Agriculture Investment – How to Value Farmland for Investors

There are many factors to consider when approaching the valuation of an asset; the relationship between supply and tangible demand, the availability and affordability of credit to enable this demand, the earnings generated by the asset and the cost of generating that income. However, as with any asset, Investors should primarily consider the price to earnings ratio of farmland to identify the cost of each unit of income.

The value of commercially viable agricultural land is driven primarily by the profitability of the land as a commercial, income generating asset. The greater the income yield generated from the sale of crops, the higher the value of the land from which that yield is derived. This factor is the absolute key for both farming landowners and investor landowners. Tenant farmers will be prepared to pay higher rents on land where a greater income can be earned and investors will be prepared to pay a higher price for land where the income generated is higher.

The profitability of farmland can be measured simply by deducting the combined cost of ownership (mortgage interest), and of production (manpower, fuel, fertilizers seed etc.), from the revenue generated by way of the sale of the crops produced. It should therefore be noted that agricultural commodity prices play a crucial role in ascertaining land values. It is the influence of agricultural commodities that have to a large extent generated the recent gains in farmland prices in the UK, particularly during 2007 and 2008 when commodities were experiencing unprecedented highs. There are of course a number of other factors at play but a pure investor should look mainly at earnings and costs for a picture of the real value, regardless of asking prices. Using this methodology also quickly identifies over-pricing where the cost of ownership and production are close to, or outweigh income.

Supply also affects farmland values, and in areas where there is a high level of availability prices are likely to be lower than in areas where availability of good land is suppressed, either through a lack of sellers or an actual lack of existing land. In any agricultural economy the highest yielding land is taken into production first as it is the most profitable. Where profitability of the land in two different areas is similar, the availability of farmland explains much of the variation in prices.

A good example of this can be witnessed in Canada where despite a large availability of land (6.5 million km2) only a small proportion is able to produce premium agricultural yields. Demand for this more profitable land will be highest and it will be the most valuable, whilst less productive land will be less valuable.

Outside of this apparently simple relationship between farm profits (or rents), farmland availability and farmland values, one must also factor in the price of the commodities produced, which are also set by supply and demand. Therefore, to make a qualified projection of future farmland values, one must also have a clear understanding of trends in agricultural commodity prices.

Soft-commodities are cyclical in behaviour, and a greater global supply of say Soy, will drive the price down as it is freely available. There is then a clear economic disincentive for farmers to grow Soy the following year and therefore global stocks fall and the price rises again. These higher prices incentivise further investment in production and the cycle begins again. Other factors also play a part such as an abrupt shock in supply caused by drought or export bans from major producers. At DGC Business Consulting we saw a recent example of this was witnessed in late 2010 when Russia halted their exports of wheat, creating a global shortfall and a short-term spike in the price.

This short-term cyclical volatility in soft-commodities makes it difficult to assess farmland values in the short term as it is mostly production levels that have an influence, but the mid to long-term fundamentals of the supply of, and demand for commodities are much more important to the farmland investor. Capital growth is reliant upon long-term agricultural commodity trends rather than short-term price volatility. It is the long-term fundamentals of food demand growth and food supply constraints which have resulted in a historical upward trend in agricultural land values.

On the most basic level, the global population continues to grow at a rate of 200,000 per day, and is due to peak at 9 billion in 2050. This tells us that long-term demand for food will remain not only strong, but at current levels of production, totally unsupportable, therefore the value of the land that produces our food must rise.

David Garner is managing Partner at DGC Business Consulting Ltd, a boutique Investment Consultancy providing direct farmland investments for private investors in various countries around the globe.

You can download the full guide for free at http://www.dgc-ai.com

Forget March Madness, Pity the Poor(?) NFL Players

When the NFL Players Union decertified on March 11, paving the way for NFL owners to impose a lockout on the players, it effectively ended collective bargaining for the players. The players no longer have a union, but a trade association, according to the NFL. What risks does this pose to players, many of whom are high-profile celebrities, with brands and reputations to protect?

Senior CFP Linda Robertson, of Financial Finesse in El Segundo, Calif., works with the NFL Players Association (NFLPA) on financial education for the Players Association, as “part of their benefits package.”

For one thing, Robertson says, “once owners decided to go with a lockout, owners suspended payments to group insurers. Players have coverage through COBRA, but they have to bear the whole cost.”

For serious players of such a physical sport, is that a very high cost? Robertson points out that the players are “healthy, physically fit, and younger overall than many insured groups, so we needn’t worry on that account. The same goes for other group coverage—dental, life, disability insurance—players can pick up the cost themselves—to keep it going.”

Will players get paid while they’re locked out? Their pay is “consolidated” into the season; players don’t get paychecks after the Super Bowl, so the lockout won’t affect them in that way unless the strike lasts into summer training camps, according to Robertson. But if the strike lasts longer, they would not be paid until the lockout is over.

Financial Finesse is mostly in the education business for retirement plan participants. It also has been providing education to the NFLPA.

So how are they educating NFL players now that the lockout has occurred, and once the lockout ends (hopefully for pro football fans)?

Encouraging Players to Save

Robertson explains that Financial Finesse has been helping players, through the NFLPA, prepare for this lockout possibility for two years. They can use the “online financial education tools” from Financial Finesse. With the NFLPA, Robertson has

stressed that players “set aside at least 25% of their income, and keep it liquid,” she explains. In normal years, they “encourage players to save 10%” of their income.

Helping Players With Mortgage Assistance

The NFLPA is “offering a mortgage assistance program” to players, which would make the monthly mortgage payments for players if the lockout lasts for more than a certain period of time. Robertson says it is fairly common for mortgage companies to offer this kind of insurance program to regular homeowners. It kicks in when the owner is “disabled or unemployed.”

Helping Players Avoid Rookie Mistakes

Professional football players may make a high income but it’s for a limited period of time. When rookies are “suddenly earning six figures, they can get pressure from friends and family members for help.” Players are “guided to take care of themselves first instead of helping family members start a business or buy a home.” And if they want to help out family members, they are guided to put together a business plan with that family member.

Since football careers are short, players are encouraged to save and to “make the money last after” they are finished playing. They are also coached to think about their next career as part of the guidance they get on the “transition to retirement from playing,” Robertson notes. There are, she says, a surprising number of players who want to do financial planning as their next career.

NFL Union Reps as Mentors to Rookies

While Financial Finesse works with the NFLPA, helping the pros with financial education from rookie to the transition to retirement from football, they don’t do “reputation consulting.” But “it’s important,” Robertson says, “especially for rookies—how they play on the field and off the field. Much of this is done through mentoring,” she adds. The “players’ rep goes to conferences and brings back information, mentoring the other players.”

See a recent interview with Financial Finesse CEO Liv Davidson on some key findings for advisors.

Top Stocks For 2012-2-11-1

Crown Equity Holdings Inc., (CRWE)

There are many Advantages of Internet Marketing,
1) Low cost:
The internet is made up of electrons, so there is not really anything physically to grab hold of like in a brick and mortar business. This considerably reduces your costs as you don’t really need many materials or buildings. Just a computer with World Wide Web capabilities.

2) Very fast:
A great advertisement said “If you were an electron, you would be there by now”. It’s referring to the internet. It’s made up of electrons so it’s VERY fast. Click a link, and you could be looking at an Australian website, click another one and you could be in America. If you wanted to get information any other way from these countries, you may end up having to go there. The World Wide Web eliminates the need for this. Go anywhere you want with the click of a button.

3) You can reach a global audience:
You don’t have to set up shop somewhere and sell to the locals. You can set up an online shop, and sell to anyone in the world. This means a huge increase in potential revenues and a fraction of the cost it would take for you to set up shops all over the world.

Crown Equity Holdings Inc’s selection of Core Link reflects recent diversification beyond CRWE’s original charter as a provider of services and knowledge to small business owners taking their own companies public. In addition to these services, Crown Equity Holdings Inc has transitioned into a multifaceted media organization that publishes clients’ news online; sells advertising adjacent with its digital network targeted at a high-income audience; designs, hosts and maintains websites; produces marketing videos from concept to final product; crafts press releases and articles for maximum SEO; develops email campaigns; and forges branding campaigns to bolster client company images.
Crown Equity Holdings Incorporated - CRWE - reported that it has entered into a 50/50 joint venture agreement to deploy VoIP (Voice over Internet Protocol) technology delivering voice, video and data services to residential and commercial customers.

The joint venture company is Crown Tele Services Incorporated, which looks forward to building an outstanding team to develop and deliver voice and video over IP services globally.

According to IBISWorld Industry Reports, Digital voice will be the fastest growing U.S. industry in the next five years. Voice over Internet Protocol leads the list of the ten most dynamic industries with revenue in 2010 of nearly $12.5 billion dollars, growth 2000 - 2010 of 194% and forecast growth 2010 - 2016 of 17.6%

VoIP industry is fast augmenting and hence it may assure a definite hike in the revenue generation to any organization that step into this field.
For more information about Crown Tele Services Incorporated, visit crownteleservices.com

Crown Equity Holdings Inc., together with its digital network, currently provides electronic media services specializing in online publishing, which brings together targeted audiences and advertisers. Crown Equity Holdings Inc. offers internet media-driven advertising services, which covers and connects a range of marketing specialties, as well as search engine optimization for clients interested in online media awareness.

For more information, visit http://www.crownequityholdings.com

Swisher Hygiene Inc. (Nasdaq:SWSH) announced the appointment of Thomas LaMartina as its new Senior Vice President — Operations. He will be responsible for overseeing Swisher Hygiene’s national footprint and specifically its new regional operating structure.

Swisher Hygiene Inc. provides hygiene and sanitation solutions in North America and internationally.

China XD Plastics Company Ltd. (Nasdaq:CXDC) announced its financial results for the second quarter ended June 30, 2011. Second Quarter Fiscal 2011 Highlights: Revenue was a record $88.2 million, an increase of 42.2% from the second quarter of fiscal 2010. Gross profit was $22.0 million, an increase of 48.9% from the second quarter of fiscal 2010. Gross profit margin was 25.0%, compared to 23.9% in the second quarter of fiscal 2010. Net income attributable to common shareholders was $14.4 million, compared to a loss of $3.1 million in the second quarter of fiscal 2010.

