Thursday, October 31, 2013

Mastercard Inc (MA) Q3 Earnings Preview: What To Expect?

MasterCard Incorporated (NYSE: MA) will release its third-quarter financial results on Oct.31. The company will host a conference call to discuss these results at 9:00 a.m. Eastern Time.

MasterCard is a global payment processing leader and one of the largest global payment solutions companies. The company's payments processing network, connects consumers, financial institutions, merchants, governments and businesses in more than 210 countries and territories.

Wall Street expects the payment processing firm to earn $6.94 a share, according to analysts polled by Thomson Reuters. The consensus estimate implies growth of 12.5 percent from $6.17 a share earned last year.

Mastercard has always impressed Street with its consistent upside surprises and its earnings have managed to edge past estimates in all of the past four quarters. The beat margins were in the range of 0.80 percent to 10.5 percent.

Over the past 90 days, the average earnings estimate has gone up by 2 cents, and six analysts raised their earnings view on the company in the past 30 days. This suggests analysts are expecting a bullish quarter from the company.

Quarterly sales are expected to grow 11.2 percent to $2.13 billion from $1.92 billion in the same quarter last year. In the past four quarters, average revenue growth came in at 9.5 percent.

Mastercard results should benefit from an improving consumer spending environment. Like its peer Visa, Inc. (NYSE:V), Mastercard continue to reap profit as more consumers now prefer electronic payments instead of cash and checks, notwithstanding the uncertain economic conditions that slowed growth.

Earnings of credit card processors are one of the key barometers to gauge consumer spending. During the first two months of the quarter, the consumer sentiment fared well but diminished in the month of September due to the government shutdown that curbed spending.

In August, consumer spending in the U.S. rose 0.3 percent in August, according to the Commerc! e Department while incomes rose 0.4 percent. However, several surveys show that consumers suffered during the later periods of the quarter.

Confidence fell in September as consumers were more likely to anticipate a slower pace of economic growth, fewer job opportunities, and less favorable personal financial prospects, according to a survey by Thomson Reuters/University of Michigan. The index fell to 77.5 in September from 82.1 in August and last September's 78.3.

Meanwhile, investors will be watching for certain performance metrics including payments volume growth, processed transactions and cross-border volume growth, which reflects the company's strength in emerging markets.

For the second quarter, MasterCard reported 13 percent increase in gross dollar volume, on a local currency basis, to just over $1 trillion. Cross-border volumes rose 17 percent and processed transactions increased 11 percent to 9.5 billion. These factors were partially offset by an increase in rebates and incentives.

Worldwide purchase volume during the second quarter grew 12 percent on a local currency basis to $734 billion. As of June 30, 2013, the company's customers had issued 1.9 billion MasterCard and Maestro-branded cards.

The Street and investors will focus on updated guidance, macro view/global commentary and color on volume and transaction growth into July. In addition, they will look at cross-border trends and pricing rebates.

Purchase, New York-based MasterCard is a credit transaction processing company, which means it need not worry about default risk that falls on the banks which lends credit to their consumers. As such, MasterCard needs to concentrate only on increasing market share and expand into new markets (read emerging markets).

Based on comments from MasterCard CFO Martina Hund-Mejean, 85 percent of all transactions worldwide are still executed using cash, which leaves payment processors with a huge pool of untapped market. As a result, the company's comments over t! he market! share gains in the emerging and developed markets would be a key focus.

For the second quarter, MasterCard reported net income of $848 million or $6.96 a share, compared to $700 million, or $5.55 a share, last year. Net revenues for the quarter grew 15 percent to $2.10 billion.

Shares of MasterCard have gained 20 percent since its second quarter report and 59 percent in the last year and 44 percent year-to-date. MA shares traded between $451.18 and $737.83 during the past 52-weeks.

Analysts, generally, have a positive opinion on MasterCard as 23 out the 33 analysts covering the stock have a "strong buy" or "buy" rating while the remaining 10 rate it as "hold." There are no "sell" ratings on the stock.

Can Philip Morris Continue This Bull Run?

With shares of Philip Morris (NYSE:PM) trading around $96, is PM an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

Philip Morris manufactures and sells cigarettes and other tobacco products. The company's portfolio of international and local brands include Marlboro, Merit, Parliament, Virginia Slims, L&M, Chesterfield, Bond Street, Lark, Muratti, Next, Philip Morris, and Red & White. The company sells its products in approximately 180 countries in the European Union, Eastern Europe, the Middle East, Africa, Asia, Latin America, and Canada. Through its established brands, Philip Morris provides satisfaction to large base of consumers that purchase its products on a daily basis. During good and bad times, the products produced and sold by the company will continue to acquire customers well into the future.

NEW! Discover a new stock idea each week for less than the cost of 1 trade. CLICK HERE for your Weekly Stock Cheat Sheets NOW!

T = Technicals on the Stock Chart are Strong

Philip Morris stock has seen a monster uptrend since reaching lows in early 2009. The stock is currently trading at all-time high prices, a feat it has reached over the last five years. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, Philip Morris is trading above its rising key averages which signal neutral to bullish price action in the near-term.


(Source: Thinkorswim)

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

Implied Volatility (IV)

30-Day IV Percentile

90-Day IV Percentile

Philip Morris Options




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

Put IV Skew

Call IV Skew

May Options



June Options



As of today, there is an average demand from call buyers or sellers and low demand by put buyers or high demand by put sellers, all neutral to bullish over the next two months. To summarize, investors are buying a small amount of call and put option contracts and are leaning neutral to bullish over the next two months.

On the next page, let’s take a look at the earnings and revenue growth rates and the conclusion.

E = Earnings Are Mixed Quarter-Over-Quarter

Rising stock prices are often strongly correlated with rising earnings and revenue growth rates. Also, the last four quarterly earnings announcement reactions help gauge investor sentiment on Philip Morris’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for Philip Morris look like and more importantly, how did the markets like these numbers?

2013 Q1

2012 Q4

2012 Q3

2012 Q2

Earnings Growth (Y-O-Y)





Revenue Growth (Y-O-Y)





Earnings Reaction





Philip Morris has seen mixed earnings and revenue figures over the last four quarters. From these figures, the markets have had mixed feelings about Philip Morris’s recent earnings announcements.

NEW! Discover a new stock idea each week for less than the cost of 1 trade. CLICK HERE for your Weekly Stock Cheat Sheets NOW!

P = Average Relative Performance Versus Peers and Sector

How has Philip Morris stock done relative to its peers, British American Tobacco (NYSE:BTI), Altria Group (NYSE:MO), Reynolds American (NYSE:RAI), and sector?

Philip Morris

British American Tobacco

Altria Group

Reynolds American


Year-to-Date Return






Philip Morris has been an average relative performer, year-to-date.


Philip Morris provides cigarette and tobacco products through established brands to an increasing consumer base around the world. The stock has done very well over the last few years and is now trading at all-time high prices. Earnings and revenue figures have been increasing and decreasing, in recent quarters, which has confused investors a bit. Relative to its strong peers and sector, Philip Morris has been an average year-to-date performer. Look for Philip Morris to OUTPERFORM.

Wednesday, October 30, 2013

Facebook Loses Gains as Teens Flee

Comments on teen usage of Facebook have been added to this story, along with the company's updated share price.

NEW YORK (TheStreet) -- Despite the impressive earnings beat, Facebook (FB) shares were only up 0.33% to $49.17 after the company noted teens are using the service less.

CFO David Ebersman said that teens are using the service the same, but daily users in the teen demographic slid from the second to the third quarter. Ebermsan noted there isn't an entirely accurate way to measure this, but the company is working on internal metrics to ascertain what is going on.

