Thursday, June 18, 2015

Checklist for women who take financial decisions

He is against generalising any form of investment for any age or category of people. He prefers it being specific and personalised to each individual, be it men or women.

He advises against putting all your eggs into one basket, irrespective of how good a particular asset class might look. Based on individual profile, investment profile, time horizon and the goals, an investor needs to make an asset allocation plan wherein he or she decides how much funds will go into equities, how much into debt and how much into any other say real estate or precious stones, he says.

According to him, the idea is to make that kind of an asset allocation plan and allocate money based on that plan, and not as per the timing of the market.

Below is the verbatim transcript of Harshvardhan Roongta's interview on CNBC-TV18

Q: Do you think women are perhaps better placed to be making financial decisions and are you seeing a lot more women come to you for queries, I don't want to say anything but perhaps we are just intrinsically better organisers of finances?

A: Women otherwise are known to be better organised then men. I am not getting into comparing the habits of people but generally I would say that since women have multiple roles, they work, manage their house and office as well. So, the idea is in recent times we are seeing women coming forward to take charge of the finances.

Earlier it was all left on their husbands to do it or their parents to take charge of the finances, but recently we have seen that paradigm shift wherein women want to take charge. They are trying to take keen interest in their own finances so that they can be independent and they can take decisions on their own. So, answering your query yes we see that kind of awareness being created these days and hopefully it will only increase as days go by.

Q: Are the rules for women investing different from that of men and secondly just classifying them into three buckets say one single working women, secondly married and working and thirdly married with a family but not working. Most of the women would perhaps fall in one of these three, so what is the advice for each of them?

A: When you talk about personal finance, the requirements and what you do with your money is completely dependent on your current situation. So, if there is a woman who is single there are different goals that she has, there are different requirements that she has so there is a different thing that she does with her money.

So, similarly if there is a woman who is married without children there are different kind of set of investments and if a woman is independent and has a child as well there are different kinds of schemes for them.

So, it will be very difficult to generalise that all women who are not married need to do a particular set of things. All 35 year olds cannot have a simple and a straight forward blanket investment pattern. If a person has some liabilities in the short-term, he needs to make provisions for that vis-à-vis another person who has no liabilities in the short-term makes different set of investments. So, I would say let us not generalise any form of investment for any age or a category of people, let it be very specific and personalised to each individual, be it men or women.

Caller Q: I have some investment in public provident fund (PPF) and my trade period is approaching very soon. I want to invest that money, approximately Rs 7 lakh, in stocks like Reliance Industries ( RIL ), Hindustan Unilever ( HUL ), ITC , Tata Consultancy Services ( TCS ), Infosys , Sun Pharma , Lupin , etc. Is it worth entering maybe via mutual fund or direct equity now to get more returns?

A: The first thing would be that there is a general rule you do not put all your eggs into one basket. So, irrespective of what the market situation or what the conditions currently are you want to take benefits of the market being at lows and there is rupee depreciation. So, if you are considering these things then considering equity because of that reason I would say no, do not do that.

Understand there is a risk in every investment that you make. Like for instance in a bank fixed deposits (FD) there is a risk of inflation, though the capital is safe there is a risk of inflation. In equities there is a risk of capital, but inflation risk is taken care of. So, the idea is irrespective of however good a particular asset class looks at any given point in time you do not put all your eggs into one basket.

Based on each individuals profile, the investment profile, time horizon and the goals you need to make an asset allocation plan wherein you decide how much funds will go into equities, how much into debt, how much into any other say real estate or precious stones.

So, the idea is you need to make that kind of an asset allocation plan for yourself and allocate money based on that plan not as per timing of the market. So, I would suggest if you can take high risk you may chose to allocate more into equity, but not everything into equity. So, answering your query, no I would not suggest that you shift from PPF only because market conditions are favouring equities. You make an asset allocation plan and divide your money and invest accordingly.

Q: Is there a thumb rule on diversification because the caller has her money in fixed deposits, how much of that portfolio should she shift into equity?

A: First parameter of choosing an asset allocation plan, one of the primary factors is age, the other is goals. If a person is young but if she requires the money after two years then she certainly cannot invest into equities irrespective of age being on her side. So, general thumb rule then whatever is her age that much money gets invested into debt. Therefore, whatever her age is, probably that much could be in debt and the rest could be in equities provided she has no short-term requirements with those funds.

Caller Q: Which mutual fund should I invest in?

A: Mutual fund has schemes which suit all types of investors. So, what you have referred to is an asset class which is equity. So, there are different kinds of schemes in equities such as you have funds which invest only into large cap companies, some will invest into mid caps, a combination of them. There are some sector funds which invest only in a particular sector such as banking or pharmaceutical or technology. So, within the equity category there are different kinds of options available within debt - there are investments, there are schemes which allow investors to invest money for couple of days and going up to couple of years.

I do not want to throw up names to you. I want to throw up categories and one of the safest ways to invest into equities is to begin with index funds. So, in case you do not have an index fund in your portfolio, you can choose to invest in an index fund or if you want to start investing into equities again then there is another option available which is a balanced fund, a part of the money that you give, goes into debt and a part into equities. So, to begin with these are the options available.

As you progress into investing and you get comfortable with equity investing, you can choose schemes which are actively managed; you can choose a large cap fund and then going down a midcap and a small cap and then last would be sector fund. So, if you wish to know names in equity schemes then Franklin India Index Fund is one fund you can start with or you can start with an equity aggressive balanced fund, which is in HDFC Prudence Fund and if you want debt aggressive balanced fund then HDFC Monthly Income Plan (MIP) would be a scheme to start with.

Wednesday, June 17, 2015

How Are Q2 Earnings Shaping Up? - Ahead of Wall Street

Monday, July 22, 2013

The Q2 earnings season takes the spotlight with almost one-third of all S&P 500 members reporting results this week and little in terms of the Fed and other economic data distractions. We will know more about the broader earnings picture at the end of this week, but having seen results from almost one-third of the total market capitalization of the S&P 500 index by this morning, we have a representative enough sample with which to judge the results thus far.

Total earnings appear on track to reach a new all-time quarterly record in Q2, surpassing the level reached in 2013 Q1. On conventional metrics of earnings season performance like aggregate growth rates, beat ratios, and guidance, the Q2 season thus far is tracking what we saw in Q1. We should keep in mind, however, that this not-so-bad picture may be misleading as strength in the Finance sector is helping hide a lot of weakness elsewhere.

We will know more this week as many non-financial companies report Q2 results, but this morning's disappointing numbers from McDonald's (MCD) and last week's soft results from Google (GOOG), Microsoft (MSFT) and others are likely pointing towards an enduring trend - the earnings picture outside of Finance is fairly weak.

The Q2 Scorecard for the broader S&P 500 as of this morning (July 22) shows results from 107 S&P 500 companies or 21.4% of the index's total membership that combined account for 32.4% of its total market capitalization. Total earnings for these 107 companies are up +7.9%, with 61.7% beating earnings expectations. On the revenue side, we have a growth rate of +4.5%, with 49.5% coming ahead of top-line expectations. The earnings and revenue growth rates and the revenue beat ratio seen thus far are broadly in-line with what we saw from the same group of 107 companies in Q1, while the earnings beat ratio is modestly on the lower side.

Strong results from the Finance sector are playing a big role in keeping the agg! regate Q2 data for the S&P 500 thus far in the "not-so-bad" category. It is very hard to be satisfied with the aggregate numbers once Finance is excluded. Total earnings for the Finance sector are up +34.1% on +10.7% higher revenues, with beat ratios of 76% for earnings and 68% for revenues. Strip out Finance from the reports that have come out already and total earnings growth turn negative – down -2.9%. This is weaker than what these same companies reported in Q1. There are few positive surprises outside of Finance as well, with the earnings and revenue beat ratios outside of Finance tracking below Q1's levels.

The composite Q2 growth rate, where we combine the results for the 107 that have come out with the 393 still to come, is for +1.2% total earnings growth on +0.1% higher revenues. Excluding Finance, the composite earnings growth rate drops to a decline of -4.1%. Bottom line, the earnings picture outside of Finance is very weak in Q2, but expectations for the second half of the year reflect a meaningful recovery.

Current consensus estimates for Q3 reflect total earnings growth rate of +4.3% and +10.9% in Q4, followed by +11.1% growth in 2014 as a whole. Hard to envision these growth rates holding up given the overall negative tone of company guidance thus far. The question is whether investors will continue to shrug the resulting negative estimate revisions or will finally start paying attention to the underwhelming earnings growth picture? We will have to wait a few more weeks to find out. But if past performance is any guide on that front, then we probably don't need to lose much sleep over it.

