Monday, September 30, 2013

Best Canadian Stocks To Invest In Right Now

lululemon athletica (NASDAQ: LULU  ) , which started out as a Canadian yoga-wear seller and has expanded to fitness gear around the world, has had an impressive run since March 2009.� The company has expanded to more than 280 stores worldwide, and its stock has appreciated more than 2,900% since then.

But even though the company's recent earnings report beat expectations, the stock is down significantly since CEO Christine Day -- who has been at the helm for all of this wild ride -- announced she'll be leaving the company once a replacement is found.�

In the following video, Fool contributor Brian Stoffel discusses why he thinks shares of Lululemon stock are worth looking into, given today's prices.

The future for Lululemon and retail
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Best Canadian Stocks To Invest In Right Now: Kinross Gold Corporation(KGC)

Kinross Gold Corporation, together with its subsidiaries, engages in mining and processing gold ores. It also involves in the exploration and acquisition of gold bearing properties. The company?s gold production and exploration activities are carried out principally in the Americas, Africa, and the Russian Federation. As of December 31, 2010, its proven and probable mineral reserves were 62.4 million ounces of gold, 90.9 million ounces of silver, and 1.4 billion pounds of copper. The company was founded in 1972 and is based in Toronto, Canada.

Advisors' Opinion:
  • [By Lee Jackson]

    Kinross Gold Corp. (NYSE: KGC) may be the stock that give investors the most amount of leverage on a gold rebound. Management reduced the company’s annual capital expenditures forecast to $1.45 billion from $1.6 billion, saving $180 million from its cost restructuring initiatives. Cancellation of its upcoming semiannual dividend payment to its shareholders will save $182 million per year. Kinross expects to produce gold at a cost of $1,000 to $1,200 an ounce this year. The Merrill Lynch target is $7.00, and the consensus target is $6.55. The dividend, which soon will be cancelled, has a yield of 2.9%.

  • [By Dave Forest]

    You don't have to take my word for it. Just take a look at the gold-star list of major mining companies that have lined up to work with Riverside: Cliffs Natural Resources (NYSE: CLF), Antofagasta, Hochschild and Kinross Gold (NYSE: KGC), to name a few.

Best Canadian Stocks To Invest In Right Now: Penn West Petroleum Ltd(PWE)

Penn West Petroleum Ltd. engages in acquiring, exploring, developing, exploiting, and holding interests in petroleum and natural gas properties and related assets in North America. The company produces light and medium crude oil, natural gas liquids, heavy oil, and natural gas. It operates in two major regions, including the Southern District, which covers properties within Manitoba, Saskatchewan, and southern and east central Alberta with developed and undeveloped land base totaling approximately 3.3 million net acres; and the Northern District encompassing northeastern British Columbia, northern Alberta, parts of west central Alberta, and the Northwest Territories with developed and undeveloped land position of approximately 2.9 million net acres. The company was formerly known as Penn West Energy Trust and changed its name to Penn West Petroleum Ltd. in January 2011. Penn West Petroleum Ltd. was founded in 1979 and is headquartered in Calgary, Canada.

Advisors' Opinion:
  • [By Stephan Dube]

    Peace River's most notable producers:

    PennWest Exploration (PWE), see article here.Royal Dutch Shell (RDS.A), see article here.Baytex (BTE), see article here.Strata Oil and Gas (SOIGF.PK), see article here.Petrobank Energy & Resources (PBEGF.PK), see article here.

    Cold Lake's most notable producers:

  • [By CRWE]

    Penn West Exploration (NYSE:PWE) wishes to notify interested parties that Rob Wollmann, Senior Vice President, Exploration will present at the EnerCom Oil & Gas Conference on Tuesday, August 14, 2012 at 1:55pm (MST) in Denver, Colorado.

Hot Heal Care Companies To Buy Right Now: Chipotle Mexican Grill Inc.(CMG)

Chipotle Mexican Grill, Inc. develops and operates fast-casual, fresh Mexican food restaurants in the United States, Canada, and England. Its restaurants primarily offer burritos, tacos, burrito bowls, and salads. As of December 31, 2011, it operated 1,230 restaurants, which includes 1 ShopHouse Southeast Asian Kitchen. Chipotle Mexican Grill, Inc. was founded in 1993 and is based in Denver, Colorado.

Advisors' Opinion:
  • [By Ben Levisohn]

    Their favorites: Chipotle Mexican Grill (CMG) and Starbucks (SBUX). They explain why:

    For Starbucks, we anticipate continued potential for earnings upside on remarkably healthy and consistent same-store sales trends (which we believe have continued into the September quarter), with its June quarter comp of 9% leading the entire restaurant industry, despite more than 19,000 global locations. For Chipotle, we remain heartened by strong midsingle-digit same-store traffic gains, with a likely price increase in the first half of 2014 poised to provide upward momentum to estimates, particularly as Chipotle has already absorbed significant commodity inflation that has increased its cost of sales to 33%-plus.


    Chipotle Mexican Grill provides consumers with quick, delicious, and healthy food options on a daily basis. The company recently delivered an earnings report that beat analyst expectations. The stock has been on a strong surge to higher prices and sees no signs of slowing just yet. Over the last four quarters, earnings and revenue figures have been increasing which has produced very pleased investors. Relative to its peers and sector, Chipotle Mexican Grill has been a year-to-date performance leader. Look for Chipotle Mexican Grill to continue to OUTPERFORM.

  • [By AlphaStreetResearch]

    Buffalo Wild Wings (BWLD) has been a hot growth stock, but this company has plenty of room to run higher as the firm continues to execute its domestic and international growth strategy. This is a company with huge potential in Restaurant and Services sector as the company's customer base continues to grow and remain loyal. Below is our introduction into its business model, it's strengths, and the buying opportunity that currently exists for Buffalo Wild Wings. Wall Street has not yet realized the full potential of this company as it continues to be seen as a seasonality play in this space. The company continues to prove this stigma wrong. The company has a market cap of $2.06 Billion and reports the next quarter on October 21, 2013. With this in mind, we value Buffalo Wild Wings at $123.00 by year-end of 2013 and $138.00 by May 1, 2014, an increase of 28% from current levels. We strongly feel that this company has the potential to see major upside over the next year and we could see the stock continue to run like Chipotle (CMG) or Panera (PNRA) in recent history. Dining and entertainment demand is growing and Buffalo Wild Wings continues to take market share, as the company has some of the best customer retention rates and average ticket sales in the sector. We will later highlight:

  • [By Jon C. Ogg]

    Chipotle Mexican Grill Inc. (NYSE: CMG) was raised to Hold from Underperform at Jefferies.

    Devon Energy Corp. (NYSE: DVN) was started as Buy with a $75 price target at Canaccord Genuity.

Best Canadian Stocks To Invest In Right Now: Weatherford International Ltd(WFT)

Weatherford International Ltd. provides equipment and services used in the drilling, evaluation, completion, production, and intervention of oil and natural gas wells worldwide. It offers artificial lift systems, which include reciprocating rod lift systems, progressing cavity pumps, gas lift systems, hydraulic lift systems, plunger lift systems, hybrid lift systems, wellhead systems, and multiphase metering systems. The company also provides drilling services, including directional drilling, ?Secure Drilling? services, well testing, drilling-with-casing and drilling-with-liner systems, and surface logging systems; and well construction services, such as tubular running services, cementing products, liner systems, swellable products, solid tubular expandable technologies, and inflatable products and accessories. In addition, it designs and manufactures drilling jars, underreamers, rotating control devices, and other pressure-control equipment used in drilling oil and nat ural gas wells; and offers a selection of in-house or third-party manufactured equipment for the drilling, completion, and work over of oil and natural gas wells for operators and drilling contractors, as well as a line of completion tools and sand screens. Further, the company provides wireline and evaluation services; and re-entry, fishing, and thru-tubing services, as well as well abandonment and wellbore cleaning services; stimulation and chemicals, including fracturing and coiled tubing technologies, cement services, chemical systems, and drilling fluids; integrated drilling services; and pipeline and specialty services. It serves independent oil and natural gas producing companies. The company was founded in 1972 and is headquartered in Geneva, Switzerland.

Advisors' Opinion:
  • [By Dr. Kent Moors]

    That's why some of the biggest OFS providers - like Schlumberger (NYSE: SLB), Halliburton (NYSE: HAL) and Weatherford International (NYSE: WFT) - have been buying up oil and gas equipment companies.

  • [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).

Best Canadian Stocks To Invest In Right Now: PerkinElmer Inc.(PKI)

PerkinElmer, Inc. provides technology, services, and solutions to the diagnostics, research, environmental, industrial, and laboratory services markets worldwide. The company operates in two segments, Human Health and Environmental Health. The Human Health segment develops diagnostics, tools, and applications to help detect diseases earlier, as well as accelerate the discovery and development of critical new therapies. This segment provides early detection for genetic disorders from pre-conception to early childhood, as well as digital x-ray flat panel detectors and infectious disease testing for the diagnostics market. It also provides a suite of solutions, including instrumentation for automation and detection solutions, in vitro and in vivo imaging and analysis hardware and software, and a portfolio of consumable products, such as drug discovery and research reagents that enable researchers to enhance the drug discovery process. The Environmental Health segment offers t echnologies and applications to facilitate the creation of safer food and consumer products, secure surroundings, and efficient energy resources. This segment provides analytical technologies that address the quality of environment, sustainable energy development, and ensure safer food and consumer products; analytical instrumentation for the industrial market, which includes the semiconductor, chemical, petrochemical, lubricant, construction, office equipment, and quality assurance industries; and laboratory services. The company markets its products and services directly through its own sales forces and distributors for customers, including pharmaceutical and biotechnology companies, laboratories, academic and research institutions, public health authorities, private healthcare organizations, doctors, and government agencies. PerkinElmer, Inc. was founded in 1931 and is headquartered in Waltham, Massachusetts.

