Saturday, May 31, 2014

10 Best Insurance Stocks To Watch Right Now

10 Best Insurance Stocks To Watch Right Now: Cincinnati Financial Corporation(CINF)

Cincinnati Financial Corporation engages in the property casualty insurance business in the United States. Its Commercial Lines Property Casualty Insurance segment provides coverage for commercial casualty, commercial property, commercial auto, and workers? compensation. It also offers specialty packages, including coverages for property, liability, and business interruption for specific industry classes, such as artisan contractors, dentists, or street businesses. In addition, this segment provides contract and commercial surety bonds, fidelity bonds, and director and officer liability insurance, as well as machinery and equipment coverage. The company?s Personal Lines Property Casualty Insurance segment offers coverage for personal auto and homeowners, as well as other insurance products, such as dwelling fire, inland marine, personal umbrella liability, and watercraft coverages to individuals. Cincinnati Financial?s Excess and Surplus Lines Property Casualty Insurance s egment offers commercial casualty insurance that covers businesses for third-party liability from accidents occurring on their premises or arising out of their operations, including products and completed operations; and commercial property insurance, which insures loss or damage to buildings, inventory, equipment, and business income from causes of loss, such as fire, wind, hail, water, theft, and vandalism. The company?s Life Insurance segment provides term insurance; universal life insurance; whole life insurance; and worksite products, which include term, whole life, universal life, and disability insurance offered to employees through their employer. This segment also markets disability income insurance, deferred annuities, and immediate annuities. Its Investment segment invests in fixed-maturity investments, equity investments, and short-term investments. Cincinnati also offers commercial leasing and financing services. The company w! as founded in 1950 and is headquart e red in Fairfield, Ohio.

Advisors' Opinion:
  • [By Dividends4Life]

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  • [By Dan Caplinger]

    Investors have always been interested in stocks that pay dividends, but lately, low interest rates on bonds and other fixed-income investments have made solid dividend payers even more valuable. Among the most promising dividend stocks in the market is Cincinnati Financial (NASDAQ: CINF  ) , and one big reason is that it is one of the few exclusive companies to make the list of Dividend Aristocrats. In order to become a member of this elite group, a company must have raised its dividend payouts to shareholders every single year for at least a quarter-century. Only a few dozen stocks manage to make the cut, and those that do tend to stay there for a long time.

  • [By Dividends4Life]

    Cincinnati Financial Corp. (CINF) is an insurance holding company that primarily markets property and casualty coverage. It also conducts life insurance and asset management operations. The company has paid a cash dividend to shareholders every year since 1954 and has increased its dividend payments for 53 consecutive years. Yield: 3.3%

  • [By Dividends4Life]

    Fair Value: In calculating fair value, I consider the NPV MMA Differential Fair Value along with these four calculations of fair value, see page 2 of the linked PDF for a detailed description: 1. Avg. High Yield Price 2. 20-Year DCF Price 3. Avg. P/E Price 4. Graham Number GD is trading at a premium to all four valuations above. The stock is trading at a 49.9% premium to its calculated fair value of $71.45. GD did not earn any Stars in this section. Divi! dend Anal! ytical Data: In this section there are three possible Stars and three key metrics, see page 2 of the linked PDF for a detailed description: 1. Free Cash Flow Payout 2. Debt To Total Capital 3. Key Metrics 4. Dividend Growth Rate 5. Years of Div. Growth 6. Rolling 4-yr Div. > 15% GD earned two Stars in this section for 1.) and 2.) above. A Star was earned since the Free Cash Flow payout ratio was less than 60% and there were no negative Free Cash Flows over the last 10 years. The stock earned a Star as a result of its most recent Debt to Total Capital being less than 45%. The company has paid a cash dividend to shareholders every year since 1979 and has increased its dividend payments for 23 consecutive years. Dividend Income vs. MMA: Why would you assume the equity risk and invest in a dividend stock if you could earn a better return in a much less risky money market account (MMA) or Treasury bond? This section compares the earning ability of this stock with a high yield MMA (20-year Treasury bond). Two items are considered in this section, see page 2 of the linked PDF for a detailed description: 1. NPV MMA Diff. 2. Years to > MMA The NPV MMA Diff. of the $741 is below the $1,200 target I look for in a stock that has increased dividends as long as GD has. If GD grows its dividend at 10.0% per year, it will take 6 years to equal a MMA yielding an estimated 20-year average rate of 3.68%. Memberships and Peers: GD is a member of the S&P 500 and a member of the Broad Dividend Achievers Index. The

  • source from USA Best Stocks:http://www.usabeststocks.com/10-best-insurance-stocks-to-watch-right-now.html

Hot Healthcare Technology Stocks To Own For 2015

Hot Healthcare Technology Stocks To Own For 2015: CapitalSource Inc (CSE)

CapitalSource Inc., through its subsidiaries, provides financial products to small and middle market businesses in the United States. It offers depository products and services, such as savings and money market accounts, individual retirement account products, and certificates of deposit. The company also provides senior secured real estate and asset-based loans, and cash flow loans, which have a first priority lien in the collateral securing the loan. Its asset-based loans are collateralized by specified assets of the client, primarily the clients accounts/notes receivable, inventory, and machinery; and real estate loans are secured by senior mortgages on real property. The company focuses on providing equipment loans and leases; loans to healthcare providers; commercial real estate and multifamily real estate loans; loans secured by timeshare, auto, and other consumer receivables; student loans; traditional life insurance premium finance loans; and loans to technology companies, small businesses, dentists, physicians, pharmacists, and optometrists, as well as to companies in the physical security, government security, and public safety sectors. It operates through 21 retail bank branches in southern and central California, as well as lending offices in the United States. The company was founded in 2000 and is headquartered in Los Angeles, California.

Advisors' Opinion:
  • [By David Hanson and Matt Koppenheffer]

    In this segment of The Motley Fool's everything-financials show,Where the Money Is, banking analysts Matt Koppenheffer and David Hanson discuss the recent announcement of PacWest Bancorp's (NASDAQ: PACW  ) intention to buy CapitalSource (NYSE: CSE  ) .

  • source from Top Penny Stocks For 2015:http://www.seekpennystocks.com/hot-healthcare-technology-stocks-to-own-for-2015.html

Friday, May 30, 2014

15 Oil and Gas Stocks to Sell Now

RSS Logo Portfolio Grader Popular Posts: 15 Oil and Gas Stocks to Sell Now10 Best “Strong Buy” Stocks — EQM DAL BITA and more7 Biotechnology Stocks to Buy Now Recent Posts: Biggest Movers in Services Stocks Now – BIG GCO TKC ANN Hottest Basic Materials Stocks Now – ABX CIR IFF WIRE Biggest Movers in Consumer Cyclical Stocks Now – KORS TSLA TM GT View All Posts

The overall ratings of 15 oil and gas stocks are down on Portfolio Grader this week. Each of these rates a “D” (“sell”) or “F” overall (“strong sell”).

Crescent Point Energy Corp.’s () rating falls this week to an F (“strong sell”), down from last week’s D (“sell”). In Portfolio Grader’s specific subcategories of Earnings Revisions, Earnings Surprise, Cash Flow and Margin Growth, CPG also gets F’s. Shares of the stock have been changing hands at an unusually rapid pace, twice the rate of the week prior. The stock’s trailing PE Ratio is 109.50. .

Golar LNG Partners’ () rating falls to a D (“sell”) this week, down from C (“hold”) the week prior. Golar LNG Partners owns floating storage and regasification units and liquefied natural gas carriers. Shares of the stock have been trading at an exceptionally rapid pace, up fourfold from the week prior. .

Slipping from a D to an F rating, Cosan Limited Class A () takes a hit this week. Cosan is a fully integrated company in the renewable energy and infrastructure segments in Brazil. The stock gets F’s in Cash Flow and Margin Growth. Shares of the stock have been changing hands at an unusually rapid pace, up 589.9% from the week prior. The stock currently has a trailing PE Ratio of 38.60. .

Goodrich Petroleum Corporation () experiences a ratings drop this week, going from last week’s C to a D. Goodrich Petroleum explores, develops, produces and acquires oil and natural gas properties. The stock receives F’s in Earnings Growth, Earnings Revisions, Equity and Cash Flow. As of May 30, 2014, 33.1% of outstanding Goodrich Petroleum Corporation shares were held short. Shares of the stock are being traded at a very rapid pace, up 658.2% from the week prior. .

The rating of EXCO Resources, Inc. () declines this week from a D to an F. EXCO Resources is an oil and natural gas company involved in the exploration, exploitation, development and production of onshore North American oil and natural gas properties. The stock gets F’s in Earnings Surprise, Equity and Cash Flow. As of May 30, 2014, 12% of outstanding EXCO Resources, Inc. shares were held short. .

Calumet Specialty Products Partners, L.P. () earns an F this week, moving down from last week’s grade of D. Calumet Specialty Products produces hydrocarbon products in North America. The stock receives F’s in Earnings Growth, Earnings Momentum and Earnings Revisions. Cash Flow and Margin Growth also get F’s. .

Plains All American Pipeline, L.P. () earns a D this week, falling from last week’s grade of C. Plains All American Pipeline is involved in interstate and intrastate crude oil pipeline transportation and crude oil terminalling storage activities. Shares of the stock have been trading at an exceptionally rapid pace, up threefold from the week prior. .

TransCanada Corporation’s () rating weakens this week, dropping to an F versus last week’s D. TransCanada develops and operates energy infrastructures, including natural gas pipelines. Shares of the stock have been changing hands at an unusually rapid pace, three times the rate of the week prior. The trailing PE Ratio for the stock is 29.80. .

This is a rough week for Enbridge (). The company’s rating falls to F from the previous week’s D. Enbridge is in the business of transportation and distribution of crude oil and natural gas primarily in Canada and the United States. The stock gets F’s in Earnings Growth, Earnings Momentum and Cash Flow. Trade volume is up 615% from the previous week. The stock has a trailing PE Ratio of 69.70. .

This week, StealthGas () drops from a C to a D rating. StealthGas offers marine transport services for liquefied petroleum gas producers and users. In Earnings Growth, Earnings Revisions, Earnings Surprise and Cash Flow the stock gets F’s. .

