5 Stocks Setting Up to Break Out

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

>>5 Stocks Under $10 Set to Soar

One successful breakout trade that I flagged recently was cancer diagnostics player Biocept (BIOC), which I featured on June 13 at $5.70 per share. I mentioned then that shares of Biocept gapped up sharply higher back above its 50-day moving average of $5.13 a share with strong upside volume. That move was quickly pushing shares of BIOC within range of triggering a major breakout trade above some key near-term overhead resistance levels at $5.85 to $6 a share.

Guess what happened? Shares Biocept triggered that breakout on June 18 with heavy upside volume. Volume on that day registered 124,000 shares, which is well above its three-month average action of 27,117 shares. Shares of BIOC have continued to uptrend since breaking out that day, with the stock tagging an intraday high on Friday of $7.72 a share. That represents a large gain of over 30% in just a few trading sessions for anyone who bought shares of BIOC in anticipation of that breakout.

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

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

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

Controladora Vuela Compa

One regional airline player that's quickly moving within range of triggering a big breakout trade is Controladora Vuela Compa (VLRS), which provides air transportation services for passengers, cargo and mail in Mexico and internationally. This stock is off to a weak start in 2014, with shares down sharply by 35%.

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If you take a look at the chart for Controladora Vuela Compa, you'll notice that this stock recently formed a double bottom chart pattern at $8.13 to $8.17 a share. That bottom occurred right above its 50-day moving average. Since forming that bottom, shares of VLRS have now started to uptrend and break out above some near-term overhead resistance at $8.64 a share. That move is quickly pushing shares of VLRS within range of triggering a much bigger breakout trade above some key near-term overhead resistance levels.

Traders should now look for long-biased trades in VLRS if it manages to break out above some near-term overhead resistance levels at $8.84 to $9 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average volume of 264,347 shares. If that breakout gets underway soon, then VLRS will set up to re-test or possibly take out its next major overhead resistance levels at $10 to $10.50 a share. Any high-volume move above $10.50 a share will then give VLRS a chance to re-fill some of its previous gap-down-day zone from February that started at $11.50 a share.

Traders can look to buy VLRS off weakness to anticipate that breakout and simply use a stop that sits right below those double bottom support zones or around its 50-day moving average of $7.81 a share. One can also buy VLRS off strength once it starts to take out those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

Novavax

A clinical-stage biopharmaceutical player that's starting to trend within range of triggering a big breakout trade is Novavax (NVAX), which focuses on discovering, developing and commercializing recombinant protein nanoparticle vaccines and adjuvants. This stock hasn't done much over the last three months, with shares up around 7%.

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If you take a look at the chart for Novavax, you'll see that this stock recently gapped down back below both its 50-day and 200-day moving averages with heavy downside volume. Following that gap, shares of NVAX have started to rebound higher with the stock moving back above those key moving averages and with NVAX now quickly moving within range of triggering a big breakout trade above some key near-term overhead resistance levels.

Traders should now look for long-biased trades in NVAX if it manages to break out above some near-term overhead resistance levels at $5.09 to $5.20 a share with high volume. Look for a sustained move or close above those levels with volume that registers near or above its three-month average action of 4.70 million shares. If that breakout begins soon, then NVAX will set up to re-test or possibly take out its next major overhead resistance levels at $5.75 to $6 a share, or even $6.50 to its 52-week high of $6.95 a share.

Traders can look to buy NVAX off weakness to anticipate that breakout and simply use a stop that sits right below its 50-day moving average of $4.37 a share or around more support at $4.09 a share. One could also buy NVAX off strength once it starts to clear those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

Allscripts Healthcare Solutions

Another stock that's starting to move within range of triggering a near-term breakout trade is Allscripts Healthcare Solutions (MDRX), which is a provider of clinical, financial, connectivity and information solutions and related professional services to hospitals, physicians and post-acute organizations. This stock has been under some selling pressure over the last three months, with shares off by 18%.

>>4 Biotech Stocks Under $10 to Watch for Breakout Trades

If you take a glance at the chart for Allscripts Healthcare Solutions, you'll notice that this stock recently formed a major bottoming chart pattern, since shares have found buying interest each time it has pulled back to around $14.60 to $14.40 a share. Shares of MDRX have now started to spike higher above those support levels and its trending back above its 50-day moving average of $15.32 a share. That move is quickly pushing shares of MDRX within range of triggering a near-term breakout trade above some key overhead resistance levels.

