Don't worry about Ford's earnings miss

Late last month, Ford Motor Company (ticker: F) reported Q1 adjusted EPS of $0.25, which missed the average analyst estimate of $0.31. This followed up on Ford's guidance (provided late last year) for a profit decline in 2014.

That said, For

d's Q1 performance was a lot better than its earnings showed. This allowed Ford to maintain its full-year guidance for pre-tax profit of $7-$8 billion. Moreover, Ford's multiple key product launches in 2014 will put it in position to produce record earnings in 2015.

Areas of strength

While Ford's overall earnings performance fell short of expectations, the company posted very good results in two key regions: Europe and Asia-Pacific. In Europe, sales volume grew 11%, and revenue grew 18% thanks to a rebound in the auto market and favorable currency fluctuations. This helped Ford reduce its pre-tax loss in Europe from $425 million to $194 million.

Most importantly, Ford is slowly regaining market share in Europe. This, combined with the company's plans to close its underutilized factory in Genk, Belgium, at the end of 2014, puts it in on track to return to profitability in Europe next year.

Meanwhile, Ford posted a $291 million profit in the Asia-Pacific region last quarter, whereas it lost money in Q1 2013. This represented an outstanding 11.1% operating margin.

Ford's strong performance in the Asia-Pacific region was mainly attributable to its surging market share in China. In China, Ford's wholesale volume climbed 45% last quarter, driven by continued strength in the compact car segment and a strong line-up of crossovers and SUVs.

CFO Bob Shanks warned that Asia-Pacific profits would not be quite so high for the rest of the year. The company is opening new factories in the region later this year, and those will bring start-up costs that did not exist in Q1. However, looking ahead a few years, the Asia-Pacific region will become a major contributor to Ford's overall profitability.

The two big headwinds

Ford ! faced two major headwinds last quarter that more than offset the improvements in Europe and Asia-Pacific. First, in North America, Ford increased its warranty reserves by about $400 million. This was a non-cash charge based on a change in Ford's estimates of the likelihood and cost of future recalls.

While the warranty reserve accrual was not exactly a one-time charge, Ford executives noted that the size of the accrual was unusually large. If Ford's cars require fewer recalls in the next several years, some or all of this amount could be reversed.

Second, Ford recorded a $400 million charge last quarter to reflect the change in the value of its balance sheet caused by currency devaluations in South America, primarily in Venezuela. These two unusual factors (along with a smaller headwind from extreme weather in North America) reduced Ford's pre-tax profit by about $900 million. Without these headwinds, Ford's earnings would have grown year over year.

Foolish final thoughts

Ford has certainly lost some momentum in North America this year because of more aggressive pricing and new product launches by some of its rivals. However, by and large, it is in good shape considering where it is in the product cycle: Ford plans to launch 16 new vehicles in North America in 2014, compared to just five last year.

The launch of the 2015 Ford F-150 later this year will be particularly critical for returning Ford to profit growth in North America. The new F-150 is expected to offer a big improvement in fuel economy because of its higher use of lightweight aluminum, which could potentially allow Ford to increase its already-strong pickup profit margin.

A rebound in Ford's profitability in North America -- combined with its growing momentum in Europe and Asia -- will position the company for strong profit growth next year. Patient investors will be the beneficiaries.

The Motley Fool is a USA TODAY content partner offering financial news, analysis and commentary designed to help peo! ple take ! control of their financial lives. Its content is produced independently of USA TODAY.

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Finra gets arbitration process back on track in Puerto Rico

Finra has expanded its pool of arbitrators and is ready to move forward with the hundreds of complaints related to collapses in Puerto Rico bond funds, according to an announcement posted on its web site Monday.

After several months of deliberation, Finra said it will resume processing investor complaints now that it has about 700 arbitrators from Southeastern U.S. and Texas who are willing to fly to Puerto Rico.

The Financial Industry Regulatory Authority Inc. has also resolved issues related to the language barrier as UBS AG and Bank of America Merrill Lynch agreed to pay fees for translators.

“I'm confident that we will have enough arbitrators and enough staff that we will be able to process those that go forward,” said Linda Fienberg, the president of dispute resolution at Finra.

(See also: Finra freezes new arbitration cases in Puerto Rico)

Finra, which had received around 200 complaints from investors, had stopped assigning arbitrators to new cases and was trying to determine how it would address a number of challenges, including the language barrier and the fact that there were only nine arbitrators in Puerto Rico.

One month ago, the regulator said it had heard from only 60 arbitrators on the mainland who said they would be open to flying to Puerto Rico to hear

'My girlfriend is a tax break'

Wes Fusco claimed his girlfriend as a dependent and received a tax break of more than $3,000.

NEW YORK (CNNMoney) If you're in a relationship with someone who is dependent on you financially, you might be able to claim them as a tax break.

Wes Fusco, a 35-year-old from Manitowoc, Wisc., had been financially supporting his girlfriend, Danielle Wissbroeker, for more than 10 years. While she took care of their three children and earned no income, Fusco paid the bills and covered her expenses.

But Fusco had no idea that this situation would translate into a tax break until his tax preparer told him that claiming Wissbroeker as a dependent could cut his tax bill by thousands of dollars.

His tax preparer, enrolled agent Don Wollersheim, was right. Girlfriends -- and boyfriends -- can qualify as dependents as long as certain requirements are met.

First, your significant other must earn less than $3,900 per year and live with you throughout the year. You must also pay for more than half of their expenses and they can't be claimed as a dependent by someone else.

If they meet those criteria, then claiming them as a dependent will result in an exemption of up to $3,900. Fusco said he qualified for the full exemption and that this tax break, along with being able to claim his children as dependents, allowed him to receive a refund of more than $8,000 each year for the 10 years he supported his girlfriend.

