Monday, September 30, 2013

5 Tech Stocks in Breakout Territory With Big Volume

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

>>5 Stocks Insiders Love Right Now

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

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

>>5 Stocks Set to Soar on Bullish Earnings

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

SouFun

SouFun (SFUN) operates a real estate Internet portal in China, providing marketing, listing and other value-added services and products related to real estate and home furnishing. This stock closed up 9.8% to $49.88 in Wednesday's trading session.

Wednesday's Volume: 2.16 million

Three-Month Average Volume: 727,108

Volume % Change: 257%

>>5 Stocks Under $10 in Breakout Territory

From a technical perspective, SFUN exploded higher here right above some near-term support at $44.71 with strong upside volume. This stock has been uptrending strong for the last two months and change, with shares moving sharply higher from its low of $22.29 to its recent high of $53.77. During that move, shares of SFUN have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of SFUN within range of triggering a big breakout trade. That trade will hit if SFUN manages to take out some near-term overhead resistance levels at $51 to its 52-week high at $53.77 with high volume.

Traders should now look for long-biased trades in SFUN as long as it's trending above support at $44.71, and then once it sustains a move or close above those breakout levels with volume that hits near or above 727,108 shares. If that breakout hits soon, then SFUN will set up to enter new 52-week-high territory above $53.77, which is bullish technical price action. Some possible upside targets off that breakout are $60 to $65.

Responsys

Responsys (MKTG) is a provider of email and cross-channel marketing solutions that enable companies to engage in relationship-based marketing across interactive channels. This stock closed up 9.4% to $16.31 in Wednesday's trading session.

Wednesday's Volume: 1.79 million

Three-Month Average Volume: 421,794

Volume % Change: 317%

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From a technical perspective, MKTG gapped sharply higher here and broke out above some near-term overhead resistance at $15.54 with monster upside volume. This move is quickly pushing shares of MKTG within range of triggering a big breakout trade. That trade will hit if MKTG manages to take out Wednesday's high of $16.49 to its 52-week high at $16.93 with high volume.

Traders should now look for long-biased trades in MKTG as long as it's trending above Wednesday's low of $15.44 or above its 50-day at $14.47 and then once it sustains a move or close above those breakout levels with volume that hits near or above 421,794 shares. If that breakout triggers soon, then MKTG will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are its all-time high at $18.19 to north of $20.

Gartner

Gartner (IT) is an information technology research and advisory company. This stock closed up 1.6% at $57.81 in Wednesday's trading session.

Wednesday's Volume: 1.60 million

Three-Month Average Volume: 459,018

Volume % Change: 276%

>>5 Hated Earnings Stocks You Should Love

From a technical perspective, IT bounced modestly higher here right off some near-term support at $56.55 with strong upside volume. This stock has been trending sideways inside of a consolidation chart pattern for the last month and change, with shares moving between $55.75 on the downside and $59.95 on the upside. Shares of IT are now starting to move within range of triggering a breakout trade above the upper-end of its sideways trading price action. That trade will hit if IT manages to clear its 50-day moving average at $58.84 and then once it takes out more resistance at $59.95 with high volume.

Traders should now look for long-biased trades in IT as long as it's trending above some near-term support levels at $56.55 or $55.75 and then once it sustains a move or close above those breakout levels with volume that's near or above 459,018 shares. If that breakout hits soon, then IT will set up to re-test or possibly take out its 52-week high at $63.

Demandware

Demandware (DWRE) provides software-as-a-service e-commerce solutions that enable companies to easily design, implement and manage their own customized e-commerce sites, including Web sites, mobile applications and other digital storefronts. This stock closed up 6% at $47.38 in Wednesday's trading session.

Wednesday's Volume: 822,000

Three-Month Average Volume: 326,322

Volume % Change: 150%

>>5 Stocks Ready for Breakouts

From a technical perspective, DWRE soared sharply higher here back above its 50-day moving average of $45.07 with above-average volume. This move pushed shares of DWRE into breakout territory, since the stock cleared some near-term overhead resistance levels at $45.67 to $47.24. Shares of DWRE are now quickly moving within range of triggering another big breakout trade. That trade will hit if DWRE manages to take out Wednesday's high of $47.76 and then once it clears its all-time high at $49.11 with high volume.

Traders should now look for long-biased trades in DWRE as long as it's trending above its 50-day at $45.07 or above more near-term support at $44 and then once it sustains a move or close above those breakout levels with volume that's near or above 326,322 shares. If that breakout hits soon, then DWRE will set up to enter new all-time-high territory, which is bullish technical price action. Some possible upside targets off that move are $55 to $60.

Marin Software

Marin Software (MRIN) provides a cloud-based revenue acquisition management platform, offering integrated digital advertising management solutions for search, display, social media and mobile advertising. This stock closed up 6.1% at $13.03 in Wednesday's trading session.

Wednesday's Volume: 466,000

Three-Month Average Volume: 114,298

Volume % Change: 275%

>>5 Rocket Stocks to Buy as Mr. Market Climbs

From a technical perspective, MRIN spiked sharply higher here back above its 50-day moving average of $12.63 with heavy upside volume. This spike higher is coming after shares of MRIN pulled back from its August high of $14.37 to its recent low of $11.50. It looks like the downside volatility for MRIN could be over in the short-term and the stock is now moving within range of triggering a near-term breakout trade. That trade will hit if MRIN manages to take out Wednesday's high of $13.45 and then once it clears more key resistance levels at $14.11 to $14.37 with high volume.

