Hotels, Booze and Drugs Headline This Week's Earnings

NEW YORK (TheStreet) -- It seems that every week includes companies of interest reporting quarterly results. Today I provide my buy-and-trade parameters for eight stocks in six sectors; one in the basic materials sector, one in the business services sector, one in the construction sector, two in the consumer discretionary sector and one in the consumer staples sector.

The basic materials sector is 1.1% undervalued, but has an underweight rating with 68.9% of the 402 stocks in this sector rated sell or strong sell.

The business services sector is 22.4% overvalued with an equal-weight rating.

The construction sector is 17.6% overvalued with an underweight rating with 60.9% of the 161 stocks in this sector rated sell or strong sell. The consumer discretionary sector is 23.5% overvalued with an equal-weight rating. The consumer staples sector is 16.7% overvalued with an overweight rating with 50.9% of the 265 stocks in this sector rated buy. The risk / reward for the stock market is not favorable in the fourth quarter, and today's monthly and quarterly closes will result in new monthly pivots / risky levels and new quarterly risky levels. This week's value levels lag at 14,696 Dow Industrial Average, 1641.5 S&P 500, 3695 Nasdaq, 6318 Dow transports and 1034.93 Russell 2000. The Nasdaq ended last week above my semiannual pivot at 3759 with the semiannual risky levels at 16,490 Dow Industrials, 1743.5 S&P 500, 7104 Dow transports and 1089.42 Russell 2000. The all time highs are 15,709.59 Dow Industrials set on Sept. 18, 1729.86 S&P 500 on Sept. 19, 6754.81 Dow transports on Sept. 20 and 1082.00 Russell 2000 on Wednesday. The Nasdaq set a multi-year high at 3798.76 on Sept. 20. [Read: Why Investors Shouldn't Panic if the Government Shuts Down] My annual value levels remain at 12,696 Dow Industrials, 1348.3 S&P 500, 2806 Nasdaq, 5469 Dow Transports, and 809.54 Russell 2000. [Read: How to Avoid the Tax Mandate on Obamacare] All eight stocks previewed today are overvalued with two overvalued by 25% and 60.6%. Two stocks have buy ratings with five rated hold and one rated sell. All have gains over the last 12 months with three having gains of 52.8% to 78.8%. All are trading above their 200-day simple moving averages, which reflects the risk of reversion to the mean.

Reading the Table

OV/UN Valued: Stocks with a red number are undervalued by this percentage. Those with a black number are overvalued by that percentage according to ValuEngine.

VE Rating: A "1-engine" rating is a strong sell, a "2-engine" rating is a sell, a "3-engine" rating is a hold, a "4-engine" rating is a buy and a "5-engine" rating is a strong buy. Last 12-Month Return (%): Stocks with a red number declined by that percentage over the last 12 months. Stocks with a black number increased by that percentage. Forecast 1-Year Return: Stocks with a red number are projected to decline by that percentage over the next 12 months. Stocks with a black number in the table are projected to move higher by that percentage over the next 12 months. Value Level: Price at which to enter a GTC limit order to buy on weakness. The letters mean; W-weekly, M-monthly, Q-quarterly, S-semiannual and A-annual. Pivot: A level between a value level and risky level that should be a magnet during the time frame noted. Risky Level: Price at which to enter a GTC limit order to sell on strength. International Hotels (IHG) ($29.16) set a multi-year high at $31.41 on Aug. 6 then traded as low as $27.31 on Aug. 28. The stock is just above its 200-day SMA at $29.15 with its 50-day SMA at $29.60. My quarterly value level is $28.40 with a monthly pivot at $29.89 and semiannual risky level at $31.22. Marriott International (MAR) ($42.35) set a multi-year high at $44.45 on May 15 then traded as low as $38.17 on June 21. My annual value level is $37.03 with an annual risky level at $44.18. Note that my annual levels have collared the 2013 volatility at least year to date. [Read: China ETFs Quietly Becoming Go-To Performers] Monsanto (MON) ($105.61) set a multi-year high at $109.33 on May 15 then traded as low as $94.00 on Aug. 22. My quarterly value level is $101.14 with a monthly risky level at $107.31. Paychex (PAYX) ($40.35) set a multi-year high at $41.24 on Sept. 20. My semiannual value level is $37.88 with a monthly risky level at $41.74.

Constellation Brands (STZ) ($56.98) set a multi-year high at $59.92 on Sept. 19. My quarterly value level is $47.83 with a monthly risky level at $62.23.

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Tech Data (TECD) ($50.36) set a second half 2013 high at $54.07 on Aug. 14 then held its 200-day SMA at $48.80 on Tuesday. My quarterly value level is $45.69 with a monthly risky level at $52.96. [Read: Bulls Look for Rebound at Edwards Lifesciences]

Texas Industries (TXI) ($65.19) set a multi-year high at $73.30 on May 22 then traded as low as $57.83 on Aug. 19. My annual value level is $61.58 with a monthly risky level at $72.94.

Walgreen (WAG) ($54.51) set a multi-year high at $56.84 on Sept. 23. My semiannual value level is $46.02 with a monthly risky level at $55.53. At the time of publication the author held no positions in any of the stocks mentioned. Follow @Suttmeier This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

Richard Suttmeier is the chief market strategist at AlphaPlus Analytics in addition to ValuEngine.com. He has been a professional in the U.S. Capital Markets since 1972, transferring his engineering skills to the trading and investment world. Suttmeier has an engineering degree from Georgia Tech and a Master of Science degree from Brooklyn Poly. He began his career in the financial services industry in 1972 trading U.S. Treasury securities in the primary dealer community. He became the first long bond trader for Bache in 1978, and formed the Government Bond Department at LF Rothschild in 1981, helping establish that firm as a primary dealer in 1986. This experience gives him the insights to be an expert on monetary policy, which he features in his newsletters, and market commentary. Suttmeier's industry licenses include, Series 7 and Registered Principal (Series 24). He has been the Chief Market Strategist for ValuEngine.com since 2008 and often appears on financial TV. Click here for details on Suttmeier's "Buy and Trade" investment strategy. Richard Suttmeier can be reached at RSuttmeier@Gmail.com

5 Stocks Ready for Breakouts

DELAFIELD, Wis. (Stockpickr) -- Trading stocks that trigger major breakouts can lead to massive profits. Once a stock trends to a new high, or takes out a prior overhead resistance point, then it's free to find new buyers and momentum players that can ultimately push the stock significantly higher.

One example of a successful breakout trade I flagged recently was airline player Gol Linhas Aereas Inteligentes (GOL), which I featured in Aug. 30's "5 Stocks Ready to Break Out" at $3.77 a share. I mentioned in that piece that shares of GOL were uptrending strong for the last few months, with shares moving higher from $2.74 to $3.83 a share. Shares of GOL had recently formed a double bottom chart pattern right above its 50-day moving average at $3.57 to $3.55 a share. That move was quickly pushing shares of GOL within range of triggering a near-term breakout trade above some key overhead resistance levels at $3.83 to $4.14 a share.

Guess what happened? Shares of GOL didn't wait long to trigger that breakout since the stock cleared those overhead resistance levels the following week with strong upside volume. Shares of GOL have hit an intraday high today of $5 a share, which represents a gain of 30% from when I flagged this setup. I don't think this stock is done going higher since the current uptrend remains intact, and shares of GOL are starting to take out more resistance today at $4.93 a share. This stock could easily tag $5.50 to $6 in the coming weeks, if the uptrend continues.

Breakout candidates are something that I tweet about on a daily basis. I frequently tweet out high-probability setups, breakout plays and stocks that are acting technically bullish. These are the stocks that often go on to make monster moves to the upside. What's great about breakout trading is that you focus on trend, price and volume. You don't have to concern yourself with anything else. The charts do all the talking.

Trading breakouts is not a new game on Wall Street. This strategy has been mastered by legendary traders such as William O'Neal, Stan Weinstein and Nicolas Darvas. These pros know that once a stock starts to break out above past resistance levels, and hold above those breakout prices, then it can easily trend significantly higher.

With that in mind, here's a look at five stocks that are setting up to break out and trade higher from current levels.