China XD Plastics Company Limited, through its subsidiary, Harbin Xinda Macromolecule Material Co., Ltd., engages in the development, manufacture, and distribution of modified plastics primarily for automobile applications in China.

Echo Therapeutics, Inc. (Nasdaq:ECTE) announced the unveiling of a much anticipated demonstration video on the Company’s website at www.echotx.com. The new video showcases the features and ease of use of the Symphony continuous glucose monitoring system in a home setting. The Company has released this demonstration video as a result of increasing demands from patients and investors for information regarding how the Symphony tCGM System works.

Echo Therapeutics, Inc., a medical device and specialty pharmaceutical company, engages in developing a non-invasive, wireless, and transdermal continuous glucose monitoring (tCGM) system for use in clinical settings and for people with diabetes.

The Bakken Oil Field: Have The Edges Been Found?

In 2010, Whiting Oil and Gas (WLL) drilled exploratory wells in the area of Belfield, ND, just west of Dickinson. These wells were considered "wildcats" or wells drilled a distance away from known horizontal oil production. The sentiment in the industry was that if these wells were economic producers, thousands upon thousands of acres would open up to oil production south of the current exploration area and the game would be significantly changed. Although The Bakken formation was not the target formation in these tests, the Three Forks formation proved to be economically viable. (When people reference the Bakken Oil Field the Three Forks Formation is usually implied). Fast forward to today and there are 6 active drilling rigs in Stark County, ND, with no signs of slowing down.

Soon after thousands of additional acres were opened up, another company, Chesapeake (CHK), decided to come into the play and drill a little farther out from the known production. Chesapeake, which usually is a front runner in shale plays but came to the Bakken very late in the game, decided to try for economic Three Forks production South of Dickinson. Unfortunately, early reports are that most of these wildcats were not successful and have been plugged. There have even been reports that Chesapeake sent letters to mineral owners in the area saying they did not intend to honor their leases.

On the Southern end, it appears the edges of economic production from the Bakken and Three Forks formations have been found. This is not to say that new technology will not be able to exploit oil from this area in the future or that there are no other formations able to produce horizontal oil. For instance, the Tyler formation's horizontal potential is only starting to be developed in this same area.

On the Northern end of the Bakken region, we know they are producing economic Bakken wells up to and well past the Canadian border.

On the Eastern end, the jury is still out. Other formations, such as the Spearfish formation North of Minot, have been hit and miss with economically producing wells.

The western border of the field, however, seems to be the grayest. The Bakken formation, which lies inside the Williston Basin, extends part way into Eastern Montana. The adjacent basin to the west, the Alberta Basin, has a formation with characteristics similar to the Williston Basin Bakken Formation and has been dubbed the "Alberta Bakken" by many. Operators such as Anschutz Exploration, Newfield Exploration (NFX), and Primary Petroleum (PETEF) have been exploring this formation in Glacier County Montana. Most of these wells are still in confidential status but some have been rumored to be economic producers while others are said to have been plugged.

The economic Williston Basin Bakken formation seems to have fairly clear defined edges while the underlying Three Forks formation is slowly being defined as well. Although these prolific formations are being more defined, there are a host of other formations with increased oil potential in ND. With 208+ rigs running in Western North Dakota and Eastern Montana, "unconventional" wisdom would say E&P's will exploit all the formations they can within their lease holdings due to the advancing drilling efficiencies and reliable infrastructure (pipelines, rail, service companies) that is slowly but surely being built to assist with resource development. That being said, the resource potential of the current operators could be severely understated. The largest leaseholders in Western North Dakota are Conoco Phillips (COP), Continenial Resources (CLR), EOG, Whiting Oil and Gas and Hess (HES).

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Is GM Trading Revenue for Profits?

Jump-starting slow or stagnant sales by offering new car buyers everything under the sun is a tried-and-true method of auto manufacturers the world over. But General Motors (NYSE: GM  ) has pulled out all the stops to get the revenue ball rolling, offering new car buyers between now and Sept. 4 a 60-day, no-questions-asked full refund guarantee. Though not unheard of (in fact, GM did it in 2009), giving customers the option to return their cars and get their money back is an aggressive marketing ploy if ever there was one.

The ups and downs of incentives
Generating revenue in a difficult economic environment is always a challenge. Selling cyclical, big-ticket items when times are tough puts even the best marketing departments to the test. But despite all that, car companies continue to provide shareholders with impressive sales results. And incentives are -- at least in part -- being used to maintain that top-line growth.

In addition to GM's money-back guarantee, customers can also take advantage of the same price cuts GM vendors are offered. And the company is bringing back its no-haggle pricing for a couple of its Chevy cars to get them off showroom floors before new models roll in.

It doesn't take an advanced degree in marketing to see all these incentives should boost sales. The question is the impact these will have on already-thin margins. Driving revenue growth is all well and good, but doing so at the expense of the bottom line is a risky proposition, to say the least.

GM will boost sales, but what about margins?
GM, like most auto manufacturers, has enjoyed a nice increase in sales recently. The 4.76 million cars and trucks sold around the world in 2011 broke long-standing company records. GM followed that up with a record-breaking Q1 with 1.8 million units sold -- that's heady stuff. But here's the rub: First-quarter revenue was only marginally better than Q1 of 2011, and the cost of that revenue jumped more than $1 billion compared to last year.

And all that sales growth? It doesn't stack up to other car companies. The U.S. auto industry as a whole has grown 15% this year, compared to GM's 6.3% for its Chevy line, and only 4.3% in total. Of course, GM's market share was hurt as the Japanese automakers returned to nearly full strength, but increasing sales for GM is still a must, no doubt about it.

When margins are as squeezed as GM's, clearly top-line growth isn't falling to the bottom line. And the margin pressure could become even more troubling when those incentives kick in. The operating margin of 2.59% that GM generated doesn't compare to competitors like Ford's (NYSE: F  ) 5.82% in the same period.

Toyota's (NYSE: TM  ) 4.18% operating margin and Honda's (NYSE: HMC  ) 4.66% are both significantly better than GM's as well. Once these historically well-run companies get a few more quarters behind them, those margins should improve even further, though they are still vulnerable to the strength of the yen.

Going forward
After a decade of stellar sales results in China, GM will feel the sting as Chinese economic growth slows, but the good news is the Russian market is picking up some of the slack.

The first half of 2012 saw a "mere" 136,400 vehicles sold in Russia, certainly nothing close to the 1.4 million sold in China. But that was was a 21% jump over last year, and that's a trend that will continue. As Tim Lee, the head of international operations, put it: "I would put Russia in the same breath as China."

Along with the Middle East, South Korea, and Australia, GM's International Operations unit (everything outside of North America except Europe and South America) accounted for a full 40% of this year's overall sales. Not bad. And the launch of the Chevy Cruze in India will boost global sales further -- just don't expect much with the current economic conditions.

GM has done a lot right lately, and it has the sales results to prove it. Management also recognizes the growth in sales hasn't kept pace with others in the industry, and they've jacked up the incentives to help change that. But keep an eye on those margins if you're considering investing in GM, because higher revenue doesn't always amount to increased profits.

Ford looks like it's learned that lesson. Instead of raising incentives as the Japanese automakers return to full strength, the Blue Oval says that it's comfortable with losing some U.S. market share in 2012 in order to maximize profits. That's probably good news for the company, but it's still struggling with growing losses in Europe. That's one of the main reasons that its stock has slipped below $10 a share. But Ford remains a well-performing company that's making excellent vehicles. Does this dip create a tremendous buying opportunity for Ford, or are there other hidden risks you should be aware of? To answer that, one of our top equity analysts has compiled a premium research report with in-depth analysis on�whether Ford is a buy�right now, and why. Simply�click here�to get�instant access�to this premium report.

Inflation Premiums Break Higher

Yesterday the US 30yr break-even (the difference between the nominal yield on a conventional bond and the real yield on an inflation-indexed bond of the same maturity) moved to a multi-week high, this suggests that the crowd is again becoming concerned about inflation. Ok, the absolute level of the breakeven is not so important rather, it is the general direction of the breakeven. From our perspective the general direction of the breakeven is up.

US 30yr Breakeven (short term)

click to enlarge

Sometimes it helps to look at things from a very long term perspective. Note how the US 30yr breakeven is more or less at a multi-month high. The market is clearly telling us that inflation is on the rise even if the official inflation rate stats are “benign”.

US 30yr Breakeven (long term)

So what four trades, in different markets, would best position a trader for a pick-up in inflation? Try these four ideas, long the AUDJPY, DBC, TBT, XLB.

Disclosure: Long FXA, DBC, TBT, XLB, XLE

3 Reasons to Buy Corning

The following video is part of our "Motley Fool Conversations" series, in which technology editor/analyst Brenton Flynn discusses topics around the investing world.

In today's edition, Brenton discusses the bull case for glass maker Corning. Companies with a history dating to the pre-Civil War era typically aren't�participating in the revolutionary trends defining a century, but that's just where Corning finds itself today. The company's innovative glass products have found their way into numerous mobile devices, and after factoring in a rock-solid balance sheet, solid dividend yield, and dirt-cheap valuation, investors have multiple reasons to be interested.

Looking for the technology trend set to define the next decade? We're creating 60% more data every year. That's an astounding growth rate that presents opportunity for investors who can find the leaders in not only storing the data but also finding new, innovative ways of analyzing it. To take advantage of this gigantic technology opportunity, The Motley Fool has compiled a new report called "The Only Stock You Need to Profit From the NEW Technology Revolution." The report highlights a company that has gained more than 200% since it was first recommended by Fool analysts but still has plenty of room left to run. Thousands have requested access to this special free report, and now you can get it today at no cost. To get instant access to the name of this company transforming the IT industry,�click here -- it's free.

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5-Star Stocks Poised to Pop: OmniVision

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, semiconductor image-sensor device specialist OmniVision Technologies (Nasdaq: OVTI  ) has earned a coveted five-star ranking.

