Saturday, January 25, 2014

Top 5 Penny Stocks To Own Right Now

The price-to-earnings ratio might be the most polarizing statistic in investing. Some investors call it a basic core tenet for judging stocks; others see it as a misguided and useless tool. Strong earnings or a big run-up in share price can skew the P/E ratio toward more expensive stocks, but how does this classic statistic measure up when viewing Big Pharma's priciest picks?

Using data compiled from stock screening site Finviz, let's check out the three most expensive stocks among major pharmaceutical developers. In the following video, Fool contributor Dan Carroll tells you what you need to know about these stocks -- and whether their outlooks are worth the pretty penny you'll pony up to buy them.

One of the best parts of owning big pharma stocks is their attractive dividends, but smart investors know the importance of diversifying -- seeking high-yielding stocks from multiple industries. The Motley Fool's special free report "Secure Your Future With 9 Rock-Solid Dividend Stocks" outlines the Fool's favorite dependable dividend-paying stocks across all sectors. Grab your free copy by�clicking here.

Top 5 Penny Stocks To Own Right Now: Helios Strategic Income Fd Inc (HSA)

Helios Strategic Income Fund, Inc. is a closed ended fixed income mutual fund launched and managed by Brookfield Investment Management Inc. It operates as a diversified and closed-end management investment company. The fund primarily invests in debt securities and equity securities. Its portfolio of investments includes investments in corporate bonds, home equity loans, commercial loans, franchise loans, equipment leases, manufactured housing, common stock, collateralized debt obligations, certificate-backed obligations, collateralized mortgage obligations, and government agency securities. It was formerly known as RMK Strategic Income Fund, Inc. Helios Strategic Income Fund, Inc. was founded in 2004 and is based in Memphis, Tennessee.

Top 5 Penny Stocks To Own Right Now: Natural Alternatives International Inc.(NAII)

Natural Alternatives International, Inc. provides private label contract manufacturing services to companies that market and distribute vitamins, minerals, herbs, and other nutritional supplements, as well as other health care products, to consumers in the United States and internationally. It offers strategic partnering services, including customized product formulation, clinical studies, manufacturing, marketing support, international regulatory and label law compliance, international product registration, packaging in multiple formats, and labeling design. The company also develops, manufactures, and markets its own branded products under the Pathway to Healing product line through print media and the Internet distribution channels. It manufactures products in various forms, including capsules, tablets, chewable wafers, and powders. The company was founded in 1980 and is headquartered in San Marcos, California.

5 Best Performing Stocks To Invest In Right Now: Universal Corporation(UVV)

Universal Corporation, together with its subsidiaries, operates as a leaf tobacco merchant and processor worldwide. It engages in selecting, procuring, buying, processing, packing, storing, supplying, shipping, and financing leaf tobacco for sale to, or for the account of, manufacturers of consumer tobacco products. The company processes and/or sells flue-cured and burley tobaccos, dark air-cured tobaccos, and oriental tobaccos; and provides value-added services, including blending, chemical and physical testing of tobacco, just-in-time inventory management, and manufacturing reconstituted sheet tobacco. Its flue-cured, burley, and oriental tobaccos are used principally in the manufacture of cigarettes; and dark air-cured tobaccos are used in the manufacture of cigars, pipe tobacco, and smokeless tobacco products. The company was founded in 1888 and is headquartered in Richmond, Virginia.

Advisors' Opinion:
  • [By Marc Bastow]

    Leaf tobacco supplier Universal Corporation (UVV) raised its quarterly dividend 2% to 51 cents per share, payable on Feb. 10 to shareholders of record as of Jan. 13.
    UVV Dividend Yield: 4.06%

Top 5 Penny Stocks To Own Right Now: TranSwitch Corporation(TXCC)

Transwitch Corporation designs, develops, and supplies semiconductor and intellectual property solutions for voice, data, and video communications equipment. The company provides integrated multi-core network processor system-on-a-chip (SoC) and software solutions for fixed, 3G and 4G mobile, VoIP, and multimedia infrastructures. It offers converged network infrastructure products, including infrastructure VoIP processors comprising Entropia series of processors for wire-line and wireless carrier equipment; EoS/EoPDH mappers and framers for formats and data speeds in the access portion of the network; tributary switches that enable traffic to be switched or re-arranged; and carrier Ethernet solutions consisting of Ethernet controllers and switches, as well as circuit emulation and clock recovery devices. The company also provides FTTx protocol processors, such as mustang, a system-on-chip solution for EPON optical network unit equipment; COLT processor, a system-on-chip so lution for the optical line terminator equipment; and Diplomat-ONT product, an integrated SoC solution for GPON ONU applications, as well as access VoIP processors and access controllers. In addition, it offers broadband customer premises equipment, including multi-service communications processors comprising Atlanta processor, a multi-service SoC for customer premises equipment that supports toll-quality telephone voice, fax, and routing functionality; and HDMI, displayport, HDP, and Ethernet IP cores for consumer electronics, home network equipment, and industrial and automotive applications. The company serves public network systems OEMs, WAN and LAN equipment OEMs, Internet-oriented OEMs, and communications test and performance measurement equipment OEMs, as well as government, university, and private laboratories. It sells its products through direct sales force, independent distributors, and sales representatives. The company was founded in 1988 and is headquartered in Shelton, Connecticut.

