Wednesday, July 31, 2013

Show Me the Money, Capital Senior Living

Although business headlines still tout earnings numbers, many investors have moved past net earnings as a measure of a company's economic output. That's because earnings are very often less trustworthy than cash flow, since earnings are more open to manipulation based on dubious judgment calls.

Earnings' unreliability is one of the reasons Foolish investors often flip straight past the income statement to check the cash flow statement. In general, by taking a close look at the cash moving in and out of the business, you can better understand whether the last batch of earnings brought money into the company, or merely disguised a cash gusher with a pretty headline.

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

Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. Dollar values in millions. FCF = free cash flow. FY = fiscal year. TTM = trailing 12 months.

Over the past 12 months, Capital Senior Living generated $31.4 million cash while it booked a net loss of $5.3 million. That means it turned 9.9% of its revenue into FCF. That sounds OK.

All cash is not equal
Unfortunately, the cash flow statement isn't immune from nonsense, either. That's why it pays to take a close look at the components of cash flow from operations, to make sure that the cash flows are of high quality. What does that mean? To me, it means they need to be real and replicable in the upcoming quarters, rather than being offset by continual cash outflows that don't appear on the income statement (such as major capital expenditures).

For instance, cash flow based on cash net income and adjustments for non-cash income-statement expenses (like depreciation) is generally favorable. An increase in cash flow based on stiffing your suppliers (by increasing accounts payable for the short term) or shortchanging Uncle Sam on taxes will come back to bite investors later. The same goes for decreasing accounts receivable; this is good to see, but it's ordinary in recessionary times, and you can only increase collections so much. Finally, adding stock-based compensation expense back to cash flows is questionable when a company hands out a lot of equity to employees and uses cash in later periods to buy back those shares.

So how does the cash flow at Capital Senior Living look? Take a peek at the chart below, which flags questionable cash flow sources with a red bar.

Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. Dollar values in millions. TTM = trailing 12 months.

When I say "questionable cash flow sources," I mean items such as changes in taxes payable, tax benefits from stock options, and asset sales, among others. That's not to say that companies booking these as sources of cash flow are weak, or are engaging in any sort of wrongdoing, or that everything that comes up questionable in my graph is automatically bad news. But whenever a company is getting more than, say, 10% of its cash from operations from these dubious sources, investors ought to make sure to refer to the filings and dig in.

With questionable cash flows amounting to only -4.9% of operating cash flow, Capital Senior Living's cash flows look clean. Within the questionable cash flow figure plotted in the TTM period above, stock-based compensation and related tax benefits provided the biggest boost, at 6.4% of cash flow from operations. Overall, the biggest drag on FCF came from capital expenditures, which consumed 27.9% of cash from operations. Capital Senior Living investors may also want to keep an eye on accounts receivable, because the TTM change is 3.4 times greater than the average swing over the past 5 fiscal years.

A Foolish final thought
Most investors don't keep tabs on their companies' cash flow. I think that's a mistake. If you take the time to read past the headlines and crack a filing now and then, you're in a much better position to spot potential trouble early. Better yet, you'll improve your odds of finding the underappreciated home-run stocks that provide the market's best returns.

Is Capital Senior Living the best health care stock for you? Learn how to maximize your investment income and "Secure Your Future With 9 Rock-Solid Dividend Stocks," including one above-average health care logistics company. Click here for instant access to this free report.

We can help you keep tabs on your companies with My Watchlist, our free, personalized stock tracking service.

Add Capital Senior Living to My Watchlist.

Tuesday, July 30, 2013

Charlie Munger's 18 Biases That Cause You to Fool Yourself and Make Bad Decisions

Gary King, WikiMedia Commons 

Almost 20 years ago, Berkshire Hathaway (NYSE: BRK-B  ) vice-chairman Charlie Munger gave a talk called "The psychology of human misjudgment" at Harvard. He's given dozens of talks since, but I don't think any match its wisdom and usefulness.

I recently came found the talk on video. You can listen to the whole thing here, and I highly encourage you to if you have an hour to spare.

For the impatient, the talk discusses about 18 separate biases that cause people to fool themselves make bad decisions. I've summarized them here, along with a few comments from Munger.

1. Under-recognition of the power incentives. "I think I've been in the top 5% of my age cohort all my life in understanding the power of incentives, and all my life I've underestimated it. Never a year passes that I don't get some surprise that pushes my limit a little farther."

2. Simple denial. "If you turn on the television you find the mothers of the most obvious criminals that man could ever diagnose and they all think their sons are innocent. The reality is too painful to bear so you just distort it until it's bearable. We all do it to some extent. It's a common psychological misjudgment that causes terrible problems."

3. Incentive-caused bias. "Both in one's own mind and that in one's trusted advisor ... It causes perfectly terrible behavior. Take sales presentations of brokers of commercial real estate businesses. I'm 70 years old and I've never seen one that I thought was even within hailing distance of objective truth."

4. Bias from consistency and commitment tendency. "The human mind is a lot like the human egg, in that the human egg has a shut-off device. One sperm gets in, and it shuts down so that the next one can't get in. The human mind has a big tendency of the same sort ... According to Max Plank, the really innovative and important new physics was never really accepted by the old guard. Instead, a new guard came along that was less brain-blocked by its previous conclusions. And if Max Plank's crowd had this consistency and commitment tendency that kept their old conclusions intact despite disconfirming evidence, you can imagine what the crowd that you and I are a part of behaves like ... What people are shouting out they are pounding in."

5. Bias from Pavlovian association. "Practically three-quarters of advertising works on pure Pavlov. Just think how pure association works. Take Coca-Cola (NYSE: KO  ) , where we're the largest shareholder. They want to be associated with ever-wonderful images -- heroics, the Olympics, music, you name it. They don't want to be associated with presidents' funerals. The association really works ... at a subconscious level, which makes it very insidious. The Persians really did kill the messenger that brought the bad news. Do you think that is dead?"

6. Bias from reciprocation tendency. "The human mind, on a subconscious level, can be manipulated and you don't know it. I always use the phrase, 'You're like a one-legged man in an ass-kicking contest.' ... A guy named Zimbardo had people at Stanford divide into two pieces: one were the guards and the other were the prisoners. And they started acting out roles as people expected. He had to stop the experiment after about five days. He was getting into human misery and breakdown and pathological behavior ... What you think may change what you do, but perhaps even more important, what you do will change what you think."

7. Bias from over-influence by social proof. "Big-shot businessmen get into these waves of social proof. Do you remember some years ago when one oil company bought a fertilizer company, and every other major oil company practically ran out and bought a fertilizer company? And there was no more damned reason for all these oil companies to buy fertilizer companies, but they didn't know exactly what to do, and if Exxon was doing it, it was good enough for Mobil, and vice versa. I think they're all gone now, but it was a total disaster."

8. Bias from contrast-caused distortions of sensation, perception, and cognition. "In my generation, when women lived at home until they got married, I saw some perfectly terrible marriages made by highly desirable women because they lived in terrible homes. And I've seen some terrible second marriages which were made because they were slight improvements over an even worse first marriage. You think you're immune from these things, and you laugh, and I want to tell you, you aren't."

9. Bias from over-influence by authority. "They don't do this in airplanes, but they've done it in simulators. They have the pilot to do something where an idiot co-pilot would know the plane was going to crash, but the pilot's doing it, and the co-pilot is sitting there, and the pilot is the authority figure. Twenty-five percent of the time, the plane crashes. I mean this is a very powerful psychological tendency."

10. Bias from deprival super-reaction syndrome. "Take the Munger dog, a lovely, harmless dog. The only way to get that dog to bite you is to try and take something out of its mouth after it was already there. If you've tried to do takeaways in labor negotiations, you'll know that the human version of that dog is there in all of us. I have a neighbor, and his next-door neighbor put a little pine tree on it that was about three feet high, and it turned his 180 degree view of the harbor into 179 and three-quarters. Well they had a blood feud like the Hatfields and McCoys. People are really crazy about minor decrements down."

11. Bias from envy and jealousy. "I've heard Warren [Buffett] say a half a dozen times, 'It's not greed that drives the world, but envy.' And you go through the psychology survey courses, and you go to the index: envy, jealousy, in a 1,000-page book -- it's blank! There's some blind spots in academia, but it's an enormously powerful thing."

12. Bias from chemical dependency. "We don't have to talk about that. We've all seen so much of it. But it's interesting how it'll always cause this moral breakdown if there's any need, and it always involves massive denial."

13. Bias from misgambling compulsion. "You have a lottery where you get your number by lot, and then somebody draws a number by lot, it gets lousy play. You have a lottery where people get to pick their number, you get big play. People think if they have committed to it, it has to be good. The minute they've picked it themselves it gets an extra validity. After all, they thought it and they acted on it."

14. Bias from liking distortion. "The tendency to especially like oneself, one's own kind and one's own idea structures, and the tendency to be especially susceptible to being misled by someone liked."

15. Bias from the non-mathematical nature of the human brain. [I'm paraphrasing this one] A boss catches an employee stealing from the cash register. The employee says, "I've never done it before and I'll never do it again." What are the odds that they've never done it before? Very small. But you biasedly ignore that probability because you like them. Munger says: "In the history of the See's Candy Company they always say, 'I never did it before, and I'm never going to do it again.' And we cashier them. It would be evil not to, because terrible behavior spreads."

16. Failure to obtain deserved influence caused by not properly explaining "why?" "We all know people who've flunked, and they try and memorize and they try and spout back. It just doesn't work. The brain doesn't work that way. You've got to array facts on the theory structures answering the question 'Why?' If you don't do that, you just cannot handle the world."

17. Bias from stress-induced mental changes. "[Pavlov] had all these dogs in cages, which had all been conditioned into changed behaviors, and the great Leningrad flood came and it just went right up and the dog's in a cage. And the dog had as much stress as you can imagine a dog ever having. The water receded in time to save some of the dogs, and Pavlov noted that they'd had a total reversal of their conditioned personality. And being the great scientist he was, he spent the rest of his life giving nervous breakdowns to dogs, and he learned a helluva lot that I regard as very interesting."

18. Development and organizational confusion from say-something syndrome. "A honeybee goes out and finds the nectar and he comes back, he does a dance that communicates to the other bees where the nectar is, and they go out and get it. Well some scientist decided to do an experiment. He put the nectar straight up. Way up. Well, in a natural setting, there is no nectar where they're all straight up, and the poor honeybee doesn't have a genetic program that is adequate to handle what he now has to communicate. And you'd think the honeybee would come back to the hive and slip into a corner, but he doesn't. He comes into the hive and does this incoherent dance. All my life I've been dealing with the human equivalent of that honeybee. It's a very important part of human organization so the noise and the reciprocation and so forth of all these people who have what I call say-something syndrome don't really affect the decisions."