Sheraz Mian
Director of Research

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Sunday, June 14, 2015

Why Ruby Tuesday Shares Got Trashed

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.

What: Shares of Ruby Tuesday (NYSE: RT  ) were giving investors indigestion today, falling as much as 17% after a lackluster fourth-quarter earnings report.

So what: The restaurant chain reported a $0.12 adjusted-per-share profit, short of expectations of $0.19. Without excluding those additional items, Ruby Tuesday would have seen a $0.49 per-share loss. Revenue was down 11%, to $316.1 million, as it closed some restaurants in the past year, while same-store sales at namesake Ruby Tuesday restaurants dipped 3.1% in company-owned locations, and 5.1% at franchises, indicating organic weakness. CEO JJ Buettgen said the company sees a same-store sales decline of high-single digits in the current quarter, but expects it to turn positive in the second half of the fiscal year due to new menu items and marketing campaigns.

Now what: It's hard to see the positive in this report, but the company is in a transitional phase, having exited the chains Marlin & Ray's, Truffles Grill, and Wok Hay over the past year, in order to focus on the core Ruby Tuesday business, and growing Lime Fresh, a Chipotle competitor. Lime Fresh may be valuable as a future revenue stream, but the company did take a goodwill impairment charge last quarter for its earlier acquisition, which seems to bode poorly. And with just 24 Lime Fresh locations in operation, compared to 783 Ruby Tuesday locations, the vast majority of the business is in its namesake brand. At the very least, I'd wait to see comparable sales moving in the right direction before putting faith in Ruby Tuesday.  

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Tuesday, June 9, 2015

NetSuite to Offer $270 Million in Convertible Notes

NetSuite  (NYSE: N  )  plans to offer $270 million worth of its convertible senior notes due 2018 to qualified institutional buyers, with the initial purchasers getting an option to buy up to $40 million more solely to cover overallotments. 

While the initial conversion rate, interest rate, and certain other terms of the notes still need to be worked out between NetSuite and the institutional buyers, when the notes are eventually issued they will be senior unsecured obligations of NetSuite that will pay interest semiannually and will mature on June 1, 2018, unless first repurchased or converted.

If the note holders want to convert the notes before March 1, 2018, certain conditions would first need to be completed. Upon conversion, however, holders will receive cash, NetSuite stock, or a combination of the two at NetSuite's election. Yet holders of the notes will have the right to require NetSuite to repurchase all or some of their notes at 100% of their principal, plus any accrued and unpaid interest, if certain events occur. Those events were not specified in the press release announcing the offering.

NetSuite intends to use the net proceeds from the offering for working capital and other general corporate purposes, including acquisitions of and investments in complementary businesses, products, services, technologies, and capital expenditures. It also anticipates using a portion of the proceeds to buyback as much as $30 million of its shares either through privately negotiated transactions or on the open market.

NetSuite notes that by buying back its stock, it may increase the value of its stock or limit a decrease in it. NetSuite's shares closed at $89.52 on May 28.

Monday, June 8, 2015

Does This Move Make Annaly a Better Buy?

At yesterday's annual Annaly Capital  (NYSE: NLY  ) shareholders meeting, a measure to externalize the company's management was voted upon and passed. In the following video, Motley Fool financial analysts David Hanson and Matt Koppenheffer discuss what this move means for shareholders, and why David thinks it shows that Annaly has one of the best management teams in the mortgage REIT sector today.

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The Real Reason the Dow's Steady This Morning

Having propelled the stock market to record after record, investors have gotten used to seeing every small bit of news as reason for a big market move. But over the long haul, muted days like today are much more typical as a lack of big-picture news forces investors to focus more on individual companies. Although many analysts pointed to the ongoing debate about what the Federal Reserve should do next as the reason for the market's ambivalence this morning, the simpler explanation is that in the absence of major news, there's little reason for prices to change. By 10:45 a.m. EDT, the Dow Jones Industrials (DJINDICES: ^DJI  ) were down about four points, while the S&P 500 had risen a fraction of a point.

Within the Dow, most stocks are similarly quiet. JPMorgan Chase (NYSE: JPM  ) has fallen 0.3% as the company prepares for tomorrow's annual shareholder meeting, at which investors will determine the fate of chairman and CEO Jamie Dimon. With many investors calling for Dimon to relinquish his dual leadership roles, the stock has nevertheless soared recently, reflecting skepticism that major institutional investors will do anything to change the course that has led to a strong recovery for the bank despite obstacles including the "London Whale" scandal.

But outside the Dow, merger-and-acquisition news has dominated the headlines. Yahoo! will spend $1.1 billion to buy Tumblr in a deal that could boost the online-search company's reach into the social-media realm. Smaller companies have seen much more dramatic moves. Pactera Technology (NASDAQ: PACT  ) has skyrocketed 30% after the IT services and consulting company got an offer to go private for $7.50 per share. Even after the jump, shares are trading about 10% below that offer, suggesting that investors aren't certain the deal will go through.

Finally, Chinese solar company JA Solar (NASDAQ: JASO  ) has spiked 47% after announcing better-than-expected solar-cell shipments in its first-quarter report. Although many of its Chinese peers have come under pressure from extensive debt, JA Solar pointed to strength in sales to Japan in helping the company beat its initial forecast for deliveries during the quarter. Nevertheless, JA Solar still faces a tough road ahead in dealing with big net losses and weak margins, and increased volume will only go so far in remedying the company's woes without overall improvement in industry pricing conditions.

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Thursday, June 4, 2015

Littelfuse Buying Hamlin Inc. for $145 Million

Littelfuse (NASDAQ: LFUS  ) has signed an agreement to acquire Key Safety Systems' Hamlin subsidiary for $145 million in cash, Littelfuse announced Monday.

The deal will add Hamlin's portfolio of sensors for the automotive industry to Littelfuse's holdings, which Littelfuse CEO Gordon Hunter called "a major step forward in our strategy to build a global, automotive sensor platform." Hamlin also makes sensors for the electronics and industrial markets.

Hamlin is headquartered in Wisconsin with manufacturing, engineering, and sales offices in the U.S., Mexico, Europe, and Asia. Hamlin had sales of approximately $76 million in 2012.

Littelfuse expects the acquisition to help it achieve double-digit sales growth going forward, and to add $0.35 per share in profit in 2014.

The $145 million Littelfuse is paying for Hamlin works out to a 1.9-times-sales valuation on the deal, a slight discount to the 2.2 price-to-sales valuation Littelfuse's own shares currently command.

The transaction, which is subject to antitrust oversight and other closing conditions, is expected to close by the end of May.


Tuesday, June 2, 2015

The Keryx (Nasdaq: KERX) Media Blunder Will Add to Our 700% Gain

On August 29, 2012, shares of Keryx Biopharmaceuticals, Inc. (Nasdaq: KERX), a company focused on pharmaceutical products for patients with renal disease, closed for the day's session at $2.06. Exactly two years later, on August 29, 2014, the same stock closed at $18.19.

That's right. Investors made a 780% profit over their original position, and it looked like the price per share (PPS) was destined to climb considerably higher.

In fact, analysts had set their average first-year target for the stock at about $23. And there was every reason to believe KERX would reach and break through that target after the FDA approved it for marketing in the United States on its PDUFA date, set for September 7.

But then something odd happened...

The FDA rendered its decision early, on September 5, and although the news was good -KERX's drug had been approved - the stock fell more than 11% by the session opening the following Monday and continued falling over the next few weeks - giving traders today an opportunity to take advantage of the situation and make huge profits.

Here's why...

A Great Drug with Phenomenal Potential

The developmental drug undergoing review, ferric citrate (formerly Zerenex), treats high phosphate levels (hyperphosphatemia) in patients with chronic kidney disease (CKD) who are on dialysis. People with this condition can end up with bone disease, vascular calcification, cardiovascular disease - and early death. Ferric citrate demonstrated that it could significantly lower phosphate in the blood, with an excellent safety and tolerability profile.

But that isn't its only benefit.

As it turns out, the drug can simultaneously treat iron deficiency anemia (IDA), a common secondary disorder in CKD patients with high phosphate levels. This, of course, would be a separate indication for the drug, and the FDA would not be reviewing both indications at the same time.

In fact, the agency would be unlikely to approve a separate indication for the treatment of IDA, because this isn't a drug you would want to give to patients who don't have hyperphosphatemia. Still, both the medical community and Wall Street viewed this as a huge plus for ferric citrate, lifting it head and shoulders above its competitors.

