Saturday, August 31, 2013

The Sad State Of Consumer Income

For a consumption based economy to grow, the median family spending money must continue to grow. The disposable income headlines misleadingly infer income is growing.

There are facts, and then there are facts. The headline numbers from the U.S. Census, Bureau of Labor Statistics and Bureau of Economic Analysis are either gross numbers for the entire economy or the gross number divided by the population (per capita). When you view this headline data, either you believe the average person is doing better - or you feel the government is lying because you and everyone around you are worse off.

Chart 1 - Per Capita Real Disposable Income

(click to enlarge)

In a consumption based economy, the amount of money in the hands of the consumer is the economic driver. If consumers are flooded with money, often they will buy the best car. If the consumers are poor, they will buy the cheapest car and only when necessary.

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As background to what I am arguing, Econintersect published a Sentier Research summary study which showed Household Income Down by 4.4% Overall Post Recession. This post is based on supplemental data provided to Econintersect from Sentier Research LLC.

Here is where median income is important as we are looking at the income of the 50th percentile consumer. Watching the income of the 50th percentile tells you about the affordability of refrigerators to the 50th percentile consumer. Figure 1 below shows median income (red line, Figure 1) is declining while headline per capita (Chart 1 above) increases.

(click to enlarge)

One of the larger surprises in the data related to factors based on education. Growth in number of hou! seholds varied with education; households with some college increased, while households with no college decreased.

(click to enlarge)

Yet, earnings in all educational groups declined. Below are the current median incomes:

not a high school graduate = $24,448.high school graduate (including equivalency) = $39,282.some college but no degree = $46,572.Associate degree = $56,390.Bachelor's degree or more=$84,705.

(click to enlarge)

Now consider that the cost of education has increased well over 15% since the end of the Great Recession, and also a recent graduate makes less than the median.

Chart 2 - Change in Cost of Education Since the End of the Great Recession

(click to enlarge)

The average cost of a 4 year university (tuition, room and board) is over $21,000. I do not believe a university degree is a good investment for many. However, there are opposing views:

One common recommendation is that citizens should invest more in their education. Spurred by growing demand for workers performing abstract job tasks, the payoff for college and professional degrees has soared; despite its formidable price tag, higher education has perhaps never been a better investment.

In any event, one needs to be concerned with the decay of median income. The data points to the 1% distorting the per capita data and headlines while everyone else is losing ground.

In my instablog, I provide a "forest view" of Friday's Personal Consumption Expenditure and Disposable Income - as well as a review of the economic releases this past week.

Source: The Sad State Of Consumer Income

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. I have no business relationship with any company whose stock is mentioned in this article. (More...)

Friday, August 30, 2013

8 Clear-Cut Ways To Becoming A Better Saver

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A few weeks back I shared my experiences on how I budget my finances on a freelance writing income.

While I still have some challenges and hurdles to overcome, I am learning how to become a better saver. I have learned to become a less impulsive spender and I often consider what my financial status may be like in the next 30 plus years.

One of the basics to saving is to obviously spend less, but creating a budget and knowing where your money is going on a monthly basis is extremely important. Whether you create your own personalized spreadsheet, or prefer to use tools like, it's a must to write down where you spend your money. You just may be surprised to find out you're spending way too much on restaurants and eating out, or discover you're not saving enough compared to how much you're spending. (The general rule suggested by money experts is to save 20 percent of your income.)

Here are some tips to help you become a better saver.

Pay Yourself First
Always make sure you think about your financial stability first. Take a portion of your paycheck and use the automated direct deposit feature to transfer it into a savings account. Direct deposit is the better option to deter from temptation of spending money.

Keep a Budget
We've all heard money experts advise keeping a budget. This is to track where you're spending and how you can curb those habits.
You may not be aware you're spending $500 a month on eating out. Track your spending and then try to cut corners in one area where you're spending too much money.

Set a Realistic Goal
If you're disciplined enough to save money consistently on a monthly basis, start off with a small budget. Don't feel like you have to put off saving because there isn't enough money.
Saving $500 per month may not be in your budget, but $100 is. After saving those small increments, increase the amount of money you're saving.
As a rule, you should be saving 20% of your take-home pay. It's a good idea to set up alerts as a reminder to stay on top of your savings goals.

Shop Online for Rates
Comparison shop for the best and highest interest rates online. You want your hard earned money to work for you and mature in the meantime.

The new InterestPlus Savings account offered by Capital One is a good example because it offers an above-average interest rate, along with receiving a 10% bonus quarterly.

Wait 24 Hours
This tip relates back to impulse shopping and frivolous spending habits. If you're out shopping and thinking about making a purchase, walk away from the items and give yourself 24 hours to cool off.
If you feel after this time has passed that you still want the item then go back and buy it. Some will be more inclined not to buy anything after walking away. This is a good way to train yourself to curb away from impulse buying.

Extra Cash
After receiving any excess cash such as tax refunds, bonuses, gifts or any additional income, deposit it into your savings account before you get the urge to spend it.

Change to Spare
Every time you break a bill and get change back, put it in a jar to act as a piggy bank. When the jar is full, take it to the bank and deposit it. Some banks offer free coin counting machines which alleviates the task of counting coins on the dining room table.

Make Cuts
Sacrifice and brown bag your lunch to work several times a week. Whatever amount you usually spend on coffee or a meal at a restaurant during lunch, throw it into your savings account. You could potentially save hundreds to thousands of dollars annually.

Kaia Zawadi is a professional freelance journalist/writer/editor. She regularly writes stories about banking and personal finance for

Tuesday, August 27, 2013

Bull of the Day: Tesla Motors (TSLA) - Bull of the Day

2013 has been an incredible year for the automotive industry, but it has been particularly outstanding for newcomer Tesla Motors (TSLA). The electric car manufacturer has made a name for itself thanks to solid sales and earnings that crushed estimates, while the cool factor of its vehicles have also helped the firm to gain some recognition.

These factors have allowed TSLA's stock price to surge this year, as strong results and optimism over electric car demand in the future pushed the stock up to new heights. In fact, TSLA shares have added about 250% since the start of the year, and over 340% in the trailing one year period, making the company one of the hottest stocks in the market, and a favorite pick among growth investors.

Given this incredible surge, many are likely wondering if the run can continue for TSLA heading into the end of the year. If you look at analyst expectations for the company though, there is plenty of reason to believe that TSLA can keep this streak alive and put up some more solid gains.

TSLA Estimates in Focus

Analysts remain extremely bullish on the company and we have seen some estimate revisions higher in the past few weeks. This has helped to push the current year consensus from a loss of 77 cents a share 30 days ago, to its current level of a loss of 60 cents a share today.

Current quarter and next quarter estimates have also risen over the past thirty days too, suggesting that analysts like the firm's prospects in the short term as well.

This move higher in the estimates picture also helps to push the Earnings ESP for the current quarter up to 16.67%. So, the firm could be poised to beat estimates this quarter, at least when looking at this metric.

Growth Rates Still Incredible

Beyond this favorable estimate picture, it is also worth noting that growth levels for TSLA are still quite impressive! . The company is expected to see growth of 81% for the current year, and an astounding 173% for the next year period.

This is especially incredible when you consider where the company was, and where the firm is expected to go in the future. The year ago EPS for the company was $-.68/share and current projections for the 2014 year call for earnings of $0.50/share. Clearly, the firm is on the right track and is well on its way to becoming a formidable player in the automotive market.

Bottom Line

This soaring estimate picture and strong growth outlook has helped TSLA to earn a Zacks Rank #1 (Strong Buy), suggesting that the company will outperform other stocks in the near future. If that wasn't enough, the stock also has a Zacks Recommendation of 'Outperform', meaning that the long-term future for TSLA is quite bright as well.

