[video] Quick Take: Macy's CEO Breaks Down Black Friday

NEW YORK (TheStreet) -- Many stores opened their doors this year on Thanksgiving to get an edge on the competition. TheStreet's Laurie Kulikowski is with Terry Lundgren, CEO of Macy's (M), to discuss the kickoff of holiday shopping. 

Lundgren said 15,000 people were lined up at 8 p.m. on Thanksgiving Day, besting last year's line of 11,000 people at midnight. 

Clearly, the demand for a Thanksgiving open was there, he said. 

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He added that coats and boots seemed to be doing well and that Black Friday would remain the most important day for Macy's in terms of sales.  Consumers seem to be becoming more aware that there are six fewer shopping days between now and Christmas, Lundgren said, making this weekend's sales even more important.  Macy's is the largest carrier of top brands, like Michael Kors (KORS) and Polo Ralph Lauren (RL).  But they also carry and sell more value-oriented brands too, he said.  Regarding mobile shopping, Lundgren suggested that more shoppers are browsing online, but coming into the store to get a better feel for what they're buying.  He concluded that Macy's seems to be taking market share from all of its competition right now, including department stores and speciality stores. -- Written by Bret Kenwell in Petoskey, Mich. Follow @BretKenwell

Growth Channels Over the Next Years –Becoming a Worldwide Commerce Leader

Two websites are at the top of the purchases made on the Internet. eBay Inc. (EBAY) and Amazon.com Inc. (AMZN) are two websites where you can buy and sell the products you want. The difference between them is that Amazon is more specialized in books, CDs and DVDs, while eBay specializes in digital technology.

A Major E-Commerce Player

eBay provides online platforms, tools, and services , helping in online and mobile commerce and payments in the U.S. and internationally. It owns one of the world's most popular e-commerce destinations, which bears its name, as well as PayPal. It is organized into three businesses: marketplaces, payment and enterprise. Revenues in 2012 were: 52% came from marketplaces, 40% from payment, and 8% from enterprise. In the last quarter the company recorded earnings that were above the Zacks estimates.

Extremely Successful Drivers

Several growth catalysts like new innovations in the Marketplaces segment as well as strategic acquisitions make me feel confident about eBay´s future. The company owned Bill Me Later (online payments), Gmarket (Asia-focused e-commerce), eBay Enterprise (formerly GSI Commerce) (enterprise commerce and marketing solutions), Shopping.com (comparison shopping), StubHub (online ticket sales) and PayPal (online payments). This one accounts for about 40% of the firm´s 2012 revenue and provides plenty of expansion opportunities. In the U.S. shows great acceptance by online retailers, in addition to processing a quarter of the domestic transactions. In June 2011, EBAY acquired GSI Commerce will contribute to cross-selling opportunities and capacity worldwide. This is an essential service that Amazon already offers very successfully. We expect for the future that the company continues seeking for strategic acquisitions to improve its businesses. Moreover, in the mobile commerce arena, the firm focuses in easy and useful mobile apps, becoming one of the top 10 most popular Android apps. We consider this should drive growth even furt! her in the years to come.

Valuation

In terms of valuation, the stock sells at a trailing P/E of 23.1x, trading at a premium compared to the industry average of 18.2x. Analysts' expectations imply a forward P/E of 15.53. To use another metric, its price-to-book ratio of 2.8 indicates a premium versus the industry average of 1.7x and the price-to-sales ratio of 4.4x is above the industry average of 0.73x.

Finally, I always like to see the evolution of one of the most important financial ratios applying to stockholders, the best measure of performance for a firm's management: the return on equity. While eBay ROE of 12.5% is above the industry mean of 9%, Amazon's low ROE is not attractive. It is very important to understand this metric before investing in a high-growing company. The following graph shows the evolution of the ratio in the last 10 years. It can be seen that the ratio remains relatively stable in the case of eBay in the past four years.

[ Enlarge Image ]

Final Comment

In my point of view, the strong acquisition program and the easier and safer mobile payment makes eBay an attractive choice.

Hedge fund gurus like Louis Moore Bacon, Chuck Royce, Ken Heebner and Julian Robertson added this stock to their portfolios and I would advise fundamental investors to consider adding this stock to theirs as well.

We have already analyzed the next driver for growth and innovation in the industry. It would also be interesting to turn the spotlight on Amazon, which I will look into in my next article, for your long-term portfolios.

Disclosure: Victor Selva holds no position in any stocks mentioned.

Also check out: Chuck Royce Undervalued Stocks Chuck Royce Top Growth Companies Chuck Royce High Yield stocks, and Stocks that Chuck Royce keeps buying Julian Robertson Undervalued Stocks Julian Robertson Top Growth Companies Julian Robertson High Yield stocks, and Stocks that Julian Robertson keeps buying

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Thursday, November 28, 2013

Can UBS See Its Stock Move Higher?

With shares of UBS (NYSE:UBS) trading around $18, is UBS 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

UBS, a financial services firm, provides wealth management, asset management, and investment banking products and services worldwide. Its Wealth Management division provides financial services to high net worth individuals worldwide. Its Investment Bank division offers products and services in equities, fixed income, foreign exchange, and commodities to corporate and institutional clients, sovereign and government bodies, financial intermediaries, alternative asset managers, and its wealth management clients. UBS Asset Management division offers investment solutions to various asset classes.

Citing informed persons, the Wall Street Journal reports that UBS has reached an immunity arrangement with European Union authorities that will guard the Swiss bank from additional penalties for alleged manipulation of key interest rates. Under the terms, UBS is being rewarded for cooperating with investigators and relinquishing information regarding other banks, according to the Journal.

T = Technicals on the Stock Chart Are Strong

UBS stock has remained in a range over the last five years. The stock is currently surging higher. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, UBS is trading between its rising key averages, which signal neutral price action in the near-term.

(Source: Thinkorswim)

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

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	10 Best China Stocks To Buy For 2014 Implied Volatility (IV)	30-Day IV Percentile	90-Day IV Percentile
UBS options	22.15%	6%	4%

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

	Put IV Skew	Call IV Skew
December Options	Average	Average
January Options	Average	Average

As of today, there is an average demand from call and put buyers or sellers, all neutral over the next two months. To summarize, investors are buying a minimal amount of call and put option contracts and are leaning neutral over the next two months.

On the next page, let’s take a look at the earnings and revenue growth rates and the conclusion.

E = Earnings Are Mixed Quarter-Over-Quarter

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

	2013 Q3	2013 Q2	2013 Q1	2012 Q4
Earnings Growth (Y-O-Y)	-127.10%	31.29%	-8.15%	-658.46%
Revenue Growth (Y-O-Y)	1.98%	17.92%	14.54%	9.54%
Earnings Reaction	-8.04%	2.57%	N/A	N/A

UBS has seen decreasing earnings and increasing revenue figures over the last four quarters. From these numbers, the markets have had conflicting feelings about UBS’s recent earnings announcements.

P = Weak Relative Performance Versus Peers and Sector

How has UBS stock done relative to its peers, JPMorgan Chase (NYSE:JPM), Goldman Sachs (NYSE:GS), Wells Fargo (NYSE:WFC), and sector?

	UBS	JPMorgan Chase	Goldman Sachs	Wells Fargo	Sector
Year-to-Date Return	18.93%	31.36%	31.73%	29.62%	28.91%

UBS has been a poor relative performer, year-to-date.

Conclusion

UBS, a financial services firm, provides wealth management, asset management, and investment banking products and services worldwide. The company has reached an immunity arrangement with European Union authorities that will guard the Swiss bank from additional penalties for alleged manipulation of key interest rates. The stock has been in a range over the last five years and is currently surging higher. Over the last four quarters, earnings have been decreasing while revenues have been increasing, which has produced mixed feelings among investors. Relative to its peers and sector, USB has been a poor relative performer year-to-date. WAIT AND SEE what UBS does next.

Soon You'll Be Able to Invest in China's Amazon.com

On Nov. 11, Chinese e-commerce giant Alibaba Group Holding Ltd. set a company record for most sales in a 24-hour period when $5.7 billion was exchanged over its network of websites.

That's nearly four times the $1.46 billion in online sales logged on the United States' largest online shopping day of the year - "Cyber Monday" - in 2012.

The sales came over the company's two main platforms, Taobao and Tmall, during China's "Singles' Day." The holiday is a reverse Valentine's Day, when bachelors and bachelorettes celebrate their "single lives" and, apparently, spend a lot of money.

