Monday, March 31, 2014

Weekly CFO Sells Highlight

According to GuruFocus Insider Data, the recent CFO sales were: Chicago Bridge and Iron Company, Covidien PLC, Carnival PLC, and Google Inc.

Chicago Bridge and Iron Company (CBI): Executive Vice President and CFO Ronald A Ballschmiede sold 18,471 Shares

On 02/24/2014, Executive Vice President and CFO Ronald A Ballschmiede sold 18,471 shares at an average price of $80.38. The price of the stock has increased by 5.82% since. Chicago Bridge and Iron Company has a market cap of $9.13 billion and its shares were traded at around $85.06. The company has a P/E ratio of 20.60 and P/S ratio of 0.82 with a dividend yield of 0.26%. Over the past 10 years, Chicago Bridge and Iron Company had an annual average earnings growth of 24.30%. GuruFocus rated Chicago Bridge & Iron Company the business predictability rank of 2.5-star.

Chicago Bridge and Iron Company announced their 2013 fourth quarter results with revenues of $3 billion and gross profit of $339.2 million; the net income was $196.78 million. The 2013 total revenue was $11.1 billion, a 1.02% increase from the 2012 total revenue. The 2013 gross profit was $1.2 billion, a 72% increase from the 2012 gross profit. The 2013 net income was $454.12 million.

On 03/03/2014, President and CEO Philip K Asherman sold 75,000 shares at an average price of $82.81. The price of the stock has increased by 2.71% since. On 03/27/2014, Director Marsha C Williams sold 6,500 shares at an average price of $82.99. The price of the stock has increased by 2.49% since. On 03/26/2014, Executive Vice President Edgar C Ray sold 102,068 shares at an average price of $84.36. The price of the stock has increased by 0.83% since.

Covidien PLC (COV): EVP and CFO Charles J Dockendorff sold 90,730 Shares

On 03/28/2014, EVP and CFO Charles J Dockendorff sold 90,730 shares at an average price of $72.5. Covidien PLC has a market cap of $32.68 billion and its shares were traded at around $72.50. The company has a P/E ratio of 21.10 and P/S ratio of 3.28 with a dividend yield of 1.60%. Over the past 10 years, Covidien Plc had an annual average earnings growth of 6.60%.

Covidien PLC announced their 2013 fourth quarter results with revenues of $2.6 billion and gross profit of $1.56 billion; the net income was $398 million. The 2013 total revenue was $10.2 billion, a 4% increase from the 2012 total revenue. The 2013 gross profit was $6.1 billion, a 3% increase from the 2012 gross profit. The 2013 net income was $1.7 billion.

On 02/28/2014, President and Chief Executive Jose E Almeida sold 50,000 shares at an average price of $72. The price of the stock has increased by 0.69% since. On 02/18/2014, Vice President Coleman N Lannum Iii sold 3,200 shares at an average price of $71.4. The price of the stock has increased by 1.54% since. On 02/13/2014, Vice President and Controller Richard G Jr. Brown sold 4,000 shares at an average price of $71. The price of the stock has increased by 2.11% since.

Carnival PLC (CUK): CFO David Bernstein sold 11,673 Shares

On 01/21/2014, CFO David Bernstein sold 11,673 shares at an average price of $40.80. The price of the stock has decreased by 6.94% since. Carnival PLC has a market cap of $30.68 billion and its shares were traded at around $37.97. The company has a P/E ratio of 27.40 and P/S ratio of 1.91 with a dividend yield of 2.63%. Over the past 10 years, Carnival Plc had an annual average earnings growth of 0.30%.

Carnival PLC announced their 2013 fourth quarter results with revenues of $3.66 billion and gross profit of $1.04 billion; the net income was $66 million. The 2013 total revenue of Carnival PLC was $15.46 billion and the gross profit was $4.8 billion; the net income was $1.08 billion.

On 01/21/2014, CEO Costa Crociere Michael Olaf Thamm sold 4,346 shares at an average price of $42.61. The price of the stock has decreased by 10.89% since. On 03/24/2014, See remarks 1994 B Shares Lp Ma sold 304,954 at an average price of $40.09. The price of the stock has decreased by 5.29% since. On 03/24/2014, Chairman of the Board and 10% Owner Micky Meir Arison sold 525,348 shares at an average price of $40.09. The price of the stock has decreased by 5.29% since.

Google Inc (GOOG): SVP and CFO Patrick Pichette sold 742 Shares

On 03/13/2014, SVP and CFO Patrick Pichette sold 742 shares at an average price of $1208.25. The price of the stock has decreased by 7.29% since. Google Inc has a market cap of $376.43 billion and its shares were traded at around $1120.15. The company has a P/E ratio of 29.10 and P/S ratio of 6.35. Over the past 10 years, Google Inc had an annual average earnings growth of 32.50%. GuruFocus rated Google Inc the business predictability rank of 2.5-star.

Google Inc announced their 2013 fourth quarter results with revenues of $16.86 billion and gross profit of $9.42 billion; the net income was $3.38 billion. The 2013 total revenue was $59.8 billion, a 19% increase from the 2012 total revenue. The 2013 gross profit was $33.97 billion, a 15% increase from the 2012 gross profit. The 2013 net income was $12.92 billion.

On 03/14/2014, CEO and 10% Owner Lawrence Page sold 16,670 shares at an average price of $1179.37. The price of the stock has decreased by 5.02% since. On 03/25/2014, Executive Chairman of Board Eric E Schmidt sold 26,204 shares at an average price of $1159.28. The price of the stock has decreased by 3.38% since.

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Sunday, March 30, 2014

Can TD AMERITRADE Make Money From Record-High Markets?

On Tuesday, TD AMERITRADE (NYSE: AMTD  ) will release its latest quarterly results. The key to making smart investment decisions on stocks reporting earnings is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed knee-jerk reaction to news that turns out to be exactly the wrong move.

Discount brokers have become increasingly popular as a low-cost way to invest, and TD AMERITRADE is a big player in the discount brokerage space. But competition has become fierce, and even with markets at new highs, some investors have been reluctant to put their money to work ever since the bear market of 2008. Let's take an early look at what's been happening with TD AMERITRADE over the past quarter and what we're likely to see in its quarterly report.

Stats on TD AMERITRADE

Analyst EPS Estimate

$0.26

Change From Year-Ago EPS

4%

Revenue Estimate

$676.3 million

Change From Year-Ago Revenue

0.5%

Earnings Beats in Past 4 Quarters

3

Source: Yahoo! Finance.

Are things looking up for TD AMERITRADE?
Analysts have gotten more optimistic about TD AMERITRADE's earnings prospects over the past few months. They've boosted their earnings-per-share estimates for the just-ended quarter by a penny, and full-year fiscal 2013 estimates have risen by a nickel per share. The stock has also performed well, jumping more than 11% since early January.

TD AMERITRADE and its discount peers offer low-cost trading for stocks, ETFs, and other financial products. By offering services at a fraction of the cost of full-service brokers, discount brokers have grown substantially over the years, broadening their product lines and offering new services such as banking.

But the industry has gotten fiercely competitive, especially as trading activity has fallen in recent years. TD AMERITRADE has answered by joining the big fee fight over exchange-traded funds, with its offering more than 100 ETFs from various fund families at no commission. Yet archrival Schwab (NYSE: SCHW  ) answered back with its ETF OneSource offering earlier this year, with a suite of 105 ETFs one-upping TD AMERITRADE's list.

Competition is also coming from other corners. Leveraging its purchase of Merrill Lynch during the financial crisis, Bank of America (NYSE: BAC  ) has reupped its efforts to attract new customers through its Merrill Edge discount-brokerage unit in an attempt to gain the opportunity to cross-sell clients into B of A banking and other financial products.

In TD AMERITRADE's quarterly report, be sure to see how the broker's ETF business is faring against Schwab and other competitors. If its attempt to draw in assets has been successful, then the move could continue paying dividends for TD AMERITRADE well into the future.

Bank of America has worked hard to become an all-purpose provider of financial services to millions of customers. But does the stock belong in your portfolio? Find out in The Motley Fool's premium research report on B of A, where analysts Anand Chokkavelu, CFA, and Matt Koppenheffer, financials bureau chief, lift the veil on the bank's operations, including detailing three reasons to buy and three reasons to sell. Click here now to claim your copy.

Click here to add TD AMERITRADE to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.

IHS Promotes COO to CEO

Colorado-based IHS (NYSE: IHS  ) will be under new management soon. The business analytics provider announced Wednesday that current President and Chief Operating Officer Scott Key will take over the role of President and Chief Executive Officer from Jerre Stead on June 1.

At that time, Stead will become simply executive chairman of the company.

Key, a 10-year veteran of the company, has served as COO since January 2011. In compensation for his new role, IHS said in an SEC filing that he will receive:

A 23% increase in salary to $830,000 a year. Annual bonus target of 100% of this salary. A "promotional equity award" of 15,000 performance-based restricted stock units (RSU).

Stead will receive a 10,000-RSU award upon taking the position of executive chairman.

Simultaneously with this news, IHS issued guidance for the current fiscal year. The company expects to produce revenues of between $1.66 billion and $1.73 billion, with a revenue growth rate of about 6% year over year. Adjusted earnings for the year are expected to range between $4.23 and $4.43 per share. No GAAP earnings projection was given.

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Top Gas Utility Companies To Own In Right Now

This was supposed to be the year the "Great Rotation" from bonds to stocks would hit Maserati-like acceleration.

Well, the great stock market sell-off of 2014 has put the expected asset allocation shift from fixed-income investments to stocks on hold.

In the exchange-traded-fund (ETF) space, investors pulled $14.7 billion out of U.S. stock-focused funds in January ��the largest outflow since August 2013 ��snapping four straight months of inflows, according to Birinyi Associates. Last month, the Standard & Poor's 500-stock index fell 3.6% and suffered its first down January in four years.

In contrast, $624 million flowed into long-term U.S. government bonds.

MARKETS: Stocks fail to gain traction, close slightly lower

TRACK YOUR STOCKS: Get real-time quotes with our free Portfolio Tracker

Top Gas Utility Companies To Own In Right Now: Petroquest Energy Inc(PQ)

PetroQuest Energy, Inc. operates as an independent oil and gas company. It engages in the acquisition, exploration, development, and operation of oil and gas properties in Oklahoma, Arkansas, and Texas, as well as onshore and in the shallow waters offshore the Gulf Coast Basin. As of December 31, 2009, the company had estimated proved reserves of 1,931 thousand barrels of oil and 167,361 million cubic feet equivalent of natural gas. It owned working interests in 9 net producing oil wells and 277 net producing gas wells. PetroQuest Energy was founded in 1983 and is headquartered in Lafayette, Louisiana.