It is also worth noting that the firm is in great company, as the broad automotive industry is coming back strong. In fact, the automotive-domestic Zacks Industry is currently Ranked in the top 10%, so there are definitely some industry tailwinds too.

Given these factors, it looks like Tesla, even at its current levels, may still be a great candidate for a portfolio. There are not only positive industry trends behind the firm, but a variety of company specific points—such as strong growth rates and increased optimism from analysts—which suggest that there is still time to get in on this amazing growth story.

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Monday, August 26, 2013

Obamacare's Doctor Dilemma

America has a looming problem -- and Obamacare is going to make it worse. That's the conclusion from two former U.S. Senate majority leaders -- one a Democrat and the other a Republican.

It's rare that two influential members from both major U.S. political parties agree on anything related to the Affordable Care Act, commonly referred to as Obamacare. But former Democrat Senate Majority Leader Tom Daschle from South Dakota and former Republican Senate Majority Leader Bill Frist from Tennessee recently co-wrote an article in Health Affairs that pointed out that the U.S. faces a doctor dilemma. And they say that Obamacare seems likely to make the problem even bigger.

A dearth of doctors
What is this doctor dilemma? Daschle and Frist wrote that there are "alarming doctor shortages across the country." They're right.

The state of Hawaii reported 18% fewer doctors than needed in 2012. A recent study in the Greater Cincinnati area also found an 18% shortage of primary care physicians in that region. Actual and projected physician shortages have been identified in at least 33 states in the past few years. The U.S. Department of Health and Human Services says that around 30 million Americans live in areas where there are too few health-care providers.

This problem isn't going away. The Association of American Medical Colleges projects that the U.S. faces a shortage of more than 90,000 physicians by 2020. That shortfall will grow to over 130,000 by 2025. These numbers more optimistic than estimates from the American Academy of Family Physicians, which projects a shortage of nearly 149,000 doctors by 2020.

Obamacare makes it worse
Several factors are driving the need for more physicians. Although the overall U.S. population is growing only modestly, more people translates to demand for more doctors. According to the U.S. Census Bureau, the number of elderly Americans will double by 2030 -- with increased need for medical services.

While demand for physicians increase, one out of every three doctors currently practicing in the U.S. is over age 55. Many of these doctors will retire in the next decade. Medical schools have experienced increased enrollment over the last four years, but the number of potential new doctors isn't enough to offset the other trends.

Daschle and Frist say that Obamacare will make the physician shortage even worse. A report published in the Annals of Family Medicine supports their view. The study projected a physician shortfall of 52,000 by 2025 -- lower than some of the other estimates. However, research data indicated this need for more doctors is 18% higher than it would have been without implementation of Obamacare.

How will Obamacare worsen the physician shortage? The clearest way is through increasing demand for health care itself. If health reform enables 30 million more Americans to gain insurance as intended, these individuals will in all likelihood seek more medical care than before they had insurance. It's this impact that brought Dashle and Frist to agree that Obamacare could lead to more challenges in balancing the supply and demand for physicians.

The former senators point to technology as a key opportunity for solving the problem. Several experts asked recently by the Wall Street Journal about how to address the physician shortage also indicated that use of technology could help, particularly with helping doctors work more efficiently and shifting more care to home settings. Such solutions also present opportunities for investors.

One company working to help make physicians more efficient is athenahealth (NASDAQ: ATHN  ) . In June, health-care research firm KLAS named the company's electronic medical record system as the top-ranked system for physicians in terms of usability, efficiency, and effectiveness. The stock is up 44% year-to-date.

IBM (NYSE: IBM  ) hopes to change the way physicians provide care with its Watson technology. Big Blue is targeting the natural language capabilities, hypothesis generation, and evidence-based learning capabilities of Watson to support doctors in diagnosing and treating patients. What could be interesting is how this technology might also enable other health-care providers such as nurse practitioners and physician assistants to provide higher level of care.

Some observers maintain that the physician shortage is really more of a location problem. Some areas have plenty of doctors while others have too few. Telemedicine is a technology that could help alleviate this issue. Research firm InMedica thinks that the use of telemedicine and related technologies will explode more than 700% by 2017.

Qualcomm (NASDAQ: QCOM  ) looks to be a winner if this prediction comes true. Its Qualcomm Life unit focuses on remote health management. The company's 2Net cloud platform for connecting biometric devices to remotely hosted applications opens the door to a wide array of possibilities for health-care providers to remotely monitor patients.

Even if other solutions are implemented to help solve the nation's doctor dilemma, these technology companies should benefit from increased use of their products. A shortfall in the number of physicians could lead to a windfall for smart investors.

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Saturday, August 24, 2013

FINRA Tells BDs to Stop Pitching ‘Free’ IRAs

The Financial Industry Regulatory Authority is warning broker-dealers not to stretch the truth when marketing “free” individual retirement accounts to investors.

In the just-released Regulatory Notice 13-23, FINRA says that some brokers are using “overly broad language” in sales materials, implying that there are no fees charged to investors who have accounts with the firms. In other instances, FINRA says that “specific fees that are not charged are highlighted and separated from disclosure regarding other fees that may be charged,” which may “mislead investors” regarding the cost of opening, maintaining or closing an account.

Broker-dealers’ marketing campaigns “often emphasize that fees are not charged in connection with their retail brokerage accounts and IRAs,” FINRA states.

However, FINRA states that because closing and maintaining accounts typically involve some cost to investors, either associated with the account itself, the underlying investments or the services of the broker-dealer, “it would generally be inconsistent with FINRA Rule 2210’s requirements to claim or imply that accounts are ‘free.’”

For example, referring to an IRA account as a “free IRA” or “no-fee IRA” where costs exist would fail to comply with Rule 2210’s prohibition of false, exaggerated, unwarranted, promissory or misleading statements or claims, the self-regulator says.

Rule 2210 also requires that communications provide “a sound basis for evaluating the facts with respect to any product or service,” FINRA notice states. Accordingly, “claims regarding fees must be accompanied by clear disclosure of the types of fees that may be charged.”

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The notice gives this example. If an account offered by a broker-dealer involves account maintenance and closing fees, fees associated with the ownership of investments in the account or brokerage service fees, a stand-alone claim such as “Start investing for less with no account opening fees” would not comply with the rule.

The claim could be compliant, however, if it explained other fees that applied, the notice says. For example, the following modified claim may be fair and balanced: “Start investing for less with no account opening fee. Other account fees, fund expenses, brokerage commissions and service fees may apply.”


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Monday, August 19, 2013

Best Energy Companies To Watch For 2014

Over the past week, shares of natural gas engine designer Westport Innovations's (NASDAQ: WPRT  ) have jumped by more than 20%. This small, forward-thinking company is known to be a very volatile stock: It's still in high-growth mode and hasn't yet turned a profit, so the stock price is based more on expectations and emotions than earnings. The company's future depends on more widespread adoption of the engines it designs and builds critical components and systems for, most of which are powered primarily by natural gas, a cleaner, cheaper substitute for gasoline or diesel. So what happened over the past week that got investors so bullish on Westport Innovation's future?

One critical factor behind Westport's rising stock price has been the depressed price of natural gas. The single most important advantage Westport has is the dramatic price difference between gasoline or diesel and natural gas, making it much more economic to fuel your vehicle with natural gas. While a natural gas engine can add $40,000 or more to the sticker price of a new Class 8 truck, Westport customers have been finding that the fuel savings pay for the up-front investment in as little as 14 months. The cheaper natural gas is compared to diesel, the more attractive Westport's value proposition becomes. So when the U.S. Energy Information Administration announced Thursday that natural gas inventories grew 8% faster than expected, natural gas prices tumbled by 4%. That continues a trend of expanding supply and lower prices that just keeps making Westport's engines more attractive.