Traders should now look for long-biased trades in MRIN as long as it's trending above its 50-day at $12.63 or above more support at $12 and then once it sustains a move or close above those breakout levels with volume that's near or above 114,298 shares. If that breakout hits soon, then MRIN will set up to re-test or possibly take out its next major overhead resistance levels at $16 to $18.

To see more stocks rising on unusual volume, check out the Stocks Rising on Unusual Volume portfolio on Stockpickr.

-- Written by Roberto Pedone in Delafield, Wis.


RELATED LINKS:



>>5 Stocks Under $10 Making Big Moves



>>Why Wall Street Got Apple Wrong



>>5 Breakout Trades to Take

Follow Stockpickr on Twitter and become a fan on Facebook.

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

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

CNBC.com and Forbes.com. You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zerosum24.


Friday, September 20, 2013

Jefferies Upgrades Huntsman Corp. to “Buy” (HUN)

Due to a number of tailwinds that should benefit Huntsman Corporation (HUN) over the next two years, analysts at Jefferies upgraded the chemical products manufacturer on Monday.

The analysts upgraded HUN from “Hold” to “Buy” and now see shares reaching $26, up from the previous target of $20. This new price target suggests a 35% upside to the stock’s Friday closing price of $19.27.

“Tailwinds into 2014-2015 (butane, new PO/MTBE JV, productivity, better FCF profile, EU footprint), recent relative performance and relative valuation support outperformance into 1H14 even with a neutral resolution on TiO2,” Jefferies analyst Laurence Alexander noted regarding Huntsman Corp.’s future performance.

Huntsman Corporation shares were up 48 cents, or 2.49%, during pre-market trading on Monday. The stock is up 21.19% year-to-date.

Wednesday, September 18, 2013

At the Open: Stocks Mixed Ahead of Fed Tapering Decision; Triumph Plunges 10% on Higher Costs

Stocks opened mixed this morning as investors wait on tenterhooks for the Fed to shed light on monetary policy.

Reuters

The Dow Jones Industrials have dropped 0.1% to 15,517.98, while the Nasdaq Composite has gained 0.1% to 3,751.07. The S&P 500 is little changed at 1,705.52 but still within a few points of a record high.

The mixed performance comes as investors consider what the Fed may or may not do. The consensus now appears to be a small reduction of, say, $10 billion, and today’s disappointing housing data–housing starts rose to an annual rate of 891,00, below forecasts for 915,00–will do little to change that. Marketfield’s Michael Shaoul explains why the housing data was stronger than it looked. He writes:

Although at first glance the August Housing Start and Permit report is a headline miss it is actually a strong set of data once one strips out the influence of the volatile multi-family data. Total Starts were estimated at 891K, below consensus of 917K and the July level of 883K (revised down from 896K). However Single Family Starts rose to 628K from 587K in July, a 16.6% YoY gain while the Multi-Family data fell sharply to 263K from 296K…

The bottom line is that the US Housing Construction cycle continues to move forwards in what we assume will be a fairly long and powerful period of expansion given the long period of time in which this activity has remained well below its historic norm. There is no evidence that higher interest rate and mortgage costs have affected activity over the last 3 months and although we would allow for the fact that this is a fairly short period of time we believe that the recovery will be sustained in the months ahead.

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Barclays’ Barry Knapp considers the historical evidence to gauge the impact of the end of Fed’s easy-money policy:

The equity market's reactions to the monetary policy inflection point, when the Fed takes the first step to normalize monetary policy following easing in response to recession, have been reasonably similar, irrespective of the pace of policy accommodation removal – the average policy normalization-related correction during the prior six business cycles is 8.9%. It is after those periods when key fundamentals, such as earnings and valuation, play a greater role in determining equity market returns.

The last three cycles (1983, 1994 and 2004) are instructive. In 1983, valuation was exceptionally attractive; however, a volatile earnings recovery, similar to this business cycle, left earnings growth at a comparatively slow rate of 5% when the Fed began normalizing policy. The correction was mild compared with the average, and it was five quarters before the advance resumed when earnings growth accelerated in 1985. In sharp contrast, when the 'measured removal of policy accommodation' began in 2004, the S&P 500 was still exceptionally expensive, but robust earnings growth shortened the post-correction range to two quarters. The correction in 1994 was steeper than in 1983 and 2004, yet the duration of the subsequent trading range was between those two at three quarters, with relatively strong earnings growth of 15% and low valuations helping equities withstand an aggressive tightening cycle. Valuation appeared to be a larger driver of share prices after the advance resumed. Returns in 1995 were the strongest at 37%, followed by 1985's 27%, while 2005 returns were in the mid-single digits as rich valuations constrained returns.

See you at 2:15 p.m.

Gamco Investors (GBL) has dropped 2.6% to $73.03 after it was downgraded to Underperform from Neutral at BofA Merrill Lynch, while Viropharma (VPHM) has fallen 2.1% to $39.92 after Merrill lowered its rating to Neutral from Buy.

Manchester United (MANU) has gained 0.9% to $17.27 after the soccer club reported record revenue.

Quicksilver (ZQK) has advanced 3.7% to $6.95 after being started as a buy at BB&T Capital Markets.

Triumph Group (TGI) has dropped 10% to $70.73 after the company said it would face higher program costs.

Monday, September 16, 2013

Mortgage Rate Flip-Flop: Jumbo Loans Now Cheaper

When the Mortgage Bankers Association (MBA) issued its weekly purchase applications report on Wednesday, the group noted without comment that interest rates for a conforming mortgage (less than $417,000) were 4.73%. Interest rates for a nonconforming (jumbo) loan of more than $417,000 had dropped to 4.71%. Jumbo loans have never before carried a lower interest rate than a conforming loan.

