Friday, May 31, 2013

2 Big Questions Remaining on the Xbox One

Microsoft's (NASDAQ: MSFT  ) unveiling of its first new console in seven years has created plenty of buzz. Cool features like voice and gesture control over TV viewing could excite consumers, while the potential for establishing a foothold in the living room that beats Apple (NASDAQ: AAPL  ) to the punch has many Microsoft investors salivating.

But key questions remain about the Xbox One. In the video below, Fool contributor Demitrios Kalogeropoulos highlights two of the biggest: (1) price, and (2) digital rights management.

Demitrios argues that, because the Xbox One comes bundled with the Kinect motion sensor, prices for the console could get too high for many consumers. And a tight digital rights management scheme that regulates the resale of used games might turn off gamers, the console's core audience. Altogether, the details on these two issues could make for a less-than-exciting launch for the device.

It's been a frustrating path for Microsoft investors, who've watched the company fail to capitalize on the incredible growth in mobile over the past decade. However, with the release of its own tablet, along with the widely anticipated Windows 8 operating system, the company is looking to make a splash in this booming market. In a special premium report on Microsoft, a Motley Fool analyst explains that while the opportunity is huge, so are the challenges. The report includes regular updates as key events occur, so make sure to claim a copy of this report now by clicking here.

5 FTSE Dates for Your June Diaries

LONDON -- After a busy month for company results in May, with many reporting for the year or quarter ending 31 March, things are going to be a bit quieter during June. But we're still going to have some important dates for investors, and we'll keep you updated as they come along.

We have already had a quick look at three pieces of news expected next week, so here's a glance at some key dates for the rest of the coming month:

Wednesday June 12, Sainsbury
In May, J. Sainsbury  (LSE: SBRY  ) reported full-year results for the year to 16 March, and they looked good. Telling us of "significant market outperformance," the supermarket chain reported a 6.2% rise in underlying pre-tax profit to 756 million pounds, after sales grew by 4.6%, to 25.6 billion pounds. With performance like this, it's no wonder Sainsbury's shares are up 30% over the past 12 months, to 377 pence.

The results extended a remarkable run to 33 straight quarters, in which Sainsbury's has lifted its like-for-like sales -- will that continue on to 34? We should know on 12 June, when we get a first-quarter trading update. Analysts are positive about the full year, forecasting a 6% rise in earnings per share.

Thursday June 13, Home Retail
Shares in Home Retail  (LSE: HOME  ) , the owner of Argos and Homebase, have doubled over the past 12 months, to 157 pence, even though the company told us of a 10% fall in underlying pre-tax profit when it reported full-year results on 1 May. Weak consumer spending hit B&Q profits, which slumped more than 50%, to just 11 million pounds.

But, on the other hand, the recovery at Argos has been spectacular -- operating profit was up 10%, to 91million pounds, at the division that many people had written off as a has-been. The first rise in earnings per share for years is forecast for February 2014, and we should get an update on how things are going with the firm's first interim statement of the current year on the 13th.

Wednesday June 19, Micro Focus
Shares in Micro Focus International  (LSE: MCRO  ) have had a pretty good year, gaining 55% since this time last year, to 684 pence. And that's down to years of very strong growth and positive forecasts -- with the exception of a flat 2011, earnings have been rising by around 30% or more for the past few years. Earnings growth is expected to fall below that, but analysts are forecasting 4% this year, and 18% next, putting the shares on a price-to-earnings ratio of under 14 for April 2013, falling to 11.5 for 2014.

In its third-quarter update in February, Micro Focus told us that earnings were going to be in-line with market expectations for the full year, so we really shouldn't be getting any surprises.

Thursday June 20, Dixons
It's full-year results time for Dixons Retail  (LSE: DXNS  ) on 20 June, and a trading update released on 16 May told us of a "strong performance across the year," as the company progresses with an impressive turnaround. And that has helped the share price to nearly triple over the past 12 months, to 41.5 pence.

Originally slow to embrace online retailing, Dixons told us that multi-channel like-for-like sales up were 7% for the full year, and 11% for the final quarter. Strong cash generation has enabled Dixons to end the year in a net cash position. Forecasts suggest 9% earnings growth this year, and 75% next year -- and I wouldn't bet against it.

Thursday June 20, Ashtead
The same day will bring us annual results for Ashtead Group  (LSE: AHT  ) , the firm that supplies rental equipment to construction and other businesses in the U.S. and the U.K. And if you want to see a healthy share price growth, look no further -- Ashtead shares are up 180% over the past 12 months, to 640 pence, and have more than six-bagged since August 2011.

There's a 75% rise in earnings forecast for the year to April, and at third-quarter time, everything was up nicely -- revenue up 19%, underlying pre-tax profit up 85%, and underlying earnings per share up 83%.

Finally, if you're looking for top quality investments in the U.K.'s biggest and best companies, which should take you all the way to a comfortable retirement, I recommend the Fool's special new report detailing five blue-chip shares. They'll be familiar names to many, and they've already provided investors with decades of profits.

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Lloyds Raises £3.3bn From U.S. Mortgage Portfolio Sale

Hot Retail Stocks To Buy Right Now

bebe stores (NASDAQ: BEBE  ) continues to outfit its shareholders in cash by maintaining its dividend policy. The company has declared a fresh quarterly distribution of $0.025 per share of its stock, payable on June 20 to shareholders of record as of June 6.��That amount matches the company's preceding disbursement, which was handed out in mid-March.

The retailer has paid that same amount as a regular dividend since September 2009. It dispensed a special payout of $1.00 per share in July the following year.

The current regular dividend annualizes to $0.10 per share. That yields 1.8% at bebe stores' most recent closing stock price of $5.45.

More Expert Advice from The Motley Fool
The Motley Fool's chief investment officer has selected his No. 1 stock for the next year. Find out which stock in our brand-new free report: "The Motley Fool's Top Stock for 2013." I invite you to take a copy, free for a limited time. Just click here to access the report and find out the name of this under-the-radar company.

Hot Retail Stocks To Buy Right Now: CVS Corporation(CVS)

CVS Caremark Corporation operates as a pharmacy services company in the United States. The company?s Pharmacy Services segment provides a range of pharmacy benefit management services, including mail order pharmacy services, specialty pharmacy services, plan design and administration, formulary management, and claims processing; and drug benefits to eligible beneficiaries under the Federal Government?s Medicare Part D program. This segment primarily serves employers, insurance companies, unions, government employee groups, managed care organizations and other sponsors of health benefit plans, and individuals. As of December 31, 2010, it operated 44 retail specialty pharmacy stores, 18 specialty mail order pharmacies, and 4 mail service pharmacies located in 25 states, Puerto Rico, and the District of Columbia. This segment operates business under the CVS Caremark Pharmacy Services, Caremark, CVS Caremark, CarePlus CVS/pharmacy, CarePlus, RxAmerica, Accordant, and TheraCom names. The company?s Retail Pharmacy segment sells prescription drugs, over-the-counter drugs, beauty products and cosmetics, seasonal merchandise, greeting cards, and convenience foods through its pharmacy retail stores and online, as well as offers film and photo finishing, and health care services. This segment operated 7,182 retail drugstores located in 41 states, Puerto Rico, and the District of Columbia; and 560 retail health care clinics in 26 states and the District of Columbia under the MinuteClinic name. It has a strategic alliance with Alere, L.L.C. for the management of disease management program offerings that cover chronic diseases, such as asthma, diabetes, congestive heart failure, and coronary artery disease. CVS Caremark Corporation was founded in 1892 and is based in Woonsocket, Rhode Island.

Hot Retail Stocks To Buy Right Now: Yum! Brands Inc.(YUM)

YUM! Brands, Inc., together with its subsidiaries, operates as a quick service restaurant company in the United States and internationally. It develops, operates, franchises, and licenses a system of restaurants, which prepare, package, and sell various food items, as well as operates Chinese casual dining concept restaurants. The company?s restaurants specialize in chicken, pizza, and Mexican-style food categories. It operates approximately 37,000 restaurants in 110 countries and territories under the KFC, Pizza Hut, and Taco Bell brands, as well as approximately 450 casual dining concept restaurants in China. The company was formerly known as TRICON Global Restaurants, Inc. and changed its name to YUM! Brands, Inc. in May 2002. YUM! Brands, Inc. was founded in 1997 and is headquartered in Louisville, Kentucky.

Advisors' Opinion:
  • [By Brian Gorban]

     Fellow fast food giant Yum! Brands (NYSE: YUM) serves as a nice stock to diversify with one’s McDonald’s holding to take away company specific risk, and it is no slouch in size. Operating three very well-known restaurants (KFC, Pizza Hut, and Taco Bell) that in total comprised an even more impressive 38,000 restaurants as of November 29, 2012 and a market capitalization exceeding $30 billion, investors can feel comfortable that the company will continue to withstand the current economic recession. Add in the fact that the company sports a nice 2% dividend yield and with a very low 34% payout ratio, look for that dividend to continue to be raised.

