An Investment Opportunity for a Healthy World

Since 1981, 25 million people have died from HIV/AIDS. An estimated 1.7 million died in 2011 due to AIDS-related causes, with another 2.5 million newly infected with HIV. Beyond the human cost, the U.S. government spent $28 billion fighting HIV in 2012, and some African countries lose 1% in GDP growth each year due to the disease. It's difficult to grasp these numbers, but it's a problem crying out for several solutions.

One such solution is offered by Female Health Company  (NASDAQ: FHCO  ) : FC2, the only female condom approved by the Food and Drug Administration and the World Health Organization.

Social opportunity
The Bill and Melinda Gates Foundation recently called for proposals for its Grand Challenges in Global Health grant program. One of the topics addressed this year is "reinventing the condom." As the blog post describes the issue:

It may seem obvious, but the success and impact of any public health tool hinges on that tool being used consistently and correctly by those who need it. Vaccines sitting on shelves don't prevent disease. New tuberculosis drug regimens won't help if patients stop taking them halfway through the necessary days. Likewise, the potential value of condoms is limited by inconsistent use.

The FC2 condom is a superb public health tool that allows women to initiate protection against sexually transmitted diseases. As to making sure it is used consistently and correctly, Female Health has a variety of initiatives. In South Africa, Female Health has distributed 20 million condoms and trained 10,000 health providers. The company also runs a website with product information and training, it will be investing $14 million over the next six years in HIV/AIDS and reproductive education with global agencies, and it has set a goal of reaching 120 million more women in the poorest countries by 2020.

Profitable opportunity
Some may guess that doing business with developing countries wouldn't allow for a very profitable business. However, when South African companies like Sasol  (NYSE: SSL  )  -- which estimated 18% of its workforce carried HIV in 2007 -- must dedicate departmental budgets to HIV/AIDS, there are plenty of opportunities for Female Health to cover costs and earn a return. A healthier workforce for Sasol would simply cost less for the company, and Female Health can help companies like Sasol achieve a healthier workforce.

Closer to home, at least 3% of Washington, D.C., residents carry HIV/AIDS. Working with Johns Hopkins, a study found:

...a public-private partnership to provide and promote FC2 female condoms, prevented enough HIV infections in the first year alone to save over $8 million in avoided future medical care costs (over and above the cost of approximately $445,000 for the program). This means that for every dollar spent on the program, there was a cost savings of nearly $20.

FHCO Revenue TTM data by YCharts.

Risky opportunity
Female Health's major customers are from the public sector -- like the United Nations Population Fund and USAID -- which the company warns can make for lumpy revenue due to politics, changes in leadership, funding issues, and other delays. Additionally, while right now the FC2 is the only FDA and WHO-approved female condom, others are under development.

Still, with a pure play in female condoms, the company achieves a staggering double-digit net profit margin: 44% for 2012. This dwarfs the conglomerate and Trojan condom maker Church & Dwight's (NYSE: CHD  ) 12% net margin, even though Church & Dwight is more expensive on a P/E basis and offers a lower dividend yield than Female Health.

A niche play
Female Health's operations not only enrich the world, but have enriched investors. Its product is proven in both efficacy and economics, and offers a barrier to entry with regulatory approval. While is has the downside of relying heavily on public sector customers, Female Health is making a push for wider consumer adoption through offering the product in stores like Walgreens. Even if you may not deem it a worthy investment, it's a fascinating company.

Profiting from our increasingly global economy can be as easy as investing in your own backyard. The Motley Fool's free report "3 American Companies Set to Dominate the World" shows you how. Click here to get your free copy before it's gone.

Ford's Explorer: To Russia, With Love

The first Ford Explorer to be built entirely outside of the U.S. rolled off an assembly line Thursday at the Ford Sollers Elabuga assembly plant in Russia. Photo source: Ford Motor Company

Here's an interesting first: On Thursday, a factory owned by Ford's (NYSE: F  ) Russian joint venture built the very first Ford Explorer ever made outside of the United States.

Explorers have been assembled outside of the U.S. before, but until Thursday, all of those SUVs started out on an assembly line in Chicago. Those Explorers were partially assembled, and then shipped abroad as "knock-down" versions – kits, essentially – to be finished in other countries.

Ford, like other automakers, uses those "knock-down" kits as a way to get around some countries' tariffs on imported vehicles. But Thursday's start of Explorer production in Russia is about something else: Ford's goal of becoming a leading player in a quietly growing new market.

Still a relatively small market, but with huge potential
Russia is no longer a communist country, but Russians don't buy a lot of new cars, at least not yet. Sales volumes in the world's largest nation are still tiny compared to the huge market for vehicles that has blossomed in its southern neighbor, China, over the last decade.

Russians bought just 2.94 million vehicles last year, compared to 14.5 million here in the U.S. and 19.3 million in China. And that number is growing very slowly – sales in the first quarter of 2013 were essentially flat versus year-ago totals.

Russia is still kind of a challenging place to sell cars, and not just because folks don't have a lot of money. Many of Russia's roads and bridges are poorly maintained, and the infrastructure isn't there to support lots of traffic, at least not yet. Most people still move about the country by rail. But given Russia's vast wealth of natural resources, the potential, like Russia itself, is huge.

Ford thinks Russia will soon overtake Germany to become Europe's largest car market – perhaps as early as next year, a Ford executive said last week. And Ford is one of a handful of carmakers working hard to get established in the Russian market while it's still relatively small.