The difference is not very great, obviously, but the switch indicates that interest-rate volatility in the face of an expected tapering of Fed asset purchases (which include mortgage bonds) makes a jumbo mortgage loan a more attractive opportunity for cash-rich lenders. Conforming loans are more likely to be packaged and sold to Fannie Mae or Freddie Mac, while jumbo loans are now more likely to be retained on a lender's balance sheet. Because the banks have more control over their own balance sheets, the interest rate they charge for a jumbo loan reflects the attractiveness of the loan and the borrower more than it reflects bond prices.

Home buyers who qualify for a jumbo loan typically have more income and are better candidates to purchase other banking services such as credit cards and brokerage accounts.

An executive at Wells Fargo & Co. (NYSE: WFC) told The Wall Street Journal that "the current inversion between jumbo and conforming rates could last 'for the foreseeable future' so long as banks' cost of funds stays at its current level and loan demand doesn't rise sharply." Wells Fargo is the country's leading mortgage lender.

Wednesday, September 11, 2013

Merrill Lynch Sees Huge Contrarian Value in Global Mining and Steel Companies

The research team at Merrill Lynch has found that global investors remain very "underweight" in their holdings of metals and mining shares, while valuations do not look stretched. This contrasts with decent fundamentals for a range of commodities: global steel prices have been rising, China has been restocking iron ore and the pace of copper destocking in the country has slowed. Yet, as they point out in a new research report, positioning in the equities has just started to adjust. The key takeaway for investors? The potential upside in the stocks more than outweighs the downside.

Some 72% of global fund managers expect a stronger global economy, the most bullish growth consensus since December of 2009. Eurozone optimism has reached nine-year high, and China expectations have bounced, especially after Monday’s data. Savvy investors are seeing the worldwide growth and putting money back to work in commodities and steel. Here are the top stocks to buy now from Merrill Lynch.

Allegheny Technologies Inc. (NYSE: ATI) is the top steel and alloy play from Merrill Lynch. The company is one of the world’s largest producers of specialty metals. Its diverse product mix includes titanium, nickel alloys, precision strip and exotic alloys. Although Allegany produces some commodity items such as stainless steel products, its focus and a significant portion of its profits are generated from innovative, specialty alloys that only a few companies in the world are able to produce. Merrill Lynch has a $20 price target. The Thomson/First Call target is $30. Investors are paid a 2.6% dividend

Barrick Gold Corp. (NYSE: ABX) was crushed as the price of gold plunged in the spring. If the company keeps its diversified portfolio of mines intact, with Bald Mountain and Marigold in the United States, Pierina in Peru, Buzwagi in Tanzania and promising cost-efficient projects on the way (Pueblo Viejo Project), the stock may be poised for a strong rebound. Merrill Lynch has a $25 price target. The consensus estimate is lower at $20. Investors are paid a 1.0% dividend.

CONSOL Energy Inc. (NYSE: CNX) is one of the ultimate contrarian plays at Merrill Lynch. The company is the only coal stock in their universe to be rated as a stock to buy for investors. Cost cutting has helped to lift the stock, and more could be on the way. Merrill Lynch has a $36 price target, while the consensus is pegged higher at $41. Investors are paid a 1.5% dividend.

Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX) is a top diversified name to buy at Merrill Lynch and may offer investors the best total return play. The company by almost all metrics is undervalued, and it continues to raise its dividend yearly. Merrill Lynch has a $37 price target, and the consensus figure is $36.50. Investors are paid a very solid 4.0% dividend.

Kaiser Aluminum Corp. (NASDAQ: KALU) is the only aluminum stock to make the cut at Merrill Lynch. The company offers investors a play on the growing demand for aluminum in the aerospace and automotive industries, but without exposure to the volatile (and now declining) price of aluminum. The aerospace and automotive industries are in cyclical uptrends and the amount of aluminum that goes into airplanes and cars is increasing. The Merrill Lynch price objective is at $75, and the consensus target is slightly higher at $78. Investors receive a 1.7% dividend.

Kinross Gold Corp. (NYSE: KGC) may be the stock that give investors the most amount of leverage on a gold rebound. Management reduced the company’s annual capital expenditures forecast to $1.45 billion from $1.6 billion, saving $180 million from its cost restructuring initiatives. Cancellation of its upcoming semiannual dividend payment to its shareholders will save $182 million per year. Kinross expects to produce gold at a cost of $1,000 to $1,200 an ounce this year. The Merrill Lynch target is $7.00, and the consensus target is $6.55. The dividend, which soon will be cancelled, has a yield of 2.9%.

Southern Copper Corp. (NYSE: SCCO) may be the top way to play the copper trade. The current drop in copper prices is due largely to the global slowdown triggered by reduced growth in China, which accounts for nearly 40% of global copper consumption. However, according to the International Copper Study Group, worldwide copper demand for 2013 is still expected to grow by 4.3% and increase to 5.1% for 2014. Merrill Lynch has a $36 price objective. The consensus number stands lower at $32. Investors are paid a 1.7% dividend.

Vale S.A. (NYSE: VALE) is another top diversified name that offers investors a solid total return prospect. With a surge in iron ore purchasing in China, Vale figures to ramp up earnings the rest of this year and through 2014. J.P. Morgan came out Monday with a very bullish stance on Vale as well. Merrill Lynch has a $20 price target, and the consensus number is posted at $19. The stock pays an outstanding 4.8% dividend.

