Friday, February 21, 2014

What’s the Best Play for Cable Network Consolidation?

Twitter Logo RSS Logo Will Ashworth Popular Posts: Is CALL Stock the Next NFLX?Which China ETF is Right For You?What Does Bruce Berkowitz See in SHLD? Recent Posts: What’s the Best Play for Cable Network Consolidation? WMT vs. TGT Stock: Which Retailer Can Recover First? What Does Bruce Berkowitz See in SHLD? View All Posts

The proposed merger of Comcast (CMCSA) and Time Warner Cable (TWC) will create a cable distribution colossus with 30 million subscribers. That’s almost seven times as many customers as its next biggest rival. Content providers worry that a bigger Comcast means less room for negotiation when it comes to fees. For bigger firms such as Disney (DIS), it could actually be a blessing rather than a curse.

Comcast185 What's the Best Play for Cable Network Consolidation?If other cable companies — like Charter Communications (CHTR), Cablevision (CVC) and Cox Communications — decide to merge in order to keep pace with Comcast, content providers could be under the gun once more.

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One of the only ways to fight this is by getting bigger. A good example in another industry is Jarden (JAH), a consumer goods business with annual revenues of $7.4 billion. It's as big as it is in order to be able to provide a larger assortment of products to Walmart (WMT), its biggest customer, representing 20% of overall sales. Without this wide assortment, Bentonville would have to go elsewhere for sales. The same scenario applies to cable and television content.

Content consolidation is coming — it's only a matter of time. Is DIS stock the best way to play cable network consolidation? While it's definitely a major player in any future discussion, it's one of several stocks worthy of your consideration. Here are three possible ways things could play out in the near future.

Most Interesting Deal: DIS Stock

Although it's the least likely to happen, I could see DIS stock buying the remaining 50% of A&E Networks it doesn't already own from Hearst Corporation. It would then combine all of its cable content including ESPN into one business which would be spun-off from DIS stock. While any cable consolidation likely won't affect Disney's ability to negotiate good fees for its programming (especially ESPN), a focused, independently operated business likely would give it even more clout with Comcast and other providers.

As I stated in my article about an ESPN spinoff, there are several stumbling blocks that could keep this deal from happening. First, DIS stock makes a ton of money from ESPN and, to a lesser extent, its other cable properties. I'm sure it doesn't want to give up such a profitable business. However, if a deal could be structured that satisfies Hearst — 20% owners of ESPN in addition to their 50% of A&E — and that makes financial sense for DIS stock, it could be a big winner.

Most Viewed: AMCX Stock

The cable network with the highest number of total viewers in 2013 was USA Network with 2.7 billion. It's owned by NBCUniversal which in turn is owned by Comcast. In fact, the top nine cable networks are all owned by big players such as Time Warner (TWX), Twenty-First Century Fox (FOXA), Disney, Hearst and Comcast. In the 10th spot is AMC Networks (AMCX), with 1.8 billion total viewers. It's an attractive network with shows like Mad Men and The Walking Dead keeping viewers glued to their TVs.

Absent from the top 10 are any networks from Viacom (VIAB) whose best result is an 18th-place finish for Nick at Nite. I would think Sumner Redstone or whoever takes over the company would be eager to take AMCX private. And they probably are.

Unfortunately, the Dolan family controls 67% of the votes. Unless they suddenly decide to get out of this business, which is hard to imagine, it's going to make a deal nearly impossible. That said, AMC is the independent network worth owning. Viacom would be wise to at least consider making an offer.

Most Likely: DISCA Stock

Somebody will buy Scripps Networks Interactive (SNI), given that HGTV and Food Network are both in the top 20. It looked momentarily like Discovery Communications (DISCA) might be the suitor, but the company backed out of talks this past week, preferring to focus on overseas expansion.

Of course, discussions would probably resume immediately if there was any future indication that the Scripps family, which controls 44% of the voting shares, is willing to sell. The two companies are just a natural fit.

However, Richard Greenfield, an analyst with BTIG Research, feels a Discovery-Scripps combination still might not have enough scale to play ball with Comcast. If that's the case, it might make sense for Disney or Time Warner to swoop in and buy DISCA stock, leaving Scripps to merge with AMCX. Of course, should this all happen, Scripps/AMC would then be the next major target.

Bottom Line

While I'd love to see a monster deal such as Disney/Discovery, the Discovery/Scripps tie-up seems to make the most sense. DISCA CEO David Zaslav won't spend time thinking about what could have been, but if the Scripps family opens the door, he will surely be in before DIS stock or CMCSA stock get a chance to make an offer.

In my opinion, your best bet to make money on content consolidation is to buy both SNI and DISCA stock — and then wait.

As of this writing, Will Ashworth did not own a position in any of the aforementioned securities.

Thursday, February 20, 2014

Travel Booking Sites Are Booming, and Investors Are Along for the Ride

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receptionShutterstock/Andrey Burmakin Folks are turning to the Internet more and more in planning business trips and personal getaways -- and investors are cashing in on the trend. Shares of Orbitz Worldwide (OWW) soared 18 percent last week after posting better than expected quarterly results. Revenue climbing 4 percent and profitability clocking in at 5 cents a share may not seem very impressive, but analysts were settling for the volatile travel portal to merely break even on flattish revenue growth. Strength in its hotel bookings were more than enough to offset weakness in airline reservations. Orbitz Worldwide's larger and faster-growing peers (PCLN) and Expedia (EXPE) went along for the ride, climbing 7 percent and 4 percent respectively. They both went on to hit new all-time highs. Seeing an industry laggard start to grow profitably again -- and Orbitz Worldwide is calling for modest continued growth into 2014 -- was enough to get the market behind the popular providers of lodging, air travel, car rental, cruise and vacation package reservations. This isn't just a one-week phenomenon. Priceline and Expedia shares have soared 174 percent and 171 percent since the end of 2011. Orbitz Worldwide has also more than doubled in that time, and it's up a whopping 223 percent since the start of 2013. The Ins and Outs of Inn Outings Orbitz Worldwide's report would have been better if it wasn't held back by an 11 percent decline in airline ticket sales. Priceline and Expedia are growing their airfare sales, but modestly, compared to their hotel reservations. This isn't a surprise. Airlines have done a good job of marketing directly to passengers. There are a lot of people on frequent flyer programs, so they often head directly to an air carrier's website when it's time to book a trip. Pricing is also pretty competitive between airlines. There may not be a lot of carriers offering the desired route, but they are quick to respond to what rivals are doing. This makes it less likely for folks researching travel on their PCs, tablets, or smartphones to hit up a portal to see what flights are available. So it's not a surprise to see that air ticketing accounted for just 8 percent of Expedia's business during the holiday quarter, but hotel bookings gobbled up 71 percent of the mix. Given the larger number of options and the wider pricing disparity, the pricing game is different. Lodging establishments get more aggressive in filling up vacant rooms since they have lower costs to justify than an airline. There are also so many classes of hotels, motels and other overnight resting spots that they can march to their own pricing beat. Travel Abroad Investors are not just limited to domestic travel websites, even though it should be noted that the three major publicly traded portals also have a lot of exposure overseas. Priceline generates a lot of its revenue through its European subsidiary, and there's a reason why the company name is Ortbitz and not just Orbitz. However, investors wanting a pure play on the international appetite for travel can turn to (CTRP) as China's leader and MakeMyTrip (MMYT) as the top player in India. Ctrip joined Orbitz Worldwide in the winner's circle last week, soaring 16 percent after posting better-than-expected quarterly earnings on a 31 percent surge in revenue. MakeMyTrip hasn't been as fortunate, but India's economy has yet to embrace travel and the Internet the way that most other large nations have. India's rupee currency has also been diminishing in value, making it harder for investors to participate in the potential growth. Investors have still generally been profiting from buying into the global providers of online travel. As long as the worldwide economy continues to show signs of life, that's unlikely to change anytime soon.

Tuesday, February 18, 2014

3 Stocks Under $10 Making Big Moves on Big Volume

DELAFIELD, Wis. (Stockpickr) -- A smart trader keeps a close eye on unusual upside volume in stocks -- and unusual volume in a stock that trades below $10 should really make you sit up and pay attention.

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Stocks that trade below $10 a share can make big moves to the upside very quickly, and short-term traders can try to capture some of that massive volatility. 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.

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With that in mind, let's take a closer look at a several stocks under $10 that are making sharp moves higher with unusual upside volume flows.


BlackBerry (BBRY) engages in the design, manufacture and marketing of wireless solutions worldwide. This stock is trading up 5% to $9.44 in Tuesday's trading session.