Traders should now look for long-biased trades in MDRX if it manages to break out above some near-term overhead resistance levels at $15.57 to $15.74 a share and then once it takes out its 200-day moving average of $15.76 a share with high volume. Watch for a sustained move or close above those levels with volume that hits near or above its three-month average action of 1.68 million shares. If that breakout triggers soon, then MDRX will set up to re-test or possibly take out its next major overhead resistance levels at $17.34 to $18.50 a share, or even its 52-week high of $19.68 a share.

Traders can look to buy MDRX off weakness to anticipate that breakout and simply use a stop that sits just below some near-term support at $15 a share or around those major support zones at $14.60 to $14.40 a share. One can also buy MDRX off strength once it starts to move above those breakout levels share with volume and then simply use a stop that sits a comfortable percentage from your entry point.

Idera Pharmaceuticals

Another stock that's starting to trend within range of triggering a major breakout trade is Idera Pharmaceuticals (IDRA), which is engaged in the discovery and development of novel therapeutics that modulate immune responses through toll-like receptors in the U.S. This stock has been hit hard by the bears so far in 2014, with shares off sharply by 33%.

>>4 Stocks Breaking Out on Big Volume

If you take a glance at the chart for Idera Pharmaceuticals, you'll notice that this stock has been uptrending a bit for the last month and change, with shares moving higher from its low of $2.34 to its recent high of $3.49 a share. During that uptrend, shares of IDRA have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of IDRA within range of triggering a major breakout trade above some key near-term overhead resistance levels.

Traders should now look for long-biased trades in IDRA if it manages to break out above some near-term overhead resistance levels at $3.35 to $3.49 a share and then once it takes out more key resistance at $3.68 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average volume of 2.88 million shares. If that breakout materializes soon, then IDRA will set up to re-test or possibly take out its next major overhead resistance levels at $4.50 to $4.80 a share, or even $5.50 to $6 a share.

Traders can look to buy IDRA off weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support levels at $2.68 or at $2.30 a share. One can also buy IDRA off strength once it starts to bust above those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

Ohr Pharmaceutical

My final breakout trading prospect is biotechnology player Ohr Pharmaceutical (OHRP), which focuses on the development of its two products: OHR/AVR118 for the treatment of cancer cachexia and Squalamine for the treatment of the wet form of age-related macular degeneration using an eye drop formulation. This stock has been blasted by the sellers over the last three months, with shares off by 41%.

If you look at the chart for Ohr Pharmaceutical, you'll see that this stock has been uptrending strong for the last month and change, with shares pushing higher from its low of $6.01 to its recent high of $9.85 a share. During that uptrend, shares of OHRP have been making mostly higher lows and higher highs, which is bullish technical price action. Shares of OHRP have now started to spike higher right above its 50-day moving average of $8.99 a share with strong upside volume. That spike is starting to push shares of OHRP within range of triggering a major breakout trade above some key overhead resistance levels.

Traders should now look for long-biased trades in OHRP if it manages to break out above some near-term overhead resistance at $9.85 to $10.20 a share and then once it clears more past resistance at around $11 a share with high volume. Look for a sustained move or close above those levels with volume that registers near or above its three-month average action of 275,619 shares. If that breakout kicks off soon, then OHRP will set up to re-fill some of its previous gap-down-day zone from April that started right around $14 a share. If OHRP gets into that gap with strong volume, then it could easily explode higher towards $12 to $13 a share.

Traders can look to buy OHRP off weakness to anticipate that breakout and simply use a stop that sits right below its 50-day moving average of $8.99 a share or around more key support levels at $8.27 to $8 a share. One can also buy OHRP off strength once it starts to clear those breakout levels with volume and then simply use a stop that sits a conformable percentage from your entry point.

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

-- Written by Roberto Pedone in Delafield, Wis.

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Follow Stockpickr on Twitter and become a fan on Facebook.

At the time of publication, author had no positions in stocks mentioned.

Roberto Pedone, based out of Delafield, Wis., is an independent trader who focuses on technical analysis for small- and large-cap stocks, options, futures, commodities and currencies. Roberto studied international business at the Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany. His work has appeared on financial outlets including

CNBC.com and Forbes.com. You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zerosum24.

21 states raising minimum wage on January 1

  The faces of minimum wage NEW YORK (CNNMoney) The New Year will start well for over 3 million workers -- they're getting a raise.

Employers in 21 states and Washington D.C. will hike their minimum wages on January 1.

This has been a huge year for low wage workers. Sparked by a wave of fast food and retail worker protests, more than a dozen states like Alaska, South Dakota and Nebraska and many cities such Seattle and Oakland have jumped on the momentum and passed new laws to raise the minimum wage.

"We've seen a historic number of states increasing their minimum wages," said David Cooper, an economist at the Economic Policy Institute, which researches minimum wage issues. "People's understanding of where the wage floor should be has changed a lot, and in part caused by strikes and protests."

