Was J.C. Penney’s Recent Quarter a Fluke During a Perfect Storm?

J.C. Penney's (NYSE: JCP  ) stock fell more than 50% in the past 12 months and has increasingly underperformed the market for more than a decade. A few weeks ago, first-quarter earnings beat estimates and showed some signs of improvement. However, is J.C. Penney showing real improvement over other big-name rivals like Kohl's (NYSE: KSS  ) and Target (NYSE: TGT  ) ? Or was J.C. Penney's recent quarter just a fluke?

By Mike Kalasnik, via Wikimedia Commons

Viewing J.C. Penney's earnings against its peers
J.C. Penney's revenue was up 6.3% to $2.8 billion in its first quarter. Net income, however, fell 1.1% to a loss of $352 million. The two big metrics that impressed the market, though, were that same-store sales were up 6.2% and overall earnings per share came in better than what analysts expected.

In contrast to J.C. Penney, Kohl's quarter was a lot worse overall. Net income plunged 15% to $125 million on sales that fell 3.1% to $4.1 billion. Earnings per share fell 9%, while same-store sales worsened from the 1.9% decline a year ago to a drop of 3.4%.

Even though Target saw its revenue rise 2.1% to $17.1 billion, net income fell 16% to $418 million. The company is still recovering from the data breach, as store traffic dropped 2.3% in the quarter.

The market has pushed J.C. Penney shares past both Kohl's and Target; this is not only based on its recent quarter but on the hope that the turnaround is just in the beginning stages and that the shares have significant upside potential.

Are Kohl's days of paradise over? By MattL90, via Wikimedia Commons

The perfect storm for J.C. Penney?
There is significant evidence suggesting that J.C. Penney's recent rise is the byproduct of a competitor's recent struggles.

Kohl's was once a name synonymous with growth among retailers. From 1994-2004, the stock saw more than 700% in gains. In the past 10 years, the stock has produced slightly more than 31% in returns, not including dividends.

In its conference call, Kohl's blamed the weather for its e-commerce issues due to the ship-from-store system only being in place in 200 stores currently. However, a bigger issue may exist in the overall business model.

Kohl's is known for its predictable monthly sales and Kohl's Cash program that rewards customers when purchases exceed certain minimums. Customers are likely putting off purchases until the monthly sale rolls around to make bigger purchases at once in order to also receive Kohl's Cash. This would explain the decline in store traffic and the big drop in net income, which was likely affected by items being sold at promotional prices.

Target is facing its own issues that grew out of the data breach that occurred at year-end 2013. Ongoing costs and future costs to support higher security measures will weigh down the company for several quarters.

Target's Canadian segment continues to underperform, and the company is undergoing new leadership changes that include a new CEO and a new Canadian head.

J.C. Penney's position in retail improves significantly when you consider the target customers of these three companies.

Both Kohl's and Target are in a tough position because they are both getting squeezed at the high and low ends of retail. Both have a problem attracting the middle-end consumer, who continues to evolve depending on the overall economy. As a result, targeting middle-income customers is a lot harder than offering the lowest prices or introducing products for luxury customers.

Lastly, bad weather may give J.C. Penney an edge. The majority of Kohl's and Target locations are positioned in outdoor shopping centers, and some of them operate as stand-alone stores. Half of the 1,050 indoor and open air malls in the U.S. have J.C. Penney as an anchor tenant. Because of this, J.C. Penney has had the advantage of more potential foot traffic due to customers visiting other stores at the mall.

Obstacles didn't disappear for J.C. Penney's
Store traffic for J.C. Penney was still negative this past quarter despite April being the first month of positive results in two-and-a-half years. J.C. Penney continues to close its stores. At the end of FY 2012, there were 1,104 stores. At the end of this past fiscal year, there were 1,094 stores. While this news isn't terrible, especially since the online business grew 25.7% last quarter, it goes against J.C. Penney's self-imposed long-term goal -- to increase foot traffic in stores. With more than 30 stores being closed this year, mostly in malls, J.C. Penney is slowly losing its brick-and-mortar presence.

Possibly J.C. Penney's biggest obstacle: empty malls. By Jtalledo, via Wikimedia Commons

The fact that large indoor malls are quickly becoming obsolete may be the biggest burden of all for J.C. Penney over the long-term. Only six new indoor malls have been built in the U.S since 2010, a far cry from indoor mall growth during the 1980's.

Bottom line
J.C. Penney still has raised doubts among many investors. The company's stock has a large short interest of more than 30%. As a result, stock price pops on good news may be partly due to short covering.

J.C. Penney still needs to find a strategy to differentiate itself from its peers that goes beyond Kohl's and Target. Customers need to know what J.C. Penney brings to the table that others don't. While growing same-stores sales is indeed a positive, it doesn't mean much when many of these sales are at promotional or clearance prices.

Leaked: Apple's next smart device (warning, it may shock you)
Apple recent recruited a secret-development "dream team" to guarantee their newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are even claiming its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts 485 million of these type of devices will be sold per year. But one small company makes this gadget possible. And their stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!

 

Hot Sliver Stocks For 2015

LONDON -- SSE� (LSE: SSE  ) doesn't see itself in the "electricity generation" business as much as in the "dividend generation" business.

At least that's the impression you'd get from its website. Most FTSE 100 companies have a section on their websites with a name like "Our Strategy". Few devote it entirely to the merits of dividends, as SSE does: dividends for income, dividends for growth through reinvestment, dividends as a mechanism to enforce discipline in capital allocation, and dividends as a yardstick to hold management to account.

Track record
That single-minded focus is reflected in a superlative track record. It claims to be one of just five FTSE 100 companies to have delivered a real dividend increase every year since 1999.

It's expected to increase the next full-year payout by at least 2% more than RPI when it announces its results next month. After that, with the regulatory regime not yet settled, the current target is to increase dividends at least in line with inflation, maintaining dividend cover around 1.5 times.

Hot Sliver Stocks For 2015: British American Tobacco Industries p.l.c.(BTI)

British American Tobacco p.l.c., through its subsidiaries, engages in the manufacture, distribution, and sale of tobacco products. The company offers cigars, cigarettes, smokeless snus, roll-your-own, and pipe tobacco products under the Dunhill, Kent, Lucky Strike, Pall Mall, Vogue, Viceroy, Kool, Rothmans, Peter Stuyvesant, Benson & Hedges, and State Express 555 brand names. It has operations in the Asia-Pacific, the Americas, eastern and western Europe, Africa, and the Middle East. The company was founded in 1902 and is headquartered in London, the United Kingdom. British American Tobacco p.l.c. operates independently of Remgro Ltd. as of November 03, 2008.

Advisors' Opinion:

• [By G. A. Chester]

  British American Tobacco (LSE: BATS  ) (NYSEMKT: BTI  ) , Tesco (LSE: TSCO  ) (NASDAQOTH: TSCDY  ) , and Severn Trent (LSE: SVT  ) fit the bill, and the table below gives the low-down on them.

Hot Sliver Stocks For 2015: Hemispherx Biopharma Inc (HEB)

Hemispherx Biopharma, Inc. (Hemispherx) is a specialty pharmaceutical company engaged in the clinical development of new drugs therapies based on natural immune system enhancing technologies for the treatment of viral and immune based chronic disorders. Hemispherx focuses on two core pharmaceutical technology platforms Ampligen and Alferon N Injection.The commercial focus for Ampligen includes application as a treatment for Chronic Fatigue Syndrome (CFS) and as an influenza vaccine enhancer (adjuvant) for both therapeutic and preventative vaccine development. Alferon N Injection is a United States Food and Drug Administration (FDA) approved product with an indication for refractory or recurring genital warts. Alferon LDO (Low Dose Oral) is a formulation under development targeting influenza. It has three subsidiaries BioPro Corp., BioAegean Corp., and Core BioTech Corp. The Company's foreign subsidiary is Hemispherx Biopharma Europe N.V./S.A.

Ampligen

Ampligen is an experimental drug, which is undergoing clinical development for the treatment of Myalgic Encephalomyelitis/Chronic Fatigue Syndrome (ME/CFS). Over 1,000 patients have participated in the Ampligen clinical trials representing the administration of more than 90,000 doses of this drug. The Company is also engaged in ongoing, experimental studies assessing the efficacy of Ampligen against influenza viruses.

Alferon N Injection

Alferon N Injection is the registered trademark for the Company's injectable formulation of natural alpha interferon. Interferons are a group of proteins produced and secreted by cells to combat diseases. The Company's natural alpha interferon is produced from human white blood cells. Alferon N Injection [Interferon alfa-n3 (human leukocyte derived)] is a highly purified, natural-source, glycosylated, multi-species alpha interferon product.

Alferon LDO (Low Dose Oral)

Alferon LDO [Low Dose Oral Interferon Alfa-n3 (Human Leukocyte Derived)]! is an experimental low-dose, oral liquid formulation of Natural Alpha Interferon and like Alferon N Injection should not cause antibody formation, which is a problem with recombinant interferon. It is an experimental immunotherapeutic that works by stimulating an immune cascade response in the cells of the mouth and throat, enabling it to bolster systemic immune response through the entire body by absorption through the oral mucosa.