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

OmniVision facts

Headquarters (Founded)	Santa Clara, Calif. (1995)
Market Cap	$714 million
Industry	Semiconductors
Trailing-12-Month Revenue	$1.02 billion
Management	Co-Founder/Chairman/CEO Shaw Hong CFO Anson Chan
Return on Equity (Average, Past 3 Years)	7%
Cash/Debt	$465 million / $49.8 million

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

On CAPS, 95% of the 880 members who have rated OmniVision believe the stock will outperform the S&P 500 going forward.

This past fall, one of those Fools, Jeffrey2012, nicely summed up the OmniVision opportunity:

It's trading below book value and is incredibly cash rich. Not to mention generating tons of cash. However, the only thing I do not like about this company is the way they keep diluting the shareholders with increasing share sales. But since almost their entire market cap is in cash ... [it] doesn't make me worried about this company going out anytime soon. Their business hiccups with the iphone 4s does not mean they won't have anymore business. ... [A] position here is almost without risk since it's buffered by so much cash.

But before you run out and start gobbling up shares, consider that some of OmniVision's peers might actually be better suited to your own individual investing profile.

STMicroelectronics (NYSE: STM  ) , for example, has a higher expected five-year growth rate than OmniVision, so it might be better for growth-seekers looking for a bit more punch to their portfolio. Meanwhile, Avago Technologies (Nasdaq: AVGO  ) boasts much higher operating margins, making it a good choice for investors who want "quality." And Micron Technology's (Nasdaq: MU  ) much larger size might make it more suitable for conservative types. However, when you consider that OmniVision sports a paltry PEG of 0.6, the stock seems like a good choice for small-cap investors looking for growth on the cheap.

What do you think about OmniVision, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!

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

Top Stocks For 2012-2-11-12

Crown Equity Holdings, Inc. (CRWE)

Crown Equity Holdings Inc’s selection of Core Link reflects recent diversification beyond CRWE’s original charter as a provider of services and knowledge to small business owners taking their own companies public. In addition to these services, Crown Equity Holdings Inc has transitioned into a multifaceted media organization that publishes clients’ news online; sells advertising adjacent with its digital network targeted at a high-income audience; designs, hosts and maintains websites; produces marketing videos from concept to final product; crafts press releases and articles for maximum SEO; develops email campaigns; and forges branding campaigns to bolster client company images.

Crown Equity Holdings, Inc. together with its digital network, currently provides electronic media services specializing in online publishing, which brings together targeted audiences and advertisers. Crown Equity Holdings Inc. offers internet media-driven advertising services, which covers and connects a range of marketing specialties, as well as search engine optimization for clients interested in online media awareness.

VoIP can turn a standard Internet connection into a way to place free phone calls. The practical upshot of this is that by using some of the free VoIP software that is available to make Internet phone calls, you’re bypassing the phone company (and its charges) entirely. VoIP is a revolutionary technology that has the potential to completely rework the world’s phone systems.

Crown Equity Holdings Inc. (CRWE) is pleased to announce that it has entered into a joint venture to deploy VoIP (Voice over Internet Protocol) technology delivering voice, video and data services to residential and commercial customers. The joint venture company is Crown Tele Services Inc. which was a wholly-owned subsidiary of Crown Equity Holdings Inc.

Commenting on the joint venture, Kenneth Bosket, President of Crown Equity Holdings Inc., said: “We are excited to deliver VoIP communications solutions specifically designed to meet the business and residential market needs with Mr. Kumar who has extensive experience in this fast-growing global market.”

For more information please visit official website of CRWE: http://www.crownequityholdings.com

Antares Pharma Inc. (AMEX:AIS) reported financial and operating results for the second quarter ended June 30, 2011. Quarter and Recent Highlights: Increased both product revenue and total revenue quarter over quarter and year over year. Announced positive results from a VIBEX� MTX clinical pharmacokinetic trial in patients with rheumatoid arthritis (RA) and remain on track for a New Drug Application (NDA) filing in 2012. An additional patent application has been filed based on the data obtained from the study results.Announced an exclusive licensing agreement with Watson Pharmaceuticals, Inc. for the commercialization of Anturol� gel, for treatment of patients with overactive bladder (OAB), currently under review by the Food and Drug Administration (FDA).Ended the quarter with $33.3 million in cash.

Antares Pharma, Inc., a pharmaceutical company, focuses on self-injection pharmaceutical products and technologies, and topical gel-based products.

Voyager Oil & Gas, Inc. (AMEX:VOG) announced record oil and gas production, revenue and adjusted EBITDA for the second quarter ended June 30, 2011. During the quarter ended June 30, 2011, Voyager reported revenues of $1,666,535. This represents an increase of 101% from $832,621 in the first quarter ending March 31, 2011 and an increase of 925% from $162,548 in the quarter ended June 30, 2010. This increase in revenue is due primarily to production from 24 gross (1.13 net) producing Bakken and Three Forks wells as of June 30, 2011.

Voyager Oil & Gas, Inc. engages in the exploration and production of oil and gas in the United States.

Inovio Pharmaceuticals, Inc. (AMEX:INO) reported financial results for the quarter ended June 30, 2011. Total revenue was $2.4 million and $5.5 million for the three and six months ended June 30, 2011, compared to $1.1 million and $2.5 million for the same periods in 2010. Total operating expenses for the three and six months ended June 30, 2011, were $7.6 million and $15.0 million as compared to $6.1 million and $11.9 million for the same periods in 2010.

Inovio Pharmaceuticals, Inc., through its subsidiaries, engages in the discovery, development, and delivery of DNA vaccines with a focus on cancers and infectious diseases.

Stocks Catch Euro Flu Again

Major U.S. stock indices tumbled for the second straight session on burgeoning fears about the U.S.' ability to reach a debt-reduction deal on time and eurozone debt contagion risks.

The Dow Jones Industrial Average fell 135 points, or 1.1%, to close at 11,771 after trading down two of the last three sessions. The S&P 500 dropped 21 points, or 1.7%, at 1216 and the Nasdaq shed 52 points, or 2%, at 2588.

"Once the 1225 level of the S&P 500 was broken, that triggered stops and caused more aggressive bears to start pressing," said James "Rev Shark" DePorre, founder and CEO of Shark Asset Management, and a contributor to TheStreet.Unpredictability from European headlines made it difficult for stocks to hold gains. Thursday afternoon, more than 3 billion shares had changed hands on the New York Stock Exchange and more than 1.6 billion shares had changed hands on the Nasdaq. In the previous session, the Dow slid 1.6%, with most of the losses coming in the final hour of trading on news that Fitch Ratings predicted a worsening outlook on the credit of U.S. banks.U.S. financial stocks Jefferies(JEF),Goldman Sachs(GS),JPMorgan Chase(JPM),Morgan Stanley(MS) andCitigroup(C) fell by between 2% and over 3.6%.The U.S. debt reduction super committee's deadlock remains a concern for Washington observers. The 12-member bipartisan congressional committee has until Nov. 23 to arrive at tax hikes and spending reductions of between $1.2 trillion to $1.5 trillion over a decade. If a deal isn't reached, it is expected that $1.2 trillion in cuts will be split evenly between domestic spending and defense. Fears that Spain is getting sucked into Europe's debt debacle deepened Wednesday after the country paid the highest interest rates on its 10-year benchmark in a government bond auction since 1997. Yields on the Spanish 10-year bond had been at 6.49%.France, the eurozone's second-largest economy, had an easier time with its debt auction today, but still had to pay a markedly higher price. Meanwhile, Italy's borrowing costs soared to unsustainable levels, with yields on its 10-year bonds still dangerously close to 7%."When you see U.S. market futures rising overnight, right into the Spanish bond auction results at 4:30 a.m. EST, and then see those futures taking a huge dive when the auction's awful, with extremely high rates -- much higher than a month ago -- you know the buyers of those futures at 4:29 a.m. were idiots," said RealMoney columnist and Action Alerts PLUS portfolio manager Jim Cramer.Despite worries that the contagion has picked up pace, Germany remains steadfast that the European Central Bank cannot act as a lender of last resort. At the same time, eurozone officials and the International Monetary Fund have explored the possibility of letting the ECB lend to the IMF, according to Reuters. Furthermore, France has also shown signs of allowing the central bank to expand its role. French finance minister Francois Baroin suggested late yesterday that Europe give the ECB a bank license, thereby allowing the ECB to provide further funding for struggling nations. "We consider that the best way to avoid contagion is to have a solid firewall" said Baroin. "We haven't won the argument. We won't make it a casus belli, but naturally we continue to think it would be the best way to bring stability to Europe." U.S. economic data, which has buffered market sentiment in past trading sessions, continued to help offset concerns about Europe. The latest read on weekly jobless claims in the week ended Nov. 12 dropped by 5,000 to 388,000, marking a seven-month low. The reading was better than economists had expected, although the prior week's claims were upwardly revised.A 0.3% decline in housing starts in October to an annual rate of 628,000 suggested that the housing market is stabilizing and may become less of a drag on the economy. Starts were expected to have fallen to an annualized pace of 610,000 in October from the originally estimated pace of 658,000 in the prior month. September's figure was downwardly revised to 630,000. Meanwhile, building permits in October increased by 10.9% to the highest level since March 2010."Housing data is firm due to the single family gains in starts and permits, though with permits, the volatile multi-family sector is at least an eyebrow raiser," wrote David Ader, a strategist with CRT Capital Group, in a research note. However, Ader noted that the reports were consistent with other recent data. "We have a fourth quarter theme of firming," he added.Stocks saw a short-lived bounce at 10 a.m. ET after promising details in a report on business outlook for the Philadelphia region. Employment and the six-month outlook improved even though the index's headline figure slipped more than economists expected. The overall business outlook came in at a reading of 3.6 in November, down from 8.7 in October and lower than the forecasted 8.0 reading. Oil slipped Thursday after prices broke above $100 a barrel Wednesday for the first time since early June. The January crude oil contract tumbled $3.67 to end at $98.93 a barrel. In other commodities, gold for December delivery fell $54.10 to finish at $1,720.20 an ounce. As with stocks, commodities volumes have been muted. Traders attribute the recent drop in contracts for crude, oil, gold and wheat futures to the collapse of clearing firm MF Global Holdings, which worked with exchanges to ensure smooth trading operations.

