Best Cheap Stocks For 2015: May 2014

Saturday, May 31, 2014

A Million Ways to Die in the Market: Dow Industrials, S&P 500 Hit Record Highs, Still Puzzle Pundits

There are a million ways to die in the market–and A Million Ways to Die in the West. The former we’ll get to in a minute; the latter is a new movie from the Family Guy’s Seth MacFarlane that spoofs films like Once Upon a Time in the West, A Fistful of Dollars and any number of classic westerns. Rolling Stone’s Peter Travers gives A Million Ways to Die a middling review but notes that “there are lots of ways to die laughing at this Western raunchfest,” while the Wall Street Journal’s Joe Morgenstern says it’s “seldom as funny as it promises to be.” The New York Times Stephen Holden says you “might call the movie ‘Revenge of the Übernerd.’” A Million Ways won’t top the box office–that honor will go to Walt Disney’s (DIS) Maleficent–but if nothing else its a reminder of just how nasty, brutish and short life was back in the good old days of the Wild West.

Just like trading in the markets. The financial markets love to punish those who think they know all the answers, and that’s exactly what they’ve done this year. Very few people thought Treasury yields would fall this year, but that’s exactly what they’ve done. And no one expected the complete wash out in high-flying stocks like Twitter (TWTR) and Amazon (AMZN), but that’s exactly what we got.

Now everyone is simply confused. Sure, the S&P 500 gained 1.2% to 1,923.53 this week–another record high–while the Dow Jones Industrial Average rose 0.7% to 16,717.17–also a record high. The Nasdaq Composite jumped 1.4% to 4,242.62. The CBOE Volatility Index, also known as the VIX, fell to 11.40. That’s very low.

Strategists, however, would like to see bigger gains from the beaten-down Russell 2000, which advanced just 0.7% to 1,134.50 and continues to lag big caps. The 10-year Treasury yield fell 0.19 percentage points to 2.46% this week, the third lowest this year–causing more worry among those who think the bond market is always right.

The mixed signals were apparent even among the S&P 500′s best performing stocks, including Exelon (EXC), a utility that’s nearing completion of a merger with Pepco Holdings (PHI), and Priceline (PCLN), a high-flying internet stock that rose, well, because it could. Exelon gained 7.9% to $36.83 this week, while Priceline rose 6.8% to $1,278.63.

Bespoke Investment Group sums up the market’s vibe:

It was a short week for traders and investors due to the Memorial Day holiday on Monday, but that didn't stop the market from continuing to amaze (or confuse) as many as possible. In a week where Q1 GDP was revised down to negative 1% on an annualized basis, which was the lowest level of growth in three years, the S&P 500 followed through from last week's peek to new highs and continued to trade at levels never before seen.

Citigroup’s Robert Buckland and team aren’t worried about falling bond yields:

This year's rally in US Treasuries has caught most investors by surprise. 10 year yields have fallen from 3.0% at the start of the year to 2.4% at present, despite the previous consensus expectation of yields rising towards 3.25% by the end of the year. So why has the US bond market caught so many out? Perhaps the most obvious reason is that too many investors were already positioned for a further increase in treasury yields. There has been a classic bear squeeze.

Citi fixed interest strategists stick to their bearish view on US bonds. They think that 10 year yields will rise to 3.2% by end-2014 and 3.55% by end-2015. In their view, the 30 year bull market is over. This year's unexpected rally does not change that forecast…This would make us suspicious of some of 2014's most successful trades. Instead we would prefer to revisit some of those that did well in 2013: Japan, dividend growth (not just DY), Cyclicals vs Defensives.

Credit Suisse strategist Andrew Garthwaite and team raised their target for the S&P 500:

We add to our weighting in global equities (reversing our mid-March downgrade, where we halved our overweight) and lift our year-end S&P 500 target from 1,960 to 2,020…Earnings revisions (in the US) are now positive for the first time in two years: this is without sales surprises (which we think will happen as nominal GDP growth rises from 3.4% to 4.3% by year-end). Our 2014 US earnings growth forecast is marginally above consensus for the first time in 3 years. The interest charge could also fall further to reflect the lower junk yield (with US EBITDA margins ex-tech only at just above-average levels).

Don’t get too bullish though. The market will always find a way to make you pay.

Friday, May 30, 2014

Oxford Industries Posts Higher Q2 Net Sales, EPS: Beats EPS Estimates (OXM)

After the bell on Tuesday, Oxford Industries (OXM) announced its second quarter earnings, posting a 14% increase in net sales from last year’s same quarter.

The Atlanta, GA-based apparel company announced second quarter consolidated net sales of $235 million, which were up from last year’s Q2 figure of $206.9 million. The company’s EPS, on an adjusted basis, came in at $1.01, a 55% increase from last year’s 65 cents.

Oxford Industries beat analysts’ Q2 EPS estimates of 98 cents, but missed the analyst revenue consensus of $243.5 million.

Looking forward to full-year 2013, Oxford Industries lowered its EPS guidance to a range of $2.90 to $3.05. This comes in below the analysts’ consensus of $3.12.

OXM shares were up 86 cents, or 1.33%, at the end of trading on Tuesday. YTD the stock is up more than 40%.

Thursday, May 29, 2014

Best Defensive Stocks For 2015

Best Defensive Stocks For 2015: Acacia Research Corporation(ACTG)

Acacia Research Corporation, through its subsidiaries, acquires, develops, licenses, and enforces patented technologies in the United States. It assists patent owners with the prosecution and development of their patent portfolios; protection of their patented inventions from unauthorized use; generation of licensing revenue from users of their patented technologies; and enforcement against unauthorized users of their patented technologies. The company owns or controls the rights to approximately 200 patent portfolios, which include the United State?s patents and foreign counterparts covering technologies used in various industries. Acacia Research Corporation was founded in 1992 and is based in Newport Beach, California.

Advisors' Opinion:

[By Travis Hoium]
What: Shares of intellectual property owner Acacia Research (NASDAQ: ACTG ) fell 26% today after the company released earnings.

So what: Revenue fell 22% to $76.9 million and net income dropped 90% to $5.1 million, or $0.11 per share. On an adjusted basis, earnings per share were $0.47, which was actually $0.05 ahead of estimates.
[By Luke Jacobi]
Acacia Research (NASDAQ: ACTG) was down 21.10 percent to $15.48 after the company reported Q3 results. Stephens downgraded the stock from Overweight to Underweight.
[By Monica Gerson]
Breaking news
NASDAQ OMX Group (Nasdaq: NDAQ) and Borsa Istanbul A.S. have today concluded a wide-ranging agreement, which includes the delivery of market-leading technologies and advisory services to Borsa Istanbul, and NASDAQ OMX taking an equity stake in Borsa Istanbul. To read the full news, click here. Acacia Research (NASDAQ: ACTG) announced today that its Bolt MRI Technologies LLC subsidiary has entered into an agreement with Fonar Corporation (NASDAQ: FONR). To read the full news, click here. Douglas Emmett, (NYSE: DEI) ! announced that William Kamer will be retiring from full time service as its Chief Investment Officer effective January 31, 2014. Mr. Kamer will continue to be employed by Douglas Emmett as a Senior Advisor. To read the full news, click here. Acacia Research (NASDAQ: ACTG) announced today that its Brandywine Communications Technologies LLC subsidiary has entered into a settlement and patent license agreement with Alcatel-Lucent USA (NYSE: ALU). To read the full news, click here.
Posted-In: Benchmark US Stock FuturesNews Eurozone Futures Global Pre-Market Outlook Markets

source from Top Penny Stocks For 2015:http://www.seekpennystocks.com/best-defensive-stocks-for-2015.html

Wednesday, May 28, 2014

Best Dividend Stocks To Watch For 2015

Best Dividend Stocks To Watch For 2015: Cedar Shopping Centers Inc (CDR)

Cedar Shopping Centers, Inc., real estate investment trust, engages in the ownership, operation, development and redevelopment of supermarket-anchored community shopping centers and drug store-anchored convenience centers in the United States. As of December 31, 2007, it owned 118 properties, aggregating approximately 12.0 million square feet of gross leasable area primarily in Pennsylvania, Massachusetts, Virginia, Ohio, Connecticut, New Jersey, Maryland, Michigan, and New York. Cedar Shopping has elected to be treated as a REIT for federal income tax purposes and would not be subject to federal income tax, if it distributes at least 90% of its REIT taxable income to its stockholders. The company was founded in 1984 and is based in Port Washington, New York.