Best Energy Companies To Watch For 2014: National-Oilwell Inc.(NOV)

National Oilwell Varco, Inc. designs, constructs, manufactures, and sells systems, components, and products used in oil and gas drilling and production; provides oilfield services and supplies; and distributes products, and provides supply chain integration services to the upstream oil and gas industry worldwide. Its Rig Technology segment offers offshore and onshore drilling rigs; derricks; pipe lifting, racking, rotating, and assembly systems; rig instrumentation systems; coiled tubing equipment and pressure pumping units; well workover rigs; wireline winches; wireline trucks; cranes; and turret mooring systems and other products for floating production, storage and offloading vessels, and other offshore vessels and terminals. The company?s Petroleum Services & Supplies segment provides various consumable goods and services to drill, complete, remediate, and workover oil and gas wells and service pipelines, flowlines, and other oilfield tubular goods. It also manufacture s, rents, and sells products and equipment for drilling operations, including drill pipe, wired drill pipe, transfer pumps, solids control systems, drilling motors, drilling fluids, drill bits, reamers and other downhole tools, and mud pump consumables. In addition, this segment provides oilfield tubular services comprising the provision of inspection and internal coating services; equipment for drill pipe, line pipe, tubing, casing, and pipelines; and coiled tubing pipes and composite pipes. Its Distribution Services segment sells maintenance, repair and operating supplies, and spare parts to drill site and production locations. The company primarily serves drilling contractors, shipyards and other rig fabricators, well servicing companies, pressure pumping companies, oil and gas companies, supply stores, and pipe-running service providers. National Oilwell Varco, Inc. was founded in 1862 and is based in Houston, Texas.

Advisors' Opinion:
  • [By Admin]

    Designer and maker of oil rig equipment, National-Oilwell Varco Inc. (NYSE: NOV), should benefit from the rising price of oil due to the crisis in the Middle East. With increased pressure to find new oil fields, the most stable investments in the energy sector appear to be in the oil well services and equipment stocks. NOV supplies equipment to deepwater drilling, shale operations and natural gas exploration.?

    S&P notes that, in the near future, there may be changes in regulatory measures pertaining to the Gulf of Mexico that could benefit NOV. S&P has a “four-star buy” on NOV with a target of $85.

    But technically, the stock is picking up volume, and if it can break through the triple-top at $89, it could have a major move up as it accelerated away from its bullish support line. Buy NOV now for a one-month trade to $89. Longer-term investors should hold this stock for long-term capital gains.

Best Energy Companies To Watch For 2014: Worthington Energy Inc (WGAS.PK)

Worthington Energy, Inc. (Worthington), formerly Paxton Energy, Inc., incorporated July 30, 2004, is an oil and gas exploration and production company with assets in Texas and in the Gulf of Mexico. Worthington�� assets in Texas consist of a minority working interest in limited production and drilling prospects in the Cooke Ranch area of La Salle County, Texas, and Jefferson County, Texas, all operated by Bayshore Exploration L.L.C. (Bayshore). The Company�� assets in the Gulf of Mexico consist of a leasehold working interests in certain oil and gas leases located offshore from Louisiana, upon which no drilling or production has commenced as of December 31, 2011, and a 10.35% interest in the recently drilled I-1 well and a 2% royalty interest in 14,400 acres in the Mustang Island Tract 818. On March 27, 2012, it acquired certain assets from Black Cat Exploration & Production, LLC.

In Texas, the Company has working interests ranging from 4% to 31.75% (ne t revenue interests ranging from 3% to 23.8125%) in the various wells. In the Gulf of Mexico it has a 70% leasehold working interest, with a net revenue interest of 51.975%, of certain oil and gas leases in the Vermillion 179 tract and 10.35% interest in the recently drilled I-1 well and a 2% royalty interest in 14,400 acres in the Mustang Island Tract 818. As of December 31, 2011, it had one producing well that generated average total monthly net revenue.

The Mustang Island 818-L Field, located in the Kleberg County waters of the Gulf of Mexico, is a field re-habilitation project targeting bypassed or only partially produced gas-condensate. Total production from the wells within the seismic coverage was 125.6 billion cubic feet. In January 2011, the Hercules Offshore 205 jack-up rig was contracted to re-enter the I-Well on the Mustang License Area. The oil and gas leases are located in the VM 179, which is in the shallow waters of the Gulf of Mexico offshore fr om Louisiana. VM 179 is at 85 inches water depth approxima! te! ly 46 miles offshore Louisiana in the Gulf of Mexico.

5 Best Financial Stocks For 2014: Seadrill Limited(SDRL)

Seadrill Limited, an offshore drilling contractor, provides offshore drilling services to the oil and gas industries worldwide. It also offers platform drilling, well intervention, and engineering services. As of March 31, 2011 the company owned and operated 54 offshore drilling units, which consist of drillships, jack-up rigs, semisubmersible rigs, and tender rigs for operations in shallow and deepwater areas, as well as in benign and harsh environments. Seadrill Limited was founded in 1972 and is based in Hamilton, Bermuda.

Advisors' Opinion:
  • [By Bryan Perry]

    SeaDrill Ltd. (NYSE: SDRL) is a unique opportunity for income investors seeking a pure play on deep-water drilling outside the post-BP spill in the Gulf of Mexico. The company was formed in 2005, and owns the most state-of-the-art drilling equipment in the entire industry that commands premium day rates. It is in big demand with utilization rates running near100% as big oil deposits become harder to find without going deep.

    These guys operate all over the world in 15 countries on four continents, owning 54 rigs with exposure to only one rig in the Gulf of Mexico. Most of their drilling activity is off the coast of Norway and South Asia, so it has no exposure to the now unstable Middle East. However, news of ARAMCO in Saudi Arabia upping drilling production is hugely positive news for the oil and gas drilling sector. It confirms the belief that the worldwide drilling rig count will rise as well as day rates for the balance of 2011.

    Shares of SeaDrill stand to trade significantly higher than its current price of $36.50, while paying a dividend yield of 7.5%. Buy SDRL under $40.

Best Energy Companies To Watch For 2014: Midstates Petroleum Company Inc (MPO)

Midstates Petroleum Company, Inc. is an independent exploration and production company. The Company�� areas of operation include Pine Prairie, South Bearhead Creek/Oretta, West Gordon and North Cowards Gully. Its Upper Gulf Coast Tertiary trend extends from south Texas to Mississippi across its operating areas in central Louisiana. As of December 31, 2011, it had accumulated approximately 77,100 net acres in the trend. As of December 31, 2011, its development operations are focused in the Wilcox interval of the trend. The Company�� business is conducted through Midstates Petroleum Company LLC, as a direct, wholly owned subsidiary. In September 2012, the Company and its subsidiary acquired all of Eagle Energy Production, LLC�� producing properties as well as their developed and undeveloped acreage primarily in the Mississippian Lime oil play in Oklahoma and Kansas.

As of December 31, 2011, it drilled 57 gross wells in the trend, approximately 93% of. During the year ended December 31, 2011, its average daily production were 7,499 barrels of oil equivalent per day. As of December 31, 2011, it had a total of 974 gross vertical drilling locations, including 115 related to acreage under option, in the trend. As of December 31, 2011, the Company�� properties included approximately 92 gross active producing wells, 95% of, which it operate, and in which it held an average working interest of approximately 99% across its 77,100 net acre leasehold. During March 31, 2012, the Company continued its drilling program, spudding 14 wells, of which nine are producing, three are being drilled and two are waiting to be completed. As of December 331, 2011, it averaged daily production is approximately 9,000 barrels of oil equivalent per day.

