Treasury expects to sell all GM stock by year end

DETROIT (AP) — The U.S. government expects to sell the last of its stake in General Motors by the end of the year, bringing an end to a sad chapter in the company's storied history.

The Treasury Department, in a statement issued Thursday, said it still owns 31.1 million shares of the auto giant, less than 2%. It plans to sell the shares by Dec. 31, as long as the price holds up.

The government received 912 million shares in exchange for a $49.5 billion bailout during the financial crisis in 2008 and 2009. So far it has recovered $38.4 billion of the money, but selling the remaining shares at Wednesday's $37.69 closing price gets the government $1.17 billion, leaving taxpayers short by roughly $10 billion.

The government says the bailout was needed five years ago to save the American auto industry and more than a million jobs. It never expected to get all of the money back.

"Had we not acted to support the automotive industry, the cost to the country would have been substantial — in terms of lost jobs, lost tax revenue, reduced economic production and other consequences," Deputy Assistant Treasury Secretary Tim Bowler said in the statement.

Taxpayers' initially got a 61% stake in GM in exchange for the bailout. Treasury gradually has sold off its stake since a November 2010 initial public offering.

Shares of GM rose $1.02, or 2.7%, to $38.92 in morning trading Thursday. That's close to GM's one-year high of $39.18.

GM said that work to transform the company continues. "We're making great progress in our efforts to make the most of this second chance by building outstanding cars and trucks, creating jobs and reinvesting in our country."

Pew: more than one social media site often used…

Facebook and Twitter dominate among social media channels delivering news, but users are increasingly turning to multiple sources to check on the latest headlines, according to a study by the Pew Research Center released Thursday.

In studying news consumption at 11 of the most popular social media platforms, Pew researchers found that more than a quarter of U.S. adults -- 26% -- rely on both Facebook and Twitter to have news headlines delivered to their computer, tablet or phone, says the report, completed in collaboration with the John S. and James L. Knight Foundation.

About 9% use at least three social media channels.

An earlier Pew study found that about half of Facebook and Twitter users read news stories on the popular channels. Even among those who get news on multiple social networking sites, Facebook is the most popular choice, the report said.

"More than half of adults who get news on Twitter, Google Plus, LinkedIn and YouTube also get news on Facebook," it said. "Aside from that, the shared audience between these sites is relatively small."

Among other findings:

* About 16% of U.S. adults use Twitter. And about half of them - 8% of U.S. adults - have used the micro-blogging site for news.

* About 20% YouTube users watch its video for news even though the Google-owned channel is accessed by 51% of U.S. adults. "That amounts to 10% of the adult population, which puts it on par with Twitter," the report said.

* Reddit -- ready by only 3% of the U.S. population -- is a popular news source among its users. Nearly two-thirds of its users, 62%, browse it for news.

Pew conducted the survey from Aug. 21 to Sept. 2, 2013, interviewing nearly 5,200 respondents.

Federal money slow to get to homeowners

A $7.6 billion federal program to help homeowners avoid foreclosure in 18 states and the District of Columbia has gotten just 22% of its funds to homeowners more than three years after its launch, a government report out Tuesday says.

The report criticizes the Treasury Department, which oversees the Hardest Hit fund, for failing to set measurable goals for the program and for letting states reduce their projections. That shifting baseline makes it hard to track performance, the report says.

After being announced near the height of the foreclosure crisis, estimates were that the program would help almost 550,000 people. Those are now closer to 370,000, says the report from the Office of the Special Inspector General for the Troubled Asset Relief Program.

"They just keep lowering the bar," says Christy Romero, special inspector general. States continue to struggle and "Treasury hasn't gotten in there to figure out what's wrong," she says.

HOUSING MARKET: Big investors buy up homes in key markets

Not so, Treasury says. It's worked with the states to launch 60 Hardest Hit programs, including recent ones to use funds to battle blight from vacant homes. In the year ended in June, the number of homeowners who'd been helped by the program had more than doubled from the year before, it says

"We are seeing a much faster ramp up," says Treasury's Assistant Secretary Timothy Massad, adding that it took time for the states to build up their unique programs.

Through June, almost 127,000 homeowners had gotten help, mostly with funds to help pay mortgages while riding out periods of unemployment or underemployment.

While the housing market has started to recover, with prices up sharply the past year, more work remains, Massad says.

The special inspector general report notes that 14 of the 19 Hardest Hit recipients have reduced their estimates of how many people their programs will help. Six of the states have reduced estimates by more than 50%. Michigan, for instanc! e, has cut estimates by by 77%, Romero says.

The estimates may not reflect reality, says Mary Townley, of Michigan's hardest hit program. It has already helped more than 12,700 people vs. its latest estimate of 11,500, she says.

LENDING: Home loans become a little easier to get

Treasury's Massad also says estimates as to the number of people to be helped has changed as the housing market has recovered.

California, with almost $2 billion, got the biggest allocation of any state. As of June 30, it had sent out 19% of its allocation to homeowners, the report says.

"We thought this money would fly out the door. That hasn't happened," says Evan Gerberding, spokeswoman for Keep Your Home California.

