Saturday, May 31, 2014

Ten companies with the least valuable workers

Revenue per employee is one measure of a company's productivity. Some companies generate significant revenue per employee that runs into the millions of dollars. Others generate only a fraction of that. While it can suggest a company is struggling, many companies with lower revenue per employee thrive with employees that appear to be less productive.

In many instances, these companies are in the restaurant and hospitality industries. For example, McDonald's paid the average crew members and cashiers only slightly more than the $7.25 per hour minimum wage, according to employee-submitted data from, an online career community.

A number of these businesses depend largely on labor from overseas. Such businesses include Amphenol, which produces electronic and fiber optic cables, and Cognizant, which offers IT outsourcing services. Often, such companies use foreign labor to provide low costs for their own businesses, as well as pass along cost savings to their clients.

MORE: Nine companies with the most unusual origins

Just because a company has relatively low revenue per employee does not mean it will stop hiring. As long as adding more employees continues to be profitable — returning more money to the company than it costs to find, train and pay a worker — businesses have an incentive to keep adding workers. A number of companies where the per-employee revenue is relatively low, such as O'Reilly Automotive and Starbucks, added a considerable number of jobs last year.

Based on figures from S&P Capital IQ, 24/7 Wall St. reviewed the companies with the lowest revenue per employee. In order to be consistent, we used net revenue figures as reported under U.S. generally accepted accounting principles. Employee totals used in this analysis are based on S&P Capital IQ measure of full-time equivalent employees. In some instances, S&P Capital IQ employee totals may include franchisee workers, a large part-time or hourly labor force, or a largely foreign-base! d workforce. We also reviewed financial information published in company presentations, filings with the U.S. Securities and Exchange Commission (SEC) and metrics calculated by Morningstar. Darden Restaurants was excluded from this analysis, due to the recent divestiture of its Red Lobster chain.

These are the 10 companies with the least valuable workers.

1. Starwood Hotels & Resorts

> Revenues per employees: $33,700
> Total revenues: $6.1 billion
> Total employees: 181,400
> Industry: Hotels, resorts and cruise lines

Starwood Hotels & Resorts is one of the largest hotel chains in the world, with locations in nearly 100 countries. It had a total of 1,175 franchised, owned and managed hotels and other properties worldwide as of its latest full fiscal year. To manage these hotels, Starwood Hotels & Resorts Worldwide Inc. (NYSE: HOT) employed 181,400 workers at locations owned or managed by the company at the end of its fiscal year.

Last year, the company reported total revenues of $6.1 billion, equivalent to roughly $34,000 per employee. However, that figure may be skewed because the company opened 74 hotels in 2013 and increased its headcount from 171,000 the year before.

2. Yum! Brands

> Revenues per employees: $42,600
> Total revenues: $13.1 billion
> Total employees: 307,230
> Industry: Restaurants

Yum! Brands, owner of the Pizza Hut, KFC and Taco Bell chains, had one of the lowest ratios of total revenue to number of employees in 2013, at just $42,600 per year-end employee. While the company lists more than 300,000 employees, many of these are employed by franchisees, who operated more than 29,000 of the roughly 40,000 Yum! Brands restaurants last year. The bulk of these restaurants were abroad, often in countries like India and China, where wages are typically lower than in the United States. The company has been criticized for its stateside pay practices, and it has opposed a federal minimum wage h! ike.

3. Cognizant Technology Solutions

> Revenues per employees: $51,600
> Total revenues: $8.8 billion
> Total employees: 171,400
> Industry: IT consulting and other services

Top 5 Semiconductor Companies To Watch For 2015

Cognizant Technology Solutions reported $8.8 billion in revenue in its most recent fiscal year, a more than 20% increase from the year before. Salaries reported on are quite high given Cognizant had just $51,600 in sales per employee last year. For example, a systems analyst earned more than $55,673 per year on average. The company's low revenue to workforce ratio could be due in part to cheap labor abroad.

The IT consulting firm is known for outsourcing services and employs a relatively large portion of its workforce overseas. The company employed roughly 133,000 of its 171,400 workers at year-end in the Asia-Pacific region, with the majority of development and delivery centers and technical professionals located in India.

MORE: The states with the strongest and weakest unions

4. McDonald's

> Revenues per employees: $63,900
> Total revenues: $28.1 billion
> Total employees: 440,000
> Industry: Restaurants

McDonald's, which employed 440,000 last year — mostly low-wage employees — has been at the forefront of the minimum wage debate. According to, the average crew member made $7.77 per hour. By contrast, CEO Donald Thompson made a total of $9.5 million in salary and bonuses in 2013. Additionally, groups such as the National Employment Law Project have argued that McDonald's profitability and cash balances indicate it could afford to pay workers a higher wage.

McDonald's revenue per employee was just $63,900. The company's revenue per worker figures do not account for employees working at McDonald's franchises. Fees from franchisees account for $9.2 billion, or rou! ghly 33%,! of the company's $28.1 billion in total revenue. When franchise employees are included, McDonald's employed 1.8 million people worldwide.

MORE: Companies with the best (and worst) reputations

5. Chipotle Mexican Grill

> Revenues per employee: $70,900
> Total revenues: $3.2 billion
> Total employees: 45,340
> Industry: Restaurants

Chipotle Mexican Grill — the wildly successful former McDonald's-owned fast-casual Mexican restaurant — has continued to grow even as food costs have increased. Total revenues grew last year by 17.7% from the year before, among the higher one-year revenue growth rates in the S&P 500. Despite the hype, Chipotle still trails a number of larger chains in sales.

The company's most recent fiscal year revenue of $3.2 billion is still just a fraction of Yum! Brands' and McDonald's respective revenues. The burrito chain has relatively few employees, with slightly more than 45,000 full-time workers as of last year. And while the company's revenue per employee was a little more than $70,000, the company is profitable with earnings that have risen dramatically in recent years.

24/7 WALL ST.: Starbucks, others round out rest of the Top 10

24/7 Wall St. is a USA TODAY content partner offering financial news and commentary. Its content is produced independently of USA TODAY.

Friday, May 30, 2014

Top 10 Telecom Stocks To Invest In 2015

Top 10 Telecom Stocks To Invest In 2015: Mobile TeleSystems (MBT)

Mobile TeleSystems OJSC, together with its subsidiaries, provides telecommunications services primarily in the Russian Federation, Ukraine, Uzbekistan, Armenia, and Belarus. The company provides a range of mobile and fixed line voice and data telecommunications services, including transmission, broadband, pay-TV, and various value-added services; and sells equipment and accessories. It also offers network access services, including mobile cellular voice and data communication services; automatic roaming services; GPRS and Internet access services; and 3G technology. In addition, the companys services include the design, construction, and installation of local voice and data networks capable of interconnecting with fixed line operators; installation and maintenance of cellular payphones; lease of digital communication channels; and provision of access to open computer databases and data networks, including the Internet, as well as video conferencing, and fixed, local, and long-distance telecommunications services. Its value-added services comprise call divert/forwarding, caller ID and anti-caller ID display, conference calling, WiFi, GPRS, intelligent call assistant, APN remote access point, fixed mobile convergence, enhanced data rates for GSM Evolution, call barring, SMS, mobile office, voicemail, mobile banking, wireless application protocol, MTS-Connect, SIM-browser, point-to-point transfer, unstructured supplementary services data, downlink packet access, mobile TV, call waiting, MMS, ring tones, missed call alert, itemization of monthly bills, information and directory, international access, WEB and WAP portal, customer care system, ring back tone, collect call, and location-based services. As of December 31, 2011, the company had a mobile subscriber base of approximately 101.14 million. It has a strategic partnership with Vodafone. The company was founded in 1993 and is headquartered in Moscow, the Russian Federation. Advisors' Opinion:

  • [By Dan Radovsky]

    VimpleCom, a joint venture of Norwegian telecom Telnor and the Russian Alfa Group, operates under the BeeLine brand in Russia. BeeLine has joined the two other ex-iPhone carrying Russian heavyweight mobile carriers, Megafon and Mobile TeleSystems (NYSE: MBT  ) , and not renewed its iPhone contract with Apple.

  • source from USA Best Stocks:

3 Travel Stocks to Buy as Vacationers Pinch Pennies

Facebook Logo Twitter Logo RSS Logo Louis Navellier Popular Posts: 5 Biotech Stocks Promising Future RewardsTurn Trash To Treasure with These Hot Small Caps3 High-Yield Income Stocks Worth Every Penny Recent Posts: 3 Travel Stocks to Buy as Vacationers Pinch Pennies Turn Trash To Treasure with These Hot Small Caps These 2 Travel Stocks Have Blue Skies Ahead View All Posts

Memorial Day weekend marks the unofficial beginning of the summer travel season. Many investors are going to take this as an opportunity to jump in and blindly buy travel stocks as a theme for their portfolio.

That's a terrible idea.

We saw all sorts of articles this week suggesting you rush out to buy the hotel and recreation stocks as the season for summer fun begins. This is another one of those ideas that sounds fantastic, but the numbers tell a different story. Using Portfolio Grader to look at the travel and recreation stocks, I'm seeing discount airlines and -related stocks as strong buys among travel stocks — not the resorts and recreation stocks.

Southwest Airlines (LUV) has long been one of the favorite choices of cost-conscious travelers, and the company is having a fantastic 2014 so far. Earnings are up 87% so far this year; in the most recent quarter Southwest had year-over-year earnings growth of more than 160%. Analysts have been raising their estimates for both the rest of 2014 and 2015 as the fundamentals continue to just get better quarter after quarter. The stock is rated "A" by Portfolio Grader and is a "Strong Buy" at the current price.

Spirit Airlines (SAVE) is quickly becoming a favorite of budget travelers. Spirit is a no-frills airline that allows customer to take advantage of very low fares and then pay for any upgrades they may desire. Consumers seem to like it, as earnings are up more than 60% so far this year. The company is doing better than Wall Street was expecting and earnings estimates have been raised several times in the past month. Spirit Airlines just announced a bunch of seasonal routes for summer travel to places like Atlantic City and Myrtle Beach — that move should help drive profits all summer long. The stock is rated "A" by Portfolio Grader and remains a "Strong Buy."

Consumers are pinching pennies when they book their travel as well. The desire to save as much as possible on air travel, hotels and vacation packages is driving sales and earnings growth at industry-leading online travel concern Priceline (PCLN). In spite of all the attention Priceline gets from Wall Street, this company continually outperforms their expectations. Priceline has posted four consecutive positive earnings surprises, and analysts recently raised estimates for the summer travel season and the rest of 2014. The stock has received an "A" grade from Portfolio Grader since January and remains a "Strong Buy" today.

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Travel season is upon us, but that doesn't mean all travel stocks will move higher. Using Portfolio Grader can help you find those stocks that will see powerful profit increases from cost-conscious vacationers this summer.

Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth, Emerging Growth, Ultimate Growth, Family Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, Louis Navellier may hold some of the aforementioned securities in one or more of this newsletters.


Thursday, May 29, 2014

10 Best Canadian Stocks To Watch Right Now

10 Best Canadian Stocks To Watch Right Now: CF Industries Holdings Inc. (CF)

CF Industries Holdings, Inc., through its subsidiary, CF Industries, Inc., manufactures and distributes nitrogen and phosphate fertilizer products, serving agricultural and industrial customers worldwide. It operates in two segments, Nitrogen and Phosphate. The Nitrogen segment principally offers ammonia, granular urea, urea ammonium nitrate solution, urea liquor, diesel exhaust fluid, and aqua ammonia. The Phosphate segment primarily offers diammonium phosphate and monoammonium phosphate. The company also owns 50% interests in the GrowHow UK Limited, a nitrogen products producer in the United Kingdom; Point Lisas Nitrogen Limited, an ammonia producer; and KEYTRADE AG, a global fertilizer trading company. CF Industries Holdings customers include cooperatives and independent fertilizer distributors primarily in the midwestern United States. The company was founded in 1946 and is headquartered in Deerfield, Illinois.

Advisors' Opinion:
  • [By Neha Chamaria]

    When CF Industries' (NYSE: CF  ) stock dropped like a rock in April, I strongly felt that it was nearing a reversal. Urging investors to buy the stock, I backed it up with an outperform call on my CAPS portfolio.

