Saturday, August 31, 2013

How Inflation can break your retirement

How does this affect your retirement?
Let's look at some numbers to help bring out the effect.


Current Age Retirement Age Current Mthly Exp Assumed Inflation Rate (pre and post retirement) Expected Return Post Retirement Life Expectancy Retirement Corpus required (approx)
30 60 Rs. 50,000 8% p.a. 8% p.a. 85 years Rs. 15.09 cr
35 60 Rs. 50,000 8% p.a. 8% p.a. 85 years Rs. 10.27 cr
40 60 Rs. 50,000 8% p.a. 8% p.a. 85 years Rs. 6.99 cr
45 60 Rs. 50,000 8% p.a. 8% p.a. 85 years Rs. 4.76 cr













If you look at the table above, you'll notice a few things:
Firstly, all assumptions have been kept constant, the only change is the current age. So basically this situation applies to somebody who wants to retire at 60, currently spends Rs. 50,000 per month, has a life expectancy of 85 years, will put his investments into safe fixed income instruments earning 8% per annum post retirement (post tax). This person might be 30, 35, 40 or 45 years old.

Secondly, you'll notice that the inflation rate post retirement is 8%, and so is the investment return rate post retirement. This means that any investments made will generate the same rate of return as the rate of wealth erosion due to inflation. So the real value of your investments will remain the same.

Thirdly, you'll notice that for a 30 year old spending Rs. 50,000 a month, who wants to retire at 60, the retirement corpus required is Rs. 15.09 crores approximately.

With all the same assumptions, a 45 year old has to accumulate Rs. only 4.76 crores by the age of 60 a comparatively much smaller corpus.

Why is this? The answer is simple.

A 30 year old has 30 years to go before he retires. His pre retirement expenses inflate continuously for 30 years. By the time he retires, his Rs. 50,000 monthly expenses will cost him more than Rs. 5 lakhs per month. That's a 10 fold increase, just to maintain his standard of living.

The 45 year old does not face this level of inflation. To maintain his standard of living at the age of 60, he has to shell out Rs. 1.58 lakhs per month only a 3 fold increase.

And that's what inflation can do to your retirement. The good news is that with the right kind of disciplined financial planning, both goals are achievable. But as with all successfully achieved tasks, the first step is often the hardest.

Use our Retirement Calculator to see what Your retirement number is and then call an unbiased expert financial planner to help you achieve this goal and all your other life goals.

PersonalFN  is a Mumbai based Financial Planning and Mutual Fund Research Firm.

Top Dividend Stocks For 2014

Cisco Systems (NASDAQ: CSCO) has continued to justify the confidence of its shareholders, with share prices increasing by some 34% over the past year. According to the results of its latest earnings report, its revenues during the fourth quarter of FY 2013 increased by 6.2% to $12.4 billion during the May to July period, compared with the same quarter last year, which was in line with Wall Street analysts' expectations. In addition, other financial indicators also recorded increases, with its earnings per share growing by some 16.7% year-on-year to $0.52 while its net income rose by 18% to $2.8 billion.

Its guidance for 2014 was also positive, with a consensus estimate of $2.24 EPS, implying a forward P/E of 10, while earnings growth for the next five years is 9%. In addition, the company also declared cash dividends of $0.17 per share for the quarter, paying a total of $918 million to shareholders, as well as buying back some 47 million shares of stock at around $24.80 per share, or a total of $1.2 billion worth of shares. The company designs and sells IP-based networking and products related to the IT and communications sectors worldwide.

Top Dividend Stocks For 2014: Primary Health Properties PLC (PHP)

Primary Health Properties PLC (PHP) is a healthcare real estate investment trust (REIT). The Company is engaged in the generation of rental income and capital growth through investment in primary healthcare property in the United Kingdom. The Company had invested in 183 properties. The Company specialises in the ownership of freehold or long leasehold interests in modern purposebuilt healthcare facilities, the majority of which are leased to general practitioners and other associated healthcare users. In June 2013, Primary Health Properties PLC announced the acquisition of two standing let medical centre investments. In August 2013, it acquired two medical center investments. In August 2013, the Company announced that its wholly owned subsidiary has completed the acquisition of three modern, purpose built medical centres.

Top Dividend Stocks For 2014: (MAHSEAMLE.NS)

Maharashtra Seamless Limited engages in the manufacture and sale of seamless pipes and tubes primarily in India. Its seamless pipes and tubes have applications in the oil and gas, automotive, hydrocarbon process, bearing, hydraulic cylinder, boiler, heat exchanger, super heater and condenser, railways, mechanical, and structural general engineering industries. The company also manufactures ERW pipes that have applications in the fields of natural gas or oil, diesel, drinking water, and sewage/water treatment; and coated pipes for dwelling purposes. In addition, it engages in the generation of electricity through a wind power generation plant. The company was incorporated in 1988 and is headquartered in New Delhi, India. Maharashtra Seamless Limited operates as a subsidiary of D.P. Jindal Group.

Advisors' Opinion:

  • [By Curtis Hesler]

    Maharashtra Seamless Limited (MSL), based in Delhi, manufactures seamless steel pipes and tubes and ERW pipes and it is the flagship company of the Rs 3000 crore D.P. Jindal Group. Apart from products like hot finished pipes and tubes, cold drawn tubes, line pipes etc, the company getting into wind power generation in a big way. The 7 MW wind power project at Satara Maharashtra is a deep commitment by the company to generating environment friendly green power.

Top Dividend Stocks For 2014: War Eagle Mining Co. Inc. (WAR.V)

War Eagle Mining Company Inc. engages in the acquisition, exploration, and development of mineral resource properties in Canada and Mexico. It explores for tantalum, tin, lithium, and gold. It primarily focuses on the MAC property comprising 10 contiguous claims covering 15,015 hectares located in the southwest Northwest Territories, Canada. The company was formerly known as War Eagle Resources Ltd. and changed its name to War Eagle Mining Company Inc. in May 1987. War Eagle Mining Company Inc. was incorporated in 1984 and is headquartered in Vancouver, Canada.

Top Dividend Stocks For 2014: Luxottica Group SpA (LUX)

Luxottica Group S.p.A. (Luxottica), incorporated in 1961, is an Italy-based company engaged in the design, manufacture and distribution of prescription frames and sunglasses in the mid-and premium-price categories. It operates in two segments: manufacturing and wholesale distribution and retail distribution. Through its manufacturing and wholesale distribution segment, it is engaged in the design, manufacture, wholesale distribution and marketing of house and designer lines of mid-to premium-priced prescription frames and sunglasses. The Company operates its retail segment principally through its retail brands, which include, among others, LensCrafters, Pearle Vision, Sears Optical, Target Optical and its Licensed Brands (Sears Optical and Target Optical), as well as through the retail brands of its business, Oakley, which include, among others, Oakley O Stores and Vaults, David Clulow e nel segmento Licensed Brand. Among its subsidiaries there are: Air Sun, Bazooka Inc, David Clulow Brighton Ltd and Ecotop Pty Ltd.

Top Dividend Stocks For 2014: Vantage Drilling Company(VTG)

Vantage Drilling Company, through its subsidiaries, provides offshore contract drilling services to oil and natural gas companies in the United States and internationally. The company offers drilling units, related equipment, and work crews under contract to drill oil and natural gas wells; construction supervision services; and operates and manages drilling units owned by others. Its customers primarily include multinational oil and natural gas companies, government owned oil and natural gas companies, and independent oil and natural gas producers. The company owns and manages four jackup rigs and three drillships. Vantage Drilling Company was founded in 2007 and is based in Houston, Texas.