In fact, it could quickly knock its competitors out of the ring and earn very, very big profits. For dialysis patients alone, it would be in the $250 million to $500 million range, but KERX hopes to expand that market to include pre-dialysis patients, which would put it in the $1.2 billion range - a blockbuster.

So you might think Wall Street would hold a parade on approval of a drug like this one. But it was not to be. Instead, the press, along with many so-called "experts" on the Web, completely misunderstood and misrepresented the agency's decision and actually turned great news into bad.

The Media Apologizes

You see, as KERX was preparing its press release to announce the FDA approval, it requested a temporary halt to trading in its stock. This is a common practice among pharmaceutical companies when they're about to make an important announcement that may affect stock market sentiment.

During the halt, the Associated Press (AP), a not-for-profit cooperative of news organizations, released a story that the approval came with a caveat: the label would have to include a warning that instructed physicians to monitor blood iron levels in patients who were already on iron replacement therapy-that is, were already taking drugs for IDA. So as a result of this "unexpected" warning, the AP story said, the price-per-share (PPS) for KERX had already dropped by nearly six 6%.

That's right. The story made this claim while trading was still halted...

It is true that the stock had dipped nearly 6% and then rebounded a couple of points before the trading halt, but that actually had nothing to do with anything on a warning label. It was the kind of trading activity we often see before a binary regulatory catalyst, as traders executed options and cashed in on the run-up. AP got it wrong, and as a result, started an avalanche of panic selling.

AP eventually sent out a "correction" of the original article as soon as it realized its mistake.

But too late. The damage was done. And there would be more to follow, because not only had AP misstated the facts about what had happened before the halt, but it completely misinterpreted the importance of the warning label.

The story's position was that the warning label was unexpected and would dampen sales, and that what had been perceived as a great benefit of ferric citrate - its ability to increase iron levels in the blood and thus control IDA - was actually a big problem. To make matters worse, after AP published this explanation, nearly all of the "experts" on the Web, instead of thinking for themselves, repeated it.

And it was all nonsense.

The Real Story

Anyone who has any familiarity with medication labeling would know immediately that there is absolutely nothing unusual or unexpected about the way FDA instructed KERX to label its product. Every prescription drug ever manufactured has come with precautions on the label, and many, many of them carry warnings about use with other medications - especially ones that either work in the same way as the prescribed drug or that might combine with the drug to make it more powerful. If your family doctor prescribed an aspirin product for you, for example, he or she would certainly want to monitor any aspirin you might be taking from another source to prevent aspirin poisoning.

As for the label instruction to monitor iron levels in the blood if the patient is taking other iron supplementation - the fact is that all dialysis patients on prescription iron supplements are already monitored.

The AP piece also suggested that some analysts had expected the label to highlight the drug's ability to treat anemia. This is utter nonsense. KERX never submitted the drug for this indication, so there was absolutely no way the FDA would allow the manufacturer to do this. In fact, the only place on the label where the information about the drug's effects on serum iron levels could possibly appear would be with the "warnings," that is, the side effects, etc.

And that is a very good thing. It gives the KERX sales force the legitimate opportunity to discuss, inform, and educate doctors about the drug's marvelous effects on serum iron levels. It tells physicians that the FDA sees and recognizes these effects. It is, in fact, exactly what KERX needed to penetrate and snag a big portion of a $1.2 billion market.

With the confusion out of the way, it's our turn to make a move...

Now There's a Big Opportunity

Currently, KERX is perfectly positioned to take that market by storm. At the same time, the share price for KERX stock is artificially depressed due to the blunders and misunderstandings of the media.

So investors currently have an extraordinary opportunity - maybe a once in a lifetime opportunity - to get in on this stock at a deep discount.

I say "investors" rather than "traders" because this is a long-term play. KERX is poised to do great things over the next couple of years, and taking full advantage of the opportunity will mean getting in and staying with the company for at least that long. But the results will make the wait worthwhile.

Monday, June 1, 2015

10 Best “Strong Buy” Stocks — BITA SHPG TRGP and more

RSS Logo Portfolio Grader Popular Posts: 10 Oil and Gas Stocks to Buy Now15 Oil and Gas Stocks to Sell NowBiggest Movers in Energy Stocks Now – NGLS EXXI WTI TPLM Recent Posts: Biggest Movers in Healthcare Stocks Now – PBYI AGN PRGO EXAS Biggest Movers in Basic Materials Stocks Now – BCPC KS CMP WOR Hottest Technology Stocks Now – SUNE MLNX NSIT BRCD View All Posts 10 Best “Strong Buy” Stocks — BITA SHPG TRGP and more

This week, these ten stocks, all currently earning A’s (“strong buy”) on Portfolio Grader, have the best year-to-date performance.

Since the first of the year, shares of Bitauto Holdings Ltd. Sponsored ADR () have soared 57.9%. Bitauto provides Internet content and marketing services for the automotive industry, primarily in the People'’s Republic of China. .

Since January 1, Shire PLC Sponsored ADR () has climbed 61.9%. Shire, a biopharmaceutical company, researches, develops, manufactures, sells, and distributes pharmaceutical products. .

Shares of Targa Resources () have risen 62.9% since January 1. Targa Resources provides midstream natural gas and natural gas liquid (NGL) services in the United States. The stock’s dividend yield is 2.6%. .

Since January 1, Texas Pacific Land () has jumped 64.8%. Texas Pacific Land Trust derives revenue from all avenues of managing land, such as royalties from oil and gas and land sales. .

Since January 1, Illumina, Inc. () has shot up 66.8%. Illumina develops, manufactures and markets integrated systems for the large-scale analysis of genetic variation and biological function. .

The price of Forest Laboratories, Inc. () has seen a 69.1% boost since the first of the year. Forest Laboratories develops, manufactures, and sells both branded and generic forms of ethical products which require a physician’s prescription. .

The price of Green Plains Inc. () is up 72.9% since the first of the year. Green Plains Renewable Energy constructs and operates dry mill, fuel-grade ethanol production facilities. .

Repligen Corporation () has risen 73.2% since the first of the year. Repligen is a biopharmaceutical company that develops therapeutics for radiology and neuropsychiatry. .

Since January 1, the price of Questcor Pharmaceuticals, Inc. () has grown 74.9%. Questcor Pharmaceuticals develops and commercializes novel central nervous system-focused therapeutics that address significant unmet medical needs. .

Since the first of the year, the price of EQT Midstream Partners LP () has swelled 75.4%. EQT Midstream Partners provides natural gas transmission, storage, and gathering services in Pennsylvania and West Virginia. .

Louis Navellier’s proprietary Portfolio Grader stock ranking system assesses roughly 5,000 companies every week based on a number of fundamental and quantitative measures. Stocks are given a letter grade based on their results — with A being “strong buy,” and F being “strong sell.” Explore the tool here.

Sunday, May 31, 2015

Orion Launches Open-Source Client Portal

Orion announced in early May that it has launched a redesigned client portal that uses open-source code so other providers can build their own pages to integrate into the site.

“We’ve had a client portal since we started our business years ago. As web technology evolved, we felt like, ‘Hey, depending on the size of the tablet or the device that somebody is looking at this on, we need to make the design and menu systems responsive,” Eric Clarke, president and founder of Orion, told ThinkAdvisor on Wednesday.

“All those things are nice, but we have a lot of other systems that we interact with here at Orion to help our advisors be efficient. What we thought would be really neat would be to open up the code for the portal to outside integration partners to add additional pages and contribute back to the project.”

Clarke said Orion has reached out to providers like InStream, MoneyGuidePro and Finance Logix to contribute code for the project. So far, more than 40 firms have been set up to access GitHub, where the portal code is stored, to build integrated pages for the portal.

“GitHub allows us to share that code and information, share the project with our vendor partners and allow them to come back in and contribute their own pages,” Clark said. “The development effort really has become more of a community effort. We’re really excited in the coming months to see the integration pages that our partners provide.”

The portal integrates account aggregation from Intuit, which allows clients to add data on accounts not managed by their advisor.

“They enter their user name and password and hit enter, and those accounts will be added to the list of accounts,” Clarke said.

When clients log in to the portal, they’ll see their accounts listed on the left-hand side of the screen with a summary of their holdings. Clients can view their assets by category or class, and can view the underlying holdings that make up those classes.

“In addition to seeing everything in the household, they can select one of the [individual] accounts and the screen will refresh.” Advisors can set up household accounts that include all the individual accounts for each member, or “if they have a household that has a unique situation and they want to keep things separate, they can set up two households,” Clarke said.

