Sunday, June 30, 2013

The 2 Most Popular Stocks This Week

Stocks have just put in their best first-half performance since 1998, with the S&P 500 (SNPINDEX: ^GSPC  ) and the narrower, price-weighted Dow Jones Industrial Average (DJINDICES: ^DJI  ) adding 12.6% and 13.8% (price return), respectively.

Let's take a quick look at this week's two most popular stocks. When I say "popular," I don't mean the ones that performed best, but those that popped up on investors' radars -- for good or bad reasons. Here, then, is who made a splash.

Noodles & Company (NASDAQ: NDLS  )
Thursday evening, on the eve of the initial public offering of fast-casual dining chain Noodles & Company, I wrote:

Foolish investors know that IPOs are a beauty contest and are, as a result, skeptical of the "value proposition." At the $16 midpoint of the new pricing range, shares of Noodles & Company would be valued at 52 times trailing normalized earnings per share, or 31 times tangible book value per share. In this case, that skepticism looks richly deserved.

That didn't stop underwriters from pricing the shares at $18, or $1 above the top end of a $15 to $17 pricing range that had already been raised once. That, however, was nothing compared with what transpired once the shares hit the secondary market, as the shares opened at $32; by the end of the session, they settled at $36.75 -- better than a double with respect to the IPO price.

That's a wonderful result for investors who were able to obtain an allocation of shares as part of the IPO. For the company itself, however, it ought to be disappointing. Why? Consider what actually occurred: It sold shares at a price that the market immediately judged was equal to just half their intrinsic value -- in other words, the company appears to have left a lot of money on the table.

Mind you, it's legitimate to ask whether the market has made a rational assessment of the shares' intrinsic value, which it now pegs at 118 times trailing normalized normalized earnings per share and 73 times tangible book value per share. This was a small IPO (Noodles raised less than $100 million), and decent investor interest can have a big impact on price under those conditions. This could well be a situation in which liquidity trumped valuation discipline.

BlackBerry (NASDAQ: BBRY  )
Shares of BlackBerry fell by more than a quarter on Friday, as the company disappointed with the results of its fiscal first-quarter ended June 1. The magnitude of the stock's loss hints at the magnitude of the negative surprise, and, indeed, the company lost $0.06 per share (excluding one-time items) where analysts had been expecting a $0.13-per-share profit.

The company is struggling for oxygen in a market increasingly dominated by Apple's iPhone and devices running on Google's Android operating system. Friday's report provided little to no evidence that the company is having (or would have) any success swimming against that tide; BlackBerry didn't provide unit shipment numbers for the Q10 or the Z10, the newly launched products under its new BlackBerry 10 iteration.

Shares of BlackBerry look cheap on a number of metrics (they're trading at less than their tangible book value, for example), but I'd caution investors that this is a speculative situation, not an investment operation; "cheap" stocks of companies battling for survival can easily get a lot cheaper.

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

A Closer Look at Exxon's LNG Export Venture

Bally Tech to Offer Payment Options for Online Gambling

Gaming specialist Bally Technologies (NYSE: BYI  ) has teamed up with U.K.-based payment processor Optimal Payments to offer online gamblers payment options and related services.

Under the terms of the agreement, Bally will integrate Optimal's NETBANX payment platform into its solution for operators in the regulated U.S. gaming market. Bally's customers will be able to use the NETBANX payment gateway for services including credit card, debit card, and electronic check processing and risk management for the U.S. gaming market.

Bally VP of business development John Connelly said: "A key part of our strategy is to partner with best-of-breed providers, and we have done that with Optimal Payments to secure access to their extensive expertise in payment processing and risk management services for the regulated U.S. gaming market."

Before the passage of the Unlawful Internet Gambling Enforcement Act in 2006, Optimal Payments was formerly known as Neovia Financial until it acquired the former in 2011. It funded the accounts of gamblers with its Neteller platform, but after the UIGEA went into effect, it ended up having to pay a $136 million fine to the Justice Department to settle charges of money laundering.

In addition to reel-spinning slot machines, video slots, wide-area progressives, interactive and mobile applications, and Class II, lottery, and central-determination games and platforms, Bally also offers various casino management, slot accounting, bonusing, cashless, and table management services.

Saturday, June 29, 2013

Last Week's Worst Performing Dow Components

Put another wild week on Wall Street into the record books. Going into the last day of the week, the Dow Jones Industrial Average (DJINDICES: ^DJI  ) had an eight-day streak going in which it closed higher or lower by more than 100 points. But although the index was up nearly 100 points around 3 p.m. ET on Friday, it broke the streak and closed higher by a mere 41 points. But considering the Dow lost more than 550 points the two previous days, Friday was viewed as a big win, even though the index lost 270 points, or 1.79%, this past week over fears that the Federal Reserve's stimulus programs will soon come to an end. The other two major indexes also lost big time this past week, as the S&P 500 fell 2.1% and the Nasdaq lost 1.93%.

This past week was slightly unusual, as 27 of the Dow's 30 components ended the week in the red. On a typical week, or even in one where the market makes a big move lower, we tend to only see a little more than half of the components in the red. For example, last week the Dow fell 1.16%, but only 21 stocks were lower, and in the last week of May, it slid 1.22% and only 17 stocks fell.

Before we hit the Dow losers, let's look at this week's best-performing component. Shares of Cisco (NASDAQ: CSCO  ) rose an astounding 0.53%. On Thursday, when its fellow components were tanking, it lost only 0.99% of its value, making it the best Dow performer that day. The company announced this week that it will purchase Composite Software for $180 million this past week. Composite makes software that takes data from multiple storage locations and presents it to a user in a way that makes it seem all the data came from the same place. This technology will help Cisco grow its cloud computing offerings in the future.  

The big losers
Shares of AT&T (NYSE: T  ) fell more than any other Dow stock this past week, dropping 4.47%. The telecom giant slid on a few different news-related stories this week, including the Fed's announcement. The first mover came on Monday, when rumors began swirling that AT&T may be interested in purchasing Spanish telecom company Telefonica. The $93 billion price tag probably caused some shareholders to nearly faint, and then promptly sell their shares. The other big news came on Wednesday, when it was reported that DISH Network was officially pulling out of the race to buy Sprint Nextel. This move opens the door for SoftBank to move in and buy the company, which is bad for both AT&T and Verizon, since SoftBank will be able to provide adequate capital to Sprint, which it will probably use to update its network and fight to win market share from the top two U.S. telecoms, AT&T and Verizon.  

Alcoa (NYSE: AA  ) moved lower by 3.03% this past week, making it the eighth worst Dow component. Shares fell from the beginning of the week until the end, and nearly the whole drop can be blamed on China. The country is currently experiencing a slowing economy,and this past week the government announced that it will tighten its credit policy. These events will hurt Alcoa, since it needs strong capital spending and large construction projects to sell its aluminum to. But a slowing economy and tight credit aren't conducive to an environment in which we'll see massive building projects.

For the second week in a row, Microsoft (NASDAQ: MSFT  ) has found itself on the list of the Dow's top losers, as shares declined 3.25%. Two weeks ago, the stock lost 3.61%, after the company announced that its new Xbox One gaming console won't be available in Asian markets until sometime in late 2014. This week the company made a few changes to its policies by making the device more user-friendly, including a removal of restrictions on the resale or trade of games. But the overall negativity in the market this past week, along with the rumors that Microsoft was in talks to purchase Nokia, sent shares tumbling.

The other Dow losers this week:

(For more information on why shares of these other losers were lower this past week, click on the links.)

3M, down 1.54% American Express, own 0.86% Bank of America, down 3.2% Boeing, down 2.25% Caterpillar, down 1.21% Coca-Cola, down 1.77% Chevron, down 1.76% ExxonMobil, down 1.38% General Electric, down 1.18% Hewlett-Packard, down 2.46% Home Depot, down 3.16% Intel, down 3.04% IBM, down 3.74% Johnson & Johnson, down 2.09% JPMorgan Chase, down 2.75% McDonald's, down 1.34% Merck, down 1.46% Pfizer, down 2.33% Procter & Gamble, down 0.89% Travelers, down 4.13% United Technologies, down 2.12% Verizon, down 2.59% Wal-Mart, down 2.01% Walt Disney, down 1.83%

More Foolish insight
Materials industries are traditionally known for their high barriers to entry, and the aluminum industry is no exception. Controlling about 15% of global production in this highly consolidated industry, Alcoa is in prime position to take advantage of growth that some expect will lead to total industry revenue approaching $160 billion by 2017. Based on this prospect and several other company-specific factors, Alcoa is certainly worth a closer look. For a Foolish investment perspective on this global giant simply click here now to get started.

Samsung Taps Qualcomm to Give Galaxy S4 New Superpowers

Samsung is about to release a high-performance variant of its Galaxy S4 smartphone. This one steals a march on Apple (NASDAQ: AAPL  ) as well as on other Android vendors by being the fastest. In fact, Samsung is walking down a road that hasn't even been built yet.

