Best Dividend Stocks To Buy For 2015: April 2014

Tuesday, April 29, 2014

2 Business Models Creating Everlasting Investment Value

Running a business in its simplest explanation is taking inputs, adding value to the inputs, and then selling the output to make money. To that end, Brown-Forman (NYSE: BF-B ) and Dunkin' Brands (NASDAQ: DNKN ) have each found ways to take commoditized products and turn them into something consumers will pay a lot of money for, thus creating fantastic businesses.

Corn whiskey
Being a corn farmer is a rough business. You work long, hard hours, and then you basically have to sell your product for whatever the market is willing to pay you. That isn't an overly favorable situation.

Brown-Forman, on the other hand, buys that corn, dries it up, grinds it into cornmeal, mixes the cornmeal with water and yeast, boils ethanol out of the mixture, and lets it sit in a barrel for a couple of years -- and voila: Jack Daniel's. Of course, that was an overly simplistic version, but by going through this process it has created a product that consumers love and will pay plenty of money for.

Brown-Forman creates other liquor brands as well, but Jack Daniel's is the most prominent. Other factors that make Brown-Forman's business attractive from an investor standpoint are its highly regulated industry and its standing as one of the oldest and best-known players in its market.

Because of the nature of this business, it isn't feasible for someone to simply open up shop and begin to compete. There are many regulations, as well as a long waiting period after the initial investment, before any sales start to roll in. And there's the high level of competition from Brown-Forman and others.

These are all factors that have helped Brown-Forman achieve steady earnings growth of over 8.5% per year on average over the past 10 years, along with an average profit margin in the same time period of almost 17%.

The buzz on coffee
Dunkin' Brands has used a different method to create a similar outcome as Brown-Forman. Dunkin' sells coffee, which, like corn, is a commodity and is priced solely by the market. Again, not a favorable business.

Dunkin' doesn't convert the coffee into anything different, the way Brown-Forman turns corn into alcohol, but Dunkin' has added a fine brand and convenience to the commodity, which is something investors pay for.

Buying store-brand coffee in a tub and making it at home is obviously much cheaper than going out for coffee every morning. However, Dunkin' has succeeded in making consumers see value in the Dunkin' Donuts name on the side of the cup containing their freshly brewed, premium coffee every morning.

The company has also succeeded in creating a convenient option that consumers pay for. Just last week I stopped into a Dunkin' Donuts and ordered a medium coffee and bagel with cream cheese, and within one minute I had the coffee in my hand. Within another three minutes I was back in my truck and on the road again, with my wallet only around $3.50 lighter.

Dunkin' Brands also franchises nearly 100% of its stores, meaning the company gets a royalty fee based on sales from both its Dunkin' Donuts and Baskin-Robbins stores. This is just another factor investors should like, as Dunkin' Brands grows with the top line of its stores but is not exposed to store-level operations, which can be troubling in many cases.

Like Brown-Forman, Dunkin' has fared well, growing earnings over 33% a year the past five years on average, and sporting a profit margin over 20% in the past fiscal year.

Fool's take
If you're a true long-term investor, you wouldn't wnat to buy fad companies that don't have some sort of competitive advantage in their business model. Both Dunkin' and Brown-Forman have incredibly strong brands, which bring incredibly strong brand loyalty. They also both employ several other favorable advantages in their business models.

The market apparently likes both of these companies as well, as Dunkin' currently trades around 36 times earnings and Brown-Forman around 30 times, compared with a market average of 18.

So right now, even though they may be priced at a premium, you could still buy knowing you're getting pieces of excellent companies that will help your portfolio for many years to come. You could use each company's dividends to cost average further purchases at any price level and would most likely be satisfied holding these stocks for a long time to come.

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Monday, April 28, 2014

Netflix's Growth Story Is Not Over

Brett Icahn and fund co-manager David Schechter are of the opinion that Netflix (NFLX) can rise further as it accelerates its global expansion. Carl Icahn (Trades, Portfolio) has stated that he cut his Netflix position because it had become too big.The claims of Icahn Jr. and Schechter also deserve a closer look, as despite trading at a P/E of more than 400 both are bullish on the company. It looks like that the two of them are analyzing Netflix along the same lines as MKM Partners, which had upgraded Netflix's price target from $285 to $370 last year and stated that its market cap could reach a whopping $75 billion by 2020.In my opinion, MKM's valuation, although wildly positive, shouldn't be ruled out. Even if the company couldn't achieve the projected $75 billion in market cap, it should get close to the figure. The reasons behind this bullish thesis aren't hard to find. First, according to MKM analyst Rob Sanderson, the video streaming market in the U.S. is worth $200 billion and Netflix's trailing twelve months' revenue is only $4.14 billion. This means that Netflix has a lot of room to grow revenue.What would drive growth?The company has been adding subscribers at a pretty good rate. It saw an addition of 1.3 million new subscribers in the U.S. in the previous quarter, near the higher end of its guidance of 690,000-1.49 million. More impressively, Netflix's international subscribers jumped a whopping 1.44 million. In this way, Netflix ended the quarter with more than 40 million subscribers.The company's strategy of making its original content along with carrying content from other studios has worked well. This helped Netflix bring in revenue of $1.1 billion, at par with estimates, while earnings of 52 cents per share were well ahead of the 49 cents consensus.Netflix has now overtaken HBO in terms of subscribers as it aims to become a web-based television network. It is reportedly engaged in negotiations with U.S. cable TV providers such as Suddenlink Communications, Cox Communications, RCN Tele! com Services, and Atlantic Broadband Finance for content. If Netflix succeeds in getting itself onto cable networks and is integrated into set-top boxes, its usage would most probably increase.A big marketEven MKM Partners' analysis suggests that the "economics of entertainment video will be redistributed with the shift to Internet-delivered services." That's probably the reason why Netflix's partnership with cable operators such as Virgin in the U.K. and ComHem in Sweden could turn out to be lucrative. Sanderson states that cable operators in the U.K. view Netflix as a "must-have" service, and as the company moves into other international markets in the future, its international subscriber count can exceed its U.S. subscriber base.In countries such as India, where broadband penetration is still low, Netflix can find a big market. The number of households with a TV in the country is projected to multiply from around 160 million at present to 200 million in the next four years. This growth will be driven by an increase in cable digitization and direct-to-home services. Penetration in such mass markets could be a big boon for Netflix and help it grow its revenue substantially.Analysts are also bullish about the company's prospects with as many as 12 brokerages raising their price targets on the stock. Analysts at Morgan Stanley expect Netflix to add 4.2 million subscribers in the fourth quarter. Looking forward, CEO Reed Hastings is of the opinion that Netflix can reach 60 million to 90 million subscribers internationally in the future.ConclusionNetflix has a big playing field ahead of it and it isn't hard to see why Brett Icahn and Schechter are still bullish. As I said above, Netflix might not be worth $75 billion by 2020 as MKM suggests, but it can surely continue growing as it taps into more markets and expands its wings.

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Saturday, April 26, 2014

Can Microsoft Still Win the Console Wars of 2013?

Microsoft (NASDAQ: MSFT ) and Sony (NYSE: SNE ) are doing all they can to win the 2013 edition of the video game console wars. One analysts believes Mr. Softy may have done enough to overcome early missteps, calling the Xbox One a winner for the holidays.

The next-generation console painted itself into a corner early on as Microsoft outlined some downright draconian content policies. Sony's PlayStation 4 is comparable in every way that matters, but it also comes without restrictive content licenses and costs $100 less than the $499 Xbox One. It looked like game over in the first round.

But Microsoft quickly apologized for its heavy hand over what gamers can and can't do with their Xbox One games, and it ended up removing most of the unpopular restrictions. The console is still more expensive than the Sony product, but maybe that's not enough to hold the product back anymore.

Analyst firm Robert W. Baird says the Xbox is on a winning track. Analyst Colin Sebastian ran checks against the supply chains of both consoles and came away with a dramatic conclusion: "Microsoft may have the benefit of a 2-3x unit advantage at launch compared to Sony's PS4."

That's not a small victory, but a savage rout. If Sebastian's sources are on the money, Microsoft will most definitely win this round of the console wars.

Well, Redmond will take the early battles, anyway. Both systems are expected to launch into heavy demand, with manufacturing capacity becoming the limiting factor at first. In other words, Sony might still rule the roost when it comes to public opinion and the potential for long-term success. But Microsoft shows mastery of the supply chain game at this point -- secure more components, build more units, and look good in the early sales statistics.

The real takeaway from this unexpected win is this: Microsoft is serious about hardware.

We all know Microsoft as a software giant, built on decades of success via Windows and the Office suite. That's how Bill Gates got his Dow Jones (DJINDICES: ^DJI ) membership card, and these are still the core operations of a market giant with a $266 billion market cap and $78 billion in 2012 sales. But that's changing fast.