Ultrapar Participacoes S.A. Sponsored ADR () gets weaker ratings this week as last week’s D drops to an F. Ultrapar Participacoes is engaged in the fuel distribution and chemical businesses in Brazil. Shares of the stock have been trading at an exceptionally rapid pace, up twofold from the week prior. .

This week, Gevo’s () rating worsens to an F from the company’s D rating a week ago. Gevo operates as a technology development company for biobutanol. The stock gets F’s in Equity, Cash Flow and Sales Growth. As of May 30, 2014, 11.7% of outstanding Gevo shares were held short. Trade volume is up 1155.7% from the previous week. .

Slipping from a C to a D rating, PDC Energy () takes a hit this week. PDC Energy is an oil and gas company with drilling and production operations in the Rocky Mountains, the Appalachian Basin and Michigan. The stock gets F’s in Earnings Revisions and Cash Flow. As of May 30, 2014, 11.5% of outstanding PDC Energy shares were held short. .

This week, Chevron Corporation’s () rating worsens to an F from the company’s D rating a week ago. Chevron is an integrated energy company with operations in countries located around the world. Shares of the stock have been changing hands at an unusually rapid pace, four times the rate of the week prior. .

This is a rough week for Kinder Morgan, Inc. Class P (). The company’s rating falls to F from the previous week’s D. Kinder Morgan is a pipeline transportation and energy storage company. The stock currently has a trailing PE Ratio of 29.30. .

Louis Navellier’s proprietary Portfolio Grader stock ranking system assesses roughly 5,000 companies every week based on a number of fundamental and quantitative measures. Stocks are given a letter grade based on their results — with A being “strong buy,” and F being “strong sell.” Explore the tool here.

Thursday, May 29, 2014

Best Net Payout Yield Companies To Buy Right Now

Best Net Payout Yield Companies To Buy Right Now: Flotek Industries Inc (FTK)

Flotek Industries, Inc. (Flotek), incorporated on May 17, 1985, is a diversified global supplier of drilling and production related products and services. Its core focus is oilfield specialty chemicals and logistics, down-hole drilling tools and down-hole production tools used in the energy and mining industries. Flotek operates in three segments: Chemicals and Logistics, Drilling Products and Artificial Lift. The Company operates using third party agents in Canada, Mexico, Central America, South America, the Middle East, and Asia. In May 2013, Flotek Industries Inc through its wholly owned subsidiary acquired the entire share capital of Florida Chemical Co Inc.

Chemicals and Logistics

The chemical business provides oil and natural gas field specialty chemicals for use in drilling, cementing, stimulation and production activities. The Companys specialty chemicals are manufactured to withstand a range of down-hole pressures, temperature s and other well-specific conditions. Flotek operates two laboratories, a technical services laboratory and a research and development laboratory, which focus on design, development and testing of new chemical formulations and enhancement of existing products, often in cooperation with the customers. Its micro-emulsions are stable mixtures of oil, water and surface active agents, forming complex nano-fluids, in which the molecules are organized into nanostructures. The micro-emulsions are composed of renewable plant derived cleaning ingredients and oils and are biodegradable. Floteks logistics business designs, project manages and operates automated bulk material handling and loading facilities. These bulk facilities handle oilfield products, including sand and other materials for well-fracturing operations, dry cement and additives for oil and gas well cementing, and supply materials used in oilfield operations.

Drilling Products

!

Flotek is a pr ovider of down-hole drilling tools used in the oilfield, min! ing, water-well and industrial drilling activities. It manufactures, sells, rents and inspects specialized equipment for use in drilling, completion, and production and workover activities. The rental tools include stabilizers, drill collars, reamers, wipers, jars, shock subs, wireless survey, and measurement while drilling (MWD) tools and mud-motors. Equipment sold primarily includes mining equipment, centralizers and drill bits. Flotek focuses its product marketing primarily in the Southeast, Northeast, Mid-Continent and Rocky Mountain regions of the United States, with international sales conducted through third party agents.

Artificial Lift

Flotek provides pumping system components, electric submersible pumps (ESPs), gas separators, production valves and services. The products address the needs of coal bed methane and traditional oil and gas production to move gas, oil and other fluids from the producing horizon to the surface. The Artificial L ift products employ technologies to improved performance. The Petrovalve product optimizes pumping efficiency in horizontal completions, heavy oil and wells with high liquid to gas ratios. Artificial Lift products are manufactured in China, assembled domestically and distributed globally.

Advisors' Opinion:
  • [By David Smith]

    Flotek Industries (NYSE: FTK  )
    I've mentioned Flotek Industries to Fools in the past. The relatively small ($940 million capitalization and growing) company provides a range of products and assistance for oil and gas operations, from well construction to production. It's also the only services company -- and one of but a handful of companies in any sector -- that's been accorded a perfect consensus of one (strong buy) by the analysts.

  • source from Top Penny Stocks For 2015:http://www.seekpennystocks.com/best-net-pay! out-yield! -companies-to-buy-right-now.html

Wednesday, May 28, 2014

Can Apple-Beats jazz up stagnant industry?

SAN FRANCISCO — Can Apple CEO Tim Cook squeeze growth out of a stagnant industry?

Maybe – now that he's bought a company that can convince consumers to shell out $100 for a pair of ear buds.

Apple's acquisition of Beats Electronics gives the technology giant a small but much-needed product refresh in both hardware and software.

In addition to its line of hip consumer electronics – Beats sells audio gear at Best Buy's online store for between $80 and $380, for example – the Santa Monica-based upstart rolled out an online streaming music service in January.

Given that global streaming music revenue surged 51 percent in 2013, while U.S. sales of downloaded singles fell 3.3 percent, the deal should goose Apple's iTunes business, where growth has slowed dramatically in the past 12 months.

Total Apple revenue is seen rising 6 percent for the fiscal year ended in September, less than last year, as Samsung and other smartphone rivals take iPhone market share with large-screen devices.

If Cook can plug the music industry cred of Beats co-founder and legendary rap producer Dr. Dre into Apple's marketing machine, he could boost growth.

And having veteran industry executive Jimmy Iovine, Beats' other co-founder, along as a partner could help in future music-licensing negotiations with the big labels.

While Beats is Apple's largest acquisition ever, getting a hot product portfolio that comes with industry savvy for $3 billion seems like a pretty safe financial bet when you manage more than $200 billion in assets, as Cook does.

Still, the music business is a tough place to find growth, with U.S. sales remaining stagnant at $7 billion for three straight years, according to the Recording Industry Association of America.

Digital sales rose almost 8 percent, though, and Cook now has the assets to capture more of that growing market if he can fit together all the pieces and personalities Apple just acquired.

In addition to new iPhones and iPads, U.S.! consumers can count on seeing a lot more Beats ear buds, headphones and speakers in advertising, online and in Apple stores soon.

John Shinal has covered tech and financial markets for more than 15 years at Bloomberg, BusinessWeek,The San Francisco Chronicle, Dow Jones MarketWatch, Wall Street Journal Digital Network and others. Follow him on Twitter: @johnshinal.

European stocks slip, but Telecom Italia scales higher

LONDON (MarketWatch) -- European stocks drifted lower Wednesday, leaning back from a six-year high brought in by a five straight winning sessions. The Stoxx Europe 600 (XX:SXXP) shed 0.2% to 344.01, with shares of Osram Licht AG (DE:OSR) sliding 7.6% as the lighting company issued a downbeat fiscal-year revenue forecast. Also lower, shares of GlaxoSmithKline PLC (UK:GSK) (GSK) fell 1.7% after the drug maker said British regulators are probing its commercial practices . But Telecom Italia SPA (IT:TIT) sat at the top of the Stoxx 600, rising 4% after Goldman Sachs put the shares on its conviction buy list. Among country-specific indexes, the U.K.'s FTSE 100 (UK:UKX) fell 3 points to 6,842.33, the German DAX 300 shed 0.1% to 9,935.30 and France's CAC 40 (FR:PX1) slipped 2 points to 4,527.76.

Tuesday, May 27, 2014

Is VeriFone A Buy?

Provider of electronic payment solutions, VeriFone Systems (PAY), lit up the Street with its first-quarter results by beating analysts' expectations. Investors were overwhelmed by the company's surprising performance, sending shares higher.

Delving deeper...

Both revenue and earnings per share were ahead of estimates, as they increased 2% and 36%, respectively. VeriFone managed to increase its revenue by having an installed base of 20 million terminals across 150 countries. However, the company has a list of issues which are yet to be resolved.

The hurdles faced

The biggest problem for VeriFone has been a lack of research and development efforts which led to bigger problems such as lack of product certifications and loss of customers. As a result, it lost market share in most of the markets despite decreasing product prices. Moreover, loss of a U.S. petroleum deal will be affecting revenue from the region even more.

Against industry players

In an environment where innovation is the key to a successful business, the electronic payment company has been lagging behind. Hence, VeriFone faces stiff competition from its industry peers who have been continuously making the right moves.

One of its strongest rivals, NCR Corporation (NCR), has been getting some great contracts to deliver its technology. Its expansion in China looks interesting with China Eastern Airlines expanding NCR check-in kiosks for its domestic airports.

NCR's expansion has been remarkable as it will also be delivering its technology solutions to shopping malls in China. The company has been very active and has been investing in a number of payment technologies. Its new orders to supply ATMs in China and other deals highlight the growth of this company.

Even Square is an important player with its best move being in mobile payments. The launch of its mobile payment platform set the market on fire, especially when coffee retailer Starbucks (SBUX) invested its money to adopt the new technology. Starbucks announced that all its transactions will be processed by Square.

Square's innovation enabled the coffee maker to attract customers in hordes since this technology provided a convenient way of paying for their coffee. Starbucks has been reaping the benefit which is evident from its move to ramp up its mobile payment system. The retailer also announced that 10% of its transactions are done through smartphones, signifying the success story of both Square and Starbucks.

On the other hand, VeriFone was a laggard with negligible efforts to innovate. However, there have been some improvements during the last quarter that are worth noting.

Interesting moves

It has made two new acquisitions, EFTPOS New Zealand Ltd. and Sektor, which will help in revenue growth. It has been focussing on payment-as-a-service segment in regions such as New Zealand, Australia and the U.S. since the segment is growing at a rate of 11% to 13%.

VeriFone also launched the taxi payment application called Way2ride which might prove to be fruitful for the company's prospects.