Part of the reason is that homeowners, despite outreach, don't know that help exists, she says. More program changes are also coming, she says.

California set aside $772 million of its funds to pay down what homeowners owe on mortgages. So far, only 1,700 homeowners have been helped by that program, the report says.

Reformed Broker on New Ritholtz Firm: Our Blogging Is Research

Two of the most hypercaffeinated commentators in the financial blogosphere, Barry Ritholtz and Josh Brown, are forming their own investment advisory firm, Ritholtz Wealth Management, but that won’t stop the blog-happy duo from blogging.

ThinkAdvisor asked Brown on Tuesday how their blogging busy-ness jibes with client portfolio management, and he said their absorption in financial news beats cold calling, seminars and similar activities by other financial professionals.

“We choose to spend our days being informed about policy. Blogging is part of our research. I write to find out what I think. I’m not writing ad copy. My clients know exactly what I think about every subject on the market,” he says.

Investors, financial professionals and financial news junkies have long turned to Ritholtz’s Big Picture blog and Brown’s Reformed Broker blog to get their fix of market news and commentary—when they’re not watching them on their frequent TV news appearances. Before giving their take on fast-moving financial markets, both typically offer a string of morning news links, doubtless causing many to wonder whether sleep is part of their daily routine.

Putting their ideas into financial planning practice is not new to Ritholtz (below) and Brown, who were already doing that at New York City-based Fusion Analytics.

Rather, as is common in breakaway situations, the advisor-bloggers wanted to do things their way, according to Brown.

“I had a really good experience at Fusion for the last three years,” Brown says. “We started an advisory firm from scratch. We got many clients and many referrals. But it got to a point where it made more sense to be a standalone firm than a practice within a firm.”

Brown says having their own firm will enable him and his partner to add technological capabilities and new services to their advisory platform.

“When you don’t own your firm, and you’re a practice in your firm, it’s not up to you how your money gets spent.

“We want to bring on more CFPs who can work directly with our clients,” he continues. “We believe the true value for the client is having a personal relationship with their advisor, that the person you work with is intimately involved with your situation. We really feel we want to staff up.”

Ritholtz’ “day job,” according to his blog bio, involved “institutional strength number crunching,” so it is perhaps no surprise that the firm plans on beefing up its technology.

“On the tech side, what used to be acceptable was a client being allowed to log into his advisory account and getting a report quarterly—‘Here’s how you did compared to the S&P,’” Brown says. “But clients want to see their investable assets alongside the rest of their assets. They want context as to how they’re doing compared to every aspect of their life. We also want to have much deeper analytics for those clients of ours who are more sophisticated … that requires an investment in software, investment in education.”

Besides the planned service offering enhancements, Brown argues the timing is ripe for Ritholtz Wealth Management.

“I think the industry has grown fat and happy; household assets are 10% higher than in the 2007 market peak. Retirement plan assets are 75% higher than 2002 level 10 years ago. As a result of that growth there’s been some complacency.”

Specifically, Brown argues that his team can sift through what he sees as a proliferation of investment products that have grown needlessly complex.

“So many people we see have portfolios that are preparing them for the last war,” he says. “Their portfolios are weighted in with put options or a lot of precious metals or black swan funds. They’re a drag on performance and don’t offer as much protection as people think.”

The reformed broker says he and Ritholtz see five to 10 prospects’ portfolios a week, and commonly find them larded with private equity, hedge funds, managed futures.

“The data tell us they don’t diversify as much as [their promoters say] they do,” Brown says. “Over long stretches of time, you eliminate costs and you actually do better [by excluding them,” he says, adding that he would say the same about currently popular risk parity strategies involving bonds.

“They do not lower your volatility—not as bonds are exiting a 30-year bull market. What they’re really doing is compromising potential upside and adding layers of cost. So that’s the kind of conversation we’re trying to have with people,” Brown says.

“We’ve got to get out of the mindset that volatility is evil,” he adds, noting that investors’ time horizons are probably “longer than they think,” such that the overly conservative portfolios he and Ritholtz are seeing in prospects’ portfolios are undermining their future retirement security.

To effect their strategies, Ritholtz Wealth Management, which Brown refers to as “primarily an ETF shop,” will be focusing on forward expected returns.

“Valuation plays a big role in the types of tilts we bring to client portfolios. It’s where the puck will be as to where it has been,” he says.

---

Check out these related stories on ThinkAdvisor:

KC Fed President Okay with Tapering to $70 Billion a Month

Esther George, President of the Federal Reserve Bank of Kansas City, said in a speech Friday in Omaha, Nebraska, that a reduction of the Federal Reserve's asset purchasing from its current level of $85 billion a month to $70 billion may be "an appropriate step toward normalizing monetary policy." George has been consistently hawkish on Fed policy, as compared, for example, with Chicago Fed President Charles Evans, who said earlier today, that he can foresee asset purchases lasting into the middle of next year, although he did not specify the level of purchases.

The threat of U.S. military action in Syria and the relatively weak report on non-farm payrolls released earlier this morning, have raised sentiment among investors that the Fed will not begin cutting back on asset purchases any time soon. There are of course contrasting opinions about that.