The recent and ongoing reorganization into a "devices and services" company is for real. Redmond is beating hardware specialist Sony at its own manufacturing game. The feat is even more impressive when you consider that most of a modern game console's parts are made somewhere in Southeast Asia. Sony has these sources right in its extended backyard, and Microsoft is still slapping its hand away with authority.

There's still a lot more to say and do before the cows come home, but Microsoft may be onto something good with the new hardware focus. The lessons learned in building consoles might even translate into smartphone and tablet success somewhere down the road. Maybe that's how Microsoft will earn its keep as a Dow member over the next decade.

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Friday, April 25, 2014

One Marijuana Stock Earns Some Legitimacy Plus Other Pot News (GWPH, ERBB & PHOT)

Its been a rather eventful week for news from the marijuana sector and small cap marijuana stocks like GW Pharmaceuticals PLC (NASDAQ: GWPH), Tranzbyte Corp (OTCMKTS: ERBB) and Growlife Inc (OTCMKTS: PHOT) as one of these stocks gets endorsed by Morgan Stanley while another appears on CNBC – more signs of legitimacy for an investment sector that's full of pumps, dumps and other unsavory types of activities. Just consider the following small cap marijuana stock or pot industry news:

GW Pharmaceuticals PLC Soars on Morgan Stanley Coverage. UK based GW Pharmaceuticals PLC, which is developing a product portfolio of cannabinoid prescription medicines, soared more than 32% on Tuesday after Morgan Stanley initiated coverage of the stock with an Overweight rating and $103 price target. Morgan Stanley also predicted that US sales of GW Pharmaceuticals PLC's Sativex, a treatment for MS spasticity and cancer pain, should grow over time. GW Pharmaceuticals PLC is up 47% since the start of the week, up 68.1% since the start of the year and up 656.1% since last May.

Cramer Endorses GW Pharmaceuticals PLC. For what his opinion might be worth, CNBC Mad Money host Jim Cramer called Morgan Stanley's recommendation "timely" and "bold," predicting the stock will quickly reach the target because:

"It's not a medical marijuana stock. They have a novel platform. It is an epilepsy company."

However, he still warned investors to stay away from other marijuana-related penny stocks, saying:

"Forget it! If you like cannabis, and I'm not necessarily speaking about 'liking' cannabis, it's GW Pharma."

Marijuana: A New Frontier for Silicon Valley. Mat Honan, senior writer at WIRED, has written a story entitled "High Tech: How Silicon Valley entrepreneurs are rushing to cash in on cannabis." Honan was then interviewed by The Daily Ticker where he talked about Stanley Brothers' Charlotte's Web marijuana strain that has therapeutic benefits without a big high for patients who have seizures. He also commented that there's been talk about pot businesses using bitcoin and other virtual currencies in their banking relations, but so far there haven't been any "large-scale solutions" to address the problem of banks continuing to avoid the sector.

Tranzbyte Gets CNBC's Attention. Stephen Shearin, the COO of Tranzbyte, recently appeared on CNBC to discuss his company's age verification marijuana vending machine for medicinal users that, by law, must sit inside a dispensary. When asked why someone would want to buy pot from a vending machine, Shearin commented:

Well, you know, at this point, it's very new, it's news, right? We're talking about this and people getting their cards and they're going in, experimenting, maybe they did it in the '60s and '70s, coming back to it, being treated for an ailment and they have a lot of questions and they should have those questions answered and take the time and be educated about it. If you know what you want, you don't want to stand behind somebody who is asking. Should i eat it? Should i dab? Should i infuse? Should i have a blend? There's a thousand questions they have. Somebody might know they love the dispensary. It's temperature controlled, 58 degrees and the thing right behind, they can bypass the whole conversation and be in and out in a few minutes. Most dispensary conversations and sales take 15 minutes. People stand in line for 45 minutes. We can speed that up so they can get in and back out.

Tranzbyte is up 2,000% since the start of the year, up 577.4% over the past year and down 53.3% over the past five years.

Growlife, Inc Trading Suspension is Scheduled to End as the Company Scrambles to Limit the Fallout. Growlife, which is focused on the specialty hydroponics industry (pretty much code for supplying what is needed to grow pot), was hit be an SEC temporary suspension lasting from at 9:30 am EDT on April 10 until 11:59 pm EDT on April 24. Yesterday, Growlife issued a press release to announce a new shareholder hotline and email communication system to address anticipated increases in shareholder questions over the next several days plus the company posted an open letter to shareholders from its Chairman and CEO, Sterling C. Scott, which stated:

The SEC has informed GrowLife through counsel that it is not the subject of an informal or formal investigation. The SEC has not requested any documents from the company or its Board. Nor have they issued GrowLife any subpoenas or broad requests for information.

It appears, from counsel's discussions with the SEC's staff, that the SEC suspension was prompted by concerns that some 3rd party holder(s) of GrowLife stock may have been planning to engage in some form of manipulative promotional activity. GrowLife does not have any more specific information regarding this matter.

The letter went on to state that the Board of Directors of GrowLife has been actively working with management to establish even higher levels of oversight and checks/balances in place throughout the company. GrowLife is up 253.5% since the start of the year, up 1,109.6% over the past year and down 44.8% over the past five years.

Nine Reasons Sanjay Sanjay Gupta Changed His Mind About Marijuana. Dr. Sanjay Gupta, CNN's chief medical correspondent, has nine reasons and one BIG unstated one for changing his views on pot. The nine stated reasons include: 1) Marijuana laws are not based on science; 2) Marijuana doesn't have a "high potential for abuse"; 3) In some medical cases, marijuana is "the only thing that works," 4) It's safer than a lot of prescription drugs; 5) Seventy-six percent of physicians surveyed would prescribe marijuana to ease the pain of women suffering from breast cancer; 6) It is still nowhere near as bad at drugs like heroin or cocaine, or even booze; 7) The medical and scientific communities have been studying medical marijuana since the 19th Century; 8) Only 6% of research on marijuana published in the last year analyzed benefits; and 9) The system is biased against research into pot. And unstated reason number 10? He or his bosses at CNN have read the polls about marijuana – and then looked at their ratings verses those of Fox and MSNBC…

Thursday, April 24, 2014

BD Fee Disclosures Have â€˜Wide Disparityâ€™: NASAA

A “wide disparity” exists among broker-dealers in how they disclose fees, and BDs are also using “questionable practices” in relation to fee charges and markups, according to a survey released Thursday by the North American Securities Administrators Association.

The state regulators found fee-disclosure documents ranging from one to 45 pages.

The survey, performed by NASAA’s Broker-Dealer Investment Products and Services Project Group, found that while BDs may be complying with “technical requirements” for fee disclosures, the firms’ “disclosures lose effectiveness when hidden in small print, imbedded in lengthy account opening documents, or varied in terminology that does not define the service provided.”

Broker-dealer customers, the survey concluded, “would benefit from greater consistency and transparency in the disclosure of fees,” and thus the group recommended that NASAA establish a task force “to work with industry in standardizing the language, placement and structure of fee disclosures similar to the approach taken in the banking industry.”

The group also recommended that NASAA work with the industry and the Financial Industry Regulatory Authority to adopt “model fee disclosures” that will provide investors with greater consistency and transparency as envisioned in FINRA Rule 2010 and “work with these same parties to holistically review broker-dealer markups to ensure investors are not charged unreasonable fees in violation of NASD Conduct Rule 2430.”

FINRA said in a statement to ThinkAdvisor that as NASAA notes in its survey report, "FINRA has been focused on disclosure of fees in retail brokerage accounts and individual retirement accounts for some time, and issued guidance as recently as last year." In addition, FINRA said that it is "currently in the process of revising its rules on fees and markups," and that "FINRA welcomes the opportunity to continue working on these issues with our fellow regulators to find ways to improve disclosures for investors."

Andrea Seidt, NASAA president and Ohio securities commissioner, noted in a statement that the report “raises concerns regarding the transparency and reasonableness of broker-dealer fee practices.” She added that state regulators “will be examining these issues more closely, but welcome the opportunity to work with industry to ensure that fees are reasonable and fairly disclosed to investors.”

NASAA’s survey was prompted by fines levied by the Connecticut Banking Department’s Securities and Business Investments Division in 2010 and 2011 against several broker-dealers for what were characterized on customer statements as “miscellaneous” charges and postage handling charges. These charges, however, concealed markups or profits for the broker-dealer.

FINRA also took action in 2011 against five broker-dealers for excessive postage and handling charges.

NASAA’s Broker-Dealer Investment Products and Services Project Group decided in the spring of 2012 to conduct its own survey of fee disclosures and types of fees charged by broker-dealers. The group members each surveyed five to nine broker-dealers (small, large, full service and retail) within their region.

While the survey consisted of a number of questions for purposes of its report released Thursday, the Project Group said that it narrowed its focus to two issues: fee disclosures and transfer fees.

