Eneryg Stocks To Invest In 2013, Best Energy Stocks For 2013: April 2014

Wednesday, April 30, 2014

What Went Wrong With Coal's Biggest Player?

Peabody Energy (NYSE: BTU ) is the largest and most diversified publicly traded pure-play coal miner. Its first quarter loss of nearly $0.20 a share doesn't inspire confidence in the broader coal market's future. But the company's global footprint does provide a glimpse of what's going on throughout the industry.

Met coal's stranglehold
A year ago, Peabody lost $0.09 a share in the first quarter. Management had been calling for earnings to fall between $0.14 a share and a loss of a dime. They obviously missed their estimate, though some of that was from one-time items. The biggest detractor, however, was continued supply-driven pricing pressures in metallurgical coal.

(Source: CIA)

Peabody only mines met coal in Australia, where coal revenues fell around 17% in 2013 despite selling nearly 6% more tons of coal from the region. The big problem was an over 20% drop in revenues per ton, largely driven by the oversupply of met coal. The company's Aussie business hasn't improved, with revenues per ton down about 17% year over year in the just-ended quarter.

That pairs nicely with what's going on at domestic player Natural Resource Partners (NYSE: NRP ) , which cut its dividend by 36% in early January because of continued weakness in the coal market. However, in an April presentation it gave an update on the market that helps to clarify where the problem lies. The thermal outlook was generally positive, but the first two bullet points on the met side were, "Prices at lowest level in several years" and, "Market is currently being overproduced." So the outlook for Peabody's Aussie operations through the rest of the year isn't great.

It's no wonder that Natural Resource Partners has been buying into non-coal assets in recent years. Those businesses accounted for around 30% of the top line in 2013, up from about 5% in 2005. And that number should get even larger this year as recent investments in natural gas assets should lead to a doubling of revenues from the relatively new gas segment.

Thermal goodness
The diversification effort should lead to a relatively solid first quarter for Natural Resource Partners -- especially since the company's outlook for thermal coal is actually pretty constructive. For example, management highlighted the cold winter, low utility inventories, an increase in natural gas prices, and foreign demand as positives. This suggests that the domestic thermal downturn might actually be nearing an end.

(Source: XTUV0010 via Wikimedia Commons)

In fact, during Peabody Energy's fourth quarter conference call, CEO Gregory Boyce noted, "PRB prices were up nearly 40% from their lows of last year." Based on Natural Resource Partners' April update on the thermal market, it's no surprise that U.S. thermal coal was actually a positive for Peabody, with a 10% jump in PRB shipments offsetting an overall 7% price decline in its U.S. business (the company also mines in the Illinois Basin).

The PRB accounted for almost 40% of revenues in 2013. Moreover, Peabody produced over 4.5 times as much coal from its PRB business as it did from its Australian met mines, its second largest operating segment. So, even a small price increase in the PRB will do a lot of good through the rest of the year. Keep an eye on this region and its impact on Peabody's business.

That's less true for Natural Resource Partners, which has relatively little exposure to the PRB. In fact, met coal is the partnership's largest revenue source at around 25% of the top line -- thus the dividend cut despite continuing diversification efforts and the signs of a nascent turnaround in the U.S. thermal coal market.

Listen to the words
At the end of the day, Peabody's update on the coal market is probably more important than its weak earnings result. The big news is that the PRB appears to be signaling a U.S. thermal coal rebound. That would be good for all of the domestic miners, particularly if it starts to spread to the other major coal basins. The other big news is that metallurgical coal is still struggling. That, unfortunately, means continued headwinds for Peabody and Natural Resource Partners.

Coal may be in trouble, but this energy boom is just getting underway
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Tuesday, April 29, 2014

Investing in J.M. Smucker for Long-Term Growth Is Not a Good Idea

Coffee prices have decreased over the last few months after a large increase in 2011. This benefited coffee sellers, which had been fighting the pressures of rising coffee costs. The price drop has also benefited coffee drinkers since the coffee sellers passed the benefits on to their customers by lowering their coffee prices.

However, the news has not been all happy for J.M. Smucker (SJM), which manufactures branded-food products. Its third-quarter numbers came in below analysts' expectations, which sent its stock price down.

The Problem

J.M. Smucker's revenue for the quarter plunged 6% from the year-ago quarter to $1.47 billion. This decline mainly came as a result of lower selling prices which affected the company's revenue from coffee (8%) as well as its U.S. foods segment (4%). Also, the company's planned exits from some parts of the international, foodservice, and natural foods segment lowered its top line.

Although volumes in the Dunkin Donuts coffee business and the Folgers brand surged 8% and 4%, respectively, volumes in other segments declined, such as peanut butter which decreased mainly because of competitive pressures from other players.

Despite the decline in revenue, J.M. Smucker's earnings increased to $1.66 per share from $1.47 per share in the year-ago period. This mainly occurred because of lower commodity costs and efficient cost-management efforts undertaken by the company. Lower input costs also led to a widening of the gross margin to 37.2% from 34.4% in the year-ago period.

Changing Preferences

Consumer tastes and preferences have changed as shoppers shift toward healthier and natural food options. As the popularity of organic and natural food increases, other vendors have also jumped into providing such items. Therefore, J.M. Smucker acquired Enray in August last year. Enray provides premium and organic grain products and Smucker's acquired it in order to strengthen its existing natural-food portfolio. Also, the company expects that the buyout will add $45 million to its revenue every year.

Similarly, peer General Mills (GIS) made a few additions to its business in order to enhance its presence in the growing healthy food market. Its acquisitions included Food Should Taste Good in February 2012, Yoplait in May 2012, and Yoki Alimentos in August 2012. It has also introduced new products such as Old El Paso and Fiber One lemon bars in order to attract more customers. Despite such efforts, General Mills has not been able to increase its top line, as its latest quarterly results could not meet investors' expectations. However, the branded-food company plans to add more products and control its costs so it affirmed its previously given outlook.

On the other hand, food manufacturer TreeHouse Foods (THS) has witnessed higher demand for its products. Its fourth-quarter revenue surged 11.4% over last year as revenue clocked in at $660.3 million. The acquisitions of Cains Foods and Associated Brands last year and an increase in volumes drove this revenue gain. The company also recently acquired Associated Brands, which added to its private-label food product portfolio. Also, TreeHouse's launch of specialty teas enabled it to expand its single-serve coffee business. Hence, this company provides tough competition to other food players.

Points for the Future

Although J.M. Smucker posted disheartening numbers and faces stiff competition from its peers, it has made certain moves which can turn things around. Along with the benefits of its acquisitions, Smucker plans to launch some new products which should attract customers.

The retailer plans to introduce blended fruit pouches in its snacks segment. The company will launch these products under the name of J.M. Smucker's Fruitful and they will enhance its fruit-spreads product category. This shows the company's efforts to cater to the health-conscious needs of consumers.

The company has also developed stronger marketing campaigns with more impact. In order to increase consumer interest, J.M. Smucker has sponsored eight Olympic champions who will be featured in all of its promotions and advertisements. Hence, this should benefit the food retailer.

However, the company did lower its outlook for the current fiscal year. It now expects its annual revenue to decrease by 5% and expects earnings in the range of $5.55 to $5.60 per share. Its guidance provided earlier called for a 2% decline in revenue and earnings between $5.72 to $5.82 per share.

Conclusion

Along with the lower-than-expected numbers, the lowered outlook added to investors' disappointment. It is difficult to say how J.M. Smucker's efforts will result in future benefits. At present, a dull quarter, increased competitive pressure, and a lowered outlook offer reasons enough to stay away from this food company.

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Don't Make This Investment Choice Before Reading This First

When I first decided that these super-popular investments might have a place in my portfolio, I spent about six months learning about them and then another six months investing in them to determine how I wanted to use them in my portfolio.

I'm definitely not alone in looking into them. Thousands of Americans have asked themselves the same question I did, and many others are considering their answers right now.

But the reality is that it can be a little overwhelming to decide on your final answer. After all, your decision could mean moving away from an investment that's been the cornerstone of your portfolio -- as well as the portfolios of millions of other Americans -- for years.

So what's this burning question?

Mutual Funds Or Exchange-Traded Funds (ETFs)?
There are many different things to consider, such as tax treatment, costs and legal structure. Looking back at what I have learned, I have decided it comes down to three factors you should consider when deciding which one is right for you.

Let's look at each of these.

1.The Purpose Of Your Investment

First, understand the purpose of your investment. Is it a long-term core holding that you are not going to be trading out of? Is it a market play? Are you looking to just get in and get out? Is it a temporary allocation that you might want to adjust within the next year or two?

How you answer these questions is crucial. And if you haven't answered them yet, then you should do so before you move on.

2. How You Plan To Buy The Investment

This one is crucial as well. Are you using a lump sum to get in the market, or are you investing on a regular monthly basis?

Additionally. are you going to reinvest any dividends, or do you just want the cash? Reinvesting dividends is a key part of the investment strategy for many investors, including my colleague Amy Calistri, editor of StreetAuthority's Daily Paycheck newsletter.

