You Saw It Coming? Yeah, Right!

Everyone knew that the market had to crash around 2008. With real estate appreciating in value the way it was, even an idiot could see disaster coming, right?

Not so fast. A quick look at the headlines in early 2008 on Google's Archives Search will paint a different picture.

For instance, in January of that year, a professional real estate organization predicted that the Florida housing market had hit rock-bottom in the spring of 2007, and was "expected to begin to recover during the next several years."�

Instead, 2008 saw single-family home sales in the state drop 4%, while the average selling price was 20% lower.�

In essence, almost nobody saw the crash coming. It would have been impossible for the market to drop almost 50% in a six-month time frame -- as it did between September 2008 and March 2009 -- if there were factors that were "obviously" at play.

And yet, we continue to think�we can predict the future.�

The hindsight bias
I've been investigating�lots of different biases�that can ruin our investment returns. What we're talking about today is the hindsight bias: our tendency to look at past events as though they were imminently predictable.

I've mentioned before�how the recency bias ruined an investment I made in Netflix (NASDAQ: NFLX  ) . But the company is also the perfect example of hindsight biases at work.

Though much of the company's 60% decline in 2011 was due to the shift from mail-order DVDs to the high-cost content acquisition of streaming, CEO Reed Hastings didn't help out his company's stock one bit. His cold notice to subscribers that prices were increasing markedly turned his company from a favorite to a national foe overnight. I was so shocked that I even engaged in a dialogue with him about it.

Though I -- and many other investors who got burned -- would like to believe that there were signs everywhere of Hastings' disregard for his customers, it's mostly hogwash.

There's no way I could've seen it coming.

What you can do
Though thinking you could've predicted the past is silly, it's relatively harmless. It's when we take this belief and apply it to the future that we get in trouble.

That's why, according to Michael J. Mauboussin, chief investment strategist at Legg Mason Capital Management and adjunct professor of finance at the Columbia Business School, it's so important�to keep an investing journal.

"When you've got a decision-making journal, it gives you accurate and honest feedback of what you were thinking at that time," Mauboussin says.

If you're thinking of investing in Netflix now, after it's wowed Wall Street�, write down your reasons for doing so.

And while you're at it, check out our�brand-new premium report on Netflix. Inside, you'll learn about the key opportunities and risks facing the company, as well as reasons to buy or sell the stock. We're also offering a full year of updates as key news hits, so make sure to click here and claim a copy today.

Campbell Soup Beats Analyst Estimates on EPS

Campbell Soup (NYSE: CPB  ) reported earnings on Feb. 15. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Jan. 27 (Q2), Campbell Soup met expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue grew and GAAP earnings per share shrank.

Margins contracted across the board.

Revenue details
Campbell Soup reported revenue of $2.33 billion. The 14 analysts polled by S&P Capital IQ expected to see revenue of $2.32 billion on the same basis. GAAP reported sales were 10% higher than the prior-year quarter's $2.11 billion.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.70. The 17 earnings estimates compiled by S&P Capital IQ predicted $0.66 per share. GAAP EPS of $0.60 for Q2 were 6.3% lower than the prior-year quarter's $0.64 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 35.1%, 330 basis points worse than the prior-year quarter. Operating margin was 13.2%, 180 basis points worse than the prior-year quarter. Net margin was 8.1%, 160 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $2.03 billion. On the bottom line, the average EPS estimate is $0.57.

Next year's average estimate for revenue is $8.51 billion. The average EPS estimate is $2.54.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 497 members out of 557 rating the stock outperform, and 60 members rating it underperform. Among 189 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 178 give Campbell Soup a green thumbs-up, and 11 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Campbell Soup is hold, with an average price target of $35.80.

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IDEXX Laboratories Stays On Its Margin Hot Streak

Margins matter. The more IDEXX Laboratories (Nasdaq: IDXX  ) 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 IDEXX Laboratories's competitive position could be.

Here's the current margin snapshot for IDEXX Laboratories over the trailing 12 months: Gross margin is 54.1%, while operating margin is 20.3% and net margin is 13.8%.

Unfortunately, a look at the most recent numbers doesn't tell us much about where IDEXX Laboratories has been, or where it's going. A company with rising gross and operating margins often fuels its growth by increasing demand for its products. If it sells more units while keeping costs in check, its profitability increases. Conversely, a company with gross margins that inch downward over time is often losing out to competition, and possibly engaging in a race to the bottom on prices. If it can't make up for this problem by cutting costs -- and most companies can't -- then both the business and its shares face a decidedly bleak outlook.

Of course, over the short term, the kind of economic shocks we recently experienced can drastically affect a company's profitability. That's why I like to look at five fiscal years' worth of margins, along with the results for the trailing 12 months, the last fiscal year, and last fiscal quarter (LFQ). You can't always reach a hard conclusion about your company's health, but you can better understand what to expect, and what to watch.

Here's the margin picture for IDEXX Laboratories over the past few years.

Source: S&P Capital IQ. Dollar amounts in millions. FY = fiscal year. TTM = trailing 12 months.

Because of seasonality in some businesses, the numbers for the last period on the right -- the TTM figures -- aren't always comparable to the FY results preceding them. To compare quarterly margins to their prior-year levels, consult this chart.

Source: S&P Capital IQ. Dollar amounts in millions. FQ = fiscal quarter.

Here's how the stats break down:

• Over the past five years, gross margin peaked at 54.1% and averaged 52.5%. Operating margin peaked at 20.3% and averaged 18.5%. Net margin peaked at 13.8% and averaged 12.6%.
• TTM gross margin is 54.1%, 160 basis points better than the five-year average. TTM operating margin is 20.3%, 180 basis points better than the five-year average. TTM net margin is 13.8%, 120 basis points better than the five-year average.

With TTM operating and net margins at a 5-year high, IDEXX Laboratories looks like it's doing great.

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Do Samsung and Google Have the Next "Next Big Thing"?

Anyone who has been near a television on the last several months is likely familiar with Samsung's tagline for its Galaxy line of devices: "The next big thing is already here." In the last few days, rumors of a new Apple (NASDAQ: AAPL  ) iDevice in a wristwatch form factor have been sweeping the Internet; when coupled with a link being made between an iWatch and the new ultra-thin, flexible Willow Glass�from Corning (NYSE: GLW  ) , the potential is interesting. While this is very exciting news, to be sure, especially considering Apple's need to amaze the market with a new advanced product, Apple is not alone in this quest... or even really first.

Samsung recently unveiled its version of the bendable screen. Google (NASDAQ: GOOG  ) , which has been neck-and-neck with Apple in many respects for some time, already has a version of the smart watch, although everyone seems to be only vaguely aware of its existence. As much of the tech world begins a discussion of wearable computers, Google should be at the center of the conversation.

Coolest phone in the Galaxy
Samsung dazzled onlookers at this year's CES when it demonstrated its bendable OLED technology. The company presented prototypes of curved screens, flexible handheld devices, and demonstrated a unique design advantage of the Youm technology. One possibility for devices that utilize this technology is that they can incorporate displays that wrap around the edge of the devices they protect. In the exhibition by Samsung, the company rep demonstrated how even with the device's cover closed, a text message could be displayed on the side of the device. By this estimation, it appears that Samsung is well ahead of anyone in bringing such a device to market; that is good news for Google, since the leading Galaxy devices operate on the Android OS.

Hello, Moto
Another area in which Google is already arguably ahead of the pack is with the release of a smart watch. The company's Motorola division already sells the Motoactv sports watch. Not only does this device combine a GPS tracker, smart MP3 player, and heart rate monitor into a single device, it is capable of communicating with a linked smartphone running the Motoactv Android app. You can receive texts, calls, tweets and other posts right on your watch. The phone also features Corning Gorilla Glass, the precursor to Willow Glass.

While the Motoactv is not the full-feature smart watch that the Apple folks may be working on, this is an integrated product that is already on the market. To be fair, you cannot browse the web on the tiny screen, but now that the device exists, upgrades are always an option. Given the fact that the device already utilizes Corning technology, the ultimate inclusion of Willow Glass does not seem unreasonable.

In a recent interview with Bloomberg, FitBit co-founder Eric Friedman discussed some of the applications of wearable technology. In you are unfamiliar with FitBit, it is a small, wearable device that you attach to your clothes and wear throughout the course of the day. The device collects data that can then be downloaded to your smartphone or computer and analyzed. The FitBit collects what Friedman refers to as "wellness" data, covering information like calories burned, steps taken, and sleep patterns.