Advisors' Opinion:

[By Bill Smith]
Valuation
Lastly, because of the negative perception the entire industry has received, prices in this sector have been absolutely pummeled. ESI now trades at the lower end of all of its historical valuation bands: P/E, P/B, and P/S.

Bullish Points
Guru ownership and avg price: ESI owned by Hussman ($76.15), Weitz ($75.32), and Greenblatt ($73.29)Over 35% of shares are short, potential short squeezeStock buyback plan: ESI reduced outstanding shares by 19% yoy at the end of the 4th quarter. They repurchased 370K shares in 3Q11.The business model is scalable; the incremental cost to educate each additional student is low, leading to high marginsESI acquired Daniel Webster College, giving them a regional accreditation which they can use to broaden their reach in online classes
Bearish Points
High costs of education, in general, rightly or wrongly attract government intervention and could squeeze margins over time. Total student debt surpassed credit card bal ances, and sits at $1 Trillion as of the end of 2011.Subject to compliance with Dept of Education's 90/10 rules, which state! s a college can't collect more than 90% of revenue from students participating in federal loan programs.Cohort Default Rate (CDR): for-profit colleges must monitor the federal loan default rates of students who graduate or leave the school. If a school's CDR exceeds 25% for 3 consecutive years, or 40% in any one year, its students won't be eligible for federal financial aid.ESI competes on quality of product which is measured by graduation rates and ability to secure employment. For 2010, 70% of ESI graduates got employment in positions using skills taught in their program of study within 1 year. As of Oct 2011, this rate was 600 bp higher. The average annual salary reported by employed 2011 grads was $32K, compared to $32.4K for 2010 grads.With an improving economy, there's a potential ESI would see declining new student enrollmentsOver 35% of shares a re short
Summary
source from Top Penny Stocks For 2015:http://www.seekpennystocks.com/best-dividend-stocks-to-watch-for-2015.html

Stocks Running in Place

Each Monday, MoneyBeat publishes a short column in the WSJ print edition highlighting a statistic getting traction in the markets. This week's "big number" is 4.8%, the S&P 500′s spread between its intraday high and low over the past three months.

Stocks have been running in place over the past three months. Bloomberg News

The U.S. stock market is going nowhere fast.

Investors have sold into rallies and bought the dips over the past three months, a choppy trading environment that has left the S&P 500 stalled around record levels.

Over the past three months, the spread between the S&P 500's intraday high and low is 4.8%, the narrowest trading range since October 2006, according to market-research firm Bespoke Investment Group. Since 1984, the S&P 500 has traded in a tighter range over a three-month period only six times. The S&P 500, on average, swings in a 13% range over a three-month period.

The narrow trading range comes as fear has diminished on Wall Street. The Chicago Board Options Exchange Volatility Index, or VIX, fell last week to its lowest level in 14 months, as many investors have stopped betting on large stock swings. The gauge is widely viewed as a proxy for the stock market's capacity for sudden spikes and plunges.

"The broader market couldn’t be more relaxed," said Paul Hickey, co-founder at Bespoke.

The S&P 500 finished Friday at 1900.53, its 11th record closing high of the year. The stock index is up 2.8% in 2014.

Such a tight trading range doesn’t necessarily bode well for future performance. In the other instances when the S&P 500 traded in tight three-month bands, the index averaged a 1% gain three months later and a 2.1% advance six months later, according to Bespoke.

By comparison, the S&P 500 has averaged a 2.4% gain in all three-month ranges since 1984 and a 4.9% increase in all six-month ranges, according to Bespoke.

Tuesday, May 27, 2014

Wall Street This Week: Good News from AutoZone, Costco?

Top 5 Machinery Companies For 2015

www.netflix.com From a fast-growing maker of luxury purses hoping to bag another blowout quarter to the country's leading streaming video service rolling out another exclusive series, here are some of the things that will help shape the week that lies ahead on Wall Street. Monday -- We Remember It's Memorial Day, and that means that all of the stateside exchanges are closed. Of course, there will be international stocks trading. But whether you honor the spirit of the Memorial Day holiday or just see it as the start of summer and a good excuse to fire up the barbecue, there's no reason to be glued to CNBC. Your investments can wait. Tuesday -- Checking Under the Hood The auto parts industry has proven to be an all-weather niche. When the economy's humming along, folks are spending money on their cars. When the economy's in a funk, drivers hold on to their cars longer, and that requires more money invested in maintaining their aging vehicles. It's against this backdrop that AutoZone (AZO) reports quarterly results on Tuesday morning. Analysts see sales climbing 6 percent higher with earnings per share soaring 16 percent. The 4,871-store chain has beaten Wall Street's profit targets every quarter over the past year, so let's not assume that analysts are being generous with their forecasts. Wednesday -- Kors of Action Michael Kors (KORS) continues to be the growth darling when it comes to luxury handbags. As the iconic Coach (COH) has struggled, Kors has taken market share with its fashionable purses, satchels and other accessories. It's not even close. Analysts see Coach's sales declining 6 percent for its fiscal year ending in June. Wall Street sees Kors growing its business by 47 percent for its fiscal year that ended in March. We'll know for sure how Kors wrapped up fiscal 2014 when it reports on Wednesday. Thursday -- Big Savings in Bulk Another retailing niche that has seemed to have the same all-weather appeal as auto parts is the warehouse club market. Shoppers relish buying quality supermarket products in bulk, and that resonates when times are well but also plays well when consumers need to stretch a dollar. Costco (COST) is the poster child for warehouse clubs, and it reports on Thursday. Investors shouldn't hold out for spectacular growth. That's not what Costco does. Investors flock to the stock because of its steady performance, and on Thursday the market expects to see sales clock in 7 percent higher for its latest quarter with a 5 percent uptick in earnings. Friday -- Now Streaming Netflix (NFLX) has achieved great success with its streaming service by landing original content. "House of Cards," "Orange Is the New Black" and the revival of "Arrested Development" have made Netflix a valuable digital platform. One of last year's shows that didn't generate the same kind of buzz was Ricky Gervais' "Derek." Whether it was the notoriety surrounding the lead character's mentally challenged ways or just that the show originally aired on BBC, it wasn't one of Netflix's biggest additions. However, Netflix doesn't give up easily. The second season of "Derek" premieres on Netflix come Friday. More from Rick Aristotle Munarriz
•Chinese Dot-Coms are Hot Again - Just Wait for Alibaba's IPO •Buyout Blunders: 5 Firms That Should've Said Yes to the Deals •Amazon Prime Pulls Out More Exclusive Content to Fight Netflix

Monday, May 26, 2014

Dick’s Sporting Goods Strikes eCommerce Deal with ESPN (DKS)

The Pennsylvania-based sporting goods retailer, Dick’s Sporting Goods (DKS), announced it had reached an agreement with ESPN to serve as the exclusive online retailer for licensed merchandise.

Dicks’s will be embarking on a multi-year agreement as the exclusive online merchant for sporting goods merchandise on ESPN.com and related web properties. The new agreement will allow for fans to shop from an expanded product lineup of licensed fanware available at the rebranded ESPN Fan Shop powered by Dick’s Sporting Goods; sources also stated that contextually integrated shopping opportunities will also be featured across ESPN The Magazine, ESPN Radio, and a number of mobile properties including ScoreCenter, GameCast, and WastchESPN.

Sports fans will not be limited to shopping for apparel on the rebranded ESPN Fan Shop powered by Dick’s; the online store will also carry a whole host of other ESPN merchandise, including the popular documentary series “30 for 30.”

Dick’s shares traded higher on Monday, gaining 0.91% to kick off the trading week. The stock is up nearly 19% YTD.

