First Take: Fed wants exit, doesn’t see one yet

If one thing is clear from the minutes of the October Federal Reserve meeting, it's that central bankers have some of the same worries about the economy, and the effect of the Fed's bond buying, that outsiders do.

In short: The Fed understands all the reasons to slow down and then end its $85 billion of monthly bond purchases — the fear that it is distorting markets, and that the sheer size of its portfolio may prove unwieldy as the economy improves. But ...

Fed minutes: Policymakers see tapering 'in coming months'

Full text: Minutes of the Fed's Oct. 29-30 meeting

The Fed also noted that only one member of the committee that sets monetary policy thought the economy has improved enough to begin easing off purchases, which pump money into the economy and especially into the housing market. The minutes released Wednesday show the other members worried about everything from the slowdown induced by federal spending cuts to the slowdown in housing that began virtually immediately after the Fed began hinting at tightening policy in May and June.

Three weeks ago, the initial reading after the Fed kept up its purchases had been that not much had changed in the central bank's thinking, But the minutes point to subtle evolutions in how the bank is thinking about tightening.

First, the minutes say some members were pressing for ways to begin tightening policy before there are unambiguous signs of a sustained pickup in growth. That's not a turnabout, but it is an evolution from Chairman Ben Bernanke's stance that the Fed's purchases will shrink as the economic data improve.

Some members of the committee — as always, the minutes don't disclose who said what — argued that such an evolution was premature. And they pointed out that even though politicians — and markets — are focusing on the sheer size of the Fed's holdings and new purchases as distorting prices of stocks and housing, the Fed still has "ample capacity" to buy more, compared to other nations' economies! .

The other sign of evolution in the minutes is that the Fed was turning its attention to how to convince markets, once it does reduce its bond buying, that the so-called "taper" doesn't mean the central bank will soon raise interest rates or otherwise try to slow the economy. The minutes go on about everything from vague "communications strategies" to lowering the targeted 6.5% unemployment rate that has been the accepted goal for when the Fed would begin to consider raising the Fed funds rate.

The Fed appears to be looking for an exit that won't rattle the housing market and slow consumer spending — which is exactly what happened over the summer. It won't be easy. But not much about the Fed's job since 2008 has been.

4 Quality Stocks With High Cash Returns

Simon Fennell, Co-Manager, William Blair International Growth Fund

Simon Fennell: The approach of the International Growth Fund is to look for the best companies we can find with a focus on quality. What we mean by quality is a heavy emphasis on cash return on invested capital, which we believe is the best metric. We look for companies with the best sustainable business models, positions and franchises. We assess the management profile, the business model, and seek companies that have higher sustainable returns. We believe that focus leads to portfolios with very good businesses that can benefit in up markets, but also protect investors in down markets. That is one of the areas that we're particularly focused on from a risk profile point of view within the portfolio.

Wally Forbes: I see. In your International Fund, do you go into U.S. stocks as well as stocks that are non-U.S. stocks?

Fennell: No, everything is outside of the U.S. We do have global strategies at William Blair, but the International Growth is non-U.S.

Forbes: Understand. Please go right ahead.

Fennell: Well, I wanted to discuss three or four names as examples of the holdings in the portfolio at the moment.

Forbes: Are these available in the U.S. through ADRs or otherwise?

Fennell: Yes, all of these have a U.S. listing as well, although some are more liquid than others. The first is ARM Holdings ARM Holdings (NASDAQ: ARMH) based here in Cambridge, England. It is the global leading mobile intellectual property company with a huge market share within mobile technology. It has been a name that has defined mobile technology for almost ten years, and we believe it still has significant growth potential from here. We believe margins still have substantial upside potential — even though it currently has high margins. We believe that earnings growth can be north of 25% for multiple years.

From a cash return point of view, as ARM starts to increase its licensing and royalty payments we believe that there can actually be some very significant upside potential. The issue with this company is not its market position, but much more the valuation, which is particularly high. That is a tradeoff that we often struggle with, although given its market dominance and high cash returns, it remains an incredibly interesting, innovative, and important company.

Forbes: So, it's good despite the fact that it's at a high multiple at the present time?

Fennell: ARM has always traded at a very high multiple, and the main reason for that is just that its future cash flows are very visible and because of the payments that it is gaining from licenses. It will derive royalties on products that don't come out for two, three, or four years. As a result, the nature of its business model is particularly long-term. It has a high multiple because investors believe that they can see growth for some time to come, but we believe that the return sustainability is also very significant.

The second name I wanted to highlight is ITV ITV (OTC: ITVPY), the U.K. TV company. ITV is an integrated media company with both production and transmission. It is quite an interesting story from two or three points of view. The first reason is the current management team led by Adam Crozier and the Chairman, Archie Norman. They have really turned this company around both operationally and financially.

The return profile makes it interesting as both a cyclical and something of a structural story. Three-quarters of its revenue comes from transmissions, with a basis on the advertising side and a quarter is coming from its production group. To have that sort of internal production capability is very interesting, but even more interesting is the fact that ITV is starting to export TV programs almost on a global basis. It is also doing some very interesting M&A work around the world, to pick up companies that it can take in-house and then push those products out on its platform across the world.

Forbes: So, it doesn't just operate in the U.K., it is international?

Fennell: Very much so. It takes original U.K. programming and then exports it on a global scale. Some of the programs that it is exporting are very interesting, as programs like Titanic or Mr. Selfridge have been pushed around the world. There have also been some interesting mergers and acquisitions in the U.S. This is the company that bought the production group that does the Duck Dynasty TV show which has, of course, tremendous popularity in the U.S.

Again, what ITV is trying to do is take some of these formats and then export them. ITV is also benefiting from an advertising upswing. Here in the U.K., the economy is getting a little bit better, and it is a beneficiary of that. ITV has paid down a lot of its debt, is very cash generative at the moment, and has highlighted that it is going to start buybacks and pay dividends.

J.P. Morgan adds advisers managing more than $3.9B

J.P. Morgan Securities LLC has hired eight advisers around the country who previously managed a total of more than $3.9 billion in assets, the wealth management firm said.

In the Northeast, Gerry Aroneo and Ray McLean left Deutsche Bank to join J.P. Morgan in Florham Park, N.J., while Ron Wall was hired from Morgan Stanley Wealth Management in the Philadelphia area.

Barry Snyder joined the firm's Palm Beach, Fla., office after working for four years at Credit Suisse Asset Management. Tom Ferrero and Everett Puri joined the Atlanta office from Barclays Wealth Americas and UBS Wealth Management Americas, respectively.

In the Midwest, a team led by Rick Konecny joined J.P. Morgan from UBS in Chicago, while on the West Coast, J.P. Morgan hired Melissa Whitney in San Francisco from Deutsche Bank, where she spent six years.

Those firms could not immediately be reached for comment.

JPMorgan Chase & Co., the nation's largest bank, has a relatively small but growing corps of financial advisers in the U.S. Their asset management division employed 2,995 financial advisers in the three-month period ended Sept. 30, up 191 from the prior quarter, according to the bank's latest earnings statement.

This is the first set of adviser hires reported by J.P. Morgan this year,

James Glassman touts taxing consumption instead of earnings

One theory of why the “new normal” slower-growth economy is here to stay is that the United States has become more like Europe and Japan, which is attracting mixed reviews, according to James Glassman, visiting fellow at the American Enterprise Institute for Public Policy Research.

“This is one of my own pet theories, but the debate is about whether the government should play a larger role in making life easier for people by providing more safety and comfort,” he said as part of a keynote presentation Monday morning in Chicago at the Investment Management Consultants Association's Advanced Wealth Management Conference.

“It is possible to still get America to grow faster in this environment of chasing desires by doing some things like taxing consumption instead of earnings,” Mr. Glassman said. “Policy change is really key to growth.”

As one example of the kind of government gridlock impeding economic growth, Mr. Glassman cited the fact that it takes 433 days to start a business in this country, up from 368 days in 2006.

Mr. Glassman, who is also chairman and chief executive of Public Affairs Engagement, laid the foundation for his presentation by pointing out: “The world is getting riskier in a special kind of way.”

Beyond what he described as the familiar notion of risk comparable to flipping a coin and having it come up heads about half the time, he said we are in a period of “discontinuous risk,” which he compared to a “bolt from the sky, a flash crash or the toppling of the World Trade Center towers.”

“That kind of risk is always hanging out there, and I think it's increasing,” Mr. Glassman said.

On the subject of the government shutdown, he tried to spread the blame evenly between Democrats and Republicans, but he also downplayed its significance.

“The previous 17 government shutdowns going back to when Gerald Ford was president totaled more than 100 days, including the longest during the Clinton era which lasted 21 days,” Mr. Glassman said. “During that shutdown, the stock market gained 3 percentage points, so the likelihood this time is that it will not have much of an effect on the economy.”

Mr. Glassman chided the Republican Party for its focus on defunding Obamacare, saying that those efforts “don't make sense, for all kinds of reasons.”

“If the Republicans had simply sat back and let the problems with Obamacare happen, people would have recognized that this government can't even run a website,” he said.

On the economy and the stubborn persistence of the new normal, Mr. Glassman pointed out that it might be easy for some to ignore the sluggish pace of economic growth against the backdrop of a stock market that has gained more than 150% since the March 2009 bottom.

“Investors are naturally reacting to l! ow interest rates, so stocks don't really indicate a strong economy,” he said.

“This is the worst recovery from a recession in modern history. It's not a recession right now and it's not a depression, but it feels pretty depressing,” Mr. Glassman said.

The good news is that you can “never, never, never underestimate the ability of Americans to overcome obstacles that are often created by our own government,” he said.

“I think one of the things people in this room can do is demand better leaders,” Mr. Glassman said.

