Saturday, December 14, 2013

Union Divided on Whether to Vote on Boeing Offer

Best Growth Companies To Watch For 2014

Union divided on whether to vote on Boeing offerReed Saxon/AP SEATTLE -- Leaders in the International Association of Machinists publicly differed Friday on whether to bring Boeing's (BA) latest contract offer to a vote, exposing tensions within the union over how to handle the high-stakes negotiations. National union spokesman Frank Larkin said Friday that officials were exploring the idea after hundreds of members demanded an opportunity to vote on the contract to secure work on the 777X airplane. Larkin said members have always had the final say and that they have every right to vote on the terms of the offer. But local union officials said Friday they don't see any point in bringing it to a vote because it's too similar to a contract the union rejected a month ago. "So, until Boeing changes its conditions, we don't have an offer to vote on," said District 751 President Tom Wroblewski in a statement. A latest round of contract talks collapsed Thursday after local officials with the Machinists said they couldn't recommend Boeing's latest proposal to members. Local Machinists spokesman Bryan Corliss says Boeing has withdrawn the contract offer. Boeing spokesman Doug Alder, however, said the offer was rejected by the union, not withdrawn. He declined further comment Friday. Local union officials have seemed to disagree with their national leaders in recent weeks on how to handle Boeing's offers. That division was clear last month, when local union members voted to reject a contract negotiated by IAM leadership. Boeing and the Machinists have been exploring a deal that would secure the production of the new 777X airplane in the Puget Sound and the thousands of jobs that come with it. This week, Boeing made some changes to its original contract offer, backing away from a proposal that would slow the rate at which employees rise up the pay scale and adding an additional $5,000 in bonus pay. The biggest sticking point appears to be the company's insistence that workers move from a traditional defined-benefit pension to a defined-contribution savings plan. The local machinists said the company's latest proposal was too high of a price to pay to secure the 777X. "I think you'll agree these were very minor changes, and not nearly enough to offset the things Boeing was trying to take away from you, and for the Machinists who will join us in the future," Wroblewski wrote in a message to members Friday morning. Looming over the talks is the prospect that the company could build the airplane elsewhere. Boeing said it has received proposals from 22 states eager for the 777X jobs, with some proposing multiple sites. The company said 54 sites are now being evaluated. In its own bid to win the 777X jobs, Washington state recently approved tax breaks for Boeing valued at $9 billion over the coming years, along with legislation to improve aerospace training programs and the permitting process. Chicago-based Boeing began offering the 777X in May, but it's still finalizing plans for the plane and aiming to deliver the first aircraft by the end of the decade. Boeing has said it is expected to carry as many as 400 passengers and be more fuel efficient than the current 777. At the Dubai Airshow last month, Boeing received orders for 225 such planes from three airlines.

Friday, December 13, 2013

Surveying the Latest News from Small Cap Security and Surveillance Stocks (OSIS, VIMC, ALOG, LOCK & VSYM)

Small cap security and surveillance stocks OSI Systems, Inc (NASDAQ: OSIS), Vimicro International Corporation (NASDAQ: VIMC), Analogic Corporation (NASDAQ: ALOG), Lifelock Inc (NYSE: LOCK) and View Systems Inc (OTCBB: VSYM) have been producing a steady flow of news lately that investors might want to take a closer look at. After all, the whole security and surveillance industry is pretty vast as it would include everything from airport scanners to security cameras to software securing everyone's personal or online data. With that in mind, here is a look at the latest news from important small cap security and surveillance stocks:

OSI Systems Looses a Key TSA Contract Over Chinese Made Parts. On Thursday December 5th, small cap OSI Systems, a vertically integrated designer and manufacturer of specialized electronic systems and components, announced that its security division, Rapiscan Systems, was notified by the TSA that a delivery order placed with Rapiscan on September 26, 2013 for Advanced Technology X-Ray (AT-2) based systems was being terminated for default. OSI Systems has since de-booked this order valued at approximately $60 million. According to subsequent media reports, the baggage-screening equipment contained an unapproved part or parts manufactured in China and the TSA is seeking to ban Rapiscan Systems from future TSA contracts. One has to wonder just how that managed to happen – whether it was a screw-up at OSI Systems' end, the TSA's end or at both ends. Its also triggered a number of shareholder lawsuits because OSI Systems' security division, which includes the TSA work, generated 46% of the company's revenue in the last fiscal year. OSI Systems is down 20.9% since the start of the year but up 291.7% over the past five years.

