Friday, January 31, 2014

A new way for advisers to attract clients?

Nicholas W. Stuller of AdviceIQ Nicholas W. Stuller of AdviceIQ

When Nick Stuller was a financial adviser in the 1980s, he relied on cold calls and his reputation in the community to attract new business.

Now, it's more difficult for advisers, he said.

“It was a different era,” he said. “As a young adviser back then, it was very different.”

Enter AdviceIQ, the business launched by Mr. Stuller and his team a year and a half ago. The site currently features profiles and rankings of about 2,600 financial advisers from 27 broker-dealer firms, detailing their assets under management, client characteristics, mission and contact information. It couples that with a blend of fact-checked articles written by financial advisers that are syndicated daily to 12 media sites, including Morningstar, The Motley Fool and Forbes.

Within the next year, Mr. Stuller, AdviceIQ's CEO, said the company aims to build its client base to 7,000 advisers, bring on an additional 25 media syndication partners and increase the number of articles it publishes daily from three to 10.

Creating a profile on the site costs an adviser's firm $1,000 a year. For the moment, Mr. Stuller said the emphasis of the website is on helping advisers create a digital brand and increase their online presence, rather than generating leads.

“Investors have never had an objective place to learn about advisers,” he said. “On the adviser side, they have a hard time getting their name out in a way that is compliant and doesn't break the bank.”

Other sites with similar functions include BrightScope and WalletHub.

Eve Kaplan, owner of Kaplan Financial Advisors, is one adviser who is using the site to get her name in front of more potential clients by writing for it. She also continues to write financial advice stories for her local newspaper in New Jersey, which helps her attract older clients, and spends time writing for other online platforms. These outlets are another way advisers can reach the public, although it can be difficult to track the amount of traction her online stories gain, she said.

Hot Bank Stocks To Buy Right Now

“There is this whole idea that if you're out there on the Internet, people will find you,” she said. “Sometimes I think it! 's true, sometimes it's not … I don't think it's hard to get your name out there. Whether it's actually given any attention, that's hard to say.”

Jason Lina, lead adviser at the Resource Planning Group, said he has known about AdviceIQ since it launched and began utilizing his profile and writing for the website about six months ago. So far, he's had three articles published on topics related to the new health care laws. He said he hasn't checked his firm's website analytics to see if his posts have helped generate traffic, but he suspects that they have.

“You didn't see my name on Morningstar every day before that,” he said. “Websites like this, the idea is that they help adv

Thursday, January 30, 2014

Ashton Kutcher joins Lenovo as product engineer

SAN FRANCISCO – Engineers are at a premium, yet Lenovo landed a new product engineer and celebrity pitchman when it inked a partnership with Ashton Kutcher on Tuesday night.

"It's somewhat of a dual role," Kutcher told USA TODAY in a phone interview hours before a live-streaming broadcast to announce his appointment and the introduction of the PC maker's Yoga Tablet. Shortly after the event, Kutcher was scheduled to fly to China to meet with Lenovo engineers and executives.

Kutcher, who studied biochemical engineering at the University of Iowa (he did not graduate) and has a proven track record in tech investments, intends to offer advice on design and software for Yoga tablets. "Lenovo makes really, really, really good hardware," he said. "I hope to make their products as consumer friendly as possible."

NEW LENOVO TABLET: 'Yoga' Android tablet can strike three poses

The partnership amounts to a calculated risk for Lenovo and the star of the CBS comedy, Two and a Half Men. But that is precisely why Kutcher — who has relationships with Apple, Google and others — took the gig. "If you look at my career, what's constant is I like to take risks — so does Lenovo," Kutcher said.

"Lenovo is all about innovation and strong leadership," said Kutcher, co-founder of A-Grade Investments, which has invested in or worked with Airbnb, Foursquare, Spotify, Path, Uber and others.

"This partnership goes beyond traditional bounds by deeply integrating him into our organization as a product engineer," said David Roman, chief marketing officer at Lenovo. "Ashton will help us break new ground by challenging assumptions, bringing new perspective and contributing his technical expertise to Yoga Tablet and other devices."

Financial terms of the multi-year partnership were not disclosed.

Kutcher, who played the title character in the recently released biopic of Steve Jobs, said he was "figuring logistics" for his new job. Among his responsibilities is meeting with engineers! of the world's largest PC maker globally.

Wednesday, January 29, 2014

David Marsh: Tests looming for Janet Yellen

Janet Yellen will become the world's most powerful woman on Feb. 1. The Federal Reserve is still the world's monetary policeman. The dollar is by a large margin the supreme international currency.

At the helm of the Fed's board and the interest rate-setting Federal Open Market Committee, Yellen can produce global waves. She will be presiding over the gradual withdrawal of the Fed's extraordinary monetary stimulus of the past five years. The process should eventually bring rewards for the U.S. and its partners, but it can cause pain too – as the turbulence of the last few days have shown in emerging market economies ranging from Brazil and Turkey to Argentina and India.

In aftermath of the financial crisis, central banks across the world, are being called upon to take up an ever-wider set of responsibilities - not just monetary stability but also fiscal policies and banking supervision. All this brings strains on their operating maneuverability as well as on their independence.

MARKETS: Stocks swoon amid Fed, emerging market worries

FED OUTLOOK: Steady Fed policy could steady markets

The burdens on Yellen are acute. Yet in her new role, both in America and globally, she is likely to accomplish that task better than most. She can combine her first-class economics training with ability to drawn on diverse experience to master two great challenges: returning U.S. monetary policy to a more normal path, and helping prepare America for a multi-polar world in which it shares economic and financial power more equitably with other countries, not least in Asia.

What is remarkable about Yellen's appointment is not that she is a woman. She was the best candidate for the job. More important, she had to overcome the favoritism of the old boy network at the White House. President Obama haplessly clung, almost to the last moment, to his preferred choice, former Treasury secretary Lawrence Summers – a brilliant man, but one whose intellectual skittishness and sometimes unm! annerly behavior would have made him highly accident-prone.

The president eventually caved in and accepted Yellen's impressive credentials. By raising her reputation for independence and damaging that of the president for sound judgment, the episode harmed Obama much more than Yellen.

Yellen is a Keynesian economist but not dogmatic. She has been sometimes overshadowed by her husband, George Akerlof, who won the Nobel prize for economics in 2001. Yellen now moves truly out of the shadows. She is extremely smart but has no need to appear the smartest person in the room.

Already, for reasons unconnected to gender, she has made history for several reasons. At 67, she is the oldest person ever appointed to be Fed chief and the first vice chairman to ascend to the top job. She is the first Democrat called upon to lead the Fed since President Jimmy Carter appointed Paul Volcker in 1979. She and Stanley Fischer, another veteran of global reputation, will be a star team.

In past years Yellen has drawn attention to the balance sheet vulnerabilities of U.S. banks that would face large write-down on their bond holdings should the Fed abruptly stop asset purchases. If the bond purchase program wind-down coincides, as planned, with a pick-up in the economy, an increase in banks' lending and a reduction in their government bond holdings, then this factor will be a great deal much less crucial.

Generally, though, political and economic circumstances will make 2014 a lot less benign than 2013 for financial markets.

Diminutive, low-pitched Yellen was considered by some in the vetting process last fall to lack gravitas – as if only a 6-foot-7 inch, gravel-voiced cigar-chomping male like Paul Volcker could be said to have that quality. The Fed faces enormous challenges. A 5- foot-3 inch lady from Brooklyn who speaks softly but carries a big monetary stick is not the worst person to tackle them.

Top 5 Pe! nny Companies For 2014

David Marsh is chairman of the Official Monetary and Financial Institutions Forum (OMFIF), a London-based think tank that promotes dialogue between private-sector and public institutions on world finance.

Tuesday, January 28, 2014

Does AT&T Have a Bright Future?

With shares of AT&T (NYSE:T) trading around $33, is T 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

AT&T is a provider of telecommunications services in the United States and worldwide. Services offered include wireless communications, local exchange services, and long-distance services. AT&T operates in four segments: Wireless, Wireline, Advertising Solutions, and Other. The communications products offered through AT&T's segments reach audiences using just about every widely adopted medium: Internet, voice, television, and mobile. As consumers continue to adopt this technology, providers like AT&T stand to see rising profits.

Investors in Vodafone (NASDAQ:VOD) waiting for a bumper pay-off from a £70bn bid from AT&T were dealt a blow on Monday after the American group ruled itself out from making a bid for its UK rival. The announcement will prevent the US group from bidding for the Vodafone for six months, although the move was seen by analysts as more of a hiatus than hard stop for one of the most widely anticipated deals in the European corporate sector.

T = Technicals on the Stock Chart Are Weak

AT&T stock has been range-bound over the past couple of years. The stock is currently trading sideways and may need time to consolidate. 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, AT&T is trading below its rising key averages which signal neutral to bearish price action in the near-term.


(Source: Thinkorswim)

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

Implied Volatility (IV)

30-Day IV Percentile

90-Day IV Percentile

AT&T 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

February Options



March Options



As of today, there is an average demand from call buyers or sellers and high demand by put buyers or low demand by put sellers, all neutral to bearish over the next two months. To summarize, investors are buying a significant amount of call and put option contracts and are leaning neutral to bearish 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 Increasing 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 AT&T’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for AT&T look like and more importantly, how did the markets like these numbers?

2013 Q3

2013 Q2

2013 Q1

2012 Q4

Earnings Growth (Y-O-Y)





Revenue Growth (Y-O-Y)





Earnings Reaction





AT&T has seen increasing earnings and revenue figures over the last four quarters. From these numbers, the markets have had conflicting feelings about AT&T’s recent earnings announcements.

P = Excellent Relative Performance Versus Peers and Sector

How has AT&T stock done relative to its peers, Verizon (NYSE:VZ), Sprint (NYSE:S), T-Mobile (NASDAQ:TMUS), and sector?






