Saturday, November 30, 2013

The Biggest Hazard of Being a Cash-Rich Company

The trend of companies in America hoarding cash keeps growing.

The 10 U.S. companies with the most cash reported a combined $540 billion in cash, cash equivalents, and short-term investments in their last quarterly reports. That's up nearly 3.7% in just the last quarter.

These cash hoards are why activist investors like Carl Icahn have been pushing companies' boards to share their wealth with stockholders.

In an October letter, Icahn called for tech giant Apple Inc. (Nasdaq: AAPL) to begin a $150 billion share buyback program. According to its Q3 earnings release on Sept. 28, Apple currently holds $40.4 billion in cash, cash equivalents, and short-term investments. That, according to Icahn, makes Apple ripe for a major buyback.

And that doesn't even count Apple's overseas holdings or other current assets.

The $40.4 billion Apple owns is huge, but that's only good for No. 5 on our list of top cash-rich companies.

Here's the list of top 10 "cash-rich" companies in the S&P 500, based on cash, cash equivalents, and short-term investments, plus how they used the cash they did spend:

General Electric Co. (NYSE: GE) reported cash and cash equivalents of $130.3 billion in September 2013, down slightly from $132.4 billion in June and $138 billion in March. Currently, GE offers its shareholders a dividend of $0.76 per year, or 2.8%. Early in 2013, it was reported that GE planned on buying back $10 billion of its stock from investors. The buyback was prompted by GE selling 49% stake in NBC Universal to Comcast Corp in March. In April, GE acquired the Texas-based oil company Lufkin Industries for $3.3 billion. Microsoft Corp. (Nasdaq: MSFT) had a total of $80.6 billion in cash and short-term investments at the end of September. This was the fourth consecutive quarter of growth for the company that reported $77 billion in June, $74.4 billion in March, and $68.2 billion in December 2012. MSFT provides its shareholders with a 3% dividend, or $1.12 per year. In September, MSFT made headlines for its $40 billion stock buyback and 22% dividend increase. In the same month, Microsoft completed a $7.2 billion acquisition of Nokia Corp.'s (NYSE: NOK) cellphone business. Google Inc. (Nasdaq: GOOG) is third with a cash and short-term investment hoard of $56.4 billion as of September. Google is another company that has added to its cash total in recent quarters, reporting $54.3 billion in June and $50.0 billion in March. Despite all that cash, GOOG does not issue a dividend and has never offered a shareholder buyback. The search engine mogul has a long history of acquisitions, and its purchase of Israeli navigation software Waze, for just shy of $1 billion in June 2013, was its largest in several years. Cisco Systems Inc. (Nasdaq: CSCO) had $50.5 billion in its July statement, compared to $47.3 billion and $46.3 billion in the previous two quarters. Cash-rich Cisco uses part of that money to offer shareholders a quarterly dividend of $0.17. However, CSCO recently offered a buyback of just $2.8 billion, which was the smallest buyback the company has offered in 12 years. Since June, Cisco has acquired Composite Software Inc., Sourcefire, WHIPTAIL, and Insieme Networks. Apple Inc. (Nasdaq: AAPL) has a cash pile of $40.4 billion as of September. While that total was good for No. 5 on the list, it was down from the $42.5 billion that AAPL had reported in the previous quarter. The tech giant doled out a dividend of $12.20 last year, good for a 2.3% yield. AAPL is currently in the middle of $60 billion buyback program, and the company bought back more than $16 billion worth of shares in the June quarter alone. In terms of acquisitions, AAPL has been busy since August purchasing tech companies Passif Semiconductor,, and AlgoTrim. Oracle Corp. (NYSE: ORCL) is a major software company that is sitting on a major lump of cash. In its August report, ORCL had approximately $39 billion in cash and short-term investments. This was a $7 billion increase from its previous quarter report of $32.2 billion. Oracle decided to double its dividend in June, to $0.12 per quarter. Despite the bump, shareholders still see a dividend yield of 1.4%. At the same time, the software giant announced a $12 billion buyback program. Like other major tech companies, Oracle has remained active on the acquisitions front, purchasing telecom hardware/software company Avaya, cloud-computing company Compendium, and cloud-based software company BigMachines since October. Berkshire Hathaway Inc. (NYSE: BRK.A) not surprisingly owns a massive amount of cash, with a total of $42 billion reported in September. This was up from a June total of $35.6 billion, but down from a March total of $49 billion and a December 2012 total of $46.9 billion. BRK.A's latest buyback was in December 2012 when the company purchased $1.2 billion worth of its stock. Berkshire Hathaway does not pay a dividend. In its most recent acquisition, Berkshire Hathaway's Marmon Group purchased a beverage dispensing company from IMI Plc for $1.1 billion in October. Ford Motor Co. (NYSE: F) held a total of $37.5 billion in cash and short-term investments this September, up from $36.6 billion in June and $34.3 billion in March. Ford provides its shareholders with a $0.10 quarterly dividend, or 2.4%. Ford has remained quiet in terms of mergers and acquisitions and has not offered a share buyback program. Pfizer Inc. (NYSE: PFE) reported cash and short-term investments of $33.6 billion in its July statement, down from $35.3 billion in March and up from $32.6 billion in December 2012. The biopharmaceutical firm gives its investors a dividend of $0.96 annually, or 3.1%. This past June, Pfizer announced a $10 billion buyback program, which was the fourth major share repurchase for the company in the past several years. PFE had been in discussions to acquire Onyx Pharmaceuticals Inc. (Nasdaq: ONXX) in July, but a deal was never made. General Motors Co. (NYSE: GM) rounds out the list of cash-rich companies with a total of $29.5 billion reported in September. This total marked an improvement from $26.9 billion in June, and $27.8 billion in March. Unfortunately for investors, GM does not pay a dividend, despite the huge cash hoard. In December 2012, GM announced a share buyback program of $5.5 billion from the U.S. Treasury. In September, Fiat agreed to purchase GM's 50% holding in the two companies' shared venture, VM Motori.

Earlier this year, Money Morning's Executive Editor William Patalon III detailed how a push from activist investors like Icahn can affect cash-rich companies like AAPL - which is up about 21% since Patalon's analysis.

Here's exactly how the "Icahn Effect" puts big money in your pocket...

Related Articles:

All These Companies Have More Cash Right Now Than the U.S. Government The Verge:
Investor Carl Icahn Pushes Apple to Spend Cash Hoard on Massive $150 Million Stock Buyback

Friday, November 29, 2013

Jim Cramer's 'Mad Money' Recap: Stocks Are Where It's At

Search Jim Cramer's "Mad Money" trading recommendations using our exclusive "Mad Money" Stock Screener.

NEW YORK (TheStreet) -- If you care about making money, stocks are still the only place to be, Jim Cramer told his"Mad Money" TV show viewers Monday, after another up day on Wall Street. Cramer said the bears are beginning to come out in droves, proclaiming that the top has arrived, but that simply isn't the case.

With the markets up 24% for the year, Cramer said, history remains on investors' side. Historically, markets that are up more than 20% going into November have only added to their gains. Stocks have been a great place to be since the lows of March 2009. Add to that a steaming hot IPO market, and the effectively nonexistent yield from all other forms of investments and it's easy to see why stocks remain the place to be.

There are no real alternatives to stocks, Cramer continued, and with the S&P 500 trading at just 14.7 times forward earnings, stocks really aren't that expensive either. Some sectors, like biotech, continue to rally with names like Celgene (CELG), Gilead Sciences (GILD) and Regeneron (REGN) continuing to shine. Yes, there are some stocks, like the newly minted Twitter (TWTR), that ARE wildly expensive, but that doesn't apply to the market at large. The analysts who are calling for a top in the market are those who never had any conviction in the rally to begin with, Cramer said, but in reality, stocks remain the only game in town. Executive Decision: Dave Melcher In the "Executive Decision" segment, Cramer spoke with Dave Melcher, president and CEO of Exelis (XLS), the defense contractor that's seen its shares rise 66% since Cramer last checked in back in September 2012. Despite the ongoing sequester, shares of Exelis still offer a 2.6% yield. Melcher started off commenting on Veterans Day, noting that veterans are the fabric of America and offer many talents to the companies who hire them. Nearly 10% of Exelis' workforce are veterans, he said, adding that hiring vets is just "the right thing to do." Turning to the business of Exelis, Melcher said that while his company can't control the top line given the continued budgets cuts, it does have control of the bottom line, which is why it has been cutting costs and reducing head counts where to bolster earnings.

Exelis has many growth areas, Melcher said, including internationally, where the company derives 10% of its revenues. The demand for Exelis' night vision, radio and networking equipment all remains strong. Additionally, aerospace remains in secular growth mode, and Exelis continues to be a big supplier to Boeing (BA).

Cramer said that companies like Exelis continue to prove that execution matters, even in the face of continuing budget cuts. in Spotlight

Don't freak out over its price tag, shares of (PCLN) are worth every penny, Cramer told viewers, as he highlighted the travel Web site that's given investors a 1,909% return over the past five years, 77% of which came from this year alone.

