Apple: Here Comes the Dividend?

Apple (AAPL) this evening announced it will host a conference call at 9 am, Eastern time, tomorrow morning to “announce the outcome of the Company�s discussions concerning its cash balance.”

Could this be the long-anticipated announcement of a dividend?

ISI Group’s Brian Marshall, who maintains a Buy rating on Apple shares and a $650 price target, this evening reiterates an expectation that Apple will declare a dividend of 2.5% yield. That would be $14.65 per share annually, based on the recent closing price, or one third of his current EPS projection for this calendar year.

Such a dividend would place Apple at the top of the pack of companies he covers in hardware, he writes, ahead of Hewlett-Packard’s (HPQ) 2% yield and Cisco Systems‘s (CSCO) 1.6%.

“We believe a dividend will drive an incremental ~$4.5bil in stock purchases (i.e., similar to adding a new top 10 holder),” writes Marshall, “from top 20 dividend mutual funds and ETFs assuming AAPL is a new 2.5% position.”

Kenneth Hackel, the president of CT Capital, this evening sent out a missive in which he opines that Apple should not dip into its nearly $100 billion in cash, equivalents and investments, and instead should resolve to pay out 75% of its free cash flow per quarter.

Spending the balance doesn’t help the stock, he writes, but promising future cash flow payouts does:

A distribution of the current balance would not be expected to aid the share price any more than it helped Microsoft-for good reason-a stock is worth the present value of prospective free cash flows. Giving shareholders 75% of future free cash flows equates to a dividend of about 5%, given estimated growth, and almost certainly propel the stock.

CT does not own Apple shares.

You can catch the webcast of the co! nference call here.

Previously:

Apple Leads Tech�s Consolidation of Cash, Says Moody�s, March 14th, 2012; Apple: $50B of Debt Might Be �Attractive Option,� Says Bernstein, March 13th, 2012.

Fin

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Is Sysco's Stock Reasonable 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 Sysco (NYSE: SYY  ) 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 (EPS) -- 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.

Sysco has a P/E ratio of 15.1 and an EV/FCF ratio of 29.8 over the trailing 12 months. If we stretch and compare current valuations to the five-year averages for earnings and free cash flow, Sysco has a P/E ratio of 15.6 and a five-year EV/FCF ratio of 25.0.

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.

Sysco has a mixed performance in hitting the ideal targets, but let's see how it compares against some competitors and industry mates.�

Company

1-Year P/E

 !

1-Year EV/FCF

5-Year P/E

5-Year EV/FCF
Sysco 15.1 29.8 15.6 25.0
Core-Mark Holding 16.9 NM 16.6 17.4
United Natural Foods 30.3 350.6 37.1 525.3
Kroger 21.9 20.5 15.5 19.2

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

Numerically, we've seen how Sysco's 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, Sysco's net income margin has ranged from 2.8% to 3.2%. In that same time frame, unlevered free cash flow margin has ranged from 1.1% to 3.7%.

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

anImage

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

Additionally, over the last five years, Sysco 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-year growth 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, Sysco has put up past EPS growth rates of 5.8%. Meanwhile, Wall Street's analysts expect future growth rates of 6.9%.

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

anImage

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:

anImage

Source: S&P Capital IQ; estimates for EPS growth.

The bottom line
The pile of numbers we've plowed through has shown us the price multiples shares of Sysco�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 15.1 P/E ratio, and we see that its EV/FCF ratios are a bit higher. This is due to its capital expenditures exceeding its depreciation costs. If this cap ex spending results in more growth, then that can be a good thing. But if not...

Sysco's been consistently profitable and has been growing moderately. It's also a member of the prestigious dividend aristocrats.

As another data point, our CAPS community rates Sysco five stars (out of five). Good stuff all around, except for the cap ex yellow flag. But all this is just a start. If you find Sysco's numbers or story compelling, don't stop. Continue your due diligence process until you're confident one way ! or the o ther. As a start, add it to My Watchlist to find all of our Foolish analysis.

I wrote about a stock that's flying under the radar in our brand new free report: "The Stocks Only the Smartest Investors Are Buying." I invite you to take a free copy to find out the name of the company I believe Warren Buffett would be interested in if he could still invest in small companies.

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Best Chinese Stocks To Hold In 2012

Encouraging data earlier this month led to a bullish beginning for the markets in September. Thus far, the S&P 500 Index is up 8.8% — propelled higher on good global economic news. At the top of the stock market news is strong data from China’s manufacturing sector.

According to two recent surveys, Chinese manufacturing activity rose in August for the first time in four months. The two surveys showed production, new orders and purchasing prices all climbed higher in the month. Given the strength in the Chinese economy, I continue to expect China stocks to outperform in the coming rally with another 25% to 40% upside by year-end.

Overall, despite the inevitable volatility in the markets along the way, the unprecedented growth drivers in China will continue directing investors to where the real opportunity resides.

Here are my top five China stocks to buy as we enter October.

Best Chinese Stocks To Hold In 2012:Feihe International Inc. (ADY)

 Feihe International, Inc. engages in the production and distribution of infant formula, milk powder and soybean, rice, and walnut products in the People?s Republic of China. It offers milk powder for infants and young children formulated for zero to six months, six months to one year, one to three years, and three to six years of age, as well as for expectant mothers, students, and for the middle-aged and elderly populations. The company also processes and distributes raw milk powder to beverage manufacturers and other wholesalers for use in their blended drink products. In addition, it offers soybean powder, an alternative to milk powder primarily for seniors; rice cereal, an alternative to milk powder principally for young children, teenagers, and seniors; walnut products, including walnut powder and walnut oil; and other products, which include cream, skim milk powder, full milk powder, butter, other related milk powder products, and water and cheese marketed primarily for children. Further, the company processes and distributes semi-finished rice cereal to wholesalers and retailers. As of August 9, 2011, it had approximately 200 company-owned milk collection stations; 7 production facilities with an aggregate milk powder production capacity of approximately 1,950 tons per day; and a distribution network that reaches approximately 80,000 retail outlets. The company was formerly known as American Dairy, Inc. and changed its name to Feihe International, Inc. in October 2010. Feihe International, Inc. is based in Beijing, the People?s Republic of China.

Best Chinese Stocks To Hold In 2012:China Unicom (Hong Kong) Ltd (CHU)

 China Unicom (Hong Kong) Limited, an investment holding company, engages in the provision of GSM and WCDMA cellular, and related telecommunications services in the People's Republic of China.. The company offers cellular and fixed-line voice and related value-added services, broadband and other Internet-related services, information communications technology services, business and data communications services, and domestic and international long distance and related services. Its 3G services include mobile Internet, mobile music, mobile TV, video handsets, mobile newspapers, and 3G data cards. As of December 31, 2010, the company served approximately 153.366 million GSM subscribers, 47.224 million fixed-line broadband subscribers, and 96.635 million local access subscribers in 31 provinces, municipalities, and autonomous regions in Mainland China. It also offers its services in the United States, Japan, and the United Kingdom. China Unicom (Hong Kong) Limited was founded in 2000. The company is based in Central, Hong Kong, and is considered a Red Chip company due to its listing on the Hong Kong Stock Exchange. China Unicom (Hong Kong) Limited is a subsidiary of China United Network Communications Group Company Limited.

Best Chinese Stocks To Hold In 2012:China Automotive Systems Inc. (CAAS)

 China Automotive Systems, Inc., through its interests in Sino-foreign joint ventures, engages in the manufacture and sale of power steering systems and other component parts for the automotive industry in the People?s Republic of China. It offers a range of steering system parts for passenger automobiles and commercial vehicles. The company provides 4 separate series, 307 models of power steering, including rack and pinion power steering, integral power steering, electronic power steering and manual steering, steering columns, steering oil pumps, and steering hoses. China Automotive Systems, Inc. was founded in 2003 and is headquartered in Jing Zhou City, the People?s Republic of China.

Best Chinese Stocks To Hold In 2012:Spreadtrum Communications Inc. (SPRD)

 Spreadtrum Communications, Inc., through its subsidiaries, operates as a fabless semiconductor company that designs, develops, and markets baseband processor and RF transceiver solutions for wireless communications and mobile television markets. It offers a portfolio of integrated baseband processor solutions that support a range of wireless communications standards, including global system for mobile communication (GSM), general packet radio service (GPRS), enhanced data rates for GSM evolution (EDGE), time division synchronous code division multiple access (TD-SCDMA), and high speed packet access (HSPA), as well as offer an array of multimedia capabilities, such as MP3 digital audio playback, touch screen, JAVA acceleration, digital camera support, motion JPEG, MPEG4, AVS and H.264 digital video playback, and 64-channel polyphonic ringtone playback. The company also provides single-chip CMOS multi-mode RF transceivers that perform across various standards covering GSM/GPRS, EDGE, wideband code division multiple access, TD-SCDMA, and high speed uplink/downlink packet access. In addition, it designs, develops, and markets a CMMB-based channel demodulator and audio/video decoder processor solution for the mobile television market. The company sells its products directly, as well as through distributors to brand manufacturers, independent design houses, and original design manufacturers primarily in China, Hong Kong, and Macau. Spreadtrum Communications, Inc. was founded in 2001 and is headquartered in Shanghai, the People?s Republic of China.

Best Chinese Stocks To Hold In 2012:China Telecom Corp Ltd (CHA)

 China Telecom Corporation Limited, together with its subsidiaries, provides wireline and mobile telecommunications services in the People's Republic of China. The company?s services include wireline voice, mobile voice, Internet, managed data and leased line, value-added services, integrated information application services, and other related services, as well as prepaid calling cards. Its wireline voice services include local wireline services, domestic long distance wireline services, and international long distance wireline services. The company's mobile voice services comprise local calls, domestic long distance calls, international long distance calls, intra-provincial roaming, inter-provincial roaming, and international roaming. Its Internet access services consist of wireline Internet access services, including dial-up and broadband services, and wireless Internet access services. The company's integrated information application services include Best Tone services, which provide customers with phone number storage, enquiry, and call transfer services; and information technology-based integrated solutions, such as system integration, outsourcing, special advisory, information application, knowledge services, and software development. Its managed data and leased line services consist of services relating to optic fiber and circuits, such as optic fiber and circuit leasing, virtual private network, and bandwidth leasing. The company also offers other services, such as sales, rental, repairs, and maintenance of equipment; and provides consulting services, and e-commerce and booking services, as well as in the sale of telecommunications terminals. It serves government, enterprise, and residential customers. The company was founded in 2002 and is based in Beijing, the People's Republic of China. China Telecom Corporation Limited is a subsidiary of China Telecommunications Corporation.

