zero and not negative for the first time since the end of 2008. However, the Tokyo October reading warns that deflation may not yet have been defeated. Excluding food and energy, the Tokyo CPI is expected to remain at -0.3%.

Investment implication: The yen is vulnerable in the risk-on environment, but the its w! eakness i! s proving counter-productive for the trade balance. The next big challenge is the economy's resilience in the face of the capital gains tax hike at the start of the new calendar year and the retail sales tax increase the first of the new fiscal year.

6. Norway and Sweden's central banks meet Thursday. Neither is expected to cut interest rates. That said, over the medium term, we suspect that Sweden is more likely cut rates that Norway, especially if house prices can ease further in the coming months. In both countries, the PMI survey data has run well ahead of actual output.

Investment implication: The Norwegian krone and the Swedish krona have been the two weakest currencies over the month, losing 1.4% and 0.75% respectively against the dollar. In a risk-on environment they can play catch-up, with Norway the stronger of the pair.

Source: The Investment Climate In 6 Points

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