A sizable presence in Russia, set to grow soon
Already, Ford has three factories in Russia, built with its local joint-venture partner, Sollers. And the brand is well-established, with the Focus compact a regular on Russia's best-selling-car charts. It was the country's fourth-best-selling car last month, according to the invaluable Best Selling Cars Blog.

Right now, Ford has the capacity to build 120,000 vehicles a year in Russia, a number that will expand to 300,000 as it adds additional production lines over the next couple of years.

The challenge so far for Ford – as well as for General Motors (NYSE: GM  ) , which is also establishing a local presence in Russia -- has been supply lines. Unlike China, Russia doesn't (yet) have many local companies that can produce parts and supplies for Ford at a global standard of quality. That means that Ford has had to import many parts, a cumbersome process that can involve long customs delays and other hassles.

But that is changing. Ford only gets about 20% of its parts locally now, but hopes to reach 60% by 2015, the company said recently.

Ford has clearly learned from experience
One of Ford's biggest mistakes in the last decade was its failure to get established in China's booming market early on. Preoccupied with its problems elsewhere, the Blue Oval looked on as rivals like GM and Volkswagen (NASDAQOTH: VLKAY  ) established themselves as China's market heavyweights.

Ford is now scrambling to catch up in China (and doing a good job of it, by the way). But its efforts to get established in Russia while the market is still small should serve it well as the market there continues to grow.

Is it time to worry about Ford?
If you're concerned that Ford's turnaround has run its course, relax -- there's good reason to think that the Blue Oval still has big growth opportunities ahead. We've outlined those opportunities in detail, in the Fool's premium Ford research service. If you're looking for some freshly updated guidance to Ford's prospects in coming years, you've come to the right place -- click here to get started now.

3 Solid Stocks With Decades of Annual Dividend Increases

Compound interest is the greatest wealth-building tool in any investor's toolbox. Time plus interest equals big money.

The same super-simple calculation is also the key to successful dividend investing. Great dividend-paying stocks keep their payouts steady for decades at a time, tapping right into the magic of compound interest.

But the best dividend stocks deliver a double dose of compound returns, because they don't just make rock-steady payments every year. They grow their payouts like a Swiss-made clockwork, so the effective interest rate keeps increasing as well.

Compound returns on top of compound returns -- now that's a cash machine if I ever saw one!

Let's take a look at three classic dividend growers: Procter & Gamble (NYSE: PG  ) , Altria Group (NYSE: MO  ) , and McDonald's (NYSE: MCD  ) . These classic cash machines have increased their payouts without fail for at least 37 consecutive years, creating heaps of investor wealth in the process.

First, there's something to be said about a solid core business. All three of these companies have delivered exactly what consumers wanted, needed, or were addicted to for decades on end. So before even looking at the wealth-boosting effects of rising dividend payments, the stocks have absolutely crushed the S&P 500  (SNPINDEX: ^GSPC  ) market index in the long run:

PG data by YCharts

In an effort to compare similar fruits, this chart goes back to 1977 which is where McDonald's started its uninterrupted dividend-boosting run. Altria got started in 1970, while Procter & Gamble's perfect history of dividend increases stretches back to 1957.

On a split-adjusted basis, fast-food veteran McDonald's paid out $0.002 per share in 1976. Today, the annualized dividend stands at $3.40 per share. In other words, McDonald's has multiplied its dividend payouts by 1,370 in 37 years. On average, that's an annual increase of 21.6%.

Have these dividend payouts made a difference to McDonald's investors? You bet. Reinvesting dividends along the way would have increased your already fantastic return on an early McDonald's investment by another 60%:

MCD data by YCharts

The dividend difference grows even larger when we turn to all-around consumer goods giant Procter & Gamble. At the start of our McDonald's-matching chart, P&G's split-adjusted annual payout stood at $0.07 per share. Today, the payouts have multiplied to $2.58 per share, per year. And these rising payouts would have doubled your returns since 1977:

PG data by YCharts

But the real dividend king here is tobacco wrangler Altria. Across the 37-year span we're looking at today, Altria's annual dividends per share have grown from $0.02 to $2.08, with spectacular results for patient dividend investors:

MO data by YCharts

These three stocks offer respectable dividend yields on new investments, too. From P&G's 3.1% yield to Altria's 4.6%, these stocks will beat any savings account in terms of short-term returns on your invested dollar.

But as the charts and figures above demonstrated, the real magic of dividend investing comes from letting the payouts ride over the long haul. Compound interest is a powerful thing, especially when you layer growth on top of more growth.

Top dividend stocks for the next decade
The smartest investors know that dividend stocks simply crush their non-dividend paying counterparts over the long term. That's beyond dispute. They also know that a well-constructed dividend portfolio creates wealth steadily, while still allowing you to sleep like a baby. Knowing how valuable such a portfolio might be, our top analysts put together a report on a group of high-yielding stocks that should be in any income investor's portfolio. To see our free report on these stocks, just click here.