Advisors' Opinion:
  • [By David Goodboy]

    In other bullish news, TrovaGene entered into a material agreement with multibillion-dollar diagnostics technology leader PerkinElmer (NYSE: PKI) to jointly develop a test to determine a person's risk of developing hepatocellular carcinoma (HCC). The terms have not been disclosed, but PerkinElmer will make milestone payments to TrovaGene. 

Saturday, September 28, 2013

A Top-Down Approach To Investing

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Most investors struggle with the art of picking stocks. Should they base their decisions solely on what the company does and how well it does it? Or should they focus more on larger macroeconomic trends, such as the strength of the economy, and then determine which stocks to buy? There is no right or wrong answer to these two questions. However, investors should develop systems that help them achieve their investment goals. The second option mentioned is referred to as the top-down investing approach to the market. This method allows investors to analyze the market from the big picture all the way down to individual stocks. This differs from the bottom-up approach, which begins with individual stocks' fundamentals and eventually expands to include the global economy. This article will concentrate on the process used when investors implement the macro-to-micro style referred to as the top-down approach.

Start at the Top: The Global View
Because the top-down approach begins at the top, the first step is to determine the world economy's health. This is done by analyzing not only the developed countries but also emerging countries. A quick way to determine an economy's health is to look at gross domestic product (GDP) growth over the past few years and the estimates going forward. Often, the emerging market countries will have the best growth numbers when compared with their mature counterparts.

Unfortunately, because we live at a time in which war and geopolitical tensions are heightened, we must not forget to be mindful of what is currently affecting each region of the world. A few regions and countries throughout the world will fall off the radar immediately and will no longer be included in the remainder of the analysis, simply due to the amount of financial instability that could wreak havoc on any investments.

Analyze the Trends
After determining which regions present a high reward-to-risk ratio, the next step is to use charts and technical analysis. By looking at a long-term chart of the specific countries' stock index, we can determine whether the corresponding stock market is in an uptrend and worth analyzing, or is in a downtrend, which would not be an appropriate place to put our money at this time. These first two steps can help you discover the countries that would match your wants and needs for diversification.

Look to the Economy
The third step is to do a more in-depth analysis of the U.S. economy along with the stock market's health in particular. By examining the economic numbers such as interest rates, inflation and employment, we can determine the current market strength and have a better idea of what the future holds. There is often a divergence between the story the economic numbers tell and the trend of the stock market indices.

The final step in macroanalysis is to analyze the major U.S. stock indices such as the S&P 500 and Nasdaq. Both fundamental and technical analysis can be used as barometers to determine the health of the indices. The market's fundamentals can be determined by such ratios as price-to-earnings, price-to-sales and dividend yields. Comparing the numbers to past readings can help determine whether the market is at a level that is historically overbought or oversold. Technical analysis will help ascertain where the market is in relation to the long-term cycle. Use charts that show the past several decades and zone down the time horizon to a daily view. For example, indicators such as the 50-day and 200-day moving averages help us find the current market trend and whether it is appropriate for investors to be invested heavily in equities.

So far, our process has taken a macro approach to the market and has helped us determine our asset allocation. If, after the first few steps, we find that the results are bullish, there is a good chance a majority of the investment-worthy assets will be from the equities market. On the other hand, if the outlook is bleak, the allocation will shift its focus from equities to more conservative investments such as fixed income and money markets.

Microanalysis: Is This Investment Right for You?
Deciding on an asset allocation is only half the battle. The next integral step will help investors determine which sectors to focus on when searching for specific investments such as stocks and exchange traded funds (ETFs). Analyzing the pros and cons of specific sectors (i.e. health care, technology and mining) will narrow the search even further. The process of analyzing the sectors involves tactics used in the prior approach such as fundamental and technical analysis. In addition to the mentioned tools, investors must consider the long-term prospects of the specific sectors. For example, the emergence of an aging baby boomer generation over the next decade could serve as a major catalyst for sectors such as health care and leisure. Conversely, the increasing demand for energy coupled with higher prices is another long-term theme that could benefit the alternative energy and oil and gas sectors. After the entire amount of information is processed, a number of sectors should rise to the top and offer investors the best opportunities.

The emergence of ETFs and sector-specific mutual funds has allowed the top-down approach to end at this level in certain situations. If an investor decides the biotech sector must be represented in the portfolio, he or she has the option of buying an ETF or mutual fund composed of a basket of biotech stocks. Instead of moving to the next step in the process and taking on the risk of an individual stock, the investor may choose to invest in the entire sector with an ETF or mutual fund.

However, if an investor feels the added risk of selecting and buying an individual stock is worth the extra reward, there is an additional step in the process. This final phase of the top-down approach can often be the most intensive, because it involves analyzing individual stocks from a number of perspectives.

Fundamental analysis includes a variety of measurements such as price/earnings to growth ratio, return on equity and dividend yield, to name a few. An important aspect of individual stock analysis will be the company's growth potential over the next few years. Ideally, investors want to own a stock with a high growth potential, because it will be more likely to lead to a high stock price.

Technical analysis will concentrate on the long-term weekly charts, as well as daily charts, for an entry price. At this point, the individual stocks are chosen and the buying process begins.

The Positives of Top-Down
Proponents of the top-down approach argue that the system can help investors determine an ideal asset allocation for a portfolio in any type of market environment. Often a top-down approach will uncover a situation that may not be appropriate for large investments into equities. The ability to keep investors from over-investing in equities during a bear market is the biggest pro for the system. When a market is in a downtrend, the probability of picking winning investments drops dramatically even if the stock meets all the required conditions. When using the bottom-up system, an investor will determine which stocks to buy before considering the state of the market. This type of approach can lead to investors being overly exposed to equities, and the portfolio will likely suffer.

Other benefits to the top-down approach include diversification among not only top sectors, but also the leading foreign markets. This results in a portfolio that is diversified within the top investment-worthy sectors and regions. This type of investing is referred to in some small circles as "conversification," a mixture between concentration and diversification.

The Not-So-Positives of Top-Down Investing
So far, the top-down approach may sound foolproof; however, investors must consider a few other factors. First and foremost, there is the possibility that your research will be incorrect, causing you to miss out on an opportunity. For example, if the top-down approach indicates that the market is set to continue lower in the near future, it may result in a lesser exposure to equities. However, if your analysis is wrong and the market rallies, the portfolio will be underexposed to the market and will miss out on the rally gains.

Then there's the problem of being under-invested in a bull market, which can prove to be costly over the long term. Another downfall to the system occurs when sectors are eliminated from the analysis. As a result, all stocks in the sector are not included as possible investments. Often a leader in the sector is overlooked due to this process and will never make its way into the portfolio. Finally, investors could miss out on "bargain" stocks when the market is near lows.

Find What You've Been Looking For
In the end, investors must remember there is no single approach to investing and every approach has its own pros and cons. One of the keys to becoming a successful long-term investor is finding a system that best fits your goals and objectives.

Friday, September 27, 2013

Save $500 in 90 Days: 7 Tips to Make It Happen

USA, New Jersey, Jersey City, Young attractive woman watching improvised jar - piggybankGetty Images

Financial experts, and for that matter, fitness gurus, tell you to pace yourself when it comes to setting goals. When you choose an attainable milestone, it's easier to stick to your plan. So let's say you need $500 for a vacation with friends or to pay for holiday gifts for your extended family. We consulted some frugal living experts, and came away with these seven suggestions that can help you reach that goal in three months -- just in time for holiday shopping. 1. Do one thing every day to save. Skipping the designer coffee or packing your lunch are the simplest ways to cut back on your spending, says Clare Levison, author of "Frugal Isn't Cheap." To get to $500 in three months means not spending just $5.56 a day. 2. Switch to generic brands. "The average family of four that buys only brand-name grocery items could save about $200 per month simply by switching to store brands and generic versions of those grocery items whenever possible," says Jeff Yeager, AARP's savings expert and author of four books about frugal living, including his most recent, "How to Retire the Cheapskate Way." 3. Reconfigure your bundle. Leah Ingram, a frugal living expert who blogs at, says you should check to see if unbundling your TV, Internet, and phone can save you money. Sometimes you can save by cancelling your landline phone entirely, but if you have a package deal with the same provider, it may be better to ask for a usage review and find a less costly deal. "Even if you only save $30 per month, that's $90 of your $500 goal in three months, and $360 in savings in a year," says Ingram. 4. Take on some odd jobs. Levison says you should look into income-production as well as cost-cutting measures. Mowing lawns, shoveling snow, providing child care, or pet-sitting can bring in extra cash to stash in your savings account. 5. Temporarily minimize your cable bill. You can cancel your cable for a few months and save about $300, says Levison. Or slash the service to the basic level to save $25 to $30 per month. 6. Stop driving. If you have the option, telecommute, walk or bike to work, take public transportation, or carpool, suggests Yeager. These alternatives will save the typical American worker about $200 per month (in gas, tolls, and wear-and-tear) compared to the price of driving their own wheels, says Yeager, getting you above your goal within three months. 7. Review your insurance policies. Depending on your circumstances, you can save money on your auto and home insurance policies by bundling policies with one company, requesting other discounts, and raising your deductibles. Just make sure you can comfortably cover that deductible if you need to make a claim. "If you're retired, consider canceling any disability and/or life insurance you might be paying for," says Yeager. "While everyone's situation is different, for many retirees these insurance policies are unnecessary, as they're intended primarily to replace lost income, which is no longer a factor once you stop working." This move could reap a potential savings of $2,000 or more per year, or $500 in three months, Yeager says. Whether you want to do one big thing such as walking or carpooling instead of driving or take a series of small savings steps, you can reach your goal within three months by sticking to your plan.