Tuesday's Range: $9.24-$9.65

52-Week Range: $5.44-$16.82

Tuesday's Volume: 19.28 million

Three-Month Average Volume: 25.13 million

From a technical perspective, BBRY is jumping higher here with decent upside volume flows. This stock recently formed a double bottom chart pattern at $8.92 to $8.95. Following that bottom, shares of BBRY have started to spike higher and move within range of triggering a near-term breakout trade. That trade will hit if BBRY manages to take out its 200-day moving average of $9.72 to some more near-term overhead resistance at $10.10 with high volume.

Traders should now look for long-biased trades in BBRY as long as it's trending above those double bottom support zones at $8.95 to $8.92 and then once it sustains a move or close above those breakout levels with volume that hits near or above 25.13 million shares. If that breakout hits soon, then BBRY will set up to re-test or possibly take out its next major overhead resistance levels at $10.85 to $11.65, or even $12.18.

Andatee China Marine Fuel Services

Andatee China Marine Fuel Services (AMCF), through its subsidiaries, engages in the production, storage, distribution and trading of blended marine fuel oil for cargo and fishing vessels in the People's Republic of China. This stock is trading up 8% to $1.89 a share in Tuesday's trading session.

Tuesday's Range: $1.75-$1.93

52-Week Range: $0.48-$2.75

Tuesday's Volume: 193,000

Three-Month Average Volume: 192,169

From a technical perspective, AMCF is soaring higher here right above its 50-day moving average of $1.63 with above-average volume. This move has started to push shares of AMCF into breakout territory, since the stock has flirted with some near-term overhead resistance at $1.89. Shares of AMCF are now starting to trend within range of triggering an even bigger breakout trade. That trade will hit if AMCF manages to take out some more near-term overhead resistance at $2.20 with high volume.

Traders should now look for long-biased trades in AMCF as long as it's trending above its 50-day at $1.63 and then once it sustains a move or close above $2.20 with volume that hits near or above 192,169 shares. If that breakout hits soon, then AMCF will set up to re-test or possibly take out its next major overhead resistance levels at its 52-week high of $2.75.


Kopin (KOPN) develops display products and computer headset technology. This stock is trading up 5% to $4.18 in Tuesday's trading session.

Tuesday's Range: $3.95-$4.29

52-Week Range: $3.06-$4.62

Thursday's Volume: 228,000

Three-Month Average Volume: 140,627

From a technical perspective, KOPN is ripping higher here right off its 50-day moving average of $4 with above-average volume. This stock has been uptrending strong for the last few weeks, with shares moving higher from its low of $3.51 to its intraday high of $4.29. During that move, shares of KOPN have been consistently making higher lows and higher highs, which is bullish technical price action. That move is quickly pushing shares of KOPN within range of triggering a big breakout trade. That trade will hit if KOPN manages to take out some near-term overhead resistance levels at $4.52 to its 52-week high at $4.62 with high volume.

Traders should now look for long-biased trades in KOPN as long as it's trending above Tuesday's low of $3.95 or above its 200-day at $3.74 and then once it sustains a move or close above those breakout levels with volume that hits near or above 140,627 shares. If that breakout hits soon, then KOPN will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $5.50 to $6.

To see more stocks under $10 that are making notable moves higher with volume, check out the Stocks Under $10 Spiking Higher With Unusual Volume portfolio on Stockpickr.

-- Written by Roberto Pedone in Delafield, Wis.


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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 and

You can follow Pedone on Twitter at or @zerosum24.

Monday, February 17, 2014

3 Gun Makers Firing on All Cylinders

Despite ongoing debate regarding guns and public safety, firearms seem to be a popular as ever.

Today, Americans own an all-time high of 310 million guns; that figure rises at a 10% clip per year. That's double the number owned in 1968 and includes handguns, rifles and shotguns.

The gun industry's economic impact on the United States is a staggering $31.8 billion per year, which, The Christian Science Monitor pointed out, is "less than 1% of the U.S. gross domestic product, about what Americans spend on the arts in a year and the equivalent of Nigeria's federal budget for 2013."

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While public debates about guns focus mostly on their use for personal defense, hunting actually drives the industry's economic health.

Hunters spend billions each year

The National Shooting Sports Foundation outlined the contribution hunters make to conservation and the economy in its 2013 report, "A Profile of Today's Hunter." For example, the NSSF says hunters spent $790 million on license fees in 2011, the most recent year for which data is available.

The NSSF reports hunters spent $38.3 billion in 2011, as compared to $22.9 billion in 2006, a 67% increase. Hunters also generated $11.8 billion in federal, state and local tax revenues in 2011. During that year, hunters supported 680,937 jobs with their expenditures and activities, and produced $26.4 billion in salaries, wages and business owner income.

"More than $39 million is spent on travel, such as dining, lodging, transportation and similar expenses. Another $190 million is spent on equipment, and more than $62 million is spent on other items," said Patrick Berry, Vermont Fish and Wildlife commissioner, in a Shooting Industry Magazine article.

In short, the gun industry and gun makers are alive and thriving. Here are three U.S. gun and ammunition manufacturers, up an average of 67% in the last year.

Smith & Wesson

SmithAndWessonLogoSmith & Wesson (SWHC) has seen stock appreciation of 56% in the last year and is optimistic about the near future, raising its fiscal year 2014 revenue guidance to $615 million and earnings per share between $1.30 and $1.35.

The $398 million company expects annual growth over the next five years of more than 30%. Smith & Wesson also recently agreed to a five-year deal with the Los Angeles County Sheriff's Department.

Sturm, Ruger

sturmruger185Investors can also consider $1.43 billion gun manufacturer Sturm, Ruger (RGR) which recently purchased a 220,000-square-foot manufacturing facility in North Carolina. That highlights the company's confidence that demand will remain strong. Production begins the first quarter of 2014, and Sturm plans to invest more than $26 million in the plant by the end of 2017.

Sturm, Ruger also reported market-beating third-quarter results mainly due to healthy demand for new firearms. Two of Sturm's pistols and its American Rimfire rifle accounted for 32% of all firearm sales in the past nine months. Shares finished 2013 up 56%.

Alliant Techsystems

AlliantTechsystemsLogoAlliant Techsystems (ATK) is a defense contractor for the aerospace and defense industries and produces ammunition and accessories. U.S. government customers make up 67% of its total sales.

The company's ammunition and accessories products combined make up 40% of Alliant's revenue in fiscal 2013.  It sells firearms under the brand names Federal Premium, Fusion and Eagle.

Of that 40%, about a third came directly from came from Alliance's contract to run the Lake City Army Ammunition Plant in Independence, Mo.; the contract lasts until 2020. This past fiscal year, the ammo plant produced 1.8 billion rounds. ATK shares finished 2013 up 84% for the year.

Saturday, February 15, 2014

Financial Services Execs Stressed Over New Regulations

Regulatory change is high on the agenda at financial services firms, second only to market volatility as a worry among executives, new research from SunGard has found.

Senior executives now worry that changes starting to take effect this year are distracting attention from core business activities and potentially hindering their firms’ ability to grow.

Adapting to new regulations is also causing leaders to rethink their approach to compliance and to restructure their organizations accordingly.

The SunGard survey, which was conducted by Longitude Research in late 2013, polled 400 senior financial services executives across the globe.

The survey found that the pressure of dealing with regulatory change had expanded beyond compliance departments into the corporate suite.

Fifty percent of respondents warned that dealing with regulatory change had affected shareholder returns and the ability to invest for the future.

Forty-six percent of respondents described themselves as “highly stressed” by the current pressure of regulatory change, and saw little prospect of imminent improvement.

The broad nature of change was driving a more cross-functional response within businesses, according to the survey. Best-in-class institutions were breaking through siloes, allowing for a more efficient response to the issue.

Despite ongoing efforts, readiness levels remain relatively low. Only one in two financial services firms said they were highly ready for the regulatory changes confronting them throughout 2014 and 2015. 

Firms planned to continue investing heavily in technology, people and processes over the next two years to cope with regulatory change, the survey found.

While acknowledging the benefits of a culture change to compliance, 40% of respondents said they found it challenging to move beyond a checking-the-box approach.

However, most firms in the survey said they accepted the need for regulatory change and were moving along with their responses to new regulations — even as they expressed concerns that the degree of change was overblown.

“The definition of what regulators are becoming concerned about is broadening to include areas such as operational risk, adding extra strain to the financial services industry,” Jeffrey Wallis, managing partner and president of SunGard Consulting Services, said in a statement.

“Our survey demonstrates that executives at the highest levels are struggling to marry ensuring regulatory readiness with maintaining a focus on day-to-day operations. In our work with firms on regulatory compliance, we see the most success when a business takes a combined approach to the twin challenges of growth and compliance.”


