Keurig Green Mountain's Strong Financial Position Is a Long-Term Catalyst

Keurig Green Mountain (GMCR) has done very well in 2014. The company's important partnerships and new products are its growth drivers. Another striking fact about Keurig is its strong free cash flow, which is strong enough to attract shareholders and investors who are looking for a dividend-paying stock in the industry. Keurig has paid approximately $800 million in the form of dividend and share repurchase programs while maintaining a burly $1.1 billion of cash. This will certainly provide financial flexibility to the company and help her to invest in many new growth opportunities that lie ahead. In addition, Keurig Green Mountain has decided to pay cash dividend of $0.25 per share on August 1, 2014.

Making good progress

Keurig Green Mountain continues to make progress as it focuses on key transition, executed on its Keurig brewers system in portion pack segment. The company will be introducing new Keurig 2.0 hot brewers in the ongoing quarter as a part of its consistent efforts towards adding new brands to its brewers system to enhance its profitability. It expects significant growth opportunity for new Keurig 2.0 hot brewer pack in North America and on the global front as well. The new Keurig 2.0 hot brewers will have more than 250 varieties that are available with Keurig system at present, thus creating enough market opportunity for the company to expand further in the market.

Besides Keurig Green Mountain has brought in new beverage optimization technology in its Keurig 2.0 brewers as it also introduced interactive capabilities that will allow the customers to brew a carafe with the same quality and one-touch simplicity as a single cup, just what consumers have been asking for. This single-cup brewing will create a winning combination for the company as it enhances its capability, and customers now will be able to perfectly brew the beverages regardless of the size or type.

In addition, the company will also be launching its Keurig Cold System new products in the beginning of 2015. This continued investment in its innovation across all the division of its business ranging from product development to merchandising will construct strong pipeline for its new products and definitely put up strong financial and operating background for the company in the coming quarters. The Keurig 2.0 Cold Brewers will be produced in its new Keurig production center in Vermont, where the company plans to start its cold production lines.

Research and development in focus

Apart from this, the company is also getting a lot of benefits as it continuously invests in R&D that will enable multiple platforms for the company and result in incremental growth. This consistent investment has also helped the company get connected with many new partners due to its ACV advantage and leadership in the industry.

Also, the company plans to broaden its relationship with J.M. Smucker's (SJM) and extends hands with Starbucks (SBUX). It also added Peet's, as a new partner in its healthy system that is fed with strong brands. Further, the company also added Krispy Kreme Doughnuts (KKD) to its system and has welcomed long-term partner Lavazza to the Keurig K-Cup system, one of the Italy's favorite coffee br

ValueAct’s Ubben To Join Valeant’s Board; Valeant Shares Rise 3%

ValueAct is back on Valeant's (VRX) board.

The drug company, now partnered with hedge fund icon Bill Ackman in a hostile takeover campaign against Allergan (AGN), announced Thursday morning that Jeffrey Ubben, ValueAct's founder and CEO, will join its board on Oct. 1. Ubben is taking the seat vacated by ValueAct's president, Mason Morfit, earlier this year when he won an appointment to the board of Microsoft (MSFT).

ValueAct owns roughly 5.6% of Valeant's stock.

The Wall Street Journal reports:

Morfit's departure from the Valeant board came amid the turbulence of Valeant's launching of its unorthodox takeover bid for Allergan Inc. in partnership with activist William Ackman. But anyone who thought his stepping down was a sign that ValueAct was opposed to the move was apparently mistaken.

Mr. Ubben said in a statement Thursday that he supports Valeant's ongoing effort to buy Allergan, calling it a "perfect strategic fit."  Mr. Ubben said ValueAct has not reduced its position in Valeant since Mr. Morfit left the board in May. Instead, he said, "we expect to increase our already substantial position" and called the stock "significantly undervalued on a standalone basis."

Today's announcement helped drive Valeant's share price higher. At $127.87, the shares have risen 3.1% in afternoon market action, continuing an upward climb that began last month when the stock fell to $109.

The rising value of Valeant's stock is a boon for more than investors. The drug maker has offered to pay Allergan shareholders $72 in cash and 0.83 shares of Valeant stock per Allergan share, so a higher share price also increases the value of the offer.

Allergan's CEO has questioned the value of Valeant's stock.

Meanwhile, on Wednesday, Valeant released a series of letters between its CEO and Allergan's CEO and lead independent director. Allergan responded on Thursday with a release that reiterated why the company thinks it can deliver more value on its own.

 

RadioShack is Selling But Who’s Buying?

Shares of RadioShack (RSH) have jumped 14% to $1.03 today at 11:58, as the beleaguered electronics retailer replaced its CFO amid attempts to restructure its debt. But here’s a reminder of its big problem: Few want what RadioShack is selling. In a note released on Sept. 12, UBS analyst Michael Lasser explained:

Getty Images

2Q results show limited consumer appetite for RSH’s product offerings RSH faces a myriad of challenges in reaching profitability, including difficulty in its mobility business & the need to revamp the retail product assortment. The company announced a comp decline of -20% which was worse than our est. of -9.0% (cons. 11.6%). The comp sales decline was largely due to tepid consumer demand for product offerings in the mobility segment which comp declined -30% during the quarter. Mgmt cited overall softness in the consumer electronics industry as an additional obstacle to the company’s pursuit of profitability. RSH’s gross margin increased by 30 bps to 35.3%, but was flat if excluding the impact of inventory reserves. While the company spoke to some improvement as of late, we think the road ahead is difficult.