Days of Future Past: Nasdaq Leads Stocks Higher; S&P 500 Hits Record High

Is it possible to get too much of the X-Men? From the looks of the responses to the new flick, X-Men: Days of Future Past, the answer is probably not, at least not yet. Whether its at the box office, where the film is predicted to rake in some $120 million this weekend, or with the critics–Rotten Tomatoes has 92% of the ink stained wretches giving it a positive review–everyone seems to agree: X-Men: Days of Future Past delivers the goods. In fact, I was hard pressed to find a critic who panned the film, which unites the original X-Men cast with the one from X-Men: First Class, with Wolverine sent back in time to the 1970s to avert an apocalyptic future.

Will investors be hoping for the chance to do the same thing one day? Right now, that might seem to be hard to imagine. The S&P 500, after all, gained 1.2% to 1,900.53 this week, a new record high and the first close above 1,900 in the history of the index. The Dow Jones Industrial Average, meanwhile, rose 0.7% to 16,606.27, just 109 points, or 0.7% away from a new high of its own. Even better, the Nasdaq Composite surged ahead by 2.3% to 4,185.81, retaking the leadership it had forfeited in March, while the small-company Russell 2000 gained 2.1% to 1,126.19, regaining its 200-day moving average.

The Dow Jones Industrials got a boost from UnitedHealth Group (UNH), which gained 2.8% to $78.77 this week, its highest close in more than one month. UnitedHealth announced this week that it would join the Illinois health exchange.

Walt Disney (DIS) advanced 3.6% to $83.32, two cents off the 52-week high reached in March. Disneyland said it would hike prices this week.

The biggest movers in the S&P 500 were also the biggest movers in the Nasdaq 100 this week. Netflix (NFLX) climbed 15% to $402.35 this week, its biggest weekly gain in four months. Netflix announced that it would launch its streaming-movie service in six European countries, including France and Germany.

Trip Advisor (TRIP), meanwhile, jumped 15% to $94.42, its biggest weekly gain since July 2013. Trip Advisor purchased lafourchette this week, while Italy said it was investigating the travel booking site to see if it too appropriate steps to keep fake opinions off the website.

Vertex Pharmaceuticals (VRTX) popped 9.2% to $71.04 this week. The Street.com’s Adam Feuerstein predicted the Vertex’s cystic fibrosis drug would be successful in clinical trials.

As you can probably tell by those gains, investors were feeling a lot better about risky stocks this week. Still, they liked their the 10-year Treasury bonds too, even if yields ticked up 0.018% percentage points this week to 2.536%, perhaps a sign that they’re buying into the notion that the Federal Reserve means it when it says it will keep interest rates lower for longer. Schwab’s Liz Ann Sonders and team warn investors not to be caught up in the rush for yield:

With the economy improving and some signs of inflation picking up we would traditionally expect yields to move higher—and we still believe that will ultimately occur. At this point, we don’t believe the bond market is signaling a serious economic problem. There are several reasons beyond just recent weak growth for lower yields, including: demographics, waning Treasury issuance thanks to the dramatic improvement in the budget deficit, central bank policies around the world, deflationary impulses from Europe, China, and Japan, and geopolitical risks. There is clearly a global search for yield as we’ve seen high yield bonds also rise in price; while demand for sovereign debt, even in some of the countries that were recently on the precipice of default, has resulted in record low yields around the globe. We urge investors to be especially mindful of the risk associated with the search for yield. Low yields can be frustrating, but capital losses due to taking on more risk than appropriate can cause real damage to financial plans.

Ned Davis Research’s Ned Davis, meanwhile, reminds investors that not only is the S&P 500–it’s trading at a price-to-sales ratio of 1.66, above the 1.26 times that separated expensive from fair value– but that expensive markets have a way of underperforming over long periods of time. He explains:

Dan Sullivan, the respected "chartist" says, "We learned a long time ago that over-valued markets can and often do become even more overvalued. Some of our best gains have come over periods in which majority opinion has felt the market was overvalued." I have to agree that valuations, even at extreme levels, don't tell one very much about the short-term outlook. But I do think they can tell us a lot when looking out, say, five years…

…there have been 52 quarters of "high valuations" since 1954, and five years after these 52 quarters, the market was higher 22 times and lower 30 times with a median loss of -2.5%. Compare that to the 75 quarters that the market has been undervalued since 1954. Of the 75 readings, 74 of them saw the S&P 500 higher five years later, with a median gain of 65%.

Just a reminder, then, as the market continues to grind its way higher: Not even super investors have the ability to go back in time.

Saturday, May 24, 2014

Time Magazine Cover Ad a Harbinger of Journalism Shift

In a culture where print ads show up on everything from eggs to pediatrician exam tables and video ad screens are in elevators and in the back seat of cabs, it's no surprise that Time Warner (NYSE: TWX ) has permitted advertising on the front cover of its flagship publication, Time. Small, one-line ads for Verizon (NYSE: VZ ) appear on the bottom of the address label in a tiny grayed-out strip on Time this week for the first time and are scheduled to debut on the cover of Sports Illustrated soon.

According to the Pew Research State of the News Media 2014, news magazines account for only half of one percent of the total $63.6 billion news revenue market (chart below). More than half of news revenue – 63.2% – is generated by newspapers, which began ad placements on the front page on a wide scale beginning in the early 1990s.

Obviously this is not lost on Time, which is seeking to get in on this revenue stream. With revenue down by over half in the last decade, newspapers certainly adopted a front-page ad strategy to survive. Time posted flat revenues of $390 million in the first quarter and has the fight all print mediums face with growing online news competition. In contrast Google (NASDAQ: GOOG ) – not classified as a news organization in the Pew study – offers news coverage and the platform that leads the way to many online news sites. Google dwarfs Time with $15.4 billion in first quarter gross revenue.

Curation challenges traditional journalism model

While the obvious reason for Time's decision would seem to be money, there is a much bigger story here.

The move signals yet another indication of the decline in the traditional independent journalism model. In an article titled "Why Curation Will Replace Mainstream Media," Cooper McGoodin, a public relations executive, writes: "Mainstream reporters mistakenly believe they are producing original and superior content, but increasingly they are merely curating ideas and sentiments that originate in the blogosphere."

The Macmillan online dictionary defines news curation as "the process of analyzing and sorting Web content and presenting it in a meaningful and organized way around a specific theme." There are a growing number of apps and other tools for curation. New York Times (NYSE: NYT ) just had a nearly 100-page internal memo recently leaked to Internet sites that speaks extensively to the rising function of curation within news and journalism. The NYT memo states, "We can be both a daily newsletter and a library – offering news every day, as well as providing context, relevance and timeless works of journalism."

Journalists are under tremendous pressure to change with the times. For the first time the Pew study measured the number of full-time journalists at nearly 500 digital news outlets at 5,000. While the study says the vast amount of "original reporting" is still conducted by newspapers, the number of print journalism jobs declined by 6.4% in 2012 with another decline expected in 2013.

Gannett (NYSE: GCI ) and the Tribune Co. (NASDAQOTH: TRBAA ) , two companies that publish daily newspapers, have announced combined layoffs of 1,000 positions (not all in the newsroom). News magazines are feeling the same pinch. According to a recent Gallup poll, only 9% of adults get their news from print sources, with news magazines scoring the lowest. The Pew news study as early as 2010 listed online news as the primary source for 39% of adults. One of Time's biggest competitors, Newsweek, ended its paper publication in early 2013 in favor of an online edition only.

Ultimately, readers will decide

Change fostered by technology and economics always invites cultural shift. With two-thirds of total news revenue generated by advertising (Pew), Time's decision to open up the front page is predictable

The Verizon ad placements on the covers of Time and Sports Illustrated are tiny, just a toe-dip in the water at this point. But if the advertisers deem the cover expense successful and the ads don't put off subscribers, the news magazine cover ads are no doubt here to stay. Other news magazine titles will follow suit and the ads will no doubt get bigger. To what extent?

"No one wants to annoy the consumer," Bill Bean, director of trade insight at SAB Miller (NASDAQOTH: SBMRY ) , told the New York Times. "However, there are many annoying ads that sell products, and it's very difficult to tell what annoys one consumer and what pleases another."

Protecting 'The fourth estate'

The big picture question is, will the move to place ads on the cover of news magazines diminish public confidence in the mainstream news media?

According to a recent Gallup Poll, this confidence level hit an all-time low in 2012 and has just started to recover in 2013. The news media's success to act as the "fourth estate" – the watchdog over the Executive, Judicial and Legislative Branches of our democratic system of government – relies on its ability to act freely and independently.