The $5.7 billion boon represented an 83% jump from the sales of the previous year - and equals almost half of the entire size of China's e-commerce market in the third quarter.

Now this lucrative e-commerce leader is considering an IPO in the United States in 2014 - and it could be the biggest tech IPO ever.

"Alibaba is a one-time thing," Benjamin Joffe, an angel investor and founder of the Beijing consultancy Plus8Star, told CNBC. "How often do you list a $100 billion company?"

Who Is Alibaba?

Founded in 1999, Alibaba offers its users business-to-business web portals, online retail and payment services, and a shopping search engine. Some analysts call it the "Amazon.com of China," but it also mixes in qualities of eBay.

It has grown into an almost $5 billion a year company. Just last quarter the e-commerce company raked in revenue of $1.73 billion - a surge of 60% from the previous quarter.

The reason for its surging sales is the explosive Chinese e-commerce market.

The sheer volume of online transactions occurring in China is staggering.Our Private Briefing serviceEditorWilliam Patalon III wrote earlier this summer that online retail sales in China had grown 60.2% in the first six months of 2013, to $139.6 billion.

"The spectacular growth rate shows the potential for online shopping," Ronald Wan, chief China adviser at Asian Capital Holdings Ltd., told Bloomberg. "This will boost momentum for Alibaba, give its potential investors confidence and prompt traditional retailers to think hard how to cope with challenges from e-commerce."

And now reports indicate that mobile sales are skyrocketing in China as well.

According to Alibaba, $877 million of its Singles' Day sales came from mobile devices. That accounted for 21% of the company's transactions and was a 500% increase from the year before.

Hot Low Price Stocks To Own Right Now

Expect this mobile trend to continue as the Ministry of Industry and Information Technology (MIIT) reported this summer that smartphone sales in China were up 96.4% in the first half of 2013.

All of these factors have some analysts predicting a value of more than $190 billion for Alibaba. That's compared to a valuation of $104 billion for Facebook after its market debut.

Alibaba IPO 2014

With American companies like Amazon and eBay dominating the e-commerce market, Alibaba doesn't currently have much name recognition stateside. The fact that the majority of its vendors are located in China doesn't help either. A listing in an American market would change that.

Alibaba initially decided against trading on the Hong Kong Stock Exchange when the exchange took issue with the e-commerce company's governance structure. Alibaba keeps control of the company in the hands of a minority - 28 founders and shareholders.

Neither the New York Stock Exchange nor the Nasdaq took exception to the management style, and both have provided assurances that the partnership structure for its share offering would be permitted.

Rather than switch its management model, Alibaba would rather look outside of Asia for a trading exchange.

Alibaba's closest ties to U.S. markets is that Yahoo! Inc. (Nasdaq: YHOO) owns a 24% stake in the company. That position lends credibility - and a familiar face - to those uneasy about investing in a Chinese company.

If recent sales figures and consumer trends are any indication, Alibaba should continue to post record numbers when it comes to online shopping.

Mark Alibaba as the "must-watch" IPO of 2014.

IPO investing can be difficult for retail investors, and avoiding potential pitfalls is crucial to finding big gains in the IPO market. This report reveals the secret to playing IPOs...

Related Articles:

CNBC:
Why the Alibaba IPO Is More Important Than Twitter's Bloomberg:
Alibaba Breaks Sales Record Amid China Singles-Day Rebate CNBC:
Alibaba Gets Clearance to List in the U.S.

Apple Inc. Looks to Roll Out Black Friday Deals (AAPL)

Consumer favorite Apple (AAPL) is largely expected to roll out lucrative Black Friday deals on 11/29 for its customers.

Past deals have included up to $100 off of laptops as well as other discounts on iPads and iPods. The sales will be especially crucial after Apple’s most recent quarterly sales of certain devices were not up to snuff for many on The Street. A nice boost in sales buoyed by discounts could help ensure that the firm hits its sales and revenue estimates for its next report.

Thus far, the event has only been posted to the company’s Australia and New Zealand websites, but with those two nations roughly one day ahead of the U.S., many are expecting a similar announcement for domestic markets to come sometime within the next day.

Apple shares were up $4.13, or 0.8%, at Monday’s close. The stock is down just over 1.5% on the year.

Will Dunkin’ Brands Continue to Rise on Recent Earnings?

With shares of Dunkin' Brands (NASDAQ:DNKN) trading around $47, is DNKN 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

Dunkin' Brands owns, operates, and franchises quick service restaurants under the Dunkin'' Donuts and Baskin-Robbins brands worldwide. The company operates in four segments: Dunkin' Donuts U.S., Dunkin' Donuts International, Baskin-Robbins International, and Baskin-Robbins U.S. Its restaurants offer coffee, donuts, bagels, ice cream, frozen beverages, baked goods, and related products. The increasing popularity of the product offerings by Dunkin' Brands is fueling excellent growth for the company.

Dunkin’ Brands, the parent company of Dunkin’ Donuts and Baskin-Robbins, reported results for the third quarter ended September 28.”Both Dunkin’ Donuts and Baskin Robbins U.S. continue to have excellent momentum and delivered another quarter of strong comparable store sales and net new restaurant growth,” said Nigel Travis, chairman and CEO of Dunkin’ Brands.

T = Technicals on the Stock Chart Are Strong

Dunkin' Brands stock has been on a bullish move higher since its initial public offering in 2011.The stock is now trading near all-time high prices and looks ready to continue. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, Dunkin' Brands 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 and implied volatility skew levels of Dunkin' Brands options may help determine if investors are bullish, neutral, or bearish.

	Implied Volatility (IV)	30-Day IV Percentile	90-Day IV Percentile
Dunkin' Brands Options	24.31%	26%	24%

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

	Put IV Skew	Call IV Skew
November Options	Flat	Average
December Options	Flat	Average

As of Thursday, 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 minimal amount of call and put option contracts and are leaning neutral to bullish over the next two months.

E = Earnings Are Rising Quarter Over Quarter

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

	2013 Q3	2013 Q2	2013 Q1	2012 Q4
Earnings Growth (Y-O-Y)	42.31%	24.24%	16.00%	131.5%
Revenue Growth (Y-O-Y)	8.5%	5.86%	9.45%	-4.04%
Earnings Reaction	-0.6%	-1.73%	3.66%	2.04%

Dunkin' Brands has seen rising earnings and revenue figures over the last four quarters. From these numbers, the markets have been pleased with Dunkin' Brands’s recent earnings announcements.

P = Excellent Relative Performance Versus Peers and Sector

How has Dunkin' Brands stock done relative to its peers – Starbucks (NASDAQ:SBUX), McDonald’s (NYSE:MCD), and Yum! Brands (

target=”_blank”>NYSE:YUM

) — and sector?

	Dunkin' Brands	Starbucks	McDonald’s	Yum! Brands	Sector
Year-to-Date Return	43.97%	51.17%	9.35%	1.61%	27.52%

Dunkin' Brands has been a relative performance leader, year to date.

Conclusion

Dunkin' Brands provides delicious items that fulfill the sweet cravings of many consumers. The company recently released its quarter three results that delivered another quarter of strong comparable store sales, leaving investors happy. The stock has been exploding higher since its IPO and is now trading near all-time high prices. Over the last four quarters, earnings and revenues have been rising, which has pleased investors in the company. Relative to its peers and sector, Dunkin' Brands has been a year-to-date performance leader. Look for Dunkin' Brands to OUTPERFORM.

Using Time Horizons In Investing

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When contemplating an investment, few questions are as important as "What is your time horizon?" The answer can help you decide what type of investment vehicle you should consider, which investments to avoid and how long to hold your investment before selling.

Risk and Time

Investors often put their money into an aggressive investment vehicle, such as stocks or gold, and then let time pass without taking any action. While the investment may be a good choice when purchased, it can become less and less appropriate as time passes. Saving for retirement is one area where this result can be clearly seen in a variety of scenarios.

In one common example, investors purchase stock in their employer for their entire career. Over the course of several decades, biweekly payroll deductions and an employer match help the employee build up a substantial number of shares in the company. As the employee's retirement date approaches, the stock market crashes, devastating the value of the employee's portfolio and forcing her/him to continue working.

