Bank fees rise for 15th straight year

Bank fees rose for the 15th straight year, with fees for overdrafts and out-of-network ATM usage hitting record highs, according to Bankrate.com.

The average overdraft charge rose 3% in 2013, to a record $32.20, Bankrate says. The average cost for using another bank's ATM rose 2%, to $4.13 — also a record.

"Overdraft and out-of-network ATM fees are the low-hanging fruit in terms of raising fees," says Greg McBride, senior financial analyst for Bankrate.com.

Overdraft fees have risen so far that a recent study by Moebs Services says that it's cheaper to borrow $100 from a payday lender than it is to bounce a $100 check. The median price for a $100 loan from a payday lender is $18, Moebs says.

The fees in both cases are entirely avoidable, McBride says.

Overdraft fees were steepest in Milwaukee, where they average $34.16, and lowest in San Francisco, where they average $27.18.

Out-of-network ATM fees were highest in Denver, where they average $4.70, and lowest in Baltimore, when they average $3.59. The calculation includes the fee from the owner of the ATM and from your bank. The charge for using another bank's ATM rose 4%, to $2.60, while the average fee from your bank for using another bank's ATM fell 3%, to $1.53.

A few bank products became more affordable, according to the Bankrate survey of 10 banks in each of 25 large U.S. markets. The average minimum balance to offer a no-interest checking account fell 19% to $60.27 — about where it's been since 1998.

Good luck finding a free interest-bearing checking account: Just 3% were free to all customers, unchanged from 2012. But 95% of all the institutions surveyed would waive the fee if you kept an average balance of $5,802, down 5% from last year. Average monthly service fee fell 1% to $14.65. Average monthly service charge for a non-interest-bearing checking account: $5.54, up 1% from last year.

So far, fewer than 1% of banks charge for using a debit card.

"Fees continue to go up, and it's b! est to spend time strategizing how to avoid them," McBride says. "There's always room for consumers to shop around."

Banks do take notice when you leave, particularly when you take a big balance with you, McBride says. Seventy percent of consumers consider switching banks when checking account fees get too high, and those who are most likely to do so often have the highest balances.

Netflix Reveals Wildly Unique Way it Selects New Shows, Movies

To know how popular a TV show is, look no further than the number of illegal online downloads of the series.

Gearing up for a launch event in the Netherlands, Netflix (NFLX) Vice President of Content Acquisition Kelly Merryman explained how illegal downloading sites factor in to the decision-making process.

“With the purchase of series, we look at what does well on piracy sites," she told the news site Tweakers.

Merryman cited Prison Break as one such show that was so popular in the online downloading world, Netflix decided to purchase broadcasting rights for the show.

In a separate interview Netflix CEO Reed Hastings adds that his company is aware of the many people who download content without permission via torrent sites. However, this is not exclusively a bad thing, as it also creates demand for the content Netflix is offering.

"Certainly there's some torrenting that goes on, and that's true around the world, but some of that just creates the demand," Hastings says.

In the past, Netflix has noted that it is killing these illegal downloading sites — pointing out the BitTorrent traffic dropped 50% in Canada after the site launched there three years ago.

Eventually these BitTorrent users may want to switch to Netflix as it's a much better user experience than torrenting, according to the CEO.

Everything Still Looks Bullish - In The Rear-View Mirror

In his 1999 warning that the stock market over the next 17 years "will not perform anything like it performed in the past 17 years", Warren Buffett made several other interesting observations.

He said [in 1999], "Investors in stocks these days are expecting far too much. . . . . . Once a bull market gets under way, and once you reach the point where everybody has made money no matter what system he or she followed, a crowd is attracted into the game that is responding not to interest rates and profits, but simply to the fact that it seems a mistake to be out of stocks. In effect, these people superimpose an I-can't-miss-the-party factor on top of the fundamental factors that drive the market. . . . . . . Investors project out into the future what they've been seeing. That's their unshakable habit: looking into the rear-view mirror instead of through the windshield. . . . Staring back at the road just travelled [this was in 1999] most investors have rosy expectations."

If we do that now, we sure see no problems.

iShares takes next step to woo retail investors, fend off Vanguard

BlackRock Inc.'s exchange-traded-fund arm iShares is extending its popular core series to include managed-ETF portfolios as it continues to ramp up efforts to court mom-and-pop investors and stave off a charging Vanguard.

iShares, the largest ETF company, has always been a favorite among institutional investors, but last October, it launched its initial wave of low-cost “core” ETFs to better reach retail and buy-and-hold investors.

The expanded focus came about as The Vanguard Group Inc., the third-largest ETF company and best known for its low-cost products, was rapidly gaining market share.

Vanguard's market share has risen to 19%, from 9% in 2009, while iShares has seen its share slip to 40%, from 47%, according to Morningstar Inc.

Vanguard has continued to increase its ETF assets rapidly this year.

It took in $36.6 billion in new money through the end of last month, more than double iShares' $17.3 billion in net deposits, according to Morningstar.

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The core series, 10 low-cost building-block ETFs that include traditional large-cap, international and bond exposure, has struck a chord with investors so far.

The 10 ETFs, which include classic building blocks such as large-caps, international stocks and U.S. bonds, have grown to almost $100 billion, from $73 billion at the beginning of the year.

The newly proposed managed-ETF portfolios will be ETFs of ETFs and focus on target risk allocations. The iShares Core Allocation Moderate Growth ETF, for example, will use a combination of iShares ETFs to construct a traditional portfolio of 60% stocks and 40% bonds.

Conservative, moderate and aggressive growth ETF portfolios are also planned.

The initial filings with the Securities and Exchange Commission didn't include expense ratios, but given the core series' focus on low costs, it would be surprising if the ETF portfolios weren't cheaper than comparable mutual funds.

The average moderate allocation mutual fund, for example, has an expense ratio of 89 basis points, according to Morningstar.

Target allocation mutual funds have been always been popular with retail investors and smaller investors who use financial advisers, but iShares may have its hands full converting them to a target allocation ETF, said Jeff Tjornehoj, senior research analyst at Lipper Inc.

“If you're a retail investor you usually like ETFs for the tradability,” he said.

The growing number of fee-only advisers, however, could find the allocation ETFs more appea! ling than mutual funds, Mr. Tjornehoj said.

“It's cost-effective for investors who are too small to warrant extensive portfolio building,” he said.

Melissa Garville, spokeswoman for iShares, declined to comment while the ETFs are in registration.

Put Savient Pharmaceuticals on Your Watchlist. Here's Why. (SVNT)

It's still too soon to say Savient Pharmaceuticals Inc. (NASDAQ:SVNT) is off and running. In fact, the stock's decidedly NOT off and running yet. But, it's not too soon to put SVNT on your watchlist of potential breakout candidates, as it's much closer to a breakout than most anyone can see.

Just to set the stage here, the nearby weekly chart of SVNT tells us with more than a little clarity that shares have been working their way into the tip of a wedge shape for a few months. Though we're not quite to the point part of the triangle formation yet, we're getting close, and we're already at the point where traders start to fish for a little more elbow room, meaning that slingshot pressure is brewing. In other words, Savient Pharmaceuticals may not actually move all the way into the point of the triangle pattern before getting squeezed out of it.

When you zoom into the daily chart of Savient Pharmaceuticals Inc., however, that's when we really start to see some of the more important - though more philosophical - bullish hints.

We can still see the rising support line here that makes the lower edge of the wedge shape on the weekly chart. What you can also see here on the daily chart is how SVNT has wiggled its way above several short-term moving average lines... the 20-day line (blue), the 50-day average (purple), and the 100-day moving average line (gray). Crosses above those lines are clearly bullish, and moving above all of them means Savient is bullish in all three key timeframes (which is an important condition in itself). It's the proverbial X-factor of the cross above all three key moving averages such a bullish clue now, however.

Ever heard the phrase "periods of low volatility are followed by period of high volatility, and periods of high volatility are follower by periods of low volatility"? It's one of the market's many cliches, but like so many trading-related cliches, it's true. The relevance now is, SVNT has been in a low-volatility phase of late. Though we've seen some mild swings within the framework of the wedge pattern, the fact that all three of those key moving average lines are converge so tightly confirms that Savient Pharmaceuticals haven't actually made much progress in either direction in quite some time.

The implication is, a period of high volatility is around the corner, poised to de-coil the spring that got wound so tight since May as SVNT became a less and less volatile stock. Given that shares are getting comfortable above those key moving average lines, odds are that volatility is going to be unleashed in a bullish direction.

It's not happening yet, but it's definitely worth keeping on your radar. A move above $0.75 would do the trick, and a healthy move above the 200-day moving average line (green) at $0.81 would most definitely light the bullish fires.

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3 Small-Cap Dividend Stocks With Big Yields

When investors looks for dividends, they often opt for venerable blue-chips like Verizon (VZ), Procter & Gamble (PG) or McDonald’s (MCD). But it’s important to remember that size — or the size of the company, that is — isn’t everything.

Instead, some small-cap stocks — with market capitalization under the $2 billion mark — offer some hefty payouts as well, with many yields sitting in double digits.

Sure, playing such dividend stocks obviously comes with a little more risk, but the small size also means there’s more potential for reward. A sleepy telecom like Verizon might give you steady income, but its shares are never going soar. With small-caps, on the other hand, share appreciation — and rapid share appreciation at that — isn’t out of the question.

With that in mind, let’s take a look at three small-cap dividend stocks boasting big-time yields and thus providing investors the opportunity for a double bonus of solid stock gains and sweet income.

Capstead Mortgage Corp.