Watch the whole video here. It's well worth your time. 

And if you're interested in more on Berkshire Hathaway, check out The Motley Fool's premium report on the company, written by Berkshire expert Joe Magyer. Just click here. 

link

Monday, July 29, 2013

Intuitive Surgical Increases Buybacks to $1.5 Billion

With $721 million remaining on an existing share repurchase authorization, robotic-surgery specialist Intuitive Surgical (NASDAQ: ISRG  ) said it will add another $779 million to the buyback program, bringing the total to approximately $1.5 billion.

Additionally, in connection with the buyback, Intuitive Surgical also said it was entering into an accelerated repurchase agreement with Goldman Sachs (NYSE: GS  ) to buy $500 million worth of company stock. Most of the shares to be bought back from the investment house will be delivered in two weeks' time, with the remaining shares to be received and retired by Oct. 29.

Intuitive Surgical President and CEO Dr. Gary S. Guthart said, "Our program to repurchase $1.5 billion in Intuitive Surgical stock, including $500 million on an accelerated basis, demonstrates our commitment to our shareholders as well as our confidence in the da Vinci surgical system and the benefits it brings to patients."

The remaining $1 billion on the authorization will be made through cash and investments, of which it had approximately $3 billion worth on hand. The buybacks will be made depending on market conditions, but Intuitive Surgical cautions that the program may also be suspended or terminated at any time.

Sunday, July 28, 2013

Show Me the Money, GP Strategies

Although business headlines still tout earnings numbers, many investors have moved past net earnings as a measure of a company's economic output. That's because earnings are very often less trustworthy than cash flow, since earnings are more open to manipulation based on dubious judgment calls.

Earnings' unreliability is one of the reasons Foolish investors often flip straight past the income statement to check the cash flow statement. In general, by taking a close look at the cash moving in and out of the business, you can better understand whether the last batch of earnings brought money into the company, or merely disguised a cash gusher with a pretty headline.

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

Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. Dollar values in millions. FCF = free cash flow. FY = fiscal year. TTM = trailing 12 months.

Over the past 12 months, GP Strategies generated $21.2 million cash while it booked net income of $23.2 million. That means it turned 5.2% of its revenue into FCF. That sounds OK. However, FCF is less than net income. Ideally, we'd like to see the opposite.

All cash is not equal
Unfortunately, the cash flow statement isn't immune from nonsense, either. That's why it pays to take a close look at the components of cash flow from operations, to make sure that the cash flows are of high quality. What does that mean? To me, it means they need to be real and replicable in the upcoming quarters, rather than being offset by continual cash outflows that don't appear on the income statement (such as major capital expenditures).

For instance, cash flow based on cash net income and adjustments for non-cash income-statement expenses (like depreciation) is generally favorable. An increase in cash flow based on stiffing your suppliers (by increasing accounts payable for the short term) or shortchanging Uncle Sam on taxes will come back to bite investors later. The same goes for decreasing accounts receivable; this is good to see, but it's ordinary in recessionary times, and you can only increase collections so much. Finally, adding stock-based compensation expense back to cash flows is questionable when a company hands out a lot of equity to employees and uses cash in later periods to buy back those shares.

So how does the cash flow at GP Strategies look? Take a peek at the chart below, which flags questionable cash flow sources with a red bar.

Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. Dollar values in millions. TTM = trailing 12 months.

When I say "questionable cash flow sources," I mean items such as changes in taxes payable, tax benefits from stock options, and asset sales, among others. That's not to say that companies booking these as sources of cash flow are weak, or are engaging in any sort of wrongdoing, or that everything that comes up questionable in my graph is automatically bad news. But whenever a company is getting more than, say, 10% of its cash from operations from these dubious sources, investors ought to make sure to refer to the filings and dig in.

With 10.9% of operating cash flow coming from questionable sources, GP Strategies investors should take a closer look at the underlying numbers. Within the questionable cash flow figure plotted in the TTM period above, stock-based compensation and related tax benefits provided the biggest boost, at 15.2% of cash flow from operations. Overall, the biggest drag on FCF came from changes in accounts receivable, which represented 19.0% of cash from operations.

A Foolish final thought
Most investors don't keep tabs on their companies' cash flow. I think that's a mistake. If you take the time to read past the headlines and crack a filing now and then, you're in a much better position to spot potential trouble early. Better yet, you'll improve your odds of finding the underappreciated home-run stocks that provide the market's best returns.

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

We can help you keep tabs on your companies with My Watchlist, our free, personalized stock tracking service.

Add GP Strategies to My Watchlist.

Saturday, July 27, 2013

Keep a Close Eye on These Three Trends this Month

 Last month, we took a look at three trends that appeared ready to spike higher in May. Let's take an updated look at them today and see what June might bring...
 
We figured May would be a tough month for bond investors. And it was. Interest rates on the 30-year Treasury bond spiked from 2.85% to more than 3.3%. It was the largest one-month spike in interest rates in the past four years...
 
Here's an updated chart...
 
30-Year Treasury Bond Yield Spikes
 
The move is a bit extended right now. So rates should come back down a bit over the next few weeks – especially if the broad stock market continues to weaken. Investors might flock to the perceived safety of Treasury bonds to avoid the risk of the stock market. That will push bond prices higher and force interest rates a bit lower.
 
 We were also looking for an increase in volatility. Periods of low volatility are always followed by periods of high volatility. So with the Volatility Index (the "VIX") trading below 14 at the start of May and remaining low through the middle of the month, it looked overdue to spike higher. Here's an updated chart...
 
Volatility (VIX) Starts to Rise (2-Month Chart)
 
The VIX didn't hit the 22 level we were looking for. But it is well off its lows and significantly higher for the month... And I don't think we've seen the end of this move. The VIX hit a high of 27 last June when the market sold off. It rose above 47 in July 2011. So there's still plenty of room for volatility to increase this month.
 
 Finally, we were looking for gasoline prices to bottom in May – about one month earlier than they did in 2011 and 2012. Here's the chart...
 
Gasoline Hits a Higher Low in May
 
Sure enough, gasoline prices bottomed in early May. We haven't yet seen a huge bounce off the bottom. But it looks like the chart has formed a "higher low." In each of the past two years, gas has rallied through the middle of summer. I expect we'll see something similar this year as well.
 
– Jeff Clark


Friday, July 26, 2013

Zynga's Out, Activision's In

U.S. stocks are moderately lower this morning, with the S&P 500 (SNPINDEX: ^GSPC  ) and the narrower, price-weighted Dow Jones Industrial Average (DJINDICES: ^DJI  ) down 0.38% and 0.43%, respectively, at 10:10 a.m. EDT.

At the forefront of traders' concerns this morning is China. With economic growth slowing to a two-decade low last quarter, the Communist regime is ramping up its interventionism with a new decree ordering companies to shut factories across 19 industries in order to curtail supply and end what it believes is excessive price competition. Elsewhere in Asia, the 3% drop in Japan's Nikkei 225 on Friday is only adding to negative sentiment this morning.

Game on or game over?
It's all fun and games until your shares open down 17%, which is where social-game developer Zynga (NASDAQ: ZNGA  ) finds itself this morning following yesterday afternoon's earnings announcement.

The headline numbers did contain a glimmer of hope:

The company lost $0.01 per share on a pro forma basis, which was better than the $0.04 loss analysts were expecting. The quarterly net loss of $16 million is an improvement over the year-ago loss of $23 million. Although quarterly revenue fell 31% year on year to $231 million, that was ahead of the consensus estimate of $186 million.

10 Best Stocks To Buy For 2014

All the same, a near one-third drop in revenue is highly disconcerting, particularly if one considers that growth investors are the shares' natural constituency. Add to that the company's announcement that it will not pursue the online gaming market in the U.S. as a potential source of user and revenue growth, and you can see why some Zynga shareholders are calling it "game over" this morning.

"Getting a business back on track isn't easy and isn't quick, I know we can do better," Zynga's new CEO Don Mattrick told analysts and investors yesterday. I'm sure I agree with the first part of that statement.

Zynga is a pure speculation (and not a compelling one, in my opinion) -- investors mustn't allow themselves to forget this.

Meanwhile, another game developer, Activision Blizzard (NASDAQ: ATVI  ) , is having a different kind of morning, with the shares up 14%. The company is seizing its independence from Vivendi by buying back the bulk of Vivendi's shareholding, which will fall from 61% to 12% (an investor group led by Activision's CEO and its chairman will also participate in the transaction).

This is a company acting from a position of strength: It generates oodles of cashflow and carries no long-term debt on its balance sheet. Yes, it's in a hit-driven business, but between Activision and Zynga, I know where I'd prefer to put my money.

Alternatively, there is a "picks-and-shovels" angle for investors here. The amount of data we store every year is growing by a mind-boggling 60% annually! If you want to make sense of this trend and pick out a winner, The Motley Fool has compiled a new report called "The Only Stock You Need to Profit From the NEW Technology Revolution." The report highlights a company that has gained 300% since first recommended by Fool analysts but still has plenty of room left to run. To get instant access to the name of this company transforming the IT industry, click here -- it's free.

Thursday, July 25, 2013

Top 5 Undervalued Stocks To Own For 2014

The stock market can be a wonderful thing, helping you grow your wealth and enjoy a comfortable retirement. But it can also fry your precious nest egg if you're not careful. My colleague Morgan Housel has noted that the financial industry "is dominated by cranks, charlatans, and salesmen" -- but very often, we're the ones who most endanger our portfolios and our financial futures with our reckless investment ideas. Permit me to review just a few.

"Wow, this cheap stock is only $0.13 per share! I can buy 10,000 shares for just $1,300!"
Penny stocks -- those trading for less than about $5 per share -- are usually very bad investment ideas, as they can be easily manipulated and are often tied to shaky, unproven companies. Sure, they entice us with their seemingly cheap prices, and the thought of owning 10,000 shares of something is somehow more exciting than owning far fewer shares. But a low price isn't necessarily a cheap price. A $200 stock can be undervalued and more likely to rise than fall while a $0.13 stock can be worth much less than that and be more likely to fall than rise.