Contrarian investing can be difficult, as can value investing. The tide for stock sectors to turn when they are out-of-favor can be lengthy. The mining and metals sector has been in the investing doghouse for quite some time, so some of the waiting game has played out. The key to remember is the global growth angle. If that takes off as expected, demand for these top names will jump, and jump fast.

Monday, September 9, 2013

Top 5 High Tech Companies To Own In Right Now

It doesn't always look like it, but General Motors (NYSE: GM  ) is making progress in its long haul back from bankruptcy.

GM said on Tuesday that its U.S. sales were up 6% in June, with all four of its brands posting retail sales gains. That beat analysts' estimates, which called for an average 2.1% gain, according to Bloomberg.

The all-new 2014 Chevy Silverado has just started to arrive at dealers, and it's selling at a fast pace. Photo credit: General Motors.

Six percent may not sound like a big gain, and it's likely to have trailed the U.S. market's overall growth for the month. (We'll know for sure in a day or so.) But the numbers behind the headline tell a story that suggests that GM is finally on the right track in its home market.

Top 5 High Tech Companies To Own In Right Now: China North East Petroleum Holdings Limited(NEP)

China North East Petroleum Holdings Limited engages in the exploration and production of crude oil in northern China. As of December 31, 2010, it operated 295 producing wells with proven reserves of 5,476,200 barrels of crude oil at Qian?an 112, Hetingbao 301, Daan 34, and Gudian 31 oilfields. The company, through its subsidiary, Song Yuan Tiancheng Drilling Engineering Co., Ltd., provides contract land drilling and other oilfield services for state-owned and non-state-owned oil companies. China North East Petroleum Holdings Limited is headquartered in Song Yuan City, the People?s Republic of China.

Top 5 High Tech Companies To Own In Right Now: Canam Coal Corp (COE.V)

CanAm Coal Corp., together with its subsidiaries, engages in the acquisition, exploration, and development of coal resources and resource related technologies in the United States. It primarily explores for metallurgical and thermal coal. The company holds interests in 4 coal mines located in Alabama; and coal, mineral, and surface rights on approximately 22,500 acres of land within the Buick Coal Project located in Colorado. It also owns rights to a proprietary coal to liquids technology, which converts coal into liquid fuels, such as oil and jet fuel. CanAm Coal Corp. was incorporated in 1994 and is headquartered in Calgary, Canada.

Top 5 Canadian Stocks To Invest In Right Now: Chindex International Inc.(CHDX)

Chindex International, Inc. engages in the provision of healthcare services; and sale of medical equipment, instrumentation, and products. The company operates in two segments, Healthcare Services and Medical Products. The Healthcare Services segment owns and operates the United Family Healthcare network of private hospitals and clinics in the Beijing, Shanghai, and Guangzhou markets. This segment also operates a managed clinic in the city of Wuxi, south of Shanghai. It offers a range of family healthcare services, including 24/7 emergency rooms, intensive care units, and neonatal intensive care units, operating rooms, clinical laboratory, radiology, and blood banking services for men, women, and children. The Medical Products segment markets, distributes, and sells medical capital equipment, instrumentation, and other medical products for use in hospitals in China and Hong Kong. It offers diagnostic color ultrasound imaging devices, robotic surgical systems and instrument ation, mammography and breast biopsy devices, and lasers for cosmetic surgery. This segment sells its products through its direct sales force. The company was founded in 1981 and is based in Bethesda, Maryland.

Top 5 High Tech Companies To Own In Right Now: PROS Holdings Inc.(PRO)

PROS Holdings, Inc. provides pricing and margin optimization software worldwide. It offers PROS Pricing Solution Suite, a set of integrated software products that enables enterprises to apply pricing and margin optimization science to determine, analyze, and execute optimal pricing strategies through the aggregation and analysis of enterprise application data, transactional data, and market information. The PROS Pricing Solution Suite consists of Scientific Analytics to gain insight into pricing performance; Price Optimizer to institute control of pricing policies; and Deal Optimizer to provide guidelines, additional context, and information to sales force. Its products also include PROS Revenue Management Solution Suite, a suite of industry specific revenue management software products for the enterprises in travel target markets. The PROS Revenue Management Solution Suite comprises PROS Analytics to identify hidden revenue leaks and opportunities, PROS Revenue Management product to manage passenger demand with leg- or segment-based revenue optimization, PROS O&D products to manage passenger demand with passenger name record or PNR based revenue optimization, PROS Real-Time Dynamic Pricing product to determine the optimal prices, PROS Group Revenue Management product to manage group request and booking revenues, PROS Network Revenue Planning product to deliver network-oriented fare class segmentation, PROS Cruise Pricing and Revenue Optimization for customers to understand consumers price sensitivities and track competitor behavior, PROS Hotel Revenue Optimization product that helps customers to enhance pricing decision. In addition, the company provides pricing and implementation professional, and ongoing support and maintenance services. It serves customers in the manufacturing, distribution, services, hotel and cruise, and airline industries primarily through its direct sales force. The company was founded in 1985 and is headquartered in Houston, Texas.

Advisors' Opinion:
  • [By Fernandez]

    PROS Holdings, Inc. (NYSE: PRO), is a leading provider of pricing and revenue optimization software worldwide, in five major markets: airline, hotel, cruise, manufacturing and services.

    PROS has proprietary pricing algorithms and systems that have been developed and refined over many years of implementation and experience, that provide the company with a distinct competitive advantage over the many rivals that troll the pricing optimization space.