Saturday, February 8, 2014

6 Closed-End Funds to Buy Now

Closed-end funds are complex beasts that are typically marketed by brokers to individual investors only when they're first launched. They carry fees of 5% or so to cover brokerage commissions and underwriting costs. Investors who buy newly minted closed-ends often fare poorly.

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But if you research closed-end funds carefully, you can do well. This article offers six closed-end funds that look attractive at current prices, as well as two RiverNorth funds that invest in them.

But first, what are closed-end funds? Think of a closed-end as a hybrid of a regular mutual fund and an individual stock. Like ordinary funds, closed-end funds invest in a portfolio of stocks or bonds or both. (About two-thirds of closed-ends invest only in bonds.) Like stocks, they generally issue shares only once, when they first go public. After they go public, they often trade at wide discounts or premiums to the value of the securities they own, known as their net asset value, or NAV, and typically expressed on a per-share basis. (Exchange-traded funds, by contrast, create and redeem shares constantly, so their share prices are usually close to their NAVs.)

Sentiment often swings wildly on individual funds. If you're patient, you can make money by exploiting the discounts and premiums—that is, buying a fund at a big discount and selling when the discount narrows or the fund goes to a premium. Keep in mind that fund prices usually revert not to their NAV but to their long-term average discount or premium.

The sector selling at the most compelling discounts just now: tax-exempt bond funds, especially those that use leverage (borrowed money), which boosts yields but also heightens volatility. These funds got creamed last year, causing many investors to flee and discounts to widen.

The picks below come from Patrick Galley, lead manager of RiverNorth Equity Opportunity R (RNEOX), a regular mutual fund that invests primarily in closed-end funds (more on RiverNorth later).

BlackRock Municipal Target Term Trust (BTT, current price $18.71; current yield, 6.0%; current discount to NAV, 6.1%) suffered a breathtaking loss of 22.4% last year because it invests in long-term bonds, which are especially vulnerable to rising interest rates (bond prices move inversely with yields). It leverages 44% of its assets and saw its share price go from a small premium to NAV to a discount to NAV. So far this year, by contrast, it has gained 10.0%. The fund will liquidate in 2030, and the average maturity of the bonds it owns is targeted to that date. If bond yields rise one percentage point, expect this fund to plunge 16%. (All share prices and discounts are as of February 5; unless otherwise stated, returns are through the same day and are based on changes in share prices.)

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Nuveen Intermediate Duration Municipal Term (NID, $11.73, 5.8% yield, 10.3% discount) tumbled 19.3% last year thanks to 37% leverage, a widening discount and the effects of rising interest rates. It has gained 2.4% so far this year. The fund will liquidate in 2023.

Nuveen Municipal Advantage (NMA, $12.73, 6.3% yield, 10.8% discount) is 38% leveraged. It lost 15% in 2013 but has rebounded 5.3% this year. If yields rise by one percentage point, expect this fund to lose 11%. (Nuveen, incidentally, runs more than 40 municipal closed-ends, many of them similar.)

In taxable bonds, Templeton Global Income (GIM, $7.64, 5.5% yield, 7.4% discount) is intriguing. It's a near clone of Templeton Global Total Return (TTRZX), an excellent commission-charging mutual fund run by Michael Hasenstab. The unleveraged closed-end fund gives you access to Hasenstab's talents at a discount to NAV and without having to pay a load. Historically, the closed-end has traded at a premium to NAV. Finally, Galley recommends two venerable, low-fee stock funds:Adams Express (ADX, $12.20, 14.6% discount) and Tri-Continental (TY, $18.99, 14.2% discount), both of which launched in 1929. (Closed-ends were virtually the only kinds of funds until the Great Depression, and, partly because of their use of leverage, played a big role in the 1929 crash.) Adams, an unleveraged large-company stock fund, outpaced Standard & Poor's 500-stock index slightly over the past 15 years. Its 14% discount has remained in place for many years, with only minor variations.

Tri-Continental, which is just slightly leveraged, has about two-thirds of its assets in stocks and the rest in convertible bonds, regular corporate bonds, preferred stocks and cash. It has a stubborn 14% discount. Returns had been mediocre but have improved markedly since 2010, when the fund got a new manager.

Why bother with the stock funds? If investors really do rotate increasingly out of bonds and into stocks, Galley posits, these funds should produce solid returns. That might result in their discounts shrinking, at least temporarily, giving shareholders a double benefit.

RiverNorth runs several funds that, with the aid of computer algorithms, attempt to turn profits from ever-changing discounts on closed-end funds. A panic such as the one that hit muni bonds last year is their bread and butter. When the managers can't find good value, they sensibly stay in broad-based, index-tracking ETFs. Most of the RiverNorth funds also hire a well-known subadviser to run part of the assets.

RiverNorth/Oaktree High Income (RNOTX) is the only way I know for individual investors to invest in a bond fund run mainly by Oaktree, which specializes in high-yield debt. (Oaktree does run Vanguard Convertible Securities (VCVSX), a wonderful fund that, as the name suggests, invests in convertibles.) The RiverNorth fund, which launched at the end of 2012, returned 5.0% over the past 12 months. Oaktree runs three-fourths of the fund's assets; the rest are in closed-end funds chosen by RiverNorth.

RiverNorth Equity Opportunity invests in closed-end stock funds, including some that hold foreign stocks. Launched in mid 2012, it returned 13.1% over the past year.

One big stumbling block with RiverNorth funds: They charge too much. RNOTX charges 1.93% annually and RNEOX charges 2.17% annually, partly because of the extra layer of expenses from the closed-end funds RiverNorth owns. I think that Galley and company, as well as Oaktree, have the smarts and discipline to overcome their high expense ratios, but the fees do pose a high hurdle.

Steven T. Goldberg is an investment adviser in the Washington, D.C., area.

Friday, February 7, 2014

Stocks Must Rebuild the Wall of Worry

Print FriendlyYou may know the old expression about how bull markets climb a “wall of worry.” But once all of the old worries seemingly disappear, markets then become vulnerable to new ones.

At the end of 2013, there was a growing consensus that the world was entering a phase of synchronized growth. But during January, that optimism gave way to new worries that stocks will have to overcome. Or fail in the attempt.

It didn’t take long for the much-anticipated “pause that refreshes” in many of the world’s equity markets to turn into fear of a global contagion. Will this week’s rebound reduce those fears or merely provide temporary relief?

As the year started, markets fell around the world. For the US and Europe and Japan, it was an understandable pullback after a robust, some would say exuberant, 2013. But for emerging markets, the declines were an acceleration of previous weakness.

A clear reason for the broad-based decline was the Federal Reserve’s start of the gradual tapering of its quantitative-easing program. At the margin, this should reduce the flow of investor money into so-called risk assets.

Then some specific problems started to pop up four weeks ago today, with last month’s surprisingly weak US jobs report for December. This was followed since then by Argentina’s currency devaluation; an unexpectedly soft manufacturing report in China, the world’s second-largest economy after the US; sharp interest-rate increases in Turkey, India and South Africa; a continuing inflation decline in the euro zone; and this week’s dramatic drop in Japan’s stock market.

Then today, Friday, brought the eagerly awaited jobs report for January. With the addition of only 113,000 jobs, it proved to be weaker than expected for the second consecutive month. Strangely, the unemployment rate ticked down to 6.6 percent even as the labor pa! rticipation rate ticked up to a still-dismal 63 percent. Bad weather, the worst in 35 years by some measures, may or may not have been a factor.

But this time, stocks were up as we completed this letter to you, in sharp contrast to last month’s negative reaction to the poor jobs report. Time will tell whether this reaction means a new climb up the wall of worry (slow growth) for stocks.

World stocks’ weakness in January and early February weren’t the only reasons to question whether global growth will measure up to recent optimistic expectations. Yields on 10-year US Treasury issues dropped to as low as 2.6 percent this week from 3 percent at the beginning of the year. Bond yields tend to drop (with rising prices) when growth and inflation soften.

The bond rally has been all the more impressive or disturbing, depending on your point of view, because it occurred despite reduced buying of US Treasury and mortgage securities by the Fed. Yields on Japanese government bonds, German Bunds and British gilts are also down.

In the US, an increasing body of opinion was that economic growth was poised to finally break out of its slow 2 percent or so rate to 3 percent or more in 2014. The US economy grew at a brisk annual rate of 3.7 percent in the second half of 2013.

But the jobs reports plus disappointing reports on US car sales, manufacturing and home sales have created doubts about whether faster growth is actually achievable this year.

It’s debatable the extent to which turbulence and problems in various emerging markets can affect the US economy and corporate profits and therefore stock prices. But we’re all linked, as the financial crisis of 2008 proved.

Just one example: Slower growth in the emerging markets would dampen profits of US multinationals, not only in the more economically sensitive industries but also in consumer staples, which generally are considered a relative safe haven in a volatile stock market.

