Checking the Quality of Stratasys' Growth

Stratasys (Nasdaq: SSYS  ) carries $51 million of goodwill and other intangibles on its balance sheet. Sometimes goodwill, especially when it's excessive, can foreshadow problems down the road. Could this be the case with Stratasys?

Before we answer that, let's look at what could go wrong.

AOL blows up
In early 2002, AOL Time Warner was trading for $66.27 per share.

It had $209 billion of assets on its balance sheet, and $128 billion of that was in the form of goodwill and other intangible assets. Goodwill is simply the difference between the price paid for a company during an acquisition and the net assets of the acquired company. The $128 billion of goodwill in this case was created when AOL and Time Warner merged in 2000.

The problem with inflating your net assets with goodwill is that it can -- being intangible after all -- go away if the acquisition or merger doesn't create the amount of value that was expected. That's what happened in AOL Time Warner's case. It had to write off most of the goodwill over the next few months, and one year later that line item had shrunk to $37 billion. Investors punished the stock along the way, sending it down to $27.04 -- or nearly a 60% loss.

In his fine book It's Earnings That Count, Hewitt Heiserman explains the AOL situation and how two simple metrics can help minimize your risk of owning a company that may blow up like this. Let's see how Stratasys holds up using his two metrics.

Intangible assets ratio
This ratio shows us the percentage of total assets made up by goodwill and other intangibles. Heiserman says he views anything over 20% as worrisome, "because management might be overpaying for the acquisition or acquisitions that gave rise to the goodwill."

Stratasys has an intangible assets ratio of 24%.

This is not so far over Heiserman's threshold as to cause panic, but you'll want to keep an eye on this number over the next few quarters. It's also useful to compare it to tangible book value, which I explain below.

Tangible book value
Tangible book value is simply what remains after subtracting goodwill and other intangibles from shareholders' equity. If this is not a positive value, Heiserman advises you to run away because such companies may "lack the balance sheet muscle to protect themselves in a recession or from better-financed competitors."

Stratasys' tangible book value is $125 million, so no yellow flags here.

Foolish bottom line
If you own Stratasys, or any other company that fails one of these checks, make sure you understand the business model and management's objectives. You can never base an entire investment thesis on one or two metrics, but there is a yellow flag here. I'll help you keep a close eye on these ratios over the next few quarters by updating them soon after each earnings report.

Keep up with Stratasys, including news and analysis as it's published, by adding the company to your free, personalized watchlist.

Retail Same-Store Sales Surge in April on Late Easter Success

Shoppers braved surging food and fuel prices once again in April as the late Easter holiday helped retailers post strong same-store sales increases.

However, several companies mentioned rising prices are already cutting into discretionary spending and could temper spending gains going forward. This morning’s higher-than-expected rise in unemployment claims reminded us the job market is still fragile, and stagnant consumer confidence doesn’t bode well for back-to-school spending.

Total sales for the 27 retailers we track increased 10.4% from a year ago to $31.8 billion in April, while same-store sales rose 8.7% on top of a 1.6% gain last year – this was the 20th straight gain after 12 consecutive months of declines. Because Easter fell 20 days later this year than last, a better comparison is the combined Spring Break (March-April) period. On this basis, total sales increased 6.9% to $69.1 billion and same-store sales rose 5.4%, on top of gains of 7.8% and 5.8%, respectively. during the same period last year.

Click to enlarge

All 27 retailers posted comp gains in April. For the combined March-April period, 23 out of the 27 retailers posted same-store sales increases compared to 22 in the year-ago period.

Top performers included Limited Brands (LTD) (+20% comps in April, +16.7% combined March-April) as its Victoria’s Secret chain saw comps up 25%, action-sports retailer Zumiez (ZUMZ) (+17.5%, +12.5%) and warehouse club operator Costco (COST) (+12.0%, +12.6%), which continues to benefit from higher gas and food prices. Laggards included Gap (GPS) (+8.0%, -1.7%), which said merchandise margins were down significantly in the first quarter, Bon-Ton (BONT) (5.1%, -1.2%), Destination Maternity (DEST) (+2%, -0.9%) and Stein Mart (SMRT) (4.2%, -0.6%). Hot Topic (HOTT) (+10.5%, +1.0%) managed to post its first same-store sales gain since April 2009.

Click to enlarge

While retailers have so far been able to keep the post-holiday momentum alive, the remainder of the year will be a challenge. Raw material, labor and transportation costs are all rising rapidly and companies will struggle to hold onto recent margin gains as they debate how much of a price increase the consumer is willing to digest. Several dozen major retailers and CPG manufacturers have stated just in the past several weeks that consumers should expect double-digit price increases on just about everything from peanut butter to appliances to clothing in the latter half of the year.

As an example, Proctor & Gamble (PG) CFO Jon Moeller, discussing fiscal Q3 results, stated: “Since the beginning of the fiscal year, the year-on-year impact from higher costs has more than tripled. We now estimate that materials and energy costs will be up roughly $1.8 billion before tax for the year. In the March quarter alone, input costs are up more than $400 million before tax versus prior year, or about $0.10 per share.” The company originally estimated only a $1.0 billion pre-tax impact from commodity costs back in late January.

Consumers were paying $3.96 per gallon at the pump on May 2nd, up 36.7% from a year ago and the highest since July 21, 2008. Based on an estimate of a reduction of $1 billion in spending for every 1 cent increase in gas prices, the more than $1 rise in pump prices over the past year has basically wiped out any benefit for middle-class families from the payroll tax cut included as part of December’s deal to extend the Bush tax rates.

“The higher gas prices act like a pernicious tax increase on the economy,” said economist Mark Zandi of Moody’s Analytics. “Consumers are literally taking their payroll tax cut and putting it into their gas tank.”

Target (TGT) CEO Gregg Steinhafel said consumers “continued to be very cautious in their spending leading up to Easter,” and “they face increasing pressure on their household budgets due to higher energy costs and increasing prices of food, apparel and home merchandise.”

Based on recent surveys, most consumers have cut back on the amount they are driving and in areas such as travel and entertainment. However, as gas and food prices continue to surge and retailers begin to push through large price increases across most major merchandise categories, we wouldn’t be surprised if shoppers began to significantly curtail discretionary purchases as we get closer to back-to-school season.

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

Seagate FYQ3 EPS Crushes Estimates; Shares Rising

Disk drive maker Seagate Technology (STX) this afternoon reported fiscal Q3 revenue ahead of consensus and earnings per share that easily topped estimates, sending its shares higher in late trading.

Revenue in the three months ended in March rose 65%, year over year, to $4.45 billion, yielding EPS of $2.64 excluding some costs.

