Wednesday, July 31, 2013

Banks Tell Customers: Pay Up or Get Out!

With the broader market barely budging, shares of PNC Financial Services (NYSE: PNC  )  closed roughly 2.5% higher on news that the bank will no longer offer full-service checking accounts for free.

The decision should come as no surprise, and the bank acknowledges that the changes will likely only impact roughly 10% of its customers. Last month, PNC's CFO Rick Johnson had this to say about how the bank is viewing the new environment:

"The current retail banking model is built on giving away services -- free checking, free online banking and free deposits. All banks are in the process of rethinking the fair value exchange we have with our customers. And PNC is no exception."

While truly "free" accounts will no longer exist, most customers will avoid the fee by simply maintaining a certain balance or by linking a direct deposit to one's account.

As my colleague Matt Koppenheffer and I recently discussed, banks were able to justify the free checking account services because of the revenue they generated from interchange fees and overdraft fees. However, with new regulation limiting these fees, banks have had to adjust retail cost structures.

Bad for customers, great for investors
There's no two ways about it -- as consumer, being charged a fee is never fun, but from an investor's perspective, charging fees on certain customers to increase profitability is the right decision.

In order to avoid an extremely adverse consumer reaction like what Bank of America (NYSE: BAC  ) experienced when it proposed implementing a $5 monthly fee for debit card use for certain customers, communication will be essential, and PNC appears to be managing the changes in a prudent way -- most of the changes will not be effective until December or June 2014.


If done correctly, establishing or increasing a fee can avoid public outrage and be a great thing for shareholders. In late 2011, the beloved retailer Costco (NASDAQ: COST  ) clearly communicated to its member its intention to increase its annual membership fee by 10%, and in 2012, the company saw its highest annual membership renewal rate -- nearly 90% in the United States.

Will this fee become a huge money-maker for PNC? No, but it will allow the bank to focus on profitable customers and how it can best serve those customer that drive the most value for cross-sales opportunities.

A sweeping change
PNC is not the only bank with this strategy. Though without the same dramatics as its proposed debit card fee, Bank of America is aiming to migrate less-profitable customers into its eBanking Checking Account, a product that incurs no fee as long as the customer only transacts with the bank's electronic platforms such as ATMs and online bill pay.

In addition to squeezing more out of less-profitable customers, B of A is putting increasingly more resources around nurturing its most profitable customers through its Platinum Privileges program -- the bucket consisting only of customers with assets with the bank of greater than $50,000.

The retail banking model is no longer a one-size-fits-all business. Banks will become increasingly specialized and will continue to do what is most profitable for their shareholders.

Unlikely winner?
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Tuesday, July 30, 2013

On Track Innovations - An Undiscovered Patent Play?รข€Ž

Public companies leveraging their patent portfolios, (aka "patent plays"), are getting the market's attention. Companies such as Vringo (VRNG), ParkerVision (PRKR), MGT Capital (MGT), Worlds Inc. (WDDD.OB) and others have presented trading opportunities due to their volatility while retaining the chance for a big payoff to those investors who stay the course. Yet there exist viable patent plays that are still undiscovered. Some of these so called "plays," which are not getting enough attention, are actually real companies making and selling real products or services in contrast to pure patent monetization companies. Some known examples are Single Touch Interactive (SITO.OB) and Blue Calypso (BCYP.OB). This article is focused on another one of these patent plays, On Track Innovations Ltd. (OTIV).

OTIV is currently embroiled in a patent litigation against T-Mobile (TMUS). In that litigation, T-Mobile is accused of infringing one of OTIV's patents through its sale of smartphones. Thus, the likelihood of substantial damages is high. OTIV's case against T-Mobile has been steadily progressing, and a Markman hearing was held just last week before Judge Allison Nathan of the U.S. District Court for the Southern District of New York. Two days before the hearing, Judge Nathan presided over a technology tutorial by both OTIV and T-Mobile on the patented technology. In our experience, technology tutorials are helpful aids to a judge before a Markman hearing.

The actual Markman decision, which should issue shortly, has the potential to greatly increase OTIV's potential payout from T-Mobile. But a favorable decision also increases OTIV's potential payout from a slew of other companies in the market for smartphones, in the event OTIV pursues them as well. For this reason, we believe OTIV is a patent play worth paying attention to.

OTIV's Patent Monetization Strategy

OTIV was established in 1990. It sells solutions directed to ID-credentialing, payment and loyalty! . This includes contactless microprocessor-based smart card solutions for homeland security, payments, eID Systems and other applications, including payment solutions, Smart-ID solutions and petroleum solutions. OTIV is international, generating nearly half its revenue from Europe, as well as significant revenue from Africa and Asia in addition to the Americas.

During 2005, OTIV traded above $12.50. After that, the price dropped off. Since 2008, OTIV has traded below $2.50, and within the past year, more consistently below $1.50. Currently, its market cap is approximately $35 million.

OTIV continues to manufacture and sell products as a source of revenue. For instance, on April 22, 2013, the company announced that its wholly-owned subsidiary was awarded multiple projects as e-ticketing operator for transit systems throughout Poland, for a total projected revenue of $50 million over the next 10 years.

While OTIV's business operations are slowly improving, its most valuable asset today is its patent portfolio pertaining to near-field communications technologies that encompass products and services in the fields of NFC, contactless payment, secure ID, petroleum and parking solutions. OTIV owns more than 100 patents and pending applications. By our count, there are at least 14 issued utility patents in the U.S. The company recently indicated a major strategic shift for increasing shareholder value by focusing more on enforcing and monetizing its extensive IP portfolio.

On April 30, 2013, OTIV issued a press release announcing the election of a new chairman, Dimitrios Angelis. Mr. Angelis' election was touted by the company as "mark[ing] the start of a new chapter for On Track Innovations." In particular, with Mr. Angelis at the helm, the company aims to pursue shareholder value "through its patents and intellectual property." The company has touted Mr. Angelis, who is described by the company as an "accomplished attorney" and "negotiator," as p! articular! ly suited to focusing the company on patent monetization.

Patent Litigation Against T-Mobile

On March 26, 2012, OTIV filed a complaint for patent infringement against T-Mobile USA, Inc. ("T-Mobile") in the United States District Court for the Southern District of New York. The complaint alleges infringement of OTIV's patent, U.S. Patent No. 6,045,043 titled "Contact/Contactless data transaction card." In particular, the complaint alleges that T-Mobile's sale of smartphones, including HTC Amaze 4G, Nokia Astound as well as others, are infringing the '043 patent.

The '043 patent is directed to a data transaction device that can operate in both contact and contactless modes. The preferred embodiment is directed to a card, such as a smart credit-card. The card has a semiconductor device component, which acts as a microprocessor, for processing information read by the card during a transaction. The card can operate in two modes -- contact, where a contact field is physically connected to the semiconductor device, or contactless, where data is transmitted to the semiconductor device via a coil antenna inside the card. Although prior art data transaction devices existed that contained both contact and contactless modes of operation, the '043 patent claims to be an improvement over these earlier cards by virtue of requiring no switching element. This means that the '043 card can allegedly operate pursuant to different protocols for both contact and contactless modes. This allegedly makes the '043 invention more versatile as compared to earlier smart-cards.

On March 9, 2013, a Markman hearing was held. In patent infringement actions, the Markman hearing can be a critical turning point of the case. This is because, during the Markman hearing, the court construes the meaning and scope of terms set forth in the asserted patent claims. These constructions will be important to OTIV for two reasons. First, the constructions establish the boundaries of the claim. That means t! hese cons! tructions may be determinative of whether or not T-Mobile infringes. For instance, if the court adopts broad constructions, that will make it easier for OTIV to prove that T-Mobiles' phones are encompassed by the asserted claim. Yet these constructions are important for an additional reason. Namely, they go a long way towards establishing the boundaries of the claims for future cases as well. That means if OTIV plans to sue more smartphone sellers, the outcome of the Markman hearing in this case may facilitate those efforts dramatically. Thus, more is at stake in this inaugural Markman hearing over the '043 patent than just OTIV's case against T-Mobile.

Key Claim Terms

During the Markman hearing, only four terms were at issue. The first, and perhaps most important term, pertained to whether the asserted claim should be limited to a "card" (which would be a narrow construction) or a "device" (which would be a broad construction). T-Mobile argued that the claim should be limited to a "card." This is because T-Mobile has not been accused of selling "cards." Rather, T-Mobile has been accused of selling phones. Thus, if the court agrees with T-Mobile, and limits the asserted claim to a "card," then OTIV's chances of collecting damages from T-Mobile, or any other smartphone sellers, practically evaporates.

The question of whether the patent is limited to a "card" rather than a "device" included many technical patent litigation claim construction arguments, most of which are beyond the scope of this article. Briefly, however, T-Mobile argued that the claim recites the word "card." That is important, considering that many of the other claims recite "device." OTIV retorted that the claim only recites "card" within its preamble, which is conventionally not viewed by the Federal Circuit (the authoritative federal appellate court with respect to patent questions) as a limitation to a claim. Both par! ties argu! ed that additional disclosures from the patent's prosecution history bolstered their position that the claim was or was not, respectively, limited to a "card."