Plus, we! ’re! talking not just about economic growth and corporate earnings. Credit and money flows are a key factor.

Valuations of risk assets are directly related to the amount of available credit and the level of interest rates. Collectively, the world’s monetary policy has tightened in 2014. The Fed is tapering. China is cracking down on its shadow banking system. Europe’s banks are deleveraging. And emerging markets are fighting currency weakness with interest-rate increases.

In the US, credit used to grow at 8–10 percent a year. But the growth was just 3.5 percent over the past 12 months.

Interest rates likely will remain very low for some time to come. Will that benefit help propel stocks higher on a new wall of worry, namely sluggish growth in 2014? Stay tuned.

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Thursday, February 6, 2014

Oil futures edge up ahead of U.S. inventory data

HONG KONG (MarketWatch) — Oil futures on Tuesday inched higher, paring Monday's losses, with investors awaiting weekly data on U.S. crude supplies expected to show a drop in inventories.

Crude oil for January delivery (CLF4)   rose 9 cents, or 0.1%, to $97.43 a barrel in electronic trading.

Oil prices on Monday settled down by 0.3% on the New York Mercantile Exchange for their first loss in seven sessions after Federal Reserve officials said the central bank could begin tapering down its stimulus program at its meeting next week.

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Oil prices rose 5.3% last week for their best performance since July, according to FactSet data tracking the most-active contracts.

The American Petroleum Institute was due to release its weekly oil inventory report Tuesday at 4:30 p.m. Eastern time, followed on Wednesday by the more closely watched U.S. Energy Information Administration (EIA) weekly data.

U.S. commercial crude oil stocks are expected to have fallen for the second consecutive week, with a draw of 2.8 million barrels during the week ended Dec. 6, a according to a Platts survey of oil analysts.

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The previous week, the EIA report showed a larger-than-expected 5.6-million-barrel drop for the week ended Nov. 29, the first decrease in 11 weeks.

In other trading Tuesday, Brent crude for January delivery (UK:LCOF4)   edged up 5 cents, or 0.1%, to $109.44 a barrel.

January natural gas (NGF14)  added 0.1% to $4.14 million British thermal units. January gasoline (RBF4)  increased slightly to $2.68 a gallon, and January heating oil (HOF4)   was up 0.1% at $3.02 a gallon.

More MarketWatch news

Willard: This bubble blowing bull market won't end well

Fed's Bullard floats idea of small taper in December

Gilburt: Is a 100-point S&P decline out of the question?.

Wednesday, February 5, 2014

AbbVie Inc (ABBV): What To Watch In Q4 Results?

AbbVie Inc (NYSE: ABBV) will announce its fourth-quarter and full-year 2013 financial results on Jan. 31, 2014. AbbVie will host a live webcast of the earnings conference call at 8 a.m. Central time (9 a.m. Eastern).

Wall Street expects Abbvie to report earnings of 82 cents a share, according to analysts polled by Thomson Reuters. Abbvie's earnings have topped Street view in all of the past three quarters, with upside surprises ranging between 1.5 percent and 5.1 percent. Two analysts have raised their profit view in the past month.

Quarterly revenue is estimated to fall 2 percent to $5.10 billion from $5.21 billion. Abbvie sees fourth-quarter sales of about $5 billion.

[Related -Can Abbvie Inc (NYSE:ABBV) Trump Gilead Sciences, Inc.'S (NASDAQ:GILD) HCV Lead?]

AbbVie, which was spun off from Abbott Labs (NYSE:ABT) in January 2013, gets more than half of its revenues from Humira, a mega-blockbuster drug with sales of $9.3 billion in 2012 and on track to peak at $13 billion in 2017.

Humira is indicated for a broad range of autoimmune diseases such as rheumatoid arthritis and psoriasis, which collectively make up one of the world's largest biopharma markets worth $30 billion. The consensus view calls for Humira to generate sales of $3.06 billion for the fourth quarter.

For the full year, the Street expects Abbvie to earn $3.14 a share on revenue of $18.75 billion. In 2012, the company earned $3.35 a share on revenue of $18.38 billion. The company expects earnings of $3.11 to $3.13 a share and sees revenue "somewhere above" $18.5 billion.

[Related -Abbvie Inc (NYSE:ABBV): Ready To Shift Gears In 2014?]

Humira's growth should continue as biologics gain deeper penetration in autoimmune markets driven by more aggressive treatment strategies.

Other key products that attract investor attention includes Androgel, Kaletra, Lupron and Synthroid. If the company manages to achieve revenue increases in these products, it bodes well for valuation. On the other hand, the Street could focus on the pipeline and new indications of Humira.

Investors focus will be on 2014 guidance and pipeline updates, particularly for the HCV franchise. AbbVie's HCV regimen includes the next-generation program that could be ribavirin free, once daily and pan-genotypic. BMO Capital Markets analyst Alex Arfae estimates the HCV regimen could reach peak sales of $2.8 billion with only 10-13 percent market share

Moreover, due to the strong launch of Gilead Science's (GILD) Sovaldi, the market is heavily discounting the potential for AbbVie's HCV regimen, which is expected to launch in early 2015.

The HCV market is expected to be sustainable for at least 7-10 years as treatment is rationed for more advanced patients. There are roughly 300,000-350,000 HCV patients are estimated to be on treatment in major markets by 2014-2015.

In December, Abbvie demonstrated that 96 percent sustained virologic response in its late stage study of treatment-experienced patients with genotype 1 Hepatitis C at 12 weeks with three direct-acting-antiviral (3D) regimen plus ribavirin.

Investors should be looking for additional updates on ABT-199, a promising drug for chronic lymphocytic leukemia (CLL) that potently achieves antitumor activity while sparing platelets; but need to manage tumor lysis syndrome. ABT-199 is being developed in collaboration with Roche.

In addition, it started the second Phase 3 pivotal trial to evaluate elagolix for the treatment of endometriosis. Based on the strong phase-2 data, analysts cautiously expect approval and launch in 2016, and forecasted sales of $500 million by 2020.

The market would look for updates on studies evaluating daclizumab in patients with relapsing/remitting multiple sclerosis (MS). Daclizumab High-Yield Process (DAC HYP) is believed to target the activated immune cells that can play a key role in MS without causing general immune cell depletion. A second registrational study, the DECIDE trial, is expected to complete in mid-2014, supporting a potential regulatory submission by year-end 2014.

For the third quarter, AbbVie's net earnings fell to $964 million from $1.59 billion in the previous year. Earnings per share dropped to 60 cents from $1.01 last year. Adjusted earnings per share came in at 82 cents. Net sales increased 3.3 percent to $4.66 billion, with Humira sales rising 19.1 percent to $2.77 billion.

AbbVie shares, which trade 15.1 times its forward earnings, have dropped 3 percent since its last quarterly report. During the past 52-weeks, they traded between $35.01 and $54.78 and gained 29 percent in the past year.  

Monday, February 3, 2014

Top Consumer Stocks To Watch Right Now

BlackBerry Ltd. (NASDAQ: BBRY) has shot itself in the foot over losing so much ground in the smartphone wars. Google Inc. (NASDAQ: GOOG) has taken over market share, and Apple Inc. (NASDAQ: AAPL) remains the leader in higher-priced smartphones with its key iPhone 5 variations. News came out on Tuesday that BlackBerry has launched a BlackBerry P’9982 which is designed by Porsche.

Do you think this will matter? BlackBerry has lost every almost developed world consumer level customer outside of employees at enterprises, and it seems to be losing them rapidly as well. This is the P’9982�and reports have the limited edition version of the phone selling for some $2,250 according to the AllThingsD technology blog.

Here is the problem with BlackBerry, and this problem reigns true whether Porsche, Ferrari, Rolls Royce, Rover, or a UFO-maker builds the next BlackBerry. It is just about too late to matter. The new CEO is very able, but he is coming in so late after so much carnage and after a failed company sale that it seems as though company is in an impossible position.

Top Consumer Stocks To Watch Right Now: HILTON FOOD GROUP PLC ORD GBP0.10(HFG.L)

Hilton Food Group plc, together with its subsidiaries, engages in the retail meat packing for international food retailers in Europe. Its product range includes fresh items, such as roasting joints, steaks, chops, and minces; and barbecue ranges, ready to cook products, marinated meats, and convenience products, which comprise meat cuts and serving sauces. The company operates in the United Kingdom, the Netherlands, the Republic of Ireland, Sweden, Denmark, Poland, the Czech Republic, Hungary, Slovakia, Latvia, Lithuania, and Estonia. Hilton Food Group plc was founded in 1994 and is based in Huntingdon, the United Kingdom.