Market cap: $1.2 billion
Dividend yield: 9.9%

Of course, we have to start with a real estate investment trust (REIT). One of the best REITs right now looks to be Capstead Mortgage Corp. (CMO); it’s gained 9% so far this year as its similarly sized peers all sit in the red.

This dividend stock has been steady, even if its payments haven't been marching upward. Of course, a downward trend is to be expected when you consider that earnings fell by around 10% per year over the past half-decade.

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The good news, though, is that the current 31-cent quarterly payout is slightly higher than the previous 30-cent quarterly payout, and is good for a yield just under 10%.

Plus, the company's earnings are expected to regain some ground in the coming years. Five-year annualized growth is estimated to be in the double digits.

Breitburn Energy Partners

Market Cap: $1.8 billion 
Dividend Yield: 10.6%

Breitburn Energy Partners (BBEP) is independent oil and gas partnership with assets across the U.S., including crude oil and natural gas reserves in Michigan's Antrim Shale, Wyoming's Powder River Basins and California's San Joaquin Basins.

Of course, the most important detail of that previous sentence for investors is the word "partnership" — since Breitburn is an MLP, it is required to pay out at least 90% of its taxable income to shareholders. Right now, that translates to a 48-cent-per-share quarterly payout and an annual yield north of 10%.

Another promising sign, though, is the energy company's focus. Crude oil has been climbing over the past year, including a jump this week. Meanwhile, natural gas prices have been on the way up since early August.

The stock has more or less muddled along since 2011, never fully recovering from the financial crisis. Still, it's managed to increase its dividend by 20% since 2007. Plus, the company's earnings are on pace to grow by 10% per year over the next half-decade.

Arlington Asset Investment Corp.

Market Cap: $447 million
Dividend Yield: 13.4%

Arlington Asset Investment Corp. (AI) is an investment firm that acquires mortgage-related and other assets — and that rewards investors with a juicy dividend.

The stock's dividend went from 35 cents per share in early 2010 to the current 88-cent per share quarterly payout it's been paying since mid-2011 and just once again declared.

For investors, that means a sweet 13% yield, even in the face of the stock's market-beating 25% year-to-date run.

The company is also a C  Corporation, meaning its dividends are eligible for a 23.8% federal income rate on qualified dividend income, according to the company's website, while dividends paid by a REIT are generally subject to tax at ordinary income rates — currently a maximum federal rate of just over 43%.

As of this writing, Alyssa Oursler did not hold a position in any of the aforementioned securities.

A Good Time to Buy Preferreds?

Mitchell Stapley, CFA, has an interesting theme for yield-seeking investors: preferred stocks, an intriguing and counterintuitive recommendation, given the environment of rising interest rates.

Stapley, who manages the Touchstone Flexible Income Fund (MXIIX), has roughly 40% of its assets in preferreds.

(The fund has about $294 million of assets and has earned a four-star rating from Morningstar on its institutional shares.)

As expected, recent rate increases have created headwinds for preferreds.

The S&P U.S. Preferred Stock Index produced a -5.69% price return year to date through Sept.6; the total return was -1.49% return for the same period.

Through Aug. 31, MXIIX had a total return of -1.66% for its institutional shares. (The S&P Preferred Index is not an exact benchmark, for the fund because the fund holds other fixed-income investments.)

What’s Stapley’s rationale for buying preferreds?

He cites several factors. The first is that his firm believes we’ve already experienced most of the expected interest rate increase.

Historically, he says, 10-year rates have a tendency to migrate toward the level of nominal GDP growth. Rates can move temporarily above and below that level but eventually trend back to it.

“As we get towards 3.25% and given the fact that we’ve come off of the 1.42% low, we’ve done more than two-thirds of the work,” he says. “That’s kind of our central tendency for rates right now, somewhere around 3.25%, give or take, plus or minus. But it’s not 4%, it’s not 5%, and the only way we get to that 4% or that 5% is if we would get some kind of real sharp uptick in economic activity.”

If you see that development, Stapley requests, let him know. “That’s not in my crystal ball or too any prognosticators’ out there,” he admits.

Preferreds’ yield advantage over straight debt securities is another attractive feature, according to fund manager. He cites cumulative securities issued by JP Morgan (JPM) as examples.

The yield on the bank’s straight five-year debt has been topping out around 2%, he says. In contrast, he can buy the bank’s cumulative preferreds with a $25 par value and earn over a 5% yield.

That raises the obvious issue: There must be a risk-tradeoff to earn the higher yield, right?

“With that cumulative preferred, if JP Morgan suspends the dividend on their equity, they also suspend the dividend on that preferred,” Stapley explains. “That’s my risk. My risk as an investor is that Jamie Dimon will decide that he had to suspend his dividend payment on his common.”

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But, he adds, the likelihood of a dividend suspension on the common shares triggering a dividend suspension on the preferreds “is pretty low.”

This means “we’re willing to take that 300 (basis points) plus yield advantage to own the preferred versus owning the debt,” explains Stapley.

The final factor he cites is the market structure for preferreds.

Preferreds can range from securities that are basically senior bonds in the issuer’s capital structure to non-cumulative issues that behave more like equity. That complexity, combined with a relatively illiquid market in comparison to Treasurys or large-cap stocks, creates inefficiencies and opportunities, he maintains.

“We’re very seasoned portfolio managers in terms of the preferred market or the convert [convertibles] market,” says Stapley. “We know the names, we know the issuers, [and] we know how they lay out in terms of deal structure. We can go in there and look for those mispriced opportunities because you don’t have a lot of people following it.”

Research by senior closed-end fund analyst Cara Esser at Morningstar confirms Stapley’s contention that active management can benefit investors in preferreds.

(Most actively managed funds that invest in preferreds use do so via closed-end funds (or CEFs), experts say.)

In an article published earlier this year,  Esser noted: “There's some evidence suggesting actively managed preferred-share funds have had an edge over their passively managed [preferred-share-fund] rivals …  [E]very single CEF and mutual fund outperformed every single ETF and both indexes over the last year and over the last three years.”

Furthermore, of the funds with a five-year history, most closed-end funds--nine out of 12--and the single mutual fund beat both ETFs over five years, according to Esser. “Though only some of the CEFs have a 10-year history, all outperformed the Bank of America Merrill Lynch Preferred Index over the 10-year annualized period,” the Morningstar analyst concludes.

Top Analyst Upgrades and Downgrades: Beam, Halliburton, Nokia, Lululemon and More

Each morning 24/7 Wall St. reviews dozens and dozens of Wall Street analyst research reports looking for fresh ideas for investors and traders. Some are stocks to buy and others are stocks to sell. These are this Wednesday’s top Wall Street analyst upgrades, downgrades and initiations.

Accretive Health Inc. (NYSE: AH) was downgraded to Neutral from Outperform at Credit Suisse.

Beam Inc. (NYSE: BEAM) was downgraded to Hold from Buy based on valuation at Argus.

Covidien Ltd. (NYSE: COV) was started as Buy at Needham & Co.

Halliburton Co. (NYSE: HAL) was reinstated as Outperform and added to the U.S. Focus List with a new price target of $58 (versus $48.30 now) at Credit Suisse, and it was reiterated as Buy and the price target was raised to $63 from $58 by Sterne Agee.

J.C. Penney Co. Inc. (NYSE: JCP) was reinstated as a Neutral by Goldman Sachs.

Lululemon Athletica Inc. (NASDAQ: LULU) was reiterated as Neutral and noted cautiously with lowered earnings estimates by Sterne Agee until the new CEO situation and board room uncertainty is resolved.

Microsoft Corp. (NASDAQ: MSFT) was downgraded to Equal Weight from Overweight at Morgan Stanley based on the Nokia deal.

Nokia Corp. (NYSE: NOK) was raised to Market Perform from Underperform at Raymond James, raised to Neutral from Underperform at BNP Paribas, downgraded to Hold from Buy at Argus and was upgraded to Hold at Jefferies.

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Ryanair Holdings PLC (NASDAQ: RYAAY) was downgraded to Neutral from Buy at UBS.

Verizon Communications Inc. (NYSE: VZ) was reiterated as Buy and on the Focus List with a $59 price target at Argus, and it was raised to Outperform at RW Baird.

Stern Agee reports that there is potential for a minor DRAM-NAND disruption in Hynix Quxi supply, which would be a positive for both SanDisk Corp. (NASDAQ: SNDK) and Micron Technology Inc. (NASDAQ: MU). The report is based mostly on unconfirmed news of smoke at the Hynix’s Wuxi China fab.

UBS sees these top biotechs outperforming for the rest of 2013.

Oppenheimer has reinstated coverage on high-yield MLPs for dividend lovers.

Investors brace for clarity on Fed's taper

Fed Chairman Ben Bernanke first hinted in May that "in the next few meetings" the Fed may begin tapering its bond buying program. The initial comment sent stocks on a volatile ride. The market has since recovered.

NEW YORK (CNNMoney) After months of agonizing over the so-called "taper", investors will finally get some answers from the Federal Reserve this week.

At the conclusion of its two-day policymaking meeting on Wednesday, the U.S. central bank is expected to give a clear indication on when it will start to scale back on the massive economic stimulus programs that have fueled the growth and juiced financial markets since the financial crisis five years ago.

Chairman Ben Bernanke first hinted in May that the Fed may "in the next few meetings" begin tapering its policy of buying $85 billion in bonds each month. The initial comment sparked worry and confusion about the timing and the scale of the tapering, sending stocks on a volatile ride.

After some bumps, the stock rally has resumed, with the Dow and S&P 500 back up near their all-time highs. A key metric for measuring market volatility, the VIX, has dropped back to a level associated with calm markets, while CNNMoney's Fear & Greed Index sits in neutral.