On that note, he suggested an emphasis on reforming the U.S. tax code, something that he said could get bipartisan support.

“There are two points where tax revenue to the government will be zero. The first is if tax rates are at zero, and the second is if tax rates are at 100% and nobody will have a reason to work,” Mr. Glassman said.

“There is no doubt that at certain marginal tax rates, you are discouraged from earning or investing, and instead are apt to consume or choose leisure,” he said.

For example, Mr. Glassman said, if he were offered the opportunity to work an extra 10 hours for income that would be taxed at 80%, he would choose leisure.

“In some parts of the country, some people believe we have already gotten to the point where tax rates are too high and are discouraging work,” he said. “I think raising taxes is about the single worst thing you could do in this economy.”

Where would Mr. Glassman start with reforming the tax code?

“I would tax consumption instead of income, and I'd give people a deduction with no limit on investments they make, and I'd keep marginal rates as low as possible to not discourage work,” Mr. Glassman said.

“I'd introduce a simplified tax code so there aren't any special deals. If the government wants to give special deals for having more kids or buying an electric car or taking out a mortgage, just send them a check.”

Revett Minerals is Knocking on the Door (RVM)

If you've never heard of Revett Minerals Inc. (NYSEMKT:RVM) before right now, don't worry about it - you're not alone. The $25 million silver and copper miner doesn't have enough size to merit much media attention, and to make things more difficult, silver and miner has spent the better part of 2013 being out of favor. Yet, things are slowing changing for RVM and its shareholders.... for the better. Though a little more work needs to be done, this stock's knocking on the door of a monster breakout.

Just to set the tone, RVM was - up until last quarter - an active producer. In Q4 of last year, the company generated $7.2 million worth of metals, and $19.3 million in Q3 of 2012. Since then, however, the shut-down of a key mine (Troy) limited Revett Minerals' top line to $216K in Q1, and nil in Q2.

A shutdown is an alarming turn of events for shareholders to be sure; that mine's original access route became impassable, and the company was forced to pull out, and then re-approach the Troy mine from a different angle. The new entry should work, but it takes time and money, which has meant trouble for the stock; RVM shares have fallen from $4.00 in the fall of last year to $0.73 now.

10 Best Penny Stocks To Buy Right Now

So what makes it worth bringing Revett Minerals up now? A light at the end of the tunnel, which is (more importantly) being reflected on a chart of RVM.

Though it's not done anything riveting after finally hitting bottom in June, shares have quietly and inconspicuously wiggled their way back above the 20-day moving average line (blue). Better still, Revett Minerals is working on clearing its 50-day moving average line. They're small step to be sure, but all large moves start small. The fact that traders aren't balking as the 50-day line is being tested speaks volumes.

That being said, one final milestone remains - the ceiling at $0.74. That's where RVM shares peaked in mid-July, again in late July, and where it peaked today. Clearly there's a mental hurdle there, but if the stock can close above that mark, this long-brewing breakout will finally take hold. The safe thing to do is wait for the final clue to fall into place, but as good as things look already, it may be worth taking a pre-emptive plunge and not waiting for that convincing close above $0.74.

If you'd like to get more trading ideas and insights like this, be sure to become a subscriber to the daily SmallCap Network e-newsletter. You'll get stock picks, market calls, and more. It's free!

BMW puts diesel into flagship 7-series

BMW says today that it'll offer a diesel-power version of the flagship 7-series sedan in the U.S. this spring.

The 2014 BMW 740Ld xDrive sedan will have a starting price of $83,425, including $925 shipping. BMW says it'll make its U.S. auto show debut at the Chicago Auto Show in February.

Available in the long-wheelbase version of the 7, the diesel will be a 3-liter, in-line six-cylinder rated 255 horsepower at 4,000 rpm and 413 lb-ft of torque at 1,500 rpm. It is mated to an 8-speed automatic transmission.

The German automaker says it will accelerate from standstill to 60 mph in 6.1 seconds.

Its only rival is the Audi A8 L long-wheelbase TDI (Audi-speak for diesel). That one's rated 240 hp, 406 lbs.-ft. and has government mileage ratings of 24 mpg in the city, 36 mpg on the highway, 28 in combined city/highway use.

The Audi starts at $83,395 and will jump to 60 mph in 6.4 seconds, its maker says.

The U.S. government mileage ratings aren't yet finalized yet for the 7-series, but BMW suggests it will get 25% to 30% better mpg than "direct gasoline-powered counterparts."

Mileage-minded standard features will include an "eco" driving mode and BMW's auto stop/start.

Mercedes-Benz offered a diesel in the previous-generation S-class big sedan, but a diesel is not available in the current version, which was launched last fall.

Daniel Loeb Comments on Dow Chemical Company

Third Point's largest current investment is in The Dow Chemical Company (DOW)("Dow"). Dow shares have woefully underperformed over the last decade, generating a return of 46% (including dividends) compared to a 199% return for the S&P 500 Chemicals Index and a 101% return for the S&P 500.1 Indeed, in April 1999, nearly 15 years ago, an investor could have purchased Dow shares for the same price that they trade at today! These results reflect a poor operational track record across multiple business segments, a history of under-delivering relative to management's guidance and expectations, and the ill-timed acquisition of Rohm & Haas. The company's weak performance is even more surprising given that the North American shale gas revolution has been a powerful tailwind for Dow's largest business exposure – petrochemicals. 

We believe that Dow would be st serve shareholders' interests by engaging outside advisors to conduct a formal assessment of whether the current petrochemical operational strategy maximizes profits and if these businesses align with Dow's goal of transforming into a "specialty" chemic als company. The review should explicitly explore whether separating Dow's petrochemical businesses via a spin - off would drive greater stakeholder value.

From Daniel Loeb (Trades, Portfolio)'s Third Point fourth quarter 2013 commentary.

Dow's petrochemical operational strategy has been to migrate downstream , supposedly to earn higher m argins, to become more "specialty," and to increase the number of customer - facing products. Over the past five years, the shale revolution in North America has led to a boom in natural gas liquids production which has dramatically reduced raw material cos ts, while China and other emerging market economies have aggressively grown downstream derivatives capacity. This combination has led to significant upstream margin expansion in North America, where Dow is the largest ethylene producer, and a commoditizat ion of numerous downstream der! ivatives margins. Dow's current petrochemical strategy seems misaligned with the changed landscape.

Perhaps unsurprisingly, our analysis suggests that Dow's downstream migration strategy within petrochemicals has not yielded material benefits so far and instead may be a significant drag on profitability. We have examined Dow's aggregate petrochemical cap acities (and associated industry product margins) and compared its petrochemical cost base and profitability with pure - play peers. Our work suggests that upside from both cost - cutting and operating optimization could amount to several billion dollars in a nnual EBITDA. We suspect that Dow's push downstream has led the company to use its upstream assets to subsidize certain downstream derivatives either by sac rificing operational efficiency or making poor capital allocation decisions, or both. Poor segment disclosure combined with Dow's opaque and inconsistent transfer pricing methodology for internally sourced raw materials makes it difficult for shareholders (and presumably, the Board of Directors) to ascertain which business units are most challenged. W hat is easily ascertainable is that the magnitude of the aggregate under - earning warrants a c omprehensive strategic review , preferably with the assistance of an objective outside advisor answerable to a special committee of the Board.

Top 5 Safest Stocks To Own Right Now

We believe Dow shoul d apply the intelligent logic of its recently announced chlor - alkali separation to the entirety of its petrochemical businesses by creating a standalone company housing Dow's commodity petrochemical segments ("Dow Petchem Co . ") . 2 Such a separation would accomplish two important objectives. First, the split would accelerate 

Dow's transition to a true "specialty chemicals" company focused on attractive end - markets such as agriculture, food, pharmaceuticals, and electronics. Second, the st! andalone ! Dow Petchem Co . could realign its strategy away from largely focusing on downstream migration/integration and towards overall profit maximization.

The optimization of Dow Petchem Co . combined with the significant step - up in earnings from o rganic growth initiatives already put in place by management – the PDH plant, the Sadara JV, and the U.S. Gulf Co ast greenfield ethylene cracker – could translate into future EBITDA well in excess of $9 billion on a stand - alone basis . This would be before any improvement attributable to what management ref ers to as the "ethylene upcycle " . Both the " self - help " and cyclical upside opportunities create a compelling investment case, which is not reflected in Dow's current share price considering the entire co m pany's 2013 EBITDA base is ~$8 billion .

Despite Dow's best efforts to migrate downstream and become a specialty chemicals company, the market remains unconvinced. By creating Dow Petchem Co . , the strategic direction of these businesses would no longer b e dictated by the broader Dow strategy of becoming more specialty - focused. Instead, management could transform these businesses into a best - in - class, low - cost commodity petrochemical company.

The remaining Dow Chemical ("Dow Specialty Co . " ) 3 would be t he specialty chemicals leader that Dow has aspired to become over much of the past decade. Here too , we see meaningful upside over the coming years:

• In Dow's Agricultural Sciences segment, significant investments have been made in R&D which ha ve yet to t ranslate to profits, most notably in the development of Dow's ENLIST trait package. We are optimistic that ENLIST will be successfully adopted in the South American soybean market, where it has a natural first - mover advantage given that the 2,4 - D herbicide is approved for use in Brazil and Argentina. The South American soybean opportunity alone for ENLIST could i ncrease divisional EBITDA by 30 - 40% once fully penetrated.

• In the Electro! nics &! ; Functional Materials segment, we see niches with strong e nd - market growth and high barriers to entry, leading to above - GDP growth rates and sustainably robust returns on invested capital.

