Stocks Insurance: June 2014

Sunday, June 29, 2014

Pandora Media Looks Like a Risky Bet

Pandora Media (P)'s results for the quarter were quite impressive, with both profits and revenue increasing. But the forecast for earnings per share for this year lies between $0.13 and $0.17, which is below analysts' expectations of $0.19 per share. The main reason behind this weak forecast for earnings is the aggressive investments that Pandora is making to keep up growth in users and to boost advertisement sales in the face of tough competition from Apple (AAPL) and Google.

CEO Brian McAndrews said, "Our bias will continue to be toward revenue growth and capturing additional market share." So Pandora could see some weak earnings figures since it is eyeing a greater share of the market. But is it a good buy at its 52-week high if we look at the various troubles that it is facing.

Increase in Royalties Will Burden Pandora Even More

Pandora pays record companies and publishers in lieu of the songs it plays. Last year, it paid 49% of its revenue to record companies, while 4% of its revenue went to publishers. Due to this large disparity in payments, publishers are struggling to earn money from digital music. Because of the royalty payments, Pandora has to pay for each song it plays, so it is unprofitable as of now. But for every song that Pandora plays, it gets money from ads.

Licensing organization ASCAP is likely to increase the current rate of royalties, according to Business Insider. It is mainly on account of publishers that ASCAP is increasing this rate because, as mentioned already, the publishers are getting less pay as compared to singers and record companies. But this increase will put extra burden on Pandora's balance sheet to the extent that it can lead them to bankruptcy since the company had just $344 million in cash at the end of the last quarter, while it paid $339 million to publishers and record companies in 2013. An increase in royalties can further increase the payout to other parties and handicap Pandora.

Cut-Throat Competition

Also, despite being one of the world's largest online music service companies, having 76 million active users, Pandora faces tough competition from Apple's new iTunes radio service and Google's music subscription service.

When compared to Google and Apple, Pandora lags in technology. Both Google and Apple have their own mobile hardware that enables them to incorporate their service directly into the mobile operating system. Also, if people turn to YouTube, Google has the advantage because of the wealth of data it has on its users.

Google is also pushing its All Access music service to next-generation devices such as the Google Glass. Recently, Google sent VIP invitations to subscribers of its music service to join the Glass Explorer program. Hence, if Google's Glass clicks in the future and becomes a hit with customers, then it might be difficult for Pandora to penetrate this market as well.

Apple is also pushing forth its iTunes radio service in an aggressive manner. It recently launched the service in Australia, making it the first non-U.S. country to get the platform. In the future, Apple aims to launch iTunes Radio in various markets such as the UK, Canada and New Zealand in early 2014. In the long run, Apple is aiming to take the service to more than 100 countries ultimately.

An Overcrowded Industry

To combat these rivals, Pandora is coming up with its own strategies. It is aiming to increase the value of its advertisements by increasing its ad load. In this regard, Pandora is introducing advertising for its in car service this year, and hopes to expand the market for this new service.

However, Google and Apple also have plans to enter this service. With mobile and in-car service already taken into consideration, not much space is left for Pandora's expansion. It will have to venture into new areas like on-demand streaming, which is currently dominated by YouTube. This will increase its advertising avenues without need of increasing the user base. Pandora will have to work hard to know the listening habits of its target audience.

There are other potent competitors as well in the form of Spotify, Rdio, Beats Music and YouTube. This overcrowding of the music industry has caused Pandora to spend heavily on advertising and promotion to attract new customers, and this will ultimately hurt earnings.

The company is increasing its sales force to sell more slots to its advertisers to direct some ad budget to Pandora. Because of this extra selling and marketing costs, margin growth has been offset to some extent.

What Should Investors Do?

Every investor wants to know whether the company could be profitable or not. And Pandora seems to have answered that question with the company expecting to show a profit for the full fiscal year in 2014, even though it had a weak start with losses in the first quarter. Yet, Pandora has to work more to impress investors. The company has covered a lot of ground in the U.S. but it might lose in the wake of competition from Google and Apple. The probable increase in royalties could be another headache, and could even drain its cash reserves and lead to bankruptcy.

So investors should sell Pandora since it is already trading at its 52-week high, and stay away from it till the time the company's strategies start giving results.

Currently 0.00/512345

Rating: 0.0/5 (0 votes)

Subscribe via Email RSS Feeds

Subscribe RSS Comments Please leave your comment:
More GuruFocus Links

Latest Guru Picks	Value Strategies
Warren Buffett Portfolio	Ben Graham Net-Net
Real Time Picks	Buffett-Munger Screener
Aggregated Portfolio	Undervalued Predictable
ETFs, Options	Low P/S Companies
Insider Trends	10-Year Financials
52-Week Lows	Interactive Charts
Model Portfolios	DCF Calculator
RSS Feed	Monthly Newsletters
The All-In-One Screener	Portfolio Tracking Tool

Saturday, June 28, 2014

Apple Doesn't Seem Interested in Broadcom's Cellular Division

I have long been interested in seeing Apple (NASDAQ: AAPL ) acquire cellular IP in order to integrate it into its custom-designed A-series of processors for the iPhone and iPad. Qualcomm (NASDAQ: QCOM ) -- which supplies most of the world's smartphone applications processors -- provides many of Apple's competitors (such as Samsung, HTC, and LG) with integrated processor and modem solutions, which means a potential efficiency edge over the Cupertino-based smartphone giant.

That said, though there is a pretty strong cellular team and IP available for sale, Apple still doesn't look like it wants to bite.

There's value in designing custom processors
When Broadcom (NASDAQ: BRCM ) threw in the proverbial towel on its cellular efforts, a pretty strong argument could have been made that Apple was a likely buyer, as it has shown a tendency to want to keep as much non-trivial silicon as possible in-house.

Keep in mind that the reason Apple builds its own A-series processors is that it can optimize the design of the system on a chip to deliver maximum performance to the end user, because Apple knows what software runs on iOS devices and can tailor its micro-architectures to that software.

Cellular is a different animal
When it comes to cellular basebands and RF, there's no chip vendor out there today with more know-how and experience than Qualcomm. As a result, Apple buys standalone cellular modems exclusively from Qualcomm. Though many companies have hoped to be a second source, none of these contenders has been able to deliver.

If Apple were to build its own cellular modem, it would do so with the intention of differentiating beyond what an off-the-shelf Qualcomm modem could provide.

How realistic is it that Apple would be able to do a product that is even equal to -- let alone better than -- what Qualcomm offers today? With the Broadcom assets along with a lot of money, Apple could eventually do it, but it would be expensive and difficult.

So, no cellular for Apple, it seems
Although it seems likely that Apple would benefit from a power efficiency boost if it were to integrate a cellular baseband into its A-series chips, this baseband would need to be best-in-class for Apple to actually go ahead and do that.

So, given that Qualcomm is well ahead of what any vendor on the market has technologically, any benefits of integration would probably be more than offset by IP that just isn't yet up to snuff.

Foolish bottom line
The mystery of what will eventually happen to Broadcom's cellular business should be answered pretty soon -- expect an update at the company's late-July earnings call. However, given the various rumors that have been flying around (MediaTek and, more recently, the Chinese government as buyers), it doesn't look like Apple is interested.

Leaked: Apple's next smart device (warning -- it may shock you)
Apple recently recruited a secret-development "dream team" to guarantee that its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are even claiming that its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts that 485 million of these devices will be sold per year. But one small company makes this gadget possible. And its stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and to see Apple's newest smart gizmo, just click here!

Friday, June 27, 2014

Americans still hesitant to spend more

NEW YORK (CNNMoney) Americans' incomes are rising, but they aren't spending their extra cash.

Personal income rose 0.4% in May, according to the Bureau of Economic Analysis. It may not sound like much, but it marked the fifth straight month in a row that incomes rose. Not only that, but incomes are rising faster than inflation -- an encouraging sign that people are gaining more buying power.

After accounting for both taxes and inflation, disposable income is up 1.9% from a year ago. This is an important development because consumer spending drives the bulk of the U.S. economy.

But here's the catch: Consumers haven't been going out and spending. Instead, they're choosing to sock that money away.

After accounting for mildly higher prices, consumer spending has actually fallen for two months in a row. In May, Americans cut back on eating out, going to the movies, and buying clothes. They spent less on necessities like groceries and utilities. Meanwhile, health care spending has fallen considerably since the beginning of the year, and has now been flat for two months in a row.

The few exceptions to these trends include spending on housing, gasoline and cars, which are rising.

"Consumers bought more homes and cars, saved a little more for a rainy day, and ...that was about it. Not much left for anything else," said Jennifer Lee, senior U.S. economist with BMO Capital Markets.

Pritzker: minimum wage is insufficient

As of May, Americans were saving about 4.8% of their monthly income.

To put that number in perspective, consider two extremes: Befor! e the recession in 2005, when many Americans were overextending their finances, they were saving less than 3% of their income each month, on average. At the height of the crisis in 2009, they became more conservative, saving about 6% of their income. We're now in between those two levels.

Looking further back through history, the savings rate was at its highest level on record in the early 1970s, when it was in the 12% to 14% range.

What it means for the Fed: Prices are rising and the job market is improving, but the economy remains far from robust. Federal Reserve Chair Janet Yellen has made it clear that she's watching a variety of indicators, including wages, to determine when the Fed should start to pull back on its stimulus efforts.

In a press conference last week, she said that she expects to see wages rise faster than inflation this year, thereby increasing Americans' take-home pay. That, in turn, should boost consumer spending and the broader economy this year.

"My own expectation is that as the labor market begins to tighten, we will see wage growth pick up," she said.

But if that fails to happen and wages don't keep up with inflation, she would worry about consumer spending falling.

As of May, inflation is up 1.8% over last year, falling below the Fed's target for 2% inflation.

