Saturday, April 26, 2014

AT&T Inc. (T) Q1 Earnings Preview: Price War To Hit New Subscribers?

AT&T Inc. (NYSE:T) will release the company's first-quarter 2014 financial results after the New York Stock Exchange closes on Tuesday, April 22, 2014. At 4:30 p.m. ET the same day, AT&T will host a conference call to discuss the results. The company's earnings release, Investor Briefing and related materials will be available at AT&T Investor Relations before the conference call begins.

Wall Street anticipates that telecom services company will earn $0.70 per share for the quarter, which is $0.06 more than last year's profit of $0.64 per share. iStock expects AT&T to top Wall Street's consensus number. The iEstimate is $0.72, two cents more than expected.

[Related -How Installment Plans Impact EPS Of AT&T Inc. (T), Verizon Communications Inc. (VZ)?]

Sales, like earnings, are expected to rise, growing 3.4% year-over-year (YoY). AT&T's consensus revenue estimate for Q1 is $32.41 billion, more than last year's $31.36 billion.

AT&T Inc. (AT&T), is a holding company. The Company is a provider of telecommunications services. The services and products offered by the Company include wireless communications, local exchange services, long-distance services, data/broadband and Internet services, video services, telecommunications equipment, managed networking, wholesale services and directory advertising and publishing. AT&T operates in three segments: Wireless, Wireline, and Other.

The cellular carriers have been going to it price wise lately, which could put the squeeze on margins in Q1; however, connecting tablets has been the butter for T's wireless bread lately. In 2013, Wireless accounted for 56% of AT&T's revenue, wireline data i.e. U-Verse 28%, Wireline Voice (landline) and other 16%.

[Related -T-Mobile US Inc (TMUS): How T-Mobile's ETF Plan Will Impact Rivals In Q1?]

Now, managements VIP plan calls for YoY growth of 2-3%. Those projections could face some challenges. According to Google Trends, search volume intensity (SVI) is down sharply in Q1 2014 versus Q1 2013. SVI decreased 29.73%. Although SVI has led us astray a few times in the past, it is possible that aggressive competitor pricing is taking its toll on T, or that the company is holding market share while new subscriber growth slows, maybe a lot.

U-verse queries, on the other hand, grew. Search volume intensity for the keyword "AT&T U-Verse" were up 7.35% year to year. Considering the way T's revenue pie is sliced, wireless could be a drag if trends are predictive.

While Google Trends are headed in one direction, analyst enthusiasm is headed in the other. In the last 30 days, 14 analysts upped their outlooks with six doing the same in the last week.

Wall Street should be too far off the mark as the communications giant's EPS tend to hug the consensus estimate. In the last 16 quarters, earnings beat by as much as $0.04 and missed by as much as -$0.03 but, on average reported EPS strayed less than a penny from the estimate.

Overall: The iEstimate suggests AT&T Inc. (NYSE:T) earnings will hug the consensus once again; however, Google Trends say T could be struggling to add new subscribers to the wireless business due to stiff price competition. Meanwhile, U-Verse could be the source of our projected surprise if SVI is true. 

3 Internet and Web Service Stocks to Sell Now

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The overall ratings of three internet and web service stocks are down on Portfolio Grader this week. Each of these rates a “D” (“sell”) or “F” overall (“strong sell”).

Reis, Inc. () is on the decline this week, earning a D (“sell”) after receiving a C (“hold”) last week. Reis is engaged in the business of providing commercial real estate market information and analytical tools for its customers. In Portfolio Grader’s specific subcategories of Earnings Momentum and Earnings Surprise, REIS also gets F’s. At $17.33, the stock is under the 50-day moving average of $18.27. .

iPass’ () rating falls this week to an F (“strong sell”), down from last week’s D (“sell”). iPass offers enterprise mobility services on a global basis by providing services that simply, smartly and openly facilitate network access from mobile devices while providing the enterprise with visibility and control over their mobile ecosystem. The stock gets F’s in Earnings Revisions, Equity, Cash Flow and Sales Growth. .

Best Growth Companies To Invest In Right Now

This week, Velti’s () rating worsens to an F from the company’s D rating a week ago. Velti is a global provider of mobile marketing and advertising solutions. The stock gets F’s in Earnings Growth and Earnings Momentum. .

Louis Navellier’s proprietary Portfolio Grader stock ranking system assesses roughly 5,000 companies every week based on a number of fundamental and quantitative measures. Stocks are given a letter grade based on their results — with A being “strong buy,” and F being “strong sell.” Explore the tool here.

Friday, April 25, 2014

Try This Weird Trick to Find See the Future for Schawk

There's no foolproof way to know the future for Schawk (NYSE: SGK  ) or any other company. However, certain clues may help you see potential stumbles before they happen -- and before your stock craters as a result.

A cloudy crystal ball
In this series, we use accounts receivable and days sales outstanding to judge a company's current health and future prospects. It's an important step in separating the pretenders from the market's best stocks. Alone, AR -- the amount of money owed the company -- and DSO -- the number of days' worth of sales owed to the company -- don't tell you much. However, by considering the trends in AR and DSO, you can sometimes get a window onto the future.

Sometimes, problems with AR or DSO simply indicate a change in the business (like an acquisition), or lax collections. However, AR that grows more quickly than revenue, or ballooning DSO, can, at times, suggest a desperate company that's trying to boost sales by giving its customers overly generous payment terms. Alternately, it can indicate that the company sprinted to book a load of sales at the end of the quarter, like used-car dealers on the 29th of the month. (Sometimes, companies do both.)

Why might an upstanding firm like Schawk do this? For the same reason any other company might: to make the numbers. Investors don't like revenue shortfalls, and employees don't like reporting them to their superiors.

Is Schawk sending any potential warning signs? Take a look at the chart below, which plots revenue growth against AR growth, and DSO:

Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. FQ = fiscal quarter.

The standard way to calculate DSO uses average accounts receivable. I prefer to look at end-of-quarter receivables, but I've plotted both above.

Watching the trends
When that red line (AR growth) crosses above the green line (revenue growth), I know I need to consult the filings. Similarly, a spike in the blue bars indicates a trend worth worrying about. Schawk's latest average DSO stands at 76.2 days, and the end-of-quarter figure is 76.4 days. Differences in business models can generate variations in DSO, and business needs can require occasional fluctuations, but all things being equal, I like to see this figure stay steady. So, let's get back to our original question: Based on DSO and sales, does Schawk look like it might miss its numbers in the next quarter or two?

The numbers don't paint a clear picture. For the last fully reported fiscal quarter, Schawk's year-over-year revenue shrank 1.5%, and its AR dropped 2.1%. That looks OK. End-of-quarter DSO decreased 1.6% from the prior-year quarter. It was up 7.2% versus the prior quarter. Still, I'm no fortuneteller, and these are just numbers. Investors putting their money on the line always need to dig into the filings for the root causes and draw their own conclusions.

Looking for alternatives to Schawk? It takes more than great companies to build a fortune for the future. Learn the basic financial habits of millionaires next door and get focused stock ideas in our free report, "3 Stocks That Will Help You Retire Rich." Click here for instant access to this free report.

Add Schawk to My Watchlist.

Wachtell Sees 'Threat' in Ackman's Allergan Bid

NEW YORK (TheStreet) -- Law firm Wachtell Lipton, perhaps the most established critic of activist investors, called hedge fund Pershing Square Capital Management's involvement in a bid by Valeant Pharmaceuticals (VRX) to buy Allergan (AGN) "aggressive and self-interested," characterizing the move as a new threat to Corporate America.

Pershing Square And Valeant's Allergan Deal Is A Watershed For Activism

While the letter, co-signed by Wachtell founding partner Martin Lipton, may have important regulatory implications, it is more interesting within the context of a war of words between Carl Icahn and Lipton.