A similar result is often seen when an employee puts 100% of his or her savings into equity mutual funds. Over time the balance grows, but as the employee's retirement date grows near, a decline in the stock market wipes out a substantial portion of the employee's nest egg.

College savings is yet another area where an investment plan can be sidetracked by an unexpected market decline.

These scenarios play out frequently. In response, the financial services industry has created investment products to help investors match their portfolio holdings to an appropriate time line. This approach helps investors avoid the negative outcomes associated with inappropriate asset allocation.

Of course, with any of these investments, one must pay attention to associated fees and costs. Some mutual funds and investment! products such as target date funds charge higher fees than others, so expenses must be taken into account when considering the time frame of your investment.

Evaluating Time Horizons

There are no hard-and-fast rules, but some generally agreed-upon guidelines will help you decide which investments are appropriate for various time lines.

To create a portfolio based on time, you must realize that volatility is a bigger risk short term than long term. If you have 30 years to reach a goal, such as retirement, market volatility that causes the value of your investment to plunge may not be an immediate danger given that you have decades to recover. Experiencing the same volatility a year before you retire can derail your plans.

Accordingly, placing parameters around the time frame of your investments is a valuable exercise.

Short Term As a general rule, short-term goals are those less than five years in the future. With a short-term horizon, if a drop in the market occurs, the date on which the money will be needed will be too close for the portfolio to have enough time to recover from the market drop. To reduce the risk of loss, holding the investment in cash or cash-like vehicles is likely the most appropriate strategy. Money market funds and short-term certificates of deposit are popular conservative investments, as are savings accounts.

Intermediate Term Intermediate-term goals are those five to 10 years in the future. At this range, some exposure to stocks and bonds will help grow the initial investment's value, and the amount of time until the money must be spent is far enough in the future to permit a degree of volatility. Balanced mutual funds, which include a mix of stocks and bonds, are popular investments for intermediate-term goals.

Long-Term Time Horizon Long-term goals are those more than 10 years in the future. More conservative investors may cite 15 years as the time horizon for long-term goals. Over long-term time periods, stocks offer greater potential rewards. While they also entail greater risk, there is more time available to recover from loss.

Investment Choices

To help investors avoid the negative consequences associated with bad timing, the financial services industry has created a variety of investments designed to address the challenge.

Target-Date Funds Target-date funds are mutual funds that automatically reset the mix of assets (stocks, bonds, cash) in their portfolios according to a selected time frame. They are frequently used as retirement savings vehicles, with the mix of investments becoming more conservative as the investor's retirement date approaches. For example, a target-date fund designed to fund an investor's retirement 30 years from today might have a mix of investments weighted heavily toward stocks with a moderate amount of bonds and little cash. Thirty years later, the mix might be the exact opposite, with cash making up the largest percentage of the portfolio followed by a moderate amount of bonds and few stocks.

College Savings Plans Qualified tuition programs, also known as 529 plans, help investors cover the cost of a college education. Named after Section 529 of the Internal Revenue Code, these tax-advantaged programs help investors pay the costs of tuition, room and board, books and other costs associated with a college education. Similar to predicting the year in which an investor is eligible to retire, it is easy to determine the age at which a child will be headed to college. Through 529 plans, investors have two ways to plan in advance for the expense.

One method is a college savings plan that permits investors to set aside a specific amount of money that is generally invested in a pre-approved list of mutual funds. Many of these funds are age-based funds, which operate in a similar manner to target-date funds. As the child ages and the date on which tuition must be paid approaches, the asset allocation becomes more conservative. Since the value of the investment portfolio changes with fluctuations of the financial markets, automatic adjustments to the portfolio move money to more conservative investments to reduce the risk that a stock market crash will wipe out the savings just before tuition comes due. The challenge here is that underlying investment growth may not be enough to cover the full tuition cost.

Investors who have a lump cash sum that can be invested and are concerned about market fluctuations have another option. This method is known as a prepaid plan. A prepaid plan enables investors to purchase future semesters of college at today's price. The prepayment guarantees the beneficiary's tuition in the future regardless of the actual cost. By paying in advance, investors get a lower price and eliminate the need to worry about fluctuation in the financial markets hurting their ability to meet tuition costs.

Mutual Funds Choosing investments that automatically shift assets to a more conservative investment strategy isn't the only option for investors seeking to invest using time horizons. Investing in mutual funds and then moving the money to less-aggressive funds as time passes is another option. So-called "balanced" funds even offer a balance between stocks and bonds in a single fund.

Mutual funds are a convenient way to diversify. They offer professional investment management, including security selection, and a large variety of choices, making it easy to get a mix of many securities, including both stocks and bonds.

Stocks and Bonds If you have the time, skill and interest, you can build and manage your own portfolio. As time passes, you can adjust your asset allocation in favor of less-aggressive investments.

The Bottom Line

Time-horizon investing is all about planning. You need to think about your goals. Once you have done that, investment selection is based on the amount of time you have until the goal must be funded. As the funding date approaches, assets are shifted to move conservative investments to reduce the risk of market-related losses derailing your strategy. However, associated fees need to be considered when choosing the mix of investments.

Best Safest Companies To Watch For 2014

I'll admit it. The traditional grocery business isn't an exciting industry for investment potential. Profit margins are low, with almost zero chance of spiking higher. Meaningful sales growth is hard to find, too. And grocery stores suffer from the constant threat of having more nimble retailers push into their markets, as we saw with Amazon.com's latest expansion of its food delivery business.

However, the safest path to big investment returns is through buying into years of predictable growth at a reasonable price. That's why I think Kroger (NYSE: KR  ) stock could be a great option for long-term investors right now.

Kroger chugs along
The grocer's latest earnings show the kind of steady results that most companies can only dream about. With a 3.3% boost in sales, Kroger notched its 38th consecutive quarter of growth at its existing stores. Customers responded to the company's investments in its locations by making more frequent visits, and by purchasing more products per trip. Packed register lines brought quarterly revenue to an all-time high $30 billion, and profits were up about 10%, to $481 million.

Best Safest Companies To Watch For 2014: Petroleo Brasileiro S.A.- Petrobras(PBR)

Petroleo Brasileiro S.A. primarily engages in oil and natural gas exploration and production, refining, trade, and transportation businesses. The company?s Exploration and Production segment involves in the exploration, production, development, and production of oil, liquefied natural gas (LNG), and natural gas in Brazil. This segment supplies its products to the refineries in Brazil, as well as sells surplus petroleum and byproducts in domestic and foreign markets. Its Supply segment engages in the refining, logistics, transportation, and trade of oil and oil products; export of ethanol; and extraction and processing of schist, as well as holds interests in companies of the petrochemical sector in Brazil. The Gas and Energy segment involves in the transportation and trade of natural gas produced in or imported into Brazil; transportation and trade of LNG; and generation and trade of electric power. In addition, the segment has interests in natural gas transportation and d istribution companies; and thermoelectric power stations in Brazil, as well engages in fertilizer business. The Distribution segment distributes oil products, ethanol, and compressed natural gas in Brazil. The International segment involves in the exploration and production of oil and gas, as well as in supplying, gas and energy, and distribution operations in the Americas, Africa, Europe, and Asia. Further, the company involves in biofuel production business. Petroleo Brasileiro was founded in 1953 and is based in Rio de Janeiro, Brazil.

Advisors' Opinion:

• [By Tyler Crowe]

  Petrobras (NYSE: PBR  ) , Brazil's national oil company, is planning on spending $237 billion over the next seven years to double its oil output to about 5 million barrels per day. On a per-year basis, that much money is the same as one-third of what all U.S. exploration and production companies will spend combined. ��

• [By Tyler Crowe and Aimee Duffy]

  Brazil's oil production numbers are up, but the 3.8% jump in April over the previous month doesn't sound as pretty when compared to year-over-year production, which is still down 4.9%. With Petrobras (NYSE: PBR  ) bringing several of its aging offshore rigs back on line after maintenance, the renaissance of Brazil's oil business will not be found in its production numbers... not yet.