Advisors' Opinion:
  • [By Jon C. Ogg]

    PetroQuest Energy Inc. (NYSE: PQ) was downgraded to Neutral from Overweight at J.P. Morgan.

    Rubicon Technology Inc. (NASDAQ: RBCN) was downgraded to Underperform from Perform at Oppenheimer.

Top Gas Utility Companies To Own In Right Now: Enpro Industries (NPO)

EnPro Industries, Inc. designs, develops, manufactures, and markets engineered industrial products primarily in the United States and Europe. The company operates through three segments: Sealing Products, Engineered Products, and Engine Products and Services. The Sealing Products segment provides metallic, non-metallic, and composite material gaskets; dynamic seals; compression packing; resilient metal seals; elastomeric seals; expansion joints; heavy-duty truck wheel-end component systems, including brake products; flange sealing and isolation products; pipeline casing spacers/isolators; casing end seals; sealing systems for sealing pipeline penetrations; hole forming products; manhole infiltration sealing systems; safety-related signage for pipelines; bellows and bellow assemblies; pedestals for semiconductor manufacturing; polytetrafluoroethylene products; and sheeted rubber products. Its products are used in various industries, including chemical and petrochemical proc essing, petroleum extraction and refining, pulp and paper processing, heavy-duty trucking, power generation, food and pharmaceutical processing, primary metal manufacturing, mining, water and waste treatment, aerospace, medical, filtration, and semiconductor fabrication. The Engineered Products segment offers bearing products and aluminum bushing blocks for use in automotive, pump and compressor, construction, power generation, and general industrial markets; and components for reciprocating compressors and engines in refining, petrochemical, natural gas gathering, and storage and transmission markets. The Engine Products and Services segment manufactures, sells, and services heavy-duty, medium-speed diesel, natural gas, and dual fuel reciprocating engines for shipyards, municipal utilities, institutional and industrial organizations, sewage treatment plants, nuclear power plants, and offshore oil and gas platforms. The company was founded in 2002 and is headquartered in Cha rlotte, North Carolina.

Advisors' Opinion:
  • [By Lisa Levin]

    EnPro Industries (NYSE: NPO) shares rose 25.20% to $74.13. The volume of EnPro Industries shares traded was 2661% higher than normal. EnPro's Garlock won a trial on Asbestos liability. CL King upgraded the stock from Neutral to Buy.

  • [By Seth Jayson]

    Calling all cash flows
    When you are trying to buy the market's best stocks, it's worth checking up on your companies' free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That's what we do with this series. Today, we're checking in on EnPro Industries (NYSE: NPO  ) , whose recent revenue and earnings are plotted below.

5 Best Cheap Stocks To Buy For 2014: Access Midstream Partners LP (ACMP)

Access Midstream Partners, L.P., formerly Chesapeake Midstream Partners, L.L.C. (Partnership), incorporated on January 21, 2010, owns, operates, develops and acquires natural gas, natural gas liquids (NGLs) and oil gathering systems and other midstream energy assets. The Company is focused on natural gas and NGL gathering. The Company provides its midstream services to Chesapeake Energy Corporation (Chesapeake), Total E&P USA, Inc. (Total), Mitsui & Co. (Mitsui), Anadarko Petroleum Corporation (Anadarko), Statoil ASA (Statoil) and other producers under long-term, fixed-fee contracts. On December 20, 2012, the Company acquired from Chesapeake Midstream Development, L.P. (CMD), a wholly owned subsidiary of Chesapeake, and certain of CMD's affiliates, 100% of interests in Chesapeake Midstream Operating, L.L.C. (CMO). As a result of the CMO Acquisition, the Partnership owns certain midstream assets in the Eagle Ford, Utica and Niobrara regions. The CMO Acquisition also extended the Company's assets and operations in the Haynesville, Marcellus and Mid-Continent regions.

The Company operates assets in Barnett Shale region in north-central Texas; Eagle Ford Shale region in South Texas; Haynesville Shale region in northwest Louisiana; Marcellus Shale region in Pennsylvania and West Virginia; Niobrara Shale region in eastern Wyoming; Utica Shale region in eastern Ohio, and Mid-Continent region, which includes the Anadarko, Arkoma, Delaware and Permian Basins. The Company's gathering systems collect natural gas and NGLs from unconventional plays. The Company generates its revenues through long-term, fixed-fee gas gathering, treating and compression contracts and through processing contracts.

Barnett Shale Region

The Company's gathering systems in its Barnett Shale region are located in Tarrant, Johnson and Dallas counties in Texas in the Core and Tier 1 areas of the Barnett Shale and consist of 25 interconnected gathering systems and 850 miles of pipeline. During the year! ended December 31, 2012, average throughput on the Company's Barnett Shale gathering system was 1.195 billion cubic feet per day. The Company connects its gathering systems to receipt points that are either at the individual wellhead or at central receipts points into which production from multiple wells are gathered. The Company's Barnett Shale gathering system is connected to the three downstream transportation pipelines: Atmos Pipeline Texas, Energy Transfer Pipeline Texas and Enterprise Texas Pipeline. Natural gas delivered into Atmos Pipeline Texas pipeline system serves the greater Dallas/Fort Worth metropolitan area and south, east and west Texas markets at the Katy, Carthage and Waha hubs. Natural gas delivered into Energy Transfer Pipeline Texas pipeline system serves the greater Dallas/Fort Worth metropolitan area and southeastern and northeastern the United States markets supplied by the Midcontinent Express Pipeline, Centerpoint CP Expansion Pipeline and Gulf South 42-inch Expansion Pipeline. Natural gas delivered into Enterprise Texas Pipeline pipeline system serves the greater Dallas/Fort Worth metropolitan area and southeastern and northeastern the United States markets supplied by the Gulf Crossing Pipeline.

Eagle Ford Shale Region

The Company's gathering systems in its Eagle Ford Shale region are located in Dimmit, La Salle, Frio, Zavala, McMullen and Webb counties in Texas and consist of 10 gathering systems and 618 miles of pipeline. During 2012, gross throughput for these assets was 0.169 billion cubic feet per day. The Company connects its gathering systems to central receipt points into which production from multiple wells is gathered. The Company's Eagle Ford gathering systems are connected to six downstream transportation pipelines, which include Enterprise, Camino Real, West Texas Gas, Regency Gas Service, Eagle Ford Gathering and Enerfin. The Company processes gas at Yoakum or other Enterprise plants and transports residue to Wharton residue header w! ith conne! ctions to numerous interstate pipelines.

Haynesville Shale Region

The Company's Springridge gas gathering system in the Haynesville Shale region is located in Caddo and DeSoto Parishes, Louisiana, in one of the core areas of the Haynesville Shale and consists of 263 miles of pipeline. During 2012, average throughput on the Company's Springridge gathering system was 0.359 billion cubic feet per day. The Company connects its gathering system to receipt points that are at central receipt points into which production from multiple wells is gathered. The Company's Springridge gathering system is connected to three downstream transportation pipelines: Centerpoint Energy Gas Transmission, ETC Tiger Pipeline and Texas Gas Transmission Pipeline. The Company's Mansfield gas gathering system in the Haynesville Shale region is located in DeSoto and Sabine Parishes, Louisiana, in one of the areas of the Haynesville Shale and, as of December 31, 2012, consist of 304 miles of pipeline. During 2012, average throughput on the Company's Mansfield gathering system was 0.720 billion cubic feet per day. The Company connects its gathering system to receipt points that are at central receipt points into which production from multiple wells is gathered and treated. The Company's Mansfield gathering system is connected to two downstream transportation pipelines: Enterprise Accadian Pipeline and Gulf South Pipeline. Natural gas delivered into Enterprise Accadian pipeline can move to on-system markets in the Midwest and to off-system markets in the Northeast through interconnections with third-party pipelines. Natural gas delivered into Gulf South pipeline can move to on-system markets in the Midwest and to off-system markets in the Northeast through interconnections with third-party pipelines.

Marcellus Shale Region

Through Appalachia Midstream, the Company operates 100% of and own an approximate average 47% interests in 10 gas gathering systems that consist of approximately 5! 49 miles ! of gathering pipeline in the Marcellus Shale region. The Company's volumes in the region are gathered from northern Pennsylvania, southwestern Pennsylvania and the northwestern panhandle of West Virginia, in core areas of the Marcellus Shale. The Company operates these smaller systems in northeast and central West Virginia, southeast Pennsylvania, northwest Maryland, north central Virginia, and south central New York. During 2012, gross throughput for Appalachia Midstream assets was just over 1.8 billion cubic feet per day. The Company's Marcellus gathering systems' delivery points include Caiman Energy, Central New York Oil & Gas, Columbia Gas Transmission, MarkWest, NiSource Midstream, PVR and Tennessee Gas Pipeline. Natural gas is delivered into a 16-inch pipeline and delivered to the Caiman Energy Fort Beeler processing plant where the liquids are extracted from the gas stream. The natural gas is then delivered into the TETCo interstate pipeline for ultimate delivery to the Northeast region of the United States. Natural gas delivered into Central New York Oil & Gas 30-inch diameter pipeline can be delivered to Stagecoach Storage, Millennium Pipeline, or Tennessee Gas Pipeline's Line 300. In Columbia Gas Transmission lean natural gas is delivered into two 36-inch interstate pipelines for delivery to the Mid-Atlantic and Northeast regions of the United States. Natural gas is delivered into a MarkWest pipeline for delivery to the MarkWest Houston processing plant where the liquids are extracted from the gas stream. In NiSource Midstream natural gas is delivered into a 20-inch diameter pipeline and delivered to the MarkWest Majorsville processing plant where the liquids are extracted from the rich gas stream. In PVR natural gas is delivered into the 24-inch diameter Wyoming pipeline and the Hirkey Compressor Station. In Tennessee Gas Pipeline natural gas is delivered into this looped 30-inch diameter pipeline (TGP Line 300) at three different locations can be received in the Northeast at points along th! e 300 Lin! e path, interconnections with other pipelines in northern New Jersey, as well as an existing delivery point in White Plains, New York.