It could certainly be a big day for Wayne Davis, who earns $8.25 an hour at McDonald's (MCD) in Tampa, Florida. Davis earns 20 cents more than Florida's new minimum wage of $8.05. But workers across the board are likely see a pay bump, labor experts say.

"It's stressful having to live off of minimum wage," said 19-year-old Davis, who is hoping that he can help out his grandma, with whom he lives. Already, he pitches in $500 a month for household bills and is expecting his expenses to go up when he enrolls at the University of South Florida in January.

In 2015, a majority of states -- 29 -- will have a higher minimum wage than the federal wage, which is $7.25 an hour.

The city and state-led reforms are mounting pressure on Congress to raise the federal minimum wage, but the needle hasn't moved much there. Still, wages will likely remain a heated topic as the country enters the 2016 election cycle.

West Coast cities led the push for higher wages this year, breaking the $15 an hour barrier for the first time. Seattle and San Francisco passed $15 wage laws, while Los Angeles announced a significant wage hike too.

San Diego will raise its wage on New Year's Day from $9 to $9.75 an hour with further increases in following years.

The debate next year will focus on how these cities are impacted by the wage increases. Critics say it will take! away jobs while advocates argue that workers will be able to spend more money.

"It certainly has been a long time since we've seen a big day like this," says Chris Tilly, a wage expert and professor at University of California, Los Angeles. "People are concerned about inequality. This is a reform that targets inequality."

Time for a BMW 9 Series? 3 Notes for Investors

German automotive website Auto Motor und Sport has been reporting that BMW Group AG (NASDAQOTH: BAMXF  ) will unveil a BMW 9 Series at the upcoming Beijing Auto Show. While automotive enthusiasts are no doubt excited by this report, the potential investment side matters to auto industry investors as well.

Top of the BMW line
Nearly 2 million vehicles were delivered in 2013 by BMW Group, a company composed of BMW, Mini, and Rolls-Royce. However, the BMWs you probably see most often are the lower-priced, higher-volume 1 Series and 3 Series models. The current top end of the BMW luxury sedan line is the 7 Series, which starts at $74,000 in the U.S. but can easily rise into the six-digit range by adding trim levels and options.

The latest reports suggest that the rumored vehicle at the Beijing Auto Show would be a larger, more luxurious version. Although company officials have yet to publicly confirm even the vehicle's unveiling, logic would suggest it would take the 9 Series name to fit in with the rest of the line and take the highest-priced spot.

Why Beijing?
If BMW is going to reveal a larger more luxurious sedan, the Beijing Auto Show is the best place to do it. Besides the fact that the Beijing Auto Show is a major event on its own, such a vehicle is likely to be targeted toward the Chinese market.

We talk a lot about the growing middle class in China, but the growing wealth of the rich elite is also a valuable market. Luxury automakers know this well and have been reacting with billions in investment. Late last month, Daimler AG (NASDAQOTH: DDAIF  ) announced that it and its joint-venture partner would spend 1 billion euros to double production of Mercedes-Benz vehicles. This comes as demand for Mercedes-Benz vehicles continues to rise, with deliveries rising 57% in the first two months of this year.

Even luxury electric-auto maker Tesla Motors (NASDAQ: TSLA  ) has been using China as part of its growth plan for sales of the Model S. Along with Europe, Tesla hopes that China will provide much of the company's sales growth in 2014.

Making the decision to unveil a new top-of-the-line vehicle at the Beijing Auto Show even more logical is a market for large luxury sedans fueled by the preference of many wealthy individuals to ride in the back seats of the vehicle. When those riding in the back are those spending the money, having a large luxury sedan with spacious back seats is a major advantage.

Basis for a 9 Series
Developing an all-new vehicle is very expensive, and automotive companies try to reduce these costs wherever possible. Volkswagen Group AG (NASDAQOTH: VLKAY  ) has even gone as far as to create plans to build 40 vehicle models off one platform. Considering Volkswagen produces numerous varieties of small vehicles, both under the Volkswagen name and the names of other companies owned by Volkswagen Group, using a single platform should mean big savings on development costs.

BMW has an ideal position to make an even higher-priced vehicle. Not only can BMW use the resources at BMW itself, but BMW Group also owns Rolls-Royce, a company that makes BMW vehicles look cheap by comparison. Using a platform from a higher-tiered brand within the corporate ownership structure is hardly unique in this industry. For example, when Volkswagen wanted to move upmarket, the Volkswagen Phaeton used a platform also used for Bentley, another part of the Volkswagen Group.