Analysts had been modeling $4.37 billion and $2.10 per share.

Seagate shares are up 14 cents, or half a percent, at $28.03 in late trading.

Seagate management will host a conference call with investors at 6 pm, Eastern time, and you can catch the webcast of it here.

A Hidden Reason NVIDIA's Earnings Are Outstanding

It takes money to make money. Most investors know that, but with business media so focused on the "how much," very few investors bother to ask, "How fast?"

When judging a company's prospects, how quickly it turns cash outflows into cash inflows can be just as important as how much profit it's booking in the accounting fantasy world we call "earnings." This is one of the first metrics I check when I'm hunting for the market's best stocks. Today, we'll see how it applies to NVIDIA (Nasdaq: NVDA  ) .

Let's break this down
In this series, we measure how swiftly a company turns cash into goods or services and back into cash. We'll use a quick, relatively foolproof tool known as the cash conversion cycle, or CCC for short.

Why does the CCC matter? The less time it takes a firm to convert outgoing cash into incoming cash, the more powerful and flexible its profit engine is. The less money tied up in inventory and accounts receivable, the more available to grow the company, pay investors, or both.

To calculate the cash conversion cycle, add days inventory outstanding to days sales outstanding, then subtract days payable outstanding. Like golf, the lower your score here, the better.

Here's the CCC for NVIDIA, alongside the comparable figures from a few competitors and peers.

Company

TTM Revenue

TTM CCC

�NVIDIA $3,931 �40
ARM Holdings (Nasdaq: ARMH  ) $732 �(4)
Marvell Technology Group (Nasdaq: MRVL  ) $3,560 �29
Intel (Nasdaq: INTC  ) $51,569 �49

Source: S&P Capital IQ. Dollar amounts in millions. Data is current as of last fully reported fiscal quarter. TTM = trailing 12 months.

For younger, fast-growth companies, the CCC can give you valuable insight into the sustainability of that growth. A company that's taking longer to make cash may need to tap financing to keep its momentum. For older, mature companies, the CCC can tell you how well the company is managed. Firms that begin to lose control of the CCC may be losing their clout with their suppliers (who might be demanding stricter payment terms) and customers (who might be demanding more generous terms). This can sometimes be an important signal of future distress -- one most investors are likely to miss.

While I find peer comparisons useful, I'm most interested in comparing a company's CCC to its prior performance. Here's where I believe all investors need to become trend-watchers. Sure, there may be legitimate reasons for an increase in the CCC, but all things being equal, I want to see this number stay steady or move downward over time.

anImage

Source: S&P Capital IQ. Dollar amounts in millions. FY = fiscal year. TTM = trailing 12 months.

Source: S&P Capital IQ. Dollar amounts in millions. FY = . TTM = trailing 12 months.

Because of the seasonality in some businesses, the CCC for the TTM period may not be strictly comparable to the fiscal-year periods shown in the chart. Even the steadiest-looking businesses on an annual basis will experience some quarterly fluctuations in the CCC. To get an understanding of the usual ebb and flow at NVIDIA, consult the quarterly period chart below.

anImage

Source: S&P Capital IQ. Dollar amounts in millions. FQ = fiscal quarter.

Source: S&P Capital IQ. Dollar amounts in millions. FQ = fiscal quarter.

On a 12-month basis, the trend at NVIDIA looks very good. At 39.9 days, it is 18.1 days better than the five-year average of 58. days. The biggest contributor to that improvement was DSO, which improved 10.4 days compared to the five-year average. That was partially offset by a 0.2-day increase in DIO.

Considering the numbers on a quarterly basis, the CCC trend at NVIDIA looks good. At 35.6 days, it is 11.3 days better than the average of the past eight quarters. With both 12-month and quarterly CCC running better than average, NVIDIA gets high marks in this cash-conversion checkup.

Though the CCC can take a little work to calculate, it's definitely worth watching every quarter. You'll be better informed about potential problems, and you'll improve your odds of finding the underappreciated home run stocks that provide the market's best returns.

To stay on top of the CCC for your favorite companies, just use the following handy links to add companies to your free watchlist.

  • Add NVIDIA to My Watchlist.
  • Add ARM Holdings to My Watchlist.
  • Add Marvell Technology Group to My Watchlist.
  • Add Intel to My Watchlist.

Best Wall St. Stocks Today:


John Tamny of RealClearMarkets
When seasoned investors contemplate the airline industry, it’s often said that more money has been lost on investments than has ever been made. It could realistically be said that airlines are the restaurants of the travel industry.

In many ways this shouldn’t surprise us, given the origins of our best-known and oldest air carriers. T.A. Heppenheimer wrote in his 1994 book Turbulent Skies, “Government actions brought forth the first air carriers in both Europe and the United States.” Rather than creations of the private sector, in many ways, politicians formed notable firms such as American Airlines (and TWA, which it acquired not long ago) as a way of moving mail around the country.

Read more…

How To Utilize Paving Services Toronto ON Has

When you are looking for paving services Toronto ON can be in a position to provide many options. You need to be aware of the great advantages you can get with this. It could be surprising as to how good it would look if you knew what a fresh look it could give to your home.

Contractors can provide many options to this. Most of the services they are well versed include driveways. If you need to have your home look better, having it paved could do the trick. Many people prefer to work their way up from scratch. There are also people who need negligible service that could include filing of cracks.

There is a possibility that you could reap from a new design. Such extras as flowering could also be possible. You should ensure that the pavements you get work to improving the appeal of your home. It is also possible to have your house improve in value if you ever plan to put it up for sale.

It is possible for you to device ideas for your pavement. This could be because you might need a new sidewalk or driveway. Getting the best materials will provide the best option for you. Those you could go for include granite or even limestone. Get to know which are best for interior or exterior pavement.

What is of particular importance is the attention the contractor pays to safety. They need to be strict on what is best for you. This is one way to ensure you are getting the best service. Some other thing to look at is the kind of equipment used by the contractor since it is a crucial aspect in determining the result.

When you are looking for paving services toronto on can provide many diverse options. This is because there are many uses from road works to parking areas. The materials are also equally diverse with the possibility to get concrete or asphalt including others. Make sure that the service provider can cater for different needs.

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(CLNO, BSFT, FALC, LAKE) Stock in Focus by DrStockPick.com

Cleantech Transit, Inc. (CLNO)

Cleantech Transit Inc. was founded to capitalize on technology advances and manufacturing opportunities in the growing clean energy public transportation sector. The Company has expanded its focus to invest directly in specific green projects. Recognizing the many economic and operational advances of converting wood waste into renewable sources of energy, Cleantech has selected to invest in Phoenix Energy (www.phoenixenergy.net). This project could benefit the Company’s manufacturing clients worldwide.

