Is Your Cash Trash? Eye-Popping Chart Raises Question

A provocative chart demonstrating a sharp negative correlation between 10-year Treasuries and the dollar appears to suggest the U.S. currency may be losing its safe-haven appeal.

The chart by currency fund manager Axel Merk of Merk Investments shows the 1-year rolling correlation between the U.S. dollar index and 10-year Treasury notes over the past 18 years, revealing a steep plunge from the summer of 2012 until today.

That drop-off means that while U.S. Treasuries are currently viewed as a safe haven, attracting investment, the U.S. dollar is not simultaneously rising but is in fact falling against a basket of currencies.

In other words, there is a flight out of the greenback at the same time as the flight to the safety of Treasuries. It’s not that the two assets are moving out of correlation; rather, the relationship is one of high and rising negative correlation (of close to -0.60).

A variety of conflicting approaches could explain this divergence. For example, Merk entertains the possibility that investors would turn to the dollar in a “real” crisis versus today’s “subtle” crises.

But the veteran currency manager prefers a different explanation. He says the sharp selloff in the dollar began precisely when European Central Bank head Mario Draghi promised to do “whatever it takes” to save the eurozone.

The chart suggests to Merk that, as he puts it, “the euro has become a true competitor to the greenback.”

It remains to be seen whether the declining fortunes of the dollar are a temporary phenomenon or indicative of a loss of safe haven status. Merk clearly favors the latter view, writing “we have long argued that there may not be such a thing anymore as a safe asset and investors may want to take a diversified approach to something as mundane as cash.”

Indeed, just days ago Gluskin Sheff chief economist David Rosenberg, widely followed by financial advisors who read his popular daily economic report, Breakfast with Dave, observed that global investors have been flocking to the Canadian dollar, despite aggressive efforts by Ottawa to talk down the loonie.

Writing in Canada’s Financial Post, Rosenberg writes:

“Net foreign buying of Canadian equities has topped $27 billion over the past six months, which has only happened two other times on record.

“Global investors apparently see what I see: CAD weakness represents massive stimulus.”

It’s Time to Double Down on Yum! Brands

Yum! Brands (NYSE: YUM  ) looks poised to increase sales at all three of its brands: KFC is bringing back the Double Down, Taco Bell has a new breakfast menu, and Pizza Hut has WingStreet. Yum! Brands is certainly not afraid to try new ideas, which illustrates management's ability to overcome adversity, especially after the challenges the company faced in China over the last few quarters.

Considering that Yum! Brands has more than 40,000 restaurants globally compared to McDonald's (NYSE: MCD  ) 35,000 locations, can these new menu items help Yum! Brands catch up to McDonald's in total sales?

Solid first-quarter results
In the first quarter, Yum! Brands posted earnings per share of $0.87, $0.02 better than expected and $0.17 higher than last year's first quarter. While total revenue rose 7.1% year over year to $2.7 billion, it was still lower than the $6.7 billion in revenue that McDonald's recorded in the same quarter.

Source: Yum! Brands

In terms of same-store sales growth, the China division led the way with a 9% increase. KFC saw a 1% rise in same-store sales; Pizza Hut recorded a 2% decrease, and Taco Bell saw a 1% decline in same-store sales.

McDonald's first quarter was not that great
For McDonald's, the first quarter was a disappointment. Even though same-store sales rose 0.5% globally, they were down 1.7% in the U.S. First-quarter earnings per share were $0.03 lower than expected and $0.05 lower than last year. Total revenue was just 1% higher than last year.

Source: Wikimedia Commons

McDonald's expects April's global same-store sales to be positive as the weather improves. McDonald's blamed the weather for the sales weakness it experienced in the first quarter. This year, McDonald's plans to open 1,500 new restaurants.

New menu items expected to boost sales for Yum! Brands
Yum! Brands is counting on new menu items from KFC, Taco Bell, and Pizza Hut to boost sales. If the new menu items can drive traffic into its stores, Yum! Brands hopes to capture sales that ordinarily would have gone to a competitor like McDonald's.

For KFC, the company is looking for the KFC Double Down to boost sales like the item did when it was first introduced back in 2010. In its first month, KFC sold more than 10 million Double Downs. The Double Down is certainly a unique menu item. It consists of bacon, Monterey Jack cheese, and the Colonel's sauce between two 100% white meat KFC chicken fillets.

Source: KFC

Pizza Hut is looking for new Garlic Parmesan Pizza and Buffalo wings from WingStreet to increase sales. I think WingStreet has potential for Pizza Hut, and I discussed the possibilities in "Can Pizza Hut's WingStreet Take Down Buffalo Wild Wings? Here's Why It Matters." The new Garlic Parmesan Pizza comes in three distinct flavors for $10 -- Chicken Bacon Tomato, Roasted Veggie, and Five Cheese.

Taco Bell's focus has been on its new breakfast menu and going head-to-head with McDonald's during breakfast hours. The new breakfast items include Cinnabon Delights, Waffle Tacos, Breakfast Burritos, A.M. Crunchwraps, and A.M. Grilled Tacos. Taco Bell has also launched an aggressive marketing campaign to raise awareness. According to Yum! Brands CEO David Novak, Taco Bell's breakfast is "off to a great start."

Source: Taco Bell

What about McDonald's menu?
To fend off the challenge from Taco Bell and its new breakfast menu, McDonald's offered a free small McCafe coffee and advertised the McGriddle to go up against Taco Bell's Waffle Taco. A McGriddle consists of two small pancakes made with maple flavoring; it comes in three varieties -- Bacon, Egg, and Cheese McGriddles, Sausage McGriddles, and Sausage, Egg, and Cheese McGriddles. The big advantages that McDonald's has during the breakfast hours are that the chain has been running its breakfast menu the longest, and McDonald's has become part of the daily routine for most consumers. This is the biggest challenge Taco Bell faces and explains the aggressive advertising push.

How do shares compare?

 

Market Cap

Forward P/E

1-Year Return

Dividend Yield

Yum! Brands	$34.02 B	Top 5 Asian Companies To Own In Right Now 18.20	14.30%	1.90%
McDonald's	$98.13 B	15.84	(1.87%)	3.20%

Source: Yahoo! Finance

Foolish final thoughts
I like the moves Yum! Brands and its CEO David Novak are making. He knows that innovative menu items are needed to help drive traffic, and he is focused on boosting sales at KFC, Taco Bell, and Pizza Hut. This year, he expects to deliver 20% earnings-per share growth. With shares trading at 18 times next year's earnings, I think shares of Yum! Brands are set to deliver for shareholders.

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The Best Way To Profit From The Trillion-Dollar ...

I have a friend who suffers from a peculiar phobia. It's so bad that her fear keeps her from driving many places.

