Finding Super Value In Grocery Stores -- Not That One

Coming from the world of retail, I'm happy for someone to market to me when that marketing is good. The unexpected purchase that comes along only because a good sales person really gets me fired up is a purchase that I love to make. But sometimes what the company thinks is exciting strikes me as odd. In its last earnings release, as one of a mere five lead points, SUPERVALU (NYSE: SVU  ) highlighted that sales fell less quickly this quarter. Huzzah!

Now, in the company's defense, it also called out a drop in admin costs and a nice bit of debt refinancing, but the overall message was mediocre. SUPERVALU had a drop in revenue, a fall in comparable-store sales, and a decline in operating income.

All the hope that's fit to print
On its earnings call, SUPERVALU CEO Sam Duncan summed up the company's current position nicely. He said, "We still have a great deal of work ahead of us but the management team and I are laying the foundational pieces that have to be in place for us to attract more retail accounts through our distribution businesses, more licensees to our Save-a-Lot format and more customers to all of our retail stores." In short, the company is at the beginning of a long road.

Investors in SUPERVALU bought into the hope on the day of the announcement, and the company's shares had jumped up 22% at one point in the day. Then, waking in the cold, bright sunshine of the following day, everyone peeled their eyes back and realized that maybe it wasn't that great and the stock pulled back. It's still up 8% from before the earnings release, but some of the hype has faded.

The reason investors were willing to dial back so quickly is twofold. First, the company has a substantial short position held against it and there may have been a squeeze on the day of the announcement as losers sold off to cut their losses. More importantly, investors may have reconsidered how SUPERVALU was positioned against its competitors.

The land's lay
With its falling sales, negative operational income, and lackluster brands, SUPERVALU isn't going to win a beauty contest anytime soon. The line of better choices is long, and investors are quick to move to the new hot thing in the sector. Right now, Kroger (NYSE: KR  ) and Whole Foods (NASDAQ: WFM  ) both represent more interesting ways to make some money in the grocery store business.

Each has its specific perk, but all three are winning in ways that SUPERVALU is losing. Kroger recently acquired Harris Teeter, a regional grocer with higher margins on the East Coast. It also posted a 3.3% year-over-year gain in comparable-store sales last quarter along with a 2.9% operating margin. The stock has been on a run recently due to acquisition news and strong results. Kroger is up 50% year to date, though that's nowhere near the 196% gain that SUPERVALU has seen as speculation about its future has run rampant.

Whole Foods has played the very opposite end of the grocery spectrum, but it's done so in a consistent manner. The company keeps putting up strong sales growth figures, with year-over-year comparable sales rising about 7% in both of its most recent quarters. Operating margin is where Whole Foods sees the biggest distinction, and last quarter it rose to 7.5%, putting other grocers to shame. The stock price reflects that strength, and Whole Foods trades at a costly P/E of 40 compared to Kroger's P/E of 13 -- SUPERVALU doesn't have an 'E', and thus no P/E, either.

In the long run, I trust the strength at Kroger and Whole Foods much more than the speculation and hope that seem to be fueling SUPERVALU, right now. That's not to say that the company won't be able to turn it around -- just that there's a lot riding on a plan.

The retail space is in the midst of the biggest paradigm shift since mail order took off at the turn of the last century. Only those most forward-looking and capable companies will survive, and they'll handsomely reward those investors who understand the landscape. You can read about the 3 Companies Ready to Rule Retail in The Motley Fool's special report. Uncovering these top picks is free today -- just click here to read more.

Catalysts Energize Energy Transfer

Few investment categories offer the same attractive combination of present yield with growth potential as does well-positioned MLPs, says Igor Greenwald of MLP Profits.

Many pipeline operators have a huge growth opportunity in front of them. Advances in drilling techniques have unlocked the energy potential of new resource basins. And many of these are in desperate need of new pipes to process and transport the swelling streams of oil and gas they're producing.

The domestic bounty is rapidly transforming America into a low-cost producer and exporter of processed fuel.

The financial incentives now in place will assure rising export volumes for the foreseeable future and in turn require huge infrastructure investments, such as are needed, for example, to liquefy natural gas or to crack condensate into naphtha.

These are not trends that will reverse simply because the 10-year yield has rebounded to 2.5%. These are projects that will provide solid returns years into the future, for the partnerships that pick the right opportunities and execute well.

Like any investment, MLPs come with many hazards. The focus on yield can blind investors to excessive borrowing or other unsustainable business strategies that can maintain the appearance of profitable growth for a time.

Better to buy based on well-defined business opportunities and to know that if these are grasped, the distribution growth will follow. There are no low-risk 10% yields, but plenty reasonably secure 5% ones that could grow over time.

All of this is an argument in favor of the most financially stable MLPs with the brightest growth prospects, and thankfully, there are still some that are fairly valued. Many have weathered numerous booms and busts while vastly outperforming the stock market. They'll be around, and building the pipelines we badly need, long after interest rates have marched much higher.

Meanwhile, incentive distribution rights (IDRs) can boost the income stream of a general partner over time, to the corresponding detriment of limited partners. IDRs are especially lucrative after a long period of steady growth, which is exactly what's taken place among MLPs in the five years since the financial crisis hit.

One upshot was our new recommendation of Energy Transfer Equity (ETE) as a general partner poised to capitalize on lucrative IDR streams from several subsidiary partnerships.

ETE is the general partner of Energy Transfer Partners LP (ETP), the fourth-largest MLP by market value, and operator of natural gas gathering and transportation pipelines with a combined length of 47,000 miles.

ETE is also the general partner of another pipeline operator, Regency Energy Partners (RGP).

And ETP is itself a general partner of another MLP, Sunoco Logistics SXL. All of these MLPs owe incentive distribution rights, directly or indirectly, to ETE.

During its recent acquisition spree, ETE agreed to forego IDR payments from some of the businesses taken over by its affiliates, moves that will cost it $245 million next year, but less thereafter with the prospect of a big spur to growth, once these waivers expire in a couple of years.

Barclays recently estimated that after the waivers ETE's income stream could grow at a 15% annually compounded rate for five years, thanks to subsidiary IDRs.

So today's relatively modest 4.2% yield could be markedly higher in a few years without any change in the unit price.

ETE is a stable, financially secure MLP, with visible growth catalysts and the tailwind of affiliated IDRs. With units trading right around our initial price target, we're raising it to continue taking advantage of this opportunity. Buy ETE below $69.

Subscribe to MLP Profits here...

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This Real Estate Opportunity Killed My Business... But It Could Make You 30% Gains

In search of a second income after graduating from college, I started a small real estate publication that worked with local real estate agents to help promote their home listings. 

By broad standards, my venture could be labeled a success: On a startup cost of just $20, it had a 15-year run without needing another dime to keep it solvent. Although it certainly didn't make me wealthy, it was self-sustaining and provided me with enough extra cash to drive nice cars and purchase several decent home properties.

 

Then, the cash cow began to die. I was selling less in marketing and advertising services. By 2005, there wasn't enough money coming in to keep the doors open. The combination of the Internet, the housing bubble, and a consolidation of regional real estate shops had squashed the need for my little company. The market had spoken, and my business was finished.

One of the main catalysts for my company was the fragmented nature of the real estate business: It was mostly mom-and-pop shops with several regional chains mixed into the wide variety of offices dedicated to selling residential real estate. 

Other than the often bug-filled and severely lacking multiple listing services, there was no way for real estate agents to differentiate themselves and promote their home listings outside of their company network. My company offered an inexpensive and effective method of intra-real estate office marketing. Other than the Internet, which was slow to catch on with the often middle-age and older real estate agents, consolidation of real estate sales offices hurt my business much more than even the market crash. However, at the same time, this consolidation provides a great way for investors to profit.

Arguably the most successful of these real estate company consolidation firms is Madison, N.J.-based Realogy (NYSE: RLGY).

Given the recent rebound in the real estate market, I think it's an ideal time to invest in this growing company. Realogy is the world's leading franchisor of real estate brokerages. The company's franchise members operate 13,500 offices and employ nearly 250,000 sales associates in more than 100 countries. The company owns household names such as Better Homes and Gardens Real Estate, Century 21 Real Estate, Coldwell Banker, Coldwell Banker Commercial, ERA Real Estate, Sotheby's International Realty and NRT, not to mention related businesses such as relocation service company Cactus Corp. and Title Resource Group, a settlement services and title company. 

Realogy posted impressive second-quarter 2013 results with net revenue of more than $1.5 billion representing a 17% increase from the same period last year. Earnings before interest, taxes, depreciation and amortization (EBITDA) was up 27%, to nearly $280 million. In addition, the $330 million retirement of high-cost debt and the $492 million refinancing of 11.5% debt with $500 million of nearly 3.4% debt will continue to help the company's bottom line. Realogy expects year-over-year improvement of 17% to 19% in third-quarter home sale transaction volume. 

Considering that real estate firms earn commission from selling other people's property, real estate may be the perfect business: no inventory or commissioned salespeople, but unlimited upside. Combine this potential with the upward swing in the real estate market, and it equals a great opportunity to invest in Realogy.

Risks to Consider: Things are looking positive in the real estate sector. But there is no guarantee the positive trend will continue. The real estate market is tightly tied to the economy as a whole. Any further issues with the macroeconomic picture could negatively affect this stock. Always use stops, diversification and position size wisely when investing.

Action to Take --> Taking a look at the technical picture, the price has been in a choppy channel between $46 and $52 on the daily chart. Buying now in between $46 and $47 should allow you to get in at the bottom part of the current range. My 12-month target is $60. Stops at $42.50 will allow for more potential consolidation prior to the next upswing.

P.S. -- Part of investing is finding little-known stocks like Realogy that offer huge upside... That's why we've recently put together a special report on 17 little-known "spin-off" companies. Because of the way they were formed, these companies have beat the market 7-to-1 in the past decade and raised dividends as much as 600%, yet most investors don't understand them at all. To get the names and tickers of some of these stocks immediately, click here.

Best Performing Stocks To Watch Right Now

Poor Bank of America (NYSE: BAC  ) . After seeing its share price rise spectacularly in the week prior to its first-quarter earnings report, the stock took a real drubbing immediately after that report was issued. Today, it is getting beat up anew, and I think it is still feeling the consternation of investors about its less-than-sparkly earnings announcement.

Was the report really that bad? Sure, there were weak points, such as mortgage banking malaise, as well as continuing legal hassles in regards to its Countrywide smudge pot of stinky legacy loans. But there were bright spots, too: The streamlining process is working, and B of A has reduced nonperforming assets by $5 billion year over year. Plus, its Bank of America Merrill Lynch division is kicking butt, bringing home the bacon to the tune of $3.68 billion�-- a 7% boost from the year-ago quarter's $3.44 billion.