Pine Prairie

The Company�� properties in the Pine Prairie area represented 46% of its total proved reserves as of December 31, 2011. During 2011, the Company�� average production from these properties was 3,793 net barrels of oil equ! ivalent per day, consisting of 2,143 barrels of oil, 565 barrels of natural gas liquidations (NGLs) and 6,508 million cubic feet of natural gas per day. As of December 31, 2011, it held an average working interest and average net revenue interest of 92.2% and 68.9%, respectively, on its acreage in Pine Prairie area. The Company has an additional 194 identified drilling locations in this area based primarily on 10-acre spacing.

South Bearhead Creek/Oretta

The Company�� properties in the South Bearhead Creek/Oretta area represented 20.3% of its total proved reserves as of December 31, 2011. During 2011, the Company�� average production from these properties was 4,367 net barrels of oil equivalent per day, consisting of 2,196 barrels of oil, 438 barrels of NGLs and 10,396 million cubic feet of natural gas per day. During 2011, these wells produced at an average daily rate of 2,413 net barrels of oil equivalent per day. As of December 31, 2011, it held an average working interest and average net revenue interest of 100% and 78.5%, respectively, on its acreage in South Bearhead Creek/Oretta area. The Company has an additional 43 identified drilling locations in this area based primarily on 40-acre spacing.

West Gordon

The Company�� properties in the West Gordon area represented 21% of its total proved reserves as of December 31, 2011. During 2011, the Company�� average production from these properties was 1,002 net barrels of oil equivalent per day, consisting of 617 barrels of oil, 68 barrels of NGLs and 1,901 million cubic feet of natural gas per day. As of December 31, 2011, it held an average working interest and average net revenue interest of 95.9% and 71.2%, respectively, on its acreage in West Gordon area. The Company has an additional 74 identified drilling locations in this area based primarily on 40-acre spacing.

North Cowards Gully

The Company�� properties in the North Cowards Gully area represented 11.5% of ! its total! proved reserves as of December 31, 2011. During 2011, the Company�� average production from these properties was 149 net barrels of oil equivalent per day consisting of 103 barrels of oil, 11 barrels of NGLs, and 211 million cubic feet of natural gas per day. As of December 31, 2011, it held an average working interest and average net revenue interest of 94.3% and 71.2%, respectively, on its acreage in North Cowards Gully area. The Company has an additional 95 identified drilling locations in this area based primarily on 40-acre spacing.

Best Energy Companies To Watch For 2014: HRT Participacoes em Petroleo SA (HRTPY.PK)

HRT Participacoes em Petroleo SA, formerly BN 16 Participacoes Ltda, is a Brazil-based holding company engaged in the oil and gas industry. The Company is primarily involved in the exploration and production (E&P) of oil and natural gas in Brazil and Namibia. Through its subsidiaries, it is active in the geophysical and geological research, exploration, development, production, import, export and sale of oil and natural gas, as well as in the provision of air logistics services in transporting people and equipment related to oil and gas activities in the exploratory campaign in the Solimoes Basin. As of December 31, 2011, the Company had seven subsidiaries, including Integrated Petroleum Expertise Company Servicos em Petroleo Ltda (IPEX), HRT O&G Exploracao e Producao de Petroleo Ltda, HRT Netherlands BV, HRT America Inc, HRT Africa, HRT Canada Inc and Air Amazonia Servicos Aereos Ltda.

Sunday, August 18, 2013

Earnings Preview: Banks, Techs, And Healthcare Report

The second quarter earnings season is well on its way and this week will be jam packed with yet another round of reports. Last week, aluminum giant Alcoa (AA) reported a $119 million second quarter loss due to weak aluminum prices, putting the bellwether's EPS at a mere 7 cents per share, but still slightly higher than Wall Street estimates. On Friday, JPMorgan (JPM) reported second quarter earnings rising 31%, while Wells Fargo & Co. (WFC) net income surged 19% . 

Below, we highlight the earnings lineup for the week ahead:

A Big Week For Big BanksInvestors should keep a close eye on financials and banking ETFs as several bellwethers post their second quarter results:

Charles Schwab (SCHW): On Tuesday, this investment bank is expected to post earnings at $0.19 per share and quarterly revenues at $1.3 billion.
Goldman Sachs Group (GS): This bellwether is expected to report an EPS of $2.82, down from the previous quarter's $4.29 reading. Revenues are also forecasted to come in lower at $8.0 billion.U.S. Bancorp (USB): EPS for this regional bank is estimated to rise to $0.76 from the previous $0.73 EPS recording. The company reports on Wednesday.The PNC Financial Services Group, Inc. (PNC): Another regional bank, PNC is expected to post earnings at $1.62 per share and revenues at $3.9 billion on Wednesday.Bank of America Corp (BAC): EPS estimates for this bellwether are around $0.26, slightly higher than the previous two quarters' $0.21 reading. Revenues are expected to dip slightly to $22.8 billion .American Express Co (AXP): On Wednesday, this credit card giant is expected to post earnings at $1.22 per share and revenues at $8.3 billion.Morgan Stanley (MS): This investment bank will report on Thursday; estimates for EPS are around $0.45 while revenues are expected to fall slightly to $7.9 billion.BB&T Corp. (BBT): This regional bank is expected to report EPS at $0.74 and revenues at $2.5 billion.Tech Reports On TapA number of tech giants will also be reporting thi! s week; investors should keep close watch on Technology Equities and Communications Equities ETFs:

Yahoo! (YHOO): On Tuesday, this California-based tech giant is expected to post earnings at $0.30 per share and revenues at $1.1 billion.International Business Machines Corp (IBM): EPS estimates for this chip maker are around $3.80, up from the previous quarter's $3.00 reading.Intel Corp (INTC): This popular semiconductor provider is expected to report earnings at $0.40 per share and revenues at $12.9 billion.eBay, Inc (EBAY): On Wednesday, this internet retailer is slated to report EPS at $0.63 and an uptick in revenues to $3.9 billion .Verizon Communications (VZ): EPS estimates for this telecom stock are around $0.73, while revenues are expected to rise slightly to $29.8 billion.Microsoft (MSFT): On Thursday, this PC maker is expected to report a rise in earnings to $0.73 per share and revenues at $20.8 billion.Google, Inc (GOOG): This internet giant is slated to report earnings on Thursday; analysts expect EPS to come in at $10.79, lower than the previous quarter's $11.58 reading, and revenues at $14.5 billion.Healthcare Stocks To Post EarningsSeveral health & biotech companies will also be reporting:

Johnson & Johnson (JNJ): This mega-conglomerate is slated to report earnings this Tuesday. EPS is expected to come in at $1.39 and revenues at $17.7 billion.Abbott Laboratories (ABT): On Wednesday, this pharma company is expected to report earnings at $0.44 per share and revenues at $5.5 billion.UnitedHealth Group, Inc (UNH): EPS estimates for this healthcare provider are around $1.25 .Stryker Corporation (SYK): This medical equiptment maker is expected to report earnings at $1.03 per share and revenues at $2.2 billion.Consumer, Energy & Industrials ReportThe following big name companies from the consumer staples, energy, industrials sectors are reporting:

The Coca-Cola Co. (KO): This beverage behemoth is slated to report earnings on Tuesday; analysts expect ! EPS to co! me in significantly higher at $0.63, compared to the previous quarter's $0.46 reading, and revenues at $13.0 billion.Philip Morris (PM): On Thursday, this tobacco manufacturer is expected to report earnings at $1.42 per share and revenues at $8.2 billion .Schlumberger (SLB): EPS estimates for his oil equipment provider are around $1.10, while revenues are expected to come in at $11.1 billion. Honeywell International (HON): This diversified industrial giant is expected to report earnings at $1.21 per share and revenues at $9.7 billion.General Electric (GE): On Friday, this utilities company is expected to post EPS at $0.36 and revenues at $35.7 billion.Follow me on Twitter @DPylypczak.

Disclosure: No positions at time of writing.

Saturday, August 17, 2013

Wednesday’s ETF Chart To Watch: XHB Flirting With ...