After you know what the purpose is and how you are going to buy, then you can begin to narrow in on a decision.

First thing to consider is liquidity issues. If you are investing in a thinly traded area such as an individual country investment, you might not have as much liquidity in an ETF as you would in a mutual fund. Because an ETF is traded like a stock, you will need to have someone on the other side to buy, thus when the market is down, it could be hard to find a buyer. Meanwhile, a mutual fund will typically have the cash on hand to buy your shares.

3. Costs

Costs can destroy your return, so you should evaluate every possibility. When looking at your two investment options, two fees come into play: transaction! fees to ! purchase and management fees. Using the information that you determined on your purpose and how you are going to buy, come up with an estimated cost per each type of transaction.

For example: An ETF will have a transaction fee to buy the shares plus a management fee. This might look like $7.95 per trade plus 0.06% per year and a sales transaction fee of another $7.95. Meanwhile, your mutual fund might have no transaction fee and a management fee of 1.25%.

Don't forget fees for reinvesting dividends and mutual fund loads. Both of these will cost you more money if you need to pay to reinvest the dividends or get hit with a sales fee. (The fee for reinvesting is different for every brokerage company, so ask.) Tally all the costs for each approach and select the cheapest long-term option.

For example, if you are going to use a lump sum of money to add to your core index holdings that you will keep for at least 10 years, an ETF will allow you to pay one fee to get in with a much lower yearly management fee. That makes your costs less than a mutual fund's fees, which would have no upfront transaction fees but would come with a higher management rate over the long term.

However, if you prefer to have your dividends automatically reinvested and your brokerage won't reinvest for free, then you might want to go with the index mutual fund that will automatically and for free reinvest the dividends.

Action to Take --> One final thought: I use the dividends from my ETF products to rebalance my portfolio; that way, I avoid automatic transaction fees. If I have to buy and sell to balance my portfolio, I transact two fees. However, if I use my dividends to change my allocations, I avoid the sales fee and just pay to buy.

This article originally appeared at InvestingAnswers.com
The Investing Question You're Probably Trying To Answer Right Now...

Monday, April 28, 2014

Should Investors Stay Away from Zynga?

With shares of Zynga (NASDAQ:ZNGA) trading at around $3.19, is ZNGA an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

C = Catalyst for the Stock's Movement

Zynga has been the butt of many jokes recently. Is this reputation justifiable? We'll take a look at many different factors and then form an opinion. We'll begin with traffic. Zynga's traffic has declined considerably over the past year. While there might be good excuses for this decline, they're still excuses. Over the past three months, pageviews have declined 13.37 percent. That's not terrible, but it's certainly not a plus. The good news is that time-on-site has increased 1 percent, and the bounce rate has declined 3 percent. In regards to current rank, Zynga ranks #893 globally and #840 in the United States.

According to HelpOwl.com, gamers have given Zynga a 2.38 of 5 rating, which is subpar. The most common complaints are poor customer service, unhappiness with changes to existing games, and game crashes.

According to Glassdoor.com, the company culture is average. Zynga has received a 3.1 of 5 rating, and 53 percent of employees would recommend the company to a friend. There are passionate reviews from both sides. Employees seem to either love or hate their job. Therefore, the company culture can't be classified as great.

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Let's take a quick look at some positives and negatives for Zynga.

Positives:

Recently beat earnings expectations Real-money gaming potential Filed for gambling license in Nevada Strong balance sheet

Negatives:

Slowing revenue growth Lacking profits Cautious guidance 30 percent decline in bookings last quarter Fierce competition, including established casino brands entering arena Weak margins Analysts don't favor the stock: 2 Buy, 18 Hold, 3 Sell (this is rare)

The chart below compares fundamentals for Zynga, Majesco Entertainment (NASDAQ:COOL), and Facebook (NASDAQ:FB). Zynga has a market cap of $2.40 billion, Majesco has a market cap of $23.88 million, and Facebook has a market cap of $66.15 billion.

	ZNGA	COOL	FB
Trailing P/E	N/A	N/A	1851.27
Forward P/E	N/A	29.50	35.60
Profit Margin	-9.80%	-5.87%	1.04%
ROE	-6.59%	-17.87%	0.64%
Operating Cash Flow	$143.40 Million	$5.48 Million	$1.61 Billion
Dividend Yield	N/A	N/A	N/A
Short Position	N/A	1.00%	7.50%

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

E = Equity to Debt Ratio Is Strong

The debt-to-equity ratio for Zynga is stronger than the industry average of 0.10.

	Debt-To-Equity	Cash	Long-Term Debt
ZNGA	0.05	$1.27 Billion	$100.00 Million
COOL	0.00	$26.76 Million	$0
FB	0.20	$9.63 Billion	$2.36 Billion

T = Technicals Are Mixed

Zynga has been a big loser over the past year, especially considering the strength of the market. However, the stock has performed very well year-to-date.

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	1 Month	Year-To-Date	1 Year	3 Year
ZNGA	-4.46%	36.02%	-62.32%	-1.83%
COOL	9.91%	-43.49%	-75.35%	-32.69%
FB	8.68%	4.43%	N/A	N/A

At $3.19, Zynga is trading below its 50-day SMA, but above its 100-day SMA and 200-day SMA.

50-Day SMA	3.39
100-Day SMA	2.99
200-Day SMA	2.96

E = Earnings Have Been Weak

Zynga has a difficult time delivering profits. Revenue has consistently improved on an annual basis, but the rate of growth has slowed considerably.

	2008	2009	2010	2011	2012
Revenue ($)in millions	N/A	121.47	597.46	1.14B	1.28B
Diluted EPS ($)	N/A	N/A	0.11	-1.40	-0.28

When we look at the previous quarter on a year-over-year basis, we see a significant decline in revenue but an improvement in earnings. The same can be said on a sequential basis. Many companies have inconsistent earnings, and some have small setbacks in revenue, but this type of revenue setback is a potential red flag.

	3/2012	6/2012	9/2012	12/2012	3/2013
Revenue ($)in millions	320.97	332.49	316.64	311.16	263.59
Diluted EPS ($)	-0.12	-0.03	-0.07	-0.06	0.00

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

T = Trends Might Support the Industry

Many states are broke. They will eventually look for any avenues possible to increase revenue streams. One of those avenues will be to legalize online gambling. This will be a plus for the industry, but it won't necessarily be a plus for Zynga. If this environment presents itself, then there will be many big players looking to get involved, and Zynga will be nothing more than an ant attempting to survive a marching band at a parade.

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Conclusion

Zynga was given a WAIT AND SEE rating the last time it was written about in this column. However, after delving a little deeper and reading gamer reviews, that rating will have to be downgraded. As far as poker goes, the potential is good, but it's still just potential. FullTilt had a lot more than potential and it failed miserably. Many other poker sites have also failed. Furthermore, Zynga's revenue growth has slowed considerably, the company culture isn't great, traffic has declined, and profits are harder to find than Waldo while reading by candlelight. Aside from real-money gaming potential (not just poker), there isn't much to like.

Sunday, April 27, 2014

Stocks to Watch: Tesla, Humana, Hospira

Among the companies with shares expected to actively trade in Wednesday’s session are Tesla Motors Inc.(TSLA) Humana Inc.(HUM) and Hospira Inc.(HSP)

Electric car maker Tesla Motors Inc. reported a narrower third-quarter net loss of $38 million and said it plans to expand production of its Model S sedans to meet rising demand in the U.S. and overseas. Though adjusted profit and revenue beat expectations, shares fell 11% to $157.25 in premarket trading as some had hoped for a bigger beat. The stock, meanwhile, has surged this year.

Humana’s third-quarter earnings fell 14% as the Medicare-focused insurer logged an increase in health-care and operating expenses, though membership continued to increase. Results beat expectations, but the company issued downbeat earnings guidance for 2014. Shares dropped 4.2% to $90 premarket.

Hospira’s third-quarter earnings rose 58% as the provider of injectable drugs and infusion technologies reported improved margins and higher sales for its Precedex sedative. Shares jumped 7.4% to $42.96 in light premarket trading as results topped Wall Street estimates.

Time Warner Inc.(TWX)'s third-quarter earnings jumped 44% as the media company’s cost cutting and asset gains helped make up for essentially flat revenue. The bottom line easily topped expectations, but the company kept its guidance for the year intact. Shares rose 2.2% to $69.75 premarket.

Abercrombie & Fitch Co.(ANF) appears to be in for a blue Christmas as the teen-apparel retailer reported a double-digit drop in sales for the fiscal-third quarter and expects the same for the upcoming holiday period. In premarket trading, the stock dropped 6.7% to $35.75.

BioTelemetry Inc.'s(BEAT) third-quarter loss narrowed slightly as the wireless medical technology company logged volume growth in its patient services segment, in part due to its contract with UnitedHealth Group Inc.(UNH) Shares jumped 12% to $10.12 premarket as the company reported a surprise adjusted profit.

Chesapeake Energy Corp.(CHK) swung to a profit in the third quarter as the natural-gas company posted improved oil and natural gas liquids production and a decrease in expenses. Revenue beat estimates, pushing shares up 2.9% to $28.95 premarket.