If a BMW 9 Series does come to life, expect at least some influence from Rolls-Royce for development cost savings and the selling point added by featuring a Rolls-Royce platform.

Production timing
As of this writing, reports of this ultra-luxury offering from BMW have yet to be confirmed. But such a vehicle does make sense as an extension of the BMW line and as a new way to increase market share in China.

If the vehicle does make an appearance at the Beijing Auto Show, the report from Auto Motor und Sport suggests production for 2016. With the Chinese auto market developing so quickly, the sooner the vehicles can be in production, the better for BMW.

Even if this vehicle doesn't make an appearance in Beijing, a vehicle for this target market could be released in the future. In that case, investors should hang on to the information in this article and use it for another day.

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Marron scores big on Cetera deal

Don Marron Bloomberg News

Donald Marron is batting a thousand.

The Lightyear Capital and former PaineWebber Group Inc. chief executive is two-for-two after handing over the keys in his second deal to sell a major broker-dealer. In a deal announced Thursday, Nicholas Schorsch and his broker-dealer holding company, RCS Capital Corp., agreed to buy Cetera Financial Group Inc. from Lightyear Capital for $1.15 billion.

(Don't miss: Schorsch: RCS Capital is the next Merrill or Raymond James.)

Mr. Marron, who was at the helm when PaineWebber sold itself to UBS in 2000 for $11 billion, has owned Cetera, a leading network of four broker-dealers and 6,600 registered representatives and financial advisers, for just under four years. Since he bought the firm from ING Groep NV in 2010, Cetera's annual gross revenue has almost doubled to more than $1 billion, from $653 million.

Mr. Marron would not disclose how much his firm originally paid for Cetera, but the $1.15 billion price tag represents almost a dollar-for-dollar payout on revenue. From the level of revenue when he bought it, the Schorsch offer represents nearly a doubling of his original investment, not including the capital invested in the multiple acquisitions and upgrades made to Cetera's platform.

Last July, Cetera's chief executive, Valerie Brown, told InvestmentNews that there was “no plan for a liquidity event.” But not long afterward, Mr. Schorsch, who has been snapping up independent broker-dealers since late last year, came knocking with a pre-emptive bid.

“It's a good deal for us,” Mr. Marron said in an interview. “We were not planning to do something at this time.”

The hefty price tag represents one of the largest deals in the independent-broker-dealer space since around 2005 when LPL Financial sold a 60% stake in itself to private equity managers Texas Pacific Group (now TPG Capital) and Hellman & Friedman for roughly $1.5 billion.

While steep, the price is in the range of where brokerage firms are trading as buoyant securities markets boost results, said Dan Seivert, chief executive and founder of Echelon Partners. Among publicly traded companies, LPL is trading at 1.4 times sales, he said. Raymond James Financial Inc. is trading at 1.6 times.

“They want to sell for a price they would have a hard time beating if they stayed in the business for another year,” Mr. Seivert said.

Alois Pirker, a research director at Aite Group, added that as the economy improves ! and other firms reach record highs, more deals could be struck in the space.

“I think we're going to see more of this,” Mr. Pirker said

Textron: Buy the Rumor, Buy the News

Invetsors in Textron (TXT) decided to buy the rumor and buy the news.

for The Wall Street Journal

The rumor, in this case, was that Textron would buy Beechcraft, which was first reported last week–and shares of Textron gained 14%. The news today that the rumor was indeed true, however, hasn’t prevented Textron’s shares from staying aloft.

The Wall Street Journal has the details:

Textron Inc. agreed to pay $1.4 billion to acquire Beechcraft Corp., a deal that would combine the small U.S. plane maker into an industrial conglomerate that also produces Cessna planes and Bell helicopters.

The planned acquisition comes 10 months after Beechcraft exited Chapter 11 bankruptcy protection under the control of several hedge funds that converted their debt into equity, including Bain Capital’s Sankaty Advisors, Angelo Gordon & Co. and Centerbridge Partners. The bankruptcy filing last year was prompted by a prolonged slump in sales and a heavy debt load following a leveraged buyout in 2007.

The deal unites two of the best-known makers of small business aircraft, demand for which collapsed in the global recession. Textron’s Cessna unit and Beechcraft, both based in Wichita, Kan., each have made deep job cuts and shrunk production in recent years in response to the slump.

Textron also held a conference call, where it said that it would miss its earnings forecast for $1.75 to $1.85 a share.