The Company competes with Pfizer, GlaxoSmithKline, Merck, AstraZeneca, Baxter International, Fletcher/CSI, AVANT Immunotherapeutics, AVI BioPharma and Genta.

Advisors' Opinion:

• [By MONEYMORNING]

  Hemispherix Biopharma Inc. (NYSE: HEB) is a specialty pharmaceutical company. It engages in the clinical development of new drug therapies based on natural immune system enhancing technologies and targets the treatment of viral and immune-based clinical disorders. The Philadelphia, Pa.-headquartered company gained widespread attention over the last several months for its work on flu research. Its flagship products include Alferon N Injection, approved by the FDA for a category of sexually transmitted disease infection. Experimental treatments include Ampligen and Oragens, in development stages for the potential treatment of global viral diseases and disorders of the immune system including human papilloma virus, human immunodeficiency virus, chronic fatigue syndrome, hepatitis, and influenza. Shares have traded as low as $0.18 and as high as $0.55 over the last year. At last check, shares were changing hands around $0.50 on volume of 2 million shares.

Top Life Sciences Stocks To Own Right Now: Farmer Brothers Company(FARM)

Farmer Bros. Co. engages in the manufacture, wholesale, and distribution of coffee, tea, and culinary products. Its product line includes roasted coffee; liquid coffee; and coffee related products, such as coffee filters, sugar and creamers, assorted teas, cappuccino, cocoa, spices, gelatins and puddings, soup, gravy and sauce mixes, pancake and biscuit mixes, and jellies and preserves. The company distributes its products through direct and brokered sales to institutional foodservice establishments, including restaurants, hotels, casinos, hospitals, and foodservice providers, as well as retailers, such as convenience stores, coffee houses, general merchandisers, private label retailers, and grocery stores in the United States. Farmer Bros. Co. was founded in 1912 and is headquartered in Torrance, California.

Advisors' Opinion:

• [By Laura Brodbeck]

  Monday

  Earnings Releases Expected: Diamond Foods, Inc. (NASDAQ: DMND), Farmer Brothers Company (NASDAQ: FARM) Economic Releases Expected: US Chicago PMI

  Tuesday

• [By Eric Volkman]

  Farmer Brothers (NASDAQ: FARM  ) has a new top financial executive. The company has appointed Mark Nelson to its CFO and treasurer positions, effective April 15. He will initially be assisted by, then replace, interim Treasurer and CFO Jeffrey Wahba.�

Hot Sliver Stocks For 2015: Aetrium Incorporated(ATRM)

Aetrium Incorporated designs, manufactures, and markets electromechanical equipment for the semiconductor industry to handle and test integrated circuits (ICs). The company provides test handler products, which incorporates thermal conditioning, contacting, and automated handling technologies to provide automated handling of ICs during production of test cycles; change kits to adapt test handlers to various IC package configurations or to upgrade installed equipment; and gravity feed test handlers. It also offers reliability test equipment, which provides structural performance data to aid in the evaluation and improvement of IC designs and manufacturing processes. The company sells its products to semiconductor manufacturers, and their assembly and test subcontractors through direct salespeople, independent sales representatives, and distributors in the United States, the United Kingdom, France, Germany, Italy, Korea, Japan, Taiwan, China, Thailand, Malaysia, Singapore, a nd the Philippines. Aetrium Incorporated was founded in 1982 and is based in North St. Paul, Minnesota.

Advisors' Opinion:

• [By Paul Ausick]

  Stocks on the Move: Aetrium Inc. (NASDAQ: ATRM) is up 156.2% at $12.40 following a positive report based on a recent management change and new products. Mediabistro Inc. (NASDAQ: MBIS) is down 17.4% at $3.41 as the stock gives back some of the 87% gain it scored yesterday. J.C. Penney Co. Inc. (NYSE: JCP) is up 7.7% at $10.08 on momentum from an insider stock purchase earlier this week.

Hot Sliver Stocks For 2015: LKQ Corp (LKQ)

LKQ Corporation (LKQ) provides replacement parts, components and systems needed to repair vehicles (cars and trucks). The Company operates in four segments: Wholesale-North America, Wholesale-Europe, Self Service and Heavy-Duty Truck. Buyers of vehicle replacement products have the option to purchase from primarily five sources: new products produced by original equipment manufacturers (OEMs), which are known as OEM products; new products produced by companies other than the OEMs, which are sometimes referred to as aftermarket products; recycled products originally produced by OEMs, which it refers to as recycled products; used products that have been refurbished; and used products that have been remanufactured. October 1, 2011, it acquired Euro Car Parts Holdings Limited (ECP). On May 27, 2011, it acquired AkzoNobel Coatings Inc.'s paint distribution business consisting of 40 locations across the United States. In February 2012, the Company announced that it had acquired Pieces Automobiles Lecavalier IncEffective August 6, 2013, LKQ Corp acquired Premier Paints Ltd, a manufacturer of motor vehicle parts, form Iris Coatings Ltd, and concurrently, LKQ acquired Bee Bee Refinishing Supplies Halstead, JCA Coatings, Milton Keynes Paint & Equipment and Sinemaster Motor Factors Ltd.

The Company distributes a variety of products to collision and mechanical repair shops, including aftermarket collision and mechanical products, recycled collision and mechanical products, refurbished collision replacement products such as wheels, bumper covers and lights, and remanufactured engines. Collectively, it refers to its products as alternative parts. The Company is a provider of alternative vehicle collision replacement products, and a provider of alternative vehicle mechanical replacement products. Its sales, processing, and distribution facilities reach markets in the United States and Canada. In addition to its wholesale operations, it operates self service retail facilities that sell recycled automotiv! e products. The Company also sells recycled heavy-duty truck products and used heavy-duty trucks.

The Company obtains its aftermarket inventory from auto parts manufacturers and distributors based in the United States, Taiwan, Europe and China. The Company procures recycled automotive products mainly by purchasing salvage vehicles, typically severely damaged by collisions and primarily sold at salvage auctions or pools, and then dismantling and inventorying the parts. The refurbished and remanufactured products that it sells, such as wheels, bumper covers, lights and engines, originate from Companyparts from the salvage vehicles bought at auctions, parts received in trade at collision shops purchasing replacement products from the, and damaged parts bought through bulk purchases from core sales companies that collect damaged parts. The majority of our products and services are sold to collision repair shops, also known as body shops, and mechanical repair shops.

WHOLESALE AUTO PRODUCTS-NORTH AMERICA

The Company�� wholesale automobile product operations in North America are organized by geographic regions serving the United States and Canada that sell all four product types to collision and mechanical automobile repair businesses. As of December 31, 2011, these wholesale operations conducted business from more than 290 facilities. its aftermarket product operations may include a combination of sales, warehousing and distribution, and in many cases will be co-located with its refurbishing operations. Its salvage operation typically has processing, sales, distribution and administrative operations on site, indoor and outdoor storage areas, and include a warehouse with multiple bays to dismantle vehicles.

The Company�� 2011, sales included more than 86,000 stock keeping units (SKUs) of aftermarket collision products and repair materials for the models of domestic and foreign automobiles and light trucks. Its aftermarket product types consist of thos! e frequen! tly damaged in collisions, including automotive body panels, bumper covers and lights. The Company distributes paint and other materials used in repairing damaged vehicles, including sandpaper, abrasives, masking products and plastic filler. The paint and other materials distributed by the Company are purchased from numerous suppliers in the United States and Canada. Certain of these products are distributed under the brand Keystone. Platinum Plus is its exclusive brand offered in the Keystone product line of aftermarket products. The aftermarket products it distributes are purchased from independent manufacturers and distributors located primarily in the United States and Taiwan. The Company has business arrangements with manufacturers to produce its Platinum Plus products.

The Company�� recycled products include engines, transmissions, doors, front end assemblies, trunk lids, bumper assemblies, head and tail lamp assemblies and mirrors. Some insurance companies mandate that the recycled products must be of the same model year or newer as the vehicle being repaired. The Company procures recycled products for its wholesale operations by acquiring damaged or totaled vehicles. During the year ended December 31, 2011, LKQ acquired approximately 228,000 salvage vehicles for its wholesale recycled product operations. Vehicle processing for its wholesale recycled operations involves dismantling a salvage vehicle into recycled products that are ready for sale.

As of December 31, 2011, it operated 34 plastic bumper and bumper cover refurbishing plants, a chrome bumper plating plant, 15 wheel plants, one light refurbishing plant and four engine remanufacturing facilities. Most of its refurbished and remanufactured products are sold through its wholesale distribution channels. The balance is sold to retail automotive stores, wholesale distributors and through Internet sales. Its wholesale recycled product operations generate scrap metal and other materials that it sells to recyclers. T! he Compan! y has a distribution network of over 290 wholesale plants and warehouses across the United States and Canada, of which 50 function as hub or cross dock facilities.