Devon Energy Corp.(DVN) swung to a third-quarter profit as the exploration and production company reported improved prices for oil and gas sold, helping push revenue significantly higher. The bottom line beat estimates, pushing shares up 1.6% to $64.79 in light premarket trading.

M/A-COM Technology Solutions Holdings Inc.(MTSI) agreed to acquire semiconductor manufacturer Mindspeed Technologies Inc.(MSPD) in a deal valued at $272 million, expanding the company’s markets to include enterprise applications. Mindspeed shares surged 70% to $5.04 premarket.

Molson Coors Brewing Co.'s(TAP) third-quarter earnings fell 39% as the beer company’s results were hurt by a write-down tied to two European brands and revenue weakened slightly. Results were mixed as the bottom line beat views and the top line missed. Shares edged up 1.8% to $55 in light premarket trading.

Skin-health company PhotoMedex Inc.(PHMD) issued a dour third-quarter report as it didn’t log any consumer sales to its Japanese distributor, which changed its business model and affected other companies besides PhotoMedex. Unless it generates revenue from Japan, the company’s current-quarter sales are poised to fall short of consensus views. Shares dropped 10% to $11.47 premarket.

Renewable Energy Group Inc.(REGI) swung to a third-quarter profit due to strong sales of biodiesel, news that sent shares sharply higher as the results easily exceeded Wall Street’s expectations. The strong earnings report pushed shares up 14% to $13.45 in premarket trading.

Shares of Tangoe Inc.(TNGO) slipped after the software and services provider issued weak outlook targets for the fourth quarter and trimmed full-year expectations. Tangoe’s stock slid 13% to $16.50 premarket. Investors appeared to ignore the company’s third-quarter results, as profit more than doubled on rising revenue and gross margins.

Gas Prices Are Heading Up (and the Sector That Will Benefit)

The price of gasoline in the U.S. is on the rise again.

Futures prices for RBOB ("Reformulated Blendstock for Oxygenate Blending"), the NYMEX futures contract for gasoline, are up over 11% for the year, and a full 6.6% of that increase has come in the past month.

In fact, gas is up 2.4% over the past week alone. Today, the average retail price is 4 cents higher per gallon than a year ago.

And you can bet that as we move into the "official" start of the summer driving season, the worst is yet to come. Prices will be headed even higher.

So with all the hoopla surrounding our newfound oil wealth and our legitimate move to become energy self-sufficient in as little as a decade, why are gas prices still climbing?

Let me explain...

More Oil Doesn't Necessarily Mean Lower Prices

But first I need to clear the record about what this new largess in unconventional oil actually means. Then I'll identify the two primary causes of higher gas prices, along with a third catalyst that is waiting in the wings.

Now it is quite true that the main element in the cost of refined products remains the price of crude oil. However, the reason America became so dependent upon foreign imports in the first place is that they were cheaper.

It was simply less expensive to produce abroad and transport than it was to extract from the declining conventional oil base inside the U.S.

By the time we reached the point where 68% of our daily oil needs were being met by imports, U.S. domestic production was largely coming from mature fields in what was rapidly becoming one of the most expensive places in the world to extract oil.

At the time, more than 60% of all daily U.S. production was coming from stripper wells. On average, these wells provide fewer than 10 barrels of oil a day while bringing up 15 to 20 barrels of water for each barrel of the crude.

Shale and tight oil is now completely changing that dynamic, although there are indications the cost of production is beginning to move up. Nonetheless, the financial attraction of importing has appreciably declined (along with a welcome rise in the security of supply).

By 2025, the U.S. is now projected to have cut its daily import needs by more than half from the highpoint only a few years ago. Only about 30% of that requirement will need to be imported. Additionally, just about all of the volume sourced will be coming in from Canada.

So that should allow us to parlay the newfound subsurface wealth into lower overall refiner product prices, right?

Well, in a single word, no.

First, while one side of the trading scale (imports) may be declining, the other (exports) is rising... and fast. Today, American refineries are now leading the world in the export of oil products, especially when it comes to gasoline and diesel.

Now, it's true. We do have fewer refineries than we had 20 years ago, but the aggregate production capacity has actually improved thanks to technological advances and increases in refining capacity at the remaining plants.

These refineries are also processing a larger cut of crude passing through them, and in many cases have been refurbished to process heavier grades of crude. This latter point becomes especially important with the oil sands product moving down from Canada.

Refinery capacity is stretched but is still within manageable limits.

However, the profitable move these days is for refineries to export product to parts of the world prepared to pay a hefty premium over U.S. consumers. This is not creating any shortage of gasoline in the U.S., but it does put an upward pressure on prices.

And yes, some pundits are already calling for an "America first" strategy in this case, with the cost as the deciding factor. They are calling for a cut in exports of gasoline - not because we have a dearth of volume available domestically - but because it costs a few cents more a gallon at the pump. But attacks like this on a free market system will always result in remedies that are far worse than the disease.

Second, we are finally starting to see a rise in U.S. demand, matching increases already experienced elsewhere in the world. This global acceleration has been the main reason why exports have become more profitable for American refineries.

The demand improvement itself is a result of two primary factors.

One is an improving economy. The other is that the U.S. is now working through the last vestiges of downward pressures brought on by the recession. Finally, pent up industrial and commercial demand is kicking in, matching the steady improvement in retail consumer usage levels.

But this demand is still not close to the levels experienced before the credit crunch hit. That means there will be additional increases headed our way and further rounds of upward pressures on gasoline prices.

Biting the Bullet on Higher Gas Prices

So we are likely to be flirting with $4 a gallon gasoline again by midsummer. But this time, it's going to be different. Most Americans are going to bite the bullet and pay it.

The reason is simple: Employment prospects for most people have improved. That wasn't the case not too long ago.

In late 2008 and early 2009, the collapse in the price of gasoline was the result of a significant contraction in economic opportunity. Then, a guy could finally afford to put gas in his SUV, but he no longer had a job to drive to.

And what of that third lingering cause?

It's simple. The rise in domestic crude oil production is outstripping the ability of the infrastructure to store and process it.

That's why you shouldn't be surprised if the government begins to approve exports of the oil itself. Currently, that is essentially only allowed for the California heavy crude that does not have a sufficient domestic market.

But, as we have discussed previously, the use of tolling is likely to be phased in. This is the process of providing raw material (in this case crude oil) for processing elsewhere and then importing it back in as a processed product.

This is how the trading cycle, now centered on the export of oil products, will expand to include the export of oil itself. It is also how American refineries will cope with a double whammy -wanting to export but needing to satisfy an expanding domestic market. Refined products imported from one region will then figure in the export of the same products to others.

Refinery margins (the difference between the cost of production and the wholesale price; the actual source of refinery profits) will decide the direction of this trade flow.

In the end, this will support higher gas prices.

But it's not all bad news. It will also provide a better return for investors in the pivotal refining sector.

Saturday, April 26, 2014

Will Changyou.com Beat These Analyst Estimates?

Changyou.com (Nasdaq: CYOU ) is expected to report Q2 earnings on July 29. Here's what Wall Street wants to see:

The 10-second takeaway
Comparing the upcoming quarter to the prior-year quarter, average analyst estimates predict Changyou.com's revenues will increase 24.3% and EPS will expand 1.5%.

The average estimate for revenue is $183.1 million. On the bottom line, the average EPS estimate is $1.37.

Revenue details
Last quarter, Changyou.com booked revenue of $177.6 million. GAAP reported sales were 30% higher than the prior-year quarter's $136.8 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
Last quarter, non-GAAP EPS came in at $1.45. GAAP EPS of $1.46 for Q1 were 20% higher than the prior-year quarter's $1.22 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Recent performance
For the preceding quarter, gross margin was 83.1%, 130 basis points worse than the prior-year quarter. Operating margin was 57.2%, 120 basis points worse than the prior-year quarter. Net margin was 43.7%, 400 basis points worse than the prior-year quarter.

Looking ahead

The full year's average estimate for revenue is $743.9 million. The average EPS estimate is $5.70.

Investor sentiment
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 186 members out of 215 rating the stock outperform, and 29 members rating it underperform. Among 37 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 31 give Changyou.com a green thumbs-up, and six give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Changyou.com is outperform, with an average price target of $36.07.

Software and computerized services are being consumed in radically different ways, on new and increasingly mobile devices. Many old leaders will be left behind. Whether or not Changyou.com makes the coming cut, you should check out the company that Motley Fool analysts expect to lead the pack in "The Next Trillion-dollar Revolution." Click here for instant access to this free report.

Add Changyou.com to My Watchlist.

Rambus Inc. (RMBS) Q1 Earnings Preview: Strong, But Will It Be Strong Enough?

Rambus Inc. (NASDAQ:RMBS) will hold a conference call on April 21, 2014 at 2:00 p.m. Pacific Time to discuss its first quarter 2014 results. This call will be webcast and can be accessed via Rambus' web site at investor.rambus.com.

