Top Stocks For 2014, Best Stocks To Buy 2014: May 2013

5/31/2013

Is Walgreen's Stock Still Worth Owning?

Walgreen (NYSE: WAG ) is a selection for the real-money Inflation-Protected Income Growth portfolio. Like any investment, it needs to be reviewed from time to time to see if it's still worth owning. In the brief video below, portfolio manager Chuck Saletta reviews its valuation, balance sheet, and dividends, and decides whether to hold on to the stock or let it go.

To follow the iPIG portfolio as buy and sell decisions are made, watch Chuck's article feed by clicking here. To join The Motley Fool's free discussion board dedicated to the iPIG portfolio, simply click here.

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

Will Google Fiber Kill Cable?

While Google's (NASDAQ: GOOG ) solution to cable has been a huge success in the limited markets in which it has been introduced, questions remain as to whether it can compete with the major cable companies like Comcast (NASDAQ: CMCSA ) and Time Warner (NYSE: TWX ) . Where Google Fiber may represent what cable should be, there is a significant barrier that may prevent it from breaking through and becoming dominant.

In the video below, Fool.com contributor Doug Ehrman discusses two major reasons why Google Fiber should kill cable and one vital reason why this may never come to pass.

Ina addition to its role in content delivery, Google has made a habit of driving strong returns for its shareholders. However, like many other web companies, it's also struggling to adapt to an increasingly mobile world. Despite gaining an enviable lead with its Android operating system, the market isn't sold. That's why it's more important than ever to understand each piece of Google's sprawling empire. In The Motley Fool's new premium research report on Google, we break down the risks and potential rewards for Google investors. Simply click here now to unlock your copy of this invaluable resource.

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More Expert Advice from The Motley Fool

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

"Where Are the Customers' Yachts?" 2013 Edition

In 1940, Fred Schwed wrote Where Are the Customers' Yachts?, a brilliant (and hilarious) assessment of Wall Street's ability to take care of themselves at the expense of their customers. One book reviewer summed it up perfectly: "The investor's need to believe somebody is matched by the financial advisor's need to make a nice living. If one of them has to be disappointed, it's bound to be the former."

Seventy years later, the book is as relevant as ever. In a new paper, Princeton economist Burton Malkiel shows us how.

"In 1970, there were 358 equity mutual funds," Malkiel writes. "Of the original group, 92 funds have survived."

How'd they do against the S&P 500 (SNPINDEX: ^GSPC ) benchmark? I've recreated Malkiel's findings, which comares the funds' annual returns to the index:

Of the 358 equity funds in 1970, 36 (1%) survived and outperformed the S&P 500 through 2012. That's probably close to what you'd expect to happen by random chance.

What about the rest of the funds? Malkiel writes:

We can be confident that the 266 funds that did not survive had poorer records than did the surviving funds! Funds with especially poor records in a mutual fund complex are often merged into other funds with better past records.

This might be unfair to individual fund managers. Forty-three years is a long enough period that each fund likely cycled through several, maybe even dozens, of managers. Peter Lynch, for example, was an excellent fund manager, but his performance won't show up in this chart because his fund -- Fidelity's Magellan -- was subsequently run by other, less talented managers.

But the fact remains: The huge majority of professionally managed funds will bow down to a brainless index fund over time. And it's only getting worse. So few professional funds existed in 1970 that most could, in theory, outperform the market. Today the industry is so large that it's a mathematical impossibility -- most funds can't beat the market because they effectively are the market.

But what really shocked me about Malkiel's data is that dozens of funds have underperform their benchmark for 43 years, and they are still in business.

Who is investing in these funds? Many people, with lots of money, I'm afraid. Where are the customers' yachts, indeed.

The Opportunity at Kinder Morgan Today

Kinder Morgan (NYSE: KMI ) is the third-largest energy company in the U.S. by enterprise value. But make no mistake, this company is far from a lurching, unwieldy conglomerate. Kinder Morgan and its master limited partnerships, Kinder Morgan Energy Partners (NYSE: KMP ) and El Paso Pipeline Partners (NYSE: EPB ) , form a nimble and diverse partnership, able to weather the effect of whatever the energy world throws at it. In this video, Fool.com contributor Aimee Duffy examines the opportunity at Kinder Morgan, and offers up examples of how the partnership is able to mitigate tough times and succeed when others fail.

It's easy to forget the necessity of midstream operators that seamlessly transport oil and gas throughout the United States. Kinder Morgan is one of these operators, and one that investors should commit to memory due to its sheer size, not to mention its enormous potential for profits. In The Motley Fool's premium research report on Kinder Morgan, we break down the company's growing opportunity – as well as the risks to watch out for – in order to uncover whether it's a buy or a sell. To determine whether this dividend giant is right for your portfolio, simply click here now to claim your copy of this invaluable investor's resource.

European Stocks Drop to Three-Week Low, Trimming May Gain

European stocks fell to a three-week low, paring a 12th straight month of gains, as investors awaited reports on American consumer confidence and business activity. U.S. index futures and Asian shares retreated.

Roche Holding AG slipped 1.4 percent, leading health-care shares lower, after its flu drug failed to show additional benefits when given in a larger dose. Salzgitter AG dropped 2.8 percent as Nomura Holdings Inc. downgraded the shares. PostNL NV climbed 8.6 percent after raising its profit forecast.

The Stoxx 600 slid 0.9 percent to 300.83 at 9:37 a.m. in London, the lowest level since May 6. The benchmark gauge is heading for a decline of 0.8 percent this week as investors weighed the likelihood of a paring in Federal Reserve monetary stimulus. It has still advanced 1.4 percent in May for longest streak of monthly gains since July 1997.

"It's the end of the month, so we are seeing huge bouts of volatility ahead of key U.S. economic data this afternoon," Ishaq Siddiqi, a market strategist at ETX Capital in London, wrote in e-mailed comments. "Appetite to book profits is running high before the month of June starts, as stock indices have performed respectably again in May."

Standard & Poor's 500 Index futures retreated 0.5 percent today, and the MSCI Asia Pacific Index fell 0.3 percent.

U.S. Economy

The Thomson Reuters/University of Michigan final index of U.S. consumer sentiment climbed in May to 83.7, the highest level since July 2007, according to the median projection of economists in a Bloomberg survey. That matches this month's preliminary reading and follows 76.4 in April. The report is due at 9:55 a.m. New York time.

A separate release at 9:45 a.m. New York time may show business activity in the U.S. stagnated in May. The MNI Chicago Report's business barometer rose to 50 in May, from 49 the previous month, economists forecast in a Bloomberg survey. A reading of 50 is the dividing line between expansion and contraction.

In China, a report tomorrow may show manufacturing stagnated in May. A Purchasing Managers' Index (CPMINDX) compiled by the National Bureau of Statistics and China Federation of Logistics and Purchasing fell to 50 from 50.6 in April, according to the median forecast of 30 economists in a Bloomberg survey.

"Chatter in the market that China's PMIs for May will come in weaker than expected tomorrow also weighs on European share markets this morning," Siddiqi, wrote. "Slowing growth in China will add to the gloom about stalling global growth."

5/30/2013

O Canada! U.S. Oil Gushes; Refiners Want Canadian

Bentek Energy's annual Benposium is the most data-rich energy conference there is. This year drew an edge-of-their-seats crowd after a year ago, during which the oil world turned on a drillbit.

At the conference, Bentek's senior energy analyst, Chris Micsak, shared with the Fool's Tom Jacobs a wrinkle in the North American crude oil gusher. The oil companies with investments already in the Bakken, Permian Basin, and Eagle Ford -- the world-class plays that keep on giving -- can make money as low as $45 to $50 barrel. That's half of today's prices and serious ka-ching. So the light, sweet crude we're swimming in may be moving the U.S. toward oil independence in that grade within five years.

But it's not the whole story. The catch is that Gulf Coast refiners have retrofitted for where their money is: making diesel and jet fuel from heavy crude. Yes, we get that from Saudi Arabia, but our friends to the north have a lot to offer us and at lower cost. Four stocks are the leaders in Canada's oil sands. Find out what they are by watching the following video.

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

Elan Says Bid Undervalues It by as Much as $8.30 a Share

After consulting with outside financial advisors, in conjunction with the Elan (NYSE: ELN ) board of directors and executive management team, the Ireland-based biotechnology company has determined the recent $12.50-a-share buyout offer from Royalty Pharma undervalues select Elan assets by as much as $4.3 billion, the company announced Wednesday.

According to Elan, its multiple sclerosis treatment Tysabri has an underlying value of approximately $11.85 a share, and possibly as much as $17.15 a share, based on Berenberg Bank estimates of global Tysabri sales. Tysabri values do not take into account operating expenses, and include sales estimates through 2016.

In addition to the Tysabri value calculations, Elan's press release suggests the value of its cash position is equal to $3.65 a share based on its pro forma net cash position of approximately $2 billion, as of March 31. The combination of cash per share and its Tysabri asset that the company has put forward values Elan between $15.50 and $20.80 a share.

Royalty Pharma's recent buyout offer is for $12.50 per Elan share.

Elan Chairman Robert Ingram was quoted as saying, "Royalty Pharma's current bid of $12.50 substantially undervalues these assets and tendering shares at this level would be to the direct detriment to our shareholders."

Royalty recently reiterated its suggestion to Elan shareholders to reject several resolutions scheduled for Elan's shareholder meeting on June 17 that could negate Royalty's offer.

