Best Tiny Stocks For 2020: September 2013

Monday, September 30, 2013

5 Stocks Insiders Love Right Now

DELAFIELD, Wis. (Stockpickr) -- Corporate insiders sell their own companies' stock for a number of reasons.

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They might need the cash for a big personal purchase such as a new house or yacht, or they might need the cash to fund a charity. Sometimes they sell as part of a planned selling program that they have put in place for diversification purposes, which allows them to sell stock in stages instead of selling all at one price.

Other times they sell because they think their stock is overvalued and the risk/reward is no longer attractive. Some even dump their own stock because they have inside knowledge that a competitor is eating their lunch and stealing market share.

But insiders usually buy their own shares for one reason: They think the stock is a bargain and has tremendous upside.

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The key word in that last statement is "think." Just because a corporate insider thinks his or her stock is going to trade higher, that doesn't mean it will play out that way. Insiders can have all the conviction in the world that their stock is a buy, but if the market doesn't agree with them, the stock could end up going nowhere. Also, I say "usually" because sometimes insiders are loaned money by the company to buy their own stock. Those loans are often sweetheart deals and shouldn't be viewed as organic insider buying.

At the end of the day, its large institutional money managers running big mutual funds and hedge funds that drive stock prices, not insiders. That said, many of these savvy stock operators will follow insider buying activity when they agree with the insider that the stock is undervalued and has upside potential. This is why it's so important to always be monitoring insider activity, but it's twice as important to make sure the trend of the stock coincides with the insider buying.

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Recently, a number of companies' corporate insiders have bought large amounts of stock. These insiders are finding some value in the market, which warrants a closer look at these stocks. Here's a look at five stocks whose insiders have been doing some big buying per SEC filings.

Clean Energy Fuels

One energy player that insiders are snapping up a big amount of stock in here is Clean Energy Fuels (CLNE), which is engaged in the business of selling natural gas fueling solutions to its customers mainly in the U.S. and Canada. Insiders are buying this stock into modest strength, since shares are up 6.1% so far in 2013.

Clean Energy Fuels has a market cap of $1.18 billion and an enterprise value of $1.35 billion. This stock trades at a reasonable valuation, with a price-to-sales of 3.15 and a price-to-book of 2.11. Its estimated growth rate for this year is 46.7%, and for next year it's pegged at -27.5%. This is not a cash-rich company, since the total cash position on its balance sheet is $148.26 million and its total debt is $368.13 million.

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The CEO just bought 127,000 shares, or about $1.61 million worth of stock, at $12.69 per share.

From a technical perspective, CLNE is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has just started to trend back above both of those key moving averages with decent upside volume flows. That move is quickly pushing shares of CLNE within range of triggering a near-term breakout trade.

If you're bullish on CLNE, then I would look for long-biased trades as long as this stock is trending above its 50-day at $12.79 or above more support at $12.20, and then once it breaks out above some near-term overhead resistance at $13.58 a share with high volume. Look for a sustained move or close above that level with volume that hits near or above its three-month average action of 942,047 shares. If that breakout hits soon, then CLNE will set up to re-test or possibly take out its next major overhead resistance levels at $14.48 to its 52-week high at $14.82 a share. Any high-volume move above those levels will then give CLNE a chance to tag $17 to $18.

Home Depot

Another home improvement retailer that insiders are active in here is Home Depot (HD), which sells an assortment of building materials, home improvement and lawn and garden products and provides a number of services. Insiders are buying this stock into decent strength, since shares are up 22% so far in 2013.

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Home Depot has a market cap of $108 billion and an enterprise value of $116 billion. This stock trades at a reasonable valuation, with a trailing price-to-earnings of 22.52 and a forward price-to-earnings of 17.41. Its estimated growth rate for this year is 19%, and for next year it's pegged at 18.4%. This is not a cash-rich company, since the total cash position on its balance sheet is $3.42 billion and its total debt is $12.76 billion. This stock currently sports a dividend yield of 2.1%.

A director just bought 100,000 shares, or $752,000 worth of stock, at $75.20 per share.

From a technical perspective, HD is currently trending above its 200-day moving average and just below its 50-day moving average, which is neutral trendwise. This stock recently formed a double bottom chart pattern after it found support just above its June low of $72.03 a share after the stock hit $72.21 a share this move. Shares of HD have started to rebound higher off that $72.21 low and it's now moving within range of triggering a near-term breakout trade.

If you're in the bull camp on HD, then look for long-biased trades as long as this stock is trending above some near-term support levels at $74 or at $73, and then once it breaks out above its 50-day at $76.85 a share with high volume. Look for a sustained move or close above that level with volume that registers near or above its three-month average action of 7.25 million shares. If that breakout triggers soon, then HD will set up to re-test or possibly take out its next major overhead resistance levels at $80 to its 52-week high at $81.56 a share.

Illinois Tool Works

One industrial conglomerate that insiders are jumping into here is Illinois Tool Works (ITW), which is a manufacturer of a range of industrial products & equipment. Insiders are buying this stock into solid strength, since shares are up 23% so far in 2013.

Illinois Tool Works has a market cap of $33 billion and an enterprise value of $35 billion. This stock trades at a reasonable valuation, with a trailing price-to-earnings of 14.9 and a forward price-to-earnings of 16.2. Its estimated growth rate for this year is 3.7%, and for next year it's pegged at 10%. This is not a cash-rich company, since the total cash position on its balance sheet is $2.77 billion and its total debt is a $5.07 billion. This stock currently sports a dividend yield of 2.3%.

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The CFO just bought 7,000 shares, or about $519,000 worth of stock, at $74.25 per share.

From a technical perspective, ITW is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending strong for the last six months, with shares soaring higher from its low of $59.68 to its intraday high of $75.63 a share. During that move, shares of ITW have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of ITW within range of triggering a major breakout trade.

If you're bullish on ITW, then look for long-biased trades as long as this stock is trending above its 50-day at $72.86 or above more support at $71.07, and then once it breaks out above its new 52-week high at $75.63 a share with high volume. Look for a sustained move or close above that level with volume that hits near or above its three-month average volume of 1.72 million shares. If that breakout triggers soon, then ITW will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $80 to $85 a share.

Digital Realty Trust

One real estate investment trust player that insiders are in love with here is Digital Realty Trust (DLR), which is engaged in the business of owning, acquiring, developing, redeveloping and managing technology-related real estate. Insiders are buying this stock into weakness, since shares are off by 19% so far in 2013.

Digital Realty Trust has a market cap of $7 billion and an enterprise value of $12 billion. This stock trades at a reasonable valuation, with trailing price-to-earnings of 38.19 and a forward price-to-earnings of 10.43. Its estimated growth rate for this year is 8.4%, and for next year it's pegged at 9.2%. This is not a cash-rich company, since the total cash position on its balance sheet is $24.26 million and its total debt is $4.7 billion. This stock currently sports a dividend yield of 5.7%.

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The CFO just bought 10,000 shares, or about $529,000 worth of stock, at $52.94 per share.

From a technical perspective, DLR is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock recently formed a double bottom chart pattern at $50.23 to $50.26 a share. Following that bottom, shares of DLR have started to spike notably higher and it's quickly moving within range of triggering a big breakout trade.

If you're bullish on DLR, then look for long-biased trades as long as this stock is trending some key near-term support at $52 or at $50.23, and then once it breaks out above some near-term support levels at $55.44 to $55.65 a share to its 50-day at $55.94 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 1.65 million shares. If that breakout hits soon, then DLR will set up to re-test or possibly take out its next major overhead resistance levels at its 200-day at $62.15 a share to more resistance at $64.47 a share.

Energy Transfer Partners

One final name with some big insider buying is Energy Transfer Partners (ETP), which is a publicly traded partnership owning and operating a portfolio of energy assets. Insiders are buying this stock into notable strength, since shares are up 16% so far in 2013.

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Energy Transfer Partners has a market cap of $18 billion and an enterprise value of $35 billion. This stock trades at a premium valuation, with a trailing price-to-earnings of 32.30 and a forward price-to-earnings of 20.44. Its estimated growth rate for this year is -45.4%, and for next year it's pegged at 1.7%. This is not a cash-rich company, since the total cash position on its balance sheet is $532 million and its total debt is a whopping $17.41 billion. This stock currently sports a dividend yield of 7%.

A director bought 20,000 shares, or about $1.03 million worth of stock, at $51.82 per share.