Wall Street anticipates that the memory chip maker will earn $0.03 per share for the quarter, which is $0.12 more than last year's loss of $0.09 per share. iStock expects RMBS to miss Wall Street's consensus number. The iEstimate is $0.02, a penny less than expected.

Sales, like earnings, are expected to grow, rising 8.4% year-over-year (YoY). Rambus' consensus revenue estimate for Q1 is $72.45 million, more than last year's $66.87 million.

[Related -Rambus Inc. (RMBS): Worth The Risk?]

The company's technology solutions include memory, chip interfaces and architectures, end-to-end security, and advanced LED lighting. It focuses on designing, developing, and licensing technology related to memory and interfaces; and providing various services, including know-how and technology transfer, product design and development, system integration, and other services.

The semiconductor has bypassed Wall Street's consensus estimate 11 of the last 16 quarterly checkups. The average bullish surprise is pretty big at 745% more than expected, which works out to an average of $0.17 more than the street's outlook.

Meanwhile, the five misses have been more dramatic, falling short of the mark by as much as -700%, as little as -3.33% while averaging 204% less than forecasted, which works out to -$0.06 less than anticipated.

[Related -Stocks Gain Ahead Of Fed Decision; FLIR Systems, Inc. (FLIR) Jumps]

Investors spilt their reaction to Rambus' last 16 quarterly announcements. Eight of the responses were green and red. Typically, the stock fell by -10.25% in the tree days surrounding eight of the last 16 while increasing by an average of 4.41% for the other eight announcements.

Rambus relies heavily on a handful of companies. Names like Samsung, SK hynix and Micron accounted for 62% of RMBS' revenue in 2013. So far, Micron had a strong quarter and Samsung guided in the middle of their previous guidance, but still strong YoY. That's probably why Wall Street believes Rambus's top and bottom lines are on the rise.

Rambus's financial health appears to be fit heading into Monday afternoon's announcement. Sales increased by 16% in 2013 while the cost of goods sold were up 17%. Of course, we'd prefer for the numbers to be flipped, but they are generally in-line. However, marketing, general and administrative costs falling 32% YoY more than made up the difference.

That being said, management also cut back on research and development. iStock would much rather see the line-item keep pace with revenue growth. Tomorrow could become an issue if you aren't investing in it.

Overall: Rambus Inc. (NASDAQ:RMBS) is positioned to have a strong quarter YoY; however, the iEstimates suggests it might not be as strong as expected.

STMicroelectronics Meets on the Top Line, Misses Where it Counts

STMicroelectronics (NYSE: STM ) reported earnings on July 22. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended June 29 (Q2), STMicroelectronics met expectations on revenues and missed expectations on earnings per share.

Compared to the prior-year quarter, revenue dropped. Non-GAAP loss per share increased. GAAP loss per share grew.

Gross margins contracted, operating margins increased, net margins shrank.

Revenue details
STMicroelectronics booked revenue of $2.05 billion. The 11 analysts polled by S&P Capital IQ looked for revenue of $2.07 billion on the same basis. GAAP reported sales were the same as the prior-year quarter's.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at -$0.06. The three earnings estimates compiled by S&P Capital IQ forecast $0.00 per share. Non-GAAP EPS were -$0.06 for Q2 compared to -$0.05 per share for the prior-year quarter. GAAP EPS were -$0.17 for Q2 against -$0.08 per share for the prior-year quarter.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 32.9%, 140 basis points worse than the prior-year quarter. Operating margin was -3.1%, 430 basis points better than the prior-year quarter. Net margin was -7.4%, 390 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $2.12 billion. On the bottom line, the average EPS estimate is $0.07.

Next year's average estimate for revenue is $8.39 billion. The average EPS estimate is $0.04.

Investor sentiment

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on STMicroelectronics is outperform, with an average price target of $10.42.

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Friday, April 25, 2014

Shares Of Growlife Down 50 Percent After Two-Week Halt

Related PHOT A Look At 2014's Leading Cannabis Stocks (Part II) Marketfy to Host the 1st Annual Cannabis Investor Conference

Shares of Growlife (OTC: PHOT) on April 10 were halted by the SEC for a period of two weeks due to "questions that have been raised about the accuracy and adequacy of information in the marketplace and potentially manipulative transactions in PHOT's common stock."

Since April 3, Growlife's Executive Vice President Robert Hunt has sold more than 500,000 shares of Growlife according to OTCMarkets.com.

A total of 7.7 million shares have been sold by insiders over the last six months compared to only 2.22 million shares bought.

Shares of GrowLife rose from just over $0.10 in the beginning of 2014, reaching a 52-week high of $0.78 on March 17.

It was not immediately known why shares were halted, as the SEC is not obligated to provide information to the company or shareholders. Many investors assumed that the insider selling activity following the large run-up in share price may prove to be the culprit.

Related: AnythingIT CEO Explains The Move Into The Marijuana Space

A press release issued by GrowLife on April 14 stated that the company does not know why shares were halted and that it is "actively engaged in outreach to the SEC in an effort to first understand and then address the concerns."

The press release further added, "all that said, GrowLife has no knowledge of any irregularities that may warrant a suspension of trading in our securities and the fact remains that the SEC ordered a trading halt."

The timing of the halt couldn't have come at a worse time as shares of Advanced Cannabis Solutions (OTC: CANN) were halted just two weeks earlier due to concerns "regarding whether certain undisclosed affiliates and shareholders of Advanced Cannabis common stock engaged in an unlawful public distribution of securities."

One day following GrowLife's suspension in trading, RXNB, a company that "possess proprietary, cutting-edge systems in the field of agriculture, applicable to medical marijuana," notified the board of directors of GrowLife that it plans to terminate its business relationship.

GrowLife has shown a willingness to address any shareholder concerns stemming from the halt. The company revealed on Thursday it has created shareholder hotlines and an email communication system to address shareholder questions.

"While information is still greatly limited, we want to have more resources available as more information emerges," said GrowLife CEO Sterling Scott. "Investors should also understand that our support staff has no additional information beyond what we have provided to the market via our recent shareholder letter and cannot opine as to future valuations of GrowLife's share price."

Benzinga has inquiries in to several brokerage houses for commentary on how the stock is trading.

Shares of GrowLife resumed trading on Friday at $0.12 and traded as low as $0.10 and as high as $0.28.

Shareholders are invited to use the following to contact GrowLife directly:

Shareholder Support Hotline: (866) 632-3111
Email: shareholdersupport@growlifeinc.com

Posted-In: Advanced Cannabis Solutions GrowLife Pot Stocks RXNB SEC Sterling Scott Trading HaltNews Markets Best of Benzinga

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Thursday, April 24, 2014

BD Fee Disclosures Have â€˜Wide Disparityâ€™: NASAA

A “wide disparity” exists among broker-dealers in how they disclose fees, and BDs are also using “questionable practices” in relation to fee charges and markups, according to a survey released Thursday by the North American Securities Administrators Association.

The state regulators found fee-disclosure documents ranging from one to 45 pages.

The survey, performed by NASAA’s Broker-Dealer Investment Products and Services Project Group, found that while BDs may be complying with “technical requirements” for fee disclosures, the firms’ “disclosures lose effectiveness when hidden in small print, imbedded in lengthy account opening documents, or varied in terminology that does not define the service provided.”

Broker-dealer customers, the survey concluded, “would benefit from greater consistency and transparency in the disclosure of fees,” and thus the group recommended that NASAA establish a task force “to work with industry in standardizing the language, placement and structure of fee disclosures similar to the approach taken in the banking industry.”

The group also recommended that NASAA work with the industry and the Financial Industry Regulatory Authority to adopt “model fee disclosures” that will provide investors with greater consistency and transparency as envisioned in FINRA Rule 2010 and “work with these same parties to holistically review broker-dealer markups to ensure investors are not charged unreasonable fees in violation of NASD Conduct Rule 2430.”

FINRA said in a statement to ThinkAdvisor that as NASAA notes in its survey report, "FINRA has been focused on disclosure of fees in retail brokerage accounts and individual retirement accounts for some time, and issued guidance as recently as last year." In addition, FINRA said that it is "currently in the process of revising its rules on fees and markups," and that "FINRA welcomes the opportunity to continue working on these issues with our fellow regulators to find ways to improve disclosures for investors."

Andrea Seidt, NASAA president and Ohio securities commissioner, noted in a statement that the report “raises concerns regarding the transparency and reasonableness of broker-dealer fee practices.” She added that state regulators “will be examining these issues more closely, but welcome the opportunity to work with industry to ensure that fees are reasonable and fairly disclosed to investors.”

NASAA’s survey was prompted by fines levied by the Connecticut Banking Department’s Securities and Business Investments Division in 2010 and 2011 against several broker-dealers for what were characterized on customer statements as “miscellaneous” charges and postage handling charges. These charges, however, concealed markups or profits for the broker-dealer.

FINRA also took action in 2011 against five broker-dealers for excessive postage and handling charges.

NASAA’s Broker-Dealer Investment Products and Services Project Group decided in the spring of 2012 to conduct its own survey of fee disclosures and types of fees charged by broker-dealers. The group members each surveyed five to nine broker-dealers (small, large, full service and retail) within their region.