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DISH Network Tops Sprint Bid for Clearwire by $1 per Share

In the ongoing bidding war for Clearwire (NASDAQ: CLWR ) , DISH Network (NASDAQ: DISH ) has sent a letter to the Clearwire board with an offer to purchase the wireless firm for $4.40 a share in cash.

The bid from DISH is a 29% premium over an earlier $3.40-a-share bid for the Clearwire shares it doesn't already own from Sprint (NYSE: S ) . With a Clearwire shareholders meeting on the Sprint offer set for tomorrow, DISH Network is making the offer public, "in light of the limited time remaining," the company said in its press release. Reuters is reporting that two sources are saying Clearwire is expected to postpone the vote on the Sprint offer.

Clearwire's largest minority shareholder, Crest Financial, has been campaigning against the Sprint bid, arguing the company should hold out for a higher bid, perhaps from another suitor.

In a letter dated Wednesday to John Stanton, the chairman of Clearwire, DISH Network chairman and co-founder Charlie Ergen said, "We have reviewed your recently amended merger agreement with Sprint Nextel Corporation ... and we continue to believe we can provide a meaningfully superior alternative to your stockholders, so we are presenting a transaction valued at $4.40 per share." The letter from DISH Network also notes its board had approved the offer, and it is "not subject to any financing contingency."

DISH Network's letter detailing its latest acquisition offer follows two recent announcement issued by Clearwire, dated May 28 and May 29, in which Clearwire reiterated earlier recommendations to its shareholders to accept Sprint's most recent bid. Sprint has said its offer of $3.40 a share is its "best and final offer."

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Hot Dow Dividend Companies To Own In Right Now

This morning, the Thomson Reuter/University of Michigan preliminary consumer sentiment report came in much lower than market participants were expecting. The index's reading thus far for April came in at 72.3, which represents the lowest reading over the past nine months. Economists had estimated a reading of 78.5, after the index hit 78.6 in March.�

This news, as well as a report indicating that retail sales also fell last month, sent the markets moving lower today. The S&P 500 was the worst-performing index, as it declined by 0.28%. The Nasdaq�fared slightly better, only losing 0.16% of its value, while the Dow Jones Industrial Average (DJINDICES: ^DJI ) nearly broke even, losing just 0.08 points, or essentially 0.00%.

In addition to stocks moving lower, commodities also fell today. My colleague Travis Hoium touched on�why gold may have dropped today, after the precious metal lost more than 4% this afternoon.

Hot Dow Dividend Companies To Own In Right Now: AmTrust Financial Services Inc (AFSI)

Amtrust Financial Services, Inc., incorporated on November 7, 1990, is a holding company. The Company is a multinational specialty property and casualty insurer focused on generating consistent underwriting profits. The Company operates in four business segments: small commercial business, specialty program and personal lines reinsurance. The Company transacts business through 11 insurance company subsidiaries: Technology Insurance Company, Inc. (TIC), Rochdale Insurance Company (RIC), Wesco Insurance Company (WIC), Associated Industries Insurance Company, Inc. (AIIC), Milwaukee Casualty Insurance Company (MCIC), Security National Insurance Company (SNIC), AmTrust Insurance Company of Kansas, Inc. (AICK) and AmTrust Lloyd�� Insurance Company of Texas (ALIC). In January 2013, the Company acquired First Nonprofit Companies, Inc. In February 2013, the Company's subsidiary acquired Car Care Plan (Holdings) Limited (CCPH) from Ally Insurance Holdings, Inc.

Small Commercial Business

Small Commercial Business segment provides workers��compensation to small businesses that operate in low and medium hazard classes, such as restaurants, retail stores, physicians and other professional offices, and commercial package and other property and casualty insurance products to small businesses. The Company is authorized to write its Small Commercial Business products in all 50 states. The Company distributes its policies through a network of over 8,100 select retail and wholesale agents who are paid commissions based on the annual policy premiums written. Commercial package products provide a range of insurance to small businesses, including commercial property, general liability, inland marine, automobile, workers��compensation, and umbrella coverage.

The Company maintains Small Commercial Business property and casualty claims operations in several of its domestic offices and the commercial package claims operation is separated into four processing units: casualty, propert! y, cost-containment/recovery and a fast-track physical damage unit. As of December 31, 2012, its Small Commercial Business property and casualty claims were approximately 61% automobile and 13% property and inland marine with the remaining 26% involving general liability and umbrella losses.

Specialty Risk and Extended Warranty

The Company��Specialty Risk and Extended Warranty segment provides coverage for consumer and commercial goods and custom designed coverages, such as accidental damage plans and payment protection plans offered in connection with the sale of consumer and commercial goods in the United States and Europe, and certain niche property, casualty and specialty liability risks in the United States and Europe, including general liability, employers��liability and professional and medical liability. specialty risk business primarily covers, such as legal expenses in the event of unsuccessful litigation; property damage for residential properties; home emergency repairs caused by incidents affecting systems, such as plumbing, wiring or central heating; latent defects that materialize on real property after building or completion; payment protection to insureds if they become unable to meet financial obligations under finance contracts; guaranteed asset protection (GAP) to cover the difference between an insurer�� settlement and the asset value in the event of a total loss, and general liability, employers��liability, public liability, negligence of advisors and liability of health care providers and medical facilities.

The Company's extended warranty business covers selected consumer and commercial goods and other risks, including personal computers; consumer electronics, such as televisions and home theater components; consumer appliances, such as refrigerators and washing machines; automobiles (excluding liability coverage); furniture, and heavy equipment. The Company also serve as a third party administrator to provide claims handling and ca! ll center! services to the consumer products and automotive industries in the United States and Canada. It underwrites the specialty risk coverage on a coverage plan-level basis, which involves substantial data collection and actuarial analysis, as well as analysis of applicable laws governing policy coverage language and exclusions.

Specialty Program

The Company�� Specialty Program segment provides workers��compensation, package products, general liability, commercial auto liability, excess and surplus lines programs and other specialty commercial property and casualty insurance to a narrowly defined, homogeneous group of small and middle market companies. The type of risk covered by this segment is similar to the type of risk in Small Commercial Business but also covers, to a small extent, certain higher risk businesses. The coverage is offered through accounts with various agents to multiple insureds. Policyholders in this segment primarily include industries, such as retail, wholesale, service operations, artisan contracting, trucking, light and medium manufacturing, habitational and professional employer organizations. As of December 31, 2012, the Company underwrote 77 programs through 44 independent wholesale and managing general agents. Workers��compensation insurance consists approximately 33% of this business during the year ended December 31, 2012.

Personal Lines Reinsurance

The Company�� Personal Lines Reinsurance Segment has a 20% participation in the Personal Lines Quota Share, by which it receive 10% of the net premiums of the personal lines business. The Personal Lines Quota Share provides that the reinsurers, severally, in accordance with their participation percentages, will receive 50% of the net premium of the GMACI Insurers and assume 50% of the related net losses.

Hot Dow Dividend Companies To Own In Right Now: Oil States International Inc.(OIS)

Oil States International, Inc., through its subsidiaries, provides specialty products and services to the oil and gas drilling and production companies worldwide. It operates in four segments: Accommodations, Offshore Products, Well Site Services, and Tubular Services. The Accommodations segment offers temporary and permanent work force accommodation services for people working in remote locations. The Offshore Products segment designs and manufactures flexible bearings and connector products; sub sea pipeline products; marine winches, mooring systems, and cranes and rig equipment; and conductor casing connections and pipes, as well as provides blowout preventer stack assembly, integration, testing, and repair services; and drilling riser and related repair services. The Well Site Services segment offers a range of products and services that are used to drill for, and establish and maintain the flow of oil and gas from a well throughout its lifecycle. This segment engages in the rental of wireline and coiled tubing pressure control equipment; wellhead isolation equipment; pipe recovery systems; thru-tubing fishing services; hydraulic chokes and manifolds; blow out preventers; well testing and flowback equipment; gravel pack operations on well bores; and surface control equipment and down-hole tools utilized by coiled tubing operators. This segment also provides land drilling services. The Tubular Services segment distributes a range of casing and tubing products; and offers threading, logistical, and inventory management services. The company serves national oil companies, independent oil and gas companies, onshore and offshore drilling companies, and other oilfield service and mining companies. Oil States International, Inc. was founded in 1995 and is based in Houston, Texas.

Top Communications Equipment Companies To Watch In Right Now: Regal Entertainment Group(RGC)

Regal Entertainment Group, through its subsidiaries, operates a theatre circuit in the United States. The company develops, acquires, and operates multi-screen theatres primarily in mid-sized metropolitan markets and suburban growth areas of larger metropolitan markets under the Regal Cinemas, United Artists, and Edwards brand names. As of February 13, 2012, it operated 6,614 screens in 527 theatres in 37 states and the District of Columbia. Regal Entertainment Group was founded in 2002 and is based in Knoxville, Tennessee.

Hot Dow Dividend Companies To Own In Right Now: Century Bancorp Inc.(CNBKA)

Century Bancorp, Inc. operates as the holding company for Century Bank and Trust Company, which provides banking services to commercial enterprises, state and local governments and agencies, nonprofit organizations, and individuals in Massachusetts. The company accepts savings accounts, NOW accounts, demand deposits, time deposits, and money market accounts. Its loan portfolio comprises single and multi-family residential loans, commercial and industrial loans, commercial real estate loans, construction loans, home equity loans, and consumer loans. The company also offers automated lockbox collection, cash management, and account reconciliation services to its corporate and institutional customers, as well as promotes the marketing of these services to the municipal market. In addition, it provides securities brokerage services; and financial services, including transaction processing and short-term financing to municipalities. As of December 31, 2009, Century Bancorp oper ated 22 banking offices in 17 cities and towns in Massachusetts. The company was founded in 1969 and is headquartered in Medford, Massachusetts.