Top Consumer Stocks To Watch Right Now: Imperial Tobacco (ITYBY.PK)

Imperial Tobacco Group PLC (Imperial Tobacco), incorporated on August 6, 1996, is a tobacco company. Through the Company�� total tobacco portfolio it provides consumers a range of brands and products, including cigarettes, fine cut tobacco, cigars and snus. Its total tobacco portfolio includes fine cut tobacco, cigars, rolling papers and tubes. Its non-European Union (EU) markets consist of Eastern Europe, Africa and the Middle East and Asia and markets of the United States and Australasia. Its international cigarette brands include Davidoff, Gauloises Blondes and West. It offers services across the whole logistics value chain to its customers, including order reception, storage and stock management, order preparation, transport and distribution, invoicing and collection and customer services. Its business has two aspects: tobacco logistics and non-tobacco logistics. Imperial Tobacco comprises two distinct businesses: Tobacco and Logistics. The Tobacco business comprises the manufacture, marketing and sale of tobacco and tobacco-related products, including sales to (but not by) the Logistics business. The Logistics business comprises the distribution of tobacco products for tobacco product manufacturers, including Imperial Tobacco, as well as a range of non-tobacco products and services. The Logistics business is run on an operationally neutral basis.

Top 5 Cheap Companies To Invest In Right Now: Strayer Education Inc (STRA.O)

Strayer Education, Inc. provides post-secondary education services. The Company offers a range of academic programs through its wholly owned subsidiary Strayer University, Inc. (the University), both in classroom courses and online via the Internet. Strayer University is an institution of higher learning that offers undergraduate and graduate degree programs in business administration, accounting, information technology, education, health care, public administration and criminal justice at 92 physical campuses in Alabama, Arkansas, Delaware, Florida, Georgia, Illinois, Indiana, Kentucky, Louisiana, Maryland, Mississippi, New Jersey, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Virginia, West Virginia, Wisconsin, and Washington, D.C., and online. As of December 31, 2011, the Company had opened 78 of its campuses. The Company has also developed a robust online education program.

Strayer University offers business, information te chnology and professional-oriented curricula to equip students with specialized and practical knowledge and skills for careers in business, industry and Government. Its Academic School Deans and Program Curriculum Committees regularly review and revise the University�� course offerings to improve the educational programs and respond to changes in job markets. Strayer University offers graduate programs in Master of Business Administration (M.B.A.); Jack Welch Executive Master of Business Administration (M.B.A.) Degree; Master of Education (M.Ed.) Degree;Master of Health Services Administration (M.H.S.A.) Degree; Master of Public Administration (M.P.A.) Degree; Master of Science (M.S.) Degree (Information Systems, Accounting, Human Resource Management and Management), and Executive Graduate Certificate Programs (Business Administration, Information Systems and Accounting).

Strayer University�� undergraduate programs include Bachelor of Science (B.S.) Degree ( Accounting, Information Systems, Economics and Criminal Ju! st! ice); Bachelor of Business Administration (B.B.A.) Degree;Associate in Arts (A.A.) Degree (Accounting, Acquisition and Contract Management, Business Administration, Information Systems, Economics, Marketing and Criminal Justice); Diploma Programs (Accounting, Acquisition and Contract Management, and Information System), and Undergraduate Certificate Programs (Accounting, Business Administration and Information Systems). Each undergraduate degree program includes courses in oral and written communication skills, as well as mathematics and a range of disciplines in the humanities and social sciences. In addition to its degree, diploma and certificate programs, it offers classes to non-degree and non-program students wishing to take courses for personal or professional enrichment. Strayer University students may enroll in courses at more than one campus and take courses online.

Students can take classes online using either a synchronous (real time) or asynchronous (on demand) format. Students may take all of their courses online or may take online courses as a supplement to traditional, classroom-based courses. Tuition for online courses is the same as for campus courses. During the year ended December 31, 2011, Strayer University had over 32,000 students who took classes solely online.

Top Consumer Stocks To Watch Right Now: Seneca Foods Corp (SENEB)

Seneca Foods Corporation is a producer and distributor of processed fruits and vegetables. The Company's product offerings include canned, frozen and bottled produce and snack chips. The Company has two segments: processing and sale of fruits and vegetables and processing and sale of chip products. These two segments constitute the food operation. As of March 31, 2012, the food operation constituted 98% of total sales, of which approximately 69% was canned vegetable processing, 18% was canned fruit processing, 12% was frozen fruit and vegetable processing and 1% was fruit chip processing. The Company packs Green Giant, Le Sueur and other brands of canned vegetables, as well as select Green Giant frozen vegetables for General Mills Operations, LLC (GMOL). In January 2013, the Company acquired Independent Foods, LLC.

As of March 31, 2012, the Company's facilities consisted of 21 processing plants located throughout the United States, two can manufacturing plants, two seed processing operations, a small farming operation and a limited logistical support network. The Company also maintains warehouses, which are located adjacent to its processing plants. The products are sold nationwide by grocery outlets, including supermarkets, merchandisers, limited assortment stores, club stores and dollar stores.

Products are sold to food service distributors, industrial markets, other food processors, export customers in 80 countries and federal, state and local governments for school and other feeding programs. Food processing operations are primarily supported by plant locations in New York, California, Wisconsin, Washington, Idaho, Illinois, and Minnesota. The Company�� products are sold under private label, as well as national and regional brands that the Company owns or licenses, including Seneca, Libby's, Aunt Nellie's Farm Kitchen, Stokely's, Read, Taste of the West, Cimarron, and Tendersweet.

Top Consumer Stocks To Watch Right Now: Ford Motor Credit Company(F)

Ford Motor Company primarily develops, manufactures, distributes, and services vehicles and parts worldwide. It operates in two sectors, Automotive and Financial Services. The Automotive sector offers vehicles primarily under the Ford and Lincoln brand names. This sector markets cars, trucks, and parts through retail dealers in North America, and through distributors and dealers outside of North America. It also sells cars and trucks to dealers for sale to fleet customers, including daily rental car companies, commercial fleet customers, leasing companies, and governments. In addition, this sector provides retail customers with a range of after-sale vehicle services and products in the areas, such as maintenance and light repair, heavy repair, collision repair, vehicle accessories, and extended service contracts under the Ford Service, Lincoln Service, Ford Custom Accessories, Ford Extended Service Plan, and Motorcraft brand names. The Financial Services sector offers vari ous automotive financing products to and through automotive dealers. It offers retail financing, which includes retail installment contracts for new and used vehicles; direct financing leases; wholesale financing products that comprise loans to dealers to finance the purchase of vehicle inventory; loans to dealers to finance working capital, purchase real estate dealership, and/or make improvements to dealership facilities; and other financing products, as well as provides insurance services. Ford Motor Company was founded in 1903 and is based in Dearborn, Michigan.

Advisors' Opinion:
  • [By Brian Stoffel]

    When Ford (NYSE: F  ) was beginning to have serious troubles in late 2006 -- it was bleeding money and losing market share -- the company did something about it: It hired an outsider to take over as CEO. Not only was Alan Mulally not coming from within the company to become CEO, he was in a different industry entirely: He worked in aviation for Boeing.

  • [By Michael B. Sauter]

    While September sales were off slightly from last year, the U.S. auto industry is up more than 8% for the year. However, success relies heavily on the popularity of just a few models. Of the nearly 12 million units sold so far, this year�� top 10 models alone have sold more than 2.9 million units. The Ford (NYSE: F) F-Series and GM’s (NYSE: GM) Chevrolet Silverado, the two top-selling models, are up more than 20%.

  • [By Matt DiLallo]

    We spent hours looking online at vehicles including�Ford's� (NYSE: F  ) �Escape, which, in all honesty, didn't have the rugged good looks we wanted. It was the same story when comparing�General Motors' (NYSE: GM  ) �Chevy Equinox. Further, while both are excellently built vehicles, when putting a price tag on the fully featured vehicle we were looking for, it really wasn't as appealing as the vehicle we ended up purchasing: the 2014 Jeep Patriot.�

Top Consumer Stocks To Watch Right Now: Heelys Inc.(HLYS)

Heelys, Inc., through its subsidiary, Heeling Sports Limited, designs, markets, and distributes action sports-inspired products under the HEELYS brand to the youth market. It primarily offers HEELYS-wheeled footwear, a dual-purpose footwear that incorporates a stealth and removable wheel in the heel, and allows the user to seamlessly transition from walking or running to rolling by shifting weight to the heel. The company also offers Nano inline footboard and branded accessories, such as replacement wheels. It distributes its products directly, as well as through international wholesale distributors to retail stores in the United States internationally. The company was formerly known as Heeling, Inc. and changed its name to Heelys, Inc. in August 2006. Heelys, Inc. was founded in 2000 and is headquartered in Carrollton, Texas.