She will drive a hundred miles in the wrong direction to avoid coming face to face with the cause of her fear, a cause that many drivers face on a daily basis. Her fear can be hard on her social life, because she's unwilling to drive to many activities outside her neighborhood.

Believe it or not, my friend has a high-powered corporate job and is very successful, despite her unusual phobia. For a long time, I saw her fear as irrational, but after doing some research for this article, I am starting to understand it, irrational as it may seem to me.

Not only does my friend's fear make some sense, it has led to my discovery of a trillion-dollar investment opportunity.

My friend's fear is known as gephyrophobia -- the fear of bridges. My friend -- who has no fear of flying or other irrational worries -- is deathly afraid of driving across any bridge because of the possibility it may collapse.

Before researching this article, I was under the impression that bridges never collapse. Boy, was I wrong! According to Barry LePatner, author of "Too Big To Fall," there have been 600 bridge failures in the United States since 1989.

	Kevin Rofidal via Wikipedia Commons
	The I-35W Mississippi River bridge after its collapse on Aug! . 1, 2007.

There are about 18,000 "fracture-critical" bridges -- those with characteristics that make them especially susceptible to collapse -- in the U.S. that were built between the 1950s and the late '70s as part of the interstate highway system. In addition, there are more than 66,000 structurally deficient bridges and nearly 85,000 functionally obsolete bridges in the U.S. and Puerto Rico.

These numbers not only told me that my friend's fear has some basis in fact, they alerted me to the sorry state of the infrastructure of the United States. Infrastructure refers to bridges, roads, and other physical structures required for the smooth functioning of society. Consulting group McKinsey Global Institute estimates that the United States has a 1% shortfall in infrastructure spending compared with its GDP.



One percent may not sound like much, but it works out to $160 billion per year. McKinsey estimated the cost of a five-year project to rebuild U.S. infrastructure at about $1 trillion.

President Barack Obama has a plan to deal with the U.S. infrastructure problem. This plan consists of a set of proposals to generate money for the massive construction projects by using tax breaks and loans to stimulate private investment.

While we are still a long way from addressing all the infrastructure issues, Obama has made some progress. The most recent annual infrastructure report card from the American Society of Civil Engineers recently upgraded U.S. infrastructure from a D to a D-plus. The organization gave credit to Obama's plan to increase private investment for the improvement.

One of the smartest ways in which investors can profit from the rebuilding of America is with infrastructure mutual funds. The most important thing to know is that although these funds are increasing their assets, they haven't caught on yet ! with the ! investing public.

According to Morningstar, the 12 mutual funds with infrastructure as their focus have attracted just over $1 billion this year through April 30. Compared this amount with just under $750 million in all of 2012 and over $365 million in 2011, you can clearly see the dramatic capital inflow increase.

It's just not the United States that needs infrastructure improvement. My favorite investment in the infrastructure arena is the DWS RREEF Global Infrastructure Fund (Nasdaq: TOLSX). This fund requires a minimum investment of $2,500 and ranks as low risk, high return relative to its category. As you can see from this Morningstar chart, TOLSX has outperformed the benchmarks since 2009.



The fund boasts over $2 billion in assets invested in about 43% U.S. based infrastructure stocks and around 55% in non U.S. based infrastructure stocks. I like this mix as the fund stands to continue to benefit from the Obama-sparked infrastructure improvement projects in the U.S., while internationally hedged against potential U.S. political and economic issues. The fund's top holdings:



TOLSX has returned over 7% this year. Its best quarter to date was a stellar 17%-plus return during the third quarter of 2010.

Risks to Consider: This fund is considered low-risk, so the primary risk factor is stock market fluctuations. In addition, concentration in the infrastructure sector may cause losses due to global economic slowdowns and political risks. The fund also has a turnover rate of more than 170%. This active trading poses the risk of higher fees and costs passed along to the investor.

Action to Take --> As you can see on the chart, the price has fallen into my value buy zone. I like this fund right now with a 12-month price target of $15.

America's Big Banks Are Begging for the Next Financial Crisis

Our Too-Big-To-Fail banks are at it again...

The Volcker Rule is supposed to ban the banks from making hazardous and speculative trades.

But the big banks are begging for the chance to make the same kind of moves that got us into the 2008 global credit crisis, one of the worst in the modern world.

It's like they never learned their lesson...

They're even enlisting congressional cronies to do their bidding.

One way or another TBTF banks are going to find a way to speculate us all into another crisis...

Here's everything you need to know...

Big Banks Are Trading for Trillions... At Our Expense

The truth is the banks have been fighting the Volcker Rule since it was first floated.

The Rule, named after legendary former U.S. Federal Reserve chairman of the 1980s, Paul A. Volcker, goes into effect in 2015 and has lots of moving pieces.

For instance, it says banks can't have ownership stakes in hedge funds or private equity shops and can't gamble in the markets like they did in their good-old "Trading for Trillions" days.

Collateralized loan obligations (CLOs) are one of the "instruments" or "products" banks still want to trade.

The Volcker Rule says they can trade the simplest version of CLOs, those that have commercial loans in them.

But they're not allowed to trade CLOs that contain bonds, or equity, or other assets papered around CLO packages.

Not that there's anything simple about collateralized loan obligations.

They're complex from the get-go. And some varieties are a lot more complex and dangerous than others, though to the naked eye they look pretty much the same.

What the banks are bitching about is how they'll be restricted in their ability to trade the CLOs they want to own. Did you catch that?

That's right: They want to "trade" these things. That's important.

A lot of the CLOs will be put together by hedge funds and private equity (PE) shops. And that's one of the big problems: Hedge fund and PE products are supposed to be off limits.

What are collateralized loan obligations anyway? Here's what they are - and why they're so outrageous.

For the most part, the ones being targeted are made up of leveraged loans. Hedge funds and private equity shops and banks make loans to commercial companies that already have above (their industry) average debt on their balance sheets, hence they are said to be "leveraged." The issuers of these loans to leveraged companies call the loans "leveraged loans." Makes sense, right?

But because leveraged loans are made to leveraged companies there may not be any buyers willing to purchase them from the original issuers, who have no intention of keeping these loans on their own books.

So, to sell them, issuers and other product factories lump a bunch of these leveraged loans into a pool.

Yes, like a giant mortgage-backed pool. And since these are leveraged loans made to leveraged companies they're a tad bit closer to those infamous subprime mortgage-backed securities.

Just because you pool a bunch of leveraged loans into a package, doesn't mean they are less leveraged, higher rated, and more desirable. That is until you add the magic elixir called collateralization, sometimes referred to as structuring.

This trick works the same way it worked for subprime mortgage pools.