The NASAA group provided an example of a BD that charged customers $500 to receive their securities in certificate form. However, the broker-dealer’s clearing firm only charged the BD $60 for the certificate, so the BD was charging a $440 markup, more than six times the certificate cost to the broker-dealer. /* .premium-promo { border: 1px solid #ddd; padding: 10px; margin: 0 10px 10px 0; width: 200px; float: left; } .premium-promo li, .premium-promo ul { list-style-type: none; margin: 0; padding: 0; } .premium-promo li { margin: 0 0 10px; padding: 0 0 10px; border-bottom: 1px dotted #ddd; } .premium-promo h3 { text-transform: uppercase; font-size: 11px; } .premium-promo h4 { font-size: 16px; } .premium-promo a { text-decoration: none !important; } .premium-promo .btn { background: #0069a1; border-radius: 4px; display: inline-block; padding: 5px 10px; clear: both; color: #fff; font-weight: bold; } .premium-promo .btn:hover { background: #034c92; } */ “According to the fee schedule with the clearing firm, the broker-dealer was able to add a customized markup to the certificate fee,” the group states in the report. “This finding prompted the Project Group to contact a clearing firm for a number of the broker-dealers in the survey pool to discern the difference between what the broker-dealer is charged by the clearing firm for various services and the fees that the broker-dealer ultimately charges its customers.”

In the outgoing transfer fee context, the report states that “markups were routinely in the 100% to 280% range.”

The report then cites NASD Conduct Rule 2430, which states that the fees imposed by broker-dealers on customer accounts must be reasonable for the services performed. Fees that are not reasonably related to services, or that are excessive, may violate state laws and FINRA rules.

The report found that initial fees disclosed by the BDs varied. The surveyed broker-dealers provided the fee disclosures on or with account statements, in separate booklets or mailings, on their websites, or in new account agreements. Most of the surveyed BDs presented the fees in a chart format; however, some used a narrative format. The fee disclosures were typically one-to-two pages in length, but in some cases the disclosures were five to seven pages.

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As to disclosing fee changes, most of the surveyed broker-dealers indicated that fee changes are disclosed to customers at least 30 days in advance. The location of the fee change disclosures varied, with the surveyed broker-dealers providing fee changes on or with account statements, in separate mailings, or on their websites.

As to where a client might be able to find fee information, the NASAA group found that disclosures pertaining to fees ranged between a paragraph and seven pages in length. “The actual fee disclosure verbiage itself was sometimes buried within a document having an overall length of between one and 45 pages,” the report states.

Wednesday, April 23, 2014

Sales of Existing U.S. Homes Fall for Third Straight Month

Sales of previously owned homes fell in March for the third consecutive month as rising prices and cold weather discouraged would-be buyers.

Closings, which typically take place a month or two after a contract is signed, fell 0.2% to a 4.59 million annual rate, the lowest level since July 2012, the National Association of Realtors reported today in Washington. The median forecast of 75 economists surveyed by Bloomberg called for sales to slow to a 4.56 million annual rate.

Rising home prices have outpaced wage growth, putting ownership out of reach for some Americans. Mortgage rates, while still near historic lows, have been rising and harsh winter weather in January and February probably prevented would-be new owners from venturing out to look for real estate.

“Sales are showing some lingering effects of the weather,” said Kevin Cummins, an economist at UBS Securities LLC in Stamford, Connecticut. “It’s probably going to take a couple more months until you see a bounce.”

Stocks held earlier gains after the report. The Standard & Poor’s 500 Index climbed 0.4% to 1,879.46 at 10:20 a.m. in New York.

Estimates in the Bloomberg survey ranged from 4.5 million to 4.85 million. February’s pace was unrevised at 4.6 million.

“Sales may be stabilizing,” Lawrence Yun, NAR chief economist, told reporters as the figures were released. “I do expect some spring bounce in the upcoming months.”

Median Price

The median price of an existing home climbed 7.9% from March 2013 to $198,500, today’s report showed.

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At the current sales pace, it would take 5.2 months to sell houses compared with 5 months at the end of February. That still constitutes a “tight” market that favors sellers over buyers, Yun said.

While existing home sales have improved since hitting a low pace of 3.45 million in July 2010, rising interest rates and higher prices have pushed transactions down from a post- recession high of 5.38 million reached in July 2013.

The average rate on a 30-year, fixed mortgage fell to a six-week low of 4.34% in the week ended April 17. A year ago, the rate averaged 3.41%, according to Freddie Mac in McLean, Virginia.

Work began on fewer new homes than forecast in March, Commerce Department data showed last week. Builders also have fewer houses in the pipeline, with the number of permits declining 2.4% last month.

Mortgage Lending

Housing’s slow recovery is being felt by mortgage lenders, many of which have cut staffing. Since the beginning of the year, Bank of America Corp., JPMorgan Chase & Co. and Wells Fargo & Co. have eliminated workers in their mortgage divisions.

At PNC Financial Services Group, loans used to buy homes fell to $1.9 billion in the first quarter compared to $4.2 billion a year earlier, Chief Financial Officer Rob Reilly said. Total revenue for the Pittsburgh-based bank could fall this year in part because of reduced demand for mortgages, he said.

“We announced expense reductions in residential mortgage during the fourth quarter of last year and we have fully captured those savings,” Reilly said on an April 16 earnings call. “In this environment, we will remain focused on disciplined expense management.”

Tuesday, April 22, 2014

China Goes Gaga Over Tesla's Musk

BEIJING (TheStreet) -- Elon Musk is getting more attention than a Korean pop star in China this week, even though his Tesla Motors (TSLA) last year sold only one-tenth of 1 percent as many cars worldwide as Chinese consumers bought.

The buzz in the media and among Chinese stock analysts is all about the fact that Musk's plans for building electric cars and solar-powered charging stations in China match the goals of Beijing, Shanghai and central government officials.

Officials want to cut auto emissions in a country where a record-breaking 22 million vehicles were sold last year. They also want to diversify the economy by promoting so-called "new energy" manufacturers of electric cars, batteries, wind turbines and the like.

Musk pushed all the right buttons by announcing that Tesla would open a research center in China and work with the cities of Beijing and Shanghai to build charging networks. His most welcome announcement was that the U.S. company might start manufacturing cars in China in three years. The buzz began Sunday at the annual Beijing auto show, where Tesla's electric Model S took center stage. It continued Monday when Chen Weihong, the Charlie Rose of state-run CCTV television, interviewed Musk on a nationally broadcast talk show. The American billionaire chatted with Chen about Tesla's IPO, the Paypal business, colonizing Mars, his family and selling cars in China. "China is very important for the future of Tesla's market. We'll make huge investments," Musk said. "Our sales, our services will be customized for the Chinese." "The most important message I want to convey (is that) we believe that China is a very, very important country. We will do a lot of investing in China, to ensure that anyone who buys a car has a very good experience." Musk made another big media splash Tuesday while meeting several buyers of the California-made Model S at a Tesla showroom in Beijing. In a private interview with Hu Shuli, a well-known business magazine editor, he said driving the decision to manufacture in China was the fact that "importing cars into China from California is not reasonable." Indeed, Tesla has cited taxes, trans-Pacific shipping costs and import duties for a Model S sticker price in China that tops the U.S. price by more than $40,000. The buzz was scheduled to continue Wednesday, when Musk was due to appear in Shanghai for more photo ops and handshakes. State media said he planned to meet high-level city government officials while unveiling plans to open the company's China headquarters in the city's Jinqiao district. Meanwhile, stock analysts who've been following Musk are telling investors that Tesla's expansion is likely to open doors for all sorts of electric car-affiliated businesses that trade on the Shenzhen and Shanghai stock markets. Recommended buys this week included lithium-ion battery makers Capchem, Camel and Shanshan. Due to low consumer interest and a lack of charging stations, China's original electric-car company BYD (BYDDY) in recent years has switched its focus to gasoline-powered vehicles. Much more successful in China are companies that make battery-powered motorbikes. At the time of publication, the author held no positions in any of the stocks mentioned. This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

Stock quotes in this article: TSLA, BYDDY

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The boom in the production of shale oil has had an impact on the performance of various oil stocks. It has also led many to wonder why the price of gasoline has remained so high with so much additional supply. While the export of crude oil is highly limited, the export of refined product is not. This has benefited some oil stocks ��including refiners Tesoro (NYSE: TSO ) and Valero (NYSE: VLO ) -- more than others.

In the following video, Fool.com contributor Doug Ehrman discusses how a change in U.S. policy on the export of crude could benefit certain oil stocks such as Exxon Mobil (NYSE: XOM ) and Chevron (NYSE: CVX ) .