Fusco and Wissbroeker broke up last May, so this will be the first time in a decade that he can't claim her as a dependent.

One Orlando, Fla., woman used this same strategy, claiming her unemployed boyfriend as a dependent after supporting him for years while he hunted for a job. She also received the full $3,900 exemption.

But these situations are rare. It's typically difficult for a couple to qualify for this deduction because of all the requirements that need to be met -- especially the low-income threshold.

"There aren't a lot of people who really don't make [under $3,900]," said Harlan Levinson, a CPA in Los Angeles.

  Don't give Uncle Sam a 0% loan

It's not meant to be claimed by the ultra-rich either: the exemption begins phasing out if you earn more than $250,000 per year.

Lisa Skidmore Sexton, an enrolled agent at Accu-Rite Tax & Accounting in Carlsbad, N.M., said she prepares around 300 tax returns per year and that only one or two of those are for couples where one person can be claimed as a dependent -- typically because they stay at home with the children or are out of work.

This year, she prepared taxes for someone claiming his girlfriend as a dependent. The client works at an oil company and his girlfriend stays home with their three kids and only works small temporary jobs -- earning about $3,800 last year.

7 most common tax mistakes

Same-sex couples have been employing this strategy for years. Before the Defense of Marriage Act was overturned last year, same-sex couples weren't able to file jointly at the federal level because they weren't recognized as married. So one person would claim the other as a dependent if he or she stayed home with the children and earned no income, said Nanette Lee Miller, head of the LGBT practice at accounting firm Marcum LLP.

Now that married same-sex couples are recognized by the federal government, however, they no longer qualify for the deduction. But if they're not married, the same exemption can be taken -- unless the relationship violates state law.

Enrolled agent Bill Nemeth said he claimed this exemption for an unmarried same-sex couple in Georgia, where one of the men was earning under the $3,900 threshold. Prior to 2004, however, he wasn't able to claim the boyfriend as a dependent because it was against state law for unmarried people in a sexual relationship to live together.

To find out if your significant other qualifies as a tax break, you can use this tool at the IRS website.

IRS customer service: From bad to worse

When clients come to Bill Nemeth, they have one wish: Please make it go away. "It," in this case, is a problem with the Internal Revenue Service.

Nemeth makes his living representing people before the IRS: He's an enrolled agent, the highest credential the IRS awards. He helps makes nasty tax things — fines, penalties, liens — go away. He's on the phone with the IRS every day. But these days, he's mostly on hold. "I was on hold for an hour and a half last night," he says.

And Nemeth gets to use the practitioner priority line, which puts him ahead of regular taxpayers who just want to know what form they have to file for reporting a capital gain from a stock loss. (That would be Schedule D.) Nemeth says his wait time used to be 15 minutes or so. Now it's often more than an hour.

For the average taxpayer, the waits are long and often futile: 39% of those who called the IRS last year simply hung up before their call was answered, according to a scathing recent report by the IRS Taxpayer Advocate, whose job is to take the taxpayer's side at the IRS. (The IRS typically responds to the report at midyear.) And it's only going to get worse. "Given our very limited resources, phone lines will be very busy, and there will frequently be extensive wait times," IRS Commissioner John Koskinen said on the agency's official YouTube video about the 2013 tax year.

STORY: IRS has already issued $64.5 billion in refunds

And as much as people love to hate the IRS, the agency's problems become taxpayer's problems. Poor customer service means that many more people will pay someone else to do their taxes, which simply becomes another cost of dealing with the federal government. And for some people, the IRS's woes mean that basic mistakes in filing could ultimately become big costs that involve fines, penalties, liens — and hiring people like Bill Nemeth.

IRS customer service has been struggling for the past three years, and the cause is fairly simple: Congress has consistently cut its! budget. "Congress doesn't like the IRS," Nemeth says, and Congress is unlikely to get much blowback when it cuts the not exactly beloved agency's budget. While the president requested $340 million in funding for the IRS because of the Affordable Care Act, none of that was funded by Congress. But the IRS has to do what the law requires it to do, Koskinen says. "If other things don't get done, that's what we'll do."

Even without the ACA funding, the cuts have been severe. In the government's budget year 2012, the IRS allotted $172 million to training its customer service representatives, according to the IRS Taxpayer Advocate. The IRS now has $22 million to train those same people — an 87% drop.

IRS funding

IRS funding has dropped 7.6% over the past 5 years:

Sponsored by Funding (billions)YearSource: IRSNOTE: 2013 total includes sequester.

At the same time, the IRS lost 8,000 employees between 2010 and 2012, says Edward Jenkins, tax director at CBIZ MHM, an accounting firm in Plymouth Meeting in suburban Philadelphia, Some of that is because of the aging of the IRS workforce, Jenkins says . In the government's fiscal year 2017, 70% of IRS executives and half of non-executives will be ready to retire, he says.

And tight budgets mean that it's hard to keep good employees, particularly when they can work for better pay at CPA firms elsewhere. "You're seeing very few pay raises, which makes it not exactly a great place to work," Jenkins says.

Fewer workers and less training mean the IRS is less able to help taxpayers, particularly the elderly and disabled. Ten years ago, according to the IRS, the agency prepared 476,000 tax returns for those taxpayers. It will do none in the 2013 tax filing season, the Advocate's report says. And, says IRS Commissioner Koskinen, "Our employees would be delighted to provide better services. We have town hall meetings where they can ask anything. The common theme is that there are not enough people to get the work done."

