Saturday, September 28, 2013

Hot Undervalued Stocks To Buy For 2014

LONDON --�As a general rule, I prefer investing in companies whose share price has fallen rather than risen, because there's a better chance of bagging a bargain.

That strategy isn't foolproof. Two years ago, I chose struggling insurer�Aviva�over high-flying�Legal & General� (LSE: LGEN  ) �and got it badly wrong. Aviva has continue to flounder, Legal & General has soared. It is up 62% over the past 12 months alone. But can it continue this surge?

I've seen at least two brokers claiming Legal & General remains undervalued, suggesting further fun is on the way. Legal & General is rightly feeling chipper having just posted "record assets, sales and cash generation" during the first quarter. New business sales shot up an impressive 28% to 555 million pounds, with its U.K. and U.S. businesses both performing strongly, while total assets under management grew 9% to to 441 billion pounds. Annuity premiums also grew strongly, as did group protection sales, which rose a mighty 67% in what is a notoriously sluggish market.

Hot Undervalued Stocks To Buy For 2014: Schlumberger N.V.(SLB)

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

Advisors' Opinion:
  • [By Stephen Leeb]

    The portfolio is concentrated, holding the 25 largest oil-service firms in the world by market capitalization. Indeed, the top five positions account for 44% of assets, led by a 20% position in oilfield giant Schlumberger (SLB).

  • [By Tony Daltorio]

    The biggest oilfield service companies should get a big lift from the boom, Moors said. That includes Schlumberger Ltd. (NYSE: SLB), Halliburton Co. (NYSE: HAL), Weatherford International Ltd. (NYSE: WFT), and Baker Hughes Inc. (NYSE: BHI).

Hot Undervalued Stocks To Buy For 2014: Caterpillar Inc.(CAT)

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

Advisors' Opinion:
  • [By Chuck Carnevale]

    Our first example once again looks at Caterpillar Inc. (CAT) from the earnings and price correlated relationship with a free cash flow overlay (orange shaded area marked with a capital F) added. Clearly we see that Caterpillar (CAT) does generate free cash flow which is a sign of a strong and healthy business. However, we also see that price tracks earnings in a much more correlated fashion than it relates to free cash flow.

  • [By Ben Levisohn]

    The rush to cut costs has been felt the hardest by mining-industry suppliers, including Caterpillar (CAT) and Joy Global�(JOY), Graf and Levental say, because cancelling orders for new equipment is one of the easiest ways to cut costs.

  • [By David Sterman]

    It's mining giant Caterpillar (NYSE: CAT).

    Gates started building a position in Caterpillar before the financial crisis, but he became a very aggressive buyer once the crisis hit and shares had fallen by half. Yet remarkably, Gates has kept on buying, even as shares steadily rebounded to previous peaks.

Top 10 Blue Chip Companies For 2014: Dollar Tree Inc.(DLTR)

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

Advisors' Opinion:
  • [By Paul Ausick]

    Dollar General�� share price is up less than 6% in the past 12 months, but since the beginning of the year shares have risen more than 22%. And even then, Dollar General�trails Dollar Tree Inc. (NASDAQ: DLTR) in share price growth since January 1. Dollar Tree stock is up 30%.

  • [By Rising Dividend Investing]

    Falling Stock Correlation: What It Says About Consumer Spending

    As we mentioned in the Take Aways from the August 26th Investment Policy Committee meeting, the correlation index has been steadily declining. In 2008-09, macroeconomic events drove nearly every stock downwards. Specific sectors and stocks moved in tandem with one another. Today, stocks and sub-industries within each sector are performing very differently – which indicates a return to a more normal stock market environment.
    The Consumer Discretionary (also known as Consumer Cyclicals) sector is an example of an industry that has been rewarded for its fundamental success over the past 12 months. As a whole, the sector grew sales 6.1% and earnings 9.2% in the second quarter - much better than the 1.4% sales and 3.3% earnings growth of the S&P 500. While the overall sector did well in the second quarter, the table below shows how differently the 5 sub-categories of Consumer Discretionary performed:

    (click to enlarge)
    As we drill down even further, sub-categories of sub-sectors differ even more dramatically. Below is a snapshot of the Retailing sub-sector and its notable components:

    (click to enlarge)
    Specific stocks within each sub-category are varying in performance as well. General Merchandise retailers were significantly differentiated in the second quarter. Target’s (TGT) adjusted EPS were up 6.1% from 2012, while Dollar General (DG) and Dollar Tree’s (DLTR) earnings were up nearly 12% and 9%, respectively.
    The differences in sales and earnings growth amongst these different industries tell a story. The economy is not improving enough that people feel like they can let go and spend money on pure pleasures, but it is improving enough that they can afford to replace their cars and fix the doors on their houses. As these items wear out and need to be replaced, we expect the pent up demand will drive increased economic activity from cons

Hot Undervalued Stocks To Buy For 2014: Tupperware Corporation(TUP)

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

Advisors' Opinion:
  • [By John Udovich]

    Everyone is familiar with�the Tupperware brand from�consumer products stock Tupperware Brands Corporation (NYSE: TUP) and you are probably familiar with the brands�of mid cap stock Jarden Corp (NYSE: JAH) along with small cap stocks Libbey Inc (NYSEMKT: LBY) and Lifetime Brands Inc (NASDAQ: LCUT); but what about the stocks themselves? Chances are, their brands or products are right under your nose at home and you probably don�� know anything about the mid cap or small cap stock behind them.

  • [By Oliver Pursche]

    European large-cap pharmaceuticals like Novartis (NVS) �and Bristol Meyers Squibb (BMY) �count amongst some of our favorite stocks right now, as do U.S. multinationals that are growing revenue and margins in Asia ��Tupperware (TUP) �is a shining example. Stay away from utilities and energy stocks, as they are likely to be the laggards over the next year.

Thursday, September 26, 2013

5 Stocks With Big Insider Buying

DELAFIELD, Wis. (Stockpickr) -- Corporate insiders sell their own companies' stock for a number of reasons.

They might need the cash for a big personal purchase such as a new house or yacht, or they might need the cash to fund a charity. Sometimes they sell as part of a planned selling program that they have put in place for diversification purposes, which allows them to sell stock in stages instead of selling all at one price.

Other times they sell because they think their stock is overvalued and the risk/reward is no longer attractive. Some even dump their own stock because they have inside knowledge that a competitor is eating their lunch and stealing market share.

But insiders usually buy their own shares for one reason: They think the stock is a bargain and has tremendous upside.

The key word in that last statement is "think." Just because a corporate insider thinks his or her stock is going to trade higher, that doesn't mean it will play out that way. Insiders can have all the conviction in the world that their stock is a buy, but if the market doesn't agree with them, the stock could end up going nowhere. Also, I say "usually" because sometimes insiders are loaned money by the company to buy their own stock. Those loans are often sweetheart deals and shouldn't be viewed as organic insider buying.

At the end of the day, its large institutional money managers running big mutual funds and hedge funds that drive stock prices, not insiders. That said, many of these savvy stock operators will follow insider buying activity when they agree with the insider that the stock is undervalued and has upside potential. This is why it's so important to always be monitoring insider activity, but it's twice as important to make sure the trend of the stock coincides with the insider buying.

Recently, a number of companies' corporate insiders have bought large amounts of stock. These insiders are finding some value in the market, which warrants a closer look at these stocks. Here's a look at five stocks whose insiders have been doing some big buying per SEC filings.


One cyclical consumer player that insiders are buying up a large amount of stock in here is Biglari (BH), which is currently engaged in investment management and the franchising and operating of restaurants. Insiders are buying this stock into modest strength, since shares are up 8.7% so far in 2013.

Biglari has a market cap of $605 million and an enterprise value of $688 million. This stock trades at a cheap valuation, with a trailing price-to-earnings of 4.83 and a forward price-to-earnings of 29.38. Its estimated growth rate for this quarter is 42%. This is not a cash-rich company, since the total cash position on its balance sheet is $153.57 million and its total debt is $236.16 million.

The CEO and chairman of the board just bought 5,165 shares, or about $1.36 million worth of stock, at $265 a share.

From a technical perspective, BH is currently trending above its 200-day moving average and just below its 50-day moving average, which is neutral trendwise. This stock has been trending sideways and consolidating for the last month and change, with shares moving between $408.25 on the downside and $429.97 on the upside. Shares of BH are now starting to push within range of triggering a near-term breakout trade above the upper-end of its recent sideways trading chart pattern.