Though it is difficult to assess how the court will construe this issue, we note that OTIV made a very strong argument that the prosecution history statements did not support T-Mobile's position. This will be a close issue, but one that will have significant impact on OTIV's ability to collect substantial damages from phone-makers. Put simply, if OTIV wins its proposed construction, and the court does not limit the claim to a "card," that will be a fairly binary event opening up OTIV's potential for multiple patent litigations against sellers of smartphones.

One of other issues that was hotly debated at the Markman hearing involved how the patented device operated. Briefly, the device has two modes of operation -- contact and contactless. The question was whether, when the device is transmitting data to the semiconductor device in the contactless mode, data transmission from the contact mode was required to be disabled? Again, this argument was a very technical -- both with respect to the technology at issue as well as the patent claim construction doctrines called into play. T-Mobile argued that the contact mode must be disabled when the device is operating in the contactless mode. T-Mobile's attorneys identified several statements from the patent's prosecution history, which were made to overcome the prior art that backed up their argument. If the court adopts T-Mobile's proposed construction, this will likely provide T-Mobile with a strong non-infringement argument. That may also hinder OTIV's ability to pursue other phone makers for infringement of the same patent.

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OTIV's Prospects for Future Patent Litigations

The preferred embodiment disclosed in the '043 patent is s! mart-card! s. For that reason, the obvious targets for OTIV to pursue for patent infringement would be the major credit card companies. However, these companies appear to presently be some of OTIV's major customers, which most likely means they have already taken a license to some, if not all, of OTIV's patents directed to smart-cards. Accordingly, if OTIV brings additional infringement actions, we expect them to be against competitors of T-Mobile in the market for smartphones, such as AT&T (T), Verizon (VZ), or others. Device manufacturers such as Samsung (SSNLF.PK), HTC (HTCKF.OB), Nokia (NOK) and others may be targets as well.

That said, OTIV's case against T-Mobile asserts only a single patent -- the '043 patent. OTIV claims to hold a much larger portfolio of patents and pending applications. In our experience, companies typically commence a patent monetization strategy with their best patents. But in this case, OTIV's case against T-Mobile was commenced by prior leadership, before Mr. Angelis was elected chairman. Under its new leadership, as well as its new strategy of monetizing its portfolio, we expect to see more cases filed by OTIV that will make this company one to watch over the next several months.

One final consideration is worth noting. OTIV's patents appear to be mostly within the field where OTIV itself develops and sells products. That means that it is likely eligible to pursue injunctions against some of the entities it intends to sue for patent infringement. The possibility of an injunction always greatly increases the leverage a patentee brings to a litigation. From an investor perspective, OTIV would do well to continue focusing on maximizing the value of its patent portfolio. We look forward to watching its progress.

Disclosure: I am long OTIV, SITO.OB. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. (More...)

Monday, July 29, 2013

Today's 3 Best Stocks

The S&P 500 (SNPINDEX: ^GSPC  ) took a break from its formerly breakneck pace today. A Federal Reserve meeting on the imminent horizon has spooked investors enough over the potential closing of that torrential firehose of money that the S&P wound up 6.3 points lower, with a 0.4% loss for Monday.

That doesn't mean that the S&P had no standouts. One company in particular stood head and shoulders above the rest, offering hope that at least one sector of the economy might be maintaining its strength after all.

CF Industries (NYSE: CF  ) was the real standout for the S&P 500 today and was the only stock to end up higher by double digits. The diversified fertilizer manufacturer soared 11.8% in the afternoon, after superinvestor Dan Loeb's Third Point Management revealed its stake in a quarterly investor letter. Third Point asserts that CF is cheaper than its peers and could afford to pay out a lot more in dividends. Loeb is right -- just take a look:

CF PE Ratio TTM Chart

CF P/E Ratio TTM data by YCharts

The exception, Terra Nitrogen (NYSE: TNH  ) , is a master limited partnership that operates under somewhat different accounting rules. No other major fertilizer company trades as cheaply as CF, and the company is presently paying out just 18% of its free cash flow in dividends. There's a lot of room to boost that payout, which is currently good enough for a tiny 0.9% yield after the pop.

CF's big pop was the only major news-driven gain in this rather underwhelming day. The S&P's second- and third-place finishers, Interpublic Group (NYSE: IPG  ) and L Brands (NYSE: LTD  ) (formerly Limited Brands), gained on sentiment rather than results.

Interpublic's pop was driven by positive investor sentiment surrounding the megamerger of Omnicom and France's Publicis, which analysts are viewing as a net benefit for the entire advertising industry. Interpublic could be the target of the next big ad-industry merger -- or it could pick up new clients that leave the new Publicis Omnicom as a result of conflicts or agency reviews.

L Brands earned the third-largest pop on the S&P 500, but there's no real reason behind it. In fact, this pop seems a little counterintuitive in light of the fresh competition L Brands' Victoria's Secret now has in the form of Hanesbrands' recent acquisition of Maidenform. The Hanes-Maidenform tie-up puts more pressure on Victoria's Secret from the lower end of the market, but today's investors seem to believe that L Brands can provide plenty of support for their portfolios.

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Sunday, July 28, 2013

How Fear Could Halt a Market Correction

On the back of yesterday's losses, U.S. stocks opened slightly higher this morning as the number of Americans filing new claims for unemployment benefits last week fell by 11,000 to a seasonally adjusted 346,000 (to be clear, the causal link here is not established, as the figure is in line with the average forecast in a Reuters poll of economists). The S&P 500 (SNPINDEX: ^GSPC  ) and the narrower, price-weighted Dow Jones Industrial Average (DJINDICES: ^DJI  ) are up 0.14% and 0.11%, respectively, at 10:10 a.m. EDT.

The two faces of fear
In investing, there are two kinds of fear: fear of loss and fear of lost opportunity, which naturally induce opposite actions. Fear of loss motivates investors to withdraw from the market and remain on the sidelines. That has been a dominant factor in the behavior of individual investors, which is why I awarded the current bull market the title of "The Most Mistrusted Stock Market Rally in History." Or, as UBS CEO Sergio Ermotti, who oversees one of the world's largest private wealth managers, told CNBC yesterday afternoon:  

Clients' risk appetite remains ... almost paralyzed, (with) very high level of cash balances. And this has been the case for the last seven quarters. ... We are really at levels of risk aversion ever seen in the industry.

With the stock market taking a break from its lockstep upward advance since mid-May, that fear may now seem justified. However, the second type of fear is also at work in a market that has experienced a massive rally since the bear-market bottom on March 9, 2009 (see graph below). As Ermotti explains, "It's the higher it [equity market] goes, the more nervous people get and frustrated at not being in the market." That's particularly true when the rally seems to be going from strength to strength, establishing repeated (nominal) record highs, as it has done this year.

^SPXTR Chart

^SPXTR data by YCharts.

Having witnessed this rally, investors who have been on the sidelines may feel that a modest decline is healthy -- and they may see the opportunity to finally get into the market in order not to miss out on future gains. And why not, when they are constantly hammered with the notion that stock valuations remain reasonable, with the S&P 500 valued at less than 15 times estimated earnings for 2013 (on a cyclically adjusted basis, things look a little different).

I don't know how things will shake out (nor does anybody else, no matter how confident they sound), but fear is at least one thing that could prevent the recent swoon in the market from turning into a rout.

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Saturday, July 27, 2013

My Investment Strategy to Add Fracking to My Portfolio

Three months ago I used my favorite investment strategy, writing puts, in an attempt to add units of Hi-Crush Partners  (NYSE: HCLP  )  to my portfolio. In one sense, that strategy was a failure as units of Hi-Crush stayed well above my strike price, meaning I won't be purchasing units when the puts expire next week. However, I was able to keep the full put premium which equated to a very nice 12% return for my capital at risk. Because I still want to add Hi-Crush to my portfolio, I'm going back to the well and writing puts again.

My trade
Last time I was able to write puts striking at $17.50 each. Because of the company's recent run-up, this time I'm forced to move up the ladder and write puts striking at $20. Those puts currently yield about 5% for the capital at risk, but are 10% below the current price of the units. Because I view $20 a unit as a fair price to pay I think that this trade offers a pretty good risk and reward ratio, even though I won't be paid as much to write puts this time.

The advantage of using puts as an investment strategy is that it allows the investor to buy stocks for much lower than the current price or at least earn income while trying. In this case, I will either buy Hi-Crush for a price that's 15% lower than it's currently trading, or earn 5% in income for trying. That's a pretty big difference for this income stock. For example, if I bought today my forward yield would be about 8.64%; however, with patience I could lock in a yield of about 10%.

Why Hi-Crush?
I like that Hi-Crush is a pure-play, low-cost proppant producer as well as its choice to be structured as an income-friendly MLP. That income is secured by long-term, take-or-pay contracts from leading oil-field service companies which give its profits stability. Further, the company has long-term visibility in the fact its frac sand is used to enhance the recovery rates of oil and gas, making it a critical component in the process of increasing production. As you can see on the following chart, demand will almost double over the coming years: 

Source: Hi-Crush Partners 

Hi-Crush is well positioned to capture this growth. Not only does it have the logistical capabilities to reach all of the major shale plays, but it has the financial flexibility to pursue industry consolidation. The company recently added a major Marcellus- and Utica-based distributor to its platform, which should also enhance its ability to grow. Overall, Hi-Crush has a multitude of potential acquisition opportunities ranging from drop-down deals with its parent to additional consolidation transactions which should enable it to grow its distribution payout in the future.