Thursday, September 26, 2013

Court says Bank of America can't force brokers into arbitration

arbitration, brokers, merrill lynch, bank of america, class action, overtime

A decision Wednesday by a federal judge could help Finra in its fight to force The Charles Schwab Corp. to stop using class-action waivers in its arbitration agreements with customers.

In the Wednesday ruling, which involved a separate case, judge Harold Baer of the U.S. District Court of the Southern District of New York, denied a request by Merrill Lynch and Bank of America to force a group of bank brokers to arbitrate a proposed class-action lawsuit seeking overtime pay.

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The relevant laws and interpretations by the Securities and Exchange Commission “each reject [Merrill's and Bank of America's] contention that arbitration should be compelled at this stage of the litigation,” Mr. Baer wrote in in denying the firms' request.

Merrill and Bank of America sought to move the case into the arbitration system run by the Financial Industry Regulatory Authority Inc.

But Finra rules “explicitly prohibit the enforcement of arbitration agreements against a member of [a continuing] putative class or collective action,” Mr. Baer wrote.

That's the same argument Finra is making in its pending action against Schwab.

The self-regulator brought charges against Schwab last year, claiming that Schwab's arbitration agreement violated Finra rules that ensure customers can pursue class-action claims in court, in lieu of an arbitration.

Earlier this year, a Finra hearing panel agreed with Schwab, saying recent Supreme Court decisions regarding the Federal Arbitration Act prevented Finra from enforcing those rules.

Finra appealed to its internal appeals board, the National Adjudicatory Council, which heard the case Wednesday. The NAC has yet to issue an opinion.

“I think [judge Baer's] decision is going to be influential” in the Schwab case, said plaintiffs' attorney Jacob Zamansky, of Zamansky & Associates LLC.

“It covered the same essential facts — that Finra rules can overrule the [Federal] Arbitration Act,” he said.

Mr. Baer “is a pretty influential judge, and the second circuit is pretty influential” with financial industry cases, Mr. Zamansky added.

“I think it's an extremely important decision,” agreed Paul Bland, a senior attorney at Public Justice, a public interest law firm founded by trial lawyers. “The logic of the district court's decision here [with brokers means] that Schwab's challenge of the Finra rules with respect to investors is also invalid.”

But Schwab spokesman Greg Gable doubted the decision would have an impact on Schwab's case.

“The cases involve different things, in terms of what was in the agreements,” Mr. Gable said. “There was no class-action waiver in Merrill's employment agreement. … If the! re [had been a] waiver, the court would have, or should have, dismissed the class and compelled arbitration.”

Finra spokeswoman Michelle Ong declined comment.

It's not known whether the Baer decision came up in the NAC hearing or whether the panel will consider it. But it's possible the Merrill case could be cited in future appeals.

Further appeals of the Schwab case would be heard by the Securities and Exchange Commission, then a U.S. court of appeals, and ultimately the U.S. Supreme Court.

Wednesday, September 25, 2013

It Was a Good Ride, But It's Time to Get Off the Tangoe Train (TNGO)

Call it a hunch (because that's pretty much all it is), but Tangoe Inc. (NASDAQ:TNGO) looks likes it's on the verge of pulling back... and by more than a little. After a 75% runup since late April, TNGO shares are running out of gas, and are due for some profit-taking.

I know the fans and supports (and shareholders) of TNGO are likely to already be up in arms and sharpening their pitchforks because I merely mentioned the idea. To them, I can only say this - it's nothing personal against then, or the company, nor is it necessarily a long-term judgment call. It's simply an acknowledgement of a trading reality; Tangoe Inc. shares are frothy and due for a dip. Like I said, it's time for some profit-taking.

The zoomed out daily chart of Tangoe tells the tale. The runup has been strong, but perhaps to the point of not being sustainable at its current pace. Shares are also now 46% above their 200-day moving average line (green), versus the "normal" maximum of about 11%. You'll also notice that volume has NOT been growing on the way up, suggesting there's not a lot of participation in the rally - there just haven't been many sellers to get in the way. Yeah, the volume buying perked up one day a couple of weeks ago, and was solid in the latter part of last week. The selling volume in between those two times, however, was also strong, suggesting there are just as many people willing to get out of TNGO at its current price.

With all of that being said, the shape of today's bar from TNGO is a clue in itself. It's a doji bar - so far anyway - where the open and close (current price) are about the same, and often in the middle the intraday range; they usually take shape after a strong move (which this chart has certainly made). In this case, both the open and close so far are near the bottom of today's high/low range, bolstering the bearish argument.

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See, dojis often occur at key pivot points, as it implies the stock's at a balance between a net-selling environments and a net-buying environment... the small window of time between a move from one environment to another. In the case of Tangoe Inc., that transition would obviously be from a bullish environment to a bearish one. The fact that the open and the close for Tuesday are both at the lower end of the day's trading range implies the buying effort has struggled to keep up with the selling effort. Consider it a red flag.

The clincher will be the next strong move lower on a daily chart... lower than today's close. Once that happens, it will be a sign the tide has turned to the point of no return. And, as overbought as the stock is, once the TNGO avalanche starts, it's going to be a nasty tumble.

If you'd like to get more trading ideas and insights (and early warnings) like this one, be sure to become a subscriber to the free SmallCap Network newsletter today. You'll get stock picks, market calls, and more.

Monday, September 23, 2013

How to Keep Student-Loan Debt Under Control

Over the past few months, I've been following two college-loan stories. The first was the debate in Congress about how high the federal student-loan interest rate should be. The second involved an acquaintance of mine -- I'll call her Debbie -- who's trying to find a way out of student-loan hell.

SEE ALSO: How Much Does College Really Cost?

Back in the late 1980s, Debbie borrowed money to go to a four-year college. After struggling with her grades and being put on academic probation, she switched to a community college. Readmitted to her four-year school, she borrowed even more money and ended up with $17,000 in federal loans.

After graduation, Debbie held a series of low-paying jobs and never made regular payments on her loans, sending in money sporadically. Eventually, the Department of Education turned over the unpaid debt to a collection agency and began garnishing Debbie's wages. With her personal finances in disarray, she declared bankruptcy. But her loans continued to accrue interest and fees.

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About a year ago, Debbie got a notice from the Education Department saying that if she didn't increase her payments, she would be subject to tax offset and her refunds would be seized. She figured that it couldn't apply to her because her wages were already being garnished, so she disregarded the notice -- and lost her tax refund. That was the wakeup call she needed to seek help from a friend of mine, who called me (and my Kiplinger colleagues) for guidance.

Although Debbie's wages have been garnished for a decade, she still owes $24,390 in principal, interest and fees. Now she's talking with a credit counselor, who, we hope, will be able to tell her what she needs to do to square herself with the feds and set up a payment plan she can afford.

Deeper issues. While all this was playing out, members of Congress were trying to figure out how interest rates should be set on student loans. They eventually agreed that for new undergraduate loans, the rate would be tied to the government's borrowing costs -- about two percentage points higher than the rate on the ten-year Treasury note -- to make the process less political and more fiscally sensible. To protect borrowers, the rate would be capped at 8.25%.

It was a welcome political compromise, but the debate didn't address fundamental issues involving student loans. As I've written in the past (see Avoid the Student-Loan Debt Trap), student borrowing is a vicious cycle: The very loans that are supposed to help students pay for college also contribute to driving up costs, which prompts students to borrow even more. And the simple fact that loans are available can encourage students like Debbie to borrow more than they should without considering the consequences. Debbie didn't realize what she was getting into, didn't take responsibility for repaying her loans or seeking help to handle them, and was eventually overwhelmed by the system.

Run the numbers. Choosing a college is often an emotional decision for students and parents, and I don't mind being the bad guy who intervenes to bring everyone down to earth. When my son recently went online to apply for federal loans for grad school, he was impressed that the Web site made it abundantly clear he had to pay back the money. "It would likely be expensive, and there would be consequences if I didn't," he says. Unfortunately, he points out, the warning probably came too late. "You're filling out the form to get loans for a school you've already decided to go to."

That's why it's critical for families to run the numbers early to see how much it will cost to pay off college loans and to emphasize to students that the debt must be repaid. One rule of thumb is to limit borrowing to no more than your child's expected starting salary, or even less. has a simple loan-repayment calculator based on average starting salaries in various professions.

Nowadays, a number of loan-repayment programs tie payments to a student's income, which offers some relief to students in low-wage jobs (see 5 New Rules on Federal Student Loans). But ultimately the solution lies with a student's initial decision to choose an affordable education (see How to Limit Student Loan Debt and 4 Alternatives to a Four-Year College Degree).

Radical ideas. Making the right upfront decision is key to controlling your borrowing costs. But on a broader level, I think we also need out-of-the-box thinking to tackle spiraling college costs and student-loan debt.

