Should You Buy Intel Stock Today?

Shares of Intel (NASDAQ: INTC  ) shrugged off a weak first quarter of 2013 to rally in the second quarter. By mid-June, Intel stock was trading 24.8% higher year to date, soundly beating the Dow Jnes Industrial Average's (DJINDICES: ^DJI  ) 16.9% gain. But the high didn't last long. Intel came back to Earth over the last week, and now it trails its Dow peers for 2013. The chip giant reports earnings next Wednesday. Is this the right time to buy Intel stock -- or to back away slowly?

INTC Total Return Price data by YCharts.

Let's see. The price plunge over the last few days owes to renewed fears regarding the death of the PC. Not one, but three analyst firms downgraded Intel this week, sending the stock 4% lower overnight. They all questioned Intel's ability to keep margins stable in the swiftly changing market, where the company has missed the boat on tablet and smartphone sales.

Here's where it gets a little weird. The just-released Haswell chip is seen as such a strong bet on mobile markets that this week's skeptics see it cannibalizing higher-margin desktop and server products. Damned if you do and damned if you don't, right? According to this logic, Intel shouldn't try to adapt to new markets, because the old ones are just too comfortably profitable.

Well, the litmus test is about to begin. The new Haswell chips are available today, and they've been chosen to power a handful of brand-name tablets. Dell (NASDAQ: DELL  ) has a $1,200 tablet available with Haswell inside. Hewlett-Packard (NYSE: HPQ  ) announced Haswell-powered tablets last month. The Dell model runs Windows 8 and doubles as an ultrabook by swinging the screen around. We're still waiting for details on the HP slates, but they're likely to follow Dell into the Windows world.

Intel chips do support the Android operating system, which is more of a proven quantity in the tablet world than anything Microsoft (NASDAQ: MSFT  ) has produced, but Windows remains the easiest way to combine tablet and laptop functions.

These tablets may not be game-changers, but they are solid entries into the tablet market by a collection of companies desperate for some success. Dell and HP have tried their hands at tablets and phones before, with disastrous results. Microsoft has been selling smartphone software since before the iPhone boom, but it never broke through to mainstream success. And, as we have already established, Intel sure could use some mobility muscle to make up for dwindling PC sales.

The important thing to notice here is that Intel is finally making the push into mobile computing. The market has matured, some say that smartphone sales have peaked already, and Intel is not making a play for massive growth in an exploding industry anymore. Instead, the company must aim for growing market share in a commoditized market. That sounds a lot like the PC and server markets where Intel has been making hay for decades.

Let me leave you with one more chart. The panic over slow PC sales might lead you to believe that Intel's business is falling through the floor. The reality is nowhere near a drastic plunge, though. Let's see if these stable trends can continue in next week's earnings report. My personal Intel shares are betting that they can.

INTC Revenue TTM data by YCharts.

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This 'Rich Parent' Stock Has Beaten The S&P 5-to-1

What I'm about to show you will probably be new.

Over the past few months, my staff and I have read hundreds of newspapers, blogs and financial articles. As shocking as it may sound, we've never seen one mention of what I'm about to reveal.

In short, I've come across 17 companies that appear to be normal, everyday businesses. If you were to see their ticker symbols, you probably wouldn't think anything of them.

But if you looked a little deeper, you'd quickly discover that they are unlike any other group of stocks on the market.

 

You see, because of how they were formed, they have a special advantage that gives them a leg up on the competition.

Most importantly... because of this special advantage, they're making a lot of money.

Here's how they work...

In order to grow, companies often form partnerships.

Most partnerships involve two separate companies -- like when Apple and AT&T created a partnership around the iPhone in 2007.

However, some companies form a radically different kind of partnership.

Instead of teaming up with another existing company, these firms simply create a spin-off company and make it the new partner.

These companies then buy a large ownership stake in the newly created firm and give it preferential treatment.

For example, the larger partner might sell assets to the new company at bargain prices. Or it might buy up valuable property and simply hand it over to the younger partner.

In other words, because it owns a big chunk of the new company's stock, the larger partner will take an active interest in assuring the success of its smaller partner.

Sound too good to be true? It's not. This is happening right now. Let me give you a real-life example...

Consider a little-known oil and gas company called NuStar (NYSE: NS).

Since its early days, NuStar has had what I call a "Rich Parent" that's fostered its growth and development.

For example, in January 2002 NuStar acquired a 270-mile-long crude oil pipeline from its "Rich Parent."

Then in March 2003, it acquired another pipeline system in Texas -- also from its "Rich Parent."

That same month, the firm closed yet another sweetheart deal... this time even bigger than the previous one. Once again, the company on the other end of the agreement: its "Rich Parent."

In total, from its IPO in 2001 to the middle of 2007, NuStar completed 13 acquisitions. In more than half of them, the company it bought from was n! one other than its powerful, wealthy parent.

These acquisitions provided rising cash flows to the young company. Had you purchased $10,000 worth of NuStar in 2001, you would have netted $680 in distributions that year alone.

And thanks to its rapidly increasing dividend payments, by the end of 2002 you would have received $1,060 just from dividend payments -- a 55% increase over the previous year.

But the increases still weren't done. In 2007, your $10,000 would have paid you over $1,500 -- a 118% increase in just seven years.

Even more impressive: over the same period this company beat the market by a better than 5-to-1 margin, returning 150% versus the S&P's 26%.

Bottom line -- since its inception, NuStar has crushed the market while paying its investors nearly $2 billion in dividends. And it's managed this feat in no small part thanks to its "Rich Parent."

And the great thing is, NuStar isn't an isolated example. I've identified more than 17 companies benefiting from the same "Rich Parent" advantage.

As a group, their performance has been astonishing. They've squashed the S&P 500 index over the past 10 years, returning 529% compared with just 77% for the S&P.

That hasn't been by accident... they've had help most corporations don't have access to. And I predict these "Rich Parents" stocks will continue to outperform.

P.S. -- My favorite of these stocks is the newest of its kind. It went public just months ago, and is not yet on many investors' radar screens. I believe it has the potential to quickly double in price while significantly boosting its dividend. To learn more about this opportunity -- and others like it -- click here.

The Magic Words Every Trader Says Over and Over

Stansberry & Associates: Brian, you claim "five magic words" are the secret to getting rich in the markets and through investments. You claim every rich investor or trader says these words over and over. Can you share those magic words?

 

Brian Hunt: Sure... The five magic words – and this works with real estate investing, small business investing, blue-chip stock investing, or even short-term trading – are: "How much can I lose?"

 

The rich, successful investor is always focused on how he can lose money on a deal, a stock, or an option position. He is always focused on risk. Once he has the risk taken care of, he can move on to the fun stuff... making money.

 

Almost everyone who is new to the markets or new to making investments is 100% about making money... the upside. They're always thinking about the big gains they'll make in the next Big Tech stock or currency trade or their uncle's new restaurant business.

 

They don't give a thought to how much they can lose if things don't work out as planned... if the best-case scenario doesn't play out. And the best-case scenario usually doesn't play out. Since the novice investor never plans for this situation, he gets killed.

 

I've found, through years of investing and trading my own money – and through years of hanging out with very successful businesspeople and great investors – that when presented with an idea, the great investor or trader reflexively asks early in the discussion, "How much can I lose?"

 

Like I say, this can be a real estate deal, a small business investment, a quick trade, a stock position, or a commodity investment. The concern is always, "How much can I lose? What happens if the best-case scenario doesn't pan out?"

 

S&A: It's along the lines of Warren Buffett's famous rules of successful investment. Rule one: Never lose money. Rule two: Never forget rule one.

 

Hunt: Right. Buffett is probably the greatest business analyst to ever live... the greatest capital allocator to ever live. He's worth over $50 billion because of his ability to analyze investments.

 

When they ask the old man his secret, he doesn't talk about the intricacies of balance sheets or cash flow analysis. The first thing he recommends to folks who want to make money in the market is to not lose money in the market. He's obsessed with finding out how much he could potentially lose on a stake. Once he's satisfied with that, he looks at what the upside is.

 

So Buffett is your great investor. Now take Paul Tudor Jones, an incredible trader with a net worth in the billions. His interview in the trading bible Market Wizards is the most important thing any new trader can read. His interview is filled with how he's obsessed with not losing money... with playing defense.

 

Tudor's famous quote is the trader's version of Buffett's investment quote. Tudor says the most important rule of trading is playing great defense, not offense.

 

If a new investor or trader taped Buffett's quote in a place he'd see it every day... and if he read Tudor Jones' interview once per month... and if he reflexively asks himself, "How much can I lose?" before investing a penny in anything, he'd be worlds ahead of most people out there. He'd set himself up for a lifetime of wealth.

 

S&A: OK, that covers the theory. How can we put "how much can I lose" into everyday practice?

 

Hunt: Well, if you're putting money into a startup business, a speculative stock, an option position, or anything else that is on the riskier end of the spectrum, the answer to "how much can I lose?" is usually, "Every last dollar."

 

While speculative situations can be tremendous wealth-generators, they're best played with small amounts of your overall portfolio. Or if you're a conservative investor, not played at all. Let's say you're buying a speculative gold-mining stock or a speculative tech company with just one potential "big hit" product.

 

With speculative positions, there is always the possibility that your money could evaporate. This is where the concept of position sizing comes into play. In a speculative situation, you're going to want to put just 0.5% or just 1% of your overall portfolio into that idea. That way, if the situation works out badly, you only lose a little bit of money. You certainly don't want to put 5% or 10% of your portfolio into a speculative position. That's way too big.

 

S&A: How about advice for conservative investors?

 

Hunt: I think conservative investors should stick to Warren Buffett-type investments... owning incredible companies with great brand names, like Johnson & Johnson or Coca-Cola. These are the safest, most stable companies in the world.

 

When you buy companies like this at cheap prices, when they are out of favor for some reason, it's very hard to lose money on them. They are such incredible profit generators that their share prices eventually rise and rise.

 

My friend and colleague Dan Ferris, who writes our Extreme Value advisory, provides advice on how and when to buy these dominant companies better than anyone in the business. He knows exactly what they are worth... and he watches them like a hawk to find the right buy-points for his readers.

