How Behavioral Finance Can Help Bond Investors

The principles of behavioral finance have been applied extensively to the equity markets, and many financial advisors make good use of them now. But what about applying behavioral finance to better understand and navigate the fixed income market?

To date, the bond market hasn’t really been studied from a behavioral perspective, said Zach Jonson, director of fund management at ICON Advisers, because the majority of investors have tended to be larger, buy-and-hold type players who don’t really exhibit the same behavioral tendencies as equity investors. But since the 2008 financial crisis, market dynamics have done an about-face that’s resulted in an increasing number of nontraditional investors gravitating toward the bond market — and they, Jonson said, are exhibiting the same kinds of behavioral biases vis-à-vis bonds as toward equities.

“Between the full-blown fear after all that took place and the 24-hour news cycle, what we saw was basically the self-fulfilling prophecy of everyone running to the same spot,” Jonson said. “This drove massive amounts of liquidity into bonds.”

Since 2007, more than $1.3 billon has flowed into bonds, and this in turn spurred record levels of corporate bond issuance in the United States. Furthermore, Jonson said, the proliferation of bond ETFs, as well as the general focus on income creation for retirement have also supported the increased cash going into bonds.

However, because this rush of liquidity into bonds is so new, both financial advisors and their clients continue to view the fixed income market through a very narrow lens, Jonson said: namely the direction of interest rates. This focus in turn engenders certain behavioral tendencies that then impact the market and result in different kinds of inefficiencies.

As a result, Jonson believes that the bond market, like its equity counterpart, is a victim of such classic behavioral traits as loss aversion, belief perseverance and herd mentality.  

Loss aversion, a bias in which investors prefer to avoid losses to acquiring gains, can lead investors to place greater importance on the short-term and less on the long-term. According to Jonson, it has had a major impact on the bond market in the past years, affecting everything from U.S. Treasuries—which he said sold based on concerns about spikes in interest rates and increased volatility—to bond mutual funds, which sold based on short-term concerns as opposed to the long-term, diversification benefits they offer.

Ditto for herd behavior, where individuals come to a similar conclusion or act in a similar manner with the desire to achieve the same results. In so doing, though, they make the same mistakes, Jonson said, and just as it does in the equity market, their behavior creates inefficiencies and volatility in the bond market.

“Historically, the buy-and-hold nature of bond market investors shielded the market from the same kind of behavioral reactions that affected the equity markets,” Jonson said, “but now, the market has undergone a transition, and what’s required is a change of mentality in the way that advisors navigate the bond market and manage fixed income for their clients.”

That means advisors, investors and fund managers too, should be able to leverage behavioral patterns to their advantage in order to “become bond managers in equity clothes,” Jonson said.

He believes that bond allocations should be much more actively and tactically managed and that financial advisors should be looking much more carefully at fixed income managers to better understand their strategies and approach to the market. Advisors should choose to invest with those managers who are willing to “move around the market” and look at it from the bottom up rather than the top down.

“Our general belief is that money will continue to go into bonds because we think interest rates will remain low,” Jonson said. “So many bond investors are interest rate forecasters, but it’s individual security analysis that can actually beat the market, and taking advantage of behaviors will be the best way to find the points to get in and get out of the market.”

In this “new” bond market, the more tactical fund managers will fare better, Jonson said, and advisors who do the legwork to seek them out will be able to create better bond portfolios for their clients.

---

Check out Applying Behavioral Analytics to Fund Managers on ThinkAdvisor.

Art, antiques investing is for the long haul

Most investments these days exist only as the ones and zeroes of computer code.

You can't get a bond or old-fashioned stock certificate in paper form even if you want one. But art and antiques—now there are two tangible, physical investments that also can grace your home. And if you have a good eye and a long enough holding period, you might actually make some real money.

A few lucky, inadvertent investors may discover a rare armoire in a grandparent's attic or buy a painting when they're young—just because they like it, finding out only years later that the artist got hot.

But what about true investing, as opposed to happenstance? Could you go about buying art or antiques the way you would invest in an exchange-traded fund or real-estate investment trust? Is there significant money to be made?

"Both art and antiques are great investments for people who have money they want to put aside long term," said Kevin Yardumian, a collector of 19th century art and partner with accounting and business advisory firm Gumbiner Savett.

These investments are, however, very illiquid, he cautioned. "You are not going to buy, and then sell, next week."

Despite the long holding periods, art investing is not exclusively for the rich, said Michael Moses, a retired New York University business professor and founder of Beautiful Asset Advisors.

"Our research has shown over the years that art is this wonderful asset class, in the sense that there's a painting for every purse," he said.

Moses added that "low-priced art tends to outperform high-priced art."

A person with a $500,000 investment portfolio might consider putting 10% to 20% into illiquid assets, according to Moses. But art and antiques should be only part of that 20%, he noted.

If an investor is going to spend more on the painting hanging over their couch than they did on the couch itself, "then they should do a little research," Moses said.

Moses is co-creator of the Mei Moses family of fine art in! dexes of art values, which are modeled after the well-known Standard & Poor's/Case-Shiller home price indices of home values.

The art indexes track the prices of individual works sold at auction more than once, for a true "apples to apples" comparison over time. The indexes show that art values rise at about the same rate as stocks.

"The returns of our World All Art Index the past 60 years are slightly below the returns of the S&P 500," Moses said.

So, why invest in art or antiques when putting money into an S&P 500 fund is so easy? There are several reasons, according to Moses and Yardumian.

As with stocks, an individual antique or work of art could perform far better than average. And the Mei Moses indexes show that art prices are, to use investing lingo, highly "non-correlated" to stock prices. So, when your stocks are down, your art might be up, helping to reduce volatility in your overall investment portfolio.

Finally, and most importantly, art and antiques investing can be an awful lot of fun. You might not get much day-to-day enjoyment out of your Dow ETF, but a painting on the wall can please every time you look at it. In addition, the hunt for promising works to invest in can be very exciting.

Much of this is true of antiques, as well, but there is no similar index of their values, according to Moses. Because most antiques sales are conducted through private dealers, he explained, it's too hard to find public sources of concentrated data for meaningful price comparisons over time.

As any viewer of TV's "Antiques Roadshow" knows, the value of antiques can rise over time, as specific craftsmen, styles or periods become popular.

But while an antique individual dresser or chest might soar in value, a virtually identical one might not, because someone refinished it or changed the hardware. Because each antique or work of art is unique, prices fluctuate wildly. This creates both opportunities and hazards for investors.

"Art, like real ! estate, i! s a heterogeneous good," Moses said. "Every object is different."

Yardumian concurred.

"You can get two people who really want something and they will pay an astronomical price," he said. "And then you get someone who really needs to unload something and there's only one buyer."

Both experts agreed that investors in antiques or art need to start with an appreciation of the objects, not a desperate need to make money.

People who become investors—actively seeking works for their potential returns—almost always start out as collectors simply buying works they admire.

"I'll give them the pros and cons," said Yardumian, describing his approach with clients interested in art. "I'll talk to them about the nature of investing in art, [which is] significantly different … than investing in real estate, stocks or bonds or mutual funds."

Art and antiques do not provide the steady income one might earn from stock dividends, bond coupons or rent on property, he noted. So money put into art and antiques is truly tied up.

"There also is no intrinsic value to a work of art," he added.

The paint, canvas and frame used, for instance, don't add to a painting's value. And you can't break an artwork or antique into its components for analysis, the way you can look at a public company's factories, fleets, cash flow and patents.

Collecting art or antiques also means shouldering costs for insurance, expert authentication, shipping and storage in proper conditions of heat, humidity and sunlight—expenses you don't incur with stocks and bonds.

And buying and selling artwork or antiques can entail commissions and markups that can range from 10% to 25% of the work's sales price, Yardumian said. All these expenses chew into returns.

Illiquidity makes art and antiques more akin to real estate than securities. It can easily take six months or more to get a fine painting or sculpture on the auction block, according to Moses.

And the pace of price gains is un! predictab! le.

"You have to have the stomach to just leave the money there," Yardumian said, pointing out that investors should not invest in art or antiques with funds needed for college expenses, retirement or any other purpose with a deadline.

"You would not put money into art that you need to maintain your lifestyle," he advised.

So, what's hot today?

With antiques, it's really impossible to generalize because the market is so fragmented. With art, post-World War II contemporary paintings and Chinese works have been doing well for some time, Moses said.

"New money tends to follow new art," Moses added. Chinese art is rising because newly wealthy Chinese collectors are repatriating works collected in the West over the past century.

If you want to invest in art, Yardumian advises first selecting an area to focus on.

"Find something that you're interested in. It doesn't have to be a lifelong passion," he said. Instead of "just buying a bunch of art, somebody might focus on 20th century modern masters," Yardumian said.