  • [By Johanna Bennett]

    CF Industries (CF) rose 10.7% to $237 after the fertilizer maker said its evaluating its dividend payment.

    General Motors (GM) rose 1.54% to $38.71 on news that hedge fund Hayman Capital has taken a stake in the automobile maker and says the stock could rise more than 40% in the next 12 to 18 months after the U.S. Treasury sells its stake in the company.

  • source from USA Best Stocks:

Hot Rising Stocks To Invest In 2015

Hot Rising Stocks To Invest In 2015: Shutterstock Inc (SSTK)

Shutterstock, Inc. (Shutterstock) operates as a marketplace for commercial digital imagery. Commercial digital imagery consists of licensed photographs, illustrations and videos that companies use in their visual communications, such as Websites, digital and print marketing materials, corporate communications, books, publications and video content. As of April 30, 2012, Shutterstock's image library contained more than 19 million images. It operates in North America, Europe and Rest of the world. The Company offers a range of content types, including photography, illustrations, vector art and video footage. Shutterstocks brands include Shutterstock and Bigstock. Its online marketplace provides a freely searchable library of commercial digital images that its users can pay to license, download and incorporate into their work. Users can search its library and preview watermarked versions of its content. In November 2011, Shutterstock launched Shutterstock for iPad, an appl ication enabling visitors to search, browse and organize images using an iPad.

The Companys products consist of Photographs, Illustrations and Vector Art, and Video Footage. The Company offers photographs that cover a range of subjects, including animals/wildlife, the arts, backgrounds/textures, beauty/fashion, buildings/landmarks, business/finance, celebrities, education, food and drink, healthcare/medical, holidays, nature, objects, people, religion, science, sports/recreation, technology and transportation. Its photography collection is made up of images that can be used in both commercial and editorial contexts. Images that are marked as editorial-only, such as photographs of celebrities and newsworthy events, which constitute fewer than 5% of its total images, cannot be used to promote a product or service; instead these images are licensed for use in editorial settings, such as newspapers, blogs and magazines. Photographs are available in a rang! e of si zes, including small files that are appropriate for mobile b! rowsing and large files appropriate for large format prints and high-resolution displays. As of December 31, 2011, photographs made up 69% of its library.

In addition to photographic images, the Company also offers images that have been created using illustration tools and software. These images are made up of two types: illustrations (raster graphics) and vector art (vector graphics). Raster graphics are stored as a fixed set of pixels, whereas vector graphics are stored using geometric modeling. As of December 31, 2011, illustrations an vector art made up 28% of its library. For users engaged in producing video advertisements, commercial motion pictures, television programming, video games, interactive applications and other video-based media, it also provides video footage. Footage clips are available in a range of formats and sizes, including high definition (HD). As of December 31, 2011, its video footage library contained more than 400,000 video clips and made up 3% of its library.

The Company competes with iStockphoto, Fotolia, Dreamstime, Getty Images, Corbis Corporation, Reuters Group PLC, the Associated Press, Thought Equity Motion, Facebook and Flickr.

Advisors' Opinion:
  • [By Brian D. Pacampara]

    Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, online imagery marketplace operator Shutterstock (NYSE: SSTK  ) has received an alarming one-star ranking.

  • [By Dave and Donald Moenning]

    Internet Software & Services has been the place to be in 2013. In addition to Shutterstock (SSTK), just take a look at these constituents of this red-hot sub-industry: Pandora Media (P), Facebook (FB), j2 Global (JCOM), Yelp (YELP), CoStar Group (CSGP),LinkedIn (LNKD), etc. The list of superb stocks in the Internet Software & Services space goes on and on. Focusing on s! tocks in ! the top-performing sub-industries usually helps bullish trades, so today, let's take a closer look at Shutterstock Inc for a short-term long trade.

  • source from Top Penny Stocks For 2015:

Wednesday, May 28, 2014

Top 5 Regional Bank Companies To Watch For 2015

Top 5 Regional Bank Companies To Watch For 2015: Enanta Pharmaceuticals Inc (ENTA)

Enanta Pharmaceuticals, Inc., incorporated on July 25, 1995, is a research and development-focused biotechnology company. The Company uses its chemistry-driven approach and drug discovery capabilities to create small molecule drugs in the infectious disease field. The Company is discovering and developing novel inhibitors designed for use against the hepatitis C virus (HCV). These inhibitors include members of the direct acting antiviral (DAA) inhibitor classes-protease (partnered with AbbVie, the former research-based pharmaceutical business of Abbott Laboratories), NS5A (partnered with Novartis) and nucleotide polymerase, as well as a host targeted antiviral (HTA) inhibitor class targeted against cyclophilin. ABT-450, discovered through its collaboration with AbbVie, is a protease inhibitor that has demonstrated in vitro potency against known resistant HCV mutants.

In Phase I studies, ABT-450 co-administered with ritonavir, a commonly used boosting agent to increase the blood concentrations of many protease inhibitors, was shown to be safe and well tolerated. Co-administration of ABT-450 with ritonavir, which it refers to together as ABT-450/r, has enabled once-daily dosing of ABT-450. Phase II studies have demonstrated the efficacy of ABT-450/r in patients with chronic HCV, and other interferon-free Phase II studies of ABT-450-containing regimens continue. AbbVie is developing a next-generation protease inhibitor discovered within the Enanta-AbbVie collaboration. EDP-239 is the NS5A inhibitor discovered by the Company. The Company also has a program to develop nucleotide inhibitors to HCV NS5B polymerase, which is another DAA mechanism considered to have a barrier to resistance. The Company's Bicyclolide antibiotic product candidate is EDP-788, which it is developing for use as an intravenous dr! ug in the hospital setting and for oral dosing in the home setting. EDP-788 is a prodrug, which means that it is inactive until it is converted in the body into an active compound. EDP-788 is! a water-soluble molecule which, when administered in preclinical models, is cleanly and rapidly converted into the active compound.

Advisors' Opinion:
  • [By George Budwell]

    Normally, such strong efficacy results would be hailed as a major achievement. However, these results are actually less impressive than those by competing drug's developed by AbbVie (NYSE: ABBV  ) , Enanta Pharmaceuticals (NASDAQ: ENTA  ) and Gilead. Bristol-Myers' therapy also has a treatment duration double that of Gilead's drug Sovaldi for genotype 1 patients. So, while these results are impressive in their own right, the therapy's commercial prospects may be limited due to the presence of superior competitors in the market. 

  • [By Sean Williams]

    The next big thing in treating hepatitis-C
    The other currently experimental therapy very likely to make it onto the FDA's desk before the midpoint of 2014 is AbbVie's (NYSE: ABBV  ) direct-acting antiviral combo drug. In similar fashion to Sovaldi, this DAA-combo therapy, which includes ABT-450 from Enanta Pharmaceuticals (NASDAQ: ENTA  ) , is running six confirmatory late-stage trials on various genotypes. There are, however, two primary differences between AbbVie's DAA-combo therapy and Sovaldi.

  • source from Top Stocks For 2015:

Hot Gas Stocks To Buy For 2015

Hot Gas S tocks To Buy For 2015: Exxon Mobil Corporation(XOM)

Exxon Mobil Corporation engages in the exploration and production of crude oil and natural gas, and manufacture of petroleum products, as well as transportation and sale of crude oil, natural gas, and petroleum products. The company manufactures and markets commodity petrochemicals, including olefins, aromatics, polyethylene and polypropylene plastics, and other specialty products. As of December 31, 2010, it operated 35,691 gross and 30,494 net operated wells. The company has operations in the United States, Canada/South America, Europe, Africa, Asia, and Australia/Oceania. Exxon Mobil Corporation was founded in 1870 and is based in Irving, Texas.

Advisors' Opinion:
  • [By Charley Blaine]

    Apple (NASDAQ: AAPL) reports fiscal-fourth-quarter results after Monday's close. Starbucks (NASDAQ: SBUX) reports after Wednesday's close. Oil giants Exxon Mobil (NYSE: XOM) and Chevron (NYSE: CVX) report on Thursday and Friday, respectively.

  • [By Rich Smith]

    Air Combat Command did not say whether the funds released Monday were related to the $2.3 billion in jet fuel supply contracts awarded to ExxonMobil (NYSE: XOM  ) and other major oil suppliers, announced by the Department of Defense in June. In any event, funds authorized by Congress to reinstate these flight missions will only pay for flights through October 1.After that, and absent new funding, flight time will have to be cut again.

  • [By Arjun Sreekumar]

    A primer on Kashagan
    Kashagan is a vast untapped oil field in Kazakhstan with massive hydrocarbon potential. Yet, despite its operators -- a consortium of companies including ExxonMobil (NYSE: XOM  ) , Eni, and Royal Dutch Shell --having plowed more than $30 billion into the project over the past decade, the field has yet to produce a single drop of oil.

  • [By Arjun Sreekumar]

    For instance, net income margi! ns for ExxonMobil (NYSE: XOM  ) , BP (NYSE: BP  ) , and Total have all fallen from their highs near the middle of the previous decade. Last year, BP and Total reported margins of 3.1% and 5.9%, respectively, down significantly from 2005 respective margins of 9.2% and 10.5%.

  • source from Top Penny Stocks For 2015:

Tuesday, May 27, 2014

LinkedIn Cashing In: Social Network To Raise $1B In Share Offering As Stock Flies High

LinkedIn LinkedIn is ready to cash in on its high-flying stock.  The professional social network filed documents with the SEC revealing plans to raise about $1 billion in a share offering in order to strengthen its balance sheet, as its stock trades near all-time highs.  Regardless of the big offering, control of the company remains deeply concentrated in the hands of co-founder and Chairman Reid Hoffman, who will still hold nearly 60% of voting power after the offering.

LinkedIn is offering 4.166 million shares in a secondary offering, which should net the company about $1 billion given the stock's closing price on August 30, when it changed hands for $240.04.  Lead underwriter JPMorgan and its peers will have 30 days to decide whether to buy up to 15% more of common stock, form S-3 filed with the SEC showed.

Management has no specific intention behind raising capital, rather, it is looking to bolster its financial position, probably taking advantage of an impressive run in the stock; shares in LinkedIn have gained more than 110% this year and have more than quintupled since their 2011 stock market debut.

Despite recent declines in the face of possible military intervention in Syria and the slowing rate of Fed asset purchases, U.S. stock markets remain well into positive territory this year, with the S&P 500 hitting record highs about a month ago.  LinkedIn, therefore, has joined other ourperformers in taking advantage of the year's impressive performance for risk assets.

Back in May, Tesla, which is up more than 375% this year, raised nearly $1 billion selling shares and convertible notes.  Billionaire founder and CEO Elon Musk even doubled down on his company, raising his stake in Tesla, as my colleague Steve Schaefer reported. Yet neither of the two high-profile offerings crack the top twenty list, which includes Thermo Fisher and Valeant Pharmaceuticals, both of which raised more than $2 billion, according to market intelligence firm Ipreo.  To make it in, LinkedIn will have to raise more than the $1.12 billion raised by LyondellBasel in early August.

Like Tesla, LinkedIn's offering comes after a solid performance in recent quarters.  LinkedIn beat Wall Street's consensus estimates for both revenue and profit in the second quarter, raising guidance and noting a 37% increase in members to 238 million in early August, helping boost its stock further.  Unlike Facebook, LinkedIn has seen its shares consistently gain since going public in 2011, and like Mark Zuckerberg's social network, management is concerned over margin erosion as traffic moves to mobile devices.  Also mimicking their social networking cousin, LinkedIn will see control of the company remain well in the grip of co-founder and Chairman Reid Hoffman, who will hold 59.3% of voting power after the offering.

For the moment, though, they will bask in the glory of a skyrocketing stock price and continued quarterly success.  The stock, which had gained 2.5% in normal trading hours, receded 2.2% to $240.78 in post-market trading in New York.

Monday, May 26, 2014

Iran billionaire executed over $2.6B bank fraud

TEHRAN, Iran (AP) — A billionaire businessman at the heart of a $2.6 billion state bank scam in Iran, the largest fraud case since the country's 1979 Islamic Revolution, was executed Saturday, state television reported.

Authorities put Mahafarid Amir Khosravi, also known as Amir Mansour Aria, to death at Evin prison, just north of the capital, Tehran, the TV reported. The report said the execution came after Iran's Supreme Court upheld his death sentence.

