8/29/2013

PRAA Raised to Strong Buy - Analyst Blog

On Jul 6, 2013, Zacks Investment Research upgraded Portfolio Recovery Associates Inc. (PRAA) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

Portfolio Recovery reported positive earnings surprise in the last four quarters with an average beat of 8.28%. The long-term earnings growth of the company is presently pegged at 15%.

Portfolio Recovery's bottom-line results have shown steady improvement over the past few quarters. Strong cash collections drove revenues upward, while an increase in operating income drove operating margin higher.

Moreover, to make the shares more affordable, Portfolio Recovery announced a 3:1 stock split in Jun 2013, which will be conducted on or around Aug 1, 2013. This is the first stock split being implemented by the company, which went public in 2002.

Further, Portfolio Recovery has expanded beyond its primary debt collection business into government collections, audit services and claims settlement with the acquisitions of IGS Nevada, Alatax, Broussard Partners, MuniServices, Claims Compensation Bureau and Mackenzie Hall. The ability to acquire and assimilate businesses in related fields is certainly a long-term positive as the traditional debt collection business matures and becomes more competitive.

We expect Portfolio Recovery to grow 20% year over year in the second quarter of 2013. Consequently, the Zacks Consensus Estimate is currently pegged at $2.24 per share. Over the last 60 days, 2 out of the 5 analysts covering the stock raised their estimates for Portfolio Recovery's second quarter and full year 2013.

Other Stocks to Consider

Other stocks in the sector that are performing well and are worth a look are Sykes Enterprises, Incorporated (SYKE) – Zacks Rank #1 (Strong Buy), Discover Financial Services (DFS) – Zacks Rank #2 (Buy) and Regional Management Corp. (RM) – Zacks Rank #2 (Buy).

Wolverine Posts Strong 2Q Earnings - Analyst Blog

Wolverine World Wide Inc. (WWW) posted strong second-quarter 2013 results, owing to the robust performance of its newly acquired brands. Wolverine's quarterly earnings of 46 cents a share zoomed past the company's previous guidance range of 31 cents to 35 cents and handily surpassed the Zacks Consensus Estimate of 34 cents. Moreover, the quarterly earnings jumped 12.2% year over year.

Including one-time items, the company reported earnings of 36 cents a share compared with 42 cents in the year-ago quarter.

Benefiting largely from the acquisition of Collective Brands' Performance + Lifestyle Group (PLG) group, Wolverine, which competes with Deckers Outdoor Corporation (DECK), reported net sales of $587.8 million. Net sales surged 88% year over year but fell short of the Zacks Consensus Estimate of $591 million. However, on a pro-forma basis, revenue increased 5.5% during the quarter.

Wolverine acquired PLG unit for $1.25 billion. The PLG unit sells footwear and related products, both wholesale and retail, for children and adults under popular brands including Stride Rite, Sperry Top-Sider, Saucony and Keds.

Coming to the operating groups, revenue at its Lifestyle group came in at $255.2 million, signifying a massive rise from $28.5 million in the year-ago quarter. Performance group's revenue jumped 33.8% to $199.7 million, while Heritage group's revenue declined 0.8% to $110.6 million. Revenue derived from the company's other brands decreased 4.7% to $22.3 million during the quarter.

On account of the top-line improvement, the company's gross profit more than doubled to $241.1 million, while gross margin expanded 320 basis points to 41%, reflecting increased contribution of high margin consumer direct operations.

Operating profit came in at $37 million, rising 62.3% year over year. However, operating margin contracted 100 basis points to 6.3%.

Other Financial Aspects

! Wolverine ended the quarter with cash and cash equivalents of $171 million and reduced its net debt by $159 million. Net debt now stands at $1,014 million, while shareholder equity was $704.6 million.

Guidance Remains Strong

This Zacks Rank #2 (Buy) company raised its earnings guidance. Earnings per share are now expected to be in the range of $2.60 – $2.75, up from its earlier guidance range of $2.50 – $2.65, and reflecting year-over-year growth of 13.5% to 20.1%.

Revenue is expected in the range of $2.7 – $2.775 billion, up 6% to 8.9% year over year on a pro-forma basis.

Wolverine expects gross margin to improve moderately in 2013 due to the product mix shift toward high margin consumer direct business and lower markdowns. However, operating margin is projected to remain marginally low when compared with the prior year. Capital expenditure is projected to be in the range of $40 million – $50 million.

Other Stocks to Consider

Besides Wolverine, other stocks in the consumer discretionary sector worth considering include Brown Shoe Co. Inc. (BWS) and Big 5 Sporting Goods Corp. (BGFV), both carrying a Zacks Rank #1 (Strong Buy).

e-Commerce Stock Update - July 2013 (pt. 2) - Zacks ...

This is part two of our e-Commerce Industry Outlook. Click here to read part one.

Although retail e-Commerce is the segment that most of us are interested in, it is in fact just a part of the overall e-Commerce market. In fact, retailers and service providers generate just 4.7% and 3.0%, respectively of their revenues online, a slightly higher percentage than they did in the prior year. The U.S. Census Bureau categorizes these two segments as business-to-consumer.

According to the U.S. Census Bureau, the manufacturing sector is the largest contributor to e-commerce sales (49.3% of their total shipments), followed by merchant wholesalers (24.3% of their total sales). These two segments make up the business-to-business category.

This places the business-to-business category at 90% of total e-Commerce sales, with the balance coming from the business-to-consumer category. The latest numbers from the Bureau suggest that the fastest-growing segments were retail and wholesale. [All the above data from the U.S. Census Bureau relate to 2011, as published in May 2013]

The industry is evolving very rapidly, so data collection and evaluation are particularly difficult. Consequently, one has to rely largely on surveys by both government and private agencies.

In this section, we will discuss segments of the e-Commerce market than do not relate directly to the retail of goods, and discuss instead travel, payments, security and advertising.

Travel

The U.S. Commerce Department expects international travel to the U.S. to continue increasing over the next few years. Visitor volume is currently expected to increase 6-8% a year from 2012 to 2016 leading to a 49% increase in the number of users during the period.

Visitors from the Middle East are expected to be the slowest-growing (29%). South America, Asia and Oceania growth rates are expected to be comparable at 83%, 82% and 82%, respectively.

The fastest growth is expected to come from China (232%), Sou! th Korea (200%), Brazil (150%), Russian Federation (139%) and India (94%). Travel and tourism is one of the country's strongest industries, contributing a trade surplus in each of the last 20 years.

The top travel booking sites are Booking.com, Expedia.com, Hotels.com, Priceline.com, Kayak.com (acquired by Priceline), Travelocity.com, Orbitz.com and Hotwire.com. Since Booking.com and Kayak are part of Priceline (PCLN) and both Hotels.com and Hotwire.com part of Expedia (EXPE), this narrows down the top companies in the segment to Priceline, Expedia, Orbitz Worldwide (OWW) and Travelocity. However, there are several others worth considering that include Ctrip International (CTRP), MakeMyTrip (MMYT) and TripAdvisor (TRIP), which was spun off from Expedia.

The global travel market grew 4% in 2012 and is expected to grow another 2-3% this year. The Asia/Pacific region is expected to see the strongest growth (up 6%), followed by Europe and South America (mainly Brazil) at 2% each. North America (mainly U.S.) is expected to be flat this year. [World Travel Monitor 2012]

According to the April 2013 TravelClick North American Hospitality Review (NAHR), both occupancy and average daily rates (ADRs) in North America are seeing steady growth this year, with individual bookings (both leisure and business) doing better than group bookings. In the second quarter of 2013, total travel occupancy growth was 3.6% from last year with ADR growth even better at 3.8%.

Online travel agents (OTAs) are growing the fastest this year – up 13.7% in the first quarter, according to the TravelClick North American Distribution Review (NADR). The hotels' own websites were up 5.0%, with direct walk-ins and calls to the hotel growing 3.7%. The areas of weakness were the global distribution system used by travel agents and CRS (calls to a hotel's toll-free number).

Share of individual bookings-



Global corporate travel bookings were up 8.8% in April, according to Pegasus Solutions, which is the single largest processor of electronic hotel transactions. This is the highest volume growth through GDSs since August 2011.

Smartphones are playing a key role in travel purchases, especially for last minute purchases. eMarketer expects smartphone travel researchers in the U.S. to grow to 50 million or 40% of all digital travel researchers this year, with total U.S. mobile travel sales touching $13.6 billion.

The top site for travel content is TripAdvisor, visited by 60% of Americans when choosing a hotel. Google's (GOOG) YouTube is now growing in popularity and is the second in line, according to MMGY Global's 2013 Portrait of American Travelers study.

Another report by PhocusWright mentioned that when online penetration of the travel market reached 35% in any country, growth rates were likely to slow down to single-digits. The research firm mentioned that only the U.S., U.K. and Scandinavia had reached this level of penetration and most other markets across Europe, Asia and Latin America would continue to show good growth rates.

Payment Systems

With practically all market research indicating solid growth in e-Commerce sales over the next few years, online players are vying with each other to come out with convenient and secure payment solutions.

The FIS Mobile Wallet from Fidelity National Information Services Inc. (FIS) is basically a bar code reader that feeds information related to the purchase into the user's smartphone and uses it as a medium to transfer the information to the cloud. Online purchase of merchandise is also possible. The solution provides good security, since the transaction is carried out entirely in the cloud through the retailer's and banker's applications and personal information is not shared at the time of purchase.

QR code payments have already been made by most smartphone users in the U.S. an! d the tec! hnology is moving mainstream. However, the safety of the system comes at a price, which is the time it takes to complete a transaction. This is the reason that Google is still hanging on to its digital wallet.

Google's digital wallet allows a customer to make a payment by waving his mobile phone over a POS terminal. Other than the convenience of the whole thing, the main attraction being highlighted is the security of the payment channel, since neither the customer nor the retailer would be recording the personal information related to the customer. Adoption of the device, although it is some way off, will have a remarkable effect on the volume and value of mobile transactions, since it should increase the percentage of higher-value sales.

However, the cost of POS terminals is a downside to the system that could easily turn away retail partners. This is an evolving area and much could change over the next few years.