"Then, you should really find somebody who's an expert in that area and can put you in touch with people who can source that kind of art," he said.

And don't mortgage the house to pay for this. Until you're an expert yourself, limit the budget to money you can afford to lose.

CNBC is a USA TODAY content partner offering financial news and commentary. Its content is produced independently of USA TODAY.

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Hot Restaurant Companies To Buy For 2015

Hot Restaurant Companies To Buy For 2015: Ignite Restaurant Group Inc (IRG)

Ignite Restaurant Group, Inc., incorporated on February 4, 2002, operates two restaurant brands, Joe's Crab Shack (Joe's) and Brick House Tavern + Tap (Brick House). The Company's Joe's Crab Shack and Brick House Tavern + Tap operate in a diverse set of markets across the United States. Joe's Crab Shack is a national chain of casual seafood restaurants serving a variety of seafood items, with an emphasis on crab. Brick House Tavern + Tap is a casual restaurant brand that provides guests a gastro pub experience by offering a blend of menu items. As of December 31, 2012, the Company owned and operated 144 restaurants in 33 states. In September 2013, Ignite Restaurant Group Inc announced the opening of its newest Joe's Crab Shack restaurant, located in Newark, New Jersey.

Joe's Crab Shack

The Company's Joe's Crab Shack offers an outdoor patio for guests to enjoy eating and drinking and a children's playground. Joe's also has many locatio ns that are located on waterfront property. Interior design elements include a nautical, vacation theme to invoke memories of beach vacations and a genuine crab shack experience. Joe's Crab Shack restaurants have over 200 seats. Many of the Company's restaurants also include a small gift shop where guests can purchase souvenirs to commemorate their dining experience. Joe's Crab Shack also leverages its crab-forward menu with other crab items, including Made-From-Scratch Crab Cakes, Crab Nachos and Crazy-Good Crab Dip. In addition to its core crab-focused menu, Joe's also offers a range of entrees featuring a variety of seafood, including the Get Stuffed Snapper, Surf 'N Turf Burger and The Big Hook Up, as well as a range of traditional seafood entrees like the Fisherman's Platter. Joe's also offers several out of water options, such as Pan Fried Cheesy Chick! en and Whiskey Smoked Ribs. In addition, alcoholic beverages include the Shark Bite, Category 5 Hurricane and Mason J ar cocktails emerging as guests' top choices. Joe's menu inc! ludes more than 29 items made with either Queen, Snow, Dungeness or King Crabs sourced from government regulated and sustainable fisheries. Its menu offers 14 appetizers, including Made-From-Scratch Crab Cakes, Crab Nachos and Crazy-Good Crab Dip, and over 50 entrees, including Steampots, Crab in a Bucket, Skillet Paella, Stuffed Snapper and out of water options like Whiskey Smoked Ribs.

Brick House Tavern + Tap

The Company's Brick House's interior decor includes custom lighting, dark mahogany woods, open sight lines, high definition television (HD TVs), and an inviting fireplace. In addition to a traditional dining room and bar area, Brick House also offers large communal tables and a section of leather recliners positioned in front of large HD TVs, where guests receive their own TV tray for dining. Outdoor seating is also available on the patio or around an open fire pit at nearly all locations. Both food and beverages are served by personable and engaging service staff. The typical Brick House restaurant is approximately 8,500 square feet and averages approximately 250 seats, which includes both traditional tables and seating options. Brick House offers its guests a selection of contemporary tavern food. Brick House's menu includes 17 appetizers and over 53 entrees. Handcrafted appetizers include Deviled Eggs, Meatloaf Sliders, Brick Pizza, Meat and Cheese Board and Fried Stuffed Olives. Brick House offers an array of burgers, including The Kobe, which is hand formed from American Wagyu beef. Guests can also choose from a selection of homemade entrees, such as Drunken Chops, BBQ Baby Backs, Chicken & Waffles, and its Prime Rib Sandwich. In addition, Brick House's Brick Burgers, include the Gun Show Burger and the Black & Bleu Burger. Brick House's beverage selection includes imported and do! mestic be! ers along with hand-pulled cask beer. All Brick House restaurants have a bar that supports a variety of liquor drin ks, wine and beer cocktails like the Shandy and Bee Sting, a! s well as! specialty cocktails like the Dark & Stormy, Moscow Mule and The Zombie.

The Company competes with Red Lobster, Bonefish Grill, Landry's Seafood, Bubba Gump Shrimp Company, BJ's Restaurants, Yard House, Cheesecake Factory, Bravo Brio and Buffalo Wild Wings, Applebee's, Chili's, T.G.I. Friday's, Texas Roadhouse and Outback Steakhouse.

Advisors' Opinion:

• [By Victor Selva]

  The firm is currently Zacks Rank # 3 - Hold, and it also has a longer-term recommendation of "Underperfom." For investors looking for a Zacks Rank # 1 – Strong Buy, Ignite Restaurant Group Inc. (IRG) and The Wendy's Company (WEN) could be the options.

• [By Seth Jayson]

  Margins matter. The more Ignite Restaurant Group (Nasdaq: IRG  ) keeps of each buck it earns in revenue, the more money it has to invest in growth, fund new strategic plans, or (gasp!) distribute to shareholders. Healthy margins often separate pretenders from the best stocks in the market. That's why we check up on margins at least once a quarter in this series. I'm looking for the absolute numbers, so I can compare them to current and potential competitors, and any trend that may tell me how strong Ignite Restaurant Group's competitive position could be.

source from Top Stocks For 2015:http://www.topstocksblog.com/hot-restaurant-companies-to-buy-for-2015.html

Top 5 Restaurant Stocks To Invest In Right Now

Top 5 Restaurant Stocks To Invest In Right Now: Richoux Group PLC (RIC)

Richoux Group plc is a United Kingdom-based company engaged in the operation of restaurants. The Company has three segments: Richoux, Villagio Zippers and Deans Diner. Richoux restaurants operate in the areas of central London. The restaurants are open all day for breakfast, lunch, afternoon tea and dinner. The restaurants also offers patisserie. Zippers is a spacious, stylish and contemporary restaurant with a relaxed ambience. Dean's Diner offers a range of freshly prepared dishes. Villagio is a modern local Italian restaurant with a menu suitable for the whole family. The Companys subsidiaries include Newultra Limited and Richoux Limited. Advisors' Opinion:

• [By Roberto Pedone]

  Richmont Mines (RIC) engages in the mining, exploration and development of mining properties, principally gold in Canada. This stock closed up 2.4% to $1.68 in Tuesday's trading session.

  Tuesday's Range: $1.61-$1.68
  
  52-Week Range: $1.31-$5.50
  
  Tuesday's Volume: 76,000
  
  Three-Month Average Volume: 101,786

  From a technical perspective, RIC bounced higher here right off its 50-day moving average of $1.59 with decent upside volume. This stock has been uptrending strong for the last month and change, with shares moving higher from its low of $1.31 to its recent high of $1.71. During that move, shares of RIC have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of RIC within range of triggering a near-term breakout trade. That trade will hit if RIC manages to take out some near-term overhead resistance at $1.71 to $1.80 with high volume.

  Traders should now look for long-biased trades in RIC as long as it's trending above its 50-day at $1.59 or above more near-term support levels at $1.50 to $1.44 and then once it sustains a move or close above those breakout levels with volume that hits near or above 101,786 s! hares. If that breakout triggers soon, then RIC will set up to re-test or possibly take out its next major overhead resistance levels at $2.10 to $2.20. Any high-volume move above those levels will then give RIC a chance to tag its 200-day moving average at $2.48.

source from Top Penny Stocks For 2015:http://www.topstocksforum.com/top-5-restaurant-stocks-to-invest-in-right-now.html

Verizon Reports Plan to Sell Up to $49B in Bonds (VZ)

Verizon Communications Inc. (VZ) announced on Tuesday that it now plans to sell up to $49 billion worth of bonds to fund its $130 billion buyout from Vodafone Group (VOD).

The company previously made a deal with Vodafone to buy back VOD’s 45% in Verizon Wireless.

Top Safest Companies To Own In Right Now

Verizon now plans to sell fixed rate debt, which will have maturities from 3 years to 30 years, and two portions of floating rate securities. Additionally, the company may sell debt in euros, pounds and yen.

Verizon shares were mostly flat during Wednesday morning trading. The stock is up 7% YTD.