Cramer called Priceline THE growth stock to own going into the end of the year, as it currently trades for just 19 times earnings despite a 20% growth rate. He reminded viewers that money managers will pay up to twice a company's growth rate, or 40 times earnings, for a stock like Priceline, which is why the stock is incredibly cheap at its current valuation. While its true that Priceline has been rallying for years, Cramer said the company remains the best of breed playing in a secular growth industry. The company has a big exposure to Europe, which is finally taking a turn for the better, and it also derives 75% of its revenues from lucrative hotel bookings and far less from cut-throat airline reservations. Priceline also uses an agency model, acting as a broker between buyers and sellers, taking a 15% to 20% cut of the transaction fee. That makes it a far safer bet than its peers, Cramer said, especially given its scale. Priceline also snapped up Kayak, making it a big player in the fast-growing mobile bookings space. Given the company's huge cash flows, which afford it lots of options for buybacks, dividends and future acquisitions, Cramer said that Priceline should be on everyone's wish list this year. While some fretted over the companies' recent guidance, Cramer reminded viewers that Priceline is renowned for its tepid guidance, which explains the stock's $100 swing from its post-earnings selloff to its close the following day.

Lightning Round

In the Lightning Round, Cramer was bullish on Pharmacyclics (PCYC), Johnson & Johnson (JNJ), Cheniere Energy (LNG), Cheniere Energy Partners (CQP), Ubiquiti Networks (UBNT), Columbia Banking System (COLB) and Apple (AAPL).

Cramer was bearish on Advanced Micro Devices (AMD), Skyworks Solutions (SWKS), Arena Pharmaceuticals (ARNA), Windstream (WIN) and Weatherford International (WFT). Executive Decision: Gregg Engles

For his second "Executive Decision" segment, Cramer sat down with Gregg Engles, chairman and CEO of WhiteWave Foods (WWAV), which today delivered a penny-a-share earnings beat on better-than-expected revenues and increased margins, which caused management to raise the low end of their estimates, sending shares to a 52-week high. Shares of WhiteWave are up 10% since Cramer last spoke with Engles just three months ago. Engles said WhiteWave's non-dairy products are increasingly in demand as consumers are looking for healthy nutrition with fewer calories. Such items as almond and soy milks have lots of room to grow given the overall size of the dairy market. Fortunately for WhiteWave, the economics of almond and soy products is far better than that of traditional dairy, affording the company far higher margins. Additionally, Engles noted that WhiteWave is still a small company and is leveraging its cost structure as sales continue to grow, adding to its bottom line. WhiteWave is also in the process of selling one of its larger farms, which produces 5% of its organic milk. Engles explained that the farm is no longer an area of expertise for WhiteWave, so the capital will be better used elsewhere. Cramer said that WhiteWave remains a terrific story. No Huddle Offense In his "No Huddle Offense" segment, Cramer weighed in on DineEquity (DIN), purveyors of the Applebee's and IHOP restaurant chains, which continues to only receive a lukewarm reception from Wall Street. Cramer said its clear that the analysts continue to struggle with DineEquity. While the company continues to cut costs, bolster average ticket prices and keep its brands fresh, Wall Street remains unimpressed, raising price targets only when the old targets have been overrun. Cramer said that with a 3.75% yield, it's clear that DineEquity is doing something right, but that just creates an opportunity for investors to get in before the analysts finally wake up and recommend the stick at higher levels.

To watch replays of Cramer's video segments, visit the Mad Money page on CNBC.

To sign up for Jim Cramer's free Booyah! newsletter with all of his latest articles and videos please click here.

-- Written by Scott Rutt in Washington, D.C.

To email Scott about this article, click here: Scott Rutt Follow Scott on Twitter @ScottRutt or get updates on Facebook, ScottRuttDC

At the time of publication, Cramer's Action Alerts PLUS was long AAPL, JNJ. Jim Cramer, host of the CNBC television program "Mad Money," is a Markets Commentator for, Inc., and CNBC, and a director and co-founder of All opinions expressed by Mr. Cramer on "Mad Money" are his own and do not reflect the opinions of or its affiliates, or CNBC, NBC Universal or their parent company or affiliates. Mr. Cramer's opinions are based upon information he considers to be reliable, but neither, nor CNBC, nor either of their affiliates and/or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. Mr. Cramer's statements are based on his opinions at the time statements are made, and are subject to change without notice. No part of Mr. Cramer's compensation from CNBC or is related to the specific opinions expressed by him on "Mad Money." None of the information contained in "Mad Money" constitutes a recommendation by Mr. Cramer, or CNBC that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. You must make your own independent decisions regarding any security, portfolio of securities, transaction, or investment strategy mentioned on the program. Mr. Cramer's past results are not necessarily indicative of future performance. Neither Mr. Cramer, nor, nor CNBC guarantees any specific outcome or profit, and you should be aware of the real risk of loss in following any strategy or investments discussed on the program. The strategy or investments discussed may fluctuate in price or value and you may get back less than you invested. Before acting on any information contained in the program, you should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from your own financial or investment adviser. Some of the stocks mentioned by Mr. Cramer on "Mad Money" are held in Mr. Cramer's Action Alerts PLUS Portfolio. When that is the case, appropriate disclosure is made on the program and in the "Mad Money" recap available on The Action Alerts PLUS Portfolio contains all of Mr. Cramer's personal investments in publicly-traded equity securities only, and does not include any mutual fund holdings or other institutionally managed assets, private equity investments, or his holdings in, Inc. Since March 2005, the Action Alerts PLUS Portfolio has been held by a Trust, the realized profits from which have been pledged to charity. Mr. Cramer retains full investment discretion with respect to all securities contained in the Trust. Mr. Cramer is subject to certain trading restrictions, and must hold all securities in the Action Alerts PLUS Portfolio for at least one month, and is not permitted to buy or sell any security he has spoken about on television or on his radio program for five days following the broadcast.

Thursday, November 28, 2013

5 Best Stocks To Own For 2014

LONDON -- The shares of�AstraZeneca� (LSE: AZN  ) (NYSE: AZN  ) added 50 pence to 3,479 pence during early London trading this morning after the company announced the purchase of�Omthera Pharmaceuticals� (NASDAQ: OMTH  ) .

The FTSE 100 member said it would acquire Omthera for $12.70 per share, some 88% above Friday's closing price and valuing the New Jersey-based firm at $323 million. AstraZeneca will also pay up to a further $4.70 per share based on Omthera's future performance.

The total potential acquisition cost could therefore be $443 million.

Founded in 2008, Omthera listed on Nasdaq just last month at $8 a share. The group employs 14 people and is developing a fish-oil capsule branded�Epanova�to treat high levels of triglyceride and increased risk of cardiovascular disease.

Pascal Soriot, AstraZeneca's chief executive, said:

The number of people with elevated triglyceride levels is rising rapidly across the world, due in part to the increasing prevalence of obesity and diabetes.

5 Best Stocks To Own For 2014: Chiquita Brands International Inc. (CQB)

Chiquita Brands International, Inc., together with its subsidiaries, engages in the distribution and marketing of bananas and fresh produce under the Chiquita and other brand names worldwide. The company operates in three segments: Bananas, Salads and Healthy Snacks, and Other Produce. The Banana segment sources, transports, markets, and distributes bananas to retailers and wholesalers, and chain stores. It also engages in the cultivation and production of bananas. The Salads and Healthy Snacks segment offers value-added salads under the Fresh Express and other labels; and fresh vegetable and fruit ingredients used in foodservice, healthy snacks, and processed fruit ingredient products. This segment also provides fresh-cut products, such as lettuce, tomatoes, spinach, cabbage, and onions to foodservice distributors who resell these products to foodservice operators. It distributes Fresh Express branded products to food retailers, foodservice distributors, and quick-service restaurants; and fresh produce foodservice offerings primarily to third-party distributors for resale principally to quick-service restaurants in the United States. The Other Produce segment engages in sourcing, marketing, and distributing fresh fruits and vegetables other than bananas in Europe and North America. It offers grapes, pineapples, melons, kiwis, tomatoes, and avocados. The company was founded in 1899 and is headquartered in Cincinnati, Ohio.

Advisors' Opinion:
  • [By Rich Smith]

    Charlotte, N.C.-based Chiquita Brands (NYSE: CQB  ) will soon have a new chief financial officer -- and a new chief operating officer, too. Sort of.

  • [By Sara Murphy]

    Furthermore, the court's finding does not undermine the use of the ATS in cases of human rights abuses. It just requires a stronger connection to the United States. That means that other ATS cases currently working their way through the legal system, such as Earth Rights International's case against Chiquita (NYSE: CQB  ) for allegedly funding and arming Colombian terrorists, are still on track. That also means that the link from human rights violations to corporate liability remains.

5 Best Stocks To Own For 2014: Talisman Energy Inc.(TLM)

Talisman Energy Inc., an upstream oil and gas company, engages in the exploration, development, production, transportation, and marketing of crude oil, natural gas, and natural gas liquids. It primarily operates in North America, the North Sea, and southeast Asia. The company was founded in 1925 and is headquartered in Calgary, Canada.

Advisors' Opinion:
  • [By Aimee Duffy]

    A fond farewell?
    Many companies have abandoned capital expenditure plans in other plays to put more money behind their Eagle Ford ventures. Reuters recently reported that Talisman Energy (NYSE: TLM  ) is considering selling its 74,000-acre stake in the play, potentially looking to raise a whopping $2 billion. Given the money that companies are willing to pour into the Eagle Ford, it just might find a buyer. Talisman's joint venture with Statoil (NYSE: STO  ) is targeting production of 30,000 barrels of oil equivalent by the end of this year, which would double last year's number.