Vimicro International Corporation Announces a Big Order. Earlier this week, small cap Vimicro International Corporation, a leading Chinese video processing IC and surveillance solution provider, announced that its subsidiary Shanxi Zhongtianxin Science and Technology Co., Ltd. had received an order for a SVAC (Surveillance Video and Audio Coding)-based technology solution worth nearly $41 million where Vimicro will receive approximately $16 million. Basically, the Baoding Public Security Bureau will install a city-wide SVAC-based surveillance network project in Baoding city in Hebei province. The network will monitor for security, surveillance and traffic monitoring and consist of several thousand video surveillance stations with deployment beginning in the fourth quarter of 2013. The deal is worth noting because Vimicro International Corporation has reported revenues of $14.865M (3 months ending 2013-09-30), $17.315M (3 months ending 2013-06-30) and $15.888M (3 months ending 2013-03-31) for the first three quarters of this year plus net income of $2.170M (3 months ending 2013-09-30), $2.731M (3 months ending 2013-06-30) and $2.206M (3 months ending 2013-03-31). Vimicro International Corporation is up 49.2% since the start of the year and down 5.2% over the past five years.

Analogic Corporation Presents at an Investment Conference and Reports Earnings. Mike Levitz, senior vice president and CFO of small cap Analogic Corporation, a healthcare and security technology solutions provider, presented at the Imperial Capital Security Investor Conference yesterday at 2:15 pm ET. Investors can listen to the webcast here on Analogic Corporation's investor relations website. In addition and last Monday, Analogic Corporation reported that first quarter revenue fell 8% to $110.1 million as strong double-digit growth in direct Ultrasound and Security was offset by timing in Medical Imaging and planned lower OEM Ultrasound probe sales. The company's GAAP net loss for the first quarter was $3.8 million, or ($0.30) per diluted share, verses net income of $4.4 million, or $0.35 per diluted share. Analogic Corporation is up 15% since the start of the year and up 175% over the past five years.

Lifelock Inc. Yesterday, small cap Lifelock Inc, a leading provider of identity theft protection services for consumers and identity risk and credit worthiness assessment services for enterprises, announced the acquisition of mobile wallet innovator Lemon for approximately $42.6 million in cash plus LifeLock has agreed to issue equity customary for a transaction of this size that will vest over the next three years. Apparently, the Lemon Wallet app which allows consumers to replicate and store a complete digital copy of their personal wallet contents in one location for records backup as well as mobile use of items including credit cards, identification, ATM, insurance and loyalty cards, has been downloaded more than 3.2 million times. Its should also be mentioned that CNBC's Jime Cramer recently described Lifelock Inc as having a broken IPO but not being a broken company as its now up 97.2% since the start of the year and up 119% since October 2012. 

View Systems Inc. A manufacturer and installer of weapons detection identification systems, video management platforms and tele-data communication networks, View Systems' security products are used by correctional facilities, schools, courthouses, government agencies, event and sports venues and commercial businesses. View Systems' most important security products Include: The ViewScan, a walkthrough concealed weapons detector (CWD) that uses advanced magnetics technology to visually locate threat objects like hidden razor blades and cellular phones, but not common objects such as coins, keys and belt buckles so that false alarms that slow down security checkpoints can be eliminated. The Visual First Responder, a first response remote video transmission system that can be utilized in areas where hazardous materials have been exposed plus its small enough to be worn on a belt, helmet or vest (or even by K-9 teams) while it transmits conventional video or infrared imagery to a command post. Its considered ideal for law enforcement SWAT teams, Fire Rescue units and HAZMAT team operations.

Last Summer, View Systems had issued a press release saying they are rapidly regaining traction in foreign markets for security systems and that the company has a partnership with Brazil based Armorin, LLC to penetrate the Brazilian market (along with the rest of South America) as imported electronic security equipment there was worth an estimated $1.5 billion as of 2011 while the value of locally manufactured equipment was estimated to be worth $1.5 billion. Moreover, over a dozen installations made in Bangladesh late last year have apparently been very well received by the government and local security organizations to the point where the company is looking for someone to distribute its products in the South Asia and Middle East regions. View Systems has also recently signed an agreement with a distributor in West Africa. Finally, View Systems has recently received new orders for its ViewScan from the State of Maryland, the Detroit School System Department of Corrections of Connecticut, Milwaukee and the Dodge City Kansas Community College.

Strategies: Entrepreneurs reveal gifts they rea…

We're getting down to the last minute for holiday shopping, and I know at least one entrepreneur or small-business owner must be on your gift list.

This year, instead of compiling my own list of gift ideas, I thought I would ask a number of entrepreneurs what's on their own wish lists.

