Friday, November 8, 2013

Investors Become Complacent; Volatility Drops

Volatility in bond and equity markets is back down to levels that would have been familiar to investors back in 2007. Bond and share prices have all moved relentlessly higher, often into uncharted territory.

The only things that have changed for the worse are economic fundamentals.

Growth across developed economies remains subdued and though forecasters are hopeful next year turns out better than this one, that’s still a long way short of the unshakeable optimism most observers felt in the year or two before the financial crisis.

Economic gloom might support high sovereign debt prices, but it’s not so good for equities and corporate bonds. And yes it’s true that a greater share of GDP is accruing to companies than to workers, which at first light is supportive of both corporate debt and share prices. But ultimately the less money people earn the less there is to be recycled into demand, which is bad for firms generally.

Central banks are clearly stitching the whole web together. Weak economies mean central bank liquidity, which supports asset prices, fundamentals notwithstanding.

The problem is that investors have grown convinced nothing can possibly go wrong for them. The VIX, which measures S&P 500 volatility and is popularly called a fear index, is broadly back down to where it was during the boom years–if not quite to those lows. Ditto for the VStoxx volatility index which measures European equity market volatility.

The MOVE index, which measures bond market volatility, has dropped back from the summer’s highs when debt markets were rocked by fears the Federal Reserve would start trimming its bond purchase program by the autumn, and isn’t far off 2007 levels again.

To judge from central banks’ reaction functions, maybe investors have a point. The Fed relented on tapering when equities and bonds wobbled. In effect, the central bank was saying that it is putting a floor under asset prices. As long as investors believe this can be achieved, asset prices will keep climbing.

The key question then is to what degree can central banks achieve this promise? Eventually there will be enough growth to dictate higher interest rates for fear of inflationary consequences. Central banks have to consider where asset prices might be at that point if they maintain their current asymmetric response. Will they abandon price stability for fear of upsetting asset markets? Or will they accept another collapse on the assumption that it won’t be as catastrophic?

Top 5 Growth Companies To Own In Right Now

Recent history suggests that when asset markets spin out of control–in either direction–central banks find it hard to control them. What investors now have to consider is what might cause asset markets to lose control. Economic fundamentals might yet trump central banking liquidity and government interventions in pricing assets. As they’ve regularly done in Japan over the past two decades.

Hot Low Price Companies To Watch In Right Now

Everything was looking great with my new investment. 

The stock had been steadily climbing higher since my purchase in early January. This company was among the original members of the S&P 500 and once ranked among the Dividend Aristocrats. Members of this exclusive list have raised their dividends annually for 25 consecutive years. Talk about a vote of confidence! 

However, the company was dropped from that list recently. Not because of an issue with its dividends -- but because it no longer had the minimum $3 billion market capitalization to remain a member. 

In addition, sales had been slipping over the past several years. Counterbalancing the bad news, the company was still creating decent cash flow, producing solid returns on invested capital and trading at relatively low price. 

Hot Low Price Companies To Watch In Right Now: Wayside Technology Group Inc.(WSTG)

Wayside Technology Group, Inc., an information technology channel company, resells software and hardware, as well as provides technical services to software development and information technology professionals primarily in the United States and Canada. It offers various products from publishers of software and tools for virtualization, networking, software development, database modeling, security, and other technical domains. The company operates in two segments, Lifeboat Distribution and TechXtend. The Lifeboat segment distributes technical software through a network of corporate and value-added resellers, consultants, and systems integrators. The TechXtend segment sells technical software, hardware, and services for microcomputers, servers, and networks to individual programmers, corporations, government agencies, and educational institutions. Wayside Technology Group, Inc. markets products through its Web sites, local and online seminars, and print and electronic catalo gs, as well as through direct e-mail and printed materials. The company was formerly known as Programmer?s Paradise, Inc. and changed its name to Wayside Technology Group, Inc. in August 2006. Wayside Technology Group, Inc. was founded in 1982 and is headquartered in Shrewsbury, New Jersey.

Hot Low Price Companies To Watch In Right Now: Wuxi Pharmatech(Cayman)

Wuxi PharmaTech (Cayman) Inc., through its subsidiaries, operates as a pharmaceutical, biotechnology, and medical device research and development outsourcing company primarily in the People?s Republic of China and the United States. It operates in two segments, Laboratory Services and Manufacturing Services. The Laboratory Services segment offers laboratory services for pharmaceutical and biotechnology companies, such as discovery and medicinal chemistry, analytical chemistry, discovery biology, safety pharmacology, DMPK/ADME, bio analytical services, process research, formulation, and toxicology, as well as testing and development services for biologics, medical devices, and combination products. The Manufacturing Services segment provides manufacturing process development services for the production of advanced intermediates and active pharmaceutical ingredients for use in preclinical and clinical trials. The company offers its services to support research and developme nt for pharmaceutical, biotechnology, and medical device companies. It sells its products directly, and through Internet Websites and participation in trade conferences, shows, and scientific conferences. The company was founded in 2000 and is headquartered in Shanghai, the People?s Republic of China.

Hot Blue Chip Stocks To Invest In Right Now: Benvest New Look Income Fd (BCI.TO)

New Look Eyewear Inc. provides eye care products and services in eastern Canada. It offers high definition digital lenses, frames, and sunglasses, as well as contact lenses. The company also offers eye exams and other eye care services. As of March 31, 2012, it operated 69 corporately owned eye care stores, including 61 in Qu茅bec province and 8 in Ontario region; and an eyewear transformation laboratory. The company was formerly known as Benvest New Look Income Fund and changed its name to New Look Eyewear Inc. in March 2010. New Look Eyewear Inc. is headquartered in Montr茅al, Canada.

Hot Low Price Companies To Watch In Right Now: PPL Corporation(PPL)

PPL Corporation, an energy and utility holding company, generates and sells electricity; and delivers natural gas to approximately 5.3 million utility customers primarily in the northeastern and northwestern U.S. The company operates in four segments: Kentucky Regulated, International Regulated, Pennsylvania Regulated, and Supply. The Kentucky Regulated segment engages in the generation, transmission, distribution, and sale of electricity; and the distribution and sale of natural gas to approximately 1.3 million customers in Kentucky, Virginia, and Tennessee. The International Regulated segment owns and operates electricity distribution businesses in the United Kingdom that deliver electricity to 7.7 million customers. The Pennsylvania Regulated segment delivers electricity to approximately 1.4 million customers in eastern and central Pennsylvania. The Supply segment owns and operates power plants to generate electricity using coal, uranium, natural gas, oil, and water res ources; markets and trades electricity and other purchased power to wholesale and retail markets; and acquires and develops domestic generation projects. It controls or owns a portfolio of generation assets of approximately 11,000 megawatts in Montana and Pennsylvania. As of December 31, 2010, the company?s distribution system included 649 substations with a capacity of 25 million kVA, 28,838 circuit miles of overhead lines, and 24,131 cable miles of underground conductors in the United Kingdom. It also operated 377 substations with a capacity of 31 million kVA, 33,122 circuit miles of overhead lines, and 7,368 cable miles of underground conductors in Pennsylvania. The company was founded in 1920 and is headquartered in Allentown, Pennsylvania.

Advisors' Opinion:
  • [By Justin Loiseau]

    Powering Pennsylvania
    Heading east, PPL (NYSE: PPL  ) announced Thursday that the Pennsylvania regulators have approved a new "Distribution System Improvement Charge" for its 1.4 million customers.

  • [By Justin Loiseau]

    PP&L (NYSE: PPL  ) reported earnings May 2, missing on sales expectations but managing to squeak past earnings estimates. Top lines have been tumbling across the sector, and PPL's bottom line took a major hit when trimmed hedged wholesale power prices pushed its unregulated earnings down more than 50%.

Hot Low Price Companies To Watch In Right Now: lime energy co.(LIME)

Lime Energy Co. provides energy engineering, consulting, and implementation solutions to the commercial, industrial, utilities, governmental, and energy services markets in the United States. The company?s energy efficiency solutions enable its clients to reduce energy-related expenditures and the impact of their energy use on the environment. Its services include energy consulting, integrated energy engineering, and multi-measure project development and implementation; mechanical/electrical upgrade services; water conservation; weatherization; and renewables across a range of facilities, including office buildings, manufacturing plants, retail sites, mixed use complexes, and large government sites. The company?s energy consulting and technical services comprise utility program management and implementation, energy project development, energy engineering, consulting, and planning. Lime Energy Co. also provides energy asset development and management services comprising p roject feasibility and technology assessment; sourcing, qualifying, and structuring investment opportunities; project financing; design and construction process management; and asset management. Its customers include commercial and industrial businesses, property owners and managers, utilities, energy service companies, government entities, and educational institutions. The company was formerly known as Electric City Corp. and changed its name to Lime Energy Co. in September 2006. Lime Energy Co. was founded in 1980 and is headquartered in Huntersville, North Carolina.