Hot Dow Dividend Companies To Own In Right Now: Tianjin Zhong Xin Pharm Group (T14.SI)

Tianjin Zhong Xin Pharmaceutical Group Corporation Limited, an investment holding company, engages in the production and sale of traditional Chinese medicine, western medicine, and health products. It is involved in the manufacture and sale of western pharmaceutical, Chinese pharmaceutical and biological, biochemical pharmaceutical, and daily use products, as well as in the wholesale and retail sale of medicines, and biochemical pharmaceutical products. The company�s primary products include Suxiao Jiuxin Wan for increasing blood flow in coronary artery, releasing angina pectoris, and treating and preventing the formation of cerebral embolism; Huoxiang Zhengqi Ruan Jiaonang for reliving cold, dissolving damp, and regulating the flow of vital energy and the functions of the stomach and spleen; Zilong Jin Pian to invigorate and nourish the blood, clear away heat and remove toxic substances, and regulate qi and dissipate the blood stasis; Jinqi Jiangtang Pian to clear away h eat; Weichang An Wan; Gliclazide for curing diabetes; Interferon; Te Zi She Fu; and Biqi Jiaonang for nourishing qi and blood, dispelling wind to eliminate dampness, and promoting blood circulation to arrest pain. It also offers logistics, stocks, and equipment installation services. The company is based in Tianjin, the People's Republic of China.

Hot Dow Dividend Companies To Own In Right Now: MER Telemanagement Solutions Ltd.(MTSL)

Mer Telemanagement Solutions Ltd., together with its subsidiaries, designs, develops, markets, and supports a line of telecommunication expense management (TEM), and customer care and billing solutions for business organizations and other enterprises worldwide. Its TEM solutions assist enterprises and organizations in the allocation of costs, budget control, fraud detection, processing of payments, and spending forecasting. The company also offers converged billing solutions, including applications for charging and invoicing customers, interconnect billing, and partner revenue management through pre-pay and post-pay schemes for wireless providers, voice over Internet protocol, Internet protocol television, and content service providers. Its products provide telecommunication and information technology managers with tools to reduce communication costs, recover charges payable by third parties, and to detect and prevent abuse and misuse of telephone networks comprising fault telecommunication usage. The company markets its products through its direct sales force, distributors, and business telephone switching systems manufacturers and vendors. Mer Telemanagement Solutions Ltd. was founded in 1995 and is headquartered in Raanana, Israel.

Top 5 Chemical Stocks To Own For 2014

Chemical giant Dow Chemical (NYSE: DOW ) has joined its peers, DuPont (NYSE: DD ) and Monsanto (NYSE: MON ) in making agricultural hay. With its chemicals businesses attempting to fight through economic quicksand in much of the world, especially Europe, Dow was able to turn out a robust quarter in part because of steadiness in its agricultural sciences segment.

Of course, Dow remains far more tied to its traditional roots than are the other two companies. While Monsanto, which once operated under the slogan "Better Living Through Chemistry," now obtains virtually all its revenues from the production of seeds, pesticides, and related products. DuPont, by comparison, is approaching the point where half its revenues are agriculture-based. At Dow, farm-related products still make up only about 15% of the top line, but the unit is expanding steadily.

Top 5 Chemical Stocks To Own For 2014: PFB Corporation (PFBOF)

PFB Corporation (PFB) is a Canada-based company. The Company, together with its subsidiaries, is engaged in the manufacturing of insulating building products made from expanded polystyrene (EPS) materials and marketing these products in North America. Its main brands include PlastiSpan EPS Product Solutions; Advantage ICFS, Insulspan SIPS, Riverbend Timber Framing and Precision Craft. Expandable polystyrene resin is manufactured at PFB�� polymer plant located in Crossfield, Alberta, for use in downstream EPS manufacturing operations. Plasti-Fab EPS Product Solutions supply the EPS foam core material used to manufacture Insulspan SIPS. Riverbend Timber Framing structures are typically sold with an accompanying Insulspan SIPS enclosure package. Advantage ICF Systems are insulating concrete forming systems that are employed to build insulated foundations and walls from concrete in both residential and commercial markets. On February 1, 2011, the Company acquired Precision Craft Group. Advisors' Opinion:

[By Tom Konrad]
PFB is a leading North American manufacturer of expanded polystyrene (EPS, aka "Styrofoam") building products such as insulated concrete forms and structural insulated panels. The stock trades infrequently, and did not trade at all on December 28th, so I will be using the midpoint of the bid and ask for the purpose of measuring its return over the coming year. At $5.53, PFB pays a 5.75% annual yield.

The stock price has fallen significantly after the planned purchase of NOVA Chemicals' Performance Styrenics business as a move towards vertical integration with the acquisition of the EPS manufacturer. This deal fell though, and many investors sold the stock, driving it down from the mid $7 range to the mid $5 range where it is today. Already a good value, PFB stands to gain from continued recovery in the housing market or any increase in investor recognition. However, since the stock is so illiquid, larger investors will probably want to substitute one of my upcoming alternative picks for PFB, while small investors should limit themselves to good-til-cancelled limit orders to avoid paying over the odds for their shares.

Top 5 Chemical Stocks To Own For 2014: Linde AG (LING.DE)

Linde AG is a German company engaged in the gases and engineering sector. It operates two divisions: Gases and Engineering, as core divisions, as well as Gist. The Gases Division includes Healthcare, producing medical gases; and Tonnage, as its two global business units; as well as the two business areas Merchant and Packaged Gases, offering liquefied and cylinder gases, and Electronics. The Company�� products are used in the energy sector, for steel production, chemical processing, environmental protection and welding, as well as in food processing, glass production and electronics. The Engineering division offers planning, project development and construction of turnkey industrial plants used in fields, such as petrochemical and chemical industries, in refineries and fertilizer plants, to recover air gases, to produce hydrogen and synthesis gases, to treat natural gas, and in the pharmaceutical industry. As of August 13, 2012, the Company acquired Lincare Holdings Inc.

Top 10 Quality Stocks To Watch For 2014: Celanese Corporation (CE)

Celanese Corporation, a technology and specialty materials company, engages in manufacture and sale of value-added chemicals, thermoplastic polymers, and other chemical-based products. It operates through four business segments: Advanced Engineered Materials, Consumer Specialties, Industrial Specialties, and Acetyl Intermediates. The Advanced Engineered Materials segment offers specialty polymers for application in automotive, medical, and electronics products, as well as other consumer and industrial applications. The Consumer Specialties segment provides cellulose acetate flake, film, and tow that are primarily used in filter products applications; Sunett, a sweetener; and food protection ingredients, such as sorbates and sorbic acid for the food, beverage, and pharmaceutical industries. The Industrial Specialties segment produces emulsions and ethylene vinyl acetate (EVA) performance polymers. Its emulsions products are used in applications, such as paints and coatings, adhesives, construction, glass fiber, textiles, and paper; and EVA performance polymers are used in flexible packaging films, lamination film products, hot melt adhesives, medical products, automotive, carpeting and photovoltaic cells. The Acetyl Intermediates segment offers acetyl products, including acetic acid, vinyl acetate monomer, acetic anhydride, and acetate esters for use as starting materials for colorants, paints, adhesives, coatings, and medicines. It also provides organic solvents and intermediates for pharmaceutical, agricultural, and chemical products. The company offers its products directly, as well as through distributors and electronic marketplaces in North America, Europe, Africa, the Asia-Pacific, and South America. Celanese Corporation was founded in 2004 and is headquartered in Dallas, Texas.

Top 5 Chemical Stocks To Own For 2014: Linde AG (LNAGF.PK)

Top 5 Chemical Stocks To Own For 2014: Linde AG (LNAGF)

5/29/2013

Chinese Solar a Long Way From Making a Profit

By some measures, Chinese solar manufacturers are improving. Yesterday, Canadian Solar (NASDAQ: CSIQ ) reported higher-than-expected revenue, a lower loss, and a respectable gross margin of 9.7%. But by others, the market is deteriorating, like Trina Solar's (NYSE: TSL ) first quarter, when net loss more than doubled from a year ago to $63.7 million.

The big questions investors need to ask are: Where are the trends and when might companies be profitable?

The trends aren't good for Chinese solar
Every company in China is a little bit different, but at their core, they make a very similar product and follow very similar trends. So, despite a better quarterly earnings report, Canadian Solar is experiencing a sequential decline in shipments just like Trina Solar. The margin difference you see below comes from Canadian Solar selling 24.5% of its modules into Japan -- where margins are high -- while Trina Solar only sold 9% of modules into Japan and 19% into the low-margin German market.

Q4 2012 Shipments

Q1 2013 Shipments

Q4 2012 Gross Margin

Q1 2013 Gross Margin

Canadian Solar	404 MW	340 MW	5%	9.7%
Trina Solar	415 MW	393 MW	1.9%	1.7%

Source: Company earnings releases.

The largest manufacturer in China, Yingli Green Energy (NYSE: YGE ) , expects similar trends in the first quarter, with shipments falling 6% to 7% and gross margin between 4% and 4.2%. So, every company follows the same general trends on both the top and bottom lines.

In the second quarter, the two companies that have reported earnings are expecting demand to pick up, with Canadian Solar guiding 380 MW to 420 MW of shipments and Trina Solar sees 500 MW to 530 MW.

