Friday, January 31, 2014

Top 10 Blue Chip Companies To Watch For 2015

LONDON -- Global premium-drinks company Diageo (LSE: DGE  ) (NYSE: DEO  ) has been a stellar investment over the years. Does this big blue chip have much further to rise, or are its growth days over? Let's have a look.

Track record
Diageo has delivered a storming performance for investors. In the last year, its shares have risen 30%. In the last five years, the shares have doubled. However, there are signs that this huge outperformance may be over. In the last three months, shares in this super-brewer have trailed the FTSE 100. While the FTSE is up 3.9%, Diageo is only 1.1% ahead.

What cannot be in doubt is Diageo's quality as a company. Shareholder dividends have been increasing every year since 1998. In fact, the payout is up nearly fourfold in that time. Sales and earnings per share have also increased year on year for the last five years. Diageo is one of the U.K.'s most successful companies.

Go back two years, and Diageo shares were trading around 1,300 pence. The company had just completed a year in which it earned 68.3 pence per share and declared a dividend of 38.1 pence. That put the shares on a historic price-to-earnings ratio of 19 and a past yield of 2.9%. In May 2011, shares in Diageo traded at 15.7 times the full-year EPS. The 2011 dividend equated to a 3.1% yield.

Top 10 Blue Chip Companies To Watch For 2015: Apple Inc.(AAPL)

Apple Inc., together with subsidiaries, designs, manufactures, and markets personal computers, mobile communication and media devices, and portable digital music players, as well as sells related software, services, peripherals, networking solutions, and third-party digital content and applications worldwide. The company sells its products worldwide through its online stores, retail stores, direct sales force, third-party wholesalers, resellers, and value-added resellers. In addition, it sells third-party Mac, iPhone, iPad, and iPod compatible products, including application software, printers, storage devices, speakers, headphones, and other accessories and peripherals through its online and retail stores; and digital content and applications through the iTunes Store. The company sells its products to consumer, small and mid-sized business, education, enterprise, government, and creative markets. As of September 25, 2010, it had 317 retail stores, including 233 stores in the United States and 84 stores internationally. The company, formerly known as Apple Computer, Inc., was founded in 1976 and is headquartered in Cupertino, California.

Advisors' Opinion:
  • [By Mark Hulbert]

    For comparability between companies of different sizes, Prof. Novy-Marx divides gross profits by total assets. Take Apple (AAPL) �, whose total sales in fiscal 2012 were $156 billion, versus $88 billion in cost of goods, for a gross profit of $68 billion. When divided by its total assets of $176 billion, the company�� gross profitability percentage is 39%.

  • [By Joe Tenebruso]

    Continued dominance in PC processor technology
    Intel bears will point out the threat of vertical integration among Intel's major partners such as Apple (NASDAQ: AAPL  ) , whose new A7 chip has met with rave reviews. While it's true that Apple's A7 chip is quite impressive, it's designed for mobile devices that typically prioritize power efficiency over raw computing power. For desktop workstations and many high-end laptops geared for business users and creative professionals, processing speed and power are of paramount importance -- and that is where Intel excels. Furthermore, Intel's new chips in the ultra-mobile laptop computing segment have been credited with the huge leap in battery life for products such as Apple's recently updated MacBook Air. That's why I believe it's unlikely that Apple will move toward using its in-house designed chips across its entire product line. Instead, I think a partnership between these two tech titans is more likely, with Intel eventually building Apple's in-house designed chips for iOS devices and continuing to supply Apple with Intel-designed processors for its Macs.

  • [By Andrew Tonner]

    Faith in tech giant Apple (NASDAQ: AAPL  ) , while not at an all-time low, is down considerably from last year. And as should come as no surprise, its share price has followed its sinking public sentiment. Especially as rivals like Samsung and Google (NASDAQ: GOOG  ) take aim at areas Apple alone once dominated, the future seems less certain for Apple than it has for some time. Given all the pain its investors have endured over the last year, is it finally time to admit that Apple's lost its mojo? In this edition of our Ask a Fool series, Fool contributor Andrew Tonner explains why he still believes Apple has plenty of room to run.

Top 10 Blue Chip Companies To Watch For 2015: Chevron Corporation(CVX)

Chevron Corporation, through its subsidiaries, engages in petroleum, chemicals, mining, power generation, and energy operations worldwide. It operates in two segments, Upstream and Downstream. The Upstream segment involves in the exploration, development, and production of crude oil and natural gas; processing, liquefaction, transportation, and regasification associated with liquefied natural gas; transportation of crude oil through pipelines; and transportation, storage, and marketing of natural gas, as well as holds interest in a gas-to-liquids project. The Downstream segment engages in the refining of crude oil into petroleum products; marketing of crude oil and refined products primarily under the Chevron, Texaco, and Caltex brand names; transportation of crude oil and refined products by pipeline, marine vessel, motor equipment, and rail car; and manufacture and marketing of commodity petrochemicals, plastics for industrial uses, and fuel and lubricant additives. It a lso produces and markets coal and molybdenum; and holds interests in 13 power assets with a total operating capacity of approximately 3,100 megawatts, as well as involves in cash management and debt financing activities, insurance operations, real estate activities, energy services, and alternative fuels and technology business. Chevron Corporation has a joint venture agreement with China National Petroleum Corporation. The company was formerly known as ChevronTexaco Corp. and changed its name to Chevron Corporation in May 2005. Chevron Corporation was founded in 1879 and is based in San Ramon, California.

Advisors' Opinion:
  • [By David Smith]

    And yesterday I described to Fools why I believe that Chevron (NYSE: CVX  ) constitutes the more compelling of the two remaining U.S.-based major oil and gas companies. My sentiments remain unchanged.

  • [By Kelley Wright]

    Based on this criteria, here are our current Timely Ten selections:

    Chevron Corp. (CVX)��ielding 3.3%

    CVS Caremark (CVS)��ielding 1.6%

    Coca-Cola (KO)��ielding 2.9%

    Baxter International (BAX)��ielding 3.0%

    Walgreen (WAG)��ielding 2.3%

    McDonalds Corp. (MCD)��ielding 3.3%

    PepsiCo (PEP)��ielding 2.8%

    ExxonMobil (XOM)��ielding 2.9%

    Occidental Petroleum (OXY)��ielding 2.7%

    Wal-Mart Stores (WMT)��ielding 2.5%

    Subscribe to Investment Quality Trends here��/P>

Best Safest Companies To Watch In Right Now: International Business Machines Corporation(IBM)

International Business Machines Corporation (IBM) provides information technology (IT) products and services worldwide. Its Global Technology Services segment provides IT infrastructure and business process services, including strategic outsourcing, process, integrated technology, and maintenance services, as well as technology-based support services. The company?s Global Business Services segment offers consulting and systems integration, and application management services. Its Software segment offers middleware and operating systems software, such as WebSphere software to integrate and manage business processes; information management software for database and enterprise content management, information integration, data warehousing, business analytics and intelligence, performance management, and predictive analytics; Tivoli software for identity management, data security, storage management, and datacenter automation; Lotus software for collaboration, messaging, and so cial networking; rational software to support software development for IT and embedded systems; business intelligence software, which provides querying and forecasting tools; SPSS predictive analytics software to predict outcomes and act on that insight; and operating systems software. Its Systems and Technology segment provides computing and storage solutions, including servers, disk and tape storage systems and software, point-of-sale retail systems, and microelectronics. The company?s Global Financing segment provides lease and loan financing to end users and internal clients; commercial financing to dealers and remarketers of IT products; and remanufacturing and remarketing services. It serves financial services, public, industrial, distribution, communications, and general business sectors. The company was formerly known as Computing-Tabulating-Recording Co. and changed its name to International Business Machines Corporation in 1924. IBM was founded in 1910 and is based in Armonk, New York.

Advisors' Opinion:
  • [By Sue Chang]

    IBM (IBM) , also on the Dow, is expected to post fourth-quarter earnings of $5.99 a share. ��e maintain our neutral on IBM ahead of their upcoming earnings results. The risk/reward is more balanced at present stock price levels, but ultimately IBM will need to return to growth to drive stock price appreciation,��Joseph Foresi, an analyst at Janney Capital Markets, said in a note.

  • [By Dan Caplinger]

    Still, the bigger question for Adobe is whether it can keep up its quality in web-content management despite rising levels of competition. Industry analyst Forrester highlighted Adobe's platform as having broad application, but it also noted the efforts that Oracle, Hewlett-Packard (NYSE: HPQ  ) , and IBM (NYSE: IBM  ) have made in trying to make their digital experiences more appealing. In particular, HP has hinged its turnaround on moving away from commoditized businesses like PCs toward higher-margin software and services, hoping to use its extensive customer base to cross-sell services. Yet both IBM and Oracle have also been moving in the same direction, with IBM particularly having improved its web-content management offerings in order to broaden their appeal not just to the largest corporate customers but also to mid-sized companies as part of IBM's overall goal of building a broader customer base.