• Finally, the Dow Corning JV represents a valuable call option on solar power adoption as total system costs for solar contin ue to compress and become 

increasingly competitive with other fossil - fuel electricity alternatives in much of the world. Dow Specialty Co . should command a premium to Dow's current multiple, and potentially a premium to other specialty chemicals companies given its attractive EBITDA growth prospects. T he market is skeptical of Dow's divisional margin targets given the lack of clarity around how they were derived and the lack of progress toward achieving them. However , even if management fails to attain t heir targets, we still see the potential for Dow Specialty Co . EBITDA to ramp up to the $4 - 5 billion range over the next 3 to 5 years , co mpared to a 2013 base of ~$2.8 billion .

We believe management's main concern about a spin - off of Dow Petchem Co . will likely relate to the integrated nature of Dow's overall portfolio. Importantly, the majority of the integration in Dow's portfolio exists between upstream / downstream petrochemicals and these businesses would remain together in Dow Petchem Co. In additi on , the integration between Dow Petchem Co . and Dow Specialty Co . is limited to commoditized raw material transfers. Having some amount of commoditized raw material integration does not create differentiation in specialty products nor does it materially i ncrease margins (unless the raw material inputs are being subsidized by Dow's petrochemical segments). The s egments within Dow Specialty Co . which primarily consist of legacy Rohm & Haas businesses and Dow's Agricult ural Sciences segment have successfully operated without raw material integration in the past , or have peers that are able to achieve higher margins without any raw material int! egration.!

W e appr eciate this consideration; it is why we have contemplated a scenario in which bot h the upstream and downstream petrochemical businesses are spun - off together into Dow Petchem Co. W e believe the benefits from a spin - off, including financial uplift from operational improvements at Dow Petchem Co . and the potential valuation uplift from increased business focus and disclosure, far outweigh the supposed integration benefits.

Finally, as Dow management looks to further its journey in unlocking value for shareholders, it now ha s the balance sheet flexibility to consider a meaningful share buyback that could more than offset the share issuance from the conversion of the Warren Buffett (Trades, Portfolio)/KIA securities issued in conjunction with the financing of the Rohm & Haas acquisition. 4 Combined with th e Dow Petchem Co . spin - off, Dow c ould pave a path to ward increased disclosure, greater management accountability for individual business segment performances, and enhanced alignment of interests between management and shareholders. With the difficult task of balance sheet de - levering behind it, Dow finally has the opportunity to embark on its next transformational deal during CEO Andrew Liveris' tenure.

Also check out: Daniel Loeb Undervalued Stocks Daniel Loeb Top Growth Companies Daniel Loeb High Yield stocks, and Stocks that Daniel Loeb keeps buying

Currently 0.00/512345 Rating: 0.0/5 (0 votes)

Subscribe via Email Subscribe RSS Comments Please leave your comment:
More GuruFocus Links

Latest Guru Picks	Value Strategies
Warren Buffett Portfolio	Ben Graham Net-Net
Real Time Picks	Buffett-Munger Screener
Aggregated Portfolio	Undervalued Predictable
ETFs, Options	Low P/S Companies
Insider Trends	10-Year Financials
52-Week Lows	Interactive Charts
Model Portfolios	DCF Calculator
RSS Feed	Monthly Newsletters
The All-In-One Screener	Portfolio Tracking Tool