Citigroup’s Jason Gursky explains why he has kept Textron rated Neutral:

Company expects 20c of 2014 annualized accretion from the addition of the business, including $65m of synergies. This excludes one-time charges of ~35c in 2014. Accretion is expected to increase to 25-30c in 2015 as synergies ramp to $75-85m coupled with limited growth in the underlying portfolio. This is relatively in line with our conservative estimate of ~20c of EPS accretion in 2015.

Although accretion levels are in line with our expectations, they're more dependent on  synergies than our initial analysis assumed. We had assumed 200 bps of synergies to arrive at our 20c estimate, while TXT appears to be baking in ~400 bps of synergies in the out-years. This implies weaker underlying Beechcraft margins…

Despite potential accretion of 25-30c outlined below, we're still on the sidelines given continued pressure in the bizjet & general aviation markets.

Shares of Textron have gained 1.2% to $36.63 at 1:09 p.m., while Embraer (ERJ) has risen 0.5% to $32.30, Triumph Group (TGI) has advanced 0.2% to $75.73 and Spirit AeroSystems (SPR) is off 0.8% at $33.90.

Harley-Davidson's New Street Bikes: Aiming Low for Big Rewards

"For most of its 110-year history, Harley sold motorcycles as fast as it could to customers it knew well: wealthy, middle-aged American white men."
-- Bloomberg

"All you Harley aficionados who desired to be an owner of the iconic brand but couldn't afford them, well, it's time to rejoice!"
-- Zigwheels.com

"The baby Harley-Davidsons ... have displacement capacities of 500cc and 750cc respectively ... the lowest displacement figures in the Harley-Davidson portfolio."
-- MotorBeam.com

"This is another kind of Harley altogether."
-- Autoblog

Want to buy a motorcycle? Don't have a lot of cash to pay for it? Then has Harley-Davidson (NYSE: HOG  ) got a deal for you!

As Bloomberg points out, Harley-Davidson has historically been a big bike company. My Foolish colleague Rich Duprey writes: "[W]hen you think of a Harley, a big 1,440cc engine is what comes to mind." But to great fanfare, highway-hog Harley recently unveiled a pair of new street-bikes that could seriously change the company's image as a builder of bikes for "wealthy, middle-aged American white men."

Harley's Street 750. Not just for rich, old white guys anymore. Source: Harley-Davidson.

The new Street 750 and Street 500 bikes both depend on a new motorcycle platform that the company developed to target prospective buyers globally, and young, urban buyers in particular. Both bikes hew to the company's new Dark Custom line, and are geared to an urban -- rather than an open-road -- riding environment.

Variously described as "nimble" and "lightweight," the Street bikes feature smaller, liquid-cooled engines (749cc for the 750, 494cc for the 500) dubbed "Revolution X." They're also lower to the ground (25.4 inches) than usual for Harley-Davidson bikes, and lighter to boot (just 480 pounds). A standard Softail Classic, in contrast, would be nearly 2 inches taller, and close to 300 pounds heavier.

The Street 750. Revolution-arily small. Source: Harley-Davidson.

Even more important than their size, though, these new Harleys come with a price tag that won't strain consumers' wallets -- only $7,500 for the Street 750, and a mere $6,700 for the Street 500.

Priced to move
The low price points on these bikes are significant for a couple of reasons. First and foremost, they indicate that Harley-Davidson is moving out of its comfort zone, and gunning for volume -- both at home and abroad. As with the new ultra-cheap "Grom" bikes that Honda Motor (NYSE: HMC  ) recently began marketing, the introduction of an entry-level Harley may attract more buyers to the brand here in the U.S. -- buyers whom Harley may be able to upsell to its bigger bikes over time.

More importantly, Harley-Davidson has clearly placed a bull's-eye on the international market with these new bikes. The company took a lot of time figuring out how to target foreign markets, surveying more than 3,000 prospective buyers in 10 countries, and focusing on urban markets not just in locales such as Chicago, but also in Mumbai, Sao Paulo, and Tokyo abroad.

The reason: As recently as 2003, Harley-Davidson was getting only 17% of its revenues from abroad. The company has grown that by more than half over the past decade but still only does about 29% of its business outside the United States. With the Street line to work with, Harley hopes to diversify even more internationally, growing foreign-sourced revenue to perhaps 40%.

Price for profit?
It may well succeed. At prices as low as $6,700 a pop, buying a bike from a respected brand name like Harley-Davidson should be an easy decision for foreign buyers to make. The question for prospective investors, though, may be a bit harder.

It stands to reason that Harley-Davidson can sell a lot more bikes for $6,700 apiece that it could at $17,699 or $18,349 -- the starting prices for the Fat Boy and Softail, respectively. But even sales success could pose a risk to Harley. Honda's cheaper bikes, after all, only earn that company an operating profit margin of about 8.2%.