  • [By Cheryl Kaften]

    To remain relevant and competitive, current smart grid vendors -- among them ABB (NYSE: ABB  ) , General Electric (NYSE: GE  ) �, IBM� (NYSE: IBM  ) , �and�Siemens� (NYSE: SI  ) --�may have to make market adjustments, including partnerships, acquisitions, and advances of their own.

  • [By Chris Hill]

    Dollar General's (NYSE: DG  ) first-quarter profits rose rose 3%, but the retailer cut guidance for the full year. Business market software maker ExactTarget (NYSE: ET  ) rose more than 50% after (NYSE: CRM  ) agreed to buy the company for more than $2.3 billion. Zynga (NASDAQ: ZNGA  ) held firm after shares tanked on Monday in the wake of the company announcing it's cutting 18% of its staff. And IBM (NYSE: IBM  ) buys a company to better compete in the cloud computing space. In this installment of Investor Beat, our analysts discuss four stocks making big moves.

Top 10 Blue Chip Companies To Watch For 2015: Philip Morris International Inc(PM)

Philip Morris International Inc., through its subsidiaries, engages in the manufacture and sale of cigarettes and other tobacco products in markets outside of the United States. Its international product brand line comprises Marlboro, Merit, Parliament, Virginia Slims, L&M, Chesterfield, Bond Street, Lark, Muratti, Next, Philip Morris, and Red & White. The company also offers its products under the A Mild, Dji Sam Soe, and A Hijau in Indonesia; Diana in Italy; Optima and Apollo-Soyuz in the Russian Federation; Morven Gold in Pakistan; Boston in Colombia; Belmont, Canadian Classics, and Number 7 in Canada; Best and Classic in Serbia; f6 in Germany; Delicados in Mexico; Assos in Greece; and Petra in the Czech Republic and Slovakia. It operates primarily in the European Union, Eastern Europe, the Middle East, Africa, Asia, Canada, and Latin America. The company is based in New York, New York.

Advisors' Opinion:
  • [By Rupert Hargreaves]

    For example, let's take a look at�Philip Morris International (NYSE: PM  ) . Now for the last four quarters, Philip Morris has paid out $3.49 in dividends per share. For the same period, the company has earned $5.28 per share, which gives us a dividend cover of 1.5 times and a payout ratio of 66%.

  • [By Garrett Baldwin]

    As the world's second-largest tobacco company, Philip Morris International (NYSE: PM) is an ideal sin stock.

    And with numbers like these, it's also an ideal way to play global growth...

Top 10 Blue Chip Companies To Watch For 2015: McDonald's Corporation(MCD)

McDonald?s Corporation, together with its subsidiaries, operates as a worldwide foodservice retailer. It franchises and operates McDonald?s restaurants that offer various food items, soft drinks, coffee, and other beverages. As of December 31, 2009, the company operated 32,478 restaurants in 117 countries, of which 26,216 were operated by franchisees; and 6,262 were operated by the company. McDonald?s Corporation was founded in 1948 and is based in Oak Brook, Illinois.

Advisors' Opinion:
  • [By Rich Duprey]

    Burger joint McDonald's (NYSE: MCD  ) announced today that global same-store sales rose 2.6% in May, with the best results in its major segments seen in the U.S., where comps rose 2.4%. Total company sales were�3.6% higher, or up 5.2% in constant currency.

  • [By Jessica Alling]

    Other earnings
    McDonald's (NYSE: MCD  ) is also down in trading this morning after reporting lighter sales in many of its territories. Asia was the weakest geographical region, with lower sales in Japan and negative results in China. Overall revenue was up 1% and earnings were flat at $1.3 billion for Mickey D's, but the company still reported a 2% increase in EPS, though the $1.26 per share missed expectations by a penny. The fast-food chain is contending with some difficult comparisons to a strong period in 2012, making its results look weaker. The stock is down 1.84% as of this writing, with investors concerned about continued impacts of international economic headwinds and tougher outlooks for the coming quarters.

  • [By Dan Caplinger]

    So far, consumer-facing stocks have seen only limited impact from the Chinese growth slowdown. McDonald's (NYSE: MCD  ) and other fast-food companies have suffered from the avian-flu outbreak and its consequent impact on restaurant volume, especially at chains that sell a substantial amount of chicken-based products. If the Chinese economy falters enough to threaten the rise of the nation's luxury and middle-class consumers, however, then a much wider range of U.S. and other foreign companies could start to see more direct effects. That in turn could pose a much larger direct threat to the Dow and U.S. stocks in general.

  • [By BubbleBustInvesting]

    It is hard to say. What we can say, however, is that Starbucks is a good bet for value investors, as is McDonald's (MCD) which reported Q1 earnings last week, while Panera Bread and Dunkin' Brands are better bets for growth investors.

Top 10 Blue Chip Companies To Watch For 2015: Colgate-Palmolive Company(CL)

Colgate-Palmolive Company, together with its subsidiaries, manufactures and markets consumer products worldwide. It offers oral care products, including toothpaste, toothbrushes, and mouth rinses, as well as dental floss and pharmaceutical products for dentists and other oral health professionals; personal care products, such as liquid hand soap, shower gels, bar soaps, deodorants, antiperspirants, shampoos, and conditioners; and home care products comprising laundry and dishwashing detergents, fabric conditioners, household cleaners, bleaches, dishwashing liquids, and oil soaps. The company offers its oral, personal, and home care products under the Colgate Total, Colgate Max Fresh, Colgate 360 Advisors' Opinion:

  • [By Dividends4Life]

    Memberships and Peers: KMB is a member of the S&P 500, a Dividend Aristocrat, a member of the Broad Dividend Achievers��Index and a Dividend Champion. The company's peer group includes: The company's peer group includes: Procter & Gamble Co. (PG) with a 3.1% yield, Colgate-Palmolive Co. (CL) with a 2.3% yield, and Clorox Corporation (CLX) with a 3.4% yield.

Top 10 Blue Chip Companies To Watch For 2015: Visa Inc.(V)

Visa Inc., a payments technology company, engages in the operation of retail electronic payments network worldwide. It facilitates commerce through the transfer of value and information among financial institutions, merchants, consumers, businesses, and government entities. The company owns and operates VisaNet, a global processing platform that provides transaction processing services. It also offers a range of payments platforms, which enable credit, charge, deferred debit, debit, and prepaid payments, as well as cash access for consumers, businesses, and government entities. The company provides its payment platforms under the Visa, Visa Electron, PLUS, and Interlink brand names. In addition, it offers value-added services, including risk management, issuer processing, loyalty, dispute management, value-added information, and CyberSource-branded services. The company is headquartered in San Francisco, California.

Advisors' Opinion:
  • [By Selena Maranjian]

    Visa (NYSE: V  ) saw its global brand value surge 46%, to $56 billion. The company is extremely global, operating in more than 200 nations, and it's poised to profit as more and more people and businesses shift from cash transactions to electronic ones. Its presence in emerging markets is also a good thing to see among stock picks, as such economies are growing rapidly -- and for Visa, that means more people beginning to use plastic for purchases. Meanwhile, our recovering economy is leading to an uptick in credit payments. The fast-growing company's forward P/E is 21, well below its five-year average of 41. Visa is far bigger than its rivals, although�MasterCard�is doing particularly well globally.

  • [By Associated Press]

    NEW YORK (AP) -- The National Retail Federation on Tuesday urged a federal judge to reject a proposed $7.2 billion settlement with Visa (NYSE: V  ) and MasterCard (NYSE: MA  ) over alleged fee-fixing.

Thursday, January 30, 2014

Benzinga's Top #PreMarket Gainers

Top 10 Cheap Companies To Invest In Right Now

Ariad Pharmaceuticals (NASDAQ: ARIA) surged 9.76% to $4.16 in the pre-market session. Sarissa Capital Management LP has taken a 6.22% stake in Ariad Pharmaceuticals.

Buffalo Wild Wings (NASDAQ: BWLD) shares jumped 8.86% to $140.98 in pre-market trading after the company reported upbeat third-quarter results.

Baidu (NASDAQ: BIDU) shares gained 7.80% to $171.85 in the pre-market session after the company reported higher Q3 profit. Brean Capital upgraded the stock from Hold to Buy.

Electronic Arts (NASDAQ: EA) soared 4.85% to $25.30 in the pre-market trading after the company reported upbeat profit for the fiscal second quarter.

Posted-In: PreMarket GainersNews Pre-Market Outlook Markets Movers

(c) 2013 Benzinga does not provide investment advice. All rights reserved.

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Wednesday, January 29, 2014

Journalism: Alive and kicking, Rieder says

Slowly but surely, eBay founder Pierre Omidyar's ambitious foray into newsgathering is starting to crystallize.

Omidyar's is one of a number of intriguing nascent journalism ventures featuring star performers. But his strikes me as the most exciting, not only because of its scope and funding but also because it seems focused more on actual reporting as well as analysis and interpretation.