COLUMN: Gifts suitable for entrepreneurs
GREAT GIFT IDEAS FROM YEARS PAST: 2009 | 2008 | 2007 | 2006 | 2005

Dave Burgess, chief technology officer of a San Francisco start-up called Social in SoMa (it's still in 'stealth' mode, so I can't tell you what it does), says tech entrepreneurs need a full collection of mobile devices — iPad, Android tablet, iPhone and Android phone — so they can test their new products. Since every business owner needs to think of mobile first, that certainly would help make sure the company's digital presence looks good on a variety of mobile devices.

Top 10 Warren Buffett Stocks To Watch For 2014

Not in your price range? OK, how about this?

Burgess recommends sending start-up entrepreneurs holiday gift baskets filled with food "to feed us while we work through the holidays."

And everyone, even geeks, likes to have a good time. So Burgess suggests seeing if you can wrangle your favorite small-business owner an invitation to a holiday party thrown by a big corporation.

"They're usually lots of fun with great bands, dancing, and free alcohol," Burgess says.

For Burgess, the best present he personally could get, given the shortage of talent in Silicon Valley? "Refer great software engineers to me."

Sometimes the best holiday gifts for a small-business owner involve getting a! way. But you don't have to spring for a beach vacation; other kinds of respite work.(Photo: Getty Images)

President and Founder John Barrow of Coolibar of Minneapolis, which makes UV sun-protection clothing, suggests giving the special entrepreneur in your life a vacation.

"Many entrepreneurs work really long hours and don't take much time off," he says. "So a vacation that's a complete break allows them to go away, have a great time, then return refreshed."

Barrow has less-expensive options for holiday gifts for small-business owners and entrepreneurs, too, such as a gym membership or at least a regular time to play a sport, such as tennis.

"Getting exercise is also very important for entrepreneurs." Or give tickets to a comedy club. "If you can take a break and laugh, then that's a great way to refresh and recharge."

And, once again, reflecting small-business owners' need to find great employees: "A professional membership to LinkedIn to use to help recruit people."

Anne Marie Bonneau, owner of the editing service 2020Revisions in Mountain View, Calif., wants a really, really good fountain pen. Why would such an old-fashioned tool be a good choice for an entrepreneur in the 21st century?

"There's no waste; I hate throwing away plastic pens," she says. "And it looks good if you're in meetings, pulling out a nice pen instead of a 29-cent plastic pen."

A weekly tennis date can help keep an entrepreneur in shape.(Photo: George Doyle, Getty Images)

Katie Dolan Dix, owner of Campannari Ice Cream in Mount Prospect, Ill., wants something far more precious but impossible to buy at any store: "Time. As a business owner, oftentimes we need more hours in a day or more days in the week. If you can s! end that,! I'll be set for the holidays."

An off-the-wall gift with a sense of humor can be a big hit with the right person.

"It's always a delight as an entrepreneur to receive a gift that re-frames what you do in a unique and unexpected way," says Kari Warberg Block, founder and chief executive of Earth-Kind in Bismarck, N.D. "One gift that I love to both give — and get — are handmade chocolate mice from Burdick. As the inventor of the first humane EPA-registered rodent-control product, handmade chocolate gourmet mice take it 'over the top' for me!"

Just remember to gauge your recipient's sense of humor.

Like many entrepreneurs, for Jen Hoey Padgett, chief executive of the Community Technology Alliance in San Jose, Calif., the best gift would be money for her start-up. Padgett's start-up, Beacon Pack, has a noble mission: to bring the Internet and online learning to undeveloped, remote areas by turning solar-powered backpacks into mobile hotspots.

As an entrepreneur myself, I know what Santa could bring that would thrill me: a Tesla Model S.

Since it's an electric car, I could use the money I save on gas for all the office supplies I need. It's innovative, the perfect image for an entrepreneur. And it's gorgeous!

If you plan to get me one — the cars start at $63,670 with a $7,500 federal tax credit — just let me know, and I'll happily send you my address.

Happy holidays!

OK, a Tesla Model S, which starts at $63,670, isn't exactly affordable for most gift givers, but think of the good you would do for the environment.(Photo: Dan MacMedan, USA TODAY)

Rhonda Abrams is president of The Planning Shop and publisher of books for entrepreneurs. Her most recent book is Entrepreneurship: A Real-Worl! d Approac! h. Register for Rhonda's free newsletter at Twitter: @RhondaAbrams. Facebook: Rhonda Abrams 2013.

Ask Matt: Are stock buybacks easy money or hype?

USA TODAY markets reporter Matt Krantz answers a different reader question every weekday. To submit a question, e-mail Matt at

Q: Are stock buybacks really easy money for investors?

A: Investors know the buyback drill. A company announces a plan to either buyback shares or boost an existing buyback plan, and the stock often goes higher.

