Friday, January 31, 2014

The Ten Nations With The Worst Air Quality

Researcher find two measurements which best gauge air quality. One comes from object data about the quality itself. The second comes from the perceptions of the people who live in the nations. Each rates  stands distinguishable with the other.; that does not make either any better than its counterpart.

Gallup’s new data is about the perceptions of residents. According to the resident perceptions, the research reported:

People’s satisfaction with the quality of the air in the city or area where they live remained relatively high worldwide in 2012. Nearly four in five adults (78%) reported being content with air quality where they live, in line with what Gallup has measured since 2008.

At the negative end of the list sit several nations with primitive means to create energy mostly created by coal and other dirty fossil fuels:

the countries where people are least satisfied with their air quality hail from a varied set of regions and developmental levels. Among the world’s least satisfied are countries as geographically and economically diverse as Hong Kong (34%), Lebanon (43%), Malta (52%), Haiti (53%), and Russia (54%).

Hong Kong may be the exception to the fossil fuel rule, However, vast portions of its population remain poor and do not have access to cleaner energy. The list of the top five contain Kazakhstan, Iraq, Ukraine, Syria, Malta, and Saudi Arabia. Among them–not a single developed economy.

At the other end of the scale are several economies which at lest have access to more modern and cleaner energy:

At the national level, European and Asian countries dominate the list of places where people are most satisfied with their air quality. For the second consecutive year, Ireland rates among the world’s most satisfied, with 93% of Irish residents expressing satisfaction with their quality of air. Sri Lankans (94%), New Zealanders (92%), Finns (92%), Australians (92%), and Nepali (92%) rate their air quality similarly high. More recently, bushfires outside of Sydney have led the government to issue public health warnings in Australia’s largest city as air quality reaches hazardous levels.

The list gets filed out with Austria, Miramar, Norway, Denmark, Bangladesh. The outlier–Bangladesh–may be on the list because the people do not know better in their assessment. Noteworthy, almost all the northern European nations make the list. Not density populated and by the ocean. As for the future

Efforts to mitigate air pollution are especially urgent when viewed alongside climate change. Just as air pollution contributes to climate change, scientists expect climate change to add to air quality woes in the future. According to the Intergovernmental Panel on Climate Change, without international efforts to cut emissions, global air quality in cities — where Gallup data show residents are already the least satisfied with their air quality — will decline in the future as a result of climate change.

People see what they want to see, not only because of current health factors, but the belief that the present will affect the future. In this case, the conventional opinion is probably true.

Thursday, January 30, 2014

Rieder: Politico’s bold magazine venture

It's a move as counterintuitive as it is bold.

Politico, the digital bible for political junkies, in two weeks will be launching a print magazine, in an era when many have consigned print to the dustbin of history.

Politico has been a major new-media success, rapidly becoming a potent force in national political coverage. But at age seven, the news outlet, which also publishes a Capitol Hill newspaper, is no longer a scrappy underdog.

Jim VandeHei, one of Politico's architects and founders and now its president and CEO, says he thinks his baby does two things quite well: cover the news in quick bursts and spotlight the narrative of the moment. "We got to the point where we had reached what we had set out to do," he says. The question was whether to simply keep doing it "or try to build new muscles."

And, VandeHei says, Politico had "a missing dimension: deeper dive, magazine-style journalism, the kind of pieces that take three or four weeks to report and can be 4,000 or 5,000 words long when they are important enough to warrant it."

VandeHei and Politico cofounder John Harris, its editor-in-chief, had wanted to add that dimension from the get-go. VandeHei says the decision to actually do it was driven by editorial rather than business considerations. But he's sure there is an audience. "We have voracious readers who are willing to read these articles if they are produced at a very high level."

Making sure those articles are at that very high level will be up to Susan Glasser, who will run Politico Magazine. Glasser, a former Washington Post reporter and editor, had gotten very high marks during her tenure at Foreign Policy magazine.

She should have her hands full. In addition to the six-times-a-year print product, it will be her mission to oversee a daily magazine on a brand new website and "The Friday Cover," a weekly email roundup of the best of the digital Politico Magazine that Glasser sees as the equivalent of a weekly newsmagazine.

Glasser will hard! ly be working for strangers. Back when she was editor of the Capitol Hill newspaper Roll Call, she noticed that someone kept beating her paper with a bunch of unsigned items in a newsletter. She investigated and determined that the man behind the mini-scoops was VandeHei. She promptly hired him, and they have been friends ever since.

To deepen the tie both VandeHei and Harris at various times shared the White House beat with Peter Baker, Glasser's husband and currently a New York Times White House correspondent, when the three men were at The Washington Post.

Glasser loved her job at Foreign Policy, where she dramatically upgraded the magazine's digital presence. But she could hardly refuse "a chance to start a magazine from scratch, which is really unique, especially at this time." The magazine, which debuts November 15, the day after the website, "didn't have a font three weeks ago," she said, laughing.

So what will the content be like? VandeHei says the focus will be "similar to Politico, and broader." With Glasser's experience with international news, he says, it makes sense to have a more global focus, looking at "what works elsewhere in the world." Referring both to Washington, D.C., and Politico, he adds, "We live in a bubble, and the magazine allows us to poke that bubble."

The new project launches with two staff writers, including Politico mainstay Glenn Thrush, and will also rely on other Politico staffers as well as outside contributors, some of whom Glasser promises will be"terrific cover story writers."

The magazine, like the print version of Politico, will be distributed free, with an initial run of 40,000 copies.

One thing that will be interesting to watch is how the daily Politico Magazine differs from the daily (or hourly, or minutely) Politico. Glasser says it will be "fun inventing that language." The daily magazine will have outside voices, and will be much less of a prisoner of the intense news cycle that drives Politico.

Glasser says the ! goal is b! oth to be more "agenda-setting" and to engage the news of the moment in a different way, "contextualizing things as they are happening." The plan is to have a daily cover story and four or five other pieces. Bank of America has signed on as exclusive online sponsor for the rest of the year.

Clapping his hands over the advent of Politico Magazine is the man who trademarked the name "Mr.Magazine," Samir Husni, director of the Magazine Innovation Center at the University of Mississippi, School of Journalism. In fact, Husni says Politico is part of a mini-trend, ticking off the names of several publications-- Delish, 429, Allrecipes--that have morphed from digital-only to print.

"Websites are discovering that if you want to make money, you have to come to print," he says. "Print is not dead. People are starting to say, 'Let's pay attention to print.' " And, he adds, "Politico was a little bit smarter than anyone else because they had a print component from the beginning."

But success for the new venture is hardly guaranteed. With great fanfare, magazine giant Conde Nast launched Portfolio, a glossy business magazine, in 2007. Two years later it was gone.

And Politico Magazine is hardly Politico's only big new initiative. In September, owner Robert Allbritton acquired the New York City-centric website Capital New York, with the goal to see whether the company could apply the Politico approach in the Big City.

The company, says VandeHei, is all about answering the question, "Is there a future for the journalism we want to produce?"

So far the outlook seems promising.

Wednesday, January 29, 2014

Obama's new retirement savings plan: 'MyRA'

WASHINGTON — A new savings plan will allow Americans to buy savings bonds in a starter retirement account that "guarantees a decent return with no risk of losing what you put in," President Obama said Tuesday evening in his State of the Union address.

"Today, most workers don't have a pension. A Social Security check often isn't enough on its own. And while the stock market has doubled over the last five years, that doesn't help folks who don't have 401(k)s," he said.

Obama said he would direct the Treasury Department to create new "MyRA" accounts to allow people to more simply invest in Treasury bonds. "It's a new savings bond that encourages folks to build a nest egg," he said.

FULL TEXT: Obama's State of the Union Address


Safe: The new savings bonds would have its principal guaranteed by the U.S. government, much like a traditional savings bond.

Tax benefits: The MyRA bond would be like a Roth IRA: Your contributions would not be tax-deductible, but your earnings would be free from tax when you withdraw it. As with a Roth, your contributions can be taken out tax-free at any time.

Affordable: Minimum initial investment could be as low as $25, and subsequent investments could be as little as $5, through payroll deduction. Savers can keep the same account when they change jobs.

Rates: Savers will earn interest at the same variable interest rate as the federal employees' Thrift Savings Plan (TSP) Government Securities Investment Fund. The fund earned 1.74% last year.

Availability: The MyRA would be open to households earning up to $191,000 a year through their employers. Employers won't incur any cost to offer the MyRAs. You'll be able to save up to $15,000 a year for up to 30 years before transferring to a private Roth IRA.

The proposal was not the most controversial proposal the president unveiled, but it was a brand new idea he hadn't previously announced. The White House said it would release more details Wednesday, as the preside! nt embarks on a tour to expand on themes of the speech.

Retirement accounts aimed at small investors are often high-cost, in the case of brokerages, mutual funds and insurance companies. Bank retirement accounts often get sold up to high-cost investments when they grow large enough. But someone who uses a MyRA to save $15,000 could switch to a low-cost, broadly diversified fund, such as Vanguard Total Stock Index. Cost for one year: $7.50.

Employers who offer the option won't have to administer them. And if they automatically enroll employees -- which they won't be required to do -- those employees will have a greater chance of accumulating retirement savings. At Fidelity Investments, pans with auto enrollment have an 84% participation rate vs. a 53% participation rate for plans without auto enrollment.

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"It remains to be seen whether the MyRA is a better mousetrap," says Gary Schatsky, a New York financial planner. "For many, it could be first time they are participating in retirement savings in any meaningful way."