Top 10 Recreation Companies To Own In Right Now

Top 10 Recreation Companies To Own In Right Now: Vitamin Blue Inc (VTMB)

Vitamin Blue, Inc. (Vitamin Blue), incorporated on May 25, 1999, is engaged in designing, manufacturing and distributing surf wear board shorts, t-shirts and fleece jackets) and surfing accessories (surf boards bags, roof rack pad and surf backpacks). The Company focuses on four types of retail outlets: surfboard manufacturers, surf shops, specialty stores and department stores. Vitamin Blue distributes the majority of its products through surfboard manufacturers and surf shops. The primary focus of Vitamin Blue is surf wear and surfing accessories. The Companys primary distribution focuses on retail outlets in North America (the United States, Canada and Mexico). Vitamin Blue manufactures most of its surfing accessories and all of its surfwear in-house.

Surfboard Manufacturers

The Companys surfboard manufactures retail outlet generally consists of single shops, where surfboards are designed, manufactured and marketed. It is the source for surfing accessories. This distribution channel focuses on the core surf market. The Company has relationships with manufacturers, such as Hap Jacobs, Bing Surfboards, Bark Boards and Ron House Shapes, Dewey Weber, Stewart Surfboards. Vitamin Blue surfing accessories are sold through this channel.

Surf Shops

The Companys surf shops are generally single to multiple shops located in or near beach cities, focused on the central surf market. It tends to be privately owned. Surf shops also focus on the core surf market and provide an authentic retail source for complete lines of surfwear and surfing accessory products. The Company has relationships with manufacturers, such as Freeline Design (Santa Cruz, California), The Frog House (Newport Beach, California), Infinity Surfboards (Dana Point, California), Legends Surf (Carlsbad, California), Hi-Tech Surf Sports (Maui, Hawaii), Second Wind Sail and Surf (Maui, Hawaii), Hawaiian Island Su! rf and Sport (Ma ui, Hawaii) Kennedy Surfboards (Woodland Hills, California),! Malibu Surf Shack, (Malibu, California), E.T. Surf (Hermosa Beach, California), Spyder (Hermosa Beach, California), Costa Azul (Laguna Beach, California), Icons of Surf (San Clemente, California), Encinitas Surfboards (Encinitas, California), Nor Easter Surf Shop (Scituate, Massachusetts), Air & Speed Surf Shop (Montauk, New York), Xtreme Surf & Sport (East Northport, New York) and Marshs Surf Shop (Atlantic Beach, North Carolina). The complete line of Vitamin Blue products (surfwear and surfing accessories) is distributed through this channel.

Specialty Stores

The Companys specialty stores type of retail outlet generally consists of single, regional and nationwide stores, and tends to be located in or near beach or resort communities, shopping centers, and shopping malls. Specialty stores distributing surf products primarily include tourist/vacation shops, sporting good stores (including Sports Chalet, Inc. - SPCHB), and regional and nation al retail stores (including Pacific Sunwear of California-PSUN and Zumiez, Inc.-ZUMZ). Vitamin Blue intends to use this type of retail outlet to distribute its surfwear.

Department Stores

The Companys department stores type of retail outlet generally has stores located nationwide. It is located in shopping malls, such as Bloomingdales, Macys, Saks Fifth Avenue and Nordstrom. Vitamin Blue intends to use this type of retail outlet to distribute its surfwear.

Vitamin Blues surfing accessories include surfboard travel bags, which offer surfboard protection and can be used daily or for long distance surf trips; surf gear travel bags, which are duffle bags used to carry surfing essentials on surf trips; surf backpacks, which are specially, designed wet bag backpacks for wetsuit storage, and roof-rack pads, which is used on existing car roof racks for surfboard protection and security on daily surf outings.

The Co! mpany c! ompetes with Quicksilver, Inc., Billabong Intl, Hurley and! Volcom I! nc.

Advisors' Opinion:

• [By Peter Graham]

  Small cap marijuana stocks Smart Ventures Inc (OTCMKTS: SMVR) and Vitamin Blue Inc (OTCMKTS: VTMB) jumped 40.28% and 38.6%, respectively, while hemp stock Astika Holdings Inc (OTCBB: ASKH) fell 13.75% on Friday. Moreover, only one of these small cap stocks seems to have been the subject of a few paid promotions or investor relations types of activities. So will all three of these marijuana or hemp stocks keep producing highs or lows for investors and traders alike? Here is a quick reality check:

source from Top Penny Stocks For 2015:http://www.seekpennystocks.com/top-10-recreation-companies-to-own-in-right-now.html

Hot Long Term Companies To Buy For 2015

Hot Long Term Companies To Buy For 2015: Technip (TEC)

Technip, formerly known as Technip SA, is a France-based company that is engaged in project management, engineering and construction for the energy industry, and holds a portfolio of solutions and technologies. The Company operates in three segments: Subsea, Onshore and Offshore. Its main markets include onshore plants, offshore platforms and subsea construction. The Company is present in around 48 countries, and had industrial assets on continents and operates a fleet of vessels for pipeline installation and subsea construction. It operates several subsidiaries, such as AETech, EPD, Subocean group and Front End Re, among others. On August 31, 2012, the Company announced the completion of the Stone & Webster process technologies and associated oil and gas engineering capabilities acquisition from The Shaw Group Inc. In March 13, 2013, it acquired Ingenium AS, an offshore engineering and services company. Advisors' Opinion:

• [By Sofia Horta e Costa]

  Technip SA (TEC) sank 15 percent, its biggest weekly retreat in more than two years after third-quarter profit missed the average analyst estimate compiled by Bloomberg. The oilfield-services provider also cut full-year forecasts for the operating margin and sales at its subsea unit, meaning total sales will miss an earlier target of as much as 9.5 billion euros.

source from Top Penny Stocks For 2015:http://www.seekpennystocks.com/hot-long-term-companies-to-buy-for-2015.html

Stock Brokers: An Endangered Species?

By Hal M. Bundrick

NEW YORK (MainStreet) Traditional brokerage firms, like Merrill Lynch and Morgan Stanley, are facing greater challenges to keep clients, and brokers, as the industry braces for a tectonic shift. These stalwarts of the business, traditionally called wire houses, are looking for ways to remain competitive as a higher code of customer care, the fiduciary standard, becomes more prevalent. As one industry observer notes, brokerage firms have discouraged their advisors to act as fiduciaries because "many are not competent enough" and doing so would expose the firm to significant liability.

"There always seem to be certain events or cycles where some experts say that wire houses will not be able to compete against RIAs (registered investment advisors) and independent advisors because of their more restrictive model," writes Fred Barstein, on NAPA Net.

"That conversation arose after the imposition of 408(b)(2), which requires advisors to disclose in writing whether or not they are acting as a fiduciary for the services they are rendering and the associated fees." Barstein is the founder and executive director of The Retirement Advisor University, and editor in chief of the National Association of Plan Advisors website. The Department of Labor as well as the Securities and Exchange Commission are working to codify the fiduciary standard. While wire house brokers serving retail customers are seldom allowed to "put the client's interests first" under the mandate of a fiduciary standard -- serving to a less-stringent "suitability standard" -- some brokerage advisors working with company-sponsored retirement plans are permitted to offer fiduciary advice. "All of the wire houses now allow a select group of their advisors to act as ERISA 3(21) fiduciaries, with certain restrictions -- they must have a minimum number of plans and assets under management; fiduciary services may be provided to larger plans only; and some type of industry designation must be completed," Barstein writes. But Barstein says not to count wire houses out just yet. Brokerage firms have the benefit of national brand recognition, deep pockets and long-term relationships. "Firms tied to a retail bank, like Merrill Lynch and Wells Fargo, have other obvious advantages, with Merrill starting to capitalize on BofA's relationships by teaming up corporate loan officers with designated plan advisors," Barstein writes. "Other firms team up advisors who may not focus on the (employer-sponsored retirement plan) market with specialists offering partnerships for larger firms or publicly traded companies. So once again, the demise of wire houses is greatly exaggerated even with new fiduciary regs looming." --Written by Hal M. Bundrick for MainStreet

Best Consumer Service Stocks To Own Right Now

Best Consumer Service Stocks To Own Right Now: Kadant Inc (KAI)

Kadant Inc., incorporated in November 1991, is a supplier of equipment used in the global papermaking and paper recycling industries and a manufacturer of granules made from papermaking byproducts. Through its Papermaking Systems segment, the Company develops, manufactures and markets a range of equipment and products for the global papermaking, paper recycling, and process industries. Through its Fiber-based Products business, the Company manufacture and sell granules derived from pulp fiber for use as carriers for agricultural, home lawn and garden, and professional lawn, turf and ornamental applications, as well as for oil and grease absorption. Its Papermaking Systems segment consists of product lines, such as stock-preparation, fluid-handling, doctoring and water-management. On May 27, 2011, its subsidiary, Kadant Johnson Europe B.V., acquired all the interests in m-clean papertech holding AB. In April 2013, it completed the acquisition of Companhia Brasileira de Tecn ologia Industrial (CBTI).