MORE GURUFOCUS LINKS

Latest Guru Picks	Value Strategies
Warren Buffett Portfolio	Ben Graham Net-Net
Real Time Picks	Buffett-Munger Screener
Aggregated Portfolio	Und Monday, January 20, 2014 Ford needs more women in top jobs, COO says Ford still has work to do to align the gender mix of its management team and workforce with its customer base, Chief Operating Officer Mark Fields said following a speech to 1,100 women at a Detroit event today sponsored by Inforum, a Michigan professional women's group. "I think there's more work to do, absolutely," he said. "But I think we are well on our way to getting there. We're stepping up our recruiting efforts." The historic ascension of Mary Barra to General Motors CEO may help the industry recruit women. "It's a very positive sign in terms of, as women look to this industry, that they can have great careers and they can go right up to the top," Fields told journalists. Ford has made progress. Fields said when he joined Ford in 1989, there might have been one woman at the vice president level. Now there are four. Of Ford's 19 executive officers, there is one woman and the top five compensated positions are all held by men, according to an Inforum survey of Michigan companies released last fall. Of 15 directors on its board, two are women. When you look below the vice president level, there are significantly more women at Ford today, Fields said. There also are more women managing plants. Nancy Gioia, Ford director of global electrification, said that women overall are better educated than men today, but hold only 16% of the industry's top jobs in the U.S. and 11% in Michigan. Hot Heal Care Companies To Buy Right Now Teenage girls are more likely to pursue engineering, math and sciences if they see women in top posts, Gioia said. The Inforum study found that among 850 board seats at Michigan's top public companies, women hold just 98 and 28 companies do not have one female executive, director or top-five compensated officer. Women make up 47% of the U.S. labor force and have been pulling down a majority of bachelor's and master's degrees f! or at least 15 years, according to the National Center for Education Statistics. Auto company results were in the middle of the pack. The sector averaged two female executives or board members per company. GM has four female directors on a 14-member board. With Barra as CEO, 25% of GM corporate officers in North America are women. "The change at GM has been amazing," said purchasing chief Grace Lieblein. "The number of women in key positions all over is pretty remarkable." She credits GM for grooming women over the years and former CEO Dan Akerson for casting fresh eyes on corporate talent. Women traditionally make car purchase decisions, and their buying power will only increase as the millennial generation, those born after 1980, ages, Fields said. "The millennials will be the first generation where women buyers outnumber male buyers." Sunday, January 19, 2014 Best China Stocks To Invest In 2014 On a relatively quiet day for the stock market, the Dow Jones Industrials (DJINDICES: ^DJI  ) having swung gently between gains and losses during the first hour of the trading day. As of 10:55 a.m. EDT the index is up 32 points. But beneath that apparently calm activity is a big battle between circumstances in the U.S. and conditions around the world. Overnight, the Japanese stock market plunged another 6%, sending the Nikkei (NIKKEIINDICES: ^NI225  ) into an official bear market with a 20% drop in the past three weeks and reflecting uncertainty about the ability of the Bank of Japan to implement policies to stimulate the long-dormant Japanese economy. Meanwhile, the U.S. continues to see favorable signs of growth, with falling claims for unemployment and strength in retail sales boding well for conditions domestically. What's interesting is how that tug-of-war is playing out among individual companies. Among the gainers in the Dow this morning is Caterpillar (NYSE: CAT  ) , which is up 1.1%. As I predicted earlier this week, Caterpillar followed through on its long streak of annual dividend increases with a 15% hike yesterday. Yet the move likely also reflects optimism about the U.S. economy, as Caterpillar retains a key domestic presence despite the importance of international markets like China. The stock has been stuck in the doldrums for a while now, so signs of life are a positive not just for Caterpillar investors but for the broader industrial sector. Best China Stocks To Invest In 2014: ChinaEdu Corporation(CEDU) ChinaEdu Corporation, together with its subsidiaries, provides educational services to the online degree programs of universities in the People?s Republic of China. It also offers online tutoring services to primary and secondary school students; operates primary and secondary schools; and markets international English language curriculum programs to established learning institutions, as well as international polytechnic programs to vocational schools in China. The company?s online degree programs offer associate and bachelor?s degree programs, including accounting, marketing, finance, business administration, international business, law, civil engineering, education, computer science, literature, project management, marketing, and administrative management. These online degree programs primarily target working adults. Its services also include academic program development, technology services, enrollment marketing, recruiting, student support services, and finance operati ons. The company provides technical, recruiting, and other services for the online degree programs of 27 universities; and technology support services to 7 additional universities that are awaiting regulatory approval to launch their online degree programs. As of December 31, 2010, it served approximately 311,000 online degree programs students, as well as approximately 51,450 students in other businesses. ChinaEdu Corporation was founded in 1999 and is based in Beijing, the People?s Republic of China. Best China Stocks To Invest In 2014: CNOOC Limited(CEO) CNOOC Limited, through its subsidiaries, engages in the exploration, development, production, and sale of crude oil, natural gas, and other petroleum products. The company?s oil and natural gas properties are located in offshore China, which include Bohai Bay, western south China Sea, eastern south China Sea, and east China Sea, as well as in Indonesia, Iraq, and other regions in Asia; and Oceania, Africa, North America, and South America. As of December 31, 2010, the company had net proved reserves of approximately 2.99 billion barrels-of-oil equivalent, including approximately 1.92 billion barrels of crude oil and 6,458.3 billion cubic feet of natural gas. It also provides bond issuance services; and has a joint venture with Bridas Energy Holdings. CNOOC Limited was founded in 1982. The company is headquartered in Central, Hong Kong, and is considered a Red Chip company due to its listing on the Hong Kong Stock Exchange. CNOOC Limited is a subsidiary of China National Of fshore Oil Corporation. Advisors' Opinion: [By Jim Jubak] The auction news isn't good for investors in Brazil's Petrobras (PBR), but it could well be a boon for China and Chinese oil companies such as PetroChina (PTR) and CNOOC (CEO). [By WWW.MARKETWATCH.COM] LOS ANGELES (MarketWatch) -- Hong Kong stocks inched lower early Friday, with mainland Chinese banks and energy shares among the weak spots. The Hang Seng Index (HK:HSI) lost 0.1% to 22,824.44, with the Hang Seng China Enterprises Index down 0.4%, even as the Shanghai Composite (CN:SHCOMP) rose 0.1%. Concerns about the fiscal health of the top mainland lenders loomed again over the shares, with Bank of China Ltd. (HK:3988) (BACHY) down 0.9%, Bank of Communications Co. (HK:3328) (BKFCF) 1.3% lower, and China Construction Bank Corp. (HK:939) (CICHF) off 0.7%. In the energy sector, Cnooc Ltd. (HK:883) (CEO) gave up 0.9% after posting a 17% gain in third-quarter revenue but not reporting its profit for the period. Its peers also lost ground, as China Petroleum & Chemical Corp. (HK:386) (SNP) and PetroChina Co. (HK:857) (PTR) fell 1% apiece. On the upside, China Unicom Hong Kong Ltd. (HK:762) (CHU) added 1.6% after announcing a gain of more than 50% for its quarterly profit compared to a year earlier. Rival China Mobile Ltd. (HK:941 [By Paul Ausick] Endeavor owns assets onshore in the U.S. and in the U.K. region of the North Sea. The company expects to begin production ��mminently��at the Rochelle field which will be operated by Nexen, the former Canadian firm that was acquired by China�� Cnooc Ltd. (NYSE: CEO) earlier this year. Top 5 Cheap Companies To Buy For 2014: DAQQ New Energy Corp.(DQ) Daqo New Energy Corp., together with its subsidiaries, manufactures and sells polysilicon in China. The company sells its polysilicon to photovoltaic product manufacturers for use in the processing of ingots, wafers, cells and modules for solar power solutions. It also produces and sells mono-crystalline and multi-crystalline modules to photovoltaic system integrators and distributors in China and internationally under its Daqo brand. The company was formerly known as Mega Stand International Limited and changed its name to Daqo New Energy Corp. in August 2009. Daqo New Energy Corp. was founded in 2006 and is headquartered Wanzhou, the People?s Republic of China. Best China Stocks To Invest In 2014: China Gerui Advanced Materials Group Limited(CHOP) China Gerui Advanced Materials Group Limited engages in the manufacture and sale of cold-rolled narrow strip steel products in the People's Republic of China. The company converts steel manufactured by third parties into thin steel sheets and strips. It sells its products directly to its customers in a range of industries, including food and industrial packaging, construction and household decorations materials, electrical appliances, and telecommunications wires and cables industries. The company was formerly known as Golden Green Enterprises Limited and changed its name to China Gerui Advanced Materials Group Limited in December 2009. China Gerui Advanced Materials Group Limited is based in Zhengzhou, China. Best China Stocks To Invest In 2014: China Security & Surveillance Technology Inc. (CSR) China Security & Surveillance Technology, Inc., together with its subsidiaries, manufactures, installs, distributes, and services surveillance and safety products, systems, and software in the People?s Republic of China. The company?s products include standalone digital video recorders (DVRs); embedded DVRs; mobile DVRs; real-time hard-compression coding cards; DVR compression boards; digital cameras; intelligent high-speed dome cameras; intelligent control system software platforms; perimeter security alarm systems; monitors; and radio frequency identification terminals and data collectors. It serves various customers, which include governmental entities, such as customs agencies, courts, public security bureaus, and prisons; non-profit organizations, including schools, museums, sports arenas, and libraries; and commercial entities consisting of airports, hotels, real estate, banks, mines, railways, supermarkets, and entertainment venues. The company is headquartered in S henzhen, the People?s Republic of China. Best China Stocks To Invest In 2014: iSoftStone Holdings Limited(ISS) iSoftStone Holdings Limited provides various information technology (IT) services and solutions in the Greater China and internationally. It offers an integrated suite of IT services and solutions, including consulting and solution services, IT services, and business process outsourcing (BPO) services. The company provides a range of consulting services for an overall engagement or discrete consulting services in conjunction with other services. It also develops industry-specific solutions, including treasury management, cash management, property and casualty insurance core, financial holding company business analysis, trust company core, and banking risk management solutions for banking, financial services, and insurance industries; supply chain management, enterprise information portals, business intelligence, business process integration, and management and e-commerce solutions for energy, transportation, and public sectors; mobile and embedded technology, next generati on platforms, business intelligence functionality, and network security products for the communications industry. In addition, the company offers various IT services consisting of application development