Granted, even Harley-Davidson has a couple of models selling for below $10,000 -- the Superlow and Iron 883 sportsters, both of which cost $8,000 and change. But the new Street bikes will be selling for almost 20% below that. With Harley-Davidson now aiming to sell more and more smaller, cheaper bikes -- enough to rev up international revenues from 29% to 40% of its total -- there's a risk that profit margins will suffer.

The new Street 750 burns rubber. But will it burn Harley's profit margin, too? Source: Harley-Davidson.

Will a $6,700 price tag be cheap enough to attract enough buyers for Harley-Davidson to "make it up on volume"? Or in capturing market share at the low end, will Harley succeed only in shredding its current market-leading 19.5% profit margin and moving closer to Honda-levels of profitability?

Stay tuned.

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Famous Products Invented for the Military

While most people think private enterprise is responsible for innovation, a great deal of the technology Americans rely on comes from another well-known source: the U.S. military.

Over the years, the military, and the private enterprises developing products for the military, have created some of the most important products we use today. Some of the inventions have been less groundbreaking than others, such as Silly Putty and Aviator sunglasses. But some military research also directly led to significant innovations such as the microwave oven and the GPS.

Click here to see the eight famous products

The military contracted out most of these inventions to private companies. One exception is the modern GPS network. It was designed in the 1970s by researchers in both the Navy and Air Force and was built in the late ’70s and ’80s. The technology, initially designed as a guidance and tracking system for planes, boats and missiles, is today used in everything from commercial aircraft to personal navigation systems.

Private companies developed most of the products on this list, often answering the military’s call during wartime. During World War II, a Johnson & Johnson division created what would eventually become duct tape, originally to seal containers and quickly repair equipment in the field. The Jeep was an all-terrain scout vehicle built by a company called Willy's-Overland. The Jeep was widely used by the military in World War II and the Korean War and eventually also became a very popular domestic auto brand.

In many cases, the final use of the product completely differs from its intended military function. What eventually became feminine hygiene products under the Kotex brand was originally medical gauze developed for the military during World War I. Silly Putty was invented as a possible substitute for rubber. While it failed in this regard, it became a popular toy.

The military also played a part in developing even greater technologies. ARPANET, considered by many to be a precursor to the modern Internet, was a military program designed to share documents securely between facilities. In the 1940s and ’50s, the military even played a role in the development of the modern computer.

24/7 Wall St. reviewed products that were either developed for military use by the military or contractors, or those which were created as the result of military research. We excluded products where the military or contractors only played a part in the development of the product, as was the case with the computer.

These are the famous products invented for the military.

PIMCO to Offer Aria’s Guaranteed Income Product

PIMCO and Aria Retirement Solutions announced a new “collaboration” on Tuesday, one in which the bond behemoth will offer Aria’s “GMWB without the annuity” product to its shareholders through the RIA channel.

“PIMCO has the same vision of retirement as us, and is therefore the kind of fund family we want to work with,” Aria CEO David Stone told AdvisorOne. “You have a guaranteed income solution underwritten by Transamerica Capital that is then paired with a top fund family.”

Stone added that other fund family collaborations will be forthcoming.

“The product is unique in the marketplace,” Stone said. “It can be added onto the shareholder’s PIMCO funds, and we’re also developing model portfolios.”

“PIMCO is focused on using its global macroeconomic insights to find the best investment and income opportunities for investors, while also managing downside risk,” Tom Streiff, executive vice president and retirement solutions manager at PIMCO, added in a statement.

Stone noted a new retirement confidence survey by the Employee Benefit Research Institute found record low confidence among Americans in their ability to afford a comfortable retirement. This new retirement reality — driven by reduced pensions and Social Security, historic low yields, the threat of long-term inflation, market volatility and growing concerns about outliving assets — is forcing advisors and investors to find new ways to secure a lifetime of income.

“For asset-based fee-only financial advisors, guaranteed retirement-income options have been few and far between,” Stone said. “But RIAs now manage more than $1 trillion in client assets, and they want solutions that fit their business.”

Headquartered in San Francisco, Aria was founded by veteran executives from Schwab and Fidelity, with the “shared vision of building a cutting-edge platform focused exclusively on fee-only RIAs.” 

Recognizing the need that effective asset management must balance “an aggressive strategy with the need to protect client assets,” Aria developed a platform that it says supports both objectives as RIAs shift portfolio strategy for clients from asset accumulation to income distribution. 

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Read Milevsky’s VA Shocker: Turn on Your Living Benefit, Now on AdvisorOne.