Best Chinese Stocks To Hold In 2012:Changyou.com Limited (CYOU)

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

Best Chinese Stocks To Hold In 2012:Huaneng Power Intl (HNP)

 Huaneng Power International Inc., an independent power producer, engages in the generation and sale of electric power to the regional or provincial grid companies in the People's Republic of China. It involves in the investment, construction, operation, and management of power plants in China and Singapore. As of March 31, 2011, the company had controlling generating capacity of 54,402 megawatts, and a total generating capacity of 50,935 megawatts on an equity basis. Huaneng Power International Inc. was founded in 1994 and is headquartered in Beijing, the People?s Republic of China.
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4-Star Stocks Poised to Pop: Berkshire Hathaway

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, insurance and holding company giant Berkshire Hathaway (NYSE: BRK-A  ) has earned a respected four-star ranking.

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

Berkshire facts

Headquarters (founded) Omaha, Neb. (1889)
Market Cap $196.9 billion
Industry Conglomerates
Trailing-12-Month Revenue $143.7 billion
Management Chairman/CEO Warren Buffett (since 1970)
Vice Chairman Charles Munger (since 1978)
Return on Equity (average, past 3 years) 7.4%
Cash/Debt $37.3 billion / $60.4 billion
Competitors Blackstone Group
HM Capital Partners LLC
KKR

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

On CAPS, 97% of the 3,335 members who have rated Berkshire believe the stock will outperform the S&P 500 going forward. �

Earlier this week, one of those Fools, All-Star TMFDeej, tapped the stock as a particularly timely bargain opportunity: "Even with the new uncertainty about Buffett's health, [Berkshire] is just too cheap to ignore at this level. Barring an economic implosion, its earnings should continue to improve and the new buy-back policy seems to have put a nice floor under the stock."

If you want to retire rich, you need t! o put to gether the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future. Of course, despite a strong four-star rating, Berkshire may not be your top choice.

We've found another stock we are incredibly excited about -- excited enough to dub it "The Motley Fool's Top Stock for 2012." We have compiled a special free report for investors to uncover this stock today. The report is 100% free, but it won't be here forever, so click here to access it now.

Want to see how well (or not so well) the stocks in this series are performing? Follow the new TrackPoisedTo CAPS account.

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Weekly Top Insider Sells: INTU, GOOG, SPG, AMP, and NTAP

According to GuruFocus Insider Data, these are the largest insider sells during the past week.

Intuit Inc. (INTU): Director David H Batchelder sold 1,620,667 Shares

Director of Intuit Inc. (INTU) David H Batchelder sold 1,620,667 shares during the past week at an average price of $52.59.

Intuit's mission is to revolutionize how people manage their financialactivities. Intuit Inc. has a market cap of $15.82 billion; its shares were traded at around $52.59 with a P/E ratio of 24 and P/S ratio of 4.1. The dividend yield of Intuit Inc. stocks is 1.1%. Intuit Inc. had an annual average earnings growth of 15.6% over the past 10 years. GuruFocus rated Intuit Inc. the business predictability rank of 4-star.

On November 17, 2011 Intuit Inc announced financial results for its first fiscal quarter, which ended Oct. 31, and reiterated guidance for the full fiscal year 2012. Intuit paid its first quarterly cash dividend of $0.15 per share, or $45 million, in the first quarter. In November the company's board of directors approved a quarterly cash dividend of $0.15 per share to be paid on Jan. 18, 2012 to shareholders of record as of the close of business on Jan. 10.

Director Dennis D Powell sold 72,500 shares of INTU stock on 12/09/2011 at the average price of 53.16. Dennis D Powell owns at least 10,170 shares after this. The price of the stock has decreased by 1.07% since.

Google Inc. (GOOG): Executive Chairman of Board Eric E Schmidt sold 44,554 Shares

Executive Chairman of Board of Google Inc. (GOOG) Eric E Schmidt sold 44,554 shares on 12/23/2011 at an average price of $645.9.

Google is a public and profitable company focused on search services. Google Inc. has a market cap of $209.2 billion; its shares were traded at around $645.9 with a P/E ratio of 21 and P/S ratio of 7.1. Google Inc. had an annual average earnings growth of 58.4% over the past 10 years.

On October 13, 2011, Go! ogle Inc . announced financial results for the quarter ended September 30, 2011. Google reported revenues of $9.72 billion for the quarter ended September 30, 2011, an increase of 33% compared to the third quarter of 2010. Google reports its revenues, consistent with GAAP, on a gross basis without deducting traffic acquisition costs (TAC). In the third quarter of 2011, TAC totaled $2.21 billion, or 24% of advertising revenues.

Executive Chairman of Board Eric E Schmidt sold 44,554 shares of GOOG stock on 10/28/2011 at the average price of 600.5. Eric E Schmidt owns at least 46,983 shares after this. The price of the stock has increased by 7.56% since.

Simon Property Group Inc. (SPG): Chairman Emeritus of the Board Herbert Simon sold 153,827 Shares

Chairman Emeritus of the Board of Simon Property Group Inc. (SPG) Herbert Simon sold 153,827 shares on 12/22/2011 at an average price of $128.94.

Simon Property Group, Inc. is a self-administered and self-managed real estate investment trust which, through its subsidiary partnerships, is engaged in the ownership, development, management, leasing, acquisition and expansion of income-producing properties, primarily regional malls and community shopping centers. Simon Property Group Inc. has a market cap of $37.88 billion; its shares were traded at around $128.94 with a P/E ratio of 19 and P/S ratio of 9.6. The dividend yield of Simon Property Group Inc. stocks is 2.7%. Simon Property Group Inc. had an annual average earnings growth of 3.2% over the past 10 years.

On Oct. 25, 2011 Simon Property Group, Inc.reported results for the quarter ended September 30, 2011. Net income attributable to common stockholders was $274.0 million, or $0.93 per diluted share, as compared to $230.6 million, or $0.79 per diluted share, in the prior year period. The increase on a per share basis was 17.7%.

Funds from Operations ("FFO") was $606.2 million, or $1.71 per diluted share, as compared to $318.5 million! , or $0. 90 per diluted share, in the prior year period. Third quarter 2010 FFO as adjusted for a debt extinguishment charge was $503.6 million or $1.43 per diluted share. The increase on an as adjusted per share basis was 19.6%.

Chairman Emeritus of the Board Herbert Simon sold 121,824 shares of SPG stock on 11/11/2011 at the average price of 128.09. Herbert Simon owns at least 1,436,167 shares after this. The price of the stock has increased by 0.66% since.

Ameriprise Financial (AMP): Exec VP of Serv Del & Tech Glen Salow sold 363,700 Shares

Exec VP of Serv Del & Tech of Ameriprise Financial (AMP) Glen Salow sold 363,700 shares on 12/22/2011 at an average price of $49.64.

AMERIPRISE FINANCIAL, INC. is a financial planning and services company with financial advisors and registered representatives that provides solutions for clients' asset accumulation, income management and insurance protection needs. Ameriprise Financial has a market cap of $11.23 billion; its shares were traded at around $49.64 with a P/E ratio of 10.1 and P/S ratio of 1.1. The dividend yield of Ameriprise Financial stocks is 1.8%.

On October 26, 2011 Ameriprise Financial, Inc. reported third quarter 2011 net income from continuing operations attributable to Ameriprise Financial of $271 million, or $1.12 per diluted share, compared to $346 million, or $1.33 per diluted share, a year ago. Operating earnings were $251 million, or $1.04 per diluted share, compared to $352 million, or $1.35 per diluted share, a year ago.

Exec VP of Serv Del & Tech Glen Salow sold 363,700 shares of AMP stock on 12/22/2011 at the average price of 50. Glen Salow owns at least 127,819 shares after this. The price of the stock has decreased by 0.72% since.

NetApp Inc. (NTAP): Director Daniel J Warmenhoven sold 217,593 Shares

Director of NetApp Inc. (NTAP) Daniel J Warmenhoven sold 217,593 shares during the past week at an average price of $36.27. !
NetApp Inc., formerly Network Appliance, Inc., is a provider of innovative data management solutions that simplify the complexity of storing, managing, protecting, and retaining enterprise data. Netapp Inc. has a market cap of $13.36 billion; its shares were traded at around $36.27 with a P/E ratio of 19.9 and P/S ratio of 2.6. Netapp Inc. had an annual average earnings growth of 22.8% over the past 10 years. GuruFocus rated Netapp Inc. the business predictability rank of 3-star.

On November 16, 2011 NetApp reported results for the second quarter of fiscal year 2012, which ended October 28, 2011. Revenues for the second quarter of fiscal year 2012 totaled $1.507 billion compared to revenues of $1.251 billion for the same period one year ago. For the second quarter of fiscal year 2012, GAAP net income was $165.6 million, or $0.44 per share, compared to GAAP net income of $175.4 million, or $0.45 per share, for the same period a year ago.

Matthew K Fawcett owns at least 214 shares after this. The price of the stock has increased by 4.68% since.

For the complete list of stocks that bought/sold by their company executives, go to: Insider Buys.


Tickers in the article:

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Hedge Funds – Definition, Strategies, What They Do

What is a hedge fund?

A hedge fund is an aggressively managed portfolio of securities set up for investors who have a net worth of over one million dollars. Investors who participate in a hedge fund must sign a letter of agreement specifying that they are knowledgeable investors and that they are aware of the risks.

The hedge fund managers use advanced strategies to maximize the return on investment to the fund. The strategies employ highly leveraged positions in long and short derivative positions in both domestic and international markets. Derivatives include options (puts and calls), futures (contracts), and swaps, which they combine to protect the bulk of the portfolio. Most hedge funds (but not all) use sophisticated mathematical models to design protective “collars.”