If you're bullish on BH, then I would look for long-biased trades as long as this stock is trending above some near-term support levels at $410 to $408.25, and then once breaks out above some near-term overhead resistance levels $428.85 to $429.97 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average action of 10,146 shares. If that breakout hits soon, then BH will set up to re-fill some of its previous gap down zone from August that started at $467.89 a share.


Another non-cyclical consumer goods player that insiders are active in here is Blyth (BTH), which designs and markets home fragrance products and decorative accessories, as well as weight management products, nutritional supplements and energy drinks. Insiders are buying this stock into weakness, since shares are down by 22% so far in 2013.

Blyth has a market cap of $193 million and an enterprise value of $156 million. This stock trades at a reasonable valuation, with a price-to-sales of 0.19 and a price-to-book of 4.21. This is a cash-rich company, since the total cash position on its balance sheet is $172.96 million and its total debt is $127.98 million. This stock currently sports a dividend yield of 1.6%.

A beneficial owner just bought 20,000 shares, or $246,000 worth of stock, at $12.34 per share.

From a technical perspective, BTH is currently trending above its 50-day moving average and below its 200-day moving average, which is neutral trendwise. This stock has recently pulled back after trading just above its 200-day moving average at $14.60 a share to its intraday low of $12.05 a share. That pullback is pushing shares of BTH very close to its 50-day moving average of $11.48 a share. If that level holds off this pullback, then shares of BTH could present a solid buying opportunity.

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If you're in the bull camp on BTH, then look for long-biased trades as long as this stock is trending above is 50-day at $11.48 and then once it breaks out above some near-term overhead resistance at $13.09 a share with high volume. Look for a sustained move or close above that level with volume that hits near or above its three-month average action of 287,505 shares. If we get that move soon, then BTH will set up to re-test or possibly take out its next major overhead resistance levels at $14.60 to $15.69 a share. Any high-volume move above those levels will then put $17 to $20 into range for shares of BTH.


One aerospace player that insiders are loading up on here is AeroVironment (AVAV), which is engaged in the design, development, production and support of unmanned aircraft systems and efficient energy systems for various industries and governmental agencies. Insiders are buying this stock into decent strength, since shares are up 23% during the last six months.

AeroVironment has a market cap of $504 million and an enterprise value of $379 million. This stock trades at a premium valuation, with a trailing price-to-earnings of 108.75 and a forward price-to-earnings of 44.35. Its estimated growth rate for this year is 47.4%, and for next year it's pegged at 82.1%. This is a cash-rich company, since the total cash position on its balance sheet is $128.81 million and its total debt is zero.

A director just bought 5,000 shares, or about $112,000 worth of stock, at $22.50 per share.

From a technical perspective, AVAV is currently trending right below its 50-day moving average and above its 200-day moving averages, which is neutral trendwise. This stock has been trending sideways for the last two months, with shares moving between $20.78 on the downside and $23.97 on the upside. Shares of AVAV are now starting to trend within range of triggering a breakout trade above the upper-end of its recent sideways trading chart pattern.

If you're bullish on AVAV, then look for long-biased trades as long as this stock is trending above support at $22.30 or above its 200-day at $21.05 and then once it breaks out above some near-term overhead resistance levels at $23.60 to $23.97 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average volume of 205,927 shares. If that breakout triggers soon, then AVAV will set up to re-test or possibly take out its next major overhead resistance levels at $25 to $28 a share.

PBF Energy

One energy player that insiders are snapping up a decent amount of stock in here is PBF Energy (PBF), an independent petroleum refiners and suppliers of unbranded transportation fuels, heating oils, petrochemical feedstocks, lubricants and other petroleum products in the U.S. Insiders are buying this stock into notable weakness, since shares are off by 22% so far in 2013.

PBF Energy has a market cap of $896 million and an enterprise value of $1.63 billion. This stock trades at a cheap valuation, with a forward price-to-earnings of 7.35. Its estimated growth rate for this year is -67.7%, and for next year it's pegged at 88.4%. This is not a cash-rich company, since the total cash position on its balance sheet is $69.23 million and its total debt is $815.96 million. This stock currently sports a dividend yield of 5.4%.

A director just bought 10,000 shares, or about $226,000 worth of stock, at $22.50 per share.

From a technical perspective, PBF is currently trending above both its 50-day moving average, which is bullish. This stock has been trending sideways inside of a consolidation pattern for the last three months, with shares moving between $20.15 on the downside and $24.92 on the upside. Shares of PBF are now starting to bounce off its 50-day moving average of $22.44 a share and it's quickly moving within range of triggering a near-term breakout trade above the upper-end of its recent sideways trading chart pattern.

If you're bullish on PBF, then look for long-biased trades as long as this stock is trending above its 50-day at $22.44 or above more support at $21.89 to $20.59, and then once it breaks out above some near-term overhead resistance levels at $23.49 to $24.92 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average volume of 1.11 million shares. If that breakout hits, then PBF will set up to re-test or possibly take out its next major overhead resistance levels at $26 to $28 a share.


One more stock with some decent insider buying is Aircastle (AYR), which is a global company that acquires, leases, and sells high-utility commercial jet aircraft to customers throughout the world. Insiders are buying this stock into big time strength, since shares up sharply by 39% so far in 2013.

Aircastle has a market cap of $1.4 billion and an enterprise value of $4.4 billion. This stock trades at a reasonable valuation, with a trailing price-to-earnings of 30.42 and a forward price-to-earnings of 9.32. Its estimated growth rate for this year is 118.8, and for next year it's pegged at 6.9%. This is not a cash-rich company, since the total cash position on its balance sheet is $430.27 million and its total debt is $3.54 billion. This stock currently sports a dividend yield of 3.9%.

A director just bought 30,000 shares, or about $518,000 worth of stock, at $17.23 per share.

From a technical perspective, AYR is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending strong for the last six months, with shares moving higher from its low of $12.62 a share to its recent high of $17.94 a share. During that uptrend, shares of AYR have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of AYR within range of triggering a major breakout trade.

If you're bullish on AYR, then look for long-biased trades as long as this stock is trending above some near-term support levels at $16.80 or $16.01, and then once it breaks out above some key overhead resistance levels $17.73 to $17.94 a share and then above to its 52-week high at $18.12 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average action of 539,800 shares. If that breakout triggers soon, then AYR will set up to enter new 52-week high territory, which is bullish technical price action. Some possible upside targets off that breakout are $20 to $25 a share.

To see more stocks with notable insider buying, check out the Stocks With Big Insider Buying portfolio on Stockpickr.

-- Written by Roberto Pedone in Delafield, Wis.

Tuesday, September 24, 2013

Don't Let Uncle Sam Do To You What It Did to Tony Soprano

We were all shocked by the sudden, untimely death of James Gandolfini. Gandolfini was an immensely gifted actor who changed the face of television entertainment in the role of Anthony "Tony" Soprano, a deeply troubled gangster-in-therapy, who had to balance obligations to his family... and his Family.

By all accounts, James Gandolfini was generous and kind to family and friends alike. It has been reported that he left a large legacy, in excess of $70 million, to be divided between them. His net worth is an estimate, and his asset inventory hasn't yet been disclosed, but he did alright for a middle class kid from North Jersey.

Sadly, however, his nearest and dearest won't see anywhere near the full amount he left behind.

It turns out that James Gandolfini was generous - to a fault. His wish was that his legacy, in the form of real estate and other assets in the United States and Italy, be distributed in large chunks, the largest in a trust for his 13-year old son, Michael and 8-month old daughter, Liliana. His widow, Deborah Lin, is set to receive 20% of his estate. The will stipulates that the shares to be doled out after taxes.

But tax attorney William Zabel called the will a "tax nightmare," and estimated that some 80% of the Gandolfini's estate is liable for the death tax of around 45%. The tax man cometh and right soon; the bill comes due in 9 months.

Where Did He Go Wrong?

It's these particularly large portions that leave Gandolfini's legacy vulnerable to the tax collectors. The tax man gains entry through the large portions given directly to fewer people.

Even worse, since Gandolfini probably didn't have $30 or $40 million in cash lying around, his family will have to hustle - at the worst possible time - to liquidate what's been left to them. In some cases, they'll have to settle for less than the full value of an asset as a fire-sale atmosphere takes hold.