“The portfolio tab allows the client to come in, interact with their portfolio, get positions, performance, cost basis and transaction-level information without having to run a report. It’s just an interactive, on-screen experience.”

Clients can also link their accounts on Dropbox or Box so they can share documents with their advisor easily, Clarke said.

Since launching the portal on May 1, more than 500 advisors have logged in for training sessiona, Clarke said. “Firms are out there beta testing it right now before they go live with their client accounts.”


Check out Advisors ‘Struggling’ to Get Most Out of Social Media as Its Popularity Grows: Study on ThinkAdvisor.

Thursday, May 28, 2015

Citi Cuts Bed, Bath To Hold On Weak Forecast, Earnings Growth

On Thursday, Bed, Bath & Beyond (BBBY) after its earnings forecast disappointed. Citigroup's Kate McShane also downgraded the stock from Buy to Neutral on the news, lowering her target price from $85 to $72.

McShane writes that excluding the effect of her conservative assumptions for share repurchases, earnings per share growth looks to be virtually flattish for the next two years. The announcement Thursday night indicates that "the company is facing a 2nd straight year of top-line deceleration driven by both slowing new store openings and modest comp growth." Moreover, she writes, she doesn't see an inflection point for gross margin in the next year, as she had previously thought possible, and she is concerned about the "ongoing increasing negative impact from couponing."

She notes that while investments in technology may improve Bed, Bath's omni-channel experience, this strategy will continue to weigh on EPS, and she now likes Williams Sonoma (WSM) as a better way to get exposure to favorable trends in home furnishings.

Her new estimates:

Lowering our FY15 EPS from $5.36 to $5.04 –We are taking down our EPS estimates on a slower comp environment over the next few years which will make it more difficult to leverage expenses, especially in light of continued investments in the omni-channel experience. Plus, the mix shift toward lower margin products may persist and the couponing reliance appears to be a permanent overhang. Lastly, the square footage expansion story for FY15 was less than we had expected and the opportunity to get a sales lift from square footage growth may be waning.


Wednesday, May 27, 2015

What Retailers Are Saying That Makes Me Believe Economic Growth Is Slowing

Conditions in the U.S. economy are deteriorating fairly quickly. The economic data suggests it’s slowing down. We already saw the U.S. economy decelerate in 2013 compared to 2012; now, investors are asking if this is going to be the case in 2014 as well.

All sorts of businesses in the U.S. economy are worried. This is not a good sign when you are hoping for robust growth.

Homebuilders in the U.S. economy have become very skeptical. The National Association of Home Builders/Wells Fargo Housing Market Index (HMI) witnessed a massive drop in February. The index, which looks at the confidence of homebuilders in the U.S. economy, plunged from 56 in the previous month to 46. Any reading below 50 on the HMI means homebuilders expect market conditions to be poor. (Source: “Poor Weather Puts a Damper on Builder Confidence in February,” National Association of Home Builders web site, February 18, 2014.)

Also Read: NYSE holidays 2014

Unfortunately, homebuilders aren’t the only ones who are worried and suggesting the U.S. economy isn’t going in the desired direction.

Retailers with major operations in the U.S. economy are feeling the same. Wal-Mart Stores, Inc. (NYSE: WMT)—one of the largest retailers—lowered its profit guidance for the fiscal fourth quarter, ended on January 31, 2014. The CEO of the company, Charles Holley, said, “We now anticipate that our underlying EPS [earnings per share] for the fourth quarter of fiscal 2014 will be at or slightly below the low end of our range of $1.60 to $1.70.” He added, “For the full year, we expect underlying EPS to be at or slightly below the low end of our range of $5.11 to $5.21.” (Source: “Walmart updates FY14 underlying EPS guidance for fourth quarter and full year,” Wal-Mart Stores, Inc. web site, January 31, 2014.) In other words, the company feels that it will not be earning the same profits as it previously predicted. Wal-Mart’s fourth-quarter results were due out this morning.

We have also heard from other major retailers in the U.S. economy, such as Macy’s, Inc. (NYSE/M), regarding their plans to cut costs by reducing their labor force and closing down their retail outlets.

You see, businesses are good at seeing which direction the U.S. economy is heading because they are closest to the consumers and can tell quickly if the trend changes. If they are worried, it means consumer spending in the U.S. economy—a major portion of the U.S. gross domestic product (GDP)—isn’t as robust.

Looking at the sentiment of businesses in the U.S. economy, I am not convinced in the notion that the economy will grow at a faster pace; to me, it will not be a surprise if the U.S. GDP grows at an even slower rate in 2014 than it did in 2013.

Investors should be looking at what businesses are saying as a sign of caution. It’s also a good time for investors to take some profits off the table if they have any. In addition, if investors are holding a losing position, they may want to consider taking a loss and raising some cash instead.

This article What Retailers Are Saying That Makes Me Believe Economic Growth Is Slowing was originally published at Daily Gains Letter

The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

Posted-In: Economics Markets

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Monday, May 25, 2015

Biggest Dow Losers of Last Week: Jan. 27-31

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

January is in the books, and the major indexes really dug themselves a hole to start the year. In the latest bad week on Wall Street, the Dow Jones Industrial Average (DJINDICES: ^DJI  ) lost 180 points, or 1.13%, while the S&P 500 fell 0.43%, and the Nasdaq slid 0.58%. With only one week in January in the black, the Dow is down 877 points, or 5.29%, year to date. Its peers didn't fare much better for the month, with the S&P down 65 points, or 3.55%, to start out the year and the Nasdaq down 72 points, or 1.74%. The S&P, like the Dow, marked just one week in positive territory in January, while the Nasdaq managed two weeks.

The big macro news this past week was the Federal Reserve's decision to continue tapering, with the announcement that it will reduce its asset purchases to $65 billion in February, down from $75 billion in January and the $85 billion it had been buying every month before that. We also got the second installment of the third-quarter gross domestic product figure, which came in at 4.1% growth, compared with to the 3.2% the first reading indicated. And we heard a number of consumer sentiment and confidence reports, all of them indicating that confidence levels are high but that consumers may not as optimistic as they were in December. 

Before we get to the Dow's biggest losers of the week, let's look at its top performer, Caterpillar (NYSE: CAT  ) , which rose 8.98%. Shares began to rise on Monday after the company reported earnings and never looked back. Although revenue dropped 10% during the quarter, net income was much higher than Wall Street was expecting. The board also approved a $10 billion share-buyback program, and management said it's starting to see an improving world economy. 

Last week's big losers
Procter & Gamble (NYSE: PG  ) closed the week 3.23% lower, enough to make it the Dow's third worst performer of the week. There was very little negative news pertaining to the company, but a number of investors have been mentioning how overpriced the stock looks. Shares of this slow-growing consumer-goods giant are currently trading at 20.5 times past earnings, or 16.5 times future expected earnings -- reasonable for a high-flying tech stock, perhaps, but not for a company with just 2% revenue growth. The stock does pay a stable and reliable 3% dividend yield, but income investors continue to rotate out of dividend-paying stocks in anticipation for higher Treasury yields, as the Federal Reserve continues its tapering and allowing rates to slowly rise.

Coming in second place, after falling slightly more than 4%, is Chevron (NYSE: CVX  ) . The big decline came on Friday, after reporting a 4% revenue drop and a 32% net earnings decline compared with the same quarter last year. Management said lower production and weak global fuel costs played a large role in the results. To counteract these types of problems in the coming year, management is looking to cut some $2 billion from its expenses. A high amount of uncertainty about where fuel prices and production levels will be six months to a year from now had investors concerned about the company's future earnings. Those are the types of risk that oil and gas investors always need to watch out for.  

Finally, this past week's biggest Dow loser was Boeing (NYSE: BA  ) , as shares fell 8.33%. Boeing also reported earnings this week, and while revenue of $23.8 billion and earnings per share of $1.88 were both better than what the company posted last year, investors were disappointed with management's future guidance. The company is forecasting revenue growth of 1%-2% in 2014, which is not something an investor who bought shares at a valuation of 23 times earnings wants to hear. The expected slow growth in the coming year may continue to have an effect on Boeing, but if you bought shares based on the idea that the company has hundreds of billions of dollars in its backlog, you should sit tight and ride out this pullback.  