Advisors' Opinion:
  • [By CRWE]

    Lime Energy Co. (NASDAQ:LIME) reported their addition to NSTAR�� Municipal Program, which incentivizes municipalities to implement energy efficiency measures. The pre-selection of energy efficiency contractors is intended to streamline the procurement process for the municipalities that NSTAR currently serves.

Hot Low Price Companies To Watch In Right Now: Affymax Inc.(AFFY)

Affymax, Inc., a biopharmaceutical company, engages in the development of drugs for the treatment of serious and life-threatening conditions. It develops peginesatide (Hematide), which has completed Phase III clinical trial for the treatment of anemia associated with chronic renal failure. Hematide is a synthetic peptide-based erythropoiesis stimulating agent designed to stimulate production of red blood cells. The company has strategic alliance agreements with Takeda Pharmaceutical Company Limited and Nektar Therapeutics AL, Corporation to develop and commercialize Hematide. Affymax, Inc. was founded in 2001 and is based in Palo Alto, California.

Advisors' Opinion:
  • [By Kanak Kanti De]

    Amgen needed an Onyx-like acquisition badly. For one, sales of Aranesp and Epogen, its flagship drugs for anemia, are dropping on concerns of safety, and loss of monopoly in 2012 to Affymax (AFFY), which received FDA approval for a rival anemia drug. (Note though, that after Omontys was recalled this year, that problem is resolved for Amgen.) Secondly, four of its top selling products go off patent in 2015.

  • [By Alpha Exposure]

    Investors in Affymax (AFFY) would like you to believe that Omontys will make a miraculous comeback and that Affymax will be a major winner. My belief is that the last AFFY article contained multiple factual errors that when refuted show that the future for Omontys is in fact dire. At the conclusion of this article all doubt should be removed regarding the low likelihood that Omontys returns to market.

Hot Low Price Companies To Watch In Right Now: Tyco International Ltd.(Switzerland)

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

Hot Low Price Companies To Watch In Right Now: Herman Miller Inc.(MLHR)

Herman Miller, Inc. engages in the research, design, manufacture, and distribution of interior furniture systems, products, and related services worldwide. It also provides modular systems under the Action Office, Canvas Office Landscape, Ethospace, Resolve, My Studio Environments, and Vivo Interiors brand names; seating products under the Embody, Aeron, Mirra, Setu, Celle, Equa, and Ergon brand names; and storage products under the Meridian and Tu brand names. In addition, the company offers wooden casegoods under the Geiger brand name; freestanding furniture products under the Abak, Intent, Sense, and Envelop brand name; and ergonomic solutions. It markets its products for office, healthcare, industrial, educational, and residential settings through its sales staff, own dealer network, independent dealers and retailers, and independent contract office furniture dealers, as well as through Internet. The company was founded in 1905 and is based in Zeeland, Michigan.

Advisors' Opinion:
  • [By Rich Smith]

    Zeeland, Mich.-based Herman Miller (NASDAQ: MLHR  ) is buying New York's Maharam Fabric Corporation in an all-cash deal valued at $156 million.

  • [By Rex Moore]

    But today Jim's company is the largest craft brewer in the nation, with almost 1% of total beer sales. Many at the recent Craft Brewers Conference count Boston Beer among their most-admired companies. Our Rex Moore took on the tough assignment of covering the conference, and asked about other companies these brewers learned from. Today, New Belgium Brewing CEO Kim Jordan talks about Patagonia, Herman Miller (NASDAQ: MLHR  ) , and Interface (NASDAQ: TILE  ) .

Drilling for Oil Winners

Top 5 Canadian Companies To Buy For 2014

US oil production reached a 24-year high, and continued robust volume growth is likely, as favorable oil prices have spurred investment in US projects, forecasts Richard Moroney, editor of Upside Stocks.

And while the energy sector has handily outpaced the broad market over the last decade, several oil-related factors point to further upside for selective investors:

Shale drilling is a game changer. Production and estimated oil reserves have outstripped expectations since the surge in horizontal drilling and fracturing began two years ago.

US oil production is on a historic upswing. For full-year 2013, production is expected to climb 15%, on top of a 15% increase last year. For 2014, the EIA projects 13% growth. The US has not seen a three-year streak of double-digit production growth since 1905.

Below we review three industry standouts:

Carrizo Oil & Gas (CRZO) focuses on proven shale properties in Colorado, Ohio, Pennsylvania, and Texas. Its Eagle Ford operations, which span more than 50,000 drillable acres in Texas, have estimated oil and gas reserves of 173 million barrels, or about 42% of Carrizo's total.

Quantitatively, Carrizo's Overall score of 96 out of 100 is well-above the average of 57 for exploration-and-production stocks in the S&P 1500.

Carrizo, with a modest P/E of 12, based on estimated 2014 earnings, is being initiated as a Best Buy.

Based in Canada, Gran Tierra Energy (GTE) explores for oil and gas in Colombia, Argentina, Peru, and Brazil. In August, management raised its full-year production guidance, with the midpoint implying 27% growth.

Over the last 12 months, cash flow surged 45% to $1.50 per share. At $0.52 per share, trailing 12-month free cash flow is the highest in company history.

Gran Tierra, earning the maximum Overall Quadrix score of 100, and among the top 3% of stocks for Momentum, Value, Quality, and Financial Strength, is rated a Buy.

Oasis Petroleum (OAS) is expanding its footprint in the oil-rich shale regions of North Dakota and Montana.

It recently agreed to acquire roughly 161,000 acres in the Bakken region for $1.52 billion—a move that will boost the company's total acreage by nearly 50% to 492,000 acres.

The stock's Quadrix Overall score of 99, places it Number Two in its peer group. Shares earn a 97 for Momentum and 98 for Earnings Estimates, helped by better-than-expected results in the last five quarters. Oasis, our Number One pick in the energy sector, is a Best Buy.

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Thursday, November 7, 2013

Overcooked Noodles & Co. Plunges on Revenue Miss

What happens when noodles gets overcooked? They turn into a gooey, mushy mess. What happens when Noodles & Co (NDLS), which trades at a 78.5 times forward earnings, releases disappointing results? It too turns into a gooey, mushy mess.

Juergen Teller, Courtesy of the artist

Shares of Noodles & Co. have dropped 8% to $42.92 today at 11:47 a.m. Noodles is also dragging down other high-flying restaurant stocks. Potbelly (PBPB), for instance, has fallen 4.4% to $25.78, while Chipotle Mexican Grill (CMG) has declined 1.9% to $529.18 and Starbucks (SBUX) is off 1.5% at $79.92.

Reuters has the details on Noodles & Co’s disappointing results:

On an adjusted basis, Noodles, which serves pasta and noodle dishes for as little as $8, earned 11 cents per share in the third quarter, in line with the average analyst estimate.

Revenue rose 15.4 percent to $88.9 million. Analysts on average were expecting revenue of $91 million in the quarter ended October 1, according to Thomson Reuters I/B/E/S…

Hot Gold Companies To Invest In 2014

Comparable sales at Noodles’ company-owned restaurants rose 2.4 percent in the third quarter, below the 2.7 percent rise that analysts polled by Consensus Metrix expected.

Wedbush’s Nick Setyan and Colin Radke offer their thoughts:

We are cautious with respect to unit-level margin (currently in-line with growth peers) expansion going forward given low-single digit SSS growth with ~1% annual pricing and AUVs, including tx/store, that are below quick casual peers…We believe NDLS' current premiums on a P/E and EV/EBITDA basis to the restaurant growth group are unwarranted given largely in-line metrics relative to the group.

Even after today’s drop, shares of Noodles are up 138% from their offering price of $18 a share.

The Market Value Versus Book Value

Understanding the difference between book value and market value is a simple yet fundamentally critical component of any attempt to analyze a company for investment. After all, when you invest in a share of stock or an entire business, you want to know you are paying a sensible price.

Book Value literally means the value of the business according to its "books" or financial statements. In this case, book value is calculated from the balance sheet, and it is the difference between a company's total assets and total liabilities. Note that this is also the term for shareholders' equity. For example, if Company XYZ has total assets of $100 million and total liabilities of $80 million, the book value of the company is $20 million. In a very broad sense, this means that if the company sold off its assets and paid down its liabilities, the equity value or net worth of the business, would be $20 million.

Market Value is the value of a company according to the stock market. Market value is calculated by multiplying a company's shares outstanding by its current market price. If Company XYZ has 1 million shares outstanding and each share trades for $50, then the company's market value is $50 million. Market value is most often the number analysts, newspapers and investors refer to when they mention the value of the business.