An investment in Hi-Crush is not without risks. It's not as diversified as rival U.S. Silica Holdings  (NYSE: SLCA  ) , which has pursued a strategy that has it boasting over 200 products and 1,400 customers. Hi-Crush has just a handful of customers and one main product. Meanwhile, U.S. Silica is much more geographically diverse with 15 facilities compared to just two for Hi-Crush. I like the fact Hi-Crush is a pure play; however, being concentrated is a big risk, which is one reason why I'm writing puts to buy units much cheaper. 

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The other risk that can't be overlooked is the threat from ceramic proppants, like those made by CARBO Ceramics  (NYSE: CRR  ) , which could take a greater market share than is currently projected. Referring to the demand chart, frac sand is projected to remain 75% of the proppant market as that market grows. However, some shale plays like the Bakken are forcing producers to turn to higher-cost ceramic proppants because the returns are better. Halcon Resources  (NYSE: HK  ) , for example, pointed out that its strategy to use ceramic proppants was one of the driving forces behind its improved returns in the Bakken. The company saw much higher initial production rates, while expecting better estimated ultimate recovery rates from its investment in ceramic proppants. If ceramics do end up taking market share, it could crush my investment in Hi-Crush.

Final Foolish thoughts
Despite the risks, I think I'll be well rewarded by investing in Hi-Crush. By writing puts, I can strategically purchase units lower, or at least earn some additional income for my troubles. I like the risk and reward balance of this trade, which is why I'll be making it as soon as our trading rules allow. 

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Friday, July 26, 2013

Friday's Top Upgrades (and Downgrades)

This series, brought to you by Yahoo! Finance, looks at which upgrades and downgrades make sense, and which ones investors should act on. Today, we're focusing on tech stocks, as analysts pull back on Facebook (NASDAQ: FB  ) and Dolby Labs (NYSE: DLB  ) , but become more bullish on LogMeIn (NASDAQ: LOGM  ) . Let's start with that last one.

LogMeIn signs up some more fans
Remote computer access software maker LogMeIn released its second-quarter numbers yesterday, reporting a $0.06-per-share loss despite growing revenue by 20% (to $40.7 million). Management promised to reverse the quarter's loss as the year progresses, however, predicting full-year net income will at least match analyst estimates of $0.49 per share, and could come in as high as $0.52 per share.

Investors are therefore shrugging off news of the loss, and focusing on brighter days to come. Shares today are up more than 4%, helped in no small part by a series of three price-target hikes on Wall Street, from Wunderlich, Dougherty, and Maxim Group -- who posit share prices ranging anywhere from $28 to $38 on LogMeIn.

Unfortunately, it looks like only one of those analysts is close to the mark: Wunderlich, which has a hold rating on the stock, and sees its shares declining in value over the course of the year.

Why do I say this? Well, consider: From a GAAP perspective, the best case for LogMeIn this year is that it might earn $0.52 per share. That works out to about 57 times earnings... assuming the earnings come in at the very tippity-top of LogMeIn's predictions. Meanwhile, from a free cash flow perspective, the $15.6 million LogMeIn has generated over the past 12 months works out to a price-to-free-cash-flow ratio of 46.

So the free cash flow picture on this one is better than GAAP makes it appear. Still, whether you see the stock's multiple as 46 or 57 -- either way, that's too high a price to pay for a stock that grew revenue 20% last quarter, and that analysts see growing profits at a similar 20% rate over the next five years. In short, the problem with LogMeIn isn't the lack of GAAP profits -- it's the too high price you're being asked to pay for the profits LogMeIn will earn in the future.

Turning away from Facebook...
Turning now to the downgrades, we begin with Facebook, the beneficiary of a huge 30% run-up in share price after Wednesday's earnings release showed a 53% jump in revenue on surprising strength in mobile advertising. One analyst, however -- Argus Research -- seems to think Facebook's run-up in share price moved too far, too fast.

Going against the grain of the multiple upgrades and price target hikes we saw yesterday, Argus is downgrading Facebook to "hold" today -- and I have to say that I think Argus is calling this one right.

Once again, we're faced with a stock whose P/E looks totally out of whack -- this one being valued at some 150 times earnings, on 30% profits' growth estimates. Once again, a deeper dive into the numbers reveals the stock to be not as overvalued as it looks, since free cash flow at Facebook ($2 billion), is about 3.6 times as strong as the company's $557 million in reported profits might suggest. But once again, the price is just a bit too high.

Valuing the company on its real free cash flow as opposed to its accounting earnings gets us to about a 42-times multiple. But that's still too much to pay for the 30% long-term growth that analysts predict for Facebook. Even if the stock's no longer as clearly overvalued as it was looking before Wednesday's earnings beat, it's still too expensive to buy.

...and tuning Dolby out
And finally, we come to Dolby. Like the other techs, Dolby surprised a lot of analysts yesterday with fiscal Q3 earnings of $0.47 per share -- more than half-again as good as the number Wall Street was expecting to see. Unfortunately, Dolby paired its "beat" with weaker-than-expected revenue, and a prediction that next quarter's profits will come in between $0.30 and $0.36 -- far short of the consensus number.

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Analysts are reacting poorly to that prediction, with Dougherty & Co. downgrading to "neutral" this morning, and investors bidding Dolby down 3.5% in response. They're right to do so.

Priced at 17 times trailing earnings, Dolby looks to be on-its-face overvalued based on 10% long-term growth expectations. What's more, free cash flow at the firm is still lagging reported income badly, clocking in at less than $150 million, versus GAAP income of $195 million. That lifts the price-to-free cash flow ratio on this one north of 22 -- far too much to pay for 10% growth, if that's all Dolby will be able to produce.

As a former fan of the stock, and a former owner, I have to say... I'm glad I don't own this one anymore -- and I think that Dougherty is right to pull its buy rating as well.

Motley Fool contributor Rich Smith owns shares of LogMein and Dolby Laboratories. The Motley Fool recommends Dolby Laboratories and Facebook. The Motley Fool owns shares of Facebook.

Thursday, July 25, 2013

Best Medical Companies To Buy For 2014

Fresenius Medical Care AG (FME) fell the most in more than four years in Frankfurt after the U.S. government proposed cutting payments to kidney dialysis center operators by 9.4 percent next year.

The shares dropped as much as 10 percent, the biggest intraday decline since October 2008. The stock was down 9.7 percent at 49.18 euros as of 9:11 a.m.

Much of the $1 billion reduction in payments is the result of a federal budget-balancing agreement. That deal targeted overspending on anemia drugs such as Amgen Inc. (AMGN)�� Epogen and Aranesp for patients in Medicare, the U.S. health plan for the elderly and disabled.

The U.S. government will consider phasing in the reduction over more than one year, the Health and Human Services Department said yesterday in a regulatory filing, citing concerns it may ��mpact beneficiary access to care.��The proposal is subject to public comment and may change before taking effect.

Best Medical Companies To Buy For 2014: Prima BioMed Ltd (PRR)

Prima BioMed Ltd is a biotechnology company is engaged in the development and commercialization of medical therapies with a focus on oncology. Its product candidates in development include Cvac, an autologous dendritic cell vaccine for ovarian cancer, monoclonal antibodies for multiple tumour types, and an oral formulation for the human papilloma virus (HPV), vaccine. Its product candidate Cvac is a dendritic cell therapy, for which it is conducting a Phase IIb trial for the treatment of ovarian cancer. Cvac is designed to target the tumour antigen mucin-1, which is expressed at high levels on different tumour types. It also has two preclinical product development programs. In May 2011, Prima BioMed GmbH, a 100 % owned subsidiary of Prima BioMed Ltd, was incorporated in Germany. In May 2011, Prima BioMed Middle East FZLLC, a 100 % owned subsidiary of Prima BioMed Ltd, was incorporated in the United Arab Emirates.

Best Medical Companies To Buy For 2014: Uroplasty Inc (UPI)

Uroplasty, Inc., incorporated in January 1992, is a medical device company that develops, manufactures and markets products for the treatment of voiding dysfunctions. The Company�� primary focus is on two products: the Urgent PC Neuromodulation system and Macroplastique Implants. The Urgent PC system is a United States Food and Drug Administration (FDA)-approved minimally invasive, office-based neuromodulation therapy for the treatment of overactive bladder (OAB) and associated symptoms of urinary urgency, urinary frequency, and urge incontinence; and Macroplastique Implants a urethral bulking agent for the treatment of adult female stress urinary incontinence primarily due to intrinsic sphincter deficiency (ISD). Outside of the United States, the Company�� Urgent PC is also approved for treatment of fecal incontinence, and Macroplastique is also approved for treatment of male stress incontinence and vesicoureteral reflux.

Urgent PC Neuromodulation System

Using a small-gauge needle electrode inserted above the ankle, the Urgent PC System delivers electrical impulses to the tibial nerve that travel to the sacral nerve plexus, a control center for pelvic floor and bladder function. Components of the Urgent PC system include a hair-width needle electrode, a lead set, and an external, handheld, battery-powered stimulator. For each 30-minute, office-based therapy session, the physician or other qualified healthcare provider inserts the needle electrode in the patient�� lower leg and connects the electrode to the stimulator. Typically, a patient undergoes 12 consecutive weekly treatment sessions, with follow-up maintenance treatments as required to sustain the therapeutic effect. The Company has received regulatory clearances for sale of the Urgent PC system in the United States, Canada and Europe. It also has launched its second generation Urgent PC system.