Khosravi's lawyer, Gholam Ali Riahi, was quoted by news website as saying that the death sentence was carried out without him being given any notice. Death sentences in Iran are usually carried out by hanging.

"I had not been informed about the execution of my client," Riahi said. "All the assets of my client are at the disposal of the prosecutor's office."

State officials did not immediately comment on Riahi's claim.

The fraud involved using forged documents to get credit at one of Iran's top financial institutions, Bank Saderat, to purchase assets including state-owned companies like major steel producer Khuzestan Steel Co.

Khosravi's business empire included more than 35 companies from mineral water production to a football club and meat imports from Brazil. According to Iranian media reports, the bank fraud began in 2007.

A total of 39 defendants were convicted in the case. Four received death sentences, two got life sentences and the rest received sentences of up to 25 years in prison.

The trials raised questions about corruption at senior levels in Iran's tightly controlled economy during the administration of former President Mahmoud Ahmadinejad.

Mahmoud Reza Khavari, a former head of Bank Melli, another major Iranian bank, escaped to Canada in 2011 after he resigned over the case. He faces charges over the case in Iran and remains on the Islamic Republic's wanted list. Khavari previously admitted that his bank partially was involved in the fraud, but has maintained his innoc! ence.

Sunday, May 25, 2014

How Will This Downgrade Affect Keurig Green Mountain (GMCR) Stock?

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NEW YORK (TheStreet) -- Shares of Keurig Green Mountain Inc.  (GMCR) were downgraded to "neutral" from "buy" at Roth Capital which maintained its price target of $120.00.

The stock is down -1.18% to $112.46 in pre-market trade.

Must Read: Warren Buffett's 25 Favorite Growth Stocks STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Separately, TheStreet Ratings team rates KEURIG GREEN MOUNTAIN INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate KEURIG GREEN MOUNTAIN INC (GMCR) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, expanding profit margins, good cash flow from operations and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity." Highlights from the analysis by TheStreet Ratings Team goes as follows: GMCR's revenue growth has slightly outpaced the industry average of 3.0%. Since the same quarter one year prior, revenues slightly increased by 9.8%. Growth in the company's revenue appears to have helped boost the earnings per share. GMCR's debt-to-equity ratio is very low at 0.08 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 2.84, which clearly demonstrates the ability to cover short-term cash needs. KEURIG GREEN MOUNTAIN INC has improved earnings per share by 18.4% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, KEURIG GREEN MOUNTAIN INC increased its bottom line by earning $3.16 versus $2.28 in the prior year. This year, the market expects an improvement in earnings ($3.74 versus $3.16). 47.54% is the gross profit margin for KEURIG GREEN MOUNTAIN INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 14.69% is above that of the industry average. Net operating cash flow has increased to $320.94 million or 19.95% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -20.80%. You can view the full analysis from the report here: GMCR Ratings Report STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Saturday, May 24, 2014

The Home Depot, Inc. (NYSE:HD) Q1 Earnings Preview: Q1 – The Unkind Quarter

The Home Depot, Inc. (NYSE:HD) is scheduled to report first quarter, 2014 sales and earnings before the open of the financial markets on Tuesday, May 20, 2014. On the same day, management will host a conference call at 9 a.m. ET to discuss the results.

Wall Street anticipates that home improvement retailer will earn $0.99 per share for the quarter, which is $0.16 more than last year's profit of $0.83 per share. iStock expects HD to top Wall Street's consensus number, the iEstimate is $1.00.

Revenue, like earnings, is expected to trend higher, increasing 4.3% year-over-year (YoY). The Home Depot's consensus revenue estimate for Q1 is $19.95 billion, more than last year's $19.12 billion.

[Related -May 20 Breakdown Trend Day Trading Update]

The Home Depot is the world's largest home improvement specialty retailer, with 2,263 retail stores in all 50 states, the District of Columbia, Puerto Rico, U.S. Virgin Islands, Guam, 10 Canadian provinces and Mexico.

Predicting an earnings surprise from HD is almost like predicting that the sun sets in the west and rises in the east. The specialty-retailer has exceeded Wall Street's consensus estimate 15 of the last 16 quarterly checkups. On average, Home Depot earned $0.04 more than projected with a range of $0.01 to $0.08 beyond expectations.

For the most part, EPS-Driven price sensitivity followed along with all the bullish surprises. Shares gained ground in the days surrounding 10 of the last 16 earnings announcements. Typically, HD stock moved 3.79% higher when Wall Street was satisfied with the profit scorecard.

[Related -The Home Depot, Inc. (NYSE:HD): More Room For Improvement]

Meanwhile, investors sold-off shares of The Home Depot six times, dropping an average of -3.37%. There appears to be some seasonality to negative reaction as the May announcement i.e. Q1 accounts for three of the six EPS driven corrections, which includes the two worst selloffs of -7.10% and -6.40%. The Emerald month has been anything but green for HD shareholders in the last four years.

Best Stocks For 2015

The harsh winter has been a problem for many retailers. Anecdotally, The Home Depots near this author say many empty parking lots during the polar vortex months. However, the spots filled up as the weather warmed up and the most recent trip saw less available parking than can be recalled. That might be bad for Q1 but good for Q2 guidance.

Overall: The Home Depot, Inc.'s (NYSE:HD) history and iEstimate suggest a better than expected result for the home improvement retailer; however, the first quarter has not been kind to investors so earnings traders might consider taking a pass on HD.  

A Great Investment Opportunity with This Leading Restaurant Chain

Best Telecom Companies For 2015

The restaurant sector is always a hot favorite among people as there are many varieties of restaurants that cater to the demographics of people in the U.S. One player in this industry with a casual dining facility is Buffalo Wild Wings Inc. (BWLD).

Founded in 1982, this Minneapolis, Minn.-based company owns, operates and franchises its restaurants. It is usually set in a suburban or rural environment. With a market cap of $2.68 billion, this restaurateur has 1,018 restaurants in the U.S., Canada and Mexico (574 franchised and 444 company-owned). Wings, beer and sports are the three main components of this company as the people of America like them most. Further, it provides customers with Beefy Burgers, Sharables, Thin Crust Flatbreads, Wraps, Buffalitos, Sandwiches and Salads with 21 mouth-watering signature flavors. Buffalo Wild Wings sells on average 21 million traditional and boneless wings each week, and offers a full bar and up to 40 television sets per outlet and is famous for its bar concept and "dine and watch game" facility.

Tracking the Performance

On April 28, Buffalo Wild Wings reported fiscal first-quarter results ended March 30, 2014. Adjusted earnings of $1.49 per share for the first quarter increased 71.3% to $1.49 from $0.87. Net earnings leaped 72.9% to $28.3 million from $16.4 million. Total revenue increased 20.9% year over year to $367.9 million, compared to $304.4 million in the first quarter of 2013. Company-owned restaurant sales for the quarter increased 21.3% over the same period in 2013, to $344.9 million, driven by a company-owned same-store sales increase of 6.6% and 46 additional company-owned restaurants at the end of first quarter 2014 relative to the end of the same period in 2013. Franchise royalties and fees increased 14.9% to $22.9 million for the quarter versus $19.9 million in the first quarter of 2013. This increase is attributed to a franchise same-store sales increase of 5.0% and 55 additional franchised restaurants at the end of the period versus a year ago. A chart has been provided below to show the company's financial summary.

Average weekly sales for company-owned restaurants were $60,966 for the first quarter of 2014 compared to $56,953 for the same quarter last year, a 7.0% increase. Franchised restaurants averaged $63,852 for the period versus $60,050 in the first quarter a year ago, a 6.3% increase. Franchise royalties and fees increased 14.9% year over year to $22.9 million, led by 55 new restaurant openings at quarter-end. The year-over-year increase in franchise royalties and fees also reflects a 5.0% rise in franchise same-store sales, better than a 2.2% rise in the year-ago quarter and a 3.1% rise last quarter. A chart has been provided below to show the company's balance sheet.

What's Next

President and Chief Executive Officer Sally Smith said that earnings will increase 25.0% year over year, higher than prior expectation of 20.0%. She also added that the company's second quarter has started with a great momentum. Same-store sales rose 5.7% at company-owned locations and 4.4% at franchised locations. Excluding the slowing effects of the timing of the Easter holiday, same-store sales rose 6.6% and 5.3% of the company-owned and franchised locations, respectively.

Head to Head

Buffalo Wild Wings faces stiff competition from McDonald's Corp (MCD), Darden Restaurants Inc. (DRI) and Chipotle Mexican Grill Inc. (CMG). Last year, McDonald's faced chicken wing problem and was left with 10 million pounds of unsold chicken wings. This made Buffalo Wild Wings to secure its position. Further, it was selling wings by the portion instead of by the number. Darden Restaurants is not performing well, and its fiscal second-quarter earnings missed consensus by a large margin. Its key brand Olive Garden also underperformed for the majority of fiscal 2013. Further, the company is planning to spin off its Red Lobster brand. This paved the way for Buffalo Wild Wings to dominate the market.

Chipotle Mexican Grill and Buffalo Wild Wings both have experienced high growth in the past year and they are investing in craft pizza companies. Chipotle invested in the idea of a small Denver fast casual pizzeria, Pizzeria Locale, that can serve a fresh piping hot pizza in less than two minutes. On the other hand, Buffalo Wild Wings invested in a small but growing Southern California pizza chain, PizzaRev. PizzaRev affords customers the ability to build their own custom pizzas from a variety of sauces, cheeses, and toppings displayed in front of them, all for under $10. On May 14, 2014, Buffalo Wild Wings opened its first PizzaRev franchise in Hopkins, Minn., in suburban Minneapolis. Pizza is one of the most popular meals in the U.S. and most of the restaurateurs are making pizza fast and individually tailored to cater to consumers with specific preferences, and therefore both companies are looking for the next brand to propel further growth. Unlike Chipotle, Buffalo Wild Wings relies heavily on franchises for international growth, and this allows for rapid expansion in a capital-efficient way.


Buffalo Wild Wings' growth strategy includes continuing development to 1,700 locations in the U.S. and Canada, international growth through franchising, expansion through emerging brands, driving sales through innovation and branding, and sustaining net earnings growth by strong restaurant performance and infrastructure leveraging. The company is currently focusing on international expansions and five franchisees have agreements for 45 restaurants in Mexico, United Arab Emirates, Saudi Arabia and the Philippines. It is also planning to expand its wings in the lands of India, South Korea and Vietnam.

On March 6, 2014, Buffalo Wild Wings announced its partnership with NTN Buzztime Inc. (NTN) to bring the company's BEOND tablet-based entertainment platform to all of their North America restaurant locations by the end of 2015. Buzztime's BEOND tablet lets Buffalo Wild Wings Guests order food, request songs and television programming, play games (both multi-player and arcade-style), and pay the bill.

To Put the Pieces Together

Over the past three years, Buffalo Wild Wings has been a strong growth story. Between 2011 and 2013, the company saw its revenue increase 61% from $784.5 million to $1.3 billion.

Charts from company website

This leading restaurant chain has created a niche in the hearts of the people as it is a fan-favorite restaurant. As a leader in the sports bar and wings segment, Buffalo Wild Wings has strong long term growth plans. The company has shown great performance in the earlier years, and is well positioned to do so in the future. Further, the company's investment strategy, service strategy, technology platform and emerging brands have made its position well ahead than its peers. Therefore, I believe that this company has a great investment opportunity in the long run.