Implications of Each

Book value simply implies the value of the company on its books, often referred to as accounting value. It's the accounting value once assets and liabilities have been accounted for by a company's auditors. Whether book value is an accurate assessment of a company's value is determined by stock market investors who buy and sell the stock. Market value has a more meaningful implication in the sense that it is the price you have to pay to own a part of the business regardless of what book value is stated.

As you can see from our fictitious example from Company XYZ above, market value and book value differ substantially. In the actual financi! al markets, you will find that book value and market value differ the vast majority of the time. The difference between market value and book value can depend on various factors such as the company's industry, the nature of a company's assets and liabilities, and the company's specific attributes. There are three basic generalizations about the relationships between book value and market value:

Book Value Greater Than Market Value: The financial market values the company for less than its stated value or net worth. When this is the case, it's usually because the market has lost confidence in the ability of the company's assets to generate future profits and cash flows. In other words, the market doesn't believe that the company is worth the value on its books. Value investors often like to seek out companies in this category in hopes that the market perception turns out to be incorrect. After all, the market is giving you the opportunity to buy a business for less than its stated net worth. Market Value Greater Than Book Value: The market assigns a higher value to the company due to the earnings power of the company's assets. Nearly all consistently profitable companies will have market values greater than book values. Book Value Equals Market Value: The market sees no compelling reason to believe the company's assets are better or worse than what is stated on the balance sheet. It's important to note that on any given day, a company's market value will fluctuate in relation to book value. The metric that tells this is known as the price-to-book ratio, or the P/B ratio:

P/B Ratio = Share Price/Book Value Per Share

(where Book Value Per Share equals shareholders' equity divided by number of shares outstanding)

So one day, a company can have a P/B of 1, meaning that BV and MV are equal. The next day, the market price drops and the P/B ratio is less than 1, meaning market value is less than book value. The following day the market price zooms higher and creates a P/B ratio of greater than 1, meaning market value now exceeds book value. To an investor, whether the P/B ratio is 0.95, 1 or 1.1, the underlying stock trades at book value. In other words, P/B becomes more meaningful the greater the number differs from 1. To a value-seeking investor, a company that trades for a P/B ratio of 0.5 implies that the market value is one-half of the company's stated book value. In other words, the market is selling you each $1 of net assets (net assets = assets - liabilities) for 50 cents. Everyone likes to buy things on sale, right?

Which Value Offers More Value?

So which metric - book value or market value - is more reliable? It depends. Understanding why is made easier by looking at some well-known companies.

Coca-Cola (NYSE:KO):

The Coca-Cola Co. has historically traded at a P/B ratio of 4 to 5. This means that Coca-Cola's market value has typically been 4 to 5 times larger than the stated book value as seen on the balance sheet. In other words, the market values the firm's business as being significantly worth more than the company's value on its books. You simply need to look at Coca-Cola's income statement to understand why. Coca-Cola is a very profitable company. Its net profit margin exceeds 15%. In other words, it makes at least 15 cents of profit from each dollar of sales. The takeaway is that Coca-Cola has very valuable assets - brands, distribution channels, beverages - that allow the company to make a lot of money each year. Because these assets are so valuable, the market values them far more than what they are stated as being worth from an accounting standpoint.

Another way to understand why the market may assign a higher value than stated book is to understand that book value is not necessarily an accurate value of a company's net worth. Book value is an accounting value, which is subject to many rules like depreciation that require companies to write down the value of certain assets. But if those assets are consistently generating greater profit, then the market understands that those assets are really worth more than what the accounting rules dictate. Other high-quality companies such as Johnson & Johnson (NYSE:JNJ), Pepsi (NYSE:PEP) and Procter and Gamble (NYSE:PG) will also possess market values far greater than book values.

Wells Fargo (NYSE:WFC):

Wells Fargo is one of the oldest and largest banks in the U.S. It typically trades for a P/B of 1, give or take a few percent. In other words, the market values Wells Fargo at or close to its book value. The reason here is simple, and it is explained by the ind! ustry Wells Fargo operates in. Financial companies hold assets that consist of loans, investments, cash and other financial securities. Since these assets are made of dollars, it's easy to value them: a dollar is worth a dollar. Of course we know that some financial assets can be better than others; for example, a good loan versus a bad loan. A good loan is one that is paid in full and the bank recoups 100 cents on the dollar. A bad loan can stick the bank with a loss and recoup 50 cents on the dollar. That's why whenever banks experience a financial crisis, as we saw in the subprime meltdown in 2008, their market values crash below book value. The market loses faith in the value of those assets.

On the other hand, financial institutions like American Express (NYSE:AXP), which have a long history of extending out good credit, will trade at a modest premium to book value. Banks that the market views as having made bad credit decisions will trade below book. But in general terms, you will never see banks trading for multiples of book value like you would see in Coca-Cola because of the nature of the assets.

When The Values Matter

To determine how book value relates to market value, look at the income generated by the company's assets. A company than can generate a relatively high income level from its assets will typically possess a market value that's far higher than its book value. This is called the company's return on assets, or ROA. Coca-Cola's ROA is typically around 7% to 8%. This means each dollar of Coke's assets generates 7 to 8 cents of profit. Wells Fargo has an ROA of 1% to 2%, earning 1 to 2 cents from each dollar of assets. Because Coca-Cola's assets generate more profit per dollar, its assets will be valued much higher in the marketplace. What this also means is that in the case of companies like Coca-Cola, book value is not as meaningful as it would be for a company like Wells Fargo.

The Bottom Line

Book value, like almost all other financial metrics, ha! s its use! fulness. But as is often the case with financial metrics, the real utility comes from understanding the advantages and limitations of book value. An investor must use that understanding to determine when book value should be used, and when it should be disregarded in favor of other meaningful parameters when analyzing a company.

Wednesday, November 6, 2013

Top 10 Gold Stocks To Own Right Now

Abbvie (NYSE: ABBV  ) , the�Abbott�spinoff that made its New York Stock Exchange debut at the start of the year, recently announced that its chief scientific officer will retire in the coming months. A new CSO has not yet been revealed, but is this something that investors need to watch? Can this appointment offer clues as to AbbVie's future strategy, much as a recent shake-up at Merck (NYSE: MRK  ) did? Health-care analyst Max Macaluso discusses this story in the following video.

In the pharma business, great success comes with a caveat. AbbVie is a perfect example, as investors in the new company are left wondering what the future holds once the company's golden goose, Humira, is cooked. The Fool's brand-new premium report on the company answers the high-profile questions that AbbVie investors are asking. Simply click here now to claim your copy today.

Top 10 Gold Stocks To Own Right Now: Australian Dollar(AU)

AngloGold Ashanti Limited primarily engages in the exploration and production of gold. It also produces silver, uranium oxide, and sulfuric acid. The company conducts gold-mining operations in South Africa; continental Africa, including Ghana, Guinea, Mali, Namibia, and Tanzania; Australia; and the Americas, which include Argentina, Brazil, and the United States. It also has mining or exploration operations in the Democratic Republic of the Congo, Guinea, and Colombia. As of December 31, 2010, the company had proved and probable gold reserves of 71.2 million ounces. The company has a strategic alliance with Thani Dubai Mining Limited to explore, develop, and operate mines across the Middle East and parts of North Africa. AngloGold Ashanti Limited, formerly known as Vaal Reefs Exploration and Mining Company Limited, was founded in 1944 and is headquartered in Johannesburg, South Africa.

Advisors' Opinion:
  • [By Dan Caplinger]

    One way Yamana has kept its competitive cost advantage is through extensive sales of base-metal byproducts like copper and zinc, as both it and fellow low-cost rival Goldcorp (NYSE: GG  ) benefit from utilizing those secondary metals to offset the cost of their gold production. Peers Gold Fields (NYSE: GFI  ) and AngloGold Ashanti (NYSE: AU  ) , on the other hand, face much higher costs in part because of their exposure to South Africa and its unstable labor market.

  • [By Sally Jones]

    Anglogold Ashanti Limited (AU)

    Down 65% over 12 months, Anglogold Ashanti Limited has a market cap of $4.85 billion, and trades with a P/E of 8.10.