The pools are sliced and diced into "traunches" that are sub-pools. These sub-pools are assigned certain rights over other sub-pools in the big pool. They may get more interest payments directed to them. They may have more collateral backing their portion of the pool. The end result is that each of the traunches have different risk and payment structures and different ratings.

And like magic the total pool becomes a series of sub-pools that will fit the bill of the investors they are structured to attract. They get sold off and everyone is happy.

The banks are crying that these products are loans, and banks are supposed to be in the loan business. They want to own these loan products even if they were originated by hedge funds or private equity shops.

It usually gets lost in translation, but I'm here to remind you. The original loans are made to leveraged companies because they are usually part of a leveraged buyout deal.

That's right, leveraged companies need more money because their LBO owners (leveraged buyout owners) want to leverage them up more to pay themselves the fees they extract for taking them private in the first place.

Or, they leverage them up to pay themselves dividends with the money they borrow from the PE shops and hedge funds who only lend it to them temporarily. No wonder they want to package them up and get them off their books.

Enter the banks. They like the yield on these loans. They want to buy them. The big banks own most of these CLOs. And they want to be able to sell them, like they can do with their other loans. If they can buy these CLOs and sell these CLOs, they are trading them, because buying and selling amounts to trading. They want to be able to trade them.

The big banks that want to play in this sandbox are enlisting their congressional cronies to do their bidding.

Top Defensive Companies To Buy Right Now

Andy Barr, a House Republican from Kentucky, introduced a bill recently to allow banks the latitude they demand. He was speaking on behalf of the "small banks" in his state that would have to let go employees if this seal-clubbing was allowed to continue.

It doesn't matter that small banks don't trade this stuff and the handful that buy them certainly don't have trading desks to trade them. But the big boys do.

That's why House Financial Services Committee Chairman Jeb Hensarling, a Texas republican, said the Volcker Rule is a job destroyer.

Oh, the humanity!

If big banks think these are good loans to hold, why don't they just originate them themselves and keep them on their books? Why do they want to trade them?

Maybe because if they can trade them, they can hedge them. If the big banks can hedge them, they can over-hedge or under-hedge or cross-hedge, all of which means they want to use their hedging operations to engage in their favorite game... speculative trading.

BTW: If you want the chance to make some real money on situations like these... and you don't mind going against the grain... and making Wall Street's blood boil... I'd like to show you how to do it. You'll be surprised how easy it is.

Consumer Sentiment Rises More Than Forecast in April

Al Behrman/AP NEW YORK -- U.S. consumer sentiment rose in April to a nine-month high as views on current and near-term conditions surged, a survey released Friday showed. The Thomson Reuters/University of Michigan's final April reading on the overall index of consumer sentiment came in at 84.1, beating an expectation of 83 in a Reuters survey and up from 80 the month before. The preliminary April reading was 82.6. The headline number was the highest reading since July 2013. "Perhaps the more important question is whether consumer confidence will show greater resistance to the backslides that have repeatedly occurred in the past few years," survey director Richard Curtin said in a statement. "Resilience is dependent on positive long term economic expectations. While near term expectations have improved substantially, longer term expectations for personal finances as well as the overall economy have not improved as much." The survey's barometer of current economic conditions rose to 98.7, its highest reading since July 2007, from 95.7 in March and above a forecast of 97.2. The preliminary reading came in at 97.1. The survey's gauge of consumer expectations rose to 74.7 in April from 70 in March and above an expected 73.7. It also beat the preliminary reading for this month which was 73.3. The survey's one-year inflation expectation was unchanged from the March reading at 3.2 percent and a tick above the 3.1 percent in the preliminary April reading. The survey's five-to-10-year inflation outlook was also unchanged from last month at 2.9 percent after edging up to 3 in the preliminary report.

Client outreach underway as government closes

By Liz Skinner

The shutdown outreach has begun.

Many financial planners are reaching out to clients with this advice: Don't worry about the impact that the government shutdown will have on investment portfolios, as long as the president and Congress resolve it in a few days.

“A government shutdown sounds like a scary thing, but we're telling clients that if it's resolved in a week, then it's a non-issue,” said Gerard Klingman, president of Klingman & Associates LLC, who has been e-mailing clients over the past few days as it became clear that a last-minute solution to keep the federal government open in the new fiscal year wasn't coming.

He's pointing out to clients that while a shutdown has occurred in the past, “if it drags on for more than a week, then markets will really react negatively.”

The Dow Jones Industrial Average was up about 0.4% on Tuesday afternoon.

Mr. Klingman said clients across the political spectrum are “exasperated with Washington” and that the longer the shutdown goes on, the worse it will be for consumer and business confidence.

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Before the current closure, the government shut down in 1995 from Nov. 14 to Nov. 19 and from Dec. 16 to Jan. 6, 1996, as Republicans led by then-House Speaker Newt Gingrich clashed with President Bill Clinton's administration.

“Most people anticipate that it will not last real long, that someone will come to their senses and do whatever back-office deal that needs to be done,” said Norman Berk, founder of Berk Cleveland Rathmell Wealth Strategies LLC. “But if the fight over Obamacare becomes part of the debt ceiling debate and they don't raise the debt ceiling, there is a potential to be cataclysmic.”

The deadline for raising the debt ceiling is Oct. 17. Experts agree that defaulting on the country's debt would be more damaging to the economy than a short government shutdown.

But even a government shutdown of a few days has some impact on investor confidence and potentially the economy, Mr. Berk said.

“If you were about to buy a house or a car, would you? I wouldn't,” he ! said.

In a mass e-mail to clients and other firm contacts late Monday night, Mr. Berk said: “The direct immediate impact to most of us will be limited. If the shutdown continues for a longer period — the shutdown in 1995-96 lasted 21 days — the impact will get progressively worse as the toll of not having government workers working will permeate through the economy.”

The e-mail also tried to explain the use of continuing resolutions and laid out which government spending is immediately curtailed.

Most advisers agree that this event is important enough to demand communication with clients.

“Anything like this and you have to be in communication with clients, even if you don't know the end result,” Mr. Klingman said.

6 Semiconductor Stocks to Buy Now

Popular Posts: 7 Biotechnology Stocks to Buy Now10 Best “Strong Buy” Stocks — UA POWR QIHU and more10 Oil and Gas Stocks to Buy Now Recent Posts: 3 Packaged Foods Stocks to Buy Now 6 Semiconductor Stocks to Buy Now 4 Specialty Retail Stocks to Buy Now View All Posts

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

FSI International () is progressing from last week’s rating of B (“buy”) as the company improves to an A (“strong buy”) this week. FSI International is a supplier of processing equipment used at key production steps to manufacture microelectronics, including semiconductor devices and thin film heads. In Portfolio Grader’s specific subcategories of Earnings Growth, Earnings Momentum and Sales Growth, FSII also gets A’s. .