Biomass power is the largest source of renewable energy as well as a vital part of the waste management infrastructure. An increasing global awareness about environmental issues is acting as the driving force behind the use of alternative and renewable sources of energy. A greater emphasis is being laid on the encouragement of bioenergy in the industrialized as well as developing world to counter environmental issues.

Biomass may be used for energy production at different scales, including large-scale power generation, or small-scale thermal heating projects at governmental, educational or other institutions. Biomass comes from both human and natural activities and incorporates by-products from the timber industry, agricultural crops, forestry residues, household wastes, and wood.

Cleantech Transit, Inc. (CLNO) is pleased to announce it has met its funding requirement to secure the Company’s ability to earn in 25% of the 500KW Merced Project.

The Company is in the final stages of closing its initial interest in the Merced Project and is currently working on completing the necessary documentation and expects closing the transaction soon. As previously announced Cleantech has the option to earn up to 40% of the Merced Project and the Company plans to continue to work towards increasing its interest in the Merced Project as they move ahead.

For more information about Cleantech ! Transit, Inc. visit its website www.cleantechtransitinc.com

BroadSoft, Inc. (Nasdaq:BSFT) announced it has signed a definitive merger agreement to acquire all outstanding shares of Phoenix, Arizona-based iLinc Communications, Inc. in an all-cash transaction. The closing of the acquisition is subject to the satisfaction of various customary closing conditions.

BroadSoft, Inc. provides software that enables fixed-line, mobile, and cable service providers to deliver voice and multimedia services over Internet protocol (IP) based networks.

Falconstor Software Inc. (Nasdaq:FALC) announced that its FalconStor� Network Storage Server (NSS) storage virtualization and data protection solution has achieved VMware Ready� status. This designation indicates that FalconStor NSS has passed a detailed evaluation and testing process managed by VMware and is now listed on the VMware Partner Product Catalog.

FalconStor Software, Inc. develops, manufactures, and sells network storage software solutions in the United States and internationally. It also offers related maintenance, implementation, and engineering services.

Lakeland Industries Inc.(Nasdaq:LAKE) announced financial results for its second quarter and first half of fiscal year 2012 ended July 31, 2011. Revenue of $26.2 million in Q2FY12 up 6.6% over Q2 last year. International expansion efforts continue to drive non-US revenue growth. International revenues set another record at $12.6 million. Revenues from outside the US were 48.3% of total in Q2FY12 as compared with 43.5% for Q2FY11

Lakeland Industries, Inc. manufactures and sells safety garments and accessories for the industrial protective clothing market primarily in North America, China, India, and Brazil.

Online CPR Classes

Online CPR classes are a great alternative to other methods to provide the education that is required to help somebody who isn’t breathing. This technique of lifesaving will no doubt provide someone a sense of empowerment. The need to save someone’s life can happen very unexpectedly. The old adage that knowledge is power is very true. Anybody who knows CPR can make a real difference in a life or death situation.

Online CPR classes offer education of all types of information that will ultimately be very useful in difficult situations. Obviously, no one wants to be in this type of situation. But it could very well happen and it is always good to be prepared. There are websites that educate people on how to provide CPR and rescue breaths. Basically CPR and rescue breaths are the same thing but with rescue breaths there are no compressions.

CPR provides both breathing into the airway and compressions in an effort to revive the victim. Recently, the ratio of compressions and breaths has changed and a person should keep up with the procedure that is correct and current. There are several professional websites that have a considerable amount of information with regards to how to pump the sternum and what to do when somebody isn’t breathing. It is really very easy once a person gets the hang of it, although at first it might seem somewhat complicated.

These kinds of websites also contain other sources of information. These sources include everything from textbooks to local classes can be found on these websites. However, everything doesn’t have to be done online is a person doesn’t want to use the Internet Obviously, if a textbook or a local class is inconvenient for somebody, there are always CPR classes online that can also be found on these websites. There are instructors that will demonstrate how CPR is accomplished and will help with any questions that their students may have. These classes will demonstrate all of the ways to revive a person.

If someb! ody does n’t know how to perform CPR on another person, it can be a real problem. No one should be without this knowledge and everybody should know this how to perform CPR. . Learning how to perform CPR can bring a person to new heights in self confidence. A person won’t feel like life saving is something to shun any longer. Online CPR classes are always available for the next generation of future lifesavers.

Click here for more information about Online CPR certificate and Online CPR.

Mortgage payments at lowest level in decades

(Money Magazine) -- For today's homebuyers, the weight of the monthly mortgage bill is the lightest it's been in decades.

Put 20% down on a median-priced ($154,400) existing home, and your payment will come to $616 a month, only 12.1% of the median U.S. family income.

In 98 of the top 100 metro areas, it's now cheaper to buy than rent.

"If you have good credit," says IHS Global Insight economist Patrick Newport, "this is the best time in 40 years to buy."

Want to trade up? You may think the buyer of your current home is getting a deal, but you might get an even better one on your next place.

Real estate's best-kept secret

Prices for bottom-tier properties have improved since 2011, reports Zillow, while top-tier prices keep falling.

Want to invest? To get the best rate (a quarter to a half point higher than for your primary residence), you'll have to put at least 25% down, according to federal guidelines.

Work with a real estate agent who specializes in investment properties.

Do you know a Money Hero? MONEY magazine is celebrating people, both famous and unsung, who have done extraordinary work to improve others' financial well-being. Nominate your Money Hero. 

10 Best Stocks To Own For August 2012

We are a dividends financial magazine giving you insight on building long term wealth through best & highest dividend paying stocks with solid dividend growth, growth in Earnings per Share, solid Balance sheets, low or no debt, growth in top line revenues, competitive advantages & strong management. We outline the top dividend paying stocks in 2012 in each sector of the stock market so you can get high dividend shares & grow your wealth through dividend investing. We also present you with list of best dividend paying stocks in US & International stock markets ensuring you get high yield dividends.

On August 9th, the S&P 500 closed at 1104 points, down from 1292 points since the beginning of August. Investors were concerned about S&P's downgrade of US government debt from Triple A to AA+, fears of a new recession in Europe, Italy and Spain's debt problems, debt ceiling talks that failed in Washington, China's economy cooling down, etc. Despite of fact that US companies were sitting on record billions of dollars in cash, corporate profits were good and stocks trading at cheap multiples compared to earnings (as measured by the price to earnings ratio), investors were hitting the sell button on their stocks all over the world. Yet despite all the darkness in the stock markets, some companies chose to ignore fears of another recession and actually increase their dividend payouts to investors. Below are companies that increased their dividends in the 2nd quarter of 2012 when the stock markets were in decline around the world.