Macroplastique is designed to restore the patient�� urinary contine! nce immediately following treatment. Macroplastique is a soft-textured, permanent implant injected, under endoscopic visualization, around the urethra distal to the bladder neck. It is a composition of heat vulcanized, solid, soft, irregularly shaped polydimethylsiloxane (solid silicone elastomer) implants suspended in a biocompatible excretable carrier gel. Macroplastique does not degrade, is not absorbed into surrounding tissues and does not migrate from the implant site. The Company has sold Macroplastique for several urological indications in over 40 countries outside the United States.

Other Uroplasty Products

The Company markets outside of the United States minimally invasive products to address fecal incontinence. Its PTQ Implants offer minimally invasive, soft-textured permanent implant for treatment of fecal incontinence. The PTQ Implants are implanted circumferentially into the submucosa of the anal canal, creating a bulking and supportive effect similar to that of Macroplastique injection for the treatment of stress urinary incontinence. The PTQ is Conformite Europeenne (CE) marked and is sold outside the United States in various international markets. The Urgent PC is also CE marked and sold outside of the United States for the treatment of fecal incontinence. In addition to urological applications, the Company markets its tissue bulking material outside the United States for otolaryngology vocal cord rehabilitation applications under the trade name VOX Implants. In the Netherlands and the United Kingdom only, the Company distributes certain wound care products in accordance with a distributor agreement.

The Company competes with Pfizer Inc., Johnson and Johnson, Novartis, Allergan, GlaxoSmithKline, Carbon Medical Technologies, BioForm, Inc., Q-Med AB and Contura.

10 Best Financial Stocks To Buy For 2014: Quintiles Transnational Holdings Inc (Q)

Quintiles Transnational Holdings Inc. is a provider of biopharmaceutical development services and commercial outsourcing services. The Company operates in two segments: Product Development and Integrated Healthcare Services. The Company�� Product Development segment operates as a contract research organization (CRO) focused primarily on Phase II-IV clinical trials and associated laboratory and analytical activities. The Company�� Integrated Healthcare Services segment is a global commercial pharmaceutical sales and service organizations and Integrated Healthcare Services provides a range of services, including commercial services, such as providing contract pharmaceutical sales forces in geographic markets, as well as healthcare business services for the healthcare sector, such as outcome-based and payer and provider services. In August 2012, it acquired Expression Analysis, Inc.

Product Development

Product Development provides services and that allow biopharmaceutical companies to outsource the clinical development process from first in man trials to post-launch monitoring. The Company�� service offering provides the support and functional necessary at each stage of development, as well as the systems and analytical capabilities. Product Development consists of clinical solutions and services and consulting. Clinical solutions and services provides services necessary to develop biopharmaceutical products, including project management and clinical monitoring functions for conducting multi-site trials (generally Phase II-IV) (core clinical) and clinical trial support services that improve clinical trial decision making and include global laboratories, data management, biostatistical, safety and pharmacovigilance, and early clinical development trials, and strategic planning and design services that improve decisions and performance. Consulting provides strategy and management consulting services based on life science and advanced analytics, as well as regulatory and comp! liance consulting services.

The Company competes with Covance, Inc., Pharmaceutical Product Development, Inc., PAREXEL International Corporation, ICON plc, inVentiv Health, Inc. (inVentive), INC Research and PRA International.

Integrated Healthcare Services

Integrated Healthcare Services provides the healthcare industry with both geographic presence and commercial capabilities. The Company�� commercialization services are designed to accelerate the commercial of biopharmaceutical and other health-related products. Service offerings include commercial services (sales representatives, strategy, marketing communications and other areas related to commercialization), outcome research (drug therapy analysis, real-world research and evidence-based medicine, including research studies to prove a drug�� value) and payer and provider services comparative and cost-effectiveness research capabilities, clinical management analytics, decision support services, medication adherence and health outcome optimization services, and Web-based systems for measuring quality improvement.

The Company competes with inVentiv, PDI, Inc., Publicis Selling Solutions, United Drug plc, EPS Corporation and CMIC HOLDINGS Co., Ltd.

Best Medical Companies To Buy For 2014: Compugen Ltd.(CGEN)

Compugen Ltd. operates as a drug and diagnostic discovery company based on computer-based discovery capabilities to predict and select novel product candidates. Through in silico prediction and selection, the resulting novel molecules are synthesized and validated utilizing traditional in vitro and in vivo experimental procedures. The company provides these validated product candidates to pharmaceutical, biotech, and diagnostic companies under licensing and other commercialization arrangements. Its research and discovery efforts are focused primarily on therapeutic proteins and peptides, and monoclonal antibodies, and primarily in the fields of immunology and oncology. Its therapeutic peptide and protein related platforms include Protein Family Members Discovery Platform, Protein-Protein Interaction Blockers, GPCR Therapeutic Peptide Ligands, Disease-Associated Conformation Blockers, Intracellular Drug Delivery, Viral Peptides, and Splice Variant based Therapeutic Proteins . The company?s monoclonal antibody related platforms comprise Monoclonal Antibody Targets. Its other therapeutic and diagnostic platforms consist of Nucleic-Acid Disease Markers, Protein Disease Markers, Nucleic-Acid Preclinical Toxicity Markers, Non-SNP Drug Response Markers, and New Indications. Its therapeutic peptide and protein product candidates comprise CGEN-15001, a novel protein for the treatment of autoimmune disorders; CGEN-25017, a novel peptide antagonist of the Angiopoietin/Tie-2 pathway; CGEN-855, a peptide agonist of the FPRL1 GPCR receptor; CGEN-856 and CGEN-857, which are MAS GPCR peptide agonists; CGEN-25007, an antagonist of the gp96 protein; and CGEN-25009, a peptide of the LGR7 receptor. The company also offers monoclonal antibody target product candidates, including CGEN-671, a drug for multiple epithelial tumors; CGEN-928, a drug for multiple myeloma; and CGEN-15001T, a novel B7/CD28 family member. Compugen Ltd. was founded in 1993 and is based in Te l Aviv, Israel.

Advisors' Opinion:
  • [By Michael Shulman]

    Compugen Ltd. (NASDAQ: CGEN) is the world’s leading molecular intellectual property company. Based in Israel, the company has revolutionized the early phases of drug development through a highly automated process of exploring and selecting molecules with the greatest promise to serve as the basis for a particular treatment.

    The company licenses its peptides and proteins for a fee to the who’s who of the drug industry, and also receives a back-end cut of any drug that makes it to market using its discoveries.

    Compugen just announced that it entered into an agreement with Baize Investments under which it will receive $5 million in R&D funding. My target for CGEN is $20 in three to five years.

Will Starbucks Earnings Growth Perk Up Tomorrow?

Starbucks (NASDAQ: SBUX  ) will release its quarterly report tomorrow, and investors remain optimistic about the stock as they've lifted share prices to new all-time highs lately. Yet with a high multiple reflected in its valuation, Starbucks earnings need to deliver not just solid growth but strong growth to justify those recent gains.

Starbucks has had a long history of success in delivering not just the premium drinks that its customers rely on but also the experience that they value. Even in the face of rising competition, the coffee giant has managed to keep its customer base loyal, and that has translated into a huge recovery for the stock since the recession five years ago. Let's take an early look at what's been happening with Starbucks over the past quarter and what we're likely to see in its quarterly report.

Stats on Starbucks

Analyst EPS Estimate


Change From Year-Ago EPS


Revenue Estimate

$3.72 billion

Change From Year-Ago Revenue

Top Stocks To Invest In Right Now


Earnings Beats in Past 4 Quarters


Source: Yahoo! Finance.

Will Starbucks earnings wake investors up this quarter?
Analysts have had some mixed views in recent months about Starbucks earnings, cutting a penny per share from their June-quarter estimates but raising their full-year estimates both for the current fiscal year and for next year. The stock has continued its impressive run, rising almost 15% since mid-April.

Starbucks demonstrated its continued growth in its April quarterly release, posting global comparable-store sales growth of 6%. Following its course of international expansion, the company had particularly strong success in China, with 8% same-store sales growth there. With a long-term strategy of 1,500 new stores domestically, Starbucks also doesn't think the U.S. market is saturated yet, with 300 stores to open this year.

Some investors are still nervous about the high share price for the stock, suggesting that even solid growth isn't enough. But Starbucks has already demonstrated that it's up to the growth challenge. With its juice- and tea-company acquisitions, Starbucks has aimed at offering a complete line of beverages to beat out coffee offerings from Dunkin' Brands (NASDAQ: DNKN  ) while holding off other competitors seeking to carve away specialized niches from its grasp. At the same time, Starbucks' purchase of La Boulange should serve to fend off challenges from Panera Bread (NASDAQ: PNRA  ) , which has followed a similar strategy as Starbucks yet come at it from the opposite direction, starting with its healthy baked goods and then gradually expanding its offerings, including coffee. For Starbucks, offering panini sandwiches contributed to the company's 7% rise in U.S. sales, showing the value of combining food with its premium beverages.

Another way that Starbucks has encouraged loyalty is with its rewards program. With features like a free birthday drink and various levels for frequent customers, Starbucks has a quarter of its transactions run through the loyalty program. Rivals Panera and smoothie-seller Jamba (NASDAQ: JMBA  ) have also adopted similar programs, and Panera has seen arguably even greater success than Starbucks with its card.