London's FTSE lost 1.56% and Germany's DAX slipped 1.07% at the European markets' close. Overnight, Asian stocks closed mixed, with Japan's Nikkei Average edging up 0.19% and Hong Kong's Hang Seng down 0.76%.

In corporate news, Applied Materials(AMAT) fell 7.5% after the maker of semiconductor equipment reported a 3% drop in fiscal fourth-quarter earnings of $456 million, or 34 cents a share. Adjusted earnings were 21 cents a share. Analysts were expecting profit of 19 cents. The company also said current-quarter results would come in below analysts' expectations.

UBS(UBS) was down 2.6% after saying it will downsize several businesses, slash up to 2,000 jobs and step up its focus on wealth management as part of a major overhaul of its investment banking strategy. The Swiss bank said in an investor presentation that it will attempt to transform itself into an organization that is focused, less complex and less capital-intensive.Google(GOOG) fell 1.7% after launching an online music service to compete with Apple(AAPL), Amazon(AMZN) and Facebook in the music and entertainment space. Google Music allows users to upload up to 20,000 songs from their personal music collection for free to any device, including their computer, Android phone or tablet.NetApp(NTAP) dropped 12.3% after missing Wall Street's second-quarter revenue expectations and noting softness in some of its largest customer accounts. Despite, beating profit estimates, the storage provider offered weak guidance for the third quarter.Sears(SHLD) tumbled 4.6% after its adjusted third-quarter loss of $2.57 a share came in wider than analysts' expectations and the year-earlier loss of $1.71 a share. Analysts forecasted a loss of $2.29 a share. The reported loss for the quarter was $421 million, or $3.95 a share, up from $215 million, or $1.98, a year earlier.Williams-Sonoma(WSM) was down 1.7% even after its third-quarter net income rose 19%. The home products retailer also raised the estimate for fiscal 2012 earnings.The euro traded sideways while the dollar ticked down 0.1% compared with a basket of currencies. In the bond market, yields on 10-year Treasuries fell nearly 2%..

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Top Stocks For 4/23/2012-20

Dr Stock Pick HOT News & Alerts!

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FREE Daily Stock Alerts From DrStockPick.com

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Friday November 20, 2009

DrStockPick.com Stock Report!

HZHI, Horizon Health International Corp., HZHI.PK

HZHI through its US and Canadian Subsidiaries is servicing all of North America through its E-Commerce System, providing services as a ‘Home, Office and Workplace Medical Equipment Specialist’ offering a complete end-to-end shopping experience for aids for daily living, disability products, ergonomic solutions and leading-edge assistive technology through online retail stores across North America.

BCC Research reported that: “The US market for assistive technology is expected to be worth $ 38.2 billion in 2008, up from 36.4 billion in 2007. This should increase to 49.3 billion in 2013, a compound annual growth rate (CAGR) of 5.3%”

Recently, HZHI reported the successful launch of their e-commerce website www.medichair-calgary.com.

In May of 2009 Samson Industries, HZHI’s Canadian Subsidiary, entered into a Licensing Agreement with MEDIchair Calgary, Canada. Under the terms of the licensing agreement, MEDIchair Calgary will pay to HZHI’s wholly owned subsidiary, a monthly license fee of $250 plus 50% of the profit realized from on-line sales generated by MEDIchair through the website which is owned and operated by Samson Industries.

The Agreement allows MEDIchair-Calgary (with estimated annual sales of $ 5 million plus) to license HZHI’s website (www.medichair-calgary.com) and call-centre for live customer service and order processing. MEDIchair Calgary is just one of 70 franchisees of MediChair Corporate) a division of Lifemark Health. HZHI will be entering into discussions with all the franchisees to license its website. Such a network will provide HZHI with an economic access to a greater customer base and demographic, an estimated market well over $100 Mio.

Furthermore, In line with its expansion and growth program, HZHI has, as an initial launch through SunCity Ventures; (HZHI’s US Subsidiary) registered with eBay US as a Vendor-Company under the name ‘Horizon Health’, and will post and sell its products on eBay through their online shopping network.

Horizon Health International Corp.-New Websites

HZHI through its US and Canadian Subsidiaries is at present servicing all of North America through its E-Commerce System, as a �Home, Office and Workplace Medical Equipment Specialist� offering a complete end-to-end shopping experience for aids for daily living, disability products, ergonomic solutions and leading-edge assistive technology through online retail stores across North America.

HZHI has commenced the development of two new websites to speed up the process of orders. In its ongoing efforts to streamline online transactions HZHI has registered and commenced the development of two �Subsidiary Websites�.

All customers will go to the �Corporate Website� of HZHI: www.horizonhealthandsafety.com

Within the �Corporate Website� the customer chooses the appropriate �Subsidiary Website�:

www.horizonhealthandsafety-canada for all transactions within Canada

www.horizonhealthandsafety-us for all transactions within the US

the sites will be completed and will be operational within 14 days. (any other formerly announced website will no longer be in use)

HZHI is currently reviewing further opportunities to take on the Canadian Distributorship of Health Related Products of great benefit.

Take a look at HZHI’s 1 month chart:

Contacts:
Horizon Health International Corp.
Delbert G. Blewett
Pres.
604-998-3385
horizonhealth@shaw.ca
www.horizonhealthandsafety.com

Add HZHI to your Watch List!, do your homework, and like always BE READY for the ACTION!

Simple Or Compounding Interest – What Makes More Money?

Albert Einstein called compound interest the “Eighth Wonder of the World”. So exactly what is compound interest, how does it work…and what is simple interest? The question then becomes: What makes more money?

Compound interest is where interest paid on an investment is added to your original sum then interest is again calculated on the full amount. Interest is added once again to the total, each time increasing the sum. Thus $1,000 at 5% becomes $1,050 after the first year, in the second year interest of $52.50 is again added becoming $1,102.50 and so on – unlike simple interest where the same amount of interest is paid on the amount each year.

To best explain let’s look at an example (please note for simplicity inflation is not included and the return is tax paid).

Brad and Simon are each given $10,000 by their grandfather. Brad puts his money away in an investment earning 5% while he travels around the world on his OE (overseas experience). Simon decides the interest would be a good source of pocket-money and draws the interest as it is paid. He thinks he’s doing very well because he managed to get a rate of 5.5% which means he’s getting $550 every year.

As Brad is not using the return on the funds his investment is experiencing compound interest. Simon on the other hand is drawing the income from his investment and therefore his experience is of simple interest.

Brad returns after ten years away. His $10,000 has now grown to $16,288.95 (interest $6,288.95). Although Simon was able to get an extra 0.5% he has only received $5,500 in interest and he’s used the money so all he has now is $10,000.

While Simon has achieved a lesser return overall he has had the use of the money but as he’d considered it to be pocket-money he’s unlikely to have put those funds to good use over the ten years. Brad has certainly been wiser with his money and made more.

But beware…just as you can make more money using compound interest so can the bank or credit card company. Yes, that’s right compound interest works just the same on debt. While it makes more money for the bank you end up paying more on your debt.

Except in the first year, where payments are equal (if the frequency of compounding is annual and the interest rate is the same)compound interest is always greater than simple interest. Therefore compound interest makes more money.

Lyn Bell has been in the finance industry for more than 30 years and is a Certified Financial Planner. She has helped many clients achieve their financial goals. Sign up to get Lyn’s free newsletter SoundFinance News and receive a free gift.

Please note this article does not contain specific advice and is for information/education purposes.

A disclosure statement is available free on request.

Time To Consider The Palladium ETF?

Like other precious metals, palladium has been weakening, but palladium spot prices and the related exchange traded fund could turn around as the fundamentals move in their favor.

The supply and demand fundamentals point to a bullish palladium market, with a widening supply deficit starting and rising industrial demand, reports Rosalyn Retkwa for Institutional Investor.

So far this year, hedge funds have been shorting palladium due to the "risk on" environment and its industrial applications. Wiktor Bielski, global head of commodities research at VTB Capital, pointed out that industrial metals are trading like risk assets.

"I have to say that anybody playing the short side has done very well," Bielski said in the article. However, "you can't fight the fundamentals forever. The risk/reward is clearly skewed more to the upside."

Russia stated that this will be the last year it will be exporting palladium from its Cold War stockpiles - Russia has been the second-largest producer of palladium, behind South Africa, accounting for over 46% of global annual production.

Johnson Matthey, a London-based precious metals refiner, calculates that Russia will export 250,000 ounces of palladium this year, down from 750,000 ounces in 2011. Additionally, Norilsk Nickel's guidance projected 2.6 million to 2.65 million ounces of palladium mined this year, compared to 2.81 million ounces in 2011.

ETF Securities analyst Simona Gambarini also noted that production shutdowns and labor strikes in South Africa contributed to the 30% drop in PGM mine production for the first four months of this year compared to 2011.

Bielski estimates that global palladium supplies will fall short of demand by 500,000 to 600,000 ounces this year and by 800,000 next year, in a total market of 7.5 million ounces.

Palladium futures are currently trading around $570 per ounce, compared to the $827 price in the same month last year. The ETFS Physical Palladium Shares (PALL) is down 13.8% year-to-date.

Max Chen contributed to this article.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Bank Stocks Could Benefit From Durbin Amendment Delay

Next week, Senate Majority Leader Harry Reid will allow a vote on a bill to delay for 15-months the Durbin amendment’s price-fixing of debit card fees. The bill will be considered as an amendment to the Economic Development Administration reauthorization. The House hasn't yet passed its own EDA bill, but may fast track its version should the bill get the required 60 Senate votes for cloture.

Durbin caps fees that banks may charge on debit card transactions. As in all price-fixing schemes, it creates a windfall subsidy, in this case paid to merchants. It assumes that banks will pay the tab. But at levels written into recent rules, banks can't cover their costs, let alone make a profit. The fly in the ointment is that Durbin will kill the product, too, ultimately a loser for the community banks that lose the revenue, consumers who lose the convenience of a debit card but no longer qualify for credit cards, and merchants who lose sales facilitated by debit cards.