Sarepta Therapeutics

One name that's starting to trend within range of triggering a big breakout trade is Sarepta Therapeutics (SRPT), which discovers and develops RNA-based therapeutics for the treatment of rare and infectious diseases. Its lead product candidate is eteplirsen. This stock has been uptrending strong so far in 2013, with shares up 45%.

If you take a look at the chart for Sarepta Therapeutics, you'll notice that this stock has been uptrending strong over the last month, with shares moving higher from its low of $29.71 to its intraday high of $38.16 a share. During that uptrend, shares of SRPT have been consistently making higher lows and higher highs, which is bullish technical price action. Shares of SRPT have now started to spike back above its 50-day moving average of $37.50, and that move is quickly pushing SRPT within range of triggering a big breakout trade.

Traders should now look for long-biased trades in SRPT if it manages to break out above its 50-day at $37.50 a share and then once it clears some key near-term overhead resistance at $39.12 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average volume of 1.65 million shares. If that breakout hits soon, then SRPT will set up to re-test or possibly take out its next major overhead resistance levels at $46 to $47 a share.

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Traders can look to buy SRPT off any weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support levels at $35.31 to $35 a share. One can also buy SRPT off strength once it takes out those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

Aeropostale

Another stock that looks poised to trigger a major breakout trade is Aeropostale (ARO), which operates as a mall-based retailer of casual apparel and accessories for young women and men in the U.S. This stock has been destroyed by the sellers so far in 2013, with shares off by 31%.

If you take a look at the chart for Aeropostale, you'll notice that this stock has been downtrending badly for the last month and change, with shares plunging from its high of $15.73 to its recent 52-week low of $7.78 a share. During that downtrend, shares of ARO have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of ARO have now started to rebound sharply off that $7.78 low and are quickly moving within range of triggering a major breakout trade.

Traders should now look for long-biased trades in ARO if it manages to break out above its gap down day high of $9.55 a share with high volume. Look for a sustained move or close above that level with volume that hits near or above its three-month average action 3.12 million shares. If that breakout hits soon, then ARO will set up to re-fill some of its previous gap down zone from August that started near $11.50 a share. If that gap gets filled with volume, then ARO could even hit $12 to $13 a share.

Traders can look to buy ARO off any weakness to anticipate that breakout and simply use a stop that sits right below its 52-week low of $7.78 a share. One could also buy ARO off strength once it takes out $9.55 a share with volume and then simply use a stop that sits a comfortable percentage from your entry point.

GTx

One biopharmaceutical player that's rapidly moving within range of triggering a major breakout trade is GTx (GTXI), which is dedicated to the discovery, development and commercialization of small molecules that selectively target hormone pathways to treat cancer, osteoporosis and bone loss, muscle loss and other serious medical condition. This stock has been hammered by the bears so far in 2013, with shares off sharply by 53%.

If you look at the chart for GTx, you'll notice that this stock recently gapped down sharply from over $4 to below $1.50 a share with heavy downside volume. Following that gap down, shares of GTXI have rebounded sharply and started to uptrend, with the stock moving higher from its low of $1.31 to its recent high of $1.96 a share. During that move, shares of GTXI have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of GTXI within range of triggering a major breakout trade.

Traders should now look for long-biased trades in GTXI if it manages to break out above some near-term overhead resistance at $1.96 a share with high volume. Look for a sustained move or close above that level with volume that hits near or above its three-month average action of 1.35 million shares. If that breakout triggers soon, then GTXI will set up to re-fill some of its previous gap down zone from August that started just above $4 a share. Some possible upside targets if GTXI gets into that gap with volume are $2.50 to $3 a share, or possibly even $3.50 a share.

Traders can look to buy GTXI off any weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support at $1.50 a share. One can also buy GTXI off strength once it takes out $1.96 a share with volume and then simply use a stop that sits a comfortable percentage from your entry point.

Nam Tai Electronics

Another stock that's starting to move within range of triggering a big breakout trade is Nam Tai Electronics (NTE), which is an electronics manufacturing and design services provider to a select group of the world's leading OEMs of telecommunications and consumer electronic products. This stock has been destroyed by the sellers so far in 2013, with shares off sharply by 41%.

If you look at the chart for Nam Tai Electronics, you'll notice that this stock has been uptrending for the last month and change, with shares moving higher from its low of $6.05 to its recent high of $8.38 a share. During that uptrend, shares of NTE have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of NTE within range of triggering a big breakout trade.

Traders should now look for long-biased trades in NTE if it manages to break out above some key near-term overhead resistance levels at $8.38 to $8.79 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average action of 647,483 shares. If that breakout triggers soon, then NTE will set up to re-fill some of its previous gap down zone from April that started near $11.50 a share. If this stock gets into that gap with volume, then the upside is tremendous and we could easily see NTE hit $11 to $12 a share.

Traders can look to buy NTE off any weakness to anticipate that breakout and simply use a stop that sits right below its 50-day at $7.42 a share, or below more key support at $7.22 a share. One can also buy NTE off strength once it takes out that breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

Potash

My final breakout trading prospect is Potash (POT), an integrated fertilizer and related industrial and feed products company that owns and operates five potash mines in Saskatchewan and one in New Brunswick. This stock has been hit hard by the bears so far in 2013, with shares off sharply by 19%.

If you look at the chart for Potash, you'll notice that this stock gapped down sharply back in July from $38 to $29 with heavy downside volume. Following that gap down, shares of POT have formed a bottoming chart pattern as the stock has started to uptrend, with shares moving higher from its low of $28.55 to its recent high of $33.38 a share. Shares of POT have been flirting with its 50-day moving average today at $33.11 a share, and it's quickly moving within range of triggering a near-term breakout trade.

Traders should now look for long-biased trades in POT if it manages to break out above some near-term overhead resistance levels at Friday's high of $33.30 to some key overhead resistance at $33.38 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average action of 12.87 million shares. If that breakout triggers soon, then POT will set up to re-fill some of its previous gap down zone from July that started near $38 a share.

Traders can look to buy POT off any weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support levels at $31.39 a share to $30 a share. One could also buy POT off strength once it clears those breakout levels with volume and then simply use a stop that sits a conformable percentage from your entry point.

To see more breakout candidates, check out the Breakout Stocks of the Week portfolio on Stockpickr.

-- Written by Roberto Pedone in Delafield, Wis.

A Seemingly Unlikely High-Yield Play

As the third-largest school bus transportation provider in North America, Student Transportation Inc (TSX: STB, NSDQ: STB) has an intriguing story and an enticing 8.5 percent yield that has attracted substantial support from income-hungry retail investors. Nevertheless, it’s worth scrutinizing how such a small company–its CAD582.5 million market capitalization puts it toward the lower-end of the small-cap range–can support such a sizable payout.

To be sure, Student Transportation has been the very model of dividend consistency, paying a monthly dividend for 104 consecutive months, since February 2005. And the company is pursuing a consolidation strategy in a highly fragmented industry, with a tailwind from an era of tighter government budgets, where cash-strapped school districts are anxious to save money by outsourcing their transportation services.

As part of its roll-up strategy, Student Transportation has steadily acquired local school bus operators–mostly in the US, where the Canadian firm derives the vast majority of its revenue–in an extended acquisition spree over the past several years, though the pace of its M&A has slowed more recently. According to data provided by both the company and Bloomberg, Student Transportation has closed 31 acquisitions since 2004, including 23 since 2008 and eight in calendar-year 2011 alone. Included in this tally is the latest set of acquisitions, announced on Sept. 17, of two school bus companies, one in New Jersey and the other in Pennsylvania.

In financing these acquisitions, Student Transportation has shrewdly taken advantage of the historically low interest rate environment, which has allowed it to issue debt relatively cheaply, as well as make successful secondary equity issuances to yield-starved investors. As of June 30, which marked the end of Student Transportation’s fiscal year, the company reported USD220.2 million in long-term debt on its balance sheet.

