Editor's Note: Bill recommended this little security firm to his Private Briefing readers back in June, when shares traded for $6.10. They closed above $9 a share last week, but Bill thinks there's still a ton of upside here. And thanks to some analyst-induced selling yesterday, you can buy all this growth potential at an even better price...
Since we recommended Kratos Defense & Security Solutions Inc. (Nasdaq: KTOS) back on June 6, the stock has soared nearly 40%.
And we believe there's more to come.
A lot more.
Founded in 1994, the San Diego-based Kratos is a specialized security-technology company that provides products and services crucial to U.S. national security priorities.
That national security focus is borne out by the company's customer base, which includes the U.S. Army, U.S. Air Force, U.S. Navy, the National Aeronautics and Space Administration (NASA), the Defense Logistics Agency (DLA), and the U.S. Department of Homeland Security.
5 Best Logistics Stocks To Watch Right Now: United Natural Foods Inc.(UNFI)
United Natural Foods, Inc., together with its subsidiaries, distributes natural, organic, and specialty foods, as well as non-food products in the United States. It carries approximately 60,000 products, consisting of national brand, regional brand, private label, and master distribution products in 6 product categories: grocery and general merchandise, produce, perishables and frozen foods, nutritional supplements, bulk and food service products, and personal care items. The company serves approximately 17,000 customer locations primarily located across the United States, which include independently owned natural products retailers, supernatural chains, conventional supermarkets, and food service centers. Its other distribution channels include international mass market chains and buying clubs. The company also owns and operates natural products retail stores. As of August 1, 2009, it had 13 natural products retail stores located primarily in Florida. In addition, the com pany engages in the international importing, roasting, packaging, and distribution of nuts, seeds, dried fruits, and snack items. It sells these items in bulk in its own packaged snack lines, EXPRESSnacks, Woodfield Farms, and Woodstock Farms, as well as through private label packaging arrangements. The company was founded in 1978 and is headquartered in Providence, Rhode Island.
Advisors' Opinion:- [By Laura Brodbeck]
Notable earnings releases expected on Monday include:
United Natural Foods(NASDAQ: UNFI) is expected to report second quarter EPS of $0.56 on revenue of $1.64 billion, compared to last year�� EPS of $0.46 on revenue of $1.45 billion. Urban Outfitters(NASDAQ: URBN) is expected to report fourth quarter EPS of $0.55 on revenue of $928.43 million, compared to last year�� EPS of $0.56 on revenue of $856.83 million. Hill International(NYSE: HIL) is expected to report fourth quarter EPS of $0.01 on revenue of $134.74 million, compared to last year�� loss of $0.04 per share on revenue of $110.77 million.Economics
- [By Chris Hill]
The Fresh Market (NASDAQ: TFM ) gains 12% after announcing better-than-expected quarterly earnings. United Natural Foods (NASDAQ: UNFI ) falls 4% on declining profit margins and lowered guidance. Tesla Motors (NASDAQ: TSLA ) loses some electricity after its recent run-up. And Trina Solar (NYSE: TSL ) cools off on weaker-than-expected earnings. In this installment of Investor Beat, our analysts discuss four stocks making moves.
- [By Monica Gerson]
Analysts are expecting United Natural Foods (NASDAQ: UNFI) to have earned $0.56 per share on revenue of $1.64 billion in the second quarter. United Natural Foods shares gained 0.07% to close at $74.99 on Friday.
- [By GURUFOCUS]
Fair Value: In calculating fair value, I consider the NPV MMA Differential Fair Value along with these four calculations of fair value, see page 2 of the linked PDF for a detailed description:
1. Avg. High Yield Price
2. 20-Year DCF Price
3. Avg. P/E Price
4. Graham Number
SYY is trading at a premium to all four valuations above. The stock is trading at a 37.5% premium to its calculated fair value of $26.26. SYY did not earn any Stars in this section.