On Tuesday, Icahn spent the better part of a 40-minute presentation to investors attacking Lipton's criticism of activist investors. In fact, the activist billionaire went as far as saying Lipton has bridged a decade-long war of words between him and Pershing's Bill Ackman. Whomever Marty Lipton disagrees with is a friend, Icahn said at the IMN Active-Passive Investor Conference on Tuesday. Lipton's criticism of Ackman's activist investing style and his sounding of an alarm about Pershing's role in the Allergan bid may bridge a relationship between the two investing titans that is marred by a fee dispute and an over billion dollar difference of opinion on the business model of Herbalife (HLF). Icahn, a professional investor and an amateur comedian, however, was hamming it up for his audience of investors and journalists. Wachtell Lipton, on the other hand, is dead serious about its critique of the Pershing and Valeant bid for Allergan. The most novel part of the Allergan bid is Pershing's partnership with Valeant Pharmaceuticals. Pershing acquired nearly 10% of Allergan's stock worth about $10 billion after making a pact to support Valeant's merger effort. Valeant, a day after Pershing's stake was disclosed, offered Allergan about $45 billion in an unsolicited cash and stock deal. "The activist however brings several favors to the party, in addition to some financing. One is the questionable hope that it can legally close on the options and thus control 10% of the target's stock (and votes) sooner than its strategic partner could. A second is a large megaphone, and the willingness to wield it in ways that a public company likely would not, to press the case for their deal. A third is that the activist hedge fund specializes in covert accumulations, a skill set that a strategic buyer would have to master," Wachtell said. "But the most important thing it brings to the team is its willingness to bet billions of dollars without performing any due diligence beyond a basic review of the target's public documents. This is easier for an activist hedge-fund given its incentive compensation structure than for a public company," the law firm added. The latter is a concern for Wachtell Lipton, which said Pershing and Valeant's bid is premised on a short-term profit mentality and is reliant upon an inherent conflicts of interest. "Pershing Square is betting billions of dollars that it can 'knock over' Allergan. It doesn't care much who buys the target: it would apparently like Valeant to win, but it makes a fortune if someone else pays a higher price," Wachtell said. The law firm even questioned whether the bid is good for American society. "Allergan spends 17% of its revenue on research and development, compared to Valeant's 3%, and Valeant has said it plans to cut around 28,000 jobs in the merger. We do not believe that this is the sort of economic activity that policy-makers should be actively encouraging in their rule-making (or foot-dragging)," Wachtell said. Wachtell's numbers may be off by more than a little. Allergan only has about 28,000 workers and the company guided to an about 20% consolidation of the combined company's workforce, indicating roughly 5,000 job cuts. Another possible error involves Wachtell's accusation that Pershing's flaunted the SEC's rules surrounding "early warning" disclosures by using options contracts to build its Allergan stake. Early warning requirements give investment funds 10 days to disclose a stake greater than 4.9%. Pershing appears to have conformed with the spirit of the law, given that it did make the investment public within the 10-day window. The allegation of short-termism may also be unfair. Pershing has agreed to invest billions in a merged Valeant and Allergan for at least 12-months. Wachtell concluded by asking investors to question whether bids like Valeant and Pershing's partnership have improved the "Nation's economy and its prospects, upon which the interests of investors ultimately depend." Data compiled by Harvard University's Lucian Bebchuck indicates activist investors like Icahn and Ackman do play a helpful role in fixing companies with weak management and board directors. Joseph Perella and Peter Weinberg, in an op/ed, recently distinguished between activists that are helpful to Corporate America and those that aren't. Perella and Weinberg highlighted Icahn's call to split Motorola as a positive, while they pointed to his campaign against eBay (EBAY) management and Ackman's investment in J.C. Penney (JCP) and Herbalife as negatives. Bottom Line: At this rate, expect Carl Icahn and Bill Ackman to become golfing buddies. -- Written by Antoine Gara in New York. Follow @AntoineGara

Stock quotes in this article: AGN, VRX 

Solar Power Is Booming, But Will Never Replace Coal, Here's Why

Solar power has been growing like crazy. Last year the solar industry installed a record amount of solar capacity. The impact can be seen in the data. According to the Energy Information Administration, in 2012 there were 3.5 million megawatthours of electricity generated by solar photovoltaic panels. In 2013 that more than doubled to 8.3 million Mwh. And to think that a decade ago the U.S. generated just 6,000 Mwh from solar PV. Solar is closing in on price parity with the likes of coal — with full-cycle, unsubsidized costs of about 13 cents per kilowatthour, versus 12 cents for advanced coal plants.

So is the solar revolution finally here? Not quite. Even after a decade of rampant growth solar energy still barely moves the needle in the U.S. energy mix. In fact, solar merely equals the amount of electricity that the nation generates by burning natural gas captured from landfills. And it's only slightly more meaningful than the 7.3 million Mwh we get from burning human waste strained out of municipal sewer systems.

Indeed, when you factor in all the sources of energy consumed in this country, captured solar power amounts to well less than 1 quadrillion Btu out of an annual total of 96.5 quadrillion.

The biggest sources are the old standbys. Oil still reigns supreme at 36 quadrillion Btu, natural gas at 26 quads, nuclear 8. Hydropower and biomass bring up the rear at 2.6 and 2.7 quads. Wind is just 1.5 quads. And coal — the great carbon-belching demon of the global energy mix — its contribution is 19 quads. That's nearly 8 times all the nation's wind and solar generation combined.

This is all important to keep in mind in light of pending efforts by the EPA to initiate draconian new regulations governing carbon dioxide emissions from coal-burning power plants. Coal is responsible for about 1.7 billion metric tons a year of carbon dioxide out of the 5.3 billion ton annual total.

The assumption, by policy makers like President Obama, is that the country can cut carbon emissions by closing coal plants, while making up for the lost electricity by burning more natural gas and building more solar and wind. Indeed, natural gas has taken a bite out of coal. In 2013, coal production from U.S. mines fell to 995.8 million short tons. The last time it was that low was in the late 1980s. Coal production peaked in 2008 at 1.17 billion short tons.

Thursday, April 24, 2014

FINRA Approves Broad Changes to Broker Background Checks

The Financial Industry Regulatory Authority’s Board on Thursday approved sweeping changes involving brokers’ background checks.

The FINRA Board approved amendments to FINRA's supervision rule that would expand the obligations of firms to check the background of applicants for registration, including first-time applications as well as transfers, to verify the accuracy and completeness of the information contained in an applicant's Form U4.

Firms would also be required to adopt written procedures in this area that include searching public records.

The Form U4 is the Uniform Application for Securities Industry Registration or Transfer used by FINRA, other self-regulatory organizations (SROs) and states to elicit employment background and disciplinary information to register individuals.

FINRA also said that it plans to perform an initial search of public financial records for all registered representatives and will also conduct a search of publicly available criminal records for all registered individuals who have not been fingerprinted within the last five years.

Once these searches are completed, FINRA said that it will conduct “periodic reviews of public records to ascertain the accuracy and completeness of the information available to investors, regulators and firms.”

These efforts, FINRA stated, "also better position FINRA to assess firm and registered individual compliance with reporting requirements."

FINRA is also considering whether additional data from the Central Registration Depository (CRD) system used by regulators should be included in BrokerCheck. FINRA said that its chief economist has initiated a study to see if there is a meaningful relationship between that data – which includes failed examinations – and broker misconduct.

"These are important initiatives to improve the accuracy and totality of details reported on a registered individual’s Form U4,” said Richard Ketchum, FINRA’s chairman and CEO, in a statement. “FINRA would require firms to use publicly available records to verify that information such as criminal and bankruptcy records, civil litigations, judgments and liens are properly reported upon a registered individual's application. FINRA encourages every investor to use BrokerCheck to research the background of individuals they are trusting to invest their money.”

The amendments to the supervision rule will be submitted to the Securities and Exchange Commission for review and approval.

(Related ThinkAdvisor story: FINRA Reverses Schwab Class Action Waiver Decision)

Why B of A Blew the Roof Off the Joint This Week

Two-and-a-half hours into trading, even a down-market day couldn't stop Bank of America (NYSE: BAC  ) investors from smiling: The superbank's shares are up 6.2% for the week on strong second-quarter earnings as well as a few reassuring words from the Federal Reserve.

From Wall Street to Washington
On Wednesday, B of A reported that net income rose 63% year over year for the second quarter, from $2.5 billion to $4.0 billion. In addition, total revenue increased 3.2% year over year, from $22.0 billion to $22.7 billion. Earnings per share for were $0.32, handily beating analyst expectations of $0.25.

Moving from Wall Street to Capitol Hill, on Wednesday and Thursday Fed Chairman Ben Bernanke made what will likely be his last appearance testifying before Congress on the country's monetary policy.

At the top of most investors minds was the fate of quantitative easing. And while Bernanke didn't back off his plan to start tapering QE later this year, he did stress that the Fed remained committed to accommodative monetary policy as long as the economy was still struggling.

Foolish bottom line
And Bernanke went out of his way to stress that the economy is still struggling: that unemployment remains too high and inflation too low. With no surprises coming out of his two days of testimony, the markets responded positively, though those warm feelings weren't long-lasting enough to carry through to today -- a sign of how fragile investor confidence in general is right now.

But happy second-quarter news from the country's second-biggest bank were more than enough to give B of A investors a big week. It's hard to argue with 63% net income growth, though with revenue growth of just 3.2%, investors should be asking how much of that income growth is sustainable. Some of it came as a result of lower expenses, i.e., cost-cutting. But you can only cut so much fat before you start cutting into muscle.

And some of that income growth came from the bank's Wall Street business lines, which can be fickle --  much more fickle than consumer-based business lines, and B of A is still a consumer bank at heart. On that note, deposits were up a healthy 4% year over year and mortgage production was up 40% year over year (though that ship may soon be sailing for all the banks).

It's not clear that B of A is out of the woods yet when it comes to leftover pain from the financial crisis. Investors are still awaiting the results of the suspended June trial pitting the superbank against AIG and other big financial institutions. But B of A's overall encouraging Q2 results made for a well-deserved big week for shareholders. 

Afraid of investing in the big banks after the crash? Many investors are but the sector has one notable standout. In a sea of mismanaged and dangerous peers, it stands out as The Only Big Bank Built To Last. You can uncover the top pick that Warren Buffett loves in The Motley Fool's new report. It's free, so click here to access it now.

Wednesday, April 23, 2014

AIG cyber insurance covers bodily harm

cyber insurance NEW YORK (CNNMoney) Who says the digital world and the physical one are separate?

On Wednesday, AIG announced it's expanding cyber insurance offering to cover property damage and bodily injury. It's a watershed moment. A major insurer is saying the virtual and corporeal are now, in some cases, one and the same.

In a statement, AIG (AIG, Fortune 500) acknowledged the closing gap.

"Cyber risk goes well beyond data privacy concerns covered by stand-alone cyber insurance offerings prevalent in the market," said Tracie Grella, who leads AIG's professional liability division. "The physical risk of a cyber attack or cyber event to property and people is very real."

Related story: Tesla car doors can be hacked

Researchers have accessed control systems for heart rate monitors, traffic lights, home security apps, swimming pool acid tanks and gondola rides -- none of which had security protocols of any kind built in. Imagine the damage that could be done if the wrong people tinkered with those systems.