Long-term borrowings have nearly doubled over the past five fiscal years, with long-term debt jumping to 113.2 percent of shareholders’ equity at the end of June, compared to 65 percent back in 2008. However, the picture is somewhat less dramatic when viewed from the perspective of long-term debt as a percentage of total assets, which climbed to 42.9 percent from 33.2 percent in 2008. At the same time, goodwill, which is the premium paid beyond book value for the intangible assets of acquired companies, accounts for a substantial 27 percent of Student Transportation’s assets.

Meanwhile, Student Transportation’s weighted average of non-diluted shares outstanding has more than doubled, to 79.4 million shares from 32.2 million shares five years ago. The share count has grown via secondary issuances of 1.7 million shares in 2008, 12 million shares in 2009, and 12.25 million shares in 2012. Still, management noted that low-cost debt has enabled the company to avoid making additional secondary issuances, since the last one in March 2012.

The company’s dividend reinvestment program (DRIP) has also added incrementally to the share count, including 1.3 million shares in fiscal-year 2012 and 1.5 million shares in fiscal-year 2013. Like DRIPs at other Canadian-domiciled firms, retail investors must be Canadian residents in order to be eligible to participate. Dividends are reinvested without commissions at a 3 percent discount to the average share price of the five trading days preceding the payment date.

Student Transportation has attempted to offset some of this potential dilution via a buyback program, which in Canada is referred to as a normal course issuer bid. Nevertheless, share repurchases have been relatively minimal over the past two fiscal years, at just 96,300 shares and 401,076 shares, respectively.

Fortunately, net income per share has improved to CAD0.05 in fiscal 2013 from a loss of CAD0.22 in fiscal 2008 (the company reports its results in US dollars, but per-share data is listed in Canadian dollars). The most recent result also marks a recovery from the dip to CAD0.03 in profits per share in 2011-12, after the company posted CAD0.05 in profits per share in 2010. So from an earnings-per-share (EPS) standpoint, dilution appears to have been mostly kept in check, though it does show that the company’s roll-up strategy has yet to translate into sufficient growth in EPS to more than offset the rise in share count.

Furthermore, dividend coverage is definitely a concern, since the total annual payout of CAD0.56 per share is multiples of the firm’s EPS. But when adding back non-cash charges, such as depreciation and amortization, to net income, the payout ratio appears to be a more manageable 69.1 percent. The company’s fleet of 9,600 school buses results in a significant depreciation expense, which totaled USD41.9 million in fiscal 2013. In their earnings call, management cited a payout ratio of around 79 percent, though I wasn’t able to locate their methodology for arriving at that figure.

Once we finally enter a rising-rate environment, Student Transportation won’t be able to pursue acquisitions as aggressively, nor will it have the same level of support from income investors, as some will inevitably shift their attention toward fixed income. As such, management will have to reorient their focus toward organic growth. At that point, we will watch to see whether the company’s scale has truly enabled it to not only support its payout, but also achieve enduring growth in earnings per share.

More Americans rely on advisers when forming college savings plans

Tax Credits via Flickr Creative Commons

More American families are asking advisers for help saving for college, and nearly all of those families have accumulated much more toward their goal than the typical family, according to a Fidelity Investments survey released today.

About 89% of those who have an adviser already have started saving funds to cover the rising cost of tuition and other college expenses, compared with 69% of all families, according to the survey, which comprised 2,538 families with children 18 and under and annual income of at least $30,000. About 57% of families using an adviser are investing in a tax-advantaged college savings plan, like a 529 plan.

One-third of parents use advisers to help with college savings decisions, a jump from only 21% seven years ago when Fidelity began its annual College Savings Indicator study.

Those working with an adviser have accumulated 57% of their goal so far, compared with the average family, which has amassed 34% of their college savings goal, according to the survey, conducted by Research Data Technology Inc. in June.

Advisers also are helping clients talk to their kids about college costs.

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About 45% of families with an adviser use materials from their adviser in discussions with their children about saving for college, and 10% of advised families have their student meet with the professional themselves to discuss college finances.

“Paying for college is a stressful topic, and adding a third-party financial professional may help take some of the emotion out of these highly charged, yet important, conversations,” said Matt Golden, vice president of college savings for Fidelity Financial Advisor Solutions.

Advisers can help parents and students discuss some options for saving on costs, such as going to a cheaper public school over a private school or having the student attend a community college for two years and then moving to a more expensive institution for the final two years, he said.

“More advisers are realizing they can help mediate and guide the college planning conversations with children and play a significant role in the discussions, especially about the impact of having large student loans,” Mr. Golden said.

The college topics that parents in the survey said they are talking to their advisers about include: strategies for efficient college savings, tax benefits of 529 plans, strategies for efficient withdrawals of college funds, parent and children debt, and the financial aid process.

About a quarter of those who have advisers said they also have discussed the child's anticipated salary after graduating, researching schools and the major that the student plans to pursue, according to the stu! dy.

Starbucks Corporation (SBUX): Can Starbucks Achieve Mid-Single-Digit Comp View?

Starbucks Corporation (NASDAQ:SBUX) is set to achieve the high end of management's mid-single-digit comp outlook for the foreseeable future driven by an enhanced food offering.

The company, which reported global comparable store sales growth of 8 percent for its third quarter, sees further opportunity around beverage innovation and limited time offers (LTOs). Food is already gaining traction as it contributed 200 basis points to the third quarter's comps (before any real benefit from LaBoulange), driven by breakfast sandwiches, paninis, and lunch boxes.

Food is currently 19 percent of the sales mix in US stores and 19 percent globally. Ultimately, management feels that a goal of a 25 percent plus food mix in the US is not unreasonable.

Starbucks partnered with La Boulange (LB) and the LB food program is not only beneficial for sales but also could have material cost benefits in areas of food waste and supply chain.

"The current food attachment rate is ~one-third of transactions. LaBoulange is initially targeted to improve the current bakery offering, which accounts for ~50% of food sales in US stores," BMO Capital Markets analyst Phillip Juhan said in a note to clients.

LaBoulange is in more than 1,000 stores today, and that number should approach about 3,000 stores by year-end, which is ahead of the initial plan to reach 2,500 stores this year.

As the first wave of LB rolls out over the next 12 months, this line-up will replace the current bakery offering in Starbucks' US retail stores. Bakery represents about half of total food sales while food in total represents 19 percent of retail store sales. This suggests that the initial LB bakery roll-out will impact about 10 percent of the sales mix.

Starbucks is encouraged by the early LaBoulange results. Management is seeing a higher food attachment rate in stores with the LaBoulange offering. Moreover, the LaBoulange product line carries roughly a 10 percent higher average price than those items it is replacing.

"We think the line could add as much as 100–200 bp to comp-store sales over the next couple of years," Juhan noted.

Management also sees an additional margin opportunity, driven by lower food cost/waste, given more cost effective ordering, delivering and food prep methods related to the brand. The up-front investment in the stores has already occurred, so all US company-operated stores are prepared for the rollout.

Meanwhile, pre-loaded dollars on smart phones are up 100 percent year over year while loyalty card pre-loaded dollars are up about 30 percent year over year. The Starbucks card continues to account for one-third of all US in-store transactions.

"Starbucks is recalibrating expectations for a lower-paced sales trajectory. Management believes that over the next couple of years, Starbucks can slowly reaccelerate channel development (CPG) rev growth back to a low-double-digit pace from the ~6% growth rate reported in FY3Q," Juhan said.

Moreover, the company sees a challenging environment and a struggle for market share in packaged coffee and food service given little to no growth in the overall market excluding single-serve. The company's recent price decrease in packaged coffee is mitigating growth in other areas.

Single-serve and international CPG distribution remain the real growth opportunities within the channel development division.

Internationally, Europe is benefiting from improved distribution is leading to a lower cost structure, and the company continues to rationalize G&A and expects to continue to take costs out of the model in the coming quarters.

The recently improved top-line results have been driven by improved consumer engagement, a re-commitment to training employees regarding consistent beverage production, the loyalty program, and an improved food program in the UK.

"The operating margin goal for Europe remains mid- to upper teens with healthy steps over a period of years from the current 3%-4% rate," Juhan wrote.

!