Year-to-Date Return






AT&T has been a relative performance leader, year-to-date.


AT&T is a communications and entertainment company that operates around the world. The company no longer intends to make an offer for Vodafone. The stock has been consolidating in recent years and is currently trading sideways. Over the last four quarters, earnings and revenues have been increasing. However, investors have had conflicting feelings about recent earnings announcements. Relative to its peers and sector, AT&T has been a relative year-to-date performance leader. WAIT AND SEE what AT&T does next.

Saturday, January 25, 2014

Top Logistics Stocks To Invest In 2015

Longtime Washington Post columnist and retirement expert Stan Hinden has said that preparing for retirement is like preparing for a long trip overseas. For a vacation, you'd research all manner of logistics -- where to stay, where to sightsee, where to eat, how to get from place to place, how to pay for things, what languages you'll need to brush up on in advance, and more.

Retirement planning is no different. In the video below, Robert Brokamp, a Certified Financial Planner and advisor of Motley Fool Rule Your Retirement, tells senior editor Dayana Yochim four things would-be retirees should absolutely prepare before their golden years begin.

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 Logistics Stocks To Invest In 2015: Willis Group Holdings Limited(WSH)

Willis Group Holdings Public Limited Company provides a range of insurance brokerage, reinsurance, and risk management consulting services to its clients worldwide. The company offers various insurance brokerage services, including property damage, offshore construction, liability, and control of well and pollution insurance to the energy industry; and marine insurance and reinsurance brokerage services consisting of hull, cargo, and general marine liabilities. It also provides its services to aerospace clients, including aircraft manufacturers, air cargo handlers and shippers, airport managers, and other general aviation companies; and advisory services comprising claims recovery, contract and leasing risk management, market information, and safety services. In addition, the company offers risk management advice and brokerage services to the construction industry; brokerage for directors' and officers' insurance, as well as professional indemnity insurance for corporation s and professional firms; and specialist risk management and insurance services to fine art, diamond, and jewelry businesses, and operators of armored cars. Further, it provides special contingencies packages; services for horse racing and breeding industry, and agriculture/crop sector; and advice to companies involved in the insurance and reinsurance industry on capital markets products. Additionally, the company offers health, welfare, and human resources consulting and brokerage services to small, medium, and large corporations, as well as the employee benefits practice. It serves clients located in approximately 190 countries, including multinational and middle-market companies operating in various industries, as well as public institutions and individual clients. The company was formerly known as Willis Group Holdings Limited and changed its name to Willis Group Holdings Public Limited Company in January 2010. The company was founded in 1828 and is headquartered in Lond on, the United Kingdom.

Advisors' Opinion:
  • [By Jonas Elmerraji]

    $11 billion UK insurer Willis Group Holdings (WSH) is another uptrending channel. The big difference with Willis is that this name is actually at its trendline support level this week. Better still, shares are bouncing higher -- and it makes sense to buy the bounce here.

    Buying off a support bounce makes sense for two big reasons: It's the spot where shares have the furthest to move up before they hit resistance, and it's the spot where the risk is the least (because shares have the least room to move lower before you know you're wrong). Remember, all trend lines do eventually break, but by actually waiting for the bounce to happen first, you're ensuring WSH can actually still catch a bid along that line.

    The 50-day moving average has been a good proxy for support on the way up, so it's a solid place to put a protective stop if you decide to be a buyer at this point.

Top Logistics Stocks To Invest In 2015: UMW Holdings Bhd (UMW)

UMW Holdings Berhad is engaged in import, assembly and marketing of passenger and commercial vehicles and related spares and manufacturing of original/replacement automotive parts; trading and manufacturing of a wide range of light and heavy equipment including related spares for use in the industrial, construction, agricultural and mining sectors; and manufacturing and trading of oil pipes and providing various oil and gas services including drilling and pipe-coating. The Company operates in five segments: automotive, equipment, manufacturing and engineering, oil and gas and other. The automotive segment is principally engaged in the import, assembly and marketing of passenger and commercial vehicles and related spares. In September 2013, UMW Holdings Berhad announced the winding up of UMW Petrodril Siam Co. Ltd.

Top Gold Stocks To Own For 2015: Phillips 66 (PSX)

Phillips 66 is a holding company. The Company is engaged in producing natural gas liquids (NGL) and petrochemicals. The Company operates in three segments: the Refining and Marketing (R&M) segment, the Midstream segment and the Chemicals segment. The Refining and Marketing (R&M) segment purchases, refines, markets and transports crude oil and petroleum products, mainly in the United States, Europe and Asia, and also engages in power generation activities. The Midstream segment gathers, processes, transports and markets natural gas, and fractionates and markets NGL, predominantly in the United States. The Chemicals segment manufactures and markets petrochemicals and plastics on a worldwide basis. The Company�� operations encompass 15 refineries with a gross crude oil capacity of 2.8 million barrels per day, 10,000 branded marketing outlets and 7.2 billion cubic feet per day of gross natural gas processing capacity.


The Company�� R&M segment primarily refines crude oil and other feedstocks into petroleum products (such as gasolines, distillates and aviation fuels); buys, sells and transports crude oil; and buys, transports, distributes and markets petroleum products. This segment also engages in power generation activities. R&M has operations in the United States, Europe and Asia.

The Company�� Bayway Refinery is located on the New York Harbor in Linden, New Jersey. The refinery produces a high percentage of transportation fuels, such as gasoline, diesel and jet fuel, as well as petrochemical feedstocks, residual fuel oil and home heating oil. Its Trainer Refinery is located on the Delaware River in Trainer, Pennsylvania. Refinery facilities include fluid catalytic cracking units, hydrodesulfurization units, a reformer and a hydrocracker. The Alliance Refinery is located on the Mississippi River in Belle Chasse, Louisiana. The single-train facility includes fluid catalytic cracking units, hydrodesulfurization units and a reformer and aromatics unit. Alli! ance produces a percentage of transportation fuels, such as gasoline, diesel and jet fuel. Other products include petrochemical feedstocks, home heating oil and anode petroleum coke.

The Lake Charles Refinery is located in Westlake, Louisiana. Its facilities include crude distillation, fluid catalytic cracker, hydrocracker, delayed coker and hydrodesulfurization units. The refinery produces a percentage of transportation fuels, such as gasoline, off-road diesel and jet fuel, along with home heating oil. It owns a 50% interest in Excel Paralubes, a joint venture which owns a hydrocracked lubricant base oil manufacturing plant located adjacent to the Lake Charles Refinery. The Sweeny Refinery is located in Old Ocean, Texas, approximately 65 miles southwest of Houston. Refinery facilities include fluid catalytic cracking, delayed coking, alkylation, a continuous regeneration reformer and hydrodesulfurization units. It produces a percentage of transportation fuels, such as gasoline, diesel and jet fuel. Other products include petrochemical feedstocks, home heating oil and coke.

The Company�� Merey Sweeny, L.P. (MSLP) owns a delayed coker and related facilities at the Sweeny Refinery. Fuel-grade petroleum coke is produced as a by-product and becomes the property of MSLP. The Company owns 50% operating interest in Sweeny Cogeneration, a joint venture, which owns a simple cycle, cogeneration power plant located adjacent to the Sweeny Refinery. The plant generates electricity and provides process steam to the refinery, and it also provides merchant power into the Texas market.

The Company�� Wood River Refinery is located in Roxana, Illinois, about 15 miles northeast of St. Louis, Missouri, at the convergence of the Mississippi and Missouri rivers. Operations include three distilling units, two fluid catalytic cracking units, hydrocracking, coking, reforming, hydrotreating and sulfur recovery. The refinery produces a percentage of transportation fuels, such as gasoline,! diesel a! nd jet fuel. Other products include petrochemical feedstocks, asphalt and coke. Its Borger Refinery is located in Borger, Texas, in the Texas Panhandle, approximately 50 miles north of Amarillo. The refinery facilities consist of coking, fluid catalytic cracking, hydrodesulfurization and naphtha reforming, in addition to a 45,000-barrels-per-day NGL fractionation facility. It produces a percentage of transportation fuels, such as gasoline, diesel and jet fuel, as well as coke, NGL and solvents.

The Ponca City Refinery is located in Ponca City, Oklahoma. It is a high-conversion facility, which includes fluid catalytic cracking, delayed coking and hydrodesulfurization units. It produces a range of products, including gasoline, diesel, jet fuel, liquefied petroleum gas (LPG) and anode-grade petroleum coke. The Billings Refinery is located in Billings, Montana. Its facilities include fluid catalytic cracking and hydrodesulfurization units. The Ferndale Refinery is located on Puget Sound in Ferndale, Washington, approximately 20 miles south of the United States-Canada border. Facilities include a fluid catalytic cracker, an alkylation unit, a diesel hydrotreater and an S-Zorb unit. The Los Angeles Refinery consists of two linked facilities located about five miles apart in Carson and Wilmington, California. The San Francisco Refinery consists of two facilities linked by a 200-mile pipeline. The Santa Maria facility is located in Arroyo Grande, California, about 200 miles south of San Francisco.

As of December 31, 2011, the Company marketed gasoline, diesel and aviation fuel through approximately 8,250 marketer-owned or -supplied outlets in 49 states. At December 31, 2011, its wholesale operations utilized a network of marketers operating approximately 6,875 outlets that provided refined product offtake from its refineries. In addition to automotive gasoline and diesel, it produces and markets aviation gasoline, which is used by smaller piston engine aircrafts. As December 31, 2011,! aviation! gasoline and jet fuel were sold through dealers and independent marketers at approximately 875 Phillips 66-branded locations in the United States.