Dividend Analytical Data: In this section there are three possible Stars and three key metrics, see page 2 of the linked PDF for a detailed description:
1. Free Cash Flow Payout
2. Debt To Total Capital
3. Key Metrics
4. Dividend Growth Rate
5. Years of Div. Growth
6. Rolling 4-yr Div. > 15%
SYY earned two Stars in this section for 2.) and 3.) above. The stock earned a Star as a result of its most recent Debt to Total Capital being less than 45%. SYY earned a Star for having an acceptable score in at least two of the four Key Metrics measured. The company has paid a cash dividend to shareholders every year since 1970 and has increased its dividend payments for 43 consecutive years.
Dividend Income vs. MMA: Why would you assume the equity risk and invest in a dividend stock if you could earn a better return in a much less risky money market account (MMA) or Treasury bond? This section compares the earning ability of this stock with a high yield MMA. Two items are considered in this section, see page 2 of the linked PDF for a detailed description:
1. NPV MMA Diff.
2. Years to > MMA
The NPV MMA Diff. of the $282 is below the $500 target I look for in a stock that has increased dividends as long as SYY has. If SYY grows its dividend at 3.6% per year, it will take 3 years to equal a MMA yielding an estimated 20-year average rate of 3.41%. SYY earned a check for the Key Metric 'Years to >MMA' since its 3 years is le
5 Best Logistics Stocks To Watch Right Now: CST Brands Inc (CST)
CST Brands, Inc., incorporated on November 7, 2012 , is a retailer of transportation fuels and convenience goods in North America. As of April 30, 2013, the Company operated 1,032 Corner Stores throughout the United States, including Texas, Louisiana, Arkansas, Oklahoma, New Mexico, Colorado, Wyoming, Arizona and California. Its stores also provide prepared foods. In May 2013, the Company announced that the Company which includes Corner Store and Depanneur du Coin, spun off from Valero Energy Corporation.
The Company offers a range of products, such as snack foods, tobacco products, beverages and fresh foods, including its own brands: Fresh Choices sandwiches, salads and packaged goods; U Force energy drinks; Cibolo Mountain coffees (the United States); Transit Cafe coffee and bakery (Canada); FC bottled sodas, and Flavors 2 Go fountain sodas. Its Corner Store locations also provide in-store Subway sandwich shops.
Advisors' Opinion:- [By John Kell]
Valero Energy Corp.(VLO) said its fourth-quarter profit rose 28% as the oil refiner got a boost from the spinoff of gas-station retailer CST Brands Inc.(CST) Results easily topped estimates.
- [By Roberto Pedone]
Another potential earnings short-squeeze trade is CST Brands (CST), a retailer of transportation fuels and convenience goods in North America, which is set to release its numbers Tuesday before the market open. Wall Street analysts, on average, expect CST Brands to report revenue of $3.19 billion.
The current short interest as a percentage of the float for CST Brands is very high at 19.4%. That means that out of the 55.66 million shares in the tradable float, 11.75 million shares are sold short by the bears. If the bulls get the earnings news they're looking for, then this stock could easily rip substantially higher post-earnings as the bears rush to cover some of their bets.
From a technical perspective, CST is currently trending above its 50-day moving average, which is bullish. This stock has been trending sideways for the last three months, with shares moving between $30.31 on the downside and $33.96 on the upside. A high-volume move above the upper-end of its recent range could trigger a major breakout trade for shares of CST post-earnings.
If you're in the bull camp on CST, then I would wait until after its report and look for long-biased trades if this stock manages to break out above some near-term overhead resistance levels at $32.99 to its all-time high at $33.96 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 1.29 million shares. If that breakout hits, then CST will set up to enter new all-time high territory, which is bullish technical price action. Some possible upside targets off that breakout are $40 to $45 a share.
I would simply avoid CST or look for short-biased trades if after earnings it fails to trigger that breakout and then drops back below its 50-day moving average of $32.12 a share with high volume. If we get that move, then CST will set up to re-test or possibly take out its next major support levels at $31.06 to $30.31 a share. Any high-vol
- [By David Sterman]
3. CST Brands (NYSE: CST) The gas station operator was spun away from parent Valero Energy (NYSE: VLO) in May, and though shares eventually moved up above $33, they've been backsliding recently. A company director thought he spotted value by the time shares fell to $31.55 a share (where he picked up $142,000 in stock). But shares have continued to fall below $30.CST's newly independent management team aims to spruce up the company's 1,900 gas stations. It has the resources to make that happen: Valero left CST with more than $400 million in cash to work with.