  • [By Chris Ciovacco]

    Sometimes the most attractive energy assets aren't found in the ground but listed on the stock exchange. Billionaire businessman Carl Icahn is one investor seeing value in energy companies. The hedge fund manager recently announced his purchase of 60 million shares in the Canadian oil and gas producer, Talisman Energy (TLM). Icahn has built up a nearly 6 percent stake in the Calgary-based energy producer, worth a whopping $300 million. Even though the company has been a perennial underperformer, after Icahn's tweet, the stock climbed to the highest level in more than a year.

10 Best Energy Stocks To Own Right Now: Marenica Energy Ltd(MEY.AX)

Marenica Energy Limited engages in the exploration and development of uranium deposits in Namibia and Australia. The company also explores for lead, zinc, silver, gold, and copper. Its principal project includes the Marenica Uranium project that covers an area of 527 square kilometers located in the Damara Province, Namibia. The company was formerly known as West Australian Metals Ltd and changed its name to Marenica Energy Limited in November 2009. Marenica Energy Limited was incorporated in 1978 and is based in West Perth, Australia.

5 Best Stocks To Own For 2014: Tangoe Inc (TNGO.O)

Tangoe, Inc. (Tangoe), incorporated on February 9, 2000, is a global provider of communications lifecycle management (CLM), software and services to a range of enterprises, including large and medium-sized businesses and other organizations. CLM encompasses the entire lifecycle of an enterprise's communications assets and services, including planning and sourcing, procurement and provisioning, inventory and usage management, mobile device management (MDM), invoice processing, expense allocation and accounting, and asset decommissioning and disposal. Its on-demand Communications Management Platform is a suite of software designed to manage and optimize the complex processes and expenses associated with this lifecycle for both fixed and mobile communications assets and services. On February 21, 2012, it acquired ttMobiles Limited (ttMobiles), On January 10, 2012, Tangoe acquired Anomalous Networks Inc. On December 19, 2011, it acquired ProfitLine, Inc. (ProfitLine).On Mar ch 16, 2011, the Company acquired the telecommunications expense management division of Telwares, Inc. and its subsidiary Vercuity Solutions, Inc. (Telwares). On January 25, 2011, it acquired HCL Expense Management Services Inc. (HCL). On August 8, 2012, the Company acquired the Telecommunications Expense Management Business of Symphony Teleca (TEM Business).

The Company�� solution is implemented worldwide, providing service coverage in over 180 countries and territories in over 125 currencies with support for approximately 1,700 different communications carriers and 1,900 different billing formats. Its user interface is translated into 16 different languages and its solution supports compliance with the requirements of 63 regulatory committees around the world. Its on-demand software organizes disparate billing, ordering, asset and usage data into a format, allowing its customers to access, query and analyze their communications expense and asset profile info rmation. Improved control of the billing process helps ent! er! prises ensure they pay their bills on time, avoiding late payments and associated service interruptions. Its software also provides customers proactive and predictive mobile usage alerts allowing them to avoid mobile bill overages. Its solution allows its customers to manage the financial, legal and reputational risks associated with unauthorized or unintended use of their communications assets and services.

Communications Management Platform

The Company�� customers can engage the Company through its client service group to manage their communications assets and services using a combination of CMP and its client services. The services it offers include help desk, asset procurement and provisioning and carrier dispute resolution. Its Communications Data Management technology processes and normalizes service-provider billing and order-related information for its customers. CMP also integrates with its customers' critical third-party enterprise syst ems, including enterprise resource planning, accounts payable, general ledger and human resources systems, which enables automated, real-time access to and synchronization with employee, accounting, user access authentication and security policy information.

The Company sells CMP in three standard bundles: Asset Management, Expense Management and Usage Management. The Asset Management bundle of CMP provides asset procurement, provisioning, tracking and disposal capabilities for fixed and mobile communications assets and services. The Asset Management bundle tracks and audits all add, move, change or disconnect service transaction orders and manages all customer assets and services by location, business unit and employee. Its MDM software allows its customers to manage and maintain their mobile inventory with wireless, real-time monitoring and remote update functions. Key capabilities of the Asset Management bundle of CMP include catalog management, procure, prov ision, track, maintain and dispose.

Catal! og Man! a! gement i! nclude Customer-configurable catalog of over 51,500 services, devices, features and plans with dynamic access and presentation based on corporate policy and user profile. Procure include capture, validation, approval, submission and tracking of fixed and mobile service and equipment orders. Provision is engaged in establishment of mobile device enterprise connectivity with installation of corporate applications, usage and security policies utilizing wireless provisioning capabilities. Track includes tracking of fixed and mobile assets, including information regarding characteristics, configurations, ownership and operational and connectivity status. Maintain include centralized management of mobile devices enabled through on-device software providing security and usage policy enforcement as well as automated mobile policy and mobile application deployments and updates. Dispose include collection, data cleansing and disposal of mobile devices.

The Expense Managem ent bundle of CMP provides automated processing and services to manage every aspect of the fixed and mobile communications billing function, from receipt to payment. Key capabilities of the Expense Management bundle of CMP include contract management, billing, audit, dispute, allocate, payment and optimize. The Usage Management bundle of CMP provides enterprises with visibility and control over how communications assets and services are being used in fixed and mobile environments through a combination of real-time and historical usage tracking as well as corporate communications and security policy enforcement. The Company�� capabilities of the Usage Management bundle of CMP include secure, policy management, monitor, real-time, compliance, performance and support. The Company offers Real-time Telecommunications Expense Management (rTEM) bundled or as a point solution. Its rTEM solution serves the enterprise, medium and small business and carrier deployment markets.

The Company�� rTEM solution provides bu! sinesses ! and! carriers! of all sizes the ability to monitor, report and analyze data, voice, short message service (SMS) and roaming consumption of their mobile devices in real-time. Its rTEM solution utilizes predictive algorithms designed to proactively identify and help prevent costly, unexpected overages from occurring. Its rTEM solution also provides device location monitoring services to help find lost or stolen devices, as well as device geo-fencing features to alert appropriate individuals that an asset is leaving or entering pre-defined geographic tracking areas, providing additional device security tracking. Its rTEM solution supports implementation on smartphones, tablets and machine-to-machine communication devices.

Strategic Consulting and Other Services

The Company offers a set of strategic consulting services that address all areas of CLM for fixed and mobile environments. These services can be contracted separately or in conjunction with CMP. Its strategi c consulting services offerings include sourcing, strategic advisory service, bill auditing, inventory optimization, mobile optimization and policy administration. The Company assists its customers with reviewing and negotiating contracts with communications carriers. The Company provides its clients with peer comparison analysis and benchmarking. It works with its customers to identify billing errors and other issues related to usage and contract activity. The Company advises its customers on how to align their current asset and service inventories with their business objectives. The Company aids its customers in aligning their mobile policies, assets, contracts and requirements. It works with its customers to formulate policies concerning the appropriate use of communications assets and services. In addition, the Company helps its customers develop policies regarding risk mitigation, entitlements, cost management, liability models, cost allocation methodologies and positiv e behavioral management. The Company also of! fers stan! dard im! plementat! ion services, including data conversion, system configuration, process review and corporate system integration, to assist its customers in the setup and deployment of CMP.

The Company competes with Emptoris, Rivermine, MDSL, Symphony SMS, Vodafone, XIGO, AirWatch, BoxTone, Good Technology, MobileIron, Sybase, Zenprise, CSC, Orange, Ariba and PAETEC.

5 Best Stocks To Own For 2014: Western Asset Global Partners Income Fund Inc. (GDF)

Western Asset Global Partners Income Fund Inc. operates as a close-ended fixed income mutual fund launched and advised by Legg Mason Partners Fund Advisor, LLC. The fund is sub-advised by Western Asset Management Company. It primarily invests in the fixed income markets across the globe. The fund invests in high-yield U.S. and non-U.S. corporate debt securities and high-yield foreign sovereign debt securities. It benchmarks the performance of its portfolio against the Lehman Brothers U.S. Corporate High Yield 2% Issuer Cap Index and the JPMorgan Emerging Markets Bond Index Global Index. The fund was formerly known as Salomon Brothers Global Partners Income Fund Inc. Western Asset Global Partners Income Fund was founded in 1993 and is based in the United States.

Advisors' Opinion:
  • [By Chuck Carnevale]

    Our first example looks at Vectren Corp.�� historical earnings, a utility with a 15-year historical earnings growth rate that is below our 3% threshold established in Part 1. Note that fair valuation is calculated using Graham Dodd�� Formula (GDF) deriving a fair value PE of 13.8 (slightly below, but close to our PE 15 standard). However, a normal PE of 16 has been historically applied by Mr. Market. Therefore, valuation falls between a PE of 13.8 to 16, or well within a range of normalcy.

Wednesday, November 27, 2013

Abenomics' Special Economic Zones, Sans Labor Deregulation, Head for Approval

During the past week, Prime Minister Abe Shinzo and his cabinet have been presenting and defending key Abenomics initiatives before a special session

English: Margaret Thatcher, former UK PM. Fran...