Its other moves such as making various applications available for tablets, such as GlobalBay Merchant and renewing existing contracts might help the company to stage a comeback.

Additionally, VeriFone has been performing well in its Services segment, which grew 17% during the quarter. This segment continues to perform well with growth in revenue during each quarter. Moreover, the company has been increasing its investments in R&D and paid off $160 million of debt during the quarter.

The bottom line

The company has been making a lot of effort to improve its performance. With increasing revenue and a stock price surge of 25.9%, VeriFone seems like an interesting investment. However, it faces stiff competition from its peers. Though the competition has been tough the payment solutions provider has started making some moves. Hence, investors should give this company a thought.

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Monday, May 26, 2014

Mexico's economy remains weak in first quarter

MEXICO CITY--Mexico's economy remained weak in the first quarter as the economic slowdown in the U.S. weighed on the country's vital export engine and the impact of new taxes hit domestic demand.

Gross domestic product expanded 0.28% in the January-to-March period, seasonally adjusted from the previous quarter, the national statistics agency said Friday, below expectations of 0.4%. The increase translates into an annualized seasonally adjusted rate of 1.1%.

The economy expanded 1.8% from the first quarter of 2013, helped by the shift in the Easter holiday this year to April. Adjusting for the calendar effect, growth was 0.6% from a year earlier.

Mexico's government is expected to adjust its optimistic 3.9% growth forecast for 2014 later in the day after the disappointing first quarter, in which the economy didn't clearly recover from the 1.1% expansion registered in 2013.

Household consumption, a key driver of domestic demand, showed few signs of recovery during the first quarter. Across-the-board tax increases that came into force at the beginning of the year hit the purchasing power of consumers and business confidence, analysts said.

Top 10 Electric Utility Companies To Watch In Right Now

Services expanded 1.8% in the quarter from a year earlier, a marginal improvement from the 1.3% growth in the fourth quarter, while volatile agricultural production rose 4.9%, with higher production of corn and other crops.

During the first quarter, the industrial sector expanded 1.6%. Construction shrank 2.8%, with several major housing-construction firms struggling under a pile of debt, while the manufacturing industry advanced 4.3%, supported by the auto industry.

Write to Juan Montes at juan.montes@wsj.com

Sunday, May 25, 2014

10 Best Semiconductor Stocks To Invest In Right Now

10 Best Semiconductor Stocks To Invest In Right Now: Micron Technology Inc.(MU)

Micron Technology, Inc., together with its subsidiaries, engages in the manufacture and marketing of semiconductor devices worldwide. Its products include dynamic random access memory (DRAM) products that provide data storage and retrieval, which include DDR2 and DDR3; and other specialty DRAM memory products, including DDR, SDRAM, DDR and DDR2 mobile low power DRAM, pseudo-static RAM, and reduced latency DRAM. The company also offers NAND flash memory products, which are electrically re-writeable and non-volatile semiconductor devices that retain content when power is turned off. In addition, it provides NOR flash memory products that are electrically re-writeable and non-volatile semiconductor memory devices; phase change memory products; and image sensor products. Micron Technology?s products are used in a range of electronic applications, including personal computers, workstations, network servers, mobile phones, flash memory cards, USB storage devices, digital still c ameras, MP3/4 players, and in automotive applications. It sells its products to original equipment manufacturers and retailers through internal sales force, independent sales representatives, and distributors, as well as through a Web-based customer direct sales channel. The company was founded in 1978 and is headquartered in Boise, Idaho.

Advisors' Opinion:
  • [By Selena Maranjian]

    Finally, Renaissance's biggest closed positions included Appleand Cisco Systems. Other closed positions of interest include Micron Technology (NASDAQ: MU  ) , which is trading near its 52-week high and has a forward P/E ratio near 20. The struggling PC market has hurt the company, but bulls are hopeful about growth in tablets and smartphonesdriving demandfor memory chips. Its second-quarter earnings report featured lower costs and rising margins that hinted at a return to profitability soon. Micron's purchase of Japanese ! manufacturer Elpida also seems promising, boosting its capacity and its relationship withApple. Micron has been losing market share, though, and some worry about the commoditization of memory, recent net losses, and Micron's debt levels.

  • [By Piyush Arora]

    This supply shortage pushed DRAM even higher, boosting the profit margins of Micron (NASDAQ: MU  ) , SK Hynix, and Samsung (NASDAQOTH: SSNLF  ) . However, in light of some recent developments, there is reason to believe that this pricing advantage enjoyed by DRAM manufacturers could be short lived.

  • [By Jon C. Ogg]

    Stern Agee reports that there is potential for a minor DRAM-NAND disruption in Hynix Quxi supply, which would be a positive for both SanDisk Corp. (NASDAQ: SNDK) and Micron Technology Inc. (NASDAQ: MU). The report is based mostly on unconfirmed news of smoke at the Hynix’s Wuxi China fab.

  • source from Top Penny Stocks:http://www.seekpennystocks.com/10-best-semiconductor-stocks-to-invest-in-right-now.html

Saturday, May 24, 2014

What to watch: Sizing up 'stealth' correction

The broad U.S. stock market is again trading in record-high territory, but under the surface of the "stealth" correction this spring lurks some serious losses.

In short, while none of the well-known U.S. stock indexes have suffered an official "correction," or a drop of 10% or more, a large percentage of individual names are down 10% or more. And many are down more than 20%-plus, which puts those names into bear market territory.

On Friday, Strategas Research Partners profiled a chart that shows just how much pain the average U.S. stock has suffered in the mini-correction. The stock market has been going through a rocky period, caused in large part by nasty winter weather and chilly geopolitical winds blowing in from the Ukraine.

While the Standard & Poor's 500 index closed Friday at an all-time high of 1,900.53, the average stock in the benchmark large-cap index is down more than 7%.

Similarly, the average stock in the small-cap Russell 2000 index was down about 20%, despite the index being down about 7% from its March 4 peak.

And the average stock decline in the technology-dominated Nasdaq composite was in excess of 22%, despite the fact the index itself is down less than 5% from its 2014 peak.

The takeaway?

While the S&P 500 is now trading at a record high, the damage to many stocks can't be ignored.

Follow Adam Shell on Twitter @adamshell

Thursday, May 22, 2014

Mortgage rates fall - lowest since October

chart mortgage rates drop NEW YORK (CNNMoney) Mortgage rates are at their lowest level since October.

The average rate for a 30-year, fixed-rate loan fell to 4.14% from 4.2% last week, Freddie Mac said Thursday.

Interest rates have been pushed down as investors, skittish about the economy, have abandoned stocks for U.S. Treasuries, according to Mike Fratantoni, chief economist for the Mortgage Bankers Association.

But lower mortgage rates have not boosted the housing market.

Applications for mortgages used to purchase homes have been running about 10% behind the pace of a year ago, according to Mortgage Bankers Association stats.

There are several reasons why.

In some markets, home sales have been hurt by shortages of inventory, leaving buyers with few homes to choose from.

Further, lending standards continue to be strict. And that is leaving some potential homebuyers on the sidelines.

Janet Yellen: No obvious stock bubble   Janet Yellen: No obvious stock bubble

There are some positive signs for housing, according to Frank Nothaft, Freddie Mac's chief economist.

In April, the number of permits to build new houses and the number of new homes that started to be built rose more than expected, he said.

Lower rates have also spurred a slight increase in refinance applications, but those are still well off year ago levels.

The average rate for a 15-year mortgage, a popular loan for refinancing, fell to 3.25% from 3.29% a week earlier.

Wednesday, May 21, 2014

Turmoil at Target: Let the Transformation Begin

Target (TGT) has gotten pounded this month after ousting its CEO, pushing out the head of its Canadian business and hiring a new chief information officer. So it would have made sense for Target’s shares to get hit again today after the retailer said it had missed analyst forecasts and lowered its guidance.

Getty Images

Nope. Target’s shares have gained 0.7% to $56.99, while competitors were mix. Wal-Mart (WMT) has dropped 0.2% to $75.52, while Macy’s (M) has ticked up 0.1% to $56.59, and Kohl’s (KSS) has advanced 0.7% to $52.70.

Deutsche Bank’s Paul Trussell and Matt Siler believe that Target’s future is less about its ability to sell lots of stuff than its ability to transform itself into, well, a better retailer. They explain:

…we believe the Target story going forward will be less about current retail trends and more about the ability of this big box retailer to successfully undergo a major transformation. In speaking with management, the company highlighted a focus on generating innovative ideas to improve both U.S. and Canadian operations, and speeding up the decision making process within the merchandise organization…

Sure, that might mean sacrificing its ability to stay on Target, but at this point, does anyone really care?

Tuesday, May 20, 2014

Cisco Systems, Inc. (CSCO) Q3 Earnings Preview: Something U-G-L-Y on the Horizon

Cisco Systems, Inc. (NASDAQ:CSCO) is scheduled to report third quarter fiscal year (FY) 2014 earnings after the close of the market on Wednesday, May 14, 2014. Management has scheduled a conference call at 1:30 PM (PT) to discuss financial results for the period.

Wall Street anticipates that the Networking & Communication Devices maker will earn $0.48 per share for the quarter, which is $0.03 less than last year's profit of $0.51 per share. iStock expects CSCO to top Wall Street's consensus number, the iEstimate is $0.49, a penny more than expected.

Sales, like earnings, are expected to decline, slipping 6.8% year-over-year (YoY). Cisco's consensus revenue estimate for Q3 is $11.38 billion, almost a bill lower than last year's $12.22 billion.

[Related -Cisco Systems, Inc. (CSCO): Why Weakness In Cisco Shares Is A Buying Opportunity?]

Cisco Systems designs, manufactures and sells Internet protocol (IP)-based networking and other products related to the communications and information technology (IT) industry and provide services associated with these products and their use. Its products are installed at enterprise businesses, public institutions, telecommunications companies, commercial businesses, and personal residences.

Surpassing the street's consensus is the norm for Cisco as the company posted 22 consecutive bullish earnings surprises. That's quite a streak. However, reported earnings tend to hug the consensus. Eleven of the last 22 positive surprises were $0.01 or $0.02 more than forecasted with a nickel as the max. The last four were split between $0.01 and $0.02.