Visa (V) has also jumped on the bandwagon, claiming that its V.me is a digital wallet with a difference. Not only can it be used to make mobile contactless payments (bar code, QR code or NFC), but it can also be used for online checkout (it remembers card details from several providers).

The greatest success however is currently being enjoyed by eBay's Paypal, which has seen success at a large number of traditional retailers such as The Home Depot (HD) and Office Depot (OD). One drawback that remains is that although the system is itself secure, there is always a security risk for a buyer not used to dealing with Paypal, since it requires personal information.

Mobile banking is set to grow very strongly over the next few years, according to Juniper Research. The research firm estimates that a billion mobile devices (or 15% of the installed base) will be used for banking transactions by 2017, up from an expected 590 million at the end of this year. Most banks already offer at least one mobile banking offering, with some larger banks offering more tha! n one opt! ion. Messaging remains the most popular across the world, but apps are likely to remain the preferred channel in most developed markets.

Mobile banking has not picked up sufficiently in either the U.S. or Canada, due to security-related concerns. However, an analysis by Deloitte shows that mobile banking could become the most-preferred banking method by 2020. The study estimates that 20-25 million "Generation Y" (Gen Y) consumers will become new banking customers by 2015.

A banking.com study shows that 48% of Gen Y consumers are already using online banking services. Moreover, their preference for online banking is so high that around 30% said they would consider switching financial institutions if they did not provide the service. Both online and mobile banking by Gen Y largely consists of checking account balances and transferring funds, although they also like to pay bills on the platform.

It is believed that high smartphone penetration, higher income within this group and greater digital sophistication will drive increased demand for mobile banking services. Since mobile banking is expected to be the most cost efficient for banks, investment in technology to improve and expand mobile banking services is likely to increase.

Security

With online transactions expected to boom over the next few years, the topmost concern remains security. While banks will spend significantly on secure payment systems, hackers are expected to have a field day, largely targeting the flood of customers going online. Last year saw a huge increase in security breaches, something that may be expected to continue.

Recent research from McAfee revealed certain important facts: first, that mobile malware was primarily spreading through apps; second, 75% of infected apps came from Google Play; third, the chances of downloading malware or suspicious URLs was 1 in 6; fourth, 40% of malware families disrupt the system in more than one way, which is an indication of the increasing sophist! ication o! f hackers; and fifth, 23% of mobile spyware can result in data loss.

Even more alarming is that even "secure" payment platforms like digital wallets using NFC technology can now be infected by worms within close range of devices ("bump and infect"). An infected device can give out personal information during the payment process that can be used to steal from the wallet.

Mobile security offerings currently come from AirWatch, Apple (AAPL), Avast, Check Point, Cisco (CSCO), IBM (IBM), Juniper (JNPR), Kaspersky, McAfee, Microsoft (MSFT), MobileIron, RIM (Blackberry) (BBRY), Symantec (SYMC) and Trend Micro, among others.

Alternative payment systems will continue to gain popularity. While some of these payment systems, such as eBay's (EBAY) PayPal have been around for a while, other systems, such as Google's digital wallet, V.me and the FIS Mobile Wallet are still in the making. Alternative payment systems never really gained momentum in the past because of the low volume of transactions. However, as online transactions continue to increase, many more such systems could suddenly become more available.

We expect mobile security to become a major focus area for technology companies, since this is the stumbling block to payments through the mobile platform (currently just 2% of U.S. online spending).

Digital Advertising

The U.S. digital advertising market has seen some very strong growth in the past few years, despite the recession that impacted the entire economy. eMarketer estimates that the market will grow 14.0% in 2013, compared to the 15.0% growth in 2012.

Growth rates are expected to continue declining: 12.4% in 2014, 10.2% in 2015, 9.0% in 2016 and 6.9% in 2017. Retail, financial services, consumer packaged goods (CPG) and travel in that order, are expected to drive this growth.

The current strength in online advertising is coming primarily from the growing popularity of the display format. Of all the forms of online advertising,! display ! (including video, banner ads, rich media and sponsorships) is expected to see the strongest growth over the next few years. Also, of all the forms of display advertising, video and banner ads are expected to grow the strongest from 2011 to 2016.

Search will remain supreme until 2016, gradually giving way to video and banner ads, both of which will grow rapidly. The lower pricing of video and banner ads has made them popular with brand advertisers, so ad inventories are solid. Another factor favoring display ads is the proliferation of smartphones, where the smaller screens make display ads more effective than text ads.

The underlying drivers of growth of the display format are the continued increase in the number of users, greater propensity of users to consume online, a growing inventory of advertisements that serve to lower advertisement prices and the need to create brand awareness online.

Search advertising is expected to remain popular, because results are measurable, and therefore, more predictable than other media. This also makes the market more resilient in recessionary conditions, since advertisers are more confident about the results of their spending.

Since ecommerce entails the buying and selling of goods or services over electronic systems, it includes companies that are totally dependent on these sales, those that are gradually moving to it, as well as those that want to use it partially. Therefore, the biggest sellers or the ones growing the strongest are not necessarily those that are solely dependent on the Internet. The following diagrams seek to explain the position of companies primarily dependent on the Internet for the distribution of their goods and services in the context of the Zacks Industry Rank.

Two (Retail/Wholesale and Computer & Technology) of the 16 broad Zacks sectors are related to the ecommerce industry as depicted below.



! We rank t! he 264 industries across the 16 Zacks sectors based on the earnings outlook and fundamental strength of the constituent companies in each industry. To learn more visit: About Zacks Industry Rank.

The outlook for industries positioned at #88 or lower is 'Positive,' between #89 and #176 is 'Neutral' and #177 and higher is 'Negative.'

Therefore, Internet Commerce being in the 114th position is in Neutral territory, with Internet Services (185th position) being negative and Internet Services – Delivery (58th position) being positive.

So it is not surprising that the average rank of stocks in the Internet Commerce industry is 3.00, for Internet Services it is 3.15, while for Internet Services – Delivery, it is 2.76. [Note: Zacks Rank #1 denotes Strong Buy, #2 is Buy, #3 means Hold, #4 Sell and #5 Strong Sell].

Earnings Trends

The broader Retail/Wholesale sector, of which Internet Commerce is a part, appears to be turning the corner. While the revenue beat ratio is on the low side (34.1%), the earnings beat ratio is pretty robust at 61.4%.

Total earnings for the sector were up 5.7%, but not nearly as good as the 7.4% growth in the fourth quarter of 2012. Total revenues were up 1.5% from last year compared to a 4.9% increase in the fourth quarter.

The other companies we are discussing in the e-Commerce outlook (Part 2) fall under the broader Technology sector. Here too, we see a fairly strong earnings beat ratio of 63.1%, partially supported by a revenue beat ratio of 45.6%.

However, total earnings in the sector were down 4.4% compared to a 1.7% increase in the fourth quarter. Total revenues did slightly better, increasing 2.9% from last year, down from 5.3% in the fourth quarter.

Initial earnings estimates for 2013 and 2014 indicate double-digit growth in both years for Retail/Wholesale. Technology on the other hand is expected to be flat this year and up double-digits in the next.

OPPORTUNITIES

While many of the compan! ies discu! ssed are expected to do well this year, there are a few stand-out opportunities.

TripAdvisor (TRIP) is doing extremely well right now and the company's decision to invest in offline advertising (TV) makes sense. Traffic continues to surge, as the company continues to add content, both in the U.S. and important international markets.

Another good investment is Yahoo (YHOO), which is altering course under the leadership of Marissa Meyer. The company has been acquiring aggressively to position itself in the mobile segment and last reports indicated growing engagement.

Facebook (FB) is another opportunity worth looking into. The company is cozying up with Samsung, which has taken the mobile market by storm. It is also getting more innovative by the day, which is the only way to success here.

WEAKNESSES

We do not see a lot of weakness, although many of the companies may not be great opportunities either.

Revenue growth prospects for online travel companies Priceline, Expedia and Orbitz Worldwide are good. International expansion is a key factor driving growth for these companies and collaborative agreements with local players will be the key. Lower-value inventories in international markets are on the rise, so margins could be impacted.

8/28/2013

DCT's Miami Asset 100% Leased - Analyst Blog

DCT Industrial Trust Inc. (DCT), a real estate investment trust (REIT), recently revealed that its development project – DCT Commerce Center at Pan American West – in Miami is 100% leased. Notably, the company completed the construction of the property in Apr 2013.

DCT Commerce Center at Pan American West, which is positioned in the Airport West submarket, comprises 2 buildings spanning 334,000 square feet. The project experienced a huge demand since its course of development.

Prior to the completion of construction, the project was 82% leased. In second-quarter 2013, DCT Industrial inked 2 deals leasing the remaining space at the property, thereby making the property fully occupied.

The above-mentioned move evinces DCT Industrial's expertise in the identification and development of projects with strong growth potential. Moreover, with a larger customer base, an increase in e-Commerce application and supply chain consolidation, the demand for logistics infrastructure and efficient distribution networks has risen. DCT Industrial is poised to benefit from its proficiency in offering modern distribution facilities through acquisitions and development projects in strategic infill locations.

DCT Industrial also has a strong customer base of over 800 industry-leading companies such as ConAgra Foods, Inc. (CAG), Ford Motor Co. (F) and Xerox Corporation (XRX). Such a diversified tenant base provides the company a significant competitive edge over its peers.

DCT Industrial owns, operates and develops high-quality bulk distribution and light industrial properties in high-volume distribution markets in the U.S. and Mexico. As of Mar 31, 2013, the company owned about 74.5 million square feet of properties, including 14.2 million square feet managed on behalf of 4 institutional management partners.

DCT Industrial currently carries a Zacks Rank #2 (Buy).

AT&T Makes One Small Step For Leap

Maybe AT&T (NYSE:T) was insurmountably frustrated in its rumored attempt to buy all or part of Telefonica (NYSE:TEF), or maybe there never was any substance to that rumor. In any case, in lieu of the $150 billion or so that Telefonica would have cost, AT&T's surprising announcement Friday night that it was acquiring Leap Wireless (Nasdaq:LEAP) for $4 billion seems like a much smaller step.