Some believe that the Fed's balance sheet, with some $3.5 trillion on the books, will continue to be financially accommodative. Even Charles Evans noted that it would take years for the Fed to trim its assets, even if asset purchases stopped today. That, along with other arguments, means that starting the taper in September remains a very real possibility.

On the other side, the weak employment report augurs for a delay perhaps until the end of the year, when job growth may be stronger. Adding just 169,000 jobs in August barely keeps up with population growth. A number closer to 200,000 is needed to put many unemployed workers back on the job. The coming debate on the federal debt ceiling, the continuing federal budget cuts due to the sequester, and volatility in oil and food prices argue for letting the Fed's asset purchases run at their current level for at least a while longer.

Priceline Could Beat Google to $1,000

It's been five months since I offered up four stocks that could get to $1,000 before Google (NASDAQ: GOOG  ) .

One of them went on to do exactly that. Two of the other three don't have much of a shot to hit four figures any time soon. However, then we get to priceline.com (NASDAQ: PCLN  ) .

It's going to be quite the footrace between these two.

The search engine leader continues to trade at a higher level than the fast-growing travel portal, but Priceline's making up ground here. Priceline stock has gone on to climb 29% to hit $888.63. Google -- with its 14% gain in that time -- closed at $905.09 yesterday.

I'm a fan of both companies, but I still believe that Priceline will be the first of the two dot-com darlings to break through the $1,000 barrier.

Priceline's latest move higher came on a 4% pop yesterday, with the Morgan Stanley analyst Scott Devitt boosting his rating from equal weight to overweight. Devitt also pushed his price target to $1,010, becoming the first of the nearly two dozen major analysts following Priceline to offer up a four-figure goal.

There are already a few analysts -- including Bernstein Research's Carlos Kirjner and CLSA Asia-Pacific Markets' James Lee -- perched at $1,000 price targets when it comes to Google.

Neither stock may seem cheap these days. Google is trading at 20 times this year's projected earnings and 17 times next year's forecast. Priceline's fetching pricier multiples of 23 for this year and 19 come 2014.

Both companies have earned their markups, though Priceline is growing faster. Wall Street's betting on 16% growth at Google for both this year and 2014. Analysts see Priceline growing at a healthy 23% clip in 2013 and a still respectable 20% rate next year.

The competitive climate may seem to give Google the leg up here given the cutthroat nature of travel portals and Google's safe standing as the global leader in search, but Priceline's been finding ways to grow a lot faster than its market for years.

Priceline is also in a slightly better position to build on its profitability if the global economy continues to gain traction. Google advertisers will naturally be willing to spend more if the economy's improving, but there should be a more dramatic uptick in the demand for corporate and leisure travel under that scenario to benefit Priceline.

Priceline and Google will both get to $1,000, and one or both may get there by the end of the year if the bullish trends continue. I see Priceline being the first one to cross that line, but the comment box below is waiting for you if you care to disagree.

There's a bigger race that doesn't end at 1k
It's incredible to think just how much of our digital and technological lives are almost entirely shaped and molded by just a handful of companies. Find out "Who Will Win the War Between the 5 Biggest Tech Stocks?" in The Motley Fool's latest free report, which details the knock-down, drag-out battle being waged by the five kings of tech. Click here to keep reading.

Amazon to Netflix: Your Move

The folks at Amazon.com (NASDAQ: AMZN  ) seem absolutely bent on fostering the ideas and opinions of their users.

Just last week, for example, the site unveiled Kindle Worlds to enable aspiring authors to test their skills writing fan fiction.

Then, on Wednesday, Amazon took a direct shot at video streaming powerhouse Netflix (NASDAQ: NFLX  ) by announcing it will proceed with the production of five new original series. Unsurprisingly, the five were chosen based on votes from Amazon viewers among 14 possible pilot episodes offered by the company in April.

Amazon's press release -- the headline of which starts with the words "Customers have spoken" -- begins by briefly introducing two adult comedies, Alpha House and Betas, as well as three new children's shows: Annebots, Creative Galaxy, and Tumbleaf. All five series will premier on Amazon's Prime Instant Video service between now and early 2014.

Been there, done that
Netflix, for its part, is already well experienced with its own original programming after releasing five unique series of its own so far, including Lilyhammer, House of Cards, Bad Samaritans, Hemlock Grove, and the latest season of Arrested Development, which launched just last week. 

What's more, Netflix is also working on four other series to be released sometime between this July and late 2014, notably including a new original children's show based on this summer's upcoming movie Turbo from DreamWorks. With this in mind, and noting Netflix's vast array of dedicated children's content has served to make the service incredibly appealing to families, you can bet Amazon's huge push into kid's programming was no coincidence. 

Better late than never?
Similar to the tardy introduction of its new universal login functionality, Amazon is certainly working hard to play catch-up with the critically acclaimed content offered by its more popular competitor in Netflix. Even so, that's no reason to count Amazon out of the streaming video race, especially considering viewers played an integral part in deciding which pilots would become full-fledged series.