    When I recommended the purchase of PROS shares, I did not fully appreciate the potential severity of the downturn in IT spending, and the markets in which PROS operates.

    Even with the stock trading around $7.00 per share, I thought that there was more downside risk than upside potential.

    With shares now trading at $5.50 as of this writing, recommending selling shares at $7.00 when I did was indeed a prudent thing to do, as the shares are now down over 20% from where I recommended they be sold not too long ago.

    I detailed my exact reasons for selling shares of PROS here.

    The question now becomes, with the shares significantly lower than before, is PROS actually a bargain at these prices? (See page 2)

    I definitely think we are getting there, but wouldn’t venture to guess until after their next earnings announcement on 11-6-08.

Top 5 High Tech Companies To Own In Right Now: Active Power Inc.(ACPW)

Active Power, Inc., together with its subsidiaries, designs, manufactures, and markets critical power quality solutions. It provides various products that deliver continuous clean power; and protects customers from voltage fluctuations, such as surges and sags, and frequency fluctuations, as well as offer temporary power to bridge the gap between a power outage and the restoration of utility power. The company offers the CleanSource UPS, a battery free uninterruptible power supply (UPS) system that integrates UPS electronics and flywheel energy storage system into one compact cabinet. Active Power, Inc. also provides the CleanSource DC, a battery-free replacement for lead-acid batteries used for bridging power; CoolAir products; and GenSTART, a battery-free starting modular system for customer?s diesel generator. In addition, it offers continuous power systems, which incorporates its UPS products with switchgear and a generator sold in a containerized package, and markete d under the PowerHouse brand name. Further, the company provides customer support services, including infrastructure needs assessment, vetting and validation, alignment with business objectives, system design, deployment, and start-up and commissioning, as well as service, support, and monitoring. It serves data centers, manufacturing, technology, broadcast and communications, financial, utilities, healthcare, government, and airport industries. The company sells its products through direct sales force, manufacturer?s representatives, distributors, strategic IT partners, and original equipment manufacturer partners in the United States, Europe, the Middle East, Africa, the Asia Pacific, and North America. Active Power, Inc. was founded in 1992 and is headquartered in Austin, Texas.

Sunday, September 8, 2013

Which Telecom and Wireless Companies Can (and Cannot) Still Be Acquired?

What generally happens when industries have only regional providers or merely a whole slew of competitors? Usually it boils down to mergers for size and scale, then outright acquisitions to eliminate competition. We have seen this consolidation in the wireless space with AT&T Inc. (NYSE: T), Verizon Communications Inc. (NYSE: VZ), Sprint Corp. (NYSE: S) and T-Mobile US Inc. (NYSE: TMUS).

Fitch Ratings recently showed that the four largest U.S. wireless carriers have some 92% of the U.S. market share. The long and short of the matter is that M&A in the U.S. wireless space has seen its heyday. 24/7 Wall St. has compiled a full-spectrum analysis of which wireless and telecom carriers and providers can still be acquired and which ones simply cannot.

The good news for investors hoping for M&A is that some players do still exist. The bad news is that these players now all will be considered weaker competitors on their own, meaning that investors have to be very careful if they want to buy a company based only on its own merits and opportunity.

We agree with Fitch Ratings in its belief that few material targets remain when operators and spectrum holdings are considered. We also operate under the same belief as Fitch that the Federal Communications Commission (FCC) would restrict any further material consolidation among the top wireless carriers. So the real question, and opportunity, outside of the wireless carriers is where else to look for M&A.

One such move that Fitch expects in the near term would be that Dish Network Corp. (NASDAQ: DISH) will make a wireless strategy move within the next few months, and according to outsiders it would likely be in some form with T-Mobile US Inc. (NYSE: TMUS). Fitch said, “Activity around DISH could be the most significant near-term wireless industry consolidation event.”

Elsewhere, Fitch believes that the 578 to 698 MHz TV spectrum auction could occur around 2015 or 2016, and that auction alone could represent the largest single acquisition event for the industry over the foreseeable future. Unfortunately, that leaves no room for investors because you cannot invest in the government nor in the FCC. Another hopeful from Fitch is some or all the LightSquared L-band spectrum.

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So, what other mergers are there in the near term or long term? We would point out that AT&T Inc. (NYSE: T) was blocked in its acquisition of T-Mobile US Inc. (NYSE: TMUS).

The Verizon Communications Inc. (NYSE: VZ) deal with Vodafone Group PLC (NYSE: VOD) is the largest deal and has been years in the making. Now Verizon gets to own effectively all of Verizon Wireless. One fear of 24/7 Wall St. is that Verizon may have to work on its leverage now rather than continue to pursue annual dividend hikes.

The end of M&A may take away oomph for the quick in and out traders and may limit special situation investing. The good news is that this could be the best thing in the world for dividend-hungry investors. Fitch was specific to say that the end of the M&A cycle will bring steadier financial trends and called it a consolidated and maturing marketplace.

24/7 Wall St. has gone back over the telecom and wireless operators that are left. There are still some potential acquisition candidates, but our focus revolves around who can close a regional dominance gap or who can bring other spectrum assets or other lesser-known assets to the table. Here are some of the possibilities after some freshly closed and pending transactions.

Thursday, September 5, 2013

Near Make or Break Levels

With many markets ending the month near critical levels, it increases the level of uncertainty and may keep investors on the sidelines in September, writes MoneyShow's Jim Jubak.

One of the things I'm worried about as we head into September and October is that we're finishing August at kind of make or break technical levels for a lot of things; for treasuries, for currencies, for the US S&P. All of these are finishing August perched at levels that, if they broke through, people would go "Uh-oh," and that, in itself, is enough to make people feel uncertain, because we have a lot of other uncertainties.