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What to Look for in Qualcomm's Earnings

Qualcomm (NASDAQ: QCOM  ) , the world leader in chips targeted at mobile devices, is set to report its quarterly earnings on Jan. 29. With the shares just slightly off their 52-week highs, and at a fairly reasonable price/earnings multiple at just under 19 times earnings, Qualcomm looks like a classic growth at a reasonable price name that has pulled back a bit. That said, how the stock performs over the next quarter or so is likely to be driven largely by what is reported and said at the company's upcoming earnings call. 

The two principal drivers of Qualcomm's top and bottom lines are its chip business and its cellular patent licensing business. The former brings in the majority of the revenue while the latter makes up the majority of the profits. How will these two segments do this quarter, particularly in light of Apple's (NASDAQ: AAPL  ) less-than-stellar report? Join Evan Niu, CFA and Ashraf Eassa to find out why the answer may not be as obvious as it seems. 

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Monday, January 27, 2014

Cloud Software Firm Veeva Sets Range for IPO Pricing

Veeva Systems Inc., a California-based company that makes cloud software solutions for the life sciences industry, has filed an amended Form S-1 with the Securities and Exchange Commission for an initial public offering (IPO) of 13 million Class A shares priced between $12 and $14 a share.

Selling stockholders are offering 3.33 million shares and the rest are being offered by the company. The underwriters have an overallotment option on an additional 1.96 million shares.

The company has two classes of common stock that are priced equally, but Class B shares are entitled to 10 votes each while Class A shares are entitled to one vote per share. After the offering, holders of Class B shares will hold about 98.5% of the voting power of outstanding shares, and the company's officers, directors and their affiliates will hold about 74% of the voting power in the company.

Veeva plans to use its share of the proceeds, estimated at $138.3 million if the underwriters' options are taken and the shares are priced at the mid-point of the estimated range, for general corporate purposes and working capital. In its filing the company said, “[W]e do not currently have specific planned uses of the proceeds. The amount of proceeds we use for the purposes above, if any, will depend on the level of cash generated from our operations.”

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The company’s revenues doubled in the 2013 fiscal year that ended in January to $129.5 million from $61.3 million the year before. Net income rose from $4.23 million to $18.8 million in the same period.

Veeva will list its Class A shares on the New York Stock Exchange under the ticker symbol VEEV.

Sunday, January 26, 2014

The Deal: Dell LBO Debt Deal Signals IPO Option

NEW YORK (The Deal) After his long-fought battle with Carl Icahn, one might think Michael Dell would rest on his laurels and keep Dell (DELL) the private, nimble startup he is promising the world. However, buried in the financing details for the nearly $25 billion leveraged buyout, backed by Silver Lake, is a hint that options are being kept open for a return trip to the public markets.

The roadshow for Dell's $3.25 billion bond offering backing its buyout is kicking off this week. The offering includes $2 billion of first-lien seven-year senior notes and $1.25 billion of second-lien eight-year senior notes.

Both tranches have three years of call protection, but the second-lien notes have a clawback that would allow 50% of the notes to be called at par plus half the coupon in case of an initial public offering.

"It's a little unusual because they've just gone private," said Richard Farley, a leveraged finance partner at Paul Hastings LLC.

What the clawback does for Dell is that it will allow it to pay off some of the more expensive second-lien debt if it should decide to go public during the second year following the financing, something that would be appealing to investors reading the company's S-1 filing.

And 50% is high for this type of provision. Most equity clawbacks are set between 30% and 40%, another indication that Michael Dell and Silver Lake are considering the capital structure of the company from all strategic angles.

Argus Research Co. analyst Jim Kelleher said taking Dell private to sort out its financial situation was a good strategy but, at a minimum, this company would need three to five years to even think about going public again. That said, Kelleher did not remember seeing an IPO clawback in other buyout situations recently.

"I don't recall that same sort of detail in some other takeouts," Kelleher said. "But this LBO is so large that it's hard to come up with comparisons."

There is the example of the take-private of Hertz Global Holdings Inc. in December 2005 for $15.6 billion by a private equity group led by Clayton, Dubilier & Rice LLC. The buyout consortium took the company public eleven months later.

The major difference between the Hertz and Dell situations, however, was that the car rental chain was doing well when it went public again. Revenue was up 8%, and EBITDA was up 9% following the buyout.

Dell on the other hand, is facing a worldwide secular decline of its signature product: the personal computer. PC sales suffered their steepest decline ever in the first quarter of this year, plummeting 14% according to a survey from International Data Corp.

Dell's EBITDA dropped 22.6% for the fiscal year ending in February 2013 from 2012, according to Bloomberg data. The market had priced the company at under $9 per share in late 2012 before buyout talk began to circulate and the company ended up being sold for $13.75 per share.

"For them to go back public so quickly would be an amazing turnaround," Farley said. "Can these guys really revamp Dell and execute on the business plan that currently contemplates them being private for an extended period of time so fast they'd be filing for an IPO within 18 months? That would be amazing - I'd say the likelihood of that happening seems low."

What to look for if Dell were planning to go public again quickly are signs that its credit was doing well so that company would be looking to put capital to work, Farley said. In that case, paying down the expensive debt would make sense. "It's a better use of proceeds than a dividend or a sale of equity," he said.

In a tweet following the shareholder vote that will allow him to take his eponymous company private Michael Dell wrote, "Welcome to the world's largest startup!"

And startups, as the world knows from the latest crop of tech companies, like nothing better than to go public. Just look at companies like Google Inc., Facebook Inc. and the soon to be public Twitter Inc. - the very same companies that put the Dells of the world where they are today.

Dell did not return a call seeking comment on the financing terms.

Credit Suisse Group is leading the notes offering. Joint bookrunners include Barclays plc, Bank of America Merrill Lynch, RBC Capital Markets LLC and UBS. Dell is also arranging a $5.5 billion loan package to finance the buyout.

Written by Jonathan Schwarzberg

Saturday, January 25, 2014

Top 5 Life Sciences Stocks To Watch For 2015

My top idea for conservative, income-oriented investors in the coming year is a closed-end fund that invests in public and privately-held companies doing work in the life sciences arena, writes Nate Pile of Nate's Notes.

The life sciences industry includes stocks in biotechnology, pharmaceuticals, diagnostics, managed healthcare and medical equipment, and healthcare information technology and services.

This recommended fund��ambrecht & Quist Life Sciences Fund (HQL)��as also our top pick last year, and the fund rose 44% in 2013.

In addition to rising in value, the fund has a dividend policy of paying out 2% of its net asset value of each quarter.

By choosing to take this payout in the form of a dividend reinvestment, rather than cash, investors have done very well for themselves as they've watched, both the size of their holdings, and the share price itself, increase as the years have rolled by.

To be sure, you will always be able to get more bang for your buck by owning individual biotech stocks.

Top 5 Life Sciences Stocks To Watch For 2015: Noble Corp (NE)

Noble Corporation is an offshore drilling contractor for the oil and gas industry. The Company performs contract drilling services with its fleet of 79 mobile offshore drilling units and one floating production storage and offloading unit (FPSO) located globally. As of December 31, 2011, its fleet consisted of 14 semisubmersibles, 14 drillships, 49 jackups and two submersibles. Its fleet includes 11 units under construction, which include five ultra-deepwater drillships, and six jackup rigs. As of February 15, 2012, approximately 84% of its fleet was located outside the United States in areas, which included Mexico, Brazil, the North Sea, the Mediterranean, West Africa, the Middle East, India and the Asian Pacific. During the year ended December 31, 2011, it completed construction on the Noble Bully I, a drillship, owned through a joint venture with a subsidiary of Royal Dutch Shell plc; completed construction on the Noble Bully II, a drillship, and it completed construction of Globetrotter-class drillship. As of February 15, 2012, it had 10 rigs under contract in Mexico with Pemex Exploracion y Produccion (Pemex).

During 2011, the Company conducted offshore contract drilling operations, which accounted for over 98% of its operating revenues. It conducts its contract drilling operations in the United States Gulf of Mexico, Mexico, Brazil, the North Sea, the Mediterranean, West Africa, the Middle East, India and the Asian Pacific. During 2011, revenues from Shell and its affiliates accounted for approximately 24% of its total operating revenues. During 2011, revenues from Petroleo Brasileiro S.A. (Petrobras) accounted for approximately 18% and 19% of its total operating revenues. Revenues from Pemex accounted for approximately 15%, 20% and 23% of its total operating revenues.


Semisubmersibles are floating platforms which, by means of a water ballasting system, can be submerged to a predetermined depth so that a substantial portion of the hull is b! elow the water surface during drilling operations. As of December 31, 2011, the semisubmersible fleet consisted of 14 units, including five Noble EVA-4000 semisubmersibles; three Friede & Goldman 9500 Enhanced Pacesetter semisubmersibles; two Pentagone 85 semisubmersibles; two Bingo 9000 design unit submersibles; one Aker H-3 Twin Hull S1289 Column semisubmersible, and one Offshore Co. SCP III Mark 2 semisubmersible.