WHOLESALE AUTO PRODUCTS-EUROPE

The Company�� European wholesale operating segment was formed in 2011 with its acquisition of ECP, the distributor of automotive aftermarket products. The Company operates 90 branches, supported by eight regional hubs and a national distribution center, which allows us to reach major markets within the United Kingdom. In 2011, it sold more than 121,000 SKUs of aftermarket products, primarily composed of mechanical aftermarket parts for the repair of vehicles five to 15 years old. Its products include electrical products, such as spark plugs and ignition coils, clutches and related parts, steering and suspension parts, and brake pads and sensors. The Company sells its products to over 32,000 professional repairers, including primarily independent mechanical repair shops and collision repair shops.

SELF SERVICE RETAIL PRODUCTS

The Company�� self service retail operations sell parts from older cars and light trucks directly to consumers. In addition to revenue from the sale of parts, core and scrap, it charges admission fee to access the property. Its self service facilities typically consist of a fenced or enclosed area of several acres with vehicles stored outdoors and a retail building through which customers are able to access the yard. As of December 31, 2011, it conducted our self service retail operations from 47 facilities in North America. Its self service auto recycling operations generate scrap metal, alloys and other materials that it sells to recyclers.

HEAVY-DUTY TRUCK PRODUCTS

As of December 31, 2011, it had a total of 18 facilities in the United States and Canada. Its inventory is comprised of used heavy- and medium-duty trucks, usually five years or older, which are purchased at salvage and truck auctions or direct! ly from i! nsurance companies or fleet operators. During 2011, it purchased approximately 6,000 vehicles. Depending on the condition of the vehicles, they may be dismantled for parts or resold as running vehicles. If certain mechanical parts are damaged, such as transmissions, it may remanufacture them and offer them to its customers. The vehicles that are acquired for resale are typically special purpose or vocational use trucks, such as those used for garbage pickup or cement delivery. If requested by the sellers of the vehicles, it provide an assurance that the vehicles will be sold to foreign buyers and exported to countries for use outside of the United States, or to domestic buyers after the vehicles have been reconditioned and modified for use other than their original purpose.

Advisors' Opinion:

• [By Holly LaFon]

  LKQ Corporation (LKQ) is the world's largest procurer and distributor of alternative and aftermarket collision replacement parts for automobiles and other vehicles. The Company has grown rapidly since its inception in 1998, by executing an expansion strategy that has included aggressive organic and inorganic investments. To date, LKQ's strategy has resulted in a business with unparalleled scale, at over $5 billion in revenues across three continents, compared with aftermarket and salvage parts competitors that routinely post less then $100 million in sales, usually with the largest footprints limited to regional geographies.

• [By Chris Hill]

  In this segment, Mike talks about�LKQ (NASDAQ: LKQ  ) , and why the largest operator of junkyards has turned its scale into an incredibly well-run business, and Matt takes a look into�McDonald's (NYSE: MCD  ) , which reports earnings tomorrow. After a rough period for McDonald's as the competitive landscape shifts toward fast-casual dining options such as Panera and Chipotle, Matt will be looking for signs in the earnings report that the strategy at McDonald's to adapt and shift its business focuses is coming to fruition.

Hot Sliver Stocks For 2015: Simpson Manufacturing Company Inc.(SSD)

Simpson Manufacturing Co., Inc., through its subsidiaries, engages in the design, engineering, manufacture, and sale of building products. It offers wood-to-wood, wood-to-concrete, and wood-to-masonry connectors; screw fastening systems and collated screws; stainless steel fasteners; pre-fabricated shear walls and moment-frames; truss plates; and a range of adhesives, chemicals, mechanical anchors, carbide drill bits, and powder-actuated tools for concrete, masonry, and steel markets, as well as a range of concrete repair products and engineered materials for the repair, strengthening, and restoration of asphalt and masonry construction. The company markets its products to the residential construction, light industrial and commercial construction, remodeling, and do-it-yourself markets primarily in the United States, Canada, Europe, Asia, and the South Pacific. Simpson Manufacturing Co., Inc. was founded in 1956 and is based in Pleasanton, California.

Advisors' Opinion:

• [By jaggom]

  However, the prices for NAND are expected to remain in the mid single-digits in the quarter, but the company has lowered its costs in the previous quarter that should help the company to keep the margin intact. The NAND business is witnessing good demand due to the booming market for solid-state drives (SSD) and mobile. Thus, a slight drop in pricing should be compensated for by higher volumes and lower costs.

• [By Seth Jayson]

  Margins matter. The more Simpson Manufacturing (NYSE: SSD  ) keeps of each buck it earns in revenue, the more money it has to invest in growth, fund new strategic plans, or (gasp!) distribute to shareholders. Healthy margins often separate pretenders from the best stocks in the market. That's why we check up on margins at least once a quarter in this series. I'm looking for the absolute numbers, so I can compare them to current and potential competitors, and any trend that may tell me how strong Simpson Manufacturing's competitive position could be.

Hot Sliver Stocks For 2015: Rubicon Minerals Corp(RBY)

Rubicon Minerals Corporation, a mineral exploration company, engages in the acquisition, exploration, and development of mineral properties in Canada and the United States. It primarily explores for gold and base metal deposits. The company?s key asset is the Phoenix Gold Project located in the Red Lake gold camp, in the Province of Ontario. As of March 31, 2010, it controlled approximately 65,000 acres of prime exploration ground in the prolific Red Lake gold district of Ontario, Canada, as well as approximately 380,000 acres surrounding the Pogo Mine in Alaska and approximately 225,000 acres in northeast Nevada. The company was founded in 1996 and is headquartered in Vancouver, Canada.

Advisors' Opinion:

• [By Sean Williams]

  Another reason this fund looks attractive (at least to me) is that Rubicon Minerals (NYSEMKT: RBY  ) is one of its largest holdings at 6.02% of its assets as of May 10, 2013. Rubicon is in the late stages of the development process for the F2 Gold System, which has yielded drilling assessments as high as 767 grams/ton. F2 appears to be just as bountiful in gold well below the surface as it is near the surface, which could mean a very long and profitable mine life for Rubicon.

Why Amira Nature Foods Ltd. Shares Jumped

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

What: Shares of Amira Nature Foods  (NYSE: ANFI  ) were looking healthier today, gaining as much as 11% after the company named a new chief financial officer last night.

So what: The maker of natural foods products announced that Bruce Wacha will take over as CFO on June 2. Wacha most recently served as a strategic adviser to Amira at Deutsche Bank, where he was previously a director in its global consumer group. Amira stock has been highly volatile in recent months as some short-sellers have accused it of fraud and nearly half of the company's shares have been sold short.

Now what: Amira has had its share of trouble. India's Commerce Ministry blacklisted it and two other companies for violating a rice export ban in 2008-09, though no criminal wrongdoing was found. A short-seller group, Arihaan Capital, has also attacked the company on several occasions, accusing it of misstatements in its SEC filings and failure to disclose a related third party, among other claims. None of its claims against Amira have been proven, however. Amira's volatility stems from being pushed by short-sellers and momentum traders, and it likely accounts for part of today's wild swing. However, investors also seem to be hoping that Wacha will help ease the fraud concerns. We should hear more from the company about these matters when Amira reports earnings sometime in June.

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Consolidated Edison Downgraded at Jefferies; Estimates Cut (ED)

On Wednesday, Jefferies reported that it has downgraded energy company Consolidated Edison, Inc. (ED) to “Hold.”

The firm has cut its rating on ED from “Buy” to “Hold,” and has slashed its price target from $67 to $58. This price target suggests a 4% upside from the stock’s current price of $55.90.

Analyst Paul B. Fremont noted: “We are downgrading Con Edison to Hold from Buy due to lower estimates that are predicated on a reduction in retail margins at the company’s unregulated business (Con Ed Solutions).”

“Additionally we believe parties involved in the current electric, gas and steam rate filing will be unable to reach a settlement agreement, which could put further downward pressure on the company’s earnings,” added the analyst.

Looking ahead, analysts have lowered third quarter earnings estimates on ED from $1.45 to $1.35 per share. For FY2013, estimates have been cut from $3.80 to $3.65 per share. FY2014 estimates have been reduced from $3.90 to $3.75 per share.

Consolidated Edison shares were down 40 cents, or 0.72%, during pre-market trading Wednesday. The stock has been mostly flat YTD.

SpaceX to unveil spacecraft to ferry astronauts

LOS ANGELES (AP) — SpaceX, which has flown unmanned cargo capsules to the International Space Station, planned to unveil a new spacecraft Thursday designed to ferry astronauts to low-Earth orbit.

The Southern California-based rocket builder, founded by billionaire Elon Musk, is one of several private companies vying to develop "space taxis" for NASA to replace the retired space shuttle fleet.

The reveal will take place at SpaceX's headquarters near Los Angeles International Airport.

In a NASA briefing with reporters last year, Musk said the manned version would look futuristic like an "alien spaceship" with side-mounted thrusters, landings legs that pop out and large windows for astronauts to marvel at Earth's curvature.

"It's going to be cool," Musk said at the time.

Since the shuttle fleet retired in 2011, NASA has depended on Russian rockets to transport astronauts to orbit and back, paying nearly $71 million per seat. The space agency has said it wants U.S. companies to fill the void by 2017 and has doled out seed money to spur innovation.