Niobrara Shale Region

The Company's gathering systems in the Niobrara Shale region are located in Converse County, Wyoming and consist of two interconnected gathering systems and 79 miles of pipeline. During 2012, average throughput in the Company's Niobrara Shale region was 0.013 billion cubic feet per day. The Company connects its gathering systems to receipt points,which are either at the individual wellhead or at central receipts points into which production from multiple wells are gathered. The Company's Niobrara gathering systems are connected to two downstream transportation pipelines: Tallgrass/Douglas Pipeline and North Finn/DCP Inlet Pipeline. Natural gas delivered into Tallgrass/Douglas pipeline is sent to the Tallgrass processing facility; after processing, natural gas is delivered to Cheyenne Hub, Rockies Express Pipeline, or Trailblazer Pipeline through Tallgrass Interstate Gas Transmission.

Utica Shale Region

The Company's gathering systems in the Utica Shale region are located in northeast Ohio and consist of 67 miles of pipeline. The Company's Utica gathering systems are connected to two downstream transportation pipelines: Dominion East Ohio (Blue Racer) and Dominion Transmission, Inc.

Mid-Continent Region

The Company's Mid-Continent gathering systems extend across portions of Oklahoma, Texas, Arkansas and Kansas. Included in the Company's Mid-Continent region are three treating facilities located in Beckham and Grady Counties, Oklahoma, and Reeves County, Texas, which are designed to remove contaminants from the natural gas stream.

Anadarko Basin and Northwest Oklahoma

The Company's assets within the Anadarko Basin and Northwest Oklahoma are located in northwestern Oklahoma and the northeastern portion of the Texas Panhandle and consist of appro! ximately ! 1,578 miles of pipeline. During 2012, the Company's Anadarko Basin and Northwest Oklahoma region gathering systems had an average throughput of 0.457 billion cubic feet per day. Within the Anadarko Basin and Northwest Oklahoma, the Company is focused on servicing Chesapeake's production from the Colony Granite Wash, Texas Panhandle Granite Wash and Mississippi Lime plays. Natural gas production from these areas of the Anadarko Basin and Northwest Oklahoma contains NGLs. In addition, the Company operates an amine treater with sulfur removal capabilities at its Mayfield facility in Beckham County, Oklahoma. The Company's Mayfield gathering and treating system gathers Deep Springer natural gas production and treats the natural gas to remove carbon dioxide and hydrogen sulfide to meet the specifications of downstream transportation pipelines.

The Company's Anadarko Basin and Northwest Oklahoma systems are connected to a transportation pipelines transporting natural gas out of the region, including pipelines owned by Enbridge and Atlas Pipelines, as well as local market pipelines such as those owned by Enogex. These pipelines provide access to Midwest and northeastern the United States markets, as well as intrastate markets.

Permian Basin

The Company's Permian Basin assets are located in west Texas and consist of approximately 358 miles of pipeline across the Permian and Delaware basins. During 2012, average throughput on the Company's gathering systems was 0.076 billion cubic feet per day. The Company's Permian Basin gathering systems are connected to pipelines in the area owned by Southern Union, Enterprise, West Texas Gas, CDP Midstream and Regency. Natural gas delivered into these transportation pipelines is re-delivered into the Waha hub and El Paso Gas Transmission. The Waha hub serves the Texas intrastate electric power plants and heating market, as well as the Houston Ship Channel chemical and refining markets. El Paso Gas Transmission serves western the United ! States ma! rkets.

Other Mid-Continent Regions

The Company's other Mid-Continent region assets consist of systems in the Ardmore Basin in Oklahoma, the Arkoma Basin in eastern Oklahoma and western Arkansas and the East Texas and Gulf Coast regions of Texas. The other Mid-Continent assets include approximately 648 miles of pipeline. These gathering systems are localized systems gathering specific production for re-delivery into established pipeline markets. During 2012, average throughput on these gathering systems was 0.031 billion cubic feet per day.

The Company competes with Energy Transfer Partners, Crosstex Energy, Crestwood Midstream Partners, Freedom Pipeline, Peregrine Pipeline, XTO Energy, EOG Resources, DFW Mid-Stream, Enbridge Energy Partners, DCP Midstream, Enterprise Products Partners Inc., Regency Energy Partners, Texstar Midstream Operating, West Texas Gas Inc., TGGT Holdings, Kinderhawk Field Services, CenterPoint Field Services, Williams Partners, Penn Virginia Resource Partners, Caiman Energy, MarkWest Energy Partners, Kinder Morgan, Dominion Transmission (Blue Racer), Enogex and Atlas Pipeline Partners.

Advisors' Opinion:
  • [By Robert Rapier]

    Next week�� issue will tackle the three remaining questions: one on MLP equivalents in Canada and Australia, one on Enbridge Energy Partners (NYSE: EEP) �and TC Pipelines (NYSE: TCP), and a third query on Access Midstream Partners (NYSE: ACMP), Crestwood Midstream Partners (NYSE: CMLP) and Mid-Con Energy Partners (Nasdaq: MCEP).

Top Gas Utility Companies To Own In Right Now: Greengro Technologies Inc (GRNH)

GreenGro Technologies Inc., formerly Authoriszor Inc., provides management services for the planning, construction, staffing and operation of medical marijuana dispensaries, and nurseries on behalf of non-profit patient co-operatives. Through long term contracts, the Company operates non-profit centers, returning all unused patient contributions, on a pro-rata basis to each co-op member in the form of additional product. In February 2010, Authoriszor Inc. completed the acquisition of GreenGro Technologies, Inc., and CannovaHealth, a clinic management company. In September 2011, the Company acquired Vertical Hydrogarden, Inc.

Medical marijuana (medical cannabis) is an alternative method to other forms of medication used to manage or alleviate pain without the undo side-effects caused by the prescription medication being used to treat an illness. The Company stands ready to assist in patient care co-operatives throughout the United States.

Advisors' Opinion:
  • [By Ben Levisohn]

    But, as the Huffington Post points out, most of the companies that stand to benefit are very small–they make micro caps look big–trade over the counter–good bye liquidity. That includes transaction-processing company MediSwipe (MWIPD), GreenGro Technologies (GRNH) Medbox (MDBX), which makes dispenser for high-risk drugs, and GW Pharmaceuticals (GWPRF).

  • [By James E. Brumley]

    If it seems like the buzz surrounding marijuana stocks like Medical Marijuana Inc. (OTCMKTS:MJNA), Hemp, Inc. (OTCMKTS:HEMP), and GreenGro Technologies, Inc. (OTCMKTS:GRNH) has been a little louder than usual the last few days, you're not crazy - it has been louder, and particularly bullish. GRNH shares advanced 37% in December. HEMP is up 166% for the past two weeks. MJNA has jumped 47% in just the past couple of days. Well, as it turns out, it's not just mere coincidence that GreenGro Technologies, Hemp, Medical Marijuana, and a bunch of other cannabis-related names have perked up of late. And, odds are pretty good they'll all continue to do well (even of the pace slows a bit) in 2014.

  • [By Dan Burrows]

    MediSwipe (MWIP) has tripled, with MWIP stock up 200%. Cannabis Science (CBIS) is closing in on quadrupling, as CBIS stock gained 273%. And GreenGro Technologies (GRNH)? Brace yourself, because GRNH stock is up over 1,000% … including an 18% so far today.

Top Gas Utility Companies To Own In Right Now: Jacksonville Bancorp Inc. (JXSB)

Jacksonville Bancorp, Inc. operates as the holding company for Jacksonville Savings Bank that provides various banking products and services in Illinois. Its deposit products include interest-bearing and non interest-bearing checking accounts, savings accounts, money market accounts, term certificate accounts, individual retirement accounts, and certificates of deposit. The company?s loan portfolio comprises one-to four-family mortgage loans; commercial and agricultural real estate, and multi-family residential real estate loans; commercial and agricultural business loans; and consumer loans, such as home equity loans and lines of credit, and automobile loans. It operates through its main office, as well as through six branches located in Jacksonville, Virden, Litchfield, Chapin, and Concord, Illinois. The company was founded in 1916 and is based in Jacksonville, Illinois. Jacksonville Bancorp, Inc. is a subsidiary of Jacksonville Bancorp, MHC.

Advisors' Opinion:
  • [By Traders Reserve]

    Jacksonville Bancorp (JXSB), based in Illinois, owns a loan portfolio comprised of one-to four-family residential real estate; commercial and agricultural real estate; multi-family residential real estate loans; commercial and agricultural business loans; home equity loans and lines of credit.

Top Gas Utility Companies To Own In Right Now: Kleangas Energy Technologies Inc (KGET)

Kleangas Energy Technologies, Inc., incorporated on January 7, 2008, is a development-stage company. The Company is engaged in designing, manufacturing and selling oxy-hydrogen systems. These systems function by creating oxygen and hydrogen from distilled water through electrolysis and injecting these gases into the mixture of fuel and air used in gasoline and diesel internal combustion engines. In August 2013, the Company acquired a Patent Pending Oxy-Hydrogen Generator Technology for all types of gas and diesel internal combustion engines. In December 2013, the Company announced that it has completed the acquisition of Green Day Technologies, Inc.

The Company designs, develops and markets a range of technologies, including oxy-hydrogen on-demand generators, reverse fuel cells, hydrogen powered devices, welding and cutting systems and other products to deliver a clean gas. The Company�� technology can separate these two basic life giving elements or recombine them into a clean source of gas that can be implemented in a wide variety of applications

Advisors' Opinion:
  • [By Peter Graham]

    Small cap green stocks Vision Industries Corp (OTCMKTS: VIIC), Bravo Enterprises Ltd (OTCMKTS: OGNG) and Kleangas Energy Technologies Inc (OTCMKTS: KGET) have reported recent news and/or they are being promoted. Of course, it goes without saying that small cap green stocks tend to be more volatile that other types of investments. So will investors and traders alike see some greenbacks from these green stocks? Here is a quick reality check:

  • [By Peter Graham]

    Small cap green stocks Essential Innovations Technology Corp (OTCBB: ESIV), Building Turbines Inc (OTCMKTS: BLDW) and Kleangas Energy Technologies Inc (OTCMKTS: KGET) have all been getting some attention lately in various investment newsletters ��either because they were sinking, because of paid promotions or a combination of both. However, there aren�� many green stocks out there that have actually produced some green for investors in the form of profits. With that in mind, here is a quick reality check about all three green small cap stocks to help you decide whether any have the potential for long-term success:

Saturday, March 29, 2014

BrokerCheckmate: Finra marks wave big red flag

brokercheck, finra, myers associates, disclosure events, black marks

Broker-dealers come in all shapes, sizes and specialties. But one small New York firm, Meyers Associates, stands out as a haven for registered representatives with black marks on their employment histories.