Hot Insurance Stocks To Buy Right Now: Demand Media Inc. (DMD)
Demand Media, Inc. operates as an Internet media and domain services company worldwide. The company focuses on an Internet-based model for the professional creation and distribution of content at scale. It offers content and media, and registrar services. The company�s content and media services include creating media content primarily consisting of text articles and videos, and delivering together with its social media and monetization tools to the company's owned and operated Websites and mobile applications, and network of customer Websites and their mobile applications to publishers, brands, and retailers. Its content and media services are delivered through the company's content and media platform, which includes its content creation studio, social media applications, and a system of monetization tools designed to match content with advertisements. The company deploys its content and media platform to it�s owned and operated Websites, such as eHow.com, LIVESTRONG.CO M, and Cracked.com, as well as to Websites operated by its customers. Its registrar service offering provides domain name registration and related value added services, such as third-party Website security services, identification protection services, Web hosting plans, customizable email accounts, and business listing services to resellers, including small businesses, e-commerce Websites, Internet service providers, Web-hosting companies, and retail consumers. Demand Media, Inc. was founded in 2006 and is headquartered in Santa Monica, California.
Advisors' Opinion:- [By Roberto Pedone]
One under-$10 Internet services player that's starting to move within range of triggering a near-term breakout trade is Demand Media (DMD), which focuses on an Internet-based model for the professional creation and distribution of content at scale. This stock has been hit hard by the bears so far in 2013, with shares off by 44%.
If you take a look at the chart for Demand Media, you'll notice that this stock has recently formed a triple bottom over the last month, with shares finding buying interest at $4.80, $4.72 and $4.88 a share. Shares of DMD have now started to spike higher off those support levels, and the stock is quickly moving within range of triggering a near-term breakout trade.
Traders should now look for long-biased trades in DMD if it manages to break out above some near-term overhead resistance levels at $5.39 to $5.46 and then once it takes out its 50-day moving average at $5.76 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average action of 681,665 shares. If that breakout hits soon, then DMD will set up to re-test or possibly take out its next major overhead resistance levels at $6.50 to $7 a share. Any high-volume move above $7.14 would then give DMD a chance to re-fill some of its previous gap down zone from June that started near $8.50 a share.
Traders can look to buy DMD off any weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support levels at $4.88 or at $4.72 a share. One can also buy DMD off strength once it clears those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.
- [By Wallace Witkowski]
Demand Media Inc. (DMD) �shares declined 0.3% to $5.84 in light volume after the company said it had accepted the resignation of its chief executive, Richard Rosenblatt, effective Oct. 31.
5 Best Logistics Stocks To Watch Right Now: PIMCO Strategic Income Fund, Inc (RCS)
PIMCO Strategic Global Government Fund, Inc. (the Fund) is a closed-end bond fund. The Fund invests primarily in a portfolio of investment grade fixed-income securities of the United States and other countries. The Fund invests, under normal circumstances, at least 80% of its net assets plus borrowings for investment purposes in government securities, which include bonds issued or guaranteed by the United States or foreign governments, by their agencies, authorities or instrumentalities, or by supranational entities, and synthetic instruments.
Government securities also include mortgage-backed securities issued or guaranteed by certain United States Government agencies and government-sponsored enterprises, including Federal Home Loan Mortgage Corporation (Freddie Mac), Federal National Mortgage Association (Fannie Mae) and Government National Mortgage Association (Ginnie Mae), which may or may not be backed by the full faith and credit of the United States Government. The Fund also invests up to 20% of its total assets in non-investment grade securities regardless of the issuer, including corporate, mortgage-backed and asset-backed securities. Pacific Investment Management Company LLC is the Fund's investment adviser.