The Company manufactures and sells automotive, commercial and industrial lubricants, which are marketed worldwide under the Phillips 66, Conoco, 76 and Kendall brands, as well as other private label brands. It also manufactures Group II and import Group III base oils and market both globally under the respective brand names Pure Performance and Ultra-S. It manufactures and markets graphite and anode-grade petroleum cokes in the United States and Europe for use in the global steel and aluminum industries. It also manufacture and market polypropylene to North America under the COPYLENE brand name. Its ThruPlus Delayed Coker Technology, a process for upgrading heavy oil into higher value, light hydrocarbon liquids, was sold in June 2011. In October 2011, it sold Seaway Products Pipeline Company to DCP Midstream. In December 2011, the Company sold its 16.55% interest in Colonial Pipeline Company and its 50% interest in Seaway Crude Pipeline Company. The Company manufactures and sells a variety of specialty products, including pipeline flow improvers and anode material for high-power lithium-ion batteries. Its specialty products are marketed under the LiquidPower and CPreme brand names.

The Company owns four refineries outside the United States: the Humber Refinery, Whitegate Refinery, Melaka Refinery and Wilhelmshaven Refinery. The Humber Refinery is located on the east coast of England in North Lincolnshire, United Kingdom. It is an integrated refinery, which produces a high percentage of transportation fuels, such as gasoline and diesel. Humber�� facilities encompass fluid catalytic cracking, thermal cracking and coking. The refinery has two coking units with associated calcining plants, which upgrade the heaviest part of the crude barrel and imported feedstocks into light oil products and graphite and anode petroleum cokes.


Th! e Whitegate Refinery is located in Cork, Ireland. The refinery primarily produces transportation fuels, such as gasoline, diesel and fuel oil, which are distributed to the inland market, as well as being exported to Europe and the United States. It also operate a crude oil and products storage complex consisting of 7.5 million barrels of storage capacity and an offshore mooring buoy, located in Bantry Bay, about 80 miles southwest of the refinery in southern Cork County.

The Mineraloelraffinerie Oberrhein GmbH (MiRO) Refinery, located on the Rhine River in Karlsruhe in southwest Germany, is a joint venture in which it owns an 18.75% interest. Facilities include three crude unit trains, fluid catalytic cracking, petroleum coking and calcining, hydrodesulfurization units, reformers, isomerization and aromatics recovery units, ethyl tert-butyl ether (ETBE) and alkylation units. MiRO produces a percentage of transportation fuels, such as gasoline and diesel. Other products include petrochemical feedstocks, home heating oil, bitumen, and anode- and fuel-grade petroleum coke. The Wilhelmshaven Refinery is located in the northern state of Lower Saxony in Germany, and has a 260,000 barrels-per-day crude oil processing capacity.

As of December 31, 2011, the Company had approximately 1,430 marketing outlets in its European operations, of which approximately 900 were Company-owned and 330 were dealer-owned. It also held brand-licensing agreements with approximately 200 sites. Through its joint venture operations in Switzerland, it also has interests in 250 additional sites.


The Midstream segment purchases raw natural gas from producers, including ConocoPhillips, and gathers natural gas through pipeline gathering systems. Its Midstream segment is primarily conducted through its 50% investment in DCP Midstream. DCP Midstream also owns or operates 12 NGL fractionation plants, along with propane terminal facilities and NGL pipeline assets. It has a 25% inte! rest in R! ockies Express Pipeline LLC (REX).


The Chemicals segment consists of its 50% investment in CPChem. As of December 31, 2011, CPChem owned or had joint-venture interests in 38 manufacturing facilities. CPChem�� business is structured around two primary operating segments: Olefins & Polyolefins (O&P) and Specialties, Aromatics & Styrenics (SA&S). The O&P segment produces and markets ethylene, propylene, and other olefin products, which are primarily consumed within CPChem for the production of polyethylene, normal alpha olefins, polypropylene and polyethylene pipe. The SA&S segment manufactures and markets aromatics products, such as benzene, styrene, paraxylene and cyclohexane, as well as polystyrene and styrene-butadiene copolymers.

Advisors' Opinion:
  • [By Dan Caplinger]

    Marathon Petroleum has capitalized on the supply and demand disparities between U.S. producers and worldwide consumers of energy products. With high demand from resource-poor countries like Japan and South Korea as well as several Western European nations, Marathon, Valero (NYSE: VLO  ) , and Phillips 66 (NYSE: PSX  ) have all boosted their exports of refined products to more than half a million barrels at the end of 2012.

  • [By Dan Caplinger]

    Valero has been able to cash in on extremely strong conditions in the market for refined energy products, especially gasoline. In large part, international demand is to blame for continued high gasoline prices in the U.S., with Venezuela having become a huge new player in importing gasoline. Competitors are taking advantage, with rival Phillips 66 (NYSE: PSX  ) having boosted its exports by half in the fourth quarter of 2012 in order to maximize its benefit from those favorable conditions. Still, Valero has a huge share of between 20% and 25% of all the U.S. petroleum products that get sent abroad.

Top Logistics Stocks To Invest In 2015: GT Advanced Technologies Inc (GTAT)

GT Advanced Technologies Inc., incorporated on September 27, 2006, is diversified technology company with crystal growth equipment and solutions for the global solar, light emitting diode (LED) and electronics industries. The Company operates in three segments: its polysilicon business, its photovoltaic (PV), business and its sapphire business. The Company's principal products are Silicon Deposition Reactors (SDR) and related equipment used to produce polysilicon, the key raw material used in silicon-based solar wafers and cells; Advanced sapphire crystallization furnaces (ASF) which are used to crystallize sapphire boules, and Directional solidification (DSS) furnaces and related equipment used to cast multicrystalline and MonoCast crystalline silicon ingots. On January 7, 2013, the Company announced the idling of its HiCz pilot manufacturing facility in Hazelwood, Missouri. On November 8, 2012, the Company acquired certain assets of Twin Creeks Technologies, Inc. (Twin Creeks). In May 2013, the Company acquired the business of Thermal Technology LLC.

PV Business

The focus of the Company's PV business is the development, manufacture and sales of crystallization growth furnaces to produce silicon ingots used in the production of solar wafers. The Company's principal product line has been the DSS family of casting furnaces that are used to produce multicrystalline ingots and MonoCast ingots. As of December 31, 2012, the Company shipped approximately 3,300 DSS crystallization furnaces. The ingots are used to make photovoltaic (PV) solar wafers and cells. HiCz, or continuous Czochralski (Cz) growth process, produces monocrystalline ingots that are designed to produce more efficient wafers. The Company�� DSS furnace is a specialized furnace used to melt polysilicon and cast multicrystalline ingots. Multicrystalline ingots are used to produce solar wafers, which ultimately become solar cells. The Company markets its DSS crystallization furnaces under the names DSS450HP and DSS6! 50. The Company's largest capacity DSS furnace, the DSS650, is capable of producing ingots that weigh up to 650 kilograms using standard silicon feedstock. In January 2012, the Company introduced its MonoCast silicon casting technology that uses the DSS furnace architecture to produce ingots comprised of a high percentage of monocrystalline material. The Company is markets MonoCast technology under the name DSS450 MonoCast.

The Company�� ancillary equipment provides operators with material handling assistance during the preparation of the crucible before it is loaded with silicon and during the loading and unloading of the crucible into the DSS furnace chamber at the start of the growth process and out of the DSS furnace chamber at the conclusion of the ingot growth process. The Company's ancillary equipment includes crucible coating stations, crucible manipulators, loaders/unloaders, extraction tools and other material handling systems required to safely transport material during the ingot growth process. The Company sells replacement parts and consumables used in its DSS furnaces and other PV equipment.

Polysilicon Business

The Company's polysilicon business offers Silicon Deposition Reactors, which utilize the chemical vapor deposition process, and related trichlorosilane (TCS) technology and equipment along with engineering services to existing polysilicon producers and new market entrants. The Company's polysilicon business focuses on product design, quality control, engineering services, project management and process development related to the production of polysilicon. It markets its SDR reactors under the names SDR300, SDR400, SDR 500 and SDR 600. The Company provides equipment, technology and engineering services for the production and purification of TCSand silane. This hydrochlorination technology eliminates the need for silicon tetrachloride converters which are required when using certain other polysilicon production technology. The Company also pr! ovides an! cillary equipment and technologies for producing seed rods used in its SDR reactors and for handling and processing the polysilicon rods into a finished product.

Sapphire Business

The Company's sapphire business markets and sells of the Company's ASF systems to customers to enable them to produce sapphire material. The Company also produces sapphire material, on a limited basis, for the LED and other specialty markets at its sapphire pilot production facility in Massachusetts. Its ASF systems produce monocrystalline sapphire material, referred to as sapphire boules. The sapphire boules are used to make sapphire wafers, a substrate for manufacturing LEDs, as well as sapphire blanks and windows for such applications as medical devices and watch crystals. The Company's ASF technology is based on the heat exchanger method (HEM), which is a directional solidification technique, which crystallizes the sapphire meltstock material during the growth process. The Company also uses the facility as a research and development (R&D) center to test new technology developments prior to commercial release. The Company markets and sells its ASF systems under the name ASF100. The Company also provides engineering and product design, quality control, process engineering, engineering services and field services related to the operation of its ASF furnaces. The Company produces sapphire material on a limited basis at its pilot production facility in Massachusetts. The Company sells this material to customers in the LED and other markets, such as the aerospace, defenses and medical device.

The Company manufactures and sells two principal types of sapphire materials: hems Sapphire Material and Titanium-doped Sapphire (Ti:Sapphire) Material. Using the material derives from the sapphire boule generated with its ASF furnaces, the Company cut the sapphire material in a number of different dimensions and crystal orientations, in form factors such as cores, rods, blanks, windows and tubes. The! Company ! generates sapphire boules that are doped with titanium. The Company provides certain finishing and polishing for its Ti:Sapphire material.