While the survey consisted of a number of questions for purposes of its report released Thursday, the Project Group said that it narrowed its focus to two issues: fee disclosures and transfer fees.

The NASAA group provided an example of a BD that charged customers $500 to receive their securities in certificate form. However, the broker-dealer’s clearing firm only charged the BD $60 for the certificate, so the BD was charging a $440 markup, more than six times the certificate cost to the broker-dealer. /* .premium-promo { border: 1px solid #ddd; padding: 10px; margin: 0 10px 10px 0; width: 200px; float: left; } .premium-promo li, .premium-promo ul { list-style-type: none; margin: 0; padding: 0; } .premium-promo li { margin: 0 0 10px; padding: 0 0 10px; border-bottom: 1px dotted #ddd; } .premium-promo h3 { text-transform: uppercase; font-size: 11px; } .premium-promo h4 { font-size: 16px; } .premium-promo a { text-decoration: none !important; } .premium-promo .btn { background: #0069a1; border-radius: 4px; display: inline-block; padding: 5px 10px; clear: both; color: #fff; font-weight: bold; } .premium-promo .btn:hover { background: #034c92; } */ “According to the fee schedule with the clearing firm, the broker-dealer was able to add a customized markup to the certificate fee,” the group states in the report. “This finding prompted the Project Group to contact a clearing firm for a number of the broker-dealers in the survey pool to discern the difference between what the broker-dealer is charged by the clearing firm for various services and the fees that the broker-dealer ultimately charges its customers.”

In the outgoing transfer fee context, the report states that “markups were routinely in the 100% to 280% range.”

The report then cites NASD Conduct Rule 2430, which states that the fees imposed by broker-dealers on customer accounts must be reasonable for the services performed. Fees that are not reasonably related to services, or that are excessive, may violate state laws and FINRA rules.

The report found that initial fees disclosed by the BDs varied. The surveyed broker-dealers provided the fee disclosures on or with account statements, in separate booklets or mailings, on their websites, or in new account agreements. Most of the surveyed BDs presented the fees in a chart format; however, some used a narrative format. The fee disclosures were typically one-to-two pages in length, but in some cases the disclosures were five to seven pages.

As to disclosing fee changes, most of the surveyed broker-dealers indicated that fee changes are disclosed to customers at least 30 days in advance. The location of the fee change disclosures varied, with the surveyed broker-dealers providing fee changes on or with account statements, in separate mailings, or on their websites.

As to where a client might be able to find fee information, the NASAA group found that disclosures pertaining to fees ranged between a paragraph and seven pages in length. “The actual fee disclosure verbiage itself was sometimes buried within a document having an overall length of between one and 45 pages,” the report states.

Get Ready for Wall Street's Quarterly Shell Game

It's earnings season. In fact it's prime time for companies' first-quarter earnings.

For company players the game is about trying to beat analysts' estimates, to get your company's stock to pop so you look better than your reflection.

But, the game is rigged.

What! Another rigged game on the purposely muddied fields where Wall Streeters play?

Yep. Another rigged game.

And like high-frequency trading (HFT) and so many other "institutionalized" games on the Street that are sucking the life out of other people's dreams, it's not illegal.

This is the norm...

The game is called managed earnings, or managing earnings.

The most successful gamers play with a gusto that crosses over the legal border. They juggle their books to shove losses and profits into columns, drawers, and boxes depending on what their objective is for that particular accounting period.

Maybe they made too much money and want to hide some for another quarter where they don't make what analysts expect. Maybe they bury losses somewhere so they don't look as bad in a reporting quarter.

It's about manipulation.

That part of the game is illegal. But because it's merely accounting hocus pocus, the worst a company gets - when the facade of its magic show is blown - is a slap on the wrist.

If you want a history of how to play this part of the game to perfection, look how General Electric under Jack Welch, performed - I mean managed - their earnings. All I'll say is you just can't have your earnings come out to the penny quarter after quarter after quarter without internal prestidigitation.

While that locker room game is for seasoned pros, every company plays the field game.

On the field it's all about what analysts' estimates are.

If your company earnings beat what analysts expect, you're a winner. If your earnings fall short, you're a loser and so is your stock.

And where do these highly touted Wall Street analysts get their estimates from?

I'll tell you where, but you're not going to believe it...

They do their homework and study the company's business and sales and margins and everything else they have to look at to determine what they think a company is going to be earning that quarter.

Oh, and they talk to the company.

That's the real game: Talking to the company... And getting their take on their earnings.

For heaven's sake if all your big shot peers are putting out earnings estimates you don't want to be the only one who is wrong! That's why they all talk to the companies they cover.

It's a mutually beneficial game, for the most part. The analysts don't want to be too off the mark and companies want their earnings to come out better than the analysts' consensus estimates.

Of course companies don't want their earnings to be a negative surprise and come out far below the consensus. If that happens their stock gets clobbered. And that does happen - but not why you think.

The game for companies is to "guide" analysts they talk to. If they're having a bad quarter relative to a year ago and everyone is thinking they're doing well, their job is to guide analysts' expectations down. That's right, they tell analysts things aren't as good as they'd expected or hoped for. Then all the analysts, who don't want to look stupid, ratchet down their earnings estimates right before the company reports.

And presto! When earnings come out, miraculously, they "beat" consensus estimates and their stock pops higher.

It's manipulation. But it's not illegal.

The problem is that average investors don't understand the game. Earnings come out and they're better than the consensus, things must be good, right? Maybe.

What gets lost in translation is how much the analysts were guided. It's a regular phenomenon: Consensus estimates fall right before earnings reports come out.

The analysts should not be able to speak with the companies they cover. If the company wants to guide earnings expectations lower, they should post an SEC-filed statement for analysts to follow and the public sees for themselves.

Then when earnings come out, analysts should report their original earnings based on their estimates and the difference between original estimates and their ratcheted-down estimates.

News reports should have to display analysts' original consensus estimates at the beginning of the quarter and latest estimates and calculate the increase or decrease in the consensus. That way the public can see how the company did over the quarter relative to how it was expected to do - before it guided analysts' consensus estimates down WITHOUT TELLING THE INVESTING PUBLIC.

So far this quarter, the first quarter of 2014, analysts have lowered their growth estimates from the beginning of the quarter to right before companies started reporting by 5.6 percentage points.

Did you know that? Did you know that earnings estimates had been guided down so much? I doubt it. No one announces that. It's just an adjustment between the analysts and the companies they cover.

I'm not even going to get into how most of the big bank analysts don't just cover these companies... they work for them. On Wall Street they call that a symbiotic relationship.

So, how come companies miss ratcheted-down estimates and have to endure their stocks dropping as a result? Because if companies actually guided down enough they'd be torn between letting the cat out of the bag early and seeing unwanted headline news clobber their stock. They'd rather hope and pray the market will be strong when their crappy earnings come out and their stock will get lifted in a general euphoria.

It's a dirty game. It should be cleaned up.

More from Shah Gilani: The growing threat to capitalism is "socialism for the rich" - and it's the new normal. And there's only one thing that can put a stop to it...

Wednesday, April 23, 2014

Gannett Q1 revenue rises on Belo integration

Gannett Co., the parent of USA TODAY, said Wednesday first quarter revenue and operating income rose from a year ago following the acquisition of former competitor Belo, but quarterly net income fell as it incurred interest expenses related to the deal.

Reporting after its first full quarter of operating Belo's TV stations, Gannett said the net income attributable to the company for the three-months period ending March 30 declined 43% year-over-year to $59.1 million after accounting for $69.6 million in interest expense. But adjusted earnings per share of 47 cents beat analysts' estimates of 46 cents and were up from 37 cents a year ago.

Quarterly revenue for the McLean, Va.-based media company -- owner of 40 TV stations, 82 daily newspapers and a network of websites -- totaled $1.4 billion, a 13.4% gain from a year ago. Operating income rose 35% year-over-year to $204 million.

Shares of Gannett fell 0.33% Wednesday morning to $27.06.

The broadcasting division's revenue nearly doubled to $382.3 million as Belo's TV stations were integrated following the closing of the Belo deal in December.

"This was a terrific first quarter for Gannett, in which the fundamental changes we've been making to our business meaningfully impacted our top and bottom lines," said Gannett CEO Gracia Martore, in a statement. "An outstanding performance by our new broadcast stations fueled double-digit increases in both revenue and profitability in our Broadcast Segment."

Reflecting the continued sluggishness in the print business, publishing advertising revenues for Gannett -- still the company's largest source of revenue -- fell 4.8% from a year ago $501.3 million.

Circulation revenue for the publishing segment dipped 1.4% to $282 million.

The digital segment's revenue rose 2.8% to $179.7 million.

In recent years, Gannett has sought to diversify its business lines beyond newspapers and publishing, culminating in the acquisition of Belo for $1.5 billion. With the number of Gan! nett's TV stations now nearly doubled, the sharp rise in its first quarter broadcasting revenue was largely attributable to higher retransmission revenues.

