Can Bankrupt Stocks Make You Rich?

Most of the time, a bankruptcy filing is the kiss of death for shareholders. Every once in a while, going through bankruptcy actually helps stock investors -- and the rewards can prove very lucrative.

But before you go digging through the debris of the stock market looking for diamonds in the rough, you have to understand just how rare those profitable bankruptcy opportunities are -- and the massive risks involved. Otherwise, you'll probably accomplish nothing but losing your shirt.

Why Dynegy jumped
The latest bankruptcy story with a twist involves Dynegy (NYSE: DYN  ) , a power-generation utility company that's been plagued with problems lately. Earlier this week, several of Dynegy's subsidiaries filed for bankruptcy, with the goal of breaking expensive leases with Public Service Enterprise Group (NYSE: PEG  ) and reducing the company's overall debt burden. Yet to many people's surprise, Dynegy shares actually rose after Monday night's filing.

The answer to why this happened stems from some unusual circumstances. Ordinarily, it's very difficult for a parent company to do what Dynegy did here, moving assets and liabilities among subsidiaries with the result of sheltering the company's power plants for direct claims by bondholders. Yet while many Dynegy bondholders plan to challenge the company's moves, Dynegy says it already has the support of a substantial fraction of investors holding its bonds.

If the gambit succeeds, then Dynegy's shareholders -- which happen to include activist investor Carl Icahn -- could emerge unscathed even as bondholders take a haircut on their bonds.

The exception that proves the rule
That's unusual. Typically, when companies get to the point at which they need to restructure their debt, shareholders end up with nothing. For instance, that's what happened at General M! otors (NYSE: GM  ) , where existing shareholders got nothing and creditors received stock in the post-bankruptcy entity.

But in a select few cases, companies get through bankruptcy without leaving their shareholders entirely destitute. For instance, USG (NYSE: USG  ) filed for bankruptcy protection in 2001 in order to get a handle on its potential asbestos litigation exposure. After five years in bankruptcy, the company emerged having established a settlement trust fund for claims, and watched its shares jump nearly 20 times in value. Similarly, investors in PG&E (NYSE: PCG  ) who sat through three years of restructuring came away with a three-bagger.

Perhaps the most interesting recent bankruptcy case was General Growth Properties (NYSE: GGP  ) . Given the environment for retail real estate in early 2009, it certainly seemed natural for the shopping mall operator to succumb to economic reality. But the move was actually just part of a larger strategy to restructure debt, as the company claimed more assets than liabilities in its bankruptcy filing.

General Growth shares traded as low as $0.33 and were delisted from the New York Stock Exchange during the bankruptcy. Eventually, though, numerous investors became interested in the company, and after a battle with Simon Property Group, a group including Brookfield Asset Management (NYSE: BAM  ) as well as investment firms run by Bruce Berkowitz and Bill Ackma, ended up with huge profits.

Buyer beware
But just as stories from lottery winners shouldn't prompt you to spend your hard-earned dollars buying tickets, the occasional bankruptcy that turned out well for shareholders shouldn't persuade you that bankrupt companies make a good i! nvestmen t. Countless bankruptcies have resulted in complete losses for equity investors, despite their often trading as penny stocks on minor stock exchanges for months or even years while the bankruptcy proceedings go on.

So when you see a company declaring bankruptcy, don't jump into suddenly cheap shares expecting a big windfall. Once in a blue moon, you'll find a situation worth exploring -- but the rest of the time, you'll just be throwing away good money after bad.

"Too big to fail" banks got lots of attention during the financial crisis, thanks to government bailouts that kept most of them from having to declare bankruptcy. Now, the Fool has found two stocks that are too small to fail -- and have the prospect for huge gains. Check them out here in the Fool's latest special report. It's free!

Google is a profit growth machine that's highly undervalued

Search engine giant Google (NASDAQ:GOOG) reports earnings for the quarter ending Sept. 30 on Thursday. The world might seem confusing today, but one thing is certain: Google profits will be strong.

This company dominates the world of search, and its advertising model is useful for any business wishing to grow sales. The targeted approach of search engine marketing works. Google is a cash cow, and its expansion to other markets is paying dividends. The continued growth of the Android operating system also is likely to provide fuel to Google��s story.

Why this stock is down is beyond me, but that is what happens when you throw out the market baby with the bath water. There is no doubt in my mind that Google will beat expectations. As a result, shares will rally.

Google has exceeded average Wall Street estimates in three of the past four quarters:

For the quarter ending June 30, the company beat estimates by a wide margin, helped in part by exploding smartphone sales. Search advertising, mobile advertising and Android sales were strong. Sales also exceeded expectations in the period.

With the strong report in the last period, Wall Street estimates during the past 90 days have increased to $8.74 for the quarter ending Sept. 30. For the full year, Google is expected to make $35.48 per share. That number grows by 18% to $41.94 per share in 2012. At current prices, shares of Google trade for just 15 times current-year estimated earnings.

Click to EnlargeShares of Google jumped 12% in the day of trading after it reported June 30 results, but with the market in correction mode, shares slipped. A week ago, the stock was at levels seen before the June 30 report. During the past 52 weeks, Google shares have traded sideways.

I can appreciate the fear and concern in the market, but seeing Google shares flat over the past 12 months has me drooling. All this company does is print money. Profit gro! wth is n early 20% and the stock moves sideways. Are you kidding me?

Forget about the nonsense with the rest of the market or the economy. Google will do well no matter what. Google makes money every time someone visits its site — and a lot of people visit its site.

Google shares gained 12% after it last reported earnings. I see no reason not to see a similar increase this go-around. Earnings estimates are higher, so the level of the beat this period is likely to be smaller. That said, with the stock down so much since the mid-July, a recovery rally could be in the double digits.

I would buy this stock for a short-term trade in advance of earnings. It is a no-doubter in my opinion.

As of this writing, Jamie Dlugosch did not own a position in any of the aforementioned stocks. His five keys to trading earnings can help you identify winning trades that can make big profits in a short period of time.

Short Plays on 2 Big Industrials 

Technical signals have indicated potential short set-ups in two of the world’s biggest heavy equipment makers. Here are the key levels to watch for each.

Heavy equipment manufacturer Caterpillar (CAT) ran higher from its October lows, taking after its ticker symbol, a wild animal chasing a meal. But now it has pulled back, tired from the run, and is looking more like an insect about to become part of the market’s meal. Its running mate, Deere (DE), is not much better. Let’s take a look.

Caterpillar (CAT) has been printing a series of topping candlesticks over the last ten days, starting with the two candles with long upper shadows piercing through the 200-day simple moving average (SMA) and then the “hanging man” candles more recently.

Mid-week, CAT pulled back to the previous support area near $91.80 and has one level of support lower near $88.75 before it closes the gap lower to $87.50 and beyond.

The Relative Strength Index (RSI) is also pointing lower and the Moving Average Convergence Divergence (MACD) indicator is about to cross bearishly negative. This looks like a good short under $87.50.

Deere (DE) shows similar technicals. It sits on support at $72.40 near the 50-day SMA with an RSI that is about to cross 50 going lower and a MACD indicator that is crossing bearishly negative. If it breaks the blue support line, there is support lower at $69.20 followed by $67.

By Greg Harmon of Dragonfly Capital

The Best Stock for an Overweight America

It's no news that obesity rates have reached alarming proportions in the United States. Soon, it will also become a fast-growing concern in the rest of the world as well. Fortunately, there are companies around the world working on solutions. Those who get in early by investing in companies that are likely to provide these solutions stand to make considerable gains.

Obesity is a very complex condition and is considered so serious because it can trigger many deadly diseases, and the rate at which it is growing is disturbing. Between 1980 and 2000, obesity in the United States more than doubled, according to the U.S. Centers for Disease Control. Today, two-thirds of Americans are considered either overweight or obese. And the World Health Organization estimates that, if trends in developed countries continue on their current trajectory, the global population of overweight individuals will increase 44% from 1.6 billion in 2005 to 2.3 billion by 2015. The obese population will grow even faster -- from 400 million people five years ago to 700 million within five years, a whopping 75% increase.


But this obesity epidemic also opens the doors for a pair of industries to profit. As I mentioned last month, two high-yielding drugmakers could make huge profits from their diabetes treatments, a disease that is directly linked to obesity.

Another segment that will likely benefit from helping to solve this epidemic is the weight-loss industry. After all, Americans are at least trying to lose weight. A 2008 Gallup poll showed 96 million Americans were on a diet. Worldwide spending on weight-loss programs exceeds $59 billion, according to market research firm Marketdata Enterprises, which specializes in the diet market.

One of the most recognized weight-loss brands, as well as the No. 1 player in the niche for home-delivery weight-loss meals, is Nutrisystem (Nasdaq: NTRI). The company markets its low-calo! rie prep ared meals directly to consumers through print and broadcast media, the Internet and through retailers such as QVC shopping network. CBS Money Watch recommended Nutrisystem in 2011 for having the least expensive home-delivery weight-loss program. 

As a stock pick, Nutrisystem may seem like an odd choice at first glance. After all, the company has posted four straight years of sales declines, while earnings per share (EPS) are expected to drop to between $0.45 and $0.50 per share this year from $1.12 a year ago. A look at the company's cash flow, however, reveals hidden strength and value.

During the first nine months of 2011, Nutrisystem produced $54 million in cash flow -- more than enough to cover $20.7 million in annual dividends and sustain the current 6.4% yield. This is no rarity, either: the company has generated at least double the cash necessary to cover its annual dividend every year since 2007. In fact, Nutrisystem has enough cash flow left over to fund large share repurchases, such as the $150 million share buyback announced in June, which represents nearly 45% of the company's market capitalization. This repurchase should enhance 2012 EPS growth and dividend coverage by reducing the number of shares outstanding. 