While Friedman agrees that the watch is an interesting form factor, for his company, the objective is to make wearable technology more fully integrated with what the user is trying to accomplish. To this end, the Motoactv has a clear lead on the competition. For example, the device learns which songs in your playlist tend to motivate you based on biometric data, and then plays those songs when you seem to be struggling. The device has not been hyped, but it is unquestionably the first wave in full integration between wearable technology and your smartphone.

The next big thing?
Given the constant state of flux of the technology market, it is a challenge to determine what the next big thing will actually be, but there seem to be several options on the horizon. Whether Samsung's Youm technology makes it into the new Galaxy S IV and changes the way smartphones are perceived, or Google's Motoactv becomes the precursor for an entire new wave of smart products, it seems apparent that Google is directly in the middle of the mix. As such, given this positioning as well as many other positives, Google absolutely belongs in your technology portfolio.

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Winmark Whiffs on Revenues

Winmark (Nasdaq: WINA  ) reported earnings on Feb. 27. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 29 (Q4), Winmark whiffed on revenues and missed estimates on earnings per share.

Compared to the prior-year quarter, revenue contracted slightly. Non-GAAP earnings per share contracted significantly. GAAP earnings per share contracted significantly.

Gross margins expanded, operating margins grew, net margins dropped.

Revenue details
Winmark chalked up revenue of $13.1 million. The one analyst polled by S&P Capital IQ predicted sales of $15.4 million on the same basis. GAAP reported sales were the same as the prior-year quarter's.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.39. The one earnings estimate compiled by S&P Capital IQ averaged $0.55 per share. Non-GAAP EPS of $0.39 for Q4 were 54% lower than the prior-year quarter's $0.84 per share. GAAP EPS of $0.34 for Q4 were 58% lower than the prior-year quarter's $0.80 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 91.5%, 190 basis points better than the prior-year quarter. Operating margin was 53.1%, 90 basis points better than the prior-year quarter. Net margin was 13.4%, much worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $14.4 million. On the bottom line, the average EPS estimate is $0.77.

Next year's average estimate for revenue is $61.8 million. The average EPS estimate is $3.55.

Investor sentiment
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 33 members out of 47 rating the stock outperform, and 14 members rating it underperform. Among 19 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 12 give Winmark a green thumbs-up, and seven give it a red thumbs-down.

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How Telecoms Lifted the Dow Without Lifting a Finger

The Dow Jones Industrial Average (DJINDICES: ^DJI  ) is up 51 points as of 1:50 p.m. EST, coasting comfortably above the 14,100 mark. A significant portion of the day's gains come from the telecom industry, where the two blue-chip Dow representatives just had their favorable status quo reinforced.

Verizon (NYSE: VZ  ) climbed 1.1%, and AT&T (NYSE: T  ) added 1% to its value. But it's not as if Ma Bell and Big Red went out of their way to make these jumps happen. Rather, the American telecom industry just sagged a little bit around the two giants' feet.

Prepaid-cellphone specialist Leap Wireless (NASDAQ: LEAP  ) recently added the Apple (NASDAQ: AAPL  ) iPhone to its product portfolio. The move was expected to boost Leap's fortunes, because many customers have left its Cricket service in search of a service provider that sells and supports the iPhone. But Apple didn't turn out to be quite the panacea that Leap had expected.

The company recently reported fourth-quarter results, losing another 200,000 subscribers despite the new iPhone offering. Today, analysts finished digesting the numbers and came away convinced that unsold iPhones and a large contractual commitment to Apple will add up to big trouble this summer.

The grand experiment of doing away with large up-front subsidies in exchange for lower monthly subscriber fees hasn't worked out so far. Consumers see not the long-term savings, but rather an immediate sticker shock -- and back to the traditional providers they go.

That's not only a small boon for AT&T and Verizon as they absorb some of the failed Cricket sales, but also a vote of consumer confidence in the subsidized model. Leap sank 3.5% on this analysis, which also boosted the Dow-bound telecoms.

There is a debate raging as to whether Apple remains a buy. The Motley Fool's senior technology analyst and managing bureau chief, Eric Bleeker, is prepared to fill you in on reasons both to buy and to sell Apple, as well as what opportunities remain for the company (and your portfolio) going forward. To get instant access to his latest thoughts on Apple, simply click here now.

Financials Are Cheap According to This Metric

Valuation can be an inexact science, with multiple people often getting different numbers for the same company. It could simply be the difference between one's expectation for anticipated growth, or possibly some qualitative factor that is weighed more heavily by one person over the other. With so many different ways to look at where a company might be going, it can get a little overwhelming at times if you try to do something yourself.

One quick valuation tool that I favor is the Graham number. I discussed this number in depth last year, and every so often, I like to take a look at the stocks of the S&P 500 to see if there are any great values based on Graham number valuations. Luckily for us, Benjamin Graham gave us a quick shortcut�to help us determine whether or not a stock is considered "cheap": In an ideal situation, the P/E ratio and P/B ratio multiplied together should not exceed 22.5, with a maximum P/E of 15 and P/B of 1.5. It is then that we can use the Graham number to calculate potential upside for any number of stocks.

The quick test narrows the field
In my latest examination of the S&P 500, an interesting trend emerged. While looking for companies that met Graham's quick test above, I was left with 47 companies�from various industries and sectors. The surprising thing about this list, however, was the prevalence of companies from the financial sector.

More than half of the companies -- 27 in total -- came from this sector, helping to show that there might be a lot of value in this often beaten-down sector. When I actually calculated the Graham numbers for all 47 companies, financial companies took center stage once again.

Financials lead the way!
The formula for the Graham number is pretty straightforward: Multiply earnings per share by book value per share, then multiply that by 22.5, and finally take the square root. The result, in dollars, is the Graham number. Of the 47 companies that passed the quick test, only one -- consumer goods maker Mondelez International (NASDAQ: MDLZ  ) -- currently trades above its Graham number valuation. The remaining 46 companies all have room to grow into their current Graham number, but the five with the most upside all came from the financial sector, with four of the five being insurance companies:

Company	EPS (TTM)	Book Value Per Share (MRQ)	Graham Number	Recent Price	Upside
Genworth Financial (NYSE: GNW  )	$0.65	$33.62	$22.17	$8.26	168.5%
Lincoln National Corp (NYSE: LNC  )	$4.56	$54.71	$74.92	$28.49	163%
Assurant (NYSE: AIZ  )	$5.67	$64.84	$90.95	$40.65	123.7%
SunTrust Banks (NYSE: STI  )	$3.59	$37.87	$55.31	$27.40	101.9%
Unum Group (NYSE: UNM  )	$3.17	$31.87	$47.68	$23.80	100.3%

Source: Yahoo! Finance and author's calculations; TTM: trailing 12 months; MRQ: most recent quarter.

Why so cheap?
Any time a company trades at a dramatic discount, it is important to look at the reasons. Genworth Financial, for example, has fallen recently as it tries to divest itself of some poor performing segments. It also joined Lincoln National in running into some problems last fall as the state of New York began investigating the practice of captive insurance and managing risk. Assurant felt the wrath of Hurricane Sandy last October and has seen a (hopefully) short-term impact from claims arising from that storm.

Foolish bottom line
Because my primary focus tends to be in the financial sector, over the next few weeks, I will take a closer look at the 27 financial companies that are "cheap" according to Graham and determine if they have potential beyond a cheap valuation. As in the case of Assurant, it could simply be short-term forces bringing down the price, or it could be something that could linger with the company for the long term.

While I will focus primarily on financials, that doesn't mean that you can't look at the other 19 companies in the S&P 500 that are currently trading at a discount to their Graham numbers. I personally think the Graham number is a useful jumping-off point when first looking at a stock, and it doesn't require a whole lot of effort to calculate.

Though it didn't make the top five, American International Group�still trades at a discount to its own Graham number valuation, but that could be for different reasons. After bringing the financial world to its knees, most investors are wary about owning a stake in AIG today. We'll fill you in on both reasons to buy and reasons to sell AIG, and what areas AIG investors need to watch going forward. Just click here now for instant access.

Nissan to Add 500 Quick-Charging Stations

In an attempt to jump start interest in its plug-in electric vehicles, Nissan today announced plans to add at least 500 quick-charging stations throughout the U.S.

"Having a robust charging infrastructure helps build range confidence, which boosts interest in and use of electric vehicles," said Brendan Jones, Nissan's director of electric vehicle� marketing, in a statement.

Nissan's strategy includes bringing the first fast-charge network to the Washington, D.C. metropolitan area, which will include 40 stations capable of bringing a Nissan Leaf up to an 80% charge in less than 30 minutes, according to Nissan.

Nissan will partner with NRG Energy in the operation of these quick-charging stations. NRG Energy currently operates fast chargers in Houston and the Dallas/Fort Worth area, and plans on adding more networks to San Francisco, Los Angeles, San Diego, and the San Joaquin Valley.