These comments helped fuel a sell-off in the stock, which was up as much as 13% in after-hours trading, nearly giving up all of its gains following the earnings results. Facebook reported earnings of 25 cents a share on $2.02 billion in revenue, as mobile revenue surged to 49% of total advertising revenue, approximately $881 million. Analysts surveyed by Thomson Reuters were looking for earnings of 19 cents per share on $1.91 billion in revenue. The company noted it generated $1.8 billion in advertising revenue, up 66% year over year. Payments and other fees revenue came in at $218 million. The company ended the quarter with 1.19 billion monthly active users (MAUs), up 18% year-over-year, with daily active users (DAUs) up 25% during the same time frame to 728 million users. Mobile MAUs grew 45% year-over-year to 874 million, with 507 million of them using the service daily at the end of the quarter. Shares of Facebook fell during the regular session, losing 0.76% to close at $49.02. --Written by Chris Ciaccia in New York >Contact by Email. Follow @Chris_Ciaccia

Phillips 66 Sends a Warning Sign to Refiners

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

At 2 p.m. EDT, the Fed released a policy statement that said the economy was too weak to start tapering. That promptly caused the Dow Jones Industrial Average (DJINDICES: ^DJI  ) to fall from breakeven to a loss of 0.24% near the end of trading. The market's reaction has ranged from exuberance to fearfulness when monetary stimulus is extended, so I don't think the short-term reaction is anything to lose sleep over.

Energy stocks are struggling along with the rest of the market, and one driver is oil, falling 1.3% today thanks to a 4.1 million-barrel rise in U.S. oil inventories. The energy sector is also being hurt by weak earnings from Phillips 66 (NYSE: PSX  ) , which should send a warning signal to some of the major refiners.

Phillips 66 said third-quarter profit fell from $1.6 billion, or $2.51 per share, in the year-ago quarter to just $535 million, or $0.87 per share, last quarter. Management said this owed primarily to a 40% drop in the crack spread, or the difference between the price of gasoline and the price of oil. You can see below that oil is up 15% over the past year, while gas prices are down 5.6%.

WTI Crude Oil Spot Price Chart

WTI Crude Oil Spot Price data by YCharts.

Big oil companies and refiners ExxonMobil (NYSE: XOM  ) and Chevron (NYSE: CVX  ) will both report earnings in the next two days, and they'll likely face the same challenges as Phillips 66. The difference is that they have much more exposure to oil exploration, which is doing quite well on rising oil prices. This is one of the advantages of investing in big oil companies: They have exposure to both the good and the bad in the market.

Long-term challenges facing refiners
The tough challenge facing U.S. refiners in the long term is that gas consumption in the U.S. is falling, while oil prices are rising. The rise in the price of oil is due to marginally higher global demand and, more importantly, more expensive oil-extraction.

I don't see these trends changing, which will continue to put pressure on the refining business.

Refiners are down, but U.S. energy production is booming
New production methods have opened up new energy investment opportunities, and finding the right plays while historic amounts of capital expenditures are flooding the industry will pad your investment nest egg. For this reason, the Motley Fool is offering a comprehensive look at three energy companies set to soar during this transformation in the energy industry. To find out which three companies are spreading their wings, check out the special free report, "3 Stocks for the American Energy Bonanza." Don't miss out on this timely opportunity; click here to access your report -- it's absolutely free. 

Tuesday, October 29, 2013

Yelp Holders Yelping on Wider Loss and Stock Offering

Yelp Inc. (NYSE: YELP) may have the greatest peer-review website out there, but its earnings report is leaving a lot of investors holding the bag after a serious surge. Yelp’s quarterly loss widened out to -$2.3 million. This comes to -$0.04 in earnings per shares (EPS). The loss a year ago was only at -$0.03 EPS and the Thomson Reuters consensus estimate was only at -$0.01 EPS.

An issue that may further cloud the earnings report is that Yelp has telegraphed that it plans to sell up to $250 million in Class A shares.

Where the story gets better is on revenue growth. Sales were up 68% to $61.2 million, above the $59.4 million expected by analysts. Yelp’s SG&A, measuring sales and marketing, were up about 60% to $34.1 million. Monthly unique users rose by 41^ to some 117 million. Business accounts were up 61%. Roughly 42% of ads were served up to mobile devices, and about 62% of the search came from mobile as well.

Yelp offered up guidance for the coming quarter of $66 million to $67 million in revenue versus analyst expectations of about $64.8 million.

Where things get dicey for Yelp is in how much the stock has risen, on top of that stock offering. Shares were up 1.8% at $68.83 at the closing bell versus a 52-week range of $16.32 to $75.37. That is a gain of over 300% from the end of 2012. With a market cap of $4.5 billion at the close, Yelp traded at 20-times expected 2013 revenue ahead of the earnings report.

Yelp’s stock price was already lower by about 2% to 3% after the reported earnings, but news of this stock offering after such a huge run up in price now has shares down close to 6% at $65.30 in the after-hours trading session.

Top 5 Energy Stocks To Own For 2014

Over the past few weeks I've been drilling down into�LINN Energy's (NASDAQ: LINE  ) recent response�(link opens a PDF)�to short seller comments about its business practices. The goal here is to better understand what the company is trying to relay to investors. Today, I want to drill down into what the company has to say about its cash flow.

The issue is that some investors and analysts don't like how LINN accounts for the puts it bought as part of its hedging strategy. As I'm sure you know, hedging is an integral part of the thesis of an investment in LINN. It the main reason why I think its distribution is safer than its peers.

There are many ways to hedge production and each way has pros and cons. For the most part, LINN hedges with swaps which are fixed price contracts. However, in the past the company has bought puts on a portion of its production which had an immediate cost but left that production open to upside if prices improved. Some investors have questioned the way LINN accounted for the cost of these puts. With so many other hedging options at its disposal, LINN decided to do away with buying puts because they simply are not worth the hassle.

Top 5 Energy Stocks To Own 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�� 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�� 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 Jul! y 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.

Advisors' Opinion:
  • [By James E. Brumley]

    Had Samson Oil & Gas Limited (NYSEMKT:SSN) made the late-July surge and subsequent early-August pullback and then gotten stuck in the mud again, I might not even bother taking a look at it. That's not how it happened though. Since the pullback, SSN has perked up again, perhaps not as hot as it was with the initial rally at the end of last month, but more than hot enough to get my attention. I suspect another surge - perhaps a longer-lasting surge - is in the cards.

Top 5 Energy Stocks To Own For 2014: (NFYEF)

New Flyer Industries, Inc. a Canadian Income Fund, operates as an unincorporated open-ended trust in Canada. The fund engages in the manufacture and sale of heavy duty transit buses in the United States and Canada. It uses various propulsion systems, including diesel electric or gasoline electric hybrid systems, compressed natural gas or liquid natural gas systems, and zero emission electric trolleys in heavy duty transit buses. The fund also provides aftermarket parts and services, including parts distribution, field services, support documentation, and training, as well as bus parts. It supplies heavy duty transit buses primarily to municipal and local transit authorities. New Flyer was founded in 1930 and is headquartered in Winnipeg, Canada.

10 Best Clean Energy Stocks To Watch Right Now: Canadian Solar Inc.(CSIQ)

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

Advisors' Opinion:
  • [By Travis Hoium]

    Canadian Solar (NASDAQ: CSIQ  ) made a big splash this week by announcing a partnership with Samsung Renewable Energy to build manufacturing capacity in Canada. The venture will supply modules to at least 200 MW worth of projects Samsung is building and will probably grow that base in the future. �

  • [By Harry Boxer]

    HARRY:  I think it could be double or triple in the next you know year or two.  The lower priced ones that I like are Canadian Solar (CSIQ), SUNE that’s SunEdison, and I also SolarPower (SPWY), SunPower excuse me.

Top 5 Energy Stocks To Own For 2014: S&P 500/Barra Value(SU)

Suncor Energy Inc., together with its subsidiaries, operates as an integrated energy company. The company involves in the development of petroleum resource basins in Canada's Athabasca oil sands; acquisition, exploration, development, production, and marketing of crude oil and natural gas in Canada and internationally; transportation and refining of crude oil; and marketing of petroleum and petrochemical products primarily in Canada. Its Oil Sands segment produces bitumen recovered from oil sands through mining and in-situ technology, and upgrades it into refinery feedstock, diesel fuel, and by-products. This segment?s products include gasoline and distillates. The company?s Natural Gas segment acquires, explores, develops, and produces natural gas, natural gas liquids, oil, and by-products from reserves located primarily in western Canada, the Northwest Territories, Alaska, and the Arctic Islands. Its International and Offshore segment engages in the exploration and pro duction of oil and gas in offshore Newfoundland and Labrador, in the North Sea, and in Libya and Syria. The company?s Refining and Marketing segment refines crude oil at Suncor's refineries in Edmonton, Alberta; Montreal, Quebec; and Sarnia, Ontario in Canada, as well as in Commerce City, Colorado into a range of petroleum and petrochemical products for sale to retail, commercial, and industrial customers. It also transports crude oil through pipelines in eastern and western Canada, as well as through wholly-owned pipelines in Wyoming and Colorado; and produces specialty lubricants and waxes. In addition, this segment operates retail sites in Canada under the Petro-Canada brand; and in Colorado under Phillips 66 and Shell brands. Suncor Energy Inc. also engages in third-party energy trading activities. The company was formerly known as Suncor Inc. and changed its name to Suncor Energy Inc. in April 1997. Suncor Energy Inc. was founded in 1953 and is headquartered in Calgary , Canada.