[Related -On Finding Neglected Companies]

Although CSCO's May earnings were better than expected in the last four years (obviously), the share price hasn't fared as well in the emerald month. The stock price lost ground three of the last four May announcements, losing -10.15%, -4.83%, and -1.66% in the day surrounding earnings news. However, last May, Cisco shares broke the Q3 losing streak with a gain of 12.3%.

With sales expected to fall and revenue growth declining quarter-over-quarter (QoQ), moving the bullish surprise streak to 23 in a row will depend on margins and, frankly, iStock doesn't like what it see in the networking company's Q2 income statement.

Revenue fell 7.7% in Q2 relative to Q1, which could be a seasonal thing, but total operating expenses plus total costs or revenue grew to 85% of the top line in the second quarter compared to 79.69% in the first three months of the fiscal year. Rising cost and slower sales, no thank-you, that's a toxic mix for the bottom line.

What makes it even worse is that the biggest contributor was cost of revenue for product rising 12.08% while the segment's sales decreased by 10.74% YoY. They are crisscrossing in the wrong directions.

We also don't like to see inventory on the balance sheet building 4.88% compared to the previous year while total revenue is down -7.79%; again, two line-items driving down one-way streets in the wrong directions.

Overall: the iEstimate and Cisco Systems, Inc. (NASDAQ:CSCO) history suggest another small, bullish surprise is likely; however, the streak is in serious jeopardy if sales continue to head south with costs head north. Add in more product than demand as evidenced by increasing inventory as sales fall, and the pieces are in place for ugly quarter with timing the only question. 

Sunday, May 18, 2014

Deere & Company (DE) Q2 Earnings Preview: Bulldozing EPS - Again

Deere & Company (NYSE:DE) is scheduled to report second quarter, fiscal year (FY) 2014 sales and earnings before the opening of financial markets on Wednesday, May 14, 2014. The company will webcast a call with financial analysts and investors that day at 9:00 AM CT.

Wall Street anticipates that the agriculture machinery maker will earn $2.48 per share for the quarter, which is $0.28 less than last year's profit of $2.76 per share. iStock expects DE to run by Wall Street's consensus number, the iEstimate is $2.61.

Revenue, like earnings, is expected to slip, decreasing 6% year-over-year (YoY). Deere's consensus revenue estimate for Q2 is $9.65 billion, more than a half-bill less than last year's $10.26 billion.

[Related -Deere & Company (DE) Q3 Earnings Preview: Nothing Runs Backwards Like A Deere]

Deere & Company operates in three segments: agriculture and turf, construction and forestry and financial services.

The John Deere agriculture and turf segment manufactures and distributes a line of agricultural and turf equipment and related service parts. John Deere construction segment makes earthmoving, material handling and forestry equipment i.e. backhoes. The financial services segment primarily finances sales and leases by John Deere dealers of new and used agriculture and turf equipment and construction and forestry equipment.

According to Wall Street Cheat Sheet, DE's "whisper number" is $2.49, a penny more than expected.  He site reports that DE has topped the "whisper" 28 quarters, missed 13 quarters and never hit the number on the nose.

[Related -Deere & Company (DE): Short-Term Risks, Long-Term Opportunities]

Exceeding Wall Street's outlook is nothing new for the machinery maker. DE's EPS topped the consensus 12 of the last 13 quarterly checkups and usually by wide margins. On average, Deere earned 22.15% more than projected profits per share with a range of 3.03% to 100% above the street's view. Meanwhile, the lone miss was a shortfall of -7.69%.

Although Deere's EPS track record is just one shy of perfect in the last 13 quarters, earnings-driven price-sensitivity has been mixed. Investors greeted shares with gains eight of the last 13 announcements, gaining anywhere from 0.16% to 9.39% in the days surrounding the profit news. On five occasions, which includes the lone miss, the stock dropped an average of -4.22%.

For the most part, Deere's financial statements appear to be in order; although, there is room for improvement. According the first quarter's 10-Q, total sales increased 3.13% with other income (crop insurance premiums) and finance and interest income delivering the fastest growth rates, 36.36% and 6.09%, respectively. Meanwhile, total expenses were in-line, moving higher by 3.30%. The difference may not sound like much, but it works out to more than $1 million, which is a rounding error on the income statement.

The most concerning issue we see is inventory rising at almost 5.5 times the rate of equipment sales. Inventory increased 12.56% versus revenue growth of 2.29%. If demand doesn't meet the extra-supply, then discounts may be necessary to move machines. It may not be a concern this quarter, but will become one if the trend persists.

Overall: Deere & Company's (NYSE:DE) recent history, whisper number, and iEstimate strongly suggests another bullish surprise. At the same time, investors might be wise to pay attention to DE's inventory. If the line-item continues to grow faster than revenue, it could be a warning that demand is slowing and downward revisions/guidance coming. 

Saturday, May 17, 2014

Envestnet’s Karabell: Widely Used Economic Data Are Outdated

It’s almost impossible not to analyze the global economy in terms of GDP growth, trade deficits, unemployment data, inflation figures and interest rate changes.

These indicators, after all, have been around for decades, and most of the world leans on them to figure out what the future holds.

Yet the numbers actually mean little in a world that’s changing as rapidly as our world is, says Zachary Karabell, head of global strategies at Envestnet in Chicago and author of “The Leading Indicators: A Short History of the Numbers that Rule Our World,” because the conventional indicators that guide our thought processes were, constructed at a different time -- a time when the world was much smaller and more “static,” and numbers/indicators that hadn’t existed until then were needed to explain the challenges of such cataclysmic events as the Great Depression and World War II.

They may have had some relevance up until the 1950s, but today, in a world of global markets and “unfettered capital,” a world of unbridled commerce where products are made and sold in so many different places, and where technology changes from day-to-day, Karabell -- who spoke at Envestnet’s 2014 Advisor Summit in Chicago on Wednesday -- believes that the use of traditional indicators to predict future outcomes is totally counterproductive, particularly at the individual level. And events that may have occurred once or twice in the past, such as greater job growth resulting from higher GDP, should not be counted upon as indicators for the future.

It’s difficult, of course, not to rely on the familiar and a world without traditional indicators can seem scary, particularly for financial advisors, whose clients have not only become accustomed to basing their decisions on the standard indicators but also rely on their advisors to explain the cause and effect of these indicators.

Karabell, though, believes that this is a great time for advisors to think innovatively, to avail of their individual analytical capabilities and rely on the technology and tools at their disposal, in order to continue figuring out the changing world on their own terms. He believes it’s important to remember John Maynard Keynes’ dictum, that “it is better to be vaguely right than precisely wrong.”

He also believes that no decisions, financial planning or otherwise, should be taken in function of GDP projections or the direction of interest rates. As such, advisors and clients need to tune out the macro and figure out what’s important at the individual level, Karabell said in a separate interview, to “figure out what their question is and to go from there.”

As such, advisors and clients will be able to work toward using more personal, “made-to-order” indicators that are better suited to their needs and that can help them accomplish their objectives in a much better way.

 Check out ThinkAdvisor’s special section on Envestnet’s Advisor Summit.

Thursday, May 15, 2014

Hot Beverage Stocks To Watch Right Now

While competition has always been stiff in the beverage market for Pepsi, the pressure coming primarily from Coca Cola (KO), the company has managed to persist and expand into other markets that its competitors have little foothold in. Pepsi�� fourth quarter report showed both success and disappointment but the company still has a strong foundation and solid business strategy suitably adapted for the changing markets.

Fourth quarter results and what�� in store for the coming year

Pepsi released a mixed report for its fourth fiscal quarter of 2013. While the company�� profits rose from $1.06 per share in 2012 to $1.12 per share this past year, its core earnings fell slightly at the same time. And although revenue rose by 3% in its snack and food division, revenue from beverages fell by 1.6%. All in all, the company did manage to surpass analyst�� estimates but not by all that much and not in every area with which investors are concerned.

Despite mixed results at the end of 2013, investors can still expect to benefit from owning stock in Pepsi. After the release of its fourth quarter report, the company announced that it will boost payouts through a combined process of buying back shares and increasing dividends. Furthermore, with dividend yields already at 2.90% before the planned increase, it had already been inching toward the higher end of the spectrum in that regard.

Hot Beverage Stocks To Watch Right Now: California Grapes International Inc (CAGR)

California Grapes International, Inc., formerly China Food Services, Corp., incorporated in 1992, conducts its primary business operations as an importer, exporter and distributor of staple, organic, specialty, and gourmet foods and beverages, catering to the Asian Pacific Rim. The Company owns and operates Golden Dragon Food & Beverage Import & Export Company of Hong Kong, Ltd. (GDHK) in central Hong Kong and Beijing Flying Golden Dragon International Trading Co., Ltd. in China (BFGD). Golden Dragon Holdings, Inc. has agreements with the United State food manufacturers. It acts as a buying agent for GDHK, negotiating vendor contracts and services with the United States food and beverage industry partners.

The Company focuses to offer wholesale food distribution to grocery chains and independent food stores throughout China. The Company focuses on purchasing goods directly from manufactures in the United States, Latin America and Europe, and distributes these products to distributors, grocery stores, supermarkets and hypermarkets throughout China.

Advisors' Opinion:
  • [By David Kerr]

    451 Research released a study that contained several key facts concerning cloud computing growth. According to them, 69% of enterprises who have separate budgets for cloud computing are predicting to spend more this year, and in 2014, for this service. They also projected that the worldwide cloud computing market will grow at a 36% compound annual growth rate (CAGR) through 2016. This would make the market reach $19.5 billion by 2016.

  • [By Julie Young]

    In 2013 the Microsoft Business segment generated revenue of $24.7 billion with a three-year compound annual growth rate (CAGR) of 8.7%. Operating income grew steadily ending 2013 at $16.2 billion with a three-year CAGR of 11%. Revenue in the Microsoft Business segment is primarily derived from Office products which generate over 90% of sales for the segment. This segment appears set for continued growth as demand remains high for Office products.

  • [By Damian Illia]

    Expanding its channels, improving sales force effectiveness and strengthening its strategic marketing are strategies being considered to grow in actual markets. With respect to new markets or the ones that are not penetrated so much, ADT plans to invest in growth platforms, with focus on market for small businesses and penetration of residential markets. The company麓s estimations about those markets indicate that was about $13 billion in 2012, and had grown at a compound annual rate (CAGR) of about 1% to 2% over the past five years.