The company is exploring financial alternatives to restructure debt obligations to undergo store closures. Total liquidity went down from $424 mm to $182 mm during 2Q and lenders have put additional pressure on RSH’s ability to tap into its revolver. At its current burn rate, RSH will need further financing in the near term for any strategic turnaround of the business. We are not sure that it will be able to get all of its stakeholders to agree on a plan. Plus, the more time that goes by, the more likely that vendors will become concerned.

Lasser rates Radioshack a Sell with a 50 cent price target.

PBoC joins other major central banks with unconventional monetary policy action

Softer than expected economic growth in China (see discussion) has finally spurred the PBoC into action. However, rather than undertaking asset purchases that would inject reserves into the overall banking system, the PBoC forced liquidity directly into state-owned banks.

NY Times: - With industrial production growing at the slowest pace since the worst of the global financial crisis and foreign direct investment in a tailspin, China appears to have taken the unusual step of using monetary stimulus in an attempt to forestall further economic weakness.

[Related -Buffett's Market Indicator Flashes Red, Prepare To Sell]

China's central bank has lent 100 billion renminbi, or $16.2 billion, to each of the country's five main, state-controlled banks, bankers and economists said Wednesday, although the central bank and the five banks involved stayed silent. The seemingly stealthy decision to inject a total of $81 billion into the banking system this week came as the Chinese economy, like many economies in Europe, has slowed over the summer, although still expanding at a pace that would be the envy of most countries around the world.

This is probably the least effective QE-style action, as state-owned lenders are unlikely to efficiently deliver capital into the private sector. But the fact that the PBoC has taken this action tells us this could be the start of a longer monetary stimulus effort. The markets are not expecting a near-term economic improvement and instead pricing in a prolonged battle to accelerate growth. China's SHIBOR rate swap curve has become more inverted than a month ago with expectations of further rate declines.

[Related -A Buyback Boost?]

Benzinga Weekly Preview: Fed Meeting In Focus

Related FDX Earnings Expectations For The Week Of September 15 Morgan Stanley Highlight's Potential Catalysts For FedEx Corporation Earnings Buyback Mania Inflates 2Q Earnings Growth (Fox Business) Related ORCL Earnings Expectations For The Week Of September 15 D.A. Davidson & Co. Sees MICROS Systems Acquisition As Good For Oracle Corporation Tech M&A Surges in 2Q (Fox Business)

The Federal Reserve is set to hold its two-day monthly policy meeting next week on Wednesday and Thursday, which investors will be eagerly awaiting for details about the bank’s rate hike plans.

Ahead of the meeting, Fed officials have indicated that the bank will likely maintain a low interest rate well into 2015, however there has been a lot of speculation that the bank will make a move sooner than expected should the labor market improve more quickly than forecast.

Key Earnings Reports

Next week, investors will be waiting for several key earnings reports, including FedEx Corporation (NYSE: FDX), Oracle Corporation (NASDAQ: ORCL), Rite Aid Corporation (NYSE: RAD) and ConAgra Food, Inc. (NYSE: CAG).

FedEx Corporation

FedEx is expected to report first quarter EPS of $1.94 on revenue of $11.47 billion, compared to last year’s EPS of $1.53 on revenue of $11.02 billion.

On August 7, Merrill Lynch gave FedEx a Buy rating with a $175 price objective, noting that the company has a high potential for growth.

“FedEx reiterated its $1.6 billion profit improvement plan at Express (from fiscal year 2013’s full-year base) and its target for a 75 percent run-rate by year-end fiscal year 2015, leading to its $8.50-$9.00 EPS target in fiscal year 2015 (we are at $8.75). In its recent 10-K filing, it noted that pension expense was expected to decrease $215 million in fiscal year 2015, indicating that EBIT needs to improve only $530 million, or 15 percent from fiscal year 2014, to reach its target.

"Its original plan was to reach $950 million in EBIT improvement by this point (75 percent of $1.6 billion at Express, or $1.2 billion, less the $250 million improvement it gained in fiscal year 2013). We believe this highlights that FedEx’s targets could prove conservative, although since it set those targets, international trade down, a new postal service contract and rising fuel costs have tempered some of that original potential. Beneficially, staff cuts were bigger than expected,with 3,600 employees accepting buyouts, with the final 25 percent off the payrolls in May 2014 (boosting fiscal year 2015).”

On June 19, Credit Suisse was more conservative on FedEx, giving the company a Neutral rating with a $156 target price. The analysts at Credit Suisse said that oil prices present a considerable risk to the company’s profits.

“Credit Suisse's Global Commodities research team believes that there is considerable upside price risk for oil, and further note that 'not much has to go "wrong" for oil to enter an upward spiral/trajectory,' given already tight supply/demand dynamics. More recently, escalating turmoil and violence in the Middle East (particularly Iraq) is creating further upside risk to oil prices.”

On September 8, Morgan Stanley gave FedEx an Equal-Weight rating, saying that the company will likely beat expectations.