The nation's critical infrastructure of utilities -- power plants, water treatment centers, dams, etc. -- runs on cyber platforms. Much of it is Internet-accessible.

The best proof that cyber hacks lead to physical damage actually comes from a U.S. offensive. The United States famously dealt a serious setback to Iran's nuclear ambitions with a cyberattack called Stuxnet that made many of the nation's centrifuges spin out of control.

In another case, Iran is believed to have attacked Saudi Oil company Aramco in 2012, ruining 30,000 computers. The company had to trash three-quarters of their PCs.

The repercussions of a cyber-to-physical hack could be fatal. A dam told to ignore pressure readings could burst. A power plant taken offline could pull the plug on hospitals.

Hackers control car's steering and brakes   Hackers control car's steering and brakes

And on a personal level, consider how our cars are essentially computers at this point. The average car has 50 or more microprocessors inside of it. And recent research has shown they're just as hackable as our PCs. If something goes wrong on the highway, it's not like a malfunctioning app you just close. Your life is at risk.

Cybersecurity insurance is a relatively new phenomenon. It's a hedge against getting hacked, which is now seen as an inevitability.

Companies are starting to add cybersecurity insurance to their policies. Most have already bought it or will soon, according to a Ponemon Institute report last year. A survey discovered 31% of companies have a policy, and another 39% are planning to get one. The practice is getting so much attention even the Department of Homeland Security is weighing in.

Related story: Canadians arrest a Heartbleed hacker

It makes sense to insure against data breaches, because the cost of those incidents is increasing. Between 2011 and 2012, Ponemon saw the average cost of a data breach in the United States rise from $188 per-person to $194. If a massive database with thousands of names gets lost, that quickly gets multiplied.

The Target hack affected as many as 110 million shoppers -- a third of the United States. The Neiman Marcus hack hit 1.1 million customers. The most recent Michaels hack hit 3 million.

The damage in all those cases is monetary: thieves make fraudulent purchases, customer financial data is exposed and credit cards must be reissued. Target told senators it's investing $100 million to upgrade to a more advanced credit card system to avoid a repeat of last year's debacle.

But physical damage is seen as the next big liability. AIG didn't come up with th! is idea o! n its own. The company said it's responding to concerns from power plants, oil companies and hospitals. To top of page

The Coming Energy-Infrastructure Boom

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Whether it’s power plants, bridges or roads, the developed world’s aging infrastructure is in dire need of replacement. Meanwhile, the infrastructure build-out taking place in the emerging markets has been unable to keep pace with surging economic growth and rapid urbanization.

But all that’s about to change. The world’s political leaders and financiers are starting to explore new ways to finance capital-intensive projects through public-private partnerships between government, private industry, institutional and private investors. And the world’s top energy companies have also begun indentifying tomorrow’s growth markets.

These new public-private partnership structures are certain to offer various ways for both public and private investors to participate, and to benefit from each other’s involvement. Private investors will earn sizable returns by helping to finance these projects directly, while public investors will benefit from the greater earnings that flow through to their investments in various energy firms and developers.

Furthermore, new mutual funds or exchange-traded funds (ETF) may be created to invest in these energy utility assets solely, or as part of a more general infrastructure fund that includes roads and bridges. Future investment products may even be segmented by growth, region and risk profile. And it’s very possible that the government’s involvement may allow for the securitization of these public-private partnerships, with special tax incentives and other protections or guarantees to induce investment.

In fact, your correspondent has been privy to many discussions of these possibilities, most recently at an invitation-only dinner hosted by Standard & Poor's last month that brought together infrastructure industry experts and players, including analysts, as well as company and private-equity executives. And the one t! heme throughout all the talks was the substantial growth evident in global energy infrastructure.

According to a report by consultants Bain & Company, “The simultaneous crumbling of aging infrastructure in advanced economies and surge of development in developing economies will drive a steady 4 percent annual growth on infrastructure investment well into the second half of this decade, pushing total investment to a figure of $4 trillion.” Further, the consultants believe that utilities, oil and gas infrastructure will account for 40 percent of this investment, which is consistent with population and income figures we also highlight below.

Chart A: Utilities, Oil and Gas Are 40 Percent of Future Global Infrastructure Investment 

2014-04-22-U&I-Chart ASource: Bain & Company 

So far at least, Wall Street is largely ignoring the investment potential of this massive spending. The vast majority–roughly 75 percent–of institutional investors allocate less than 5 percent of assets under management (AUM) to infrastructure.

But target allocations are quickly shifting. Bain expects the majority of investors to allocate 5 percent or more of assets under management (AUM) to infrastructure in the coming years. And the total number of infrastructure funds has already nearly tripled in the past five years.

Why now? Global economic growth, though still moderate, is improving, and that's created the economic rationale for infrastructure investment. Furthermore, countries that would have tried to defer these necessary upgrades in the past can no longer do so without severely hindering future economic growth.

According to a recent report from the International Monetary Fund (IMF), global growth is projected to strengthen from 3 percent in 2013 to 3.6 percent in 2014 and 3.9 percent in 2015. In advan! ced econo! mies, growth is expected to increase to about 2.25 percent in the 2014–15 period, an improvement of about 1 percentage point compared with 2013.

Among the key drivers are a reduction in fiscal tightening, except in Japan, and still highly accommodative monetary conditions. Growth will be strongest in the US, at about 2.75 percent, but varied in the eurozone, according to the IMF.

In developing economies, the IMF forecasts growth will rise more gradually, though from a much higher base, from 4.7 percent in 2013 to about 5 percent in 2014 and 5.25 percent in 2015. Growth will be spurred by stronger external demand from advanced economies, but tighter financial conditions will dampen growth in domestic demand in some countries.

Start with Power Demand

There are a number of ways to identify which infrastructure investments are poised to benefit the most from these trends. Some like to look at growth figures in the various energy segments, such as growth in oil, coal, natural gas, and renewable energy, which do offer insights. But I've always found that power demand, population growth, and gross domestic product (GDP) are the best measures to use as a starting point.

And when comparing power demand between emerging markets and the developed world, the numbers are appreciably higher in developing economies. While power demand grows around 1 percent annually in developed economies such as the US, faster-growing countries and regions such as China, India, Latin America and Africa show double-digit power-demand growth.

Chart B: Projected Increases in Power Generation Through 2050

2014-04-22-U&I-Chart B Source: International Energy Agency, Chadbourne & Parke 

“There is an overwhelming urbanization trend in most of the world, but especially in Asia. The developing markets are starting to become reasonably large, ! but unles! s it is China or India, the market will take a while to reach scale. We are going to see a lot more cities of 10 million to 20 million people in the developing world,” according to a recent project finance report from the international law firm Chadbourne & Parke.

In fact, global energy use is projected to grow by 56 percent between 2010 and 2040. The US Department of Energy’s Energy Information Administration attributes half of the increase to China and India.

Population and income growth are the main drivers behind growing demand for energy. By 2030, the world population is projected to reach 8.3 billion, which means an additional 1.3 billion people will need energy. And world income in 2030 is expected to be roughly double the 2011 level in real terms, according to various government and economist estimates.

Low- and medium-income economies outside the developed world will account for over 90 percent of population growth to 2030. “Due to their rapid industrialization, urbanization and motorization, [emerging markets will] also contribute 70 percent of global GDP growth and over 90 percent of global energy demand growth,” according to one European energy company's forecast.

Chart C: Total Number of Households Projected to Increase Nearly 50 percent by 2040

2014-04-22-U&I-Chart C

The Big Power Plant Build-Out

Power generation is going to be the fastest-growing major demand sector. As noted earlier, worldwide electricity use is projected to increase by 90 percent from 2010 to 2040, with developing countries accounting for the overwhelming majority of that increase.

And given the high output from the prolific US shale plays, natural gas is going to be a big player in that future as a fuel for power plants as well as other uses. Nuclear power and renewables will also make signific! ant contr! ibutions toward fulfilling future energy demand.

In fact, in a recent report entitled “The Outlook for Energy 2014: A View to 2040,” ExxonMobil predicts that by 2040 the world will consume 40 percent more energy from natural gas than coal. However, it should be noted that this forecast differs sharply with the International Energy Agency's prediction that global coal consumption will outstrip both oil and natural gas as early as 2017, owing to growing coal consumption in the developing world.

By contrast, Exxon expects demand for coal, which is currently the second-most consumed fuel after oil, will level off and fall to third place by 2025, as countries opt to use less carbon-intensive natural gas instead.

Chart D: Electricity Use Will Expand in Every Region Around the World

2014-04-22-U&I-Chart D

Source: ExxonMobil

Half of the growth in demand for natural gas is being driven by the need for electricity around the world, according to the report. Though demand for nuclear power and renewable energy sources, such as wind, solar and biofuels, will actually grow at an even faster rate, they will contribute only a small share to the energy mix during this period because of their cost.

Incidentally, all these new power-generation options will also lead to billions upon billions of dollars of power and gas transmission investment.

What’s remarkable is that while the projected rise in energy demand over this 30-year period is substantial, it is only about 80 percent of the growth seen from 1980 to 2010. This is all the more extraordinary because the growth in economic output from 2010 to 2040 will be more than double the growth from 1980 to 2010. This means that the world is continuing to become more efficient as prosperity advances, and efficiency as an area of investment is likely to increase ! as more c! ountries around the world adopt smart-grid technologies, for example.

Subscribers to Utility Forecaster can learn which companies stand to benefit the most from these trends in the full update.