Hot Beverage Stocks To Watch Right Now: Fomento Economico Mexicano SAB de CV (FMX)

Fomento Economico Mexicano, S.A.B. de C.V. (FEMSA), incorporated on May 30, 1936, is a holding company. The Company conducts its operations through principal holding companies, each of which it refers to as a principal sub-holding company. These companies are Coca-Cola FEMSA, S.A.B. de C.V. (Coca-Cola FEMSA), which engages in the production, distribution and marketing of soft drinks, and FEMSA Comercio, S.A. de C.V. (FEMSA Comercio), which operates convenience stores. The Company�� convenience store chain OXXO operated a total of 7,492 stores as of March 31, 2010. Compania Internacional de Bebidas, S.A. de C.V. (CIBSA) owns a 53.7% interest in Coca-Cola FEMSA. On April 30, 2010, FEMSA announced the closing of the transaction, pursuant to which FEMSA agreed to exchange 100% of its beer operations conducted by FEMSA Cerveza for a 20% economic interest in the Heineken Group. In February 2009, Coca-Cola FEMSA acquired with The Coca-Cola Company the Brisa bottled water business in Colombia from Bavaria, a subsidiary of SABMiller. Coca-Cola FEMSA acquired the production assets and the rights to distribute in the territory, and The Coca-Cola Company obtained the Brisa brand.

Coca-Cola FEMSA, S.A.B. de C.V.

Coca-Cola FEMSA is a bottler of Coca-Cola trademark beverages. Coca-Cola FEMSA operates in various territories, including Mexico, a substantial portion of central Mexico (including Mexico City and the states of Michoacan and Guanajuato) and southeast Mexico (including the Gulf region); Central America, including Guatemala (Guatemala City and surrounding areas), Nicaragua (nationwide), Costa Rica (nationwide) and Panama (nationwide); Colombia; Venezuela; Argentina, including Buenos Aires and surrounding areas, and Brazil, including the area of greater Sao Paulo, Campinas, Santos, the state of Mato Grosso do Sul, the state of Minas Gerais and part of the state of Goias.

Coca-Cola FEMSA produces, markets and distributes Coca-Cola trademark beverages, own brands and b! rands licensed from the Company. The Coca-Cola trademark beverages include sparkling beverages (colas and flavored sparkling beverages), water, and still beverages (including juice drinks, ready-to-drink teas and isotonics). Out of the more than 100 brands and line extensions of beverages sold and distributed by Coca-Cola FEMSA, its most important brand, Coca-Cola, together with its line extensions, Coca-Cola light, Coca-Cola Zero and Coca-Cola light caffeine free, accounted for 61.4% of total sales volume during the year ended December 31, 2009. Coca-Cola FEMSA�� next largest brands, Ciel (a water brand from Mexico), Fanta (and its line extensions), Sprite (and its line extensions), ValleFrut and Hit, accounted for 10.5%, 5.8%, 2.6%, 1.5% and 1.3%, respectively, of total sales volume in 2009. Coca-Cola FEMSA uses the term line extensions to refer to the different flavors in which it offers its brands.

Coca-Cola FEMSA produces, markets and distributes Coca-Cola trademark beverages in each of its territories in containers authorized by The Coca-Cola Company, which consist of a variety of returnable and non-returnable presentations in the form of glass bottles, cans and plastic bottles made of polyethylene terephtalate (PET). Coca-Cola FEMSA uses the term presentation to refer to the packaging unit in which it sells its products. Presentation sizes for its Coca-Cola trademark beverages range from a 6.5-ounce personal size to a 3-liter multiple serving size. For all of its products excluding water, Coca-Cola FEMSA considers a multiple serving size as equal toor larger than one liter. In addition, it sells some Coca-Cola trademark beverage syrups in containers designed for soda fountain use, which it refers to as fountain. It also sells bottled water products in bulk sizes, which refers to presentations equal to or larger than five liters, which have a much lower average price per unit case than its other beverage products.

In Mexico, Coca-Cola FEMSA�� product portfolio consis! ts of Coc! a-Cola trademark beverages, and includes Mundet trademark beverages licensed from FEMSA in some Mexican territories. Coca-Cola FEMSA�� product sales in Latincentro consist predominantly of Coca-Cola trademark beverages. Per capita consumption of its sparkling beverages products in Colombia and Central America was 92 and 146 eight-ounce servings, respectively, in 2009. Its product portfolio in Venezuela consists of Coca-Cola trademark beverages. Sparkling beverages per capita consumption of its products in Venezuela was 174 eight-ounce servings during 2009. Coca-Cola FEMSA�� product portfolio in Mercosur consists mainly of Coca-Cola trademark beverages, and the Kaiser beer brand in Brazil, which Coca-Cola FEMSA sells and distributes on behalf of FEMSA Cerveza. Sparkling beverages per capita consumption of its products in Brazil and Argentina was 214 and 359 eight-ounce servings, respectively, in 2009.

The Company competes with Pepsi Beverage Company, Grupo Embotelladores Unidos, S.A.B. de C.V., Grupo Jumex, Groupe Danone, Cadbury Schweppes, Big Cola, Consorcio AGA, S.A. de C.V., Postobon, Florida Ice and Farm Co. S.A., Cerveceria Nacional, S.A., Pepsi-Cola Venezuela, C.A., AmBev and Quilmes Industrial S.A.

FEMSA Comercio, S.A. de C.V.

FEMSA Comercio operates a chain of convenience stores in Mexico, under the trade name OXXO. OXXO stores are concentrated in the northern part of Mexico, but also have a presence in central Mexico and the Gulf coast. FEMSA Comercio is the largest single customer of FEMSA Cerveza and of the Coca-Cola system in Mexico. During 2009, a typical OXXO store carried 1,954 different store keeping units (SKUs) in 31 main product categories.

The Company competes with 7-Eleven, Super Extra, Super City, Circle-K and AM/PM.

Advisors' Opinion:
  • [By Monica Wolfe]

    Fomento Economico Mexicano SAB de CV (FMX)

    As of the close of the third quarter there were ten guru owners of Fomento Economico Mexicano. These gurus held a combined weighting of 1.99%. During the third quarter, there were four gurus making buys and seven making sells of their stake in FMX.

  • [By Dividends4Life]

    Memberships and Peers: KO is a member of the S&P 500, a Dividend Aristocrat, a member of the Broad Dividend Achievers��Index and a Dividend Champion. The company's peer group includes: Dr. Pepper Snapple Group (DPS) with a 3.2% yield, Pepsico Inc (PEP) with a 2.6% yield and Fomento Economico ADR (FMX) with a 1.7% yield.

  • [By Jonas Elmerraji]

    Fomento Economico Mexicano (FMX), better known as FEMSA, isn't another ascending triangle trade this week, unfortunately for shareholders. Instead, FEMSA is currently forming the bearish opposite of the pattern in Wells Fargo and Citi: a descending triangle.

    The descending triangle is formed by downtrending resistance above shares and a horizontal support level to the downside. In this case, that price floor comes in just below $90. The lower highs that form resistance in FMX signal that buying pressure is waning above the $100 level as long-suffering sellers opt to take gains near the high-end of this stock's recent range. Once that glut of demand at $90 gets taken out, a lot more downside looks likely for FMX.

    But now, MTB is forming a rounding bottom, a bullish setup that indicates a gradual shift in control of shares from sellers to buyers. The rounding bottom pattern looks exactly like it sounds, and even though MTB's pattern is actually at the top of its recent range, the trading implications are exactly the same. A breakout above $118 is the signal that the pattern is completed and it's time to be a buyer.

    With high short interest in MTB right now, a short squeeze could add some fuel to the fire on a breakout. Support looks reasonably strong at $110 -- that's the spot to keep your stop.

  • [By Dividends4Life]

    Memberships and Peers: PEP is a member of the S&P 500, a Dividend Aristocrat, a member of the Broad Dividend Achievers��Index and a Dividend Champion. The company's peer group includes: The Coca-Cola Company (KO) with a 2.8% yield, Dr Pepper Snapple Group, Inc. (DPS) with a 3.2% yield and Fomento Econ (FMX) with a 1.7% yield.

Hot Retail Stocks For 2015: Brown-Forman Corp (BFB)

Brown-Forman Corporation, incorporated on October 19, 1933, primarily manufactures, bottles, imports, exports, markets, and sells a variety of alcoholic beverage brands. The Company�� principal brands are Jack Daniel�� Tennessee Whiskey, Jack Daniel�� Tennessee Whiskey, Pepe Lopez Tequilas, Jack Daniel�� Single Barrel, Woodford Reserve Bourbons, Jack Daniel�� Ready-to-Drinks, Canadian Mist Blended Canadian Whiskies, Jack Daniel�� Tennessee Honey, Chambord Liqueur, Jack Daniel�� Winter Jack Chambord Vodka, Gentleman Jack, Collingwood Canadian Whisky, Southern Comfort, Early Times Bourbon, Southern Comfort Ready-to-Drinks, Early Times flavored line extensions, Southern Comfort flavored line extensions, Early Times Kentucky Whisky, Finlandia Vodkas, Korbel California Champagnes, Finlandia Ready-to-Drinks, Little Black Dress Vodkas, Antiguo Tequila, Maximus Vodkas, el Jimador Tequilas, Old Forester Bourbon, el Jimador New Mix Ready-to-Drinks, Sonoma-Cutrer Wines, Herradura Tequilas, and Tuaca Liqueur.

The Company�� products are sold in more than 150 countries around the world. The Company�� international markets include Australia, the United Kingdom, Mexico, Germany, Poland, France, Russia, Japan, Turkey, Canada, Spain, Czech Republic, South Africa, Brazil and Italy.

The Company competes with Bacardi Limited, Beam Inc., Davide Campari-Milano S.p.A., Diageo plc, LVMH Moet Hennessy Louis Vuitton S.A., Pernod Ricard S.A., and Remy Cointreau S.A.

Advisors' Opinion:
  • [By Seth Jayson]

    Brown-Forman (NYSE: BFB  ) reported earnings on June 5. Here are the numbers you need to know.