As a result, Amazon Prime users should possess at least some level of emotional attachment to their shows of choice, and any positive word-of-mouth will serve as a great way to push potential customers off the fence.

Who wins?
In the end, though, I sincerely doubt Amazon's push into the space will manage to put a dent in Netflix's loyal subscriber base. After all, despite the increasingly intense competition, Netflix still managed to boost its number of streaming members by more than 3 million last quarter alone, bringing the total to more than 36.3 million people.

Still, investors shouldn't lose sight of the bigger picture. Even if consumers combine the monthly cost of both services, it's still only a fraction of the price they'd pay for even a basic cable subscription. As I've written before, while this does help to explain why traditional network TV companies are growing increasingly desperate, it also goes to show there's no reason Amazon Prime and Netflix shouldn't be able to peacefully coexist.

What's your next move?
How about checking out The Motley Fool's premium report on Netflix? Inside, you'll learn about the key opportunities and risks facing the company, as well as reasons to buy or sell the stock. The report includes a full year of updates to cover critical new developments, so click here and claim your copy today.

Dow Winners and Losers of the Day

This morning, the Labor Department reported that the number of jobless claims filed last week fell to the seconded lowest level in five years, at 339,000. This came as economists were expecting claims to come in at 351,000. The report indicates the jump in March was a one-time thing, which some have blamed on the colder-than-usual weather during the month.

The positive jobs report gave the Dow Jones Industrial Average (DJINDICES: ^DJI  ) a boost today, as it closed higher by 24 points, or 0.17%, while the S&P 500 rose slightly more at 0.4%. But, the big index winner today was the Nasdaq, which managed to game 0.62%.

A few Dow winners
Shares of Verizon (NYSE: VZ  ) popped 2.74% this afternoon after a fresh report circulated that the company may soon offer $100 billion to buy the 45% stake of Verizon Wireless that Vodafone owns. This is just another report in a long string of recent rumors, so at this time investors shouldn't be making any big moves into or out of Verizon until the reports have been confirmed. But as my colleague Travis Hoium noted earlier today, the transaction would help both Verizon and Vodafone, although Verizon would probably be holding the short end of the stick at the negotiation table.  

For the second day in a row, shares of Bank of America (NYSE: BAC  ) rose more than 1%. Yesterday they rose 1.4% and today they increased by 1.06%. Today, Foolish writer John Maxfield pointed out that the number of bullish analysts has been growing over the past few weeks. And although investors weren't thrilled with the company's earnings report, which caused shares to fall 7% over a couple of days, shares are closing in on their 52-week high, which leads some to believe the analysts may be correct.

A few Dow losers
Shares of both Merck (NYSE: MRK  ) and Pfizer (NYSE: PFE  ) fell by 1.25% and 1.11%, respectively, today. With neither company having yet announced first-quarter earnings (Merck is scheduled for May 1 and Pfizer for April 30), investors pounded the drug companies after Bristol-Myers Squibb reported that sales fell 27% in the first quarter this morning. Bristol-Myers did match analysts' earnings-per-share estimates at $0.41 per share, but it missed on revenue. Two of the company's big drugs, Plavix and Avapro, saw their shares fall 95% and 78% during the quarter because of generic competition. With Merck and Pfizer also fighting the patent cliff, this is probably one reason investors are selling today.  

Also today, Pfizer announced that it will keep the quarterly dividend at $0.24 per share. And lastly, despite the FDA's approval of Pfizer's rheumatoid arthritis drug Xeljanz, European regulators rejected the drug today. The company said it will appeal the decision.

Can Merck beat the patent cliff?
This titan of the pharmaceutical industry stumbled into 2013 and continues to battle patent expirations and pipeline problems. Is Merck still a solid dividend play, or should investors be looking elsewhere? In a new premium research report on Merck, the Fool tackles all of the company's moving parts, its major market opportunities, and reasons to both buy and sell. To find out more click here to claim your copy today.