Top Biotech Companies To Buy Right Now: Starbucks Corporation(SBUX)

Starbucks Corporation purchases and roasts whole bean coffees. It operates approximately 16,858 stores, including 8,833 company-operated stores and 8,025 licensed stores. The company offers approximately 30 blends and single-origin premium arabica coffees. It also provides handcrafted beverages, such as fresh-brewed coffee, hot and iced espresso beverages, coffee and non-coffee blended beverages, Vivanno smoothies, and Tazo teas; and merchandise products, including home espresso machines, coffee brewers and grinders, coffee mugs and accessories, packaged goods, music, books, and gift items. In addition, it offers fresh food items, which comprise baked pastries, sandwiches, salads, oatmeal, yogurt parfaits, and fruit cups. Further, it also provides VIA ready brew coffee, bottled frappuccino beverages, discoveries chilled cup coffee, doubleshot espresso drinks, iced coffee, whole bean coffee, and ice creams. The company?s brand portfolio includes Tazo tea, Ethos water, Seatt le?s Best Coffee, and Torrefazione Italia Coffee. Starbucks Corporation sells its products in approximately 50 countries worldwide. Starbucks Corporation was founded in 1971 and is based in Seattle, Washington.

Advisors' Opinion:
  • [By Michael Fowlkes]

    Starbucks, the gourmet coffee chain, is once again growing. The company closed a great number of locations during the recession, but recently announced that it was going to be opening at least 1,500 new locations over the next five years. The company is quickly growing in Asia, and by the end of next year it plans to have 1,000 locations in China, and close to that number in Japan as well. Fourth quarter earnings came in above expectations, and revenues were $3.36 billion, up from $3.03 billion during the same period last year.

    The recession was tough on Starbucks, as consumers cut back on the expensive coffee, but we are seeing clear signs that they are once again buying. Starbucks has done a good job revamping its menu to keep up with current trends, and recently acquired Teavana, which will allow it to broaden its tea selection and attract a whole new group of customers. All signs are pointing to a strong 2013 for Starbucks.

Hot Retail Stocks To Buy Right Now: AutoZone Inc.(AZO)

AutoZone, Inc. retails and distributes automotive replacement parts and accessories. The company?s stores offer various products for cars, sport utility vehicles, vans, and light trucks, including new and remanufactured automotive hard parts, maintenance items, accessories, and non-automotive products. Its automotive hard parts product line includes A/C compressors, batteries and accessories, belts and hoses, carburetors, chassis, clutches, CV axles, engines, fuel pumps, fuses, ignition, lighting, mufflers, starters and alternators, water pumps, radiators, and thermostats. The company?s maintenance items include antifreeze and windshield washer fluid; brake drums, rotors, shoes, and pads; chemicals, including brake and power; steering fluid, oil, and fuel additives; oil and transmission fluids; oil, air, fuel, and transmission filters; oxygen sensors; paint and accessories; refrigerant and accessories; shock absorbers and struts; spark plugs and wires; and windshield wiper s. Its discretionary product line comprises air fresheners, cell phone accessories, drinks and snacks, floor mats and seat covers, mirrors, performance products, protectants and cleaners, sealants and adhesives, steering wheel covers, stereos and radios, tools, and wash and wax products. The company also offers commercial sales program that provides the delivery of parts and other products to local, regional, and national repair garages, dealers, service stations, and public sector accounts. In addition, it sells the ALLDATA brand automotive diagnostic and repair software through the Website, alldata.com; and automotive hard parts, maintenance items, accessories, and non-automotive products through the Website, autozone.com. As of May 7, 2011, the company operated 4,467 stores in the United States and Puerto Rico, and 261 stores in Mexico. AutoZone, Inc. was founded in 1979 and is based in Memphis, Tennessee.

Advisors' Opinion:
  • [By Curtis Hesler]  

    AutoZone Inc. (NYSE: AZO ) has now been on the Top 5 List for seven consecutive months! and on July 14, AZO broke through its 52-week high. The company also remains remarkably steady in terms of financial health and it receives top marks for buying pressure. Earnings will be released in mid-September and should be impressive. As Americans drive their older cars longer and delay big ticket purchases like new autos, AZO is a good buy.

Nigeria: An Unintended Casualty of the U.S. Shale Revolution

Make no mistake about it: The U.S. shale revolution has fundamentally altered the dynamics of the global oil market. Not only has it boosted U.S. crude oil production to its highest level in more than two decades, but it's also helped reduce U.S. oil imports to their lowest level since 1997.

But the boom in U.S. oil production has other far-reaching consequences, some of them unintended. For instance, it is expected to meaningfully reduce global demand for oil produced by OPEC this year. One member country in particular, has been severely affected: Nigeria. Let's take a closer look.

A primer on Nigerian oil exports
Nigeria is Africa's largest oil-producing country and an important member of OPEC. For decades it has counted the U.S. among its largest and most important customers. At its peak, the West African nation exported roughly 1.6 million barrels per day to the U.S., which would account for nearly a fifth of current U.S. oil imports.  

But since July 2010, Nigerian exports destined for U.S. hubs have plunged by about half, down from more than 1 million barrels per day to just 543,000 barrels per day last October. Meanwhile, exports from another large African oil-exporting nation, Angola, have also seen a precipitous decline, falling from a 2008 average of 513,000 to less than 200,000 barrels per day currently.

The sharp fall-off in these countries' exports to the U.S. is due largely to the type of oil they produce -- light, sweet crude. Because of the U.S. shale boom, domestic production of light oil has surged. And thanks to shipments via new or expanded pipelines, as well as rail and barge, U.S. refiners are gaining greater access to light oil from plays such as North Dakota's Bakken and Texas' Eagle Ford.

For instance, Valero (NYSE: VLO  ) has replaced all imports of light oil with domestic replacements at its Gulf Coast and Memphis refineries, while Phillips 66 (NYSE: PSX  ) recently said that within a couple of years, it aims to use 100% North American crudes at its refineries across the country. That's especially bad news for Nigeria -- a country whose government relies on its energy sector to generate about 75% of federal government revenue.

Nigerian officials concerned about U.S. shale boom
At a February conference in Abuja, the nation's capital city, government officials addressed soaring U.S. oil production and the imminent threat it poses to the nation's export economy. "Shale oil and the increase in their gas production is already affecting our exports to the United States," said Alison Madueke, the Nigerian oil minister.

As a result, Nigeria's government slashed its production target for 2013, from an initial 2.5 million barrels per day to around 2 million barrels per day, as the nation repositions and tries to find alternative export markets. So far, however, it has been met with limited success, at times forcing it to reduce prices for its crude.  

In January, for instance, it was forced to sell cargoes of Qua Iboe crude, one of its benchmark grades, at nearly $0.40 a barrel below the official price, according to analysts at Ecobank. While that may sound paltry, it means the country would lose $380,000 on a typical cargo, according to calculations by The Wall Street Journal.

Oil theft, vandalism, and other issues
In addition, Nigeria has been plagued by attacks on oil infrastructure in the Niger Delta. According to the nation's Petroleum and Natural Gas Senior Staff Association, Nigeria loses an estimated $6 billion annually to crude oil theft. Passing new regulations to overhaul the nation's domestic oil industry, such as tax rate, environmental, and structural reforms, has proved difficult.

The oil theft problem is so grave, in fact, that Italian oil major Eni was forced to suspend its drilling program in southern Nigeria's Bayelsa state. Of the roughly 40,000 barrels of oil per day Eni was pumping out from the site, approximately 60% was lost to theft, leading the company to conclude that its activities in the region were "no longer sustainable."

Some companies -- overwhelmed by the oil thefts, spills, and vandalism that have become commonplace in Nigeria -- have retrenched from their operations in the country, either partially or entirely. For instance, in November, French oil major Total (NYSE: TOT  ) agreed to sell a 20% stake in an offshore Nigerian oil field to Chinese oil giant China Petrochemical (NYSE: SHI  ) , also known as Sinopec, for roughly $2.5 billion. Shortly thereafter, in December, ConocoPhillips (NYSE: COP  ) backed out of its operations in the country, selling its Nigeria unit to Toronto-listed Oando Energy Resources for about $1.79 billion in cash.  

The way forward for Nigeria
One way out for Nigeria is to implement new regulations governing its oil and gas industry that would encourage foreign investment, while ensuring that its citizens also reap some of the benefits of said investment. For years, the nation has planned a thorough overhaul of its oil industry, ranging from tax rate reform to new environmental regulations to altering the structure of its state-owned oil company, yet little has been accomplished.  

Finally, however, it looks like something is being done. A new bill -- the Petroleum Industry Bill -- is currently under discussion in the nation's parliament, though reaching consensus has so far proved very difficult. The bill aims to create new regulatory institutions, amend upstream contractual arrangements, implement a new fiscal regime to promote outside investment while boosting government revenues, deregulate refining, and foster a general sense of transparency in the industry's dealings.  

Some have applauded the bill as a long overdue attempt to correct the glaring inefficiencies in the nation's oil and gas industry. But others have chastised it, arguing that it will result in an evaporation of foreign investment in the country. Mark Ward, head of ExxonMobil's (NYSE: XOM  ) Nigerian unit, said that if the bill is passed, it would make Nigeria one of the harshest investment climates in the world for the oil industry. 

Final thoughts
Though the U.S. shale boom has clearly hurt Nigeria's economy, the resource-rich West African nation's woes are also the result of oil theft, vandalism, and some deeper, more entrenched issues.

Despite its sizable endowments of oil and gas, much of Nigeria's population remains mired in poverty -- a stark reminder of the so-called "resource curse" that afflicts many resource-rich nations, especially in Africa.