The Samsung Galaxy S4 LTE-A sports one important upgrade on top of the standard Galaxy S4 design. The Qualcomm  (NASDAQ: QCOM  ) Snapdragon 800 chip brings two benefits to the table. First, it can perform with the best of them. This chip beats Apple's latest A6 processor in the graphics department while crushing it in terms of raw number-crunching, and is comparable to the high-end NVIDIA Tegra 4 processor in every way. These are rare feats, but not the main point (unless you're a Qualcomm investor or worried about your NVIDIA shares, of course).

In the video below, Fool contributor Anders Bylund explains who the Snapdragon 800's LTE Advanced wireless networking chops changes the game as soon as your favorite network operator upgrades its equipment. The basic 4G LTE rollout started three years ago and is still going on, but the next upgrade should happen much faster.

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

Can Intel's Newest Chip Revive the PC Industry?

There's no denying that Intel (NASDAQ: INTC  ) Haswell represents a tremendous advancement for portable PC computing over its Ivy Bridge predecessor. A whole generation of laptops, Ultrabooks, and 2-in-1 convertible devices are about to benefit from markedly improved battery performance to the point where the PC officially levels the power consumption playing field against the tablet. As always with cutting-edge technology, the price won't come cheap at first. In the beginning, users can realistically expect to pay anywhere between double and triple the expected $381 average selling price of a tablet.

The hope is that consumers will justify the premium over tablets in exchange for the added productivity. The 13-inch Apple (NASDAQ: AAPL  ) MacBook Air powered by Intel Haswell is advertised to achieve a staggering 12-hour battery life and weighs less than 3 pounds. But because it starts at $1,099, the everyday PC user who mostly surfs the Web and reads emails may have a hard time seeing the value, especially considering a $499 iPad with a Retina display is rated for 10-hour battery life. To put the price of a 10-inch iPad in perspective, the MacBook Air's Haswell processor alone costs $342 for the base model and $454 for the upgraded version.

The million-dollar question for the PC industry is whether Haswell will be the silver bullet that slows the decline of PC sales. Unfortunately, that prospect isn't looking promising.

Strong headwinds
I'm sure by now you're familiar with this whole "death of the PC" storyline. The reality is that PCs continue to make up less and less of the overall computing pie, thanks largely in part to the worldwide proliferation of tablets and smartphones. As a result, this behavioral shift change is prolonging the consumer PC replacement cycle. The most recent numbers from IDC suggest that worldwide tablet shipments will surpass portable PC shipments this year, and by 2015, tablet shipments will outpace total PC shipments. It's not very often the world experiences a step-change this profound, and I'm not sure one single piece of silicon, no matter how great, can get the world to fall back in love with PCs.

Hopes and dreams
If widespread adoption rates of smartphones and tablets told us one thing, it would be that everyday computing users have found adequate computing solutions for their needs. Like it or not, the PC recovery storyline is up against a massive shift in computing behavior, and I'm not sold that a piece of silicon that currently costs as much as some tablets will stop the bleeding.

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

The World's Best Dividend Portfolio

Will Dividend-Paying Stocks Fall More Than the Market?

For years, investors have gravitated to dividend-paying stocks as the best of all possible worlds. With the potential for price appreciation as well as reliable, predictable investment income, dividend stocks pulled in not just conservative investors looking to lock in gains from the bull market but also income investors who traditionally used bonds and other investments until their income dried up.

Now, though, the stock market has finally taken a turn downward, and dividend investors have noticed that many of their favorite names are taking losses they had hoped to avoid. Are dividend-paying stocks doomed to underperformance?

Which dividend stocks are getting hit hardest?
So far, we've seen some evidence that dividend-paying stocks are doing worse than the overall market since the latest pullback began. Going back to the end of April, the iShares DJ Select Dividend ETF (NYSEMKT: DVY  ) , which has a high concentration of strong dividend payers, has fallen about 4%, compared to a more-or-less flat performance from the S&P 500 and other broader benchmarks.

By itself, a 4-percentage-point difference isn't really big enough to get excited about. But certain stocks that are favorites among dividend investors have seen much more extensive declines. Utilities are extremely sensitive to interest rates, and most stocks across the sector have declined. Even with natural-gas prices on the rise and thereby helping to make its fleet of nuclear power plants more attractive, Exelon (NYSE: EXC  ) has sunk 18% since the beginning of May. Yet even in the more conventional utility arena, giant Duke Energy (NYSE: DUK  ) has suffered a 12% drop, and other utilities have shared their double-digit percentage declines. For Exelon, Duke, and the rest of the industry, large levels of debt make them extremely vulnerable to future rate changes, and while interest expense won't rise immediately, it will slowly go up as the companies have to refinance maturing debt at higher rates.

Master limited partnerships are also facing pressure. Kinder Morgan Energy Partners (NYSE: KMP  ) has declined almost 10% in the past month, with investors wondering whether the MLP's yield will be sustainable in a higher-rate environment. Certainly, some of Kinder Morgan's decline stems from company-specific news, including its decision late last month to cancel a proposed $2 billion pipeline that would have run from Texas to California. But other MLPs have seen more modest declines.

Finally, mortgage REITs have taken substantial hits since the Federal Reserve signaled the return of higher rates. American Capital Agency (NASDAQ: AGNC  ) is down almost a third since the end of April, as shareholders prepare for what could be the end of favorable conditions for the mortgage-REIT industry and its high-leverage business model.

Why dividend stocks are falling
The key to understanding the pressure that dividend-paying stocks are seeing is to go back to what made investors buy them in the first place. For those who've understood the power of dividends all along, dividend stocks will remain a vital part of their overall portfolios, so they're unlikely to buy or sell based on short-term conditions.

But for those who bought dividend payers as substitutes for bonds, higher rates on fixed-income alternatives will entice them to return to bonds and sell off their dividend stocks. Consider: The average P/E on the iShares dividend ETF has risen to more than 19, implying an earnings yield of just over 5%. With a dividend yield of 3.6%, there's not much extra room for the ETF's underlying components to grow.

In the end, two scenarios could produce a dividend-stock decline. If rates keep rising, then bonds could recapture the attention of income investors, leading to a broad sell-off. Meanwhile, if growth stocks start to outperform mature dividend payers, then stock investors will chase that performance, selling off their dividend stocks and leading to potential declines in an asset-allocation shift.

Watch those dividends!
The crosscurrents in dividend-paying stocks will be interesting to watch for months to come, as the Federal Reserve starts to implement its promised new policies. With several scenarios that could produce further declines, be sure to watch your portfolio's risk level to make sure you're not overexposed to adverse conditions in the future.

If you're on the lookout for high-yielding stocks, The Motley Fool has compiled a special free report outlining our nine top dependable dividend-paying stocks. It's called "Secure Your Future With 9 Rock-Solid Dividend Stocks." You can access your copy today at no cost! Just click here.

Friday, June 28, 2013

Why I'm Not Investing in Tesla รข€“ Yet


Tesla's Model S. Photo Credit: Tesla Gallery.

Investors would be hard pressed to find a hotter topic under discussion out there today than the bull versus bear case on Tesla (NASDAQ: TSLA  ) . If you were savvy enough to invest in Tesla six months ago, you're sitting pretty with a 223% increase in that time frame. Some investments never have that type of success before the companies close the doors and file for Chapter 11, so pat yourself on the back Tesla and Tesla-savvy investors. I cover the auto industry for The Motley Fool and I call it like I see it, always – that's what has me a little perplexed with Tesla as an investment. Here's why.

Numbers never lie?
If all you do is look at the trailing-12-month numbers, you'd obviously run away afraid of Tesla as an investment – you wouldn't touch it with a 10-foot pole. Scratching the surface more, you'll see its price to book ratio is around 72 compared to an industry average of 1.7. Its price to sales in the trailing 12 months comes in at a staggering 12.6 compared to the industry average of 0.6. However, in Tesla's case, those numbers aren't exactly fair for such a young company that's disrupting an industry due for a revolutionary product. 

Tesla's market cap totals roughly $12 billion right now. If you take a look at Ford (NYSE: F  ) and General Motors (NYSE: GM  ) they cap out at about $60 billion and $45 billion, respectively. That means that the market considers Tesla to be valued at roughly one-fifth of Ford and slightly more than one-fourth of GM. That seems pretty lofty if you consider that GM sold over 9 million vehicles globally last year, compared to Tesla's goal of breaking 20,000 this year.

Bullish investors are quick to point out that Tesla has crushed most competitors in the large luxury segment. Tesla's Model S outsold Audi's A8, BMW's 7-Series, and the Mercedes-Benz S Class. It should be mentioned that the Model S also largely trailed Cadillac's XTS through March. 

I'll also point out that bullish investors boast the fact that Tesla repaid its government loan back quickly, and has handled a voluntary recall rather impressively. Tesla also boasts a business-savvy CEO, Elon Musk, who seems to turn every business he touches into gold.