Had the actor gone a more roundabout, but safer way, his heirs might get to hang on to more of his legacy. For instance, he might have left all of his estate to his surviving wife, making an end run around the inheritance tax. So long as the spouse is an American citizen, direct bequests to that spouse are tax deferred for as long as the spouse survives.

The Gift of Breathing Room

This would have given Gandolfini's wife time to sit down with the lawyers and establish a network of tax-advantaged trusts to divide the estate on her passing. A grantor-retained annuity trust, for instance, allows assets to be transferred into it for the life of the trust. The beneficiaries receive annual payments, and appreciation is tax-free for those beneficiaries.

Another way would have been to provide a life insurance policy payable for the entire amount of the estate's tax liability. While he was still with us, James Gandolfini might have calculated the entire value of his estate, worked out the tax on it, and then taken out a life insurance policy that would cover the tax bill.

Life insurance payouts aren't subject to inheritance taxes. That would have given his heirs a worry-free, no strings attached lump sum to pay off and then be rid of the IRS.

Gandolfini might have left money to his heirs while he was still alive in the form of gifts. Gifts above $13,000 are subject to taxes, but then again, there are tax credits available that permit up to $1 million of gifts in a lifetime

It's also possible to attach stipulations to gifts that make them tax-advantaged. For instance, gifts for higher education and medical expenses aren't liable to tax.

In Estate Planning, Anything Goes

When planning an estate, when attempting to give it all possible tax advantages, a no-holds-barred, no-stone-unturned strategy is called for. It's wise to take advantage of all the different ways available - no matter how complicated or unorthodox - to protect your heirs' legacy.

You can't cheat death, and you shouldn't cheat on your taxes, but you don't have to lie down for either of them.

All Part of "The War on Success"

James Gandolfini's post-mortem financial woes illustrate a tricky problem in this country. Gandolfini made his money himself, through his own hard work and with his considerable acting talents.

But, because he wasn't devious and clever with his earnings, a goodly portion of them will end up in government coffers, rather than remaining with his numerous chosen heirs - his family and friends.

On the one hand, it's fair to pay your taxes. Fair tax rates are not impossible to achieve.

But is it fair for the government to tax the dead? After a lifetime of hard work? Is it fair that you have to be devious and clever to protect your legacy?

These are legitimate questions that have to be a part of any debate over fair taxes. But anything that comes from that debate is likely to be of little comfort to James Gandolfini's friends and family when the tax man comes knocking.

What do you think of the #deathtax? Sound off on Twitter or drop us a line on Facebook.

Death Tax - 07232013 Is there any such thing as a fair tax? Yes, I think so. We should all pay at least something. No way! We should get to keep everything we make.
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James Gandolfini's will generous with family, friends; most goes to teenage son InvestmentNews.Com:
Gandolfini heirs will likely end up in court over giant tax bill

How $100 Million Expansion Will Drive Jack Daniel’s Sales Even More

If you are ever playing the word association game and bourbon comes up, chances are high that the first or second brand you would associate it with is Jack Daniel’s Tennessee Whiskey. Brown-Forman Corp. (NYSE: BF-A) (NYSE: BF-B) is going to invest another $100 million into expanding its Jack Daniel’s distillery to make sure that it stays that way, or becomes the case even more. Jack Daniel’s Tennessee Honey is part of the increased demand, and that has only been on the market a couple of years.

Brown Foreman said it is investing more than $100 million to expand the Jack Daniel Distillery due to global demand for its world-famous Tennessee Whiskey. The expansion will include additional stills, barrel warehouses and related infrastructure to support the expanding operations. Construction on the planned expansion will begin this fall and is expected to be completed within two years.

Brown-Forman also will add about 90 more full-time jobs over the next five years. The distillery expansion will be located on distillery property in the Lynchburg area.

Jack Daniel's Tennessee Whiskey has grown in volume for what is said to be 21 consecutive years, and the Jack Daniel's family of brands grew global net sales by 9% in the last fiscal year.

Rival distillery Beam Inc. (NYSE: BEAM) also experienced growth in its sales, driven in part by sales of Jim Beam, Makers Mark and other premium bourbon brands. Beam’s sales growth ahead is expected to average about 5%.

If you ever get a chance to visit these distilleries you should take advantage of it. They are impressive operations.

Monday, September 23, 2013

Stocks Sink On Taper Jitters; Caterpillar Weighs On Dow

There's no pleasing some markets. While investors rejoiced over the Fed's decision not to dial back its bond purchases earlier this week, today their anxiety over the delay sent stocks lower.

Markets began the day modestly lower in mixed trading Friday, but selling accelerated by midday and all three major indexes were down at the close.

The Dow Jones Industrial Average was off 185.46 points, or 1.2%, to 15,451.09.

The Nasdaq fell 14.66 points, or 0.4%, to 3,774.73.

The S&P 500 lost 12.43 points, or 0.7%, to 1,709.91.

Nonetheless, all three indexes are in the black for the week, their third consecutive week of gains.

With no major economic news, investors were left digesting the Federal Reserve's decision not to taper, and are apparently souring on the temporary reprieve, as speculation once again begins about when the central bank will finally pull back its asset purchases. The market also has an eye on Germany's elections on Sunday.

Caterpillar (CAT) ended down after announcing that global sales from its dealers fell in the last three months.

Coal stocks like Arch Coal (ACI), Peabody Energy (BTU), and Walter Energy (WLT) tumbled on new emissions proposals from the government.

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AK Steel (AKS) dropped on its downbeat third-quarter forecast.

Sarepta Therapeutics (SRPT) was one winner, gaining 18%, but only at the expense of rival Prosensa Holding NV (RNA), which sank on news that its Duchenne muscular dystrophy treatment missed Phase III trial targets.

Thursday, September 19, 2013

Kroger Reports Higher Earnings, Matching Estimates; Maintains Outlook (KR)

Food retailer Kroger (KR) posted higher second quarter earnings on Thursday, which matched analysts’ estimates. The company also maintained its outlook for FY2013.

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The Cincinnati, OH-based company posted second quarter earnings of $317 million, or 60 cents per share, up from $279 million, or 51 cents per share, a year ago. On average, analysts expected to see earnings of 60 cents per share.

Total revenue for the quarter was $22.7 billion, up from $21.7 billion a year ago. Analysts expected to see earnings of $22.7 billion.

Looking ahead, the company reaffirmed its FY2013 outlook of earnings between $2.73 and $2.80 per share. KR expects to see sales growth between 8% and 11%. Analysts expect to see earnings of $2.80 per share.

The Kroger shares were up 96 cents, or 2.55%, during Thursday morning trading. The stock is up 46% YTD.

Tuesday, September 17, 2013

Murphy USA: A Small-Cap Stock With Large Upside Potential

Murphy USA (MUSA) first caught my attention after Southeastern Asset Management acquired a massive stake ($668mm) in its former parent company Murphy Oil Corporation (MUR) in Q1 2013. One thing about Murphy Oil Corporation I noticed after an initial glance through their 10-K and annual report was its ownership of a valuable fuel and convenience retailer segment with high ROIC, valuable real estate, low CAPEX requirements, and relatively decent growth prospects that was underfollowed and whose underlying value was concealed by the parent company's core production and exploration business.

Fast forward several months and Murphy USA now trades independently after being spun-off Murphy Oil on August 30, 2013. It is my opinion that Murphy Oil's primary reason for spinning off its retail division was to create disparity in valuation between itself and Murphy USA. Since its independence, the stock has witnessed heavy insider buying and no insider selling, which provided me with a legitimate warrant to look further into the Company's SEC filings and presentation.

Investment Thesis

Currently, Murphy USA only trades at 6.6x TTM adjusted EBITDA. Normally, a company trading at a low EV/EBITDA ratio either a) are very overleveraged, or b) have unsustainable EBITDA levels. Murphy USA exhibits neither characteristic. I believe not only that Murphy USA's current EBITDA level is sustainable, but that the Company has tremendous opportunities for organic growth in the next 3 years following potentially stagnate EBITDA levels from 2013 to 2014.

The reasons for a low valuation:

1. Indiscriminate selling partially offset by insiders purchasing: Institutions owned parent company Murphy Oil Corporation for its production and exploration business, not its fuel retailer, subsequently causing institutional investors to flood the market with "undesired" shares of Murphy USA.

2. Lack of complete analyst coverage/information: My personal broker, Fidelity, only had one incomplete research report ! available on Murphy USA as of 9/9/13. The limited supply of available information coupled with the Company's small market capitalization ($1.86bn) are most likely the prime culprits.