• [By Tyler Crowe]

  And the winner is ...
  It all depends on your definition of "winning: to determine who came out on top of this auction. If your definition is most blocks won, then Petrobras (NYSE: PBR  ) �took that prize running away. The company spent $268 million for rights on 35 blocks. The next closest in terms of bids won was OGX, which secured 13 blocks in the entire auction. It shouldn't come as a surprise to anyone that Petrobras was the most active in this auction. Not only is Petrobras Brazil's largest oil company, but it also just recently completed an $11 billion bond issuance, the largest corporate bond sale from an emerging market ever. Some of that money was probably pre-planned for both this auction and the next Brazilian auction to happen in October. This move will further secure Petrobras' position as the largest oil producer in the country.�

• [By Selena Maranjian]

  The biggest new holdings are Chevron�and Salesforce.com. Other new holdings of interest include Brazilian oil giant Petrobras (NYSE: PBR  ) , which has seen its stock fall over the past few years. The company is weighed down by a lot of debt, but there are also promising signs from it, such as rising production numbers as some offshore rigs are brought back into service. Some are hopeful that solid car sales in Brazil will boost Petrobras' business.

Best Safest Companies To Watch For 2014: Under Armour Inc.(UA)

Under Armour, Inc. develops, markets, and distributes performance apparel, footwear, and accessories for men, women, and youth primarily in the United States, Canada, and internationally. It offers products made from moisture-wicking synthetic fabrics designed to regulate body temperature and enhance performance regardless of weather conditions. The company provides its products in three fit types: compression (tight fitting), fitted (athletic cut), and loose (relaxed) extending across the sporting goods, outdoor, and active lifestyle markets. Its footwear offerings comprise football, baseball, lacrosse, softball, and soccer cleats; slides; performance training footwear; and running footwear. The company also provides baseball batting, football, golf, and running gloves, as well as licenses bags, socks, headwear, custom-molded mouth guards, and eyewear that are designed to be used and worn before, during, and after competition. Under Armour sells its products through retai l stores, as well as directly to consumers through its own retail outlets and specialty stores, Website, and catalogs. The company was founded in 1996 and is headquartered in Baltimore, Maryland.

Advisors' Opinion:

• [By Rich Smith]

  Put in perspective, that's more expensive than a share of sportswear maker Under Armour (NYSE: UA  ) , and twice the P/E of Nike (NYSE: NKE  ) . But that's OK. Because according to analyst estimates, Man Utd is likely to grow its profits at the astounding speed of 45% per year over the next four years -- twice as fast as Under Armour, and four times the speed of Nike. If all goes as planned, today's Man Utd share price of $17 and change will be only 26 times the earnings the club makes next year, and only 22 times 2015 earnings.

• [By Anh HOANG]

  Under Armour's (NYSE: UA  ) shares went from around $6.20 per share in March 2009 to nearly $80.30 per share at the time of writing. The stock seems quite expensive because it is trading at around 28.20 times its EV/EBITDA, or earnings before interest, taxes, depreciation, and amortization. However, the business has kept growing at an impressive rate. One of the main factors driving the business growth is Under Armour's ability to innovate to keep up with fast-changing customer behavior.

Top 10 Heal Care Stocks To Invest In Right Now: Goldman Sachs Group Inc.(The)

The Goldman Sachs Group, Inc., together with its subsidiaries, provides investment banking, securities, and investment management services to corporations, financial institutions, governments, and high-net-worth individuals worldwide. Its Investment Banking segment offers financial advisory, including advisory assignments with respect to mergers and acquisitions, divestitures, corporate defense, risk management, restructurings, and spin-offs; and underwriting securities, loans and other financial instruments, and derivative transactions. The company?s Institutional Client Services segment provides client execution activities, such as fixed income, currency, and commodities client execution related to making markets in interest rate products, credit products, mortgages, currencies, and commodities; and equities related to making markets in equity products, as well as commissions and fees from executing and clearing institutional client transactions on stock, options, and fu tures exchanges. This segment also engages in the securities services business providing financing, securities lending, and other prime brokerage services to institutional clients, including hedge funds, mutual funds, pension funds, and foundations. Its Investing and Lending segment invests in debt securities, loans, public and private equity securities, real estate, consolidated investment entities, and power generation facilities. This segment also involves in the origination of loans to provide financing to clients. The company?s Investment Management segment provides investment management services and investment products to institutional and individual clients. This segment also offers wealth advisory services, including portfolio management and financial counseling, and brokerage and other transaction services to high-net-worth individuals and families. In addition, it provides global investment research services. The company was founded in 1869 and is headquartered in New York, New York.

Best Safest Companies To Watch For 2014: Fluor Corporation(FLR)

Fluor Corporation, through its subsidiaries, provides engineering, procurement, construction, maintenance, and project management services worldwide. Its Oil & Gas segment offers design, engineering, procurement, construction, and project management services to upstream oil and gas production, downstream refining, chemicals, and petrochemicals industries. This segment also provides consulting services comprising feasibility studies, process assessment, and project finance structuring and studies. The company?s Industrial & Infrastructure segment offers design, engineering, procurement, and construction services to the transportation, wind power, mining and metals, life sciences, manufacturing, commercial and institutional, telecommunications, microelectronics, and healthcare sectors. Its Government segment provides engineering, construction, logistics support, contingency response, management, and operations services to the United States government focusing on the Departme nt of Energy, the Department of Homeland Security, and the Department of Defense. The company?s Global Services segment offers operations and maintenance, small capital project engineering and execution, site equipment and tool services, industrial fleet services, plant turnaround services, temporary staffing services, and supply chain solutions. Its Power segment provides engineering, procurement, construction, program management, start-up and commissioning, and operations and maintenance services to the gas fueled, solid fueled, plant betterment, renewables, nuclear, and power services markets. The company also offers unionized management and construction services in the United States and Canada. Fluor Corporation was founded in 1912 and is headquartered in Irving, Texas.

Advisors' Opinion:

• [By CRWE]

  Fluor Corporation�� (NYSE:FLR) Chairman and Chief Executive Officer, David Seaton, and Chief Financial Officer, Biggs Porter, will give a presentation to investors at the Credit Suisse 2012 Engineering & Construction Conference in New York on Thursday, June 7 at 9:00 a.m. Eastern Daylight Time.

Best Blue Chip Stocks To Own For 2014

The Dow Jones Industrial Average (DJINDICES: ^DJI  ) �traded mostly mixed today as investors reacted to an ambiguous earnings season thus far, finishing the day up 0.1%. Even then, it was the worst performer among the three major indexes. Stock downgrades weighed on the blue chips, while Caterpillar (NYSE: CAT  ) shares jumped despite missing earnings estimates.

In the meantime, March existing home sales numbers landed slightly below expectations. The National Association of Retailers said home sales last month totaled 4.92 million, below projections of 5.01 million. Still, sales were up more than 10% from a year ago, indicating the housing market is still improving, though perhaps not as quickly as some had hoped.

Caterpillar, the world's largest maker of earth-moving equipment, opened the day essentially flat but gained in the afternoon to finish up 2.8%. The manufacturer reported per-share first-quarter profit down 45% to $1.31, and total revenue down 17% to $13.21 billion. Both figures missed estimates by about 4%. Management also lowered its full-year EPS guidance to $7 a share, while analysts had projected $7.67 a share. Still, trading near its 52-week low, the stock was up as CEO Doug Oberhelman said he thought mining purchases had hit bottom, and pointed to an increase in sales in China as another positive. The �company also plans to buy back about $1 billion worth of shares, its first such program since 2008.

Best Blue Chip Stocks To Own For 2014: Visa Inc.(V)

Visa Inc., a payments technology company, engages in the operation of retail electronic payments network worldwide. It facilitates commerce through the transfer of value and information among financial institutions, merchants, consumers, businesses, and government entities. The company owns and operates VisaNet, a global processing platform that provides transaction processing services. It also offers a range of payments platforms, which enable credit, charge, deferred debit, debit, and prepaid payments, as well as cash access for consumers, businesses, and government entities. The company provides its payment platforms under the Visa, Visa Electron, PLUS, and Interlink brand names. In addition, it offers value-added services, including risk management, issuer processing, loyalty, dispute management, value-added information, and CyberSource-branded services. The company is headquartered in San Francisco, California.

Advisors' Opinion:

• [By Kyial Robinson]

  What will they do next?

  (Photo Credit) Visa Previous 1/6 Next Visa (NYSE: V) is also taking action in France, reducing cash-machine fees and cutting credit card processing fees for transactions.

• [By Chris Hill]

  Shares of Visa (NYSE: V  ) rose to an all-time high on Thursday after the company reported stronger-than-expected second-quarter earnings. Should investors buy Visa, or is MasterCard (NYSE: MA  ) the better bet? In this installment of MarketFoolery, our analysts discuss Visa, MasterCard, PayPal, and the future of the payments industry.