According to CNNMoney, Ben Schuman, an analyst at Pacific Crest Securities, said in regard to all the positive Tesla news: "[The] current stock price reflects flawless execution and has likely gotten ahead of itself."

Bearish investors are quick to point out that its valuation is astronomically high and that Tesla is but a small fish in a big pond. "There seems to be some euphoria," Takuo Katayama, an analyst at Daiwa Capital Markets, told CNNMoney. "I don't want to say it's unjustified, but it's getting there." 

My take on things
I find myself somewhere in between the bull and bear cases. I see a company that has a real solution, with an innovative product in an industry begging for a revolutionary vehicle. I see a CEO that understands business, and has a vision of where our future solutions will come from. I also see a company with shares trading at a future P/E ratio over 120. That's otherworldly compared to those of Ford and GM, both of which trade around 10 times.

I'm excited about the product and planned growth for Tesla as it hints toward a cheaper mass produced vehicle. It's squashing skepticism with early adopters because of its battery swapping capabilities and supercharging stations. Many intelligent people are bullish for good reasons, and 10-20 years down the line Tesla could be the investment that makes many in our generation rich.

All that said, it doesn't mean you can't get Tesla shares at a better price than what it trades at today. Tesla is priced for sheer perfection as we move forward, and even the best companies stumble. When that happens, and Tesla's valuation comes back down to earth, I'll heavily consider investing in the company. Until then, I think Tesla has come too far, too fast, as an investment – although the company itself is spectacular.

If you missed the boat on Tesla, fear not, there are two other excellent opportunities for huge gains in the rebounding automotive industry. A recent Motley Fool report, "2 Automakers to Buy for a Surging Chinese Market", names two global giants poised to reap big gains that could drive big rewards for investors. You can read this report right now for free – just click here for instant access.

Why Dendreon Shares Popped

How Vodafone Group Measures Up As a GARP Investment

LONDON -- A popular way to dig out reasonably priced stocks with robust growth potential is through the "growth at a reasonable price," or GARP, strategy. This theory uses the price-to-earnings to growth ratio to show how a share's price weighs up in relation to its near-term growth prospects -- a reading below 1 is generally considered decent value for money.

Today I am looking at Vodafone  (LSE: VOD  ) (NASDAQ: VOD  )  to see how it measures up.

What are Vodafone's earnings expected to do?

Metric 2014 2015
EPS Growth 3% 7%
P/E Ratio 11.2 10.5
PEG Ratio 3.3 1.6

Source: Digital Look.

Vodafone is expected to keep earnings per share ticking higher in the year ending March 2014, following the similarly marginal improvement to the tune of 5% punched in 2013. Earnings growth is forecast to pick up slightly in 2015, according to City brokers.

EPS increases in these years are not meaty enough to leave the company within PEG bargain terrain below 1. And on a price-to-earnings basis, Vodafone is expected to trade above the generally regarded benchmark of 10, although the firm does not trade stratospherically above this measure. A reading under 10 is widely considered to represent decent value.

Does Vodafone provide decent value against its rivals?

 Metric FTSE 100 Mobile Telecommunications
Prospective P/E Ratio 14.9 14.3
Prospective PEG Ratio 3.1 4.8

Source: Digital Look.

Vodafone beats both the FTSE 100 and mobile telecommunications sector averages in terms of forward P/E ratio, and comfortably surpasses the latter group in terms of prospective PEG multiple. The firm lags the FTSE 100 when considering the PEG reading, however.

Although Vodafone's PEG metrics undermine its candidacy as a classic GARP stock, I believe that the company carries the clout to turbocharge earnings expansion over the medium to long term.

Time to get yourself connected
Vodafone announced in May that operating galloped 9.3% higher in 2013 to 12 billion pounds, despite a 4.2% turnover decline to 44.4 billion pounds. Difficulties in Europe, caused by pressure on consumers' wallets and fresh regulatory problems, hampered performance during the 12 months to March. But better EBIDTA margins, particularly in developing regions, signaled the operational improvements that the company has made over the course of the year.

While organic growth, particularly in emerging markets, continues to tick along at an encouraging pace, Vodafone also has the scope to supplement this through lucrative M&A activity. The firm is currently in discussions to acquire German cable giant Kabel Deutschland in a bid to bolster its European customer base and improve its product catalog by delivering television, broadband, and mobile and fixed-line telephone services.

And the company's cash situation could be given a shot in the arm, along with its expansion plans, should it decide to sell its 45% stake in Verizon Wireless to Verizon Communications.

As well as providing decent growth qualities, the mobile operator is also favored by those seeking reliable and chunky income stocks. The firm is expected to build the full-year payout again in 2014 to yield a stonking 5.7%, according to forecasters.

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Our "5 Dividend Winners to Retire On" wealth report highlights a selection of tasty stocks with an excellent record of providing juicy shareholder returns. Among our picks are top retail, pharmaceutical, and utilities plays that we are convinced should continue to provide red-hot dividends. Click here to download the report -- it's 100% free and comes with no obligation.

Shell Joint Venture to Invest $3.9 Billion in Nigeria

AMSTERDAM (AP) -- Royal Dutch Shell (NYSE: RDS-A  ) (NYSE: RDS-B  ) said Friday its Nigerian joint venture will spend $3.9 billion on investments in the Niger delta, including an effort to improve the safety of a major pipeline that was shut down this week after being damaged in a theft attack.

The joint venture, which is majority-owned by Nigeria's state oil company, will spend $1.5 billion on the Trans-Niger Pipeline, which carries 150,000 barrels of crude per day and is located in the eastern Niger Delta.

The pipeline was shut Wednesday after an attack that caused an explosion and fire. The company's Nembe Creek oil pipeline in Bayelsa State, which is of similar size, had already been shut due to a similar incident.

Shell, the largest oil producer in Nigeria, has been plagued for years by such attacks. By some estimates total oil theft in Nigeria amounts to $7 billion annually.

Shell spokesman Jonathan French said the Trans-Niger pipeline will be improved in some areas by being rerouted so that it runs through swampy areas or underwater, instead of over land, which will make it more difficult for thieves to reach.

In addition, it will be outfitted with a detection system that will alert the company "whenever a sabotage attempt is made," he said.

Mutiu Sunmonu, Managing Director of Shell's Nigerian operations, said the project shows the steps the company is taking to "to tackle pipeline sabotage and crude theft in the Niger Delta, which is the cause of so much environmental and economic damage in this region."

Environmental groups agree sabotage is a problem, but say the company bears much of the blame.

"Sabotage is a problem in Nigeria, but Shell exaggerates this issue to avoid criticism for its failure to prevent oil spills," said Audrey Gaughran of Amnesty International in a June 19 statement.

"The oil companies are liable to pay compensation when spills are found to be their fault but not if the cause is attributed to sabotage."

Shell said Friday the venture will spend an additional $2.4 billion on a series of five gas supply and infrastructure projects, also in the eastern part of the delta.

The company estimates that they will have an expected peak production that will be the equivalent of 215,000 barrels of oil per day.

"We certainly have reiterated our commitment to Nigeria," French said.

Thursday, June 27, 2013

Bright Future for Natural Gas

The natural gas revolution in North America is transforming the competitive landscape in numerous industries, but the excess supply is also of global importance. With gasoline demand down in the United States, natural gas looks to be the fast-growing fuel over the next few decades. Even more, with two LNG export facilities recently approved and 20 move applications on file, the United States will play an increasing role on the global scale. 

As natural gas continues to grow as an electric-generating fuel throughout the world, the U.S. is in a nice position to supply this market due to an enormous amount of shale gas resources and a cost-leading technological position. 

There are many different ways to play the energy sector, and The Motley Fool's analysts have uncovered an under-the-radar company that's dominating its industry. This company is a leading provider of equipment and components used in drilling and production operations, and poised to profit in a big way from it. To get the name and detailed analysis of this company that will prosper for years to come, check out the special free report: "The Only Energy Stock You'll Ever Need." Don't miss out on this limited-time offer and your opportunity to discover this under-the-radar company before the market does. Click here to access your report -- it's totally free.

Be sure to check out the video below for more information on the United States LNG position and potential competitors who could grab some of the global market share. 

 

3 Stocks Near 52-Week Lows Worth Buying

Just as we examine companies each week that may be rising past their fair value, we can also find companies potentially trading at bargain prices. While many investors would rather have nothing to do with companies tipping the scales at 52-week lows, I think it makes a lot of sense to determine whether the market has overreacted to the downside, just as we often do when the market reacts to the upside.

Here's a look at three fallen angels trading near their 52-week lows that could be worth buying.

Things really aren't that fishy
Without question, there can be quite a variance in riskiness to these buy suggestions. I would certainly place this one among the riskier of my CAPScall bets.

Today's first rebound candidate is the highly controversial Amarin (NASDAQ: AMRN  ) . Amarin's lead drug is Vascepa, a fish oil capsule that was approved last July to treat hypertriglyceridemia (i.e. high triglyceride levels). Since its approval, though, shares have lost about 60% of their value as buyout rumors surrounding the company have not come to fruition, and as competition in the sector builds.