Top 5 Undervalued Stocks To Own For 2014: Caterpillar Inc.(CAT)

Caterpillar Inc. manufactures and sells construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives worldwide. It operates through three lines of businesses: Machinery, Engines, and Financial Products. The Machinery business offers construction, mining, and forestry machinery, including track and wheel tractors, track and wheel loaders, pipelayers, motor graders, wheel tractor-scrapers, track and wheel excavators, backhoe loaders, log skidders, log loaders, off-highway trucks, articulated trucks, paving products, skid steer loaders, underground mining equipment, tunnel boring equipment, and related parts. It also manufactures diesel-electric locomotives; and manufactures and services rail-related products and logistics services for other companies. The Engines business provides diesel, heavy fuel, and natural gas reciprocating engines for Caterpillar machinery, electric power generation systems, marine, petrol eum, construction, industrial, agricultural, and other applications. It offers industrial turbines and turbine-related services for oil and gas, and power generation applications. This business also remanufactures Caterpillar engines, machines, and engine components; and offers remanufacturing services for other companies. The Financial Products business provides retail and wholesale financing alternatives for Caterpillar machinery and engines, solar gas turbines, and other equipment and marine vessels, as well as offers loans and various forms of insurance to customers and dealers. It also offers financing for vehicles, power generation facilities, and marine vessels. The company markets its products directly, as well as through its distribution centers, dealers, and distributors. It was formerly known as Caterpillar Tractor Co. and changed its name to Caterpillar Inc. in 1986. Caterpillar Inc. was founded in 1925 and is headquartered in Peoria, Illinois.

Advisors' Opinion:
  • [By Sam Collins]

    Caterpillar (NYSE:CAT) is the world’s largest producer of construction and mining equipment, diesel and natural gas engines, and industrial gas turbines. The stock has been in a bull market since the market bottomed in March 2009. CAT was one of our Top Stocks to Buy for December because of its position as a major supplier to the third world and China. The company should also be a beneficiary of orders from Japan due to the damage from earthquakes and the tsunami.

    Revenues in 2011 are expected to increase by 36%, according to S&P, and margins are expected to increase, as well. Earnings for 2012 are forecast at $9.10, up from $7.50 this year, and S&P has a target of $142 over the next 12 months.

    Technically CAT has strong support at $95 and currently appears to be oversold, according to Moving Average Convergence/Divergence (MACD). If it is able to hold at the support line, look for a rally to $110 within 30 days. Longer term the stock could trade north of $125.

  • [By Jim Cramer,TheStreet]

    Caterpillar (CAT) could be a monster in 2011, especially with the integration of Bucyrus International (BUCY), which I think will turn out to be a fantastic acquisition.

    Current earnings-per-share estimates of about $6 are, I think, way too low. I see this stock going to $120 in the next year. Too gutsy? Ask yourself what happens if the United States comes back as a growth nation? Right now almost all of the growth is overseas.

    Still a fantastic mineral play and a terrific call on world growth.

Top 5 Undervalued Stocks To Own For 2014: Tupperware Corporation(TUP)

Tupperware Brands Corporation operates as a direct seller of various products across a range of brands and categories through an independent sales force. The company engages in the manufacture and sale of kitchen and home products, and beauty and personal care products. It offers preparation, storage, and serving solutions for the kitchen and home, as well as kitchen cookware and tools, children?s educational toys, microwave products, and gifts under the Tupperware brand name primarily in Europe, Africa, the Middle East, the Asia Pacific, and North America. The company provides beauty and personal care products, which include skin care products, cosmetics, bath and body care, toiletries, fragrances, nutritional products, apparel, and related products principally in Mexico, South Africa, the Philippines, Australia, and Uruguay. It offers beauty and personal care products under the Armand Dupree, Avroy Shlain, BeautiControl, Fuller, NaturCare, Nutrimetics, Nuvo, and Swissgar de brand names. The company sells its Tupperware products directly to distributors, directors, managers, and dealers; and beauty products primarily through consultants and directors. As of December 26, 2009, the Tupperware distribution system had approximately 1,800 distributors, 61,300 managers, and 1.3 million dealers; and the sales force representing the Beauty businesses approximately 1.1 million. The company was formerly known as Tupperware Corporation and changed its name to Tupperware Brands Corporation in December 2005. The company was founded in 1996 and is headquartered in Orlando, Florida.

Advisors' Opinion:
  • [By Sam Collins]

    Household name Tupperware Brands Corp. (NYSE:TUP) is a global direct seller of products with multiple brands through an independent sales force of 2.4 million people. Its product line focuses on kitchen storage and serving solutions, as well as personal-care products. Over 60% of sales in 2011 are expected to come from Europe and Asia, and the stock has appeal as an emerging markets story.

    S&P estimates that 2011 earnings will increase to $4.54 versus $3.53 in 2010, and it increased its rating to a “five-star strong buy” with a recently revised 12-month target of $81, up from $73. The 2005 purchase of Sara Lee’s (NYSE:SLE) direct-sales business, which has a high growth rate, should be a long-term benefit. TUP’s annual dividend yield is 1.92%.

    Technically TUP had a pullback following a new high at over $70 and is currently oversold. Buy TUP at the current market price with a trading target of $70, but longer term a much higher target will likely be attained.

Top 10 Warren Buffett Stocks To Buy For 2014: Schlumberger N.V.(SLB)

Schlumberger Limited, together with its subsidiaries, supplies technology, integrated project management, and information solutions to the oil and gas exploration and production industries worldwide. The company?s Oilfield Services segment provides exploration and production services; wireline technology that offers open-hole and cased-hole services; supplies engineering support, directional-drilling, measurement-while-drilling, and logging-while-drilling services; and testing services. This segment also offers well services; supplies well completion services and equipment; artificial lift; data and consulting services; geo services; and information solutions, such as consulting, software, information management system, and IT infrastructure services that support oil and gas industry. Its WesternGeco segment provides reservoir imaging, monitoring, and development services; and operates data processing centers and multiclient seismic library. This segment also offers variou s services include 3D and time-lapse (4D) seismic surveys to multi-component surveys for delineating prospects and reservoir management. The company?s M-I SWACO segment supplies drilling fluid systems to improve drilling performance; fluid systems and specialty tools to optimize wellbore productivity; production technology solutions to maximize production rates; and environmental solutions that manages waste volumes generated in drilling and production operations. Its Smith Oilfield segment designs, manufactures, and markets drill bits and borehole enlargement tools; and supplies drilling tools and services, tubular, completion services, and other related downhole solutions. The company?s Distribution segment markets pipes, valves, and fittings, as well as mill, safety, and other maintenance products. This segment also provides warehouse management, vendor integration, and inventory management services. Schlumberger Limited was founded in 1927 and is based in Houston, Texas.

Advisors' Opinion:
  • [By Brian Stoffel]

    This company has been a pick of both Jordan DiPietro and Bryan White. And both analysts have pointed to the company's opportunity for oil exploration abroad -- which is where much of the demand will soon be coming from as well.

    Bryan points out that three-fourths of the company's revenue comes from abroad, with "Brazil, the Middle East, and Africa [as] key regions where activity is expected to be robust and growing."

    Jordan adds, "[Schlumberger] has an important presence in high-growth regions of the world such as Iraq, Mexico, and Russia, and has the competitive advantage to be able to offer full services, from managing entire oil fields to drilling wells."

Top 5 Undervalued Stocks To Own For 2014: Dollar Tree Inc.(DLTR)

Dollar Tree, Inc. operates discount variety stores in the United States and Canada. Its stores offer merchandise primarily at the fixed price of $1.00. The company operates its stores under the names of Dollar Tree, Deal$, Dollar Tree Deal$, Dollar Giant, and Dollar Bills. Its stores offer consumable merchandise, including candy and food, and health and beauty care, as well as household consumables, such as paper, plastics, household chemicals, in select stores, and frozen and refrigerated food; variety merchandise, which includes toys, durable housewares, gifts, party goods, greeting cards, softlines, and other items; and seasonal goods, such as Easter, Halloween, and Christmas merchandise. As of April 30, 2011, it operated 4,089 stores in 48 states and the District of Columbia, as well as 88 stores in Canada. The company was founded in 1986 and is based in Chesapeake, Virginia.

Advisors' Opinion:
  • [By Sam Collins]

    Dollar Tree (NASDAQ:DLTR) is a leading operator of discount variety stores. The stock has hugged its 50-day moving average since mid-February. But a recent minor revision of earnings for this year by several analysts and the recent market sell-off have resulted in a fall from its high of the year at over $70 to under $66. However, Goldman Sachs (NYSE:GS) increased its price target to $73 from $69.

    Technically DLTR is oversold, according to MACD. A break below its 50-day moving average could result in a pullback to $64, but positions could be taken at the current market price. The trading target for DLTR is $72.

Why VMware Shares Skyrocketed

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

What: Shares of virtualization specialist VMware (NYSE: VMW  ) have skyrocketed today by as much as 18% after the company reported earnings last night.

So what: Revenue in the second quarter totaled $1.24 billion, which translated into adjusted earnings per share of $0.79. Both figures topped the market's expectations of $1.23 billion in sales and $0.77 per share in adjusted profit. Investors were impressed with VMware's guidance.

Now what: Third-quarter sales are expected to be in the range of $1.27 billion to $1.3 billion, and license revenues should be $535 million to $555 million. Full-year revenue should be $5.12 billion to $5.26 billion. That outlook helped dispel fears that VMware's business was maturing and growth was slowing, as pessimism had been growing recently. Nomura Securities and Raymond James both upgraded VMware to "buy."

Interested in more info on VMware? Add it to your watchlist by clicking here.

It's incredible to think just how much of our digital and technological lives are almost entirely shaped by just a handful of companies. Find out "Who Will Win the War Between the 5 Biggest Tech Stocks?" in The Motley Fool's latest free report, which details the knock-down, drag-out battle being waged by the five kings of tech. Click here to keep reading.

Wednesday, July 24, 2013

3M vs. Bank of America: Which Dow Stock's Dividend Dominates?

Dividend stocks outperform non-dividend-paying stocks over the long run. It happens in good markets and bad, and the benefit of dividends can be quite striking: Dividend payments have made up about 40% of the market's average annual return from 1936 to the present day. But few of us can invest in every single dividend-paying stock on the market, and even if we could, we might find better gains by being selective. That's why we'll be pitting two of the Dow Jones Industrial Average's (DJINDICES: ^DJI  ) dividend payers against each other today to find out which Dow stock is the true dividend champion. Let's take a closer look at our two contenders now.

Tale of the tape
3M (NYSE: MMM  ) is a Jack-of-all-manufacturing-trades for the Dow. The Minnesota-based company (the first "M" stands for its state of origin) will soon reach its 37th Dow-niversary, and it will celebrate as it typically does: by working hard to develop innovative new industrial products. Since its founding in 1902, 3M has become a leading producer of a wide range of products, including bandages, cleaning products, paint, filtration, and sticky notes. 3M's consistency will make it a formidable opponent to its challenger...