So, overall the general shipment trend is down across Chinese solar in Q1, but there is an expected boom in the remainder of 2013. Any improvement is projecting, not based on an overarching trend in reported numbers.

Can they ever be profitable?
If we overlay the negative trends above with expected improvement during the rest of the year, we need to ask if these companies can ever be profitable again.

Canadian Solar is carrying $1.7 billion of debt (including notes payable) and Trina Solar had $1.3 billion of debt. To pay for this debt alone, they must make about $60 million annually based on first-quarter interest payments, which are still at extremely low rates. If we annualize interest and operating expenses based on the first quarter and use each company's shipment guidance, we can estimate the needed gross margin per watt of solar.

Canadian Solar

Trina Solar

Annual Operating Expenses	$150 million	$178 million
Annual Interest Expense	$60 million	$60 million
Breakeven Gross Profit	$210 million	$238 million
Shipment Guidance (top end)	1.8 GW	2.1 GW
Gross Profit Needed per Watt	$0.117	$0.113

Based on these numbers and an average sale price of about $0.65 per watt for the industry, these companies would need to make a gross margin of at least 17% just to break even. And this doesn't include taxes or rising interest costs from growing debt loads.

Canadian Solar and Trina Solar are two of the better companies in Chinese solar and it's difficult to see either company generating a profit in the next year based on the numbers above. Until I see reported margins move close to breakeven, Chinese solar is a guessing game of might win and when they'll begin to make money.

A far better bet for investors would be a company who has generated a profit even as the industry has shown major losses. That company is First Solar and if you're looking for continuing updates and guidance on the company whenever news breaks, The Motley Fool has created a brand-new report that details every must-know side of this stock. To get started, simply click here now.

Joseph Stiglitz on Too Many Brilliant Minds Getting Sucked Into Wall Street

Berkshire Hathaway vice chairman Charlie Munger has spoken up several times about the percentage of the country's best and brightest going into finance. Here's a flavor of his recent comments:

Why should we want to encourage our brightest minds to do what amounts to code-breaking and electronic trading? I think the whole system is stark-raving mad. Why should we want 25% of our graduating engineers going into finance? ... I don't see any social contribution.

A big percentage of Cal-Tech grads are going into finance. I regard this as a regretfully bad outcome. They'll make a lot of money by clobbering customers who aren't as smart as them.

Last month I asked Joseph Stiglitz, a Noble Prize-winning economist at Columbia Business School, who isn't shy about his negative options toward Wall Street, what he thought. Here's what he had to say (transcript follows):

Joseph Stiglitz: I think Charlie Munger is absolutely right. Finance is very important. We need people, smart people, to run our financial system, but as a teacher, I've seen over and over, year after year, too large a percentage of our best students went into finance. It wasn't, as we would have said in finance, it wasn't a balanced portfolio. You want some of your talented people to go into teaching, some into research, some into real business, some into finance. And we got a totally distorted economy, and the result of that is not an economy that works as well as if it had been more balanced.

Was "Arrested Development" Worth the Investment?

Netflix (NASDAQ: NFLX ) shares fell more than 6% on Tuesday, which was the first trading day after the extended Memorial Day weekend -- and after Netflix's debut of Arrested Development, Season 4.

Investors are reacting to a mixed bag of Arrested reviews. The cult hit came into the weekend on a full head of buzz, but not everyone loved the return of the Bluth family. This was supposed to be universally loved, top-shelf material. Anything less feels like missing an earnings estimate. That's why Netflix shares are back to prices not seen since, oh, about three weeks ago.

NFLX Chart

NFLX data by YCharts.

But that didn't stop Arrested fans from enjoying the new content in droves.

The launch had "a noticeable effect on network traffic" across networks with Netflix customers, according to network analytics specialist Procera. The show accounted for 2% to 7% of all Netflix traffic this weekend, depending on which network you're looking at. In one extreme case, 36% of the unnamed DSL network's broadband customers came looking for frozen bananas at some point during the weekend.

To put that last number into context, the most active network around the House of Cards launch saw just 11% of its subscribers catching some of that show in the first weekend, again according to Procera. And HoC was declared a universal success.

So is there any money for Netflix in this famous banana stand? It's too early to tell. I suspect we'll get some clues on Thursday, when Chief Content Officer Ted Sarandos is scheduled to speak at analyst firm Nomura's telecom and media conference. He'll have to dodge questions like a Olympic-grade dodgeball pro in order not to spill any beans on Arrested Development's success (or lack thereof).

In the meantime, let's consider what metrics Netflix is likely to care about.

Content by the numbers
A traffic spike in the first week doesn't mean much. This could be an influx of Bluth fans with one-month free trials in tow, primed for conversion into loyal Netflix customers. Or they could be existing Netflix customers shifting their eyeballs from some other piece of content to Arrested Development for a while. So pure traffic figures aren't all that important.

Netflix is built on word-of-mouth marketing and voluntary customer loyalty. CEO Reed Hastings is proud of how easy it is to leave the service, for example -- no two-year contracts here, you're supposed to stick around (or come back after canceling) if you like the service. So content quality matters a lot. Critics and consumers don't always see eye to eye, and even Twitter recaps don't count as a statistical sample of real-world opinions. Procera might be able to follow up with viewership numbers a few weeks or months down the road, and strong figures there would definitely mean something. Otherwise, we'll just have to wait for some bread crumbs from Netflix's management, or significant changes to its subscriber numbers in coming quarters.

And Netflix does aim high with all of its in-house productions. House of Cards and Hemlock Grove are high-quality productions with big names both behind and in front of the camera. Arrested came with a built-in fan base and correspondingly high expectations. The company is likely to bet big on each of its hand-picked projects, which Sarandos recently said might double in 2014 from this year's four original shows -- and perhaps with direct ownership to replace the current licensing model.

That's an important distinction, like the shift from partnerships to full project ownership that made Marvel a powerhouse, and worthy of Walt Disney 's (NYSE: DIS ) attention. The House of Mouse is now reaping the benefits of Marvel's big content bet, as the entire profit streams from megahits like The Avengers and Iron Man 3 now flow into Disney's coffers rather than being shared with distribution partners. Marvel proved that the model works; Netflix is dipping its toes into the production waters to see if the all-in model is right for its online distribution model. This could be yet another game-changer for the red-envelope-slinger.

Sniper vs. shotgun-slinger
Compare and contrast Netflix's big-budget bets with the shotgun approach at Amazon.com (NASDAQ: AMZN ) . The e-tailer giant wants to get into the original content game as well, but it doesn't have the viewer data and the industry contacts that Netflix is basing its choices on, so Amazon launched a plethora of series pilots instead. Only the winners from that batch will see entire seasons produced. Remember that Netflix produces and publishes everything at once, skipping the whole pilot-production game.

Sometimes you get exactly what you pay for. Netflix is arming itself with a plethora of high-quality shows, while Amazon already gave up on some seemingly surefire hit concepts whose pilots didn't get the budgets and attention they deserved.

Did Netflix miss the mark with Arrested Development? Only time will tell. I haven't seen the new content yet, and was never a Bluth fan to begin with, so I'm not exactly the target audience here. Let the binge viewers get their fill, followed by a lemming trail of less fanatical fans. It's the much larger second group that matters, and what they tell their friends about this new Netflix thing.

Can Netflix fend off its burgeoning competition, and will its international growth aspirations really pay off? These are must-know issues for investors, which is why The Motley Fool has released a premium report on Netflix. Inside, you'll learn about the key opportunities and risks facing the company, as well as reasons to buy or sell the stock. The report includes a full year of updates to cover critical new developments, so make sure to click here and claim a copy today.

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More Expert Advice from The Motley Fool

Top Solar Stocks To Buy For 2014

It's been a little over a month since Suntech Power (NYSE: STP ) refused to pay bondholders the money they were owed, which eventually left the company's Chinese operations in insolvency. The company isn't quite bankrupt yet, but all indications are that it's headed that way, because even Chinese banks want to liquidate operations.

Today, LDK Solar (NYSE: LDK ) , which is the second largest maker of solar wafers, said it has "partially defaulted" on $23.8 million in bonds due yesterday. The company negotiated a settlement with holders of $16.6 million of the bond and is "ready and willing" to discuss a settlement with the others. �

Keep this in mind: If LDK doesn't have enough cash to pay $23.8 million in loans, how could it ever repay the $3.1 billion in debt on its balance sheet? It doesn't look good for LDK Solar.

Top Solar Stocks To Buy For 2014: Whirlpool Corporation(WHR)

Whirlpool Corporation engages in the manufacture and marketing of home appliances worldwide. Its principal products include laundry appliances, refrigerators and freezers, cooking appliances, dishwashers, mixers, and other portable household appliances. The company also produces hermetic compressors for refrigeration systems. It markets and distributes its products under various brand names, including Whirlpool, Maytag, KitchenAid, Jenn-Air, Amana, Roper, Estate, Admiral, Gladiator, Inglis, Acros, Supermatic, Consul, Brastemp, Eslab� de Lujo, Bauknecht, Ignis, Laden, Polar, and Privileg in North and Latin America, Europe, the Middle East, Africa, and Asia. Whirlpool Corporation sells its products to retailers, dealers, distributors, builders, and other manufacturers. The company was founded in 1898 and is headquartered in Benton Harbor, Michigan.