5 Best Small Cap Stocks To Invest In 2014

Stocks gave into bearish pressures on Tuesday as mixed earnings reports from industry bellwethers clouded the headlines. Disappointing results from Coca-Cola mixed with hawkish comments from Kansas City Fed President Esther George prompted many to lock-in profits ahead of Fed Chairman Bernanke's testimony to Congress taking place later today through Thursday .

Our ETF to watch for today is the SPDR Homebuilders ETF which could experience volatile trading as investors react to the latest housing market data. Analysts are expecting for June housing starts to come in at 950,000, which would mark a healthy jump from the previous month's reading of 914,000.

Chart Analysis

Consider XHB's one-year daily performance chart below. This ETF has staged an encouraging rebound since bouncing off its 200-day moving average (yellow line) on 6/24 following the Fed stimulus-fear induced sell-off which began on 5/22/2013. While the recent rally is by all means a positive for the security, investors should be aware of a potentially worrisome technical pattern at hand; notice how XHB has posted lower-highs and lower-lows since peaking at $32.69 a share. XHB is undeniably still in a strong uptrend from a long-term perspective, however, the recent trend of lower-highs may suggest that fewer buyers have been stepping in after each pullback, which could signal a potential trend reversal .

Click to EnlargeWe advise conservative investors to wait and see how XHB behaves around its upcoming support at the $30 level before jumping in long here .

OutlookIf the latest housing starts data comes in above expectations, XHB should have the wind at its back for the day; in terms of upside, this ETF has upcoming resistance around $32 a share. On the other hand, disappointing data can inspire another sell-off in the homebuilders sector; in terms of! downside, this ETF has immediate support at $30 a share followed by the $28 level. As always, investors of all experience levels are advised to use stop-loss orders and practice disciplined profit-taking techniques.

Follow me on Twitter @SBojinov

Disclosure: No positions at time of writing.

Friday, August 16, 2013

Top Energy Stocks To Buy Right Now

There has been a lot of drama in the upstream oil and gas MLP sector this year. Negativity from a variety of sources has pulled down�LINN Energy� (NASDAQ: LINE  ) , while also taking down peers like�BreitBurn Energy Partners� (NASDAQ: BBEP  ) . This has created quite a headache for both management teams, making it tough for them to do what they do best, which is acquire mature oil and gas properties.

Source: LINN Energy

For years the model had been to acquire an asset package from an exploration and production company and use a combination of debt and equity to fund the purchase. However, this year's drama has really taken the equity component off the table as a funding option for BreitBurn because its units are now so undervalued. That didn't stop the company from completing its most ambitious deal to date.

Top Energy Stocks To Buy Right Now: Spire Corporation(SPIR)

Spire Corporation develops, manufactures, and markets engineered products and services in the areas of PV solar, biomedical, and optoelectronics. It offers specialized equipment for the production of terrestrial photovoltaic modules from solar cells; and photovoltaic systems for application to powering buildings with connection to the utility grid, as well as supplies photovoltaic materials. It also provides surface treatments to manufacturers of orthopedic, cardiovascular, and other medical devices; and performs sponsored research programs into practical applications of biomedical and biophotonic technologies. In addition, the company offers custom compound semiconductor foundry and fabrication services to customers involved in biomedical/biophotonic instruments, telecommunications, and defense applications. Its services comprise compound semiconductor wafer growth, other thin film processes, and related device processing. Further, the company provides materials testing s ervices; and performs services in support of sponsored research into practical applications of optoelectronic technologies. The company offers its products primarily through its sales personnel in the United States, Europe, Africa, and Asia. Spire Corporation was founded in 1969 and is headquartered in Bedford, Massachusetts.

Advisors' Opinion:
  • [By Putnam]

    Spire Corp.(NASDAQ: SPIR) closing price in the stock market Tuesday, Jan. 3, was $0.73. SPIR is trading -5.05% below its 50 day moving average and -52.78% below its 200 day moving average. SPIR is -88.23% below its 52-week high of $6.20 and 37.74% above its 52-week low of $0.53. SPIR‘s PE ratio is N/A and its market cap is $6.10M.

    Spire Corp. develops, manufactures, and markets engineered products and services in the areas of PV solar, biomedical, and optoelectronics.

Top Energy Stocks To Buy Right Now: Caiterra International Energy Corp (CTI)

CaiTerra International Energy Corporation (Caiterra), formerly Cyterra Capital Corp., is a Canada-based company is engaged in the exploration and development of oil and gas properties. The Company�� project includes Faust, Amadou and Lac La Biche. On March 9, 2012, the Company completed its qualifying transaction with West Pacific Petroleum Inc. (WPP), pursuant to which the Company acquired all of WPP�� working interests in certain petroleum and natural gas leases and an oil sand lease in the Lac La Biche and Amadou Projects located in Alberta, Canada and certain other assets (the QT Oil and Gas Properties) from West Pacific Petroleum Inc. (WPP). On December 17, 2012 the Company acquired the Faust Property located just north of the Swan Hills oil field and south of the Town of Slave Lake.

Hot Heal Care Companies To Buy For 2014: Halliburton Company(HAL)

Halliburton Company provides various products and services to the energy industry for the exploration, development, and production of oil and natural gas worldwide. It operates in two segments, Completion and Production, and Drilling and Evaluation. The Completion and Production segment offers production enhancement services, completion tools and services, cementing services, and Boots & Coots. Its production enhancement services include stimulation and sand control services; completion tools and services comprise subsurface safety valves and flow control equipment, surface safety systems, packers and specialty completion equipment, intelligent completion systems, expandable liner hanger systems, sand control systems, well servicing tools, and reservoir performance services; cementing services consist of bonding the well and well casing, while isolating fluid zones and maximizing wellbore stability, and casing equipment; and Boots & Coots include well intervention services , pressure control, equipment rental tools and services, and pipeline and process services. The Drilling and Evaluation segment provides field and reservoir modeling, drilling, evaluation, and wellbore placement solutions that enable customers to model, measure, and optimize their well construction activities. Its services comprise fluid services, drilling services, drill bits, wireline and perforating services, testing and subsea services, software and asset solutions, and integrated project management and consulting services. The company serves independent, integrated, and national oil companies. Halliburton Company was founded in 1919 and is headquartered in Houston, Texas.

Advisors' Opinion:
  • [By Victor Mora]

    Halliburton is a bellwether in the energy space that provides essential oil and gas products and services worldwide. A recent earnings beat has investors in the company wanting more. The stock has seen a steady rise over the last several months. Over the last four quarters, investors have had mixed feelings about earnings reports as earnings have been decreasing while revenue figures have been increasing. Relative to its peers and sector, Halliburton has been a year-to-date performance leader. Look for Halliburton to continue to OUTPERFORM.

  • [By Victor Mora]

    Halliburton provides essential oil and gas products and services worldwide. The company has been in the news recently, owing to the company’s latest earnings report, as well as a lawsuit involving the 2010 Deepwater Horizon spill. The stock has been steadily rising, and is now trading near highs for the year. Over the last four quarters, investors in the company have mostly been pleased, as earnings have been mixed, while revenue figures have been rising. Relative to its peers and sector, Halliburton has been a year-to-date performance leader. Look for Halliburton to OUTPERFORM.