Last Week's Biggest Stock Movers: Janus, Green Dot and More

Tim Boyle/Bloomberg/Getty ImagesJanus Capital stock surge when the firm hired investing guru Bill Gross. In any given week, some stocks are sure to shoot up, and others will plummet. The big gainers inspire us to keep investing. The presence of the decliners keeps our greed in check while reminding us about the risks of the equity markets. Let's go over some of last week's best and worst performers. Janus Capital Group (JNS) -- Up 41 percent last week One of last week's biggest gainers was Janus, soaring on Friday after mutual fund manager Bill Gross announced that he would be leaving Pimco to join Janus. It's a big deal for Gross, who managed to grow Pimco's Total Return Fund to $222 billion in assets under management over the past 43 years. Landing Gross would be a great catch for any fund family, but it's particularly sweet for Janus since its strength in the past has been its stock funds. The arrival of Gross should find a lot of fixed income investors flocking to Janus. Green Dot (GDOT) -- Up 16 percent last week Prepaid debit card leader Green Dot got the green light from investors after teaming up with Walmart (WMT) for the retailer's new GoBank low-cost mobile checking platform. Teaming up with Green Dot's prepaid mastery gives it a way to start serving less-affluent customers without taking on gobs of risk. At the end of the day, the market likes Green Dot's potential as the world's largest retailer puts some marketing muscle behind the initiative. ReWalk Robotics (RWLK) -- Up 12 percent last week Giving the disabled hope has made ReWalk Robotics a winner since it went public a couple of weeks ago. It provides a robotic exoskeleton for folks with spinal cord injuries, allowing them to stand up and walk through powered hip and knee controls. It's not cheap, as you can probably imagine. The exoskeleton can reportedly run as high as $85,000. However, ReWalk got a boost last week after a major German insurance company became the first insurer to agree to reimburse a patient going for ReWalk's procedure. Ascena Retail Group (ASNA) -- Down 20 percent last week Ascena lost nearly a fifth of its value after posting disappointing quarterly results. Ascena may not be a household name, but mall shoppers are probably familiar with its Dressbarn and Lane Bryant clothing stores. Earnings fell short of Wall Street expectations on negative comparable-store sales trends, and the rest of the year isn't looking any better. Ascena is now forecasting a profit of 90 cents a share to $1 a share for its fiscal year, well short of the $1.24 a share that analysts had been betting on before the report. InvenSense (INVN) -- Down 15 percent last week InvenSense took a hit last week after an analyst downgraded the stock of the leading maker of motion-processing chips. R.W. Baird took its rating from outperform to neutral, slashing its price target from $30 to $23 on fears that cutthroat competitors are finding their way into more smartphones and tablets. InvenSense continues to grow at a healthy rate, but it has been nearly a year since it has beaten analyst estimates on quarterly profitability. Sears Holdings (SHLD) -- Down 10 percent last week Hard times continue for Sears and Kmart parent Sears Holdings. The week began with the New York Post reporting that plans for Sears to sell its Canadian operations are falling short, with no potential buyer submitting an acceptable bid after examining its financials. That was followed a few days later by the resignation of Sears Canada's CEO. Another vote of no confidence came later in the week when it was revealed that the reeling retailer's second-largest investor did not participate in a $400 million loan to shore up its capital ahead of the critical holiday shopping season. More from Rick Aristotle Munarriz
•Wall Street This Week: Microsoft, McCormick and More •Can the Apple Watch Live Up to the iPhone 6? •LeBron James Will Have to Wait for His Roller Coaster

China targets Apple for location-tracking apps

A CCTV report said that iPhone features can potentially put China's state secrets at risk. NEW YORK (CNNMoney) China's state-run media is slamming Apple for the iPhone's ability to track users' locations.

The government-controlled CCTV network reported Friday that Apple (AAPL, Tech30) devices record users' every move and message.

"We simply don't know what their motive is in collecting this information," the anchor said.

The CCTV report goes on to mention that those iPhone features can potentially put China's state secrets at risk.

The report doesn't mention that all smartphones have apps that can track users, including those made by Chinese manufacturers Huawei, Xiaomi and ZTE.

Related story: Chinese hackers broke into U.S. federal employee network

China's vast and growing technology industry is a source of great national pride.

From time to time, the country targets foreign companies such as Apple for various reasons:

China wants to back its own companies. The United States has its free market, but in China, the government owns or exerts control over key industries, including network operators and device makers. The government sometimes creates suspicion against non-Chinese products to boost domestic companies.

China wants to avert NSA spying. Apple has computer servers in the United States, which means the U.S. government can make secretive information demands on its data. Such information might indicate where hidden government facilities are located, according to Alex McGeorge, head of threat intelligence for cybersecurity firm Immunity.

China wants better access to spy on its own people. The country already practices mass snooping on its citizens to clamp down on free speech, political dissent and religion. Steering customers away from iPhones and toward Chinese smartphone companies gives the government more access.

"They want the data from the tracking," said Bryan Cunningham, a lawyer who advised the Clinton and Bush administrations on cybersecurity.

  Transformers is #1 film in China...ever

This latest attack! bodes poorly for the iPhone maker. China is home to the world's second biggest population at 1.3 billion people, and it's an important revenue stream for Apple.

The company did not respond to requests for comment.

Related story: China targets Nikon in annual expose

CCTV has previously accused Apple of poor customer service and warranty standards.

Many foreign firms have been hurt when Chinese state-controlled media go after them. It's led to a decline in sales or government investigations. In some cases, firms have even changed their policies after such attacks or issued recalls.

Volkswagen (VLKAF) recalled 384,141 vehicles in China after a 2013 consumer rights' broadcast. State media have also targeted Starbucks (SBUX), Japan's Nikon, British drug giant GlaxoSmithKline (GLAXF) and French dairy company Danone (DANOY) in recent years.

5 Stocks Under $10 Set to Soar

DELAFIELD, Wis. (Stockpickr) -- There isn't a day that goes by on Wall Street when certain stocks trading for $10 a share or less don't experience massive spikes higher. Traders savvy enough to follow the low-priced names and trade them with discipline and sound risk management are banking ridiculous coin on a regular basis.