Top 10 Gold Stocks To Own Right Now: Thompson Creek Metals Company Inc.(TC)

Thompson Creek Metals Company Inc., through its subsidiaries, engages in mining, milling, processing, and marketing molybdenum products in the United States and Canada. The company?s principal properties include the Thompson Creek Mine and mill in Idaho; a metallurgical roasting facility in Langeloth, Pennsylvania; and a joint venture interest in the Endako Mine, mill, and roasting facility in British Columbia. It also holds interests in development projects comprising the Davidson molybdenum property and the Berg copper-molybdenum-silver property located in northern British Columbia; the Howard?s Pass property, a lead and zinc project situated in the Yukon territory-northwest territories border; and the Maze Lake property, a gold project located in the Kivalliq district of Nunavut. The company produces molybdenum products, primarily molybdic oxide and ferromolybdenum, as well as soluble technical oxide, pure molybdenum tri-oxide, and high purity molybdenum disulfide. As o f December 31, 2010, its consolidated recoverable proven and probable ore reserves totaled 462.2 million pounds of contained molybdenum in the Thompson Creek Mine and the Endako Mine. The company was formerly known as Blue Pearl Mining Ltd. and changed its name to Thompson Creek Metals Company Inc. in May 2007. Thompson Creek Metals Company Inc. is based in Denver, Colorado.

Advisors' Opinion:
  • [By Selena Maranjian]

    The biggest new holdings are Chesapeake Energy�puts, and shares of Discovery Communications. Other new holdings of interest include Halcon Resources (NYSE: HK  ) , and Thompson Creek Metals (NYSE: TC  ) . Oil and gas company Halcon, operating in the promising Bakken region, as well as Texas's productive Eagle Ford shale region, among others, is expected to grow by 30% annually over the coming years. It recently reported 2012 net daily production 128% higher than year-ago levels, and proven reserves up 417%. Halcon was recently one of my colleague Joel South's top two energy holdings, and analysts at Stifel recently upped its rating�from Hold to Buy.

  • [By Jim Jubak]

    The stock market liked what it heard Wednesday, August 7, from Thompson Creek Metals (TC) after the close in New York. Second quarter adjusted net earnings of 8 cents a share crushed the Wall Street consensus of a penny a share. Revenue climbed 3.8% to $117.8 million versus expectations for revenue of just $1.3.8 million. The company also said that its new Mt. Milligan mine is on schedule with a start-up for the concentrator expected this month, with first ore-feed by mid-August. The company said it expects commercial production to begin in the fourth quarter of 2013, with production ramping to full capacity over the next twelve months.

  • [By Jon C. Ogg]

    Thompson Creek Metals Co. Inc. (NYSE: TC) was at 54% discount to its book value of $8.30 per share at the time, and the stock price of $3.90 is up from $3.03 Deutsche Bank’s team nailed upside of more than 28% here. Its price target was $4 at the time versus a consensus target of $4.50 at the time. The 52-week range here is $2.42 to $4.55, but we would point out that the consensus price target is $3.93.

Top 5 Bank Stocks To Invest In 2014: Golden Star Resources Ltd(GSS)

Golden Star Resources Ltd., a gold mining and exploration company, through its subsidiaries, engages in the acquisition, exploration, development, and production of gold properties. It owns and operates the Bogoso/Prestea gold mining and processing operation that covers approximately 40 kilometers of strike along the southwest-trending Ashanti gold district in western Ghana; and the Wassa open-pit gold mine located to the east of Bogoso/Prestea in southwest Ghana. The company also has an 81% interest in the Prestea underground gold mine located in Ghana. In addition, it holds interests in various gold exploration projects in Ghana, Sierra Leone, Burkina Faso, Niger, and Cote d?Ivoire, as well as holds and manages exploration properties in Brazil in South America. The company was founded in 1984 and is based in Littleton, Colorado.

Advisors' Opinion:
  • [By Sean Williams]

    Golden Star Resources (NYSEMKT: GSS  )
    It's simple physics: The bigger they are, the harder they fall. When gold prices nosedived earlier this week, gold miners with historically higher operating costs took the brunt of the hit. For the most part, that meant that development-stage miners, and those operating in Africa, where labor and political costs make cost-effective mining a challenge, took it on the chin. Possibly no stock was hammered more than Golden Star Resources, a gold miner in Ghana, which lost about one-quarter of its value on Monday alone.

  • [By Rich Duprey]

    Clash of the titans
    When bears are raging on the gold bullion market, it's not surprising to see gold stocks getting mauled as well. Golden Star Resources (NYSEMKT: GSS  ) was the biggest loser in the sector, losing a quarter of its market cap on no company-specific news, though a report last Friday indicated that a large number of hedge funds had recently dumped their positions in the mid-tier miner. Yet it wasn't all that much better among the majors, either, as Barrick Gold (NYSE: ABX  ) fell almost 13% and Kinross Gold (NYSE: KGC  ) was down 14%.

Top 10 Gold Stocks To Own Right Now: Goldman Sachs Group Inc.(The)

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

Top 10 Gold Stocks To Own Right Now: First Majestic Silver Corp.(AG)

First Majestic Silver Corp. engages in the production, development, exploration, and acquisition of mineral properties with a focus on silver in Mexico. The company owns interests in La Encantada Silver Mine comprising 4,076 hectares of mining rights and 1,343 hectares of surface land located in Coahuila; La Parrilla Silver Mine consisting of mining concessions covering an area of 69,867 hectares; and San Martin Silver Mine comprising approximately 7,841 hectares of mineral rights and approximately 1,300 hectares of surface land rights located in Jalisco. It also holds interests in Del Toro Silver Mine consisting of 393 contiguous hectares of mining claims and an additional 129 hectares of surface rights located in Zacatecas; Real de Catorce Silver Project comprising 22 mining concessions covering 6,327 hectares located in San Luis Potosi state; and Jalisco Group of Properties consisting of mining claims totalling 5,240 hectares located in Jalisco. The company was founded in 1979 and is headquartered in Vancouver, Canada.

Advisors' Opinion:
  • [By Doug Ehrman]

    While many precious-metals companies have been in a slump of late, there is one that belongs perpetually in your portfolio: Silver Wheaton (NYSE: SLW  ) . The company is not like other miners -- including Pan American Silver (NASDAQ: PAAS  ) and First Majestic (NYSE: AG  ) -- in that it has a unique business plan that insulates it against many of the vagaries of the mining business. Moreover, because silver will always have a significant industrial demand component, even with the heightened volatility you see in the silver market, maintaining exposure to silver is appropriate.

  • [By Doug Ehrman]

    It is no secret that precious metals companies have been taking a pounding for some time now. The SPDR Gold Trust (NYSEMKT: GLD  ) and iShares Silver Trust (NYSEMKT: SLV  ) , the gold and silver ETFs, have been hard hit and operating companies like First Majestic (NYSE: AG  ) and Barrick Gold (NYSE: ABX  ) have been hit even harder. Through all of these struggles, and in some cases because of them, one precious metals company continues to look attractive for the long term: Silver Wheaton (NYSE: SLW  ) .

Top 10 Gold Stocks To Own Right Now: Northgate Minerals Corporation(NXG)

Northgate Minerals Corporation, together with its subsidiaries, engages in exploring, developing, processing, and mining gold and copper deposits in Canada and Australia. Its principal producing assets include 100% interests in the Fosterville and Stawell Gold mines in Victoria, Australia; and the Kemess South mine located in north-central British Columbia, Canada. The company was formerly known as Northgate Exploration Limited and changed its name to Northgate Minerals Corporation in May 2004. Northgate Minerals Corporation was founded in 1919 and is headquartered in Toronto, Canada.

Top 10 Gold Stocks To Own Right Now: Claude Resources Inc.(CGR)

Claude Resources Inc. engages in the acquisition, exploration, and development of precious metal properties, as well as production and marketing of minerals in Canada. It primarily explores for gold in northern Saskatchewan and northwestern Ontario. The company holds interests in the Seabee gold mine located at Laonil Lake, northern Saskatchewan; and the Madsen property that consists of 6 contiguous claim blocks totaling approximately 10,000 acres, located in the Red Lake Mining District of northwestern Ontario. It also holds interest in the Amisk Gold project, which covers an area of 13,800 hectares in the province of Saskatchewan. The company was founded in 1980 and is based in Saskatoon, Canada.

Top 10 Gold Stocks To Own Right Now: Newmont Mining Corporation(Holding Company)

Newmont Mining Corporation, together with its subsidiaries, engages in the acquisition, exploration, and production of gold and copper properties. The company?s assets or operations are located in the United States, Australia, Peru, Indonesia, Ghana, Canada, New Zealand, and Mexico. As of December 31, 2009, it had proven and probable gold reserves of approximately 93.5 million equity ounces and an aggregate land position of approximately 27,500 square miles. The company was founded in 1916 and is headquartered in Greenwood Village, Colorado.

Top 10 Gold Stocks To Own Right Now: Agnico-Eagle Mines Limited(AEM)

Agnico-Eagle Mines Limited, through its subsidiaries, engages in the exploration, development, and production of mineral properties in Canada, Finland, and Mexico. The company primarily explores for gold, as well as silver, copper, zinc, and lead. Its flagship property includes the LaRonde mine located in the southern portion of the Abitibi volcanic belt, Canada. The company was founded in 1953 and is based in Toronto, Canada.