When you look at Starbucks earnings in its coming report, focus on how the company's Verismo home-brewing business is faring. Green Mountain Coffee (NASDAQ: GMCR  ) has continued its dominance with its Keurig and Vue brewing systems, and many investors have forgotten about Starbucks since it continued its relationship with Green Mountain. Nevertheless, Verismo marks an important step for Starbucks to stay in consumers' kitchens, and so it's worth looking at as part of the company's overall growth efforts.

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Wednesday, July 24, 2013

Are You Using The Right Payout Ratio?

The payout ratio is one of the most important metrics that dividend growth investors consider when evaluating potential investments. The payout ratio is traditionally calculated as the dividend divided by net income, and it serves as a quick check on a company's ability to comfortably cover its dividend payment. A lower payout ratio (say, 30-40%) suggests that a company has ample room to raise its dividend faster than its growth in earnings per share, while a payout ratio in the middle range (50-60%) suggests that the company can adequately cover its dividend. Payout ratios approaching - or even exceeding - 100% are red flags, alerting investors that a dividend cut is likely unless the company finds a new way to increase its revenue.

The traditional method of calculating the dividend payout ratio can be useful, but it only indirectly answers the question that a dividend investor ultimately cares about: after the company pays its necessary maintenance costs, will there be enough cash left over to cover the dividend? In my own investment research, I have sought the answer to this question by taking a slightly different approach to calculating the payout ratio.

Look at Free Cash Flow, Not Net Income

The payout ratio I prefer - and one that has saved me from a few investing mistakes - is the dividend divided by free cash flow, rather than net income. For a variety of accounting-related reasons, net income can mask the true economics of a business. Free cash flow is a truer measure of the cash that a company actually has available after having paid its necessary maintenance expenses - it is free cash flow that is the available pot of money out of which dividends may be sustainably paid. In order for a company to pay a dividend in excess of its free cash flow, it must either deplete existing assets (by drawing down existing cash or selling off assets) or obtain additional financing (by incurring new debt or issuing new shares). None of these options are particularly appealing, si! nce they weaken the existing business to some degree, and none are sustainable in the long term. If a company is paying dividends in excess of its free cash flow, then it is not a dividend that I would consider to be "well covered," regardless of what the net income payout ratio indicates.

Example: Royal Dutch Shell

Using this alternative payout ratio has saved me from a few situations in which the traditional payout ratio indicated that the dividend was covered - only for the company to later declare a dividend freeze or cut when the free cash flow ran out. One specific example is Royal Dutch Shell (RDS.B), the global oil behemoth.

In early 2010, following the global sell-off in stocks, I considered picking up shares of Royal Dutch Shell. In the prior fiscal year, Royal Dutch Shell had paid $10.7 billion in dividends on a net income of $12.5 billion, for a payout ratio of 86%: not great, but still suggesting that the dividend was being covered. But then I looked at the dividend as a percent of free cash flow:

(Amounts in millions)



Free Cash Flow

FCF Payout Ratio





















Source: Morningstar.

This tells a slightly different story: where the net income payout ratio indicated that the dividend was still being covered by current income, the free cash flow payout ratio suggested that the situation was more dire, and that the company was not able to pay its dividend in a sustainable fashion.

After r! eviewing the free cash flow numbers above, I passed on Royal Dutch Shell as an investment at that time. Shortly thereafter, the company announced that it was freezing its dividend, and it did not raise its dividend again for two years (and even then, it was only a 2.4% raise).

Air Products and Chemicals - Warning Signs?

Since then, I've seen the lesson of Royal Dutch Shell play out for other companies. One company I've considered from time to time is Air Products and Chemicals (APD), which shows up on the screens of many dividend growth investors. Looking at the payout ratio as traditionally calculated (i.e., dividend divided by net income), there seems to be sufficient coverage of the dividend:

(Amounts in millions)



Net Income

Traditional Payout Ratio























Source: APD Annual Reports 2012 and 2009.

But a closer look at the Statement of Cash Flows reveals that APD doesn't generate enough cash to cover its dividend from current operations:

(Amounts in millions)




Free Cash Flow

FCF Payout Ratio























Source: Morningstar.

APD has paid dividends since 1954, and they have been increasing their dividend at an admirable growth rate (with an increase of nearly 11% being the most recent). But I haven't been able to get around the fact that, to pay their dividend, APD must (1) draw down cash, (2) sell assets, (3) incur additional debt or (4) sell additional shares (diluting the equity base). A quick check of APD's financial statements confirms that, since 2010, the cash on the balance sheet has modestly increased and the share count has declined slightly - but long term debt has gone from $3.66 billion to $4.58 billion, which is approximately enough to fund the last two years of dividend payments. Generally speaking, I prefer to be paid out of a company's current earnings (which can be repeated and sustained), rather than relying on the company's ability to obtain additional debt on favorable terms.


Calculating the payout ratio by using free cash flow instead of net income may be a more useful analytical tool for dividend growth investors. While in many instances one can expect the results to be similar, looking directly at free cash flow gets to the heart of what dividend growth investors care about: does the company generate enough spare cash to comfortably cover the dividend? In my own experience, there have been a few surprises when the two approaches have diverged, and relying on the free cash flow calculation has helped me avoid a few potholes along the way.

Source: Are You Using The Right Payout Ratio?

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. (More...)

Tuesday, July 23, 2013

10 Best Warren Buffett Stocks To Invest In 2014

On Thursday, I told you about the advice Warren Buffett is all too happy to offer, but most investors seem to ignore.

Today, I'm going to share with you -- in the hopes that we can all heed his words a little more closely -- the seemingly "magic" formula he uses to consistently beat the market.

Ready for it?

Stuff minus debt.

That's it. That's the golden ticket.


That's how an investor can determine the intangible value of a business.

A lot of people try to make this more complicated than that, but it's really not. 

After all, the accountants are not trying to trick anyone: Each line is exactly what it says it is. "Cash" is self-explanatory. "Inventory" is stuff. "Receivables" are unpaid bills sent for goods delivered or services rendered. And so forth.

10 Best Warren Buffett Stocks To Invest In 2014: Headlam Grp(HEAD.L)

Headlam Group plc, through its subsidiaries, engages in the sale, marketing, supply, and distribution of floor covering and other ancillary products. It primarily offers carpets, residential vinyl, laminate, wood, and vinyl tiles. The company provides its products to independent flooring retailers and contractors in the United Kingdom, France, Switzerland, and the Netherlands. Headlam Group plc is headquartered in Birmingham, the United Kingdom.

10 Best Warren Buffett Stocks To Invest In 2014: Ifg Group Ord Eur 0.12(IFP.L)

IFG Group plc, together with its subsidiaries, provides financial services primarily in Ireland, the United Kingdom, Isle of Man, Jersey, and Cyprus. It offers pensions administration services; independent financial advisory services to individuals, companies, charities, and other trusts; trust and corporate, and fund administration services; and administration and advisory, as well as personal financial and retirement planning services. The company is based in Dublin, Ireland.

Top Stocks To Own For 2014: Reed Elsevier(REL.L)

Reed Elsevier PLC provides professional information solutions worldwide. The company?s Elsevier segment offers scientific, technical, and medical information solutions. This segment publishes science and technology research articles and book titles; and abstract and citation database of research literature, as well as offers information and workflow tools that help researchers generate insights in the advancement of scientific discovery. The Elsevier segment also provides medical journals, books, reference works, databases, and online information tools to medical researchers, doctors, nurses, allied health professionals, students, hospitals, research institutions, health insurers, managed healthcare organizations, and pharmaceutical companies. Its LexisNexis Risk Solutions segment offers data and analytics for the insurance industry; risk management, identity verification, fraud detection, credit risk management, and compliance solutions for financial institutions; invest igative solutions; and employment-related, resident and volunteer screening services. The company?s Lexisnexis Legal and Professional segment provides legal, tax, regulatory, and business information solutions. Its Reed Exhibitions segment organizes exhibitions and conferences for the broadcasting, TV, music, and entertainment; building and construction; electronics and electrical engineering; alternative energy, oil, and gas; engineering, manufacturing, and processing; gifts; interior design; IT and telecoms; jewelry; life sciences and pharmaceuticals; marketing; property and real estate; sports and recreation; and travel sectors. The company?s Reed Business Information segment provides data services, information, and marketing solutions to business professionals; produces industry critical data services, lead generation tools, and online community and job sites; and publishes business magazines. Reed Elsevier PLC was founded in 1894 and is based in London, the United Kin gdom.

10 Best Warren Buffett Stocks To Invest In 2014: Ecs Holdings Limited (E18.SI)

ECS Holdings Limited, an investment holding company, engages in the distribution of information and communications technology products and services. The company�s Enterprise Systems segment offers enterprise systems tools, including middleware, operating systems, Unix/NT servers, databases, storage, and security products for information technology (IT) infrastructure. Its IT Services segment is involved in the IT infrastructure design and implementation, training, maintenance, and support services. The company�s Distribution segment distributes IT products, such as desktop PCs, notebooks, handhelds, and printers for the commercial and consumer markets. It also engages in the retail of IT products and equipment, and accessories. ECS Holdings Limited distributes its products in Singapore, China, Thailand, Malaysia, Indonesia, and the Philippines. The company was founded in 1985 and is based in Singapore. ECS Holdings Limited is a subsidiary of VST Holdings Limited.