Taxpayers looking for answers on tax law will have to look elsewhere, the IRS says. It will only answer basic tax questions this year, and that's assuming taxpayers can get through. Last year, the IRS could only answer questions from 61% of callers, down from 87% ten years earlier. And don't be surprised if you hear recorded messages suggesting you find your answers elsewhere. "You can expect more and more gentle shoves to the IRS Web page," Jenkins says.

Automation is a good solution for many taxpayers, Koskinen says. Instead of calling the IRS to find out when their refund is coming, they can now find out online. And this year, you can get your previous filings from the IRS online. "The online system is better than it used to be," Koskinen says. "But you're still going to end up ! with 15 to 20 million calls unanswered this year."

For some of those callers, the lack of IRS help means getting deeper into trouble. IRS problems typically begin with a letter from the agency, one that is often ominous and difficult to understand. "The letters are not written for civilians," Nemeth says. Taxpayers who can't get the IRS to explain the agency have to call for help from people like Nemeth. "We explain to taxpayers what the IRS is saying, and how angry the IRS is."

Making matters more difficult: The IRS is behind in dealing with responses to its own letters as well. "The IRS sends you a notice about an issue on your tax return, you respond, and they send a letter saying they will respond in 45 days," says Jeffrey Porter, chairman of the American Institute of Certified Public Accountants' tax executive committee.

All well and good. But at the same time, the IRS computers are spitting out letters threatening to place levies on your accounts, which you also have to respond to. "It gets to be this mad cycle that gets very challenging," Porter says. And for preparers like Porter, time on hold really isn't billable — it's just a waste of time.

What's more, the U.S. tax code gets more complicated each year. "More complexity, less service, less help — it seems like a prescription for disaster," Porter says. So far this year, the IRS has delayed putting out forms for residential energy credits, passive activity loss limitations, qualified adoption expenses and others — all of which means delayed refunds for taxpayers.

To make matters worse, the IRS uses 22 different information systems that don't talk to each other, Jenkins says. Congress has not given the IRS the money it needs to update and modernize its systems, some of which still use the now-antique DOS system.

Making the tax process more onerous isn't good for anyone, except those who get paid to do other peoples' taxes. And it's particularly bad for taxpayers. Currently, the IRS collects $255 for e! very $1 i! t receives in its budget. "If the chief executive officer of a Fortune 500 company were told that each dollar allocated to his company's Accounts Receivable Department would generate multiple dollars in return," the Taxpayer Advocate's report says, "it is difficult to see how the CEO would keep his job if he chose not to provide the department with the funding it needed. Yet that is essentially what has been happening with respect to IRS funding for years."

Its voluntary compliance rate is about 83%, meaning that about 17% of tax revenue that should have been collected wasn't. In 2006, that was $450 billion — enough to build 10 Nimitz-class aircraft carriers.

Some of that $450 billion is, of course, willful tax evasion. (Nearly 5,000 of the jobs lost from the IRS have been in front-line tax enforcement, according to the inspector general of tax administration, J. Russell George.) But another part is simply unintentional errors by taxpayers — mistakes that could be offset by better IRS customer service. "If the IRS can help taxpayers correctly comply with law, it will have a direct impact on the revenue it collects," Porter says.

But don't hold your breath. As tax season hits its stride, the IRS is already warning taxpayers not to call. "The IRS reminds taxpayers the Presidents Day holiday period typically marks one of the busiest weeks of the tax filing season for its phone lines," the statement said. Their advice: Go to the website, instead.

Centor Energy is Locked and Loaded (CNTO, CPG, QEC)

Well, that answers that question. Questerre Energy Corp. (TSE:QEC) and Crescent Point Energy Corp. (TSE:CPG) likely knew they had some shale-oil mining neighbors in the Bakken Shale neighborhood in Saskatchewan, Canada, but they hadn't seen much of that competition. That's about to change soon. Adequately funded and eager to begin laying its final mining plans, Centor Energy Inc. (OTCBB:CNTO) is going to officially own 55% of a 21,000 acre shale oil property that's anywhere from just a few miles away to just a few meters away from and Crescent Point Energy's and Questerre Energy's operations in one of the oil-richest known areas in the Bakken formation. And to be clear, it's not like Centor Energy is just getting the ball rolling; the planning for this project has been underway for months. Once the property-acquisition deal is inked in mid-February, CNTO will likely finish up its feasibility study and begin the approval process for its facility later in the year. That's pretty quick, but as was noted, a great deal of the legwork has already been done.

First things first. For those not familiar with it, CNTO is a junior oil and gas explorer. Its attention was recently turned to the Saskatchewan area, where the aforementioned Questerre Energy Corp. and Crescent Point Energy Corp. along with several other shale miners have been working diligently to maximize the region's full oil potential for a few years now. There's still plenty of opportunity left for a newcomer though, and Centor Energy has the numbers to back the idea up. The most important of those numbers: 1.1 billion. That's the number of barrels of oil Chapman Petroleum Engineering said was apt to be waiting to be extracted in its December-2013 evaluation report. At $100 per barrel, that's a little more than $100 billion worth of oil underneath the 21,000 acre property that CNTO will officially own a lease on as of February 16th. Eat your heart out QEC and CPG shareholders.

As impressive as the amount of oil apt to be squeezed between the property's sub-surface rocks, what's even more impressive is how easy most of that oil will be to get to. Not that it's just jumping out of the ground and into barrels waiting nearby, but at some points, Chapman believes oil could be as close as ten feet from the surface. Equally encouraging is that Centor Energy Inc. won't have to fight and scrap for every single drop of oil it extracts from the shale underground at this Pasquia Hills property. The same Chapman report (report 51-101, by the way, for those wanting the details) also believes the oil shale is about 75 feet thick in a lot of places, meaning the company can start one dig, and simply keep pushing lower in that same spot for a long while. It's more efficient than hunting and pecking for the biggest deposits, which means Centor will be able to spend less than neighbors like Questerre Energy Corp. or Crescent Point Energy Corp. to go into production.... $100 million less, according to some estimates.