Specifically, investors appear unnerved by AstraZeneca's (NYSE: AZN  ) purchase of Omthera Pharmaceuticals in order to get ahold of its late-stage clinical fish oil drug, Epanova. Many investors projected Amarin to be the takeover candidate, and are even more disturbed that Omthera was purchased for about half Amarin's total market value and now has a heavyweight controlling its lead drug in AstraZeneca. 

Despite this, Amarin's Vascepa could be on the verge of expanding its approved indications to patients with high triglycerides and mixed dyslipidemia. If approved, this would greatly expand Amarin's target audience well beyond the some 4 million people it can currently target and could vault its peak sales estimates even higher.

The other factor making Vascepa particularly encouraging are the incredibly high levels of obesity in this country. It's still quite debatable whether or not fish oil has a positive benefit on overall cardiovascular health (depending on the study that is), but millions of people and physicians find its benefits quite tangible. As long as we remain the most obese developed country in the world, fish oil products should remain in high demand.

Why buy when you can rent?
Please forgive me for beating a dead horse twice in the same week, but residential-REIT Equity Residential (NYSE: EQR  ) has absolutely no business trading near a 52-week low.

The sell-off over the past week has been more or less merciless, dragging every sector down with it as nervousness over the Fed's imminent paring back of its $85 billion monthly bond-buying program grows. The housing sector has been hit particularly hard as the nervousness has led to rapidly rising lending rates which are expected to drastically slow down mortgage applications. But, what's not good for the goose in this case is excellent news for the gander.

Equity Residential, a rental property real estate investment trust, will benefit in a big way from rising interest rates as it will dissuade prospective homebuyers from taking the plunge. Instead, it'll push buyers who are on the cusp of buying back into a rental market that has very few vacancies to begin with. The end result is that Equity Residential is able to command some of the best pricing power it's ever had, ultimately flowing to its bottom line and eventually to shareholders as a hefty dividend.

Another big factor to consider is that Equity Residential and AvalonBay Communities (NYSE: AVB  ) both recently combined to purchase Archstone. Under normal circumstances, residential-REITs like Equity Residential and AvalonBay would go into debt and build new communities, benefiting from the build-out years down the road. Archstone already has a well-established portfolio of rental properties, meaning the transition from purchase to profit is shortened dramatically. Equity Residential took a little over a 26% stake in the Archstone rental portfolio with AvalonBay picking up the remainder.

With a yield approaching 3%, and recently highlighted as a great dividend you can buy right now, I see no reason why Equity Residential should be this cheap. 

Nothing could be (re)finer
Like the previous companies, the dismal performance of the market over the past week has ransacked even the oil refining sector and names like PBF Energy (NYSE: PBF  ) . Refiners come under pressure anytime the prospect of lower demand rolls around, so with China's credit crunch scaring investors under the covers, it's not a big surprise to see PBF shares selling off. The company's approximately 16 million share secondary offering earlier this month didn't help its cause, either.

But I'm here to tell you that this could be the most intriguing value among the refining sector. As my Foolish colleague and energy expert Aimee Duffy has pointed out previously, PBF Energy has refineries in the mid-Continent and on the East Coast where crack spreads are often weaker than the sector average. Surprisingly, PBF's spreads were better than many of its peers during the first-quarter in both regions, yet management considered it a challenging quarter. 

Where PBF offers investors a really intriguing value is in its expansionary efforts on the East Coast and the mid-Continent. Specifically, crude-by-rail deals signed with Burlington Northern Santa Fe and Norfolk Southern in the mid-Continent should allow for increased deliveries and quicker per-day barrel output .

On a valuation basis, there are few refiners as inexpensive as PBF which is trading at just five times forward earnings and less than last year's free cash flow! This sort of valuation would be realistic if the company were in distress or oil were at $30 a barrel, but make absolutely no sense based on the fact that PBF is growing refining capacity and orchestrating oil-by-rail deals with regularity. With nearly a 5% yield, this is a refiner that is certainly worth a deeper dig.

Foolish roundup
This week's theme is all about whether or not things are really as bad as investors' emotions make them out to be. Amarin clearly has competitive concerns, Equity Residential has misconstrued homebuilder associations to deal with, and PBF has to contend with tough East Coast crack spreads. Overall, though, all three companies are on solid footing for the future, and the thesis behind owning each one remains intact until further notice.

I'm so confident that these three names will bounce off their lows that I'm going to make a CAPScall of outperform on each one.

Is this stock primed to outperform its peers?
The Motley Fool's chief investment officer has selected his No. 1 stock for this year. Find out which stock it is in the special free report: "The Motley Fool's Top Stock for 2013." Just click here to access the report and find out the name of this under-the-radar company.

Wednesday, June 26, 2013

10 Best Mid Cap Stocks To Buy For 2014

After the long holiday weekend, market participants were given some great news this morning: Consumer confidence has hit a five-year high. Industry group The Conference Board claims that consumer attitudes jumped to 76.2 from a revised 69 in April. Most estimates had pinned the number at 71, so this was quite the surprise. �

As of 11:45 a.m. EDT, the Dow Jones Industrial Average (DJINDICES: ^DJI  ) is up 159 points, or 1.04%. The S&P 500 has risen 19.62 points, or 1.19%, while the Nasdaq has gained 44 points, or 1.28%. Investors seem to have all but forgotten about the possible Fed slowdown, which everyone was so fearful of last week, and at this time all but one of the Dow's 30 components are moving higher.

Besides the consumer confidence number, a positive housing report also reached investors today, and is likely the reason shares of Home Depot (NYSE: HD  ) rose 1.72%. The better-than-expected home price report showed that in March prices once again rose, and year-over-year gains have now risen 11%. With home prices continuing to climb, Home Depot should continue to see increased business levels, which will likely be followed by higher profits. �

10 Best Mid Cap Stocks To Buy For 2014: PCCW Ltd (0008.HK)

PCCW Limited is a Hong Kong-based holding company. Its subsidiary HKT provides telecommunications and related services, including local telephony, local data and broadband, international telecommunications, mobile, customer premises equipment sale, outsourcing, consulting and contact centers, primarily in Hong Kong, mainland China and elsewhere in the world. Media Business includes interactive pay- television (TV) services, Internet portal multimedia entertainment platform and the Company�� directories operations in Hong Kong and mainland China. Solutions Business offers Information and Communications Technologies services and solutions in Hong Kong and mainland China. Pacific Century Premium Developments Limited covers the Company�� property portfolio in Hong Kong and mainland China, including the Cyberport development in Hong Kong, and elsewhere in Asia. Other Businesses include the Company�� wireless broadband business in the United Kingdom and all corporate suppo rt functions.

10 Best Mid Cap Stocks To Buy For 2014: NCC Group Plc(NCC.L)

NCC Group plc provides information technology assurance and protection services to the public and private sectors worldwide. The company operates in two segments, Escrow and Assurance Testing. The Escrow segment ensures source code, data, or other business critical material is protected and accessible, as well as confirms the material held is protected by verifying that could be rebuilt from its source code components. The Assurance Testing segment provides site confidence services, including testing and monitoring relevant aspects of system, network, and Web site performance to ensure that the technology used could deliver optimum performance. It also offers security testing services, including forensics, vulnerability research, and the development of software to aid organizations in their on-going with information security breaches; and penetration testing, secure systems development, security education, software design verification, and security assessments. This segmen t also conducts security audits; and offers strategic advisory services for card manufacturing, data preparation, and personalization, as well as provides business analysis, project management, test resourcing, network and application performance analysis, functional and non-functional testing, test automation, software testing, and tools training. The company was founded in 1999 and is headquartered in Manchester, the United Kingdom.

Hot Paper Companies To Watch In Right Now: Cardia Technologies Ltd(CNN.AX)

Cardia Bioplastics Limited engages in the development, manufacture, and marketing of sustainable resins derived from renewable resources for packaging and plastic products industries. The company offers biohybrid resins, a blend of renewable thermoplastic materials and traditional polyolefins; and compostable resins and biodegradable materials for various applications, such as films, coatings and laminates, injection moldings, blow moldings, and extrusions. It also designs, develops, and produces ready to use finished goods, including films and bags. In addition, the company?s products are also used in the flexible packaging applications, including flexible films for food and non-food applications, shrink wrap, protective packaging films, carrier bags, waste management bags, and sacks. It operates in Australia, the Americas, Europe, and Asia. The company was formerly known as Cardia Technologies Limited and changed its name to Cardia Bioplastics Limited in July 2009. Card ia Bioplastics Limited was founded in 2002 and is based in Hawthorn, Australia.