Best Blue Chip Stocks To Own For 2014: Apple Inc.(AAPL)

Apple Inc., together with subsidiaries, designs, manufactures, and markets personal computers, mobile communication and media devices, and portable digital music players, as well as sells related software, services, peripherals, networking solutions, and third-party digital content and applications worldwide. The company sells its products worldwide through its online stores, retail stores, direct sales force, third-party wholesalers, resellers, and value-added resellers. In addition, it sells third-party Mac, iPhone, iPad, and iPod compatible products, including application software, printers, storage devices, speakers, headphones, and other accessories and peripherals through its online and retail stores; and digital content and applications through the iTunes Store. The company sells its products to consumer, small and mid-sized business, education, enterprise, government, and creative markets. As of September 25, 2010, it had 317 retail stores, including 233 stores in the United States and 84 stores internationally. The company, formerly known as Apple Computer, Inc., was founded in 1976 and is headquartered in Cupertino, California.

Advisors' Opinion:

• [By Alex Planes]

  Let's start with what's tripping up OmniVision lately: expectations. The company can't get by with first-quarter guidance that looks just good enough at best, especially not after blowing Wall Street away so impressively in the holiday quarter. Although OmniVision has diversified away from Apple (NASDAQ: AAPL  ) , it hasn't diversified quite enough. OmniVision holds about half of the tablet image sensor market, which lines up very well with Apple's share of the tablet market (estimated at 51% in 2012 and projected to drop to 46% in 2013,�according to IDC).

• [By Evan Niu, CFA]

  With Apple (NASDAQ: AAPL  ) and Cirrus Logic (NASDAQ: CRUS  ) holding hands today as they dive into new 52-week lows, how cheap have shares gotten? Answer: Very.

10 Best Gold Stocks To Watch For 2014: Chevron Corporation(CVX)

Chevron Corporation, through its subsidiaries, engages in petroleum, chemicals, mining, power generation, and energy operations worldwide. It operates in two segments, Upstream and Downstream. The Upstream segment involves in the exploration, development, and production of crude oil and natural gas; processing, liquefaction, transportation, and regasification associated with liquefied natural gas; transportation of crude oil through pipelines; and transportation, storage, and marketing of natural gas, as well as holds interest in a gas-to-liquids project. The Downstream segment engages in the refining of crude oil into petroleum products; marketing of crude oil and refined products primarily under the Chevron, Texaco, and Caltex brand names; transportation of crude oil and refined products by pipeline, marine vessel, motor equipment, and rail car; and manufacture and marketing of commodity petrochemicals, plastics for industrial uses, and fuel and lubricant additives. It a lso produces and markets coal and molybdenum; and holds interests in 13 power assets with a total operating capacity of approximately 3,100 megawatts, as well as involves in cash management and debt financing activities, insurance operations, real estate activities, energy services, and alternative fuels and technology business. Chevron Corporation has a joint venture agreement with China National Petroleum Corporation. The company was formerly known as ChevronTexaco Corp. and changed its name to Chevron Corporation in May 2005. Chevron Corporation was founded in 1879 and is based in San Ramon, California.

Advisors' Opinion:

• [By Tyler Crowe]

  While it may be easy to complain about energy prices in the U.S., it's nothing compared to what people pay in Europe. Yet, despite high prices and the discovery of shale resources, countries that do have resources can't seem to get things figured out. This week, Chevron's (NYSE: CVX  ) plan to explore for natural gas in Ukraine was put on hold as local authorities have to each give their approval before the national government can issue a license to the company. Also, Chevron might not have much to look forward to. Royal Dutch Shell (NYSE: RDS-A  ) , the company who already has permission to drill in Ukraine, needs to hand over 31% to 60% of the gas it produces to the government.�

Best Blue Chip Stocks To Own For 2014: McDonald's Corporation(MCD)

McDonald?s Corporation, together with its subsidiaries, operates as a worldwide foodservice retailer. It franchises and operates McDonald?s restaurants that offer various food items, soft drinks, coffee, and other beverages. As of December 31, 2009, the company operated 32,478 restaurants in 117 countries, of which 26,216 were operated by franchisees; and 6,262 were operated by the company. McDonald?s Corporation was founded in 1948 and is based in Oak Brook, Illinois.

Advisors' Opinion:

• [By Andrew Marder]

  Walking a thin line
  The difficulty that Wendy's has had, and will continue to have, I think, is that it's very hard to be all things to all people. The idea of being the better burger chain means that Wendy's is going to be competing not only with McDonald's (NYSE: MCD  ) and Burger King, but also Five Guys and In-and-Out Burger.

• [By Douglas A. McIntyre]

  Burger Kind has few advantages over its much larger�rival McDonald’s Corp. (NYSE: MCD), which has almost 13,000 locations in the United States.�Burger King has just�over 7,000. Wendy’s Co. (NYSE: WEN) is gaining with almost 6,000 stores. Burger King’s sales last year were less than $2 billion, in contrast to McDonald’s sales of $27.5 billion.

• [By Erin Kennedy and Jason Moser]

  Fast-food colossus McDonald's (NYSE: MCD  ) reported third-quarter earnings this morning, and it proved to be a mixed bag. Investors bid the stock down at the open, but shares have mostly recovered since.

• [By Matt Thalman]

  Despite announcing a $0.77 per-share quarterly dividend yesterday, McDonald's (NYSE: MCD  ) is down 1% today. However, shares could be moving lower because of news from yesterday: During the company's annual shareholder meeting, CEO Don Thompson had to defend his company against comments that McDonald's food is contributing to the obesity problem in America. Some critics have even pointed out that the company's marketing strategy -- including its mascot, Ronald McDonald -- has contributed to childhood obesity.�

Best Blue Chip Stocks To Own For 2014: Philip Morris International Inc(PM)

Philip Morris International Inc., through its subsidiaries, engages in the manufacture and sale of cigarettes and other tobacco products in markets outside of the United States. Its international product brand line comprises Marlboro, Merit, Parliament, Virginia Slims, L&M, Chesterfield, Bond Street, Lark, Muratti, Next, Philip Morris, and Red & White. The company also offers its products under the A Mild, Dji Sam Soe, and A Hijau in Indonesia; Diana in Italy; Optima and Apollo-Soyuz in the Russian Federation; Morven Gold in Pakistan; Boston in Colombia; Belmont, Canadian Classics, and Number 7 in Canada; Best and Classic in Serbia; f6 in Germany; Delicados in Mexico; Assos in Greece; and Petra in the Czech Republic and Slovakia. It operates primarily in the European Union, Eastern Europe, the Middle East, Africa, Asia, Canada, and Latin America. The company is based in New York, New York.

Advisors' Opinion:

• [By Shauna O'Brien]

  On Wednesday, Philip Morris International Inc. (PM) announced that its board has approved a 10.6% increase to its quarterly dividend.

  PM has increased its dividend from 85 cents to 94 cents per share, or $3.76 annually.

  The dividend will be paid on October 11 to shareholders of record on September 26. The stock will go ex-dividend on September 24.

  Philip Morris shares were mostly flat during pre-market trading Wednesday. The stock has been mostly flat YTD.

• [By Fede Zaldua]

  Imperial trades cheaply and pays a great, sustainable and for-ever-growing 4.5% cash dividend yield. The company's 2014 10.4 times P/E multiple represents a 40% discount to what most European consumer staples sell for. Besides, the owner of brands such as Davidoff and Gauloises, trades at a much more conservative level than its direct tobacco peers. Philip Morris International (PM) and British American Tobacco (BTI) sell for 2014 15 and 14.2 times earnings, respectively.

• [By Sean Williams]

  The end result of these multiple actions has been an ongoing reduction in smoking rates over the past four decades and tougher times for U.S. tobacco producers such as Altria (NYSE: MO  ) and Reynolds American (NYSE: RAI  ) . In fact, a tough domestic sales climate was one reason Altria decided to spin off its overseas operations into Philip Morris International (NYSE: PM  ) in 2008. By separating its business, the hope was that investors would have a better understanding of the fundamental forces driving Altria and Philip Morris.