Advisors' Opinion:
  • [By Arjun Sreekumar]

    For instance, Total SA (NYSE: TOT  ) recently abandoned its Voyageur Upgrader project, deciding to sell its 49% stake in the project to its joint-venture partner, Suncor Energy (NYSE: SU  ) , for $500 million. Total defended the move to scrap Voyageur ��a 200,000-barrels-a-day facility designed to "upgrade" bitumen into crude oil ��by saying that it was "no longer justified from a strategic and economic" standpoint.

  • [By Arjun Sreekumar]

    For instance, Total SA (NYSE: TOT  ) recently threw in the towel on its Voyageur�Upgrader project, a 200,000-barrels-a-day facility that was designed to "upgrade" bitumen into crude oil. It sold its 49% stake in Voyageur to its joint venture partner, Suncor Energy (NYSE: SU  ) , for $500 million, arguing that the project was "no longer justified from a strategic and economic" standpoint. Not long after, Suncor also decided to abandon the project, for which it took a C$1.5 billion write-down.

  • [By Sara Murphy]

    A recent report from sustainable business advocate Ceres found wide discrepancies in disclosure quality among oil and gas majors. Ceres found that BP (NYSE: BP  ) , Suncor (NYSE: SU  ) , and Eni (NYSE: E  ) provided the best disclosure overall, while ExxonMobil (NYSE: XOM  ) and Apache (NYSE: APA  ) did the worst.

Top 5 Energy Stocks To Own For 2014: ConocoPhillips(COP)

ConocoPhillips operates as an integrated energy company worldwide. The company?s Exploration and Production (E&P) segment explores for, produces, transports, and markets crude oil, bitumen, natural gas, liquefied natural gas, and natural gas liquids. Its Midstream segment gathers, processes, and markets natural gas; and fractionates and markets natural gas liquids in the United States and Trinidad. The company?s Refining and Marketing (R&M) segment purchases, refines, markets, and transports crude oil and petroleum products, such as gasolines, distillates, and aviation fuels. Its Chemicals segment manufactures and markets petrochemicals and plastics. This segment offers olefins and polyolefins, including ethylene, propylene, and other olefin products; aromatics products, such as benzene, styrene, paraxylene, and cyclohexane, as well as polystyrene and styrene-butadiene copolymers; and various specialty chemical products comprising organosulfur chemicals, solvents, catalyst s, drilling chemicals, mining chemicals, and engineering plastics and compounds. The company?s Emerging Businesses segment develops new technologies and businesses. It focuses on power generation; and technologies related to conventional and nonconventional hydrocarbon recovery, refining, alternative energy, biofuels, and the environment. This segment also offers E-Gas, a gasification technology producing high-value synthetic gas. ConocoPhillips was founded in 1917 and is based in Houston, Texas.

Advisors' Opinion:
  • [By Jon C. Ogg]

    Some companies, like ConocoPhillips (NYSE: COP), can afford to offer investors a 3.9% dividend yield. While its dividend is among the highest in the S&P 500, ConocoPhillips likely�could pay out even more, since it is among the most profitable companies in the country.

  • [By Arjun Sreekumar]

    Similarly, ConocoPhillips (NYSE: COP  ) recently said it is suspending plans to drill in Alaskan waters in 2014 because of regulatory, permitting, and other uncertainties, while Statoil (NYSE: STO  ) announced last year that it will postpone drilling in the American Arctic until 2015. To be sure, these companies have good reasons to be hesitant in their Arctic ambitions.

  • [By Wallace Witkowski]

    Plus, more than 120 companies on the S&P 500 report next week with notable releases from Apple Inc. (AAPL) and Biogen Idec Inc. (BIIB) �on Monday; Gilead Sciences Inc. (GILD) �and Allergan Inc. (AGN) �on Tuesday; Starbucks Corp. (SBUX) �, General Motors Co. (GM) , and Comcast Corp. (CMCSA) �on Wednesday; along with MasterCard Inc. (MA) �and ConocoPhillips (COP) �on Thursday.

Monday, October 28, 2013

Is Groupon A Risky Investment?

With shares of Groupon (NASDAQ:GRPN) trading around $7, is GRPN an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

Groupon offers online retail services. The company provides daily deals on the stuff to do, eat, see, and buy in more than 500 markets in 44 countries. It provides an online service that lets groups of people create campaigns to pool resources, including money and personal commitments to take action, and it allows users to sell products and transact business online. Groupon is poised to see rising traffic as it provides consumers with ways to save on common shopping experiences and activities. Look for Groupon to continue to grow and provide consumers and businesses with new opportunities.

NEW! Discover a new stock idea each week for less than the cost of 1 trade. CLICK HERE for your Weekly Stock Cheat Sheets NOW!

T = Technicals on the Stock Chart are Strong

Groupon stock has witnessed its stock almost double in the last year or so. The stock is currently still trending higher but may need some time to consolidate. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, Groupon is trading above its rising key averages which signal neutral to bullish price action in the near-term.


(Source: Thinkorswim)

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

Implied Volatility (IV)

30-Day IV Percentile

90-Day IV Percentile

Groupon Options




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

Put IV Skew

Call IV Skew

July Options



August Options



As of today, there is an average demand from call buyers or sellers and low demand by put buyers or high demand by put sellers, all neutral to bullish over the next two months. To summarize, investors are buying a significant amount of call and put option contracts and are leaning neutral to bullish over the next two months.

On the next page, let’s take a look at the earnings and revenue growth rates and the conclusion.

E = Earnings Are Improving Quarter-Over-Quarter

Rising stock prices are often strongly correlated with rising earnings and revenue growth rates. Also, the last four quarterly earnings announcement reactions help gauge investor sentiment on Groupon’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for Groupon look like and more importantly, how did the markets like these numbers?

NEW! Discover a new stock idea each week for less than the cost of 1 trade. CLICK HERE for your Weekly Stock Cheat Sheets NOW!

2013 Q1

2012 Q4

2012 Q3

2012 Q2

Earnings Growth (Y-O-Y)





Revenue Growth (Y-O-Y)





Earnings Reaction





Groupon has seen improving earnings and rising revenue figures over the last four quarters. From these numbers, the markets have had mixed feelings about Groupon’s recent earnings announcements.

P = Excellent Relative Performance Versus Peers and Sector

How has Groupon stock done relative to its peers, Facebook (NASDAQ:FB), Google (NASDAQ:GOOG), United Online (NASDAQ:UNTD), and sector?




United Online


Year-to-Date Return






Groupon has been a relative performance leader, year-to-date.


Groupon allows consumers and companies to find a happy medium when transacting for goods or services. The stock has been on a strong path to higher prices since establishing lows just last year. Over the last four quarters, earnings have been improving while revenue figures have been steadily rising, overall producing mixed feelings among investors in the company. Relative to its peers and sector, Groupon has been a year-to-date performance leader. Look for Groupon to continue to OUTPERFORM.

Callable CDs: Check The Fine Print

If you're looking for bigger yields with limited risk, callable certificates of deposit (CD) might be right for you. They promise higher returns than regular CDs and are FDIC insured. However, you should be aware of a few things in the fine print before you turn your money over to the bank or brokerage firm. Otherwise, you could end up disappointed.

Just like a regular CD, a callable CD is a certificate of deposit that pays a fixed interest rate over its lifetime. The feature that differentiates a callable CD from a traditional CD is that the issuer owns a call option on the CD and can redeem, or "call," your CD from you for the full amount before it matures. In this article, we will provide you with some important terms to watch for in the fine print of your callable CDs should you decide to invest.

Important Terms
Callable CDs are similar in many ways to callable bonds.