The Company competes with ALD Vacuum Technologies AG, JYT Corporation, Ferrotec Corporation, PVA TePla AG, Centrotherm Elektrische Anlagen GmbH & Co., Jing Gong Technology, Zhejiang Jingsheng Mechanical & Electrical Co., Ltd, MSA Apparatus Construction for Chemical Equipment Ltd, Centrotherm Elektrische Anlagen GmbH & Co., Morimatsu Industry Co. Ltd., Poly Plant Project, Inc., Hemlock Semiconductor Corporation, Wacker Chemie AG, MEMC Electronic Materials, Inc., Renewable Energy Corporation ASA, Thermal Technology LLC, Advanced Renewable Energy Company, LLC, Rubicon Technology, Inc., Sapphire Technology Co. Ltd. (Korea), Kyocera International Inc., Saint-Gobain, Gavish Inc., and Monocrystal.

Advisors' Opinion:
  • [By Brian Pacampara]

    Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, solar and LED equipment maker GT Advanced Technologies (NASDAQ: GTAT  ) has earned a respected four-star ranking.

Top Logistics Stocks To Invest In 2015: Amcom Telecommunications Ltd (AMM.AX)

Amcom Telecommunications Limited operates as an information technology (IT) and telecommunications company in Australia. The company offers data and network solutions, including Internet and Ethernet services, fiber-optic point-to-point connectivity solutions, managed router services, and VPN link services; voice and video, conferencing and collaboration, and call and contact centre solutions, as well as hardware comprising handsets, conferencing and collaboration equipment, and accessories; and cloud solutions, such as infrastructure as a service, software as a service, storage as a service, security as a service, and cloud data protection solutions. It also provides managed services, including network, infrastructure, desktop, and IT service management services; licensing and maintaining solutions, such as Amcom Active, which consolidates, controls, and maintains the licensing and maintenance requirements of organization�s IT; and data centre management services. In add ition, the company offers IT services, such as systems; communications; information, communication, and technology consulting; and security, governance, risk, and compliance services. Further, it provides solutions for IT technical and end-user training, and certification and professional development services; and consumer DSL services. Amcom Telecommunications Limited is headquartered in Perth, Australia.

Top Logistics Stocks To Invest In 2015: Align Technology Inc.(ALGN)

Align Technology, Inc., a medical device company, designs, manufactures, and markets clear aligner systems or Invisalign systems, intra-oral scanners, and computer-aided design (CAD) and computer-aided manufacturing (CAM) restorative models used in dentistry, orthodontics, and dental records storage in North America and Internationally. The company?s clear aligner products include Invisalign Full for the treatment of malocclusions; Invisalign Express and Invisalign Lite solutions for less complex orthodontic cases; Invisalign Teen, which is primarily marketed to orthodontists for treating malocclusion in teenage patients; Invisalign Assist for use in anterior alignment and aesthetically-oriented cases; and Vivera retainers for invisalign and non-invisalign patients. It also offers ancillary products comprising cleaning material and adjusting tools used by dental professionals during the course of treatment. In addition, the company provides iTero scanners; iOC scanners; a nd iTero dual scanner, which includes both the iTero restorative software and the iOC orthodontic software, as well as services comprising iTero restorative and OrthoCAD services. Further, it offers CAD/CAM services, such as iTero Models and Dies; OrthoCAD iCast and OrthoCAD iRecord that provides a digital alternative to traditional stone cast models, which allows for simplified storage and digital record retrieval; and OrthoCAD iQ, a computer-guided system for optimal placement of traditional brackets and customized indirect bonding tray system. The company distributes its products primarily directly to orthodontists and general practitioner dentists, as well as restorative dentists, including prosthodontists, periodontists, and oral surgeons. Align Technology, Inc. was founded in 1997 and is headquartered in San Jose, California.

Advisors' Opinion:
  • [By Ben Levisohn]

    Its braces might be invisible but Align Technology’s (ALGN) gains are not.

    Getty Images

    The maker of transparent braces and other dental products reported earnings of 42 cents a share, week above analyst forecasts for a 30 cent profit. Revenue, meanwhile, rose to $164.5 million, above the $158.6 million forecast.

    William Blair’s John Kreger and team are impressed:

    We are encouraged by the strong results, which stand in stark contrast to second half 2012 when volume growth and margins declined unexpectedly. Align’s Invisalign is clearly gaining market share, generating 16% unit growth in an environment where overall orthodontic procedures are essentially flat by our estimates.

    Stifel’s Jonathan Block and Ethan Roth can barely contain their excitement. They write:

    Our entire 2014 leverage thesis played out in 3Q13 as ALGN significantly beat EPS numbers…yet we were silly enough to make a cautious call in front of the quarter. That said, we think our 2014 $1.66 versus the Street�� $1.53 should no longer be viewed as an ��nrealistic expectation��and we believe consensus likely brings their estimates up to us��overnight. Align seems to be in the sweet spot as past investments (APAC, N.A. sales reps) are starting to pay off and new innovations (SmartTrack) are resonating with docs and helping to drive utilization higher. We are raising our 2014 and 2015 EPS estimates. Reiterate Buy and increase PT from $54 to $57.

    Cantor Fitzgerald’s Jeremy Feffer upgrades Aligns shares to Buy from Hold:

    After seemingly hitting bottom in 3Q:12, ALGN has taken concrete steps to revitalize its North American GP dentist segment, stabilize/improve pricing, and build a formidable O-U.S. sales and training operation, all of which are paying dividends. With better overall volume trends, the ClearCorrect ITC victory, and the Realine launch, we see plenty of runway for continued outperformance.

  • [By John Udovich]

    Yesterday, small cap dental stock BIOLASE Inc (NASDAQ: BIOL) surged 17.69% after announcing it had received a license from the Health Canada-Medical Device Bureau to sell its EPIC dental soft-tissue diode laser systems throughout Canada, meaning its worth taking a closer look at the stock along with the performance of mid cap dental stocks like Sirona Dental Systems, Inc (NASDAQ: SIRO), DENTSPLY International Inc (NASDAQ: XRAY) and Align Technology, Inc (NASDAQ: ALGN).

  • [By Sean Williams]

    What: Shares of Align Technology (NASDAQ: ALGN  ) , a medical device and software design company for the dental and orthodontics industry, jumped as much as 12% after reporting better-than-expected second-quarter results.

  • [By Sue Chang and Ben Eisen]

    Align Technology Inc. (ALGN) �shares jumped 26%. The maker of Invisalign braces said late Thursday that it had swung to a profit in the third quarter, and raised fourth-quarter earnings projections to a range of 41 to 43 cents a share. Thomson Reuters-surveyed analysts had expected 36 cents a share.

Top Logistics Stocks To Invest In 2015: Elbit Systems Ltd. (ESLT)

Elbit Systems Ltd. engages in the design, development, manufacture, and integration of defense systems and products worldwide. The company operates in the areas of aerospace, land and naval systems, command, control, communications, computers, intelligence, surveillance and reconnaissance, unmanned aircraft systems, advanced electro-optics, electro-optic space systems, electronic warfare (EW) suites, airborne warning systems, electronic intelligence systems, data links, artillery systems, military communications systems, and radios. Its activities include military aircraft and helicopter systems, helmet mounted systems, commercial aviation systems and aero structures, land vehicle systems, electro-optic and countermeasures systems, homeland security systems, EW and signal intelligence systems, and various commercial activities, as well as command, control, communications, computer, and intelligence and cyber systems. The company also provides a range of support services fo r its defense systems and products. Elbit Systems Ltd. markets its systems and products as a prime contractor or subcontractor to various governments and defense contractors. The company was founded in 1966 and is based in Haifa, Israel.

Advisors' Opinion:
  • [By Rich Smith]

    The Department of Defense awarded more than $562 million worth of contracts�on Wednesday. Publicly traded companies receiving contracts included:

    Eaton Corporation (NYSE: ETN  ) , which was awarded a maximum $12 million firm-fixed-price, sole-source contract to supply various oil nozzles and parts to the U.S. Army, Navy, Air Force, and Marine Corps with a May 22, 2015, performance completion date.
    � Elbit Systems (NASDAQ: ESLT  ) subsidiary M7 Aerospace, awarded a $15.2 million option extension on a previously awarded firm-fixed-price contract for logistics support for 12 Navy/Marines UC-35 and seven Navy C-26 transport aircraft through May 2014.
    � Northrop Grumman (NYSE: NOC  ) , winner of a $15.3 million modification to a previously awarded cost-plus-award-fee contract funding continued systems development and demonstrations of the MQ-4C Triton Unmanned Aircraft System. This is the same�drone that the Royal Australian Air Force recently expressed interest in acquiring.

    Curiously, the DOD clarified that the actual purpose of the latter contract is not so much to perform work on the new drone per se but rather to pay for an upgrade of software being used in the project -- from Microsoft's (NASDAQ: MSFT  ) Windows XP operating system to Windows 7.

  • [By Louis Navellier]

    DL has seen solid sales and profit growth and was upgraded to an ����by Portfolio Grader back in April of last year. DL stock remains a ��trong buy��today.

    Great International Stocks: Elbit Systems (ESLT)

    Elbit Systems (ESLT) is an Israeli company that sells its products and services to the defense and aerospace industries.

Top Logistics Stocks To Invest In 2015: Canadian Solar Inc.(CSIQ)

Canadian Solar Inc. engages in the design, development, manufacture, and sale of solar power products in Canada and internationally. The company offers solar cell and solar module products that convert sunlight into electricity for various uses. Its products include a range of standard solar modules for use in a range of residential, commercial, and industrial solar power generation systems. The company also designs and produces specialty solar modules and products consisting of customized modules that its customers incorporate into their products, such as solar-powered bus stop lighting; and specialty products, such as portable solar home systems and solar-powered car battery chargers. In addition, it sells solar system kits, a package consisting of solar modules produced by it and third party supplied components, such as inverters, racking system, and other accessories, as well as implements solar power development projects. The company sells its products under the Canad ian Solar brand name. Canadian Solar Inc. offers its standard solar modules through a direct sales force and sales agents primarily to distributors, system integrators, and original equipment manufacturer customers, as well as to solar projects; and specialty solar modules and products to the automotive, telecommunications, and light-emitting diode lighting sectors. The company was founded in 2001 and is based in Kitchener, Canada.