Weekly CEO Sells Highlight

According to GuruFocus Insider Data, these are the largest CEO sales during the past week: VF Corp, Infinera Corp, Eaton Vance Corp, and Envision Healthcare Holdings Inc.VF Corp (VFC): Chairman, President & CEO Eric C Wiseman sold 454,800 SharesChairman, President & CEO of VF Corp (VFC) Eric C Wiseman sold 454,800 shares during the past week at an average price of $66.76. V.F. Corporation, a Pennsylvania corporation was organized in 1899. Vf Corp has a market cap of $29.18 billion; its shares were traded at around $67.68 with a P/E ratio of 24.00 and P/S ratio of 2.56. The dividend yield of Vf Corp stocks is 1.55%. Vf Corp had an annual average earnings growth of 8.90% over the past 10 years. GuruFocus rated Vf Corp the business predictability rank of 4-star.VF Corp announced its 2014 third quarter results. The Company reported revenues of $3.5 billion and net income of $470.5 million.Chairman, President & CEO Eric C Wiseman sold 454,800 shares of VFC stock in October. CFO Robert K Shearer sold 63,407 shares of VFC stock in August and October. Sr. Vice President - Americas Steven E Rendle, VP-VF Direct/Customer Teams Michael T Gannaway, Director Bedout Juan Ernesto De, and Director Raymond G Viault sold 65,852 shares of VFC stock in October.Infinera Corp (INFN): CEO Thomas J Fallon sold 220,000 SharesCEO of Infinera Corp (INFN) Thomas J Fallon sold 220,000 shares on 10/27/2014 at an average price of $13.56. Infinera Corporation or Infinera was founded in December 2000, originally operated under the name 'Zepton Networks'. Infinera Corp has a market cap of $1.82 billion; its shares were traded at around $14.53 with and P/S ratio of 2.91.Infinera Corp. reported revenues of $165.4 million and net income of $4.8 million for its 2014 second quarter financial results.CEO Thomas J Fallon sold 440,000 shares of INFN stock from August to October. CFO Brad Feller bought 25,000 shares of INFN stock on 05/16/2014 at the average price of 8.25. President David F Welch, Director Carl Redfield¸ Director! Paul J Milbury, and Director Mark A Wegleitner sold 188,500 shares of INFN stock in October.Eaton Vance Corp (EV): CEO Thomas E Jr Faust sold 219,000 SharesCEO of Eaton Vance Corp (EV) Thomas E Jr Faust sold 219,000 shares on 10/29/2014 at an average price of $36.32. Eaton Vance Corporation is incorporated in the State of Maryland. Eaton Vance Corp has a market cap of $4.37 billion; its shares were traded at around $36.83 with a P/E ratio of 16.10 and P/S ratio of 3.15. The dividend yield of Eaton Vance Corp stocks is 2.47%. Eaton Vance Corp had an annual average earnings growth of 9.60% over the past 10 years. GuruFocus rated Eaton Vance Corp the business predictability rank of 3.5-star.Eaton Vance Corp announced its 2014 third fiscal quarter results. The Company reported revenues of $367.6 million and net income of $81.3 million.CEO Thomas E Jr Faust sold 219,000 shares of EV stock on 10/29/2014 at the average price of 36.32. CFO Laurie G Hylton sold 31,092 shares of EV stock on 10/28/2014 at the average price of 36.3. Chief Income Officer Payson F Swaffield, Chief Administrative Officer Jeffrey P Beale¸ and Director Winthrop H Jr Smith sold 172,425 shares of EV stock in August, September, and October.Envision Healthcare Holdings Inc (EVHC): President & CEO of EmCare, EVP Todd G Zimmerman sold 125,000 SharesPresident & CEO of EmCare, EVP of Envision Healthcare Holdings Inc (EVHC) Todd G Zimmerman sold 125,000 shares on 10/24/2014 at an average price of $35. Envision Healthcare Holdings Inc offers an array of healthcare-related services to consumers, hospitals, healthcare systems, health plans and local, state and national government entities. Envision Healthcare Holdings Inc has a market cap of $6.38 billion; its shares were traded at around $34.95 with a P/E ratio of 323.60 and P/S ratio of 1.58.Envision Healthcare Holdings Inc. announced its 2014 second quarter results with revenues of $1.08 billion and net loss of $2.0 million.President & CEO of EmCare, EVP Todd G Zimmerman sold 210,0! 00 shares! of EVHC stock in July and October. EVP, COO and CFO Randel G Owen sold 449,375 shares of EVHC stock in July, September, and October. President of AMR Horne Edward Van, Director Michael L Smith, and Chief Medical Officer Dighton Packard sold 66,746 shares of EVHC stock in September and October.For the complete list of stocks that bought by their CEOs, go to: Insider Buys.

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5 Toxic Stocks You Should Sell This Summer

BALTIMORE (Stockpickr) -- A modest correction for the last three trading sessions is shaking the weak hands out of stocks this week. Ultimately, that's a good thing for the health of this rally, even if it means that the S&P 500 has a lot further to correct in June.

>>5 Huge Stocks to Trade for Huge Gains

And it does.

Since November 2012, the S&P 500 index has traded in a very tight uptrend, bouncing between a pair of well-defined trend lines all the way up. That hasn't changed in 2014, despite the definite changeover from the nonstop rally that investors enjoyed last year. But with the S&P sitting toward the top of its channel now, the big index could conceivably correct another 4% from here without even threatening the uptrend that's propelled stocks 40% in the last 19 months.

Remember, though, the indices are "market averages." That means that when the market corrects, some names are set to correct a lot harder than others. A 4% correction in the S&P could translate into a 30% correction in an individual weakening issue. Those are the names to avoid in June -- and a handful of big names look downright toxic this summer.

>>5 Stocks Insiders Love Right Now

Just to be clear, the companies I'm talking about today aren't exactly junk. By that, I mean they're not next up in line at bankruptcy court. But that's frankly irrelevant; from a technical analysis standpoint, sellers are shoving around these toxic stocks right now. For that reason, fundamental investors need to decide how long they're willing to take the pain if they want to hold onto these firms in the weeks and months ahead. And for investors looking to buy one of these positions, it makes sense to wait for more favorable technical conditions (and a lower share price) before piling in.