10 Best Mid Cap Stocks To Buy For 2014: Crown Crafts Inc.(CRWS)

Crown Crafts, Inc., through its subsidiaries, offers infant and toddler products primarily in the United States. Its products include crib and toddler bedding, blankets, nursery accessories, room d

10 Best Mid Cap Stocks To Buy For 2014: Cheung Kong (1)

Cheung Kong (Holdings) Limited is a Hong Kong-based company engaged in investment holding and project management. The Company�� subsidiaries are engaged in property development and investment, hotel and serviced suite operation, property and project management, and investment in securities. It is also engaged in information technology, e-commerce and new technology. As of December 31, 2011, the Company�� investment properties included retail shopping malls and commercial office properties in Hong Kong, which accounted for approximately 44% and 45%, respectively of the turnover of the Company�� property rental. As of December 31, 2011, the total floor area under the Company�� property management was approximately 88 million square feet. As of December 31, 2011, its subsidiaries included Alcon Investments Limited, AMTD Group Company Limited, Bermington Investment Limited and others.

10 Best Mid Cap Stocks To Buy For 2014: Running Fox Resource Corp. (RUN.V)

Running Fox Resources Corporation, a resource sector company, engages in the exploration and development of mineral resource properties in Canada. The company owns 100% interests in the Brett Gold and Silver Project located in the north Okanagan region of southwest British Columbia. It also has an option interest in the Pincher Creek oil and gas Project located in Alberta. The company was incorporated in 1981 and is based in Claresholm, Canada.

10 Best Mid Cap Stocks To Buy For 2014: Odyssey Marine Exploration Inc.(OMEX)

Odyssey Marine Exploration, Inc. provides shipwreck exploration services for use in insurance investigations, and search and recovery operations to governments and deep-ocean mineral exploration companies. The company?s shipwreck projects consist of various activities, including research and development, and search operations; archaeological excavation and recovery operations; and conservation, recording, and documentation. It also sells shipwreck findings, including coins and other mass-produced cargo, cultural collections, and replicas to collectors, museums, and other institutions. Odyssey Marine Exploration, Inc. was founded in 1986 and is headquartered in Tampa, Florida.

10 Best Mid Cap Stocks To Buy For 2014: Williams Partners L.P.(WPZ)

Williams Partners L.P. focuses on natural gas transportation, gathering, treating and processing, storage, natural gas liquid fractionation, and oil transportation activities in the United States. The company operates in two segments, Gas Pipeline, and Midstream Gas and Liquids. The Gas Pipeline segment owns and operates approximately 13,900 miles of pipelines with annual throughput of approximately 2,700 trillion British thermal units of natural gas and delivery capacity of approximately 13 million dekatherms of gas. This segment also owns interests in joint venture interstate and intrastate natural gas pipeline systems. The Midstream Gas and Liquids segment includes natural gas gathering, processing, and treating facilities; and crude oil gathering and transportation facilities that serve the producing basins in Colorado, New Mexico, Wyoming, the Gulf of Mexico, and Pennsylvania. Williams Partners GP LLC serves as the general partner of the company. Williams Partners L.P . was founded in 2005 and is based in Tulsa, Oklahoma.

Advisors' Opinion:
  • [By Louis Navellier]

    Williams Partners (NYSE:WPZ) is an integrated natural gas company that is involved with exploration and production, midstream gathering and processing and interstate natural gas transportation. In the last nine-and-a-half months, WPZ stock has gained 18% since January 2011.

10 Best Mid Cap Stocks To Buy For 2014: Under Armour Inc.(UA)

Under Armour, Inc. develops, markets, and distributes performance apparel, footwear, and accessories for men, women, and youth primarily in the United States, Canada, and internationally. It offers products made from moisture-wicking synthetic fabrics designed to regulate body temperature and enhance performance regardless of weather conditions. The company provides its products in three fit types: compression (tight fitting), fitted (athletic cut), and loose (relaxed) extending across the sporting goods, outdoor, and active lifestyle markets. Its footwear offerings comprise football, baseball, lacrosse, softball, and soccer cleats; slides; performance training footwear; and running footwear. The company also provides baseball batting, football, golf, and running gloves, as well as licenses bags, socks, headwear, custom-molded mouth guards, and eyewear that are designed to be used and worn before, during, and after competition. Under Armour sells its products through retai l stores, as well as directly to consumers through its own retail outlets and specialty stores, Website, and catalogs. The company was founded in 1996 and is headquartered in Baltimore, Maryland.

Advisors' Opinion:
  • [By Fernandez]

    Under Armour designs, develops, markets, and distributes performance apparel, footwear, and accessories for men, women, and youth primarily in the United States and Canada.

    You’ve probably seen the company’s “Protect This House” or “Click-Clack” commercials, and probably seen anyone from the weekend warrior to professional sports teams wearing the company’s moisture-wicking synthetic fabrics, which are designed to keep perspiration away from the skin, and regulate body temperature regardless of weather conditions.

    I must admit for full disclosure that I am an Under Armour nut, and own about 20 pairs of their shorts, shirts and shoes.

    I can attest from personal experience as a natural bodybuilder and athlete that the Under Armour apparel are the best workout clothing I have ever worn, and they look pretty darn cool too.

    Now let me make a clear distinction between a great company, and a great stock.

    Up until recently, Under Armour was the former, but not the latter.

    It has now entered into a zone where the valuation metrics, even in the face of a consumer slowdown, is looking more and more attractive.

    In fact, Under Armour just released earnings Monday.

    They were pretty much in line with analyst’s expectations, and then Under Armour slightly lowered their forward guidance for the remainder of 2008 based on those same consumer headwinds.

    The market liked what it heard sending shares up 20% (of course, the overall market was up 10%, so…). Shares have since rebounded further are now up almost 50% from their lows just last week!

    This leads me to my investment thesis in shares of Under Armour.

    I believe that Under Armour represents one of the quintessential brands of this decade when it comes to sports apparel, the way Under Armour’s fiercest rival Nike (NYSE: NKE) dominated the 90’s.

    Until now the valuation of the company was not commensurate with the! projected profit and growth, which I thought were way too high, and still might be, along with certain inventory related problems that the company now seems to be getting a handle on.

    Still, with the spike in share price, along with the uncertainty in the market and overall economy, I feel that we will still be able to purchase shares of this great company at a great price in the near future and that we’re seeing a bit of a short squeeze in shares of Under Armour.

    Why I Like the Company: One of the quintessential brands of this decade; Valuation is reaching reasonable to “cheap” levels depending on direction of consumer market and Under Armour’s stock price; Dedicated and fully invested founder with over 77% voting power via class B shares; Improved business fundamentals via better inventory controls and operational structure, and new product offerings; Further expansion available outside the U.S.; Relatively higher margins than competition

  • [By Glenn]  

    Current Price: $27.27 12-month target: $37

    I see potential in opportunities for new product adjacencies, and expanding distribution worldwide. Footwear growth will continue to increase. Revenues for these products have increased over 69% in 2009. Adding to this I still see growth in Under Armour’s apparel sales, which are up 8%. Under Armor had yet to even break into the international market, which offers a plethora of new opportunities for this growing brand. I believe sales will rise drastically in 2010 driven by international sales, new women’s clothing line, and expansion within their own footwear line.
  • [By Roger]

    Under Armour (NYSE:UA), a maker and designer of apparel, footwear and accessories that target sports enthusiasts, has more than doubled in one year. But despite the advance, many research firms still have a “strong buy” recommendation on the stock. And S&P recently revised its annual target to $93.

    Technically UA has advanced on a series of stair steps, sometimes called “base moves.”? These are very bullish formations that resemble cups. UA reversed up recently following a signal from our proprietary Collins-Bollinger Reversal (CBR) indicator. If the recent pullback to its 50-day moving average (blue line) holds, then the next move up should break the prior high with a target of $85.

    Traders could take risk positions now with a target of $85 to $90. But be careful and use stop-loss orders to protect against a violent reversal, which could drop prices back to support at $62 where this volatile stock could be bought again.

10 Best Mid Cap Stocks To Buy For 2014: Koninklijke Philips Electronics N.V.(PHG)

Koninklijke Philips Electronics N.V. engages in the healthcare, consumer lifestyle, and lighting product businesses worldwide. The company offers screening, diagnosis, treatment, monitoring, and health management services in cardio-pulmonary, oncology, and women?s health areas. Its healthcare products and solutions include X-rays, computed tomography, magnetic resonance, nuclear medicine, and ultrasound imaging equipment; and cardiology informatics and diagnostic electrocardiography, radiology information systems, picture archiving and communication systems, patient monitoring and clinical informatics, perinatal care, and therapeutic care systems. The company?s healthcare products and solutions also consist of sleep management and respiratory care, medical alert, remote cardiac, and remote patient management services. In addition, it offers consultancy, site planning and project management, clinical, education, equipment financing, asset management, and equipment mainten ance and repair services. The company?s consumer lifestyle products and solutions comprise mother and childcare, oral healthcare, male grooming, skincare, and beauty products; coffee, floor and garment care, kitchen, water and air, and beverage appliances; and communication and control, audio and multimedia, speech processing, headphones and accessories, and home cinema and video products. Its lighting solutions include lamps, including incandescent, halogens, fluorescent, high-intensity discharge, and LED lamps; consumer luminaires for functional, decorative, lifestyle, and scene-setting applications; professional luminaires for city beautification, and road, sports, shop/hospitality, and industry lighting applications; systems and controls, that include electronic and electromagnetic gears, controls, modules, and drivers; automotive lighting, such as car headlights, car signaling, and interior; and packaged LEDs. The company was founded in 1891 and is headquartered in Ams terdam, the Netherlands.