From a technical perspective, ETP is currently trending above its 200-day moving average and just below its 50-day moving average, which is neutral trendwise. This stock has been downtrending over the last month and change, with shares falling from its high of $54.85 a share to its recent low of $50 a share. During that move, shares of ETP have been making mostly lower highs and lower lows, which is bearish technical price action.

If you're bullish on ETP, then look for long-biased trades as long as this stock is trending above some key near-term support levels at $50 or at $49.40, and then once it breaks out back above its 50-day at $51.36 a share with high volume. Look for a sustained move or close above that level with volume that hits near or above its three-month average action of 1.77 million shares. If that breakout hits soon, then ETP will set up to re-test or possibly take out its next major overhead resistance levels at $53 to its 52-week high at $54.85 a share.

To see more stocks with notable insider buying, check out the Stocks With Big Insider Buying portfolio on Stockpickr.

-- Written by Roberto Pedone in Delafield, Wis.

Friday, September 27, 2013

Manitowoc: Profit From Recovering World Economies

The Manitowoc Company is a multi-industry, capital goods manufacturer that operates in two markets: Cranes & Related Products (Crane) and Foodservice Equipment (Foodservice). See the company profile from Reuters for a more detailed summary of Manitowoc's business segments, brands, products and services.

As detailed in this Instablog, one of my strongest opinions about investing is that when to buy is just as important as what to buy. As a long-term investor, waiting to buy a stock I like when a temporary company-specific dip occurs at the same time as broad market or sector weakness has consistently proven profitable.

As noted in my prior Seeking Alpha comments, for months I've expected the best buying opportunities of the year to come around this time. So, rather than worry about a likely minor market pullback within about 6 weeks; I'll welcome a chance to buy good stocks at discounts, thereby increasing upside potential and reducing downside potential.

That turned out to be the right approach when I first bought Manitowoc (MTW) in mid-2012, and it appears a similar opportunity is developing, albeit less extreme. The stock has traded sideways with the rest of the market lately and it broke below its 50-day moving average recently. However, the mid-term and long-term story remains intact so Manitowoc still has room to run as a great play on the energy, infrastructure and other construction needs of recovering world economies.

Opportunity Highlights:

The market is overreacting to recent company-specific news.Coinciding market weakness is likely to present a buying opportunity.Forward P/E = 11.87Next 5-year annual EPS growth estimate >41%.Manitowoc 24% gross margin [ttm] is the highest in the Heavy Machinery & Vehicles industry and is growing.In Q2, Manitowoc Crane revenue grew 7.6% year over year, while competitor Terex (TEX) crane revenue grew only 3.2% and Caterpillar (CAT) construction business revenue declined 9%.Morgan Stanley notes: "We believe that Manitowoc! can add 12% and 31% upside to EPS in the event of a modest and robust non-residential construction recovery, respectively."Stifel Nicolaus rates Manitowoc a "buy" with a $25 price target.

Why is there an opportunity in Manitowoc shares?

I believe there's an opportunity brewing in Manitowoc shares due to simultaneous timing of three factors: [1] the market is overreacting to recent company-specific news, [2] due to various political concerns, the entire market is currently more likely than at any other time this year to experience weakness, and [3] Manitowoc is a volatile stock so a weak market tends to affect it more, but the dips are usually brief and such volatility presents profitable opportunities.

For an example of one way the volatility that scares some investors away can be beneficial, see section 4 of this Instablog. Regarding the tepid market, based on the majority of economic indicators, I believe we'll only get a brief and healthy pause in what remains a strong overall uptrend. As such, the coming 6 weeks or so are a time to keep a buy list ready and, in my view, Manitowoc belongs on that list.

Regarding the company-specific news that's contributing to a pause in Manitowoc shares, I don't believe it's anything to get overly concerned about. On September 16, Manitowoc announced that China's Shantui Construction Machinery terminated an agreement announced earlier this year to pursue a joint venture in China's truck crane industry. Shantui cited continual delays in obtaining the necessary approvals from the Chinese government. Manitowoc CEO Glen Tellock pointed out that, while the dissolution of the Shantui JV was indeed a setback, it did not represent Manitowoc's only option in China:

"In the meantime, we will evaluate our options with our current partner, Tai'an Taishan Heavy Industry Investment Company, with respect to the future of the Manitowoc Dong Yue business," Mr. Tellock stated.

The proposed Shantui JV would not have begun operations for at least anothe! r quarter! and, even once it kicked off, it likely would've taken at least another quarter or two to impact earnings. While the Shaunti JV would've eventually helped Manitowoc expand its footprint in China, the company's growth prospects still extend far beyond China. Manitowoc has strong positions in markets far more reliable than China such as the U.S., Europe, India and South America. And, it seems very likely that Manitowoc will just find another partner in China, as Mr. Tellock implied.

What are the business prospects for the company?

As noted above, analysts expect Manitowoc to benefit significantly from the ramp up in U.S. non-residential construction. That's a reasonable expectation since the American Energy & Infrastructure Jobs Act allocates over $250 billion to fund infrastructure projects such as roads, bridges and highways; and Manitowoc has a very strong and growing presence in all of those all areas:

Manitowoc Crane Aids In Hurricane Sandy Rebuilding Efforts

Bridging The Gap

Manitowoc is also a leader in the rough-terrain cranes that are needed in emerging markets such as South America and India, which often have to start from scratch on particularly raw land; as well as in developed markets like Europe that are much older than the U.S. and have even more degraded infrastructure. It is certainly a big positive for Manitowoc that Brazil is finally getting serious about spending on its notoriously poor infrastructure, undoubtedly to avoid embarrassment as the World Cup is hosted by Brazil next year for the first time in 50 years. The following industry-specific articles offer great insight into the breadth of Manitowoc's Crane business throughout the world:

Manitowoc All-Terrain Crane Receives European Innovation Award

Eastern Europe: Metro Deep, Mountain High

Manitowoc Grove Cranes Helping Build Brazil's World Cup Stadium

Manitowoc Celebrates Brazilian Anniversary With Expansion Plans

I haven't even discussed Manitowoc's role in the ene! rgy marke! t that's booming in the U.S. and elsewhere around the world, but we've all heard plenty about that and I'm tying to keep this article from getting too long.

What is the upside opportunity, downside risk and timeframe?

Within the next 6 weeks, I believe Manitowoc is likely to dip to my ~$18 buy price, which is slightly below its 200-day moving average. Investors should be aware that Manitowoc presents at a conference in the middle of next week since there may be comments there that could either prevent or perpetuate a dip to my buy price. Once the dip I expect occurs, I believe the shares will quickly rebound and continue rising to the ~$22 range within the following 3-6 months, which represents >22% upside from my recommended ~$18 buy price. I also believe the shares will continue on an overall uptrend thereafter and make a new 52-week high in the ~$24 range within the same 3-9 months. The ~$24 target represents >33% upside from my ~$18 buy price.

I arrived at my ~$24 target price for 3-9 months and my ~$22 target price for 3-6 months by using very conservative DCF calculations. Even though the 5-year earnings growth rate estimate is >41% (see graph below), I cut that almost in half in order to purposely make my calculations overly conservative. The result is a very conservative fair value of $24 (>33% above my ~$18 buy price). I simply took the midpoint between the $24 valuation and the current ~$20 range to arrive at a short-term 3-6 month target of ~$22.

On three separate occasions this year, the stock has shown strong support at ~$17, which represents minimal downside of ~6% from my ~$18 buy price. That doesn't mean potential downside risk has an absolute cap at that level if the market really gets hammered, but it is reassuring that the stock has repeatedly fought off that level. Manitowoc has strong institutional investor ownership of 72% so perhaps that's the level at which large holders with conviction step in to support the stock. The most risk averse investo! rs could ! obviously wait to see if the shares touch the ~$17 range again, but that potentially means missing a chance to buy altogether. I see that as unnecessary since the downside range appears narrow enough to simply continue staging in and lower the average price, if the shares do dip lower than ~$18. In other words, dips are typically short-lived with this stock, which is advantageous to investors staging into a long-term position (see section 2 of this Instablog).

Other metrics support the same value conclusions and that's not to mention what the fair value will be when the energy, infrastructure and construction rebound, both in the U.S and worldwide, continues to grow more robust, as suggested by the evidence provided under the 'business prospects' heading above. As such, I believe the real value in Manitowoc is in the long-term story. I actually wouldn't be surprised to see the shares double from current levels within a couple more years.