Top 5 Penny Stocks To Own Right Now: China Recycling Energy Corporation(CREG)

China Recycling Energy Corporation provides energy saving and recycling products and services in the People's Republic of China. The company engages in the design, sale, installation, lease, and operation of top gas recovery turbine systems (TRT) and other renewable energy products. It also builds cement low temperature heat power generator (CHPG) and waste gas power generator (WGPG) systems. The company, through a joint venture, Inner Mongolia Erdos TCH Energy Saving Development Co., Ltd, with Erdos Metallurgy Co., Ltd., recycles waste heat from Erdos Metallurgy Co.?s metal refining plants to generate power and steam. China Recycling Energy Corporation offers its products and services to enterprises in the iron and steel, cement, coking, and metallurgy industries. The company was formerly known as China Digital Wireless, Inc. and changed its name to China Recycling Energy Corporation in March 2007. The company was founded in 2004 and is based in Xi An City, the People?s R epublic of China.

Advisors' Opinion:
  • [By Roberto Pedone]

    Another stock that's starting to move within range of triggering a near-term breakout trade is China Recycling Energy (CREG), which engages in the recycling energy business, providing energy savings and recycling products and services. This stock is off to a strong start in 2013, with shares up a whopping 166%.

    If you take a look at the chart for China Recycling Energy, you'll notice that this stock recently formed a double bottom chart pattern at $1.67 to $1.66 a share. Following that bottom, shares of CREG have started to uptrend strong and move back above its 50-day moving average. That uptrend has now pushed shares of CREG within range of triggering a near-term breakout trade.

    Market players should now look for long-biased trades in CREG if it manages to break out above some near-term overhead resistance levels at $2.80 to $2.85 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average action of 95,671 shares. If that breakout triggers soon, then CREG will set up to re-test or possibly take out its next major overhead resistance levels at $3.50 to $4 a share.

    Traders can look to buy CREG off any weakness to anticipate that breakout and simply use a stop that sits right below its 50-day moving average of $2.32 a share, or near more support at $2 a share. One can also buy CREG off strength once it clears those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

Top 5 Penny Stocks To Own Right Now: Horizon Lines Inc.(HRZ)

Horizon Lines, Inc., through its subsidiaries, provides container shipping and integrated logistics services. It ships a range of consumer and industrial items, such as refrigerated and non-refrigerated foodstuffs, household goods, auto parts, building materials, and other materials used in manufacturing. The company offers container shipping services to ports within the continental United States, Puerto Rico, Alaska, Hawaii, Guam, the U.S. Virgin Islands, and Micronesia. Its integrated logistics services comprise rail, truck brokerage, warehousing, distribution, expedited logistics, and non-vessel operating common carrier operations. Horizon Lines, Inc. also offers terminal services. The company operates terminals in Alaska, Hawaii, and Puerto Rico; contracts for terminal services in seven ports in the continental United States; and the ports in Guam, Yantian, and Xiamen, China, as well as Kaohsiung, Taiwan. In addition, it offers inland transportation services. As of Dec ember 20, 2009, the company owned or leased approximately 20 vessels and 18,500 cargo containers. Horizon Lines, Inc. serves consumer and industrial products companies, as well as various agencies of the U.S. government, including the Department of Defense and the U.S. Postal Service. The company was founded in 1956 and is based in Charlotte, North Carolina.

Top 5 Penny Stocks To Own Right Now: SPAR Group Inc.(SGRP)

SPAR Group, Inc., together with its subsidiaries, provides merchandising and other marketing services to manufacturers, distributors, and retailers worldwide. The company primarily offers syndicated services, such as regularly scheduled, routed merchandising, and marketing services provided at the retail store level; and dedicated services, including store set-ups, store remodels, and fixture installations. It also provides project services comprising in-store services, such as new store openings, new product launches, special seasonal or promotional merchandising, focused product support, product recalls, in-store product demonstrations, and in-store product sampling, as well as kiosk product replenishment, inventory control, new store sets and existing store resets, re-merchandising, and remodels and category implementations under annual or stand-alone project contracts or agreements. In addition, the company offers in-home and in-office assembly services; and in-store e vent staffing services consisting of in-store product samplings and in-store product demonstrations. Further, SPAR Group provides various other marketing services comprising test market research, including testing promotion alternatives, new products and advertising campaigns, as well as packaging, pricing, and location changes at the store level; mystery shopping services, such as calling anonymously on retail outlets to check on distribution or display of a brand and to evaluate products, service of personnel, and conditions of store; data collection services consisting of gathering sales and other information for analysis and interpretation; and radio frequency identification services. The company?s customers include manufacturers, mass merchandisers, electronics store chains, drug store chains, convenience and grocery stores, and other retail outlets, such as discount stores, and home and office supply centers. SPAR Group, Inc. was founded in 1967 and is headquartered i n Tarrytown, New York.