Advisors' Opinion:
  • [By Fabian]

    Vantage Drilling Company (AMEX:VTG): This equity had 10,232,975 shares sold short as of Aug 31st, as compared to 9,547,345 on Aug 15th, which represents a change of 685,630 shares, or 7.2%. Days to cover for this company is 6 and average daily trading volume is 1,640,644. About the equity: Vantage Drilling Company offers offshore oil and natural gas well drilling services.

Top Dividend Stocks For 2014: Primco Management Inc (PMCM)

Primco Management Inc., incorporated on October 14, 2010, is a development-stage company. The Company focuses on offering estate management services for its clients and retention on a range of properties including class A office space, industrial, manufacturing, and warehousing facilities as well as data centers and retail outlets for real estate users. In addition, it also focuses on offering consulting services, including site selection, feasibility studies, exit strategies, market forecasts, strategic planning, and research services. In February 2013, the Company announced that ESMG, Inc. took controlling interest in the Company through the acquisition of more than 80% interest of the Company. In February 2013, it purchased the music catalog of D&B Music. In May 2013, the Company acquired Top Sail Productions.

As of December 31, 2010, the Company did not have any operations. During the year ended December 31, 2010, it did not generate any revenues.

HUDCO's Rs 500cr tax-free bonds issue opens

In the first tranche, which was launched On January 9 and closed on February 7, the company had raised Rs 2,195 crore. The second tranche would open from today and close on March 15, 2013 .

"We are launching the second tranche of our tax-free bonds from tomorrow. The issue size is Rs 500 crore with an option to retain over-subscription up to Rs 2,805 crore," HUDCO Chairman and Managing Director V P Baligar told PTI.

HUDCO would utilise the issue proceeds for lending purposes, working capital requirements, augmenting resource base of the company and other operational requirements.

It would offer a higher coupon rate of 7.69 percent for 15 years maturity period and 7.53 percent for 10 years to retail investors. An investment up to Rs 10 lakh qualifies under retail category. For others, the coupon rates are 7.19 percent for 15 years and 7.03 percent for 10 years.

The coupon rates for retail investors are lower than the first tranche as interest rates have gone down, he added. HUDCO, a mini-ratna firm, is a financial institution that provides long-term finance for housing and urban infrastructure projects.

The company had posted net profit of Rs 630.33 crore over a gross income of Rs 2,778.63 crore in the 2011-12 fiscal. The company is expecting to achieve the sanctioning and disbursal targets for this fiscal at Rs 22,000 crore and over Rs 6,000 crore, respectively.

Friday, August 30, 2013

Top 10 Blue Chip Companies To Watch For 2014

The Dow Jones Industrial Average (DJINDICES: ^DJI  ) jumped again today, riding a wave that carried the S&P 500 up 1.2% and lifted the Nasdaq 1.8%. The blue chips finished the day with a gain of 129 points, or 0.9%, topping 14,800 at the closing bell.

The Dow got some help from the Federal Reserve, which released the minutes from its Open Market Committee earlier than expected. After learning that 154 people had gotten the release, including employees at some major banks, the central bank was forced to release the notes at 9 a.m. instead of the usual 2 p.m. There was little new information from the Fed, but the news seemed to confirm investors' belief that the central bankers would keep present market stimulus measures in practice until the economy improves and the unemployment rate comes down. Some at the central bank said they wanted to reduce the Fed's bond buying, but overall the market interpreted the report favorably. Hopes for a better-than-expected earnings season also appeared to drive stocks higher.

Top 10 Blue Chip Companies To Watch For 2014: McDonald's Corporation(MCD)

McDonald?s Corporation, together with its subsidiaries, operates as a worldwide foodservice retailer. It franchises and operates McDonald?s restaurants that offer various food items, soft drinks, coffee, and other beverages. As of December 31, 2009, the company operated 32,478 restaurants in 117 countries, of which 26,216 were operated by franchisees; and 6,262 were operated by the company. McDonald?s Corporation was founded in 1948 and is based in Oak Brook, Illinois.

Advisors' Opinion:
  • [By Brian Gorban]

     Fast food giant and world-renowned company McDonald’s (NYSE: MCD) is undoubtedly a name you’ve heard of, as “the golden arches” are ubiquitous--and with good reason: The company operates over 33,000 restaurants in 119 countries. With over $27 billion in revenue and a market capitalization near $90 billion, McDonald’s is simply a juggernaut and should continue to be a beneficiary of the global growth story happening predominately in the “BRIC” (Brazil, Russia, India, and China) countries in the years and decades to come.

    Of course, those countries have not been spared the current economic carnage and that has caused the company to miss the past two quarters’ consensus estimates, but that has created a buying opportunity. With the stock trading not far above its $83.31 52-week low, McDonald’s is now yielding an attractive 3.5% dividend yield, and with a low 54% payout ratio, look for the dividend to not only be safe but be raised in the near future. Add in the fact that the company has a comparatively and historically low 16x forward and trailing P/E, and I think MCD should serve investors well for the long-term while one can wait and happily collect the nice 3.5% dividend.

  • [By JON C. OGG]

    McDonald’s Corporation (NYSE: MCD) is at $85.08 and analysts have a consensus price target objective of $97.68.  It carries a 2.9% dividend yield and the stock is down 5% from its 52-week high.  McDonald’s trades at close to 6-times book value, but its return on equity is 37%.  S&P carries an “A” local long-term rating on the Golden Arches.  In the “you gotta eat somewhere” theory, McDonald’s seems to keep winning over and over and its shares and same-store sales keep rising handily.

Top 10 Blue Chip Companies To Watch For 2014: 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 Advisors' Opinion:

  • [By ChuckCarlson]

    Colgate-Palmolive Company (CL), together with its subsidiaries, manufactures and markets consumer products worldwide. The company has raised distributions for 48 years in a row. The 10 year annual dividend growth rate is 12.40%/year. The last dividend increase was 9.40% to 58 cents/share. Analysts are expecting that Colgate Palmolive will earn $5.52/share in 2012. I expect that the quarterly dividend will be raised to 64 cents/share in 2012. Yield: 2.60%

5 Best Medical Stocks To Watch For 2014: 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 Stephen Quickel]

     Can Apple Inc. (AAPL) return to the $700 level? Whether its does or not, I suspect that the stock will be one of the outstanding comeback stories during the year ahead. 

    Indeed, even if it rebounds to $600 or so, that's a 20% gain. Most investors would settle for that. And chances are it will do much better over time, given Apple's knack for coming up with new products.

    Short sellers have cleaned up since they began bum-rapping Apple in late 2012. Three observations are appropriate: 

    1. The short positions, while rising rapidly early in the fall, never amounted to more than a few percent of the outstanding shares at their peak.
    2. The stock was probably overdue for correction, having zoomed 9-fold since March 2009.
    3. The consensus of 50-plus Wall Street analysts covering AAPL still calls for 20%-plus a year earnings growth going forward, with a target price of $762.

    Apple, in case you hadn't noticed, is selling iPads and iPhones at record levels while its stock has been under attack, in just about every corner of the world.

  • [By Roberto Pedone]

    Finally, we're revisiting Apple (AAPL) this week. Last week, Apple was just starting to break out above it's the downtrending resistance line that's held shares lower for months. And sure enough, in the sessions that have followed, Apple has quietly made a move to test its last swing high at $466.