(click to enlarge)Source: FinViz

(click to enlarge)Source: Google Finance

What might drive realization of the opportunity?

Even at ~$19, Manitowoc is already undervalued considering the 5-year annual EPS growth estimate of over 40% and the highest margins in the industry at over 24%, among other measures. The market appears to be erroneously backing out potential earnings from a joint venture that had not even been consummated and could not have impacted earnings any time soon. I expect the shares to start moving toward more reasonable valuations as investors realize that the Shaunti JV did not affect earnings or the company's long-term prospects. The first possible prompt for that realization may be insight offered during the company's presentation at a Deutsche Bank conference next week, on ! October 2! . As the market rebounds from a brief period of weakness as political concerns subside, I expect a continuation of the overall uptrend Manitowoc shares have been on for the past couple of years to be driven by an increasingly stronger worldwide economic recovery cycle.

The business structure as another source of value.

While some may argue that Foodservice and Crane businesses under the same roof is somehow a negative, I would argue that there are actually multiple benefits to the admittedly strange pairing.

I think the unusual pairing actually offers a 'best of both worlds' type sales balance. The Crane unit provides healthy growth that's particularly attractive when world economies are cycling out of recessions and into growth stages, as they are now; while the Foodservice unit provides a practical element of stability throughout all economic cycles.

The Manitowoc website includes a brief history that touches on how the company grew in disparate directions, and also offers a subtle reminder that the company has historically been open to strategic deals. I see the fact that Manitowoc sold its Marine Group business in 2008 as a strong indicator that this is not a company that's blindly determined to stay a particular course if there ever comes a time when a better opportunity arises. Many companies are too sentimental and patently opposed to parting with businesses that helped form their history, but Manitowoc has proven wiser. This minor aspect of my overall thesis is purely speculation on a potential long-term value add, but business segment sales or spinoffs unlock value for shareholders and it's hard to argue that Manitowoc doesn't have that sort of ace card in its pocket.

Thanks for reading ... especially if you've made it this far. Feedback is appreciated as I refresh and refine my dated public writing skills.

Source: Manitowoc: Profit From Recovering World Economies

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

Additional disclosure: I may purchase additional shares in MTW over the next 72 hours.

Wednesday, September 25, 2013

Hot Undervalued Companies To Watch For 2014

Key Points:
Global dividend payers are undervalued relative to U.S. counterparts
Valuations indicate the dividend trade has room to run��lobally
In rising rate environments:
U.S. dividends historically underperform
U.S. shareholder yield historically outperforms
Global dividends historically outperform
A focus on valuation and yield currently favors investments in Europe, Emerging Markets, global Telecom, and EnergyThe S&P 500 Index has risen over 150 percent since March 9, 2009 in what could arguably be deemed the most hated equity rally of all time. The MSCI All Country World Index, one of the broadest global indices, has risen ��ust��110 percent since its March 2009 nadir. Evidence indicates that United States (U.S.) investors have not participated in this rally�� truly sad state of affairs.1 It is worthy of noting that over the last several years a number of well known market pundits have viscerally rejected the equity rally due to macroeconomic concerns. The reality, however, is that stock returns are more highly correlated with the price you pay than macroeconomic events. The one place U.S. investors seem to have nibbled as they tip-toe back into the equity market is in U.S. dividend paying equities.

Hot Undervalued Companies To Watch For 2014: Tupperware Corporation(TUP)

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

Advisors' Opinion:

[By John Udovich]
Everyone is familiar with�the Tupperware brand from�consumer products stock Tupperware Brands Corporation (NYSE: TUP) and you are probably familiar with the brands�of mid cap stock Jarden Corp (NYSE: JAH) along with small cap stocks Libbey Inc (NYSEMKT: LBY) and Lifetime Brands Inc (NASDAQ: LCUT); but what about the stocks themselves? Chances are, their brands or products are right under your nose at home and you probably don�� know anything about the mid cap or small cap stock behind them.

Hot Undervalued Companies To Watch For 2014: Schlumberger N.V.(SLB)

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

Advisors' Opinion:

[By Lee Jackson]
Energy: Schlumberger Ltd. (NYSE: SLB)�crushed earnings by an astonishing 50.9% last quarter. With Mexico changing its policy on oil exploration, the oil field services leader may see continued strong earnings growth in the years ahead. The consensus price target for the stock is posted at $96. Investors are paid a 1.5% dividend.
[By Lee Jackson]
Schlumberger Ltd. (NYSE: SLB) revenue grew 8% year-over-year to $11.18 billion in the second quarter of 2013, fueled by high growth in its international segment. While the company does generate 11% of revenue in the Middle East and Asia, only a prolonged Syrian conflict is expected to dent their strong results. UBS has a $98 price target and the consensus figure is at $96. Stockholders are paid a 1.5% dividend.
[By Tony Daltorio]
The biggest oilfield service companies should get a big lift from the boom, Moors said. That includes Schlumberger Ltd. (NYSE: SLB), Halliburton Co. (NYSE: HAL), Weatherford International Ltd. (NYSE: WFT), and Baker Hughes Inc. (NYSE: BHI).
[By Jonas Elmerraji]
2013 has been a stellar year for shares of oil service giant Schlumberger (SLB). Since the calendar flipped over to January, SLB has rallied more than 25%, beating the broad market's impressive pace by double digits. As oil prices linger on the high end of their historic range, SLB is well positioned to keep ticking higher.

Schlumberger provides must-have services to national and supermajor oil firms as well as smaller E&Ps, offering up niche services like seismic surveys and well drilling and positioning. In a nutshell, SLB's job is to pull oil out of the ground as efficiently as possible. Oil firms turn to Schlumberger because the tasks they need to accomplish are too nuanced or proprietary to pull off in-house. So as long as the company continues to pour cash into R&D for drilling technology and software, the firm should continue to score lucrative contracts.

Some of Schlumberger's most attractive opportunities right now come from overseas. The firm is one of the largest oil servicers in Russia, a key growth market in the years ahead. It's also got an important presence in smaller oil markets, where it's a big fish in a small pond. A big scale and stellar reputation should guarantee Schlumberger an attractive piece of the oil pie for years to come.

Hot Gold Companies To Own In Right Now: Dollar Tree Inc.(DLTR)

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

Advisors' Opinion:

[By Lawrence Meyers]
As a convenience store, it doesn’t have direct competition from�Dollar Tree (DLTR) or Family Dollar (FDO) because these dollar stores aren�� exclusively focused on food (and they have no gasoline or cigarette sales), and they��e targeted at the folks who are trying to save money over convenience, not vice versa. The convenience angle is another reason why�Walmart (WMT) and Costco (COST)�aren’t competitors, since those behemoths are about a total shopping experience.
[By ANUP SINGH]
Dollar Tree (NASDAQ: DLTR ) is among the most successful single-price-point retailers in the U.S. It operates more than 4,842 stores across 48 states in the U.S. and five Provinces in Canada. The chart below shows that the company has been performing consistently well over the past five years.

Hot Undervalued Companies To Watch For 2014: Caterpillar Inc.(CAT)

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

Advisors' Opinion:

[By Chris Hill]
Molex (NASDAQ: MOLX ) is up big after Koch Industries agreed to buy the company for $7.2 billion in cash. Yum! Brands' (NYSE: YUM ) same-store sales in China fall 10% in August. Caterpillar (NYSE: CAT ) shares are up on news that China's exports grew more than 7% in August. And Middleby (NASDAQ: MIDD ) closes in on a new all-time high. In this segment, the guys discuss four stocks making big moves.
[By Vanina Egea]
After hitting a historical high in 2011, prices for mining products entered a downtrend that continues throughout 2013, further pressuring margins and reducing demand for new equipment. Hence, prospects for Caterpillar (CAT), Komatsu (OTC: KMTUY) and Joy Global (JOY) have suffered. But, have managements taken the cue? And, how have hedge funds reacted?
[By E. Michael Greenberg]
Blue Sphere has other major partners on these projects as well.� They have brought in a hedge fund that specializes in Cleantech investing as an equity partner.� This equity partner has committed to up to $7.5 million for the Charlotte project and $5 million for the smaller Johnson plant.� Caterpillar Financial Services, a division of Caterpillar Inc. (NYSE: CAT) is providing almost $18 million in debt for the construction of the Charlotte project.� Both groups are expected to fund upon their respective commitments to the Charlotte project by the end of August, which will allow Blue Sphere and Biogas Nord to begin construction of the facility in September of this year.� Blue Sphere�� management has stated that they expect the Charlotte project to be complete and producing with in 12 months of the beginning of construction.�

Tuesday, September 24, 2013

European Stocks Rise as Telecommunication Companies Climb

European stocks advanced, following a two-day decline, as telecommunications companies climbed, outweighing U.S. consumer confidence and regional manufacturing reports that trailed economists' estimates.