Let's hope the parties involved can avoid this curse and reach a solution that won't disproportionately enrich oil companies and a select few government officials at the expense of Nigeria's citizens.

If you're on the lookout for some currently intriguing energy plays, check out The Motley Fool's "3 Stocks for $100 Oil." For free access to this special report, simply click here now.

Thursday, May 30, 2013

How Giant Robots Could Make Time Warner One of the Best Stocks to Buy Now

Facebook Tumbles: Is it Time to Buy?

Mortgage Rates Spike Sharply

A Big Reason to Buy Ford Stock Now

There's no doubt that Ford (NYSE: F  ) has had great success with its turnaround in North America. The company is still losing billions in Europe, but now there are subtle signs that a turnaround is taking hold there as well -- thanks to the same approach that made Ford a winner at home.

In this video, Fool contributor (and Ford shareholder) John Rosevear points out the emerging signs of a Ford revival in Europe -- and explains why that revival is likely to give Ford's stock a big boost in the near future.

A potential turnaround in Europe is just one of several good reasons to think that Ford still has big growth opportunities ahead. We've outlined those opportunities in detail in the Fool's premium Ford research service. If you're looking for some freshly updated guidance to Ford's prospects in coming years, you've come to the right place -- click here to get started now.

Why Websense Shares Popped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Websense (NASDAQ: WBSN  ) were skyrocketing today, up as much as 29% after the web-security specialist agreed to be bought out for $907 million.

So what: Vista Equity Partners offered to take Websense private for $24.75 a share, or the equivalent of $907 million, all in cash. The Websense board said it had explored proposals from several potential acquirers, and the offer represents a 29% premium over Websense's closing price on Friday at $19.23. Websense has been in the process of converting from a web-screening and blocking service to one focused on Internet security.

Now what: Websense's share price today has come within pennies of Vista's offering price, indicating a high level of confidence that the deal will go through as agreed. The deal looks like a win for Websense shareholders, as the stock price is now double nearly what it was last fall. From here the question seems to be what implications the buyout has for other web-service companies.

It's incredible to think just how much of our digital and technological lives are almost entirely shaped and molded by just a handful of companies. Find out "Who Will Win the War Between the 5 Biggest Tech Stocks?" in The Motley Fool's latest free report, which details the knock-down, drag-out battle being waged by the five kings of tech. Click here to keep reading.

Wednesday, May 29, 2013

5 Best Electric Utility Stocks To Invest In 2014

Alcoa (NYSE: AA  ) is opening its coffers to return some money to shareholders. The company declared quarterly dividends for both its common stock and its $3.75 cumulative preferred stock. For the former, Alcoa will distribute $0.03 per share on May 27 to shareholders of record as of May 13. For the latter, $0.9375 will be handed out, and the dates will be July 1 and June 14, respectively.

The common stock payout matches each of the company's previous quarterly disbursements stretching back to May 2009. Prior to that, it paid nearly five times as much -- $0.17 per share.

The current dividend annualizes to $0.12 per share, which yields 1.4% at Alcoa's current stock price of $8.62.

More Expert Advice from The Motley Fool
Materials industries are traditionally known for their high barriers to entry, and the aluminum industry is no exception. Representing 14.7% of 2011 global production in this highly consolidated industry, Alcoa is in prime position to take advantage of growth that some expect will lead to total industry revenue approaching $160B by 2017. Based on this prospective and several other company-specific factors, Alcoa is certainly worth a closer look. For a Foolish investment perspective on this global giant simply click here to get started.

5 Best Electric Utility Stocks To Invest In 2014: Lions Gate Energy Inc (LG.V)

Lions Gate Energy Inc., an exploration stage company, engages in the acquisition, exploration, and development of precious and base metal mineral deposits in Canada. It owns a 100% interest in the El Toro project, a copper-gold-silver property that covers an area of 34,356 hectares in the Omineca mining division of British Columbia. The company was incorporated in 1981 and is based in Vancouver, Canada.

5 Best Electric Utility Stocks To Invest In 2014: MEMSIC Inc.(MEMS)

MEMSIC, Inc. provides semiconductor sensor and system solutions based on integrated micro electro-mechanical systems (MEMS) technology and mixed signal circuit design. It offers sensor products, principally accelerometers. The company?s sensors are used for motion, direction, and pressure sensing applications; and accelerometer products are used to measure tilt, shock, vibration, and acceleration, as well as in various applications, such as mobile phones, automotive safety systems, video projectors, global positioning systems, video gaming systems, interactive toys, inclination sensing, earthquake detection, cardiac pacemakers, and image projectors. Its system solution products include wireless sensors that connect the physical environment with enterprise management and information systems to provide monitoring, automation, and control solutions for a range of industries, as well as inertial systems that provide end-users and systems integrators with MEMS-based solutions for the measurement of static and dynamic motion in a various environments, such as avionics, remotely operated vehicles, agricultural and construction vehicles, automotive test, and wind power turbines. The company also engages in the development of multi-sensor and MCU integrated system products at the integrated circuit level for the consumer and mobile market, as well as at the module level for the industrial, automotive, and general aviation markets. It sells its products directly, as well as through systems integrators, resellers, distributors, and sales representatives worldwide. The company was founded in 1999 and is headquartered in Andover, Massachusetts.

Top 10 Tech Stocks To Own Right Now: DexCom Inc.(DXCM)

DexCom, Inc., a medical device company, focuses on the design, development, and commercialization of continuous glucose monitoring systems for ambulatory use by people with diabetes, and for use by healthcare providers in the hospital for the treatment of both diabetic and non-diabetic patients. The company offers FDA approved SEVEN, which includes a disposable sensor that can be inserted by a patient and used continuously for up to seven days; a transmitter; and a small handheld receiver. Its SEVEN system also received CE Mark approval for commercialization in the European Union and the countries in Asia and Latin America that recognize the CE Mark. The company also provides the SEVEN PLUS, which incorporates additional user interface and algorithm enhancements that are intended to make its glucose monitoring function customizable. Its SEVEN PLUS has FDA and CE Mark approvals. DexCom has a collaboration agreement with Edwards Lifesciences LLC to develop products for conti nuously monitoring blood glucose levels in patients hospitalized for various conditions. It also has development agreement with Insulet Corporation to integrate its continuous glucose monitoring technology into Insulet?s wireless, handheld OmniPod System Personal Diabetes Manager; and a joint development agreement with Animas Corporation to integrate its continuous glucose monitoring technology into Animas insulin pumps. The company was founded in 1999 and is headquartered in San Diego, California.

5 Best Electric Utility Stocks To Invest In 2014: 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/GP RS, 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.

Advisors' Opinion:
  • [By Roberto Pedone]

    Spreadtrum(SPRD) is a fabless semiconductor company that designs, develops and markets baseband processor, radio frequency transceiver and turnkey solutions for the wireless communications and mobile television market. This stock is trading up 10% at $22.85 in recent trading

    Today's Volume: 1.4 million shares.

    Average Volume: 1.5 million shares

    Volume % Change: 88%

    Shares of SPRD are ripping higher today after the company said its revenue may exceed previous forecasts. Spreadtrum said in a statement today that it's on track to meet or exceed its fourth-quarter revenue forecast of $188 million to $194 million.

    From a technical standpoint, SPRD is starting to bounce hard right near its 200-day moving average of $19.42 today on high volume. Market players should now look for the next buy point to trigger if SPRD can sustain a high-volume move and close back above its 50-day moving average of $23.85.

    If we see that action, then look for this stock to re-test some near-term overhead resistance at $27.

5 Best Electric Utility Stocks To Invest In 2014: OncoGenex Pharmaceuticals Inc.(OGXI)

OncoGenex Pharmaceuticals, Inc., a biopharmaceutical company, engages in the development and commercialization of new cancer therapies that address treatment resistance in cancer patients. The company?s clinical stage products include Custirsen, a phase III clinical stage product for treatment in men with metastatic castrate-resistant prostate cancer; OGX-427, which is in phase II clinical development stage is designed to inhibit heat shock protein 27; and SN2310 that completed phase I stage of clinical development is designed to evaluate safety in patients with advanced cancer. Its pre clinical stage products include GX-225 that is focused on reducing the production of IGFBP-2 and IGFBP-5; and CSP-9222, lead compound from a family of caspase activators. OncoGenex Pharmaceuticals, Inc. is based in Bothell, Washington.

5 Best Specialty Retail Stocks To Buy For 2014

This series, brought to you by Yahoo! Finance, looks at which upgrades and downgrades make sense, and which ones investors should act on. Today, our headlines include new buy ratings for a pair of specialty retailers, Coach (NYSE: COH  ) and Aeropostale (NYSE: ARO  ) . Meanwhile in mining, Freeport-McMoRan (NYSE: FCX  ) suffers a downgrade. Let's dive right in, beginning with why...

Coach is fashionable again
The day dawned bright for Coach investors Wednesday, as analysts at CLSA upped their rating to "buy" in response to a strong earnings report featuring 7% first-quarter sales growth and a 10% bump in earnings per share.

In each case, these numbers beat estimates, and analysts were particularly enthused over Coach's 40% jump in sales in China. But does all this mean that you should now follow their advice, and rush out and buy yourself some Coach shares?