The Company�� drillships are self-propelled vessels. These units maintain their position over the well through the use of either a fixed mooring system or a computer controlled dynamic positioning system. Its drillships are capable of drilling in water depths from 1,000 to 12,000 feet. The maximum drilling depth of its drillships ranges from 20,000 feet to 40,000 feet. As of December 31, 2011, the drillship fleet consisted of 14 units, including four drillships under construction with Hyundai Heavy Industries Co. Ltd. (HHI); three Gusto Engineering Pelican Class drillships; two Bully-class drillships to be operated by it through a 50% joint venture with a subsidiary of Shell; one dynamically positioned Globetrotter-class drillship that left the shipyard during the fourth quarter of 2011; one Globetrotter-class drillship under construction; one moored Sonat Discoverer Class drillship capable of drilling in Arctic environments; one NAM Nedlloyd-C drillship, and one moored conversion class drillship.


As of December 31, 2011, the Company had 49 jackups in its fleet, including six jackups under construction. The rig hull includes the drilling rig, jacking system, crew quarters, loading and unloading facilities, storage areas for bulk and liquid materials, helicopter landing deck and other related equipment. All of its jackups are independent leg and cantilevered. Its jackups are capable of drilling to a maximum depth of 30,000 feet in water depths up to 400 feet.


The Company has two su! bmersible! s in the fleet, which are cold-stacked. Submersibles are mobile drilling platforms, which are towed to the drill site and submerged to drilling position by flooding the lower hull until it rests on the sea floor, with the upper deck above the water surface. Its submersibles are capable of drilling to a depth of 25,000 feet in water depths up to 70 feet.

Advisors' Opinion:
  • [By Paul Ausick]

    Two oil field services companies announced on Tuesday that they plan to spin off parts of their businesses into separately traded companies. National Oilwell Varco Inc. (NYSE: NOV) will hive off its distribution business, and Noble Corp. (NYSE: NE) plans to spin off its standard specification (shallow-water) drilling units.

Top 5 Life Sciences Stocks To Watch For 2015: BERKELEY GROUP HLDGS UNITS(EACH COMP NEW ORD & B SHS)

Berkeley Group Holdings plc, through its subsidiaries, engages in residential-led property development focusing on urban regeneration and mixed-use developments in the United Kingdom. It is involved in the acquisition, planning, designing, building, and marketing of land properties. The company builds and develops new homes, contemporary urban apartments, refurbished historic buildings, traditional family homes, and innovative mixed use schemes. It operates primarily under the brand names of Berkeley, St James, St Edward, St George, Berkeley First, and Berkeley Commercial. Berkeley Group Holdings plc was founded in 1976 and is based in Cobham, the United Kingdom.

Top Consumer Stocks For 2015: Sonus Networks Inc.(SONS)

Sonus Networks, Inc. provides voice and multimedia infrastructure solutions. The company offers session border control (SBC), voice over Internet protocol (VoIP), and access and VoIP media gateway solutions that allow the delivery of voice and multimedia sessions over IP networks. Its products include GSX9000 Open Services Switch that enables voice traffic to be transported over packet networks; GSX4000 Open Services Switch; NBS9000 Network Border Switch that permits service providers to transform their time division multiplexing networks to IP; PSX Policy & Routing Server, which translates business policies into actual call control, routing, and service selection decisions; NBS5200 Network Border Switch that provides SBC functionality; and ASX Call Feature Server that provides local area calling and regulatory features for residential and enterprise markets. The company also offers Network Analytics Suite of performance management products, including NetScore network perf ormance analysis tool, NetAssure voice quality monitoring tool, and NetEng network audit and visualization engine that are used for the collection, monitoring, reporting, and notification of performance metrics. In addition, it provides professional consulting and services to support its IP communication solutions; and program management, network deployment design, softswitch and subscriber database design, network verification and audit, custom application and adaptor development, OSS and API integration, migration and upgrade, and managed services. The company serves long-distance and local exchange carriers, Internet service providers, wireless operators, cable operators, financial institutions, retailers, state and local governments, and multinational corporations. It sells its products primarily through a direct sales force in the United States, Europe, the Asia-Pacific, and the Middle East. Sonus Networks, Inc. was founded in 1997 and is headquartered in Westford, Mass achusetts.

Advisors' Opinion:
  • [By Evan Niu, CFA]

    What: Shares of Sonus Networks (NASDAQ: SONS  ) have popped today by upwards of 17% after the company reported first-quarter earnings.

    So what: First quarter sales totaled $63.3 million, which turned into a non-GAAP net loss of $0.02 per share. Investors were expecting just $61.1 million up top and an adjusted loss of $0.03 per share, meaning the figures were a beat relative to consensus estimates. Session border controller, or SBC, revenue was up 77% to $30 million.

  • [By Roberto Pedone]

    One networking player that's starting to move within range of triggering a big breakout trade is Sonus Networks (SONS), which provides networked solutions for communications service providers and enterprises in the U.S., Europe, the Middle East, Africa, and the Asia Pacific. This stock has been red hot so far in 2013, with shares up 104%.

    If you take a look at the chart for Sonus Networks, you'll notice that this stock has been trending sideways for the past month, with shares moving between $3.25 on the downside and $3.72 on the upside. Shares of SONS have been finding support over the last month each time the stock has pulled back to its 50-day moving average. This stock is now starting to trend a bit higher and move within range of triggering a breakout trade above the upper-end of its sideways consolidating chart pattern.

    Traders should now look for long-biased trades in SONS if it manages to break out above some near-term overhead resistance at $3.56 to $3.59 a share and then once it takes out its 52-week high at $3.72 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average action of 2.50 million shares. If that breakout hits soon, then SONS will set up to enter new 52-week high territory, which is bullish technical price action. Some possible upside targets off that breakout are $5 to $5.50 a share.

    Traders can look to buy SONS off any weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support levels at $3.33 to $3.25 a share, or right below more support at $3.10 a share. One could also buy SONS off strength once it takes out those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

  • [By Ben Fox Rubin]

    Sonus Networks Inc.(SONS) agreed to buy Performance Technologies Inc.(PTIX), a supplier of network communications products, for $3.75 a share, a 26% premium of Thursday’s close, or $42 million. The companies said the deal was worth $30 million, net of Performance Technologies’ cash and excluding acquisition costs. Performance Technologies shares jumped 24% to $3.70 premarket, just under the offer price.

Top 5 Life Sciences Stocks To Watch For 2015: SAIC Inc(SAI)

SAIC, Inc. scientific, engineering, systems integration, and technical services and solutions to various branches of the U.S. military, agencies of the U.S. Department of Defense, the intelligence community, the U.S. Department of Homeland Security and the other U.S. government civil agencies, state and local government agencies, foreign governments, and customers in select commercial markets. Its Government segment provides a range of technical services and solutions in the areas of systems engineering and integration, software development, cyber security, data processing and analysis, secure information sharing and collaboration, IT outsourcing, communication systems and infrastructure, command and control, logistics, research and development, environmental consulting, energy and utilities, design and construction, securing critical infrastructure, disaster preparedness and recovery, homeland security product, geospatial solutions, and modeling and simulation. The compan y?s Commercial segment provides consulting, systems integration, and managed IT services, as well as customizable IT software solutions to oil and gas customers; and enterprise information technology optimization, business intelligence, enterprise resource planning maintenance, and staff augmentation services to select commercial customers, and state and local government customers. In addition, it offers business, engineering, energy, and infrastructure consulting services; language translation, interpretation, and training services; architectural design services; and information systems and communications, and rapid prototyping of technical solutions and products focused on support to intelligence and special warfare operations. SAIC, Inc. was formerly known as Science Applications, Inc. The company was founded in 1969 and is headquartered in McLean, Virginia.

Advisors' Opinion:
  • [By Rich Smith]

    The U.S. Department of Defense awarded nine new contracts on Monday worth some $1.121 billion in aggregate. While one single IT contract claimed the bulk of the awards, there were other, smaller winners as well. Here are a few of them:

  • [By John Udovich]

    In addition to recent news, there are a couple of upcoming events that is bound to gain Advanced Micro Devices, Inc (NYSE: AMD) some attention from investors and traders alike. I should note that Advanced Micro Devices is in our�SmallCap Network Elite Opportunity (SCN EO) portfolio as we believe its making progress in the transition away from the PC market, but�the performance of our position has been rather up and down recently (currently we are down about 2%). Nevertheless, there is still enough good news to keep us excited about the stock�� future performance. Just consider the following recent news:

    Upcoming AMD GPU ��4 Tech Day. On Wednesday, Advanced Micro Devices will unveil its next-generation graphics processing unit at the AMD GPU ��4 Tech Day event. Its not known whether�the company plans to unleash an all-new product family for 2014 or just�a flagship GPU due to arrive in Q4 2013. There will be�a real-time video webcast of the showcase available on the�Investor Relations home page here. Micro Server Pioneer Andrew Feldman is Interviewed. VentureBeat has interviewed Andrew Feldman who is one of the pioneers of micro servers after his�company, SeaMicro, used low-cost Intel Atom chips to create a category of servers with lots of processors in a single machine�and exceptionally low power consumption. Advanced Micro Devices bought SeaMicro early last year for $334 million in order to gain entry into the energy-efficient server market as well as�gain new insights into server customers. Feldman is now corporate vice president and general manager of AMD�� server group and the interview will give investors some insight into the company�� server business. Sony Expects to Sell 5 Million PlayStation 4s for the Holidays and Into the New Year. Bloomberg has recently reported that Sony Corp. expects the PlayStation 4�� lower price and wider variety of entertainment services to drive its forecast to sell 5 million units by the end of March.�
  • [By Rich Smith]

    By far the largest contract of the day was a massive $5.3 billion indefinite-delivery/indefinite-quantity, multiple-award contract issued to a mind-boggling 914 separate recipients simultaneously. Winners included everyone from subsidiaries of brand-name defense contractors such as AAR Corp (NYSE: AIR  ) and SAIC (NYSE: SAI  ) to lesser-known, federally defined small businesses such as "Wakelight Technologies" of Honolulu and "Electromagnetic Compatibility Management Concepts" of Sterling, Va.