In Asi! a Pacific, China remains a key country. Starbucks currently operates in about 70 cities within China with 70 percent of the stores in tier 1 and tier 2 cities. Expect future store growth to occur primarily in cities where Starbucks already has a presence. China/Asia Pacific comp growth was 9 percent for the third quarter as traffic growth sequentially doubled from the second quarter.

China should remain the fastest-growing geography for years to come. China's average unit volume (AUV) is approaching $900K. The afternoon day-part remains strong, and the morning coffee ritual is not cemented yet with the Chinese consumer.

"Expect a natural growth curve in China that should mature over time – think "10% comps with a band around that as a good comp projection," Juhan said.

Meanwhile, new products from Evolution Fresh (facilitated by the new DANONE agreement) coupled with additional health and wellness product iterations should drive comp.

Coffee costs could be a big tailwind for Starbucks. Coffee costs continue to decline with futures indicating about $1.15 a pound, down from the prior cycle high of over $3.00 in early 2011. While Starbucks has already contracted "well over" 80 percent of its coffee requirements for 2014, it could see continued meaningful commodity cost savings in 2015.

How to compete against a corporate giant - and win

Arch Angel's main competitor was Dr. Scholl's, which has been around for more than 100 years. But that didn't deter them.

NEW YORK (CNNMoney) What do you want first: The good news or the bad news?

On the plus side, you've signed with a national distributor and have your product on shelves in Wal-Mart (WMT, Fortune 500), RiteAid, CVS, Sears (SHLD, Fortune 500) and Walgreens (WAG, Fortune 500). Yay! Now, the bad news: A huge, well-known rival has been there for years. How do you compete?

That's the challenge Arch Angel Brands has faced as it's rolled out its products into national chains. Started by Steve Llorens and Paul Mazzanobile in 2008, Arch Angel makes orthotic supports called Strutz, designed to relieve the pain of fallen arches, flat feet, sports injuries and other foot problems. Their main competitor is (you guessed it) Dr. Scholl's, which has been around since 1906 and spends millions annually on marketing and advertising.

"We're the new kid on the block," said Llorens. "We use different technology, so our goal has to be educating shoppers on how we're different." Instead of an insole that slips into a shoe and comes off when the shoe does, Strutz uses arch support wraps that go around the foot and stay put when the wearer changes shoes or goes barefoot.

Llorens and Mazzanobile started by going door to door selling their product to podiatrists, orthopedists and sports trainers, who were accustomed to taping patients' feet for a similar effect. It was easy to sell them on Strutz because it doesn't come off in the shower and has a shock absorber built in.

To get the word out, Arch Angel Brands largely relies on word of mouth, with social media playing a big role. Among Strutz's biggest boosters are servers, bartenders and nurses who spend long hours on their feet. "Our website and Facebook page are full of endorsements from people who are already fans," Llorens noted. "Sometimes customers post pictures of themselves wearing Strutz while they're hiking or training for an Iron Man competition."

They also joined forces with Team Red White & Blue, a veterans' organization that sponsors athletic events and other activities for returning military personnel. Arch Angel is now a corporate sponsor, which "helps build a sense of community," said Llorens. "It gets your name out there in a very positive way."

Arch Angel has just four full-time employees -- including the founders. But that can be an advantage, said Ll! orens.

"When you call the 800 number on a Dr. Scholl's product, you don't get the CEO or the president of the company on the phone," he says. "But when you call us, you do." Llorens and Mazzanobile also read, and respond to every email and Facebook post.

"People are impressed with that," said Llorens. "It's a level of customer service you don't get from a big national brand.

"We're still small enough that that level of personal attention is manageable," he adds. "As we get bigger, we want to hire customer-service people and train them to maintain that."

The company may be staffing up soon: Llorens says sales have taken off this year, from $388,000 in 2012 to a projected $1.4 million by the end of 2013.

Hot Blue Chip Stocks To Own Right Now

The Dow Jones Industrial Average (DJINDICES: ^DJI  ) is a gold mine for long-term investors. It's particularly juicy if you're looking for high-quality income stocks, as these proven blue chips tend to deliver both high yields and reliable dividend growth. But there are stragglers in every herd, including this elite collection. Let me point out the three worst dividend stocks on the Dow today.

AA Dividend data by YCharts.

Bank of America (NYSE: BAC  ) is a horrible income stock right now, any way you slice it. No other Dow stock even comes close to its feeble 0.3% yield. Annual payouts have plunged 97% over the last decade, and regulators keep a heavy foot on B of A's throat to prevent the troubled bank from over-stretching its financial reserves. That financial crisis in 2008 wrought devastation on Bank of America's dividend appeal.

Hot Blue Chip Stocks To Own Right Now: Philip Morris International Inc(PM)

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

Advisors' Opinion:

• [By Shauna O'Brien]

  On Wednesday, Philip Morris International Inc. (PM) announced that its board has approved a 10.6% increase to its quarterly dividend.

  PM has increased its dividend from 85 cents to 94 cents per share, or $3.76 annually.

  The dividend will be paid on October 11 to shareholders of record on September 26. The stock will go ex-dividend on September 24.

  Philip Morris shares were mostly flat during pre-market trading Wednesday. The stock has been mostly flat YTD.

Hot Blue Chip Stocks To Own Right Now: Apple Inc.(AAPL)

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

Advisors' Opinion:

• [By Michael Flannelly]

  Following Apple Inc.’s (AAPL) iPhone event on Tuesday, where the Cupertino, California-based company unveiled its iPhone 5S, iPhone 5C, and other products, a number of analyst firms weighed in with mixed commentary on Wednesday.

  For the most part, it seemed as though the various analysts were underwhelmed with Apple’s new products, especially the pricing on the supposedly cheap iPhone 5C. As such, Apple shares are sliding in pre-market trading. Here is some of the commentary from analysts on Wednesday:

  Negative Commentary

  Susquehanna
  Chris Caso, an analyst at Susquehanna, reiterated his “Neutral” rating on AAPL, as he believes that this year’s iPhone product cycle won’t be a significant positive catalyst for the stock. Caso sees shares of AAPL reaching $440, which suggests an 11% downside to the stock’s Tuesday closing price.

  “As usual, there were few surprises from AAPL’s well-previewed iPhone launch yesterday,” Caso commented. “We think the biggest surprise from an investment perspective is that the new iPhone 5C will be positioned as a midrange phone, and won�� provide much near-term help in addressing lower price points in emerging markets, as some had speculated. We do expect the addition of DoCoMo and China Mobile to represent TAM expansion, but not to represent the significant volume boost that would come from a lower-priced emerging market phone. We therefore maintain our view that this year�� iPhone product cycle isn’t a significant catalyst. We do, however, see a more significant catalyst next year, given our expectations for a larger-screen iPhone and as a new product cycle allows the iPhone 5C to be priced more aggressively at China Mobile.”

  Credit Suisse
  Analysts at Credit Suisse downgraded AAPL from “Outperform” to “Neutral” and see shares reaching $525. This price target suggests a 6% upside to the stock̵

• [By Amber Hestla, Michael J. Carr]

  Traders did not seem to be impressed by the newest products introduced by Apple (Nasdaq: AAPL). 

  A less expensive, more colorful iPhone and thumbprint security measures might not drive a significant sales increase for Apple, a company that reported revenue of more than $169 billion in the past 12 months, but it is likely to boost revenue for its suppliers.  

• [By Burke Speaker, Investorplace Writer Status seekers in China and Hong Kong helped Apple (AAPL]

  Status seekers in China and Hong Kong helped Apple (AAPL) sell out of its stock in new gold iPhones in the region.

  All were bought in pre-orders online yesterday — the first day such sales were allowed.

• [By   Rich Bieglmeier]

  CNBC Technology Reporter, Cadie Thompson lamented in an article yesterday that Apple (AAPL) is unusually quiet about iPhone 5C pre-orders.

  Cadie wrote, "In the past, the tech giant has been quick to boast about its high sales during the first few hours its devices became available. The fact that the company has kept mum on the matter so far has lead some to speculate that the early pre-order numbers aren't as good as they had been for earlier models."