Telecom Italia (TIT) SpA gained 1.7 percent as Telefonica SA agreed to increase its stake in the phone operator. Nokia Oyj added 2.4 percent after a U.S. judge found that HTC Corp. violated two of its patents. Total (FP) SA climbed 2.6 percent after Barclays Plc raised its rating on the oil producer. Burckhardt Compression Holding AG slid 7.3 percent after saying fiscal first-half net income will decline from the year-earlier period.

The Stoxx Europe 600 Index added 0.2 percent to 313.2 at the close in London. The equity benchmark has climbed 5.3 percent in September, extending its rally this year to 12 percent, as the Fed refrained from reducing its monthly bond buying. The gauge has risen 9.9 percent in the current quarter, on course for its biggest gain in four years. It is trading at 14.3 times projected earnings, compared with a high of 15.7 times in October 2009.

"In the medium to long term, European equities still look attractive," Herbert Perus, who helps oversee about $36 billion as head of equities at Raiffeisen Capital Management in Vienna, said by phone. "Valuations are still cheap and more investors will buy European stocks. In the very short term, the rally we saw over the last few weeks may come off a bit. If we get a clear statement from the Fed, that would help markets."

Consumer Confidence

In the U.S., the Conference Board's consumer-confidence index slipped to 79.7 this month from a revised 81.8 in August. The median forecast of economists surveyed by Bloomberg had called for a reading of 79.9.

A measure of manufacturing in the region covered by the Fed Bank of Richmond shrank in September. The factory index, which covers North Carolina, South Carolina, the District of Columbia, Maryland, Virginia and most of West Virginia, dropped to 0 from 14 last month. Economists in a Bloomberg survey had predicted the gauge would decline to 12.

In Germany, the Ifo institute's business-climate index, based on a survey of 7,000 executives, advanced to 107.7 from a revised 107.6 in August. That missed the median economist forecast in a Bloomberg News survey of 108.

National benchmark indexes advanced in 14 out of 18 western-European markets. The U.K.'s FTSE 100 increased 0.2 percent and Germany's DAX added 0.3 percent, while France's CAC 40 climbed 0.6 percent.

Telecom Italia

Telecom Italia climbed 1.7 percent to 60 euro cents. Telefonica agreed to pay 324 million euros ($437 million) to increase its stake in Telco SpA, a holding company that owns 22.4 percent of Telecom Italia, to 66 percent from 46 percent.

Nokia, the Finnish phonemaker that has agreed to sell its handsets business to Microsoft Corp. (MSFT), climbed 2.4 percent to 4.91 euros. HTC infringed on two patent rights held by Nokia, U.S. International Trade Commission Judge Thomas Pender said in a notice yesterday. A six-member commission will review the judge's findings before deciding whether to block any imports.

Total added 2.6 percent to 43.20 euros after Barclays raised its recommendation on the stock to equal weight, which is similar to hold, from underweight. The brokerage said Europe's third-biggest oil company can better control its capital expenditure than it had predicted. Total gave detailed capital-spending plans for exploration and production at its investor day, according to Barclays.

Close Brothers Group Plc gained 4.9 percent to 1,189 pence as the British financial services company said full-year net income rose 20 percent to 119.4 million pounds ($191 million). Its asset-management unit swung to a profit of 4 million pounds from a 4.3 million-pound loss a year earlier.

Burckhardt Slides

Burckhardt tumbled 7.3 percent to 358.25 Swiss francs, its biggest decline in two years, after saying that lower-than-expected gross margins on two major compressor-system projects will lead the company to make provisions in the six months through September.

Deutsche Wohnen AG slipped 2.2 percent to 13.25 euros as a statement showed Blackstone Group LP is selling 8.15 million shares, or a 4.8 percent stake, in the German residential landlord. The price guidance has narrowed to 13.05 euros to 13.10 euros a share, people familiar with the matter said.

Suedzucker AG dropped 3.3 percent to 21.10 euros. The maker of sugar and starch said it might miss its May forecast of 825 million euros for full-year operating profit following its CropEnergies unit's purchase of bioethanol producer Ensus Ltd. in July.

"It is more challenging to achieve this target due to the current cautious business development and effects from the integration of Ensus at CropEnergies," it said in a statement.

The volume of shares changing hands in companies listed on the Stoxx 600 was 6 percent greater than the average of the past 30 days, according to data compiled by Bloomberg.

Monday, September 23, 2013

Top Value Companies To Buy Right Now

��f good investors buy businesses, rather than stocks (the Warren Buffett adage), discounted cash flow valuation is the right way to think about what you are getting when you buy an asset.��

-Aswath Damodaran

Introduction

Valuing a stock is arguably one of the investment manager�� most difficult tasks. A variety of tools and methodologies exist to value equities, and the assumptions used in those are estimates of future unknowns. According to Aswath Damodaran, a valuation expert and finance professor at New York University, multiples are the most common method used by investors to value stocks.2 Examples of multiples include the ubiquitous price-to-earnings (P/E) ratio as well as the price-to-sales ratio, price-to-book value ratio and the enterprise value-to-EBITDA ratio. Identifying a multiple to value an individual stock typically involves comparing a company�� fundamentals to a peer group and then adjusting the peer group average multiple to reflect differences between the individual company and its peers.

Top Value Companies To Buy Right Now: Caterpillar Inc.(CAT)

Advisors' Opinion:

[By Shauna O'Brien]
Bank of America/Merrill Lynch reported on Tuesday that it has cut its estimates on Caterpillar Inc. (CAT).

The firm, which currently has a “Neutral” rating on CAT, has lowered estimates on the company through 2015. Analysts currently have a $88 price target on CAT, suggesting a 1% increase from the stock’s current price of $86.88.

Caterpillar shares were mostly flat during Tuesday morning trading. The stock has been mostly flat YTD.
[By Rebecca McClay]
Building roads and bridges takes a lot of heavy equipment, and that's exactly what Caterpillar (CAT) makes. Whether a project needs backhoes, excavators, pavers or the articulated trucks to get asphalt and other building materials from one location to another, the Peoria, Ill., manufacturer is the industry leader both in the U.S. and abroad.

Top Value Companies To Buy Right Now: Schlumberger N.V.(SLB)

Advisors' Opinion:

[By Jonas Elmerraji]
2013 has been a stellar year for shares of oil service giant Schlumberger (SLB). Since the calendar flipped over to January, SLB has rallied more than 25%, beating the broad market's impressive pace by double digits. As oil prices linger on the high end of their historic range, SLB is well positioned to keep ticking higher.

Schlumberger provides must-have services to national and supermajor oil firms as well as smaller E&Ps, offering up niche services like seismic surveys and well drilling and positioning. In a nutshell, SLB's job is to pull oil out of the ground as efficiently as possible. Oil firms turn to Schlumberger because the tasks they need to accomplish are too nuanced or proprietary to pull off in-house. So as long as the company continues to pour cash into R&D for drilling technology and software, the firm should continue to score lucrative contracts.

Some of Schlumberger's most attractive opportunities right now come from overseas. The firm is one of the largest oil servicers in Russia, a key growth market in the years ahead. It's also got an important presence in smaller oil markets, where it's a big fish in a small pond. A big scale and stellar reputation should guarantee Schlumberger an attractive piece of the oil pie for years to come.
[By Tony Daltorio]
The biggest oilfield service companies should get a big lift from the boom, Moors said. That includes Schlumberger Ltd. (NYSE: SLB), Halliburton Co. (NYSE: HAL), Weatherford International Ltd. (NYSE: WFT), and Baker Hughes Inc. (NYSE: BHI).