Why GM Hasn't Repaid Taxpayers

GM headquarters in Detroit. Photo credit: General Motors Co.

It's a question that readers ask me all the time: When will General Motors (NYSE: GM  ) repay taxpayers?

The answer is that it depends on how you look at it.

Legally speaking, GM has already repaid the $49.5 billion loan it got from the U.S. government to fund its bankruptcy restructuring in 2009. GM gave the U.S. Treasury a mix of cash and stock, as agreed. There's nothing more that GM is required to do under the terms of those loans. It's a done deal.

But here's why some folks continue to complain: The amount that has been returned to the U.S. Treasury so far is much less than that $49.5 billion.

The government has been recovering more every month, as it sells off its holdings of GM stock. But as I'll explain, the government probably doesn't have enough stock left to fully pay off the debt.

The government has been selling off its stock ...
Here's the background: At this time last year, the U.S. Treasury Department held just over 500 million shares of GM's common stock. But last December, GM and the Treasury struck a deal: GM agreed to buy 200 million of those shares outright, for a price that was a bit above what the stock was trading for on the market at that time.

In turn, the Treasury agreed to start selling off the remaining 300 million shares on the open market -- gradually, so as not to disrupt the markets. It said that it would complete its sales by next spring.

The first of those sales happened early this year. Since then, the government has been releasing monthly updates on its progress. Last week, it said that it had sold nearly $2 billion worth of stock in June.

Here's how GM's "repayment" so far breaks down.

... but it's likely to come up short in the end
As I said, Treasury's loans to GM totaled $49.5 billion. Of that, the Treasury has since recovered around $33.4 billion.

A little over $6 billion of that came from the Treasury's stock sales since January, along with dividends and interest received since GM emerged from bankruptcy. The remainder breaks down like this:

$6.7 billion in cash, the last of which was paid in April 2010. That was when then-CEO Ed Whitacre declared that GM's debt had been "paid in full," which was not his best move. $13 billion via GM's IPO, back in 2010. The government sold about 45% of its stock holdings at that time. $2.1 billion recovered when GM bought back some preferred stock from the Treasury in late 2010. $5.5 billion when GM bought back those 200 million shares from the Treasury last December, as I mentioned.

The upshot? The Treasury is still a little over $16 billion short – but it has about 160 million shares of GM stock left to sell.

That's not likely to be enough to make things whole.

So where will that leave taxpayers – and GM?
At current prices, those shares are worth a little less than $6 billion. Unless GM's stock goes way up, and soon, Treasury is going to be left with a shortfall after it sells the last of its stock. That shortfall is likely to be in the neighborhood of $10 billion.

Now, it's possible to argue that the U.S. government has received more than $10 billion in value from its decision to save General Motors. That decision kept the U.S. automotive supply chain alive in a time of deep crisis, which probably indirectly saved Ford as (NYSE: F  ) well -- along with thousands and thousands of American jobs. The recession would have been a lot worse had the U.S. auto industry collapsed.

But it's also possible to argue that GM, which is now a solidly profitable global company with more than $20 billion in cash on hand, might be obligated to make up some or all of that $10 billion shortfall -- morally, if not legally.

What do you think? Scroll down to leave a comment and let me know.

China is already the world's largest auto market -- and it's set to grow even bigger in coming years. A recent Motley Fool report, "2 Automakers to Buy for a Surging Chinese Market," names two global giants poised to reap big gains that could drive big rewards for investors. You can read this report right now for free -- just click here for instant access.


Tuesday, April 22, 2014

1 Reason Not to Bite After Family Dollar's Earnings

Investors apparently liked what they read in Family Dollar's (NYSE: FDO  ) latest earnings report. The discounter saw its stock get more expensive -- by as much as 7% -- after releasing its third quarter results.

Still, while the report was better than expected, it included some news that should have investors cautious about jumping into the stock here. The company is paying a hefty price for those surprising sales gains.

Great sales growth
But first, here's the good news: Family Dollar boosted sales by a solid 9% last quarter. That jump came from a 2.9% rise in comparable store sales, or comps, with an extra 129 store locations chipping in the rest of the gain.

By comparison, discount king Wal-Mart (NYSE: WMT  ) saw a 1.4% drop in comps to start the year. And revenue barely budged, rising by just 1%. Yes, that poor trend has probably reversed since the tax refunds and warmer spring weather finally hit, driving traffic back to Wal-Mart's stores. But Family Dollar still looks to be attracting more of the two-thirds of consumers that say they are dealing with financial headwinds by shopping around for deals.

Costly market share gains
The problem is that Family Dollar has had to pay up for its increasing market share and sales levels. The company's gross profit margin fell by more than a full percentage point, to 34.7% last quarter. In contrast, Dollar Tree (NASDAQ: DLTR  ) booked an expansion of profits, to 35.2%, continuing a trend that's seen it pull away from Family Dollar.

FDO Gross Profit Margin Quarterly Chart

FDO Gross Profit Margin Quarterly data by YCharts

That's all thanks to Family Dollar's bigger worry, its growing dependence on consumables. This category, which includes things like food, health and beauty aids, and tobacco, has been a major growth driver for discount shops as value-conscious shoppers look to trade down from more expensive stores.

Too much food
But Family Dollar has hitched itself to this trend to a much greater degree than competitors. Rival Dollar Tree's consumables category, for example, inched up to 51.4% of sales last year, from 50.8% in 2011. Family Dollar, on the other hand, got a whopping 69% of its revenue from that category last year, up from 66.5% the year before.

Since consumables carry a lower markup than things like home goods and apparel, they tend to hurt overall profitability. You can see the growth in reliance on those products pushing Family Dollar's gross margin down over time.

And consumables are also expensive to stock. The company plans to spend more than $600 million in capital outlays in 2013 on things like fitting stores with freezers and refrigerators. That's about double what Dollar Tree plans to spend with its own renovations.

The stock's recent jump has Family Dollar valued about evenly with Dollar Tree right now, at 19 times trailing earnings. But given all the cash and profitability that it's had to give up in exchange for its sales boost, investors shouldn't be cheering Family Dollar's results.

The death of Wal-Mart
As I mentioned, Wal-Mart started 2013 with a whimper. To learn about two retailers aiming to take down the discounter, take a look at The Motley Fool's special free report: "The Death of Wal-Mart: The Real Cash Kings Changing the Face of Retail." In it, you'll see how these two cash kings are able to consistently outperform and how they're planning to ride the waves of retail's changing tide. You can access it by clicking here.

Genworth Financial (GNW) Stock Climbs on MGIC Investment (MTG) Earnings

NEW YORK (TheStreet) -- Genworth Financial (GNW) stock is climbing on Tuesday after fellow financial securities company MGIC Investment (MTG) recorded positive first-quarter earnings. 

By midafternoon, shares had added 4.9% to $17.73, while MGIC Investment climbed 7% to $8.91.

MGIC Investment recorded net income of 15 cents a share over the three months to March, compared to a net loss of 31 cents a share in the year-ago quarter. Earnings beat the Capital IQ Consensus Estimate of 11 cents a share by 4 cents. 

Must Read: Warren Buffett's 10 Favorite Growth Stocks SELL NOW: If you own any of the 900 stocks that TheStreet Quant Ratings has identified as a 'Sell'...you could potentially lose EVERYTHING in the next 6-12 months. Learn more. TheStreet Ratings team rates GENWORTH FINANCIAL INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation: "We rate GENWORTH FINANCIAL INC (GNW) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity and compelling growth in net income. We feel these strengths outweigh the fact that the company shows weak operating cash flow." Highlights from the analysis by TheStreet Ratings Team goes as follows: Powered by its strong earnings growth of 27.27% and other important driving factors, this stock has surged by 70.85% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, GNW should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year. GENWORTH FINANCIAL INC has improved earnings per share by 27.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, GENWORTH FINANCIAL INC increased its bottom line by earning $1.15 versus $0.55 in the prior year. This year, the market expects an improvement in earnings ($1.45 versus $1.15). Despite the weak revenue results, GNW has outperformed against the industry average of 12.8%. Since the same quarter one year prior, revenues slightly dropped by 2.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share. Despite currently having a low debt-to-equity ratio of 0.52, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Insurance industry and the overall market on the basis of return on equity, GENWORTH FINANCIAL INC underperformed against that of the industry average and is significantly less than that of the S&P 500. You can view the full analysis from the report here: GNW Ratings Report STOCKS TO BUY: TheStreet's Stocks Under $10 has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

Stock quotes in this article: GNW 

Weak Sales Take a Toll on McDonald's Profit

McDonald's profit slips amid weak sales David Paul Morris/Bloomberg via Getty Images NEW YORK -- McDonald's said that its profit slipped in the first quarter as global sales remained weak for the world's biggest hamburger chain. The Oak Brook, Ill.-based company said global sales edged up 0.5 percent at established restaurants. In the flagship U.S. market, the figure fell 1.7 percent as customer traffic declined. The company cited "challenging industry dynamics and severe winter weather." It said global sales for April are expected to be modestly positive. April would reflect the first full month that Taco Bell has offered its national breakfast menu, which it has pitched a challenge to McDonald's dominance in the morning hours. The decline in sales and customer traffic in the U.S. reflects the struggles McDonald's (MCD) is facing as eating habits change and competition intensifies. After a decade of growth, annual sales at established U.S. locations fell for the first time last year. The continued decline in the U.S. in the first quarter of 2014 is in stark contrast to Chipotle Mexican Grill (CMG), which last week said sales at established locations rose 13.4 percent. McDonald's CEO Don Thompson has noted in the past there seemed to be a split in the fast-food industry, with people who have more spending money heading off the chains that charge more. He said McDonald's will focus on underscoring value for its more cash-strapped customers, but the chain is also offering more premium offerings such as its new Bacon Clubhouse Burger. In a statement Tuesday, Thompson said McDonald's is focusing "creating the best overall experience for our customers." To adapt to shifting trends, for instance, the chain has been rolling out new prep tables in its U.S. kitchens that can hold more sauces and toppings. The idea is to eventually offer greater customization on its menu while keeping orders easy to assemble for workers. Speed and accuracy have been an issue for McDonald's as it stepped up the pace of new menu items in the past year. In Europe, McDonald's said sales rose 1.4 percent at established locations in the latest quarter. The figure rose 0.8 percent in the unit that encompasses Asia, the Middle East and Africa, despite a decline in traffic. For the quarter ended March 31, net income fell to $1.2 billion, or $1.21 a share. Analysts expected $1.24 a share. A year ago, the company earned $1.27 billion, or $1.26 a share. McDonald's noted that the year-ago results were boosted by income tax benefits. Revenue edged up to $6.7 billion, but was shy of the $6.71 billion Wall Street expected.