The other Dow losers this week:

3M, down 1.55% American Express, down 2.22% AT&T, down 0.29% Cisco, down 1.3% ExxonMobil, down 2.83% Goldman Sachs, down 2.1% Home Depot, down 2.91% Intel, down 1.08% International Business Machines, down 1.64% Johnson & Johnson, down 2.36% McDonald's, down 0.27% Coca-Cola, down 2.62% Travelers, down 0.4% Visa, down 2.63% Walt Disney, down 0.15%

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Sunday, May 24, 2015

Hangover Time for Stocks as S&P 500, Dow Jones Industrial Average Slump

So here’s the hangover after the party, as 3M (MMM) and Pioneer Natural Resources (PXD) outweigh gains in U.S. Steel (X), Chico’s FAS (CHS) and Wal-Mart (WMT).

Bloomberg News

The S&P 500 has dropped 0.8% to 1,832.77 at 12:01 p.m., while the Dow Jones Industrial Average has fallen 123 points, or 0.7% to 16,4547.13.

Why is the market dropping? It’s certainly not the economic data, which indicates further strength in 2014. Initial jobless claims fell to 339,000, beating forecasts for 344,000, but the numbers have been erratic–and not necessarily trustworthy– thanks to the holiday season. The ISM Manufacturing Index fell to 57 in December, beating forecasts for 56.8, an indication that the manufacturing recovery is rolling along. Jefferies’ Thomas Simons explains:

Recent data suggests that the manufacturing recovery is gaining traction once again and that the combination of the government shutdown and the latest round of fiscal follies in Washington have had little more than a passing effect on the sector…We have been expecting an acceleration in manufacturing based on auto production, developments in the energy sector, and the strength of the housing recovery and we think that this acceleration will continue through the second half of the year to buoy overall economic growth.

Deutsche Bank’s Alan Ruskin notes that the ISM order minus inventories is “the highest since mid 2010 – an encouraging forward looking growth signal.”

Considering the general strength of the day, why are investors feeling down today? Bloomberg blames Wells Fargo’s downgrade of Apple (AAPL), which has weighed on tech shares today. The Wall Street Journal says its the fault of weak overseas markets. Considering that a number of last year’s top-performing stocks are falling today, it could just be early-year rebalancing.

Consider: Wal-Mart, which returned just 18% in 2013, has gained 0.6% to $79.18 at 11:59 a.m., despite having to recall Chinese donkey meat. 3m, which rose 54% last year, has fallen 1.4% to $138.30. United States Steel, meanwhile, has gained 4% to $30.68after it was upgraded to Buy from Hold by KeyBanc. It rose 25% in 2013 including reinvested dividends. Pioneer Natural Resources, which advanced 73% last year, has dropped 3% to $178.54today. Chico’s FAS, which returned just 3.4% in 2013, has gained 3.5% to 19.49 after being upgraded by Jefferies.

Is it out with the old and in with the new?

Wednesday, May 20, 2015

All I Want for Christmas Is a Bigger Cellphone Battery

A recent poll on tech enthusiast website Slashdot shows what tech-savvy consumers really want out of their smartphones nowadays. The poll may not be very scientific, but the voice of 32,000 tech enthusiasts should still count for something.

Apple can stop making thinner iPhones and squeeze a bigger battery into that extra space instead. Microsoft might be able to snag some mobile market share by lowering prices on its Lumia phones. There will always be a niche market for high-end models where price is no object, but high performance and the correct handset size don't seem to matter outside that specialized market.

Huge volume will come from making these two changes above all else. The only handset designer that seems to get it right now is Google (NASDAQ: GOOG  ) , as shown in the low-cost but very capable Moto G by Big G's Motorola division.

In the video below, Erin Miller asks Fool contributor Anders Bylund what this smartphone poll means and what it can teach investors in the mobile industry.

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Tuesday, May 19, 2015

Having enthusiastic employees takes creativity

Dear Gladys: I took your workshop on hiring good help. I agree that the best employees are the ones who are enthusiastic. But, how can an employer make sure that his enthusiastic employees stay that way. Some of my people who have been here for a long time seem to be rather ho-hum. In other words, they send the message that it's just another day on the job. What to do? — R. J.

It's a good idea to begin with making sure that your employees feel like they are working in a safe and stable environment. If your staff members don't feel like they have a secure job position, that alone can wipe out the enthusiasm of the best of people.

Enthusiasm is fueled by creativity and imagination, and as a good leader and employer it is up to you to see to it that both are fueled.

Take a close look at how you manage your company. Do you hold the reins tight and not allow your employees to self-manage? Employees need to feel a sense of freedom in helping a company reach its goals and objectives.

Are you including your people in decision-making and goal setting? This can often be an overlooked area. Some employers think that only they can make goals and decisions. The truth is that many times it's the people on the front line that have a clearer vision of what's going on. Sometimes it's the decisions made by management without involving those on the front line that that can kill enthusiasm.

ENTREPRENEURIAL TIGHTROPE: Bosses taking credit for your ideas

I remember going to a hair salon where the owner was constantly mailing coupons to her steady customers. Her efforts were not bringing in any new business. A couple of employees kept telling her to offer discounts to senior citizens, especially since two senior living developments had been built within walking distant to their location. The owner felt she knew better and ignored the suggestion.

The stylists continued to make suggestions, and the owner continued to ignore them. They suggested other minor changes that would h! ave increased business, such as adding a manicurist. The owner reminded them that she was the owner of the shop and if they didn't like how she operated they could leave. They became indifferent about their jobs

Their indifference didn't last long. They formed a partnership and opened a hair salon that offers senior citizen discounts. They have a manicurist and pedicurist on duty daily, and the business is booming. They also ask their employees for creative input to help the business to continue to grow.

The company that they left soon went out of business. The owner failed to see that the community was changing, which was something her employees recognized. Perhaps if she had at least considered their suggestions her business might have lasted.

If you really want to go deeper into ways of keeping employees fired up, justimagine what you would want for yourself if you were in their shoes.

Gladys Edmunds, founder of Edmunds Travel Consultants in Pittsburgh, is an author and coach/consultant in business development. E-mail her at

Wednesday, May 13, 2015

Citigroup Maintains “Neutral” Rating, Raises PT on Illinois Tool Works (ITW)

Citigroup announced on Wednesday that it was maintaining a “Neutral” rating on the Glenview, IL-based industrial conglomerate, Illinois Tool Works (ITW), but went on to raise its price target for the company.

Deane Dray, an analyst with the firm, noted “Following its disclosure in February 2013 that it was reviewing strategic alternatives for its $2.4 bil Industrial Packaging business, ITW officially announced on Sept-24 that the sale process has begun. In an incremental positive, the company declared that all the dilution from the divestiture would be offset by buybacks and that additional balance sheet leverage will be used to fund the program.” Given the lagged benefit of the expected buyback, Citigroup raised its price target on the stock from $75 to $80 a share.

Illinois Tool Works shares traded lower on Wednesday, shedding 0.97% on the day. The stock is up 27% YTD.

Tuesday, May 12, 2015

Banks Foresee Endless Profits Five Years After Crisis

NEW YORK (TheStreet) -- Five years after the collapse of Lehman Brothers, the nation's largest banks disclosed in a series of self-administered stress tests on Monday that they expect to be profitable during the next financial crisis.What a difference five years makes.It wasn't so long ago that all of the largest lenders in the U.S. were either in search of life saving financial support or on the verge of accepting billions in buffer capital that the government shoved into bank coffers as part of its Troubled Asset Relief Program. Now, banks expect that they will be able to maintain minimum capital ratios generally in excess of 9%, in the event of another market crash and severe recession over the next two years. Many even expect to remain profitable.Stress test results released by large lenders on September 15 indicate a double-edged sword. There is no denying that firms such as Morgan Stanley (MS) have transformed their business and are in a far healthier state after barely surviving the 2008 financial crisis. However, as expectations continue to rise for the banking industry's performance during a next bout of economic tumult, investors and C-Suites may be returning to the state of collective overconfidence that plagued the industry five years ago.Morgan Stanley, US Bancorp (USB) and PNC Financial (PNC) now expect to report a profit in the next crisis. Last year Morgan Stanley forecast a stressed loss of $12.6 billion, however, those projections were before the firm took control of brokerage Morgan Stanley Smith Barney. JPMorgan (JPM) expects to report a minimal $300,000.00 loss in the next crisis while Bank of America (BAC) and Citigroup (C) have both dramatically reduced their stressed loss forecasts.Optimism isn't uniform across the banking sector.Goldman Sachs  (GS) expects to report large losses in a time of crisis, a contrast to its more wealth-management oriented competitor Morgan Stanley. Wells Fargo, meanwhile, increased its expected loss to $3.8 billion as a! result of lower pre-provision net revenue. The nation's largest mortgage lender still expects loan losses on its mortgage and commercial lending operations to be far lower than those projected by the Fed in its 2013 Comprehensive Capital Analysis and Review (CCAR). Indeed, it is troubling that there is a large divergence between expected losses in banks' internal stress tests versus those made by the Federal Reserve in its annual CCAR. Consider that while JPMorgan expects minimal losses in a stressed environment, the Fed's last CCAR projected $32.2 billion in losses. It forecast far higher losses on the bank's loans and activity. The same holds true at Bank of America and, to a lesser extent, Citigroup.Overall, the Fed projects that the nation's four largest banks would lose nearly $140 billion in a time of crisis, while internal estimates released by those banks on Monday only forecast about $50 billion in losses. Analysts generally believe the next round of stress tests from the Fed in March of 2014 will move closer to banking industry estimates, instead of vice versa."While capital standards lack uniform harmonization and will likely increase over the foreseeable future, we believe that today's relatively punitive capital levels will likely subside over time as the industry continues to build capital and the associated risks and economic landscape continue to change," Todd Hagerman, a Sterne Agee banking analyst wrote in a Tuesday client note. 