But bond yields spiked after Bernanke's comment and continue to hover near two-year highs, with the Treasury's 10-year note yielding just below 3%. Because this is the benchmark on which other consumer loans are set, it has led to a spike in mortgage rates lately.

Experts say that these sharp moves will likely push the Fed to move cautiously as it curtails its bond buying program to help investors digest the change and limit market volatility.

"When the Fed starts to taper, it will only be taking its foot off the accelerator; it will not be stepping on the brake! ," said Gary Thayer, chief macro strategist at Wells Fargo Advisors.

Investors will also be closely listening to Bernanke's post-meeting press conference for specific details on these plans, and also the Fed's outlook on the economy.

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While all the focus is on the Fed this week, investors will have a few earnings reports to chew on, as FedEx (FDX, Fortune 500) and Oracle (ORCL, Fortune 500) open up their books. Also following Twitter's announcement last week that it is has filed for a planned IPO, investors will be on the watch for documents that reveal its financial information, even though there is the possibility the company might decide to keep that private for now too.

On the economic front, investors will have reports on regional manufacturing activity, inflation, housing starts and existing home sales to parse through.

And while Syria has been on the backburner in anticipation of a diplomatic deal for some time, investors may breathe an official sigh of relief after Russia and the United States reached a groundbreaking deal on a framework to eliminate the war-torn country's chemical weapons.

Are First Solar Investors Playing With Fire?

With shares of First Solar (NASDAQ:FSLR) trading at around $55.01, is FSLR an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

C = Catalyst for the Stock's Movement

First Solar is one of the most interesting stories on the planet. There are many arguments that can be made from the bullish and bearish sides. Prior to getting to positives and negatives, let's see what the analysts think. Most of them seem to be on the fence, but there are more bears than bulls: 2 Buy, 17 Hold, 8 Sell. It should also be noted that there is a 33.4 percent short position on the stock, which indicates that there are many non-believers.

As far as positives go, last quarter's revenue increased year-over-year, margins are solid, cash flow is strong, and increased solar modular sales helped First Solar swing to a profit for the quarter compared to a loss for the same quarter last year. First Solar has now delivered a profit four quarters in a row. In addition to that, operating expenses were down to $107.1 million from $533 million. FY2013 guidance is for revenue between $3.8 billion and $4.0 billion, which would indicate continued growth. First Solar also commented that the second half of the year should be stronger than the first half of the year.

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One big negative is that competitors are making cheaper solar panels due to a decline in the price of polysilicon. Another potential negative is that revenue has declined on a sequential basis. First Solar will layoff 150 North American employees in the coming weeks. This is after laying off 2,000 employees last year. Factory expansions have also been canceled. It's evident that First Solar is most focused on the bottom line. This isn't necessarily a negative for shareholders, but it does indicate that growth might not come as easy as many people think.

When it comes to company culture, it's average at First Solar. According to Glassdoor.com, employees have rated their employer a 3.3 of 5, and 52 percent of employees would recommend the company to a friend. An above average 71 percent of employees approve of CEO James A. Hughes.

The chart below compared fundamentals for First Solar, SunPower Corporation (NASDAQ:SPWR), and SolarCity Corp. (SCTY).

	FSLR	SPWR	SCTY
Trailing P/E	11.33	N/A	N/A
Forward P/E	16.02	25.64	N/A
Profit Margin	11.37%	-12.98%	-73.19%
ROE	11.98%	-31.00%	-32.92%
Operating Cash Flow	844.80M	316.47M	146.12M
Dividend Yield	N/A	N/A	N/A
Short Position	33.40%	29.90%	16.60%

Let's take a look at some more important numbers prior to forming an opinion on this stock.

T = Technicals Are Strong

The industry is on fire right now. Despite First Solar’s impressive run, it has actually underperformed its peers.

	1 Month	Year-To-Date	1 Year	3 Year
FSLR	41.08%	74.20%	293.5%	-51.14%
SPWR	118.1%	293.6%	335.4%	95.75%
SCTY	146.9%	321.5%	11.76%	11.76%

At $55.01, First Solar is trading well above its averages.

50-Day SMA	40.60
200-Day SMA	31.91

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E = Equity to Debt Ratio Is Strong

The debt-to-equity ratio is stronger than the industry average of 0.40.

	Debt-To-Equity	Cash	Long-Term Debt
FSLR	0.15	1.01B	562.66M
SPWR	0.80	505.59M	754.22M
SCTY	0.90	127.29M	282.15M

E = Earnings Have Weakened

Earnings have weakened on an annual basis, but revenue has consistently improved on an annual basis.

Fiscal Year	2008	2009	2010	2011	2012
Revenue ($) in millions	1,246	2,066	2,564	2,766	3,369
Diluted EPS ($)	4.24	7.53	7.68	-0.45	-1.11

When we look at the last quarter on a year-over-year basis, we see a substantial increase in revenue and earnings. However, there were significant declines in revenue and earnings on a sequential basis.

Quarter	Mar. 31, 2012	Jun. 30, 2012	Sep. 30, 2012	Dec. 31, 2012	Mar. 31, 2013
Revenue ($) in millions	497.05	957.33	839.15	1,075.01	755.21
Diluted EPS ($)	-5.20	1.27	1.00	1.74	0.66

Now let's take a look at the next page for the Trends and Conclusion. Is this stock an OUTPERFORM, a WAIT AND SEE, or a STAY AWAY?

T = Trends Might Support the Industry

There is an oversupply of solar panels, a pricing war exists, and solar panels are still too expensive. If alternative energy options become cheaper, then solar energy will be pushed to the side. Many people feel as though solar will take over and it will be the only option, but that's not the case. This will be a long and hard-fought battle for the industry. And competitors from other industries will always be present.

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Conclusion

The stock has serious momentum right now, and the trend is always your friend – until it stabs you in the back. In the near term, First Solar is an OUTPERFORM. There could be a lot more room to run. However, there will likely be a steep correction in the stock price over the next one to two years due to declining demand.

Is Goldman Sachs a Worthwhile Investment?

With shares of Goldman Sachs (NYSE:GS) trading around $164, is GS an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

Goldman Sachs is engaged in investment banking, securities, and investment management. It provides a range of financial services to a substantial and diversified client base that includes: corporations, financial institutions, governments, and high net worth individuals. The company operates in four segments: investment banking, institutional client services, investing and lending, and investment management. Through its segments, Goldman Sachs provides invaluable investment services to consumers and companies worldwide.

As a major player in the financial industry that fuels global economic expansion, Goldman Sachs is poised to see increased activity as developing countries grow and companies flourish. On Tuesday morning, Goldman Sachs reported upbeat earnings that destroyed the mean earnings and revenue analyst estimates. In addition, the company said Goldman Sachs and Charter Communications (NASDAQ:CHTR) are joining forces to try and acquire Time Warner Cable (NYSE:TWC). However, earlier in the year, Time Warner Cable turned down a merger with Charter Communications.

T = Technicals on the Stock Chart are Strong

Goldman Sachs stock has seen a powerful surge over the last year. The stock is now trading sideways, as it digests the gains from its impressive run. Analyzing the price trend and its strength can be done using key simple moving averages.

What are the key moving averages? They are the 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, Goldman Sachs is trading above its rising key averages, which signals neutral to bullish price action in the near-term.

(Source: Thinkorswim)

Taking a look at the implied volatility (red) and implied volatility skew levels of Goldman Sachs options may help determine if investors are bullish, neutral, or bearish.

	Implied Volatility (IV)	30-Day IV Percentile	90-Day IV Percentile
Goldman Sachs Options	21.74%	0%	0%

What does this mean? This means that investors or traders are buying a very small amount of call and put options contracts, compared to the last 30 and 90 trading days.

	Put IV Skew	Call IV Skew
August Options	Flat	Average
September Options	Flat	Average

As of today, there is average demand from call buyers or sellers, and low demand by put buyers or high demand by put sellers, all neutral to bullish over the next two months. To summarize, investors are buying a very small amount of call and put option contracts, and are leaning neutral to bullish over the next two months.

On the next page, let’s take a look at the earnings and revenue growth rate, and what that means for Goldman Sachs’s stock.

E = Earnings Are Rising Quarter-Over-Quarter

Rising stock prices are often strongly correlated with rising earnings and revenue growth rates. The last four quarterly earnings announcement reactions can also help gauge investor sentiment on Goldman Sachs’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for Goldman Sachs look like, and more importantly, how did the markets like these numbers?

	2013 Q2	2013 Q1	2012 Q4	2012 Q3
Earnings Growth (Y-O-Y)	107.87%	9.44%	203.29%	439.29%
Revenue Growth (Y-O-Y)	29.95%	1.42%	52.69%	132.80%
Earnings Reaction	-1.69%	-1.61%	4.05%	-1.02%

Goldman Sachs has seen rising earnings and revenue figures over the last four quarters. From these numbers, it seems the markets have expected more from Goldman Sachs’s recent earnings announcements.

P = Average Relative Performance Versus Peers and Sector

How has Goldman Sachs stock done relative to its peers, JPMorgan Chase (NYSE:JPM), Morgan Stanley (NYSE:MS), Citigroup (NYSE:C), and the overall sector?

	Goldman Sachs	JPMorgan Chase	Morgan Stanley	Citigroup	Sector
Year-to-Date Return	28.53%	27.48%	45.06%	32.33%	25.94%

Goldman Sachs has been an average relative performer, year-to-date.