Although sales growth has stalled due to competitive pressures and a soft economy, Nutrisystem has remained solidly profitable. Five-year operating margins averaging 16% exceed comparable peer margins of 10.5%. In addition, return on assets (ROA) is exceptional, having averaged 35.6% in the past five years. The balance sheet is also strong: Nutrisystem has $72 million of cash against $30 million of debt.

Management has big plans for coming quarters. The company is working on re-energizing top-line growth in 2012 with a revamped menu, aggressive advertising efforts, a new celebrity spokesperson (Marie Osmond is the most recent one), and new marketing strategies and distribution channels.

As part of this plan, Nutrisystem has begun ma! rketing Nutrisystem D, a weight-loss program for patients with Type 2 diabetes. Using clinical studies that validate the program's effectiveness, the company puts together science presentations geared toward health care professionals as part of its marketing efforts. The potential market for this program is huge, since 29 million Americans are already diagnosed with Type 2 diabetes and another 79 million are considered prediabetic.

Consensus analyst estimates look for Nutrisystem to produce 59% EPS growth next year and annual growth averaging 13% during the next five years. Nutrisytem shares are bargain-priced, with a price-to-earnings (P/E) ratio of about 16, which is below the company's five-year average P/E of 19 and much less than the peer average P/E of 21. 

Biotech Stock Mailbag: Ariad, Amarin, Arena

Happy 11/11/11.

Ariad Pharmaceuticals(ARIA) has shed 12% of its stock market value since Monday's early and positive peek at data from a pivotal study of the company's leukemia drug ponatinib.

Readers Rob D. and Charles W. both emailed me articles published elsewhere attributing Ariad's sell off to troublesome side effects associated with ponatinib in the study.

Not so. The 17% incidence of serious adverse events and 15% patient discontinuation rate observed to date in the ponatinib pivotal study almost exactly mirrors safety data from an earlier phase I study of the drug. Moreover, the 3.7% rate of pancreatitis (the most worrisome ponatinib-related side effect) is markedly lower than the 12% rate seen in the previous phase I study.

Eight patient deaths on the study have also been raised as a possible concern and reason for Ariad's weakness. Again, I don't see anything worrisome here. Three of the deaths were deemed possibly drug-related; we won't have any more details until the ponatinib data are presented at the American Society of Hematology annual meeting next month. Seven of the eight deaths, however, were in the sickest of the "blast phase" leukemia patients enrolled in the study. Overall, 94% of patients entering the study failed at least two prior therapies, 57% failed three or more prior therapies.

For perspective, both Tasigna and Sprycel (both prior therapies used in these patients) had on-study deaths in their pivotal studies, which didn't stop them from being approved.

If ponatinib's side effect profile is fine, what's causing Ariad's stock price to fall? Perhaps @sharkbiotech got it right: "$ARIA was up 50% in last 5 weeks going into the news."

In other words, Ariad is just like every other biotech stock with a trading catalyst: Run up, sell the news.

@cfgill asks, "There seems to be a little b! uzz abou t ARNA. Any perspective?"

I haven't detected any buzz around Arena Pharmaceuticals(ARNA). If I had to guess, you might be picking up on traders hoping to catch an uptick tied to the expected resubmission of Arena's weight-loss drug lorcaserin before the end of the year.

Vivus(VVUS) traders have done OK playing the resubmission and FDA acceptance of Qnexa, so perhaps they're looking for a repeat performance with Arena.

The FDA is not going to approve either obesity drugs on this second go-round without copious quantities of new clinical data, most importantly outcomes data from cardiovascular outcomes studies. Just like the 10,000-patient study the FDA is making Orexigen Therapeutics(OREX) conduct.

I know you've heard me prattle on about this before. Here's a Cowen note echoing my bearish view:

"We believe Qnexa should probably be approved; we just don't think that the FDA will approve Qnexa without at least interim data from a CVOT [cardiovascular outcomes trial] done pre-approval," wrote Cowen in a note to clients this week. The note continues:

"We believe that the most likely outcome next spring is that the agency, through the AdComs [advisory committee meeting] scheduled for 1Q12 and/or a second CRL [Complete Response Letter] issued in April 2012 will request that Vivus runs a large (probably around 10,000 patient) CVOT before approval, similar to what it requested from Orexigen."

@weezrichardet asks, "Are you positive on $VRTX? I'm confused."

Vertex Pharmaceuticals(VRTX) has achieved one of the fastest drug launches in history with its hepatitis C drug Incivek, which is already on a $1 billion-plus annual run rate just five months after launch. Yet Vertex's stock has been crushed, down 40% in ! the past two months. A market value of $10 billion is now $6 billion.

Confusing? No doubt.

Without getting deep into numbers, the simplest way to understand Vertex today is by drawing a parallel to a typical technology upgrade cycle. Incivek is a revolutionary Hep C therapy, but it's also version 1.0. Investors, however, have caught a glimpse of Hep C therapy version 2.0 and even though it's not here yet, they're already pining for it. Version 1.0 is still great but enthusiasm for it has waned.

So yes, to get a grip on the investment dynamics of the Hep C market, think of these drugs like smartphones. Nobody wants an old Blackberry when they can wait a few months to buy a shiny new iPhone.

It's totally strange to think about Incivek as being obsolete but that's how the market (cruel as it is) views the drug because Incivek therapy remains tied to weekly shots of interferon in order to achieve a cure. Flattening prescription growth hasn't helped either.

Hep C therapy version 2.0 eliminates weekly shots of interferon. This "new new" therapy is all pills -- two or three, maybe even one -- taken once a day. Easy. Convenient. Effective. It's also still experimental but we've seen enough clinical data -- most recently at last weekend's American Association for the Study of Liver Disease meeting -- to be confident that all-oral Hep C therapies are coming real soon.

Pharmasset(VRUS) is at the vanguard of Hep C version 2.0. Inhibitex(INHX)caught fire. Roche bought Anadys to move in this direction. Abbott(ABT) is in the hunt, as is Bristol-Myers Squibb(BMY) and others.

And Vertex? An early effort to conjure an all-oral Hep C regimen didn't work out. Newer efforts are underway now but the perception is that the company is falling behind, stuck at! version 1.0.

My sense also is that Vertex is trying to get investors to think of the company as more than just sellers of a Hep C medicine. On its recent conference call, Vertex executives emphasized the cystic fibrosis drug Kalydeco (and rightly so, because it's a groundbreaking therapy) as well as its mid-stage pill for rheumatoid arthritis. Both these drugs have real potential, but investors tend to be myopic so for now, Vertex still equals Incivek.

Amarin(AMRN) has frozen me out. Emails sent asking for additional clarity on AMR101's patent and new chemical entity status have been ignored.

Amarin management continues to stick its head in the sand. It's a terrible communications strategy but one that's supported by the company's sell-side analyst enablers, who are motivated surely by the prospect of more investment banking fees.

"Amarin stated in its press release and reiterated on its call that its policy is not to comment on the patent prosecution process," writes Leerink Swann analyst Joe Schwartz. "While this may surprise some given the amount of negative attention that has been placed on this issue, we can understand its decision since the patent process normally has more rejections than acceptance… so engaging investors on a process that is relatively foreign to them and normally behind the scenes can only amplify the anguish."


Mike A. writes, "Adam, I know you have been a proponent of Amarin for quite a while. As an individual investor without a voice, I greatly appreciate your articles regarding CEO Joey Z's cavalier attitude. He sold a lot of stock right around the time of ANCHOR results and as you know has done nothing to help the stock in any way since he became CEO. Every time he opens his mouth the stock goes down. And now that when he needs to open his mouth, he says nothing as you so ably have written… Basically, I just wanted to thank you for staying on top of this! situati on."

FBSKA, posting a comment under my Amarin story this week, writes, "Adam, you came out very strongly for this company when the blockbuster trial results came out and talked down the patent problems initially, but now perhaps out of a feeling of responsibility and impatience, you now lambast the CEO for not commenting on patent exchanges with the patent office. How is this any different than when companies refuse to talk about ongoing discussions with the FDA? And many companies talk about going it alone. It makes sense to me for the CEO to play things close to the vest and for investors to sit tight and be patient."

He's correct, I did make the mistake in the past of underplaying the intellectual property issues tied to AMR101. Understanding the patent estate of any new drug should always be a part of your investment research, but in Amarin's case, I'm guilty of overlooking the issue.

No longer, however.

I'm not asking Amarin to divulge the exact back-and-forth with the patent office, but I do believe a more thorough airing of the AMR101 patent strategy, including an explanation of how the process works, would have helped avoid all the confusion and uncertainty.

The patents aren't even the most concerning issue. Whether or not FDA awards AMR101 new chemical entity status (NCE) is more important, but Amarin has said nothing at all about this to my knowledge. Don't you think it would be helpful if management laid out its case for why AMR101 deserves an NCE? What steps has the company taken to make that happen?

Ed L. emails, "Any thoughts on why Inhibitex Chief Scientific Officer, Dr. Joseph Patti, would unload all 209,000 of his shares at just under $8 per share after the announcement of the positive news? It certainly doesn't seem like a vote of confidence for Inhibitex going forward."