English: Margaret Thatcher, former UK PM. Français : Margaret Thatcher 日本語: 「鉄の女」サッチャー英首相 Nederlands: Margaret Thatcher Svenska: Margaret Thatcher som oppositionsledare 1975 Русский: Маргарет Тэтчер, бывшая премьер-министр Великобритании (Photo credit: Wikipedia)

of the Japanese Diet. Watching the live NHK broadcasts, one has to admire the British parliamentary system's direct Q & A format, where opposition politicians can grill the prime minister et al directly with repeated follow up questions, and demand answers, for 15 minutes or longer.

Since Abe's Liberal Democratic Party/New Komeito (LDP/NK) coalition victory in the July upper house election, the situation of "divided government"—with opposition parties controlling one Diet chamber and blocking most reform–which prevailed for most of past six years, has been resolved. As in the British system, the government is now virtually assured of passing any legislative proposals it presents.

The trouble for Abe is not the opposition parties, but members of his own coalition:  with dissident members of his own party, and sometimes with cabinet ministers. Ironically, the landslide LDP victory brought in a host of new LDP Dietmen beholden to special interest constituencies and opposed to reform. Cabinet ministers will represent the bureaucratic interests of their ministries.

About the cabinet, a critical point was explained to me yesterday by Professor Yashiro Naohiro, one of Japan's most authoritative voices on labor policies, and a key player in Koizumi-era key deregulation efforts, particularly "Special Zones for Structural Reform" (see my interview with Yashiro last year). I visited Yashiro in his academic office in Sangenjiaya to ask about labor issues and Abe's "national strategic zones" initiative.

Hot Penny Companies To Own In Right Now

Explained Yashiro, as in the British system, the Japanese prime minister is just one minister among others within a cabinet.  Policy proposals must be supported unanimously by all cabinet members. Thus, a cabinet member, by dissenting, can prevent a proposal opposed by the ministry he represents from being adopted by the cabinet.

Margaret Thatcher, pursuing her reform agenda against bureaucratic opposition, did not hesitate to fire dissenting ministers, replacing them with supporters, remarked Yashiro. Abe is more polite.

We are seeing these elements of Japanese political economy playing out now.

Abe's government is planning to push through some key legislation of the "third arrow" growth strategy during the current special Diet session that ends on December 6. On November 1 Abe is schedule to present to the full Diet lower house bill to enhance business competitiveness, including tax incentives to promote investment and sector restructuring. The new draft laws—generally favored also by the opposition Democratic Party of Japan (DPJ)–could be approved by mid-month.

Abe's second major "growth strategy" push this Diet session is to establish next year geographically-limited "national strategic zones" within which to pursue "bold deregulation." Draft legislation will be presented to the in early November.

PM Abe has been heading a committee hammering out draft legislation for the "zones." The committee includes only four minister level members—PM Abe, the chief cabinet secretary, Suga Yoshihide, the minister for internal affairs, Shindo Yoshitaka, and the minister for economic and fiscal policy, Amari Akira, as well as "knowledgeable persons" from the private sector

The absence of ministers from the various ministries in either of these groups gives the impression that Abe is determined not to allow bureaucratic interests to derail reform.  Professor Yashiro points out that central ministry officials will always be involved in substantive deliberations, and their opposition will be enough to block progress. This has happened in the case of labor rule reform.

The zones have been conceived as places for relaxing or eliminating Japan's regulatory restrictions in the areas of medical care, employment, agriculture, education, construction, and residential property use. While many politicians dream of reviving rural areas, it appears that the four or five zones are likely to be established first in Tokyo, Osaka, Nagoya, and Fukuoka.

One of the main targets of the zones is international investors and companies. Abe clearly believes that Japan needs to attract more foreign investment and corporate operations to Japan's major cities. The zones are intended to remove restrictions and regulations that are believed to have discouraged such investments and operations.

Thus, in the outlines reforms within the zones we see allowing foreign doctors to practice (but only on foreigners) and to use drugs not currently approved in Japan.  Likewise, foreign teachers can be employed and foreign educational institutions will be allowed to use public facilities (classrooms, etc.) within the zones, providing schooling for foreign staff.

Tuesday, November 26, 2013

Get 3% With Low Risk Via Floating-Rate Bond Funds

Wary investors have fallen in love with floating-rate bond funds. And no wonder: The funds pay a decent yield—typically about 3%, sometimes more—and are designed to protect against rising interest rates, which just about everyone expects once the Federal Reserve determines that it really is time to dial back its stimulative policies.

See Also: A Juiced-Up Junk Bond Fund

While most kinds of bonds struggled over the past year, floating-rate funds produced impressive gains. According to Morningstar, the average floating-rate fund delivered a total return of 5.9%, trouncing Barclays U.S. Aggregate Bond index by some seven percentage points. But those generous returns suggest that the funds are not risk-free, so it pays to be selective when choosing one. (All performance figures are as of November 1.)

How they work. Floating-rate bond funds invest in loans that banks make to companies. The rates on the loans are tied to a short-term benchmark, such as the London Interbank Offered Rate, or LIBOR, and generally reset every 30 to 90 days. As a result, if interest rates go up, the loans adjust quickly, preserving their value. (For most other kinds of bonds, prices move in the opposite direction of interest rates.)

But here's the downside: Companies that take out these loans tend to have poor credit and are likelier to default than higher-quality borrowers. Also, because the bank-loan market is relatively small, heavy selling can result in exaggerated losses. That's what happened in 2008. Floating-rate bond funds fell by an average of 30%, as investors ran for cover during the financial crisis.

The floating-rate market has grown since then, but it's still a good idea to choose a fund that keeps risk in check. Demand has increased the supply of loans lately and eased lending standards. "You're starting to see looser restrictions on companies," says Morningstar analyst Sarah Bush. She recommends funds that invest mostly in bank loans rated single- or double-B (the latter being the highest "junk" bond rating). Avoid funds with high expenses—that is, anything above the category average of 1.2% annually. Their managers may be tempted to reach for yield to overcome the drag of high fees.

Two good no-load options are Fidelity Floating Rate High Income (FFRHX) and T. Rowe Price Floating Rate (PRFRX). Both have 30-day yields of about 3%. They are also relatively cheap. The Fidelity fund's annual expense ratio is 0.71%; Price charges 0.86%. Over the past year, the funds returned 4.2% and 4.5%, respectively, compared with 5.9% for the average bank-loan fund. The underperformance in a strong market for bank-loan funds isn't surprising, because the Fidelity and Price funds focus on higher-quality loans and so take fewer risks than their typical rivals.

Another way to cut expenses is to consider an exchange-traded fund such as PowerShares Senior Loan Port­folio (BKLN). The ETF, which charges 0.66% per year, aims to match the performance of an index of the 100 largest bank loans available. That focus should make it easier to trade the loans, helping to minimize volatility. The fund yields 4.1%, and it returned 4.8% over the past year.

If you can stomach more risk for a chance at bigger yields, consider a closed-end fund. CEFs are traded on an exchange, the same way ETFs are. But because CEFs are structured differently, their share prices often differ dramatically from the value of their underlying assets.

Consider Nuveen Floating Rate Income (JFR), a closed-end fund that, at a price of $12, trades at a 5% discount to the value of its assets. Like most closed-end bond funds, Nuveen borrows money to boost yield; at last report, it had borrowed about 30% of its assets. The fund returned just 1.4% over the past year, but thanks to leverage, its current yield is a whopping 6.8%.

Monday, November 25, 2013

US Automobile Sales Expected to End on a Solid Note in November

The US automobile industry is experiencing the best year post the recession. Automobile sales are expected to rise in the range of 4% to 7% for the month of November compared to last year same period. Several analysts are estimating that the seasonally adjusted annualized rate (SAAR) would cross 16 million, which is the best since August.

LMC Automotive expects the annualized rate to be 16.1 million, the best in six years. This is a decent improvement from last year's November, when the industry reported 15.3 million as the adjusted annualized rate. In comparison, Kelley Blue Book (KBB) expects the November 2013 SAAR to be around 15.6 million, while estimates it to be 15.7 million.

How strong the sales will be a lot depends on the last week of the month which generally witnesses solid boost from the holiday season ahead. In fact as said by a senior market analyst of KBB rightly "these are some of the best sales days of the year".

So how are individual automakers expected to perform?

The top US automaker General Motors (GM) got a good boost this Black Friday as it introduced its promotional offers on its models of Chevrolet, Buick and GMC. KBB said that it expects to see sales gain of 12% in November, the highest among the top auto giants. Edmunds expects the top Detroit maker to post sales rise of 8%, and estimates Chrysler to report 10% sales gain.

However, foreign automakers including Honda (HMC), Hyundai and Volkswagen (VLKAY) are expected to lose market share in November. One of the prime reasons why these foreign automakers aren't benefitting as much as domestic carmakers is because they do not specialize in pickups and trucks. The Detroit Three, General Motors, Ford (F), and Chrysler are known for manufacturing pickups and trucks. With the rebound in the housing and construction sector, businesses are improving and are therefore demanding more and more of pickups.

This is bolstering the sale of domestic auto giants who are witnessing a sup! erb year. The good news is that the revival of the housing sector is there to stay for at least a couple of years. This would give domestic automakers a real boost, particularly after suffering distressed years post recession. Several industry analysts believe that the industry shall continue to see significant upward trend. The holiday season is ahead and car shoppers have already started taking advantage of the incentives that automakers give during this period.