and maintenance, research and development, and infrastructure and software services. Further, it provides a range of BPO services, such as securities trade processing services for the investment banking industry; digitization and archiving of policyholder information, as well as account processing and customer service for insurance industry; and cross-industry BPO services comprising finance and accounting, customer care, and human resources. The company was founded in 2001 and is headquartered in Beijing, the People?s Republic of China. Advisors' Opinion: [By Seth Jayson] iSoftStone Holdings (NYSE: ISS  ) reported earnings on May 17. Here are the numbers you need to know. The 10-second takeaway For the quarter ended March 31 (Q1), iSoftStone Holdings beat expectations on revenues and beat expectations on earnings per share. Best China Stocks To Invest In 2014: China Telecom Corp Ltd (CHA) China Telecom Corporation Limited, together with its subsidiaries, provides wireline and mobile telecommunications services in the People's Republic of China. The company?s services include wireline voice, mobile voice, Internet, managed data and leased line, value-added services, integrated information application services, and other related services, as well as prepaid calling cards. Its wireline voice services include local wireline services, domestic long distance wireline services, and international long distance wireline services. The company's mobile voice services comprise local calls, domestic long distance calls, international long distance calls, intra-provincial roaming, inter-provincial roaming, and international roaming. Its Internet access services consist of wireline Internet access services, including dial-up and broadband services, and wireless Internet access services. The company's integrated information application services include Best Tone services, which provide customers with phone number storage, enquiry, and call transfer services; and information technology-based integrated solutions, such as system integration, outsourcing, special advisory, information application, knowledge services, and software development. Its managed data and leased line services consist of services relating to optic fiber and circuits, such as optic fiber and circuit leasing, virtual private network, and bandwidth leasing. The company also offers other services, such as sales, rental, repairs, and maintenance of equipment; and provides consulting services, and e-commerce and booking services, as well as in the sale of telecommunications terminals. It serves government, enterprise, and residential customers. The company was founded in 2002 and is based in Beijing, the People's Republic of China. China Telecom Corporation Limited is a subsidiary of China Telecommunications Corporation. Advisors' Opinion: [By David Goldman] Until now, Apple had sold the iPhone there through China Mobile's much-smaller competitors, China Unicom (CHU)and China Telecom (CHA), which have about 425 million subscribers between them. [By WWW.MARKETWATCH.COM] LOS ANGELES (MarketWatch) -- Hong Kong stocks inched lower early Friday, with mainland Chinese banks and energy shares among the weak spots. The Hang Seng Index (HK:HSI) lost 0.1% to 22,824.44, with the Hang Seng China Enterprises Index down 0.4%, even as the Shanghai Composite (CN:SHCOMP) rose 0.1%. Concerns about the fiscal health of the top mainland lenders loomed again over the shares, with Bank of China Ltd. (HK:3988) (BACHY) down 0.9%, Bank of Communications Co. (HK:3328) (BKFCF) 1.3% lower, and China Construction Bank Corp. (HK:939) (CICHF) off 0.7%. In the energy sector, Cnooc Ltd. (HK:883) (CEO) gave up 0.9% after posting a 17% gain in third-quarter revenue but not reporting its profit for the period. Its peers also lost ground, as China Petroleum & Chemical Corp. (HK:386) (SNP) and PetroChina Co. (HK:857) (PTR) fell 1% apiece. On the upside, China Unicom Hong Kong Ltd. (HK:762) (CHU) added 1.6% after announcing a gain of more than 50% for its quarterly profit compared to a year earlier. Rival China Mobile Ltd. (HK:941 [By WWW.MARKETWATCH.COM] LOS ANGELES (MarketWatch) -- Stocks in Hong Kong logged gains Tuesday, with the equity benchmark aided by a bump higher in financial shares. The Hang Seng Index (HK:HSI) rose 0.3% to 22,887.80, as China Merchants Bank Co. (HK:3968) (CIHHF) (CN:600036) climbed 2.1% ahead of the company's financial results due later Tuesday. Stock in China Construction Bank Corp. (HK:939) (CICHF) (CN:601939) rose 1.4%, extending Monday's advance of 1.1% despite China's second-largest bank by assets reporting slower-than-expected quarterly profit growth. Meanwhile, shares of China Telecom Corp. (HK:728) (CHA) slipped 0.3% despite the company's report that its third-quarter profit jumped 20% on stronger data sales driven by iPhone users. The Hang Seng China Enterprises Index popped higher by 1.4% and on the mainland, the Shanghai Composite Index (CN:SHCOMP) rose 0.6%. Best China Stocks To Invest In 2014: Raptor Pharmaceutical Corp.(RPTP) Raptor Pharmaceuticals Corp. operates as a biotechnology company in the United States. The company is dedicated to speeding the delivery of new treatment options to patients by working to improve existing therapeutics through the application of highly specialized drug targeting platforms and formulation expertise. Its clinical stage development products include DR Cysteamine, which is in phase IIb for the treatment of cystinosis; phase IIa for the non-alcoholic steatohepatitis; and phase II for the treatment of Huntington?s disease. Raptor?s clinical-stage products also include Convivia that is in Phase IIa stage for the potential management of acetaldehyde toxicity due to alcohol consumption; and Tezampanel and NGX 426, which completed phase I stage for the treatment of migraine and pain. Its preclinical product candidates comprise HepTide for the treatment of Hepatocellular Carcinoma and Hepatitis; WntTide for the treatment of breast cancer; NeuroTrans for the treatmen t of neurodegenerative diseases; and Tezampanel and NGX 426 for the treatment of Thrombosis and Spasticity Disorder. Raptor Pharmaceuticals Corp. is headquartered in Novato, California. Advisors' Opinion: [By Sean Williams] This week saw two new drugs approved by the FDA: Raptor Pharmaceuticals' (NASDAQ: RPTP  ) Procysbi and Merck's (NYSE: MRK  ) Liptruzet. Saturday, January 18, 2014 Why Corporate America Loves Zombie Friday If you’re hung over, a bit groggy and have a sudden taste for the flesh of the living, you’re not alone. It’s just another “Zombie Friday.” The term denotes the workday after a Thursday holiday, when companies like to dump depressing news on the populace, hoping you’re still sleeping it off from prior festivities and won’t notice. Marek Fuchs runs through a number of examples of this plodding and brain-dead behavior on The Exchange.   “There has been a long, sordid history of bad news released on Zombie days — from presidents pardoning controversial criminals to companies admitting to stock backdating or firing thousands of employees,” Fuchs notes. The United States Mint goes down in market lore as one of the most egregious examples. “Only the heartless would have fired workers at the time surrounding Sept. 11, but that’s just what happened when the Mint determined the slowing economy was lowering demand for coins," he relates. "They didn’t want to be seen as cold, however, so they took advantage of a Zombie Day." The Mint timed the firings so that, on the day after Thanksgiving when “everyone was zonked out on tryptophan,” The New York Times ran with the headline: Facing Decreased Demand for Coins, Mint Starts Layoffs.” Firing hundreds when headed into the first Christmas after a national tragedy sounds outrageous, and would have been had more people known. In 2006, Corinthian Colleges, a provider of health care training, admitted on the Friday after Thanksgiving that it did, in fact, backdate its options after all. It was news they had to release but few saw, thanks to Zombie Day. Ironically, a portion of those options were originally backdated in the days after the September 11 terrorist attacks. “Talk about a company with a tendency toward operating under cover of night,” Fuchs concludes. --- Check out When RIA Zombies Attack, Money Manager Has Survival Guide on AdvisorOne. Friday, January 17, 2014 5 Best Biotech Stocks To Own Right Now Since the 1980s, biotechnology stocks have seen four bull markets with triple-digit gains; Nicholas Vardy explains why a fifth biotech bull market may be underway. Steven Halpern: We are here today with Nicholas Vardy, editor of The Global Guru, the Bull Market Alert trading service and the longer term focused Alpha Investor Letter. Thank you for joining us from London today. Nicholas Vardy: Thanks for having me. Steven Halpern: You recently released an in-depth report on the biotech sector and you noted that since the 1980s, there have been four bull markets, each of which had triple digit gains. Is the good news in the past, or can investors expect a fifth biotech bull? Nicholas Vardy: Well, based on the way the biotechnology sector has behaved, both last year, and this year, I think we may be very much at the start of the fifth major biotech Bull Run. If you look at the way the Nasdaq biotechnology index has performed so far this year, as of August 1, it's basically up by 43% for the year, versus about 18% for the S&P 500. 5 Best Biotech Stocks To Own Right Now: ArQule Inc.(ARQL) ArQule, Inc., a clinical-stage biotechnology company, engages in the research and development of cancer therapeutics directed toward molecular targets and biological processes. Its lead product ARQ 197 is non-adenosine triphosphate competitive inhibitor of the c-Met receptor tyrosine kinase, which is being evaluated as monotherapy and in combination therapy in a Phase II clinical development program that includes trials in non-small cell lung cancer, c-Met-associated soft tissue sarcomas, pancreatic adenocarcinoma, hepatocellular carcinoma, germ cell tumors, and colorectal cancer. The company is also developing ARQ 621, a Phase I program focused on inhibition of the Eg5 kinesin spindle protein. Its clinical stage products include ARQ 501, ARQ 761, and ARQ 171, which are designed to kill cancer cells selectively while sparing normal cells through the direct activation of DNA damage response/checkpoint pathways. In addition, the company involves in pre-clinical development o f B-RAF and AKIP Kinase inhibitors. The company has collaborations with Kyowa Hakko Kirin Co., Ltd. and Daiichi Sankyo Co., Ltd. ArQule, Inc. was founded in 1993 and is headquartered in Woburn, Massachusetts. 5 Best Biotech Stocks To Own Right Now: Cubist Pharmaceuticals Inc.