Analysts see rising forecasts of banking sector net income during a stressed environment as reinforcing expectations that firms will be able to increase their dividend and share buybacks in coming years. "Our two main observations are that capital ratios now appear even higher than previously estimated. And second that several banks, in particular BAC, C, PNC and MS, now estimate their net income during a stressed scenario will be stronger," Richard Staite, a banking analyst at Atlantic Equities, wrote in a Tuesday client note. 

-- Written by Antoine Gara in New York

Sunday, May 10, 2015

Microsoft Finally Makes the Right Choice: CEO Ballmer Is Done

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

Microsoft (NASDAQ: MSFT  ) is finally doing what it should have done years ago. Is this the start of a new era in Redmond, or is it a day late and a dollar short?

The world's largest software company is about to get a new CEO. Longtime leader Steve Ballmer will leave the CEO chair sometime in the next 12 months.

Investors love the very idea of losing Ballmer. Microsoft shares jumped as much as 9.4% on the news. That's good for a cool $28 billion in extra market cap value overnight, and the peak burst of positive energy added 23 points to the Dow Jones Industrial Average (DJINDICES: ^DJI  ) index.

The announcement comes just weeks after Ballmer's latest radical reorganization of Microsoft's leadership teams, meant to transform the company into a "devices and services" operation. Ballmer puts a positive spin on the timing of it all, claiming that it's a good idea to bring aboard fresh long-term leadership in the middle of this important transformation. "There is never a perfect time for this type of transition, but now is the right time," Ballmer said in an internal memo.

I'm not sure I buy that argument.

This summer's reorg seemed like a power play that consolidates even more power in the CEO's office. Announcing your retirement right after an audacious power grab doesn't make much sense. I'd argue that the board of directors finally got tired of Ballmer's antics and pushed him out, as graciously as possible.

Feel free to refute my conclusion in the comments box below, but keep in mind that Ballmer isn't part of the team that's looking for a successor. His input on who's to sit in his chair next will be, shall we say, limited.

Instead, the special committee is chaired by Microsoft's lead independent director, John Thompson. Chairman and industry legend Bill Gates is on the team, alongside the chairs of the audit and compensation committees.

And if you thought this crack team would look only at internal promotion candidates, headhunter firm Heidrick & Struggles (NASDAQ: HSII  ) is there to vet the field of outsider candidates. It's a high-profile contract for Heidrick, but the stock fell 0.7% today anyhow. The lack of popping champagne corks in the company's Chicago headquarters is an indication of just how tough this recruitment drive will be.

Many single-day price jumps are destined to fade away, but this one makes sense in a long-term perspective. Ballmer's heavy-handed management style and lack of innovative vision held the company back over the last 13 years. Replacing him won't automagically fix all of Microsoft's problems, such as missing out on the mobile computing trend and botching the Windows 8 release several times over, but it's definitely a step in the right direction.

The tech world has been thrown into chaos as the biggest titans invade one another's turf. At stake is the future of a trillion-dollar revolution: mobile. Microsoft could use a top-tier talent in Ballmer's old office to secure a long-term place in the new era. To find out which of these rivaling giants is set to dominate the next decade, we've created a free report called "Who Will Win the War Between the 5 Biggest Tech Stocks?" Inside, you'll find out which companies are set to dominate and give in-the-know investors an edge. To grab a copy of this report, simply click here -- it's free!

Tuesday, April 28, 2015

To book profits or not? Try rebalancing portfolio instead

Below is the verbatim transcript of Rustagi's interview with CNBC-TV18.

Q: Gold has slipped below USD 1,400 per ounce levels and a lot of investors have again highlighted the dilemma of whether to stay invested or book profits when the going is good. In fact, equity investors face this dilemma time and again. So should they continue to stay invested? How should one book profits?

A: There are two major decisions to be made for any investor especially when it comes to asset class like equity and gold because it becomes a bit of complicated because talking about the current market scenario, for example one has seen the market going up and also crash is seen on the gold side. Therefore, it becomes a bit difficult to decide as to whether one should be staying investing or should be exiting from this. So, it is very important for investors to have a strategy in place.

Things to know before redeeming investments

As I mentioned earlier, one dilemma is to buy and that can be taken care of especially when one is investing in a disciplined manner by investing regularly but when to sell remains a tricky one. Therefore, it is important for investors to have a strategy in place.

As investors has the tendency to allow portfolio to ride on especially when the going is good but when they face with volatility, they become very nervous and so one see investors taking decisions in a haze either getting out of the asset class completely or allowing the portfolio to continue in the hope that there will be some recovery.

I think both decisions expose them to some kind of risk and that is why it is important for every investor to have a strategy in place once the strategy is to rebalance the portfolio. Rebalancing means to bring the asset allocation back to the original level. That is of different asset classes like equity, gold or debt.

Here's how you can generate extra returns on gold

How it is done is that when an investor has an overexposure to equity from the expected level, he will book profit when the going is good and he will invest the money when market is down also rebalancing is very important because every portfolio is designed to tackle an accepted level of risk by doing nothing when the going is good basically exposes to much higher risk. However, I believe that the profit booking should be done when the allocation drifts by 10 percent or more. Doing it frequently also defeats the purpose.

Second, any other investor who wants to book profit but is not sure about when to do it then I would like to mention here about the mutual fund investor; those who invest in equity or equity oriented balance fund can opt for a dividend payout option. These funds typically pay dividend once in a year. The tax-free nature of this dividend makes the whole exercise very tax efficient and also they do not have to worry about timing the market. Therefore, it is evident that booking profit is necessary otherwise one is exposing oneself to more risk.

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FPO Inks Lease Deal - Analyst Blog

First Potomac Realty Trust (FPO) – an industrial real estate investment trust (REIT) – recently penned a lease deal with a professional services firm for 30,036 square feet of space at its Md.-based Class A office property, Redland Corporate Center. With this transaction, the property is now 100% leased.

The Redland Corporate Center, comprising multi-storied office buildings, 520 and 530 Gaither Road, spans 348,469 square feet. The property is positioned in I-270 corridor of Montgomery County and is close to famous landmarks such as Rio Washingtonian Center, Fallsgrove Village Center and King Farm Village Center.

Notably, the asset was acquired by First Potomac in Nov 2010, in a joint venture with Perseus Realty, LLC. This was the largest premium buyout by First Potomac that year.

Redland Corporate Center's prime location and high-class amenities make it an ideal property among First Potomac's assets in the Maryland area. We expect the deal to boost the company's rental revenues and strengthen its tenant base.

First Potomac owns, manages, develops and redevelops office, business parks and industrial properties in the greater Washington D.C. region. As of Mar 31, 2013, the company's portfolio spanned about 14 million square feet. The portfolio consists of 43% office property, 23% industrial property and 34% business parks.

First Potomac is expected to release second-quarter 2013 results on Jul 25. The company has an Earnings ESP (Read: Zacks Earnings ESP: A Better Method) of 0.00% and it carries a Zacks Rank #3 (Hold). Thus, we are not so confident about a positive earnings surprise.

Some better performing REITs include DCT Industrial Inc. (DCT), DuPont Fabros Technology, Inc. (DFT) and CubeSmart (CUBE). All these stocks carry a Zacks Rank #2 (Buy).

Monday, April 20, 2015

What Panera Could Learn From Chipotle

Panera Bread (NASDAQ: PNRA  ) is in unfamiliar territory. After logging industry-trouncing sales growth for years, its latest results put it much closer to plain old average. That could be bad news for a stock that's trading at a premium to other casual dining giants.