Last year, tech billionaire Omidyar passed on buying The Washington Post, deciding instead to invest heavily — as in $250 million heavily — in launching his own digital news outlet. His marquee get was Glenn Greenwald, the crusading journalist/ lawyer who has led the way in coverage of the Edward Snowden saga. And he hired former Rolling Stone executive editor Eric Bates to help figure out precisely what to do and how to do it.

This week Omidyar posted a video that offered a number of tantalizing hints about what he has in mind.

His baby, First Look Media, will include multiple digital publications. The flagship website, to debut later this year, will run the gamut, covering politics, business, sports and entertainment. In addition, First Look will include a "family" of digital magazines, each covering a specific topic.

REM RIEDER; Gearing up for a journalism juggernaut

While the overall goal is a strong diet of public service journalism — the impetus for Omidyar's plunge — it's his view that you need to offer a wide array of material to broaden the audience for your most important work.

Rem Rieder is a media columnist for USA TODAY.(Photo: USA TODAY)

"For me, journalism is about more than just telling stories," he says in the video. "Journalism is about telling stories that make a difference."

While the digital era has brought with it ! enormous pluses — instant access to an extraordinary amount of valuable information and journalism for starters — the collateral damage for traditional journalism has been formidable. Sharply declining ad revenue has forced newspapers to cut back deeply.

One of the cool things about what Omidyar is saying is that he sounds prepared to play big, to do things the right way.

"We'll bring back to journalism what's been lost — the critical but expensive support that's often neglected in the digital age," he says. "In our model, teams of data analysts, fact checkers, visual designers, editors and technologists will work together with writers, reporters and producers to create powerful stories presented in compelling packages."

As for how to make the thing self-sustaining — the overarching challenge for journalism today — Omidyar says he hasn't nailed that one down, but he'll get back to us.

"We don't have all of the answers," he says. "But we're really good at asking questions, and learning from our mistakes."

There was also some news this week about another promising initiative. Stats expert Nate Silver, who achieved rock star status during the 2012 presidential campaign with his dead-on analysis of polls and brought tons of traffic to, created a stir in July when he left the Times for a much-expanded mission at ESPN and ABC News, both owned by the Walt Disney Co.

Best Safest Companies To Watch In Right Now

Silver posted this week that his much-broadened FiveThirtyEight blog will focus on politics, economics, sports, science and lifestyle. He says he's hired 15 "amazing" journalists and is hiring more. Presumably they'll be amazing as well.

Silver says his site will specialize in "data journalism," which he describes as "the application of statistics and other quantitative methods toward issues in the news." But he and his amazing allies also wi! ll challe! nge what they consider the "irresponsible" use of data in statistics in journalism or anywhere else, for that matter.

While all that sounds pretty heavy, Silver, who started out as a baseball stats guy, warns that he and his colleagues will have plenty of fun exploring everything from "baseball to burritos."

This week also marked the beginning of another journalism adventure as Ezra Klein, the brainy Wonkblog policy blogger, announced that he will be leaving The Washington Post to set up his own operation under the aegis of Vox Media.

Klein, who will be joined at his new outfit by two Post colleagues and Slate's Matt Yglesias, says the goal will be to provide critically important context for news developments. "Our mission is to create a site that's as good at explaining the world as it is at reporting on it," Klein wrote at The Verge, a tech website owned by Vox.

Klein had hoped to do something similar at the Post, with a reported eight-figure budget, but was rebuffed by the paper's leadership.

But while Klein's gambit may have been too rich for the Post's blood, the paper, now owned by another tech billionaire, Jeff Bezos, showed that the new media aren't having all the fun.

Post Executive Editor Martin Baron sent a memo to his staff Wednesday proclaiming that 2014 "will be a year of impressive investment in The Washington Post."

Baron says the paper is launching new blogs, expanding its magazine, redesigning its website and creating a new breaking news desk.

There's been no shortage of discouraging news about journalism in recent years. It's great to see exciting signs of life.

Monday, January 27, 2014

J.C. Penney Company, Inc. (JCP): Can JCPenney Sustain Investor Confidence?

Troubled retailer J.C. Penney Company, Inc. (NYSE:JCP) has provided some relief to its investors by saying it saw improved sales trends in September and expects this to continue throughout the remainder of the year. Further, the company expects to end the year with more than $2 billion in cash, sending the stock higher by 7 percent.

The vital question is can JCPenney continue in the same vein and sustain investor confidence amid a tough retail climate and government shutdown.

First things first; the recent equity raise should dilute the fiscal 2014 EPS by about 50 cents. Last week, JCPenney closed a public offering of 84 million shares of common stock that generated approximately $785 million in net cash proceeds.

It may need to raise further cash next year to boost the liquidity, and the skeptics remain concerned about the slower-than-expected recovery in JCPenney's key operational metrics including same store sales, gross margins and cash flow.

Sterne Agee analyst Charles Grom echoed similar thoughts in his client note saying that former CEO Ron Johnson may have permanently turned off the retailer's core customer. Groms downgraded the stock to "hold" from "buy."

The company ended the second quarter with cash and cash equivalents of $1.53 billion and $1.4 billion in untapped liquidity on its revolving line of credit, including the accordion feature.

A series of internal missteps left JCPenney in a more challenged spot near term. Former CEO Ron Johnson's tactics of removing discounts and overhaul the chain's inventory resulted in a $1 billion loss and a 20 percent plus drop in sales in his first full year on the job. No wonder, he was ousted after 17 months..

Now, Myron Ullman, the current Chief Executive Officer of JCPenney, said, reconnecting with its customers and getting them into stores is a top priority for the company.

Gross margins continue to be impacted by lower clearance margins due to the overhang of inventory from the first two quarters of t! he year, higher levels of clearance units sold during the period, as well as the company's transition back to a promotional pricing strategy during the second quarter of 2013.

At the current level of expenses, the company's gross margin dollars are not enough to cover its expenses, and in order for the company to escape from its seemingly ongoing losses, it will have to rebound its sales to a level that will expense leverage.

Top Blue Chip Companies To Watch For 2015

Though traffic trends have improved during the quarter, including positive off-mall traffic for the last two weeks of September, the company's mall-based stores continues to be difficult.

JCPenney is still trying to fix its Home department as the company admitted that getting the new Home strategy up and running has been more challenging than originally planned. To date, the company has re-opened all but a handful of its 505 new Home departments.

Merchandise assortment, shopping environment and price points have not resonated with customers, and sales trends remain weaker in stores. Importantly, hard home goods is an inventory category that takes a lot of time to clear—even with aggressive couponing—which could create a margin overhang for several more quarters.

JCPenney is working hard to create a more balanced assortment between modern and traditional home furnishings, with opening price points and an easy shopping environment.

The company is pursuing a number of strategic initiatives in order to continue driving improved performance. With its renewed focus on putting the customer first, JCPenney is rebuilding its base of highly satisfied and loyal customers. Customer service scores are at all-time highs for the company.

Private brands and basics are an integral - and profitable - part of the company's strategy. Private brands, such as St. John's Bay, Arizona and Stafford, and key item basics hav! e been re! stored to inventory levels sufficient to meet customer demand heading into the critical Holiday season.

One of the key positives in the company's statement is that remains current in its payments to vendors. This indicates that the company is continuing to make progress in its turnaround.

September comparable store sales, a key metric to gauge retail performance, were down 4 percent from last year but rose 580 basis points from August 2013.

The company's online sales continue to trend double digits ahead of last year, and are up 18.6 percent in the third quarter to date. September sales on experienced 25.3 percent sales growth over the same period last year. Women's apparel, the company's largest business, reported positive sales for the month of September.

JCPenney should post improved sales numbers for the key holiday season and report strong margins and cash flow to sustain the confidence of the investors; although, it is not easy amid tough competition and  weak retail environment.

"Although there remains significant work to be done, the experience, talent and drive of our team is allowing us to confront our challenges head on and take swift and effective actions to address them. It will take time, but we are on the right path with a sound strategy and achievable goals," Ullman said.

Saturday, January 25, 2014

Xerox Delivers: 13 Dividend Stocks Increasing Payouts

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With earnings season now in full swing, the uptick in dividend stocks declaring dividend increases marches on. Indeed, thirteen dividend stocks increased their payouts over the past week, including a big surprise from copier-turned document management company Xerox (XRX), who surprised shareholders with a sturdy dividend raise.

Here’s a look at the new dividend being paid to Xerox shareholders, along with improvements from other dividend stocks over the week of January 20.

(Note: All dividend yields are as of Jan. 24.)