SpaceX — short for Space Exploration Technologies Corp. — has made four cargo runs to the giant orbiting outpost some 200 miles above Earth. Just last month, its Dragon capsule splashed into the Pacific, returning nearly 2 tons of science experiments and old equipment.

Companies competing for the right to ferry station astronauts need to design a spacecraft that can seat a crew of four or more and be equipped with life support systems and an escape hatch in case of emergency. SpaceX has said it's designing a seven-seat spacecraft.

SpaceX and longtime NASA contractor Boeing are "more or less neck and neck" in the competition, but there's a long way to go before astronauts can rocket out of the atmosphere on private spacecraft, said John Logsdon, professor emeritus of political science and international affairs at George Washington University.

Logsdon said progress by private companies is slower than anticip! ated mainly because Congress has not fully funded NASA's budget request for the effort. He said it's important for the U.S. to wean its reliance on Russia given the political tension over the annexation of Crimea.

"It's essential to have our own capability to transport people to space," he said. "This is an important step in that direction."

Wine collector apologizes for bogus bottle scam

NEW YORK (AP) — A wine collector convicted of fraud for manufacturing fake vintage wine in his California kitchen has asked a judge for leniency Thursday, saying his actions were foolish.

Rudy Kurniawan told the judge in a letter that he "never meant to hurt or embarrass anyone" and asked that he be allowed to return to his ailing 67-year-old mother.

Kurniawan's letter to U.S. District Judge Richard M. Berman was filed the same day his sentencing was postponed to July 17.

A jury convicted Kurniawan in December of mail and wire fraud charges that could bring up to 40 years in prison. Prosecutors say federal sentencing guidelines call for him to serve at least 11 years in prison while defense lawyers say the two years he has spent in prison already is sufficient punishment.

Prosecutors say Kurniawan, 37, made between $8 million and $20 million from 2004 to 2012 by selling bogus bottles of wine he manufactured in his Arcadia, Calif., kitchen. The government said the profits enabled him to live affluently in suburban Los Angeles, mingling with wealthy and influential people interested in vintage wine as he bought luxury cars, designer clothing and dined at the best restaurants.

The trial featured testimony from billionaire yachtsman, entrepreneur and wine investor William Koch, who said Kurniawan conned him into paying $2.1 million for 219 fake bottles of wine.

Kurniawan, whose family became wealthy operating a beer distributorship in Indonesia, said his own obsession with fine wines led him to actions that were wrong, both morally and socially, and he will return to Indonesia after he serves his sentence.

"Wine became my life and I lost myself in it," he wrote. "What originally started out as buying a few bottles of wine at a local store over the course of years turned into buying millions of dollars worth of wine."

He said his obsession attracted attention from successful and intelligent people whose acceptance he craved.

"I now realize that all this ! was false and pretentious and that my priorities were completely out of order. The things I did to maintain this illusion were so foolish. The end was inevitable," he added.

Costco earnings up, but not enough for Wall St.

Costco Wholesale net income rose 3% in the third-quarter as the warehouse club operator's sales and membership fees improved.

A key sales figure rose both in the U.S. and abroad, but its earnings fell short of Wall Street expectations. Its shares slipped in pre-market trading Thursday.

Costco's stores offer members the ability to buy items in bulk at low prices.

Net income for the 12 weeks ended May 11 rose 3% to $473 million, or $1.07 per share. That compares with net income $459 million, or $1.04 per share. Analysts expected $1.09 per share, according to FactSet.

Revenue rose 7% to $25.79 billion from $24.08 billion last year. Analysts expected $25.68 billion.

Revenue in stores open at least one year rose 5% in the U.S. and 3% internationally. Excluding gas prices and foreign currency fluctuation, the figure rose 6% in the U.S. and 8% internationally.

Costco, based in Issaquah, Wash., operates 655 warehouses, including 464 in the United States and Puerto Rico, 87 in Canada, 33 in Mexico, 25 in the United Kingdom, 19 in Japan, 10 in Taiwan, 10 in Korea, six in Australia, and one in Spain.

Its shares were trading between $112.85 and $113.80 ahead of market opening today, down from the previous day's close of $113.87.

3 Unknown Dividend Stocks to Buy Now

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When on the hunt for dividend stocks, there are many factors to consider. You have to look for more than just high yield. Oftentimes, the high yields on dividend stocks simply aren't sustainable for business reasons, or perhaps because the business is getting super-cheap debt to run its business. Interest rates will rise one day.

Another thing to look for is how long a stock has been paying its dividend. Companies that have been throwing cash back at shareholders for a long time are likely to continue doing so, and these are the dividend stocks to pay attention to. The more obscure ones, usually with boring names, are another place to look because they may be underfollowed, and possibly undervalued.

Here are three dividend stocks that have been paying out for decades:

WGL Holdings (WGL)

Dividend yield: 4.4%

Have you ever heard of WGL Holdings (WGL)? Probably not, and that’s actually a good thing. This is the kind of energy play I like because it's highly diversified. For starters, WGL stock owns natural gas storage facilities — not the gas itself in these cases, but the storage and pipeline delivery infrastructure. Those facilities allow the company to store stuff for other people. That's a nice margin business.

WGL does actually sell retail natural gas as well, though. On the commercial side, it provides maintenance and upgrades to energy infrastructure and also plays in that designing and building of energy efficiency systems. It has a broad expanse — almost 700 miles of transmission pipe, almost 13,000 miles to distribute, and it can store about 15 million gallons of propane.

WGL serves about 170,000 customers in the Mid-Atlantic. So as you can see, it's a broadly diversified dividend stock, and that's one reason it has paid a dividend for 37 years. The dividend yield for WGL stock is presently at 4.4%.

Middlesex Water Company (MSEX)

Dividend yield: 3.7%

In a similar vein is Middlesex Water Company (MSEX). Some of the best dividend stocks are utility-based businesses that operate efficiently and generate a lot of cash flow for dividends.

I particularly love that MSEX is a niche business and has been around since 1897. MSEX stock's niche is geographical — operating only in New Jersey, Delaware, and Pennsylvania. It basically treats wastewater and then distributes it on both the wholesale and retail levels.

This isn't some massive utility service generation billions. As dividend stocks go, it’s a nice, simple business that makes a few million in free cash flow every year and distributes most of it to shareholders as a 3.7% yield … and has been doing so for 41 years.

Universal Corporation (UVV)

Dividend yield: 3.9%

Everyone's heard of the big tobacco companies like Altria (MO), but did you ever wonder who actually sells the tobacco leaves to the big tobacco manufacturers? I love the distribution business and that's why I love Universal Corporation (UVV).

UVV has been around since 1888, if you can believe it. The company is universal and seems to have escaped the wrath of non-smoking advocates, as it operates in 30 countries. The company does it all — it buys up tobacco from farmers, processes it, packs it, stores it, before ultimately selling it off to the big boys. Determined not to be left behind, UVV is also monkeying with liquid tobacco to serve the e-cigarette market.

Like energy, tobacco isn't going away. There will always be a market to serve. It is also, yes, a duopoly and we love duopolies in dividend stock investing. The UVV stock dividend has been solid for forty years, and presently yields 3.9%.

Like what you see? Sign up for our Dividend Insights e-letter and get income investment advice delivered to your inbox every Friday!

As of this writing, Lawrence Meyers did not hold a position in any of the aforementioned securities. He is president of Asymmetrical Media Strategies, a crisis PR firm, and PDL Broker, Inc., which brokers financing, strategic investments and distressed asset purchases between private equity firms and businesses. He also has written two books and blogs about public policy, journalistic integrity, popular culture, and world affairs. Contact him at pdlcapital66@gmail.com and follow his tweets at @ichabodscranium.

New Hire Roundup: AIG Advisor Group Names Couch EVP of National Sales

This week in personnel announcements and new hires, AIG Advisor Group named Allison Couch executive vice president of national sales. Jason Stamm was named central region president for the Private Client Reserve of U.S. Bank, FNEX brought in Chris Nelson, Eric Wilkinson and Marcus Relthford and Milbank, Tweed, Hadley & McCloy LLP announced that it has hired Catherine Leef Martin.

Also, James Larson II went to Wealth & Pension Services Group, and Franklin Templeton welcomed Jason Colarossi.

Allison Couch Joins AIG Advisor Group

AIG Advisor Group has announced that Allison Couch will join June 2 as executive vice president, national sales, a newly created position. She will be based in New York and report to Erica McGinnis, president and CEO.

Couch began her career as a financial advisor and managing executive affiliated with Royal Alliance. After more than 10 years as a producing advisor, she became a vice president of business development for Royal Alliance, and then SVP and head of business development at FSC Securities. She subsequently held a variety of positions and spent several years at LPL Financial as SVP. Most recently she served as managing director, wealth management, for Cetera Financial Group.

Franklin Templeton Welcomes Colarossi

Franklin Templeton has announced the hire of Jason Colarossi as vice president and head of strategic accounts for its investment-only division in the U.S. He reports to Yaqub Ahmed, senior vice president and head of investment-only division-U.S., who oversees the firm’s retail defined contribution and variable annuity IO businesses.