Advisors' Opinion:
  • [By Daniel Putnam]

    The second factor working in gold stocks��favor is that analysts are growing optimistic again. Yesterday, HSBC put out a bullish note on gold and upgraded Agnico Eagle Mines (AEM), Yamana Gold (AUY), Barrick Gold, Iamgold (IAG), and Goldcorp. Most gold stocks are ranked ��old��or ��uy��(as opposed to ��trong Buy�� by the majority of analysts, meaning that there�� plenty of room for continued positive news flow on this front.

Top 10 Gold Stocks To Own Right Now: CME Group Inc.(CME)

CME Group Inc. operates the CME, CBOT, NYMEX, and COMEX regulatory exchanges worldwide. The company provides a range of products available across various asset classes, including futures and options on interest rates, equity indexes, energy, agricultural commodities, metals, foreign exchange, weather, and real estate. It offers various products that provide a means of hedging, speculation, and asset allocation relating to the risks associated with interest rate sensitive instruments, equity ownership, changes in the value of foreign currency, credit risk, and changes in the prices of commodities. CME Group owns and operates clearing house, CME Clearing, which provides clearing and settlement services for exchange-traded contracts and counter derivatives transactions; and also engages in real estate operations. Its primary trade execution facilities consist of its CME Globex electronic trading platform and open outcry trading floors, as well as privately negotiated transact ions that are cleared and settled through its clearing house. In addition, the company offers market data services comprising live quotes, delayed quotes, market reports, and historical data services, as well as involves in index services business. CME Group?s customer base includes professional traders, financial institutions, institutional and individual investors, corporations, manufacturers, producers, and governments. It has strategic partnerships with BM&FBOVESPA S.A., Bursa Malaysia Derivatives, Singapore Exchange Limited, Green Exchange, Dubai Mercantile Exchange, Johannesburg Stock Exchange, and Bolsa Mexicana de Valores, S.A.B. de C.V., as well as joint venture agreement with Dow Jones & Company. The company was formerly known as Chicago Mercantile Exchange Holdings Inc. and changed its name to CME Group Inc. in July 2007. CME Group was founded in 1898 and is headquartered in Chicago, Illinois.

Advisors' Opinion:
  • [By Laura Brodbeck]


    Earnings Releases Expected: Black Hills Corporation (NYSE: BKH), CME Group Inc. (NASDAQ: CME), Leapfrog Enterprises (NYSE: LF), Hill International, Inc. (NYSE: HIL) Economic Releases Expected: eurozone manufacturing PMI, British construction PMI, US factory orders, Chinese services PMI, Indian services PMI


10 Best Heal Care Stocks To Own For 2014

With economic data taking a backseat to a slew of better-than-expected earnings reports, the broad-based S&P 500 continues to knock off one all-time record close after another. For skeptics like me, that's an opportunity to see whether companies have earned their current valuations.

Keep in mind that some companies�deserve�their current valuations. Take railroad operator Union Pacific (NYSE: UNP  ) for example. Union Pacific grew profit by 11% in its most recent quarter as it was able to offset demand weakness in coal with higher prices. With many railroad operators predicting a pickup in shipments in the second half of the year, Union Pacific certainly looks to be in great shape moving forward.

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

Raise the yellow caution flag
In spite of trucking company YRC Worldwide's (NASDAQ: YRCW  ) share price doubling last week following the company's first quarterly profit in six years (that's right...�six years), shares are still down a mind-boggling 99.9928% over the past decade. Somehow avoiding bankruptcy a few years back by diluting existing shareholders into oblivion, YRC has investors now thinking the company may be on the mend. However, its history makes me�believe otherwise.

10 Best Heal Care Stocks To Own For 2014: Boise Inc (BZ)

Boise Inc., incorporated on February 1, 2007, is a manufacturer of packaging and paper products, including corrugated containers and sheets, containerboard, protective packaging products, imaging papers for the office and home, printing and converting papers, label and release papers, newsprint and market pulp. The Company operates in the United States, Europe, Mexico, and Canada. The Company operates in three segments: Packaging, Paper, and Corporate and Other. The Company�� newsprint is sold primarily to newspaper publishers in the southern and southwestern the United States. During the year ended December 31, 2012, approximately 38% of the Company�� uncoated freesheet paper was sold to OfficeMax Incorporated, its customer.


In the Packaging segment, the Company manufactures and sells linerboard, containerboard, corrugated containers and sheets, protective packaging products, and newsprint. Linerboard is a paperboard, which when combined with corrugating medium is used in the manufacture of corrugated sheets and containers. Corrugated sheets are containerboard sheets that are sold primarily to converters that produce a variety of corrugated products. Corrugated containers are corrugated sheets that have been fed through converting machines to create containers, which are used in the packaging of fresh fruit and vegetables, processed food, beverages, and other industrial and consumer products. Stock boxes are corrugated containers manufactured to pre-set dimensions.

Protective packaging products include multi-material customized packaging solutions, which may utilize kraft paper-based honeycomb corrugated packaging, foamed plastics, and air pocket packing materials Newsprint is a paper commonly used for printing newspapers, other publications, and advertising material. During the year ended December 31, 2012, its Packaging segment produced approximately 613,000 short tons of linerboard, and its Paper segment produced approximately 135,000 short tons! of corrugating medium. It manufactures linerboard and newsprint on two machines at its mill in DeRidder, Louisiana. It also manufactures corrugated containers and sheets and protective packaging products at 26 plants located in North America and Europe.


In its Paper segment, the Company manufactures and sells three general categories of products: communication-based papers; packaging-based papers, and market pulp. Its communication-based papers include cut-size office papers, and printing and converting papers. Its Packaging-Demand-Driven Papers include Label and release papers, Flexible packaging papers, and Corrugating medium. Printing and converting papers are used by commercial printers or converters to manufacture envelopes, forms, and other commercial paper products.

Its packaging-based papers include label and release papers and corrugating medium. The Label and release papers include label facestocks, as well as release liners. The coated and uncoated papers sold to customers create packaging products for food and nonfood applications. Market pulp is sold to customers in the open market for use in the manufacture of paper products. The Company manufactures its Paper segment products at three mills, all located in the United States.

Corporate and Other

The Company�� Corporate and Other segment includes transportation assets, such as rail cars and trucks, which it uses to transport its products from its manufacturing sites. The Company provides transportation services not only to its own facilities but also, on a limited basis, to third parties. Rail cars and trucks are typically leased.

The Company competes with International Paper Company, Rock-Tenn Company, Georgia-Pacific LLC, Packaging Corporation of America, Longview Fibre Paper, Packaging, Inc, Green Bay Packaging Inc., KapStone Paper, TexCorr, L.P., Resolute Forest Product, SP Newsprint Co. and Domtar Corporation.

Advisors' Opinion:
  • [By Ben Levisohn]

    Packaging Corp. of America�(PKG) has jumped 6.3% to $57.99 after it said it would buy Boise (BZ) for $1.28 billion. Boise has gained 26% to $12.55.

  • [By Paul Ausick]

    Stocks on the move: Boise Inc. (NYSE: BZ) is up 26% at $12.55 following the company�� acquisition by Packaging Corporation of America Inc. (NYSE: PKG) for $12.55 a share ($1.28 billion). Omeros Corp. (NASDAQ: OMER) is up 68.2% at $8.56 following an analyst upgrade. Northern Dynasty Minerals Ltd. (NYSEArca: NAK) is down 33.3% at $1.48 following an announcement from Anglo American plc that it was withdrawing from a massive copper mining project in Alaska.

  • [By Sue Chang]

    PCA, the Packaging Corp. of America (PKG) ,�is likely to post third-quarter earnings of 89 cents a share. The company said last month it would buy Boise Inc. (BZ) �for $12.55 a share, or about $1.28 billion in total. The deal is expected to close in the fourth quarter. Lake Forest, Ill.-based PCA makes a wide line of linerboard and corrugated paper packaging products at four mills and 71 plants, according to its website.

  • [By Christopher Freeburn]

    Under the deal, which is expected to close during the fourth quarter, Packaging Corp. will pay $12.55 a share, or $1.27 billion, for Boise (BZ). That represents a 26% premium over the target’s last closing price, the Associated Press noted.

10 Best Heal Care Stocks To Own For 2014: Tower Ltd (TWR.AX)

TOWER Limited provides life and general insurance products primarily in New Zealand. The company�s insurance products include boat, business, car, caravan, contents, corporate-commercial, disability, farm-lifestyle, funeral, house, income protection, jet ski, life, motorcycle, trauma, travel, truck, yacht, and fire insurance. It also offers savings and investment management services, including individually managed account services, retail and institutional fund management services, workplace superannuation schemes, and financial advisory services. In addition, the company provides general insurance services in the Pacific Islands. TOWER Limited was founded in 1869 and is based in Auckland, New Zealand.