The vote is especially noteworthy in that it will mark Congress' first retreat from its Dodd-Frank overreach, perhaps signaling an end to Congress' prolonged attacks on the health and soundness of our financial institutions.

Are there the votes? Vote counters guarantee about 55-57. Earlier today, at S.C.Bernstein & Co.'s "strategic decisions" conference in NYC, James Rohr, PNC's Chairman and CEO, said that he had spoken to more than 20 senators, and that all "didn't expect the Durbin amendment to be what it is." He expressed "hope" that the delay will find 60 votes.

Expect bank stocks to benefit if the bill passes.

Disclosure: I am long BAC, RF, FITB.

Monday FX Interest Rate Monitor

Bond traders are in no mood to be the last one out of the exit today. Friday’s U.S. employment report provided enough reason to start lightening the safe-haven payload of government debt, while the support from French President Sarkozy for the government of Greece was enough to spark a risk revival in equities, commodities and riskier currencies. Such a move argues against the recent bid to bonds and as such 10-year yields are higher across the board, except for those of Greece and Spain.

Eurodollar futures –Former Fed Chairman Paul Volcker speaking in Germany at the weekend argued that now is not the time to dispense with either fiscal or monetary efforts to spur demand. Nevertheless, a revisit to breakeven for U.S. equities for the year based upon building confidence that there is sufficient momentum to deliver a sustainable economic recovery is helping drag bond yields higher. The 10-year yield rose three basis points to start the week and is sitting at 3.71% as the June note future slipped seven ticks to 116-26. Losses for Eurodollar futures are larger at farther maturities with three tick declines evident from June 2011 outwards.

Canada’s 90-day BA’s – The spread between U.S. and Canadian 10-year bonds is once again widening as yield increases are more evident in American government debt. The Canadian dollar has held firm against its U.S. counterpart as investors warm towards the more fiscally sound properties of the Canadian government’s measures. Nevertheless, bill prices are down harder than Eurodollar futures today possibly because rising commodity prices are a sign that a recovering economy may well deliver harsher monetary measures sooner rather than later. The spread between June and December bills continues to stretch wider as a result with the spread of 84 basis points indicating three quarter point rate increases during the second half of 2010.

European short futures – Euribor futures are a little brighter this morning and it is the back end of the curve where the relief pressures are being felt. With money traders concluding that the fallout over Greece will ensure a slower pace of growth, no one is expecting the ECB to raise rates anytime soon. But June bund prices slid earlier as yields rose to 3.18%. Losses have subsequently been curtailed with the June contract having rebounded from an intraday low of 122.26 to stand at 122.46.

British interest rate futures – All is well in the U.K. today. Stocks are up, the pound is perkier and sterling rate futures indicate that the Bank of England can take a nap for the foreseeable future. Gilt prices fell sharply earlier and the June contract slipped to a low of 113.83 at its worst point of the day. The 10-year yield stands at 4.10% and higher by four basis points on the day. Two weekend polls indicated a widening of the opposition Conservative party’s lead over the government heading in to the summer election.

Australian rate futures –Rising regional equity prices and a jump in commodity prices helped depress interest rate futures. The 10-year Australian government bond yield jumped to reflect losses it missed out on after the U.S. employment report. Yields rose 10 basis points to stand at 5.55%. Meanwhile, ahead of its own labor report later this week, 90-day bills slumped up to 10 basis points.

Japan – Government bond yields rose one basis point taking a cue from declining bond prices around the world. Last week’s Nikkei newspaper reported that the Bank of Japan would this week mull any additional measures it could possibly take to help rescue the ailing economy. March JGBs declined just two ticks to close at 140.17.

Investors Ready for 2012 Bankruptcy Bonanza

Wall Street scavengers looking to pick up bankrupt U.S. companies for pennies on the dollar may begin to see their luck start to turn in 2012.

Risky companies that were able to borrow money from investors in record amounts -- and at record low rates -- over the past several years will be abruptly cut off as the European debt crisis escalates and a pile of risky debts start coming due in 2012.

See if (AMR) is traded within the Action Alerts PLUS portfolio by Cramer and Link

Early in the financial crisis default rates among speculative borrowers spiked to nearly 15% in 2009, and many expected bankruptcies to increase. But defaults fell dramatically in 2010 and 2011 as over a trillion dollars was extended to risky companies. In the first two months of 2011, no sub-investment grade company defaulted -- through November thirty bankruptcies this year are far lower than 2010. However, the recent defaults of MF Global, American Airlines(AMR) and General Maritime, among others signal a potentially developing bankruptcy trend. Previously refinanced bonds, along with a stock of risky buyout debt used in company takeovers are going to begin coming due in 2012, just as investors shows risk fatigue. If the trend continues, defaults will follow.Industries like media, gaming, entertainment and oil services are most vulnerable going into 2012, according to a December report from Standard & Poor's. S&P classified risky industries as having a high proportion of companies rated junk, ratings held with negative outlooks or if company bonds traded 10% above U.S. Treasury benchmarks. Within those industries, S&P ratings director Diane Vazza highlights Boyd Gaming(BYD), Orbitz Worldwide(OWW), The McClatchy Company(MNI), Dex One(DEXO), Rite Aid(RAD), Supervalu(SVU), Quicksilver Resources(KWK) and private equity owned companies such as Clear Channel Communications, Energy Future Holdings, Realogy and Caesars Entertainment as some companies that may face headwinds. Issues for companies vary, however unlike in recent years, high debt loads could become less manageable if fearful investors take cover from the over trillion dollars of risky debt that is coming due starting in 2012.With the help of investment banks issuing bonds to yield hungry bond investors, "companies have kicked the can down the road since 2008. That road is coming to an end," says Jeff Marwil a partner at law firm Proskauer and co-head of its bankruptcy and restructuring practice. Currently, $266 billion of risky high yield bonds and loans are set to come due in 2012, nearly 25% of the overall one trillion plus high yield debt market, according to calculations from Fitch.

The market to refinance that debt may not be as bullish as it was in past years and even in the first half of 2011. "The high yield market bailed out the maturity wall that existed in 2008 and 2009. I don't think it's going to be there in 2012," adds Marwil.

Those problems may not seem so apparent, but that's because accessing credit was easy in past years. After setting a record for high-yield debt issuance in 2010 with $252 billion raised and a strong first half where $146 billion of risky debt was issues, investors are beginning to lose their appetite for risk. Only $22 billion of high-yield bonds were sold in the third quarter, the lowest quarterly total since mid-2010, according to Fitch calculations.

In August, the market slowed because of concerns about a Greek default, the U.S. debt ceiling and low growth, which "had a profound impact on the refinancing cliff," according to Fitch.If the slowdown were to accelerate, it would come at a particularly bad time. Currently, however, the leveraged loan market is in the process of refinancing approximately $1.1 trillion of loans maturing between 2011 and 2015. Nevertheless, Fitch expects that defaults will hover near 2% because it expects the high yield bond markets to be able to refinance or amend all of the $266 billion coming due in 2012. Were debt fears were to escalate, Fitch expects that defaults could rise above historical averages to near 4% by 2013. That rate could accelerate because "limited refinancing capacity will likely be available in 2012 to refinance and/or extend a meaningful portion of loan maturities in 2013 and 2014 in the case of a prolonged slowdown," writes Fitch.In spite of dire predictions and similar fears emerging throughout the recession, bond markets have only recently started to blink. Earlier in the year yields for the Bank of America Merrill Lynch Global High Yield Index touched on record lows of 6.64%, only to rise with escalating bank and government debt fears to two-year highs of 9.6% in October.While ratings agencies Moody's, Standard & Poor's and Fitch expect overall defaults to be between 2% and 4% in 2012, their overall ratings mix may put some at increasing risk and with little room to maneuver going into a potential refinancing glut.

Currently, S&P holds 52% of the near 3,000 corporations it rates at sub-investment grade, its highest level since before 1987. S&P gives over 70% of companies in businesses such as transportation, media and entertainment, forestry and homebuilders, healthcare and chemicals junk ratings.

For stressed companies in those industries, 2012 may be the end of the road for debt laden companies.

With more than a doubling in refinancing needs in 2012 and an even heavier load in later years James Gellert Chief Executive of Rapid Ratings says, "unless the markets bounce back dramatically, there are going to be 'haves' and 'have nots' in terms of those who can access capital."

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Sina Q2 Earnings Recap: Initial Result On Weibo Monetization A Key Positive

Sina (SINA) reported Q2 results yesterday.

Key highlights:

• Net revenue: $131.6 million, +11% y/y and beating consensus of $129.7 million
• Advertising revenue: $103.1 million, +12% y/y
• Non-advertising revenue: $28.5 million, +5% y/y
• Non-GAAP EPS: $0.05 per share, vs. consensus of $0.02 loss per share

What I liked: Revenue and EPS beating consensus, Weibo monetization taking off

Net revenue of $131.6 million easily beat the consensus of $129.7 million, making this the third consecutive quarter of revenue beat. Advertising revenue was especially resilient, growing 12% y/y to $103 million, driven by strong ad spending from FMCG, internet and telecom sectors. In addition, video online advertising also performed well, growing 126% from the same period last year. Finally, EPS of $0.05 per share came in better than the expected $0.02 loss per share.

A positive highlight of the quarter was Weibo monetization, which is gradually becoming a significant revenue driver for Sina. In Q2, Weibo revenue accounted for 10% of Sina's net revenue after the company introduced its social interest graph ad system, which has generated positive feedback from advertisers. Heading into the second half of the year, Sina will continue to enhance its "promoted tweets", which are similar to Facebook's (FB) Sponsored Stories that appear in users' news feeds. Promoted Tweets will be critical to Weibo's growth as 69% of its users access the platform through mobile devices.

Weibo continues to gain user adoption. As of Q2, Weibo has 365 million total registered users. Daily active users grew 22% y/y to account for 10% of the total users, an improvement from 9% last quarter. Positive adoption of the Weibo ad system and a rising user base are laying a good foundation for Weibo revenue contribution to accelerate in the second half of the year.

Finally, Sina finished the quarter with $716 million in cash, or 20% of the company's equity value and an increase from $673 million in the prior quarter.