Solid November

Sales during September and October were disturbed by external factors which suppressed the demand for cars as buyers started losing their confidence in the economy. However, November is expected to end at a solid note. LMC projects that November would post 1.22 million deliveries. If this is the case then the US automobile industry would record the best November since 2003. Automakers are scheduled to post November figures on December 3.

The US automobile industry is estimated to post 15.5 million annual sales, 1 million higher compared to last year. The increase in sales is majorly due to pent-up demand, Toyota's (TM) US Chief Executive Jim Lentz says. Honda's US Chief Executive Tetsuo Iwamura expects that 2014 US sales figure would be in the higher bracket of 15 million. Sales gain is not expected to be as strong as in 2013, though the industry shall continue to be in momentum. 2013 is a dream year for the automakers, it would be interesting to see how 2014 turns out to be.

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Sunday, November 24, 2013

Advisors, HNWs Don't See Eye to Eye on Philanthropy: Survey

Philanthropy is an important component of many wealth planning conversations, but advisors and their affluent clients often have different perceptions centering on the initiation and substance of those discussions, according to a new study.

U.S. Trust and The Philanthropic Initiative conducted a nationwide survey in August of some 300 advisors — including wealth advisors, trust and estate attorneys, accountants and other tax professionals — and a random sample of 120 individuals with $3 million or more in investable assets who were actively engaged in charitable giving.

The study found that 89% of advisors said they discussed philanthropy with at least some of their clients, and 71% regularly asked clients about their interest in charitable giving. Meanwhile, only 55% of wealthy individuals said they had discussed philanthropy with a professional advisor.

Advisors and individual respondents also differed on who initiated the philanthropic discussion (33% of advisors said they did, while 51% of individuals said they had initiated it), and on how early in the client relationship the discussion should begin (most of the individuals said it should happen within the first several meetings, while many advisors preferred to wait until they knew more about their clients personal, financial and philanthropic goals).

“The vast majority of wealthy individuals give to charity, and many cite charitable giving as one of the greatest freedoms of wealth,” Claire Costello, national philanthropic practice executive for U.S. Trust, Bank of America Private Wealth Management, said in a statement, referring to an earlier study.

“Philanthropy today is no longer simply what one does with ‘what’s left,’ but rather a pivotal consideration at the front end of the wealth structuring process. For this reason, we are seeing individuals and families rely increasingly on advisors to help them integrate their philanthropic pursuits into their overarching wealth plan.”

The study also found that only 41% of affluent respondents were fully satisfied with the philanthropic conversations they had with their advisors.

The study pointed to one possible reason: 71% of advisors said they raised the philanthropic discussion from a technical perspective — focusing on tax considerations or wealth structuring, for example — compared with 35% who did so beginning with their clients’ philanthropic goals or passions.

Once initiated, 41% of advisors said further philanthropic discussions also centered on technical issues, compared with 38% who talked more about clients’ charitable goals.

Individual respondents reported otherwise, with 63% finding that ensuing discussions with their advisor about charitable giving tended to center on more technical issues, while just 27% said these discussions centered on their charitable goals, values and interests.

Despite these disconnects, 73% of wealthy individuals who discussed philanthropy with an advisor believed such conversations were important, and 82% felt their advisor played an important role in their charitable giving.

Both advisors and HNW respondents agreed that the chief motivations for the latter’s philanthropy were being passionate about a cause, having a strong desire to give back and having a positive effect on society and the world.

After that, however, reasons provided by HNW individuals and advisors differed significantly.

Individuals said their next three most for giving were to encourage charitable giving by the next generation (30%), religious or spiritual motivations (23%) and because they believe giving back is an obligation of wealth (22%).

Advisors believed their clients’ next most popular motivations would include reducing their tax burden (46%), religious or spiritual reasons (41%) and creating a family legacy (30%).

In fact, just 10% of individual respondents cited reducing taxes among their motivations for giving.

The disconnect on the topic of taxes went deeper, with advisors believing that 40% of HNW individuals would reduce their giving if the estate tax were eliminated, and that 78% would do so if income tax deductions for donations were eliminated, whereas just 6% and 45% of individuals, respectively, said they would reduce their charitable giving if these tax policy changes occurred.


Check out Shutdown Plays Havoc With Federally Funded Nonprofits on ThinkAdvisor.


Saturday, November 23, 2013

5 Best China Stocks For 2014

Erik Schelzig/APWorkers assemble a Volkswagen Passat at the German automaker's Chattanooga, Tenn., plant. DETROIT -- Volkswagen AG and the United Auto Workers said they are in talks about the U.S. union's bid to represent workers at the German carmaker's Tennessee plant, which would be a milestone in the UAW's long-running effort to organize foreign-owned auto plants. Volkswagen officials, in a letter distributed to workers at the Chattanooga, Tenn., plant Thursday night and Friday morning shifts, said worker representation at the plant can only be realized by joining with a U.S. trade union. "In the U.S., a works council can only be realized together with a trade union," Fischer's letter says. "This is the reason why Volkswagen has started a dialogue with the UAW in order to check the possibility of implementing an innovative model of employee representation for all employees." The letter to the 2,500 Chattanooga workers was signed by Frank Fischer, chief operating officer and manager of the plant, and Sebastian Patta, head of human resources in Chattanooga. UAW President Bob King has been trying without success thus far to organize foreign-owned, U.S.-based auto plants to bolster membership in the union, which has fallen from its peak in the late 1970s. The UAW has been working with the German union IG Metall to try to organize workers at the Volkswagen plant. King is open to what Fischer called "an innovative model" in order to gain acceptance by workers at foreign-owned auto plants, which are primarily in the U.S. South. "VW workers in Chattanooga have the unique opportunity to introduce this new model of labor relations to the United States, in partnership with the UAW," the UAW said in a statement Friday morning. "If Bob King can get his foot in the door at Chattanooga, even if it's just a works council, it's pretty significant," a former auto executive at a foreign automaker with U.S. plants, who wished to remain anonymous, said earlier this week. On Wednesday, during a call about Volkswagen's U.S. sales, Jonathan Browning, head of the company in the United States, said: "We've been very clear that that process has to run its course, that no management decision has been made and that it may or may not conclude with formal third-party representation." Browning also said that ultimately, the decision on whether to have third-party representation will be decided by Chattanooga's workers by a formal vote. There was no indication in the letter to workers when such a vote would be held. The UAW also confirmed that King met last Friday with VW executives and officials from the company's "global works council," which represents VW blue- and white-collar employees around the world. The UAW said last week's meeting, "focused on the appropriate paths, consistent with American law, for arriving at both Volkswagen recognition of UAW representation at its Chattanooga facility and establishment of a German-style works council." At VW plants, workers are represented by so-called works councils, which include laborers as well as executives who cooperate to determine issues ranging from company strategy to job conditions. They do not negotiate wages or benefits. Volkswagen has about 100 plants worldwide, and all of them except for the Chattanooga factory and the company's six plants joint venture plants in China have such a council, an expression of the company's belief in what it calls "co-determination." While the UAW, and VW in its letter to Chattanooga workers, say that a U.S. trade union must be allied with any group of workers at a foreign-owned company, some disagree. "Volkswagen workers can discuss their work with their employer without UAW unionization," Mark Mix, president of the anti-union National Right to Work Foundation, said in a statement Thursday. "The UAW's campaign of misrepresentation is meant only to misinform workers into thinking that they have no choice but to unionize," Mix said. The anti-union organization is based in Virginia.

By Michael Zak | AOL Autos

5 Best China Stocks For 2014: ChinaEdu Corporation(CEDU)

ChinaEdu Corporation, together with its subsidiaries, provides educational services to the online degree programs of universities in the People?s Republic of China. It also offers online tutoring services to primary and secondary school students; operates primary and secondary schools; and markets international English language curriculum programs to established learning institutions, as well as international polytechnic programs to vocational schools in China. The company?s online degree programs offer associate and bachelor?s degree programs, including accounting, marketing, finance, business administration, international business, law, civil engineering, education, computer science, literature, project management, marketing, and administrative management. These online degree programs primarily target working adults. Its services also include academic program development, technology services, enrollment marketing, recruiting, student support services, and finance operati ons. The company provides technical, recruiting, and other services for the online degree programs of 27 universities; and technology support services to 7 additional universities that are awaiting regulatory approval to launch their online degree programs. As of December 31, 2010, it served approximately 311,000 online degree programs students, as well as approximately 51,450 students in other businesses. ChinaEdu Corporation was founded in 1999 and is based in Beijing, the People?s Republic of China.

5 Best China Stocks For 2014: SmartHeat Inc.(HEAT)

SmartHeat Inc. manufactures, sells, and services plate heat exchangers (PHE) in the People?s Republic of China. It offers PHE units, which combine PHEs with various pumps, temperature sensors, and valves and automated control systems; heat meters for use in commercial and residential buildings; and spiral and tube heat exchangers. The company?s products are used in various applications that include energy conversion for heating, ventilation, and air conditioning; and industrial use in petroleum refining, petrochemicals, metallurgy, food and beverage, and chemical processing. SmartHeat sells PHE units under the brand name of Taiyu; and PHEs under the brand names of Taiyu and Sondex. It sells its products through sales force and a network of national distributors. The company is headquartered in Shenyang, the People?s Republic of China.