Investors love buybacks because, in theory, the company is using its cash to reduce the number of shares outstanding. The fewer shares outstanding, the fewer slices earnings must be cut into. That means each investor should get a bigger part of the bottom line.

TRACK YOUR STOCKS: Get real-time quotes with our free Portfolio Tracker

That's the theory. But the reality is much different. Companies spent 39.5% more in the third quarter buying back their stock than they did in the same period of 2012. Interestingly, because of the stock market rally, companies paid nearly 20% more during the quarter to buy the shares than they would have a year ago.

Is this spending paying off for investors? Not really. Companies have been issuing new shares, in large part as payment to officers and employees, negating at least part of the benefit of the buybacks, says Howard Silverblatt of S&P Dow Jones Indices.

The number of shares outstanding actually rose about 1% in the third quarter, he says. Investors must be careful to not assume that just because a company is buying back its shares, that it will benefit them.

Thursday, December 12, 2013

Why the Xbox Means So Little to Microsoft

It is as if the Xbox One mattered to Microsoft Corp. (NASDAQ: MSFT) — at least financially. The world’s largest software company boasted it sold two million devices in 18 days. And in a negative note, the supply of Xbox One consoles has gotten low. So much for a huge surge in holiday sales. Whatever happens to the Xbox will have nothing to do with the success of Microsoft. The revenue it generates is so small compared to Microsoft’s big divisions that Xbox One sales are a rounding error.

In the quarter that ended on September 30, Microsoft had total revenue of $18.5 billion and operating income of $6.3 billion. Its Entertainment & Device segment, in which Xbox sales get counted, had revenue of $2.1 billion. Unfortunately, the segment posted a loss of $15 million. The segment also includes sales of other Microsoft hardware. Revenue from Skype, one of the company’s strangest acquisitions, is in there as well. Even if Xbox One is a huge success, the operating income contribution to Microsoft’s overall numbers will be modest, or less than that.

The theory behind why the Xbox One is important to Microsoft beyond revenue is a stretch. Xbox could be Microsoft’s portal into the American home. It could be used as an Internet-connected device that operates in the place of set-top boxes, PCs, Apple Inc.’s (NASDAQ: AAPL) Apple TV or the loads of other devices that sit atop American television sets.

The Xbox does have music and video services, as well as apps and a fitness program. The NFL has a programming deal with Xbox. And there are the games, which are at the heart of why most people buy consoles at all. However, none of these entertainment services is unique, and most have tremendous competition as Americans sort through whether they should have a half a dozen or a dozen devices or services to content with in whatever home entertainment centers they have.

Microsoft has had a dream that it might eventually matter in the hardware sector. That dream has been advanced by the launch of the Surface tablet and ongoing support of Windows-powered smartphones. None of these initiatives has worked very well. The Xbox is the most successful among them. At least Microsoft can boast enough Xbox unit sales to say the device is almost viable, financially.

Xbox One sales may give Microsoft some bragging rights. However, in the matter of Microsoft’s P&L, it means very little.

Wednesday, December 11, 2013

Amazon drops low-price strategy in grocery expa…

SAN FRANCISCO -- CEO Jeff Bezos built the world's largest Internet retailer by having the lowest prices.

That strategy is changing as the company expands into the vast grocery and consumer packaged goods market through its AmazonFresh business.

Now the priority is convenience rather than the lowest prices, an approach that could limit how much of this market Amazon can grab from grocery store operators like Safeway and Kroger and other rivals including Wal-Mart Stores, FreshDirect and the start-up Instacart.

AmazonFresh, which delivers groceries and related items the same day or the next day, started as a test in Amazon's home town of Seattle several years ago. The service expanded to Los Angeles earlier this year and launched in San Francisco Wednesday. If those cities perform well, the company may expand to many other urban areas and even outside the U.S. next year.

The thought of Amazon entering a new sector usually strikes fear into the hearts of incumbent companies as they worry profit margins will have to fall to compete with the Internet giant's lower prices.

But AmazonFresh prices are higher, or similar to most grocery stores, according to a recent analysis by RetailNet Group.

A basket of almost 30 grocery items from AmazonFresh in Los Angeles cost $94.80 and AmazonFresh in Seattle charged $99.58, according to a September survey by RetailNet.

Walmart To Go, an online grocery delivery rival, charged $80.38 for the same products and it cost $84.85 to have Instacart pick up and deliver those items from Trader Joe's, the survey found. Online, only Safeway's delivery service cost more than AmazonFresh in Seattle, at $101.83.

Top 10 Clean Energy Companies To Buy Right Now

A similar basket of groceries cost less than $90 at physical grocery stores in LA run by Walmart, Trader Joe's and Target, the survey also found.