Thursday, June 26, 2014

N.Y. Attorney General Accuses Barclays of 'Dark Pool' Fraud

N.Y. Attorney General Accuses Barclays of Dark Pool Fraud Simon Dawson/Bloomberg via Getty Images Barclays CEO Antony Jenkins NEW YORK-- The New York state attorney general has filed a securities fraud lawsuit against Barclays , accusing the British bank of giving an unfair edge in the United States to high-frequency trading clients even as it claimed to be protecting other customers from such traders. The lawsuit, which relates to Barclays' LX Liquidity Cross "dark pool" alternative trading system, alleges that the bank promised to get the best possible prices for customers looking to buy or sell shares but instead took steps that maximized the bank's profits and executed nearly all of its customers' stock orders on LX instead of on exchanges or other venues that might have offered better prices. The New York Attorney General's action is the highest profile case yet to emerge in the U.S. authorities' efforts to ensure that dealers aren't ripping off investors in increasingly automated stock markets. These probes have been progressing for up to a year, but took on additional urgency in recent months, after best-selling author Michael Lewis released the book "Flash Boys: A Wall Street Revolt," which contends that markets were rigged. Dark pools were originally created to allow investors to execute big trades without tipping off the market. But ever-larger volumes of trades have been shunted into dark pools and their critics say the opacity of the markets may be resulting in more and more investors getting ripped off. Barclays' London-listed shares were down 4.5 percent at 219.65 pence by 0753 GMT (3:53 a.m. Eastern time) on Thursday, their lowest level since November 2012 and extending their fall this year to 20 percent. The lawsuit delivers another blow to Chief Executive Officer Antony Jenkins' efforts to restore the bank's reputation after a series of scandals. He has said its culture, which has been criticized as high-risk, high-reward, had to change and that systems and controls are improving, but the emergence of past sins are hampering his efforts. New York Attorney General Eric Schneiderman said Barclays told customers who chose to trade in its dark pool that they would be protected from "predatory traders," which use their speed advantage to deprive other investors of small profits on every trade. But in fact customers weren't protected at all, and the bank in fact courted predatory high-frequency traders in part by charging them virtually nothing, Schneiderman alleged. "Barclays grew its dark pool by telling investors they were diving into safe waters," Schneiderman said. "Barclays' dark pool was full of predators -- there at Barclays' invitation." "We take these allegations very seriously," Barclays said in an emailed statement. It added that it was cooperating with the authorities, looking at the matter internally, and that the integrity of markets was a top priority for the bank. Schneiderman is looking at dark pools, which are typically owned by brokers, including all of the big banks, and where participants are anonymous and trading information is hidden until after the trades are completed. The U.S. Securities and Exchange Commission has also taken an increased interest in issues surrounding dark pools and high-frequency trading. SEC Chair Mary Jo White earlier this month said her agency was developing a series of rules that would seek to make markets more transparent and fair for all investors, and the agency has also stepped up enforcement actions against dark pool operators. Banks have admitted to bad behavior in other markets, after probes showed collusion in currency trading and short-term interest rate products, among other areas. No Air Bag, No Brakes Jenkins took over as Barclays chief executive in August 2012, replacing Bob Diamond who was ousted after the bank was fined for the alleged manipulation of Libor benchmark interest rates. Jenkins is trying to improve profitability by cutting costs, including the axing of around a quarter of investment bank jobs, while pushing for the change in culture. But the bank continues to be dogged by issues around past conduct, however, and last month it was fined 26 million pounds ($43.8 million) for past failures in internal controls that allowed a trader to manipulate the setting of gold prices. The New York Attorney General's complaint against Barclays, which is based on internal communications provided by former employees, says while the firm told its clients it would keep high-frequency traders that engage in "predatory" trading practices out of its dark pool it never actually prevented any trader from participating. For example the complaint alleged that Barclays falsified marketing material it said showed the extent and type of high-frequency traders in its dark pool by not including high-frequency trading firm Tradebot Systems. Barclays had already identified Tradebot, which at the time was the largest participant in the dark pool, as having been engaged in aggressive trading behavior. A spokeswoman for Tradebot, of Kansas City, Missouri, said the firm had no comment. Barclays wooed high-frequency traders by disclosing detailed, sensitive information about other customers to the firms to help ensure their aggressive trading strategies were effective, and by charging them almost nothing, the complaint said. HFT accounts for around half of all U.S. trading volume. The complaint didn't specify the amount of damages being sought from Barclays. Barclays also told its clients it doesn't favor its own dark pool when routing client orders to trading venues, when in reality it was doing just that, the complaint said. One former Barclays employee told the Attorney General's office that based on the high amount of client orders Barclays was sending to its own dark pool, better trading opportunities may have been missed elsewhere. There was a lot going on in the dark pool that was not in the best interests of Barclays clients, one former director said, according to the complaint. "The practice of almost ensuring that every counterparty would be a high-frequency firm, it seems to me that that wouldn't be in the best interest of their clients ... It's almost like they are building a car and saying it has an air bag and there is no air bag or brakes." The SEC is considering forcing dark pools and firms that match customers' orders internally to tell regulators and the public how they operate. In early June, the SEC filed a civil lawsuit against dark pool operator Liquidnet for allegedly improperly using its subscribers' confidential trading information to market its services. The SEC declined to comment on the lawsuit. -.

Swiss bank UBS blames a rogue trader at its London office for a $2.3 billion loss that is Britain's biggest-ever fraud at a bank. Kweku Adoboli, the 32 year old trader, is sentenced to seven years in prison. Britain's financial regulator fines UBS after finding its internal controls were inadequate and allowed Adoboli, a relatively inexperienced trader, to make vast and risky bets.

Wednesday, June 25, 2014

Gilead Sciences: What If Sovaldi Sales Peak Quickly, Fall Fast?

One of the conundrum’s facing any investor looking to buy Gilead Sciences (GILD) is what to make of Sovaldi’s sudden success. The Hepatitis C drug has been so successful, that the market now worries that will cure patients so quickly that sales will rise and then fall faster than anyone inititally expected.

Citigroup’s Yaron Werber believes that even if that happens, Gilead Sciences will be OK. He explains why:

We have revisited our model based on a faster launch, quick peak and then a decline phase. However, as the launch is staggered globally, we see more resilience then feared…

We conducted an analysis of previous demand for hepC drugs and conclude that the market can support strong sales driven by the natural rate of progression into advanced disease annually. More so, as the launch is staggered globally, we see a natural progression of increasing sales globally over time. Based on the strong demand for Sovaldi, we are raising ests in 2014-'16 to $7.5B, $11B, $12B, then flattening sales out from '16-'18, and reducing them to $6.5B by 2023. In essence, our sales are now higher initially but also the peak is lower but we do see sales remaining steady longer than is currently feared.

Gilead trades at 13 times Werber’s 2014 earnings estimate, 9.2 times his 2015 forecast and 8.6 times his 2016 estimate, prices that he thinks make its shares “look cheap.” He also sees value in idelalisib and other drugs Gilead has in the works, and with its massive free cash flow, it can make acquisitions and return capital to shareholders. “Hence, the bear case of a quick peak and then a compounded cliff is unlikely, in our view,” Werber says.

Shares of Gilead Sciences have ticked up 0.1% to $73.69 at 1:58 p.m. today, a solid day given Amen’s (AMGN) 0.7% drop to $125.53 and Biogen Idec’s (BIIB) 0.7% decline to $307.76.The iShares Nasdaq Biotechnology ETF (IBB) has fallen 0.5% to $240.34, while the SPDR S&P Biotech ETF (XBI) has dropped 1.2% to $1434.68.

Tuesday, June 24, 2014

Don’t Buy the Sucker’s Rally in 3D Printing Companies

Popular Posts: Don't Tread on Me – 3 Great All-American Dividend Stocks to Buy3 Things That Could Get Amazon Stock Popping AgainThe Top 10 S&P 500 Dividend Stocks for March Recent Posts: Don’t Buy the Sucker’s Rally in 3D Printing Companies Spiking Oil Prices, Rising Energy Stocks Are Headed for a Fall Oracle Stock a Buy on the Dip After Earnings View All Posts Don’t Buy the Sucker’s Rally in 3D Printing Companies

Just when shares in 3D printing companies like 3D Systems (DDD), Stratasys (SSYS) and ExOne (XONE) looked like there was no bottom in sight, their stocks reversed trend — but these names are still very much losers on the year and remain speculative bets at best.

3DSystems185 Don't Buy the Sucker's Rally in 3D Printing Companies 3D printing companies represent an exciting new technology — in its very early stages. That has names like DDD stock, XONE stock and SSYS stock running on momentum, where ever-accelerating revenue growth — and hope and hype — supports the share price more than the bottom line.

Profitability, if it exists at all, can be immaterial, and that’s not necessarily a bad thing. That’s how it goes sometimes with young and promising businesses. Amazon (AMZN), famously, didn’t earn a penny in profit for years — and still doesn’t in some surprising quarters — but it’s been a tremendous stock to own over the long haul.

The problem is that most young companies don’t go on to become Amazon, and that’s where things get dicey for shares in 3D printing companies.

A number of 3D printing companies have gone on hot runs recently, and that’s stoking renewed interest in DDD stock, XONE stock and SSYS stock, the biggest 3D printing companies by market cap.

Heck, in the last month alone, DDD stock is up more than 5%, SSYS stock gained 15% and XONE stock rallied 30%.

Part of the recently renewed euphoria for shares in 3D printing companies apparently was started by a client note from Pacific Crest Securities discussing pilot programs at Amazon and Wal-Mart (WMT) for 3D printed objects.

3D Printing Companies: A Bad Bet for a Late Bull Market

That’s nice, but not much to support an extended run. After all, shares in 3D printing companies are still big losers in 2014, and its not like the headwinds holding them back have disappeared.

Lengthen the time-frame on a stock chart and you’ll see that shares in the big 3D printing companies have been portfolio death in 2014. Here’s the carnage for the year-to-date:

SSYS stock: -17% DDD stock: -39% XONE stock: -41%

As we noted earlier, shares in these 3D printing companies became victims of their own success. 3D printing companies were favorites last year, propelling shares of some of the biggest names to some dizzying heights. SSYS stock rose 128% in 2013. DDD stock gained more than 160%. XONE stock saw its shares rise 68%.

But those kinds of hot runs will stretch the valuation of any stock, and 3D printing companies were no exception. When valuations get stretched to almost 300 times forward earnings (XONE stock today), anything that calls an accelerating growth trajectory into question is going to spark a selloff.