If you're looking at the US dollar versus the yen, or you're looking at the yen versus the dollar, you've got the yen at 97, which has, sort of, been decent support. Is the yen going to break lower, which would be good for Japanese stocks, or stay right here? The dollar, in terms of the dollar index, again, not much in the way of direction, which makes people more and more nervous.

You have all these things, including the S&P, which is, sort of, near support from July. The question then, of course, is if it's goes through that, where is the next support? When you're in a situation like this, that's what people are asking. They're looking at the charts and not going, "Oh, so where is the resistance? How much further up can I go, so how much can I buy before I need to start worrying about hitting the ceiling?" They're worried about, "Okay, if I go through this support, and how much below where I am now is the next support?" They're starting to worry about really taking the loss and seeing that loss multiple.

That's the kind of nervousness that we don't need as we go into September and October, which is a nervous enough month. Technically, this market is looking increasingly nervous, increasingly poised, so that investors will ask, "Where is the next support, because it looks like we're going through this one." If that's the psychology that takes effect, as we go into September and October, that almost guarantees that we're going to see, at best, flat months, and the worst, the continuation of something. It looks like it might actually build into the first correction that this rally has seen in a long time. Actually, I think it may be good in the long term to rebuild the rally, but in the short term is going to be, well...painful.

This is Jim Jubak for the MoneyShow.com video network.

Tuesday, September 3, 2013

Top Canadian Companies To Buy For 2014

The first article of the series has introduced the Carbonate Triangle of the renowned Canadian oil sands. The region is the world's third largest oil reserve with its rich carbonate-hosted bitumen deposit located in the northern Alberta's deep underground. Precisely, the Carbonate Triangle is situated between three major bitumen areas, Athabasca, Cold Lake and Peace River.

In today's investment guide on the Carbonate Triangle, I will present the main characteristics of the Athabasca area to have a better assessment of its potential. Then, I will discuss one small oil producer involved in Athabasca, with a potential production of more than 100,000Boe/d by 2016 from its core assets. So far, I looked into several producers involved in Peace River and Cold Lake regions of the Carbonate Triangle:

Top Canadian Companies To Buy For 2014: Texas Pacific Land Trust(TPL)

Texas Pacific Land Trust engages in the sale, lease, and management of land in the United States. It also retains oil and gas royalties, and involves in temporary cash investments. The company leases land to the ranching industry for grazing purposes. As of March 31, 2011, it owned surface rights in 949,355 acres of land in 20 counties in Texas; and 318 town lots in Loraine. The company also owned a 1/128 nonparticipating perpetual oil and gas royalty interest under 85,414 acres of land; and a 1/16 nonparticipating perpetual oil and gas royalty interest under 386,988 acres of land in the western part of Texas. Texas Pacific Land Trust was founded in 1888 and is based in Dallas, Texas.

Top Canadian Companies To Buy For 2014: Goldcorp Incorporated(GG)

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

Advisors' Opinion:
  • [By Christopher Barker]

    Every ship needs an anchor, and for gold investors looking to navigate the admittedly rough seas of the gold mining industry, I can think of no greater anchor than Goldcorp. With the important caveat that some of the company's substantial challenges faced during 2012 could present further selling pressure in early 2013 as forward production guidance takes a bit of a haircut, I agree with Credit Suisse analyst Anita Soni that any such weakness may present a meaningful buying opportunity. I won't go into great detail here, since investors can access my premium research report on Goldcorp for further discussion of the substantial long-term investment opportunity in the shares of this quality producer.

  • [By Smith]

    Although its name does little to denote this, Goldcorp is a well-positioned silver play for 2011, according to the analysts we surveyed.

    “The name is one that people tend to think of it as gold, but it's in the top 20 of silver producers globally with about 13 million ounces a year ,” says Peter Sorrentino of Huntington Funds.

    Morningstar analyst Min Tang-Varner recently raised her fair value estimate for Goldcorp by $12 a share to $48 after the company reported a 28 per cent rise in revenue for the third quarter ended Sept. 30 compared with the year before.

    This, despite 4 per cent decline gold production, as revenue received a boost from $1,239/oz realized gold prices and $19.15/oz silver prices.

    Tang-Varner tells investors that the reduction of Goldcorp's cash cost by $100/oz from the prior quarter to $260/oz due to higher silver, copper and zinc production and the run-up in their prices, was “rather extraordinary.”

    Sorrentino says Goldcorp is a stock that investors would be “wise to consider” if they were looking for a name that would be discovered suddenly as a major silver play, without feeling that they were overpaying for it.

    Goldcorp also prices everything that it does in Canadian dollars, which should reduce currency risks for investors in Canada.