The Company's customer base includes major global paper manufacturers and with its equipment found in most of pulp and paper mills. The Company manufactures its products in nine countries in Europe, North and South America and Asia. It develop, manufacture and market complete custom-engineered systems and equipment, as well as standard individual components, for pulping, de-inking, screening, cleaning, and refining recycled and virgin fibers for preparation for entry into the paper machine. Its principal stock-preparation products include recycling and approach flow systems and Virgin pulping process equipment.

The Company develop, manufacture and market rotary joints, precision unions, steam and condensate systems, components, and controls used primarily in the dryer section of the papermaking process and during ! the production of corrugated boxboard, metals, plastics, rubber, textiles, chemicals and food. Its principal f luid-handling systems include rotary joints, siphons, turbul! ator bars, and engineered steam and condensate systems. Its mechanical devices, used with rotating shafts, allow the transfer of pressurized fluid from a stationary source into and out of rotating machinery for heating, cooling, or the transfer of fluid power. Its devices, installed primarily inside the rotating cylinders of paper machines, are used to remove condensate from the drying cylinders through rotary joints located on either end of the cylinder. Its steel or stainless steel axial bars, installed on the inside of cylinders, are used to induce turbulence in the condensate layer to improve the uniformity and rate of heat transfer through the cylinders. Its steam systems control the flow of steam from the boiler to the paper drying cylinders, collect condensed steam, and return it to the boiler to improve energy efficiency during the paper drying process.

The Company develop, manufacture and market a range of doctoring systems and related consumables that continuously clean rolls to keep paper machines running efficiently; doctor blades made of a variety of materials to perform functions, including cleaning, creping, web removal, flaking, and the application of coatings, and profiling systems that control moisture, Web curl, and gloss during paper converting. Its principal doctoring products include doctor systems and holders, profiling systems and doctor blades. Its doctor systems clean papermaking rolls to maintain the operation of paper machines and other equipment by placing a blade against the roll at a constant and uniform pressure. A doctor system consists of the structure supporting the blade and the blade holder. It offers profiling systems that control moisture, Web curl, and gloss during paper converting. It manufacture doctor and scraper blades made of a variety of materials, including metal, bi-met! al, or sy! nthetic materials that perform a variety of functions, including cleaning, creping, Web removal, flaking and the application of coatings.

The Company devel! ops, manu! facture and markets water-management systems and equipment used to continuously clean paper machine fabrics and rolls, drain water from pulp mixtures, form the sheet or Web, and filter the process water for reuse. Its principal water-management systems include shower and fabric-conditioning systems, formation systems, and water-filtration systems. Its shower and fabric-conditioning systems assist in the removal of contaminants that collect on paper machine fabrics used to convey the paper Web through the forming, pressing and drying sections of the paper machine. A typical paper machine has between 3 and 12 fabrics. It supplies structures that drain, purify, and recycle process water from the pulp mixture during paper sheet and Web formation. It offer a variety of filtration systems and strainers that remove contaminants from process water before reuse and recover reusable fiber for recycling back into the pulp mixture.

The Company competes with Voith Paper GmbH , Metso Corporation, Maschinenfabrik Andritz AG, Deublin Company, Barco Company, Christian Maier GmbH & Co. KG, Duff-Norton Company, Joh. Clouth GmbH & Co. KG, Bonetti, S.p.A., Metso Corporation and IBS-Paper Performance Group.

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 Kadant (NYSE: KAI  ) , whose recent revenue and earnings are plotted below.

source from Top Stocks For 2015:http://www.topstocksblog.com/best-consumer-service-stocks-to-own-right-now.html

3 Stocks Under $10 Making Big Moves

DELAFIELD, Wis. (Stockpickr) -- At Stockpickr, we track daily portfolios of stocks that are the biggest percentage gainers and the biggest percentage losers.

>>5 Stocks Set to Soar on Bullish Earnings

Stocks that are making large moves like these are favorites among short-term traders because they can jump into these names and try to capture some of that massive volatility. Stocks that are making big-percentage moves either up or down are usually in play because their sector is becoming attractive or they have a major fundamental catalyst such as a recent earnings release. Sometimes stocks making big moves have been hit with an analyst upgrade or an analyst downgrade.

Regardless of the reason behind it, when a stock makes a large-percentage move, it is often just the start of a new major trend -- a trend that can lead to huge profits. If you time your trade correctly, combining technical indicators with fundamental trends, discipline and sound money management, you will be well on your way to investment success.

>>5 Rocket Stocks to Buy for Short-Week Gains

With that in mind, let's take a closer look at a several stocks under $10 that are making large moves to the upside.

Tonix Pharmaceuticals

Tonix Pharmaceuticals (TNXP), a development stage specialty pharmaceutical company, focuses on the identification and development of pharmaceutical products for the disorders of central nervous system. This stock closed up 4.9% to $9.34 in Tuesday's trading session.

Tuesday's Range: $8.88-$9.42

52-Week Range: $3.00-$21.00

Tuesday's Volume: 98,000

Three-Month Average Volume: 122,864

From a technical perspective, TNXP jumped higher here right above its 200-day moving average of $8.57 with lighter-than-average volume. This stock has been downtrending badly for the last five months, with shares moving lower from its high of $21 to its recent low of $8.14 a share. During that downtrend, shares of TNXP have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of TNXP have now started to bounce off its 200-day and it's starting to break out above some near-term overhead resistance at $9.27. Market players should now look for a continuation move to the upside if TNXP manages to clear Tuesday's intraday high of $9.42 with strong upside volume.

Traders should now look for long-biased trades in TNXP as long as it's trending above Thursday's low of $8.88 or above its 200-day at $8.57 and then once it sustains a move or close above $9.42 with volume that hits near or above 122,864 shares. If that move materializes soon, then TNXP will set up to re-test or possibly take out its next major overhead resistance levels at $9.93 to its 50-day moving average of $9.97. Any high-volume move above those levels will then give TNXP a chance to tag its next major overhead resistance levels at $10.44 to $11.93.

Conatus Pharmaceuticals

Conatus Pharmaceuticals (CNAT), a biotechnology company, focuses on the development and commercialization of novel medicines to treat liver diseases in the U.S. This stock closed up 8.7% to $6.09 in Tuesday's trading session.

Tuesday's Range: $5.60-$6.10

52-Week Range: $5.06-$15.67

Tuesday's Volume: 420,000

Three-Month Average Volume: 416,652

From a technical perspective, CNAT ripped higher here and broke out above some near-term overhead resistance at $6 with above-average volume. This stock has been downtrending badly for the last three months, with shares moving lower from its high of $13.18 to its recent low of $5.06. During that downtrend, shares of CNAT have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of CNAT are now starting to rebound off that $5.06 low and it looks like its downtrend might be over in the short-term. Market players should now look for a continuation move to the upside in the short-term if CNAT manages to clear Tuesday's intraday high of $6.10 with strong volume.

Traders should now look for long-biased trades in CNAT as long as it's trending above Tuesday's low of $5.60 or above more near-term support at $5.40 and then once it sustains a move or close above $6.10 with volume that hits near or above 416,652 shares. If that move gets underway soon, then CNAT will set up to re-test or possibly take out its next major overhead resistance levels at $6.40 to $6.87, or even its 50-day moving average at $7.05. Any high-volume move above $7.05 will then give CNAT a chance to tag $8.10 to $8.50.

Arotech

Arotech (ARTX), together with its subsidiaries, provides defense and security products and services. This stock closed up 5.1% to $4.67 a share in Tuesday's trading session.

Tuesday's Range: $4.41-$4.79

52-Week Range: $1.00-$6.61

Tuesday's Volume: 1.05 million

Three-Month Average Volume: 1.95 million

From a technical perspective, ARTX ripped higher here right off its 50-day moving average of $4.32 with decent upside volume. This spike higher on Tuesday is starting to push shares of ARTX within range of triggering a big breakout trade. That trade will hit if ARTX manages to take out Tuesday's intraday high of $4.79 and then once it clears more near-term overhead resistance levels at $4.85 to $5.15 with high volume.

Traders should now look for long-biased trades in ARTX as long as it's trending above its 50-day at $4.32 and then once it sustains a move or close above those breakout levels with volume that hits near or above 1.95 million shares. If that breakout triggers soon, then ARTX will set up to re-test or possibly take out its next major overhead resistance levels at $5.75 to $6.

To see more stocks that are making notable moves higher, check out the Stocks Under $10 Moving Higher portfolio on Stockpickr.

-- Written by Roberto Pedone in Delafield, Wis.