5 Best Specialty Retail Stocks To Buy For 2014: Schawk Inc.(SGK)

Schawk, Inc., together with its subsidiaries, provides graphic services and solutions in the Americas, Europe, and the Asia Pacific. The company?s graphic services encompasses a range of creative and executional service offerings, including traditional premedia business services, as well as digital photography, color retouching, large format digital printing, and sales and promotional samples under the Schawk brand name; and digital three-dimensional modeling of prototypes or existing packages for its consumer products clients. Its brand and package strategy and design services include brand consulting and creative design for packaging applications to consumer products companies, food and beverage retailers, and mass merchandisers under the Brandimage and Anthem brands. The company also offers digital promotion and advertising services to the digital communications markets under the Untitled and Real Branding brand names. In addition, it provides software products, such a s graphic lifecycle content management systems comprising digital asset management, workflow management, online proofing, and intelligence performance management modules; and support services, which include implementation, on-site management, validation for regulated environments, and support and training for the marketing services departments of consumer products, pharmaceutical/life sciences, and retail companies. The company serves direct purchasers of graphic services, including end-use consumer product manufacturers of food, beverage, non-food and beverage, and pharmaceutical products; groceries, pharmacies, department, and mass merchant retailers; converters; and advertising agencies. Schawk, Inc. was founded in 1953 and is headquartered in Des Plaines, Illinois.

5 Best Specialty Retail Stocks To Buy For 2014: Ocean Wilson Hdg(OCN.L)

Ocean Wilsons Holdings Limited, through its subsidiaries, provides maritime and logistics services in Brazil. The company offers maritime services, which include harbor and ocean towage, container terminal operation, offshore support, logistics, small vessel construction, and ship agency services. It operates port terminals, which offer assistance in port operations for loading and unloading of vessels, storage, and auxiliary services, as well as provides platform supply vessels to transport equipment and supplies to and from offshore oil and gas installations. The company also provides harbor and ocean towage, salvage support, and maritime support to the offshore oil and gas industry, as well as various logistics services, such as storage, customs storage, distribution, highway transportation, multimodal transportation, and non vessel operating common carrier services. In addition, it operates a ship agency that provides commercial representation, cargo documentation, con tainer control, and vessel support services for ship owners; and holds a portfolio of international investments. The company has operations in Bermuda, Brazil, and the United Kingdom. Ocean Wilsons Holdings Limited is based in Hamilton, Bermuda.

Top 10 Services Companies For 2014: LRAD Corporation(LRAD)

LRAD Corporation engages in the design, development, and commercialization of directed sound technologies and products in North America, Europe, the Middle East, and Asia. The company develops and delivers directed acoustic products that beam, focus, and control sound over short and long distances. It offers Long Range Acoustic Device, which creates directed acoustic beam to communicate at operational ranges in high ambient noise environments, primarily for military applications. The company also provides SoundSaber thin film magnetic speaker technology that provides high clarity throughout the audio range for emergency and mass notification, public address, and other sound applications. Its SoundSaber hardened panels are used in acoustic environments, such as hangar bays, industrial buildings, airports, and other facilities. LRAD Corporation sells its products directly to government, military, large end-users, and defense-related companies. The company was formerly known as American Technology Corporation and changed its name to LRAD Corporation in March 2010. LRAD Corporation was founded in 1980 and is based in San Diego, California.

5 Best Specialty Retail Stocks To Buy For 2014: Ashburton Ventures Inc (ABR.V)

Ashburton Ventures Inc., a junior exploration company, engages in the acquisition, exploration, and development of mineral properties. The company holds various mineral properties prospective for gold, lithium, and silver ores in North America. It principal property includes the Deep Creek property, which consists of approximately 2,000 acres of claims located in Nevada. The company was incorporated in 2006 and is based in Vancouver, Canada.

5 Best Specialty Retail Stocks To Buy For 2014: Sify Technologies Limited(SIFY)

Sify Technologies Limited provides enterprise and consumer Internet services primarily in India. The company offers various corporate network/data services comprising e-commerce and network connectivity solutions, such as end-to-end services network, application, and security services; voice origination and termination services; co-location and managed hosting services; and system integration services for data centre build, hardware distribution, security solutions, and turnkey projects. It also provides application services, including SLEMS and Microsoft Exchange messaging platforms; I-test for online assessment and LiveWire, which enable management of training processes across the organization; document management system for the management of documents electronically; and Forum, a forward supply chain solution. In addition, the company operates e-Ports that offer browsing, chat, email, gaming, utility bill payment, travel ticketing, hotel booking, mobile recharge, Intern et telephony, and online share trading services; and portals, which provide news, views, reviews, interactions, and services in the areas of movies, sports, finance, food, videos, astrology, online games, shopping, and travel, as well as offers content offerings and broadband services. Further, it provides infrastructure management services, such as network management, datacenter and helpdesk outsourcing, desktop and storage outsourcing, IT security outsourcing, LAN and WAN outsourcing, database and telecom outsourcing, and application monitoring and management services to automotive, chemical, media, and financial enterprises; and virtualization design, integration, and deployment services for servers, storage, networks, and end user clients. Sify has approximately 1,278 e-Ports in 200 towns and cities; and serves 1,06,000 broadband subscribers through 1500 cable TV Operators. The company, formerly known as Sify Limited, was founded in 1995 and is based in Chennai, India. Advisors' Opinion:

  • [By Wyatt Research Staff]

    Shares of SIFY skyrocketed last week after the company announced a new partnership with Saudi telecom. SIFY will provide ICT services to the Middle East's largest telecom carrier.

    Shares of the Indian-based internet and network services have doubled over the past four months.

YY Appoints 2 Independent Directors to Board

YY (NASDAQ: YY  ) has added two independent directors to its board of directors. The China-based video social network now has a total of nine directors overseeing the company's strategy and finances.

Of the nine, five directors are listed as "independent," meaning they have no material or pecuniary relationship with the company aside from what they get paid to be on the board. The Nasdaq (as well as the NYSE) requires that the majority of the board be independent. 

Both appointed directors have a history of working in China's technology sector. Richard Weidong Ji has spent his time at Morgan Stanley Asia as a managing director and head of Asia-Pacific Internet/media investment research from 2005-2012. Currently, he is establishing his own technology/consumer investment fund. David Tang also comes from a finance background. He serves as the managing director of Nokia Growth Partners, a venture capital firm specializing in mobile businesses. However, he has worked for the Nokia group in a variety of roles, spanning government relations, strategic partnerships, corporate development, and sustainability. 

Tang has also worked for companies including Apple, AMD, and 3Com. He received his bachelor's degree in computer science and engineering and a master's degree in business from California State University. Meanwhile, Ji earned a Ph.D. in biological science from Harvard University, an MBA from the Wharton School of Business, and a B.S. from Fudan University.

In welcoming the two, Chairman of the Board of YY Jun Lei noted their "extensive knowledge and experience working in the global Internet and technology industries. ... We also believe that the increased independence of our Board further demonstrates our ongoing commitment to strengthening our corporate governance practice."

YY also announced last week that non-independent director Alexander Hartigan has decided to step down from his board post. No reason was given in the press release as to why he left the position after five years.

The appointments have been in effect since May 23.

link

2 of the Best Stocks to Invest In

Since the financial collapse and ensuing stock market crash, we've witnessed one of the greatest bull markets in history. Look at the graph below displaying how the S&P 500 has soared since February 2009.

^SPX Chart

^SPX data by YCharts

Warren Buffet's quote, "Be fearful when others are greedy, and greedy when others are fearful", seems to fit our current situation quite well. With the market sitting near record highs it has some investors so nervous about a potential pullback that it's making them cautious to invest in the market – and that's understandable. But there are always values to be found, and profits to be had. Ford (NYSE: F  ) and General Motors (NYSE: GM  ) are two stocks that have a sustainable and profitable future, and could be two of the best stocks to invest in right now.

Market share
In the first quarter this year, Detroit's Big Three accomplished something that hadn't been done in 20 years – all three gained market share. "The renaissance in Detroit is real," AutoNation CEO Mike Jackson told AutoNews in a telephone interview. "They have fantastic new products, and they're in a very good position to compete."

The good news is that Ford's market share is expected to increase this May compared to last year, according to TrueCar. It forecasts Ford to improve its share in the U.S. from 15.5% to 17.2%, while GM is expected to stay flat at 18.5%. For GM, staying flat is better than losing share, as rival Toyota is forecast to drop from 15.3% to 14.9%.

Leaner operations
Ford's CEO Alan Mulally established his "One Ford" vision and it's paying off big-time. The company is producing more profits than GM, off lower revenue, because it's running so efficiently. The good news for GM is that it's potential isn't as tapped as Ford's right now. It expects to improve operations and significantly boost profits and margins by mid-decade.

Analysts estimate that Detroit automakers are running lean enough to break even or produce slim profits if the U.S. automotive market breaks 10 million units in sales. That's great news, as the previous break-even mark was 16 million units, and the SAAR is standing just above 15 million right now.

Future lineup
Lean operations are a huge reason for excitement with investors, but it gets better. Both companies are having success with new models. Consider that Ford can't make enough Fusions or Escapes to keep its inventories as high as it would like. Plants that produce the Fusion are said to be running at 114% capacity, making each sedan rolling off the line more profitable than the last. Ford is bringing extra capacity to plants next year and is shortening its standard summer shutdown in half. Ford gets it now, and will continue to produce vehicles that strike the right balance of design and value with consumers – a great sign for investors.