Analysts jump on Leapfrog

Piper Jaffray initiated coverage of Recommended List selection LeapFrog (LF), starting the stock with an "overweight" rating. Analyst Stephanie Wissink placed an $11 price target on the stock.

Meanwhile, Roth resumed coverage of the infant and juvenile industry today, and analyst Dave Kingc called LeapFrog their "top pick" and offered a $12 per share price target.

Wissink wrote, "We think shares present a compelling investment opportunity at current levels.  Earnings power nears $1.00, implying a severely discounted multiple for a company with strong brand equity."

In her note, the analyst pointed to increasing birthrates and strong brand equity of the LeapFrog brand. On the former point, Wissink sees current infant/baby and preschool demographic trends as conservatively adding two to three percentage points of incremental growth.

On the latter point, she wrote: "There is tremendous brand equity and trust among the purchasing consumer, which we think the company can leverage to regrow its revenue base."

At Roth, King wrote: "In evaluating different Infant & Juvenile industry stocks, we see LeapFrog as the top pick in the category due to its leading brand position, growing content sales, and strong cash generation"

He added, "We expect it will continue to benefit from a secular trend toward better education and a significant 'English as a Second Language' opportunity."

In our view, as the top brand in toddler educational toys and content, LeapFrog is well positioned to take advantage of the industry tailwind. Kids are increasingly becoming tech savvy at younger and younger ages, and LeapFrog's products and digital content play into this trend.

LeapFrog shares have been hot recently, but the stock still remains inexpensive, trading at around 9.5x the 2014 consensus, excluding its nearly $3.00 per share in net cash. The company has been executing well, and it has a very strong brand. While competition is increasing, LeapFrog's content helps separate it from rivals.

International expansion, especially in the English-as-a-second-language field, is a nice potential growth area, and birthrate trends mentioned by Piper Jaffray are also a notable driver. The company is also a strong free cash flow generator, and has a rock solid balance sheet, with about 30% of its enterprise value in cash.

If LeapFrog can convince investors that it's an educational content company and not a "kiddie tablet" maker, then it is likely to command a much higher multiple than it currently has.

We also think the company could make an attractive takeout candidate for a large toymaker like Hasbro or Mattel, as well as private equity. We continue to rate the stock a "Buy" with a $12 target.

J. C. Penney Meets on Revenues, Misses on EPS

J. C. Penney (NYSE: JCP  ) reported earnings on May 16. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended May 4 (Q1), J. C. Penney met expectations on revenues and missed expectations on earnings per share.

Compared to the prior-year quarter, revenue dropped significantly. Non-GAAP loss per share expanded. GAAP loss per share expanded.

Margins shrank across the board.

Revenue details
J. C. Penney logged revenue of $2.64 billion. The 12 analysts polled by S&P Capital IQ predicted sales of $2.63 billion on the same basis. GAAP reported sales were 16% lower than the prior-year quarter's $3.15 billion.

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 -$1.31. The 10 earnings estimates compiled by S&P Capital IQ forecast -$0.93 per share. Non-GAAP EPS were -$1.31 for Q1 against -$0.25 per share for the prior-year quarter. GAAP EPS were -$1.58 for Q1 versus -$0.75 per share for the prior-year quarter.

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 30.8%, 680 basis points worse than the prior-year quarter. Operating margin was -15.7%, much worse than the prior-year quarter. Net margin was -13.2%, 800 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $2.84 billion. On the bottom line, the average EPS estimate is -$0.90.

Next year's average estimate for revenue is $12.31 billion. The average EPS estimate is -$3.45.

Investor sentiment
The stock has a one-star rating (out of five) at Motley Fool CAPS, with 697 members out of 1,082 rating the stock outperform, and 385 members rating it underperform. Among 252 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 164 give J. C. Penney a green thumbs-up, and 88 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on J. C. Penney is hold, with an average price target of $16.26.

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Americans send $2 billion a year to Cuba

  What you need to know about the Cuban embargo NEW YORK (CNNMoney) Trade with Cuba has been blocked for decades, but nearly $2 billion was sent to Cubans last year from within the United States.

Most of it came from Cuban-Americans sending money home to their families. But now, anyone in the U.S. can send up to $8,000 a year to just about anybody in Cuba, as the Obama Administration eases restrictions with the Communist country.

"You can really see the impact this money is having on the island," said Alana Tummino, director at the Americas Society and Council of the Americas.

The money is often going to small, private businesses.

Yes, even though Cuba is a Communist country, it has moved towards a more private economy in recent years.

There are now close to 500,000 people with state-issued private business licenses for everything from restaurants, to nail salons, to coffee shops and mechanics, Tummino said.