Lorillard Gets FDA Approval for New Cigarettes

How Public Perception Can Crush the Stock Market

All things considered, it's been an incredible run for the U.S. stock market since finding its bottom in March 2009. The Federal Reserve has responded swiftly and decisively in keeping lending rates low to spur refinancing and new loan generation activity for individuals and enterprises, while also working to put a foundation under the housing sector once again.

Every hiccup in the uptrend has been met with skepticism by bears, and in every instance thus far since 2009 they've been proved wrong. Most of those skeptics have pointed to some economic or valuation factor, such as how the S&P 500's (SNPINDEX: ^GSPC  ) price-to-earnings ratio has risen from a low of 15 early last year to roughly 19 as of now.

Another common theme is the natural ebb and flow of the tech cycle. For instance, the tech-heavy Nasdaq Composite (NASDAQINDEX: ^IXIC  ) cranked out 20 consecutive 12-and-a-half-year highs earlier this year, and the natural cyclicality of the tech replacement cycle would suggest that a sustained uptrend just isn't possible -- yet the Nasdaq keeps marching higher.

Even the Dow Jones Industrial Average (DJINDICES: ^DJI  ) , which you'd expect would be susceptible to weakness from Europe's ongoing austerity measures and China's slowing GDP growth because it's made up of 30 globally diverse companies, has marched past 15,000.

If perception is reality, then we're in big trouble
But can the stock market overcome the most dangerous of all forms of skepticism -- public perception? It's one thing for a small group of investors to insinuate that an index has come too far, too fast. It's a completely different ballgame when the public -- composed of investors and those who don't invest -- are losing faith in some of the tools integral for maintaining a strong market and economy.

Source: Francesco, Flickr.

A Gallup poll released last week asked a random sampling of 1,529 adults in early June what their level of confidence was with regard to 16 institutions in the United States. The respondents were to answer whether they had a great deal, quite a lot, some, or very little, confidence in these 16 institutions. Needless to say, the respondents who exclaimed "a great deal" or "quite a lot" were notably missing for some key institutions: 

Institution

2012

2013

Change %

The military

75%

76%

1%

Small business

63%

65%

2%

The police

56%

57%

1%

The church or organized religion

44%

48%

4%

The presidency

37%

36%

(1%)

The medical system

41%

35%

(6%)

The U.S. Supreme Court

37%

34%

(3%)

The public schools

29%

32%

3%

The criminal justice system

29%

28%

(1%)

Banks

21%

26%

5%

Television news

21%

23%

2%

Newspapers

25%

23%

(2%)

Big business

21%

22%

1%

Organized labor

21%

20%

(1%)

Health maintenance organizations

19%

19%

0%

Congress

13%

10%

(3%)

Source: Gallup, % of respondents who said "a great deal/quite a lot."

It wasn't all bad ...
Understandably, there were quite a few bright spots here. Small-business perception improved by two percentage points to 65%, and we all know that small business growth is vital to keeping the U.S. economic engine moving forward.

It's also nice to see a five-percentage-point increase in banks. Obviously, sentiment for banks is always going to be toward the lower end of the scale, because no one likes paying bank fees, but the fact that many are "coming clean," per se, with settlements is certainly helping their image. Bank of America (NYSE: BAC  ) , for example, has settled with MBIA and multiple other federal institutions over its foreclosure and lending practices during and following the financial crisis. Anything that makes banks appear more transparent to the public is going to improve how the public perceives them.

The trio of trouble
Unfortunately, the vast majority of institutions received rather unconvincing approval ratings from the public.

Big business is one that the public rarely perceives in a good light. However, big businesses (in this case, corporations in excess of 500 employees) were responsible for 57% of all employee compensation in 2011, according to a New York Times report. For instance, you'll have no problem finding people who dislike Wal-Mart (NYSE: WMT  ) for its anti-union leanings and the fact that it uses its big wallet and clout to undercut local stores on price. Yet there's also little denying that Wal-Mart is a key indicator of the health of the U.S. economy, since it employs a staggering 1.3 million people in its stores and warehouses. If public perception of the key employers in the U.S. continues to fall, this could be a big problem.

Perhaps a far bigger concern was the drop-off in the confidence ratings for the medical system and Congress.

The decline in confidence in our medical system appears to be in direct relation to the growing uncertainty surrounding the upcoming implementation of the Patient Protection and Affordable Care Act, also known as Obamacare, in January. While this bill will expand the quality of care received and expand insurance coverage to lower-income individuals, it also could add a hefty burden onto the middle class, which could face rapidly rising monthly premiums.

The public's opinion on Congress, though, takes the cake! At no time in Gallup's history of polling the public on their opinion of Congress since 1973 has it been this low. Over the past four decades, high levels of confidence in Congress have fallen from 42% to just 10%. It may actually be more amazing that there are still some 20 million-plus adults in this country who do have faith in Congress to find compromises on issues such as the U.S debt ceiling and balancing the budget. As for me and the remaining 90% of the adult population, Congress has shown a penchant for destroying investor wealth by kicking the can further down the road rather than coming together and compromising with one another to solve our nation's problems.

The takeaway
The takeaway from this Gallup poll is very simple: If we as a nation have no faith in Congress to work together to help grow the U.S. economy and reform our U.S. health-care system for the better, and we're distrusting of the businesses that are responsible for employing the vast majority of Americans, then how can we expect the Dow, S&P 500, and Nasdaq Composite to head higher?

Public perception such as Gallup's just might be the closest thing we have to an emotions-excluded viewpoint of where the American people stand with regard to confidence in the U.S. economy. We can look at economic data until sunrise, examine chart patterns, and debate whether Wal-Mart has the right tools to squeeze an extra 10 basis points out of its margins. Ultimately, it comes down to whether the American consumer has any faith left in the system to push the market higher. Based on the figures I'm seeing here, we could be on the verge of a crisis of confidence in the markets.

Is transparency the key for this big bank?
Bank of America's stock doubled in 2012. Is there more yet to come? With significant challenges still ahead, it's critical to have a solid understanding of this megabank before adding it to your portfolio. In The Motley Fool's premium research report on B of A, analysts Anand Chokkavelu, CFA, and Matt Koppenheffer, financials bureau chief, lift the veil on the bank's operations, including detailing three reasons to buy and three reasons to sell. Click here now to claim your copy.

A Bearish Case For Rio Tinto: Commodities Conundrum

Believe that a China slowdown is imminent? One way of taking advantage of your idea is to short Rio Tinto (RIO).

Operating and Net Margins

A huge portion of Rio Tinto sales revenue come from hard metal like iron ore, aluminum and copper. This makes Rio Tinto particularly susceptible to a China slowdown, as a slowdown may adversely affect such metal prices. Declining metal prices can result in large operating losses.

(click to enlarge)

Sources: Rio Tinto 2012 Annual Report

Downside potential

(click to enlarge)

Sources: Rio Tinto 2012 Annual Report

Assuming no growth in metals production, a linear decline in ore prices can actually have an exponential effect on margins. Of course this assumes that operating cost is largely invariable. As such, Rio Tinto is a great way for one to lever up on the potential price collapse.

(click to enlarge)

Sources: Indexmundi.com

Just 10 years ago, iron ore was trading less than a tenth of its historical high. A material drop in ore prices is very possible.

Now, assuming Rio Tinto steps up its operations and increases volume productions, would that increase profitability? The answer is no. In fact, it would reduce it. Increasing supplies in light of declining demands would drive prices further down. At the same time, doing so would increase operating costs, squeezing operating income even more.

However, this is exactly what Rio Tinto did. It plans to kick up its production. For example, it plans to expand its iron ore production in the Pilbara region in Australia from 290 million tons to 360 million tons annually by 2015. While this is likely to be a positive for Rio Tinto in the long run, in ! the short run where a China crash may be imminent, this is a very dangerous idea.

Sources: Rio Tinto 2012 Annual Report

Financial position

High debt positions

Rio Tinto debt has been increasing while its cash have been dwindling. This puts Rio Tinto in a spot whereby it is especially susceptible to changes in metal prices. Large losses could further worsen the company's financial position.

(click to enlarge)

Sources: Capital IQ

Interest coverage

Due to the recent fed potential tapering, it is likely that interest rate coverage would decline, putting a strain on the company's ability to generate profits. Previously, the company increased its debt positions to take advantage of both booming china and cheap credit. Now with a much inflated debt to cash ratio, things are about to unwind.

Sources: Capital IQ

All in all

As such, I am convinced that shorting Rio Tinto is a great way to lever up on the potential China slowdown or crash. The best way may be to buy long term put options, instead of a outright short, to limit potential losses, while still having the majority of profits.