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Best Forestry Companies To Buy For 2015: GreenHaven Continuous Commodity Index Master Fund (GCC)

GreenHaven Continuous Commodity Index Fund (the Fund), incorporated on October 27, 2006, is a statutory trust. The investment objective of the Fund and The GreenHaven Continuous Commodity Index Master Fund (the Master Fund) is to reflect the performance of the Index, over time, less the expenses of the operations of the Fund and the Master Fund. The Master Fund is a wholly owned subsidiary of the Fund and the Managing Owner. CSC Trust Company (the Trustee) is the sole trustee of the Fund and the Master Fund.

The Master Fund issues common units of beneficial interest, or Master Fund Units, which represent units of fractional undivided beneficial interest in and ownership of the Master Fund. The Fund invests substantially all of its assets in the Master Fund in a master-feeder structure. The Fund holds no investment assets other than Master Fund Units.

Advisors' Opinion:

[By Richard Stavros]
GreenHaven Continuous Commodity Index (GCC) is an exchange-traded fund that aims to track the Equal Weight Continuous Commodity Total Return Index (CCI-TR), which provides exposure to diversified commodities. The index is up 4.75% year-to-date, and up 24.63% over the last five years.
[By Richard Stavros]
Whereas in the 1970s there were limited ways to hedge against inflation, now there is a cornucopia of currency and international commodities instruments that can not only hedge against inflation but other global shocks, such as market bubbles and even war.

And it is these very scenarios that investors have been worried about. Since the beginning of the year, stocks, bonds and just about any investment you can think of have gyrated wildly at various times amid concerns of war, inflation and the possibility that the U.S. equity market is overvalued and headed for a correction.

In response, some market analysts in Bloomberg news reports have offered any number of wildly unsubstantiated statements for why investors should ignore today’s perils. They dismiss the danger posed by Russia�� annexation of Ukraine�� Crimea region (��utin will stop short of other countries or war with the West��. They also argue that the Federal Reserve chairwoman misspoke (��anet Yellen really didn�� mean a rate hike is coming soon. Inflation is under control. It was a rookie mistake��.

For my money, here’s the most outrageous: The Shiller Cyclically adjusted P/E metric which has predicted the 1929, 2000 and 2007 downturns doesn�� apply (��uggests only a slightly expensive market with low to moderate returns going forward on average��.

With new records being set by the S&P 500 in the last few months, it stands to reason that some investors have not needed much convincing to stay all in and buying. This mindset has prevailed, even as the impact of a Russian war or conflict, runaway inflation or a market correction could be devastating to investor portfolios, taking years to recover.

If you��e never thought of certain investments as “insurance,” it�� time to start now. Protecting wealth is as important as building wealth. And as previously mentioned, we have found that the Inflation Survival Letter�� Thri

Best Forestry Companies To Buy For 2015: Assured Guaranty Ltd(AGO)

Assured Guaranty Ltd., through its subsidiaries, provides credit protection products to public finance, infrastructure, and structured finance markets in the United States and internationally. The company offers insurance, reinsurance, and credit derivative products that protect holders of debt instruments and other monetary obligations from defaults in scheduled payments, including scheduled interest and principal payments. It provides policies issued directly to the holders of insured obligations at time of issuance and those issued in the secondary market; and assumed reinsurance contracts written to third parties. The company insures various types of securities, including taxable and tax-exempt obligations issued by the United States or municipal governmental authorities, utility districts, or facilities; notes or bonds issued to finance international infrastructure projects; and asset-backed securities issued by special purpose entities. Assured Guaranty Ltd. markets its credit protection products directly to issuers and underwriters of public finance, infrastructure, and structured finance securities, as well as to investors in such debt obligations. The company was founded in 2003 and is based in Hamilton, Bermuda.

Advisors' Opinion:

[By Eric Volkman]
Assured Guaranty (NYSE: AGO ) is attempting two well-tried moves to keep shareholders happy. The first is a quarterly dividend distribution amounting to $0.10 per share of its stock, to be handed out on June 5 to shareholders of record as of May 22. That amount matches Assured Guaranty's previous disbursement, which was paid in March.

Top 10 Small Cap Stocks To Watch Right Now: BRF SA (BRFS)

BRF - Brasil Foods S.A. (BRF), incorporated on August 18, 1934, is a food company, which focuses on the production and sale of poultry, pork, beef cuts, milk, dairy products and processed food products under several brands. The Company�� processed products include marinated, frozen, whole and cut Chester rooster and turkey meats, specialty meats, frozen processed meats, frozen prepared entrees, portioned products and sliced products. It also sells margarine, juices, soy products, animal feed, fresh pasta, sweet specialties and sandwiches. During the year ended December 31, 2010, it launched 333 new products, including Meu Menu (My Menu) portfolio, which is targeted at single people.

Poultry

The Company produces frozen whole and cut poultries, partridges and quail. During 2010, it sold 1,895 thousand tons of frozen chicken and other poultry products. During 2010, it produced 1,694 million day-old chicks, including chickens, Chester roosters, turkeys, partridge and quail. It hatches these eggs in its 25 hatcheries. As of December 31, 2010, it had a fully automated slaughtering capacity of 31.2 million heads of poultry per week.

Pork and Beef

The Company produces frozen pork and beef cuts, such as loins and ribs, and whole carcasses. During 2010, it sold 427 thousand tons of pork and beef cuts. Iits sales of pork cuts are to its export markets. As of December 31, 2010, it had a beef slaughtering capacity of 1,797 heads per week.

Milk

The Company produces pasteurized and ultra-high temperature (UHT) milk, which it sells in its domestic market. During 2010, it sold 873 thousand tons of pasteurized and UHT milk. It produces dairy products in 15 plants. It receives milk from a network of over 11,000 milk producers in more than 553 cities.

Processed Food Products

The Company produces processed foods, such as marinated, frozen chicken, Chester rooster and turkey meat, specialty meats, frozen processed foo! ds, frozen prepared entrees, dairy products, portioned products and sliced products. During 2010, it sold 2,472 thousand tons of processed foods. It processes pork to produce specialty meats, such as sausages, ham products, bologna, frankfurters, salamis, bacon and cold meats. It also processes chicken and other poultry to produce specialty meats, such as chicken sausages, chicken hot dogs and chicken bologna. It produces a range of frozen processed poultry, beef and pork products, including hamburgers, steaks, breaded meat products, kibes, meatballs and ready-to-eat snacks. It also produces soy-based vegetarian products, such as hamburgers and breaded products. It produces marinated and seasoned chickens, roosters and turkeys.

The Company produces several varieties of lasagna and pizza. It produces the meat used in these products and buys other raw materials in the domestic market, except for the durum flour used to make the noodles for the lasagna, which it imports. It sells a range of frozen vegetables, such as broccoli, cauliflower, peas, French beans, French fries and cassava fries, through its Escolha Saudavel line of products. It produces a range of pies and pastries, such as chicken and heart-of-palm pies and lime pies. It produces the meat, sauces and toppings used in its pies and pastries, and it purchases other raw materials, such as heart-of-palm, lime and other fillings from third parties.

Other

The Company produces animal feed mainly to feed poultry and hogs raised by it. It also sells a portion of its animal feed production to its integrated outgrowers or to unaffiliated customers. It produces a range of soy-based products, including soy meal and refined soy flour.

The Company competes with Sadia, Aurora, Marfig, Danone, Nestle, Paulista, Frangosul, Plamplona and Aurora.

Advisors' Opinion:

[By Jon C. Ogg]
BRF S.A. (NYSE: BRFS) should be safe on the surface as a meat-producing and dairy giant. Apparently being defensive doesn’t help either. At $18.50, its 52-week range is $18.34 to $26.35. This ADR is down just over 10% so far in 2014.

Best Forestry Companies To Buy For 2015: Cerus Corporation(CERS)

Cerus Corporation, a biomedical products company, engages in the development and commercialization of the INTERCEPT Blood System. The company?s INTERCEPT system is designed to inactivate blood-borne pathogens in donated blood components intended for transfusion. It markets the INTERCEPT system for platelets and plasma primarily in Europe, the Russian Federation, and the Middle East. The company is also developing INTERCEPT Blood System for red blood cells or red blood cell system, which is designed to inactivate blood-borne pathogens in donated red blood cells for transfusion. Cerus Corporation has collaboration agreements with Baxter International, Inc.; and BioOne Corporation, as well as the United States Armed Forces. The company was founded in 1991 and is based in Concord, California.

Advisors' Opinion:

[By Seth Jayson]
Cerus (Nasdaq: CERS ) is expected to report Q1 earnings on April 30. Here's what Wall Street wants to see:

The 10-second takeaway
Comparing the upcoming quarter to the prior-year quarter, average analyst estimates predict Cerus's revenues will expand 15.0% and EPS will remain in the red.