I forwarded the question to Inhibitex outside investors relations spokesman, who in turn, forwarded me a response that Patti sent to investors asking! about h is stock sale:

"As we discussed in August I entered into the 10b5-1 plan, my price target for execution of the plan was above most of the analyst's [sic] price targets at that time. FYI: 175,000 shares were restricted stock from 2006 and 35,000 were exercise & sell options that expire in about 4 months. To my knowledge, I have approximately 850,000 options remaining. The 105b-1 is now effectively terminated."

Patti made approximately $1.6 million from his sale of Inhibitex stock. Yes, the stock sale was pre-planned but still, the timing was impeccable.

The next Biotech Stock Live Chat is scheduled for Thursday, Nov. 17 at 12 p.m. ET.

--Written by Adam Feuerstein in Boston

Basic Materials Sector Review: Winning and Losing Stocks on Nov 11th

Wall St. Watchdog reveals information about today��s action in the Basic Materials (NYSE:XLB) sector:

Gainers (% price change)

  • OMNOVA Solutions Inc. (NYSE:OMN): The shares closed at $4.69, up $0.44, or 10.35%, on the day. Its market capitalization is $215.72 million. About the company: Omnova Solutions Inc. develops, manufactures, and markets emulsion polymers, specialty chemicals, and decorative and building products for industrial, commercial, and consumer markets. The Performance Chemicals unit serves the paper, carpet, and textile industries. The Decorative & Building Products unit manufactures products such as wallcovering, coated fabrics, and vinyl woodgrain. Get the most recent company news and stock data here >>
  • Orchids Paper Products Co (AMEX:TIS): The shares closed at $15.75, up $1.14, or 7.8%, on the day. Its market capitalization is $117.97 million. About the company: Orchids Paper Products Company manufactures bulk tissue paper, known as parent rolls, and converts parent rolls into a full line of tissue products. The Company markets paper towels, bathroom tissue, paper napkins, and other products to the private label segment of the consumer tissue market, and focuses on serving value retailers. Orchids Paper serves customers in the United States. Get the most recent company news and stock data here >>
  • NN, Inc. (NASDAQ:NNBR): The shares closed at $6.70, up $0.48, or 7.72%, on the day. Its market capitalization is $113.56 million. About the company: NN, Inc. is an independent manufacturer and supplier of precision steel balls and rollers to both domestic and international anti-friction bearing manufacturers. The Company also manufactures precision injection molded components serving the bearing, automotive, instrumentation, fiber optic, and hardware markets through its subsidiary, Industrial Molding Corporation. Get the most recent company news and stock data here >>
  • Aurizon Mines Ltd. (AMEX:AZK): The shares closed at $6.23, up $0.44, or 7.6%, on the day. Its market capitalization is $1.01 billion. About the company: Aurizon Mines Ltd. is a gold mining company. The Company’s operations and exploration activities are located in the Abitibi region of north-western Quebec, Canada. Aurizon operates and owns an interest in the Beaufor Mine, the Sleeping Giant Mine, and the Casa Berardi property. Get the most recent company news and stock data here >>
  • Grupo Simec S.A.B. de C.V (AMEX:SIM): The shares closed at $7.07, up $0.45, or 6.8%, on the day. Its market capitalization is $1.17 billion. About the company: Grupo Simec, S.A. de C.V. produces steel. The Company operates structural steel mini-mills located in Guadalajara and Mexicali. Simec produces non-flat steel products and specialty steel products for the residential, commercial, and industrial construction industries. Get the most recent company news and stock data here >>

Losers (% price change)

  • Matthews Intl. Corp. (NASDAQ:MATW): The shares closed at $32.86, down $2.7, or 7.59%, on the day. Its market capitalization is $960.66 million. About the company: Matthews International Corporation designs, manufactures, and markets custom-made identification products. The Company’s products include cast bronze memorials, mausoleums, granite memorials, architectural plaques, printing plates, imaging systems for the corrugated and flexible packaging industries, and caskets made of metal, wood, and other materials. Get the most recent company news and stock data here >>
  • Gold Reserve Inc. (AMEX:GRZ): The shares closed at $2.82, down $0.13, or 4.41%, on the day. Its market capitalization is $167.92 million. About the company: Gold Reserve Inc. acquires, explores, and develops mineral properties. The Company is currently developing the Brisas gold and copper project in southeastern ! Venezuel a. Get the most recent company news and stock data here >>
  • Seabridge Gold, Inc. (USA (AMEX:SA): The shares closed at $22.84, down $0.65, or 2.77%, on the day. Its market capitalization is $968.40 million. About the company: Seabridge Gold, Inc. acquires gold projects in North America. The Company expands and verifies these resources, moves them to reserves to determine their economic value, and either sells to or forms joint ventures with larger companies for mine construction and production. Get the most recent company news and stock data here >>
  • Almaden Minerals Ltd (AMEX:AAU): The shares closed at $2.75, down $0.05, or 1.72%, on the day. Its market capitalization is $159.31 million. About the company: Almaden Minerals Ltd. acquires, explores, and develops gold-silver-copper properties. The Company has projects in British Columbia and the Yukon, both located in Canada, and in Mexico. Almaden’s focus is on gold production. Get the most recent company news and stock data here >>

Gold And Silver Miners On Upward Move

Investors in mining equities are finally being rewarded for their patience and fortitude.? The Gold Miners (GDX) ETF is making a challenge to all time highs at the $64 area after basing for close to a year between the $52.50 low and $64 high.? What is the cause of this impressive move in gold, silver and the miners?

The unemployment numbers continue to show that the economy has produced not that many jobs.? The Fed will be forced to implement accommodative measures through the reinstitution of quantitative easing.? Investors are now factoring in a QE3 by whatever guise necessary.

The unemployment rate is already high.? Elections are looming.? The politicians in Washington will do whatever they must if they want to have a chance at being reelected.? Bernanke in his statements assured us that he has a number of arrows in his quiver.

Another Ben with the name Franklin famously wrote, "The only thing that is certain is death and taxes."? Bringing this aphorism up to date one could add economic stimulation and inflation to his observation.

Gold Stock Trades continually annunciates the mission statement of our service.? Stocks are very carefully selected as candidates that may experience major gains which far exceed the negative interest rates given by your friendly neighborhood bank.? The miners (GDX) have vindicated our?motus operandi.? They are on the move��upward and onward!? Excelsior!

Wealth in the earth assets are similar in ways to other crops.

As Solomon advised, "There is a time to sow and there is a time to reap."? Recent developments may serve as our vindication.? Despite the cavils of the naysayers in early October who recommended cash and treasuries GST repeatedly counseled, "Stay the course and hold fast to the wheel in precious metals and natural resources!"? In fact on 9-27-11 our gold timing indicator went from a hold to an aggressive buy.

When gold and silver declined, we bought and a! dvised p atience and fortitude despite the large presence of naysayers calling for a major deflation bringing down precious metals and commodities.? We are well aware that the natural resource arena that we have entered is capable both of astonishing rewards and gut wrenching descents.? One must take the opportunity to fight the herd at those extreme levels of emotion.

Many investors misconstrue the very nature of The Bourses.? The casino must do whatever it can to send most people home as losers.? There can only be a minority of winners in order for The House to make a profit.

Stocks in general are not the get rich quick game.? It is instead the age old story of the transfer of wealth from the guys who take the bus home to those that go home in limousines.? The ascent upwards is more often gradual than meteoric.

Along the way in the upward progress of our precious metal selections there will be times as Winston Churchill often stated, "��this is one of those days of the Black Dog."? It is important for our readers to understand the game.

Markets will do whatever they must to shake the weak leaves off the strong tree.? Jesse Livermore wrote, "Throughout all my years of investing I've found that the big money was never made in the buying or the selling. The big money was made in the waiting."? Ergo we select, then wait for the fruits to grow in time.

Many of the "experts" came on the table to sell their precious metals and mining stocks so they can enter the so called safe havens of treasuries and cash in late September, early October.? We stated firmly that it was sowing time, not selling time.?? The weak summer-autumn season was rapidly coming to a conclusion and the fourth quarter has generally been very strong for the industrial commodities we follow such as copper, molybdenum, rare earths, lithium and uranium as well as precious metals such as gold and silver.? Additional monetary easing should act as a catalyst for these sectors as well as increasing tensions in the Middle E! ast espe cially Iran.? The fourth quarter comeback in gold, silver and the miners to close September's downside gaps has been a surprise to many.

In late April and September, mining stocks attempted to break into new highs on low volume and failed.?? Mining equities and natural resource stocks began their consolidations breaking long term trendlines and moving into a major area of support at $52.50 a key line in the sand. Precious metal investors ran to the underlying bullion and long term treasuries as a means of a safe haven and aversion to any market risk.

We believes capital will begin flowing back in from treasuries and cash into first precious metal miners and critical wealth in the earth assets as economic stimulus is reintroduced into the market.? As Omar Khayyam wrote centuries ago, "Come, grow along with me, the best is yet to be."? Look for temporary pullbacks and sell offs as opportunities in the long upward ascent of precious metals.? Stay tuned to my?free service for flash bulletins.

Check out this recent interview below with Peter Dougherty, President & CEO of Argonaut Gold(AR.TO), one of the few gold miners significantly outperforming their peers in 2011 and hitting new 52 week highs. ?It should be noted that the current management team at Argonaut previously served at Meridian Gold which was sold to Yamana for $3.5 billion dollars.