Top Biotech Stocks For 2014: Bona Film Group Limited(BONA)

Bona Film Group Limited distributes films in the People?s Republic of China. It distributes films to movie theaters, as well as to non-theatrical distribution channels, including DVD and Blu-ray and other home video products; Internet and digital distribution; in-flight entertainment; and cable, satellite, and broadcast televisions. The company also invests in the production of Chinese and Hong Kong films in order to obtain the distribution rights for movie theaters and non-theatrical channels. In addition, Bona Film Group operates six movie theaters in five cities of the People?s Republic of China; operates a talent agency business that represents artists; and involves in film advertising and television production businesses. The company was founded in 2003 and is headquartered in Beijing, the People?s Republic of China.

Advisors' Opinion:
  • [By Seth Jayson]

    Calling all cash flows
    When you are trying to buy the market's best stocks, it's worth checking up on your companies' free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That's what we do with this series. Today, we're checking in on Bona Film Group (Nasdaq: BONA  ) , whose recent revenue and earnings are plotted below.

  • [By Bryan Murphy]

    With just a quick glance at the chart, Bona Film Group Ltd (NASDAQ:BONA) doesn't look like anything other than an erratic mess. When you take a step back and take a look at the longer-term chart of BONA, however, you can see the last several weeks have ushered in a major bullish change of direction for the stock... meaning now's a great time to start wading into a position.

5 Best China Stocks For 2014: Trina Solar Limited(TSL)

Trina Solar Limited, through its subsidiaries, designs, develops, manufactures, and sells photovoltaic (PV) modules worldwide. The company offers monocrystalline PV modules ranging from 165 watts to 185 watts in power output; and multicrystalline PV modules ranging from 215 watts to 240 watts in power output that provide electric power for residential, commercial, industrial, and other applications. It also involves in the design and production of various PV modules, such as colored modules for architectural applications and larger sized modules for utility grid applications based on customers? and end-users? specifications. Trina Solar Limited sells and markets its products primarily to distributors, wholesalers, power plant developers and operators, and PV system integrators. The company was founded in 1997 and is based in Changzhou, the People?s Republic of China.

Advisors' Opinion:
  • [By Lauren Pollock]

    Trina Solar Ltd.(TSL) swung to a surprise third-quarter profit after better than expected demand in China drove up company shipments and led to strong revenue growth. American depositary shares surged 11% to $18.04 premarket.

  • [By Paul Ausick]

    DJIA stocks on the move: Lions Gate Entertainment Corp. (NYSE: LGF) hit a new 52-week high of $35.13 on Wednesday. Trina Solar Ltd. (NASDAQ: TSL) rose more than 15% after posting better than expected earnings on Tuesday, Aeropostale Inc. (NYSE: ARO) put up a new 52-week low of $11.40, and another teen retailer, and American Eagle Outfitter Inc. (NYSE: AEO) also put up a new low of $14.33.

5 Best China Stocks For 2014: Top Image Systems Ltd.(TISA)

Top Image Systems Ltd. provides enterprise solutions for managing and validating content entering organizations from various sources. It develops and markets automated data capture solutions for managing and validating content gathered from customers, trading partners, and employees. The company?s solutions deliver digital content to the applications that drive an enterprise by using technologies, such as wireless communications, servers, form processing, and information recognition systems. It offers eFLOW Unified Content Platform that provides the common architectural infrastructure for its solutions. The company also provides Smart, an automated classification solution, which is the eFLOW plug-in for unstructured content providing single point of entry for information entering the organization; and Freedom, the eFLOW plug-in for semi-structured content that enables customers to identify and capture critical data from semi-structured documents, such as invoices, purchase orders, shipping notes, and checks. In addition, it offers Integra, the eFLOW plug-in for structured content, which provides a solution for data capture, validation, and delivery from structured predefined forms; eFLOW Ability, an integrated module interfacing with SAP systems for automated parking, approval, and posting of invoices and other document within SAP systems; and eFLOW Invoice Reader, an invoice capture and approval solution, which could be deployed and integrated in enterprise accounting environment, such as SAP, Oracle, and other financial systems. Top Image Systems Ltd. sells its products through a network of value-added distributors, systems integrators, original equipment manufacturers, and partners in approximately 40 countries worldwide. It has strategic partnership with SQN Banking Systems (SQN) to incorporate SQN's fraud detection solutions with its eFLOW Banking Platform in the Asia Pacific market. The company was founded in 1991 and is headquartered i n Ramat Gan, Israel.

Friday, November 22, 2013

Tech stocks: Microsoft’s future with Xbox

For video game players, the arrival of Xbox One is a big day. But what does Xbox mean for the business of Microsoft?

With a replacement for outgoing CEO Steve Ballmer looming, there has been a lot of chatter about whether Microsoft should spin off its Xbox business.

The Associated Press has a detailed breakdown of the pros and cons of keeping Xbox, which some suggest distracts the company from its computing business. While Xbox has been profitable over the last several years, Microsoft is expected to lose at least $1 billion next year.

Shares of Microsoft are up slightly, but could spike if they choose to spin off Xbox. "If you're trying to bring in new management here and have a course correction, I think this is one of the places you've got to take a look at and reassess," Nomura analyst Rick Sherlund tells the AP.

Video game consoles are expected to rake in lots of money for manufacturers. Gartner forecasts video game market revenue will hit $111 billion by 2015, with roughly half of that coming from new consoles from Sony and Microsoft.

However, Sony enters the space with a huge price advantage. The PS4 sells for $399, while Xbox One carries a $499 price tag.

Meanwhile, Pandora shares are up nearly 1% after reporting a loss of $1.7 million in the third quarter. According to Bloomberg, the company is spending more money on development and marketing as new competitors enter the streaming music business.

Follow Brett Molina on Twitter: @bam923.

Thursday, November 21, 2013

5 Trades to Take for October Gains

BALTIMORE (Stockpickr) -- The drama surrounding the government shutdown held a gun to Wall Street's head to start the week. Well, kinda, sorta.

Stocks actually held their ground pretty well in spite of yesterday's headlines. And the sky isn't falling today either.

In fact, looking back on a historical basis since 1976, research from Bank of America Merrill Lynch's Equity and Quant Strategy group shows that markets tend to perform well in the wake of a government shutdown threats on Capitol Hill. The timing is pretty good too: "New month, new market" has been stocks' mantra all year long. So investors should brace themselves for more of the same now that October trading kicked off at the opening bell this morning.

To take full advantage of a change in trend, we're taking a technical look at five stock trades worth trading this week.

For the unfamiliar, technical analysis is a way for investors to quantify qualitative factors, such as investor psychology, based on a stock's price action and trends. Once the domain of cloistered trading teams on Wall Street, technicals can help top traders make consistently profitable trades and can aid fundamental investors in better planning their stock execution.

So, without further ado, let's take a look at five technical setups worth trading now.

Atlas Pipeline Partners

Up first is natgas pipeline stock Atlas Pipeline Partners (APL). Natural gas spot prices have sported some pretty lackluster performance so far in 2013, tumbling mid-single digits year-to-date, but not APL. APL has managed to claw its way nearly 22% higher since the calendar flipped over to January, and it's positioned for even better performance for the rest of the year.

APL is currently forming an ascending triangle pattern, a bullish setup that's formed by horizontal resistance above shares at $39.25 and uptrending support to the downside. Basically, as APL gets bounced in between those two technical levels, it's getting squeezed closer and closer to a breakout above resistance. When that happens, traders have their buy signal.

Whenever you're looking at any technical price pattern, it's critical to think in terms of those buyers and sellers. Ascending triangles and other pattern names are a good quick way to explain what's going on in a stock, but they're not the reason it's tradable. Instead, it all comes down to supply and demand for shares.

That resistance level at $290 is a price where there has been an excess of supply of shares; in other words, it's a place where sellers have been more eager to step in and take gains than buyers have been to buy. That's what makes a breakout above $290 so significant -- the move means that buyers are finally strong enough to absorb all of the excess supply above that price level.

Wait for $290 to get taken out before you buy.

Boston Scientific

You don't have to be an expert technical analyst to figure out what's going on in shares of Boston Scientific (BSX). Shares of the $16 billion medical device maker have been bouncing higher in a textbook uptrend for the better part of the year. Now, with shares coming down to test support, we're coming up on a big buying opportunity for this stock.

BSX has been stuck in a tight range in between parallel uptrend lines, levels that provide a high-probability range for shares. While there's really no bad time to buy a stock that's in an uptrend, the ideal time to jump in comes on a bounce off of trendline support. Buying off a support bounce makes sense for two big reasons: It's the spot where shares have the furthest to move up before they hit resistance, and it's the spot where the risk is the least (because shares have the least room to move lower before you know you're wrong).

The 50-day moving average has been a stellar proxy for support on the way up -- it's where I'd put a protective stop in this name.


Dover (DOV) is another stock that's in a solid uptrend this fall. Like BSX, the manufacturing conglomerate has been trending higher since the start of the summer – beating the S&P 500 on a relative strength basis all the way up.

And just like BSX, the ideal time to buy comes on a bounce off of trendline support.

DOV pushed higher off of support in yesterday's session, catching a bid before it got down to the 50-day moving average. At this point, Dover's bounce is still a little tentative. While buyers did step in and bid shares up, yesterday's price action left things close to the support line. So while now might be a good time to build a starter position in DOV, I'd recommend waiting for a more confirmed more off of support before putting cash on this trade.

If you decide to jump in here, keep a tight protective stop in place.