AmazonFresh also cha! rges a $299 subscription for customers in LA and San Francisco. This makes grocery deliveries free for orders over $35 and it also gives shoppers access to the benefits of Amazon's Prime service, which including free two-day deliver on most of the other stuff the company sells through its main website.

"This seems like a huge hurdle for shoppers to jump just to order groceries online, and artificially limits their addressable market," said Dan O'Connor, CEO of RetailNet Group.

AmazonFresh prices suggest that Amazon is targeting the mid-to-premium shopper who usually buys at Costco, Whole Foods, Bristol Farms and other high-end grocery stores, he added.

Indeed, shares of Kroger and Safeway, among the largest grocery chains in the U.S., have risen 55% and 85% respectively so far this year, outperforming Amazon stock.

Handling fresh meat and other perishable food requires an expensive labor base and skill set that Amazon may not be willing to take on. Instead, the company works with suppliers, distributors and other third parties for this important part of the process. But this means the company has to share more of the revenue with these other players, giving it less room to lower prices.

"They are not doing extensive prepping and trimming of fresh foods. It's a lower touch operation," said Tom Furphy, who helped run AmazonFresh for about four years and is now CEO of venture capital firm Consumer Equity Partners. "That means the combination of quality and good prices becomes tougher."

"They will serve a less price conscious and time-starved customer," he added. "They want people to feel good about the prices, but it's about convenience rather than the lowest prices."

Amazon spokesman Scott Stanzel said AmazonFresh is dedicated to providing low prices, vast selection and convenience.

AMC IPO Offers Piece of the Action With Your Movie Ticket

10 Best China Stocks To Watch For 2014

AMC cinemas at the Block in Orange, California.Alamy Barely a year has passed since Chinese conglomerate Dalian Wanda Group completed its $2.6 billion purchase of U.S.-based movie theater chain AMC Entertainment. In one fell swoop, that deal made it the world's biggest cinema operator -- with 432 theaters. Now, 15 months later, Wanda is ready to turn around and IPO AMC on the U.S. stock market -- and great news! They want to let you in on the deal. From Stubs-Member to Stockholder AMC operates a customer loyalty program that it calls "Stubs." Participants in this program pay a $12 annual membership fee. In return, they get benefits such as: $10 in movie theater credit for every $100 they spend at the theaters free upgrades on concessions in the lobby and a waiver of fees for buying tickets online. The prospect of "making your money back" after seeing just two films a year probably makes the program worthwhile all on its own. But this week, AMC added another bonus to the fringe benefits of its Stubs program: Loyal customers now get a chance to buy shares of AMC's stock on the cheap. Technically, AMC says the stock program is for its "employees," but as CEO Gerry Lopez explained : "We're offering this exclusive employee benefit to our AMC Stubs members to express our sincere gratitude for your loyalty." The Details According to the pitch, anyone who's a member of Stubs will be allowed to buy as little as $100 to as much as $2,500 worth of AMC shares at the IPO price, commission-free, by using the free online broker Loyal3. AMC currently plans to price the shares between $18 and $20. This could prove to be a very valuable fringe benefit, as it will give Stubs members a rare opportunity to "get in" on an IPO at the offer price, and to profit from any immediate jump in AMC's share price in the first minutes and hours after the stock begins trading. But there are caveats. First and foremost, there's absolutely no guarantee that AMC shares will go up in price at all, much less skyrocket. Indeed, a 2011 study conducted by BusinessWeek revealed that after initially "popping" from their IPO price, 20 of the 25 hottest IPOs held in 2010 and 2011 "tanked." While it's certainly conceivable that an investor might buy shares at the IPO, time his or her exit just right, and sell before the stock price drops, knowing when to sell is always an exercise in guesswork. Not to put too fine a point on it: If a stock jumps right out of the gate, and never looks back -- see: Tesla (TSLA), Twitter (TWTR) -- but you decide to make a quick couple bucks by selling after the first "pop," you'll kicking yourself for years. On the other hand, The New York Times cites multiple studies showing the downside -- severe -- of holding on too long. One study showed that nearly half of all IPOs ultimately lose money, and the median IPO loses as much as 30 percent of its value over the three years post-IPO. Another study suggests that nearly a third of companies that IPO go bankrupt within 10 years. So ... Should You Buy the IPO or Not? Which kind of IPO AMC will turn out to be is anybody's guess. But there are at a few numbers floating around that suggest that AMC's business isn't doing very well. For example, so far this year, AMC Entertainment posted $2.03 billion in sales. Yes, that was up 4 percent from the $1.96 billion in revenues the company had collected by this time, last year. But meanwhile, rival theater operator Regal Entertainment Group (RGC) was growing more than twice as fast, its revenues up 9.4 percent. Regal's also a more profitable operation than AMC, boasting 12.7 percent operating profit margins on its superior revenues over the past year, versus the mere 7.7 percent margin that AMC pulled down. Now, it's entirely possible that with new management from China, and a fresh infusion of cash from Stubs members, and other IPO investors, AMC will be able to turn itself around an catch up to the competition. But if AMC continues the way it's been going, this "free" fringe benefit of getting a piece of the AMC IPO could turn into an expensive mistake for Stubs members.