Top Energy Stocks To Buy Right Now: Boardwalk Pipeline Partners LP (BWP)

Boardwalk Pipeline Partners, LP is a limited partnership company. The Company owns and operates three interstate natural gas pipeline systems including integrated storage facilities. Its business is conducted by its primary subsidiary, Boardwalk Pipelines, LP (Boardwalk Pipelines) and its subsidiaries, Gulf Crossing Pipeline Company LLC (Gulf Crossing), Gulf South Pipeline Company, LP (Gulf South) and Texas Gas Transmission, LLC (Texas Gas) (together, the operating subsidiaries), which consist of integrated natural gas pipeline and storage systems. During the year ended December 31, 2011, it formed Boardwalk Midstream, LP (Midstream), and its operating subsidiary, Boardwalk Field Services, LLC (Field Services), which is engaged in the natural gas gathering and processing business. In December 2011, Boardwalk HP Storage Company, LLC (HP Storage), a joint venture between Boardwalk Pipelines and Boardwalk Pipelines Holding Corp. (BPHC) acquired Petal Gas Storage, L.L.C. (Petal), Hattiesburg Gas Storage Company (Hattiesburg). In December 2011, it acquired a 20% equity interest in HP Storage.

The Company�� pipeline systems originate in the Gulf Coast region, Oklahoma and Arkansas and extend north and east to the midwestern states of Tennessee, Kentucky, Illinois, Indiana and Ohio. It serves a mix of customers, including producers, local distribution companies (LDCs), marketers, electric power generators, direct industrial users and interstate and intrastate pipelines. The Company provides a portion of its pipeline transportation and storage services, through firm contracts, under which the Company�� customers pay monthly capacity reservation charges. Other charges are based on actual utilization of the capacity under firm contracts and contracts for interruptible services. During 2011, approximately 82% of its revenues were derived from capacity reservation charges under firm contracts; approximately 14% of its revenues were derived from charges-based on actual utilization under firm contr! acts, and approximately 4% of its revenues were derived from interruptible transportation, interruptible storage, parking and lending (PAL) and other services. Its expansion projects include South Texas Eagle Ford Expansionand Marcellus Gathering System and HP Storage.

Pipeline and Storage Systems

The Company�� operating subsidiaries own and operate approximately 14,200 miles of pipelines, directly serving customers in twelve states and indirectly serving customers throughout the northeastern and southeastern United States through numerous interconnections with unaffiliated pipelines. In 2011, its pipeline systems transported approximately 2.7 trillion cubic feet of gas. Average daily throughput on its pipeline systems during 2011 was approximately 7.3 billion cubic feet. Its natural gas storage facilities are comprised of eleven underground storage fields located in four states with aggregate working gas capacity of approximately 167.0 billion cubic feet. the Company operates the assets of HP Storage on behalf of the joint venture.

The principal sources of supply for our pipeline systems are regional supply hubs and market centers located in the Gulf Coast region, including offshore Louisiana, the Perryville, Louisiana area, the Henry Hub in Louisiana and the Carthage, Texas area. Its pipelines in the Carthage, Texas area provide access to natural gas supplies from the Bossier Sands, Barnett Shale, Haynesville Shale and other gas producing regions in eastern Texas and northern Louisiana. The Henry Hub serves as the designated delivery point for natural gas futures contracts traded on the New York Mercantile Exchange. Its pipeline systems also have access to unconventional mid-continent supplies, such as the Woodford Shale in southeastern Oklahoma and the Fayetteville Shale in Arkansas. The Company also accesses the Eagle Ford Shale in southern Texas; wellhead supplies in northern and southern Louisiana and Mississippi; and Canadian natural gas through an unaffil! iated pip! eline interconnect at Whitesville, Kentucky.

Gulf Crossing

The Company�� Gulf Crossing pipeline system originates near Sherman, Texas, and proceeds to the Perryville, Louisiana area. The market areas are in the Midwest, Northeast, Southeast and Florida through interconnections with Gulf South, Texas Gas and unaffiliated pipelines.

Gulf South

The Company�� Gulf South pipeline system is located along the Gulf Coast in the states of Texas, Louisiana, Mississippi, Alabama and Florida. The on-system markets directly served by the Gulf South system are generally located in eastern Texas, Louisiana, southern Mississippi, southern Alabama, and the Florida Panhandle. These markets include LDCs and municipalities located across the system, including New Orleans, Louisiana; Jackson, Mississippi; Mobile, Alabama; and Pensacola, Florida, and other end-users located across the system, including the Baton Rouge to New Orleans industrial corridor and Lake Charles, Louisiana. Gulf South also has indirect access to off-system markets through numerous interconnections with unaffiliated interstate and intrastate pipelines and storage facilities. These pipeline interconnections provide access to markets throughout the northeastern and southeastern United States.

Gulf South has two natural gas storage facilities. The gas storage facility located in Bistineau, Louisiana, has approximately 78 billion cubic feet of working gas storage capacity from which Gulf South offers firm and interruptible storage service, including no-notice service. Gulf South�� Jackson, Mississippi, gas storage facility has approximately five billion cubic feet of working gas storage capacity, which is used for operational purposes and is not offered for sale to the market.

Texas Gas

The Company�� Texas Gas pipeline system originates in Louisiana, East Texas and Arkansas and runs north and east through Louisiana, Arkansas, Mississippi, Tennessee, K! entucky, ! Indiana, and into Ohio, with smaller diameter lines extending into Illinois. Texas Gas directly serves LDCs, municipalities and power generators in its market area, which encompasses eight states in the South and Midwest and includes the Memphis, Tennessee; Louisville, Kentucky; Cincinnati and Dayton, Ohio, and Evansville and Indianapolis, Indiana metropolitan areas. Texas Gas also has indirect market access to the Northeast through interconnections with unaffiliated pipelines. Texas Gas owns nine natural gas storage fields, of which it owns the majority of the working and base gas. Texas Gas uses this gas to meet the operational requirements of its transportation and storage customers and the requirements of its no-notice service customers.

Field Services

In 2011, the Company formed its Field Services subsidiary and transferred to it approximately 100 miles of gathering and transmission pipeline. In 2012, the Company transferred to Field Services an additional 240 miles of pipeline and two compressor stations. Field Services is developing gathering and processing capabilities in south Texas and Pennsylvania.

Advisors' Opinion:
  • [By Michael Brush]

    As for Boardwalk Pipeline Partners (NYSE:BWP), it operates natural gas pipelines in the U.S. transporting about 10% of the nation's natural gas on an annual basis. Although it generates just 6% of Loews' overall net income, it does so on a consistent basis. Personally, I like the natural gas tie-in. Lastly, it owns 100% of privately operated HighMount Exploration and Production, a Texas-based company that produces natural gas, LNG and oil in Texas and Oklahoma. In 2012, as a result of lower natural gas prices, it's had to take large impairment charges on its natural gas revenue. I'd expect its situation to improve in 2013. Loews has increased its book value per share by approximately 9.5% on an annualized basis over the past five years. Owning its stock instead of the energy-related holdings directly allows you to benefit from its other holdings at the same time. 

Top Energy Stocks To Buy Right Now: Energy XXI(Bermuda)

Energy XXI (Bermuda) Limited, together with its subsidiaries, engages in the acquisition, exploration, development, production, and operation of oil and natural gas properties onshore in Louisiana and Texas, and offshore in the Gulf of Mexico. The company operates or has interest in 419 gross producing wells in 41 producing fields on 254,891 net developed acres. As of June 30, 2011, its net proved reserves were 116.6 million barrels of oil equivalent. The company was founded in 2005 and is based in Hamilton, Bermuda.

Tuesday, August 13, 2013

Can AIG Continue Its Recovery?

With shares of American International Group (NYSE:AIG) trading around $44, is AIG an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

AIG is an international insurance company, serving customers in more than 130 countries. AIG companies serve commercial, institutional, and individual customers through property-casualty networks of any insurer. In addition, AIG companies are providers of life insurance and retirement services. AIG's segments include Chartis, SunAmerica Financial Group, Aircraft Leasing, and Other Operations. The company suffered greatly during the 2008 Financial Crisis but is now on the road to recovery. Insurance companies will continue to rise to demand as new and exisiting risks continue to be of concern for businesses and consumers worldwide.