And that’s pretty much where we sit with shares in 3D printing companies. They’re crazy expensive, meaning they have to overdeliver time and time again — at just the wrong time in the market cycle.

This late bull market is rewarding defensive sectors like utilities, not momentum names. That makes the recent upturn in 3D printing companies look more like sucker’s rally than a lasting trend.

As of this writing, Dan Burrows did not hold a position in any of the aforementioned securities.

Monday, June 23, 2014

Why Energy And Utility ETFs Are Crushing The Competition

Related XLE ETF Outlook For Tuesday, June 17, 2014 (ARGT, THD, XLE, TAN, SUNE, SPWR) Energy ETFs Surge Into High-Demand Summer Months

Picking the best sector of the market in any given year can be tough, considering there are a multitude of factors that must align for your picks to come out on top.

This year, however, there is a neck-and-neck race for supremacy by both utility and energy stocks that may have considerable staying power for the remainder of 2014.

A mid-year checkup reveals that the Utility Select Sector SPDR (NYSE: XLU) and Energy Select Sector SPDR (NYSE: XLE) are far outstripping the broader market in total returns. Both ETFs have gained approximately 15.50 percent in 2014, while the SPDR S&P 500 ETF (NYSE: SPY) has notched a modest seven percent advance.

While XLU and XLE are basically on par in year-to-date performance, the paths to those gains has been markedly different.

Related: 3 Gold & Silver Mining ETFs Rocketing Higher In June

Utility stocks made a big jump in the first quarter of the year, as a combination of falling interest rates and defensive repositioning led to significant inflows. According to recent data, XLU has gained over $1.1 billion in new assets so far this year.

Utilities are often considered a safe haven because of their strong dividend streams and non-cyclical business cycles. This makes them a preferred hiding spot when bullish momentum loses steam.

Heightened volatility and extended valuations in high beta sectors, such as consumer discretionary stocks, also played a big role in this flight to quality.

Energy stocks, on the other hand, have been flying more recently because of the strength in oil prices. The United States Oil Fund (NYSE: USO) has gained nearly 11 percent in 2014 on the back of high demand, shrinking supplies and geopolitical uncertainty in the Middle East.

The 47 large energy stocks that make up XLE are typically very sensitive to changes in oil and natural gas prices, because those changes directly impact their margins. Investors have clearly taken notice of this strength, as over $3.3 billion in new money has been injected into XLE over the last six months.

While the second half of the year may see new sector themes emerge, the fundamental drivers of strength in XLU and XLE could continue in earnest. Higher oil prices and fear of a market correction may help support these sectors throughout the remainder of 2014.

Posted-In: energy ETFs energy stocks utility ETFsEducation Sector ETFs Commodities Markets ETFs General Best of Benzinga

Most Popular Micron Technology Earnings Preview: Can Momentum Continue? Earnings Expectations For The Week Of June 23: Nike, Walgreen And More Stocks To Watch For June 23, 2014 Morgan Stanley Reiterates On General Electric Following Alstom Board Recommendation Chinese Conference May Be Moving 3D Printing Stocks Higher Barron's Recap: 50 Best Annuities Related Articles (SPY + USO) Why Energy And Utility ETFs Are Crushing The Competition Is Investor Sentiment Flashing A Warning? Existing Home Sales Up 4.9%, Beating Street Views By 3% Room For Collecting Premiums As Options Uncertainties Remain Abuzz What History Tells Us About Markets And Middle East Crises Iraq Is Back - Is It Time To Panic? Around the Web, We're Loving... Abercrombie Stems Bleeding Sales in Key Brand A Pristine Trading Plan for Intra-Day Trading Gold Falls to 16-Week Low on Firm Equities

Sunday, June 22, 2014

Ask Matt: Don't rush in on individual stocks

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

Q: What's the most I could have lost in stocks the past three years?

A: Investors like to think they can't do all that much damage. Many investors are blinded by the fact that the market tends to rise. So even if they choose poorly, how bad can the losses really be?

But that's not really the case.

Investors who don't do their research, pick stocks about to crash or are just plain unlucky can cause tremendous damage to their portfolios. Bad stock picking doesn't just hurt your returns, but has the potential of destroying your portfolio. Investors who picked the worst stock in the current Standard & Poor's 500 in 2011, 2012 and 2013 would have suffered a 93% loss over the three years. That means an initial investment of $10,000 in 2011 would be worth a mere $651 at the end of three years. That's a loss few investors can ever recover from.

It's not as hard as it seems. Investors chasing alternative energy and solar during the craze of 2011 might have jumped into First Solar. Those shares, though, fell 74.1% in 2011. Hoping to score from the mobile gadget craze, these investors might have seen Best Buy as a winner. But shares of the retailer fell 49.3% in 2012. And then investors hoping for a commodity bounce, who jumped into Newmont Mining, lost 50.4%.

These numbers are a big reminder to investors that trying to pick individual stocks is risky and the losses can be enormous when you're wrong. Don't think the market's general upward trend will bail you out.

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

Follow Matt Krantz on Twitter: @mattkrantz.

Saturday, June 21, 2014

Why Tesla Stock Is Up 12% This Week

Tesla Motors Inc. (Nasdaq: TSLA) stock has gained 12% in the last two trading sessions and reached its highest price since April today (Tuesday) when the stock touched $235.54 this afternoon.

Tesla has always been a momentum stock that experiences sharp ups and downs depending on the company's news, and this week's spike is a prime example.

#symbols-c4ca4238a0b923820dcc509a6f75849b { width: 253px; font-family: Arial; font-size: 11px; color: #333333; } #symbols-c4ca4238a0b923820dcc509a6f75849b .header { float: left; font-family: Georgia; font-size: 14px; color: #456626; line-height: 14px; padding-left: 14px; font-weight: bold; } #symbols-c4ca4238a0b923820dcc509a6f75849b .date { float: right; padding-right: 32px; font-weight: bold; } #symbols-c4ca4238a0b923820dcc509a6f75849b .chart { font-family: Georgia; font-size: 12px; color: #456626; width: 253px; height: 135px; line-height: 135px; text-align: center; } #symbols-c4ca4238a0b923820dcc509a6f75849b ul { list-style: none; padding: 0; margin: 0; } #symbols-c4ca4238a0b923820dcc509a6f75849b li { padding: 0; margin: 0; } #symbols-c4ca4238a0b923820dcc509a6f75849b li:nth-child(odd) { background-color: #eeebe6; } #symbols-c4ca4238a0b923820dcc509a6f75849b .symbols-item .name { float: left; width: 100px; overflow: hidden; padding: 3px; } #symbols-c4ca4238a0b923820dcc509a6f75849b .symbols-item .price { float: left; width: 55px; overflow: hidden; padding: 3px; text-align: right; } #symbols-c4ca4238a0b923820dcc509a6f75849b .symbols-item .percent { float: left; width: 80px; overflow: hidden; padding: 3px; text-align: right; } #symbols-c4ca4238a0b923820dcc509a6f75849b .symbols-item.active { background-color: #456626; color: #ffffff; } #symbols-c4ca4238a0b923820dcc509a6f75849b .chart-container { width: 253px; height: 135px; padding: 0 0 5px 0; } #symbols-c4ca4238a0b923820dcc509a6f75849b .chart-container img { width: 253px; height: 135px; max-width: none; } .clear { clear: both; } TESLA MTRS NASDAQ: TSLA Jun 20 loading chart... Price: 229.59 | Ch: 1.80 (0.8%)

TSLA stock gained nearly 9% on Monday following reports that Nissan Motor Co. Ltd. (OTCMKTS ADR: NSANY) and BMW AG are in collaborative talks with Tesla to help expand electric vehicle (EV) charging technologies.

The three automakers account for 80% of the world's EV sales combined, and, together, the companies are looking to solve one of the industry's biggest problems: vehicle charging.

EVs have different charging standards depending on the brand, making it impossible for a Nissan owner to charge his or her car on a Tesla charger, and vice versa. Universal charging standards would benefit all electric car makers, as consumers could more easily power their vehicles.

Concern over access to chargers, or "range anxiety," is thought to be one of the biggest factors holding back the EV market.

"It is obviously clear that everyone would benefit if there was a far more simple way for everyone to charge their cars," one executive who declined to be named told The Financial Times.

Yesterday's news followed last week's bold announcement from Tesla Chief Executive Officer Elon Musk that he would open up all of the company's patents to his electric-vehicle competitors. Musk noted that by sharing Tesla's patents, other car manufacturers could help expand and improve the EV market.

"Our true competition is not the small trickle of non-Tesla electric cars being produced, but rather the enormous flood of gasoline cars pouring out of the world's factories every day," Musk said. "We believe that applying the open source philosophy to our patents will strengthen rather than diminish Tesla's position in this regard."

The news of the three largest EV manufacturers joining forces carried into TSLA's performance today as the stock gained more than 4% by Tuesday afternoon.

For investors wondering what TSLA stock will do now, here's what they can expect...

Where Tesla (Nasdaq: TSLA) Stock Is Headed Now

In the short term, volatility will remain the name of the game for Tesla stock, just as it has over the past 18 months.

From January 2013 through February 2014, TSLA soared an incredible 637%. From there, the stock sold off more than 15% from March through May. Now, this week's gains have put TSLA up 12% for the month of June.

It's almost impossible to predict how TSLA stock will perform day to day, as the slightest hint of good or bad news moves the stock considerably. For that reason, TSLA is not a short-term play.

But for investors looking for long-term growth, TSLA is an attractive option.

Backed by Musk - one of the world's boldest and most innovative CEOs - Tesla is hell-bent on changing the landscape of the automotive industry, regardless of what it takes. That was evidenced last week when he gave away his EV technology secrets to his biggest competitors.

"Tesla Motors was created to accelerate the advent of sustainable transport," said Musk. "If we clear a path to the creation of compelling electric vehicles, but then lay intellectual property landmines behind us to inhibit others, we are acting in a manner contrary to that goal."

Tesla's biggest competitors appear on board with Musk's strategy, and that's good news for TSLA shareholders. Rather than taking Tesla's patents and using the information for themselves, they have decided that collaborating and improving the world's EV charging infrastructure will help all EV manufacturers.