Known as “disclosure events” in the securities industry, these marks show up in BrokerCheck, the public database of broker records maintained by the Financial Industry Regulatory Authority Inc. The events vary, from customer complaints and regulatory actions to a broker's financial problems such as bankruptcies and Internal Revenue Service liens.

Disclosure events are often seen as red flags by both investors and the industry. Most top-flight broker-dealers simply won't hire reps who have multiple events on their records because they carry too much regulatory risk and potential liability for the firms.

And then there are firms such as Meyers Associates.

About 12% of registered securities professionals have some type of disclosure event on their records, according to the Finra.

At Meyers Associates, the percentage of reps with disclosure events is an astounding five times the industry average.

A review of the firm's roster of 75 brokers showed that 47 have some type of disclosure event on their BrokerCheck records.That means that close to 63% of the firm's producers have marked-up BrokerCheck histories. Of those who have disclosure events, the average is 4.5 per rep.

(See also: Don't let brokers keep watch on themselves.)

To be fair, not all customer complaints and regulatory actions turn out to have merit, and in the case of Meyers Associates brokers, not all of the disclosure events occurred while they were at the firm. Indeed, many of the brokers have worked for several firms over the past 10 to 20 years.

RED FLAG

But frequently moving from one firm to another is also considered a red flag in the industry. One of Meyers' brokers changed firms 26 times since 1992, in some cases leaving one firm to join another, only to wind up back with one of his previous employers a few years later.

The firm's founder and chief executive, Bruce Meyers, stands out for the number of his disclosure events..

Of the 10 on his record, six are of a regulatory nature and four are from customer complaints. In 2011, Finra fined him $35,000 and suspended him for four months from working as a principal and supervisor for failing to supervise employees who were supposed to turn over documents to the regulator. At the time of that settlement, Mr. Meyers neither admitted nor denied Finra's allegations.

Dating back to 1991, another “supervisory violation occurred” when Mr. Meyers “was on vacation,” according to BrokerCheck. In 2000, he failed to enforce the firm's written procedures regarding insider trading and was fined $10,000, according to his BrokerCheck report. Another ! “regulatory event” occurred in 1989 when he failed to pay a $15 “renewal fee” for his license in Michigan.

$2.4 MILLION IN DAMAGES

In the four investor complaints, Mr. Meyers faced investors claiming $2.4 million in damages, according to his BrokerCheck report. He settled those for a total of $240,000, or 10 cents on the dollar.

In one complaint, he said he never spoke with the client. “Thus, in essence, I was only named because my name appears on the door, so to speak,” Mr. Meyers commented on BrokerCheck. Heads of firms, particularly small or mid-sized broker-dealers, are commonly named in investor complaints although they have had no direct dealings with clients.

Mr. Meyers on Thursday said he had no comment regarding the number of disclosure events for the firm's reps on their BrokerCheck records.

(Don't miss: BrokerCheck comes under fire.)

A review of the records of Meyers Associates' brokers with multiple disclosure events shows customer complaints, but also financial problems such as judgments, tax liens or paid settlements with credit card companies. Two reps have declared bankruptcy since the credit crisis.

Clients turn to financial advisers for competent help with their money and long- term financial goals. It is understandable that a prospective client might want to know that his broker or adviser owes the IRS $314,000, as does one Meyers rep.

A look under the hood right now at Meyers Associates is relevant for a couple of reasons.

First, Finra said at the start of the year it was expanding efforts to watch closely the “small number of brokers” with a “pattern of complaints or disclosures for sales practices abuses.” A review of BrokerCheck of Myers Associates brokers shows several complaints for sales practice abuses. Will Finra crack down on Meyers Associates?

A spokeswoman for Finra, Michelle Ong, declined to discuss the Meyers firm, but wrote in an e-mail that the regulator was “very aware” of ! the firm.!

Second, the Connecticut Department of Banking in February filed a cease-and-desist order against Meyers Associates and Mr. Meyers that could revoke the registrations of both the broker-dealer and its founder in the state, essentially shutting them down in a major metropolitan region.

According to Connecticut's allegations, the firm had a number of problems, including not taking any meaningful disciplinary action in response to one rep's “pattern of customer complaints.” The firm also offered and sold unregistered securities in the state, Connecticut alleges. The firm faces a maximum fine of up to $100,000 per violation.

“Our notice shows just how serious we take the obligation of our registrants to be cooperative during a regulatory examination,” wrote Eric Wilder, the securities division director, in an email.

The firm has an opportunity for a hearing on the allegations, according to the Connecticut Department of Banking order.

Mr. Meyers said he had no comment about the Connecticut order.

ON THE RADAR

How Finra and various state regulators monitor and discipline broker-dealers gets at the heart of an embedded conflict of interest in the securities industry. How do broker-dealers walk the tightrope between adequate supervision of brokers and providing investors with the products and services they want or need?

“If a broker has a book of business, firms are willing to overlook” disclosure events and customer complaints, said Heath Abshure, Arkansas securities commissioner. “But I do think firms are getting better at supervision.”

While not commenting on Meyers Associates, Mr. Abshure said that once one state regulator begins an action such as a cease-and-desist order against a firm, that firm is on the radar of other regulators.

“Arkansas is constantly monitoring disclosure events,” he said. “If one state takes action [against a firm], we might take a look at it too.”

Check Off One More Task on Cliffs Natural Resources' Chromite Project

Let's just say it's but one checkbox ticked off in a long list of boxes needing checks.

The Ontario government said it's signed an agreement with Matawa First Nations laying out a framework for developing the province's northern mineral resources. Although a minimal achievement, it's an important one because a lack of cohesion among all the parties involved was key to Cliffs Natural Resources (NYSE: CLF  ) indefinitely suspending work on its $3.3 billion Ring of Fire chromite project last year.

McFaulds Lake, Ontario, Canada. Source: Cliffs Natural Resources.

The Ring of Fire is a vast but remote region in northern Canada in the James Bay lowlands, currently only accessible via a two-hour flight from Thunder Bay, the nearest major city. Current estimates suggest it holds the largest deposit of chromite ever found in North America, as well as significant production quantities of nickel, copper, and platinum, worth some $60 billion. The region has been called "Canada's next oilsands."

For Cliffs, its Black Thor deposit represents the first particularly rich opportunity and a key means to diversify itself. Over the 30-year life of the planned open pit mine, it expects to produce 1,500 tonnes of ferrochrome per day once it swings into full production. Ferrochrome is an alloy of chromium and iron and is key to the production of steel, particularly stainless steel.

Chromite would be a welcome diversion. Cliffs' iron ore and metallurgical coal operations are under severe pressure as sales volumes collapsed for the former and pricing tumbled for the latter leading to a 3% decline in revenues last year. In the fourth quarter it offset some of the decline by a 10% increase in global seaborne iron ore pricing, but that business is the subject of increasingly acrimonious battle with activist investor Casablanca Capital that wants Cliffs to spin off the international assets and divest its chromite and nickel projects in order to better focus on its domestic iron ore business. 

More than three quarters of the world's chromite is produced in South Africa, India, and Kazakhstan, with another 12% coming from Brazil, Finland, Russia, Zimbabwe, and Turkey. Canada stands to become a major player in the industry with the Ring of Fire development, and Cliffs, which already sells ore to the steel industry believes it would have another value add for it.

But the road to realizing the opportunity has not been smooth, not least of which is because there are no roads to the Ring of Fire region. A lack of infrastructure and infighting among the biggest players about how best to achieve it has ground progress to a halt. Which is why the provincial ministry signing an agreement with the chiefs of the Matawa Tribal Council is only a small though necessary step. 

Without consensus on any of these issues, with many of the parties still at loggerheads, and with the provincial government keeping under wraps exactly what it is they agreed to with the First Nations, the development of the chromite region is really no closer to reality than it was last when Ontario said it hired Deloitte to act as a neutral third-party sounding board.

These are all necessary steps and only by checking them off will they be accomplished, but each announcement is simply another part of the slog through the morass. And if Casablanca Capital gains control of Cliffs Natural Resources' board it will demand the chromite project be sold. Investors, therefore, shouldn't get their hopes up that all the boxes will be checked off for Cliffs anytime soon. 

Your turn to be an analyst
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Ford mocks Cadillac's 'Poolside' ad

Cadillacs are for people with pools. Fords are for people with passions. That's the theme of the newest ad from Ford, which parodies a recent Cadillac commercial that's targeted to the affluent.

The controversial Cadillac ELR commercial features a middle-aged man (actor Neal McDonough) boasting about America's work ethic and consumer culture. In contrast, Ford's ad stars a young, philosophizing Detroit environmentalist.

The piece was spearheaded by Ford's ad agency, Team Detroit, for the Ford C-MAX. At the center of the ad is Pashon Murray, founder of Detroit Dirt, a sustainability consultancy and advocacy group, who's first seen standing by mounds of dirt and mud, and later is shot in a narrow apartment hallway.

"The C-MAX is sending a message about where we're going in the future and caring about conserving resources. This is a movement about changing Detroit and practicing sustainability. That's why they came at me," Murray told the Detroit Free Press, explaining why she was chosen by Team Detroit.

The parody had more than 50,000 views as of Friday afternoon on YouTube. The Cadillac ad had more than 1 million.

In the video, Murray says, "We're crazy entrepreneurs trying to make the world better. Some people might think we're nuts. Whatever. Me? I collect food scraps from restaurants, manure from zoos. Manure. Do you know why? To keep this stuff out of landfills and use it. It's pretty simple. You work hard. You believe that anything is possible and you try to make the world better. You try."

Like the Cadillac commercial, she ends by rhetorically asking the audience to agree, using the French phrase, "N'est-ce pas?" which means, "Is it not?"

In the "Poolside" ad — so named because it begins at a beautiful, private swimming pool — McDonough says, "Other countries, they work, they stroll home, they stop by the café. They take August off. Off. Why aren't you like that? Why aren't we like that? Because we're crazy, driven, hard-working believers. ... As for a! ll the stuff, that's the upside of only taking two weeks off in August."

Ford spokeswoman Sara Tatchio described the video as "lighthearted."