“Taking a look at normal seasonality, FedEx’s earnings in the fiscal first quarter have typically shown a 18 -19 percent sequential decrease (depending on whether we look at average sequential change over the past 10 years or 5 years). Consensus at $1.94 per share implies first quarter earnings decline ~21 percent sequentially, which may be conservative for the following reasons: (1) Freight data points have remained strong, even accelerated in some instances, through August; (2) Savings from cost realignment initiatives at FedEx Express, while expected to be back-half loaded in fiscal year 2015, should provide some tailwind to first quarter earnings vs. normal seasonality; and (3) Fuel surcharge lag impact, which was a significant year-over-year headwind to first quarter 2014 results, should be a year-over-year tailwind to first quarter 2015 results.”

On September 6, S&P Capital IQ gave FedEx a Strong Buy rating with a $180 price target, noting that the company’s profit improvement program will likely increase its operating income significantly.

“We are positive on FedEx's profit improvement program, which seeks to add $1.7 billion to operating income by fiscal year 2016, with up to 75 percent of this target expected to be achieved by fiscal year 2015. We think the goal is realistic, using a combination of cost savings, efficiency improvements and incremental revenue-generating ideas.

"We also expect the company to benefit from improvement in the U.S. and global economies over the next year, which we believe will lead to increased volumes across FedEx's entire network. We think the shares will benefit from increased investor interest in logistics stocks on concrete signs of economic improvement.”

Oracle Corporation

Oracle is expected to report first quarter EPS of $0.64 on revenue of $8.77 billion, compared to last year’s EPS of $0.59 on revenue of $8.38 billion.

On June 25, Merrill Lynch gave Oracle a Buy rating with a $46 price objective, saying that the company’s plans for its cloud services will help drive revenue in the coming year.

“To what extent Oracle will see success in all the cloud layers –- Software as a Service (SaaS), PaaS (Platform as a Service), IaaS (Infrastructure as a Service) -– is debatable, but at a minimum, it makes it harder to lose existing customers and easier to upsell add-on cloud solutions. One advantage that Oracle has is that the integrated stack allows it to deliver cloud services more profitably. Oracle added just 35 employees in the fourth quarter to its 19 global data centers, while the cloud accelerated.”

On June 23, Credit Suisse gave Oracle an Outperform rating with a $45 target price, noting that the company’s acquisition of Micros Systems will help expand the company’s customer portfolio.

“Micros extends Oracle's commerce platform, customer experience cloud and industry portfolio, which includes commerce, sales, service, social, and the oracle marketing cloud. Specifically, by combining (1) Responsys and Eloqua (i.e., providing CMOs support for both B2C and B2B marketing automation and campaign management), (2) BlueKai (i.e., enabling for customization of campaigns and analysis of customer data), (3) RightNow Service (e.g., web self-service, chat, e-mail, social network integration, community building, fully integrated agent desktop, Intelligent Voice Automation) and (4) Endeca InFront (e.g., catalog search, navigation) with Oracle’s ATG Commerce and WebCenter and Oracle’s leading CRM and merchandising solutions (e.g., Fatwire, Siebel Marketing, Oracle Fusion CRM SFA), Oracle can enable omni-channel CRM, retail and commerce for sales, marketing, service and loyalty, as well as provide merchandising, pricing and order capture (e.g., Web, store, phone, mobile device). The acquisition of Micros provides Oracle with software at the point of sale and thus visibility into store activity (as well as deeper exposure to both the hospitality and retail verticals), enabling a broad omni-channel commerce experience similar to the strategy highlighted by NetSuite's acquisition of Retail Anywhere in early 2013.”

On September 9, DA Davidson gave Oracle a Neutral rating with a $46 price target, noting that the addition of Micros will likely help grow the company’s global portfolio.

“We estimate that Micros will add roughly $1.5 billion to Oracle’s revenue line, or 3.7 percent of our current fiscal year 2015 revenue estimate of $40.1 billion. The acquisition, which will cost Oracle $5.3 billion, or $4.6 billion net of cash, should be immediately accretive, and is Oracle’s largest acquisition since its purchase of Sun Microsystems in 2010.”

On September 6, S&P Capital IQ gave Oracle a Hold rating with a $44 price target, cautioning that the company’s shares are fully valued.

“We downgraded our opinion on the shares in March 2014, reflecting our concerns about revenue growth and what we saw as a largely full valuation. Oracle has been acquiring SaaS companies over the past few years. In January 2012, it purchased RightNow in a transaction valued at $1.5 billion. In April 2012, it acquired Taleo in a deal valued at $1.9 billion. In February 2013, Oracle purchased Eloqua in a transaction worth some $935 million. In February 2014, the company acquired Responsys for some $1.6 billion.”

Rite Aid Corporation

Rite Aid is expected to report second quarter EPS of $0.07 on revenue of $6.47 billion, compared to last year’s EPS of $0.03 on revenue of $6.28 billion.

On September 4, Credit Suisse gave Rite Aid an Outperform rating with an $8.50 price target, citing the company’s impressive August sales.