Conclusion

Goldman Sachs is a major player in the financial industry, helping fuel global economic expansion. Recently, the company reported earnings that surpassed analyst expectations, and is also looking to acquire a stake in Time Warner Cable. The stock is now consolidating, after seeing an impressive run in the last year. Over the last four quarters, investors in the company have expected more from recent earnings reports, although earnings and revenue figures have been rising. Relative to its peers and sector, Goldman Sachs has been an average year-to-date performer. Look for Goldman Sachs to OUTPERFORM.

Best Tech Companies To Invest In Right Now

Hi-Tech Pharmacal Co., Inc. (HITK) reported fourth quarter fiscal 2013 (ended Apr 30, 2013) earnings of 50 cents per share, well below the Zacks Consensus Estimate of 68 cents and down 38.3% from the year-ago period. Lower-than-expected revenues contributed to the earnings miss in the final quarter of fiscal 2013.

Fourth quarter revenues were $58.5 million, down 4.6% year over year. Revenues missed the Zacks Consensus Estimate of $66 million.

Revenues at Hi-Tech Pharmacal were hurt by lower sales of Fluticasone nasal spray. Lower pricing hurt the sales of the drug. A slower-than-normal start to the allergy season also led to the weak revenues recorded in the quarter..

Fiscal year 2013 earnings were $2.28 per share, down 40.8% year over year. The Zacks Consensus Estimate for fiscal 2013 stood at $2.40 per share. Revenues in 2013 rose 10.4% year over year to $232.4 million. Revenues for 2013 were below the Zacks Consensus Estimate of $239 million.

Best Tech Companies To Invest In Right Now: Microsoft Corporation(MSFT)

Microsoft Corporation develops, licenses, and supports a range of software products and services for various computing devices worldwide. The company?s Windows & Windows Live Division segment offers PC operating system that primarily includes Windows 7 and Windows Vista operating systems; Windows live suite of applications and Web services; and Microsoft PC hardware products. Its Microsoft?s Server and Tools segment provides Windows Server operating systems, Windows Azure, Microsoft SQL Server, SQL Azure, Windows Intune, Windows Embedded, Visual Studio, Silverlight, system center products, Microsoft consulting services, and product support services. This segment also offers enterprise consulting services; and training and certification to developers and information technology professionals, as well as builds standalone and software development lifecycle tools for software architects, developers, testers, and project managers. The company?s Online Services Division segment provides online information and content through Bing, MSN portals, and adCenter, as well as Atlas online tools for advertisers. Its Microsoft Business Division segment offers Microsoft office; Microsoft Exchange; Microsoft SharePoint; Microsoft Lync; Microsoft Dynamics ERP and CRM; and Microsoft Office Web Apps, as well as office 365, an online service, offering Microsoft Office, Exchange, SharePoint, and Lync. The company?s Entertainment and Devices Division segment provides Xbox 360 entertainment platform, which includes the Xbox 360 gaming and entertainment console, Kinect for Xbox 360, Xbox 360 video games, Xbox LIVE, and Xbox 360 accessories; Mediaroom, an Internet protocol television software; and Windows Phone that provide Microsoft Office and Xbox LIVE functionality. It markets and distributes its products and services through original equipment manufacturers, distributors, and resellers, as well as through online. Microsoft was founded in 1975 and is headquartered i n Redmond, Washington.

Advisors' Opinion:

• [By Victor Mora]

  Microsoft is a software giant that will soon see a reorganization in hopes of increasing their competitiveness. The stock has been on a strong path to higher prices but is now digesting recent gains. Over the last four quarters, earnings have been mixed while revenue figures have been on the rise which have maintained investors optimistic about the company. Relative to its peers and sector, Microsoft has been a year-to-date performance leader. Look for Microsoft to continue to OUTPERFORM.

Best Tech Companies To Invest In Right Now: Cisco Systems Inc (CSCO.O)

Cisco Systems, Inc., incorporated on December 10, 1984, designs, manufactures, and sells Internet protocol (IP)-based networking and other products related to the communications and information technology (IT) industry and provide services associated with these products and their use. The Company provides a line of products for transporting data, voice, and video within buildings, across campuses, and around the world. Its products are designed to transform how people connect, communicate, and collaborate. Its products are installed at enterprise businesses, public institutions, telecommunications companies, commercial businesses, and personal residences. The Company has five segments: United States and Canada, European Markets, Emerging Markets, Asia Pacific, and Japan. The Emerging Markets theater consists of Eastern Europe, Latin America, the Middle East and Africa, and Russia and the Commonwealth of Independent States. In July 30, 2012, it acquired NDS Group Ltd. In October 2012, it acquired virtual networking company, vCider. In August 2011, the Company acquired Versly. In November 2011, it acquired BNI Video. In March 2012, the Company acquired Lightwire, Inc. In May 2012, the Company acquired ClearAccess. In December 2012, the Company acquired Cloupia. In December 2012, the Company acquired Cariden Technologies Inc. In December 2012, the Company acquired Meraki, Inc.

The Company�� product offerings fall into three categories: its core technologies, routing and switching; advanced technologies, and other products. In addition to its product offerings, the Company provides a range of service offerings, technical support services and advanced services. The advanced services program supports networking devices, applications, solutions, and complete infrastructures.

Routing

The Company offers a range of routers, from core network infrastructure for service providers and enterprises to access route rs for branch offices and for telecommuters and consumers a! t! home. Key products within its routing category are the Cisco ASR 901/903, Cisco 1000, 5000, and 9000 Cisco Aggregation Services Routers (ASR), as well as the Cisco ASR 800, 1900, 2900 and 3900 Cisco Integrated Services Routers (ISR):; Cisco CRS-1, 7600 and Cisco CRS-3 Cisco Carrier Routing Systems (CRS). During the fiscal year ended July 31, 2010 (fiscal 2010), Cisco introduced the Cisco CRS-3 Carrier Routing System (CRS-3) and Cisco 7600 Series Routers.

Service Provider Video

The Company�� end-to-end, digital video distribution systems and digital interactive set-top boxes enable service providers and content originators to deliver entertainment, information, and communication services to consumers and businesses around the world. Key product areas within its Service Provider Video category are: Set-Top Boxes, IP set-top boxes (both High-Definition (HD) and Standard Definition (SD)); Digital cable set-top boxes (both HD and SD); Cable Modem CP E (Data, EMTA, and Gateways); Videoscape Software Products and Headend Equipment (Encoders, Decoders, and Transcoders).

Switching

The Company�� switching products offer many forms of connectivity to end users, workstations, IP phones, access points, and servers, and also function as aggregators on local-area networks (LANs), metropolitan-area networks (MANs), and wide-area networks (WANs). Its switching systems employ several widely used technologies, including Ethernet, Power over Ethernet, Fibre Channel over Ethernet, Packet over Synchronous Optical Network, and Multiprotocol Label Switching. Many of its switches are designed to support an integrated set of advanced services, allowing organizations to be more efficient by using one switch for multiple networking functions rather than multiple switches to accomplish the same functions.

Cisco offers a family of Ethernet switching solutions from fixed-configuration switches for small and medium-sized businesses to modular switches for ente! rpr! ises! and ! service providers. Its fixed-configuration switches are designed to provide a foundation for converged data, voice, and video services. Key products within its switching category are the Cisco Catalyst 2960, 3560, 3750, 4500 and 6500 Series; the Cisco Nexus 2000, 3000, 5000 and 7000 Series switches; and MDS Series: MDS 9000.

Fixed-configuration switches are designed to cover a range of deployments in small and medium-sized businesses. It fixed-configuration switches are designed to provide a foundation for converged data, voice, and video services. They range from small, standalone switches to stackable models that function as a single, scalable switching unit. Modular switches are typically utilized by enterprise and service provider customers. Fixed-configuration and modular switches also include products such as optics modules which are shared across multiple product platforms.

NGN Routing

Routing technology is fundamental to the Internet, and this technology interconnects public and private IP networks for mobile, data, voice, and video applications. The Company's NGN Routing products are designed to enhance the intelligence, security, reliability, scalability, and level of performance in the transmission of information and media-rich applications. It offers a broad range of routers, from core network infrastructure and mobile Internet network for service providers and enterprises to access routers for branch offices and for telecommuters and consumers at home. Key product areas within its NGN Routing category are, Cisco Aggregation Services Routers: Cisco ASR 901/903, Cisco ASR 1000, Cisco ASR 5000 and Cisco ASR 9000. Cisco Integrated Services Routers: Cisco ISR 800, Cisco ISR 1900, Cisco ISR 2900 and Cisco ISR 3900. Cisco Carrier Routing Systems: Cisco CRS-1, Cisco CRS-3 and Cisco 7600 Series Routers.

Security

Cisco security solutions deliver identity, network and content security solutions designed to enable customers to r! educe t! ! he impact! of threats and realize the benefits of a mobile, collaborative, and cloud-enabled business. The products in this category span firewall, intrusion prevention, remote access, virtual private networks (VPNs), unified clients, network admission control, Web gateways, and email gateways. Its AnyConnect Secure Mobility Client solution enables users to access networks with their mobile device of choice, including laptops and smartphone-based mobile devices, while allowing organizations to manage the security risks of networks. Its cloud-based Web security service is designed to provide real-time threat protection and to prevent malware from reaching corporate networks, including roaming or mobile users. It focuses on a proactive, layered approach to counter both existing and emerging security threats. During the fiscal year ended July 28, 2012, it introduced the Cisco ASA 5500-X Series Midrange Security Appliance, Cisco Security Manager 4.3, the IPS 4500 Series, and Prime Securit y Manager.