"I don't think we're mocking a competitor. We're trying to showcase positive work being done in our community," she said.

Friday, March 28, 2014

Top Penny Companies To Buy Right Now

John Dessauer, editor of John Dessauer Investments, looks at two important tech leaders. Although both companies disappointed analysts in the latest quarter, Dessauer sees the setbacks as opportunities.

Intel (INTC) reported second quarter earnings of $0.39 a share, a penny below the consensus estimate. Sales at $12.8 billion were in line with the analysts' estimates.

The quarter suffered because PC sales were sluggish and most analysts expect that to be the case in coming quarters.

Intel was slow to get involved in the mobile and handheld technology market, but has been making real progress in that regard.

Intel has a new CEO. Analysts are waiting to see how the changes he is making work out in terms of sales and profits. He has already flattened the management structure to improve new product development and basic decision making.

Intel is in transition, with a new CEO and an aggressive move into new markets. Intel is ahead of the competition in servers, and moving fast in mobile and handheld devices.

Top Penny Companies To Buy Right Now: HopFed Bancorp Inc.(HFBC)

HopFed Bancorp, Inc. operates as the holding company for Heritage Bank that provides various banking products and services primarily in western Kentucky, and middle and western Tennessee. The company offers a range of deposit products, including demand deposits, time deposits, money market accounts, passbook savings accounts, individual retirement accounts, and certificates of deposit. Its loan portfolio comprises one-to-four family residential loans, multifamily residential loans, construction loans, nonresidential loans, commercial real estate loans, and land and land development loans, as well as loans secured by deposits, other consumer loans, and commercial loans. The company, through its subsidiary, Fall and Fall Insurance Agency, sells life and casualty insurance products to individuals and businesses. HopFed Bancorp offers its products and services through its branch offices located in Hopkinsville, Murray, Cadiz, Elkton, Fulton, Calvert City, and Benton, Kentucky; and in Clarksville, Pleasant View, Ashland City, Kingston Springs, and Erin, Tennessee. The company was founded in 1879 and is headquartered in Hopkinsville, Kentucky.

Advisors' Opinion:
  • [By Louis Navellier]

    HopFed Bancorp (HFBC), at $85 million in market cap, operates 18 branches in middle Tennessee and Western Kentucky and can be thought of as poster child for what is going on in the small banking sector. An activist investor took a stake in the bank and opposed an ill-advised acquisition. Instead, he suggested HopFed management get its own house in order. Management went along and canceled the deal, instituted a stock buyback plan and doubled the dividend. HFBC was upgraded to an “A” back in May and still is a “strong buy” right now.

Top Penny Companies To Buy Right Now: Resource Capital Corp.(RSO)

Resource Capital Corp. operates as a specialty finance company that focuses primarily on commercial real estate and commercial finance in the United States. The company?s commercial real estate-related investments include first mortgage loans, first priority interests in first mortgage real estate loans, subordinate interests in first mortgage real estate loans, mezzanine loans, and commercial mortgage-backed securities. It also invests in commercial finance assets, including senior secured corporate loans, other asset-backed securities, equipment leases and notes, trust preferred securities, and debt tranches of collateralized debt and loan obligations. The company qualifies as a real estate investment trust (REIT) for federal income tax purposes. As a REIT, it is not subject to federal corporate income tax to the extent that it distributes 90% of its REIT taxable income. The company was founded in 2005 and is based in New York, New York.

Advisors' Opinion:
  • [By Wallace Witkowski]

    Shares of Resource Capital Corp. (RSO) �declined 3.8% to $5.82 in moderate volume after the real-estate investment trust said it would launch a $100 million offering in notes due 2018.

  • [By Eric Volkman]

    Resource Capital (NYSE: RSO  ) is dipping into its coffers for another shareholder payout. The company has declared a dividend for its current quarter of $0.20 per share, which is to be paid on July 26 to shareholders of record as of June 28. That amount matches each of the company's previous five distributions, the most recent of which was paid in late April. Before that, Resource Capital was more generous, dispensing $0.25 per share.

5 Best Casino Stocks To Watch For 2014: Comtech Telecommunications Corp.(CMTL)

Comtech Telecommunications Corp. engages in the design, development, production, and marketing of products, systems, and services for advanced communications solutions in the United States and internationally. It operates in three segments: Telecommunications Transmission, Mobile Data Communications, and RF Microwave Amplifiers. The Telecommunications Transmission segment provides satellite earth station equipment and systems, over-the-horizon microwave systems, and forward error correction technology, which are used in various commercial and government applications, including backhaul of wireless and cellular traffic, broadcasting (including HDTV), IP-based communications traffic, long distance telephony, and secure defense applications. The Mobile Data Communications segment provides mobile satellite transceivers, and computers and satellite earth station network gateways and associated installation, training, and maintenance services; supplies and operates satellite pac ket data networks, including arranging and providing satellite capacity; and offers microsatellites and related components. The RF Microwave Amplifiers segment designs, develops, manufactures, and markets satellite earth station traveling wave tube amplifiers (TWTA) and broadband amplifiers. Its amplifiers are used in broadcast and broadband satellite communication; defense applications, such as telecommunications systems and electronic warfare systems; and commercial applications comprising oncology treatment systems, as well as to amplify signals carrying voice, video, or data for air-to-satellite-to-ground communications. The company serves satellite systems integrators, wireless and other communication service providers, broadcasters, defense contractors, military, governments, and oil companies. Comtech markets its products through independent representatives and value-added resellers. The company was founded in 1967 and is headquartered in Melville, New York.

Advisors' Opinion:
  • [By Rich Smith]

    Maybe there's something to this whole "sequestration" phenomenon after all -- because for all intents and purposes -- and certainly in comparison with recent trends -- Department of Defense spending has come to a screeching halt in recent days. On Wednesday, for example, DoD issued a grand total of three new contracts, totaling a mere Pentagon pittance of just $44.4 million.

  • [By Marc Bastow]

    Advanced communications systems provider Comtech Telecomm (CMTL) raised its quarterly dividend 9.1% to 30 cents per share, payable on Feb. 19 to shareholders of record as of Jan. 17.
    CMTL Dividend Yield: 3.75%

  • [By Tim Melvin]

    Comtech Telecommunications (CMTL) is another company with a solid dividend whose shares trade at a decent price. The company makes advanced telecommunication products and sells to a wide range of users, including satellite systems integrators, wireless providers, broadcasters and defense contractors — as well as the U.S. government. The company has seen some weakness as military and government orders have slowed and the marketplace remains very competitive, but the long-term outlook is pretty strong. The company has been actively buying back stock and has spent almost $25 million in purchases in the past nine months. Comtech has more than enough cash on hand and very little debt, so the balance sheet is solid and the stock yields 4.5% right now. The company should be able to increase the dividend at a double-digit pace for the next several years at least.

Top Penny Companies To Buy Right Now: RAIT Financial Trust(RAS)

RAIT Financial Trust operates as a self-managed and self-advised real estate investment trust (REIT). The company, through its subsidiaries, invests in, manages, and services real estate-related assets with a focus on commercial real estate. It also offers a set of debt financing options to the commercial real estate industry along with fixed income trading and advisory services. In addition, RAIT Financial Trust owns and manages a portfolio of commercial real estate properties, and manages real estate-related assets for third parties. The company qualifies as a REIT for federal income tax purposes. As a REIT, it would not be subject to federal income tax to the extent that it distributes at least 90% of its taxable income to its shareholders. RAIT Investment Trust was founded in 1997 and is based in Philadelphia, Pennsylvania.

Advisors' Opinion:
  • [By Marc Bastow]

    Commercial real-estate loan originator and real estate investment trust RAIT Financial Trust (RAS) raised its quarterly dividend 6% to 17 cents per share, payable April 30 to shareholders of record as of April 4. At more than an 8% yield, RAS stock has the highest yield on this week’s list of dividend stocks.
    RAS Dividend Yield: 8.14%.

  • [By Thomas Sobon]

    Instead of expressing my thoughts in vague generalities, let me be specific and tell you what I am actually doing on a real time basis to cope with the market dynamics occurring right now: I have a core position in one stock, which is the RAIT Financial Trust (RAS). Its size is about 60% of what I would consider to be a "full" position. I also have a lot of cash that I intend to use for trading purposes. Last Friday I sold shares of RAS at $7.55 which I bought on Monday with a low-ball bid of $7.11, so my gain on the trade was 6.2%. In early trading yesterday (Monday July 1) RAS is priced at $7.67, up from where I sold on Friday. That's great news because I accomplished what I wanted to do with the trade and now paper profit on the core shares in my portfolio is increasing.

Top Penny Companies To Buy Right Now: Prospect Capital Corporation(PSEC)

Prospect Capital Corporation is a mezzanine finance and private equity firm that specializes in late venture, middle market, mature, mezzanine, buyouts, recapitalizations, growth capital, development, and bridge transactions. It makes secured debt and equity investments. The firm typically invests across all industry sectors, with a particular expertise in the energy and industrial sectors. It invests in oil and gas production, coal production, materials, industrials, consumer discretionary, information technology, utilities, pipeline, storage, power generation and distribution, renewable and clean energy, oilfield services, healthcare, food and beverage, education, business services, and other select sectors. The firm prefers to invest in the United States and Canada. It seeks to invest between $5 million to $50 million in companies with EBITDA between $$ million and $75 million, sales value up to $500 million, and enterprise value of up to $250 million. The firm also co- invests for larger deals. It seeks control acquisitions by providing multiple levels of the capital structure. Prospect Capital Corporation was founded in 1988 and is based in New York, New York.

Advisors' Opinion:
  • [By Grass Hopper]

    Examples of the first class of publicly ��raded private equity firms include Kohlberg Kravis Roberts & Co. L.P. (KKR), The Blackstone Group L.P. (BX), and Oaktree Capital Group, LLC (OAK). Examples of the second class are Wendel SA (MF FP), Exor SpA (EXO IM) and, to some extent, Reinet Investments SCA (REI SJ). Examples of the third class are American Capital, Ltd. (ACAS), Main Street Capital, Gladstone Capital Corp. (MAIN), and Prospect Capital Corp. (PSEC).