10 Best Stocks To Own For August 2012:American Oriental Bioengineering Inc. (AOB)

 American Oriental Bioengineering, Inc. engages in the development, manufacture, and commercialization of a range of pharmaceutical and healthcare products. The company?s principal prescription pharmaceutical products include Shuanghuanglian Lyophilized Injection Powder (SHL Injection Powder), an anti-viral injection for treating respiratory infections, bronchitis, and tonsillitis; and Cease Enuresis Soft Gel (CE Gel) that is used to alleviate bedwetting. Its over-the-counter pharmaceutical products comprise Cease Enuresis Patch for the treatment of bedwetting and incontinence; Jinji Capsule for the treatment of endometritis, annexitis, and pelvic inflammations; Jinji Yimucao for the treatment of premenstrual syndrome (PMS) and other PMS and menopause-related symptoms; and Boke Nasal Spray for the treatment of sinus congestion from common cold, stuffy nose, chronic rhinitis, allergic rhinitis, and nasosinusitis. The company also markets various nutraceutical products, such as soybean peptide based drinks, tablets, powder, and instant coffee. American Oriental Bioengineering sells its products primarily to hospitals, clinics, pharmacies, and retail outlets in China through its sales professionals and distributors. The company is based in Beijing, the People?s Republic of China.

10 Best Stocks To Own For August 2012:Dreyfus Municipal Income Inc. (DMF)

 Dreyfus Municipal Income, Inc. is a close ended mutual fund launched and managed by The Dreyfus Corporation. It invests in the fixed income markets. It primarily invests in municipal bonds. Dreyfus Municipal Income, Inc. is domiciled in United States.

10 Best Stocks To Own For August 2012:Sensient Technologies Corporation (SXT)

 Sensient Technologies Corporation, together with its subsidiaries, manufactures and markets colors, flavors, and fragrances worldwide. Its products include flavors, flavor enhancers, and bionutrients; fragrances and aroma chemicals; dehydrated vegetables and other food ingredients; natural and synthetic food and beverage colors; cosmetic and pharmaceutical colors and additives; and technical colors, inkjet colors and inks, and specialty dyes and pigments. The company operates in two segments, Flavors & Fragrances Group and Color Group. The Flavors & Fragrances Group segment produces systems products, including flavor-delivery systems; compounded and blended products; and ingredient products, such as essential oils, natural and synthetic flavors, and aroma chemicals. This segment sells its products to food industries, including savory, beverage, dairy, confectionery, and bakery flavors; and non-food industries, such as personal and home care-markets, and pharmaceuticals market. The Color Group segment provides natural and synthetic color systems for foods, beverages, and pharmaceuticals; colors and other ingredients for cosmetics and pharmaceuticals; and technical colors for industrial applications and digital imaging. The company was founded in 1882 and is headquartered in Milwaukee, Wisconsin.

10 Best Stocks To Own For August 2012:Global Industries Ltd. (GLBL)

 Global Industries, Ltd., together with its subsidiaries, provides construction and subsea services to the offshore oil and gas industry in the North America, Latin America, and the Asia Pacific/the Middle East regions. The company?s services include pipeline construction, platform installation and removal, construction support, diving services, diverless intervention, and marine support services. As of December 31, 2010, its fleet included four derrick lay barges, one pipelay/derrick vessel, one heavy lift ship, one pipelay barge, four multi-service vessels, one dive support vessel, and one offshore supply vessel. The company serves oil and gas producers and pipeline companies. The company was founded in 1973 and is headquartered in Carlyss, Louisiana.

10 Best Stocks To Own For August 2012:IDEXX Laboratories Inc. (IDXX)

 IDEXX Laboratories, Inc. develops, manufactures, and distributes products for the veterinary and production animal markets, as well as for the water testing and dairy markets. The company?s Companion Animal Group segment provides point-of-care veterinary diagnostic products, such as instruments and consumables, and rapid assays; and information products and services, and digital radiography systems for veterinarians. This segment also offers commercial veterinary laboratory diagnostic and consulting services to veterinarians in the United States, Canada, Europe, Australia, Japan, and South Africa. Its Water segment offers a range of products used in the detection of various microbiological analytes in water to government laboratories, water utilities, and private certified laboratories. The company?s Production Animal segment provides diagnostic tests and related instrumentation that are used to detect diseases, and to monitor health status in production animals. This segment offers its products primarily to government laboratories, cattle, and poultry and swine producers. IDEXX Laboratories also provides products that test milk for antibiotic residues to dairy producers and processors, as well as products for the detection of the chemical melamine in milk. In addition, the company sells point-of-care analyzers and related consumables for use in human medical hospitals and clinics to measure electrolytes, blood gases, acid-base balance, glucose, and ionized calcium, as well as to calculate other parameters, such as base excess and anion gap. It markets and sells its products directly, as well as through independent distributors and other resellers in the Americas, Europe, and the Asia Pacific region. The company was founded in 1983 and is headquartered in Westbrook, Maine.

10 Best Stocks To Own For August 2012:Cognizant Technology Solutions Corporation (CTSH)

 Cognizant Technology Solutions Corporation provides information technology (IT), consulting, and business process outsourcing services in North America, Europe, and Asia. Its IT consulting and technology services include business and knowledge process consulting; IT strategy consulting; program management consulting; technology consulting; application design, development, integration, and re-engineering, such as complex custom systems development, data warehousing/business intelligence, customer relationship management (CRM) system implementation, and enterprise resource planning (ERP) system implementation; and software testing services. The company?s outsourcing services comprise application maintenance, including custom application, CRM, and ERP maintenance; IT infrastructure outsourcing; and business and knowledge process outsourcing. It offers its services to various markets, such as financial services, healthcare, manufacturing, logistics and retail, hospitality, consumer goods, communications, and high technology, as well as information, media, and entertainment markets. The company markets and sells its services directly through its professional staff, senior management, and direct sales personnel. Cognizant Technology Solutions Corporation was founded in 1998 and is headquartered in Teaneck, New Jersey.

10 Best Stocks To Own For August 2012:MidSouth Bancorp (MSL)

 Midsouth Bancorp, Inc. operates as a bank holding company for MidSouth Bank, N.A. that provides various banking services to commercial and retail customers in south Louisiana and southeast Texas. It offers a range of deposit products and services, including interest-bearing and noninterest-bearing checking accounts, investment accounts, cash management services, and credit cards, as well as electronic banking services comprising remote deposit capturing services. The company?s loan portfolio consists of commercial and industrial loans, commercial real estate loans, loans secured by real estate, and consumer loans. As of December 31, 2010, it provided its banking services through a network of 34 offices and 48 ATMs. The company was founded in 1984 and is headquartered in Lafayette, Louisiana.