NEW! Discover a new stock idea each week for less than the cost of 1 trade. CLICK HERE for your Weekly Stock Cheat Sheets NOW!

5 Best Penny Stocks For 2014

T = Technicals on the Stock Chart are Strong

AIG stock saw significant selling during the 2008 Financial Crisis and has yet to fully recover. In fact, the stock was on the verge of bankruptcy. The stock has been trending higher over the last couple of years and is now trading at decisive price levels. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, AIG is trading above its rising key averages which signal neutral to bullish price action in the near-term.


(Source: Thinkorswim)

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

Implied Volatility (IV)

30-Day IV Percentile

90-Day IV Percentile

AIG Options




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

Put IV Skew

Call IV Skew

June Options



July Options



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

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

E = Earnings Are Mixed Quarter-Over-Quarter

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

2013 Q1

2012 Q4

2012 Q3

2012 Q2

Earnings Growth (Y-O-Y)





Revenue Growth (Y-O-Y)





Earnings Reaction





AIG has seen mixed earnings and revenue figures over most the last four quarters. From these figures, the markets have been optimistic about most of AIG’s recent earnings announcements.

NEW! Discover a new stock idea each week for less than the cost of 1 trade. CLICK HERE for your Weekly Stock Cheat Sheets NOW!

P = Excellent Relative Performance Versus Peers and Sector

How has AIG stock done relative to its peers, Berkshire Hathaway (NYSE:BRKB), American Financial Group (NYSE:AFG), OneBeacon Insurance Group (NYSE:OB), and sector?


Berkshire Hathaway

American Financial Group

OneBeacon Insurance Group


Year-to-Date Return






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


AIG provides valuable insurance products that ease concerns for consumers and companies participating in various industries worldwide. The stock was severely damaged during the 2008 Financial Crisis but is now beginning to recover. Earnings and revenue figures have been improving which has kept investors happy. Relative to its peers and sector, AIG has been a year-to-date performance leader. Look for AIG to OUTPERFORM.

Friday, August 9, 2013

These Winners Are Defying the Dow's Reversal

Throughout the past four years, the bull market has repeatedly withstood challenges to its endurance, often coming back from substantial morning losses to finish higher on the day. Today, though, the market has followed the opposite trend: Early gains have given way to losses as investors anticipate potentially market-moving comments from various Federal Reserve officials and the Bank of Japan. With so much riding on global economic growth and so much policy action aimed at stoking greater business activity, investors won't be convinced that the economy can move forward on its own until they actually see it with their own two eyes. Until that happens, nervousness like we've seen today will persist. As of 1:30 p.m. EDT the nervousness was winning out, sending the Dow Jones Industrials (DJINDICES: ^DJI  ) down 95 points, or 0.63%.

Yet when you look at the winners of today's session, you'll notice that they largely represent follow-through gains from the news of previous sessions. Merck (NYSE: MRK  ) is 2.4% higher, touching another multiyear high after gaining almost 4% yesterday on the heels of a positive announcement about its promising early-stage cancer treatment. What investors might be realizing is that yesterday's news on Merck isn't just about a single treatment, but rather an entire new class of treatments that stimulate the PD-1 protein within a patient's body in order to fight cancer. Immunotherapeutic techniques aren't brand new, but as Merck gains expertise in dealing with this particular treatment, it's also building a foundation to expand its overall presence in the immunotherapy niche, and that arguably has greater long-term value than any single treatment.

Intel (NASDAQ: INTC  ) has climbed about 2% today, adding to yesterday's 4% jump. Considering how important it is that Intel builds its presence in the mobile-device market, the introduction of Samsung's Galaxy Tab 3 tablet with an Intel-branded Atom Clover Trail+ dual-core processor marks a potential breakthrough for the company. That Intel has traded at such modest valuations owes to its seeming inability to make its presence felt in the mobile space. Although a single device doesn't create a trend, Intel's stock could see more big gains if the company can follow up on this win by getting its processors into other high-profile products.

Finally, AT&T (NYSE: T  ) has climbed 1.6%. Last night's news that the telecom giant is working with IBM to build more efficient mobile apps probably wasn't enough to move the stock, and AT&T still faces potential restrictions in an FCC auction of wireless spectrum scheduled for next year to ensure that smaller carriers are able to get a share of available spectrum. The more likely explanation for the gain is simply that the high-yielding stock got beaten down especially hard during last week's run-up in interest rates, and as the bond market has shown signs of stabilizing at least for now, a small bounce for AT&T stock seems warranted. In the long run, AT&T should be able to count on its reliable revenue stream from wireless customers well into the future.

More on Merck
Merck still faces the challenge of patent expirations and pipeline problems, but it's looking a lot more promising as a solid dividend play. In a new premium research report on Merck, The Fool tackles all of the company's moving parts, its major market opportunities, and reasons both to buy and to sell. To find out more, click here to claim your copy today.

Wednesday, August 7, 2013

Top Small Cap Companies To Invest In 2014

The following video is from Monday's MarketFoolery podcast, in which host Chris Hill and analysts Jason Moser and Matt Koppenheffer discuss the top business and investing stories of the day.

Pimco bond manager Bill Gross is bearish on bonds. The manager of the world's largest bond fund�tweeted that "the secular 30-year bull market in bonds likely ended 4/29/2013." In this installment of MarketFoolery, our analysts talk about what it means for investors.

The best investing approach is to choose great companies and stick with them for the long term. The Motley Fool's free report "3 Stocks That Will Help You Retire Rich" names stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of.�Click here now�to keep reading.

Top Small Cap Companies To Invest In 2014: Northern Technologies International Corporation(NTIC)

Northern Technologies International Corporation develops, markets, and sells rust and corrosion inhibiting products and services under the ZERUST name to the automotive, electronics, electrical, mechanical, military, retail consumer, and oil and gas markets primarily in the North America, South America, Europe, Asia, and the Middle East. It also sells a portfolio of bio-based and biodegradable polymer resin compounds and finished products marketed under the Natur-Tec brand. The company?s ZERUST rust and corrosion inhibiting products include plastic and paper packaging, liquids and coatings, rust removers and cleaners, diffusers, and variations of these products designed for the oil and gas industry. It also offers on-site technical consulting for rust and corrosion prevention issues. In addition, the company offers Polymer Energy technology and equipment that converts plastic waste into diesel, gasoline, and heavy fractions. Northern Technologies International Corporation sells its solutions through a direct sales force, as well as a network of independent distributors and agents, subsidiaries, and joint venture arrangements. The company was founded in 1970 and is headquartered in Circle Pines, Minnesota.

Top Small Cap Companies To Invest In 2014: BLRDS Emerging Markets 50 ADR Index Fund (ADRE)

BLDRS Emerging Markets 50 ADR Index Fund (the Fund) is a unit investment trust designed to provide investment results that correspond generally to the price and yield performance of the publicly traded depositary receipts comprising The Bank of New York Emerging Markets 50 ADR Index. As of September 30, 2006, The BNY Emerging Markets 50 ADR Index included 50 component depositary receipts representing the securities issued by 50 of the most actively traded companies from the international and emerging markets having a free-float market capitalization ranging from approximately $3 billion to over $30 billion.

The Fund's portfolio consists of substantially all of the securities, in substantially the same weighting, as the component securities of The BNY Emerging Markets 50 ADR Index. The BNY Emerging Markets 50 ADR Index is a capitalization-weighted index.

Top 10 Stocks To Invest In 2014: Anglesey Mining(AYM.L)

Anglesey Mining plc, together with its subsidiaries, engages in the exploration and development of mineral properties. The company principally holds an interest in Labrador iron project that develops 20 direct shipping iron ore deposits located in north-eastern Quebec, Canada. It also owns Parys Mountain project that explores zinc, copper, lead, silver, and gold located in north Wales, the United Kingdom. The company is based in Anglesey, the United Kingdom.