10 Best Warren Buffett Stocks To Invest In 2014: Low & Bonar(LWB.L)

Low & Bonar PLC engages in the manufacture and supply of performance technical textiles and technical coated fabrics to civil engineering, carpet manufacturing, leisure, construction, building products, industrial, print, architecture, and transportation sectors worldwide. Its performance technical textiles comprise synthetic nonwovens for flooring, automotive, and construction applications; three-dimensional polymeric mats and composites for civil engineering, building, and industrial applications; geotextiles, agrotextiles, technical industrial textiles, and fibers for industrial and building sectors; carpet backing yarns for the woven carpet industry; artificial grass yarns for sports surface and landscape industries; and woven fabrics and specialist yarns. The company?s technical coated fabrics include trailer side curtains and transport protection products; printable fabrics for large format advertising; architectural fabrics for permanent and temporary building stru ctures; coated fabrics for storage and containment; and coated fabrics for sun shading, boat, pool, camping, and sports applications. Low & Bonar PLC was founded in 1903 and is headquartered in London, the United Kingdom.

10 Best Warren Buffett Stocks To Invest In 2014: Helios Advantage Income Fund Inc. (HAV)

Helios Advantage Income Fund, Inc. is a close ended fixed income mutual fund launched and managed by Brookfield Investment Management Inc. The fund invests in the fixed income markets of the United States. It invests a majority of its assets in below investment grade debt securities, which are bonds rated Ba1 or lower by Moody's Investors Service, Inc., BB+ or lower by Standard & Poor's Ratings Group. The fund benchmarks the performance of its portfolio against the Barclays Capital U.S. Corporate High Yield Index and the Barclays Capital Ba U.S. High Yield Index. It was formerly known as RMK Advantage Income Fund, Inc. Helios Advantage Income Fund, Inc. was formed on November 8, 2004 and is domiciled in the United States.

10 Best Warren Buffett Stocks To Invest In 2014: Polaris Minerals C Com Npv (PLS.TO)

Polaris Minerals Corporation engages in the development and operation of construction aggregate properties and projects. The company holds an 88% interest in the Orca Quarry, a sand and gravel project, which covers an area of approximately 350 hectares of land located in the northwest of Port McNeill, British Columbia; and a 70% interest in the Eagle Rock Quarry project, a granite resource that covers an area of approximately 339 hectares situated on deep tidewater alongside the Alberni Inlet near Port Alberni, British Columbia. It serves various customers involved in concrete manufacturing in North America and Hawaii. The company has a strategic alliance with Cemex, Inc. for the development of a terminal and quarry. Polaris Minerals Corporation was incorporated in 1999 and is headquartered in Vancouver, Canada.

10 Best Warren Buffett Stocks To Invest In 2014: Proam Exploration Corporation (PMX.V)

ProAm Explorations Corporation engages in the exploration and development of mineral, and oil and natural gas properties in Canada and the United States. It holds interests in the Samuel Lake mineral project, located to the west of the town of Atikokan, Ontario. The company also has working interests in various oil and gas wells located in Pennsylvania, Arkansas, Oklahoma, Ohio, and West Virginia, the United States; and Alberta, Canada. ProAm Explorations Corporation was founded in 1997 and is based in North Vancouver, Canada.

10 Best Warren Buffett Stocks To Invest In 2014: Fab-Form Industries Ltd. (FBF.V)

Fab-Form Industries Ltd. develops, manufactures, and distributes fabric-based technology to form concrete footings, foundations, and walls for building structures. The company manufactures forming products using poly membranes to form and damp-proof concrete. Its products include Fastfoot footing forms, Fastbag point load footing forms, and Fast-Tube column forms. The company operates in Canada and the United States, and Europe. Fab-Form Industries Ltd. was incorporated in 1995 and is headquartered in Surrey, Canada.

10 Best Warren Buffett Stocks To Invest In 2014: Nicholas Financial Inc.(NICK)

Nicholas Financial, Inc., through its subsidiaries, operates as a specialized consumer finance company. The company engages in acquiring and servicing contracts for purchases of new and used automobiles and light trucks. It also makes direct loans and sells consumer-finance related products. In addition, the company engages in developing, marketing, supporting, and updating industry-specific computer application software for small businesses located primarily in the Southeast United States. As of April 5, 2011, it operated 56 branch locations in 14 Southeastern and Midwestern states. The company was founded in 1986 and is headquartered in Clearwater, Florida.

Monday, July 22, 2013

Best Clean Energy Stocks To Buy Right Now

Even in the world of commodities, brand can mean a lot. Since oil is part of our everyday lives, companies like ExxonMobil (NYSE: XOM  ) and Chevron (NYSE: CVX  ) have become two of the most recognized brands around the world. With natural gas looking to have its day in the sun, perhaps there are a few companies that could become household names as well.�

Exporting liquefied natural gas, or LNG, certainly has become one of the most talked about topics in the United States. One company that is leading the LNG export charge is Cheniere Energy (NYSEMKT: LNG  ) . As the first mover in this space for the U.S., it has the best chance of any other company to make a big splash in this market.

If you are looking for brand recognition, though, then look no further than Exxon's and Chevron's gas stations to see why everyone knows their name. For this reason, perhaps Clean Energy Fuels (NASDAQ: CLNE  ) has a shot at being a company we recognize from seeing its stations all over the place. Tune in to the video below where contributor Tyler Crowe takes a look at a couple other natural gas companies that could become part of the everyday energy conversation.�

Best Clean Energy Stocks To Buy Right Now: (FTE.AX)

Forte Energy NL engages in the exploration, evaluation, and development of uranium and energy-related projects worldwide. It holds 7 uranium exploration licences covering 8,103 square kilometers in the Republic of Mauritania, West Africa; and 4 uranium prospecting permits for uranium and rare earth elements covering 847 square kilometers located in the Republic of Guinea, West Africa. The company was formerly known as Murchison United NL and changed its name to Forte Energy NL in November 2008. Forte Energy NL is based in West Perth, Australia.

Best Clean Energy Stocks To Buy Right Now: MUI (MUI.AX)

MUI Corporation Limited engages in licensing copyright for feature films in Australia. The company was formerly known as Media Group International Limited. MUI Corporation Limited is based in Sydney, Australia.

5 Best Stocks To Own Right Now: Stratus Properties Inc.(STRS)

Stratus Properties Inc. engages in the acquisition, development, management, operation, and sale of commercial, hotel, entertainment, and multi-family and single-family residential real estate properties located primarily in the Austin, Texas area. It operates the W Austin Hotel & Residences project located on a 2-acre city block in downtown Austin; and residential real estate properties, including developed, under development, and undeveloped properties in the Barton Creek community, the Circle C community and Lantana, and the condominium units at the W Austin Hotel & Residences project. The company also engages in the leasing of commercial properties comprising two office buildings at 7500 Rialto Boulevard; office and retail space at the W Austin Hotel & Residences project; and a retail building and a bank building in the Barton Creek Village, as well as two retail buildings, including a bank building and the Parkside Village project in the Circle C community. Stratus Pr operties Inc. was founded in 1992 and is headquartered in Austin, Texas.

Best Clean Energy Stocks To Buy Right Now: Peoples Federal Bancshares Inc.(PEOP)

Peoples Federal Bancshares, Inc. operates as a holding company for Peoples Federal Savings Bank that provides financial services to individuals and small businesses. The company?s deposit accounts include passbook and statement savings, certificates of deposit, money market, commercial and regular checking, NOW, and individual retirement accounts. It offers one- to four-family residential mortgage, home equity and lines of credit, multi-family real estate, commercial real estate, construction, consumer, and commercial loans. It operates six banking offices located in Brighton, Allston, West Roxbury, Jamaica Plain, Brookline and Norwood. The company was founded in 1888 and is based in Brighton, Massachusetts.

Sunday, July 21, 2013

Ford Moves to Boost Electric-Car Sales

Critics like Ford's Focus Electric, but few have sold so far. Photo credit: Ford Motor Co.

Ford's (NYSE: F  ) Focus Electric is a pretty nice electric car. It has decent range for its price, it drives well, and most critics have been impressed by its overall execution. But it's selling in tiny numbers: only about 1,600 since it was launched late in 2011. Tesla Motors (NASDAQ: TSLA  ) sells that many car every few weeks.

Part of the problem is the price: Compared with rivals such s Nissan's (NASDAQOTH: NSANY  ) Leaf EV, the Focus Electric is expensive -- about twice the cost of a regular gas-powered Focus. Ford just announced a price cut, but will it be enough to jump-start sales?

In this video, Fool contributor John Rosevear looks at Ford's electric car in the context of the company's overall green-car strategy, and he gives his thoughts on whether this price cut is likely to help the Focus Electric's sales -- and on how much that matters to Ford.

China is already the world's largest auto market -- and it's set to grow even bigger in coming years. A recent Motley Fool report, "2 Automakers to Buy for a Surging Chinese Market," names two global giants poised to reap big gains that could drive big rewards for investors. You can read this report right now for free -- just click here for instant access.