• [By Holly LaFon]

  Company % of Assets Pepsico (PEP) 3.4 Philip Morris (PM) 2.3 Tesco PLC ADR (TSCO) 2.1 Molson Coors Brewing (TAP) 2.1 Microsoft (MSFT) 1.9 Merck (MRK) 1.9 Procter & Gamble (PG) 1.8 Avon Products (AVN) 1.6 Wal��art (WMT) 1.6 Medtronic 1.6 Hospira (HSP) 1.5 BP (BP) 1.4 Medco Health Solutions (MHS) 1.3 Johnson & Johnson (JNJ) 1.3 Unilever NV (UL) 1.3
  Jeff is also optimistic about natural gas and believes the recession in Europe could be setting up "a generational buying opportunity."

Best Blue Chip Stocks To Own For 2014: International Business Machines Corporation(IBM)

International Business Machines Corporation (IBM) provides information technology (IT) products and services worldwide. Its Global Technology Services segment provides IT infrastructure and business process services, including strategic outsourcing, process, integrated technology, and maintenance services, as well as technology-based support services. The company?s Global Business Services segment offers consulting and systems integration, and application management services. Its Software segment offers middleware and operating systems software, such as WebSphere software to integrate and manage business processes; information management software for database and enterprise content management, information integration, data warehousing, business analytics and intelligence, performance management, and predictive analytics; Tivoli software for identity management, data security, storage management, and datacenter automation; Lotus software for collaboration, messaging, and so cial networking; rational software to support software development for IT and embedded systems; business intelligence software, which provides querying and forecasting tools; SPSS predictive analytics software to predict outcomes and act on that insight; and operating systems software. Its Systems and Technology segment provides computing and storage solutions, including servers, disk and tape storage systems and software, point-of-sale retail systems, and microelectronics. The company?s Global Financing segment provides lease and loan financing to end users and internal clients; commercial financing to dealers and remarketers of IT products; and remanufacturing and remarketing services. It serves financial services, public, industrial, distribution, communications, and general business sectors. The company was formerly known as Computing-Tabulating-Recording Co. and changed its name to International Business Machines Corporation in 1924. IBM was founded in 1910 and is based in Armonk, New York.

Advisors' Opinion:

• [By John Divine]

  While ending as the third-biggest blue chip gainer Monday, International Business Machines (NYSE: IBM  ) is far and away the stock with the most ability to move the Dow. Singlehandedly responsible for nearly 10% of the index's movements, IBM's 1% advance today helped put the Dow firmly in the green. With the IT bigshot's second-quarter report set to come out Wednesday, Big Blue may continue to dictate the mood of the markets this week; analysts expect profits to grow between 5% and 6%.

Best Blue Chip Stocks To Own For 2014: Colgate-Palmolive Company(CL)

Colgate-Palmolive Company, together with its subsidiaries, manufactures and markets consumer products worldwide. It offers oral care products, including toothpaste, toothbrushes, and mouth rinses, as well as dental floss and pharmaceutical products for dentists and other oral health professionals; personal care products, such as liquid hand soap, shower gels, bar soaps, deodorants, antiperspirants, shampoos, and conditioners; and home care products comprising laundry and dishwashing detergents, fabric conditioners, household cleaners, bleaches, dishwashing liquids, and oil soaps. The company offers its oral, personal, and home care products under the Colgate Total, Colgate Max Fresh, Colgate 360 Advisors' Opinion:

• [By Eric Volkman]

  It's one of the steadiest dividend payers on the market, and it's continuing to fly level. Colgate-Palmolive (NYSE: CL  ) has declared a fresh quarterly common stock dividend, which is to be $0.34 per share, paid on August 15 to shareholders of record as of July 23. That amount matches the firm's previous distribution; this was paid in May. Prior to that, Colgate-Palmolive handed out $0.31 per share.

• [By Dividend Growth Investor]

  In a previous article, I outlined that it is getting more difficult to find quality dividend paying stocks to buy. Most of the usual suspects like Kimberly-Clark (KMB) or Colgate-Palmolive (CL) are very overvalued today, which prevents me from adding to my positions there. Other companies like Chevron (CVX) are attractively valued today, but unfortunately my portfolio is overweight in them. Currently I find the oil sector to be cheap and have some of the lowest P/E ratios in the market. However, I would hate to be concentrated in one sector which is exposed to the fluctuating prices in its commodity products.

• [By Wallace Witkowski]

  Other earnings highlights in the coming week include Dow components McDonald�� Corp. (MCD) , DuPont (DD) , AT&T Inc. (T) , and Procter & Gamble Co. (PG) . Notable S&P 500 companies include Halliburton Co. (HAL) , Netflix Inc. (NFLX) �, Amgen Inc. (AMGN) �, TripAdvisor Inc. (TRIP) �, Amazon.com Inc. (AMZN) �, Colgate-Palmolive Co. (CL) �, Ford Motor Co. (F) �, Dow Chemical Co. (DOW) �, and United Parcel Service Inc. (UPS) �

• [By Dan Caplinger]

  Moreover, it's starting to appear that Clorox has weathered a tough part of its business cycle. Throughout the industry, Procter & Gamble (NYSE: PG  ) , Colgate-Palmolive (NYSE: CL  ) , and Clorox all had to deal with rising costs for the inputs they needed to make their respective products. The companies responded by implementing price-cutting measures and passing on part of their higher costs to their customers. For its part, Clorox was able to expand its gross margins by a full percentage point, with a worse-than-normal flu season contributing to sales. Now that input-cost inflation is easing, P&G and Clorox expect to see better profitability, with growth starting to approach the faster rates that Colgate has enjoyed.

Lowe's Disappoints Despite Home Improvement Growth

Lowe's Cos Lowe's Cos delivered disappointing earnings results this morning, just one day after larger competitor Home Depot Home Depot beat the Street.

The home improvement retailer reported third quarter net earnings of $499 million, up 26% from the same period last year but below the consensus estimate of $503.5 million. Earnings per share were 47 cents, just below the Street's 48 cent estimate.

Sales were up 7.3% to $13 billion, above the Street's $12.7 billion estimate, however shares opened down 3.7% at $48.59.

Citi analyst Kate McShane noted surprise that the stronger than expected sales results did not translate to an earnings per share beat. The miss, she says, was driven by weaker than expected gross margins, which were 34.58% versus the 34.64% analyst expectations.

Citi maintains a neutral rating in part due to weak same store sales when compared to Home Depot. Lowe's same store sales were up 6.2%. Yesterday Home Depot reported 7.4% same store sales growth.

CEO Robert Niblock noted that results were bolstered by a recovering home improvement market, mirroring comments about housing market strength in Home Depot's earnings report. Looking ahead Niblock added, "The home improvement industry is poised for persisting growth in the fourth quarter and further acceleration in 2014."

Top 10 Casino Companies To Own In Right Now

According to the National Association of Realtors existing-home sales were up 6% n October from the same period last year to 5.12 million. Sales however were down 3.2% from September to October.

The company updated its full year guidance. It now forecasts 6% sales growth up from a previous 5% growth outlook. Lowe's also expects same store sales to grow 5%, up from a 4.5% prior outlook. It now forecasts $2.15 in earnings per share, up from $2.10 but below the Street's $2.20 estimate.

–
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Nominate the Best Websites For Your Money: onforb.es/1dXPstY

F5 Networks a Buy on Growth and Profits

Popular Posts: GRPN – Has Groupon Gotten Ahead Of Itself Again?One Hot New IPO and One For My Wish List Recent Posts: 3 Attractive Stocks for Your Portfolio F5 Networks a Buy on Growth and Profits GRPN – Has Groupon Gotten Ahead Of Itself Again? View All Posts

I have a new opportunity in the Big Data arena that is a different way to capitalize on the continued growth of Internet traffic and information that I’d like to share with you today.

A recent pullback on a small guidance miss at F5 Networks (FFIV) is giving us a good entry point that I want us to take advantage of ahead of strong growth catalysts.

F5 Networks’ hardware and software help manage Internet traffic across existing hardware and the cloud, with expertise in content delivery and security. The emergence of “virtual servers” over the past several years, alongside the growth in data centers (the warehouses where servers are located) and the explosive expansion in mobile computing at the office, have boosted demand for FFIV’s core hardware/software, known as application deliver controllers, or ADCs.

Top 10 Medical Companies To Watch For 2014

ADCs are a critical part of “service provider” networks, where telecom, video and other businesses must manage the flow of data across their infrastructure – making sure that content is delivered seamlessly and securely. Think of them as boxes that sit in front of a company’s server and direct traffic. They look at each piece of data coming in, analyze where it’s coming from and where it needs to go, and then redirects, prioritizes or blocks the information as needed. ADCs help servers run a lot smoother by keeping them from having to do all this data analysis on their own.