Top 5 Penny Stocks To Own Right Now: Ever-Glory International Group Inc.(EVK)

Ever-Glory International Group, Inc., together with its subsidiaries, engages in the manufacture, distribution, and sale of apparel for women, men, and children. Its products include coats, jackets, slacks, skirts, shirts, trousers, vests, skiwear, down jackets, knitwear, and jeans. The company offers its products to the casual wear, sportswear, and outerwear brands, as well as retailers, such as department stores, flagship stores, stores-within-a-store, and specialty stores primarily in Europe, the United States, Japan, and the People?s Republic of China. As of December 31, 2010, it operated 293 retail stores in the People?s Republic of China. The company is based in West Covina, California.

Advisors' Opinion:
  • [By John Udovich]

    Small cap apparel stock G-III Apparel Group, Ltd (NASDAQ: GIII) has been making bullish moves lately plus the stock is up 97.1% since the start of the year, making it the third best performing apparel stock (according to stock screener Finviz)�after small cap�Ever-Glory International Group Inc (NYSEMKT: EVK) and mid cap Fifth & Pacific Companies Inc (NYSE: FNP) followed by mid cap Hanesbrands Inc (NYSE: HBI). But is the G-III Apparel Group dressed for long term success for investors?

Top 5 Penny Stocks To Own Right Now: EarthLink Inc.(ELNK)

EarthLink, Inc. provides communications services to individual and business customers in the United States. It operates in two segments, Consumer Services and Business Services. The Consumer Services segment offers Internet access and related value-added services. It provides dial-up Internet and narrowband access, broadband access, and voice-over-Internet-protocol services, as well as value-added services that include products for protection, communication, and performance, such as security products, premium email only, home networking, email storage, and Internet call waiting. This segment offer its products and services primarily through its call centers, search engine marketing, affinity marketing partners, resellers, and marketing alliances. The Business Services segment offers integrated communications services, such as secure IP-based networks, virtual private networks, Internet access, local telephone and long distance services, enhanced services, access trunks, pr ivate line services, asynchronous transfer mode/frame relay services, and mobile data and voice services, as well as installation, managed network, remote access, and disaster recovery services. It also provides wholesale services comprising broadband transport services, including private line, Ethernet private line, and wavelength services; local communications and local dial tone communications services; live and automated operator, and directory assistance services; and dedicated Internet access services and direct connectivity. In addition, this segment leases server space and provides Web hosting services that enable customers to build and maintain an online presence, including domain names, storage, mailboxes, software tools to build Web sites, e-commerce applications, and 24/7 customer support. This segment offers its services through direct sales, and independent dealers and sales agents. The company was founded in 1994 and is headquartered in Atlanta, Georgia.

Advisors' Opinion:
  • [By Rich Duprey]

    Continuing its efforts to transform itself from a pure Internet service provider into an information technology company, EarthLink (NASDAQ: ELNK  ) announced Monday it is buying�cloud computing and hosted IT services provider CenterBeam for $22 million.�

  • [By Geoff Gannon] nflation growth: Dun & Bradstreet (DNB)

    路 Inflation plus population growth: CEC Entertainment (CEC)

    路 Nominal GDP Growth: Village Supermarket (VLGEA)

    Over the last 10 years ��population growth, inflation, and real output per person growth has been so low it�� hard to tell the difference between companies growing at the rate of inflation, along with the population, or along with the economy.

    You have to squint really hard to see any difference in the revenue growth records of DNB, Chuck E. Cheese, and Village.

    This will not be true in all countries and at all times.

    A literally no growth company like Earthlink is actually shrinking. It just happens to look like it�� staying perfectly flat because inflation is hiding the company�� real decay rate. In real terms, the company has been shrinking by about 3% a year for the last 10 years. So, Earthlink is not a no growth company. It�� shrinking.

    That�� a bad sign. And, frankly, I don�� know how to value Earthlink. You would need to evaluate it as a turnaround or something ��not as a business that�� simplly stuck in place. I don�� know how to do that.

    So, Earhtlink goes into the ��oo hard��pile.

    Dun & Bradstreet and CEC Entertainment are actual no growth businesses. This is hidden by their constant share buy backs. So, if you look at their earnings per share growth they look kind of like Peter Lynch�� idea of a ��low growth��company or even a ��talwart�� They aren��. They��e no growth businesses.

    The same is pretty much true with Village Supermarket. Although this is complicated. The nature of their business ��high volume, low cost groceries ��means they can appear to be a no growth business when they are actually just keeping prices down and increasing volume. You would need to check their sales numbers more carefully. Grocery stores often discuss inflation in their annual reports. Village Supermarket always does t

Bank of America trading practices examined

Federal prosecutors and regulators have investigated whether Bank of America improperly executed its own futures trades ahead of large orders executed for its clients, a financial regulatory filing shows.

The June 14 filing on the securities industry regulator FINRA website, first reported by Reuters on Saturday, does not accuse the North Carolina-based bank of any wrongdoing.

But the filing states that the U.S. Attorney's office in North Carolina "is investigating whether it was proper for the swaps desk to execute futures trades prior to the desk's execution of block future trades on behalf of counterparties. ..."

The filing also states that the Commodity Futures Trading Commission "is conducting a parallel investigation into the trading issue."