Top Consumer Stocks To Watch Right Now: Furniture Brands International Inc. (FBN)

Furniture Brands International, Inc. engages in designing, manufacturing, sourcing, and retailing home furnishings in the United States and internationally. The company offers case goods, such as bedroom, dining room, and living room wood furniture; stationary upholstery products comprising sofas, loveseats, sectionals, and chairs; and motion upholstered furniture, including recliners and sleep sofas. It also provides occasional furniture, such as accent pieces, home entertainment centers, and home office furniture, as well as wood, metal, and glass tables; and decorative accessories and accent pieces. The company�s brand portfolio includes Thomasville, Broyhill, Lane, Drexel Heritage, Henredon, Pearson, Hickory Chair, Lane Venture, Maitland-Smith, La Barge, and Creative Interiors. It markets its products through its Thomasville retail stores, interior designers, multi-line/independent retailers, and mass merchant stores to retailers, including independently owned furnitu re stores, department stores, and chains. The company was formerly known as Interco Inc. and changed its name to Furniture Brands International, Inc. in 1996. Furniture Brands International, Inc. was founded in 1921 and is headquartered in St. Louis, Missouri.

Advisors' Opinion:
  • [By Fox Business News]

    Billionaire investor Carl Icahn spoke with FOX Business Network�� (FBN) Charlie Gasparino about his positions in Apple and Herbalife. He discussed his proposal for Apple to launch a $150 billion stock buyback, saying, ��hey could certainly innovate as much as they want and still do this buyback.��When asked whether he could maintain a stake in Herbalife for years, Icahn said, �� could. I have no compunction the way Herbalife is going right now.��Icahn also discussed his Twitter war with PIMCO Founder and Co-CIO Bill Gross, and said, �� certainly respect Bill Gross, but it�� a little fun.��/p>

  • [By Sally Jones]

    Here�� a look at what goes inside those new homes: new furniture. As furniture makers increase outsourcing and the U.S. manufacturing sector declines, investors must be wondering about the future of American furniture companies. Trading histories show Guru billionaires have taken years of losses, especially in the case of Furniture Brand International Inc. (FBN), but the recent insider trades at Furniture Brand may be some indication of what we can expect from Guru shareholders when their second quarter trading activity in this sector is revealed.

Top Consumer Stocks To Watch Right Now: General Mills Inc (GIS)

General Mills, Inc. (General Mills), incorporated on June 20, 1928, is a manufacturer and marketer of branded consumer foods sold through retail stores. The Company is also a supplier of branded and unbranded food products to the foodservice and commercial baking industries. The Company manufactures its products in 15 countries and markets them in more than 100 countries. The Company's joint ventures manufacture and market products in more than 130 countries and republics worldwide. General Mills operates in three segments: U.S. Retail, International, and Bakeries and Foodservice. In addition, the Company sells ready-to-eat cereals through its Cereal Partners Worldwide (CPW) joint venture. In February 2012, General Mills acquired Food Should Taste Good, a natural snack foods company based in Needham Heights, Mass. During the fiscal year ended May 27, 2012, the Company acquired a 51% interest in Yoplait S.A.S. and a 50% interest in Yoplait Marques S.A.S. In August 2012, it acquired Yoki Alimentos SA.

General Mills�� ready-to-eat cereals consists of Cheerios, Wheaties, Lucky Charms, Total, Trix, Golden Grahams, Chex, Kix, Fiber One, Reese�� Puffs, Cocoa Puffs, Cookie Crisp, Cinnamon Toast Crunch, Clusters, Oatmeal Crisp and Basic 4. Its refrigerated yogurt include Yoplait, Trix, Delights, Go-GURT, Fiber One, YoPlus, Whips!, Mountain High, Liberte, YOP, Perle de Lait, Petits Filous and Panier. The Company�� refrigerated and frozen dough products consists of Pillsbury, the Pillsbury Doughboy character, Grands!, Golden Layers, Big Deluxe, Toaster Strudel, Toaster Scrambles, Simply, Savorings, Jus-Rol, Latina, Pasta Master, Wanchai Ferry, V.Pearl and La Saltena. The dry dinners and shelf stable and frozen vegetable products includes Betty Crocker, Hamburger Helper, Tuna Helper, Chicken Helper, Old El Paso, Green Giant, Potato Buds, Suddenly Salad, Bac*O��, Betty Crocker Complete Meals, Valley Selections, Simply Steam, Valley Fresh Steamers, Wanchai Ferry, Diablitos and Parampara. Its gr! ain, fruit, and savory snacks consists of Nature Valley, Fiber One, Betty Crocker, Fruit Roll-Ups, Fruit By The Foot, Gushers, Chex Mix, Gardetto��, Bugles, Food Should Taste Good and Larabar. The sessert and baking mixes includes Betty Crocker, SuperMoist, Warm Delights, Bisquick and Gold Medal. Ready-to-serve soup consists of Progresso. The Company�� ice cream and frozen desserts include Haagen-Dazs, Secret Sensations, Cream Crisp and Dolce. Its frozen pizza and pizza snacks includes Totino��, Jeno��, Pizza Rolls, Party Pizza, Pillsbury Pizza Pops and Pillsbury Pizza Minis. General Mills�� organic products include Cascadian Farm and Muir Glen.

The Company�� products are marketed under trademarks and service marks that are owned by or licensed to the Company. Some of the brand names include Dora the Explorer, Disney Cars, and Disney Princesses for yogurt, and Dora the Explorer for cereal; Reese's Puffs for cereal; Hershey's chocolate for a variety of products; Weight Watchers as an endorsement for soup and frozen vegetable products; Macaroni Grill for dry and frozen dinners; Sunkist for baking products and fruit snacks; Cinnabon for refrigerated dough, frozen pastries, and baking products; Bailey's for super-premium ice cream, and a range of characters and brands for fruit snacks, including Scooby Doo, Batman, Tom and Jerry, Ocean Spray, Thomas the Tank Engine, My Little Pony, Transformers, and various Warner Bros. and Nickelodeon characters. Its primary customers include grocery stores, mass merchandisers, membership stores, natural food chains, drug, dollar and discount chains, commercial and noncommercial foodservice distributors and operators, restaurants, and convenience stores.

U.S. Retail segment

The Company�� U.S. Retail segment reflects business with a range of grocery stores, mass merchandisers, membership stores, natural food chains, and drug, dollar and discount chains operating throughout the United States. Its product categories in thi! s busines! s segment include ready-to-eat cereals, refrigerated yogurt, ready-to-serve soup, dry dinners, shelf stable and frozen vegetables, refrigerated and frozen dough products, dessert and baking mixes, frozen pizza and pizza snacks, grain, fruit and savory snacks, and a range of organic products, including granola bars, cereal and soup.

International segment

The Company�� International segment consists of retail and foodservice businesses outside of the United States. In Canada, its product categories include ready-to-eat cereals, shelf stable and frozen vegetables, dry dinners, refrigerated and frozen dough products, dessert and baking mixes, frozen pizza snacks, refrigerated yogurt, and grain and fruit snacks. In markets outside North America, its product categories include super-premium ice cream and frozen desserts, refrigerated yogurt, grain snacks, shelf stable and frozen vegetables, refrigerated and frozen dough products, and dry dinners. Its International segment also includes products manufactured in the United States for export, mainly to Caribbean and Latin American markets, as well as products it manufactures for sale to its international joint ventures.

Bakeries and Foodservice segment

In Company�� Bakeries and Foodservice segment its product categories include cereals, snacks, refrigerated yogurt, unbaked and fully baked frozen dough products, baking mixes, and flour. It sells to distributors and operators in many customer channels, including foodservice, convenience stores, vending and supermarket bakeries.

Advisors' Opinion:
  • [By Rick Munarriz]

    I went out on a limb last week, and now it's time to see how that decision played out.

    I predicted that BlackBerry (NASDAQ: BBRY  ) would close lower on the week. With the company heading into its first quarterly report detailing the arrival of new devices running on its updated mobile operating system, I thought the shares were ready for a breather. The stock had already more than doubled since bottoming out last summer. The shares got crushed on Friday after reporting a surprising loss for the period. BlackBerry shares plunged 24% on the week. I was right. I predicted that the tech-heavy Nasdaq would outperform the Dow Jones Industrial Average (DJINDICES: ^DJI  ) . This has been a tricky call lately, so how did it play out this time? Well, the market bounced back this week. The Nasdaq moved 1.4% higher, and the Dow managed to close just 0.7% higher. I was right. My final call was for General Mills (NYSE: GIS  ) to beat Wall Street's income estimates in its latest quarter. The cereal giant has been posting blowout quarterly results over the past year, and I was banking on seeing the trend continue. Analysts were looking for a profit of $0.53 a share during the quarter, and it landed in line with where the pros were perched. I was wrong.