If this can continue to be accomplished with a few cover ads, then the tradeoff is worth it. After all, no one thinks twice about an ad on the homepage of an online news site. However, what remains to be seen is, will Time and other news magazines (and sites) wear their journalism hat or their advertising hat when the day invariably comes there is negative news about a cover advertiser?

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Friday, May 23, 2014

Schwab Founder: Indexing Is Not Passive

Charles Schwab, founder of the investment firm bearing his name, decried the bad rap index funds get as “passive” investments, arguing that the commonly used nomenclature fails to capture the dynamic nature of the investment strategy.

In a media call Thursday that was unusual for the chairman’s personal participation, Schwab emphasized that “nobody wants to be passive; indexing is not passive — much more goes into indexing than watching a stock become the next buggy whip.”

Further disavowing the notion that indexing is compatible with outmoded corporations, he added that “20 years ago we didn’t have Facebook; today they’re in the index because of the innovation of the American economy.”

Indeed, the Silicon Valley-based social media giant entered the Schwab 1000 index in 2013, the same year that Molycorp — as stock whose valued had declined 80% — lost its eligibility to remain in the firm’s index of the thousand largest U.S. companies in terms of market cap.

That point was one of many made in a whitepaper whose release was timed for Schwab’s media appearance.

Titled The Wealth-Building Power of Equities and the Elegance of Indexing, the new whitepaper serves as a primer on the principles of indexing that Schwab said was self-consciously written with the average investor in mind, breaking no new ground on the subject, but explaining indexing in terms the Schwab Corp. chairman hoped would “help the average investor understand this magic, what it is really about.”

To that end, the paper starts with the basic point that investing in stock, as opposed to bonds or cash, uniquely provides growth — a benefit that ordinary investors have difficulty accessing because of the challenge of choosing and sticking with appropriate investments.

Those challenges include identifying skilled managers and the risk that even good actively managed funds cannot overcome the burden of high costs and portfolio turnover-induced taxation.

But a recurring theme in both the paper and the call was indexing’s image problem.

As Schwab writes in a letter introducing the whitepaper, “the word passive does a disservice to investors considering their options. Indexing provides an effective means of owning the market and allows investors to participate in the returns of a basket of stocks. The basket of stocks changes over time as stocks are added or removed based on its rules.”

And on the call, Schwab put it this way:

“There’s a reputation that index funds are static. That’s not really true. In the case of the Schwab 1000 index, about 5% of the index is changed every year. It does change over time. And the outcomes have been every bit as good as some of the active funds, particularly on an after-costs and after-tax basis.”

Indeed, the Schwab 1000 Index, which Schwab launched in April 1991, has enjoyed compounded growth of more than 700% through the end of last year, for an annualized return of 9.8% (or 9.4% in the Schwab 1000 Index Fund, which tracks the index).

Those returns were achieved through a rules-based methodology determining annually when securities were to be added or deleted and how securities were to be weighted — as well as the fund’s very low 0.30% annual management fees.

Together with tax-loss harvesting that reduces taxable distributions and relatively low turnover rates compared with active funds, an investor not able or not interested in selecting investments would have seen a $1,000 investment in 1991 turn to over $7,000 through this dynamic process, in which fund owners are essentially “making the market their manager.”

The bottom line, as the whitepaper adds, is that “index funds have done well on both an absolute and a relative basis: on an absolute basis over the long term because equity markets have grown over time, and on a relative basis because of their lower cost structures.”

While indexing thus generates returns consistently superior to those of active managers, who only rarely repeat top performance according to studies the paper cites, indexing shows signs of actually improving through an evolution of the strategy known variously as “smart beta” or “fundamental indexing.”

Fundamentally weighted indexes screen and weight stocks based on factors such as price-to-sales, buybacks and other economic factors rather than weighting a portfolio based on stock-market capitalization, which critics say biases a portfolio to popular, expensive stocks.

Speaking on the call, Schwab praised this new type of indexing:

“I think they’ll be superior. For new money going in, I think fundamental investing is certainly a preferred way to go,” noting however that he wouldn’t sell his own money long invested in a market-cap-weighted index to avoid generating capital gains on the sale.

One potential advantage of the smart beta approach is that it “prevents extraordinary things — like when one or two companies dominate market,” Schwab said.

He illustrated the point by citing Apple, which rose to the top spot in the Russell 1000 index but didn’t even make the top 10 in a fundamentally weighed version of that portfolio, thus advantaging investors when Apple’s stock crashed (though hurting those same investors when Apple’s stock surged).

So why was the chairman on a media call explaining the advantages of indexing?

“People are coming back in market in 2014,” he said, noting the long hiatus retail investors have taken since the financial crisis.

And while they’re shopping for investments, the Schwab chairman wanted investors to understand that indexing — of whatever type — is a dynamic approach they can embrace.

“All index funds have proven themselves,” he said.

---

Check out these related stories on ThinkAdvisor:

Thursday, May 22, 2014

Sell Twitter to Facebook Before It's Too Late

NEW YORK (TheStreet) -- Over at HuffPo, former Monster Worldwide (MWW) President and COO Jim Treacy makes a solid case for a Facebook (FB) buyout of Twitter (TWTR). Here's the part that resonates most with me: It's not hard to imagine Twitter and Vine (Twitter's globally popular six-second video-clip property) fitting in and thriving as part of the social media pantheon Facebook has assembled. It's equally easy to see how Facebook could benefit from the additions: · Introduce Twitter and Vine to all the Facebook, Instagram and WhatsApp users. · Platform leverage and operational synergies galore to exploit (sales and technology, in particular).

I've been riffing that very same line from as far back as November 2012 and as recently as last month.

There's no need to repeat too much of what I've already written. It's on the record at the links. However, something else Treacy wrote in his column requires an extension of thought. Treacy astutely points out: Shopping Twitter would likely bring immediate and sizeable reward to its' shareholders. Would Facebook or Google pass up a chance to bid on such a well-positioned, strategic asset? Don't think so ...

Stop there ... because you had me at would likely bring immediate and sizeable (or is it sizable!?) reward to its shareholders. Isn't that Twitter CEO Dick Costolo's job after all? To maximize returns for shareholders? I'm not saying Costolo shouldn't focus on building a great company ... an effort that sometimes takes place at the short-term expense of investors (see, e.g., Amazon.com (AMZN)). But Twitter isn't Amazon. The opportunity in front of Twitter isn't near as large the one Amazon has seized and continues to seize, particularly if Twitter stays independent. So, within the context of his company's situation, Costolo does a disservice to TWTR investors by basically trying to show the world how smart he is. The dude's attempting and failing to fight his way out of a steel-reinforced paper bag. Again, I color the preceding statements at the links laid earlier in this article. But at this point, Costolo's on the verge of shafting shareholders, if he hasn't already. Either sell this thing to Facebook, step aside and let the team over there maximize the obvious (annoying buzzword alert >>) synergies or take Twitter the 501c3 route. Adopt the Wikipedia model. If one of the above options don't take place, we'll all suffer. Because Twitter absolutely is an excellent platform for so many uses. It would suck to see it go or to watch Costolo ruin it as he attempts to accomplish the next to impossible. Follow @mynameisrocco --Written by Rocco Pendola in Santa Monica, Calif. >>Read More: Don't Even Think About Selling Facebook Facebook's Publicis Deal Cements Near-Term Strategy 5 Undervalued Companies For Enterprising Investors

Wednesday, May 21, 2014

3 e-Commerce Stocks to Sell Now

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The overall ratings of three e-commerce stocks are down on Portfolio Grader this week. Each of these rates a “D” (“sell”) or “F” overall (“strong sell”).

1-800-FLOWERS.COM, Inc. Class A’s () rating falls to a D (“sell”) this week, down from C (“hold”) the week prior. 1-800-Flowers.com provides customers around the world with the freshest flowers and finest selection of plants, gift baskets, gourmet foods and confections, and plush stuffed animals perfect for every occasion. The stock currently has a trailing PE Ratio of 36.90. .

Amazon.com, Inc. () is having a tough week. The company’s rating falls from a C to a D. Amazon.com is an online retailer that offers a wide range of products. The stock gets F’s in Earnings Revisions and Earnings Surprise. The stock has a trailing PE Ratio of 468.90. .