Callable Date
This is the date on which the issuer can call your certificate of deposit. Let's say, for example, that the call date is six months. This means that six months after you buy the CD, the bank can decide whether it wants to take back your CD and return your money with interest. Every six months after the call date, the bank will have that same option again. We'll get to why the bank would want to call back the certificate shortly.

Maturity Date
The maturity date represents how long the issuer can keep your money. The farther the maturity date is in the future, the higher the interest rate you should expect to receive. Make sure you don't confuse maturity date with the call date. For instance, a two-year callable CD does not necessarily mature in two years. The "two years" refers to the time period you have before the bank can call the CD away from you. The actual amount of time you must commit your money could be much longer. It's common to find callable CDs with maturities in the range of 15 to 20 years.

To Call, or Not to Call
A change in prevailing interest rates is the main ! reason the bank or brokerage firm will recall your CD on the callable date. Basically, the bank will ask itself if it's getting the best deal possible based on the current interest rate environment.

Interest Rates Decline
If interest rates fall, the issuer might be able to borrow money for less than it's paying you. This means the bank will likely call back the CD and force you to find a new vehicle to invest your money in.

Example - Callable CD When Rates Decline
Suppose you have a $10,000 one-year callable CD that pays 5% with a five-year maturity. As the one-year call date approaches, prevailing interest rates drop to 4%. The bank has therefore dropped its rates too, and is only paying 4% on its newly issued one-year callable CDs.
"Why should I pay you 5%, when I can borrow the same $10,000 for 4%?" your banker is going to ask. "Here's your principal back plus any interest we owe you. Thank you very much for your business."

The good news is that you got a higher CD rate for one year. But what do you do with the $10,000 now? You've run into the problem of reinvestment risk.

Perhaps you were counting on the $500 per year interest ($10,000 x 5% = $500) to help pay for your annual vacation. Now you're stuck with just $400 ($10,000 x 4% = $400) if you buy another one-year callable CD. Your other choice is to try to find a place to put your money that pays 5% such as by purchasing a corporate bond - but that might involve more risk than you wanted for this $10,000.

Interest Rates Rise
If prevailing interest rates increase, your bank probably won't call your CD. Why would it? It would cost more to borrow elsewhere.

Example - Callable CD When Rates Rise
Let's look at your $10,000 one-year callable CD again. It's paying you 5%. This time, assume that prevailing rates have jumped to 6% by the time the callable date hits. You'll continue to get your $500 per year, even though newly issued callable CDs earn more. But what if you'd like to get your money out and reinvest at the new, higher rates?
"Sorry," your banker says. "Only we can decide if you'll get your money early."

Unlike the bank, you can't call the CD and get your principal back - at least not without penalties called early surrender charges. As a result, you're stuck with the lower rate. If rates continue to climb while you own the callable CD, the bank will probably keep your money until the CD matures.

What to Watch For
Who's Selling
Anyone can be a deposit broker to sell CDs. There are no licensing or certification requirements. This means you should always check with your state's securities regulator to see whether your broker or your broker's company has any history of complaints or fraud.

Early Withdrawal
If you want to get your money before the maturity date, there is a possibility you'll run into surrender charges. These fees cover the maintenance costs of the CD and are put in place to discourage you from trying to withdraw your money early. You won't always have to pay these fees; if you have held the certificate for a long enough time period, these fees will often be waived.

Check the Issuer
Each bank or thrift institution depositor is limited to $100,000 in FDIC insurance. There is a potential problem if your broker invests your CD money with an institution where you have other FDIC-insured accounts. If the total is more than $100,000, you run the risk of exceeding your FDIC coverage.

Wrap-up: Callable or Non-Callable?
With all of the extra hassle they involve, why would you bother to purchase a callable CD rather than a non-callable one? Ultimately, callable CDs shift the interest-rate risk to you, the investor. Because you're taking on this risk, you'll tend to receive a higher return than you'd find with a traditional CD with a similar maturity date.

Before you invest, you should compare the rates of the two products. Then, think about which direction you think interest rates are headed in the future. If you have concerns about reinvestment risk and prefer simplicity, callable CDs probably aren't for you.

Use this checklis! t when you are shopping for callable CDs to help you keep track of the important information.

Callable CD Checklist
Traditional CD Callable CD #1 Callable CD #2
Callable Date N/A
Maturity Date
Seller Background
Surrender Fee
Interest Rate

Wolff: No ads? Whose fault is that?

Editors complain. Mostly, in my experience, about writers, often about newsmakers, and frequently about uncooperative celebrities. But more and more, they complain about salesmen. As in, how come they can't sell ads?

For an editor of any stature — that is, one theoretically above the commercial fray — ads are like the weather. They affect you mightily, and you worry about them greatly, and, if called upon, you try to dress to sell them appropriately, but you have no control over them, and not much knowledge about why the day is sunny or dark — and it is only, nowadays, dark.

This past week in New York at Advertising Week, many editors, recruited to perform on various panels, could be found wandering the venues, expressing angst and frustration about advertisers and vast puzzlement about whatever happened to this once-reliable relationship.

There are, of course, ever-fewer newspaper and magazine ads. Hence, there are ever-fewer magazines and newspapers. Even still-thick magazines are giving away ads or discounting prices far more than they used to. Many publications, if you know how to count the ads, obviously lose money in far more issues than they make it.

Digital versions may be building large audiences, but the ads there yield far less revenue.

Who's to blame for this off-the-cliff fall in advertising in almost any reading-based venue is a reasonable and quite belated question.

The no-fault position, most recently pleaded by Newsweek's former editor, Tina Brown, defending herself in that debacle, is that the entire industry is challenged, that it is on the wrong side of history, that, in effect, print, or even words themselves, no longer have a commercial value.

RIEDER: The lost magic of Tina Brown

Then again, many people on the money-making side of the business — the publishers and salesmen charged with sucking up to ad agencies and media buyers and marketing executives — blame Tina Brown and, before her, the editors who ran Newsweek under its! former owner, The Washington Post.

Tina Brown attends the Women in the World Summit 2012 in New York on March 8, 2012.(Photo: Evan Agostini, AP)

They failed to make a magazine that the salesmen could sell.

As it happens, most of the blame for the decline of advertising support falls on the product, or on the general business environment, instead of on the people who are selling it.

Historically, media salesmen hardly had to sell their product. If you had to advertise, there really weren't all that many places to do it. Brands had a print budget, a radio budget and a television budget — and they spent it.

At The New York Times, whose ever-declining ads I count every day — an easy job — there is still a real estate department, and retail department and classified department, all waiting at their phones for you to call and place an ad.

Beginning in the 1980s came the explosion in media, both a vast expansion in targeted print media and the rapid growth of cable. To deal with this cornucopia of choice, media buying became a separate marketing business, staffed by legions of entry-level marketing program graduates, nearly all subliterate and television-focused, creating an immediate problem for print.

Then the Internet. To deal with the algebraic leap in advertising options, new automated tools grew up that not only make the buying decisions, but, in effect, auction off predefined audiences, at an ever-declining cost.

There are exceptions. The fashion category has held up better than most, in part because the fashion business is directly dependent on the fashion press for favorable coverage. The relationship remains symbiotic (or a form of a modern protection racket).

Extreme sports, especially m! ixed with! live-event music tie-ins, inspire a kind of extreme salesmanship that has made Vice Media, whose core property is a skateboard-lifestyle magazine, worth a billion dollars, and turned Red Bull, a caffeine-drink company, into a publishing powerhouse (i.e. advertisers are becoming their own publishers).

The industrywide imitation of this aggressive alignment of content and sales is now called branded content, but it is a pale imitation of Vice-like gusto and salesmanship, and the price is already falling.

In general, newspaper, magazine and even digital content salesmen are desperate to sell something other than what they are supposed to be selling (digital was itself once that something else). New content products. Tablet versions. Video. The New York Post is trying to sell rides on a Post-branded tour bus. The Sunday New York Times seems to have given up trying to sell space in its magazine, or book review or business sections, in lieu of … they are trying to think that up. Stay tuned.

Nobody is trying to sell, or at least believably trying to sell, the actual proposition: that blank space adjacent to intelligent content, which you can write on and put in front of an audience demonstrably seeking information, is an efficient and even powerful tool for telling your story.