Company Overview

Headquartered in El Dorado, Arkansas, Murphy USA's core business segment is a motor fuel and convenience merchandise retailer, operating 1,179 locations as of June 30,2013 (~90% locations owned) in 23 states throughout the South and Midwest areas of the United States.

Demand-Side Advantage

A valuable and unreproducible intangible asset the Company possesses is their partnership with Wal-Mart, whom Murphy USA has had a working relationship with since its inception in 1997. The majority of the Company's retail locations are strategically placed adjacent to a Wal-Mart. Murphy USA's retail stations participate in the Wal-Mart discount program, offering cents-off per gallon purchased for fuel when using specific payment methods. The Company's product offerings (cheaper fuel on a price per gallon basis relative to its peers and low-priced convenience goods) primarily target the Wal-Mart shopper demographic of low-to-mid income individuals and families; thus, the pair create an effective synergy structured around convenience and low prices. The Company will continue to grow organically with Wal-Mart, as the vast majority of new locations will be situated adjacent to a Wal-Mart store.

Supply-Side Advantages

Retail Units: Murphy USA's retail gasoline stations operate at lower CAPEX and maintenance levels and operating costs relative to its peers.


Murphy USA


CAPEX (avg. per site)



Operating Expense (avg. per store)



(click to enlarge)

This is driven by the fact that Murphy USA locations are 208 and 1200 sq. Ft. kiosks, which requires only one or two on site employees, no rent expense (as the vast majority of locations are owned), and have a smaller store footprint than its competitors. These attributes give the Company a valuable scalability advantage over its peers. With its "Kiosk model", it cost Murphy USA $2.15mm to open a new site, selling 278K gallons of fuel per month and $4,744 of merchandise per square foot annually vs the industry average of $3.22mm to open a new site, selling 124K gallons per month and $547 merchandise sales per square foot annually.

Supply Chain: Murphy USA has a broad supply-chain of proprietary and third-party fuel terminals. Its "Best Buy" method of dispatching third-party tanker trucks to the most favorably priced terminal to load products for each Murphy USA site reduces fuel product costs. The Company's supply-chain allows it to price its fuel at a lower price than its competitors while still maintaining fuel margins.

(click to enlarge)

New Management

Andrew Clyde, a former managing partner at Booz & Company's global energy practice, was appointed President and CEO of the new company. Mr. Clyde has over 20+ years of consulting experience focusing on the downstream value chain, gasoline, and convenience retailing. Despite not being an organically grown executive Mr. Clyde has been intimately involved with Murphy USA's operations for several years according to Steven Cossé, President and CEO of Murphy Oil Corporation. Mr. Clyde has been providing advice to Murphy's U.S. retail business and leading the development of the unit's future business strategy. Mr. Clyde recently purchased 4,000 shares of Murphy USA, aligning his interests with shareholders.

Murphy USA's executives performance compensation equates to around 40-5! 0% of the! ir respective base salary. The Company's Chairman of the Board, Robert Madison Murphy, who owns $47.5mm worth of Murphy USA stock.

Potential Divestiture

In addition to its fuel retail segment, the Company also owns and operates two ethanol production facilities in Hankinson, North Dakota and Hereford, Texas. Management has indicated a likelihood of a potential divestiture of the Company's ethanol production business in order to shift their focus primarily towards its core retail business. A divestiture would benefit Murphy USA by stabilizing earnings and margins, as well as allowing management to better focus on its core retail business. The segment recorded an $84mm impairment expense in 2012 as a result of ethanol sales prices falling and corn prices rising. A divestiture would result in earnings and margins less subject to fluctuating commodity prices (Both ethanol and corn prices affect this segment).


Any given stock's value is generally governed by 4 variables: Return on invested capital ("ROIC"), revenue growth, capital structure, and expectations. On an EV/EBITDA basis, Murphy USA trades below the industry average of 8.5x despite higher ROIC (~13.4% vs.~8% industry average), better growth prospects, and a more attractive capital structure.

EV = $1,860mm Market Cap + $650mm Debt - $100mm Cash = $2,410mm


ROIC = TTM NOPLAT/Invested Capital = 171/1,274 =13.4% (Relatively low when compared to historical rates of ROIC)


Murphy USA should conservatively trade at 8.0x EBITDA given its growth prospects, higher ROIC, and capital structure relative to its peers. The reason why I decide! d not to ! assign Murphy USA the industry average multiple is due to the fact I believe current EBITDA levels are slightly elevated by a temporary source of revenue which I will go into further details later. Trading at 8.0x EBITDA implies a valuation of $49.64 per share (~27% upside).

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Growth Drivers

The Company's business model (low cost operator, small store format, low cost provider of goods, strategic placement adjacent to Wal-Mart stores, supply-chain optionality) and robust balance sheet (~90% of retail locations are owned, providing substantial collateral if debt financing is necessary for growth) will allow them to scale effectively. As Murphy USA only operates in 23 states, with there being roughly one Murphy USA retailer per every four Wal-Mart stores, the Company has ample room to expand its geographical presence.

Over the past five years under Murphy Oil Corporation, Murphy USA has organically grown its store fleet at a rate of approximately 30 new locations per annum. As an independent company, Murphy expects to accelerate growth by expanding its store fleet to 1,408 locations in the next 3 years (roughly 66 new locations annually). The Company's expected 2013 and 2014 CAPEX allocated towards growth are $168mm and $135mm, respectively. The 2 figures are materially higher than its 2012 portion of CAPEX allocated towards growth (~$72mm). A little less than 50% of new locations will follow the 1,200 sq. Ft. kiosk format while the remainder will be 200-800 sq. Ft. It is my belief that the 200 new locations will result in an 8.7% EBITDA compounded average growth rate from now to mid-year 2016.

My arrival at 8.7% EBITDA CAGR figure:

Petroleum product sales = 200*278,000(Avg. fuel gallons per Store Month)*12 months = 667,200,000 gallons per year*$3.37-3.46 (Avg. price of unleaded in South/Mid-West regions) =

$2,248,464mm - $2,308,512mm

A! ssuming 4! 5% of new locations will be 1,200 sq. Ft. kiosks, and the remainder being 208 sq. Ft. kiosks, the result would 90 1,200 sq. Ft. kiosks and 110 of the latter The Company reports $4,744 annual sales per square foot.

Merchandise sales =

1,200 sq. Ft Kiosks = (90*4,744*1,200 sq. Ft.) = $512,352mm

208 sq. Ft. Kiosks (110*4,744*200) = $104,368

If will assume "other" revenues will normalize to $10mm, total 2015 revenue attributed to new stores will equal $2,865,194mm to 2,925,242mm

Gross Profit = (gross margin*respective sales)

Petroleum = 3.57%*$2,248,464mm - $2,308,512mm = $80,270mm to 82,434mm

Merchandise =

1,200 sq. Ft. Kiosks = 15.5%*512,352 = $79,414

208 sq. Ft. Kiosks = 12.8%*104,368 = $13,359

Total Gross Profit = $173,043 to 175,207

Operating + SGA Expenses (2.85% of total sales) = $81,658mm to 83,369mm

EBITDA = $91,385mm to 91,838mm

Add on $320-$330mm adjusted TTM EBITDA from existing locations (adjusted for RIN sales) and 2016 EBITDA will equal $411 to 422. We must assume current locations can sustain their EBITDA. Many variables could either adversely or positively impact this figure such as fluctuating fuel prices, closure of locations, better cost control, and improved/worsening midstream supply chain. Another key assumption is the "sales per square foot" figure. As only 4% of all Murphy USA retail locations use the 1,200 sq. Ft. format, there is a high likelihood that the 1,200 sq. Ft. kiosks sell less merchandise on a per square foot basis than the Company's 208 sq. Ft. kiosks.