"It's another way to give electric vehicle drivers more flexibility to run errands and make other stops between work and home," said Nissan's Jones.

Ford Earnings Breakdown: Still Built to Last?

I went out on a limb last week stating that I was confident Ford would beat estimates, by nearly a dime, at 35 cents a share. I was a little ambitious, as its net income was 40 cents per share, but its quarterly adjusted numbers came in at 31 cents a share, well above the consensus estimate of 26 cents. Finally, investors who had waited patiently for Ford's (NYSE: F  ) stock to take off have been rewarded, as the stock has recently been on a tear. So why are the shares down this morning after beating estimates? I'll cover the details, show you what you need to know, and take a look at what Ford is saying about the first quarter of 2013.

By the numbers
Ford's fourth-quarter revenue, versus 2011, was up 1.9% to $36.5 billion, but full-year 2012 lagged behind 2011 total's by $2.0 billion. Ford's full-year, pre-tax profit was $8 billion; the company had the best fourth quarter in more than a decade, which it did with a beefy operating margin of 10.4%. Companywide fourth-quarter net income was $1.6 billion, which is $565 million higher than in 4Q 2011, excluding the boost given last year from deferred tax assets. The full-year net income was $5.7 billion, or $1.42 per share. Both of those numbers, while strong, were slightly lower than 2011 mainly due to Europe's losses being larger than previously estimated. Increased revenue in a strong North American market helped offset these losses to beat the Street's estimates.�

Investors looking ahead
Let's take a look at two quick factors that are playing a role in the stock price decline this morning. The biggest concern, Europe, is uglier than anticipated. For the fourth quarter, Ford lost $732 million compared to losing $190 million in the prior year. For the full-year 2012, Ford lost $1.75 billion compared to previous estimates of $1.5 billion. Recently Morgan Stanley analyst Adam Jonas had predicted Ford would be able to break even before mid-decade. He made this prediction based on Ford's quick management actions to close plants and contain pension costs. Looking at the larger losses, and comments from the conference call this morning, we�shouldn't�expect Ford to break even in Europe until the mid-decade mark. Ford has announced plans to cut capacity 18%, and hopes to minimize losses by closing three plants. Following this hit, each quarter will be important, as losses in Europe are expected to worsen and top $2 billion this year.�

Another factor to follow is Ford Credit projects. For the year, these accounted for $1.71 billion in pre-tax profits, which was down from $2.4 billion in 2011. This substantial drop has a simple explanation behind it: higher-yielding assets financed in previous years are running out and being replaced by much lower-interest financing. Investors should follow this and see if the low-interest financing has bottomed out, or if we'll continue to see weakness.

Enough of the bad news
There is plenty to be thrilled about. Ford recorded $1 billion in automotive operating-related cash flow, good for its 11th straight quarter of positive performance. This is no doubt one of the reasons Ford felt confident enough to double its quarterly dividend about two weeks ago. One bit of information I am happy to see is that Ford ended 2012 with automotive gross cash of $24.3 billion, exceeding debt by $10 billion and extending its liquidity position by $2.1 billion over the previous year. An improving North American auto market is only part of the reason for these positives. After the deep recession, automakers had a tough lesson to learn; it was imperative that Ford control costs and increase efficiency to be profitable if vehicle sales dropped by the millions. Alan Mulally's "One Ford" plan has done this extremely well by focusing on these four points:

Aggressively restructuring to operate profitably at the current demand and changing model mix

Accelerating the development of new products that customers want and value

Financing the plan and improving the balance sheet

Working together effectively as one team, leveraging Ford's global assets

Job well done, but don't take it from me. "The Ford team delivered strong results once again, underscoring that our One Ford plan is working," said Mulally. "We are well positioned for another strong year in 2013, as we continue our plan to serve customers in all markets around the world with a full�family of vehicles�� small, medium and large; cars, utilities and trucks�� with the very best�quality, fuel efficiency, safety, smart design and value."�

2013 takeaway
In the fourth quarter, company production was up 1.5 million units, an increase of 125,000 from 2011, and beating recent guidance by 13,000. For the full year, it produced 5.7 million units, an increase of 54,000 from last year. What's more important, is that the company expects the first quarter of 2013 production to be up 160,000 units to 1.6 million, versus 2012. Comparing first quarter of 2013 to the fourth quarter 2012, production is up 72,000 units. Analysts expect the global market to increase yet again in 2013, and this should bode well for Ford. It expects a strong 2013 year with operating profit to be equal to 2012, operating margin to be about equal, and cash flow related to automotive operating to be higher.

Bottom line
Even with the stock price down today after the earnings report, there is plenty for investors to be excited about. Expect Mulally's "One Ford" plan to continue to improve efficiency and add to the bottom line. Expect a stronger North American market, demanding high-margin trucks, to keep bringing in the profits. There is reason for concern as the situation in Europe is dismal, but I think the negative reaction this morning is only temporary. Make no mistake, if management continues to make sound decisions, produce popular vehicles, and keep the hard lessons learned from the recession in mind, the future remains brighter for Ford than ever before.

Ford's stock is down after the earnings report: Does this create an incredible buying opportunity, or are there hidden risks with the stock that investors need to know about? Check our premium report for recent updates to follow on whether Ford is a buy right now, and why. Simply�click here to get instant access to this premium report.

Does The Street Have NTELOS Holdings Figured Out?

NTELOS Holdings (Nasdaq: NTLS  ) is expected to report Q4 earnings on Feb. 28. Here's what Wall Street wants to see:

The 10-second takeaway
Comparing the upcoming quarter to the prior-year quarter, average analyst estimates predict NTELOS Holdings's revenues will expand 11.6% and EPS will increase 15.4%.

The average estimate for revenue is $118.3 million. On the bottom line, the average EPS estimate is $0.30.

Revenue details
Last quarter, NTELOS Holdings logged revenue of $114.5 million. GAAP reported sales were 6.6% higher than the prior-year quarter's $107.4 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
Last quarter, non-GAAP EPS came in at $0.24. GAAP EPS of $0.22 for Q3 were 65% lower than the prior-year quarter's $0.63 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Recent performance
For the preceding quarter, gross margin was 59.6%, 660 basis points worse than the prior-year quarter. Operating margin was 12.0%, 420 basis points worse than the prior-year quarter. Net margin was 4.0%, 840 basis points worse than the prior-year quarter.

Looking ahead

The full year's average estimate for revenue is $455.2 million. The average EPS estimate is $1.15.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 122 members out of 129 rating the stock outperform, and seven members rating it underperform. Among 30 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 29 give NTELOS Holdings a green thumbs-up, and one give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on NTELOS Holdings is outperform, with an average price target of $23.60.

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What’s Bugging Bank of America?

Although Italy's unsuccessful election has been giving markets the jitters this week, this fact doesn't excuse the drubbing Bank of America (NYSE: BAC  ) has been getting lately. After rising above the $12 level briefly twice this year, the big bank just can't seem to keep its proverbial head above that watermark. I'm finding this difficult to understand, mainly because of two big upcoming events: the Fed's unveiling of its bank stress test results on March 7, and the attendant results of the Comprehensive Capital Analysis and Review of bank holding companies.

Of course, peers JPMorgan Chase (NYSE: JPM  ) , Wells Fargo (NYSE: WFC  ) , and Citigroup (NYSE: C  ) will be rated, too. But it is B of A -- which has come so far since this time last year that it is poised to ace these tests with its newly svelte balance sheet and super-charged 9.25% capital ratio -- that investors should really be rooting for.

And yet, its stock price remains somewhat anemic, zig-zagging between the $11 mark and $12.25 or so. Why aren't investors excitedly bidding it up? If the idea of a stellar bill of financial health, with its attendant stock buybacks and -- drum roll, please -- dividend hike can't get investors enthused, what will?

Admittedly stumped over this conundrum, I decided to take a look around to see if I could perhaps identify the issues keeping the big guy from basking in what I consider to be well-deserved pre-test-win glory.

Problem: CEO Moynihan's raise
Stuff really seemed to hit the fan shortly after the media splashed the news that CEO Brian Moynihan has scored a compensation increase for 2012, and an actual pay raise for this year. Now, considering all that the man has done to get the big bank into ship-shape, it seems petty for investors to punish the stock over this bit of news.

After all, B of A's stock did an amazing about-face last year, doubling in value�-- albeit from a very low baseline. But, since the stock began falling the very next day, I think it is safe to say that this announcement had something to do with it. Why would this be?

A Forbes editorial may shed some light on this issue. The author thinks the stock award is not performance-based enough, since only half of the total award of 926,238 shares was performance-based. Of the 463,119 shares that were based on that metric, half again would vest only if the bank meets certain goals for gains in adjusted tangible book value, while the other half would vest on achievement of specific targets for return on assets.