This is a curious deal on multiple fronts. Leap is not a particularly strong company, and it is not as thought AT&T is badly hurting for spectrum. Instead, this may be a case of AT&T flexing its financial muscles to make life harder on its competition (especially T-Mobile (Nasdaq:TMUS) and Sprint (NYSE:S)) and deny this asset to other potential bidders.

SEE: What Makes An M&A Deal Work?

The Bid – Surprising, But Reasonable
AT&T announced that it reached an agreement to acquire Leap Wireless for $1.2 billion in cash, plus the assumption of $2.8 billion in net debt. For that, AT&T is getting spectrum covering approximately 137M POPs, the network assets and retail stores, and about 5 million subscribers. AT&T is also getting Leap's sizable pre-paid business, and I'll have more on this in a moment.

Leap Wireless shareholders will be getting $15 per share in cash from AT&T, but there's more to the deal than that. Once the deal has closed, AT&T will be looking to sell a 700MHz spectrum license in Chicago that it acquired from Verizon (NYSE:VZ) in 2012, and the proceeds will be passed to Leap shareholders through a non-transferable contingent value right. While there could be some challenges in selling this asset (apparently there are interference issues with DirecTV (NYSE:DTV) Channel 51), most analysts are valuing this asset at something in the neighborhood of $2.50 per Leap share.

Out of its own pocket, AT&T is paying about 8x estimated EBITDA for Leap. That's not unreasonable for the spectrum that Leap holds, but it is quite a bit more (100%-plus) than the market was willing to pay for Leap given the company's serious operating issues. In fact, that's arguably the most surprising part of the deal – the general assumption around Leap was that other companies were circling, but waiting for the company to weaken further before making low-ball bids for the spectrum.

Growing The Pre-Paid Business
Leap is all about pre-paid service, and the addition of this company will increase AT&T's prepaid customer base by more than 70%. As such, it definitely adds scale to this part of AT&T's business (which will now be about 10-12% of the business post-deal) and constitutes a real threat to the pre-paid businesses at Sprint and T-Mobile.

That strategic/competitive aspect is likely what is fueling this deal. While it's true that Leap has an under-utilized asset base, I don't believe AT&T is doing this deal because it believes it can produce major synergies from the combination. Rather, this pre-paid business gives the company a new front line for growth in the U.S. market.

This may also be a case of AT&T using its strength to do a deal that others cannot. Given recent transactions, I'm not sure Sprint and T-Mobile will be in a position to make a counterbid for Leap, though either could certainly use the asset. The bigger unknown is the perennial bridesmaid in the game of wireless musical chairs – Dish Network (Nasdaq:DISH). That Leap Wireless is really not the ideal match for Dish Network may run second to the fact that Dish is rapidly running out of options in the U.S. wireless space.

The Bottom Line
AT&T wouldn't have proposed this deal if they didn't believe they could get regulatory clearance, but I'm sure shareholders remember that the company had to abandon its bid for T-Mobile (and pay some hefty break-up fees) when it couldn't satisfy the concerns of regulators. Leap is small enough (and weak enough) that this deal may be more tolerable to regulators, but I wouldn't put the odds of regulatory objections at 0%.

All told, this looks like a relatively low-risk way for AT&T to deploy some capital in the pursuit of growth and a better competitive position. I don't see this deal being transformative for AT&T, but it's a worthwhile opportunity at this price and wouldn't preclude a larger move overseas if the right opportunity should appear.

8/27/2013

No Near-term Catalysts - Ahead of Wall Street

Monday, August 5, 2013

With the Q2 earnings season winding down and nothing major on the economic calendar in the coming days, the stock market may simply be lacking in catalysts. The service sector ISM reading coming out a little later today could be move the needle a bit, but it's not material enough to have any lasting effect, particularly after last week's mixed economic data.

Last week's manufacturing ISM report was very strong, but that was more than offset by Friday's soft jobs report. Not only the headline jobs tally came short of expectations, but the report's internals didn't provide any reassuring signs about economic ramp up either. Average hourly earnings, the work week and revisions to prior months' data were all negative. Even the slide in the unemployment rate was mostly due to more folks leaving the labor force. Importantly, while the report failed to throw up any evidence of improvement in the economy, it wasn't bad enough to stop the Fed from contemplating the 'Taper'.

The way I see it, stocks appear priced for perfection. Investors seem to be hoping that everything – from the economy to corporate earnings and from U.S. interest rates to the international growth backdrop – will continue breaking out in favor of stocks. It has played out that way lately, with stock market investors not losing any sleep over recent the rise in long-term interest rates.

The calculus seems to be that improved economic growth and stronger corporate earnings will offset higher interest rates. But what if we don't get the material uptick in the growth picture, but interest rates keep trending up in anticipation of monetary policy normalization. Nobody wants to contemplate this not-so-implausible scenario at this stage.

Sheraz Mian
Director of Research



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8/26/2013

Can JPMorgan Continue Its Impressive Rally?

JPMorgan has risen from the financial crisis as arguably the strongest megabank. Under the leadership of polarizing CEO Jamie Dimon, the company emerged from the financial crisis far less damaged than its peers. Although the bank has regained stability in the aftermath of the crisis, events like the "London Whale" trading debacle call into question whether the bank has completely eliminated risky banking practices from its operations. Let's use our CHEAT SHEET investing framework to decide whether JPMorgan is an OUTPERFORM, WAIT AND SEE, or STAY AWAY.

C = Catalysts for the Stock's Movement

JPMorgan's stock has climbed significantly in the past year — its uptrend mostly fueled by renewed confidence in the economy and three straight quarters of year-over-year earnings growth. JPMorgan is expected to announce its pivotal second quarter earnings this Friday. These results will most likely make or break JPMorgan's yearlong uptrend.

A strong equities market, including a rebirth of IPOs this year, will bolster profits in JPMorgan's investment banking division, which makes up around 30 percent of its revenues. Mortgage originations, which increased 57 percent year-over-year last quarter, should stay healthy for at least the next two quarters, as new home sales continue to rise. Even with the new Dodd-Frank regulations and the one year anniversary of the “London Fiasco” incident, JPMorgan should be able to exceed analysts’ estimates because of a more attractive equities and real estate market, in addition to its success in reducing expenses over the past few quarters.

E = Earnings Are Increasing Year-over-Year 

JPMorgan has demonstrated strong year-over-year earnings growth in the last several quarters. The bank's earnings growth in the last three quarters has been impressive given that economic uncertainty from the financial crisis still lingers. Revenue growth has been mixed — mostly due to perpetually low interest rates that weaken the bank's ability to make money on lending operations. Interest rates, however, only have one way to move, and that's up. Expect both revenue growth and EPS growth to become more stable as JPMorgan's net interest margin increases as interest rates rise in the future.

2013 Q1 2012 Q4 2012 Q3 2012 Q2 2012 Q1
EPS Growth YoY 33.61% 54.89% 37.25% -4.72% -7.03%
Rev. Growth YoY -3.57% 10.16% 5.82% -17.17% 3.29%

*Data sourced from YCharts

E = Excellent Performance Relative to Its Peers

When comparing forward price to earnings, return on equity, and dividend yield, JPMorgan is the clear frontrunner of the megabanks which include: Citigroup (NYSE:C), Wells Fargo (NYSE:WFC), Bank of America (NYSE:BAC), and Goldman Sachs (NYSE:GS). It has the lowest forward price to earnings multiple of the five, meaning that investors are paying less for a piece of its future earnings relative to the other banks.

Additionally, JPMorgan has the second highest return on equity of the group, a testament to strong management and the bank's ability to generate revenue internally.

Lastly, JPMorgan's dividend yield is the second highest of the group at 2.8 percent—very attractive relative to the industry . The bank has increased its dividends twice since the financial crisis, and at a payout ratio of 21 percent, the company has room to increase its dividend further in the future.

JPM C BAC WFC GS
Forward P/E 9.13 9.16 10.19 10.88 10.13
ROE 11.55% 4.65% 2.14% 13.07% 10.12%
Dividend Yield 2.80% 0.10% 0.30% 2.90% 1.30%

T = Technicals Are Strong

JPMorgan has been on a tear in the past year—up a whopping 59.71%. The stock currently trades at around $54.40, above both its 200-day moving average of $49.36 and its 50-day moving average of $53.45. After hitting a 52-week high of $55.90 at the end of May, the stock retraced back down to $50.92; however, it looks like the company’s stock has regained some upward momentum heading into its second quarter earnings announcement.

Conclusion

JPMorgan is currently the cheapest megabank stock to own, has an attractive dividend at 2.8%, and has posted three consecutive quarters of strong earnings growth. Additionally, the bank currently has a Basel III Tier 1 ratio of 8.9 percent. This ratio examines the bank's core holdings to its risk-weighted assets. Because JPMorgan's Tier 1 is very strong at 8.9 percent, its balance sheet appears healthy enough to limit any major downside risks, barring anymore rogue-trading fiascos. The only real downside risk would be the departure of Jamie Dimon — an event that is not likely in the next several years. Look for JPMorgan to meet analysts' expectations on Friday and continue to perform well throughout the year. JPMorgan is an OUTPERFORM.

8/24/2013

Gen Z on Paying for College, Leaving the Nest

We’re running out of generations—or at least clever tags.

Ranging from age 13 to 22, nearly half of those in Generation Z (yes, Generation Z) say their biggest worry is having a large student loan balance when they graduate college (up from 39% in 2012), and 36% are concerned about being able to afford college at all, according to a recent survey from TD Ameritrade.

The company adds that considering the cost of college has risen more than 1,120% in the last 35 years, it comes as no surprise. But the survey uncovered many more surprising insights into this group of teens and early 20-somethings.

Gen Z Goes to College …

Despite the climbing cost of college tuition, more than half (54%) of those in Gen Z still believe obtaining a higher education is critical to achieving success. And 64% agree that college is worth the cost because it helps secure employment.

The majority of those in Gen Z (72%) expect to attend college or are currently attending college, and despite the large price tag, 61% plan to seek an advanced/graduate degree. Only one in five has considered delaying college due to the expense.