Money Morning's Chief Investment Strategist Keith Fitz-Gerald also says the long-term potential for TSLA stock is undeniable.

"I think Elon Musk is one of the most dynamic CEOs on the planet, and I believe he has the potential to make Tesla a $1,000 stock within the decade," Fitz-Gerald said.

Editor's Note: Elon Musk has helped Tesla stock gain a whopping 128% in the past year as the company operates as a major tech game changer.

Now Tesla is engaged in a highly sensitive venture called BlueStar that could disrupt $737 billion of the U.S. economy and impact 98% of the population.

Few details concerning BlueStar have made their way into the press. However, a recent investigation uncovered some shocking revelations... take a look.

Where do you think TSLA stock is heading from here? Let us know on Twitter @moneymorning using #Tesla.

Financial Times: Electric Car Groups Eye Collaboration over Charging Technology

Friday, June 20, 2014

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.

>>5 Blue-Chip Stocks to Trade for Gains: Must-See Charts

Just take a look at some of the big movers in the under-$10 complex from Thursday, including New Concept Energy (GBR), which is exploding higher by 29%; Golden Minerals (AUMN), which is ripping to the upside by 27%; StemCells (STEM), which is soaring higher by 20%; and Swisher Hygiene (SWSH), which is moving up by 17%. 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's ripping to the upside today is American Apparel (APP), which I highlighted in May 30's "5 Stocks Ready to Break Out" at around 60 cents per share. I mentioned in that piece that shares of American Apparel were starting to bounce higher right off its 50-day moving average. That bounce was starting to push shares of APP within range of triggering a big breakout trade above a key downtrend line that was acting as resistance for over a month.

>>5 Stocks With Big Insider Buying

Guess what happened? Shares of American Apparel finally triggered that breakout today after the stock consolidated and hug its 50-day moving average for a few weeks. This stock spiked sharply higher at the open tagging an intraday high of 78 cents per share with massive upside volume. That represents a large gain of 30% for anyone who bought this stock at around 60 cents per share in anticipation of that breakout. As you can see, trading small-cap stocks can lead to massive profits in a very short timeframe.

Traders should continue to watch shares of APP here, since this stock could still be in the early stages of making a much larger move to the upside. The next key resistance levels to watch for a potential breakout trade are at today's intraday high of 81 cents to more resistance at 82 cents per share.

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.

Himax Technologies

One under-$10 semiconductor player that's starting to move within range of triggering a near-term breakout trade is Himax Technologies (HIMX), which provides display imaging processing technologies to consumer electronics worldwide. This stock has been destroyed by the sellers so far in 2014, with shares off sharply by 54%.

>>4 Big Stocks to Trade (or Not)

If you glance at the chart for Himax Technologies, you'll notice that this stock has been downtrending badly for the last three months and change, with shares falling from its high of $16.08 to its recent low of $5.89 a share. During that downtrend, shares of HIMX have been making mostly lower highs and lower lows, which is bearish technical price action. That said, shares of HIMX have now started to rebound a bit off that $5.89 low and it's starting to push within range of triggering a near-term breakout trade.

Traders should now look for long-biased trades in HIMX if it manages to break out above some near-term overhead resistance levels at $6.80 to $7.05 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 action of 6.86 million shares. If that breakout gets underway soon, then HIMX will set up to re-test or possibly take out its next major overhead resistance levels at its 50-day moving average of $7.74 a share to $8.04 a share. Any high-volume move above those levels will then give HIMX a chance to tag $9 to $9.50 a share.

Traders can look to buy HIMX off weakness to anticipate that breakout and simply use a stop that sits right around some key near-term support levels at $6.12 to $5.89 a share. One can also buy HIMX 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.

Imris

Another under-$10 health care player that's starting to move within range of triggering a near-term breakout trade is Imris (IMRS), which designs, manufactures and sells image-guided therapy solutions that enable surgeons to obtain information and make decisions during the course of procedures. This stock has been slammed hard by the bears so far in 2014, with shares off sharply by 31%.

>>3 Big-Volume Stocks to Trade for Breakouts

If you take a look at the chart for Imris, you'll see that this stock has been downtrending badly for the last three months and change, with shares moving lower from its high of $2.90 to its recent low of 79 cents per share. During that downtrend, shares of IMRS have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of IMRS have now started to rebound sharply higher off that 79 cents per share low and it's now starting to move within range of triggering a near-term breakout trade.

Market players should now look for long-biased trades in IMRS if it manages to break out above its 50-day moving average of $1.16 a share and then once it takes out some more key overhead resistance at $1.20 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 271,398 shares. If that breakout materializes soon, then IMRS will set up to re-test or possibly take out its next major overhead resistance levels at $1.33 to $1.52 a share, or even its 200-day moving average of $1.59 a share.

Traders can look to buy IMRS off weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support at $1 a share. One can also buy IMRS 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.

Bebe Stores

One under-$10 apparel stores player that's starting to move within range of triggering a major breakout trade is Bebe Stores (BEBE), which designs, develops and produces a line of women's apparel and accessories. This stock has been destroyed by the sellers over the last three months, with shares down huge by 47%.

>>4 Stocks Under $10 to Trade for Breakouts

If you take a glance at the chart for Bebe Stores, you'll see that this stock has been downtrending badly for the last two months and change, with shares moving lower from its high of $6.84 to its recent low of $3.22 a share. During that downtrend, shares of BEBE have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of BEBE have started to consolidate and trend sideways over the last few weeks and this stock is now starting to push within range of triggering a major breakout trade.

Traders should now look for long-biased trades in BEBE if it manages to break out above some key near-term overhead resistance at $3.50 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 volume of 456,428 shares. If that breakout hits soon, then BEBE will set up to re-test or possibly take out its next major overhead resistance levels at $4 to $4.25, or even its 50-day moving average of $4.64 a share. A move to $5 or $5.50 is even possible if BEBE gets some high-volume momentum.

Traders can look to buy BEBE off weakness to anticipate that breakout and simply use a stop that sits right below its 52-week low of $3.22 a share. One can also buy BEBE 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.

Orbcomm

Another under-$10 data communications player that's starting to trend higher and move within range of triggering a big breakout trade is Orbcomm (ORBC), which provides machine-to-machine communication solutions primarily in the U.S., Japan and the Middle East. This stock has is down notably over the last three months, with shares off by 12%.

>>5 Toxic Stocks You Should Sell This Summer

If you look at the chart for Orbcomm, you'll see that this stock has been uptrending a bit over the last two months, with shares moving higher from its low of $5.68 to its recent high of $6.77 a share. During that uptrend, shares of ORBC have been making mostly higher lows and higher highs, which is bullish technical price action. Shares of ORBC are now starting to spike higher today right off both its 50-day and 200-day moving averages. That spike is starting to push shares of ORBC 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 ORBC if it manages to break out above some near-term overhead resistance levels at $6.57 to $6.77 a share and then once it takes out more resistance levels at $6.80 to $7.01 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 185,998 shares. If that breakout begins soon, then ORBC will set up to re-test or possibly take out its next major overhead resistance levels at $8 to its 52-week high at $8.21 a share.

Traders can look to buy ORBC off weakness to anticipate that breakout and simply use a stop that sits right below some near-term support at $6.16 or at $6 a share. One can also buy ORBC off strength once it starts to move above those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

Unwired Planet

One final under-$10 application software player that looks ready to trigger a major breakout trade is Unwired Planet (UPIP), which develops patents that allow mobile devices to connect to the Internet. This stock has been red hot so far in 2014, with shares up a whopping 65%.

If you take a glance at the chart for Unwired Planet, you'll notice that this stock has been uptrending over the last month and change, with shares moving higher from its low of $1.95 to its recent high of $2.38 a share. During that uptrend, shares of UPIP have been consistently making higher lows and higher highs, which is bullish technical price action. Shares of UPIP are now starting to spike higher right above its 50-day moving average and it's quickly moving within range of triggering a major breakout trade above some key near-term overhead resistance levels.

Traders should now look for long-biased trades in UPIP if it manages to break out above some near-term overhead resistance levels at $2.38 to its 52-week high of $2.44 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 1.10 million shares. If that breakout kicks off soon, then UPIP will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $3 to $3.50 a share, or even $4 a share.

Traders can look to buy UPIP off weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support levels at $2.12 to $2.05 a share, or even $2 a share. One can also buy UPIP off strength once it starts to bust above 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.