In the Short-Term

Selling Renewable Identification Numbers ("RINs") generated by ethanol and biodiesel blending has temporarily inflated Murphy USA's revenue and earnings. Because the Company has the capability to source its fuel directly at the terminals and then blend the fuel themselves, RINs are generated in the process. These RINs may be sold in the market to companies who fail to meet their annual RIN quota as set by the EPA. R! evenue fr! om RINs contributed to $44mm in sales for 6-months ended June 30,2013 vs $3mm in sales for 6-months ended June 30, 2012. The primary cause for the increase in RINs revenue is connected to RINs prices reaching obscene levels during the first half of 2013 (Ethanol RINs were about $0.05/gallon throughout 2012 vs. $1.50/gallon peak in July) resulting from the shortage of corn due to last summer's drought, which suppressed ethanol production and caused blenders to turn to buying RINs to meet their RFS requirements. Because Murphy USA's reported statements cover operating results ending June 30,2013 before the price peak, RINs sales throughout Q3 FY13 may result in a revenue and earnings surprise. This is temporary as I don't expect RINs sales to be a driver of revenue growth in the future. Once RINs prices return to normal levels, so will the portion of the Company's revenue and EBITDA attributed to them (~$10mm annually). When RINs prices return to normal levels, this will likely cause EBITDA stagnation from YE13 to YE14, assuming EBITDA from the new store openings will offset substantially lower RINs sales.


Potential acquisition target. The low valuation combined with Murphy USA's scalability advantage, partnership with Wal-Mart, 1,000+ locations including the land underneath, and attractive ROIC makes Murphy USA a likely acquisition target. Likely acquirers would include other fuel retailers looking to synergize their own supply-chain with Murphy USA's optionality supply-chain to lower costs, fuel retailers looking to eliminate a competition (Murphy USA had ~3% market share in US in 2011), and fuel retailers with distribution networks in other regions who will Murphy USA with access to fuel pipelines and streams the Company currently does not have access to and utilize the Company's s! calabilit! y to accelerate growth.

Earnings surprise. It is highly probable that revenue and earnings from new store openings, high Q3 sale of RINS, and normalized earnings from the ethanol production segment will result in a revenue and earnings surprise for Q3 FY13. This may lead to additional public recognition, attention, and analyst coverage of the Company.

Divestiture. Management divesting ethanol production segment resulting in more directional focus towards the Company's core retail business. Management will allocate more time and energy towards strengthening its supply-chain, cutting costs, and strategically opening new locations.

Continuation of insider purchasing. Since the spin-off, 3 insiders have all purchased Murphy USA shares including board members Thomas Gattle and Jack Taylor, and Murphy USA board member), and Murphy USA's President and CEO Andrew Clyde.


I am recommending investors to take a long position in Murphy USA as trades at a multiple below its peers on an EV/EBITDA basis despite higher ROIC, better capital structure, as well as growth prospects. I ultimately believe a natural reversion to mean is likely to occur within the next few months or years following more time and public recognition of the Company.

Source: Murphy USA: A Small-Cap Stock With Large Upside Potential

Disclosure: I am long MUSA. 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...)

Saturday, September 14, 2013

How To Invest Like David Einhorn

"Sticks and stones may break my bones, but words will never hurt me." 

Try telling that to a company that has just been "Einhorned."

Hedge fund billionaire David Einhorn has the ability to crater a company's share price with the mere mention of its name in one of his closely followed investment presentations. That ability has turned his name into a verb, spawning the expression that a company is being "Einhorned" when targeted by short sellers.  

Einhorn's forensic approach to research has enabled him to sniff out some of the most publicized and successful shorts in the past 10 years. That includes one of the earliest calls and moves on Lehman Brothers' bankruptcy and a short on Green Mountain Coffee (Nasdaq: GMCR) that netted his firm hundreds of millions.

That has turned Einhorn into one of the most popular figures on the Street -- but also one of its most polarizing. Some call him a genius; others oppose his ability to profit from struggling companies. But there is no disputing that Einhorn's Greenlight Capital boasts one of the best performances in the past 20 years, averaging a market-crushing annual return of 20%. That makes Einhorn one of the most influential and closely followed hedge fund billionaires on the Street.

David Einhorn's Bio
Einhorn isn't a stereotypical fund manager like Carl Icahn, Warren Buffett or George Soros. Although he's already a hedge fund Hall of Famer, Einhorn is only 44 years old. His youthful looks belie an incredible intellect and competitive fire that have pushed him to the top of one of the world's most competitive industries.

Einhorn's attention to detail and expertise with numbers showed up early in life, leading him from high school in Wisconsin to the Ivy League at Cornell University, where he graduated with highest honors in 1991. After graduation, Einhorn developed his analytical chops with a four-year run at an investment bank and hedge fund. By the age of 27, he was ready to set out on his own, launching a fund in 1996 with just $1 million under management. 

Einhorn quickly produced a couple of monster years, including a 58% return in 1997 and a 32% in 2001 when the S&P 500 index was crashing. As Einhorn's reputation began growing within the hedge fund community, he took his reputation to another level with a string of amazing shorts that dazzled the Street before and during the financial crisis. That has propelled his net worth to $1.2 billion while his firm's assets under management have grown to $4 billion.

Einhorn is also a noted poker nut, with some serious skills to match. In July 2012, Einhorn finished third at the World Series of Poker, pocketing $4.35 million in prize money that he quickly donated to one of the many charitable foundations he supports.

David Einhorn's Investment Philosophy
Einhorn's rock-star reputation was built on the short sale, which is how he rose to prominence and scored some of his biggest victories. But Einhorn is no one-trick pony. He has also seen big gains playing the long side of the market, including positions in Apple (Nasdaq: AAPL) and Microsoft (Nasdaq: MSFT) that both produced outsize returns. But in either case, whether long or short, Einhorn is known for producing copious amounts of research and incredibly detailed analysis.

When searching for his next big short, Einhorn likes to dig deep into a company's financial statements and business model. He then relies on his forensic approach to research and analysis to identify accounting inconsistencies, unsustainable leverage ratios or unsustainable growth. These are the tools Einhorn used to nail two of his biggest trades, shorting Allied Capital and Lehman Brothers.

But when playing from the long side, Einhorn's approach looks a lot like Buffett's, placing value among his highest priorities. He also likes to invest in industry leaders that enjoy high barriers to entrance, which insulates them from new competition and margin compression. These were the driving forces behind two of Einhorn's biggest longs in the past few years with Microsoft and Apple.

David Einhorn's Big Wins
That scientific approach to numbers and analysis has produced some big victories for Einhorn.

Einhorn's reputation took a quantum leap forward in 2002 after he was invited to speak at a presentation where investors pay to hear leading hedge fund managers discuss their best investment ideas. Einhorn unleashed an attack on Allied Capital, a mid-size private-equity firm, suggesting the company was manipulating its accounting standards and valuing its debt incorrectly. Shares opened 20% lower the next morning, and the legend of Einhorn as a short seller was born.

But it wasn't until a few years later when his reputation as a remarkable analyst and short seller was sealed with what is still considered the best call of his career. That distinction came on Einhorn's early warnings and move on Lehman, using his forensic accounting skills to spot another company that was hugely vulnerable to any kind of weakness in the economy or housing with an overleveraged balance sheet. At the time, that was a hugely contrarian opinion, leading many to think Einhorn was crazy. But those are the trades with the most potential, and in the end, Einhorn netted billions shorting Lehman.

Einhorn followed up that legendary call with another huge short position in 2011, this one in Green Mountain Coffee Roasters, right before shares cratered from more than $100 to less than $20. It was another incredible call where Einhorn placed huge bets on a company directly before its share price cratered. It also added to the growing belief that Einhorn is the most potent short seller on the Street.

That incredible string of winners helped Einhorn's Greenlight Capital Management to deliver an average annual gain of 20% since 1996, one of the best track records in the history of the hedge fund industry.

David Einhorn's Portfolio: What's He Holding Now?
As one of the youngest players in his field, Einhorn remains plenty active in managing his fund. But right now, he is more focused on the long side of the market, with no outstanding shorts that the market is closely watching. His largest position remains Apple, where Einhorn has invested close to $1 billion, accounting for 18% of his portfolio. Einhorn also owns a big stake in General Motors (NYSE: GM) with a stake valued at $568 million, occupying 11% of his portfolio.

Action to Take --> Einhorn is going to be on the hedge fund scene for many years to come, in position to continue capitalizing on his detailed research and analysis from both the long and short side of the plate. But since hedge fund managers are not required to report short positions, it is best to follow Einhorn's buys. Right now, his two biggest positions are Apple and General Motors, which mean this hedge-fund billionaire sees plenty of upside in both companies.

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Thursday, September 12, 2013

5 Money Moves To Make In September

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September is a month that marks many endings and many beginnings. Summer ends as the warm weather starts to fade away. Kids are heading back to school to meet new teachers and prepare for a new year. From a financial perspective, September is also a great time for a quick reboot of your financial mind-set.