  • [By Rich Smith]

    Just a day after awarding it a pair of contracts worth up to $174.2 million Thursday, the Department of Defense came back and awarded local defense contractor Science Applications International Corp (NYSE: SAI  ) two more contracts Friday

Top 5 Life Sciences Stocks To Watch For 2015: Kensey Nash Corporation(KNSY)

Kensey Nash Corporation, a medical device company, engages in the field of regenerative medicine products and technologies to help repair damaged or diseased tissues. The company involves in designing, developing, manufacturing, and processing proprietary medical devices, including resorbable biomaterial products, such as synthetic polymers and collagen. It provides various orthopaedic market products comprising soft tissue and bone fixation products for the fixation and repair of musculoskeletal tissues; and bone void fillers and scaffolds. The company also offers cardiovascular market products that include original Angio-Seal device, a vascular closure device; general surgery market products, which consist of ECM product, a porcine dermis surgical mesh used for abdominal wall reconstruction, breast reconstruction, and select head and neck plastic surgery repair, as well as manufactures resorbable carriers for the breast biopsy markers. In addition, it provides dental bar rier membranes and resorbable materials that are used in ophthalmology applications. The company sells its products through strategic partners in various medical markets, including cardiology, orthopaedic, sports medicine, spinal cranio-maxillofacial, trauma, and general surgery. Kensey Nash Corporation was founded in 1984 and is headquartered in Exton, Pennsylvania.

Top 5 Life Sciences Stocks To Watch For 2015: Grenville Gold Corporation (GVG.V)

Grenville Gold Corp., a junior natural resource company, engages in the acquisition, exploration, and development of mineral properties primarily in Peru. It principally explores for silver, gold, copper, zinc, and lead deposits. The company�s primary projects include the Silveria property comprising 6,122 hectares located in the San Mateo Mining District, Province of Huarochiri, Department of Lima, Peru; and the Espanola/Rosa Maria property covering 7,129 hectares parcel of land located to the southeast of the city of Lima in the province of Canete, Peru. Grenville Gold Corp. was incorporated in 1994 and is headquartered in Surrey, Canada.

Top 5 Life Sciences Stocks To Watch For 2015: Rockwell Collins Inc (COL)

Rockwell Collins, Inc. (Rockwell Collins), incorporated on March 1, 2001, is engaged in design, production and support of communications and aviation electronics for commercial and military customers worldwide. The Company�� products and systems are primarily focused on aviation applications, The integrated system solutions and products it provide to its served markets include communications, navigation, automated flight control, displays/surveillance, simulation and training, integrated electronics and information management systems. The Company also provides a range of services and support to its customers through a network of service centers, including equipment repair and overhaul, service parts, field service engineering, training, technical information services and aftermarket used equipment sales. The Company operates in two segments: Government Systems and Commercial Systems.

Government Systems

The Company�� Government Systems business provides a range of electronic products, systems and services to customers, including the United States Department of Defense, other ministries of defense, other government agencies and defense contractors around the world. These products, systems and services support airborne, precision weapon, ground and maritime applications and are used in line-fit applications on new equipment, as well as in retrofit and upgrade applications designed. The Company�� defense-related systems, products and services include communications systems and products designed to enable the transmission of information across the communications spectrum, including satellite communications; navigation products and systems, including radio navigation products, global positioning system (GPS) equipment, handheld navigation devices and multi-mode receivers; avionics sub-systems for aircraft flight decks that combine flight operations with navigation and guidance functions that can include flight controls and displays, information/data processing and communicat! ions, navigation, safety and surveillance systems; cockpit display products, including multipurpose flat panel head-down displays, wide field of view head-up and helmet-mounted displays; simulation and training systems, including visual system products, training systems and services, and maintenance, repair, parts and after-sales support services.

Avionics consists of electronic solutions for a range of airborne platforms, including fixed and rotary wing aircraft, unmanned aerial vehicles (UAVs) and the associated aircrew and maintenance training devices and services. The Company provides complete avionics solutions (including cockpit avionics, mission system applications and system integration) and also provides individual avionics products to platform integrators. The Company serves various roles within these markets, including system and subsystems integrator, as well as provider of various electronic products. Communication products include spectrum voice and data connectivity for government and military use in the air, on the ground and at sea. Surface solutions include electronic systems applied to a variety of non-airborne market segments.

Commercial Systems

The Company�� Commercial Systems business supplies aviation electronics systems, products and services to customers located throughout the world. The customer base is consists of original equipment manufacturers (OEMs) of commercial air transport, business and regional aircraft, commercial airlines and business aircraft operators. The Company�� systems and products are used in both OEM applications, as well as in retrofit and upgrade applications designed.

The Company�� commercial aviation electronics systems, products and services include integrated avionics systems, such as Pro Line Fusion. Capabilities include synthetic and enhanced vision enabled flight displays, advanced flight and performance management systems, fly-by-wire integrated flight controls and information management! solution! s to improve operational efficiency; integrated cabin electronics systems, including cabin management systems, passenger connectivity and entertainment solutions, business support systems to improve passenger productivity and passenger flight information systems; communications systems and products, such as data link, high frequency, very high frequency and satellite communications systems; navigation systems and products, including landing sensors to enable automatic landings, radio navigation and geophysical sensors, as well as flight management systems; situational awareness and surveillance systems and products, such as synthetic and enhanced vision systems, surface surveillance and guidance solutions, head-up guidance systems, weather radar and collision avoidance systems; integrated information management solutions to improve the overall efficiency of flight, maintenance and cabin operations. These include on-board information management systems and connectivity solutions, airborne and ground applications and services, and ground infrastructure and services; electro-mechanical systems, including integrated pilot control solutions and primary and secondary actuation systems; simulation and training systems, including full-flight simulators for crew training, visual system products, training systems and engineering services, and maintenance, repair, parts, after-sales support services and aftermarket used equipment.

Air transport aviation electronics include avionics, cabin systems and flight control systems for commercial transport aircraft platforms. Business and regional aviation electronics include integrated avionics, cabin management and flight control systems for application on regional and business aircraft platforms. The Company develops integrated avionics, cabin and flight control solutions for business and regional aircraft OEMs and support them with the integration into other aircraft systems. Products offered for OEM applications in the business and regional aircraft cate! gory are ! marketed directly to the aircraft OEMs.

The Company competes with Honeywell International, Inc., Thales S.A., Panasonic, Raytheon Co., Harris Corp., BAE Systems Aerospace, Inc., General Dynamics Corporation, L3 Communications, Inc., The Boeing Company, Northrop Grumman Corp., CAE Inc., General Electric Co. and Garmin International Inc.

Advisors' Opinion:
  • [By Rich Smith]

    The Department of Defense awarded Rockwell Collins (NYSE: COL  ) a sizable "foreign military sales contract" on Monday.

    Rockwell will upgrade a total of three Boeing (NYSE: BA  ) KC-135R aerial refueling tankers for the French Air Force under a $44.5 million firm-fixed-price contract, installing the KC-135 Global Air Traffic Management Block 40 Upgrade for the airplanes. Work on the contract will be completed by Nov. 10, 2015.

  • [By Rich Smith]

    The configuration described in DSCA's notification to Congress does not appear to be configured for ground attack, however. According to the notice, the French drones would be powered by Honeywell (NYSE: HON  ) turboprop engines, be equipped with Raytheon's (NYSE: RTN  ) AN/DAS-1 Multi-Spectral Targeting Systems and AN/APX-119 (or KIV-119) international friend-or-foe transponders, and also ARC-210 radio systems from Rockwell Collins (NYSE: COL  ) , but no mention is made of any munitions, or pylons for attaching them to the planes, being sold to France.

  • [By Ben Levisohn]

    Shares of Rockwell Collins (COL) have rebounded today after selling off yesterday on news that it would make a billion dollar acquisition.


    Yesterday, Rockwell Collins said it would purchase Arinc from the Carlyle Group for $1.4 billion, as the U.S. defense company seeks to bolster its air communications business. Rockwell’s stock fell 1.5% yesterday on the news.

    Sterne Agee, however, came out in support of the deal today. Analysts Peter Arment and Josh Sullivan note that the deal, while expensive, will go a long way towards boosting the company’s aerospace business in the years to come. They write:

    The purchase price of $1.4 billion results in an estimated transaction multiple of ~12x-13x 2013 EBITDA, which is at the very high end of the range of transaction multiples for aerospace M&A deals. However, the scarcity value of the type of business of ARINC coupled with the growing theme of connectivity in aviation warrants a more strategic valuation…

    With an improving outlook with aerospace profits becoming 60% of the mix by FY15 vs. 50% today, COL can return to supporting a higher valuation.

    The analysts are such big fans of the deal, that they raised Rockwell Collins to a Buy from Neutral.