“Rite Aid reported solid August sales driven by continued strength in the pharmacy, which offset weaker than expected front-end results. Total comp growth of 3.9 percent was slightly ahead of our estimate of 3.7 percent and consensus of 3.3 percent. The pharmacy comp of 5.2 percent exceeded our 4 percent estimate, as sales likely benefited from continued inflation. Script growth of 3.7 percent was the second-highest result seen in the last 18 months, although the trend decelerated modestly from July. The front-end comp of 1.1 percent missed our 3.0 percent target. A pullback in promotions and a shift in back-to-school shopping to other channels could be drivers of the weaker-than-expected front-end result, in our view. We continue to rate Rite Aid Outperform. While the company's fiscal second quarter should experience similar headwinds to the first quarter, the back half of the year should see a meaningful ramp from MCK benefit, new generics and ACA, as well as benefits from Rite Aid's internal initiatives (remodels, file buys, expense control).”

On September 6, S&P Capital IQ gave Rite Aid a Hold rating with a $7.50 price target, noting that the company will likely see expansion in the coming quarter.

“We expect benefits over the next 12 months from expansion of the company's loyalty card program, continued progress on Wellness store remodeling efforts, increased prescription file buys and improved purchasing efficiencies. Despite limited flexibility due to a highly leveraged balance sheet, we expect progress on these actions to help strengthen its store base and better position the company to benefit from provisions of the new health care law that went into effect in January 2014.”

ConAgra Food, Inc.

ConAgra Food is expected to report first quarter EPS of $0.35 on revenue of $3.77 billion, compared to last year’s EPS of $0.37 on revenue of $4.20 billion.

On June 27, Merrill Lynch gave ConAgra an Underperform rating with a $30 price objective, cautioning that the company’s earnings growth will likely be depressed in the coming quarter.

“Our $30 price objective is based on a 13x target multiple on our C2015 estimate of $2.32, which includes Ralcorp and Ardent Mills. Our target multiple represents a discount to the packaged food group, which reflects expectations for muted earnings growth. Stabilizing/improving sales growth for consumer and private brands are key factors needed to improve earnings and valuation.”

On June 26, Credit Suisse gave ConAgra Foods a Neutral rating with a $31 target price, citing headwinds in the coming quarter for their caution.

“ConAgra reported fourth quarter adjusted EPS of $0.55, in-line with last week's pre-announcement.The company recorded $605 million of goodwill impairment charges related to Ralcorp and $76 million of impairments to the Chef Boyardee brand, due in part to the sales declines following the curious decision to eliminate EZ open lids. Management demonstrated appropriate humility on the earnings call regarding the Ralcorp integration but asserted that the problems had to do with the weak condition of the Ralcorp assets rather than the strategy of marrying a private label business with brand. That may be the case, but in our view, the pendulum shift to private label has regrettably diverted management attention and resources away from the stewardship of brands like Chef, Healthy Choice and Orville. We may be jumping to conclusions, but it is quite possible that the urgency to compensate for weakness in private label played a role in the decision to cut costs on Chef at the expense of packaging convenience.”

On September 6, S&P Capital IQ gave ConAgra Foods a Buy rating with a $34 target price, citing the integration of Ralcorp for its optimism.

“While we are disappointed in recent results from the private label business and the quality of the potato crop for Lamb Weston, we believe the company is well-positioned to benefit in fiscal year 2015 from completion of the integration of Ralcorp and expected margin benefits from efficiency improvements and supply chain cost savings as comparisons ease.”

Economic Releases

The Fed meeting will be the star of next week’s economic calendar, but U.S. labor data will also take top bill. Investors will be interested to see how the U.S. labor market is progressing for a better idea of the Fed’s future plans for an interest rate hike.

Daily Schedule

Monday

Earnings Releases Expected: Analogic Corporation (NASDAQ: ALOG) Economic Releases Expected: U.S. industrial production, U.S. manufacturing production

Tuesday

Earnings Expected: Adobe Systems Incorporated (NASDAQ: ADBE) Economic Releases Expected: British PPI, British CPI, German ZEW economic sentiment survey, U.S. PPI, U.S. rebook

Wednesday

Earnings Expected: Cracker Barrel Old Country Store, Inc. (NASDAQ: CBRL), FedEx Corporation (NYSE: FDX), Lennar Corporation (NYSE: LEN), United Natural Foods, Inc. (NASDAQ: UNFI) Economic Releases Expected: British unemployment rate, Eurozone CPI, U.S. CPI, U.S. current account, Japanese trade balance

Thursday

Earnings Expected From: ConAgra Foods, Inc. (NYSE: CAG), Oracle Corporation (NASDAQ: ORCL), Pier 1 Imports, Inc. (NYSE: PIR), Rite Aid Corporation (NYSE: RAD) Economic Releases Expected: British retail sales, U.S. housing starts, U.S. initial jobless claims, U.S. continuing jobless claims, Federal Reserve rate decision

Friday

Earnings Expected From: No notable earnings expected Economic Releases Expected: German PPI, eurozone current account

Posted-In: Earnings Economic DataEarnings News Previews Pre-Market Outlook Markets Trading Ideas Best of Benzinga

© 2014 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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This Stock Has A 3.56% Yield And Sells For Less Than Book

Cliffs Natural Resources Cliffs Natural Resources, Inc. (NYSE: CLF) has been named as a Top 5 dividend paying metals and mining stock, according to Dividend Channel, which published its weekly "DividendRank" report. The report noted that among metals and mining companies, CLF shares displayed both attractive valuation metrics and strong profitability metrics. For example, the recent CLF share price of $16.88 represents a price-to-book ratio of 0.5 and an annual dividend yield of 3.56% — by comparison, the average metals and mining stock in Dividend Channel's coverage universe yields 1.9% and trades at a price-to-book ratio of 1.7. The report also cited the strong quarterly dividend history at Cliffs Natural Resources, Inc., and favorable long-term multi-year growth rates in key fundamental data points.