GM is a little behind Ford in releasing new vehicles because it needed to shore up its financials first. Finally it's able to dust off the oldest vehicle portfolio in the industry and plans to refresh, replace, or redesign almost 90% of its vehicles by 2016. I expect that to pay off for GM and improve its top and bottom lines drastically. GM also has a leg up on Ford when it comes to its luxury Cadillac line – which brings home higher profit margins than standard cars. Ford's working to turn its Lincoln line to compete in the luxury segment, but it has a lot of progress to make.

Bottom line
Ford and GM seem to have bright futures with their leaner operations and popular new models. Both look to gain market share and are taking full advantage of consumers hitting the showrooms. Investors are happy with improving profits, operations, market share, and vehicles, and the second quarter is shaping up to be just as profitable as the first. Ford and GM have a lot of momentum right now, and seem like two of the best stocks to invest in.

The best investing approach is to choose great companies and stick with them for the long term. The Motley Fool's free report "3 Stocks That Will Help You Retire Rich" names stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of. Click here now to keep reading.

The best investing approach is to choose great companies and stick with them for the long term. The Motley Fool's free report "3 Stocks That Will Help You Retire Rich" names stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of. Click here now to keep reading.

Tuesday, May 28, 2013

Is Sears Just Doomed?

With its stock down nearly 14% on Friday in response to poor earnings, it looks like a lot of investors threw in the towel on Sears Holdings (NASDAQ: SHLD  ) last week -- but not Fool contributor Rich Smith.

He threw in the towel on this stock five years ago, when the company had a chance to remake itself as the Made in the U.S.A. store -- and blew it. Now Wal-Mart's (NYSE: WMT  ) stolen a march on Sears and promised to put $50 billion worth of American-made goods on its shelves over the next 10 years.

For Sears, this looks like the final blow, but it all started with a blown opportunity.

To learn about two retailers with especially good prospects, take a look at The Motley Fool's special free report: "The Death of Wal-Mart: The Real Cash Kings Changing the Face of Retail." In it, you'll see how these two cash kings are able to consistently outperform and how they're planning to ride the waves of retail's changing tide. You can access it by clicking here.

At Least One Defense Market Is Still Growing

10 Best Industrial Disributor Stocks To Buy Right Now

On this day in economic and business history...

Chernobyl.

The word and the place will be forever associated with the dangers of nuclear energy. More than any other event, including America's Three Mile Island, Chernobyl slowed global adoption of nuclear power to a crawl and changed the world's view of nuclear power to one of fear and distrust. But what really happened at this remote Ukrainian nuclear reactor on April 26, 1986? More importantly, could it happen again?

Chernobyl's disaster was set in motion on April 25, during the most ironic situation possible: a safety test. To test the power-regulating and emergency systems, Chernobyl's engineers -- lacking the necessary knowledge of nuclear physics to understand the consequences -- removed control rods (designed to stop catastrophic meltdowns) from one of four nuclear cores while reducing power output to nearly nothing. Their aim was to see whether inertial motion in the reactor turbine would be enough to drive emergency systems.

10 Best Industrial Disributor Stocks To Buy Right Now: Semgroup Corporation(SEMG)

SemGroup Corporation provides gathering, transportation, storage, distribution, blending, marketing, and other midstream services primarily to independent producers, refiners of petroleum products, and other market participants in the Midwest and Rocky Mountain regions of the United States, Canada, and the West Coast of the United Kingdom. It also purchases, stores, and sells natural gas liquids in the United States; provides natural gas gathering and processing services in Canada and the United States; offers refined products and crude oil storage services in the United Kingdom; and purchases, produces, stores, and distributes liquid asphalt cement products in Mexico. The company owns, contracts, and leases various pipelines, gathering systems, storage facilities, terminals, processing plants, blending facilities, and other distribution assets. It operates approximately 1,400 miles of natural gas transportation, gathering, and distribution pipelines in Kansas, Oklahoma, T exas and Alberta, Canada. The company was founded in 2000 and is headquartered in Tulsa, Oklahoma.

10 Best Industrial Disributor Stocks To Buy Right Now: Yum! Brands Inc.(YUM)

YUM! Brands, Inc., together with its subsidiaries, operates as a quick service restaurant company in the United States and internationally. It develops, operates, franchises, and licenses a system of restaurants, which prepare, package, and sell various food items, as well as operates Chinese casual dining concept restaurants. The company?s restaurants specialize in chicken, pizza, and Mexican-style food categories. It operates approximately 37,000 restaurants in 110 countries and territories under the KFC, Pizza Hut, and Taco Bell brands, as well as approximately 450 casual dining concept restaurants in China. The company was formerly known as TRICON Global Restaurants, Inc. and changed its name to YUM! Brands, Inc. in May 2002. YUM! Brands, Inc. was founded in 1997 and is headquartered in Louisville, Kentucky.

Advisors' Opinion:
  • [By Brian Gorban]

     Fellow fast food giant Yum! Brands (NYSE: YUM) serves as a nice stock to diversify with one’s McDonald’s holding to take away company specific risk, and it is no slouch in size. Operating three very well-known restaurants (KFC, Pizza Hut, and Taco Bell) that in total comprised an even more impressive 38,000 restaurants as of November 29, 2012 and a market capitalization exceeding $30 billion, investors can feel comfortable that the company will continue to withstand the current economic recession. Add in the fact that the company sports a nice 2% dividend yield and with a very low 34% payout ratio, look for that dividend to continue to be raised.

Top Biotech Companies To Buy Right Now: FTI Consulting Inc. (FCN)

FTI Consulting, Inc. operates as a business advisory firm enabling organizations to protect enterprise values in complex legal, regulatory, and economic environments worldwide. Its corporate finance/restructuring service offerings include restructuring/turnaround, bankruptcy support, transaction advisory, private equity, performance improvement, interim management, and investment banking services; and economic consulting service offerings comprise business valuation, intellectual property, international arbitration, labor and employment, public policy, securities litigation and risk management, antitrust and competition economics, and regulated industries. The company offers forensic and litigation consulting services, including forensic accounting and advisory services, financial and enterprise data analytics, global risk and investigations practice, intellectual property, dispute advisory services, trial services, and compliance, monitoring, and receivership; and strateg ic communications services, such as financial communications, strategy consulting and research, corporate communications, public affairs, and creative engagement. It also provides technology services consisting of computer forensics and investigations, e-discovery software and services, and discovery consulting services. The company services clients in various industries, including aerospace and defense, agriculture, automotive, banking and financial services, construction, energy and utilities, environmental, government and public contracts, healthcare, hospitality, gaming and leisure, information technology, insurance, media and entertainment, mining, petroleum and chemicals, pharmaceutical and life sciences, real estate, retail, telecommunications, and transportation. FTI Consulting, Inc. was founded in 1982 and is based in West Palm Beach, Florida.

10 Best Industrial Disributor Stocks To Buy Right Now: Cornerstone OnDemand Inc.(CSOD)

Cornerstone OnDemand, Inc. provides learning and talent management solution delivered as software-as-a-service. The company offers three integrated cloud-based solutions for learning management, performance management, and extended enterprise. Its Cornerstone Learning Cloud helps clients deliver and manage enterprise training and development programs, as well as links employee development to other parts of the talent management lifecycle, including performance management and succession planning. The company?s Cornerstone Performance Cloud allows clients to direct and measure performance at the individual, departmental, and organizational level through competency management, organizational goal setting, performance appraisal, compensation management, and development planning. Its Cornerstone Extended Enterprise Cloud helps clients extend learning and talent management to their customers, vendors, and distributors. The company also offers consulting services comprising impl ementation, integration, content, business consulting, and educational services; and account services, as well as resells third-party e-learning content. Its clients include multi-national corporations, large domestic enterprises, mid-market companies, public sector organizations, higher education institutions, and non-profit entities. The company sells its solution and services directly through its own sales force in North America and Europe; and indirectly through domestic and international network of distributors. Cornerstone OnDemand, Inc. was founded in 1999 and is headquartered in Santa Monica, California.

10 Best Industrial Disributor Stocks To Buy Right Now: Nathan's Famous Inc.(NATH)

Nathan's Famous, Inc. operates in the foodservice industry. It engages in marketing Nathan?s Famous brand, and selling products bearing the Nathan?s Famous trademarks through various channels of distribution in the United States and internationally. The company operates and franchises quick-service restaurant units that features Nathan?s beef hot dogs, crinkle-cut french-fries, and other menu offerings under the Nathan?s Famous brand name. It also provides licensing agreements for the sale of Nathan?s products within supermarkets, club stores, and other grocery-type outlets; and involves in the manufacture of spices, and sale of Nathan?s products directly to other foodservice operators. In addition, the company offers Arthur Treacher?s brand fish fillets. As of August 3, 2011, its restaurant system consisted of 269 Nathan?s units, including 264 franchised units and 5 company-owned units (including 1 seasonal unit). The company was founded in 1916 and is based in Je richo, New York.