Teens and early 20-somethings seem to understand the importance of saving money. If given $500, a whopping 70% would save at least a portion of it, and 34% would save it specifically for college.

Growing Up and Moving Out

On average, members of Gen Z expect to be living on their own by age 21. But, 63% say they feel welcome to move back in with their parents in the future if they can’t swing it on their own. This young generation appears to have no qualms about moving back home, either. In fact, many see some benefits to living with their parents. Eighty-one percent of those currently living at home after college or planning to do so say it allows them to save money, while nearly half (48%) say it allows them to be selective about employment opportunities.

Parents, fear not. Gen Z doesn’t plan to live at home forever. When asked at what age they would be embarrassed to still be living at home, Gen Z, on average, said age 28. Nearly nine out of 10 (88%) would be embarrassed to still be living at home at 30, and half (49%) would be embarrassed to still be living at home at age 25.

For parents who want to encourage their kids to flee the nest after college, it appears having a job may inspire independence. The survey revealed that Gen Z kids who have had or currently have a job are less likely to move back in with Mom and Dad after college. Those who have never worked are significantly more likely to want to return to live with parents (39% vs. 26%).

First Job Expectations

The bleak job market and high unemployment rates appear to have triggered a sense of pragmatism among Gen Z when it comes to salary expectations. They’re not expecting six figures out of college. Instead, members of Gen Z anticipate a conservative $36,900 annual salary for their first job out of college, compared with the National Association of Colleges and Employers, which said the starting salary for graduates in 2012 is approximately $44,000.Yet, they do expect their income to grow over time and anticipate making $119,000 per year by the time they reach age 60.

For Gen Z, job satisfaction is a priority. Seventy-seven percent say job satisfaction is of equal importance to, if not more important than their salary, and 44% are willing to move almost anywhere for their ideal job (girls are significantly more likely than boys to do so; 49% vs. 41%).

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Check out Gen X and Y Saving Earlier Than Boomers, but Gen Z Is Naïve: TD Ameritrade.

Securities America Boosts Advisor Recruiting

Securities America announced Tuesday that it had hired three regional directors to recruit what it said was a “continuously growing pipeline of prospective advisors” in those regions.

Marc Beekman, 33, is the new regional director for greater New England, including Washington, D.C.; Steve Dripchak, 52, a 30-year industry veteran, is a senior regional director focused on the Northeast, including New York and New Jersey; and Troy Reeder, 38, who has served in various wholesaler roles, will serve as the regional director for the Northwest, stationed in Denver.

“We are pleased to welcome three new recruiters with extensive securities industry experience to the Securities America team,” said John Behn, Securities America national director of branch office development. “All three are local to their sales territory, providing just-in-time personal access to prospective advisors, which will be key to the ongoing growth of the company.”

Beekman began his career as a financial advisor before becoming a wholesaler with Jackson National Life and then Transamerica. Most recently, he was a personal investment officer with BBVA Compass Bancshares.

Dripchak has held various senior sales and relationship positions including the role of vice president of relationship management at National Financial Services. Most recently, he was a vice president at COR Clearing.

Reeder began his career in the securities industry in 2004 as an internal wholesaler for Jackson National Life. He has been in various wholesaler roles representing top insurance carriers and their products for nearly eight years, most recently wholesaling mutual funds to independent advisors.

Raymond James announced July 17 that it had also hired new regional directors to help boost its advisor recruiting efforts.

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Check out Raymond James Taps Wirehouse Talent to Boost Recruiting Team on ThinkAdvisor.

8/19/2013

Find out: Which investor you shouldn't be

Your investment style is an extension of your own personality. A calmer demeanour would most probably have a conservative approach to investing and would choose safer deposits over riskier returns. Their approach would be in stark contrast to the route adopted by the hyper lot who take risks hoping it results in higher returns. And there are also those that are comfortable with striking a balance between risk and return: the moderates.

No matter which style of investing you choose for yourself, there are a few personality traits that are best kept away when managing your money. So, while it is very interesting to note the kind of investor that you are (or could be), it is probably more enlightening to realize the kind of investor that you should never turn into. Here are three types of investors that you should be wary of: (We hope they don�t seem familiar to you!)

The Hoarder

Its one thing to stock up on the best sales in town, but it�s really quite another to pack your house with so much that you probably have to sleep on the porch! That�s precisely the problem with the Hoarder.

Characteristic: He is so carried away with accumulating all possible investment avenues that he simply doesn�t have the time to focus on reviewing his portfolio and is most often stuck with funds that he could do without. His portfolio would probably resemble a sort of supermarket of funds, complete with a section on new launches (NFOs) and cash-backs (Dividend paying funds). On the face of it, the Hoarder might seem like the eternal optimist, clinging on to a fund even when it has repeatedly disappointed over the years. However, do not confuse his lack of reviewing to be optimism. The only real reason that the Hoarder stays with a poor performing fund is because he is too busy adding some more to his portfolio.

Word of Advice: Dear Hoarder, don�t make your investment strategy an end-of-season sale. Remember, the only things that can grow in a hoarded space are Cobwebs. May be its time for you to clean out the closet!

The Bundle of Nerves

The Bundle of Nerves is always looking for the slightest movement in the market to drive him into action, either to add a new fund or to let go of an old one. Keeping his portfolio constant is not his style. And, yes, he keeps his financial advisor on his speed dial.

Characteristic: The Bundle of Nerves doesn�t need caffeine to stimulate him; a minor market fluctuation should do the trick. He believes that �Change� (or rather Churn) is the key to having a successful portfolio. An avid follower of investment shows, stock market predictions and financial channels� minute-by-minute update, the Bundle of Nerves needs to see constant movement in his investments to feel at ease � either by increasing or reducing the number of his funds. The Bundle of Nerves lacks the most important skill in investing: Patience!

Word of Advice: Dear Bundle of Nerves, that uncomfortable, edgy feeling that you go through every time the markets move isn't going anywhere -- until you do something about it. It's time to figure out if the constant changes are worth keeping you up and pacing the floor at all hours. May be it�s time to slow down a little. The next time you think of a portfolio shuffle, count to three. Thousand.

The Sitting Duck

The Sitting Duck is just plain nice! Financial jargon does not make sense to him, and write-ups in financial dailies appear alien, and none of the financial expert columns he wrote to relevantly answered his query, yet he is more worried about not doing enough to be an ideal investor to an omnipotent and benevolent advisor.

Characteristic: The Sitting Duck is excited about investing, and he trusts blindly. Most first time investors believe that their financial advisor or investment guru will have an answer for absolutely everything related to investments. It takes them a while to understand that their advisor too is human, and that it is only human to err. It helps to note that the part in the discussion where the investor is asked for his views on the proposed �get-rich-quick� plan also offers scope for refusal. The Sitting Duck fails to see that a proposal proposes, and that he has the absolute right to dispose of it.

Word of Advice: Dear Sitting Duck, if it feels like you're being cheated and looks like you're being cheated, take it for granted. You are being cheated. Don't let it continue. The next time you sit with your advisor to discuss a new plan, keep your cell phone handy, and have a friend call you. It's up to you to decide whether it's an 'emergency' or 'a wrong number.'

While every individual has different objectives, beliefs and level of knowledge, whatever type of investor you are, we hope you are not a hoarder, a bundle of nerves or a sitting duck. We�ve told you about what type of an investor you should not be, so let�s focus on traits you can follow to become an ideal investor:

- Adopt a long-term perspective when it comes to investing your hard earned savings. Assess your income and the financial goals you would like to achieve, also understand the level of risk you are willing to take.

- Once you have decided the amount you want to invest, and calculated the risk you can take, choose the investment product carefully. Click this link to learn how you can choose a mutual fund.

- If you are investing through an advisor, ensure that he is focused on your financial objectives, and is not trying to work on his goals at your expense. Before you sign the dotted line, make sure to ask your financial advisor some important questions.

- As a long-term investor, you shouldn't panic when your investments experience short-term movements. When tracking the activities of your investments, you should look at the big picture instead of small hurdles.

- And most importantly, remember that there are many ways to be successful and no one strategy is inherently better than any other. However, once you find your style, stick with it.

There are exceptions to every rule, but we hope that these tips and common-sense principles we've discussed do benefit you. We�ll cover more on how you can become an ideal investor in our upcoming articles. Remember, just as your personality reflects in your investment style, the success of your investments would reflect in your lifestyle. Be a confident, sensible and long term investor.

Happy Investing!

Disclaimer: The data/information in this article is meant for general reading purpose only and not meant to serve as a professional guide / investment advice for readers. This article has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Whilst no action has been suggested or offered based upon the information provided herein, due care has been taken to endeavor that the facts are accurate and reasonable as on date. Readers are advised to seek independent professional advice and arrive at an informed investment decision before making any investments. None of The Sponsor, The Investment Manager, The Trustee, their respective directors, employees, affiliates or representatives shall be liable for any direct, indirect, special, incidental, consequential, punitive or exemplary damages, including lost profits in any way from the data / information / opinions contained in this article.

Mutual Fund investments are subjected to market risk. Please read the Scheme information document and Statement of Additional Information carefully before investing.

8/18/2013

5 Highest Yielding Zacks #1 Ranked International Bond ...

For the average investor, high yield mutual funds are the best method to invest in bonds rated below investment grade, popularly known as junk bonds. This is because these funds hold a wide range of such securities, significantly reducing portfolio risk. In addition, these funds provide better returns than investments with higher ratings, including government and corporate bonds. Further, because the yield from such bonds is higher than investment grade securities, these investments are less susceptible to interest rate fluctuations.

Below we will share with you the 5 highest yielding Zacks #1 ranked international bond mutual funds. Each has earned a Zacks #1 Rank (Strong Buy) as we expect these mutual funds to outperform their peers in the future. To view the Zacks Rank and past performance of all international bond funds, investors can click here to see the complete list of funds.