    Two out of three? Bummer! I can do better than that.

  • [By WhisperNumber]

    General Mills (GIS) is expected to report earnings on Wednesday, June 26th. The whisper number is $0.52, one cent behind the analysts' estimate. Whispers range from a low of $0.47 to a high of $0.55. GIS has a 67% positive surprise history (having topped the whisper in 22 of the 33 earnings reports for which we have data).

  • [By DailyFinance Staff]

    Investors took a wait-and-see attitude Tuesday, but airline stocks lost altitude. The market is in a holding pattern until 2 p.m. Wednesday, when the Fed reveals details of this week's FOMC policy meetings, and whether it's ready to begin cutting back on its main economic stimulus program. If it does begin to taper, the next debate will begin immediately: Is that good or bad for investors? On Wall Street today, the Dow Jones industrial average (^DJI) edged down 9 points, the Nasdaq composite (^IXIC) fell nearly 6, and the Standard & Poor's 500 index (^GPSC) lost 5 points. The Dow's gainers were led by a pair of companies hiking their dividends. 3M (MMM), which makes everything from Post-It notes to medical equipment, rose 3 percent after increasing its payout by 35 percent. And Boeing (BA) rose 1 percent. It boosted the dividend by 50 percent and announced a big stock buyback. The other big blue chip winner was Visa (V), which gained another 2.5 percent. Its stock is now up 43 percent from a year ago. On the downside, Verizon (VZ), IBM (IBM), McDonald's (MCD) and Microsoft (MSFT) all lost about one percent. Microsoft says it will not name a new CEO until next year. And airline stocks were broadly lower. United (UAL) and Delta (DAL) both fell 3 percent. American Airlines (AAL), which completed its merger with U.S. Airways last week, fell 2 percent. And Southwest (V) also lost 2 percent. Brokerage recommendations gave a boost to several issues. Data storage companies Seagate (STX), up 3 percent, and Western Digital (WDC), up 2.5 percent, following JP Morgan upgrades. And iRobot (IRBT) surged 17 percent after Raymond James gave it a 'strong buy.' Shares of Facebook (FB) rose 2 percent, hitting an all-time high. The social media giant is rolling out new video ads this week. That's expected to boost revenue. The question is, will it alienate users? On the downside, Targacept (TRGT) lost more than a third of its value. A clinical trial of its schizophreni

Top Consumer Stocks To Watch Right Now: JAKKS Pacific Inc.(JAKK)

JAKKS Pacific, Inc. designs, produces, markets, and distributes toys and consumer products worldwide. The company offers traditional toys and electronics, such as action figures and accessories, including licensed characters under Pokemon name; toy vehicles and accessories under Road Champs, Fly Wheels, and MXS names; electronics products under EyeClops Bionic Eye, Laser Challenge, and Plug It In & Play TV Games names; dolls and accessories, including small and large dolls, fashion dolls, and baby dolls under Disney Princess, Disney Fairies, Cabbage Patch Kids, Taylor Swift, Fancy Nancy, Hello Kitty, Graco, and Fisher Price names; private label products; pet products, including toys, consumables, and accessories under American Kennel Club and The Cat Fanciers? Association; and vehicles, play sets, plush products, construction toys, and infant and pre-school toys. It also offers role play, novelty, and seasonal toys, including food play and activity kits under Girl Gourmet, Creepy Crawlers, and BloPens names; role-play, dress-up, pretend play, and novelty products for boys and girls under Black & Decker, McDonald?s, Dirt Devil, Disney Princess, Disney Fairies, Barbie, and Dora the Explorer names; indoor and outdoor kids? furniture, activity trays, tables and room d Advisors' Opinion:

  • [By Chandan Dubey]

    Background: Jakks Pacific (JAKK) is a company which I started following after it was suggested as a special situation by Adib Motiwala [gurufocus]. Oaktree Capital approached Jakks with an interest to acquire it at $20 a share. The company was trading at around $15 at that time. In September 2011, Oaktree went public with the offer but Jakks management adopted poison pill in an attempt to rebuff the plan [bloomberg]. The company now trades at $5 and change. The question is, is it cheap enough to buy?

  • [By Sean Williams]

    JAKKS Pacific (NASDAQ: JAKK  ) shares, for instance, were massacred last week after it lowered its full-year sales guidance by more than 10%, revised its full-year forecast from a modest profit to a hefty loss, and suspended its quarterly dividend indefinitely. Without its Pokemon licensing, JAKKS is struggling to find new sources of revenue growth.

  • [By Roberto Pedone]

    One under-$10 toy player that's trending very close to triggering a major breakout trade is Jakks Pacific (JAKK), which is a producer and marketer of children's toys and other consumer products. This stock has been destroyed by the bears so far in 2013, with shares off sharply by 60%.

    If you take a look at the chart for Jakks Pacific, you'll notice that this stock has been downtrending badly for the last two months and change, with shares plunging from its high of $11.75 to its recent low of $4.82 a share. During that downtrend, shares of JAKK have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of JAKK look like they might be ready to see an end to its downside volatility in the short-term if the recent lows can hold. I believe this due to the fact that JAKK has started to move sideways and trend within range of triggering a major breakout trade.

    Traders should now look for long-biased trades in JAKK if it manages to break out above some near-term overhead resistance levels at $5.08 to $5.27 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 695,817 shares. If that breakout triggers soon, then JAKK will set up to re-test or possibly take out its next major overhead resistance levels at $5.68 to its 50-day moving average at $6.07 a share. Any high-volume move above its 50-day will then put $7 to $8 into range for shares of JAKK.

    Traders can look to buy JAKK off weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support levels at $4.87 to $4.82 a share. One can also buy JAKK 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 Sean Williams]

    What: The fun and games are over for toy and consumer products maker JAKKS Pacific (NASDAQ: JAKK  ) , which saw its shares get mauled by 37% after reporting its second-quarter results.

Top Consumer Stocks To Watch Right Now: Latteno Food Corp (LATF)

Latteno Food Corp. (Latteno), incorporated on August 24, 1994, is engaged in acquiring, organizing, developing and upgrading companies in the international food and beverage market. Latteno is specializing in the dairy industry and coffee industry. The Company operates through its subsidiary in Brazil. On February 10, 2010 Latteno acquired Global Milk Businesses and Administration of Private Properties Ltda. (Global Milk). Global Milk holds the rights of certain intellectual property of the brand name products manufactured and sold under the brand name Teixeira. In March 2013, the Company acquired Green Cannabis Collective Inc.

Latteno is leasing an instant and roasted coffee factory located in Cruzeiro, Sao-Paulo, which was property the Company previously owned under its BDFC Brasil Alimentos Ltda (BDFC) subsidiary. In addition to the lease, the Company has maintained ownership of four brand names, Samba Cafe, Vivenda, Torino and Brazilian Best, used in the past by Latteno to sell its instant and roasted coffee across the world. The Company engaged the service companies to assist with its operations, such as Log-Frio Ltda, SigaSolutions Ltda, Microsiga Ltda and Varistao Transportes Ltda.

The Company competes with Nestle, Companhia Cacique de Cafe Soluvel, Cafe Soluvel Brasilia and Companhia lguacu de Cafe Soluvel.

Top Consumer Stocks To Watch Right Now: Vishay Precision Group Inc.(VPG)

Vishay Precision Group, Inc. designs, manufactures, and markets components based on resistive foil technology, sensors, and sensor-based systems in the United States, Europe, and Asia. The company?s products include precision foil resistors, foil strain gages, transducers and load cells, modules, instruments, weighing and control systems, and PhotoStress coatings and instruments; and sensors that convert mechanical inputs into an electronic signal for display, processing, interpretation, or control by the company?s instrumentation and systems products. Its products are used in waste management, bulk hauling, logging, scales manufacturing, engineering systems, pharmaceutical, oil, chemical, steel, paper, and food industries, as well as in military/aerospace, medical, agriculture, and construction markets. The company sells its products through original equipment manufacturers, electronic manufacturing services companies, and independent distributors, as well as directly t o end-use customers. Vishay Precision Group, Inc. was founded in 1962 and is headquartered in Malvern, Pennsylvania.

Advisors' Opinion:
  • [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 Vishay Precision Group (NYSE: VPG  ) , whose recent revenue and earnings are plotted below.

  • [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 Vishay Precision Group (NYSE: VPG  ) , whose recent revenue and earnings are plotted below.