10 Best Industrial Disributor Stocks To Buy Right Now: Key Tronic Corporation(KTCC)

Key Tronic Corporation, doing business as KeyTronicEMS Co., together with its subsidiaries, provides electronic manufacturing services (EMS) to original equipment manufacturers primarily in the United States, Mexico, and China. Its EMS services include product design, surface mount technologies for printed circuit board assembly, tool making, precision plastic molding, liquid injection molding, automated tape winding, prototype design, and full product builds. The company also manufactures keyboards and other input devices for personal computers. Key Tronic markets its products and services primarily through its direct sales department aided by field sales people and distributors. The company was founded in 1968 and is headquartered in Spokane Valley, Washington.

10 Best Industrial Disributor Stocks To Buy Right Now: PIMCO California Municipal Income Fund(PCQ)

PIMCO California Municipal Income Fund is a close ended fixed income mutual fund launched and managed by Allianz Global Investors Fund Management LLC. It is co-managed by Pacific Investment Management Company LLC. The fund invests in fixed income markets. It invests primarily in municipal bonds. PIMCO California Municipal Income Fund was founded in 2001 and is based in New York.

10 Best Industrial Disributor Stocks To Buy Right Now: BRITANNIC GROUP gbp0.05(RSL.L)

Resolution Limited engages in life assurance business in the United Kingdom and internationally. It offers various protection products, including life cover, critical illness cover, income protection, and business protection. The company also provides investment and savings consisting of wealth solutions bond, a lump sum investment with a wide choice of funds; and protected investment portfolio bond that allows investing in a range of funds, as well as offers a guaranteed minimum payment on death. In addition, it provides individual personal pension, individual stakeholder pension, and online stakeholder pension that offer a tax efficient way of saving for retirement; and corporate pensions. Further, the company offers various solutions for inheritance tax planning, such as making a will, making gifts, and trusts; and annuities. Additionally, it provides life assurance-based tax and estate planning solutions for high and ultra-high net worth individuals. The company offers its products through employee benefit consultants, consulting actuaries, independent financial advisers or distribution agreements, strategic partnerships, and relationships with private banks and specialist advisors. The company was founded in 1832 and is based in St Peter Port, the Channel Islands.

10 Best Industrial Disributor Stocks To Buy Right Now: El En(ELN.MI)

El.En S.p.A., through its subsidiaries, engages in the research, development, manufacture, distribution, and sale of laser systems in Europe and internationally. It offers laser systems for medical applications, including aesthetics, surgical, physiotherapy, dermatology, surgery, cosmetics, dentistry, and gynaecology. The company also provides laser systems for industrial applications, such as cutting, marking, and welding of metals, wood, plastic, and glass, as well as in the decoration of leather and fabric, and the conservative restoration of works of art; and systems for scientific applications and research. In addition, it offers after-sales service, including support for the installation and maintenance of its laser systems; and spare parts, consumables, and technical assistance services. The company sells its products through its subsidiaries, as well as through a network of distributors. El.En S.p.A. was founded in 1981 and is headquartered in Calenzano, Italy.

10 Best Industrial Disributor Stocks To Buy Right Now: TII Network Technologies Inc.(TIII)

Tii Network Technologies, Inc., together with its subsidiaries, designs, manufactures, and sells products for use in the networks to service providers in the communications industry in the United States. It provides network interface devices (NID), including overvoltage surge protectors, digital subscriber line (DSL) service splitters, and customer bridge modules; building entrance terminals; and accessories comprising station protectors, customer wiring modules, electro-magnetic interference filters, and line test modules. The company also offers broadband products, such as DSL electronic products that include xDSL plain old telephone service splitters to isolate voice and data signals; Outrigger, an outdoor intelligent residential gateway; HomePlug technology that enables networking of voice, data, and audio devices through the consumers? AC power lines. In addition, it provides connectivity products consisting of connector block and terminal block products; voice over I nternet protocol products; switchable voice NID products; voice intercom systems for use in multi-dwelling units; and wire terminals and other connectivity products. Further, the company offers fiber optic products which comprise wall mount enclosures, rack mount enclosures, OSP fiber enclosures, cable assemblies, miscellaneous fiber accessories, and optic network terminals installation accessories. Additionally, it offers overvoltage surge protection products, including two and three electrode gas tubes; station overvoltage surge protectors; protector modules; and protector packs and cat 5 cat 6 protection products, as well as other surge protection products comprising a 75 ohm coaxial protector for cable networks; a 50-ohm coaxial protector for wireless service providers? cell sites; a gel-sealed Ethernet data protector; and power line/data line protectors for personal computers and home entertainment systems. The company was founded in 1964 and is headquartered in Edgewoo d, New York.

Advisors' Opinion:
  • [By John Reese]

    Tii Network Technologies (NASDAQ: TIII) helps protect expensive telecom equipment with its overvoltage surge protection devices. This is especially useful during lightning strikes and power surges. Its Total Failsafe products offer modular station protectors, while its In-Line products protect broadband coaxial cables.

    Naturally, large telecom carriers like Verizon Communications (NYSE: VZ) are big customers and account for 34% of sales. DIRECTV (NASDAQ: DTV), Power & Telephone Supply and Tyco Electronics (NYSE: TEL) are also customers. With Verizon and other cell phone providers upgrading to 4G, Tii’s sales should remain very strong.

    The stock is a good buy, but it is thinly traded, so use a limit order within 10 cents of the previous day’s closing price. Buy TIII under $3.

How Joy Global Will Survive Commodities' Plunge

On Thursday, Joy Global (NYSE: JOY  ) will release its latest quarterly results. After peaking in 2011, the company has seen its stock lose nearly half its value amid the weakening macroeconomic environment, especially in key markets like China.

More recently, April's crash in gold prices has led to calls that the commodity supercycle might finally be turning downward. If true, that could plunge the mining industry into a long-term decline and threaten sales of mining equipment for years. Let's take an early look at what's been happening with Joy Global over the past quarter and what we're likely to see in its quarterly report.

Stats on Joy Global

Analyst EPS Estimate

$1.57

Change From Year-Ago EPS

(23%)

Revenue Estimate

$1.28 billion

Change From Year-Ago Revenue

(17%)

Earnings Beats in Past 4 Quarters

3

Source: Yahoo! Finance.

Will Joy Global's earnings bring investors any joy this quarter?
In light of recent events, analysts haven't been all that optimistic about Joy's earnings prospects over the past several months, with cuts of $0.06 per share to their April-quarter estimates as well as reductions for the fiscal 2013 and 2014 years. The stock has performed pretty badly, losing more than 11% since late February.

Early in the quarter, things were beginning to look up for Joy Global. In its previous quarterly report, Joy said that conditions in the commodity markets looked like they were starting to improve, especially in the coal market, where rising natural gas prices were finally helping to support demand.

But sales trends remain abysmal in many parts of the market, especially in the former growth hot-spot of the Asia-Pacific region. Rival Caterpillar (NYSE: CAT  ) has seen sales in the region swing from year-over-year gains as recently as November to declines of 20% or more in each of the past three months. Latin America has been a bright spot for Caterpillar, but otherwise, the rest of the world has seen a substantial slowdown, with overall sales down 13% in April.

Moreover, the big drop in commodities prices in April will almost certainly weigh even further on mining-company demand for equipment in the future. With dramatically lower profit margins possible, especially among some miners with high cost structures, capital budgets could see further cuts and reduce sales further for Joy, Caterpillar, and other mining-equipment makers.

One interesting side-note is whether the drop in Joy's stock will lead to further speculation about its being a takeover target. Ever since last year, General Electric (NYSE: GE  ) has been named as a potential buyer of Joy Global in GE's efforts to boost its own presence in the mining-equipment industry.

In Joy's quarterly report, watch to see whether future CEO Edward Doheny starts to assume his new leadership role on the conference call. With current CEO Michael Sutherlin formally retiring next February, it'll be essential for Joy to establish a smooth transfer of power given the tough times facing the company.

Joy Global is a substantial player in mining equipment, but Caterpillar is the market share leader in an industry in which size matters, and its quality products, extensive service network, and unparalleled brand strength combine to give it solid competitive advantages. Read all about Caterpillar's strengths and weaknesses in The Motley Fool's brand-new report. Just click here to access it now.

Click here to add Joy Global to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.

Will AutoZone's Stock Keep Driving Higher?

On Tuesday, AutoZone (NYSE: AZO  ) will release its latest quarterly results. The key to making smart investment decisions on stocks reporting earnings is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed knee-jerk reaction to news that turns out to be exactly the wrong move.

AutoZone has benefited greatly from the trend among car owners to hang onto their used vehicles longer, accepting the higher maintenance costs involved with keeping older cars running rather than having to face sticker shock from a new-vehicle purchase. As new car sales start to rebound, though, will the auto-parts retailer start to see its business go in the other direction? Let's take an early look at what's been happening with AutoZone over the past quarter and what we're likely to see in its quarterly report.

Stats on AutoZone

Analyst EPS Estimate

$7.23

Change From Year-Ago EPS

15.1%

Revenue Estimate

$2.22 billion

Change From Year-Ago Revenue

5%

Earnings Beats in Past 4 Quarters

4

Source: Yahoo! Finance.

How will AutoZone's earnings fare this quarter?
Analysts have very narrowly cut their estimates on AutoZone's earnings in recent months, with a $0.03 per share reduction in its just-ended quarter and an even smaller $0.02 per share drop for the full 2013 fiscal year. The stock, though, has continued to rise, with an 8% gain since mid-February.