For the unfamiliar, technical analysis is a way for investors to quantify qualitative factors, such as investor psychology, based on a stock's price action and trends. Once the domain of cloistered trading teams on Wall Street, technicals can help top traders make consistently profitable trades and can aid fundamental investors in better planning their stock execution.

>>3 Huge Stocks Everyone Is Talking About

So without further ado, let's take a look at five "toxic stocks" you should be unloading.

Aegon

Up first is Aegon (AEG), the $18 billion Netherlands-based financial services stock. AEG has posted strong performance in the last year, climbing nearly 27% higher since the summer of 2013. But shares haven't done much at all in 2014, and that sideways churn is leading up to big downside potential in shares this week.

>>5 Hated Earnings Stocks You Should Love

Aegon is currently forming a descending triangle pattern, a bearish setup that's formed by a horizontal support level below shares (at $8.25 in this case) and downtrending resistance above shares. Basically, as AEG bounces in between those two technically important price levels, it's getting squeezed closer to a breakdown below that $8.25 price floor. When that happens, we've got our sell signal. AEG's setup isn't "textbook" -- the pattern is coming in at the top of this stock's recent range, rather than the bottom -- but the trading implications are just the same if $8.25 gets violated.

We're seeing that confirmed by relative strength right now. AEG's relative strength uptrend broke in early April, a signal that shares are statistically more apt to underperform the S&P 500 for the next three-to-ten month span. Buyers beware.

America Movil

Mexican telecom company America Movil (AMX) is another descending triangle setup to watch this week, albeit a more textbook one. $19 is the breakdown level to watch in shares of AMX right now. A breakdown below $19 is the signal that more downside looks likely, and it's time to join the sellers.

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Why the significance at $19? Whenever you're looking at any technical price pattern, it's critical to keep buyers and sellers in mind. Patterns like the descending triangle are a good way to quickly describe what's going on in a stock, but they're not the reason it's tradable. Instead, it all comes down to supply and demand for shares.

That horizontal $19 level in America Movil is the spot where there's previously been an excess of demand for shares; in other words, it's a price where buyers have been more eager to step in and buy shares at a lower price than sellers were to sell. That's what makes a breakdown below support so significant -- the move means that sellers are finally strong enough to absorb all of the excess demand at the at price level. Keep a close eye on $19 this week.

Raytheon

Defense contractor Raytheon (RTN) has more or less kept pace with the broad market in 2014, up 5.3% since the calendar flipped to January. But that doesn't mean that RTN is a good way to get exposure to the S&P's moves for the rest of the year. Those gains look ready to erode as we head into the summer.

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Raytheon is currently forming a broadening top pattern, a technical setup that looks exactly like it sounds. The setup formed by a pair of support and resistance levels that are diverging after a big move higher. The real problem of a broadening top is the fact that it indicates volatility is getting injected into shares, particularly to the downside. Like the other names on our "toxic list," the broadening top is a breakdown trade. A move through support (currently at $92) is the sell signal.

The problem, though, is that support is downtrending in RTN's broadening top. That means that shares can move substantially lower without actually ever breaking down through that downsloping support level. For that reason, it makes sense to sell RTN here rather than wait. If you're looking for a shorting opportunity, I'd recommend keeping a protective stop right above resistance at $100.

Alliance Data Systems

After moving 47% higher in the last 12 months, shares of Alliance Data Systems (ADS) are starting to look "toppy." Here's how to trade it:

ADS is currently forming a head and shoulders top, a setup that indicates exhaustion among buyers. The setup is formed by two swing highs that top out at approximately the same level (the shoulders), separated by a higher high (the head). The sell signal comes on a move through ADS' neckline, which is currently right at $233. If shares violate that neckline level, look for $170 as the next-nearest support level where shares could catch a bid again.

Momentum, measured by 14-day RSI, provides some foreshadowing for the downside in ADS. While this stock's price has been slowly moving higher (or worst-case, flat) over the last ten months, momentum has been making lower highs and bleeding off. That's a big red flag.

Las Vegas Sands

Last up is Las Vegas Sands (LVS), a name that's showing off the exact same classic head and shoulders top pattern as the one in ADS. For LVS, the neckline level to watch is $72.50, a line in the sand that's been getting tested in a big way this week. If LVS fails to hold support at $72.50, there's a lot of downside risk in this stock.

Lest you think that the head and shoulders is too well-known to be worth trading, the research suggests otherwise. A recent academic study conducted by the Federal Reserve Board of New York found that the results of 10,000 computer-simulated head-and-shoulders trades resulted in "profits [that] would have been both statistically and economically significant."

That's good reason to keep an eye on both ADS and LVS this week.

To see this week's trades in action, check out the Toxic Stocks portfolio on Stockpickr.

-- Written by Jonas Elmerraji in Baltimore.

RELATED LINKS:

>>5 Stocks Under $10 Set to Soar

>>3 Stocks Rising on Unusual Volume

>>Apple's Lower Price Tags Means Bigger Gains in 2014

Follow Stockpickr on Twitter and become a fan on Facebook.