Bank of America (NYSE: BAC  ) joined the Dow in early 2008, which turned out to be a real disaster for the index's returns. However, the second-largest bank by assets in America is undoubtedly a worthwhile representative of the U.S. financial sector. Not only is Bank of America a dominant player in commercial banking, but its crisis-era purchase of Merrill Lynch also established it as the world's largest wealth-management company. Unfortunately, the financial crisis has weakened Bank of America, and its persistent mortgage-related problems have prevented it from paying a similar dividend to its megabank peers. Can Bank of America prevail, or will industry triumph over finance today in our dividend battle?

Statistic

3M 

Bank of America

Market cap

$80.3 billion

$160.3 billion

P/E ratio

18.3

32.2

Trailing-12-month profit margin

14.8%

4.2%

TTM free-cash-flow margin*

13%

N/A

Five-year total return 

89.8%

(50.8%)

Source: Morningstar and YCharts. *Free-cash-flow margin is free cash flow divided by revenue for the trailing 12 months.

Round one: endurance
3M's dividend history stretches all the way back to 1916, so it will soon celebrate its dividend centennial. Bank of America is a far more recent entrant to the dividend game, as Dividata only records payments as far back as 1986, when it was still largely based in California.

Winner: 3M, 1-0

Round two: stability
Paying dividends is well and good, but how long have our two companies been increasing their dividends? The same dividend payout year after year can quickly fall behind a rising market, and there's no better sign of a company's financial stability than a rising payout in a weak market (so long as it's sustainable, of course). 3M is a dividend aristocrat, and its streak of payout growth dates back to 1959. Bank of America, which has yet to raise its payout from the nominal penny-per-share level to which it was reduced during the financial crisis, simply can't compete.

Winner: 3M, 2-0

Round three: power
It's not that hard to commit to paying back shareholders, but are these payments enticing or merely token? Let's take a look at how both companies have maintained their dividend yields over time as their businesses and share prices have grown:

MMM Dividend Yield Chart

MMM Dividend Yield data by YCharts.

Bank of America might be able to push its payout above 3M's in the future, but it certainly hasn't maintained a strong yield for some time.

Winner: 3M, 3-0

Round four: strength
A stock's yield can stay high without much effort if its share price doesn't budge, so let's take a look at the growth in payouts over the past five years. If you bought in several years ago and the company has grown its payout substantially, your real yield is likely much better than what's shown above.

MMM Dividend Chart

MMM Dividend data by YCharts.

Winner: 3M, 4-0.

3M blows Bank of America out of the water and moves on to the next round of the Dow dividend tournament. However, Bank of America's persistent weakness shouldn't be permanent, and it might soon become a much stronger dividend stock once its long-standing subprime problems have been worked through its system. Would you invest in Bank of America today in the hopes of getting some hefty dividends in the future, or is the financial giant better considered a momentum play in a recovering economy, to be avoided the next time things take a turn for the worse?

While dividend stocks don't garner the notoriety of highflying growth stocks, they're also less likely to crash and burn. And over the long term, the compounding effect of the quarterly payouts, as well as their growth, adds up faster than most investors imagine. Our analysts recently sat down to identify the absolute best of the best when it comes to rock-solid dividend stocks, drawing up a list in this free report of the only nine that fit the bill. To discover the identities of these companies before the rest of the market catches on, you can download this valuable free report by simply clicking here now.

Tuesday, July 23, 2013

2 Industrial Giants Powering the Dow Toward Record Highs

At the outset of earnings season, investors were doubtful of the growth prospects for many of the biggest companies in the U.S. So far, though, the stock market has soared throughout this earnings season as many of those companies managed to outpace lowered expectations and make share price gains as a result. With so many members of the Dow Jones Industrials (DJINDICES: ^DJI  ) reporting their quarterly results this week, it's only natural for the market to put considerations about broader macroeconomic issues on the back burner and focus on individual company results. Given some good news this morning, the Dow is up a nominal 12 points as of 10:50 a.m. EDT, pushing forward to what could be a new all-time high if the index holds onto its current gains.

Driving the Dow higher are two industrial giants, United Technologies (NYSE: UTX  ) and DuPont (NYSE: DD  ) . For United Tech, a combination of continued strength in the aerospace industry and solid gains by its elevator segment sent the stock up 2.9%. The conglomerate also raised the lower end of its previous full-year earnings guidance, pointing to the success of its Goodrich acquisition in boosting sales of parts for large commercial engines. One analyst estimated that 65% of aircraft components now come from United Tech businesses, leaving its future firmly connected with currently rosy projections about aerospace demand over the next couple of decades.

DuPont, meanwhile, has gained 0.7% following its own quarterly report. Results from the quarter were mixed, with earnings falling from year-ago levels but narrowly beating estimates while revenue missed analysts' consensus figures. But the company said it's considering a sale of its "performance chemicals" segment, citing the exploration of "strategic alternatives" -- which might be a result of the recent investment from activist hedge-fund investor Nelson Peltz. The unit, which makes titanium dioxide pigment for paint and the popular Teflon coating, carries lower margins than DuPont's agricultural and energy-based businesses. Lately, potential M&A activity has spurred share price gains, and investors clearly expect DuPont's moves to unlock further value.

Finally, outside the Dow, earnings has helped drive smaller stocks higher as well. Coal stocks are climbing as Peabody Energy (NYSE: BTU  ) jumps 5.4% after reporting that its profit didn't drop quite so much as expected, with cost-cutting measures offsetting some of the negative impact of falling revenue. Peabody's results helped send the Market Vectors Coal ETF up more than 2%, but the industry has a long way to go before it can climb out from under the longer-term losses it has racked up in recent years.

The industrial sector is going through a huge transformation as investors prepare for the end of the "made in China" era. Read all about the biggest industry disrupters since the personal computer in 3 Stocks to Own for the New Industrial Revolution. Just click here to learn more.

Monday, July 22, 2013

Top Penny Stocks To Watch Right Now

The Illinois Senate approved new legislation on Tuesday that would allow Ameren (NYSE: AEE  ) to invest $330 million more in its natural gas delivery system, according to an Ameren press release.

The "Natural Gas Consumer, Safety, & Reliability Act" would enable Ameren to pass some modernization costs on to consumers, accelerating upgrades to Illinois' transmission, distribution, and technology systems. According to the release, an average residential user would incur an additional penny per day in gas bills for the next ten years.

"This plan enhances our ability to meet the current and future needs of our gas customers while creating 150 good-paying jobs and maintaining strong consumer protections," said Ameren Illinois CEO and President Richard Mark in a statement. "It is a win for Illinois customers, businesses and labor."

Top Penny Stocks To Watch Right Now: Natural Alternatives International Inc.(NAII)

Natural Alternatives International, Inc. provides private label contract manufacturing services to companies that market and distribute vitamins, minerals, herbs, and other nutritional supplements, as well as other health care products, to consumers in the United States and internationally. It offers strategic partnering services, including customized product formulation, clinical studies, manufacturing, marketing support, international regulatory and label law compliance, international product registration, packaging in multiple formats, and labeling design. The company also develops, manufactures, and markets its own branded products under the Pathway to Healing product line through print media and the Internet distribution channels. It manufactures products in various forms, including capsules, tablets, chewable wafers, and powders. The company was founded in 1980 and is headquartered in San Marcos, California.

Top Penny Stocks To Watch Right Now: BNC Bancorp(BNCN)

BNC Bancorp operates as the holding company for Bank of North Carolina, which provides a range of commercial banking products and services to individuals, and small to medium size businesses in North Carolina. The company offers various deposit products, including checking and savings accounts, negotiable order of withdrawal accounts, money market demand accounts, noninterest-bearing accounts, and fixed interest rate certificates with varying maturities. Its loan portfolio comprises business loans secured by real estate, personal property, and accounts receivable; unsecured business loans; consumer loans that are secured by consumer products, such as automobiles and boats; unsecured consumer loans; commercial real estate loans; and commercial, installment, and personal loans. The company also offers safe deposit boxes and other associated services. As of December 31, 2009, it operated a main office in Thomasville, 15 other branch offices, and 1 limited services office. The company was founded in 1991 and is headquartered in High Point, North Carolina.

5 Best Stocks For 2014: Empresas Ica Soc Contrladora (ICA)

Empresas ICA, S.A.B. de C.V., through its subsidiaries, engages in the construction and related activities in Mexico. The company?s Civil Construction segment focuses on infrastructure projects that include the construction of roads, highways, mass transit systems, bridges, dams, hydroelectric plants, tunnels, canals, and airports; and on the construction, development, and remodeling of multi-storied urban buildings, such as office buildings, hotels, multiple-dwelling housing developments, and shopping centers. This segment also engages in demolition, clearing, excavation, de-watering, drainage, embankment fill, structural concrete construction, concrete and asphalt paving, and tunneling activities. Its Industrial Construction segment focuses on the engineering, procurement, construction, design, and commissioning of manufacturing facilities comprising power plants, chemical plants, petrochemical plants, fertilizer plants, pharmaceutical plants, steel mills, paper mills, d rilling platforms, and automobile and cement factories. Empresas ICA?s Rodio Kronsa segment engages in sub-soil construction involving the construction of tunnels, underpasses, and retaining walls. The company?s Housing Development segment engages in the development, trading, ownership, sale, assistance, operation, and administration activities. Its Infrastructure segment involves in the operation and maintenance of concessioned airports, highways, bridges and tunnels, water supply systems, and waste treatment systems. The company also provides a range of services that include feasibility studies, conceptual design, engineering, procurement, project and construction management, construction, maintenance, technical site evaluation, and other consulting services. It serves public and private sector clients. Empresas ICA, S.A.B. de C.V. was founded in 1947 and is based in Mexico.

Top Penny Stocks To Watch Right Now: Lexington Realty Trust (LXP)

Lexington Corporate Properties Trust operates as a self-managed and self-administered real estate investment trust (REIT). The company acquires, owns, and manages a portfolio of office, industrial, and retail properties net-leased to corporate tenants in the United States. It also provides investment advisory and asset management services to institutional investors in the net lease area. As of June 30, 2005, the company operated 185 properties and managed 2 properties. Lexington Corporate Properties Trust has elected to qualify as a REIT for federal income tax purposes. As a REIT, it would not be taxed on the portion of its income, which is distributed to shareholders, provided it distributes at least 90% of its taxable income. The company was founded in 1991 and is based in New York City.

Top Penny Stocks To Watch Right Now: Helios Strategic Income Fd Inc (HSA)

Helios Strategic Income Fund, Inc. is a closed ended fixed income mutual fund launched and managed by Brookfield Investment Management Inc. It operates as a diversified and closed-end management investment company. The fund primarily invests in debt securities and equity securities. Its portfolio of investments includes investments in corporate bonds, home equity loans, commercial loans, franchise loans, equipment leases, manufactured housing, common stock, collateralized debt obligations, certificate-backed obligations, collateralized mortgage obligations, and government agency securities. It was formerly known as RMK Strategic Income Fund, Inc. Helios Strategic Income Fund, Inc. was founded in 2004 and is based in Memphis, Tennessee.