>>5 Blue-Chip Stocks to Trade for Gains: Must-See Charts

Just take a look at some of the big movers in the under-$10 complex from Thursday, including New Concept Energy (GBR), which is exploding higher by 29%; Golden Minerals (AUMN), which is ripping to the upside by 27%; StemCells (STEM), which is soaring higher by 20%; and Swisher Hygiene (SWSH), which is moving up by 17%. You don't even have to catch the entire move in lower-priced stocks such as these to make outsized returns when trading.

One low-priced stock that's ripping to the upside today is American Apparel (APP), which I highlighted in May 30's "5 Stocks Ready to Break Out" at around 60 cents per share. I mentioned in that piece that shares of American Apparel were starting to bounce higher right off its 50-day moving average. That bounce was starting to push shares of APP within range of triggering a big breakout trade above a key downtrend line that was acting as resistance for over a month.

>>5 Stocks With Big Insider Buying

Guess what happened? Shares of American Apparel finally triggered that breakout today after the stock consolidated and hug its 50-day moving average for a few weeks. This stock spiked sharply higher at the open tagging an intraday high of 78 cents per share with massive upside volume. That represents a large gain of 30% for anyone who bought this stock at around 60 cents per share in anticipation of that breakout. As you can see, trading small-cap stocks can lead to massive profits in a very short timeframe.

Traders should continue to watch shares of APP here, since this stock could still be in the early stages of making a much larger move to the upside. The next key resistance levels to watch for a potential breakout trade are at today's intraday high of 81 cents to more resistance at 82 cents per share.

Low-priced stocks are something that I tweet about on a regular basis. I frequently flag high-probability setups, breakout candidates and low-priced stocks that are acting technically bullish. I like to hunt for low-priced stocks that are showing bullish price and volume trends, since that increases the probability of those stocks heading higher. These setups often produce monster moves higher in very short time frames.

>>5 Stocks Set to Soar on Bullish Earnings

When I trade under-$10 names, I do it almost entirely based off of the charts and technical analysis. I also like to find under-$10 names with a catalyst, but that's secondary to the chart and volume patterns.

With that in mind, here's a look at several under-$10 stocks that look poised to potentially trade higher from current levels.

Himax Technologies

One under-$10 semiconductor player that's starting to move within range of triggering a near-term breakout trade is Himax Technologies (HIMX), which provides display imaging processing technologies to consumer electronics worldwide. This stock has been destroyed by the sellers so far in 2014, with shares off sharply by 54%.

>>4 Big Stocks to Trade (or Not)

If you glance at the chart for Himax Technologies, you'll notice that this stock has been downtrending badly for the last three months and change, with shares falling from its high of $16.08 to its recent low of $5.89 a share. During that downtrend, shares of HIMX have been making mostly lower highs and lower lows, which is bearish technical price action. That said, shares of HIMX have now started to rebound a bit off that $5.89 low and it's starting to push within range of triggering a near-term breakout trade.

Traders should now look for long-biased trades in HIMX if it manages to break out above some near-term overhead resistance levels at $6.80 to $7.05 a share with high volume. Look for a sustained move or close above those levels with volume that registers near or above its three-month average action of 6.86 million shares. If that breakout gets underway soon, then HIMX will set up to re-test or possibly take out its next major overhead resistance levels at its 50-day moving average of $7.74 a share to $8.04 a share. Any high-volume move above those levels will then give HIMX a chance to tag $9 to $9.50 a share.

Traders can look to buy HIMX off weakness to anticipate that breakout and simply use a stop that sits right around some key near-term support levels at $6.12 to $5.89 a share. One can also buy HIMX off strength once it starts to clear those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

Imris

Another under-$10 health care player that's starting to move within range of triggering a near-term breakout trade is Imris (IMRS), which designs, manufactures and sells image-guided therapy solutions that enable surgeons to obtain information and make decisions during the course of procedures. This stock has been slammed hard by the bears so far in 2014, with shares off sharply by 31%.

>>3 Big-Volume Stocks to Trade for Breakouts

If you take a look at the chart for Imris, you'll see that this stock has been downtrending badly for the last three months and change, with shares moving lower from its high of $2.90 to its recent low of 79 cents per share. During that downtrend, shares of IMRS have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of IMRS have now started to rebound sharply higher off that 79 cents per share low and it's now starting to move within range of triggering a near-term breakout trade.

Market players should now look for long-biased trades in IMRS if it manages to break out above its 50-day moving average of $1.16 a share and then once it takes out some more key overhead resistance at $1.20 a share with high volume. Look for a sustained move or close above those levels with volume that registers near or above its three-month average volume of 271,398 shares. If that breakout materializes soon, then IMRS will set up to re-test or possibly take out its next major overhead resistance levels at $1.33 to $1.52 a share, or even its 200-day moving average of $1.59 a share.

Traders can look to buy IMRS off weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support at $1 a share. One can also buy IMRS off strength once it starts to take out those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

Bebe Stores

One under-$10 apparel stores player that's starting to move within range of triggering a major breakout trade is Bebe Stores (BEBE), which designs, develops and produces a line of women's apparel and accessories. This stock has been destroyed by the sellers over the last three months, with shares down huge by 47%.