A normal requirement for hedge funds is that the investor must leave their investments in the fund for at least one year. To withdraw funds investors must notify the hedge fund manager within a narrow window (one or two months) and at no other time.

Regulation

Since hedge funds don’t deal with the regular public but with sophisticated “accredited” investors, they aren’t regulated. Therefore, managers have great flexibility in their choice of instrument. Although hedge funds resemble mutual funds, they aren’t considered mutual funds (which are regulated and banned from using derivatives).
Yet, since hedge funds participate in organized and regulated markets they become subject to US law, and they may be scrutinized by the SEC and the Fed. In this respect, despite the fact that hedge funds aren’t regulated, “insider trader” laws and other laws also apply to them.

Return on investment

Because sophisticated investors demand higher returns for their investments, hedge funds are created to fill that need. Once a hedge fund can show a steady track ! record o f high performance (much higher than the regular markets), money begins to flow in. The more explosive the return on investment the greater the allure of the hedge fund.

Cash Flow as a measure of liquidity, profitability, and future returns

No two hedge funds are alike; they all function independently and in general they become a reflection of the personality of their managers, but in particular of the personality of the general partner.

Some general partners with cowboy personalities will ride over all open fields: buyouts, IPOs, stock splits, arbitrage, and foreign currencies.

For many stock investors, the index “earnings per share” (EPS) is the absolute measure of profitability and an indicator of future corporate performance. For the hedge manager, however, a much better crystal ball is the corporation’s statement of cash flows.

Why is the statement of cash flows preferred by the hedge fund managers over the EPS? Hedge fund managers know that EPS can be ‘doctored up,’ manipulated, disguised, and shaped to look good, when the underlying reality may be different-even grim. Cash flows on the other hand can be double checked with the banks that hold the cash accounts. The pieces that go into the preparation of the cash flows statement must fit perfectly and harmonize with the balance sheet and the income statement.

From the top section of the statement we read the inflows and outflows from the main line of business-operations. From the middle section we read the investing activities: what cash was generated and used by non-current assets and non-current liabilities. From the third section we can see the inflows and outflows due to dividends, and bond and stock issues. The Statement of cash flows paints a detailed panorama of all the significant activities that management engaged in during the year. Of most importance are the clues that the figures give to hedge funds managers as to the direction of the company: what plant expansions are ta! king pla ce, what restrictions are being placed on retained earnings, and so forth.

And if the company is having difficulties with liquidity, this can be gleaned, too.

Hedge fund managers value fresh, current, timely, and accurate information. Not only do they value information, but they also cultivate good sources of information and connections. In this respect, hedge fund managers must tread lightly so as not to become prey to “insider trading.”

Multiple Brokers and Arbitrage

To squeeze the maximum return on investment, hedge fund managers employ several brokers, always seeking to make economies on broker fees and commissions. Given the volume and large amounts of money their savings can be significant, which in the end will add to the fund’s bottom line.

Again, given the large investments hedge funds can dump on brokers, they aren’t too proud to engage in arbitrage. If they see that there’s a price disparity between exchanges, they will capitalize on it by crossing markets. Of course, most of these mispricing can be detected by computer programs that crawl the internet, pouncing on every opportunity and thus eke out gains with no labor investment.

Conclusion

Investors with cold blood in their veins, strong hearts, and strong stomachs will entrust -risk, may be a better word- their money to hedge funds. Is there any protection? None. They go into the funds with open eyes, trusting only the personality of the general partner.

May universities, hospitals, museums, art organizations, and other non-for profit organizations invest in hedge funds? Yes, they may. The overseers, trustees, directors, and in particular those in finance and investment committees will be considered ‘accredited’ investors. And in keeping with their fiduciary responsibility they will follow the “prudent man” philosophy of diversification, investing only a fraction of their endowments.

M. Guerrero
Retired Investment Banker, C! orporate Controller, graduate of Columbia University, and Vietnam Vet (1967-1968).

Mary Duffy’s e-book “Sentence Openers” contains all the writing techniques I use in my fiction and articles: http://sentenceopeners.com

Visit Mary’s site and see what her book is about. To read book reviews of the Classics visit: http://writingtolive.com

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DrStockPick.com Stock Report! 11/17/09, ZENG, HZHI, RHT, MDAS, CIEN, COP

Dr Stock Pick HOT News & Alerts!

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FREE Daily Stock Alerts From DrStockPick.com

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Tuesday November 17, 2009

DrStockPick.com Stock Report!

Horizon Health International Corp. (Pink Sheets:HZHI) launched a product awareness campaign. The company will be show-casing products through existing e-commerce sites to stimulate sales through online transactions. Through Its US Subsidiary SunCity Ventures, Horizon Health International has registered with eBay US as a Vendor-Company under the name �Horizon Health�, and will post and sell its products on eBay through their online shopping network.

Zenergy International, Inc. (PINKSHEETS: ZENG) is pleased to announce that the Company has secured feedstock from two different suppliers to continue operations and facilitate extensive production in Littlefield, Texas.

The Fedora Project, a Red Hat, Inc. (NYSE: RHT) sponsored and community-supported open source collaboration, today announced the availability of Fedora 12, the latest version of its free open source operating system distribution. Fedora 12 includes a robust feature set for desktop users, administrators, developers and open source enthusiasts alike. New enhancements available in Fedora 12 include next-generation Ogg Theora video, virtualization improvements and advancements to NetworkManager, among numerous others.

MedAssets, Inc. (NASDAQ: MDAS) is pleased to announce that Samuel K. Skinner has joined the Company’s Board of Directors, effective immediately. Mr. Skinner has had a distinguished career in both the government and private sectors. He is the retired Chairman, President and Chief Executive Officer of USF Corporation, a leading transportation and logistics company recognized by Fortune magazine as one of America’s most admired companies during his tenure as CEO.

Ciena Corporation (NASDAQ: CIEN) expects to announce unaudited results for its fiscal fourth quarter and fiscal year ended October 31, 2009 on Thursday, December 10, 2009, via Business Wire before the open of the financial markets. The press release also will be available on Ciena’s website at www.ciena.com.

ConocoPhillips (NYSE:COP) announced today a delay in the planned upgrade of its 260,000 barrel-per-day Wilhelmshaven refinery in Germany. This action is consistent with the recent announcement that the company’s capital budget for 2010 will be reduced from current levels to improve financial flexibility and better balance expenditures and resources.

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American Airlines loses another $1.7 billion

NEW YORK (CNNMoney) -- The parent of American Airlines, which went into bankruptcy last year, announced a quarterly net loss of $1.7 billion on Thursday, slammed by reorganization costs and rising fuel prices.

The loss was more than quadruple the carrier's loss from a year earlier, when AMR Corp. reported a net loss of $405 million in the first quarter of 2011.

AMR said the part of the loss stemmed from $1.4 billion in reorganization costs in the latest quarter. The company said the costs were related to its bankruptcy filing from last Nov. 29.

The largest chunk of those costs -- some $1 billion - is related to the rejection of eight aircraft leases and eight aircraft engine leases, and the modification of 158 aircraft leases, the airline said.

Merger hangover continues to pain United

American was also hit by rising fuel prices. The company said that it paid $3.24 per gallon of jet fuel in the first quarter of 2012, a 17% increase from $2.76 in the year-earlier quarter. The airline said this equated to an increase in costs of $325 million.

While American Airlines didn't specifically mention job cuts in its quarterly report, the carrier said in February that it was cutting 13,000 positions from its overall staff of 88,000. Layoffs, especially when they happen en masse, typically cost a lot of money for the company that's handing out the severance packages.

American is one of the largest U.S. carriers, competing with Delta Air Lines (DAL, Fortune 500) and United Continental Holdings (UAL, Fortune 500). 

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Abu Dhabi’s ATIC Has No Plans To Make A Bid For Taiwan’s UMC

Advanced Technology Investment Co., the investment arm of the Abu Dhabi government – and the controlling investor in former Advanced Micro Devices (AMD) unit Globalfoundries – says that contrary to recent speculation, it has no plans to make a bid to acquire the Taiwan-based contract chip manufacturer United Microelectronics (UMC), Bloomberg reports.

ATIC chief executive Ibrahim Ajami told the news service in an interview that the firm “is not in a position to do this in this stage of our capital deployment…there are a lot of risks we would have to consider and a lot of implications of an acquisition of that nature.�

The story notes that UMC has rallied 7.9% in Taiwan over the last 10 days on reports that Globalfoundries might take a stake in the company.

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The morning lowdown 4-19-12

(gigaom.com) -- Some of the stories people are talking about this morning…

  • Digital ecosystems: An in-depth comparison (The Verge)

  • How Tumblr plans to attract brands and their money (GigaOM)

  • All 50 states may join e-book refund settlement (paidContent)

  • What’s next for LivingSocial (Fortune)

  • Did Sina just introduce — and then kill — an anonymous news-reporting platform? (paidContent)

  • The Guardian crowdsources its investigation into online tracking (Nieman Journalism Lab)

  • Why Facebook social reading apps don’t work (ReadWriteWeb)

  • Fear and loathing at NAB 2012 (GigaOM)

More from gigaom.com
  • A database to help the military share its airwaves
  • 955 Dreams tackles music discovery with Band of the Day
  • 10 ways to deal with cybersecurity in a smart grid world
  • Subscribe to gigaom.com

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  • Controversy, courtrooms and the cloud in Q1
  • Startup growth and the new recruiting ecosystem
  • Flash analysis: future opportunities for Pinterest
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A Huge Global Opportunity

This seems like an opportunity served up on a platter.

India has opened up its stock markets to individual foreign investors. And this is over and above foreign institutional investors (FIIs), which already have access to the world's second-fastest developing economy. In hindsight, the move doesn't really come as a major surprise. But will this be beneficial to individual foreign investors at large? I believe so.

Details, details
The Reserve Bank of India has thrown open the gates to individual Qualified Foreign Investors (QFIs) who can now invest up to 5% of an Indian company's paid up capital with the aggregate QFI limit capped at 10%. Earlier, retail investors could only access the markets by indirect means such as mutual funds.