Monday, August 5, 2013

SAP Inks Mobile Security Partnership Deal

In an effort to expand its enterprise mobile application security offerings, SAP (NYSE: SAP  ) has reached an agreement with Mocana to resell its Mocana Mobile App Protection (MAP) solution, the companies announced today.

MAP will be marketed as SAP Mobile App Protection, part of SAP's Mobile Secure Portfolio offerings. The goal of the mobile security product is to enable users to add mobile usage and OS security policies for both iOS and Android apps, without the need to write code, and to expedite the process of rolling out secure mobile applications.

Top 10 Insurance Companies To Watch In Right Now

The president of SAP's mobile division, Sanjay Poonen, said: "This announcement helps reaffirm our commitment to be at the forefront of enterprise mobile app security and to provide customers with the highest level of viability, management and security available today."

CEO of Mocana, Adrian Turner, added, "Whether it's application development, device management, scalable app distribution or now application security, SAP continues to see what matters most for enterprise mobility ahead of the rest."

Today's announcement was made at SAPHIRE NOW, an industry event hosted by SAP. Terms of the reselling arrangement were not announced.


Sunday, August 4, 2013

Verastem: Stem cell cancer speculation

Benjamin SheperdStem cells are the fundamental building blocks of humans. As undifferentiated cells, they have the ability to become part of a calf muscle, a neuron, cornea or anything else in the body.

Scientists have long believed that the flexibility of stem cells can be harnessed to cure intractable human diseases, such as Alzheimer's, Parkinson's or diabetes.

Unfortunately, stem cells are manifest in cancerous tumors as well. Cancer stem cells (CSC) play a role in metastasis, the spread of cancer from the original tumor site to other areas of the body, by breaking away and implanting themselves in other organs.

A small biotech company with a market cap just shy of $200 million, Verastem (VSTM) is working to develop drugs that target CSCs and can be administered in conjunction with a patient's chemotherapy regimen.

Verastem went public just over a year ago and currently has five compounds in various stages of development, three of which are extremely promising product candidates.

Two compounds focus on disrupting CSCs' production of focal adhesion kinase (FAK), a protein that regulates how cells stick to one another as well as how they spread.

CSCs, particularly those of highly malignant cancers, produce FAK at much higher rates and via different pathways than other cells, allowing the development of small molecule drugs that specifically target those cells.

Verastem's VS-6063 is on track to begin trials in treating mesothelioma; in a limited-scope, small-scale trial, VS-6030 showed signs of activity and a pivotal trial is expected to begin around midyear.

The compound also showed promise in treating ovarian cancer and recruitment is underway for a phase 1/2 trial. The company's VS-4718, which also focuses on FAK disruption, is slated to begin trials later this year.

VS-5584 is slated to begin phase 1 trials in the back half of the year, as a PI3K/mTor pathway inhibitor. In many cancers, that pathway is overactive, which allows cancer cells to proliferate unchecked.

None of these product candidates are cancer treatments in themselves; each is designed for administration in conjunction with other chemotherapies.

Significant testing remains before any of Verastem's products actually come to market, but they enjoy an advantage because they're focused on cancers that have shown stubborn resistance to conventional treatments.

With about $90 million in cash or easily convertible assets, Verastem is well positioned to fund itself through the clinical trials now on its docket.

However, if the company runs into trouble, Verastem has several licensing agreements in place with pharmaceutical companies such as Pfizer, as well as academic institutions such as Harvard University and the Massachusetts Institute of Technology.

All of these deep-pocketed institutions have financial incentive to ensure Verastem's clinical trials are brought to fruition.

While only appropriate for aggressive investors, Verastem's progress in cutting-edge cancer treatment rates it a buy under $13.

Saturday, August 3, 2013

Best Casino Companies To Own In Right Now

In the following video, Fool contributor Matt Thalman discusses a few different reasons he believes investors should stay away from the casino and online gambling operators until online gambling revenues are proven over the next few quarters.

One front-runner in the online poker scene is Zynga (NASDAQ: ZNGA  ) , a company that Matt believes would be better off in the long run if it made one strategic move.

To find out what that is, and for a few reasons investors should stay on the sidelines, click on the video.

More Foolish insight
For many companies, successfully capitalizing on a booming Chinese economy is like winning the jackpot. That's indeed the case for gaming company Las Vegas Sands, which made a big bet on Macau gaming about a decade ago that's paid off in spades. The company is now looking to spread its empire further, but will it be able to replicate its prior successes? Learn about all these opportunities, and the risks they pose, in our premium report on Las Vegas Sands. Be sure to claim your copy today by clicking here.

Best Casino Companies To Own In Right Now: (XTRN)

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

Best Casino Companies To Own In Right Now: Boyd Gaming Corporation(BYD)

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

Advisors' Opinion:
  • [By Jeanine Poggi]

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

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

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

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

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

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

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

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

  • [By Hesler]

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

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

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

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

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

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

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

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

Top Tech Companies To Own In Right Now: Pinnacle Entertainment Inc.(PNK)

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

Advisors' Opinion:
  • [By Sherry Jim]

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

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

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

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

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

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

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

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

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

Best Casino Companies To Own In Right Now: Wynn Resorts Limited(WYNN)

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

Advisors' Opinion:
  • [By Jeanine Poggi]

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

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

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

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

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

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

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

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

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

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

Best Casino Companies To Own In Right Now: MGM Resorts International(MGM)

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

Advisors' Opinion:
  • [By Goodwin]

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

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

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

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

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

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

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

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

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

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

Best Casino Companies To Own In Right Now: Penn National Gaming Inc.(PENN)

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

Advisors' Opinion:
  • [By Quickel]

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

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

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

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

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

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

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

Thursday, August 1, 2013

Taking Control of Your Personal Debt

We've all made financial commitments like mortgages, rent payments, college tuition, and utility bills. When you combine those commitments, you end up with the foundation for a budget. But what happens when those commitments exceed your income?

After we become accustomed to a certain lifestyle, it can be difficult to make adjustments when the amount of money coming in decreases. But unlike the federal government, real people don't have the option to take a vote and raise their personal debt ceiling. In the real world, increasing your personal debt ceiling only works for so long. At that point, there are only two options:

Earn more. Spend less.

Simple math, tough choices.

Yet again we have another example of how painful it can be when the cold, hard facts of arithmetic smash against the complex, emotional issues of money. The math is simple: If you spend more than you earn, at some point things will have to change.

But once we move beyond the math, things start to get fuzzy fast. Most of us can relate to that sick feeling of comparing what we owe to the amount of money sitting in the bank and knowing it isn't enough, or the pain of telling children that we simply can't afford to do something that was incredibly important to them, or the awkward discussion with a spouse about which extra expense we have to cut to make ends meet. These conversations aren't easy, but they have to happen if we want things to change. At some point we can't continue to kick the can down the road.

To add to the frustration, these decisions are intensely personal. We all want easy answers from some personal finance guru who will tell us what to do. We want a prescription, but this discussion doesn't work that way.

Sure, there are books that will provide a framework, and learning from others (including Elmo) that have been through this can be helpful. But in the end, your situation is absolutely unique. It will require you to come up with a plan that works for you. Often what one family defines as a need another will view as a luxury, and neither one of them is wrong. In the end, they will both need to satisfy the equation on the napkin: Their income must be greater than or equal to their expenses.

At some point in your life, you've done the math and realized that your financial commitments were out of whack with your income. How did you fix your problem? If you have children, how are you helping them understand the need for financial balance?

A version of this post appeared previously at The New York Times.

Carl Richards is a financial planner and the director of investor education for the BAM ALLIANCE, a community of more than 130 independent wealth management firms throughout the United States. Visit Behavior Gap for more of Carl's sketches and writings.

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