Are Crocs Coming Back? Some Smart Money Is Betting On It

Popular Rubber Clog Crocs Struggling To Stay In Business Amid Weak Demand Getty Images/Scott Olson The demise of Crocs (CROX), it seems, may have been greatly exaggerated. Remember the company's signature product? Close to a decade ago, those colorful, clunky resin clogs were all the rage. The company that made them couldn't sell the things fast enough, at one point reaching sales of 50 million pairs in 2007. Then fashion moved on, as it always does, and the economic slowdown started to bite into sales. Crocs plunged from a $168 million net profit in 2007 to a $185 million loss in 2008. In 2009, the company nearly ran out of cash and had a hard time making payroll. But Crocs' fortunes have improved. In its most recent quarter, the firm posted a loss, but it was narrower than the market was expecting. And it's found an investor that believes in its future -- private equity giant Blackstone Group (BX), which recently provided a $200 million cash investment in return for a block of preferred shares eventually convertible into a stake of around 13 percent of the company. Perhaps the time has come to take those old clogs out of the closet, dust them off, and slip them on for a stroll. Stepping It Up Fashion is highly susceptible to consumer whim. The hot item is never hot for very long, and once consumers move on, it can be hard for the company to recover. In Crocs' case, this was exacerbated by its limited product line -- almost exclusively the clogs. The company learned from its mistakes. Since consumer tastes moved out of clog-land, Crocs has significantly broadened its product line to 300 styles. It now offers boots, flip-flops, deck shoes and slip-ons akin to the casuals from VF Corp.'s (VFC) Vans subsidiary. In terms of profitability, Crocs recovered quickly from its time in the fashion wilderness. From that 2008 bottom-line deficit of $185 million, the company sliced its loss to $42 million the following year, then stepped back into the black in 2010 (to the tune of $68 million). After two straight years of declines, revenue started to pick up in 2010, rising a nice 22 percent on an annual basis and advancing in every subsequent financial year. In fact, 2013's top line came in at nearly $1.2 billion -- around $350 million higher than the firm's big glory year of 2007. In the Black(stone) This kind of performance helped attract the Blackstone Group, which likes to buy its assets cheap and (eventually) exit when the going gets better. Blackstone's $200 million cash investment late last year equated to a cash infusion of around $2.26 per share, and the stock promptly rose by slightly more than that amount after the deal was announced. It seems that shareholders welcome the presence of Blackstone and were encouraged by the vote of confidence it implies. But has that boost in value made Crocs too pricey for the market? At the moment, the stock trades at nearly 28 times expected fiscal 2014 earnings. That's notably more expensive than the 16 times expected earnings of Deckers Outdoor (DECK), which, like Crocs, manufactures a product (Ugg boots) that saw a wild surge of popularity before falling out of fashion. Another pure-play footwear company, Skechers (SKX), can be bought for 19 times current fiscal year earnings. On that basis, Crocs stock is even more expensive than Nike (NKE), arguably one of the best apparel stock plays on the market. Shares of Nike, a master at keeping pace with trends in its fitness niche, trade for just under 26 times anticipated current fiscal year earnings. Fashion Forward? With the fresh involvement of Blackstone -- which now holds two seats on Crocs' eight-member board following its investment -- it's hard to gauge Crocs' strategic direction. Another question mark is the firm's leadership -- CEO John McCarvel is due to retire "on or about" April 30. At the moment, given how expensive the stock is and the uncertainties going forward, Crocs stock is probably not a screaming buy. However, the company has shown a propensity to recover from expired trends and grow while it's at it. Crocs isn't doing at all badly these days. And even though its clogs aren't the flavor of the month anymore, we can't say the firm has completely fallen out of fashion.

Thursday, June 19, 2014

Warren Buffett Pitches Vanguard Index Funds for Mom-and-Pop Investors

NEW YORK (TheStreet) -- Berkshire Hathaway (BRK.A) on Saturday reported better-than-forecast operating earnings as the Warren Buffett-run conglomerate continues to see its earnings rise amid a slow but steady recovery of the U.S economy.

Berkshire Hathaway reported operating earnings of $3.7 billion for the fourth quarter of 2013, a 34% increase from year-ago levels. When counting investment and derivative gains of $1.2 billion for the fourth quarter, Berkshire Hathaway reported net income of just under $5 billion for the fourth quarter, a new record.

Analysts forecast that Berkshire would earn $46.3 billion in revenue and operating income of $3.5 billion, according to Bloomberg data.

Book value per Class A share rose to $134,973 for the full year, an 18% increase from the company's book value per share of $114,214 at the end of 2012. Berkshire's gain in net worth during 2013 was $34.2 billion, the company said.

Those gains allowed Berkshire Hathaway to outperform the S&P 500 index over the five years between 2007 and 2013. In Berkshire's 2012 letter to shareholders, Buffett cautioned investors that the firm might underperform the S&P 500 over a five-year stretch ending in 2013, potentially forcing the company to rethink its strategy.

Buffett's annual letter to shareholders normally contains the Oracle of Omaha's thoughts about investing. This year, Buffett devoted a large portion of his shareholder letter to explaining why nonprofessional investors should simply seek low-cost index funds.

Here's Buffett's discussion:

When Charlie [Munger, Berkshire Hathaway vice chairman] and I buy stocks -- which we think of as small portions of businesses -- our analysis is very similar to that which we use in buying entire businesses. We first have to decide whether we can sensibly estimate an earnings range for five years out, or more. If the answer is yes, we will buy the stock (or business) if it sells at a reasonable price in relation to the bottom boundary of our estimate. If, however, we lack the ability to estimate future earnings -- which is usually the case -- we simply move on to other prospects. In the 54 years we have worked together, we have never forgone an attractive purchase because of the macro or political environment, or the views of other people. In fact, these subjects never come up when we make decisions.

It's vital, however, that we recognize the perimeter of our "circle of competence" and stay well inside of it. Even then, we will make some mistakes, both with stocks and businesses. But they will not be the disasters that occur, for example, when a long-rising market induces purchases that are based on anticipated price behavior and a desire to be where the action is.

Most investors, of course, have not made the study of business prospects a priority in their lives. If wise, they will conclude that they do not know enough about specific businesses to predict their future earning power.

I have good news for these non-professionals: The typical investor doesn't need this skill. In aggregate, American business has done wonderfully over time and will continue to do so (though, most assuredly, in unpredictable fits and starts). In the 20th century, the Dow Jones industrials index advanced from 66 to 11,497, paying a rising stream of dividends to boot. The 21st century will witness further gains, almost certain to be substantial. The goal of the non-professional should not be to pick winners -- neither he nor his "helpers" can do that -- but should rather be to own a cross-section of businesses that in aggregate are bound to do well. A low-cost S&P 500 index fund will achieve this goal.

That's the "what" of investing for the non-professional. The "when" is also important. The main danger is that the timid or beginning investor will enter the market at a time of extreme exuberance and then become disillusioned when paper losses occur. (Remember the late Barton Biggs' observation: "A bull market is like sex. It feels best just before it ends.") The antidote to that kind of mistiming is for an investor to accumulate shares over a long period and never to sell when the news is bad and stocks are well off their highs. Following those rules, the "know-nothing" investor who both diversifies and keeps his costs minimal is virtually certain to get satisfactory results.

If "investors" frenetically bought and sold farmland to each other, neither the yields nor prices of their crops would be increased. The only consequence of such behavior would be decreases in the overall earnings realized by the farm-owning population because of the substantial costs it would incur as it sought advice and switched properties. Nevertheless, both individuals and institutions will constantly be urged to be active by those who profit from giving advice or effecting transactions. The resulting frictional costs can be huge and, for investors in aggregate, devoid of benefit. So ignore the chatter, keep your costs minimal, and invest in stocks as you would in a farm. My money, I should add, is where my mouth is: What I advise here is essentially identical to certain instructions I've laid out in my will. One bequest provides that cash will be delivered to a trustee for my wife's benefit. (I have to use cash for individual bequests, because all of my Berkshire shares will be fully distributed to certain philanthropic organizations over the ten years following the closing of my estate.) My advice to the trustee could not be more simple: Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund. (I suggest Vanguard's.) I believe the trust's long-term results from this policy will be superior to those attained by most investors -- whether pension funds, institutions or individuals -- who employ high-fee managers.

-- Written by Antoine Gara in New York

Stock quotes in this article: BRK.B, BRK.A

Tax Breaks for Generous Grandparents

I want to contribute to a 529 account for my 4-month-old granddaughter. Can I get a tax deduction, or is that just for the parents?

See Also: What Grandparents Should Know About Opening 529 Accounts

Yes, grandparents can claim the deduction for contributing to a 529 if they live in one of the 34 states that offer a state income tax deduction for 529 college-savings plan contributions. The only question is whether you must own the account or whether you can contribute to one set up by, say, the child's parents.

About two-thirds of the states that offer a state income tax deduction for 529 college-savings plan contributions let anyone who is a resident of that state take a deduction, even if you don't own the account -- whether you're a parent, relative or friend. The remaining states let you deduct contributions only if you're the account owner. In that case, you might want to open an account for your granddaughter so that you can qualify for the deduction, even if her parents already have an account for her. There's no limit to the number of 529 accounts that can be opened for one beneficiary. (To check up on your state's rules, see Savingforcollege.com.)

In Utah and Virginia, the owner of a 529 account can also deduct the contributions other people make to the account. For example, in Virginia, account owners can deduct up to $4,000 in contributions per account each year, with unlimited carryover of excess contributions, no matter who makes the contributions. And if you're 70 or older, you can deduct the entire amount contributed to the Virginia 529 you own in one year.

Most of the 34 states that offer the tax break let you take a deduction only if you contribute to your own state's 529. However, five states -- Arizona, Kansas, Maine, Missouri and Pennsylvania -- give you the break for contributing to any state's account.

Be careful with withdrawals from a 529 for your granddaughter when she is in college, because they are counted as income in the financial aid calculations. See Limit the Impact of Grandparent-Owned 529 Plans on Financial Aid for details.

For more information, see 529 Plan FAQs.

Got a question? Ask Kim at askkim@kiplinger.com.

Wednesday, June 18, 2014

Creating a plan for the right retirement income

It's pretty well established that we can live another 30 years after a "traditional" retirement at 65 — just about as long as we did in our working years.

While that's good news in one sense, it presents a whole set of new problems, many of them money-related — like just about everything else in life.

Let's tackle one of people's biggest concerns about retiring: How do you know exactly how much money you need every week, or every month, or, for that matter, every year? Once you figure that out, how does that compare with how much you've saved?

For example, you're living on income of $5,000 a month now. That's what you think you'll need when you retire. How can you make sure that you'll have enough between your savings, pension (if you have one) and Social Security?

RETIREMENT: Planning for your future

James Nichols, head of advice for ING Retirement Solutions, says people spend a lot of time focused on building a big pile of money for retirement. "But the reality is when you're moving into retirement, a big pile of money doesn't do you much good unless you know how to turn that into income," he says.

"It takes 17 of us easily 40 hours of work — MBAs, CFPs, CPAs, lawyers — to create a business plan for the rest of your life," says Ron Weiner, president of RDM Financial Group in Westport, Conn. "It is incredibly complicated." When you retire, you're not making more money to make up for mistakes, he says.

An adviser can help you sort out some of the challenges you face, says Nichols. "There are so many risks and challenges, it's very hard to be an expert on your own," he says. "Building a plan ... is key. And understanding what sort of compromises you may or may not need to make to make sure you income lasts a lifetime. We talk about individuals' needs, wants and wishes."

GETTING HELP: Do you have 'financial adviser anxiety'?

As every financial planner will tell you, the first thing you and your adviser have to do is create a budget.

Und! erstanding that budget is the first step in the process, says Lena Haas, senior vice president and head of investing product management and retirement at E-Trade Financial. Start with your real needs. "What are your fundamental needs to survive each month — mortgage, rent, utilities, food, medical expenses," she says.