PetMed Express, Inc. () experiences a ratings drop this week, going from last week’s C to a D. PetMed Express offers prescription and nonprecription pet medications, as well as health and nutritional supplements. As of May 20, 2014, 20.5% of outstanding PetMed Express, Inc. shares were held short. Shares of the stock have been trading at an exceptionally rapid pace, up twofold from the week prior. .

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

Monday, May 19, 2014

Campbell Soup shares plunge on lower outlook

Umm, umm, not so good. Campbell Soup reported a quarterly earnings improvement, lower costs and a slight rise in revenue.

Sorry, not enough "upside surprise" on the revenue, Wall Street said, and the food company's shares lost 2.4% to $44.06 in trading Monday.

Fueling the sour reaction, even though the company's fiscal third quarter earnings beat Wall Street forecasts, was an negative assessment from CEO Denise Morrison in a statement. She said the company's performance should have been stronger.

"Although I am encouraged by our 7% sales increase in U.S. Simple Meals, I am disappointed that our plans did not drive stronger sales results in U.S. Soup," she said. Morrison noted that the year-ago quarter was a tough comparison because the soup unit was up 14% a year ago.

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In the quarter that ended April 27, Campbell Soup said it earned $184 million, which was 58 cents per share. A year ago it reported earnings of $181 million, or 57 cents per share.

Setting aside extraordinary items -- mainly a pension settlement -- Campbell reported earnings from ongoing operations of 62 cents a share, beating Wall Street expectations that were about three cents lower.

Campbell said it cut costs in the quarter to $1.68 billion, from $1.71 billion a year ago.

Revenue rose 1% to $1.97 billion. The Street had forecast $2 billion.

Sunday, May 18, 2014

Microsoft Touches Sky with the iPad Suite

The first quarter for the current fiscal saw Microsoft (MSFT) something people had long waited for. The company launched its flagship productivity application - Office for Apple's iPad - on March 27 as part of its mobile first strategy. This seemed a perfect combination- best Saas application suite on the best tablet. The Office version for iPads, the iPad suite, reportedly hit has hit the 27 million download mark. This was popular with Wall Street and more importantly with consumers, who performed 27 million downloads in a matter of weeks. This number is more than twice the figure the company shared over a month ago. The hotly-anticipated group of apps rocketed to the top of Apple's iOS App Store charts one day after launch and held their high ranking positions for some time. As of this writing, Word is still the fourth most-downloaded free iPad app, while Excel and PowerPoint have dropped to number 22 and 26 in the rankings, respectively. Microsoft has been using the same "freemium" model with Office for iPad. However, to get the full editing and creation experience, users will have to subscribe to Office 365 by paying a monthly or yearly fee.

Performance Of The Office Market:

The Office productivity suite is Microsoft's biggest revenue driver and makes up 40% of its estimated value. According to estimated calculations, this segment generated approximately $24 billion in revenue in calendar 2013 and is expected to grow to $30 billion by 2020. Furthermore, this division has the highest profit margins (65%) for Microsoft primarily due to a dominant 93% market share in the productivity suite market. However, Google, with its Google Docs offering, is chipping away at this market share, especially in the iPad segment. Microsoft Office has a sticky user base that is reluctant to shift to other productivity platforms. As a result, since its launch on iPad, Office has been downloaded by 27 million times. Apple is taking the usual 30% cut of all subscription sign-ups, as is the company's policy for all in-app purchases. Office 365 subscriptions cost $99 per year or $9.99 per month.

However, the firm is struggling with hardware, and has just 3 percent of the global market share in smartphones.

Given that tiny market, some investors believe Microsoft should not waste time and money on the low-margin hardware business.

ValueAct Capital, which led the shareholder revolt last year which culminated in previous CEO Steve Ballmer's retirement, has lobbied against Microsoft's hardware effort, including its costly acquisition of Nokia's handset business. In recent quarters, much of the growth in Office revenues has been due to the growth in Office 365, which has an annual revenue run rate of over $2.5 billion.

To Conclude:

With the Office business going strong, the tech-giant is expected to increase the return on investment pretty soon. The best thing that could have bolstered the revenues or MSFT was definitely the iPad suite which the company successfully went ahead with. With this, I'd like to encourage the investors to buy the MSFT stock.

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Friday, May 16, 2014

These 2 Travel Stocks Have Blue Skies Ahead

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We saw some decent economic numbers last week; it looks like things are thawing out after the long harsh winter. We also got another sign of improvement from two leading stocks last week — and they're both travel stocks.

The ultimate discretionary experience is travel. If you are feeling uncomfortable about your financial condition, it is highly unlikely you will pack up the family and head to the beach or a Disney (DIS) resort. Businesses that are watching costs and pinching pennies are going to rely on video conferencing and phone calls rather than flying to an onsite meeting with potential and existing customers.

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Bottom line: When travel is picking up, things are getting better. Last week two travel-related companies reported solid results that may indicate the economy is getting better faster than we thought.

TripAdvisor (TRIP), which calls itself "the world's largest travel website," reported an excellent quarter last week. TripAdvisor reported total revenue of $281 million, up 32% quarter over quarter and 22% year over year. Net income of $68 million, or $0.47 per diluted share, was up 240% sequentially and 10% over the year-ago period. TRIP missed the analysts' estimates by about 1% but TripAdvisor raised guidance for the rest of the year — and that has Wall Street excited about the travel stock right now.

CFO Julie Brantley told investors on the earnings call, "With all the positive trends that we have seen year-to-date, we are increasing our full-year revenue growth outlook from mid-20s to high 20s to low 30s." That's the type of revenue growth that demands attention — and responded this week by raising the travel stock to a "B" ranking. Shares of TripAdvisor are a “buy” at the current price.

Priceline (PCLN) is best known for its "name your price" policy and fantastic advertising campaigns featuring folks like William Shatner — but investors know this travel stock can book solid returns, too. On Friday Priceline reported that first-quarter gross travel bookings of all travel services purchased by its customers came in at $12.3 billion, an increase of 34% over a year ago. Net income was $7.81 per diluted share, a little better than the analysts expected.

Priceline executives expect the good times to continue, projecting a year-over-year increase in total gross travel bookings and net income per share for the current quarter. Priceline has been either a "buy" or "strong buy" since August according to our . The travel stock is ranked "B" by Portfolio Grader and remains a "buy" at the current price.

Even with the tough weather conditions in the first quarter, travel was picking up — and that trend should accelerate as we get into the traditional summer travel season. Both of these travel stocks are well positioned to benefit from the pickup.

Louis Navellier is the editor of Blue Chip Growth.

Thursday, May 15, 2014

Deutsche Bank sells Vegas casino for $1.73B

LAS VEGAS (AP) — Deutsche Bank is cutting itself free of The Cosmopolitan of Las Vegas resort and casino, saying it's selling the swanky but unprofitable high-rise complex on the Strip to Blackstone Real Estate Partners VII for $1.73 billion.

The German investment bank said in a statement Thursday that the cash deal remains subject to regulatory approvals. The bank had intended to sell the property from before it even opened in 2010 and had placed The Cosmopolitan in a separate bank division devoted to winding down or selling unwanted investments.

Blackstone, which owns $81 billion in real estate assets globally and describes itself as the largest opportunistic real estate investment manager in the world, is in the business of buying underperforming property and re-selling it after making improvements. It owns nearly 1,000 homes in Nevada and the upscale Hughes Center office complex in Las Vegas, as well as a small portion of casino company Caesars Entertainment.

"Blackstone recognizes the value and potential in the Cosmopolitan and Las Vegas, and looks forward to working to build on the success to date," Tyler Henritze, the company's senior managing director, said in a statement.

The last major Las Vegas resort approved before the Great Recession, the $3.9 billion Cosmopolitan, was built by Deutsche Bank after its original developer defaulted on a loan. Initially conceived as a condo complex, it retains large rooms and kitchenettes even though the project morphed into a hotel after the housing market crashed.

The Cosmopolitan has branded itself as a "decidedly different" kind of casino, eschewing the kitschy themes common among its competitors and catering to a more urbane kind of gambler and club-goer with the tagline "just the right amount of wrong."