So what's the big question that was answered today? In simplest terms, CNTO got the funding it needed to go ahead and sign the long-term lease that gives the company a 55% share of the property's output for years to come. It was only a $1.25 million loan, but it doesn't even need all of that to enter the land agreement. Some of that money is going to be used to continue laying out the drilling plan stemming from the feasibility study. Centor Energy can put some more serious boots on the ground and start drilling test holes and taking more samples as early as March 7th.

Bottom line? Centor has put the wheels in motion. There's no going back now, and there's no need to. From here, any good news can me taken at face value... as a sign of the march towards production.

For more on Centor Energy, visit the company website here, or review the SCN research report here.

Could Everybody Begins to Love Big Banks Again in 2014?

The Dow Jones Industrial Average (DJINDICES: ^DJI  ) has been on a roller coaster so far today, starting high and then tumbling 40 points after some unexpectedly dour economic data. Big banks started out great, with both Dow heavyweight Goldman Sachs (NYSE: GS  ) and JPMorgan Chase (NYSE: JPM  ) up well above 1% by late morning. Both stayed green after the Dow dip, perhaps buoyed by the possibility that 2014 may be the year big banks get their groove back.

The U.S. Congress has two major matters on the docket today. One is the long-awaited confirmation of Janet Yellen as the new Federal Reserve chair, replacing departing chief Ben Bernanke. Senate Democrats are also moving to reinstate emergency extended unemployment benefits for 1.3 million people, after the program lapsed on Dec. 27. The program, in place since 2008, may be difficult to renew in the face of heavy Republican opposition.

Markets received some mixed economic news as well. The Census Bureau noted that factory orders were up 1.8% in November, the highest ever recorded, and beating estimates of 1.6%. However, the Institute for Supply Management's Nonmanufacturing Business Survey registered a value of 53 for December, down from November's 53.9 and far from the consensus of 54.8.

Not coincidentally, perhaps, the Dow stumbled badly shortly after this report -- losing all its former gains and delving deep into the red.

Big banks still shiny
Big bank stocks also dipped a bit, but continue to stay positive just before noon EST. Helping, perhaps, was a weekend piece in The Wall Street Journal noting that markets are expecting big banks to soar this year, right along with a brightening economy.

Goldman Sachs was given a boost earlier today by analysts at Susquehanna, who identified the firm as worthy of a raised price target of $206 in a note to investors.

JPMorgan's own shareholders may be sighing with relief over the bank's settlement of a huge legal problem, that of its involvement with scammer Bernie Madoff. The New York Times reported that the bank and government regulators are close to a $2 billion agreement to put to rest charges that JPMorgan ignored signals that Madoff wasn't operating on the up and up. The case could be wrapped up sometime this week, bringing to $20 billion the cost of settling government inquiries over the past year.

The next big mover?

The traditional bricks-and-mortar bank will soon go the way of the dodo bird -- into extinction, that is. This sounds crazy, but it's true. Every single one of the nation's biggest banks are dramatically reducing branch counts and overhauling the ones left behind. But despite these efforts, they're still far behind a single and comparatively tiny lender that's already leapt into the future. Since the beginning of 2012 alone, this company's shares are already up more than 250%. And they're bound to go higher. To download our free report revealing the identity of this stock, all you have to do is click here now.

3 Stocks Under $10 Making Big Moves

DELAFIELD, Wis. (Stockpickr) -- At Stockpickr, we track daily portfolios of stocks that are the biggest percentage gainers and the biggest percentage losers.

>>5 Stocks Ready to Break Out

Stocks that are making large moves like these are favorites among short-term traders because they can jump into these names and try to capture some of that massive volatility. Stocks that are making big-percentage moves either up or down are usually in play because their sector is becoming attractive or they have a major fundamental catalyst such as a recent earnings release. Sometimes stocks making big moves have been hit with an analyst upgrade or an analyst downgrade.

Regardless of the reason behind it, when a stock makes a large-percentage move, it is often just the start of a new major trend -- a trend that can lead to huge profits. If you time your trade correctly, combining technical indicators with fundamental trends, discipline and sound money management, you will be well on your way to investment success.

>>5 Hated Earnings Stocks You Should Love

With that in mind, let's take a closer look at a several stocks under $10 that are making large moves to the upside today.

Stereotaxis

Stereotaxis (STXS) designs, manufactures and markets cardiology instrument control system in the U.S. and internationally. This stock closed up 10.9% to $3.64 in Tuesday's trading session.

Tuesday's Range: $3.26-$4.05

52-Week Range: $1.10-$9.90

Tuesday's Volume: 3.92 million

Three-Month Average Volume: 1.37 million

From a technical perspective, STXS ripped sharply higher here right above some near-term support at $3.11 and back above its 50-day moving average of $3.61 with heavy upside volume. This move briefly pushed shares of STXS into breakout territory, since the stock flirted with some near-term overhead resistance at $3.88. Shares of STXS closed just below that level at $3.64. Shares of STXS are now starting to move within range of triggering an even bigger breakout trade. That trade will hit if STXS manages to take out Tuesday's high of $4.05 to some more near-term overhead resistance at $4.30 with high volume.

Traders should now look for long-biased trades in STXS as long as it's trending above Tuesday's low of $3.26 and then once it sustains a move or close above those breakout levels with volume that hits near or above 1.37 million shares. If that breakout hits soon, then STXS will set up to re-test or possibly take out its next major overhead resistance levels at $5 to $6.24.