Top 10 Biggest Stock Price Percentage Movers Nov. 8th

Wall St. Watchdog reveals information about 10 stocks showing big percentage moves on our trading screens:

Big gainers:

  1. DealerTrack Holdings, Inc. (NASDAQ:TRAK): Up +13.91%. DealerTrack Holdings Inc. provides on-demand software and data solutions for the automotive retail industry in the United States. The Company utilizes the Internet to link automotive dealers with banks, finance companies, credit unions and other financing sources, and other service and information providers, such as the major credit reporting agencies. Get the most recent company news and stock data here >>
  2. YPF SA (NYSE:YPF): Up +13.49%. YPF Sociedad Anonima explores for, develops, and produces oil and natural gas in South America, the United States, and Indonesia. The Company also refines, markets, transports, and distributes oil and other petroleum products, petroleum derivatives, petrochemicals, and liquid petroleum gas. Get the most recent company news and stock data here >>
  3. The St. Joe Company (NYSE:JOE): Up +11.57%. The St. Joe Company is a real estate operating company. The Company provides community, commercial, industrial, leisure, and resort development, as well as timber, and commercial real estate services. Get the most recent company news and stock data here >>
  4. Hologic, Inc. (NASDAQ:HOLX): Up +10.14%. Hologic, Inc. develops, manufactures, and markets x-ray systems. The Company makes x-ray bone densitometers that measure the precise bone density for use in the diagnosing of metabolic bone diseases such as osteoporosis. Get the most recent company news and stock data here >>
  5. Dendreon Corporation (NASDAQ:DNDN): Up +10.01%. Dendreon Corporation discovers and develops immunologically based therapeutic products for the treatment of cancer. The Company combines knowledge in immunology and antigen engineering with proprietary cell separation technologies! to deve lop therapeutic vaccines that induce cell-mediated immunity, the body’s key defense against cancer. Get the most recent company news and stock data here >>

Big losers:

  1. WMS Industries Inc. (NYSE:WMS): Down -16.9%. WMS Industries Inc. designs, manufactures, sells, and leases gaming machines and video lottery terminals. The Company’s products are distributed throughout the United States and internationally. Get the most recent company news and stock data here >>
  2. Nomura Holdings, Inc. (NYSE:NMR): Down -12.53%. Nomura Holdings, Inc. is a holding company which manages financial operations for its subsidiaries. As a group, the Company provides a variety of financial services such as dealing, brokerage, underwriting, and asset management. Nomura Securities Co., a registered member of the New York and London Stock Exchanges, has branches around the world. Get the most recent company news and stock data here >>
  3. Amylin Pharmaceuticals, Inc. (NASDAQ:AMLN): Down -10.89%. Amylin Pharmaceuticals, Inc. is a biopharmaceutical company that discovers, develops, and commercializes medicines for diabetes and obesity. The Company’s marketed products include treatments for adults with type 1 and type 2 diabetes. Get the most recent company news and stock data here >>
  4. International Flavors & Fragrances Inc. (NYSE:IFF): Down -9.53%. International Flavors & Fragrances Inc. creates and manufactures flavor and fragrance products. The Company’s fragrance products are sold to manufacturers of perfumes, cosmetics, soaps and detergents, and its flavor products to manufacturers of prepared foods, beverages, dairy foods, pharmaceuticals, and confectionery products. Get the most recent company news and stock data here >>
  5. Mindray Medical International Ltd (NYSE:MR): Down -9.41%. Mindray Medical International Limited develops! , manufa ctures, and markets medical devices. The Company offers patient monitoring devices, diagnostic laboratory instruments, and ultrasound imaging systems. Get the most recent company news and stock data here >>

Yields of 13%-Plus from the Best-Performing Asset Class of the Decade

One of the most successful high-yield energy investments in the world is a type of security few investors even know exists, let alone own.

They aren't stocks and they aren't bonds, but they are the No. 1 performing asset class of the past 10 years -- up 288%. Stocks are up just 31% during that stretch and bonds, which have been in a major bull market, are up 71%.

Many of these companies have raised dividends at an almost 10% annual pace in the past decade. And their prices have also risen, generating total annual appreciation between 15%-20%.


That's why these investments give you the exact same double whammy -- high yields and explosive growth -- that has propelled so many big winners to the top of The 21 Best Income Stocks of the Past Decade I told you about in my previous article.

The companies I'm talking about are called master-limited partnerships -- or MLPs for short -- and they have two overriding characteristics. They are overwhelmingly in the energy business and they usually pay high yields -- 5% to 7% on average... and upwards of 13% for some profitable firms.

What drives the revenue-generating power of these companies is the business they're in.

MLPs are publicly-traded limited partnerships that run critical "midstream" energy infrastructure. That's the pipelines, storage tanks, terminals and ships that move energy from producer to the end-user.

In short, they are the arteries through which our economic lifeblood flows.

And the beauty of MLPs is that while they are energy companies, they are insulated to some extent from price fluctuations in commodities.

For MLPs, it's more about demand. For most of their revenue, it doesn't matter whether oil is at $50 a barrel or $150. As long as the stuff keeps flowing throug! h their pipelines, they profit -- along with their investors.

That's one big reason why MLPs have steadily churned out double-digit total returns year after year, despite volatile commodity prices.

Another reason is because MLPs pay out upwards of 90% of their profits to investors -- making them some of the highest-yielding investments on the planet.

While most investors are drawn to the high yields these businesses throw off, plenty of these companies have also grown impressively, creating sizable capital gains for investors.

For example, Enterprise Products Partners (NYSE: EPD) was launched in 1998. A $10,000 investment back then would now be getting $5,322 a year in distributions -- a 53% annual yield on the initial investment. And that's on top of a capital gain of 149%. Assuming distributions were reinvested, the total gain today would be more than $80,000.

Enterprise is by no means an isolated example. If you're looking for sky-high yields, a quick search shows the top yielder in the group is Niska Gas Storage Partners (NYSE: NKA), which pays more than 13% -- and at least eight other MLPs come close to matching that impressive number.

Now, I'm not saying that MLPs represent a risk-free investment. MLPs tend to deliver steadier results, but they're not without risk.

For example, the Alerian MLP Index -- which is a handy proxy for the major MLPs -- fell sharply in 2008.

>  That said, there are some compelling reasons that I think will drive MLPs higher during the next three to five years -- and maybe into the much longer term.

Global demand for energy has been, and continues to be staunch. In fact, we've only seen one decline in annual energy consumption in the past 30 years.

Meanwhile, the spread of production technologies such as directional drilling and hydraulic fracturing have opened huge new sources for oil and gas production ! from sha le formations in the United States. According to industry insiders, the energy being produced from the shale in places such as Eagle Ford in south Texas is already outstripping the available pipeline and storage capacity. This shale boom has led to a big increase in the need for the energy infrastructure that these MLPs provide.

Jones Soda Co. Earnings Cheat Sheet: Streak of Four Straight Quarters of Expanding Margins Snapped

Jones Soda Co. (NASDAQ:JSDA) reported its results for the third quarter. Jones Soda develops, produces, markets and distributes a range of premium beverages and related products in the United States and Canada.

Jones Soda Earnings Cheat Sheet for the Third Quarter

Results: Loss widened to $1.7 million (5 cents per diluted share) from $578,000 (loss of 2 cents per share) in the same quarter a year earlier.

Revenue: Fell 3.1% to $5 million from the year earlier quarter.

Quoting Management: “We are pleased that our strategies to grow our business in our core products coupled with our strategic reinvestment in our sales personnel are taking hold, and we believe we are on track for 2011 to achieve low double digit annual revenue growth in our North American core products compared to 2010. We remain optimistic that demand for our core products will continue as we move into 2012, while operating expense leverage will help create a sustainable business for the long-term with improved bottom line performance.”

Key Stats:

Gross margins fell 3.6 percentage points to 23.5%. The contraction appeared to be driven by falling revenue, as the figure fell 3.1% from the year earlier while costs rose 1.6%.

Revenue has fallen in the past two quarters. In the second quarter, revenue declined 8.4% to $4.9 million from the year earlier quarter.

Competitors to Watch: National Beverage Corp. (NASDAQ:FIZZ), Hansen Natural Corporation (NASDAQ:HANS), Dr Pepper Snapple Group Inc. (NYSE:DPS), Reed’s, Inc. (NASDAQ:REED), PepsiCo, Inc. (NYSE:PEP), The Coca-Cola Company (NYSE:KO), Celsius Holdings, Inc. (NASDAQ:CELH), Coca-Cola Enterprises Inc. (NYSE:CCE), Coca-Cola Bottling Co. Consolidated (NASDAQ:COKE), and Cott Corporation (NYSE:COT).

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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RIM: Value Investor Cooperman Buys In, Says CNBC

In case you missed it, CNBC’s Closing Countdown this afternoon reported that value investor Leon Coooperman’s Omega Advisors has purchased 1.425 million shares of Research in Motion (RIMM) as a new holding, according to federal filings Omega has made.

With the drop below book value last week of RIM’s stock, there has been speculation the shares might lure value investors.

Pacific Crest‘s James Faucette acknowledged as much in a note earlier today, while still refusing to recommend the shares.

RIM shares today closed down 47 cents, or 2.6%, at $17.58, but the stock is up 7 cents in late trading.

The True Intrinsic Value Of Euro 'Money'

Ever wondered about the true intrinsic value of Euro banknotes?
Prudent Investor blog reader Kurt Lindlgruber frim Austria sent me this pragmatic approach, pulling up the calorific value of such notes once they have lost their purchasing power as did all fiat currencies in history.
Lindlgruber's calculations contradict French philosopher Voltaire's famous quote that

'Paper money will always return to its intrinsic value. Nothing.'

Is Limited Brands' Stock Cheap by the Numbers?