Advisors' Opinion:
  • [By Travis Hoium]

    What: Solar stocks are shooting higher again today as the strong run in 2013 continues. LDK Solar (NYSE: LDK  ) , Canadian Solar (NASDAQ: CSIQ  ) , Yingli Green Energy (NYSE: YGE  ) , Hanwha SolarOne (NASDAQ: HSOL  ) , and JinkoSolar (NYSE: JKS  ) led the way, gaining between 10% and 22% today.

  • [By Paul Ausick]

    As prices for solar panels and modules stabilize, stocks in the solar energy companies have once more put on a growth spurt. Since the beginning of the year shares of SunPower Corp. (NASDAQ: SPWR) are up more than 300% and shares of China�� Canadian Solar Co. Ltd. (NASDAQ: CSIQ) are up nearly as much. Industry consolidation is not a far-fetched notion any longer.

Top Logistics Stocks To Invest In 2015: (COLPAL.NS)

Colgate-Palmolive (India) Limited engages in the manufacture and sale of oral care and personal care products in India and internationally. The company?s oral care products include toothpastes, toothbrushes, toothpowder, mouthwashes, and whitening products. Its personal care products consist of body wash, liquid hand wash, shave preps, skin care, and hair care products. The company also offers household care products, which include a dish washing paste. In addition, it provides pet nutrition products. Further, the company provides various dental care products for gingivitis treatment, sensitivity treatment, tooth whitening, fluoride therapy, mouth ulcer treatment, and specialty cleaning. Colgate-Palmolive (India) Limited sells its products primarily under the Colgate, Palmolive, Mennen, Ajax, Axion, Softsoap, and Hill?s Pet Nutrition brand names. The company was founded in 1937 and is based in Mumbai, India. Colgate-Palmolive (India) Limited is a subsidiary of Colgate-Palm olive Company, U.S.A.

Top Logistics Stocks To Invest In 2015: Discovery Laboratories Inc.(DSCO)

Discovery Laboratories, Inc., a biotechnology company, focuses on developing products for the treatment of respiratory disease. The company?s product pipeline includes Surfaxin, a synthetic, peptide-containing surfactant that has completed Phase-III pivotal trial for the prevention of respiratory distress syndrome (RDS) in premature infants; Surfaxin LS, a lyophilized dosage form of Surfaxin in Phase-III clinical trials, which enhances ease of use for healthcare practitioners; and AEROSURF, a drug-device combination product that has completed first pilot Phase II clinical study of aerosolized KL4 surfactant for the prevention of RDS in premature infants. It has license agreements with Philip Morris USA Inc.; Philip Morris Products S.A.; Johnson & Johnson; and Ortho Pharmaceutical Corporation for its capillary aerosolization and KL4 surfactant technologies. The company also has a strategic alliance with Laboratorios del Dr. Esteve, S.A. for the development, marketing, and sale of a portfolio of potential KL4 surfactant products in Andorra, Greece, Italy, Portugal, and Spain. Discovery Laboratories, Inc. was founded in 1992 and is headquartered in Warrington, Pennsylvania.

Advisors' Opinion:
  • [By Eric Volkman]

    Discovery Laboratories (NASDAQ: DSCO  ) is turning its focus to raising capital. The company will float 9.5 million shares of its common stock in an underwritten public offering. The price is $1.50 per share. Additionally, its underwriter has been granted a 30-day purchase option for up to an additional 1.425 million shares to cover overallotments, if any.

Top Logistics Stocks To Invest In 2015: Debao Property Development Ltd (K2M.SI)

Debao Property Development Ltd., an investment holding company, engages in the property investment, development, and management in the People�s Republic of China. It develops residential and commercial properties; and leases properties. The company builds structural projects and provides interior works for third parties; provides public utility engineering services; and engages in sale and distribution of construction materials. Debao Property Development Ltd. was founded in 2000 and is based in Foshan City, the People�s Republic of China.

Top Logistics Stocks To Invest In 2015: KIT digital Inc.(KITD)

KIT digital, Inc. provides end-to-end video asset management software and related services. It offers KIT platform for managing Internet protocol (IP)-based video assets across the browser, mobile device, and IPTV set-top box enabled television sets. The KIT platform?s solutions include KIT Media for content creators and media distributors to leverage IP video platforms and devices to reach new audiences; and KIT Enterprise for companies, non-profit organizations, and government agencies to harness the power of video to improve their external or internal communications. Its solutions also comprise KIT Operator to telecommunications companies, cable networks, Internet service providers, and connected device manufacturers as a multi-screen video asset management system allowing for organization of inbound content from outside providers, integration with internal customer identity and billing systems, programming and content packaging, and end-user experiences to their subsc ribers. In addition, the company provides professional services, such as systems integration for the capture, transcoding, storage, editing and play-out of video in film, television, and other broadcasting environments; content services; and digital marketing services. Further, it offers solutions that enable to create and manage video-based Web experiences; and professional IP-based, multi-screen video asset management solutions for managing, broadcasting, and monetizing videos on IP connected devices; and develops multi-channel solutions for the acquisition, management, and re-purposing of on-line digital IP-based content and video. KIT digital sells its products directly; and through resellers and affiliate partners in Europe, the Middle East, Africa, the Americas, and the Asia Pacific. The company was formerly known as ROO Group, Inc. and changed its name to KIT digital, Inc. in May 2008. KIT digital, Inc. was founded in 1998 and is headquartered in Prague, the Czech Rep ublic.

Top Logistics Stocks To Invest In 2015: Go-ahead Group(GOG.L)

Go-Ahead Group Plc and its subsidiaries provide passenger transport services operating primarily in the bus and rail sectors in the United Kingdom. It operates a fleet of approximately 3,900 buses carrying on average approximately 1.7 million passengers every day. The company provides regulated services for Transport for London; and deregulated services in Oxford, East Anglia, the south east, southern, and north east England, as well as operates yellow school bus in North America. It also offers passenger rail services through its Southern, Southeastern, and London Midland franchises. The company was founded in 1987 and is headquartered in London, the United Kingdom.

Thursday, January 23, 2014

Splunk Adds To List Of 2014's Tech Stock Offerings

Splunk Inc.(SPLK), one of 2012's hottest initial public offerings, has another stock sale on deck.

The deal by the data-analysis software maker follows well-received offerings by software makers Workday Inc.(WDAY) and Cvent Inc.(CVT) last week, suggesting investor interest in cloud computing and "big data" analysis remain high. Those deals bucked the broader market's sluggish tone, with indexes little changed out of the gate this year and many strategists predicting muted returns after 2013's rally.

Splunk's six-million share offering is slated to price Wednesday evening, according to people familiar with the deal. The San Francisco company, whose software helps companies collect and analyze large quantities of data, is raising cash for general corporate purposes, it said in a statement this week.

Splunk's shares have gained about 19% so far in 2014, versus a 0.3% decline in the S&P 500.

The shares have more than quadrupled since the company went public at $17 a share in April 2012. The stock jumped 109% on its first trading day, making Splunk the only U.S.-listed company that year to double in its trading debut.

A pair of tech companies that also had highly sought after IPOs saw strong demand in equity capital-raising efforts last week.

Workday,  a provider of human-resources software  through the so-called "cloud," agreed to sell $614 million worth of stock early last week. While most stock offerings price at a discount to shares' recent price to lure buyers, the Workday offering priced slightly above the stock's last close before the deal was announced.

Hot Financial Companies To Watch In Right Now

Meanwhile, Cvent Inc., a provider of cloud-based event-planning software, sold $187 million in shares at a slim file-to-offer discount. It increased the number of shares on offer by 10% as the deal priced.

Wednesday, January 22, 2014

Windows 8 Relaunch as 8.1 Is Set: How It Could Even Revive Interest in PCs

August is often a slow time for technology and consumer spending, but the dying PC market may be about to see a resurrection. Microsoft Corp. (NASDAQ: MSFT) has fixed many of the bad things about Windows 8. We will not go so far as to say that this will resurrect Microsoft Surface tablet sales, but it could make those who want a new PC more interested than they were when they realized that Windows 8 was such a learning experience that they might as well go to Apple Inc. (NASDAQ: AAPL).

Windows 8 was a flop, according to many analysts and investors. What was amazing was that Microsoft’s stock appreciation in 2013 was massive. Microsoft seemed in such envy of Apple that its look and feel went to much more visualization. The upgrade was so different from prior Windows releases that, why not just take the learning curve to an extreme and switch to a Mac?

So here is the crux of the matter on repairing a damaged brand and a damaged product. Microsoft said:

We've hit an important milestone for Windows and for Microsoft — just 10 months after delivering on a bold, generational change in computing with Windows 8, our team is proud to share that we have started releasing Windows 8.1 and Windows RT 8.1 to our hardware partners. In many ways, this marks a new day at Microsoft, reflecting a number of rapid release firsts.

As far as why we said that the death could face a resurrection, it is really a story for the holiday season. General availability of the Windows 8.1 upgrade is slated for October 18. This is the date that the upgrade will be broadly available for commercial customers, with or without volume licensing agreements, and for consumers. A mid-October release gives the company two full months to market the hell out of Windows 8 ahead of the holidays.

The real companies hanging in the balance here are Dell Inc. (NASDAQ: DELL) and Hewlett-Packard Co. (NYSE: HPQ). Both companies are in a turnaround, even though Dell is in the midst of a management and private equity-led buyout. If you looked at the most recent earnings results from both Dell and HP, the commonality was declining core operations with lower PC sales. Even increasing IT offerings is not enough to fix the weakness that has been seen in PCs, and prior declining PC sales reports even went so far as to blame Windows 8 for the poor unit sales.