President Obama has proposed a new college ratings system so that students and families can select schools that provide the best value. We're happy to say that Kiplinger already focuses on affordability in our annual rankings of the best values in private and public colleges. Among other measures, we include graduation rates, financial aid (both need-based and non-need-based) and average debt at graduation.

Other proposals have the potential to shake up the system. On the cost side, for example, Georgia Tech recently announced a three-year master's degree program in computer science that will cost less than $7,000. Classes will be taught entirely through massive open online courses, or MOOCs. MOOCs are catching on as a way of delivering a low-cost education, but the fact that a prestigious institution such as Georgia Tech is offering a degree at a sticker price far below traditional tuition could be a game-changer.

Skin in the game. On the loan side, a number of online money-lending platforms let students borrow now and repay a cut of their income later (see A New Way to Borrow Money). Two members of Congress have introduced a bill that would automatically enroll graduates in an income-based repayment plan and withhold payments automatically.

Glenn Harlan Reynolds, a law professor at the University of Tennessee, argues that schools themselves need skin in the game. He suggests, for example, that federal aid could be tied to an index, and that schools could be on the hook for a percentage of a loan if a student defaults.

That's a radical idea. But I can't help thinking that if, instead of readmitting my friend Debbie after her probation, her four-year school had told her politely that she would be more successful, both academically and financially, by remaining in community college, she wouldn't be in the fix she's in today.

Sunday, September 22, 2013

Top 10 Dividend Stocks To Own Right Now

Though ETFs have been on the scene for a number of years already, passively-managed funds continue to dominate the space ��as these products typically feature lower fees and more transparency. And though the indexes these ETFs track have evolved to utilize nearly every investment strategy, the methodologies behind these indexes are sometimes overlooked by investors.�John Jacobs, NASDAQ OMX Executive Vice President and head of NASDAQ OMX Global Indexes, recently took the time to discuss NASDAQ OMX�� lineup of compelling indexes and what investors should consider before choosing an index�.

ETF Database (ETFdb): NASDAQ OMX has recently made a big push into the indexing space ��what are some of the acquisitions/partnerships the company has undertaken?

John Jacobs (JJ):�NASDAQ OMX acquired the index business of Mergent, Inc., then owner of the Dividend AchieversTM Indexes, in December. With this acquisition, NASDAQ OMX Global Indexes became one of the world�� largest providers of dividend-themed indexes based on benchmarked assets. Assets under management of exchange-traded funds licensed by NASDAQ OMX Global Indexes increased at the time about 30% percent.

Top 10 Dividend Stocks To Own Right Now: Investors Real Estate Trust(IRET)

Investors Real Estate Trust, a real estate investment trust (REIT), engages in the ownership and operation of income-producing real estate properties in the United States. It owns multi-family residential properties and commercial office, medical, industrial, and retail properties located primarily in the upper midwest states of Minnesota and North Dakota. As of April 30, 2008, the company operated a real estate portfolio of 72 multi-family residential; 65 office; 48 medical; 17 industrial; and 33 retail properties. Investors Real Estate Trust has elected to be taxed as a REIT under the Internal Revenue Code of 1986. As a REIT, the trust is not subject to federal corporate income taxes, if it distributes at least 90% of its taxable income to its shareholders. The company was founded in 1970 and is headquartered in Minot, North Dakota with additional offices in Minneapolis, Minnesota, and Omaha, Nebraska; and Kansas City, Kansas, and St. Louis, Missouri.

Top 10 Dividend Stocks To Own Right Now: Northeast Utilities(NU)

Northeast Utilities, a public utility holding company, provides electric and natural gas energy delivery services to residential, commercial, and industrial customers in Connecticut, New Hampshire, and western Massachusetts. The company engages in the purchase, delivery, and sale of electricity; and owns and operates approximately 1,200 megawatts of primarily fossil-fueled electricity generation assets. As of December 31, 2010, it served approximately 1.2 million customers in 149 cities and towns in Connecticut; 497,000 retail customers in 211 cities and towns in New Hampshire; and 206,000 retail customers in 59 cities and towns in western Massachusetts. The company also operates a natural gas distribution system in Connecticut and serves approximately 206,000 customers in 71 cities and towns. It offers gas supply to commercial and industrial customers; and to residential customers for heating, hot water, and cooking needs, as well as provides gas transportation services t o commercial and industrial customers. In addition, the company offers electric transmission services. Northeast Utilities was founded in 1927 and is headquartered in Hartford, Connecticut.

Best Companies To Watch In Right Now: Star Gas Partners L.P.(SGU)

Star Gas Partners, L.P., through its subsidiaries, operates as a home heating oil distributor and services provider in the United States. It provides its services to residential and commercial customers to heat their homes and buildings. As of March 31, 2011, the company served approximately 408,000 full-service residential and commercial home heating oil, and propane customers. It also sold home heating oil, gasoline, and diesel fuel to approximately 40,000 customers. In addition, Star Gas Partners installed, maintained, and repaired heating and air conditioning equipment, as well as provided ancillary home services, including home security and plumbing to approximately 11,000 customers. Kestrel Heat, LLC operates as the general partner of the company. Star Gas Partners, L.P. was founded in 1995 and is headquartered in Stamford, Connecticut.

Top 10 Dividend Stocks To Own Right Now: Abbott Laboratories(ABT)

Abbott Laboratories engages in the discovery, development, manufacture, and sale of health care products worldwide. The company offers adult and pediatric pharmaceuticals for rheumatoid and psoriatic arthritis, ankylosing spondylitis, psoriasis, and Crohn's disease; dyslipidemia; HIV infection; prostate cancer, endometriosis and central precocious puberty, and anemia caused by uterine fibroids; respiratory syncytial virus; adult males who have low or no testosterone; secondary hyperparathyroidism; hypothyroidism; and pancreatic exocrine insufficiency, as well as anesthesia products. It also provides diagnostic products, such as immunoassay systems; chemistry systems; assays used for screening and/or diagnosis for drugs of abuse, cancer, therapeutic drug monitoring, fertility, physiological, and infectious diseases; instruments that automate the extraction, purification, and preparation of DNA and RNA from patient samples, and detect and measure infections agents; genomic-b ased tests; hematology systems and reagents; and point-of-care diagnostic systems and tests for blood analysis. In addition, the company offers a line of pediatric and adult nutritional products. Further, it provides coronary, endovascular, vessel closure, and structural heart devices, such as drug-eluting stent systems, coronary metallic stents, balloon dilatation products, coronary guidewires, vessel closure devices, carotid stent systems, percutaneous valve repair systems, and drug eluting bioresorbable vascular products. Additionally, the company provides blood glucose monitoring meters, test strips, data management software, and accessories for people with diabetes; and medical devices for the eye, including cataract surgery, lasik surgery, contact lens, and dry eye products, as well as branded generic pharmaceutical products. Abbott primarily serves retailers, wholesalers, hospitals, and health care facilities. Abbott was founded in 1888 and is headquartered in Abbott Park, Illinois.

Top 10 Dividend Stocks To Own Right Now: Medallion Financial Corp.(TAXI)

Medallion Financial Corp., through its subsidiaries, operates as a specialty finance company in the United States. The company engages in originating, acquiring, and servicing loans that finance taxicab medallions and various types of commercial businesses. It offers commercial loans to finance the purchase of the equipment and related assets necessary to open a new business, or the purchase or improvement of an existing business; asset-based loans to small businesses; and secured mezzanine loans to businesses in various industries, including manufacturing and various service providers. The company also raises deposits; originates consumer loans for the purchase of recreational vehicles, boats, motorcycles, trailers, and hearing aids; and conducts other banking activities. In addition, it provides other debt, mezzanine, and equity investment capital to companies in various industries. The company was founded in 1995 and is headquartered in New York, New York.

Top 10 Dividend Stocks To Own Right Now: Chevron Corporation(CVX)

Chevron Corporation, through its subsidiaries, engages in petroleum, chemicals, mining, power generation, and energy operations worldwide. It operates in two segments, Upstream and Downstream. The Upstream segment involves in the exploration, development, and production of crude oil and natural gas; processing, liquefaction, transportation, and regasification associated with liquefied natural gas; transportation of crude oil through pipelines; and transportation, storage, and marketing of natural gas, as well as holds interest in a gas-to-liquids project. The Downstream segment engages in the refining of crude oil into petroleum products; marketing of crude oil and refined products primarily under the Chevron, Texaco, and Caltex brand names; transportation of crude oil and refined products by pipeline, marine vessel, motor equipment, and rail car; and manufacture and marketing of commodity petrochemicals, plastics for industrial uses, and fuel and lubricant additives. It a lso produces and markets coal and molybdenum; and holds interests in 13 power assets with a total operating capacity of approximately 3,100 megawatts, as well as involves in cash management and debt financing activities, insurance operations, real estate activities, energy services, and alternative fuels and technology business. Chevron Corporation has a joint venture agreement with China National Petroleum Corporation. The company was formerly known as ChevronTexaco Corp. and changed its name to Chevron Corporation in May 2005. Chevron Corporation was founded in 1879 and is based in San Ramon, California.