Numbers can lie -- but they're the best first step in determining whether a stock is a buy. In this series, we use some carefully chosen metrics to size up a stock's true value based on the following clues:

  • The current price multiples.
  • The consistency of past earnings and cash flow.
  • How much growth we can expect.

Let's see what those numbers can tell us about how expensive or cheap Limited Brands (NYSE: LTD  ) might be.

The current price multiples
First, we'll look at most investors' favorite metric: the P/E ratio. It divides the company's share price by its earnings per share -- the lower, the better.

Then, we'll take things up a notch with a more advanced metric: enterprise value to unlevered free cash flow. This divides the company's enterprise value (basically, its market cap plus its debt, minus its cash) by its unlevered free cash flow (its free cash flow, adding back the interest payments on its debt). Like the P/E, the lower this number is, the better.

Analysts argue about which is more important -- earnings or cash flow. Who cares? A good buy ideally has low multiples on both.

Limited Brands has a P/E ratio of 14.1 and an EV/FCF ratio of 13.6 over the trailing 12 months. If we stretch and compare current valuations to the five-year averages for earnings and free cash flow, Limited Brands has a P/E ratio of 21.0 and a five-year EV/FCF ratio of 21.5.

A positive one-year ratio under 10 for both metrics is ideal (at least in my opinion). For a five-year metric, under 20 is ideal.

Limited Brands is zero for four on hitting the ideal targets, but let's see how it compares against some competitors and industry mates.?


1-Year P/E!

1-Year EV/FCF

5-Year P/E

5-Year EV/FCF

Limited Brands 14.1 13.6 21.0 21.5
Gap (NYSE: GPS  ) 9.2 7.9 10.2 8.1
Ann (NYSE: ANN  ) 15.9 18.8 NM 14.4
Nordstrom (NYSE: JWN  ) 16.0 15.1 18.8 22.3

Source: S&P Capital IQ; NM = not meaningful due to losses.

Numerically, we've seen how Limited Brands' valuation rates on both an absolute and relative basis. Next, let's examine...

The consistency of past earnings and cash flow
An ideal company will be consistently strong in its earnings and cash flow generation.

In the past five years, Limited Brands' net income margin has ranged from 1.1% to 9%. In that same time frame, unlevered free cash flow margin has ranged from 0.8% to 11.6%.

How do those figures compare with those of the company's peers? See for yourself:


Source: S&P Capital IQ; margin ranges are combined.

Additionally, over the last five years, Limited Brands has tallied up five years of positive earnings and five years of positive free cash flow.

Next, let's figure out...

How much growth we can expect
Analysts tend to comically overstate their five-y! ear grow th estimates. If you accept them at face value, you will overpay for stocks. But while you should definitely take the analysts' prognostications with a grain of salt, they can still provide a useful starting point when compared to similar numbers from a company's closest rivals.

Let's start by seeing what this company's done over the past five years. In that time period, Limited Brands has put up past EPS growth rates of 9.1%. Meanwhile, Wall Street's analysts expect future growth rates of 14.6%.

Here's how Limited Brands compares to its peers for trailing five-year growth:


Source: S&P Capital IQ; EPS growth shown.

And here's how it measures up with regard to the growth analysts expect over the next five years:


Source: S&P Capital IQ; estimates for EPS growth. *Gap's future growth rate is not applicable because of negative estimates.

The bottom line
The pile of numbers we've plowed through has shown us the price multiples shares of Limited Brands?are trading at, the volatility of its operational performance, and what kind of growth profile it has -- both on an absolute and a relative basis.

The more consistent a company's performance has been and the more growth we can expect, the more we should be willing to pay. We've gone well beyond looking at a 14.1 P/E ratio, and we see some reasonable numbers all around -- from decent price multiples to consistent profitability to solid growth in a tough economy. While Limited Brands doesn't look dirt cheap, the initial numbers aren't discouraging. However, one thing to check out next is its debt picture. And if you find Limited Brands' numbers or story compelling, don't sto! p. Conti nue your due diligence process until you're confident one way or the other. As a start, add it to My Watchlist to find all of our Foolish analysis.

To see the stocks that I've researched beyond the initial numbers and bought in my public real-money portfolio, click here.

As the market suffered a crushing blow, Yahoo fell by just a nickel

Yahoo (NASDAQ:YHOO) �C This large-cap information technology giant had been trading within a bear channel since May. But at August��s low, prices turned sharply higher, which led to a break through a double-top in October, following a quick correction that drew unusually high volume.

On a day like yesterday, when the market suffered a crushing blow, YHOO fell by just a nickel. Rumors persist of a takeover by a larger company continue reported in the press. The chart breakout yields a trading target of $20.

Trade of the Day Chart Key

Oh, THAT Italy

Equity markets yesterday, especially in the U.S. (which fell -3.7%, underperforming many of their European counterparts), seemed suddenly to realize that the news from Monday and Tuesday about the deterioration in the circumstances of Italy was not irrelevant to the global investing community. From time to time, I think to myself “if I am ever asked by my alma mater to give a speech on efficient markets, here is an interesting exhibit,” and this was one of those times. Nothing new happened yesterday to suddenly trigger an equity rout, as far as I can see. Yes, Italian bonds collapsed further, with the 10-year note at one point about 70bps worse on the day before a rally pulled yields down to only 7.25% (according to Bloomberg). But it is hard to see why 7.25% is so dramatically worse than 6.75% the prior day. Perhaps it’s the rate of change that finally got investors’ attention.

While most European policymakers seem startled, if not downright shocked, at the dramatic turn of events in Italy – as am I; I really didn’t see this happening so quickly – only a few seem to be making statements. German Finance Minister Schaeuble advised that Italy should request aid from the EFSF if it needs it, but also expressed a lack of concern since current Italian spreads to Germany are similar to what they were prior to Italy’s joining the EU and stated his confidence that yields would fall again once confidence returned.

And it is comments like this that ought to be the scariest. Schaeuble is in the thick of the fight, but still professes to believe that this crisis is all about confidence (and mean old hedge funds). Others feel the same way, so they are doing things such as allowing banks to change assumed default probabilities of loans and other credit product so that the banks can claim to be better-capitalized. Surely this will give people more confidence and they can drive markets higher and we will all ! be happ y. But obviously – at least, to most of us – this is not all about investor or consumer confidence. The sovereign issues are about unsustainable fiscal policies and leverage, adopted at times when money seemed free, and frankly the banking problems aren’t much different in source. I don’t know how to unscramble that egg but I am pretty sure it cannot be done painlessly. But unscramble it must. The long-term solution to unsustainable fiscal policies and leverage is sustainable fiscal policies and savings (deleveraging). The short-term solution might well be default.

The S&P still trades at a dividend yield of only 2% and a Shiller P/E of 20 compared to a long-run average of 16. It doesn’t trade like we’re lacking confidence, until yesterday perhaps. Stocks fell hard yesterday and look tired technically. Volumes were heavier, but didn’t even reach the levels of November 1st, much less what we were seeing in August or late September/early October. The VIX rose to 36, which is about the middle of the range it has held for the most part since early August.

Inflation swaps fell 7-10bps, and commodities dropped -1.35%. To some extent, it is a bit surprising how much commodities outperformed equities, since they have been lagging quite a bit recently; from a different perspective it is amazing that they’re not doing much better. A friend yesterday wrote insightfully, “Germany is just going to have to let the ECB print money and hope for the best, or put an end to [the Euro].” To which I would add the question: if the Euro breaks up, do you think the many newly independent central banks would not print? More and more, it looks to me like an endgame that doesn’t include printing money is unlikely.

Fiscal austerity and money printing would be half of the right prescription. Add to that the curious fascination that seems to be developing with! the &ld quo;Evans Plan” of allowing U.S. inflation to rise to 3-4% until Unemployment falls below (for example) 7%, and it is incredible to me that inflation protection is still so cheap. I feel like I am already repeating myself with this, and likely will grow gradually more shrill until the market eventually realizes it.

I said above that “fiscal austerity and money printing would be half of the right prescription.” A better prescription would be fiscal austerity without money printing. Money printing will likely make things worse, not better, but it is a matter of faith among central bankers that printing money will help growth. When you only have a hammer, everything looks like a nail. This also explains the hypnotic fascination with the Evans-led concept that somehow if we just let inflation get away from us, unemployment will fall. Because, after all, look how well that worked in the 1970s!

I am continually amazed that such superstitious nonsense still has currency at high levels of economic thought. Let me make this really simple. The chart below (click to enlarge) shows chain-weighted GDP and the core consumer price index (if you use the headline index, the growth effect on oil prices creates an illusion of correlation, but if there is anything to the connection between growth and inflation is should certainly be seen on the index with those few items removed).

GDP vs the price index.

Fewer Choices for Better 401(k) Results?

When it comes to retirement plans, there are those who prefer the no-fuss cruise control of target date funds. There are others who prefer to get their hands dirty and choose their own slate of investments.

But what about those somewhere in between -- the folks who want a combination of simplicity, diversity and strategy that neither option fully affords them?

That space between target date funds and a plan's set of core options is where J.P. Morgan Asset Management(JPM) has set its sights as it promotes a "fundamental rethinking" of the traditional menu of investment choices offered by most U.S. defined-contribution plans.

This morning, the firm unveiled Core Menu Innovation, an effort to "replace overly complex and redundant fund lineups" with a simplified menu of just three investment portfolios: one consisting of diversified stock strategies, another with diversified bond strategies and one with diversified cash alternatives. Investors can allocate these strategies as they see fit and use them as an easy way to inject more challennging assets like commodoties, REITS and global stocks and debt into their portfolio.