    The credit rating firms are not so thrilled by the deal, which will be financed entirely with debt. Yesterday, Moody’s and Standard & Poor’s both said they would reevaluate their debt ratings for Rockwell Collins, and this morning� Fitch followed suit by placing it on watch for a downgrade. Fitch said:

    Fitch’s primary credit concern is the timing of COL’s return to stronger metrics, including the risk of sequestration and of a weaker economy that could constrain the company’s earnings and cash flow and slow a reduction in leverage. This concern is mitigated by COL’s solid margins and strong cash flow generation which were typically deployed towards share repurc

Top 5 Life Sciences Stocks To Watch For 2015: Compass Gold Corporation (CVB.V)

Compass Gold Corporation, an exploration stage company, focuses on gold exploration in Africa. It holds an option to acquire an indirect 51% working interest in 4 gold exploration permits, including the Yanfolia license covering 250 square kilometres in south Mali; the Dandoko license covering an area of 134 square kilometres located in west Mali; the Kolondieba permit covering 250 square kilometres in south Mali; and the Solabougouda license covering an area of 250 square kilometres in south Mali. The company, formerly known as Nordic Gold Corporation, is based in Vancouver, Canada.

Top 5 Life Sciences Stocks To Watch For 2015: William Hill(WMH.L)

William Hill PLC, together with its subsidiaries, provides gaming and betting services across online, on the high street, and on the phone channels primarily in the United Kingdom. It operates licensed betting offices (LBOs), which combine over-the-counter (OTC) sports-betting and gaming machines that enable customers to bet on sporting and other events. The company also operates and a series of other gaming Web sites that provide sports betting, casino games, poker, bingo, skills games, financial betting, in-play betting, and other gaming products; and call centers in Leeds and Sheffield, which offer telephone betting services, including telephone bet capture positions, SMS text betting, and live commentary services. In addition, William Hill provides on-course betting services; and owns and operates two greyhound stadia in Sunderland and Newcastle. As of June 21, 2011, it operated approximately 2,300 betting shops in Ireland and Britain. The company was f ounded in 1934 and is based in London, the United Kingdom.

Top 5 Life Sciences Stocks To Watch For 2015: Lithium Americas Corp (LAC.TO)

Lithium Americas Corp. engages in the exploration and evaluation of lithium, potassium, and other mineral resources in South America. Its principal property includes the Cauchari‐Olaroz Lithium Project covering an area of approximately 82,500 hectares in adjacent Cauchari and Olaroz salt lakes located in Jujuy, Argentina. The company was incorporated in 2009 and is headquartered in Toronto, Canada.

Top 5 Life Sciences Stocks To Watch For 2015: QLogic Corporation(QLGC)

QLogic Corporation engages in the design and supply of storage networking, high performance computing networking, and converged networking infrastructure solutions. It offers various host products, including fiber channel and Internet small computer systems interface (iSCSI) host bus adapters; fiber channel over Ethernet (FCoE) converged network adapters; and intelligent Ethernet adapters. The company also provides network products, which consist of fiber channel switches, including stackable edge switches, bladed switches, virtualized pass-through modules, and high-port count modular-chassis switches; Ethernet pass-through modules; and storage routers for bridging fiber Channel, FCoE, and iSCSI networks, as well as for migrating data between storage devices. In addition, it offers silicon products comprising fiber channel, iSCSI, converged network, and Ethernet controllers. Further, the company involves in the design and development of application-specific integrated circ uits, adapters, and switches based on fiber channel, iSCSI, FCoE, and Ethernet technologies. Its products are used in server, workstation, and storage subsystem solutions that are used by small, medium, and large enterprises with various business data requirements. The company sells its products to original equipment manufacturers and distributors worldwide. QLogic Corporation was founded in 1992 and is headquartered in Aliso Viejo, California.

Advisors' Opinion:
  • [By Sean Williams]

    Also in the news ...
    Let's not sugarcoat this one iota: It was a really busy week for earnings news, with network equipment maker QLogic (NASDAQ: QLGC  ) , printing and IT specialist Xerox (NYSE: XRX  ) , and telecommunication services provider Orange (NYSE: ORAN  ) all reporting results.

  • [By Eric Volkman]

    In turn, it bumps QLogic (NASDAQ: QLGC  ) from that index to the S&P SmallCap 600. Finally, QLogic's shift completely displaces Coldwater Creek (NASDAQ: CWTR  ) , which will no longer be on the S&P SmallCap 600.

Friday, January 24, 2014

We Answer Your Questions on Obamacare

We can't get enough of our reader emails, and there have been plenty to answer lately...

One huge trend we've noticed recently is that getting more Obamacare info is a priority for many of you.

That's why Money Morning Capital Wave Strategist Shah Gilani addressed a few Obamacare "facts" that readers of his Wall Street Insights & Indictmentsservice wanted to discuss.

Take a look at the Obamacare info below. These are just a few of what we've gotten so far. If you want more Obamacare info - like how to profit from the "Affordable" Care Act - you can get that here.

Obamacare Question #1: Why hasn't the Republican-controlled House defunded Obamacare? The House controls the purse strings of the nation. ~ Lorne D.

Answer from Shah Gilani: There's a long way to go in this war, and the next step will be on the funding side of the battlefield.

That's coming shortly, as in right after November...

Q: It has been my experience that every time the government sets out to reform something it is always in favor of special interests. The people always lose. People in the middle class pay the bill and the special interests people collect. ~ Pappy

A: "Same as it ever was..."

Q: Obamacare is a train wreck by design... it was never intended to work. It is merely an intermediate step towards a single payor system. When things get bad enough, the public will turn to the government to fix this mess and the government will offer up a single payor system as the solution. Your health care will then be totally controlled by the government.... it is all about control and power. ~ Len

A: While you may be right, there may be a backdoor agenda, the truth is I can't figure it out. I just don't understand why the attention isn't put on the insurance companies greasing the system that benefits them, the doctors committing fraud... in conjunction with the aiding and abetting insurance companies, and why the public is always duped so readily into believing that they are the ones who have to pay the price.

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As Pappy says above, it's always in the interest of special interests. We know that, and it is the same as it ever was. But it's up to US - the American people - to protest and revolt if we have to. And we do have to. It's our health, our money, our right to choose, and our right to change the government.

If we want a better healthcare system, we need to start by changing our government.

Still, you can say one good thing for Obamacare... it's going to be one of the biggest single wealth creation opportunities in decades. We're talking trillions in new spending.

Not all companies will benefit - but a select few are primed for higher returns on a scale that was simply unimaginable before this legislation was passed. My friend and colleague Keith Fitz-Gerald just released a new investor report detailing exactly which stocks will do well when Obamacare gets rolling. Click here to see that.

The rest of Shah's Q&A session addresses readers' biggest concerns on Syria, free markets, trailing stops, and much more - go here for the full story.

Monday, January 20, 2014

Lexus coupe returns to U.S.

Toyota's Lexus luxury brand has a coupe in the works and is exhibiting a version at the Tokyo auto show this month.

Called RC and based on hardware and underpinnings from the GS sedan, it could show up in the U.S. in the fourth quarter next year. Lexus hopes it will expand the brand's appeal and draw new buyers.

A lot depends on price, and Lexus is mum on that.

RC is a four-seater and is meant to reclaim the high-style, high-status image of the original SC coupe line, marketed from 1991 through 2000. The SC name subsequently was approrpriated for a folding hardtop coupe-convertible that was introduced in 2001 and now is discontinued.

The only other coupe Lexus has sold is the hand-built, very-limited-volume and now-discontinued $375,000 LFA.

The couple market is tiny. And Lexus' recent bad luck making inroads might have you reasonably asking why Lexus even would bother. Seems that's what the imgage-conscious high-end brands do. Mercedes-Benz has a coupe version of its S-class flagship sedan. BMW has a high-end coupe.

Strictly speaking, a coupe is a two-door car with no rigid roof pillar at the back edge of the door. You can roll down front and back windows in a coupe and leave an uninterrupted empty space, not visually marred by the so-called B pillar.

It's considered a very stylist, sporty, even sexy look.

That meaning has been perverted into near-meaninglessness by automakers' marketing. Saturn years ago tried to sell a "three-door" coupe. More recently, Mercedes-Benz likes to all its CLA four-door sedan a "coupe" because it has the sweeping roofline that often marks true coupes.

The Tokyo exhibit includes the SC 350, which is powered by a 3.5-liter gasoline engine, and the SC 300h, a gas-electric hybrid.

Toyota intends to sell the SC in all markets where the Lexus brand is sold. The hybrid version will be targeted on specific markets and Lexus hasn't identified those.

The only hard data Lexus as disclosed are the dimensions, identica! l for the gasoline and hybrid models: 184.9 inches long, 72.4 in. long, 54.9 in. tall on a 107.5-in. wheelbase.

Sunday, January 19, 2014

Best Gold Stocks To Buy Right Now

The jury verdict Thursday afternoon that found former Goldman Sachs’ trader Fabrice Tourre liable for fraud for his role in a failed $1 billion subprime mortgage investment is seen as a critical victory for the Securities and Exchange Commission, and the details of the case should be analyzed as the agency writes its fiduciary rule, industry officials say.

“This was a particularly high-profile case for the SEC, so getting a win was critical for them,” Steve Crimmins, a partner with K&L Gates in Washington, who served for eight years as the SEC’s Deputy Chief Litigation Counsel, told ThinkAdvisor on Monday.

The case against Tourre stems from the 2010 case in which the SEC charged Goldman Sachs with defrauding investors in a 2007 deal known as Abacus, a collaterlized debt obligation. The SEC said that Goldman misstated and omitted key facts about the CDO tied to subprime mortgages as the U.S. housing market was beginning to falter. Goldman agreed to pay a record $550 million settlement and reform its business practices.