Top Penny Stocks To Watch Right Now: Exceed Company Ltd.(EDS)

Exceed Company Ltd. engages in the design, development, and wholesale of footwear, apparel, and accessories in the People?s Republic of China. The company offers its products under the Xidelong brand name for sports and leisure applications to customers aging between 15 to 35 years. Its products include running, leisure, basketball, skateboarding, canvas, tennis, and outdoor footwear; apparel primarily consisting of sports tops, pants, jackets, track suits, and coats; accessories, such as bags, socks, hats, and caps. The company distributes its products primarily through Xidelong retail stores that are operated by independent third-party distributors and retailers over which the company has limited control. Exceed Company Ltd. is based in Central, Hong Kong.

Sunday, July 21, 2013

Top 10 Casino Stocks To Watch For 2014

WikiMedia Commons.

The 2002 book Bringing Down the House told the true story of how six MIT math geniuses mastered blackjack card counting and took Las Vegas for millions. It had money, sex, drugs, and power. People loved it.

But part of the story often went misunderstood. The card-counters didn't win every hand of blackjack, or anything close to it. The casino normally has a slight edge over players. The MIT crew's strategy tipped those odds just barely in their favor. That meant they still lost a lot of bets. "Even the most complex systems seemed to aim at an overall edge of around 2 percent," author Ben Mezrich wrote.

But that tiny edge was all the crew needed to succeed, provided they played long enough.�When the odds are even slightly in your favor, you will win over time,�even if you lose often in between.�

Top 10 Casino Stocks To Watch For 2014: Pinnacle Entertainment Inc.(PNK)

Pinnacle Entertainment, Inc. owns, develops, and operates casinos, and related hospitality and entertainment facilities in the United States. It operates casinos, such as L'Auberge du Lac in Lake Charles, Louisiana; River City Casino and Lumiere Place in St. Louis, Missouri; Boomtown New Orleans in New Orleans, Louisiana; Belterra Casino Resort in Vevay, Indiana; Boomtown Bossier City in Bossier City, Louisiana; and Boomtown Reno in Reno, Nevada. The company also operates River Downs racetrack in southeast Cincinnati, Ohio. As of May 26, 2011, it operated seven casinos and one racetrack. The company was formerly known as Hollywood Park, Inc. and changed its name to Pinnacle Entertainment, Inc. in February 2000. Pinnacle Entertainment, Inc. was founded in 1935 and is based in Las Vegas, Nevada.

Advisors' Opinion:
  • [By Sherry Jim]

    Pinnacle Entertainment(PNK) swung to a loss in its second quarter, as costs rose.

    During the quarter, the regional casino operator lost $49.3 million, or 81 cents a share, compared with a profit of $4.7 million, or 8 cents, in the year-ago period for Pinnacle.

    Excluding items, Pinnacle actually lost 14 cents a share, 10 cents worse than analysts' estimates of a 4-cent loss.

    Pinnacle's revenue rose 8.5% to $273.6 million from $252.3 million, but also fell short of Wall Street's forecast of $284.4 million.

    Even though revenue was weaker, margins rebounded at all but one of Pinnacle's properties. "Margins are the story for Pinnacle ahead of any longer-term potential true rebound in the economy, and we continue to believe there are multiple opportunities for near-term operational improvements across the Pinnacle portfolio," Bain wrote in a note.

    At a time when most casino operators are striving to reduce costs to offset the decline in consumer spending, Pinnacle saw expenses rise 21% to $289.3 million. But Bain said Pinnacle is still in the early stages of cost-refining. "Given what we view as several areas of potential improvements in this regard, we believe Pinnacle is less dependent on an economic recovery than some of its regional peers," he wrote.

    J.P. Morgan analyst Joseph Greff also reaffirms his overweight rating on the stock, viewing Pinnacle as a transition story. "We continue to believe that new CEO Anthony Sanfilippo and team will drive increased operating efficiencies and allocate capital prudently," he wrote in a note.

    Greff praises Sanfilippo for shelving the Sugarcane Bay project and instead focusing on Baton Rouge.

    Pinnacle's liquidity remains strong, with $200 million in cash and $375 million of availability under its revolver

  • [By Jeanine Poggi]

    Pinnacle Entertainment(PNK) was the great transition story of 2010, with shares spiking about 45% this year.

    The regional casino operator's most impressive story has been in its gross margins, as management, under the leadership of new CEO Anthony Sanfilippo, is in the process of increasing the company's operating efficiencies and prudently allocating capital. Analysts believe Pinnacle is in the early stages of this process, and will continue to drive revenue growth.

    In its third quarter, Pinnacle reported a surprise profit of 10 cents a share on an adjusted basis, better than consensus estimates of a loss of 7 cents. Revenue grew 15% to $287.8 million, while property-level margins reached 23.4%, also ahead of forecasts.

    Last month, Pinnacle purchased Cincinnati's River Downs Racetrack for $45 million. The deal includes 155 acres, 35 of which are still undeveloped. The transaction is expected to close by the end of the first quarter of 2011.

    This deal could generate significant returns in the event that Ohio decides to legalize video lottery terminals at racetracks, Santarelli said.

    Pinnacle is also in the process of looking for a buyer of its oceanfront land in Atlantic City, where it originally intended to build a $1.5 billion casino, before squelching plans. The casino operator bought the land in 2006 for $270 million from groups affiliated with Carl Icahn and later added another piece of land for $70 million.

    While the land's currently value is $38 million, Pinnacle insists it will not sell it on the cheap, holding out for the best deal.

    Pinnacle currently has $228 million in cash and $375 million of availability under its revolver.

Top 10 Casino Stocks To Watch For 2014: Wynn Resorts Limited(WYNN)

Wynn Resorts, Limited, together with its subsidiaries, engages in the development, ownership, and operation of destination casino resorts. The company owns and operates Wynn Las Vegas casino resort in Las Vegas, which includes approximately 22 food and beverage outlets comprising 5 dining restaurants; 2 nightclubs; 1 spa and salon; 1 Ferrari and Maserati automobile dealership; wedding chapels; an 18-hole golf course; meeting space; and foot retail promenade featuring boutiques. Wynn Las Vegas casino resort also features approximately 147 table games, 1 baccarat salon, private VIP gaming rooms, 1 poker room, 1,842 slot machines, and 1 race and sports book. It also owns and operates an Encore at Wynn Las Vegas resort, a destination casino resort located adjacent to Wynn Las Vegas that features a 2,034 all-suite hotel, as well as a casino with 95 table games, 1 sky casino, 1 baccarat salon, private VIP gaming rooms, and 778 slot machines. In addition, the company operates Wyn n Macau casino resort located in the Macau Special Administrative Region of the People?s Republic of China. Wynn Macau casino resort features approximately 595 hotel rooms and suites, 410 table games, 935 slot machines, 1 poker room, 1 sky casino, 6 restaurants, 1 spa and salon, lounges, meeting facilities, and retail space featuring boutiques. Further, it operates Encore at Wynn Macau resort located adjacent to Wynn Macau. Encore at Wynn Macau resort features approximately 410 luxury suites and 4 villas, as well as casino gaming space, including a sky casino consisting of 60 table games and 80 slot machines, 2 restaurants, 1 luxury spa, and retail space. The company was founded in 2002 and is based in Las Vegas, Nevada.

Advisors' Opinion:
  • [By Jeanine Poggi]

    Wynn Resorts'(WYNN) run up of more than 55% this year has caused Wall Street to question its valuation.

    Currently, eight analysts have a buy rating on Wynn, 16 say hold, two rate it underperform rating and one says to sell the stock.

    "With little on the growth horizon in the intermediate term, new competition from Cotai coming in 2011 and 2012 ... and the unclear timing of a true recovery in Las Vegas, we see few catalysts not yet priced-in to pull valuation higher than current levels," Bain wrote in a note following its third-quarter earnings report.

    During the quarter, Wynn lost $33.5 million, or 27 cents a share, compared with a profit of $34.2 million, or 28 cents, in the year-ago period. The loss was attributed to charges related to servicing its debt. On an adjusted basis, Wynn actually earned 39 cents, matching Wall Street's outlook.

    Total Revenue grew to $1 billion from $773.1 million, better than the $990.8 million analysts predicted.

    In Macau, Wynn reported a 50% surge in revenue to $671.4 million, while EBITDA was $198 million, up 54.5% from $128.2 million in the third quarter of 2009. Earlier in the year the company opened its $600 million Wynn Encore Macau, which added 414 rooms to the market.

    Looking ahead, Wynn expects to break ground on its Cotai development in early 2011. The $2 billion to $3 billion project is slated to open in 2015, and management said it would provide additional details following its fourth-quarter earnings report.

    In Las Vegas, CEO Steve Wynn says the Strip is on the road to recovery. "I believe we have seen the bottom in Las Vegas," he said during the company's third-quarter conference call. "I don't know how fast it is going to get better but it isn't going to get any worse."

    Las Vegas revenue inched up 3.1% to $334.5 million during the three-month period, and EBITDA grew 9.3% to $76.5 million.

    Wynn also issued a cash dividend of $8 a share payable on Dec. 7 to sharehold! ers of record on Nov. 23.

  • [By Carlson]

    Wynn Resorts(WYNN) saw its second-quarter profit more than double, but most of that strength came from casino wins, and investors were unimpressed.

    During the quarter, the casino operator earned $52. 4 million, or 52 cents a share, on revenue of $1.03 billion, higher than forecasts of 42 cents on revenue of $992.3 million. This compares with a profit of $25.5 million, or 21 cents, on revenue of $723.3 million, in the year-ago period.

    Wynn had already pre-announced disappointing results for its Las Vegas properties, citing higher costs, including employee health care and benefits, and marketing expenses. Its operating loss for its Wynn Las Vegas and Encore widened to $17.2 million from $8.3 million last year. Revenue rose 1.7% to $318 million.

    Occupancy at the Wynn Las Vegas jumped to 92.6% from 86.6% a year earlier, but revenue per available room fell 3.2%.

    Still, management indicated that there is a slight improvement on the Strip, with an increase in forward group bookings and some bright spots for the ability to yield rates. But management tempered enthusiasm by saying there are some struggles and uncertainty in the marketplace.

    "We hope for continued improvement in Las Vegas or -- let me put it different, we hope that we'll get smarter in Las Vegas in dealing with the peculiarities of this market --and this very, very mercurial, national economic market we're living with," said Steve Wynn, chief executive, in a conference call. "The national economy and the political environment in the country as we head up to the elections [is] very, very touchy. And it is impacting all businesses."