Advisors' Opinion:

[By SherryJim]
Whirlpool was downgraded by KeyBanc Capital Markets from a Buy to a Hold on April 18th. KeyBanc said the downgrade was based on valuation over the short term following the recent negative ruling on refrigerators that removes tariffs. KeyBanc also said that Whirlpool's lower estimates are in line with the Street. WHR has a dividend yield of 3.1% and a payout ratio of 40%. The company started paying dividends in 1929 and has increased its dividend for 1 year. It has a 5-year dividend growth rate of 3.2%.

Top Solar Stocks To Buy For 2014: Impact Silver Corp. (IPT.V)

IMPACT Silver Corp. engages in the acquisition, mining, exploration, and development of sliver mineral properties in Mexico and the Dominican Republic. The company produces silver, lead, zinc, and gold from its Royal Mines of Zacualpan Silver Project, which comprises 423 square kilometers and is located 100 kilometers southwest of Mexico City. It also owns 100% interests in the Capire Mine Project consisting of 200 square kilometers located in the Mamatla Mineral District of central Mexico and hosts silver and base metal, as well as volcanogenic massive sulphide base and precious metal deposits; and the Veta Grande Silver Project, which comprises 10 mineral concessions and is located in the Zacatecas Silver District in central Mexico. The company is headquartered in Vancouver, Canada.

Best Medical Stocks To Own For 2014: Berger International Limited (B64.SI)

Berger International Limited, an investment holding company, engages in the manufacture, distribution, and sale of paint and related products primarily in Singapore, Bahrain, the United Arab Emirates, Jamaica, Trinidad, and Barbados. It offers protective coatings for various surfaces and environments, such as petrochemical or gas plants, oil rigs or offshore platforms, and airport hangars or shipping terminals. The company also provides architectural and wood finishes, such as topcoats, undercoats, and ancillaries; paints for interiors and exteriors; water-based and alkyd based products; products for substrates, such as cement, wood, and metal; emulsions and enamels; grass paints, body paints, tennis court paints, road marking paints, and texture finishes; and elastomeric paints. In addition, it offers marine coatings for various types of vessels and crafts, including cargo carriers, crude oil tankers, yachts, ferries, barges, and tugboats. Further, the company is involved in the painting, repainting, and redecoration of buildings; the supply of building materials; and other general contractor works and sales. It primarily serves project consultants, engineering contractors, and other customers. The company was founded in 1760 and is headquartered in Singapore. Berger International Limited is a subsidiary of Asian Paints International Limited.

5/28/2013

Ericsson Partners With T-Mobile for Polish Billing System

In an effort to enable instant changes to mobile broadband offerings, rates, and billing procedures, T-Mobile signed onto to a three-year contract with Ericsson (NASDAQ: ERIC ) to deploy its billing solutions in Poland.

Because of rapid growth in the country, carriers have found it difficult to launch new offerings and services to meet subscriber demands. Ericsson's new service will provide T-Mobile with solutions to match its changing business, technology, and operational demands and also ensure solution management over the entire life of the customer.

Noting the software solutions provider has worked with T-Mobile for 18 years through Polska Telefonia Cyfrowa, T-Mobile's Polish network operator, Ericsson Head of Region Western & Central Europe Anders Runevad said: "T-Mobile`s billing system is at the heart of its relationships with its subscribers and through our capabilities in services and software we will now handle the day-to-day maintenance and development of the system and applications."

Headquartered in Stockholm, Sweden, Ericsson has more than 1,000 billing and revenue management solutions supporting more than 2 billion subscriptions. It generated $33.8 billion in revenue in 2012.

2 Stocks Getting Left Behind Today

Daily Protests Clogging Greek Capital, Police Say

ATHENS, Greece (AP) -- Small protests are blocking streets in central Athens at a rate of twice a day, the government said Tuesday, as it sought support from unions to draw up new guidelines to keep traffic running.

Public Order Minister Nikolaos Dendias said that in 2012 traffic was stopped in Athens by 796 separate demonstrations, each attended by fewer than 200 people.

Dendias met the leader of Greece's largest union, the GSEE, and announced that the government planned to introduce legislation to prevent small public rallies from blocking traffic.

Although major protest rallies are now less frequent than at the start of the financial crisis in late 2009, small demonstrations remain common in a country that lost an average of nearly 700 jobs a day in 2012.

"I fully understand the great difficulties our citizens are enduring. And I respect their right to protest," Dendias said.

"But for every right, there is a limit. People also have the right to travel across the city and to engage in a basic level of economic activity."

Greece's retail sector has been hammered by harsh austerity measures that include widespread pay cuts and tax hikes, as well as the frequent demonstrations that are mostly directed against the government.

A study last year by the National Confederation of Greek Commerce, an association representing small and medium-sized businesses, found that 28 percent of retail stores in central Athens had closed during the crisis.

The country's tourism season is getting under way and the government hopes that strong bookings could help pull the economy out of recession, which is in its sixth consecutive year.

But unions on Tuesday angrily rejected the government's plans to curb demonstrations.

"No one wants to lose a day's pay ... but striking is the worker's last resort," Nikos Kioutsoukis, general secretary of the GSEE said.

"There are no unions that close off the historic center of Athens because it is their hobby."

The Bright Spot in Target's Dark Earnings Report

There wasn't much to like in Target's (NYSE: TGT ) latest earnings results. Profits were down. Sales were lower than expected. And the company even ratcheted back its expectations for the rest of the year.

So, it shouldn't come as a surprise that investors ignored the good news that Target tried to play up, including a successful launch in Canada, much higher digital sales, and strong results from its city-sized store experiments. Wall Street sold the stock off anyway, sending shares down 4%.

But there was one piece of news buried in the retailer's conference call that I think could trump all of that: Target's customers are getting more loyal.

Sign me up
Management said that the company's Red Card, its rewards program that offers shoppers 5% off, rose to a 17% penetration rate among its customer base. That's up from just 12% a year before.

If Target can keep converting shoppers to members, loyalty card growth should lay the foundation for big sales gains down the road.

Consider just how much of an impact these cards have had on some other businesses:

Starbucks (NASDAQ: SBUX ) : The coffee king is also the king of rewards cards. Starbucks counts over 6 million members in its loyalty program, who account for more than 30% of the company's U.S. transactions. Last quarter, those members added 32% more dollars onto their cards than in the year-ago period. We're talking billions of dollars. Starbucks' management credits that success with helping the company keep sales growth humming along, and coming in much less choppy than at other retailers.
Amazon.com (NASDAQ: AMZN ) : We know that Amazon customers spend more at the company's site after they make a switch to becoming members of its Prime shipping service. A lot more. By some estimates, we're talking $1,224 in annual spending at the site, or double what non-Prime customers spend. Amazon can thank its Prime service for helping deliver huge sales growth, which is why boosting the number of products it offers through the service remains such a big priority for the company.

Hitting the target
Target has seen equally encouraging early results on its customers' spending patterns. Households tend to boost their spending in stores by 50% after they start using the Red Card. Sure, those sales put pressure on profits, as more of them qualify for the 5% discount. But that's a good trade-off if it makes Target the first choice for more consumers' shopping needs.

The best news for Target here is that its oldest market, Kansas City, has a 20% penetration rate for its card, and that figure is still growing. So, the retailer has a big opportunity ahead to keep adding to its member base, increasing customer loyalty in the process.

The retail space is in the midst of the biggest paradigm shift since mail order took off at the turn of last century. Only those most forward-looking and capable companies will survive, and they'll handsomely reward those investors who understand the landscape. You can read about the 3 Companies Ready to Rule Retail in The Motley Fool's special report. Uncovering these top picks is free today; just click here to read more.

5/27/2013

Amid Signs of Turmoil, South Sudan Says Oil Will Flow

JUBA, South Sudan (AP) -- Following a lengthy Cabinet meeting, South Sudan's government spokesman said Wednesday that the country will continue to export oil through Sudan and that there had been only a temporary slowdown in production.

An official in South Sudan's oil ministry earlier told The Associated Press that Sudan had blocked the export of South Sudanese oil. The official insisted he not be identified because he is not authorized to release the information. But government spokesman Barnabas Marial Benjamin said later that it was only a temporary slowdown.

"It is not really a shutdown," Benjamin said, before explaining a technical process behind storage procedures and valve openings. "But as we speak now P2 is going to be opened later on this afternoon and the oil will continue to flow to reach Port Sudan."

Benjamin downplayed the summoning of the Chinese envoy to South Sudan over recent oil issues. South Sudan's oil industry sector is dominated by Chinese companies.

"The summoning of the Chinese envoy was actually to explain to them about the temporarily non-turning on of the valve at P2. They are stakeholders in this process and so there is need to inform them that the valve has not yet opened," Benjamin said.

Benjamin said South Sudan's oil minister Stephen Dhieu Dau is going to Khartoum later Wednesday to meet his Sudanese counterpart to clear the issue.

Sudanese Oil Minister Awad Ahmed al-Jazz denied that Khartoum has blocked South Sudan pipelines. He told state news agency SUNA Wednesday said that South Sudanese oil was flowing normally through Sudan toward the ports of export on the Red Sea.

While speaking at a police graduation ceremony in Juba on Monday, South Sudan President Salva Kiir warned there could be an oil shutdown like the one that ended nearly two months ago. He said Juba was still working with Sudan "in a diplomatic way."

South Sudan must export all its oil through pipelines owned by Sudan. South Sudan resumed oil production in April this year, 16 months after a shutdown caused by disagreements with Sudan over oil transit fees.

Show Me the Money, Roundy's

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

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

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

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

Over the past 12 months, Roundy's generated $59.9 million cash while it booked a net loss of $62.9 million. That means it turned 1.5% of its revenue into FCF. That doesn't sound so great.