The investigations involved formal probes by prosecutors or regulatory agencies that are considered more serious than preliminary inquiries, according to the filing, provided to FINRA by the bank.

Bank of America decline to comment on the filing, which was included in a FINRA background report on Eric Alan Beckwith, who previously worked at the bank's Merrill Lynch broker-dealer division in New York.

Beckwith could not be reached for comment.

Reuters reported that the regulatory filing appears to provide context for a Jan. 8 FBI warning that said Wall Street traders may be front-running government-owned mortgage giants Fannie Mae and Freddie Mac in the interest-rate swaps market.

Front-running refers to a technique in which a trader with knowledge of a large pending trade order by a client or other market participant executes her or his own trade first. Such tactics often generate profits generated by market movements after the larger trade is executed.

The investigation cited in the FINRA filing appears to be part of a broader international crackdown on suspected trading abuses. Prosecutors and regulators in the United States and abroad are probing suspected manipulation of foreign exchange rates, suspected! metal price trading abuses and rigging of other financial benchmarks.

The ongoing probes have produced roughly $3.1 billion in penalties paid by banks that acknowledged traders had manipulated the the London interbank offered rate. Libor is used to set the rates on trillions of dollars of mortgages, car loans, student loans and some complex financial derivatives.

Take a Look at This Rising Sector for Your Portfolio

Providers of flow technology equipment and systems are largely on track for improved performances this year and in 2014. It is a good bet that their stock prices are likely to follow.

These companies manufacture processing products used by industries such as food and beverages, oil & gas, and wastewater treatment, among others. They serve a wide range of end markets that are mostly poised for increased earnings and are likely to spend on capital projects. While these positive trends persist, flow technology companies' prospects ought to remain favorable. Let's highlight several sector participants, starting with a top selection, SPX (NYSE: SPW),.

Poised for rapid EPS growth
SPX operates a flow technology segment that provided 53% of 2012 sales, according to the company's annual report. The unit supplies the food/beverage, oil &gas, power generation, and industrial flow markets. The company is experiencing rising demand overseas from the energy and food industries.

Moreover, SPX serves the power-generation market. Through its thermal segment, it is a major producer of power transformers. This power transformer business is high margined, and is an important component to review when analyzing the company's overall earnings trend.

In fact, SPX is benefiting from last year's expansion of a power transformer facility. Additionally, it appears the company's margins are gaining ground thanks to restructuring and other cost cutting initiatives.

Resulting margin expansion is helping SPX to outperform expectations, and the earnings per share outlook is solid. The only challenge, seemingly, is declining sales from its ClydeUnion original equipment pump business.

Some of the most attractive features of SPX as a long-term investment are:

It is focused on new-product development, a factor that should allow it to maintain or grow its market share. SPX is targeting expanded scale globally by way of organic projects and acquisitions. This is particularly within its flow technology business.

Based on these factors, SPX stock is a good selection for portfolios with a long-term outlook.

Increasing sales and margins
A second, even larger, flow technology company to consider is Flowserve (NYSE: FLS  ) . The company's flow control systems are utilized by a wide range of industries, led by oil & gas, chemicals, and power generation.

EPS improved to $1.51 during the first six months of 2013, up from $1.22 last year. This positive trend is likely to persist, behind spending across the globe on gas and chemical projects.

The favorable outlook is reflected in Flowserve's bookings, currently on the rise, particularly in its flow control division, where they were recently up about 10% according to the company's latest 10-Q. Furthermore, Flowserve is achieving gross margin improvements on a better mix of products and cost containment measures.

5 Best Performing Stocks To Invest In Right Now

Flowserve, like many industrial companies, is dependent upon the timing of projects. That said, late 2013 should bring an increased number of projects. Plus, the company is taking initiatives to expand its presence in overseas regions, such as Asia, where opportunities are available given economic growth in the region.

In sum, Flowserve is likely to be a beneficiary of upturns in its key end markets. The company's EPS outlook is very favorable approaching late 2013 and 2014.

Thus, this may be a good opportunity to add Flowserve to a long-term focused portfolio.

Lastly, a growth company 
The third example of a thriving flow technologies company is IDEX  (NYSE: IEX  ) . This one is situated in a unique set of end markets, namely fluid & metering, health & science, and fire & safety/diversified.

Of these three segments, the first two are performing rather well in terms of sales and margins, allowing the company to post better results as a whole. Second-quarter EPS improved to $0.76, from $0.67 the prior year.

Catalysts playing a role in IDEX's earnings include:

Its fluid & metering segment is benefiting from a rebound in the liquefied petroleum gas market and rising global truck manufacturing. Also within the fluid division, there are food-processing market opportunities in overseas markets. The health & science unit is seeing gains from sales of scientific products, strength in orders, and acquisitions.

One aspect that makes this a growth company is its spending on acquisitions that are designed to build upon existing businesses, as well as boost its foothold in higher-growth end markets and geographies. This, along with product development, ought to allow it to thrive while market conditions are conducive to growth.

Accordingly, growth-focused investors may want to consider IDEX for their portfolios. The shares, recently at an all-time high, have positive momentum.

The best stock among these three, as stated, appears to be SPX. That company is involved in numerous expanding end markets and is initiating a sound long-term expansion strategy. 