Like many auto-parts retailers, AutoZone has traditionally seen its fortunes linked to the state of the economy, as better economic times lead more car owners to buy new vehicles rather than spending money on replacement parts. With auto sales having rebounded lately, that trend played out in AutoZone's last quarter, in which the company posted same-store sales declines of 1.8%.

But there are signs that the prospects for AutoZone might be improving. The company blamed delayed tax refunds for part of its challenges last quarter, raising the possibility that anticipated revenue might simply shift into the just-ended quarter. Given AutoZone's focus on selling to do-it-yourself car owners, its sensitivity to personal financial issues is higher than many of its peers that focus more on the commercial parts market.

Still, competition is looking fiercer than ever. O'Reilly Automotive (NASDAQ: ORLY  ) reported recently that it has expanded its sales to auto-repair professionals, and despite a modest 0.6% jump in same-store sales for the company, it expects better results in the current quarter. Even though AutoZone has better margins, retailers Advance Auto Parts (NYSE: AAP  ) and Pep Boys (NYSE: PBY  ) have each taken steps to implement cost-cutting measures and reduce their overhead in order to bolster their own profitability.

In AutoZone's report, look for management to explain whether delayed tax refunds turned into better sales for the company this quarter. If the company doesn't post the improvement that O'Reilly saw, it could be a warning sign that AutoZone's recent share-price gains could reverse themselves in the near future.

The best investing approach is to choose great companies and stick with them for the long term. The Motley Fool's free report "3 Stocks That Will Help You Retire Rich" names stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of. Click here now to keep reading.

Click here to add AutoZone to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.

Monday, May 27, 2013

Hot India Stocks To Invest In 2014

Monsanto (NYSE: MON  ) has chalked up another one in the win column as it continues to wage its legal battle to protect its intellectual property rights. This time, the company emerged victorious in a case against a single farmer in Indiana. However, the fact that it involved only one defendant doesn't minimize the implications of this case.

In this most recent court ruling, the U.S. Supreme Court ruled that Monsanto's patents enable it to prevent farmers from planting later generations of its seeds without first paying for those seeds. This is real break from the historical norm where in crops that were planted left the farmer with the ability to replicate them by saving and replanting the seeds the crops�produced. Now, if those crops originated from Monsanto seeds this is no longer the case as farmers must pay Monsanto for those seeds.

Hot India Stocks To Invest In 2014: (OFSS.NS)

Oracle Financial Services Software Limited, together with its subsidiaries, provides information technology (IT) solutions and knowledge processing services to the financial services industry worldwide. The company offers Oracle FLEXCUBE, a banking product suite for consumer, corporate, investment, mobile and Internet banking, consumer lending, asset management, and investor servicing, including payments. Its products comprise Oracle FLEXCUBE Enterprise Limits and Collateral Management, which enables centralized collateral management, limits definition, tracking, and exposure measurement; Oracle FLEXCUBE Private Banking solution that offers a wealth management portal, a customer interaction tool, and portfolio management capabilities for private banking; and Oracle FLEXCUBE Investor Servicing, a process enabled transfer agency and investor servicing solution. The company also offers Oracle Financial Services Analytical Applications for enterprise risk, performance manageme nt, regulatory compliance, and customer insight; consulting services in the areas of business transformation, risk and compliance, program management, IT architecture, IT governance, and process improvement; and application services for banking, securities, and insurance. In addition, it provides technology services comprising conceptualization, design, evaluation, implementation, and management of IT infrastructure for financial institutions; business process outsourcing services ranging from back office work to contact centre services for the banking, capital markets, insurance, and asset management domains; and support services. The company was formerly known as i-flex Solutions Limited and changed its name to Oracle Financial Services Software Limited in August 2008. The company was incorporated in 1989 and is based in Mumbai, India. Oracle Financial Services Software Limited is a subsidiary of Oracle Global (Mauritius) Limited.

Advisors' Opinion:
  • [By Goodwin]

    The resurgence of the US will bring back big-time technology spending and Indian companies stand to gain. However, mainstream software services companies are highly priced. Oracle Fin is one of the few tech stocks that still have some headroom for appreciation.  When US banks invest in technology to comply with new regulations, Oracle will rake in the moolah. 

Hot India Stocks To Invest In 2014: 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 ac cessibility 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 i n Bengaluru, India.

Advisors' Opinion:
  • [By Admin]

    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.

Top China Stocks For 2014: Tata Motors Ltd(TTM)

Tata Motors Limited, an automobile company, engages in the manufacture and sale of commercial and passenger vehicles primarily in India. The company offers cars, utility vehicles, trucks, buses and coaches, and defense vehicles, as well as develops electric and hybrid vehicles for personal and public transportation. It also involves in distributing and marketing cars; and financing the vehicles sold by the company. In addition, the company engages in the provision of engineering and automotive solutions, as well as machine tools and factory automation solutions; construction equipment manufacturing; automotive vehicle components manufacturing and supply chain activities; tooling and plastic and electronic components for automotive and computer applications; and automotive retailing and service operations. It offers its products and services through its dealership, sales, services, and spare parts network. The company also markets its commercial and passenger vehicles in Eu rope, Africa, the Middle East, South East Asia, South Asia, and South America. The company was formerly known as Tata Engineering and Locomotive Company Limited and changed its name to Tata Motors Limited in July 2003. Tata Motors Limited was founded in 1945 and is based in Mumbai, India.

Advisors' Opinion:
  • [By Fool]

    Take a closer look at the full table. The average price to earnings ratio (P/E ratio) amounts to 17.35 while the forward price to earnings ratio is 10.13. The dividend yield has a value of 3.28 percent. Price to book ratio is 2.81 and price to sales ratio 2.93. The operating margin amounts to 22.48 percent.

Hot India Stocks To Invest In 2014: (COROMANDE.NS)

Coromandel International Limited engages in manufacturing and marketing fertilizers, specialty nutrients, and crop protection products primarily in India. The company?s products include phosphatic fertilizers; insecticides, fungicides, herbicides, and plant growth regulators; and bentonite sulphur, water soluble fertilizers, micronutrients, and organic fertilizers. It offers its products under the Gromor, Paramfos, Parry Gold, Parry Super, and Godavari brand names. The company also operates 443 retail centers in rural Andhra Pradesh and Karnataka that provide agri inputs, such as fertilizers, crop protection products, secondary and micronutrients, seeds, sprayers, mechanized farm services, and veterinary feed, as well as soil testing for nutrients, field visits for crop diagnosis, and technical advice. Its retail centers also offer lifestyle products, fast moving consumer goods, apparel, footwear, consumer durables, general merchandise, home furnishings, accessories, lugga ge, stationary, books, and toys. The company was formerly known as Coromandel Fertilisers Limited and changed its name to Coromandel International Limited in September 2009. The company is based in Secunderabad, India. Coromandel International Limited is a subsidiary of E.I.D Parry (India) Limited.

Advisors' Opinion:
  • [By Curtis Hesler]

    At a growth rate of 4-5 percent, agriculture is expected to play a crucial role in GDP growth in the coming year. Indian farmers have begun to invest handsomely in improving yields and Coromandel has positioned itself as a complete farm inputs company. While the company has a strong franchise in fertilizers, it is the new businesses such as speciality nutrients that will be the key growth driver. This new revenue stream now accounts for 10 percent of sales, but is seeing a 40 percent annual growth rate. The profit margins are about three times that of the fertilizer business at 10-12 percent.

Ford's Pickups Drive Big Profits

Ford's F-150 and its heavy-duty siblings aren't just America's best-sellers; they may be Ford's biggest profit generators. Photo credit: Ford Motor Co.

Ford (NYSE: F  ) posted a first-quarter profit of $1.6 billion on Wednesday, a good result that was better than Wall Street expected. That profit was driven by very strong earnings in the company's North American division. Ford North America is hitting on all cylinders right now, as recent models like the Fusion and Escape are doing very well with buyers.

But as always with Ford, its F-Series pickups are a big part of the story.

Ford's cars are better than ever, but its pickups might still be its most important products
In the U.S., Ford sells more of its F-Series pickups -- the popular F-150 and its heavier-duty siblings -- than any other vehicle. In fact, it's the best-selling vehicle in America and has been for decades.

Lots of people will tell you that Ford builds a good truck. And while its No. 1 sales ranking occasionally benefits from rival General Motors' (NYSE: GM  ) insistence on splitting its full-sized pickup sales between the Chevrolet and GMC brands, there's no doubt that it's an exceptionally popular and successful product.

What is somewhat less well known is that it's a very profitable product as well. Some of that profit comes from sheer numbers: Ford sold 168,843 F-Series pickups in the U.S. in the first quarter of 2013, a 17.4% increase over the first quarter of last year. That's almost as many sales as all of Ford's popular SUVs managed -- when added together.

But it's also true that pickups in general have very good profit margins. Ford's exact profit per pickup sold is a closely guarded secret. But there's little doubt that it's good: One leading Wall Street analyst said last year that the F-Series might represent as much as 90% of Ford's global profit.

Ford made $2.4 billion in North America in the first quarter. (Ford's total profit was lower because of losses and spending overseas, where Ford is still restructuring and expanding.) Clearly, a lot of those dollars came from pickup sales.

But here's the interesting thing about Ford: As good as that North America profit number was -- and it was Ford's best in more than a decade -- it could have been even higher.