Saturday, July 20, 2013

Hot Clean Energy Companies To Watch For 2014

Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you'd like to add some clean-energy-related stocks to your portfolio, the PowerShares WilderHill Clean Energy Portfolio ETF (NYSEMKT: PBW  ) could save you a lot of trouble. Instead of trying to figure out which companies will perform best, you can use this ETF to invest in lots of them simultaneously.

The basics
ETFs often sport lower expense ratios than their mutual fund cousins. The PowerShares ETF's expense ratio -- its annual fee -- is 0.70%. The fund is fairly small, too, so if you're thinking of buying, beware of possibly large spreads between its bid and ask prices. Consider using a limit order if you want to buy in.

This ETF has performed�terribly, significantly underperforming the world market over the past three and five years. But the future counts more than the past, and it's been a rough few years for the entire solar energy industry, among others. And, as with most investments, of course, we can't expect outstanding performances in every quarter or year. Investors with conviction need to wait for their holdings to deliver. Indeed, stocks that have fallen sharply are sometimes great bargains.

Hot Clean Energy Companies To Watch For 2014: Formation Capital Com Npv(FCO.TO)

Formation Metals Inc. engages in the exploration, development, and refining of mineral properties in Canada, the United States, and Mexico. The company owns 100% interest in the Idaho Cobalt project, which consists of 241 claims covering an area of approximately 4,080 acres located in Lemhi County, Idaho; and the Big Creek Hydrometallurgical refining complex located in Shoshone County, near the town of Kellogg, Idaho. It also explores for silver, gold, copper, uranium, lead, zinc, and rare earth elements, as well as base and precious metals. The company was formerly known as Formation Capital Corporation and changed its name to Formation Metals Inc. in November 2009. Formation Metals Inc. was incorporated in 1988 and is headquartered in Vancouver, Canada.

Hot Clean Energy Companies To Watch For 2014: Petroamerica Oil Corp (PTA.V)

Petroamerica Oil Corp., a junior oil and gas exploration company, through its subsidiaries, engages in the acquisition and exploration of oil and gas properties in Colombia. The company has interests in LLA-10, CPO-1, Balay, Arauca, El Porton, El Eden, and Los Ocarros blocks located in the Llanos Basin; and Block 5 in the Lower Magdalena Basin. Its properties cover approximately 450 thousand net acres of land. The company is headquartered in Calgary, Canada.

Top Stocks For 2014: Norwood Financial Corp.(NWFL)

Norwood Financial Corp. operates as the holding company for the Wayne Bank, which provides various commercial banking products and services to individuals, businesses, nonprofit organizations, and municipalities in Pennsylvania. The company?s various deposit products include interest-bearing and noninterest bearing transaction accounts, statement savings and money market accounts, and certificate of deposits. Its loan products comprise mortgage loans to finance principal residences, as well as second home dwellings; commercial loans, including lines of credit, revolving credit, term loans, mortgages, secured lending, and letter of credit facilities; construction loans for commercial construction and single-family residences; and indirect dealer financing of new and used automobiles, boats, and recreational vehicles. The company also offers various other services, such as cash management, direct deposit, remote deposit capture, automated clearing house activity, credit ser vices, trust, investment products, real estate settlement services, and Internet banking. It operates five offices in Wayne County, three offices in Pike County, and three offices in Monroe County, and also serves Lackawanna and Susquehanna counties. The company operates eleven automated teller machines in its branch locations. Norwood Financial Corp. was founded in 1870 and is headquartered in Honesdale, Pennsylvania.

Friday, July 19, 2013

Top 5 Insurance Companies To Watch For 2014

Systemically Important Financial Institution: the newest designation for a firm that's too important to let fail, and with the tag comes new scrutiny from regulators. Three firms, AIG (NYSE: AIG  ) , Prudential Financial (NYSE: PRU  ) , and GE Capital, are at the top of the list to be named soon.

In the video below, Motley Fool contributor Jessica Alling covers the changes the designation dictates and what they may mean for the firms listed above.�

At the end of last year, AIG was the favorite stock among hedge fund managers. Have they identified the next big multi-bagger, or are the risks facing the insurance giant still too great? In The Motley Fool's premium report on AIG, Financials Bureau Chief Matt Koppenheffer breaks down the key issues you need to know about if you want to successfully invest in this stock. Simply click here now to claim your copy, and you'll also receive a full year of key updates and expert analysis as news continues to develop.

Top 5 Insurance Companies To Watch For 2014: Aflac Incorporated(AFL)

Aflac Incorporated, through its subsidiary, American Family Life Assurance Company of Columbus (Aflac), provides supplemental health and life insurance. The company offers various voluntary supplemental insurance products, including cancer plans, general medical indemnity plans, medical/sickness riders, care plans, living benefit life plans, ordinary life insurance plans, and annuities in Japan. It also provides loss-of-income products, such as life and short-term disability plans; and products designed to protect individuals from depletion of assets, which comprise hospital indemnity, fixed-benefit dental, vision care, accident, cancer, critical illness/critical care, and hospital intensive care plans in the United States. The company sells its products through sales associates and brokers, affiliated corporate agencies, independent corporate agencies, and individual agencies. Aflac Incorporated was founded in 1955 and is headquartered in Columbus, Georgia.

Advisors' Opinion:
  • [By Martin]

    David Gary Thompson, who is a Director at AFLAC Inc. (NYSE:AFL), bought 5,000 shares on Sep 26 at $31.50 per share for a total value of $157,500. About the company: Aflac, Inc. is a general business holding company. The Company, through its subsidiaries, provides supplemental insurance to individuals in the United States and Japan. Aflac’s products include accident/disability plans, cancer expense plans, short-term disability plans, sickness and hospital indemnity plans, hospital intensive care plans, and fixed-benefit dental plans.

  • [By Vita]

    AFLAC Inc. (NYSE:AFL): Down 1.75% to $31.46. Aflac, Inc. is a general business holding company. The Company, through its subsidiaries, provides supplemental insurance to individuals in the United States and Japan. Aflac’s products include accident/disability plans, cancer expense plans, short-term disability plans, sickness and hospital indemnity plans, hospital intensive care plans, and fixed-benefit dental plans.

Top 5 Insurance Companies To Watch For 2014: MGIC Investment Corp (MTG)

MGIC Investment Corporation (MGIC), incorporated June 21, 1984, is a holding company and through wholly owned subsidiaries is a private mortgage insurer in the United States. As of December 31, 2012, its principal mortgage insurance subsidiaries, Mortgage Guaranty Insurance Corporation (MGIC) and MGIC Indemnity Corporation (MIC), were each licensed in all 50 states of the United States, the District of Columbia and Puerto Rico. During the year ending December 31, 2012, the Company wrote new insurance in each of those jurisdictions in MGIC and/or MIC. The Company capitalized MIC to write new insurance in certain jurisdictions where MGIC no longer meets, and is unable to obtain a waiver of, those jurisdictions��minimum capital requirements. Private mortgage insurance covers losses from homeowner defaults on residential mortgage loans, reducing and, in some instances, eliminating the loss to the insured institution if the homeowner defaults.

Mortgage Insurance

Primary insurance provides mortgage default protection on individual loans and covers unpaid loan principal, delinquent interest and certain expenses associated with the default and subsequent foreclosure. Primary insurance is written on first mortgage loans secured by owner occupied single-family homes, which are one-to-four family homes and condominiums. Primary insurance is also written on first liens secured by non-owner occupied single-family homes, which are referred to in the home mortgage lending industry as investor loans, and on vacation or second homes. Primary coverage can be used on any type of residential mortgage loan instrument approved by the mortgage insurer.

When a borrower refinances a mortgage loan insured by the Company by paying it off in full with the proceeds of a new mortgage that is also insured by it, the insurance on that existing mortgage is cancelled, and insurance on the new mortgage is considered to be new primary insurance written. Therefore, continuation of its coverage fr! om a refinanced loan to a new loan results in both a cancellation of insurance and new insurance written. When a lender and borrower modify a loan rather than replace it with a new one, or enter into a new loan pursuant to a loan modification program, its insurance continues without being cancelled assuming that the Company consent to the modification or new loan.

The borrower�� mortgage loan instrument requires the borrower to pay the mortgage insurance premium. There are several payment plans available to the borrower, or lender, as the case may be. Under the monthly premium plan, the borrower or lender pays it a monthly premium payment to provide only one month of coverage. Under the annual premium plan, an annual premium is paid to it in advance, and it earns and recognizes the premium over the next 12 months of coverage, with annual renewal premiums paid in advance thereafter and earned over the subsequent 12 months of coverage. Under the single premium plan, the borrower or lender pays it a single payment covering a specified term exceeding twelve months.

Pool insurance is used as an additional credit enhancement for certain secondary market mortgage transactions. Pool insurance covers the excess of the loss on a defaulted mortgage loan which exceeds the claim payment under the primary coverage, if primary insurance is required on that mortgage loan, as well as the total loss on a defaulted mortgage loan which did not require primary insurance. Pool insurance is used as an additional credit enhancement for certain secondary market mortgage transactions. Pool insurance covers the excess of the loss on a defaulted mortgage loan, which exceeds the claim payment under the primary coverage, if primary insurance is required on that mortgage loan, as well as the total loss on a defaulted mortgage loan which did not require primary insurance. In general, the loans insured by it in Wall Street bulk transactions consisted of loans with reduced underwriting documentation; cash out! refinanc! es, which exceed the standard underwriting requirements of the Federal National Mortgage Association (Fannie Mae) and Federal Home Loan Mortgage Corporation (Freddie Mac) (collectively GSEs); A- loans; subprime loans, and jumbo loans.