RELATED LINKS:

>>4 Big Stocks to Trade (or Not)

>>5 Stocks Poised for Breakouts

>>5 Stocks Under $10 Set to Soar

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.

Target to offer e-books

Target wants to help host your book club — online.

As the retailer works to build a more competitive e-commerce experience, it's partnering with a startup e-book subscription service called Librify to give customers an online platform for buying, sharing, and discussing their favorite books.

The official launch is still several months off, but the announcement comes ahead of BookExpo in New York City this week, the biggest event of the year for the publishing industry.

Librify, which started beta testing with select users in March, offers a social-subscription service for e-books. For $8.99 a month, you get access to a recommended book each month, and a 10%-20% discount on all other e-books. Librify has more than 500,000 titles available for purchase so far — that's about half of what Amazon offers through the Kindle.

But Librify also offers a social platform built around the idea of creating a virtual book club-type experience. Users can create bookshelves based on their favorite categories, such as beach reads or classics. Signing up for the service through Facebook alerts users to which of their friends are also on Librify; they can follow their friends' bookshelves or copy those bookshelves and build on them with their own picks. And you can still access these features if you don't opt for the subscription.

"Eventually the goal is to have as much interactivity as we can," says Joanna Stone Herman, CEO of Librify. She wants to marry a centuries-old tradition rooted in the physical world with the ease, convenience, and social reach of the Web.

"Since the beginning of people reading books people have said, let's get five friends together, read the same book and talk about it," she says. "But there's nothing that's been done to enhance that from a technology standpoint."

Partnering with Target gives both companies a chance to expand their reach. Librify gets access to Target's marketing power, brand recognition, and customer base. Target gets closer to offeri! ng customers a more compelling online experience.

The service will be targeted at women, especially young professionals and moms of the coveted Millennial generation. Target is vague on the details at this point, saying more will be revealed this summer. But Stone Herman says there will be promotions and discounts for Target shoppers who arrive at librify.com through Target's website, and in-store displays will promote the partnership.

"It is a great solution for bringing a digital book experience to the Target guests who have long enjoyed our "Club Picks" selections," Target spokeswoman Erica Julkowski says. "We are proud to partner with Librify to offer a differentiated experience, which focuses on social connectivity and book clubs."

Target employees choose a new "club pick" every month based on what they personally are reading. Stone Herman says Librify will be able to leverage this curation expertise and capitalize on Target's brand.

"We're taking advantage of all the breadth and reach that Target has," she says.

Here's How the 'Smart Money' Is Playing Gold Stocks

Part of the recent move up in gold prices to more than $1,400 an ounce and the uptick in gold stocks is a response to the crisis in Syria.

However, there is a lot more occurring just beneath the surface than geopolitics.

But investors would never get that sense from Wall Street, which is still in the midst of its perennial "hate gold" campaign.

Take, for instance, the hullabaloo over the liquidation by hedge fund manager John Paulson of a large part of his position in SPDR Gold Trust (NYSE: GLD).

In the second quarter of this year, Paulson cut his position in GLD from 21.8 million shares to 10.2 million shares. At first glance, he seemed to have lost faith in gold and was getting out.

But, there's more to that story...

The Financial Times reported that Paulson offset much of the sale of GLD by purchasing gold swaps on the over-the-counter (OTC) market.

Part of the reason may be cost. GLD has a management fee of 0.4%. The FT reported that with gold forward curve flattening, there's little cost to holding gold derivatives.

Another reason may be less transparency, making it easier to make a major move. In the OTC derivatives market, not everyone can figure out exactly what Paulson is doing with regard to investing in gold. 

Editor's Note: This chart, with a few simple lines, illustrates a major reason to be investing in gold now - take a look here.

The real underreported action, however, may not be in the gold market, but in gold stocks.

More Smart Money Investing in Gold Stocks

Li Ka-shing, 85, is one of Hong Kong's richest businessmen. Bloomberg estimates his net worth to be about $27 billion.

He is also known as one of the world's savviest investors, buying assets on the cheap.

And he recently made a major move into gold stocks.

One of his companies, Cheung Kong Holdings Limited (CHEUY), recently formed a 50/50 joint venture with Canadian Imperial Bank of Commerce (NYSE: CM) called CEF Holdings. They want to invest into beaten-down mining stocks and particularly gold equities.

The CEO of the joint venture, Warren Gilman, told Bloomberg, "Long term, gold is a good place to be."

He added that gold's drop in price this year "is great" because his firm can now make quality long-term investments into certain gold stocks on the cheap.

Gilman said to Bloomberg, "It's tougher and tougher to find economic gold deposits in safe jurisdictions. You [will] see mine supply struggling to keep up with demand long term. That's a great recipe for higher prices in the longer term."

The bullishness of Li Ka-shing and CIBC echoes thoughts expressed recently by Money Morning Chief Investment Strategist Keith Fitz-Gerald.

Fitz-Gerald said, "I could very easily make the argument that gold miners are unloved, undervalued and probably the worst investment of the year. But, we know from history that's precisely the best time to buy. History shows you want to buy when there's blood in the streets."

Gold Stocks Rebound

For individual investors who have fewer resources than Gilman to research specific gold-mining companies, an ETF such as the Market Vectors Gold Miners ETF (NYSEArca: GDX) is a good option for investing in gold stocks.

Since hitting bottom in early July, GDX has soared about 30%. This caught some investors' attention, and now inflows into the fund are up.

But it has more upside potential for investors - and if it dips again, that would be an even better time to follow Li Ka-shing and others into gold stocks.

More support for investing in gold stocks now is the gold-stocks-to-gold ratio flagged by Money Morning Global Resource Specialist Peter Krauth. Krauth said this indicator is flashing the best buy signal in a dozen years.

In fact, Krauth found four bullish gold-price indicators all flashing buy signals now. Take a look...

Related Articles:

Money Morning:
Why Gold Mining Stocks Are a Buy Now Money Morning:
Today's Gold Convergence Is Your Best Buy Signal Yet ETF Trends:
Paulson Slashes GLD Stake Financial Times:
Paulson's Faith in Gold Unshaken Despite ETF Sale Bloomberg:
Li Ka Shing -Backed CEF Seeking to Make Gold Investments ETF Trends:
A Double for Popular Gold Miners ETF? Maybe

Southland startup summit seizes the moment

NASHVILLE -- Ahead of the inaugural Southland startup conference last June, PandoDaily founder and Memphis native Sarah Lacy was a reluctant opening speaker. Having just given birth to her second child and having traveled from San Francisco to a city she had long regarded with skepticism, she was questioning her decision to attend.

But, as the summit created by Launch Tennessee kicked off, she had what she describes as a "field of dreams" moment, determining that this was the event that she wanted her startup publication to fully embrace as a destination conference.

So, a year later, PandoDaily and Launch Tennessee are co-producing Southland, both with high expectations for its second year. For Launch Tennessee CEO Charlie Brock, it's a chance to prove last year's strong debut wasn't a "one-shot wonder" and to further catapult the Southeast's startup community onto the national stage. For Lacy, it means being able to create what she envisions as an ideal conference for entrepreneurs and tech enthusiasts nationally.

"Nashville is such a special city and is in such a special moment right now, and I think the tech world wants a new destination conference," Lacy said. "The goal is to put on a really great event this year and make that event a little bit better next year and a little bit better the next year."

Launch Tennessee created the concept for Southland last year to bring attention to the region's startup activity and to give Southeast startups more access to investors that have typically looked to the West and East coasts for opportunities. Scheduled days ahead of the Bonnaroo Music and Arts Festival, the conference also highlights elements of Southern culture — barbecue, whiskey, jazz and country roots — that regional entrepreneurs have helped establish or capitalized on over the decades.

"It helps put a stamp on Tennessee and, in particular, Nashville, as a place where there is a lot happening, where there is a center of activity in entrepreneurship and in the early! -stage capital scene," Brock said, whose conference drew close to 650 people last year. "At the end of the day, we are doing this to attract investors to look at our companies so they can help fill that capital gap."

Lacy has been attending and planning tech conferences worldwide for 15 years while writing for Businessweek, TechCrunch and, now, PandoDaily, and the 2014 Southland format is based on her observations over the years of what works well — and what doesn't.