You may have seen the oft-repeated statement by tech behemoth Cisco (CSCO) that Internet traffic is growing by as much as 40% annually. That means that there is a strong and growing need for these ADCs, making FFIV a great way to play the expansion in data management since the company has the strongest market share for the controllers at about 50%.

Of the roughly $1.3 billion that FFIV makes on the top line, 60% comes from hardware, and 90% of that tally (or 54% of total revenues) comes from its Big IP brand of ADCs, as well as security offerings. The remainder comes from services and maintenance the company provides to clients who have FFIV equipment in the field.

FFIV is not just a box maker. It has a valuable proprietary traffic management operating system (TMOS) that inspects and modifies Internet traffic. TMOS has helped FFIV expand its total addressable market through the years, growing from secure remote access a decade ago, to the growing virtualization arena where several servers can be configured to act like one single unit.

Growth Outside of the Box

Sales have grown at a compounded annual rate of about 20% since the recession, reaching nearly $1.5 billion in the fiscal year that just ended in September. While the year-over-year growth rate has slowed to the mid to high single digits, up about 8% in its recent fiscal year, there are catalysts in place to help quicken the pace over the next few years.

In its fiscal fourth-quarter report last week, the company delivered good results in a period where many networking peers, such as Citrix (CTXS) (which has signed on with Cisco as the latter exited the ADC market) and Riverbed (RVBD) posted poor or just so-so results.

This tells me that despite some softening macro factors that bedeviled other companies, there is continuing demand for FFIV, and the numbers bear this out. Non-GAAP earnings were $1.26 a share, which was nicely ahead of consensus at $1.19, while a 9% jump in revenues to $395 million bested estimates of $384 million.

Despite the strong quarter, the stock has been weak since the report as there are some lingering concerns over guidance. Management guided for fiscal first-quarter revenue of about $395 million, above the expected $389 million, but said it expects earnings of $1.17-$1.20 a share, while analysts had estimated $1.20. The guidance reflects product growth and some near-term margin pressure on its operating margin line, due in part to investing in sales and marketing, which means margins in the first half of the year will be in the mid 30% range before trending back into the high 30% range. This was not a huge guidance miss and the selling looks a bit overdone to me.

Meanwhile, we can use the recent weakness as a buying opportunity. FFIV has been able to grow product sales (after a few quarters of sluggish growth and even a decline in the first and second quarters of this year) as it has launched new software and hardware upgrades. Management also said its installed base of users has a relatively older suite of ADCs in place, ranging from three to six years of service, and even longer, in some cases. That means a refresh cycle has just begun gaining traction.

These are company-specific tailwinds, and should enable FFIV to weather any near-term bumps to see some growth in the years ahead. The emergence of the cloud and security concerns, where 30% of new IP platforms sold by FFIV in the latest quarter had at least one security feature, should also help F5 grow sales of its security features tied to its Big IP platform.

The company could earn as much as $6.10 a share in its next fiscal year that ends September 2015, which would be about 20% growth over the current year’s consensus of $5.10 a share. This assumes revenues of $1.9 billion with margins of 39% in that period, which would add a net cash position of almost $8 a share and push the stock toward $110 within a year.

Not Your Dad's Nasdaq

Each Monday, MoneyBeat publishes a short column in the WSJ print edition highlighting a statistic getting traction in the markets. This week’s "Big Number" is 51, the number of dividend payers among the 100 biggest Nasdaq(NDAQ)-listed companies.

The Nasdaq Composite is a far more mature version of its former self.

The tech-heavy index is poised to cross 4000 for the first time in 13 years, a development that has stoked concerns another tech-bubble is forming. But the Nasdaq nowadays has more dividend payers, fewer dot-coms and a more reasonable valuation, a nod to the evolution of an index once only known for tech and growth stocks.

Currently, 51 of the top 100 Nasdaq stocks – including Apple Inc.(AAPL), Microsoft Corp.(MSFT) and Cisco Systems Inc.(CSCO) – pay dividends. In December 1999, when the Nasdaq initially jumped above 4000, only nine companies paid dividends, according to stock-market research firm Birinyi Associates.

Between dividend increases and bigger share buybacks, the increase of shareholder-friendly moves in recent years have helped juice the Nasdaq as it approaches 4000. The index currently sports a dividend yield of 1.41%, compared to 0.11% in December 1999. The S&P 500′s dividend yield is 1.91%.

Apple, which started paying a regular dividend last year, is illustrative of the Nasdaq's trend. The iPhone and iPad maker has transformed from a high-flying growth stock to one that’s more characteristic of a plodding value stock over the past year, a fate similar to the likes of Microsoft, Cisco and Intel Corp.(INTC)

The Nasdaq finished Friday at 3985.87, its highest close since September 2000. It has risen in eight of the past 11 weeks and is up 32% this year, outpacing both the Dow and S&P 500.

Beyond dividends, there are other characteristics that show the differences between then and now. In 1999, there were 119 companies in the Nasdaq that had ".com" in their name. Now, there are 15.

And the Nasdaq now trades at about 25 times the previous year’s earnings, compared with 151 times trailing earnings in December 1999, Birinyi says.

In 1999, stocks were in a bubble. Now, the evidence isn't as convincing.

Q&A with Commerce Secretary Penny Pritzker

Penny Pritzker, an entrepreneur who launched Classic Residence by Hyatt among other companies and whose family co-founded Hyatt hotels, has been U.S. Commerce secretary since June. Last week, she unveiled the Commerce Department's "open for business" agenda aimed at growing jobs and improving the Obama administration's relationship with businesses.She spoke with USA TODAY reporter Paul Davidson about her vision. Excerpts from the interview, edited for space and clarity.

Q. Businesses have long complained of high taxes and excessive federal regulations. Your new slogan, "Open for Business," suggests you're trying to do things differently and strengthen ties to the business community. How so?

A. Why has there been this kind of frustration level and how do we change the perception? Because the reality is that what the business community is interested in is trade, immigration reform, corporate tax reform, greater investment in innovation, digital access, infrastructure — things like that. The issues that the business community is concerned with and where the administration is focused are not that different. It's the perception.

What was interesting to me is 98% of the people I met (while visiting businesses nationwide) came with an open mind and said this is a new day, this is a new Commerce secretary. So what I wanted to do is say I am your chief commercial advocate within the Administration. Tell us what your issues are and we'll see if we can help you. And we're going to be customer-focused.

Q. One priority you've set is closing the skills gap by funding programs that better match workers with open jobs. How is that different from what you're doing today?

A. Skills training needs to be industry led. Businesses need to define what they need so training providers can offer up the right training. That has not necessarily been the case. We have to train people for jobs that are open. One of the things I heard from business leaders around the country is, "I'm struggling to ! find a work force so I can grow."

One thing I've learned is that the solutions are local. Either regions or counties or states have to come together and decide where are they focused. And they need to get the business community and trainers to come together and say here are the things that we need. Here's the curricula, the credentials, the career pathway. And they need to be clear about it. And it needs to be demand driven. And frankly one of the challenges is that workforce funding today is not very flexible.

Q. Economic development efforts have been criticized as the government picking winners and losers and often getting it wrong. You say that one of your planned investments in manufacturing will transform economic development by making federal agencies more responsive to localities. How will this be different?

A. Say you're a local area. You may need funding for infrastructure, you may need R&D for a university, you may need training, you need different kinds of development support (to attract businesses). It might be the mayor and universities and the local transportation authority and various training organizations. Put together a vision for your area so that economic development funding is coordinated and not piecemeal. So when federal government is giving a grant or some kind of support it's not a bridge to nowhere — it's part of an overall strategic plan.

Q. Speaking of infrastructure, President Obama, as well as both Democrats and Republicans in Congress, say the country badly needs to upgrade its infrastructure to improve business investment and the economy. But how is that going to happen, especially with Congress still focused on cutting spending?

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A. What President Obama has suggested as part of the business tax reform is a one-time (tax reduction) that goes with (bringing foreign earnings back to the U.S.). He's saying let's take some of t! hat (tax ! income) and spend it on infrastructure.