Tuesday, December 10, 2013

AT&T Inc. (NYSE:T): T-Mobile-Style Plans Should Drive Margins

AT&T Inc.'s (NYSE:T) latest Mobile Share Value plans, which helps users reduce their monthly fees when paying for their own devices, should drive more smartphone leasing and margins.

AT&T introduced a no contract discount plan for unsubsidized devices bought on its Next device leasing plan for $25 a month plus device payment. The plan for subsidized devices bought on a two-year contract was standardized regardless of data bucket at $40 a month.

The plan first and foremost is intended to drive greater adoption of smartphone leasing plans as the industry slowly reduces the role of subsidies, which is positive for long-term industry margins.

[Related -Sprint Corporation (S): Sprinting To $10?]

BMO Capital Markets analyst Kevin Manning believes the biggest impact should be to T-Mobile, which has been winning low-end subscribers from AT&T. Meanwhile, Verizon Communications (NYSE:VZ) may not respond in the near term, but it could introduce similar discounted leasing plans in the future.

AT&T has now made their low-end plans more competitive versus T-Mobile's (NYSE:TMUS) "un-carrier" campaign that is enticing customers with no-contract plans, phone financing and lower-cost international roaming rates. T-Mobile added about 650,000 monthly customers in the third quarter, following the loss of more than 2 million subscribers last year.

[Related -Apple Inc. (NASDAQ:AAPL): What Does A Potential China Mobile Deal Means For Apple?]

For contract subscribers, AT&T's new smartphone plans have lower prices for low usage subscribers and higher prices for higher usage subscribers. Relative to existing plans, the new 300 MB plan is $10 less per device, and the 2 GB plan is $5 less. The 4GB plan is unchanged.

The 6GB plan is $5 less for 1 device, unchanged for two devices and $5 more for each additional one. The 10GB plan is $10 less for one device, unchanged for two devices and $10 more for each additional device. A new 8GB was also introduced. In addit! ion, feature phone costs drop from $30 to $20.

Relative to Verizon, changes are at the low end with AT&T's 300 MB bucket now $20 less than Verizon's 500 MB bucket, previously it was $10 less. Manning noted that the 1GB and 2GB buckets are now $5 less than Verizon's, which he don't think is material.

Under the latest AT&T plan, users who either own a device or pay for one in installments can start at $45 a month for 300 MB of data, along with unlimited text and talk. AT&T's current price for a similar plan is $70, whether or not the customer already has a phone. Most customers will save at least $15 a month under the new AT&T plans.

Customers can receive these monthly savings when they get a new smartphone for no down payment with AT&T Next; bring their own smartphone; purchase a smartphone at full retail price, or when their smartphone is no longer under contract, and they switch to the new plans.

All Mobile Share Value plan customers will benefit from shared data plus unlimited talk and text on their phones. Consumers will have the ability to connect up to 10 devices, including tablets and other wireless devices while business customers will be able to connect up to 10, 15, 20 or 25 devices, depending on the plan.

Qualifying smartphones can be added to any Mobile Share Value plan for $25 more a month per phone; tablets can be added for $10 more per device.

Customers with basic and messaging phones can enjoy a low monthly rate of $40 for unlimited talk, text and 300MB of data. For $20 more a month per phone, additional basic and messaging lines can be added to any Mobile Share Value plan. In addition to the 300MB option, AT&T Mobile Share Value plans offer data options ranging from 1GB up to 50 GB, all with unlimited talk and text.

The new plan will make monthly smartphone payments even lower than the existing AT&T Next option, by spreading payments over 26 months and giving eligible customers a way to get a new smartphone after 18 mo! nthly pay! ments for no down payment, no upgrade fee, no activation fee and no financing fee.

To a lesser extent, the plans are intended to drive greater adoption of share plans. Though earnings impact is tough to assess at this time, the lease plans are expected to increase equipment revenue and decrease ARPU/service revenue. Overall, the Next leasing plans are margin accretive.