A 17-year veteran in the asset management and DC industry, Colarossi most recently served as national account manager within JPMorgan's defined contribution investment solutions group. Prior to that, he held positions with Putnam Investments and the Bostonian Group.

Stamm Named Central Region President for Private Client Reserve

U.S. Bank Wealth Management announced that Jason Stamm was appointed regional vice president of the Private Client Reserve. He succeeds Mike Ott, who was recently named president of the Private Client Reserve of U.S. Bank. Stamm will be based in the Private Client Reserve’s headquarters office in Minneapolis.

With 21 years of financial services experience, Stamm has served with BMO Private Bank and its predecessors since 1996. In his most recent capacity as regional president, he led the business operations and talent integration for the Private Bank of BMO, Harris Bank and M&I in the north central region.

FNEX Welcomes Three

FNEX announced that it has hired Chris Nelson as the firm’s chief technology officer, and also added Eric Wilkinson and Marcus Relthford as vice presidents of business development in its sales division. Wilkinson will manage business development efforts based in Chicago and working across various states in the Northwest and upper Midwest; Relthford will manage business development efforts based in Cincinnati and working across the lower and south Midwest.

Nelson brings over 18 years of experience in technology, and joins from Delivra, where he was director of operations; he also spent many years there as director of information technology. Prior to Delivra, he held multiple roles at T2 Systems and Indiana Farm Bureau Insurance and earlier served as airborne communications operator for the U.S. Navy.

Prior to joining, Wilkinson was a financial advisor with Edward Jones. Previously he served as the chief operating officer with Grain/OTC/Options-Markets and vice president at Fed Fund Futures/Options.

Relthford served as vice president of institutional sales at Institutional Shareholder Services (ISS) prior to joining and covered markets in North America and EMEA. Before that he worked for the Montgomery County, Ohio, treasurer’s office and Scudder Private Investment Counsel.

Milbank Adds Martin

Milbank, Tweed, Hadley & McCloy LLP announced that Catherine Leef Martin has joined the firm as a special counsel in the alternative investments practice. She will be based in New York.

Martin, an Investment Company Act (1940 Act) and Advisers Act attorney, was previously counsel at Davis Polk in New York.

Wealth & Pension Services Group Adds Larson

Atlanta-based Wealth & Pension Services Group has announced that it has hired James Larson II as head of its new office in South Florida near West Palm Beach with the title of certified fund specialist.

Larson was formerly a vice president of investments with the Mutual Fund Store.

---

Check out HighTower, Focus Add Wirehouse Advisors on ThinkAdvisor.

Exit Strategy - John Hussman

The S&P 500 set a marginal new high on Friday, in the context of a broad rollover in momentum thus far this year that we view as likely – though of course not certain – to represent a broad cyclical peak of the sort that we observed in 2000 and 2007, as distinct from spike-peaks like 1987. Valuation measures remain extreme, with the market capitalization of nonfinancial stocks pushing 130% of GDP (relative to a pre-bubble norm of about 55%), the S&P 500 price/revenue ratio at 1.7, versus a pre-bubble norm of 0.8, and the Shiller P/E near 26 – which while lower than the 2000 extreme, exceeds every pre-bubble observation except for a few months approaching the 1929 peak. We presently estimate 10-year nominal total returns for the S&P 500 Index averaging just 2.3% annually, with zero or negative total returns on every horizon shorter than about 7 years.

A side note about valuations and profit margins – my concern about record profit margins here is emphatically not centered on what profit margins may do over the next few quarters or years. The relationship between cyclical movements in earnings and stock prices is simply not very strong. Rather, as I noted in The Coming Retreat in Corporate Earnings, "my present concern is much more secular in nature. It can be expressed very simply: investors are taking current earnings at face value, as if they are representative of long-term flows, at a time when current earnings are more unrepresentative of those flows than at any time in history. The problem is not simply that earnings are likely to retreat deeply over the next few years. Rather, the problem is that investors have embedded the assumption of permanently elevated profit margins into stock prices, leaving the market about 80-100% above levels that would provide investors with historically adequate long-term returns."

In other words, we should not be concerned about extremely elevated profit margins because earnings are likely to weaken and stock prices might follow over the next couple of years (although that may very well occur). We should be concerned because investors are pricing stocks as a multiple of current earnings. They are implicitly using current earnings as if they are representative and proportional to theentire stream of future earnings going out over the next five decades or more. That's what it means to use a valuation multiple. It means that you take some fundamental as a sufficient statistic for the stream of cash flows that the security will deliver into the hands of investors for decades to come. If you think you know what wage rates, competitive pressures, interest rates and tax policy will be 10, 20, 30, 40 and 50 years from now, and that the present situation is representative and permanent, good luck with that. Otherwise, investors should recognize that because of the variability of profit margins over the long-term, valuation measures that adjust for variations in profit margins have been dramatically more reliable than unadjusted measures over time (see Margins, Multiples, and the Iron Law of Valuation)

Low volatility and suppressed short-term interest rates are a breeding ground for yield-seeking speculation. This reach for yield has now driven junk bond yields to about 5%, which is interesting given that yields are now near or below typical historical default rates. Meanwhile, the majority of new debt issuance today is taking the form of leveraged loans to already highly-indebted borrowers, with "covenant lite" features that provide little recourse in the event of default. This is the sort of behavior that should wake investors up like a triple Espresso. It doesn't because they have been conditioned to focus on yield alone, without considering the minimal amount of capital loss that would wipe that yield out. This is not a new dynamic, and precisely because it is not a new dynamic, one can always find solace from the same Broadway kick-line of dancing clowns that reassured investors that credit was sound, subprime was contained, and stocks were still cheap in 2000 and 2007.

Meanwhile, overbought measures also remain extreme, as investors have become conditioned to a perpetually diagonal advance like those that brought stocks to similarly overvalued, overbought, overbullish pinnacles throughout history (see The Journeys of Sisyphus). As I've often noted, there are countless ways to operationalize the concept of "overvalued, overbought, overbullish" depending on the severity of the condition one wishes to capture. Conditions that capture less severe market peaks also tend to include various false signals, while more restrictive conditions limit the set to the worst pre-crash peaks in history, but will tend to miss cyclical peaks that were less extreme). The following set of criteria falls into the more restrictive category, and limits the set to the 1929, 1972, 1987 peaks, three tech-bubble instances (the peak before the 1998 Asian crisis, a pre-correction peak in 1999, and the 2000 top), the 2007 peak, and of course, a solid band of warnings today. From our perspective, this time is different only in the extended period over which these and similar conditions have been sustained in recent quarters without consequence.

Continue reading here.

Also check out: John Hussman Undervalued Stocks John Hussman Top Growth Companies John Hussman High Yield stocks, and Stocks that John Hussman keeps buyingAbout the author:Canadian Valuehttp://valueinvestorcanada.blogspot.com/

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At the Close: Dow Jones Industrials Retake 15,000; Pep Boys Plunges After Close on Earnings Miss

After touring the nation for three-straight days, the Fat Boys sang, they needed a vacation. The Dow Jones Industrials, however, needed vacation to end to break its four-week losing streak. And with all hands on deck now, the Dow climbed back above 15,000 for the first time since Aug. 23.

Getty Images

The Dow Jones Industrial Average rose 0.9% to 15,063.12 today, its biggest percentage gain in two months, while the S&P 500 rose 1% to 1,671.71. The Nasdaq Composite advanced 1.3% to 3,706.18.

Why the advance? Why not? Data out of China was good, Japan’s stock market is running with the bulls again after winning the 2020 Olympics and Australia has a new government.

Investors shouldn’t get too complacent, however. Whether or not the Fed will begin tapering next week is still an open question, while the bombs may or may not fall on Syria. On the former, Janney’s Mark Luschini argues that it’s time to “rip the Band-Aid off.” He writes:

Many expect the Fed to use that meeting to announce its tapering process. We hold the same opinion. But, at the same time, each weaker-than-expected economic data point along the way seems to embolden those who think the Fed is unlikely to start the tapering process until later in the year if at all.

It is this disconnect in expectations that may lead to increased volatility in the markets as the meeting date approaches. We believe that the Fed should use this upcoming date to start reducing its bond-buying program, even if it startles the market. We think the turbulence will be short-lived, as investors come to see that the economy doesn't require the Fed's assistance quite the same way now as it did before.

As for Syria, the issue could remain unresolved for some time, even if the Russians have mooted a plan for Syria to give up all its chemical weapons. And that, too, could remain a source of volatility for financial markets, says CRT Capital Group’s Ian Lyngen. He writes:

Leaving aside the discussion about the wisdom of seeking buy-in from the Senate and House, we're more inclined to interpret the current breakdown of Congress' voting bias as a volatility enhancing event – rather than an opportunity to step away from the conflict.  Said differently, the approval process looks poised to drag on beyond the 4-5 day initial estimate.  Clearly the longer the voting takes and the more conflicting headlines emerge, the more choppy the price action becomes.

In other words, enjoy the fun while it lasts.

Earnings season may be over, but companies keep reporting. The latest: Pep Boys (PBY). The chain of auto-repair shops reported a profit of 10 cents a shares, well below forecasts for a 19 cent profit. Its shares have plunged 4.5% to $11.00 in after-hours trading.