10 Best Stocks To Own For August 2012:athenahealth Inc. (ATHN)

 athenahealth, Inc., a business services company, provides ongoing billing, clinical-related, and other related services to medical group practices primarily in the United States. It provides services through the athenaNet, a proprietary Internet-based practice management application. The company primarily offers athenaCollector, a revenue cycle management service that automates and manages billing-related functions for physician practices, and includes a practice management platform. The athenaCollector assists its physician clients with the handling of claims and billing processes to help manage reimbursement. The company also provides Anodyne Analytics, a business intelligence application, which provides physicians and practice managers with insight into practice performance. In addition, it offers athenaClinicals, an electronic health record service that automates and manages medical-record-management-related functions for physician practices, as well as assists medical groups with the handling of physician documentation, orders, and related inbound and outbound communications. Further, the company provides athenaCommunicator that allows practices to manage patient communication tasks electronically, including the use of automated reminder calls; the creation of a self-service patient portal for registration, appointment requests, bill payments, and general communication; automatic generation of emails to patients; and patient education tools. It sells its products through a direct sales force, as well as through channel partners. The company was formerly known as athenahealth.com, Inc. and changed its name to athenahealth, Inc. in November 2000. athenahealth, Inc. was incorporated in 1997 and is headquartered in Watertown, Massachusetts.

10 Best Stocks To Own For August 2012:Opko Health Inc (OPK)

 OPKO Health, Inc., a pharmaceutical and diagnostics company, engages in the discovery, development, and commercialization of novel and proprietary technologies primarily in the United States, Chile, and Mexico. It provides a range of solutions, including molecular diagnostics tests, proprietary pharmaceuticals, and vaccines to diagnose, treat, and prevent neurological disorders, infectious diseases, oncology, and ophthalmologic diseases. The company offers molecular diagnostic platform technology for the rapid identification of molecules or immunobiomarkers; Alzheimer?s test for Alzheimer?s diagnostic; and protein-based influenza vaccines to provide multi-season and multi-strain protection against various influenza virus strains, such as seasonal influenza strains, as well as global influenza pandemic strains which include swine flu, and avian flu. It also offers Oligonucleotide Therapeutics for the treatment of various illnesses, including cancer, heart disease, metabolic disorders, and genetic anomalies; and oligosaccharide for asthma and chronic obstructive pulmonary diseases. In addition, the company provides Rolapitant, a potent and antagonist; neurokinin-1, which has completed Phase II clinical trials for prevention of chemotherapy induced nausea and vomiting, and post-operative induced nausea and vomiting; and SCH 900978 that has completed Phase II clinical trials for chronic cough. Further, it offers bevasiranib, a drug candidate for the treatment of Wet AMD; and develops Aquashunt, a shunt to be used in the treatment of glaucoma. Additionally, the company involves in the development, commercialization, and sale of ophthalmic diagnostic and imaging systems, and instrumentation products. OPKO Health, Inc. was founded in 2006 and is headquartered in Miami, Florida.

Neutral Tandem Shrs Whacked As Q1 Results Come In Light

Neutral Tandem (TNDM), provider of telco interconnection services, posted disappointing Q1 results.

The company reported revenue of $44.8 million and profits of 25 cents a share; the Street had expected $45.5 million and 30 cents. TNDM said that it continues “to face pressures due to competition and the general business conditions facing our customer base.” The company said lower profits reflect increasing network expense, employee expenses professional fees and taxes.” Revenue was up 17.2% from a year ago, but net income was down 6.4%. Adjusted EBITDA was up 7.8% to $20.6 million.

Neutral Tandem said full year results will be toward the low end of previous guidance.

TNDM is down $2.16, or 13.4%, to $13.95.

Could the British General Election's 'Hung Parliament' Lead to a Resurgent U.K. Economy?

In the depths of the Depression-ridden 1930s, two years after a British General Election that yielded a "hung parliament" - came the formation of a coalition government that resulted in one of the strongest decades the British economy has ever enjoyed.

Seventy-nine years later, in the throes of another global downturn - with another "hung parliament" and yesterday's (Tuesday's) resignation of Britain's prime minister paving the way - could history be repeating itself?

Anatomy of a "Hung Parliament"

The British General Election produced a truly knife-edge result. With 326 of 650 Members of Parliament (MPs) needed for a majority, the Conservatives have 306 (with one more almost certainly to come, because one election had been delayed because of a candidate's death), Labour has 258, the Liberal Democrats 57 and minor parties 28. That's brought about a government nobody had considered much before the election - a Conservative-Liberal Democrat coalition. 

Out from the shadows comes the wrongly derided ghost of the last such coalition - the 1931 First National Government.

The British electorate really had to try very hard to get this result. Before the election, when people considered a "hung parliament" with no majority party, they expected a Liberal Democrat-Labour coalition - the two parties are philosophically quite close.

However, in order for a Lib-Lab coalition to be possible, the combined parties would have needed 326 seats, or maybe about 320 (they have some natural allies among the minor parties). As it stands, they can only muster 315 - so a Lib-Lab pact would be short-lived, liable to be outvoted in the House of Commons at any time. Maybe a few extra MPs could be recruited from minor parties like the Scottish nationalists, but such a government would be very unstable - and indeed unpopular, since it would perpetuate the L! abour pa rty in power after it had lost almost 100 seats in the election.

If the Conservatives had got more than about 314 seats, their best alternative would have been a Conservative minority government. They could count on eight Ulster Unionists as allies, while five Sinn Fein MPs never turn up at all (they want Northern Irish independence). Thus, at that level, the Conservatives would be pretty sure of a tiny-but-secure majority, and could carry on for at least a year or so - all the while searching for the most-favorable moment to call another election and gain the extra few seats for an outright majority.

That's what Labour did back in 1974 - the last time the British General Election resulted in a "hung parliament."

So the electorate picked the one result in which a Conservative-Liberal Democrat coalition was possible.

Forgotten Achievements of the National Government

The last such coalition took place in a time of equivalent financial crisis, the autumn of 1931. Then - as now - a Labour government (then a minority government) had increased public spending and run up deficits.

Given the troubled capital markets of that time - remember, we're talking about a period that was only two years removed from Wall Street's "Great Crash," and one in which the global Great Depression was deepening - it was not at all clear that Britain could avoid defaulting on its debts.