9 other solid investments

Dividend stocks can make you rich. It's as simple as that. While they don't garner the notoriety of high-flying growth stocks, they're also less likely to crash and burn. And over the long term, the compounding effect of the quarterly payouts, as well as their growth, adds up faster than most investors imagine. With this in mind, our analysts sat down to identify the absolute best of the best when it comes to rock-solid dividend stocks, drawing up a list in this free report of nine that fit the bill. To discover the identities of these companies before the rest of the market catches on, you can download this valuable free report by simply clicking here now.

Friday, January 24, 2014

Obamacare Did Create Jobs - But Guess Who Got Them

One of the real Obamacare facts we've shared with you is how the Affordable Care Act will influence private employers to cut hours and jobs across the nation.

There is one group of workers, however, that is still raking in new job opportunities at a stunning rate, thanks to Obamacare.

I'm talking about lobbyists.

Since Congress passed Obamacare, lobbyists have been in high demand by Fortune 500 companies.

Companies like Delta Airlines, UPS, BP America, and Coca-Cola hire lobbyists to help navigate the bill. These lobbyists will remain in high demand until at least 2020 - when some portions of the law will finally be implemented - to help change requirements and seek exemptions.

This grand lobbying push isn't new in Washington, D.C. We've seen a similar lobbyist rollout with previous legislation like the Dodd-Frank Act.

But the Obamacare lobbying highlights a growing trend in Washington. It highlights another "revolving door" that exists: the one between the halls of Congress and the boardrooms of corporations looking to game the system...

Obamacare Facts: Healthcare Is Lobbying on Steroids

According to OpenSecrets, hundreds of former congressional representatives and senators are currently lobbyists or senior advisors to companies, helping to influence the very government on which they once served.

It wasn't always this way.

Editor's Note: Are you mad that the politicians and lobbyists who deliberately foisted Obamacare on the country are going to get rich from it? We've got good news for you... You see, by making just a few simple moves now, some of the "ordinary folks" can see their portfolios climb by 10... 20... even 30% when Obamacare kicks in on Jan. 1, 2014. Click here to watch our free video on how to profit from Obamacare.

In 1974, only 3% of retired or defeated congressmen became lobbyists.

Then in 2009 U.S. President Barack Obama said his administration would reduce the influence of lobbyists in Washington.

A funny thing happened...

His policies' lack of bite fueled an increase in what has long been a favorite pastime for Washington elite, particularly members of Congress.

Now, according to author Mark Leibovich, about 50% of former senators are lobbyists, in addition to 42% of former congressmen.

That means the people scoring cozy, high-paying spots at some of the premier K Street firms are congressional staffers, legislators, and regulators - all who helped craft legislation like Obamacare.

Former Rep. Earl Pomeroy, D-ND, for example, was a critical voice on healthcare and tax issues as a member of the House Ways and Means Committee. Pomeroy and his former Chief of Staff Bob Siggins joined lobbyist shop Alston & Bird in 2011, after his district-race defeat to Rep. Rick Berg, R-ND.

And it's not just acting members of Congress who voted to serve their constituents - it's also staff members who worked for these lawmakers...

Avenue Solutions, a K Street firm, hired Yvette Fontenot, who worked on the staff of the Senate Finance Committee and U.S. Department of Health and Human Services' Office of Health Reform. The Finance Committee wrote key tax provisions of the law, whereas the Office of Health Reform will be responsible for the law's implementation. Fontenot now lobbies on behalf of the Blue Cross Blue Shield Association and the National Electrical Manufacturers Association, according to reports.

There are many more stories of former lawmakers and public servants who turned influence into a six- and even seven-figure salary. The average pay raise is 1,452% for such opportunities, according to Republic Report. That's how Obamacare has created a windfall for some.

These facts about Obamacare lobbying point to an accelerating trend in American business, one that has distorted the free market and invited greater amounts of regulation into the lives of every American...

Obamacare and the Rise of the Fifth Rail

Lobbying spending in 2012 by U.S. corporations was near record levels at $3.31 billion and is expected to be even higher in 2013.

I like to call this the "Rise of the Fifth Rail" in competition among rivals.

You see, in more traditional free markets, companies and competitors go head to head on the "four P's": price, product quality, promotion, and place (market access).

But over the last decade, we've seen companies competing on a fifth "P": public policy.

Companies are using Washington insiders as a competitive tool, by paying lobbyists to influence and circumvent laws. This has distorted the markets and driven fair competition into the ground. It has also hollowed out the American free market from the inside.

Using public influence over private sectors is the hallmark of corporatism and fascism. And over time, if unchecked, this system will stifle innovation, hinder competitors who can't afford K Street's services, and drive a greater divide between the rich and the poor. The poor will never have the means to influence change.

This is how the facts about Obamacare show us how much structural decay there is in markets and competition.

Bottom line: Corporate influence is alive and well, and the playing field isn't being leveled in favor of ordinary Americans.

This is just another of the disappointing facts about Obamacare. Go here for the full list.

Hambrecht & Quist Life Sciences

My top idea for conservative, income-oriented investors in the coming year is a closed-end fund that invests in public and privately-held companies doing work in the life sciences arena, writes Nate Pile of Nate's Notes.