Top 5 Heal Care Stocks To Watch Right Now: Colgate-Palmolive Company(CL)

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

Hot Blue Chip Stocks To Own Right Now: Visa Inc.(V)

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

Advisors' Opinion:

• [By Jon C. Ogg]

  What we would first refer you to is our prediction of the six major dividend hikes before the end of 2013. Then we would focus on Visa Inc. (NYSE: V) as well, even if it was not included in our recent dividend hike predictions. Frankly, it should have been obvious but for some reason was not.

Hot Blue Chip Stocks To Own Right Now: Chevron Corporation(CVX)

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

Today's Market: Looking Ahead For These Big Movers Based On Recent News

We are seeing more and more computer glitches as it relates to the systems in place to manage America's financial system. We have had issues in individual stocks, at various trading companies, even at exchanges themselves on numerous occasions, but now we find out that the U.S. government is having glitches too. The Wall Street Journal reports (see article here) that Goldman Sachs saw a multi-billion dollar bid not taken for a Treasury auction and received no allocation for that bid. Obviously that resulted in less demand for the issue and could have impacted rates, etc.

These issues need to get fixed and maybe it is time that the SEC opened up an IT department to oversee the vast network of computer systems and programs which keep the world's financial capital running.

Chart of the Day:

The bottom chart kind of tells the entire story of the current economic situation. Consumers when asked feel better about the present than they did in recent months, but their outlook remains dim because of all of the uncertainty. Until that changes, growth will continue to be slow.

(Click to enlarge)

Source: Briefing

We have no economic news today.

Asian markets finished lower today:

All Ordinaries -- down 0.34%% Shanghai Composite -- CLOSED Nikkei 225 -- down 0.16% NZSE 50 -- down 0.48% Seoul Composite -- CLOSED

In Europe, markets are higher this morning:

CAC 40 -- up 0.10% DAX -- up 0.14% FTSE 100 -- down 0.04% OSE -- up 0.28%

Retail

The big names involved in J.C. Penney (JCP) have changed a lot in the past few months and now Vornado Realty Trust has sold the remaining shares they held from the original position they had in J.C. Penney. This is news, but not all that surprising when one considers that the company had already backed away from the investment in a considerable way earlier this year and had indica! ted their unhappiness with the company. We still dislike the idea of readers investing directly into the name as the risk is still high, but the one thing we would watch is to see if any more big names step into the stock with a bullish stance.

We have long been bullish all things housing and the theme has paid off for readers quite well. It did not get past U.S. though that Pier 1 Imports (PIR) had disappointing numbers yesterday which caused the shares to decline by nearly 14% and volume to spike to 14.6 million shares. The company is still seeing sales growth, but this quarter saw a miss versus Wall Street's consensus numbers. During the conference call management said that the sales issue and profit miss was caused by mismanagement of their advertising which caused store traffic to come in light and forced them to discount merchandise later in the quarter...obviously at steeper discounts than if they had held the sales earlier in the quarter. Full year guidance was lowered, but we are willing to take the same stance here as we did with Bed, Bath & Beyond...a wait and see approach. Still bullish the home goods retailers.

Speaking of subsectors in the retailing industry we are bullish on, how about the drugstores? They all seem to be running on all cylinders and yesterday Rite-Aid (RAD) had a tremendous day. It was the heaviest traded stock on all of the exchanges and saw its shares rise $0.87 (23.45%) to close at $4.58/share. Rite-Aid is the first among the 'Big Three' to report quarterly results so we find it interesting that they saw an increase in same store sales and saw profits driven by generic drugs. We have been told that this is going to be the bottom line driver for the industry via nearly everyone and that it would impact the top line as generics replaced the more expensive branded drugs. We care about earnings growth more than revenue growth, especially when the stall in revenues is due to switching to higher margin product which is purchased for a lower price. The marke! t gets th! is and is pushing all of these names higher. In hindsight we wish we had been more bullish of Rite-Aid earlier, but hindsight is always perfect.

There are a lot of great stories out there in this market, but not too many in the retail sector. Rite-Aid is one of the few though and the drugstore stocks appear poised for more gains moving forward.

(Click to enlarge)

Source: Yahoo Finance

Manufacturing

We did close the trade we had recommended in Tesla (TSLA) recently and when a friend asked U.S. about it and wanted an explanation it led to quite an interesting conversation. As we explained that the company's stock price had increased dramatically and they were working on new stuff that would not be out for a few more years we tried to stress how hard it would be for those new models not to have bugs and other issues. Our friend hit U.S. with a question along the lines of why could the company not be like Apple and string together a couple of big products? He also kindly reminded U.S. that Apple once had the iMac which was followed by the iPod...and if we wanted to see bigger progressions then how about when the company went from iPod to iPhone and then the iPad? It is something we had not really considered in that light, but in that context it does force one to reconsider what expensive is.

5 Best Cheap Stocks To Invest In Right Now

Technology

We really dislike fallen internet retail companies, especially those which decide to solve their problems by venturing into new industries/sectors in order to reinvent themselves. The risk is already high with the business model they start out with because margins are razor thin and then they look to use the cash flows from the business which is not working to build a business which is supposed! to work.! Every time it happens we shake our head and wonder when these guys will learn their lesson.

As far as turnarounds go this one was quick and got the market excited. It has to be an outlier, but we are watching closely as the company tries to be a mini-Amazon.

(Click to enlarge)

Source: Yahoo Finance

Well it seems that Groupon (GRPN) has kind of changed the game with their transformation and turned the company around much faster than we thought possible...assuming that it could be turned around because we were of the thinking that it could not. Although we reversed our bearishness when we perceived that trade having run its course we still had our doubts. The company's reworking of its traditional business, while launching a retailing business and transitioning in new management has erased that negativity and we are going to take this example as a learning experience. Although we were not wrong on a position, it will be a good case study in the event that these transitions become the norm in the business rather than outliers.

Source: Today's Market: Looking Ahead For These Big Movers Based On Recent News

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

Evercore Partners Cuts Estimates on JP Morgan (JPM)

Evercore Partners announced on Tuesday that it has cut estimates on financial services company JPMorgan Chase & Co (JPM).

Following the company’s CFO presentation, the firm has lowered its estimates on JPM. Analysts have maintained an “Overweight” rating and $61 price target on JPM. This price target suggests a 13% upside from the stock’s current price of $52.86.

Analyst Andrew Marquardt commented: “Tempered expectations overall…, in our view, given lower mrtg banking, and sales/trading, higher expenses while credit costs remain lower for longer and NII should improve (albeit slightly). Capital clarity helpful and while higher hurdles may indeed result in lower l/t ROEs, mgmt implied such may not impact l/t franchise ROAs. That said, we would not be surprised if degree of capital deployment is curtailed for 2H13 and for ’14. Regardless, we think such concerns are more than reflected in shares given discount to peers, SOTPs, ultimate earnings power, etc.”

Looking ahead, FY2013 estimates have been raised from $5.74 to $5.88 per share, FY2014 estimates have been lowered from $5.80 to $5.75 per share and FY2015 estimates were cut from $6.20 to $6.12 per share.

JPMorgan shares were up 47 cents, or 0.89%, during pre-market trading Tuesday. The stock is up 20% YTD.

Oppenheimer Restarts Coverage on High-Yield MLPs for Dividend Lovers

Oppenheimer is returning to coverage on the energy master limited partnerships (MLPs), and it is focusing on what it calls the energy value chain. The energy value chain encompasses the entire MLP sub-sector areas, and the Oppenheimer team is intent on finding the best value for investors in a sector that has had a tremendous run in 2013.

The Oppenheimer analysts are separating themselves from other Wall Street firms in their coverage in some interesting ways. They have a bias towards investing in higher distribution growth, even if the yields are lower. They also have a bias for owning the general partners (GP) due to their typically incentive distribution rights structure. Here are the top MLP names to buy at Oppenheimer. The first four stocks are highlighted as their top picks.