Is the news worth the hype?

A historical perspective
To put things in perspective, let's take a look at how FIIs were viewing India in the past decade. From 2000 to 2011, net average FII inflow stood at $7.6 billion per year. This is despite the fact that there was a net outflow of nearly $12 billion in 2008, followed by another $357 million in 2011.

anImage

However, the flow once again reversed in January with net FII inflows a little over $2 billion. Which brings us to the question: Is this the right time to enter the Indian market? Well, that depends on the perspective.

Numbers don't lie
The Indian economy grew at a robust 8.5% for the fiscal year ended March 2011. A Goldman Sachs report, published in 2003, suggests that the Indian economy could leapfrog from its current 10th position to become the third-largest, after the U.S. and China, in 30 years. That's the kind of long-term potential we're looking at.

On the flip side, other analysts think this isn't really the best time to enter the Indian market. The National Stock Exchange 50-stock index, popularly known as the! Nifty, which tracks 50 stocks across diverse sectors, lost 22% in 2011. More bad news is expected this year. The World Bank forecasts a bleak 2012 for developing countries due to the European debt crisis and expects India's growth to slow down to 7% to 8% in the next couple of years. Also, the Indian government is struggling to tackle high inflation and a depreciating currency.

But that's where I see opportunity.

Perfect break
A cheap market trading at a price-to-earnings ratio of 18, coupled with the depreciating rupee, offers a rare bonus. The rupee fell to a 10-year low in December and the recovery has been painfully slow thus far. This is where investors should smell blood and go in for the kill. There couldn't be a better time to enter the markets.

After all, the long-term view is a different ballgame altogether. The young population and growing consumerism are going to ensure rapid growth for the next three decades, at least. The potential is huge. Period. Driven by spending, sectors such as infrastructure, power, and communications -- the very framework on which a developing economy rests -- should see significant growth.

For starters, the blue-chip stocks look like a good place to put your money. In infrastructure, cement majors Ambuja Cements and UltraTech Cements look solid. In telecommunications, Bharti Airtel is a runaway winner with Tata Communications (NYSE: TCL  ) and Vodafone giving stiff competition. In the power sector, Coal India and National Thermal Power Corp. lead the way. Incidentally, Coal India is among the top five Indian companies by market cap. In the auto sector, Tata Motors (NYSE: TTM  ) and Hero MotoCorp are leaders in the four-wheeler and two-wheeler categories, respectively.

Let's not! forget the banking sector, the essential backbone of a developing economy. And that's where ICICI Bank (NYSE: IBN  ) and HDFC Bank (NYSE: HDB  ) will stand to gain.

Foolish bottom line
The opportunity presented to long-term Foolish investors looks massive. Of course, due diligence on each of the companies mentioned above is required.

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Upward Moving Stocks at NYSE - SWFT, SFI, LCC, BXS

Swift Transportation Company (NYSE:SWFT) opened at $14.53 and with a gain of 5.02% closed at $15.05. Company’s fifty days average price is $13.60 whereas it has a market capitalization $2.01 billion.

The total of 1.56 million shares was transacted over last trading day.

iStar Financial Inc. (NYSE:SFI) opened at $10.01 and with a gain of 5.00% closed at $10.29. Company’s fifty days average price is $8.33 whereas it has a market capitalization $949.96 million.

The total of 6.32 million shares was transacted over last trading day.

US Airways Group, Inc. (NYSE:LCC) opened at $8.39 and with a gain of 4.89% closed at $8.36. Company’s fifty days average price is $10.04 whereas it has a market capitalization $1.35 billion.

The total of 10.08 million shares was transacted over last trading day.

BancorpSouth, Inc. (NYSE:BXS) opened at $15.40 and with a gain of 4.79% closed at $15.97. Company’s fifty days average price is $15.67 whereas it has a market capitalization $1.33 billion.

The total of 1.23 million shares was transacted over last trading day.

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Choose The Best Bad Credit Home Equity Plan

The main benefit that a person can hope to derive from obtaining home equity credit is that they can make use of their home equity and not need to worry about paying closing rates. Making use of bad credit home equity is advantageous for you as you can use the money to improve your credit score though what is even more important is that when securing bad credit home equity you need to be especially very careful that you deal only with a reputable lender who is sure to be the one to offer you best rates and fees.

You really want to make sure that you are aware of even the smallest details before going through with something like this, so that you know you are going to be making the wisest decision and that you are not going to be costing yourself one of your most precious and valuable assets, your home.It pays to understand the effects these fees have on you and so before signing on the dotted line you need to be sure that you do, for example, ask for removal of early payment fees, especially when you are sure that you can pay off the entire borrowed amount before its due date.

So if you have gone through with a home equity conversion program and with this home equity conversion program you have figured that you are going to be okay and that it will be worth it for you to go through with this loan, then now it is really just a matter of you finding a lender. So, the more you compare one lender against the other the brighter are your chances that you can deal with a lender that offers you the best terms, conditions and rates.

You do also have to realize that typically with a mortgage loan, the first few years that you spend paying your mortgage are really only paying off the interest portion and so in order to have a substantial amount of home equity you would need to have been paying your mortgage for at least four years or more. It is also easy to visit a lender’s website and get a quote and this is certainly an option that is worth trying out.

You are able to get so that! you can get more educated on them and find the one that is going to be right for you in this situation, this is the only way to go about it.For example, you need to know who benefits more from home equity and who benefits more from line of credit and the same is the case with interest rates (which one suits you better) and which type provides best repayment options for your particular needs.

For more information on real estate management and pool fence, you can turn to the author.

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Strategist: Stock Market Should Double Again - SmartMoney.com

U.S. stock prices have doubled from their financial-crisis lows of just over three years ago, judging by the S&P 500 index. That has investors wondering if the market has rallied too far, too fast.

Quite the opposite, argues Stuart Freeman, chief equity strategist with Wells Fargo Advisors, in a recent research report. History suggests stocks could more than double again in a decade, he says.

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Mr. Freeman focuses his analysis on what happened to the S&P 500 after past bull markets -- like the current one -- turned three years old. Since 1973, there have been five examples. The average 10-year return for them (following year three) was 147%. The lowest 10-year return was 57% and the highest was 194%.

There's a sixth bull market that started in January 2003. Returns since its third birthday, reached in January 2006, have obviously not been strong, interrupted as they were by a market crash. The S&P 500 is up 12% so far -- but the 10-year period won't be up until 2016. The bull market that turned three years old in May 1973 hit a similar slow patch but ended with a return of 57% over the 10 years ended May 1983.

Returns for the current bull market over the next 10 years should prove favorable, writes Mr. Freeman, because investors are "very cautious" toward stocks, which has resulted in low prices relative to earnings.

Of course, past performance, as the mutual fund industry is required to remind investors, is no guarantee of future results. Two factors could make the next 10 years dissimilar to periods ! used in the study.

The first is that U.S. stocks were much more generous to investors than usual during the 25 years through 1999. The S&P 500 returned 17.4% a year, compounded. Those returns may be partly owed to the rise of index mutual funds and workplace retirement plans, which pushed stock ownership higher, particularly among baby boomers. They began retiring last year, so their appetite for shares might taper off a bit.

The second factor is inflation, which raged during the late 1970s and early 1980s, pushing stock prices higher in nominal terms. It contributed more than five percentage points a year to returns over 25 years through 1999 -- and gave a big boost to the two top-performing past bull markets of the aforementioned five. Over the past year, the inflation rate was 2.9%.

Investors are thus right to use caution. But Mr. Freeman's point is worth remembering: Three year-old bulls can have plenty of charge left.

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Best India Stocks To Hold In 2012

US debt crisis, European PIGS and inflation in emerging economies are creating fears among investors about Bear Market. Business & Economy and India Today published coverstories on slowdown in Indian economy. Some analysts are treating US Q2 GDP numbers as warning signals for upcoming recession. High inflation-interest rates, crisis in Government, rising costs and economic slowdown forced analysts to reduce earnings estimates of Indian companies. Bear market safe heaven- gold – already crossed 23,500 levels. Gold gave good returns to investors in 2012 Bear market also. It may give good returns in 2012 Bear market (if occurs) also.

During 2012 crisis, India reported 6.8% GDP growth. Now, analysts are expecting 7-7.5% GDP growth rate in 2012-13. But, RBI and Government are still talking about 8% GDP growth. 1 year back, Stock Market analysts talked about 18-20% earnings growth for 2012-13. Now, they are talking about 10-15% earnings growth.

We don’t know whether Bear Market occurs or not but global and domestic economies are facing problems due to dififerent reasons. It may be right time to know about best performing Indian stocks in 2012 bear market. They may not perform well once again but there may be some stocks which perform well in bear markets due to their business models, support from Mutual funds and their conservative nature.

Best India Stocks To Hold In 2012:Infosys Technologies Limited (INFY)

 Infosys Ltd. provides information technology (IT) and consulting services worldwide. It offers IT services, such as application, architecture, independent validation and testing, information management, infrastructure, packaged application, SOA, systems integration, and knowledge services; product engineering services, manufacturing process and plant solutions, and product lifecycle management services; and consulting services in the areas of information and technology strategies, product innovation, next generation commerce, process excellence, and learning and complex change. The company also provides business process outsourcing solutions in the areas of business platforms, customer service outsourcing, finance and accounting, human resources outsourcing, legal services, sales and fulfillment, and sourcing and procurement outsourcing. In addition, it offers collaborative analytics solutions; digital consumer platform; Finacle universal banking solution; iProwe, a Web accessibility assessment product; mConnect, a real-time enterprise middleware; and research and analytical support services. Further, the company offers unified communications and collaboration solution that streamlines business processes between employees, customers, and suppliers; iTransform that helps healthcare organizations accelerate transition to new platforms; and supply chain visibility and collaboration product suite. It serves aerospace and defense, airlines, automotive, banking, capital markets, communication services, consumer packaged goods, manufacturing, education, energy, healthcare, high technology, hospitality and leisure, insurance, life sciences, logistics and distribution, publishing, resources, utilities, and retail industries. Infosys Ltd. has a strategic partnership with Alstom SA. The company was formerly known as Infosys Technologies Limited and changed its name to Infosys Ltd. on June 16, 2011. Infosys Ltd. was founded in 1981 and is headquartered in Bengaluru, India.