Top Penny Companies To Buy Right Now: Tenet Healthcare Corporation(THC)

Tenet Healthcare Corporation, an investor-owned health care services company, operates acute care hospitals and related health care facilities. The company?s general hospitals offer acute care services, operating and recovery rooms, radiology services, respiratory therapy services, clinical laboratories, and pharmacies. It also provides intensive care, critical care and/or coronary care units, physical therapy; and orthopedic, oncology, and outpatient services; tertiary care services, such as open-heart surgery, neonatal intensive care, and neuroscience; quaternary care in areas, including heart, liver, kidney, and bone marrow transplants for children; gamma-knife brain surgery; and cyberknife surgery for tumors and lesions in the brain, lung, neck, and spine. As of June 30, 2011, it operated 49 acute care hospitals, and a critical access hospital with a combined total of 13,420 licensed beds primarily serving urban and suburban communities in 11 states of the United State s. The company also owns an interest in a health maintenance organization and operate various related health care facilities, including a long-term acute care hospital and various medical office buildings; revenue cycle management and patient communications services businesses; physician practices; captive insurance companies; and other ancillary health care businesses, such as including ambulatory surgery centers, diagnostic imaging centers, and occupational and rural health care clinics. In addition, Tenet Healthcare Corporation owns an interest in a management services subsidiary that provides network development, utilization management, claims processing, and contract negotiation services to physician organizations and hospitals that assume managed care risk. Tenet Healthcare Corporation was founded in 1967 and is headquartered in Dallas, Texas.

Advisors' Opinion:
  • [By Sean Williams]

    The biggest concern for hospital operators is doubtful account provisions. These bad debt write-offs stem from patients who are uninsured and need treatment, but who are unable to pay the bill. Unlike insurers, hospital operators can't turn away patients in need of treatment, which means they can eat quite a bit of treatment revenue each year. HCA Holdings (NYSE: HCA  ) and Tenet Healthcare (NYSE: THC  ) , the two largest hospital operators in the U.S., know this all too well. In 2012, HCA wrote off nearly $3.8 billion in revenue because of patients' inability to pay, a tad more than 10% of its full-year revenue, while Tenet's doubtful account provision totaled $785 million, or nearly 8% of its total revenue. This doubtful account revenue is the main drag on hospital expansion.

  • [By Ben Levisohn]

    Tenet Healthcare (THC) has dropped 2.3% to $47.23 after the hospital operator missed earnings forecasts and offered lower-than-expected guidance.

    Haverty Furniture�(HVT) has gained 3.9% to $28.20 after the furniture retailer beat analyst forecasts.

  • [By Seth Jayson]

    Tenet Healthcare (NYSE: THC  ) reported earnings on April 30. Here are the numbers you need to know.

    The 10-second takeaway
    For the quarter ended March 31 (Q1), Tenet Healthcare missed slightly on revenues and beat expectations on earnings per share.

  • [By Travis Hoium]

    Tenet Healthcare (NYSE: THC  ) has agreed to pay $1.63 billion for Vanguard Health Systems (NYSE: VHS  ) , a 70% premium to Vanguard's close on Friday. The deal will diversify Tenet's offerings in acute care and specialty hospitals and give it a wider geographic reach as well. Tenet is up 8.4% in premarket trading, while Vanguard has skyrocketed 64%.�

Best Buy: On the Right Track?

The big picture investment thesis for this recommendation hinges on our belief that there is room in the market for a big box type brick-and-mortar consumer electronics store, says Tyler Laundon, editor of 100% Letter.

Best Buy (BBY) is the world's largest electronics chain. It's trying to compete on price, among other attributes. And its turnaround comes at a time when consumer electronics in the US had a tough year. But I think management is on the right track and is well positioned to grow the business over the coming year.

The company has cut more costs than expected. Its Renew Blue program called for $725 million in cuts. But, as of the end of the fiscal year, BBY delivered cuts of $765 million. Now, CEO Hubert Joly sees $1 billion as the next target.

Another bright spot was that comparable online sales were up by 25.8% to $1.57 billion in Q4. If we step back and look at the full year, online sales growth of 19.8% in 2013 is a big step in the right direction. And this comes on top of 11.4% online sales growth in 2012, with a really bad Web site.

While BBY's online sales are still well behind those of many competitors, it's important to realize the company has achieved this growth despite a still-antiquated Web site and fulfillment strategy.

Late in 2013, many improvements were in place, but rolling out an integrated online and in-store sales strategy isn't an overnight project and I expect we'll see continued improvement in the year ahead.

Is BBY's turnaround a sure thing? No, of course not. But it still appears to me to be intact, despite the rough comparable holiday sales and the subsequent stock crash.

Yes, the company has a lot of room to improve, both in store and online. But that's why this is a turnaround story, and not a growth story. The turnaround isn't yet complete. I see the next 12 months as a make-or-break period for the company.

As BBY rolls into 2014 with these improvements largely in place, their focus will be on getting customers to open their wallets.

At the current share price, investors should decide now if they believe BBY will be successful over the coming one-to-three years. I do, and I've opened my wallet and added more shares to my personal account. My advice is that you do the same.

Subscribe to 100% Letter here…

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Thursday, March 27, 2014

Hot Small Cap Stocks To Watch Right Now

We have recently added small cap video chip stock Pixelworks, Inc (NASDAQ: PXLW) to our SmallCap Network Elite Opportunity (SCN EO)�as it stands to benefit from the growth in connecting HD quality video across all mobile device platforms, as well as Smart TVs; but Silicon Image, Inc (NASDAQ: SIMG) and Sigma Designs, Inc (NASDAQ: SIGM) are also providing chips for the video or entertainment markets. Moreover, all three of these small cap stocks have recently reported earnings that might leave you feeling even more bullish.

What You Need to Know About�PXLW, SIMG and�SIGM

Here is what you need to know about all three small cap video chip stocks and their latest earnings reports:

Pixelworks, Inc.�A fabless semiconductor company, Pixelworks designs, develops and markets innovative video and pixel processing chips and software for high-end display applications, including digital projection, large screen LCD flat panels and digital signage. A week ago, Pixelworks reported a 15.5% sequential revenue increase to $9.6 million verses $15.5 million in revenue for the same period last year. The sequential increase was due to higher sales of chips for both Projectors and TVs while the decline was the result of lower licensing revenue during the second quarter. Nevertheless, the company CEO was quoted as saying:

��rowth resumed in the second quarter as order patterns improved, and we expect a significant increase in third quarter revenue driven by an improving environment, ramping of the PA168 advanced video processor and success in our licensing initiative. We are seeing outstanding demand for Pixelworks��Video Processing Technology, which is proving to be essential for delivering the highest video quality as resolution requirements increase across a growing number of displays.��/p>

Hot Small Cap Stocks To Watch Right Now: OCZ Technology Group Inc(OCZ)

OCZ Technology Group, Inc. designs, develops, manufactures, and distributes computer components for computing devices and systems worldwide. It primarily offers solid state drives, flash memory storage, memory modules, thermal management solutions, AC/DC switching power supply units, and computer gaming solutions. The company?s products are used in industrial equipment and computer systems; computer and computer gaming solutions; mission critical servers and high end workstations; personal computer (PC) upgrades to extend the useable life of existing PCs; high performance computing and scientific computing; video and music editing; home theatre PCs and digital home convergence products; and digital photography and digital image manipulation computers. OCZ Technology Group, Inc. offers its products to retailers, on-line retailers, original equipment manufacturers, systems integrators, and distributors. The company was founded in 2002 and is headquartered in San Jose, Califo rnia.

Advisors' Opinion:
  • [By Rich Duprey]

    The not-so-great and wonderful OCZ
    There was no company-specific news that caused solid-state-drive maker OCZ Technology (NASDAQ: OCZ  ) to fall almost 8% Wednesday. But an article that appeared on Seeking Alpha �questioning whether the company had six months or less to live before it filed for bankruptcy seemed to coincide with its fall.

Hot Small Cap Stocks To Watch Right Now: Hot Topic Inc.(HOTT)

Hot Topic, Inc., together with its subsidiaries, operates as a mall- and Web-based specialty retailer in the United States. The company operates Hot Topic and Torrid store concepts, as well as an e-space music discovery concept, ShockHound. Its Hot Topic stores sell music/pop culture-licensed merchandise, including tee shirts, hats, posters, stickers, patches, postcards, books, novelty accessories, CDs, and DVDs; and music/pop culture-influenced merchandise comprising women?s and men?s apparel and accessories, such as woven and knit tops, skirts, pants, shorts, jackets, shoes, costume jewelry, body jewelry, sunglasses, cosmetics, leather accessories, and gift items for young men and women primarily between the ages of 12 and 22. The company?s Torrid stores sells casual and dressy jeans and pants, fashion and novelty tops, sweaters, skirts, jackets, dresses, hosiery, shoes, intimate apparel, and fashion accessories for various lifestyles for plus-size females primarily betw een the ages of 15 and 29. As of July 30, 2011, it operated 636 Hot Topic stores in 50 states, Puerto Rico, and Canada; 145 Torrid stores; and Internet stores, hottopic.com and torrid.com. The company was founded in 1988 and is headquartered in City of Industry, California.

Advisors' Opinion:
  • [By Marshall Hargrave]

    In May True Religion (TRGL) announced a buyout offer from TowerBrook Capital for $826 million. Also in May, Rue21 decided to sell itself to Apax Partners for $2.2 billion. Before that, in March, Hot Topic (HOTT) announced that Sycamore Partners was buying out it out for $600 million.

Best Mid Cap Stocks To Own Right Now: OmniVision Technologies Inc.(OVTI)

OmniVision Technologies, Inc. designs, develops, and markets semiconductor image-sensor devices. The company offers CameraChip image sensors, which are single-chip solutions that integrate various functions, such as image capture, image processing, color processing, signal conversion, and output of a processed image or video stream for use in various consumer and commercial mass-market applications; and CameraCube imaging devices that are image sensors with integrated wafer-level optics. It also provides companion chips used to connect its image sensors to various interfaces, including the universal serial bus and other industry standard interfaces; and companion digital signal processors that perform compression in standardized still photo and digital video formats. In addition, the company designs and develops software drivers for Linux, Mac OS, and Microsoft Windows, as well as for embedded operating systems, such as Blackberry OS, Palm OS, Symbian, Windows CE, Windows Embedded, and Windows Mobile. Its products are used in mobile phones, notebooks, Webcams, digital still and video cameras, commercial and security and surveillance, and automotive and medical applications, as well as in entertainment devices. The company sells its products directly to original equipment manufacturers and value added resellers, as well as indirectly through distributors worldwide. OmniVision Technologies, Inc. was founded in 1995 and is based in Santa Clara, California.