Click here to find out The Top 5 DividendRank'ed Metals Stocks »

The report stated, "Dividend investors approaching investing from a value standpoint are generally most interested in researching the strongest most profitable companies, that also happen to be trading at an attractive valuation. That's what we aim to find using our proprietary DividendRank formula, which ranks the coverage universe based upon our various criteria for both profitability and valuation, to generate a list of the top most 'interesting' stocks, meant for investors as a source of ideas that merit further research."

The annualized dividend paid by Cliffs Natural Resources, Inc. is $0.60/share, currently paid in quarterly installments, and its most recent dividend ex-date was on 08/13/2014. Below is a long-term dividend history chart for CLF, which Dividend Channel stressed as being of key importance. Indeed, studying a company's past dividend history can be of good help in judging whether the most recent dividend is likely to continue.

Special Offer: Join the income investing conversation on ValueForum.com with a special Seven Days for Seven Dollars invitation from Forbes.

Companies that treat workers well have better stock returns

NEW YORK (CNNMoney) It turns out the best places to work around the world are also the best companies to invest in.

That's what new research by professors at the University of Pennsylvania's Wharton School and Warwick Business School concludes.

Investors love the companies that are named to the annual "100 Best Companies to Work For" list that's put out by Great Place to Work Institute in the U.S. and other countries around the world.

"Treating your people like assets does affect your performance," said Alex Edmans, one of the co-authors of the study.

American firms that are good to their workers beat their peers in the stock market by 2 to 3% per year, according to an earlier study. To see how those results played out in other countries, so the authors of the latest study looked at "Best Companies" around the world.

They found that the earlier study's results hold up especially well in nations where there's a lot of labor market flexibility -- meaning companies have a lot of leeway over hiring and firing.

Their study found that companies in the U.S., Britain and Canada have more flexibility, so there's a stronger link between a list appearance and stock bump.

For example, Google (GOOGL, Tech30), Salesforce.com (CRM, Tech30) and Intuit (INTU) are in the top 10 companies to work for. The stocks of those three companies have all exceeded the overall stock market performance for the past year. Google is up more than 32% in the past year compared to a 15% return for the S&P 500.

In places like Germany and France, where governments have more restrictions around how employers treat workers and the processes around hiring and firing, the link was weaker.

Basically, Edmans said, the results show that it behooves firms to do right by the people that work for them.

"Doing the right thing can lead to doing well yourself," he said.

Carl Icahn Is Having Another Good Year Thanks To Apple

With his brand of activist investing as popular as ever, Carl Icahn has consistently been beating the stock market indexes and the vast majority of richly-paid hedge fund managers over the last five calendar years. He is on his way to doing it again in 2014.

After a tough first quarter that saw Icahn's investment fund, which he uses to bet on stocks with his own money and money belonging to his publicly-traded Icahn Enterprises, fall by 0.4%, Icahn rebounded in a big way in the spring. Icahn's investment fund returned 10.7% in the second quarter, according to comments SungHwan Cho, Icahn Enterprises' chief financial officer, recently made on a conference call.

Icahn finished the first half of 2014 with his investment fund up 10.2%. That beats the return of the Standard & Poor's 500 index, which returned 6.05% over the same time period. It also crushed the average hedge fund manager, who returned 3.2% this year through June, according to HFR.

AK Steel Holding Corporation Drops On Lowered Guidance; Sector Higher On Commodity Rally

Related AKS Markets Reverse Early Morning Losses; Still Lower On The Day Bank Of America Bullish On Steel

Following weak guidance , shares of AK Steel Holding Corporation (NYSE: AKS) are trading down 6.8 percent at $10.07.

Owing to a closure of a Kentucky furnace and lower production, AK Steel said it expects shipments to fall by about three percent in the third quarter from the second quarter to 1.35 million tons, and it expects to report a profit of $0.05 to $0.10 a share, versus previous guidance of $0.26 a share.

Other steel stocks, though, are higher on a general rally in commodities.

Nucor Corporation (NYSE: NUE) was up 2.2 percent at $55.10, United States Steel Corporation (NYSE: NUE) was higher by 2.8 percent at $39.18, and Steel Dynamics, Inc. (NASDAQ: STLD) rose three percent at $23.90.