 

If a conservative investor can buy a super world-dominating company like Johnson & Johnson or Coca-Cola or Intel for less than eight or 10 times its annual cash flow, it's very hard to lose money in them. Eight to 10 times cash flow is often a hard floor for share prices of elite businesses. They don't go down past that.

 

S&A: How about the concept of "replacement cost"? Do you think that's important in the quest to not lose money?

 

Hunt: A while back, I had lunch with a successful professional real-estate investor who raved about some of the values he found on the east coast of Florida.

 

The market was wrecked there. There are a lot of sellers who needed to dump right then and ask questions later... So he's found tons of properties that are selling for less than the cost it would take to build the structures if they weren't there in the first place. He's bought properties for less than that rock-bottom value... for less than replacement cost.

 

Since he is focusing on not losing money... and buying below replacement cost... it's going to be easy for him to make money on his properties. Mind you, he's not raving about price-appreciation potential. His eyes lit up because his downside was so well-protected.

 

That's the mindset the new investor needs to cultivate. He needs to realize the time to start raving is when he's found a situation where it's going to be difficult for him to lose a lot of money. The upside will take care of itself.

 

S&A: How about commodities? I know you like to trade commodity stocks.

 

Hunt: Oh, I love to trade commodity-related stocks... copper producers, oil-service companies, uranium, gold, silver, agriculture. They boom and bust like crazy. And you can make money both ways. I like to say they are "well behaved."

 

The key to not losing money – which leads to making terrific money – in commodity stocks is to focus your buying interest in commodities that have been blown out... that are down 60% or 80% from their high. Find commodities that have suffered brutal bear markets. The longer the bear market, the better. This is the time that the risk has been wrung out of them.

 

Every commodity has what's called a "production cost." This is how much it costs to produce a given unit of that commodity. It's similar to the concept of "replacement cost."

 

After a big bear market in a commodity, you'll often find it trading for below its replacement cost. Sentiment toward the asset will be so bad that nobody wants it. So producers get out of the business... and demand for that commodity increases because it is so cheap. This sows the seeds of a big bull market.

 

But to get back to covering your downside in commodities, focus on markets that have suffered a terrible selloff or bear market. In these situations, the answer to "how much can I lose?" is often, "Not much... It's already selling at rock-bottom levels."

 

You can certainly make money in commodities that have been trending higher for a long time, but the sure way to not lose money is to focus on the commodities that have absolutely been blown out.

 

Gold and gold stocks were a classic case of this in 2001. Gold and gold stocks were such bad investments for so long that everyone who bought in the 1980s or '90s had sold their holdings in disgust. They finally got so cheap and hated that they couldn't go any lower. Then they skyrocketed.

 

S&A: Good advice... Any parting shots?

 

Hunt: When you start out in this game, you're as bad as you're going to get. So take supertrader Bruce Kovner's advice and "undertrade."

 

Make really small bets to get the hang of things... to get the hang of handling your emotions. If you have $10,000 to get started, set aside $7,000 and trade with $3,000 for the first six or 12 months.

 

But even after going through a training period like this, it's tough to learn not to lose money unless you actually feel the pain of losing a lot of money. It took me touching several very hot stoves and suffering several big losses early on in my career before I learned this.

 

If I am a skilled trader and investor nowadays, it is only because I have made every boneheaded mistake you can think of and learned not to repeat it. I've learned that you can make great money in the market simply by not making stupid mistakes... by playing great defense.

 

S&A: Winning by not losing. It works for Buffett and Paul Tudor Jones... So it's probably worth focusing on. Thanks for your time.

 

Hunt: My pleasure.

Markets Stall as All Eyes Focus on Fed

As of 12:45 p.m. EDT, with just more than an hour before the Federal Reserve is scheduled to conclude its two-day meeting and announce the fate of its quantitative-easing program, the markets are slightly lower. The Dow Jones Industrial Average (DJINDICES: ^DJI  ) is down 19 points, or 0.13%, while the S&P 500 is down 0.11% and the Nasdaq has lost 0.17% of its value.

While some market participants believe the Fed will leave its bond-buying program alone for the time being, others fear the Fed will begin taking its foot off the gas and allow interest rates to rise. But regardless of what the central bank says or does today, volatility will probably rise this afternoon, and there's a good chance the market will make a big move in one direction or the other.

So far it's been a pretty dull day for the Dow. Let's take a look at three components that are standing out -- and not in a good way.

Shares of the Dow's telecommunications stocks are leading the index lower. AT&T (NYSE: T  ) is down 0.9%, while Verizon (NYSE: VZ  ) has lost 1.1%. The likely cause for the drops is the announcement that DISH Network will no longer seek to buy Sprint Nextel (NYSE: S  ) . DISH said it would no longer raise its purchase price after rival bidder SoftBank increased its offer last week. This move opens the door for SoftBank to acquire Sprint, which is not what AT&T and Verizon investors wanted to see. SoftBank has deep pockets, so it could surely help the company get back on its feet in the U.S. and perhaps even open new markets around the world to the straggling telecom. We have recently seen both AT&T and Verizon shopping around for smaller telecom companies outside the U.S., and now Sprint may also be a player in these markets. 

Another big loser on the Dow today is Boeing (NYSE: BA  ) . The aerospace company's shares have fallen 1.1%, and its biggest competitor, Airbus, may be the cause. Airbus has announced that it made a few big sales at the Paris Air show yesterday, which is a sign that the company's A350 and A330 wide-body jets are attracting customers and may pose a real threat to Boeing's own wide-body aircraft, the 787 and 777. Still, today's move is simply a headline-driven reaction and is a part of the market's regular ups and downs.  

Boeing is a major player in a multitrillion-dollar market in which the opportunities are massive. However, emerging competitors and the company's execution problems have investors wondering whether Boeing will live up to its shareholder responsibilities. The Fool's premium research report on the company provides investors with the must-know info on Boeing. They'll be updating the report as key news hits, so don't miss out -- simply click here now to claim your copy today.

3 Threats to Social Security Benefits: How Much Could Your Payment Get Cut?

When the Social Security Administration recently released its 2013 Trustee Report detailing the financial health of its trust funds, the news was mixed. The data turned out to be worse than last year's report, but the trustees claimed that improved projection methods meant that the trust funds would still empty in 2033, the same as last year's projection.

What does this mean to your benefits when you retire? Everything.

If you're counting on Social Security to cover a significant part of your retirement income, you'd better hope the trustees' new projections are right. Because once the trust funds run out of cash, if nothing else changes, benefits will be cut by somewhere around one-fourth.

Here are three key threats to Social Security -- factors to watch closely to see whether the worsening data or the improved projection methods win in the end.

Here's what could slash your Social Security benefits
No. 1: The next decade. Even with the improved projection methods, the trustees expect the trust funds to shrink more quickly for around the next decade or so before slowing its decline.

This is a risk because as the trust funds shrink, there's less money earning interest and less of a balance to draw from if reality turns out to be worse than projections.

The following table has the gory details from the Social Security Administration:

Year End

2013 Projected Balance
(in billions)

2012 Projected Balance
(in billions)

Difference
(in billions)

2013	$2,760.3	$2,776.3	($16.0)
2014	$2,783.5	$2,818.8	($35.3)
2015	$2,808.0	$2,861.9	($53.9)
2016	$2,835.7	$2,908.1	($72.4)
2017	$2,866.6	$2,957.8	($91.2)
2018	$2,897.9	$3,006.8	($108.9)
2019	$2,918.9	$3,043.7	($124.8)
2020	$2,922.4	$3,061.0	($138.6)
2021	$2,907.4	$3,053.0	($145.6)
2022	$2,865.7	$3,017.1	($151.4)
2023	$2,797.3	$2,948.6	($151.3)
2024	$2,698.8	$2,843.8	($145.0)
2025	$2,566.5	$2,699.4	($132.9)
2026	$2,397.2	$2,511.6	($114.4)
2027	$2,187.0	$2,268.3	($81.3)
2028	$1,924.2	$1,967.1	($42.9)
2029	$1,605.2	$1,605.4	($0.2)
2030	$1,226.9	$1,179.7	$47.2
2031	$786.8	$687.7	$99.1
2032	$281.8	$127.5	$154.3

Projected balances from the Social Security Administration. Difference calculated by author.

No. 2: High -- and rising -- disability rates. As if the trust funds' conditions weren't bad enough already, their health is heavily dependent on both the number of people contributing and the number of people taking benefits.

From a Social Security Disability perspective, the trends don't look promising. As the following chart from the Congressional Budget Office shows, the percentage of the working-age population on Social Security Disability is at a very high level. And it's projected to keep growing:

Chart from the Congressional Budget Office.

Working-age people on Social Security Disability get benefits paid out of the trust fund, hastening its collapse. In addition, as they're generally not working much, if at all, they're typically not contributing much to the trust fund through payroll taxes.

Bottom line: If the growth in disability claims continues, the trust funds' balances could very easily deplete faster.

No. 3: Quickly dwindling workforce participation. Whether because of disability, the lousy economy, or other factors, there is simply a smaller portion of the working-age population actually working these days than in recent history. Since Social Security relies on payroll taxes to replenish the trust funds, a low and falling labor force participation portends further problems for the trust funds' balances.

The following chart from the Bureau of Labor Statistics shows just how ugly it has gotten:

Chart from the Bureau of Labor Statistics.

What can you do about it?
Between the near-term dips for the trust funds, the worrisome disability trends, and the abysmal labor force participation rate, the question isn't whether the trust funds will empty, but when.

There's little you can do to stop the collapse from happening, but you can prepare yourself for that eventual date.

By increasing the money you're investing now, you can improve your nest egg when the trust funds do empty, better protecting your lifestyle from those pending benefit cuts. Here are four investments to consider as you sock away extra money to make up for Social Security's shortfall:

The S&P Depository Receipts (NYSEMKT: SPY  ) is one ETF that tracks the S&P 500, providing a low-cost way to get stock market return potential to help build your nest egg. For the potential of providing portfolio ballast, the iShares Barclay's US Treasury Bond (NYSEMKT: GOVT  ) ETF owns U.S. Treasury bonds. With interest rates so low, the returns from the bonds in that ETF are not likely to be stellar, but they at least do carry a government-backed guarantee of repayment. If you're worried about inflation ravaging your purchasing power over time, the iShares Barclay's TIPS Bond (NYSEMKT: TIP  ) ETF offers a way to buy government bonds that will increase along with inflation. But while those bonds may be able to keep up with the official inflation rate, they won't help much if your costs, like many people's, increase faster than inflation as you age. For the potential of an income stream that may grow faster than inflation but carries more risk of potential default or reduction, Vanguard's Dividend Appreciation ETF (NYSEMKT: VIG  ) may fit the bill. It's a low-cost way to invest in companies with solid track records of increasing their dividends. Still, there's a trade-off in that unlike Treasury bonds, there are no guarantees that dividends will get paid.