Retransmission fees are paid by cable and satellite operators for the rights to include Gannett's TV stations in their TV lineup. Gannett's retransmission revenue for the quarter totaled $87.5 million, a 142% increase from a year ago.

Its NBC stations also generated about $41 million of advertising associated with the Winter Olympic Games during the quarter.

Fitch: ETFs Gain Bond Clout

How much of an impact are ETFs having on the bond market? A whole lot, according to a report from Fitch Ratings.

The report, titled “Bond ETFs: Rising Influence on High-Yield Markets,” says that “ETFs are playing a more significant role in U.S. fixed income markets, particularly the corporate high yield segment.”

Although U.S.corporate bond ETF assets total less than 2% of the U.S.corporate bond market, their influence on trading activity is relatively more significant. Average daily trading volumes (on a weekly basis) for the five largest high-yield corporate bond ETFs more than tripled from about $470 million in early May to more than $1.5 billion in early June.

The top U.S. listed high yield bond ETFs by assets are the iShares iBoxx $ High Yield Corporate Bond (HYG) ($14.34b), SPDR Barclays High Yield Bond (JNK) ($8.92b) and the PowerShares Senior Loan Portfolio (BKLN) ($5.31b).

Increasing share volume means that investors are shifting assets to and from high yield bond ETFs.

Fitch also notes that increased ETF trading volumes could potentially magnify aggregate bond market volatility. This occurs when ETF redemptions force the selling in the underlying bonds.

Research from the Federal Reserve Bank of New York suggests that an investor or dealer liquidation of more than $250 million in corporate bonds on a single day could negatively impact corporate bond prices.

The growing prominence of ETFs within U.S.fixed income markets, particularly corporates, has occurred with reductions in dealer inventories of corporate bonds. “This coincides with new U.S. and global financial regulations that have or will increase capital and liquidity requirements on bank trading activities,” says Fitch.

Tuesday, April 22, 2014

Nervous Investors Hold Markets Down

This afternoon at 2 p.m. EDT, the Federal Reserve's most recent meeting minutes are scheduled to be released. Over the past few months, as the Fed has begun to signal a possible slowing of its bond-buying program, investors have become nervous and sold off stocks and bonds. In the aftermath, the Dow Jones Industrial Average (DJINDICES: ^DJI ) and S&P 500 had both fallen nearly 5% from their all-time highs, and Treasury Bond yields had jumped dramatically higher as investors began to anticipate rising rates.

The rising T-Bill yields have caused mortgage interest rates to rise as well. A housing-related report released today showed that mortgage activity declined by 3% last week, which some are blaming on higher interest rates. While that may be the case, remember that last week was a short holiday week for most Americans, which may also explain the decline. Regardless, it will be interesting to see how the markets react to the minutes today and where interest rate go from here.

As of 12:55 p.m. EDT the Dow is just slightly lower, down 22 points, or 0.15%, while the S&P 500 is down 0.11% and the Nasdaq is up 0.2%. There's much more red than green on the Dow's big board right now, so let's take a look at a few of the losers.

Shares of Home Depot (NYSE: HD ) are down 0.4%, likely due to the decline in mortgage activity last week. The home improvement store performs better when housing prices are moving higher and there is a good flow within the housing industry. As more homes are sold, whether they are new or pre-owned, Home Depot will likely see increased foot traffic in its stores as the new owners change and customize their homes.

Bank of America's (NYSE: BAC ) 1.3% loss likely owes to the slowing mortgage business as well. Since the financial crisis ended and the big banks came under tougher regulations and restrictions, we have seen Bank of America and JPMorgan Chase (NYSE: JPM ) move more into the mortgage business and reduce their exposure to other parts of banking and investing. Both the Dow's banking stocks now rely heavily on the revenue they derive from the mortgages, so if the business begins to falter, we will likely see revenue and profits from the large banks slow and even decline. Shares of JPMorgan are down 0.5% at the time of writing.

Lastly, shares of American Express (NYSE: AXP ) are down 2%, leading all Dow losers downward despite a lack of news. Butthe stock did just hit a fresh 52-week high of $78.61 yesterday, and we may be seeing investors pulling out of the stock, believing it has peaked. Over the next few weeks or months, it may hover near where it is today.

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Hot Services Stocks To Invest In 2015

DELAFIELD, Wis. (Stockpickr) -- Professional traders running mutual funds and hedge funds don't just look at a stock's price moves; they also track big changes in volume activity. Often when above-average volume moves into an equity, it precedes a large spike in volatility.

Major moves in volume can signal unusual activity, such as insider buying or selling -- or buying or selling by "superinvestors."

Unusual volume can also be a major signal that hedge funds and momentum traders are piling into a stock ahead of a catalyst. These types of traders like to get in well before a large spike, so it's always a smart move to monitor unusual volume. That said, remember to combine trend and price action with unusual volume. Put them all together to help you decipher the next big trend for any stock.

With that in mind, let's take a look at several stocks rising on unusual volume today.

AOL

AOL (AOL) is a global Web services company whose business consists of online content, products and services that it offers to consumers, publishers and advertisers. This stock closed up 1.4% to $36.69 in Wednesday's trading session.

Hot Services Stocks To Invest In 2015: Genesco Inc. (GCO)

Genesco Inc. engages in the retail and wholesale of footwear, apparel, and accessories. The company operates in five segments: Journeys Group, Schuh Group, Lids Sports Group, Johnston & Murphy Group, and Licensed Brands. The Journeys Group segment operates the Journeys, Journeys Kidz, Shi by Journeys, and Underground by Journeys retail stores that provide footwear and accessories for men, women, and younger children. It also sells footwear and accessories through direct-to-consumer catalog and e-commerce operations. The Schuh Group segment operates Schuh retail footwear stores, which offer casual and athletic footwear for 15 to 30 year old men and women, as well as engages in the e-commerce operations. The Lids Sports Group segment operates headwear and accessory stores under the Lids, Hat World, and Hat Shack banners; sports-oriented fan shops that offer licensed merchandise, such as apparel, hats and accessories, sports decor, and novelty products under the Lids Locker R oom, Sports Fan-Attic, and Sports Avenue banners; and as a Lids Team Sports athletic team dealer, as well as in e-commerce operations. The Johnston & Murphy Group segment is involved in Johnston and Murphy retail, catalog and e-commerce, and wholesale distribution operations. Its stores provide footwear, luggage, and accessories for business and professional customers. The Licensed Brands segment markets casual and dress footwear under the Dockers brand for men aged 30 to 55. As of May 31, 2013, the company operated 2,455 retail stores in the United States, Canada, the United Kingdom, and the Republic of Ireland. The company also sells its products through journeys.com, journeyskidz.com, shibyjourneys.com, undergroundbyjourneys.com, schuh.co.uk, and johnstonmurphy.com. Genesco Inc. was founded in 1924 and is headquartered in Nashville, Tennessee.

Advisors' Opinion:

[By Seth Jayson]
Calling all cash flows
When you are trying to buy the market's best stocks, it's worth checking up on your companies' free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That's what we do with this series. Today, we're checking in on Genesco (NYSE: GCO ) , whose recent revenue and earnings are plotted below.
[By Eric Volkman]
Genesco (NYSE: GCO ) results for the company's fiscal Q1 2014 have been released. For the quarter, net sales came in at $591 million, a drop of 1.5% from the $600 million in the same period the previous year. Net profit also saw a slip, to $18.4 million ($0.77 per diluted share) from Q1 2013's figure of $20.6 million ($0.85). On an adjusted basis, those numbers were $22.2 million ($0.94 per diluted share) and $23.8 ($0.98), respectively.
[By Reuters]
Steven Senne/AP BOSTON -- Companies that help Target process payments could face millions of dollars in fines and costs resulting from the unprecedented data breach that struck the retailer during the holiday shopping season. Investigators are still sorting through just how thieves compromised about 40 million payment cards and the information of about 70 million Target (TGT) customers. But people who have reviewed past data breaches believe Target's partners could face consumer lawsuits and fines that payment networks such as Visa (V) and MasterCard (MA) often levy after cybersecurity incidents. Target's partners "have deep pockets and are intimately involved in certain aspects of how Target gets paid," said Jamie Pole, a cybersecurity consultant in Asheboro, N.C., who works for government agencies and the financial industry. Fines and settlement costs could reach into the millions of dollars for individual companies, he said, though much will depend on how the ultimate liability for the breach is determined. Boston attorney Cynthia Larose of Mintz Levin said Target would likely seek to add its partners as defendants to lawsuits already filed over the breach. "These class-action lawsuits start to bring everyone in at some point," she said. After its systems were penetrated by hackers in the mid-2000s, retailer TJX Cos. (TJX) agreed to pay up to $40.9 million to cover fraud costs in a settlement with Visa. Visa also issued penalties of $880,000 against Fifth Third Bancorp (FITB) of Ohio, which processed transactions for TJX. Asked about the business relationships and possible costs, Target spokeswoman Molly Snyder declined to comment, citing the ongoing investigation and pending suits. A Visa spokeswoman declined to comment. A MasterCard spokesman said the company couldn't discuss an ongoing investigation. Handling Target Transactions Several companies are involved in any purchase from a store such as Target. A bank issues the consumer's payment card