Advisors' Opinion:

    By Admin At 2011-10-21

    Infosys Technologies Ltd. (NASDAQ: INFY) started in 1981 by seven individuals with a paltry investment of USD 250 are today a global leader of IT and consulting with revenues of over US$ 4.8 billion (Financial year end 2010). Infosys has an enviable international presence with over 50 offices and development centers in India, China, Australia, the Czech Republic, Poland, the UK, Canada and Japan.

    Infosys and its subsidiaries have 113,796 employees as on March 31, 2010. Infosys takes pride in building strategic long-term client relationships. Over 97% of our revenues come from existing customers. Forbes magazine has named Infosys in its list of Global High Performers. For investors wanting their money to grow without compromising on safety factors, Infosys is the company to park their funds.

Best India Stocks To Hold In 2012:Western Asset Intermediate Muni Fund Inc (SBI)

 Western Asset Intermediate Muni Fund Inc. is a closed ended fixed income mutual fund launched and managed by Legg Mason Partners Fund Advisor, LLC. The fund is co-managed by Western Asset Management Company. It invests in the fixed income markets of the United States. The fund invests in securities that provide income exempt from federal income tax. It invests primarily in investment grade municipal securities. The fund employs intensive proprietary research to create its portfolio. It benchmarks the performance of its portfolio against the Barclays Capital 1-15 Year Municipal Bond Index. The fund was formerly known as Intermediate Muni Fund Inc. Western Asset Intermediate Muni Fund Inc. was formed on December 19, 1991 and is domiciled in the United States.

Advisors' Opinion:

  • By Kennedy At 2011-10-21

    Measured by any yardstick - be it revenues, profits, assets, market capitalization - SBI is the largest bank in India. With more than 16,000 branches, SBI also accounts for the largest bank branch network in entire India. The range of services offered by SBI include Mobile Banking, Internet Banking, Demat Services, ATM Services, Corporate Banking, Credit Cards, Merchant Banking, Agricultural Banking, Online Services and lot more.

    With an asset base of $260 billion and $195 billion in deposits,SBI has a market share of about 20% in deposits and advances among Indian commercial banks and SBI also accounts for almost one-fifth of the nation's loans. When millions of Indians have trusted SBI for all their financial dealings, will not the individual investor’s money be safe with them?

Best India Stocks To Hold In 2012:Rediff.com India Limited (REDF)

 Rediff.com India Limited provides online Internet based services in India and to the global Indian community. The company's Websites consist of channels relevant to Indian interests, such as cricket, astrology, matchmaker, and movies; content on various matters, which include news and finance; search facilities; and a range of community features consisting of e-mail, chat, messenger, photo/video sharing capabilities, e-commerce, blogs, broadband wireless content, and mobile value-added services to mobile phone subscribers in India, as well as online advertising and online shopping services. It also publishes two weekly newspapers, ?India Abroad? and ?India in New York? for the Indian-American community based in the United States and Canada. The company?s target client base for advertising and sponsorships include global companies doing business in India, domestic corporations, and small and medium enterprises. As of March 31, 2010, it had 89.5 million online registered users. The company was formerly known as Rediff Communication Private Limited and changed its name to Rediff.com India Limited in February 2000. Rediff.com India Limited was founded in 1996 and is headquartered in Mumbai, India.

Best India Stocks To Hold In 2012: (BAJAJ-AUT.NS)

 Bajaj Auto Limited manufactures and sells scooters, motorcycles, and three wheeler vehicles and spare parts in India and internationally. It sells its two wheeler products under Avenger, Pulsar, Discover, Platina, and Ninja brands. The company also provides three wheeler commercial vehicles, such as goods and passenger carriers. It sells its products and services through a network of two-wheeler and three-wheeler dealers. The company was founded in 1945 and is headquartered in Pune, India. Bajaj Auto Limited operates independently of Bajaj Holdings & Investment Limited as of May 28, 2008.

Advisors' Opinion:

  • By Admin At 2011-10-21

    Unlike cars which are mostly bought through loans, three out of four two-wheelers are bought with own cash. Bajaj Auto would thus be able to bypass the interest rate impact as it seeks growth. After the exit of Honda from Hero Honda, the spotlight is on the second largest two-wheeler maker in the country. Investors who are bearish on Hero Honda could shift to Bajaj for the two-wheeler play. Under managing director Rajiv Bajaj, the company is focussing on a stronger product line and growth opportunity in emerging markets.

Best India Stocks To Hold In 2012: (COLPAL.NS)

 Colgate-Palmolive (India) Limited engages in the manufacture and sale of oral care and personal care products in India and internationally. The company?s oral care products include toothpastes, toothbrushes, toothpowder, mouthwashes, and whitening products. Its personal care products consist of body wash, liquid hand wash, shave preps, skin care, and hair care products. The company also offers household care products, which include a dish washing paste. In addition, it provides pet nutrition products. Further, the company provides various dental care products for gingivitis treatment, sensitivity treatment, tooth whitening, fluoride therapy, mouth ulcer treatment, and specialty cleaning. Colgate-Palmolive (India) Limited sells its products primarily under the Colgate, Palmolive, Mennen, Ajax, Axion, Softsoap, and Hill?s Pet Nutrition brand names. The company was founded in 1937 and is based in Mumbai, India. Colgate-Palmolive (India) Limited is a subsidiary of Colgate-Palmolive Company, U.S.A.

Advisors' Opinion:

  • By Paul At 2011-10-21

    The spread of organised retail is opening up under-explored markets to fast-moving consumer goods companies. With 3 million rural distribution outlets and a leadership position in oral care products, Colgate is at the right place at the right time.

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Make Big Profits in a Small World

I’m always surprised when financial pundits in the United States forget to mention that, although domestic markets may be closed for a holiday like today’s Labor Day commemoration, foreign markets are open and generally thriving.

Across the globe, brokers are still pushing and pulling the markets — they’re just doing it in Buenos Aires, Japan and London.

Because I feel blessed to live in the greatest nation in the world, I know it’s easy to get stuck in an insular view that America is the only land of opportunity, but it’s a big world. The sooner we get acclimated to that idea, the sooner we can benefit from it.

DO YOUR PORTFOLIO A WORLD OF GOOD WITH OPTIONS

While I don’t necessarily advocate investing directly on foreign exchanges unless you are competent with currency conversion and have the constitution to trade at all hours of the night, there are plenty of opportunities in domestic markets that allow us as options traders to take advantage of booming economies and bright sectors abroad.

In my Tactical Trader options trading service, I’ve been helping my members to capitalize on global infrastructure companies, as well as those that support corporate globalization efforts.

The simple truth is, companies that are thriving worldwide are much-less likely to be affected, let alone traumatized, by less-than-opportune domestic economic conditions.

In addition to looking for “worldly” profits, I’ve been instituting a particular strategy that’s allowed me to more significantly reap the rewards. I like to call it “basket trading.” It’s a simple idea, but aren’t those usually the best ones?

A CASE FOR BASKETS

Simply put, for each basket, I identify four to nine trading names that will either benefit or suffer from a broader-market shift.

Because you’re in charge of your investing destiny, you can tailor your trading baskets to help you make the most money. I’ve crafted baskets of all call options, all put options or a careful balance of the two to profit from some stocks’ ascent piggybacking on other stocks’ decline.

For example, when crude oil prices are on the rise, it’s a great time to look at other energy-related names that might be benefiting. And when oil prices pull back and consumers’ discretionary spending goes up, you can look for the stores and restaurants that might be the recipient of the “extra” money in customers’ wallets.

Better yet, you don’t have to wait for earnings season or any other specific events to create a trading basket — unlike basketball season, it’s always basket trading season!

TURN UP THE PROFITS WHEN A SECTOR TURNS DOWN

In May, I recommended a “Sell in May and Go Away” basket, to benefit from the seasonal shift in capital. Of the nine positions, seven finished in positive territory with gains of as much as 104% in just two days.

We followed that with an even more successful basket of energy shorting plays with put options in the SPDR Energy ETF (XLE), Transocean (RIG), Murphy Oil (MUR), Hess Corp. (HES) and Occidental Petroleum (OXY).

More than a few people thought I was a bit “out there” with shorting energy names before the summer driving season was set to begin in earnest, but the five trades all closed with gains and yielded an average 27% return in less than a week. I believe we’d be hard pressed to find someone whose long por! tfolio h as given 27% all year.

We really built up steam, if you’ll pardon the pun, in our basket of coal trades this summer. I recommended four coal mining names, and in just four days, we closed the basket for an average 65% win.

BOMBS SET TO PRODUCE TRADING FIREWORKS

My latest basket, which I called the “Bombs Over Iran” basket, has been on the board for about a week and is based on Israel’s impending attack on Iran’s nuclear facilities.

The idea behind this Iran basket is that, if Iran doesn’t shut down its nuclear weapons development ambitions, Israel is going to bring an entire world of hurt on the sites with help from Israeli F15 and F16 fighters.

Lt. Gen. Thomas G. McInerney (U.S. Air Force, ret.), former assistant vice chief of staff of the Air Force said about the imminent strikes, “To hit the number of targets the Israelis need to hit with their force structure would require several days. If they did it in a night — with, say, 100 airplanes — they’d probably inflict significant damage to Bushehr and other facilities, but it would be more difficult to hit the deep bunkers at Natanz.”

Natanz is deemed as the facility where advanced weapons-grade nuclear material is being developed.

In short, any campaign to neutralize Iran’s nuclear facilities will take about a week to complete and won’t just include nuclear targets, but regime targets, as well. This is where it could get messy.

Calls for Iran to discontinue its nuclear efforts have fallen on deaf ears and I believe a certain timeline for attack is now in play. In the wake of the Georgia and Russia conflict, it’s just one more reason that I’m grateful for living in America.

I’m only able to give the specific t! rades to Tactical Trader subscribers, but in less than a week, one of the four names — a major defense player — is up more than 47%. Not too shabby for one of the lowest-volume weeks the market has seen all year.