It remains difficult for these business owners to get loans, but that has been made easier with remittances from the U.S.

The Obama Administration has eased restrictions before.

In 2009, Cuban-Americans could begin sending as much money home as they wanted. Other Americans could begin sending money to Cubans they weren't related to in 2011 -- but the amount was capped at $500 every three months.

Now americans can send up to $8,000 a year to Cuba.

The changes announced Wednesday raise the cap to $2,000 every three months.

At Western Union (WU), a money transfer can be made from the U.S. to Cuba much like one to someone in any other country.

"I think you're going to see a lot more people sending money, bolstering the Cuban economy," Tummino said.

Market Wrap-up for Dec. 22 – The Worst-Performing Dividend Stocks of 2014

While major equities indexes are almost certain to register solid gains for the year, the markets have seen plenty of turmoil as well. Here are the worst-performing dividend stocks of 2014.

The Ground Rules

Before diving into the list, let’s first establish some ground rules for our study. Here are the screening rules I used to come up with the list of laggards:

Stock must be a current dividend payer, and still trading on the NYSE/NASDAQ/AMEX Stock’s market cap must be greater than $100 million Stock must be a traditional equity (for our purposes, we’ll exclude ETFs and other funds) Stock must have lost at least 50% of its value year-to-date

Now that we have our simple rules in place, let’s see what stocks were the biggest disasters of the year so far.

The Worst of the Worst Company Symbol Price YTD % Change

Walter Energy	(WLT)	1.48	-91%
Cliffs Natural Resources Inc.	(CLF)	6.69	-74%
Penn West Petroleum Ltd	(PWE)	2.33	-72%
Mid-Con Energy Partners LP	(MCEP)	6.51	-72%
Portugal Telecom S.A.	(PT)	1.26	-71%
Barrett Business Services	(BBSI)	28.75	-69%
Nu Skin Enterprises	(NUS)	43.55	-68%
Valhi Inc.	(VHI)	5.66	-68%
Companhia Sider	(SID)	2.11	-66%
Carbo Ceramics	(CRR)	42.34	-64%
Navios Maritime	(NM)	4.18	-63%
Safe Bulkers, Inc.	(SB)	3.97	-62%
Breitburn Energy Partners L.P.	(BBEP)	7.82	-62%
Comstock Resources Inc	(CRK)	7.23	-60%
SandRidge Mississippian Trust	(SDT)	3.66	-60%
Linn Energy LLC.	(LINE)	12.24	-60%
Investors Bancorp, Inc.	(ISBC)	11.02	-57%
Eagle Rock Energy Partners L.P.	(EROC)	2.58	-57%
Arch Coal	(ACI)	1.93	-57%
Arcos Dorados Holdings	(ARCO)	5.27	-57%
Peabody Energy	(BTU)	8.55	-56%
LRR Energy L.P.	(LRE)	7.49	-56%
TransGlobe Energy Corporation	(TGA)	3.7	-56%
Enduro Royalty Trust	(NDRO)	5.38	-56%
Gerdau S.A.	(GGB)	3.58	-54%
Pacific Coast Oil Trust	(ROYT)	5.8	-54%
Baytex Energy Corp	(BTE)	17.96	-54%
SM Energy Co.	(SM)	38.76	-53%
Legacy Reserves L.P.	(LGCY)	13.28	-53%
Yamana Gold	(AUY)	4.1	-52%
Sturm, Ruger & Co., Inc.	(RGR)	34.85	-52%
W&T Offshore Inc.	(WTI)	7.63	-52%
Whiting USA Trust II	(WHZ)	6.49	-51%
Chicago Bridge & Iron	(CBI)	41.3	-50%
National Resource Partners L.P.	(NRP)	10.04	-50%
SandRidge Mississippian Trust II	(SDR)	4.5	-50%

Unsurprisingly, the vast majority of the stocks in this dubious list are energy-related. U.S. coal producers in particular have had a horrendous year, with many of them seemingly facing bankruptcy. You’ll also notice many MLPs in the list, which have been hammered amid the recent oil price plunge.

A couple of foreign stocks also stand out, namely Portugal Telecom (which can’t catch a break even though it’s on the verge of being acquired), and Arcos Dorados (which has been plagued by weak performance in its McDonald’s franchises, as well as negative effects from the stronger U.S. dollar).

Dishonorable mentions include SeaDrill (SDRL) and Herbalife (HLF), both of which suspended their payouts earlier this year.

Speaking of dividend suspensions, some of the stocks above are facing the possibility of eliminating their dividend programs in 2015. I wouldn’t be at all surprised to see stocks like WLT, CLF, ACI, and AUY suspend their dividends next year.