Top 10 Dividend Stocks To Own Right Now: NextEra Energy Inc. (NEE)

NextEra Energy, Inc., through its subsidiaries, engages in the generation, transmission, distribution, and sale of electric energy in the United States and Canada. As of December 31, 2010, NextEra Energy had approximately 43,000 mega watts of generating capacity. The company involves in the generation of renewable energy from wind and solar projects. It also generates electricity through natural gas, nuclear, oil and coal, and hydro power plants. The company serves approximately 8.7 million people through approximately 4.5 million customer accounts in the east and lower west coasts of Florida. In addition, it leases wholesale fiber-optic network capacity and dark fiber to telephone, wireless carriers, Internet, and other telecommunications companies. The company was formerly known as FPL Group, Inc. and changed its name to NextEra Energy, Inc. in May 2010. NextEra Energy, Inc. was founded in 1984 and is headquartered in Juno Beach, Florida.

Top 10 Dividend Stocks To Own Right Now: Deswell Industries Inc.(DSWL)

Deswell Industries, Inc. engages in the manufacture and sale of injection-molded plastic parts and components, electronic products and subassemblies, and metallic molds and accessory parts for original equipment manufacturers and contract manufacturers. The company produces various plastic parts and components for the manufacture of consumer and industrial products, including plastic component of electronic entertainment products; cases for flashlights, telephones, paging machines, projectors, and alarm clocks; toner cartridges and cases for photocopy and printer machines; parts for electrical products, such as air-conditioning and ventilators; parts for audio equipment; cases and key tops for personal organizers and remote controls; double injection caps and baby products; parts for medical products comprising apparatus for blood tests; laser key caps; and automobile components. Its electronic products include audio equipment, such as digital audio workstation, digital or analogue mixing consoles, instrument amplifiers, signal processors, firewire/USB audio interfaces, keyboard controllers, and speaker enclosures; high end home theatre audio products comprising 7.1-channel audio-visual Hi-Fi stereo receivers-amplifiers; complex printed circuit board assemblies; and telecommunication products consisting of VoIP keysets for business communications. The company?s metal products include metallic molds and accessory parts used in audio equipment, telephones, copying machines, pay telephones, multimedia stations, automatic teller machines, and vending machines. In addition, it distributes audio equipment. The company sells its products in the United States, the People?s Republic of China, Hong Kong, Thailand, the United Kingdom, Holland, Norway, and Germany. Deswell Industries, Inc. was founded in 1987 and is based in Kowloon Bay, Hong Kong.

Top 10 Dividend Stocks To Own Right Now: ENSCO plc(ESV)

Ensco plc, together with its subsidiaries, provides offshore contract drilling services to the oil and gas industry. The company engages in the drilling of offshore oil and natural gas wells by providing its drilling rigs and crews under contracts with international, government-owned, and independent oil and gas companies. As of February 15, 2010, it owned and operated 42 jackup rigs, 4 ultra-deepwater semisubmersible rigs, and 1 barge rig. The company also has 4 ultra-deepwater semisubmersible rigs under construction. It operates in Asia, the Middle East, Australia, New Zealand, Europe, Africa, and North and South America. The company was formerly known as Ensco International plc and changed its name to Ensco plc in March 2010. Ensco plc was founded in 1975 and is based in London, the United Kingdom.

Top 10 Dividend Stocks To Own Right Now: Becton Dickinson and Company(BDX)

Becton, Dickinson and Company, a medical technology company, develops, manufactures, and sells medical devices, instrument systems, and reagents worldwide. The company?s BD Medical segment produces medical devices that are used in various healthcare settings. This segment?s products include needles, syringes, and intravenous catheters for medication delivery; prefilled IV flush syringes; syringes, pen needles, and other drugs to treat diabetes; prefillable drug delivery systems; anesthesia needles and trays; sharps disposal containers; and closed-system transfer devices. Its BD Diagnostics segment provides products for the safe collection and transport of diagnostics specimens, as well as instrument systems and reagents to detect various infectious diseases, healthcare-associated infections, and cancers. This segment?s products consist of integrated systems for specimen collection; safety-engineered blood collection products and systems; automated blood culturing systems; molecular testing systems; microorganism identification and drug susceptibility systems; liquid-based cytology systems for cervical cancer screening; rapid diagnostic assays; and plated media. The company?s BD Biosciences segment produces research and clinical tools that facilitate the study of cells and their components. This segment?s products comprise fluorescence-activated cell sorters and analyzers; monoclonal antibodies and kits for performing cell analysis; reagent systems for life science research; cell imaging systems; laboratory products for tissue culture and fluid handling; diagnostic assays; and cell culture media supplements for biopharmaceutical manufacturing. It markets its products through independent distribution channels and independent sales representatives to healthcare institutions, life science researchers, clinical laboratories, the pharmaceutical industry, and the general public. The company was founded in 1897 and is headquartered in Franklin Lakes, New Jersey.

Advisors' Opinion:
  • [By Ben Levisohn]

    Becton Dickinson (BDX) has gained 1.2% to $101.97 this morning after�Piper Jaffray�raised the stock to Overweight from Neutral. Analysts�William Quirk and�David Clair�explain why they’re optimistic about the medical technology company:

    Associated Press

    Observations from multiple diagnostic conferences all suggest significant interest in�microbiology investment. This interest spans track systems (Kiestra), new identification�technologies (Maldi/BioTyper) and Molecular (gram +/- assays). When considering�AST (antimicrobial susceptibility testing) recall from Siemens, we believe BD’s�microbiology business is poised to accelerate its performance over the next several years.�Combined with a delayed JNJ/Ypsomed pen needle launch and incremental European�safety adoption, we believe numbers for BD will continue to climb…

    They also raised their price target to $117 from $91.

    While Becton has gained today,�Johnson & Johnson�(JNJ) has dropped 0.6% to $88.50,�Medtronic�(MDT) has fallen 1%to $53.43,�Boston Scientific�(BSX) has declined 0.9% to $11.79 and Edwards Lifesciences (EW) is off 1.2% at $70.90.

Saturday, September 21, 2013

Don't Buy JPMorgan's Stock: Societe General

NEW YORK (TheStreet) -- This is a good time to buy shares of Bank of America (BAC) and Citigroup (C), but investors should steer clear of JPMorgan Chase (JPM) and Wells Fargo (WFC) for the time being, according to Societe General.

Societe General equity analyst Murali Gopal and his research team on Friday initiated their coverage of the "big four" U.S. banks.

Gopal rates Bank of America a "buy," with a $17 price target. "BAC is uniquely placed for sustained outperformance -- in the near term significant cost savings, additional reserve releases and a strong capital markets business will be supportive of earnings growth and improvement in [returns on tangible equity]," the analyst wrote in a note to clients. Gopal added that "Over the medium term, as short-term rates rise, the bank's strong retail branch network and core deposit base should boost top-line growth. Society General estimates Bank of America's operating earnings will grow from 1.01 a share this year to $1.37 in 2014 and $1.72 in 2015.

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Society General also rates Citigroup a "buy," with a $59 price target. The improvement in housing prices is a good sign for Citi Holdings, which is the company's subsidiary into which noncore assets have been placed to runoff. The rise in home prices "bodes well" for the release of loan loss reserves, which boosts operating earnings, and $6.4 billion of the reserves within Citi Holdings are tied to North American housing, according to Gopal. "Stronger US taxable earnings will be a larger driver of Deferred Tax Assets (DTA)," recapture, according to the analyst. Citigroup's DTA valuation allowance was roughly $45 billion at the end of the second quarter, and the company's earnings during the first half of 2013 were boosted by $1.3 billion in DTA recapture. Gopal estimates Citi's adjusted EPS will increase from $4.93 in 2013 to $5.64 in 2014 and $6.31 in 2015. For JPMorgan Chase, Society General's initial rating is a "hold." The company's operating performance should be "steady," however, "Rising investigations, litigation and regulatory scrutiny will take time to resolve, and should keep related costs elevated, but more importantly, curb investor sentiment," according to Gopal. Society General estimates JPM's EPS for 2013 will total $5.88, declining slightly to $5.85 in 2014 and increasing to $6.25 in 2015.

JPMorgan was hit early Thursday with $920 million in fines from four regulators over the "London Whale," hedge trading debacle in 2012. Later on Thursday, the Consumer Financial Protection Bureau said JPMorgan had already refunded $309 million to 2.1 customers, with the Office of the Comptroller of the Currency also assessing a $60 million fine, spring from the two regulators' combined investigation of its "illegal credit card practices."

Gopal also rates Wells Fargo a "hold," citing "near-term headwinds," with "little room for improvement." Wells Fargo for years has been the strongest earnings performer among the "big four," as measured by returns on average assets and equity. But with the leading market share among U.S. mortgage lenders, the bank is facing a significant revenue decline as higher long-term interest rates lead to significantly lower mortgage refinance volume.

"Spread revenues along with mortgage banking comprise roughly two-thirds of the top line," for Wells Fargo, according to Gopal. And with the Federal Reserve likely to keep the short-term federal funds rate in a range of zero to 0.25% for an extended period, the bank could be waiting for years for the parallel rise in rates it needs for a significant boost to net interest margins and net interest income.

JPMorgan continues to be the cheapest on a forward price-to-earnings basis among the big four, despite the company's solid earnings performance over the past several years. JPM reported its third record annual profit of The shares closed at $52.75 Thursday and traded for 8.7 times the consensus 2014 EPS estimate among analysts polled by Thomson Reuters. The next cheapest among the group is Citigroup, with shares closing at $51.95 Thursday and trading for 9.3 times the consensus 2014 EPS estimate of $5.56. Bank of America's shares closed at $14.61 Thursday and traded for 10.7 times the consensus 2014 EPS estimate of $1.36. Wells Fargo has a similar valuation, with the shares closing at $42.96 Thursday and trading for 10.7 times the consensus 2014 EPS estimate of $4.01. RELATED STORIES: Jamie Dimon Unlikely to Face SEC Charges 'Historic' Admission to SEC Won't Help JPMorgan Plaintiffs JPMorgan Skewered for 'Illegal Credit Card Practices' JPMorgan Slapped with $920 Million in 'London Whale' Fines Wells Fargo Continues Mortgage Staff Layoffs as Refinancing Volume Drops -- Written by Philip van Doorn in Jupiter, Fla. >Contact by Email. Follow @PhilipvanDoorn

Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.