For the quarter that just ended, Panera saw comparable sales growth of just 3.8%. That was lower than the 4%-5% annual target it forecast last quarter, which itself was below the 4.5%-5.5% that Panera was expecting two quarters ago. Something clearly isn't working at the bakery-cafe.

What's working
Store growth isn't the issue. Panera opened 37 new locations in the quarter, bringing its total to 1,708 restaurants. The company sees loads of potential for boosting its store footprint and expects to hit the high end of its full-year openings goal of 115 to 125 new units.

Profitability is on track, too. Operating margin inched up by 60 basis points, keeping Panera firmly ahead of Darden Restaurants (NYSE: DRI  ) , and closing in on Chipotle Mexican Grill (NYSE: CMG  ) .

PNRA Operating Margin TTM Chart

PNRA Operating Margin TTM data by YCharts

What's not working
But Panera is coming up short where it counts the most -- during peak lunch hour. After average food production times spiked last quarter, Panera has called out its throughput as a major operational weakness. It seems that for many of the company's locations last quarter, the customer traffic was there, but service just wasn't quick enough to satisfy it.

That could be due to Panera's increasingly complex menu. The company recently added a full line of pasta dishes to its offerings. And while that's been great for boosting check averages, it might have slowed down the kitchen and limited total output.

It doesn't have to be that way. For clues on mastering the art of high-volume feeding, Panera can look to Chipotle. The burrito slinger's most efficient restaurants process 350 orders over lunch hour, moving one through the line every 11 seconds. Sure, that's mostly thanks to Chipotle's buffet-line concept that keeps the kitchen humming. But the company has also been extremely careful about adding anything to its menu for fear of gumming up the works.

A tough road ahead
The good news is that Panera is aware of the production issue and plans to meet it head-on. But it won't be an easy fix.

Management warned of "choppy" results over the next few quarters -- and a potential drop in profitability -- as it makes the investments required for getting throughput numbers up. That spending will be worth it if it helps Panera serve all of its customers at peak hours, lifting the company's sales growth back to above average in the process.

If you're an investor who prefers returns to rhetoric, you'll want to read The Motley Fool's new free report "5 Dividend Myths ... Busted!" In it, you'll learn which stocks provide premium growth and whether bigger dividends are better. Click here to keep reading.

Tuesday, April 14, 2015

Are Investors Paying Too Much for This Consumer Products Stock?

On Tuesday, shares of WD-40 Company (NASDAQ: WDFC  ) rose by as much as 12% before giving back all of those gains to trade flat by the end of the session.

More specifically, quarterly net sales rose 7% year over year, to $93.1 million, while net income for the quarter came in at $10.3 million, representing an even more impressive 13.2% increase over last year. Meanwhile, diluted earnings per share rose 15.8% year over year, to $0.66.

To be sure, these earnings crushed analysts' estimates by $0.10, and the company raised its full-year earnings guidance by around 3.4% to boot, telling investors they now expect to earn between $2.40 and $2.48 per share.

So what happened?
So why did shares of WD-40 retreat as the day wore on?

As fellow Fool Jeremy Bowman pointed out Tuesday, some investors are worried that WD-40's growth doesn't seem to support its valuation. And, on the surface, with the stock trading at 22 times next year's estimated earnings, those concerns certainly look valid. 

In addition, there's a sense of disappointment that WD-40 can't have its cake and eat it, too, as it chose recently to purposefully reduce its expanded focus on low-margin cleaning products. This includes its Carpet Fresh, Spot Shot, and 2000 flushes toilet bowl cleaners, the sales for which declined by 48%, 29%, and 12%, respectively.

In effect, WD-40 is leaving money on the table -- albeit from low-margin products -- and allowing competing consumer products stalwarts like Procter & Gamble and Kimberly-Clark to mop up that extra income with cleaning products of their own.

Remember, though, the market capitalizations of Kimberly-Clark and Proctor & Gamble currently clock in around $38.3 billion and $223 billion (yes, with a "b"), respectively. By contrast, with WD-40, we're talking about a comparatively minuscule $900 million business, whose global reach and pricing power still can't come anywhere near those of its massive industry rivals.

Then again, while the big boys enjoy their superior economies of scale and wide arrays of popular products, WD-40 investors can take solace in knowing it will take much less growth in any one single segment to move the company's income needle.

Here's where WD-40 gets its growth...
That's why WD-40 has chosen to focus its efforts on reinforcing the market position of its widely known multipurpose maintenance products category, which includes all variants of its namesake multi-use WD-40 lubricant, and boasts much more appealing margins than its secondary cleaning products. 

Most recently, this category expanded with the introduction of its new WD-40 BIKE products, with which the company is focusing on independent bike distributors around the globe. As a result, and thanks to a broad performance in the product line, sales from this segment grew 12% last quarter and accounted for 88% of WD-40's global total.

By expanding the scope of, and focus on, products incorporating the well-known WD-40 brand and its respective favorable margins, then, WD-40 Company is assuring it can continue to achieve its ongoing goal of maintaining at least 50% gross margin, 30% or less in operating expenses, and (as a direct result of the first two), 20% or higher earnings before interest, taxes, depreciation, and amortization, or EBITDA -- or, as WD-40 CFO Jay Rembolt refers to it, their 50/30/20 rule.

...but it doesn't need high growth to succeed
In addition, remember the company's diluted earnings per share did outpace the sluggish revenue growth, largely thanks to its share repurchase efforts in spending around $9.8 million buying back 182,000 shares of WD-40 stock during the quarter.

For those of you keeping track, that also leaves about $6.5 million remaining from the company's existing $50 million share repurchase authorization, which WD-40 plans to exhaust by the end of the year. At that time, they will continue repurchasing shares under their new, already-approved $60 million buyback plan, which expires in August, 2015. Given today's share price, those repurchases alone could enable WD-40 to reduce its total number of shares outstanding by more than 7%.

In addition to its share repurchases, investors should also remember WD-40 also aims to pay out at least 50% of its net income to shareholders each quarter in the form of dividends.

Finally, the company's balance sheet remains solid with $52.3 million in cash, and $35.2 million in short-term investments. Curiously, though, WD-40 also recently maintained a line-of-credit balance of $63 million at the end of the third quarter.

However, in an Apple-esque move, management also explained that investors should be more than comfortable with this arrangement considering that much of the cash they're generating is held offshore, enabling them to continue to pursue their growth initiatives while at the same time returning capital to shareholders without suffering the resulting domestic tax consequences.

Foolish takeaway
To be honest, while WD-40's branding power is solid, I certainly don't expect the company's revenue to go through the roof anytime soon. And, while I can't claim the stock is especially "cheap" at 22 times next years' estimated earnings, there is much to be said for finding a predictable income stream from a solid business that maintains a consistently shareholder-friendly culture. And that, my fellow Fools, is exactly why WD-40 investors are willing to pay a premium for the stock absent spectacular growth.

Over the long term, then, largely because of WD-40's impressive efforts to maximize shareholder value through dividends and share repurchases, I see no reason the stock won't be able to continue to outperform the broader market indexes.

But remember, WD-40 certainly isn't the only solid dividend payer out there. If you're on the lookout for high-yielding stocks, The Motley Fool has compiled a special free report outlining our nine top dependable dividend-paying stocks. It's called "Secure Your Future With 9 Rock-Solid Dividend Stocks." You can access your copy today at no cost! Just click here.

Sunday, April 5, 2015

Cablevision Sells Clearview Cinemas to Bow Tie

With a history that spans use of the nickelodeon, Vaudeville, and the creation of the motion picture theater, Bow Tie Cinemas was handed the velvet rope to 41 Clearview Cinemas yesterday, making it the eighth-biggest theater operator in the country.

Both Bow Tie and Cablevision (NYSE: CVC  ) , which owned the Clearview chain, announced yesterday they had completed the transfer of ownership of the theaters, which was first announced in April, though financial terms for the transaction were not disclosed. As the oldest cinema company in the U.S., Bow Tie says it now has the largest number of theater locations in the New York metropolitan area, and operates 63 movie theaters with 388 screens in seven states.

Bow Tie said in April it planned to " make a substantial investment in the newly acquired Clearview theaters," including Chelsea Cinemas, which will become its Manhattan flagship.

Cablevision bought the Clearview chain in 1998 and tried to sell it in 2003 but couldn't obtain a satisfactory price for it. At the time Forbes estimated its value to be about $135 million. It put it back on the market again last year.