EQT Midstream Partners L.P. (NYSE: EQM) has everything the Oppenheimer team is looking for: low-risk, fee-based contracts in an attractive region, low financial leverage, high distribution growth and coverage and a supportive parent with assets to sell. Oppenheimer has a $55 price target for the stock. The Thomson/First Call estimate is at $54. Investors are paid a 3.4% distribution which Oppenheimer thinks may grow to 4.3% in 2014. Remember, MLP distributions may include return of principal.

New Source Energy Partner L.P. (NYSE: NSLP) is definitely a name for investors interested in yield. While the company faced some issues in the second quarter due to flooding in some of its drilling areas, production is back to normal and management is very positive for the remainder of 2013. Oppenheimer has a $23 price objective, while the consensus is at $24. Investors are paid a stellar 11% distribution.

Seadrill Partner LLC’s (NYSE: SDLP) current fleet of offshore drilling rigs at its parent, Seadrill, is young and highly contracted for with major oil companies. The balance sheet is also well positioned currently, giving the company some flexibility with business execution. Oppenheimer’s price target for the stock is set at $35, and the consensus target was not posted. Investors are paid a 5.4% distribution.

Tesoro Logistics L.P. (NYSE: TLLP) is an Oppenheimer favorite, especially after the pullback in the stock price. The company has strong fee-based contracts that increase the likelihood of consistent increases in the distribution. The Oppenheimer price target is posted at $61, while the consensus is at $63. Shareholder are paid a 3.8% distribution.

Breitburn Energy Partners L.P. (NASDAQ: BBEP) is another high-yielding name that makes the cut at Oppenheimer. The company recently purchased some significant oil and gas assets in the Oklahoma panhandle for $846 million that is expected to increase its production by 28%. This may help quiet critics that have been concerned over distribution maintenance. Oppenheimer has placed a $21 price target on the stock, which is the same as the consensus figure. Investors are paid a whopping 10.9% distrubution.

LRR Energy L.P. (NYSE: LRE) is another top stock to buy that has seen significant insider buying. CEO and Chairman of the Board Eric Mullins recently purchased 16,750 shares of the stock. It always looks good when the top management is buying the stock of the company they work for. Oppenheimer has an $18 price target, and the consensus is pegged at $16.75. Shareholders are receiving a huge 12.9% distribution.

Mid-Con Energy Partners L.P. (NASDAQ: MCEP) is a top stock to buy at Oppenheimer and also recently was upped to a buy at Robert Baird. With strong second-quarter earnings and solid prospects for the balance of the year, the company may be under the radar of most investors. The Oppenheimer price target is at $28. The consensus target is at $27. Investors are paid a solid 8.6% distribution.

Memorial Production Partners L.P. (NASDAQ: MEMP) also has seen a tremendous amount of insider buying. As of the end of last year, the company had 609 billion cubic feet of natural gas equivalents. Oppenheimer has put a $24 price target on the stock, and the consensus target is at $24.50. Investors are paid a 10.1% distribution.

The Oppenheimer team is very bullish on the MLP asset class as a whole going forward. Top stocks to buy that can increase their distribution provide a solid hedge for investors concerned about rising interest rates. Plus, the tax advantage to owning MLPs makes great sense for investors looking to lower their tax burden on income producing investments.

Is Target a Risky Investment?

With shares of Target Corp. (NYSE:TGT) trading at around $70.64, is TGT an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

C = Catalyst for the Stock's Movement

Target blamed the weather! While the weather might play a role in dampening expectations, it's rarely going to make a substantial impact on results. This is especially the case for Target, which is diversified enough in a geographical sense that weather shouldn't play a major player. Regardless of the excuse given, Target now expects comps to be flat for the quarter. Comps were originally expected to come in between flat and a 2 percent increase. Sales and earnings are also expected to come in slightly lower than expected. However, annual EPS is expected to grow 11.87 percent over the next five years. There are many other positives for Target as well, which include:

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Consistent dividend increases Buying back $5 billion of shares over the next two years Analysts like the stock: 15 Buy, 10 Hold, 1 Sell Increase in online sales Growth in Canada Untapped growth potential on global basis Consistent improvements in revenue on annual basis Consistent improvements in earnings on annual basis Free cash flow expected to triple by 2015 Strong margins (compared to peers) Declining capital expenditures Remodeling 100 stores for improved customer experience and product placement

In regards to Target's online presence, it's a more popular site than many people would think. For example, it ranks #319 globally and #61 in the United States. That's a lot of traffic! However, over the past three months, pageviews have declined 32.99 percent, time-on-site has declined 5 percent, and the bounce rate has increased 9 percent. These aren't good numbers, but keep in mind that they're coming in after the holiday season.

For comparative purposes, Wal-Mart Stores Inc. (NYSE:WMT) is ranked #174 globally and #44 in the United States. Wal-Mart is way ahead globally, but Target has a chance to catch up domestically, which would be a considerable blow to Wal-Mart considering the ever-increasing trend of online shopping. Wal-Mart isn't one to sit around and hope for the best if things are going poorly. Therefore, Target might want to come up with a way to increase online traffic soon. Over the past three months for Wal-Mart, pageviews have declined 38.02 percent, time-on-site has declined 10 percent, and the bounce rate has increased 10 percent. Evidently, the poor numbers are likely an industry trend. Therefore, Wal-Mart might pick up the pace if Target does.

The chart below compares fundamentals for Target, Costco Wholesale Corporation (NASDAQ:COST), and Wal-Mart. Target has a market cap of $45.34 billion, Costco has a market cap of $47.56 billion, and Wal-Mart has a market cap of $258.72 billion.

	TGT	COST	WMT
Trailing   P/E	15.64	24.42	15.65
Forward   P/E	12.78	21.62	13.36
Profit   Margin	4.09%	1.90%	3.62%
ROE	18.52%	17.33%	22.42%
Operating   Cash Flow	$5.32 Billion	$3.34 Billion	$25.59 Billion
Dividend   Yield	2.00%	1.00%	2.40%
Short   Position	3.10%	1.30%	1.70%

 

Let's take a look at some more important numbers prior to forming an opinion on this stock.

E = Equity to Debt Ratio Is Weak

The debt-to-equity ratio for Target is weaker than the industry average of 0.70. It's also weaker than the debt-to-equity ratios for Costco and Wal-Mart. The debt-to-equity ratio for Target isn't terrible, and it won't be a big deal in this environment, but the only guarantee in the markets is change, and interest rates will eventually increase.

	Debt-To-Equity	Cash	Long-Term Debt
TGT	1.07	$788.00 Million	$17.65 Billion
COST	0.47	$5.65 Billion	$4.87 Billion
WMT	0.66	$7.81 Billion	$54.23 Billion

 

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T = Technicals Have Strong  

Target has underperformed its peers over one-year and three-year time frames, but it has been the best performer in this group so far this year.

	1 Month	Year-To-Date	1 Year	3 Year
TGT	3.20%	20.07%	24.03%	32.82%
COST	2.38%	10.33%	32.71%	105.00%
WMT	4.72%	15.59%	35.98%	57.53%

 

At $70.64, Target is trading above all its averages.

50-Day   SMA	67.10
100-Day   SMA	64.09
200-Day   SMA	63.51

 

E = Earnings Have Been Solid             

Earnings and revenue have consistently improved on an annual basis. This is a great sign.

	2009	2010	2011	2012	2013
Revenue   ($)in   billions	64.95	65.36	67.39	69.86	73.30
Diluted   EPS ($)	2.86	3.30	4.00	4.28	4.52

 

When we look at the previous quarter on a year-over-year basis, we see an improvement in revenue and earnings. Revenue and earnings also improved on a sequential basis.

	1/2012	4/2012	7/2012	10/2012	1/2013
Revenue   ($)in   billions	21.29	16.87	16.78	16.93	22.73
Diluted   EPS ($)	1.45	1.04	1.06	0.96	1.47

 

Now let's take a look at the next page for the Trends and Conclusion. Is this stock an OUTPERFORM, a WAIT AND SEE, or a STAY AWAY?

T = Trends Do Not Support the Industry

Yes, gasoline prices have declined. This is a big plus, but there are still a lot of headwinds, including underemployment, increased taxes, and weak consumer sentiment. As a result, there was a 0.4 percent in decline in retail sales in March.