Thursday, September 19, 2013

FactSet Q4 Profits Rise 5% on Higher Revenues; Adjusted EPS Misses Estimates (FDS)

Before the opening bell on Tuesday, financial data provider FactSet Research Systems Inc. (FDS) reported a 5% year-over-year increase in fourth quarter profits, which was aided by a 5.7% rise in revenues. Though these revenues were able to top Wall Street analysts’ estimates, the company’s adjusted earnings missed views.

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The Norwalk, Connecticut-based company posted a fourth quarter net income of $51.0 million, or $1.16 per share, up slightly from the $48.5 million, or $1.08 per share, earned in the same period a year ago.

On an adjusted basis, FactSet’s quarterly net income came in at $52.84 million, or $1.20 per share. This adjusted net income excludes an after-tax charge of $1.84 million, or 4 cents per share. According to analysts polled by Thomson Reuters, FactSet was expected to earn an adjusted $1.21 per share in the fourth quarter.

The company’s quarterly revenues advanced to $219.33 million in the most recent quarter, up 5.7% from the $207.66 million posted in the fourth quarter of 2012. On average, analysts were expecting the company to see $218.93 million in revenues for the quarter.

Looking forward, FactSet said it expects earnings to be between $1.21 and $1.24 in the first quarter of fiscal 2014. Furthermore, first quarter revenues are expected to come in between $222 million and $225 million. Analysts, on average, believe that FDS will earn $1.23 per share on revenues of $225.04 million in the first quarter of 2014.

FactSet Research shares were down $1.10, or 0.98%, during pre-market trading on Tuesday. The stock is up 27.47% year-to-date.

Wednesday, September 18, 2013

Today's Market: Telecom M&A Heating Up And Other Names Outperforming

Today is the big Federal Reserve decision and we will see if they taper or not, and if they do whether that figure exceeds the expected range of $10-15 billion. The economy has given us some poor data in recent weeks and if we do happen to see the Fed decrease their activity in the fixed income markets then we would hope that they would also provide language which would enable them to continue at the new monthly rate should numbers continue to weaken.

Look for markets to search for direction before 2:00 P.M. but to see a lot of volatility following the rate decision and then Bernanke's press conference which starts at 2:30 P.M.

Chart of the Day:

Many are saying that even with the Fed Tapering that the ten year treasury will remain below 3% for the time being as most, if not all, of the expected move is priced in already.

(click to enlarge)

Source: Yahoo Finance

We have economic news today and it is as follows:

MBA Mortgage Index (7:00 a.m. ET): Est: N/A Actual: 11.2%Housing Starts (8:30 a.m. ET): Est: 910kBuilding Permits (8:30 a.m. ET): Est: 943kCrude Inventories (10:300 a.m. ET): Est: N/AFOMC Rate Decision (2:00 p.m. ET): Est: 0.25%

Asian markets finished mixed today:

All Ordinaries -- down 0.28%Shanghai Composite -- down 0.29%Nikkei 225 -- up 1.35%NZSE 50 -- up 0.12%Seoul Composite -- down 0.39%

In Europe, markets are also mostly higher this morning:

CAC 40 -- up 0.57%DAX -- up 0.47%FTSE 100 -- up 0.15%OSE -- down 0.24%


The news we found most interesting yesterday was the story regarding AT&T (T) that broke during the session that they were looking to offload their tower assets. The deal could fetch as much as $5 billion and many are looking at this as a precursor to a much larger deal where AT&T would look to expand overseas via a large acquisition.

AT&T shares spiked on the news of a po! ssible sale of their towers while American Tower and Crown Castle both retreated on the news.

(click to enlarge)

Source: Yahoo Finance

The two names which come to mind as potential buyers are American Tower (AMT) and Crown Castle International (CCI) as the assets would be natural for them to purchase. It would be a large transaction though which would be about 1/6th the current market cap of American Tower and 1/4th the size of Crown Castle's market cap. Another possible buyer could be a hedge fund, and although the are few names out there specializing in this industry at the end of the day it is a real estate game and all about the leverage and cash flows. Readers should watch this story because if AT&T does in fact sell its towers it might be set to make a move on the chess board.

Consumer Goods

We continue to watch this Herbalife (HLF) story, merely out of amusement and curiosity although there is a great deal to be learned from here. This battle of the hedge fund titans is turning out to be everyone against Ackman and with Herbalife having hit a new all-time high at $73.91/share yesterday it is blatantly obvious that Mr. Ackman is losing this short bet. Our guess is that most of the shorts who piled on along with Mr. Ackman have long since closed their positions, undoubtedly lending a hand to the recent run-up, and that most of the attention is not upon the company's results so much as upon the results of Mr. Ackman's position and hedge fund in general. He has sold some winners recently and if that was to take some money off of the table or to cover outflows to clients we do not know, but the worse his Herbalife trade performs the more transactions like that we will see (selling off winners rather than admit defeat).

Grocery Stores

In our article on September 16th (located here) we said we were still bullish the grocers and t! hought th! at Safeway (SWY) would continue to be a winner along with the industry. Apparently we were not alone in that thinking as the company announced yesterday that they were putting in place a poison pill which will be good for one year in order to keep anyone from building a stake larger than 10% in the company. The move was prompted by Jana Partners taking a 6.2% stake in the company and the hope of management is that this one year period will either cool the heals of Jana or allow the two parties to work together rather than going hostile. We personally dislike poison pills, but in this case it should not be seen as a negative as we doubt anyone was considering assembling a stake at or above that 10% level. Investors cheered the news and sent shares higher by $2.75 (9.74%) to close at $30.99/share on extremely heavy volume of 29.8 million shares.

Source: Today's Market: Telecom M&A Heating Up And Other Names Outperforming

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. 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...)

Monday, September 16, 2013

OECD: Who Needs China?

The Organization for Economic Co-operation and Development (OECD) released its “Interim Economic Assessment” for 2013. The agency expects modest growth in global gross domestic product (GDP), a point of view held by many economists. What is unexpected in the report is that its authors downplay the importance of China. It is no longer the most critical aspect of worldwide expansion.

The document was marked by two statements:

Growth in the second quarter in the major advanced economies as a whole was stronger than forecast. The United States continued to recover, despite headwinds from sharp fiscal consolidation,and the Japanese economy rebounded in the first half of the year under more expansionary policies. Euro area GDP in the second quarter bounced back from a period of exceptional weakness in late 2012 and the first quarter of 2013, ending six quarters of contraction, although several countries remained in recession. In the United Kingdom, growth picked up momentum through the first half of the year.

Based on recent indicators, growth for the major advanced economies as a whole in the second half of 2013 is forecast to continue at the improved rate seen in the second quarter.


Growth in China has seemingly already passed the trough and looks set to recover further in the second half of 2013, although the expansion is still expected to be more subdued than in earlier cycles.

In other words, China will no longer grow at double-digit rates. One probable cause is that its middle class has stopped expanding at earlier rates. This likely is because its manufacturing activity has slowed, as recent PMI data show. Also, wages have not spiked up at past rates, probably because manufacturing growth inside China will not support it. Consumer activity by China’s huge middle class, often numbered at 250 million, will not offset a drop in exports.

In the advanced economies, the damage of the recession was historically severe. However, in the eyes of the OECD, America may stage a significant recovery, if it can dodge headwinds. The U.S. deficit has to be counted among these because it has caused a move toward government austerity, which could slow GDP as a whole. On the other side of the argument is ongoing quantitative easing (QE) from the Federal Reserve, which may drop off, but will be a major economic force for at least a year. Unemployment remains too high but continues to come down. European Union improvement also will help export activity.

Europe has started to escape the darkest economic period of the past eighty years. The recovery has centered in Germany, which because of its size is critical. Even Spain has shown a flicker of improvement. The situations in France and Italy may be relatively bad, but they have not gotten worse in the past month or so. Government policy in Japan, particularly the Bank of Japan, already has begun to shake the nation from its GDP growth doldrums.

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The prescriptions the OECD has given for a full recovery worldwide look very like those of the International Monetary Fund (IMF). Government reforms must be put in place to improve employment and prevent another financial meltdown. The benefits of austerity were never present. Economic stimulus is a much more likely path to recovery. Put another way, politicians will decide the improvement of global GDP more than bankers or businesses. The OECD’s headline conclusions indicate as much:

While the improvement in growth momentum in OECD economies is welcome, a sustainable recovery is not yet firmly established and important risks remain. It is necessary to continue to support demand, including through unconventional monetary policies, in order to minimise the risk of the recovery being derailed. Meanwhile, both advanced and emerging economies face the challenge of slower trend growth.Therefore, reforms to boost growth, rebalance the global economy and reduce structural impediments to job creation re main vital

The assessment may not be unique, but the modest presence of China in the process is.

Saturday, September 14, 2013

This 'Unusual' Stock Could Jump 50%

If you enjoy the finer things in life, then you'll love the action taking place in the specialty retail market. Great paintings, sculptures and fine jewelry are not only to be appreciated, but they can make for great investments as well.  