The casino is home to Marquee, one of the top-grossing nightclubs in the United States, and features a three-story bar enveloped by a giant chandelier.

But its emphasis on entertainment and celebrity-chef-run re! staurants over gambling, and a smaller database of regular gamblers than its casino chain competitors, hit the resort's bottom line.

"Optimally you want to use the food and beverage as a driver for gambling," said David G. Schwartz, director of the Center for Gaming Research at the University of Nevada, Las Vegas. "They've definitely struggled to establish an identity as a gaming destination on the Strip."

While gambling revenues citywide remain lackluster, tourism overall is on the rebound and hotel rooms are commanding higher rates. In March, the city's average daily room rate rose 21 percent from a year earlier, according to tourism officials.

"Hotels are hot again across the board," said Leo Leyva, an attorney who advises private equity firms on acquisitions and who wasn't involved in the Blackstone deal. "Deutsche was strong enough not to just dump it in the worst market. They've waited for the market to move. Hotels are now an investment that's rising."

Officials at the resort said they were "genuinely excited" to hear about the sale.

"This marks the beginning of the next chapter for The Cosmopolitan of Las Vegas and the thousands of dedicated CoStars who are committed to providing a compelling guest experience," CEO John Unwin said. "It is a testament to our unique approach to the Las Vegas market."

Associated Press writer David McHugh in London contributed to this report.

Wednesday, May 14, 2014

MGM Resorts Performing Better Than Its Peers

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The gambling industry has been growing over the last few years, especially in Macau since it is the only region in China where gambling is legal. In fact, according to the Gaming Inspection and Coordination Bureau, Macau, revenue from this region has grown 20% in the first quarter of 2014. This increase has benefited most of the gambling companies, including MGM Resorts (MGM) and Wynn Resorts (WYNN).

MGM Resorts posted its first quarter numbers which beat analysts' expectations, sending its share price north as it benefited from growing revenue from Macau as well as from the domestic region.

By the Numbers

Revenue jumped 12% to $2.6 billion, over last year's quarter, as revenue from both the Macau region and the Las Vegas region surged. Macau has been one of the growing places for gambling and MGM witnessed an increase of 26% in its revenue from China.

Las Vegas is doing well with room revenue moving north, resulting in a 2% growth. Also, occupancy in Las Vegas grew well, clocking in at 92% from 90% earlier. Sales of food and beverage surged 6% over last year, as new retail outlets and more of conventions and banquet business drove revenue higher.

Total casino revenue climbed 13% over the prior year as people spent more on gambling during the holiday season. Moreover, MGM Resorts' domestic operations are also showing signs of improvement since consumer spending in the U.S. has increased. In fact, consumer spending in the U.S. inched up by 0.9% in March, much higher than 0.3% in February. This shows that people are willing to open their wallets and spend their hard earned dollars.

Earnings for the quarter also rose to $0.21 from $0.01 per share in the previous year. The surge in bottom line highlights the company's efficient cost management techniques. Also, its costs related to food and beverages as well as the hotel rooms decreased over the prior year's quarter.

Other Players

However, it is not only MGM Resorts that is witnessing growing revenue from the Macau region, but also other players such as Wynn Resorts. Wynn Resorts' top line surged 9.8% over last year, clocking in at $1.5 billion. This growth was helped by a 14.2% surge in revenue from the Macau region. However, Wynn experienced a decline of 1.5% in its Las Vegas operations. This is in contrast to that of MGM, which witnessed growing sales in the region. Wynn Resorts' bottom line jumped to $2.22 per share as compared to $2.00 per share, last year. Hence, MGM Resorts has been able to outperform its peers with better performance.

Bright Future Ahead

Also, the casino chain operator plans to open an indoor arena in 2016 in the Las Vegas strip. This arena will have a capacity of 20,000 and will host award shows and sports events such as boxing.

Also, MGM is in the process of having another resort in the New Cotai region in China since it has been experiencing great demand in this region. However, a slowdown in China might hamper the retailer's top line.

Conclusive Thoughts

MGM Resorts has been doing very well with growing top line and bottom line. Also, the company has been able to perform better than its peers. Moreover, the casino operator's plans to grow make the company even more attractive. Hence, MGM Resorts should be given a thought.

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Tuesday, May 13, 2014

Millennial-minded Pivot seeks network niche

Nine months after giving birth to Pivot, an entertainment network aimed at inspiring Gen Y viewers to push for social change, network president Evan Shapiro is one happy programmer.

While Pivot (like Netflix) is not rated, Shapiro says viewership is ahead of projections and advertisers and cable companies are clamoring to get Pivot's research findings on the coveted demographic every network wants.

The network, which targets millennials, those ages 18-35, launched last August with a slate of series, variety shows and documentaries pegged to various social causes. Its parent company Participant Media, founded by former eBay president and social entrepreneur Jeff Skoll, produces films to inspire social change (The Help, An Inconvenient Truth).

Pivot, now available in 44.5 million homes, is charged with doing the same on the television front.

Shapiro, hired in 2012 to develop and launch Pivot, previously ran IFC TV and Sundance Channel as president, steering the two networks toward new business and programming models that netted Primetime Emmy nominations for both. Today, the 47-year-old exec is an expert on television's most desired target audience.

"We call them Gen Why," says Shapiro, sitting in his Beverly Hills office.

"This generation grew up with the Internet and technology, which is full of promise, but everything they do will be a reflection of 9/11 and the chaos that happened afterward. They're highly engaged in social causes."

In other words, if you want your brand to matter to younger consumers, your company has to show how it's making the world a better place, Shapiro says.

Pivot and Nielsen recently released the "Generation Why Segmentation Report," a study of 3,000 adults, ages 18 to 34 that identified distinct segments of Gen Y (available on Tumblr at pivotupstanders.com). Findings showed that the most passionate and engaged Gen Yers were more willing to pay for premium brands, more likely to change brands based on a company's values, watch mo! re TV across all platforms, and expect TV programming to take on important issues.

Shapiro says these consumers are more likely to drop out of the current TV ecosystem because they expect more value for their money. Instead of paying for 100 channels when they only watch eight regularly, this segment is more likely to tune into content they can pick and choose on tablets and smartphones.

Pivot is the first network to offer an app to distributors -- available live and on-demand for multiple digital devices – that companies can sell to existing broadband-only subscribers. To date, no cable companies have bitten. Twenty million DISH and DirecTV subscribers, however, have direct access to the free Pivot app if the network is part of their subscription package.

"We believe a third of all cable subscribers are thinking about doing away with TV," Shapiro says. "That's billions of dollars of revenue coming out of TV subscription fees. We want to help grow pay TV over time, and create long-term sustainability. The industry has to adapt to how programming will be viewed in the future."

The key to drawing Gen Y viewers, he says, is entertainment that sparks conversation and inspires change. Back in 1972, All In the Family was TV's highest rated show, prompting millions to talk about social issues ranging from racism to abortion every week.

"We no longer co-mingle different opinions," Shapiro says. "Fox talks to conservatives. MSNBC talks to liberals. There's a desire for a hearth to discuss communal differences, and entertainment is the key."

One of Pivot's most popular shows is TalkBack Live, a late-night talk show that continues its conversations online through Takepart.com, where viewers can also pledge donations, sign petitions and take other actions on various social causes.

Upcoming offerings include Fortitude, an eco-thriller series set in the Arctic that stars Stanley Tucci, Michael Gambon and Sienna Guillory; the second season of Please Like Me, a coming-of-age ! comedy ab! out family, sexuality and mental health, and Welcome to Fairfax, a docu-series about friends and collaborators living in an urban renewal area of Los Angeles.

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While Shapiro declines to discuss dollars, he says Pivot has inked deals with blue chip national advertisers like Monster.com, Silk and Hyundai to create branded content that airs across all its platforms.

Unlike strictly commercial networks, Pivot's objective is to increase social change, says Shapiro, whose bonuses are based on achieving increases in both revenue and social change. It's a structure that puts the network's money where its mouth is.

"I've spent a good deal of my life working at companies where making change is central," Shapiro says. "Here, it's all about change. Pivot is dedicated to the generation that's going to make the change the world very much needs."