    That price is the nearest important resistance level for the stock; traders should treat a move through $466 as a buy signal. If Apple's downtrend is truly broken, we'll want to see the stock make a series of higher lows and higher highs. Now, the $436 billion firm is finally in a position where it can start to do that. This week's price action could get interesting for Apple bulls.

    I'm still recommending buyers keep a protective stop on the other side of the 50-day moving average; it should start looking like a decent proxy for support when a move through $466 happens.

  • [By Jonas Elmerraji]

    Apple (AAPL) has had a less impressive run in 2013. Shares of the tech behemoth are down around 6% since the calendar flipped over to January -- not horrific performance unless you consider the fact that the S&P 500 has gained more than 18% over that period. Ouch.

    But Apple's bear run looks like it's nearing an end thanks to a multi-month breakout above the $460 level. Apple is breaking out of a double bottom pattern, a setup formed by two swing lows that take place at approximately the same price level. In AAPL's case, those swing lows bottomed out in late April and late June, and this week's breakout signals a buy.

    Whenever you're looking at any technical price pattern, it's critical to think in terms of buyers and sellers. Rectangles, double bottoms and other price pattern names are a good quick way to explain what's going on in this stock, but they're not the reason it's tradable. Instead, it all comes down to supply and demand for shares.

    That resistance line at $14.50, for example, is a price at which there was an excess of supply of shares; in other words, it's a place where sellers had been more eager to take recent gains and sell their shares than buyers were to buy. That's what made the move above it so significant -- the breakout indicated that buyers are finally strong enough to absorb all of the excess supply above that price level.

    If you jump in here, I'd recommend putting a protective stop just below the 50-day moving average.

  • [By Roberto Pedone]

    Apple (AAPL), a Rocket Stock? Yes, you read it right. Despite a 15% drop in this stock's share price year-to-date, Apple is some huge upside potential ahead of it.

    Right now, one of Apple's biggest catalysts comes on Sept. 10, when the firm is expected to announce a new iPhone (or iPhones) as well as a long-awaited TV. But no matter how Apple's media day ends up next month, this stock is dirt-cheap right now.

    As I write, Apple sports a price-to-earnings ratio of just 11-- a tiny multiple that reflects investors' belief that the firm can't continue the breakneck growth it's achieved in recent years. But back Apple's mammoth cash position out of the equation, and Apple's P/E drops flat to 7. That's a lower cash-adjusted P/E than just about any other company in the tech sector. Apple boasts product attributes that should make it trade at a premium, not a discount: It's the only remaining PC maker that actually earns meaningful margins, it's the incumbent smart phone and tablet maker, and it owns the biggest music, video, and app ecosystem in the world.

    Clearly, Apple's price is out of sync with the market now. To counter that, management has been working to provide shareholder returns of their own in the form of dividends and share buybacks. Because of the material size of Apple's cash position, those payouts could significantly concentrate Apple's shareholder base in the next few years.

    AAPL is testing a long-standing resistance level. If shares clear resistance this summer, it could be the end of the downtrend.

Top 10 Blue Chip Companies To Watch For 2014: 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 Roberto Pedone]

    One stock that insiders are buying up a large amount of here is Philip Morris International (PM), which manufactures and sells cigarettes and other tobacco products in markets outside the U.S. Insiders are buying this stock into modest strength, since shares are up 5.5% so far in 2013.

    Philip Morris International has a market cap of $143 billion and an enterprise value of $168 billion. This stock trades at a reasonable valuation, with a trailing price-to-earnings of 17.25 and a forward price-to-earnings of 14.6. Its estimated growth rate for this year is 4.2%, and for next year it's pegged at 11.8%. This is not a cash-rich company, since the total cash position on its balance sheet is $3.59 billion and its total debt is $25.50 billion. This stock currently sports a dividend yield of 3.8%.

    A director just bought 123,500 shares, or about $11.01 million worth of stock, at $89.15 per share.

    From a technical perspective, PM is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has been downtrending over the last two months and change, with shares dropping from its high of $95.38 to its recent low of $85.21 a share. During that move, shares of PM have been mostly making lower highs and lower lows, which is bearish technical price action.

    If you're bullish on PM, then I would look for long-biased trades as long as this stock is trending above some near-term support at $87.65 to $87 and then once it takes out its 200-day at $88.72 and its 50-day at $89.25 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 5.10 million shares. If we get that move soon, then PM will set up to re-test or possibly take out its next major overhead resistance levels at $91.40 to $92.26 a share. Any high-volume move above those levels will then put $94 to $95 into range for shares of PM.


  • [By Louis Navellier]

    Philip Morris International (NYSE:PM) is involved with the manufacture and sale of cigarettes and other tobacco products in over 180 countries across the globe. Year to date, PM stock is up 16%, compared to a loss of nearly 2% for the Dow Jones.

Top 10 Blue Chip Companies To Watch For 2014: 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 Charles Sizemore]

    One of the “big picture” economic themes that I expect to play out over 2011 and beyond is the secular shift to a global cashless society.?Though the process is well on its way in the U.S. and Europe, roughly 40% of all transactions are still made with cash and paper checks according to Barron’s.

    This means that even in “boring” developed markets, there is ample room for growth in electronic payments. And there is no better company to benefit from this trend than credit card giant Visa (NYSE: V).

Top 10 Blue Chip Companies To Watch For 2014: 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.

Advisors' Opinion:
  • [By Hawkinvest]

    Chevron Corporation (CVX) is a leading integrated energy company with exposure to oil, natural gas, refining, etc. This could be one of the most undervalued stocks in the market. Chevron pays a dividend that beats many other stock and bond yields, plus it has a below market price to earnings ratio of about 8 times earnings. The average stock in the S&P 500 Index currently trades for over 12 times earnings. If oil prices continue to rise, the already healthy profit estimates for Chevron might be too low. With oil prices showing strength this early in the season, Chevron could be poised to beat earnings in the coming months. However, the stock is trading at the upper end of the recent trading range. Recently, it has been possible to buy this stock at about $102 per share, so waiting for dips could pay off.

    Here are some key points for CVX:

    Current share price: $104.25

    The 52 week range is $85.63 to $110.01

    Earnings estimates for 2012: $12.66 per share

    Earnings estimates for 2013: $13.20 per share

    Annual dividend: $3.42 per share which yields 3.1%

  • [By GuruFocus] Tom Gayner initiated holdings in Chevron Corp. His purchase prices were between $114.81 and $126.43, with an estimated average price of $120.86. The impact to his portfolio due to this purchase was 0.18%. His holdings were 43,000 shares as of 06/30/2013.

    New Purchase: Brookfield Property Partners LP (BPY)

    Tom Gayner initiated holdings in Brookfield Property Partners LP. His purchase prices were between $19.57 and $23.64, with an estimated average price of $21.67. The impact to his portfolio due to this purchase was 0.13%. His holdings were 175,122 shares as of 06/30/2013.

    New Purchase: ONEOK, Inc. (OKE)

    Tom Gayner initiated holdings in ONEOK, Inc.. His purchase prices were between $41.16 and $52.13, with an estimated average price of $46.98. The impact to his portfolio due to this purchase was 0.1%. His holdings were 70,000 shares as of 06/30/2013.

    New Purchase: Blackstone Group LP (BX)

    Tom Gayner initiated holdings in Blackstone Group LP. His purchase prices were between $19.1 and $23.45, with an estimated average price of $21.2. The impact to his portfolio due to this purchase was 0.09%. His holdings were 116,900 shares as of 06/30/2013.