The other components of the basket — an oil play, a gold play and an airline, which we’re playing with both call and put options — are all poised to follow suit.

FOLLOW THE MONEY, WHEREVER IT LEADS!

I’m a firm believer in sector rotation, both on Wall Street and in your portfolio, to move in and out of the spaces where profit flourishes. And, in the same sense, I think we can “region-rotate.” I follow the money wherever it leads us, be it Baghdad, Bangladesh or Beijing.

But here at home, while millions of Americans are enjoying a day of rest, home improvement projects or shopping, let’s not forget than an equal number of Americans are staffing the shopping malls, movie theaters, amusement parks and restaurants to facilitate those activities (though, admittedly, our ChangeWave Alliance surveys have been reporting that consumer spending figures will be much lower this year in many of these areas).

Labor Day celebrates both sides of the coin: hard work and leisure. Both are part of the American dream and, from where I stand, that dream still shines bright thanks to tactical options investment strategies that allow us to profit from all sorts of opportunities and to enjoy the rewards that savvy investing can bring.

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Three Big Reasons Oil Prices Will Rally Back Big Time

The following video is part of our "Motley Fool Conversations" series, in which analyst John Reeves and advisor David Meier discuss topics across the investing world.

What is the future for the drilling industry, and how will Transocean be affected over the long haul? Dave ranks Transocean #5 on his list of top energy stocks because of the company's solid capabilities. The video concludes with Dave's long-term outlook for Transocean.

As oil prices climb, investors can find opportunities to ride the wave of surging profits for energy companies. Transocean is one company that should do well in such an environment. Take a look at a couple of other oil stocks recommended by Motley Fool analysts in a recent special free report: "3 Stocks for $100 Oil." The report won't be available forever, so we invite you to enjoy a free copy today. You can access it by clicking here. Fool on!

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Best Consumer Stocks In 2013

Wall Street's top strategists have been unveiling their 2013 S&P 500 year end forecasts.  Calls range from bold and ballsy to reluctant and conservative.

 

They see the S&P 500 ending 2013 slightly lower to up as much as 20% from yesterday's close of 1,254. Earnings are expected to be flat to up around 10%. Most see modest GDP growth in the U.S., and many expect more quantitative easing from the Fed.

 

However, all warn that Europe remains a wild card.  Most assume a eurozone recession in their base case scenario.  But should Europe's debt crisis escalate and contagion ensue, all bets are off and stocks will tank.  Then again, if the crisis is contained, then most would argue that the sky's the limit.

 

We've written before that our favorite line came from Nomura's 2013 Global Strategy Outlook:

 

Putting things bluntly, either we have another very serious credit event with consequences at least as severe as the Lehman Brothers bankruptcy, or stocks are probably a buy.

 

Anyway, we read through hundreds of pages of research published by 16 of Wall Street's very best. Here's a summary of their 2013 forecasts:

Best Consumer Stocks In 2013:Genuine Parts Company (GPC)

 Genuine Parts Company distributes automotive replacement parts, industrial replacement parts, office products, and electrical/electronic materials in the United States, Puerto Rico, Canada, and Mexico. The company operates in four segments: Automotive Parts Group, Industrial Parts Group, Office Products Group, and Electrical/Electronic Materials Group. The Automotive Parts Group segment distributes automotive replacement parts for imported vehicles, trucks, SUVs, buses, motorcycles, recreational vehicles, farm vehicles, small engines, farm equipment, and heavy duty equipment. This segment also distributes accessory items used in the automotive aftermarket, such as repair shops, service stations, fleet operators, automobile and truck dealers, leasing companies, bus and truck lines, mass merchandisers, farms, industrial concerns, and individuals. It owns and operates automotive parts distribution centers and automotive parts stores under the NAPA name. The Industrial Parts Group segment distributes industrial replacement parts and related supplies, such as bearings, mechanical power transmission, industrial automation, hose, hydraulic and pneumatic components, industrial supplies, and material handling products. This segment serves various industries, including the food, forest products, primary metal, paper, mining, automotive, petrochemical, and pharmaceutical industries. The Office Products Group segment involves in the wholesale distribution of a line of office and other business related products that are used in the daily operation of businesses, schools, offices, and institutions. The Electrical/Electronic Materials Group segment distributes insulating and conductive materials, assembly tools, test equipment, and custom fabricated parts. This segment provides distribution services to original equipment manufacturers, motor repair shops, and assembly markets. The company was founded in 1928 and is headquartered in Atlanta, Georgia.

Best Consumer Stocks In 2013:BorgWarner Inc. (BWA)

 BorgWarner Inc. engages in the manufacture and sale of engineered automotive systems and components primarily for powertrain applications worldwide. The company?s Engine segment offers turbochargers, chain products, emissions systems, thermal systems, diesel cold start and gasoline ignition technology, and cabin heaters. It also manufactures electric air pumps, turbo actuators, and exhaust gas recirculation coolers, tubes, and valves for gasoline and diesel applications. This segment?s chain and chain systems include timing chain and timing drive systems, variable cam timing systems, crankshaft and camshaft sprockets, tensioners, guides, snubbers, front-wheel drive transmission chain and four-wheel drive chain, and chain systems for light and commercial vehicles. In addition, the Engine segment offers viscous fan drives and polymer fans; and electronic control units and sensor technology products. Its Drivetrain segment offers friction and mechanical products, such as dual clutch modules, friction clutch modules, friction plates, transmission bands, torque converter clutches, one-way clutches, and torsional vibration dampers. This segment also provides control products comprising electro-hydraulic solenoids for standard and high pressure hydraulic systems, transmission solenoid modules, and dual clutch control modules. In addition, it offers torque management products, including rear-wheel drive/all-wheel drive (AWD) transfer case systems, front-wheel drive/AWD electromagnetic coupling systems, and advanced products. The company sells its products to original equipment manufacturers of light vehicles, such as passenger cars, sport-utility and cross-over vehicles, vans, and light trucks; and commercial trucks, buses, and agricultural and off-highway vehicles, as well as to tier one vehicle systems suppliers and the aftermarket for light and commercial vehicles. BorgWarner Inc. was founded in 1987 and is headquartered in Auburn Hills, Michigan.

Best Consumer Stocks In 2013:Lennar Corporation (LEN)

 Lennar Corporation, together with its subsidiaries, operates as a home builder and provider of financial services in the United States. The company's homebuilding operations include the construction and sale of single-family attached and detached homes, and multi-level residential buildings, as well as the purchase, development, and sale of residential land directly and through unconsolidated entities. Its financial services comprise providing mortgage financing, title insurance, and closing services for buyers of its homes and others. As of November 30, 2009, the company owned 82,703 homesites and had access through option contracts to an additional 21,173 homesites. It serves customers in Florida, Maryland, New Jersey, Virginia, Arizona, Colorado, Texas, California, Nevada, Illinois, Minnesota, New York, North Carolina, and South Carolina. Lennar Corporation was founded in 1954 and is based in Miami, Florida.

Best Consumer Stocks In 2013:J & J Snack Foods Corp. (JJSF)

 J&J Snack Foods Corp., together with its subsidiaries, manufactures nutritional snack foods, as well as distributes frozen beverages to the food service and retail supermarket industries in the United States, Mexico, and Canada. The company primarily offers soft pretzels, frozen juice treats, desserts, churros, and baked goods to snack bars and food stands in chain, department, discount, convenience, and warehouse club stores; malls and shopping centers; fast food outlets; stadiums and sports arenas; leisure and theme parks; movie theatres; and schools, colleges, and other institutions. It also provides bakery products, such as biscuits, fig and fruit bars, cookies, muffins, and donuts, as well as soft drinks and funnel cakes. J&J Snack Foods Corp. sells its soft pretzels primarily under SUPERPRETZEL, PRETZEL FILLERS, PRETZELFILS, GOURMET TWISTS, MR. TWISTER, SOFT PRETZEL BITES, SOFTSTIX, SOFT PRETZEL BUNS, HOT KNOTS, DUTCH TWIST, TEXAS TWIST, SANDWICH TWIST, CINNAPRETZEL, and SERIOUSLY TWISTED brand names; frozen juice treats and desserts under the LUIGI?S, FRUIT-A-FREEZE, WHOLE FRUIT, ICEE, BARQ?S, and MINUTE MAID brand names; churros under the LA CHURROS and TIO PEPE?S brand names; bakery products under the MRS. GOODCOOKIE, CAMDEN CREEK BAKERY, READI-BAKE, COUNTRY HOME, MARY B?S, DADDY RAY?S, and PRETZEL COOKIE brand names; frozen beverages under the ICEE, SLUSH PUPPIE, and ARCTIC BLAST brand names; and soft drinks and funnel cakes under the FUNNEL CAKE FACTORY brand name. The company markets its products through a network of food brokers and independent sales distributors, as well as through its direct sales force. As of September 26, 2009, it operated 4 stores. The company was founded in 1971 and is headquartered in Pennsauken, New Jersey.

Best Consumer Stocks In 2013:Molson Coors Brewing Company (TAP)

 Molson Coors Brewing Company brews, markets, sells, and distributes beer brands. It sells its products in Canada, under the Coors Light, Molson, Rickard's Red, Carling, Pilsner, Keystone Light, Creemore Springs, and Granville Island brands. The company also brews or distributes products under license from third parties, which include Heineken, Amstel Light, Murphy's, Asahi, Asahi Select, Miller Lite, Miller Genuine Draft, Miller Chill, Milwaukee's Best, Milwaukee's Best Dry, and Foster's. In addition, it imports, distributes, and markets the Corona, Coronita, Negra Modelo, and Pacifico brands, through a joint venture agreement with Grupo Modelo. Further, the company sells various brands in the United States, which include Coors Light, Miller Lite, Coors Banquet, Miller Genuine Draft, MGD 64, Miller Chill, Sparks, Miller High Life, Miller High Life Light, Keystone Light, Icehouse, Mickey's, Milwaukee's Best, Milwaukee's Best Light, Old English 800, Blue Moon, Henry Weinhard's, George Killian's Irish Red, Leinenkugel's, Peroni Nastro Azzurro, Pilsner Urquell, Grolsch, Coors Non-Alcoholic, and Sharp's. Additionally, it sells various brands in the United Kingdom comprising Carling, C2, Coors Light, Worthington's, White Shield, Caffrey's, Kasteel Cru, and Blue Moon, as well as various regional ale brands. The company also sells the Grolsch brands through a joint venture with Royal Grolsch N.V. and the Cobra brands through a joint venture called Cobra Beer Partnership Ltd.; and distributes brands sold under license, including Corona, Coronita, Negra Modelo, Pacfico, Singha, and Magners Draught Cider. In addition, it markets and sells Zima, Si'hai, Coors Gold, and Coors Extra brands to various international markets. The company was formerly known as Adolph Coors Company and changed its name to Molson Coors Brewing Company as a result of its merger with Molson Inc. in February 2005. Molson Coors Brewing Company was founded in 1873 and is headquartered in Denver, Colorado.