5 Best Small Cap Stocks To Buy For 2014: Tupperware Corporation(TUP)

Top Value Companies To Buy Right Now: Dollar Tree Inc.(DLTR)

Advisors' Opinion:

[By Lawrence Meyers]
The finance sector, as mentioned, can make money in many ways. The second-highest growth sector is expected to be consumer discretionary, with a 6.2% increase. When you look at earnings from luxury brands like Tiffany & Co. (TIF), and that the hotel sector continues to do very well, it suggests that those people who are in good financial shape are spending their money. Meanwhile, dollar players like Dollar Tree (DLTR) continue to perform very well, suggesting that folks with less money are spending it on cheaper items.
[By Lawrence Meyers]
As a convenience store, it doesn’t have direct competition from�Dollar Tree (DLTR) or Family Dollar (FDO) because these dollar stores aren�� exclusively focused on food (and they have no gasoline or cigarette sales), and they��e targeted at the folks who are trying to save money over convenience, not vice versa. The convenience angle is another reason why�Walmart (WMT) and Costco (COST)�aren’t competitors, since those behemoths are about a total shopping experience.

Sunday, September 22, 2013

Casey’s: Back on Base, But Will It Score?

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It's been a mighty weird year for Casey's General Stores (CASY). The company has had some tough quarters, but just when things are looking bleak, the team got some runners on base and drove a few home.

Casey's has a concept I really like, in that it has 1,700 stores across 14 states, selling all manner of convenience-store products. The company is a rural operation at its core, with some 60% of stores in areas with fewer than 5,000 residents. The result is that it doesn't have a lot of competition as it might if it were ensconced in urban areas, so it becomes part of a quasi-oligopoly.

As a convenience store, it doesn’t have direct competition from Dollar Tree (DLTR) or Family Dollar (FDO) because these dollar stores aren't exclusively focused on food (and they have no gasoline or cigarette sales), and they're targeted at the folks who are trying to save money over convenience, not vice versa. The convenience angle is another reason why Walmart (WMT) and Costco (COST) aren’t competitors, since those behemoths are about a total shopping experience.

The company had a lot of work to do after disappointing investors in Q4. Revenues missed expectations, EPS came in 7% lower year-over-year, and operating margins fell, as did net margins. But its fiscal first quarter, the company slugged some solid hits into the outfield. Revenue exploded 13%, leading to a 43% increase in EPS.

But what was driving those increases?

The company began a partnership with Hy-Vee Stores, in which customers who purchase certain items at the stores can get a fuel discount credit at Casey's. The company stated it has an annual goal of increasing same-store gas sales 1.5%. This partnership contributed to a 3.2% comp increase, and average margin of 22 cents per gallon — well above the company's target of 15 cents.

Grocery and other merchandise experienced strong growth, with comps up 6.1% vs. a 5% target, and average margin of 32.3% vs. a 32.7% target. Cigarette price reductions held back an even greater increase.

We all like prepared food and drink when hunger hits on the road. Comps lifted an astonishing 11.9% vs. a 9% target, and margins hit 62% vs. the 61.8% target. Category sales were up 16.5% total.

All these increases did come at the expense of increased operating costs (14%), as the company marketed its new initiatives and expanded to 24 hours in some locations.

Casey's doesn't seem to think the overall economic environment is going to impact their performance, as the company intends to build or acquire 75 to 100 stores this year. It's a strong vote of confidence that its particular niche is still a viable option for many Americans. This is also a good sign overall for the economy, in that folks in these communities still value convenience over price enough to push sales as much as they did.

There are tricks to this business. The company relies on commodities like cheese, the cost per pound of which increased 11% over the year, in order to make pizzas. Cigarette prices can fluctuate, as can gasoline prices.

The company sits on $190 million in cash and manageable debt of $819 million. I don’t like the $150 million increase in debt, but the company generated $138 million in operating cash flow this quarter, and only blew through $74 million in capex. Still, that capex will increase as it opens stores. So it'll be a race between maintaining cash flow to service debt. As long as numbers hit company targets, it should be fine.

Alas, Casey's stock remains much too expensive to purchase. Analysts see five-year growth at 10.4% annually, and on FY14 estimates of $3.67 with a 1.2% yield, that gives us a fair value of around $43. However, the stock currently trades at $71.

I'm not paying that much, even for a seat in the outfield bleachers.

As of this writing, Lawrence Meyers did not hold a position in any of the aforementioned securities. He is president of PDL Broker, Inc., which brokers financing, strategic investments and distressed asset purchases between private equity firms and businesses. He also has written two books and blogs about public policy, journalistic integrity, popular culture, and world affairs. Contact him at pdlcapital66@gmail.com and follow his tweets @ichabodscranium.

Thursday, September 19, 2013

Brean Capital Upgrades WGL Holdings to “Buy” (WGL)

Brean Capital reported on Friday that it has upgraded natural gas utility company WGL Holdings Inc (WGL).

The firm has raised its rating on WGL from “Hold” to “Buy,” and has given the company a $46 price target. This price target suggests a 12% increase from the stock’s current price of $40.62. The upgrade was primarily based on valuation and future investment opportunities.

“Like many utilities in the gas LDC space, the shares of WGL Holdings have come off recent highs and are now trading at a level we consider attractive,” analyst Michael Gaugler comments. “Beyond valuation, we consider the recent announcement of conditional approval of Dominion’s Cove Point facility for LNG export as a positive development in terms of future investment opportunities, given the company’s one-third interest in the Commonwealth Pipeline project, which we believe will be revisited due to future increased demand.”

WGL Holdings shares were mostly flat during pre-market trading Friday. The stock has been mostly flat YTD.

Monday, September 16, 2013

Hot Companies To Own For 2014

The housing market has been steadily improving, lifting the stocks of homebuilders like Beazer Homes (NYSE: BZH ) , Hovnanian (NYSE: HOV ) , and PulteGroup (NYSE: PHM ) to heights not seen since the mortgage crisis. Indeed, a recent Federal Reserve survey noted�that housing helped buoy the economy during the first two months of this year, along with auto sales.

But housing isn't out of the woods yet. While the most recent Census Bureau data shows that housing starts were up considerably, building permits were down from February, putting the brakes on many homebuilders' upward stock price trajectory.

Why is housing still so lethargic? A new study by the Federal Reserve Bank of New York has found one disquieting reason: A new generation, saddled with student loan debt, is increasingly unable to take the plunge into home ownership.

Hot Companies To Own For 2014: Shell Villages & Resorts Ltd (SVC.AX)

SVC Group Limited engages in the development of retirement villages in Australia. It also focuses on developing residential subdivisions, and senior living and affordable housing projects. The company was formerly known as Shell Villages and Resorts Limited and changed its name to SVC Group Limited in August 2011. SVC Group Limited is based in Sydney, Australia.

Hot Companies To Own For 2014: Goldcorp Incorporated(GG)

Goldcorp Inc. engages in the acquisition, exploration, development, and operation of precious metal properties in Canada, the United States, Mexico, and Central and South America. It produces and sells gold, silver, copper, lead, and zinc. The company was founded in 1954 and is headquartered in Vancouver, Canada.

Advisors' Opinion:

[By Christopher Barker]
Every ship needs an anchor, and for gold investors looking to navigate the admittedly rough seas of the gold mining industry, I can think of no greater anchor than Goldcorp. With the important caveat that some of the company's substantial challenges faced during 2012 could present further selling pressure in early 2013 as forward production guidance takes a bit of a haircut, I agree with Credit Suisse analyst Anita Soni that any such weakness may present a meaningful buying opportunity. I won't go into great detail here, since investors can access my premium research report on Goldcorp for further discussion of the substantial long-term investment opportunity in the shares of this quality producer.
[By Smith]
Although its name does little to denote this, Goldcorp is a well-positioned silver play for 2011, according to the analysts we surveyed.

“The name is one that people tend to think of it as gold, but it's in the top 20 of silver producers globally with about 13 million ounces a year ,” says Peter Sorrentino of Huntington Funds.

Morningstar analyst Min Tang-Varner recently raised her fair value estimate for Goldcorp by $12 a share to $48 after the company reported a 28 per cent rise in revenue for the third quarter ended Sept. 30 compared with the year before.

This, despite 4 per cent decline gold production, as revenue received a boost from $1,239/oz realized gold prices and $19.15/oz silver prices.

Tang-Varner tells investors that the reduction of Goldcorp's cash cost by $100/oz from the prior quarter to $260/oz due to higher silver, copper and zinc production and the run-up in their prices, was “rather extraordinary.”