    The biggest boost, of course, came from Macau, where revenue surged 74% to $714.4 million from $410.4 million last year.

    The company opened its Encore Macau in the spring, boosting its market share to about 16% from about 13%, Sterne Agee analyst David Bain wrote in a note.

    Wynn is in the process of working on a new development on the Cotai st! rip, which should spike investors' interest as more details are revealed in the coming quarters.

    Still, investors are concerned that as comparisons get harder in Macau, and second-quarter results are adjusted for hold (how much the casino won), Wynn may not be able to outperform. But Bain reassures, "this has been discussed as nauseam by investors, sell-side analysts, the press -- and even dinner-table relatives -- for some time. We believe the Street is underestimating the summer months in Macua, which may help to produce a new leg up for Macau stories, with Wynn being the most profitable on a per position basis."

5 Best Stocks To Watch Right Now: (XTRN)

Las Vegas Railway Express Inc. focuses to re-establish a conventional passenger train service between the Las Vegas and Los Angeles metropolitan areas. It plans to establish a ?Vegas-style? passenger train service. The company is based in Las Vegas, Nevada.

Top 10 Casino Stocks To Watch For 2014: MGM Resorts International(MGM)

MGM Resorts International, through its subsidiaries, primarily owns and operates casino resorts in the United States. The company?s resorts offer gaming, hotel, dining, entertainment, retail, and other resort amenities. It also owns and operates golf courses and a golf club. As of December 31, 2010, the company owned and operated 15 properties located in Nevada, Mississippi, and Michigan; and has 50% investments in 4 other casino resorts in Nevada, Illinois, and Macau. In addition, MGM Resorts International has an agreement with the Mashantucket Pequot Tribal Nation, which owns and operates a casino resort in Connecticut, to carry the ?MGM Grand? brand name. The company was formerly known as MGM MIRAGE and changed its name to MGM Resorts International in June 2010. MGM Resorts International was founded in 1986 and is based in Las Vegas, Nevada.

Advisors' Opinion:
  • [By Goodwin]

    MGM Resorts International(MGM) has the most exposure to the Las Vegas market, making it a bet only for those with thick skin.

    For the second quarter, the casino operator lost $883.5 million, or $2 a share, compared with a loss of $212.5 million, or 60 cents, in the year-ago period.

    A majority of the loss was attributed to a $1.12 billion writedown on its investment in CityCenter in Las Vegas. This is the third time MGM has had to write down CityCenter, as the casino has seen little improvement in operating profit since it opened in December. The $8.5 billion development took a loss of $128 million.

    Excluding this writedown, MGM actually lost 35 cents a share, still significantly more than analysts estimates of a 24-cent loss. MGM's revenue rose 3% to $1.54 billion from $1.49 billion, ahead of analysts' estimates of $1.46 billion.

    Revenue-per-available room on the Las Vegas Strip decreased 2%, although Bellagio and MGM Grand showed improvement, the company said. Occupancy levels slipped to 93% from 94% while the average daily rate fell a dollar to $110. "The Las Vegas operating environment remains difficult, but as we expected, we are seeing a gradual recovery," Chief Executive Officer Jim Murren said in a statement.

    Some of MGM's losses in Las Vegas were offset by its joint venture in Macau with Pansy Ho. MGM Macau earned $40 million, compared with a loss of $8 million last year

    Outside of Vegas, MGM said last week that it agreed to sell land from its Borgata hotel in Atlantic City for $73 million to Vornado Realty Trust and Geyser Holdings. The Borgata land, which is co-owned with Boyd Gaming(BYD), is about 11.3 acres, which would translate into about $6.5 million per acre.

    The transaction still needs to be approved by New Jersey regulators, and is expected to close by the fourth quarter. Once this transaction is complete, MGM will still own about 85 acres of developable land in Atlantic City.

    Earlier in the year, MGM said it planned t! o divest its 50% stake in the Atlantic City casino, which is currently in trust. The casino operator is still in talks with potential buyers of Borgata casino, and hotel and investors will be waiting for an update on its progress when second-quarter earnings are released.

    "We view this [deal] as a very modest positive in that there are still buyers of Atlantic City assets out there, at least at the right price," J.P. Morgan analyst Joseph Greff wrote in a note. "We don't necessarily interpret [the] news as any indication that MGM is closer to selling its 50% stake in Borgata."

  • [By Hawkinvest]

    MGM Resorts International (MGM) is one of the world's largest hotel and casino companies, based in Las Vegas. Since December, MGM shares have been trading in a range of about $9, to almost $15 per share. The stock is now at the upper limit of the recent trading range which means that the risk of holding or buying this stock right now, could be elevated. MGM shares have rallied with the markets but appear extended and vulnerable to a sell-off. The company has a heavy debt load and it has been reporting losses. The balance sheet has about $13.45 billion in debt and only about $1.97 billion in cash. MGM could be impacted by higher oil prices because many consumers could cut back on spending if they go to Las Vegas, and some might decide not to go at all, and instead opt for a "staycation." With MGM facing challenges and the shares near recent highs, it could make sen se to sell now and buy on dips later this year.

    Here are some key points for MGM:

    Current share price: $14.18

    The 52 week range is $7.40 to $16.05

    Earnings estimates for 2011: a loss of 53 cents per share

    Earnings estimates for 2012: a loss of 39 cents per share

    Annual dividend: none

Top 10 Casino Stocks To Watch For 2014: Boyd Gaming Corporation(BYD)

Boyd Gaming Corporation, together with its subsidiaries, operates as a multi-jurisdictional gaming company in the United States. As of December 31, 2011, the company owned and operated 1,042,787 square feet of casino space, containing approximately 25,973 slot machines, 655 table games, and 11,418 hotel rooms. It also owned and operated 16 gaming entertainment properties located in Nevada, Illinois, Louisiana, Mississippi, Indiana, and New Jersey. In addition, the company owns and operates a pari-mutuel jai-alai facility located in Dania Beach, Florida, as well as a travel agency in Hawaii. Further, it holds a 50% controlling interest in the limited liability company that operates Borgata Hotel Casino and Spa in Atlantic City, New Jersey. Boyd Gaming Corporation was founded in 1988 and is headquartered in Las Vegas, Nevada.

Advisors' Opinion:
  • [By Hesler]

    Boyd Gaming(BYD) posted a bigger-than-expected drop in its second-quarter earnings, citing weak performance in Las Vegas, the Midwest and the South.

    During the quarter, the casino operator earned $3.4 million, or 4 cents a share, a 73% plunge from $12.8 million, or 15 cents, in the year-ago period. Adjusted earnings came in at 5 cents a share, significantly lower than the 10 cents Wall Street predicted for Boyd.

    Boyd's revenue fell 6% to $578.4 million, also short of the consensus of $588 million.

    "The lingering effects of the recession have left consumers unusually sensitive to shifts in the economy, and they now react more quickly to economic data and other developments, such as fluctuations in the stock market," said CEO Keith Smith, in a statement. "Although conditions remain uncertain, we believe long-term stabilizing trends are still in place, and that year-over-year growth is achievable by the end of 2010."

    In the Las Vegas locals market, the rate of decline in earnings before interest, taxes, depreciation and amortization rose to 16.2% from 10.8%, J.P. Morgan analyst Joseph Greff wrote in a note. Boyd previously reported a 9.9% decline for its Borgata property in Atlantic City. Revenue came in at $186.9 million, a 2.4% decrease from the year-ago period.

    "We think second-quarter results are less important than the coming operating results in the second-half of 2010, when the Atlantic City market faces increased regional competitive pressures from tables in Pennsylvania and West Virginia and the first Philadelphia casino opens this summer," J.P. Morgan analyst Joseph Greff wrote in a note.

    Greff reaffirmed his underweight rating on Boyd, given increasing competition in Atlantic City, a weak recovery in the Las Vegas locals market and stagnant regional gaming trends.

    While there is no doubt the Atlantic City gaming market remains one of the most depressed, Borgata continues to dominate the market and gain share. Atlant! ic City saw gaming revenues plunge 11.1% in June to $286.8 million. Boyd co-owns Borgata with MGM Resorts, which is currently in the process of divesting its 50% stake.

  • [By Jeanine Poggi]

    The Las Vegas locals and Atlantic City markets have the longest road to recovery, making Boyd Gaming (BYD) one of the most challenged stocks in the sector long-term.

    It's not a surprise then that Boyd saw some of the most muted gains in 2010, with shares rising just 13.8% since the beginning of the year.

    In Atlantic City, where Boyd owns a 50% stake in the Borgata, gambling revenue plunged 13% in November. The New Jersey Boardwalk has been under pressure even before the recession began, as nearby regions expand their gaming presence.

    Both West Virginia and Pennsylvania added table games to casinos in the second half of the year and new properties opened in Philadelphia and Maryland. In 2011, Atlantic City will also have to contend with additional growth in Pennsylvania and the pending opening of the Aqueduct in New York City.

    Given this, Boyd decided not to exercise its right to match a $250 million offer MGM Resorts(MGM) received for its 50% stake in the Borgata. MGM decided to divest its joint venture with Boyd after the Atlantic City Gaming Commission criticized its relationship with Pansy Ho in Macau, whose family has allegedly been tied to organized crime in China.

    In the Las Vegas locals market, where Boyd generates about 44% of its EBITDA, trends are improving, but not as quickly as analysts would have hoped. In October, gaming revenue in the market grew 6.2% to $169.4 million.

    In its third quarter, Boyd disappointed Wall Street, with adjusted earnings coming in at 2 cents a share, shy of consensus estimates of 5 cents. Revenue dropped 4% to $595.4 million.

    Boyd also announced plans to sell $500 million of eight-year notes. Proceeds will be used to buy back senior subordinated notes due 2012 and to repay bank loans.

Top 10 Casino Stocks To Watch For 2014: Penn National Gaming Inc.(PENN)

Penn National Gaming, Inc. and its subsidiaries own and manage gaming and pari-mutuel properties in the United States. It operates approximately 27,000 gaming machines; 500 table games; and 2,000 hotel rooms in 23 facilities in 16 jurisdictions, including Colorado, Florida, Illinois, Indiana, Iowa, Louisiana, Maine, Maryland, Mississippi, Missouri, New Jersey, New Mexico, Ohio, Pennsylvania, West Virginia, and Ontario. The company was formerly known as PNRC Corp. and changed its name to Penn National Gaming, Inc. in 1994. Penn National Gaming, Inc. was founded in 1982 and is based in Wyomissing, Pennsylvania.

Advisors' Opinion:
  • [By Quickel]

    Penn National Gaming(PENN) squeaked past its guidance through improved cost controls, and investors praised its efforts.