Source: A Bearish Case For Rio Tinto: Commodities Conundrum

Disclosure: I have no positions in any stocks mentioned, but may initiate a short position in RIO over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. (More...)

Tuesday, June 25, 2013

The Death of a Tablet

I wanted to Nook to keep on keeping on, but it was like wanting to have a pet store goldfish live to see seven years old: It just wasn't going to happen. In hindsight, that's an easy call to make. At the time, I thought that the Barnes & Noble (NYSE: BKS  ) would have more success if they spun the business off, funded it with equity, and spent the cash on more development to compete with other tablets. I certainly didn't think it was going to get cut. Now that it's happened, the path it took the grave has become clear.

A promising beginning
While we can look at the end product and pass harsher judgment, the early Nook tablets were easy to love. The Nook tablet was announced as the successor to the Nook Color in late 2011. From the very first days, commenters saw that the tablet had the hardware to be a champion. The two issues that would plague the tablet, starting in those early days, were competition and the lack of a robust ecosystem.

At the time, Amazon (NASDAQ: AMZN  ) was already running strong with the Kindle line, having announced the Kindle Fire just a month or so ahead of the Nook tablet. The Kindle was Amazon's answer to Apple's (NASDAQ: AAPL  ) iPad. Then the Nook was Barnes & Noble's answer to the Kindle, and maybe to the iPad -- it's not totally clear.

The lack of clarity was the problem. Before the announcement, a survey by ChangeWave Research asked potential buyers to rank the available tablets. The tablet they were most likely to buy was the iPad, with 65% of respondents picking it. Kindle came in with 22% of the results, and then nothing else broke the 5% barrier.

Muddling in the middle
Given the dichotomy that Barnes & Noble was jumping into, it needed to have a clear message. Either the Nook was going to challenge the Kindle's consumption of media, with its easy-to-buy books, music, movies, and games, or it was going to be the shining, flawlessly designed answer to the iPad. Instead, it was kind of neither. The Nook never caught on because it didn't offer a real alternative to either system.

As a result, Nook sales puttered along through 2012. The tablet never really moved up the sales list, and Apple never felt threatened. Once the year was over, it was clear that the Nook just hadn't caught on. Holiday sales were a huge disappointment, and the company lost out on its already small market share.

The end
Along the way, Nook fans and Barnes & Noble investors got little glimpses of an alternate future. Microsoft and Pearson jumped into the Nook division, investing millions of dollars and at one point driving the value of the Nook division higher than the whole company's market capitalization. That's the future that I bought into -- the future where the Nook became its own business.

In the end, it just wasn't enough. The writing on the wall was the Nook's falling market share. Really successful devices gain market share because customers need to have them. No one seemed to really need a Nook, and so the Nook never built itself up into anything. If I had paid more attention to the consumer perception around the Nook instead of to what I thought the Nook could be, I would have seen this coming in February. It's a shame that I learned the lesson too late, but it's a good one to have learned, nonetheless.

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

EU Advocate General Sides With Google

AMSTERDAM (AP) -- A top lawyer at the European Court of Justice said Tuesday that Google (NASDAQ: GOOG  ) and other search engines should not have to remove web pages containing personal information from their search indexes.

In a blow for the "right to be forgotten" privacy principle in Europe, the court's independent Advocate General, Niilo Jaaskinen, said in a formal opinion that websites, not Google, should bear responsibility for information they publish.

Jaaskinen said Google's search function "does not imply any control over the content included on third party web pages." His opinion is not binding, but judges will typically follow much of its reasoning when they issue their decision later this year.

Google's information indexing system "does not even enable the Internet search engine provider to distinguish between personal data...and other data," Jaaskinen said.

The Luxembourg-based ECJ was asked to weigh in on the issue after a case in Spain, where the national data protection agency received complaints from individuals who said personal information from years earlier could be found on a simple Internet search.

The Spanish agency decided in their favor and ordered Google Spain and Google to ensure the information did not come up in search results. Google contested that in a Spanish court, arguing it shouldn't be put in the position of deciding what pages to censor.

The Spanish agency had invoked the "right to be forgotten," a principle derived from the idea that European citizens should be allowed control over their own personal data -- not have it stored and made accessible on-line by large companies.

However, Jaaskinen said that the idea that there is any general "right to be forgotten" is a misunderstanding.

Rather, he said, European individuals have a right to correct wrong information or protest the way their personal information is being used -- when they have good grounds.

That "does not entitle a person to restrict or terminate dissemination of personal data that he considers to be harmful or contrary to his interests," he said.

The Spanish data protection agency said Tuesday it was still studying the ruling and did not have any immediate reaction.

Google, based in Mountain View, Calif., welcomed Jaaskinen's opinion.

"We're glad to see it supports our long-held view that requiring search engines to suppress 'legitimate and legal information' would amount to censorship," said Bill Echikson, who is "Head of Free Expression" for Google in Europe.

Jaaskinen's opinion did go against Google on one important point: It said that Google or other companies cannot argue they are not subject to local data regulators' authority because their servers are physically located in another country.

Joe McNamee, Director of European Digital Rights, a digital civil rights group, said the issue of "the right to be forgotten" has been overblown. He said his organization is more concerned with other privacy protections being weakened under a large rewrite of data protection law currently under debate by the European Parliament.

"The definition of personal data is being changed, consent rights are being weakened, the restrictions on profiling are being undermined and our data is being shipped off to a foreign country," he said in an email.

Google remains subject to local laws, and it could be forced to take steps amounting to blocking websites that house illegal content, such as those infringing intellectual property or those that display libelous or criminal information.

But Jaaskinen's opinion noted that when information is legal and in the public domain, blocking it would violate publishers' right to freedom of expression.

link

AstraZeneca's Refreshingly New Cancer Pact

Has Coleman Cable Made You Any Real Money?

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 Coleman Cable (Nasdaq: CCIX  ) , 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, Coleman Cable generated $45.0 million cash while it booked net income of $25.0 million. That means it turned 4.9% of its revenue into FCF. That sounds OK.

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 Coleman Cable 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 questionable cash flows amounting to only 0.8% of operating cash flow, Coleman Cable's cash flows look clean. Within the questionable cash flow figure plotted in the TTM period above, stock-based compensation and related tax benefits provided the biggest boost, at 3.1% of cash flow from operations. Overall, the biggest drag on FCF came from capital expenditures, which consumed 30.9% 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.

If you're interested in companies like Coleman Cable, you might want to check out the jaw-dropping technology that's about to put 100 million Chinese factory workers out on the street – and the 3 companies that control it. We'll tell you all about them in "The Future is Made in America." 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 Coleman Cable to My Watchlist.

Monday, June 24, 2013

Telefonica Sells Irish Subsidiary

In the latest move in a broad deleveraging effort, Spanish telecom incumbent Telefonica (NYSE: TEF  ) has divested one of its European subsidiaries. The company announced that it has reached agreement to sell Telefonica Ireland to Hong Kong-based conglomerate Hutchison Whampoa Group. The potential total price is 850 million euros ($1.1 billion), 780 million euros ($1.0 billion) of which will be handed over at the closing of the transaction while 70 million euros ($92 million) will take the form of a deferred payment to be transferred when certain financial objectives are met.

Telefonica will use the proceeds of the sale to reduce its debt. The company's current deleveraging program aims to reduce total indebtedness to under 47 billion euros ($62 billion) this year. This would be down notably from the peak of 56 billion euros ($73 billion) the firm reached in 2011. Its current market capitalization is nearly 45 billion euros ($59 billion).

Why Shares of Solazyme Plunged

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

What: Shares of Solazyme (NASDAQ: SZYM  ) fell as much as 20% today after it agreed to dissolve a promising joint venture.

So what: Solazyme and Roquette, a starch and starch-derivatives company, agreed to dissolve a joint venture formed in 2010 to create alternative foods from microalgae. The companies couldn't decide on a manufacturing and marketing strategy so they decided to go their separate ways.  

Now what: Instead of going forward with Roquette, Solazyme said it will accelerate commercialization of its own food ingredients, so this could result in earlier revenue than the joint venture would've provided. But, without the backing of a major food player, the company faces more risks. Until Solazyme can prove that it can commercialize products and generate significant revenue, I'm staying away. A $670 million market cap is pricing in a lot of success for a company with just $6.7 million in revenue last quarter.

Interested in more info on Solazyme? Add it to your watchlist by clicking here.

Handling Big Data in a Privacy-Obsessed World

You may not have heard of NeuStar (NYSE: NSR  ) , but the services it provides can affect you greatly. This $3 billion company is also handily beating the market as it shifts its focus to move deeper into the information and analytics industry.

NeuStar started its life as an operating unit within Lockheed Martin, and won its original contract to provide local telephone number portability services in 1996. It's kept that job and performed other services along the way, including administering the registry for the .BIZ and .US Internet domain names.