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Conclusion

Target has a lot going for it on a company-specific basis, but the performance of the stock market as a whole and simple logic don't match at the moment. There are many economic headwinds, and without central bank support and low interest rates, this market would be nowhere near where it's trading now. If a bear market were to present itself, then Wal-Mart would be a safer option than Target. In this environment, it would be very difficult for Target to meet expectations. Wal-Mart might also miss expectations, but it's a much bigger ship to turn. It would also potentially benefit from a weaker economy due to its reputation for steep discounts. The biggest competition for Wal-Mart in this environment would be dollar stores.

The Worst Is Not Yet Over For Corporate India

The Indian rupee fell 28% from 30-Apr to 28-Aug. Its worst fall since 1991 and the second worst in 40 years, says Credit-Suisse in a research note. What makes this worse is the fact that while previous declines of this scale were deliberate (in the 1960s) and discrete (1991), this latest crash wasn't. It was all driven by a crisis of confidence rather than anything else, says Credit Suisse.

Some $13 billion exited in the months of July and August as corporates panicked and tried to hedge themselves.

And as the rupee continues to remain unpredictable–currency volatility already is at the highest seen–it will likely claim more victims in the coming weeks, says Credit Suisse.

The thing to watch will be the next earnings reports as there may be surprises–or shocks–in there.

Best Insurance Companies To Buy Right Now

"Prior periods of INR volatility have been followed by confessions by corporates of violation of internal hedging norms," Credit Suisse says. "Mis-priced import and export hedges or complex currency derivatives are likely to get exposed."

Given the fear trade that drove the massive decline of the rupee, it can't be over so quickly, after all.

Best Penny Stocks To Watch For 2014

I cringed at the headline: "Why decimalization is a bad idea." It's the second article I had seen in as many days apparently supporting a proposed new Congressional bill that I find incredibly stupid.

Of course, I'd also misread the headline. What it actually said was "Why�dedecimalization is a bad idea" [emphasis mine]. And it wasn't just the headline that Felix Salmon nailed, as he concluded in the post that "there's no way that small investors can possibly benefit from this."

Amen.

But let's backtrack for a moment. The "problem" this bill attempts to rectify is that there are many small public companies out there that don't have much Wall Street research coverage. The reason is that trading is so sparse and spreads -- that is, the difference between the bid and ask prices -- are so thin that there's little money for Wall Street firms to make trading the stocks and, thus, little reason to follow them closely. This situation was a result of "decimalization" -- the changeover from quoting stocks in fractions to decimals, which allowed bid/ask spreads to fall in many cases to just a penny.

Best Penny Stocks To Watch For 2014: Books-A-Million Inc.(BAMM)

Books-A-Million, Inc. operates as a book retailer in the southeastern United States. The company operates superstores and traditional bookstores that offer a selection of hardcover and paperback books, magazines, and newspapers. It also offers other merchandise, including gifts, cards, collectibles, magazines, music, DVDs, and electronic accessories, as well as coffee, tea, and other edible products. The company markets its products under the trademarks of Books-A-Million, BAM! Books-A-Million, Bookland, Books & Co., Millionaire?s Club, Sweet Water Press, Thanks-A-Million, Big Fat Coloring Book, Up All Night Reader, Read & Save Rebate, Readables Accessories for Readers, Kids-A-Million, Teachers First, The Write-Price, Bambeanos, Hold That Thought, Book$mart, BAMM, BAMM.com, BOOKSAMILLION.com, Chillatte, Joe Muggs Newsstand, Page Pets, JOEMUGGS.com, FAITHPOINT.com, Faithmark, Joe Muggs, Anderson?s Bookland, Snow Joe, Summer Says, On the John University, OTJU, American Whole sale Book Company, AWBC, and NetCentral. It also offers its products over the Internet at Booksamillion.com. As of August 11, 2011, the company operated 231 stores in 23 states and the District of Columbia. Books-A-Million, Inc. was founded in 1917 and is based in Birmingham, Alabama.

Best Penny Stocks To Watch For 2014: China Metro-Rural Holdings Limited(CNR)

China Metro-Rural Holdings Limited, through its subsidiaries, primarily engages in the development and operation of agricultural logistics and trade centers in northeast China. It also involves in purchasing, processing, assembling, merchandising, and distributing pearls and jewelry products. The company markets its pearls and jewelry products to wholesale distributors and mass merchandisers in Europe, the United States, Hong Kong, and other parts of Asia. In addition, it develops, sells, and leases residential and commercial properties in Hong Kong and the People?s Republic of China. The company is based in Tsimshatsui, Hong Kong.

Advisors' Opinion:

• [By Wyatt Research Staff]

  The stock moved significantly higher in mid-January and traded in a fairly tight range ever since. However, that could change soon. China's agricultural exports to Japan will grow if radiation continues to seep into the food chain.

  China exported $593 million worth of agricultural goods to Japan last year.

Top 5 Safest Stocks To Invest In Right Now: Tortoise Capital Resources Corporation(TTO)

Tortoise Capital Resources Corp. is a close ended equity mutual fund launched and managed by Tortoise Capital Advisors L.L.C. It is co-managed by Kenmont Investments Management, L.P. The fund invests in the public equity markets of the United States. It seeks to invest primarily in the energy infrastructure sector. The fund invests in the value stocks of micro cap companies with primary focus on midstream and downstream segments and to lesser extent upstream segment. It also seeks to invest between $5.0 million and $20.0 million per transaction in privately held companies with a market capitalization of less than $250 million. The fund employs quantitative and fundamental analysis with a focus on factors such as fixed asset-intensive, limited technological risk, and experienced management teams to create its portfolio. Tortoise Capital Resources Corp. was formed on September 8, 2005 and is domiciled in the United States.

Best Penny Stocks To Watch For 2014: (POSC)

Positron Corporation operates as a molecular imaging company providing nuclear medicine technologies and services that are used in the field of nuclear cardiology. The company, through its proprietary PET imaging systems and radiopharmaceutical solutions, enables healthcare providers to accurately diagnose disease, and improve patient outcomes while practicing cost effective medicine. Its proprietary product lines and services include the Attrius, a dedicated PET imaging system; PosiStar, a clinical, technical, and service customer care plan; and PosiRx, a system that automates the elution, preparation, and dispensing processes for radiopharmaceutical agents used in molecular imaging. The company was founded in 1983 and is headquartered in Fishers, Indiana.

Advisors' Opinion:

• [By Dennis Slothower]

  Positron Corp. (OTC: POSC)is up 2.50% to $0.0410 on volume of over 518K shares. POSC, a molecular imaging company specializing in the field of nuclear cardiology, announced that it will beexhibitingat the European Society of Cardiology International Conference. (OTC:POSC), (POSC)

Top Energy Stocks To Buy Right Now

Energy Transfer Partners (NYSE: ETP  ) has launched the issue of 12 million common units in a public offering. Additionally, the company's underwriter has been granted a 30-day purchase option for an additional 1.8 million units.�

ETP did not specify the pricing or the exact timing of the offer. The firm's closing unit price on the day the issue was announced stood at $50.35.

The company said it would utilize the net proceeds of the offering to retire debt drawn from its revolving credit facility, and for "general partnership purposes."

Barclays�unit Barclays Capital is the underwriter of the issue.

More Expert Advice from The Motley Fool

The surge in oil and natural gas production from hydraulic fracturing and horizontal drilling is creating massive bottlenecks in takeaway capacity. However, this problem for producers creates a massive and immensely profitable opportunity for midstream companies. Energy Transfer Partners helps alleviate the gluts in supply with 23,500 miles of transformational pipelines. To see if ETP and its industry-leading yield will be a fit for you, click on this detailed premium report, which will supply you with a thorough analysis of this midstream.