Mutual Fund

Sec 30 Day Yield

Franklin Templeton Emerging Market Debt Opportunities

5.35%

GMO Emerging Country Debt IV

5.11%

PIMCO Emerging Local Bond A

2.7%

GMO Currency Hedged International Bond III

1.24%

PIMCO Developing Local Markets

0.55%

Franklin Templeton Emerging Market Debt Opportunities (FEMDX) seeks appreciably high total return. The fund invests the majority of its assets in emerging market debt securities. It may invest substantially all of its assets in debt securities rated below investment grade. The international bond mutual fund returned 14.28% in the last one year period.

The international bond mutual fund has an expen! se ratio of 1.00% compared to a category average of 1.25%.

GMO Emerging Country Debt IV (GMDFX) invests in order to attain returns higher than its benchmark the J.P. Morgan EMBI Global index. To achieve these returns, the fund invests in sovereign and quasi sovereign debt instruments issued by emerging countries. The international bond mutual fund returned 19.68% in the last one year period.

As of February 2013, this international bond mutual fund held 167 issues, with 5.53% of its total assets invested in Bolivarian Republic Venezuela 11.95%.

PIMCO Emerging Local Bond A (PEBLX) invests a large proportion of its assets in fixed income securities denominated in currencies of emerging markets. The fund may purchase both investment grade securities and junk bonds. However, not more than 15% of its assets may be invested in securities with ratings below 'B'. The international bond mutual fund returned 16.72% in the last one year period.

The Fund Manager is Michael A. Gomez and he has managed this international bond mutual fund since 2006.

GMO Currency Hedged International Bond III (GMHBX) invests a large proportion of its assets in bonds. The fund focuses on attaining returns higher than the J.P. Morgan Non-U.S. Government Bond (Hedged) (ex-Japan) Index. The international bond mutual fund has returned 9.81% in the last one year period.

The international bond mutual fund has an expense ratio of 0.39% compared to a category average of 1.10%.

PIMCO Developing Local Markets (PLMAX) seeks total return. A majority of its assets is invested in fixed income instruments including those issued from emerging markets. The international bond mutual fund returned 10.24% in the last one year period.

The Fund Manager is Michael A. Gomez and he has managed this international bond mutual fund since 2005.

To view the Zacks Rank and past performance of all international bond mutual funds, investors can click here to see the complete list of funds.
About ! Zacks Mutual Fund Rank

By applying the Zacks Rank to mutual funds, investors can find funds that not only outpaced the market in the past but are also expected to outperform going forward. Learn more about the Zacks Mutual Fund Rank at http://www.zacks.com/funds.

8/17/2013

WisdomTree Adds Emerging Markets (DGRE) Exposure To ...

Stocks enjoyed another week in green territory as upbeat economic data and no new tapering hints from the Fed gave investors few reasons to cut off winning positions. The product development front was quite active considering the fairly muted trading week on Wall Street; new additions to the ETF universe include the Nashville Area ETF, marking the first ever city-focused product launch, as well as the innovative Risk-Weighted ETF from VelocityShares, which looks to offer a twist on traditional cap-weighted and low volatility strategies . 

WisdomTree continues to expand its lineup of dividend-growth focused strategies with its launch of the Emerging Markets Dividend Growth Fund on August 1st. 

DGRE: Where Growth & Value Investing Meet

This new ETF offers a compelling twist on an age old strategy; DGRE provides exposure to dividend-paying stocks in emerging markets that also exhibit growth characteristics, allowing for investors to enjoy both a stream of current income as well as the potential for attractive capital appreciation. This ETF is uniquely positioned to take advantage of developing economies by focusing on stocks that offer the stability associated with dividend-paying securities while at the same time boasting growth characteristics that appeal to those in it for the long-haul . 

Unlike most dividend ETFs out there that focus either on consistency of payouts or yield, DGRE actually targets the companies with high dividend-growth potential; this ETF essentially allows investors to favorably position themselves in anticipation of rising dividends as well as capital appreciation in the emerging markets asset class. From a portfolio composition perspective, DGRE avoids some of the biases that most Emerging Markets ETFs are prone to. Most notably, this ETF is not tilted towards the BRIC countries, instead it has more meaningful allocations in companies from Mexico, Indonesia, and Thailand. 

Meet The CompetitionDGRE will face some stiff competition from mo! re established funds in the emerging markets space, including:

Vanguard FTSE Emerging Markets ETF with $50 billion in AUMiShares MSCI Emerging Markets Index Fund with over $35 billion in AUMThe new WisdomTree ETF charges 0.63% in annual expense fees and warrants a closer look from anyone wanting to add emerging markets exposure to their portfolio's equity component; investors who pick this ETF don't have to decide between a value- or growth-oriented strategy because it strives to bundle the best of both worlds in one ticker. 

Follow me on Twitter @SBojinov



Disclosure: No positions at time of writing



Bull of the Day: HEICO Corp (HEI) - Bull of the Day

Remember when the Fiscal Cliff was going to destroy defense-related stocks? That was so 40% ago, as my chart below shows comparing the iShares Dow Jones Aerospace & Defense index ETF (ITA) vs. the S&P 500 for the past year.

One year ago, Lockheed Martin CEO Robert Stevens told a House committee that deep Pentagon cuts slated to kick in January 2, 2012 would force his firm and others to fire employees and close factories. It was expected that those moves would hinder U.S. national security, erode defense firms' bench of highly skilled workers, and, of course, cut into weapons-makers' bottom lines.

But the blows never came. In fact, with big guns like Boeing (BA), Lockheed Martin (LMT), and Northrop Grumman (NOC), the ITA really took off in the past 5 weeks...

This group has consistently been in the top 20% of the 265 industries ranked by Zacks, since before the election last fall. Given this outperformance, I was drawn to looking at one of the sub-industries of the Aerospace/Defense sector which currently ranks 24th of 265.

A&D Equipment Makers

It makes sense that the suppliers of equipment to large Aerospace & Defense (A&D) companies would be doing well. I looked at these 3 Zacks #1 Rank stocks in the group:

Orbital Sciences (ORB) is a leading space technology systems company that designs, manufactures, operates and markets a broad range of space-related products and services.

Astronics Corporation (ATRO) is a manufacturer of specialized lighting and electronics for the cockpit, cabin and exteriors of military, commercial transport and private business jet aircraft.

HEICO Corporation (HEI) is engaged primarily in certain niche segments of the aviation, defense, space and electronics industries. HEICO's customers include a majority of the world's airlines and airmotives as well as numerous defense and space contractors and military! agencies worldwide in addition to telecommunications, electronics and medical equipment manufacturers.

I picked HEICO for "Bull of the Day" for two reasons. First, I like their projected earnings and sales growth of 19% and 13% respectively.

Secondly, I like the fact they have a diverse mix of products, target markets, and customers, beyond A&D. In other words, commercial and general aviation, not just the space program or the military. They even serve computer, electronics, and healthcare markets.

On May 22, the $2.9 billion company reported strong quarterly results and raised guidance. In the chart below, you can see the resulting breakout above $47 on strong volume.

On May 24, upward EPS estimate revisions from analysts caused HEI to become a Zacks #2 Rank (Buy). On June 27, when HEI was still trading below $51, it became a Zacks #1 Rank (Strong Buy).

Head-to-Head on All the Metrics

One great resource in the Zacks Premium tools is the ability to compare industry peers on dozens of fundamental metrics. Here's a snapshot of these 3 companies from the Earnings view...

What stands out is that HEICO is more expensive on a valuation basis. But if the global trends of commercial aviation expansion continue to favor the fortunes of companies like Boeing, HEICO should be along for the flight.

But, what about that Boeing 787 fire at Heathrow on Friday? We'll get to that in a moment.

Here is how HEICO structures itself in two primary business segments...

The Flight Support group designs, engineers, manufactures, repairs, distributes and overhauls FAA-approved parts that extend over the entire aircraft, from the engines all the way to hydraulic, pneumatic, electromechanical, avionic, structures, wheels and brakes and even int! eriors.

The Electronic Technologies group produces electrical and electro-optical systems and components serving niche segments of the aerospace, defense, communications, and computer industries.

Boeing 787 Woes: Where There's Smoke...

This week should be an interesting one for many of these A&D stocks after the damage to Boeing shares on Friday. A 787 runway fire at London's Heathrow airport sent the stock down over $8 (7.5%) in less than 20 minutes on the news.

But BA shares bounced off of $99 to close just below $102, down only $5 (4.7%). Not terrible considering it just made new all-time highs Friday above $108, eclipsing the record highs set in July 2007 above that mark.

The good news for HEI shares is that they only fell 1% and are still within 1% of their closing all-time high just below $55. Going forward, I would trade any of these A&D equipment makers in tandem with their large-cap A&D customers.

In other words, as the big guns of the sector go, so go the suppliers. Right now, I like HEI the best for its sold growth, diverse products and customers, and a strong price chart.

If Boeing can put out their fires, HEICO should be a good wing man.

Kevin Cook is a Senior Stock Strategist with Zacks.com

8/16/2013

Oceaneering Is A Great Business, But How Much Are You ...

When it comes to equipment and services in the energy space, "strong market share" is usually pretty relative. In many markets, a company is doing very well if it can get 25% or one-third of a market to themselves, which makes Oceaneering International's (NYSE:OII) nearly 60% share of the deepwater rig support market pretty significant.

What's more, this is not just a "market share at any cost" story, as the company has a pretty remarkable record of consistent operating margin and ROIC performance despite the vagaries of the deepwater energy market. The problem for investors is in figuring out what constitutes a fair multiple for all of these positives.

SEE: Oil And Gas Industry Primer

A Strong ROV Fleet Leads The Way
Oceaneering operates a fleet of nearly 300 ROV vehicles, which is the largest fleet out there insofar as I can tell. These ROVs are useful in a wide range of tasks, including visual inspection, repair, and equipment installation, and in many cases are essential to a deepwater operation. About three-quarters of this fleet is used to support deepwater drilling and production platforms, while the remainder is used in the construction and field maintenance activities of companies like Saipem and Tidewater (NYSE:TDW).