Wireless

The Cisco Unified Wireless Network aims to harness the network to solve business problems, uniting high-performance wireless access across campus, branch, remote and outdoor environments. Its offerings include wireless access points (including the Cisco Aironet product family), controllers, antennas, and integrated management. The Company�� offerings provide users with simplified management and mobile device troubleshooting features which are designed to reduce operational cost and maximize flexibility and reliability. It is also investing in custom chipsets to deliver functions such as CleanAir proactive spectrum intelligence, ClientLink acceleration for mobile devices and VideoStream multicast optimization technology.

Data Center

The Company�� data center product category has been its major product category for the past two fiscal years. Cisco Unified Computing System (UCS) and Server Access Vi rtualization form the core of the Data Center pr! oduct cat! ego! ry. Key p! roduct areas within its Data Center product category are: Cisco UCS B-Series Blade Servers, Cisco UCS C-Series Rack Servers and Cisco UCS Fabric Interconnects.

Other Products

The Company�� other products category primarily consists of Linksys home networking products, certain emerging technologies, and other networking products. In addition to its product offerings, it provide a range of service offerings, including technical support services and advanced services.

The Company competes with Alcatel-Lucent; ARRIS Group, Inc.; Aruba Networks, Inc.; Avaya Inc.; Belden Inc.; Brocade Communications Systems, Inc.; Check Point Software Technologies Ltd.; Citrix Systems, Inc.; D-Link Corporation; LM Ericsson Telephone Company; Extreme Networks, Inc.; F5 Networks, Inc.; Force10 Networks, Inc.; Fortinet, Inc.; Hewlett-Packard Company; Huawei Technologies Co., Ltd.; International Business Machines Corporation; Juniper Networks, Inc.; LogMeIn, Inc.; Meru Networks, Inc.; Microsoft Corporation; Motorola, Inc.; NETGEAR, Inc.; Polycom, Inc.; Riverbed Technology, Inc.; and Symantec Corporation.

Top Heal Care Companies To Buy For 2014: Radware Ltd.(RDWR)

Radware Ltd. provides application delivery solutions and network security solutions to banks, insurance companies, manufacturing and retail, government agencies, media companies, and service providers worldwide. The company offers AppDirector Intelligent Application Delivery Controller for data center optimization and to eliminate traffic surges, server bottlenecks, connectivity disconnects, and downtime for business continuity; and Alteon Application Switch application delivery controller that supports local, global, and transparent load-balance, multi-homing network load-balance, and bandwidth management capabilities. It also provides AppXML, which offers XML and Web services communications for mission-critical applications; AppWall, a Web application firewall (WAF) appliance that secures Web applications; LinkProof that manages wide area networks and Internet traffic for networks; Content Inspection Director, a smart redirection and dynamic policy enforcement device to meet contemporary carrier needs; and Session Initiation Protocol Director, an application delivery controller for application vendors, telecom equipment manufacturers, and system integrators. In addition, the company offers DefensePro Intrusion Prevention and Denial of Service products that protect against worms, bots, viruses, malicious intrusions, and DOS attacks; Inflight, a hardware device that provides online and network-based monitoring solutions; and APSolute Vision, an appliance-based management and monitoring system for information technology staff to centrally manage distributed devices and check the performance and security of enterprise wide application delivery infrastructures. It markets and sells its products primarily through distributors and resellers in North America, Europe, and Asia, as well as directly to select customers in the United States. Radware Ltd. was founded in 1996 and is headquartered in Tel Aviv, Israel.

Best Tech Companies To Invest In Right Now: Activision Blizzard Inc(ATVI)

Activision Blizzard, Inc., through its subsidiaries, publishes online, personal computer (PC), console, and handheld games worldwide. The company develops and publishes PC-based computer games and maintains its proprietary online-game related service, Battle.net. It publishes interactive software products and peripherals. Its products cover various game categories, such as action/adventure, action sports, racing, role-playing, simulation, first-person action, music, and strategy. Activision?s products comprise Monsters vs. Aliens, Guitar Hero, X-Men Origins, PROTOTYPE, Transformers, Ice Age, Wolfenstein, Marvel Ultimate Alliance, Bakugan Battle Brawlers, DJ Hero, Band Hero, Call of Duty, Tony Hawk, Guitar Hero, Three map packs for Call of Duty, True Crime, Spider-Man, Bakugan, Blur, and Singularity. Its customers include retail outlets and distributors, including mass-market retailers, consumer electronics stores, discount warehouses, and game specialty stores. Activision Blizzard, Inc. is based in Santa Monica, California. Activision Blizzard, Inc. operates as a subsidiary of Vivendi.

Advisors' Opinion:

• [By Jonas Elmerraji]

  Up first is Activision Blizzard (ATVI), a stock that's made my list of cash-rich companies for a while now. Of course, this $18 billion video game publisher has also turned out some stellar performance in 2013, rallying 51% since the calendar flipped over to January. With more than $4.3 billion in net cash, ATVI looks cheap despite its huge returns this year. Ex-cash, the stock's P/E ratio comes in at a gaunt 10.3.

  Activision Blizzard built that huge cash position with one of the most attractive business models in the video game industry. The firm owns some of the hottest video game franchises in the world, including Call of Duty, World of Warcraft and Diablo. But Activision doesn't just sell games -- it also earns revenues on an ongoing basis through subscription-based multiplayer games like World of Warcraft.

  WoW's 8 million subscribers provide substantial low-effort cash for ATVI. And because gamers have a massive sunk cost in building characters and attaining status, they're a lot less likely to switch to a competing franchise and restart the process. Not surprisingly, the firm has been hard at work to bring a similar model to its other franchises. Right now, around a quarter of ATVI's market capitalization is paid for in cash.

  That dramatically reduces the risks associated with buying shares right now.

• [By Dan Moskowitz]

  Activision is a very well-run company that�� still trading at a fair valuation. There will be setbacks, especially during bear markets, but over the long haul, Activision is a winner. It�� also possible that Activision will make an important acquisition at some point in the future. This would increase market share, and Activision has the cash to do it. However, it�� not a necessary move.

• [By Victor Mora]

  Activision Blizzard provides online entertainment products and services to a growing group of people worldwide. The company is now attempting to repurchase itself from its French owner. The stock has been on a strong surge higher in recent months, and is now trading near highs for the year. Over the last four quarters, it seems investors in the company have expected more, but earnings and revenue figures have been rising. Relative to its peers and sector, Activision Blizzard has been an average year-to-date performer. Look for Activision Blizzard to OUTPERFORM.

Best Tech Companies To Invest In Right Now: Autodesk Inc.(ADSK)

Autodesk, Inc. provides design software and services to customers worldwide. Its Platform Solutions and Emerging Business segment offers AutoCAD software, a customizable and extensible computer-aided design (CAD) application for professional design, drafting, detailing, and visualization in fields ranging from construction to manufacturing, civil engineering, and process plant design; and AutoCAD LT, a professional drafting and detailing software that includes document sharing capability. The company?s Architecture, Engineering and Construction segment offers Autodesk Revit products, which provide model-based design and documentation system for architects, structural engineers, and design-build teams, as well as mechanical, electrical, and plumbing engineers; AutoCAD Civil 3D products, which provide a surveying, design, analysis, and documentation solution for civil engineering; AutoCAD Architecture software that includes architecture industry-specific tools to improve co ordination; and AutoCAD Map 3D software, which provides direct access to data needed for infrastructure planning, design, and management activities. Autodesk, Inc.?s Manufacturing segment?s products comprise Autodesk Inventor, which offers engineers a set of tools for 3D mechanical design, simulation, analysis, tooling, visualization, and documentation; AutoCAD Mechanical software that accelerates the mechanical design process; and Autodesk Moldflow, which provides tools that help manufacturers optimize the design of plastic parts and injection molds, and study the injection molding process. Its Media and Entertainment segment offers animation products that provide tools for digital sculpting, modeling, animation, effects, rendering, and compositing; and creative finishing products that provide editing, finishing, and visual effects design and color grading. The company also offers design and creation suites. Autodesk, Inc. was founded in 1982 and is headquartered in San R afael, California.

Best Tech Companies To Invest In Right Now: XATA Corporation(XATA)

Xata Corporation develops, markets, and services onboard fleet management solutions for the private fleets and for-hire fleet carriers within commercial trucking industry in the United States and Canada. The company offers XataNet, a software-as-a-service (SaaS) solution that focuses on fleet optimization in the commercial trucking industry. It also provides MobileMax, which offers real-time communication and tracking capabilities, records state-line crossings, monitors driver and vehicle performance, and alerts companies of driver arrival at departure from geofenced locations. In addition, the company provides Turnpike, a solution that enables customers to use off-the-shelf cell phones, smart phones, tablet computers, and rugged handhelds as driver displays and communications devices. Further, it offers professional IT and consulting services, which comprise solutions installation and implementation, driver and back-office training, best-practice-operations consulting, an d building custom reports. The company sells its products through national and regional sales account executives primarily to fleet truck operators and logistics providers, as well as through regional and channel sales account executives. Xata Corporation was founded in 1985 and is headquartered in Eden Prairie, Minnesota.

Top 5 Penny Stocks To Own Right Now

Environmental solutions provider Heckmann (NYSE: HEK  ) is set to report earnings on May 8. This could very well be the company's last report under the Heckmann name, as the company is planning to transform its brand into Nuverra Environmental Solutions pending a shareholder vote. While the name might be changing, the business of providing a full-cycle water solution to oil and gas producers is still in its early stages of growth. With that as a context, let's take a look at what to expect from the company this quarter.