Advisors' Opinion:
  • [By Evan Niu, CFA]

    STMicroelectronics (NYSE: STM  ) and OmniVision (NASDAQ: OVTI  ) are the two camera suppliers, and HTC is reportedly no longer considered a "tier one" manufacturer so it doesn't get priority any more. That implies that one of these image sensor specialists was giving HTC the cold shoulder in favor of bigger names.

  • [By Wallace Witkowski]

    Shares of OmniVision (OVTI) �fell 13% to $13.89 on heavy volume after the company said it expects adjusted fiscal third-quarter earnings of 28 cents to 44 cents a share on revenue of $310 million to $340 million. Analysts surveyed by FactSet expect earnings of 43 cents a share on revenue of $399.5 million.

  • [By Alex Planes]

    Investors love stocks that consistently beat the Street without getting ahead of their fundamentals and risking a meltdown. The best stocks offer sustainable market-beating gains, with robust and improving financial metrics that support strong price growth. Does OmniVision Technologies (NASDAQ: OVTI  ) fit the bill? Let's take a look at what its recent results tell us about its potential for future gains.

Hot Small Cap Stocks To Watch Right Now: ATA Inc.(ATAI)

ATA Inc., through its subsidiaries, provides computer-based testing services in the People?s Republic of China. It offers services for the creation and delivery of computer-based tests utilizing its test delivery platform, proprietary testing technologies, and testing services; and provides logistical support services relating to test administration. The company?s computer-based testing services are used for professional licensure and certification tests in various industries, including information technology (IT) services, banking, securities, teaching, and insurance. Its e-testing platform integrates various aspects of the test delivery process for computer-based tests ranging from test form compilation to test scoring, and results analysis. ATA also provides career-oriented educational services, such as single course programs, degree major course programs, and pre-occupational training programs focusing on preparing students to pass IT and other vocational certification tests; test preparation and training programs and services to test candidates preparing to take professional certification tests in securities, futures, banking, insurance and teaching industries; online test preparation and training platform for the securities and banking industries; and test preparation software for the teaching industry. In addition, the company offers HR select employee assessment solution, an online system that utilizes its proprietary software and an inventory of test titles to help employers improve the efficiency and accuracy of their employee recruitment process. As of March 31, 2010, it had contractual relationships with 1,988 ATA authorized test centers. The company serves Chinese governmental agencies, professional associations, IT vendors, and Chinese educational institutions, as well as individual test preparation services. ATA Inc. was founded in 1999 and is based in Beijing, the People?s Republic of China.

Advisors' Opinion:
  • [By Jake L'Ecuyer]

    Leading and Lagging Sectors
    Industrials stocks gained Friday, with ATA (NASDAQ: ATAI) leading advancers. Meanwhile, gainers in the sector included Plug Power (NASDAQ: PLUG), with shares up 22 percent, and Korn/Ferry International (KFY), with shares up 12 percent. In trading on Friday, basic materials shares were relative laggards, down on the day by about 1.36 percent.

  • [By Jake L'Ecuyer]

    Leading and Lagging Sectors
    Industrials stocks gained Friday, with ATA (NASDAQ: ATAI) leading advancers. Meanwhile, gainers in the sector included Plug Power (NASDAQ: PLUG), with shares up 22 percent, and Korn/Ferry International (KFY), with shares up 12 percent. In trading on Friday, basic materials shares were relative laggards, down on the day by about 1.36 percent.

Hot Small Cap Stocks To Watch Right Now: EZchip Semiconductor Limited(EZCH)

EZchip, a fabless semiconductor company, engages in the development and marketing of Ethernet network processors for networking equipment. Its products include network processor chips, evaluation boards and network-processor based systems, and development software toolkits. The company offers network processors for use in forming the silicon core of networking equipment, such as switches and routers; and for voice, video and data integration in various applications. Its network processors are single-chip solutions, which enable its customers to design multi-port line cards, such as processing and classification engines, traffic managers, media access controllers, as well as a range of specialized hardware blocks that accelerate various functions. The company offers Evaluation systems which enable customers to test NPU-based systems; and toolkits that assist customers in creating, verifying, and implementing solutions based on its network processors. It provides a library f eaturing data plane code for a range of applications, which include Metro Ethernet protocols, Multi-Protocol Label Switching, IPv4 and IPv6 routing, Access Control Lists, GPON/EPON OLT functionality, Network Address Translation, and Server Load Balancing. The company sells its products directly, and through contract manufacturers and distributors to network equipment vendors. It markets its products in Israel, China, Hong Kong, the Far East, Canada, the United States, and Europe. The company was formerly known as LanOptics Ltd. and changed its name to EZchip Semiconductor Ltd. in July 2008. EZchip Semiconductor Ltd. was founded in 1989 and is based in Yokneam, Israel.

Advisors' Opinion:
  • [By Jake L'Ecuyer]

    EZchip Semiconductor (NASDAQ: EZCH) was also up, gaining 7.16 percent to $24.11 after a Cisco (NASDAQ: CSCO) announced a new product that would not threaten the company as previously thought. Equities Trading DOWN
    Shares of Cypress Semiconductor (NASDAQ: CY) were down 16.05 percent to $9.91 after the company lowered its Q3 forecast.

  • [By Evan Niu, CFA]

    What: Shares of EZchip (NASDAQ: EZCH  ) have jumped today by as much as 13% after the company reported first-quarter earnings.

    So what: Revenue in the first quarter totaled $15.3 million, topping the Street's forecast of $15.1 million. Non-GAAP net income per share came in at $0.23, which was right on target with expectations.

Hot Small Cap Stocks To Watch Right Now: bebe stores inc.(BEBE)

bebe stores, inc. engages in the design, development, and production of women?s apparel and accessories. Its products include a range of separates, tops, dresses, active wear, and accessories in career, evening, casual, and active lifestyle categories. The company markets its products under the bebe, BEBE SPORT, bbsp, and 2b bebe brand names targeting 21 to 34-year-old woman. As of July 2, 2011, it operated 252 retail stores, and an online store at bebe.com in the United States, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Japan, and Canada, as well as 60 international licensee operated stores in south east Asia, the United Arab Emirates, Israel, Russia, Mexico, and Turkey. The company was founded in 1976 and is headquartered in Brisbane, California.

Advisors' Opinion:
  • [By Jeremy Bowman]

    What: Shares of Bebe Stores (NASDAQ: BEBE  ) were back in style today, gaining as much as 11% after receiving an upgrade from Janney Capital from Neutral to Buy.

  • [By CRWE]

    bebe stores, inc. (Nasdaq:BEBE) reported that its Board of Directors declared bebe�� quarterly cash dividend of $0.025 per share. The dividend is payable on December 4, 2012 to shareholders of record at the close of business on November 20, 2012

  • [By Rich Duprey]

    Women's fashion leader bebe (NASDAQ: BEBE  ) has a new face on its board of directors. The specialty retailer announced Monday it has named Narry Singh to join the board, noting his contributions in the world of digital entertainment.

Hot Small Cap Stocks To Watch Right Now: Texas Instruments Incorporated(TXN)

Texas Instruments Incorporated engages in the design and sale of semiconductors to electronics designers and manufacturers worldwide. The company?s Analog segment offers high-performance analog products comprising standard analog semiconductors, such as amplifiers, data converters, and interface semiconductors; high-volume analog and logic products; and power management semiconductors and line-powered systems. Its Embedded Processing segment includes DSPs that perform mathematical computations to process and enhance digital data; and microcontrollers, which are designed to control a set of specific tasks for electronic equipment. The company?s Wireless segment designs, manufactures, and sells application processors and connectivity products. Its Other segment offers smaller semiconductor products, which include DLP products that are primarily used in projectors to create high-definition images; and application-specific integrated circuits. This segment also provides handhe ld graphing and scientific calculators, as well as licenses technologies to other electronic companies. The company serves the communications, computing, industrial, consumer electronics, automotive, and education sectors. Texas Instruments Incorporated sells its products through a direct sales force, distributors, and third-party sales representatives. It has collaboration agreements with PLX Technology Inc.; Neonode, Inc.; and Ubiquisys Ltd. The company was founded in 1938 and is headquartered in Dallas, Texas.

Advisors' Opinion:
  • [By Tim Beyers]

    But investing is also a game best played in context. How does Intel stock compare to peers Advanced Micro Devices (NYSE: AMD  ) and Texas Instruments (NASDAQ: TXN  ) ? Here's what the numbers say:

  • [By Chuck Saletta]

    Speaking of results ...
    Right now, quarterly earnings season is well under way, which provides a perfect opportunity for one of those "check in from time to time" moments. While the iPIG portfolio did nothing last week, several of its picks did report, and those quarterly confessionals can help determine whether the companies are still worth owning. To summarize key results:

    United Technologies (NYSE: UTX  ) reported decent numbers, with net earnings ahead of expectations but growth driven more by acquisitions than by organic improvements in its existing businesses. Given the company's conglomerate setup, growth by bolt-on acquisitions isn't surprising, but over the long haul, it'd be better to see its businesses growing internally as well as through acquisitions. The news at Mine Safety Appliances (NYSE: MSA  ) wasn't quite as good, with both revenues and net earnings falling from year ago levels on a tough environment for the mining businesses it supports. That's a risk well known to the company and its shareholders, though, and while the weaker results did knock the company's stock down, the business has ridden through tough cycles before. It looks capable of riding through this one, too. Hasbro (NASDAQ: HAS  ) , on the other hand, reported earnings that beat expectations on an operating basis, before restructuring charges knocked it down to a net loss. Given that the company is in the very seasonal toy business, that loss in an off-peak quarter is much less of a concern than it would have been in the make-or-break holiday quarter. UPS (NYSE: UPS  ) kept on trucking, with a better-than-expected January and strength from eCommerce helping the company turn in an 8% growth in net reported earnings per share. Overall, UPS is operating efficiently, though its future success is tied to its ability to continue delivering more packages. As long as its e-commerce business continues to grow, though, UPS is wel

Financial advice is about more than just building portfolios

portfolio construction, asset management, cash flow, technology, middle class, mass affluent, gen-y

Technology has brought unprecedented change to our lives but it's only just begun to transform the financial advisory business. To date, most technology innovation in our industry has focused on lowering the cost and improving efficiencies of asset management. Yet there's another, tremendously exciting, trend just beginning to unfold — using technology as a powerful driver of business growth. The world will look very different by 2020 because of it.