Best Forestry Companies To Buy For 2015: Kaiser Aluminum Corp (KALU)

Kaiser Aluminum Corporation, incorporated on February 20, 1987, is engaged in the production of semi-fabricated specialty aluminum products. As of December 31, 2012, the Company operated 11 focused production facilities in the United States and one in Canada. The Company operates in fabricated products business segment. In addition to the Fabricated Products segment, it has two business units, Secondary Aluminum and Corporate and Other. The Secondary Aluminum business unit sells value added products, such as ingot and billet, produced by Anglesey Aluminium Limited, in which it has a 49% equity investment and which owns and operates a secondary aluminum remelt and casting facility in Holyhead, Wales. Its Corporate and Other business unit provides general and administrative support for its operations. Through its 12 focused production facilities in North America, it manufactures rolled, extruded, and drawn aluminum products to serve four market applications: aerospace and high strength products (Aero/HS products), general engineering products (GE products), extrusions for automotive applications (Automotive Extrusions), and other industrial products (Other products).

The Company�� Fabricated Products segment produces rolled, extruded, and drawn aluminum products used principally for aerospace and defense, automotive, consumer durables, electronics, electrical, and machinery and equipment applications. During the year ended December 31, 2012, its North American manufacturing facilities produced and shipped approximately 585.9 million pounds of fabricated aluminum products. The Company�� Aero/HS products include heat treat plate and sheet, as well as cold finish bar, seamless drawn tube, hard alloy extrusions, and billet that are manufactured to demanding specifications for the global aerospace and defense industries. It makes aluminum plate, sheet, extruded shapes, and tube for aerospace applications, and it manufactures a variety of specialized rod and bar products that are incorporated! in diverse applications.

The Company�� GE products are standard catalog items sold to metal distributors. Its GE products consist of 6000-series alloy rod, bar, tube, wire, sheet, plate and standard extrusions. The 6000-series alloy is an extrudable medium-strength alloy that is heat treatable and extremely versatile. The Company�� GE products have a range of uses and applications, many of which involve further fabrication of these products for numerous transportation and other industrial end market applications where machining of plate, rod and bar is intensive. The Company�� products are used in the enhancement and production of military vehicles, semiconductor manufacturing cells, numerous electronic devices, after-market motor sport parts and tooling plate. Its rod and bar products are manufactured into rivets, nails, screws, bolts and parts of machinery and equipment.

Automotive products consist of extruded aluminum products for many North American automotive applications. The variety of extruded products that the Company supplies to the automotive industry include extruded products for bumper systems, anti-lock braking systems and structural components and drawn tube for drive shafts. For some Automotive Extrusions, it performs limited fabrication, including sawing and cutting to length. Other products consist of extruded, drawn, and cast aluminum products for a variety of North American industrial end uses, including consumer durables, electrical/electronic, machinery and equipment, light truck, heavy truck and truck trailer applications.

The Company competes with Alcoa Inc., Constellium, SAPA, and Norsk Hydro ASA.

Advisors' Opinion:

[By Lee Jackson]
Kaiser Aluminum Corp. (NASDAQ: KALU) is the only aluminum stock to make the cut at Merrill Lynch. The company offers investors a play on the growing demand for aluminum in the aerospace and automotive industries, but without exposure to the volatile (and now declining) price of aluminum. The aerospace and automotive industries are in cyclical uptrends and the amount of aluminum that goes into airplanes and cars is increasing. The Merrill Lynch price objective is at $75, and the consensus target is slightly higher at $78. Investors receive a 1.7% dividend.
[By Ben Levisohn]
Shares of Alcoa have dropped 3.3% to $7.90 today at 9:30 a.m. The downgrade has also hit other aluminum producers this morning. Alumina (AWC) has fallen 1.1% to $3.73, Kaiser Aluminum (KALU) has declined 0.7% to $71.17, and BHP Billiton (BHP), of which aluminum is but a small piece, is off 0.3% at $66.22.
[By David Smith]
Conversely, smaller Kaiser Aluminum (NASDAQ: KALU ) produces more specialty products, is close to being debt free, and generates an operating margin nearly four times that of Alcoa. Further, the California-based company has been accorded a consensus buy rating by the analysts who follow it, against a hold for Alcoa.
[By Lauren Pollock]
Kaiser Aluminum Corp.'s(KALU) board raised the quarterly dividend by 17% and also authorized an additional $75 million in stock buybacks.

Linear Technology Corp.'s(LLTC) fiscal second-quarter profit climbed 18% as the chip manufacturer reported higher sales and gross margins.

Best Forestry Companies To Buy For 2015: Full House Resorts Inc.(FLL)

Full House Resorts, Inc., together with its subsidiaries, develops, manages, invests in, and owns gaming-related enterprises. The company holds interest in Gaming Entertainment (Delaware), LLC, a joint venture with Harrington Raceway, Inc., which has a management contract with Harrington Raceway and Casino that has approximately 1,800 slot machines and 40 table games, a 450-seat buffet, a dining restaurant, a 50-seat diner, and an entertainment lounge area located in Harrington, Delaware. It also owns and operates Stockman?s Casino, which has approximately 264 slot machines, 4 table games, and keno, as well as a bar, a dining restaurant, and a coffee shop situated in Fallon, Nevada. In addition, the company holds interests in Gaming Entertainment Michigan, LLC that has a joint venture with RAM Entertainment, LLC, which has a management agreement with the Nottawaseppi Huron Band of Potawatomi Indians for the development and management of the FireKeepers Casino in Battle Cre ek, Michigan. Full House Resorts, Inc. was founded in 1987 and is based in Las Vegas, Nevada.

Advisors' Opinion:

[By Monica Gerson]
Full House Resorts (NASDAQ: FLL) is estimated to post a Q4 loss at $0.06 per share on revenue of $33.24 million.

Urban Outfitters (NASDAQ: URBN) is expected to post its Q4 earnings at $0.55 per share on revenue of $927.86 million.

Best Forestry Companies To Buy For 2015: iShares U.S. Aerospace & Defense ETF (ITA)

iShares Dow Jones U.S. Aerospace & Defense Index Fund (the Fund) seeks investment results that correspond generally to the price and yield performance of the Dow Jones U.S. Select Aerospace & Defense Index (the Index). The Index measures the performance of the aerospace and defense sector of the United States equity market. Aerospace companies include manufacturers, assemblers and distributors of aircraft and aircraft parts. Defense companies include producers of components and equipment for the defense industry, such as military aircraft, radar equipment and weapons.

The Fund will concentrate its investments in a particular industry or group of industries to approximately the same extent as the Index is so concentrated. Since all of the securities included in the Index are issued by companies in the aerospace and defense sector, the Fund will be concentrated in the aerospace and defense industry. The Fund�� investment advisor is Barclays Global Fund Advisors.

Advisors' Opinion:

[By Mark Salzinger]
This industry's two largest ETFs��Shares Aerospace and Defense (ITA) and PowerShares Aerospace and Defense (PPA)��ained more than 50% last year.

Best Forestry Companies To Buy For 2015: Schnitzer Steel Industries Inc.(SCHN)

Schnitzer Steel Industries, Inc. engages in recycling ferrous and nonferrous scrap metals, and used and salvaged vehicles; and manufacturing finished steel products. The company operates through three segments: Metals Recycling Business (MRB), Auto Parts Business (APB), and Steel Manufacturing Business (SMB). The MRB segment involves in the purchase, collection, processing, recycling, sale, and broking of ferrous scrap metals. It processes mixed and large pieces of scrap metal into smaller pieces by sorting, shearing, shredding, and torching. This segment?s products include ferrous products, including ferrous scrap metal, a feedstock used in the production of finished steel products; and nonferrous scrap metals, including aluminum, copper, stainless steel, nickel, brass, titanium, lead, high temperature alloys, and joint products, such as zorba (mixed nonferrous material) and zurik (stainless steel). The MRB segment sells its products to steel mills and smelters. The APB segment purchases used and salvaged vehicles and sells serviceable used auto parts from these vehicles through its 45 self-service auto parts stores, which are located across the United States and western Canada. It also sells other vehicles, including auto bodies; cores, such as engines, transmissions, alternators, and catalytic converters; and nonferrous materials to metal recyclers. The SMB segment engages in the purchase of recycled metal, and processing of the recycled metal and other raw materials into finished steel products. Its product portfolio comprises semi-finished goods and finished goods consisting of rebar, coiled rebar, wire rod, merchant bar, and other specialty products. This segment serves steel service centers, construction industry subcontractors, steel fabricators, wire drawers, and farm and wood product suppliers. The company exports its products worldwide. Schnitzer Steel Industries, Inc. was founded in 1946 and is based in Portland, Oregon.