While Apple’s Mac is a serious competitor to PC sales, the real threat is the move to iPhones and iPads from Apple, and the smartphones and new and upcoming tablets running on the Android system of Google Inc. (NASDAQ: GOOG). Unfortunately for Google shareholders, that did not exactly translate to additional stock gains after its earnings report in July. Google shares are down almost 8% from the pre-earnings highs.

What is good is that the Windows 8 relaunch as Windows 8.1 is now formally set and confirmed. The wild card is that Microsoft also is looking for a new CEO because the Steve Ballmer exit is coming sooner than many expected. We have even taken a stab at who might replace Steve Ballmer and it is possible that Warren Buffett could even be involved in the business and hiring decision.

Sunday, January 19, 2014

What Kind of Investor Are You?

Motley Fool analyst Jason Moser chats with Rick Engdahl in a side-of-desk interview about developing a personal investment philosophy and shares his own four-point system for deciding whether a particular stock is right for his portfolio.

In this video segment, Jason recommends keeping a journal, or notes of some kind, as a way of learning about your own habits and preferences as an investor. Looking back at what you've done in the past can help you understand your priorities and set guidelines for future decisions.

A full transcript follows the video.

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.

Jason Moser: Thankfully for me, this has been something I've worked on for a while, so I have it pretty well committed to memory.

The reason why I know it so well is because I was able to put it down in writing, so that's one thing I would encourage any investor to do, is to have a basic philosophy written down -- something that you can refer back to.

Even if it's just a journal of events or whatever, having a written record of what you do as an investor gives you a chance to look back on what you were thinking at a particular time, why you invested in this certain company.

Did you invest in a company that maybe met all of your qualifiers except for one? Why did you let them pass on that one? It can help you grow and change as an investor.

That's one of the beautiful parts about investing; it's this lifelong endeavor, a chance to just learn something new every day and really develop as you grow. I think keeping documentation of it is the most sensible thing to do.

It's not to say that this philosophy that I have won't change over time. I hope it does. I want to make it better. I want to make it smarter, and I want to make it more relevant.

Depending on what stage of life you're in, that's going to dictate how you view the world and how you invest, right? For someone who's younger, maybe they're looking to grow their wealth. Someone who's older maybe is looking to protect their wealth, so they have to consider different things.

For me, I'm still young enough to be in the "grow your wealth" stage, so that's where I look at these four factors.

There is no real priority. It's not that one begets another. They're just the four things that really matter to me the most. There is sort of a qualitative factor that has to go into it. The management team, for example -- some people just may not necessarily approve of a management's compensation structure, whereas I might give it a pass. Or somebody may be interested in a given market or a company where I'm not terribly interested.

Some people just have lines that they don't want to cross. People don't want to invest in tobacco companies, for example, and that's perfectly understandable. I don't, either. Those are the kinds of lines that you can help discover through time, and through using a philosophy like this.

Rick Engdahl: You're not suggesting that somebody follow your lines. You're asking everybody to come up with your own.

Jason: Right. That's just it. It's not to say that I came up with this magic formula that's all mine. This was something that was pieced together from all of these investors that I know in my life -- investors that I've read, investors that I work with. This is what really went into this philosophy that I had. That's how I built this.

It's not mine, really. I think this is just the product of the good fortune I've had in my life, to be around a lot of smart people. I think I owe virtually everybody that I work with and that I've read a little bit of thanks for this philosophy, and hopefully over time I'll continue to be able to develop it -- maybe even add a fifth or a sixth step along the way.

Friday, January 17, 2014

Money Managers Go Big on Inflation

Top 5 Safest Stocks For 2014

Print FriendlyYou should always remain aware of what large investment houses and asset managers are thinking, because they tend to set new trends given the sheer size of their trades.

The major institutional investors are now buying investments in anticipation of inflation, which means that independent investors who act too late may get crowded out of buying inflation-proof securities at reasonable values. And as noted in previous columns, we also believe that higher inflation is on the horizon.

Moreover, while each individual investment should always be evaluated using an objective method—such as price-to-earnings, discount cash flow or return on equity—it’s also shrewd to follow the trends that are shaping the investment universe.

As far back as 1936, famed Economist John Maynard Keynes compared the stock market to a beauty contest. He described a newspaper contest in which 100 photographs of faces were displayed. The winner would be the reader whose list of six came closest to the most popular of the combined lists of all readers. The best strategy, Keynes noted, isn’t to pick the faces that are your personal favorites; it’s to select those that you think others will think prettiest.

We know from various 2014 outlook reports from some of the biggest money managers that inflation will be the prettiest of all in the upcoming beauty contests, generating high demand for investments that can protect against inflation. That’s why you shouldn’t tarry in obtaining low-priced inflation protection.

In a recent research note, fund managers at PIMCO projected that the core consumer price index (CPI) would increase to 2.1 percent by the end of 2014 (see Chart A). The asset firm expects oil prices to hover in the $105–$110 per barrel range and food pric! es to remain stable, which puts its headline CPI forecast at around 2 percent year-over-year in 2014.

Chart A: PIMCO Predicts Core CPI or Inflation to Rise in 2014

Although PIMCO’s fund managers believe inflation will increase year over year, they nonetheless expect personal consumption expenditures (PCE) to remain below the Fed’s 2 percent target, at around 1.5 percent. The Fed has renewed its focus on raising the inflation rate toward its 2 percent target for the PCE price index, which differs somewhat in composition and scope from the more widely recognized CPI.

“We expect consumers will find that the pace of rental inflation is increasing. Food and gasoline prices will be relatively stable. Medical and education costs continue to grow, albeit at a slower pace than in recent years. Automotive prices are likely to be relatively stable, as will the price of imported consumer goods. And airfares are likely to be relatively steady after increasing strongly over the past year,” the PIMCO fund managers predict.

What this all means is that PIMCO is advising its clients to jump into Treasury Inflation-Protected Securities (TIPS), which they believe is an attractive investment right now because the market is implying a CPI Inflation of only 1.4 percent over the next year, while as previously mentioned PIMCO believes inflation will hit 2 percent.

You don’t necessarily need to look at fund manager reports to conclude that inflation may be just around the corner. Various media reports and changes in the TIPS markets are confirming US inflation expectations have jumped to their highest since May, with central banks and investors seeking insurance against the prospect that a recovering American economy will stoke price pressures.

Inflation expectations, as measured by the difference between yields on 10-year nominal Treasury notes and TIPS, have risen to 2.28 p! ercent fr! om a low of around 2.10 percent a month ago, as of the market close on Jan. 8. TIPS help insulate holders from the threat of rising prices, because their value increases when the seasonally adjusted CPI rises. In contrast, holders of fixed-rate bonds suffer as inflation erodes their value.

PIMCO is not the only player to have spotted this trend. According to a recent Financial Times report, “as the new year began, modest exchange traded fund outflows are being outweighed by demand from foreign central banks and other long-term investors focused on seeking inflation protection as it is seen as being a buying opportunity in the wake of the asset classes’ underperformance in 2013.”

Furthermore, TIPS aren’t the only investment that is being targeted for inflation protection.

Commodities, Emerging Markets and Currencies

In recent research notes, PIMCO is now making declarative statements about the future rise of commodities, overseas currencies and emerging markets. For example:

On Commodities: “Given the global supply/demand imbalances that we see, we expect commodity prices to be generally rising going forward, noting, of course, that commodity prices are volatile and that there will be differentiation among commodities.”

On Emerging Markets: “Emerging economies face their own inflationary pressures. They may find that they cannot continue to couple their currencies to the US dollar and to combat inflation they need to let their currencies appreciate.”

On Currencies: “Currencies may become another strong driver of inflation, especially among developed economies. We anticipate policymakers in the developed world will attempt to make their economies more competitive via a cheaper currency, which likely will, for net importers like the US, lead to higher inflation.”

To combat inflation, PIMCO advocates commodities that have two characteristics: 1) They’re geared to global growth, and 2) th! ere are s! upply constraints.

The two commodities that they feel fit this criteria are crude oil and copper. “Both of them are strongly connected to global growth and emerging market growth in particular. And both have significant supply constraints such that, if demand growth continues at the same pace for the next couple of years as it has been, we could see significant supply shortfalls,” the PIMCO managers argue.

But other fund managers are focusing on the one metal that has been historically a safe haven to preserve wealth during inflationary periods—and that’s gold.

On Jan. 16, gold advanced for the first time in three days after a government report showed the cost of living in the US increased by the most in six months, boosting the appeal of the precious metal as a hedge against inflation.

In terms of emerging market holdings, investors are diversifying their portfolios in droves to emphasize safety or fixed income rather than growth. Emerging market fund investors poured money into bond portfolios and cash while selling equities in the first full week of 2014, in contrast to the apparent start of the “great rotation” at the beginning of last year.

In fact, since the start of the year, emerging-market sovereigns have sold almost $19 billion of bonds, three times what was sold at this stage last year and the fastest start to the year since Dealogic started compiling records in 2000.

With respect to bond funds, bond data provider EPFR Global found European bond funds benefited from their largest inflows since late April 2013, and emerging markets local currency bond funds broke a 14-week outflow streak to capture new money (see Chart B).

Chart B: Emerging Markets Bonds will Continue to Outperform

In sum, if there ever was a time to prepare for inflation, and access such protection at reasonable prices, the time is now, before the g! lobe̵! 7;s behemoth investment institutions crowd out mom-and-pop investors.

Thursday, January 16, 2014

Top 5 Growth Stocks To Own Right Now

The Affordable Care Act, commonly known as Obamacare, has been off to a shaky start, to say the least. Unresponsive websites, a government shutdown, bickering politicians, and finger-pointing have tarnished the president's signature legislation. Problems aside, the new public exchange is an opportunity for long-term growth: The ACA adds 30 million Americans to insurance rolls. Healthcare stocks have great potential to grow over the next two to five years as consumers use the exchanges -- that is, when the website gets fixed.