Top Energy Stocks To Buy Right Now: Worthington Energy Inc (WGAS)

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

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

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

Top Energy Stocks To Buy Right Now: Weatherford International Ltd(WFT)

Weatherford International Ltd. provides equipment and services used in the drilling, evaluation, completion, production, and intervention of oil and natural gas wells worldwide. It offers artificial lift systems, which include reciprocating rod lift systems, progressing cavity pumps, gas lift systems, hydraulic lift systems, plunger lift systems, hybrid lift systems, wellhead systems, and multiphase metering systems. The company also provides drilling services, including directional drilling, ?Secure Drilling? services, well testing, drilling-with-casing and drilling-with-liner systems, and surface logging systems; and well construction services, such as tubular running services, cementing products, liner systems, swellable products, solid tubular expandable technologies, and inflatable products and accessories. In addition, it designs and manufactures drilling jars, underreamers, rotating control devices, and other pressure-control equipment used in drilling oil and nat ural gas wells; and offers a selection of in-house or third-party manufactured equipment for the drilling, completion, and work over of oil and natural gas wells for operators and drilling contractors, as well as a line of completion tools and sand screens. Further, the company provides wireline and evaluation services; and re-entry, fishing, and thru-tubing services, as well as well abandonment and wellbore cleaning services; stimulation and chemicals, including fracturing and coiled tubing technologies, cement services, chemical systems, and drilling fluids; integrated drilling services; and pipeline and specialty services. It serves independent oil and natural gas producing companies. The company was founded in 1972 and is headquartered in Geneva, Switzerland.

Advisors' Opinion:

• [By Tom Bishop]

  Weatherford International (WFT) is trading around $14. Weatherford is a leading provider of equipment and services to the oil and gas industry, based in Switzerland. These shares have traded in a range betwe en $10.85 to $26.25 in the last 52 weeks. The 50-day moving average is $15.46 and the 200-day moving average is $19.62. WFT is estimated to earn about 88 cents per share in 2011 and $1.67 for 2012. Analysts at UBS set a $28 price target for WFT share.

Top 5 Clean Energy Companies To Own For 2014: GMX Resources Inc.(GMXR)

GMX Resources Inc. operates as an independent oil and natural gas exploration and production company primarily in the United States. It has interests in two oil shale resources, including the Williston Basin that targets the Bakken/Sanish-Three Forks in North Dakota/Montana; and the DJ Basin, which targets the Niobrara Formation in Wyoming. The company also holds interests in natural gas resources comprising the Haynesville/Bossier Formation and the Cotton Valley Sand Formation in the East Texas Basin. As of December 31, 2010, it had proved reserves of 319.3 billion cubic feet of natural gas equivalent; and 264 net producing wells in east Texas. The company was founded in 1998 and is headquartered in Oklahoma City, Oklahoma.

Advisors' Opinion:

• [By Putnam]

  GMX Resources Inc. is a pure play independent oil and natural gas exploration and production company. The Company is focused on the development of Haynesville/Bossier Shale and Cotton Valley Sands in the Sabine Uplift of the Carthage, North Field of Harrison and Panola counties of East Texas. Its EPS forecast for the current year is 0.19 and next year is 0.55. According to consensus estimates, its topline is expected to grow 43.52% current year and 41.52% next year. It is trading at a forward P/E of 11.04. Out of 15 analysts covering the company, six are positive and have buy recommendations, two have sell ratings and seven have hold ratings.

Top Energy Stocks To Buy Right Now: WaterFurnace Renewable Energy Inc (WFIFF)

WaterFurnace Renewable Energy, Inc. specializes in the design, manufacture and distribution of geothermal and water-source systems. It�� the United States subsidiary companies are WaterFurnace International, Inc. (WaterFurnace) and LoopMaster International, Inc. (LoopMaster). In December 2010, it incorporated two Australian subsidiaries: WaterFurnace International Asia Pacific Pty. Ltd. (WaterFurnace Asia Pacific) and Hyper WFI Pty. Ltd. (Hyper WFI). WaterFurnace designs, manufactures and distributes geothermal water source heating and cooling systems for residential, commercial and institutional buildings. LoopMaster installs geothermal loops for residential applications, does commercial conductivity testing and provides design and installation assistance. Hyper WFI designs, develops and builds devices that limit the inrush current, which electric motors draw upon start up. On January 21, 2011, the Company acquired inventory and fixed assets from Binary Engineering Pty. Ltd. Advisors' Opinion:

• [By Tom Konrad]

  Waterfurnace has appeared in my annual picks several times over the years because they are a pure-play leader in geothermal heat pumps, which the US EPA calls "the most efficient way to heat and cool a building."  Heat pumps have a high up-front cost, and so they benefit from low interest rates and a high price of heating alternatives, such as natural gas.  Recent low natural gas prices have been hurting Waterfurnace's business, which has recently driven the stock price down and brought the dividend yield up to a very attractive 6.74%.

Top Energy Stocks To Buy Right Now: Peabody Energy Corporation(BTU)

Peabody Energy Corporation engages in the mining of coal. It mines, prepares, and sells thermal coal to electric utilities and metallurgical coal to industrial customers. The company owns interests in 30 coal mining operations located in the United States and Australia, as well as owns joint venture interest in a Venezuela mine. It is also involved in marketing, brokering, and trading coal. In addition, the company develops a mine-mouth coal-fueled generating plant; and Btu Conversion projects that are designed to convert coal to natural gas or transportation fuels; and clean coal technologies. As of December 31, 2011, it had 9 billion tons of proven and probable coal reserves. The company was founded in 1883 and is headquartered in St. Louis, Missouri.

Advisors' Opinion:

• [By Sherry Jim]

  BTU International, Inc.(NASDAQ: BTUI) closing price in the stock market Tuesday, Jan. 3, was $2.5608. BTUI is trading -7.35% below its 50 day moving average and -45.75% below its 200 day moving average. BTUI is -80.90% below its 52-week high of $13.41 and 5.38% above its 52-week low of $2.44. BTUI‘s PE ratio is 12.93 and its market cap is $24.28M .

  BTU International, Inc. engages in the design, manufacture, sale, and service of thermal processing systems used in various manufacturing processes primarily in the electronics, alternative energy, and automotive industries worldwide.

• [By Victor Mora]

  Peabody Energy provides coal energy products and services to a wide range of companies in various industries worldwide. The stock has been in a steep decline for the last few years but may be stabilizing at these current prices. Earnings and revenue figures have been decreasing, over the last four quarters, but investors have been pleased with what they’ve heard during the earnings reports. Relative to its peers and sector, Peabody Energy has been one of the worst performers, year-to-date. STAY AWAY from Peabody Energy for now.

Is AT&T a Buy at These Prices?

With shares of AT&T (NYSE:T) trading around $35, 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, giant providers like AT&T stand to see rising profits. Look for AT&T to continue its dominance as consumers and companies aim to communicate quickly, easily, and efficiently.

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T = Technicals on the Stock Chart are Mixed

After an impressive run over the last several years, AT&T stock has just slightly managed to squeeze out a positive performance for the year. The stock looks to currently be consolidating so it make take some time before it makes a decisive move in either direction. 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 near its key averages which signal neutral 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	19.82%	83%	80%

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

	Put IV Skew	Call IV Skew
July Options	Steep	Average
August Options	Steep	Average

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 very 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?

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	2013 Q1	2012 Q4	2012 Q3	2012 Q2
Earnings Growth (Y-O-Y)	11.67%	-39.59%	3.28%	10.00%
Revenue Growth (Y-O-Y)	-1.46%	0.23%	-0.06%	0.25%
Earnings Reaction	-5.02%	0.80%	-0.82%	-2.11%

AT&T has seen mostly increasing earnings and mixed revenue figures over the last four quarters. From these numbers, the markets have not been too happy about AT&T’s recent earnings announcements.

P = Poor Relative Performance Versus Peers and Sector

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

	AT&T	Verizon	T-Mobile	Sprint Nextel	Sector
Year-to-Date Return	5.99%	16.99%	12.37%	27.34%	14.58%

AT&T has been a poor relative performer, year-to-date.

Conclusion

AT&T provides valuable and essential communications products and services to a wide range of consumers around the world. The stock has struggled this year after seeing a strong run in recent years. Over the last four quarters, the company has seen increasing earnings and mixed revenue figures which have not made investors too happy. Relative to its peers and sector, AT&T has been a poor performer, year-to-date. WAIT AND SEE what AT&T does in coming quarters.