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

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

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

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

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

With 92.6% of operating cash flow coming from questionable sources, Roundy's investors should take a closer look at the underlying numbers. Within the questionable cash flow figure plotted in the TTM period above, changes in taxes payable provided the biggest boost, at 5.9% of cash flow from operations. Overall, the biggest drag on FCF came from capital expenditures, which consumed 52.7% of cash from operations.

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

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

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

Add Roundy's to My Watchlist.

Weekend Edition: The single greatest threat to your wealth you will ever face

As you undoubtedly know, financial newsletter writers get paid to make bold, exciting predictions. Judging by the hyperbole in our industry's sales letters, you'd have to imagine that we're all bipolar.

After all, according to newsletter writers, the world is always either about to end... or about to boom.

Today's essay is no different. In fact, what I would like to show you today is without a doubt the single greatest threat to your wealth you will ever face. Even so, I'm confident almost all of you will ignore this warning until it is far, far too late. And that's at least partly my fault.

So before we get to the finance, I'd like to share something about my own company that I don't like and wish I could change.

The reality is, the terrible things and incredible booms we predict (almost every day) in the sales presentations for our newsletter business rarely come to pass.

I'd like to think our sales presentations are better than my fellow publishers... but truthfully, I'm pretty sure an outsider wouldn't be able to tell the difference. So how can you tell when a newsletter writer's dire warnings or emphatic recommendations are real... or at least likely to turn out to be right?

As you would imagine, I have some insight into this question. After all, I have written some of the most famously hyperbolic headlines of all time in our industry. Some of these predictions turned out to be right, like when I predicted Fannie Mae and Freddie Mac were going to zero.

New subscribers might rightfully wonder why a newsletter publisher (like me) would write such things about his own work and draw attention to the occasional excesses in his company's marketing. Why would I remind our clients of the single biggest weakness of our business model – our need for hyperbolic sales pitches?

What can I say? I can't help myself. I feel an obligation to tell you what I'd like you to tell me, were our roles reversed. That's why I write these essays. I firmly believe that if you combine the strategies I explain in these notes with our investment research, you will excel as an investor. And then you'll forgive us for the hyperbole required for our marketing.

In fact, I know thousands and thousands of investors around the world have used our work to become world-class investors. They depend on us for reliable and profitable ideas. When I meet them, they always ask... "Why do you people use such terrible marketing?"

Well, we use what works. We assume, were you in our shoes, you'd do the same.

Sadly, though... perhaps because of our marketing, most of the people who try one of our investment newsletters either demand a refund or simply allow their subscription to lapse. The main reason that happens is because the reason they subscribed – the original hyperbolic headline – did not pan out the way they expected. (Or at least it didn't pan out soon enough to suit their desires for the end of the world or the beginning of a new boom.)

Even worse... when the facts change, we're likely to change our minds. But... nothing costs you more in publishing. That's a fact. I can't explain it... but it is the truth.

Likewise, nobody wants to read that their cherished financial nonsense is going to come to a bad end. I can't count the number of Peak Oil believers who've sent me angry demands for a refund – never mind the soaring oil and gas production numbers. Or the latest craze: digital currency Bitcoin. Just mentioning that Bitcoin might turn out badly will likely cost me several thousand subscribers. I'm not kidding.

So... how can you know when a newsletter writer is going to be right about an outlandish prediction... perhaps one that goes against your own beliefs about the market?

In my opinion, the best guide is history. When history says the prices in a market have gotten completely out of whack, the newsletter writer is going to be right every time.

If history isn't your bag, you can look at the data and the trends and remember your statistics lessons: the central tendency, reversion to the mean.

Let me give you one recent example...

About a year ago, I made an "outlandish" prediction – that natural gas prices were going to go up and oil prices were going to come down...

There are few things in life I know with certainty... But I know this: Barring the end of the world, the price of oil is going to fall and the price of natural gas is going to rise.

At the time, natural gas producer Chesapeake was collapsing because of low natural gas prices and nearly everyone on Wall Street was short natural gas. I recommended buying Chesapeake bonds and its competitor, Devon, and I predicted a huge rebound in natural gas prices.

In fact... I guaranteed that natural gas would soar because I knew it was certain – a 100% chance – that natural gas couldn't continue to trade for less than $2 per thousand cubic feet. A year later, the price of gas has doubled. How did I know?

A barrel of oil contains 5.825 million British thermal units (Btu) of energy. One thousand cubic feet of gas contains just a little more than 1 million Btu. Thus, a barrel of oil has approximately six times more energy than 1 million cubic feet of gas. On an energy-equivalent basis, you would expect natural gas to trade for one-sixth the price of oil. But of course, oil is more highly prized as a fuel source. It's more easily portable and thus is a better fuel for transportation.

Historically, looking at the two commodities, the average multiple of gas to oil was about 10x. That is, a barrel of oil was, on average, 10 times more expensive than one thousand cubic feet of gas. By April 2012, that premium had reached an all-time high of 55 times.

There was no way that kind of price relationship could have lasted. A reversion to the mean was 100% certain. And that's what happened. Today, with West Texas Intermediate crude oil at $95 per barrel and natural gas at around $4, the ratio is still wide, at almost 24 times. But it's half as wide as last year. You should expect oil prices to continue to decline and gas prices to continue to rise. I believe the future 10x equilibrium will be reached when gas is around $6 and oil is around $60.

Now... let me give you another "outlandish" prediction. The U.S. bond market – particularly junk bonds – is going to crash.

When this crash occurs, it will be the largest destruction of wealth in history. There has never been a bigger bubble in U.S. bonds.

How do I know? It's simple. Junk bonds (aka high-yield bonds issued by less creditworthy companies) have never yielded less than 5% annually. But they do today. Likewise, the difference between the yields on junk bonds and the yields on investment-grade bonds has almost never been smaller. That means credit is more available today than almost ever before for small, less-than-investment-grade firms.

The last time credit was this widely available – and at such low costs – was in 2007. And you know how that turned out...

The coming collapse in the bond market will be far worse than it was last time, too. This time, the Federal Reserve's actions have driven forward the huge bull market in bonds. The Fed is printing up almost $100 billion per month and buying bonds. That has forced the other buyers of bonds to buy riskier debt that, historically, offered much higher yields.

Today, those yields have been incredibly "compressed." You can imagine the high-yield segment of the bond market to be like a spring whose coils have been driven together by the force of the Federal Reserve's market manipulation. As soon as the Fed's buying stops (and it must stop one day, or else it will trigger hyperinflation), the yields on those riskier bonds will soar again. As bond yields rise, the price of bonds will fall sharply.

To give you a specific example, car manufacturer General Motors recently issued bonds to investors. The yield on these securities was only 3.25%. I'm fairly certain that inflation in our economy will exceed that rate.

That's why a company that went bankrupt in the last five years... that operates in a highly competitive market... and still suffers from massive overcapacity... is paying essentially nothing for capital.

That doesn't make any sense.

Investors are being paid nothing, in real terms, for their savings – or to accept the real risk that GM could default. Investors ought to be getting at least 7.5% on these bonds, a yield that would cause the price of these bonds to fall 50%.

I believe we'll see a real panic in the corporate bond market at some point in the next year. I expect the average price of non-investment-grade debt (aka junk bonds) to fall 50%. Investment-grade bonds will fall substantially, too. (I'd estimate something around 25%.)

This is going to wipe out a huge amount of capital... and believe me... it's 100% guaranteed to happen.

Regards,

Porter Stansberry

Evidence Points to a Jamie Dimon Victory

At the beginning of next week, Jamie Dimon, the chairman and CEO of JPMorgan Chase (NYSE: JPM ) , will learn whether or not the bank's shareholders have voted to strip him of one of these titles. Reports over the last two weeks have indicated that two major proxy advisory firms have recommended the roles be split. However, JPMorgan's three largest shareholders have yet to cast their ballots.

In the video below, Motley Fool contributor John Maxfield discusses the latest updates on this front.

With big finance firms still trading at deep discounts to their historic norms, investors everywhere are wondering if this is the new normal, or if finance stocks are a screaming buy today. The answer depends on the company, so to help figure out whether JPMorgan is a buy today, check out The Motley Fool's premium research report on the company. Click here now for instant access!

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More Expert Advice from The Motley Fool

Top 10 Blue Chip Stocks To Invest In 2014

Ever since savings rates hit rock-bottom lows, dividend stocks have come into vogue with income investors. Zeroing in on dividend stocks isn't difficult or time-consuming, but it certainly pays to know what makes a safe, high-quality dividend stock one you can hold on to for many years.

I've uncovered three stocks that fit the bill, each harnessing an enticing yield, a sustainable dividend payout ratio, and reliable dividend growth.

1. Illinois Tool Works (NYSE: ITW ) This industrial goods manufacturer is a card-carrying member of the S&P 500 Dividend Aristocrats, an elite group of blue chip companies that have raised their dividends for at least 25 consecutive years. Amazingly, Illinois Tool Works has increased its dividend for 49 straight years.�

The stock currently boasts a 2.3% dividend yield and recently grew its dividend by 5%. Illinois Tool Works' payout ratio, a measure that indicates how much of its net income is returned to shareholders in the form of dividends, is a very healthy 26%. This indicates the company has plenty of room to increase its dividend in the future.