Other Products and Services

The Company has participated in risk sharing arrangements with the GSEs and captive mortgage reinsurance arrangements with subsidiaries of certain mortgage lenders, which reinsure a portion of the risk on loans originated or serviced by the lenders, which have MGIC primary insurance. It provides information regarding captive mortgage reinsurance arrangements to the New York Department of Insurance (known as the New York Department of Financial Services), the Minnesota Department of Commerce and the Department of Housing and Urban Development, (HUD). It performs contract underwriting services for lenders, in which it judges whether the data relating to the borrower and the loan contained in the lender�� mortgage loan application file comply with the lender�� loan underwriting guidelines. It also provides an interface to submit data to the automated underwriting systems of the GSEs, which independently judge the data. These services are provided for loans, which require private mortgage insurance, as well as for loans that do not require private mortgage insurance. It provides mortgage services for the mortgage finance industry, such as portfolio retention and secondary marketing of mortgages.

The Company competes with Federal Housing Administration, Veterans Administration, PMI Mortgage Insurance Company, Genworth Mortgage Insurance Corporation, United Guaranty Residential Insurance Company, Radian Guaranty Inc., CMG Mortgage Insurance Company, and Essent Guaranty, Inc.

10 Best Stocks For 2014: CNO Financial Group Inc. (CNO)

CNO Financial Group, Inc., through its subsidiaries, engages in the development, marketing, and administration of health insurance, annuity, individual life insurance, and other insurance products for senior and middle-income markets in the United States. The company markets and distributes Medicare supplement insurance, interest-sensitive and traditional life insurance, fixed annuities, and long-term care insurance products; Medicare advantage plans through a distribution arrangement with Humana Inc.; and Medicare Part D prescription drug plans through a distribution and reinsurance arrangement with Coventry Health Care. It also markets and distributes supplemental health, including specified disease, accident, and hospital indemnity insurance products; and life insurance to middle-income consumers at home and the worksite through independent marketing organizations and insurance agencies. In addition, the company markets primarily graded benefit and simplified issue life insurance products directly to customers through television advertising, direct mail, Internet, and telemarketing. It sells its products through career agents, independent producers, direct marketing, and sales managers. CNO Financial Group, Inc. has strategic alliances with Coventry and Humana. The company was formerly known as Conseco, Inc. and changed its name to CNO Financial Group, Inc. in May 2010. CNO Financial Group, Inc. was founded in 1979 and is headquartered in Carmel, Indiana.

Top 5 Insurance Companies To Watch For 2014: Genworth Financial Inc (GNW)

Genworth Financial, Inc., a financial security company, provides insurance, wealth management, investment, and financial solutions in the United States and internationally. The company offers various insurance and fixed annuity products, including life and long-term care insurance products; payment protection insurance products for consumers primarily to meet specified payment obligations; and wealth management products, such as managed account programs with advisor support and financial planning services. It also provides mortgage insurance products and related services to insure prime-based, individually underwritten residential mortgage loans or flow mortgage insurance; and mortgage insurance on a structured or bulk basis, as well as offers services, analytical tools, and technology that enable lenders to operate and manage risk. In addition, the company provides institutional products consisting of funding agreements, funding agreements backing notes, and guaranteed in vestment contracts. Genworth Financial, Inc. distributes its products and services through financial intermediaries, advisors, independent distributors, affinity groups, and sales specialists. The company was founded in 2003 and is headquartered in Richmond, Virginia.

Top 5 Insurance Companies To Watch For 2014: Iamgold Corporation(IAG)

IAMGOLD Corporation, together with its subsidiaries, engages in the exploration, development, and production of mineral resource properties worldwide. It primarily explores for gold, silver, zinc, copper, niobium, diamonds, and other metals. The company holds interests in eight operating gold mines, a niobium producer, a diamond royalty, and exploration and development projects located in Africa and the Americas. Its advanced exploration and development projects include the Westwood project in Canada; and the Quimsacocha project, which consists of 3 mining concessions covering an aggregate area of approximately 8,030 hectares in Ecuador. The company was formerly known as IAMGOLD International African Mining Gold Corporation and changed its name to IAMGOLD Corporation in June 1997. IAMGOLD Corporation was founded in 1990 and is based in Toronto, Canada.

Advisors' Opinion:
  • [By Christopher Barker]

    Although I have not shed my long-standing contention that Yamana Gold offers one of the more deeply discounted vehicles for long-term gold exposure, lately my outlook for IAMGOLD has turned particularly bullish. With a looming spin-off of a 10% to 20% stake in the company's reliably profitable Niobec niobium mine, and the recent sale of its interest in a pair of high-cost gold operations in Ghana for $667 million, IAMGOLD finds itself in terrific financial shape to execute an aggressive $1.2 billion expansion imitative at existing operations.

    Considering the $1.6 billion net asset value (after tax) that IAMGOLD recently assessed for the Niobec mine alone, and a presumed hoard of more than $1.2 billion (in cash, cash equivalents, and gold bullion held for investment), at a market capitalization of $6.9 billion I find extreme comfort in the market's resulting valuation for IAMGOLD's 15.2 million ounces of attributable gold reserves.

Thursday, July 18, 2013

This Smartphone Giant's Time Is Running Out

Having been all but left for dead, Finnish smartphone player Nokia  (NYSE: NOK  ) deserves ample credit for engineering an impressive transformation over the last several years. Under the leadership of CEO Steven Elop, the company ditched its "burning platform," and now has big plans in the smartphone space. And while the company is in undeniably better shape, it faces what could potentially be its greatest challenge yet --regaining its lost share in the booming smartphone space. However, that might not be as easy for Nokia as one might think. In this video, Fool contributor Andrew Tonner gives his reasoning for why, despite its obvious improvements, Nokia could still find itself on the ropes again.

It's incredible to think just how much of our digital and technological lives are almost entirely shaped and molded by just a handful of companies like Nokia and Microsoft. 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 17, 2013

Sprint Partners with Novatel for Tri-Band Hotspot Device

Today, Sprint (NYSE: S  ) , in partnership with Novatel Wireless (NASDAQ: NVTL  ) , announced that it will bring the MiFi 500 LTE tri-band wireless hotspot device to Sprint's network on July 19 -- the first tri-band device for the company.

In a press release, Sprint said the MiFi 500 LTE will be able to access Sprint's 4G LTE network on the 800MHz, 1.9GHz and 2.5GHz signals, and will also include Novatel's software enhancements for extended battery life.

David Owens, Sprint's vice president of product development, said in a statement that, "Sprint is thrilled to partner with Novatel Wireless to bring our customers the latest MiFi device that takes advantage of Sprint's cutting-edge Network Vision technology." 

A few of the MiFi 500 LTE features include:

10 hours of battery use GPS over Wi-FI WPS security connection Ability to connect up to 10 Wi-Fi devices
"Built on the Novatel Wireless patented MiFi technology with a legacy of best-in-class performance and security features, we're excited to introduce the MiFi 500 LTE and support Sprint's Network Vision roll-out with this tri-band 4G LTE device," Rob Hadley, chief marketing officer for Novatel Wireless, said in the release.

The device will be available for purchase next week for $49.99, after a $50 mail-in rebate, and requires a two-year service plan -- which starts at $35 per month for 3GB of 3G/4G data.

Top Undervalued Companies To Buy For 2014

If you follow the investing world at all, you've likely heard the Warren Buffett quote: "Be fearful when others are greedy and greedy when others are fearful." You can apply that to many different situations in the investing world and it will serve you well. I applied it to a situation recently in which I felt that two stocks were unfairly undervalued, and asked whether it was time to scoop up some shares while others are fearful of them? There's definitely a bearish case to be made about each stock, but I'll show you why each one has sustainable, profitable growth ahead.

First up
Ford (NYSE: F  ) has long been a favorite of mine; even after its recent climb in stock price, I feel it's undervalued. In my opinion it's undervalued mainly due to the dismal outlook from Europe, which weighs heavily ��an estimated $2 billion in losses ��on the balance sheet. Here's why I think investing in Ford now could be a good play.

Top Undervalued Companies To Buy 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 Undervalued Companies 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 Michael]

    Schlumberger Limited (NYSE: SLB): Cramer also had more than $100,000 invested in SLB. As of Feb. 15, his charitable trust owns 1,300 shares for a total of about $100,724. SLB is also quite popular among hedge funds. At the end of last September, there were 42 hedge funds with SLB positions in their 13F portfolios. Ken Fisher was the most bullish hedge fund manager about SLB -- Fisher Asset Management had nearly $500 million invested in SLB at the end of the third quarter. Jim Simons’ Renaissance Technologies also invested nearly $200 million in this stock.

    Schlumberger has reasonable debt levels, growing net income and revenue, and healthy cash flow from operations. It is relatively expensive compared with its competitors though. SLB has a forward P/E ratio of 13.6. Its expected annual EPS growth rate is 21.82% on the average for the next five years, which means that its P/E ratio for 2014 will be around 9.2. This is quite low compared with the market, but not so versus its peers.

  • [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."

10 Best Stocks To Buy 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.

Top Undervalued Companies 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 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.

  • [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.