Advisors' Opinion:

[By Rich Smith]
So what's going on with Steel Dynamics? Basically, it's exactly what I warned you about last month, after reviewing the disturbing news of weak demand for steel in China, revealed by Schnitzer Steel (NASDAQ: SCHN ) in its earnings report. Steel Dynamics is hitting headwinds all around the globe:
[By Rich Smith]
You see, there are two main dynamics at play for companies like Nucor and Steel Dynamics, which rely on supplies of scrap steel to smelt their new steel. Scrap steel specialist Schnitzer Steel (NASDAQ: SCHN ) is also suffering from weak profits, which is bad news for it, but could be good news for Nucor, which views scrap steel as an input cost. Nucor says that "average scrap and scrap substitute cost per ton used in the second quarter of 2013 was $377 ... a decrease of 12% from $427 in the second quarter of 2012."
[By Rich Smith]
If you want to know what the future holds for global steel giants like Arcelor Mittal (NYSE: MT ) , U.S. Steel (NYSE: X ) , and Nucor (NYSE: NUE ) , one of the best ways you can spend your time, I suspect, is by reviewing the earnings reports of another company entirely -- Schnitzer Steel (NASDAQ: SCHN ) .

Monday, April 21, 2014

Apple Draws Closer to Microsoft, but Google Leaves Both in the Dust

Surprise, surprise!

Gartner's latest forecast points to continued pain for the PC industry. Including "ultramobiles," which the firm defines as Google (NASDAQ: GOOG ) Chromebooks, PC Ultrabooks, or hybrid convertible devices running Microsoft (NASDAQ: MSFT ) Windows 8, worldwide "PC" shipments are expected to decline by 7.3% in 2013, but should post a 1% gain in 2014. To achieve growth in 2014, ultramobile shipments are expected to grow by 96.2% and traditional desk-based and notebooks PCs should decline by another 5.2%. In other words, the appetite for highly portable PCs is expected to be robust, but will come at the expense of more "clunky" PC designs.

Once also taking into account for smartphones and tablets, the entire computing device outlook looks promising. Combined, worldwide computing device shipments are expected to grow by 5.9% this year and by another 6.7% by the end of 2014 as the world continues to embrace the mobile computing revolution.

Mr. Softy blues
Perhaps the most surprising development out of this forecast is how Apple (NASDAQ: AAPL ) and Microsoft are expected to be neck and neck in terms of device shipments by the end of 2014. At that time, it's expected that Apple will have shipped a combined 354.9 million iOS and Mac devices and Microsoft will account for 378.1 million devices that run Windows. The storyline is all too familiar: Microsoft continues to lose its computing dominance to players that have more effectively addressed the worldwide shift to mobile computing.

Units matter
As exciting as it is for Apple to have the opportunity to surpass archenemy Microsoft, it's a small victory in the grand scheme of things. Let's not forget we live in a world where over 2 billion computing devices ship on a worldwide basis each year. Guess which company is claiming the biggest stake? Google.

Gartner expects Google Android will ship on over 866 million devices this year and well over a billion devices by the end of 2014. Naysayers will immediately dismiss Google Android since Apple "controls the majority of smartphone profits." If you fall into this camp, please be reminded that Android expands the usage of Google's lucrative search business. Last October, Google CEO Larry Page announced that mobile has become an $8 billion a year business, which represented an increase of 220% from the previous year. Considering the continued growth of Android devices since October, it's all but certain mobile is worth even more to Google. Additionally, Google makes money regardless of ecosystem or form factor, provided users continue utilizing Google Search.

The bigger picture
With over 2 billion computing devices being shipped throughout the world each year, it's become clear that computing devices have become commoditized. As a result, investors have grown unwilling to pay a premium for companies that primarily sell computing devices. It might explain, in part, why Apple trades with a single-digit P/E ratio. For sentiments to change, Apple will have to regain the faith of investors by showing them that its brand and devices aren't just a commodity.

And then there's Google, which is a more of a "pick and axe" investment that benefits from the mobile computing revolution regardless of which device or ecosystem strikes it rich. Consequently, investors are comfortable with Google trading at 41% premium to the S&P 500.

Based on price alone, I think Mr. Market has already crowned Google king.

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Sunday, April 20, 2014

Could Renewable Energy Lead to a 51st State?

North Dakota, South Dakota. North Carolina, South Carolina. For heaven's sake -- the North and the South. Americans sure do seem to like splitting up their states, and out in Colorado, some folks are talking about doing it again.

The reason some Coloradans want to split up their state is as old as America itself -- a distant government coming up with grand plans that it thinks are pretty keen, and telling the locals to pay for them.

According to news reports, there are at least three big reasons some residents of Colorado's Weld, Morgan, Logan, Sedgwick, Phillips, Washington, Yuma, and Kit Carson counties are considering leaving the fold. Some complain of new laws that would regulate how farmers raise their livestock. Others cite tightened state gun-control requirements in the wake of last year's Aurora shooting. But the one thing that really seems to be putting a burr under folks' saddles is a law just passed, that requires rural electric cooperatives in the state (the would-be seceders are predominantly rural communities) to get 20% of their power from "renewable resources" by 2020.

Dubbed the "Setting Renewable Energy Standards for Rural Colorado" law, this would double the previous target for renewables. According to local Weld County paper The Greely Tribune, it could cost consumers in the affected counties as much as $3 billion in higher electric bills.

Schadenfreude's in season
Not everyone's opposed to the law, necessarily. For example, Xcel Energy (NYSE: XEL ) is already working to expand its portfolio of wind-generated power in the state, and two years ago, it put into operation a 19-megawatt solar farm in cooperation with SunPower (NASDAQ: SPWR ) . As a so-called "investor-owned utility," Xcel is already subject to a target of 30% renewables use by 2020 -- so a law making its rural rivals hit a 20% target probably didn't upset Xcel all that much.

But Republican lawmakers in the state beg to differ. State Sen. Greg Brophy, for example, called the law "callous" and criticized it for imposing as much as a 2% annual increase in electricity rates upon rural taxpayers. "Utility bills will now increase on the very people who can least afford it," said the senator.

Republican Rep. Cory Gardner of Yuma, Colo., echoed the sentiment: "The people of rural Colorado are mad, and they have every right to be. ... I don't blame people one bit for feeling attacked and unrepresented by the leaders in our state."

"The stupidest thing I've seen in a long time."
But isn't talk of secession a bit of an overreaction? Especially when you consider that by capping electric rate increases at 2%, the law's basically saying rate payers can expect their average monthly electric bill to rise from $68.32 all the way up to ... $69.69? Larimer County Commissioner Steve Johnson isn't convinced. (Actually, his exact words were: "This is the stupidest thing I've seen in a long time. ... It's hard to believe that this isn't the dumbest thing I've heard of, certainly for this year.")

In at least one sense, he seems right. Getting permission to secede from a state isn't the easiest thing in the world to accomplish. First, county officials would have to get voter support to put the matter on the November ballot. Then, even if the voters of one or more counties agreed they'd like to secede, Colorado's legislature -- those are the folks who passed the laws everyone in the north is complaining about -- would have to approve secession. Then the U.S. Congress would have to agree to let them go as well, because according to Article 4 of the U.S. Constitution, creation of a new state, which would be America's 51st, requires "the Consent of the Legislatures of the States concerned as well as of the Congress."

In short, smart or stupid, forming a new state of North Colorado will be a thing easier said than done.

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Hot Gas Utility Stocks To Invest In Right Now

Saturday, April 19, 2014

Porn Crackdown Gives Weibo More to Cheer

Top 5 Income Stocks To Watch Right Now

BEIJING (TheStreet) -- China's cyberspace nannies handed Weibo (WB) an unintentional gift in the form of a pornography crackdown Friday, one day after the mainland's Twitter-like (TWTR) service debuted on Nasdaq.

Weibo postings jumped thanks to a thread debating the pros and cons of the latest campaign against online lewdness launched by the government's Ministry of Public Security.

The handle #扫黄打非净网2014# -- which means "eliminate pornography and illegal publications, clean Internet 2014" -- drew so many posts that it was the top trending topic all day and well into the evening. Parents voiced support, romance writers complained.