NeoPhotonics Corporation () ups its rating to a B (“buy”) this week after earning a C (“hold”) in the week before. NeoPhotonics designs, manufacturers, and markets standard and semi custom planar light wave circuits for metro access and other advanced optical communications platforms. .

TriQuint Semiconductor, Inc.’s () ratings are looking better this week, moving up to an A from last week’s B. TriQuint Semiconductor supplies communications companies with modules, components and foundry services. .

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Skyworks Solutions, Inc. () gets a higher grade this week, advancing from a C last week to a B. Skyworks Solutions is an innovator of analog and mixed-signal semiconductors. Shares of the stock have been trading at an exceptionally rapid pace, up twofold from the week prior. .

The rating of AIXTRON SE Sponsored ADR () moves up this week, rising from a C to a B. Aixtron provides deposition equipment, such as that used in lighting, fiber optic communication systems, and mobile telephone applications, to the semiconductor industry. .

This week, JA Solar Holdings Co., Ltd. Sponsored ADR’s () ratings are up from a C last week to a B. JA Solar Holdings is engaged in the design, manufacture, and marketing of high-performance solar cells, which are made from specially processed silicon wafers. The stock’s price of $10.97 is above the 50-day moving average of $10.46. .

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

Morning Market Losers

Related MDSO Mid-Morning Market Update: Markets Gain; McDonald's Posts Lower Profit Top 4 NASDAQ Stocks In The Healthcare Information Services Industry With The Highest ROA Related ARTX Benzinga's Top #PreMarket Losers Benzinga's Top #PreMarket Gainers

Medidata Solutions (NASDAQ: MDSO) shares slipped 17.91% to $43.25 after the company reported downbeat quarterly results.

Arotech (NASDAQ: ARTX) shares declined 10.98% to $3.97 after falling 1.55% on Monday.

Bebe Stores (NASDAQ: BEBE) shares declined 10.40% to $5.77 after the company reported a 5.7% drop in its Q3 same-store sales and issued a downbeat Q3 outlook.

Lexmark International (NYSE: LXK) shares dipped 9.86% to $42.16 after the company reported Q1 adjusted earnings of $0.92 per share on revenue of $877.70 million.

Rambus (NASDAQ: RMBS) declined 6.50% to $11.50 after the company reported Q1 earnings of $0.17 per share on revenue of $78.30 million. Rambus also expected Q2 sales of $69.0 million to $74.0 million, versus analysts' estimates of $74.50 million.

Koninklijke Philips NV (NYSE: PHG) fell 5.98% to $32.52 after the company reported a drop in its Q1 profit.

Xerox (NYSE: XRX) dropped 2.96% to $11.13 after the company reported its Q1 earnings of $0.27 per share on revenue of $5.12 billion and lowered its FY14 earnings outlook.

Posted-In: market losersNews Movers & Shakers Intraday Update Markets

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

  Most Popular Earnings Expectations For The Week Of April 21: Apple, Facebook, GM And More A Look At 2014's Leading Cannabis Stocks Sears And Others Insiders Have Been Buying Watching Tech, Alibaba IPO, With Ironfire's Eric Jackson Earnings Scheduled For April 22, 2014 Wells Fargo Securities Sees Mixed Factors for Apple Related Articles (ARTX + BEBE) Morning Market Losers Lululemon Athletica (LULU) Falls: Stock Goes Down 5.1% - Tale of the Tape Benzinga's Top #PreMarket Losers Updated Research Report on A&F - Analyst Blog Updated Research Report on American Eagle - Analyst Blog Stock Market News for April 15, 2014 - Market News Around the Web, We're Loving... Noble Energy to Promote COO Stover to CEO as Davidson Retires

Report: Pfizer Inc. Attempted to Buy AstraZeneca plc (PFE, AZN)

According to an article on Bloomberg on Sunday evening, pharma giant Pfizer (PFE) was recently in talks to purchase London-based biopharmaceutical company AstraZeneca (AZN). The negotiations have since ended, and the companies are no longer discussing the purchase.

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Bloomberg referenced two people familiar with the matter, regarding details of the discussions, and these two people also insist that the talks happened months ago, and that the deal is no longer active. The news was originally reported by the Sunday Times in London, which claimed that Pfizer had offered $101 billion for AZN. Neither Pfizer or AstraZeneca has confirmed any of the report.

For more on pharmaceutical companies, check out How Much Dividend-Paying Drug Makers Spend on Research and Development.

Pfizer stock was up 45 cents, or 1.49%, in pre-market trading. YTD, the stock is down 0.69%.

AZN stock was up $3.35, or 5.28%, in pre-market trading. YTD, the stock is down 8.4%.

Retirement savings for the median man — or woman

Let's say you're an average person. OK, actually, we'll say you're a median person. You live in the middle of the country, and you drive only on the median strip.

More importantl, half the people in the nation earn more than you do; half earn less. That's just how it's been all your life. Last year, you earned $51,071 before taxes. You're 60 now, and you've earned the median income since you started working in 1975 – which, conveniently, is when the Census Bureau's data series begins. How much do you need to retire, and what percentage of your income do you need to have saved to get there?

As you can imagine, it's not an easy question, and any hypothetical example will be holier than a Swiss cheese sandwich at a sandwich shop in Lourdes. But the example — and the problems with it — show how difficult it can be to save for retirement, and what some of those difficulties are.

Let's construct a scenario for our median earner. He started work at age 22 after college, and pulled down the median wage in 1975, which was $11,800. Adjusted for inflation, that's the equivalent of $45,788 in 2012 dollars. But we don't care about no stinkin' inflation-adjusted dollars. He earned $11,800, and being a prudent young person, decided that he would save 5% of his salary every year for retirement. In his first year, he saved $590.

Each year, in a happy coincidence that could only happen in the land of hypothesis, he earned the median income in the nation. In 1990, the median was $29,943, so he put aside $1,497. In 2012, he socked away $2,551.

How is our median person doing? Assuming he invested in a blend of large-company stocks (60%) and government bonds (40%), a middle-of-the-road asset allocation, he would have earned an average 11.3% annually, according to Ibbotson Associates. At that rate, he would have had $600,488 in his retirement savings at age 60. Not bad.

Our median man (or woman, we're flexible) still has five more years left until retirement age. Assuming his income r! ises at the same rate as the past 10 years (1.75%), he saves the same amount (5%) and earns the same amount (11.3%), he'd have $1,044,279.