Top 10 Blue Chip Stocks To Invest In 2014: Philip Morris International Inc(PM)

Philip Morris International Inc., through its subsidiaries, engages in the manufacture and sale of cigarettes and other tobacco products in markets outside of the United States. Its international product brand line comprises Marlboro, Merit, Parliament, Virginia Slims, L&M, Chesterfield, Bond Street, Lark, Muratti, Next, Philip Morris, and Red & White. The company also offers its products under the A Mild, Dji Sam Soe, and A Hijau in Indonesia; Diana in Italy; Optima and Apollo-Soyuz in the Russian Federation; Morven Gold in Pakistan; Boston in Colombia; Belmont, Canadian Classics, and Number 7 in Canada; Best and Classic in Serbia; f6 in Germany; Delicados in Mexico; Assos in Greece; and Petra in the Czech Republic and Slovakia. It operates primarily in the European Union, Eastern Europe, the Middle East, Africa, Asia, Canada, and Latin America. The company is based in New York, New York.

Advisors' Opinion:

[By Fitz Gerald]
Philip Morris International Inc. (NYSE: PM), through its subsidiaries, engages in the manufacture and sale of cigarettes and other tobacco products in markets outside of the United States. The company has raised dividends every year since it was spun-off from Altria (MO) in 2008 and yields 3.70%.
[By Louis Navellier]
Philip Morris International (NYSE:PM) is involved with the manufacture and sale of cigarettes and other tobacco products in over 180 countries across the globe. Year to date, PM stock is up 16%, compared to a loss of nearly 2% for the Dow Jones.

Top 10 Blue Chip Stocks To Invest In 2014: Chevron Corporation(CVX)

Chevron Corporation, through its subsidiaries, engages in petroleum, chemicals, mining, power generation, and energy operations worldwide. It operates in two segments, Upstream and Downstream. The Upstream segment involves in the exploration, development, and production of crude oil and natural gas; processing, liquefaction, transportation, and regasification associated with liquefied natural gas; transportation of crude oil through pipelines; and transportation, storage, and marketing of natural gas, as well as holds interest in a gas-to-liquids project. The Downstream segment engages in the refining of crude oil into petroleum products; marketing of crude oil and refined products primarily under the Chevron, Texaco, and Caltex brand names; transportation of crude oil and refined products by pipeline, marine vessel, motor equipment, and rail car; and manufacture and marketing of commodity petrochemicals, plastics for industrial uses, and fuel and lubricant additives. It a lso produces and markets coal and molybdenum; and holds interests in 13 power assets with a total operating capacity of approximately 3,100 megawatts, as well as involves in cash management and debt financing activities, insurance operations, real estate activities, energy services, and alternative fuels and technology business. Chevron Corporation has a joint venture agreement with China National Petroleum Corporation. The company was formerly known as ChevronTexaco Corp. and changed its name to Chevron Corporation in May 2005. Chevron Corporation was founded in 1879 and is based in San Ramon, California.

Advisors' Opinion:

[By Hawkinvest]
Chevron Corporation (CVX) is a leading integrated energy company with exposure to oil, natural gas, refining, etc. This could be one of the most undervalued stocks in the market. Chevron pays a dividend that beats many other stock and bond yields, plus it has a below market price to earnings ratio of about 8 times earnings. The average stock in the S&P 500 Index currently trades for over 12 times earnings. If oil prices continue to rise, the already healthy profit estimates for Chevron might be too low. With oil prices showing strength this early in the season, Chevron could be poised to beat earnings in the coming months. However, the stock is trading at the upper end of the recent trading range. Recently, it has been possible to buy this stock at about $102 per share, so waiting for dips could pay off.

Here are some key points for CVX:

Current share price: $104.25

The 52 week range is $85.63 to $110.01

Earnings estimates for 2012: $12.66 per share

Earnings estimates for 2013: $13.20 per share

Annual dividend: $3.42 per share which yields 3.1%
[By Goodwin]
Chevron (CVX-N94.663.183.48%) is the world's second-largest energy company, after fellow Dow component Exxon Mobil (XOM-N73.951.121.54%).

But, analysts favour Chevron's stock, which receives positive reviews from 76 per cent of researchers in coverage. In contrast, Exxon receives positive reviews from 42 per cent of analysts, ranking third-worst in the Dow. Chevron is scheduled to report fourth-quarter results on Jan. 28. Its third-quarter adjusted earnings tally of $1.87 (reflecting 8.7 per cent year-over-year growth) missed the consensus forecast of $2.15 by 13 per cent, sending shares down modestly. The sales figure, at $49-billion, missed by 1.9 per cent. Chevron has integrated global operations and sells at a peer discount.

Its stock trades at a trailing earnings multiple of 11, a forward earnings multiple of 8.9, a book value multiple of 1.8, a sales multiple of 1 and a cash flow multiple of 6.2, 43 per cent, 52 per cent, 58 per cent, 67 per cent and 32 per cent discounts to oil-and-gas industry averages. Based on forward earnings, Chevron is the fourth cheapest Dow stock. It also pays a 72-cent quarterly dividend, translating to a 3.1 per cent dividend yield, seventh highest in the Dow. It has boosted the payout 7.9 per cent a year, on average, over a three-year span and 10 per cent a year, on average, over a five-year span. Chevron has $15-billion of cash, compared to $11-billion of debt.

Bullish Scenario: Macquarie expects Chevron's stock to rise 21 per cent to $114 in 12 months.

Bearish Scenario: JPMorgan, despite rating Chevron “overweight”, has a $90 target.
[By Chuck Carlson]
Chevron provides administrative, financial, management and technology support to the United States and international subsidiaries that engage in petroleum operations, chemicals operations, mining operations, power generation and energy services. Cramer holds 500 shares of CVX stocks. CVX has a dividend yield of 3.21% and returned 10.91% since the beginning of this year. It has a market cap of $195.53B and a P/E ratio of 8.52. Phill Gross and Robert Atchinson invested over $300 million in CVX.

Best Life Sciences Stocks To Invest In 2014: Visa Inc.(V)

Visa Inc., a payments technology company, engages in the operation of retail electronic payments network worldwide. It facilitates commerce through the transfer of value and information among financial institutions, merchants, consumers, businesses, and government entities. The company owns and operates VisaNet, a global processing platform that provides transaction processing services. It also offers a range of payments platforms, which enable credit, charge, deferred debit, debit, and prepaid payments, as well as cash access for consumers, businesses, and government entities. The company provides its payment platforms under the Visa, Visa Electron, PLUS, and Interlink brand names. In addition, it offers value-added services, including risk management, issuer processing, loyalty, dispute management, value-added information, and CyberSource-branded services. The company is headquartered in San Francisco, California.

Advisors' Opinion:

[By Charles Sizemore]
One of the “big picture” economic themes that I expect to play out over 2011 and beyond is the secular shift to a global cashless society.?Though the process is well on its way in the U.S. and Europe, roughly 40% of all transactions are still made with cash and paper checks according to Barron’s.

This means that even in “boring” developed markets, there is ample room for growth in electronic payments. And there is no better company to benefit from this trend than credit card giant Visa (NYSE: V).
[By Jeff Reeves]
Despite a very rough 2011 so far, payment processor Visa (NYSE:V) is right there beside Apple with gains of nearly 30% since the first of the year. Visa stock continues to set 52-week highs and is within striking distance of new all-time highs above $97.

Visa doesn’t have quite the track record of many blue chips, having only gone public in 2008. However, there are some big reasons to expect that the recent growth is not just a flash in the pan.

For starters, the demographic trends are hard to ignore. The percentage of cashless transactions continues to rise. Despite rapid growth from fees for payment processing, 40% of all transactions in the U.S. still are done with cash or paper checks. That’s to say nothing of rapid growth of debit and credit card business in emerging markets. Visa’s logo is everywhere and will only be accepted in more places as the months go by.

And don’t forget, Visa is not a financial stock. Service fees account for more than one-third of revenue — meaning the stock is little more than a toll-taker on the road between a merchant and a customer’s checking account. It is not exposed to bad debt the way financial stocks like Bank of America (NYSE:BAC) and others are.

Visa has seen year-over-year earnings growth every single quarter since going public, and it should keep up that growth. Additionally, revenue was up 17% from fiscal 2009 to fiscal 2010 and is forecast to jump another 12% in fiscal 2011.

There is big growth to be had at Visa. It might not be Apple, but its strong growth potential and dominant brand make it a go-to stock for large-cap investors.
[By Robert Holmes]
Company Profile: Visa is the global credit card company.

Share Price: $95.69 (Dec. 6)

2011 Return: 36%

Investment Thesis: "Visa is well-positioned to continue to capitalize on the electronic payments secular growth trend," William Blair analysts write of Visa, noting that secular growth of electronic payments is expected to average 10% to 12% globally over the next several years.

The analysts also say that Visa also enjoys very high incremental margins, which contributes to the company's attractive margin profile (59% in fiscal 2011) and strong free cash flow.

"Visa has a strong balance sheet and generates strong cash flow," the analysts write. "Visa had about $4.1 billion of cash and investments, $2.9 billion of litigation reserves, and no debt on its balance sheet as of Sept. 30, 2011. Guidance calls for more than $4 billion of free cash flow in fiscal 2012."
[By Ed Carson]
The holiday season was hit or miss for many retailers, but indicators are that consumers were using plastic. Visa shares have risen steadily for the past seven months, with a strong 6% gain so far in 2013. Even in America, consumers continue to shift more from cash and checks to credit and debit cards. Overseas, consumers are adopting plastic, while some are bypassing cards and going straight to mobile payments. Visa wants to make sure it's part of that mobile solution.