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BWLD STOCK PRICE CHART 144.09 (1y: +52%) $(function(){var seriesOptions=[],yAxisOptions=[],name='BWLD',display='';Highcharts.setOptions({global:{useUTC:true}});var d=new Date();$current_day=d.getDay();if($current_day==5||$current_day==0||$current_day==6){day=4;}else{day=7;} seriesOptions[0]={id:name,animation:false,color:'#4572A7',lineWidth:1,name:name.toUpperCase()+' stock price',threshold:null,data:[[1369371600000,94.53],[1369717200000,95.9],[1369803600000,95.19],[1369890000000,95.74],[1369976400000,95.96],[1370235600000,96.04],[1370322000000,95.85],[1370408400000,93.67],[1370494800000,95.36],[1370581200000,97.06],[1370840400000,98.01],[1370926800000,98.2],[1371013200000,97.02],[1371099600000,98.15],[1371186000000,97.35],[1371445200000,97.17],[1371531600000,99.3],[1371618000000,99.17],[1371704400000,97.46],[1371790800000,95.35],[1372050000000,94.44],[1372136400000,96.97],[1372222800000,99.37],[1372309200000,98.31],[1372395600000,98.24],[1372654800000,99.47],[1372741200000,99.58],[1372827600000,99.39],[1373000400000,101.24],[1373259600000,102.77],[1373346000000,103.65],[1373432400000,103.61],[1373518800000,104.34],[1373605200000,104.96],[1373864400000,105.05],[1373950800000,100.5],[1374037200000,100.26],[1374123600000,99.83],[1374210000000,100.06],[1374469200000,99.84],[1374555600000,98.12],[1374642000000,95.44],[1374728400000,95.92],[1374814800000,97.93],[1375074000000,98.39],[1375160400000,97.69],[1375246800000,103.58],[1375333200000,106.84],[1375419600000,107.14],[1375678800000,108.25],[1375765200000,106.9],[1375851600000,106.48],[1375938000000,106.92],[1376024400000,106.74],[1376283600000,106.25],[1376370000000,105.18],[1376456400000,105.08],[1376542800000,105.07],[1376629200000,104.92],[1376888400000,105.11],[1376974800000,107.19],[1377061200000,106.62],[1377147600000,109.55],[1377234000000,108.41],[1377493200000,107.98],[1377579600000,105.03],[1377666000000,105.12],[1377752400000,105.61],[1377838800000,103.91],[1378184400000,104.9],[1378270800000,105.76],[1378357200000,105.6],[1378443600000,104.68],[1378702800000,105.57],[1378789200000,107.27],[1378875600000,107.25],[1378962000000,107.4],[1379048400000,109.82],[1379307600000,110.62],[1379394000000,111.34],[1379480400000,110.87],[1379566800000,109.88],[1379653200000,109.55],[1379912400000,108.65],[1379998800000,108.35! ],[1380085200000,108.35],[1380171600000,109.83],[1380258000000,109.5],[1380517200000,111.175],[1380603600000,116.248],[1380690000000,120.36],[1380776400000,115.43],[1380862800000,116.04],[1381122000000,113.93],[1381208400000,113.1],[1381294800000,113.26],[1381381200000,117.12],[1381467600000,119.42],[1381726800000,119.21],[1381813200000,120.34],[1381899600000,119.6],[1381986000000,118.49],[1382072400000,119.43],[1382331600000,118.53],[1382418000000,123.06],[1382504400000,121.43],[1382590800000,121.11],[1382677200000,125.07],[1382936400000,126.36],[1383022800000,129.51],[1383109200000,141.22],[1383195600000,142.58],[1383282000000,142.745],[1383544800000,144.96],[1383631200000,150.38],[1383717600000,145.72],[1383804000000,143.07],[1383890400000,145.11],[1384149600000,144.51],[1384236000000,144.82],

Wednesday, May 21, 2014

5 Best Logistics Stocks To Own Right Now

Tesla Motors Inc. (NASDAQ: TSLA) will need to adopt some kind of a local dealership network in the United States if it is going to sell more than tens of thousands of cars a year. The logistics of selling cars without dealers is difficult. Too many states insist that dealers be conduits for new car sales. And too many consumers want a place, with an address and a building, to go to buy and fix their cars. Tesla will need a partner that has a large dealership network, so it does not have to incur those costs itself. Without a doubt, Tesla will have a U.S. partnership with a major manufacturer before the end of 2014.

Tesla has several good reasons for rejecting the dealership path. It sets quality control, both in terms of how it handles new customers, and maintenance and repair for existing ones. Dealer service for all manufacturers ranges from excellent to poor, and some of the performance is beyond the daily control of the car companies.

Tesla does not have to pay a middle man. Its sells a car. It collects the purchase price. The government takes whatever cut it is due. In theory, Tesla’s margins, based on percentage of sticker price, are better than those for most other manufacturers. Changing that only makes Tesla less profitable, and less attractive to Wall Street.

5 Best Logistics Stocks To Own Right Now: Time Warner Inc.(TWX)

Time Warner Inc. operates as a media and entertainment company in the United States and internationally. It operates in three segments: Networks, Filmed Entertainment, and Publishing. The Networks segment provides domestic and international networks, premium pay and basic tier television programming services, and digital media properties, which primarily consist of brand-aligned Websites. Its premium pay television services consist of the multi-channel HBO and Cinemax premium pay television services. This segment provides programming to cable system operators, satellite service distributors, telephone companies, and other distributors; sells advertising; and licenses original programming to domestic and international television networks. The Filmed Entertainment segment produces and distributes feature films, television and other programming, and videogames; distributes home video products; and licenses rights to its feature films, television programming, and characters. T he Publishing segment publishes magazines and books; and operates various Websites, as well as engages in marketing services and direct-marketing businesses. This segment publishes magazines on style and entertainment, lifestyle, news, and sports. The company?s brands include TNT, TBS, CNN, HBO, Cinemax, Warner Bros., New Line Cinema, People, Sports Illustrated, and Time. Time Warner Inc. was founded in 1985 and is headquartered in New York, New York.

Advisors' Opinion:
  • [By Alex Planes]

    Established in 1985 with the merger of Time Inc. and Warner Communications, Time Warner Inc (NYSE: TWX  ) is a global leader in media and entertainment, with a similar operations profile as Disney spanning television networks, filmed entertainment productions, and publishing. Headquartered in New York City, the company operates pay-TV channels�such as HBO�and Cinemax, and it also owns a portfolio of cable TV networks including CNN, TBS,�and TNT through its subsidiary Turner Broadcasting. Subsidiary Time�is the publisher of major consumer titles such as People, Time, and Fortune in the magazine space. In the last decade, Time Warner spun off former acquirer AOL, Time Warner Cable, and Warner Music Group to increase shareholder value.


    Paul Sakuma/AP From a cereal giant infuriating its fans to the leading online retailer boosting the pedigree of its catalog, here's a rundown of the week's smartest moves and biggest blunders in the business world. Apple (AAPL) -- Winner It's been a while since Apple produced blowout quarterly results, but that's what happened on Wednesday. The consumer tech giant moved higher after posting better than expected earnings, margins and iPhone sales. The report wasn't perfect. Bulls will point to the 17 percent spike in iPhone units sales, but bears can counter that Apple sold 16 percent fewer iPads than it did a year earlier. However, when you tack on Apple's declaration of a stock split and a beefed-up share buyback, it was clearly a quarter for the bulls. General Mills (GIS) -- Loser Sometimes it doesn't pay to update a company's privacy policy. Cereal giant General Mills came under fire earlier this month after introducing new legal terms. The updated policy going out to anyone interacting with General Mills online would "require all disputes related to the purchase or use of any General Mills product or service to be resolved through binding arbitration." It got called out in a New York Times article, suggesting that anyone doing something as simple as using an online coupon or liking the company's Cheerios page on Facebook would not be able to sue the company. General Mills argued that the policy was being misread and misunderstood, but it reversed the language. Judging by the comments on that Cheerios page, it seems that some irate consumers aren't so quick to forgive General Mills. (AMZN) -- Winner One of the knocks on Amazon's new Fire TV set-top media player is that it doesn't stream HBO Go content, but Amazon and HBO parent Time Warner (TWX) have agreed to remedy the situation later this year. However, the bigger deal between Time Warner and Amazon is that HBO will be making many older shows and earlier seasons of some current show

5 Best Logistics Stocks To Own Right Now: Robert Half International Inc.(RHI)

Robert Half International Inc. provides staffing and risk consulting services in North America, South America, Europe, Asia, and Australia. Its Accountemps division offers temporary staffing in the fields of accounting, tax, and finance. The company?s OfficeTeam division places temporary and full-time office and administrative personnel, ranging from word processors to office managers. Its Robert Half Finance & Accounting division specializes in the placement of full-time accounting, financial, tax, and banking personnel. The company?s Robert Half Technology division specializes in providing information technology contract consultants; and placing full-time employees in the areas, ranging from multiple platform systems integration to end-user support, including specialists in programming, networking, systems integration, database design, and help desk support. Its Robert Half Legal division places temporary and full-time employees in attorney, paralegal, legal administrati ve, and legal secretarial positions. The company?s Robert Half Management Resources division offers senior level project professionals in the accounting and finance fields comprising chief financial officers, controllers, and senior financial analysts for various tasks, such as financial systems conversions, expansion into new markets, business process reengineering, and post-merger financial consolidation. Its Creative Group division serves clients in the areas of advertising, marketing, and Web design; and places project consultants in various positions consisting of creative directors, graphics designers, Web content developers, Web designers, media buyers, and public relations specialists. The company?s Protiviti division provides experts specializing in risk, advisory, and transactional services. Robert Half International was founded in 1948 and is based in Menlo Park, California.

Advisors' Opinion:
  • [By Mark Hulbert]

    Apple�� profitability is in the middle of the pack among nonfinancial companies in the S&P 500 (SPX) �. The most profitable, according to AQR Capital Management, a money-management firm in Greenwich, Conn., with more than $80 billion in assets, is staffing firm Robert Half International (RHI) �, whose gross profitability is 119%. In second place is cosmetics giant Est茅e Lauder (EL) �, at 114%.

  • [By idahansen]

    The entire demand labor industry should do well as the US Department of Labor just reported that 169,000 more jobs were added to the American economy. The more work there is, the more demand there is for the services of staffing solutions firms such as Labor SMART, Paychex (NASDAQ: PAYX), TrueBlue (NYSE: TBI), and Robert Half International (NYSE: RHI).

  • [By Marc Bastow]

    Employment staffing and risk management services provider Robert Half (RHI) raised its quarterly dividend 12.5% to 18 cents per share, payable March 14 to shareholders of record as of Feb. 25.
    RHI Dividend Yield: 1.78%

Top Undervalued Stocks For 2015: Blue Nile Inc.(NILE)

Blue Nile, Inc. operates as an online retailer of diamonds and fine jewelry worldwide. Its fine jewelry selection includes diamond, gemstone, platinum, gold, pearl and sterling silver jewelry, and accessories, as well as wedding bands, earrings, necklaces, pendants, bracelets, and watches. Blue Nile, Inc. sells its products through the Web sites,, and The company was formerly known as Internet Diamonds, Inc. and changed its name to Blue Nile, Inc. in November 1999. Blue Nile, Inc. was founded in 1999 and is headquartered in Seattle, Washington.

Advisors' Opinion:
  • [By Holly LaFon]

    We think the next chapter of Internet growth will be driven by increasing broadband penetration and mobile 3G rollouts globally. Baron invests in the global Internet in two ways: 1) U.S. based Internet companies that have substantial international businesses, and 2) foreign based Internet companies. Several Baron portfolio holdings such as Google, Inc. and, Inc. receive 50% or more of their revenues outside the U.S., and we think the faster growth of Internet access in emerging economies will be a substantial benefit to these companies. Other Baron portfolio companies such as LinkedIn Corp. (LNKD) and Blue Nile, Inc. (NILE) are also accelerating their efforts to penetrate international markets in 2012 and beyond.

5 Best Logistics Stocks To Own Right Now: Booz Allen Hamilton Holding Corp (BAH)

Booz Allen Hamilton Holding Corporation (Booz Allen Holding), incorporated in May 2008, is a provider of management and technology consulting services to the United States government in the defense, intelligence and civil markets. In addition, it provides management and technology consulting services to corporations, institutions, and not-for-profit organizations. During the fiscal year ended March 31, 2012 (fiscal 2012), it derived 98% of its revenue from services provided to more than 1,200 client organizations across the United States government under more than 5,800 contracts and task orders. During fiscal 2012, it derived 90% of its revenue in fiscal 2012 from engagements, for which it acted as the prime contractor. On November 30, 2012, the Company purchased the Defense Systems Engineering and Support (DSES) division of ARINC Incorporated.

Defense Clients

During fiscal 2012, the Company�� defense business revenue represented 53% of its business. It works with its the United States Army clients to help sustain their land combat capabilities while responding to current demands and preparing for future needs. The services, which it provided include enhancing field intelligence systems, delivering rapid response solutions to counter improvised explosive devices, infusing lifecycle sustainment capabilities to improve distribution and delivery of material, and employing systems and consulting methods to help expand care and support for soldiers and their families. Its clients include Army Headquarters, Army Material Command (AMC), Forces Command (FORSCOM), Training and Doctrine Command (TRADOC), and Program Executive Offices, Direct Reporting Units and Army Service Component Commands.