Top 10 Clean Energy Companies For 2014: Midway Gold Corporation(MDW)

Midway Gold Corp., an exploration stage company, engages in the acquisition, exploration, and development of mineral properties in North America. Its principal properties include the Spring Valley, Midway, Pan, and Gold Rock gold and silver mineral properties located in Nevada; and the Golden Eagle gold mineral property located in Washington. The company was formerly known as Red Emerald Resource Corp. and changed its name to Midway Gold Corp. in July 2002. Midway Gold Corp. was founded in 1996 and is headquartered in Englewood, Colorado.

10 Best Heal Care Stocks To Own For 2014: Grand View Gold Inc (GVX.TO)

Grandview Gold Inc., a gold exploration company, focuses on exploring and developing gold properties in Canada and South America. It holds interests in three gold projects, located in Red Lake Mining District of southwest Ontario; and three grass roots stage gold projects in Rice Lake Gold District located in Manitoba. The company, through its subsidiary, Recuperaci贸n Realzada S.A.C., also has an option to acquire up to a 100% interest in the 400 hectare gold-producing Giulianita Property located in northwest Peru. The company was formerly known as Consolidated Grandview Inc. and changed its name to Grandview Gold Inc in July 2004. Grandview Gold Inc. was incorporated in 1945 and is headquartered in Toronto, Canada.

10 Best Heal Care Stocks To Own For 2014: Ikanos Communications Inc.(IKAN)

Ikanos Communications, Inc. provides broadband semiconductor and software products for the digital home. The company develops and markets end-to-end products for the last mile and the digital home, which enable carriers to offer triple play services, including voice, video, and data. It offers broadband digital subscriber line (DSL) products, such as high-density and low-power asymmetric DSL, and very-high-bit rate DSL products; communications processors that support various wide area network topologies, including passive optical network, DSL, wireless broadband, and Ethernet; and other products for access infrastructure and customer premises equipment (CPE) to network equipment manufacturers and telecommunications service providers. The company?s products comprise digital subscriber line access multiplexers, optical network terminals, concentrators, modems, voice over Internet protocol terminal adapters, integrated access devices, and residential gateways. It primarily s erves original design manufacturers, contract manufacturers, network equipment manufacturers, and original equipment manufacturers through direct sales and third-party sales representatives worldwide. The company was formerly known as Velocity Communications and changed its name to Ikanos Communications, Inc. in December 2000. Ikanos Communications, Inc. was incorporated in 1999 and is headquartered in Fremont, California.

10 Best Heal Care Stocks To Own For 2014: Metro Holdings Limited (M01.SI)

Metro Holdings Limited, together with its subsidiaries, engages in the property development and investment, and retail businesses primarily in the People�s Republic of China, Indonesia, and Singapore. It operates in two segments, Retail and Property. The Retail segment operates a chain of department stores and specialty stores, which offer a range of merchandise, fashion accessories, and casual women�s wear. This segment serves customers through a chain of four Metro department stores; eight Monsoon/Accessorize/M.2 specialty store in Singapore; and eight department stores in Indonesia. The Property segment engages in leasing shopping and office spaces; and investing in property-related businesses. This segment has interests in 143,000 square meters of retail and office properties in Beijing, Shanghai, and Guangzhou. Metro Holdings Limited was founded in 1957 and is based in Singapore.

10 Best Heal Care Stocks To Own For 2014: Nexus Energy Ltd (NXS.AX)

Nexus Energy Limited engages in the exploration, development, and production of oil and gas in Australia. It primarily holds interests in the Longtom gas project located in production license VIC/L29 within the Gippsland Basin, Victoria; and the Crux AC/L9 asset and WA-377-P exploration permit located in the Browse Basin, Western Australia. The company is based in Melbourne, Australia.

10 Best Heal Care Stocks To Own For 2014: Camino Minerals Corporation (COR.V)

Camino Minerals Corporation, an exploration stage company, engages in the exploration and development of mineral properties in Mexico. The company focuses on precious and base metal projects. It holds 100% interests in the El Rincon gold project, which comprises 1 mineral claim covering an area of 12,946 hectares, located to the northeast of the city of Durango; and the Maijoma claim group that includes three contiguous claim groups, such as Maijoma, Aqua Loca/Los Volcanes, and El Alamo covering an area of 83,985 hectares and is located in southeast of Ojinaga in northeast Chihuahua. The company also has 100% interests in the Mecatona gold prospect, which consists of 7 mineral claims covering an area of 5,300 hectares and is located to the south of the city of Parral; and the Rodeo gold project, which comprises two claims covering an area of 13,099 hectares, located to the north of the city of Durango. Camino Minerals Corporation is headquartered in Vancouver, Canada.

10 Best Heal Care Stocks To Own For 2014: Pennon(PNN.L)

Pennon Group Plc, through its subsidiaries, provides water and sewerage services for Devon, Cornwall, and parts of Dorset and Somerset in the United Kingdom. The company serves a region of 10,300 square kilometers (km) with approximately 1.65 million residents; and approximately 39 million visitors. It supplies approximately 420 megalitres of treated water per day through 15,058 km of water distribution mains, as well as disposes approximately 235 megalitres of waste water per day through 9,288 km of sewers. The company also engages in the waste management, recycling, and renewable energy businesses. Its waste management services include waste treatment, recycling, and landfill disposal. In addition, the company recycles and generates electricity from landfill gas, as well as operates materials recycling facilities, waste transfer stations, treatment plants, household waste recycling sites, and composting facilities. Pennon Group Plc is based in Exeter, the United Kingdom.

10 Best Heal Care Stocks To Own For 2014: Brookdale Senior Living Inc. (BKD)

Brookdale Senior Living Inc. owns and operates senior living communities in the United States. It operates in six segments: Retirement Centers, Assisted Living, Continuing Care Retirement Communities (CCRCs)�Rental, CCRCs-Entry Fee, Innovative Senior Care, and Management Services. The Retirement Centers segment owns or leases communities comprising independent living and assisted living units in a single community that are primarily designed for middle to upper income senior citizens. The Assisted Living segment owns or leases communities consisting of freestanding, multi-story communities, and freestanding single story communities, which offer housing and 24-hour assistance to mid-acuity frail and elderly residents. This segment also operates memory care communities for residents with Alzheimer's disease and other dementias. The CCRCs-Rental segment owns or leases communities that offer various living arrangements and services to accommodate physical ability and health. The CCRCs-Entry Fee segment allows residents in the independent living apartment units to pay a one-time upfront entrance fee to use certain amenities and services. The Innovative Senior Care segment provides outpatient therapy, home health, and hospice services to residents of its communities and other senior living communities. The Management Services segment operates third party communities under the management agreements. As of December 31, 2012, it operated 76 retirement center communities with 14,528 units; 433 assisted living communities with 21,594 units; 27 rental CCRC communities with 6,748 units; 14 entry fee CCRC communities with 5,866 units; and 97 communities with 17,998 units for third parties. Brookdale Senior Living Inc. is based in Brentwood, Tennessee.

Advisors' Opinion:
  • [By Tom Lydon]

    Top holdings based on the index include Acadia Healthcare Companies (ACHC), Amsurg Corporation (AMSG), Brookdale Senior Living (BKD), Clarcor (CLC) and Community Health Systems (CYH).

Tuesday, November 5, 2013

German Stocks Decline as EU Reduces Growth Forecast

German stocks declined from a record as the European Union trimmed its forecast for euro-area growth next year and investors weighed company results.

Bayerische Motoren Werke AG (BMW) dropped 2.9 percent after the world's biggest maker of luxury vehicles reported a decrease in third-quarter profit. Siemens AG (SIE) lost 1.3 percent after UBS AG cut its rating on Europe's largest engineering company. Beiersdorf AG (BEI) rallied 5.3 percent after increasing its full-year sales forecast.

The DAX slipped 0.3 percent to 9,009.11 at the close of trading in Frankfurt, paring earlier losses of as much as 0.8 percent. The gauge advanced to a record yesterday as investors awaited this week's monetary-policy decision from the European Central Bank. The broader HDAX Index dropped 0.3 percent today.

"Today feels like the small leg down that everyone had been expecting for weeks," Alex Neil, head of equity and derivatives trading at EFG Bank in Geneva, said in an interview. "Instead of the innocuous correction it could have been, it's being overshadowed by the prospect of a slowdown in European growth. Many investors will be waiting on the sidelines to see what the ECB does on the back of the revised EU forecasts."