Here's are some financial moves you should consider this month:

1. Check your free credit report.

You get a free credit report from each of the three major credit bureaus -- Equifax, Experian and TransUnion. While you can check all three credit report at once, it is usually a better idea to pull them four months apart. If you decided to do just that, by pulling one in January and one in May, then you should be pulling your last free credit report of the year in September.

2. Review your television needs and cut the bill.

Before the fall TV season kicks off, take a look at some of the shows that are a must-watch while noting the ones that have ended. Why pay for channels that you won't be watching? With the advent of services such as Hulu and Netflix, you might find that the monthly cost of cable TV is not worth it. (You might even use this as leverage to negotiate a lower cable bill.)

3. Take advantage of the ending life cycle of consumer goods.

The end of summer is the point in the year when companies are looking to clear out this year's items before ramping up production for next year's inventory. Rebates, discounts and other incentives may be in store for major purchases such as cars and appliances. If you don't mind using an older model of a consumer good, then look out for the opportunities to buy some things on cheap.

4. Quarterly taxes are due.

If you are self-employed, a freelancer or a small-business owner, remember that your estimated quarterly tax payments are due. The deadline is Sept. 16 -- many of you should have marked it on the calendar!

5. Holidays are expensive, so start saving.

Halloween, Thanksgiving and Christmas are just around the corner. Whether its travel or gifts, you're likely to be spending money for these occasions. Start thinking about any holiday plans and how much you expect them to cost. Getting your costume, booking flights and buying presents are some of the major tasks that you need to start thinking about to avoid the holiday rush. (And, don't forget about the shopping frenzy of Black Friday.)

Wednesday, September 11, 2013

Top Canadian Stocks To Watch Right Now

If you look through some explanations of why the Dow Jones Industrials (DJINDICES: ^DJI  ) failed to set a new record today, you'll find a common theme: Investors are worried about a potential correction. Yet the problem with that hypothesis is that investors have been worried about a correction for months now, if not years, and the market hasn't hesitated to climb higher regardless. With a decline of just 19 points for the Dow and similarly insignificant declines for the broader market, reading too much into the day's activity will lead you to false conclusions about what in reality isn't any change in sentiment among investors.

Moreover, focusing too much on pessimistic sentiment will distract you from pockets of optimism within certain sectors. For instance, Alcoa (NYSE: AA  ) climbed 1.7% today as investors continued to applaud the company's decision last week to shut down two of its Canadian production lines and to delay the construction of a new line for at least six years. With aluminum prices remaining stubbornly weak, Alcoa's move at the Baie-Comeau smelter in Quebec represents the latest in a series of strategic decisions designed to reduce overall supply and support long-term price increases for the metal. Even though it will take time for conditions to improve, Alcoa has demonstrated its willingness to make tough decisions in order to put itself in the best position to benefit from favorable long-term trends toward greater future use of aluminum.

Top Canadian Stocks To Watch Right Now: Fisher Communications Inc.(FSCI)

Fisher Communications, Inc., an integrated media company, through its subsidiaries, engages in television and radio broadcasting businesses. The company owns and operates network-affiliated television stations in Washington, Oregon, Idaho, and California, as well as engages in Internet business; and radio stations and managed radio stations in Washington and Montana. It also owns and operates Fisher Plaza, a commercial building that includes a data center designed to enable companies to distribute analog and digital media content through various distribution channels, including broadcast, satellite, cable, Internet, broadband, and other wired and wireless communication systems, as well as houses various companies, including media and communications companies. The company owns and operates 13 full power television stations, 7 low power television stations, and 10 owned and managed radio stations in the Western United States. Its television stations reach 4.2 million househo lds. The company was formerly known as Fisher Companies, Inc. and changed its name in March 2001. Fisher Communications, Inc. was founded in 1910 and is based in Seattle, Washington.


Eurasian Natural Resources Corporation PLC, a diversified natural resources group, engages in mining, processing, energy, logistics, and marketing operations worldwide. The company operates through six segments: Ferroalloys, Iron Ore, Alumina and Aluminium, Other Nonferrous, Energy, and Logistics. The Ferroalloys segment involves in the extraction and sale of chrome ore, as well as the production of ferroalloys from chromium and manganese ores. It offers high-, medium-, and low-carbon ferrochrome; and other alloys, including ferrosilicochrome, ferrosilicomanganese, and ferrosilicon, as well as chrome and manganese concentrate. This segment sells its ferroalloys to steel producers, third party ferroalloy producers, and the chemical industries. The Iron Ore segment engages in the exploration, extraction, processing, and manufacturing of iron ore products. It produces and sells iron ore concentrate and pellets primarily to steel producers. This segment also engages in ancilla ry mining operations that produce limestone, dolomite, and construction gravel. The Alumina and Aluminium segment involves in the extraction and processing of bauxite and limestone; and the smelting of alumina and aluminum. It sells alumina to aluminum producers. The Other Nonferrous segment engages in the exploration and extraction, processing, and manufacturing of copper and cobalt products; trucking and logistics activities; and the exploration of other minerals, including coal, bauxite, platinum, and fluorspar in Africa. The Energy segment involves in coal mining and power generation in the Republic of Kazakhstan. The Logistics segment provides transportation and logistic services. Its operations include freight forwarding, wagon repair services, and railway construction and repair services, as well as a railway transfer and reloading terminal on the Kazakhstan-China border. Eurasian Natural Resources Corporation PLC is based in London, the United Kingdom.

Top Stocks To Invest In 2014: Carpetright(CPR.L)

Carpetright plc, together with its subsidiaries, engages in the retail sale of floor coverings. It sells a range of carpets, rugs, vinyls, laminates, and associated accessories, as well as beds. The company also sells its products through online. It operates 679 stores in the United Kingdom and the Republic of Ireland, as well as in the Netherlands and Belgium. The company was founded in 1988 and is based in Purfleet, the United Kingdom.

Monday, September 9, 2013

Caterpillar Gains 3% on China Optimism, Leads Dow Higher

Is Caterpillar (CAT) really in the Dow? The beaten down industrial stock has gained 3.1% to $89.95 today, more than one percentage point more than Alcoa (AA), the next biggest winner with a 1.9% gain. The Travelers Companies (TRV) has gained 1.9% to $81.99, and 3M (MMM) has climbed 1.5% to $116.78. The Dow Jones Industrial Average has risen 0.9%.

To put Caterpillar’s gain in perspective, its the stock’s largest jump since May 3, when it rose 3.2%. And with time still remaining today, it could advance even higher.

We’ll chalk the big move up to the better economic news out of China last night, as well as sentiment that the global economy is picking up steam. The Caterpillar is also an industrial stock, and those are pretty popular right now.

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I wouldn’t make too much of the move just yet, however. For starters, Caterpillar has been stuck in a range since March, as the following chart shows:

And, as Morgan Stanley reminded investors last week, the market might be expecting too much from Caterpillar. On Sept 5, analyst Nicole DeBlase and team wrote:

While we agree that Mining destocking activity should cease, we see risk to Construction restocking based on our survey work – 41% of both US and China Construction dealers still think inventory is too high, and plan to reduce throughout the remainder of 2013e. Should Construction activity not pick up materially in early 2014e, we see the potential for this to remain a headwind next year – but we do still give CAT credit for 5ppts of top-line Construction benefit from restock in 2014e. We are more bearish on Mining CapEx as we do not expect the second derivative of cuts to turn positive until 2016e.

Mogran Stanley initiated the stock as an Equal Weight with an $89 price target.

Sunday, September 8, 2013

How Yahoo! Topped Google in Web Visitor Rankings

After five years at the top of the heap, Google Inc. (NASDAQ: GOOG) has relinquished its top spot in comScore Inc.'s (NASDAQ: SCOR) ranking of the top 50 U.S. Web properties. The new leader is Yahoo! Inc. (NASDAQ: YHOO) in what can only be called a stunning upset.

The comScore rankings are based unique visitors to all the sites owned by a brand. Yahoo's climb in July from about 189 million uniques in June to more than 196 million in July topped Google's slight decline of about 250,000 unique visitors.

More interesting perhaps, is where the million additional visitors might have come from. The total number of unique visitors grew by about 1 million, from 224 million to 225 million. Among the top five properties the big loser was Facebook Inc. (NASDAQ: FB), which dropped from about 144.7 million uniques in June to 142.3 million in July. Sites owned by Microsoft Corp. (NASDAQ: MSFT) gained about 4.6 million to 179.6 million uniques in July, and AOL Inc. (NYSE: AOL) gained about 4 million to 117.4 million total unique visitors in July.