Posted-In: News Commodities Markets Movers

© 2014 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

  Related Articles (AKS + NUE) AK Steel Holding Corporation Drops On Lowered Guidance; Sector Higher On Commodity Rally Markets Reverse Early Morning Losses; Still Lower On The Day Bank Of America Bullish On Steel Steel Sector In Play Following Credit Suisse Upgrade Of U.S. Steel Yellen's Speech Not Enough To Keep Dow, S&P 500 In Positive Territory

Auto Sales Surge in August, Led by Chrysler, Ford, Nissan

Craig Warga/Bloomberg via Getty Images DETROIT -- August auto sales were unexpectedly strong, thanks in part to heavy discounting by the manufacturers, with the industry selling at an annualized pace not seen since early 2006. General Motors (GM) narrowly missed expectations, but held on to the top spot, while Toyota Motor (TM) edged Ford Motor (F) for the second straight month. The lowest gasoline prices in four years helped GM and Chrysler Group, a unit of Fiat, achieve double-digit gains in sales of full-size pickups, which provide the bulk of profit. But sales of Ford's industry-leading F-Series pickups fell as the automaker began the changeover to an all-new aluminum-bodied version. With most of the top automakers reporting August sales by midday Wednesday, Morgan Stanley (MS) analyst Adam Jonas said the industry's seasonally adjusted annualized sales rate last month was a higher-than-expected 17.3 million vehicles, well above the 16.6 million forecast from analysts polled by Thomson Reuters. It was the highest rate since 17.6 million in January 2006, according to research-firm Autodata. "The industry had its best August in over a decade, with sales topping 1.5 million vehicles," observed Bill Fay, Toyota Division group vice president. Auto sales are an early indicator of consumer demand as the industry accounts for one-fifth of all U.S. retail spending. GM sales fell 1.2 percent to 272,423 vehicles; analysts had expected 272,734. Toyota was up 6.3 percent to 246,100, beating the forecast of 225,973. Ford was up 0.4 percent to 222,174, against the expectation of 216,991. Chrysler showed a 20 percent gain, to 198,379, compared with a forecast of 185,072, while Nissan Motor was up 11.5 percent to 134,388, versus an expectation of 123,855. Korean automaker Hyundai Motor said August sales were up 5.9 percent to 70,003. Volkswagen was down 12.8 percent to 35,181. Incentive spending by the industry last month climbed from a year ago, to an average $2,772 per vehicle, but declined slightly from July, according to research-firm TrueCar.com. Virtually all major automakers except Nissan boosted discounts from a year ago. Research-firm Edmunds.com said August sales were helped by a higher percentage of zero-interest dealer-financed loans. Transaction prices in August averaged $32,495, driven by strong sales of pickups and full-size SUVs, according to research-firm Kelley Blue Book. -. When you get into that back office and start signing all the paperwork, the topic of extended warranties will come up pretty quickly. Ellie Kay, an author of 15 finance-related books, notes that such warranties are negotiable. "Before you sign on the dotted line, check out other sources of extended warranty pricing," she says, such as those provided by your bank or insurance company. "Then either use this lower price in the financial and insurance office for negotiation to get them to match the price, or buy it from the other source." A scenario from Kay during her last car purchase: "The dealer quoted me $4,200 for a three-year extended warranty for my 280SLK Roadster Mercedes that included a $250 deductible. USAA -- my insurance company -- gave me a three-year warranty for $3,200 with zero deductible. I've used the new warranty once already. The bill was $1,100 and I paid nothing because of the zero deductible." Bottom line: The default extended warranty is almost always the worst deal. 1. You'll get the dealer's extended warranty You may have a monthly payment figure in your head when shopping for a new car, but your interests are better served when you focus on the out-the-door price instead. "A sales rep can often trick you by offering a lower monthly payment, but [one that] will stretch out the terms of the loan," says David Bakke, a car buying expert at MoneyCrashers.com. You can reduce the overall cost of the car via negotiation and by skipping accessories and add-ons. "Things like navigation systems, rims, floor mats or car audio/entertainment systems can be purchased from a third party vendor, usually for less."

Markets Mostly Flat; Viacom Posts Downbeat Earnings

Related BZSUM Markets Slip A Percent; Walgreens Falls Bloomin' Brands Falls After Weak Results; Chegg Shares Spike Higher

Following the market opening Wednesday, the Dow traded up 0.01 percent to 16,430.88 while the NASDAQ tumbled 0.02 percent to 4,351.99. The S&P also fell, dropping 0.04 percent to 1,919.37.

Leading and Lagging Sectors

In trading on Wednesday, energy shares were relative leaders, up on the day by about 0.59 percent. Top gainers in the sector included Parker Drilling Co (NYSE: PKD), Alpha Natural Resources (NYSE: ANR), and Resolute Energy (NYSE: REN).

Telecommunications services shares fell by 0.74 percent in Wednesday’s trading. Meanwhile, top decliners in the sector included RRSat Global Communications Network (NASDAQ: RRST), down 5.9 percent, and China Unicom (Hong Kong) (NYSE: CHU), off 4.6 percent.

Top Headline

Viacom (NASDAQ: VIAB) reported weaker-than-expected fiscal third-quarter earnings.

The New York-based company posted quarterly earnings of $610 million, or $1.40 per share, versus $643 million, or $1.31 per share, in the year-ago period. Its adjusted earnings per share rose 10% to $1.42, missing analysts’ estimates of $1.44 per share.

Its revenue declined 7% to $3.42 billion from $3.693 billion, versus expectations of $3.56 billion.

Equities Trading UP

Criteo SA (NASDAQ: CRTO) shares shot up 7.97 percent to $31.96 after the company reported record Q2 results and raised its full-year forecast.