At the time of publication, author had no positions in stocks mentioned.

Jonas Elmerraji, CMT, is a senior market analyst at Agora Financial in Baltimore and a contributor to

TheStreet. Before that, he managed a portfolio of stocks for an investment advisory returned 15% in 2008. He has been featured in Forbes , Investor's Business Daily, and on CNBC.com. Jonas holds a degree in financial economics from UMBC and the Chartered Market Technician designation.

Follow Jonas on Twitter @JonasElmerraji

Nordstrom, Dillard's start 2014 strong

A slew of retail first-quarter earnings announcements Thursday showed Wal-Mart, the country's largest retailer, slumping — but beleaguered J.C. Penney recovering.

Wal-Mart reported a profit decline of 5% as bad weather, poor sales abroad and cuts to food stamps sent net income down to $3.6 billion from $3.78 billion a year ago. Earnings per share fell 3.5% to $1.10, missing analyst estimates.

"Like other retailers in the United States, the unseasonably cold and disruptive weather negatively impacted U.S. sales and drove operating expenses higher than expected," said Wal-Mart CEO Doug McMillon in a statement.

Meanwhile, J.C. Penney appears to be making a comeback a little more than a year after former CEO Ron Johnson left after an unsuccessful turnaround attempt. The retailer beat analysts' expectations with an earnings per share loss of $1.15 — analysts expected a loss of $1.26 a share — and sales up 6.3% to $2.8 billion, from $2.6 billion a year ago.

Penney shares leaped nearly 20% in after-hours trading to $10.03. The company also announced that it took out a $2.35 billion line of credit to increase liquidity during peak times such as the back-to-school and holiday shopping seasons.

"It is clear that our efforts to re-merchandise many areas of the store and revamp our messaging to the customer are taking hold," CEO Mike Ullman said in a company statement. "We expect to carry this momentum into the second quarter as we continue to position the company for long-term profitable growth."

Department stores Nordstrom and Dillard's both reported successful first quarters, with positive sales so far in 2014, the companies said Thursday.

Nordstrom's net sales grew 6.8% to $2.8 billion, compared with $2.65 billion last year. Earnings fell to $140 million from $145 million, which the company attributed to planned investments in technology. Earnings per share were 72 cents, beating the company's own estimates of from 60 to 70 cents.

Same-store sales, or sales a! t stores open at least a year, grew 3.3%, up from last year's 3.1% growth, thanks to strong performance in accessories, cosmetics and women's shoes.

Dillard's reported a gain of $2.56 per share, vs. $2.50 last year. Net income was $111.7 million, vs. $117.2 million last year. The 2013 first quarter included a net after-tax credit of $4.4 million. Total sales increased 1% to about $1.54 billion from $1.53 billion.

CEO William Dillard said in a statement that the 2% increase in same-store sales marked the 15th-consecutive quarter of positive sales.

While Wal-Mart saw same-store sales fall 1.4%, sales at the company's Neighborhood Markets, smaller stores that compete with drugstores and grocery stores, continue to climb. Sales at the Markets rose 5%, and Wal-Mart reaffirmed plans to open more. In September, Wal-Mart said it would have about 500 Neighborhood Markets by the spring of 2015, up from 290 at the time.

Penney continues to promote heavy sales, especially around holidays such as Valentine's Day and Easter, in an attempt to regain customer traffic. Ullman said that April marked the first time in more than 30 months that Penney's experienced positive store traffic.

Brian Sozzi, CEO of Belus Capital Advisors, says Penney's merchandise assortment has improved and is better displayed in stores.

"J.C. Penney stores looked visually appealing in the first quarter," he says. "Clothing was folded. Merchandise was properly ticketed."

He adds, "I think the consumer saw the old school J.C. Penney back in action, with promotions consistently in the range of 30% to 45%. "(Ullman) is taking J.C. Penney back to what he knows: heavily promoted and well merchandized."

Contributing: Roger Yu

Media merger mania could swell in wake of Comcast…

Comcast's move to acquire Time Warner Cable is creating a ripple effect that could transform the pay-TV industry.

The latest undulation: The floating of a possible purchase of satellite provider DirecTV by telecom giant AT&T.

Among other moves or speculation since Comcast announced its $45 billion bid for Time Warner Cable two months ago: DirecTV and competitor Dish Network have talked about merging, according to a Bloomberg report; Netflix announced connection deals with Verizon and Comcast; and Apple had reportedly approached Comcast, too.

Not to be forgotten: Sprint's expected attempt to buy T-Mobile, and TV upstart Aereo's challenge to broadcasters is under review by the Supreme Court.

A common thread to all of these: "A trend to get bigger and amass more market share and be in a better position to dictate terms," says Phil Swann of TVPredictions.com.

All the speculation suggests that behind the scenes, the biggest pay-TV players are making preparations for a transformed marketplace should the Comcast-Time Warner Cable deal be approved. "The writing is on the wall that these kinds of partnerships have to get made," says Digital World Research analyst P.J. McNealy.