Where's the problem, you ask? The columnist points out that fully half these shares will pay out pretty much no matter what, even if the bank only maintains�its current gains. As for the performance-based awards, the value will be determined at the end of 2015, though the exact measurements needed for vesting haven't been revealed. This differs from 2011, when Moynihan's entire stock award was based on performance targets.

Perhaps investors feel, too, that more of Moynihan's compensation should be based on performance metrics. For example, JPMorgan's Jamie Dimon took a pay cut of approximately 50% from 2011 levels to $11.5 million last year because of losses incurred during the London Whale fiasco.

However, despite the brouhaha about Citi's former CEO Vikram Pandit's pay last year, new chief Michael Corbat was paid $11.5 million for 2012, including a nice $4.2 million bonus, an anomaly for bankers last year. But, the bank's board has revamped the way executives are paid, putting more emphasis on performance. Considering that Corbat was Citi's CEO for only the last quarter of 2012, however, his pay package sounds like a much better deal than Moynihan's.

Problem: Settlements over crummy mortgages keep eating at profits
Despite being forewarned about charges due to settlements of battles such as the $11 billion Fannie Mae put-back request dispute, investors seemed unimpressed by the deck-clearing that these settlements produced. This could be because there is still much uncertainty�about how much more shareholders can expect to see regarding toxic mortgage issues, or it could another type of concern: earnings.

Though Moynihan has been insisting that his bank is planning a move back into the mortgage lending biz, investors must surely have felt glum when they saw how many more mortgages peers JPMorgan and Wells Fargo made last quarter. Plus, actually making that plan a reality is going to be tough�considering the bank's still-weighty legacy loan issues, as well as the fact that its customer service track record in that regard is hardly stellar.

But as investors know, the Fed will want banks undergoing the stress tests to have some plan in place showing that future earnings will be hale and hearty. That, after all, may be the true reason investors have been withholding their enthusiasm thus far.�

Bank of America's stock doubled in 2012. Is there more yet to come? With significant challenges still ahead, it's critical to have a solid understanding of this megabank before adding it to your portfolio. In The Motley Fool's premium research report on B of A, analysts Anand Chokkavelu, CFA, and Matt Koppenheffer, Financials bureau chief, lift the veil on the bank's operations, including detailing three reasons to buy and three reasons to sell. Click here now to claim your copy, and as an added bonus, you'll receive a full year of FREE updates and expert guidance as key news breaks.

Time to Buy This Dow Stock?

The following video is from Monday's�MarketFoolery�podcast, in which host Chris Hill, along with analysts Jason Moser and Andy Cross, discuss the top business and investing stories.

In this segment, the guys discuss Caterpillar (NYSE: CAT  ) , which saw its net income halved because of a writedown�in China as well as acquisition-related accounting problems. While the writedown isn't a big deal for Caterpillar's overall business, it does invite questions about management's�judgement. Andy points out that there are inherent risks in investing, and that CAT's problems serve as a reminder that you have to be diversified across industries and market caps. For the full story, be sure to check out the following video segment.

Caterpillar is the market-share leader in an industry in which size matters, and its quality products, extensive service network, and unparalleled brand strength combine to give it solid competitive advantages. Read all about Caterpillar's strengths and weaknesses in our brand-new report. Just click here to access it now.

The relevant video segment can be found between 00:35 and 6:56.

For the full video of today's MarketFoolery podcast, click here.

ConocoPhillips Increases Sales but Misses Estimates on Earnings

ConocoPhillips (NYSE: COP  ) filed its 10-K on Feb. 19. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), ConocoPhillips crushed expectations on revenues and missed estimates on earnings per share.

Compared to the prior-year quarter, revenue shrank significantly. Non-GAAP earnings per share dropped significantly. GAAP earnings per share dropped significantly.

Gross margins grew, operating margins increased, net margins contracted.

Revenue details
ConocoPhillips reported revenue of $16.37 billion. The four analysts polled by S&P Capital IQ expected a top line of $13.61 billion on the same basis. GAAP reported sales were the same as the prior-year quarter's.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $1.43. The 17 earnings estimates compiled by S&P Capital IQ predicted $1.47 per share. Non-GAAP EPS of $1.43 for Q4 were 29% lower than the prior-year quarter's $2.02 per share. (The prior-year quarter included $1.76 per share in earnings from discontinued operations.) GAAP EPS of $1.16 for Q4 were 55% lower than the prior-year quarter's $2.56 per share. (The prior-year quarter included $1.76 per share in earnings from discontinued operations.)

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 44.4%, 250 basis points better than the prior-year quarter. Operating margin was 21.5%, 320 basis points better than the prior-year quarter. Net margin was 9.3%, much worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $14.51 billion. On the bottom line, the average EPS estimate is $1.38.

Next year's average estimate for revenue is $61.73 billion. The average EPS estimate is $5.81.

Investor sentiment
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 5,622 members out of 5,776 rating the stock outperform, and 154 members rating it underperform. Among 1,443 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 1,415 give ConocoPhillips a green thumbs-up, and 28 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on ConocoPhillips is hold, with an average price target of $61.65.

Is ConocoPhillips the right energy stock for you? Read about a handful of timely, profit-producing plays on expensive crude in "3 Stocks for $100 Oil." Click here for instant access to this free report.

• Add ConocoPhillips to My Watchlist.

Should I Invest in GlaxoSmithKline?

LONDON -- To me, capital growth and dividend income are equally important. Together, they provide the total return from any share investment and, as you might expect, my aim is to invest in companies that can beat the total return delivered by the wider market.

To put that aim into perspective, the FTSE 100 has provided investors with a total return of around 3% per annum since January 2008.

Quality and value
If my investments are to outperform, I need to back companies that score well on several quality indicators and buy at prices that offer decent value.

So this series aims to identify appealing FTSE 100 investment opportunities and today I'm looking at�GlaxoSmithKline� (LSE: GSK  ) (NYSE: GSK  ) , which is one of the world's leading pharmaceutical research and manufacturing companies.

With the shares at 1,463 pence, Glaxo's market cap is 71,670 million pounds.

This table summarizes the firm's recent financial record:

Year to December	2008	2009	2010	2011	2012
Revenue (in millions of pounds)	24,352	28,368	28,392	27,387	26,431
Net cash from operations (in millions of pounds)	7,205	7,841	6,797	6,250	4,375
Adjusted earnings per share (in pence)	104.7	121.2	53.9	114.1	112.7
Dividend per share�(in pence)	57	61	65	70	74

Despite a challenging 2012, Glaxo reckons it has made good progress developing potential new medicines across multiple disease areas including respiratory, oncology, diabetes and HIV that should help to boost forward trading. The one bright spot in the firm's recent full-year trading results was its performance in emerging markets and the Asia-Pacific region, which contributed 26% of revenue that grew in double-digits during the year. All other regions saw sales contract, with the U.S. delivering 32% of revenue, Europe, 28%; Japan, 8%; and other regions, 6%.

The firm has been concentrating on cost control and financial efficiencies, which enabled it to continue with its progressive-dividend policy and its program of share buybacks. Growth in the majority of the company's business may have recently stalled, but the directors are expecting strong cash generation in 2013, which will support increasing dividends, share repurchases of between 1 billion to 2 billion pounds, and further acquisitions.

Investors have been attracted to Glaxo for its dividend yield for some time and I'm sure that such potential income will remain a big part of the firm's total-return potential going forward.

GlaxoSmithKline's total-return potential
Let's examine five indicators to help judge the quality of the company's total-return potential:

Dividend cover:�adjusted earnings covered the last dividend around 1.5 times.�3/5

Borrowings:�net gearing is around 210% with net debt just over twice earnings.�2/5

Growth:�revenue and cash flow have been declining; earnings have been flat.�1/5

Price to earnings:�a forward 12 looks fair compared to growth and yield forecasts.�4/5

Outlook:�mixed recent trading and a cautiously optimistic outlook.�3/5

Overall, I score Glaxo�13�out of 25, which leads me to believe the firm's total-return potential is dependant on its dividend performance, which may struggle to out-perform the wider market.

Foolish summary
Dividend cover is satisfactory and the firm's cash flow helps it cope with its debt. Growth has been negative in most regions but the outlook provides some reassurance. Perhaps due to recent weaker trading, the valuation seems relatively undemanding, which encourages me to believe that, yes, Glaxo could make a solid longer-term investment.�

In fact, it's one of�8 Income Plays Held By Britain's Super Investor. This report analyses the 20 billion pound portfolio of legendary high-yield expert Neil Woodford and is free for a limited time. To discover the other seven of his favorite dividend growth selections,�click here.