Al Gore: Former U.S. Vice President Al Gore sits on the board of Apple and was a senior adviser to Google. He is also co-founder and chairman of Generation Investment Management, a senior partner at Kleiner Perkins Caufield & Byers and chairman of the Climate Reality Project, a nonprofit devoted to solving the climate crisis.  (Photo: FILE) Fullscreen David Marcus: He founded GTN Telecom and served as chairman and CEO until 2000, when it was acquired by World Access. He also founded Echovox, a mobile monetization company, and Zong, a mobile payments provider for gaming and social networking companies. After Zong was acquired by eBay/PayPal in 2011, Marcus became vice president and general manager of the mobile division of PayPal. In April 2012, he became president of PayPal.  (Photo: SUBMITTED) Fullscreen Phil Libin: Serving as Evernote's CEO since 2007, Libin is an entrepreneur and executive who has led two Internet companies from the very beginning to proven commercial success and helped three others through rapid growth.  (Photo: SUBMITTED) Fullscreen Christy Turlington Burns: With nearly 30 years at the forefront of the fashion industry, having graced every magazine cover from Vogue to Time, Christy Turlington Burns has established a diverse career as a model, writer, entrepreneur, spokeswoman, advocate and filmmaker. She founded Every Mother Counts, a nonprofit dedicated to making pregnancy and childbirth safe for every mother, after her own childbirth complication.  (Photo: SUBMITTED) Fullscreen Andy Dunn: He co-founded Bonobos Inc., a men's clothing company, in 2007. He launched Maide, an online pro shop for classic golf apparel, under Bonobos Inc. in 2013. He is also co-founder of Red Swan Ventures, which has invested in Birchbox, Warby Parker, Hailo and more.  (Photo: SUBMITTED) Fullscreen Like this topic? You may also like these photo galleries:ReplayAutoplayShow ThumbnailsShow CaptionsLast SlideNext Slide

For starters, that means no panels — they're boring, Lacy explains — and only one session at time, because multi-track venues mean attendees inevitably miss good content. Instead of keynote speeches, the conference will feature two-sided conversations with a star-studded lineup of guest speakers.

As part of the conference, a group of 10 companies will vie for $100,000 in equity that is provided from the investors judging the competition, putting more skin in the game for judges, and thus more engagement, Lacy said. More than 40 companies, including four from Nashville, will be able to demonstrate their products as part of the conference's "Southland Village."

The event, which will be held at Marathon Music Works from June 9-11, will also include "salon sessions" during which attendees, paying $1,500 for tickets, will be able to interact with guest speakers in smaller, informal groups.

In describing the value of this type of conference, Lacy points to South by Southwest, the music and tech eve! nt that n! ow draws more than 70,000 people to Austin, Texas, and has put Austin on the map as one of the most vibrant tech and startup cities in the United States.

"Austin actually hasn't yielded very many high-growth, huge startups, but there is an amazing creative class there," Lacy said. "What they've done very well is they had SXSW grow year after year so that basically everyone in the tech industry at some point has gone through Austin... We have seen in every place that had a big destination conference like this, there is a massive brand and halo effect that makes investors and developers and entrepreneurs willing to get on a plane, willing to think about that place as a place where they could build something or fund something."

The idea is not to replicate South by Southwest, and Southland has intentionally limited its attendance to close to 700 this year to ensure quality networking opportunities for attendees and startup groups seeking to interact with investors and speakers, Brock said.

While Nashville still has a ways to go in establishing its business dynamism beyond its health care legacy, Lacy said the city that always seemed to be constantly changing its brand has grown on her.

"It's very clear that, whether it has been an opportunistic move or not, Nashville is very in touch with its roots and what makes it distinct right now," Lacy said.

Could Zinc Be The Next Base Metals Star?

A combination of Indonesian ore restrictions, and fears over possible trade sanctions on Russian miners, has seen nickel emerge as the base metals suite's darling during 2014. The metal has advanced 40% since the turn of the year, breaching 27-month peaks above $21,000 per tonne in the process, and more strength looks on the agenda as these supply concerns rumble on.

But for many, a backcloth of declining supply levels is also expected to propel zinc prices skywards in the near future. Bank of America-Merrill Lynch expects the galvanising metal to breach $2,400 per tonne as soon as next year, a sizeable 15% improvement if realised and with many tipping further price growth further out.

Market deficit poised to worsen in coming years

Like nickel, the zinc market is beset by worries over production levels over both the short and near term. However, wider macroeconomic fears have constrained zinc's price performance in recent months, and prices are essentially flat from those recorded at the start of 2014 around $2,100 per tonne.

Still, a spate of mine closures scheduled from the middle of next year looks set to become an increasingly-significant price driver. MMG Limited, one of the planet's biggest zinc producers and owner of the Century mine in Queensland — by far Australia's largest zinc project — expects zinc production from the asset's open pit to range between 465,000 and 480,000 tonnes this year.

This marks a significant decline from 488,233 tonnes in 2013 and 514,707 tonnes in the previous year, and last output from the project is anticipated during the middle of 2015. This downtrend is mirrored by numerous other major projects across the globe. On top of this, the effect of reduced commodity prices on capital expenditure across the mining community is stymieing the development of the next generation of 'super projects.'

Meanwhile, a steady improvement in the global economy continues to bolster demand for the metal, which is used predominantly in battery production as well as to coat iron and steel to protect against corrosion. Galloping automobile demand in emerging markets, in addition to resurgent car sales in Western Europe and North America, has proved pivotal in driving zinc demand higher.

And significantly, a backdrop of rising construction activity in China — the Asian country is responsible for almost half of total zinc consumption — and surging domestic demand for electrical goods also bodes well for metal prices. Indeed, the International Lead and Zinc Study Group (ILZSG) estimates that Chinese apparent demand rose 7.6% last year versus 3.4% in the US and 4% in Japan.

Latest forecasts from metals specialists Sucden Financial and FastMarkets point to a 5% improvement in zinc demand in 2014, to 13.6 million tonnes, outstripping an anticipated 4% output advance to 13.5 million tonnes. These figures push last year's market deficit to 120,000 tonnes from 68,000 tonnes in 2013.

This trend of buoyant consumption outstripping production increases has been the story of the zinc market during recent years — next year's projected deficit compares markedly with oversupply of 375,000 tonnes in 2011, based on ILZSG figures, and 248,000 tonnes in 2012.

Although zinc stocks remain relatively plentiful — material currently held in London Metal Exchange warehouses currently stands at around 735,000 tonnes — levels have collapsed 25% during the past six months and now stand at their lowest since the autumn of 2011.

Of course the prospect of vast quantities of zinc being released onto the market from China is a very real threat, as the metal's role as collateral for a range of financing activities comes under greater regulatory scrutiny.

But as global metal consumption looks set to gallop steadily higher, and output from key mines is not likely to be replaced for some time, in my opinion zinc looks set to enjoy solid long-term price appreciation.

5 Stocks Under $10 Set to Soar

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.

Just take a look at some of the hot movers in the under-$10 complex from Wednesday, including Astex Pharmaceuticals (ASTX), which skyrocketed higher by 23.7%; Hanwha Solarone (HSOL), which soared higher by 16.3%; JA Solar (JASO), which ripped higher by 15.9%; and Amtech Systems (ASYS), which trended up by 15.6%. 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 spiked sharply higher was solar player ReneSola (SOL), which I highlighted in Aug. 22's "5 Stocks Under $10 Set to Soar" at around $4.30 per share. I mentioned in that piece that shares of SOL had been uptrending very strong for the last four months and change, soaring higher from its low of $1.25 to $4.85 a share. This stock had recently pulled back off that $4.85 high to $3.52 a share. Shares of SOL were just starting to bounce off that $3.52 low and were quickly moving within range of triggering a breakout trade above some near-term overhead resistance levels at $4.25 to $4.50 a share and then above its 52-week high at $4.85 a share.

Guess what happened? Shares of SOL stared to flirt with that breakout during the next few trading sessions after the stock hit $4.73 a share. Then on Aug. 30, shares of SOL cleared all of those key resistance levels with massive upside volume. As I write this, SOL has hit an intraday high of $5.90 a share, which represents a big gain of 35% since the stock was trading at $4.30 a share. That's a massive run in a very short timeframe for anyone who played this breakout setup. Shares of SOL could still easily hit $7 to $8 a share in the coming months, since the uptrend for the stock is still intact and volume flows remain bullish.

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.

I'm not as eager to recommend investing long-term in stocks that trade less than $10 a share because these names can be very speculative, and the odds for picking the long-term winners aren't great. But I definitely love to trade stocks that are priced below $10. I like to view them as a trading vehicle with lots of volatility and lots of upside when the trade is timed right.

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 trade higher from current levels.

LDK Solar

One under-$10 name that's starting to move within range of triggering a near-term breakout trade is LDK Solar (LDK), a vertically integrated manufacturer of PV products for polysilicon, wafers, cells, modules, systems, power projects and solutions. This stock is off to a decent start in 2013, with shares up 13.1%.