>>4 Stocks Under $10 to Trade for Breakouts

If you take a glance at the chart for Bebe Stores, you'll see that this stock has been downtrending badly for the last two months and change, with shares moving lower from its high of $6.84 to its recent low of $3.22 a share. During that downtrend, shares of BEBE have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of BEBE have started to consolidate and trend sideways over the last few weeks and this stock is now starting to push within range of triggering a major breakout trade.

Traders should now look for long-biased trades in BEBE if it manages to break out above some key near-term overhead resistance at $3.50 a share with high volume. Look for a sustained move or close above that level with volume that hits near or above its three-month average volume of 456,428 shares. If that breakout hits soon, then BEBE will set up to re-test or possibly take out its next major overhead resistance levels at $4 to $4.25, or even its 50-day moving average of $4.64 a share. A move to $5 or $5.50 is even possible if BEBE gets some high-volume momentum.

Traders can look to buy BEBE off weakness to anticipate that breakout and simply use a stop that sits right below its 52-week low of $3.22 a share. One can also buy BEBE off strength once it starts to take out those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

Orbcomm

Another under-$10 data communications player that's starting to trend higher and move within range of triggering a big breakout trade is Orbcomm (ORBC), which provides machine-to-machine communication solutions primarily in the U.S., Japan and the Middle East. This stock has is down notably over the last three months, with shares off by 12%.

>>5 Toxic Stocks You Should Sell This Summer

If you look at the chart for Orbcomm, you'll see that this stock has been uptrending a bit over the last two months, with shares moving higher from its low of $5.68 to its recent high of $6.77 a share. During that uptrend, shares of ORBC have been making mostly higher lows and higher highs, which is bullish technical price action. Shares of ORBC are now starting to spike higher today right off both its 50-day and 200-day moving averages. That spike is starting to push shares of ORBC within range of triggering a big breakout trade above some key near-term overhead resistance levels.

Market players should now look for long-biased trades in ORBC if it manages to break out above some near-term overhead resistance levels at $6.57 to $6.77 a share and then once it takes out more resistance levels at $6.80 to $7.01 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average action of 185,998 shares. If that breakout begins soon, then ORBC will set up to re-test or possibly take out its next major overhead resistance levels at $8 to its 52-week high at $8.21 a share.

Traders can look to buy ORBC off weakness to anticipate that breakout and simply use a stop that sits right below some near-term support at $6.16 or at $6 a share. One can also buy ORBC off strength once it starts to move above those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

Unwired Planet

One final under-$10 application software player that looks ready to trigger a major breakout trade is Unwired Planet (UPIP), which develops patents that allow mobile devices to connect to the Internet. This stock has been red hot so far in 2014, with shares up a whopping 65%.

If you take a glance at the chart for Unwired Planet, you'll notice that this stock has been uptrending over the last month and change, with shares moving higher from its low of $1.95 to its recent high of $2.38 a share. During that uptrend, shares of UPIP have been consistently making higher lows and higher highs, which is bullish technical price action. Shares of UPIP are now starting to spike higher right above its 50-day moving average and it's quickly moving within range of triggering a major breakout trade above some key near-term overhead resistance levels.

Traders should now look for long-biased trades in UPIP if it manages to break out above some near-term overhead resistance levels at $2.38 to its 52-week high of $2.44 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average action of 1.10 million shares. If that breakout kicks off soon, then UPIP will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $3 to $3.50 a share, or even $4 a share.

Traders can look to buy UPIP off weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support levels at $2.12 to $2.05 a share, or even $2 a share. One can also buy UPIP off strength once it starts to bust above those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

To see more hot under-$10 equities, check out the Stocks Under $10 Setting Up to Explode portfolio on Stockpickr.

-- Written by Roberto Pedone in Delafield, Wis.

RELATED LINKS:

>>5 Retail Stocks to Trade for Gains in June

>>5 Stocks Poised for Breakouts

>>Move Into Hedge Funds' 5 Favorite REITs This Summer

Follow Stockpickr on Twitter and become a fan on Facebook.

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

Roberto Pedone, based out of Delafield, Wis., is an independent trader who focuses on technical analysis for small- and large-cap stocks, options, futures, commodities and currencies. Roberto studied international business at the Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany. His work has appeared on financial outlets including

CNBC.com and Forbes.com. You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zerosum24.

IAA cautions SEC Commissioner Gallagher about third-party adviser exams

SEC Commissioner Daniel Gallagher (Bloomberg News)

A leading investment-adviser organization raised concerns about regulatory examinations being conducted by private-sector firms instead of the Securities and Exchange Commission in a letter to the SEC member who is championing the change.

In speeches and public appearances over the last month, SEC Commissioner Daniel Gallagher has recommended the SEC write a rule that would require advisers to hire an examiner to review their operations. The measure would be similar to one the agency adopted in 2009 that mandates that advisers who maintain custody of client assets bring in an auditor to verify the funds are safe.

Third-party exams would allow the SEC to reach more advisers, according to Mr. Gallagher. The agency says it has the resources only to examine annually about 9% of the approximately 11,000 registered investment advisers.

In a June 9 letter to Mr. Gallagher, the Investment Adviser Association cautioned him about drawbacks of his proposals.

“We are concerned about the potential disadvantages of third-party examinations as compared with SEC examinations,” wrote David G. Tittsworth, the IAA executive director. “Such issues include the standards to be applied in such examinations, the scope and frequency of any such examinations, the qualification and SEC oversight of third parties, confidentiality and the cost to advisers.”

Prior to considering a rule, the SEC should assess third-party reviews voluntarily used by advisers such as financial audits, internal control reports, compliance reviews, mock audits and internal audits, the letter stated.