Top Consumer Stocks To Watch Right Now: Spectris(SXS.L)

Spectris plc designs, develops, and markets productivity-enhancing instrumentation and controls worldwide. It operates in four segments: Materials Analysis, Test and Measurement, In-line Instrumentation, and Industrial Controls. The Materials Analysis segment provides a range of analytical instrumentation and systems for particle and material characterization. These products have applications in pharma/life sciences, metals/mining, semiconductor/electronics, and research industries. The Test and Measurement segment supplies test, measurement, and analysis equipment and software for product design optimization, manufacturing control, and environmental monitoring. The In-line Instrumentation segment provides process analytical measurement, asset monitoring, and on-line controls for primary processing and the converting industries. The Industrial Controls segment supplies automation and control products for the discrete manufacturing industries. The company was formerly known as Fairey Aviation Company Ltd. and changed its name to Spectris plc in May 2001. Spectris plc was founded in 1915 and is based in Egham, the United Kingdom.

Top Consumer Stocks To Watch Right Now: PREMIER FOODS ORD GBP0.01(PFD.L)

Premier Foods plc engages in manufacturing, processing, and distributing branded and retailer branded food products. The company operates in three divisions: Grocery, Hovis, and Chilled. The Grocery division offers grocery products, including cakes, soups, vegetables, stocks, gravies, spreads, desserts, home baking, cooking sauces, Asian meals, pickles, and beverages. It also provides noodles, rice, pasta, baked beans, vinegar, instant mash potatoes, custard and milk products, desserts, preserves, marmalades, honey and lemon curd, peanut butter, powdered milk creamer, Asian sauces and condiments, salt, stuffing mixes, suet, flours, and baking mixes, as well as small cakes and jam tarts, fruit pies, whole cakes, Swiss rolls, mini rolls, and cake bars. This division sells its products primarily under Batchelors, Mr Kipling, Bisto, Ambrosia, Branston, Sharwood?s, Hartley?s, Loyd Grossman, Oxo, Lyons, and Cadbury brand names. The Hovis division provides wrapped bread, frozen part-baked products, morning goods, and frozen pizza bases; and a range of bulk and bagged flours. This division offers its products primarily under Hovis, Granary, and Mother?s Pride brand names. The Chilled division offers chilled ready meals, celebration cakes, Christmas puddings, and chilled desserts under Brookes and Avana brand names. It serves multiple retailers, wholesalers, foodservice providers, food manufacturers, cash and carry depots, and convenience stores primarily in the United Kingdom and other countries in Europe. Premier Foods plc is headquartered in St Albans, the United Kingdom.

Top Consumer Stocks To Watch Right Now: Sun Hung Kai & Co Ltd (86)

Sun Hung Kai & Co. Limited is an investment holding company. Through its subsidiaries, it operates in five segments: wealth management and brokerage, capital markets, asset management, consumer finance and principal investments. The Wealth Management and Brokerage segment provides financial planning and wealth management services; broking services and insurance broking; online financial services and online financial information; securities margin financing, and dealing in securities, funds, bullion, commodities, futures and options. The Capital Markets segment provides corporate finance services and structured finance. The Asset Management segment provides asset management, including funds marketing and management. The Consumer Finance segment provides consumer financing. The Principal Investments segment includes strategic investments, properties holding and rental.

Top Consumer Stocks To Watch Right Now: Tt Grp(TTG.L)

TT electronics plc engages in the manufacture and sale of electronic products for the manufacturers in the automotive, defence, aerospace, telecommunications, computing, medical, and industrial electronics markets. The company?s Components segment offers resistive components and microcircuits, connectors, interconnection systems, fixed and variable resistor products, optoelectronics, power modules, and control circuitry for multiple applications. Its Sensors segment provides electronic accelerator pedals, engine and wheel speed, temperature and pressure sensors, and chassis height sensors used for load levelling and electronic stability control applications primarily within office, industrial, and banking equipment. The company?s Integrated Manufacturing Services segment offers electronic manufacturing services, including engineering and design solutions; printed circuit board assembly cable and interconnect assembly; conformal coatings, pottings, and encapsulations; sys tems assembly and box build services; specialty services, such as cleanroom facilties and environmental testing; fulfillment services; and after-market services. Its Secure Power segment engages in the manufacture and service of standby generation and uninterruptible power systems. TT electronics plc sells its products through manufacturers' representatives and electronic distributors to original equipment manufacturers, original design manufacturers, and contract electronic manufacturers principally in the United Kingdom, rest of Europe, North America, Central and South America, and Asia. The company was formerly known as TT Group PLC and changed its name to TT electronics plc in 2000. TT electronics plc is based in Weybridge, the United Kingdom.

Top Consumer Stocks To Watch Right Now: China Sports Intl Limited (FQ8.SI)

China Sports International Limited, an investment holding company, engages in the design, manufacture, and sale of sports fashion footwear, and sports fashion apparel and accessories under the YELI brand. It also produces shoes for original equipment manufacturer customers under the Kappa brand name. The company sells its products through distributors in approximately 20 provinces in the People�s Republic of China, as well as exports its products to Europe, the Middle East, South America, Asia, and South Africa. China Sports International Limited was founded in 1998 and is based in Jinjiang, the People�s Republic of China.

Saturday, February 1, 2014

The Kip 25 Funds That Worry Us

The Kiplinger 25 doesn't change much, but when it does, it's for a good reason. When a fund closes to new investors, for instance, we replace it. Asset bloat (too much money) is another reason for a switch; so is persistent bad performance.

See More: The Kiplinger 25 at a Glance

Seven Kip 25 funds are currently on our watch list. That doesn't mean we're going to dump them, but it does mean we see potential problems that might lead to subpar performance. As a prelude to our annual Kiplinger 25 blowout, which will appear in the May issue of Kiplinger's Personal Finance magazine, here's a list of seven funds that concern us and why.

Top Gold Stocks To Own For 2015

A huge asset base has tripped up many great funds. Once a fund gets too big, it becomes difficult for a manager to buy and sell securities without pushing their prices in the wrong direction—up while they buy, down as they sell. The poster child for the disease of asset bloat is Fidelity Magellan (FMAGX), which was once the biggest mutual fund in the land but has been a mediocre performer for most of the past 15 years. Could Kip 25 members Fidelity Contrafund (FCNTX) and Fidelity Low-Priced Stock (FLPSX) be on a similar path? The wonderfully talented Will Danoff and Joel Tillinghast have run Contra and Low-Priced, respectively, for decades. But success has made these funds obese. Contrafund has $111 billion in its coffers; Low-Priced Stock, with $48 billion, is the largest fund in the country with a focus on midsize companies.

Baron Small Cap (BSCFX) is bulky, too, relatively speaking. The fund has $5.9 billion in assets, which manager Cliff Greenberg says is manageable but which seems awfully large for a fund with "Small Cap" in its name. Despite holding fewer assets, many of Baron's better-performing peers have already closed to new investors.

When poor short-term performance starts to drag down long-term returns, we take notice. Two Kip 25 funds fall into this category: Artisan Value (ARTLX), which focuses on stocks of large domestic companies, and Harbor International (HIINX), which buys foreign stocks. Both funds now lag their respective benchmarks over the past three years through January 29.

Artisan Value has lagged its peers—funds that invest in large undervalued stocks—in each of the past two years. Harbor International is in better shape. It outperformed the typical foreign stock fund in 2011 and 2012, but its 2013 return—which trailed three-fourths of its peers—has dragged down the fund's three-year results. Harbor Bond (HABDX) had a tough 2011, and then it struggled in 2013. Its 1.5% loss last year trailed the typical taxable intermediate-term bond fund by a smidge, although it beat the Barclays Aggregate U.S. Bond index by 0.6 percentage point. But Pimco, which runs Harbor Bond as a near-clone of its flagship Total Return fund (PTTDX), seems to be at an inflection point. Mohamed El-Erian, Pimco's chief executive and co-chief investment officer, is leaving the firm in March. Kiplinger columnist Steve Goldberg has expressed concern that with El-Erian's departure, no one with stature will be left to challenge the views of Pimco's other chief investment officer, Bill Gross, who runs both Total Return and Harbor Bond.

On top of that, Gross's wide scope of responsibilities concerns us. In total, he runs 31 funds and is responsible for a stunning $371 billion in assets under management. Something's gotta give, and we're worried that it will be performance.

Finally, there's T. Rowe Price Small-Cap Value (PRSVX). With $10.2 billion in assets, Small-Cap Value is the nation's third-largest small-company fund. But size hasn't been a hindrance—at least not yet. From the time manager Preston Athey took over the fund in 1991 through January 29, it has returned an annualized 12.9%. That trounced the Russell 2000 small-company index by an average of 2.8 percentage points per year. Few small-company funds have done better. But Athey is retiring in June, and the departure of a successful manager always raises alarms. His replacement, David Wagner, looks promising—at Price he earned a solid record running a fund designed for European investors. Nonetheless, we're watchful. Athey, the longest-tenured equity manager at Price, has a nearly peerless record.