It could be that no one really believes such a focused, open, literate audience exists anymore (or, anyway, that it has anybody other than the elderly in it). Editors, alas, are making a dull product that just doesn't move the quick, cool and young.

But it could also be a particular kind of vicious sales circle, wherein the most talented salesmen always run to what's easiest to sell, leaving the less talented with the harder sell.

The reading-matter advertising-space salesman is now an existential figure of the age. Where Willy Loman tried to sell stuff out of an old valise, his modern counterpart is selling New Yorker pages.

Saturday, October 26, 2013

The Gory Details on Werner Enterprises's Double Miss

Werner Enterprises (Nasdaq: WERN  ) reported earnings on July 22. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended June 30 (Q2), Werner Enterprises missed estimates on revenues and missed estimates on earnings per share.

Compared to the prior-year quarter, revenue dropped slightly. GAAP earnings per share dropped significantly.

Gross margins increased, operating margins contracted, net margins shrank.

Revenue details
Werner Enterprises reported revenue of $506.6 million. The 17 analysts polled by S&P Capital IQ wanted to see a top line of $519.3 million on the same basis. GAAP reported sales were the same as the prior-year quarter's.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.35. The 23 earnings estimates compiled by S&P Capital IQ predicted $0.37 per share. GAAP EPS of $0.35 for Q2 were 17% lower than the prior-year quarter's $0.42 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 50.8%, much better than the prior-year quarter. Operating margin was 8.4%, 30 basis points worse than the prior-year quarter. Net margin was 5.1%, 80 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $519.8 million. On the bottom line, the average EPS estimate is $0.38.

Next year's average estimate for revenue is $2.05 billion. The average EPS estimate is $1.38.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 52 members out of 76 rating the stock outperform, and 24 members rating it underperform. Among 24 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 16 give Werner Enterprises a green thumbs-up, and eight give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Werner Enterprises is hold, with an average price target of $25.43.

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Add Werner Enterprises to My Watchlist.

Friday, October 25, 2013

U.S. Stocks Rise as Amazon, Microsoft Rally Amid Fed Bets

U.S. stocks rose, sending the Standard & Poor's 500 Index to a record, as Inc. (AMZN) and Microsoft (MSFT) Corp. sales beat estimates while a drop in consumer confidence added to speculation the Federal Reserve will delay scaling back monetary stimulus. surged 9.4 percent as consumers flocked to the largest online retailer ahead of the holiday shopping season, helping to curtail losses. Microsoft jumped 6 percent as the company relied on corporate software demand to make up for weak consumer personal-computer purchases. Eastman Chemical Co. slumped 5.2 percent after cutting its full-year forecast.

The S&P 500 rose 0.4 percent to 1,759.77 at 4 p.m. in New York. The Nasdaq 100 Index climbed 0.6 percent to 3,383.83. The Dow Jones Industrial Average added 61.07 points, or 0.4 percent, to 15,570.28. About 6 billion shares changed hands on U.S. exchanges, in line with the three-month average.

"Earnings have been good enough and the liquidity spigot is open so that people see very little risk in the system," Charlie Smith, chief investment officer of Pittsburgh-based Fort Pitt Capital Group Inc., said in a phone interview. His firm oversees $1.5 billion. "It's like a giant game of musical chairs. The attitude on the part of most investors is that they have to play while the Fed got the music going."

The S&P 500 has jumped 4.7 percent this month as lawmakers agreed to raise the government's borrowing limit, avoiding a sovereign default. Equities rallied for a third week, with the benchmark index up 0.9 percent, as signs of slower economic recovery fueled bets the Fed will wait until March before scaling back bond purchases.

Fund Flows

Exchange-traded funds that invest in U.S. equities took in more than $2.3 billion the last four days, bringing this month's flows to about $15.8 billion, data compiled by Bloomberg show. October is on track for the biggest intake since July.

Stocks briefly pared gains today as a pe! rson in Kentucky Republican Rand Paul's office said the Senator is considering placing a hold on the nomination of Janet Yellen to lead the Fed. Equities rallied earlier this month when President Barack Obama chose Yellen to succeed Ben S. Bernanke as Fed chairman. As a top deputy to Bernanke, Yellen supported the central bank's bond-buying programs that have helped propel the S&P 500 up 160 percent from a 12-year low in 2009.

Equity Valuations

Better-than-expected earnings and continued monetary stimulus have driven the S&P 500 up 23 percent this year. While the rally lifted equity valuations to a four-year high, with the index trading at 15.9 times estimated operating earnings, that's still below the multiples at the market's two previous peaks, when the ratio reached 16.5 in October 2007 and 25.7 in March 2000, data compiled by Bloomberg show.

"Valuation is still reasonable and the economy appears to getting better," Alan Gayle, senior investment strategist and director of asset allocation at RidgeWorth Capital Management, said by phone from Atlanta. His firm oversees about $48 billion. "The market does look a bit extended so it wouldn't surprise me if we saw some near-term pullback."

Data today showed consumer confidence in the U.S. dropped in October to a 10-month low, showing the reopening of the federal government failed to reassure households. The Thomson Reuters/University of Michigan final consumer sentiment index for October decreased to 73.2 from 77.5 the prior month. The median estimate in a Bloomberg survey called for a decline to 75 compared with a preliminary reading of 75.2.

Orders for U.S. durable goods rose in September by the most in three months as stronger demand for commercial and military aircraft outweighed a drop in business equipment.

Earnings Release

Sixteen S&P 500 (SPX) reported earnings today. Of the 244 members of the gauge that have released results so far, 76 percent exceeded analysts' predictions! for prof! it, while 54 percent beat sales estimates, data compiled by Bloomberg showed.

Earnings for the broad equity gauge probably increased 3.7 percent in the third quarter as sales climbed 2.4 percent, according to analysts' estimates compiled by Bloomberg.

The Chicago Board Options Exchange Volatility Index, the gauge of S&P 500 options known as the VIX, slipped 0.8 percent to 13.09, trimming its gain for the week to 0.4 percent.

All 10 S&P 500 groups gained today as phone and utility shares climbed more than 1 percent to lead the advance. Technology shares increased 0.4 percent.

Amazon, Microsoft

Amazon jumped 9.4 percent to an all-time high of $363.39. Chief Executive Officer Jeff Bezos has poured money into the company's delivery network, cloud-computing services and line of Kindle e-readers and tablets, sacrificing near-term profits to fuel growth. That could put Amazon on track to outpace the e-commerce market, where sales are seen climbing 15.5 percent to $83.2 billion, according to EMarketer Inc.

Microsoft rallied 6 percent to $35.73. The world's largest software maker is undergoing unprecedented changes, conducting its first-ever CEO search to replace Steve Ballmer and starting an organizational overhaul aimed at bolstering sales by focusing on devices and services.

United Parcel Service Inc. (UPS) added 1.2 percent to a record $95.61. The world's largest-package delivery company beat analysts' estimates for third-quarter earnings. The company said revenue from each domestic parcel rose 1 percent and daily package volume was up 2.3 percent.

Alexion Pharmaceuticals Inc. (ALXN) climbed 7.3 percent to a record $125.17. The maker of a drug for rare blood diseases boosted its full-year earnings forecast to as much as $3.04 a share. That compared with the average analyst estimate of $3.03.

National Oilwell Varco Inc. rose 4.5 percent to $82.72. The biggest U.S. maker of oil-field equipment reported third-quarter earnings tha! t topped ! analysts' estimates and said it expects orders for the current quarter to be good, "maybe great."

Smaller Loss

Zynga (ZNGA) Inc. advanced 5.5 percent to $3.73. The maker of social-networking games reported its first quarter under Chief Executive Officer Don Mattrick, recording a smaller-than-forecast loss as purchases of items used in games exceeded the company's forecast.

Eastman Chemical slumped 5.2 percent to $77.94. The producer of chemicals said it expects full-year earnings to be as low as $6.30 a share, trailing the average analyst estimate of $6.47 in a Bloomberg survey.

Express Scripts Holding Co. (ESRX) declined 4.5 percent to $60.88, the lowest since May. The largest U.S. processor of prescription drug claims reduced its 2013 cash flow forecast, citing delays in some non-client integration activities.

Yahoo! Inc. lost 2.5 percent to $32.25 after Yahoo Japan Corp. (4689) forecast full-year sales and profits that missed analysts' estimates.