The Company employs a multidimensional approach, which analyzes and balances people, processes, technology, and infrastructure to meet their missions of equipping global forces. Its clients include the Office of the Secretary of the Navy, Chief of Naval Operations, the Commandant ! of the Marine Corps to the Office of Naval Intelligence, and the United States Navy/Marine Corps operating commands and systems commands, as well as the Joint Program Executive Offices (PEO) and individual PEOs, such as Naval Air Systems Command (NAVAIR), Naval Seas Systems Command (NAVSEA), United States Marine Corps Systems Command, and Space and Naval Warfare (SPAWAR).

The Company provides integrated strategy and technical services to the United States Air Force. It brings capabilities to assignments, which includes weapons analysis, capability-based planning, and aircraft systems engineering. It also supports the space industry. Its clients include Air Combat Command, Air Force Space Command, Air Force Materiel Command, Air Mobility Command, Air Force Cyber Command, Air Force Pacific Command and National Aeronautics and Space Administration (NASA).

The Company provides mission-critical support to the Office of the Secretary of Defense, the Joint Staff, the Combatant Commands (COCOMs), and other the United States government departments and agencies during the planning and mission execution phases. Its clients include organizations within the Office of the Secretary of Defense and the Department of Defense�� agencies, as well as the Pacific Command, Northern Command, Central Command, the Defense Information Systems Agency (DISA), Southern Command, European Command, Strategic Command, Special Operations Command, and Transportation Command.

The Company provides solutions designed to protect infrastructure systems for the public and private sector to its United States government defense and intelligence agency clients to meet cyber warfare threats. Its cyber professionals handles the sensitive materials, assist clients in all phases of cyber-security operations and dynamic network defense. It develops cyber-security solutions utilizing a multi-dimensional approach, including people, operations, technology, policy, and management.

Intelligence Clients

The Company provides the primary group of government agencies and organizations, which carry out intelligence activities for the United States government (the United States Intelligence Community), with consulting and mission support services in analysis, systems engineering, program management, operations, organization, and change management, budget and resource management, studies, and war-gaming. During fiscal 2012, its intelligence business represented 23% of its business based on revenue. Its intelligence clients include United States Intelligence Agencies, Joint Staff and Unified Combatant Commands, and Military Intelligence.

The Company provides critical support in strategic planning, policy development, program development and execution, information sharing, architecture, and program management for research and development projects, as well as support to reform initiatives flowing from the Intelligence Reform and Terrorism Protection Act. It delivers intelligence analysis, including providing all-source intelligence analysis and open-source intelligence analysis. It also provides data collection management and analytical systems intelligence training services, and provides intellectual capital for intelligence activities. It provides consulting services, integrated intelligence and information operations mission support, and a range of counterintelligence services to the United States Army, United States Air Force, United States Navy, Marine Corps, and Defense Intelligence Agency.

Civil Clients

During fiscal 2012, the Company�� civil business represented 24% of its business based on revenue. Its civil government clients include Financial Services, Health, Energy, Transportation and Environment, Justice and Homeland Security, and Business of Government. The Company provides support to the United States government finance and treasury organizations charged with the collection, management, and protection of the United States financial system, including ! the Depar! tment of the Treasury, Internal Revenue Service, and other agencies of the Department of the Treasury, Office of the Comptroller of the Currency, Federal Deposit Insurance Corporation, Federal Reserve Board and Banks, the Securities and Exchange Commission (SEC), and Pension Benefit Guaranty Corporation. It creates approaches to challenging problems, including bank receivership, payment channel modernization, cyber initiatives, and fraud detection.

The Company supports United States government clients on projects, which helps to achieve public health missions, including entitlement reform, developing a national health information network, mitigating risk to populations, improving government infrastructure, and facilitating an international public-private sector dialogue on international health issues. Its clients include the Department of Health and Human Services and its agencies, including the United States Food and Drug Administration, National Institutes of Health, Centers for Disease Control and Prevention (CDC), the Centers for Medicare and Medicaid Services, the Department of Defense Military Health System, and Department of Veterans Affairs.

The Company supports clients in the transportation, energy, and environment sectors which controls over its national infrastructure. Its services include strategy, operations, technology, and engineering. Its clients include the Departments of Energy, Transportation, and Interior and their component agencies, and the Environmental Protection Agency. It also supports the Department of Defense in environmental and infrastructure programs in the United States and Europe. The Company supports the United States government�� homeland security mission and operations in the areas of intelligence (analysis, information sharing, and risk assessment), operations (coordination, contingency planning, and decision support), strategy, technology and management (program management and information technology tools), emergency management and respo! nse plann! ing, and border, cargo, and transportation security. It supports law enforcement missions and operations in counterterrorism, intelligence and counterintelligence, and criminal areas (narcotics, white collar crime, organized crime, and violent crime).

The Company helps agencies manage the business processes, which support government in its provision of services to its citizens, spanning management, personnel, budget operations, information technology, and telecommunications. Its clients include the General Services Administration, Office of Management and Budget, Office of Personnel Management, the Congress and Courts. It also support public sector grant-making agencies, from health and education, to labor and homeland and economic security, serving clients, such as the Departments of Agriculture, Homeland Security, Commerce, Education, Labor, and Housing and Urban Development, as well as the National Science Foundation. In addition, it serves the United States government clients abroad in helping them resolve systemic global development needs. Its clients include the United States Agency for International Development, the Department of State, Millennium Challenge Corporation, and the World Bank.

Commercial and International Clients

The Company is serving industries, such as financial services, healthcare, and energy. Its service offerings to commercial clients include dynamic defense (cyber), next-generation virtual infrastructure, decision analytics, design for affordability, and smart compliance. Its commercial clients include major commercial banks and investment banks, healthcare providers, energy companies, and utilities. Its international activities are focused on the Middle East and North Africa region. Its service offerings to international clients focuses on on-line government services and cloud applications, enterprise resource planning, advanced persistent threat resolution, supervisory control and data acquisition, and geospatial systems. Its internati! onal clie! nts include government ministries and commercial companies in the Middle East and North Africa.

The Company competes with CACI International, Inc., L-3 Communications Holdings, Inc., ManTech International Corp., SRA International, Inc., TASC Inc., General Dynamics Corp., Lockheed Martin Corp., Northrop Grumman Corp., Raytheon Co., Accenture, Computer Sciences Corp., Deloitte Consulting LLP and SAIC, Inc.

Advisors' Opinion:
  • [By Maria Armental and Tess Stynes var popups = dojo.query(".socialByline .popC"); ]

    Booz Allen Hamilton Holding Corp.(BAH) said its fiscal fourth-quarter earnings declined 14% as the consulting company reported weaker revenue amid uncertainties about government spending. Still, adjusted earnings beat expectations.

  • [By Rich Smith]

    The biggest of these contracts, a sizable $179.9 million, one-year award with the potential to swell to $899.5 million if the four "option-year" extensions are exercised, is to be split among 13 separate firms:

    Booz Allen Hamilton (NYSE: BAH  ) CACI (NYSE: CACI  ) Technologies Computer Sciences Corp (NYSE: CSC  ) General Dynamics (NYSE: GD  ) One Source Honeywell (NYSE: HON  ) Technology Solutions Engility Corp. Lockheed Martin Science Applications International Corp. URS Federal Services and four privately held firms.

    Under the awarded indefinite-delivery/indefinite-quantity (IDIQ), cost-plus-fixed-fee, performance-based umbrella contract, all 13 firms will be able to compete to perform task orders for the U.S. Navy, providing "integrated cyber operations services" to Space and Naval Warfare Systems Center Atlantic.

5 Best Logistics Stocks To Own Right Now: Axis Capital Holdings Limited (AXS)

AXIS Capital Holdings Limited provides specialty lines insurance and treaty reinsurance products in Bermuda, the United States, Europe, Singapore, Canada, Australia, and Latin America. The company�s Insurance segment offers property insurance for commercial buildings, residential premises, construction projects, and onshore energy installations; marine insurance covering offshore energy, cargo, liability, recreational marine, fine art, specie, hull, and war; and aviation, terrorism, credit and political risk, and liability insurance. It also provides professional lines that cover directors� and officers� liability, errors and omissions liability, employment practices liability, fiduciary liability, crime, professional indemnity, and other financial insurance related coverage; and accidental death, travel, and specialty health products for employer and affinity groups, financial institutions, schools, and colleges, as well as accident and health reinsurance for catastrop hic or per life events. This segment offers its products through wholesale and retail brokers, managing general agents, and underwriters. Its Reinsurance segment provides non-life reinsurance to insurance companies, including catastrophe; property reinsurance covering property damage and related losses resulting from natural and man-made perils; professional lines; credit and bond reinsurance; and motor reinsurance providing coverage to cedants for motor liability and property damage losses. This segment also offers coverage to insurers of standard casualty business, excess and surplus casualty business, and specialty casualty programs; coverage for various types of construction risks and risks associated with the erection, testing, and commissioning of machinery and plants during the construction stage; and aviation, marine, personal accident, and crop reinsurance. AXIS Capital Holdings Limited was founded in 2001 and is headquartered in Pembroke, Bermuda.

Advisors' Opinion:
  • [By Dividends4Life]

    Fair Value: In calculating fair value, I consider the NPV MMA Differential Fair Value along with these four calculations of fair value, see page 2 of the linked PDF for a detailed description: 1. Avg. High Yield Price 2. 20-Year DCF Price 3. Avg. P/E Price 4. Graham Number CINF is trading at a discount to only 3.) above. The stock is trading at a 36.8% premium to its calculated fair value of $34.96. CINF did not earn any Stars in this section. Dividend Analytical Data: In this section there are three possible Stars and three key metrics, see page 2 of the linked PDF for a detailed description: 1. Free Cash Flow Payout 2. Debt To Total Capital 3. Key Metrics 4. Dividend Growth Rate 5. Years of Div. Growth 6. Rolling 4-yr Div. > 15% CINF earned two Stars in this section for 1.) and 2.) above. A Star was earned since the Free Cash Flow payout ratio was less than 60% and there were no negative Free Cash Flows over the last 10 years. The stock earned a Star as a result of its most recent Debt to Total Capital being less than 45%. The company has paid a cash dividend to shareholders every year since 1954 and has increased its dividend payments for 54 consecutive years. Dividend Income vs. MMA: Why would you assume the equity risk and invest in a dividend stock if you could earn a better return in a much less risky money market account (MMA) or Treasury bond? This section compares the earning ability of this stock with a high yield MMA. Two items are considered in this section, see page 2 of the linked PDF for a detailed description: 1. NPV MMA Diff. 2. Years to > MMA The NPV MMA Diff. of the $62 is below the $500 target I look for in a stock that has increased dividends as long as CINF has. If CINF grows its dividend at 1.2% per year, it will take 5 years to equal a MMA yielding an estimated 20-year average rate of 3.68%. Memberships and Peers: CINF is a member of the S&P 500, a Dividend Aristocrat, a member of the Broad Dividend Achievers��Index and a Divid

Tuesday, May 20, 2014

A Horrible Chart to Trade for Wonderful Gains

DELAFIELD, Wis. (Stockpickr) -- The stock market is once again under heavy selling pressure today, with the Dow Jones Industrial Average off by 139 points, the S&P 500 down by 13 points and the tech-heavy Nasdaq trending lower by 32 points.

>>3 Stocks Breaking Out on Big Volume

Despite the weak action in the markets, there's one group of stocks that traders continue to come after with force. That group is what I like to call "horrible charts." These oversold, beaten-down stocks with poor-looking technicals are where all the money is being made right now as large traders chase this group looking for quick rebound moves. This is a theme and pattern in the markets that I think is going to continue to play out, since there are so many candidates for this chart pattern.

Take, for example, the run we've seen in shipping player NewLead Holdings (NEWL) over the last few days. You'll be hard-pressed to find a worse-looking chart then NEWL over the last six months. Things got so bad for this company that last Thursday it announced a 1-for-50 reverse stock split for its common shares so that the company could maintain its compliance with being listed on the Nasdaq. Shares of NEWL are soaring higher today by 80% in a tough tape -- and the stock is up much more than that when you consider that its post-split low was 39 cents per share.