The National Government was formed to solve the financial crisis. It took a few top figures from the Labour party, including the prime minister, Ramsay Macdonald. However, its largest non-Conservative base - by far - was 69 MPs from the Liberal party, including two Liberal leaders: Sir John Simon as foreign secretary and Herbert Samuel as home secretary.

The Conservatives, in a large overall majority after the 1931 election, were led by the moderate Stanley Baldwin, but the strongest political figure was the chancellor of the exchequer Nev! ille Cha mberlain.  In other words, if Lib Dem leader Nick Clegg became foreign secretary or home secretary, it was a set-up very like a possible Conservative-Liberal Democrat coalition today.

The National Government acquired a mixed posthumous reputation. In its full form, it lasted only a year, as Home Secretary Samuel resigned over the issue of modest Imperial Preference tariffs in 1932. It then became a largely Conservative government, although it retained several "Liberal National" Cabinet ministers, including Simon.

Its foreign policy was fairly heavily pacifist, with strong support for the ineffectual League of Nations even as Hitler was beginning to rearm - thus it was derided by Winston Churchill's supporters and Labour supporters alike after 1940.

However, its economic policy was remarkably successful. It took Britain off the Gold Standard, devaluing the pound by about 20%.  It cut public spending sharply, reducing public sector pay by 10% and ended the British policy of unilateral free trade, introducing modest tariffs with exemptions for the British Empire.

Starting in 1932 - and lasting until 1937, largely as a result of these policies - Britain enjoyed the highest five-year gross-domestic-product (GDP) growth in its history. New industries - such as automobiles, chemicals and aircraft - energized the economy, as did such new inventions as radar, nylon, and the intellectual underpinnings of the jet engine, the computer and atomic power.

Déjà vu All Over Again?

Relative to other countries, most of which remained in deep depressions, it was Britain's most successful decade of the 20th century - by far: The nation's growth rate during its highly touted Margaret Thatcher era during the 1980s was matched by many other countries and beaten by some.

The National Government was able to take unpopular decisions because of its broad popular support: 67.2% of the voters had supported it in 1931, an! d it was to be re-elected (minus the Samuel Liberals) in 1935 with 53.3% of the vote.

This would be the principal advantage of a Conservative-Liberal Democrat coalition today, which would have 59.1% of the vote, compared with a LibDem-Lab coalition's 52.0%. A Con-LibDem coalition would also have a House of Commons majority of 76 seats.

Provided the two parties entered into a pact with a fixed term of, say, three years, the coalition government would be able to take the tough decisions needed to cut back the public sector and reduce the deficit, without the danger of either losing House of Commons votes or being wiped out in a subsequent election. As in the 1930s, that could produce an economically very successful government.

For the Conservatives, having such a coalition emanate from the British General Election would have advantages in providing them with a chance to govern, which would be offset by the need to grant at least a referendum on changing the electoral system (any likely change would produce fewer firm Conservative majorities and more coalitions).

For the Liberal Democrats, it would have the incalculable value of giving its top people ministerial experience (no Liberal Democrat has sat in government since World War II - a great pity for the country, since Liberals/Liberal Democrats like Jo Grimond and Paddy Ashdown were major talents).

Overall, it would unquestionably provide the best government for the country.

It may not happen. And if it doesn't, it will be a huge missed opportunity for a country that could really use it.

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Best Wall St. Stocks Today: CVS,CMX,ESRX

By Chad Brand of Peridot Capitalist

Pharmacy chain CVS (CVS) has increased its bid for Caremark (CMX) by $4 per share in an attempt to secure the pharmacy benefits manager. Rather than simply raise the per-share amount of its merger offer, CVS has chosen the unconventional route of sweetening its offer by promising a special dividend to Caremark holders should the deal go through. With CVS increasing the proposed special dividend to $6
from $2, their offer is now fairly comparable to the opposing cash and stock offer from rival Express scripts (ESRX).

You may recall I already weighed in on this rare type of deal sweetener in January. I still believe offering a one-time special dividend to CMX holders is more like changing the deal terms from all-stock to cash and stock, since CMX shares will go down after a one-time large dividend is paid.

With the bids more similar now, I would expect Express scripts to raise its offer shortly, perhaps as early as after the close today. They will not go the special dividend route. They want Caremark badly and realize that in order to convince Caremark holders to merge with a main competitor, and not a retail pharmacy, they will have to pay handsomely.

With consultants having already recommended investors reject the prior CVS offer, Express scripts may very well land support for an increased bid, as they know that CVS is being very conservative with their special dividend strategy. All in all, I think Caremark prefers to do a horizontal merger with CVS, rather than a vertical integration with Express scripts, but the offers must be at least comparable for such a move to surviv! e a shar eholder vote.

Full Disclosure: No positions in the companies mentioned

http://www.peridotcapitalist.com/

CNBC: Dance of the Pundits

CNBC threw a couple of widely differing stock views on its Web site today. In the bullish corner, Mizuho Securities chief investment strategist Carmine Grigoli argues the stock rally will continue, according to CNBC, with shares up another 15% to 20% by next summer, as “fundamentals are very favorable.”

But David Wright, money manager at Sierra Core Retirement Fund, and Lee Eugene Munson, CIO at Portfolio Asset Manager, threw cold water on stocks in a double-header, with Wright saying the dollar’s rise is a multi-month trade that he’s buying into, and Munson saying he’s taken money out of Brazil and shipping equities to build a cash position. “The stock market is simply out of fuel,” Wright told CNBC.

DrStockPick.com July 27, 2009, HRAL, CSRH, STDF, CVAT, CRWE, AQNM, EXOU

DrStockPick.com

Dr Stock pick Hot Stock NEWS & Alert!

EXOU, HRAL, CSRH, STDF, CVAT, CRWE, AQNM

 

Today’s Stocks of Interest Are :

  • EXOU Exousia Advanced Materials, Inc (OTC BB: EXOU.OB) Exousia to be Cash Flow Positive in China in July
  • !
  • HRAL, HearAtLast Holdings, Inc. in North America�s Billion Dollar Hearing Market
  • CSRH Consorteum Holdings Inc. (OTCBB: CSRH) My Golf Rewards Canada Inc. to Enter Loyalty and Rewards Industry
  • STDF Steadfast Holdings Group (Other OTC: STDF.PK) Subsidiary Banx and Green Group to Create Green Show
  • CVAT Cavitation Technologies, Inc. (CVAT.OB)Industry Changing Green D+ Plus Technology
  • CRWE Crown Equity Holdings, Inc. (OTC BB: CRWE.OB ) Announces New PR/IR Advertising Division.
  • AQNM Aquentium Inc. (OTC BB: AQNM.OB) Announces Distribution Opportunities of Non-Chemical Mobile Sanitation System for Restaurant Industry

CRWENEWSWIRE.COM July 27, 2009

EXOU, HRAL, CSRH, STDF, CVAT, CRWE, AQNM

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HRAL, HearAtLast Holdings, Inc. in North America�s Billion Dollar Hearing Market

HearAtLast Holdings, Inc. (Pinksheets:HRAL) is a leading provider of suitable affordable solutions to clients with hearing needs in the billion dollar hearing loss market.