Monday, May 12, 2014

Norwegian Air Returns Broken Dreamliner To Boeing

The Boeing (NYSE: BA) 787 Dreamliner has broken off and on since the aircraft maker began work on the plane over a decade ago. The most well-publicized recent problem involved batteries and caused the 787 to be pulled out of service worldwide. Finally, one of Boeing’s customers has taken significant action. Norwegian Airlines returned a 787s to Boeing to fix them. If other airlines follow, Boeing’s problems with the plane, which it has downplayed with investors, could become a big deal with investors. It is already clear that Boeing’s main competitor Airbus has tried to take advantage of the 787′s trouble.

It would not be surprising if Boeing runs into a mushrooming issue which could trigger a drop in share price.

According to Reuters:

Budget airline Norwegian Air Shuttle is returning one of its brand new Dreamliners to Boeing, demanding repairs after the jet has suffered repeated breakdowns, it said on Saturday.

Norwegian Air Shuttle will instead lease an Airbus A340 from HiFly to keep its long-haul business going and will not take back the Boeing 787 Dreamliner until it is more reliable, a spokesman said.

“The aircraft’s reliability is simply not acceptable, our passengers cannot live with this kind of performance,” spokesman Lasse Sandaker-Nielsen told Reuters.

“We are returning the aircraft to Boeing to improve its reliability.”

Based on Boeing’s luck with the 787, it may find more problems that it can fix.

Built to save airlines fuel costs, particularly on long haul flights, and to give passengers a better flying experience, the 787 has turned out to be a lemon

Sunday, May 11, 2014

Stratasys: This 3D Printing Stock Can Be A Good Long-Term Buy

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The stock of 3D printing company Stratasys (SSYS) has been dipping. The shares went down around 20% and the recent announcement by Hewlett-Packard (HPQ) to enter the 3D printing market has shaken investors' confidence in Stratasys. However, since Stratasys' concentrates more on the industrial 3D printing segment worldwide, its market looks lucrative due to big industrial corporations that make use of its services and products.

Looking ahead

Stratasys is engaged in expanding its business worldwide. Hence, it's strategically investing heavily in R&D, sales, and marketing to explore more business opportunities. Besides, the company has observed significant expansion in the market for 3D printing and additive manufacturing solutions globally. The reason behind Stratasys' strong organic revenue growth can be attributed to strong broad-based demand across its entire product line, including the production series, design series, and the idea series of 3D printers.

Having noticed tremendous improvements in its performance globally, especially in the Asia-Pacific market, Stratasys looks focused to ramp up its sales and invest further in marketing that will help the company post better results in the ongoing quarter. Also, the company looks solid as it has strengthened its position in the market by improving functionality and affordability of its products. Moreover, Stratasys is focusing on its digital manufacturing business with many new products in the pipeline. Lastly, Stratasys is looking to improve the accessibility of 3D printing so as to increase its addressable market.

Strategic moves

Its new releases like the Objet500 Connex3 Color Multi-material 3D Printer have not only strengthened its product line, but also hopes and expectation in the Multi-Material 3D Printing business that will fetch comprehensively better results for the company in the coming quarters. Stratasys, hence, expects the printer's triple jet technology, which allows users to combine color with a virtually unlimited combination of rigidity, flexibility, and transparency, to attract more users.

In addition, the company is coming up with new apps for the MakerBot replicator platform with unmatched speed, reliability, quality, and connectivity that will certainly increase its market share in the 3D printing business. Moreover, its technology is very user friendly and easy-to-use, and offers reliable desktop 3D printing platforms with its new apps and focuses to cover the full range of consumer, prosumer, and professional users.

Additionally to supplement growth in its product line, it has recently announced new PolyJet material for the Connex platforms, including Digital ABS2, which creates realistic, precise prototypes that are heat-resistant. The company anticipates better results from its new Connex3 Color 3D Printer that is combined with the three new color-enabling materials.

Moreover, its strategy to expand its business overseas in regions such as Singapore, Japan, and China looks lucrative. Also, Stratasys is looking for a solid start with its recently established and fully-owned subsidiary in Korea. In addition, Stratasys has also entered into a distribution agreement with Dell to provide MakerBot Replicator 3D printers bundled with Dell Precision Workstations for small and medium-sized businesses. This will definitely enhance the reach of Stratasys' printers going forward.

Further, it's very interesting to notice that Stratasys is seeing growth opportunities in the dental and medical fields as well, and to tap that market, it has announced the Objet Eden 260V Dental Advantage 3D printer and VeroGlaze dental material for Objet Eden V and OrthoDesk printers.

Overall, the company has performed significantly well and I think it will continue to perform well on the back of strategic investments in R&D investments, expansion plans, and entry into new market segments.

HP's move

But, investors must keep an eye on HP's move into the 3D printing market as it sees strong growth opportunity here. Also, HP's management is of the opinion that worldwide sales of 3D printers and related software and services will grow at a terrific pace to hit $11 billion by 2021. This will be a solid jump from just $2.2 billion two years ago.

Also, according to Reuters, HP CEO Meg Whitman believes that "HP's in-house researchers have resolved limitations involved with the quality of substrates used in the process, which affects the durability of finished products."

Therefore, Stratasys has to accelerate its business and ensure that its 3D printing offerings are cutting edge.

Conclusion

Overall, it can be said that Stratasys has been pretty solid so far and it should continue to perform well due to the various reasons that we saw above. While HP is indeed a threat, until and unless we know the extent of the threat, we shouldn't discard HP. Going forward, growth in industrial 3D printing and Stratasys' end-market growth should lead to a strong performance.

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Thursday, May 8, 2014

Euro drops; Draghi is â€˜comfortableâ€™ easing in June

NEW YORK (MarketWatch) — The euro dropped against the U.S. dollar Thursday after European Central Bank President Mario Draghi said he would be "comfortable" easing monetary policy further in June, if needed.

/quotes/zigman/4867933/realtime/sampled EURUSD 1.3839, -0.0072, -0.5182%

The euro (EURUSD) fell to $1.3851 from $1.3910 late Wednesday, giving up earlier gains. The euro had risen as high as $1.3995 after the European Central Bank held its interest rates steady , as expected.

During the subsequent press conference, Draghi said he would like to see the updated ECB staff projections in June before any decision to ease is made. He said the strengthening of the exchange rate is cause for "serious concern" in the context of low inflation, adding that the interest rate is not a policy target for the central bank. Read live blog recap: Draghi says 'comfortable with acting' in June if needed

Draghi's comments were more "aggressively dovish" than the market had expected, said George Dowd, head of Chicago foreign exchange for Newedge. While the market is likely to price in further easing next month, the type of easing remains uncertain. ECB officials have said they stand ready to pursue unconventional measures, such as quantitative easing or a negative deposit rate, in order to fight low inflation.

The ECB currently aims for inflation of just under 2% in the medium term as it sets monetary policy. "The targeting of negative interest rates is really a targeting of the exchange rates," said Sebastien Galy, senior foreign-exchange strategist at Societe Generale. "In a sense, if it goes for negative interest rates, it's almost as if the ECB implicitly adopts a dual mandate," he added.

AFP/Getty Images

Enlarge Image ECB President Mario Draghi's comments pushed the euro lower.

The euro on Thursday was at its lowest level against the dollar since April 29, according to FactSet.

The increased likelihood of further easing from the ECB next month comes as the Federal Reserve continues to reduce its stimulative bond purchases, which are on track to draw to a close by year end. Fed Chairwoman Janet Yellen on Thursday finished her two-day testimony to Congress about the economic outlook, in which she refused to give a timeline for when the Fed could begin to hike rates. Higher rates should make U.S. assets more attractive. Read: 3 of the most important things Yellen said Thursday

The ICE dollar index (DXY) , which measures the dollar's strength against six other currencies, rose to 79.433 from 79.238 late Wednesday. The WSJ Dollar Index (XX:BUXX) , an alternate gauge of dollar strength, was at 72.56 versus 72.54.

In the U.S., weekly jobless claims posted a bigger-than-expected drop to a seasonally adjusted 319,000.

Elsewhere in the market, the British pound (GBPUSD) fell to $1.6932 from $1.6955 late Wednesday. The Bank of England left rates on hold and made no change to the size of its bond-buying program, meeting expectations.