(CBST) Cubist Pharmaceuticals, Inc., a biopharmaceutical company, focuses on the research, development, and commercialization of pharmaceutical products that address unmet medical needs in the acute care environment. The company markets CUBICIN (daptomycin for injection), a once-daily, bactericidal, intravenous, antibiotic with activity against gram-positive organisms, including methicillin-resistant staphylococcus aureus. Its clinical development product pipeline consists of CXA-201, which is in the phase III clinical trial for patients with complicated urinary tract infections; and in phase II clinical trial for patients with complicated abdominal infections. The company is also developing CXA-201 for the treatment of hospital acquired pneumonia. In addition, its product under development comprises CB-183,315, an oral, bactericidal lipopeptide with in vitro bactericidal activity against C. difficile, for the treatment of clostridium difficile-associated diarrhea (CDAD). Further , the company?s pre-clinical programs include therapies to treat various bacterial infections and agents to treat acute pain. Additionally, it promotes MERREM I.V. (meropenem for injection), a carbapenem class intravenous antibiotic, in the United States under a commercial services agreement with AstraZeneca Pharmaceuticals, LP; and DIFICID as the treatment for CDAD in adults under the co-promotion agreement with Optimer Pharmaceuticals, Inc. The company also has collaborations with Forma Therapeutics, Inc. to discover and develop antibacterial compounds; an agreement with the Broad Institute to transform natural products discovery; a collaboration with Hydra Biosciences, Inc., to develop ion channel drugs; and a collaboration agreement with Alnylam Pharmaceuticals, Inc., for the development and commercialization of Alnylam's RNAi therapeutics as a therapy for the treatment of respiratory syncytial virus. The company was founded in 1992 and is headquartered in Lexington, Mas sachusetts. Advisors' Opinion: [By Alyssa Oursler] Another company with a megatrend in its corner is Cubist Pharmaceuticals (CBST) — the midcap stock that will replace Smithfield Foods in the S&P 400. [By Jake Keator] Shares of Cubist Pharmaceuticals (NASDAQ: CBST  ) exploded upward on Friday, finishing up over 9%. The company reported strong second-quarter results Thursday, beating average analyst estimates for both revenue and EPS. Total net revenues were $258.8 million, up 12.2% over Q2 2012, while non-GAAP diluted EPS was $0.42. Average analyst estimates were $254.73 million for revenue and EPS of $0.38. [By Lee Jackson] Cubist Pharmaceuticals Inc. (NASDAQ: CBST) is another top stock to buy making acquisitions. It recently received antitrust clearance for its�purchase of Trius Pharmaceutical. The acquisition strengthens its already strong antibiotic franchise. UBS has a $70 price target, and the consensus is placed at $65. [By Rich Bieglmeier] Cubist Pharmaceuticals Inc. (CBST) share price is the beneficiary of an upgrade yesterday. Leerink Swann analyst Marko Kozul believes the biotech is headed to $76. Top 10 Biotech Companies For 2014: Algeta ASA (ALGETA.OL) Algeta ASA is a Norway-based biotechnology company engaged in the development of targeted cancer therapies based on its alpha-pharmaceutical platform. The Company�� principal product is Alpharadin for the treatment of bone metastases resulting from castration-resistant prostate cancer. The Company�� pipeline also includes Alpharadin for the treatment of bone metastases resulting from breast cancer, a combination of Alpharadin with Taxotere for the treatment of bone metastases resulting from prostate cancer and Thorium-227 showing various cancer indications. The Company develops Alpharadin in a development and marketing cooperation with Bayer Schering Pharma. Algeta ASA is active through the two wholly owned subsidiaries, Algeta Innovations AS and Algeta UK Limited. On April 12, 2012, the Company announced that it estabilished a subsidiary active in the United States, Algeta US. 5 Best Biotech Stocks To Own Right Now: Applied Nanotech Holdings Inc (APNT) Applied Nanotech Holdings, Inc., incorporated on May 22, 1989, is engaged in nanotechnology research and development business. The Company's nanotechnology research involves performing contract research and development services for others to develop products and materials for new applications, and then leveraging this research by applying it to other similar applications in other industries. The Company also develops intellectual property (IP) around its products and technologies. The Company develops five technology platforms: nanosensor technology; nanocomposites, based on carbon nanotube composites; thermal management materials; nanoelectronics applications, and electron emission activities, primarily in the display area. The Company's electron emission IP is divided into display activities and non-display activities. Applied Nanotech Holdings, Inc. is the parent company. Applied Nanotech, Inc. (ANI) is a subsidiary of ANHI. During the year ended December 31, 2012, the Company formed EZDiagnostix, Inc., (EZDX). Sensors The Company develops sensors based on ion mobility sensor technology and differential mobility spectroscopy. The Company is involved in projects to develop Mercaptan and Methane sensors for uses in the natural gas industry. The Company is also applying this technology to other applications, including agricultural pathology, wound care, and breath analysis. The Company develops hydrogen sensor for use in the measurement of hydrogen in power transformer products. The Company develops carbon monoxide sensor that can last for 10,000 hours on a single battery. The Company's carbon nanotube technology is for use in biosensors. Sensors based on carbon nanotubes or other nanomaterials can be used to detect chemical, organic, or biological warfare agents, as well as explosives, hydrogen, ammonia and numerous other chemicals. Nanocomposites The Company is in the advanced stages of development of nanomaterials using carbon nanotube (CNT) and! other composites. Epoxies are used in industries with worldwide markets, with applications, including adhesives, paints, coatings, and composites. In addition to epoxy resins, the Company develops other types of resins, including polyesters and vinyl esters. Vinyl esters are used in a variety of industrial applications, including storage tanks, piping, and construction. The Company develops a process for coating nylon pellets with CNTs to improves electrical conductivity. Nylon 6 with improved electrical conductivity can be used for its anti-static qualities, electrostatic discharge, and electromagnetic/RF shielding. Thermal Management The Company markets thermal management material called CarbAl. CarbAl provides a passive thermal management solution for temperature control issues that plague electronics manufacturers. CarbAl is a carbon based metal nanocomposite comprised of 80% carbonaceous matrix and a dispersed metal component of 20% aluminum. The Company also develops a simplified version of CarbAl based on graphite. Conductive Inks The Company develops aluminum and silver inks and pastes that is ideal for use in the production of solar cells. The Company also develops aluminum paste that can be used in current solar cell production. The Company competes with Zyvex Performance Materials, GSI Creos, Amroy Europe, Ltd., DuPont and Ferro Advisors' Opinion: [By Anuchit Nguyen] India�� S&P BSE Sensex rose, holding at a three-year high, amid better-than-estimated corporate earnings. Engineering company Larsen & Toubro Ltd. (LT) rallied to a three-month high and Asian Paints Ltd. (APNT) surged about 6 percent after reporting profit that beat forecasts. 5 Best Biotech Stocks To Own Right Now: Celgene Corp (CELG.O) Celgene Corporation is a global biopharmaceutical company primarily engaged in the discovery, development and commercialization of therapies designed to treat cancer and immune-inflammatory related diseases. The Company is engaged in the research and development, which is designed to bring new therapies to market, and is engaged in research in several scientific areas that may deliver therapies, focusing areas, such as intracellular signaling pathways in cancer and immune cells, immunomodulation in cancer and autoimmune diseases, and therapeutic application of cell therapies. The Company�� primary commercial stage products include REVLIMID, VIDAZA, THALOMID, ABRAXANE and ISTODAX. Additional sources of revenue include a licensing agreement with Novartis, which entitles it to royalties on FOCALIN XR and the entire RITALIN family of drugs, the sale of services through its Cellular Therapeutics subsidiary and other miscellaneous licensing agreements. In March 2012, it acq uired Avila Therapeutics. The Company invests in research and development, and the drug candidates in its pipeline at various stages of preclinical and clinical development. These candidates include pomalidomide and apremilast, its oral anti-cancer and anti-inflammatory agents, PDA-001, its cellular therapy, oral azacitidine, CC-223 and CC-115 for hematological and solid tumor malignancies, CC-122, its anti-cancer pleiotropic pathway modifier, and ACE-011 and ACE-536 biological products for anemia in several clinical settings of unmet need. Celgene product candidates include Pomalidomide (CC-4047), Oral Anti-Inflammatory: Apremilast (CC-10004), CC-11050, Kinase Inhibitors:Tanzisertib (CC-930), Cellular Therapies: PDA-001, Activin Biology: Sotatercept (ACE-011) ACE-536, and Anti-tumor Agents: CC-22, CC-115, CC-122 and Oral Azacitidine. It owns and operates a manufacturing facility in Zofingen, Switzerland. The Company also owns and operates a drug product manufac turing facility in Boudry, Switzerland. Comme! rc! ial Stage Products REVLIMID (lenalidomide) is an oral immunomodulatory drug marketed in the United States and many international markets, in combination with dexamethasone, for treatment of patients with multiple myeloma who have received at least one prior therapy. It is also marketed in the United States and certain international markets for the treatment of transfusion-dependent anemia due to low- or intermediate-1-risk myelodysplastic syndromes (MDS) associated with a deletion 5q cytogenetic abnormality with or without additional cytogenetic abnormalities. REVLIMID is distributed in the United States through contracted pharmacies under the RevAssist program, which is a risk-management distribution program. Internationally, REVLIMID is distributed under mandatory risk-management distribution programs. REVLIMID continues to be evaluated in numerous clinical trials worldwide either alone or in combination with one or more other therapies in the tre atment of a range of hematological malignancies, including multiple myeloma (MDS) various lymphomas, chronic lymphocytic leukemia (CLL) other cancers and other diseases. VIDAZA (azacitidine for injection) is a pyrimidine nucleoside. VIDAZA is a Category 1 recommended treatment for patients with intermediate-2 and high-risk MDS and is marketed in the United States for the treatment of all subtypes of MDS. In Europe, VIDAZA is marketed for the treatment of intermediate-2 and high-risk MDS, as well as acute myeloid leukemia (AML) with 30% blasts and has been granted orphan drug designation for the treatment of MDS and AML. THALOMID (thalidomide) is marketed for patients with newly diagnosed multiple myeloma and for the acute treatment of the cutaneous manifestations of moderate to severe erythema nodosum leprosum (ENL) an inflammatory complication of leprosy and as maintenance therapy for prevention and suppression of the cutaneous manifestation of ENL recurrence. THALOMID is distributed in the United States under its ! Syste! m ! for Tha! lidomide Education and Prescribing Safety (S.T.E.P.S.) program. Internationally, THALOMID is also distributed under mandatory risk-management distribution programs. ABRAXANE (paclitaxel albumin-bound particles for injectable suspension) is a solvent-free chemotherapy treatment option for metastatic breast cancer, which was developed using its nab technology platform. This protein-bound chemotherapy agent combines paclitaxel with albumin. As of December 31, 2011, ABRAXANE was in various stages of investigation for the treatment of expanded applications for metastatic breast; non-small cell lung; malignant melanoma; pancreatic; bladder and ovarian. ISTODAX (romidepsin) has received orphan drug designation for the treatment of non-Hodgkin's T-cell lymphomas, which includes CTCL and PTCL. The Company has licensed the worldwide rights (excluding Canada) regarding certain chirally pure forms of methylphenidate for FOCALIN and FOCALIN XR to Novartis. It also licensed t o Novartis the rights related to long-acting formulations of methylphenidate and dex-methylphenidate products which are used in FOCALIN XR and RITALIN LA. Preclinical and Clinical-Stage Pipeline The product candidates in the Company�� pipeline are at various stages of preclinical and clinical development. Pomalidomide is a small molecule that is orally available and modulates the immune system and other biologically important targets. Pomalidomide is being evaluated in a phase III clinical trial for the treatment of myelofibrosis and a phase III clinical trial evaluating pomalidomide as a treatment for patients with relapsed/refractory multiple myeloma is accruing patients. The Company is developing a product, ORAL ANTI-INFLAMMATORY AGENTS, which is orally available small molecules that target PDE4, an intracellular enzyme that modulates the production of multiple pro-inflammatory and anti-inflammatory mediators, including interleukin -2 (IL-2), IL-10, IL-12, IL-23, INF-gamma, TNF-a,! leukotri! en! es, and n! itric oxide synthase. Its investigational drug, apremilast (CC-10004), is used for the treatment of moderate to severe psoriasis and active psoriatic arthritis and is being evaluated in a phase II trial for rheumatoid arthritis and six phase III multi-center international clinical trials. In addition, it is investigating its oral PDE4 inhibitor, CC-11050, which is an anti-inflammatory compound that treat a variety of chronic inflammatory conditions, such as Cutaneous Lupus Erythematosus (CLE). The Company�� oral kinase inhibitor platform includes inhibitors of the