The life sciences industry includes stocks in biotechnology, pharmaceuticals, diagnostics, managed healthcare and medical equipment, and healthcare information technology and services.

This recommended fund—Hambrecht & Quist Life Sciences Fund (HQL)—was also our top pick last year, and the fund rose 44% in 2013.

In addition to rising in value, the fund has a dividend policy of paying out 2% of its net asset value of each quarter.

By choosing to take this payout in the form of a dividend reinvestment, rather than cash, investors have done very well for themselves as they've watched, both the size of their holdings, and the share price itself, increase as the years have rolled by.

Hot Value Stocks To Buy For 2015

To be sure, you will always be able to get more bang for your buck by owning individual biotech stocks.

However, for investors who want to be in biotech without taking on as much risk, we believe this closed-end fund represents a great way to participate in the growth of the sector, while still being able to sleep at night (plus, it is always nice to "get paid to wait!").

Subscribe to Nate's Notes here...

For More 2014 Top Stock Picks

Wednesday, January 22, 2014

El-Erian’s PIMCO Exit: A Game Changer?

PIMCO’s announcement on Tuesday that CEO and co-CIO Mohamed El-Erian would soon leave those roles but stay on as a board member of parent company Allianz continued to ripple through the financial world on Wednesday.

Morningstar analyst Eric Jacobson, among others, shared the mixed views of other experts on the news affecting the Newport Beach, Calif.-based bond shop, which had close to $2 trillion in assets under management as of Sept. 30.

“I think it’s of minimal short-term significance, but could potentially have a very long-term impact on the firm,” Jacobson said in an interview with ThinkAdvisor.

Also, the Morningstar expert doesn’t think El-Erian was nudged out.

“I don’t believe that PIMCO’s outflows or the Total Return Fund’s 2013 difficulties likely had much to do with this departure, nor do I expect that he was pushed,” Jacobson said.

Others, like Chip Roame, managing principal of Tiburon Strategic Advisors, agree. “I highly doubt he was pushed out because of one off year,” the consultant said in an interview.

His exit, more likely, is related to other issues. “He has been a very busy guy, making appearances everywhere on behalf of PIMCO. He relocated to Boston a few years ago [to work for Harvard’s endowment] and then went back. He may just need a break, or he may want to do something different,” Roame added.

Investment Woes

Still, PIMCO’s reorganization may be tied at least partially to its poor showing last year, when the PIMCO Total Return Fund (PTTAX, PTTRX) had about $41 billion of outflows. It lost 2.3% in 2013 vs. losses of 1.3% for its category, according to Morningstar. Its asset base is about $237 billion; the fund's ETF shares (BOND) are about $3.5 billion.

Several other PIMCO funds did have inflows in 2013, Jacobson says. “Overall, the firm saw $25.9 billion in net outflows from mutual fund and ETF businesses (combined), which is a relatively modest sum compared with the firm’s overall assets under management,” he noted.

El-Erian has been a lead manager of two funds: PIMCO Global Advantage Strategy Bond (PGSAX) and PIMCO Global Multi-Asset (PGMAX), which have total assets of $3.5 billion and $2.3 billion, respectively. The multi-asset fund declined 8% in 2013 while funds in its Morningstar category improved 9% in the same period.

“If history is a guide, PIMCO will quickly promote his current co-managers to lead roles and more than likely appoint additional managers to back them up. Meanwhile, El-Erian's operational responsibilities appear to be in good hands with the promotion of COO Douglas Hodge to the CEO position,” Jacobson wrote online late Tuesday.

The leadership changes to come at PIMCO return the firm to a management structure that resembles what it had in place before El-Erian became CEO, he adds.

On the other hand, the shift leave a "a bigger question mark," according to Jacobson. "El-Erian has been a crucial, senior voice on PIMCO's investment committee and one of only a handful of people who have likely had the right mix of traits necessary to strongly challenge and help influence [co-CIO Bill] Gross' opinions. His loss is particularly significant given the retirement of Paul McCulley in December 2010," the Morningstar analyst explained in an online article.

While there are "top-notch people" on and about to become part of the investment committee, only time will tell if they "will be able to effectively play the devil's advocate role in that group, a role Gross has always professed to value highly," notes Jacobson.

Future Face of Firm

Apart from changes at PIMCO, El-Erian’s departure is expected to leave a fairly sizeable hole in daily discussions and media coverage of global financial news and PIMCO’s prominent role in these debates.

“In terms of the general investor community, it will be interesting to see how much or whether El-Erian steps back significantly from the public eye,” the fund analyst said. “He plans to remain involved in advising Allianz on economic and policy issues, and has signaled that he may continue writing, something with which he has been very prolific.”

Meanwhile, speculation on El-Erian's next move is running rampant, including conjecture that he might be tapped for the Federal Reserve Board of Governors, a role that would certainly put him back in the public spotlight.


Check out these related stories on ThinkAdvisor:

Tuesday, January 21, 2014

Goldcorp Inc. (USA) (GG): Which Gold Stocks Should You Buy This Year?