While the techies tinker with, health insurance stocks have surged. The five major health insurance companies --�WellPoint, UnitedHealth Group, Aetna, Cigna and Humana�-- have increased more than 30% in 2013. The ACA has been good so far to these shares.�Other companies within health care are poised to profit even more as a result of the ACA roll-out. Let's talk about three potential big winners now that the ACA is a reality.

Lannett� (NYSEMKT: LCI  ) �has been very efficient developing and manufacturing generic pharmaceuticals. Lannett's�sales are up 13% this year. As millions are active in the health care exchanges, generic drugs will become even more popular. The Congressional Budget Office estimates that Americans save $8 billion to $10 billion a year using generic drugs.Lannett has shown to be effective in dealing with government regulators -- something that many companies (JPMorgan Chase) have trouble doing. It completed an important step by successfully submitting an Abbreviated New Drug Application of Thalidomide capsules.

Top 5 Growth Stocks To Own Right Now: Intuitive Surgical Inc.(ISRG)

Intuitive Surgical, Inc. designs, manufactures, and markets da Vinci surgical systems for various surgical procedures, including urologic, gynecologic, cardiothoracic, general, and head and neck surgeries. Its da Vinci surgical system consists of a surgeon?s console or consoles, a patient-side cart, a 3-D vision system, and proprietary ?wristed? instruments. The company?s da Vinci surgical system translates the surgeon?s natural hand movements on instrument controls at the console into corresponding micro-movements of instruments positioned inside the patient through small puncture incisions, or ports. It also manufactures a range of EndoWrist instruments, which incorporate wrist joints for natural dexterity for various surgical procedures. Its EndoWrist instruments consist of forceps, scissors, electrocautery, scalpels, and other surgical tools. In addition, it sells various vision and accessory products for use in conjunction with the da Vinci Surgical System as surgical procedures are performed. The company?s accessory products include sterile drapes used to ensure a sterile field during surgery; vision products, such as replacement 3-D stereo endoscopes, camera heads, light guides, and other items. It markets its products through sales representatives in the United States, and through sales representatives and distributors in international markets. The company was founded in 1995 and is headquartered in Sunnyvale, California.

Advisors' Opinion:
  • [By Sue Chang and Ben Eisen]

    Intuitive Surgical Inc. (ISRG) �rallied 8.6% following a positive write-up on its da Vinci surgery system from analysts at Wedbush. ��utcomes and cost-effectiveness data are beginning to favor da Vinci surgery as surgeons and operating room personnel gain greater experience with the technology,��said analyst Tao Levy in his report. Levy believes adoption of robotic surgery will increase over time.

  • [By Ben Levisohn]

    Yesterday, I wrote up an analyst report about Intuitive Surgical (ISRG) touting the company’s da Vinci surgical system–a report that appeared to have helped pushed the stock up 4.7%.

    One of my readers left a comment that I’ll cite here in full:

    Davinci surgeons do not scrub up for the console, so the picture choice is curious. They watched presentations and then made investment pronouncements. Yikes. The presentations likely emphasize safety to try to counter all the recent publicity. This gave these casual analysts the impression that davinci is safe. lol.

    Well, wouldn’t you know it–Bloomberg ran a story this morning with the headline, “Robot Surgery Damaging Patients Rises With Marketing.” The nearly three-thousand word article describes in detail what my reader was hinting at: Robotic surgery hasn’t been all that safe. From the Bloomberg article:

    Porter Adventist Hospital in Denver announced last year that Warren Kortz, a general surgeon on the medical staff, was the first in the Rocky Mountain region to use a technique known as robotic surgery to remove gall bladders through one incision in the belly button…

    What the hospital and�Kortz�didn�� reveal was the risk. Even as Kortz promoted robotic surgery, 10 patients he treated suffered injuries or complications between 2008 and 2011, according to an April complaint by the Colorado Medical Board. Five had arteries punctured or torn. Objects were temporarily left inside two, and others had nerve damage. One died and another needed cardiopulmonary resuscitation. The complaint charges Kortz with 14 counts of unprofessional conduct, including sometimes not advising patients on alternatives to the robot.

    Robotic surgeries are on the rise, fueled by aggressive marketing by doctors, hospitals and�Intuitive Surgical Inc., which manufactures the $1.5 million robot. Advertising on hospital and doctor websites, YouTube vide

Top 5 Growth Stocks To Own Right Now: Nordstrom Inc.(JWN)

Nordstrom, Inc., a fashion specialty retailer, offers apparel, shoes, cosmetics, and accessories for women, men, and children in the United States. It offers a selection of brand name and private label merchandise. The company sells its products through various channels, including Nordstrom full-line stores, off-price Nordstrom Rack stores, Jeffrey? boutiques, treasure & bond, and Last Chance clearance stores; and its online store,, as well as through catalog. Nordstrom also provides a private label card, two Nordstrom VISA credit cards, and a debit card for Nordstrom purchases. The company?s credit and debit cards feature a shopping-based loyalty program. As of September 30, 2011, it operated 222 stores, including 117 full-line stores, 101 Nordstrom Racks, 2 Jeffrey boutiques, 1 treasure & bond store, and 1 clearance store in 30 states. The company was founded in 1901 and is based in Seattle, Washington.

Advisors' Opinion:
  • [By Laura Brodbeck]


    Earnings Expected From: Applied Materials, Inc. (NASDAQ: AMAT), CGI Group, Inc. (NYSE: GIB), Kohl�� Corporation (NYSE: KSS), Nordstrom, Inc, (NYSE: JWN), Wal-Mart Stores, Inc. (NYSE: WMT) Economic Releases Expected: French GDP, German GDP, Italian GDP, British retails sales, eurozone GDP, Greek unemployment rate


  • [By Ben Levisohn]

    Other department stores, such as Nordstrom (JWN) and Kohl’s (KSS) are also dedicating more space to active wear, the analysts say.

    As a result, Boss and McCormick upgraded Under Armour to Neutral from Underweight. They write:

10 Best Bank Stocks To Watch For 2014: TrueBlue Inc.(TBI)

TrueBlue, Inc. provides temporary blue-collar staffing services in the United States. It supplies on demand general labor to various industries under the Labor Ready brand; skilled labor to manufacturing and logistics industries under the Spartan Staffing brand; and trades people for commercial, industrial, and residential construction, and building and plant maintenance industries under the CLP Resources brand. The company also provides mechanics and technicians to the aviation maintenance, repair and overhaul, aerospace manufacturing, and assembly industries, as well as to other transportation industries under the Plane Techs brand; and temporary drivers to the transportation and distribution industries under the Centerline brand. It primarily serves small and medium-size businesses. The company was formerly known as Labor Ready, Inc. and changed its name to TrueBlue, Inc. in December 2007. TrueBlue, Inc. was founded in 1985 and is headquartered in Tacoma, Washington.

Advisors' Opinion:
  • [By Jonathan Yates]

    When looking at small cap stocks, it is useful to compare the company with others that have expanded in both share price and size. For those considering investing in the $100 billion staffing industry, the growth of TrueBlue (NYSE: TBI) shows what could be the potential path for Labor SMART (OTCBB: LTNC), as both operate in the $29 billion demand labor sector. Other firms have done well in the staffing industry include Paychex (NASDAQ: PAYX) and ManPower Group (NYSE: MAN).

  • [By Jonathan Yates]

    For those looking to invest in real estate stocks, highly recommended is the Dr. Housing Bubble blog. In a recent posting, the "Dr." pointed out that there was a "Lost Generation" when it came to household income. That has not happened for those investing in staffing industry stocks such as Paychex (NASDAQ: PAYX), Robert Half International (NYSE: RHI), TrueBlue, Inc. (NYSE: TBI), and Labor SMART (OTCBB: LTNC).

Top 5 Growth Stocks To Own Right Now: Sara Lee Corporation(SLE)

Sara Lee Corporation engages in the manufacture and marketing of a range of branded packaged meat, bakery, and beverage products worldwide. Its packaged meat products include hot dogs and corn dogs, breakfast sausages, sandwiches and bowls, smoked and dinner sausages, premium deli and luncheon meats, bacon, beef, turkey, and cooked ham. It also offers frozen baked products, which comprise frozen pies, cakes, cheesecakes, pastries, and other desserts. In addition, Sara Lee provides roast, ground, and liquid coffee; cappuccinos; lattes; and hot and iced teas, as well as refrigerated dough products. The company sells its products under Hillshire Farm, Ball Park, Jimmy Dean, Sara Lee, State Fair, Douwe Egberts, Senseo, Maison du Caf

Top 5 Growth Stocks To Own Right Now: Crocs Inc.(CROX)

Crocs, Inc. and its subsidiaries engage in the design, development, manufacture, marketing, and distribution of footwear, apparel, and accessories for men, women, and children. The company primarily offers casual and athletic shoes, and shoe charms. It also designs and sells a range of footwear and accessories that utilize its proprietary closed cell-resin, called Croslite. The company?s footwear products include boots, sandals, sneakers, mules, and flats. In addition, it provides footwear products for the hospital, restaurant, hotel, and hospitality markets, as well as general foot care and diabetic-needs markets. Further, the company offers leather and ethylene vinyl acetate based footwear, sandals, and printed apparels principally for the beach, adventure, and action sports markets; and accessories comprising snap-on charms. The company sells its products through the United States and international retailers and distributors, as well as directly to end-user consumers th rough its company-operated retail stores, outlets, kiosks, and Web stores primarily under the Crocs Work, Crocs Rx, Jibbitz, Ocean Minded, and YOU by Crocs brand names. As of December 31, 2010, it operated 164 retail kiosks located in malls and other high foot traffic areas; 138 retail stores; 76 outlet stores; and 46 Web stores. Crocs, Inc. operates in the Americas, Europe, and Asia. The company was formerly known as Western Brands, LLC and changed its name to Crocs, Inc. in January 2005. Crocs, Inc. was founded in 1999 and is headquartered in Niwot, Colorado.