Wednesday, October 23, 2013

Symantec Slashes Guidance, Investors Slash Stock Price

Symantec Inc. (NASDAQ: SYMC) reported second fiscal quarter 2014 results after markets closed on Wednesday. For the quarter, the network security software maker posted adjusted diluted earnings per share (EPS) of $0.50 on revenues of $1.64 billion. In the same period a year ago, the company reported EPS of $0.45 on revenues of $1.7 billion. Second-quarter results compare to the Thomson Reuters consensus estimates for EPS of $0.44 and $1.69 billion in revenues.

On a GAAP basis Symantec posted EPS of $0.34, up 26% year-over-year.

Due to the second quarter's revenue shortfall, the company lowered its full-year guidance. The company now expects annual revenue to decline by 3% to 4% year-over-year, non-GAAP operating margin to increase by 30 to 60 basis points, and adjusted EPS to be lower by 1% to 1.5% compared with the previous fiscal year. The consensus full-year estimates had called for EPS of $1.90 on revenues of $6.94 billion.

A back-of-the-envelope calculation based on Symantec's guidance puts EPS in at around $1.74 to $1.75 based of fiscal 2013 EPS of $1.77. Last fiscal year's revenues totaled $6.91 billion and based on Symantec's new guidance current fiscal year revenues would fall to a range of $6.63 to $6.7 billion compared with a current consensus estimate of $6.94 billion in revenues.

For the third quarter, Symantec guides revenue to $1.63 to $1.67 billion, well short of the consensus view for $1.79 billion in revenues, which would have been flat with the same period a year ago. The company also guided adjusted EPS to a range of $0.41 to $0.43, down from last year's EPS of $0.45 and the consensus estimate for this year of $0.51.

Symantec said in July that it had reduced its management structure by 30% to 40%. The company has never clearly said how many employees will lose their jobs in its restructuring, but reports surfaced in June that about 1,700 of the company's 21,500 employees would be fired.

The company's CEO said:

We’ve reallocated resources to develop new integrated offerings, split the sales organization into renewals and new business teams, and simplified our management structure. While this was a challenging quarter in our transition year, we expect our actions to translate into growth. We remain committed to our FY15-FY17 targets and are confident that we are on the right track.

Symantec's shares are trading down about 12.7% at $21.50 in after-hours trading Wednesday, in a 52-week range of $17.35 to $27.10. Thomson Reuters had a consensus analyst price target of around $27.90 before today's report.

LinkedIn unveils trio of mobile apps

SAN FRANCISCO -- LinkedIn on Wednesday showed three mobile apps that aim to boost productivity of mobile professionals and capture on-the-go audiences.

The professional network unveiled a new app called LinkedIn Intro along with a redesigned Pulse and LinkedIn iPad app. LinkedIn Intro is a mobile email product that allows users to have people's LinkedIn account connected with popular email accounts so that they can immediately identify people. It works on iPhone and is available for download today.

"This adoption of smartphones over the last decade or so has really changed the way we think about products," says Deep Nishar, senior vice president of products and user experience at LinkedIn.

LinkedIn is experiencing explosive growth in users coming to its services from mobile devices, much like Facebook, Google and Twitter. About 33% of its members visit from mobile.

For recruiting professionals, often out at job fairs and networking events, mobile apps that replace desktop functions are important tools.

LinkedIn acquired Pulse in April for $90 million in stock and cash. Pulse's popular news reader, started by two students while at Stanford University, had quickly become a sensation for its slick interface on touch screens ideal for flicking through news feeds. Under its relaunch, LinkedIn meshed many of its desktop features into Pulse, such as integration of its Influencer blogs.

Last week, LinkedIn unveiled Recruiter Mobile and Mobile Work With Us, two popular desktop services adapted into apps for on-the-go use.

Recruiter Mobile will enable recruiting professionals to search for candidates, allowing them to send InMails, call or text. Also, recruiters can take notes on candidates and forward prospects to hiring managers.

Recruiter is LinkedIn's primary subscription service and is responsible for the largest portion of the company's revenue. The product is used by more than 20,000 companies.

LinkedIn's new Mobile Work With Us gives employers the abili! ty to show job openings on the profiles of employees at their company. These job advertisements will appear at the top of member profiles

LinkedIn acquired CardMunch in January of 2011 for an undisclosed sum. CardMunch's mobile app allows people to take photos of business cards and convert them into their mobile contacts.

LinkedIn has over 238 million members.

Is 'The Bond Rally Of A Lifetime' Finally Over?

When the Fed started talking about reducing its $85 billion monthly purchases of Treasurys and mortgage-backed securities in May, Treasury bonds started to fall (chart 1) and yields jumped (chart 2).

Although Fed officials have vigorously denied that tapering signals an impending rise in interest rates, investors obviously didn't believe the central bankers.

(chart 1)

Many interest rate forecasters shout that the three-decade-long decline in Treasury bond yields is over, and they may be right—finally. These same pundits have been saying so repeatedly ever since rates started down in 1981.

(chart 2)

As I discussed in my recent book, The Age of Deleveraging, and in many Insights before and since, back in 1981, few agreed with me that serious inflation was unwinding and interest rates would fall. Indeed, the consensus called for rates to remain high or even rise indefinitely.

Yet when 30-year Treasury yields peaked at 15.21% in October of that year, I stated that inflation was on the way out and "we're entering the bond rally of a lifetime." Later, I forecast a drop to a 3% yield. Again, most other forecasters thought I was crazy.

Most investors have a distinct anti-Treasury bond bias, and not just because they fervently believe that serious inflation and leaping yields are inevitable. Stockholders inherently hate them. They say they don't understand Treasury bonds. But their quality has been unquestioned, at least until recently, and their prices rose promptly in 2011 after S&P downgraded them.

Treasurys and the forces that move yields are well-defined—Fed policy and inflation or deflation are among the few important factors.

Stock prices, by contrast, are much more difficult to fathom. They depend on the business cycle, conditions in that particular industry, Congressional legislation, the quality of company management, merger and acquisition possibilities, corporate accounting, company pricing power, new and old product potentials, and myriad other variables.

Stockholders do understand that Treasurys normally rally during weak economic conditions, which are negative for stock prices, so they consider declining Treasury yields to be a bad omen. Brokers also don't want to recommend Treasurys since commissions on them are low, and investors can avoid commissions altogether by buying them directly from the Treasury.

Wall Street denizens also disdain Treasurys, as I learned firsthand while at Merrill Lynch and then White, Weld years ago. Investment bankers didn't want me along on client visits when I was forecasting lower interest rates. They wanted projections of higher rates that would encourage corporate clients to issue bonds immediately, not wait for lower rates and cheaper financing costs. That's what's happening today in anticipation of Fed tightening and higher interest rates—more financing to pay for mergers and acquisitions as well as other needs.

Professional managers of bond funds are a sober bunch who perennially fret about inflation, higher yields, and subsequent losses of principal in their portfolio. But if yields fall, they don't rejoice over bond appreciation but worry about reinvesting their interest coupons and maturing bonds at lower yields.

This disdain for bonds, especially Treasurys, persists despite their vastly superior performance vs. stocks since the early 1980s. Starting then, a 25-year zero-coupon Treasury, rolled into another 25-year annually to maintain the maturity, beat the S&P 500, on a total return basis, by 6.1 times (chart 3), even after the recent substantial bond sell-off.

(chart 3)

This is one of our very favorite charts since we have actually participated in this marvelous Treasury bond rally as forecasters, portfolio managers and investors. And please note that we've never, never, never bought Treasurys for their yield. We couldn't care less what the yield is—as long as it's going down! We want Treasurys for the same reason that most of today's stockholders want equities—appreciation.

Tuesday, October 22, 2013

US Steel, Alliance Steel Drop, as UBS Picks Winners, Losers

“Steel demand is heating up” in the US, says UBS analyst Matt Murphy. Some steel stocks, however, are ready to cool down, he says


When it comes to steel demand, the world is looking good. Murphy explains:

We anticipate strong steel demand growth in 2014, led by a pick-up in nonresidential construction as well as ongoing growth in automotive and manufacturing sectors. Growth will continue in 2015 and reach pre-recession levels by 2016.