    The 10-second takeaway
    For the quarter ended April 30 (Q4), Brown-Forman met expectations on revenues and beat expectations on earnings per share.

  • [By Laura Brodbeck]

    Wednesday

    Earnings Expected From: Christopher & Banks Corporation (NYSE: CBK), Brown Forman Corporation (NYSE: BFB), Express, Inc. (NYSE: EXPR), Avago Technologies (NASDAQ: AVGO) Economic Releases Expected: US nonfarm employment change, US trade balance, Canadian trade balance, US new home sales, US ISM non-manufacturing PMI

    Thursday

Hot Beverage Stocks To Watch Right Now: Dr Pepper Snapple Group Inc (DPS)

Dr Pepper Snapple Group, Inc. (DPS), incorporated on October 24, 2007, is an integrated brand owner, manufacturer and distributor of non-alcoholic beverages in the United States, Canada and Mexico with a diverse portfolio of flavored (non-cola) carbonated soft drinks (CSDs) and non-carbonated beverages (NCBs), including ready-to-drink teas, juices, juice drinks and mixers. The Company operates in three segments: Beverage Concentrates, Packaged Beverages and Latin America Beverages. The Company primarily serves two groups of customers: bottlers and distributors and retailers. As of December 31, 2011, it operated 20 manufacturing facilities across the United States and Mexico, excluding its manufacturing facility for its joint venture with Acqua Minerale San Benedetto. Effective March 1, 2013, it acquired Dr. Pepper/7-UP Bottling Co of the West, a producer and wholesaler of bottled soft drinks.

Beverage Concentrates

The Company�� Beverage Concentrates segment is principally a brand ownership business. In this segment the Company manufactures and sells beverage concentrates in the United States and Canada. Most of the brands in this segment are CSD brands. Its brand portfolio includes CSD brands, such as Dr Pepper, Sunkist soda, 7UP, A&W, Canada Dry, Crush, Squirt, Penafiel and Schweppes. Beverage concentrates are shipped to third party bottlers, as well as to its own manufacturing systems, who combine them with carbonation, water, sweeteners and other ingredients, package it in PET containers, glass bottles and aluminum cans, and sell it as a finished beverage to retailers. Beverage concentrates are also manufactured into syrup, which is shipped to fountain customers, such as fast food restaurants, who mix the syrup with water and carbonation to create a finished beverage at the point of sale to consumers. Its Beverage Concentrates brands are sold by its bottlers, including its own Packaged Beverages segment, through all retail channels, including supermarkets, fountains, mas! s merchandisers, club stores, vending machines, convenience stores, gas stations, small groceries, drug chains and dollar stores.

Packaged Beverages

The Company�� Packaged Beverages segment is principally a brand ownership, manufacturing and distribution business. In this segment, it primarily manufacture and distribute packaged beverages and other products, including its brands, third party owned brands and certain private label beverages, in the United States and Canada. Key NCB brands in this segment include Hawaiian Punch, Snapple, Mott's, Yoo-Hoo, Clamato, Deja Blue, AriZona, FIJI, Mistic, Nantucket Nectars, ReaLemon, Mr and Mrs T, Rose's and Country Time. Key CSD brands in this segment include 7UP, Dr Pepper, A&W, Sunkist soda, Canada Dry, Squirt, RC Cola, Big Red, Sun Drop, Diet Rite, IBC and Vernors. Approximately 87% of its 2011 Packaged Beverages net sales of branded products come from its own brands, with the remaining from the distribution of third party brands, such as Big Red, AriZona tea, FIJI mineral water, Neuro beverages, Vita Coco coconut water and Hydrive energy drinks. A portion of its sales also comes from bottling beverages and other products for private label owners or others, which is also referred to as contract manufacturing. Its Packaged Beverages��products are manufactured in multiple facilities across the United States and are sold or distributed to retailers and their warehouses by itsown distribution network or by third party distributors. The Company sells its Packaged Beverages��products both through its Direct Store Delivery system (DSD), supported by a fleet of approximately 6,000 vehicles and 12,000 employees, including sales representatives, merchandisers, drivers and warehouse workers, as well as through its Warehouse Direct delivery system (WD), both of which include the sales to retail channels, including supermarkets, fountain channel, mass merchandisers, club stores, vending machines, convenience stores, gas stations, small groce! ries, dru! g chains and dollar stores.

Latin America Beverages

The Company�� Latin America Beverages segment is a brand ownership, manufacturing and distribution business. This segment participates mainly in the carbonated mineral water, flavored CSD, bottled water and vegetable juice categories, with particular strength in carbonated mineral water, vegetable juice categories and grapefruit flavored CSDs. Its brands include Squirt, Penafiel, Aguafiel, Crush and Clamato.

In Mexico, it manufactures and distributes its products through its bottling operations and third party bottlers and distributors. In the Caribbean, it distributes its products through third party bottlers and distributors. In Mexico, it also participate in a joint venture to manufacture Aguafiel brand water with Acqua Minerale San Benedetto. The Company sells its finished beverages through Mexican retail channels, including mom and pop stores, supermarkets, hypermarkets, and on premise channels.

The Company competes with The Coca-Cola Company (Coca-Cola), PepsiCo, Inc. (PepsiCo), Nestle, S.A. (Nestle), Kraft Foods Inc. (Kraft) and The Cott Corporation (Cott).

Advisors' Opinion:
  • [By Achilles Research]

    In terms of market valuation, the beverage sector really is not that cheap. Considering that Pepsico trades at 16x forward FCFE and Coca-Cola at 17x, it should not be surprising that the individual P/E ratios are equally high: Pepsico trades at the largest peer group P/E of 16.88, while Coca-Cola trades at 16.43. Dr. Pepper Snapple (DPS) is the cheapest of the industry, at 13.26 times forward earnings. All companies are great companies with top-notch product portfolios, but trade at premium valuations. Investors pay a hefty markup, which restricts equity valuation growth from the outset and makes multiple expansion unlikely.

  • [By Eileen Rojas]

    Changing consumer habits are influenced by other beverage options
    Dwindling diet soda sales are bad news for PepsiCo (NYSE: PEP  ) and its competitors Coca-Cola� (NYSE: KO  ) and Dr. Pepper Snapple Group (NYSE: DPS  ) , which derive a quarter or more of their U.S. sales from soft drinks. In the third-quarter earnings call, PepsiCo chairman Indra Nooyi noted that "a fundamental shift in consumer habits and behaviors" is taking place within the beverage segment. In addition to the artificial sweetener issue, more beverage options have become available and this has played a major part in the loss of consumer interest in diet sodas.

  • [By Patricio Kehoe]

    The first on the list is The Coca-Cola Company (KO), in which Citadel disclosed a $267 million stake with over 6.46 million shares. The Coca-Cola Company is the best global brand (in terms of brand equity) and the world麓s largest producer of soft drinks. The company sells products in more than 200 countries and owns or licenses more than 500 brands. It operates in a highly competitive industry with PepsiCo (PEP), Nestle (NSRGY), Groupe Danone (GPDNF), Kraft Foods (KRFT) and Dr. Pepper Snapple Group (DPS). Due to this, the firm's strategy is to use its brands and financial strength to achieve long-term growth. Additionally, it has created an extensive and well-organized global distribution system, which cannot be replicated by any of its competitors at least at a reasonable cost. It has a proven commitment to returning cash to investors, with a current dividend yield of 2.94% which is considered quite good to protect investors' purchasing power.

Hot Beverage Stocks To Watch Right Now: Montalvo Spirits Inc (TQLA)

Montalvo Spirits Inc., incorporated on November 18, 2010, is a development-stage company. The Company develops, markets and distributes alcoholic beverages with initial offering being the Montalvo Tequila, primarily in the United States. The Company sells its products through a network of spirits distributors, who are licensed to distribute alcoholic beverages throughout the United States. The Company intends to focus on growing the market share of its initial products, the ultra-premium Montalvo line of tequilas, whose expressions include Plata, Reposado, Anejo and Extra-Anejo. The Company owns the Montalvo brand trademark and have exclusive worldwide master distribution rights to the brands.

The Company�� portfolio of alcoholic beverage brands includes additional spirits categories, as well as beer and wine, through additional importation and distribution contracts of existing brands. In addition, the Company may choose to develop new brands or acquire existing companies with their own brand portfolios. The Company�� subsidiary, Casa Montalvo, has an exclusive worldwide distribution agreement with Destilidora Huerta Real, S.A. de C.V., the producers of Montalvo Tequila. Montalvo, an ultra-premium tequila brand, is a handcrafted, formulated tequila produced from blue agave plants from the Lowlands of Jalisco, Mexico. Montalvo is available in four expressions: Plata, Reposado, Anejo and Extra-Anejo.

The Company competes with Diageo PLC, Pernod Ricard S.A., Bacardi Limited, Brown-Forman Corporation, Beam Inc., Remy Cointreau S.A. and Constellation Brands, Inc.

Advisors' Opinion:
  • [By CRWE]

    Today, TQLA surged (+10.80%) up +0.042 at $.431 with 1,344,844 shares in play thus far (ref. google finance Delayed: 1:09PM EDT� September 24, 2013).

    Montalvo Spirits, Inc. previously reported they have entered into a sales and marketing agreement with Prestige International Exports, LLC (“Prestige”). Prestige will represent the Montalvo Spirits portfolio brands in certain international markets, as well as provide sales and marketing support for Montalvo Tequila and Broken Heart Gin throughout the state of California, and will assist the Company in attempting to secure distribution in additional markets in the U.S.

Hot Beverage Stocks To Watch Right Now: Monster Beverage Corp (MNST)

Monster Beverage Corporation, formerly Hansen Natural Corporation, incorporated on April 25, 1990,is a holding company. The Company develops, markets, sells and distributes alternative beverage. The alternative beverage category combines non-carbonated ready-to-drink iced teas, lemonades, juice cocktails, single-serve juices and fruit beverages, ready-to-drink dairy and coffee drinks, energy drinks, sports drinks, and single-serve still water (flavored, unflavored and enhanced) with new age beverages, including sodas that are considered natural, sparkling juices and flavored sparkling beverages. It has two reportable segments, namely Direct Store Delivery (DSD), whose principal products comprise energy drinks, and Warehouse (Warehouse), whose principal products comprise juice-based and soda beverages. The DSD segment develops, markets and sells products primarily through an exclusive distributor network, whereas the Warehouse segment develops, markets and sells products primarily directly to retailers. Corporate and unallocated amounts that do not relate to the DSD or Warehouse segments specifically, have been allocated to Corporate and Unallocated.