5 Best Medical Stocks To Invest In Right Now: Newmont Mining Corporation(Holding Company)

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

Top Canadian Companies To Buy For 2014: E.I. du Pont de Nemours and Company(DD)

E. I. du Pont de Nemours and Company operates as a science and technology company worldwide. It operates in seven segments: Agriculture & Nutrition, Electronics & Communications, Performance Chemicals, Performance Coatings, Performance Materials, Safety & Protection, and Pharmaceuticals. The Agriculture & Nutrition segment provides hybrid seed corn and soybean seed, herbicides, fungicides, insecticides, value enhanced grains, and soy protein under the Pioneer brand name. The Electronics & Communications segment supplies materials and systems for photovoltaic products, consumer electronics, displays, and advanced printing. The Performance Chemicals segment offers fluorochemicals, fluoropolymers, specialty and industrial chemicals, and white pigments for various markets, such as plastics and coatings, textiles, mining, pulp and paper, water treatment, and healthcare. The Performance Coatings segment supplies high performance liquid and powder coatings for motor vehicle origi nal equipment manufacturers (OEM); the motor vehicle after-market; and general industrial applications, such as such as coatings for heavy equipment, pipes and appliances, and electrical insulation. The Performance Materials segment provides polymers, elastomers, films, parts, and systems and solutions for the automotive OEM and associated after-market industries, as well as electrical, electronics, packaging, construction, oil, photovoltaics, aerospace, chemical processing, and consumer durable goods. The Safety & Protection segment primarily offers nonwovens, aramids, and solid surfaces for the construction, transportation, communications, industrial chemicals, oil and gas, electric utilities, automotive, manufacturing, defense, homeland security, and safety consulting industries. The Pharmaceuticals segment represents its interest in the collaboration relating to Cozaar/Hyzaar antihypertensive drugs. The company was founded in 1802 and is headquartered in Wilmington, Dela ware.

Advisors' Opinion:
  • [By Lowell]

    DuPont offers agriculture and food, building and construction, electronics and communications, general industrial and transportation products and services. Cramer holds 500 shares of DD stocks. DD has a dividend yield of 3.57% and returned -3.52% since the beginning of this year. It has a market cap of $42.94B and a P/E ratio of 12.77. Phill Gross and Robert Atchinson had $55 million in DD shares.

Top Canadian Companies To Buy For 2014: STMicroelectronics N.V.(STM)

STMicroelectronics N.V., an independent semiconductor company, engages in the design, development, manufacture, and marketing of a range of semiconductor integrated circuits and discrete devices. Its products include discrete and standard commodity components, application-specific integrated circuits, custom devices and semi-custom devices, and application-specific standard products for analog, digital, and mixed-signal applications. The company also offers subsystems and modules for the telecommunications, automotive, and industrial markets comprising mobile phone accessories, battery chargers, ISDN power supplies, and in-vehicle equipment for electronic toll payment, as well as provides Smartcard products. Its products are used in various microelectronic applications consisting of automotive products, computer peripherals, telecommunications systems, consumer products, industrial automation, and control systems. The company sells its products through distributors and ret ailers. STMicroelectronics N.V. was founded in 1987 and is headquartered in Geneva, Switzerland.

Top Canadian Companies To Buy For 2014: Thor Industries Inc.(THO)

Thor Industries, Inc., together with its subsidiaries, manufactures and sells a range of recreation vehicles and small and mid-size buses, as well as related parts and accessories in the United States and Canada. The company offers a range of travel trailers and motorhomes under the trade name of Airstream, which include Airstream Safari, International, Flying Cloud, and Bambi travel trailers, as well as Interstate Class B motorhomes. It also manufactures and sells conventional travel trailers and fifth wheels under the trade names of Dutchmen, Four Winds, Aero, Grand Junction, Colorado, Cruiser, Seville, Zinger, and Sunset Trail; travel trailers and fifth wheels under trade names of Montana, Springdale, Hornet, Sprinter, Outback, Laredo, Everest, Mountaineer, Challenger, Cougar, Komfort, and Trailblazer; and gasoline and diesel Class C, Class A, and Class B motorhomes under the trade names of Four Winds, Hurricane, Windsport, Mandalay, Dutchmen, Chateau, Serrano, Ventura, and Fun Mover. In addition, it manufactures and sells gasoline and diesel Class A motor homes under the trade names of Daybreak, Challenger, Astoria, Tuscany, Outlaw, and Avanti; travel trailers, fifth wheels, truck campers, and park models under the trade name of General Coach; and park models under the trade names of Tranquility, Westchester, and Breckenridge. Further, the company manufactures small and mid-size transit and commercial buses under the trade names of Aerolite, AeroElite, Aerotech, Escort, MST, Transmark, EZ Rider, Axess, Challenger, Defender, Crusader, American Cruiser, Classic Coach, EZ Trans, GC II, and Pacer. It markets its vehicles through independent dealers to municipalities and private purchasers, such as rental car companies and hotels. The company has a joint venture agreement with Cruise America, Inc. to provide short-term rentals of motorized recreation vehicles to the public. Thor Industries was founded in 1980 and is based in Jackson Center, Oh io.

Monday, September 2, 2013

Advisors, Investors Confident About Future: Schwab

RIAs are more confident and optimistic about their businesses for the future, according to Schwab Advisor Services. The firm published its 13th semiannual Independent Advisor Outlook Study on Wednesday, finding that advisors are confident and aware of the challenges they face.

One of those challenges is what to do about the women and younger clients who will soon be the bulk of their client base. About two-thirds of respondents said women, Gen X and Gen Y clients will be the “driving force” of their profitability in five years.

That realization doesn’t mean advisors are actively addressing those clients yet. More than two-thirds of respondents said asset growth was their top priority for the next few years and that profitability is coming from high-net-worth clients, boomers and retirees.

“Positioning their firms for sustainable long-term growth means RIAs have to balance the demands of running a successful business today with the need to make investments and take proactive steps to attract and meet the needs of a new generation of clients,” Bernie Clark, executive vice president and head of Schwab Advisor Services, said in a statement. “RIAs have significant opportunity with the clients who are right here, right now. But they also have to keep their eye on how best to navigate the unchartered territory that lies ahead – it is a delicate but important equilibrium.”