Mercadolibre Beats Analyst Estimates on EPS

Mercadolibre (Nasdaq: MELI  ) reported earnings on Feb. 25. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Mercadolibre met expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue increased significantly. Non-GAAP earnings per share grew significantly. GAAP earnings per share increased significantly.

Gross margins contracted, operating margins grew, net margins grew.

Revenue details
Mercadolibre logged revenue of $103.8 million. The nine analysts polled by S&P Capital IQ predicted a top line of $105.3 million on the same basis. GAAP reported sales were 20% higher than the prior-year quarter's $86.5 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.69. The seven earnings estimates compiled by S&P Capital IQ predicted $0.61 per share. Non-GAAP EPS of $0.69 for Q4 were 47% higher than the prior-year quarter's $0.47 per share. GAAP EPS of $0.68 for Q4 were 42% higher than the prior-year quarter's $0.48 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 73.6%, 240 basis points worse than the prior-year quarter. Operating margin was 37.7%, 420 basis points better than the prior-year quarter. Net margin was 29.1%, 410 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $99.8 million. On the bottom line, the average EPS estimate is $0.56.

Next year's average estimate for revenue is $457.1 million. The average EPS estimate is $2.71.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 1,087 members out of 1,160 rating the stock outperform, and 73 members rating it underperform. Among 273 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 260 give Mercadolibre a green thumbs-up, and 13 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Mercadolibre is outperform, with an average price target of $95.78.

Internet software and services are being consumed in radically different ways, on new and increasingly mobile devices. Is Mercadolibre on the right side of the revolution? Check out the changing landscape and meet the company that Motley Fool analysts expect to lead "The Next Trillion-dollar Revolution." Click here for instant access to this free report.

• Add Mercadolibre to My Watchlist.

Why EZchip Semiconductor Tanked Hard

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 EZchip Semiconductor (NASDAQ: EZCH  ) have tanked hard today, down by 26% at the low, after the company reported fourth-quarter earnings.

So what: Revenue in the fourth quarter totaled $15.2 million, resulting in non-GAAP net income of $7.8 million, or $0.26 per share. Those figures were ahead of consensus estimates, which were calling for $14 million in sales and $0.21 per share in adjusted profit. The company incurred a one-time charge of $9.9 million, or $0.22 per share, due to the early repayment to the Israeli Office of Chief Scientist.

Now what: There were some concerns over soft guidance, but Benchmark is defending the stock. Analyst Gary Mobley believes that product cycle ramps are still set to result in strong revenue growth, even if it's inconsistent at times. Benchmark is maintaining its buy rating on EZchip along with its $40 price target. Mobley thinks the concerns over key customers like Tellabs and Huawei are overblown.

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

The amount of data we store every year is growing by a mind-boggling 60% annually! To make sense of this trend and pick out a winner, The Motley Fool has compiled a new report called "The Only Stock You Need to Profit From the NEW Technology Revolution." The report highlights a company that has gained 300% since first recommended by Fool analysts but still has plenty of room left to run. Thousands have requested access to this special free report, and now you can access it today at no cost. To get instant access to the name of this company transforming the IT industry, click here -- it's free.

�

Stocks edge up on earnings; Nasdaq falls

SAN FRANCISCO (MarketWatch) � U.S. stocks eked out modest gains Wednesday after earnings from Time Warner Inc., Wyndham Worldwide Corp. and others reinforced a theme of steady improvement for consumer companies. The Nasdaq Composite ended lower.

The Dow Jones Industrial Average DJIA ended a choppy trading day up 7.22 points, or 0.1%, at 13,986.52. It had fallen as much as 66 points during the session.

Click to Play What chance for Berlusconi?

Silvio Berlusconi, the former Italian prime minister, may be down in the polls but remains the best-known face of Italian politics. .

The S&P 500 Index SPX ended up 0.83 point, or 0.1%, at 1,512.12. Sectors attractive to investors for defensive qualities such as dividends � telecoms and utilities � led the index, followed by consumer discretionary stocks.

�It�s still an earnings-driven story,� said Dan Greenhaus, chief global strategist at BTIG. �Based on investor reaction to consumer stocks, the consumer isn�t doing all that bad.�

Shares of Wyndham Worldwide Corp. WYN gained 6.8%, making it the second-best on the S&P 500, after the hotel operator showed a 45% improvement in profit for the fourth quarter. Read more on Wyndham.

Ralph Lauren Corp. RL shares rose nearly 6% after the apparel retailer�s quarterly earnings beat Wall Street expectations. Read more on Ralph Lauren earnings.

Time Warner Inc. TWX shares gained 4.1% after the media giant reported a surge in fourth-quarter earnings. Chipotle Mexican Grill Inc. CMG shares rose 5.7% after the company�s earnings late Tuesday.

The benchmark indexes spent part of the session lower, and the Nasdaq Composite Index COMP ended down 3.1 points, or 0.1%, at 3,168.48.

The choppy trading this week likely reflects some indecision among investors after the year�s strong start.

�A lot of people are looking at this market and saying, �We�re up 6% in one month,� and they�ve seen no pause since December,� said Robert Pavlik, chief market strategist at Banyan Partners. �People are a little on edge.�

First Solar gets �buy� boost

On the Dow, 3M Co MMM �shares led gains for 19 out of 30 components. Shares of Walt Disney Co. DIS �rose 0.4% following the media conglomerate�s earnings late Tuesday. Read more on Disney earnings.

Blue-chip Hewlett-Packard Co. HPQ ended up 0.5% after a media report said Tuesday that H-P�s board is studying a breakup of the technology company. Read more of H-P considering board breakup on Quartz.com.

Leading the S&P 500, shares of First Solar Inc. FSLR �rose 7.3% after Citigroup initiated coverage on the company Wednesday with a buy rating.

GameStop Corp. GME �shares slumped 6%, the second-worst performer on the S&P 500.

/quotes/zigman/3870025 SPX 1,512.12, +0.83, +0.05% S&P 500 Index

Earlier in the session, a drop in the euro EURUSD � and European stocks was attributed to polls out of Italy concerning Berlusconi�s popularity weeks before Italian elections. Read more on the euro dropping.�

While some polls noted a Berlusconi comeback, which would cause concern among investors as it would likely jeopardize recent Italian reforms, other polls came out to throw cold water on that notion. Read more on shifting Berlusconi polls.

While that may have pressured the euro, using that excuse for a weight on stocks is �kind of ridiculous,� said Pavlik.

�It�s just looking for an excuse,� Pavlik said. �It�s a lack of commitment [from investors].�

Cracker Barrel Up 10% After Healthy Earnings

Shares of restaurant chain Cracker Barrel Old Country Store (CBRL) are up about 10% today to roughly $73.60 after its fiscal second-quarter profit rose 38% and handily surpassed analyst expectations. Revenue was also better than expected, while the company also raised its full-year outlook. The positive results seem to simply be down to increased business and some higher menu prices:

Traffic edged up 0.2 percent in the quarter, while the average check rose 3.1 percent. Menu prices increased, on average, about 2.6 percent…

Restaurant sales at locations open at least a year climbed 3.3 percent, while retail sales at locations open at least a year increased 3.1 percent.

Cracker Barrel Old Country Store Inc. said that bad weather lowered its traffic, restaurant and retail sales at locations open at least a year by approximately 0.3 percent.

Stephen Anderson at Miller Tabak reiterated his Buy rating for the stock in the wake of earnings, as well as his $74 price target. Anderson, who’s had a Buy on the stock since initiating coverage in October 2010, wrote:

The 3.3% gain on restaurant-level comps leaves CBRL far and away the leader among national family dining chains, beating its nearest family dining competitor by 140bps. Management is making significant strides in making its cost structure more efficient, particularly as the company implements IT-based labor and planning tools. Although some of the post-earnings enthusiasm likely will be tempered by management�s in-line EPS guidance for 3Q13 (April),�we still think there could be upside to today�s increased full-year FY13 EPS guidance, particularly as many publicly-traded restaurant companies recently have moderated their outlook for food costs in the next 12 months.

 

Should I Invest in Melrose Industries?

LONDON --�To me, capital growth and dividend income are equally important. Together, they provide the total return from any share investment and, as you might expect, my aim is to invest in companies that can beat the total return delivered by the wider market.

To put that aim into perspective, the FTSE 100 has provided investors with a total return of around 3% per annum since January 2008.

Quality and value
If my investments are to outperform, I need to back companies that score well on several quality indicators and buy at prices that offer decent value.

So this series aims to identify appealing FTSE 100 investment opportunities and today I'm looking at�Melrose Industries� (LSE: MRO  ) , which aims to buy, improve and sell manufacturing businesses.