Hot Services Stocks To Invest In 2015: Move Inc.(MOVE)

Move, Inc., together with its subsidiaries, operates an online network of Websites for real estate search, finance, and moving and home enthusiasts in North America. The company operates REALTOR.com, a Web site that offers property listings and neighborhood profiles; and consumers information and tools designed to assist the customers in understanding the value of their home, preparing the home for sale, listing and advertising the home, home affordability, the offer process, applying for a loan, understand the mortgage options available, closing the purchase, and planning the move. REALTOR.com provides showcase listing enhancements; display ad products; and a series of template Websites primarily for agents and brokers. The company also offers 8i solution, a Web-based customer relationship management software application for real estate agents. In addition, it provides Market Snapshot and Market Builder products that allow real estate professionals to offer real-time mult iple listing services market updates and trend analysis to their online prospects and clients; and Move Rentals that displays rental listings. Further, the company provides graphical display advertisements, text links, sponsorships, and directories for advertisers for mortgage companies, home improvement retailers, moving service providers, and other consumer product and service companies. Additionally, it offers quotes from moving companies, truck rental companies, and self-storage facilities, as well as other move-related information on Moving.com Website. Move, Inc. also operates as an online real estate listing syndicator and provider of performance reporting solutions for the purpose of helping to drive an online advertising program for brokers, real estate franchises, and individual agents. The company was formerly known as Homestore, Inc. and changed its name to Move, Inc. in June 2006. Move, Inc. was founded in 1993 and is headquartered in Westlake Village, Californi a.

Advisors' Opinion:

[By Mark Holder]
Zillow (NASDAQ: Z ) is facing increasing pressure for the leadership position in the online real estate marketplace. The recent purchase of Market Leader by Trulia (NYSE: TRLA ) places it in a more comparable position based on revenue. Move (NASDAQ: MOVE ) continues to make long-needed enhancements to realtor.com, but it has fallen far behind the monthly unique users, or MUUs, of Zillow and Trulia.�

10 Best Japanese Stocks To Own Right Now: Canada Bread Company Ltd (CBY)

Canada Bread Company, Limited is a manufacturer and marketer of flour-based products in its various markets, including fresh bread in Canada, frozen partially baked bread in the United States and Canada, specialty bakery products, including fresh pasta and sauces, sweet goods and snack cakes in Canada, and bagels, croissants and other specialty baked goods in the United Kingdom. It operates in two segments: Fresh Bakery business includes pantry breads, rolls, flatbreads, artisan breads, sweet goods and snack cakes sold under a number of brands, including Dempster��, Villaggio, POM, Bon Matin and Ben��, and Frozen Bakery segment consists of frozen par-baked bakery products sold in North America and the United Kingdom bakery business, which specializes in bagels, croissants, and specialty breads. In November 2013, the Company clearanced and closed the sale of Olivieri Foods, to Ebro Foods SA. Advisors' Opinion:

[By Gerrit De Vynck]
The Toronto-based food producer, which owns 90 percent of Canada Bread Co. (CBY), said in October it would explore options for the stake, including a possible sale as it divests assets to focus on its meat business. With several suitors evaluating the company, a sale is looking more likely, said one of the people, who asked not to be named because the talks are private. Maple Leaf hired Centerview Partners LLC and Royal Bank of Canada to look for buyers, the people said.

Hot Services Stocks To Invest In 2015: Group 1 Automotive Inc. (GPI)

Group 1 Automotive, Inc., through its subsidiaries, engages in the marketing and sale of automotive products and services. It sells new and used cars, light trucks, and vehicle parts. The company also provides vehicle financing services; service and insurance contract services; and automotive maintenance and repair services. The company has operations located in metropolitan areas in the states of Alabama, California, Florida, Georgia, Kansas, Louisiana, Maryland, Massachusetts, Mississippi, New Hampshire, New Jersey, New York, Oklahoma, South Carolina, and Texas in the United States; and in the towns of Brighton, Hailsham, and Worthing in the United Kingdom. As of October 25, 2012, it owned and operated 121 automotive dealerships, 158 franchises, and 30 collision centers in the United States and the United Kingdom that offer 32 brands of automobiles. The company was founded in 1995 and is headquartered in Houston, Texas.

Advisors' Opinion:

[By Ning Jia]
In 2001, Advance Auto Parts acquires Carport Auto Parts, a regional retail chain with 29 stores in Alabama and Mississippi. The combination of Advance and Carport locations establishes Advance Auto Parts as the market leader in Alabama and Mississippi. In November of 2011, Advance acquires 671 Discount Auto Parts, Inc., a regional auto parts chain in Florida, Alabama, Georgia, South Carolina, and Louisiana. The acquisition strengthens the company's position as the market leader in Florida. Upon completion of this merger, Advance Auto Parts becomes a publicly traded company, listed as a common stock on the New York Stock Exchange under the symbol AAP. After the Company went public in 2001, AAP continued to expand both organically and through acquisition. On October 16th 2013, Advance Auto Parts entered into a definitive agreement to acquire General Parts International, Inc. (GPI), a leading privately held distributor and supplier of original equipment and aftermarket replacement products for commercial markets operating under the CARQUEST and WORLDPAC brands, in an all-cash transaction with an enterprise value of $2.04 billion. The transaction has been approved by the boards of directors for both companies. The deal creates the largest automotive aftermarket parts provider in North America, with annual sales of more than $9.2 billion and more than 70,000 employees.

Hot Services Stocks To Invest In 2015: Shutterfly Inc.(SFLY)

Shutterfly, Inc. provides an Internet-based social expression and personal publishing service that enables consumers to share, print, and preserve their digital photos through the medium of photography in the United States. It offers a range of personalized photo-based products and services for consumers to upload, edit, enhance, organize, find, share, create, print, and preserve their memories. The company produces and sells photo books, greeting and stationery cards, personalized calendars, and other photo-based merchandise, including calendars, mugs, canvas prints, mouse pads, magnets, and puzzles. It also offers photo prints consist of wallet and photocards. In addition, the company provides commercial print services. Shutterfly, Inc. was founded in 1999 and is headquartered in Redwood City, California.

Advisors' Opinion:

[By John Kell]
Shutterfly Inc.'s(SFLY) fourth-quarter earnings fell 18% as the e-commerce company recorded higher expenses. Shutterfly also said it expects to post a loss for the current year. Shares dropped 7.6% to $45.90 premarket.

Hot Services Stocks To Invest In 2015: Universal Health Realty Income Trust (UHT)

Universal Health Realty Income Trust (Trust) is a real estate investment trust (REIT). It invests in health care and human service related facilities, including acute care hospitals, behavioral healthcare facilities, rehabilitation hospitals, sub-acute facilities, surgery centers, childcare centers and medical office buildings (MOBs). As of February 29, 2012, it had 54 real estate investments or commitments located in 15 states in the United States consisting of seven hospital facilities, including three acute care, one behavioral healthcare, one rehabilitation and two sub-acute; 43 MOBs, and four preschool and childcare centers. In February, 2012, Canyon Healthcare Properties, in which it owned a 95% non-controlling ownership interest, completed the divestiture of the Canyon Springs Medical Plaza. In January, 2012, it purchased the PeaceHealth Medical Clinic, a single-tenant medical office building consisting of approximately 99,000 rentable square feet, located in Bellingham, Washington. During the year ended December 31, 2011, the Company acquired Lake Pointe Medical Arts Building, Forney Medical Plaza, Tuscan Professional Building and Emory at Dunwoody Building, and minority ownership interests held by third-party members in 11 limited liability companies (LLCs). On November 30, 2011 and December 16, 2011, eight LLCs in which it owned various non-controlling, ownership interests, completed the divestitures of medical office buildings and related real property.

As of February 29, 2012, the Company had investments in 54 facilities, located in 15 states and consisting of Southwest Healthcare System, Inland Valley Campus, McAllen Medical Center, Wellington Regional Medical Center, The Bridgeway, Kindred Hospital Chicago Central, Kindred Hospital Corpus Christi, HealthSouth Deaconess Rehabilitation Hospital, Family Doctor�� Medical Office Bldg., Kelsey-Seybold Clinic at Kings Crossing, Professional Bldgs. at Kings Crossing Building A and Building B, Chesterbrook Academy, Southern Cresce! nt Center I, Desert Valley Medical Center, Desert Springs Medical Plaza, and Santa Fe Professional Plaza. As of December 31, 2011, included in its portfolio are seven hospital facilities. During 2011, the leases with respect to these hospital facilities consisted approximately 65% of its revenue. As of December 31, 2011, these leases have fixed terms with an average of 4.4 years remaining and include renewal options ranging from one to five, five-year terms. During 2011, revenues generated from the leases on the Universal Health Services, Inc. (UHS) hospital facilities accounted for approximately 55% of its total revenue. During 2011, it had a total of 41 new or renewed leases related to the medical office buildings.