What concerned me: Soft guidance, No significant Weibo monetization until 2013

Sina guided $145-148 million in revenue for Q3, slightly below the Street consensus of $150 million. Advertising revenue is expected to be between $120-122 million, the midpoint of which represents 20% y/y growth. Non-advertising revenue is expected to be $25-26 million, the midpoint of which represents 4% y/y growth.

While the initial ad result from Weibo is positive, management indicated that Weibo monetization will unlikely to be significant until next year. Recall that Weibo monetization is approximately $13 million this quarter, or $52 million on an annualized basis, which translates $0.14 ARPU. On the other hand, Twitter has 500 million registered users and is expected to achieve $260 million in revenue this year, which translates to $0.52 ARPU. Compared with Twitter, Weibo still has a long way to go in terms of monetization. However, note that this is only the first quarter in which management disclosed Weibo results and the result is still positive, in my view.

For the second half of the year, Sina will continue to focus on building Weibo's ad platform and growing its paying user base. Weibo recently introduced paid membership services and the revenue contribution has been insignificant. However, paid members could be another layer of icing on the cake as they begin to purchase other Weibo products after becoming comfortable with the monthly fee.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Atwood Oceanics Is Drilling for New Rigs

Atwood Oceanics (ATW) has long been a good investment in offshore drilling and even deepwater drilling as well. Its focus on the international waters with limited projects in the Gulf of Mexico helped the company thrive in 2010.

One of the bigger issues with ATW has been the relative old age of their ships. With Monday's announcement of a new ultra-deepwater drillship order, they've completely transformed the company into a focus on newbuilds. The ordering of yet another ship means that a company with 9 current operating offshore drilling rigs now has 6 rigs in various stages of building. Not to mention they retain options on two more ultra-deepwater drillships and two premium jackups.

Prior to this recent surge of four orders that have all happened since the announcement of the retirement of the previous CEO, Atwood had over 50% of it's existing rigs built prior to 1985 making the average rig 25+ years old. Naturally they've had upgrades over the years, but 25-35 year old rigs just don't have the operating capability and functions needed for modern drilling. In fact, ATWs only has two ships built within the last 10 years, so the newbuild program might just be what they need to remain relevant.

While new rigs have huge advantages, one has to wonder if ATW is taking on too much at once. The company has limited debt and had net income of roughly $250M, and a cash flow of $300M last fiscal year, so it appears they can handle by using cash flow and levering up a bit.

Its also concerning whether the market can handle the growing order logs at the larger shipyards.

Dalman Rose & Co recently downgraded ATW, Diamond Offshore (DO), Seadrill (SDRL), and others based on the fear of a glut in deepwater rigs based on a surge in order flows. They see the recent order pace as the fastest in four years and a big issue with demand still held back by the moratorium in the Gulf.

The fear is worth noting, but since it takes nearly 3 years before these orders are built and ready for drilling, it seems very premature to worry about a glut. Especially with oil approaching $100 and the disturbances in Egypt reminding us that while offshore drilling has operational risks, onshore drilling in the Middle East has larger political issues.

The other major issue in the sector remains the age of the existing fleets. While limited information can be found, most drillers maintain very old fleets with numerous rigs over 25 years old similar to ATW. Its very likely that drillers will finally be forced to retire numerous rigs leaving the supply more limited then Dahlman expects.

Airplane leasers are considered strong when fleet ages average less then 10 years and are focused on modern plane designs. The time is likely coming soon when drillers also get that focus. Modern fleets will be much more attractive, and those companies will likely benefit.

Atwood is heading in the correct direction, if they haven't chewed off too many orders. The first of the six newbuilds should be operational in the second quarter. The stock is attempting to break out of the $40 range where it failed 3x at the end of 2009. Follow through could signal much higher stock prices in the short term.

List of ships on order with expected delivery date:

6/1/11 - Atwood Osprey: conventionally moored semisubmersible unit rated for water depths of 6,000 feet with its own mooring equipment and 8,200 feet with pre-laid moorings.

7/1/12 - Atwood Condor: ExD Millennium class ultra-deepwater DP semisubmersible with 10,000 feet of water depth capability and state-of-the-art drilling and completion features.

9/30/12 - Atwood Mako: Pacific Class 400 jack-up drilling unit with PPL Shipyard PTE LTD ("PPL") will have a rated water depth of 400 feet, accommodations for 150 personnel and significant offline handling features.

12/31/12: Atwood Manta: Pacific Class 400 jack-up drilling unit with PPL Shipyard PTE LTD ("PPL") will have a rated water depth of 400 feet, accommodations for 150 personnel and significant offline handling features.

6/30/13: Atwood Orca: Pacific Class 400 jack-up drilling unit with PPL Shipyard PTE LTD ("PPL") will have a rated water depth of 400 feet, accommodations for 150 personnel and significant offline handling features.

9/30/13 - Atwood Advantage: DP-3 dynamically-positioned, dual derrick ultra-deepwater drillship rated to operate in water depths up to 12,000 feet and to drill to a depth of 40,000 feet.

Disclosure: I am long ATW.

1 Reason American Superconductor May Be Headed for a Slowdown

Here at The Motley Fool, I've long cautioned investors to keep a close eye on inventory levels. It's a part of my standard diligence when searching for the market's best stocks. I think a quarterly checkup can help you spot potential problems. For many companies, products that sit on the shelves too long can become big trouble. Stale inventory may be sold for lower prices, hurting profitability. In extreme cases, it may be written off completely and sent to the shredder.

Basic guidelines
In this series, I examine inventory using a simple rule of thumb: Inventory increases ought to roughly parallel revenue increases. If inventory bloats more quickly than sales grow, this might be a sign that expected sales haven't materialized. Is the current inventory situation at American Superconductor (Nasdaq: AMSC  ) out of line? To figure that out, start by comparing the company's inventory growth to sales growth. How is American Superconductor doing by this quick checkup? At first glance, not so great. Trailing-12-month revenue decreased 65.8%, and inventory decreased 56.2%. Over the sequential quarterly period, the trend looks worrisome. Revenue dropped 13.2%, and inventory grew 8.7%.

Advanced inventory
I don't stop my checkup there, because the type of inventory can matter even more than the overall quantity. There's even one type of inventory bulge we sometimes like to see. You can check for it by examining the quarterly filings to evaluate the different kinds of inventory: raw materials, work-in-progress inventory, and finished goods. (Some companies report the first two types as a single category.)

A company ramping up for increased demand may increase raw materials and work-in-progress inventory at a faster rate when it expects robust future growth. As such, we might consider oversized growth in those categories to offer a clue to a brighter future, and a clue that most other investors will miss. We call it "positive inventory divergence."

On the other hand, if we see a big increase in finished goods, that often means product isn't moving as well as expected, and it's time to hunker down with the filings and conference calls to find out why.

What's going on with the inventory at American Superconductor? I chart the details below for both quarterly and 12-month periods.

Source: S&P Capital IQ. Data is current as of latest fully reported quarter. Dollar amounts in millions. FY = fiscal year. TTM = trailing 12 months.

Source: S&P Capital IQ. Data is current as of latest fully reported quarter. Dollar amounts in millions. FQ = fiscal quarter.

Let's dig into the inventory specifics. On a trailing-12-month basis, each segment of inventory decreased. On a sequential-quarter basis, finished goods inventory was the fastest-growing segment, up 132.8%. That can be a warning sign, so investors should check in with American Superconductor's filings to make sure there's a good reason for packing the storeroom for this period. Although American Superconductor shows inventory growth that outpaces revenue growth, the company may also display positive inventory divergence, suggesting that management sees increased demand on the horizon.

Foolish bottom line
When you're doing your research, remember that aggregate numbers such as inventory balances often mask situations that are more complex than they appear. Even the detailed numbers don't give us the final word. When in doubt, listen to the conference call, or contact investor relations. What at first looks like a problem may actually signal a stock that will provide the market's best returns. And what might look hunky-dory at first glance could actually be warning you to cut your losses before the rest of the Street wises up.

I run these quick inventory checks every quarter. To stay on top of inventory and other tell-tale metrics at your favorite companies, add them to your free watchlist, and we'll deliver our latest coverage right to your inbox.

• Add American Superconductor �to My Watchlist.

CEO Gaffe of the Week: Goldman Sachs

This year, I introduced a new weekly series called "CEO Gaffe of the Week." Having come across more than a handful of questionable executive decisions last year, when compiling my list of the Worst CEOs of 2011, I thought it could be a learning experience for all of us if I pointed out apparent gaffes as they occur. Trusting your investments begins with trusting the leadership at the top -- and with leaders like these on your side, sometimes you don't need enemies!

This week I want to highlight the CEO of the Evil Empire -- pardon me, I mean Goldman Sachs (NYSE: GS  ) -- Lloyd Blankfein.

The dunce cap
I guess the week isn't complete unless Goldman Sachs is ticking someone off, but who knew that this time it wouldn't be Congress or its own clients -- but one of its own employees?

In what has turned into a media circus that is, in my guess, just hours away from becoming a Saturday Night Live skit, Greg Smith, Goldman's executive director and head of the company's U.S. equity derivatives business in Europe, the Middle East, and Africa, abruptly and publicly resigned on Wednesday posting his resignation in an op-ed in The New York Times.

While most disgruntled employees would just send a scathing letter to management, which would then toss it in the paper shredder, this letter was rife with deep-rooted accusations that point the finger of blame directly at Blankfein and President Gary Cohn.

The basis of Smith's objections lie in Goldman's move away from what is best for its clients toward a view of how the company could stand to make more money from them. In Smith's own words:

What are three quick ways to become a leader? (a) Execute on the firm's "axes," which is Goldman-speak for persuading your clients to invest in the stocks or other products that we are trying to get rid of because they are not seen as having a lot of potential profit. (b) "Hunt Elephants." In English: get your clients -- some of whom are sophisticated, and some of whom aren't -- to trade whatever will bring the biggest profit to Goldman. Call me old-fashioned, but I don't like selling my clients a product that is wrong for them. (c) Find yourself sitting in a seat where your job is to trade any illiquid, opaque product with a three-letter acronym.

Wow! All we're missing is the pre-duel glove slap across the face.