PVH (PVH) has fallen 3.4% to $127.60 after the clothing retailer said it earned $1.39 a share, beating forecasts by 1 cent, but offered below-consensus earnings guidance.

Five Below (FIVE) has gained 12% to $45.90 after the teen retailer said it earned 11 cents a share, above forecasts for 9 cents.

Flow International (FLOW) has gained 9.6% to $3.99 after it reported a loss of 2 cents a share, below forecasts for a 1 cent profit. Profits were hit by currency fluctuations and a $1.6 million charge.

Casey’s General Stores (CASY) has dropped 1.6% to $67.73 after reporting a profit of $1.43 a share, above estimates for a $1.26 profit.

Rieder: A big victory for journalism in Philly

It's a huge victory for Philadelphia -- and for journalism.

The auction ending the ugly ownership melodrama that has engulfed The Philadelphia Inquirer, the Philadelphia Daily News and philly.com over the past couple of years resulted Tuesday with the right faction prevailing.

MORE: Philly Inquirer minority owners win control

Over the past couple of years, the news outlets have been hamstrung by a bitter dispute between two groups of owners representing very different approaches to journalism.

One, headed by former New Jersey Nets owner Lewis Katz, supported a newsroom regime committed to ambitious enterprise reporting about the city's vexing and manifold social problems.

The other, led by insurance executive and South Jersey Democratic power George Norcross, wanted to move in the direction of small ball with an emphasis on hyperlocal news. It has controlled philly.com, the preeminent digital property of the news conglomerate, which is dominated by calorie-free sensationalism and linkbait.

On Tuesday, Katz and his ally among the owners, philanthropist H.F."Gerry" Lenfest, prevailed. While the auction overseen by Delaware Chancey Judge Donald Parsons was expected to be an epic brawl -- Norcross and Katz are highly successful players who don't much enjoy losing -- it instead turned out to be a one-punch knockout. The bidding started at $77 million. Katz and Lenfest bid $88 million. Norcross and Co. responded, "No mas." Game over.

It marked the fifth -- yes fifth -- time in eight years that the embattled papers' ownership has changed hands. Katz and Norcross were among a group of business leaders who bought the news outlets from venture capitalists for $55 million in 2012.

So why does any of this matter to anyone besides the dueling owners, the journalists in the newsrooms and media junkies? Because journalism is a critical element in our democracy. And Philadelphia -- in many respects a world-class city but one dogged by daunting challenges in dealing with p! overty, education and crime -- desperately needs serious watchdog journalism.

The symbol of what's at stake in this unusually bloody management battle is Bill Marimow, the Inquirer's editor. The simmering ownership dispute came to a boil last October when Publisher Bob Hall, a Norcross loyalist, fired Marimow. Katz promptly went to court and when the dust settled, Marimow had been reinstated. (Disclosure: Marimow is a friend and a fellow Philly guy.)

REM RIEDER: Philly newspapers star in ugly melodrama

Clearly, the situation was untenable, and the Delaware court was asked to dissolve the agreement that had formed owning company Interstate General Media and clean up the mess. Thus Tuesday's auction.

The ownership imbroglio was complicated by the fact that Interstate General Media was run by a management committee that consisted of two people, Katz and Norcross. Both had to sign off on major decisions, which was a challenge given that they don't agree on much of anything. Marimow's position was strengthened powerfully by the fact that Katz's longtime companion, Nancy Phillips, happens to be the Inquirer city editor -- and a Marimow protege.

Marimow won two Pulitzer prizes as a reporter and is widely respected for his devotion to and skill at fostering ambitious investigative reporting. But he has his detractors. He's been fired from a number of top newsroom positions, and was once demoted as the Inquirer's editor for being insufficiently digital.

And that's no small thing. Print journalism has been profoundly battered by the Internet, and newspaper companies are all frantically struggling to plot and implement a digital future.

REM RIEDER: Newspapers' urgent need to innovate

Marimow alluded to the challenges that lie ahead when I asked for his post-auction thoughts. His tenure would have lasted about two seconds in the event the auction had gone the other way.

"There is," he said, "a lot of hard work to be done in the days ahead to ensure that ! excellent! journalism – in The Inquirer, the Daily News and Philly.com – continues and that it leads to a viable, profitable business. I've always believed that great journalism – in print and in the multimedia world – will lead to profits, and that when a news organization is profitable, some of those profits can be plowed back into the newsrooms."

Profits? The Philly papers haven't seen any of them for quite awhile. Here's hoping Marimow is right. Because without a serious financial turnaround, all of the high-minded aspirations will be for naught.

Time Warner Gains-But CBS Gains More-as Deal to Restore Programming Reached

In the Door’s song “the End,” Jim Morrison sang about wanting to kill his father. After today’s deal between CBS (CBS) and Time Warner (TWX) that restore CBS programs to subscribers, T.V. viewers might no longer want to kill their cable provider.

Getty Images

The Wall Street Journal explains what happened:

Time Warner Cable and CBS Corp. announced a new accord on the fees that the cable operator will pay to carry CBS programming, ending the blackout at 6 p.m. Eastern time. Terms of the agreement weren’t disclosed.

“We are receiving fair compensation for CBS content,” CBS Chief Executive Les Moonves said in a note to employees.

Time Warner Cable Chief Executive Glenn Britt said that “while we certainly didn’t get everything we wanted, ultimately we ended up in a much better place than when we started.”

The fact that terms weren’t disclosed hasn’t stopped analysts from speculating about what it might look like. B. Riley & Co.’s analysts offer their view:

While economics were not disclosed, we believe CBS did bend slightly on its demands for $2/sub/month, (which would have been a 300% hike in fees), and agree to between $1.50 – $1.75/sub, depending on the DMA. In turn, we believe TWC agreed to give up any streaming economics which currently CBS currently books on library product from its various deals with OTT providers, (examples – Cheers, Everybody Loves Raymond, Hawaii 5-0, Twin Peaks, CSI Miami, etc.).

Wunderlich’s Matthew Harrigan offers his thoughts:

CBS likely secured a monthly fee not quite immediately in line with its $2 monthly target, but likely to eclipse that threshold near the end of the five- to six-year deal term. The CBS network was back on 6pm Monday, in time for Gino Smith’s likely debut as starting quarterback for the New York Jets. CBS CEO Les Moonves did suggest to staffers that CBS now has latitude to secure domestic subscription VOD deals for CBS and Showtime, including Showtime Anywhere, significant positives for monetizing digital platform carriage. TWC CEO Glenn Britt is suggesting that the MSO was successful in somewhat moderating CBS’s more extreme demands.

The analysts sound as if they believe CBS got the better of the deal-and the market appears to agree. Shares of CBS have gained 3.7% to $53.00, while Time Warner has gained 1.1% to $61.19. Shares of Disney (DIS) are little changed at $60.81, while shares of Cablevision Systems (CVC) have dropped 0.3% to $17.69.

A New Price Target for Oil

Troublemakers in Egypt and Syria – and some saber-rattling American politicians – helped send oil to a new high this week.   The price of oil has broken out to the upside of the "double top" pattern I showed you a few weeks ago. So instead of a quick profit off an oil breakdown, anyone who shorted shares of the United States Oil Fund (USO) should have stopped out of the trade for a tiny loss.   Now with a new set of circumstances – and a new chart pattern – it's time to take another look at oil and see what the next trade setup might look like...   Here's a chart of West Texas Intermediate (WTI) crude, the benchmark U.S. oil price...     As you can see in the chart above, the difference between oil's recent support and resistance levels is about five points. So if we add five points to the breakout level of $108, we get a target price for oil of $113.   That target price lines up well with the resistance of oil's former high price in 2011. Take a look at this longer-term chart...     But there are still several reasons to be bearish on oil. Oil inventories are higher than average for this time of year and it has a seasonal tendency to decline in September. Also, demand for oil has been declining due to sluggish economic growth.   The big reason to be bullish right now is the impending U.S. military action in Syria. That possibility trumps the supply/demand concerns. It has pushed oil to its highest price in two years. And it'll likely push prices a bit higher.   But as the price of oil approaches the $113 target level and the threat of military action runs its course, oil is likely to form an important intermediate-term top.   That will be the time for traders to take another shot at a short sale in the oil market.   Best regards and good trading,   Jeff Clark

Tech stocks are back. Forget that Spring sell-off

The Nasdaq has rebounded in May and is currently up 1.7%. Click the chart for more stock info.

NEW YORK (CNNMoney) It's going to be a short week on Wall Street as the U.S. and British markets are closed on Monday.

The truncated week will also mark the end of a dramatic month for stocks.

Nasdaq rallies in May

Investors traditionally unload shares before they head off for summer vacation, but sticking it out through May looks like a wise move this year. The Nasdaq is up 1.7% so far this month, shaking off its losses from March and April when there was broad sell-off of so-called "momentum stocks."

The Dow and S&P 500 are also on track to end the month higher. On Friday, the S&P 500 closed above 1,900 for the first time ever.