If you take a look at the chart for LDK Solar, you'll notice that this stock has been trending range bound and consolidating for the last month and change, with shares moving between $1.42 on the downside and $2 a share on the upside. Shares of LDK have just started to trend back above its 50-day moving average at $1.55 a share with decent upside volume flows. That move is quickly pushing shares of LDK within range of triggering a near-term breakout trade above a key downtrend line that has acted as resistance for a few months.

Traders should now look for long-biased trades in LDK if it manages to break out above some near-term overhead resistance levels at $1.78 to $1.83 a share and then once it clears more resistance at $2 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 1.97 million shares. If that breakout triggers soon, then LDK will set up to re-test or possibly take out its next major overhead resistance levels at $2.17 to its 52-week high at $2.32 a share. Any high-volume move above $2.32 to $2.36 will then give LDK a chance to tag $3 to $3.50 a share.

Traders can look to buy LDK off any weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support levels at its 200-day moving average of $1.46 or at $1.42 a share. One can also buy LDK off strength once it clears those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

Nordic American Tankers

Another shipping player that's starting to trend within range of triggering a near-term breakout trade is Nordic American Tankers (NAT), an international tanker company that owns approximately 20 modern double-hull Suezmax tankers, including four newbuilding vessels. This stock is off to a slow start in 2013, with shares off by 7.7%.

If you take a look at the chart for Nordic American Tankers, you'll notice that this stock has been downtrending badly for the last month and change, with shares dropping from its high of $10.31 to its recent low of $7.65 a share. During that downtrend, shares of NAT have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of NAT have just started to bounce higher off that $7.65 low and it's quickly moving within range of triggering a near-term breakout trade. This bounce could be signaling that the downside volatility for NAT is over at least in the near-term.

Market players should now look for long-biased trades in NAT if it manages to break out above its 50-day moving average at $8.50 and then once it takes out its 200-day moving average at $8.63 a share with high volume. Look for a sustained move or close above those levels with volume that registers near or above its three-month average volume of 1.01 million shares. If that breakout triggers soon, then NAT will set up to re-test or possibly take out its next major overhead resistance levels at $9.89 to $10.31 a share.

Traders can look to buy NAT off any weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support at $7.65 a share. One can also buy NAT off strength once it clears those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

Merrimack Pharmaceuticals

One under-$10 biopharmaceuticals player that's just starting to trigger a breakout trade is Merrimack Pharmaceuticals (MACK), which focuses on discovering, developing and preparing to commercialize medicines paired with companion diagnostics for the treatment of serious diseases, with an initial focus on cancer. This stock has been hit hard by the bears so far in 2013, with shares off by 38%.

If you take a look at the chart for Merrimack Pharmaceuticals, you'll notice that this stock has been downtrending badly for the last two months, with shares plunging from its high of 7.09 to its recent low of $3.26 a share. During that move, shares of MACK have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of MACK have just formed a double bottom chart pattern at $3.26 to $3.32 a share and it's now starting to break out above some near-term overhead resistance at $3.64 a share. This move could be signaling a trend change for MACK as the stock starts to move higher off oversold conditions.

Traders should now look for long-biased trades in MACK if it manages to break out above some near-term overhead resistance at $3.64 a share with high volume. Look for a sustained move or close above that level with volume that hits near or above its three-month average action of 1.87 million shares. If that breakout triggers soon, then MACK will set up to re-test or possibly take out its next major overhead resistance level at its 50-day moving average of $4.75 a share. Any high-volume move above that level and above more resistance at $5.06 will then give MACK a chance to tag its 200-day moving average at $5.71 a share.

Traders can look to buy MACK off weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support levels at $3.32 or at $3.26 a share. One can also buy MACK off strength once it clears $3.64 a share with volume and then simply use a stop that sits a comfortable percentage from your entry point.

Forest Oil

Another under-$10 name in the energy space that's starting to move within range of triggering a big breakout trade is Forest Oil (FST), which is engaged in the acquisition, exploration, development, and production of natural gas and liquids in North America. This stock has been under selling pressure so far in 2013, with shares off by 16%.

If you take a look at the chart for Forest Oil, you'll notice that this stock has been uptrending strong for the last two months, with shares moving higher from its low o $3.77 to its recent high of $5.73 a share. During that move, shares of FST have been consistently making higher lows and higher highs, which is bullish technical price action. This stock has now started to spike back above its 200-day moving average of $5.52 a share and it's quickly moving within range of triggering a big breakout trade.

Market players should now look for long-biased trades in FST if it manages to break out above some near-term overhead resistance at $5.73 a share with high volume. Look for a sustained move or close above that level with volume that hits near or above its three-month average action of 3.77 million shares. If that breakout triggers soon, then FST will set up to re-test or possibly take out its next major overhead resistance levels at $6.52 to $7.40 a share.

Traders can look to buy FST off weakness to anticipate that breakout and simply use a stop that sits right below some near-term support at $5.32 a share or below its 50-day at $5.01 a share. One can also buy FST off strength once it clears $5.73 a share with volume and then simply use a stop that sits a comfortable percentage from your entry point.

L&L Energy

One final under-$10 coal player that looks ready to trigger a major breakout trade is L&L Energy (LLEN), which, through its subsidiaries, engages in the production, processing and sale of coal in the People's Republic of China. This stock is off to a hot start so far in 2013, with shares up 34%.

If you take a look at the chart for the L&L Energy, you'll notice that this stock has been downtrending badly for the last four months, with shares falling from its high of $4.94 a share to its recent low of $2.13 a share. During that downtrend, shares of LLEN have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of LLEN have now started to rebound off that $2.13 low and it's quickly moving within range of triggering a major breakout trade. If this rebound holds, then it could mean the downside volatility for LLEN is over in the short-term.

Traders should now look for long-biased trades in LLEN if it manages to break out above its 200-day moving average at $2.59 to its 50-day moving average at $3.02 a share and then once it takes out more resistance at $3.10 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 646,402 shares. If that breakout triggers soon, then LLEN will set up to re-test or possibly take out its next major overhead resistance levels at $3.83 to $4 a share. Any high-volume move above those levels will then put its next major overhead resistance levels at $4.40 to its 52-week high at $4.94 a share into range for shares of LLEN.

Traders can look to buy LLEN off weakness to anticipate that breakout and simply use a stop that sits right that recent low of $2.13 a share. One can also buy LLEN off strength once it clears those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

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.

Gas prices have familiar look as summer nears

NEW YORK (AP) — The price of gasoline looks familiar this Memorial Day. For the third year in a row, the national average will be within a penny or two of $3.64 per gallon.

Stability wasn't always the norm. Between 2003 and 2008 average retail gasoline prices more than doubled, reaching an all-time high of $4.11 per gallon in 2008. Prices then collapsed as the U.S. plunged into recession. But after a two-year run-up between 2009 and 2011, the price of gasoline has remained in a range of roughly $3.25 to $3.75 per gallon.

Drivers can handle that, according to AAA, and are ready to head out for Memorial Day driving trips in the highest numbers since 2005. "It is unlikely that gas prices will have a significant effect on travel plans compared to a year ago," AAA wrote in its annual Memorial Day forecast.

Steady gasoline prices are largely the result of relatively steady crude oil prices, even though there has been a long list of global supply disruptions and political turmoil that that typically would push the price of oil higher.

Sanctions have sharply cut output from Iran, once the world's third largest oil exporter. Libya went through civil war, and labor and political disruptions continue to limit its exports. Venezuela's oil output has been steadily declining for a decade. Most recently, the conflict between Russia and Ukraine is raising concerns that sanctions will impact production or exports from Russia, the world's second largest exporter after Saudi Arabia.

But rising crude output in countries such as the U.S., Canada and Brazil have offset the declining supply elsewhere, helping to keep prices steady.

Approaching this Memorial Day, the national average is $3.65 per gallon, according to AAA, OPIS and Wright Express. Last year on the holiday it was $3.63 per gallon. In 2012 it was $3.64.

The story is similar with other fuels. Through the first quarter of this year airlines are paying $3.03 per gallon for jet fuel — exactly the same they paid on average ! for all of last year, according to the Bureau of Transportation Statistics. The average price of diesel, $3.93 per gallon, is a nickel higher than last year.

Averages only tell part of the story, though. Tom Kloza, chief oil analyst at the Oil Price Information Service and Gasbuddy.com, compares the national average price of gasoline to the average temperature of the country — outside your door it's almost certainly hotter or cooler than the average.

This year, drivers in the Midwest, Great Plains states and the Rockies are paying quite a bit less than they did a year ago on Memorial Day weekend. The Minnesota average of $3.49 is 78 cents lower than last year, the biggest drop in the nation. Drivers in North Dakota, Nebraska, Oklahoma, Iowa and Kansas are all paying at least 50 cents per gallon less.