You also need to figure out your wants, geared toward the lifestyle you're seeking. "Do you want to travel? Are your children far away?" Haas says. "Start thinking about special buckets, like heath care, college expense if you still have children, or maybe taking care of older parent or relative." Then, she says, figure out how those expenses jibe with your retirement income.

To make sure you're not caught short by unexpected bills, Mark Fried, president of TFG Wealth Management in Newtown, Pa., says you should have three to six months' income and expenses in reserve. "It's a ballpark of bank statements and health care bills," he says.

Once you have your reserves, start looking at your cash flow in retirement — the actual cash that ends up in your pocket, not your current salary. Say your annual salary while you're working is $150,000. "What you need to realize is, after taxes, after deductions, after your 401(k) contributions, you may be living on only $80,000. What is that actual cash flow coming into the house? That's where we start," Fried says.

Andrew Rafal, founding partner of Strategy Financial Group, a Phoenix-based financial advisory firm, says that the next step is to look at Social Security, and when the client should take it. If they make the wrong choice, there they can miss out on hundreds of thousands of dollars.

Haas says you need to look at all your sources of income. "Many people have, in addition to Social Security, a 401(k) from various employers, or pensions or annuities. It is helpful to understand all those streams of income. You can manage all of those and simulate that paycheck."

Then you must look at how much money is comi! ng in, an! d how much is going out. If you have a monthly shortfall, you can look at your investment portfolio to make up the difference. "The traditional way of looking is no longer true — invest in a conservative portfolio, so we don't lose principal. People live longer, and interest rates are quite low and will probably stay low for some time. Instead of keeping money in cash, it is important that they have a diverse portfolio, but not overly aggressive."

"What a financial plan really does is take all your hopes and dreams, figure out what that costs, apply some tax and inflation assumptions, look at what you have, and it's not that hard to figure what rate of return you need to achieve all that," says Weiner. "If it turns out that 2% is all you need, you can be in bonds. If you need 26%, people's feelings about markets and money have to be considered. You can't just say, 'I don't want to take risks.' "

Finally, Fried adds, you can't just write a plan, and set it on the shelf. "You will have to make corrections," he says. "If you don't do it enough, you may have to make dramatic changes later."

Lululemon Athletica: Don’t Believe the M&A Hype

Before Lululemon Athletica’s (LULU) earnings release, all kinds of theories were floated as to why it was a good time to buy the yoga-wear retailer’s beaten down shares, including the international opportunity, its new products and even the extent of the beatdown. Those all proved wrong after Lululemon’s terrible results, but now there’s another reason for hope: Someone might want to buy Lululemon.

ZUMAPRESS.com

At least that’s what was suggested in an article in Bloomberg today, which noted that VFC (VFC), among others, could be interested in buying Lululemon. Sterne Agee’s Sam Poser and Ben Shamsian aren’t buying it:

We continue to assert that the value of the LULU brand comes from the combination of great service and great product. We believe that an acquisition at this time would only further hurt the in-store experience and do more damage to the LULU brand.

An acquisition of LULU by Adidas or VFC would hurt those brands as well as hurt LULU in the long run. LULU must fix its own problems.

We do not believe that throwing M&A theories into the marketplace, without detailed thesis is responsible.

Shares of Lululemon have gained 2.9% to $39,.84 today at 11:43 a.m., while VFC Corp. is up 0.1% at $61.87.

Tuesday, June 17, 2014

Japan stocks rise ahead of Bank of Japan decision

LOS ANGELES (MarketWatch) -- Stocks in Japan climbed at the start of trade Tuesday, as U.S. dollar strength against the yen aided the export-oriented market. The Nikkei Stock Average (JP:NIK) advanced 1% to 14,431.03, and the broader Topix rose 1.5% to 1,201.63, with the greenback moving back above the ¥102 level versus Japan's currency. Among exporters, stock in Canon Inc. (JP:7751) (CAJ) rose 1.6%, Mazda Motor Corp. (JP:7261) (MZDAF) tacked on 1.5%, and Sony Corp. (JP:6758) (SNE) gained 1.4%. Banking stocks were higher ahead of the conclusion of the Bank of Japan's meeting later Tuesday, and officials are not expected to announce any changes in monetary policy. Shares of Mitsubishi UFJ Financial Group Inc. (JP:8306) (MTU) and Sumitomo Mitsui Financial Group Inc. (JP:8316) (SMFG) were each up by 1.7%.

John Wiley & Sons Inc Beats Q4 Estimates; Guides FY2015 (JW-A)

John Wiley & Sons (JW-A) reported its fourth quarter earnings before the opening bell this morning, posting results that beat analysts’ estimates.

JW-A’s Earnings in Brief

John Wiley & Sons reported fourth quarter revenues of $457 million, up from 2% (on a constant currency basis) from $441 million reported last year. Adjusted EPS for the quarter came in at 77 cents, up 4% (on a constant currency basis) from last year’s Q4 EPS of 71 cents. JW-A’s results beat analysts’ estimates of 71 cents EPS on revenues of $441 million. For the full-year, John Wiley reported EPS of $3.05 on revenues of $1.78 billion. Looking ahead to next year, John Wiley sees FY2015 EPS in the range of $3.25 to $3.35.

CEO Commentary

Wiley president and CEO Steve Smith had the following comments about the company’s Q4 and full-year results: "We are very pleased with our operational performance this year, including our continued progress in expanding Wiley's depth and breadth as a provider of knowledge-enabled solutions. We exceeded our annual guidance for adjusted revenue growth and earnings, successfully executed on our restructuring plans to achieve a lower and more flexible cost structure, and recently acquired two companies that position Wiley to become a solutions leader in professional learning and development. Our share of revenue from print books is down to 29%, and through organic investment and targeted acquisitions, and by integrating content, technology, and services, we have accelerated our strategy to provide professionals, students, and researchers with valued solutions that serve their needs from education through employment."

JW-A’s Dividend

John Wiley & Sons did not mention a change to its dividend in its earnings release, but we expect the company to announce an increase to its dividend in the coming weeks.

Stock Performance

John Wiley stock was inactive in pre-market trading. YTD, the company’s stock is up 5.58%.

JW-A Dividend Snapshot

As of Market Close on June 16, 2014

WMT dividend yield annual payout payout ratio dividend growth

Click here to see the complete history of JW-A dividends.

Monday, June 16, 2014

Hot Healthcare Technology Companies To Watch In Right Now

It looks like the Dow Jones Industrial Average (DJINDICES: ^DJI ) is set to break its run of triple-digit movements -- and take away investors' streak of gains for the week, as well. The blue chip index has turned down by around 25 points as of 2:15 p.m. EDT, with most stocks in the red -- although few Dow members have made big movements on this Friday. It's a nice breather for investors after the volatility of the past few weeks, but expect more of that to come as questions surrounding quantitative easing's inevitable tapering heat up.

The future of stimulus isn't something long-term investors need to worry about, but keeping an eye on stocks is key to maintaining the best portfolio you can. Who's making waves today? Let's catch up on the stories -- and movers -- you need to know about.

Signs of strength from consumers
Housing, and rising consumer sentiment, have dominated talk around the economic recovery this year, and the University of Michigan/Thomson Reuters consumer confidence�report for May showed a better-than-expected reading of 84.1 for the month, down only slightly from April's score. That combination of economic strength has done wonders for Home Depot (NYSE: HD ) , today's Dow leader with shares up 1.8%. Home Depot's pulled ahead�of rival Lowe's (NYSE: LOW ) , particularly after last quarter's earnings report, where the former�raised its guidance, but the latter missed projections. That separation for leadership in the industry has Home Depot poised to continue soaring as the economy's rebound picks up.

Hot Healthcare Technology Companies To Watch In Right Now: Centene Corporation (CNC)

Centene Corporation provides multi-line healthcare programs and services in the United States. It operates in two segments, Medicaid Managed Care and Specialty Services. The Medicaid Managed Care segment provides Medicaid and Medicaid-related health plan coverage to individuals through government subsidized programs, including Medicaid, the State children�s health insurance program, long-term care, foster care, and Medicare special needs plans, as well as aged, blind, or disabled programs. Its health plans provide primary and specialty physician care, inpatient and outpatient hospital care, transportation assistance, emergency and urgent care, vision care, prenatal care, dental care, laboratory and x-ray services, immunizations, prescriptions and over-the-counter drugs, home health and durable medical equipment, behavioral health and substance abuse services, therapies, social work services, care coordination, and 24-hour nurse advice line. The Specialty Services segment manages behavioral healthcare for members; provides health insurance to individual customers and their families; implements life and health management programs; offers long-term care services to the elderly and people with disabilities; and administers routine and medical surgical eye care benefits through its network of eye care providers. It also offers telehealth services; and claims processing, pharmacy network management, benefit design consultation, drug utilization review, formulary and rebate management, specialty and mail order pharmacy services, and patient and physician intervention services, as well as provides care management solutions that automate the clinical, administrative, and technical components of care management programs. The company offers its services through primary and specialty care physicians, hospitals, and ancillary providers. Centene Corporation was founded in 1984 and is headquartered in St. Louis, Missouri.

Advisors' Opinion:

[By Holly LaFon]
Importantly, we like the industry in which Centene (CNC) competes. Some of our investors might recall that one of our prior investments, Amerigroup, was acquired in 2012 by Wellpoint at a val uation that allowed us to achieve a return on investment of greater than 100% over the roughly one - year time period that we owned the shares. Medicaid managed care companies not only save states money but also offer better service; therefore, more states a re letting managed care companies run their Medicaid programs. To that end, states are expanding both the geographies carved out to managed care companies and the types of programs. The next phase of growth will come from the dual - eligible population. D uals (or dual - eligible population) are 8.3mm 3 people in the U.S. that are eligible to receive both Medicare and Medicaid benefits (mainly low - income seniors). According to the Kaiser Foundation, Duals accounted for almost 40% of Medicaid spending although they made up only 15% of the Medicaid population. We believe there are ample growth opportunities for CNC and other companies to meet the challenges of managing these disparate Medicaid members for the foreseeable future.
[By Lauren Pollock]
Centene Corp.(CNC) agreed to acquire a roughly 68% interest in U.S. Medical Management LLC, a provider of in-home health services, for $200 million in cash and stock as the Medicaid insurer continues to expand its stable of services. Centene also said it is forming a new health-care enterprise holding company that will connect it and other health solution providers.