Gross domestic product in the 17-nation currency bloc will rise by 1.1 percent in 2014, less than the 1.2 percent forecast in May, the Brussels-based commission said today. Unemployment, now at its highest rate since the euro was introduced, will be 12.2 percent in 2014, higher than the 12.1 percent predicted six months ago.

ECB Announcement

The DAX (DAX) has still surged 18 percent this year as the Federal Reserve maintained stimulus measures and the ECB cut interest rates to a record low. The ECB will make its next announcement on monetary policy on Thursday.

Bank of America Corp., UBS and Royal Bank of Scotland Group Plc forecast the central bank will cut its benchmark rate at the meeting, according to a Bloomberg News survey of 70 economists, with the rest predicting no change. The ECB last reduced the interest rate in May to a record low of 0.5 percent.

"I don't think any central bank is going to start reeling in the easy money anytime soon, so I still think we'll finish the year higher," Neil said.

Equities trimmed losses after a report showed service industries in the U.S. expanded in October at a faster pace than forecast. The Institute for Supply Management's non-manufacturing index increased to 55.4 from the prior month's 54.4, the Tempe, Arizona-based group said today. A reading above 50 shows expansion. The median estimate in a Bloomberg survey of economists was 54.

Carmakers Fall

BMW dropped 2.9 percent to 81.20 euros, its biggest decline since Aug. 27. The carmaker said third-quarter earnings before interest and taxes fell 3.7 percent to 1.93 billion euros ($2.6 billion) as spending on expansion offset stronger demand for the 3-Series sedan. Revenue slipped 0.4 percent to 18.8 billion euros, even as deliveries rose 11 percent.

Daimler AG, the world's third-biggest maker of luxury cars, lost 0.8 percent to 59.35 euros. Volkswagen AG, Europe's largest vehicle manufacturer, slipped 0.6 percent to 190.90 euros.

Siemens lost 1.3 percent to 92.41 euros. UBS lowered its recommendation on the Munich-based company to neutral from buy, saying the shares are now trading in line with the sector.

Axel Springer AG (SPR) declined 1.5 percent to 43.43 euros. Goldman Sachs Group Inc. cut its rating on Europe's biggest newspaper publisher to sell from neutral, saying its valuation is the highest of the publishers it covers. Shares trade at 18.6 times earnings compared with 16.3 times for the DAX.

5 Best Value Stocks To Watch For 2014

Fraport AG lost 2.1 percent to 55.63 euros. Deutsche Bank AG cut the operator of Frankfurt airport to hold from buy, saying a recovery in traffic is already priced into the shares.

Beiersdorf Gains

Beiersdorf rallied 5.3 percent to 73.44 euros. The maker of Nivea hand cream said sales will rise 6 percent to 7 percent this year. The Hamburg-based company previously forecast revenue to increase 5 percent to 6 percent. Beiersdorf also said its Tesa adhesives unit is performing better than it anticipated.

Fresenius SE climbed 3.4 percent to 96.85 euros. The health-care group reported third-quarter adjusted net income of 271 million euros, exceeding the 258 million euros average projected by analysts. The company also reiterated that it sees 2013 net income increasing between 11 percent and 14 percent, while sales may rise as much as 10 percent.

Symrise AG (SY1) jumped 5.7 percent to 32.95 euros. The fourth-largest maker of flavors and fragrances pledged to remain one of the most profitable companies in its industry amid higher demand for aroma molecules and fragrances. Earnings before interest, taxes, depreciation and amortization, will be about 20 percent of sales in 2013 and will stay in the range of 19 percent to 22 percent in coming years, the company said today.

Heidelberger Druckmaschinen

Heidelberger Druckmaschinen AG (HDD) jumped 14 percent to 2.20 euros, its biggest gain since February 2009, as it announced a digital partnership with Fujifilm Corp. Under the terms of the agreement, Heidelberger Druck will gain access to Fujifilm's inkjet technology and its partner will in return benefit from the German company's engineering and manufacturing activities, Heidelberger Druck said.

Sky Deutschland AG (SKYD) surged 5 percent to 7.55 euros, the highest price since September 2008. The pay-television said third-quarter ebitda climbed 19 percent to 29.2 million euros. Revenue jumped 19 percent from a year earlier to 392.7 million, topping analysts' estimates.

An Under-the-Radar Stock that Could Rally

One of the most lucrative yet under-the-radar industries in healthcare might be wound management and hemostasis (stop bleeding). It is a secular industry, but one that grows with the rate of population, and is expected to top $40 billion by 2015. Johnson & Johnson (JNJ) is perhaps the most well-known in this space, as its wound care space creates sales over $1 billion per year, including Band-Aid. Then, there are other companies such as Boston Scientific (BSX), Abbot Labs (ABT), and even industrial companies such as 3M (MMM) that have products in this space. However, revenue in this space is spread thoroughly, as there is no one product that has successfully penetrated all wound management segments, such as home, first-aid, surgery, etc. Therefore, a breakthrough in wound management could create large revenue and could become highly useful, although the market has little knowledge of its existence.

Several years back, MIT developed a synthetic peptide of naturally occurring amino acids in a gel-like form. That peptide, now called AC5, is being developed by a small company called Arch Therapeutics (ARTH.OB), and is actually squirted or sprayed onto a wound or incision which then hardens in seconds. Currently, Arch is testing the product as a medical device in operating rooms with surgery, but theoretically, AC5 could be used in place of Band-Aids, in the military, etc.

Thus, Arch's targeted market is hemostasis, which is estimated to be a $4 billion market, or one-tenth the wound management industry. Although, I do expect that in time, AC5 will branch out into other segments of the space. Essentially, AC5 stops blood flow faster, in seconds rather than minutes. It is safe, cheap to administer and manufacture, and it is not sticky nor does it leak like many other products in the hemostasis market.

Right now, shares of Arch are trading at just $0.25 with a market cap of about $25 million. Hence, it is a very small company. However, much of its valuation is tied to the fact that its lead product is for wound healing. To many investors, wound healing does not have the same appeal as a cancer vaccine, hepatitis C medication, or a drug to treat genetic diseases. Yet, the wound management market is about as large as any industry in the market, and we have seen very few, if any, innovations within the space for many years. Moreover, instead of viewing its industry as a negative, I think it should be viewed as a positive.

Take a look at a company such as Verastem (VSTM) for example. Verastem is developing next generation chemotherapies, which also help to prevent recurrence. Back in 2012, the company filed for its IPO, began trading with a market cap near $300 million, but was yet to begin clinical testing. Moreover, we've seen a slew of companies in 2013 file IPOs without having any human testing. Bind Therapeutics priced its IPO at $15 last week, but its nanoparticle delivery technology is yet to reach human studies, but that doesn't stop the company being awarded a $700 million market cap plus.

The point to mentioning Verastem, Bind, and biotech IPOs of 2013 is to show the valuation awarded to preclinical companies, the different levels of optimism for drugs/vaccines, but to also explain clinical process. For example, Verastem has now begun clinical testing, but the company has to go through Phase 1, 2, and 3 trials, which all include long periods of time to both determine if there is a statistical difference between its products versus chemotherapy and if it's safe.

Monday, November 4, 2013

Will AIG Continue To Move Higher?

With shares of American International Group (NYSE:AIG) trading around $48, is AIG an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

AIG is an international insurance company, serving customers in a wide range of countries around the world. AIG companies serve commercial, institutional, and individual customers through property casualty networks of any insurer. AIG's companies are also providers of life insurance and retirement services. AIG's segments include Chartis, SunAmerica Financial Group, Aircraft Leasing, and other operations. The company suffered greatly during the 2008 financial crisis, but is now on the road to recovery. Insurance companies will continue to grow as new and existing risks continue to concern businesses and consumers worldwide.

AIG reported third-quarter earnings that beat expectations with profit rising 17 percent to $2.17 billion and adjusted earnings of 96 cents a share. But, shares were still down in pre-market trading Friday morning, as AIG's property-casualty business paid more in claims than it made, causing revenue for the unit to fall 3.7 percent. AIG also said that the sale of its ILFC aircraft-leasing unit had not yet closed and may be terminated, according to Reuters.

T = Technicals on the Stock Chart are Strong

AIG has seen its stock rise over the last couple of years. The stock is currently trading at highs for the year. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, AIG is trading between its rising key averages, which signals neutral price action in the near-term.


(Source: Thinkorswim)

Taking a look at the implied volatility (red) and implied volatility skew levels of AIG options may help determine if investors are bullish, neutral, or bearish.

Implied Volatility (IV)

30-Day IV Percentile

90-Day IV Percentile

AIG Options




What does this mean? This means that investors or traders are buying a small amount of call and put options contracts, as compared to the last 30 and 90 trading days.