5 Stocks Under $10 Ready to Explode

DELAFIELD, Wis. (Stockpickr) -- There isn't a day that goes by on Wall Street when certain stocks trading for $10 a share or less don't experience massive spikes higher. Traders savvy enough to follow the low-priced names and trade them with discipline and sound risk management are banking ridiculous coin on a regular basis.

>>5 Stocks Insiders Love Right Now

Just take a look at some of the hot movers in the under-$10 complex from Thursday, including BioFuel Energy (BIOF), which is ripping higher by 33%; LiveDeal (LIVE), which is soaring higher by 27%; SGOCO Group (SGOC), which is jumping to the upside by 17%; and GenVec (GNVC), which is moving higher by 7%. You don't even have to catch the entire move in lower-priced stocks such as these to make outsized returns when trading.

One low-priced stock that recently made a huge run after I featured it was technology solutions player Rambus (RMBS), which I highlighted in Feb. 20's "5 Stocks Under $10 Ready to Explode" at $1.27 per share. I mentioned in that piece that shares of Rambus of were starting to spike higher off its 50-day moving average at that time of $9.12 a share. That spike was beginning to push shares of RMBS within range of triggering a near-term breakout trade above some key overhead resistance levels at $9.73 to $9.81 a share.

Guess what happened? Shares of RMBS didn't wait long to trigger that breakout, since the stock busted out above those levels a few weeks later. This stock has gone on to make an incredible move higher even during the recent market decline, with shares of RMBS tagging an intraday high today of $12.50 a share. That represents a massive gain of well over 30% from the time I featured this stock. The best part about this move is the clean uptrend you'll see on the chart for RMBS as the stock marched higher over the last few months.

Low-priced stocks are something that I tweet about on a regular basis. I frequently flag high-probability setups, breakout candidates and low-priced stocks that are acting technically bullish. I like to hunt for low-priced stocks that are showing bullish price and volume trends, since that increases the probability of those stocks heading higher. These setups often produce monster moves higher in very short time frames.

>>5 Stocks Set to Soar on Bullish Earnings

When I trade under-$10 names, I do it almost entirely based off of the charts and technical analysis. I also like to find under-$10 names with a catalyst, but that's secondary to the chart and volume patterns.

With that in mind, here's a look at several under-$10 stocks that look poised to potentially trade higher from current levels.

FuelCell Energy


One under-$10 alternative energy player that's starting to move within range of triggering a big breakout trade is FuelCell Energy (FCEL), which designs, manufactures, sells, installs, operates and services stationary fuel cell power plants for distributed baseload power generation. This stock is off to a monster start so far in 2014, with shares up a whopping 70%.

If you take a glance at the chart for FuelCell Energy, you'll notice that this stock has pulled back sharply over the last month and change, with shares falling from its high of $4.74 to its recent low of $2.25 a share. During that downtrend, shares of FCEL have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of FCEL have formed a double bottom chart pattern at $2.29 to $2.25 a share over the last few weeks right above its 50-day moving average. Shares of FCEL are now starting to uptick a bit and trend within range of triggering a big breakout trade.

Traders should now look for long-biased trades in FCEL if it manages to break out above some near-term overhead resistance at $2.50 a share and then once it takes out more key overhead resistance levels at $2.81 to $2.94 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 24.26 million shares. If that breakout triggers soon, then FCEL will set up to re-test or possibly take out its next major overhead resistance levels at $3.25 to $3.75 a share.

Traders can look to buy FCEL off weakness to anticipate that breakout and simply use a stop that sits right below those double bottom support levels at $2.29 to $2.25 a share or right around $2 a share. One can also buy FCEL off strength once it starts to take out those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

Plug Power


Another under-$10 alternative energy player that's starting to trend within range of hitting a big breakout trade is Plug Power (PLUG), which is engaged in the design, development, manufacture and commercialization of fuel cell systems for the industrial off-road markets worldwide. This stock has been an absolute favorite play for the bulls in 2014, with shares up a whopping 368%.

If you take a look at the chart for Plug Power, you'll notice that this stock has been trending sideways and consolidating over the last month, with shares moving between $6.21 on the downside and $8.48 on the upside. That sideways trend has been occurring right above PLUG's 50-day moving average that's currently at $5.97 a share. Shares of PLUG are now starting spike higher and trend within range of triggering a big breakout trade above the upper-end of its recent sideways trading chart pattern.

Market players should now look for long-biased trades in PLUG if it manages to break out above some near-term overhead resistance levels at $7.70 to $8.10 a share and then once it takes out more key overhead resistance at $8.48 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 43.84 million shares. If that breakout materializes soon, then PLUG will set up to re-test or possibly take out its 52-week high at $11.72 a share.

Traders can look to buy PLUG off weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support at $6.53 a share or right below its 50-day moving average of $5.97 a share. One can also buy PLUG off strength once it starts to take out those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

Capstone Turbine


One under-$10 industrial electric equipment player that's starting to move within range of triggering a near-term breakout trade is Capstone Turbine (CPST), which engages in developing, manufacturing, marketing and servicing microturbine technology solutions for use in stationary distributed power generation applications worldwide. This stock is off to a hot start in 2014, with shares up sharply by 65%.

If you consult the chart for Capstone Turbine, you'll see that this stock recently pulled back off its 52-week high at $2.60 to its recent low of $1.91 a share. That low took shares of CPST right below its 50-day moving average and the stock has subsequently started to bounce higher back above that key technical level. Shares of CPST are now starting to uptick and move within range of triggering a near-term breakout trade.

Traders should now look for long-biased trades in CPST if it manages to break out above some near-term overhead resistance levels at $2.22 to $2.32 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 volume of 7.72 million shares. If that breakout gets underway soon, then CPST will set up to re-test or possibly take out its next major overhead resistance level at its 52-week high of $2.60 a share.

Traders can look to buy CPST off weakness to anticipate that breakout and simply use a stop that sits right below that recent low of $1.91 a share. One can also buy CPST off strength once it starts to smash above those key resistance levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

Harvest Natural Resources


Another under-$10 independent energy player that's starting to push within range of triggering a big breakout trade is Harvest Natural Resources (HNR), which engages in the acquisition, exploration, development, production and disposition of oil and natural gas properties. This stock has been hit by the sellers over the last six months, with shares off by 15.6%.

If you take a glance at the chart for Harvest Natural Resources, you'll notice this stock has just started to trend back above both its 50-day and 200-day moving averages, which is bullish technical price action. That trend is quickly starting to push shares of HNR within range of triggering a big breakout trade above some key near-term overhead resistance levels.

Market players should now look for long-biased trades in HNR if it manages to break out above some key near-term overhead resistance levels at $4.75 to $5 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 312,623 shares. If that breakout starts soon, then HNR will set up to re-test or possibly take out its next major overhead resistance levels $5.50 to its 52-week high at $6.08 a share. Any high-volume move above $6.08 will then give HNR a chance to tag $7 a share.

Traders can look to buy HNR off weakness to anticipate that breakout and simply use a stop that sits right below its 50-day at $4.20 a share or around $45 a share. One can also buy HNR off strength once it starts to clear those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

Gran Tierra Energy


One final under-$10 independent energy player that's starting to trend within range of triggering a big breakout trade is Gran Tierra Energy (GTE), which  is engaged in the acquisition, exploration, development and production of oil and gas properties in Colombia, Argentina, Peru and Brazil. This stock is up a bit so far in 2014, with shares higher by 4.9%.

If you take a look at the chart for Gran Tierra Energy, you'll notice that this stock have been uptrending over the last month and change, with shares moving higher from its low of $6.73 to its intraday high of $7.68 a share. During that move, shares of GTE have been making mostly higher lows and higher highs, which is bullish technical price action. Shares of GTE are starting to break out today above some near-term overhead resistance at $7.64 a share. That move is quickly pushing shares of GTE within range of triggering a much bigger breakout trade.

Traders should now look for long-biased trades in GTE if it manages to break out above some near-term overhead resistance levels at $7.73 to $7.88 a share and then once it clears its 52-week high at $8 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 981,956 shares. If that breakout kicks off soon, then GTE will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $10 to $11 a share.

Traders can look to buy GTE off weakness to anticipate that breakout and simply use a stop that sits just below its 50-day at $7.33 or its 200-day at $7.08 a share. One can also buy GTE off strength once it starts to take out those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

To see more hot under-$10 equities, check out the Stocks Under $10 Setting Up to Explode portfolio on Stockpickr.