Best Gold Stocks To Buy Right Now: First Majestic Silver Corp.(AG)

First Majestic Silver Corp. engages in the production, development, exploration, and acquisition of mineral properties with a focus on silver in Mexico. The company owns interests in La Encantada Silver Mine comprising 4,076 hectares of mining rights and 1,343 hectares of surface land located in Coahuila; La Parrilla Silver Mine consisting of mining concessions covering an area of 69,867 hectares; and San Martin Silver Mine comprising approximately 7,841 hectares of mineral rights and approximately 1,300 hectares of surface land rights located in Jalisco. It also holds interests in Del Toro Silver Mine consisting of 393 contiguous hectares of mining claims and an additional 129 hectares of surface rights located in Zacatecas; Real de Catorce Silver Project comprising 22 mining concessions covering 6,327 hectares located in San Luis Potosi state; and Jalisco Group of Properties consisting of mining claims totalling 5,240 hectares located in Jalisco. The company was founded in 1979 and is headquartered in Vancouver, Canada.

Advisors' Opinion:
  • [By Doug Ehrman]

    It is no secret that precious metals companies have been taking a pounding for some time now. The SPDR Gold Trust (NYSEMKT: GLD  ) and iShares Silver Trust (NYSEMKT: SLV  ) , the gold and silver ETFs, have been hard hit and operating companies like First Majestic (NYSE: AG  ) and Barrick Gold (NYSE: ABX  ) have been hit even harder. Through all of these struggles, and in some cases because of them, one precious metals company continues to look attractive for the long term: Silver Wheaton (NYSE: SLW  ) .

Best Gold Stocks To Buy Right Now: CME Group Inc.(CME)

CME Group Inc. operates the CME, CBOT, NYMEX, and COMEX regulatory exchanges worldwide. The company provides a range of products available across various asset classes, including futures and options on interest rates, equity indexes, energy, agricultural commodities, metals, foreign exchange, weather, and real estate. It offers various products that provide a means of hedging, speculation, and asset allocation relating to the risks associated with interest rate sensitive instruments, equity ownership, changes in the value of foreign currency, credit risk, and changes in the prices of commodities. CME Group owns and operates clearing house, CME Clearing, which provides clearing and settlement services for exchange-traded contracts and counter derivatives transactions; and also engages in real estate operations. Its primary trade execution facilities consist of its CME Globex electronic trading platform and open outcry trading floors, as well as privately negotiated transact ions that are cleared and settled through its clearing house. In addition, the company offers market data services comprising live quotes, delayed quotes, market reports, and historical data services, as well as involves in index services business. CME Group?s customer base includes professional traders, financial institutions, institutional and individual investors, corporations, manufacturers, producers, and governments. It has strategic partnerships with BM&FBOVESPA S.A., Bursa Malaysia Derivatives, Singapore Exchange Limited, Green Exchange, Dubai Mercantile Exchange, Johannesburg Stock Exchange, and Bolsa Mexicana de Valores, S.A.B. de C.V., as well as joint venture agreement with Dow Jones & Company. The company was formerly known as Chicago Mercantile Exchange Holdings Inc. and changed its name to CME Group Inc. in July 2007. CME Group was founded in 1898 and is headquartered in Chicago, Illinois.

Advisors' Opinion:
  • [By Seth Jayson]

    CME Group (Nasdaq: CME  ) reported earnings on May 2. Here are the numbers you need to know.

    The 10-second takeaway
    For the quarter ended March 31 (Q1), CME Group met expectations on revenues and met expectations on earnings per share.

Top Low Price Companies To Watch In Right Now: Newmont Mining Corporation(Holding Company)

Newmont Mining Corporation, together with its subsidiaries, engages in the acquisition, exploration, and production of gold and copper properties. The company?s assets or operations are located in the United States, Australia, Peru, Indonesia, Ghana, Canada, New Zealand, and Mexico. As of December 31, 2009, it had proven and probable gold reserves of approximately 93.5 million equity ounces and an aggregate land position of approximately 27,500 square miles. The company was founded in 1916 and is headquartered in Greenwood Village, Colorado.

Best Gold Stocks To Buy Right Now: Claude Resources Inc.(CGR)

Claude Resources Inc. engages in the acquisition, exploration, and development of precious metal properties, as well as production and marketing of minerals in Canada. It primarily explores for gold in northern Saskatchewan and northwestern Ontario. The company holds interests in the Seabee gold mine located at Laonil Lake, northern Saskatchewan; and the Madsen property that consists of 6 contiguous claim blocks totaling approximately 10,000 acres, located in the Red Lake Mining District of northwestern Ontario. It also holds interest in the Amisk Gold project, which covers an area of 13,800 hectares in the province of Saskatchewan. The company was founded in 1980 and is based in Saskatoon, Canada.

Best Gold Stocks To Buy Right Now: Goldcorp Incorporated(GG)

Goldcorp Inc. engages in the acquisition, exploration, development, and operation of precious metal properties in Canada, the United States, Mexico, and Central and South America. It produces and sells gold, silver, copper, lead, and zinc. The company was founded in 1954 and is headquartered in Vancouver, Canada.

Advisors' Opinion:
  • [By Heather Ingrassia]

    On Friday, shares of PepsiCo -- which currently possess a market cap of $122.80 billion, a P/E ratio of 18.71, a forward P/E ratio of 16.78, and a forward yield of 2.86% ($2.27) -- settled at $79.73. As of June 30, 2013, and from a cash and debt perspective, Goldcorp (GG) had a total of $8.14 billion in cash and a total of $29.51 billion in debt on its books. Based on Friday's closing price of $29.92, shares of PepsiCo are trading 2.50% below their 20-day simple moving average, 3.60% below their 50-day simple moving average, and 3.40% above their 200-day simple moving average. These numbers indicate a short and mid-term downtrend and a moderate long-term uptrend for the stock, which generally translates into somewhat of a buying mode for most traders.

  • [By Jim Jubak]

    As sure as April showers bring May flowers, January brings reserve updates from gold mining companies that foreshadow the annual earnings reports that these companies will issue in February. Yamana Gold (AUY) and Randgold Resources (GOLD) initiate the February earnings parade from gold mining companies, with reports on February 2 and 3, respectively. Kinross Gold (KGC) follows on February 12 with Goldcorp (GG) and Barrick Gold (ABX) reporting on February 13. Newmont Mining (NEM) issues its numbers on February 20.

  • [By Doug Ehrman]

    The bigger question that Friday's events raise is whether precious-metals companies are becoming cheap or dangerous at current levels. Barrick is down about 40% this year, and while others such as Goldcorp (NYSE: GG  ) and Newmont Mining (NYSE: NEM  ) are down less, they have still slid by roughly 20% each. Gold as a commodity is down more than 17% this year, as represented by the SPDR Gold Trust (NYSEMKT: GLD  ) . In addition, global macroeconomic events are aligning to make the future direction of precious metals very uncertain, at the very least increasing the volatility and risk associated with these types of investments.

  • [By Dan Caplinger]

    Dan, however, does believe CEO Randy Smallwood has the experience necessary to deal with these challenges. Strategies may include obtaining better terms from existing partners such as Barrick Gold (NYSE: ABX  ) , Goldcorp (NYSE: GG  ) , and Hudbay Minerals (NYSE: HBM  ) on future contracts.

Best Gold Stocks To Buy Right Now: Northgate Minerals Corporation(NXG)

Northgate Minerals Corporation, together with its subsidiaries, engages in exploring, developing, processing, and mining gold and copper deposits in Canada and Australia. Its principal producing assets include 100% interests in the Fosterville and Stawell Gold mines in Victoria, Australia; and the Kemess South mine located in north-central British Columbia, Canada. The company was formerly known as Northgate Exploration Limited and changed its name to Northgate Minerals Corporation in May 2004. Northgate Minerals Corporation was founded in 1919 and is headquartered in Toronto, Canada.

Best Gold Stocks To Buy Right Now: Thompson Creek Metals Company Inc.(TC)

Thompson Creek Metals Company Inc., through its subsidiaries, engages in mining, milling, processing, and marketing molybdenum products in the United States and Canada. The company?s principal properties include the Thompson Creek Mine and mill in Idaho; a metallurgical roasting facility in Langeloth, Pennsylvania; and a joint venture interest in the Endako Mine, mill, and roasting facility in British Columbia. It also holds interests in development projects comprising the Davidson molybdenum property and the Berg copper-molybdenum-silver property located in northern British Columbia; the Howard?s Pass property, a lead and zinc project situated in the Yukon territory-northwest territories border; and the Maze Lake property, a gold project located in the Kivalliq district of Nunavut. The company produces molybdenum products, primarily molybdic oxide and ferromolybdenum, as well as soluble technical oxide, pure molybdenum tri-oxide, and high purity molybdenum disulfide. As o f December 31, 2010, its consolidated recoverable proven and probable ore reserves totaled 462.2 million pounds of contained molybdenum in the Thompson Creek Mine and the Endako Mine. The company was formerly known as Blue Pearl Mining Ltd. and changed its name to Thompson Creek Metals Company Inc. in May 2007. Thompson Creek Metals Company Inc. is based in Denver, Colorado.