Last up is satellite television operator DirecTV (DTV). While DTV has more or less matched the market so far this year, shares of the TV provider are starting to look a little "toppy" now. Here's how to trade it.

DirecTV is forming the late stages of a head and shoulder top, a reversal setup that indicates exhaustion among buyers. The head and shoulders is formed by two swing highs that top out around the same level (the shoulders), separated by a bigger peak called the head; the sell signal comes on the breakdown below the pattern's "neckline" level, which is right above $56 at the moment for DTV.

The head and shoulder pattern is well know because it works: a recent academic study conducted by the Federal Reserve Board of New York found that the results of 10,000 computer-simulated head-and-shoulders trades resulted in "profits [that] would have been both statistically and economically significant." If you decide to short this stock on a move below $56, it makes sense to keep a stop above $64.

To see this week's trades in action, check out the Technical Setups for the Week portfolio on Stockpickr.

-- Written by Jonas Elmerraji in Baltimore.

Wednesday, November 20, 2013

Stores Get Stingy About Returns

As you're double-checking your holiday shopping list, tack on a reminder to read each store's return policy before making your purchase. Some retailers are feeling a little less generous when it comes to returns. That even includes REI, an outdoor gear and sporting goods retailer long known for its no-time-limit and no-questions-asked return policy. The store recently trimmed its return window to one year, unless the merchandise is defective. To deter "wardrobing" -- the practice of buying, using and then returning a product (usually clothing) for a refund -- Bloomingdale's recently began tagging some of its apparel with conspicuous plastic tags. If a tag is removed, shoppers can't return the item.

SEE ALSO: Why You Should Start Your Holiday Shopping Now

Stingier policies are intended to combat return fraud. Last year, fraudulent returns cost retailers $8.9 billion, according to the National Retail Federation, $2.9 billion of which occurred during the holiday season. Reports of wardrobing increased 40% from 2009 to 2012, says the NRF.

Top 10 Performing Companies To Buy For 2014

Customers can expect tougher return policies to spread. "As retailers see competitors or stores with some of the most lenient policies tighten up, it's going to signal to them that they can do the same," says Phoenix retail consultant Jeff Green. "We're going to see a shift toward a shorter, 30-day return policy in 2014." Customers can also expect added scrutiny when taking back merchandise without a receipt.

Retailers want to identify the bad actors. To do so, some companies are gathering data on customers who return merchandise, watching for suspicious patterns and warning or denying repeat offenders. Clerks may ask for state-issued identification, such as a driver's license, before you can make a return. Nearly 10% of retailers require ID for returns made with a receipt, and 73% require ID for returns made without a receipt. Some scan the ID into their own system; others send the info to a third party. If you exceed a retailer's limit for the number of returns within a given time frame or for the value of returned products, you could be denied more returns for a period of time (typically 90 days). If you are given a warning or denied a return, the Retail Equation, a company that collects return information for 27,000 merchants in North America, will provide you with the information in its return-activity report over the phone. To request your report, visit

Despite the general trend toward Grinchier return policies, some retailers are giving shoppers a break during the holidays or when shopping online. Last year, 10% of retailers relaxed their return policies for the holidays, and similar promotions are expected this year. Lenient online return policies and acceptance of returns in stores for items bought online will likely continue. Look for free shipping for both purchases and returns, which Neiman Marcus debuted in October.

As policies shift, the key to hassle-free returns will be staying organized. The ReturnGuru app, free for iPhone and Android, lets you snap pictures of your receipts, then saves them and reminds you as the deadline approaches to make returns. The new rules may take some getting used to. But if you expect great deals, that's part of the trade-off.

Tuesday, November 19, 2013

Why college students shy away from CFP exam

Last month, my colleague Mark Schoeff filed a story about a recent survey showing that more than half of college students who had completed financial planning coursework at three universities had decided not to sit for the national exam that would qualify them as certified planners.

Apparently, many felt the test is too hard. I feel their pain.

After completing seven college-level courses at the University of Virginia earlier this year, I was proud to be awarded a certificate in Certified Financial Planning.

I thought balancing work and school was a challenge, but as I am half way through the process of cramming for the CFP exam in November, I realized that this is the hard part.

I knew I needed a review course to prepare for the rigorous two-day, 10-hour exam. I had heard good things about several review programs including Keir, Zahn and Dalton. By process of elimination, I chose the Dalton Review because it offered an in-person review class in the Washington, DC area where I live. (So did the Zahn course but its schedule conflicted with an out-of-town wedding that I plan to attend).

After registering for the course on-line and forking over the $1,195 payment, I received a box i

Monday, November 18, 2013

Apple, Inc. (AAPL): Will Apple Kill Pandora's 185% Rally In 2013?

Any time an 800-pound gorilla moves into the neighborhood current residents have reason to be worried. And that is exactly what is happening with Apple, Inc. (AAPL) and Pandora (P) right now.

Apple has been making headlines lately with the release of its new iPhone and operating system iOS7. But what is turning out to be one of the most interesting components of the release, the iOS7 comes embedded with Apple's new streaming radio service called iTunes Radio. Although iTunes Radio isn't dominating the headlines like the new iPhone 5C, the service is quickly making a big impact on the market and represents a huge threat to Pandora.

At the very top, iTunes Radio offers more than 25 million songs compared to just 1 million for Pandora. That is a huge difference that makes Pandora look like a little kid trying to play with the big boys.

Pandora is also in trouble because half of its 72 million users already use the iPhone, which gives its listeners instant access to a fierce competitor with a much bigger inventory of songs to choose from.

And with hundreds of millions of iPhone users all across the world, Apple has a direct line to an entire new market that Pandora otherwise has little access to.

There may be room for 2 big players in the streaming radio space, but even if that's true, Apple is going to pressure industry margins. That's because streaming radio service providers simply act as distributors and don't control any original content. That makes reach, distribution and margin a simple matter of scale, where the biggest player on the Street can afford lower margins and loss leaders in order to starve smaller players out of profitability.

But it's clear the market doesn't care. Or isn't paying attention. Because Pandora is up 185% in 2013 and trading deep into an all-time high. But those gains aren't being driven by earnings, because Pandora is expected to lose 16 cents this year. 2014 doesn't look much better, when Pandora is supposed to earn a grand total of 6 ! cents.

With shares just shy of $27, that has Pandora trading with a forward P/E of 450x. For comparison sake, it Apple had that same valuation, shares would be trading at $18,000.


The Takeaway

Any time the biggest and baddest kid on the Street moves onto your block it's time to get nervous. And that's exactly what Apple is going, making a bold move into Pandora's turf with its entrance into the streaming radio market. But while this huge threat has emerged, Pandora is up 185% on the year and continues to move deeper into an all-time high. That makes Pandora at risk for both short and long-term losses as the market contemplates this new threat in the face of a ridiculously overvalued share price.

For more top stock picks and analysis, check out a 4-week free trial to Michael's premium newsletter the iStock Growth Trader. The iStock Growth Trader is loaded with the hottest trends, the best stocks and detailed analysis that will keep your portfolio one step ahead of the game.

Sunday, November 17, 2013

Apple Upgraded as Adobe, Oracle Prepare Earnings Reports

NEW YORK (TheStreet) -- We ended last week with Apple (AAPL) ($464.90) testing its 50-day and 200-day simple moving averages converged at $464.93 and $462.16 and with an upgrade to buy from hold according to

As we continue to focus on Apple, which clearly remains one of the benchmark stocks in the computer and technology sector, we also focus on earnings reports from three other stocks in this sector, plus earnings from one stock in the business services sector and another in the industrial products sector.

The computer and technology sector is 25.4% overvalued with the business services sector 20.2% overvalued and the industrial products sector 21.4% overvalued. [Read: Google Laughs at the New iPhones]

Apple is a key component of the Nasdaq, which led the major averages higher last week with the Nasdaq setting a new multi-year high at 3731.84 on Sept. 12. When Apple declined to the 50-day and 200-day SMAs the Nasdaq stalled while the other four major equity averages continued higher. At the Aug. 19 high at 513.74, Apple was rated hold and was testing my annual risky level at $510.64 and the 38.2% Fibonacci Retracement level of the decline from above $700 to below $400. This retracement level is $507.82. My annual value level remains $421.05 with an annual risky level at $510.64. Apple now has a buy rating with its 50-day SMA crossing above its 200-day SMA, which is a technical positive for the stock. Chart Courtesy of Thomson/Reuters The decline in Apple shares prevented the Nasdaq from having a weekly close above annual and monthly risky levels at 3759 and 3772, which delays calling for new all-time highs. The question today is whether or not the Nasdaq can pop above these risky levels on the euphoria that Larry Summers will not be the next Federal Reserve chief. A gain of 37 points for the Nasdaq gets it up to 3759. [Read: Everything You Need to Know About Obamacare State Exchanges] My quarterly and annual value levels remain at 14,288/12,696 Dow Industrials, 1525.6 / 1348.3 S&P 500, 3284 / 2806 Nasdaq, 5348 / 5469 Dow transports, and 863.05 / 860.25 / 809.54 Russell 2000 with monthly and semiannual risky levels remain 16,336/16,490 Dow Industrials, 1766.8/1743.5 S&P 500, 3772/3759 Nasdaq, 7061/7104 Dow transports and 1093.07/1089.42 Russell 2000.