c-Jun N-terminal kinase (JNK) mTOR kinase, spleen tyrosine kinase (Syk) c-fms tyrosine kinase (c-FMS) and DNA-dependent protein kinase (DNAPK). Its oral Syk, c-FMS and DNAPK kinase inhibitors are being investigated in pre-clinical studies. The Company�� new second generation JNK inhibitor, tanzisertib (CC-930), is being evaluated in a phase II trial for the treatment of idiopathic pulmonary fibrosi s and a phase II trial for the treatment of discoid lupus is accruing patients. Amrubicin is a third-generation fully synthetic anthracycline molecule with potent topoisomerase II inhibition. At Celgene Cellular Therapeutics (CCT), it is researching stem cells derived from the human placenta, as well as from the umbilical cord. CCT is the Company�� research and development division. Stem cell based therapies provide disease-modifying outcomes for serious diseases, which lack adequate therapy. It has developed technology for collecting, processing and storing placental stem cells with broad therapeutic applications in cancer, auto-immune diseases, including Crohn's disease, multiple sclerosis, neurological disorders, including stroke and amyotrophic lateral sclerosis (ALS), graft-versus-host disease, and other immunological / anti-inflammatory, rheumatologic and bone disorders. The Company has collaborated with Acceleron Pharma, Inc. (Acceleron) to develop sotatercept. Two phase I clinical s! tudies ha! ve been! complete! d. An additional phase II clinical study has been initiated and is ongoing related to treatments for end-stage renal anemia and to evaluate effects on red blood cell mass and plasma volume. The Company competes with Abbott Laboratories, Amgen Inc. (Amgen), AstraZeneca PLC., Biogen Idec Inc., Bristol-Myers Squibb Co., Eisai Co., Ltd., F. Hoffmann-LaRoche Ltd., Johnson and Johnson, Merck and Co., Inc., Novartis AG, Pfizer, Sanofi and Takeda Pharmaceutical Co. Ltd. (Takeda). Wednesday, January 15, 2014 Wednesday Analyst Moves: Dicks Sporting Goods Inc, Intel Corporation, PetSmart, Inc., More (DKS, INTC, PETM, More) Before Wednesday’s opening bell, a number of big name dividend stocks were the subject of analyst moves. Below, we highlight the important analyst commentary for investors. Oppenheimer Downgrades Apollo Global Management Apollo Global Management LLC (APO) was downgraded to “Perform” from “Outperform” at Oppenheimer based on a valuation call. APO has a dividend yield of 0.77%. 10 Best Biotech Stocks To Buy For 2014 Credit Suisse Upgrades Dick’s Sporting Goods Dick’s Sporting Goods (DKS) was upgraded to “Outperform” from “Neutral” at Credit Suisse and given a price target of $65. Credit Suisse believes that Dick’s private label program has shown strength and that the company has good management. The price target suggests an 18% upside to Dick’s current price. DKS has a yiel Sunday, January 12, 2014 Should I Buy DTV? 3 Pros, 3 Cons Popular Posts: If John Malone Doesn’t Buy Time Warner Cable, Someone Else WillHLF – There Is Plenty to Like About ‘Boring’ Herbalife StockMSO Is Crap, New CEO Unlikely to Help Recent Posts: Should I Buy DTV? 3 Pros, 3 Cons If John Malone Doesn’t Buy Time Warner Cable, Someone Else Will HLF – There Is Plenty to Like About ‘Boring’ Herbalife Stock View All Posts DirecTV (DTV) has made some of the funniest commercials in recent memory, and after the company's most recent earnings report, it's laughing all the way to the bank. The largest satellite television provider reported an awesome quarter. Net income at DTV surged 24% to $699 million, or $1.28 per shares, easily beating the $1 per share consensus. Revenue spiked more than 6% to $7.88 billion, surpassing analysts’ $7.88 billion estimates. DirecTV added 139,000 new subscribers in the quarter — the most since 2011, thanks to refugees from Time Warner Cable (TWC) and CBS (CBS) fee dispute. Time Warner, the second-largest cable company, was the clear loser in the two-week blackout. It lost 304,000 video customers in the quarter, almost double what analysts expected. DTV has jumped almost 30% this year, on par with peers like Dish Network (DISH) and Comcast (CMCSA). One reason for DTV’s outperformance has been its strong international business and its satisfied customers. During the most recent quarter, DirecTV’s churn rate fell to 1.61% — its lowest quarterly churn in more than 6 years. So, is now the time for investors to tune into DTV’s stock? Let’s examine the pros and cons. DTV Pros Happy customers: For years, DTV and its rival DISH have scored higher than their cable rivals on customer satisfaction surveys. Happy customers tend to be loyal customers, meaning that it will take more than a promotional rate to get them to leave DTV. It also means that they may be less tempted to “cut the cord” or quit pay television entirely. Valuation: Shares of DTV trade at forward earnings multiple of 12.9, well under Dish’s 30.4 valuation and Comcast’s 19.1 valuation. The stock trades about 6% under its average 52-week price target of $68.04, while Dish trades about 3% under its average target of $49.73. Comcast, though, still has a 25% upside for its $53.74 target. But comparing CMCSA with DTV and DISH has its limits since the Philadelphia-based cable company also owns the entertainment giant NBC Universal. Dish Merger: Earlier this year, Billionaire John Malone, the largest shareholder of DTV, has urged his counterpart at DISH Charlie Ergen to merge the two satellite providers “for the good of the industry.” Ergen, who is no slouch in the dealmaking department either, reportedly has his eye on a deal with Time Warner Cable. The potential of a DTV-DISH alliance should give the shares a boost, at least until the next shoe drops in the constantly changing world of Pay TV. DTV Cons Costs: Costs for original content seem to be soaring by the millisecond. Of particular concern to DTV shareholder is the company’s NFL Sunday Ticket program. The satellite provider’s $1 billion contract with the NFL expires in two years, and retaining that business won’t be cheap. Officials in the NFL are certainly keeping their options opened and have recently met with Google. As I argued before, NFL Sunday Ticket is such huge deal for DTV that it could force a “shotgun wedding” with DISH so it can gain the scale to counter the threat posed by the search engine giant. Top 10 Safest Companies To Own In Right Now Latin America: The company has been growing like gangbusters in Latin America in recent years, but it might nearing a cap. As of September 30, DTV had 11.3 million customers in the region, an increase of 260,000 from a year earlier. That number might seem like a big bump, but it's down from 543,000 a year earlier. This may not be a temporary hiccup, either: The International Monetary Fund recently lowered its forecast for the region’s economic growth to 2.7% for 2013. Television Watching: In 2011, many people were shocked to learn that number of TV householders — defined by Nielsen as homes having at least one television set — fell for the first time in 20 years. The number rebounded slightly this year to 115.6 million, though it still lags 2010′s 115.9 figure. What this shows is the consumers increasingly want to consume media on their terms, which is going to create huge challenges for the pay TV industry going forward. DTV Bottom Line DirecTV has many challenges ahead. Not only is growth in Latin America slowing, but content costs and carriage fees continue to skyrocket. The fights between content providers and distributors are only going to get nastier over time. And then there's the uncertainty over DTV's lucrative NFL programing. So should you buy DTV? No. For now, the stock's risks outweigh the rewards . As of this writing, Jonathan Berr didn’t hold a position in any of the aforementioned securities. Saturday, January 11, 2014 Client outreach underway as government closes By Liz Skinner The shutdown outreach has begun. Many financial planners are reaching out to clients with this advice: Don't worry about the impact that the government shutdown will have on investment portfolios, as long as the president and Congress resolve it in a few days. “A government shutdown sounds like a scary thing, but we're telling clients that if it's resolved in a week, then it's a non-issue,” said Gerard Klingman, president of Klingman & Associates LLC, who has been e-mailing clients over the past few days as it became clear that a last-minute solution to keep the federal government open in the new fiscal year wasn't coming. He's pointing out to clients that while a shutdown has occurred in the past, “if it drags on for more than a week, then markets will really react negatively.” The Dow Jones Industrial Average was up about 0.4% on Tuesday afternoon. Mr. Klingman said clients across the political spectrum are “exasperated with Washington” and that the longer the shutdown goes on, the worse it will be for consumer and business confidence. Before the current closure, the government shut down in 1995 from Nov. 14 to Nov. 19 and from Dec. 16 to Jan. 6, 1996, as Republicans led by then-House Speaker Newt Gingrich clashed with President Bill Clinton's administration. “Most people anticipate that it will not last real long, that someone will come to their senses and do whatever back-office deal that needs to be done,” said Norman Berk, founder of Berk Cleveland Rathmell Wealth Strategies LLC. “But if the fight over Obamacare becomes part of the debt ceiling debate and they don't raise the debt ceiling, there is a potential to be cataclysmic.” The deadline for raising the debt ceiling is Oct. 17. Experts agree that defaulting on the country's debt would be more damaging to the economy than a short government shutdown. But even a government shutdown of a few days has some impact on investor confidence and potentially the economy, Mr. Berk said. “If you were about to buy a house or a car, would you? I wouldn't,” he said. In a mass e-mail to clients and other firm contacts late Monday night, Mr. Berk said: “The direct immediate impact to most of us will be limited. I! f the shutdown continues for a longer period — the shutdown in 1995-96 lasted 21 days — the impact will get progressively worse as the toll of not having government workers working will permeate through the economy.” The e-mail also tried to explain the use of continuing resolutions and laid out which government spending is immediately curtailed. Most advisers agree that this event is important enough to demand communication with clients. “Anything like this and you have to be in communication with clients, even if you don't know the end result,” Mr. Klingman said. Friday, January 10, 2014 Volatility and Options in MannKind Shaking Speculators Out MannKind Corp. (NASDAQ: MNKD) is a stock that has been on a wild ride for many years. The company’s inhalable insulin has been held up from being approved for years as well. That seems to be coming to a head now, but investors have to understand just how big this game is. It can be a homerun, but it can also be a crusher if the FDA goes against it. After a huge gain on Thursday, shares tanked on Friday. MannKind announced that AFREZZA’s review date is tentatively scheduled for April 1, 2014. If you have followed this story for as long as we have, you might find the same irony that the date is set for April Fool’s Day. The company’s press release said that the target date for FDA’s AFREZZA review is actually April 15, 2014. We would point out that the date and details are subject to FDA conformation via a Federal register notice. MannKind had resubmitted its new drug application back on October 13, 2013 to assist in helping adults with Type-1 or Type-2 diabetes. Be advised that MannKind will be making a presentation to investors at the JPMorgan 2014 Healthcare Conference on Wednesday, January 15, 2014. The company has maintained for years that AFREZZA is approvable. MannKind has also had close to $900 million in operating losses from expenses and R&D in the last five years or so, with total losses being far higher than that since its inception. Best Stocks To Buy Options trading was elevated on Thursday, and the same thing is true for Friday. This implied volatility is enough to make or break careers. Based upon the new data, options traders are now moving their bets out to May 2014 because there are not yet active April contracts. A volatility bet at the $6 strike prices for both the put and call combined would be the equivalent of close to $4.25 per share. For that to pay off, investors would have to see the stock fall to under $1.75 or rise above $10.25 by