The dramatic increase in Yahoo!'s traffic may be due to its May acquisition of, but it is not clear what portion of Tumblr traffic is being counted for Yahoo! At least since March comScore's ranking of Tumblr includes the cryptic footnote, "Entity has assigned some portion of traffic to other syndicated entities." What that means is left up to the imagination.

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Tumblr had 29.3 million unique footnoted visitors in March and 38.4 million in July. The July total is 2.6 million higher than the June number, so it is not a stretch to assign more visitors to those other entities.

The rankings are worth more than just bragging rights too. Yahoo! has taken over the top spot in comScore's Ad Focus rankings as well with an 87.2% reach. That means that a page owned by a Yahoo! site was viewed by 87.2% of the 225 million total Web visitors in July. That is well ahead of Google's 80.6% reach. And that translates into higher ad rates and more revenue for Yahoo!

Shares of Yahoo! are up 2.2% in early trading Thursday morning, at $27.65 in a 52-week range of $14.59 to $29.83.

Friday, September 6, 2013

Is Micron Technology A Risky Investment?

With shares of Micron Technology (NASDAQ:MU) trading around $9, is MU 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

Micron Technology is a global manufacturer and marketer of semiconductor devices, packaging solutions, and semiconductor systems for use in computing, consumer, networking, automotive, industrial, embedded and mobile products. The company operates in four segments: NAND Solutions Group, DRAM Solutions Group, Wireless Solutions Group and Embedded Solutions Group. Micron Technology's products include: NAND Flash Memory, Dynamic Random Access Memory and NOR Flash Memory. Through its segments, Micron Technology is able to provide important components for technology products exisiting in various industries. As these industries continue to expand worldwide, Micron Technology is poised to see rising profits well into the future.

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T = Technicals on the Stock Chart are Strong

Micron Technology stock has suffered in recent years but seems to have found value between the in the single digit price range. The stock has bounced off of the lower end of its established range with conviction so it may be getting ready to break higher. 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, Micron Technology 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 Micron Technology options may help determine if investors are bullish, neutral, or bearish.

Implied Volatility (IV)

30-Day IV Percentile

90-Day IV Percentile

Micron Technology Options




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

Put IV Skew

Call IV Skew

May Options



June Options



As of today, there is an average demand from call and put buyers or sellers, neutral over the next two months. To summarize, investors are buying a significant amount of call and put option contracts and are leaning neutral 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 Micron Technology’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for Micron Technology look like and more importantly, how did the markets like these numbers?

2012 Q4

2012 Q3

2012 Q2

2012 Q1

Earnings Growth (Y-O-Y)





Revenue Growth (Y-O-Y)





Earnings Reaction





Micron Technology has seen mixed earnings and revenue figures over the last four quarters. From these figures, the markets were excited about Micron Technology’s most recent earnings announcement.

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P = Average Relative Performance Versus Peers and Sector

How has Micron Technology stock done relative to its peers, Spansion (NYSE:CODE), Intel (NASDAQ:INTC), SanDisk (NASDAQ:SNDK), and sector?

Micron Technology





Year-to-Date Return






Micron Technology has been an average performer, year-to-date.


Micron Technology operates in an expanding semiconductor industry that provides valuable products to consumers and businesses worldwide. The stock has struggled in recent years but seems to have stabilized at bit and could be heading higher. The most recent earnings and revenue figures really pleased investors so the stock has been doing well. Relative to its peers and sector, Micron Technology has been an average year-to-date performer. WAIT AND SEE what Micron Technology does this coming quarter.

Thursday, September 5, 2013

Hot China Stocks To Watch Right Now

Big trouble has taken over the big economies this week. American markets fizzled on the back of fears over the end of quantitative easing, but a far more drastic uncertainty is locking down China's markets. Hong Kong's Hang Seng (HSIINDICES: ^HSI  ) shed 4% this week after downbeat factory data and a serious cash crunch have cast doubts about any economic rebound for China's slowing economy. While some predicted China's recent slowdown of sub-8% annual economic growth would be a passing slump, it's looking more and more likely that the China we used to know is history.

How will this impact investors and stocks? Let's check what's dragging down the world's second-largest economy.

Interest rates on the rise in China's big crunch
The U.S. and Japan have thrown stimulus at their economies to solve problems, but Beijing's not operating under the same plan. China's government has pushed�for reform in its financial sector, a smart long-term move to punish bad lenders and firm up the strongest institutions in the long run. On the other hand, it's crippling in the here and now. Lending rates are skyrocketing, and companies are finding funds harder to come by. That's not going to dig China out of its economic slowdown fast, and the IMF's earlier 7.7% economic growth projection for 2013 may end up being too optimistic.

Hot China Stocks To Watch Right Now: Safe Bulkers Inc(SB)

Safe Bulkers, Inc. provides marine drybulk transportation services worldwide. The company transports various bulk cargoes, primarily coal, grain, and iron ore. As of July 15, 2011, it had a fleet of 16 drybulk vessels, with an aggregate carrying capacity of 1,443,800 deadweight tons. The company?s fleet consists of Panamax, Kamsarmax, Post-Panamax, and Capesize class vessels, as well as 11 further contracted additional drybulk new build vessels to be delivered at various times through 2014. Safe Bulkers, Inc. was incorporated in 2007 and is based in Athens, Greece.

Advisors' Opinion:
  • [By Beacon Equity]

    Safe Bulkers Inc. (NYSE: SB) is down 10.69% to $8.27 on above-average volume of 1.97 million shares. The drybulk shipping company has priced its public offering of 5 million shares of its common stock at $8.40 per share. (NYSE:SB), (SB)

Hot China Stocks To Watch Right Now: Philippine Long Distance Telephone Company(PHI)

Philippine Long Distance Telephone Company provides telecommunication services in the Philippines. Its Wireless segment offers cellular mobile services; Internet broadband distribution and services; call center services; mobile applications development and services; software development and sale of maintenance and support services; mobile commerce solutions; mobile commerce platforms; mobile applications development and services; solutions and systems integration services; satellite communications services; and satellite information and messaging services. This segment also involves in the promotion of the sale and/or patronage of debit and/or charge cards; offshore financing and risk management activities for smart; international trade of satellites and global system for mobile communication, or GSM enabled global telecommunications; and delivery of GSM communication capability for the maritime sector, as well as operates as a content provider. The company?s Fixed Line s egment provides fixed line telecommunication services, such as local exchange, international long distance, national long distance, data and other network services, as well as infrastructure and related services. Its Information and Communications Technology segment offers integrated information and communications technology services focusing on infrastructure and solutions for Internet applications, Internet protocol based solutions, and multimedia content delivery. This segment also provides knowledge processing solutions, customer relationship management, Internet and online gaming services, and information technology consulting and professional services; and operates Internet data center under the Vitro brand name. As of December 31, 2010, the company had served approximately 49 million subscribers. It also resells software licenses, server solutions, networking products, storage products, and data security products. The company was founded in 1928 and is based in Makati City, the Philippines.

Best China Stocks To Invest In 2014: China Sunsine Chem Hldgs Ltd. (CH8.SI)

China Sunsine Chemical Holdings Ltd., an investment holding company, engages in the manufacture and sale of rubber chemical products in the People's Republic of China and internationally. The company primarily offers rubber accelerators comprising Accelerator MBT for dry rubber and latex applications; Accelerator MBTS and Accelerator MBS used in the manufacture of synthetic rubber and natural rubber; Accelerator CBS for use in the manufacture of tires, shoes, tubes, cables, and other rubber goods; Accelerator TBBS for use in rubber products and tires; Accelerator DCBS for the manufacture of tires, belts, and shock absorbers; Accelerator DPG for the production of tires, boards, shoes, and other industrial rubber goods; and Accelerator TMTD that is used in the production of tires, inner tube of tires, shoes, and cables, as well as used as germicides and insecticides in agriculture, and lubricant additives. Its products also include anti-scorching CTP, an anti-scorching agent for the vulcanization process to prevent rubber materials from burning; anti-oxidant RD for the manufacture of tires, motorcycles births, bicycles births, rubber, plastics, adhesive tapes, wires, cables, and other rubber products; and insoluble sulphur, a vulcanizing agent for rubber. China Sunsine Chemical Holdings Ltd. offers its products under the Sunsine brand. It serves tire manufacturers; manufacturers of other related products, such as shoes, belts, and hoses; and rubber chemicals distributors. The company is based in Singapore. China Sunsine Chemical Holdings Ltd. is a subsidiary of Success More Group Ltd.