Investing more of Ford's profits for future growth
Ford's North American profit was very strong, and its profit margin was also very good at 11%, a big number for a mass-market automaker. But some analysts had expected a slightly higher profit, and a slightly higher margin -- in part because of Ford's strong pickup sales.

Ford could have arranged to post a higher profit. But its costs were up in the quarter, because the company is plowing more of its money into developing new vehicles.

Ford CEO Alan Mulally is in the midst of a multiyear push to build more vehicles off shared architectures, or "platforms," an approach that improves quality while reducing costs. This year, Ford aims to build more than 85% of its vehicles using just its nine global platforms.

Getting that number closer to 100% will improve Ford's financial performance -- and it could improve quality as well. But that takes considerable investment, and Ford is making those investments now.

Ford is also investing heavily in development of the next F-Series, due next year. Given the importance of the pickup line to Ford, it's a safe bet that the upcoming new version is being lavished with attention right now as the company works to finish it up and put it into production.

With new pickups coming shortly from GM and Toyota, and Chrysler's Ram having received an update recently, the F-Series is facing ever-stiffer competition. Expect Ford to spare no effort (or expense) in making sure that the next F-Series is its best ever.

Thinking about buying Ford stock?
Ford's turnaround has been one for the history books. But there's good reason to think that the Blue Oval still has big growth opportunities ahead -- opportunities that could add billions to Ford's bottom line in coming years. We've outlined those opportunities in detail, in the Fool's premium Ford research service. If you're looking for some freshly updated guidance to Ford's prospects in coming years, you've come to the right place -- click here to get started now.

GM's Latest Overhaul Moves Forward

General Motors (NYSE: GM  ) unveiled a brand-new $130 million "enterprise data center" in Michigan this week. That may not sound like a big deal, but it's one key part of a massive change in the way GM does business -- one that could result in better cars and bigger profits.

In this video, Fool contributor John Rosevear explains the big story behind this new data center -- and why it's a huge step into the future for GM.

Few companies lead to such strong feelings as General Motors. But while many have shunned GM out of anger over its bailout, new management is quietly turning the battered old General into a gleaming global powerhouse. The Fool's premium GM research service has all the details of GM's post-bankruptcy transformation -- and advice on how best to profit from the General's ongoing overhaul. Just click here to get started now.

How Long Should You Hold Your Stocks?

The ink is barely dry, but a recent quote from my fellow Fool Morgan Housel is already one of my favorites:

Not a single investor in today's market practicing legitimate buy and hold in a low-cost index fund has ever lost money. Not one.

This comment is insightful, and humbling, yet it should almost be obvious. History has shown that those who attempt to dance in and out of the market are repeatedly burned and often lose money or miss bull markets. But it's important to recognize the difference between those who choose to sell their holdings because of fear or greed and those who need to sell to buy a house or pay for college.

Investing vs. saving
At its core, the main purpose of investing, as opposed to strictly saving, is to grow one's funds and hopefully achieve a reasonable return, which can then be used to increase one's standard of living.

While Morgan's point that anyone who has purchased a low-cost S&P index fund and never sold it hasn't lost money is fascinating, it may not be realistic or applicable for many investors. Some investors are wealthy enough to never sell and to pass their investments on to their heirs, but most need to liquidate holdings to fund their lives at some point in time.

So how long should investors hold on before selling to give themselves the best odds for success?

What gives me the best odds?

Let's go back in time to 1950 and implement a five-year holding-period strategy, assuming low-cost index funds were available back then. In our example, an investor buys a S&P 500 index on the first trading day of 1950 and sells it on the first trading day of 1955. At the end of the holding period, the S&P 500 has increased in price 121%, excluding dividends.

Now, let's repeat that example every day and assume someone buys the same index fund on the second trading day of 1950, or third, or fourth, ad infinitum, and always holds it for five years and then sells. The last hypothetical purchase would be in May 2008.

This scenario gives us 14,691 days of unique returns. If an investor was strictly practicing our five-year holding period strategy, he or she would have experienced a capital loss 2,879 times, or 19.6%. Those are pretty good odds, but far from bulletproof.

Holding for 10 years
Let's try a 10-year holding period strategy with the same index fund with purchases starting on the first trading day in 1950 and then on the second, or third, or fourth, ad infinitum, and always holding it for 10 years and then selling. The last hypothetical purchase would be in May 2003.

Here, we have unique returns for 13,431 days. If an investor was strictly practicing our 10-year holding period strategy, he or she would have experienced a capital loss 1,176 times, or just 8.8%.

Let's go a little longer
Key takeaways so far: Holding on another five years or starting five years earlier in the past have significantly pushed the odds in your favor. In regard to starting earlier, for those who have 20, 30, 40 years of investing ahead of them, the future looks even brighter.

Using the same example, now using a 20-year holding period, we get a sample size of 10,688 days. Number of times that investors would have experienced a capital loss: 0 days. Zero.

So what? What will the next 20 years look like?
Are these results from a time of essentially continuous growth in the United States and the modernization of the stock market? Yes. Are future returns guaranteed to look similar? No. Does anyone really know? Of course not.

The stock market could be lower in 20 years -- but it has never happened in the past. Booms will come, and busts will follow, but if you can broaden your time horizon by holding on longer or starting earlier and strengthening your stomach, the odds are in your favor.

Individual stocks with bright futures
The best investing approach is to choose great companies and stick with them for the long term. The Motley Fool's free report "3 Stocks That Will Help You Retire Rich" names stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of. Click here now to keep reading.

Sunday, May 26, 2013

This Latin American Retailer Remains a Solid Bet for My Retirement

Almost two years ago, I identified 10 companies that I would be putting $40,000 of my own retirement money behind. This was, has been, and will continue to be my way of helping the world to invest better.

Today, I'm going to tell you why Latin American wholesaler PriceSmart (NASDAQ: PSMT  ) will remain in "The World's Greatest Retirement Portfolio" for at least the next year.

Performance thus far
For those who might not know, PriceSmart is a spin-off of North American counterpart Costco (NASDAQ: COST  ) . To this day, PriceSmart operates in much the same way as Costco, focusing on slow and steady growth while creating value for all stakeholders.

The original $4,000 that I invested in the company is now worth $7,075 -- or a whopping $1,875 more than if I had simply invested in the SPDR S&P 500 (NYSEMKT: SPY  ) ETF.

PSMT Total Return Price Chart

PSMT total return price data by YCharts.

Unexpected strength
If you go back and read my original recommendation from two years ago, you'll see that I focused a lot on expats from North America. As baby boomers age, and health-care costs continue to skyrocket, many countries served by PriceSmart become attractive retirement locales -- both for the nice weather, and the quality of health care. It was this growing population, I postulated, that would drive sales at PriceSmart.

It turns out I was wrong in a really great way: Locals love it, too.

Over the past two years, my wife and I have spent months volunteering at a tiny, isolated organic coffee farm in Costa Rica. The owners get nearly everything they need either from the land, or from the corner store just up the hill. That's why I was surprised to find out one of the only reasons they'll leave the village is to run to PriceSmart -- which is more than an hour away.

Recently, the company has lowered its margins, in an attempt to increase volume and make the value more enticing for locals who might not have the same economic resources as expats do. This move has worked out, and it's increasingly important as Wal-Mart (NYSE: WMT  ) begins to enter the markets PriceSmart dominates.

Two variables to watch closely
Moving forward, there are two key variables I'm watching to make sure PriceSmart is worth holding in my retirement portfolio. The first is the company's expansion plan.

As Latin American markets mature, PriceSmart has an enormous opportunity. Though Brazil is largely dominated by Wal-Mart, Costco has no plans to move south; the rest of South America is open for the taking. PriceSmart has already opened three stores in Colombia. The first two have done remarkably well, and the third only recently opened.

If PriceSmart opened more than five new stores in a year, I would be concerned; I don't think there's a need to rush in South America. Doing so could lead to hasty and unprofitable decisions. At the same time, if the company were to stop opening South American stores altogether, I'd also be concerned, as the stock's price assumes that the move south will continue.

The second variable to watch is same-store sales. This variable is important, because it lets you know that revenue is increasing organically, rather than from simply opening more stores. Here's how the company has fared since I bought in:

Source: SEC filings.

Though some might be concerned that the numbers are slowing down, I think that's only natural. As time goes on, it gets harder and harder to match the previous year's numbers. As long as same-store sales are increasing by 5% or more, I'll be satisfied.

What should you do?
If you're looking to buy into PriceSmart now, I suggest doing it in stages. At today's P/E ratio of 34, the stock certainly isn't cheap. It would be worth buying a starter position now and adding to that position either as go down or you get more knowledgable about the company.

If you want to read more about why I think PriceSmart is a good bet, I suggest reading up on the company it came from: Costco. The company's low prices haven't just benefited customers -- shareholders have walloped the market, returning 11,000% over the past two decades. The Motley Fool's compiled a premium research report with in-depth analysis on Costco. Simply click here now to gain instant access to this valuable investor's resource.

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More Expert Advice from The Motley Fool
The Motley Fool's chief investment officer has selected his No. 1 stock for the next year. Find out which stock in our brand-new free report: "The Motley Fool's Top Stock for 2013." I invite you to take a copy, free for a limited time. Just click here to access the report and find out the name of this under-the-radar company.