Market Wrap-Up for Dec. 6 – Tune Out the Taper Talk

Here we go again: the financial media, various analysts, and all kinds of investors are once again obsessed with predicting when the Federal Reserve will begin to slow down its purchase of long-term Treasuries and mortgage-backed securities – a stimulus measure known as quantitative easing. Especially with strong economic data across the markets over the past two months (culminating with today’s seemingly strong November jobs report), many expect the Fed to scale back its monetary stimulus sooner rather than later. But for retail investors, attempting to speculate the future of the Fed’s stimulus in order to make some short-term gains will just lead to ultimately losing long-term investing decisions.

The supposed experts who make a living at trying to predict the Fed can’t even come to a consensus for when this taper will occur. Analysts at Goldman Sachs and Barclays are calling for the Fed to taper in March. Meanwhile, UBS and TD Securities expect the slowdown in stimulus to occur in January, and Deutsche Bank and other financial institutions say tapering will happen later this month. So, if these professional traders and investors aren’t on the same page, what makes retail investors think that they will be able to accurately trade around the Fed in an attempt to score some big, short-term gains? It’s a futile game that will end up being a drag on a portfolio over the long-term.

Predicting when the this tapering will occur seems like a staple of the financial media, which inevitably and unfortunately causes viewers and readers to worry about it as well. But as dividend investors should know, uncontrollable events like the Fed’s decisions and Washington’s dysfunction shouldn’t lead you to alter your investing strategy. If utilized well, a dividend investing strategy will be able to overcome any blips stemming from the Fed’s taper or other outside factors. As such, avoid trading around the markets in order to score big on pure stimulus speculation.

Today in the Markets

The Non-Farm Payrolls report for November was released this morning showing that the U.S. economy added 203,000 jobs, above estimates of 185,000. This increase in jobs also lowered the unemployment rate to 7.0%. Investors and traders took this news and ran with it, sending stocks rallying big on the day.

Among individual stocks that contributed to today’s rally were: Intel (INTC), Johnson & Johnson (JNJ), Rockwood Holdings (ROC

Monday, December 9, 2013

VIDEO: Will JCPenney Survive 2014?

Top 5 Canadian Stocks To Buy Right Now

I joined Varney & Co. on Fox Business this morning to discuss the future of JCPenney (JCP) and JCP stock.

the latest video at

JCPenney is having a rough go at it today, with JCP stock down more than 9% as of the time of this writing. The impetus for today’s thrashing appears to be the news that Hayman Capital’s Kyle Bass liquidated his large position in JCP stock, admitting in a Bloomberg interview that the purchase was a mistake.

The aggressive buying by Bass — and of several other highly followed investors, including George Soros, Whitney Tilson and Jeremy Grantham — was one of the greatest bullish arguments for the company. JCPenney CEO Mike Ullman also recently put a million dollars of his own money into JCP stock, very visibly showing the world that management — along with the hedge fund masters of the universe — had faith in the turnaround.

Bass’ departure throws a nice big bucket of cold water on this argument.

JCPenney is showing some modest signs of life. Same-store sales rose modestly in October, and they rose by a whopping 10% in November. But we’re also comparing these results to 2012, which was one of the worst years in the company’s history. Same-store sales remain well below their 2011 levels.

There also is the pesky question of margins. Yes, sales are up. But JC Penney is offering some of the most aggressive sales pricing in its history. Gross margins were already in free fall in the first three quarters of 2013–before the Black Friday sales.

Amazon (AMZN) can get away with posting thin margins because it is a growing business and it is a market leader in e-c0mmerce. It also has the faith of its suppliers and of Wall Street behind it. JCPenney has neither of these things, and it has a growing pile of debt.

Between cash and short-term borrowing, Penney has about $2 billion in liquidity at the moment. But unless margins improve, the company will burn through that cash in less than a year. This means Penney will be at the mercy of its lenders to extend additional credit…or face the prospect of bankruptcy.

I made similar arguments in a recent CNBC appearance, commenting that Penney was on an “express train to oblivion.”

The other bullish argument for Penney is simply that it is cheap. And looking at the numbers, you can make a case there. Walmart (WMT), Target (TGT) and Kohl’s (KSS) all trade at price/sales ratios of around 0.5 to 0.6. JCP stock trades for less than half that, at around 0.25 times sales.

Of course, Walmart, Target and Kohl’s are all relatively healthy. JCP is only cheap if you believe the company will survive. And frankly, that is a highly speculative bet.

Charles Lewis Sizemore, CFA, is the chief investment officer of the investment firm Sizemore Capital Management. As of this writing, he did not hold a position in any of the aforementioned securities. Check out his new premium service, Macro Trend Investor, which includes a free copy of his e-book, The New Megatrend Investor: The Ultimate Buy-and-Hold Strategy That Will Make You Rich.