Quantum Fuel Systems Technologies Worldwide

Quantum Fuel Systems Technologies Worldwide (QTWW) designs, develops and produces compressed natural gas storage tanks and packaged fuel systems and other advanced fuel and propulsion systems for alternative fuel vehicle applications. This stock closed up 3.8% to $6.73 in Tuesday's trading session.

Tuesday's Range: $6.11-$6.75

52-Week Range: $1.85-$7.64

Tuesday's Volume: 710,000

Three-Month Average Volume: 799,041

From a technical perspective, QTWW trended higher here right above its 50-day moving average of $5.81 with decent upside volume. This stock had been downtrending over the last month, with shares dropping from its high of $7.64 to its recent low of $5.85. During that move, shares of QTWW have been making mostly lower highs and lower lows, which is bearish technical price action. That said, the downside volatility for QTWW now looks over in the short-term and the stock looks ready to reverse its downtrend and enter a new uptrend.

Traders should now look for long-biased trades in QTWW as long as it's trending above Tuesday's low of $6.11 or above its 50-day at $5.81, and then once it sustains a move or close above Tuesday's high of $6.75 with volume that hits near or above 799,041 shares. If we get that move soon, then QTWW will set up to re-test or possibly take out its next major overhead resistance levels at $7.20 to $7.43. Any high-volume move above those levels will then give QTWW a chance to re-test or possibly take out its 52-week high at $7.64.

Prana Biotechnology

Prana Biotechnology (PRAN) researches and develops therapeutic drugs for the treatment of neurological disorders in Australia. This stock closed up 8.8% to $6.88 in Tuesday's trading session.

Tuesday's Range: $6.29-$6.90

52-Week Range: $2.03-$7.48

Tuesday's Volume: 701,000

Three-Month Average Volume: 676,562

From a technical perspective, PRAN spiked sharply higher here right above some near-term support at $6 with above-average volume. This stock has been uptrending strong for the last two months and change, with shares moving higher from its low of $3.44 to its recent high of $7.48. During that uptrend, shares of PRAN have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of PRAN within range of triggering a big breakout trade. That trade will hit if PRAN manages to take out Tuesday's high of $6.90 to its 52-week high of $7.48 with high volume.

Traders should now look for long-biased trades in PRAN as long as it's trending above some near-term support levels at $6 or at $5.50 and then once it sustains a move or close above those breakout levels with volume that hits near or above 676,562 shares. If that breakout hits soon, then PRAN will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $9 to $10.

To see more stocks that are making notable moves higher today, check out the Stocks Under $10 Moving Higher portfolio on Stockpickr.

-- Written by Roberto Pedone in Delafield, Wis.

RELATED LINKS:

>>3 Big Stocks on Traders' Radars

>>5 Rocket Stocks Worth Buying This Week

>>The Truth About Amazon's Drones

Follow Stockpickr on Twitter and become a fan on Facebook.

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

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

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

Credit risks young military members face

Young military service members face enough hazards but one clear financial risk actually involves paying bills late and losing precious cash to hefty fees.

One of the more troubling parts of a recent military-related survey noted that nearly half of credit card holders in the military engage in costly practices with their plastic. Some months they could end up just paying the minimum requirement on their credit card debt. Or they pay late fees. Or worse yet, they seek extra cash by taking out a sky-high cash advance.

The latest FINRA Foundation Military Financial Capability Survey illustrates the continued challenges when it comes to protecting military borrowers. The Department of Defense has collected data on the impact of high-cost credit on service members and is expected to issue proposed rules in 2014.

The data on late fees serves as reminder during the holidays for service members, and frankly all consumers, to keep an eye on due dates and debt loads, too.

"I see a huge waste of money on late fees and over the limit fees," said N. Susan Abentrod, a certified financial planner in Birmingham, who has counseled service members across the country and overseas.

"Often, it's just a case of not paying attention. After all, there's so much going on in their lives, finances simply take a back-seat."

During the holidays, service members, like other consumers, may want to make up for lost time with family and use credit to pay for gifts, trips home, or even pick up the tab for travel costs for family to visit them.

"Gifts are bought and lavished on those they love with the very best of intentions, with no thought on the months ahead they're going to be paying off the balance," Abentrod said.

The FINRA survey, fortunately, had some good news: About 49% of all military respondents with credit cards said they always pay their credit card bills off in full each month.

But others, particularly younger service members, could be lulled into a false sense of secu! rity with their spending because they're receiving a regular paycheck, maybe the first real pay they've ever had. And they suddenly find that credit is easy to get.

"They're away from home when they're making a lot of their first financial decisions," said Gerri Walsh, president of the Financial Industry Regulatory Authority Investor Education Foundation.

About 57% of the military surveyed said in some months, they carried over a balance and ended up being charged interest. About 39% said in some months in the past year they made the minimum payment only, which let interest owed build and grow.

The survey noted that African-American and Latino service members engage more frequently than white counterparts in credit card practices that come with high fees and interest rates.

Fees might seem a small part of the equation but they cut into tight budgets. The average late fee is $30.97 on a credit card, according to Bankrate.com. A first offense is capped at $25 for someone who is late with a payment, but a second offense within six months is subject to a higher fee, capped at $35, according to Greg McBride, of Bankrate.com.

Fewer than 10% of cards surveyed by Bankrate.com have an over-the-limit fee if you charge more than your line of credit, according to Bankrate.com. But the average over-the-limit fee is $23.64.

Credit card debt isn't the only concern. The FINRA survey also noted that high-cost borrowing is an issue, such as turning to rent-to-own stores, going to pawn shops to borrow and using payday advances.