Oceaneering is one of the relatively few companies to both manufacture and operate ROVs, and it costs about $5 million to build a new one (for a useful life of about eight years). Having the means to build an ROV is not really the relevant factor in this business, though, as the ability to operate them effectively and get the job done is paramount. To that end, Oceaneering enjoys close to 60% share across the floater fleet and close to 80% share in the deepwater and ultra-deepwater operations, with Saipem and Helix Energy (NYSE:HLX) among the very few publicly-traded rivals of any size.

It's Not All About ROVs, Though
While Oceaneering has an excellent business with its ROV operations, that's only about half of what the company does. Another significant part of the company's operations involve subsea products and projects – providing products like umbilicals and the installation of the undersea hardware (trees, valves, connectors, blowout preventers, and so on) made by companies like FMC Technologies (NYSE:FTI) and General Electric (NYSE:GE).

Oceaneering also has substantial operations in "asset integrity" and "advanced technologies" - businesses that involve improving safety and reliability for energy companies and special services for clients ranging from the U.S. Navy to NASA to water theme park operators.

Tied To The Right Trends
With it strong share and limited competition, Oceaneering looks like a near-certain winner in this building offshore cycle. Whether an E&P company goes with Transcoean (NYSE:RIG) or Seadrill (Nasdaq:SDRL) for a deepwater drilling project, there's a good chance Oceaneering gets the call to support its with its ROVs. Whether a company goes with GE's subsea trees or those from Aker, there's a good chance that Oceaneering will install them. That's a good place for any company to be, and I like the odds that Oceaneering will see a significant pick up in activity over the next few years.

The Bottom Line
The only real issue with the story is that none of this is a secret. Analysts and investors know all about the company's strong share in its targeted markets, as well as the significant awards that have been made for offshore drilling and production projects. Likewise, it's no secret that Oceaneering has registered some rather remarkably consistent financial results over the years.

So what is all of that worth? On the whole, it's pretty rare to see an energy services company support an EV/EBITDA multiple above 9x until well into the cycle, and that would only suggest a fair value in the mid-$60s today. While I think you can argue that Oceaneering is as deserving of a premium valuation as any service company (particularly in the offshore space), I think a lot of the benefits of the coming offshore cycle are in this stock and I'd wait for a pullback before making a major purchase.

Hunstman to Buy U.S. Polyols Maker - Analyst Blog

Chemical company Huntsman Corporation (HUN) has agreed to buy privately-held specialty urethane polyols maker Oxid L.P. for an undisclosed price.

Tex.-based Oxid, which has annual sales of $86 million, makes specialty chemical products for the urethane industry. The entity markets its diverse product line of specialty polyols under the Terol moniker and distributes products globally from its manufacturing plant in Houston.

Polyols made by Oxid represent a major component in the manufacturing of energy saving polyurethane insulation products used in residential and commercial construction. They are integrated with methylene diphenyl diisocyanate (MDI) to create polyurethane foam insulation for a range of applications. Huntsman's Polyurethanes division is a leading producer of MDI-based polyurethanes.

The acquisition, which is expected to consummate during the third quarter, is expected to be immediately accretive to Huntsman's earnings. The addition of Oxid's Terol specialty polyols to Huntsman's MDI product range will enhance the latter's offerings to the key downstream insulation markets in North America and usher in fresh opportunities globally.

With the U.S. housing and construction markets gathering steam, Huntsman seeks to leverage the significant benefits of MDI polyurethanes insulation. Oxid acquisition is expected to reinforce its position and offer healthy market and technology synergies.

Huntsman, which has annual sales of more than $11 billion, makes differentiated chemicals. Its makes products for an array of industries including chemicals, plastics, automotive, aviation, textiles, paints and coatings, construction, technology, agriculture, health care, appliances and packaging.

Huntsman, in Mar 2013, bought a 20% stake in Japan-based spray polyurethane foam insulation company Nippon Aqua Co. Ltd. Nippon Aqua is the market leader in spray polyurethane foam insulation in Japan. Huntsman supplie! s a number of advanced MDI-based polyurethanes systems to Nippon Aqua.

The investment in Nippon Aqua will allow Huntsman to address the significant need for more effective insulation in Japan following the Fukushima Daiichi nuclear plant disaster in 2011.

Huntsman currently carries a short-term (1 to 3 months) Zacks Rank #4 (Sell).

Other companies in the chemical space having favorable Zacks Rank include Arkema S.A. (ARKAY), Cytec Industries Inc. (CYT) and PPG Industries Inc. (PPG). All of them retain a Zacks Rank #2 (Buy).

Here are investment options for young career oriented women

In an interview to CNBC-TV18 he said that they should keep one month's contingency reserve and also purchase a personal health insurance. "Ideally get into an investment or get into an asset class which is liquid and divisible," he further added.

Below is the edited script of his interview with CNBC-TV18"s Latha Ventakesh and Reema Tendulkar

Q: Over the past many years we have seen several young unmarried women getting into a career and are earning a good salary. What would you advice all these young women who are earning money, where should they be investing their income?

A: There are a few things they should keep in mind. They have no dependents i.e they could be living with their family, their own parents, so there aren't any family expenses they need to incur. At such times, they should be taking some basic steps first and then the intense ones.

First they should keep aside one month's contingency reserve. Whatever is their personal expense, they should keep that aside. Secondly, if their employer is not providing health insurance they then can purchase health insurance on their own.

Apart from that, if they have taken any loan - education loan or loan taken to pursue professional courses before starting their career then they may want to utilize this excess money to get rid of that loan as soon as possible.

As far as the intense steps are concerned, they can start considering investments. It so happens that many of these young women get into a situation whereby they straightaway jump into buying immovable property like real estate etc. I would encourage them to refrain from that because chances are that after marriage they may migrate to some other city, country and then that piece of real estate has to managed by their their parents.

They should pick up movable properties. Since there are no immediate goals they can look at gold, equity as an asset class. They can do it directly or choose mutual fund as a vehicle to put into these.

Many times it has been observed that either the father or brother is managing their finance and they trust them with it, which is fine, but they should also start taking interest in it. So, once they are married, they will be able to handle the wealth that has been created on their own or along with their spouse.

Otherwise, this entire investment is in their name, but it is the father who has been managing it and then when they get married, the transition becomes difficult. These are the few things they should keep in mind.

Q: I am a media professional living with my parents and drawing a comfortable salary. A large part of my salary is saved, so should I invest it in real estate or is investing in property a no-no?

A: From an asset class perspective, real estate is growth oriented. Over a longer period of time, it will grow well. What happens is that after marriage, if you have to migrate to another city then the entire maintenance of the property like the payment of property tax and if one has tenants - collection of rent etc becomes the parent's responsibility and then one may want to consider whether she wants to get into it or not.

After marriage, you may want to share financial responsibilities along with your husband and for that you need liquidity. You may want to buy another house, but there can be a case where you have already taken a loan on the first one. So, ideally get into an investment or asset class which is liquid and divisible.

If it is real estate and you need just portion of money then one can't liquidate half of that real estate or the house. One has to liquidate the entire property. So because of illiquidity and indivisibility, I normally don't encourage investing in real estate.

Having said that, if those are not the concerns, then by all means pick up real estate because there are no dependents or financial commitments. Hence you may want to look at real estate from a long-term perspective. But look at these practical difficulties, consider them and then take an optimum call.

8/15/2013

Top Insurance Companies To Own For 2014

It wasn't a volatile week on Wall Street, but stocks did end the week at another record high, continuing a long bull run. The Dow Jones Industrial Average (DJINDICES: ^DJI  ) was up 0.97% for the week, and the S&P 500 (SNPINDEX: ^GSPC  ) gained 1.19%. Both indexes ended to week at record closing levels.

UnitedHealth Group (NYSE: UNH  ) was up 6.8% this week to lead the Dow. On Monday, an analyst projected that United Health would be able to grow Medicare Advantage enrollment despite reimbursement cuts. After concerns about government cuts hit health-care companies in early 2013, there's now growing understanding that Obamacare or cuts to Medicare won't slash profits. One of the reasons is the insurance lobby, which has been able to bend policy to make sure companies like UnitedHealth are still posting solid profits. ��

Top Insurance Companies To Own For 2014: Berkshire Hathaway Inc (BRKB)

Berkshire Hathaway Inc. (Berkshire), incorporated on June 16, 1998, is a holding company owning subsidiaries engaged in a number of diverse business activities. The Company is engaged in the insurance businesses conducted on both a primary basis and a reinsurance basis, a freight rail transportation business and a group of utility, and energy generation and distribution businesses. Berkshire also owns and operates a number of other businesses engaged in a variety of activities. In October 2012, HomeServices acquired a 66.7% interest in the residential real estate brokerage franchise network in the United States. In May 2013, Berkshire acquired the remaining 20% stake in IMC International Metalworking Companies BV.

Insurance and Reinsurance Businesses

Berkshire�� insurance and reinsurance business activities are conducted through numerous domestic and foreign-based insurance entities. Berkshire�� insurance businesses provide insurance and reinsurance of property and casualty risks worldwide and also reinsure life, accident and health risks worldwide. The Company�� insurance underwriting operations are consisted of the sub-groups, including GEICO and its subsidiaries, General Re and its subsidiaries, Berkshire Hathaway Reinsurance Group and Berkshire Hathaway Primary Group. GEICO insurance subsidiaries include Government Employees Insurance Company, GEICO General Insurance Company, GEICO Indemnity Company, GEICO Casualty Company, GEICO Advantage Insurance Company, GEICO Choice Insurance Company and GEICO Secure Insurance Company. These companies primarily offers private passenger automobile insurance to individuals in all 50 states and the District of Columbia. In addition, GEICO insures motorcycles, all-terrain vehicles, recreational vehicles and small commercial fleets and acts as an agent for other insurers who offer homeowners, boat and life insurance to individuals. GEICO markets its policies primarily through direct response methods in which applications for insura! nce are submitted directly to the companies via the Internet or by telephone.

General Re Corporation (General Re) is the holding company of General Reinsurance Corporation (GRC) and its subsidiaries and affiliates. GRC�� subsidiaries include General Reinsurance AG, an international reinsurer based in Germany. General Re subsidiaries conduct business activities globally in 51 cities and provide insurance and reinsurance coverages throughout the world. General Re provides property/casualty insurance and reinsurance, life/health reinsurance and other reinsurance intermediary and risk management, underwriting management and investment management services.