No matter how you invest, the reality is that even lousy investing beats not investing at all. It certainly beats waking up sometime in the next two decades to find that your Social Security check has been slashed by a fourth and not having any alternative source of cash.

Even weakened, Social Security will still be there in some form
Even with the expected cuts as the Trust Fund empties, Social Security will still provide most of the benefits people expect from it. In our brand-new free report "Make Social Security Work Harder for You," our retirement experts give their insight on making the key decisions that will help ensure a more comfortable retirement for you and your family. Click here to get your copy today.

3 FTSE 100 Shares Going Ex-Dividend Next Week

LONDON -- If you want to be eligible for a dividend payment, or if you're watching for possible share-price falls, keeping up with ex-dividend dates can prove beneficial. So long as you hold the shares up to and including that day, you'll get your dividend money.

We have a number of companies from the FTSE 100 reaching their crucial dates next week. Here are three that will go ex-dividend next Wednesday, June 19.

Severn Trent (LSE: SVT  )
Severn Trent declared a final dividend of 45.51 pence per share in May to provide a full-year dividend of 75.85 pence per share -- a rise of 8.2% on the previous year. That provides a yield of 4.3% on a share price of 1,760 pence. At the same time, the water company said its full-year dividend would be lifted by a further 6% to 80.4 pence per share, in line with the group's policy of maintaining growth equal to Retail Price Index plus 3%.

The dividend was a point of contention regarding the recently rejected bid for Severn Trent from LongRiver Partners, with the water supplier's board reckoning the £22 per-share bid did not take the payment properly into account.

United Utilities (LSE: UU  )
United Utilities will go ex-dividend on the same day with respect to its final dividend of 22.88 pence per share. That adds to an interim payment to give a full-year total of 34.32 pence per share, and a yield of 4.7% on the current share price of 731 pence.

Along with other utilities companies, United Utilities has seen its share price pushed up of late as income-seekers move into the sector in search of dependable high yields, with the shares having risen to a P/E multiple of more than 17 based on forecasts for March 2014. However, if the yield can stay around 5%, that P/E rating could be fair value.

Land Securities (LSE: LAND  )
Our third for next week is Land Securities, the real-estate investment trust whose shares have risen to 903 pence this year. Again we're looking at a final dividend, of 7.6 pence per share this time, for a full-year payout of 29.8 pence per share -- a rise of 2.8%, for a yield of 3.3%.

The firm's current valuation appears to reflect optimism for the future of the real-estate market, with forecasts for the year to March 2014 putting the shares on a P/E of nearly 24 -- and the dividend is set to rise over the next two years, too.

Finally, dividends such as these can add nicely to your investment returns -- they can be spent or reinvested, according to your needs. Whether you're investing for income or growth, good old cash is always welcome. And that's why I recommend the brand-new Fool report "The Motley Fool's Top Income Share For 2013," in which our top analysts identify a share they believe will provide handsome dividend income for years to come. But it will be available for a limited period only, so click here to get your copy today.

Why SCO Is Poised to Keep Plunging

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, the ProShares UltraShort DJ-UBS Crude Oil ETF (NYSE: SCO) have received the dreaded one-star ranking.

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

SCO facts

Inception	November 2008
Total Net Assets	$469.9 million
Investment Approach	The investment seeks to provide daily investment results that correspond to twice (200%) the inverse of the daily performance of the Dow Jones UBS Crude Oil Sub-Index. The fund invests in any one of or combinations of the financial instruments (swap agreement, futures contracts, forward contracts, option contracts) with respect to the applicable fund's benchmark to the extent determined appropriate by the Sponsor.
Expense Ratio	0.95%
Year-to-Date / 1-Year / 3-Year Return	(24.3%) / (30.1%) / (23.7%)
Alternatives	ProShares UltraShort Silver  ProShares UltraShort Gold  United States Short Oil

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

On CAPS, 69% of the 367 members who have rated SCO believe the ETF will underperform the S&P 500 going forward.

Just last week, one of those Fools, All-Star TerryHogan, succinctly summed up the SCO bear case for our community:

Electric cars are cool and all, but try towing a 26-foot holiday trailer with a Prius. Does Deere make an electric combine? Of course this pick isn't even about the price of crude, it's about the crappiness of leveraged ETFs in general, more specifically short leveraged ETFs, and in particular short leveraged commodity ETFs which are the worst of all.

If you want market-thumping returns, you need to protect your portfolio from any undue risk. Luckily, our special report on ETFs highlights three funds that are poised to soar in the next recovery. It's 100% free, but won't last forever, so click here to access it now.

Questar Adds $106 Million Interest in Natural Gas Properties

Questar (NYSE: STR  ) announced today that it is adding on to its natural gas investments. The company's subsidiary, Wexpro, has entered into an agreement to acquire $106.4 million of gas-producing property by increasing its working interest from 46% to 88% in 78 Wexpro-operated wells in southwestern Wyoming.

Since the new interests add on to Wexpro's current ownership, the acquisition falls under a 1981 agreement stipulating that the new natural gas be offered to Questar's Wyoming and Utah utility customers at "cost-of-service," upon regulators' request. Otherwise, Questar is free to develop and operate the new property at market-based costs and prices.

"We are excited to add this acquisition to our portfolio," said Chairman, President, and CEO Ron Jibson in a statement today. "It's in the heart of our operations and adds value to one of our premier assets."

Questar expects to seal the deal by the end of August and estimates the new interests to add 2.6 billion cubic feet equivalent of production for the remaining four months of 2013.

2.5 Million Reasons to Like Pandora

Pandora (NYSE: P  ) is turning more of its freeloaders into paying music fans.

The leading music streaming service posted blowout quarterly results on Thursday night, but the cherry on top of its great report is that its subscription revenue is once again growing faster than online ad revenue.

The number of subscribers to its premium Pandora One platform soared 114% over the past year to top 2.5 million users. A whopping 700,000 have joined over the past three months alone!

This still means that more than 96% of its active listeners aren't paying a dime, but it's a start.

The crowd wants an encore
It was a strong quarter.

Adjusted revenue rose 58% to $128.5 million, ahead of the $123.8 million that Wall Street was targeting. Pandora's loss of $0.10 a share isn't applause-worthy, but it did match the deficit that analysts were expecting.

Shares of Pandora had hit a fresh 52-week high on Thursday ahead of the report. It's been a good week for Pandora.

Earlier in the week it announced that it would be teaming up with T-Mobile (NYSE: TMUS  ) to sponsor Pandora Premieres, a new channel that features album releases before they hit the market. It's a great way to woo music labels to help promote their upcoming retail releases, but it's also just neat to see Pandora teaming up with the country's fourth-largest mobile carrier on a branding opportunity. Creating sponsored channel opportunities is one more way for Pandora to make money as it claws its way back to profitability.

Pandora also revealed that it's making it easier for listeners to share their music through Facebook (NASDAQ: FB  ) . Pandora is one of the many streaming sites that allow users to divulge what they're listening to with their Facebook friends, but a new timeline app enhances the sharing capability by making it customizable and automatic. This should give Pandora more of a viral push through the social networking website with more than a billion registered users.

Pandora's initiatives are paying off. Its guidance for the current quarter calls for $155 million to $160 million in revenue. Wall Street had been projecting revenue to fall just short of $150 million.

At a time when Pandora finds itself competing with Spotify and now Google's (NASDAQ: GOOG  ) All Access -- the online giant's new premium music streaming service -- it can never do too much to grow its audience, keep them close, and ideally get them paying.

Spotify and All Access are marketed as premium experiences. Pandora has stood out in the past as a haven for freeloaders willing to put up with ads for free music, but if even Google is gunning for subscription revenue, it's clearly where Pandora needs to make sure it doesn't get lost.

Having 2.5 million Pandora One listeners is good. Growing that audience will be even better.

Cracking open Pandora's box
Pandora has won millions of devotees among music fans but few supporters on Wall Street. The online jukebox seems to be redefining the way we consume music, a transformation that's only likely to grow. But high royalty rates and competition from all corners threatens to silence the company. Can Pandora translate success with its listeners into a prosperous business model that will deliver for investors? Learn about the key opportunities and potential pitfalls facing the upstart radio streamer in The Motley Fool's premium research report. All you have to do is click here now to subscribe to this invaluable 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.

Will These Numbers from Niska Gas Storage Partners Be Good Enough for You?

3 More Shares That Thrashed the FTSE 100

LONDON -- They say that "all boats float on a rising tide." While that may be true of ships, shares are different. These shares have massively outperformed the rest of the market in the last 12 months.

Rolls-Royce
Shares in jet engine specialist Rolls-Royce  (LSE: RR  ) are up 40.2% in the last year. That is well ahead of the FTSE 100, which has managed an increase of "just" 16.3% in the same period.

Rolls-Royce made certain to send shareholders its love when announcing full years results on February 14. Positive news abounded, with revenues, profits and dividends all up significantly.

Since then, Rolls-Royce has announced a contract to supply and service engines for British Airways' new Airbus planes. Today, the company announced a contract to supply a customer with engines for the Boeing Dreamliner.

Analysts are forecasting EPS (earnings per share) of 67 pence for 2013, with a dividend of 21.8 pence. That equates to a P/E of 17.4 and a yield of 1.9% at today's prices.

WPP
Advertising specialist WPP  (LSE: WPP  ) held its 2010 dividend at 15.47 pence. In every other year since 1997, the payout has increased.

EPS increases average 11.6% at WPP over the last five years. Dividend growth in that time averages out at 16.2% a year. Twelve other FTSE 100 companies have a better recent record on both measures but only three of those are forecast to report higher EPS growth than WPP this year.