Earnings season is over

Earnings season is nearly over, with 98% of S&P 500 companies having reported quarterly earnings, according to FactSet. To date, 74% of those companies have beaten expectations, but that's partly because the predictions were so low after the harsh winter. Profits are only up 2.1% over the same time last year.

Some of the last firms to report include purse and watchmaker Michael Kors (KORS), due out on Wednesday. Analysts are expecting sales to grow by more than half, but the company wouldn't be the first high-end retailer this quarter to do well.

Abercrombie & Fitch (ANF) will report on Thursday, but it is expected to show a decline. Those watching the company think sales are going to fall and profits will turn to losses for the teen retailer.

Lions Gate Entertainment (LGF), the studio behind the popular Divergent film franchise, also reveals performance on Thursday. It is expected to be flat from last quarter, though far better than the same time last year.

Economic data: Consumer confidence

Friday isn't quite the end of June, so investors have to wait another week for much anticipated American jobs report, but there are plenty of other big economic releases to dig through as they plan their summer vacations.

Consumer confidence stats drop Tuesday, along with data on home prices. Both are expected to remain relatively flat from the previous month. Initial jobless claims come out on Thursday, and economists predi! ct they will dip lower, which would be a good sign for those hoping for a stronger labor market.

All three economic measures will be picked over by investors seeking clarity on the strength of the recovery.

Geopolitical tensions

There's still plenty of geopolitical risk to potentially spook the markets, including deadly violence in the lead up to Ukraine's elections on Sunday. Unrest also continues in Thailand, with the military shutting down international television networks and banning some politicians from leaving the country following a coup d'etat.

So far, these events have not had a major impact on world markets.

Electric cycles, bikes and 'tuks' get traction

Despite America's love affair with Harley-Davidsons, electric motorcycles — as well as e-bicycles — are revving up U.S. sales.

Two-wheeled e-vehicles are gaining converts among urban commuters and law enforcement, which see a stealth advantage in their quietness. More than three dozen U.S. police departments nationwide now use e-motorcycles.

Sales of high-performance e-motorcycles will rise at least 30% per year through 2023 in North America, says a May report by Navigant Research, a market research firm. Co-author John Gartner sees several reasons: consumers looking for refuge from high gasoline prices, increases in city traffic and improved e-vehicles.

"It has its limitations. It only goes so far" on a charge, says Ron Paci, a retired carpenter in Arlington, Va., who has owned an electric Zero Motorcycle for a year. Still, he's a huge fan. "it doesn't pollute. It doesn't make any noise so if you want to drive quietly along a country road, it's a new experience."

Zero, the largest U.S. manufacturer of e-motorcycles, has boosted production from fewer than 100 units in 2010 to more than 2,000 this year, says Scott Harden, the company's vice president of marketing. Compared to gas-powered counterparts, he says Zeros are cheaper to operate — about a penny per mile — and don't make noise, fumes or vibrations.

"It's almost a magic-carpet-like ride," Harden says, noting Zeros can go 171 miles per charge in the city. He's bullish about future sales, because battery prices — accounting for half of production costs — have fallen in the last year. Zeros cost $10,000 to $17,000.

Oregon-based Brammo makes electric motorcycles, as shown here, than can go up to 110 miles per hour and as far as 128 miles per charge.(Photo: Courtesy of Br! ammo)

E-motorcycles sell best in the San Francisco Bay area, southern California, Florida and Texas, says Adrian Stewart, director of marketing for Oregon-based Brammo, which rolled out its first model in 2009.

Netherlands-based Tuk Tuk Factory is partnering with eTuk USA to bring electric tuk tuks, three-wheeled vehicles without sides but with canopies, to the United States.(Photo: Courtesy of Tuk Tuk Factory)

The U.S. market faces increased competition as BMW launches an e-scooter this year, and Yamaha plans an electric entry in 2016.

Also on the way are three-wheeled electric tuk-tuks, vehicles without sides that have canopies and are common in Asia. Netherlands-based Tuk Tuk Factory is partnering with eTuk USA, which is seeking road-use approval for three models from the U.S. Department of Transportation.

"The interest is unbelievable," says Michael Fox of eTuk USA, noting Atlanta's airport plans to use one of the units for mobile food sales. He says hungry passengers waiting for flights won't have to leave their gate, because the tuk-tuk will come to them.

E-bikes, though still a small share of all U.S. bicycles, are seeing rapid growth. More than twice as many, 158,000, were imported from July 2012 to July 2013 than a year earlier, when 65,000 entered the U.S. market, according to Edward Benjamin, chairman of the Light Electric Vehicle Association, an industry group. E-bike sales are forecast to increase nearly 10% per year through 2020 in North America, says a 2013 Navigant report.

"If I ride a pedelec up a hill, I feel 18 again," Benjamin, 59, says, referring to a type of e-bike that requires riders to pedal in order for the motor to run. The more pedaling, the longer a bike's range per charge.

He says e-bike sa! les are g! reatest among aging Baby Boomer cyclists who have trouble climbing hills and young urban commuters who don't want to buy a car but want to arrive at work without sweating. He says customers say they aim to avoid traffic jams and parking hassles.

Still, Americans aren't flocking to e-alternatives as quickly as Europeans or Asians.

"We're culturally slow in our adoption," Benjamin says. Unlike Europeans, he says most Americans drive to work and are more apt to see bicycles as a way to exercise rather than commute.

Also, Europeans are more focused on reducing greenhouse gas emissions and have more dealerships that focus exclusively on e-vehicles, Brammo's Stewart says. And in the U.S., he says there's the Harley-Davidson "phenomenon," adding "the noise and the smell are part of the attraction." He doesn't expect its devotees to switch until e-motorcyles can get 300 miles per charge.

Another hurdle is price. Harleys aside, many gas-combustion motorcycles cost less, and a federal tax incentive for e-vehicles, including motorcycles, expired last year.

Interesting WMGI Put And Call Options For July 19th

Investors in Wright Medical Group Inc. (NASD: WMGI) saw new options begin trading this week, for the July 19th expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the WMGI options chain for the new July 19th contracts and identified one put and one call contract of particular interest.

The put contract at the $25.00 strike price has a current bid of 5 cents. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $25.00, but will also collect the premium, putting the cost basis of the shares at $24.95 (before broker commissions). To an investor already interested in purchasing shares of WMGI, that could represent an attractive alternative to paying $30.12/share today.

Because the $25.00 strike represents an approximate 17% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 91%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract. Should the contract expire worthless, the premium would represent a 0.20% return on the cash commitment, or 1.28% annualized — at Stock Options Channel we call this the YieldBoost.

Click here to find out the Top YieldBoost Puts of the S&P 500 »

Below is a chart showing the trailing twelve month trading history for Wright Medical Group Inc., and highlighting in green where the $25.00 strike is located relative to that history:

Turning to the calls side of the option chain, the call contract at the $35.00 strike price has a current bid of 5 cents. If an investor was to purchase shares of WMGI stock at the current price level of $30.12/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $35.00. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 16.37% if the stock gets called away at the July 19th expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if WMGI shares really soar, which is why looking at the trailing twelve month trading history for Wright Medical Group Inc., as well as studying the business fundamentals becomes important. Below is a chart showing WMGI's trailing twelve month trading history, with the $35.00 strike highlighted in red:

Considering the fact that the $35.00 strike represents an approximate 16% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 87%. On our website under the contract detail page for this contract, Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 0.17% boost of extra return to the investor, or 1.06% annualized, which we refer to as the YieldBoost.

Click here to find out the Top YieldBoost Calls of the S&P 500 »

The implied volatility in the put contract example is 37%, while the implied volatility in the call contract example is 32%. Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 252 trading day closing values as well as today's price of $30.12) to be 26%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.

Possible eBay user info offered for sale online

SAN FRANCISCO – It may have taken eBay weeks to tell users its user database had been hacked, but it took less than 24 hours for groups claiming to have access to the information to offer it up for sale.

Several "full ebay user database dump" offers have been made on the anonymous site pastebin.com but it seems unlikely they're real, experts say.

"It's not uncommon for criminals to spot an opportunity to cash in on an attack by offering false credentials for sale," said Trey Ford, global security strategist at Rapid7, a security company in Boston.

"The published lists we have checked so far are not authentic eBay accounts. We still encourage users to go to eBay and change passwords," eBay said in a statement.

EBay reported Wednesday that a breach into its database of 145 million user records was discovered earlier this month and may have begun as early as late February.

Online marketplace eBay is urging users to change their passwords following a huge "cyberattack" on a database with encrypted passwords and non-financial data. VPC

Three months to find a cyber break in isn't surprising to Stephen Boyer, of BitSight Technologies, a security analysis firm in Cambridge, Mass.

"Intrusion detection is very difficult, depending on the skill of the attackers and the defensive abilities of the company," he said.

"Two months isn't good but still better than two years to detect Heartbleed which was in plain sight," said Bob West, of CipherCloud, a data security company in San Jose, Calif.

It's not uncommon to have an intrusion take 200 days to come to light, Boyer said. "The longer they're in the harder they are to find, because they don't trigger 'anomaly detection' anymore," he said.