Hot Healthcare Technology Companies To Watch In Right Now: Universal Health Services Inc. (UHS)

Universal Health Services, Inc., through its subsidiaries, owns and operates acute care hospitals, behavioral health centers, surgical hospitals, ambulatory surgery centers, and radiation oncology centers. The company�s hospitals offer various services comprising general and specialty surgery, internal medicine, obstetrics, emergency room care, radiology, oncology, diagnostic care, coronary care, pediatric services, pharmacy services, and/or behavioral health services. As of February 24, 2012, it owned and/or operated 25 acute care hospitals and 198 behavioral health centers located in 36 states, Puerto Rico, and the U.S. Virgin Islands, as well as Washington, D.C. The company also operates six surgical hospitals, and surgery and radiation oncology centers located in four states and Puerto Rico. Universal Health Services, Inc. was founded in 1978 and is headquartered in King of Prussia, Pennsylvania.

Advisors' Opinion:

[By Ben Levisohn]
Tenets plunge has helped drag other healthcare stocks lower.�Community Health (CYH) has dropped 3.6% to $42.21,�HCA Holdings (HCA) has fallen 2.1% to $46.72 and�Universal Health Services�(UHS) is off 1% at $80.59.

Top 10 European Stocks For 2015: Meritage Homes Corp (MTH)

Meritage Homes Corporation, incorporated on May 26 1988, operates as holding company. The Company through its subsidiaries is a designer and builder of single-family detached homes based on the number of home closings. The Company primarily builds in regions of the western and southern United States and offer a variety of homes that are designed to appeal to a range of homebuyers, including first-time, move-up, active adult and luxury. It has operations in three regions: West, Central and East, which consists of seven states: Arizona, California, Nevada, Texas, Colorado, Florida, and the Carolinas. Operations within the Carolinas include the Raleigh and Charlotte metropolitan areas, with some Charlotte communities located across the border into South Carolina. These three regions are its principal business segments. The Company�� homebuilding and marketing activities are conducted under the Meritage Homes brand, except for Arizona and Texas where it operates under the name Monterey Homes. As of December 31, 2012, it was selling homes in 158 communities. Effective September 4, 2013, Meritage Homes Corporation acquired Phillips Builders Inc from Beazer Homes USA Inc.

The Company�� homes range from entry level to luxury. The Company purchases a combination of finished lots and partially-developed or undeveloped lots. As of December 31, 2012, in addition to its approximately 17,500 owned lots, it also had approximately 3,300 committed lots under option or contract. It also participates in three mortgage and one title business joint ventures. The mortgage joint ventures are engaged in mortgage activities, and they provide services to both its customers and other homebuyers. The Company acts as a general contractor.

Advisors' Opinion:

[By Paul Ausick]
Of five stocks we looked at, only one shows a gain over the past 12 months. Meritage Homes Corp. (NYSE: MTH) has a market cap of $1.68 billion and the stock closed at $45.39 last Friday, in a 52-week range of $38.42 to $52.95. The stock is up more than 8% over the past 12 months. The consensus price target is around $50.10, which indicates an implied gain of about 10%, about half the implied gain we saw in December. Meritage has easily beaten EPS in each of the past four quarters. Shares were up nearly about 0.8% at $45.82 on Monday morning. Meritage reports earnings on February 5 and is expected to post EPS of $1.03 on revenues of $537.3 million.
[By James E. Brumley]
Given the bad news regarding new-home sales unveiled� this morning, it's no real surprise that homebuilder stocks like KB Home (NYSE:KBH) and M/I Homes Inc. (NYSE:MHO) are struggling. KBH is down 2.8% as of the last look, while MHO shares are off 4.1%. None of the major homebuilder names are underwater as much as Meritage Homes Corp. (NYSE:MTH) is today, though, with its 8.6% drubbing. Already struggling, today's stumble from MTH may well jump-start a more serious selloff that the bulls have thus far been able to stave off.
[By Seth Jayson]
Meritage Homes (NYSE: MTH ) reported earnings on July 24. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended June 30 (Q2), Meritage Homes beat expectations on revenues and crushed expectations on earnings per share.
[By The Oxen Group]
According to home construction news site Builderonline.com, MDC ranks 11th in terms of total number of home closings for the year 2012. Out of the top 10 competitors, MDC has the lowest PEG value, followed by Ryland Group (RYL) and Meritage Homes (MTH) with 0.23 and 0.6, respectively. The current pe ratio is lowest for the company followed by Ryland Group with 7.4 and Meritage Homes (MHO) with 11. In terms of forward pe, the top ten competitors have values in the 10-14 range. Putting numbers in perspective, relative to its competitors we believe that MDC presents a better value for investors looking to take advantage of the real estate market rebound.

Hot Healthcare Technology Companies To Watch In Right Now: Banco Santander Brasil SA (BSBR)

Banco Santander (Brasil) S.A. (Santander Brasil), incorporated on August 9, 1985, is a full-service bank in Brazil. The Bank operates its business along three segments: Commercial Banking, Global Wholesale Banking and Asset Management and Insurance. Through its Commercial Banking segment, the Bank offers traditional banking services, including checking and savings accounts, home and automobile financing, unsecured consumer financing, checking account overdraft loans, credit cards and payroll loans to mid- and high-income individuals and corporations (other than to its Global Banking and Markets clients). Its Global Wholesale Banking segment provides financial services and solutions to a group of approximately 700 local and multinational conglomerates, offering such products as global transaction banking, syndicated lending, corporate finance, equity and treasury. Through its Asset Management and Insurance segment, the Company manages fixed income, money market, equity and multi-market funds and offers insurance products complementary to its core banking business to its retail and small- and medium-sized corporate customers.

Lending Activities

As of December 31, 2010, the Bank�� total loans and advances to customers equaled R$160.6 billion (42.9% of its total assets). Net of allowances for credit losses, loans and advances to customers equaled R$151.4 billion as of December 31, 2010 (40.4% of its total assets). In addition to loans, it had outstanding R$93.5 billion as of December 31, 2010.

Substantially all of its loans are to borrowers domiciled in Brazil and are denominated in reais. Its commercial, financial and industrial loans include primarily loans to small and medium-sized enterprises (SMEs) in its Commercial Banking segment, and to Global Banking and Markets corporate and business enterprise customers in its Wholesale Global Banking segment. The principal products offered to SMEs in this category include revolving loans, overdraft facilities, installme! nt loans, working capital and equipment finance loans. Credit approval for SMEs is based on customer income, business activity, collateral coverage and internal and external credit scoring tools. Collateral on commercial, financial and industrial lending to SMEs generally includes receivables, liens, pledges, guarantees and mortgages, with coverage generally ranging from 100% to 150% of the loan value depending on the risk profile of the loan. Its Wholesale Global Banking customers are offered a range of loan products ranging from typical corporate banking products (installment loans, working capital and equipment finance loans) to more sophisticated products (derivative and capital markets transactions).

The Bank�� Real estate-construction loans include construction loans made principally to real estate developers that are SMEs and corporate customers in its Wholesale Global Banking Segment. Loans in this category are generally secured by mortgages and receivables, though guarantees may also be provided as additional security. Real estate-mortgage loans include loans on residential real estate to individuals. All loans granted under this category are secured by the financed real estate. Installment loans to individuals consist primarily of unsecured personal installment loans (including loans whose payments are automatically deducted from a customer�� payroll), revolving loans, overdraft facilities, consumer finance facilities and credit cards. Lease financing includes primarily automobile leases and loans to individuals. The vehicle financed acts as collateral for the particular loan granted.

Investment Activities

The Bank�� investments include Government securities-Brazil, Government securities-other countries and other debt securities. As of December 31, 2010, the book value of the investment securities was R$84.7 billion (representing 22.6% of its total assets). Brazilian government securities totaled R$55.8 billion, or 65.9% of the Bank�� investment! securiti! es as of December 31, 2010. As of December 31, 2010, the Bank held no securities of single issuers or related group of companies whose aggregate book or market value exceed 10% of stockholders��equity, other than Brazilian government securities, which represented 76.9% of its stockholders��equity.

Sources of Funds

The Bank offers its customers a variety of deposit products, such as current accounts (also referred to as demand deposits), which do not bear interest; traditional savings accounts, which earn the Brazilian reference rate for savings accounts (taxa referencial) plus 0.5% per month, as set by the federal government, and time deposits, which are represented by certificates of bank deposits (CDBs), which normally have a maturity of less than 36 months and earn interest at a fixed or floating rate. In addition, it accepts deposits from financial institutions as part of its treasury operations, which are represented by certificates of interbank deposit CDIs, and which earn the interbank deposit rate.

Advisors' Opinion:

[By Jake L'Ecuyer]
Banco Santander (Brasil) SA (NYSE: BSBR) shares were also up, gaining 15.74 percent to $6.69 on Q1 results. The company reported Q1 recurring net income of 1.427 billion reais ($637 million).
[By Jake L'Ecuyer]
Banco Santander (Brasil) SA (NYSE: BSBR) shares were also up, gaining 12.46 percent to $6.50 on Q1 results. The company reported Q1 recurring net income of 1.427 billion reais ($637 million).
[By Rudy Martin]
We are buying Banco Santander (Brasil) S.A. (BSBR) to gain broad additional exposure to the Brazilian.

BSBR offers a full-service range of financial services, including individual and corporate banking. We also hope to benefit from the stock's 7.2% current indicated dividend yield.

Hot Healthcare Technology Companies To Watch In Right Now: Netflix Inc.(NFLX)

Netflix, Inc. provides Internet subscription services for TV shows and movies in the United States and internationally. The company offers its subscribers to watch unlimited TV shows and movies streamed over the Internet to their TVs, computers, and mobile devices. It also provides standard definition DVDs and Blu-ray discs to its subscribers. The company was founded in 1997 and is headquartered in Los Gatos, California.