>>5 Rocket Stocks Ready for Blastoff

Horrible charts are in play for various reasons. In many of these names, the short-sellers have overstayed their welcome and pushed these stocks down to absurd levels. Then when the bulls start buying, the smart short-sellers are covering quickly, causing large spikes higher. In addition, many of these stocks have entered extremely oversold territory, and there isn't anyone left willing to sell these stocks down at their depressed levels.

Many traders are unwilling to go near these ugly charts, but that's a foolish way to approach the markets since this theme is trending and working in a tough market where the usual sector trends aren't playing out. This game is all about finding trends and exploiting what's working right in front of you, even if it's something you have avoided in the past. I like to think of it as playing in the sandbox that everyone else on Wall Street is playing in. If nobody is in your sandbox, it's probably time to find another one.

One beaten-down and extremely oversold that's not going down today is Plug Power (PLUG).

As I write this, shares of PLUG are trending modestly higher by 1.4% to around $4.50 per share. Shares of Plug Power have been slammed lower by the sellers over the last three months, with shares down sharply from its 52-week high of $11.72 a share to its recent low of $3.62 a share. That's a massive slide lower and Plug Power didn't help the cause after the company recently announced some large secondary offerings.

Plug Power has a market cap of $613 million and an enterprise value of $514 million. This stock currently trades at a premium valuation, with a forward price-to-earnings of 227. Its estimated growth rate for this year is 67.6%, and for next year it's pegged at 118.2%. This is a cash-rich company, sine the total cash position on its balance sheet is $63.23 million and the total debt is just $3.61 million

Recently, Cowen upgraded shares of Plug Power to outperform from market perform. The firm mentioned that it took a tour of the company's factories and saw a high level of activity for its GenKey fuel cell product. The firm also said that strong year-to-date bookings should lead to fourth-quarter profitability, and Plug Power's strong cash position should enable it to develop new products, expand into Asia and support its expansion into the hydrogen generation market. Cowen cut its price target on PLUG to $6 from $7.50 based on higher expenses and new shares issues by the company.

From a technical perspective, shares of Plug Power has been downtrending badly over the last three months, with shares moving lower from its 52-week high of $11.72 to its recent low of $3.62 a share. That said, shares of PLUG have for now stopped its downtrend once the stock hit is low of $3.62 a share, which corresponds with a previous low back in February around $3.36 a share. This bounce off that $3.62 low could be signaling a bottom is in for shares of PLUG in the near-term and this stock is now quickly moving within range of triggering a major breakout trade.

Traders should look for long-biased trades in PLUG if it manages to break out above some key near-term overhead resistance levels at $4.55 to $5 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 48.10 million shares. If that breakout launches soon, then PLUG will set up to re-test or possibly take out its next major overhead resistance level at its 50-day moving average of $5.93 a share. Any high-volume move above $5.93 will then give PLUG a chance to tag $7 a share.

Traders can look to buy shares of PLUG off weakness as long as it's trending above some near-term support at around $4 a share. One can also just buy PLUG off strength once it takes out those breakout levels with volume and then simply use a stop that sits a comfortable percentage point from your entry.

This is a heavily shorted stock, since the current short interest as a percentage of the float for Plug Power is sits at around 20%. Those shorts have banked big coin over the last three months, but I have a sneaking feeling that they've started to cover some of their trades and are now flipping to the long side.

The bottom line: Horrible charts are working in this market, and shares of Plug Power currently have all the characteristic of a horrible chart. A solid trading opportunity could be developing for this horrible chart soon and there are already plenty of short-sellers involved in this name. If we see further strength for shares of PLUG in the near-term, then this horrible chart could turn into a great trade if it breaks out above the key resistance levels I highlighted on the chart.

-- Written by Roberto Pedone in Delafield, Wis.


>>3 Big Stocks to Trade (or Not)

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Follow Stockpickr on Twitter and become a fan on Facebook.

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

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

Monday, May 19, 2014

5 Rocket Stocks Ready for Blastoff

BALTIMORE (Stockpickr) -- 2014's stock market performance so far has been a bit, well, uninspiring. Since the calendar flipped to January, the big S&P 500 index has climbed a whopping 1.6%. And drilling down to individual names yields some even less impressive returns.

>>Must-See Charts: 5 Big Stocks to Trade for Gains This Summer

But the statistics still favor more upside this year, following 2013's huge run higher. Since 1975, there have been only 11 years when the S&P 500 has returned more than 20% in a single calendar year. And in those years, average gains for the following year have come in at a hefty 12.8%.

That means that Mr. Market could still have a lot of catching up to do in the latter half of this year. To take full advantage of the trend, we're turning to a fresh set of "Rocket Stocks" for this week.

For the uninitiated, "Rocket Stocks" are our list of companies with short-term gain catalysts and longer-term growth potential. To find them, I run a weekly quantitative screen that seeks out stocks with a combination of analyst upgrades and positive earnings surprises to identify rising analyst expectations, a bullish signal for stocks in any market. After all, where analysts' expectations are increasing, institutional cash often follows. In the last 249 weeks, our weekly list of five plays has outperformed the S&P 500 by 76.85%.

>>Sell These 5 Toxic Stocks Before It's Too Late

Top 10 Blue Chip Stocks To Watch Right Now

Without further ado, here's a look at this week's Rocket Stocks.


First up is Apple (AAPL), a name that's been serving up some market-beating performance in the last few months. In the trailing six months, shares of the technology giant are up more than 15%. And there's good reason for investors to expect more of the same for the next six months.

>>5 Stocks Ready to Break Out

Apple owns some of the most popular consumer electronic devices on the market today. The firm's physical offerings range from its iPhone and iPad to the Macintosh line of computers. But Apple is also one of the largest sellers of digital content through its iTunes store, a venture that makes Apple the biggest music and video store on the planet. Despite hugely competitive markets for smartphones and tablets, AAPL claims the leading market share of the industry's profits, a fact that gives the firm a deep moat.

Those huge profits have added up to an equally deep war chest for Apple over the last several years. Today, the firm boasts approximately $134 billion in net cash and investments, a cushion that covers approximately 25% of the firm's current market capitalization. Ex-cash, Apple's P/E ratio currently stands at just 10.5, a paltry valuation for the most profitable firm in the business.

This Rocket Stock has more room to run in 2014.

Walt Disney

Shareholders of Walt Disney (DIS) have been laughing all the way to the bank for the last year, outperforming the broad market over that stretch by more than double as Mickey Mouse and friends generated gains of more than 20.7% since last summer. Disney's huge collection of valuable assets gives it advantages that can't be replicated by rivals.

>>Hedge Funds Hate These 5 Stocks -- Should You?

Even though Mickey, Donald and Goofy are the first names that spring to mind when most people say the Disney name, those classic characters represent a small chunk of Disney's overall empire today. Disney earned around half of its profits through television networks such as ABC, A&E and the Disney Channel. ESPN, though, is the star of the show: It is the most valuable network in the world, capturing a bigger piece of your cable bill than any other network out there. Smart acquisitions such as Pixar and Marvel give Disney an even bigger collection of IP -- and more important, talent -- that should help produce blockbusters for years to come.

Meanwhile, Disney's theme parks are starting to enjoy the other side of the cyclical downdraft that hindered them during the Great Recession. Because Disney is highly integrated, it's able to take popular characters from a film and move them into TV, theme parks and merchandise, multiplying the value of its efforts and trimming costs. There's a lot to like about Disney's business in 2014.


$25 billion insurance name Allstate (ALL) tips the scales as the second-largest U.S. personal lines and property-casualty insurer. The firm sells automotive, homeowners and life insurance as well as other financial products through a network of approximately 10,000 Allstate agents as well as a network of banks and independent agents. In the insurance business, size comes with some serious advantages, and Allstate is riding those advantages to profit; with a huge customer base, the firm is able to cross-sell multiple policies to its existing customer Rolodex.

>>5 Stocks Under $10 Set to Soar

That network effect is effectively the only advantage there is in the insurance business these days. Let's face it: the insurance business has become largely commoditized these days. That's why ALL's ability to spread risk across a larger pool of subscribers is crucial to keeping costs low -- and crucial to winning and keeping customers. Allstate's reputation and customer service give the firm the ability to be a bit more risk-conscious than many of its rivals, but ultimately ALL needs to remain competitive on price first and foremost.

The firm's decision to trim its homeowner's insurance portfolio has been a step in that same direction. It cuts catastrophic risk in favor of more auto insurance, which is much more quantifiable (and less subject to one-time catastrophes). Look out for earnings on July 28 as a potential rally catalyst.


SanDisk (SNDK) has trounced the broad market in 2014 -- there's just no other way to way it. Since the beginning of January, shares of the $20 billion computer storage stock have climbed 29%. And that momentum isn't showing any signs of waning in May.

>>5 Stocks Insiders Love Right Now

SanDisk is one of the tech sector's biggest suppliers of NAND flash memory, a business that gives the firm exposure to a hot market that's been supply-constrained for the last several years. SNDK's memory is used in all sorts of electronic devices today, and quick replacement cycles in mobile devices and rising demand from enterprise users are helping to propel demand (and margins) for the firm. Better still, a robust patent portfolio means that the firm benefits from the overall growth of the NAND flash memory market, regardless of who's manufacturing the memory.

Despite its huge run this year, SNDK isn't looking particularly expensive at current levels. The firm currently sports more than $4.2 billion in net cash and investments on its balance sheet, enough dry powder to pay for more than 20% of the firm's current market capitalization today. That's a lot of risk reduction for a name that's been rallying hard for quite a while now. With rising analyst sentiment in shares this week, we're betting on shares of this Rocket Stock.

Keurig Green Mountain

Vermont-based Keurig Green Mountain (GMCR) is another name that's posted huge momentum performance in 2014 -- the coffee company has rallied more than 50% this year alone. And while that momentum put a big target on GMCR's back a couple of months ago, as former momentum winner began to roll over, shares have been recovering hard in May.

GMCR's Keurig brand of coffee brewers and single-serve K-Cup pods have been a phenomenon -- and they're not showing any signs of slowing. With the biggest installed base in the single-serve space, Keurig has some huge advantages over its rivals right now, especially as the firm gets ready to launch its second-generation pod offerings. GMCR operates under the razor/blade model: by giving customers a deal on its brewing machines, Keurig stands to make substantial profits by selling coffee pods on an ongoing basis. Despite the competition in this space, other brands have failed to replicate Keurig's scale...

Make no mistake, Keurig isn't cheap right now. But that hefty price tag comes from a big growth assumption and the potential for transformative new products like the Keurig Cold, which got a big nod from beverage behemoth Coca-Cola (KO) with a huge stake in GMCR earlier this year. The volatility isn't likely over in this name yet, but then again, the gains aren't either.

To see all of this week's Rocket Stocks in action, check out the Rocket Stocks portfolio at Stockpickr.

-- Written by Jonas Elmerraji in Baltimore.


>>4 Stocks Spiking on Big Volume

>>3 Stocks Under $10 Making Big Moves

>>This Beaten-Down Stock Is Ready to Rebound

Follow Stockpickr on Twitter and become a fan on Facebook.

At the time of publication, author was long AAPL.

Jonas Elmerraji, CMT, is a senior market analyst at Agora Financial in Baltimore and a contributor to

TheStreet. Before that, he managed a portfolio of stocks for an investment advisory returned 15% in 2008. He has been featured in Forbes , Investor's Business Daily, and on Jonas holds a degree in financial economics from UMBC and the Chartered Market Technician designation.

Follow Jonas on Twitter @JonasElmerraji

Sunday, May 18, 2014

Let’s Talk About Stocks

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I've been saying for a couple weeks now that, based on the fact that interest rates rode a decades-long downtrend into an historically low range, it's likely that there's only room to go up from here.

And yet the yield on the 10-year US Treasury note, a widely followed benchmark, continues to make new 2014 lows.

The timing and magnitude of the increase are still open questions. But we still seem to be stuck in a low-growth environment. And that augurs continued subdued inflation.

Slower growth relative to historical norms also suggests that when the Fed does get around to raising its benchmark fed funds rate increases will be slow and not as aggressive compared to past tightening cycles.