If he were to invest that in an immediate annuity now, the company would guarantee him and his spouse an income of $4,778 a month. That's $57,336 a year. But annuities have two drawbacks. If they both get eaten by hippos in a freak zoo accident at age 66, the insurance company keeps all their money; and their payment remains the same over time, meaning that inflation will erode the value of their income.

For that reason, most financial planners recommend you start with a 5% withdrawal from your retirement account, and adjust that annually for inflation. Using the 5% rule, our median man would still be able to duplicate his final income, and give himself an inflation bump each year.

By saving 5% a year all his working life, a person earning the median wage could retire with an income close to his final salary. What could go wrong?

Plenty. Let's start with a few of the obvious things.

• Young poverty. Most people don't earn the median wage just out of college. They earn some pathetic wage, hoping to earn more later. In all likelihood, our median man would have earned much less than the median wage in the first five years of his working life, and saved much less. That would have been extremely unfortunate. If he didn't start saving until 1980, his retirement kitty would be $765,699, instead of more than $1 million. Thanks to compounding, those small amounts stashed away early became a significant part of our median man's savings.

• Big bull markets. You probably did a double-take at the 11.3% average annual return since 1975. But both stocks and bonds have earned exceptional returns in the past three decades, despite at least three soul-shattering bear markets in 1980, 2000 and 2007. Whether a mix of stocks and bonds will return the same going forward is debatable, at best.

• Experience. A young person investing in s! tocks and! bonds in 1975 would have been unusual, to say the least. The stock market fell 45% from 1927 to 1973, and bonds had lost money for three decades, thanks to rising interest rates. "My first year in the financial business was in 1973," says Mark Bass, a financial planner in Lubbock, Texas. "At the end of 1974, I was thinking, 'What have I done with my life?' "

Other problems: Retirement accounts we take for granted, such as IRAs and 401(k)s, weren't widely available in 1975. (The average worker still doesn't have a 401(k) available). Our median man didn't experience any extended periods of unemployment or sickness that would have kept him from saving. He invested regularly in the same mix of stocks and bonds, without chasing bubbles in housing, technology or baseball cards. That's a lot harder than it seems.

For people just starting out now, our median man does provide some good lessons.

• Save more and assume you'll earn less. If our median man had earned an average 5%, he'd be staring at a $208,000 retirement balance at age 65. It's better to assume you'll earn less — say, 7% in a mix of stocks and bonds over the long term — and save more. You can control how much you save. You can't control what the stock and bond markets will give you.

• Make use of your 401(k) plan, particularly if it has a company match, and especially if you're young.

• Don't dismiss Social Security. The average payout is $1,269 a month, and it's adjusted for inflation each year. It's brutal trying to live on Social Security alone. But it's a lifesaver if you've ever had a hiccup in your retirement savings.

One final note: Probably the kindest thing a parent can do for a child is to make a Roth IRA contribution for a child in the earliest days of her working years, says Bass. By the time our median man was retirement age, his first five years' worth of savings had grown to 25% of his retirement savings.

McClendon Seeks a Cool Billion to Build New Energy Giant

Less than a month after "retiring" as CEO of Chesapeake Energy (NYSE: CHK  ) , Aubrey McClendon decided it was time to get back to work. In going back to what he knows best, McClendon has come to the point in the process where his new venture, American Energy Partners, is lacking one important ingredient: money. That's why it's not at all surprising that Aubrey McClendon is searching high and low for that one critical component.

According to reports, McClendon is targeting a billion dollars in capital from private equity groups and sovereign wealth funds. McClendon would use this capital to fund his plans to build American Energy Partners into a best in class exploration and production company. It's not yet known how much capital he has been able to secure, if any.

As an investor, this is an interesting story to watch as there are many lessons to be learned from studying the past. Many Chesapeake investors loathe McClendon because his lavish pay packages and aggressive approach burned them. However, he did build the company into the second-largest natural gas producer in the country trailing only ExxonMobil (NYSE: XOM  ) . In the process, he amassed vast tracks of land and data that are just waiting to be unlocked. If gas prices hadn't plunged then McClendon might be known as an energy visionary, instead his imaged has been forever tarnished.

Top Promising Stocks To Own Right Now

There is a valuable lesson to be learned here for investors. Sometimes you can have the right idea, but just the wrong approach. In the case of Chesapeake, and other industry peers, the idea of growing energy production was a noble one, but the aggressive approach taken turned to be the wrong way to go about it. The growth in gas production fueled a growing bubble which when burst incinerated investor's portfolios and tarnished the reputations of some very smart men. 

That same tarnish can also be found on SandRidge Energy  (NYSE: SD  ) CEO Tom Ward, also a co-founder of Chesapeake with McClendon. Ward followed the same Chesapeake blueprint when he took over SandRidge which, unfortunately, didn't work there either. It's entirely possible that Ward will soon experience the same fate as McClendon – his board has until the end of this month to determine whether he remains its CEO.

Source: SandRidge Energy

While the plunge in natural gas prices crushed the stocks of both SandRidge and Chesapeake, it didn't have to be that way. Both were aggressive growers and used too much debt while not having the diversity to withstand the collapse of natural gas prices. Compare this to ExxonMobil on the other hand, which has withstood the test of time as it's been a very conservative allocator of capital while taking a more balanced approach. Not only is the energy giant the largest natural gas producer in the country, but it produces oil around the world which is complimented by strong chemical and refining businesses. That diversity comes in handy when commodity prices dip.

Neither Chesapeake nor SandRidge need to be as diversified as Exxon to be successful. The key though is having the financial flexibility to withstand plunging prices and that's where SandRidge has a bit of an advantage over Chesapeake. The company's capital plans are funded through 2015, while Chesapeake is looking to unload a couple billion dollars in assets just to fund the gap in this year's capital spending plan. Neither company has yet to embrace the idea of living within cash flow so this will always be an area to watch as an investor. Both are now taking a more balanced approach that includes both liquids and a solid balance sheet and should lead to less volatility for investors. 

Today, both companies are working diligently to remove some of the tarnish of past mistakes. That's also where we find Aubrey McClendon these days as he starts over. Few investors give him credit for leading Chesapeake to more than 1,400% gains in his 20 years at the helm of the company in the public markets; instead, we just see the 70% drop from its peak. Maybe history will remember him more fondly as he embarks on his new venture. 

As an investor, you can't invest alongside McClendon in his newest venture just yet; however, his legacy still remains very much in tact at Chesapeake Energy. While its debt issues still persist, giant steps have been taken to help mitigate the problems and the company is trading at a very compelling value. To learn more about Chesapeake and its enormous potential, you're invited to check out The Motley Fool's brand-new premium report on the company. Simply click here now to access your copy.