Sunday, December 8, 2013

Citrus, yeast prominent in Cuvee Speciale

Beer Man is a weekly profile of beers from across the country and around the world.

This week: Cuvee des Trolls Cuvee Speciale

Brasserie Dubuisson, Pipaix, Belgium

This week's beer is an offshoot of the regular Cuvee des Trolls, which is more in the Belgian blonde or pale ale category, though a bit stronger for the styles at 7% ABV. It is also a filtered beer.

The Cuvee Speciale is a half-percent ABV stronger and not filtered, allowing for refermentation in the bottle. Expect a hint of yeast to show up in the aroma and some haziness to the body. The brewery describes the Speciale as a Belgian trippel.

The pour produces a head that quickly forms a billowy cloud, but with a density that gives it some staying power. The aroma is of pale malts, some citrus notes and the aforementioned yeast, which is more like what you notice when bread dough is rising.

The flavor is again of pale grain, lemon more than orange, candi sugar and a slight Belgian yeast funkiness in the aftertaste. Nothing rough like tobacco or leather, but enough to give it that native Belgian character. The hops are minimal and grassy.

The carbonation is fizzy, not quite champagne-like, but more than is typical for a Belgian trippel. The sugars also are a bit more than usual, but go well with the carbonation, stopping short of putting the ale in soda territory. This is a good beer to accompany fruit before dinner or fruit desserts afterward.

Top 10 Penny Companies To Buy Right Now

The Dubuisson brewery started on a farm estate and produced beer for the workers and villagers. The family decided to devote itself purely to brewing in 1931 and two years later introduced Bush beer, which is still being made. It later started the Scaldis and Cuvee des Trolls brands. Exports now account for more than 25% of its production.

Dubuisson beers are imported by Vanberg & Dewul! f of Cooperstown, N.Y., and distributed in most states. While V&D does not have a specific beer finder link, it does have Web addresses for all of its distributors, which is located here.

Check out the Scaldis offerings at the same time — it is an excellent brand and bottles of Scaldis de Noel should be on the shelves by now.

Many beers are available only regionally. Check the brewer's website, which often contains information on product availability. Contact Todd Haefer at To read previous Beer Man columns Click here.

Dow Falls For Second Straight Day On Taper Worries

Blue chip stocks edged lower for the second consecutive session amid mixed results from the Black Friday holiday shopping weekend and investors looked ahead cautiously at Friday's jobs report.

The Dow Jones Industrial Average fell 77.6 points, or 0.5%, to end at 16,008.7. On Friday, the Dow fell 11 points, snapping a five-session streak of record-high closes.

The S&P 500 index lost nearly five points, or 0.27% to close at 1,800.9. The Nasdaq Composite Index discarded 14.6 points, or 0.36%, to close at 4,045.26.

Stocks suffered despite a series of reports showing a pickup in manufacturing. In fact, the Institute for Supply Management surprised the market when it said manufacturing activity gained momentum in November. Economists had expected a decline.

On the surface, that's the kind of news that bolsters investor confidence. Instead, it stoked worries that the Federal Reserve will soon begin scaling back its $85 billion-a-month bond-buying program credited with driving the 2013 stock market rally.

Stock investors are looking ahead to Friday for the Labor Department's report on jobs for hints as to whether the stimulus policy is working and when the Fed will taper its bond purchases. Investors have sold on days when they feared a Fed pullback was imminent.

Stocks were also knocked by a series of mixed reports on the Black Friday shopping weekend. Also, the Dow was pulled lower by 3M (MMM), which declined 4.3% to close at $127.68 after the stock was downgraded to “underweight” at Morgan Stanley (see Barron's Take, "3M Stock Vulnerable After Rally, Downgrade," Dec. 2).

In government bond trading, the yield on the 10-year Treasury note rose to 2.8% from 2.746% late Friday. Treasury prices fell, suggesting that bond investors are growing more worried that a withdrawal of Fed stimulus will reduce demand for U.S. debt.

December gold futures shed 2.5% to $1,218.70 an ounce. January crude-oil futures climbed 1.2% to $93.89 a barrel.

In currency markets, the dollar gained against the euro and the yen.

In other corporate news:

Forest Laboratories (FRX) surged 9.7% to close at $56.32, marking the biggest gain in the S&P 500. The drug maker unveiled plans to trim $500 million in costs, and spend at least $400 million buying back its stock.

Dow Chemical (DOW) rose 2.3% to close at almost $40. The company plans to either sell or spin off about its $5 billion commodity chemical business, which includes 40 manufacturing plants.