Best Consumer Stocks In 2013:DIRECTV (DTV)

 DIRECTV provides digital television entertainment in the United States and Latin America. The company provides direct-to-home (DTH) digital television services, as well as multi-channel video programming distribution services in the United States. It offers various channels of digital-quality video entertainment and CD-quality audio programming directly to subscribers' homes or businesses, as well as video-on-demand services; and approximately 160 national high-definition television channels and 4 3D channels. The company also provides premium professional and collegiate sports programming, such as the NFL SUNDAY TICKET package, which allows subscribers to view the NFL games. In addition, it offers DTH digital television services in Latin America and the Caribbean, including Puerto Rico. The company provides its local and international programming under the DIRECTV and SKY brand names. As of December 31, 2010, it served approximately 19.2 million subscribers in the United States; and 8.9 million subscribers in Latin America. The company was founded in 1990 and is based in El Segundo, California.

Advisors' Opinion:

  • By Scott Rothbort At 2011-12-9

    DirecTV(DTV) provides digital home entertainment to over 27 million direct subscribers and nearly 4 million partnered subscribers in the U.S. and Latin America. The company added nearly 2 million subscribers in 2011. ARPU (average revenue per subscriber) increased 3.5% in the U.S. and nearly 12% in Latin America so far this year. Earnings are expected to grow by over 30% in both 2011 and 2012. The stock sells at just 10.5 times 2012 estimates.

    Compare that with forward price-to-earnings for competitors such as Time Warner Cable(TWC), at 11.2; Cablevision(CVC), at 11.4; and Comcast(CMCSA), 11.5. The stock is an excellent generator of cash flow. That said, if there is one issue I have with DirecTV management, it is its insistence on increasing leverage to repurchase stock.

    DirecTV's raw beta is 0.85.

    DirecTV, one of George Soros' top holdings, was also one of Warren Buffett's 6 New Investments in the most recently reported quarter.

Best Consumer Stocks In 2013:Meredith Corporation (MDP)

 Meredith Corporation, a media and marketing company, engages in magazine and book publishing, television broadcasting, integrated marketing, and interactive media business in the United States. It operates in two segments, Publishing and Broadcasting. The Publishing segment publishes magazines for women focusing on the home and family market. It publishes 25 subscription magazines, including Better Homes and Gardens, Family Circle, Ladies' Home Journal, Parents, American Baby, Fitness, and More, as well as approximately 135 special interest publications primarily under the Better Homes and Gardens brands. This segment also includes book publishing, which has approximately 200 books in print; integrated marketing, which offers customer relationship marketing services, including direct, database, custom publishing, digital, and word-of-mouth marketing to corporate customers; and an Internet presence that consists of approximately 30 Web sites. The Broadcasting segment includes 12 network-affiliated television stations comprising 6 CBS affiliates, 3 FOX affiliates, 2 MyNetworkTV affiliates, and 1 NBC affiliate, as well as 1 AM radio station. This segment also comprises 20 Web sites, including 8 mobile Web sites, 8 iPhone applications, and video related operations. The company was founded in 1902 and is headquartered in Des Moines, Iowa.

Best Consumer Stocks In 2013:Rogers Communication Inc. (RCI)

 Rogers Communications, Inc. operates as a communications and media company in Canada. The company?s Wireless segment provides wireless voice and data communications services. It operates a global system for mobile communications and general packet radio service network. This segment markets its products and services under Rogers Wireless, Fido, and chatr brands. Its Cable segment offers cable television, high-speed Internet access, and cable telephony services. As of December 31, 2010, this segment provided digital cable services to approximately 1.7 million households; Internet service to approximately 1.7 million residential subscribers; and residential circuit-switched telephony services to approximately a million subscribers. This segment also offers local and long-distance telephone, enhanced voice and data services, and IP access. In addition, this segment operates a retail distribution chain consisting of approximately 400 stores that provide cable services and digital and Internet equipment, as well as offers digital video disc and video game sales and rentals. The company?s Media segment publishes magazines, trade and professional publications, and directories, as well as operates 55 radio stations in Canada; multicultural OMNI broadcast television stations; the 5 station Citytv television network; specialty sports television services, including Rogers Sportsnet, Sportnet ONE, and Setanta Sports Canada; specialty services, which comprise Outdoor Life Network, The Biography Channel Canada, and G4 Canada; and televised shopping service, The Shopping Channel. It also holds an ownership in a mobile sports and events production and distribution joint venture; delivers content and conducts ecommerce through the Internet; and owns Blue Jays, a League Baseball club, as well as Rogers Centre sports and entertainment venue. The company was founded in 1920 and is based in Toronto, Canada.

Advisors' Opinion:

  • By Pat Racaniello At 2011-10-17

    Rogers C! ommunica tions (RCI) is a Canadian communications firm with a presence in every major telecom segment, including wireless, wireline, cable television and high speed internet. Wireless communications is the biggest segment of the company’s revenues, with 56% of the most recent quarter contributed by wireless. The company is organized as a holding company, with stakes in major subsidiaries such as Rogers Broadcasting and Rogers Sports Group, which hold further stakes in multiple businesses.

    The stock last traded at $37.57, with an overall tight 52 week range of $40.82 - $33.62, representing low volatility. The price earnings ratio is near the industry average and the 5 year low price earnings at 14.4 times, considering the company just announced an 11% increase in the dividend. In addition, with far higher leverage than the industry at 245.39 (long term debt to equity), the company is also far more comfortable in terms of interest coverage at 4.3 versus 0.02.

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Best Wall St. Stocks Today: MSFT

Microsoft (NASDAQ: MSFT) announced record fourth-quarter revenue of $16.04 billion for the quarter ended June 30, 2010, a 22% increase from the same period of the prior year. Operating income, net income and diluted earnings per share for the quarter were $5.93 billion, $4.52 billion and $0.51 per share, which represented increases of 49%, 48% and 50%, respectively, when compared with the prior year period.

Thomson
 Reuters has estimates of $0.46 EPS (vs. $0.36 a year ago) and $15.22 billion in revenues.While the core software businesses of the company delivered extremely strong results, non-core operations in games and online search and content did poorly.

Sales of Microsoft’s Windows division� were $4.5 billion with operating income of $3.1 billion. That compares to $3.2 billion and $1.9 billion in the same quarter last� year.

Microsoft’s servers and tools division had revenue of $4 billion and operating income of $1.5 billion. Those numbers during the same quarter last year were $3.5 billion and $1.2 billion, a sign that margins in the group are under some pressure.

The business divisions, Microsoft’s largest, had $5.3 billion and operating income of $3.2billion. In the same quarter last year, the numbers were $4.6 billion and $2.7 billion.

The company’s entertainment group, mostly sales of Xbox products, posted a loss of $172 million, slightly higher than last year. Revenue was $1.6 billion up from $1.3 billion. The company could not add the addition sales to any bottom line benefit

Microsoft’s online business, which has been bedeviled by losses for year, had red ink of $696 million compared with $585 million in the same period last year. Revenue was up modestly from $501 million to $565 million. The recovery of search revenue and display advertising was disappointing. The MSN property’s CPMs could have been hurt by a flood of low-priced display inventory from Face! book.

The total results were better than expectations, but their composition was no surprise at all.

Douglas A. McIntyre

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RSP vs. SPY: 2011 At a Glance

SPY has long been the king of exchange traded products. Hitting the market in 1993, this fund has amassed nearly $100 billion in assets making it not only the largest ETF in the world, but also one of the largest funds available to investors. Its ultra low expenses and massive daily volume have allowed it to be both a trading instrument as well as an integral part of long term portfolios. But for the past few years, the fund has been in a stiff competition with its equal weighted counterpart, the�S&P Equal Weight ETF (RSP) [see also 12 High-Yielding Commodities For 2012].

Rivalry

The rivalry between these two funds can be traced back since RSP debuted in 2003. While SPY has won the battle in some years, others have seen RSP wipe the floor with the ETF top-dog. For those unfamiliar with RSP’s strategy, the fund is comprised of the exact same 500 holdings as SPY, but rather than overweighting any one holding (the top ten holdings of SPY account for over 20% of the product) RSP grants an equal weight to each security, giving a smaller company like Micron Technology the same weight as Exxon Mobil. But with this strategy comes the drawback of higher expenses, as RSP charges 31 more basis points than its S&P 500 counterpart [see also Equal Weight ETFs: Comparing Similar (But Different) Strategies].

Ticker200820092010
SPY-36.7%�26.3%15.0%
RSP-40.0%�44.6%�21.4%

Over the past few years, it seems that a clear trend has emerged regarding the performance of these two products. When markets are ! stable a nd strong, RSP tends to outperform, but the opposite is true during tough years. Although both suffered significant losses when the recession hit in 2008, SPY held its ground noticeably better than RSP. Despite the fact that RSP has better three and five year returns, that may not be enough to convince investors given that unstable markets seem to hit RSP especially hard. The likely reason behind this lies in the equal weight strategy. Because RSP gives every holding the same weight, smaller companies have just as much say as something like Apple or IBM. When times are tough, smaller companies tend to perform worse than their large cap counterparts, trickling down into the trend that RSP typically falls into [see also Ten Unexpected Observations On YTD ETF Returns].