That growth is expected to come in at 15.8%, to be followed by another 9.7% rise in 2014. That puts the shares today on a 2014 P/E of 12.5, with a forecast yield of 3.3%.

Capita
Outsourcing specialist Capita  (LSE: CPI  ) is one of the FTSE 100's most successful companies. Ten years ago, annual turnover at the company was 900 million pounds. Earnings per share was 10.5 pence. Fast-forward to 2012 and sales had reached 3.3 billion pounds per annum and EPS hit 37 pence. In that time, the dividend increased year on year from 2.1 pence to 23.5 pence.

Unsurprisingly, this super-successful share has spent the last year outperforming its blue-chip peers. In the last 12 months, shares in Capita are up 49.2%.

Significant dividend and earnings growth is expected this year and next. As a result, Capita shares trade on a prospective P/E for 2014 of 15.5, by which time the dividend is expected to represent a 2.9% yield.

Warren Buffett, the world's greatest living investor, loves to buy shares in great companies at reasonable prices. Despite all of Capita's success, it is the shares in a different FTSE 100 company that Buffett has been picking up recently. To find out which company Buffett has been buying and the price he has paid, get the free Motley Fool report "The One U.K. Share Warren Buffett Loves." This research is 100% free and will be delivered to your inbox immediately. Just click here to get your copy today.

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This Telecom Giant Looks North of the Border

It's been an exciting year so far in the U.S. telecom space, and we're only now passing the halfway mark. And, thankfully, if the past few weeks are any indication, the drama looks likely to keep on rolling. Investors were recently thrown another interesting curve ball when rumors surfaced that Verizon Communications (NYSE: VZ  ) might be planning on making an unexpected move, heading north of the border. So what's the deal? In this video, Fool tech and telecom analyst Andrew Tonner takes a look at the latest potential deal on the wireless giant's radar, and what it could mean for shareholders.

Want to get in on the smartphone phenomenon? Truth be told, one company sits at the crossroads of smartphone technology as we know it. It's not Nokia... or Verizon... or even Apple! In fact, you've probably never even heard of it! But it stands to reap massive profits NO MATTER WHO ultimately wins the smartphone holy war. To find out what it is, click here to access the "One Stock You Must Buy Before the iPhone-Android War Escalates Any Further..."

Yahoo! Stock Is an Even Better Buy Than You Might Think

Investors have good reason to love Marissa Mayer. Yahoo! (NASDAQ: YHOO  ) stock is up 61% since she took over as CEO last July. The S&P 500 is up just 18% over the same period.

Mobile app gains are at least partly responsible. Mayer has been saying for months that her strategy is to beef up Yahoo!'s mobile presence. According to GigaOm, which reported on data compiled by Onavo, use of Yahoo!'s major mobile apps among iPhone owners  increased in each of the past three months.

But investing is also a game best played in context. How does Yahoo! stock compare to peers Google (NASDAQ: GOOG  ) and AOL (NYSE: AOL  ) ? Here's what the numbers say:

Key Statistics Yahoo! AOL Google

Current Share Price	$26.80	$36.92	$898.15
Shares Outstanding	1.08 billion	77.5 million	331.8 million
Market Cap	$28.7 billion	$2.84 billion	$294.0 billion
Trailing P/E Ratio	7.76	3.15	26.87
PEG Ratio	1.38	1.57	1.27
Gross Margin	68.1%	30.8%	57.7%
Cash From Operations	(360.3 million)	$386.3 million	$16.56 billion

Sources: S&P Capital IQ, Yahoo! Finance.

And here's what Fools say, going by the data available in our CAPS investor intelligence database:

CAPS Category Yahoo! AOL Google

CAPS Stars (out of 5)	**	*	****
No. of CAPS Ratings	5,116	305	18,139
Bullish CAPS Ratings	4,071	105	15,614
Bearish CAPS Ratings	1,045	200	2,525
Bull Ratio	79.6%	34.4%	86.1%

Source: Motley Fool CAPS.

Yahoo! gets a low rating in CAPS, but that may be due more to its past than its potential. "Great management! A lot of great growth prospects and acquisitions should help drive future growth," writes CAPS investor storyboy34, in what appears to be a reference to Mayer

Google has its own mobile ambitions having recently changed terms for its AdWords search advertising program. The goal? Do a better job of monetizing mobile ads. The search king has also teamed with Yahoo! to bring contextual ads to Yahoo! sites for auto, finance, sports, and general news. Investing in both companies might prove an interesting way to play not only the growth of the Mobile Web but also the shift toward tailored, digitally delivered ads.

AOL, meanwhile, remains dependent on a growing network of cheap content via sites such as The Huffington Post. The company is also competing with YouTube by introducing unique web video shows. Call it one of several promising AOL projects, even if the company's comparatively low gross margin seems to have investors concerned.

Verdict: Yahoo! stock is a buy
As for Yahoo!, I think that mobile apps are catching on for a reason. The company has done good work to make them useful in iOS, which means more users who, in turn, may give the ad-supported full sites a second look. It's a virtuous cycle that I see growing over time, and I've rated the stock to outperform in my CAPS portfolio as a result.

Now it's your turn to weigh in. What do you think of Yahoo!'s mobile apps? Would you buy, sell, or short Yahoo! stock at current prices? Leave your comments in the box below.

Dial up a winner
Yahoo! isn't the only way to get in on the smartphone phenomenon. One company sits at the crossroads of smartphone technology as we know it and stands to reap massive profits NO MATTER WHO ultimately wins the smartphone holy war. To find out more, click here to access the "One Stock You Must Buy Before the iPhone-Android War Escalates Any Further..."

Why Speedway Motorsports's Earnings Are Outstanding

Although business headlines still tout earnings numbers, many investors have moved past net earnings as a measure of a company's economic output. That's because earnings are very often less trustworthy than cash flow, since earnings are more open to manipulation based on dubious judgment calls.

Earnings' unreliability is one of the reasons Foolish investors often flip straight past the income statement to check the cash flow statement. In general, by taking a close look at the cash moving in and out of the business, you can better understand whether the last batch of earnings brought money into the company, or merely disguised a cash gusher with a pretty headline.

Calling all cash flows
When you are trying to buy the market's best stocks, it's worth checking up on your companies' free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That's what we do with this series. Today, we're checking in on Speedway Motorsports (NYSE: TRK  ) , whose recent revenue and earnings are plotted below.

Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. Dollar values in millions. FCF = free cash flow. FY = fiscal year. TTM = trailing 12 months.

Over the past 12 months, Speedway Motorsports generated $94.2 million cash while it booked net income of $40.9 million. That means it turned 19.2% of its revenue into FCF. That sounds pretty impressive.

All cash is not equal
Unfortunately, the cash flow statement isn't immune from nonsense, either. That's why it pays to take a close look at the components of cash flow from operations, to make sure that the cash flows are of high quality. What does that mean? To me, it means they need to be real and replicable in the upcoming quarters, rather than being offset by continual cash outflows that don't appear on the income statement (such as major capital expenditures).

For instance, cash flow based on cash net income and adjustments for non-cash income-statement expenses (like depreciation) is generally favorable. An increase in cash flow based on stiffing your suppliers (by increasing accounts payable for the short term) or shortchanging Uncle Sam on taxes will come back to bite investors later. The same goes for decreasing accounts receivable; this is good to see, but it's ordinary in recessionary times, and you can only increase collections so much. Finally, adding stock-based compensation expense back to cash flows is questionable when a company hands out a lot of equity to employees and uses cash in later periods to buy back those shares.

So how does the cash flow at Speedway Motorsports look? Take a peek at the chart below, which flags questionable cash flow sources with a red bar.

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

When I say "questionable cash flow sources," I mean items such as changes in taxes payable, tax benefits from stock options, and asset sales, among others. That's not to say that companies booking these as sources of cash flow are weak, or are engaging in any sort of wrongdoing, or that everything that comes up questionable in my graph is automatically bad news. But whenever a company is getting more than, say, 10% of its cash from operations from these dubious sources, investors ought to make sure to refer to the filings and dig in.

With 14.2% of operating cash flow coming from questionable sources, Speedway Motorsports investors should take a closer look at the underlying numbers. Within the questionable cash flow figure plotted in the TTM period above, other operating activities (which can include deferred income taxes, pension charges, and other one-off items) provided the biggest boost, at 15.3% of cash flow from operations. Overall, the biggest drag on FCF came from capital expenditures, which consumed 18.1% of cash from operations.

A Foolish final thought
Most investors don't keep tabs on their companies' cash flow. I think that's a mistake. If you take the time to read past the headlines and crack a filing now and then, you're in a much better position to spot potential trouble early. Better yet, you'll improve your odds of finding the underappreciated home-run stocks that provide the market's best returns.

Can your retirement portfolio provide you with enough income to last? You'll need more than Speedway Motorsports. Learn about crafting a smarter retirement plan in "The Shocking Can't-Miss Truth About Your Retirement." Click here for instant access to this free report.

We can help you keep tabs on your companies with My Watchlist, our free, personalized stock tracking service.

Add Speedway Motorsports to My Watchlist.

Facebook Says Ads Don't Detract From the Experience

Facebook's (NASDAQ: FB  ) advertising revenue -- accounting for 88% of total revenue -- soared 61% in the company's second quarter. As businesses increasingly shift a larger portion of their advertising budgets to Facebook, it's natural to wonder: Is it detracting from the experience?

Ads don't bother users
During the company's second-quarter earnings call, founder and CEO Mark Zuckerber addressed the concern.

"We haven't measured a meaningful drop in satisfaction when we asked people about their experience with Facebook," he said. "We're comparing that to the result we get when we asked the same question to people using a version of Facebook with no feed ads at all. ... Now, that said, in recent studies people have told us that they notice the ads more."

On average, about 5% of all stories in the news feed are advertisements, Zuckerberg said. Yet users remain satisfied, or at least Facebook hasn't "measured a meaningful drop in satisfaction."

An alternative measurement to satisfaction, though definitely not a perfect way to measure, is user engagement.

Are members (on average) using Facebook more often than they used to? Measured by daily active users as a percentage of monthly active users, yes. In Facebook's second-quarter results, the company's engagement rate reached 60.5%, up from 57.8% in the year-ago quarter.