    New Purchase: BlackRock Inc (BLK)

    Tom Gayner initiated holdings in BlackRock Inc. His purchase prices were between $245.3 and $291.69, with an estimated average price of $267.9. The impact to his portfolio due to this purchase was 0.08%. His holdings were 9,100 shares as of 06/30/2013.

    New Purchase: KKR & Co LP (KKR)

    Tom Gayner initiated holdings in KKR & Co LP. His purchase prices were between $17.8 and $21.15, with an estimated average price of $19.85. The impact to his portfolio due to this purchase was 0.08%. His holdings were 115,000 shares as of 06/30/2013.

    New Purchase: Eni SpA (E)

    Tom Gayner initiated holdings in Eni SpA. His purchase prices were between $40.39 and $48.96, with an estimated average price of $45.85. The impact to his portfolio due to this purchase was 0.04%. His ! holdings were 30,000 shares as of 06/30/2013.

    New Purchase: Ross Stores, Inc. (ROST)

    Tom Gayner initiated holdings in Ross Stores, Inc.. His purchase prices were between $59.26 and $66.5, with an estimated average price of $64.05. The impact to his portfolio due to this purchase was 0.04%. His holdings were 18,000 shares as of 06/30/2013.

    New Purchase: Carlyle Group LP (CG)

    Tom Gayner initiated holdings in Carlyle Group LP. His purchase prices were between $24.19 and $32.87, with an estimated average price of $29.56. The impact to his portfolio due to this purchase was 0.02%. His holdings were 20,000 shares as of 06/30/2013.

    Sold Out: EOG Resources (EOG)

    Tom Gayner sold out his holdings in EOG Resources. His sale prices were between $113.44 and $137.9, with an estimated average price of $128.22.

    Sold Out: State Street Corp (STT)

    Tom Gayner sold out his holdings in State Street Corp. His sale prices were between $56.51 and $67.44, with an estimated average price of $62.2.

    Sold Out: Bunge Ltd (BG)

    Tom Gayner sold out his holdings in Bunge Ltd. His sale prices were between $66.4 and $73.51, with an estimated average price of $70.39.

    Added: UnitedHealth Group Inc (UNH)

    Tom Gayner added to his holdings in UnitedHealth Group Inc by 45.25%. His purchase prices were between $58.54 and $66.09, with an estimated average price of $62.22. The impact to his portfolio due to this purchase was 0.4%. His holdings were 569,800 shares as of 06/30/2013.

    Added: Liberty Media Corporation (LMCA)

    Tom Gayner added to his holdings in Liberty Media Corporation by 102.38%. His purchase prices were between $108.75 and $130.01, with an estimated average price of $119.32. The impact to his portfolio due to this purchase was 0.2%. His holdings were 85,000 shares as of 06/30/2013.

    Added: National Oilwell Varco, Inc. (NOV)

    Tom Gayner added to his holdings in National Oilwell Varco, Inc. by 40.44%. His purchase prices were bet! ween $64.! 14 and $71.57, with an estimated average price of $68.35. The impact to his portfolio due to this purchase was 0.14%. His holdings were 191,000 shares as of 06/30/2013.

    Added: Google, Inc. (GOOG)

    Tom Gayner added to his holdings in Google, Inc. by 86%. His purchase prices were between $765.914 and $915.89, with an estimated average price of $849.25. The impact to his portfolio due to this purchase was 0.13%. His ho

Top 10 Blue Chip Companies To Watch For 2014: International Business Machines Corporation(IBM)

International Business Machines Corporation (IBM) provides information technology (IT) products and services worldwide. Its Global Technology Services segment provides IT infrastructure and business process services, including strategic outsourcing, process, integrated technology, and maintenance services, as well as technology-based support services. The company?s Global Business Services segment offers consulting and systems integration, and application management services. Its Software segment offers middleware and operating systems software, such as WebSphere software to integrate and manage business processes; information management software for database and enterprise content management, information integration, data warehousing, business analytics and intelligence, performance management, and predictive analytics; Tivoli software for identity management, data security, storage management, and datacenter automation; Lotus software for collaboration, messaging, and so cial networking; rational software to support software development for IT and embedded systems; business intelligence software, which provides querying and forecasting tools; SPSS predictive analytics software to predict outcomes and act on that insight; and operating systems software. Its Systems and Technology segment provides computing and storage solutions, including servers, disk and tape storage systems and software, point-of-sale retail systems, and microelectronics. The company?s Global Financing segment provides lease and loan financing to end users and internal clients; commercial financing to dealers and remarketers of IT products; and remanufacturing and remarketing services. It serves financial services, public, industrial, distribution, communications, and general business sectors. The company was formerly known as Computing-Tabulating-Recording Co. and changed its name to International Business Machines Corporation in 1924. IBM was founded in 1910 and is based in Armonk, New York.

Advisors' Opinion:
  • [By Paul]

    IBM. Emerging markets are a big growth driver for this computer systems and software provider. Not only that, Resendes says, IBM has "a bullet-proof balance sheet that will allow it to weather the current storm and position it for superior growth and profitability in the long term." He thinks the stock, which recently traded at $93, is worth $120 a share: ''There are some obvious companies that offer much bigger discounts, but you have to incorporate the safety factor. You're getting a premium company here that's a good spot to be in within the tech space."

  • [By Geoff Gannon] Wells Fargo (WFC) ��that only seem cheap if you believe in their franchises. These are far from Ben Graham bargains.

    And then other times, Buffett buys companies like Daehan Flour Mills. Or he buys into a liquidation like Comdisco. Or an arbitrage position like Dow Jones.

    How does Buffett choose between:

    路 A wonderful business at a fair price

    路 A fair business at a wonderful price

    路 A business that is liquidating

    路 An arbitrage opportunity?

    Very few successful investors buy stocks that fall into all these categories. Ben Graham did arbitrage, liquidations, and fair businesses at wonderful prices. But he never bought wonderful businesses at fair prices.

    Phil Fisher bought wonderful businesses at fair prices. But he never bought fair businesses at wonderful prices, or liquidations, or arbitrage.

    Is Buffett just combining Ben Graham and Phil Fisher?


    Buffett invested in GEICO ��in fact he put 75% of his net worth into GEICO ��while he was still taking Ben Graham�� class. GEICO is a great example of Warren�� departure from the Ben Graham approach. Buffett was departing from Graham�� approach from the moment he set foot in Graham�� class.


    He was focused on his return on investment. He was focused on compounding his wealth. Graham wasn��. Buffett was. That was the difference.

    And so Buffett immediately started buying the same stocks as Ben Graham ��but he focused on just the very best ideas in Graham�� portfolio. A great idea for Ben Graham would ��at most ��account for about 10% of his common stock portfolio. A great idea for Warren Buffett could be ��like GEICO was ��75% of his portfolio.

    When Buffett started his partnership, he had a 25% position size cap. But he removed that to allow for a 40% investment in American Express (AXP). Buffett made many investments of 10% to 20% of the partnership�� portfolio over the years. For Ben Graham, 10% to 20% was a real! ly big position. It wasn�� the kind of thing you bought every year.

    So a huge difference between Ben Graham and Warren Buffett was focus. Buffett was always focused on his best ideas. This is part of what makes Warren Buffett similar to Phil Fisher. And very different from almost all other investors.

    The other part of Warren Buffett�� approach that separates him from most investors is that he�� wedded to a very specific idea ��return on investment ��rather than a very specific style of investing.

    The only way Buffett can sort through a range of different ideas including good companies, mediocre companies, liquidations, and arbitrage ��is by looking at his return on investment.