Inside the numbers
Analysts expect Heckmann to lose a penny a share in the quarter on revenue of $166.9 million. While that would represent positive momentum from the $0.03 loss in the year-ago quarter it would be taking a step back from the surprise gain the company reported last quarter. While hitting these numbers will be important to keep shares from slipping, forward guidance and future growth are what investors really need to watch.

Top 5 Penny Stocks To Own Right Now: PostRock Energy Corporation(PSTR)

PostRock Energy Corporation, an integrated independent energy company, engages in the acquisition, exploration, development, production, and transportation of oil and natural gas in the United States. It operates in two segments, Oil and Gas Production, and Natural Gas Pipelines. The Oil and Gas Production segment primarily focuses on the development of coal bed methane in the Cherokee basin and the Marcellus Shale in Appalachian Basin, as well as has oil properties in Central Oklahoma. As of December 31, 2009, it had approximately 51.9 billion cubic feet equivalent (Bcfe) of estimated net proved reserves; development rights to approximately 516,184 net acres; and operated approximately 2,849 gross wells in the Cherokee Basin. It also had approximately 44,507 net acres of oil and natural gas producing properties with estimated proved reserves of 18.9 Bcfe and approximately 498 gross wells in Appalachian Basin; and had 65 gross wells, development rights to approximately 1,4 80 net acres, and estimated net proved reserves, 3.9 Bcfe in Central Oklahoma. The Natural Gas Pipelines segment involves in transporting, gathering, treating, and processing natural gas. It owns and operates a natural gas gathering pipeline networks of approximately 2,173 miles in the Cherokee Basin and 183 miles in the Appalachian Basin; and a 1,120 mile interstate natural gas pipeline, which transports natural gas from northern Oklahoma and western Kansas to the metropolitan Wichita and Kansas City markets. The company is headquartered in Oklahoma City, Oklahoma.

Top 5 Penny Stocks To Own Right Now: MCG Capital Corporation(MCGC)

MCG Capital Corporation is a private equity firm specializing in investments in middle market companies. The firm does not prefer investments in highly cyclical and volatile industry sectors and businesses with significant volatility exposure. It seeks to invest in small to mid sized companies. The firm prefers to invest in acquisitions, growth financings, organic growth, recapitalization, and leveraged buyouts. It invests in companies based in the United States. The firm seeks to invest upto $75 million in debt and equity in companies having revenues between $20 million and $200 million and EBITDA between $3 million and $25 million. It seeks to invest in the form of senior debt, including amortizing, bullet maturity, term loans, and revolving credit facilities; institutional sub debt, including junior capital; second lien debt, that includes term loans on sole source and participant basis; secured and unsecured subordinate loans structured as current interest, deferred in terest, and equity linked components; mezzanine debt and equity that includes minority equity investments. The firm may invest in minority or control equity positions. It was formerly known as MCG Credit Corporation. MCG Capital Corporation was founded in 1990 and is based in Arlington, Virginia.

Top 5 China Companies To Own In Right Now: Homeowners Choice Inc.(HCII)

Homeowners Choice, Inc., an insurance holding company, provides property and casualty insurance in Florida. The company provides property and casualty homeowners? insurance, condominium owners? insurance, and tenants? insurance to individuals owning property. It serves approximately 59,500 policyholders primarily through independent agents. The company was founded in 2006 and is headquartered in Tampa, Florida.

Advisors' Opinion:

• [By CRWE]

  Homeowners Choice, Inc. (Nasdaq:HCII), a Florida-based insurance holding company, reported that its board of directors has declared cash dividends of 5.833 cents per share on its Series A Cumulative Redeemable Preferred Stock (“HCIIP”) for the months ending September 30, October 31 and November 30, 2012.

Top 5 Penny Stocks To Own Right Now: Ever-Glory International Group Inc.(EVK)

Ever-Glory International Group, Inc., together with its subsidiaries, engages in the manufacture, distribution, and sale of apparel for women, men, and children. Its products include coats, jackets, slacks, skirts, shirts, trousers, vests, skiwear, down jackets, knitwear, and jeans. The company offers its products to the casual wear, sportswear, and outerwear brands, as well as retailers, such as department stores, flagship stores, stores-within-a-store, and specialty stores primarily in Europe, the United States, Japan, and the People?s Republic of China. As of December 31, 2010, it operated 293 retail stores in the People?s Republic of China. The company is based in West Covina, California.

Top 5 Penny Stocks To Own Right Now: Orion Marine Group Inc(ORN)

Orion Marine Group, Inc. operates as a marine specialty contractor serving the heavy civil marine infrastructure market. The company provides a range of marine construction and specialty services on, over, and under the water along the Gulf Coast, the Atlantic Seaboard, the West Coast, Canada, the Caribbean Basin, and the Pacific Northwest. The company?s marine construction services include construction of marine transportation facilities, marine pipelines, bridges and causeways, and marine environmental structures. Its marine transportation facility construction projects comprise public port facilities for container ship loading and unloading; cruise ship port facilities; private terminals; recreational use marinas and docks; and other marine-based facilities. Orion Marine Group?s marine pipeline service projects consist of the installation and removal of underwater buried pipeline transmission lines; installation of pipeline intakes and outfalls for industrial facilities ; construction of pipeline outfalls for wastewater and industrial discharges; river crossing and directional drilling; and creation of hot taps and tie-ins. Its bridge and causeway projects include the construction, repair, and maintenance of bridges and causeways, as well as the development of fendering systems in marine environments; and marine environmental structure projects primarily comprise the installation of concrete mattresses to ensure erosion protection, and the installation of geotubes for wetlands and island creation. In addition, the company offers dredging services; specialty services, including salvage, demolition, surveying, towing, diving and underwater inspection, excavation, and repair; and survey services comprising surveying pipelines and performing hydrographic surveys. Its customers include federal, state, and municipal governments, as well as private commercial and industrial enterprises. The company was founded in 1994 and is headquartered in Houst on, Texas.

5 Best Oil Stocks To Watch For 2014

Surprisingly strong corporate earnings, combined with a jump in home sales during March, sent the S&P 500 Index (SNPINDEX: ^GSPC  ) to its third straight day of gains. A brief panic caused by a fake tweet from the Associated Press roiled markets around lunchtime, but within minutes the tweet was exposed as the work of a hacker. Thankfully, claims that there was an explosion at the White House were patently false, and the S&P ended more than 1% higher, at 1578. But even the bullish sentiment of the day couldn't rally these three S&P components.

While rapid swings and unexpected news is par for the course on Wall Street, logic can be a little harder to find. Such was the case on Tuesday for shares of office supplies retailer Staples (NASDAQ: SPLS  ) , which slipped 4.5% on virtually no material news. The drop could be due to algorithm-based technical trading, as shares just crossed below their 200-day moving averages (apparently that's bad). With so little to substantiate today's weak performance, shareholders should take Tuesday's slip with a grain of salt.�

5 Best Oil Stocks To Watch For 2014: Shell Refining Company (SHELL)

Shell Refining Company (Federation of Malaya) Berhad is principally engaged in refining and manufacturing of petroleum products. The Company operates primarily in Malaysia. Its operations also include the gas to liquids (GTL) plant of its kind in Bintulu, Sarawak, and a refinery in Port Dickson, Negeri Sembilan. Its upstream operations focus on the development and extraction of crude oil and natural gas offshore Sarawak and Sabah. In downstream its main activity is in refining, supply, trading and shipping of crude oil and petroleum products through the sales and marketing of transportation fuels, lubricants, specialty products and technical services. The Company is also a partner in two joint ventures that convert natural gas to liquefied natural gas. Royal Dutch Shell plc is its holding company.

5 Best Oil Stocks To Watch For 2014: American Petro-Hunter Inc (AAPH)

American Petro-Hunter Inc., incorporated on January 24, 1996, is an oil and natural gases exploration and production company with projects in Kansas and Oklahoma. As of March 15, 2012, the Company has two producing wells in Kansas and six producing wells in Oklahoma. The Company also has rights for the exploration and production of oil and gas on an aggregate of approximately 6,230 acres in those states. On January 4, 2011, the Company announced plans to drill the NOS227 Well as a direct offset to the NOJ26 Well.

On March 25, 2011, the Company announced that the Company had acquired a working interest in an additional 2,000 acres located in Payne County in northern Oklahoma, near the Company�� Yale Prospect. The project has been named North Oklahoma Mississippi Lime Project. On May 16, 2011, the Company announced that drilling operations had commenced at the Company�� first horizontal well, NOM1H. The Company owns a 25% Working Interest in the lease. On June 29, 2011, the Company announced that NOM1H had begun commercial production. On July 18, 2011, the Company announced drilling plans for a total of 11 horizontal wells at the North Oklahoma Project. On July 20, 2011, the Company announced the acquisition of a 40% working interest in the South Oklahoma Project on 3,000 acres of land in south-central Oklahoma.

On February 6, 2012, the Company announced that the Company had drilled a total of 1,988 feet in the horizontal well segment penetrating into the 100 plus foot thick Mississippi pay zone. As of March 2012, there are nine locations left to drill on the acreage. The Company's crude oil production is sold to N.C.R.A. in MacPherson Kansas and Sunoco in Oklahoma. The Company sells natural gas through such pipeline to DCP Midstream, LP of Tulsa, Oklahoma.