Put IV Skew

Call IV Skew

November Options



December Options



As of today, there is an average demand from call and put buyers or sellers, all neutral to bullish over the next two months. To summarize, investors are buying a small amount of call and put option contracts and are leaning neutral over the next two months.

On the next page, let’s take a look at the earnings and revenue growth rates and the conclusion.

E = Earnings Are Mixed Quarter-Over-Quarter

Rising stock prices are often strongly correlated with rising earnings and revenue growth rates. Also, the last four quarterly earnings announcement reactions help gauge investor sentiment on AIG’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for AIG look like and more importantly, how did the markets like these numbers?

2013 Q3

2013 Q2

2013 Q1

2012 Q4

Earnings Growth (Y-O-Y)





Revenue Growth (Y-O-Y)





Earnings Reaction





AIG has seen mixed earnings and decreasing revenue figures over the last four quarters. From these numbers, the markets have had mixed feelings AIG’s recent earnings announcements.

* As of this writing

P = Excellent Relative Performance Versus Peers and Sector

How has AIG stock done relative to its peers, Berkshire Hathaway (NYSE:BRKB), American Financial Group (NYSE:AFG), OneBeacon Insurance Group (NYSE:OB), and the sector?


Berkshire Hathaway

American Financial Group

OneBeacon Insurance Group


Year-to-Date Return






AIG has been a relative performance leader, year-to-date.


AIG is an international insurance company that is beginning to show signs of positive growth. The company reported earnings that beat expectations. The stock has been rising over the last couple of years and is currently at highs for the year. Over the last four quarters, earnings have been mixed while revenue’s have been decreasing, leaving investors with mixed feelings about the company. Relative to its peers and sector, AIG has been a year-to-date performance leader. Look for AIG to OUTPERFORM.

Sunday, November 3, 2013

Is the Market Irrationally Exuberant?

Now that the S&P 500 has broken all-time highs above 1,700, has the stock market’s mood gotten too giddy?

The SPDR S&P 500 ETF (SPY) has climbed 21.04% year-to-date, and that impressive rise has caused people to totally change their mind about stocks.

On Jan. 2, 36% of investors polled described themselves as bears compared to just 18% on July 10, according to the AAII Sentiment Survey. Put another way, the percentage of individual investors that are “bearish” on the U.S. stock market has been cut in half since the beginning of the year. What a reversal!

What about market volatility?

The CBOE S&P 500 Volatility Index (^VIX) is one of the easiest ways to gauge the stock market’s temper. It can tell us a lot. Over the past 12 years, the VIX has moved in the opposite direction as the S&P 500 around 80% of the time.

A depressed VIX can be interpreted as too much complacency or lack of fear in the stock market. Conversely, an elevated VIX infers a high level of anxiety or fear.

In a July 10 post, Michael Moran at the Chicago Board Options Exchange (CBOE) wrote: "Since 1990 the average daily close for the VIX Index was 20.3, but in the first half of 2013: the VIX average daily close was 14.2, and the VIX closed above 20 on only two days – June 20th (at 20.49) and June 24th (at 20.11).”

Really, the last two years have been a period of muted stock market gyrations. Since late 2011, the VIX hasn’t traded above 30.

VIX ETPs like the ProShares VIX Short-Term Futures ETF (VIXY) and the iPath S&P VIX ST Futures ETN (VXX) continue to get crushed. And although the VIX has now marched toward 52-week lows near 11, market volatility is a sleeping giant that never goes away.

What about people going into debt to buy stocks?

NYSE margin debt hit a new all-time high in April, slightly exceeding the previous peak which coincided with the market top in 2007. We know that today’s modernized stock market has many of the safeguards that the 1929 market didn’t have, but excessive speculative borrowing is a red flag in any decade.    

Finally, frenzied penny stock buying is another warning sign.

The dollar volume traded in OTCBB stocks is already at 24,459,441,278 for the first six months of this year compared to just 13,295,767,536 for all of 2012! In other words, the public’s appetite for dicey penny stocks is insatiable.

Hot Undervalued Stocks To Watch Right Now

From a contrarian point of view, none of this means that stocks can’t or won’t continue to rise. Prudence, however, means doing the opposite of the crowd.

Or as Sir John Templeton put it: “Common sense is not common; but common sense and careful logic show that it is impossible or produce superior investment performance if you buy the same assets at the same time as others.”   


 The ETF Advisor Pro Newsletter and its Mega Investment Theme Report identifies major market trends along with actionable ETF strategies.

Precious Metal Platinum Quickly Turning Chinese

It happens to all commodities. At one time or another, China falls in love with you and barring a drought or striking miners somewhere, your price becomes dependent on Chinese mood swings.

It's happened with soybeans and iron ore, oil and copper. Now it's platinum's turn, ETF Securities' Director of Research Mike McGlone said this past week in a research report for clients.

Platinum is one of the world's rarest metals, with a wide variety of uses. It is well known that platinum is heavily used in the manufacture of auto catalysts for use in the diesel vehicles that dominate the European vehicle market.  Tightening global emission standards have caused a structural upward shift in demand for these auto catalysts and the platinum used in them. Less well known, however, is that the largest single source of platinum demand over the past few years has been jewelry – and nearly all of that demand stems from the Chinese.

Prior to the recession in Europe, European auto catalysts accounted for the single largest demand component for platinum.   At the demand peaks in 2006 and 2007, European platinum demand from the auto makers totaled around 2 million ounces annually, roughly double the demand from Chinese jewelry.  But by 2012, Chinese platinum jewelry demand increased 16% to just under 2 million ounces and European demand for auto catalysts declined to 1.3 million.

As Europe emerges from its crisis, auto catalyst demand for platinum is likely to rebound, but Chinese platinum jewelry demand this year is already on pace to surpass the peak demand from European auto catalysts, which occurred in 2006-07. Moreover, more Chinese are wedding platinum wedding bands than ever before, pushing sales above and beyond the previous record for Chinese platinum jewelry sales of 2.08 million ounces in 2009, according to the ETF Securities report.

The Platinum Guild International began marketing the precious metal in China 15 years ago. Demand for platinum in China has surged ever since, especially among urban women. Prior to 2008, platinum was trading about double the price of gold.  Today, Platinum futures for the nearby Dec. contract are $740.08 per ounce, up $2.55 in Friday's trade, but still much cheaper than gold.

No surprise. Chinese platinum jewelry demand bigger than Japan, North America and European demand combined.

Precious metals access in modern communist China has evolved from an almost illegal status to one that is actively encouraged by the state.  In 2004, China classified precious metals as an investment, prompting people to buy gold.  In 2009, the Chinese government began a concerted effort to promote precious metals ownership, running programs and advertisements on China's Central Television on how to purchase precious metals.  Gold ATM machines popped up in major cities.

Besides investment interest in precious metals, Chinese jewelry demand has provided good support to the platinum market as lower prices appear to have attracted strong demand, said McGlone.

A good proxy for Chinese platinum jewelry demand is the volume of platinum futures traded on the Shanghai Gold Exchange.  Average daily platinum volume on the exchange in 2013 is running near 45% above 2012 levels, recently reaching a new record high this year.

Another indicator of Chinese platinum jewelry demand is China platinum imports.  The latest data on China platinum imports for September showed the highest level since March 2011 at 10.5 million kilograms (or approximately 338,300 ounces).

The world's total demand for platinum has been stagnant around 8 million ounces a year since 2005, with the exception of the recession year in 2009 when demand dipped to 6.8 million ounces.  In 2007, total jewelry demand accounted for about 26% of platinum demand worldwide compared to 51% for automotive catalysts. But now in 2013, total jewelry demand is on track to account for over 32% of total platinum demand compared to about 39% for auto catalysts.  And China will likely account for nearly 80% of all platinum jewelry demand before this year is out, compared to just 40% in 2000, according to ETF Securities.

China is now the largest single market in the world for platinum jewelry.  China's demand for platinum jewelry has increased as the platinum price has declined and as disposable incomes rise. Looking ahead, Chinese platinum jewelry sales are likely to continue to rise. Central to this will be China's ongoing economic progress and the accumulation of personal wealth, said McGlone.

"In our view, as China per capita incomes continue to grow, the demand for jewelry should also rise," McGlone wrote in a report published on Oct. 29. "Based on our expectation of continued supply constraints in South Africa and improving economic conditions in China and Europe, we remain bullish on platinum futures."

ETF Securities runs the thinly traded physical platinum exchange traded fund (PPLT). Over the last three months, it's traded close in line with State Street's SPDR Gold (GLD) ETF.  Both are underperforming the iShares Silver Trust (SLV) ETF, however.  Further out, all three of those metals have suffered in the last 12 months.  Platinum has suffered less.  PPLT is down 6.45%, while GLD is down 21.92% and SLV is down 29.62% over the last year.