    I wrote about this back in 2011 in an article entitled: ��arren Buffett: Mid-Continent Tab Card Company.��br>
    That article was based on Alice Schroeder�� description of Warren Buffett�� investment in Mid-Continent Tab Card Company.

    And it�� a good article to read if you want to know how Warren Buffett thinks about stocks. Because it includes such heretical ideas as: ���growth had the potential to be either an added kicker or the most serious risk to his investment��and ��ou build the margin of safety into each step. You don�� just slap a 40% discount on the intrinsic value estimate you get at the end.��br>
    But the most important statement in that article was:

    ��uffett doesn�� seem to make actual estimates. Alice Schroeder says she never saw anything about future earnings estimates in his files. He didn�� project the future earnings the way stock analysts do.��br>
    How is that possible?

    How can you sort through a variety of different investment options without using any explicit future estimates?

    You have to think in terms of return on investment.

    In fact, the reader who asked me the question that prompted the Mid-Continent Tab Card Company article actually got very close to identifying how Warren Buffett thinks about st! ocks:
    ��ou wrote that Buffett just looked at the initial return (>15%) he was getting and the business�� own ROC. When you aid ��nitial��do you mean the 1st year? I think that sort of makes sense because his return of the subsequent years would be taken (from) the firm�� own ROC and sales growth. Is that how you see it?��br>
    Now, what did that reader get wrong? He came very, very close to describing how Buffett looks at a business. But he just missed.

    What variable isn�� being considered there?

    Is it really true that: ��is return of the subsequent years would be taken (from) the firm�� own ROC and sales growth��

    Let�� say a company has zero leverage. And its return on assets has been 10% a year for each of the last 100 years. You can bet on that 10% a year. Okay. Now, let�� say it is growing sales by 10% a year.

    How much is the business worth?

    And how much should an investor expect to make in that stock if he pays exactly tangible book value?

    Can the investor expect to earn 20% a year or 10% a year?

    Or something in between?

    Now, if you expect to hold the stock for a short-period of time your return will largely be based on what the market is willing to pay for each dollar of earnings the stock has in the future. So, you can certainly make over 100% a year if you buy a stock at 10 times earnings and sell it at 20 times earnings exactly one year from today.

    I�� not talking about that. Don�� worry about the resale value right now. Just look at the question of what the owner of a business can expect to make if the following facts are true:

    路 Total Assets: $100

    路 Annual Earnings: $10

    路 Future Annual Sales Growth: 10%

    Do you think you can answer that question?

    A lot of people think they can answer that question. But Warren Buffett would say you can�� answer that question.

    Not until you consider two possible future scenarios. Ten years from today, that same business cou! ld look l! ike:

    路 Total Assets: $260

    路 Annual Earnings: $26

    路 Future Sales Growth: ?

    Or it could look like:

    路 Total Assets: $100

    路 Annual Earnings: $26

    路 Future Sales Growth: ?

    Or it could look like anything in between. In fact, I�� simplifying. If you look at their 10-year records, quite a few businesses grew assets faster than earnings. So, the range of possible outcomes in terms of the ratio of change in earnings to change in assets is even wider than I just presented.

    If we look at two businesses each earning 10% on their assets, each unleveraged, and each growing at 10% a year ��we can imagine one future where assets have grown by $160 over 10 years. And we can imagine another future where assets haven�� grown at all over 10 years.

    Which is the better future for an owner?

    Obviously, the future with sales growth that far exceeds asset growth.

    That would allow the company to buy back stock, pay dividends, etc.

    So we can think of the combination of a company�� return on assets and its change in assets and sales as being like the total return on a stock. The total return on a stock includes both price appreciation and dividends.

    The total return on a business includes both the return on assets (from this year) and the growth in sales. But it does not include sales growth apart from asset growth. Rather, to the extent that assets and sales grow together ��growth is simply the reinvestment of more assets at the same rate of return.

    In other words, a business with a 10% ROA and 0% sales growth and a business with a 10% ROA and 10% sales growth could be more comparable than they appear. If the company with no sales growth pays out 10% of its assets in dividends each year, why is it worth less than the business with a 10% ROA and 10% sales growth?

    In the no-growth company, I get 10% of my initial investment returned to me. In the growth company, I get 10% of my initial investment reinv! ested for! me. If the rate of return on that reinvested cash is the same rate of return I can provide for myself on the cash paid out in dividends ��why does it matter which company I choose?

    Doesn�� an owner earn the same amount in both businesses?

    Now, I think there are qualitative reasons ��basically safety issues ��that would encourage me to prefer the growing business. Usually, companies try to grow. If a company isn�� growing, it could be a sign of something serious.

    So a lack of growth is sometimes a symptom of a greater disease. But growth is not always good.

    In more cases than people think, growth is actually a pretty neutral consideration in evaluating a stock.

    There is an exception. At unusually high rates of growth ��growth is almost universally good. This is a complex issue. But I can simplify it. Very few businesses that grow very fast do so by tying up lots of assets relative to the return they earn on those assets. Therefore, it is unnecessary to insist on high returns on capital when looking at very high growth companies. You��l get the high returns on capital ��at least during the company�� fast growth stage ��whether you ask for them or not.

    What do I mean when I say growth is often a pretty neutral consideration?

    Let�� use live examples.

    Here is Hewlett-Packard (HPQ)��br>
    10-Year Average Return on Assets: 3.2%

    10-Year Annual Sales Growth: 10.7%

    10-Year Annual Asset Growth: 14.5%

    And here is Value Line (VALU)��br>
    10-Year Average Return on Assets: 76.2%

    10-Year Annual Sales Growth: (8.2%)

    10-Year Annual Asset Growth: (11.1%)

    Whose assets would you pay more for?

    I have a problem with an 8% a year decline in sales. And worry that the future looks really, really grim for Value Line.

    But it�� hard to say Hewlett-Packard has gained anything through growing these last 10 years. The company has retained a lot of earnings. And it retained those earnings e! ven while! return on assets was low.

    The 10-year total return in Value Line shares has been (0.9%) a year over the last 10 years. The 10-year year total return in Hewlett-Packard has been a positive 4% a year.

    So it sounds like Hewlett-Packard has done much better. But all of that is attributable to investor perceptions of their industry. If you look at HP�� industry, total returns ��from 2002 to 2012 ��in the stocks of computer makers were around 14% a year. Meanwhile, publishers ��like Value Line ��returned negative one percent a year. So, Value Line�� underperformance relative to Hewlett-Packard is probably better explained by the miserable future prospects for publishers compared to the much more moderate future prospects for computer companies.

    Why does this matter in a discussion of Warren Buffett?

    Because it illustrates the one future projection I do think Buffett makes. I think he looks out about 10 years and asks himself whether the company�� moat will be intact, its growth prospects will still be decent, etc.

    In other words: will this stock deserve to sell at a fairly high P/E ratio 10 years from today?

    Warren Buffett doesn�� want to buy a stock that is going to have its P/E ratio contract over 10 years.

    To put the risk of P/E ratio contraction in perspective, consider that Value Line traded at over 5 times sales and nearly 25 times earnings just 10 years ago. Whatever the company�� future holds, it�� unlikely we��l see the stock at those kinds of multiples any time soon. Publishers just don�� deserve those kinds of P/E ratios any more.

    So, how much the market will value a dollar of earning power at in the future matters. And that is one place where projecting the future is probably part of Buffett�� approach. This is mostly a tool for avoiding certain companies rather than selecting certain companies.