Insurance brokerage and third-party claims settlement claims company Arthur J. Gallagher (AJG) raised its quarterly dividend 3% to 36 cents per share, payable on Mar. 20 to shareholders of record as of Mar. 4.
AJG Dividend Yield: 3.00%

Bar Harbor, Maine-based bank holding company Bar Harbor Bankshares (BHB) raised its quarterly dividend 1.6% to 32.5 cents per share, payable on Mar. 14 to shareholders of record as of Feb. 15.
BHB Dividend Yield: 3.37%

Hot Construction Companies For 2015

Bank holding company Cardinal Financial (CFNL) raised its quarterly dividend 33% to 8 cents per share, payable on Feb. 24 to shareholders of record as of Feb. 6.
CFNL Dividend Yield: 1.88%

Domestic energy delivery company CenterPoint Energy (CNP) raised its quarterly dividend 14.5% to 23.75 cents per share, payable on Mar. 10 to shareholders of record as of Feb. 14.
CNP Dividend Yield: 4.05%

Michigan-based energy company CMS Energy (CMS) raised its quarterly dividend 6% to 27 cents per share, payable on Feb. 28 to shareholders of record as of Feb. 7.
CMS Dividend Yield: 4.02%

Dallas, Texas-based financial services company Comerica (CMA) raised its quarterly 12% to 19 cents per share, payable on Apr. 1 to shareholders of record as of Mar. 14.
CMA Dividend Yield: 1.59%

Wellhead compression products manufacturer Compressco Partners (GSJK) raised its quarterly dividend 1.7% to 43.75 cents per share, payable on Feb. 14 to shareholders of record as of Jan. 31.
GSJK Dividend Yield: 7.60%

Oil and gas energy holding company Energen (EGN) raised its quarterly dividend 3.4% to 15 cents per share, payable on Mar. 3 to shareholder of record as of Feb. 14.
EGN Dividend Yield: 0.86%

Integrated life sciences company Meridian Biosciences (VIVO) raised its quarterly dividend 5.3% to 20 cents per share, payable on Feb. 14 to shareholders of record as of Feb. 3.
VIVO Dividend Yield: 3.22%

Marietta, Ohio-based bank holding company Peoples Bancorp (PEBO) raised its quarterly dividend 7% to 15 cents per share, payable on Feb. 18 to shareholders of record as of Feb. 3.
PEBO Dividend Yield: 2.60%

Railroad operator Norfolk Southern (NSC) raised its quarterly dividend 3.8% to 54 cents per share, payable on Mar. 10 to shareholders of record as of Feb. 7.
NSC Dividend Yield: 2.37%

Independent petroleum refining and marketing company Valero (VLO) raised its quarterly dividend 11.1% to 25 cents per share, payable on Mar. 12 to shareholders of record as of Feb. 12.
VLO Dividend Yield: 2.03%

Diversified business process outsourcing company Xerox (XRX) raised its quarterly dividend 8.7% to 6.25 cents per share, payable on April 30 to shareholders of record as of Mar. 31.
XRX Dividend Yield: 2.17%

Marc Bastow is an Assistant Editor at As of this writing he did not hold a position in any of the aforementioned securities. For more dividend stocks increasing payouts, see previous weeks' lists of Companies Increasing Dividends.

Thursday, January 23, 2014

Will Delta Air Lines Continue to Rise on Recent Earnings?

With shares of Delta Air Lines (NYSE:DAL) trading around $31, is DAL an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework.

T = Trends for a Stock’s Movement

Delta Air Lines provides scheduled air transportation for passengers and cargo in the United States and internationally. Its route network is centered around a system of hub and international gateway airports. The company also provides aircraft maintenance, repair, and overhaul services for other aviation and airline customers as well as offers staffing services, professional security, and training services. As air transportation is becoming increasingly more popular, Delta Air Lines is poised to capitalize into the future.

Delta Air Lines on Tuesday reported financial results for the December 2013 quarter. "Our December quarter profit caps off a successful year for Delta with strong profitability and margin expansion, industry-leading operations and significant improvements in customer satisfaction. Across the board this was an outstanding year and all credit for these achievements goes to the 78,000 Delta employees worldwide," said Richard Anderson, Delta's chief executive officer. "We have a solid set of initiatives in place to improve our financial results, operational performance and customer satisfaction levels beyond 2013's record levels and remain focused on being the best airline for our employees, customers and shareholders."

T = Technicals on the Stock Chart Are Strong

Delta Air Lines stock has been doing well in the last several years. The stock is currently trading near all-time highs and looks poised to continue. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, Delta Air Lines is trading above its rising key averages, which signals neutral to bullish price action in the near-term.


Source: Thinkorswim

Taking a look at the implied volatility (red) and implied volatility skew levels of Delta Air Lines options may help determine if investors are bullish, neutral, or bearish.

Implied Volatility (IV)

30-Day IV Percentile

90-Day IV Percentile

Delta Air Lines options




What does this mean? This means that investors or traders are buying a minimal amount of call and put options contracts as compared to the last 30 and 90 trading days.

Put IV Skew

Call IV Skew

February Options



March Options



As of Tuesday, there is average demand from call buyers or sellers and low demand by put buyers or high demand by put sellers, all neutral to bullish over the next two months. To summarize, investors are buying a minimal amount of call and put option contracts and are leaning neutral to bullish over the next two months.

On the next page, let’s take a look at the earnings and revenue growth rates and the conclusion.

E = Earnings Are Mixed Quarter Over Quarter

Rising stock prices are often strongly correlated with rising earnings and revenue growth rates. Also, the last four quarterly earnings announcement reactions help gauge investor sentiment on Delta Air Lines’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for Delta Air Lines look like and more importantly, how did the markets like these numbers?

2013 Q4

2013 Q3

2013 Q2

2013 Q1

Earnings Growth (Y-O-Y)





Revenue Growth (Y-O-Y)





Earnings Reaction 2.25%*




*As of this writing.

Delta Air Lines has seen mixed earnings and rising revenue figures over the last four quarters. From these numbers, the markets have been pleased with Delta Air Lines’s recent earnings announcements.

P = Excellent Relative Performance Versus Peers and Sector

How has Delta Air Lines stock done relative to its peers – Southwest Airlines (NYSE:LUV), United Continental (NYSE:UAL), and JetBlue (NASDAQ:JBLU) — and sector?

Delta Air Lines

Southwest Airlines

United Continental



Year-to-Date Return






Delta Air Lines has been a relative performance leader, year to date.


Delta Air Lines provides services that are seeing increased demand as travel for work or leisure becomes more important. The company today reported financial results for the December quarter. The stock has moved higher in recent years and is currently trading near all-time highs. Over the last four quarters, earnings have been mixed while revenues have been on the rise, which has pleased investors in the company. Relative to its peers and sector, Delta Air Lines has been a year-to-date performance leader. Look for Delta Air Lines to continue to OUTPERFORM.

Wednesday, January 22, 2014

Wednesday Analyst Moves: Oracle Corporation, Verizon Communications Inc., Texas Instruments Incorporated, More (ORCL, VZ, TXN, More)

Before Wednesday's opening bell, a number of big name dividend stocks were the subject of analyst moves. Below, we highlight the important analyst commentary for investors.

Canaccord Genuity Lifts Fluor Corp to “Buy”

Canaccord Genuity reported that it has upgraded Fluor Corporation (FLR) from “Hold” to “Buy” as equipment stocks are now trading at a discount. FLR currently has a dividend yield of 0.77%.

Oppenheimer Downgrades Oracle; Valuation Call

Oracle Corporation (ORCL

Tuesday, January 21, 2014

Travelocity parent Sabre files for an IPO

Sabre, the travel technology company that owns Travelocity, on Tuesday filed for an initial public offering of its common stock in an effort to raise up to $100 million.

The Texas-based company, which employs about 10,000 people in 60 countries, said in a written statement that it has not yet determined the number of shares to be sold and at what price.

Sabre operates through three business segments: Travel Network; Airline and Hospitality Solutions; and Travelocity. It has been privately held by investment firms TPG and Silver Lake Partners since 2007.

Sabre is a leading technology provider in the travel industry. In 2012, it was responsible for 37% of the air bookings made on global distribution systems. The company touches on most aspects of the travel industry, providing the technology to help travelers make reservations with airlines, hotels, rental car agencies and cruises.

Top 5 Safest Companies To Buy Right Now

But it has recorded net losses every year since 2008, its filing to the U.S. Securities and Exchange Commission shows. For the first nine months of 2013, it had a net loss of $127.3 million and revenue of $2.35 billion, according to the filing.

The healthier stock market has prompted many private-equity firms to sell their companies. Investors have been particularly flocking to the travel industry, which is climbing back from the bottom it reached during the recession. Blackstone-backed Hilton Worldwide and LaQuinta both recently filed for IPOs.

Sabre said in its filing that it expects spending on technology to grow in the travel industry. Technology spending by the air transportation and hospitality industries grew to $60 billion in 2013 and is expected to exceed $70 billion in 2017, according to Gartner, a technology research firm.

Sabre said in its filing that it plans to use the proceeds of the IPO to pay down debt.

Morgan Stanley, Goldman S! achs, Bank of America Merrill Lynch and Deutsche Bank Securities are underwriting the offer, the company said.