“Before engaging in any rulemaking that would require SEC-registered advisory firms to undertake an examination or other review by a third party, it would be helpful to understand what practices are already undertaken, how such practices are utilized, the types of third parties retained and the costs involved,” Mr. Tittsworth wrote.

In an interview on June 6, Mr. Gallagher defended third-party exams for advisers.

“It’s the best idea I’ve heard,” Mr. Gallagher said. “I’m the only person out there I see proposing something we can do ourselves rather than begging Congress for money.”

He is confident that he can build support for his proposal.

“I’ve heard from a lot of people on this issue,” Mr. Gallagher said. “I think it has legs.”

Although the SEC has not received from Congress the funding it says it needs to hire 250 additional investment-adviser examiners, Mr. Tittsworth said the agency could increase adviser coverage by shifting some of the money it spends on broker-dealer oversight to investment advisers.

“We encourage the commission to consider reallocating its existing resources to increase investment adviser examination activity, which it could ! accomplish without additional legislation or rulemaking,” Mr. Tittsworth wrote.

He also took issue with Mr. Gallagher's assertion that the SEC is finding more broker-dealer violations than investment-adviser infractions because it has the help of a self-regulatory organization, the Financial Regulatory Authority Inc., to oversee brokers.

Mr. Tittsworth said SEC examinations of advisers cover a significant amount of assets under management; that the agency analyzes all advisory firms on an ongoing basis, even if it doesn't formally examine them; and that the total number of registered advisers is overstated because many are separate legal entities that operate as one business.

“We submit that instead of utilizing apples-to-oranges comparisons, it would be more productive to focus on ways to improve the SEC's investment adviser examination program to achieve a higher level of investor protection,” Mr. Tittsworth wrote.

Caterpillar: Are Mining Sales Bottoming?

Good news, fans of mining-equipment companies like Caterpillar (CAT) and Joy Global (JOY)–Deutsche Bank believes the “fundamentals are stabilizing” even if the industry isn’t “fully out of the woods yet.”

Bloomberg News

Deutsche Bank’s Vishal Shah and team explain:

A number of leading indicators point to a stabilization in mining equipment sales: 1) equipment destocking at mines is 75-80% over and is expected to be completed by year end and excess capacity for Caterpillar is 10-15%; 2) Excluding 1 Caterpillar dealer in Indonesia, dealer inventories are largely normalized; 3) Fleet utilization at Emeco, a leading mining equipment rental company that we use as a proxy for utilization at mines and, has bottomed and begun to recover; 4) bidding activity for operations and maintenance work for contract miners has improved, which is another indicator that excess capacity is being absorbed; In the case of Caterpillar, replacement rates are running <5%, a historical low, and implies a fleet age run rate of +20 years, vs. the useful life of 8-15 years.

In other words, it really can’t get much worse (or can it?). Joy Global, which has dropped 0.9% so far this year, should benefit once the cycle turns, Shah says, but he prefers Caterpillar, which has “a more favorable risk/reward,” despite gained 15% in 2014.

Shares of Caterpillar have dropped 0.5% to $103.14 at 3:21 p.m., while Joy Global has gained 0.3% to $57.95.

Despite S&P 500's New High, Stocks Face Challenges

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Stocks ended the first quarter with a big rally; the Standard & Poor's 500 Index actually closed -- barely -- at a new high. The fact is, however, that the market overall was a muddle -- and likely to stay that way. And second quarters are often dicey.

On the Surface

The S&P 500 finished up nearly 15 points to 1,872.34 on Monday, breaking its old record of 1,872.25, set on March 18. It's up 1.3% for the year. The Nasdaq Composite rose 43 points, or 1%, to 4,199 and is sporting a small gain for the year, 0.5%. The Dow Jones industrials, up 135 points (0.8%) to 16,458, are still down slightly on the year -- about 0.7%.

The one-day gains for the Index, the Dow, and the Nasdaq Composite were their best in two weeks. The S&P 500 and the Dow ended March with their second monthly gains in a row, up 0.7% and 0.8%, respectively. But the Nasdaq fell 2.5% for the month and for the second time in three months.

The market overall gained support from energy and utility stocks. About 288 S&P 500 stocks were higher, led by First Solar (NYSE: FSLR) and steel-maker Allegheny Technologies Inc. (NYSE: ATI), up 22% and 18.6%, respectively.

So much for the surface numbers. This is one of those markets where you must dig through the numbers to get a clear understanding of what happened. March and the quarter didn't treat all stocks alike.

Digging Into The Numbers

Given the strong March of S&P 500 and the Dow, how to explain the Nasdaq's March fall? The short answer is that a lot of momentum stocks ran out of gas and fell, often heavily.

Netflix Inc. (NASDAQ: NFLX) fell $6.84, or 1.9%, to $352.03. For the month, the shares stumbled 21%; they dropped 4.4% for the quarter. Amazon.com Inc. (NASDAQ: AMZN) closed down 0.5% to 336.52. It fell 6.1% for the month and 15.6% for the quarter. Google Inc. (NASDAQ: GOOG) fell 8.3% for the month and 0.6% for the quarter. It at least ended the month as the world's thirst most valuable company. Staples (Nasdaq: SPLS) has no similar silver lining for its lackluster performance.

See also: Emerging Market ETFs Show Signs of Life

Biotechnology stocks suffered a particularly nasty beating in part because they were among the hottest of momentum plays in 2013 and the first two months of this year.