There are 3.5 trillion dollars of untapped assets across 20 million mass affluent families not working with financial advisers. Unlocking it requires helping these households grow assets over time — through cash flow management across a client's full financial life.

It's not just Gen-Y and mass affluent households who stand to benefit. High net worth clients, too, can use state-of-the-art cash flow analytics to identify additional cash that can be directed toward an investment target or other financial goal and to lock in habits that can transform their lives for years to come.

Gilead Following Multiple Paths Toward HIV “Functional Cure”

The first researchers who tried to stop the AIDS epidemic in the 1980s were faced with a terrifying virus that invaded key cells of the immune system, forced them to make many copies of itself, and burst the cells open in the process, leaving the human host defenseless against an onslaught of HIV and other infections.

Looking back on that drive to find the first HIV drugs, the task seems relatively simple to Romas Geleziunas—at least, compared to the problem he's tackling now.

Geleziunas, director of clinical virology at Foster City, CA-based Gilead Sciences  (NASDAQ: GILD  ) is trying to thwart a second, more insidious way the HIV virus invades cells. Early in the course of infection, the virus inserts itself into the genome of immune system cells, but without either copying itself or killing the cell. The cell and the virus then wait together in a kind of slumber. But they can later awaken to unleash a new generation of infectious virus particles.

This reservoir of latently infected cells is now seen as the barrier standing in the way of a longed-for cure that could free HIV-positive individuals from a lifetime of taking the antiretroviral drugs developed by Gilead and other companies since the late 1980s. Those drugs protect uninfected cells, drive down blood levels of the virus, and stave off full-blown AIDS. But they don't eliminate the HIV reservoir, which appears to be complex and pretty mysterious.

"We don't fully understand what are the reservoirs that harbor HIV," Geleziunas says. "That makes the mission very, very tough."

Gilead, the world's largest maker of antiretroviral drugs, began its search for ways to eradicate the HIV virus from the body about five years ago, Geleziunas says. He's ready for the natural question that follows: Why would Gilead push hard to eliminate the need for its own HIV drugs, which bring in about $9 billion in annual revenue, and which can change a deadly disease into a chronic condition managed by a single daily pill?

Geleziunas says the answer is simple: the company knows that patients would rather be released from the need for any HIV medicines. Gilead is on the hunt for next-generation HIV therapies it can commercialize that would wipe out the virus—hopefully for good—after a limited time on treatment.  "We were one of the first companies into the field," he says.

The company doesn't use the freighted word "cure" to describe its goal. "We prefer to say we want to create a state of HIV remission that could be controlled without drugs," Geleziunas says.

Gilead has been exploring a range of different strategies to block the HIV virus from surging back after treatment, and has been lining up research partnerships that include other drug developers, academic researchers, and government agencies.

"We've created a hub for clinical and basic research," he says.

Gilead's efforts are part of a larger research mobilization that has been galvanized by recent reports about a few HIV-positive patients who have actually been able to stop their drug regimens—though they did this after treatments that might be difficult to extend to large numbers of patients. For example, the HIV-positive "Berlin patient," whose case was reported in March 2011 in the scientific journal Blood by a research team at Charite´-University Medicine Berlin, in Berlin Germany, received a bone marrow transplant for his leukemia from a donor who happened to be one of the rare individuals with a natural genetic immunity to HIV.

Even so, scientists pursuing a "functional cure" for HIV have been emboldened by the Berlin patient and other cases, says Dr. Warner Greene, director of the Gladstone Institute of Virology and Immunology in San Francisco.

"The anecdotal cases suggest that we're not tilting at windmills," says Greene, a top HIV expert.

Greene sees an urgent need for a cure. Patients taking long-term antiretroviral drug regimens are still vulnerable to the premature onset of diseases of aging. Across the globe, about 35 million people are infected with HIV. (About the same number have died.) The cost of maintaining patients on lifetime therapy is a significant burden even for developed countries, while the drugs are inaccessible to millions of infected people in Africa and other regions, Greene says.

"Sixteen million people are not receiving it, and they're dying," he says.

Greene points to gene therapy as one of the major strategies being pursued to achieve a functional cure. Richmond, CA-based Sangamo Biosciences recently showed progress in its drive to modify the genes of HIV- positive patients and replicate the immunity that the "Berlin patient" acquired from his bone marrow donor.

Greene says he values Sangamo's work, but he expects that most of the world's HIV-positive population won't be able to pay for Sangamo's multi-step procedure to modify the genes in blood cells of individual patients. To achieve global eradication of HIV, researchers will have to develop simpler treatments that can be scaled up for mass populations, Greene says.

That may mean devising a drug, or drug combination, that depletes the HIV reservoir in latently infected cells. And the task doesn't look easy so far, Greene says.

"It's a bigger, nastier problem than we thought," he says.

Scientists had optimistically predicted in the mid-1990s that the residual HIV virus would simply die out about two to three years after patients began taking effective antiretroviral drugs, Greene says. Those drugs prevent the virus from converting new host cells into virus-producing factories. Without a host, viral particles can exist for only a short time in the blood plasma, he says.

But starting in 1995, researchers discovered the presence of the latently infected cells called resting memory CD4+ T cells, a long-lived and self-renewing cell population that is also more numerous than scientists had expected, Greene said in an October review article in the journal Cell. One researcher estimated that it would take 73 years of antiretroviral therapy to exhaust the latent HIV reservoir.

If patients go off their HIV medicines, some of the reservoir cells switch into active mode and begin cranking out virus particles, which then infect a new round of unprotected blood cells.

But researchers are now wondering: What if the reservoir cells could be forced to switch into active mode while patients were still taking their antiretroviral drugs? Would the latently infected cells then die—as most blood cells do when they're forced to manufacture copies of the HIV virus? If so, the HIV reservoir might be exhausted without harming the patient. Greene and Gilead are both part of scientific consortia that are looking for drugs that can safely "shock" the reservoir cells into a reactivated state.

Gilead found such a drug, romidepsin (Istodax), by screening its own library of compounds, as well as all FDA-approved drugs. Romidepsin is a Celgene drug approved to treat a type of skin cancer, cutaneous T-cell lymphoma. But it can also activate cells latently infected with HIV.

Romidepsin will soon be used as a "test of concept" drug in a clinical trial sponsored by the National Institute of Allergy and Infectious Diseases (NIAID) and supported by Gilead, Celgene, and other partners, Geleziunas says. Investigators will dose HIV- positive participants with romidepsin while maintaining them on their antiretroviral medicines. Using a variety of different tests, the investigators will then measure how much of the HIV reservoir has been depleted.

Geleziunas doesn't expect this trial to yield a treatment, but the procedures developed could one day validate a future therapy. Romidepsin isn't the most powerful activator of latently infected cells—in lab studies, certain immune system stimulants are more potent. But romidepsin was chosen for the trial because it has a known safety profile as a drug already approved to treat human beings, Geleziunas says.

It's possible that several rounds of activation over time will be required to induce all the latently infected cells to transform into a mode that makes them more vulnerable to cell death than they are in their resting state, Geleziunas says. A multiple dose study with romidepsin is being planned.

But if activation alone is not enough to kill all the latently infected cells, another agent will have to be added to finish them off, Greene says. He estimates that the reservoir contains about a million cells.

"You've got to get every one of them," Greene says. This "shock and kill" tactic is being pursued by a research consortium Greene belongs to.

Again, any clinical trial of this tactic would be conducted with participants who continued taking their antiretroviral drugs. Trial investigators would be relying on these drugs to protect uninfected cells from the temporary surge of new HIV virus produced by the activation of latently infected cells.

Gilead already has a line on a drug that might play the "kill" role in a "shock and kill" regimen against the HIV cell reservoir, Geleziunas says. In preclinical research, the company has been studying the effects of an experimental immune modulation drug against viral infections. This agent helps mobilize two types of immune system cells that might destroy reactivated cells that have been harboring the HIV reservoir. The compound is believed to boost the action of a protein, toll-like receptor 7 or TLR7, which activates cytotoxic T-cells called CD8+ cells and NK or "natural killer" cells.

In further collaborations, Gilead is exploring two other possible HIV eradication strategies. The first draws on naturally occurring antibodies found in the blood of certain patients in Africa who have been called "elite neutralizers." Their protective antibodies are called "broadly neutralizing" because they work against a wide range of viral strains.

Copies of these monoclonal antibodies could be part of a new treatment, Geleziunas says. "We could combine this with antiretroviral drugs and hopefully achieve sustained viral suppression," Geleziunas says. If so, researchers could later try discontinuing the maintenance drugs, he says.

Gilead is also supporting studies of a vaccination method developed by Louis Picker at the Oregon Health & Science University. Picker's technology appears to train the immune system to patrol continuously for certain pathogens in a long-term "seek and destroy" campaign that might some day be useful against the latent HIV reservoir.

In preclinical studies, Picker created a vaccine for SIV, a virus similar to HIV that infects monkeys. He joined SIV to a sort of vaccine vehicle or vector—a virus called cytomegalovirus that commonly infects humans and usually doesn't cause disease. That vaccine, used as a preventive measure, protected half of a group of uninfected monkeys from SIV when they were exposed to the deadly simian immunodeficiency virus. Those monkeys produced virus, but their immune systems cleared it completely within three years.

"That is without precedent," Geleziunas says. Picker's group is trying to figure out why only half the monkeys benefited from the vaccine, and is also creating human cytomegalovirus vaccine vectors to carry the HIV virus for a potential vaccine for people. Picker co-founded a company, Portland, OR-based Tomegavax, to develop the technology.

Gilead is now participating in a collaboration with Picker, the Gates Foundation and other partners to figure out whether the SIV vaccine might be turned into a therapy or cure for monkeys already infected with SIV. In a study that has already begun, infected monkeys are treated with antiretroviral drugs, and then given the SIV-cytomegalovirus vaccine. After as much as a year, researchers will check to see whether the virus population rebounds when antiretroviral drugs are stopped. If the virus doesn't return, the same method might be tried in clinical trials to see if a similar HIV vaccine could wipe out the HIV cell reservoir in humans.

Geleziunas says Gilead's HIV eradication program includes a large group of well-supported scientists. They'll explore any type of therapy that works best, whether it's small molecules drugs, biologics, or vaccines, he says.

"We really don't care where it comes from," Geleziunas says. "We'll go where the science takes us."

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This article originally appeared on Xconomy, along with:

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