Still, this metric has its limitations. As technology and the way we interact with the Internet continue to evolve, there are simply too many outer forces that could affect the metric, though it's helpful enough to keep an eye on for meaningful changes.

Another way to look at satisfaction is time spent per person on the social network. According to Facebook, it's continuing an upward trend.

Don't worry: Facebook won't spam you
I didn't expect Facebook to report any drop in member satisfaction because of ads. It wouldn't make sense for the social network to dissatisfy members with too many ads. Members and member engagement represent the company's value proposition to advertisers.

But if Facebook won't spam its members, how will it continue to boost average revenue per user, going forward?

Facebook plans to increase the number of marketers bidding for a spot on your news feed. Increasing the overall demand in Facebook's system will help Facebook improve the quality of ads by creating a more competitive auction. Zuckerberg says "this will create the best experience for people who use our products, the best returns for more marketers, and the best results for us."

What does all this mean for investors?
On average, members aren't bothered by Facebook's ads. Furthermore, Facebook doesn't plan on spamming members' news feeds. Facebook bears who dwell on this potential outcome are wasting their time. Facebook knows that its members are its first priority. And that's not just out of social responsibility -- it makes business sense, too. Furthermore, if you're a shareholder, I would rest assured that Facebook will remain a spam-free experience for years to come.

Want to learn more about Facebook's potential going forward? 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 among the five kings of tech. Click here to keep reading.

Sounds Too Good to Be True? It Probably Is

While most of us don't live an extreme life, we sure seem to be fascinated by those with extreme lifestyles. So when the Charlie Sheens and Bernie Madoffs of the world operate at a level that's hard to fathom for "normal" people, it's no surprise we're fascinated. But here's the thing: The driving factor behind extreme behavior is that someone or something enables the extreme behavior.

Too often, money drives the enabling.

For instance, remember when Mr. Sheen very publicly went, well, out of control? A concerned friend approached one of Sheen's inner circle about getting him help, only to be told, "We make a lot of money from him. I can't be part of" helping him. How often have we heard a similar justification used when it comes to reckless investing in the markets?

Consider the article that appeared in The New York Times highlighting the first jailhouse interview that Mr. Madoff allowed. What caught many off guard were his assertions that an entire group of supposed experts turned a blind eye to their suspicions of him.

Unsealed court documents could back up his claims. In a lawsuit filed to recover funds, Irving Picard, the trustee representing Madoff victims, claims that as early as 2007 a Citigroup executive analyzing Mr. Madoff's fund concluded that his strategy couldn't generate the published returns.

At JPMorgan Chase, internal documents suggested that senior executives doubted Mr. Madoff's legitimacy more than 18 months before his Ponzi scheme collapsed, but kept doing business with him. Were his actions enabled by people there who benefited directly from his operation?

The everyday investor isn't immune to getting pulled in by their fascination. Wall Street doesn't make sense to most people, so few people asked many questions when supposedly conservative bankers started offering new products to mainstream investors, like derivatives and securities backed by mortgages (often subprime loans). These experts knew better, but many of them were turning a blind eye to the problems they were creating in the name of profits.

Nobody wanted the music to end. And we kept buying the products even as we sensed that no-money-down mortgages made very little financial sense. You, me, and most everyone else struggles to work up the nerve to question things that appear too good to be true and come with a financial benefit.

Just so you don't think the world is populated solely by bad guys, I think it's worth pointing to Carl Icahn's announcement in 2011 that he would return money to outside investors in his hedge fund. There are some other issues that may have been behind his decision, including concerns about increased regulation of hedge funds. Still, Mr. Icahn's decision does seem a marked contrast to what we've previously seen in financial markets, particularly given a statement in his letter explaining the decision: "While it may sound 'corny' to some, the losses that were incurred by investors in our funds in 2008 bothered me a great deal more, in many respects, than my own losses."

Whatever his full motives, Mr. Icahn's actions are a reminder that "too good" opportunities deserve our skepticism. I'm the first to admit that it's very tempting to turn a blind eye to bad market behavior, but we'd be wise to think twice.

If you push them, many investors will admit that they're unclear about the level of risk they're assuming, but their actual behavior may indicate that they think making money in this market requires you to turn off your brain and dance until the music stops. At some point, we have to accept that enabling the bad behavior of others will ultimately hurt us. To pretend that we're immune only makes the fall that much harder.

A version of this post appeared previously at The New York Times.

Carl Richards is a financial planner and the director of investor education for the BAM ALLIANCE, a community of more than 130 independent wealth management firms throughout the United States. Visit Behavior Gap for more of Carl's sketches and writings.

The Motley Fool has a disclosure policy.

Top 10 Medical Companies To Own In Right Now

Abbott Labs' second-quarter earnings beat Wall Street's projections, as the company continues to perform well in its post-branded pharmaceuticals life. However, Abbott's medical device business couldn't keep up its more successful segments, even as the company has made progress in key areas such as drug-eluting stents, while advancing into emerging markets.Overall, device sales fell 1.6% year-over-year for the quarter.

Abbott's made a few recent acquisitions to beef up this business, and the company's stellar Xience stent remains atop the industry. Are Abbott's plans for the future enough to turn around this division's slumping sales, however? Below, Motley Fool contributor Dan Carroll tells you what you need to know about Abbott's device business, and how this segment will impact this well-diversified company -- and your portfolio -- in the future.

Top 10 Medical Companies To Own In Right Now: Cerus Corporation(CERS)

Cerus Corporation, a biomedical products company, engages in the development and commercialization of the INTERCEPT Blood System. The company?s INTERCEPT system is designed to inactivate blood-borne pathogens in donated blood components intended for transfusion. It markets the INTERCEPT system for platelets and plasma primarily in Europe, the Russian Federation, and the Middle East. The company is also developing INTERCEPT Blood System for red blood cells or red blood cell system, which is designed to inactivate blood-borne pathogens in donated red blood cells for transfusion. Cerus Corporation has collaboration agreements with Baxter International, Inc.; and BioOne Corporation, as well as the United States Armed Forces. The company was founded in 1991 and is based in Concord, California.

Advisors' Opinion:

• [By Michael Shulman]

  Cerus (NASDAQ: CERS) developed and markets the INTERCEPT Blood System, which is designed to inactivate blood-borne pathogens in blood components so the blood can be used in transfusions. In other words, it “cleans” donated blood of viruses, bacteria and parasites.

  Cerus is pretty much the only game in town with this remarkable technology, and it has gained approval in most large European countries. Why not the United States? Well, management has not stood up to the FDA. The approval has been held up by one member of the FDA even though Cerus hit the primary endpoints in its pivotal Phase III trial and is receiving grants from the Department of Defense.

  The FDA should quit dragging its feet eventually. There is no scientific or product risk in this stock. Their system works. My target price is $14 in one to three years.

Top 10 Medical Companies To Own In Right Now: Boston Scientific Corp (BSX)

Boston Scientific Corporation is a developer, manufacturer and marketer of medical devices that are used in a range of interventional medical specialties. During the year ended December 31, 2011, its products were offered for sale by seven core businesses: Interventional Cardiology, CRM, Endoscopy, Peripheral Interventions, Urology/Women�� Health, Neuromodulation, and Electrophysiology. In January 2011, it completed the acquisition of Intelect Medical, Inc. In January 2011, it completed the acquisition of Sadra Medical, Inc. In March 2011, the Company completed the acquisition of Atritech, Inc. In February 2011, it announced the acquisitions of S.I. Therapies and ReVascular Therapeutics, Inc. In January 2011, the Company sold its Neurovascular business to Stryker Corporation. In June 2012, the Company acquired Cameron Health, Inc. of San Clemente, California and, as a result, added to its product portfolio subcutaneous implantable cardioverter defibrillator, called the S-ICD System.

Interventional Cardiology

The Company offers coronary stent product. Coronary stents are tiny, mesh tubes used in the treatment of coronary artery disease, which are implanted in patients to prop open arteries and facilitate blood flow to and from the heart. The Company offers a two-drug platform strategy with its paclitaxel-eluting and everolimus-eluting stent system offerings, and it offers a range of stent sizes. The Company markets its next-generation internally-developed and self-manufactured PROMUS Element stent system in the United States, its Europe/Middle East/Africa (EMEA) region and certain Inter-Continental countries, including China and India. It markets the PROMUS everolimus-eluting stent system, supplied to the Company by Abbott Laboratories, in Japan. It also markets its TAXUS paclitaxel-eluting stent line, including its third-generation TAXUS Element paclitaxel-eluting stent system in the U.nited States, Japan, EMEA and certain Inter-Continental countries.

The Compa! ny markets a line of products used to treat patients with atherosclerosis, a principal cause of coronary artery obstructive disease. Its product offerings include balloon catheters, rotational atherectomy systems, guide wires, guide catheters, embolic protection devices, and diagnostic catheters used in percutaneous transluminal coronary angioplasty (PTCA). The Company markets a family of intraluminal catheter-directed ultrasound imaging catheters and systems for use in coronary arteries and heart chambers, as well as certain peripheral vessels. The iLab Ultrasound Imaging System continues as its flagship console and is compatible with its line of imaging catheters. The system is designed to enhance the diagnosis and treatment of blocked vessels and heart disorders. Sadra is developing a repositionable and retrievable device for transcatheter aortic valve replacement (TAVR) to treat patients with severe aortic stenosis. The Lotus Valve System consists of a stent-mounted tissue valve prosthesis and catheter delivery system for guidance and placement of the valve. Atritech has developed a device designed to close the left atrial appendage in patients with atrial fibrillation who are at risk for ischemic stroke. The WATCHMAN Left Atrial Appendage Closure Technology, developed by Atritech, is the first device proven in a randomized clinical trial to offer an alternative to anticoagulant drugs, and is approved for use in CE Mark countries.