After spinning off from Lockheed and notching years of success, NeuStar began to shift its focus to information and data analytics services under CEO Lisa Hook. That led to the acquisition of TARGUSinfo in 2011.

Our roving reporter Rex Moore attended the big Cable Show in Washington, D.C., and asked NeuStar's Gary Zimmerman about the company's competitive advantages.

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

Hot Services Companies To Own For 2014

Yahoo! (NASDAQ: YHOO  ) recently announced that it's partnering with dropbox to offer more comprehensive services to users of Yahoo! Mail. As a part of the company's push to revamp its image and reclaim lost market share, the move shows great promise. Along similar lines, the company is engaged in early discussions with Apple (NASDAQ: AAPL  ) to deepen the relationship between the search company and Cupertino.

In the following video, contributor Doug Ehrman discusses the actions Yahoo! is taking, the potential impact these moves may have on users, and the investment ramifications, particularly if these enhancements are successful.

There's no doubt that Apple is at the center of technology's largest revolution ever and that longtime shareholders have been handsomely rewarded, with more than 1,000% gains. However, there is a debate raging as to whether Apple remains a buy. The Motley Fool's senior technology analyst and managing bureau chief, Eric Bleeker, is prepared to fill you in on both reasons to buy and reasons to sell Apple and what opportunities are left for the company (and your portfolio) going forward. To get instant access to his latest thinking on Apple, simply click here now.

Hot Services Companies To Own For 2014: Terramin Australia Ltd(TZN.AX)

Terramin Australia Limited engages in the exploration, evaluation, and development of base metal projects in Australia and internationally. It focuses on zinc and lead metals. The company?s flagship project Tala Hamza is located on the Mediterranean coast of Algeria. It also holds 100% interest in Angas zinc mine located near the town of Strathalbyn in South Australia; 100% interest in Oued Amizour zinc project located on the north coast of Algeria on the Mediterranean Sea; and Menninnie zinc project located on northern Eyre Peninsula, South Australia. The company was incorporated in 1993 and is based in Adelaide, Australia.

Hot Services Companies To Own For 2014: Dada(DA.MI)

Dada S.p.A., together with its subsidiaries, provides Web and mobile community and entertainment services in Italy and internationally. Its Dada.net division offers various products and services in the areas of digital music, mobile applications, mobile services, social community, and casual and skill games that can be enjoyed on computers, mobile phones, and smartphones for consumers, as well as produces and broadcasts two music television satellite channels. The company?s Dada.pro division is involved in the registration of Internet domains and the management of online presence for individuals and businesses. It operates Register.it, a historical leader; and simply.com, a pay-for-performance online advertising platform, which allows users to plan advertising campaigns through marketing tools, as well as develops advertising solutions for Internet and for the UMTS portals of mobile phone carriers under the Dada Ad brand. This division also provides virtual hosting servic es. The company was founded in 1995 and is based in Florence, Italy. Dada S.p.A. is a subsidiary of RCS MediaGroup S.p.A.

Top Promising Stocks To Watch For 2014: Atlantic Power Cor Com Npv (ATP.TO)

Atlantic Power Corporation operates as a power generation and infrastructure company with a portfolio of assets in the United States and Canada. The net generating capacity of the company�s projects is approximately 2,140 megawatts consisting of interests in 31 operational power generation projects across 11 states in the United States and 2 provinces in Canada; one 53 megawatts biomass project under construction in Georgia; and an 84 mile, 500-kilovolt electric transmission line located in California. Atlantic Power Corporation also owns an interest in Rollcast Energy, a biomass power plant developer with various projects under development. The company was founded in 2004 and is headquartered in Boston, Massachusetts.

Sunday, June 23, 2013

How to Pay Off Debt -- and Earn Huge Returns

If you're like many people, you're carrying a debt load that you'd rather not have, and you'd also like to be accumulating funds for retirement. When a few extra dollars come your way, it can sometimes be hard to decide what to do with them. For example, you might spend them, pay off debt, or invest them.

The stock market can be particularly tempting, as stocks can increase in value by double digits sometimes. It's not easy to focus on how to pay off debt when you're looking at a biotech company that might double next year. Things are not quite what they seem, though. It becomes a simpler matter when you understand this: Paying off loans can actually deliver the biggest bang for your bucks.

Consider these typical interest rates that many of us face on our debts:

Car loan: 3% or more Mortgage: 4% or more Home equity loans: 5% or more Student loans: 7% or more Credit card balances: 16% to 20% or more

Now consider that the average annual return of the overall stock market, historically, is about 10%, and that it's often less than that. Sure, in 2009 the S&P 500 soared about 26%, and in 2012 it gained 16%. But in 2005 it added less than 5%, and in 2007 not much more than 5%. In 2011 it gained only about 2%, and in 2008... well, it plunged nearly 37%.

Bigger -- and guaranteed
Put all of this information together, and what to do becomes clear. By paying off any part of a debt with a 5% interest rate, you essentially earn a guaranteed 5% return on it! If you're saddled with a lot of high-interest rate credit card debt, well, that's indeed rough. But the silver lining is that you can earn big double-digit returns when you pay off that debt. If you pay $1,000 toward a loan charging you 20%, you're saving yourself from having to fork over some $200 annually on that debt. In fact, if you left that $1,000 principal in place, you'd be paying a lot of interest on it year after year -- so by paying off that debt you can save a lot of money!

How to pay off debt
Actually paying off debt can be easier said than done, though. Still it's not impossible, even with huge sums. Here are a few suggestions for how to pay off debt:

Tackle your highest-interest rate debt first, as it will save you the most money over the long run. Then move on to lower-rate debt. Ignore minimum payment amounts and make maximum ones, paying down as much as you can.
  Rein in as much of your discretionary spending as possible. There are powerful sums to be saved simply by cutting out a few luxuries such as a daily Frappuccino or a service you rarely use. Review your regular expenses, too -- you may no longer need collision coverage on your car insurance, for example, if the car is very old.
  If having a credit card in your pocket makes it too tempting to charge items you don't absolutely need and may not be able to pay for right away, consider making your purchases only with cash or checks.
  You might rearrange your debt by paying off higher-interest-rate credit card debt with a lower-interest home equity loan or by moving your balance to a lower-rate card.
  You might even consider taking on a part-time job for a while, to generate extra income. That probably doesn't sound like an appealing option, but if you add 10 hours per week at $15 per hour for just one year, that's $7,800, pre-tax.
  Don't let yourself be discouraged now or later. Get inspiration from folks who have paid off many tens of thousands of dollars in debt. You can learn a lot about how to pay off debt from them.

How to pay off debt becomes a simpler matter once you see how powerful an investment in your future it really is, and once you create a plan for actually doing it.

Making the right financial decisions today makes a world of difference in your golden years, but with most people chronically under-saving for retirement, it's clear not enough is being done. Don't make the same mistakes as the masses. Learn about The Shocking Can't-Miss Truth About Your Retirement. It won't cost you a thing, but don't wait, because your free report won't be available forever.

These Billion-Dollar Markets Are Ready for Disruption

Ideal Power Converters won a National Innovation Award at the recent TechConnect National Innovation Conference near Washington, D.C. This private company's 3-Port Hybrid Converter reduces costs and improves the efficiency of systems that integrate photovoltaic, grid-storage, and electric-vehicle charging.

IPC believes its technology can disrupt traditional products offered by ABB (NYSE: ABB  ) and Eaton (NYSE: ETN  ) . Our roving reporter Rex Moore caught up with IPC CEO Paul Bundschuh at the conference, and chatted about the billion-dollar opportunities in these markets.

Meanwhile, there are many different ways to play the energy sector, and The Motley Fool's analysts have uncovered an under-the-radar company that's dominating its industry. This company is a leading provider of equipment and components used in drilling and production operations, and poised to profit in a big way from it. To get the name and detailed analysis of this company that will prosper for years to come, check out the special free report: "The Only Energy Stock You'll Ever Need." Don't miss out on this limited-time offer and your opportunity to discover this under-the-radar company before the market does. Click here to access your report -- it's totally free.

Have the mREITs Finally Reached the Bottom?

The following video is from Wednesday's installment of The Motley Fool's daily Financials show, in which analysts Matt Koppenheffer and David Hanson highlight for investors the most important stock news from the financial sector.

In the video segment below, David tells us why American Capital Agency (NASDAQ: AGNC  ) popped today despite declaring that it would be reducing its dividend by 16% compared to last quarter. David also explains why he isn't sure this signals a rising tide for the mREIT space.

Another mREIT worth watching
There's no question Annaly Capital's double-digit dividend is eye-catching. But can investors count on that payout sticking around? With the Federal Reserve keeping interest rates at historically low levels, Annaly has had to scramble to defend its bottom line. In The Motley Fool's premium research report on Annaly, senior analysts Ilan Moscovitz and Matt Koppenheffer uncover the key challenges the company faces and divulge three reasons investors may consider buying it. Simply click here now to claim your copy today!

The relevant video segment can be found between 3:45 and 4:35.

For the full video of today's Financials show, click here.