Advisors' Opinion:

[By Dividends4Life]
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[By Fredrik Arnold]
Ten Champion dogs that promised the biggest dividend yields into July included firms representing five of nine market sectors. The top stocks were three of five from the financial sector: Universal Health Realty Trust (UHT); Mercury General Corp. (MCY); Old Republic Int'l (ORI). The other two financial firms, HCP Inc., and United Bankshares Inc. (UBSI), placed sixth and eighth.
[By Dividends4Life]
Linked here is a detailed quantitative analysis of Universal HealthRealty Income Trust (UHT). Below are some highlights from the above linked analysis:
[By Holly LaFon]
At this point I would like to circle back to a subject we are perhaps most often asked about, and that is why do we continue to hold such a concentrated position (nearly 32%) in our three largest holdings? First of all, it is important to note that over the past two year s we have actually reduced our holdings in all three stocks. Fortunately for our shareholders long - term price appreciation, particularly in Universal Health Services, Inc. and Precision Castparts Corp., has been exceptionally strong (in the case of Universal Health Services, Inc., which was purchased in 1999 and 2000 at an average cost per share of $9.41 and ha d increased to a price per share of $81.26 at the end of 2013, and Precision Castparts Corp. which was bought in 2000 at a n average cost per share of $9.82 and ha d increased to a price per share of $26 9. 3 0 at the end of 2013). In our view these two companies remain in the " sweet spot " of two compelling long - term investment opportunities. In the case of Universal Health Services, Inc., the company i s likely to be one of the prime beneficiaries of expanding health care insurance coverage dictated by the Affordable Care Act * ** ( " Obama - care " ). Unique to Universal Health Services, Inc. (UHT) is its position in mental health services which account s for three - q uarters of its earnings before deductions for interest expense, taxes, depreciation and amortization . Precision Castparts Corp. (PCP) is a prime component supplier to the commercial aircraft manufacturers. Indicative of the attractiveness of this business was The Boeing Company ' s recent announcement that its year - end backlog was 5,080 planes compared to the 648 jets delivered in 2013. By the same token, Airbus ' (a subsidiary of Airbus Group NV) backlog at the end of November was 5,400 versus the 562 planes del ivered in the first eleven months of the year.

Hot Services Stocks To Invest In 2015: Reed Elsevier PLC(RUK)

Reed Elsevier PLC provides professional information solutions worldwide. The company?s Elsevier segment offers scientific, technical, and medical information solutions. This segment publishes science and technology research articles and book titles; and abstract and citation database of research literature, as well as offers information and workflow tools that help researchers generate insights in the advancement of scientific discovery. The Elsevier segment also provides medical journals, books, reference works, databases, and online information tools to medical researchers, doctors, nurses, allied health professionals, students, hospitals, research institutions, health insurers, managed healthcare organizations, and pharmaceutical companies. Its LexisNexis Risk Solutions segment offers data and analytics for the insurance industry; risk management, identity verification, fraud detection, credit risk management, and compliance solutions for financial institutions; invest igative solutions; and employment-related, resident and volunteer screening services. The company?s Lexisnexis Legal and Professional segment provides legal, tax, regulatory, and business information solutions. Its Reed Exhibitions segment organizes exhibitions and conferences for the broadcasting, TV, music, and entertainment; building and construction; electronics and electrical engineering; alternative energy, oil, and gas; engineering, manufacturing, and processing; gifts; interior design; IT and telecoms; jewelry; life sciences and pharmaceuticals; marketing; property and real estate; sports and recreation; and travel sectors. The company?s Reed Business Information segment provides data services, information, and marketing solutions to business professionals; produces industry critical data services, lead generation tools, and online community and job sites; and publishes business magazines. Reed Elsevier PLC was founded in 1894 and is based in London, the United Kin gdom.

Advisors' Opinion:

[By Rupert Hargreaves]
Today I am looking at�Reed Elsevier� (LSE: REL ) (NYSE: RUK ) to determine whether you should consider buying the shares at 734 pence.
[By Zarr Pacificador]
A look at Reed Elsevier
Today, I'm evaluating�Reed Elsevier� (LSE: REL ) (NYSE: RUK ) , a professional information solutions provider,�which currently trades at 743 pence. Here are my thoughts:

Hot Services Stocks To Invest In 2015: Halliburton Company(HAL)

Halliburton Company provides various products and services to the energy industry for the exploration, development, and production of oil and natural gas worldwide. It operates in two segments, Completion and Production, and Drilling and Evaluation. The Completion and Production segment offers production enhancement services, completion tools and services, cementing services, and Boots & Coots. Its production enhancement services include stimulation and sand control services; completion tools and services comprise subsurface safety valves and flow control equipment, surface safety systems, packers and specialty completion equipment, intelligent completion systems, expandable liner hanger systems, sand control systems, well servicing tools, and reservoir performance services; cementing services consist of bonding the well and well casing, while isolating fluid zones and maximizing wellbore stability, and casing equipment; and Boots & Coots include well intervention services , pressure control, equipment rental tools and services, and pipeline and process services. The Drilling and Evaluation segment provides field and reservoir modeling, drilling, evaluation, and wellbore placement solutions that enable customers to model, measure, and optimize their well construction activities. Its services comprise fluid services, drilling services, drill bits, wireline and perforating services, testing and subsea services, software and asset solutions, and integrated project management and consulting services. The company serves independent, integrated, and national oil companies. Halliburton Company was founded in 1919 and is headquartered in Houston, Texas.

Advisors' Opinion:

[By Seth Jayson]
Halliburton (NYSE: HAL ) is expected to report Q2 earnings on July 22. Here's what Wall Street wants to see:

The 10-second takeaway
Comparing the upcoming quarter to the prior-year quarter, average analyst estimates predict Halliburton's revenues will grow 0.4% and EPS will wither -10.0%.

Hot Services Stocks To Invest In 2015: SouFun Holdings Ltd (SFUN)

SouFun Holdings Limited (SouFun), incorporated on June 17, 2004, operates as a real estate Internet portal in China. The Company also operates home furnishing and improvement Websites. Through SouFun's Websites, it provides marketing, e-commerce, listing, and other value-added services for China's real estate and home-related sectors. SouFun's Internet portal focuses and supports SouFun's users in seeking information on the real estate and home-related sectors in China. SouFun maintains about 100 offices to focus on local market needs and its Website and database contains real estate related content covering more than 320 cities in China. Its www.soufun.com Website contains links to other specialized real estate and home furnishing and improvement Websites, including its www.jiatx.com Website, its e-commerce transaction and payment platform. The Company's service offerings include marketing services, E-commerce services, listing services and other value-added services.

Marketing Services

The Company offers marketing services on its Websites, mainly through advertisements, to real estate developers in the marketing phase of new property developments, as well as to real estate agencies and suppliers of home furnishing and improvement and other home-related products and services who wish to promote their products and services. Its marketing services are delivered through its Website www.soufun.com and include traditional Internet advertisements, such as banners, links, logos and floating signs, as well as featured promotions, such as Internet advertisements, combined with its other services.

E-commerce services

The Company offers e-commerce services, including SouFun membership services and online transaction platform services. It provides both free and paid SouFun membership services to registered members its SouFun cards. Its free services include primarily regular updates regarding local property developments, tours to visit property developments an! d other services relating to property purchases. The Company�� paid services primarily include offers to purchase properties with discounts from its partner developers and information and related services to facilitate property purchases. In addition, through its www.jiatx.com Website, it offers an online transaction platform and related e-commerce services to home furnishing and improvement vendors in China.

Listing services

The Company offers basic and special listing services. Its basic listing services are mainly offered to real estate agents, brokers, developers, property owners and managers and suppliers of home furnishing and improvement and other home-related products and services. Its basic listing services allow its customers to post information of their products and services on its Websites. The Company�� special listing services offer customized marketing programs involving both online listings and offline themed events.

Other value-added services

The Company offers subscription-based access to its information database and research reports and total Web solution services. The Company provides online content subscription services on either a flat-fee subscription basis for database access or a per-project basis for its research services. It charge subscription fees based on the number of databases that the subscriber would like to access.

The Company competes with E-House (China) Holdings, Sohu.com Inc.�� focus.cn, Anjuke.com, Tencent�� fangqq.com, Szhome.com and House365.com.

Advisors' Opinion:

[By Belinda Cao]
SouFun Holdings Ltd. (SFUN), China�� biggest real estate website, fell 2.8 percent to $23.01 April 5, extending its drop in the week to 12 percent. Short seller Glaucus Research Group rated the company a ��trong sell��in an April 4 report, saying that SouFun spent millions of dollars buying luxury real estate in New York and transferred money to charities of ��ubious authenticity.��
[By Jim Jubak]
Among stocks that are available to US investors through a listing in New York, the list includes Ctrip.com International (CTRP), China's biggest online travel retailer; Qihoo 360 (QIHU), a leading mobile security company; 58.com (WUBA), the Craigslist-like operator of a classified site, and SouFun Holdings (SFUN), the owner of China's biggest real-estate site.