    But expectations were low, and its upbeat outlook shouldn't be viewed as a message that regional markets are recovering. "Going forward, we project soft regional gaming revenue results over the next three to six months, as we do not expect to see a significant increase in consumer spending patterns given the uncertain economic environment," J.P. Morgan analyst Joseph Greff wrote in a note.

    Penn National raised its full-year earnings guidance to $1.18 from $1.13 a share, and up its revenue outlook by $26 million to $2.44 billion from $2.41 billion.

    During the second quarter, the company earned $9.2 million, or 9 cents a share, compared with $28.5 million, or 27 cents, in the year-ago period. Excluding items, Penn actually earned 29 cents a share, a penny higher than estimates.

    Revenue rose 3% to $598.3 million, higher than the $597.1 million Wall Street projected. The upside was driven by both better revenues and margins and was generally broad-based across many properties, especially larger venues in Charlestown, Lawrenceburg and Grantville, Pa.

    Penn National rolled out table games in West Virginia and Pennsylvania during the quarter, which should be a growth catalyst moving forward. The company also plans to open a slot facility in Maryland on Sept. 30 and expects its Toldeo, Ohio, location to open in the first-half of 2012. Its Columbus project is slated to open in the second-half of 2012.

    The company repurchased 409,000 shares during the quarter. "[This] sends a message to investors on the value of its equity, but perhaps indicating the lack of near-term acquisition opportunities," J.P. Morgan analyst Joseph Greff wrote in a note.

Saturday, July 20, 2013

Hot Undervalued Stocks To Invest In Right Now

Shares of Monster Beverage (NASDAQ: MNST  ) rose nearly 5% Monday after the company's board of directors approved a $200 million share repurchase program. As management stated recently, the company had already used every penny of the $250 million it authorized for share repurchases less than five months ago, so it looks like they were just itching to continue increasing shareholders' slice of the pie.

Even so, I suppose this latest authorization shouldn't have come as much of a surprise considering the company managed to spend more than $737 million in 2012, buying back shares at an average price of $54.47 per share -- or about 3% below yesterday's closing price.

Does it make sense?
Okay, we get it; the folks at Monster are trying to send investors a not-so-subtle message that they think their stock is undervalued.

Hot Undervalued Stocks To Invest In Right Now: Tupperware Corporation(TUP)

Tupperware Brands Corporation operates as a direct seller of various products across a range of brands and categories through an independent sales force. The company engages in the manufacture and sale of kitchen and home products, and beauty and personal care products. It offers preparation, storage, and serving solutions for the kitchen and home, as well as kitchen cookware and tools, children?s educational toys, microwave products, and gifts under the Tupperware brand name primarily in Europe, Africa, the Middle East, the Asia Pacific, and North America. The company provides beauty and personal care products, which include skin care products, cosmetics, bath and body care, toiletries, fragrances, nutritional products, apparel, and related products principally in Mexico, South Africa, the Philippines, Australia, and Uruguay. It offers beauty and personal care products under the Armand Dupree, Avroy Shlain, BeautiControl, Fuller, NaturCare, Nutrimetics, Nuvo, and Swissgar de brand names. The company sells its Tupperware products directly to distributors, directors, managers, and dealers; and beauty products primarily through consultants and directors. As of December 26, 2009, the Tupperware distribution system had approximately 1,800 distributors, 61,300 managers, and 1.3 million dealers; and the sales force representing the Beauty businesses approximately 1.1 million. The company was formerly known as Tupperware Corporation and changed its name to Tupperware Brands Corporation in December 2005. The company was founded in 1996 and is headquartered in Orlando, Florida.

Advisors' Opinion:
  • [By Sam Collins]

    Household name Tupperware Brands Corp. (NYSE:TUP) is a global direct seller of products with multiple brands through an independent sales force of 2.4 million people. Its product line focuses on kitchen storage and serving solutions, as well as personal-care products. Over 60% of sales in 2011 are expected to come from Europe and Asia, and the stock has appeal as an emerging markets story.

    S&P estimates that 2011 earnings will increase to $4.54 versus $3.53 in 2010, and it increased its rating to a “five-star strong buy” with a recently revised 12-month target of $81, up from $73. The 2005 purchase of Sara Lee’s (NYSE:SLE) direct-sales business, which has a high growth rate, should be a long-term benefit. TUP’s annual dividend yield is 1.92%.

    Technically TUP had a pullback following a new high at over $70 and is currently oversold. Buy TUP at the current market price with a trading target of $70, but longer term a much higher target will likely be attained.

Hot Undervalued Stocks To Invest In Right Now: Dollar Tree Inc.(DLTR)

Dollar Tree, Inc. operates discount variety stores in the United States and Canada. Its stores offer merchandise primarily at the fixed price of $1.00. The company operates its stores under the names of Dollar Tree, Deal$, Dollar Tree Deal$, Dollar Giant, and Dollar Bills. Its stores offer consumable merchandise, including candy and food, and health and beauty care, as well as household consumables, such as paper, plastics, household chemicals, in select stores, and frozen and refrigerated food; variety merchandise, which includes toys, durable housewares, gifts, party goods, greeting cards, softlines, and other items; and seasonal goods, such as Easter, Halloween, and Christmas merchandise. As of April 30, 2011, it operated 4,089 stores in 48 states and the District of Columbia, as well as 88 stores in Canada. The company was founded in 1986 and is based in Chesapeake, Virginia.

Advisors' Opinion:
  • [By Sam Collins]

    Dollar Tree (NASDAQ:DLTR) is a leading operator of discount variety stores. The stock has hugged its 50-day moving average since mid-February. But a recent minor revision of earnings for this year by several analysts and the recent market sell-off have resulted in a fall from its high of the year at over $70 to under $66. However, Goldman Sachs (NYSE:GS) increased its price target to $73 from $69.

    Technically DLTR is oversold, according to MACD. A break below its 50-day moving average could result in a pullback to $64, but positions could be taken at the current market price. The trading target for DLTR is $72.

5 Best Stocks For 2014: Schlumberger N.V.(SLB)

Schlumberger Limited, together with its subsidiaries, supplies technology, integrated project management, and information solutions to the oil and gas exploration and production industries worldwide. The company?s Oilfield Services segment provides exploration and production services; wireline technology that offers open-hole and cased-hole services; supplies engineering support, directional-drilling, measurement-while-drilling, and logging-while-drilling services; and testing services. This segment also offers well services; supplies well completion services and equipment; artificial lift; data and consulting services; geo services; and information solutions, such as consulting, software, information management system, and IT infrastructure services that support oil and gas industry. Its WesternGeco segment provides reservoir imaging, monitoring, and development services; and operates data processing centers and multiclient seismic library. This segment also offers variou s services include 3D and time-lapse (4D) seismic surveys to multi-component surveys for delineating prospects and reservoir management. The company?s M-I SWACO segment supplies drilling fluid systems to improve drilling performance; fluid systems and specialty tools to optimize wellbore productivity; production technology solutions to maximize production rates; and environmental solutions that manages waste volumes generated in drilling and production operations. Its Smith Oilfield segment designs, manufactures, and markets drill bits and borehole enlargement tools; and supplies drilling tools and services, tubular, completion services, and other related downhole solutions. The company?s Distribution segment markets pipes, valves, and fittings, as well as mill, safety, and other maintenance products. This segment also provides warehouse management, vendor integration, and inventory management services. Schlumberger Limited was founded in 1927 and is based in Houston, Texas.

Advisors' Opinion:
  • [By Robert Holmes]

     Schlumberger has the most potential upside of any stock in this group of 50 that also makes the firm's Best Ideas list. Analyst Ole Slorer says Schlumberger has "what we consider the most advanced technology portfolio in the industry."

    "Its fundamentals are impressive, with what we think are some of the best field personnel, a pristine service and performance reputation, and leading market share in most of its product lines," Slorer writes.

    Though Slorer's price target is 42% above current levels, his most bullish scenario for Schlumberger over the next year would see shares climb a whopping 116%. On the downside, his most bearish scenario for the company would see shares slide 38% over the next 12 months.

  • [By Dave Friedman]

    Institutional investors bought 66,328,670 shares and sold 64,611,410 shares, for a net of 1,717,260 shares. This net represents 0.14% of common shares outstanding. The number of shares outstanding is 1,250,000,000. The shares recently traded at $74.84 and the company’s market capitalization is $100,986,600,000.00. About the company: Schlumberger Limited is an oil services company. The Company, through its subsidiaries, provides a wide range of services, including technology, project management and information solutions to the international petroleum industry as well as advanced acquisition and data processing surveys.

Hot Undervalued Stocks To Invest In Right Now: Caterpillar Inc.(CAT)

Caterpillar Inc. manufactures and sells construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives worldwide. It operates through three lines of businesses: Machinery, Engines, and Financial Products. The Machinery business offers construction, mining, and forestry machinery, including track and wheel tractors, track and wheel loaders, pipelayers, motor graders, wheel tractor-scrapers, track and wheel excavators, backhoe loaders, log skidders, log loaders, off-highway trucks, articulated trucks, paving products, skid steer loaders, underground mining equipment, tunnel boring equipment, and related parts. It also manufactures diesel-electric locomotives; and manufactures and services rail-related products and logistics services for other companies. The Engines business provides diesel, heavy fuel, and natural gas reciprocating engines for Caterpillar machinery, electric power generation systems, marine, petrol eum, construction, industrial, agricultural, and other applications. It offers industrial turbines and turbine-related services for oil and gas, and power generation applications. This business also remanufactures Caterpillar engines, machines, and engine components; and offers remanufacturing services for other companies. The Financial Products business provides retail and wholesale financing alternatives for Caterpillar machinery and engines, solar gas turbines, and other equipment and marine vessels, as well as offers loans and various forms of insurance to customers and dealers. It also offers financing for vehicles, power generation facilities, and marine vessels. The company markets its products directly, as well as through its distribution centers, dealers, and distributors. It was formerly known as Caterpillar Tractor Co. and changed its name to Caterpillar Inc. in 1986. Caterpillar Inc. was founded in 1925 and is headquartered in Peoria, Illinois.

Advisors' Opinion:
  • [By Jim Cramer]

    this stock could be a monster in 2011, especially with the integration of Bucyrus (BUCY), which I think will turn out to be a fantastic acquisition. Estimates, currently showing EPS at about $6, I think are way, way too low. I see this stock going to $120 in the next year. Too gutsy? Ask yourself what happens if the United States comes back as a growth nation. Right now almost all of the growth is overseas. Still a fantastic mineral play and a terrific call on world growth.

Friday, July 19, 2013

5 Best Value Stocks To Buy For 2014

In May 2013, the trailing twelve month average of median new home sale prices in the U.S. continued to inflate, reaching an initial value of $253,033. This marks the fourth consecutive month in which a new record has been set for this particular statistic, which has risen by $2,058 from the previous month's figure.