Where we have money is with digital infrastructure (from the 2009 economic stimulus). We've laid over 100,000 miles of broadband across the country — putting in the kind of infrastructure that would not otherwise get done in the private sector.

Q. President Obama has talked about streamlining regulations but businesses often complain that they're becoming more cumbersome, especially with new environmental rules. What are you doing to get rid of unnecessary regulations?

A. The president has a regulatory look-back initiative. There's been 500 initiatives taken under that effort with about $10 billion of positive impact.

What we're doing here at Commerce are two major regulatory efforts. One is patent and trade. We're trying to work down our regulatory backlog (of patents) so we can become more effective and efficient at giving clearer patents so they're less vulnerable to litigation and also give people their patents more quickly.

The second is around export control reform. For certain items in the U.S. you need a license to export. We are taking over thousands and thousands of items that are thought of as having a national security issue, making them easier to get licenses for.

Cisco Stock Could Dive by 15% Due to New Threats

Cisco Systems Inc. (NASDAQ: CSCO) is involved in yet another internal restructuring of sorts, and the company has done what it can to manage its shares higher and higher. In fact, shares were up a sharp 28% year-to-date before Thursday. Now a new wave of networking coverage from Credit Suisse is casting a dark shadow on Cisco, and the implication is that shares could fall some 15%, if the thesis turns out to be accurate.

Credit Suisse initiated new coverage on shares of Cisco with a very unambitious Underperform rating. The firm issued a $21.00 price target, versus a $24.80 closing price on Wednesday.

Analyst Kulbinder Garcha believes that software-defined networking is going to be a threat to the traditional networking giants. He still thinks that Cisco is a high-quality company, but it also may be the most vulnerable of the old oligarchy. His biggest concern is that software-defined networking will shrink gross margins, even as Cisco tries to increase its services in the revenue mix.

Cisco has traded in a 52-week range of $16.68 to $26.49, and the consensus analyst target price is $26.77, according to Thomson Reuters. Its shares were down 1.2% at $24.48 in early Thursday morning trading. The call also was negative, or at least cautious, on two others.

Juniper Networks Inc. (NYSE: JNPR) was started as Neutral. Its assigned price target was $20.00, versus a $21.66 close on Wednesday. Juniper shares were down only 0.4% at $21.58, against a 52-week range of $15.62 to $22.98. We would caution that the $20.00 price target is only marginally lower than the consensus price target of $21.32.

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Ubiquiti Networks Inc. (NASDAQ: UBNT) was given a cautious Neutral rating as well, and it had the least negative bias in Garcha’s call. He said:

We believe that Ubiquiti has created a relatively unique business model that can disrupt several markets in the networking space over time. However, we believe shares are fully valued, with strong near-term revenue momentum offset by medium-term competitive risks and possible margin pressure.

His target price of $33.00 was barely under the $33.14 closing price on Wednesday.

At Work: Skip the musings in cover letter

Eric Zuckerman goes crazy when job hunters send cover letters that begin with a quote or poem.

Take this letter that started off with Robert Frost's awkwardly and somewhat inaccurately converted prose:

COLUMN: Take the dread out of cover letters
COLUMN: Packaging can trump all

"Two roads diverged in a wood and I took the one less traveled by, And that had made all the difference." The letter went on, "My career has not been one of just circumstances, but what has been right. And that has led me to …"

Zuckerman, president of PacTeam Group in Paramus, N.J., says he can't remember more because he didn't finish the letter.

But he remembers what he was thinking as he read it.

"What's your point? Who are you? Can we get to the meat here? I love Robert Frost, but what are you doing? You have my attention for 30 seconds. You're going to waste it while I read a poem?"

His advice: Make that glance count.

Another cover letter he received one fall started off like this: "It's that time of year we are thankful and to enjoy some quality time with friends and family." The next sentence said, "I have six years experience." It had nothing do with anything, he points out.

What would he like to see in a cover letter — and quickly?

A letter that in so many well-chosen words covers these three points:

1. Hello, I was excited to see that your company does such and such.

2. I noticed in your job posting that you need these particular skills and experiences.

3. I've been doing that exact thing, and here is how I can help you.

Instead, a lot of people feel compelled to write something "creative" that makes them stand out. But getting attention for the sake of creativity is missing the point.

The point is to write a rousing cover letter that enhances your chances of getting to the next step — a follow-up phone call, e-mail or interview.

Throw your prospective employer a bone: Find out about the growth plans for the doggie day care where you want to work and tell how your expertise can make that possible.(Photo: Getty Images)

Instead of getting attention, think of your cover letter as setting the tone, as an entryway into the mind of a potential employer. Remember, this is an employer's first impression and based on that, this person is deciding very quickly whether to go further.

STORY: Catch the eye with captivating cover letter
TIPS: CareerBuilder cover letter handbook

Another awful way to make your first connection is to be too casual.

"Hey! How are you?" wastes precious time.

This is a business letter. Write it like one.

It doesn't have to be stilted and uninspiring, but you're not talking to your buddy either.

And don't ever start with this: "I have a degree in mathematics and am presently looking for an opportunity." Telling an employer what you want and the degree you possess does nothing to address what's on her mind: "What will you do for me?"

Enter the employer's world. If you were that person, what does a job applicant need to say to show an understanding of your business and what you need?

How about something like this: "I read about your new facility and goal to open offices in Indiana and Michigan." Then explain how your skills and background can help her achieve those goals.

Make it impossible for her to not want to learn more.

Or how about: "When I heard you speak at the Bring Fido dog convention in Wisconsin, I was intrigued with your goal to build doggie day cares in four urban areas by April."

Share details about why you, with your in-depth expertise in operations and passion for taking care of animals, can help do this. Show your excitement about what the employer is trying to! achieve ! and how you're the person needed.

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And to make that glance pay off, impart that message in the very first sentence then keep on going until the very last word.

Career consultant Andrea Kay is the author of This Is How To Get Your Next Job: An Inside Look at What Employers Really Want. Reach her at andrea@andreakay.com. Twitter: @AndreaKayCareer.

Sterling Rebounds After Positive UK Employment Data and BOE Governor Carney Comments

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U.K. Inflation Soft

GBP/USD fell to trade at its lowest levels since September 13 yesterday, after CPI data missed expectations. The U.K. Office of National Statistics showed that consumer price inflation slowed to the lowest level since September 2012 last month. U.K. year over year CPI came in at 2.2 percent versus 2.5 percent expected, remaining above the Bank of England's 2.0 percent target level. 

Related: Dollar Strong as Yellen Prepares To Take New Role

Positive U.K. Employment Data

The pound found its footing in Wednesday's London trading session, after the U.K. Office for National Statistics reported that Britain's unemployment rate fell to 7.6 percent in the three months to September, its lowest level in more than three years. The figure came out in line with expectations, falling from the prior reading of 7.7 percent.  The Claimant Count Change in October beat analyst expectations of -33.2K to come in at -41.7K. The Claimant Count Change measures the change in the number of unemployed people in the U.K. during the reported month. 

Quantitative Easing

On November 7 the Bank of England maintained its asset-purchase target at 375 billion pounds and held its benchmark interest rate at 0.5 percent. The unemployment rate falling from 7.8 percent to 7.6 percent in the three months to the end of September marks a move closer to the seven percent level that will prompt the Bank of England to consider higher borrowing costs.

Related: Brent Recovers Modestly on Fed Taper Expectations

Comments From BOE Governor Carney

The British Pound rallied after Governor Mark Carney acknowledged the improved economic performance of the United Kingdom. He stated on Wednesday: "For the first time in a long time you don't have to be an optimist to see the glass is half full. The recovery has finally taken hold."

U.S. Dollar Strength

Meanwhile, the strength in U.S. dollar has been underpinned by speculation that the Federal Reserve will begin scaling back its $85 billion in monthly bond purchases as soon as December. Last week, the Bureau of Labor Statistics reported that the U.S. economy added 204,000 jobs in October, beating expectations of 125,000 by a wide margin.

GBP/USD Technical Outlook

Looking at the daily chart we can see that after forming a double top, yesterday price broke through important support to trade at the lowest levels in almost two months. However, the currency pair recovered on Wednesday's positive fundamental news and is holding above the prior support level of 1.5890.

Posted-In: Bank Of England Bureau of Labor Statistics Mark Carney U.K. Office of National StatisticsNews Forex Global Economics Federal Reserve Markets Best of Benzinga

(c) 2013 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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