    For example, Buffett was willing to buy newspaper stocks in the 1970s but not the 2000s. The reason for that was ! that in t! he 1970s he thought he saw at least a decade of clear sailing for newspapers. In the 2000s, he didn��.

    Today, I think Buffett sees at least a decade of clear sailing for the railroads and for IBM. In both cases, his perception of their future prospects was almost certainly the last puzzle piece to fall into place. It wasn�� an issue of IBM (IBM) getting to be cheap enough. It was an issue of Warren Buffett being confident enough to invest in IBM.

    By the way, let�� look at IBM�� past record:

    10-Year Average Return on Assets: 10.3%

    10-Year Annual Sales Growth: 2.8%

    10-Year Annual Asset Growth: 1.9%

    As you can see, IBM isn�� much of a growth company. But that doesn�� mean the shares can�� be growth shares. IBM has improved margins and bought back stock. That has led to a 20% annual increase in earnings per share compared to just a 3% annual increase in total revenue.

    So can we answer the question of why Warren Buffett is interested in companies like IBM and Norfolk Southern (NSC) rather than Hewlett-Packard and Value Line?

    Well, Value Line is obviously too small an investment for Buffett. But we��e using it as a stand in for all the publishers Buffett once loved but now shuns.

    Buffett is a return on investment investor. He isn�� exactly a growth investor or a value investor ��if by growth we mean total revenue growth and if by value we mean the company�� value as of today.

    Buffett wants to compound his money at the fastest rate possible. So he looks at how much of the company�� sales, assets, etc. he is getting. Basically, he looks at a price ratio. And then he looks into the company�� return on its own sales, assets, etc. When you take those two numbers together you get something very close to a rate of return.

    The last part you need to consider is the change in assets versus the change in sales (and earnings). Does the company need to grow assets faster than earnings?

    Or ��like See�� Candy �! �can it ! grow sales a little faster than assets?

    Let�� take a look at Norfolk Southern as a good example of the kind of railroad Buffett would own ��if he didn�� own all of Burlington Northern.

    Norfolk Southern

    10-Year Average Return on Assets: 4.9%

    10-Year Annual Sales Growth: 6.0%

    10-Year Annual Asset Growth: 3.6%

    Now, how much earning power do you get when you invest in Norfolk Southern?

    Total Assets are $28.54 billion. And the market cap is $21.28 billion. So, $28.54 billion / $21.28 billion = $1.34 in assets for every $1 you pay for the stock today.

    Now, Norfolk Southern�� return on assets has averaged a little less than 5% over the last decade. But I think that ��like he does with IBM ��Buffett believes the current returns on assets of the railroads are sustainable. So, we are talking something in the 5% to 7% range for a railroad like Norfolk Southern.

    On top of this, he sees that the railroads have grown sales faster than assets. Now, we could do an elaborate projection of future margins, returns on assets, etc. to try to figure out what the railroads of the future will look like.

    Or, we could just assume that over the last 10 years, Norfolk Southern has grown sales about 2.5% a year faster than it has grown assets. And Norfolk Southern can earn 5% to 7% on its assets. As a result, an investor in Norfolk Southern will see his wealth grow by about 7.5% to 9.5% of the company�� assets he owns. This doesn�� sound like much. But, railroads use leverage. And they often have price-to-book ratios lower than their leverage ratios. As a result, investors can often buy more than $1 in railroad assets for every $1 they spend
  • [By Peter Hughes]

    International Business Machines (IBM) -- our aggressive pick for the year -- is one of the world's most dominant technology companies, with annual revenues of $105 billion and net income of $16 billion.

NCR to Ease Banking & Traveling - Analyst Blog

NCR Corporation (NCR) has been awarded two more deals continuing the series of deal wins over the last couple of quarters. NCR has recently secured a deal from the Lake State Credit Union. Under the contract, NCR will provide its interactive video technology to help the latter establish a branch at a distance of 40 miles from its current location.

The new branch would be equipped with three NCR APTRA Interactive Teller ATMs and additional (non-video teller) NCR SelfServ ATMs. With the help of this technology, Lake State CU will be able to provide Commercial, Mortgage and Consumer services to that area.

APTRA Interactive Teller, with its ATM-based technology, not only lets people talk to a live remote-teller, but also allows them to remotely conduct transactions. This is a very useful technology which is helping institutions across the globe.

Apart from Lake State CU, a passenger airlines company -- Copa Airlines -- has also struck a deal with NCR to enhance its efficiency and become more customer-friendly. The deal will have a two-fold benefit on Copa. First, the NCR-developed free iPhone app made it easier for passengers to easily access Copa's mobile site to check flight status, check in for flights and even download boarding passes.

Second, Copa will use the NCR APTRA eMarketing platform to email boarding passes to its passengers to make their travel hassle-free.

This technology is beneficial for travel companies and airlines as they help them to reduce human capital and strengthen their business model.

NCR is witnessing palpable growth across different geographical regions such as the Asia-Pacific and the Middle East and Africa region. However, there has been a dip in business activity in the European region. Therefore, to offset the effects of the economic slump, the company is making strategic moves to explore other markets and business segments. Moreover, it is facing stiff competition from Diebold Corp. (DBD).

Currently, NCR has a Zacks R! ank #3 (Hold). Investors could also consider other technology stocks, such as Orbotech Ltd. (ORBK) has a Zacks Rank #1 (Strong Buy) and Micron Technology (MU) has a Zacks Rank #2 (Buy).

Thursday, August 29, 2013

BSX Downgraded to Sell - Analyst Blog

On Jul 9, 2013, Zacks Investment Research downgraded Boston Scientific Corporation (BSX) to a Zacks Rank #4 (Sell).

Why the Downgrade?

Boston Scientific has been witnessing sharp downward estimate revisions after the company reported dismal first-quarter 2013 results that prompted management to take a conservative stance on its fiscal sales and earnings outlook.

Over the last 30 and 60 days, out of 11 analysts covering the stock for the second quarter of 2013, 3 revised estimates downward with none in the opposite direction. Similarly, 2 and 3 out of 11 analysts covering the stock for 2013 revised estimates downward over the last 30 and 60 days, respectively, with no upward revisions.

Boston Scientific incurred losses during the first quarter of 2013 due to a challenging economic and competitive environment, pressure on core segments and a larger-than-expected currency headwind.

These factors are expected to adversely impact the company through the next quarter. Moreover, for full year 2013, the company lowered its revenue guidance to the band of $6.950 to $7.150 billion (earlier band being $7.168−$7.243 billion) with adjusted EPS in the range of 65–70 cents (previously 64–70 cents).

Despite Boston Scientific's initiatives to revive its top line, we remain cautious as the company's core segments, ICDs and DES (contributing 35% of sales), continued to witness several headwinds. Due to lower procedure volume and pricing pressure in the US, the company's share in the defibrillator market dropped by 100 basis points compared with the year-ago period.

The CRM market is expected to remain sluggish throughout 2013. The DES business in the US continues to witness pricing pressure, lower procedural volume and lower penetration rates, although the situation is improving gradually. As a result, the company's top line continues to remain under pressure.

Earnings Whispers?

Our proven model does not conclusively show that Boston Scient! ific is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP (Read: Zacks Earnings ESP: A Better Method ) and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here as you will see below.

Negative Zacks ESP: The stock has an ESP of -6.25%.