2011 In Review

Ticker2011Inflows (mm)
SPY�1.89%�6,298
RSP-0.67%�(447)

So how did these two strategies fare in a year that featured choppy markets? RSP had the edge for the first half of the year, as markets were relatively stable, but that all came to a head once August rolled around. With the euro debt crisis heating up and the first ever downgrade of U.S. debts by a domestic firm, Standard & Poor’s, markets went haywire, allowing SPY to take the lead and hold it through the end of the year.�Though its performance was only marginally better, SPY was able to rake in 2011 cash inflows of over $6.2 billion while RSP actually saw an outflow of $447 million [see also ETFs: The $10 Billion Club].

So now the biggest question that remains is what these figures will look like when 2012 comes to an end. Just remember that the trend is your friend! when it comes to these two funds. If markets are performing well and data continues to point towards a recovery, RSP will likely take back its lead (it is currently winning through the first few weeks of this year), but if we have another up and down year plagued with volatility, SPY should come out on top at the end of the year.

[For more ETF analysis, make sure to sign up for our free ETF newsletter or try a free seven day trial to ETFdb Pro]

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Great Penny Stocks To Invest In 2014

Stocks are making small gains in midday trading with the Dow up 18 points, the Nasdaq up a half point, and the S&P up a half point. We probably won’t see any big gains today as oil hits $108 a barrel and investors are going to be trading cautiously as first quarter earnings start coming in next week. Let’s take a look at what penny stocks have seen big gains so far today.

Great Penny Stocks To Invest In 2014:Ever-Glory International Group Inc. (EVK)

 Ever-Glory International Group, Inc., together with its subsidiaries, engages in the manufacture, distribution, and sale of apparel for women, men, and children. Its products include coats, jackets, slacks, skirts, shirts, trousers, vests, skiwear, down jackets, knitwear, and jeans. The company offers its products to the casual wear, sportswear, and outerwear brands, as well as retailers, such as department stores, flagship stores, stores-within-a-store, and specialty stores primarily in Europe, the United States, Japan, and the People?s Republic of China. As of December 31, 2010, it operated 293 retail stores in the People?s Republic of China. The company is based in West Covina, California.

Great Penny Stocks To Invest In 2014:Integrated Silicon Solution Inc. (ISSI)

 Integrated Silicon Solution, Inc., a fabless semiconductor company, designs and markets integrated circuits for digital consumer electronics, networking and telecommunications, mobile communications, automotive electronics, and industrial markets. Its primary products include low and medium density DRAM; and high speed and low power SRAM. The company?s low and medium density DRAM products are used in wireless local area networks (WLANs), base stations, networking switches and routers, fiber to the home (FTTH), DSL and cable modems, set top boxes, digital cameras, MP3, flat panel TVs, LCD TVs, HDTVs, video phones, Voice over Internet Protocol, printers, disk drives, tape drives, audio/video equipment, instrumentation, global positioning systems (GPS), telematics, infotainment, smart meters, and other applications. Its SRAM products are used in WLANs, cell phones, base stations, networking switches and routers, FTTH, DSL modems, LCD TVs, set-top boxes, GPS systems, instrumentation, engine control systems, medical equipment, telematics, audio and video equipment, satellite radio, POS terminals, fax machines, copiers, tape drives, and other applications. Integrated Silicon Solution, Inc. also designs and markets application specific standard products, including high performance serial EEPROMs for use in TVs, networking systems, modems, telephone sets, security systems, video games, automobiles, and other consumer products; and SmartCards that have applications in transportation passes, payment cards, health care cards, and other cards that store secure data. The company markets and sells its products in Asia, the United States, and Europe through direct sales force, independent sales representatives, and distributors. Integrated Silicon Solution, Inc. was founded in 1988 and is headquartered in San Jose, California.

Advisors' Opinion:

  • By Arohan At 2012-2-12

    ISSI is another memory chip designer and marketer. It is a fabless semiconductor company so it outsources its manufacturing. The market currently values the company at $283 million ascribing a PE ratio of 4.75. The company has delivered an EPS growth of 39% in the last 5 years and its future outlook appears to be of modest growth as well, with a slight decline in the up coming year. The company has $88 million in cash and no debt and is well positioned to handle the slowdown in demand next year.

Great Penny Stocks To Invest In 2014:Tortoise Capital Resources Corporation (TTO)

 Tortoise Capital Resources Corp. is a close ended equity mutual fund launched and managed by Tortoise Capital Advisors L.L.C. It is co-managed by Kenmont Investments Management, L.P. The fund invests in the public equity markets of the United States. It seeks to invest primarily in the energy infrastructure sector. The fund invests in the value stocks of micro cap companies with primary focus on midstream and downstream segments and to lesser extent upstream segment. It also seeks to invest between $5.0 million and $20.0 million per transaction in privately held companies with a market capitalization of less than $250 million. The fund employs quantitative and fundamental analysis with a focus on factors such as fixed asset-intensive, limited technological risk, and experienced management teams to create its portfolio. Tortoise Capital Resources Corp. was formed on September 8, 2005 and is domiciled in the United States.

Great Penny Stocks To Invest In 2014:SORL Auto Parts Inc. (SORL)

 SORL Auto Parts, Inc., through its principal operating subsidiary, Ruili Group Ruian Auto Parts Co., Ltd., engages in the development, manufacture, and distribution of automotive brake systems and other safety related auto parts for commercial vehicles, such as trucks and buses. The company, through its 90% ownership in Ruili Group Ruian Auto Parts Co., Ltd., a Sino-foreign joint venture, offers various products, including spring brake chamber, clutch servos, air dryers, relay valves, and hand brake valves. It also provides auto metering products, auto electric products, anti-lock brake systems, retarders, hydraulic brakes, and power steering products. SORL Auto Parts, Inc. markets its products under the SORL brand to automotive original equipment manufacturers and the related aftermarket customers in the People?s Republic of China and internationally. The company was founded in 2003 and is headquartered in Ruian City, the People?s Republic of China.

Advisors' Opinion:

  • By Robert Hsu At 2011-9-13

    Sorl Auto Parts (NASDAQ: SORL) has purchased the assets of the hydraulic brake, power steering, and automotive electrical operations of Ruili Group Auto Parts. As a result of this acquisition, Sorl’s product offerings will expand to both commercial and passenger vehicles’ brake systems and other key safety-related auto parts. The company expects it will allow the company to streamline its management organization, as well as create efficiencies in production, R&D and its sales network. In addition, Sorl’s management expects the acquisition will be beneficial to the company’s revenues and earnings.

    Sorl paid 170 million yuan — or about $25 million — for the acquisition, and the company believes it will generate about $35 million in revenues and about $4 million in net income in 2011. In addition, Sorl expects the acquisition to generate incremental free cash flow in both 2010 and 2011.  SORL has outperformed earnings estimates for four consecutive quarters, and its stock price rose 71.7% over the past 12 months. 

    Now, the chairman and CEO of Sorl Auto,  Xiao Ping Zhang, is also the controlling shareholder of the Ruili Group. However, the price paid for the acquisition was based on a valuation of the purchased business performed by Asia’s leading appraisal company, DTZ Debenham Tie Leung — lessening the possibility of a conflict of interest with regards to the sale.

    Overall, I think this was a good purchase by Sorl. The acquisition will allow the company to offer its customers more high-quality products to fulfill their needs from one source. In addition, because both companies share similar visions, I expect the combination of their internal resources will create favorable economies-of-scale that will strengthen earnings and create shareholder value. Buy SORL under $10.

Great Penny Stocks To Invest In 2014:NRG Energy Inc. (NRG)

 NRG Energy, Inc., together with its subsidiaries, operates as a wholesale power generation company. The company engages in the ownership, development, construction, and operation of power generation facilities. It also involves in the transacting in and trading of fuel and transportation services; the trading of energy, capacity, and related products in the United States and internationally; and the supply of electricity, energy services, and cleaner energy and carbon offset products to retail electricity customers in deregulated markets. The company operates natural gas- fired, coal- fired, oil-fired, nuclear, solar, and wind power plants. As of December 31, 2010, it had power generation portfolio of 193 operating fossil fuel and nuclear generation units with an aggregate generation capacity of approximately 24,570 megawatt (MW), as well as ownership interests in renewable facilities with an aggregate generation capacity of 470 MW. The company portfolio also includes approximately 24,035 MW generation capacity in the United States, and 1,005 MW generation capacity in Australia and Germany. In addition, it has a district energy business with steam and chilled water capacity of approximately 1,140 megawatts thermal equivalent. NRG Energy, Inc. was founded in 1989 and is headquartered in Princeton, New Jersey.

Advisors' Opinion:

  • By Keith At 2012-1-7

    Buffett sold all of his stake in this company by selling 6 million shares at an average price of $21.84 in Q3 2010.

    In 2010, revenues shrunk by 1.15% to $8.84 billion, and GAAP EPS collapsed by 46.51% to $1.84. The profit margin also worsened to 31.37% from 40.54%. The next earnings release is on May 5. For the first quarter 2011, analysts estimate NRG will earn $0.15 per share, a decrease of 31.84% over the prior year first quarter results. For the first quarter 2011, analysts estimate NRG will generate revenues of $2.1 billion, a decrease of 6.84% over the prior year first quarter results. The company also has a debt to equity ratio of 1.25.

    We estimate a low single digit decline in revenues for 2011 due to continued pressure on power prices. Also, the continued development of the Marcellus shale will keep downward pressure on natural gas prices, which in turn hurts peak power prices. For good reason, NRG shares trade well above our fair value estimates. This is a loser, folks. Buy solar or oil company stocks, instead.

    NRG Energy is Fortune 500 and S&P 500 Index company that owns and operates one of the country’s largest and most diverse power generation portfolios. Headquartered in Princeton, NJ, the company’s power plants provide 25,000 MW of generation capacity, which is enough to supply nearly 20 million homes. NRG’s retail businesses, Reliant Energy and Green Mountain Energy Company, combined serve more than 1.8 million residential, business, commercial and industrial customers. With investments in solar, wind and nuclear power, as well as electric vehicle infrastructure, NRG is working to help America transition to a clean energy economy.

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