Advisors' Opinion:- [By Keith Fitz-Gerald]
I like the PIMCO Strategic Global Government Fund. The ticker is (RCS). The reason I like that, is it pays a hefty income; it's a bet on increased stability through further quantitative easing.
- [By Keith Fitz-Gerald]
1. For the near term, try the Pimco Strategic Global Government Fund (NYSE: RCS).
Managed by Allianz Global Investors Fund Management LLC, the fund is constructed of intermediate-term, high-quality government securities. The fund can invest in mortgage-related and asset-backed securities, too, if managers so desire. It's also got the flexibility to pick up foreign paper.
5 Best Logistics Stocks To Watch Right Now: KCG Holdings Inc (KCG)
KCG Holdings, Inc., incorporated on December 26, 2012, is an independent securities firm. The Company offers investors a range of services designed to address trading needs across asset classes, product types and time zones. It has three operating segments: Market Making, Global Execution Services, and Corporate and Other. On July 1, 2013, the Company announced the completion of the merger whereby Knight Capital Group, Inc. (Knight) and GETCO Holding Company, LLC (GETCO) were combined as part of KCG Holdings, Inc., a new holding company.
Market Making
The Company�� Market Making segment principally consists of market making in global equities and listed domestic options. As a market maker, the Company commits capital for trade executions by offering to buy securities from, or sell securities to, institutions and broker-dealers. The Market Making segment primarily includes client, and to a lesser extent, non-client market making activities in which the Company operates as a market maker in equity securities quoted and traded on the Nasdaq Stock Market; the over-the-counter (OTC) market for New York Stock Exchange (NYSE), NYSE Amex Equities (NYSE Amex), NYSE Arca listed securities, and several European exchanges. As a complement to electronic market making, the Company�� cash trading business handles specialized orders and also transacts on the OTC Bulletin Board, marketplaces operated by the OTC Markets Group Inc. and the Alternative Investment Market (AIM) of the London Stock Exchange. The segment also provides trade executions as an equities Designated Market Maker (DMM) on the NYSE and NYSE Amex. The Market Making segment also includes the Company�� option market making business which trades on all domestic electronic exchanges.
Global Execution Services
The Company�� Global Execution Services segment offers access through its electronic agency-based platforms to markets and self-directed trading in equities, options, fixed income, foreign ! exchange and futures. The Global Execution Services segment generally does not act as a principal to transactions that are executed within this segment however, it will commit capital on behalf of clients, as needed, and generally earns commissions for acting as agent between the principals to the trade. Global Execution Services includes equity sales and trading (including exchange traded funds (ETFs)), reverse mortgage origination and securitization and asset management. This segment also facilitates client orders through program, block, and riskless principal trades and provides capital markets services, including equity offerings, as well as private placements. The Global Execution Services segment also includes the futures commission merchant (FCM) business, which consists of certain assets and liabilities that the Company acquired or assumed from the futures division of Penson Financial Services, Inc.
Corporate and Other
The Corporate and Other segment invests in strategic financial services-oriented opportunities, allocates, deploys and monitors all capital, and maintains corporate overhead expenses and all other income and expenses that are not attributable to the other segments. The Corporate and Other segment houses functions that support the Company�� other segments, such as self-clearing services, including stock lending activities.
The Company competes with BGC Partners (BGCP), Chicago Board Options Exchange (CBOE), CME (CME), GFI Group Inc. (GFIG), ICE (ICE), ITG (ITG), Forex Capital Markets (FXCM), MarketAxess (MKTX), National Association of Securities Dealers Automated Quotations (NASDAQ), and NYSE.
Advisors' Opinion:- [By Sam Mamudi]
Knight, which in July joined with Getco LLC to form KCG Holdings Inc. (KCG) after losing more than $460 million because of the error, agreed to settle charges stemming from mistakes made on Aug. 1, 2012, according to a statement today from the U.S. Securities and Exchange Commission. The regulator said Knight violated the SEC�� market access rule, instituted in 2010 to prevent these kinds of trading missteps.
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