During the year ended December 31, 2012, it continued to expand its existing product lines and flavors and further develop its distribution markets. In particular, it continued to focus on developing and marketing beverages that fall within the category generally described as the alternative beverage category. During the year ended December 31, 2012, it introduced a number of new products, including Monster Rehab Tea + Orangeade + Energy, a non-carbonated energy drink with electrolytes, Monster Energy Zero Ultra, a carbonated energy drink which contains zero calories and zero sugar, bermonster Energy Brew, a non-alcoholic energy drink, manufactured using a brewed fermentation process, Hansen�� Coconut Water, in original and tropical flavors, packaged in re-sealable Tetra Prisma boxes, Peace Tea Cranberry, Pink Lemonade and Texas-Style Sweet ! Tea, ready-to-drink iced teas, Monster Cuba-Lima, a carbonated lime flavored non-alcoholic energy drink, Monster Energy Dub Edition Baller�� Blend, a carbonated punch + energy drink and Monster Energy Dub Edition Mad Dog, a carbonated punch + energy drink.

DSD Segment

Monster Energy Drinks offers products under the Monster Energy drink product line: Monster Energy, Lo-Carb Monster Energy, Monster Energy Assault, Monster Khaos, Monster M-80 (named Ripper in certain countries), Monster MIXXD, Monster Energy Absolutely Zero, Monster Energy Import and Import Light, Monster Energy Dub Edition Baller�� Blend, Monster Energy Dub Edition Mad Dog, M3 Monster Energy Super Concentrate energy drinks, bermonster Energy Brew, Monster Energy Zero Ultra and Monster Cuba-Lima.

Java Monster Coffee + Energy Drinks - A line of non-carbonated dairy based coffee + energy drinks. It offers products under the Java Monster product line: Java Monster Kona Blend, Java Monster Loca Moca, Java Monster Mean Bean, Java Monster Vanilla Light, Java Monster Irish Blend and Java Monster Toffee. Monster Energy Extra Strength Nitrous Technology Energy Drinks - A line of carbonated energy drinks containing nitrous oxide. It offer products under the Monster Energy Extra Strength Nitrous Technology product line: Super Dry, Anti Gravity and Black Ice.

-Presso Monster Coffee + Energy Drinks - A line of non-carbonated dairy based coffee + energy drinks. It offers products under the X-Presso Monster coffee + energy drinks product line: X-Presso Monster Hammer and X-Presso Monster Midnite.

Monster Rehab Tea + Energy Drinks - A line of non-carbonated energy drinks with electrolytes. It offers products under the Monster Rehab drink line: Monster Rehab Tea + Lemonade + Energy, Monster Rehab Rojo Tea + Energy, Monster Rehab Green Tea + Energy, Monster Rehab Protean + Energy and Monster Rehab Tea + Orangeade + Energy.

Worx Energy Energy Shots - A line of energy suppleme! nts which! contains zero calories and zero sugar. It offers products under the Worx Energy energy shot product line: Original Formula and Extra Strength.

Peace Tea Iced Teas - A line of ready-to-drink iced teas. It offers products under the Peace Tea product line: green tea, imported Ceylon tea, sweet lemon tea, razzleberry tea, cranberry tea, pink lemonade tea, Texas-style sweet tea and Caddy Shack tea + lemonade.

Warehouse Segment

Hansen�� brand sodas have been a natural soda brand on the West Coast of the United States for more than 30 years and are made with natural flavors. Hansen�� brand sodas, sweetened with cane sugar, and Hansen�� Diet Sodas, sweetened with Splenda no calorie sweetener and Acesulfame-K, contain no preservatives, sodium, caffeine or artificial colorings. It offers sodas under the Hansen�� brand name: Hansen�� Sodas, Hansen�� Diet Sodas and Hansen�� Natural Mixers, as well as Hansen�� Sparkling Waters, in a variety of flavors.

Its Blue Sky products contain no preservatives, artificial sweeteners, caffeine (other than its Blue Sky energy drinks) or artificial coloring and are made with sugar and natural flavors. It offers products under the Blue Sky product line: Blue Sky Natural Soda, Blue Sky Zero Calorie Sodas (sweetened with Truvia brand stevia extract, an all natural sweetener), Blue Sky Premium Sodas, Blue Sky Organic Natural Sodas, Blue Sky Seltzer Waters, Blue Sky Blue Energy drinks, Blue Sky Zero Calorie Blue Energy drinks, Blue Sky Caf Energy drinks and Blue Sky Recover Energy drinks.

Its original Hansen�� energy drinks compete in the functional beverage category, namely, beverages that provide a benefit in addition to simply delivering refreshment. It offers products under the Hansen�� energy drink product line: Hansen�� Natural Energy Pro, Hansen�� Energy Diet Red and Hansen�� Natural Stamina Pro.

Its fruit juice product line includes Hansen�� Natural Apple Juice, Ha! nsen�� ! Natural Grape Juice, White Grape Juice, Pineapple Juice, Apple Grape Juice, Apple Strawberry Juice, Orange Juice, Cranberry Juice, Cranberry-Apple Juice, Cranberry-Grape Juice, Ruby Red Grapefruit Juice, and Organic Apple Juice. In March 2012, it added Hansen�� Natural Apple Orange Pineapple Juice which contains 100% juice as well as 120% of the United States Recommended Daily Allowances (the USRDA) for vitamin C. It also offer Hansen�� Natural Lo-Cal juice cocktails, a line of all natural, low-calorie cocktails in four flavors. The Lo-Cal juice cocktails are sweetened with Truvia sweetener. Hansen�� juice products compete in the shelf-stable juice category.

It offers a number of aseptically packed boxed juice products, including its dual-branded multi-vitamin 100% juice line, which itsell in conjunction with Costco Wholesale Corporation (Costco) through Costco stores. It offers its Hansen�� Natural line of multi-vitamin 100% juices to other customers. These multi-vitamin juices contain eleven essential vitamins and six essential minerals and are available in a variety of flavors. In February 2012, it added Hansen�� Natural Organic Apple Juice, a 100% USDA Certified Organic Apple Juice with 100% of the USRDA for vitamin C.

Its Hansen�� Junior Juice product line is a 100% juice line targeted at toddlers and preschoolers. These juices have added calcium and all flavors contain 100% of the daily recommended allowance of vitamin C. It also offers organic juices as well as Hansen�� Organic Junior Water, a lightly flavored reduced calorie beverage, both of which contain 100% of the daily recommended allowance of vitamin C. In addition, it offers Junior Juice Coconut Water Twist, a line of fruit and coconut water juices containing 100% of the daily recommended allowance of vitamin C.

Its Hubert�� Lemonade is a line of premium ready-to-drink lemonades. Hubert�� Lemonade is sweetened with cane sugar and Truvia sweetener. Hubert�� Lemonade i! s all nat! ural and contains no preservatives, artificial sweeteners, caffeine, or artificial colorings. It offers products under the Hubert�� Lemonade product line: Strawberry Lemonade, Limeade, Mango Lemonade, Honey Lemonade, Raspberry Lemonade and Original Lemonade. It added Cherry Limeade and Blackberry Lemonade flavors to the product line in February 2012 and October 2012, respectively. In July 2012, it introduced 4-count multi-packs of select flavors.

Hubert�� Half & Half is sweetened with cane sugar and Truvia sweetener, and contains no preservatives, artificial sweeteners, or artificial colorings. Its Fruit and Tea Stix product line is an all-natural, low-calorie powder drink mix line, sweetened naturally with Truvia sweetener. Its Angeleno Aguas Frescas is a line of premium ready-to-drink aguas frescas. Angeleno Aguas Frescas are sweetened with cane sugar and real fruit juice and contain no preservatives, artificial sweeteners, caffeine, or artificial colorings. It offers flavors under the Angeleno Aguas Frescas product line: Mango, Melon, Pineapple, Jamaica (Hibiscus) and Tamarindo. Its Hansen�� Natural PRE products include a line of prebiotic and probiotic digestive wellness ready-to-drink beverages and powder drink mixes, containing specially formulated blends by Jarrow Formulas. PRE prebiotic ready-to-drink beverages are sweetened with either cane sugar or stevia. PRE probiotic powder drink mixes are sweetened with cane sugar and stevia. In March 2012, it introduced Hansen�� Natural Coconut Water, a line of premium 100% Coconut Waters available in Pure and Tropical flavors.

The Company competes with TCCC, PepsiCo, Inc. (PepsiCo), The Dr. Pepper Snapple Group, Inc. (the DPS Group), Red Bull Gmbh, Kraft Foods, Inc., GlaxoSmithKline plc, Nestle Beverage Company, Tree Top Inc. (Tree Top), Ocean Spray Cranberries Inc. (Ocean Spray), Red Bull, Rockstar, Full Throttle, No Fear, Amp, Adrenaline Rush, NOS, Venom, Redline, 180, Red Devil, Rip It, Xenergy, 5-Hour Energy ! Shots, Mi! O Energy, Stacker 2, VPX Redline Energy Shots, Red Bull, Rockstar, Burn, V-Energy, Lucozade, Adrenaline Rush, Power Play, Mother, Hell, Shock, Tiger, Boost, Gladiator, TNT, Shark, Hot 6, Nalu, Battery, Bullit, Flash Up, Black, Non-Stop, Bomba, Semtex, Starbucks Frappuccino, Starbucks Double Shot, Starbucks Double Shot Energy Plus Coffee , other Starbucks coffee drinks, Rockstar Roasted, Seattle�� Best, illy issimo coffee, Full Throttle Coffee, Arizona, Lipton, Snapple, Nestea, Xing Tea, Honest Tea, Gold Peak Tea, Fuze Tea, the DPS Group, Cott Corporation and National Beverage Corporation, Jones Soda Co., Crystal Geyser, J.M. Smucker Company, Reeds, Inc., Zevia, Tree Top, Mott��, Martinelli��, Welch��, Ocean Spray, Tropicana, Minute Maid, Langers, Apple , Eve, Seneca, Northland, Juicy Juice, Old Orchard, Calypso, Simply Lemonade, Minute Maid, Cabana, Tropicana, Newman�� Own, Vita Coco, ZICO and O.N.E.