The Military Lending Act offers service members some protections on some short-term loans and puts an annual interest rate cap of 36% on specific products. The products that face the limited interest rate are: Closed-end payday loans with terms of 91 days or fewer for $2,000 or less. Closed-end vehicle title loans with a term of 181 days or less for any amount. And refund anticipation loans that are closed-end and expressly paid with a tax refund.

But! there ar! e growing concerns that some very high-cost loans are still being made by going through gaps in the current rules, said Tom Feltner, director of financial services for the Consumer Federation of America.

He noted that said the rate caps don't apply to loans that last for more than 91 days and auto-title loans with terms longer than 181 days.

Feltner said the CFA is encouraging the Department of Defense to look broadly at all the forms of credit that is marketed to service members.

The Consumer Federation of America has pointed out that "buy now-pay later options" lure young, inexperienced service members.

One soldier reportedly owed $630 a month for just furniture, at least one-third of his monthly basic pay, according to a 2012 CFA report.

As Abentrod counsels service members, she reviews past statements to explain the added cost of interest, late fees and over-limit fees.

"When I run the numbers showing the final cost of purchases it's a real eye-opener," she said.

Tompor can be reached at stompor@freepress.com

Don’t Claim Social Security Before 70, Alicia Munnell Says

The correct age for retirement is hotly debated in the financial services industry—a recent ThinkAdvisor report cites industry sources putting the age at 65, 70 and even 80. Viewed subjectively, or on the basis of popular opinion, many different answers are possible.

But a new analysis by Alicia Munnell, director of the Center for Retirement Research at Boston College, argues that objectively speaking, 70 is the de facto retirement age — at least as far as maximizing Social Security benefits is concerned.

Despite today’s confusing array of benefit-claiming possibilities, the benefit structure resulting from claiming Social Security at age 70 makes sense as a benchmark for income adequacy given current longevity and retirement saving trends.

In fact, Munnell argues that maintaining the current structure without the official “full retirement age” (currently 65 or 66, depending on year of birth, and scheduled to move to 67) would serve to clarify Americans’ retirement choices.

That is because, first of all, the focus on 65, the age set when Social Security benefits were first paid in 1940, does not jibe with contemporary conditions in which men and women both live on average seven years longer than they did then.

(Check out 65? 70? 80? What’s the Real Retirement Age These Days? on ThinkAdvisor.)

Were we to keep the expected number of years in retirement constant, the retirement age in 2020 would be 72; a more liberal calculation that would evenly distribute longevity gains between added time for work and leisure implies a retirement age of 70.

The calculations grow in complexity when considering socioeconomic factors — for example, the fact that the wealthiest 5% live 25% longer than the bottom 5%, a discrepancy that is actually growing wider over time.

While such factors make it difficult to design a fair benefit structure, Munnell argues the most useful metric in evaluating Social Security  is the so-called replacement rate — that is, looking at benefits as a percent of preretirement income.

The system currently offers actuarially fair benefits at whatever claiming age, meaning that the reduced income of the 62-year-old Social Security recipient and the enhanced benefits of the 70-year-old will work out to be equal on a lifetime income basis.

That said, replacement rates will range from roughly 50% of preretirement income for the 70-year-old to just under 32% for a 62-year-old claimant. But these numbers overstate the net benefit. Once we factor in Medicare premiums (which Social Security automatically deducts) and taxation of benefits up to 85%, the true net replacement income ranges (for someone retiring in 2030) from 43% of income for a 70-year-old to 24% of income for a 62-year-old.

The former provides “a solid base on which to add 401(k) savings and home equity for a secure retirement,” whereas “retiring at 62 will not be a reasonable option for those who have any ability to stay in the labor force,” Munnell argues, adding that the same is largely true for someone retiring at 65 given today’s low 401(k) balances.

While claiming benefits at age 70 makes sense, the official retirement date of 65 has become meaningless, she says. That age (or the new higher age) neither describes the first date one can claim benefits nor the age at which benefits become adequate.

While Munnell favors eliminating “full retirement age,” she is concerned, however, about raising that age and the consequent change in benefit structure. The impending change to age 67 will reduce lifetime benefits by 7%.

However, raising the official retirement age to 70 would reduce net benefits to the 30-percent range, which Munnell describes as inadequate for those claiming at age 70, and grossly inadequate for those claiming earlier.

For that reason, she suggests caution with regard to raising the retirement age. Because many Americans can’t change their retirement date, Munnell argues that changing the benefit formula is a preferable means of reducing expenditures.

Under today’s benefit structure, Munnell concludes that those in communication with pre-retirees should advise them to remain in the workforce longer and not claim Social Security benefits before age 70.

---

Check out 65? 70? 80? What’s the Real Retirement Age These Days? on ThinkAdvisor.

Weekly CEO Sells Highlight

According to GuruFocus Insider Data, these are the largest CEO sales during the past week: RF Micro Devices Inc., TE Connectivity Ltd., SanDisk Corp. and Wesco Aircraft Holdings Inc.

RF Micro Devices Inc. (RFMD): President and CEO Robert A. Bruggeworth Sold 50,000 Shares

President and CEO of RF Micro Devices, Inc. (RFMD) Robert A. Bruggeworth sold 50,000 shares on 10/10/2013 at an average price of $6. RF Micro Devices Inc. has a market cap of $1.68 billion; its shares were traded at around $5.97 with and P/S ratio of 1.60.

RF Micro Devices Inc. reported its 2014 first quarter fiscal results. The company announced revenues of $293 million and net income of $1.6 million.