With a high concentration of laborers and retirees, the percentage of noise-induced patients is significant and many benefit from Canada�s world leading health care system and workman�s compensation programs. Noise induced hearing loss is recognized as the number one disability facing the North America workforce claims the World Health Organization (WHO; http://www.who.int) at a cost of over 60 billion dollars annually. Even after many years of OSHA-regulated efforts to conserve hearing, and despite the ready availability of hearing protection devices (HPDs), rates of noise-induced hearing loss continue to rise. A recent National Health Interview Survey showed hearing problems among individuals age 45 to 64 up 26 percent over the past 30 years.

Recently, HearAtLast Holdings, Inc announced it will be developing 25 new Hearing Store locations in various markets in the USA and Canada.

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CSRH Consort! eum Hold ings Inc. (OTCBB: CSRH) Consorteum Holdings, Inc. to Introduce My Golf Rewards Program

Consorteum Holdings Inc. (OTCBB: CSRH) announced that My Golf Rewards Canada Inc., a majority-owned subsidiary of Consorteum Holdings Inc., has entered into an agreement with FideliSoft Inc. to provide innovative technology solutions.

My Golf Rewards has established a relationship with Montreal-based firm FideliSoft Inc. to offer a loyalty, rewards and retention program to the North American golfing industry benefiting from FideliSoft�s innovative and robust technology.

Quent Rickerby, President and COO of Consorteum Holdings Inc., said, �We are very pleased to establish this relationship with FideliSoft Inc. Their leading-edge technology will enable us to provide our clients with state-of-the-art loyalty and rewards solutions.�

As previously announced, My Golf Rewards will provide the North American golf industry a new and innovative way to better serve and reward its members, while generating new revenue and profit opportunities within the golf ! course. The program will enable golf courses to market to their members in a more defined and targeted manner.

Marcel Vienneau, FideliSoft�s CEO, commented, �Our focus is to surpass the ROI objectives of each of our clients by providing the very best turnkey (and yet fully customizable) solutions � that�s how we measure our success - to this FideliSoft is extremely excited to be associated with My Golf Rewards.�

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STDF Steadfast Holdings Group, Inc. Subsidiary Banx and Green Group to Create Green Show

Steadfast Holdings Group, Inc. (Pinksheets:STDF), through its Banx and Green Group, Inc. subsidiary, will create an Internet Green Show to be featured on �Totally Green TV� on www.totallygreennetwork.com.

The show will feature the Green Building industry, updates on current company projects and different Green partner companies in a �Spotlight Feature.�

Newly hired Marketing Director Ryan Bowen will oversee the project representing Banx and Green.

Mr. Bowen started his professional life with 14 years as a professional baseball pitcher mainly in the Houston Astros and Florida Marlin organizations. This arena also provided significant access to successful associates in the Dominican Republic and Puerto Rico where the company expects to expand its sales and manufacturing operations.

After retiring from baseball, Mr. Bowen became a successful National Accounts Manager for Network Associates and Software medium where he is credited with having consolidated the network security initiative of numerous private and public companies as well as government agencies with nodes ! up to 8, 000. He went on to work in the banking industry and earned licenses to sell mutual funds, Group 1 Life, Health and Variable Annuities (Series 6, Series 63). Mr. Bowen worked in this capacity for J.P. Morgan Chase and Comerica Bank as a Licensed Personal Banker where he managed a portfolio of business of more than $30,000,000.

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CVAT Cavitation Technologies, Inc. ( CVAT.OB) Industry Changing Green D+ Plus Technology

CVAT Cavitation Technologies, Inc. (CVAT.OB), filed a patent on June 15, 2009 for its chemical free “Green D+ Plus Degumming” (GPD) system for efficient and inexpensive refining of crude vegetable oils. We believe our Green D+ s an industry changing application for the vegetable oil degumming industry.

Our unique Green D+ Plus System offers a green and innovative process that converts crude non-degummed vegetable oils into high quality degummed oils using only water. CTI’s new GPD system is based on its patent pending flow-through Nano Cavitation Reactor technology that promotes the formation, growth, and implosive collapse of gas or vapor-filled bubbles in liquids. The process involves the mixing of crude vegetable oil and water and exposing them to high-pressure impulses and micro explosions at the molecular level. This environmentally friendly technology represents a significant advancement over current process techniques and will save oil mills and refineries a substantial amount of money by reducing the amount of equipment, energy, replacing chemicals and eliminating the need for contaminated water treatment. CTI’s technology increases revenues by improving the quality of lecithin, a by-product derived from the degumming process.

In several tests conducted with Stan Loft, a renowned world expert in the field of! vegetab le oil refining, CTI processed crude vegetable oil with more than 1,300 PPM phosphorus were reduced to less than 17-25 PPM with only the use of water, this is more than an 80% improvement compared to typical hot water degumming that reduces gums to about 200 PPM. Mr. Loft stated, “I have never seen anything like this, it is absolutely amazing and is a significant improvement over existing practices and systems.”

About Cavitation Technologies

Cavitation Technologies, Inc. (CTI); (OTC: CVAT - News); is a “Green-Tech” company, established in 2006 to become a world leader in the development and licensing of new cutting edge technologies for the, biodiesel, vegetable oil refining, renewable fuel, petroleum, water treatment, wastewater sanitation, petroleum, food and beverage, and chemical industries. Our mission is to apply our technology in order to make the world better through renewable energy. For more information please visit our website: www.cavitationtechnologies.com

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CRWE Crown Equity Holdings, Inc. (OTC BB: CRWE.OB ) Announces New PR/IR Advertising Division.

CRWE Crown Equity Holdings, Inc. (OTC BB: CRWE.OB ) Announced its new advertising division CRWE Newswire, which is devoted to handling electronic PR/IR advertising for private and public companies. With the many tools at their disposal such as syndication on over 1000 websites and an additional web presence of up to 10,000 blogs, press releases and email campaign strategies. CRWE Newswire will create an effective advertising campaign maximizing exposure for their clients.