Prices, however, do not:

On the supply side, the global steel industry will remain overcapacity, and given our falling iron ore price forecast we expect steel prices to fall from the current $650/t spot price to less than $600/t by H2/14 while metal spreads to scrap should generally be maintained near-term and begin expanding in 2016.

That dynamic means that companies that can benefit from construction strength and cut costs will outperform others. For that reason, Murphy keeps Nucor (NUE) and Steel Dynamics (STLD) at Buy. He wasn’t so kind to Reliance Steel (RS), US Steel (X) and AK Steel (AKS), which were all cut, though for different reasons.

When it comes to Reliance, it’s all about valuation. Murphy writes:

Its model of consolidating service centers has consistently been accretive, as RS normally buys smaller companies at lower multiples using low-cost debt. Within the metals service center industry, RS is a best-in-class operator with a top-tier management team, high inventory turns and EBITDA margins. However, we view the current stock price as fairly valued given our falling steel and aluminum price outlook and its impact on absolute profits. We rate Reliance Steel a Neutral and our $75 PT is based on an 8.0x EV/EBITDA (2015) multiple.

US Steel gets a downgrade to Neutral from Buy thanks to an increase in competition. Murphy explains:

As an integrated steel producer, X has been burdened by high fixed costs in the weak steel markets of recent years and high legacy liabilities due to low discount rates. We expect US Steel to benefit from reduced pension liabilities in 2014, while also improving margins through cost reduction and revenue maximization efforts currently underway. However, we remain concerned about increasing competition in X's most profitable segment, Tubular goods, and we only see sector capacity utilization reaching higher levels in 2016, meaning margins could remain weak in the medium term.

And AK Steel? It gets cut to Sell from Neutral:

The company has suffered from weak margins and high leverage, compounded by debt and high legacy liabilities. AKS is benefitting from an improving US auto sector; however, it will be some time before it can realize any benefit from its raw materials integration strategy, which is underway. The largest issue we see for AKS is the cash drag from required pension payments notwithstanding an improving economy and rising interest rates

Nucor has gained 1.2% to $51.32 and Steel Dynamics has risen 0.6% to $18.40, while Reliance Steel has dipped 0.5% to $75.11, US Steel has dropped 2% to $23.52 and AK Steel has fallen 2.7% to $3.95.

Vivus's Qsymia Now Available At 8,000 Pharmacies - Is It Enough?

Vivus (VVUS) announced Monday that the anti-obesity drug Qsymia is now available at about 8,000 retail pharmacies including, Walgreens, Costco, and Duane Reade pharmacies nationwide. The company had indicated previously that the retail roll-out would take until mid July. Vivus also indicated that it will continue to grow the retail presence over the coming months.

The big question is whether or not this is enough. Vivus management has contended that the lack of retail presence was hindering the business and that the removal of the mail-order only REMS restriction would be a boost to sales. Personally, I see the pharmacy issue as perhaps offering modest improvement at best, but as with anything, time will tell.

Last week, Vivus saw their IMS Health script total decline from 4,945 the week prior to 4,689, a decline of about 5%. Had the script numbers ramped up this past week, we could have seen the company have a shot at 20,000 for the month. Now the company would need about 6,000 in the final week to garner that number. That is unlikely in my opinion, even with the new retail pharmacy availability.

(click to enlarge)Qsymia Scrips - IMS (unadjusted)

If the added retail presence makes a difference, we should see weekly script numbers come in above the trend line. In other words, if the impact of retail outlets is a difference maker for Vivus, we should see next week's scripts at a number over 5,000 with the growth and trend pushing toward 6,000 per week by the end of July. In my opinion, that is asking too much from this drug at this point. One big impact challenging sales could be the availability of Belviq, an anti-obesity drug from Arena Pharmaceuticals (ARNA). Belviq was launched on June 7th and had IMS script numbers of 1,829 last week (its second week of data). It took Qsymia 4 weeks to get to 1,939 scripts according to IMS Health.

W! hile adding retail pharmacies is a positive for Vivus, I simply do not see it as something that will double the number of scripts sold in a speedy fashion. Instead, I see it as making it possible to continue a steady growth pace.

In my opinion, the key to success with both Qsymia and Belviq is with the insurance companies. The more companies that offer treatment of these drugs, the better off sales will be, and the more money these companies can put onto the bottom line. Adding 8,000 pharmacies is a step in the right direction, but the impact on the equity will be minimal unless we see weekly script numbers increase toward 6,000 per week in the next few weeks. What will move this equity is getting the ongoing battle with First Manhattan resolved, and additional insurance coverage. Stay Tuned.

Source: Vivus's Qsymia Now Available At 8,000 Pharmacies - Is It Enough?

Disclosure: I am long ARNA. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. (More...)

Additional disclosure: I have no position in Vivus.

Monday, October 21, 2013

Fiscal Crisis Leaves Stocks in a Sweet Spot

The Washington mess of the past few weeks was ugly and disruptive for financial markets. It could do more damage in December as investors contemplate resumed acrimony when 2014 arrives.

Yet it all has a silver lining. ‪

The federal government's shutdown and threat of default on U.S. debt spawned anxiety among businesses and consumers, hurt the U.S.'s image around the world and took about half a percentage point off fourth-quarter economic growth, economists estimate.

But the economy kept growing. Inflation stayed low. And the turmoil is widely expected to keep the Federal Reserve more supportive of the economy and markets than money managers had anticipated until recently.

‪Analysts who have studied past market behavior say that backdrop—moderate economic growth with low inflation and strong central-bank backing—is excellent for stocks. That may help explain why financial markets remained fairly calm throughout the crisis and how the S&P 500 stock index finished Friday at 1744.50, a record high. The S&P 500 is up 22.3% this year.

"This is the best environment for stocks right now. You don't have rising interest rates becoming a problem. You don't have inflationary pressures. You do have earnings growth," said Tim Hayes, chief global investment strategist at Ned Davis Research in Venice, Fla. ‪The firm has studied stock performance in a wide variety of economic environments going back decades.

‪One of the most positive indicators today, Mr. Hayes said, is that unemployment is a high 7.3%, but declining. ‪

"When the unemployment rate is above 6% and falling, that is the best situation for the stock market" based on the performance of the S&P 500 back to the 1940s, Mr. Hayes said.

Stocks average 13.5% annual gains when unemployment is above 6%, and 16.5% when the rate is that high and falling. Joblessness isn't good for ordinary people, of course, but stocks respond more to expectations for corporate earnings, inflation, interest rates and the like.

High unemployment is good for stocks if it holds down labor costs. High but falling unemployment is even better because it keeps a lid on costs and fuels consumer-spending growth, as expanding employment puts money in people's pockets. ‪

Stocks also do better when earnings growth is below 5% on a year-over-year basis than when it is above 5%, according to the Ned Davis studies. That is because moderate earnings growth is less likely to spur inflation or push interest rates higher.

‪Another big boost for stocks is the growing hope that low inflation and worries about economic growth will induce the Federal Reserve to keep stimulating the economy by holding down long-term interest rates.

‪Over the summer, many investors expected the Fed would decide in September that the economy was strong enough for it to cut back on its $85 billion in monthly bond-buying stimulus. Then the Fed surprised investors and analysts by delaying action, citing among other things the risk to growth from Washington's fight over debt and government funding.

‪Now, many economists think the Fed could hold off until the end of the year or longer. Laurence Fink, chairman and chief executive of BlackRock Inc., which oversees $3.8 trillion and is the world's biggest asset manager, as well as other well-known Wall Street executives and investors, have predicted that the Fed could wait until March or even June. ‪

Fed stimulus helps stocks because low interest rates hold down corporate costs, and the stimulus money itself leaks into the stock market, fueling investment there. The longer the Fed maintains the central bank's exceptionally supportive policy, the longer stocks benefit, said Michael Fredericks, a BlackRock portfolio manager. ‪

Mr. Fredericks also has studied the market's behavior during varying economic circumstances. He agrees with Mr. Hayes of Ned Davis that low inflation and low labor costs help stock performance. Mr. Fredericks believes strong growth is better than slow growth, but the two men define slow growth differently, making it hard to compare their views. The two agree on the Fed's importance to continued stock gains, especially now. ‪

"We think a lot of this comes down to just the importance of central-bank policy," Mr. Fredericks said. ‪

A big question for the future, he said, is how and when central banks around the world unwind their financial stimulus. ‪Mr. Hayes thinks how that is handled could determine when stocks next face a bear market, most commonly defined as a 20% decline from a high. ‪While he is optimistic about the immediate future, he said he wouldn't be surprised to see stocks pull back by next summer.