"The 401(k) plan is the primary retirement savings vehicle for most Americans today, so it's critical that we help participants make better investment decisions," says Michael Falcon, head of retirement for J.P. Morgan Asset Management. "[Our] research shows that participants who choose to invest on their own rather than participate in some form of professionally managed solution are, on average, falling short of their retirement-savings goals. We have to help them close that gap."

Falcon describes his firm's new approach as "providing fewer, but more sophisticated, investment options" and leveraging the diversification benefits found in target date funds and other professionally managed asset allocation solutions.

"We would believe that most f! or most savers, and for most plans, target date investing is a great solution, if not the best solution," Falcon says. "I think what we've found, however, is that 80% of the investments are still in the core menu. We obviously see better results when investors are broadly diversified and rebalanced, regardless of whether they are in a target date or core menu solution. There are too many people in those core menu investment options who are not broadly diversified."

"We still have a lot of individuals who for a variety of reasons want to have more control," he adds. "They don't want to put everything in a target date fund; 30% of our savers and investors indicate to us that they are interested to some level in self-direction. So the challenge we tasked ourselves with was what sits in between for the individual who doesn't want to choose a target date solution but is overwhelmed and frustrated by the complexity of the core menu."

Falcon tells of being at a recent conference where a speaker relayed research involving Godiva chocolates. One test group was given one choice from six flavors; another group had 30 variations to choose from.

The first group, though disappointed that they lacked as many options, tended to report that they were happy with their selection. The latter group, which initially thought they benefited from a multitude of choices, wound up second-guessing themselves and were less satisfied.

The chocolate choices mirror what investors go through when it comes to a DC plan's investment options. Over the years, they have demanded a greater array of choices. The average 401(k) plan core investment lineup now includes at least 18 different fund choices, and often many more.

"I think individuals find that degree of choice overwhelming," Falcon says.

Research shows that when participants are presented with complex or an overwhelming number of choices, they are most likely to make no choice at all or ! an unedu cated one -- either of which leaves them inadequately diversified and overexposed to individual investment strategies, he adds.

J.P. Morgan Asset Management's approach involves consolidating and streamlining the numerous mutual funds found in an average DC plan into professionally managed stock, bond and cash alternative investment options designed by its Global Multi Asset Group, which is also responsible for its target date fund offerings. Within each consolidated core portfolio, investment choices incorporate diversification across traditional and extended asset classes.

"This allows an investor to mix and match among the three to get the desired outcome, diversification and risk profile that they want," Falcon says.

"I think we in the defined-contribution space have to constantly look at making sure that the best options are presented in ways that are actually used and engaged in by the participant base," he adds. "Target date funds have actually been a huge success, but I don't think we should be resting on our laurels, if you will. We also need to find something for the people who aren't in target date for whatever reason."

Unfortunately, it means things are about to get very, very ugly

Election Day 2011 is in the books. You may think it lacked fireworks, considering how big the prize will be in 2012, but here are some choice political headlines from yesterday��s votes across the U.S.:

  • Ohio voters repealed a controversial labor law limiting union rights.
  • Early results show a political newcomer ousted an entrenched and polarizing Republican in the Arizona state Senate, and Democrats in the swing state of Virginia saw their majority in the Commonwealth��s upper house erode.
  • Voters in Mississippi rejected a controversial ballot measure that would have defined human life as beginning at fertilization.

These are all weighty developments. Political junkies are probably already chewing on the juicy details, and a host of other outlets will be dissecting these and other specific issues at length over the next few days as results are finalized.

But the most important thing about Tuesday��s vote is, of course, what it means for the White House race in 2012.

And unfortunately, it means things are about to get very, very ugly.

Look Out Incumbents!

The Ohio vote is interesting not just because it’s the latest in a long line of collective bargaining measures, but because it’s the result of a popular vote to repeal legislation enacted by incumbents.

The whopping 62% to 38% margin reported late Tuesday night shows just how out of touch legislators are with their constituents. Of course, you can cite low turnout or tout the legislature��s obligation to do what��s right even if it��s unpopular, but you can��t deny the loud voice of protest heard in this vote.

The anti-incumbent backlash and quick change of sentiment seems to be a theme nationwide. Take the first-ever recall vote in the conservative border state of Arizona to replace a controversial anti-immigration legislator after 10 years as an incumbent. Even more interesting is that a GOP g! overnor initiated the recall against the sitting lawmaker.

Also of note is a very competitive race in the swing-state of Virginia to oust incumbent Democrats. Considering President Obama was the first Democratic presidential candidate in 44 years to win Virginia, this is certainly noteworthy.

And it goes without saying that since Obama is also an incumbent, he has a tough hill to climb a year from now.

It Will Only Get More Polarizing

The fierce debate over labor laws in Ohio — and in Wisconsin and elsewhere previously — pales compared to the divisiveness in Mississippi, where the hottest of hot-button issues was rolled out at the ballot box.

It��s hard to have a ��moderate�� conversation even among friends about abortion. Just imagine what the scene was for voters in Mississippi as pro-life and pro-choice forces turned the state into a battleground over their agendas.

For those of you who are sick of the polarizing political atmosphere, expect issues like this to pop up again in a year. And worse, with the Supreme Court having eased restrictions on corporate election spending and the prospect of a big voter turnout, you’ll be suffering the tug-of-war of hyperbolic campaign ads very, very soon.

Jobs Remain Elusive

Perhaps most disconcerting is that all of the candidates appearing on the ballot yesterday touted how important it is to jump-start the economy and put Americans back to work. But the sad reality is that legislation at the local, state and federal level remains either a misguided or ineffective way to stimulate growth.

Consider that, according to a Challenger, Gray & Christmas report, government layoffs were the primary source of job losses in the economy for the first six months of this year! How are our lawmakers part of the solution with a statistic like that?

Admittedly, it’s a tall order to dig out of this deep hole — and some free-market purists would argue that it��s no! t even t he government��s job to consider digging us out.

However, politicians across the nation ran on the notion of job creation. Voter polls continue to show that the economy is the top concern. Everyone is talking a great deal about government��s role in spurring economic growth.

But talk is cheap. Thus far, lawmakers on every level continue to fail their constituents and fail on their promises of meaningful changes that can draw down unemployment. Those failures led to the ousting of many incumbents, but voters may be disappointed if they expect the new names will mean better results.

How To Play America's Fourth Biggest Oil Producing State

When the Barnett Sale gas play in Texas was first drilled, drilling started out slow, but then ramped up rapidly once the size and scope of the play was fully understood. The same thing is happening in the Bakken formation.

The Bakken is an oil- and natural gas-rich formation covering a 200,000 square mile area encompassing parts of Montana, North Dakota and Saskatchewan. According to an April 2008 survey by the USGS, it’s estimated to contain as much as 4.3 billion barrels of recoverable reserves.

While initial drilling activity was slow and drill rigs were sparse, it eventually picked up. Rapid growth ensued starting in 2006, and continues to the present day.

The reason production saw such a rapid rise was the introduction of horizontal drilling and fracking, similar to what’s fueled the meteoric rise of other oil and natural gas shale plays.

Take a look at the first graphic below, courtesy of the EIA. The larger the circle diameter, the bigger the well flow. Green circles represent wells where the majority of the output is oil, yellow is a mix, and red is mostly gas.

In 2005, nearly all of the oil drilling was taking place in Montana, on the western side of the play, while most of the gas wells were being drilled in the southern part of the Bakken known as Billings Nose.

Now take a look at a snapshot of Bakken drilling activity as it existed at the end of 2010. What a difference a few years makes.

The Parshall Field was discovered in 2006. It’s located in the eastern-most part of the Bakken. It initiated a huge shift towards drilling in the oil-rich part of the Bakken field. As a result, the eastern side of the play is where a lot of the action is.

Oil production began to skyrocket starting in 2003, and hasn’t looked back. It now far overshadows the natural gas production from the Bakken.

It’s! all tur ned North Dakota into America’s fourth largest oil producer. Only Texas, California and Alaska produce more. It’s most been due to the gains in the Bakken.

Based on data from North Dakota’s Department of Mineral Resources, total production for the state averaged 445,000 barrels of oil per day (bopd) in August 2011. That’s a 29 percent increase in just eight months time.

Even more impressive, back in 2000, Bakken production averaged just 2,000 bopd. At the end of 2010, it was more than 260,000 bopd. Over 90 percent of Bakken production is from horizontal wells, and that percentage will only increase as more are drilled.

Who Are the Big Bakken Players?

One of the biggest oil drillers and producers in the Bakken is Continental Resources, Inc. (NYSE: CLR). Seventy percent of Continental’s reserves are located in the Bakken.

Brigham Exploration Company (Nasdaq: BEXP) is another large Bakken driller. It recently announced it’s being acquired by Statoil ASA (NYSE: STO), the Norwegian oil and gas giant.

A number of shareholder lawsuits have sprung up subsequent to the announcement, contending that the $36.50 a share offer price is far too low. It’s a great example of how desperate other companies outside the United States are to find additional sources of oil.

Another, smaller but no less active producer is Whiting Petroleum Corporation (NYSE: WLL). Whiting is active in the Sanish Field in the northern part of the Bakken play. It also has active exploration activities underway in the Collingswood Shale formation in northern Michigan, and in the Permian Basin in western Texas.

Investors wanting to participate in the continued growth of the Bakken might want to consider shares of either Continental or Whiting. Both will be drilling on their Bakken acreage for years to come. As oil prices continue to rise, oil companie! s share prices will rise right along with them.