Monday, January 20, 2014

Taser Drops 4% as JPMorgan Cuts Stock to Neutral

Taser International (TASR) has been on a tear–and JPMorgan says it’s now time to take profits on the maker of stun guns and other products.

Getty Images

As I noted yesterday, Taser’s been on quite a roll–the stock has gained more than 30% during the past month of trading. At that’s reason enough for JPMorgan’s Paul Coster, Mark Strouse and Paul Chung to cut its shares to Neutral from Overweight. They write:

We are downgrading TASR to Neutral based on valuation. The stock has increased 36% in the past two weeks (SP500 down 3.7%), is up over 30% YTD, and is trading very close to our December 2014 price target of $12.00. While we remain constructive regarding TASR's fundamentals owing to the ECD upgrade cycle and adoption of the video solution, we believe risk/reward is now balanced and we look for pullbacks to potentially add to positions.

Hot Value Companies For 2014

Taser has dropped 4% this morning after gaining 33% during the past month. That gain would have put it in the top-ten in the S&P 1500 if it were a member of  the index, behind Questcor Pharmaceuticals (QCOR), which has gained 36%, healthcare company Amedisys (AMED) and Affymetrix (AFFX), which has gained 44%, among others.

Saturday, January 18, 2014

SEC, FINRA, DOL Enforcement: $2 Million Restored to U.S. Postal Drivers̢۪ 401(k)s

Among recent enforcement actions, the Department of Labor oversaw the restoration of nearly $2 million in 401(k) benefits to the employees of Lange Trucking Inc., a contractor with the U.S. Postal Service.

In addition, the SEC charged Diamond Foods for boosting earnings growth via an accounting scheme to inflate the price of walnuts.

DOL Sees Nearly $2 Million Restored to U.S. Postal Contractors

After an investigation by the Wage and Hour Division of the Department of Labor, Lange Trucking Inc. was on the hook for nearly $2 million in unpaid 401(k) contributions for its employees.

Lange, which had a contract with the U.S. Postal Service that employed 515 drivers, had failed to make the contributions — and had been previously investigated several times by Wage and Hour. It was acquired, subsequent to its violations, by Eagan, Minn.-based Hoovestal Inc., which voluntarily agreed to provide the bulk of the missing benefit contributions — $1.48 million — while Lange itself agreed to provide $500,000.

The company, along with its president, William A. Langenhuizen; vice president, William H. Langenhuizen; secretary-treasurer, Antoinette Langenhuizen; vice president, Robert Langehuizen; and vice president of finance, Lisa Kulak, have been debarred from eligibility for further service contracts with any U.S. government agency for three years for their failure to pay drivers required fringe benefits.

Hoovestal, on the other hand, not only cooperated fully with the Wage and Hour Division during its investigation, but has also corrected recordkeeping procedures, overhauled the plan to ensure timely payments into the plan going forward, posted wage determinations at the work site and made information about the contracts accessible to employees.

SEC Fines Diamond Foods $5 Million for Falsifying Nut Prices

San Francisco-based Diamond Foods and two former executives found themselves charged by the SEC with falsifying the cost of walnuts so that the company could boost earnings and meet analyst estimates. The company has agreed to pay $5 million to settle the charges.

According to the SEC, the price of walnuts escalated sharply in 2010. If Diamond wanted to keep its growers, it had to pay them higher prices, but if the company did that, it would cut the net income it reported publicly.

Diamond’s then-chief financial officer Steven Neil, who was under pressure to meet or beat Wall Street analysts' earnings estimates, came up with a way to change all that. He directed that those higher payments to walnut growers not be reported immediately, but be delayed so that he could manage earnings in the financial statements.

The way Neil managed it was to come up with two special payments to please Diamond’s walnut growers and bring the total yearly amounts paid to growers closer to market prices. Then he left off parts of those payments from the company's year-end financial statements, instead instructing his finance team to consider the payments as advances on crops that had not yet been delivered.

That meant the company was able to manipulate walnut costs so that it hit quarterly earnings per share (EPS) targets and beat analyst estimates, even going so far as, in Q2 2010, broadcasting its record of “Twelve Consecutive Quarters of Outperformance” in the EPS reports used in investor presentations.

Neil, who personally benefited from the maneuvers via cash bonuses and other compensation that were based on the false results, also lied to the firm's independent auditors about the payments' unusual accounting treatment, the SEC said. Also charged was the company's former CEO, Michael Mendes, who the SEC said should have known what Neil was up to and failed to come clean with auditors about what he knew about the walnut payments.

As a result of his manipulations, Diamond was able to report higher net income and inflated earnings that beat analyst expectations for fiscal quarters in 2010 and 2011. However, once the company restated its financial results in November 2012 to indicate the actual cost of the walnuts it had purchased, its stock price fell from its 2011 high of $90 to only $17 per share.

Mendes has also agreed to settle the charges against him, paying a $125,000 penalty to settle the charges without admitting or denying the allegations and having already returned or forfeited more than $4 million in bonuses and other benefits he received during the time of the company’s fraudulent financial reporting. However, litigation continues against Neil.

SEC Announces Settlements in Penny Stock Shell Packaging Scheme

The SEC has announced nearly $300,000 in settlements against a Virginia-based “shell packaging” company and its CEO who were charged with facilitating a penny stock scheme as well as a Bronx, N.Y.-based stock promoter who rprofited from the fraud.

According to the SEC, Virginia-based Belmont Partners LLC and Joseph Meuse, its CEO, identify and sell public shell companies for use in reverse mergers. Late in 2011, the agency charged both with aiding and abetting a New York-based company that fraudulently issued and sold unregistered shares of its common stock.

In the case, the SEC separately named Thomas Russo, who co-owned a stock promotion service called, as a relief defendant as a means of recovering ill-gotten gains in his possession as a result of his business partner’s participation in the scheme.

Sanjay Wadhwa, senior associate director for enforcement in the SEC’s New York regional office, said, “Meuse and his firm not only sold the shell company but they fabricated the documents necessary to dupe the transfer agent into issuing shares that should never have been sold to the public. Russo received proceeds from the subsequent sale of the illicit stock.”

Belmont Partners and Meuse have agreed to pay $224,500. Meuse additionally has agreed to be barred from the penny stock business or from serving as an officer or director of a public company for at least five years. In a separate judgment, Russo has already agreed to pay $70,075.

A settlement was previously reached by the SEC with the Long Island-based issuer at the center of the scheme, Alternative Green Technologies (AGTI), as well as with its CEO Mitchell Segal. Financial penalties against the latter will be determined at a later date.

SEC Wins on Front Running, Loses on Insider Trading in Illinois Case

An Illinois jury reached a split decision in the SEC's case against Siming Yang and his investment company, Prestige Trade Investments Ltd. The jury found for the defendants and against the SEC on an insider trading claim, but in favor of the SEC and against Yang on a front running charge and two false filing claims.

On March 27, 2012, Xianfu Zhu, chairman and CEO of Zhongpin Inc., announced that he had submitted a nonbinding proposal to take the company private by purchasing all outstanding shares. The price would be $13.50 per share, a 46% increase over the closing price the prior day. The meat and food processing company is based in Changge City, Henan Province, China.

The SEC's initial complaint, which named seven defendants, was based on what the agency termed "suspicious" trading, information and belief. The seven defendants were Yang, a New York City resident who at one time was employed by a New York City registered broker-dealer and investment advisor; Prestige Trade Investment Ltd., a company created in January 2012 by Yang; Caiyin Fan, a Chinese citizen and resident who had a joint brokerage account with Yang; Shui Chong (Eric) Chang, a resident of Hong Kong formerly employed at Deutsche Bank Securities, New York City; and three others.

The allegations were that Yang and Fan purchased 2,571 call options and 58,000 shares of Zhongpin stock for a total of $688,962 shortly before the deal announcement, after which they had unrealized profits of $733,006; Prestige purchased more than 3 million shares of stock shortly before the announcement, after which it had unrealized profits of $7.6 million; and Chang purchased 4,035 call options and 32,500 shares of stock for a total of $446,895, which yielded unrealized profits of $828,188 after the announcement.

According to the initial complaint, coordinated trading was alleged among the defendants, but the complaint was later amended to name only Yang, Fan, Prestige and Chang as defendants and changing the charges from suspicious trading to front running and false filing. The insider trading claims were also retained.

Yang and Prestige went to trial, and the jury found against the SEC on the insider trading charge against them both. However, on the charges of front running and false SEC filing, the jury found for the SEC and against Yang.