Williams Mullen acted as legal advisor to Bow Tie Cinemas and Anchin, Block & Anchin acted as financial advisor. Citigroup acted as financial advisor to Cablevision and Hughes Hubbard & Reed LLP acted as legal advisor.


Tuesday, March 31, 2015

Why TICC Capital Is Poised to Outperform

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, closed-end asset manager TICC Capital Corp. (NASDAQ: TICC  ) has earned a respected four-star ranking.

With that in mind, let's take a closer look at TICC and see what CAPS investors are saying about the stock right now.

TICC facts

Headquarters (founded)

Greenwich, Conn. (2003)

Market Cap

$523.3 million


Asset management

Trailing-12-Month Revenue

$74.8 million


CEO Jonathan Cohen (since 2003)
COO Saul Rosenthal (since 2003)

Return on Equity (average, past 3 years)


Cash / Debt

$60.2 million / $390.1 million

Dividend Yield


Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 97% of the 292 members who have rated TICC believe the stock will outperform the S&P 500 going forward.   

Just yesterday, one of those Fools, All-Star arisktaker, tapped TICC as a particularly attractive income opportunity:

[C]urrently paying an 11.69% dividend. Closed-end investment company. Provides capital to non-public, small & medium-sized, technology companies. Company also has warrants of other equity instruments [in] some of the companies it lends to. No insider purchases or sales in the last 12 months. Should do well in a recovering economy.

If you want market-thumping returns, you need to put together the best portfolio you can. Of course, despite a strong four-star rating, TICC may not be your top choice. If that's the case, we've compiled a special free report for investors called "Secure Your Future With 9 Rock-Solid Dividend Stocks," which uncovers several other juicy income opportunities. The report is 100% free, but it won't be around forever, so click here to access it now.

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.

Is J. C. Penney the right retailer for your portfolio? Learn how to maximize your investment income and "Secure Your Future With 9 Rock-Solid Dividend Stocks," including one above-average retailing powerhouse. Click here for instant access to this free report.

Add J. C. Penney to My Watchlist.

Monday, March 30, 2015

CheckPoint Picks a CFO

Three months after settling upon a new chief executive officer, it looks like Thorofare, N. J.-based Checkpoint Systems (NYSE: CKP  ) will soon have itself a new CFO as well.

On Friday, the "shrink management" (i.e., anti-shoplifting) company announced that CFO Raymond D. Andrews plans to retire on July 31. Andrews will remain for the next couple months to ensure an orderly transfer of power. Meantime, his replacement, newly hired CFO Jeff Richard, will take over on May 28.

Richard joins Checkpoint from environmental services firm Safety-Kleen Systems, where he also served as CFO. Prior to that, he was COO and CFO at Pavestone Company.

Simultaneously with making the new-hire announcement, Checkpoint revealed in a filing with the SEC the terms of Richard's employment. He will be paid a base annual salary of $420,000, plus:

an annual executive bonus targeting 75% of base salary, but ranging as high as 135%; long-term incentive compensation of up to 75% of salary; 5,760 stock options vesting over three years; 12,100 restricted stock units vesting when the stock price closes above $15 and stays there for one month; 2,600 performance shares that all vest simultaneously after three years; and an additional 20,000 stock options and 30,000 restricted stock units vesting over three years, but only if he relocates to Philadelphia by the end of this year.

Sunday, March 29, 2015

Could Apple Fall to $300 This Year?

In this video, Motley Fool analyst Andrew Tonner focuses on Apple's current situation. The share price has been on the decline and is already below the $400 mark, marking a 45% drop from last September.

A lot of investors now wonder whether the stock will hit the $300 mark soon. Andrew doesn't think so. Looking at Apple's upcoming earnings report, he sees that even though the company might show a decline in revenue and market share, it's also expecting a 9% increase in revenue growth.

Andrew also says the market is misunderstanding Apple's situation. Other companies in the sector are trading on values based on their growth opportunities, but Apple itself has a lot of future growth prospects, including a possible smart watch and a lower-cost iPhone. Investors are also likely to get an increased dividend payout soon.

Check out the video for further details.

There's no doubt that Apple is at the center of technology's largest revolution ever and that longtime shareholders have been handsomely rewarded, with more than 1,000% gains. However, there is a debate raging as to whether Apple remains a buy. The Motley Fool's senior technology analyst and managing bureau chief, Eric Bleeker, is prepared to fill you in on both reasons to buy and reasons to sell Apple and what opportunities are left for the company (and your portfolio) going forward. To get instant access to his latest thinking on Apple, simply click here now.

Friday, March 27, 2015

Why Did My Stock Just Die?

Just the other day I remarked how often the Dow Jones Industrial Average got saved by late-afternoon rallies that limited the damage done during the day. Yesterday, however, the index flipped the script, and despite ending the day 60 points higher and hitting a new all-time record of 14,673, it was actually a late-afternoon sell-off that kept the Dow from finishing even higher.

While the gains in the index were broad and deep, the few losses recorded on the day were rather shallow, the worst being the 0.6% loss by Proctor & Gamble. Yet consumer products in general were soft as Clorox, Colgate-Palmolive, and Kimberly-Clark all closed down, though each by less than 1%.

Consumer confidence was buffeted in March as those who thought the economy was in good to excellent shape fell to 18% of respondents in the Discover U.S. Spending Monitor survey, while those who rated it fair increased to 34%. Half of those surveyed, however, expect the economy to worsen, and unsurprisingly those who made $75,000 or more a year thought things were better than those making less. The Bloomberg Consumer Comfort Index was also still in negative territory, even if it was above its lows.

It's in the genes
Elsewhere in the market, however, Affymetrix (NASDAQ: AFFX  ) tumbled more than 13% after preannouncing first-quarter earnings that missed even its own expectations. It blamed "headwinds" in its gene expression business everywhere it does business, though it suffered a particular shortfall in Japan. The Fool's Sean Williams thinks that may indicate more than a one-off performance issue because of the global nature of the miss Affymetrix suffered.

Competition has been fierce among gene sequencing firms, but for the right players, business has been good. Life Technologies (NASDAQ: LIFE  ) is being wooed by a number of suitors, including a bevy of private equity firms along with Thermo Fisher who all want access to Life's leading genetic sequencing equipment. Bids north of $11 billion are expected, which is said to be the biggest buyout in the space since Thermo Electron bought Fisher Scientific for almost $13 billion in 2006 to create Thermo Fisher.

That may end up being one hope for Affymetrix investors, that it ends up getting a bid from one of the losers in the process or still others looking to break in. Illumina was approached by Roche last year, but the pharma giant wouldn't raise its $6.8 billion offer and walked away, while Danaher was said to have at least a passing interest in Life Technologies.

Although Affymetrix's shares are up 26% so far in 2013, yesterday's sharp decline puts them 25% below their 52-week high. That may make it vulnerable, and with a global slowdown in its business, perhaps an attractive alternative.

Ricochet rabbit
For retailer J.C. Penney (NYSE: JCP  ) , yesterday's 12% drop in its stock was a result of the manic way in which the company seems to respond to crises these day. This time it was dumping CEO Ron Johnson, who presided over the disastrous change in pricing strategy that drove away its customers in droves, and bringing back former CEO Myron Ullman, an acknowledged turnaround expert, but one who had been unable to get Penney's going the last time he was at the helm.

Indeed, it was the need to shake the venerable retailer out of its torpor that led activist investor Bill Ackman to choose Johnson in the first place to come in and shake things up. That he did, though not in a way anyone expected. While there were many skeptics about Johnson's ability to translate the Apple experience from whence he came to a stodgy retailer, private equity investors aren't exactly long-haul holders of a stock, and they desire a quick fix.

As has been endlessly dissected, Johnson changed Penney's from its traditional door-buster-sale mentality to an everyday-low-price strategy, but customers instead chose to fool themselves into thinking they were getting a deal and shopped instead at rivals Kohl's and Macy's, which still employ that pricing plan. While Johnson did at last throw in the towel this year on his strategy, the board of directors apparently decided it was time a new, new face -- which is really an old face -- was needed.

That lack of stability is worrisome to the markets, as it projects incoherence in strategy. Despite his bona fides in retail, I'm not sure Ullman is the man for the job, because he wasn't able to execute previously either. The markets apparently agree.

Ready for a resurrection?
J.C. Penney's stock cratered under Ron Johnson's leadership, but could new CEO Mike Ullman present the opportunity investors have been waiting for? If you're wondering whether J.C. Penney is a buy today, you're invited to claim a copy of The Motley Fool's must-read report on the company. Learn everything you need to know about JCP's turnaround -- or lack thereof. Simply click here now for instant access.