That's because last year some big Midwest refineries were taken offline to be upgraded to handle cheaper Canadian crude oil. That work is done and the refineries are churning out a lot of fuel, pushing down prices in the region.

The story is different on the coasts, though. Refineries there have to pay higher prices for global crude, and more refineries are seeing downtime in Texas and Louisiana than in recent springs, according to Kloza. Gulf coast refiners supply much of the nation, and especially the coasts, with fuel.

Pennsylvania drivers are paying $3.77 per gallon on average. That's 27 cents higher than last year, the biggest increase in the country. Drivers in the Carolinas and Alabama are paying at least 20 cents more than last year, though they are paying less than the national average.

As usual, California drivers are paying the most in the lower 48 states, at $4.15 per gallon, about 10 cents higher than last Memorial Day weekend.

Across the nation, all U.S. drivers will likely be paying less in the coming weeks, the result of a typical seasonal decline between late spring and early summer.

"Temperate-to-lower prices is the most likely path for the! next cou! ple of months," Kloza says. "And then in hurricane season you just cross your fingers."

Jonathan Fahey can be reached on Twitter @JonathanFahey

ECB ready to act, but how much will it help?

FRANKFURT, Germany (AP) — Investors and analysts are nearly certain: The European Central Bank will take action at its next meeting to boost the tepid recovery.

What's not at all certain is how much good that can do.

Any help is needed. The weak recovery in the 18 countries that use the euro is a source of risk and uncertainty for the rebounding U.S and global economy. The eurozone economy grew only 0.2% in the first quarter, gaining no speed from the quarter before. Worse, inflation is dangerously low at an annual 0.7%, well below the ECB's goal of just under 2%.

A long period of low inflation is a threat because it makes it harder for heavily indebted governments to cut their borrowings, and increases the pressure on them to keep imposing fiscal austerity in the form of higher taxes and restrained spending, which slow growth further.

Yet economists say the impact of most of the measures that are being talked about would likely be a marginal improvement and psychological reassurance, rather than a big bang.

Holger Schmieding, chief economist at Berenberg Bank in London, said the biggest impact may be to show that the ECB is willing and able to act.

Short of a complete surprise, such as a massive program to boost the amount of money in the economy through bond purchases, "what the ECB will do will have only very modest consequences."

At the ECB's last meeting in May, Draghi said the bank was "comfortable taking action next time," on June 5. Economists are taking him at his word, and so are foreign exchange markets. The euro has fallen 3 full cents since then and for now has stayed lower, trading below $1.37 Friday in anticipation of an interest rate cut, the most likely move.

The ECB could also offer more cheap credit for banks, perhaps on the condition that they loan it to small businesses. Or it could take the bolder move of starting bond purchases — an unprecedented step for the ECB but one the U.S. Federal Reserve has taken with arguable success to ! drive down market interest rates for companies and consumers.

Here are some of the reasons why economists are skeptical how much impact ECB action will have.

Clogged banks

The benchmark refinancing rate is already at a record low of 0.25%. The rate determines what it costs banks to borrow from the ECB, and strongly influences the rate at which banks lend to each other. Through them — the so-called "bank channel" — the ECB in theory controls the rates businesses pay for loans to expand their plants, or on what consumers pay for mortgages.

Yet rates are already very low.

And, more important, the bank channel is clogged.

Banks with troubled finances aren't passing on the low rates. The ECB is trying to improve confidence in the banks by reviewing their finances — and forcing the ones that are hiding losses to raise new capital, or even be sold or restructured. Economists say completing the review and straightening out the banks are the real key to getting the eurozone economy hitting on all cylinders. The review won't be done until this fall.

Meanwhile Analyst Carsten Brzeski at ING says a conventional rate cut and other measures will have "hardly any" effect on growth. He says that's probably why the bank hasn't cut rates since Nov. 13, despite promising every month to act if needed: "If it was the silver bullet, they would have done it already. "

Go negative

Another unconventional step discussed for months is a negative rate on money banks leave on deposit with the ECB — charging them for hoarding money in an attempt to push them to lend it out.

But it could backfire. Banks could pass the cost on to customers — the opposite of what the ECB is trying to do.

Blowback

A key factor weighing on inflation and growth is the strong euro, which hurts exports and makes imports expensive. Low rates in theory push down the euro by reducing returns on interest-bearing investments and therefore demand for the currency.

But measur! es that i! mprove prospects for the growth would also attract more investment — and tend to push the euro up.

The big kahuna

Bond purchases — a less likely option — would aim to drive bond prices up and their interest yields down, in hopes that those lower bond yields would be reflected in lower rates for other kinds of borrowing.

Problem is, eurozone bonds have already risen recently, and yields are low.

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That means any bond purchases would have less impact than they would have two years ago, at the height of the debt crisis.

Despite questions about impact Schmieding says the bank has to act. "With what Draghi has said, if he does nothing, his trust and credibility, his communication strategy, will suffer a lot," Schmieding said.

"So he'd better come up with something — if it has a lot of impact or not."

Rethink your finances and retirement risks

Maybe the best way to save for retirement is to actually start budgeting for a short bout of insecurity. Or lots of insecurity.

The looming pension cuts — on top of higher health care costs — facing City of Detroit retirees should give anyone reason to reconsider their retirement risks.

What would you do if you suddenly faced extra health care expenses of $400 or more a month? Or if you suddenly lost $600 a month, as some Detroit retirees faced by an annuity clawback will do, as the city works its way out of bankruptcy.

Sometimes, what looks like a healthy nest egg could easily be scrambled into an ugly mess.

To be sure, record highs for the Dow Jones industrial average in recent weeks make many consumers overall feel more comfortable about having enough money in retirement. Some people's confidence can rebound with stock prices.

About 18% of workers nationwide are now very confident, up from 13% in 2013, about having enough money for a comfortable retirement, according to a 2014 Retirement Confidence Survey released in March by the Employee Benefit Research Institute.

But here's the catch: The increased confidence was found almost exclusively among those with higher household income and strongly correlated with whether someone had a retirement plan or retirement savings.

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Nearly half of workers without a retirement plan were not at all confident about their financial security in retirement.

Many workers had little or no savings for retirement.

Among workers providing savings data for the survey, about 36% said they had less than $1,000 in savings. Many of those households earned less than $35,000 a year in income.

Not having enough savings is only one side of the story.

Many seniors now also have more debt in their retirement years than they expected.

Older consumers are carr! ying more mortgage debt than they had in the past, according to data from the Consumer Financial Protection Bureau. Much of that mortgage debt is attributed to the refinancing boom — and the housing bust.

About 30% of homeowners age 65 and older carried a mortgage in 2011, the most recent data available. That's up from 22% in 2001.

For those ages 75 and older, the rate is 21.2%, up from 8.4% in 2001.

"A home can be a place of security for older Americans in their retirement years — a roof over their heads as well as a valuable asset," said Richard Cordray, director of the Consumer Financial Protection Bureau, in a statement.

"But as more seniors carry significant mortgages into retirement, they put themselves at risk of losing their nest eggs and their homes."

The median amount that older homeowners owed on their mortgages was $79,000 — up 82% from about $43,000 in 2001.

A dramatic drop in home values, and a slow climb back, cut into home equity and contributes to more financial insecurity, too. Older consumers can be at greater financial risk when they have built up less equity in their homes, which can be their primary or even only asset.

Delinquency and foreclosure are significant issues among a small group of older homeowners, according to the consumer watchdog group. Nearly 5% of homeowners ages 65 to 74 were seriously delinquent in paying their mortgages, meaning they were more than 90 days late or in foreclosure, in 2011. That's up from 0.85% in 2007.

What is clear is that it is not enough to simply create a bucket list of things to do in retirement. More of us need to re-examine our bills, spending habits and get a retirement rainy day fund. All too often, it does not work out as planned.

Obviously, it's tougher to get a job, overcome health issues and pay medical bills, as well as difficult to recover from an economic setback in retirement than when one is younger.

The consumer watchdog group suggested homeowners try to pay off t! he mortga! ge by retirement or early in retirement; avoid taking out a home equity loan or refinancing to dip into equity, and consider their expenses if they're retiring with a mortgage.

The crisis in retirement confidence is very much part of the discussion, as 10,000 baby boomers are to reach retirement age each day for the next 17 years.

While many may discuss delaying retirement, the average American is still retiring at age 59, said Mark Hug, executive vice president of product and marketing at Prudential Insurance of America.

Feeling nervous and ill-prepared about retirement is a common theme across many groups, including women and the lesbian, gay, bisexual and transgender communities, he said.

The key is not to give into the fear. Try to form a your own plan of adjustment for retirement expenses.

Contact Susan Tompor at stompor@freepress.com