Cardiac Rhythm Management

The Company develops, manufactures and markets a variety of implantable devices that monitor the heart and deliver electricity to treat cardiac abnormalities, including Implantable cardioverter defibrillator (ICD) systems used to detect and treat abnormally fast heart rhythms (tachycardia) that could result in sudden cardiac death, including implantable cardiac resynchronization therapy defibrillator (CRT-D) systems used to treat heart failure, and implantable pacemaker systems used to manage slow or irregular heart rhyth! ms (brady! cardia), including implantable cardiac resynchronization therapy pacemaker (CRT-P) systems used to treat heart failure. Its product offerings include its COGNIS cardiac resynchronization therapy defibrillator (CRT-D), its TELIGEN ICD systems and its ALTRUA family of pacemaker systems. During 2011, it began the United States launch of its next-generation line of defibrillators, INCEPTA, ENERGEN and PUNCTUA.

Endoscopy

The Company markets a range of products to diagnose, treat and ease a variety of digestive diseases, including those affecting the esophagus, stomach, liver, pancreas, duodenum, and colon. Common disease states include esophagitis, portal hypertension, peptic ulcers as well as esophageal, biliary, pancreatic and colonic cancer. The Company offers the Radial Jaw 4 Single-Use Biopsy Forceps, which are designed to enable collection of large high-quality tissue specimens without the need to use large channel therapeutic endoscopes. Its exclusive line of RX Biliary System devices are designed to provide greater access and control for physicians to diagnose and treat challenging conditions of the bile ducts, such as removing gallstones, opening obstructed bile ducts and obtaining biopsies in suspected tumors. The Company also markets the Spyglass Direct Visualization System for direct imaging of the pancreatico-biliary system. The Spyglass System is a single-operator cholangioscopy device that offers clinicians a direct visualization of the pancreatico-biliary system and includes supporting devices for tissue acquisition, stone management and lithotripsy. Its products also include the WallFlex family of stents, in particular, the WallFlex Biliary line and WallFlex Esophageal line; and in 2011, the Company launched its Advanix Biliary Plastic Stent System and the Expect Endoscopic Ultrasound Aspiration Needle in the United States and certain international markets. Its Resolution Clip Device is an endoscopic mechanical clip designed to treat gastrointestinal bleeding.

T! he Company markets devices to diagnose, treat and ease pulmonary disease systems within the airway and lungs. Its products are designed to help perform biopsies, retrieve foreign bodies from the airway, open narrowings of an airway, stop internal bleeding, and ease symptoms of some types of airway cancers. Its product line includes pulmonary biopsy forceps, transbronchial aspiration needles, cytology brushes and tracheobronchial stents used to dilate narrowed airway passages or for tumor management. Asthmatx, Inc. designs, manufactures and markets a less-invasive, catheter-based bronchial thermoplasty procedure for the treatment of severe persistent asthma. The Alair Bronchial Thermoplasty System, developed by Asthmatx, has both CE Mark and Food and Drug Administration (FDA) approval and is the first device-based asthma treatment approved by the FDA.

Peripheral Interventions

The Company sells various products designed to treat patients with peripheral disease, including a line of medical devices used in percutaneous transluminal angioplasty and peripheral vascular stenting. Its peripheral product offerings include stents, balloon catheters, wires, peripheral embolization devices and vena cava filters. In 2010 and 2011, it launched several of its products internationally, including the EPIC self-expanding nitinol stent system in certain international markets, and the Carotid WALLSTENT stent system in Japan. The Company launched three new peripheral angioplasty balloons in 2011, including its next-generation Mustang percutaneous transluminal angioplasty (PTA) balloon, its Coyote balloon catheter, a highly deliverable and ultra-low profile balloon dilatation catheter designed for a range of peripheral angioplasty procedures and its Charger PTA Balloon Catheter, a 0.035 inch percutaneous transluminal angioplasty balloon catheter designed for post-stent dilatation, as well as conventional balloon angioplasty to open blocked peripheral arteries. The Company has commenced a limited ma! rket rele! ase of its OFFROAD re-entry catheter system in certain international markets, and in February 2012, it launched its TRUEPATH intraluminal CTO device in the United States.

The Company sells products designed to treat patients with non-vascular disease. Its non-vascular suite of products include biliary stents, drainage catheters and micro-puncture sets designed to treat, diagnose and ease various forms of benign and malignant tumors. The Company continues to market its extensive line of Interventional Oncology product solutions, including the Renegade HI-FLO Fathom microcatheter and guidewire system and Interlock - 35 Fibered IDC Occlusion System for peripheral embolization. The Company�� FilterWire EZ Embolic Protection System is a filter designed to capture embolic material that may become dislodged during a procedure, which could otherwise travel into the microvasculature where it could cause a heart attack or stroke. It is commercially available in the United States, its EMEA region and certain Inter-Continental countries for multiple indications, including the treatment of disease in peripheral, coronary and carotid vessels. It is also available in the United States for the treatment of saphenous vein grafts and carotid artery stenting procedures.

Urology/Women�� Health

The Company�� Urology/Women�� Health division develops, manufactures and sells devices to treat various urological and gynecological disorders. The Company sells a variety of products designed to treat patients with urinary stone disease, stress urinary incontinence, pelvic organ prolapse and excessive uterine bleeding. The Company offers a line of stone management products, including ureteral stents, wires, lithotripsy devices, stone retrieval devices, sheaths, balloons and catheters.

The Company markets a range of devices for the treatment of conditions, such as female urinary incontinence, pelvic floor reconstruction (rebuilding of the anatomy to its original state), and ! menorrhag! ia (excessive menstrual bleeding). It offers a breadth of mid-urethral sling products, sling materials, graft materials, pelvic floor reconstruction kits, and suturing devices. The Company markets its Genesys Hydro ThermAblator (HTA) system, a next-generation endometrial ablation system designed to ablate the endometrial lining of the uterus in premenopausal women with menorrhagia. The Genesys HTA System features a smaller and lighter console, simplified set-up requirements, and an enhanced graphic user interface and is designed to improve operating performance.

Neuromodulation

The Company within its Neuromodulation business markets the Precision Spinal Cord Stimulation (SCS) system, used for the management of chronic pain. In 2011, the Company launched its Clik Anchor for its Precision Plus SCS System, a rechargeable SCS device for chronic pain management. During 2011, it received FDA approval for and launched the Infinion 16 Percutaneous Lead, a 16-contact percutaneous lead. The Company also markets the Linear 3-4 and Linear 3-6 Percutaneous Leads for use with its SCS systems, which are designed to provide physicians more treatment options for their chronic pain patients. Intelect Medical, Inc. is a development-stage company developing advanced visualization and programming for the Vercise system.

Electrophysiology

The Company within its Electrophysiology business develops less-invasive medical technologies used in the diagnosis and treatment of rate and rhythm disorders of the heart. Included in its product offerings are radio frequency (RF) generators, steerable RF ablation catheters, intracardiac ultrasound catheters, diagnostic catheters, delivery sheaths, and other accessories. Its products include the Blazer and Blazer Prime line of temperature ablation catheters, designed to deliver enhanced performance, responsiveness, and durability. Its cooled ablation portfolio includes the closed-loop irrigated catheter on the market, the Chilli II cooled! ablation! catheter, and the newly launched Blazer Open-Irrigated ablation catheter with a Total Tip Cooling Design.

The Company competes with Abbott Laboratories, Medtronic, Inc., St. Jude Medical, Inc. and Johnson & Johnson.

Best Financial Companies For 2014: Galena Biopharma Inc (GALE.PH)

Galena Biopharma, Inc. (Galena), formerly RXi Pharmaceuticals Corporation, incorporated on April 3, 2006, is a biotechnology company focused on discovering, developing and commercializing therapies addressing unmet medical needs using targeted biotherapeutics. The Company is pursuing the development of cancer therapeutics using peptide-based immunotherapy products, including its main product candidate, NeuVaxTM (E75), for the treatment of breast cancer and other tumors. NeuVax is a peptide-based immunotherapy intended to reduce the recurrence of breast cancer in low-to-intermediate HER2-positive breast cancer patients not eligible for trastuzumab (Herceptin; Genentech/Roche). On January 19, 2012, the Company initiated enrollment in its Phase 3 PRESENT clinical trial for NeuVax (E75 peptide plus GM-CSF) vaccine in low-to-intermediate HER2 1+ and 2+ breast cancer patients in the adjuvant setting to prevent recurrence (Clinicaltrials.gov identifier NCT01479244). The Preven tion of Recurrence in Early-Stage, Node-Positive Breast Cancer with Low to Intermediate HER2 Expression with NeuVax Treatment study is a randomized, multicenter, multinational clinical trial that will enroll approximately 700 breast cancer patients. The Company�� Phase 2 trial of NeuVax achieved its primary endpoint of disease-free survival (DFS). On April 13, 2011, the Company completed its acquisition of Apthera, Inc.,(Apthera).

The Company focuses to start a Phase 2 trial comparing NeuVax in combination with trastuzumab (Herceptin) versus trastuzumab, alone, in a 300-patient, randomized study in the adjuvant breast cancer setting. The Company's second product candidate, Folate Binding Protein-E39 (FBP), is a vaccine, consisting of the peptides E39 and J65, aimed at preventing the recurrence of ovarian, endometrial, and breast cancers. On February 14, 2012, the Company announced the initiation of a Phase 1/2 clinical trial in two gynecological cancers: ovari an and endometrial adenocarcinomas. Folate binding protein! h! as very limited tissue distribution and expression in non-malignant tissue and is over-expressed in more than 90% of ovarian and endometrial cancers, as well as in 20% to 50% of breast, lung, colorectal and renal cell carcinomas.

In April 2011, the Company acquired Apthera Inc and its NeuVax product candidate. The Company focuses on developing a pipeline of immunotherapy product candidates for the treatment of various cancers based on the E75 peptide, the advanced of which is NeuVax, which is targeted at preventing the recurrence of breast cancer. NeuVax has had positive Phase 1/2 clinical trial results for the prevention of breast cancer recurrence in patients who have had breast cancer and received the standard of care treatment (surgery, chemotherapy, radiotherapy and hormonal therapy as indicated). The Company had also initiated its Phase 3 PRESENT clinical trial of NeuVax for the prevention of breast cancer recurrence in early-stage low-to-intermediate HER2 breast cancer patients. NeuVax directs killer T-cells to target and destroy cancer cells that express HER2/neu, a protein associated with epithelial tumors in breast, ovarian, pancreatic, colon, bladder and prostate cancers. NeuVax is comprised of a HER2/neu-derived peptide called E75. E75 is a nine-amino acid sequence that is immunogenic (produces an immune response) and GM-CSF is a commercially available protein that acts to stimulate and activate components of the immune system such as macrophages and dendritic cells.