Amid these tectonic shifts, companies need to absorb more subscribers across more delivery methods to attract advertising and increase bargaining power when it comes to licensing content, McNealy says. He foresees a wave of mergers that lead to mega-media companies.

AT&T's bid to augment its current "video footprint" of about 6 million customers for its U-Verse fiber-optic delivered pay-TV service with DirecTV's 13 million reflects the "early stages of industry consolidation and technology transition and a response to the demand for more video," says Michael Paxton, cable industry analyst for SNL Kagan.

Whether it actually happens remains to be seen. DirecTV likely leaked the AT&T overture to put regulators "on notice (that) if you approve Comcast, we'll be next in line," Swann sa! ys. "The FCC has to ask if they want to open what could be a Pandora's box."

Stocks Hitting 52-Week Lows

Related ATRS Earnings Scheduled For March 13, 2014 Antares Pharma Announces Availability of OTREXUP Injection for Subcutaneous Use to Treat Rheumatoid Arthritis (RA) and Psoriasis in Adults, and Polyarticular Idiopathic Arthritis in Children Related EGAN Mid-Afternoon Market Update: Shanda Games Gets Crushed, Markets Remain Cautiously Green eGain Announces Proposed Secondary Public Offering of Common Stock

Antares Pharma (NASDAQ: ATRS) shares tumbled 3.09% to touch a new 52-week low of $3.14. Antares Pharma's PEG ratio is -0.29.

eGain (NASDAQ: EGAN) shares fell 3.76% to reach a new 52-week low of $6.40. eGain's trailing-twelve-month ROE is -8.92%

Aeropostale (NYSE: ARO) shares tumbled 6.81% to reach a new 52-week low of $4.57. Aeropostale shares have dropped 65.05% over the past 52 weeks, while the S&P 500 index has gained 15.37% in the same period.

Family Dollar Stores (NYSE: FDO) shares fell 1.98% to touch a new 52-week low of $56.04. Bank of America maintained Family Dollar with a Underperform and cut the price target from $58.00 to $53.00.

Posted-In: 52-Week LowsNews Movers & Shakers Intraday Update Markets

© 2014 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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A Lesson from Middleby

MoneyShow's Jim Jubak takes an in-depth look at one of his favorite stock picks and how he evaluates their business going forward.

There is a lesson in Middleby (MIDD). The company came out on February 25 and announced a tiny little beat. They beat by 37 cents a share over analyst's expectations. That drove the stock up about 13% and you are now looking at shares that are trading around $300. Now the lesson here is, "Well, what do you do when you have had a stock that has moved up as much as this, that is trading at this price, and how do you decide whether you are going to sell or not?" Typically, you look at price trends. You look at fundamentals and all those things are favorable for Middleby and one of the things that people tried not to do here is to sell just simply because they are nervous at their own success. The stock is up about 107% since I added it to the Long-Term Jubak Picks 50 Portfolio in May, since 107% less than a year. At $300, it is starting to feel expensive to many people. I think the inclination that people have is to sell.

There is another thing that I think you ought to look at besides technical patterns, momentum, and all that, which is okay. This company as a business is being very successful, how likely is it that it can continue to replicate that success? In other words, what is the formula here? Is the formula doable over, over, and over again and under what conditions? The great thing that is Middleby is that it is in the business of selling restaurant equipment. It says, "Hey, you know, there has never been a year in which people have gone out where restaurant revenue has gone down." There are years when the growth is slowed, but people go out and eat, pretty much no matter what. They eat at some kind of restaurants. Middleby is in the chain restaurant business and the fast food restaurant business and that is where they sell, sort of, a core market here. What is interesting is that they have a formula, which they apply over, over, and over again; basically, it has always been a very fragmented industry. Middleby goes out and buys smaller companies, puts in cost controls, but it is not just cost controls. What they are really interested in, is in innovation. The last time I looked, which was 2012, about 20% of revenue was coming from new products. The company says that is not enough, they want to drive it to 40%. What they try to do when they develop these new products is, they try to develop products that save customers money, are more energy efficient, less labor intensive, and better quality, so that they figure the payback on a piece of Middleby equipment is less than two years. That is sort of the formula that they use.

Is there an end point to that? Well, at some point, the universe is full of restaurants and no one is opening up another one, but short of that, Middleby says, "Hey most chain restaurants have not been remodeled in their kitchens since the big growth spurt of 1998 to 2000", so they say, "Oh, like 56% of casual dining restaurants have not been remodeled since 2000." The other things they say are, "We are seeing a lot of growth in chain restaurants in the developing world. Only less than 30% of our revenue came from there, so that is a huge market for us." The thing I really like about that is they are not saying, "Oh okay, so we are going to sell pizza ovens to restaurants in Japan." What they are instead saying is, "Oh, okay, so we will do tandoori ovens. We will do gyro makers. We will do pita ovens." They tend to come up with products for local markets, produce them locally, and that, I think, gives them a really good attitude toward international growth going forward.

Three hundred dollars seems high, 107% in less than a year seems high, but again, if they can keep replicating this, there is really no reason why that is too high.

This is Jim Jubak for the Money Show.com Video Network.