-- Written by Roberto Pedone in Delafield, Wis.


RELATED LINKS:



>>Side-Step the Selling With These 5 Big Trades



>>3 Stocks Spiking on Unusual Volume



>>Want to Buy Apple? Think Again

Follow Stockpickr on Twitter and become a fan on Facebook.

At the time of publication, author had no positions in stocks mentioned.

Roberto Pedone, based out of Delafield, Wis., is an independent trader who focuses on technical analysis for small- and large-cap stocks, options, futures, commodities and currencies. Roberto studied international business at the Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany. His work has appeared on financial outlets including

CNBC.com and Forbes.com. You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zerosum24.


Monday, April 21, 2014

TGI Friday's accused of labor law violations

TGI Friday's, one of the nation's most popular casual dining chains, has been named in a class action lawsuit for systematically underpaying tipped workers.

Friday's requires tipped workers to arrive at work well before the start of customer service and to stay at work after the restaurant closes without receiving the minimum wages and overtime to which they are entitled, according to the suit filed by four former TGI Friday's workers from the New York metro area and Fredricksburg, Va.

"It is shameful for a big company to pay hard-working, low-wage restaurant workers less than they earned," says Justin M. Swartz, lead attorney for the firm Outten & Golden LLP.

While Swartz declined to specify a dollar amount for the lawsuit, he did state it's in the "million of dollars."

The lawsuit, which alleges violations of the federal Fair Labor Standards Act and the New York Labor Law against TGI Friday's and its parent company Carlson Restaurants, was filed on April 17, in New York federal court. It represents current and former servers, bussers, bartenders, hosts and other tipped workers at the chain that has about 540 domestic locations and 17,700 U.S. employees.

In response to the plaintiffs' claims, Friday's said in a statement e-mailed to USA TODAY: "TGI Fridays is aware of the claims being brought against the company. The company takes matters like these seriously and is currently assessing the situation to determine the facts.

"Beyond that, it is company policy not to comment on ongoing or pending litigation," said the statement, via Quinton Crenshaw, senior director of communications at TGI Fridays.

The lawsuit also accuses restaurant management of using a centralized time-keeping system to "shave" hours from employee time records and allowing employees to work "off-the-clock" performing non-tip producing side work including cleaning the restaurant and preparing food in bulk for customers.

Hot Integrated Utility Stocks To Buy Right Now

The lawsuit seeks to recover minimum wages, overtime compensation, misappropriated tips, unlawful deductions and other wages from current and former Friday's workers.

"We believe employees at many hundreds of TGI Friday's restaurants were affected by the company's practices," says Brian Schaffer, an attorney at Fitapelli & Schaffer, which also represents the employees. "We allege the labor violations occurred through manipulation of the restaurant chain's sophisticated timekeeping system, which is capable of tracking multiple job codes for different work assignment, and pressure by restaurant managers."

Top High Dividend Stocks To Own For 2015

A recent article on Benzinga detailed how to use sniper tactics to buy stocks when the dividend yields are higher.

The method involved setting a dividend yield as the target, and then buying at that price. From that, the stock has a lower price and a higher dividend yield.

There are many blue chip stocks with high dividends and high betas such as BP PLC (NYSE: BP), the major oil firm, and Caterpillar (NYSE: CAT) -- the world's largest heavy equipment maker and a member of the Dow Jones Industrial Average.

Another one to consider is Cohen & Steers Inc (NYSE: CNS), an asset manager based in New York City.

Top High Dividend Stocks To Own For 2015: Destination Maternity Corporation(DEST)

Destination Maternity Corporation engages in the design and retail of maternity apparel. It offers casual and career wear, formal attire, lingerie, sportswear, and outerwear. As of September 30, 2011, the company operated 2,352 retail locations, including 658 stores in 50 states of the United States (U.S.), Puerto Rico, Guam, and Canada; and 1,694 leased departments located within department stores and baby specialty stores in the U.S. and Puerto Rico. It operates stores under the Motherhood Maternity, A Pea in the Pod, and Destination Maternity names. Motherhood Maternity brand serves the value-priced portion of the maternity apparel business with stores located in regional malls, strip and power centers, and central business districts. A Pea in the Pod brand serves the medium-priced and luxury portion of the maternity apparel business with stores located in regional malls, lifestyle centers, central business districts, and stand-alone stores. Destination Maternity brand provides Motherhood and Pea merchandise with stores located in regional malls and lifestyle centers. The company also sells its merchandise on the Internet through DestinationMaternity.com and brand-specific Web sites. In addition, Destination Maternity Corporation offers Two Hearts Maternity by Destination Maternity collection at Sears stores in the U.S. through a leased department relationship. Further, the company distributes its Oh Baby by Motherhood collection through a license arrangement at Kohl?s stores in the U.S. and through Kohls.com. Additionally, it had 66 international franchised locations comprised of 15 stand-alone stores in the Middle East and South Korea under the Destination Maternity name; and 51 shop-in-shop locations in India and South Korea. The company was formerly known as Mothers Work, Inc. and changed its name to Destination Maternity Corporation in December 2008. Destination Maternity Corporation was founded in 1980 and is headquartered in Philad elphia, Pennsylvania.

Advisors' Opinion:
  • [By Marc Bastow]

    Maternity apparel designer and retailer Destination Maternity (DEST) raised its quarterly dividend 6.7% to 20 cents per share, payable on Mar. 28 to shareholders of record as of Mar 7.
    DEST Dividend Yield: 2.96%

Top High Dividend Stocks To Own For 2015: VizStar Inc (VIZS)

VizStar, Inc. (VizStar), formerly Easy CD Yearbook, Inc., incorporated on June 27, 2006, is a development-stage company. The Company focuses to market software, which enables schools, clubs and organizations to produce their own multimedia yearbook. On June 11, 2010, Celestial Jets, Inc. (Celestial Jets) merged with the Company. Celestial Jets merged (the merger) with and into the Company�� wholly owned subsidiary, Celestial Acquisition Corp. Upon the merger, the name of Celestial Acquisition Corp. became Celestial Jets, Inc. In December 2012, the Company acquired Kimberly Parry Corporation.

A multimedia yearbook is a compact disc (CD)/ digital versatile disc (DVD), which contains video, photos, audio and text that is personal computer (PC) and Mac compatible. As of May 31, 2010, the Company had no revenues.

The Company competes with Yeardisk, Digital Journey LLC and Interactive Software Designs.

Advisors' Opinion:
  • [By Peter Graham]

    Small cap stocks VizStar Inc (OTCMKTS: VIZS), SOHM Inc (OTCMKTS: SHMN) and American Soil Technologies, Inc (OTCMKTS: SOYL) have been getting some attention in various investment newsletters with two out of three of these stocks being the subject of paid promotions. However, there is nothing wrong with some paid for attention so long as everything is properly disclosed, but its going to be up to investors and traders alike to ultimately decide whether any of these stocks have what it takes to be the next hot stock. With that in mind, here is a quick reality check about all three small cap stocks:

Top 10 Construction Material Companies To Own In Right Now: S.Y. Bancorp Inc.(SYBT)

S.Y. Bancorp, Inc. operates as the bank holding company for Stock Yards Bank & Trust Company that provides commercial and personal banking services in Louisville, Kentucky; southern Indiana and Indianapolis, Indiana; and Cincinnati, Ohio. Its deposits consist of non-interest and interest bearing demand deposits, savings deposits, certificates of deposit, individual retirement accounts, money market deposits, and time deposits. The company provides various secured loans, including commercial lines of credit, commercial term loans, real estate, construction, home equity, and consumer loans. It also offers wealth management services, including investment management, trust and estate administration, retirement planning, and financial planning services; securities brokerage services; and life insurance products, as well as originates and sells single-family residential mortgages. As of December 31, 2010, the company had 25 full service banking locations in the Louisville MSA, 2 full service banking locations in Indianapolis, and 3 full service banking locations in Cincinnati. S.Y. Bancorp, Inc. was founded in 1904 and is headquartered in Louisville, Kentucky.

Advisors' Opinion:
  • [By Marc Bastow]

    Louisville-based bank holding company S.Y. Bancorp (SYBT) raised its quarterly dividend 5% to 21 cents per share, payable on Dec. 31 to shareholders of record as of Dec. 9.
    SYBT Dividend Yield: 2.71%

Top High Dividend Stocks To Own For 2015: Steamships Trading Company Ltd(PNG)

Steamships Trading Company Limited operates as a diverse trading conglomerate in Papua New Guinea. It involves in shipping, road transport, product manufacture, property, hotels, and information technology businesses. The company?s shipping business includes operation of a fleet of coastal vessels, and providing estuarine and river trades in the Gulf and Western Provinces; short and long term vessel charters, and cargo liner services using vessels ranging from 500DWT to 6000DWT; and stevedoring and shipping agency services. Its road transport business comprises general transport, fuel distribution, and long haul transport services; and customs clearance, handling equipment hire, integrated logistics, and specialist transportation services. Steamships Trading Company?s product manufacture business includes the production and distribution of food stuff comprising ice cream, vegetable oils, condiments, and seasonings; health and beauty goods; and spirits and premixed drinks , as well as involves in distributing imported wines and spirits. Its property business comprises residential, commercial, and industrial property development and leasing activities. The company?s hotel business engages in operating hotels. Its information technology business provides business-critical ICT consulting, solutions and services, IT outsourcing, business process outsourcing, Internet services, electronics and computer retail, and training and wide-ranging technical support. The company was founded in 1924 and is based in Port Moresby, Papua New Guinea. Steamships Trading Company Limited is a subsidiary of John Swire & Sons (PNG) Limited.