Meanwhile, the trailing twelve month average of median household income for May 2013 has come in at $51,351, rising by $50 from the figure recorded in April 2013. This value is still short of the record of $51,444 set for this statistic in December 2008, just before the large scale losses of high paying jobs in the U.S. automotive industry took place. [Prior to December 2008, job losses for the recession starting in December 2007 were concentrated among positions that were typically held by young adults and teenagers, where increases in the federal minimum wage in 2007 and 2008 were primarily responsible for the seemingly permanent elimination of hundreds of thousands of these low-income earning positions.]

5 Best Value Stocks To Buy For 2014: Schlumberger N.V.(SLB)

Schlumberger Limited, together with its subsidiaries, supplies technology, integrated project management, and information solutions to the oil and gas exploration and production industries worldwide. The company?s Oilfield Services segment provides exploration and production services; wireline technology that offers open-hole and cased-hole services; supplies engineering support, directional-drilling, measurement-while-drilling, and logging-while-drilling services; and testing services. This segment also offers well services; supplies well completion services and equipment; artificial lift; data and consulting services; geo services; and information solutions, such as consulting, software, information management system, and IT infrastructure services that support oil and gas industry. Its WesternGeco segment provides reservoir imaging, monitoring, and development services; and operates data processing centers and multiclient seismic library. This segment also offers variou s services include 3D and time-lapse (4D) seismic surveys to multi-component surveys for delineating prospects and reservoir management. The company?s M-I SWACO segment supplies drilling fluid systems to improve drilling performance; fluid systems and specialty tools to optimize wellbore productivity; production technology solutions to maximize production rates; and environmental solutions that manages waste volumes generated in drilling and production operations. Its Smith Oilfield segment designs, manufactures, and markets drill bits and borehole enlargement tools; and supplies drilling tools and services, tubular, completion services, and other related downhole solutions. The company?s Distribution segment markets pipes, valves, and fittings, as well as mill, safety, and other maintenance products. This segment also provides warehouse management, vendor integration, and inventory management services. Schlumberger Limited was founded in 1927 and is based in Houston, Texas.

Advisors' Opinion:
  • [By Dug]

    Schlumberger(SLB) continues to lead the sector, particularly outside the U.S. in the growing markets for vertical drilling. Schlumberger remains my favorite. Another smaller company to look at with growing work in complex procedures is Helmerich & Payne(HP).

  • [By Lowell]

    Schlumberger (NYSE:SLB) is a premier supplier of technology and oil-well services and equipment. S&P has upgraded SLB to a “buy,” and Credit Suisse upgraded it to an “outperform” rating because the company exceeded recent earnings forecasts and increased its view of future earnings for 2011. SLB’s fundamental target is $117 and is based on earnings estimates of $3.85 for 2011, $5.40 for 2012, and $6.05 for 2013.

    Technically SLB may become the object of profit-taking following a recent run to over $95. Positions are recommended at around $85 with a target of $115 before December 2011, assuming a breakout through a triple-top at $95.

  • [By Rebecca Lipman]

     Together with its subsidiaries, supplies technology, integrated project management, and information solutions to the oil and gas exploration and production industries worldwide. Market cap of $91.49B. EPS growth (5-year CAGR) at 24%. According to Morgan Stanley: "Thanks to an estimated $1 billion investment per year in R&D, Schlumberger has what we consider the most advanced technology portfolio in the industry."

5 Best Value Stocks To Buy For 2014: Dollar Tree Inc.(DLTR)

Dollar Tree, Inc. operates discount variety stores in the United States and Canada. Its stores offer merchandise primarily at the fixed price of $1.00. The company operates its stores under the names of Dollar Tree, Deal$, Dollar Tree Deal$, Dollar Giant, and Dollar Bills. Its stores offer consumable merchandise, including candy and food, and health and beauty care, as well as household consumables, such as paper, plastics, household chemicals, in select stores, and frozen and refrigerated food; variety merchandise, which includes toys, durable housewares, gifts, party goods, greeting cards, softlines, and other items; and seasonal goods, such as Easter, Halloween, and Christmas merchandise. As of April 30, 2011, it operated 4,089 stores in 48 states and the District of Columbia, as well as 88 stores in Canada. The company was founded in 1986 and is based in Chesapeake, Virginia.

Advisors' Opinion:
  • [By Sam Collins]

    Dollar Tree (NASDAQ:DLTR) is a leading operator of discount variety stores. The stock has hugged its 50-day moving average since mid-February. But a recent minor revision of earnings for this year by several analysts and the recent market sell-off have resulted in a fall from its high of the year at over $70 to under $66. However, Goldman Sachs (NYSE:GS) increased its price target to $73 from $69.

    Technically DLTR is oversold, according to MACD. A break below its 50-day moving average could result in a pullback to $64, but positions could be taken at the current market price. The trading target for DLTR is $72.

Top Stocks To Invest In 2014: Tupperware Corporation(TUP)

Tupperware Brands Corporation operates as a direct seller of various products across a range of brands and categories through an independent sales force. The company engages in the manufacture and sale of kitchen and home products, and beauty and personal care products. It offers preparation, storage, and serving solutions for the kitchen and home, as well as kitchen cookware and tools, children?s educational toys, microwave products, and gifts under the Tupperware brand name primarily in Europe, Africa, the Middle East, the Asia Pacific, and North America. The company provides beauty and personal care products, which include skin care products, cosmetics, bath and body care, toiletries, fragrances, nutritional products, apparel, and related products principally in Mexico, South Africa, the Philippines, Australia, and Uruguay. It offers beauty and personal care products under the Armand Dupree, Avroy Shlain, BeautiControl, Fuller, NaturCare, Nutrimetics, Nuvo, and Swissgar de brand names. The company sells its Tupperware products directly to distributors, directors, managers, and dealers; and beauty products primarily through consultants and directors. As of December 26, 2009, the Tupperware distribution system had approximately 1,800 distributors, 61,300 managers, and 1.3 million dealers; and the sales force representing the Beauty businesses approximately 1.1 million. The company was formerly known as Tupperware Corporation and changed its name to Tupperware Brands Corporation in December 2005. The company was founded in 1996 and is headquartered in Orlando, Florida.

Advisors' Opinion:
  • [By Sam Collins]

    Household name Tupperware Brands Corp. (NYSE:TUP) is a global direct seller of products with multiple brands through an independent sales force of 2.4 million people. Its product line focuses on kitchen storage and serving solutions, as well as personal-care products. Over 60% of sales in 2011 are expected to come from Europe and Asia, and the stock has appeal as an emerging markets story.

    S&P estimates that 2011 earnings will increase to $4.54 versus $3.53 in 2010, and it increased its rating to a “five-star strong buy” with a recently revised 12-month target of $81, up from $73. The 2005 purchase of Sara Lee’s (NYSE:SLE) direct-sales business, which has a high growth rate, should be a long-term benefit. TUP’s annual dividend yield is 1.92%.

    Technically TUP had a pullback following a new high at over $70 and is currently oversold. Buy TUP at the current market price with a trading target of $70, but longer term a much higher target will likely be attained.

5 Best Value Stocks To Buy For 2014: Caterpillar Inc.(CAT)

Caterpillar Inc. manufactures and sells construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives worldwide. It operates through three lines of businesses: Machinery, Engines, and Financial Products. The Machinery business offers construction, mining, and forestry machinery, including track and wheel tractors, track and wheel loaders, pipelayers, motor graders, wheel tractor-scrapers, track and wheel excavators, backhoe loaders, log skidders, log loaders, off-highway trucks, articulated trucks, paving products, skid steer loaders, underground mining equipment, tunnel boring equipment, and related parts. It also manufactures diesel-electric locomotives; and manufactures and services rail-related products and logistics services for other companies. The Engines business provides diesel, heavy fuel, and natural gas reciprocating engines for Caterpillar machinery, electric power generation systems, marine, petrol eum, construction, industrial, agricultural, and other applications. It offers industrial turbines and turbine-related services for oil and gas, and power generation applications. This business also remanufactures Caterpillar engines, machines, and engine components; and offers remanufacturing services for other companies. The Financial Products business provides retail and wholesale financing alternatives for Caterpillar machinery and engines, solar gas turbines, and other equipment and marine vessels, as well as offers loans and various forms of insurance to customers and dealers. It also offers financing for vehicles, power generation facilities, and marine vessels. The company markets its products directly, as well as through its distribution centers, dealers, and distributors. It was formerly known as Caterpillar Tractor Co. and changed its name to Caterpillar Inc. in 1986. Caterpillar Inc. was founded in 1925 and is headquartered in Peoria, Illinois.

Advisors' Opinion:
  • [By Dave Friedman]

    The shares closed at $91.37, up $1.56, or 1.74%, on the day. They have traded in a 52-week range of $63.34 to $116.55. Volume today was 10,450,473 shares, against a 3-month average volume of 9,960,260 shares. Its market capitalization is $59.03billion, its trailing P/E is 15.11, its trailing earnings are $6.05 per share, and it pays a dividend of $1.84 per share, for a dividend yield of 2.00%. About the company: Caterpillar Inc. designs, manufactures, and markets construction, mining, agricultural, and forestry machinery. The Company also manufactures engines and other related parts for its equipment, and offers financing and insurance. Caterpillar distributes its products through a worldwide organization of dealers.

  • [By Jim Cramer,TheStreet]

    Caterpillar (CAT) could be a monster in 2011, especially with the integration of Bucyrus International (BUCY), which I think will turn out to be a fantastic acquisition.

    Current earnings-per-share estimates of about $6 are, I think, way too low. I see this stock going to $120 in the next year. Too gutsy? Ask yourself what happens if the United States comes back as a growth nation? Right now almost all of the growth is overseas.

    Still a fantastic mineral play and a terrific call on world growth.

  • [By Roberto Pedone]

    Caterpillar (CAT) is staging a textbook breakout in May. Shares of heavy equipment maker haven't exactly been kind to investors year-to-date; CAT has barely broken even during a time when the broad market has been in a historic rally. But a textbook breakout should change that.

    CAT started forming an inverse head and shoulders pattern back in early April. The inverse head and shoulders is formed by two swing lows that bottom out around the same level (the shoulders), separated by a lower low called the head; the buy signal comes on the breakout above the pattern's "neckline" level, which was just below $86 for CAT. That puts this stock's upside target right around $92.

    Even though CAT has nearly hit its upside target already (the post-breakout buying has been very quick), the longer-term implication for investors is a break of the downtrend that had been haranguing shares this year. Now, with that downtrend broken, CAT should have more room to move higher. I'd just expect some consolidation first.