Penalties will be assessed later. /* .premium-promo { border: 1px solid #ddd; padding: 10px; margin: 0 10px 10px 0; width: 200px; float: left; } .premium-promo li, .premium-promo ul { list-style-type: none; margin: 0; padding: 0; } .premium-promo li { margin: 0 0 10px; padding: 0 0 10px; border-bottom: 1px dotted #ddd; } .premium-promo h3 { text-transform: uppercase; font-size: 11px; } .premium-promo h4 { font-size: 16px; } .premium-promo a { text-decoration: none !important; } .premium-promo .btn { background: #0069a1; border-radius: 4px; display: inline-block; padding: 5px 10px; clear: both; color: #fff; font-weight: bold; } .premium-promo .btn:hover { background: #034c92; } */ FINRA Fines, Censures Lazard on Disclosure Failures

Lazard Capital Markets LLC was censured and fined $300,000 by FINRA on findings that it failed to include in more than 4,100 equity research reports its involvement with the companies at hand.

Such disclosures are required by provisions of NASD Rule 2711(h).

Lazard failed to disclose in research reports that it had acted as manager or co-manager in public offerings for the subject company in the past 12 months, or that it received compensation for investment banking services from the subject company in the past 12 months.

FINRA also found that the firm failed to disclose in the reports that it made a market in the securities of covered companies at the time the research report was published. Lazard did this after beginning to register as a market maker in NYSE-listed securities but inadvertently failed to include those particular securities in the database that was used to generate that disclosure.

The firm’s research disclosure deficiencies particularly affected reports issued during a two-year period, when the firm failed to include required disclosures in approximately 47% of all research reports it published. In addition, FINRA cited compliance failures in connection with the disclosure failures.

Lazard neither admitted nor denied the findings.


Check out VP in Conflicts Office at J.P. Morgan Securities Barred for Leaking Inside Info on ThinkAdvisor.

Friday, January 17, 2014

Ousted Yahoo exec's golden parachute may be a record

henrique de castro yahoo

Henrique de Castro is expected to leave Yahoo with a severance package of more than $60 million.

NEW YORK (CNNMoney) Henrique de Castro is leaving Yahoo with an severance package estimated to be more than $60 million, one of the largest golden parachutes ever given to an executive who was fired.

de Castro, the chief operating officer, was shown the door by Yahoo (YHOO, Fortune 500) CEO Marissa Mayer, apparently due to disappointing performance in improving Yahoo's advertising revenue. Mayer reportedly wrote in a memo to staffers this week that said, "I made the difficult decision that our COO, Henrique de Castro, should leave the company."

Experts in executive compensation say the larger nine-figure exit packages given to some executives are typically for those who retire, voluntarily leave a company or leave upon the purchase of their company.

"As a pure severance package due to performance-related termination, de Castro's exit package is definitely at the top end of the severance we have seen," said Gary Hewitt, the managing director and head of research at GMI Ratings, an expert in corporate governance issues.

One thing that makes de Castro's package so notable is that the former Google (GOOG, Fortune 500) executive was only at Yahoo for 15 months. And he was one of the top paid executives while he was there.

Even though he joined the company in November 2012, Yahoo estimated his pay for the year at $39.2 million, which was more than even Mayer received in total compensation. Much of it was due to a $20 million one-time payment to compensate him for Google bonuses he forfeited when he changed companies.

The Yahoo payment would not have vested for four years, but with his termination will now vest immediately. The speed-up vesting of other stock options and long-term pay is a major factor in estimates that put his severance package at above $60 million.

The business of being Marissa Mayer   The business of being Marissa Mayer

Equilar, another research firm that estimates executive compensation, puts the value of the accelerated vesting of various options and stock grants at $64.6 million. Aaron Boyd, Equilar's director of governance research, said that total compensation de Castro received during his time at Yahoo could end up reaching $109 million when all the figures are finally reported.

Yahoo did not respond to a request for comment on de Castro's departure or severance pay! . To top of page

Thursday, January 16, 2014

Best Stocks To Invest In Right Now

Analysts have plenty of explanations for the recent stock-price sag, many centering on the prospect the Federal Reserve will trim stimulus as soon as this week.

But there is one that few people have mentioned: Stocks usually do this in mid-December.

A chart of average stock performance over the past 100 years shows stocks endure a mid-December dip most years. Stocks tend to rise at the start of the month, pull back in the middle and bounce at the end. Then they keep rising at the start of January. Charts show this happening on average over the past 100 years, 50 years, 20 years and 10 years.

The late-December recovery is so common it has a Wall Street nickname: the Santa Claus rally.

Best Stocks To Invest In Right Now: Unity Bancorp Inc.(UNTY)

Unity Bancorp, Inc. operates as the holding company for Unity Bank that provides various commercial banking services. It accepts various deposits, which include personal and business checking accounts, time deposits, money market accounts, and regular savings accounts. The company?s loan portfolio comprises commercial, small business administration, consumer, mortgage, home equity, and personal loans. It operated 14 branches in Clinton, Colonia, Edison, Flemington, Highland Park, Linden, Middlesex, North Plainfield, Phillipsburg, Scotch Plains, South Plainfield, Springfield, Union, and Whitehouse, New Jersey; and 2 branches in Forks Township and Easton, Pennsylvania. The company was founded in 1991 and is headquartered in Clinton, New Jersey.

Best Stocks To Invest In Right Now: Citizens First Corporation(CZFC)

Citizens First Corporation operates as a holding company for Citizens First Bank, Inc., which provides various financial services to individual and corporate customers in Kentucky. The company?s deposit products include checking accounts, savings accounts, NOW accounts, money market accounts, sweep accounts, fixed and variable rate IRA accounts, Christmas Club accounts, and certificate of deposit accounts. Its loan portfolio comprises commercial loans primarily to small and medium-sized businesses; commercial real estate loans; and residential real estate loans to borrowers for purchasing and refinancing one-to-four family properties. The company also provides personal loans and lines of credit to consumers for various purposes, such as purchase of automobiles, boats, and other recreational vehicles, as well as for home improvements and personal investments. In addition, it offers other banking services, including debit cards, credit cards, safekeeping and safe deposit bo xes, ACH and other direct deposit services, savings bond redemptions, cashiers checks, travelers? checks, and letters of credit, as well as cash management services, wire transfer services, and loan participations. Further, the company provides title insurance services to mortgage loan customers, as well as other insurance and trust services. It operates 9 locations in Barren, Hart, Simpson, and Warren counties of Kentucky; and 15 automated teller machines in Kentucky. The company was incorporated in 1975 and is headquartered in Bowling Green, Kentucky.

Top 10 Companies For 2014: Dreamworks Animation SKG Inc. (DWA)

DreamWorks Animation SKG, Inc. engages in the development, production, and exploitation of animated feature films and characters worldwide. It provides animated feature films and characters for the theatrical, home entertainment, television, and merchandising and licensing markets. The company also offers television specials and series, live entertainment properties, online virtual worlds, and related consumer products. It has approximately 21 animated feature films, including Shrek the Third, Shrek 2, and Madagascar. The company has strategic alliances with McDonald?s, Hewlett-Packard, Intel, and Samsung. DreamWorks Animation SKG, Inc. was founded in 1985 and is headquartered in Glendale, California.

Advisors' Opinion:
  • [By Rick Munarriz]

    Netflix (NASDAQ: NFLX  ) had a good week. It started when the company teamed up with DreamWorks Animation (NASDAQ: DWA  ) to expand their relationship, and it culminated in an announcement that the Netherlands will be its next expansion market for the leading video service.

  • [By Rick Munarriz]

    5. Turbo's slow start isn't the end of the world here
    One of Netflix's big bets to replace the Nickelodeon content that went away in May is a huge deal with DreamWorks Animation (NASDAQ: DWA  ) for original content. The first installment will be December's launch of Turbo F.A.S.T., a Netflix exclusive based on the computer animation studio's movie that opened this past weekend.

Best Stocks To Invest In Right Now: Jefferson Bancshares Inc.(JFBI)

Jefferson Bancshares, Inc. operates as the holding company for Jefferson Federal Bank, which provides various financial services to consumers and businesses in Tennessee. It offers various deposits products, which include NOW accounts, money market accounts, regular savings accounts, Christmas club savings accounts, certificates of deposit, and retirement savings plans. The company?s loan portfolio includes one-to four-family residential loans, home equity lines of credit, commercial real estate and multi family loans, construction loans, land loans, and commercial business loans, as well as consumer loans, including loans secured by automobiles and savings accounts, loans on recreational vehicles and boats, debt consolidation loans, and personal unsecured debt. It also offers ATM, insurance, and safe deposit box services. The company operates its business through its main office, nine full-service branch offices, and two limited-service drive-through facilities located i n Hamblen, Knox, Sullivan, and Washington Counties, Tennessee. Jefferson Bancshares, Inc. was founded in 1960 and is headquartered in Morristown, Tennessee.

Best Stocks To Invest In Right Now: Malbex Resources Inc(MBG.V)

Malbex Resources Inc., an exploration stage company, engages in the acquisition, exploration, and development of precious metal projects in Argentina and Peru. The company primarily explores for gold and silver. Its principal property includes Del Carmen project that covers approximately 15,129 hectares located near the southern end of the El Indio Gold Belt, Argentina. The company is headquartered in Toronto, Canada.