With the shares at 254 pence, Melrose's market cap. is 3,214 million pounds.

This table summarises the firm's recent financial record:

Year to December	2007	2008	2009	2010	2011
Revenue (in millions of pounds)	289	895	1,299	1,035	1,154
Net cash from operations (in millions of pounds)	15	119	175	118	91
Adjusted earnings per share	5.63p	9.16p	9.44p	9.95p	14.97p
Dividend per share	3.84p	3.98p	4.38p	6.26p	7.39p

Melrose raises money to buy businesses in the stock market, and by taking on debt, then returns the proceeds to shareholders when it sells a business, typically after three to five years of ownership. During the holding period, the company tries to improve its acquired businesses by such things as changing managements' focus, setting strategy and targets, driving operational improvements, investing capex in excess of depreciation, and focusing on operating cash generation.

Right now, the firm owns several businesses in the energy, lifting, and general industrial sectors and, last year, 40% of overall revenue came from North America, 25% from Europe, 17% from the U.K., and 18% from other areas. A typical acquisition occurred during 2012 with Germany-based Elster Group, a manufacturer of metering products sold worldwide, which Melrose financed with a 1.2 billion-pound Rights Issue and a new 1.5 billion-pound bank facility. Balancing transactions occurred with the sale of two businesses, Dynacast and MPC, and the associated return of proceeds to Melrose's shareholders.

At first glance, such transactions make it difficult to appraise Melrose's total-return performance. However, in last year's full-year report, the directors said that since Melrose's flotation in 2003, the firm has achieved investment break-even by paying back shareholders the 785 million pounds in capital raised for acquisitions. Indeed, at a Melrose share price similar to today's, the directors reckoned that shareholders had seen 1.5 billion pounds of value creation from operations.

So, on balance, an investment in Melrose seeks a total return via the level of the share price and the value of dividends paid, as with other investments. On that score, the firm's potential looks encouraging.

Melrose Industries' total-return potential
Let's examine five indicators to help judge the quality of the company's total-return potential:

1. Dividend cover:�adjusted earnings covered last year's dividend just over twice.�4/5

2. Borrowings:�net gearing is around 50% with net debt just over three times earnings.�3/5

3. Growth:�earnings have grown steadily against flatter revenue and cash flow.�3/5

4. Price to earnings:�a forward 13 seems fair compared to growth and yield forecasts.�3/5

5. Outlook:�satisfactory recent trading and a cautiously optimistic outlook.�4/5

Overall, I score Melrose�17�out of 25, which encourages me to believe the firm has potential to out-pace the wider market's total return, going forward.

Foolish summary
There's good dividend cover, and debt seems under control. As might be expected, growth shows up best in the earnings figures as Melrose improves the efficiency of its underlying businesses. The valuation looks fair, given recent trading and the outlook. That encourages me to believe that, yes, I should invest in Melrose Industries, but I'm inclined to wait for share price weakness before taking the plunge.

I'm also keen on a share that one of the Fool's top investment writers has uncovered. He has put his money where his mouth is by investing and believes the share is the�"Motley Fools Top Growth Share for 2013." In this new Fool report, you can discover how the firm has re-envisioned itself to allow for tremendous growth along new horizons. Right now, the report is free to download and tells you exactly why our expert has invested in, and expects strong growth from, this changing company with a strong pedigree. To get your copy,�click here.

Canada Picking up the LNG Export Ball

While several different attempts at projects to export liquefied natural gas, or LNG, from the United States have stalled as the government continues to drag its feet on licensing, Canada's National Energy Board has jumped ahead with the approval of its own site. In this video, Fool.com contributors Tyler Crowe and Aimee Duffy discuss what this could mean for LNG exports in North America and what companies are shaping the LNG story.

The growing production of natural gas from hydraulic fracturing and horizontal drilling is flooding the North American market and resulting in�record-low prices for natural gas. While there are several ways to play this event, Enterprise Products Partners has charted a course that could lead them to a near monopoly in one niche of the natural gas market. To help understand how this company is well-positioned in this unique space for years to come, check out The Motley Fool's new�premium�report on the Enterprise Products Partners by clicking here.

Bernanke Signals Continued Support for Low Rates

WASHINGTON (AP) -- The Federal Reserve's low interest rate policies are giving key support to an economy still burdened by high unemployment, Chairman Ben Bernanke told Congress on Tuesday. Bernanke signaled that the Fed's efforts to keep borrowing costs low will continue.

In a statement, Bernanke acknowledged that the Fed's aggressive program to buy $85 billion a month in Treasurys and mortgage bonds to keep rates low could eventually ignite inflation or unsettle investors. Several Fed policymakers said at their most recent meeting that the Fed might have to scale back its bond purchases because of those risks.

But Bernanke, delivering the Fed's semiannual report to Congress, said the risks remained contained for now.

On budget policy, Bernanke urged Congress to replace the automatic spending cuts due to start Friday with more gradual reductions in budget deficits in the short run.

Bernanke's testimony to the Senate Banking Committee is being watched by investors concerned about the doubts raised by some Fed officials about whether the bond purchases should continue. The bond purchases represent the third round of a program intended to strengthen sectors such as housing and autos through lower borrowing costs.

"Keeping longer-term interest rates low has helped spark recovery in the housing market and led to increased sales and production of automobiles and other durable goods," Bernanke said.

Bernanke addressed concerns that the Fed's purchases, which have pushed its balance sheet above $3 trillion, could trigger high inflation.

"Inflation is currently subdued and inflation expectations appear well-anchored," he said. "We do not see the potential costs of the increased risk-taking in some financial markets as outweighing the benefits of promoting a stronger economic recovery and more-rapid job creation."

Bernanke said that over the past six months, the economy has grown moderately but unevenly. He said the pause in growth seen in the final three months of 2012 "does not appear to be a stalling-out of the recovery." He said growth appears to have picked up in the past two months.

Shortly before Bernanke spoke, several reports pointed to surprising economic strength: Americans' confidence in the economy rebounded this month, new-home sales jumped in January to the highest level since 2008, home prices rose at a healthy pace in December compared with a year ago and profits of U.S. banks jumped last quarter to the highest level in six years.

On the battle in Washington over how to restrain budget deficits, Bernanke said it's important not to cut the deficit too much while economic growth remains fragile. He noted that the Congressional Budget Office estimates that the automatic spending cuts that take effect Friday would trim growth by 0.6 percentage point this year.

"Congress and the administration should consider replacing the sharp, front-loaded spending cuts required by the sequestration with policies that reduce the federal deficit more gradually in the near term but more substantially in the longer run," Bernanke said.

link

Why Zynga Shares Popped

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 Zynga (NASDAQ: ZNGA  ) have popped today by as much as 16% after interstate online gambling inched closer to reality and the company also outlined cost reduction initiatives.

So what: Nevada legalized online gambling last week, which also opens up the possibility of the activity going interstate if other states sign on to offer cross-border gambling services. Zynga has been paving the way to transition its popular Zynga Poker to a real-money game, and investors have been anxiously awaiting signs of Zynga entering the lucrative market.

Now what: Additionally, Zynga also said it was consolidating offices, closing its Baltimore location while beefing up its Texas and New York offices. The changes are intended to reduce costs and increase efficiencies, while only affecting 1% of Zynga's workforce, according to COO David Ko. Zynga recently endured the departure chief game designer Brian Reynolds, who was based in Zynga's Baltimore studio. Both events have been enough to spark a Monday rally for the beleaguered social game maker.

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

Zynga's post-IPO performance has been dreadful, and investors are beginning to wonder if it's "game over" for this newly public company. Being so closely tied to the world's largest social network can be a blessing and a curse. You can learn everything you need to know about Zynga and whether it's a buy or a sell in our new premium research report. Don't even think about picking up shares before you read what our top analysts have to say about Zynga. Click here to access your copy.

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Pearson Publishes Steady Results

LONDON -- Pearson� (LSE: PSON  ) (NYSE: PSO  ) , the publisher responsible for the�Financial Times,�Penguin books, and Pearson Education, increased sales by 5% to 6.1 billion pounds and operating profits up 1% to 936 million pounds in preliminary 2012 results released today. Digital services and business now contribute 50% of sales, which will help to alleviate concerns that a print publisher such as Pearson would suffer the same fate as the likes of�HMV�and Blockbusters, which neglected to move with the times.

The increased operating profit will be of comfort, although earnings per share decreased to 84.2 pence from 86.5 pence in 2011 and operating cash flow dropped to 788 million pounds compared to 983 million pounds the previous year. Encouraging news came in the shape of an increased dividend, up 7% to 45 pence. This continued the trend for Pearson of increasing its dividend every year since 2001. Investors were overall not particularly enamored with the results, though, with shares falling 4%, or 51 pence, in early trading.