The forum pointed to a Weibo strength as an authoritative outlet for government, company, police, celebrity and public service announcements. Most seekers of fast access to a nationwide audience use Weibo first, state media second. It also highlighted two weaknesses: Chinese government censorship that's at the heart of the anti-porn campaign, and Weibo's reliance on hot news topics that stir emotions but steer clear of anything that might upset censors. Sina works with police and is not shy about closing Weibo accounts that "spread rumors," a crime that can be subject to case-by-case interpretation. Moreover, Weibo users are invited to rat on suspected violators. Meanwhile, Weibo benefits from compelling but safe topics that spark comments and threads. In a report Friday about Weibo's IPO, the Chinese business magazine Caijing said postings linked to news about a Malaysia Airlines flight's disappearance were a key reason for a 9% month-on-month jump in average daily Weibo users in March. The rise to 67 million users a day was "closely related to Malaysia Airlines (news) and other big events," the report said. News about the airliner search, which is continuing, fueled Weibo activity for weeks after the March 8 disappearance of the flight from Kuala Lumpur to Beijing with 153 mainlanders on board. On top of Weibo's weaknesses, which indeed affect every media business in China, the online service and its parent Sina (SINA) have ample competition in the race for online communicators. Rivals include popular services run by Tencent such as QQ, Tencent Weibo and Weixin, also known as WeChat. Although the government blocks Twitter, some mainlanders use VPNs to access it anyway. Chinese also communicate online through Microsoft (MSFT) services Skype and MSN Messenger, which was killed in other parts of the world but still lives in China, and various smartphone apps. So far, must-have information and compelling forum topics have helped Weibo ride high in this sea of communication options, and amid information restrictions. Now, to keep stock investors happy, it will have to keep the ball rolling. That may be difficult at times, as shown by Friday's Weibo activity. Trending topics ranked below the porn crackdown late Friday were, in descending order, the death of author Gabriel Garcia Marquez, news about the Weibo IPO, and a thread answering the question, "What's your favorite food from your hometown?" At the time of publication, the author held no positions in any of the stocks mentioned. This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

Stock quotes in this article: WB, TWTR, SINA, MSFT

Thursday, April 17, 2014

Here's Why Investing in Seagate Is a Bad Idea

Data storage player Seagate Technology (NASDAQ: STX ) has had a rough go this year. The company is losing market share to rival Western Digital (NASDAQ: WDC ) , and its financial performance is also on the decline. Seagate's revenue and profit were down in the second quarter on a year-over-year basis, so it's not astonishing to see that the company's shares have taken a beating in 2014.

Seagate's prospects don't look appealing right now as it's seeing weak sales of higher-margin disk drives to enterprise customers and is incurring higher operating expenses. Further, the weakness in the PC market is another concern for the company's hard-drive business.

Exploring other options
Seagate is looking to explore other areas to make up for a weak PC market. The company is focusing on products for mobile devices and servers. In addition, Seagate is focusing on strategic acquisitions. Hence, it acquired Xyratex, which is a leading provider of storage data technology. With this acquisition, Seagate has enhanced its vertically integrated supply and manufacturing chain for disk drives. Also, the acquisition enables Seagate to expand its portfolio through Xyratex's industry-leading enterprise data storage systems and high-performance computing businesses.

Seagate is also focusing on restructuring its product portfolio in order to align its offerings with the emerging trends in mobility, cloud, and open-source computing. The company has launched its Kinetic platform, and is expanding its portfolio of high capacity drives with a six-disk, six-terabyte drive. Looking ahead, because Seagate expects its addressable market to grow, these moves will help it in strengthening its position.

It looks like Seagate's moves are already becoming effective. The company is seeing good response in mobile as its five-millimeter drives are being sold by multiple tablet manufacturers. In addition, Seagate is also focusing on product innovation. The company expects its latest shingled magnetic recording, or SMR, technology to break density barriers in hard drives and add 25% more capacity to traditional drives. The introduction of higher-capacity hard drives can help Seagate win over more customers in the server and enterprise market due to the low cost of storage.

Seagate is also looking to deepen customer engagement going forward by providing them with more services. Also, due to the increasing demand for large-capacity drives, Seagate is working on adding more value to its product portfolio and winning more customers in enterprise information technology functions.

Difficult to get ahead of Western Digital
However, Seagate's rival Western Digital is already on the forefront in the enterprise-storage department. Western Digital has bolstered its enterprise segment through acquisitions such as Virident and sTec. The company spent close to $1 billion on these acquisitions last year, and they have started yielding solid results.

Western Digital's revenue was up almost 4% in the last quarter, and its earnings increased 29%. More importantly, Western Digital's enterprise revenue outpaced the industry's average in the last quarter, according to management. The company's acquisitions have given it a stronger base than Seagate to tap this market. For example, the sTec acquisition brought over 100 SSD-related patents into Western Digital's fold. On the other hand, Seagate struggled due to lower sales to enterprise customers.

Bottom line
Seagate has been struggling, while rival HDD maker Western Digital has been gaining market share. Both companies used to command an identical share of the market, but Western Digital has inched ahead with a 45% share as compared to Seagate's 40%. Moreover, Western Digital has a stronger cash position when compared to Seagate, which should allow it more freedom to make more acquisitions and ramp up product development.

Seagate may continue losing share in the storage market. This is the reason why investors should stay away from it.

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Wednesday, April 16, 2014

3 Defensive Stocks That Could Prove To Be Winners

There are certain investment-related quotes that appear when markets are at extreme levels. For instance, the classic "buy when blood is running in the streets" (Rockefeller) is a useful reminder that a vast proportion of profit is made when shares are bought (at a very low price) rather than when they are sold. Similarly, Warren Buffett's quote "you only find out who's swimming naked when the tide goes out" is a useful reminder that taking high levels of risk at the wrong time can be very costly.

So, with the S&P 500 still within touching distance of its all-time highs and the Federal Reserve beginning the tapering of its monthly asset repurchase program, could now be a good time take some risk off the table and instead reallocate capital to lower beta, higher yielding, defensive plays?

Tobacco Stocks Could Add Value
Tobacco stocks benefit from fairly stable demand for their products. Whether the US and global economy is in a boom or a recession, people still smoke, with a switch to a lower/higher price point brand (depending on the state of the economy) more likely than giving up the habit as a result of less disposable income. Due to this, tobacco companies tend to offer lower betas and a more secure dividend payment than many of their index peers. Both of these attributes could prove vital during a market correction or bear market.

Here are three tobacco stocks that could fit the bill in terms of betas, yields and defensive attributes.

Altria
Put simply, Altria (NYSE: MO ) provides superb defensive qualities. For instance, its beta is currently just 0.4, which means that a 10% decline in the index level should equate to a decrease of just 4% in Altria's stock, with the same being true of gains, should the market continue to make higher highs. This low beta means that Altria could reduce portfolio volatility going forward.

Meanwhile, Altria's yield of 4.9% is vastly higher than that of the index (the S&P 500's yield is just 2%), and this could prove useful in times of market corrections when 'cash is king.' In other words, it could provide a stable income with which to invest when index levels are low. In turn, this could provide higher profits in the long run, as shares in quality companies can be purchased at distressed prices (when blood is running in the streets).

Philip Morris
The 4.4% yield offered by Philip Morris (NYSE: PM ) is well-covered at 1.5x, which seems to be very sensible and shows that the company is not over-extending itself when it comes to payments to shareholders. This makes the income from the stock even more sustainable and highlights its potential as a sound defensive play.

The price for a great yield and defensive business model, though, is not excessive. With the S&P 500 trading at a forward price to earnings (P/E) ratio of 15.4, Philip Morris appears to offer good value for money at current levels, since its forward P/E is 15. Although higher than Altria's forward P/E of 13.9, it is still relatively good value when compared to the index and shows that there are still potential buying opportunities in this market.

Reynolds
When it comes to low betas, Reynolds (NYSE: RAI ) is the clear leader of the three stocks. Its beta is just 0.3, which means that it could offer a lower volatility of returns than many of its index peers and could outperform the wider index during a market correction. Furthermore, Reynolds' yield of 4.7% compares well with its two tobacco peers and provides investors with an income at a time when the interest rates on savings accounts are extremely low.

As for its P/E, although it's higher than Altria's, Reynolds' forward P/E of 14.9 is less than that of Philip Morris. It is also less than the S&P 500's and shows that all three stocks offer good relative value when compared to the index.

In addition, Reynolds' payout ratio of 79% is not particularly excessive for a company that has operated in a mature industry for a long time and appears to strike a balance between reinvestment within the company and the provision of an income for shareholders. In fact, the dividends for all three companies appears to be sustainable, which only adds to their attraction as defensive plays.

The Future Is Unknown
Of course, the S&P 500 may make fresh highs and not take back the gains it has made since the Federal Reserve's monthly asset repurchase program commenced. If, on the other hand, it does go through a tough period, Altria, Reynolds and Philip Morris could help you to overcome the lows and instead take advantage of a more attractive price level in the wider index so you're set up well for the eventual highs.

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Tuesday, April 15, 2014

Attention retirees: You can still have fun….

Some retirees are coming up with creative, inexpensive activities so their golden years are rich in experiences.

Take Bob Allnutt of Bethesda, Md., 78, who formed a group of retirees who visit culture sites each month. Or Judy Korotkin, 87, of New York City who writes poetry. Or Nelson Cooney 75, of Bethesda, Md., who did yoga to increase his flexibility.

Allnutt, who retired 19 years ago, spent the first few years of his retirement volunteering, playing tennis and participating in church groups. Then he decided to form a group of five retirees who visit different sites once a month and have a meal together afterward.

Over the past 10 years or so, Allnutt and friends have visited more than 100 places including museums, art exhibits, historic homes, national parks, military academies, gardens, race tracks and baseball stadiums. Most of the time the places were free or inexpensive. One time they traveled to the Gettysburg (Pa.) National Military Park and rode Segways around the battlefield. "None of us had done it before. We were glad to survive that," says Allnutt, an attorney who retired in 1995 from his job as the executive vice president for a pharmaceutical trade group.