President and CEO Robert A. Bruggeworth sold 236,466 shares of RFMD stock in August, September, and October. VP Administration and CFO William A. Priddy sold 79,272 shares of RFMD stock in July, August, and October. VP and President Cellular Products Steven E. Creviston, VP and Corporate Controller Barry D. Church, VP and Corp. Treasurer Suzanne B. Rudy and VP Operations James D. Stilson sold 56,178 shares of RFMD stock from August to October.

TE Connectivity Ltd. (TEL): Chairman and CEO Thomas J. Lynch Sold 49,021 Shares

Chairman and CEO of TE Connectivity Ltd. (TEL) Thomas J. Lynch sold 49,021 shares on 10/07/2013 at an average price of $51.6. Te Connectivity Ltd. has a market cap of $21.44 billion; its shares were traded at around $51.85 with a P/E ratio of 17.20 and P/S ratio of 1.70. The dividend yield of TE Connectivity Ltd. stocks is 1.80%.

TE Connectivity Ltd. announced their 2013 fiscal third quarter results with net income of $335 million and net sales of $3.4 billion.

Chairman and CEO Thomas J. Lynch sold 277,544 shares of TEL stock from June to October. EVP, COO and President Network Solutions Joseph B. Donahue' EVP and General Counsel John S. Jenkins' Senior Vice President and Treasurer Mario Calastri EVP and President Industrial Solutions Terrence R. Curtin; and EVP and ! Chief Technology Officer Robert N. Shaddock sold 60,223 shares of TEL stock from May to August.

SanDisk Corp (SNDK): President/CEO Sanjay Mehrotra Sold 45,000 Shares

President/CEO of SanDisk Corp (SNDK) Sanjay Mehrotra sold 45,000 shares on 10/09/2013 at an average price of $61.07. Sandisk Corp has a market cap of $15.02 billion; its shares were traded at around $62.50 with a P/E ratio of 21.30 and P/S ratio of 2.70. The dividend yield of Sandisk Corp stocks is 0.40%.

SanDisk Corp announced their 2013 second quarter results with revenues of $1.5 billion and GAAP net income of $262 million.

President/CEO Sanjay Mehrotra sold 170,000 shares of SNDK stock from June to October. Executive VP Administration and CFO Judy Bruner sold 175,000 shares of SNDK stock in May and August. Director Catherine P. Lego sold 32,000 shares of SNDK stock from August to October.

Wesco Aircraft Holdings Inc. (WAIR): Chairman, President and CEO Randy J. Snyder Sold 70,000 Shares

Chairman, President and CEO of Wesco Aircraft Holdings Inc. (WAIR) Randy J. Snyder sold 70,000 shares during the past week at an average price of $19.77. Wesco Aircraft Holdings Inc. has a market cap of $1.86 billion; its shares were traded at around $19.71 with a P/E ratio of 18.50 and P/S ratio of 2.10.

With revenues of $230.2 million and net income of $27.0 million, Wesco Aircraft Holdings Inc. announced their 2013 fiscal third quarter results.

Chairman, President and CEO Randy J. Snyder sold 150,000 shares of WAIR stock in September and October. Executive VP and CFO Gregory A. Hann sold 35,104 shares of WAIR stock in August and September. Executive VP Sales and Marketing Hal Weinstein sold 104,867 shares of WAIR stock in August and October.

For the complete list of stocks that were bought by their CEOs, go to: Insider Buys.

Related links:GuruFocus Insider DataRobert A Bruggeworth

4 Stocks Under $10 Within Range of Breakouts

DELAFIELD, Wis. (Stockpickr) -- At Stockpickr, we track daily portfolios of stocks that are the biggest percentage gainers and the biggest percentage losers.

>>5 Big Trades to Take Right Now

Stocks that are making large moves like these are favorites among short-term traders because they can jump into these names and try to capture some of that massive volatility. Stocks that are making big-percentage moves either up or down are usually in play because their sector is becoming attractive or they have a major fundamental catalyst such as a recent earnings release. Sometimes stocks making big moves have been hit with an analyst upgrade or an analyst downgrade.

Regardless of the reason behind it, when a stock makes a large-percentage move, it is often just the start of a new major trend -- a trend that can lead to huge profits. If you time your trade correctly, combining technical indicators with fundamental trends, discipline and sound money management, you will be well on your way to investment success.

>>5 Bargain Bin Stocks to Buy This Fall

With that in mind, let's take a closer look at a several stocks under $10 that are making large moves to the upside recently.

Pizza Inn

Pizza Inn (PZZI) operates and franchises pizza buffet, delivery, carry-out and express restaurants domestically and internationally under the trademark 'Pizza Inn'. This stock closed up 3.5% to $7.28 a share in Thursday's trading session.

Thursday's Range: $7.03-$7.46

52-Week Range: $2.47-$9.18

Thursday's Volume: 59,000

Three-Month Average Volume: 78,906

>>5 Stocks With Big Insider Buying

From a technical perspective, PZZI bounced notably higher here right off its 50-day moving average of $7.10 with lighter-than-average volume. This move is quickly pushing shares of PZZI within range of triggering a major breakout trade. That trade will hit if PZZI manages to take out some near-term overhead resistance levels at $7.56 to $7.95 with high volume.

Traders should now look for long-biased trades in PZZI as long as it's trending above some near-term support at $6.50 and then once it sustains a move or close above those breakout levels with volume that hits near or above 78,906 shares. If that breakout hits soon, then PZZI will set up to re-fill some of its previous gap down zone from May that started at $9.18.

United Online

United Online (UNTD) provides consumer products and services over the Internet primarily in the U.S., Canada and Europe. This stock closed up 2.1% to $8.25 in Thursday's trading session.