Best Paper Companies For 2014

Best Paper Companies For 2014: Resolute Forest Products Inc (RFP)

Resolute Forest Products Inc., AbitibiBowater Inc., is a global forest products company. The Company's products include newsprint, commercial printing papers, market pulp and wood products. The Company owns or operates pulp and paper mills and wood products facilities in the United States, Canada and South Korea. On November 7, 2011, it began doing business as Resolute Forest Products. As of December 31, 2011, it owned or operated 18 pulp and paper mills and 23 wood products facilities in the United States, Canada and South Korea. The Company's segments include newsprint, coated papers, specialty papers, market pulp and wood products. On January 14, 2011, it acquired the noncontrolling interest in Augusta Newsprint Company (ANC). In April 2012, the Company held approximately 48.8% of the outstanding shares of Fibrek Inc. In December 2012, the Company purchased Bowater Mersey Paper Company Limited. oklyn Power Corporation. Advisors' Opinion:

• [By George Putnam]

  Resolute Forest Products (RFP), formerly known as AbitibiBowater, entered into bankruptcy in early 2009, weighed down by roughly $6 billion in debt.

• [By Saibus Research]

  Consolidation has been incremental in the paper and forest products industry. In May 2012, Resolute Forest Products (RFP) (formerly AbitibiBowater) announced that it had acquired 50.1% of Fibrek and acquired the remaining 49.9% in August. 2011 saw International Paper (IP) announce a hostile takeover of Temple-Inland and after offering $32/share in cash as well as the assumption of $600M of TIN's debt, IP was able to close the deal in February 2012. 2011 also saw Rock-Tenn (RKT) acquire Smurfit-Stone to create the number two player in the linerboard segment with 20% market share, trailing only International Paper's 40%. We see these moves as a prudent step to consolidation i! n the industry as certain types of paper such as newsprint and uncoated free sheet (office paper) are seeing falling demand due to increased use of digital resources.

• [By Seth Jayson]

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

• [By Seth Jayson]

  There's no foolproof way to know the future for Resolute Forest Products (NYSE: RFP  ) or any other company. However, certain clues may help you see potential stumbles before they happen -- and before your stock craters as a result.

source from Top Stocks Blog:http://www.topstocksblog.com/best-paper-companies-for-2014.html

Benefit from the Housing Resurgence with These Stocks

Home Depot (HD) and Lowe's (LOW) are good stocks for those who want to invest in home-improvement companies. So, investors should keep a close watch on the recovery of the housing market if they wish to benefit from these two companies.

According to Home Improvement Research Institute, the housing market surged to six-year highs last November, growing 22.7% year over year. In addition, sales of existing homes also increased over 10% as compared to last year. This was almost in line with HIRI's projection of 20% growth in housing and 9.8% increase in existing home sales for 2013. Looking forward, these numbers are expected to be around 30% and 9.3%, respectively, for 2014.

Let us see in detail what the prospects are for these firms and how will they will benefit investors.

Taking a Close Look

Home Depot is the largest American retailer for home improvement and construction products and services. Its recent results were better than consensus estimates. This was mainly driven by a rebound in the seasonal categories due to the recovering housing market in the U.S. Revenue increased on account of strong growth in comps, with an increase in earnings over last year.

A similar trend was seen for Lowe's, which reported significant growth. Backed by a solid performance across all its products, Lowe's earnings beat the estimates. Its gross profit increased 11.6% year over year. This resulted in an increase in earnings that were ahead of analysts' expectations.

In accordance with the projections from HIRI, Fitch has also predicted higher spending on home improvement in 2014. According to the National Association of Home Builders, housing market activity in 52 of approximately 350 metro areas in the U.S. has returned to or exceeded pre-recessionary levels.

All these facts indicate that the housing market is expected to grow in the future and this is a big opportunity for companies like Home Depot, Lowe's and Lumber Liquidators. Home Depot is the largest of the three in terms of store count, and it is concentrating less on expanding store count but improving store efficiency with the help of technology.

Road Ahead

To increase its presence in California market, Lowe's has acquired Orchard Supply Hardware, which is offering stiff competition to Home Depot. This will add 72 more stores to its existing fleet.

Looking forward, both companies would benefit from the booming housing industry. Home Depot, being the largest, has an edge and is better positioned to maximize its gains from the opportunity. Home Depot is working hard to attract as many customers during the holiday season. Keeping this in mind, it recently launched a mobile app for customers which will make shopping easier. Also, it is enhancing its website to make its online operations even better.

In addition, it is launching new products such as the Nest Protect smoke detector, a carbon monoxide detector, the Cree True White bulb, and many other products. It is also improvising its products to attract more customers.

Talking about Lumber Liquidators (LL), it caters to the hardwood flooring market. Currently at a P/E ratio of 30, it is very expensive as compared to both Lowe's and Home Depot. Home Depot has a P/E ratio of 20 while Lowe's is slightly more expensive at 22 times earnings. It will be better on the part of investors to look for either Home Depot or Lowe's, as they are comparably cheaper.

Making a Choice

Among all three, Home Depot looks the best in class. It is the cheapest and has a strong market position along with a wide store network. Looking at all these factors Home Depot looks to be a better investment option.

Home Depot (HD) and Lowe's (LOW) are good stocks for those who want to invest in home-improvement companies. So, investors should keep a close watch on the recovery of housing market if they wish to benefit from these two companies.

According to Home Improvement Research Institute, the housing market surged to six year highs last November, growing 22.7% year over year. In addition, sales of existing homes also increased over 10% as compared to last year. This was almost in line with HIRI's projection of 20% growth in housing and 9.8% increase in existing home sales for 2013. Looking forward, these numbers are expected to be around 30% and 9.3%, respectively, for 2014.

Let us see in detail what the prospects are for these firms and how will they will benefit investors.

Taking a Close Look

Home Depot is the largest American retailer for home improvement and construction products and services. Its recent results were better than consensus estimates. This was mainly driven by a rebound in the seasonal categories due to the recovering housing market in the U.S. Revenue increased on account of strong growth in comps, with an increase in earnings over last year

A similar trend was seen for both Lowe's, which reported significant growth. Backed by a solid performance across all its products, Lowe's earnings beat the estimates. Its gross profit increased 11.6% year over year. This resulted in an increase in earnings that were ahead of analysts' expectations.

In accordance with the projections from HIRI, Fitch has also predicted higher spending on home improvement in 2014. According to the National Association of Home Builders, housing market activity in 52 of approximately 350 metro areas in the U.S. has returned to or exceeded pre-recessionary levels.

All these facts indicate that the housing market is expected to grow in the future and this is a big opportunity for companies like Home Depot, Lowe's and Lumber Liquidators. Home Depot, is the largest of the three in terms of store count, and it is concentrating less on expanding store count but improving store efficiency with the help of technology.