Advisors' Opinion:
  • [By Jon C. Ogg]

    Thompson Creek Metals Co. Inc. (NYSE: TC) was at 54% discount to its book value of $8.30 per share at the time, and the stock price of $3.90 is up from $3.03 Deutsche Bank’s team nailed upside of more than 28% here. Its price target was $4 at the time versus a consensus target of $4.50 at the time. The 52-week range here is $2.42 to $4.55, but we would point out that the consensus price target is $3.93.

  • [By Selena Maranjian]

    The biggest new holdings are Chesapeake Energy�puts, and shares of Discovery Communications. Other new holdings of interest include Halcon Resources (NYSE: HK  ) , and Thompson Creek Metals (NYSE: TC  ) . Oil and gas company Halcon, operating in the promising Bakken region, as well as Texas's productive Eagle Ford shale region, among others, is expected to grow by 30% annually over the coming years. It recently reported 2012 net daily production 128% higher than year-ago levels, and proven reserves up 417%. Halcon was recently one of my colleague Joel South's top two energy holdings, and analysts at Stifel recently upped its rating�from Hold to Buy.

Best Gold Stocks To Buy Right Now: Iamgold Corporation(IAG)

IAMGOLD Corporation, together with its subsidiaries, engages in the exploration, development, and production of mineral resource properties worldwide. It primarily explores for gold, silver, zinc, copper, niobium, diamonds, and other metals. The company holds interests in eight operating gold mines, a niobium producer, a diamond royalty, and exploration and development projects located in Africa and the Americas. Its advanced exploration and development projects include the Westwood project in Canada; and the Quimsacocha project, which consists of 3 mining concessions covering an aggregate area of approximately 8,030 hectares in Ecuador. The company was formerly known as IAMGOLD International African Mining Gold Corporation and changed its name to IAMGOLD Corporation in June 1997. IAMGOLD Corporation was founded in 1990 and is based in Toronto, Canada.

Advisors' Opinion:
  • [By Namitha Jagadeesh]

    International Consolidated Airlines Group SA (IAG) and Air France-KLM (AF) Group rose with as a gauge of travel stocks as oil prices fell after Iran�� accord. PSA Peugeot Citroen gained 3.7 percent after people familiar with the matter said its chief executive officer plans to step down next year. Fresenius Medical Care AG surged the most in five years after U.S. regulators scrapped a plan to cut Medicare payments next year.

Saturday, January 18, 2014

How to enthrall an audience when you speak

As Jan. 26 gets closer — the day I'm giving a speech on how to get what you want at any age or stage of life — e-mails from the event organizers become more frequent.

"What will you need? A screen to show your PowerPoint?" they inquire.

COLUMN: How to tame your public-speaking fears
COLUMN: Pointers to strengthen speaking skills

"No PowerPoint," I write back. "All I need is a lavalier microphone and a podium on the stage. And some water would be nice."

Response: "No PowerPoint?"

"Nope. Just me."

"You're sure?"

"I'm sure."

"OK. If you change your mind, let us know."

Exchanges like this make me pause and wonder if something is wrong with me.

During the past 30 years I've given hundreds of speeches. Whether I was presenting to a giant corporation, nonprofit organization, university or professional association, the event planner seemed almost speechless, even distressed, that I would be delivering my message sans PowerPoint.

Best China Stocks To Buy For 2014

Malala Yousafzai's quiet but forceful voice for educating girls was not stilled even after she was shot.(Photo: Andreas Rentz, Getty Images)

Sure, slides make sense if you're presenting a workshop that covers scores of points and detailed processes.

But for a speech intended to inspire, entertain, influence and leave the audience with a few key points to apply to their lives? Why do you need slides?

You've got the speaker live, making eye contact, and at times interacting.

In recent years, I can remember showing only one slide during a speech — a photograph of my dog with his ball that supported a point I was! making about letting people know what you want.

I have tried to impart this "give up your PowerPoint and just give a great speech" philosophy to my clients who sometimes ask me to observe a talk they're giving. They'll bring 100 people together in a room, stand up on a stage and talk while they show slides with bullet points, complete sentences, graphs and statistics.

My feedback: "Do you want your audience to listen to you or read the slides? They can't do both. Do you want them to fall asleep or be inspired?"

It's not that PowerPoint presentations are a bad thing. But for many speakers, they are a crutch.

And for the audience, they become a distraction.

Just look at some of the best speakers. In their annual top 10 list of best communicators, Decker Communications named Nelson Mandela as No. 1.

In this picture provided by the Vatican newspaper L'Osservatore Romano, Pope Francis engages with his audience, speaking with a child during his three-hour visit Dec. 21, 2013, to Bambino Gesu' pediatric hospital in Rome.(Photo: AP)

No PowerPoint there.

He was an incredible speaker because, as they point out on their blog, he was genuine and sincere. He made people care.

He was the same man behind the podium as he was one-on-one: himself, always smiling, always likable. Decker Communications cites The New York Times, which said, "He shook every hand as if he was discovering a new friend and maintained a twinkle in his eye that said, 'This is fun.' "

Tied with Mandela for first place is Malala Yousafzai, the Pakistani 16-year-old who survived an assassination attempt. She is articulate, focused, energetic and inspiring. You can't help but like her. Even without slides.

In third! place is Pope Francis, who uses no PowerPoint but focuses on connecting with people. He exudes humble confidence, which as the blog points out: It's how he is.

In fifth place is Blake Mycoskie, founder of Toms, a company that creates shoes based on a casual Argentine design and for every pair sold gives away a pair to an impoverished child. Likeable and down to earth, he uses a few slides in a speech, but they are photographs that support his point.

If you give speeches, consider laying down your PowerPoint. Instead, bring your excitement about your subject, three or four key points and compelling stories to illustrate them.

Most of all, bring yourself.

Toms Shoes founder Blake Mycoskie speaks during the launch of the One For One TOMS eyewear line in 2011 in Santa Monica, Calif.(Photo: Michael Kovac, Getty Images)

2013's 5 best — and worst — communicators

Decker Communications, which coaches senior executives and managers to be good speakers, has five more of the best and worst on its blog.

The best

1. (tie) Nelson Mandela, former South African president; Malala Yousafazi, Pakistani schoolgirl who survived an assassination attempt

2. Dick Costolo, Twitter chief executive

3. Pope Francis

4. Astro Teller, head of Google X

5. Blake Mycoskie, founder of Toms shoes and eyewear

A speaking style not to emulate: James Clapper, director of national intelligence(Photo: Jim Watson, Getty Images)

The worst

1. James ! Clapper, ! national intelligence director

2. Paula Deen, celebrity chef

3. (tie) John Boehner, speaker of the House; Harry Reid, Senate majority leader

4. Dennis "Chip" Wilson, Lululemon Athletica founder

5. (tie) Mike Rice, former Rutgers basketball coach; Richie Incognito, Miami Dolphins lineman

Source: Decker Communications

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 Twitter: @AndreaKayCareer.

Thursday, January 16, 2014

Why Are U.S. Businesses Still Hoarding $1.5 Trillion in Cash?

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Stack of One Hundred Dollar Bills in Bank VaultAlamy For years -- ever since the Great Recession ended -- pundits have been pontificating about a strange trend in corporate America. Despite earning record profits, and having the ability to borrow cash easily, companies were refusing to spend. Like Scrooge in his office, they were raking in profits ... and then sitting on them, refusing to put the money to work to grow the American economy. Or so the story went. But was it true? it true? It turns out that this real story is a bit more complicated; and you'll be surprised where a lot of that cash came from ... and what it needs to be spent on. A Kernel of Truth Every complex tale grows from a kernel of truth, of course, and this one actually grows out of two such kernels. It's true that American corporations are fabulously profitable today. According to the Department of Commerce, profit margins at U.S. companies in 2013 were regularly hitting levels of 9.3 percentage points -- more than 57 percent higher than average over the past 60 years. Also true is that these profits, in turn, yielded a lot of cash for the corporations earning them. From 2006 through mid-2013, total cash reserves at U.S. nonfinancial companies (i.e., everything but banks) nearly doubled, rising from $820 billion to $1.48 trillion, an 81 percent increase. Credit ratings company Moody's (MCO) recently estimated that cash levels at the end of 2013 probably hit $1.5 trillion.

Wednesday, January 15, 2014

Why Tesla Motors Inc. Stock Has Become Electrified Again

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of electric-car maker Tesla (NASDAQ: TSLA  ) are being driven higher following reports that it delivered 6,900 vehicles in the fourth quarter.

So what: The final tally of 6,900 deliveries represents 25% more than the third quarter and over 15% more than the amount Tesla guided for. In its third-quarter-earnings release, the company stated that it expects to deliver "slightly under 6,000" vehicles.

Now what: This announcement follows Tesla's trend of under-promising and over-delivering, in this case literally. An extra 900 vehicles priced around $100,000 each adds over $90 million in extra revenue for the company in the fourth quarter. 

With Tesla forecasting 25% gross profit margins, it's reasonable to expect at least an extra $22.5 million in gross profit, most (if not all) of which should find its way to the bottom line, potentially adding $0.18 per share.

Analysts forecast earnings per share of $0.15, so it is very possible that earnings may top this estimate by more than double.

Tesla last quarter guided for 21,500 total vehicles delivered for 2013, and the company plans for a production run of 40,000 vehicles by end of 2014. Now, the actual total for 2013 is 22,400, and the run rate for the fourth quarter should be 27,600, so it would seem that the target for 40,000 deliveries in 2014 is off to a good start, especially considering that it isn't until the second quarter of 2014 that Tesla expects the larger boost from production capacity.