Best Performing Stocks To Watch Right Now: Geodex Minerals Ltd.(GXM.V)

Geodex Minerals Ltd., a mineral resource company, engages in the acquisition, exploration, and development of mineral properties in Canada. The company focuses on exploring tungsten, molybdenum, indium, rare earth metals, copper, lead, zinc, silver, tin, and gold deposits. Its principal property includes the Sisson Brook property, an open-pittable tungsten-molybdenum deposit located in New Brunswick, Canada. The company is headquartered in Vancouver, Canada.

Best Performing Stocks To Watch Right Now: CACI International Inc. (CACI)

CACI International Inc, through its subsidiaries, provides information solutions and services to the U.S. federal government and commercial markets in North America and internationally. The company offers enterprise information technology (IT) solutions and services for the design, development, integration, deployment, operations and management, sustainment, and security of clients� infrastructure; information solutions and services that automate the knowledge management lifecycle; and enterprise-level system solutions in the domain of procurement, financial, human capital, logistics, and supply chain management. It also offers intelligence, surveillance, and reconnaissance solutions; command and control solutions to support military, homeland security, law enforcement, border security, emergency response, and disaster relief missions; and develops and manages logistics information systems, and simulation and modeling toolsets, as well as provides logistics engineering se rvices. In addition, the company offers cyber security services that support preparing for, protecting against, detecting, reacting, and responding to the cyber threats; integrated security solutions and services for mitigating and countering the effects of natural, technological, and man-made hazards; geospatial solutions relating to defense, intelligence, homeland security, and commercial applications; and government investigation and litigation support solutions. Further, it provides healthcare IT solutions; identity management solutions; program management, and system engineering and technical assistance services to government program offices; mobility solutions and services; and planning, design, implementation, and management solutions that resolve technical or business needs for commercial and government clients in the telecommunications, education, financial services, healthcare services, and transportation sectors. The company was founded in 1962 and is headquartere d in Arlington, Virginia.

Top 10 Warren Buffett Stocks To Buy For 2014: First Commonwealth Financial Corporation(FCF)

First Commonwealth Financial Corporation operates as the holding company for First Commonwealth Bank that provides consumer and commercial banking services to individuals and small and mid-sized businesses in central and western Pennsylvania. The company offers personal checking accounts, interest-earning checking accounts, savings accounts, health savings accounts, insured money market accounts, debit cards, investment certificates, fixed and variable rate certificates of deposit, and IRA accounts. It also provides secured and unsecured installment loans, construction and mortgage loans, safe deposit facilities, credit lines with overdraft checking protection, and student loans, as well as Internet and telephone banking, and automated teller machine services. In addition, the company offers commercial banking services, including commercial lending, small and high-volume business checking accounts, on-line account management services, ACH origination, payroll direct deposi t, commercial cash management services, and repurchase agreements. Further, it provides various trust and asset management services, as well as a complement of auto, home, business, and term life insurance. Additionally, the company offers annuities, mutual funds, stock, and bond brokerage services through an arrangement with a broker-dealer and insurance brokers. It operates 115 community banking offices in western Pennsylvania and 2 loan production offices in downtown Pittsburgh and State College, Pennsylvania. The company was founded in 1982 and is headquartered in Indiana, Pennsylvania.

Advisors' Opinion:

• [By Philip]

  Shares First Commonwealth Financial Corp.(FCF) of Indiana, Pa., closed at $4.75 Friday, declining 31% year-to-date. Based on a consensus price target of $6.46, the shares have 36% upside potential.

  Based on a quarterly payout of three cents, the shares have a dividend yield of 2.53%.

  First Commonwealth had $5.7 billion in total assets as of Sept. 30, operating 112 First Commonwealth Bank offices in 15 counties in western and central Pennsylvania.

  The company reported third-quarter earnings of $8.3 million, or 8 cents a share, increasing from $7.4 million, or 7 cents a share, during the second quarter, but declining from $10.6 million, or 11 cents a share, in the third quarter of 2010.

  The year-over-year earnings decline reflected an 8% decline in net interest income to a tax-adjusted $48.8 million in the third quarter, as the company saw an 8% decline in its loan portfolio, "as the result of more disciplined underwriting guidelines concerning geography and size for commercial loans, the managing down of large credit relationships over $15 million," and weak loan demand.

  The net interest margin declined to 3.81%, increasing from 3.76% the previous quarter, but declining from 3.90% a year earlier.

  Earnings were also affected by a $7.0 million third-quarter provision for loan losses, which was down from $9.1 million the previous quarter, but up from $4.5 million a year earlier.

  First Commonwealth's nonperforming assets ratio was 3.45%, increasing from 3.22% the previous quarter and 2.70% a year earlier, with one commercial credit relationship in Pennsylvania representing $32.8 million, or 17% of the company's $195.2 million in nonperforming assets.

  The third-quarter net charge-off ratio was 1.00% and reserves covered 1.81% of total loans as of September 30.

  Following First Commonwealth's earnings announcement, Sterne Agee analyst Mike Shafir reiterated his Buy rating on the shares, with a price target of $6.50, and said that "W! hile NPAs rose during the quarter, the company exhibited positive trends with a higher net interest margin, lower expenses, and a reduction in the pace of loan decline."

  The shares trade for 11.3 times the consensus 2012 EPS estimate of 42 cents, and 0.8 times their Sept. 30 tangible book value of $5.77, according to SNL Financial.

  Six out of nine analysts covering First Commonwealth rate the shares a buy, while the remaining analysts all have neutral ratings

Best Performing Stocks To Watch Right Now: First Interstate BancSystem Inc.(FIBK)

First Interstate BancSystem, Inc. operates as the bank holding company for First Interstate Bank that provides commercial and consumer banking services. Its deposit products include checking, savings, time, and demand deposits; and repurchase agreements primarily for commercial and municipal depositors. The company?s loan portfolio consists of a mix of real estate, consumer, commercial, agricultural, and other loans, including fixed and variable rate loans. Its real estate loans comprise commercial real estate, construction, residential, agricultural, and other real estate loans. The company also provides a range of trust, employee benefit, investment management, insurance, agency, and custodial services to individuals, businesses, and nonprofit organizations. These services include the administration of estates and personal trusts; management of investment accounts for individuals, employee benefit plans, and charitable foundations; and insurance planning. It serves indi viduals, businesses, municipalities, and other entities in various industries, including energy, healthcare and professional services, education and governmental services, construction, mining, agriculture, retail and wholesale trade, and tourism. The company operates 72 banking offices in 42 communities located in Montana, Wyoming, and western South Dakota. First Interstate BancSystem, Inc. was incorporated in 1971 and is headquartered in Billings, Montana.

Steinway Closes Sale of Flagship Building

Steinway Musical Instruments (NYSE: LVB  ) has ceased to be the owner of its iconic Steinway Hall in New York City. The company formally closed a deal to sell the building to a partnership headed by real estate concern JDS Development Group. Steinway received $46.3 million in the acquisition, and will recognize a taxable gain of roughly $22 million.

Steinway Hall is a 16-story edifice housing 247,000 square feet of office and retail space, located on prime Manhattan real estate in the borough's midtown area. It's the longtime home of the company's flagship retail outlet.

The firm doesn't seem to be mourning its loss. It has the right to occupy the building through September 2014 and, subject to agreement on the rent, extend that term for another four months. Besides, in the press release announcing the news, Steinway quoted its CEO Michael Sweeney as saying that the deal "positions us to prepare for the creation of a 21st century Steinway Hall in Manhattan that serves the needs of today's artists and customers just as the West 57th Street building did when it opened in 1925."

Can Microsoft Get It Right This Time?

Despite embarrassing sales, Microsoft (NASDAQ: MSFT  ) apparently hasn't given up on the Surface RT.

DIGITIMES is reporting that Microsoft will introduce a second generation of its maligned Surface tablet next month. NVIDIA will continue to provide the chips, according to the report, but the screen size will shrink from 10.6 inches to 8 inches.

The screen's not the only thing shrinking. The price tag of what may as well be the Surface RT Mini will be roughly chopped in half to the $249 to $299 range.

Price was the first of five reasons I singled out in predicting that the Surface RT would fail in October. It never made sense for Microsoft to match Apple's (NASDAQ: AAPL  ) iPad on price when is lacked developer support and the iOS stability and ecosystem.

Magnetically attaching keyboards and a touch-enhanced Windows RT version of Office Home and Student were never going to be enough.

Microsoft should've been this aggressive on pricing last year, even if it meant upsetting its hardware partners that were putting out their own Windows RT tablets. The Surface RT would've made a difference during the holiday shopping season. Now it has to worry about the market perception that Surface RT is doomed.

Industry tracker IDC reports that just 200,000 Surface RT tablets shipped during the first three months of the year. That's 0.4% of the market. Do you really think developers are going to support that platform unless Microsoft's cutting big checks to subsidize the support?

Microsoft has seen Apple's iPad Mini cannibalize full-sized iPads at a $329 price point. The cruel silver lining for Microsoft here is that there is apparently not much of a Surface RT market to eat into.

However, the Surface RT Mini will still be priced a lot higher than many of the smaller Android tablets. The brand also needs to recover, and that's a tall order in these tech cynical times.

Microsoft's Surface has problems and they run deep.

The titans of tech
It's incredible to think just how much of our digital and technological lives are almost entirely shaped and molded by just a handful of companies. Find out "Who Will Win the War Between the 5 Biggest Tech Stocks?" in The Motley Fool's latest free report, which details the knock-down, drag-out battle being waged by the five kings of tech. Click here to keep reading.

Weekend Edition: Porter Stansberry: Your bank account is in more danger than you thought

 Today, I (Porter) would like to share with you the primary secret of all central bankers... This secret explains why, despite rising wages and nominal economic growth, most people in America continue to get massively poorer.

 

Though you've probably heard about the concepts I'm going to explain, I'm pretty sure you don't fully understand them. But they're vitally important.

 

I'm talking about currencies and banking.

 

 The best way to explain this secret is to show you the consequences of these policies. Imagine placing $10,000 in a two-year bank CD. You see this money as your "rainy day" fund to handle emergencies and special purchases.

 

Two years later, you go to the bank to retrieve your money. When you arrive, the teller explains that instead of having $10,000, you now have just $8,000.

 

To most people, it's absurd to think that placing money in a "safe" bank account could result in losing 20% of your wealth. After all, every reputable bank has a security department that prevents theft. Plus, you'd probably instantly spot the losses by looking at your monthly statements.

 

 But the truth is, this exact thing happened to millions of Americans from 2006 to 2008. Every $10,000 placed into a conventional, U.S.-dollar bank account in early 2006 was worth 20% less two years later.

 

Amazingly, not one accountholder in 100 realized it. Not one accountholder in 100 understood the massive, hidden forces that caused this loss of wealth... which "clipped" 20% from every $10,000 in U.S. bank savings.