The Company also develops novel applications for NeuVax based on preclinical studies and phases 2 clinical trials which suggest that combining NeuVax and trastuzumab (Herceptin; Genentech/Roche) can increase antigen presentation by tumor cells by promoting receptor internalization and subsequent proteosomal degradation of the HER2 protein. The Company also is pursuing additional therapeutic indications for NeuVax that are in Phase 1/2 clinical trials. RXI-109, is a dermal anti-scarring therapy that ! targ! ets! conne! ctive tissue growth factor (CTGF) and that may inhibit connective tissue formation in human fibrotic disease.

The Company competes with Roche Laboratories, Inc., Pfizer Inc., Bayer HealthCare AG, Sanofi-Aventis, US, LLC, Amgen, Inc., GlaxoSmithKline plc, Renovo Group plc, CoDa Therapeutics, Inc., Sirnaomics, Inc., FirstString Research, Inc., Merz Pharmaceuticals, LLC, Capstone Therapeutics, Halscion, Inc., Garnet Bio Therapeutics, Inc., AkPharma Inc., Promedior, Inc., Kissei Pharmaceutical Co., Ltd., Eyegene, Derma Sciences, Inc., Healthpoint Biotherapeutics, Pharmaxon, Excaliard Pharmaceuticals, Inc., Alnylam Pharmaceuticals, Inc., Marina Biotech, Inc., Tacere Therapeutics, Inc., Benitec Limited, OPKO Health, Inc., Silence Therapeutics plc, Quark Pharmaceuticals, Inc., Rosetta Genomics Ltd., Lorus Therapeutics, Inc., Tekmira Pharmaceuticals Corporation, Arrowhead Research Corporation, Regulus Therapeutics Inc. and Santaris.

Top 10 Medical Companies To Own In Right Now: Algeta ASA (ALGETA.OL)

Algeta ASA is a Norway-based biotechnology company engaged in the development of targeted cancer therapies based on its alpha-pharmaceutical platform. The Company�� principal product is Alpharadin for the treatment of bone metastases resulting from castration-resistant prostate cancer. The Company�� pipeline also includes Alpharadin for the treatment of bone metastases resulting from breast cancer, a combination of Alpharadin with Taxotere for the treatment of bone metastases resulting from prostate cancer and Thorium-227 showing various cancer indications. The Company develops Alpharadin in a development and marketing cooperation with Bayer Schering Pharma. Algeta ASA is active through the two wholly owned subsidiaries, Algeta Innovations AS and Algeta UK Limited. On April 12, 2012, the Company announced that it estabilished a subsidiary active in the United States, Algeta US.

Top 10 Medical Companies To Own In Right Now: Scancell Holdings PLC (SCLP)

Scancell Holdings PLC is a United Kingdom-based company. The Company�� principal activity of the consists of the discovery and development of monoclonal antibodies and vaccines for the treatment of cancer. In April 2012, the Company completed recruitment to the Phase 1 clinical trial of SCIBI. In May 2012, the Company commenced recruitment and treatment of the first patient in the second part of it Phase 1/2 clinical trial of SCIBI. The Phase 2 part of the trial is conducted in five United Kingdom centers in Nottingham, Manchester, Newcastle, Leeds, and Southampton. On August 15, 2012, the Company announced the development of a platform technology, Moditope.

Top 10 Medical Companies To Own In Right Now: Compugen Ltd.(CGEN)

Compugen Ltd. operates as a drug and diagnostic discovery company based on computer-based discovery capabilities to predict and select novel product candidates. Through in silico prediction and selection, the resulting novel molecules are synthesized and validated utilizing traditional in vitro and in vivo experimental procedures. The company provides these validated product candidates to pharmaceutical, biotech, and diagnostic companies under licensing and other commercialization arrangements. Its research and discovery efforts are focused primarily on therapeutic proteins and peptides, and monoclonal antibodies, and primarily in the fields of immunology and oncology. Its therapeutic peptide and protein related platforms include Protein Family Members Discovery Platform, Protein-Protein Interaction Blockers, GPCR Therapeutic Peptide Ligands, Disease-Associated Conformation Blockers, Intracellular Drug Delivery, Viral Peptides, and Splice Variant based Therapeutic Proteins . The company?s monoclonal antibody related platforms comprise Monoclonal Antibody Targets. Its other therapeutic and diagnostic platforms consist of Nucleic-Acid Disease Markers, Protein Disease Markers, Nucleic-Acid Preclinical Toxicity Markers, Non-SNP Drug Response Markers, and New Indications. Its therapeutic peptide and protein product candidates comprise CGEN-15001, a novel protein for the treatment of autoimmune disorders; CGEN-25017, a novel peptide antagonist of the Angiopoietin/Tie-2 pathway; CGEN-855, a peptide agonist of the FPRL1 GPCR receptor; CGEN-856 and CGEN-857, which are MAS GPCR peptide agonists; CGEN-25007, an antagonist of the gp96 protein; and CGEN-25009, a peptide of the LGR7 receptor. The company also offers monoclonal antibody target product candidates, including CGEN-671, a drug for multiple epithelial tumors; CGEN-928, a drug for multiple myeloma; and CGEN-15001T, a novel B7/CD28 family member. Compugen Ltd. was founded in 1993 and is based in Te l Aviv, Israel.

Advisors' Opinion:

• [By Michael Shulman]

  Compugen Ltd. (NASDAQ: CGEN) is the world’s leading molecular intellectual property company. Based in Israel, the company has revolutionized the early phases of drug development through a highly automated process of exploring and selecting molecules with the greatest promise to serve as the basis for a particular treatment.

  The company licenses its peptides and proteins for a fee to the who’s who of the drug industry, and also receives a back-end cut of any drug that makes it to market using its discoveries.

  Compugen just announced that it entered into an agreement with Baize Investments under which it will receive $5 million in R&D funding. My target for CGEN is $20 in three to five years.

Top 10 Medical Companies To Own In Right Now: Terumo (TRUMY.PK)

TERUMO CORPORATION operates in four business segment. The Hospital Products segment is engaged in the manufacture, purchase and sale of hospital medical equipment, pharmaceuticals, peritoneal dialysis and diabetes related products, and the rental of hospital medical equipment and home medical products. The Cardiac and Vascular Area segment is involved in the manufacture, purchase and sale of catheter systems, artificial heart and lungs, as well as artificial blood vessels, the manufacture and sale of therapeutic coils for cerebral aneurysm, sampling equipment and kits for platelet-rich plasma and concentrated bone-marrow cell, and large-bore sheaths. The Blood System segment is engaged in the manufacture, purchase and sale of blood transfusion-related products. The Healthcare segment manufactures and sells healthcare related products. As of March 31, 2012, the Company had 79 subsidiaries and 2 associated companies. Advisors' Opinion:

• [By Robert Holmes]

   Analyst Mayo Mita says the Japanese earthquake and tsunami was a setback for the company, Terumo has a more visible growth stage coming.

  "Over the next five years we see clear growth from China, the NOBORI drug eluting stent (DES), the U.S. catheter business, and the blood management business," Mita writes.

  The base-case Mita lays out is for a 26% rise in share price next year, although Mita's most bullish forecast has shares up twice that. On the downside, Mita's most bearish scenario has shares falling 11% in the next 12 months.

  The chart below shows shares of Terumo that trade on the Pink Sheets in the U.S., but Morgan Stanley is recommending buying shares in Tokyo.

Top 10 Medical Companies To Own In Right Now: Navidea Biopharmaceuticals Inc (NAVB)

Navidea Biopharmaceuticals, Inc. (Navidea), formerly Neoprobe Corporation, incorporated in 1983, is a biopharmaceutical company focused on the development and commercialization of precision diagnostic agents. As of December 31, 2011, the Company�� radiopharmaceutical development programs included Lymphoseek (Lymphoseek, Kit for the Preparation of Technetium Tc99m for Injection), a radiopharmaceutical agent for lymph node mapping; AZD4694, an imaging agent, and RIGScan, a tumor antigen-specific targeting agent. In January 2012, the Company executed an option agreement with Alseres Pharmaceuticals, Inc. (Alseres) to license [123I]-E-IACFT Injection, also called Altropane, an Iodine-123 radiolabeled imaging agent, being developed as an aid in the diagnosis of Parkinson�� disease, movement disorders and dementia. In August 2011, the Company sold its gamma detection device line of business (the GDS Business) to Devicor Medical Products, Inc.

Lymphoseek

Navidea�� pipeline includes clinical-stage radiopharmaceutical agents used to identify the presence and status of disease. Lymphoseek (Kit for the Preparation of Technetium Tc99m for Injection) is a lymph node targeting agent intended for use in intraoperative lymphatic mapping (ILM) procedures and lymphoscintigraphy employed in the overall diagnostic assessment of certain solid tumor cancers. The lymph system is a component of the body�� immune system. The key components of the lymph system are lymph nodes-small anatomic structures that contain disease-fighting lymphocytes, filter lymph of bacteria and cancer cells, and signal infection in response to heightened levels of pathogens. In Navidea�� Phase III clinical studies of Lymphoseek, it detected over 99% of positive nodes identified by vital blue dye (VBD). As of December 31, 2011, Navidea, in co-operation with UC, San Diego affiliate (UCSD), completed or initiated five Phase I clinical trials, one multi-center Phase II trial and three multi-center Phase II trials inv! olving Lymphoseek. Two Phase III studies were completed in subjects with breast cancer and melanoma. During the year ended December 31, 2011, data from NEO3-09 were released, which indicated that all primary and secondary endpoints for the study were met. As of December 31, 2011, third Phase III clinical trial for Lymphoseek in subjects with head and neck squamous cell carcinoma (NEO3-06) was in progress.