Best Stocks To Invest In Right Now: First Capital Inc.(FCAP)

First Capital, Inc. operates as the bank holding company for First Harrison Bank that provides various banking services to individuals and business customers. The company generates various deposit products, including non-interest bearing checking accounts, negotiable order of withdrawal accounts, money market accounts, regular savings accounts, certificates of deposit, and retirement savings plans. Its loan portfolio comprises residential loans, such as fixed-rate mortgage loans and adjustable rate mortgage loans; construction loans; commercial real estate loans secured by small retail stores, professional office space, and farm properties; commercial business loans secured by inventory, accounts receivable, and business equipments, such as trucks and tractors; and secured or guaranteed consumer loans, including automobile and truck loans, home equity loans, home improvement loans, boat loans, mobile home loans, and loans secured by savings deposits, as well as unsecured c onsumer loans. The company operates 13 locations in southern Indiana. First Capital, Inc. was founded in 1891 and is based in Corydon, Indiana.

Tuesday, January 14, 2014

Going Naked Has Its Place, Just Not in Options

I don't like trading opens stand alone, outright, or as it's sometimes called, naked.

The problem with buying  options outright is that you can get the direction right and still lose money. That's because time decay works against you. I often lecture on trading options in three dimensions, with only one of them being direction. That's the What. The other two dimensions being time, the When, and Velocity, the how fast.

You can be right on the what, be wrong on the other two and lose money. Let's say you're bearish on Google (GOOG), now trading at 1142. You think it will be 1100 by the February expiration and you buy the Feb 1100 put. And, you're right, it goes to 1100 but it goes there very slowly. Don't forget, the 1100 put is still worthless at expiration with GOOG at 1100.

It's far better to trade in the form of a spread. Let's say you buy the 1100-900 vertical put spread. Your entry level price is much reduced, which acts as a buffer. Now, a vertical spread will cap your profits as the 1100-900 put spread can never be worth more than 20. But, hey, that's how trading works. You cap your risk means capping your reward.

Speaking of capping your risk, selling options outright, or naked, means an unlimited risk exposure. With the maximum reward being the premium you collect. I never advise taking on any position with unlimited risk exposure. So, once again, trade in the form of a spread.

Let's say you think GOOG will stay right around 1140 until expiration. You can sell the february 1140 straddle naked at 73, or $7300 per straddle. Admittedly, that's a lot of money. But, that's all you can make and your risk is unlimited.

So, if you buy the Feb 1220 call at 10 and the Feb 1020 put at 5 (the strangle at 15), you make 58, $5800, instead, but your risk is capped.

In conclusion, while we all like being naked now and again, being naked in options trading is not the way to be.


Hot Growth Stocks To Watch For 2014

The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

Posted-In: Options Markets

Originally posted here...

  Most Popular Earnings Expectations For The Week Of January 13: Big Banks, GE, Intel And More ETFs Poised For Apple Rally (AAPL, IYW, XLK, QQQ, GOOG, MSFT) China Gold Stone Mining Reports Cash Tender Bid for Allied Nevada Shares, Tendering Holders Will Be Paid $7.50/Share in Cash UPDATE: JMP Securities Reiterates Coverage on ARIAD Pharmaceuticals, Sees Market Share Regain UPDATE: Stifel Downgrades Cree on Recent Performance Coming Soon: 3D Printing For Everyone Related Articles () L&L Selected Ernst & Young Advisory Services to Support its Independent investigation Benzinga's M&A Chatter for Tuesday January 14, 2014 IHS Inc. Announces Pricing of Secondary Public Offering of Class A Common Stock at $116 per Share Google's Deal to Purchase Nest Labs Sends a Surge Through the Home Automation Industry Document Security Systems Provides Update on Stay of Proceedings for VirtualAgility and Bascom Research Cases Macquarie Infrastructure Announces No Performance Fee Payable for Q4 2013 Around the Web, We're Loving... Lightspeed Trading Presents: Thunder and Tubleweeds: Trading Techniques for the New Market Enviroment Pope Francis Rips 'Trickle-Down' Economics Come See How the Pro's Trade in this Exclusive Webinar Wynn, MGM, Other Casino Giants Vying For U.S. Turf What Should You Know About AMZN? View the discussion thread. Partner Network View upcoming Earnings, Ratings, Dividend and Economic Calendars. //

Monday, January 13, 2014

Business Services Stock Outlook - July 2013 - Industry ...

To Begin With

Business services -- the teritary sector -- can be defined as ancillary services provided by companies to other players in the market. Hence, the core business of one company can be a business service for another.

The tertiary sector is being increasingly depended upon by firms which require business services that are not their core competence. The companies aim at functions and activities that are close to their core competence thereby becoming more competitive. By doing so, they can reap the benefits of economies of scale and operations.

The business service sector is highly fragmented, with no single service provider enjoying market dominance. As per business reports, the top 50 companies of the sector contribute less than 25% to the overall revenue of this sector. However, given its unique nature, Zacks has classified the group as one of 16 sectors (the S&P has only 10 sectors and business services is part of its 'Industrials').

This industry covers an array of services that include marketing, consulting, staffing, security, telecommunications, Internet services, logistics and waste handling. In its expanded sense, the U.S. business services sector generates consolidated yearly revenue of about $620 billion, though many companies mentioned below do not strictly fall within the generally accepted definition of the industry.

Industries in the Business Service Sector

Advertising & Market Services and Direct Marketing plays a vital role in informing consumers about new products, eventually helping the producers to better penetrate the markets. The Interpublic Group of Companies, Inc. (IPG), Omnicom Group Inc. (OMC), Valassis Communications Inc. (VCI), Harte-Hanks Inc. (HHS) and Vertis are important players in this sector.

Consulting Service providers offer expert advice in a given field for smoother functioning of the companies. Major companies in this arena include Accenture plc (ACN), Bain, Booz Allen, Deloitte Consulting ! (an affiliate of Deloitte Touche Tohmatsu) and IBM Global Services (IBM).

The Staffing business helps companies identify and recruit the right person for the right job. This sector is dominated by Insperity Inc. (NSP), Kelly Services Inc. (KELYB), ManpowerGroup (MAN), ADP TotalSource and the U.S. operations of Adecco.

Internet Service Providers and Telecommunication Services connect knowledge, information and personnel across the globe. This sector is ruled by AOL Inc. (AOL), AT&T Inc. (T), Verizon Communications Inc. (VZ) and Comcast Corporation (CMCSA).

Surveillance, Investigation & Security Consulting Services providers offer specialized security services. This sector is dominated by FTI Consulting (FCN) and Kroll.

Waste Management service providers offer services such as collection, transport, processing, recycling, disposing and monitoring of waste. Waste Management Inc. (WM), Republic Services Inc. (RSG) and Waste Connections Inc. (WCN) are the major players in this arena.

The U.S. and Europe are the largest markets for the business service sector. Some of the dominant players beyond the U.S. boundary include waste and remediation services provider Veolia Environnement (VE) (France), facilities support services provider Serco Group (U.K.), staffing services provider Adecco (Switzerland), travel agency service provider TUI Travel (U.K.), and security services provider G4S (U.K.). Other big names in the field are Rentokil Initial (U.K.) and ISS (Denmark).

The emerging economies such as India and China are also becoming important destinations for the business service sectors.

Zacks Industry Rank

Within the Zacks Industry classification, given the varied nature of the sector, the business service is classified as one of the 16 sectors. We rank all 260+ industries in the 16 Zacks sectors based on the earnings outlook for the constituent companies in each industry. This ranking is available in the Zacks Industry Rank page.

Th! e way to ! align the ranking and outlook from the complete list of Zacks Industry Rank for the 260+ companies is that the outlook for the top one-third of the list (Zacks Industry Rank of #88 and lower) is positive, while the outlook for the bottom one-third (Zacks Industry Rank #177 and higher) is negative.

Please note that the Zacks Rank for stocks, which are at the core of our Industry Outlook, has an impressive track record, verified by outside auditors, to foretell stock prices, in particular over the short term (1 to 3 months).

Business Service, at Zacks Rank #49, is placed in the top 20% of the industries or in the top 1/3 of the total Zacks industry rank list. Most of these companies carry a Zacks Rank #3 (Hold).

The Consulting industry is currently at #95. Of the 19 companies in the Consulting industry, 5 have Zacks Rank #2 (Buy), while only 2 have Zacks Rank #4 (Sell) or Zacks Rank #5 (Strong Sell), implying that most of the companies carry a Zacks Rank #3 (Hold). Companies like Huron Consulting Group Inc. (HURN) and Information Services Group, Inc. (III) have a Zacks Rank #2 while CoreLogic Inc (CLGX) and Accenture plc (ACN) are Zacks Ranked #3.

Internet commerce, currently positioned as #89, has companies that mostly carry Zacks Rank #3. The industry has made its place within the top 40%.

Almost 67% of the companies, under the #85 ranked Advertising & Market Services Industry, including players like Interpublic Group and Omnicom, carry a Zacks Rank #3.