But are these allegations against Goldman justified? I can't concretely say yes, but I am very inclined to think so.

In 2010, Goldman Sachs was forced to pay $550 million in settlements for compelling its clients to buy toxic assets that it was bundling during the height of the credit crisis while it was simultaneously shorting these products of destruction.

More recently, a Delaware court nearly blocked a merger between Kinder Morgan (NYSE: KMI  ) and El Paso (NYSE: EP  ) because of Goldman's vested interests in both companies. Goldman was acting as an advisor to El Paso but owned a large chunk of Kinder Morgan, and it stood to make a considerable chunk of money regardless of whether the two merged or if El Paso chose to just spin off its exploration business.

To the corner Mr. Blankfein
But wait -- there's more!

While taking a break from operating Mega Maid and sucking the air out of Druidia, Blankfein issued the following statement to shareholders in regard to Smith's resignation:

We disagree with the views expressed, which we don't think reflect the way we run our business. In our view, we will only be successful if our clients are successful. This fundamental truth lies at the heart of how we conduct ourselves.

That's it? Goldman Sachs has been hit with a barrage of damaging accusations over the past few years, and I can tell you firsthand that it's going to take a lot more than a generic "no, we didn't do that" statement to get people to believe that you're putting your clients' needs before the needs of your own wallet.

What's even worse is that Goldman Sachs' bottom-line results haven't been all that impressive, either. The company's consolidated sales have shrunk for seven consecutive quarters, which, maybe or maybe not by coincidence, corresponds to when it received a slap on the wrist for selling those "illiquid, opaque products with three-letter acronyms" to its clients. If Goldman has been operating in a way that involves turning its clients upside-down and shaking the money out of them, it's scary to think just how poorly it'd be doing if it was simply offering sound financial advice that was in its clients' best interests.

The other thing we have to remember is that Goldman Sachs took $10 billion in TARP funds during the height of the credit crisis. Somehow, Goldman seems to have completely forgotten about that humbling era of its history even though it was just four years ago.

But still, Glassdoor.com, a website that allows employees to "rate their CEO," reports that Blankfein has the highest approval rating of all Wall Street companies. Blankfein's 94% approval edges out JPMorgan Chase's (NYSE: JPM  ) CEO Jamie Dimon (86%,) who has completely turned that bank around and reinstated a healthy dividend. Vikram Pandit, the CEO of Citigroup (NYSE: C  ) , who just gave himself a truly epic bonus, remains far down the list with a 59% approval.

Understandably, Glassdoor.com uses an honor policy and assumes no one is creating multiple aliases to skew the ratings. But seriously, what the heck? Here's Blankfein's rating since the credit crisis, according to Glassdoor.com:

Source: Glassdoor.com.

Just for reference here, Goldman Sachs took a $10 billion bailout in 2008 and was slapped with a $550 million fine in 2010, yet both of these times correspond to Blankfein's highest approval rating. If these truly are Goldman Sachs employees divvying out these ratings, I have to ask, "Do you really want these guys managing your money?"

Do you have a CEO you'd like to nominate for this dubious weekly-gaffe honor? Shoot me an email and a one- or two-sentence description of why your choice deserves next week's nomination, and you just may wind up seeing your nominee in the spotlight.

And if you'd like a surefire way to avoid investing in companies with questionable leadership practices, I invite you to download a copy of our latest special report, "Secure Your Future With 9 Rock-Solid Dividend Stocks." This report contains a wide array of companies and sectors that are likely to keep your best interests in mind, regardless of whether the market is up or down. Best of all, it's completely free for a limited time, so don't miss out!

Campaign 2012: Billionaires to the rescue

NEW YORK (CNNMoney) -- Are you a billionaire with a few million bucks to spare?

Assuming you've already got the customary roster of yachts, planes and vacation homes, you might want to try out the newest craze for super-wealthy Americans: Throw a few million dollars to a super PAC.

Boil down the stats and you come up with one big takeaway: A relatively small number of people are exerting tremendous influence over this election.

Already this election cycle, billionaire casino magnate Sheldon Adelson and his wife have given $10 million to a super PAC that supports former House speaker Newt Gingrich.

And Harold Simmons, who played a central role in the development of leveraged buyouts and corporate takeovers, has given $8.5 million to two super PACs, according to the Center for Responsive Politics.

FEC filings reveal the Dallas billionaire gave $5 million to Karl Rove-backed American Crossroads, while a corporation he owns chipped in another $2 million.

PayPal co-founder Peter Thiel gave $900,000 to Endorse Liberty, a super PAC that backs Ron Paul.

Even cash-strapped Rick Santorum, long something of an underdog, has his own super-rich backer: Foster Friess, who has donated at least $331,000 to the pro-Santorum Red, White and Blue Fund.

Friess' donations accounted for more than a third of the donations collected by the super PAC as of Dec. 31.

Campaign finance the Stephen Colbert way

"Foster has been a long personal friend for 20 years," Santorum told CNN this week. "We have spent a lot of time together ... he's someone, again, who is a friend and will continue to be a good friend."

And if you don't happen to have close personal friends with a ten-digit bank account?

"Now I know why my campaign didn't work," Tim Pawlenty quipped on Wednesday. "I didn't have a billionaire."

The donation patterns of billionaires underscore a bit of common sense: They are really, really rich.

Take Adelson, who is CEO of Las Vegas Sands (LVS, Fortune 500), for instance. Recent estimates peg his net worth at around $20 billion. That means his $10 million donation was exactly one twentieth of one percent of his net worth. Yes, 0.05%.

That would be like a millionaire giving a $500 donation. Or a $50 gift for someone worth $100,000.

More than half of itemized super PAC money this cycle has come from just 37 people, according to a an analysis of disclosure reports conducted by PIRG and Demos, two research firms.

And gifts of $1 million or more -- from just 15 donors -- make up 38% of itemized, individual super PAC donations.

In sharp contrast to traditional campaign fundraising, which limits donations to candidates to $2,500 per person, most donations to super PACs are at least $10,000.

According to the PIRG analysis, 93% of all itemized contributions to super PACs were $10,000 or more. They came from just 726 individuals.

More money, more votes: The billion dollar campaign

So far, Republican PACs have the upper hand when it comes to attracting huge donations from the super-wealthy.

Priorities USA Action, a super PAC founded by two ex-White House aides, reported only $1.5 million cash on hand at the end of 2011.

A larger coalition of Democratic groups, including Priorities USA, reported raising a total of $19 million.

However, Democrats are looking to reverse that trend.

Obama's re-election campaign is now encouraging donors to fundraise for a Democratic super PAC supporting the president. Administration and campaign officials will be used as surrogates at PAC events.

That's a sharp reversal of policy for the White House, which had previously bemoaned the role of outside spending groups, particularly those that are not required to disclose its donors.

"This isn't just a threat to Democrats," Obama said in 2010. "This is a threat to our democracy." 

U.S. Consumers Get Creative to Handle High Food and Fuel Prices

There's no question the staggering rise in food and fuel prices will eat away at U.S. households' income in coming months.

But there is the question of how U.S. consumers will cope with those increased costs - especially when so many are already worried about their jobs, savings, investments and retirement.

With gas prices nearing $4.00 a gallon, and the consumer price index (CPI) in February for food-at-home up 2.8% from 2010, U.S. consumers are facing an economic double whammy. As food and fuel expenses make up a larger slice of household budgets, U.S. consumers have to evaluate just which goods are worth buying.

Montana resident Myriam Garcia some days has to choose between filling up her truck with gas or buying food.

"I can't really afford to drive to town," Garcia told The Associated Press. "If I can drive into town once a month, I'm lucky. Before, I had three boys so I was always creative with a limited amount of funds. Now I have to be even more creative because gas is so high."

The national average gasoline price was $3.582 on Tuesday, according to GasBuddy.com. Every $1 a barrel increase in crude oil prices means about a 2.5 cent increase at the gas pump, according to Chris Lafakis, an economist at Moody's Analytics. And every 1-cent per gallon increase in the average gasoline price will translate into $1 billion in extra expenses for consumers.

This means rising food and fuel prices are a fierce threat to consumer spending, which drives 70% of the U.S. economy.

"The American shopper was extremely cautious before. And now I'd say they are extremely worried," said Britt Beemer, president of America's Research Group (ARG). "What we are going to see happen is that consumers will try and cut back on all discretionary purchases, until finally they are going to have to make a decision at some point: what do I really have to give up?"

An ARG survey released last week showed 62% of those surveyed listed rising gas prices as their biggest economic concern right now, and about 75% of Americans were shopping less due to higher gas prices.

Economists at Morgan Stanley (NYSE: MS) and Deutsche Bank AG (NYSE: DB) cut spending forecasts based on data showing that U.S. households are using extra cash to boost savings. U.S. retailers fear this trend will continue through 2011.

"The most vulnerable chunks of Consumerville are casual family dining, followed by the frequency of shopping trips and search for lower-priced items, especially end-of-season markdowns," Richard Hastings, a macro and consumer strategist at Global Hunter Securities, told CNBC.

This prompted last week's Money Morning "Question of the Week": How are you dealing with high food and fuel prices? Have you changed your shopping or driving habits? Have you paid more attention to your household budget, or is your spending behavior unchanged?

Readers sent in the following answers about their money-saving techniques, as well as comments on the global food and fuel price rise.

Back to WorkAlthough I retired in 2005, I recently was extremely lucky to get a part-time job. The extra money has taken away the fear. Nevertheless, I buy nothing I don't desperately need and use all money not spent on food/gas/utilities/insurance/mortgage to pay down debts.

- Linda J.

Stick to the ListI go to my local grocery store Website, read the weekly circular, and click on the items on sale that I need. It makes a shopping list, which I take to the store. I make no other purchases-waiting for sales another time. Saved $49.57 on a bill of $122.00.

- Mary S.

Smaller Portions, Fewer MealsI eat only two meals per day and I have actually cut the portions of everything I eat by at least 25%. I was in the grocery store yesterday and wondering how much it cost all of the food suppliers to repackage everything in downsized containers. Funny how it did not take long for that to happen, nor does anyone talk about the fossil fuel involved in such a process.