Property/Casualty Reinsurance

General Re�� property/casualty reinsurance business in North America is conducted through GRC. Property/casualty operations in North America are also conducted through 16 branch offices in the United States and Canada. Reinsurance activities are marketed directly to clients without involving a broker or intermediary. General Re�� property/casualty business in North America also includes specialty insurers (primarily the General Star and Genesis companies). These specialty insurers underwrite primarily liability and workers��compensation coverages on an excess and surplus basis and excess insurance for self-insured programs. General Re�� international property/casualty reinsurance business operations are conducted through internationally-based subsidiaries on a direct basis (through General Reinsurance AG, as well as several other General Re subsidiaries in 23 countries) and through brokers (primarily through Faraday, which owns the managing agent of Syndicate 435 at Lloyd�� of London and provides capacity and participates in 100% of the results of Syndicate 435).

Life/Health Reinsurance

General Re�� North American and international life, health, long-term care and disability reinsurance coverages are written on an individual and group basis. Most! of this ! business is written on a proportional treaty basis, with the exception of the United States group health and disability business, which is predominately written on an excess treaty basis. Lesser amounts of life and disability business are written on a facultative basis. The life/health business is marketed on a direct basis.

The Berkshire Hathaway Reinsurance Group (BHRG) operates from offices located in Stamford, Connecticut. Business activities are conducted through a group of subsidiary companies, led by National Indemnity Company (NICO) and Columbia Insurance Company (Columbia). BHRG provides principally excess and quota-share reinsurance to other property and casualty insurers and reinsurers. BHRG�� underwriting activities also include life reinsurance and life annuity business written through Berkshire Hathaway Life Insurance Company of Nebraska and financial guaranty insurance written through Berkshire Hathaway Assurance Corporation.

BHRG writes catastrophe excess-of-loss treaty reinsurance contracts. BHRG also writes individual policies for primarily large or otherwise unusual discrete risks on both an excess direct and facultative reinsurance basis, referred to as individual risk, which includes policies covering terrorism, natural catastrophe and aviation risks. A catastrophe excess policy provides protection to the counterparty from the accumulation of primarily property losses arising from a single loss event or series of related events. Catastrophe and individual risk policies may provide amounts of indemnification per contract and a single loss event may produce losses under a number of contracts. BHRG also underwrites traditional non-catastrophe insurance and reinsurance coverages, referred to as multi-line property/casualty business.

The Berkshire Hathaway Primary Group is a collection of primary insurance operations that provide a range of insurance coverages to insureds located principally in the United States. NICO and certain affiliates underw! rite moto! r vehicle and general liability insurance to commercial enterprises on both an admitted and excess and surplus basis. This business is written nationwide primarily through insurance agents and brokers and is based in Omaha, Nebraska. U.S. Investment Corporation (USIC), through its four subsidiaries led by United States Liability Insurance Company, is a specialty insurer that underwrites commercial, professional and personal lines of insurance on an admitted and excess and surplus basis. Policies are marketed in all 50 states and the District of Columbia through wholesale and retail insurance agents. USIC companies underwrite and market 110 distinct specialty property and casualty insurance products. Medical Protective Corporation (MedPro) is based in Fort Wayne, Indiana. MedPro offers products and solutions through its subsidiaries, The Medical Protective Company and Princeton Insurance Company and is a primary healthcare malpractice insurance coverage and patient safety solutions to physicians, dentists, other healthcare providers and healthcare facilities. Other insurance operations include the Berkshire Hathaway Homestate Companies (BHHC), a group of six insurance companies that primarily offers standalone workers��compensation, commercial auto and commercial property coverages.

Railroad Business

Through Burlington Northern Santa Fe, LLC (BNSF) Railway, BNSF operates a railroad network in North America with approximately BNSF operates a railroad network in North America with approximately 32,500 route miles of track (excluding multiple main tracks, yard tracks and sidings) in 28 states and two Canadian provinces as of December 31, 2012. BNSF owns approximately 23,000 route miles, including easements, and operates on approximately 9,500 route miles of trackage rights that permit BNSF to operate its trains with its crews over other railroads��tracks. As of December 31, 2012, the total BNSF Railway system, including single and multiple main tracks, yard tracks and sidings,! consiste! d of approximately 50,500 operated miles of track, all of which are owned by or held under easement by BNSF except for approximately 10,500 miles operated under trackage rights.

BNSF is based in Fort Worth, Texas, and through BNSF Railway Company operates railroad systems in North America. In serving the Midwest, Pacific Northwest, Western, Southwestern and Southeastern regions and ports of the country, BNSF transports a range of products and commodities derived from manufacturing, agricultural and natural resource industries. Over half of the freight revenues of BNSF are covered by contractual agreements of varying durations. BNSF�� primary routes, including trackage rights, allow it to access major cities and ports in the western and southern United States, as well as parts of Canada and Mexico.

Utilities and Energy Businesses

MidAmerican�� businesses are managed as separate operating units. MidAmerican�� domestic regulated energy interests are consisted of two regulated utility companies serving more than three million retail customers, two interstate natural gas pipeline companies with approximately 16,600 miles of pipeline and a design capacity of approximately 7.7 billion cubic feet of natural gas per day and a 50% interest in electric transmission businesses. Its Great Britain electricity distribution subsidiaries serve about 3.9 million electricity end-users. In addition, MidAmerican�� interests include a diversified portfolio of domestic independent power projects, a hydroelectric facility in the Philippines, the residential real estate brokerage firm in the United States and the residential real estate brokerage franchise network in the United States.

PacifiCorp is a regulated electric utility company, serving regulated retail electric customers in portions of Utah, Oregon, Wyoming, Washington, Idaho and California. The combined service territory�� diverse regional economy ranges from rural, agricultural and mining areas to urban,! manufact! uring and government service centers. As a vertically integrated electric utility, PacifiCorp owns approximately 10,600 net megawatts (MW) of generation capacity.

MidAmerican Energy Company (MEC) is a regulated electric and natural gas utility company, serving regulated retail electric and natural gas customers primarily in Iowa and also in portions of Illinois, South Dakota and Nebraska. MEC has a diverse customer base consisting of urban and rural residential customers and a range of commercial and industrial customers. In addition to retail sales and natural gas transportation, MEC sells regulated electricity principally to markets operated by regional transmission organizations and regulated natural gas to other utilities and market participants on a wholesale basis and sells non-regulated electricity and natural gas services in deregulated markets. As a vertically integrated electric and gas utility, MEC owns approximately 7,400 net megawatts of generation capacity.

The natural gas pipelines consist of Northern Natural Gas Company (Northern Natural) and Kern River Gas Transmission Company (Kern River). Northern Natural is based in Nebraska and owns interstate natural gas pipeline system in the United States reaching from southern Texas to Michigan�� Upper Peninsula. Northern Natural�� pipeline system consists of approximately 14,900 miles of natural gas pipelines. Northern Natural also operates three underground natural gas storage facilities and two liquefied natural gas storage peaking units.

Kern River is based in Utah and owns an interstate natural gas pipeline system that consists of approximately 1,700 miles and extends from supply areas in the Rocky Mountains to consuming markets in Utah, Nevada and California. Kern River transports natural gas for electric utilities and natural gas distribution utilities, major oil and natural gas companies or affiliates of such companies, electricity generating companies, energy marketing and trading companies, a! nd financ! ial institutions. The Great Britain utilities consist of Northern Powergrid (Northeast) Limited (Northern Powergrid (Northeast)) and Northern Powergrid (Yorkshire) plc (Northern Powergrid (Yorkshire)), which own a substantial Great Britain electricity distribution network that delivers electricity to end-users in northeast England in an area covering approximately 10,000 square miles. The distribution companies primarily charge supply companies regulated tariffs for the use of electrical infrastructure. MidAmerican also owns HomeServices of America, Inc. (HomeServices), a full-service residential real estate brokerage firm in the United States. HomeServices offers integrated real estate services, including mortgage originations and mortgage banking primarily through joint ventures, title and closing services, property and casualty insurance, home warranties, relocation services and other home-related services. It operates under 27 residential real estate brand names with over 16,000 sales agents and in nearly 375 brokerage offices in 21 states.

Manufacturing, Service and Retailing Businesses

Berkshire�� numerous and diverse manufacturing, service and retailing businesses. Marmon Holdings, Inc. (Marmon) consists of approximately 140 manufacturing and service businesses that operate independently within 11 diverse business sectors. These sectors are distribution services, electrical and plumbing products, industrial products, crane services, engineered wire and cable, transportation services and engineered products, food service equipment, highway technologies, retail home improvement products, retail store fixtures, and water treatment.

Distribution Services supplies specialty metal pipe and tubing, bar and sheet products to markets, including construction, industrial, aerospace and many others. Electrical and Plumbing Products is engaged in the distribution, supplying electrical building wire primarily for residential and commercial construction, and copper tube for th! e plumbin! g, heating, ventilation, and air conditioning (HVAC), refrigeration and industrial markets, through the wholesale channel. Industrial Products consists of metal fasteners and fastener coatings for the construction, industrial and other markets, gloves for industrial markets, portable lighting equipment for mining and safety markets, overhead electrification equipment for mass transit systems, custom-machined aluminum and brass forgings for the construction, energy, recreation and other industries, brass fittings and valves for commercial and industrial applications, and drawn aluminum tubing and extruded aluminum shapes for the construction, automotive, appliance, medical and other markets.

Crane Services is engaged in providing the leasing and operation of mobile cranes primarily to the energy, mining and petrochemical markets. Engineered Wire and Cable is engaged in supplying electrical and electronic wire and cable for energy related markets and other industries. Transportation Services and Engineered Products includes manufacturing, leasing and maintenance of railroad tank cars, leasing of intermodal tank containers, in-plant rail services, manufacturing of bi-modal railcar movers, wheel, axle and gear sets for light rail transit and gear products for locomotives, manufacturing of steel tank heads, and services, equipment and technology for processing and distributing sulfur.