The 2013 was certainly not the year that gold bulls had hoped for as gold prices declined 27 percent to post the first annual decline for the yellow metal in over a decade.

Gold prices have tended to take their cue from different drivers at different times but, since 2011,  gold prices have traded according to movements in U.S. real interest rates as well as ETF gold holdings.

The onset of the Fed taper discussion proved to be the nail in the coffin for gold in 2013, as expectations for rising rates began to be priced in, and profits were quickly taken in ETFs. Currently, gold is down 0.80 percent and trading at 1,235.40.

CIBC analyst Alec Kodatsky doesn't believe this is the "end of the road" for either gold or gold equities and believes, at present, sentiment has overshot to the downside, creating the potential for a 2014 recovery - although sentiment will take time to repair.

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There are some positive fundamental factors for gold that argue for higher future prices, namely the ongoing strength in physical demand, the pronounced west-to-east flow of physical gold, and the likelihood that at current gold prices mine production, as well as scrap supply, are set to decline.

Gold may have a reasonable 2014 despite the fact that low inflation and rising 10-year Treasury yields in the U.S. suggesting that market conditions are not optimal for gold prices, with the front end of the year likely seeing the biggest headwinds.

However, Kodatsky believes that consensus expectations for inflation to remain benign at 1 percent, and 10-year yield to trend up to 3.5 percent actually suggest an environment in which gold has historically been able to post modest, but consistent price gains.

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Historically, in a real rate environment of 1-2.5 percent, gold has on average posted an increase of approximately 2 percent per quarter, which is consistent with upward trending price forecast for 2014.

The market appears to have priced in significant downside to the gold sector, ignoring potential positives, such as strong physical demand (consumer and central bank buying), continued stabilization in gold ETF demand, and tighter supply.

Even in today's challenging markets, Kodatsky believes the intermediate producers still represent attractive investment opportunities, offering significant leverage to gold prices and trading at a valuation discount, relative to the senior producers.

Similarly, gold equities are pricing in spot gold and offer little to no credit for growth, exploration, improved mine plans or incremental cash cost. Investors should favor companies with a combination of quality, low-cost operations, a strong balance sheet, and a management team with a proven track record for success.

Following are a few stocks that investors may consider:

Goldcorp Inc. (NYSE:GG) (TSE:G) - Goldcorp is one of the fastest-growing, lowest-cost senior gold producers. It had gold production of 767,700 ounces in the fourth quarter, resulting in 2013 gold production of 2.67 million ounces, an increase of 11 percent over 2012.

The company had approximately $620 million in cash at year-end, an undrawn $2 billion credit facility. It expects 2014 gold production to grow approximately 13-18 percent, to between 3.0 and 3.15 million ounces. The all-in sustaining costs for 2014 expected to decrease to between $950 and $1,000 per ounce and are estimated to come down by 15-20 percent over the next two years.

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Yamana Gold, Inc. (NYSE:AUY) (TSE:YRI): Yamana is a Canadian-based gold producer with significant gold production, gold development stage properties, exploration properties, and land positions throughout the Americas including Brazil, Argentina, Chile and Mexico.

For the third quarter, gold production came in at 263,830 ounces. All-in sustaining costs were $730 per gold equivalent ounces (GEO) on a by-product basis. The cost is 20 percent lower than the second quarter 2013. Cash and cash equivalents as at Sept. 30, 2013 were $232.1 million and had approximately $1.0 billion of available cash and undrawn credit. All-in sustaining cash costs on a by-product basis for 2014 is expected at $850.

Agnico Eagle Mines Limited (NYSE:AEM) (TSE:AEM): Agnico Eagle is a gold producer with operations located in Canada, Finland and Mexico. The company has full exposure to higher gold prices consistent with its policy of no forward gold sales. For the third quarter, it recorded payable production of 315,828 ounces at total cash costs per ounce of $591. Cash and cash equivalents totaled $141.7 million at Sept. 30, 2013. The company has available bank lines of approximately $1.05 billion.

Eldorado Gold Corp. (NYSE:EGO) (TSE:ELD): Eldorado Gold is a Canadian-based, low-cost gold producer with operations in Asia, Europe and South America. The company had gold production of 204,620 ounces at an average cash operating cost of $472 per ounce for the third quarter, compared to gold production of 169,565 ounces at $493 per ounce. It had cash and cash equivalents of $665.84 million as of Sept.30, 2013.

Silver Wheaton Corp. (NYSE:SLW) (TSE:SLW): Silver Wheaton has quickly positioned itself as one of the largest precious metal streaming company in the world. Based upon its current agreements, forecast 2013 attributable production is approximately 33.5 million silver equivalent ounces, including 145,000 ounces of gold. By 2017, annual attributable production is anticipated to increase significantly to approximately 42.5 million silver equivalent ounces, including 210,000 thousand ounces of gold. At Sept. 30, 2013, the company had approximately $62.0 million of cash on hand and has $1 billion available under the revolving credit facility.

Monday, January 20, 2014

5 Toxic Stocks You Should Sell

BALTIMORE (Stockpickr) -- Don't be fooled by last week's bounce -- some stocks are still looking toxic right now.