Advisors' Opinion:
  • [By Alex Planes]

    Investors love stocks that consistently beat the Street without getting ahead of their fundamentals and risking a meltdown. The best stocks offer sustainable market-beating gains, with robust and improving financial metrics that support strong price growth. Does Crocs (NASDAQ: CROX  ) fit the bill? Let's look at what its recent results tell us about its potential for future gains.

  • [By James Brumley]

    The next Crocs (CROX) earnings announcement is coming after the market closes Wednesday, Oct. 30, and if this report is anything like most Crocs earnings updates … well, investors have a 50-50 shot at hearing good news.

  • [By Dividends4Life]

    Memberships and Peers: NKE is a member of the S&P 500 and a member of the Broad Dividend Achievers��Index. The company's peer group includes: Crocs Inc. (CROX) with a 0.0% yield, Deckers Outdoor Corporation (DECK) with a 0.0% yield and Wolverine World Wide Inc. (WWW) with a 0.4% yield.

Friday, January 10, 2014

Egypt Is In Turmoil: Should You Invest Now?

The recent unrest in Egypt has drawn the attention of the entire world. A backlash against Mohamed Morsi, the nation's first democratically elected president, spurred a coup by the Egyptian military early this month. With the transitional government working to form a cabinet and restore order, the country is a potential powder keg as the Muslim Brotherhood and other Islamists find themselves under threat of arrest.

As you'd expect during times of trouble, the stock market in Egypt plunged during early June as protests gradually grew in force and the conflict began to escalate. Yet courageous investors bought into the market during those declines, and since the military has taken power, the Egyptian stock market has recovered almost to its pre-conflict level. As the new government fleshes itself out, is now the right time to invest in Egypt?

Image source: Wikimedia Commons.

Finding your way in
The first thing to realize about investing in Egypt is that it's not terribly easy. The most popular way for U.S. investors to invest in Egypt is the Market Vectors Egypt ETF (NYSEMKT: EGPT  ) , which owns more than two dozen different stocks in the Middle Eastern country. The reason: Most of the stocks you'll find inside that ETF aren't available on major exchanges within the U.S., making it very difficult for investors to buy the stocks directly. The ETF is primarily concentrated in financial and telecom stocks, which make up almost 75% of its investments, with the remaining quarter of the fund's assets invested in the energy and basic-materials sectors.

Top 5 Warren Buffett Stocks For 2014

Still, most investors haven't seen the crisis as an opportunity to invest in Egypt, making it a potential contrarian opportunity. Most analysts have instead looked at the current Egyptian crisis as a potential problem for global trade. With the strategically placed Suez Canal and oil pipeline greatly facilitate trade between Europe and Asia, especially for energy products, unrest in Egypt could threaten shipping and lead to trade disruptions that in turn could create temporary price moves for important commodities.

Solving the economic problems
Most of the discussion of Egypt's problems have centered on political clashes. But underlying those conflicts is the basic fact that the nation's gross domestic product has been falling recently in inflation-adjusted terms, leading to massive unemployment that compares unfavorably even to the sky-high jobless rates we've seen in hard-hit areas of Europe. Moreover, outdated policies -- e.g., expensive fuel-price subsidies that keep the price of gasoline artificially low -- have sapped financial resources away from potentially more productive uses like skills-training and investment in higher-growth industries such as technology and manufacturing. Those impediments sent the value of the Egypt ETF's price down by half between its inception in early 2010 and the late 2011 unrest that led to the ouster of former President Hosni Mubarak and the eventual election of Morsi.

EGPT Total Return Price Chart

Egypt ETF Total Return Price data by YCharts.

Optimists now hope Egypt will be able to apply for assistance from the International Monetary Fund to help develop its economy. Unfortunately, without the extensive oil and gas reserves that so many of its neighbors benefit from, Egypt faces challenges that are unusual among its closest peers.

Hope for the future
For investors, though, the experience of investing in other countries following periods of civil strife and political upheaval should provide some solace. In Greece, demonstrations have continued under government austerity programs, but the stock market there is still up about 60% from about a year ago despite having given up ground lately. Spain, which also suffers from high unemployment, has climbed by about a third from year-ago levels.

There's no guarantee that Egypt will be able to match those gains, as a 50% rise in the Egyptian ETF during the first nine months of 2012 proved fleeting. But a lasting solution to the crisis there would make it clear in hindsight that now was the right time to invest in Egypt.

One way that investors have historically protected themselves against unrest is by investing in gold, but with its recent declines, is the yellow metal a smart buy right now? The Motley Fool's new free report, "The Best Way to Play Gold Right Now," dissects the recent volatility and provides a guide for gold investing. Click here to read the full report today!

Thursday, January 9, 2014

Rackspace Hosting, Inc. (NYSE:RAX): Faces An Uphill Battle Amid Rising Competition

Rackspace Hosting, Inc. (NYSE:RAX) is in a high-growth market but facing increasing competition while making some execution errors that threaten Rackspace's long-term competitive position. This could result in financial underperformance despite a valiant effort at repositioning.

Rackspace is a Texas-based cloud services provider. It is a co-founder of OpenStack, with NASA, and uses it extensively in its computer systems. The company offers Public, Dedicated and Private Cloud, and Hybrid Hosting.

The company has data centers in the US, UK, China, and Australia. Rackspace's competitors include Amazon, Microsoft, Google, Verizon, IBM, HP, and Century Link.

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Gartner expects the market for infrastructure-as-a-service cloud industry (Rackspace's Public Cloud, 27 percent of sales) to grow from $9 billion in 2013 to $31 billion in 2017, with compute services representing 83 percent of the spending in 2017. Gartner expects managed hosting (Rackspace's Dedicated Cloud, 73 percent of sales) market to grow 12.6 percent a year to $102 billion in 2017.

Rackspace is lagging behind the competition on certain fronts. UBS analyst Steven Milunovich said the growth in hosting has shifted to the public cloud, most successfully represented by Amazon Web Services (AWS). Management recognized that its platform had scale issues relative to AWS and lacked many features and functions. Consequently, Rackspace finds it needs to reposition.

[Related -Stocks Fall Amid Claims Data, Earnings; Tesla (TSLA) Surges]

Successful repositioning should be about differentiating against the market leader. To Rackspace's credit, it is not attempting to copy Amazon. Unable to compete in engineering resources, the company is making a bet on OpenStack and the support of the open source community to enhance functionality.

Rackspace now brands itself "the open cloud company," offering best-fit infrastructure, including public cloud, managed hosting, and private cloud. Furthermore, it is not attempting to compete on price but rather differentiate on superior service.

This positioning modification—continuing a high service level while underscoring an open cloud approach (suggesting a contrast to competitors' closed approach) is creative and probably the company's best chance at success.

However, Milunovich have doubts that it is enough. Public cloud is a major shift in the tectonic plates, attracting not only AWS but also Microsoft, Google, VMware, IBM, and other giants. Moreover, customers tend to prefer low-cost vendors unless the more expensive offering is substantially superior.

The Infrastructure-as-a-Service (IaaS) market is dominated by Amazon's AWS with Microsoft Azure and Google Compute Engine vying for second place. Gartner's Magic Quadrant rates Rackspace a Visionary but in the pack with CSC, Verizon, Savvis, and others.

Rackspace needs OpenStack to succeed to have a shot at a differentiated offering on limited R&D. OpenStack could be the next Linux. It is open source and gaining endorsements from mainstream enterprise vendors, including AT&T, Brocade, Citrix, Cisco, Red Hat, Juniper, Facebook, NetApp, EMC, Yahoo, Intel, Huawei, Seagate, VMware, Dell, HP, and IBM. However, OpenStack is neither an open standard nor interoperable and portable today.

Meanwhile, Rackspace runs its business using a strict EVA (economic value-added) discipline, which results in a cost plus pricing policy and ensures the company does not compete on price. The company sees the continual commoditization of infrastructure driving costs down, passing savings on to customers.

Milunovich is concerned that the company's strategy of pricing at a premium and differentiation through superior service may not hold up against the onslaught of competition from AWS, Microsoft, Google, and IBM SoftLayer. In the meantime, the server build out should continue and likely will keep return on capital at improving but still-lower levels.

The company has suffered a disappointing top line with growth slowing from 28 percent in 2012 to an expected 17 percent in 2013, a rate that is expected to continue for the next couple of years.

Rackspace needs to fix the go-to-market errors it made, and it needs OpenStack to succeed. It needs to overcome the scale advantages of AWS, Verizon, Microsoft, IBM, HP, and now Google. Further, it should transition from managed services to cloud services, but the company's attempt to differentiate through superior service and use of OpenStack may prove insufficient.

If Rackspace can improve automation, it might be able to grow revenue on less server growth, but more likely the staffing levels would increase gradually, and operational cost savings will be passed on to customers.

Milunovich expects revenue growth of 15-17 percent for the next few years despite increased competition given the growth of both public and private cloud. He believes the company can boost EBITDA margin from the weak 31-32 percent level of the last two quarters to near 35 percent with improving scale and some OpenStack adoption.

The cloud trend should keep prices from dropping too quickly, and EBITDA growth should rebound from an estimated 8 percent in 2013 to 19 percent and 24 percent in 2014 and 2015, respectively.

Rackspace looks expensive on earnings at 52 times its forward earnings and free cash flow at 72 times given Rackspace seeing flat revenue growth, increasing competition, and internal issues to fix.

The stock, which has dropped 51 percent in the last year, has been in a clear intermediate-term downtrend with the price well below the 200-day moving average and the average line having a negative slope

Rackspace has to show acceleration in revenue growth with improving margins. Otherwise, the stock could languish.