May 17. We won’t bother telling you expensive the options are if you go out later in 2014 or into 2015 (or 2016). Shares were down 13% at $6.16 on almost 18 million shares with about 90 minutes of trading left on Friday. Thursday’s gain was over 18% to a close of $7.08 on over 24 million shares. Thursday, January 9, 2014 Limited Upside Potential for Alpha Natural Resources, Walter Energy, Cowen Says The last six months have been good to coal miners like Alpha Natural Resources (ANR), Walter Energy (WLT), Consol Energy (CNX) and Peabody Energy (BTU), which all gained more than 10%. The last month, not so much, as many have experienced double-digit losses. Andrew Hancock for the Wall Street Journal Against that backdrop, Cowen’s Daniel Scott and Bryan Bergin have decided to cut their ratings on met coal producers Alpha Natural Resources, Walter Energy and Teck Resources (TCK) to Market Perform from Outperform. Scott and Bergin explain why: While improving sentiment and an apparent macro risk-on trade helped to boost shares in December, we question what a reasonable multiple in the trough is, and see limited upside potential from current levels. We expect that investors may migrate to [Peabody Energy] based on favorable exposure to international met operations and an improving PRB market, but see it near fair value given our new estimates. Sterne Agee’s Michael Dudas and Satyadeep Jain are more optimistic, despite sharing the view that met coal prices will fall: Generally, we believe coal companies have accomplished three important goals during 2013 – reduced operating costs, lowered capital expenditures and recapitalized balance sheets to lengthen maturities and enhance access to liquidity. Estimated cash burn will range from 0- 12% of total company liquidity during 2014, with prospects for improvement into 2015-16 once pricing and volumes normalize. Now, we believe the equities are positioned to await some more positive news from the markets served… Regarding met coal, we have lowered our expectations, given the current surplus in the market that would likely take some time to get worked down. We now expect 2014 met coal prices at $155/t (vs previous expectation of $195/t)… Top 10 Heal Care Stocks To Own Right Now Among thermal-oriented names, we suggest [Consol Energy] and [Arch Coal (ACI)], while Peabody and Alpha should benefit from global economic recovery trends. We expect the group to benefit from potential natural gas pricing improvements and investors positioning for cyclical exposure during 2014. Shares of Alpha Natural Resources has fallen 3.8% to $6.27 at 12:57 p.m., while Walter Energy has dropped 3.3% to $14.10, Consol Energy has declined 1.5% to $36.33, Peabody Energy is off 3.6% at $17.30, Teck Resources has fallen 1.8% to $23.92 and Arch Coal is down 0.1% at $4.16. Tuesday, January 7, 2014 Is T-Mobile a Good Portfolio Play? With shares of T-Mobile (NASDAQ:TMUS) trading around $33, is TMUS 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 T-Mobile offers mobile communications services under the T-Mobile brands in the United States, Puerto Rico, and the U.S. Virgin Islands. Its service offerings include postpaid and prepaid wireless voice, messaging and data services, mobile broadband, and wholesale wireless services. T-Mobile agreed to buy airwaves from Verizon Wireless (NYSE:VZ) for about $2.4 billion in cash as part of a spectrum swap that will give both companies more network capacity in areas where they need it. T-Mobile, the fourth-largest U.S. wireless carrier, will purchase 700-megahertz A-block spectrum licenses from Verizon, according to a statement yesterday. As part of the exchange, Verizon, the largest U.S. wireless carrier, will get so-called AWS and PCS licenses, which have a combined value of about $950 million. The deal will provide T-Mobile with a big swath of low-band frequencies — a type of spectrum that Chief Operating Officer Jim Alling has said are the missing piece of its network coverage. Verizon, meanwhile, can use T-Mobile's so-called AWS airwaves to relieve congestion in cities where network performance has suffered due to heavy traffic. T = Technicals on the Stock Chart Are Strong T-Mobile stock has been surging higher since its initial public offering. The stock is currently trading near all time highs and looks set to continue this path. 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, T-Mobile is trading above its rising key averages, which signal 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 T-Mobile options may help determine if investors are bullish, neutral, or bearish. Implied Volatility (IV) 30-Day IV Percentile 90-Day IV Percentile T-Mobile options 40.91% 46% 43% What does this mean? This means that investors or traders are buying a significant amount of call and put options contracts, as compared to the last 30 and 90 trading days. Put IV Skew Call IV Skew February Options Flat Average March Options Flat Average As of today, there is an 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 significant 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 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 T-Mobile’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for T-Mobile 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) N/A N/A -16.67% -65.50% Revenue Growth (Y-O-Y) N/A 27.45% 0.82% 3.73% Earnings Reaction -0.77% 4.12% -0.78% N/A T-Mobile has seen mixed earnings and increasing revenue figures over the last four quarters. From these numbers, the markets have been pleased with T-Mobile’s recent earnings announcements. P = Excellent Relative Performance Versus Peers and Sector How has T-Mobile stock done relative to its peers, Verizon (NYSE:VZ), AT&T (NYSE:T), Sprint (NYSE:S), and sector? T-Mobile Verizon AT&T Sprint Sector Year-to-Date Return -0.15% 0.10% -0.60% -5.29% -2.48% T-Mobile has been a relative performance leader, year-to-date. Conclusion T-Mobile is attempting to revolutionize the communications industry by providing less restricted products and services to consumers and companies. The company has agreed to buy airwaves from Verizon Wireless for about $2.4 billion in cash. The stock has been surging higher since its IPO and is currently trading near all time highs. Over the last four quarters, earnings have been mixed while revenues have been rising, which has left investors pleased about recent earnings announcements. Relative to its peers and sector, T-Mobile has been a year-to-date performance leader. Look for T-Mobile to OUTPERFORM. Friday, January 3, 2014 Why the Street Should Love WD-40's Earnings Although business headlines still tout earnings numbers, many investors have moved past net earnings as a measure of a company's economic output. That's because earnings are very often less trustworthy than cash flow, since earnings are more open to manipulation based on dubious judgment calls. Earnings' unreliability is one of the reasons Foolish investors often flip straight past the income statement to check the cash flow statement. In general, by taking a close look at the cash moving in and out of the business, you can better understand whether the last batch of earnings brought money into the company, or merely disguised a cash gusher with a pretty headline. Calling all cash flows When you are trying to buy the market's best stocks, it's worth checking up on your companies' free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That's what we do with this series. Today, we're checking in on WD-40 (Nasdaq: WDFC  ) , whose recent revenue and earnings are plotted below. Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. Dollar values in millions. FCF = free cash flow. FY = fiscal year. TTM = trailing 12 months. Over the past 12 months, WD-40 generated $38.8 million cash while it booked net income of $39.5 million. That means it turned 11.0% of its revenue into FCF. That sounds pretty impressive. However, FCF is less than net income. Ideally, we'd like to see the opposite. All cash is not equal Unfortunately, the cash flow statement isn't immune from nonsense, either. That's why it pays to take a close look at the components of cash flow from operations, to make sure that the cash flows are of high quality. What does that mean? To me, it means they need to be real and replicable in the upcoming quarters, rather than being offset by continual cash outflows that don't appear on the income statement (such as major capital expenditures). For instance, cash flow based on cash net income and adjustments for non-cash income-statement expenses (like depreciation) is generally favorable. An increase in cash flow based on stiffing your suppliers (by increasing accounts payable for the short term) or shortchanging Uncle Sam on taxes will come back to bite investors later. The same goes for decreasing accounts receivable; this is good to see, but it's ordinary in recessionary times, and you can only increase collections so much. Finally, adding stock-based compensation expense back to cash flows is questionable when a company hands out a lot of equity to employees and uses cash in later periods to buy back those shares. So how does the cash flow at WD-40 look? Take a peek at the chart below, which flags questionable cash flow sources with a red bar. Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. Dollar values in millions. TTM = trailing 12 months. When I say "questionable cash flow sources," I mean items such as changes in taxes payable, tax benefits from stock options, and asset sales, among others. That's not to say that companies booking these as sources of cash flow are weak, or are engaging in any sort of wrongdoing, or that everything that comes up questionable in my graph is automatically bad news. But whenever a company is getting more than, say, 10% of its cash from operations from these dubious sources, investors ought to make sure to refer to the filings and dig in. With questionable cash flows amounting to only 6.8% of operating cash flow, WD-40's cash flows look clean. Within the questionable cash flow figure plotted in the TTM period above, changes in taxes payable provided the biggest boost, at 5.8% of cash flow from operations. Overall, the biggest drag on FCF came from capital expenditures, which consumed 6.3% of cash from operations. A Foolish final thought Most investors don't keep tabs on their companies' cash flow. I think that's a mistake. If you take the time to read past the headlines and crack a filing now and then, you're in a much better position to spot potential trouble early. Better yet, you'll improve your odds of finding the underappreciated home-run stocks that provide the market's best returns. Can your retirement portfolio provide you with enough income to last? You'll need more than WD-40. Learn about crafting a smarter retirement plan in "The Shocking Can't-Miss Truth About Your Retirement." Click here for instant access to this free report. We can help you keep tabs on your companies with My Watchlist, our free, personalized stock tracking service. Add WD-40 to My Watchlist. Subscribe to: Posts (Atom) Blog Archive ►  2019 (36) ►  April (1) ►  March (17) ►  February (18) ►  2018 (22) ►  August (2) ►  July (10) ►  June (4) ►  May (6) ►  2015 (124) ►  July (4) ►  June (19) ►  May (22) ►  April (19) ►  March (20) ►  February (15) ►  January (25) ▼  2014 (315) ►  December (18) ►  November (19) ►  October (35) ►  September (35) ►  August (32) ►  July (42) ►  June (36) ►  May (23) ►  April (28) ►  March (20) ►  February (7) ▼  January (20) First Take: Fed wants exit, doesn’t see one yet 4 Quality Stocks With High Cash Returns J.P. Morgan adds advisers managing more than $3.9B James Glassman touts taxing consumption instead of... Revett Minerals is Knocking on the Door (RVM) BMW puts diesel into flagship 7-series Daniel Loeb Comments on Dow Chemical Company Ford needs more women in top jobs, COO says Best China Stocks To Invest In 2014 Why Corporate America Loves Zombie Friday 5 Best Biotech Stocks To Own Right Now Wednesday Analyst Moves: Dicks Sporting Goods Inc,... Should I Buy DTV? 3 Pros, 3 Cons Client outreach underway as government closes Volatility and Options in MannKind Shaking Specula... Limited Upside Potential for Alpha Natural Resourc... Is T-Mobile a Good Portfolio Play? Why the Street Should Love WD-40's Earnings Chestnuts make roaring comeback Will 2014 be another slam dunk for stocks? ►  2013 (107) ►  December (24) ►  November (21) ►  October (25) ►  September (18) ►  August (19) About Me Zhong Kuizhen View my complete profile Ethereal theme. Powered by Blogger.