Disclosure: None

Carriers hope wireless Internet will boost ancillary revenue

With monster fuel bills and growing customer unrest over higher fares and baggage fee hikes, airlines are desperately seeking value-added services that passengers desire enough to pay for. Enter in-flight wireless Internet access, or Wi-Fi.

The idea is airline passengers — particularly the industry��s highly coveted business travelers — want to be just as connected at 35,000 feet as they are on the ground. There��s been rising growth of in-flight Wi-Fi over the past year, both in passenger usage rates and the percentage of airline fleets where wireless broadband service is available, according to market research firm In-Stat. In fact, in-flight Wi-Fi revenues are forecast to exceed $1.5 billion by 2015.

That��s great news for airlines like Delta (NYSE:DAL), American (NYSE:AMR), US Airways (NYSE:LCC), Southwest (NYSE:LUV), JetBlue (NASDAQ:JBLU) and United Continental (NYSE:UAL), all of which have been pressured by razor-thin margins. While airline stocks have bounced in recent weeks, they still are down on the year — a good measure being the Guggenheim Airline ETF (NYSE:FAA), which is down more than 36%.

Since Google (NASDAQ:GOOG) subsidized Wi-Fi access onboard select Delta, Air Tran (now part of Southwest) and Virgin America flights last holiday season, the share of passengers using Wi-Fi has grown from 4% to 7%.

Smartphones and tablets are becoming passengers�� devices of choice. In-flight providers also are rolling out new passenger services like streaming video that could further boost revenue for the industry. Most airlines that offer Wi-Fi price it at $11 to $49 for computer devices and $4.95 to $19.95 for mobile devices, according to the Airport Wi-Fi Guide. Southwest, however, has been promoting the service at a $5 introductory price.

But there��s a battle b! rewing a mong in-flight Wi-Fi vendors. United Continental has tapped Panasonic��s (NYSE:PC) Avionics unit to install satellite-based Wi-Fi on more than 300 aircraft in its domestic and international fleets. Continental had not offered wireless Internet before the merger, but United had used privately held Gogo LLC��s Gogo air-to-ground system.

Gogo, which earlier this year raised $35 million in preparation for an IPO, publicly criticized UAL last week for switching to Panasonic. ��United��s announcement that they��ve selected Panasonic Avionics Corporation is a disappointment,�� the company said on its website. ��As the leader in the domestic marketplace, with more than 1,200 commercial aircraft installed, Gogo is the here and now, and we believe our current Air to Ground service is superior in many ways to Ku satellite technologies.��

The air-to-ground vs. satellite debate is not likely to end anytime soon. AirTran, which uses Gogo, was the first U.S. airline to roll out Wi-Fi fleet-wide. Southwest, which is completing its merger with AirTran, uses satellite-based Wi-Fi from Row 44. Gogo still provides in-flight wireless service to American, Delta, US Airways and Virgin America, while JetBlue is partnering with ViaSat to deploy a broadband satellite-based system on its fleet beginning in 2012.

Bottom Line: If there��s any reasonable way to enhance ancillary revenue — particularly without enraging passengers — airlines are likely to give it a go. Consider that even Amtrak is extending Wi-Fi availability to a dozen new markets. And if Wi-Fi becomes another thing about a train that��s magic, it might shift the competitive playing field just enough to make in-flight Wi-Fi a necessity instead of a novelty.

As of this writing, Susan J. Aluise did not own a position in any of the aforementioned stocks.

4-Star Stocks Poised to Pop: Steel Dynamics

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, steel products manufacturer Steel Dynamics (Nasdaq: STLD  ) has earned a respected four-star ranking.

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

Steel Dynamics facts

Headquarters (Founded) Fort Wayne, Ind. (1993)
Market Cap $2.96 billion
Industry Steel
Trailing-12-Month Revenue $7.67 billion

Co-Founder/Chairman/CEO Keith Busse

Co-Founder/President/COO Mark Millett

Return on Equity (Average, Past 3 Years) 3.9%
Cash/Debt $456.7 million / $2.38 billion
Dividend Yield 3%

AK Steel (NYSE: AKS  )

Nucor (NYSE: NUE  )

U.S. Steel (NYSE: X  )

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

On CAPS, 96% of the 992 members who have rated Steel Dynamics believe the stock will outperform the S&P 500 going forward. These bulls include laborduck and QuarkHadron.

This past summer, laborduck tapped Steel Dynamics as a particularly strong selection: "A vertical, mini-mill steel co! mpany wi th growing opportunities for expansion ... and an excellent track record of returning value to shareholders."

Over the next five years, in fact, Steel Dynamics is expected to grow its bottom line at a brisk rate of 16% annually. That's faster than competitors like AK Steel (5%), Nucor (12%), and U.S. Steel (7%).

CAPS member QuarkHadron elaborates on the Steel Dynamics bull case:

Long term -- 5 years. Good PE, book value near share price. Dividend and it looks like earnings can continue to support it. Infrastructure building will need to get (re)started when economy starts to improve -- gotta happen eventually.

I needed some basic manufacturing in my portfolio, and this one seemed to fit the bill nicely.

What do you think about Steel Dynamics, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!

The Highest-Growth Travel Stocks

Why are investors willing to pay only 10 times earnings for some stocks, but 20, 50, even 100 times earnings for others?

The short answer: growth. Companies that can grow their earnings meaningfully could make lofty current P/E ratios look cheap in hindsight.

Of course, any company can promise a rosy, growth-rich future. Figuring out which companies can actually deliver is far trickier. In this series, I take the first step by identifying companies that have put up the best growth track records in their respective sectors.

Below, I've listed the top sales growers in hotels, resorts, and cruise lines over the last five years. Here's how to interpret each data column.

  • Five-year sales growth: I rank each company's sales growth, to capture its pure trailing expansion without regard to the vagaries of earnings.
  • Five-year EPS growth: Since sales growth means nothing if it doesn't ultimately fall to the bottom line, I've also included each company's five-year trailing EPS growth rate.
  • Five-year analyst estimates: This column shows us how much EPS growth analysts expect over the next five years. Just keep in mind that analysts tend to grossly overestimate a company's prospects.
  • Five-year ROIC range: Return on invested capital basically shows you how efficiently a company is converting its debt and equity into profits. We want companies that can do a lot with a little. By looking at the five-year range, we can start to gauge both the power and the consistency of a company's profit engine.


5-Year Sales Growth

5-Year EPS Growth

5-Year Analyst Estimates

5-Year ROIC Range

Home Inns & Hotels Management (Nasdaq: HMIN  ) 51.0% 31.6% 20.8% 2.3% / 10.1% (Nasdaq: CTRP  ) 37.8% 32.4% 25.5% 11.8% / 19.9%
eLong (Nasdaq: LONG  ) 15.2% NM N/A (1.5%) / 2.1%
Royal Caribbean Cruises (NYSE: RCL  ) 7.4% (0.9%) 15.0% 2.7% / 4.6%
InterContinental Hotels (NYSE: IHG  ) 7.1% (0.7%) 13.9% 13.4% / 25.2%
Orient-Express Hotels (NYSE: OEH  ) 6.2% NM (3.4%) 0.6% / 3.8%
Carnival Corporation (NYSE: CCL  ) 5.9% (1.5%) 12.0% 4.3% / 6.3%

Source: Capital IQ, a division of Standard & Poor's. NM = not meaningful; EPS growth that is NM results from losses during the period. N/A = not applicable; analyst estimates that are N/A result from lack of analyst coverage.

Use the table above as a first step to help you generate ideas for your own further research. Once you identify stocks worth a closer look, the following three steps will help you further assess their growth prospects:

    < li>Carefully study the table for possible danger signs, such as high sales growth but low EPS growth, analyst growth expectations significantly trailing past growth, and low ROIC figures. Then follow the trail.
  • Find out how the company achieved its prior growth: organically, or via acquisition? Can it sustain that previous growth?
  • Pay attention to how management plans to implement its growth plans. Does its strategy seem prudent and plausible to you?

Remember: The more profitable, efficient, and predictable growth a company can achieve, the more we investors should be willing to pay.

Learn more about any of the stocks that interest you by adding them to our My Watchlist tool. You'll get access to all the latest Motley Fool analysis, organized by company.

Tech Business Recap: Activision Crashing Servers, HP Back to webOS

Hewlett Packard Co. (NYSE:HPQ) may sell its webOS mobile platform. The company purchased it from Palm in 2010 for $1.2 billion and most likely won’t see its investment returned due to not adding any investment dollars to the software.

Interested buyers may include Inc.?(NASDAQ:AMZN) and Research In Motion (NASDAQ:RIMM).

Smartphones will usher in a new era with its first quad-core processor phone thanks to the?HTC Edge. With the latest mobile technology, the phone runs on an?Nvidia Corporation (NASDAQ:NVDA) Tegra 3 chip. It represents a?win for the company as compared to Qualcomm Inc.’s (NASDAQ:QCOM)?Snapdragon S4 processor, even with HTC’s long?reliance?on Qualcomm chips.

Activision Blizzard Inc?(NASDAQ:ATVI) launched its newest addition to the Call of Duty series today, Call of Duty: Modern Warefare 3, just in time to battle?Electronic Arts’?(NASDAQ:ERTS)?Battlefield 3 during the holiday season. EA has been trash-talking Call of Duty and is heavily promoting its new Battlefield 3 series through?TV commercials and billboards.