Food Service Equipment is engaged in supplying commercial food preparation equipment for restaurants and shopping carts for retail stores. Highway Technologies primarily serve the heavy-duty highway transportation industry with trailers, fifth wheel coupling devices and undercarriage products, such as brake parts and suspension systems, and also serving the light vehicle aftermarket with clutches and related products. Retail Home Improvement Products is engaged in supplying electrical and plumbing products through the home center channel. Retail Store Fixtures provides shelving systems, other merchandising di! splays an! d related services for retail stores, as well as work and garden gloves sold at retail. Water Treatment includes residential water softening, purification and refrigeration filtration systems, treatment systems for industrial markets including power generation, oil and gas, chemical, and pulp and paper, gear drives for irrigation systems and cooling towers, and air-cooled heat exchangers.

McLane Company, Inc. (McLane) provides wholesale distribution and logistics services in all 50 states and internationally in Brazil to customers that include convenience stores, discount retailers, wholesale clubs, drug stores, military bases, quick service restaurants and casual dining restaurants. Operations include grocery distribution, foodservice distribution, beverage distribution, international logistics and software development. McLane�� foodservice distribution unit, based in Carrollton, Texas, focuses on serving the quick service restaurant industry. Operations are conducted through 18 facilities in 16 states. The foodservice distribution unit services more than 19,000 chain restaurants nationwide.

Other Manufacturing, Other Service and Retailing Businesses

Berkshire�� apparel manufacturing businesses include manufacturers of a range of clothing and footwear. Businesses engaged in the manufacture and distribution of clothing products include Fruit of the Loom, Inc. (Fruit), Russell Brands, LLC (Russell), Vanity Fair Brands, LP (VFB), Garan and Fechheimer Brothers. Berkshire�� footwear businesses include H.H. Brown Shoe Group, Justin Brands and Brooks Sports. Fruit, Russell and VFB (together FOL) is primarily a vertically integrated manufacturer and distributor of basic apparel, underwear and athletic apparel and products. Products, under the Fruit of the Loom and JERZEES labels are primarily sold in the mass merchandise and wholesale markets. In the VFB product line, Vassarette, Bestform and Curvation are sold in the mass merchandise market, while Vanity Fair and! Lily of ! France products are sold in the mid-tier chains and department stores. FOL also markets and sells athletic uniforms, apparel, sports equipment and balls to team dealers; college licensed tee shirts and fleecewear to college bookstores and mid-tier merchants; and athletic apparel, sports equipment and balls to sporting goods retailers under the Russell Athletic and Spalding brands. Additionally, Spalding markets and sells balls in the mass merchandise market and dollar store channels.

Garan designs, manufactures, imports and sells apparel primarily for children, including boys, girls, toddlers and infants. Products are sold under its own trademark Garanimals and private labels of its customers. Garan also licenses its registered trademark Garanimals to independent third parties. Garan conducts its business through operating subsidiaries located in the United States, Central America and Asia. Fechheimer Brothers manufactures, distributes and sells uniforms, principally for the public service and safety markets, including police, fire, postal and military markets. Fechheimer Brothers is based in Cincinnati, Ohio.

Justin Brands and H.H. Brown Shoe Group manufacture and distribute work, rugged outdoor and casual shoes and western-style footwear under a number of brand names, including Justin, Tony Lama, Nocona, Chippewa, Carolina, Sofft, Double-H Boots, Eurosoft, and Softspots. Acme Building Brands (Acme) manufactures and distributes clay bricks (Acme Brick and Jenkins Brick), concrete block (Featherlite) and cut limestone (Texas Quarries). In addition, Acme distributes a range of other building products of other manufacturers, including glass block, floor and wall tile, wood flooring and other masonry products. Acme also sells ceramic floor and wall tile, as well as marble, granite and other stones through its subsidiary, American Tile and Stone. Benjamin Moore & Co. (Benjamin Moore) is a formulator, manufacturer and retailer of a range of architectural coatings, available principa! lly in th! e United States and Canada. Products include water-thinnable and solvent-thinnable general purpose coatings (paints, stains and clear finishes) for use by the general public, contractors and industrial and commercial users. Products are marketed under various registered brand names, including Regal, Super Spec, MoorGard, Aura, Nattura, ben, Coronado, Insl-x and Lenmar.

Johns Manville (JM) is a manufacturer and marketer of products for building insulation, mechanical insulation, commercial roofing and roof insulation, as well as fibers and nonwovens for commercial, industrial and residential applications. JM serves markets that include aerospace, automotive and transportation, air handling, appliance, HVAC, pipe insulation, filtration, waterproofing, building, flooring, interiors and wind energy. The Shaw Industries Group, Inc. (Shaw) is a carpet manufacturer based on both revenue and volume of production. Shaw designs and manufactures over 3,000 styles of tufted carpet, tufted and woven rugs, laminate and wood flooring for residential and commercial use under about 30 brand and trade names and under certain private labels. Shaw also provides installation services and sells ceramic and vinyl tile along with sheet vinyl. Forest River, Inc. (Forest River) is a manufacturer of recreational vehicles, utility, cargo and office trailers, buses and pontoon boats. Albecca Inc. (Albecca) does business primarily under the Larson-Juhl name. Albecca designs, manufactures and distributes a range of products, including wood and metal molding, matboard, foamboard, glass, equipment and other framing supplies in the United States, Canada and 15 countries outside of North America.

FlightSafety International Inc. (FSI) is engaged in professional aviation training services to individuals, businesses (including certain commercial aviation companies) and the United States. Government. FSI primarily provides training to pilots, aircraft maintenance technicians, flight attendants and dispatchers who op! erate and! support a range of business, commercial and military aircraft. NetJets Inc. (NJ) is a provider of fractional ownership programs for general aviation aircraft. TTI, Inc. (TTI) is a specialty distributor of passive, interconnect, electromechanical and discrete components used by customers in the manufacturing and assembling of electronic products. TTI�� customer base includes original equipment manufacturers, electronic manufacturing services, original design manufacturers, military and commercial customers, as well as design and system engineers. TTI services a range of industries, including telecommunications, medical devices, computers and office equipment, aerospace, automotive and consumer electronics.

Finance and Financial Products

The Company�� finance and financial products businesses include manufactured housing and finance (Clayton Homes), transportation equipment leasing (XTRA), furniture leasing (CORT), as well as various miscellaneous financing activities. Clayton Homes, Inc. (Clayton) is a vertically integrated manufactured housing company. As of December 31, 2012, Clayton operated 34 manufacturing plants in 12 states. Clayton�� homes are marketed in 48 states through a network of 1,441 retailers, including 323 company-owned home centers. XTRA is a transportation equipment lessor operating under the XTRA Lease brand name. XTRA manages a diverse fleet of approximately 82,000 units located at 58 facilities throughout the United States and two facilities in Canada. The fleet includes over-the-road and storage trailers, chassis, temperature controlled vans and flatbed trailers. CORT Business Services Corporation is a provider of rental relocation services, including rental furniture, accessories and related services in the rent-to-rent segment of the furniture rental industry.

Top Insurance Companies To Own For 2014: Cincinnati Financial Corporation(CINF)

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

Hot Safest Stocks To Buy For 2014: CNO Financial Group Inc. (CNO)

CNO Financial Group, Inc., through its subsidiaries, engages in the development, marketing, and administration of health insurance, annuity, individual life insurance, and other insurance products for senior and middle-income markets in the United States. The company markets and distributes Medicare supplement insurance, interest-sensitive and traditional life insurance, fixed annuities, and long-term care insurance products; Medicare advantage plans through a distribution arrangement with Humana Inc.; and Medicare Part D prescription drug plans through a distribution and reinsurance arrangement with Coventry Health Care. It also markets and distributes supplemental health, including specified disease, accident, and hospital indemnity insurance products; and life insurance to middle-income consumers at home and the worksite through independent marketing organizations and insurance agencies. In addition, the company markets primarily graded benefit and simplified issue life insurance products directly to customers through television advertising, direct mail, Internet, and telemarketing. It sells its products through career agents, independent producers, direct marketing, and sales managers. CNO Financial Group, Inc. has strategic alliances with Coventry and Humana. The company was formerly known as Conseco, Inc. and changed its name to CNO Financial Group, Inc. in May 2010. CNO Financial Group, Inc. was founded in 1979 and is headquartered in Carmel, Indiana.

Top Insurance Companies To Own For 2014: Prudential Financial Inc.(PRU)

Prudential Financial, Inc., through its subsidiaries, offers various financial products and services in the United States, Asia, Europe, and Latin America. The company operates through three divisions: The U.S. Retirement Solutions and Investment Management, The U.S. Individual Life and Group Insurance, and The International Insurance and Investments. The U.S. Retirement Solutions and Investment Management division provides individual variable and fixed annuity products, as well as offers retirement investment and income products and services to retirement plan sponsors in the public, private, and not-for-profit sectors. This division also provides investment management and advisory services to the public and private marketplace. The U.S. Individual Life and Group Insurance division offers individual variable life, term life, and universal life insurance products; and group life, long-term and short-term group disability, long-term care, and group corporate-, bank-and trus t-owned life insurance products to institutional clients. This division also sells accidental death and dismemberment, and other ancillary coverages, as well as provides plan administrative services; and offers preferred provider and indemnity dental coverage plans to clients. The International Insurance and Investments division provides international individual life insurance products in Japan, Korea, and other foreign countries; and offers proprietary and non-proprietary asset management, investment advice, and services to retail and institutional clients internationally. In addition, the company engages in real estate brokerage franchise business, which involves marketing its franchises to the real estate companies. Further, it provides institutional clients and government agencies with various services in connection with the relocation of their employees. Prudential Financial, Inc. was founded in 1875 and is headquartered in Newark, New Jersey.

Advisors' Opinion:
  • [By Matthew Scott]

    Retiring Baby Boomers could make Prudential Financial (NYSE: PRU) a strong performer for years to come. Insurance products like its line of guaranteed income annuities have given it an edge over rivals and it continues to make inroads into other areas of investing. Prudential’s stock price increased more than five times over the last two years, jumping from $11.20 on March 9, 2009 to $61.58 at the end of the first quarter.