Fear of boredom in retirement weighs heavily on pre-retirees' minds. About 58% of workers, 60 and older, say they are currently delaying retirement, according a recent survey conducted for CareerBuilder. Most said they needed to continue to work for financial reasons and benefits or they loved their jobs and enjoy their work, but 27% said they are afraid retirement will be boring.

"A lot of people fear retirement," Allnutt says. "They think they are going to be bored. But you don't just quit working and sleep in. You can do the things you always wanted to do and didn't have the time for. I felt I was born to be retired. I knew there were a lot of things to do besides working."

To come with novel activities in retirement "you have to be open to possibilities or planned happenstance – things that cr! oss your path that you can take advantage of," says Nancy Schlossberg, 84, author of Revitalizing Retirement. She has interviewed more than 150 retirees and conducted several focus groups with retirees.

You never know what chance occurrence will trigger a new idea or life direction, Schlossberg says. When you are heavily involved in your work, you may not be open to try new ideas, but as a retiree you can and should be, she says.

When she was writing her book, she interviewed men who were participating in the ROMEO (Retired Old Men Eating Out) club, and women in the Red Hat Society, a group that encourages friendship and fun, she says.

When looking for creative ideas, think about your regrets and figure out whether there is any way to turn those into something you've always wanted to do, Schlossberg says. If you can't do the whole thing, maybe you can have a piece of the dream.

For many people trying something new means overcoming their fear of failure, says Barbara Hannah Grufferman, 57, a contributing writer for AARP and author of The Best of Everything After 50. "Creativity needs to come out, and the only way it can blossom is to be fearless."

Grufferman is already making a list of things to do in retirement. "I love to sing and would like to start a chorus for people over 50 and make it a nationwide network."

Docent Felice Cohen gives a tour to Herry Cattell, Nelson Cooney and Bob Allnutt during their small group's monthly cultural outing in Washington.(Photo: Melissa Golden for USA TODAY)

She's a "big believer that the more we challenge our brains, the more we can keep Alzheimer's at bay." So with that in mind, "I want to nail on the piano some of Beethoven's more complicated p! ieces. Wi! ll I ever do it? I don't know but I'm willing to try."

Some retirees add a new twist to a lifelong skill.

During her professional career, Judy Korotkin wrote several off-Broadway plays, several screenplays that were purchased as options for TV movies as well as a novel that was published as a paperback. But in retirement, she started taking poetry writing classes offered at a nearby seniors' program.

She has written more than 250 poems over the past decade on everything from her childhood to her mother to her grandchildren to the complexities of aging. "It's an interesting way to reflect on where you are, what's changed and what's new. It has offered me a lot."

After attorney Nelson Cooney retired at age 62, he started doing hot Bikram yoga to improve his flexibility. "I could never bend over and touch the ground with my hands, but with yoga, I now can. I've improved my balance and made myself a lot more flexible."

Cooney, a member with Allnutt of the group that visits different places monthly, says it's getting harder to find something new after exploring 100 different sites.

The beauty of visiting a different cultural site every month is "it forces you to figure out what things are going on around you," Allnutt says. One time they went to a bowling alley in Baltimore where Babe Ruth bowled. "A lot of people would say there is nothing very cultural about a three-lane bowling alley," he says.

Allnutt says when he formed the group, one guy said, "We've got have some rules." So he wrote two rules. "Rule number one: No alcohol will be consumed on cultural visits, unless there is a meal. Rule 2: There will always be meal."

Clockwise from bottom left, Arthur Bill, Bob Allnutt, Nelson Co! oney and ! Herry Cattell enjoy lunch at Cafe Mozart.(Photo: Melissa Golden for USA TODAY)

Monday, April 14, 2014

Friday’s Analyst Moves: Microsoft Corporation, Johnson & Johnson, Wells Fargo & Co, More (MSFT, JNJ, WFC, More)

Before Monday’s opening bell, a number of big name dividend stocks were the subject of analyst moves. Below, we highlight the important analyst commentary.

Citigroup Upgrades Eaton Vance

Eaton Vance (EV) was upgraded to “Neutral” at Citigroup, due to the company’s defensive asset base. Citi has a price target of $35 on EV, suggesting the stock price will decrease by 2% from its current price. EV has a dividend yield of 2.45%.

Jefferies Downgrades Johnson & Johnson

Johnson & Johnson (JNJ) was downgraded to “Hold” from “Buy” at Jefferies, as the ratings firm feels that JNJ’s valuation is too high, even though the company has strong fundamentals. Jefferies has a $105 price target on JNJ, suggesting an upside of 8.4% from the stock’s current price. JNJ has a dividend yield of 2.73%.

Jefferies Upgrades Eli Lilly

Eli Lilly’s (LLY) rating was bumped from “Underperform” to “Hold” at Jefferies, as the company has seen the removal of its material downsides. Jefferies has a $54 price target on LLY, suggesting a 7.6% downside to the stock’s current price. LLY has a yield of 3.35%.

Baird Upgrades MasterCard

Baird raised its rating on MasterCard (

Sunday, April 13, 2014

Top Solar Companies To Watch In Right Now

Top Solar Companies To Watch In Right Now: First Solar Inc.(FSLR)

First Solar, Inc. manufactures and sells solar modules using a thin-film semiconductor technology. It also designs, constructs, and sells photovoltaic solar power systems. The company?s solar modules employ a thin layer of semiconductor material to convert sunlight into electricity. Its integrated solar power systems activities include the project development; engineering, procurement, and construction services; operating and maintenance services; and project finance. The company sells solar modules to project developers, system integrators, and operators of renewable energy projects; and solar power systems to investor owned utilities, independent power developers and producers, and commercial and industrial companies, as well as other system owners. It operates in the United States, Germany, France, Canada, and internationally. The company was formerly known as First Solar Holdings, Inc. and changed its name to First Solar, Inc. in 2006. First Solar was founded in 1999 a nd is headquartered in Tempe, Arizona.

Advisors' Opinion:

[By Charley Blaine]
The market overall gained support from energy and utility stocks. About 288 S&P 500 stocks were higher, led by First Solar (NYSE: FSLR) and steel-maker Allegheny Technologies Inc. (NYSE: ATI), up 22% and 18.6%, respectively.
[By Jon C. Ogg]
The case for alternative energy and renewable energy is growing handily here each day. This might not drive those small-cap stocks 10,000% higher, but it builds a base for the ones with a proven model. The argument for renewables and alternative energy might not just be for the sake of carbon emissions either. If oil prices remain high or rise, alternative energy projects will simply be driven more and more by economics. First Solar Inc. (NASDAQ: FSLR) just announced new record-breaking eff! iciency, which drives down the cost.

source from Top Stocks Blog:http://www.topstocksblog.com/top-solar-companies-to-watch-in-right-now.html

Saturday, April 12, 2014

Banks Pocket Healthy Underwriting Fees As Global Equity Market Remains Upbeat

Top Electric Utility Companies To Own In Right Now

The global equity market saw a flurry of activity over the first quarter of the year, with companies around the world raising nearly $190 billion through IPOs and follow-on offerings over the period. Quarterly data compiled by Thomson Reuters Thomson Reuters shows that equity underwriting deals were at similar levels to what was witnessed for the same period last year. While the total deal size is almost 30% lower than the $264.4 billion figure for the previous quarter, it must be remembered that the Q4 2013 results were exaggerated by a surge in equity offerings after the Fed's initial announcements of a tapering plan resulted in a weak Q3 2013 performance.

Continued optimism among companies and investors translated into higher equity underwriting fees for investment banks. Thomson Reuters' data estimates a 27% jump in equity underwriting fees for the industry as a whole compared to Q1 2013, although a 21% decline is expected sequentially. In this article, we detail the equity capital market performance of the country's five largest investment banks in Q1 2014, and also estimate the change in each of their fee revenues compared to Q1 and Q4 2013.

See the full Trefis analysis for Goldman Sachs | JPMorgan | Morgan Stanley | Bank of America | Citigroup

The table below summarizes the performance of the equity underwriting unit at each of the five largest U.S. investment banks based on data released by Thomson Reuters last week.

Goldman Sachs retained the top spot in terms of market share by deal size – a position it has maintained in six of the last seven quarters. The bank topped the list of book-runners in EMEA and Asia to achieve a commanding 10.6% share for Q4. Goldman also has a substantially larger average deal size than any of its competitors – indicating that the bank played a role in most of the largest equity underwriting deals over the quarter.

With an 8.4% market share, Morgan Stanley Morgan Stanley came in second with a total deal size which was 21% lower than Goldman, followed by JPMorgan with a 7.8% market share. In terms of number of deals, JPMorgan ranked highest among all investment banks for the quarter, with the banking group playing a role in more deals (116) than any other bank – a feat it has achieved in six of the last nine quarters.