 

These hidden forces exist in the currency market. But most people have virtually no understanding of how that market works. We believe it's vitally important that you have a basic understanding of the currency markets and how governments around the world manipulate them... We want you to understand these forces so you can protect yourself... and even profit from the ongoing corruption of paper money.

 

 Most people believe currency fluctuations don't affect them... or that the whole subject is just too boring to pay attention to. After all, how much can the value of your bank account really swing up and down? The answer is a lot.

 

Below is a 10-year chart of the U.S. dollar index from mid-2003 to mid-2013. This index measures the dollar's value against a basket of foreign currencies, like the euro and the Japanese yen. It's the generally agreed-upon measure of the dollar's global trade value.

 

One look at this chart, and you'll see that big moves in the value of your bank account happen more often than you think. Double-digit percentage changes in value are taking place in the span of months... not years.

 

Again, we state: If you think holding U.S. dollars in a bank account is a boring, conservative idea... think again.

 

 

 Also... keep in mind that if you buy stocks, what you're really doing is simply moving your wealth out of dollars and into stocks. You are betting that stocks will rise in value versus the dollar. You do the same thing when you buy gold or real estate. You hope the asset you buy rises in value relative to the dollar.

 

Once again... by simply owning a bank account, you are making a currency bet. The same goes for owning stocks, real estate, or gold. There's just no way to escape the currency market.

 

Whether you like it or not, you're a currency trader.

 

 Although the hidden forces of the currency market dominate our economy, you probably don't even know they exist. You won't learn about them from your parents. You won't learn about them from your friends. Even business classes at top universities are largely useless for learning these forces.

 

This is an enormous problem... one that could have catastrophic consequences for your well-being. As the U.S. government's reckless monetary policies kick us toward financial ruin, knowing about these hidden forces could mean the difference between bankrupting your family... or safely making a fortune.

 

 One of my partners at Stansberry & Associates, Dr. Steve Sjuggerud, has studied and written about currencies for nearly 20 years. In fact, his PhD dissertation was about how currencies move.

 

I've asked him to share his immense knowledge and experience of these markets and forces with you. And he's written a new True Wealth currency "seminar."

 

In his presentation, he details how these forces work and their impact on every American. He also reveals several unique trades that will allow you to safely build a huge amount of wealth in the midst of currency fluctuations... including what he's calling "The Greatest Currency Trade of the Next 10 Years."

 

While Steve's recommended trades are related to currency movements, none of them involves risky, leveraged currency bets like most people think of when they hear "currency trade." These trades don't involve traditional currency trades at all (and all but one can be easily made in a conventional brokerage account).

 

 Out of fairness to Steve's True Wealth subscribers, we can't say much more about this report here. The most important thing to remember is that big currency moves can cause huge "ripple" effects in your life. There's no escape from currency fluctuations. Even if you own a simple bank account, you are "long dollars." Your wealth is tied to the movements in the U.S. dollar.

 

Steve understands these forces better than anyone. He knows that stuffing money under your mattress won't save you from these powerful forces. He understands that you must harness the power of currencies if you hope to generate and grow your wealth in the coming years.

 

We're at a major crossroads in the currency markets. Our government is in a "no way out" situation with its finances. You can't afford to sit on your hands and watch your purchasing power decline.

 

Fortunately, Steve's new report will provide you with all of the education you need to navigate this market. Reading it will take you less than 30 minutes. At the end, you'll know more than most bankers and MBAs.

 

We're confident you'll agree the education you get from Steve's research is better than any book or course you can buy. And we believe the recommended trades in Steve's report are absolutely necessary for building wealth in the coming years. We're already receiving tremendous feedback on the report and its educational benefits. Here are just a few things readers are saying:

 

•	Never had such a concise explanation about currencies combined with no nonsense usable investment info... thank you.
•	Hi Steve, Your article is simply fantastic.
•	Hey Steve, great issue, I learned a lot. I really value the educational issues the most. Porter has some great ideas and I love his insights too. I like the idea of having multiple ways to invest in an idea and I feel I understand what I am doing more with the more detailed explanations. I feel this kind of issue has much more value. This one is a keeper to be read again and again. Thanks.

 

 If you haven't read Steve's report yet, it's easy to get a copy. It's free with a zero-risk, money-back-guaranteed subscription to Steve's True Wealth service. We encourage you to sign up, access the report, and learn how to protect your finances. I'm sure you'll learn a lot from Steve's research. I know it will be worth your time. You can get started immediately right here. (This does not go to a long video.)

 

Regards,

 

Porter Stansberry

Can Google Stock Make It to $1,000?

Analysts in Google's (NASDAQ: GOOG  ) $1,000 club were probably hoping for some upside surprise when the company announced second-quarter earnings on July 18. Unfortunately, the report didn't get the Street excited. Could a dull earnings release prevent Google stock from reaching that big number?

Crunching the numbers
Analysts are rallying behind Google stock, with a median price target of $998. Among the 38 analysts covered by Yahoo! Finance, the high target is $1,175 and the low target is $810. At $885, these targets mean very little downside risk and excellent upside potential... at least according to this group of analysts.

Are they right? Let's double check.

Ultimately, the value of a business is a function of its future earnings potential. So let's first make sure that those' price targets are truly functions of their earnings estimates.

For the next five years, analysts, on average, expect EPS to grow at about 14.5% per annum. Given these EPS growth rates for the first five years, an average of 7.5% for the next five years, and a 3% for years beyond 10 years, a discounted cash flow valuation yields a fair value of about $958 per share -- not too far off analysts' median target of $998. So at least we know these analysts aren't fudging some other factor beyond earnings in order to reach a pretty target.

Now, let's check their growth assumptions based on historical non-GAAP year-over-year growth rates.

Source: Data from SEC filings for respective quarters shown.

Google's year-over-year EPS growth rates are certainly declining. The mobile and multi-screen operating environment is hurting the company's profitability. But a purely objective look at this trend suggests that analysts' average estimate for 14.5% EPS per annum for the next five years seems fairly conservative -- especially when you take into account Google's cash hoard that could be used to buy back shares during those five years.

Furthermore, Google's non-core businesses, particularly its hardware business, present other potential areas for future earnings growth.

Then there's the company's clear competitive advantage as both the world's largest search engine and digital ad network. Its search volume, advertising reach, and digital knowledge base give the company meaningful scale advantages that should protect the company's earnings for decades.

Are analysts right?
The analyst consensus for a $1,000 price appears to be on the right track. But stocks can do just about anything in a given 12-month period. So I don't like to speak in terms of 12-month price targets like analysts do. Foolish investors prefer to zoom out much further. In periods of five years or more, price typically follows value. On that note, here is the takeaway: I definitely think Google is worth $1,000 per share. Even more, I would even say that for investors with a time horizon greater than five years, Google is an excellent option to consider.

To read more about Google, check out The Motley Fool's latest free report: "Who Will Win the War Between the 5 Biggest Tech Stocks?" It details the knock-down, drag-out battle being waged by the five kings of tech. Click here to keep reading.

Top Medical Stocks To Watch Right Now

Although business headlines still tout earnings numbers, many investors have moved past net earnings as a measure of a company's economic output. That's because earnings are very often less trustworthy than cash flow, since earnings are more open to manipulation based on dubious judgment calls.

Earnings' unreliability is one of the reasons Foolish investors often flip straight past the income statement to check the cash flow statement. In general, by taking a close look at the cash moving in and out of the business, you can better understand whether the last batch of earnings brought money into the company, or merely disguised a cash gusher with a pretty headline.

Calling all cash flows
When you are trying to buy the market's best stocks, it's worth checking up on your companies' free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That's what we do with this series. Today, we're checking in on Rochester Medical (Nasdaq: ROCM  ) , whose recent revenue and earnings are plotted below.

Top Medical Stocks To Watch Right Now: Cell Therapeutics Inc (CTIC.A)

Cell Therapeutics, Inc. (CTI), incorporated in 1991, develops, acquires and commercializes treatments for cancer. The Company�� research, development, acquisition and in-licensing activities concentrate on identifying and developing new ways to treat cancer. As of December 31, 2011, CTI focused its efforts on Pixuvri (pixantrone dimaleate) (Pixuvri), OPAXIO (paclitaxel poliglumex) (OPAXIO), tosedostat, brostallicin and bisplatinates. As of December 31, 2011, it developed Pixuvri, an anthracycline derivative for the treatment of hematologic malignancies and solid tumors. Another late-stage drug candidate of the Company, OPAXIO, is being studied as a potential maintenance therapy for women with advanced stage ovarian cancer, who achieve a complete remission following first-line therapy with paclitaxel and carboplatin. As of December 31, 2011, it also developed tosedostat in collaboration with Chroma Therapeutics, Ltd. (Chroma). On May 31, 2012, CTI completed its acquisi tion gaining worldwide rights to S*BIO Pte Ltd.'s (S*BIO) pacritinib.

Pixuvri

As of December 31, 2011, the Company developed Pixuvri, an aza-anthracenedione derivative, for the treatment of non-Hodgkin�� lymphoma (NHL), and various other hematologic malignancies, and solid tumors. Pixuvri was studied in the Company�� EXTEND, or PIX301, clinical trial, which was a phase III single-agent trial of Pixuvri for patients with relapsed, refractory aggressive NHL who received two or more prior therapies and who were sensitive to treatment with anthracyclines. On September 28, 2011, CTI announced that a second independent radiology assessment of response and progression endpoint data from its PIX301 clinical trial of Pixuvri was achieved with statistical significance. The results of the EXTEND trial met its primary endpoint and showed that patients randomized to treatment with Pixuvri achieved a significantly higher rate of confirmed and unconfirmed co mplete response compared to patients treated with standard! c! hemotherapy had a significantly increased overall response rate and experienced a statistically significant improvement in median progression free survival. Pixuvri had predictable and manageable toxicities when administered at the proposed dose and schedule in the EXTEND clinical trial in heavily pre-treated patients. In March 2011, the Company initiated the PIX-R trial to study Pixuvri in combination with rituximab in patients with relapsed/refractory diffuse large B-cell lymphoma (DLBCL). Pixuvri has also been studied in patients with HER2-negative metastatic breast cancer who have tumor progression after at least two, but not more than three, prior chemotherapy regimens. In the second quarter of 2010, the NCCTG opened this phase II study for enrollment. The study is closed to accrual and results are expected to be reported by the NCCTG later in 2012.

OPAXIO

OPAXIO is the Company�� biologically-enhanced chemotherapeutic agent that links pacli taxel to a biodegradable polyglutamate polymer, resulting in a new chemical entity. As of December 31, 2011, the Company focused its development of OPAXIO on ovarian, brain, esophageal, head and neck cancer. OPAXIO was designed to improve the delivery of paclitaxel to tumor tissue while protecting normal tissue from toxic side effects. In November 2010, results were presented by the Brown University Oncology Group from a phase II trial of OPAXIO combined with temozolomide (TMZ), and radiotherapy in patients with newly-diagnosed, high-grade gliomas, a type of brain cancer. The trial demonstrated a high rate of complete and partial responses and a high rate of six month progression free survival (PFS). Based on these results, the Brown University Oncology Group has initiated a randomized, multicenter, phase II study of OPAXIO and standard radiotherapy versus TMZ and radiotherapy for newly diagnosed patients with glioblastoma with an active gene termed MGMT that reduces respons iveness to TMZ. A phase I/II study of OPAXIO combined ! with r! a! diothera! py and cisplatin was initiated by SUNY Upstate Medical University, in patients with locally advanced head and neck cancer.

Tosedostat

In March 2011, the Company entered into a co-development and license agreement with Chroma Therapeutics, Ltd. (Chroma), providing the Company with marketing and co-development rights to Chroma�� drug candidate, tosedostat, in North, Central and South America. Tosedostat is an oral, aminopeptidase inhibitor that has demonstrated anti-tumor responses in blood related cancers and solid tumors in phase I-II clinical trials. Interim results from the phase II OPAL study of tosedostat in elderly patients with relapsed or refractory acute myeloid leukemia (AML) showed that once-daily, oral doses of tosedostat had predictable and manageable toxicities and results demonstrated response rates, including a high-response rate among patients who received prior hypomethylating agents, which are used to treat myelodysplastic synd rome (MDS), a precursor of AML.

Brostallicin

As of December 31, 2011, the Company developed brostallicin through its wholly owned subsidiary, Systems Medicine LLC, which holds rights to use, develop, import and export brostallicin. Brostallicin is a synthetic deoxyribonucleic acid (DNA) minor groove binding agent that has demonstrated anti-tumor activity and a favorable safety profile in clinical trials, in which more than 230 patients have been treated as of December 31, 2011. The Company uses a genomic-based platform to guide the development of brostallicin. A phase II study of brostallicin in relapsed, refractory soft tissue sarcoma met its predefined activity and safety hurdles and resulted in a first-line phase II clinical trial study that was conducted by the European Organization for Research and Treatment of Cancer (EORTC).

The Company competes with Bristol-Myers Squibb Company, Sanofi-Aventis, Pfizer, Roche Group, Genentech, Inc., Astellas Pharma, Eli Lilly and Company, Cel! gene, Tel! ik! , Inc., T! EVA Pharmaceuticals Industries Ltd. and PharmaMar.

Top Medical Stocks To Watch Right Now: Spectrum Pharmaceuticals Inc.(SPPI)

Spectrum Pharmaceuticals, Inc., a commercial-stage biotechnology company, primarily focuses on oncology and hematology. The company engages in acquiring, developing, and commercializing a broad and diverse pipeline of late-stage clinical and commercial products. It markets Zevalin, a prescribed form of cancer therapy, radioimmunotherapy; and Fusilev, a novel folate analog formulation and the pharmacologically active isomer of the racemic compound, calcium leucovorin. The company?s drugs in late stage development include Apaziquone, an anti-cancer agent; and Belinostat, a histone deacytelase inhibitor. Its drugs in development also include Ozarelix a luteinizing hormone releasing hormone antagonist, which is in Phase II clinical stage; SPI-1620, a peptide agonist of endothelin B receptors, which is in Phase I clinical stage; and RenaZorb, a lanthanum-based nanoparticle phosphate binding agent, which is in preclinical stage. The company was formerly known as NeoTherapeutics, Inc. and changed its name to Spectrum Pharmaceuticals, Inc. in December 2002. Spectrum Pharmaceuticals, Inc. was founded in 1987 and is based in Henderson, Nevada.

Advisors' Opinion:

• [By Michael Shulman]

  Spectrum Pharmaceuticals (NASDAQ: SPPI) is a commercial-stage biotechnology company with a primary focus in oncology and hematology The company specializes in rescuing treatments abandoned, in development stages, by other companies.

  It has had a tremendous run based on market introductions and partnerships in the past two years, but now has even greater potential for a blockbuster with a drug called Zevalin for non-Hodgkin’s lymphoma. This drug is currently approved as a salvage and adjunct therapy, and the company is in mid-stage trials for the use of Zevalin as a front-line treatment, which would be a much larger market.

  The risk in this stock is high. It could be cut in half or worse on bad news from one of several clinical trials. However, successful trial results could take this stock from under $7 to $32 in one to three years. SPPI could also become a takeover target.

Best Undervalued Companies To Buy Right Now: Navidea Biopharmaceuticals Inc (NAVB.A)

Navidea Biopharmaceuticals, Inc. (Navidea), formerly Neoprobe Corporation, incorporated in 1983, is a biopharmaceutical company focused on the development and commercialization of precision diagnostic agents. As of December 31, 2011, the Company�� radiopharmaceutical development programs included Lymphoseek (Lymphoseek, Kit for the Preparation of Technetium Tc99m for Injection), a radiopharmaceutical agent for lymph node mapping; AZD4694, an imaging agent, and RIGScan, a tumor antigen-specific targeting agent. In January 2012, the Company executed an option agreement with Alseres Pharmaceuticals, Inc. (Alseres) to license [123I]-E-IACFT Injection, also called Altropane, an Iodine-123 radiolabeled imaging agent, being developed as an aid in the diagnosis of Parkinson�� disease, movement disorders and dementia. In August 2011, the Company sold its gamma detection device line of business (the GDS Business) to Devicor Medical Products, Inc.

Lymphoseek

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Navidea�� pipeline includes clinical-stage radiopharmaceutical agents used to identify the presence and status of disease. Lymphoseek (Kit for the Preparation of Technetium Tc99m for Injection) is a lymph node targeting agent intended for use in intraoperative lymphatic mapping (ILM) procedures and lymphoscintigraphy employed in the overall diagnostic assessment of certain solid tumor cancers. The lymph system is a component of the body�� immune system. The key components of the lymph system are lymph nodes-small anatomic structures that contain disease-fighting lymphocytes, filter lymph of bacteria and cancer cells, and signal infection in response to heightened levels of pathogens. In Navidea�� Phase III clinical studies of Lymphoseek, it detected over 99% of positive nodes identified by vital blue dye (VBD). As of December 31, 2011, Navidea, in co-operation with UC, San Diego affiliate (UCSD), completed or initiated five Phase I clinical trials, one multi-c enter Phase II trial and three multi-center Phase II trial! s ! involving Lymphoseek. Two Phase III studies were completed in subjects with breast cancer and melanoma. During the year ended December 31, 2011, data from NEO3-09 were released, which indicated that all primary and secondary endpoints for the study were met. As of December 31, 2011, third Phase III clinical trial for Lymphoseek in subjects with head and neck squamous cell carcinoma (NEO3-06) was in progress.

AZD4694

AZD4694 is a Fluorine-18 labeled precision radiopharmaceutical candidate for use in the imaging and evaluation of patients with signs or symptoms of cognitive impairment such as Alzheimer's disease (AD). It binds to beta-amyloid deposits in the brain that can then be imaged in positron emission tomography (PET) scans. Amyloid plaque pathology is a required feature of AD and the presence of amyloid pathology is a supportive feature for diagnosis of probable AD. Patients who are negative for amyloid pathology do not have AD. AZD4694 has b een studied in several clinical trials. Clinical studies through Phase IIa have included more than 80 patients to date, both suspected AD patients and healthy volunteers. No significant adverse events have been observed. Results suggest that AZD4694 has the ability to image patients quickly and safely with high sensitivity.

RadioImmunoGuided Surgery

As of December 31, 2011, RIGScan had been studied in a number of clinical trials, including Phase III studies. Navidea has conducted two Phase III studies, NEO2-13 and NEO2-14, of RIGScan in patients with primary and metastatic colorectal cancer, respectively. Both studies were multi-institutional involving cancer treatment institutions in the United States, Israel, and the European Union.

The Company competes with Pharmalucence, Eli Lilly, Bayer Schering, General Electric and GE Healthcare.

Top Medical Stocks To Watch Right Now: Galena Biopharma Inc (GALE.PH)

Galena Biopharma, Inc. (Galena), formerly RXi Pharmaceuticals Corporation, incorporated on April 3, 2006, is a biotechnology company focused on discovering, developing and commercializing therapies addressing unmet medical needs using targeted biotherapeutics. The Company is pursuing the development of cancer therapeutics using peptide-based immunotherapy products, including its main product candidate, NeuVaxTM (E75), for the treatment of breast cancer and other tumors. NeuVax is a peptide-based immunotherapy intended to reduce the recurrence of breast cancer in low-to-intermediate HER2-positive breast cancer patients not eligible for trastuzumab (Herceptin; Genentech/Roche). On January 19, 2012, the Company initiated enrollment in its Phase 3 PRESENT clinical trial for NeuVax (E75 peptide plus GM-CSF) vaccine in low-to-intermediate HER2 1+ and 2+ breast cancer patients in the adjuvant setting to prevent recurrence (Clinicaltrials.gov identifier NCT01479244). The Preven tion of Recurrence in Early-Stage, Node-Positive Breast Cancer with Low to Intermediate HER2 Expression with NeuVax Treatment study is a randomized, multicenter, multinational clinical trial that will enroll approximately 700 breast cancer patients. The Company�� Phase 2 trial of NeuVax achieved its primary endpoint of disease-free survival (DFS). On April 13, 2011, the Company completed its acquisition of Apthera, Inc.,(Apthera).

The Company focuses to start a Phase 2 trial comparing NeuVax in combination with trastuzumab (Herceptin) versus trastuzumab, alone, in a 300-patient, randomized study in the adjuvant breast cancer setting. The Company's second product candidate, Folate Binding Protein-E39 (FBP), is a vaccine, consisting of the peptides E39 and J65, aimed at preventing the recurrence of ovarian, endometrial, and breast cancers. On February 14, 2012, the Company announced the initiation of a Phase 1/2 clinical trial in two gynecological cancers: ovari an and endometrial adenocarcinomas. Folate binding protein! h! as very limited tissue distribution and expression in non-malignant tissue and is over-expressed in more than 90% of ovarian and endometrial cancers, as well as in 20% to 50% of breast, lung, colorectal and renal cell carcinomas.

In April 2011, the Company acquired Apthera Inc and its NeuVax product candidate. The Company focuses on developing a pipeline of immunotherapy product candidates for the treatment of various cancers based on the E75 peptide, the advanced of which is NeuVax, which is targeted at preventing the recurrence of breast cancer. NeuVax has had positive Phase 1/2 clinical trial results for the prevention of breast cancer recurrence in patients who have had breast cancer and received the standard of care treatment (surgery, chemotherapy, radiotherapy and hormonal therapy as indicated). The Company had also initiated its Phase 3 PRESENT clinical trial of NeuVax for the prevention of breast cancer recurrence in early-stage low-to-intermediate HER2 breast cancer patients. NeuVax directs killer T-cells to target and destroy cancer cells that express HER2/neu, a protein associated with epithelial tumors in breast, ovarian, pancreatic, colon, bladder and prostate cancers. NeuVax is comprised of a HER2/neu-derived peptide called E75. E75 is a nine-amino acid sequence that is immunogenic (produces an immune response) and GM-CSF is a commercially available protein that acts to stimulate and activate components of the immune system such as macrophages and dendritic cells.

The Company also develops novel applications for NeuVax based on preclinical studies and phases 2 clinical trials which suggest that combining NeuVax and trastuzumab (Herceptin; Genentech/Roche) can increase antigen presentation by tumor cells by promoting receptor internalization and subsequent proteosomal degradation of the HER2 protein. The Company also is pursuing additional therapeutic indications for NeuVax that are in Phase 1/2 clinical trials. RXI-109, is a dermal anti-scarring therapy that ! targ! ets! conne! ctive tissue growth factor (CTGF) and that may inhibit connective tissue formation in human fibrotic disease.

The Company competes with Roche Laboratories, Inc., Pfizer Inc., Bayer HealthCare AG, Sanofi-Aventis, US, LLC, Amgen, Inc., GlaxoSmithKline plc, Renovo Group plc, CoDa Therapeutics, Inc., Sirnaomics, Inc., FirstString Research, Inc., Merz Pharmaceuticals, LLC, Capstone Therapeutics, Halscion, Inc., Garnet Bio Therapeutics, Inc., AkPharma Inc., Promedior, Inc., Kissei Pharmaceutical Co., Ltd., Eyegene, Derma Sciences, Inc., Healthpoint Biotherapeutics, Pharmaxon, Excaliard Pharmaceuticals, Inc., Alnylam Pharmaceuticals, Inc., Marina Biotech, Inc., Tacere Therapeutics, Inc., Benitec Limited, OPKO Health, Inc., Silence Therapeutics plc, Quark Pharmaceuticals, Inc., Rosetta Genomics Ltd., Lorus Therapeutics, Inc., Tekmira Pharmaceuticals Corporation, Arrowhead Research Corporation, Regulus Therapeutics Inc. and Santaris.

Top Medical Stocks To Watch Right Now: Covidien PLC (COV)

Covidien Public Limited Company is engaged in the development, manufacture and sale of healthcare products for use in clinical and home settings. It operates its businesses through three segments: Medical Devices, which includes the development, manufacture and sale of endomechanical instruments, energy devices, soft tissue repair products, vascular products, oximetry and monitoring products, airway and ventilation products; Pharmaceuticals, which includes the development, manufacture and distribution of specialty pharmaceuticals and active pharmaceutical ingredients, and Medical Supplies, SharpSafety products and original equipment manufacturer products. In May 2012, it acquired Newport Medical Instruments, Inc. In May 2012, it acquired superDimension, Ltd. In June 2012, the Company acquired Oridion Systems Ltd. In October 2012, its Mallinckrodt acquired CNS Therapeutics, Inc. In January 2013, the Company acquired CV Ingenuity. Advisors' Opinion:

• [By James K. Glassman]

   A global leader in medical devices, supplies and drugs, Covidien (symbol: COV) isn’t resting easy. The company, based in Ireland, expects to launch 100 new products through 2014. And it will continue to increase its research-and-development budget at a double-digit pace. Another goal: capitalize on emerging markets, where annual sales are growing rapidly. Analysts see Covidien’s plan to spin off its drug business as a positive, allowing the company to focus on its faster-growing and more-profitable devices business. The stock sells for 13 times estimated 2013 profits and yields 1.8%.

• [By James K. Glassman]

  A global leader in medical devices, supplies and drugs, Covidien (symbol: COV) isn’t resting easy. The company, based in Ireland, expects to launch 100 new products through 2014. And it will continue to increase its research-and-development budget at a double-digit pace. Another goal: capitalize on emerging markets, where annual sales are growing rapidly. Analysts see Covidien’s plan to spin off its drug business as a positive, allowing the company to focus on its faster-growing and more-profitable devices business. The stock sells for 13 times estimated 2013 profits and yields 1.8%.

Top Medical Stocks To Watch Right Now: Oxford BioMedica PLC (OXB)

Oxford BioMedica plc is a biopharmaceutical company developing gene-based medicines and therapeutic vaccines. The Company�� LentiVector platform products include ProSavin, RetinoStat, StarGen, UshStat, EncorStat, Glaucoma-GT and MoNuDin. Its 5T4 Tumour Antigen produces TroVax and Anti-5T4 antibody. The Prime Boost�� product includes Hi-8 Mel. Its GDEPT platform produces MetXia and Anti Angiogenesis platform produces EndoAngio-GT. The Company is developing four LentiVector platform product candidates for the treatment of ocular diseases: RetinoStat for wet age-related macular degeneration (AMD); StarGen for Stargardt disease; UshStat for Usher syndrome type 1B, and EncorStat for corneal graft rejection. TroVax is a therapeutic vaccine that stimulates the immune system to destroy cancerous cells expressing the 5T4 tumour antigen. On February 25, 2011, the Company purchased a freehold property, United Kingdom comprising a manufacturing facility.

Top Value Stocks To Watch Right Now

Masayoshi Son, the billionaire CEO of Japanese telecom SoftBank, told a news conference in Tokyo that the DISH Network's (NASDAQ: DISH  ) counteroffer for Sprint Nextel (NYSE: S  ) was "incomplete and illusory."

Son claimed that even though SoftBank's $20.1 billion bid for Sprint was less on paper than DISH's $25.5 billion offer, it still had "superior value," and SoftBank was not going to get into a price war with DISH.

Not pulling any punches, Son laid right into DISH's claim that its bid was worth $7 a share. "Is it right? Is it true? Is it misleading," he asked. "I would say the number is wrong. Totally wrong."

The DISH price per share is actually lower than claimed, said Son, because it proposes completing the deal one year after SoftBank's July 2013 deadline, and it doesn't take into account the $600 million penalty that would be due SoftBank if Sprint backs out.

Top Value Stocks To Watch Right Now: Network Exploration Ltd. Cl A (NET.V)

Network Exploration Ltd., a junior mineral exploration company, engages in the acquisition, exploration, and development of mineral properties. The company focuses on base and precious metal properties comprising gold, silver, and copper. It has interests in the Caldera gold and copper prospect located in the Huasco province, Chile; Pistala property comprising 1,600 hectares in southern Peru; and 25 Strike quartz claims in Yukon Territory, Canada. The company was incorporated in 1983 and is headquartered in Vancouver, Canada.

Top Value Stocks To Watch Right Now: Validus Holdings Ltd.(VR)

Validus Holdings, Ltd., through its subsidiaries, provides reinsurance and insurance coverage in the property, marine, and specialty lines markets worldwide. The company underwrites property catastrophe reinsurance, property per risk reinsurance, and property pro rata reinsurance products; and reinsurance on marine risks covering damage to or losses of marine vessels and cargo, third-party liability for marine accidents, physical loss, and liability from principally offshore energy properties. It also underwrites specialty lines of business, which include aerospace and aviation, agriculture, terrorism, life, accident and health, financial lines, nuclear, workers? compensation catastrophe, crisis management, political risks and violence, war, and contingency. The company was founded in 2005 and is based in Pembroke, Bermuda.

Top 5 Financial Stocks To Invest In 2014: IPG Photonics Corporation(IPGP)

IPG Photonics Corporation develops and manufactures fiber lasers, fiber amplifiers, and diode lasers. Its laser products include low, medium, and high output power lasers from 0.5 to 2 microns in wavelength; fiber pigtailed packaged diodes and fiber coupled direct diode laser systems; high-energy pulsed lasers, multi-wavelength and tunable lasers, and single-polarization and single-frequency lasers; solid-state lasers; laser diode chips and packaged laser diodes operating at 9XX nanometers; and high power optical fiber delivery cables, fiber couplers, beam switches, chillers, and accessories. The company also offers erbium-doped fiber and Raman amplifiers, and integrated communications systems; ytterbium and thulium specialty fiber amplifiers and broadband light sources; and single-frequency, linearly polarized, and polarization-maintaining amplifier products, as well as integrated laser systems, including welding seam stepper and picker, and laser marking and welding syst ems. Its lasers and amplifiers are used in materials processing applications; manufacturing of commercial systems; and research in advanced technologies and products by commercial firms, and academic and government institutions, as well as micro-processing, surface treatment, drilling, soldering, annealing, hardening, rapid prototyping, and laser-assisted machining. In addition, the company designs and manufactures dense wavelength division multiplexing (DWDM) transport systems; a range of fiber amplifiers; and Raman pump lasers, which enable data transmission in broadband access and DWDM optical networks, as well as sells commercial fiber and diode lasers for use in medical laser systems. It markets its products to original equipment manufacturers, system integrators, and end users through direct sales force, as well as through agreements with independent sales representatives and distributors worldwide. IPG Photonics Corporation was founded in 1990 and is headquartered in Oxford, Massachusetts.

The Great Coffee Conundrum

I freely admit that I'm addicted to coffee. Nothing short of a blizzard or pneumonia will stop me from venturing out of my house and making the ritualistic trek to my local Starbucks (NASDAQ: SBUX  ) to grab my daily cup of coffee. You can consider part of my addiction based on my surroundings -- I do live in the Seattle suburbs -- but the love of coffee is also engrained in American culture.

Source: McKay Savage, Flickr.

Roughly 100 million adults in the U.S. drink coffee daily, with a whopping $18 billion being spent on specialty coffee each year. Coffee is a gigantic business, from the containers and instant coffee we buy in grocery stores to the specialty coffee we order at small and large coffee houses.

But coffee is at an interesting crossroads for the American consumer. Less than three years ago, coffee prices soared past $3.00 per pound and pushed up prices quicker than you could blink. Green coffee beans, those used to make the brews of coffee we find in Starbucks and our local coffee shops, had been under pressure because of supply concerns in South America at the time, and skittish investors rallied prices past the $3-per-pound mark.

Times have changed, though, and since then coffee prices per pound have been ground down to nearly a four-year low, touching as low $1.16 last week. Although the immediate impact on paper would be one of jubilation in that lower coffee prices should translate into lower prices for consumers and potentially lower costs for businesses, this isn't the case.

We've seen some partial victories for consumers in the grocery aisle, with J.M. Smucker (NYSE: SJM  ) , the producer of Folgers, the top-selling coffee in the U.S., reducing its prices in accord with falling coffee costs on more than one occasion. The good news here is it means cheaper prices for the consumers without Smucker's having to sacrifice its margins because its costs have also fallen. Over the long run, this could be a positive for its Folgers brand, as lower prices could be looked upon favorably by consumers and actually cause its market share among store-brand coffee to increase.

The great coffee conundrum
However, if you move beyond the supermarket scene, you'll find a completely different picture. Despite a rapid descent in coffee prices as supply fears abated and crop yields have improved, consumers aren't seeing those savings passed along to them by large coffee chains such as Starbucks and Dunkin' Brands' (NASDAQ: DNKN  ) Dunkin' Donuts, or even Keurig brewer and K-cup provider Green Mountain Coffee Roasters (NASDAQ: GMCR  ) .

Source: Commons.wikimedia.org.

The reason we've seen this bifurcation is simple: These three behemoths can purchase large enough quantities of green coffee, which locks in the lowest possible price. Local shops don't have the same luxury when it comes to buying capacity, which means they're still paying well over the market rate in many cases for green coffee. With most large-chain coffee houses and wholesale brewers like Green Mountain having no incentive to compete against locally owned coffee shops, they can simply keep their price on par with local shop prices and reap the benefits of a growing margin as coffee prices continue to fall.

While this completely stinks for the American consumer, it's fantastic news if you're a shareholder in Starbucks, Dunkin' Brands, or Green Mountain Coffee Roasters, because all three are going to continue to benefit if green coffee prices continue to march lower.

We have reached what I think is the great coffee conundrum: How do consumers reap the benefits of lower coffee prices if supply is essentially no longer relevant with the bulk of the buying in the hands of a few large coffee houses?

If you have the answer to that question, I'd love to hear it in the comments section below.

The Motley Fool's chief investment officer has selected his No. 1 stock for this year. Find out which stock it is in the special free report: "The Motley Fool's Top Stock for 2013." Just click here to access the report and find out the name of this under-the-radar company.

5 of Last Week's Biggest Winners

What's better than momentum? Mo' momentum. Let's take a closer look at five of this past week's biggest scorchers.

Company

July 26

Weekly Gain

Himax Technologies (NASDAQ: HIMX  )	$7.30	41%
Facebook (NASDAQ: FB  )	$34.01	31%
Baidu (NASDAQ: BIDU  )	$127.56	15%
Cliffs Natural Resources (NYSE: CLF  )	$19.71	11%
Questcor Pharmaceuticals (NASDAQ: QCOR  )	$50.37	10%

Source: Barron's.

Let's start with Himax, which soared after Google (NASDAQ: GOOG  ) moved to take a small stake in the Taiwanese chipmaker's majority-owned display subsidiary. Himax had risen in the past on the high probability that the subsidiary's liquid crystal silicon chips would be a component in Google Glass as the high-tech specs go into mainstream production. This deal -- with Big G taking a 6.3% position that can escalate to 14.8% within the next year -- both cements the relationship and signals that the search giant is serious about wearable computing.

Facebook still hasn't clawed its way back to last year's IPO price, but it made some serious headway last week after some encouraging news on the monetization front. The world's leading social-networking website operator posted strong quarterly results, pointing out that 41% of its revenue now comes from mobile usage.

Investors have been unsure about Facebook's ability to cash in on the trend that's moving to consumption on smaller screens. However, the revenue's coming in. Facebook also claims that users aren't complaining, arguing that engagement rates are increasing.

China's leading search engine keeps moving higher. Baidu came through with yet another 15% gain this week after posting strong quarterly results.

The revived dot-com giant popped 15% higher last week after announcing a $1.9 billion deal to improve its prospects in mobile. This time around it was market-thumping results and guidance that translateed into accelerating revenue growth even at the low point of its range.

Cliffs Natural Resources didn't leave a lump of coal in shareholders' stockings this past week. Most of Cliffs' gain came on Friday, after the producer of iron ore and metallurgical coal delivered better-than-expected financial results. Revenue of $1.49 billion was just shy of the $1.58 billion it reported a year earlier, and profitability was shaved by more than half to $0.82 a share. However, analysts were holding out for net income of just $0.61 a share on $1.41 billion in revenue. Even warning that it will produce a million tons less in iron sales for the entire fiscal year than it had originally projected wasn't enough to rain on this parade. Cliffs Natural Resources has been beaten down so badly this year, that mixed news is good news.

Finally, we have Questcor moving higher. The biotech made its move during the final two trading days of the week, after announcing that it will begin the second phase of clinical trials for its Acthar gel for the treatment of patients with Lou Gehrig's disease. Questcor is initiating the patient screening process.

Keep the good vibes coming
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The Dreamliner Fire Heard 'Round the World

Ever heard of the butterfly effect? You know, the idea that a butterfly flapping its wings in Liberia today might cause a hurricane in Brazil next week? There's a live demonstration of that ripple effect going on right now.

Earlier today, a Boeing (NYSE: BA  ) 787 Dreamliner caught fire while parked and unoccupied at London's Heathrow airport. Boeing has not yet explained what caused the fire aboard this Ethiopian Airlines plane, but Dreamliners have suffered internal fires before due to faulty batteries. The battery issue kept Dreamliners grounded for three months, and Boeing couldn't deliver any new planes until the battery system was redesigned.

So there's reason to believe that something might be amiss with the 787 again, which would be bad news for Boeing indeed.

The fire didn't just damage some expensive airline property, but splashed collateral damage all over the place. Heathrow -- one of the world's busiest airports -- was shut down for about an hour, judging by Heathrow's official Twitter feed. Boeing shares have plunged 3.2% as of 1:50 p.m. EDT due to fears of another sales halt, erasing much of the recent share-price recovery. In the process, Boeing shaved 26 points off the Dow Jones Industrial Average (DJINDICES: ^DJI  ) , single-handedly turning the index's gains into minor losses.

If this fire turns out to reveal another show-stopping issue with the Dreamliner, then all of these side effects will be justified. In fact, Boeing may be in for a ton of additional pain if the issue can't be dismissed quickly and convincingly. After all, share prices remained grounded between the battery problem's unveiling in January and the FAA-approved fix in March -- and then Boeing took off.

BA data by YCharts.

If the Dreamliner were to become a nightmare, bringing Boeing back to something like February's prices, then shareholders would be in for another horrifying 25% plunge. The stakeholders are many -- Boeing shareholders, airlines and their passengers, and 200 Dow points associated with a drop like that, just to name a few.

This may be the first time that many people have desperately hoped for a case of arson, which wouldn't be the Dreamliner's fault.

If Boeing's jumbo dreams weren't dispelled today, the stock looks poised for years of strong gains. With the American markets reaching new highs, investors and pundits alike are skeptical about future growth. They shouldn't be. Many global regions are still stuck in neutral, and their resurgence could result in windfall profits for select companies. A recent Motley Fool report, "3 Strong Buys for a Global Economic Recovery," outlines three companies that could take off when the global economy gains steam. Click here to read the full report!

Congress Asked to Approve $170 Million Finnish Military Sale

The Defense Security Cooperation Agency notified Congress [link opens in PDF] Thursday of plans to conduct a Foreign Military Sale of $170 million worth of equipment and support services to Finland, as part of that country's Finland's F-18 Mid-Life Upgrade Program.

According to the DSCA, contractors including Raytheon (NYSE: RTN  ) , Lockheed Martin (NYSE: LMT  ) , Boeing (NYSE: BA  ) , General Electric (NYSE: GE  ) , and General Dynamics (NYSE: GD  ) will participate in providing the requested services, as well as equipment to include:

69 KIV-78 friend-or-foe identification systems. 69 AN/APX-11-30 combined interrogator/transponders. 32 SUU-63 payload pylons. An unspecified number of Multifunctional Information Distribution Systems.

Also included in the proposed order will be software test and integration center upgrades, flight testing services, support and testing equipment, technical documentation, personnel training, and assorted spare parts.

The DSCA says the sale will "contribute to the foreign policy and national security of the United States by helping to improve the security of a friendly country which has been, and continues to be an important force for political stability and economic progress in Europe. The Finnish Air Force (FAF) intends to purchase the MLU Program equipment to extend the useful life of its F-18 fighter aircraft and enhance their survivability and communications connectivity."

The DSCA further assures Congress that the proposed sale "will not alter the basic military balance in the region," nor will there be any "adverse impact on U.S. defense readiness as a result of this proposed sale."

link

Better Dividend: Pfizer vs. Bristol-Myers Squibb

Picking great dividend stocks isn't about just finding the highest-paying yields. The best stocks offer great dividends along with a steady outlook and a secure financial base. Big Pharma's traditionally been home to several strong dividend stocks, with some offering up chart-topping yields.

Just which of Big Pharma's stocks offers your portfolio the best dividend? Motley Fool contributor Dan Carroll below compares two of the industry's biggest names, Pfizer (NYSE: PFE  ) and Bristol-Myers Squibb (NYSE: BMY  ) and shows you which of these two titans is the better pick for long-term investors searching for a great dividend.

One of the best parts of owning big pharma stocks is their attractive dividends, but smart investors know the importance of diversifying -- seeking high-yielding stocks from multiple industries. The Motley Fool's special free report "Secure Your Future With 9 Rock-Solid Dividend Stocks" outlines the Fool's favorite dependable dividend-paying stocks across all sectors. Grab your free copy by clicking here.

Is ARC Document Solutions's Cash Flow Just For Show?

Although business headlines still tout earnings numbers, many investors have moved past net earnings as a measure of a company's economic output. That's because earnings are very often less trustworthy than cash flow, since earnings are more open to manipulation based on dubious judgment calls.

Earnings' unreliability is one of the reasons Foolish investors often flip straight past the income statement to check the cash flow statement. In general, by taking a close look at the cash moving in and out of the business, you can better understand whether the last batch of earnings brought money into the company, or merely disguised a cash gusher with a pretty headline.

Calling all cash flows
When you are trying to buy the market's best stocks, it's worth checking up on your companies' free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That's what we do with this series. Today, we're checking in on ARC Document Solutions (NYSE: ARC  ) , whose recent revenue and earnings are plotted below.

Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. Dollar values in millions. FCF = free cash flow. FY = fiscal year. TTM = trailing 12 months.

Over the past 12 months, ARC Document Solutions generated $14.9 million cash while it booked a net loss of $26.6 million. That means it turned 3.7% of its revenue into FCF. That sounds OK.

All cash is not equal
Unfortunately, the cash flow statement isn't immune from nonsense, either. That's why it pays to take a close look at the components of cash flow from operations, to make sure that the cash flows are of high quality. What does that mean? To me, it means they need to be real and replicable in the upcoming quarters, rather than being offset by continual cash outflows that don't appear on the income statement (such as major capital expenditures).

For instance, cash flow based on cash net income and adjustments for non-cash income-statement expenses (like depreciation) is generally favorable. An increase in cash flow based on stiffing your suppliers (by increasing accounts payable for the short term) or shortchanging Uncle Sam on taxes will come back to bite investors later. The same goes for decreasing accounts receivable; this is good to see, but it's ordinary in recessionary times, and you can only increase collections so much. Finally, adding stock-based compensation expense back to cash flows is questionable when a company hands out a lot of equity to employees and uses cash in later periods to buy back those shares.

So how does the cash flow at ARC Document Solutions look? Take a peek at the chart below, which flags questionable cash flow sources with a red bar.

Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. Dollar values in millions. TTM = trailing 12 months.

When I say "questionable cash flow sources," I mean items such as changes in taxes payable, tax benefits from stock options, and asset sales, among others. That's not to say that companies booking these as sources of cash flow are weak, or are engaging in any sort of wrongdoing, or that everything that comes up questionable in my graph is automatically bad news. But whenever a company is getting more than, say, 10% of its cash from operations from these dubious sources, investors ought to make sure to refer to the filings and dig in.

With 68.3% of operating cash flow coming from questionable sources, ARC Document Solutions investors should take a closer look at the underlying numbers. Within the questionable cash flow figure plotted in the TTM period above, other operating activities (which can include deferred income taxes, pension charges, and other one-off items) provided the biggest boost, at 9.8% of cash flow from operations. Overall, the biggest drag on FCF came from capital expenditures, which consumed 59.8% of cash from operations.

A Foolish final thought
Most investors don't keep tabs on their companies' cash flow. I think that's a mistake. If you take the time to read past the headlines and crack a filing now and then, you're in a much better position to spot potential trouble early. Better yet, you'll improve your odds of finding the underappreciated home-run stocks that provide the market's best returns.

Looking for alternatives to ARC Document Solutions? It takes more than great companies to build a fortune for the future. Learn the basic financial habits of millionaires next door and get focused stock ideas in our free report, "3 Stocks That Will Help You Retire Rich." Click here for instant access to this free report.

We can help you keep tabs on your companies with My Watchlist, our free, personalized stock tracking service.

Add ARC Document Solutions to My Watchlist.

How John Deere Led To My 11 Shocking Predictions For 2014

Innovation is the most powerful force an investor can harness.

It supercharges companies and helps them deliver outsized results.

By using a relatively small allocation of your equity portfolio's assets, you can effectively capture these returns and have the potential to build greater wealth at what I believe to be the least amount of risk and the least amount of effort.

Lots of companies can execute. Solid execution achieves predictable cash flows and solid dividends. That's admirable. But it will not move the needle on your portfolio -- it will merely add an income stream.

 

My mission as editor of Game-Changing Stocks is to deliver these game-changers to my subscribers. I spend all my time getting to know companies like Google and considering which companies might be on to The Next Big Thing.

For instance, in 2009 I told subscribers of my premium newsletter that there would be a big move in nanotechnology. In the months that followed, our nanotech pick shot up 293%.

Today, I'd like to share with you the story of one of the very first game-changers. And while it might not be as exciting as some of the innovative companies I regularly cover -- believe me, it's still a pioneer in its field.

One Of The First American Game-Changers
The fact is, he didn't really need the money.

Though he was young, he had a good trade and made a good living. His rural Vermont customers respected him, and he had more orders than he could fill.

In New England in the early 19th century, this was what affluence looked like. But for a twist of fate, that might have been the end of the story...

When, unexpectedly, the economy took a turn, and the 32-year-old blacksmith found himself headed west to seek a new opportunity. He landed in Grand Detour, Ill., and set up shop.

Right away, the farmers he'd traveled with from back east found trouble. Their plows simply didn't work. Dull iron blades did fine in New England dirt, which was sandy, but the rich black dirt in the Midwest stuck to the heavy-bottom plows like cake batter.

So the blacksmith threw out the old "eastern plow" and designed a new model, curved on the bottom and built not from iron but from highly polished steel sawmill blade. The locals hooted. Then they saw it in action. The new plow -- lighter and more agile -- not only did a better job but did it much quicker.

John Deere had a hit.

He didn't stop. He made plows as fast as he could (they sold like hotcakes), and he refined the design constantly, once changing specifications for a plow 10 times in one year. His son came aboard, and the company expanded into other types of plows and other implements, always delivering a faster, more efficient way of planting and harvesting crops.

Deere & Co. (NYSE: DE) equipment, painted in its familiar green, is still the gold standard on the farm. To this day, the company still can't turn out equipment fast enough. Even if you have $400,000 -- the base price of Deere's latest combine -- the waiting list could be a year or more, according to the Deere representative I checked with.

What is the value of such innovation? During just the past 10 years, this innovator has outperformed the S&P 500 by a f! actor of six.

Even though Deere & Co. was founded in 1837, you can easily see that the innovations it continues to make have paid off to this day.

But this example of one of history's most influential innovators isn't just an interesting story. It's a playbook for literally millions of dollars in alpha for YOUR portfolio. You see, I believe that by knowing history, we're better prepared to capitalize when it repeats itself.

In fact, I used examples like these as the basis for my newest report "The 11 Most Shocking Investment Predictions for 2014..." which has just been released. In it, I talk about Apple's next breakthrough... George W. Bush's private millionaire stock market... a tiny company that could kill the gasoline engine and more... To find out about what may be some of my best ideas yet, click here.

It's Showtime for Cal-Maine Foods

Cal-Maine Foods (Nasdaq: CALM  ) is expected to report Q4 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 Cal-Maine Foods's revenues will grow 16.0% and EPS will wither -50.6%.

The average estimate for revenue is $319.3 million. On the bottom line, the average EPS estimate is $0.77.

Revenue details
Last quarter, Cal-Maine Foods booked revenue of $360.4 million. GAAP reported sales were 19% higher than the prior-year quarter's $303.7 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, EPS came in at $1.27. GAAP EPS of $1.27 for Q3 were 17% higher than the prior-year quarter's $1.09 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 18.6%, 290 basis points worse than the prior-year quarter. Operating margin was 8.6%, 290 basis points worse than the prior-year quarter. Net margin was 8.5%, 10 basis points worse than the prior-year quarter.

Looking ahead

The full year's average estimate for revenue is $1.28 billion. The average EPS estimate is $2.91.

Investor sentiment
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 727 members out of 767 rating the stock outperform, and 40 members rating it underperform. Among 170 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 163 give Cal-Maine Foods a green thumbs-up, and seven give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Cal-Maine Foods is hold, with an average price target of $44.00.

Selling to fickle consumers is a tough business for Cal-Maine Foods or anyone else in the space. But some companies are better equipped to face the future than others. In a new report, we'll give you the rundown on three companies that are setting themselves up to dominate retail. Click here for instant access to this free report.

Add Cal-Maine Foods to My Watchlist.

Why Infinera Shares Imploded

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

What: Shares of Infinera (NASDAQ: INFN  ) , which bottomed out at a nearly 14% loss earlier today, are sitting on a nearly 8% loss as of this writing after the company failed to impress Wall Street with improved guidance despite a double beat on its earnings report last evening.

So what: Infinera reported revenue of $138.4 million and a $0.01 loss per share for the second quarter. Its top line was a 48% year-over-year improvement, and also bested the $133.6 million consensus. Its narrow loss also surpassed the $0.02 loss per share Wall Street was looking for. However, Infinera noted that its "visibility" into bookings for the upcoming quarter is less than usual, and executive caution regarding third-quarter guidance was a major reason why the stock dropped. Guidance for a revenue range of $135 million to $145 million for the third quarter does beat the consensus of $135 million, and a $0.01 to $0.07 range for EPS also comes in ahead of Wall Street's expectation for zero earnings.

Now what: Despite caution, Infinera did provide guidance that surpassed analyst expectations. This drop seems rather unfounded, but with a near-double in the year to date, some large shareholders may have simply been looking for an ideally profitable exit point. There's nothing in this report that indicates weakness to come, and a cautious executive is better than a reckless one. Don't get too tripped up by the drop -- keep your eye on this one.

Want more news and updates? Add Infinera to your watchlist now.

It's incredible to think just how much of our digital and technological lives are almost entirely shaped and molded by just a handful of companies. Find out "Who Will Win the War Between the 5 Biggest Tech Stocks?" in The Motley Fool's latest free report, which details the knock-down, drag-out battle being waged by the five kings of tech. Click here to keep reading.

Should You Buy Facebook Now?

Top 10 Value Companies To Own In Right Now

Investors in mortgage REITs haven't had a lot to cheer about since last September, when the Federal Reserve instituted its latest round of quantitative easing. Although many of these trusts still deliver yields in the double digits, the crimped spreads of mREITs like Annaly Capital Management (NYSE: NLY  ) have reduced yields and dividends, as well.

However, there is a flip side to this story. The added competition for mortgage-backed securities guaranteed by Fannie and Freddie has caused prices to rise, as scarcity is apt to do. This scenario has bolstered the mREITs' book value, so necessary if the trusts are to raise additional funds for investment.

Is QE3 helping or hurting mortgage REITs? As it turns out, it's doing a little of both.

Tiny spreads are lousy, but a Fed exit might be worse
Contracting spreads of agency mREITs like Annaly and CYS Investments (NYSE: CYS  ) have hogged the headlines since the advent of QE3, while the lustier metrics of American Capital Agency (NASDAQ: AGNC  ) have inspired awe in the hearts of investors.

Top 10 Value Companies To Own In Right Now: Tupperware Corporation(TUP)

Tupperware Brands Corporation operates as a direct seller of various products across a range of brands and categories through an independent sales force. The company engages in the manufacture and sale of kitchen and home products, and beauty and personal care products. It offers preparation, storage, and serving solutions for the kitchen and home, as well as kitchen cookware and tools, children?s educational toys, microwave products, and gifts under the Tupperware brand name primarily in Europe, Africa, the Middle East, the Asia Pacific, and North America. The company provides beauty and personal care products, which include skin care products, cosmetics, bath and body care, toiletries, fragrances, nutritional products, apparel, and related products principally in Mexico, South Africa, the Philippines, Australia, and Uruguay. It offers beauty and personal care products under the Armand Dupree, Avroy Shlain, BeautiControl, Fuller, NaturCare, Nutrimetics, Nuvo, and Swissgar de brand names. The company sells its Tupperware products directly to distributors, directors, managers, and dealers; and beauty products primarily through consultants and directors. As of December 26, 2009, the Tupperware distribution system had approximately 1,800 distributors, 61,300 managers, and 1.3 million dealers; and the sales force representing the Beauty businesses approximately 1.1 million. The company was formerly known as Tupperware Corporation and changed its name to Tupperware Brands Corporation in December 2005. The company was founded in 1996 and is headquartered in Orlando, Florida.

Advisors' Opinion:

• [By Sam Collins]

  Household name Tupperware Brands Corp. (NYSE:TUP) is a global direct seller of products with multiple brands through an independent sales force of 2.4 million people. Its product line focuses on kitchen storage and serving solutions, as well as personal-care products. Over 60% of sales in 2011 are expected to come from Europe and Asia, and the stock has appeal as an emerging markets story.

  S&P estimates that 2011 earnings will increase to $4.54 versus $3.53 in 2010, and it increased its rating to a “five-star strong buy” with a recently revised 12-month target of $81, up from $73. The 2005 purchase of Sara Lee’s (NYSE:SLE) direct-sales business, which has a high growth rate, should be a long-term benefit. TUP’s annual dividend yield is 1.92%.

  Technically TUP had a pullback following a new high at over $70 and is currently oversold. Buy TUP at the current market price with a trading target of $70, but longer term a much higher target will likely be attained.

Top 10 Value Companies To Own In Right Now: Dollar Tree Inc.(DLTR)

Dollar Tree, Inc. operates discount variety stores in the United States and Canada. Its stores offer merchandise primarily at the fixed price of $1.00. The company operates its stores under the names of Dollar Tree, Deal$, Dollar Tree Deal$, Dollar Giant, and Dollar Bills. Its stores offer consumable merchandise, including candy and food, and health and beauty care, as well as household consumables, such as paper, plastics, household chemicals, in select stores, and frozen and refrigerated food; variety merchandise, which includes toys, durable housewares, gifts, party goods, greeting cards, softlines, and other items; and seasonal goods, such as Easter, Halloween, and Christmas merchandise. As of April 30, 2011, it operated 4,089 stores in 48 states and the District of Columbia, as well as 88 stores in Canada. The company was founded in 1986 and is based in Chesapeake, Virginia.

Advisors' Opinion:

• [By Sam Collins]

  Dollar Tree (NASDAQ:DLTR) is a leading operator of discount variety stores. The stock has hugged its 50-day moving average since mid-February. But a recent minor revision of earnings for this year by several analysts and the recent market sell-off have resulted in a fall from its high of the year at over $70 to under $66. However, Goldman Sachs (NYSE:GS) increased its price target to $73 from $69.

  Technically DLTR is oversold, according to MACD. A break below its 50-day moving average could result in a pullback to $64, but positions could be taken at the current market price. The trading target for DLTR is $72.

10 Best Stocks To Watch Right Now: Caterpillar Inc.(CAT)

Caterpillar Inc. manufactures and sells construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives worldwide. It operates through three lines of businesses: Machinery, Engines, and Financial Products. The Machinery business offers construction, mining, and forestry machinery, including track and wheel tractors, track and wheel loaders, pipelayers, motor graders, wheel tractor-scrapers, track and wheel excavators, backhoe loaders, log skidders, log loaders, off-highway trucks, articulated trucks, paving products, skid steer loaders, underground mining equipment, tunnel boring equipment, and related parts. It also manufactures diesel-electric locomotives; and manufactures and services rail-related products and logistics services for other companies. The Engines business provides diesel, heavy fuel, and natural gas reciprocating engines for Caterpillar machinery, electric power generation systems, marine, petrol eum, construction, industrial, agricultural, and other applications. It offers industrial turbines and turbine-related services for oil and gas, and power generation applications. This business also remanufactures Caterpillar engines, machines, and engine components; and offers remanufacturing services for other companies. The Financial Products business provides retail and wholesale financing alternatives for Caterpillar machinery and engines, solar gas turbines, and other equipment and marine vessels, as well as offers loans and various forms of insurance to customers and dealers. It also offers financing for vehicles, power generation facilities, and marine vessels. The company markets its products directly, as well as through its distribution centers, dealers, and distributors. It was formerly known as Caterpillar Tractor Co. and changed its name to Caterpillar Inc. in 1986. Caterpillar Inc. was founded in 1925 and is headquartered in Peoria, Illinois.

Advisors' Opinion:

• [By Jim Cramer]

  this stock could be a monster in 2011, especially with the integration of Bucyrus (BUCY), which I think will turn out to be a fantastic acquisition. Estimates, currently showing EPS at about $6, I think are way, way too low. I see this stock going to $120 in the next year. Too gutsy? Ask yourself what happens if the United States comes back as a growth nation. Right now almost all of the growth is overseas. Still a fantastic mineral play and a terrific call on world growth.

• [By Sam Collins]

  Caterpillar (NYSE:CAT) is the world’s largest producer of construction and mining equipment, diesel and natural gas engines, and industrial gas turbines. The stock has been in a bull market since the market bottomed in March 2009. CAT was one of our Top Stocks to Buy for December because of its position as a major supplier to the third world and China. The company should also be a beneficiary of orders from Japan due to the damage from earthquakes and the tsunami.

  Revenues in 2011 are expected to increase by 36%, according to S&P, and margins are expected to increase, as well. Earnings for 2012 are forecast at $9.10, up from $7.50 this year, and S&P has a target of $142 over the next 12 months.

  Technically CAT has strong support at $95 and currently appears to be oversold, according to Moving Average Convergence/Divergence (MACD). If it is able to hold at the support line, look for a rally to $110 within 30 days. Longer term the stock could trade north of $125.

• [By Roberto Pedone]

  Caterpillar (CAT) is staging a textbook breakout in May. Shares of heavy equipment maker haven't exactly been kind to investors year-to-date; CAT has barely broken even during a time when the broad market has been in a historic rally. But a textbook breakout should change that.

  CAT started forming an inverse head and shoulders pattern back in early April. The inverse head and shoulders is formed by two swing lows that bottom out around the same level (the shoulders), separated by a lower low called the head; the buy signal comes on the breakout above the pattern's "neckline" level, which was just below $86 for CAT. That puts this stock's upside target right around $92.

  Even though CAT has nearly hit its upside target already (the post-breakout buying has been very quick), the longer-term implication for investors is a break of the downtrend that had been haranguing shares this year. Now, with that downtrend broken, CAT should have more room to move higher. I'd just expect some consolidation first.

• [By Dave Friedman]

  The shares closed at $91.37, up $1.56, or 1.74%, on the day. They have traded in a 52-week range of $63.34 to $116.55. Volume today was 10,450,473 shares, against a 3-month average volume of 9,960,260 shares. Its market capitalization is $59.03billion, its trailing P/E is 15.11, its trailing earnings are $6.05 per share, and it pays a dividend of $1.84 per share, for a dividend yield of 2.00%. About the company: Caterpillar Inc. designs, manufactures, and markets construction, mining, agricultural, and forestry machinery. The Company also manufactures engines and other related parts for its equipment, and offers financing and insurance. Caterpillar distributes its products through a worldwide organization of dealers.

Top 10 Value Companies To Own In Right Now: Schlumberger N.V.(SLB)

Schlumberger Limited, together with its subsidiaries, supplies technology, integrated project management, and information solutions to the oil and gas exploration and production industries worldwide. The company?s Oilfield Services segment provides exploration and production services; wireline technology that offers open-hole and cased-hole services; supplies engineering support, directional-drilling, measurement-while-drilling, and logging-while-drilling services; and testing services. This segment also offers well services; supplies well completion services and equipment; artificial lift; data and consulting services; geo services; and information solutions, such as consulting, software, information management system, and IT infrastructure services that support oil and gas industry. Its WesternGeco segment provides reservoir imaging, monitoring, and development services; and operates data processing centers and multiclient seismic library. This segment also offers variou s services include 3D and time-lapse (4D) seismic surveys to multi-component surveys for delineating prospects and reservoir management. The company?s M-I SWACO segment supplies drilling fluid systems to improve drilling performance; fluid systems and specialty tools to optimize wellbore productivity; production technology solutions to maximize production rates; and environmental solutions that manages waste volumes generated in drilling and production operations. Its Smith Oilfield segment designs, manufactures, and markets drill bits and borehole enlargement tools; and supplies drilling tools and services, tubular, completion services, and other related downhole solutions. The company?s Distribution segment markets pipes, valves, and fittings, as well as mill, safety, and other maintenance products. This segment also provides warehouse management, vendor integration, and inventory management services. Schlumberger Limited was founded in 1927 and is based in Houston, Texas.

Advisors' Opinion:

• [By Michael]

  Schlumberger Limited (NYSE: SLB): Cramer also had more than $100,000 invested in SLB. As of Feb. 15, his charitable trust owns 1,300 shares for a total of about $100,724. SLB is also quite popular among hedge funds. At the end of last September, there were 42 hedge funds with SLB positions in their 13F portfolios. Ken Fisher was the most bullish hedge fund manager about SLB -- Fisher Asset Management had nearly $500 million invested in SLB at the end of the third quarter. Jim Simons’ Renaissance Technologies also invested nearly $200 million in this stock.

  Schlumberger has reasonable debt levels, growing net income and revenue, and healthy cash flow from operations. It is relatively expensive compared with its competitors though. SLB has a forward P/E ratio of 13.6. Its expected annual EPS growth rate is 21.82% on the average for the next five years, which means that its P/E ratio for 2014 will be around 9.2. This is quite low compared with the market, but not so versus its peers.

• [By Kathy Kristof]

  Headquarters: Houston
  
  52-Week High: $79.38
  
  52-Week Low: $56.86 
  
  Annual Sales: $39.5 bill.
  
  Projected Earnings Growth: 18% annually over the next five years 
  
  
  Energy-services giant Schlumberger is the prototypical multinational. The company derives roughly 85% of its revenues from overseas, including developing markets in Africa, Brazil and Asia. 
  
  With particular expertise in deep-water drilling, Schlumberger is well-positioned to compete in a world where oil is harder to find, says Argus Research analyst Philip Weiss. Admittedly, oil exploration is a cyclical business, driven largely by crude prices. And weak prices for natural gas have hit the company’s stock, Weiss says. But the price of natural gas has little to do with Schlumberger’s profits, so Weiss just sees this as an opportunity to get the shares at a more reasonable price.

• [By Rebecca Lipman]

   Together with its subsidiaries, supplies technology, integrated project management, and information solutions to the oil and gas exploration and production industries worldwide. Market cap of $91.49B. EPS growth (5-year CAGR) at 24%. According to Morgan Stanley: "Thanks to an estimated $1 billion investment per year in R&D, Schlumberger has what we consider the most advanced technology portfolio in the industry."

• [By Lowell]

  Schlumberger (NYSE:SLB) is a premier supplier of technology and oil-well services and equipment. S&P has upgraded SLB to a “buy,” and Credit Suisse upgraded it to an “outperform” rating because the company exceeded recent earnings forecasts and increased its view of future earnings for 2011. SLB’s fundamental target is $117 and is based on earnings estimates of $3.85 for 2011, $5.40 for 2012, and $6.05 for 2013.

  Technically SLB may become the object of profit-taking following a recent run to over $95. Positions are recommended at around $85 with a target of $115 before December 2011, assuming a breakout through a triple-top at $95.