The Australian dollar and the Canadian dollar have shown some stability in recent weeks, though the Land Down Under remains vulnerable to a sharp slowdown of Chinese growth and US GDP data are not positive for the Great White North.

Against this backdrop I sat for my monthly chat on April 30, 2014, with subscribers to Utility Forecaster, Canadian Edge and Australian Edge.

What follows is an edited transcript of the session.

Question: How do you feel about Southern Company's (NYSE: SO) quarter? Do you think they have turned the corner?

Answer: I was encouraged by Southern Company's revenue and earnings, with solid sales numbers across its four-state territory.

I was a little troubled by the new cost overruns and the delay of in-service date until 2015 at the Kemper IGCC plant in Mississippi. The 3.4 percent dividend increase was good news, and the Vogtle nuclear project is on track. I rate the stock a buy under 46.

Question: Do you consider Canadian stocks overvalued?

Answer: I usually don’t use such generalizations. I focus on buy-under targets for individual companies. The S&P/TSX Composite Index has indeed enjoyed a solid run since mid-2012. Bu! t, again, focus on individual companies and their ability to sustain and grow dividends.

Question: What do you think of AT&T Inc (NYSE: T) and Verizon Communications Inc (NYSE: VZ)? Both stocks have been in a downtrend lately.

Answer: AT&T had a great quarter in terms of postpaid wireless subscriber additions, beating Verizon for the first time in a while. And Verizon posted another quarter of double-digit earnings growth.

I would look at this weakness as an opportunity to pick up a couple solid long-term holdings that still occupy dominant positions in the US wireless market.

Question: Should we consider selling some utilities because of [the April 29, 2014] Supreme Court ruling upholding the EPA on interstate air emissions?

Answer: I posted a Utility & Income commentary on the Supreme Court’s decision on May 1, 2014.

There will be some negative impact for generators with a heavy tilt toward coal in their overall mix. But the big decision will come June, when the Supremes rule on emissions from existing coal-fired plants.

Coal, however, is not going away. It’s still the cheapest fuel to burn. This will raise the costs, but it won’t kill it as a source of producing electric power in the US–at least not yet.

Question: Please comment on the potential for a dividend cut or other major changes at Liquor Stores NA (TSX: LIQ, OTC: LIQSF) due to recent management/director changes.

Answer: Management recently announced a $16 million plan to upgrade stores and its technology platform as a means of improving performance.

More importantly, the payout ratio for 2013 was a very manageable 50 percent. The company is struggling in Kentucky and with the prevalence of state-owned liquor stores in the US in general, which limits opportunities for expansion.

But I think the board changes don’t signal an imminent dividend cut.

Question: I still don’t know what to do about the dividends issued by Dun! dee REIT ! (TSX: D-U, OTC: DRETF), Artis REIT (TSX: AX-U, OTC: ARESF) and Canadian Apartment Properties REIT (TSX: CAR-U, OTC: CDPYF), which were reported as non-qualified and therefore taxed at the owners regular tax rate.

But I heard from an accountant that some brokerages are reporting them as qualified. Your answer to me last month was that there is a treaty between the US and Canada that all dividends were to be treated at qualified.

Can you get me a copy of that treaty–the part that states "all dividends will be classified as 'qualified.'" There is a problem if one company is reporting them as qualified and another non-qualified.

Answer: Here’s the long answer: The vast majority of Canadian income trusts converted into corporations in 2011, as a result of the Canadian government's decision to close the loophole that eliminated taxation at the corporate level.

With the notable exception of REITs, most other entities that opted to maintain an income trust structure would be classified as Specified Investment Flow-Through entities (SIFT) and would be taxed at the corporate level.

Distributions from a SIFT held in an IRA aren't subject to the 15 percent withholding tax by the Canadian government. That's because SIFTs essentially have tax parity with corporations, and therefore their distributions are considered dividends under Canadian tax law.

Distributions from REITs, by contrast, will be withheld at the 15 percent rate when US investors hold them in their IRAs or other tax-advantaged accounts.

Unfortunately, the exemption from Canada's withholding tax of 15 percent on dividends/distributions from holdings in US investors' tax-advantaged accounts, such as IRAs and Roth IRAs, only applies to corporations, not REITs.

Furthermore, unlike when Canadian REITs are held within a US investor's taxable account, the amount withheld by the Canadian government from a REIT in an IRA cannot be recaptured via tax credits from the IR! S.

! Question: You have TECO Energy Inc (NYSE: TE) as a buy under 18, but it's also on the Utility Forecaster Dividend Watch List. What do you really recommend?

Answer: TECO Energy is on the DWL because its payout ratio, at more than 90 percent, is a little too high for comfort. At the same time, the company operates in a solid local economy, the Tampa area, with relatively favorable regulation. And more than 80 percent of revenue comes from regulated operations. Its inclusion on the Watch List is a function of its 93.6 percent payout ratio, a cautious measure.

It’s important to note that some companies rated “8″ under the UF Safety Rating System can be rated “hold” on valuation concerns, while others rated “3″, as is TECO, could offer solid value.

Question: I note that National Fuel Gas Co (NYSE: NFG) is usually only rated a “hold.” Yet it's been very consistent with paying dividends–including during the '29 crash and depression that followed.

Why is it only a “hold"?

Answer: The primary concern I have right now about National Fuel Gas is its ongoing shift away from regulated gas utility operations toward unregulated exploration and production activity, which would make for a more volatile revenue and earnings profile.

It’s also trading at steep 22.2 price-to-earnings and 2.73 price-to-book ratios.

Question: Pembina Pipeline Corp (TSX: PPL, NYSE: PBA) is up more than 15 percent over the last three months. Is it still your top pick for new investments now?

And any update on Duke Energy Corp (NYSE: DUK)? If it’s a hold, would one not be better off exchanging it for a solid utility or master limited partnership (MLP) that's rated "buy"?

Answer: Pembina Pipeline has surged well beyond our recommended buy-under target, but it remains one of my favorite invest-to-grow stories.

My favorite MLPs for new money include recent distribution-raisers Kinder Morgan ! Energy Pa! rtners LP (NYSE: KMP) and Plains All American Pipeline LP (NYSE: PAA).

Duke Energy still faces serious questions about the Dan River coal ash spill. But I think it will be able to absorb cleanup costs, appease local, state and federal regulators and continue to grow its dividend.

The stock is trading well above our recommended buy-under target of 62, an indication that the market doesn’t see any debilitating Dan River problems. So it is effectively a hold at these levels.

If you have money to invest, focus on Northeast Utilities (NSYE: NU), Kinder Morgan Energy Partners and/or TransCanada Corp (TSX: TRP, NYSE: TRP).

Question: What’s happening with Dundee REIT and Canadian Apartment Properties?

Answer: I think the market continues to punish the Canadian REITs due to perceived vulnerability in a rising rate environment.

But financial and operating numbers for both REITs have been solid, and distributions are well covered and sustainable.

Question: You do a great job in Utility Forecaster covering many foreign utilities. One you have never mentioned is PT Telekomunikasa Indonesia (TLK). Is it a buy?

Answer: Thanks, I appreciate that. I don’t currently cover PT Telekomunikasi Indonesia (Indonesia: TLKM, OTC: TLKMF), so I wouldn’t want to offer an opinion. I will consider it for future addition to the UF How They Rate Foreign Communications group.

Question: I've been surprised by the rapid price increase in National Grid Plc (London: NG/, NYSE: NGG) this year. Is the stock overvalued? Would you suggest an alternative?

And your long-term your thoughts on Verizon?

Answer: Financial and operating numbers for National Grid have been solid, but the share price has shot up since early February. I rate it a buy under 64.

I’m a big fan of Verizon, the April Growth Spotlight/Best Buy in Utility Forecaster, for the long term. Still has the greatest capacity to reinvest in its network, still growing earnings ! at a doub! le-digit rate, still well positioned for the continuing explosion of data-driven wireless services demand. Consolidation of Verizon Wireless ownership was a solid move.

Question: I have two holdings that have caused me much angst, Just Energy Group Inc (TSX: JE, NYSE: JE) and Lightstream Resources Ltd (TSX: LTS, OTC: LSTMF). What are your current views on each? Thanks.

Answer: I abandoned Just Energy last year after a very unflattering article about its business practices appeared in the Toronto Globe & Mail’s business magazine.

That piece was the final straw, as the company had taken on considerable debt to expand beyond its core business operation. Recent financial results have been solid, but it’s not a company I consider “high quality.”

As for Lightstream Resources, average daily production for 2013 was up 9 percent versus 2012 to 46,438 barrels of oil equivalent per day (boe/d), though fourth-quarter production was flat sequentially and down 4 percent year over year. Annual operating netback was up 4 percent, and funds from operations were up 12 percent.

The key for Lightstream remains maintaining production and cash flow as it sells assets to reduce debt. The recent dividend cut will help with financial flexibility. And first-quarter 2014 numbers (detailed in the May 2014 Canadian Edge Best Buys feature) suggest the turnaround program is showing progress.

The market has certainly looked fondly upon these efforts, as the stock price is up to CAD6.51 as of this writing from CAD5.15 in mid-December, or just after the dividend cut. (Lightstream was trading at CAD7.14 as of midday May 15.)

Question: I see NextEra Energy Inc (NYSE: NEE) had a good quarter. Would you still buy or wait until they do a YieldCo and buy it instead?

Answer: I would stick with NextEra, but wait for a pullback to the 94 range. The first quarter was a good one, with expectations-beating top- and bottom-line numbers, not to mention the 9.8 percent div! idend inc! rease.

Question: If you were limited to owning five to six stocks for the next five years what would they be?

Answer: Verizon, NextEra, Enterprise Products Partners LP (NYSE: EPD), Pembina Pipeline, Apple Inc (NSDQ: AAPL) and APA Group (ASX: APA, OTC: APAJF).

Question: I recently purchased Chevron (NYSE: CVX) at $113 and it has run to $126. Is it prudent to take some profits?

Answer: If Chevron has come to represent an outsized portion of your portfolio, yes. If you’re diversified by sector and company, I’d say let this winner run.

Question: CEMIG (NYSE: CIG) is still way off multi-year highs due to some pretty serious government interference in Brazil. Nevertheless, it’s up dramatically the last couple of months.

Would you be taking profits now, or is it “smooth sailing,” with more price appreciation ahead?

Answer: Analysts are becoming more bullish on Brazilian economic growth, and Brazil’s banks have stepped up to provide “emergency” loans to cover cash flow shortages until tariff adjustments are finalized, and the country’s development bank is also pitching in.

CEMIG was recently was granted a 14.76 percent rate increase versus a request of 29.74 percent. I wouldn’t say “smooth sailing,” but things are definitely improving, at a macro and company level.

Question: Is Exelon Corp (NYSE: EXC) a buy now?

Answer: Richard Stavros, Ari Charney and I had a long conversation about Exelon in the aftermath of the announcement of its proposed acquisition of Pepco Holdings (NYSE: POM).

We’re taking a wait-and-see approach. It’s still an open question whether the recent improvement in the wholesale power market has legs.

And Exelon’s asset mix–heavy on nuclear–still seems like more of a burden than a boon right now. I do like the fact that’s its potentially adding regulated revenue and that Pepco’s utilities are geographically clo! se to Exe! lon’s east coast utilities.

But there are a lot of regulatory hurdles left to surmount, not to mention the integration issues. There are many management layers and a lot of cumbersome logistics to work out. It would be tough for the companies to announce a lot of job cuts right now, though, as they still need to court regulators who will likely be loath to agree to measures that harm local economies.

Question: What percentage of a portfolio should MLPs be?

Answer: Generally speaking I would limit exposure to MLPs to about 15 percent to 20 percent.

Question: Several of the REITs have been coming back, but Dundee seems to slowly drift lower. It would take over three years of dividends to make up my losses, and those losses may not stop.

Wouldn’t it be better to sell and purchase something that has more opportunity for growth? Having been had losses from other items held too long in Canadian Edge or Personal Finance it seems prudent to cut the loss now.

Answer: I completely appreciate what you’re saying. The difference with Dundee REIT is that its assets continue to generate solid cash flow. We did, as you allude to, hold onto several companies past the point where underlying business fundamentals justified doing so.