The Financial Transaction Services industry, with players like Visa (V) and Mastercard (MA), is currently at #67, or in the top 1/3 block.

Earnings Preview

With companies starting to release their second quarter financial reports, let's take a look at how things are shaping up for the sector.

Earnings for the business sector have grown 9.7% in first quarter, faring better than the S&P Group's earnings growth of 2.4%. Earnings were also better than 8.6% growth achieved in t! he last q! uarter of 2012.

Revenues showed an improvement of 2.8%, faring much better than the S&P 500's year-over-year average of negative 1.1%. Revenue growth also improved sequentially.

In terms of surprises, the sector's performance was weaker than the broader market, with only 52.6% of Business Services companies beating earnings expectations, compared to the 'beat ratio' of 65.2% for the S&P 500.

Looking ahead at the second quarter results, earnings are expected to improve 9.7% compared to a minimal improvement of 1% for the broader market. Revenue growth is expected to be 1.6% for the sector but decline 0.8% for the S&P 500.

Consolidations in Q2

Mergers and acquisitions play an important part in not only strengthening a company's foothold by grabbing more market share but also edging out competition.

Healthcare Services Group, Inc. (HCSG), provider of housekeeping, laundry, linen, facility maintenance and dietary services to nursing homes, retirement complexes, rehabilitation centers, and hospitals in the United States, entered into a deal with Platinum Health Services, LLC to purchase all of its operating assets.

Cardtronics, Inc. (CATM) is busy making acquisitions. This provider of automated consumer financial services, purchased the assets of Rohnert Park, CA-based Merrimak ATM Group, LLC in June. In May it purchased the assets of Portland, OR-based Aptus Financial.

Global vehicle rental giant Avis Budget Group, Inc. (CAR) acquired Payless Car Rental, the sixth largest car rental company.

Furmanite Corporation (FRM), provider of specialized technical services, has also entered into a deal to buy the Gulf coast operations of ENGlobal Corporation (ENG). These are ENGlobal Corp.'s professional service assets.


Labor Intensive: Given the nature of intangible products offered by the service sector, it is labor intensive. The sector offers immense employment opportunities as it requires both s! killed an! d unskilled labor for its smooth functioning. Business reports indicate that the two most populated countries, China and India, are together expected to create 300 million employment opportunities in the global job market by 2030.

Global Reach: Companies can reach their consumers or prospective buyers across the world when Advertising & Market Services and Direct Marketers act on behalf of these in informing consumers about new products or added features in existing products.

Thus, these service providers help in widening a company's customer base and/or maintaining a better retention ratio. It also opens the door to international trade.

Cost Effective: All business operators prefer to minimize costs of operation and maximize margins. This sector offers cost effectiveness to the companies that opt for their services which would otherwise be far more expensive.

With specialized services, these providers reduce the operational cost and in turn the overall costs of companies. Notably, an increased number of companies opting for such specialized services would increase volumes for the service providers. This would eventually lead to services at lower costs and further reduction in costs for companies.

Specialized Service: The industry offers specialized services based on the latest technologies. This is evident for the security and consulting services. To safeguard data, companies are compelled to engage security service providers, which are required to have the latest and most efficient technologies in place to persuade their clients and win business contracts.

Also, with the increased number of mergers and acquisitions across the globe, the prospects for legal service providers look good. Consulting service is another wing of this industry that is fast gaining traction.

With business complexities on the rise, companies are opting for expert advice before entering into any new venture rather than risking losses due to trial and error. Hence, this s! ervice se! ctor also looks promising as it is indispensable for companies that are fighting to survive in a competitive market.


Growth Tied to Health of Economy: One of the major factors that could impact the growth of the service sector is the overall health of the economy. The companies in the business service sector generate revenues by providing services to other companies.

Spending by companies to avail services might reduce drastically if the pace of economic growth is slower than the expected level. This would naturally reduce the business of the service providers and affect their fundamentals.

Requires Continuous Spending for Research and Development: Importantly, consulting service providers need to remain abreast of the latest technologies through continuous spending on research and development. The performance of these providers can be hampered if they do not acclimatize and/or widen their services with ongoing development.

Training, Maintaining Skilled Workforce: Since skilled workers are always in demand, there remains a possibility of a high turnover rate within the sector. The training of unskilled workers or taking in new skilled workers increases operational costs, thereby affecting margins. This sector needs to have more skilled workforce to take advantage of the technology that develops at a relatively rapid pace.

Competition: Maintaining or increasing market share remains a challenge for business service providers. As discussed earlier, the main business of one company can be a business service for another; hence target customers for both may be the same at times.

Therefore, a business service provider is always required to be adequately equipped to win over customer demand. While larger providers bank on the broader variety of their service offerings and can effectively take up difficult ventures, the relatively smaller players compete in the industry backed by their specialized services.

To Conclude

The dearth of ski! lled labo! r in the business services sector can have an impact on future growth possibilities. Non-availability of quality workforce at a reasonable rate might increase overall operational costs.

However, due to the highly fragmented nature of the industry, it is difficult to set a distinct trend or predict a concrete future for the industry. The expected annual compounded growth rate for this sector is 4% from 2010 to 2015.

The sector might also attract new investors' attention as nearly one-third of the companies under our coverage in the business service industry share profits with their shareholders via dividend payments. Dividend payments help in retaining stockholders confidence in the company. Dividend yield ranges from 1.16% at Core-Mark Holding Company, Inc. (CORE) to 6.35% at SouFun Holdings Ltd. (SFUN). Notably, every company's dividend yield betters the industry average.

With population growing at an accelerated pace and economic turmoil being a constant drag, generating employment is a burning issue. This sector, being labor intensive, involves lower capital investments and confidently addresses this problem. Thus, we can safely say that despite all the hurdles, this industry is crucial for business operations going forward.

Can Pfizer Discover Higher Prices?

With shares of Pfizer (NYSE:PFE) trading around $29, is PFE an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

Pfizer is a biopharmaceutical company that discovers, develops, manufactures, and sells medicines for people and animals worldwide. The company manages its operations through five segments: Primary Care; Specialty Care and Oncology; Established Products and Emerging Markets; Animal Health and Consumer Healthcare, and Nutrition. Pfizer's main products include human and animal biologic and small molecule medicines and vaccines, nutritional products, consumer healthcare products, and products for the prevention and treatment of diseases in livestock and companion animals. Illness and disease is something that plagues people and animals around the world. Pfizer is in constant development, attempting to improve its products in order to help people and animals struggling around the world. So long as health is a main concern for people and animals, Pfizer stands to see significant profits.

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T = Technicals on the Stock Chart are Strong

Pfizer stock has been on a strong path towards higher prices in recent years. The stock is now trading at price levels not seen since the mid-2000s and does not show significant signs of slowing. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, Pfizer is trading slightly above its rising key averages which signal neutral to bullish price action in the near-term.


(Source: Thinkorswim)

Taking a look at the implied volatility (red) and implied volatility skew levels of Pfizer options may help determine if investors are bullish, neutral, or bearish.

Implied Volatility (IV)

30-Day IV Percentile

90-Day IV Percentile

Pfizer Options




What does this mean? This means that investors or traders are buying a significant amount of call and put options contracts, as compared to the last 30 and 90 trading days.

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Put IV Skew

Call IV Skew

July Options



August Options



As of today, there is an average demand from call buyers or sellers and low demand by put buyers or high demand by put sellers, all neutral to bullish over the next two months. To summarize, investors are buying a significant amount of call and put option contracts and are leaning neutral to bullish over the next two months.

On the next page, let’s take a look at the earnings and revenue growth rates and the conclusion.

E = Earnings Are Mixed Quarter-Over-Quarter

Rising stock prices are often strongly correlated with rising earnings and revenue growth rates. Also, the last four quarterly earnings announcement reactions help gauge investor sentiment on Pfizer’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for Pfizer look like and more importantly, how did the markets like these numbers?

2013 Q1

2012 Q4

2012 Q3

2012 Q2

Earnings Growth (Y-O-Y)





Revenue Growth (Y-O-Y)





Earnings Reaction





Pfizer has seen improving earnings and decreasing revenue figures over the last four quarters. From these numbers, the markets have had mixed feelings about Pfizer’s recent earnings announcements.

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P = Excellent Relative Performance Versus Peers and Sector

How has Pfizer stock done relative to its peers, Merck (NYSE:MRK), Sanofi (NYSE:SNY), Novartis (NYSE:NVS), and sector?






Year-to-Date Return






Pfizer has been a relative performance leader, year-to-date.


Pfizer provides discovers and develops valuable pharmaceutical products for consumers and animals all around the world. The stock has been on a powerful surge higher and is now trading at price levels not seen since the mid-2000s. Over the last four quarters, investors have had mixed feelings about the company, as earnings have improved and revenues have been decreasing. Relative to its peers and sector, Pfizer has been a year-to-date performance leader. Look for Pfizer to continue to OUTPERFORM.