The NYSE ARCA Biotechnology Index fell 8.1%. Two exchange-traded funds fell more: The iShares Nasdaq Biotechnology Index ETF (IBB) fell 10.6%. The SPDR S&P Biotech ETF (XBI) dropped 12.9%. That was after rising 16.6% and 25.8%, respectively, in the first two months of the year. Alexion Pharmaceuticals (NASDAQ: ALXN) fell 18 from its intraday high of $185.43 on Feb. 27. Gilead Sciences Inc. (NASDAQ: GILD) was an S&P 500 laggard.

There were exceptions to the Nasdaq damage. The most visible winner may have been Microsoft Corp. (Nasdaq: MSFT), up 7% for the month and 9.6% for the quarter. Investors are optimistic with Satya Nadella replacing Steve Ballmer as CEO. Microsoft was the second-best Dow performer in March after AT&T Corp. (NYSE: T) and second-best for the quarter after Pfizer Inc. (NYSE: PFE).

Second Quarter Omens

What's ahead depends on the economy's performance and, probably to a larger-than-expected degree on geopolitical concerns.

According to the Stock Traders Almanac, April is the best month for Dow stocks and second-best for S&P 500 stocks. It's the third-best month for Nasdaq stocks. But April tends to tail off when tax season is done and investors have made annual Individual Retirement Account contributions for 2013. Then, comes May, one of the weakest months of the year and traditionally the start of the year's worst six months.

The geopolitical risk comes largely from the Russia, Ukraine and what happens to the Crimean region of Ukraine. Retail gasoline prices moved up 7.1% in the quarter, according to AAA's Daily Fuel Gauge Report as crude oil moved up 3.2%. And there will be continued worries about the health of China.Those concerns alone pushed a number of global investors to move money into the U.S. dollar. Gold fell nearly 2.9% for the month to $1,283.80 an ounce but is still up 6.8% for the year.

Should you worry about the Federal Reserve and interest rates? Probably not. Janet Yellen, the central bank's new chairman, has been signaling interest rates will remain low for the balance of 2014 and into 2015. The 10-year Treasury yield was 2.723% on Monday, up slightly from Friday.

A correction is possible. Stocks often fall 7% to 10% during the course of any year. A big ugly correction, like the crash in 2008, is probably not likely without a real catalyst such as a major and abrupt deterioration of the economy.

Posted-In: News Economics Federal Reserve Pre-Market Outlook After-Hours Center Markets ETFs Best of Benzinga

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

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Charles Schwab Corp (NYSE:SCHW): Why Schwab Is An Attractive Investment Opportunity?

Charles Schwab Corp (NYSE:SCHW) is an attractive investment opportunity given its significant earnings leverage to rising interest rates as well as a solid runway for core business growth.

Based in San Francisco, California, Charles Schwab provides a full range of securities brokerage, banking, money management and financial advisory services to individual investors and independent investment advisors.

The latest Fed decision to taper its bond buying program represents a significant step in the right direction toward net interest margin (NIM) improvement.

BMO Capital Markets analyst David Chiaverini views the announcement with measured enthusiasm for the short to intermediate term given that Schwab is still disproportionately leveraged to changes at the short end of the curve where rates are expected to remain low well past the end of the bond buying program

[Related -Five Uptrending Stocks At New 52 Week Highs To Start July]

NIM is expected to remain steady through 2015 before turning into a material tailwind. For core business growth, Schwab will continue to benefit from strong net, new asset growth as it refines its advice offering and increases awareness of its capabilities in the marketplace.

With 17 percent of its investor services clients now in an ongoing advice offering, the company still has a large opportunity to improve utilization in its existing retail client base, which would pay off through consistent long-term growth in recurring revenue streams.

[Related -How To Prepare Your Portfolio For Rising Interest Rates]

Chiaverini said trading activity remains at the low-end of historical levels as clients remain generally risk adverse and are doing most of their trading around account rebalancing. Management continues to believe trading activity will remain fairly stable, meaning daily average revenue trades (DARTs) will grow in line with account growth.

According to data captured in Charles Schwab's most recent Trading Services Sentiment Survey, only 10 percent of traders say they have a bearish outlook for the next three to six months – the lowest level seen since the survey's inception in February 2008, and a notable drop from September 2013 when 15 percent of traders surveyed had a negative short-term outlook.

While the general outlook is more positive, Schwab hasn't seen bullish sentiment translate into changes in trading behavior yet. Despite lower trading activity, retail engagement remains solid as clients are more interested in fee-based programs than ever before. Schwab will do more financial consultations with clients this year (about 100,000) than any other year in the firm's history. The breakaway broker trend remains healthy and steady as Schwab will roughly add the same number of teams this year as last year.

In the bank, management is excited about new pledged asset line products offered to retail and advisor clients. The company has $1 billion in balances now and expects that to grow and build momentum. For advisors, the lending product can help it pay off loans needed before breaking away from their current employer and going independent. For a retail client, it can be a liquidity strategy that is more stable than a margin loan.

Chiaverini, however, noted that the retail channel (investor services) is still lagging advisor services in asset growth. The company believes retail will be strengthened as unemployment continues to decline and clients have more discretionary income to invest.

In addition, asset growth should accelerate as the spread between money market rates and bank deposits shrinks over time. With banks paying a much higher rate on deposits than Schwab is able to pay on sweep deposits, clients do not have much incentive to move unencumbered money from their banks to a brokerage account.

Roughly 40-50 percent of Schwab clients have direct deposit set up with the company, meaning Schwab bank serves as these clients' primary bank.