One of the five stocks previewed in this post is undervalued and three of the other five are overvalued by more than 20%. One stock is down 20.7% over the last 12 months, while three have gained between 17.7% and 45.6%. Four of the five are trading above their 200-day SMAs, which reflects the risk of reversion to the mean.

Reading the Table

OV/UN Valued: Stocks with a red number are undervalued by this percentage. Those with a black number are overvalued by that percentage according to ValuEngine. VE Rating: A "1-engine" rating is a strong sell, a "2-engine" rating is a sell, a "3-engine" rating is a hold, a "4-engine" rating is a buy and a "5-engine" rating is a strong buy. Last 12-Month Return (%): Stocks with a red number declined by that percentage over the last 12 months. Stocks with a black number increased by that percentage. Forecast 1-Year Return: Stocks with a red number are projected to decline by that percentage over the next 12 months. Stocks with a black number in the table are projected to move higher by that percentage over the next 12 months. Value Level: Price at which to enter a GTC limit order to buy on weakness. The letters mean; W-weekly, M-monthly, Q-quarterly, S-semiannual and A-annual. Pivot: A level between a value level and risky level that should be a magnet during the time frame noted. Risky Level: Price at which to enter a GTC limit order to sell on strength. Software maker Adobe Systems (ADBE) ($47.76) is above its 50-day SMA at $47.02 with the 2013 high at $48.63 set on July 12. My semiannual value level is $44.85 with an annual risky level at $48.74. The provider of identity uniforms Cintas (CTAS) ($49.70) set a multi-year high at $49.99 on Sept. 10. My semiannual value level is $47.48 with a weekly pivot at $49.68 and monthly risky level $50.07. [Read: 'Secret IPO' or Not: You Won't Pay Attention to Twitter's Risks] Office furniture and seating designer Herman Miller (MLHR) ($26.34) set a multi-year high at $29.70 on Aug. 1 then declined to $25.08 on Sept. 6 holding the 200-day SMA at $25.52. My annual value level is $24.37 with a weekly pivot at $25.51 and semiannual risky level at $28.80.

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Software applications maker Oracle (ORCL) ($32.46) is trading between its 50-day and 200-day SMAs at $32.30 and $33.33. My annual value level is $30.81 with a monthly pivot at $32.33 and annual risky level at $34.68. [Read: For All Our Good, Let Student Debtors Go Bankrupt]

TIBCO Software (TIBX) ($24.61) set a 2013 high at $25.76 on Aug. 1 then declined to $22.23 on Aug. 23 holding the 200-day SMA at $22.10. My monthly value level is $21.86 with a weekly pivot at $23.56 and semiannual risky level at $33.66.

At the time of publication the author held no positions in any of the stocks mentioned.

Follow @Suttmeier This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

Richard Suttmeier has an engineering degree from Georgia Tech and a master of science from Brooklyn Poly. He began his career in the financial services industry in 1972 trading U.S. Treasury securities in the primary dealer community. In 1981 he formed the Government Bond Department at LF Rothschild and helped establish that firm as a primary dealer in 1986. Richard began writing market research in 1984 and held positions as market strategist at firms such as Smith Barney, William R Hough, Joseph Stevens, and Rightside Advisors. He joined in 2008 producing newsletters covering the U.S. capital markets, and a universe of more than 7,000 stocks. Richard employs a "buy and trade" investment strategy and can be reached at

Wednesday, November 13, 2013

Pessimism deepens over budget standoff

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Budget experts say chances have increased that Washington will jeopardize government funding and borrowing in coming months.

NEW YORK (CNNMoney) Budget experts are worried: The chances of a government shutdown and a harrowing ride to raising the debt limit have gone up in the past few weeks.

That's due in part to a fractured Republican Party in the House and perceptions that President Obama is more vulnerable or unpredictable in the wake of the Syria debate.

"We continue to believe disaster will be avoided across each of these issues, but the risk of negative outcomes has increased," Sean West, U.S. policy director for the Eurasia Group, said in a research note Thursday.

Congress, of course, had a full agenda and a tight schedule before Syria took center stage. It must agree to spending levels for fiscal year 2014 -- or at least a short term extension of funding past Oct. 1, the first day of the fiscal year.

If it fails to do so, non-essential parts of the federal government would shut down.

It also must approve a debt ceiling increase by mid-October. If it doesn't, an independent think tank now estimates that the Treasury Department would not have enough cash coming in to pay all the country's bills in full sometime between Oct. 18 and Nov. 5. After the so-called "X" date, barring a higher debt ceiling, the country would default on some of its obligations.

In both cases, many conservatives in the House want to make the defunding or delay of Obamacare a condition for their support to fund the government and raise the debt limit. That's a non-starter for Democrats and President Obama. What's more the administration has insisted it won't negotiate over the raising the debt limit.

And, of course, there's the perennial disagreement over spending levels between the Republicans and Democrats, an old argument made much more complicated by the existence of the much-maligned sequester.

When it comes to the deals that will be cut to assure approval of funding and a higher debt limit, budget experts aren't expecting much. "Big- and medium-term deals don't seem attainable now," said Robert Greenstein, executive director of the Center on Budget and Policy Priorities, at a National Journal event Thursday

William Hoagland, senior vice president of the Bipartisan Policy Center, also is not holding his breath. "I've given up on grand bargains."

Funding the government and raising the count! ry's legal borrowing limit, of course, are among the legislature's most basic functions.

And yet, in recent years, both efforts have been stymied by political demands and brinksmanship.

"It's extraordinary how dysfunctional our system has become and how casually we accept it," said Rudolph Penner, a former director of the Congressional Budget Office speaking at the same National Journal event.

West and others who joined Greenstein, Hoagland and Penner think a short-term funding bill is likely to get through. But beyond that is anyone's guess.

Republican Sen. Orrin Hatch, a keynote speaker at the event, was asked whether he thought there was a chance for a Christmastime crisis. "It's very possible," he said. To top of page

Tuesday, November 12, 2013

Sell Coal Stocks — King Coal Gets Dealt Its Final Blow

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HollyFrontier Eats Up Perpetual $3-Plus Gas

It finally looks like old King Coal will be losing its crown as one of America's major producers of electric power. For investors, that means the time to bow out of coal producers could be at hand.

The fossil fuel’s had a hard time going the last few years as natural gas has eaten its lunch in the cost department. Add in new hard-hitting regulations and it's easy to see why shares of coal producers have tanked, mines have been closed and a few producers have even filed for bankruptcy.

Top 5 Safest Stocks To Invest In Right Now

Backing President Obama's promise to tackle climate change, the Environmental Protection Agency (EPA) recently announced strict new limits on newly constructed power plants — a plan designed to cut greenhouse-gas emissions. The new EPA rules build on the already proposed regulations that have caused the coal industry to effectively wither and could stop new coal-fired plants from being built all together.

The core of these new regulations will put a cap on just how much carbon a power plant can throw off.

For a coal-fired plant smaller than 850 megawatts, the facility will be limited to just 1,100 pounds per megawatt hour. That’s a tall order considering the average advanced plant in this size — fit with scrubbers and other carbon reducing equipment — puts out about 1,600 pounds per megawatt. Older coal fired plants emit around 1,700 to 1,900 pounds per megawatt.

In order to reduce the amount toxic output, utilities are going to have to use a process called carbon capture and storage (CCS) — a process that is very expensive hasn’t yet been used on a commercial scale. American Electric Power (AEP) recently shut down tests on a CCS projects due to cost overruns, while Southern's (SO) first large-scale CCS plant under construction is facing local opposition and nearly $1 billion in cost overruns.

The huge drop in allowed output, along with the need to use an unproven technology in new plants, isn’t sitting too well with various power producers and coal producers. Lawsuits and fighting on Capitol Hill are quickly becoming the norm for sector. Several industry lobbyist groups have already proposed ways to fight to the new regulations.

However, all of these efforts still won’t save coal.

Despite being a huge hindrance to the coal sector, the new regulations may not really matter. That's because natural gas continues to make building a new coal plant uneconomical. Even without adding in CCS facilities to a coal-fired plant, the cost is significantly higher than a comparable natural gas plant.

Already fracking and abundant natural gas has changed the economics of producing power for utilities. Experts now predict that natural gas will need to rise to nearly $10 million British thermal units — roughly three times the current price — before coal really begins to make sense for power producers. Interestingly enough, new natural gas-fired plants already met the proposed EPA rules.

According to the Energy Information Administration (EIA), none of the new power plants set to open or expand this year are using coal. Believe or not, there are actually more proposed nuclear facilities on the docket than coal plants. Overall, the EIA expects that U.S. coal consumption to remain essentially flat until 2030, before dropping off a cliff.

That certainly hurts the chances of coal stocks surviving long-term.

Already, the broad Market Vectors Coal ETF (KOL) is down about 21% year-to-date, while individual companies have fared much worst. Peabody Energy Corp. (BTU) — which is the largest U.S. producer — has fallen from more than $70 a share back in April 2011 to less than $19 a share today. Meanwhile, chief rival Arch Coal (ACI) has seen its stock price fall from $35 to less than $5 a share in the same time frame.

While it may be tempting to snag up bargains in the industry, the continued assault against coal and the continued abundance of natural gas make coal stocks clear stocks to sell or avoid, depending on your current position.

As of this writing, Aaron Levitt did not hold a position in any of the aforementioned securities.