Thursday's Range: $8.08-$8.33

52-Week Range: $4.98-$8.90

Thursday's Volume: 964,000

Three-Month Average Volume: 906,562

>>5 Rocket Stocks to Buy for September Gains

From a technical perspective, UNTD bounced modestly higher here right above its 50-day moving average of $8.03 with above-average volume. This stock have been trending sideways inside of a consolidation pattern for the last two months, with shares moving between $7.45 on the downside and $8.90 on the upside. Shares of UNTD are now starting to move within range of triggering a breakout trade above the upper-end of its recent sideways trading chart pattern. That breakout will hit if UNTD manages to take out some near-term overhead resistance at $8.49 to its 52-week high at $8.90 with high volume.

Traders should now look for long-biased trades in UNTD as long as it's trending above its 50-day at $8.03 or above more support at $7.80, and then once it sustains a move or close above those breakout levels with volume that hits near or above 906,562 shares. If that breakout triggers soon, then UNTD will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $10 to $12.

Fortress Investment Group

Fortress Investment Group (FIG) operates as a global alternative asset manager. This stock closed up 2.3% to $7.99 in Thursday's trading session.

Thursday's Range: $7.85-$8.07

52-Week Range: $3.73-$8.19

Thursday's Volume: 824,000

Three-Month Average Volume: 923,102

>>5 Stocks Spiking on Big Volume

From a technical perspective, FIG bounced notably higher here right off some near-term support at $7.80 with decent upside volume. This move is quickly pushing shares of FIG within range of triggering a big breakout trade. That trade will hit if FIG manages to take out Thursday's high of $8.07 and then its 52-wek high at $8.19 with high volume.

Traders should now look for long-biased trades in FIG as long as it's trending above support at $7.80 or above its 50-day at $7.62 and then once it sustains a move or close above those breakout levels with volume that hits near or above 923,102 shares. If that breakout hits soon, then FIG will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $10 to $11.

Affymetrix

Affymetrix (AFFX) is a provider of life science tools and molecular diagnostic products that enable parallel analysis of biological systems at the gene, protein and cell level. This stock closed up 2.4% to $6.15 in Thursday's trading session.

Thursday's Range: $6.02-$6.24

52-Week Range: $2.96-$6.51

Thursday's Volume: 585,000

Three-Month Average Volume: 1.48 million

>>5 Stocks Set to Soar on Bullish Earnings

From a technical perspective, AFFX rose modestly higher here right above some near-term support at $5.90 with lighter-than-average volume. This move is quickly pushing shares of AFFX within range of triggering a near-term breakout trade. That trade will hit if AFFX manages to take out Thursday's high of $6.24 and then once it clears its 52-week high at $6.51 with high volume.

Traders should now look for long-biased trades in AFFX as long as it's trending above some near-term support levels at $5.90 or at $5.50 and then once it sustains a move or close above those breakout levels with volume that hits near or above 1.48 million shares. If that breakout triggers soon, then AFFX will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $8 to $9.

To see more stocks that are making notable moves higher today, check out the Stocks Under $10 Moving Higher portfolio on Stockpickr.

-- Written by Roberto Pedone in Delafield, Wis.

RELATED LINKS:

>>5 Stocks Under $10 Set to Soar

>>4 Stocks Rising on Unusual Volume

>>5 Toxic Stocks You Should Sell

Follow Stockpickr on Twitter and become a fan on Facebook.

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

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

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

Hewlett-Packard Lowers Notebook Estimates for 2014 (HPQ)

The Palo Alto-based computer manufacturer Hewlett-Packard (HPQ) announced on Monday that it expects to ship significantly fewer notebooks in the coming year.

According to an internal forecast, the company is expected to ship 21 million laptop units in 2014, which would mark a serious deterioration from 2012′s sales figure of 32 million units. Looking out even further, it was reported that HP’s 2015 sales figure could be as low as 19 million units; as far as the current year goes, most are predicting sales of fewer than 30 million units. The undeniable shift into the mobile space has resonated well for tablets, while taking a big bite out of HP’s “bread and butter” notebook division.

Hewlett-Packard shares traded sideways on Monday, gaining 0.38% on the day. The stock is up nearly 57% YTD.

SAExploration Schedules Release of Second Quarter 2013 Financial Results and Conference Call (OTCMKTS:SAEXW, OTCMKTS:EQLB)

SAExploration Holdings, Inc. (SAEXW)

Today, SAEXW surged (+0.55%) up +0.01 at $.92 with 20,000 shares in play thus far (ref. google finance Delayed: 11:04AM EDT August 6, 2013).

SAExploration Holdings, Inc. previously reported it will release its financial results for the second quarter ended June 30, 2013 on Tuesday, August 13, 2013, after the close of the stock market. Management will host a conference call on Wednesday, August 14, 2013, at 10:00 am Eastern Time to discuss the results.

SAExploration Holdings, Inc. (SAEXW) 5 day chart:

EQ Labs, Inc. (EQLB)

Today, EQ Labs, Inc. (OTCMKTS:EQLB) (www.drinkeq.com) has shed (-1.54%) down -0.0001 at $.0064 with 75,000 shares in play thus far (ref. google finance Delayed: 11:40AM EDT August 6, 2013.

Now at the current price of $.0064, EQLB would be considered to have experienced a (+966.66%) gain if compared to the 52 week low of $.0006.

EQ Labs, Inc. manufactures and markets energy drink products in the United States and Latin America. The company offers EQ Smart Energy Drink, in an effervescent tablet form that provides an instant energy drink once added to a beverage of choice. EQ Labs, Inc. distributes its products through national and regional distributors.

To view EQ Labs, Inc. video click link http://crwetube.com/media/eq-labs-has-entered-into-a-signed-agreement-with-l.

EQ Labs, Inc. (EQLB) 5d chart: