6 Internet and Web Service Stocks to Buy Now

Popular Posts: Hottest Energy Stocks Now – TPLM HK KOG SD10 Oil and Gas Stocks to Buy Now10 Best “Strong Buy” Stocks — BITA SHPG TRGP and more Recent Posts: Biggest Movers in Technology Stocks Now – TTEC SATS MR PLT Biggest Movers in Services Stocks Now – AMX SSP HHC PAG Hottest Financial Stocks Now – TFSL KCG FSC BLX View All Posts 6 Internet and Web Service Stocks to Buy Now

This week, six internet and web service stocks are improving their overall ratings on Portfolio Grader. Each of these stocks is rated an “A” (“strong buy”) or “B” overall (“buy”).

Commtouch Software Ltd () is bumping up its rating from a C (“hold”) to a B (“buy”) this week. Commtouch Software provides messaging, antivirus, and Web security solutions to OEM customers, enterprises, and service providers primarily in Israel, North America, Europe, and Asia. In Portfolio Grader’s specific subcategory of Sales Growth, CTCH also gets an A. .

IntraLinks Holdings, Inc.’s () ratings are looking better this week, moving up to a B from last week’s C. IntraLinks Holdings provides Software-as-a-Service solutions for managing content, exchanging business information and collaborating within and among organizations. .

Akamai Technologies, Inc. () gets a higher grade this week, advancing from a C last week to a B. Akamai Technologies provides services for accelerating and improving the delivery of content and applications over the Internet. .

OpenTable, Inc. () earns a B this week, jumping up from last week’s grade of C. OpenTable provides free, real-time online restaurant reservations for diners through an online booking service. .

This week, Jiayuan.com International Ltd. Sponsored ADR () pushes up from a C to a B rating. Jiayuan. com International is an online Chinese dating company. Shares of the stock have been changing hands at an unusually rapid pace, twice the rate of the week prior. .

Sohu.com, Inc. () boosts its rating from a C to a B this week. Sohu.com is an Internet media company that serves as a daily source of information, communication and entertainment for millions of Chinese consumers. .

Louis Navellier’s proprietary Portfolio Grader stock ranking system assesses roughly 5,000 companies every week based on a number of fundamental and quantitative measures. Stocks are given a letter grade based on their results — with A being “strong buy,” and F being “strong sell.” Explore the tool here.

Age of Extinction: Markets End Mixed, Bulls Get Uncomfortable

Transformers: Edge of Extinction is the fourth installment of the Transformers series, and its fair to ask: Have the Transformers overstayed their welcome? Based on the reviews alone, it would seem so. Some 83% of critics on Rotten Tomatoes panned the film: Richard Roeper calls it “one of the most relentless movies” he’s ever seen, and no that’s not a compliment; the St. Louis Post-Dispatch’s Joe Williams calls it “an homage to such ‘cinema of cruelty’ classics as Andy Warhol's real-time Sleep,” that runs nearly three house and “abandons all pretense of a plot;” and the Detroit News’ Tom Long compares it to a hammer on the skull. Still, Transformers: Age of Extinction is going to make oodles of cash–its set to rake in more than $90 million this weekend alone, according to BoxOfficeMojo.com–so the answer would seem to be no.

Agence France-Presse/Getty Images

What about the current bull market? It’s been running for more than five years now, and that alone has some questioning how much longer it can go on. Don’t look for answers in the market’s performance this week. The S&P 500 dipped just 0.1% to 1,960.97, while the Dow Jones Industrial Average fell 0.6% to 16,851.84. The Nasdaq Composite gained 0.7% to 4,397.93 and the small-company Russell 2000 ticked up 0.1% to 1,189.50. Make sense of that jumble.

Investech Research’s Jim Stack expresses his discomfort with the five-year bull market:

…with the market hitting new all-time highs almost daily, the majority of dark clouds have seemingly disappeared from the investment horizon. Yet this is when we tend to become most uncomfortable. Not bearish – just uncomfortable. It's not that we disagree with the evidence – which supports a bullish outlook. We simply know that, historically, market tops are accompanied by maximum levels of bullish consensus. One can't base their investment decisions solely on "sentiment" or "complacency" – but one also shouldn't ignore such extremes when they start to appear.

Societe Generale’s Albert Edwards extols the life of a Bear:

I’ve long felt being an equity bear is more like a vocation, especially as I have now been underweight equities for 17½ years. Being an equity bear is about as popular as being an estate agent or indeed even worse – a politician. But I believe we remain trapped in a secular valuation bear market and the Ice Age theme will continue to dominate in the near term. The flip side of this is that I remain a bull of long government bonds. As my colleague Andrew Lapthorne points out, the nature of the beast is that I am wrong 90% of the time as equities outperform bonds, only to be correct in the long term as many years of equity outperformance are savagely unwound in a matter of months.

JPMorgan’s Arjun Mehra and team wrote think there could be some short-term pain ahead after the S&P 500 experienced a “key reversal:”

In general terms, a key reversal occurs when a security completely changes its recent pattern during the course of a trading day. Specifically, for a day to be classified as a key reversal day in an up-trending market, 2 things need to happen: 1) the security must trend higher and take out the previous all-time highs, and 3) the direction must then reverse with the closing tick falling below the previous day's low price. A reversal day can also occur in a down-trending market, with the exact opposite direction in each step mentioned above.

We looked at price history for the S&P 500 since the beginning of 2000 and discovered that key reversal days in up-trending markets (like the one we are in the midst of currently) are rare and have only occurred in 5 total instances, with June 24, 2014, being the most recent occurrence. The data shows that the S&P 500 underperformed immediately following the triggering of each of these days. As such, we think it is prudent to buy short-dated puts/ put spreads on the index to hedge against any potential downside in the coming few days, particularly with implied volatility close to cycle lows.

That’s something Barron’s Steve Sears has been recommending.

5 Stocks Under $10 Setting Up to Soar

DELAFIELD, Wis. (Stockpickr) -- Not a day goes by on Wall Street without certain stocks that trade for $10 a share or less experiencing massive spikes higher. Traders savvy enough to follow the low-priced names and trade them with discipline and sound risk management are banking ridiculous coin on a regular basis.

Just take a look at some of the big movers in the under-$10 complex from Thursday, including QLT (QLTI), which is ripping higher by 16%; OHR Pharma (OHRP), which is jumping higher by 14%; UniPixel (UNXL), which is soaring higher by 13%; and ParkerVision (PRKR), which is trending higher by 10%. You don't even have to catch the entire move in lower-priced stocks such as these to make outsized returns when trading.

One low-priced biotech stock that recently exploded to the upside was Northwest Biotherapeutics (NWBO), which I highlighted in June 12's "5 Stocks Under $10 Set to Soar Higher" at around $6.70 a share. I mentioned in that piece that shares of Northwest Biotherapeutics had been uptrending over the last month, with the stock moving higher from its low of $4.87 to its recent high at that time of $6.80 a share. That uptrend started right off NWBO's 200-day moving and the stock was just starting to spike higher off its 50-day moving average. That spike was quickly pushing shares of NWBO within range of triggering a near-term breakout trade above some key overhead resistance levels at $6.72 to $6.80 a share.

Guess what happened? Shares of Northwest Biotherapeutics started to trigger that breakout the same day as my piece with heavy upside volume. Volume on that day registered 2.14 million shares, which is well above its three-month average action of 1.09 million shares. Shares of NWBO continued to explode higher for the following three trading sessions in a row, with the stock tagging an intraday high of $9.35 a share on June 17. That represents a monster gain of close to 40% in just a few days for anyone who bought into that breakout. As you can see, trading small-cap stocks with the right technical setup can produce massive profits very quickly once momentum buyers take over.

Low-priced stocks are something that I tweet about on a regular basis. I frequently flag high-probability setups, breakout candidates and low-priced stocks that are acting technically bullish. I like to hunt for low-priced stocks that are showing bullish price and volume trends, since that increases the probability of those stocks heading higher. These setups often produce monster moves higher in very short time frames.

When I trade under-$10 names, I do it almost entirely based off of the charts and technical analysis. I also like to find under-$10 names with a catalyst, but that's secondary to the chart and volume patterns.

With that in mind, here's a look at several under-$10 stocks that look poised to potentially trade higher from current levels.

Onconova Therapeutics

 

One under-$10 clinical-state biopharmaceutical player that's starting to move within range of triggering a big breakout trade is Onconova Therapeutics (ONTX), which focuses on discovering and developing small molecule drug candidates to treat cancer. This stock has been destroyed by the short-sellers so far in 2014, with shares off sharply by 56%.

 

If you glance at the chart for Onconova Therapeutics, you'll notice that this stock has been trending sideways and consolidating right below its 50-day moving average for the last few weeks. This consolidation pattern is occurring right after shares of ONTX recently spiked sharply higher from its low of $4.10 to its high of $5.52 a share. Shares of ONTX are now trending within range of breaking out of that consolidation pattern and potentially heading higher.

 

Traders should now look for long-biased trades in ONTX if it manages to break out above its 50-day moving average of $5.09 a share and then once it takes out some more key overhead resistance levels at $5.24 to $5.52 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 203,756 shares. If that breakout triggers soon, then ONTX will set up to re-test or possibly take out its next major overhead resistance levels at $6.27 to $7 a share.

 

Traders can look to buy ONTX off weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support levels at $4.75 to right around $4.50 a share. One can also buy ONTX off strength once it starts to take out those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

 

Turtle Beach

 

 

Another under-$10 stock that's starting to trend within range of triggering a big breakout trade is Turtle Beach (HEAR), which is engaged in developing, commercializing and marketing audio technologies under the Turtle Beach and HyperSound brands in the U.S., Europe and internationally. This stock has been hit hard by the sellers so far in 2014, with shares off sharply by 29%.

 

If you take a look at the chart for Turtle Beach, you'll notice that this stock recently formed a triple bottom chart pattern at $9, $9.04 and $9.28 a share. Since forming that bottom, shares of HEAR have started to spike higher back above its 50-day moving average of $9.75 a share. That spike is quickly pushing shares of HEAR within range of triggering a near-term breakout trade.

 

Market players should now look for long-biased trades in HEAR if it manages to break out above some near-term overhead resistance at $10.08 to $10.50 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 195,008 shares. If that breakout gets underway soon, then HEAR will set up to re-test or possibly take out its next major overhead resistance levels at $11 to $11.40 a share. Any high-volume move above $11.40 will then give HEAR a chance to re-fill some of its previous gap-down-day zone from April that started near $13.50 a share.

 

Traders can look to buy HEAR off weakness to anticipate that breakout and simply use a stop that sits right below those triple bottom support levels. One can also buy HEAR off strength once it starts to clear those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

 

SouFun

 

 

One under-$10 Internet information player that's starting to move within range of triggering a big breakout trade is SouFun (SFUN), which operates a real estate Internet portal as well as a home furnishing and an improvement Web site in the People's Republic of China. This stock has been hammered lower by the sellers so far in 2014, with shares down huge by 42%.

 

If you take a glance at the chart for SouFun, you'll see that this stock has been downtrending badly for the last four months, with shares falling from its high of $19.94 to its recent low of $8.52 a share. During that downtrend, shares of SFUN have been making mostly lower highs and lower lows, which is bearish technical price action. That said, shares of SFUN have started to reverse its downtrend and enter a new uptrend, with the stock moving higher from that $8.52 low to it recent high of $9.58 a share. Shares of SFUN are now spiking higher today right above some near-term support at $9 a share, and it's quickly moving within range of triggering a big breakout trade.

 

Traders should now look for long-biased trades in SFUN if it manages to break out above some near-term overhead resistance levels at $9.58 to $10 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 7.73 million shares. If that breakout kicks off soon, then SFUN will set up to re-test or possibly take out its next major overhead resistance levels at $11 to its 50-day moving average of $11.36 a share. Any high-volume move above those levels will then give SFUN a chance to tag $12 to $13 a share.

 

Traders can look to buy SFUN off weakness to anticipate that breakout and simply use a stop that sits right below some near-term support levels at $9 to $8.82 a share, or even that recent low of $8.52 a share. One can also buy SFUN off strength once it starts to bust above those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

 

Prana Biotechnology

 

 

Another under-$10 biotechnology player that's starting to trend within range of triggering a major breakout trade is Prana Biotechnology (PRAN), which researches and develops therapeutic drugs for the treatment of neurological disorders in Australia. This stock has been crushed by the bears so far in 2014, with shares off huge by 69%.

 

If you look at the chart for Prana Biotechnology, you'll notice that this stock recently formed a double bottom chart pattern at $1.90 to $2 a share right above its 50-day moving average of $1.84 a share. Shares of PRAN have been consolidating and moving sideways above its 50-day for the last few weeks. This stock is now starting to spike higher today right above those near-term support levels, and it's quickly pushing within range of triggering a major breakout trade above some key overhead resistance levels.

 

Market players should now look for long-biased trades in PRAN if it manages to break out above some near-term overhead resistance levels at $2.22 to $2.35 a share and then above some past overhead resistance at $2.47 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 1.98 million shares. If that breakout triggers soon, then PRAN will set up to re-test or possibly take out its gap-down-day high from April at $3.24 a share. Any high-volume move above that level will then give PRAN a chance to re-fill some of its previous gap-down-day zone that started at $10.30 a share.

Traders can look to buy PRAN off weakness to anticipate that breakout and simply use a stop that sits just below its 50-day moving average of $1.84 a share. One can also buy PRAN off strength once it starts to move above those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

 

KaloBios Pharmaceuticals

 

 

One final under-$10 biopharmaceuticals player that looks ready to trigger a big breakout trade is KaloBios Pharmaceuticals (KBIO), which primarily develops monoclonal antibody therapeutics for the treatment of respiratory diseases and cancer in the U.S. This stock has been rocked by the sellers so far in 2014, with shares down sharply by 49%.

 

If you take a glance at the chart for KaloBios Pharmaceuticals, you'll notice that this stock recently formed a double bottom chart pattern at $1.69 to $1.66 a share. Since tagging that bottom, shares of KBIO have started to uptrend and move back above its 50-day moving average of $2.07 a share. Shares of KBIO are now starting to uptick a bit today right above its 50-day, and it's beginning to move within range of triggering a big breakout trade.

 

Traders should now look for long-biased trades in KBIO if it manages to break out above some near-term overhead resistance levels at $2.34 to $2.35 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 224,478 shares. If that breakout begins soon, then KBIO will set up re-test or possibly take out its next major overhead resistance levels at $2.66 to $3 a share. Any high-volume move above those levels will then give KBIO a chance to tag its next major overhead resistance levels at $3.28 to $3.69 a share. Keep in mind that a large gap sits right above $3.69 that could also get tested on a move above that level.

 

Traders can look to buy KBIO off weakness to anticipate that breakout and simply use a stop that sits just below some key near-term support around $2 a share. One can also buy KBIO off strength once it starts to trade above those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

To see more hot under-$10 equities, check out the Stocks Under $10 Setting Up to Explode portfolio on Stockpickr.

 

-- Written by Roberto Pedone in Delafield, Wis.

 

RELATED LINKS:

 

>>3 Stocks Spiking on Big Volume

 

>>5 Stocks Under $10 Poised to Pop in June

 

>>5 Stocks Set to Soar on Bullish Earnings

 

Follow Stockpickr on Twitter and become a fan on Facebook.

 

At the time of publication, author had no positions in stocks mentioned.

 

Roberto Pedone, based out of Delafield, Wis., is an independent trader who focuses on technical analysis for small- and large-cap stocks, options, futures, commodities and currencies. Roberto studied international business at the Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany. His work has appeared on financial outlets including CNBC.com and Forbes.com. You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zerosum24.

Refiners: Their Death is ‘Greatly Exaggerated’

Yesterday, refining stocks like Valero Energy (VLO), Marathon Petroleum (MPC), Tesoro (TSO) and PBF Energy (PBF) got hammered after the U.S. government said it would allow two oil companies to export ultra-light crude oil for the first time.

The Washington Post/Getty Images

Valero Energy, for instance, plunged 8.3%, while Marathon Petroleum slid 6.3%, PBF Energy plummeted 11% and Tesoro slipped. 4.2%.

Cowen’s Sam Margolin and Jason Gabelman call the death of US refiners “greatly exaggerated.” They explain why:

So as not to bury the lede, we do not see risk to our positive 12-18 month thesis for US refiners based on Pioneer Natural Resources’ (PXD) and Enterprise Products Partners’ (EPD) recently granted permits for condensate exports. Specifically, we do not see a step change in the current regulatory framework that bans blanket crude oil exports, since stabilized condensate is more akin to a refined product than an “unrefined oil”, as characterized by media reports. The spirit of the law, that hydrocarbon liquids produced in the US must be processed in the US, remains in place, and permits for condensate exports do not constitute precedent for crude oil in our view. Comments from US officials and even from Pioneer Natural Resources in the media indicate a similar conclusion We continue to see potential for a meaningful feedstock advantage for US refiners emerging later in 2014, with a crude supply inflection point of 9MM bpd of domestic production against a Gulf Coast import baseline in the 2.8-3.0MM bpd range.

We maintain our Outperform ratings on Valero Energy, Western Refining (WNR), Marathon Petroleum , Tesoro, and PBF Energy…

Ned Davis Research’s Warren Pies and John LaForge disagree:

This export news is potentially game changing for Refiners.

This minor "tweak" of the law could free up a lot of oil for export – oil that is currently stuck at the U.S. Gulf Coast – and signal a change in the Administration's position on oil exports more broadly. It is this export ban, along with inadequate pipeline infrastructure, that has fed the Refiner outperformance you…Bottom Line: If you have Refiners in your portfolio, it is time to take some off the table.

Shares of Valero Energy have gained 2% to $52.38 at 11:37 a.m., while Marathon Petroleum has ticked up 0.1% to $81.08, Tesoro has advanced 2% to $59.57 and PBF Energy has slid 0.9% to $27.83. Pioneer Natural Resources has dropped 2.4% to $227.53.

5 Stocks to Sell for July

Popular Posts: Don't Tread on Me – 3 Great All-American Dividend Stocks to BuyDov Charney’s Out, American Apparel Rallies … and APP Stock’s Still a Bad JokeThe Top 10 S&P 500 Dividend Stocks for March Recent Posts: 5 Stocks to Sell for July Chinese Stocks: Is a Tipping Point Coming Soon? 5 Reasons to Buy Japanese Stocks – EWJ View All Posts 5 Stocks to Sell for July

Finding stocks to sell in July is crucial, because the period is typically a good-but-not-great month for stocks.

That means any hope for outperformance in your personal portfolio hinges on identifying technically weak stocks to sell and jettisoning them now before they drag you down.

The good news is that although the market looks to have hit some resistance after setting more record highs, historical returns suggest additional all-time highs are on the horizon.

Over the last 67 years, the S&P 500 has returned an average of 0.91% in July, according to Yardeni Research. That puts the month’s returns squarely in the middle of the pack in regards to seasonality.

Like we said: good, but not great.

Against that backdrop, tactical and technically minded investors need to identify key S&P 500 stocks to sell, since these picks will weigh on their returns and hold back performance. After all, big names with no price momentum and a history of poor monthly performance aren’t going to do the broader market any good.

As stocks to sell for July, these names are no-brainers.

After screening the S&P 500 for stocks showing everything from price weakness to poor seasonality, we found a number of equities waving technical red flags. Based on technical weakness, here are five stocks to sell for July:

Stocks to Sell for July: Visa (V)

Click to EnlargeVisa (V) stock has had a rotten 2014 so far and the technicals suggest further losses for the payments processor in July.

V stock is already down more than 6% for the year-to-date. Its massive $131 billion market cap is doing the financial sector and S&P 500 no favors.

If you haven’t dumped V stock yet, now is the time. The technicals say V stock offers nothing but more dead weight ahead and is a stock to sell.

All the price momentum is to the downside. On July 24, V stock closed 12% below its 52-week high to put it 0.9% below its 50-day moving average and 1.2% below its 200-day moving.

You won’t find any upside momentum in Visa’s relative strength indicator either. At just shy of 40, there’s no reason to play shares for an oversold bounce.

Worst of all, V stock has a terrible track record on seasonality. Based on 10 years of data compiled by Thomson Reuters Stock Reports, V stock delivers an average return of -1% in July, lagging the S&P 500 by nearly 2 percentage points.

Stocks to Sell for July: Peabody Energy (BTU)

Click to EnlargeCoal miner Peabody Energy (BTU) is giving investors a wild and volatile ride in 2014 — all of it below breakeven.

BTU stock is down a miserable 17% for the year-to-date and broken technicals portend more ugliness in July.

As of the July 24 close, BTU stock closed 23% below its 52-week high. That left it 5.8% below its 50-day moving average and 7.3% below its 200-day moving average. Every time BTU looks set for a rally, the overarching downside momentum has it stall out.

Confirmation of the downside momentum — or at least a lack of upside momentum — can be found in BTU stock’s relative strength indicator, which is stuck in the “meh” territory of the low 40s.

Then there’s the unfortunate case that the market doesn’t much like BTU in the summer months. Historically, BTU stock lags the S&P 500 by nearly 0.4 percentage points in July before going on to lose almost 2% in August.

Stocks to Sell for July: Ross Stores (ROST)

Click to EnlargeLike Peabody Energy, shares in Ross Stores (ROST) have bounced around a lot this year and never been in positive territory.

Hey, when even a discount retailer like Wal-Mart (WMT) is struggling, what hope is there for the littler guy?

ROST stock has lost more than 11% for the year-to-date, recently closing a scary 19% below its 52-week high. ROST stock now trades more than 2% below its 50-day moving average and 7% below its 200-day moving average.

Breaking below those key technicals levels has left ROST sitting above an air pocket. With a relative strength indicator of 40, who’s going to play it as oversold? The momentum from this point on looks decidedly down.

The final technical strike against ROST stock is seasonality. On average, shares cough up a negative return of 2% in July, lagging the S&P 500 by almost 4 percentage points.

Stocks to Sell for July: IntercontinentalExchange (ICE)

Click to EnlargeIt’s no fun being an exchange operator when trading volumes for everything from commodities futures to equities are in the dumps. Just ask anyone holding IntercontinentalExchange (ICE) stock, which is off 15% so far this year.

You don’t need to look at technicals like seasonality to know that trading volumes dry up even more during the summer months. Maybe that’s why ICE stock historically loses an average of 4.7% in July.

And if that’s not enough to make ICE stock a sell for July, the downward momentum in price surely is.

ICE stock is 17% below its 52-week high, causing it to break 2.8% below its 50-day moving average and 6.5% below its 200-day moving average.

Compounding the downward pressure on ICE stock is a relative strength indicator of 44 — no man’s land at best.

Stocks to Sell for July: Diamond Offshore Drilling (DO)

Click to Enlarge

It looks like it’s too late for even the recent rise in energy prices to help Diamond Offshore Drilling (DO). After all, even if better industry fundamentals stick, the technical damage has been done.
DO stock is down 15% on the year to sit 33% below its 52-week high. That’s tipped the price momentum firmly toward the downside.
DO stock just breached its 50-day moving average, and now trades below that key level by almost 3%. DO stock is more than 9% below its 200-day moving average.
Again, with a relative strength indicator of 46, there’s no technical reason to expect oversold support in DO stock.

Lastly, the summer months haven’t been kind to DO stock over the past decade. On average, DO stock generates a return of -0.1% in July and -1.4% in August, according to data compiled by Thomson Reuters Stock Reports.

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

Alcoa Can Be a Solid Long-Term Investment Due to Robust Aluminum Demand

Alcoa (AA) has appreciated 13% so far this year, despite not so impressive quarterly results. But the conditions in the aluminum industry look bright, which is why Alcoa can continue doing well despite headwinds in the short run. In this article, we will take a closer look at Alcoa's prospects and see why it is a solid long-term investment.

Positive industry trends

Alcoa has managed to reposition its value-added business that makes up approximately 57% of its total revenue and derives nearly 80% of the segment profits as it has reduced its cost base drastically. Besides, the company is expected to improve its margins significantly as demand for both sheet and brazing sheet for heat exchangers is rising, and a lower cost model will certainly become accretive for the company. Moreover, the company will also benefit from improving economies in the U.S and Europe that will drive its industrial volume.

In addition, global aluminum demand is estimated to grow at 7% this year. Demand in China is expected to grow at a healthy rate of 10%, which is slightly lower than 12% in 2013. In the rest of the world, North American demand has been estimated to grow at 5%, fueled by increased automotive consumption.

Meanwhile, aluminum demand in Europe is expected to grow this year. Also, aluminum demand in emerging countries like Brazil, Russia, and India is quite strong, as it is growing at a reasonable rate of 6%, 5%, and 7%, respectively. Brazil, in particular, is showing good prospects with construction for the 2016 Olympics and this year's FIFA World Cup.

Apart from this, the company is also expected to benefit from the new capacity that has been brought online. Its Worsley and Yarwun refinery expansions should compliment its sales along with its recently launched online refinery services in Saudi Arabia and accelerated production in India.

Separately, the MENA region and India are lined up for new expansion of 1.4 million metric tons that will add value to its overall production. However, there is substantial amount of execution risk in India due to uncertain coal spot prices that might hurt its sales this year. Also, the aerospace industry, with a projected growth rate of 7% to 8%, will be a key driver for Alcoa this year. Boeing (BA) and Airbus now have a combined backlog of over 10,000 aircrafts, which is about eight years of production. Hence, this backlog means that aluminum demand should remain strong in the long run.

Strong demand ahead

Besides, the company has witnessed a strong demand in the aerospace sector with Boeing receiving the single-largest commercial order of $56 billion for 150 Boeing 777X from Emirates. Also, Airbus landed a deal of $20 billion for 50 A380s, from Emirates should enhance its sales. Alcoa is also expecting demand for cargo to grow at 6% from 5.3% last year.

The picture in the aerospace segment looks quite impressive, with growth being supported by a spur in demand from other segments like a 19.5% increase in regional jets and a 10% increase in business jets. Moreover, demand from the military for Joint Strike Fighter, the F-35, the KC-46 tanker, and the V-22 Osprey is an additional advantage.

Alcoa can also do well in the automotive sector, as demand for passenger cars is increasing. Also, auto sales in the U.S. are expected to grow to 16 million units this year. The existing cars have an average age of 11.4 years, which is well ahead of the historic average of around 9.4 years. This is driving growth in the country, and could lead to higher demand for aluminum used in vehicles.

Also, the commercial building and construction segment is expected to grow strongly in 2014 by around 3% to 4%, backed by a 19% increase in housing starts, and a 11.5% jump in non-residential contracts. All these should help drive its long-term growth.

Conclusion

This impressive outlook suggests that Alcoa is on the right track and the continuous rise in aluminum demand makes it more promising. The increase in auto sales, upswing in construction activity, and the backlog of key aerospace companies could help Alcoa return to growth soon. As such, investors should continue holding Alcoa as its long-term prospects look promising.

Currently 1.00/512345 Rating: 1.0/5 (1 vote)

Voters:

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

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

MORE GURUFOCUS LINKS

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

AA STOCK PRICE CHART 14.43 (1y: +86%) $(function(){var seriesOptions=[],yAxisOptions=[],name='AA',display='';Highcharts.setOptions({global:{useUTC:true}});var d=new Date();$current_day=d.getDay();if($current_day==5||$current_day==0||$current_day==6){day=4;}else{day=7;} seriesOptions[0]={id:name,animation:false,color:'#4572A7',lineWidth:1,name:name.toUpperCase()+' stock price',threshold:null,data:[[1372222800000,7.75],[1372309200000,7.87],[1372395600000,7.82],[1372654800000,7.86],[1372741200000,7.8],[1372827600000,7.71],[1373000400000,7.81],[1373259600000,7.92],[1373346000000,7.91],[1373432400000,7.92],[1373518800000,8.1],[1373605200000,8.1],[1373864400000,8.17],[1373950800000,8.11],[1374037200000,8.19],[1374123600000,8.21],[1374210000000,8.07],[1374469200000,8.12],[1374555600000,8.14],[1374642000000,8.05],[1374728400000,8.03],[1374814800000,8.07],[1375074000000,8.04],[1375160400000,8.03],[1375246800000,7.95],[1375333200000,7.95],[1375419600000,7.97],[1375678800000,8],[1375765200000,7.91],[1375851600000,7.79],[1375938000000,7.91],[1376024400000,8.22],[1376283600000,8.26],[1376370000000,8.15],[1376456400000,8.16],[1376542800000,8.16],[1376629200000,8.12],[1376888400000,7.94],[1376974800000,8],[1377061200000,7.84],[1377147600000,8.03],[1377234000000,8.05],[1377493200000,8.06],[1377579600000,7.915],[1377666000000,7.93],[1377752400000,7.81],[1377838800000,7.7],[1378184400000,7.72],[1378270800000,7.84],[1378357200000,7.87],[1378443600000,7.92],[1378702800000,8.08],[1378789200000,8.055],[1378875600000,8.19],[1378962000000,8.16],[1379048400000,8.08],[1379307600000,8.1],[1379394000000,8.26],[1379480400000,8.555],[1379566800000,8.44],[1379653200000,8.29],[1379912400000,8.28],[1379998800000,8.3],[1380085200000,8.33],[1380171600000,8.27],[1380258000000,8.2],[1380517200000,8.12],[1380603600000,8.17],[1380690000000,8.02],[1380776400000,7.86],[1380862800000,7.96],[1381122000000,7.97],[1381208400000,7.94],[1381294800000,8.1],[1381381200000,8.35],[1381467600000,8.32],[1381726800000,8.45],[1381813200000,8.38],[1381899600000,8.53],[1381986000000,8.59],[1382072400000,8.63],[1382331600000,8.6],[1382418000000,9.36],[1382504400000,9.27],[1382590800000,9.25],[1382677200000,9.24],[1382936400000,9.56],[1383022800000,9.54],[1383109200000,9.46],[1383195600000,9.27],[1383282000000,9.27],[138354480! 0000,9.92],[1383631200000,9.78],[1383717600000,9.66],[1383804000000,8.95],[1383890400000,9.06],[1384149600000,9.03],[1384236000000,8.92],[1384322400000,8.99],[1384408800000,8.98],[1384495200000,9.03],[1384754400000,8.95],[1384840800000,9.13],[1384927200000,9.05],[1385013600000,9.12],[1385100000000,9.24],[1385359200000,9.59],[1385445600000,9.65],[1385532000000,9.64],[1385704800000,9.61],[1385964000000,9.55],[1386050400000,9.42],[1386136800000,9.36],[1386223200000,9.35],[1386309600000,9.36],[1386568800000,9.48],[1386655200000,9.56],[1386741600000,9.34],[1386828000000,9.37],[1386914400000,9.51],[1387173600000,9.57],[1387260000000,9.7],[1387346400000,9.83],[1387432800000,9.97],[1387519200000,9.94],[1387778400000,10.13],[1387864800000,10.36],[1388037600000,10.43],[1388124000000,10.69],[1388383200000,10.53],[1388469600000,10.63],[1388642400000,1

We Went Back to That Dumpy South LA Walmart and Here's What We Found

NEW YORK (TheStreet) -- I'm not going to lie. It's a pretty cool feeling ...

A couple months back, we alerted the world to a stench at the Apple (AAPL) Store in Santa Monica. Within days, the company placed air sampling sensors in the store to determine the source of the smell.

While Apple refused to respond to repeated requests for comment, I can tell you that, as of last check, the store doesn't stink anymore.

Then, just last month, TheStreet exposed downright scummy conditions at the Wal-Mart (WMT) Store in South Los Angeles. Again, no official word from the company despite repeated requests for comment, but make no mistake they were listening. I visited the same South LA Walmart Thursday. And, while you can still see and smell the same tackiness and disrepair you'd expect from a Walmart, the most glaring issues from the March visit appear to have been resolved. There are no more shopping carts left sitting in indiscriminate places with garbage bags and random items overflowing. (I used a thesaurus on that last sentence). No more piles of bag packs. And everywhere I looked there were employees stocking shelves; not empty and/or unkempt ones with boxes stacked here and there throughout the store. The folks who claimed "the store was just going through a reset" the first time I was there are wrong. Bottom line -- Walmart was, IMO, neglecting that store. For what reason I don't know. But whatever was going on was unacceptable and a slap in the face to the store's visitors as well as the community, not to mention the rest of the mall's tenants. I heard from several folks who live near this particular Walmart. One claims he's going to try to get the issue on the agenda at the local block club. Apparently, I'm not the only one who has noticed what, according to the response I received, might be a persistent problem. But it's nice to see that Walmart listens. At least to some extent. Even the Walmart "Battery Center" has morphed to fully stocked. Before After Follow @rocco_thestreet --Written by Rocco Pendola in Santa Monica, Calif.

Stock quotes in this article: WMT 

Meet the Marxist behind Seattle's wage hike

Seattle City Council member Kshama Sawant wants more cities to adopt her hometown's new $15 minimum wage. SEATTLE (CNNMoney) Kshama Sawant has gone from Occupy Wall Street to occupying Seattle City Council.

Now, fresh off Seattle's historic passage of a $15 minimum wage, the self-described Marxist is ready to make it a national fight.

Sawant -- whose full name is pronounced "Shah-mah Sah-want" -- emigrated to the U.S. from India and earned a PhD in economics from North Carolina State University before taking a teaching position at Seattle Central Community College. She says she was radicalized politically by the gaping inequality she observed upon arriving in the world's richest country.

The veteran activist, who supported the Occupy movement that cropped up in the wake of the Great Recession and bank bailout, ran for city council last year under the banner of Socialist Alternative, an organization that calls for "international struggle" against global capitalism.

The "Socialist" label is practically an epithet in many parts of the U.S., but Sawant says it "wasn't really any kind of barrier" in her meetings with voters.

"Everybody said, 'Don't call yourself a Socialist,' but every speech I gave, I started with saying that I'm a member of Socialist Alternative," she said in a recent interview at her City Hall office. "People are hungry for an alternative, but that alternative isn't there."

The cornerstone of Sawant's campaign was her call for a $15 minimum wage, an issue the local press credited her with placing on the city's agenda.

Seattle's city council unanimously passed the wage increase earlier this month, and it will be phased in over several years based on a scale that considers the size of and benefits offered by an employer. It will apply first to many large businesses in 2017 and then to all businesses by 2021.

Washington already has the nation's highest state-level minimum wage, at $9.32, a rate that also applied to Seattle. The current federal minimum stands at $7.25. Some Democrats in Congress have been pushing for a gradual increase to $10.10, but so far without success.

While Seattle's $15 minimum is a first for a major U.S. city, it's not as if workers will be living lavishly. Working full-time, year-round for $15 an hour with two weeks off ! yields an annual pre-tax income of around $30,000.

"The cost of everything is going to go up," said Selena Bevers, a convenience store clerk in downtown Seattle. "You're still going to be where you are now."

  New day in Seattle: $15 minimum wage

Annette Kousin, who works at a nearby coffee shop, worries about how the bill will impact food stamps and other federal benefits.

"I have a ton of student loans I need to pay off," she said. "I'm having trouble just surviving."

Local businesses, meanwhile, have complained that the legislation will hurt their bottom lines and harm the local economy.

Supporters counter that the economy could actually see a boost as workers gain more disposable income to spend.

"It has the potential to really help the economy," said Olivia Anderson, a clerk at a Seattle ice cream shop. "I know it will affect small businesses, but big corporations have the money to do this right now."

Sawant concedes that she has a number of concerns about the bill that ended up passing. She says it was "watered down" by business interests and the Democratic party establishment. She'd like to shorten the phase-in period, get rid of an allowance for sub-minimum "training wages" and leave tips out of businesses' wage calculations for workers.

But despite those caveats, she called the legislation a major victory, estimating that it will benefit 100,000 low-wage workers and transfer $3 billion from businesses to low-wage workers over the next decade.

Seattle's minimum wage push gained momentum following protests by fast food workers and a vote in the nearby city of SeaTac last fall to raise its minimum wage to $15. Now, Sawant hopes Seattle's example will help ! the cause! of activists fighting for a $15 minimum elsewhere.

Agitation for a higher minimum wage is on the rise, with low-wage workers staging demonstrations across the country in recent months.

She and Socialist Alternative launched an organization in January called 15 Now that has gained chapters in New York, Chicago, Philadelphia and Los Angeles.

Sawant said there is "a deep disconnect " between young people today and older generations that grew up with the "American Dream" ideal of hard work leading to a more prosperous life.

"That is not going to happen for most people now, statistically speaking," she said.

Biotech: Past Performance Doesn’t Predict the Future

Biotech stocks got hammered this week, leading many analysts to defend the stocks. Not Bernstein’s Geoffrey Porges and team. They’re worried about the downside risks, beginning with what they call  ABCGRA.

That would be Amgen (AMGN), which fell 1.4% today,  Biogen Idec (BIIB), which dropped 5.1%, Celgene (CELG), which declined 2.1%, Gilead Sciences (GILD), which dropped 4%, Regeneron Pharmaceuticals (REGN), which fell 3.8%, and Alexion Pharmaceuticals (ALXN), which finished off 1.1%.

Porges explains why the six largest biotechs have him worried:

To the recent sector peak, the ABCGRA’s had increased by 177%, compared to 165% for the total sector. We believe that the explosive growth of the ABCGRA’s has been driven by the commercial success of more de-risked, derivative pipeline products (e.g. Tecfidera, Revlimid, Eylea), and that investors are extrapolating these successes to products currently in development. However, our analysis of ABCGRA current pipelines suggests that the degree of difficulty of products currently in development is generally higher now compared with 2010…

We see potential downside risk due to rising longer-term interest rates and rising stock volatility as measured by beta. These factors may lead to negative corrections in valuation of as much as 40%. In this context we see prefer the large cap stocks in our coverage that offer strong cash flow and earnings support, and limited potential for multiple compression regardless of changes in investor sentiment. Our top recommendations
remain Celgene and Gilead…

Amgen dropped 1.9% to $120.55 this week, while Biogen Idec fell 7.7% to $294.12, Celgene declined 3.5% to $139.29, Gilead Sciences dropped 4.9% to $68.55, Regeneron Pharmaceuticals fell 3.4% to $400.09 and Alexion Pharmaceuticals finished the week down 6.5% at $149.42.

Waffle Taco vs. Egg McMuffin: It's Not Even a Fair Fight

Taco Bell/AP There will be a new player in the escalating battle for breakfast on Thursday when Yum Brands' (YUM) Taco Bell rolls out its new morning menu, and the stakes are huge. McDonald's (MCD) is the name that most people associate with breakfast fast food. Ever since it introduced the Egg McMuffin in 1972, the world's largest burger flipper has set the bar for convenient morning meals for people on the go. The Waffle Taco will likely be Taco Bell's signature breakfast item. The taco-shaped waffle wrapped around a sausage patty, scrambled eggs and cheese turned heads when it was tested in select locations late last year. However, it's just one of the many items wooing commuters. Naturally there will be eggy breakfast burritos and grilled tacos with either bacon or sausage. The A.M. Crunchwrap gives a morning spin to the Crunchwrap Supreme by blanketing hash browns, scrambled eggs and either bacon or sausage in a pressed and folded flour tortilla. Tough Competition McDonald's is struggling these days, but it's still a fierce competitor when it comes to the first meal of the day. Just ask Burger King (BKW), which finds itself copying McDonald's more often than not, including hotcakes served with sausage and the Egg McMuffin. Just ask Wendy's (WEN), which retreated from its nationwide breakfast menu a couple of years ago. It's starting to work its way back in by introducing breakfast in some markets. Even Starbucks (SBUX) has been feeling the threat of McDonald's as the burger giant beefs up its McCafe line, offering guests drive-thru convenience that many Starbucks locations cannot. Earlier this month Starbucks ran a three-day promotion where it offered free coffee to anyone ordering a breakfast sandwich. It was meant to remind customers that it offers more than just java. Breakfast seems like an easy decision for a fast food leader. Who wouldn't want to milk more revenue out of a location by extending its operating hours? However, with Wendy's coming up short and even Chipotle Mexican Grill (CMG) dragging its feet, it's clearly not the no-brainer decision that it may seem on paper. Brand Identity at Risk A big risk in the move is squandering one's identity. There's a reason why cult burger faves -- including Five Guys and In-N-Out -- don't follow larger peers by offering full-blown breakfast items. The limited menus provide focus with consumers. Some have argued that the reason why comps at McDonald's have suffered later in the day recently is that it has strayed too far from its core burgers and fries. Taco Bell has also dramatically widened its choices, but it's been holding up better in terms of sustaining its popularity. Its same-restaurant sales increased 3 percent last year, and that's a welcome contrast to declines at many other quick-service concepts, including Yum Brands' own KFC and Pizza Hut. Adding items have hurt some chains, but Taco Bell's been scoring with its chef-inspired bowls and Doritos-dusted tacos. However, a lot of consumers already associate Taco Bell's traditional menu as either a late-night or early-morning meal. In 2007, its marketing department tried to introduce the "Fourthmeal," positioning its brand as a place for teens and young adults to grab a late-night meal beyond breakfast, lunch and dinner. The Waffle Taco and A.M. Crunchwrap will be incremental additions, but they ultimately won't move the needle in a material way.

Bank Stocks Soar Heading Into Stress Test Results

NEW YORK (TheStreet) -- JPMorgan Chase (JPM) and Comerica (CMA) of Dallas were the winners among large-cap bank stocks Wednesday afternoon, as investors looked forward to the expected announcement of annual stress tests results by the Federal Reserve after the market close.

JPMorgan's stock was up 3.2% to $60.14, while Comerica was up 3.2% to $52.11.

The KBW Bank Index (I:BKX) was up 2.3% in afternoon trading to 72.98, with all 23 component stocks showing gains, except for New York Community Bancorp NYCB, which was down slightly to $16.22.

The Fed's annual stress tests have become something of an annual catalyst for bank stocks, since most of the banks subject to the tests announce increases in dividends and plans to buy back shares, after the process is completed. But today's announcement only represents the first part of the process. The first part, known as the Dodd-Frank stress tests, measures large banks' ability to remain well capitalized through a "severely adverse" economic scenario. This year's scenario assumes an increase in the U.S. unemployment of four percentage points, with the unemployment rate peaking at 11.25% in mid-2015. The scenario also includes a decline in real U.S. GDP of nearly 4.75% through the end of 2014, a 50% decline in equity prices and a 25% decline in home prices. The severely adverse scenario also has international components, including recessions Europe and Japan, and slowing growth in Asia. For the U.S.-owned holding companies being tested, this part of the scenario is most important for Citigroup, which derives the majority of its revenue and earnings from outside North America. The second part of the stress tests is the Comprehensive Capital Analysis and Review (CCAR), which applies banks' plans to deploy excess capital through dividend increases, stock buybacks and/or acquisitions to the same "severely adverse" scenario. For bank-stock investors, CCAR is the more important part of the stress-test process. The Fed will announce those results on March 26, with most of the stress-tested banks expected to announce dividend increases and/or stock buyback plans the same day. This year the Fed has increased the number of banks undergoing the stress tests and CCAR, with Comerica among several regional banks being added. This year's stress tests incorporate two new major elements for the largest U.S. banks. For global systemically important financial institutions (G-SIFIs), including JPMorgan, Bank of America (BAC), Citigroup (C), Wells Fargo (WFC), Goldman Sachs (GS), Morgan Stanley (MS), Bank of New York Mellon (BK) and SunTrust (STI), the severely adverse scenario will include instant default of a bank's largest counterparty for trading of swaps and other derivatives. The second new element is the "Global Market Shock" component of the severely adverse economic scenario, which the Federal Reserve describes as "one-time, hypothetical shocks to a large set of risk factors." This part of the tests apply to the "big six" U.S. banks, including JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Goldman Sachs and Morgan Stanley. Citigroup is unique among the big six in deriving the bulk of its earnings from outside the U.S. Please see Could Citigroup Have the Stress-Test Hiccups?, for more on the bank's risk and opportunity from the stress tests. Sell-side analysts expect JPMorgan Chase and Comerica both to pass the first round of the stress tests with flying colors. Following CCAR, KBW analyst Christopher Mutascio expects JPMorgan Chase next Wednesday to be approved for $7.260 billion in common-share buybacks from the second quarter of 2014 through the first quarter of 2015. That would be an increase over actual buybacks for the prior-year period of $3.928 billion, according to KBW's estimate. Mutascio also expects JPMorgan to receive approval to raise its quarterly dividend to 41 cents a share from 38 cents. KBW analyst Brian Klock expects Comerica to receive approval to repurchase $2.0 billion in common shares from the second quarter of 2014 through the first quarter of 2015, up from an estimated $956 million during the prior-year period. Klock also estimates Comerica will raise its quarterly dividend to 22 cents from 17 cents. This chart shows stock returns for JPMorgan and Comerica against the KBW Bank Index and the S&P 500 since the end of 2011:

data by YCharts Follow @PhilipvanDoorn

Stock quotes in this article: JPM, CMA, C, I:BKX 

Young Love for Prepaid Debit Cards? We Take Them Out Once a Month

NEW YORK (LowCards.com) -- Two surveys from the Pew Charitable Trusts show that prepaid debit cards have become a popular alternative to checking accounts for more Americans.

Consumers loaded $64.5 billion onto prepaid debit cards in 2012, a 13% increase from $56.8 billion in 2011 and more than double the $28.6 billion in 2009.

According to one survey, 12 million people (or 5% of adults), use prepaid cards at least once a month. The average prepaid card customer had a household income of nearly $30,000 per year. Three-quarters of these consumers are under 50 years of age.

Consumers are using prepaid cards as a way to stay out of credit card debt, control their spending, make purchases online and avoid overdrafts. Among the people who have had a checking account, two in five have had problems with overdraft fees.
Also see: Prepaid Card Popularity Merits Caution From Consumers>> Prepaid cards may be a way to avoid checking accounts, but there are no federal laws or regulations that protect consumers directly from hidden fees, liability for unauthorized transactions or loss of funds in the event of an issuing institution's failure. This may change soon, since the Consumer Financial Protection Bureau is expected to issue some guidelines on prepaid cards this May. Prepaid cards don't have to provide disclosures of fees or terms. The study found that only 32% of consumers compared terms before choosing a card. The Pew study shows the changes in the prepaid market from 2012 to last year, including that retail banks and established financial services companies are now offering them. Prepaid cards offered by large banks were more economical last year, and some of the disclosures were clearer, including what is covered by FDIC insurance. More cards are charging monthly fees similar to traditional checking accounts instead of other transaction-based fees. Of the 66 most popular prepaid cards, the median fees were $5.95 for a monthly fee, $2 for an out-of-network or in-network ATM withdrawal, $1 for a point-of-sale signature or PIN transaction and $1.95 for a live customer service call.

The Best States to Make a Living

Is the job market getting better or worse? It depends on whom you ask -- and where you look.

In its fourth-annual study of the Best and Worst States to Make a Living, MoneyRates.com finds that work-related conditions vary widely among the 50 states. However, recent employment conditions appear to show some consistency: Eight of last year's top 10 states for making a living are in the top 10 again this year.

This study's rankings are based on each state's Compensation and Quality Factor, a proprietary metric based on these factors:

Average salary, according to figures from the Bureau of Labor Statistics (BLS). Cost of living, based on data from C2ER. Employment rate, based on BLS data. Workplace conditions, based on the "Work Environment" component of the Gallup-Healthways Well-Being Index.

The 10 best states for working
With the economy still sputtering, millions of Americans are looking for better jobs. If you are one of those people, here are some places you might want to look:

Washington. Washington repeats as the best state for all-round employment conditions, and it held the No. 2 spot in the two years before that. Washington's strengths include one of the highest average incomes in the nation, no state income tax and workplace conditions that ranked in the top 10 in the Gallup-Healthways survey. The state's unemployment rate and cost of living are above average, but only slightly, so this is not enough to undermine its positives. Texas. Another state with no income tax, Texas moves up from the No. 4 position last year. While the typical income in Texas is only about average, the state benefits from a cost of living and unemployment rate that are both lower than average. Employees in the state indicate that workplace conditions are good enough to rank in the top 10 nationally. Minnesota. This state moved up three slots from sixth last year, largely on the strength of a very low unemployment rate and excellent workplace conditions. The state does have a higher-than-average cost of living and tax burden, but incomes in the state are more than enough to make up for these disadvantages. Colorado. The greatest strength Colorado has going for it is a high average income level in a state where the cost of living is about typical of the nation as a whole. Workplace conditions are considered decent, and unemployment is about average. The only clear negative is a state tax burden that is higher than the national norm. Utah. Like the other states in the top five, Utah repeats a top-10 showing from last year, and this time around it moved up three slots from eighth. Cost of living and unemployment in the state are very low, and workplace conditions are above average. Slightly below-average incomes and above-average tax burdens hold take-home pay down a bit though. North Dakota. Surging up from 17th, North Dakota benefits tremendously from the nation's lowest unemployment rate, and employees gave the state's workplace conditions the highest rating of any state. Taxes are also very low, which is good because the average income is a little below par. Virginia. Despite slipping from the No. 4 ranking last year, Virginia deserves recognition for making the top 10 in all four years of this study. Virginia benefits from high incomes, a moderate cost of living and low unemployment. However, the typical tax burden is heavier than average, and employees in Virginia rated workplace conditions a little below the norm. Nevada. As a state that suffered terribly from the economic downturn, Nevada showed resilience by climbing 10 places in the rankings this year. The unemployment rate, though still a problem, has fallen by more than 5 percentage points over the past four years, and employees give the state's workplace conditions high marks. Incomes are a little below par, but between no state income taxes and a low cost of living, Nevadans come out ahead. Oklahoma. Up one place from last year, Oklahoma's virtues include a low cost of living, low unemployment and excellent workplace conditions. These help make up for a relatively low average income. Nebraska. Yet another repeat from last year's top 10, Nebraska earned high honors again, thanks primarily to one of the lowest unemployment rates in the U.S. The cost of living is also very reasonable, and its workplace conditions earned an above-average ranking.

America can still be a land of opportunity, provided you look in the right parts of that land. If you're not happy with the working opportunities in your area, this list might help point you in a better direction.

Didn't see your state on this list or the list of 10 worst states for making a living? Please see the full 50-state rankings.

This article Best Places to Make a Living originally appeared on Money Rates.

Leaked: Apple's next smart device (warning, it may shock you)
Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are claiming its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!

Additional articles can be found on www.Money-Rates.com:

America's best savings and money market rates

Best states for retirement

Interest rate forecast 2014

Why Amazon Needs the Fire Phone

Unveiled today in Seattle, the Amazon.com Inc. (Nasdaq: AMZN) Fire Phone is everything the rumors promised and more, but there was one surprise - the price.

Instead of offering the Amazon Fire Phone at a nominal $99, or even giving it away with an Amazon Prime subscription, the online retail giant is charging $199 for its 32-gigabyte model and $299 for its 64-GB model.

And those are the subsidized prices, available only with a two-year contract with AT&T (NYSE: T), the exclusive carrier of the Amazon Fire Phone. AMZN is also selling the Fire Phone at unsubsidized prices: $649 and $749.

That's getting into Apple Inc. (Nasdaq: AAPL) iPhone territory, although those prices are $100 less than the comparable models of the top-of-the-line iPhone 5S. Samsung Electronics' (OTCMKTS: SSNLF) flagship, the new Galaxy S5, is about the same price as the Fire.

So Amazon Chief Executive Officer Jeff Bezos is betting that the Fire Phone will be able to capture a slice of the high-end smartphone market by competing on features, not price, as everyone expected.

He might be right - the Amazon Fire Phone has a clever 3D display that lets users view objects from different angles by tracking the user's eye movements.

The Fire Phone also has a feature called Firefly, which uses the phone's 13-megapixel camera to recognize books, phone numbers, bar codes, website addresses, QR codes, and more. It uses the phone's microphone to recognize songs.

And of course, anything the Amazon Fire Phone recognizes that also happens to be for sale on Amazon.com can be purchased with just a touch of a button.

AMZN has also thrown in the clever Mayday feature, which is also available on the Kindle Fire tablet. Mayday is 24/7 tech support with a twist - a customer support person appears on the screen and talks you through your problem live, even taking control of the device remotely if needed.

But the question is, will all that be enough to lure people away from the Galaxy S5, with its larger, crisper display, or the iPhone 5S, with its fingerprint recognition and soon-to-arrive apps for monitoring health and controlling the home?

Amazon faces a tough fight to be sure, but it didn't have much choice...

Why Amazon (Nasdaq: AMZN) Needs the Fire Phone

The stakes are very high for Amazon. Smartphones are increasingly becoming central to people's lives, and that includes shopping.

New technology like Apple's iBeacon allows stores to beam ads to people's phones - both iPhones and those that use Google Inc.'s (Nasdaq: GOOG, GOOGL) Android - based on which aisle they're standing in.

If more people start acting on ads like that, they'll be buying fewer things from Amazon.

So in one sense, the Amazon Fire Phone is a defensive move. The Firefly feature in particular is clever and useful, but it also directs people to Amazon to make a purchase.

You can't blame AMZN for not wanting to leave one of the primary tools of e-commerce - the smartphone - entirely in the hands of rivals like Apple and Google.

That also could partly explain the premium pricing. The customers most likely to shop on their smartphones are also the ones with the most money - the ones that buy top-of-the-line models like the iPhone.

That's the customer Amazon wants to compete for.

And while this strategy is riskier than what it did with the Kindle Fire tablet - pricing it below most competitors to gain market share - it offers a bigger payoff if successful.

SunTrust analyst Robert Peck ran a model of how much revenue the Amazon Fire Phone could generate based on market share estimates of 5%, 10%, and 15%. He included not just revenue from sales of the phone, but also additional sales of Amazon.com merchandise and Amazon Prime memberships.

Though Peck may not have anticipated the high selling price or that AMZN is including one year free of Prime service, his numbers show that the Fire Phone could have a significant impact on Amazon's top line.

If the Amazon Fire Phone can take 5% of the market, Peck sees additional revenue of $1.1 billion. For a market share of 10%, he projects just under $2.25 billion, and for a market share of 15% he sees additional revenue of $3.37 billion.

Of course, we don't know the cost to Amazon for not doing the Fire Phone, which could be quite damaging over time.

Amazon has done everything it can to create a product that will prevent sales from migrating to competitors while encouraging more sales on its own site. The payoff, if it works, will be huge.

For the moment, Wall Street is optimistic. AMZN stock was up 2.69% to $334.38 Wednesday following the announcement.

But going after Apple and Samsung head on won't be easy.

Are you planning to buy the Amazon Fire Phone? Do you think it has a chance of stealing sales from the iPhone and Galaxy S5? Share your opinions on Twitter @moneymorning or Facebook.

Editor's Note: While investors have been fond of AMZN stock, it does not yet pay a dividend. But in recent years not only have more tech giants started to pay dividends, they're delivering high yields as well. Here's what's behind this trend - and five stocks to get you started...

Related Articles:

Benzinga: Breakdown of Amazon Phone Opportunity by SunTrust

Mt. Gox Files for U.S. Bankruptcy Protection

Chris Ratcliffe/Bloomberg via Getty ImagesA poster alerting customers that bitcoin is accepted as payment sits behind the counter inside the Old Shoreditch Station cafe in London. WILMINGTON, Del. -- Mt. Gox, once the world's largest bitcoin exchange, received U.S. bankruptcy protection on Monday to temporarily halt U.S. legal action against the Japanese company by traders who allege the operation was a fraud. Judge Harlin Hale in Dallas granted temporary bankruptcy protection to Mt. Gox, which had filed for bankruptcy protection in Japan in February. Attorneys for Mt. Gox said without bankruptcy protection the company would be irreparably harmed by a proposed class action in Chicago federal court and a breach of contract case in Seattle federal court. Mt. Gox filed for bankruptcy in Japan last month after it said it may have lost 750,000 of its customers' bitcoins as part of an attack by hackers. The plaintiff leading the Chicago lawsuit was scheduled Tuesday to ask a federal judge to freeze Mt. Gox's U.S.-based servers and other computer equipment and to set up a trust over Mt. Gox's assets. Mt. Gox's founder, Mark Karpeles, was scheduled to be deposed later this month in the Seattle lawsuit. The attorney leading the class action blasted the bankruptcy as a ruse. "This case involves a massive fraud," said Steven Woodrow, an attorney leading the class action, told Hale. "They claim incredibly that they will preserve assets and protect assets by entrusting the servers and other property to Mr. Karpeles. Respectfully, your honor, that is the definition of the fox guarding the henhouse." Mt. Gox said in papers filed with the Dallas court that the hacking attack was the subject of an intense investigation that indicated so far the bitcoins were lost as a result of a flaw in the software algorithm that underlies bitcoin, the digital currency. An attorney for Coinlab, which sued Mt. Gox in Seattle for breaching a contract last year, said her client was troubled by what appeared to be fraudulent behavior by Karpeles in the days leading up the U.S. bankruptcy filing. "We don't have proof yet but we do have concerns about the movement of hundreds of millions of dollars in bitcoins over the weekend, moved by Mr. Karpeles," said Jane Pearson, an attorney with Foster Pepper. Mt. Gox's attorney, David Parham, denied there was any fraud and said he believed Karpeles and Mt. Gox were complying with the Japanese bankruptcy proceeding. The Chapter 15 filing allows Mt. Gox to ask the U.S. Bankruptcy Court to recognize its foreign bankruptcy and to assist in the Japanese proceedings by protecting its U.S.-based assets. Hale's order protects Mt. Gox's U.S. assets until April, when the parties will return to court and Mt. Gox will seek a permanent stay of U.S. litigation. Hale said his order staying litigation did not apply to non-debtors, presumably Karpeles. Karpeles was named in a proposed class action filed in late February by Gregory Greene, an Illinois resident. The lawsuit proposes to represent all U.S. residents who paid a trading fee to Mt. Gox and those who had bitcoins or other currency with the exchange when it halted bitcoin withdrawals on Feb. 7. Greene is seeking to recoup millions of dollars lost when the mtgox.com website went down and prevented traders from selling as bitcoin prices plummeted. Mt. Gox is also defending a lawsuit in federal court in Seattle by CoinLab for breach of contract. CoinLab is seeking damages of $75 million from Mt. Gox. Mt Gox's tangled web of shell corporations brings turns the spotlight back to an issue U.S. law enforcement authorities have perennially raised with Congress. Several states, including Delaware, where Karpeles had at least two registered corporations, let foreigners register new corporations without ever setting foot in the United States, relying instead on agents to act as conduits for the companies' owners. The agents send along documents like lawsuits and other business communications addressed to the companies but keep no records themselves. They don't keep track of who the company's true beneficial owner may be. When investigators want to find out more about these companies' activities, the only information they can get from the agents is contact information for whatever overseas entity has been designated to receive correspondence about the company. Such is the structure of Mutum Sigillum, a company Karpeles registered in Delaware. He used it to interact with a U.S. bank through Dwolla, an online payment network. Real money passed through Mutum Sigillum (which means "worthless little symbol" in Latin) but it left almost no paper trail in the United States. It was registered in Delaware by Vincent Allard, a French Canadian lawyer who for the past 13 years has been living in Dover, Del., and, along with his daughter, running a business acting as a registered agent for Delaware corporations. Allard specializes in creating companies for people from Francophone countries, since he speaks French. When reached by phone on March 5, Allard said he hadn't heard of Mt. Gox's bankruptcy in Japan and would nevertheless have almost nothing to offer investigators if any were to come knocking. He was not in the office Monday and didn't immediately respond to a request by email for comment on the Texas filing. Representatives from the Federal Bureau of Investigation and other law enforcement agencies have been lobbying Congress for years to pass a bill that would prohibit states from allowing the incorporation of shell companies without better documentation and more oversight. The Incorporation Transparency and Law Enforcement Assistance Act, introduced in 2011 by Sen. Carl Levin, is before the Senate Judiciary Committee awaiting a markup. The bill would require states to record the identities of the beneficial owners of corporations they register and keep a corresponding driver's license or passport number, or a copy of a foreign passport on hand, ready to turn over to law enforcement officials if necessary.

Sunglasses-Wearing Bill Gross Says He’s a ‘Cool Dude,’ Forecasts 3%-5% Return

Bill Gross strode onto the stage at the Morningstar Investment Conference Wednesday wearing aviator sunglasses.

“When you’re 70 years old, you need props,” he told the audience in Chicago, before gazing at his own image on the massive screens flanking the stage and pronouncing himself “one cool dude.”

Gross, co-founder and chief investment officer of PIMCO, then raised the issue of the lambasting he has received in the press this year by recalling the tale of The Manchurian Candidate — the movie in which North Korean captors brainwash American soldiers into repeating endlessly their admiration for a heretofore disliked U.S. officer whenever they saw a red queen playing card. He jokingly said he was inviting reporters to a poker game at PIMCO, where he would produce a red queen and have them repeat “Bill Gross is the kindest, warmest, gentlest man…”

Tongue-in-cheek remonstrations of the press aside, Gross then launched into a defense of his Total Return bond fund, which he compared to a Mercedes “that delivers the ride you expect”: better returns than the index with less risk. And belying the perceptions of his negative press, that’s just what PTTRX has delivered this year, he said: higher returns than the index, before fees.

PIMCO can deliver that performance, he said, because of its belief in “template investing,” a belief shared by other great investors like GMO’s Jeremy Grantham and Berkshire’s Warren Buffett. Saying he might be “handing over the keys” to the PIMCO Mercedes, he said his template starts with a “world class, bottom-up research team” that helps build a portfolio that includes ‘Bonds Plus,’ which he called “Treasuries, but which are really corporate bonds in disguise” using interest rate futures and swaps to complement 6- to 12-month floating rate bonds.

The second part of the portfolio is bonds with intermediate maturities, including five-year Treasuries, “which have essentially delivered 30-year Treasury” returns that “roll down a positive yield curve, which is the essence of capitalism. The secret is patience.”

The third part of the portfolio template is to “employ volatility,” such as can be gained through buying 30-year mortgages despite their greater risk: “We’re willing to sleep less and perform more.”

Taken together, that template consistently adds “75 basis points in structural alpha each year.”

Moving onto the markets, Gross spent some time discussing the “New Neutral,” the PIMCO-coined term describing what the real policy rate is on fed funds by the Federal Reserve, which was the substance of his last monthly investment commentary. Since 1981, he said, “real policy rates have come down, down and now are negative.” The real rate has a “critical influence” on both stocks and bonds, but a real rate of 1% at the time of the financial crisis “broke the financial markets; cracked the economy.” However, at a 0% real rate, “bonds make sense” and “volatility is dampened.”

Now that the real rate is likely to be in negative territory, Gross says “we expect 3% to 4% returns from bonds; 4% to 5% from stocks,” and PIMCO expects “we’ll have a market where you can take measured risks.” Where will rates go in the future? Gross expects the U.K. will be “first to cut the real rate.”

He closed by thanking the audience for listening to his “late-in-life saga,” before proclaiming that “PIMCO is thriving in 2014. You’d be lucky to buy it; I have.”

---

Check out PIMCO’s Gross Cruises Into ‘New Neutral’ on ThinkAdvisor.

Mid-Afternoon Market Update: Kroger Surges On Upbeat Results; Pier 1 Shares Slide

Related CNL Market Wrap For June 19: Stocks Little Changed, Gold and Silver Higher Mid-Day Market Update: Kroger Surges On Upbeat Results; Pier 1 Shares Slide

Nearing the final hour of trading on Thursday, the Dow traded down 0.09 percent to 16,891.47 while the NASDAQ declined 0.28 percent to 4,350.84. The S&P also fell, dropping 0.06 percent to 1,955.90.

Leading and Lagging Sectors

Utilities sector was the top gainer in the US market on Thursday. Top gainers in the sector included Cleco (NYSE: CNL), Korea Electric Power (NYSE: KEP), and Regency Energy Partners LP (NYSE: RGP).

Technology shares fell around 0.27 percent in Thursday’s trading. Top decliners in the sector included TechTarget (NASDAQ: TTGT), down 5.3 percent, and ChinaCache International Holdings (NASDAQ: CCIH), off 2.11 percent.

Top Headline

BlackBerry (NASDAQ: BBRY) reported a narrower-than-expected fiscal first-quarter loss.

BlackBerry posted its quarterly GAAP net income of $23 million, or $0.04 per share, versus a year-ago loss of $84 million, or $0.16 per share. Excluding certain items, the company lost $0.11 per share.

Its revenue fell 1% to $966 million from $976 million. However, analysts were expecting for a loss of $0.28 per share on revenue of $1.047 billion.

Equities Trading UP

Measurement Specialties (NASDAQ: MEAS) shares shot up 10.46 percent to $86.16 after the company agreed to be acquired by TE Connectivity (NYSE: TEL) for $86 cash per share.

Shares of The Kroger Co (NYSE: KR) got a boost, shooting up 5.35 percent to $49.80 after the company reported strong Q1 results and raised its FY outlook.

BlackBerry (NASDAQ: BBRY) shares were also up, gaining 10.62 percent to $9.17 after the company reported a narrower-than-expected first-quarter loss.

Equities Trading DOWN

Shares of Pier 1 Imports (NYSE: PIR) were 12.71 percent to $15.94 after the company reported a drop in its fiscal first-quarter profit and lowered its forecast.

KBR (NYSE: KBR) shares tumbled 8.17 percent to $24.17 after the company reported a Q1 loss of $0.29 per share on revenue of $1.63 billion. The company said it would undergo a strategic review of its businesses.

Rite Aid (NYSE: RAD) was down, falling 3.83 percent to $7.16 after the company reported a drop in its first-quarter earnings. Rite Aid’s quarterly profit declined to $41.4 million, or $0.04 per share, from a year-earlier profit of $89.7 million, or $0.09 per share.

Commodities

In commodity news, oil traded up 0.53 percent to $106.15, while gold traded up 3.59 percent to $1,318.40.

Silver traded up 5.42 percent Thursday to $20.85, while copper rose 0.56 percent to $3.08.

Eurozone

European shares were higher today.

The eurozone’s STOXX 600 surged 0.58 percent, the Spanish IBEX Index gained 0.68 percent, while Italy’s FTSE MIB Index rose 0.85 percent.

Meanwhile, the German DAX gained 0.74 percent and the French CAC 40 climbed 0.72 percent while UK shares gained 0.45 percent.

Economics

US initial jobless claims fell 6,000 to 312,000 in the week ended June 14. However, economists were projecting claims to reach 314,000 in the week.

The Philadelphia Fed's manufacturing index rose to 17.80 in June, versus a reading of 15.40 in May. However, economists were expecting a reading of 14.0.

The Conference Board's index of leading indicators increased 0.5% to 101.7 in May.

Data on money supply will be released at 4:30 p.m. ET.

Posted-In: Earnings News Guidance Eurozone Futures Commodities Federal Reserve Markets

© 2014 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

  Most Popular UPDATE: Morgan Stanley Initiates Coverage On BlackBerry Fuel Cell Stocks Rally Amid Bullish Analyst Comments Breakdown Of Amazon Phone Opportunity By SunTrust Advances In HIV, Hep C Treatments Could Spark Renewed Interest In Biotech Stocks Wells Fargo Sees 90% Probability Of Merger Between Reynolds, Lorillard 5 Stocks Expected To Grow In The Natural Foods Industry Related Articles (CCIH + BBRY) Market Wrap For June 19: Stocks Little Changed, Gold and Silver Higher Mid-Afternoon Market Update: Kroger Surges On Upbeat Results; Pier 1 Shares Slide BlackBerry Q1 Earnings Conference Call Highlights Mid-Day Market Update: Kroger Surges On Upbeat Results; Pier 1 Shares Slide Mid-Morning Market Update: Markets Mostly Flat; BlackBerry Results Beat Estimates Fed Makes Everybody Happy - Ahead of Wall Street

Ukraine Crisis Drives the Markets

The crisis in the Ukraine has escalated to include the threat of armed combat, and the global markets reacted as expected yesterday, writes MoneyShow's Jim Jubak, who cites some examples, along with offering his prediction as to how long this crisis may last.

Gold and energy commodities were up yesterday. So were safe haven currencies, such as the yen.

The Russian ruble was down. So was the euro and emerging market currencies, and markets took a licking.

Pretty much what you'd expect when the crisis in the Ukraine has escalated to include a threat of armed conflict between Russian and Ukrainian soldiers.

The biggest move was in the share prices of energy companies that might benefit if natural gas prices soar due to a cut-off in gas exports from Russia across the Ukraine, and into Western Europe.

For example, shares of Norwegian oil and gas producer Statoil (STO) were up 2.35% yesterday, as of 2:00 PM New York time.

Shares of energy companies without any near-term way to take advantage of any stoppage were off, with Chesapeake Energy (CHK) down 1.2% and France's Total (TOT) off 2.31%.

The oil benchmark price of the West Texas Intermediate climbed 1.77%. The Brent benchmark rose 1.6%.

Most of the moves I saw yesterday weren't specific to the crisis, but instead, were examples of the standard response of traders to heightened risk. For example, the safe haven yen rose to 101.4 to the US dollar. The euro was off 0.43% against the dollar. Gold was up 2.15%. The iShares MSCI Emerging Markets ETF (EEM) was down 1.89%.

The ruble was the big crisis's specific loser, down 1.4% yesterday, against a basket of currencies—despite an increase in benchmark interest rates from the Russian central bank. That continued the Russian currency's slide in 2014. The ruble is now down more than 10% for 2014.

The slow response of US and EuroZone diplomats to the crisis, with lots of talking and not much action (not necessarily a bad thing if the alternative is shoot first and talk later), suggests that this crisis will drag on for a while. An "emergency" meeting of EuroZone leaders isn't scheduled to take place until Thursday, March 6.

Full disclosure: I don't own shares of any of the companies mentioned in this post in my personal portfolio. When in 2010 I started the mutual fund I manage, Jubak Global Equity Fund, I liquidated all my individual stock holdings and put the money into the fund. The fund may or may not now own positions in any stock mentioned in this post. The fund did own shares of Chesapeake Energy and Statoil as of the end of December. For a full list of the stocks in the fund see the fund's portfolio here.

Buyback Binge Surges to New High

U.S. companies returned a record amount of cash to shareholders through stock buybacks and dividend payouts in the first quarter, continuing a trend that has helped drive the stock market’s record-setting rally.

Stock buybacks and cash dividends reached $241.2 billion during the first three months of the year, exceeding the previous record of $233.2 billion set in the fourth quarter of 2007, according to S&P Dow Jones Indices. The new high is more than three times the $71.8 billion total in the second quarter of 2009, when the economy was in the early stages of recovering from the financial crisis.

The large payouts have played a prominent role in the market’s record-breaking rally. After gaining 30% last year, the S&P 500 is up more than 5% so far in 2014 and has has set 19 new highs this year.

“I expect this trend of greater shareholder return to continue throughout 2014, as activists remain strong, interest rates low, and companies awash in cash,”  said Howard Silverblatt, senior earnings analyst at S&P Dow Jones Indices.

More In Buybacks Buyback Binge Surges to New High Not Buying Lululemon's Buyback Airlines (Finally) Joining Rest of Stock Market on Capital Returns Morning MoneyBeat: Buybacks Lose Some Luster Tencent Buyback Spurs Rally

Companies particularly splurged on buybacks during the first quarter. They bought back $159.3 billion worth of stock during the first three months of 2014, up 59% from a year ago and a 23% increase from the fourth quarter.

Apple Inc.(AAPL), International Business Machines Corp.(IBM) and Exxon Mobil Corp.(XOM) spent the most on buybacks in the period. Apple repurchased $18 billion worth of stock, while IBM bought back $8.2 billion of its stock and Exxon repurchased $3.9 billion of stock. Five of the top 10 companies that implemented the biggest buybacks hailed from the tech sector, including Cisco Systems Inc.(CSCO), Oracle Corp.(ORCL) and Corning Inc.(GLW)

Buybacks increase a company’s earnings per share by reducing the supply of stock, making each share more valuable. For instance in 1993 IBM had 2.3 billion shares outstanding. Today, it has about 1 billion. The stock is up more than 900% in that time frame.

“Keeping up with the current bull market means that companies have to pay more for the same number of shares, and activists are demanding more of a return, both via dividends and buybacks," Mr. Silverblatt said. “For buybacks the true test is share count reduction, and we are seeing more companies achieve share count reduction as they increase their [earnings per share].”

Many investors have warmed to strategies that invest in companies boosting their payouts. The S&P 500 Buyback Index, which measures the 100 stocks with the highest buyback ratios, has rallied 24% over the past 12 months, compared to the broad S&P 500′s 18% gain over that same time frame.

But the rally has slowed in recent months. Since Jan. 1, the Buyback Index is up 4.7%, underperforming the S&P 500′s 5.1% gain.

Critics say companies would be better off deploying their capital in other ways, such as boosting hiring, investing in research and development or making deals. Companies also have a history of buying back shares at the wrong time. At the end of 2007, buyback activity was near record levels just as stocks were in the early stages of a precipitous drop.

“The key question for the second quarter is did they do it to boost a poor first-quarter earnings period that was impacted by weather conditions,” Mr. Silverblatt says, “or was it a shift towards more enhanced earnings via share count reduction, similar to what we experienced in 2006 and 2007?”