We've already seen one shake-up in the specialty retail industry this year. Billionaire John Paulson is taking famous piano maker Steinway Musical Instruments private for $512 million. The bidding war between Paulson, private equity firm Kohlberg & Co. and Samick Musical Instruments has driven Steinway's stock up 90% this year.

While Paulson is a fan of pianos, it's no secret that billionaire and activist investor Daniel Loeb loves art. He is said to have various pieces of art hanging in his Park Avenue office and enjoys going to art shows.

Loeb and his Third Point hedge fund are coming off one of their biggest wins after helping turn around Yahoo (Nasdaq: YHOO). Loeb sold two-thirds of his position back in July when the stock was trading around $25, locking in a cool half-billion dollars in profits.

Now Loeb's looking to put that capital to work in other markets, with the art market being a perfect candidate. Loeb and his Third Point hedge fund have started their latest activist campaign with leading auction house Sotheby's (NYSE: BID). Loeb joins fellow activist investor Marcato Capital in the stock.

Marcato now owns 6.6% of the company, and Third Point owns 5.7%. Third Point and Marcato join billionaire and notable activist investor Nelson Peltz's Trian Fund Management, which owned 3% of Sotheby's as of the end of the second quarter.

  Wikipedia/Jim Henderson  
  Sotheby's headquarters in New York City.

So what are these billionaires and activists expecting to get out of Sotheby's? Are they after the real estate value? Is the company grossly undervalued? Are they playing the expected rebound in art sales? Will they push the company to boost shareholder returns?

The hedge funds involved have kept their public statements vague, and while none of the activists involved has outlined his plans for the stock, it's safe to say there is value in the company that needs unlocking.

Part of Sotheby's moat is its unrivaled name recognition. For those who don't know, Sotheby's is an auctioneer of specialty retail items, which includes fine art, antiques, jewelry and other collectible items. Its roots date to 1744, when it was founded in London.

With the industry being niche, and the fact that Sotheby's is the only major publicly traded auction house, relative valuation is next to impossible. However, from a historical valuation perspective, Sotheby's does not look all that appealing. The stock is trading at near-decade highs on price-to-earnings (P/E), price-to-sales and price-to-book bases.

Thus, there will need to be a catalyst to drive the stock higher. Here are a few possibilities these activist investors could be looking at to unlock value.

Economic Expansion
Sothebys took quite a nasty spill along with the broader economy back in 2008, trading below $9 per share before rebounding to the over $45 it trades at today. As income levels rise and the broader economy strengthens, the demand for the finer things in life, such as art, should also rebound. The company's underlying reliance on the economy is exhibited by the stock's 2.7 beta.

Although the expected boost in sales and earnings, due to a rebounding economy, will likely boost the share price, that's not the sole reason for the activists' investing. Activists generally get involved for something more than market-moving events. They look to generate their own alpha through management shakeups, strategy realignment, balance sheet restructuring, and so on.

Real Estate 
The big news of late, in addition to the activist campaigns, is that Sotheby's is planning to sell its New York headquarters. Stifel Nicolaus has said that those real estate properties could hold unrealized value for Sotheby's, noting that the New York and London properties might be worth $300 million more than is carried on the balance sheet.

It's no secret that one of the activists involved in Sotheby's, Marcato Capital, specializes in real estate investments. That firm may be looking to get its hands on any profits from Sotheby's real estate and return them to shareholders.

Margin Expansion
Loeb and his activist buddies may believe Sotheby's can expand its margins to historic levels. The company's trailing 12-month margin on earnings before taxes (EBT) is 18.4%, while in previous years it has had margins between 27% and 30%. If we think about where earnings would be if the EBT margin were 27%, there is definitely upside here. With a 27% EBT margin, earnings could easily be nearly 50% higher than current levels; assuming Sotheby's keeps its premium 31 P/E multiple, the price target would be $68.

Boosting Shareholder Value
The activists could also be looking at Sotheby's cash on hand. The company has more than $10 in cash per share and could increase its modest 0.8% dividend yield or boost share repurchases. Its debt-to-equity ratio is down to 0.5 as of last quarter, compared with 0.9 in 2009. Sotheby's recently said it was exploring new ways to boost shareholder value, which could include a higher dividend or share buybacks.

Whatever the reasoning behind Loeb's investment, you'd better believe the upside will be realized in a short period. Loeb isn't necessary a long-term investor, rather an opportunist. So the question remains whether he'll treat this like a short-term investment, as was the case with Yahoo, or an ultra-short-term investment, like his stake in Herbalife (NYSE: HLF). 

Sotheby's has only five analysts following it -- compared with the 48 following Apple (Nasdaq: AAPL) -- so it can be tough to get information on the company. But investors can use this to their advantage: Despite the fact that Sotheby's has three activist investors collectively owning 15% of the company, the stock is flat since Loeb's involvement. 

Sotheby's also offers investors downside protection given its inherent moat as the only major publicly traded auction house. The other major player in the $8 billion art dealership industry, Christie's International, is private. Sotheby's other moatlike characteristics include its cash-generating capabilities and strong liquidity. Over the trailing 12 months, Sotheby's managed to generate $237 million in free cash flow. That's $6.50 a share, or an 8.7% free cash flow yield.

Risks to consider: The biggest risk is another pullback in the economy. Investors should also consider the risk that the activist investors announce a sound strategy for unlocking value, sending the stock surging, but ultimately their plans fail, sending the stock plunging.

Action to take --> Get into Sotheby's before the real bidding process begins. If the activists get their way, there could easily be more than 50% upside to the stock over the next couple of years. The stock has a solid moat and business model that makes the downside limited. The company's balance sheet and free cash flow are both relatively solid.

P.S. -- Activist investing is a bit different from buy and hold, and isn't suitable for every investor. Owning "Forever" stocks is, however, for everyone. These companies have large moats that allow them to dominate their industries and as a result, you can add them to your portfolio and simply forget about them. To learn the names and ticker symbols of these stocks -- click here.

Friday, September 13, 2013

6 Stocks Moving on Unusual Volume

DELAFIELD, Wis. (Stockpickr) -- At Stockpickr, we track daily portfolios of stocks that are the biggest percentage gainers and the biggest percentage losers.

Stocks that are making large moves like these are favorites among short-term traders because they can jump into these names and try to capture some of that massive volatility. Stocks that are making big-percentage moves either up or down are usually in play because their sector is becoming attractive or they have a major fundamental catalyst such as a recent earnings release. Sometimes stocks making big moves have been hit with an analyst upgrade or an analyst downgrade.

Regardless of the reason behind it, when a stock makes a large-percentage move, it is often just the start of a new major trend -- a trend that can lead to huge profits. If you time your trade correctly, combining technical indicators with fundamental trends, discipline and sound money management, you will be well on your way to investment success.

With that in mind, let's take a closer look at a several stocks under $10 that are making large moves to the upside today.

pSivida (PSDV)

This company develops tiny, sustained-release, drug delivery products designed to deliver drugs at a controlled and steady rate for months or years. This stock closed up 6.6% to $4.04 in Thursday's trading session.

Thursday's Range: $3.78-$4.12

52-Week Range: $1.17-$4.12

Thursday's Volume: 785,000

Three-Month Average Volume: 180,467

From a technical perspective, PSDV ripped higher here and broke out above some near-term overhead resistance at $3.83 with heavy upside volume. This stock also flirted with another breakout above its former 52-week high at $4.08, before it closed just below that level at $4.12. This stock has been uptrending strong for the last month, with shares moving higher from its low of $3.15 to its intraday high of $4.12. During that move, shares of PSDV have been consistently making higher lows and higher highs, which is bullish technical price action.

Traders should now look for long-biased trades in PSDV as long as it's trending above support at $3.80 or above its 50-day at $3.59, and then once it sustains a move or close above Thursday's high of $4.12 with volume that hits near or above 180,467 shares. If we get that move soon, then PSDV will set up to enter new 52-week high territory, which is bullish technical price action. Some possible upside targets off that move are its next major overhead resistance levels at $4.81 to $5.23. Any high-volume move above those levels could easily send PSDV towards $6.

Pain Therapeutics (PTIE)

This is a biopharmaceutical company that develops novel drugs. It has four drug candidates in clinical programs, including Remoxy, Oxytrex, PTI-202 and a novel radio-labeled monoclonal antibody to treat metastatic melanoma. This stock closed up 0.75% to $2.70 in Thursday's trading session.

Thursday's Range: $2.59-$2.73

52-Week Range: $2.15-$5.86

Thursday's Volume: 165,000

Three-Month Average Volume: 399,812

From a technical perspective, PTIE moved modestly higher here right above its 50-day moving average of $2.48 with lighter-than-average volume. This move is quickly pushing shares of PTIE within range of triggering a near-term breakout trade. That trade will hit if PTIE manages to take out its 200-day moving average of $2.81 and then once it clears some more near-term overhead resistance levels at $2.84 to $2.90 with high volume.

Traders should now look for long-biased trades in PTIE as long as it's trending above its 50-day at $2.48, and then once it sustains a move or close above those breakout levels with volume that hits near or above 399,812 shares. If that breakout triggers soon, then PTIE will set up to re-test or possibly take out its next major overhead resistance level at $3.45. Any high-volume move above $3.45 will then give PTIE a chance to re-fill some of its previous gap down zone from May that started above $5.