Despite a big bounce last Wednesday, the S&P 500 is actually down 0.14% since the Fed announced that the taper caper was off. If the end to QE was really priced into the market, as so many said, then stocks sure aren't showing it. While the broad market still looks bullish overall, owning weak individual names is still a big liability in this market.

That's why we're taking a closer look at five "toxic" stocks you should sell today. Now. To be fair, the companies I'm talking about today aren't exactly "junk."

By that, I mean they're not next up in line at bankruptcy court. But that's frankly irrelevant; from a technical analysis standpoint, they're some of the worst positioned names out there right now. For that reason, fundamental investors need to decide how long they're willing to take the pain if they want to hold onto these firms this summer. And for investors looking to buy one of these positions, it makes sense to wait for more favorable technical conditions (and a lower share price) before piling in.

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For the unfamiliar, technical analysis is a way for investors to quantify qualitative factors, such as investor psychology, based on a stock's price action and trends. Once the domain of cloistered trading teams on Wall Street, technicals can help top traders make consistently profitable trades and can aid fundamental investors in better planning their stock execution.

So without further ado, let's take a look at five toxic stocks you should be unloading.

Campus Crest Communities

2013 is panning out to be a rough year for Campus Crest Communities (CCG) -- shares of the small-cap student housing REIT have slid 12.7% since the calendar flipped over to January. While that sounds bad enough as it is, it's actually 31% underperformance vs. the S&P 500. And a quick glance at the chart makes it pretty clear to see why.

CCG is stuck in a textbook downtrend right now, bouncing between trendline resisatnce to the upside and a parallel support level below. You don't have to be an expert technical analyst to figure out where CCG's high probability price action is from here; it's down. Trendline resistance has acted as a ceiling for shares on the last four tests in 2013 – and with shares hitting their head on that resistance level this week, now's the optimal time to sell (or short) this REIT.

If you're looking for an opportunity to buy CCG, you could be in for a long wait. But the 50-day moving average has been a pretty good proxy for resistance since the start of the summer. I'd recommend waiting for that line to get broken before even thinking about doing anything but selling this stock. Until then, it's toxic.

Nissan Motor

Nissan Motors (NSANY) has fared somewhat better this year -- at least the Japanese automaker is up year-to-date. But Nissan has still significantly underperformed the S&P since the start of the year -- and it's underperformed Japan's Nikkei 225 index by a much larger margin.

Now Nissan looks likely to drop. Here's why.

Nissan is currently forming a descending triangle pattern, a bearish setup that's formed by downtrending resistance above shares and horizontal support to the downside at $20. Basically, as Nissan bounces in between those two technical levels, it's getting squeezed closer and closer to a breakdown below that $20 support line. When that happens, look out below.

The setup in Nissan isn't exactly textbook. This stock spent the preceding months before the descending triangle pattern consolidating sideways, rather than slipping lower. But that doesn't change the trading implications of Nissan right now. If shares can't catch a bid at $20, it's time to sell.

L Brands

Retail stocks have turned out some strong performance so far this year, and L Brands (LTD) has been no exception -- the $17 billion specialty retail name is up more than 26% since the calendar flipped over to January. But that's all in the past. Now, LTD looks "toppy."

L Brands is currently forming a double top, a price setup that's formed by two swing highs that peak at the same level. Those two tops happened in early August and then again in the middle of this month. A move through $56 is the signal that it's time to be a seller in LTD.

Whenever you're looking at any technical price pattern, it's critical to think in terms of those buyers and sellers. Double tops, triangles, and other pattern names are a good quick way to explain what's going on in a stock, but they're not the reason it's tradable. Instead, it all comes down to supply and demand for shares.

That support level at $75 is a price where there had been an excess of demand of shares; in other words, it's a place where buyers were more eager to step in and buy shares at a lower price than sellers were to sell. That's what makes a breakdown below $75 so significant -- the move would indicate that sellers are finally strong enough to absorb all of the excess demand above that price level. That's why it makes sense to wait for that indication before you sell.

JPMorgan Chase

Last up is JPMorgan Chase (JPM), a stock that's showing traders a textbook reversal pattern right now. Financial sector stocks have benefitted in a big way from this rally all the way up. After all, in many ways, they're a lot like a leveraged bet on stocks. But a head and shoulders top pattern is decoupling JPM's price action from that of the broad market this month.

The head and shoulders pattern is a bearish reversal setup that indicates exhaustion among buyers. It's formed by two swing highs that top out around the same level (the shoulders), separated by a bigger peak called the head; the sell signal comes on the breakdown below the pattern's "neckline" level, which is right above $50 at the moment for JPM. That's significant for a couple of reasons: It's a round number that's sure to get more attention from investors, and it's a price that acted as resistance on the way up back in March.

If you think that the head and shoulders is too popular to be worth trading, the research suggests otherwise: a recent academic study conducted by the Federal Reserve Board of New York found that the results of 10,000 computer-simulated head-and-shoulders trades resulted in "profits [that] would have been both statistically and economically significant." If you decide to short JPM on a move below $50, I'd still recommend keeping a protective stop at $54.

To see this week's trades in action, check out the Technical Setups for the Week portfolio on Stockpickr.

-- Written by Jonas Elmerraji in Baltimore.