AZD4694

AZD4694 is a Fluorine-18 labeled precision radiopharmaceutical candidate for use in the imaging and evaluation of patients with signs or symptoms of cognitive impairment such as Alzheimer's disease (AD). It binds to beta-amyloid deposits in the brain that can then be imaged in positron emission tomography (PET) scans. Amyloid plaque pathology is a required feature of AD and the presence of amyloid pathology is a supportive feature for diagnosis of probable AD. Patients who are negative for amyloid pathology do not have AD. AZD4694 has been studied in several clinical trials. Clinical studies through Phase IIa have included more than 80 patients to date, both suspected AD patients and healthy volunteers. No significant adverse events have been observed. Results suggest that AZD4694 has the ability to image patients quickly and safely with high sensitivity.

RadioImmunoGuided Surgery

As of December 31, 2011, RIGScan had been studied in a number of clinical trials, including Phase III studies. Navidea has conducted two Phase III studies, NEO2-13 and NEO2-14, of RIGScan in patients with primary and metastatic colorectal cancer, respectively. Both studies were multi-institutional involving cancer treatment institutions in the United States, Israel, and the European Union.

The Company competes with Pharmalucence, Eli Lilly, Bayer Schering, General Electric and GE Healthcare.

Top 10 Medical Companies To Own In Right Now: Cell Therapeutics Inc (CTIC.A)

Cell Therapeutics, Inc. (CTI), incorporated in 1991, develops, acquires and commercializes treatments for cancer. The Company�� research, development, acquisition and in-licensing activities concentrate on identifying and developing new ways to treat cancer. As of December 31, 2011, CTI focused its efforts on Pixuvri (pixantrone dimaleate) (Pixuvri), OPAXIO (paclitaxel poliglumex) (OPAXIO), tosedostat, brostallicin and bisplatinates. As of December 31, 2011, it developed Pixuvri, an anthracycline derivative for the treatment of hematologic malignancies and solid tumors. Another late-stage drug candidate of the Company, OPAXIO, is being studied as a potential maintenance therapy for women with advanced stage ovarian cancer, who achieve a complete remission following first-line therapy with paclitaxel and carboplatin. As of December 31, 2011, it also developed tosedostat in collaboration with Chroma Therapeutics, Ltd. (Chroma). On May 31, 2012, CTI completed its acquisi tion gaining worldwide rights to S*BIO Pte Ltd.'s (S*BIO) pacritinib.

Pixuvri

As of December 31, 2011, the Company developed Pixuvri, an aza-anthracenedione derivative, for the treatment of non-Hodgkin�� lymphoma (NHL), and various other hematologic malignancies, and solid tumors. Pixuvri was studied in the Company�� EXTEND, or PIX301, clinical trial, which was a phase III single-agent trial of Pixuvri for patients with relapsed, refractory aggressive NHL who received two or more prior therapies and who were sensitive to treatment with anthracyclines. On September 28, 2011, CTI announced that a second independent radiology assessment of response and progression endpoint data from its PIX301 clinical trial of Pixuvri was achieved with statistical significance. The results of the EXTEND trial met its primary endpoint and showed that patients randomized to treatment with Pixuvri achieved a significantly higher rate of confirmed and unconfirmed co mplete response compared to patients treated with standard! c! hemotherapy had a significantly increased overall response rate and experienced a statistically significant improvement in median progression free survival. Pixuvri had predictable and manageable toxicities when administered at the proposed dose and schedule in the EXTEND clinical trial in heavily pre-treated patients. In March 2011, the Company initiated the PIX-R trial to study Pixuvri in combination with rituximab in patients with relapsed/refractory diffuse large B-cell lymphoma (DLBCL). Pixuvri has also been studied in patients with HER2-negative metastatic breast cancer who have tumor progression after at least two, but not more than three, prior chemotherapy regimens. In the second quarter of 2010, the NCCTG opened this phase II study for enrollment. The study is closed to accrual and results are expected to be reported by the NCCTG later in 2012.

OPAXIO

OPAXIO is the Company�� biologically-enhanced chemotherapeutic agent that links pacli taxel to a biodegradable polyglutamate polymer, resulting in a new chemical entity. As of December 31, 2011, the Company focused its development of OPAXIO on ovarian, brain, esophageal, head and neck cancer. OPAXIO was designed to improve the delivery of paclitaxel to tumor tissue while protecting normal tissue from toxic side effects. In November 2010, results were presented by the Brown University Oncology Group from a phase II trial of OPAXIO combined with temozolomide (TMZ), and radiotherapy in patients with newly-diagnosed, high-grade gliomas, a type of brain cancer. The trial demonstrated a high rate of complete and partial responses and a high rate of six month progression free survival (PFS). Based on these results, the Brown University Oncology Group has initiated a randomized, multicenter, phase II study of OPAXIO and standard radiotherapy versus TMZ and radiotherapy for newly diagnosed patients with glioblastoma with an active gene termed MGMT that reduces respons iveness to TMZ. A phase I/II study of OPAXIO combined ! with r! a! diothera! py and cisplatin was initiated by SUNY Upstate Medical University, in patients with locally advanced head and neck cancer.

Tosedostat

In March 2011, the Company entered into a co-development and license agreement with Chroma Therapeutics, Ltd. (Chroma), providing the Company with marketing and co-development rights to Chroma�� drug candidate, tosedostat, in North, Central and South America. Tosedostat is an oral, aminopeptidase inhibitor that has demonstrated anti-tumor responses in blood related cancers and solid tumors in phase I-II clinical trials. Interim results from the phase II OPAL study of tosedostat in elderly patients with relapsed or refractory acute myeloid leukemia (AML) showed that once-daily, oral doses of tosedostat had predictable and manageable toxicities and results demonstrated response rates, including a high-response rate among patients who received prior hypomethylating agents, which are used to treat myelodysplastic synd rome (MDS), a precursor of AML.

Brostallicin

As of December 31, 2011, the Company developed brostallicin through its wholly owned subsidiary, Systems Medicine LLC, which holds rights to use, develop, import and export brostallicin. Brostallicin is a synthetic deoxyribonucleic acid (DNA) minor groove binding agent that has demonstrated anti-tumor activity and a favorable safety profile in clinical trials, in which more than 230 patients have been treated as of December 31, 2011. The Company uses a genomic-based platform to guide the development of brostallicin. A phase II study of brostallicin in relapsed, refractory soft tissue sarcoma met its predefined activity and safety hurdles and resulted in a first-line phase II clinical trial study that was conducted by the European Organization for Research and Treatment of Cancer (EORTC).

The Company competes with Bristol-Myers Squibb Company, Sanofi-Aventis, Pfizer, Roche Group, Genentech, Inc., Astellas Pharma, Eli Lilly and Company, Cel! gene, Tel! ik! , Inc., T! EVA Pharmaceuticals Industries Ltd. and PharmaMar.

Top 10 Medical Companies To Own In Right Now: Spectrum Pharmaceuticals Inc.(SPPI)

Spectrum Pharmaceuticals, Inc., a commercial-stage biotechnology company, primarily focuses on oncology and hematology. The company engages in acquiring, developing, and commercializing a broad and diverse pipeline of late-stage clinical and commercial products. It markets Zevalin, a prescribed form of cancer therapy, radioimmunotherapy; and Fusilev, a novel folate analog formulation and the pharmacologically active isomer of the racemic compound, calcium leucovorin. The company?s drugs in late stage development include Apaziquone, an anti-cancer agent; and Belinostat, a histone deacytelase inhibitor. Its drugs in development also include Ozarelix a luteinizing hormone releasing hormone antagonist, which is in Phase II clinical stage; SPI-1620, a peptide agonist of endothelin B receptors, which is in Phase I clinical stage; and RenaZorb, a lanthanum-based nanoparticle phosphate binding agent, which is in preclinical stage. The company was formerly known as NeoTherapeutics, Inc. and changed its name to Spectrum Pharmaceuticals, Inc. in December 2002. Spectrum Pharmaceuticals, Inc. was founded in 1987 and is based in Henderson, Nevada.

Advisors' Opinion:

• [By Michael Shulman]

  Spectrum Pharmaceuticals (NASDAQ: SPPI) is a commercial-stage biotechnology company with a primary focus in oncology and hematology The company specializes in rescuing treatments abandoned, in development stages, by other companies.

  It has had a tremendous run based on market introductions and partnerships in the past two years, but now has even greater potential for a blockbuster with a drug called Zevalin for non-Hodgkin’s lymphoma. This drug is currently approved as a salvage and adjunct therapy, and the company is in mid-stage trials for the use of Zevalin as a front-line treatment, which would be a much larger market.

  The risk in this stock is high. It could be cut in half or worse on bad news from one of several clinical trials. However, successful trial results could take this stock from under $7 to $32 in one to three years. SPPI could also become a takeover target.

• [By Roberto Pedone]

  Another stock that's quickly moving within range of triggering a big time breakout trade isSpectrum Pharmaceuticals (SPPI), which is a commercial stage biotechnology company integrated in commercial and drug development operations, primarily in oncology and hematology. This stock has been destroyed by the short-sellers so far in 2013, with shares off by over 30%.

  If you look at the chart for Spectrum Pharmaceuticals, you'll see that this stock has been trending sideways for the last two months in a consolidation chart pattern, with shares moving between $6.92 on the downside and $7.77 on the upside. This sideways pattern is coming after shares of SPPI gapped down sharply back in March from $12.47 to below $8 a share with heavy downside volume. Shares of SPPI are now quickly moving within range of triggering a major breakout trade above the upper end of its recent sideways chart pattern.

  Market players should now look for long-biased trades in SPPI if it manages to break out above some near-term overhead resistance levels at $7.65 to $7.77 a share and then once it takes out its 50-day at $8 and its gap down day high at $8.26 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average action of 1.43 million shares. If that breakout hits soon, then SPPI will set up to re-fill some of its previous gap down zone that started at $12.47 a share. Some possible upside targets if SPPI gets into that gap with volume are $9.50 to its 200-day at $10.89 a share.

  Traders can look to buy SPPI off any weakness to anticipate that breakout and simply use a stop that sits right below some near-term support levels at $7.09 to $7 a share. One can also buy SPPI off strength once it clears those breakout levels with volume and then simply use a stop at around $7 a share.

  This stock is an absolute favorite target of the short-sellers, since the current short interest as a percentage of the float for SPPI is extremely high at 37.4%. This stock has explosive upside potential if it trades into that gap with volume, so make sure to have it on your breakout trading radar.