Zacks Rank #4 (Sell): Boston scientific's Zacks Rank #4 (Sell) when combined with a negative ESP makes surprise prediction difficult. We caution against stocks with Zacks Ranks #4 and #5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

Boston Scientific is due to report its second quarter 2013 results in late Jul/early Aug. Currently, the Zacks Consensus Estimate is pegged at 16 cents per share.

Other Stocks to Consider

Among other stocks in the industry, Natus Medical (BABY), Wright Medical Group Inc. (WMGI) and ResMed Inc. (RMD) appear impressive. These stocks carry a Zacks Rank #1 (Strong Buy).

Best Energy Stocks To Buy For 2014

Liquids-focused driller Gulfport Energy (NASDAQ: GPOR  ) is a very interesting energy company. Unlike most North American production companies, Gulfport doesn't produce a lot of natural gas. In fact, last year 93% of its production was oil and NGLs, which provide the company with high-margin cash flow. Investors are starting to take notice and the stock has more than doubled over the past year. However, I see three very compelling reasons to own Gulfport.

Very oily production 
As I mentioned, 93% of Gulfport's production last year consisted of oil and NGLs. That's very impressive when you consider that most producers would love it if just half of their production were liquids. For perspective, despite investing heavily to grow its liquids production, 74% of Chesapeake Energy's (NYSE: CHK  ) production is still natural gas. Even Devon Energy's (NYSE: DVN  ) natural gas production is still more than half at 59% despite double-digit oil production growth. 

Best Energy Stocks To Buy For 2014: Samson Oil and Gas Ltd (SSN)

Samson Oil & Gas Limited (Samson), incorporated on April 6, 1979, is engaged in exploration and development of oil and natural gas properties in the United States. Samson owns a working interest in each of its three material producing properties, through which it has entered into operating agreements with third parties under which the oil and gas are produced and sold. The Company also has 100% working interest in one exploration property and 50% to 100% in a second property. As of June 30, 2012, the Company’s properties included North Stockyard Project; State GC Oil and Gas Field, New Mexico; Davis Bintliff (Sabretooth Prospect), Brazoria County, Texas; Hawk Springs Project, Goshen County, Wyoming, and Roosevelt Project, Roosevelt County, Montana. As of June 30, 2012, the Company along with its subsidiaries produced approximately 87,956 barrels of oil and 214,463 thousand cubic feet of gas.

North Stockyard Project -Williston Basin, North Dakota

Samson has 34.5% working interest in 3,303 acres adjacent to the North Stockyard Oil Field, which is located in the Williston Basin in North Dakota and is operated by Zavanna LLC. Together with the Company’s working interest owners, it has drilled seven wells in this field, six in the Bakken formation and one in the Mission Canyon formation. During July 2012, the Harstad #1-15H well averaged 15 barrels of oil per day (BOPD). The Leonard-23H (10% working interest, 37.5% after non-consent penalty) is a Mississippian Middle Bakken Formation. In July 2011, this well averaged 46 barrels of oil per day. The Company drilled its third Bakken well in the North Stockyard Field, the Gary-24H (37% working interest). During July 2012, this well averaged 75 BOPD. It drilled its fourth Bakken well in the North Stockyard Field, the Rodney-14H (27% working interest). In July 2011, this well averaged 92 BOPD. It drilled its fifth Bakken well in the North Stockyard Field in Williams County, North Dakota, the Earl 1-13H (32% working interest). In July 2011, the well averaged 193 BOPD. In June 2011, it drilled its sixth Mississippian Bakken well in the North Stockyard field in Williams County, North Dakota, the Everett 1-15H (26% working interest). As of June 30, 2012, the North Stockyard project had net proved reserves of 598,500 barrels of oil and 757,800 thousand cubic feet (of natural gas).

State GC Oil and Gas Field, New Mexico

The State GC oil and gas field is located in Lea County, New Mexico, and covers approximately 600 acres. As of June 30, 2012, the field had two wells, the State GC#1 and State GC#2. Average daily production during the year ended June 30, 2012 from the State GC oil and gas field was approximately 43 BOPD and 37 million standard cubic feet per day. As of June 30, 2012, the State GC oil and gas field had net proved reserves of 65,500 barrels of oil and 87,300 thousand cubic feet (of natural gas).

Davis Bintliff #1 Well (Sabretooth Prospect), Brazoria County, Texas

The Davis Bintliff #1 well is operated by Davis Holdings. During the year ended June 30, 2012, this well averaged 29 BOPD and 2.61million cubic feet per day. As of June 30, 2012, the Davis Bintliff well had net proved reserves of 700 barrels of oil and 66,400 Thousand cubic feet (of natural gas).

Hawk Springs Project, Goshen County, Wyoming

The Company has 37.5%-100% working interest in Hawk Springs Project. The Spirit of America 1 replacement well, Spirit of America 2, was successfully drilled to a total depth of 10,634 feet during the fiscal year ended June 30, 2012 (fiscal 2012).

Roosevelt Project, Roosevelt County, Montana

The well was drilled to a total measured depth of 14,972 feet with the horizontal lateral remaining within the target zone for the entire lateral length. approximately 3,425 barrels of oil have been produced.

Best Energy Stocks To Buy For 2014: Canadian Solar Inc.(CSIQ)

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

Advisors' Opinion:
  • [By Glenn]

    Canadian Solar, Inc.(NASDAQ: CSIQ) closing price in the stock market Tuesday, Jan. 3, was $2.80. CSIQ is trading 7.52% above its 50 day moving average and -50.19% below its 200 day moving average. CSIQ is -83.32% below its 52-week high of $16.79 and 35.27% above its 52-week low of $2.07. CSIQ's PE ratio is N/A and its market cap is $120.83M .

    Canadian Solar, Inc. engages in the design, development, manufacture, and sale of solar power products in Canada and internationally. The company offers solar cell and solar module products that convert sunlight into electricity for various uses. Its products include a range of standard solar modules for use in a range of residential, commercial, and industrial solar power generation systems.

Best Energy Stocks To Buy For 2014: Airgas Inc.(ARG)

Airgas, Inc., through its subsidiaries, distributes industrial, medical, and specialty gases, as well as hardgoods in the United States. The company offers various gases, including nitrogen, oxygen, argon, helium, and hydrogen; welding and fuel gases, such as acetylene, propylene, and propane; and carbon dioxide, nitrous oxide, ultra high purity grades, special application blends, and process chemicals. Its hardgoods products comprise welding consumables and equipment, safety products, and construction supplies, as well as maintenance, repair, and operating supplies. The company also engages in the rental of gas cylinders, cryogenic liquid containers, bulk storage tanks, tube trailers, and welding and welding related equipment. In addition, the company manufactures and distributes liquid carbon dioxide, dry ice, nitrous oxide, ammonia, refrigerant gases, and atmospheric merchant gases. It serves repair and maintenance, industrial manufacturing, energy and infrastructure co nstruction, medical, petrochemical, food and beverage, retail and wholesale, analytical, utilities, and transportation industries. The company operates an integrated network of approximately 1100 locations, including branches, retail stores, packaged gas fill plants, specialty gas labs, production facilities, and distribution centers. Additionally, it provides retail solutions to retail customers, such as florists, grocers, restaurants and bars, tire and automotive service centers, and others. The company markets its products through multiple sales channels, including branch-based sales representatives, retail stores, strategic customer account programs, telesales, catalogs, e-business, and independent distributors. Airgas, Inc. was founded in 1982 and is based in Radnor, Pennsylvania.