Road Ahead

To increase its presence in California market, Lowe's has acquired Orchard Supply Hardware, which is offering stiff competition to Home Depot. This will add 72 more stores to its existing fleet.

Looking forward, both companies would benefit from the booming housing industry. Home Depot, being the largest, has an edge and is better positioned to maximize its gains from the opportunity. Home Depot is working hard to attract as many customers during the holiday season. Keeping this in mind, it recently launched a mobile app for customers which will make shopping easier. Also, it is enhancing its website to make its online operations even better.

In addition, it is launching new products such as the Nest Protect smoke detector, a carbon monoxide detector, the Cree True White bulb, and many other products. It is also improvising its products to attract more customers.

Talking about Lumber Liquidators, it caters to the hardwood flooring market. Currently at a P/E ratio of 30, it is very expensive as compared to both Lowe's and Home Depot. Home Depot has a P/E ratio of 20 while Lowe's is slightly more expensive at 22 times earnings. It will be better on the part of investors to look for either Home Depot or Lowe's, as they are comparably cheaper.

Making a Choice

Among all three, Home Depot looks the best in class. It is the cheapest and has a strong market position along with a wide store network. Looking at all these factors Home Depot looks to be a better investment option.

Currently 0.00/512345 Rating: 0.0/5 (0 votes)

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A Successful Stock Gurus Have Ignored

Hot Casino Stocks To Own Right Now

The natural upside to any midstream operation is the strong cash flow, a resource which if well used can help finance an important capital investment. Most importantly, the assets built can then be sold to oil and gas producers in order to reward those who trusted management with initial investments. That's it. There is not much of a secret behind midstream oil and gas companies. Hence, from this analyst's point of view, the key element to success is quality leadership. Such a characteristic allows the business model to identify market trends, and transform synergies into real growth. Magellan Midstream (MMP) may just be the case that exemplifies the argument. However, gurus have not been too enthusiastic about the stock and trading volumes remain low. Let us see why, and if you should take a position.

Rolling Down the River

Last February, Magellan Midstream presented the full year report for 2013. In it one can find the overall improvement achieved during the year. Performance indicators for refined products and crude oil pipeline shipments, net income, total assets and cash distributions have all seen improvements. However, average utilization of crude oil and marine terminals have both experienced a small decline. Nonetheless, the report highlights the record performance achieved during the past year and resulting consolidated financial strength.

Magellan Midstream has also been given approval by financial institutions. Fourteen institutions have reported on the stock throughout the year's first quarter, and only one downgraded the stock from "Buy" to "Neutral." Out of the remaining 13, seven have gave the stock a "Buy" rating, while four gave it a "Neutralm" while the remaining three boosted the target price, resulting in a consensus "Buy" rating and $75.54 consensus price target. Additionally, the company owns the longest refined petroleum products pipeline system in the country, with a storage capacity of more than 90 million barrels of petroleum products.

Two recent announcements fuel growth prospects for Magellan Midstream: first, reopening of the open season to solicit capacity commitments from shippers to transport refined petroleum products to Little Rock, Ark. Up to 75,000 barrels per day of gasoline, diesel fuel and jet fuel are expected to flow through the pipeline. The second is the construction of a 50,000 barrel a day plant by the second half of 2016 to process ultra-light oil into fuels at Corpus Christi.

Some Things to Keep in Mind

Throughout the last five years, Magellan Midstream has achieved what many industry peers can only dream of: steady growth. Revenues and net income increments secured the model a wide operating margin. True, debt level has risen to questionable levels, and has the potential to affect the business by substantially increasing indebtedness and liabilities levels. The risk associated with such development is the inability to integrate the new operations effectively and dilution of limited partner shareholders.

Magellan Midstream's growth prospects are based primarily on an attractive portfolio of energy infrastructure assets that generate stable and recurring fee and tariff-based revenues. The company is expanding capacity through the upgrade of current assets and construction of new ones. And although acquisitions have and will continue to be the main growth driver in the business model, partnerships are common too. Most important, credit ratings provide a competitive advantage in accessing capital at a reasonable cost, and long-term investors were rewarded through a consistent distribution growth.

Currently trading at 28.6 times its trailing earnings, Magellan Midstream carries a 28% discount to the industry average. However, net income growth and revenue growth through the last three years is below the industry average, a phenomenon deeply related with integration costs of acquisitions. Hence, it is recommended to follow Chuck Royce (Trades, Portfolio)'s long-term approach to the stock, after integration is complete.

Disclosure: Vanina Egea holds no position in any of the mentioned stocks.

About the author:Vanina EgeaA fundamental analyst at Lone Tree Analytics

Visit Vanina Egea's Website

Currently 5.00/512345 Rating: 5.0/5 (1 vote)

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Family Dollar Stores, Inc. (FDO) Q2 Earnings Preview: Put Down, But Guidance Up?

Family Dollar Stores, Inc. (NYSE:FDO) will host a conference call for investors and analysts at 10:00 a.m. EST on Thursday, April 10, 2014 to discuss financial results for the second quarter ended March 1, 2014. The Company will also discuss various business initiatives and expectations for fiscal 2014. After some prepared remarks by management, participants will have an opportunity to ask questions.

Wall Street anticipates that the discount retailer will earn $0.90 per share for the quarter, which is $0.31 less than last year's profit of $1.21 per share. iStock expects FDO  to hit Wall Street's consensus number. The iEstimate is $0.90, too.

[Related -Five Below Inc (FIVE): The Greatest Discount Retailer I Have Ever Seen]

Sales, like earnings, are expected to dip, slipping 4.2% year-over-year (YoY). Family Dollar Stores' consensus revenue estimate for Q2 is $2.77 billion, lower than last year's $2.89 billion.

Family Dollar Stores operates a chain of self-service retail discount stores primarily for low- and middle-income consumers in the United States. As of April 2, 2014, it operated approximately 8,100 stores in 46 states.

Intriguingly, unusually large put volume moved its way through the options pits on Tuesday. Specifically, 10,816 April $62.50 put options traded. Some investor(s) is betting big (roughly $4,500,000) on FDO.  We get the sense that the trade is a hedge against an open position in the stock, which means whoever might be worried about the stock taking a hit. However, it just speculation on our part.

[Related -Wal-Mart's woes highlight retail sector weakness]

The put player might have a point as FDO shares dropped eight of the last 13 quarterly checkups. The stock's price was chopped an average of -5.05% with a range of -0.03% to -11.54%.  For the most part, earnings misses and on-target results equaled bearish EPS price-sensitivity seven of the nine misses/on-target announcements.

On the flip side, the handful of green reactions in the last 13 quarters averaged a gain of 3.71% with a max run of 9.41% and minimum of 0.22%.