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AQNM Aquentium Inc. (OTC BB: AQNM.OB) Announces Distribution Opportunities of Non-Chemical Mobile Sanitation System for Restaurant Industry

AQNM Aquentium Inc. (OTC BB: AQNM.OB) announced that the company is now accept! ing new distributors for the restaurant industry regarding the company’s new mobile non-chemical sanitation system that eliminates or reduces bacteria and viruses. The Aquentium MOS-1 is designed for use in hospitals, restaurants, hotels, schools and food and beverage processing plants.

�Our MOS-1 system utilizes ozone which replaces the need for chemicals and is the natural way to sanitize surfaces and food products. Ozone gas (O3) can be generated by passing high voltage electricity through oxygenated air, causing oxygen to break apart and recombine in the tri-atomic form,� stated Aquentium President Mark Taggatz.

�We expect that our cost-effective mobile ozone sanitizing system will be of great benefit to both chain and independant restaurant operators,� added Taggatz.

Ozone has a variety of uses in the food, beverage, and hospitality industries. Water containing low concentrations of ozone gas can be sprayed onto equipment, walls or floors to both remove and kill bacteria or other organic matter that may be present. Ozone can also be injected or dissolved in water to provide rinsing or washing of food products such as meat, poultry, seafood, fruits or vegetables.

As an oxidizer, it is 51 times more powerful than chlorine, the oxidizer most commonly used by most food processors, and 3,000 times faster at killing bacteria and other microbes. Ozone is effective as a disinfectant at relatively low concentrations and does not leave toxic by-products similar to those related to chlorination.

Ozone is FDA and USDA approved. Compared to chlorine, ozone offers several advantages for food and beverage processors or anyone who wants to sanitize materials or surfaces. Chlorine has traditionally been the sanitizer of choice in the food processing industry, but experts share a growing concern about the dangerous byproducts such as trihalomethanes or dioxins produced when chlori ne reacts with organic matter in the water. These substances are known carcinogens and are regulated in drinki! ng water by the U.S. Environmental Protection Agency.

While chlorinated wash systems require transport and storage of potentially hazardous toxic chemicals, ozone is unique in that it is generated onsite from oxygen and can be produced on demand with no storage required. When the generator is turned off, there are no dangerous substances on the premises. While the oxidation reduction potential (ORP) of ozone is affected by the amount of organic matter or chemicals in the water, its ORP is not as sensitive to changes in pH as that of chlorine.

Those companies or individuals interested in distributing the Aquentium line of ozone equipment should the company by phone or email.

AQNM Aquentium Inc. (OTC BB: AQNM.OB) is a diversified company with an emphasis on green technologies.

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EXOU Exousia Advanced Materials, Inc (OTC BB: EXOU.OB) Exousia to be Cash Flow Positive in China in July

Exousia Advanced Materials, Inc. (OTC Bulletin Board: EXOU), a manufacturer of advanced industrial coatings for worldwide infrastructure applications and engineered composites for eco-friendly wood substitutes, announces that the company�s wholly owned foreign entity (WOFE), Tianjin Exousia Advanced Materials Company Ltd., expects to be cash flow positive in China by the end of July, 2009.

�Based on the cumulative effect of the additional orders from China United Engineering Corporation, as recently announced, and predicated upon servicing the pending orders for our PowerShield brand coatings from Bohai Shipbuilding and other China based customers, we expect that Exousia will be cash flow positive in China by the end of this month,� explained Mr. Bo! b Roddie , Exousia�s Senior Vice President and CFO

EXOU Exousia Advanced Materials, Inc (OTC BB: EXOU.OB) manufactures advanced resins, engineered particles, high-performance coatings and structural products. Exousia products enhance strength, durability, cost effectiveness and performance for a wide range of manufacturing, commercial and construction applications. The Company serves both domestic and international markets. Additional information on Exousia can be found at http://www.exousiacorp.com.

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Rule 17B requires disclosure of payment for investor relations. Crown Equity Holdings, Inc. (CRWE.OB) has received five thousand shares of free trading stock from a third party for advertising services for Cavitation Technologies, Inc. (CVAT.OB) and an additional twenty-five thousand shares of 144 restricted stock from Cavitation Technologies, Inc. (CVAT.OB) for 12 months of advertisement services. Crown Equity Holdings, Inc. (CRWE.OB) anticipate being compensated one hundred thousand shares of 144 restricted stock from a third party for advertising services for Steadfast Holdings Group Inc, (STDF.PK). Crown Equity Holdings, Inc. (CRWE.OB) anticipate being compensated five thousand dollars from a third party for 30 days of advertisement services for Consorteum Holdings Inc, CSRH.OB. Crown Equity Holdings, Inc. (CRWE.OB) anticipate being compensated five thousand dollars from a third party for 30 days of advertisement services for Exousia Advanced Materials Inc (EXOU.OB). Crown Equity Holdings, Inc.. (CRWE.OB) anticipate being compensated fifty thousand free trading shares from a third party for one week of advertisement services for HEAR ATLAS! T HOLDIN GS HRAL

Pullback to first line of support is where investors should take new positions

The big breakout from a stubborn resistance zone on the S&P 500 affirmed the bull market. But breaks following large percentage runs often use such a high level of energy that the advance falters and profit-takers drive prices back down.

In yesterday’s Daily Market Outlook, we examined the question of how high the S&P 500 can go following such a massive break. Today, we will consider the question of how low it might decline before the breakout is voided.

S&P 500 Chart

Trade of the Day Chart Key

Many double-top (reverse head-and-shoulders) breakouts retrace their advance and fall back, or “correct,” to the breakout line. If this occurs, then the S&P 500′s first line of support is the former resistance line at 1,344 to 1,340. This is the area where sellers gave up and buyers overwhelmed them. But since not all of the buyers got in, this line gives those who missed the initial move up a second chance to get into stocks that they missed earlier.

The bullish support line, which is now at about 1,285, is the line of final support and, thus, the most important feature on the chart. A penetration of the major support line and the low of March at around 1,250 would negate the breakout. The bullish support line and the prior resistance line form a “support zone,” which currently extends from 1,285 to 1,340. And in the middle of the zone is the 50-day moving average, now at 1,318 (blue line), which often holds back potential sellers.

I’ve also included the Moving Average Convergen! ce/Diver gence (MACD) oscillator, which is telling us that the market is somewhat “overbought” but has not rendered a sell signal. It is an internal alert mechanism that says “be careful, stocks at current prices are somewhat expensive and subject to profit-taking.” The MACD would issue an outright sell signal if the red line crossed down through the blue line.

Conclusion: All current chart features are telling us that prices will head higher but that there is some near-term exhaustion. This could bring about a quick correction to the first line of support where we should take new positions.

For one stock to buy now, see the Trade of the Day.

Top 5 Dow Stocks: McDonald's

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