While the vast majority of advisors said they were interested in working with their clients’ children, one of the barriers to doing so is that they don’t think they have enough assets to make it worth their while. Living in a different area and wanting to use another advisor are also barriers to working with clients’ children.

Another challenge to future profitability is more competition from other RIAs and other types of firms that are trying to emulate RIA firms. Consequently, 72% of advisors are focusing on differentiating their firms. One way they’re doing so is by building a talented team of advisors at their firms. More than half of respondents said they need to hire more diverse advisors, and 46% said they needed more young advisors. However, many are struggling to find qualified people, and when they do, to train them.

Schwab also polled investors in a separate survey to gauge their attitudes and found they are similarly confident. Almost 60% of advisors and 65% of investors think the S&P 500 will continue to rise over the next six months. They differ, though, on how they’ll reach their goals. Nearly half of investors say it will be easy for their advisor to reach their investment goal in the current market—the same percentage of advisors who say it will be difficult.

Three-quarters said they were confident about making decisions with their advisor. The investor survey found clients are worried about volatility, interest rates, inflation and tax increases, and have brought those subjects up with their advisors.

Investors are clearly drawn to advisors who can provide holistic planning services, the survey found. Ninety-two percent said they wanted an advisor who could evaluate their entire financial picture. Trust is also important, and 85% of investors want to know how their advisor is compensated.

“Building trusted relationships with clients is an RIA sweet spot. The independent model allows advisors to offer what investors want – collaboration, customization, transparency and accountability,” said Clark. “This invaluable combination sets RIAs apart from more conflicted models and positions them very competitively for success.”

The investor survey found a significant gap in where clients put their trust. Seventy-two percent said they put their trust in individual advisors, compared with 42% who said they trust financial services companies as a whole.

More advisors anticipate consumer spending will increase than the last time the survey was conducted in July 2012, but they also expect household debt will increase with it.

The advisor survey asked which sectors will perform best in the next six months and found 40% of advisors expect health care will perform well. Information technology also had high expectations, though less than in last year’s survey.

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Check out Servicemembers, Civilians Less Worried About Economy on AdvisorOne.

Sunday, September 1, 2013

Why are bonds the true friend in a volatile market?

Bonds aren't as complex as they may seem. Despite the numerous titles used to describe them � fixed-income securities, debt instruments, credit securities, etc. � bonds are nothing more than a fancy IOU (I owe you) in which the terms, pay-back date and interest rate are carefully spelled out, as in a legal document.

Bonds have a reputation for safety. And that reputation is well-deserved. But that doesn�t mean that bonds are risk free. In fact, bond investors have to worry about things that stock investors never worry about; like inflation and liquidity risk. It is a common misconception that bonds are only for the very old, very rich or very conservative investors. In fact, bonds are an important component of a strategically-balanced portfolio at every stage of any investor's life.

There are three important features to notice in a bond; par value, maturity date and coupon rate. A bond, whether it is issued by a corporate or the government, has a fixed maturity date.

Advantages of Bonds

A Safe Haven for Your Money - In general, investing in debt is safer than investing in equity. The reason for this is the priority that debt holders have over shareholders. If a company goes bankrupt, debt holders are ahead of shareholders in the line to get paid.

Slow and Steady but predictable Returns -: As per historical trends, stocks will outperform bonds in the long run. However, bonds outperform stocks at certain times in the economic cycle. It's not unusual for stocks to lose 10% or more in a year, so when bonds make up a portion of your portfolio, they can help smooth out the bumps when a recession comes around. There are always conditions in which we need security and predictability. Retirees, for instance, often rely on the predictable income generated by bonds.

Returns from Bonds/Debt instruments have outperformed Equity markets in the span of last 4 Yrs.       

 

 

 

 

Better than bank FDs: Sometimes bonds are just the only decent option. The interest rates on bonds are typically greater than the rates paid by banks on savings accounts. As a result, if you are saving and you don't need the money in the short term, bonds will give you the greatest return without posing too much risk.

So whether you are just starting out in your career or you are already enjoying retirement, or if you are somewhere in between, bonds should be a part of your investment portfolio.

The shining Indian bond market

It is expected that the Indian bond market will be a formidable force to reckon with as investors increasingly look for secure investment opportunities where they can be assured of a fair return with low risks. The mood is upbeat and Indian bonds have been able to get a lot more investors in recent years.

The main reason for the rise in Indian bonds is that they have a high amount of liquidity. The increasing instability of the stock market has also fuelled the growth of bonds. There are also more companies offering quality bonds these days which has made the investor check out the offers and plough in his or her money into bonds. The market is more liquid and the fixed income feature is also these days more favored by many investors. Many financial experts studying the scenario in India are very upbeat about the bond market.

Tax Implications
 
Income-Tax: Interest on bonds will be taxable under the Income-Tax Act, 1961 as applicable according to the relevant tax status of the bond holder.

Interest received on regular interest bonds is taxable at normal rates.  Further the difference between the purchase and sale price of the bond is treated as capital gains Deep Discount Bonds - difference between the purchase and sale price of the bond is treated as capital gain.  i.e. the full returns are treated as capital gains and hence these are tax efficient if held for more than 1 year Bonds held for a period up to 12 months can result in short term capital gain that is taxed as ordinary income. Summary
 
� Bonds are a good alternative to FD and FMP
� Most of the bonds are listed and can be traded like your equity shares online; many of the bonds have decent volumes and offer opportunities for quick liquidation
� Bonds are good options when markets are volatile and interest rates are going high
� Bonds investment is as simple as buying a share
� Safe and sound investment option for people looking at risk free avenues