Hot Canadian Stocks To Invest In Right Now: ConocoPhillips(COP)

ConocoPhillips operates as an integrated energy company worldwide. The company?s Exploration and Production (E&P) segment explores for, produces, transports, and markets crude oil, bitumen, natural gas, liquefied natural gas, and natural gas liquids. Its Midstream segment gathers, processes, and markets natural gas; and fractionates and markets natural gas liquids in the United States and Trinidad. The company?s Refining and Marketing (R&M) segment purchases, refines, markets, and transports crude oil and petroleum products, such as gasolines, distillates, and aviation fuels. Its Chemicals segment manufactures and markets petrochemicals and plastics. This segment offers olefins and polyolefins, including ethylene, propylene, and other olefin products; aromatics products, such as benzene, styrene, paraxylene, and cyclohexane, as well as polystyrene and styrene-butadiene copolymers; and various specialty chemical products comprising organosulfur chemicals, solvents, catalyst s, drilling chemicals, mining chemicals, and engineering plastics and compounds. The company?s Emerging Businesses segment develops new technologies and businesses. It focuses on power generation; and technologies related to conventional and nonconventional hydrocarbon recovery, refining, alternative energy, biofuels, and the environment. This segment also offers E-Gas, a gasification technology producing high-value synthetic gas. ConocoPhillips was founded in 1917 and is based in Houston, Texas.

Advisors' Opinion:

• [By Fabian]

  ConocoPhilips(COP) is a close second. This is a Warren Buffett darling that will benefit from its spinoff of refining assets some time in 2012.

  Conoco also continues to pay a consistent and reliable 3.75%. Note that COP has underperformed the rest of the sector recently. Correlations are normally so close that such an underperformance by one stock can point the way to value.

• [By Victor Mora]

  ConocoPhillips provides essential crude oil and natural gas products and services to companies and consumers worldwide. The stock has been steadily trending higher and is now trading slightly below all-time high prices. Over the last four quarters, earnings and revenue figures have decreased, which has produced mixed feelings among investors. Relative to its peers and sector, ConocoPhillips has been a year-to-date performance leader. WAIT AND SEE what ConocoPhillips does this coming quarter.

5 Best Oil Stocks To Watch For 2014: Royal Caribbean Cruises Ltd.(RCL)

Royal Caribbean Cruises Ltd. operates in the cruise vacation industry worldwide. It owns five cruise brands, which comprise Royal Caribbean International, Celebrity Cruises, Pullmantur, Azamara Club Cruises, and CDF Croisi�es de France. The Royal Caribbean International brand provides various itineraries and cruise lengths with options for onboard dining, entertainment, and other onboard activities primarily for the contemporary segment. It offers surf simulators, water parks, ice skating rinks, rock climbing walls, and shore excursions at each port of call, as well as boulevards with shopping, dining, and entertainment venues. The Celebrity Cruises brand operates onboard upscale ships that offer luxurious accommodations, fine dining, personalized services, spa facilities, venue featuring live grass, and glass blowing studio for the premium segment, as well as resells computers and other media devices. The Pullmantur brand provides an array of onboard activities and serv ices to guests, including exercise facilities, swimming pools, beauty salons, gaming facilities, shopping, dining, complimentary beverages, and entertainment venues serving the contemporary segment of the Spanish, Portuguese, and Latin American cruise markets. The Azamara Club Cruises brand offers various onboard services, amenities, gaming facilities, fine dining, spa and wellness, butler service for suites, and interactive entertainment venues for the up-market segment of the North American, United Kingdom, German, and Australian markets. The CDF Croisieres de France brand offers seasonal itineraries to the Mediterranean; and various onboard services, amenities, entertainment venues, exercise and spa facilities, fine dining, and gaming facilities for the contemporary segment of the French cruise market. As of December 31, 2011, the company operated 39 ships with a total capacity of approximately 92,650 berths. Royal Caribbean Cruises Ltd. was founded in 1968 and is headqua rtered in Miami, Florida.

Advisors' Opinion:

• [By Hawkinvest]

  Royal Caribbean Cruises (RCL) is one of Carnival's competitors in the cruise industry. Royal does not have the same issues as Carnival in terms of the Costa Concordia incident, but it could be impacted by discounting in cruise fares, as well as higher fuel costs. Royal Caribbean shares were recently downgraded to a strong sell by Zacks Investment Research, and a recent analyst report states:

  We are a bit doubtful about the cruising sector in the near term after Carnival's ship Costa Concordia ran aground in mid-January on Italy's west coast. The disaster hit the industry in the wake of the wave season between January and March. The recent tragedy resulted in subdued bookings. Royal Caribbean's overall booking volumes in North America came down. In Europe, where the incident took place, the cut in bookings has been steeper. Business in APMEA was also down slightly. The company expects a 20% decline in new bookings during the peak of wave season.

  This stock was trading below $26 in early January, but it has rallied with the markets. With oil prices trending higher, and the stock at the high end of the recent trading range, the shares look vulnerable to a pullback.

  Here are some key points for RCL:

  Current share price: $29.89

  The 52 week range is $18.70 to $45.45

  Earnings estimates for 2011: $2.32 per share

  Earnings estimates for 2012: $2.94 per share

  Annual dividend: 40 cents per share which yields about 1.3%

5 Best Oil Stocks To Watch For 2014: Talisman Energy Inc.(TLM)

Talisman Energy Inc., an upstream oil and gas company, engages in the exploration, development, production, transportation, and marketing of crude oil, natural gas, and natural gas liquids. It primarily operates in North America, the North Sea, and southeast Asia. The company was founded in 1925 and is headquartered in Calgary, Canada.

3 Biotech Stocks Under $10 to Watch

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

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.

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.

Athersys

Athersys (ATHX) is a biopharmaceutical company focused in the field of regenerative medicine. This stock closed up 4% to $1.79 in Thursday's trading session.

Thursday's Range: $1.68-$1.80

52-Week Range: $0.95-$2.42

Thursday's Volume: 270,000

Three-Month Average Volume: 323,188

5 Best Value Stocks To Own Right Now

From a technical perspective, ATHX bounced notably higher here right off its 50-day moving average of $1.67 with decent upside volume. This stock recently pulled back from $1.99 to its 50-day at $1.67. Shares of ATHX may now be down with that pullback, since the stock is starting to trend higher and move within range of triggering a near-term breakout trade. That trade will hit if ATHX manages to take out some near-term overhead resistance levels at $1.90 to $1.99 with high volume.

Traders should now look for long-biased trades in ATHX as long as it's trending above its 50-day at $1.67 and then once it sustains a move or close above those breakout levels with volume that hits near or above 323,188 shares. If that breakout triggers soon, then ATHX will set up to re-test or possibly take out its next major overhead resistance levels at $2.16 to $2.25. Any high-volume move above those levels will put its 52-week high at $2.42 into range for shares of ATHX.

Neuralstem

Neuralstem (CUR) is a biotechnology company, which is engaged in the development and commercialization of treatments for central nervous system disease based on transplanting human neural stem cells and the use of small molecule drugs. This stock closed up 6.1% to $1.72 in Thursday's trading session.

Thursday's Range: $1.59-$1.72

52-Week Range: $0.49-$1.96

Thursday's Volume: 590,000

Three-Month Average Volume: 474,694

From a technical perspective, CUR ripped higher here right above its 50-day moving average of $1.57 with above-average volume. This move is quickly pushing shares of CUR within range of triggering a major breakout trade above a former double top area. That trade will hit if CUR manages to take out some near-term overhead resistance levels at $1.75 to $1.79 with high volume.

Traders should now look for long-biased trades in CUR as long as it's trending above its 50-day at $1.57 or above more key support levels at $1.55 to $1.43 and then once it sustains a move or close above those breakout levels with volume that hits near or above 474,694 shares. If that breakout hits soon, then CUR will set up to re-test or possibly take out its 52-week high at $1.96. Any high-volume move above that level will then give CUR a chance to tag $2.20 to $2.50.

BioDelivery Sciences International

BioDelivery Sciences International (BDSI) is a specialty pharmaceutical company that is utilizing licensed and owned proprietary drug delivery technologies to develop and commercialize new formulations of proven therapeutics. This stock closed up 7.7% to $5.02 in Thursday's trading session.

Thursday's Range: $4.58-$5.04

52-Week Range: $3.52-$6.89

Thursday's Volume: 402,000

Three-Month Average Volume: 178,218

From a technical perspective, BDSI ripped to the upside here right above its 50-day moving average of $4.49 with strong upside volume. This move pushed shares of BDSI into breakout territory, since the stock cleared some near-term overhead resistance levels at $4.79 to $4.89.

Traders should now look for long-biased trades in BDSI as long as it's trending above $4.79 or above its 200-day at $4.45 and then once it sustains a move or close above Thursday's intraday high of $5.04 with volume that hits near or above 178,218 shares. If we get that move soon, then BDSI will set up to re-test or possibly take out its next major overhead resistance levels at $5.43 to $5.74. Any high-volume move above those levels will then give BDSI a chance to tag its 52-week high at $6.89.

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.

Deep Sea Supply: A Potential Acquisition Target With High Growth Prospects

The Buy Thesis

Deep Sea Supply (DSSPF.PK) is an offshore supply company servicing the offshore drillers with its fleet of 12 platform supply vessels and 15 anchor handling tug supply vessels. The company's vessels currently operate in the North Sea spot market, West Africa, Mediterranean, South East Asia and Brazil. For 2012, the company had revenue of $124.1 million and an EBITDA of $50.7 million. However, the company trades at a market capitalization of $205 million, which is just 1.6 times 2012 revenue. This thesis investigates the reason for a low market capitalization and the reasons for believing that Deep Sea can be an acquisition candidate, a factor, which will trigger significant stock upside. Acquisition apart, the thesis also discusses the growth factors that can translate into higher stock price.