The dollar (USDJPY) fell to 101.57 Japanese yen from ¥101.90 late Wednesday. The Australian dollar (AUDUSD) rose to 93.73 U.S. cents from 93.28 U.S. cents.

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FXCM profit down 70% as trading revenue falls

Tuesday, May 6, 2014

5 Best Heal Care Stocks To Invest In 2015

Congress' budget deal tries to thwart the federal phaseout of inefficient light bulbs and to expand financing of coal-fired power plants abroad.

The $1.1 trillion spending bill, which covers all federal agencies and is expected to pass the House and Senate this week, bars the Department of Energy from spending money to enforce federal rules that set tougher efficiency standards for light bulbs. Such a measure has been attached to prior budget deals as well.

The ban takes aim at a bipartisan 2007 law, signed by President Bush, that phases out the most commonly used Thomas Edison incandescents, which waste 90% of their energy as heat rather than light.

This phaseout -- begun in January 2012 with the 100-watt, followed by the 75-watt last year and the 60-watt and 40-watt this month -- has angered many Americans who dislike newer bulbs partly because of their higher up-front costs. House Republicans have tried but failed to stop the phaseout so they've focused instead on de-funding its enforcement.

5 Best Heal Care Stocks To Invest In 2015: Liberty Property Trust (LRY)

Liberty Property Trust is a publicly owned real estate investment holding trust. Through its subsidiary, it provides leasing, property management, development, acquisition, and other tenant-related services for a portfolio of industrial and office properties. The firm invests in industrial properties including various warehouse, distribution, service, assembly, light manufacturing, and research and development facilities. Its office properties include multi-story and single-story office buildings located principally in suburban mixed-use developments or office parks. Liberty Property Trust was founded in 1972 and is based in Malvern, Pennsylvania.

Advisors' Opinion:

[By Brad Thomas]
Other REITs mentioned: (O), (NNN), (STAG), (DCT), (EGP), (PDM), (DRE), (LRY)
Source: Chambers Street: More Liquidity Magic On The Way In REIT-Dom
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. (More...)

5 Best Heal Care Stocks To Invest In 2015: Breeze-Eastern Corporation (BZC)

Breeze-Eastern Corporation designs, develops, manufactures, sells, and services engineered mission equipment for specialty aerospace and defense applications. It primarily offers mission-critical helicopter rescue hoist and cargo hook systems; hydraulic and electric aircraft cargo winch systems; cargo and aircraft tie-downs; and hoists for aircraft and weapons systems. The company also manufactures cargo and aircraft tie-downs; weapons handling systems, including weapons handling equipment for land-based rocket launchers, and munitions hoists for loading missiles and other loads using electric power or exchangeable battery packs; and actuators and specialty gearboxes for specialty weapons applications. In addition, it provides overhaul, repair, maintenance, and engineering services for various products. The company sells its products through internal marketing representatives, and independent sales representatives and distributors in the United States; and exports its prod ucts internationally. Breeze-Eastern Corporation was founded in 1962 and is headquartered in Whippany, New Jersey.

Advisors' Opinion:

[By Rich Smith]
Returning groggy from a holiday weekend (which was, after all, held in its honor), the Department of Defense was slow out of the gate on Tuesday, awarding a bare half-dozen contracts worth no more than $137 million in total. Those going to publicly traded firms included:

Top Construction Companies To Watch For 2015: Midway Gold Corporation(MDW)

Midway Gold Corp., an exploration stage company, engages in the acquisition, exploration, and development of mineral properties in North America. Its principal properties include the Spring Valley, Midway, Pan, and Gold Rock gold and silver mineral properties located in Nevada; and the Golden Eagle gold mineral property located in Washington. The company was formerly known as Red Emerald Resource Corp. and changed its name to Midway Gold Corp. in July 2002. Midway Gold Corp. was founded in 1996 and is headquartered in Englewood, Colorado.

Advisors' Opinion:

[By Lisa Levin]
Midway Gold (NYSE: MDW) shares fell 3.90% to reach a new 52-week low of $0.74. Midway Gold's trailing-twelve-month ROA is -11.16%.

Posted-In: 52-Week LowsNews Movers & Shakers Intraday Update Markets

5 Best Heal Care Stocks To Invest In 2015: Inphi Corporation (IPHI)

Inphi Corporation provides high-speed analog and mixed signal semiconductor solutions for the communications, datacenter, and computing markets worldwide. Its analog and mixed signal semiconductor solutions offer high signal integrity at data speeds while reducing system power consumption. The company�s semiconductor solutions are designed to address bandwidth bottlenecks in networks, maximize throughput and minimize latency in computing environments, and enable the rollout of next generation communications, datacenter, and computing infrastructures. Its solutions provide a high-speed interface between analog signals and digital information in high-performance systems, such as telecommunications transport systems, enterprise networking equipment, datacenters and enterprise servers, storage platforms, test and measurement equipment, and military systems. The company also provides 40G and 100G high-speed analog semiconductor solutions for the communications market and high- speed memory interface solutions for the computing market. Its products include amplifiers and modulator drivers, clock and data recovery, isolation memory buffer, register, and SerDes products that perform a range of functions, such as amplifying, encoding, multiplexing, demultiplexing, retiming, and buffering data and clock signals at speeds up to 100 Gbps. Inphi Corporation sells its products directly through its sales force, as well as through a network of sales representatives and distributors to original equipment manufacturers. The company was formerly known as TCom Communications, Inc. and changed its name to Inphi Corporation in February 2001. Inphi Corporation was founded in 2000 and is headquartered in Santa Clara, California.

Advisors' Opinion:

[By Roberto Pedone]
Inphi (IPHI) provides high-speed analog and mixed signal semiconductor solutions for the communications, datacenter and computing markets. This stock closed up 4.7% at $13.25 in Monday's trading session.

Monday's Volume: 838,000

Three-Month Average Volume: 202,080

Volume % Change: 378%

From a technical perspective, IPHI jumped higher here right above some near-term support at $12.44 with heavy upside volume. This stock has been uptrending strong for the last five months, with shares soaring higher from its low of $8.62 to its intraday high of $13.85. During that uptrend, shares of IPHI have been consistently making higher lows and higher highs, which is bullish technical price action. That move briefly pushed shares of IPHI into breakout territory, since the stock flirted with some near-term overhead resistance at $13.50.

Traders should now look for long-biased trades in IPHI as long as it's trending above some near-term support at $12.44 and then once it sustains a move or close above its new 52-week high at $13.85 with volume that hits near or above 202,080 shares. If we get that move soon, then IPHI will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are its next major overhead resistance levels at $14.79 to $16.94, or possibly even $18.

5 Best Heal Care Stocks To Invest In 2015: Toll Brothers Inc.(TOL)

Toll Brothers, Inc., together with its subsidiaries, designs, builds, markets, and arranges finance for single-family detached and attached homes in luxury residential communities. It is also involved in building or converting existing rental apartment buildings into high-, mid-, and low-rise luxury homes. In addition, the company develops, owns, and operates golf courses and country clubs associated with various planned communities, as well as individual communities. It serves move-up, empty-nester, active-adult, age-qualified, and second-home buyers in 19 states in the United States. Toll Brothers, Inc. was founded in 1967 and is headquartered in Horsham, Pennsylvania.

Advisors' Opinion:

[By Ben Levisohn]
Their favorites in the sector include Lennar (LEN), which had its price target cut to $36 from $41, KB Home (KBH), which had its target cut to $20 from $25, and PulteGroup (PHM), which had its target cut to $20 from $26. Toll Brothers (TOL)’s target got the biggest haircut, from $41 to $29.
[By John Maxfield]
Shares of homebuilders are trading lower on the news thanks presumably to the sequential price comparison. At the time of writing, D.R. Horton (NYSE: DHI ) is off by 1.15%, PulteGroup (NYSE: PHM ) by 1.55%, Lennar Corp. (NYSE: LEN ) by 3.66%, and Toll Brothers (NYSE: TOL ) by 3.46%. While all of these companies have seen their volumes pick up over the past year, we should know a lot more about the current environment tomorrow, with the release of earnings from D.R. Horton and PutleGroup, the nation's two largest homebuilders.