Investing Insights: Activision Blizzard Inc Earnings Cheat Sheet: Beats Estimates. Incorporated (NASDAQ:PCLN) announced a weak fourth quarter guidance with its third quarter earnings on Monday.?Piper Jaffray increased the company’s price target to $670 from its strong quarterly report and also cited international growth potential and its leading overseas market share as factors.

Demand Media (NYSE:DMD) continued trading higher after beating estimates in its third quarter earnings report.?Goldman Sachs Group (NYSE:GS) increased its price target based on the company’s improved internal rate of return; however,?Henry Blodget said not so fast. He wrote that?Demand Media saw a profit after treati! ng its c ontent costs as a capital investment; this is not the norm for a media company.

Honeywell: Right Place at the Right Time, Says Citi

Honeywell (HON) is well-positioned to grow in 2012, and investors should jump on the bandwagon now, says Citi analyst Deane Dray in upgrading his rating on the company’s shares to Buy from Neutral.

“We are shifting our recommendations to favor companies that appear better positioned for a choppier and slower growth environment including those with more late-cycle exposure and higher contributions from recurring revenue. HON has the sector-highest exposure to Aero at 28% of revenues and visibility in its late-cycle businesses (50% of revs vs 28% sector average).”

One potential risk: Honeywell has a relatively high exposure to Europe (26% versus 19% on average), Dray notes.

Dray also upgraded Emerson Electric (EMR) to Buy.

Ultimate Market Recap: Greece, Italy, and Priceline Earnings

Monday Morning��s Top Stories

A second European Prime Minister is in the news today as unconfirmed reports have Italian (NYSE:EWI) Prime Minister?Silvio Berlusconi?possibly resigning. The Italian media is fueling the rumors and according to Giuliano Ferrara, editor of Il Foglio daily newspaper, ��That Silvio Berlusconi is about to step down is now clear to everybody. It��s a matter of hours, some say minutes.��

Berlusconi has denied the rumors while European markets responded with a bounce in the euro.

Investing Insights:?Is Europe Warming Up Gold for its Final Act?

Greece Prime Minister?George Papandreou?agreed to step down over the weekend. Today he will meet with opposition leader Antonis Samaras to discuss the next prime minister and the new Cabinet for a?transitional Greek government.

The coalition government��s top priority is to pass the European rescue plan and then oversee the country��s early 2012 elections.

U.K. cellphone retailer Carphone Warehouse PLC will sell a stake in its U.S. joint venture to partner?Best Buy Co. Inc.?(NYSE:BBY) for 838 million pounds ($1.34 billion) in cash. The company is also closing the Best Buy UK stores.?Carphone will also return 813 million GBP to its shareholders from the proceeds.

Dish Network Corp.(NASDAQ:DISH) reported its?third-quarter earnings jumped 30 percent with equipment, merchandise and rental revenues seeing double-dip increases to $362.1 million.?The company saw a $319.1 million ($0.71 cents per share) profit, up from $245 million ($0.55 cents) from the previous year.?Revenue increased 12 percent to $3.6 billion.

Analysts�� estimates were $0.73 cents per share on $3.65 billion in revenue.?The company did lose a net 111,000 subscribers in the quarter and now sits with a 13.9 million customer base as of September 30.

Super Hot Feature:?Here��s Why Groupon��s Business Model Looks Eerily Like a Po! nzi Sche me.

Commodity Futures Trading Commission Chairman Gary Gensler has removed himself from the?MF Global Holdings Ltd.?(NYSE:MF) investigation. The chairman recused himself for a potential conflict of interest due to his previous working relationship with Jon Corzine, MF��s ex-CEO, at?Goldman Sachs Group Inc.?(NYSE:GS) during the 1990s.

Monday Morning Hot Stocks

Shares of?Sysco Corp?(NYSE:SYY) are trading .65% lower early Monday morning.? Increased costs for dairy and meat narrowed margins and sales growth.? The company reported a profit of $302.7 million (51 cents per share), compared to $299 million (51 cents per share) last year.

Dish Network?(NASDAQ:DISH) is surging more than 5% after reporting a 30% rise in third quarter earnings.? The company��s former?EchoStar Corp.?(NASDAQ:SATS) unit reported a loss due to higher operating costs.? Dish has a customer base of nearly 14 million and competes with?Netflix?(NASDAQ:NFLX),?Time Warner?(NYSE:TWX), and?Apple?(NASDAQ:AAPL).

Investing Insights:?DISH Network Earnings Cheat Sheet: Profits Grow by Double Digits For Fifth Straight Quarter.

Shares of?Google?(NASDAQ:GOOG) and?Disney?(NYSE:DIS) are climbing after the two announced a plan to team up to create new family-oriented web pages on and YouTube.? The web pages are expected to be launched in 2012.

Force Protection?(NASDAQ:FRPT) is surging 30% after?General Dynamics?(NYSE:GD) agreed to acquire the company for $360 million in cash.? Force Protection shareholders will receive $5.52 per share.? The deal has already been approved by both boards and should be completed by the end of the year.

Best Buy?(NYSE:BBY) is falling nearly 2% at the open after announcing it will buy out its US mobile partner for $1.3 billion, and scra! pping pl ans for a chain of European megastores.? The electronic company continues to scale foreign expansion as it focuses on its US business.? The company competes with?Wal-Mart?(NYSE:WMT) and?Target?(NYSE:TGT).

Investing Insights:?Is Europe Warming Up Gold for its Final Act?

Market Recap

Markets closed up on Wall Street today:?Dow?+0.71%,?S&P?+0.63%,?Nasdaq?+0.34%,?Oil?+1.85%,?Gold?+2.37%.

On the commodities front,?Oil?(NYSE:USO) climbed to $96.00 a barrel. Precious metals were also up, with?Gold?(NYSE:GLD) climbed to $1,797.70 an ounce while?Silver?(NYSE:SLV) climbed 2.60% to settle at $35.31.

Hot Feature:?The Euro Mess Brings Out the Best in Gold

Today��s markets were up because:

1)?Greece.?Greek Prime Minister George Papandreou and opposition leader Antonis Samaras agreed late Sunday to create a?transitional administration?to oversee the country��s debt deal with the European Union and then hold early elections. Though the agreement will see Papandreou resign and his government overturned, it looks as if the Greece issue may finally be nearing resolution, as investors now turn their eyes toward Italy.?

2)?Italy.?With Greece now seemingly on the right track, investors are keenly watching developments in Italy, where Prime Minister Silvio Berlusconi is struggling to prove he can implement austerity measures pledged to European Union allies amid?reports that the he will likely resign?very soon. Though Berlusconi has denied such reports, he faces a vote of confidence Tuesday and many are betting he��s headed out the door as his coalition��s majority continues to deteriorate, with numerous members of his party defecting to the opposition over the last week. Italy m! ust push through 45.5 billion euros in austerity measures, approved by Berlusconi��s government in August, in order to secure European Central Bank purchases of Italian debt. Yields on Italian 10-year bonds soared above 6.65%, nearing the 7% level that drove Greece, Ireland, and Portugal to seek bailouts.

3) Banks.?Embattled investment bank Jefferies (NYSE:JEF) managed to stay in positive territory today after disclosing that it had sold a large amount of its European sovereign debt. Shares dropped roughly 18% last week on fears that it could be the next MF Global (NYSE:MF). Despite news that the financial industry lost roughly 650,000 customers and $4.5 billion in deposits to credit unions because of?Bank Transfer Day?�� a grass-roots movement that urged bank customers to close their accounts and instead deposit funds in credit unions on or before November 5 �� some of the biggest U.S. banks moved upward today, outperforming the major indices. Though Bank of America (NYSE:BAC) declined, Goldman Sachs (NYSE:GS), Morgan Stanley (NYSE:MS), JPMorgan (NYSE:JPM), and Citigroup (NYSE:C) all tacked on respectable gains.

After Hours Radar Stocks

After closing down nearly 1%, shares of? Inc?(NASDAQ:PCLN) are climbing more than 2% higher in late trading.? The company reported net income above Wall Street��s expectations for the second quarter. ?Net income for the entertainment company rose to $469.5 million ($9.43 per share), compared to $223 million ($4.41 per share) in the same quarter last year. This is a more than twofold rise from the year earlier quarter.? Shares of?Expedia Inc?(NASDAQ:EXPE) are also higher on the news, while? closed down about 1.25%.

Investing Insights:? Inc. Earnings Cheat Sheet: Profit Up.

American Express?(NYSE:AXP) is not seeing a slow down this holiday season.? The credit card company��s lates! t survey found that US shoppers expected to spend nearly $830 on gifts, compared to $710 last year.? Shares are edging .80% higher in after market activity, while?Mastercard?(NYSE:MA) and?Visa?(NYSE:V) remain flat.

Demand Media?(NYSE:DMD) came in with less losses than expected.?The company reported a loss of $4.1 million (5 cents per share) vs. a loss of $300,000 (64 cents per share) the year earlier. Revenue rose 25% to $81.5 million from the year earlier quarter. Dig Deeper:?Demand Media Inc. Earnings Cheat Sheet: Loss Narrows.

CareFusion Corp?(NYSE:CFN) is slightly lower after reporting a profit boost in earnings.? Net income for Carefusion Corporation rose to $67 million (30 cents per share), compared to $38 million (17 cents per share) in the same quarter a year earlier. This marks a rise of 76.3% from the year earlier quarter.? Competitors to watch include:?Teleflex Incorporated?(NYSE:TFX),?Cardinal Health, Inc.?(NYSE:CAH), and?Stryker Corporation?(NYSE:SYK).