- Donna F.

Spoiled BratsPeople in the United States should stop whining about gas prices and even food prices. In most European countries (and I'm sure it's the same in Japan, Singapore, Hong Kong, Australia, New Zealand), gas prices average $7 to $10 per gallon, and higher. I'd like to see gas in the U.S. be on par with EU prices, then things would be more in perspective. It will also get a lot of the much unneeded vehicles off the road, and demand will be there to get a half decent and much needed public transportation system up and running in some of the major towns and cities across the country.

So stop whining - the U.S. has never had it so good - spoiled brats, that all this country is!

- DD.

Use Food as FoodIn order to bring down food prices, a good place to start would be putting a halt to mandatory ethanol (corn) in our gasoline. Let's stop burning our food supply!

- Mary W.

Riot BoundWashington continues to pretend inflation does not exist as the Fed continues to play footsies with their Goldman Sachs buddies. Here is a prediction from someone who lived in the 60's and saw what a disenfranchised populace is capable of: When people are desperate they will ignore the leadership and "take what they need to survive". We are not far off the riots occurring around the world.

- Dave M.

Skipped TownI moved to Medellin, Colombia where you can live as a king for less than $1000 a month.

- Robert S.

Smart InvestingMy extra money is coming from investing in your fantastic recommendations!

- David P.

[Editor's Note: Thanks to all who responded to last week's "Question of the Week" about dealing with food and fuel prices.

Be sure to answer next week's question: Do you think we are headed for a U.S. government shutdown? Do you think the parties will reach a budget agreement, or continue with temporary funding measures? How would you be affected by a government shutdown?

Send your answers to mailbag@moneymappress.com.!

Is there a topic you want to see covered as a "Question of the Week" feature? Then let us know by e-mailing Money Morning at mailbag@moneymappress.com. Make sure to reference "question of the week suggestion" in the subject line. We reserve the right to edit responses for length, grammar and clarity.

Thanks to everyone who took the time to participate - via e-mail or by posting their comments directly on the Money Morning Web site.]

Has Avista Made You Any Fast Money?

It takes money to make money. Most investors know that, but with business media so focused on the "how much," very few investors bother to ask, "How fast?"

When judging a company's prospects, how quickly it turns cash outflows into cash inflows can be just as important as how much profit it's booking in the accounting fantasy world we call "earnings." This is one of the first metrics I check when I'm hunting for the market's best stocks. Today, we'll see how it applies to Avista (NYSE: AVA  ) .

Let's break this down
In this series, we measure how swiftly a company turns cash into goods or services and back into cash. We'll use a quick, relatively foolproof tool known as the cash conversion cycle, or CCC for short.

Why does the CCC matter? The less time it takes a firm to convert outgoing cash into incoming cash, the more powerful and flexible its profit engine is. The less money tied up in inventory and accounts receivable, the more available to grow the company, pay investors, or both.

To calculate the cash conversion cycle, add days inventory outstanding to days sales outstanding, then subtract days payable outstanding. Like golf, the lower your score here, the better. The CCC figure for Avista for the trailing 12 months is -4.6.

For younger, fast-growth companies, the CCC can give you valuable insight into the sustainability of that growth. A company that's taking longer to make cash may need to tap financing to keep its momentum. For older, mature companies, the CCC can tell you how well the company is managed. Firms that begin to lose control of the CCC may be losing their clout with their suppliers (who might be demanding stricter payment terms) and customers (who might be demanding more generous terms). This can sometimes be an important signal of future distress -- one most investors are likely to miss.

In this series, I'm most interested in comparing a company's CCC to its prior performance. Here's where I believe all investors need to become trend-watchers. Sure, there may be legitimate reasons for an increase in the CCC, but all things being equal, I want to see this number stay steady or move downward over time.

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

Because of the seasonality in some businesses, the CCC for the TTM period may not be strictly comparable to the fiscal-year periods shown in the chart. Even the steadiest-looking businesses on an annual basis will experience some quarterly fluctuations in the CCC. To get an understanding of the usual ebb and flow at Avista, consult the quarterly-period chart below.

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

Based only on the raw number, Avista has achieved the enviable feat of running a negative CCC cycle. That is, it typically collects what is owed it before it pays what it owes to others. On a 12-month basis, the trend at Avista looks OK. At -4.6 days, it is 1.7 days worse than the five-year average of -6.2 days. That small change isn't likely to matter much given Avista's continued, quick CCC, but it does bear watching. The biggest contributor to that degradation was DPO, which worsened 4.4 days when compared to the five-year average.

Considering the numbers on a quarterly basis, the CCC trend at Avista looks good. At -11.6 days, it is 8.4 days better than the average of the past eight quarters. With quarterly CCC doing better than average and the latest 12-month CCC coming in worse, Avista gets a mixed review in this cash-conversion checkup.

Though the CCC can take a little work to calculate, it's definitely worth watching every quarter. You'll be better informed about potential problems, and you'll improve your odds of finding the underappreciated home run stocks that provide the market's best returns.

• Add Avista to My Watchlist.

CNOOC Creates Biggest China-U.S. Oil Deal For Stake in Shale Gas Industry

China's state-owned energy company China National Offshore Oil Corp. (CNOOC) (NYSE ADR: CEO) late Sunday announced it would invest $2.16 billion in U.S.-based Chesapeake Energy Corp. (NYSE:CHK) to increase China's stake in unconventional gas resources like shale gas. It is the largest ever China-U.S. oil and gas deal.

CNOOC initially will pay $1.08 billion for a 33% stake in Chesapeake's Eagle Ford shale acreage in Southern Texas. China's third-largest oil company will invest an additional $1.08 billion by paying 75% of Chesapeake's drilling and completion costs in coming years, allowing Chesapeake to tap hard-to-extract shale gas deposits and boosting its weak balance sheet.

The deal highlights China's need to develop its shale-gas extraction techniques. The country has 26 trillion cubic meters of shale gas reserves that are largely unexplored due to a lack of drilling ability - and Chesapeake is a pioneer in the shale gas industry.

"This is the one area that [China] seriously wants to get into, Gordon Kwan, an analyst at Mirae Asset Securities, told the Financial Times. "They don't have the technical expertise and Chesapeake is the market leader in shale oil and gas. So they are teaming up with the world's best player in a sector in which they previously had no exposure.

Extracting from its natural gas deposits also will help China reduce its carbon footprint. The Chinese government wants to increase natural gas consumption to 8% of total energy consumption by 2015 from just 4% now.

Chesapeake plans to grow to 40 rigs from 10 by the end of 2012 with the CNOOC investment, and the project is set to reach peak production of 400,000 to 500,000 barrels of oil equivalent a day in the next decade.

Kwan told The Wall Street Journal that the deal is a "win-win, as it fulfills Chesapeake's need to finance expensive natural gas extraction projects, and provide resources for CNOOC's "supernormal production growth.

"This deal is completely consistent with what U.S. government has said they would like to see Chinese energy companies do, which is to provide capital into America to acquire minority interests and for American companies to use that capital to go out and develop American oil fields and to reduce oil imports, Chesapeake Chief Executive Officer Aubrey McClendon told Bloomberg.

The deal also marks China's first step into the U.S. oil and gas market after political tensions killed an $18.5 billion deal for CNOOC to acquire Union Oil Company of California (Unocal) in 2005. Since the Chesapeake agreement involves a minority stake, the regulatory concerns are not as severe as in the Unocal deal.

Unconventional Gas Sources Perfect Target for Hungry China Shale gas constitutes about 15%-20% of U.S. gas production, but that is expected to quadruple in coming years - and the Eagle Ford shale area is a key to that growth.

"Eagle Ford is hot, said analysts at Tudor Pickering Holt & Co., the Houston-based energy research firm that worked on the CNOOC deal. "Eagle Ford M&A activity remains on fire.

These deals confirm the value of Eagle Ford's reserves. Experts expected a rise in Chesapeake stock as well other companies with large holdings in that area, including EOG Resources Inc. (NYSE: EOG), Pioneer Natural Resources (NYSE: PXD), SM Energy Co. (NYSE: SM) and Petrohawk Energy Corp. (NYSE: HK)

India's Reliance Industries Ltd. since April has spent $3.4 billion investing in U.S. shale gas projects, including $1.3 billion for a 45% stake of Pioneer Natural Resources Co.'s Eagle Ford assets.

But China's need to meet the energy demands of the world's fastest growing economy has pushed it into making even bigger global moves to gain stakes in unconventional oil and gas projects, which include shale gas, tar sands and coal bed methane.

China's surging energy demand will rise to 46 million metric tons of imported liquefied natural gas a year in 2020, up from 5.5 million tons imported last year, according to industry consultants Wood Mackenzie. Chinese gas demand will rise to 444 billion cubic meters annually in 2030 from 93 billion cubic meters in 2009.

In March, Royal Dutch Shell PLC (NYSE ADR: RDS.A) and PetroChina Co. Ltd. (NYSE ADR: PTR) paid $3.4 billion for Australia's Arrow Energy Ltd., which specializes in coal bed methane. In April, China Petroleum & Chemical Corp. (Sinopec) (NYSE ADR: SNP) bought a $4.65 billion stake in Syncrude Canada Ltd., a Canadian oil sands producer.

The benefits of China's energy shopping spree are two-fold for the Asian giant. Besides stockpiling commodities to meet its increasing demand, the country is able to gain physical assets that the rest of the world needs - putting it in a very powerful position.

"While companies in the United States, Great Britain and Europe are being forced to shed promising assets in order to compensate for massive losses or to pay down debt, cash-rich China has been able to operate as a buyer in a buyer's market, wrote Money Morning Chief Investment Strategist Keith Fitz-Gerald in May 2009. "While the rest of the world has interpreted this as a sign that China's interested in buying the things it needs to grow, what they have not understood is that China's also interested in using physical assets as a source of 'currency' that offsets an increasingly eviscerated U.S. dollar.

"This is actually a double-whammy of sorts, for while the rest of the world has been grappling with the global slowdown, China has been locking up supplies of commodities that are only going to become more scarce (and more valuable) as global demand escalates, said Fitz-Gerald.