Look for analysts to upgrade their estimates, and for Tesla to offer even higher estimates, for the first quarter of 2014 and the full year. While even $0.30 earnings per share for the fourth quarter would still suggest that Tesla is richly valued, both the top and bottom lines stand a chance of accelerating, and it could be only a matter of time before earnings begin to catch up with valuation. Tesla may not be for everybody on the long side, but cautious Fools should avoid betting against Tesla.

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Tuesday, January 14, 2014

Wall Street stock futures trade higher

Stocks were higher in early trading Tuesday rebounding from the previous day's sell-off as investors turn their focus to bank earnings and retail sales.

The Dow Jones industrial average was up 0.2% to 16,281 and the Standard & Poor's 500 index gained 0.3% to 1,824. The Nasdaq composite index jumped 0.4% to 4,131.

JPMorgan Chase, the biggest U.S. bank by assets, said Tuesday that its profit fell 7% in the fourth quarter, hampered by more legal woes and a decline in the bank's investment banking business. Shares were flat at $57.70.

Wells Fargo says its fourth-quarter profit rose 10% as increased interest income helped offset a steep drop in mortgage lending. Its stock was down 1.2% to $45.00.

Americans spent more on clothing and online in December. But they cut back almost everywhere else to end the holiday shopping season on a lackluster note. Retail sales rose 0.2% last month, the Commerce Department said Tuesday.

On Monday, the Dow fell 1.1% to 16,257.94. The Nasdaq composite dropped 1.5% to 4,113.30. The S&P 500 dropped 1.3% to 1,819.20.

MARKETS: Stocks, no longer cheap, hit the skids

Markets overseas took a hit after Monday's sell-off on Wall Street with Japan's benchmark index falling sharply.

Japanese stocks resumed trading after a holiday Monday, with the Nikkei 225 plunging 490 points, or 3.1%, to 15,422.40. Hong Kong's Hang Seng index fell 0.4% to 22,791.28.

"Equity markets and risk assets in general are having a decidedly shaky start to the year," Mitul Kotecha, head of global markets research for Asia at Credit Agricole CIB, said in an email.

In Europe, Britain's FTSE 100 index was down 0.1% to 6,752. Germany's DAX index fell 0.3% to 9,480 and France's CAC 40 index dropped 0.5% to 4.243.

In energy markets, benchmark crude for February delivery was up 75 cents to $92.55 in electronic trading on the New York Mercantile Exchange. The contract fell 92 cents to close at $91.80 on Monday.

Contributing: Associated Press

Sunday, January 12, 2014

Can Nike Continue This Bull Run?

With shares of Nike (NYSE:NKE) trading around $66, is NKE 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

Nike is engaged in the design, development, and worldwide marketing and selling of footwear, apparel, equipment, accessories and services. The company sells its products to retail accounts, through retail stores and Internet sales, and through a mix of independent distributors and licensees around the world. Nike focuses its product offerings in seven key categories: Running, Basketball, Soccer, Men's Training, Women's Training, Nike Sportswear, and Action Sports. It also markets products designed for kids, as well as for other athletic and recreational uses.

Recently, Nike delivered earnings and revenue figures that beat Wall Street's expectations. Looking around, many consumers and companies are advocating and opting for a lifestyle that involves more outdoor and physical activity. As this movement continues, Nike is a company that is poised to see increased demand.

T = Technicals on the Stock Chart are Strong

Nike stock has been flying higher over the last several years. The stock is now trading near all-time high prices and does not look like it wants to slow down. 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, Nike 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 Nike options may help determine if investors are bullish, neutral, or bearish.

Implied Volatility (IV)

30-Day IV Percentile

90-Day IV Percentile

Nike Options




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

Put IV Skew

Call IV Skew

August Options



September Options



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 small amount of call and put option contracts and are leaning neutral to bullish over the next two months.

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

E = Earnings Are Improving 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 Nike’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for Nike look like and more importantly, how did the markets like these numbers?

2013 Q1

2012 Q4

2012 Q3

2012 Q2

Earnings Growth (Y-O-Y)





Revenue Growth (Y-O-Y)





Earnings Reaction


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Nike has seen improving earnings and rising revenue figures over the last four quarters. From these numbers, the markets have been upbeat about Nike’s recent earnings announcements.

P = Average Relative Performance Versus Peers and Sector

How has Nike stock done relative to its peers, Under Armour (NYSE:UA), Crocs (NASDAQ:CROX), Deckers Outdoor (NASDAQ:DECK), and sector?


Under Armour


Deckers Outdoor


Year-to-Date Return






In a very strong sector, Nike has been an average performer, year-to-date.


Nike provides athletes and beginners alike with athletic and fitness footwear, apparel, and related products. The company recently reported earnings that has sat well with investors. The stock is currently consolidating near all-time high prices and looks poised to head higher. Over the last four quarters, investors in the company have been upbeat as earnings have been improving while revenue figures have been rising. Relative to its very strong peers and sector, Nike has been an average year-to-date performer. Look for Nike to OUTPERFORM.

Saturday, January 11, 2014

Why Wendy's Shares Got Gobbled Up

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Wendy's  (NASDAQ: WEN  ) climbed 10% today after the fast-food restaurant operator posted strong quarterly results and announced a plan to sell about 425 restaurants by mid-2014. 

So what: The stock has soared over the past year on optimism over its rebranding initiatives, and today's second-quarter results -- EPS of $0.03 on a 260-basis-point operating margin increase -- only reinforce those good vibes. Additionally, management's decision to sell 425 company-owned restaurants to franchisees should give Wendy's a much more stable revenue stream from a higher percentage of royalty and rent income. 

Now what: In connection with the sales plan, Wendy's approved a 25% bump in its quarterly dividend and also authorized a share repurchase program for up to $100 million. "The dividend increase and share repurchases are important elements of our financial management strategy," CFO Steve Hare said. "We are committed to continuing to deploy capital to drive the organic growth of our restaurant business, in addition to returning cash to shareholders." With the stock now up a whopping 80% over the past year and trading at a forward P/E of 30, however, much of that growth might already be baked into the valuation.  

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Friday, January 10, 2014

Abercrombie & Fitch: Turning Over a New Leaf?

This post is about Abercrombie & Fitch (ANF) but first, a true story: In college, I tried to date a woman, but let’s just say she wasn’t interested. At least that is, until summer break rolled around, I cut my hair (it had been down my back, making me look like Dave Grohl from Nirvana if you’re feeling charitable, Chewbacca if you’re not), and came back to school a new man. Nothing had really changed, but she was finally interested.

Bloomberg News

Why do I bring this up? Because of Abercrombie & Fitch, which, until yesterday, wasn’t feeling much love. Its shares had dropped 28% during the past 12 months, while just a third of analysts rated it a buy. Activist investors were calling for the head of CEO Mike Jeffries.

How much perceptions change in a day. Last night after the close, Abercrombie & Fitch said that same-store sales fell less than forecast, while the teen retailer boosted its full-year guidance to a range of $1.55 to $1.65 a share, up from $1.40 to $1.50. Shares, needless to say, popped.

Shares of Abercrombie & Fitch have gained 11% to $36.78 today, even as Aeropostale (ARO) has dropped 5.2% to $8.50, and Zumiez (ZUMZ) has fallen 5.6% to $22.85. Wet Seal (WTSL), meanwhile, has gained 0.8% to $2.60 and American Eagle Outfitters (AEO) has advanced 0.9% to %15.46.

The question now: Has Abercrombie really turned it around? Stifel’s Richard Jaffe and team aren’t so sure. They write:

Management is playing good defense: significantly trimming a bloated expense structure, closing underperforming stores, focusing growth on accretive channels (international and e-commerce) and increasing speed to market. However we believe management remains focused on its "clearly defined aesthetic" of an aspirational, New England prep-inspired teenager which we believe is no longer relevant today. Additionally, management is reducing SKU counts and increasing depth of merchandise in an era where successful retailers are doing the opposite as consumers demand numerous choices and increased newness. This supports our belief that [Abercrombie & Fitch] will likely continue to struggle to gain relevancy in today's saturated retail market.

William Blair’s Amy Noblin and Jared Lubel are feeling more positive about Abercrombie & Fitch’s future:

We believe the company is in the early stages of implementing a sound turnaround plan that can drive meaningful profit recovery over the long term. We still see value in the brands and their global potential; thus, while we expect the turnaround to take time, particularly given the muted environment for teen spending, we see value for long-term investors with the stock at 14 times fiscal 2014 (ending January 2015) earnings and significant opportunity for profit improvement.

Janney’s Adrienne Tennant and Gabriella Carbone believe that Abercrombie’s stronger sales are a sign that the “brand still resonates,” and upgrade its shares to Buy. They explain why:

Despite the highly promotional retail environment the company was able to exceed their expectations quarter-to-date. The company noted that fall season carryover inventory levels are well controlled as they move into the new season. We are seeking ways to play a downtrodden Softlines space for 2H14, when we believe sectorwide inventory will be cleaner on a year-over-year basis, allowing for margin expansion. We believe the teen names have been the most beaten up and look for evidence of improving comp performance and ability to meet and possibly beat estimates in 2014, with the most opportunity in the back half of 2014. We believe [Abercrombie & Fitch] and [American Eagle Outfitters] are both names that fit the profile of attractive risk/reward names for 2014.

So what do you think? Is this a new Abercrombie & Fitch or has it just cut its hair?