At the end of the day, it’s most important that you are comfortable with your portfolio allocations when you go to sleep at night. One of the keys to long-term investing success is to know yourself, your risk tolerance, your goals, and how you’ll react to downturns and upturns.

I’ll stick with Dundee because the distribution is sustainable and the operating picture will improve with strong North American economic growth.

But I understand your view. And I would not question you selling Dundee in favor of another holding with, for example, better prospects for payout growth versus simple sustainability.

Question: I recently sold Duke Energy due to the company’s recent coal ash spill and the! large am! ount of money it will take to clean up this spill and also new requirements for their other coal ash sites.

Will this affect Duke’s Safety Rating and regulatory relationships?

Answer: Duke estimates that remediation of the ash issues post-Dan River will cost $2 to $2.5 billion, though government demands could push the total to $7 to $10 billion. A company of Duke’s size will be able to absorb these costs, perhaps dumping them into a “bad quarter.”

I don’t anticipate that we’ll see costs of $10 billion. Management has been aggressive in its approach to the problem, accepting responsibility and offering a reasonable, prudent solution that has resulted in the Dan River producing safe water-test results and will allow it to continue to serve its customers in North Carolina for the long term.

Question: Would you prefer KMR over KMP, as it is trading at discount and has a better tax picture?

Answer: If you don’t want to deal with K-1s at tax time, Kinder Morgan Inc (NYSE: KMI) is a suitable alternative, as is Kinder Morgan Management (NYSE: KMR), which pays its distribution in the form of Kinder Morgan Energy Partners units.

Question: What are your thoughts on TransForce Inc (TSX: TFI, OTC: TFIFF)?

Answer: TransForce has had an up-and-down 2014 after a strong rally at the end of 2013. It remains a strong consolidator in the still-fragmented North American truckload and less-than-truckload markets. The Vitran deal is a positive.

As for the first quarter, the severe winter had a negative impact on results. Earnings per share were CAD0.20, down from CAD0.26. And revenue missed analysts’ estimates.

But other smaller, weaker players dealt with the same weather. TransForce has proven its ability to build its business during tough times, as weaker competitors struggled to survive. Better North American economic growth would certainly help. But I like TransForce for the long term.

This 2014 pullback has actuall! y brought! it below my recommended buy-under target of USD23.

Question: What do you think of the methanol industry and do you have a favorite stock pick in that group?

Answer: We recently added Methanex Corp (TSX: MX, NSDQ: MEOH) to the Canadian Edge How They Rate coverage universe. I currently rate the stock a hold, as it’s been on a very strong run since late 2012. The pullback since mid-March could provide a good entry point. (I upgraded Methanex to "buy under USD65" in the May 2014 CE.)

It’s the global leader in production of a feedstock for key chemicals and fuel additives. Global economic growth will drive future results.

Question: I purchased Vermilion Energy Inc (TSX: VET, NYSE: VET) and Pembina Pipeline in 2004. I'm looking to buy more Vermilion on dips. Your buy number is 56. That represents an 18 percent difference. Do you intend to raise the buy target in the near future?

Answer: I did boost the buy-under target for Vermilion Energy to USD56 in February, but the stock spiked higher beginning in mid-March. My predilection is to not chase stocks. Increases in buy-under targets are driven by dividend growth and asset/production growth.

(I raised my buy-under target for Vermilion to USD64 in the May 2014 CE based on its strong production growth profile.)

Question: You say REITs are being punished because of a rising rate environment, but the Canadian dollar is being hammered because rates are so low. Can you explain?

Answer: Traditional fixed-income investors rotated into REITs en masse in search of better-but-still-relatively-safe yields. The perception that higher yields will soon be on offer from risk-free assets is a contributing factor to the REIT selloff.

Operating and financial results have actually been solid. The one thing REITs haven’t done, probably in anticipation of higher rates and higher costs of capital, is raise distributions.

The Canadian dollar’s weakness is, as you note, a function of a potent! ially exp! anding rate differential–comparing the Bank of Canada’s target rate and “dovish” stance to the fed funds rate and the Fed’s more “hawkish” tone of late, including the rollback of QE–as well as softer Canadian economic growth.

Question: Please comment on Dominion Resources Inc's (NYSE: D) earnings and your buy-under target.

Answer: Operating earnings per share growth was impressive at $1.04 versus $0.83 a year ago, and they beat guidance of $0.85 to $1.00.

Weather helped performance at its regulated utilities, but management also noted significant improvement for its merchant generation business. Lower costs also contributed to the expectations-beat.

I have Dominion rated a buy under 60, which is well below the current price of $72.55. There’s a big “MLP premium” built into the share price in anticipation of the spinoff of its LNG assets, presumably later this year but subject, as management recently noted, to final regulatory approval of its Cove Point LNG export project.

Question: Hello, David, and thank you for taking the time to host these sessions. IBI Group Inc (TSX: IBG, OTC: IBIBF) seems to be clawing its way out of the hole; any hope for them? And the same applies to a long-term holding of mine, Penn West Petroleum Ltd (TSX: PWT, NYSE: PWE). Do you think they will ever get their act together?

Answer: BI Group’s operating cash flow improved significantly during the second half of 2013, a sign that management’s efforts to turn the business around are having positive affect. Higher-cost debt is also being refinanced on more favorable terms. We’ll look for more progress with first-quarter numbers, which will come out on or about May 9. (IBI released its first-quarter numbers on May 14.)

As for Penn West, the stock has bounced off its all-time low of Jan. 23, but I think investors are growing weary of a company that’s been in perpetual turnaround for a couple ye! ars now. ! Asset sales continue.

2013 gross revenue was down 14 percent to CAD2.84 billion, as funds flow per share declined by 17 percent to CAD2.17. Average daily production was down 16 percent to 135,093 boe/d.

First-quarter gross revenue declined by 5 percent to CAD668 million, though FFO per share was up 4 percent to CAD0.57. Total production was down 22 percent to 110,795 boe/d, though netback was up 32 percent to CAD36.67 per boe.

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I think the current dividend rate is sustainable, but it’s a fine line to sell assets while maintaining production at a level sufficient to support cash flow and the payout.

Question: Are any of the Big Five Canadian banks attractively priced for new money?

Answer: My favorite Canadian bank is Bank of Nova Scotia (TSX: BNS, NYSE: BNS), which I recommend under USD62 and is trading at USD60.87 right now. (Scotiabank rallied to USD62.02 on the New York Stock Exchange by May 15.)

Question: What do you recommend doing with Linn Energy LLC (NSDQ: LINE)?

Answer: I rate Linn Energy a hold. We sold it from the UF Portfolio last year due to long-term concerns about its production profile and in the aftermath of a series of articles in Barron’s questioning its accounting practices.

The Berry Petroleum deal is now complete. But JPMorgan and Citigroup recently issued downgrades, and short interest surged on suspicion rising debt, equity needs and weak production threaten the current payout.

Question: Is now a good time to add to BCE Inc (TSX: BCE, NYSE: BCE) or Rogers Communications Inc (TSX: RCI/B, NYSE: RCI)? Are there other telecoms or communications/TV stocks that you prefer over them?

Answer: I rate BCE a buy under USD45, Rogers Communications a buy under 44.
Rogers is a value play right now, as it’s perceived to be the most vulnerable to the Canadian government’s ef! fort to s! timulate the creation of a fourth national wireless carrier.

BCE’s revenue base is more well-rounded.

Question: Do you follow Norbord Inc (TSX: NBD, OTC: NBRXF)? Have an opinion?

Answer: I rate Norbord a buy under USD30. Management expects the North American housing recovery to run for “several years,” with cash generation helping to deleverage the balance sheet.

Question: As a new investor, which Canadian stock would you recommend for new money?

Answer: My two Best Buys for April were Artis REIT (TSX: AX-U, OTC: ARESF), up to USD16, and ARC Resources Ltd (TSX: ARX, OTC: AETUF), under USD28.

Question: How is Australia & New Zealand Banking Group Ltd (ASX: ANZ, OTC: ANEWF, ADR: ANZBY) doing? Any concerns?

Answer: ANZ is pushing to new highs on the Australian Securities Exchange (ASX). It’s my top pick among Australia’s for biggest banks. I’m still concerned about its Asia exposure for the short term. But it’s a solid dividend grower for the long term.

Question: Would you buy Apple here or wait until after the split? Since the announcement it has gone up quite a bit.

Answer: Yeah, that was a quick rise for Apple. With the 7.9 percent dividend increase my new buy-under target is 520, but it’s obviously gone well beyond that.

Question: What do you think is the likelihood that SK Telecom Co Ltd (Korea: 017670, NYSE: SKM) will cut its dividend in 2014?

Answer: SK Telecom has been a consistent dividend payer, with conservative financial policies in support. Operating numbers have been solid. I don’t see a cut on the horizon.

Question: Any comments on Entergy Corp (NYSE: ETR)?

Answer: Management boosted its first-quarter operating EPS guidance to $2.28, up from $0.94 on colder weather and pipeline constraints, and actually reported $2.29. Electricity sales were up 15 percent. Full-year guidance was lifted to $5.55 to $6.75.

I like it up to 75.

Question: What are y! our top t! wo or three holdings for a Canadian investor looking for pure growth?

Answer: Well, the CE How They Rate coverage universe is built around dividend-paying companies. But Magna International Inc (TSX: MG, NYSE: MGA), ARC Resources and Crescent Point Energy Corp (TSX: CPG, OTC: CSCTF) all offer solid growth prospects with decent payouts attached.

Question: If you had to choose to buy either EnerCare Inc (TSX: ECI, OTC: CSUWF) or Brookfield Real Estate Services Inc (TSX: BRE, OTC: BREUF), which would it be and why?

Answer: would take EnerCare over Brookfield Real Estate Services because of greater potential for dividend growth.

EnerCare’s submetering business has 166,000 units contracted, 136,000 units installed and 82,000 units being billed, implying a doubling of baked-in revenue over the next five years.
Brookfield Real Estate’s upside is limited by the nature of its agreements with Canadian realtors. But the dividend is sustainable, with modest growth prospects.

Question: Thoughts on MarkWest Energy Partners LP (NYSE: MWE)? I live in Western Pennsylvania, and MarkWest hass been laying pipeline everywhere.

Answer: The pullback since mid-March offers a good opportunity to buy MarkWest Energy under 66. Management recently boosted the quarterly distribution rate by 1.2 percent and increased the MLP’s revolving credit facility to $1.3 billion and extended its maturity by 18 months to March 2019.

Question: Student Transportation Inc (TSX: STB, NSDQ: STB) continues to pay a steady dividend, but the price shows no increase over a long period. It seems to bounce up and down in a narrow range. Is there a reasonable chance for long-term growth?

Answer: I think Student Transportation would see upside should the current tenor of state and local officials on spending on education change. I also think it would benefit should the wider investing community begin to appreciate the fact that despite challenges represented by constrained public budgets ! the compa! ny continues to grow its business.

Question: Windstream Holdings Inc (NYSE: WIN) has moved up significantly since your "sell" recommendation. What is the reason? Short covering? The company continues to support the dividend. What is your expectation?

Answer: My "sell" recommendation on Windstream was based primarily on the slow growth of its “strategic” business services and broadband units. Had I a crystal ball I would have waited to sell into this strength.

But dividend growth certainly is nil. And sustainability is a question until they finally show the ability to grow the strategic businesses at a faster clip than the negative 1 percent to positive 3 percent pace management expects for 2014.

Question: What is your opinion of Davis + Henderson Income Corp (TSX: DH, OTC: DHIFF)?

Answer: Davis + Henderson has executed a fantastic growth strategy and is now a top player in the global financial information services space. Dividend growth is steady.

Management reported a 55.1 percent surge in first-quarter revenue to CAD266.3 million, as the acquisition of Harland Financial has in fact proved a step-change for the business.

US operations accounted for 46 percent of total revenue, up from 13 percent a year ago. Organic growth in Canada was also solid, as adjusted EBITDA grew by 74.4 percent. The payout ratio for the three months ended March 31, 2014, was 66.7 percent. Davis + Henderson–based on the Harland acquisition and corresponding asset growth–is now a buy under USD28.

Please note that the next Utility Forecaster/Canadian Edge/Australian Edge web chat will take place Wednesday, May 28, at 2 pm.