Advisors' Opinion:
  • [By Aaron Levitt]

    And more could be in store. PAA has just agreed to swallow its former natural gas storage spinoff PAA Natural Gas Storage (PNG) in a $1.41 billion deal that will instantly be accretive to PAA shareholders. Meanwhile, Plains continues to build new capacity and crude-by-rail services in key refining markets like California.

  • [By Jon C. Ogg]

    Plains All American Pipeline L.P. (NYSE: PAA) was maintained as Outperform with a $64 price target (versus $51.44 current) after its announced acquisition of affiliated PAA Natural Gas Storage L.P. (NYSE: PNG) in an all-stock buyout.

Top High Dividend Stocks To Own For 2015: CommVault Systems Inc. (CVLT)

CommVault Systems, Inc., together with its subsidiaries, provides data and information management software applications and related services primarily in North America, Europe, Australia, and Asia. The company develops, markets, and sells a suite of software applications and services under the Simpana brand. Its Simpana software suite includes solution for the backup and restoration of enterprise data for file systems, applications, databases, and virtual machine systems; integrated data archiving solution that optimizes data tiering and improves information governance; and enterprise-wide storage optimization for email and files reducing space on primary storage. The company also provides solutions for protection of critical applications and data with snapshots and real-time replication; solutions to analyze, discover, track, trend, and report on physical and virtual storage usage; and Web browser, which allows search, sort, select, and retrieval of corporate files and in formation from online, archive, and backup data copies. In addition, it offers assessment and design, implementation and post-deployment, training, consulting, and customer support services. The company markets and sells its software applications and related services directly to large enterprises, small and medium sized businesses, and government agencies, as well as indirectly through a network of value-added reseller partners, systems integrators, corporate resellers, and original equipment manufacturers. It licenses its software applications to customers in various industries, including banking, insurance and financial services, government, healthcare, pharmaceuticals and medical services, technology, legal, manufacturing, utilities, and energy. The company has strategic relationships with Dell, Inc.; Hitachi Data Systems; and NetApp. CommVault Systems, Inc. was incorporated in 1996 and is headquartered in Oceanport, New Jersey.

Advisors' Opinion:
  • [By Seth Jayson]

    Calling all cash flows
    When you are trying to buy the market's best stocks, it's worth checking up on your companies' free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That's what we do with this series. Today, we're checking in on CommVault Systems (Nasdaq: CVLT  ) , whose recent revenue and earnings are plotted below.

  • [By Lee Jackson]

    CommVault Systems Inc. (NASDAQ: CVLT) announced last week the industry’s first virtual machine (VM) intelligent archiving capability to help enterprises and service providers eliminate VM sprawl and regain control of virtual infrastructure resources. VM sprawl results from pervasive deployment and growth of virtual machines, some of which then sit unutilized long after their useful lives. The consensus price target for this intriguing mid cap name is $88.50.

  • [By Alex Planes]

    What: Shares of CommVault Systems (NASDAQ: CVLT  ) were up by as much as 13% at the start of trading this morning after the company reported earnings that beat expectations. However, the stock has been sliding lower all morning, and has now returned to the same level it reached at the close of trading yesterday.

Top High Dividend Stocks To Own For 2015: Asanko Gold Inc (AKG)

Asanko Gold Inc., incorporated on September 23, 1999, is a natural resource company engaged in the acquisition and exploration of mineral resources in West Ghana. Its mineral properties are in the exploration and development stage. Its primary property is the Esaase project. The Company is focused on advancing the Esaase Gold Project to commercial production. In addition to its principal project, the Company holds a portfolio of other Ghanaian gold concessions in various stages of exploration. As of February 28, 2014, the Company�� material properties consisted of the Asanko Gold Mine project, the Asumura Property and the Diaso Property, all in West Ghana, Africa. In February 2014, Asanko Gold Inc successfully completed the acquisition of PMI Gold Corporation.

Asanko Gold Mine Property

The Asanko Gold Mine Property is a development stage property located in the Amansi East District of Ghana, approximately 35 kilometers south west of the regional capital Kumasi. The property comprises the Nkran pit, the Adubiaso pit, the Dynamite Hill deposit, the Asuadai deposit, the Abore pit and the Esaase deposit. The Property has gold resources of approximately 7.52 million ounces and gold reserves of approximately 4.81 million ounces.

The Asumura Property

The Asumura Property is without known resources or reserves and the work being done by the Company is exploratory in nature. The Asumura Property is located in the south-western part of Ghana and is divided into two parts by the Bia River. The western part of the property is within the Western Region of Ghana in the Juabeso Bia District and the eastern part is in the Brong Ahafo Region of Ghana. The Asumura Property consists of two exploration concessions: Fosukrom and Asumura, which together equal 279.4 square kilometers.

Advisors' Opinion:
  • [By MONEYMORNING]

    As well, Primero Mining (NYSE: PPP) bought Brigus Gold Corp (USA)(NYSE: BRD) for $220 million, and Asanko Gold (NYSEMKT: AKG) is acquiring PMI Gold Corporation (TSE: PMV).

Top High Dividend Stocks To Own For 2015: The Children's Place Retail Stores Inc.(PLCE)

The Children's Place Retail Stores, Inc. operates as a children's specialty apparel retailer in North America. It provides apparel, accessories, and shoes for children from newborn to 10 years of age. The company designs, contracts to manufacture, and sells merchandise under The Children's Place brand name. It serves the wardrobe needs of girls and boys, baby girls and boys, and newborn. As of January 28, 2012, the company operated 1,049 The Children's Place stores, including 732 stores located in malls, 140 in strip centers, 135 in outlet centers, and 42 street stores; and an Internet store at childrensplace.com. The Children's Place Retail Stores, Inc. was founded in 1969 and is based in Secaucus, New Jersey.

Advisors' Opinion:
  • [By Seth Jayson]

    Calling all cash flows
    When you are trying to buy the market's best stocks, it's worth checking up on your companies' free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That's what we do with this series. Today, we're checking in on Children's Place Retail Stores (Nasdaq: PLCE  ) , whose recent revenue and earnings are plotted below.

Top High Dividend Stocks To Own For 2015: GUESS? Inc (GES)

Guess?, Inc. (GUESS?) designs, markets, distributes and licenses apparel and accessories for men, women and children. The Company operates in five: Europe, North American Retail, Asia, North American Wholesale and Licensing. The Company�� products are sold through retail, wholesale, e-commerce and licensing distribution channels. The lines include full collections of clothing, including jeans, pants, skirts, dresses, shorts, blouses, shirts, jackets, knitwear and intimate apparel. It also grant licenses to manufactures and distributes a range of products, including eyewear, watches, handbags, footwear, kids' and infants' apparel, leather apparel, swimwear, fragrance, jewelry and other fashion accessories. In fiscal 2012, the Company, along with its distributors and licensees, opened 224 stores in all concepts combined outside of the United Sates and Canada, which consisted of 120 stores in Europe and the Middle East, 89 stores in Asia and 15 stores in the combined area of Central and South America.

As of January 28, 2012, the Company directly operated a total of 504 stores in the United Sates and Canada and 251 stores outside of the United Sates and Canada, and in addition, 230 smaller-sized concessions in Asia and Europe. As of January 28, 2012, its international licensees and distributors operated 804 stores located outside the United Sates and Canada, and 119 smaller-sized licensee operated concessions located in Asia. As of January 28, 2012, it operated retail Websites in the United Sates, Canada, Europe and South Korea. As of January 28, 2012, it had e-commerce available to 26 countries, and in 6 languages around the world. The Company and its network of licensee partners sell its products around the world primarily through six different store concepts, namely its flagship GUESS? retail stores, its GUESS? factory outlet stores, its GUESS by MARCIANO stores, its G by GUESS stores, its GUESS? Accessories stores and its GUESS? Kids stores. The Company also has a small number of footwe! ar, Gc watch and underwear concept stores.

Europe Segment

In the Company�� Europe segment, GUESS? sells its products in 63 countries throughout Europe and the Middle East through wholesale, retail and e-commerce channels. In fiscal 2012, its Europe segment accounted for approximately 37.6% of its revenues. The Company�� European wholesale business generally relies on a large number of smaller regional distributors and agents to distribute its products primarily to smaller independent multi-brand boutiques. The Company�� products are also sold directly to department stores like Galeries Lafayette, Printemps and El Corte Ingles. As of January 28, 2012, GUESS? had showrooms in Barcelona, Dusseldorf, Munich, London, Paris, Florence and Lugano. It sells both its apparel and certain accessories products under the Company�� GUESS? and GUESS by MARCIANO brand concepts through its wholesale channel, operating primarily through two seasons, Spring/Summer and Fall/Winter.

The Company�� European retail network consists of a mix of directly operated and licensee operated GUESS? and GUESS by MARCIANO retail and outlet stores, GUESS? Accessories stores, GUESS? Footwear stores and GUESS? Kids stores. As of January 28, 2012, it had 179 directly operated stores and 382 licensee stores, excluding 17 smaller-sized concessions in Europe. During fiscal 2012, the Company opened 45 new directly operated stores, 75 licensee stores and 5 concessions. The Company�� GUESS? Accessories stores average approximately 800 square feet, GUESS by MARCIANO stores average approximately 1,300 square feet and full-price GUESS? stores generally average 2,300 square feet.