Hackers getting in is one thing. Getting the data of 145 million users out is something else.

"The mass exfiltration of hundreds of millions of users personal data should have immediately been flagged. That shows a very fundamental lack of some simple security protections against some of Ebay's most sensitive data that they have," said David Kennedy, chief executive of TrustedSec, an information security company in Strongsville, Ohio.

EBay said it waited several weeks to tell its users because the company "has a responsibility to fully understand the facts which required a full investigation."

While 47 states and the District of Columbia have laws requiring that individuals be notified of security breaches involving their information, they vary wildly.

Deciding when to disclose is a balancing act, said Lysa Myers, a security researcher with Eset, a security company with offices in San Diego.

"Obviously, the more sensitive and valuable the data, the more important it is to disclose quickly. On the other hand, it doesn't look good to release incomplete information, only to have to update it with contradictory information as more data come to light," she said.

While there was no legal requirement to immediately notify customers, security experts weren't impressed with how eBay did it.

"When it was publicly announced, they didn't even have anything on the main webpage to notify the users," said Kennedy.

"It's easy to point the blame and fault mistakes, but in this case, you have to be open with communication and be very proactive in fixing the issue," he said. "This doesn't appear to have been done at all."

Nordstrom, Inc. (JWN): Nothing Special About $75 or $78 Price Targets

Nordstrom, Inc. (NYSE:JWN) is rolling to end the week. The higher end retailer shares are up more than $8 after topping Wall Street's estimates and putting its $2B credit card receivables portfolio up for sale.

Nordstrom is a fashion specialty retailer, offers apparel, shoes, cosmetics, and accessories for women, men, and children in the United States. It operates in two segments, Retail and Credit. The Retail segment offers a selection of brand name and private label merchandise. The Credit segment operates Nordstrom fsb, a federal savings bank, which provides a private label credit card, two Nordstrom VISA credit cards, and a debit card.

[Related -Nordstrom, Inc. (JWN) Q4 Earnings Preview: Trends Say Strong Quarter, But So What!]

A few brokers upped their opinions and price-targets on the fashion specialty retailer following the well-received announcement.

RBC Capital raised its price target to $75 from $67. The firm says the positive comparable sales trend will continue, which should drive the stock higher.

Meanwhile, over at Credit Suisse, they changed their opinion to "Outperform" from "Neutral" as the analyst believes the credit division sale will unlock earnings growth and push shares to a target of $78.

Seventy-five or seventy-eight, not much of a difference; let's see how likely either target is based on current earnings and sales projections while using recent price-to-earnings (P/E) and price-to-sales (P/S) valuations.

[Related -Macy's, Inc. (M): The One Department Store Stock You Can Trust]

For the current year, fiscal (FY) 2015, Wall Street forecasts $3.85 in earnings-per-share (EPS) and $4.23 next year. The bottom-line numbers will come compliments of top-line revenue of $13.35 billion this year and $14.43 billion in FY 2016.

Since 2009, JWN carried an average P/E of 16.82, which is a little lower than today's 18.86. According to the calculator, Nordstrom shares would price out at $64.76 and $71.15. The potential targets are based on current consensus EPS estimates for this year and next using the average P/E.

On the sales front, again using the consensus estimates for FY 15 and 16 and average P/S ratio of 0.95, the trusty calculator spits out potential landing spots for JWN of $66.86 and $72.27.

Overall: Likely upward revisions notwithstanding, Nordstrom, Inc. (NYSE:JWN) will need to trade at about a 6% premium versus its average P/E and P/S ratio to hit the $75 mark based on current sales and EPS estimates. However, if sales and earnings accelerate as RBC Capital and Credit Suisse project, then JWN won't have to do any better than average to meet $75 or $78. 

Highlights From the Advanced Micro Devices (AMD) Presentation at the JPMorgan Tech Conference (INTC & NVDA)

Lisa Su, the SVP and GM of Global Business Units for Advanced Micro Devices, Inc (NYSE: AMD) along with Ruth Cotter, the Director of Investor Relations, have just given a presentation at the JPMorgan Global Technology, Media and Telecom Conference that investors in the company along with Intel Corporation (NASDAQ: INTC) and NVIDIA Corporation (NASDAQ: NVDA) might want to take a look at. I should first mention that we previously had an open position in Advanced Micro Devices in our SmallCap Network Elite Opportunity (SCN EO) portfolio from roughly last summer up until late January when we locked in a small loss. We got out not because we don't believe in AMD's long term potential, but because our SCN EO is a trading portfolio rather than a long term buy and hold portfolio. In addition, AMD's shares had sunk again after the company reported earnings – a repeat performance of what happened after the last three previous earnings reports. With that in mind, here are some highlights from the AMD presentation at the JPMorgan Global Technology, Media and Telecom Conference (Note: There is a transcript available on SeekingAlpha here):

Product Transition. Followers of Advanced Micro Devices will probably already know this bit of info, but its also worth reiterating:

"If you look in 2012, our business was probably over 95% index to the PC market. And we know that the PC market has continued to have volatility, particularly on the consumer side. We have said that in 2013 due to our ramp in game consoles that we've been able to diversify our business, so about 30% outside of the PC business; 70% still in the PC business. And by the end of 2015 what you will see from us is that we'll have about a 50-50 mix between PC business and growth markets."

Could AMD Go Into Mobile? When asked about whether Advanced Micro Devices could go into mobile, Lisa answered:

"So I think to your question of could AMD go into mobile, we could. When you look at mobile though, we should distinguish let's called smartphones and let's call it higher end tablets two-in-ones notebook PCs. We're not selecting smartphones as a market for AMD. And it's a relatively crowded market and it's not a place that we can uniquely differentiate in a standard product. However, when you look at the higher end of new form factor notebooks, tablets two-in-ones, other mobile devices I think you will see AMD in those and you will us there with both x86 and ARM."

The Server Market. Lisa was asked whether there is a "number in mind of the server market that you think could be ARM in say five years" with her reply being:

"So this is like a crystal ball that none of us -- whatever number we put out there is probably going to be wrong. But let's say our view is it could be 20%, 25% of the market in the 2018, 2019 timeframe. And very important for to be double digits, very important to get the early adopters to demonstrate the capability, but I think from everything that we see, from everything that I see talking to customers, there is a strong, both interest as well as desire to commit resources to making that software investment."

The PC Market and End of XP. On the subject of the PC market, Lisa said:

"…when we ended last year, we were actually planning for pretty conservative PC condition, so we had talked about perhaps down 10% in 2014. We recently updated that and we think it's a little bit better than that, maybe somewhere 7% to 10%.The big season for PCs is going to be the second half of the year as it always is. So from everything we see in the first half of the year, it's behaving as we would expect. Customers are building up now for the back-to-school cycle and looking at how the holiday season will perform."

The Balance Sheet. Regarding AMD's balance sheet and debt load, Ruth stated:

"So, we are very focused on reducing our debt profile. Our debt today is about $2 billion. Our optimal cash balance, just to keep cash about $1 billion dollar. But we have a minimum threshold of about $600 million. We've consistently kept it at $1 billion for the last five quarters. In terms of free cash flow generation, it's our expectation that we'll continue to generate free cash flow this year and incremental dollars above the $1 billion threshold, we would like to prefer that towards debt reduction and in time and that we'll continue to focus on the balance between our core and growth businesses as we think about attributing those incremental dollars towards [desk]."

She then said that AMD hasn't stated a leverage target yet and that there is a CFO who has been in place for about 12 months now.

"And the primary goal was to show stability in the balance sheet in terms of cash maintenance and debt maintenance. And we've just pushed out some of our debt -- our near-term debt. We have $500 million due coming up. So we've pushed that out. In terms of the near-term debt maturities, now we've pushed to three years, in three years time. And as I say, I think as you see the stability that meets our reference to the overall business model and sustainable profitability and we'll then look at how we start reducing that $2 billion goal."

The Evolving Data Center. During the Q and A, someone commented that there is talk about how some big firms with their own data centers want to design their own server chips. Lisa responded by saying:

"My belief is that it's the following: It's very expensive to maintain your own chip design team. If you think about chip design and manufacturing, there are few companies who can do that in a fully integrated manner. Apple and Samsung are two of them in the consumer space. I don't think you see so many in the enterprise space. So I think the likely spectrum is there will be customization. And I think from our standpoint, we think AMD is a great partner because of the IP that we bring to the table. The customization could be in the avenue of special IP or could be in the avenue of special software or could be a fully custom chip. And I think the more flexibility that we can offer the customer set, the better they can make a trade off in their business model."

Share Performance. On Tuesday, small cap Advanced Micro Devices fell 0.98% to $4.05 (AMD has a 52 week trading range of $3.04 to $4.65 a share) for a market cap of $3.09B plus the stock is up 5.2% since the start of the year, down 0.49% over the past year and up 1% over the past five years.

Finally, here are the latest technical charts for Advanced Micro Devices along with Intel Corporation and NVIDIA Corporation:

SmallCap Network Elite Opportunity (SCN EO) had an open position in AMD. To find out what other open positions SCN EO currently has, and to learn why so many traders and investors are relying on this premium subscription service, click here to find out more.