The company signalled the changing market conditions with demand for print publishing weakening in the developed world and strong in emerging markets, while digital services gained momentum. International Education revenues were up 13% with emerging market revenues up 25%. FT Group revenues were up 4%. This was driven in large part by digital subscriptions, which now exceed print circulation for the first time. Penguin book revenues also saw digital lines taking hold, with eBooks at 17% of sales.

Commenting on the results, CEO John Fallon said:�

Pearson has a sound, successful strategy: now we are significantly accelerating its implementation. Trading conditions are tough and structural changes mean many of our traditional publishing activities are under pressure. But the underlying demand for effective education remains immensely powerful and our developing world and digital services businesses have real scale and momentum. The restructuring of the company that we are announcing today is designed to strengthen dramatically Pearson's position in digital education services and in our most important markets for the future-and to enable us to capture the once-in-a-generation opportunity that comes with being the world's leading learning company.

Pearson's restructuring program is expected to cost a net of 100 million pounds in 2013 in order to generate annual cost savings of approximately 100 million pounds from 2014. These savings are earmarked to be invested into developing further organic growth.

This could point to a bright future for Pearson, with bright growth prospects despite today's fall in the price. Indeed, it may be an opportunity to snap up some of that promising growth.

In fact, if you are keen to earn generous returns from higher-risk shares,�this free report�could help you on your way.�The report explains how taking a contrarian view and backing unloved companies can be vital steps on the path to the�magic 1 million pound milestone. Maybe one day, a restructured Pearson could be the share that transforms your wealth.

Just click here to download the report today. But hurry -- all Fool reports are free for a limited time only.

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Oil and Gas Producer in All of the Right Plays

According to some Credit Suisse calculations, Magnum Hunter Resources (NYSE: MHR  ) has aligned itself with some potentially lucrative oil and gas plays around the country. One that Motley Fool energy analyst Taylor Muckerman looks highly upon is the Utica Shale in eastern Ohio and western Pennsylvania. Several larger companies are adding acreage to their portfolios here, with the largest leaseholder being Chesapeake Energy (NYSE: CHK  ) at around 1 million net acres. With current infrastructure here limited, Taylor mentions another company in the video below�that might be an even better bet than these exploration and production companies.

Betting big on the Utica in a quest for more oil and wet gas
While serious issues have plagued this company in recent history, giant steps have been taken to help mitigate several of them. To learn more about Chesapeake and its enormous potential, you're invited to check out The Motley Fool's brand-new premium report on the company. Simply click here now to access your copy, and as an added bonus, you'll receive a full year of key updates and expert guidance as news continues to develop.

Ka-ching? Dynasty locks up deal with top sports management firm

Octagon Financial Services Inc., a sports and entertainment management company, will use the wealth management and technology platform of Dynasty Financial Partners LLC to serve its clientele of professional athletes and celebrities.

Part of advertising and marketing giant The Interpublic Group of Companies Inc., Octagon provides financial planning, investment advice and lifestyle services, including bill payment, to athletes and entertainers. The firm is registered as an investment adviser with the Securities and Exchange Commission.

“Our clients generate a lifetime of earnings over a short period of time,” Jan Plewes, managing director of Octagon, said in a press release. “For 30 years, we have helped them manage their wealth — from first contract signing through retirement and beyond.”

Dynasty will help Octagon with insurance, trust services, loan management and investment management, while the agency will handle the conciergelike services on its own. “This is a firm with a good flow of opportunities,” said Shirl Penney, chief executive of Dynasty. “We give them scale and access to things that would be tough to get on their own.”

With athletes being a frequent target for unscrupulous financial advisers, Mr. Penney suggested they represent a sizable business opportunity for RIAs. “You hear a lot of horror stories about athletes. I think many are gravitating to advisers who follow the fiduciary standard,” Mr. Penney said. “They want advisers paid only for their advice, and not for products they sell.”

Among Octagon's 160 clients are Olympic swimmer Michael Phelps, L.A. Clippers point guard Chris Paul, former Pittsburgh Steelers coach Bill Cowher, former basketball player Moses Malone and U.S. Snowboarding Olympian Ross Powers.

The deal is the first announced by Dynasty this year and the 17th since the firm was launched in December 2010. Octagon did not disclose the amount of assets it currently manages, but a Dynasty spokesperson said they more than met the company's $300 million AUM threshold for bringing on new clients. Dynasty now has more than $15 billion in assets under advisement.

Andrew OsterlandEmail Andrew@twitterLinkedInGoogle

Andrew Osterland covers wirehouses and wealth management (in between hattricks).

Why Charter Communications Is Poised to Pull Back

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, U.S. cable operator Charter Communications (NASDAQ: CHTR  ) has received an alarming one-star ranking.

With that in mind, let's take a closer look at Charter and see what CAPS investors are saying about the stock right now.

Charter facts

Headquarters (founded)	St. Louis (1999)
Market Cap	$8.6 billion
Industry	Cable and satellite
Trailing-12-Month Revenue	$7.5 billion
Management	CEO Thomas Rutledge (since 2012) CFO Christopher Winfrey (since 2011)
Return on Equity (average, past 3 years)	(54%)
Cash/Debt	$700 million / $12.8 billion
Competitors	Comcast� Time Warner Cable�

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 70% of the 27 members who have rated Charter believe the stock will underperform the S&P 500 going forward.

Just yesterday, one of those Fools, Clint35, succinctly summed up the Charter bear case for our community:

Way overvalued! Lots of debt. Not profitable on an [EPS] basis. Not making much money on a cash flow basis either. On their latest earnings report�sales improved by about 4% compared to the year before. So even if they earned $1.00 per share, the P/E would be around 85. That's for a company growing sales at about 4% a year! Absolutely nuts!

If you want market-topping returns, you need to put together the best portfolio you can. Luckily, we've found another stock we are incredibly excited about -- excited enough to dub it "The Motley Fool's Top Stock for 2013." We have compiled a special free report for investors to uncover this stock today. The report is 100% free, but it won't be here forever, so click here to access it now.

Want to see how well (or not so well) the stocks in this series are performing? Follow the TrackPoisedTo CAPS account.

Top Stocks To Buy For 2/25/2013-2

HJ Heinz Company NYSE:HNZ declined 0.44% closed at $49.63 and its overall trading volume was 1.98 million shares during the last session. The net profit margin was 9.18% while 5year income growth rate remained 5.81%.

Kellogg Company NYSE:K dropped 0.49% closed at $51.11 and its overall trading volume was 1.92 million shares during the last session. The net profit margin was 9.90% while 5year income growth rate remained 6.36%.

Kimberly-Clark Corporation NYSE:KMB plunged 0.03% closed at $63.03 and its overall trading volume was 1.82 million shares during the last session. The net profit margin was 8.99% while 5year income growth rate remained 1.25%.

Ecolab Inc. NYSE:ECL decreased 0.18% closed at $50.24 and its overall trading volume was 1.01 million shares during the last session. The net profit margin was 8.49% while 5year income growth rate remained 8.10%.

Dr Pepper Snapple Group Inc. NYSE:DPS declined 0.46% closed at $36.83 and its overall trading volume was 1.31 million shares during the last session. The net profit margin was 9.48% while 5year income growth rate remained 4.47%.

 

Bears may have their chance with S&P 500

Our correction seems to have begun right when expected, and just as the bears' backs were literally up against the proverbial wall. But the 1490ES level still remains the line in the sand, governing how deep this correction will be.

Last weekend, I said that once the Select Sector SPDR-Financial XLF �moves into our target region between 17.91-17.98, I would expect a correction to potentially begin at that time. The XLF topped at the 17.94 level, and our correction seems to have begun.

What we saw with this action in the XLF was how well the Fibonacci Pinball system works in identifying points at which tops may be seen. Last week, I explained how the pattern in the XLF was set up in an almost perfect Fibonacci Pinball structure, needing only one more smaller rally to complete a 5 wave structure. That is exactly what we saw into our target region. And if you take into account the after-hours activity, it actually topped almost exactly at our 2.00 extension.

Early Wednesday morning, before the cash market opened, I sent out a Wave Alert when the E-Mini S&P 500 (CME) Mar 2013 ESH3 �hit 1530, wherein I noted that the ending diagonal was potentially complete, and this was the last stand for the bears if they were going to initiate a correction rather than allowing the bulls to take the market up to the 1564ES region.

I noted specifically that any immediate bullish potential in the current pattern is invalidated with a break down below 1519ES, which can open the door to a strong decline to our 1490-1494ES support region.