Shares of Itron (NASDAQ: ITRI) got a boost, shooting up 8.49 percent to $39.49 after the company reported Q2 earnings of $0.54 per share on revenue of $489.40 million.

Twenty-First Century Fox (NASDAQ: FOXA) shares were also up, gaining 4.95 percent to $32.85 after the company announced Tuesday that it is withdrawing its bid for Time Warner (NYSE: TWX). Instead, the company’s board authorized a $6 billion share repurchase program.

Equities Trading DOWN

Shares of Rocket Fuel (NASDAQ: FUEL) were down 27.19 percent to $18.02 after the company reported a Q2 loss of $0.11 per share on revenue of $92.60 million. Rocket Fuel also announced the acquisition of [x+1] for $230 million.

Nu Skin Enterprises (NYSE: NUS) shares tumbled 21.69 percent to $45.36 after the company reported downbeat quarterly results and issued a weak forecast.

Groupon (NASDAQ: GRPN) was down, falling 18.09 percent to $5.79 after the company reported downbeat revenue for the second quarter and issued a weak earnings forecast for the current quarter.

Commodities

In commodity news, oil traded up 0.42 percent to $97.79, while gold traded up 1.84 percent to $1,308.90.

Silver traded up 1.12 percent Wednesday to $20.06, while copper fell 1.11 percent to $3.17.

Eurozone

European shares were lower today. The eurozone’s STOXX 600 fell 1.16 percent, the Spanish Ibex Index dropped 1.39 percent, while Italy’s FTSE MIB Index tumbled 2.37 percent. Meanwhile, the German DAX fell 1.04 percent and the French CAC 40 declined 1.02 percent while UK shares dipped 1.01 percent.

Economics

The MBA reported that its index of mortgage application activity gained 1.6% in the week ended August 1.

The US trade deficit declined 7% to $41.5 billion in June, versus a slightly revised $44.7 billion in May. However, economists were expecting a deficit of $45 billion.

The Treasury is set to auction 3-and 10-year notes.

Posted-In: Earnings News Guidance Eurozone Futures Commodities M&A Intraday Update

© 2014 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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Defense News Roundup: U.S. Bolsters Aircraft Missile Defenses, May Increase Assistance to Iraq

The U.S. military has a reputation of being a somewhat secretive organization. But, in one respect at least, the Pentagon is one of the most "open" of our government agencies. Every day of the week, rain or shine, the Department of Defense tells U.S. taxpayers what contracts it's issued, to whom, and for how much -- all right out in the open on its website.

So what was the Pentagon up to last week?

Between "base" spending levels, and supplementary spending on overseas contingency operations (OCO), the DoD is budgeted to spend about $11.8 billion a week in fiscal 2014, of which $6.2 billion goes to military hardware, infrastructure projects, and supplies. All through July, however, the Pentagon ran under budget. This past week, hardware, infrastructure, and supply contracts totaled only $4.22 billion in value.

And what did the generals get for their (read "our") money?

Better missile defenses for (military) airplanes
Last week the DoD awarded defense contractor Exelis (NYSE: XLS  ) a $190 million contract to supply the U.S. Special Operations Command, or SOCOM, with as many Suite of Integrated Radio Frequency Countermeasure, or SIRFC, components and services for its fleet of CV-22 Osprey tiltrotor aircraft as SOCOM needs over the next five years.

Designed to detect, jam, and decoy missile-guidance radars, SIRFC is an onboard electronic warfare system already used aboard U.S. Army helicopters such as the Black Hawk, Apache, and Chinook to defeat incoming radar-guided missiles. It is designed specifically to defeat such anti-aircraft weapons as surface-to-air missiles, and also radar-guided anti-aircraft "flak" guns.

Better protection for soldiers, too
A smaller contract went to Oshkosh Corp. (NYSE: OSK  ) to bolster protection for troops on the ground. Valued at $45 million, the award will fund repairs and upgrades on 800 of the company's Mine-Resistant, Ambush-Protected All-Terrain Vehicles, dubbed "M-ATV," and used primarily to transport troops and supplies in Afghanistan. Work performed under this contract will continue through the end of next year -- which suggests U.S. troops will be present in Afghanistan at least that long as well.

And don't forget about the allies
Foreign buyers of U.S. military equipment were behind a number of contracts awarded last week. Among them:

Honeywell (NYSE: HON  ) won one of the week's biggest contracts to support the militaries of U.S. allies Australia, Morocco, Turkey, and the United Arab Emirates. Honeywell will be shipping out to these countries a total of 440 T55-GA-714A engines and 365 T55-GA-714A engine fielding kits. Among other aircraft, the T55-GA-714A engine is used to power CH-47 Chinook transport helicopters, an aircraft that is present in (or, in the case of Turkey, on order by) the militaries of all four countries. The total value of this contract modification to Honeywell will be nearly $122 million. Lockheed Martin (NYSE: LMT  ) won a $50 million contract to supply the militaries of South Korea and Finland with M934E6 and M934E7 warhead fuses for use with these countries' arsenals of Stinger shoulder-fired anti-aircraft missiles (often called "MANPADS," short for man-portable air defense systems). Deliveries of the fuses will continue through Aug. 25, 2018. Textron's (NYSE: TXT  ) Cessna unit won a $64 million contract to provide "support" and training services to Afghan pilots and mechanics servicing 26 C-208B "Caravan" and six T-182T "Skylane" utility aircraft through based at Kabul International Airport, Kandahar Air Base, and Shindand Air Base in Afghanistan through Jan. 31, 2016.