Such a decline is common after stocks have risen strongly for years, Mr. Hayes said. That is especially true when stock prices are above average when compared to corporate earnings, as they are today. The S&P 500 trades at more than 18 times its component companies' earnings for the past 12 months, above the historical average of about 16. ‪

"I wouldn't be surprised if we see a cyclical bear market next year" or at least a sharp decline, Mr. Hayes said.

His best guess about the trigger: continued stock gains that make the market look expensive whenever the Fed finally trims its bond-buying stimulus and pushes long-term interest rates higher.

But as long as inflation remains low and the economy is growing, any pullback could be brief, he said. The economic backdrop would support renewed stock gains, assuming Washington isn't back in crisis when the Fed is withdrawing stimulus.

Eventually, dysfunction in Washington is bad for the stock market and economy, said Mark Zandi, chief economist at Moody's Analytics. ‪

For years, the ability to cut labor costs has helped companies remain profitable despite limited business investment, he said. Now, wages and hiring are on the rise. Future business success depends on expansion and investment. Stocks seem to be shrugging off Washington's acrimony in the short run, but in the longer run it damages business confidence and limits investment, Mr. Zandi said.

‪"I'm not sure I draw the conclusion that this kind of climate is good for business and stock investors in the long run," he said.

Top 5 Value Stocks To Invest In 2014

Global beverage titan Coca-Cola (NYSE: KO  ) has for a long time been one of Warren Buffett's largest holdings at Berkshire Hathaway (NYSE: BRK-B  ) . Buffett began purchasing Coke stock in 1988, and the stock saw tremendous gains for the next decade, leading some observers to call Coca-Cola one of his greatest investments. Yet the stock's performance since 1998 has been decidedly mediocre.

Coke stock has joined in the recent market rally, more than doubling off its Great Recession low. That said, I'm skeptical that the company will be able to grow its bottom line enough to justify its generous P/E ratio of 20.7. Coca-Cola may therefore continue its long run as one of the biggest dogs of Buffett's portfolio.

A love affair with Coke
Coca-Cola has been the largest holding in Berkshire Hathaway's equity portfolio for much of the past two decades. In the earliest 13F filing available online from the SEC -- for the first quarter of 1999 -- Berkshire Hathaway reported holding 200 million shares of Coke stock, valued at $61.375 a share, or more than $12 billion in total.

Top 5 Value Stocks To Invest In 2014: Schlumberger N.V.(SLB)

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

Advisors' Opinion:
  • [By David Smith]

    A promising partnership
    Total outlays for subsea facilities were slightly more than $25 billion in 2011. That number is expected to rocket to about $130 billion by 2020. Among several companies that will benefit from this nearly five-fold growth are Schlumberger (NYSE: SLB  ) and Cameron International (NYSE: CAM  ) .

  • [By David Smith]

    A mixed quarter
    These shortfalls did not occur in a quarter in which the services group has languished and generally disappointed at earnings time. Indeed, the figurative chieftain of the group, Schlumberger (NYSE: SLB  ) , reported precisely a week earlier that it not only had topped the forecasts of the Wall Street seers, but in fact had also outdone the prior year's results. Baker Hughes (NYSE: BHI  ) didn't accomplish the latter feat, but it topped the analysts' prognostications and even managed to radiate an air of optimism about the North American onshore picture, recently the bane of the group's existence.

  • [By Arjun Sreekumar]

    Not surprisingly, the industry's annual capital spending has more than tripled over the past decade, coming in at $550 billion in 2011, according to oil-field services firm Schlumberger (NYSE: SLB  ) . Yet despite shelling out all that money, the industry as a whole has been unable to secure enough new reserves to offset production.

  • [By Tyler Crowe]

    Another reason that shale gas development has not as quickly developed is a lack of clear patent protection laws,�especially�in China. While both Schlumberger (NYSE: SLB  ) and Haliburton (NYSE: HAL  ) have expressed an interest in developing Chinese shale gas, a lack of intellectual-property protection has them hesitant to going all in. Rather, both companies have taken minority interests in smaller,�Chinese-based companies and plan to take orders of drilling fluids and equipment. These kinds of moves are not necessary in the U.S. and have allowed companies to protect and profit from their expertise.

Top 5 Value Stocks To Invest In 2014: Dollar Tree Inc.(DLTR)

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

Advisors' Opinion:

    Dollar Tree (NASDAQ: DLTR  ) is among the most successful single-price-point retailers in the U.S. It operates more than 4,842 stores across 48 states in the U.S. and five Provinces in Canada. The chart below shows that the company has been performing consistently well over the past five years.

  • [By Brendan Byrnes]

    Brendan: Not a problem at all. What about the surprising amount of dollar-store companies that are public? You have Family Dollar (NYSE: FDO  ) , Dollar Tree (NASDAQ: DLTR  ) , Dollar General (NYSE: DG  ) . You mention, in particular, Family Dollar, which is the lowest market cap out of all of those, as doing the best, an exceptional company. Why?

  • [By Rich Duprey]

    Deep discounter Dollar Tree (NASDAQ: DLTR  ) announced today that its current chief operating officer, Gary Philbin, will now also carry the title of president, a position previously held by company CEO Bob Sasser.

  • [By Mani]

    Dollar Tree, Inc. (NASDAQ:DLTR) is one of the companies that are set to exploit the ongoing trend of consumers' increasing focus on value with significant opportunity to grow its store base, and expand margins.

Best Medical Stocks To Invest In 2014: Caterpillar Inc.(CAT)

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

Advisors' Opinion:
  • [By Adam Levine-Weinberg]

    Biggest losers
    Illinois saw the biggest year-over-year jump in unemployment in the U.S. last month. At 9.5%, the Illinois unemployment rate is at a level last seen in 2011. Even worse, the labor force shrank last month, suggesting that tens of thousands of people gave up looking for work. The seasonally adjusted unemployment rate has risen by nearly a full percentage point since December. Moreover, things may not get better anytime soon; earlier this month, Caterpillar (NYSE: CAT  ) announced that it would permanently lay off 460 workers in the state due to falling demand for mining equipment.

  • [By Jeremy Bowman]

    Caterpillar (NYSE: CAT  ) took the cake today among Dow stocks, gaining 2.3%, as the construction-equipment maker bumped up its quarterly dividend 15%, to $0.60, or a 2.9% yield. It was the company's third consecutive annual dividend increase and, on a bullish day, that was enough to push the macro-economically sensitive stock up over 2%. Caterpillar has been one of the worst-performing on the Dow this year as it has actually fallen 5% in 2013. Given its sluggish performance recently, the stock may be due for a gain.

  • [By Alexis Xydias]

    Caterpillar (CAT)�� valuation has climbed 28 percent in the past year as the largest manufacturer of mining and construction machinery posted three quarters of earnings declines. Analysts predict a profit drop of 27 percent in 2013. Last month, the Peoria, Illinois-based company cut its earnings forecast as mining-equipment sales declined on slower commodity demand from emerging markets.

  • [By Dan Carroll]

    Earnings season is in full swing, and a full third of companies on the Dow Jones Industrial Average (DJINDICES: ^DJI  ) is set to report last quarter's data this week. From industrial giants such as Caterpillar (NYSE: CAT  ) to Big Oil icons like ExxonMobil (NYSE: XOM  ) and Chevron (NYSE: CVX  ) , seemingly every sector of the blue-chip index is on pace to capture investors' attention in the next few days. Let's take a look at what you should be watching out for as 10 of America's most prominent stocks face their biggest test so far of 2013.

Top 5 Value Stocks To Invest In 2014: Tupperware Corporation(TUP)

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

Advisors' Opinion:
  • [By Eric Volkman]

    Tupperware Brands (NYSE: TUP  ) is reaching into its corporate bowl for a fresh payout to shareholders. The company has declared a quarterly dividend of $0.62 per share. This will be paid on July 8 to stockholders of record as of June 19. That amount matches the firm's previous distribution, which was paid in early April. Prior to that, Tupperware Brands was rather less generous, handing out $0.36 per share.