Advisors' Opinion:
  • [By Sue Chang , Saumya Vaishampayan]

    Monster Beverage Corp. (MNST) �shares climbed 4.8%. The stock is getting a lift from a report from BMO Capital that suggested strong sales in September, according to Street Insider.

Wednesday, May 14, 2014

EU ruling a stunner to U.S. Internet community

A decision by Europe's high court that individuals can have links to information they wish forgotten removed is sending shock waves through the Internet community.

"The EU wants to unleash what will be the most extensive censorship and information whitewashing push since Orwell's Big Brother," wrote Lauren Weinstein on the Privacy Forum, a privacy discussion list.

The European Court of Justice ruled on Tuesday that a Spaniard named Mario Consteja Gonzalez had the right to request removal of a link to a legal notice about his home's repossession and auction in 1998 from a Google search because it was irrelevant or outdated.

RELATED: New European ruling game-changing for U.S. companies

The ruling enshrines "the right to be forgotten." It applies within the European Union but not outside of it.

Because Google algorithms give greater weight to items that have many links to them, the original notice of the home's repossession on the newspaper's website now pops up on the first page of results in the United States. Some news sites even use a screen grab of the notice as the illustration for their stories.

The European high court's ruling didn't surprise Peter Swire, a law professor and privacy expert at the Georgia Institute of Technology in Atlanta, Ga.

"For this court, it's not a business practice case, it's a human rights case," he said.

Europe treats privacy, "as a fundamental human right," Swire said.

The judges ruled that Gonzalez' privacy rights were more important than "the interest of the general public in having access to that information."

That's in line with a European concept of "practical obscurity," said Swire.

The court didn't rule that the newspaper that originally published the information, La Vanguardia in Barcelona, had to remove it. Instead, it required that Google remove links to the auction notice from its search engine results.

The court drew a distinction between copies of newspapers sitting bound in a library in! Spain and a search engine that turns up the information about the house's auction and makes it available to anyone immediately.

"On a practical level, people used to have privacy through obscurity," but search engines have taken that way, said Swire. With this ruling "the court is returning things closer to the old status quo."

He notes that the entire concept of what's public and what's private is different in Europe.

"Many things that are public records in the United States are considered confidential in the European Union. For instance, in many European countries it's very hard to find out who owns a piece of land, whereas here it's a matter of public record," Swire said.

American privacy experts aren't sure how such a rule would be implemented. A company would have to have a way of confirming that the person making the request to have a link removed was indeed a citizen of the European Union and that the information was about them.

In the United States, the closest kin would be the Digital Millennium Copyright Act, which allows copyright holders to demand material be removed from sites where it was posted without permission.

"We're very acutely aware of the potential for abuse," said Danny O'Brien, international director for the Electronic Frontier Foundation, a internet policy organization based in San Francisco.

He ticked off possible examples. People wanting to take down content that isn't about themselves. People wanting to take down content that a court determines is newsworthy. People wanting to improve their business' results on Google by having all evidence that another person is selling a given item taken down.

The removals won't necessarily be invisible. When items are removed for copyright, Google often notes that "items have been removed from this search," with a link to a site called the Chilling Effects Clearinghouse, which lists the original request that the material be removed.

O'Brien imagines a similar site might be built for E! urope. Th! at way, people inside Europe would know when something had been taken down.

Many suggest that Wikipedia might especially be targeted by those wishing to have their past activities forgotten.

"It does put Wikipedia in the cross hairs, because that's pretty much what it does," said O'Brien.

Wikipedia co-founder Jimmy Wales told the BBC he couldn't imagine the ruling will stand for long.

On Twitter, he said, "I'm sure you agree that it shouldn't be illegal to write about something based on how long ago it happened."

Tuesday, May 13, 2014

The Best Way To Profit From The Commodity Bust

What happens to a forest after a forest fire?

More often than not, it grows back even healthier than before. Trees damaged in a fire typically die within two years, and dead vegetation falls to the ground. The remaining snags provide a habitat for wildlife and eventually fall to the forest floor, becoming a long-term source of nutrients. It's a process of creative destruction.

Financial markets can behave the same way. They can crash and burn, clearing out irrational excess in order to build a foundation of sustainable growth. Two prime examples: the tech bubble of the late 1990s and the so-called commodities supercycle.

"Technology is here to stay."

This is one of the most ridiculous statements I've heard uttered by investors as they bid up the likes of Pets.com and CMGI to ridiculous, stratospheric prices. Along the way, the stocks of many great long-term companies were lifted as well. One of my favorite "Forever Stocks," chip-making giant Intel (Nasdaq: INTC), has been punished for over a decade, thanks to guilt by association.

But what happened after the crash is that investors are able to buy shares of a great company that consistently makes money and rewards its shareholders with a rising dividend. Best of all, the shares can be purchased at a 36% discount to the price-to-earnings (P/E) ratio of the S&P 500 index.

After The Fire
The overhyped commodities supercycle has experienced a similar rise and fall. The rise was twofold. First, as emerging markets became more developed economically and their citizens became more affluent, they ate more. Food producers needed to produce more and in the meantime, commodity prices on the in demand agricultural products went up. This nearly decade-long chart tells the story.

 

The second cause of rising commodity prices was fueled by the decade-long bear market in equities. Investors needed to go somewhere. The commodity train was leaving the station, and they hopped on. Then the train wrecked, as it always does during any type of investment mania or bubble, and like the tech bubble, many high-quality companies were swept up by the rising tide and mercilessly pummeled.

I've found two ideas that spell profit for investors. Best of all, these companies manufacture an essential component to agricultural production: fertilizer. You really can't farm without it. It doesn't matter whether commodity prices are in the clouds or the toilet. People have to eat, farms have to grow food, and fertilizer is needed, regardless.

The 900-Pound Gorilla
Potash Corp. of Saskatchewan (NYSE: POT) is the world's biggest diversified fertilizer company and one of the world's largest producers of potash. Estimates peg the company's contribution right at 20% of global capacity of potash production. 

During the decade long commodities supercycle party, Potash Saskatchewan definitely made hay while the sun was shining. From 2004 to 2012, earnings per share grew at a compound annual rate of 30% while the dividend grew 24%.

Based on how well the company took advantage of the macro trend, it's no wonder investors bid the share price up to lofty heights. But that was then.

With the realization that rapid growth in emerging markets would eventually slow, the financial markets took their toll. The stock is 60% off of its pre-financial crisis highs and over 30% off of its 52-week high. But there's another issue compounding the problem.

Recently, the largest Russian potash producer, OAO Uralkali, said it would begin selling its own potash rather than using a marketing group model as it had in the past. The company also said that it would focus on volume over price. This announcement has caused massive confusion in the potash market and pummeled the stock prices of potash producers. So, if prices are going down and competition is heating up, should you own shares of Potash Saskatchewan? Yes.

Aside from the two major influences on the potash industry, Potash Saskatchewan is an incredibly well-run company. Shares trade at around $29.50 with a forward P/E ratio of 11.9 and an attractive dividend yield of 4.7%. The financials are impressive, too. The long-term debt-to-capitalization ratio sits at an extremely comfortable 25%, and return on equity (ROE) is a strong 23%.

The company still sees growth despite the tough environment projecting global potash shipments to rise 7.8% to 55 million tons from last year. It's obvious that Potash Saskatchewan prepared for the famine during the feast.

Diamond In A Garbage Can?
While Potash is a prime example of a large market leader trading at a deep discount in a tough environment, Intrepid Potash (NYSE: IPI) is a smaller player hurt by macro factors and limited options. But that's not always a bad thing for smart investors.

It's obvious that Intrepid caught just the tail end of the commodities supercycle. 

Formed in 2000, the company was put together as roll-up to consolidate smaller potash producers in the U.S. Over the past eight years, its output has supplied 1.6% of annual global potassium consumption -- not too impressive compared with Potash Saskatchewan 's 9.3% global share. However, Intrepid supplies 9.3% of annual U.S. consumption -- not bad for a 13-year-old company with just under $1 billion in market capitalization.

Whereas Potash Saskatchewan is a whale with a diversified business, Intrepid is a smaller catch that offers value and opportunity. While a young company, Intrepid has no long-term debt. Shares trade at around $12.30, and there's no dividend. Not too exciting. But the stock also trades right at its tangible book value (the value of all of the company's physical assets). In 2012, earnings per share were $1.16 while projections for this year call for 56 cents a share. That's a significant slowdown but still earnings-positive.

Intrepid looks like a classic takeover candidate, with halfway decent financials and worthwhile market share in its particular sector. Disruption in a sector usually results in at least some consolidation. Being a smaller player, Intrepid would be a target. A bigger operator could gain significant U.S. market share for just a modest premium, 20% to 30%. But what seems like a modest premium could be highly lucrative to investors at the stock's current level.

Risks to consider: As discussed earlier, the resulting bear market in stocks after a sector bubble bursts could last awhile and usually, they last longer than an average investor thinks it will. Stock selection and mental preparedness is essential. Potash Saskatchewan is the Coca-Cola (NYSE: KO) of the fertilizer business. Its substantial dividend yield, strong market position and reasonable valuation provide the necessary ballast. Intrepid Potash's upside as a consolidation candidate offsets the risk somewhat, but you shouldn't own a stock based on takeover speculation without an exit strategy should the acquisition fail to materialize.

Action to Take --> The potash industry may be in disarray due to pricing pressure, so this might be the best time to buy the stocks of those companies. Potash Saskatchewan 's position as the market leader and strong operating history make it a natural choice. With market stabilization and consistent execution, shares of Potash Saskatchewan should have a 12-month price target of $38. That would mean that the P/E would only have to rise to 15 or so. Factoring in the 4.75% dividend yield, the result would be a total return of 36%. As an ideal acquisition target, shares of Intrepid Potash offer value at their tangible book value: considering a 25% premium, a reasonable takeout price of $15. 

P.S. -- Stocks like Potash Saskatchewan are similar to a special group of securities we call "Forever Stocks." These are stocks solid enough stocks to buy, forget about and hold -- "Forever." To learn more about these stocks -- including some of their names and ticker symbols -- click here.