Advisors' Opinion:

[By Rick Munarriz]
5. Netflix won't need a pledge drive to keep these PBS shows on the air
Netflix (NASDAQ: NFLX ) continues to flesh out its content library.
[By Anders Bylund]
Netflix (NASDAQ: NFLX ) sure shocked Wall Street with its first-quarter report. Shares jumped 25% the next day. But many of the key drivers for this crazy jump should have been obvious to most investors. Seeing these signs in advance would have helped you invest in Netflix with confidence as this report approached.
[By Rich Smith]
Enough attraction, at least, that on Thursday, online video provider Netflix (NASDAQ: NFLX ) announced that it has inked an agreement with Hasbro to make it the exclusive online streamer of both Hasbro Studios offerings Littlest Pet Shop�and�Kaijudo: Rise of the Duel Masters.
[By Ben Levisohn]
The stock market continues its on-step forward/one-step back pattern of trading today, with major indexes all heading higher following yesterday’s losses as the market waits for the release of the Fed minutes. Goldman Sachs (GS) and United Technologies (UTX) have led blue chips higher, while Tiffany (TIF), TJX (TJX) and Netflix (NFLX) have been the big gainers among large-company stocks.

Hot Healthcare Technology Companies To Watch In Right Now: Vanguard Natural Resources LLC(VNR)

Vanguard Natural Resources, LLC, through its subsidiaries, engages in the acquisition and development of oil and natural gas properties in the United States. Its properties are located in the southern portion of the Appalachian Basin, primarily in southeast Kentucky and northeast Tennessee; the Permian Basin, primarily in west Texas and southeastern New Mexico; and south Texas. As of December 31, 2010, the company had estimated proved reserves of 69.3 million barrels of oil equivalent, as well as working interests in 2,270 net productive wells. Vanguard Natural Resources, LLC was founded in 2006 and is based in Houston, Texas.

Advisors' Opinion:

[By Matt DiLallo]
Among its peers in the MLP and LLC space, LINN by far hedges the most production. BreitBurn Energy Partners (NASDAQ: BBEP ) , for example, has hedged roughly 75% of its production through 2015, whereas LINN is 100% hedged through 2016. BreitBurn almost exclusively uses swaps as its hedge of choice. It's a similar story at Vanguard Natural Resources (NASDAQ: VNR ) , which also uses swaps to almost exclusively hedge natural gas while using three-way collars to hedge about a third of its oil production. While LINN could get more creative, one thing I'd be surprised to hear is that it's going to join these two peers and leave some of its production unhedged.
[By Daniel Gibbs]
Several weeks ago, I wrote an article�that suggested that Vanguard Natural Resources (NASDAQ: VNR ) could offer a way to hedge the costs of heating your home this past winter given the exceptionally cold weather and high bills. Well, now the winter is beginning to wind down (the snow that some of us saw this past winter not withstanding), and soon it will be spring with its accompanying lower heating bills. So, should anyone who bought Vanguard as protection against high heating bills sell their shares now? There is little reason to, as the company still offers a very strong monthly dividend and reported very strong results�at the end of last month.
[By Robert Rapier]
Vanguard Natural Resources (NASDAQ: VNR) isn’t technically an MLP, but the differences will be transparent to most MLP investors. It is certainly worth considering, and one we have recommended. However, my preference would be to pick this one up at a slight discount from the current unit price of $28.48.

Hot Healthcare Technology Companies To Watch In Right Now: Dollar Financial Corp.(DLLR)

DFC Global Corp. provides retail financial services to unbanked and under-banked consumers, and small businesses. Its primary products and services include short-term consumer loans, single-payment consumer loans, check cashing services, secured pawn loans, and gold buying services. The company also provides other retail services and products comprising money order and money transfer products, foreign currency exchange, VISA and MasterCard branded reloadable debit cards, electronic tax filing, bill payment, and prepaid local and long-distance phone services. In addition, it offers military installment loan and education services, such as fee based services to enlisted military personnel applying for loans to purchase new and used vehicles. The company provides its products and services through storefront locations, as well as via the Internet. As of August 25, 2011, it operated through a network of approximately 1,300 retail storefront locations. It operates its locations principally under the Money Mart, The Money Shop, mce, Insta-Cheques, Suttons and Robertson, The Check Cashing Store, Sefina, Helsingin Panttism, Optima, and Money Now in Canada, the United Kingdom, the United States, Poland, the Republic of Ireland, Sweden, and Finland. The company was formerly known as Dollar Financial Corp. and changed its name to DFC Global Corp. in August 2011. DFC Global Corp. was founded in 1990 and is headquartered in Berwyn, Pennsylvania.

Advisors' Opinion:

[By John Kell]
DFC Global Corp.'s(DLLR) fiscal second-quarter profit tumbled 88% as the operator of check-cashing stores was hurt by weaker gold prices and a weaker Canadian dollar. Results for the period badly missed Wall Street’s expectations, and DFC cut its expectations for the fiscal year. Shares dropped 24% to $8 premarket.

Hot Healthcare Technology Companies To Watch In Right Now: Korea Electric Power Corp (KEP)

Korea Electric Power Corporation (KEPCO), incorporated on January 1, 1982, is engaged in the generation, transmission and distribution of electricity and development of electric power resources in the Republic of Korea. KEPCO�� business operations include nuclear, hydro and thermal generation; transmission and distribution, and resources development. KEPCO consists of power generation companies, subsidiaries and affiliates, and other share-holding companies. On January 5, 2010, KEPCO developed the prototype of next-generation electric vehicle chargers.

KEPCO completed consulting projects in Myanmar, the Philippines, Indonesia, Libya, Ukraine and Paraguay, and is working on 12 projects in Western Africa, Cambodia, Bangladesh, Pakistan, Egypt, Saudi Arabia and Azerbaijan. KEPCO is investing in green growth business, which includes implementation of Smart Grid and electric vehicle charging infrastructure and reduction of greenhouse gas emissions. KEPCO is engaged in development of renewable energy projects, including photovoltaic, wind and tidal energy to realize low carbon green growth. KEPCO��s overseas renewable energy projects include wind farms in Gansu (99 megawatts) and Inner Mongolia (1,075 megawatts) in China. KEPCO has secured an annual 520,000 tons worth of carbon emission rights. KEPCO has nine CDM projects related to wind generation project in China, out of 18 CDM projects.

Advisors' Opinion:

[By Jake L'Ecuyer]
Leading and Lagging Sectors
Utilities stocks gained Friday, with Korea Electric Power (NYSE: KEP) leading advancers. Meanwhile, gainers in the sector included Huaneng Power International (NYSE: HNP), with shares up 2.1 percent, and Pampa Energia SA (NYSE: PAM), with shares up 2.5 percent.
[By Garrett Cook]
Utilities shares fell around 0.30 percent in trading on Friday. Top losers in the sector included Pampa Energia SA (NYSE: PAM), revesed loses and is currently up 1.75 percent, and Korea Electric Power (NYSE: KEP), off 3.16 percent.

Hot Healthcare Technology Companies To Watch In Right Now: Landauer Inc (LDR)

Landauer, Inc. (Landauer) is a provider of technical and analytical services to determine occupational and environmental radiation exposure. The Company is domestic provider of outsourced medical physics services. The Company operates in two segments: Radiation Monitoring and Medical Physics. The Company has provided radiation dosimetry services to hospitals, medical and dental offices, universities, national laboratories, nuclear facilities and other industries. Landauer's services include the manufacture of radiation detection monitors, the distribution and collection of the monitors to and from customers, and the analysis and reporting of exposure findings. In addition to providing analytical services, the Company leases or sells dosimetry detectors and reading equipment to customers. Medical physics services are provided through the Company's Global Physics Solutions, Inc. (GPS) subsidiary. In November 2011, it acquired IZI Medical Products, LLC.

In November 2009, Landauer completed the acquisition of GPS. GPS is a nationwide service provider of clinical physics support, equipment commissioning and accreditation support and imaging equipment testing. In June 2010, Landauer, through its GPS subsidiary, completed the acquisition of Upstate Medical Physics (UMP), a provider of imaging physics services in New York. In November 2009, Landauer completed the acquisition of Gammadata Matteknik AB (GDM), a Swedish provider of radon measurement services. GDM provides measurement services throughout the Scandinavian region and Europe. In October 2009, Landauer completed the acquisition of dosimetry service in Sweden, called Landauer Persondosimetri AB (PDM).

The Radiation Monitoring revenues are realized from radiation monitoring services and other services incidental to radiation dose measurement. The Company enters into agreements with customers to provide them with radiation monitoring services, for a 12 month period. As part of its services, the Company provides to its custome! rs radiation detection badges, which are produced and owned by the Company. The badges are worn for a period selected by the customers (wear period), which is usually one, two, or three months in duration. At the end of the wear period, the badges are returned to the Company for analysis. The Company analyzes the badges that have been worn and provides its customers with a report indicating their radiation exposures. The Company recycles certain badge components for reuse, while also producing replacement badges on a continual basis.

The Company offers its service for measuring the dosages of x-ray, gamma radiation and other penetrating ionizing radiations, to which the wearer has been exposed, through badges, which contain optically stimulated luminescent (OSL) material, which are worn by customer personnel. This technology is marketed under the trade names Luxel+ and InLight. A component of the Company's dosimetry system is OSL crystal material. The Company's base OSL material is manufactured utilizing a process to create aluminum oxide crystals in a structure that is able to retain charged electrons following the crystal's exposure to radiation.

Landauer's InLight dosimetry system provides in-house and commercial laboratories with the ability to provide in-house radiation monitoring services using OSL technology. InLight services involve a customer acquiring or leasing dosimetry devices, as well as analytical reading equipment from the Company. The InLight system allows customers the flexibility to tailor their dosimetry needs. Landauer's operations include services for the measurement and monitoring of radon gas. The Company offers a service, which provides radon monitoring and, when necessary, remediation to purchasers of personal residences. Testing requires the customer to deploy a radon detector and return the detector to the Company's laboratories for dose determination and reporting. The Company assists with remediation services on properties where radon measurements ! exceed a ! specified threshold.

The Company competes with Mirion Technologies.

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 Landauer (NYSE: LDR ) , whose recent revenue and earnings are plotted below.