North American Retail Segment

In the Company�� North American Retail segment, it sells its products through a network of directly operated retail and factory outlet stores in North America and through its on-line stores. In fiscal 2012, the Company�� North American Retail segment accounted for ap! proximate! ly 41.6% of its revenue. As of January 28, 2012, it also directly operated 25 GUESS? branded stores in Mexico through a majority-owned joint venture. The Company�� the United Sates and Canada GUESS? retail stores carry an assortment of men's and women's GUESS? merchandise, including most of its licensed product categories. As of January 28, 2012, these stores occupied approximately 1,025,000 square feet and ranged in size from approximately 2,500 to 13,500 square feet, with most stores between 4,000 and 6,000 square feet. In fiscal 2012, it opened nine new retail stores and GUESS? closed four stores.

The Company�� the United Sates and Canada factory outlet stores are located primarily in outlet malls generally operating outside the shopping radius of its wholesale customers and its retail stores. These stores sell selected styles of men's and women's GUESS? apparel and licensed products. As of January 28, 2012, its the United Sates and Canada factory outlet stores occupied approximately 717,000 square feet and ranged in size from approximately 2,000 to 11,000 square feet, with most stores between 4,500 and 6,500 square feet. In fiscal 2012, it opened 10 new factory stores. The Company�� G by GUESS store carries apparel for both men and women and a line of accessories and footwear. As of January 28, 2012, its G by GUESS stores occupied approximately 317,000 square feet and ranged in size from approximately 4,000 to 10,000 square feet, with most stores between 4,000 and 5,500 square feet. In fiscal 2012, the Company opened 12 new G by GUESS stores and it closed three stores.Its GUESS? Accessories store concept sells GUESS? and GUESS by MARCIANO labeled accessory products.

As of January 28, 2012, the Company�� GUESS? Accessories concept stores occupied approximately 122,000 square feet and ranged in size from approximately 1,000 to 4,000 square feet, with most stores between 1,500 and 2,500 square feet. In fiscal 2012, GUESS? opened four new GUESS? Accessories stores and i! t closed ! three stores. The Company�� GUESS by MARCIANO stores in the United Sates and Canada offer a women's collection designed for the stylish, trend-setting woman. As of January 28, 2012, its GUESS by MARCIANO stores occupied approximately 156,000 square feet and ranged in size from approximately 2,000 to 6,500 square feet, with most stores between 2,000 and 3,000 square feet. In fiscal 2012, it opened two new GUESS by MARCIANO stores and the Company closed four stores. The Company�� North American Retail segment also includes its the United Sates and Canada retail Websites, including www.guess.com, www.gbyguess.com, www.guessbymarciano.com, www.guesskids.com, www.guess.ca and www.guessbymarciano.ca. These Websites operates as virtual storefronts that both sell its products and promotes its brands.

Asia Segment

In the Company�� Asia segment, GUESS? sells its products through wholesale, retail and e-commerce channels throughout Asia. In fiscal 2012, its Asia segment accounted for approximately 9.3% of its revenue. Its Asia retail business includes both licensee and the Company operated stores, including GUESS?, G by GUESS, GUESS by MARCIANO, Gc, GUESS? Accessories and GUESS? Underwear stores. During fiscal 2012, it and its partners opened 89 new stores in Asia, as of January 28, 2012, it had 423 stores, 47 of which it operated directly and 376 of which were operated by licensees or distributors. The Company and its partners opened flagship stores in cities, such as Seoul, Shanghai, Hong Kong, Macau, Taipei and Beijing and have partnered with licensees to develop its business in the second tier cities in this region.

North American Wholesale Segment

In the Company�� North American Wholesale segment, it sells its products through wholesale channels in North America and to third party distributors based in Central and South America. In fiscal 2012, its North American Wholesale segment accounted for approximately 7.0% of its revenue. As of January 28, 20! 12, its p! roducts were sold to consumers through 1,005 major doors in the United Sates and Canada. These locations include 345 shop-in-shops, a selling area within a department store that offers an array of its products and incorporates GUESS? signage and fixture designs. The Company has sales representatives in New York, Los Angeles, Toronto, Montreal and Vancouver. During fiscal 2012, Macy's, Inc. was its largest domestic wholesale customer, accounting for approximately 2.7% of its consolidated net revenue.

Licensing Segment

The Company�� licensing segment includes the worldwide licensing operations of the Company. In fiscal 2012, its licensing segment royalties accounted for approximately 4.5% of its revenue. As of January 28, 2012, GUESS? had 19 domestic and international licenses that included eyewear, watches, handbags, footwear, kids' and infants' apparel, leather outerwear, fragrance, jewelry and other fashion accessories; and included licenses for the manufacture of GUESS? branded products in markets, which include Africa, Asia, Australia, Europe, the Middle East, Central America, North America and South America.

Advisors' Opinion:
  • [By John Kell and Tess Stynes var popups = dojo.query(".socialByline .popC"); p]

    Among the companies expected to actively trade in Thursday’s session are Burlington Stores Inc.(BURL), ConAgra Foods Inc.(CAG) and Guess Inc.(GES)

  • [By Andrew Marder]

    Just last week, Guess? (NYSE: GES  ) won a long legal battle with high-end designer Gucci, over the use of the letter G in Italy. The court ruled that Gucci could not stop Guess? from using the letter to brand its merchandise in Italy, and that the letter was not an intrusion on Gucci's double-G logo. While Guess? executives are surely happy to have the four-year-old case done with -- although other cases continue in France and China -- the victory isn't going to stop Guess? from struggling.

  • [By Sue Chang]

    After Wednesday�� closing bell, Guess Inc. (GES) �said its fourth-quarter profit fell to $69.6 million, or 82 cents a share, from $72.5 million, or 85 cents a share, a year ago. Revenue also declined to $768.4 million from $815.1 million. Analysts surveyed by FactSet had expected Guess to earn 78 cents a share. The Los Angeles-based apparel retailer said it expects to report a first-quarter loss of between 5 cents and 9 cents a share. Shares of Guess tumbled 6.9% in after-hours trading.

Top High Dividend Stocks To Own For 2015: Exterran Holdings Inc. (EXH)

Exterran Holdings, Inc., together with its subsidiaries, provides operations, maintenance, service, and equipment for oil and natural gas production, processing, and transportation applications. The company�s Contract Operations segment offers natural gas compression and production, and processing services, as well as engages in the engineering, procurement, and on site construction of natural gas compression stations and/or crude oil or natural gas production and processing facilities. As of December 31, 2011, this segment provided contract operations services primarily using a fleet of 8,485 natural gas compression units with an aggregate capacity of approximately 3,632,000 horsepower in North America; and a fleet of 1,063 units with an aggregate capacity of approximately 1,260,000 horsepower internationally. Its Aftermarket Services segment sells parts and components; and provides operation, maintenance, overhaul, and reconfiguration services for compression, productio n, treating, and oilfield power generation equipment. The company�s Fabrication segment engages in the design, engineering, installation, fabrication, and sale of natural gas compression units, and accessories and equipment used in the production, treatment, and processing of crude oil and natural gas; provision of engineering, procurement, and fabrication services primarily related to the manufacturing of critical process equipment for refinery and petrochemical facilities; and fabrication of tank farms, and evaporators and brine heaters for desalination plants. Its products include line heaters, oil and natural gas separators, glycol dehydration units, condensate stabilizers, dewpoint control plants, water treatment, mechanical refrigeration and cryogenic plants, and skid-mounted production packages designed for onshore and offshore production facilities. The company was founded in 1990 and is based in Houston, Texas.

Advisors' Opinion:
  • [By Seth Jayson]

    Exterran Holdings (NYSE: EXH  ) is expected to report Q1 earnings on May 2. Here's what Wall Street wants to see:

    The 10-second takeaway
    Comparing the upcoming quarter to the prior-year quarter, average analyst estimates predict Exterran Holdings's revenues will grow 21.6% and EPS will turn positive

  • [By Ryan Lowery]

    All natural
    An obvious place to start is coal's biggest competitor, natural gas. For a while now, I've been a fan of the natural gas compression company, Exterran Holdings (NYSE: EXH  ) , which provides operations, maintenance, service, and equipment for both oil and natural gas production. Exterran's stock has had a steady climb the last couple of years -- it's up over 40% this year alone. The majority of analysts are calling Exterran a hold, but several rate it a buy or even a strong buy. Currently, Exterran is trading in the upper $20 range, and with a price target of $33, it still seems to have some upside. And for those interested in investing in master limited partnerships, Exterran operates an MLP as well, Exterran Partners (NASDAQ: EXLP  ) , which has seen a 33% gain in its price this year.

Why Zynga Shares Zoomed Again

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

What: Shares of social game developer Zynga (NASDAQ: ZNGA  ) popped 10% today on continued optimism over its recent CEO shuffle.  

So what: The stock jumped yesterday after Zynga tapped Don Mattrick, president of Microsoft's Interactive Entertainment Business, as its new CEO, so the ongoing rally suggests that the move might be a real turning point for the beleaguered company. Of course, former CEO Mark Pincus -- who founded Zynga in 2007 -- will remain chairman and continue to own a controlling stake in the company, so there's still plenty of uncertainty over how much operating room Mattrick will actually have. 

Now what: I'd expect the stock to keep rallying in the short run. "I joined Zynga because I believe that Mark's pioneering vision and mission to connect the world through games is just getting started," said Mattrick in a statement. "Zynga is a great business that has yet to realize its full potential." Of course, when you consider the worrisome trends -- rapidly declining users and increasing competition -- that Mattrick now faces, I'd be cautious about buying into that long-term bullishness.   

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