Tuesday, September 3, 2013

5 Best Tech Stocks To Own For 2014

In its recently published medium-term review of the oil market, the International Energy Agency forecast that the U.S. will account for a third of new global oil supplies over the next five years, an upward revision from the agency's previous estimates.

The IEA's optimism marks a drastic departure from the conventional view just a few years ago, which held that the global crude oil market would remain tight and supply growth would be dominated by OPEC member countries. But the U.S. shale boom has changed that perception in a hurry.

Thanks to advances in drilling technologies, such as horizontal drilling and hydraulic fracturing, energy companies have managed to tap a previously inaccessible bounty of oil and gas trapped under shale rock formations. This so-called shale revolution helped propel U.S. oil production last year to its highest level since 1998, while reducing imports to their lowest level since 1997. �

5 Best Tech Stocks To Own For 2014: Diodes Incorporated(DIOD)

Diodes Incorporated, together with its subsidiaries, designs, manufactures, and supplies application specific standard products within the broad discrete, logic, and analog semiconductor markets primarily in Asia, North America, and Europe. Its products portfolio consist of diodes, rectifiers, transistors, MOSFETs, protection devices, functional specific arrays, single gate logic, amplifiers and comparators, transient voltage suppressors, silicon wafers, drain inverters, and Hall-effect and temperature sensors. The company also provides power management devices, including LED drivers, and DC-DC switching and linear voltage regulators; and special function devices comprising USB power switches, load switches, voltage supervisors, and motor controllers. It sells its products to consumer electronics, computing, communications, industrial, and automotive industries through direct sales and marketing personnel, independent sales representatives, and distributors. The company wa s founded in 1959 and is headquartered in Plano, Texas.

5 Best Tech Stocks To Own For 2014: GigaMedia Limited (GIGM)

Gigamedia Limited, through its subsidiaries, primarily engages in the operation of online games for online game players in Asia. The company provides a portfolio of online games, including MahJong, a traditional Chinese tile game; MMORPG, an Internet-based computer game; advanced casual games; and card, chance-based, and simple casual games. It also develops and licenses online poker, casino, and sports betting gaming software solutions, as well as offers application services for the online poker and casino markets primarily in the continental European markets. The company has strategic alliances with SoftStar Entertainment Inc., Neostorm Holdings Limited, XLGames Inc., Access China Holding Limited, Gorilla Banana Entertainment Corp., JC Entertainment Corporation, Possibility Space Incorporated, East Gate Media Contents & Technology Fund, and BetClic. GigaMedia Limited was founded in 1997 and is headquartered in Taipei, Taiwan.

Top 5 High Tech Stocks To Invest In Right Now: Amalphi AG (AMLP.DE)

Amalphi AG is a Germany-based company that offers multivendor services for the maintenance of hardware and software of all kinds of Information Technology (IT) equipment. Its main activity is the sale of services including quality assurance, whereas the physical services are provided via international service providers. The Company's products include amalphi ip and ip-pack. amalphi ip is a maintenance service concept for IT-, office- and other technical equipment based on electronic components, which include hardware and software maintenance, help desk service, patch management and asset management. ip-pack offers service packs for the OEM with Service Level Agreements (SLAs) for Hewlett-Packard and IBM products. The Company has a sales network throughout Germany. ES Investment GmbH holds approximately a 49%-stake in the Company.

5 Best Tech Stocks To Own For 2014: Viasystems Group Inc.(VIAS)

Viasystems Group, Inc. provides multi-layer printed circuit boards (PCBs) and electro-mechanical solutions worldwide. The company?s products and services are used in a range of applications, including, automotive engine controls, data networking equipment, telecommunications switching equipment, complex medical, technical and industrial instruments, and flight control systems. Its PCBs products include circuitry and mounting surfaces to interconnect discrete electronic components, such as integrated circuits, capacitors, and resistors. The company?s electro-mechanical solutions comprise assembly of backplanes, assembly of printed circuit boards, fabrication of custom and standard metal enclosures, cabinets, racks, sub-racks and bus bars; systems integration; final assembly; and product testing and fulfillment. It also offers various manufacturing services consisting of design and prototyping, PCB and backpanel fabrication, backpanel assembly, PCB assembly, custom metal e nclosure fabrication, full system assembly and test, packaging and global distribution, after-sales support, and supply chain management. The company markets its products and services to original equipment manufacturers and contract electronic manufacturers in automotive, industrial and instrumentation, telecommunications, computer and data communications, and military and aerospace markets through its own sales and marketing organization, and through relationships with independent sales agents. The company was formerly known as Circo Technologies, Inc. and changed its name to Viasystems Group, Inc. in January 1997. Viasystems Group, Inc. was founded in 1996 and is headquartered in St. Louis, Missouri.

5 Best Tech Stocks To Own For 2014: Red Hat Inc.(RHT)

Red Hat, Inc. provides open source software solutions to enterprises worldwide. It also offers enterprise-ready open source operating system platforms. The company provides Red Hat Enterprise Linux, an operating system designed for enterprise computing; JBoss Enterprise Middleware that offers a suite of products for developing, deploying, integrating, and managing distributed, composite, and Web-based applications and services; and Red Hat Enterprise Virtualization for Servers, including Red Hat Enterprise Virtualization Hypervisor, a hypervisor based on KVM technology that converts the Red Hat Enterprise Linux kernel into a virtualization platform; and Red Hat Enterprise Virtualization Manager, a server virtualization management system, which provide capabilities for host and guest operating systems, such as availability, live migration, power manager, storage manager, and system scheduler. It also offers other Red Hat enterprise technologies, which comprise Red Hat MRG t hat integrates open and scalable messaging; Red Hat Developer, which provides integrated development environments and support for application developers; and Red Hat Directory Server that centralizes application settings, user profiles, group data, policies, and access control information into a network-based registry. In addition, the company offers Red Hat systems management solutions, such as RHN, RHN Satellite, Red Hat Customer Portal, and JBoss ON; and infrastructure enterprise technologies, including software development tools, clustering of systems and services, and directory services. Further, it provides consulting, training, and support services. The company sells its enterprise technologies through subscriptions. It has strategic alliances with Advanced Micro Devices, Inc.; and Intel Corporation. The company was formerly known as Red Hat Software, Inc. and changed its name to Red Hat, Inc. in June 1999. Red Hat, Inc. was founded in 1993 and is headquartered in Ral eigh, North Carolina.

Advisors' Opinion:
  • [By CRWE]

    Red Hat, Inc. (NYSE:RHT), the world�� leading provider of open source solutions, reported new steps in its collaboration with SAP AG (NYSE:SAP) focused on virtualization. Red Hat is working with SAP to provide customers with easier deployments of SAP庐 applications on physical Red Hat servers, in virtualized environments or in the cloud.

Sunday, September 1, 2013

Janney Recruits Morgan Stanley FA in Delaware

A Janney Montgomery meeting room at its headquarters.Janney Montgomery Scott says it has recruited a Morgan Stanley (MS) advisor in Greenville, Del.

Vincent Crognale is joining the Philadelphia-based broker-dealer with close to $80 million in client assets, Janney said Thursday. Crognale is an 18-year industry veteran who spent the last 13 years at Morgan Stanley and was with Wheat First Butcher Singer from 1995 to 2000.

“With close to two decades of financial-services experience under his belt, Vince is highly regarded in the industry,” said Regional Manager Tom Simcik, in a statement. “He shares Janney’s exemplary focus on the advisor-client relationship by constantly keeping clients’ needs in the front of our minds. I am confident that his clients will benefit from all that Janney offers.”

Janney, which is based in Philadelphia, is a unit of Penn Mutual Life Insurance Co. In June, the broker-dealer had 741 financial advisors managing more than $58 billion in client AUM.

In late July, Janney recruited two veteran advisors on the East Coast with more than $90 million in client assets; one of them previously worked for Morgan Stanley.

Morgan Stanley says that it had 16,321 advisors as of June 30, an increase of 37 reps from the prior quarter and a decrease of 157 reps from the year-ago period. Total client assets were $1.78 trillion at quarter end versus $1.79 trillion in the earlier quarter and $1.64 trillion last year. Fee-based assets currently represent 35% of total assets, according to the company.