Sorrentino says Goldcorp is a stock that investors would be “wise to consider” if they were looking for a name that would be discovered suddenly as a major silver play, without feeling that they were overpaying for it.

Goldcorp also prices everything that it does in Canadian dollars, which should reduce currency risks for investors in Canada.

Top Heal Care Companies To Buy For 2014: St. Elias Mines Ltd. (SLI.V)

St. Elias Mines Ltd., a development stage company, engages in the acquisition, exploration, and development of natural resource properties. The company primarily explores for gold and silver ores. It holds interests in various properties located in British Columbia, Canada; and Peru. The company is headquartered in Vancouver, Canada.

Hot Companies To Own For 2014: Principal Financial Group Inc(PFG)

Principal Financial Group, Inc. provides retirement savings, investment, and insurance products and services worldwide. The company?s Retirement and Investor Services segment provides retirement savings and related investment products and services, including a portfolio of asset accumulation products and services primarily to small and medium-sized businesses and individuals in the United States. This segment offers products and services to businesses for defined contribution pension plans, including 401(k) and 403(b) plans, defined benefit pension plans, nonqualified executive benefit plans, and employee stock ownership plan consulting services; and annuities, mutual funds, and bank products and services to the employees of its business customers and other individuals. Principal Financial Group?s Principal Global Investors segment offers a range of equity, fixed income, and real estate investments, as well as specialized overlay and advisory services to institutional inve stors. The company?s Principal International segment offers retirement products and services, annuities, mutual funds, institutional asset management, and life insurance accumulation products in Brazil, Chile, China, Hong Kong SAR, India, Indonesia, Malaysia, Mexico, Singapore, and Thailand. Principal Financial Group?s U.S. Insurance Solutions segment offers individual life insurance, as well as specialty benefits in the United States. Its individual life insurance products include universal and variable universal life insurance and traditional life insurance; and specialty benefit products comprise group dental and vision insurance, individual and group disability insurance, and group life insurance, as well as fee-for-service claims administration and wellness services. The company was founded in 1879 and is based in Des Moines, Iowa.

Advisors' Opinion:

[By Goldman]
Principal Financial(PFG) is an insurance and investment management company.

Principal is due to release fourth-quarter results today. It has an average earnings surprise average of 4.8% and moves 4%, both up and down, in reaction to earnings announcements. Principal's stock has soared 50% in the past 12 months, easily outpacing indices, and 13% in the past three months. Consequently, it has passed many of analysts' price targets. Goldman is still bullish, but predicts just 7% of remaining upside in the next 12 months.

Principal receives "buy" ratings from just 26% of researchers evaluating its stock. But, it is still notably undervalued relative to its peer group. The stock trades at a forward earnings multiple of less than 12, a book value multiple of 1.2 and a cash flow multiple of 4.5, 21%, 70% and 71% industry discounts. The stock pays an annual dividend, which fluctuates depending upon operating results. This year's 55 cent annual payout translated to a 2% yield on payment.

Hot Companies To Own For 2014: Plantronics Inc.(PLT)

Plantronics, Inc., together with its subsidiaries, engages in the design, manufacture, and marketing of lightweight communications headsets, telephone headset systems, and accessories for the business and consumer markets under the Plantronics name worldwide. It also offers specialty telephone products, such as telephones for the hearing impaired and other related products for people with special communication needs under the Clarity brand name. The company?s products are designed for specific markets and applications, such as offices; contact centers; mobile devices comprising mobile phones and smart phones; computer and gaming; and residential applications, as well as for other specialty applications. It sells its products through a network of distributors, retailers, wireless carriers, original equipment manufacturers, and telephony service providers. The company was founded in 1961 and is headquartered in Santa Cruz, California.

Hot Companies To Own For 2014: South Boulder Mines Ltd(STB.AX)

South Boulder Mines Limited engages in the acquisition, exploration, and development of mineral resource properties in Australia and Eritrea. It primarily explores for gold, nickel, and potash and phosphate fertilizer prospects. The company holds 100% interests in the Duketon Greenstone Belt projects located in Duketon; the Lake Disappointment potash project in the Gibson Desert; and the Cardabia phosphate project in the Carnarvon Basin in Western Australia. It also has interest in the Colluli Potash project covering an area of 906 square kilometers in the Danakil Depression region, located to the south east of Asmara in Eritrea. South Boulder Mines Limited is based in West Perth, Australia.

Sunday, September 15, 2013

Politics Aside for This Bank, if That's Possible

Top 5 Growth Stocks To Own Right Now

Politicians and bandwagons seem to go hand in hand with red tape, however, despite all the obstructions, Peter Stephens, of The Motley Fool UK still has high hopes for this bank.

It always fascinates me how politicians seem to jump on bandwagons. Indeed, the Parliamentary Commission on Banking Standards recently commented that it is "important for all the options for Royal Bank of Scotland's (LN:RBS) (US:RBS) future structure to be examined as a matter of urgency."

This seems to indicate that the Commission is seeking a break-up of RBS between a good RBS and a bad RBS so as to create two different entities. This idea is backed by a whole host of MPs, former Bank of England Governor, Lord King, and former Chancellor, Lord Lawson. Indeed, it seems to be a bandwagon worth jumping on, so it would be of little surprise to see other MPs follow suit and tie their respective flags to this particular mast.

Of course, the debate surrounding whether RBS should be split up or not is, for me, something of a red herring. This is because the Royal Bank of Scotland is already well into the process of splitting itself into a good and a bad bank; however, it is just not labeling itself as such.

The two areas are, according to RBS, core and non-core, with the core part of the bank representing the bits it wants to keep as part of what it hopes will be a thriving RBS. The non-core assets, meanwhile, are those that it either wants to sell because they require too much capital for too little return, or else it is being forced to sell them (as in the case of the sale of English branches).

So, the debate in Westminster Village is, in my view, rather disingenuous to Stephen Hester, RBS's current CEO, because he has worked hard to create a good bank and dispose of the bits that arguably made RBS a bad bank.

This strategy is starting to show signs of real progress, with RBS forecast to record earnings per share of around 30p in 2014. This puts shares on a forward price-to-earnings (P/E) ratio of just ten, which compares very favorably to the FTSE 100 on 14.8 and to the wider banking sector on 16.1.

Furthermore, although only a small proportion of such earnings are forecast to be paid out as dividends, I believe this is a prudent position for the bank to adopt. Using the capital to further shore up the balance sheet seems to be more sensible than returning cash to shareholders, at least until RBS becomes a really good bank.

Peter owns shares in RBS.

Read more from The Motley Fool UK here...

Friday, September 13, 2013

Does J.C. Penney Have Good Upside Potential?

With shares of J.C. Penney Company (NYSE:JCP) trading at around $18.22, is JCP an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

C = Catalyst for the Stock's Movement

J.C. Penney's stock is hurting after a disappointing earnings report. However, the stock isn't getting slammed as many people had expected. As far as Q1 results go, EPS came in at -$1.58 on revenue of $2.64 billion. Last year's Q1 EPS came in at -$0.75. The loss widened. Last year's Q1 revenue was $3.15 billion. Therefore, revenue declined 16.4 percent. Analysts expected Q1 2013 EPS of -$1.06 on $2.74 billion in revenue. Gross margins were 30.8 percent, down from 37.6 percent for the same time period last year. Comps were also down 16.6 percent year-over-year. At least SG&A expenses were down $82 million compared to last year, and J.C. Penney received a $1.75 billion loan from The Goldman Sachs Group (NYSE:GS).

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There were many reasons given for the decline in revenue, which included construction and poor marketing strategies. Former CEO Ron Johnson wanted to take a young and hip approach, but he failed to realize that Apple Inc. (NASDAQ:AAPL) customers usually aren't the same as J.C. Penney customers. People who have shopped at J.C. Penney through the years want one simple thing, which is Quality for Less. If you look at previous slogans for J.C. Penney, none of them give a clear indication of what the store is offering. If the concept of the store is to offer Quality for Less, then something along those lines should be considered as a slogan.

Former and current CEO Mike Ullman is saying all the right things at the moment. He wants to bring back many private brands, he wants stabilization, and he wants to go back to the basics. The following is a quote from Mike Ullman:

“Our objective is to put J.C. Penney back on a path to profitable growth. To achieve this, over the past five weeks we have taken critical steps to stabilize the business, including improving our balance sheet and ensuring we have our senior leadership in place. With that accomplished, together our team is focused on developing and executing strategies to enable us to reconnect with our customer and improve traffic and sales, while operating with strong financial discipline.”