In fact, we were able to utilize Elliott Wave theory to identify our target region for a decline. When an ending diagonal completes, it is usually followed by a sharp move in the opposite direction, which targets the region from which the diagonal began. So, it made our upper support region a clear target once this diagonal completed.

Well, as we now know, once 1519ES broke down, it led to a strong decline that completed right at the top of our support region on Thursday, as expected. On Friday, the market rallied in what is best counted as an a-b-c corrective rally back up toward the .618 retracement level of the prior decline. It would seem that, if we were still within wave iv of a larger wave 3, the decline into Thursday's bottom would be considered an (a) wave, whereas the rally on Friday would be considered a (b) wave. Therefore, the market is now set up for a (c) wave decline.

Again, based upon our standard Fibonacci Pinball methodology, when wave iii of 3 targets the 1.236 extension (which the market did slightly exceed when it hit 1530ES), we normally target the .764 extension for wave iv of wave 3, which is the 1468ES region. What is most interesting within this pattern at this time is that there is nice confluence with a top in the 1516/1517ES region with the 1468ES level, wherein the (c) wave would then be equal to 1.382 times the size of the (a) wave.

As for alternative patterns, as I have maintained for weeks now, until the 1490ES level is broken to the downside, the 1470ES region will not be seen. Since 4th waves tend to target the level of the 4th wave of one lesser degree, it would not be at all unusual for the market to bottom at the 1490ES level, which represents the level of the 4th wave of one lesser degree.

Furthermore, this region also represents the 1.00 extension of the larger Fibonacci Pinball pattern, which is also a common support for 4th waves.

Additionally, the 1490ES level would represent a Fibonacci (c)=.764*(a) relationship which could complete the wave iv. But we would need to see a clear 5 wave structure into that level to even begin to consider that wave iv would be completing at that level. And, again, it reiterates just how important seeing a strong break of the 1490ES level means to targeting any lower levels for this correction.

It is also for the reasons mentioned above that, if the market were able to move through the 1517ES level, it could target the 1526ES level, which would create a higher (b) wave, which would have a Fibonacci (a)=(c) relationship targeting the 1490ES level right on the money, and completing wave iv in such a pattern. This is also why a move through the 1526ES level would make me believe that the wave iv may have been completed at 1494ES, and have me looking for a pullback in a wave (2) of wave V of our larger degree wave 3 to buy long positions for our next rally leg to the 1564ES level.

Lastly, as you can see from the yellow count on the daily chart, we still have the possibility that a larger wave 4 pullback to the 1400 region may be seen. But the only way I would even consider entertaining such a possibility is by a break down below 1468ES.

So, the upcoming week is going to be all about follow-through. If the bears can take us down early next week, and break 1490ES, or even develop a pattern that projects to take us below 1490ES, then my primary target will be the 1468ES region to complete this wave iv of a larger wave 3. A 5 wave decline into that level will have me buying long positions with a minimum target of 1536ES and an ideal target of 1562ES.

But if the bears can only muster a 5 wave decline into the 1490ES region, I may consider buying an initial long position at that level, with the same upside targets just mentioned, and will buy the full long position upon confirmation of that bottom being in place.

See charts illustrating wave counts on the Emini S&P 500 and INX.

Raytheon Selling Thermal Vision Gear to Finland

On Monday, defense contractor Raytheon (NYSE: RTN  ) announced that it has signed a contract to supply PhantomIRxr�thermal biocular systems to the Finnish Defence Forces.

The biocular uses thermal imaging to pinpoint targets through darkness, smoke, and dust, according to the company.

No purchase price or indication of the number of units sold was provided in this week's press release. However, in a press release issued more than a year ago, Raytheon said it had won a "fixed-price contract with options totaling $19.9 million�to supply the Finnish Defence Forces (FDF) with PhantomIRxr thermal biocular systems." That contract was said to run from 2011 through 2014, and included both the thermal bioculars and spares, along with provision of a maintenance package.

Raytheon describes the PhantomIRxr as "the same battle-proven, state-of-the-art equipment that the U.S. Marine Corps has used since 2009" and says it "is one of the most fielded handheld, high-precision, low-cost, infrared systems in the world."

�

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Jeff Reeves: 7 signs that stocks are about to slide

ROCKVILLE, Md. (MarketWatch) � Everything is grand on Wall Street, right?

The VIX VIX ��fear index� is at its lowest level since 2006. Big-time buyouts are making waves on Wall Street. Both the Dow Jones Industrial Average DJIA �and the Standard & Poor�s 500-stock indexSPX �have been pushing all-time highs.

Best of MarketWatch
�
Here's the one other story that� you can't afford to miss today /conga/story_of_the_day.html250567

Well, maybe things aren�t so hot. The general consensus in the blogosphere is that a market pullback is likely in the next several weeks, even if the long-term trend is decidedly higher.

Many folks like to run their mouth about the macro concerns supporting the correction case. Recent items of interest include softness in consumer spending, the hangover from Washington�s �sequester� shenanigans, Europe (as always) and some disappointing housing data.

But the causes of a pullback in the next month or two are likely structural and not based on headlines. Even long-term bulls are looking for a short-term dip after the strong rally to start the year, lest stock valuations get ahead of themselves.

Beyond the churn of headlines, here are five interesting items I read this week that hint at an overdue pullback:

1. Newsletter craze: As technical analyst J.C. Parets of All Star Charts points out, newsletter writers are recommending record exposure to equities. The last time they were this bullish? Late 2007 and early 2008. Oops. But that doesn�t mean that J.C. is a bear � rather, he says, �I have more buying to do anyway. Let's correct already and be done with it. The suspense is killing me.�

2. Options activity: Surly Trader over at Pragmatic Capitalism has a great post on the Credit Suisse �Fear Barometer� of options activity. But in a nutshell, the measure is near an all-time high thanks to low demand from call buyers, a high supply of call sellers and high demand for protective puts. Check out the full post for details.

3. Good news drought: Kicking off the first day of trading this week, Paul Vigna of the WSJ MarketBeat blog said it best:

�Unless something pops up from unexpected corners, it�s hard to see what�s going to give traders much momentum this week.�There�s nothing top-tier � a couple of housing readings, producer and consumer prices for January, weekly jobless claims � on the data calendar.�

With most of earnings behind us and the ugly sequester fight ahead, there aren�t many headline events that could move the market higher. Next week also looks rather ho-hum, with a fourth-quarter 2012 GDP update and some consumer data, but it seems unlikely either will come in tremendously positive.

4. Aren�t you already in?: Ari Wald of PrinceRidge pointed out last week what should be obvious after the Apple AAPL � meltdown: When buyers have already bought in, that�s when momentum wanes and sentiment swings the other way.

In his words, �When fewer longs are left to propel stocks higher, the market�s rate of ascent subsequently declines and price will generally level off. Then as supply and demand come into balance, a small disturbance can be intensified by a negative feedback loop and initiate this circuit in the opposite direction.� In other words, few buyers mean little upside and big downside risk. (Hat tip to Josh Brown of The Reformed Broker for sharing.)

5. Complacency creep: Adam Shell of USA Today posted a feature recently with a nifty graphic that details declining volatility in the market. But buried in this piece there is a good quote from Bob Doll, chief equity strategist at Nuveen Asset Management, in regards to relative market stability: "That does not mean some short-term complacency hasn't crept into the market. It probably has."

Complacency is not optimism.

6. Outright pessimism: This Reuters article takes that previous statement one step further with telling quotes from two Wall Street veterans.

Bruce Zaro of Delta Global Asset Management said, "I do suspect the closing of the�earnings�season will lead to at least a pause and possibly a pullback [of 3%-5%]. Separately, Dave Chojnacki of Street One Financial said, �We just don't have the volume or the catalyst right now� to break through upside resistance. These two guys are clearly much more than just complacent.

7. Consolidation is natural: Blogger Dynamic Hedge is representative of many market watchers. He remains long-term bullish and thinks we have yet to see the high point of the market in 2013.

But he is quick to note that �markets are a two-way street and we know that they will trade lower at some point. The question is when, and from what level. A pullback should be viewed as a positive development.�

There are many terms for this �� back and fill, consolidation, stabilization � but the general idea is that we hit a resistance point where sellers take profits for a while until the buyers regain support.

To be clear, a pullback is not a crash. Long-term investors probably don�t have too much to fear, since most economists believe 2013 will be better for U.S. growth than 2012 � and that next year will be better than 2013.

But its seems clear that both the bulls and the bears agree we are bumping against a ceiling.

Jeff Reeves is editor of InvestorPlace.com and author of �The Frugal Investor�s Guide to Finding Great Stocks.� Write him at editor@investorplace.com or follow him on Twitter: @JeffReevesIP.