Conatus Pharmaceuticals (CNAT)

This company is engaged in the development and commercialization of novel medicines to treat liver disease. Its lead compound, emricasan, is applied in the treatment of chronic liver disease and acute exacerbations of chronic liver disease. This stock closed up 5.6% to $9.19 in Thursday's trading session.

Thursday's Range: $8.80-$9.46

52-Week Range: $8.26-$11.24

Thursday's Volume: 41,000

Three-Month Average Volume: 133,582

From a technical perspective, CNAT jumped higher here right above some near-term support at $8.51 with lighter-than-average volume. This move is quickly pushing shares of CNAT within range of triggering a major breakout trade. That trade will hit if CNAT manages to take out some near-term overhead resistance levels at $9.45 to $9.60 and then once it clears more resistance at $9.72 with high volume.

Traders should now look for long-biased trades in CNAT as long as it's trending above Thursday's low of $8.80, and then once it sustains a move or close above those breakout levels with volume that hits near or above 133,582 shares. If that breakout hits soon, then CNAT will set up to re-test or possibly take out its next major overhead resistance level at $11.

China Recycling Energy (CREG)

This company engages in the recycling energy business, providing energy savings and recycling products and services. This stock closed up 12.5% to $2.42 in Thursday's trading session.

Thursday's Range: $2.15-$2.49

52-Week Range: $0.78-$2.49

Thursday's Volume: 355,000

Three-Month Average Volume: 95,671

From a technical perspective, CREG ripped sharply higher here right off its 50-day moving average of $2.12 with heavy upside volume. This move briefly pushed shares of CREG into breakout territory, since the stock took out some near-term overhead resistance at $2.45. Shares of CREG closed just below that breakout level at $2.42 with volume that was well above its three-month average action of 95,671 shares.

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Traders should now look for long-biased trades in CREG as long as it's trending above its 50-day at $2.12, and then once it sustains a move or close above Thursday's high of $2.49 with volume that hits near or above 95,671 shares. If we get that move soon, then CREG will set up to re-test or possibly take out its next major overhead resistance level at $3.50.

Meru Networks (MERU)

This company provides a virtualized wireless LAN solution that optimizes the enterprise network to deliver the performance and operational simplicity of a wired network, with the mobility. This stock closed up 1.9% to $3.68 in Thursday's trading session.

Thursday's Range: $3.52-$3.69

52-Week Range: $2.06-$6.96

Thursday's Volume: 90,000

Three-Month Average Volume: 167,439

From a technical perspective, MERU jumped modestly higher here right off some near-term support at $3.50 with lighter-than-average volume. This stock has been trending sideways for the last month, with shares moving between $3.40 on the downside and $3.75 on the upside. Shares of MERU are now starting to move within range of triggering a breakout trade above the upper-end of its recent sideways trading chart pattern. That trade will hit if MERU manages to take out some near-term overhead resistance at $3.75 and then once it clears its 50-day at $3.95 and its 200-day at $4.07 with high volume.

Traders should now look for long-biased trades in MERU as long as it's trending above some key near-term support at $3.40, and then once it sustains a move or close above those breakout levels with volume that hits near or above 167,439 shares. If that breakout triggers soon, then MERU will set up to re-test or possibly take out its next major overhead resistance levels at $4.75 to $5.33.

TravelCenters LLC (TA)

This company operates and franchises travel centers along the U.S. interstate highway system. Its products and service include diesel fuel, gasoline, truck repair and maintenance services and restaurants. This stock closed up 2.8% to $8.23 a share in Thursday's trading session.

Thursday's Range: $7.92-$8.39

52-Week Range: $4.18-$12.50

Thursday's Volume: 322,000

Three-Month Average Volume: 358,159

From a technical perspective, TA trended modestly higher here right off its 200-day moving average of $8 with decent upside volume. This stock recently gapped down sharply in August from $11.29 to under $8 with heavy downside volume. Following that gap, shares of TA went on to make a new low at $7.06. Shares of TA have now started to rebound sharply off that $7.06 low and it's now quickly moving within range of triggering a near-term breakout trade. That trade will hit if TA manages to take out some near-term overhead resistance at $8.59 to its 50-day at $9.11 with high volume.

Traders should now look for long-biased trades in TA as long as it's trending above its 200-day at $8.80 or above more near-term support at $7.50, and then once it sustains a move or close above those breakout levels with volume that hits near or above 358,159 shares. If that breakout hits soon, then TA will set up to re-test or possibly take out its next major overhead resistance level at $9.50. Any high-volume move above $9.50 will then give TA a chance to re-fill its previous gap down zone from August that started at $11.29.

To see more stocks that are making notable moves higher today, check out the Stocks Under $10 Moving Higher portfolio on Stockpickr.

-- Written by Roberto Pedone in Delafield, Wis.

RELATED LINKS: >>5 Tech Stocks Spiking on Big Volume >>5 Stocks Setting Up to Break Out >>4 Red-Flag Stocks to Sell This Fall


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

Roberto Pedone, based out of Delafield, Wis., is an independent trader who focuses on technical analysis for small- and large-cap stocks, options, futures, commodities and currencies. Roberto studied international business at the Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany. His work has appeared on financial outlets including and You can follow Pedone on Twitter at or @zerosum24.

Monday, September 9, 2013

In India, Toilet Paper Becomes More Valuable Than the Rupee

India is slowly, or rapidly, becoming a complete financial disaster. Growth has slowed and the nation is trying to do what it can to fight inflation while still trying to juice up the economy. India is one of the great BRIC emerging market nations, but it is not living up anywhere close to its potential. So, the question is, what can they do now that the rupee is hitting yet another all-time low?

Wednesday’s closing levels in India should alarm investors of emerging markets and developed markets alike. The Hindustan Times confirmed that the rupee at 68.80 is the lowest official close. Some are trying to blame the possibility of war or military conflict in Syria, but this one-way ticket to financial hell in India is more of a unique situation than it is a global one.

Even the BSE Sensex, what used to be known as the Bombay Stock Exchange, has now suffered another 500 point plunge before recovering. We recently warned that emerging market investors would try and try to remain patient, up to a point, but capital is exiting the nation rapidly and investors have decided for now to not allocate new capital into India.

Calling a bottom based on technicals and oversold sentiment is easier to do in developed markets, but many investors do not give the same feelings in emerging markets because they want to enter these markets when the fundamentals merit a long-term investment. Most longer-term investors and traders do not enter emerging markets for a quick in-and-out trade of a few percent, but rather for serious gains over a longer period. The situation is bad enough that trying to be a bottom fisher may simply resemble being a bottom sniffer.

India is a market and economy with great promise. Its growth generally rivals that of China and its population is over 1.2 billion. It is also a young population, and one that is still growing. Unfortunately, its policies are not working and its infrastructure is simply not up to date in a manner that can support its full potential growth rate ahead. And at the end of the day, the country simply has to develop internal growth, as it cannot simply rely on being an outsourced-IT and outsourced call center nation for the rest of the world.

We previously said that the Indian rupee is becoming worth less than the paper it is printed on. Unfortunately, toilet paper is holding its value in dollars better than the nation’s currency. The WisdomTree Indian Rupee (NYSE: ICN) hit a new low of $17.42 and the exchange-traded product is down 2.6% on last look. Its price chart looks like a downhill ski slope, with the end being a cliff rather than the ski lodge.

WisdomTree India Earnings Fund (NYSEMKT: EPI) is down yet another 2.7% at $13.05, and it hit a new low of $13.00 on Wednesday against a high of $20.50. The PowerShares India (NYSEMKT: PIN) is down another 2.5% at $13.54, and it hit a new low with its 52-week range now at $13.50 to $19.66. The India Fund Inc. (NYSE: IFN) is a closed-end fund rather than an exchange traded fund (ETF), and it is down almost 1.75% at $16.95, with its shares hitting a new multiyear low of 416.88, against a 52-week high of $24.10.

Market Vectors India Small-Cap ETF (NYSEMKT: SCIF) is down almost 3% at $22.38, and the new low was put in today, with its 52-week range now being $22.25 to $46.60. This one is now down over half from its high and without any extreme leverage other than holding smaller stocks.

If good old regular emerging stock market losses are not daring enough for you, there is the triple-leverage suicide show for true gluttons for punishment. The Direxion Daily India Bull 3X Shares (NYSEMKT: INDL) is down another 7.5% to $27.62. and its new 52-week range is $27.20 to $99.20. Imagine an ETF with leverage so high that you can take losses of greater than 70%, and that is even after the fund announced a reverse split effective as of August 20.

Here is why there is so much promise in India. GDP growth had averaged about 7% since 1997, but now India's growth is slowing down to what might as well be recessionary. Its localized inflation seems to be a mystery to outsiders when you consider that it implemented reforms and deficit reduction measures to reverse its slowing growth. The nation’s gross domestic product was $4.76 billion in 2012 on a purchasing power parity basis, making it the fourth largest economy in the world with some 6.5% growth.

We previously noted, indicating levels right around now, that if India’s stock market and currency were to fall another 10% or 15% then the foreign capital outflows might create true economic and market panic. That is the risk right now, so things either are going to suddenly get much better with a new set of policies or India is about to jump off the cliff.

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See also: Can Raghuram Rajan save India?

Unfortunately, emerging market investors now have to wade through territory that they might have only worried about back in our own recession. It is sad to report that the BRIC nations may just be the new PIIGS. It is a sad day when owning toilet paper is better than owning paper money in a country.