Visa earnings growth has decelerated for the past two quarters from 30% to 24% to 21%. Revenue growth in the latest quarter picked up to 15%, matching the best gains of the past two years.

Top 10 Blue Chip Stocks To Invest In 2014: International Business Machines Corporation(IBM)

International Business Machines Corporation (IBM) provides information technology (IT) products and services worldwide. Its Global Technology Services segment provides IT infrastructure and business process services, including strategic outsourcing, process, integrated technology, and maintenance services, as well as technology-based support services. The company?s Global Business Services segment offers consulting and systems integration, and application management services. Its Software segment offers middleware and operating systems software, such as WebSphere software to integrate and manage business processes; information management software for database and enterprise content management, information integration, data warehousing, business analytics and intelligence, performance management, and predictive analytics; Tivoli software for identity management, data security, storage management, and datacenter automation; Lotus software for collaboration, messaging, and so cial networking; rational software to support software development for IT and embedded systems; business intelligence software, which provides querying and forecasting tools; SPSS predictive analytics software to predict outcomes and act on that insight; and operating systems software. Its Systems and Technology segment provides computing and storage solutions, including servers, disk and tape storage systems and software, point-of-sale retail systems, and microelectronics. The company?s Global Financing segment provides lease and loan financing to end users and internal clients; commercial financing to dealers and remarketers of IT products; and remanufacturing and remarketing services. It serves financial services, public, industrial, distribution, communications, and general business sectors. The company was formerly known as Computing-Tabulating-Recording Co. and changed its name to International Business Machines Corporation in 1924. IBM was founded in 1910 and is based in Armonk, New York.

Advisors' Opinion:

[By Peter Hughes]
International Business Machines (IBM) -- our aggressive pick for the year -- is one of the world's most dominant technology companies, with annual revenues of $105 billion and net income of $16 billion.
[By Jim Cramer]
When this company talked about lofty EPS for 2015, initially the street was skeptical especially after IBM reported a blah quarter soon after the expectations were laid out. I now think the company has $20 earnings per share capabilities out three years and that $13 is doable for 2011. You keep the multiple the same and you get a $169 stock. I think it does just that. This one's cheap, way too cheap and it will be cheap next year, too, but on a bigger earnings base which is how it can get to my price target.

Top 10 Blue Chip Stocks To Invest In 2014: McDonald's Corporation(MCD)

McDonald?s Corporation, together with its subsidiaries, operates as a worldwide foodservice retailer. It franchises and operates McDonald?s restaurants that offer various food items, soft drinks, coffee, and other beverages. As of December 31, 2009, the company operated 32,478 restaurants in 117 countries, of which 26,216 were operated by franchisees; and 6,262 were operated by the company. McDonald?s Corporation was founded in 1948 and is based in Oak Brook, Illinois.

Advisors' Opinion:

[By JON C. OGG]
McDonald’s Corporation (NYSE: MCD) is at $85.08 and analysts have a consensus price target objective of $97.68. It carries a 2.9% dividend yield and the stock is down 5% from its 52-week high. McDonald’s trades at close to 6-times book value, but its return on equity is 37%. S&P carries an “A” local long-term rating on the Golden Arches. In the “you gotta eat somewhere” theory, McDonald’s seems to keep winning over and over and its shares and same-store sales keep rising handily.
[By Martin]
The company is one of the world’s most recognized brands. The Golden Arches has locations all over the world. McDonald’s has managed to continually reinvent itself and its menu, and delivered strong shareholder returns in the process. However, it is lagging behind Yum! Brands (NYSE:YUM) in China, which is a key market for growth. While the 10-year dividend growth rate is at 26%, I expect distribution growth over the next decade to average 10%.
[By ETF_Authority]
McDonald’s Corporation (MCD), together with its subsidiaries, operates as a foodservice retailer worldwide. The company has raised distributions for 35 years in a row. The 10 year annual dividend growth rate is 26.50%/year. The last dividend increase was 14.75% to 70 cents/share. Analysts are expecting that McDonald's will earn $5.73/share in 2012. I expect that the quarterly dividend will reach 77 cents/share in 2012. Yield: 2.80%

Top 10 Blue Chip Stocks To Invest In 2014: Colgate-Palmolive Company(CL)

Colgate-Palmolive Company, together with its subsidiaries, manufactures and markets consumer products worldwide. It offers oral care products, including toothpaste, toothbrushes, and mouth rinses, as well as dental floss and pharmaceutical products for dentists and other oral health professionals; personal care products, such as liquid hand soap, shower gels, bar soaps, deodorants, antiperspirants, shampoos, and conditioners; and home care products comprising laundry and dishwashing detergents, fabric conditioners, household cleaners, bleaches, dishwashing liquids, and oil soaps. The company offers its oral, personal, and home care products under the Colgate Total, Colgate Max Fresh, Colgate 360 Advisors' Opinion:

[By ChuckCarlson]
Colgate-Palmolive Company (CL), together with its subsidiaries, manufactures and markets consumer products worldwide. The company has raised distributions for 48 years in a row. The 10 year annual dividend growth rate is 12.40%/year. The last dividend increase was 9.40% to 58 cents/share. Analysts are expecting that Colgate Palmolive will earn $5.52/share in 2012. I expect that the quarterly dividend will be raised to 64 cents/share in 2012. Yield: 2.60%
[By Louis Navellier]
Colgate-Palmolive (NYSE:CL) is a staple of consumer products, selling its oral, personal, home care and pet nutrition products in over 200 countries. A nice year-to-date return of 16% has helped keep Colgate stock holders happy all year.

Top 10 Blue Chip Stocks To Invest In 2014: Apple Inc.(AAPL)

Apple Inc., together with subsidiaries, designs, manufactures, and markets personal computers, mobile communication and media devices, and portable digital music players, as well as sells related software, services, peripherals, networking solutions, and third-party digital content and applications worldwide. The company sells its products worldwide through its online stores, retail stores, direct sales force, third-party wholesalers, resellers, and value-added resellers. In addition, it sells third-party Mac, iPhone, iPad, and iPod compatible products, including application software, printers, storage devices, speakers, headphones, and other accessories and peripherals through its online and retail stores; and digital content and applications through the iTunes Store. The company sells its products to consumer, small and mid-sized business, education, enterprise, government, and creative markets. As of September 25, 2010, it had 317 retail stores, including 233 stores in the United States and 84 stores internationally. The company, formerly known as Apple Computer, Inc., was founded in 1976 and is headquartered in Cupertino, California.

Advisors' Opinion:

[By Michael]
This is another technology stock with great potential. With each new release of an iPhone or iPad device, the stock continues to climb. They have the “wow” factor down and I don’t see this changing any time soon. Their new server farm in Charlotte, NC just went online as iCloud. I think this is going to make a huge long term difference. But in the short term, you have very regular releases of new versions of their flashy devices. As long as they keep that up, the stock will continue to rise. Although Steve Jobs is no longer here with us, he probably left a road map for Apple to fol low for the next 3-5 years. The question will be whether Tim Cook will be able to execute on those plans.
[By David Eller]
Apple (Nasdaq: AAPL) is loved by its customer base, but it remains a hardware company. After being disappointed by Dell and HP throughout 2012, professional investors have not been willing to acknowledge that Apple may be different, and that traditional hardware margin compression may not be in store for Apple. The fact is that Apple is selling a closed ecosystem of products, not commodity products that interact with third-party hardware. This is similar to IBM’s early days, but with one major difference: Apple provides a better user experience for its customers. Estimates as well as expectations have come down over the last two quarters, and Apple is now trading at less than 10x out year earnings. The company merely needs to execute on its current product line to meet estimates and see a dramatic increase in share price. If it executes on a revised Apple TV product or builds out a Netflix-like, on-demand content offering, these new revenue streams would dramatically increase Apple’s earnings potential. It seems strange but a combination of execution and new product offerings at a time when expectations (and valuation) are low could drive 50% upside to its existing massive valuation.
[By Michael Fowlkes]
Tech-giant Apple (AAPL) has seen its shares take a serious beating in recent months, but we believe the selloff has just about reached its end. The underlying fundamentals remain strong and we expect to see several new products next year. The concerns that have led to the recent sell off are real, but at the same time not as material as some would like you to believe. A big concern is theslowing of its earnings growth. Last year it had 100% earnings growth, but that has dropped to 23% this year.

You need to ask yourself, considering Apple’s size, is a 23% jump in earnings growth really a bad thing? Apple has become a victim of its own success, and is having a hard time keeping up with its past successes. This does not mean the company is in trouble, it just means that investors need to have a more realistic view of the company’s business. Once the current panic subsides, we believe investors will come back to the stock, and realize that it is a great value with its current P/E of just 12.
[By Stephen Quickel]
Can Apple Inc. (AAPL) return to the $700 level? Whether its does or not, I suspect that the stock will be one of the outstanding comeback stories during the year ahead.

Indeed, even if it rebounds to $600 or so, that's a 20% gain. Most investors would settle for that. And chances are it will do much better over time, given Apple's knack for coming up with new products.

Short sellers have cleaned up since they began bum-rapping Apple in late 2012. Three observations are appropriate:
1. The short positions, while rising rapidly early in the fall, never amounted to more than a few percent of the outstanding shares at their peak.
2. The stock was probably overdue for correction, having zoomed 9-fold since March 2009.
3. The consensus of 50-plus Wall Street analysts covering AAPL still calls for 20%-plus a year earnings growth going forward, with a target price of $762.
Apple, in case you hadn't noticed, is selling iPads and iPhones at record levels while its stock has been under attack, in just about every corner of the world.