We are looking forward, not back, and undertaking initiatives to ensure we have a successful future. We are intensely focused on renewing customer excitement and loyalty through a combination of new attractions and long-beloved brands, with a promotional cadence that customers can appreciate and count on. There is a good deal of work ahead, but by listening to our customers and providing the shopping experience they want, we are confident we will deliver for them and improve performance for the benefit of our suppliers, associates, and shareholders.”

Let's take a look at some numbers before forming an opinion on the stock. The chart below compares fundamentals for J.C. Penney, Kohl's Corp. (NYSE:KSS), and Macy's (NYSE:M).

	JCP	KSS	M
Trailing P/E	N/A	12.48	14.78
Forward P/E	N/A	10.95	10.81
Profit Margin	-7.59%	5.11%	4.82%
ROE	-27.43%	15.71%	22.28%
Operating Cash Flow	-10.00M	1.26B	2.26B
Dividend Yield	N/A	2.90%	1.70%
Short Position	33.10%	8.00%	2.60%

Top 5 Canadian Stocks To Invest In Right Now

Let's take a look at some more important numbers prior to forming an opinion on this stock.

T = Technicals Are Mixed

Aside from the past month, J.C. Penney has underperformed its peers as well as the market for every time frame listed below.

	1 Month	Year-To-Date	1 Year	3 Year
JCP	17.38%	-9.54%	-33.35%	-31.76%
KSS	10.51%	21.97%	14.23%	2.82%
M	8.99%	23.29%	31.06%	122.2%

At $18.22, J.C. Penney is still trading above its averages.

50-Day SMA	15.98
200-Day SMA	18.07

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E = Equity to Debt Ratio Is Normal

The debt-to-equity ratio is close to the industry average of 0.70.

	Debt-To-Equity	Cash	Long-Term Debt
JCP	0.94	930.00M	2.98B
KSS	0.75	537.00M	4.55B
M	1.15	1.84B	6.93B

Now let's take a look at the next page for the Trends and Conclusion. Is this stock an OUTPERFORM, a WAIT AND SEE, or a STAY AWAY?

T = Trends Might Support the Industry

Retailers have been holding on, but consumers aren't exactly rushing out to the stores. Even if the consumer is to strengthen, there is increased competition due to online retailers. However, if this proves to be a real economic recovery, then there is plenty of upside potential.

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Conclusion

J.C. Penney management seems to have a clear game plan, which should lead to improved results. This, in turn, will likely lead to stock appreciation. However, this is only the case if the broader market holds. If there is a market correction, then J.C. Penney will suffer a great deal.

Thursday, September 12, 2013

Top 5 China Stocks To Buy For 2014

Industry Insights

GlobalData, a London consultancy, projects China's prescription drug market will expand at a 26% compound annual growth rate to $315 billion in 2020, up from $48 billion last year. One of the drivers is China's investment in drug R&D. GlobalData also believes the growth will take place because of (not in spite of) price pressures being exerted by China's government. By increasing affordability, less-expensive products will expand the market and more than make up for lower unit prices, says the company.

Deals and Financings

aTyr Pharma, a San Diego startup with a laboratory in Hong Kong, completed a $49 million financing. The company is developing a novel class of protein drugs for rare immune disorders. aTyr has a subsidiary in Hong Kong named Pangu BioPharma, which came into being through an innovative partnership between aTyr and the Hong Kong University of Science and Technology.

Top 5 China Stocks To Buy For 2014: CNOOC Limited(CEO)

CNOOC Limited, through its subsidiaries, engages in the exploration, development, production, and sale of crude oil, natural gas, and other petroleum products. The company?s oil and natural gas properties are located in offshore China, which include Bohai Bay, western south China Sea, eastern south China Sea, and east China Sea, as well as in Indonesia, Iraq, and other regions in Asia; and Oceania, Africa, North America, and South America. As of December 31, 2010, the company had net proved reserves of approximately 2.99 billion barrels-of-oil equivalent, including approximately 1.92 billion barrels of crude oil and 6,458.3 billion cubic feet of natural gas. It also provides bond issuance services; and has a joint venture with Bridas Energy Holdings. CNOOC Limited was founded in 1982. The company is headquartered in Central, Hong Kong, and is considered a Red Chip company due to its listing on the Hong Kong Stock Exchange. CNOOC Limited is a subsidiary of China National Of fshore Oil Corporation.

Advisors' Opinion:

[By Dave Friedman]
Institutional investors bought 1,474,410 shares and sold 1,532,340 shares, for a net of -57,930 shares. This net represents 0.00% of common shares outstanding. The number of shares outstanding is 44,669,199,980. The shares recently traded at $187.66 and the company’s market capitalization is $82,478,290,357.81. About the company: CNOOC Limited, through its subsidiaries, explores, develops, produces, and sells crude oil and natural gas.

Top 5 China Stocks To Buy For 2014: China Lodging Group Limited (HTHT)

China Lodging Group, Limited, together with its subsidiaries, develops, operates, and manages a chain of hotels in the People?s Republic of China. It operates HanTing Express Hotel that targets knowledge workers and value-conscious travelers; HanTing Seasons Hotel, which targets mid-level corporate managers and owners of small and medium enterprises; and HanTing Hi Inn for budget-constrained travelers. As of March 31, 2011, the company had 473 hotels consisting of 259 leased-and-operated hotels and 214 franchised-and-managed hotels; and 162 hotels under development, including 74 leased-and-operated hotels and 88 franchised-and-managed hotels. China Lodging Group, Limited was incorporated in 2007 and is headquartered in Shanghai, the People?s Republic of China.

10 Best Financial Stocks For 2014: eLong Inc.(LONG)

eLong, Inc. operates as an online travel service provider in the People?s Republic of China. The company provides its customers with travel information and the ability to book rooms, air tickets, vacation packages, and other travel related services utilizing call center and Web-based distribution technologies. It facilitates the customers to book rooms in approximately 10,000 hotels in 450 cities across China, and fulfills air ticket reservations in approximately 80 cities across China. In addition, the company offers the ability to book rooms at approximately 100,000 hotels outside of China; and provides the customers informative content relevant to hotel and air travel decisions, including tourist and event site destination information, hotel facility information, and photos. eLong markets its services through online marketing, traditional media advertising, co-marketing with established brands of other companies, and direct marketing. The company was founded in 1999 and is headquartered in Beijing, the People?s Republic of China. eLong, Inc. operates as a subsidiary of Expedia Asia Pacific Limited.

Advisors' Opinion:

[By cnAnalyst]
eLong, Inc. (ADR) (NASDAQ:LONG) is the 10th best-performing stock last month in this segment of the market. It was up 62.09% for the past month. Its price percentage change was 17.47% year-to-date.

Top 5 China Stocks To Buy For 2014: Changyou.com Limited(CYOU)

Changyou.com Limited develops and operates online games in the People?s Republic of China. It involves in the development, operation, and licensing of massively multi-player online role-playing games (MMORPGs), which are interactive online games that might be played simultaneously by various game players. The company operates seven MMORPGs that include its in house developed Tian Long Ba Bu; and licensed Blade Online, Blade Hero 2, Da Hua Shui Hu, Zhong Hua Ying Xiong, Immortal Faith, and San Jie Qi Yuan. As of December 31, 2010, Changyou?s games in China had approximately 111.4 million aggregate registered accounts; 1.0 million aggregate peak concurrent users; and 2.7 million aggregate active paying accounts. The company was founded in 2003 and is based in Beijing, the People?s Republic of China. Changyou.com Limited is a subsidiary of Sohu.com Inc.