Advisors' Opinion:
  • [By Tom Bishop]

    Airgas Inc. (NYSE:ARG) was also the subject of a takeover bid, this one a little unwelcome. The company received a bid from Air Products (NYSE:APD) at $60 per share, a 38% premium from where the stock had been trading. 

    Airgas rejected the offer claiming that the offer "very significantly undervalues Airgas and its future prospects and is not in the best interests of Airgas stockholders." Airgas finished up 39% in February 2010, and is currently trading at $65 per share as the market is anticipating a possible higher bid.

Best Energy Stocks To Buy For 2014: SunPower Corp (SPWR)

SunPower Corporation, incorporated in April 1985, is a vertically integrated solar products and services company that designs, manufactures and delivers solar electric systems worldwide for residential, commercial, and utility-scale power plant customers. The Company operates in two business segments: the Utility and Power Plants (UPP) Segment and the Residential and Commercial (R&C) Segment. The UPP Segment refers to its solar products and systems business, which includes power plant project development and project sales, turn-key engineering, procurement and construction (EPC) services for power plant construction, and power plant operations and maintenance (O&M) services. UPP Segment also sells components, including huge volume of sales of solar panels and mounting systems to third parties, sometimes on a multi-year, firm commitment basis. The R&C Segment focuses on solar equipment sales into the residential and small commercial market through its third-party global dealer network, as well as direct sales and EPC and O&M services in the United States and Europe for rooftop and ground-mounted solar power systems for the new homes, commercial and public sectors. In May 2012, K Road Power Holdings, LLC (K Road) and SunPower Corp announced that K Road acquired the 25-megawatt (AC) McHenry Solar Project, which the Company designed. In January 2013, the Company MidAmerican Solar acquired the 579-megawatt Antelope Valley Solar Projects (AVSP), two co-located projects in Kern and Los Angeles Counties in Calif from SunPower.

In January 2012, the Company completed its acquisition of the wholly owned Total SA subsidiary Tenesol SA, a global solar provider. In September 2011, NRG Energy Inc. acquired 250 megawatt California Valley Solar Ranch (CVSR) project from SunPower. In June 2011, the Company introduced SunPower E20 Series Solar Panel (E20) series. The Company’s customers in its UPP Segment include investors, financial institutions, project developers, electric utilities, and independent power producers in the United States, Europe, and Asia. In its R&C Segment, the Company primarily sells its products to commercial and governmental entities, production home builders, and its third-party global dealer network serving residential owners and small commercial building owners.

Solar Cells

The A-300 solar cell is a silicon solar cell with a specified power value of 3.1 watts and a conversion efficiency averaging between 20.0% and 21.5%. The Company’s A-330 solar cell delivers 3.3 watts with a conversion efficiency of up to 22.7%.

Solar Panels

The Company’s SunPower solar panel series include solutions, such as SunPower E18 Series Solar Panel (E18), SunPower E19 Series Solar Panel (E19), and SunPower E20 Series Solar Panel (E20). Available in a 72-cell configuration, the E18 series panel uses its A300 all back-contact solar cells and delivers a total panel conversion of 18.1% to 18.5%. Available in a 72, 96, and 128-cell configuration, the E19 series panel uses its A300 all back-contact solar cells and delivers total panel conversion of 19.3% to 19.7%. Available in a 96-cell configuration, the E20 series panel uses its A-330 all back-contact solar cells and delivers total panel conversion of up to 20.1%.


The Company sells a line of SunPower branded inverters. The inverters are manufactured by third parties.

Roof Mounted Products

The roof mounted products include SunPower T-5 Solar Roof Tile System (T-5), SunPower T-10 Commercial Solar Roof Tiles (T-10), PowerGuard Roof System (PowerGuard) and SunTile Roof Integrated System (SunTile). Tilted at a 5-degree angle, the T-5 roof tile is a non-penetrating photovoltaic rooftop product that combines solar panel, frame, and mounting system. The T-5 solar roof tile systems are primarily sold through its R&C Segment.

Tilted at a 10-degree angle, the T-10 commercial solar roof tiles is a non-penetrating panel interlock system. Depending on geographical location and local climate conditions, this can allow for the generation of up to 10% more annual energy output than traditional flat roof-mounted systems. The T-10 commercial solar roof tile is primarily sold through its R&C Segment.

PowerGuard is a non-penetrating roof-mounted solar panel that delivers electricity while insulating and protecting the roof membrane from ultraviolet rays and thermal degradation. The PowerGuard roof system is primarily sold through its R&C Segment. SunTile solar shingles are designed to replace multiple types of roof panels, including the common concrete flat, low and high profile S tile and composition shingles. The SunTile roof system is also sold through its R&C Segment.

Ground Mounted Products

The ground mounted products include SunPower T-0 Tracker (T-0) & SunPower T-20 Tracker (T-20), SunPower Oasis Power Plant (SunPower Oasis), SunPower C-7 Tracker (C-7), and Fixed Tilt and SunPower Tracker Systems for Parking Structures. The T-0 and T-20 trackers are single-axis tracking systems that automatically pivot solar panels to track the sun's movement throughout the day. This tracking feature increases the amount of sunlight that is captured and converted into energy by up to 30% over flat or fixed-tilt systems, depending on geographic location and local climate conditions. A single motor and drive mechanism can control 10 to 20 rows, or more than 200 kilo watts of solar panels. The T-0 and T-20 trackers have been installed in a range of geographical markets principally in the United States, Germany, Italy, Portugal, South Korea, and Spain. The T-0 and T-20 trackers are sold through both its UPP and R&C Segments.

The Oasis is a solar power block that scales from 1 mega watts distributed installations to central station power plants. Oasis provides a way to deploy utility-scale solar power systems, streaming the development and construction process while optimizing the use of available land. The SunPower Oasis is sold through its UPP Segment. The C-7 combines a horizontal single-axis tracker with rows of parabolic mirrors, reflecting light onto linear arrays of its solar cells. The C-7 tracker is sold through its UPP Segment. SunPower has developed designs for solar power systems for parking structures in multiple configurations. These dual-use systems typically incorporate solar panels into the roof of a carport or similar structure to deliver onsite solar power while providing shade and protection. They are suited for parking lots adjacent to facilities. Fixed Tilt and SunPower Tracker Systems for parking structures are sold through both its UPP and R&C Segments.

Other System Offerings

SunPower’s metal roof system is designed for sloped-metal roof buildings, which are used in some winery and warehouse applications. This solar power system is designed for rapid installation. It also offers other architectural products, such as day lighting with translucent solar panels.

Balance of System Components

Balance of system components are components of a solar power system other than the solar panels. It includes SunPower branded inverters, mounting structures, charge controllers, grid interconnection equipment, and other devices depending on the specific requirements of a particular system and project.

The Company competes with Canadian Solar Inc., JA Solar Holdings Co., Kyocera Corporation, Mitsubishi Corporation, Q-Cells AG, Sanyo Corporation, Sharp Corporation, SolarCity Corporation, SolarWorld AG, Sungevity, Inc., SunRun, Inc., Suntech Power Holdings Co. Ltd., Trina Solar Ltd., Yingli Green Energy Holding Co. Ltd., Abengoa Solar S.A., Acconia Energia S.A., AES Solar Energy Ltd., Chevron Energy Solutions, EDF Energy plc, First Solar Inc., NextEra Energy, Inc., OPDE Group, NRG Energy, Inc., Recurrent Energy, Sempra Energy, Skyline Solar, Inc., Solargen Energy, Inc., Solaria Corporation, SolFocus, Inc., SunEdison and Tenaska, Inc.