A Recent Industry Event To Support The Acquisition Story

Tidewater (TDW) is a relatively larger player in the offshore supply vessel industry with a current market capitalization of $2.78 billion. The company has embarked on an aggressive growth strategy with 18 new vessels added in the last fiscal and a commitment to purchase or construct 32 vessels at a cost of $836.6 million. Besides the organic growth, the company has also taken the inorganic route to expand into new geographies. In May 2013, Tidewater announced the acquisition of Troms Offshore Supply AS for $395 million. The acquisition includes five large PSVs and one deepwater PSV, which is under construction. A consideration of $395 million for six PSVs implies an acquisition value of $66 million per vessel. The acquisition was important for Tidewater in two ways - It marks the entry of Tidewater in the Norwegian North Sea and it provides the company with the harsh environment operating fleet. Tidewater has sufficient financial flexibility (discussed later) and another equally good opportunity in the Norwegian region would be an acquisition candidate to create further inroads in the North Sea.

Deep Sea's ! Brazilian Joint Venture Underlines The Need For Funding

A potential acquisition candidate would be one, which is trading at attractive valuation multiples and has limited financial flexibility. In January 2013, Deep Sea and BTG Pactual agreed to establish a joint venture in Brazil. As per the acquisition terms, Deep Sea transferred 9 AHTS and 6 PSV vessels to the joint venture. The JV would also acquire 6 new PSVs under construction and for delivery in 2H13 and 1H14.

The primary reason for the JV was to fund growth in the Brazilian OSV market. The reason is clear when the company's first quarter 2013 balance sheet is analyzed. Deep Sea had a debt to EBITDA of 8.2 and a loan-to-value of 86% based on the book value of vessels. High leverage was restricting growth and the company needed cash infusion to expand in prospective markets.

After the completion of the 50:50 JV, the company's leverage has declined to 5.3 from 8.2 and the balance sheet looks relatively robust with cash (including 50% from JV) holdings of $106 million. With increased financial flexibility, Deep Sea is now considering acquisition of 10 new PSVs. What is noteworthy is that the company has a market capitalization of just $205 million and this makes it a good acquisition candidate.

An Attractive EV/EBITDA Multiple Makes Deep Sea An Acquisition Target Besides Providing Stock Upside Potential

The chart below gives the EV/EBITDA multiple of some of the major OSV players in the Norwegian region and the multiple for Tidewater.

(click to enlarge)

(click to enlarge)

The EV/EBITDA multiple is most attractive for Deep Sea. If Tidewater were to consider another acquisition in the Norwegian region, Deep Sea would therefore ! be the be! st bet. A market capitalization of just $205 million also looks attractive from an acquisition perspective.

It is important to mention here that a low EV/EBITDA multiple is not because of inferior assets or sluggish growth. The financials have been improving after bottoming out in 2011 and I have discussed the long-term EBITDA margin trend later in the article. The reason for the low EV/EBITDA multiple is the high leverage and the restricted financial flexibility that Deep Sea had before the joint venture. A low financial flexibility would mean slower expansion and as stock prices discount the future, the EV saw limited upside. As the chart shows, the company's stock price has been moving sideways for almost three years. During these years, the company's financial flexibility remained very restricted.

(click to enlarge)

As mentioned earlier, Deep Sea had a leverage of 8.2 and a loan-to-value of 86% before the joint venture deal. Currently, the leverage stands at 6.6 and the loan-to-value at 72%. The EV/EBITDA multiple will trend higher as the JV starts delivering positive results. A relatively higher financial flexibility for Deep Sea and its plans to acquire new PSVs will also support higher valuation multiples. The company is therefore at an important inflection point with supportive industry dynamics.

Valuation Consideration For An Acquisition Scenario

Tidewater's acquisition of six PSVs was for a valuation consideration of $66 million per vessel as discussed above. Deep Sea's information memorandum related to the JV also states that the cost of construction of six new PSVs is $282 million, which implies a cost of $47 million per PSV. A ballpark estimate for the current value of a PSV would therefore be anywhere between $47 million to $66 million. For Deep Sea PSV valuation, I would consider an average price of $56 million per vesse! l. This i! s fairly realistic as most of the current PSV fleet has been built on or after 2007 and the fleet age is not high.

Considering 50% (three) of the JV PSV and the remaining three PSVs fully owned by Deep Sea, the value of six PSVs would be $336 million.

I will also try to arrive at a ballpark estimate for AHTS vessels based on some recent transactions in the industry. In March 2013, Ocean Yield acquired two AHTS vessels from Farstad Supply AS for a total cost of $204 million, implying a value of $102 million per AHTS. However, the acquired vessels are high-end vessels with 24,371 BHP. In another transaction, Indonesia-based PT Pelayaran Nasional Buana Bina Raya TBK (BBR) has acquired a 9,000-bhp AHTS for a consideration of $18 million against a market value of $24 million for the vessel. Therefore, the acquisition cost depends on the AHTS vessel specification. The table below gives the total value of AHTS vessels owned by Deep Sea based on the vessel specification and a ballpark estimate from the above transactions.

(click to enlarge)

Combining the PSV and AHTS vessel value, the valuation consideration in the case of an acquisition is shown in the table below.

Even if we take a relatively stressed scenario arguing that some of the AHTS vessels are built in 1999, the valuation consideration would still imply a potential 50-90% upside from the current market capitalization in the event of an acquisition. This will also make Deep Sea's valuation in line with the EV/EBITDA multiple of peers discussed earlier.

Industry Recovery Would Support Growth

The day rates impact the EBITDA margin in the offshore supply vessel industry. The day rates are indicative of the demand factor and the tr! end in EB! ITDA margin can tell investors about the recovery or decline in the industry. After the EBITDA margin bottomed out at 27% in 2011, there has been a gradual rise with the margin for the first quarter of 2013 at 43%. If the recovery continues in the industry, Deep Sea can get back to the peak EBITDA margin of 69% witnessed in 2007.

(click to enlarge)

A steady recovery in the industry is very likely as the offshore oil & gas market spending is expected to grow at a CAGR of 8-10% in 2013-17. The highest capital expenditure will be seen in Brazil and Norway. Deep Sea has presence in both the markets and should continue to win term contracts as exploration activity remains robust.

(click to enlarge)

Revenue Visibility Would Also Support Growth

Deep Sea has a total contract backlog (including 50% JV backlog) of $164 million as of July 2013. The backlog gives the company revenue visibility and stability. A steady income flow from term contracts, as indicated in the chart would mean that the company will not face any significant issues in the near term from a debt servicing perspective. The stability in earnings is evident from 4Q12 and 1Q13 earnings trend where the company reported an EBITDA of $16.6 million for both quarters with an EBITDA margin of 43%. Considering the steady revenue inflow, Deep Sea is in line to witness a revenue growth of 24.8% and an EBITDA growth of 31.4% for the financial year 2013.

(click to enlarge)

Deep Sea also has $106 million of cash as of 2Q13 and this can be used for buying a new PSV fleet. This, in my opinion, would be! another ! upside trigger for the stock. I must mention here that a positive result in 2Q13 and the other factors discussed have resulted in a positive impact on the share price with the stock trading higher by 6% in today's trade.

Ambitious Expansion Plans After The Joint Venture

Before discussing the company's growth plans after the JV, I would quickly mention here that the Deep Sea has been looking to expand into new markets through JVs as it would give them access to funding. Back in 2011, Deep Sea entered into a strategic partnership in Malaysia with a 25% stake in the JV.

Coming to the recent transaction, the main rationale for the partnership with BTG Pactual is the company's local presence coupled with the fact that BTG has nearly $21.4 billion of assets under management and a JV with a major investment vehicle would give relatively easy access to funding the growth. After the transfer of 15 AHTS and PSV vessels and the delivery of six new PSVs, the JV will be the third largest OSV provider in Brazil. The BTG brand name would also help Deep Sea make its presence significantly felt in an attractive offshore market. Besides the current newbuilds, the JV also plans to acquire additional AHTS and PSV vessels. Therefore, the growth strategy in Brazil is aggressive and is backed by a strong funding partner.

Apart from the JV, the company plans to leverage off the excess cash ($103 million) and increased financial flexibility to boost growth. While the strategy might seem generic, the company is growing at the right time as indicated in the industry recovery trend above. In the immediate term, the discussion with PSV Holdings (as per 2Q13 presentation), a company affiliated with Hemen Holdings, for the purchase of 10 PSV vessels might provide earnings visibility boost along with stock upside. I have specifically mentioned Hemen Holdings as the entity has 35.05% stake in Deep Sea. It is therefore very likely that a final agreement is reached for 10 new PSVs. Therefore, the growth plans for ! the near ! to medium-term are ambitious and it is backed by the right strategic moves.

Risk Factors

Risk Factor 1 - Deep Sea operates in a highly cyclical industry and the sustained global economic uncertainty is a big risk for a small company with relatively high leverage. The global economy might have however passed its worst phase with the first signs of recovery in Europe besides sustained economic resilience in the United States.

Risk Factor 2 - The stock is relatively illiquid in terms of trading in the OTC exchange. This risk is mitigated by the fact that investors can directly invest in the stock in the Oslo exchange.

Conclusion

Deep Sea is an attractive stock at a current price of $1.63 and a current market capitalization of $205 million. The recent closure of the joint venture and a higher financial flexibility coming from cash inflow from the JV supports the growth story and is the first reason for a stock upside. An attractive EV/EBITDA multiple supports the acquisition story and provides another stock upside trigger. Investors can consider the stock at current levels for significant medium to long-term upside.

Source: Deep Sea Supply: A Potential Acquisition Target With High Growth Prospects

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. (More...)

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