Top 5 China Stocks To Buy For 2014: Clean Diesel Technologies Inc.(CDTI)

Clean Diesel Technologies, Inc. engages in the manufacture and distribution of emissions control systems and products for heavy duty diesel and light duty vehicle markets. The company operates in two divisions, Heavy Duty Diesel Systems and Catalyst. The Heavy Duty Diesel Systems division designs and manufactures verified exhaust emissions control solutions that are used to reduce exhaust emissions created by on-road, off-road, and stationary diesel and alternative fuel engines, including propane and natural gas. Its products include closed crankcase ventilation systems, diesel oxidation catalysts, diesel particulate filters, Platinum Plus fuel-borne catalysts, ARIS selective catalytic reduction reagents, catalyzed wire mesh diesel particulate filters, alternative fuel products, and exhaust accessories. This division offers its products for original equipment manufacturers of heavy duty diesel equipment, such as mining equipment, vehicles, generator sets, and construction equipment, as well as retrofit customers consisting of school districts, municipalities, and other fleet operators. The Catalyst division produces catalyst formulations using its proprietary MPC technology for gasoline, diesel, and natural gas induced emissions. Its products comprise catalysts for gasoline engines, diesel engines, and energy applications. This division supplies its catalysts to automotive manufacturers and large heavy duty diesel engine manufacturers. The company sells its products through a network of distributors and dealers, and its direct sales force worldwide. Clean Diesel Technologies, Inc. is based in Ventura, California.

Advisors' Opinion:

[By CRWE]
Clean Diesel Technologies, Inc. (Nasdaq:CDTI), a cleantech emissions control company, will be a presenter at the 3rd Annual Craig-Hallum Capital Group Alpha Select Conference. The presentation is scheduled for 2:10 p.m. ET on Thursday, September 27, 2012 at the Sentry Centers in New York.
[By cnAnalyst]
Clean Diesel Technologies, Inc. (NASDAQ:CDTI) is the 3rd best-performing stock last month in this segment of the market. It was up 90.97% for the past month. Its price percentage change was -13.07% year-to-date.

Tuesday, September 10, 2013

Can General Mills Regain Its Momentum?

With shares of General Mills (NYSE:GIS) trading at around $48.33, is GIS an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

C = Catalyst for the Stock's Movement

You ate Cheerios as a baby. When you were a little older, you sifted through Lucky Charms in order to make sure all the marshmallows were saved for last. It was so delicious that you had to go for a second bowl. Maybe even a third bowl! A little later in life, you ate Wheaties because it was the breakfast of champions. For sweet treats, you dreamed of Pillsbury cake or Betty Crocker brownies. Salivating yet?

There are two points here. One, General Mills has many quality brands to its name. Two, many of these brands are household names. When brand recognition is that strong, future prospects are good. But this is far from the only positive.

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Revenue has consistently improved on an annual basis, and 2012 was especially impressive. Looking at the last quarter on a year-over-year basis, revenue increased 12.20 percent. Earnings declined 11.40 percent, but there fluctuations should be expected. What's most important is that General Mills consistently delivers profits. General Mills has increased its dividend for 10 consecutive years and buybacks are commonplace. Actually, General Mills plans on returning more cash to shareholders in the near future.

In regards to company culture, it's very strong. According to Glassdoor.com, employees have rated their employer a 4.0 of 5, and 88 percent of employees would recommend the company to a friend. The leadership is even more impressive as 95 percent of employees approve of CEO Ken Powell.

There has to be a substantial negative somewhere! What about analysts? Nope, you won't find many negatives there. Analysts like the stock: 12 Buy, 7 Hold, 1 Underperform.

But is the stock resilient in bear markets? Yes. General Mills dropped approximately 20 percent in 2008/2009, which was nothing compared to the drops most stocks throughout the broader market. Most investors would have popped open a bottle of champagne to celebrate if their top holding dropped 20 percent at that time. Kellogg Company (NYSE:K) also dropped approximately 20 percent at the time. However, ConAgra Foods dropped approximately 40 percent.

Currently, General Mills is trading at 18 times earnings whereas Kellogg is trading at 25 times earnings, and ConAgra is trading at 28 times earnings. General Mills has the most impressive margins of the three. For example, General Mills has a profit margin of 10.41 percent whereas Kellogg has a profit margin of 6.30 percent, and ConAgra has a profit margin of 3.48 percent. General Mills is a winner another area, which is yield. General Mills currently yields 3.20 percent whereas Kellogg yields 2.80 percent, and ConAgra yields 3.00 percent.

General Mills recently upped its FY 2013 adjusted EPS forecast to $2.68-$2.69 from $2.66-$2.68. Growth expectation for 2014 was also maintained at the high single-digit range.

Believe it or not, there are negatives for General Mills. The listed negatives have been increased competition, high commodity prices, and volume pressures due to high prices. However, looking at those a little closer, there is really only one negative that's cause for concern, which is high prices.

Many public and private companies have been laying off employees in order to improve their bottom lines. This has to be done because top-line growth is suffering in many cases. In some situations, employees are asked to take a pay cut. Either way, this leads to a weaker consumer. Some consumers will opt for more generic brands that will allow them to cut their own costs. That said, General Mills customers tend to be loyal.

As far as increased competition goes, General Mills has proven it can handle all threats for many decades. And when it comes to commodity prices, they're only heading in one direction, which is down. This is good news because it will cut costs for General Mills, but it's also bad news because it signifies a decline in global demand in many areas.

Let's take a look at some important numbers prior to forming an opinion on this stock.

T = Technicals Are Mixed

General Mills has been a solid performer over the past three years, but the past month has been subpar.

	1 Month	Year-To-Date	1 Year	3 Year
GIS	-3.19%	21.32%	30.54%	39.93%
K	-1.14%	14.64%	33.85%	27.81%
CAG	-2.41%	17.04%	38.73%	50.55%

Looking at the last quarter on a year-over-year basis, General Mills is trading below its 50-day SMA, but still above its 200-day SMA.

50-Day SMA	49.37
200-Day SMA	45.42

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E = Equity to Debt Ratio Is Normal

The debt-to-equity ratio for General Mills is close to the industry average of 0.80. It’s much stronger than the debt-to-equity ratio for the peers listed below.

	Debt-To-Equity	Cash	Long-Term Debt
GIS	0.95	751.20M	8.06B
K	2.66	252.00M	7.56B
CAG	2.07	723.80M	10.68B

E = Earnings Have Been Steady

Earnings dropped in 2012, but that number was still an improvement over 2009 and 2010. As far as revenue goes, it has consistently improved on an annual basis.

Fiscal Year	2009	2010	2011	2012
Revenue ($) in millions	14,691	14,797	14,880	16,658
Diluted EPS ($)	1.90	2.24	2.70	2.35

Looking at the last quarter on a year-over-year basis, revenue and earnings both improved.

Quarter	May. 31, 2012	Aug. 31, 2012	Nov. 30, 2012	Feb. 28, 2013
Revenue ($) in millions	4,066.40	4,051	4,881.80	4,430.60
Diluted EPS ($)	0.49	0.82	0.82	0.60

Now let's take a look at the next page for the Conclusion. Is this stock an OUTPERFORM, a WAIT AND SEE, or a STAY AWAY?

Conclusion

General Mills has proven that it can grow and deliver profits during good economic times, and that it can weather any storms during bad economic times. All the while, investors collect generous dividend payments.

Monday, September 9, 2013

Weak Trade Deficit Brings Opportunity for Oil and Gas Exporters

If you are a shale driller and into fracking, there is a huge opportunity for oil and gas exports after looking at the latest trade data. The latest report on international trade, the trade deficit, came in at -$39.1 billion for the month of July. Bloomberg had a consensus of -$39 billion. Since this report was mostly in-line with expectations, we are not evaluating it for a market moving event. This is opportunity knocking for energy exporters top to bottom.

The July trade deficit did worsen from $34.4 billion in June, which was preliminary reported as $34.2 billion. What took place was that exports were down by 0.6%, but that was on the heels of a 2.2% gain in June. Imports rose by 1.6% in July, way up from the 2.2% drop in the June report.

After looking through the reports on this, Bloomberg pointed out that this worse trade deficit was primarily due to the nonpetroleum goods deficit, and that grew to $38.7 billion in July from $35.0 billion in June. We looked through the data and the petroleum deficit increased to $18.7 billion in July, versus $17.5 billion in June.

The services surplus also fell only marginally to $19.4 billion from $19.5 billion. We would point out that the international trade balance has remained relatively low because of sluggish import demand. Slow global growth, particularly from Europe and top emerging markets running way under capacity, are acting to curb demand for U.S. exports at a time when the currency remains somewhat elevated.

So why is this a huge opportunity? The United States is in the position to continue its energy boom for another decade or longer. Earlier this year, the Eagle Ford Shale was called an $89 billion annual impact ahead, and that is just one of the booming shale regions. The EIA even has gone on record to forecast that 2 million jobs could be created from this boom.