Opportunities on the horizon
So much for the contracts everyone knows about. Now, let's end last week's roundup with one contract that you may not yet have heard of.

Here again, it's Textron that looks to be a winner. Early last week, the U.S. Defense Security Cooperation Agency, which coordinates sales of military services and hardware to foreign governments through the Pentagon, notified Congress of the planned sale of parts and equipment, plus "aviation sustainment support, on-the-job maintenance training, and maintenance advice" -- this time for the Iraqi Aviation Command.

Valued at $500 million in total, Textron will be helping to keep Iraq's fleet of Bell 407, OH-58, and Huey II helicopters flying, as the government deploys them to fend off attacks by ISIS insurgents.

Mind you, this contract is not "official" yet, and the Pentagon hasn't yet officially announced the award to Textron. In all probability, most investors don't even know that it's in the works -- except that now, you do.

More from The Motley Fool: Warren Buffett Tells You How to Turn $40 Into $10 Million

Iraq Air Force UH-1H II "Huey." Photo: Wikimedia Commons.

How Coca-Cola Built Up Its Business Way Beyond Soda

www.minutemaid.com As demonstrated by its recent purchase/asset-swap deal with energy drink company Monster Beverage (MNST), Coca-Cola (KO) is more than just a slinger of soda. The company draws billions of dollars in revenue from a other liquids, including Dasani water and Powerade sports drinks. That's par for the course in the sugary beverage industry. Coke's eternal rival PepsiCo (PEP) does a brisk business selling drinks that aren't soda, such as the Starbucks (SBUX) ready-made concoctions it offers in partnership with the coffee giant. PepsiCo, in fact, draws most of its revenue from food products. These include notable brands such as Doritos and Quaker Oats. Diversification is key in this business; there's only so much cola the world is willing to drink. With that in mind, here's a look at a trio of influential asset buys Coke made outside of its signature fizzy product line that have molded it into the behemoth we all know and love and will continue to shape the company. Minute Maid (1960) The history of Coca-Cola as a brand and company can be broken down roughly into three eras -- the soda fountain era (beginning when Coke was first served in 1886 to 1898), the bottle era (from 1899 to 1959), and what we can call the diversification era (from 1960 to the present). The latter began when Coke made its first non-soda buy that year. Through a stock swap it acquired the now-familiar line of orange juice products, notable for being the first such juice available in frozen concentrate form (making it available year-round no matter a customer's location). From then on, Coca-Cola became a company selling more than only carbonated beverages. This was a smart move -- these days, the firm boasts 11 non-soda brands that each take in more than $1 billion in revenue. They're Minute Maid (U.S.), Del Valle (South and Central America), Georgia (Japan), Aquarius (Japan), Powerade (U.S.), BonAqua (Hong Kong), Sokenbicha (Japan), Dasani (U.S.), Vitamin Water (U.S), Simply Orange (U.S.) and Minute Maid Pulpy (China). Columbia Pictures (1982) The early 1980s marked a brief era when Coke ventured far out of the beverage business to diversify. The target asset was Columbia Pictures, a storied Hollywood movie studio. Coke made an overwhelming bid for the company of $750 million, and just like that, it was in the film business. The results were mixed. The studio had success with several releases (like the enduringly popular underdog story "The Karate Kid"), but also unloaded the comedy "Ishtar" on the world. The expensive, poorly reviewed film became one of the most notorious bombs in Hollywood history. In spite of Columbia's wins (which also included TV hits thanks to Embassy Communications, a small-screen production outfit it bought in 1985), it couldn't escape the hit to its finances and reputation incurred by the $40 million loss from "Ishtar." It was time for Coke to return to fundamentals, and in 1989 it sold the bulked-up Columbia to a much more entertainment-oriented company, Japanese electronics giant Sony (SNE), for a fizzy $3.4 billion. Keurig Green Mountain (2014) Sometimes it's better to take an anchor stake -- and reach production, distribution and marketing deals with a target company -- rather than buy it outright. That seems to be the ambition for Coke with the Monster Beverage deal, as well as the arrangement it reached this past February with Keurig Green Mountain (GMCR). For $1.25 billion, Coke took a 10 percent stake in Keurig (later raised to 16 percent), maker of the K-Cup beverage pod brewing system. The two also signed a 10-year agreement to mutually develop Coke-branded offerings for the latter's Keurig Cold at-home drink-making device. Cold is a clear attempt by Keurig to grab some do-it-yourself-soft-drink market share from SodaStream (SODA), which has seen its sales grow robustly over the past few years. There's money to be made in this market, so Coke and Keurig are making a lunge for it. Expanding by Degrees Might this be the future for Coke: purchases of minority stakes and co-development deals? The company's acquisitions have historically been full-on buys rather than strategic purchases. The Monster Beverage and Keurig deals indicate a more cautious approach for the soda maker, as befits its stature as a conservative enterprise investors can rely on for profits and dividend income. Time will tell if this style of expansion will sweeten Coke's results or not. More from Eric Volkman
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