Schwab's improved earnings are helping to grow capital and Schwab bank paid a dividend to the parent for four consecutive quarters now. As its consolidated tier-1 leverage ratio builds back toward 6.75-7.00 percent (6.3 percent as of the third quarter 2013) the company will look at capital options including buybacks and increased dividends. The company targets a payout ratio in a range of 20-30 percent of cash flow.

Chiaverini noted that the independent branch strategy is progressing well with a "couple dozen" branches currently operating and asset gathering trending above initial expectations. He expects roughly 10-15 branch openings to continue over the next couple years.

Net new asset (NNA) growth has been trending in the mid-single digits, and in a normalized environment the company is targeting 8-10 percent NNA growth, driven by a more favorable operating backdrop and execution of its growth initiatives.

As such, under a normalized environment, it would not be unreasonable to expect the company to report low-double-digit revenue growth, a 200 basis point (bp) differential between revenue growth and expense growth, leading to earnings growth in the mid-teens. Following capital management initiatives including potential buybacks, EPS should further increase.

3 Unusual-Volume Stocks to Trade for Breakouts

DELAFIELD, Wis. (Stockpickr) -- Professional traders running mutual funds and hedge funds don't just look at a stock's price moves; they also track big changes in volume activity. Often when above-average volume moves into an equity, it precedes a large spike in volatility.

>>5 Stocks Under $10 Set to Soar

Major moves in volume can signal unusual activity, such as insider buying or selling -- or buying or selling by "superinvestors."

Unusual volume can also be a major signal that hedge funds and momentum traders are piling into a stock ahead of a catalyst. These types of traders like to get in well before a large spike, so it's always a smart move to monitor unusual volume. That said, remember to combine trend and price action with unusual volume. Put them all together to help you decipher the next big trend for any stock.

>>5 Big Trades to Take in December

With that in mind, let's take a look at several stocks rising on unusual volume today.

Shenandoah Telecommunications

Shenandoah Telecommunications (SHEN) provides integrated voice, video and data communications services to end-user customers and other communications providers. This stock closed up 3.6% at $24.18 in Friday's trading session.

Friday's Volume: 184,000

Three-Month Average Volume: 115,970

Volume % Change: 65%

From a technical perspective, SHEN spiked higher here with above-average volume. This stock just formed a double bottom chart pattern, since buyers stepped in to support the stock over the last month at $22.17 and at $22.19. Shares of SHEN have now started to spike higher off $22.19 and it's quickly moving within range of triggering a near-term breakout trade. That trade will hit if SHEN manages to take out some near-term overhead resistance levels at its 50-day moving average of $25.19 to more near-term overhead resistance at $25.44 with high volume.

Traders should now look for long-biased trades in SHEN as long as it's trending above Friday's low of $23.23 or above more support at $22.19 and then once it sustains a move or close above those breakout levels with volume that's near or above 115,970 shares. If that breakout hits soon, then SHEN will set up to re-test or possibly take out its next major overhead resistance levels at $27.02 to its 52-week high at $29.15.

Western Refining

Western Refining (WNR) is a crude oil refiner and marketer of refined products. It also operates service stations and convenience stores. This stock closed up 3.6% at $39.03 in Friday's trading session.

Friday's Volume: 4.25 million

Three-Month Average Volume: 1.56 million

Volume % Change: 187%

From a technical perspective, WNR trended higher here right above some near-term support at $37.10 with above-average volume. This stock recently formed a double bottom chart pattern, after buyers came in to support the stock at $36.91 and $37.10. Since marking that bottom, shares of WNR have started to spike higher and move within range of triggering a big breakout trade. That trade will hit if WNR manages to take out Friday's high of $39.41 to its 52-week high at $40.95 with high volume.

Traders should now look for long-biased trades in WNR as long as it's trending above Friday's low of $37.90 and then once it sustains a move or close above those breakout levels with volume that this near or above 1.56 million shares. If that breakout hits soon, then WNR will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $45 to $48.

Omega Protein

Omega Protein (OME) produces and sells a number of protein and oil products derived from menhaden, including fish meal, fish oil and fish soluble. This stock closed up 6.8% to $13.98 in Friday's trading session.

Friday's Volume: 425,000

Three-Month Average Volume: 171,761

Volume % Change: 175%

From a technical perspective, OME ripped sharply higher here right above some near-term support at $13 with strong upside volume. This move is quickly pushing shares of OME within range of triggering a big breakout trade. That trade will hit if OME manages to take out some near-term overhead resistance levels at $14.50 to its 52-week high at $15.27 with high volume.

Traders should now look for long-biased trades in OME as long as it's trending above Friday's low of $13.25 or above $13 and then once it sustains a move or close above those breakout levels with volume that hits near or above 171,761 shares. If that breakout hits soon, then OME will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $17 to $20.

To see more stocks rising on unusual volume, check out the Stocks Rising on Unusual Volume portfolio on Stockpickr.

-- Written by Roberto Pedone in Delafield, Wis.

RELATED LINKS:

>>Timing the Fed's Taper

>>5 Rocket Stocks to Buy in December

>>5 Breakout Stock Trades for a Santa Claus Rally

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

Roberto Pedone, based out of Delafield, Wis., is an independent trader who focuses on technical analysis for small- and large-cap stocks, options, futures, commodities and currencies. Roberto studied international business at the Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany. His work has appeared on financial outlets including

CNBC.com and Forbes.com. You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zerosum24.