Wall Street gurus aren't so positive on the stock either.  The consensus estimate started the quarter at a buck twelve. Since, it's dropped to $0.90 with a half-dozen analysts lowering their estimates in the last 30 days.

While the put player and analysts are bearish, Google Trends for the keyword "Family Dollar" are mildly bullish in comparison. Search volume intensity (SVI) is flat YoY, which could mean sales and earnings come in slightly stronger than expected.  Also, SVI for the start of Q3 is up 17% and could be a major positive for forward guidance.

Overall: Family Dollar Stores, Inc. (NYSE:FDO) has a history of hugging Wall Street's consensus, like the iEstimate. Despite what looks like an options bet against FDO, Google Trends hint at a quarter that's got a chance to be a little better than expected, but not much. However, management's forward looking guidance could be positive, which could give the stock a boost; albeit, most likely a small one based on recent history.

Hot Integrated Utility Companies For 2015

Prescott Police Department The latest redesign of the U.S. $100 bill is set to enter circulation in October, and along with its sleeker look, the bill has new security features designed to thwart counterfeiters. For instance, some portions of the new $100 are printed in a color-shifting ink that would be extremely difficult for counterfeiters to duplicate: The Liberty Bell on the note will appear to shift from copper to green when the bill is tilted. These changes to the bill are part of an ongoing effort to help distinguish real currency from fake. "It is a constantly evolving process of putting more and more features on the bill to allow the common citizen to detect counterfeit," said Ed Lowery, a special agent with the Secret Service. Read More: Two Heads on Arizona Counterfeiter's Bill Most of the counterfeit notes that change hands now are computer-generated, and easily distinguishable from genuine U.S. currency under a bit of scrutiny. "The process utilized to manufacture genuine notes is so detailed that there are very few systems out there that can match that level of detail in the printing," Lowery said. People who hold both a real bill and a counterfeit bill in their hands should be able to notice a difference in texture between the two notes. From there, they can go on to look at other factors that would separate the two bills. Though technology has made counterfeiting easier, computer-generated notes are usually of low quality and are unlikely to pass muster with an informed merchant. Nevertheless, "most people don't realize that they have counterfeit [money] until they try to make a deposit at the bank or [spend it with] a merchant," said Joe DeSantis, an assistant special agent with the Secret Service. Bars and nightclubs are easy places to exchange counterfeit money since they aren't well lit, said Jason Kersten, an expert on counterfeiting and the author of "The Art of Making Money: The Story of a Master Counterfeiter." To combat this, many of these establishments check their bills under ultraviolet lights, which can help to detect phonies.

Hot Integrated Utility Companies For 2015: Ventas Inc. (VTR)

Ventas, Inc. is a publicly owned real estate investment trust. The firm engages in investment, management, financing, and leasing of properties in the healthcare industry. It invests in the real estate markets of the United States and Canada. The firm primarily invests in healthcare-related facilities including hospitals, skilled nursing facilities, senior housing facilities, medical office buildings, and other healthcare related facilities. Ventas, Inc. was founded in 1983 and is based in Chicago, Illinois with additional offices in Louisville, Kentucky and Dallas, Texas.

Advisors' Opinion:

• [By Dividends4Life]

  Ventas, Inc. (VTR) is a publicly owned real estate investment trust that engages in investment, management, financing, and leasing of properties in the healthcare industry. December 9th the company increased its quarterly dividend 8.25 to $0.725 per share. The dividend is payable December 31, 2013, to stockholders of record on December 16, 2013. The yield based on the new payout is 5.0%.

• [By Keith Speights]

  Debra Cafaro
  Debra Cafaro has served as CEO of large real estate investment trust�Ventas (NYSE: VTR  ) since 1999. Ventas stands as the leading seniors housing and health care REIT in the nation and sports a market cap of more than $20 billion. The company's total shareholder return over the last decade exceeds 835%.

Hot Integrated Utility Companies For 2015: Compass Diversified Holdings (CODI)

Compass Diversified Holdings is a public investment firm specializing in acquiring controlling stakes in small to middle market companies. The firm seeks to make middle market and buyout investments. It seeks to invest in industries such as manufacturing, distribution, consumer products, and business services. The firm prefers to invest in companies based in North America with a preferred transaction size between $60 million and $300 million in value, cash flows between $5 million and $40 million, with enterprise values between $50 million and $250 million, and a minimum EBITDA of $10 million. It seeks to acquire controlling ownership interests in its portfolio companies and can also make additional platform acquisitions. The firm makes investments through balance sheet. Compass Diversified Holdings was founded in 2005 and is based in Westport, Connecticut. Compass Diversified Holdings operates as a subsidiary of The Compass Group LLC.

Advisors' Opinion:

• [By Rick Munarriz]

  Compass Diversified Holdings (NYSE: CODI  ) owns several middle-market businesses. From printed circuit boards to gun safes -- from upholstered furniture to personal hydration products -- Compass lives up to the "Diversified" in its moniker.

• [By Rich Smith]

  Westport, Conn.-based Compass Diversified Holdings (NYSE: CODI  ) will soon have a new CFO.

  On Thursday, the diversified holding company of manufacturing, distribution, consumer products, and services businesses announced that current Chief Financial Officer James J. Bottiglieri intends to retire from the company on November 30, 2013. At that time, he will be replaced by newly promoted CFO Ryan J. Faulkingham (although Bottiglieri will remain on the Board of Directors).

• [By Eric Volkman]

  Compass Diversified Holdings (NYSE: CODI  ) is holding its dividend steady for its Q2. For the tenth quarter in a row, the company will pay a distribution of $0.36 per share, the company announced this week.

• [By Rick Munarriz]

  I went out on a limb last week, and now it's time to see how that decision played out.

  I predicted that Clean Energy Fuels (NASDAQ: CLNE  ) would close higher on the week. The provider of natural gas fueling solutions for transportation has been posting narrowing losses, and Wall Street was eyeing a 35% surge in revenue. The company was a solid report. Revenue came in a little light, but bottom-line results improved nicely. Shares of Clean Energy Fuels moved slightly higher on the week. I was right. I predicted that the tech-heavy Nasdaq would outperform the Dow Jones Industrial Average. (DJINDICES: ^DJI  ) . This has been a tricky call lately, so how did it play out this time? Well, the market had a strong run this week, fueled be encouraging economic news. Secondary stocks led the way, with the Nasdaq soaring 1.7% on the week. The Dow managed to close just 1% higher. I was right. My final call was for Compass Diversified Holdings (NYSE: CODI  ) to beat Wall Street's quarterly profit target. The investor in several middle-market companies has been posting blowout quarterly results over the past year, and I was banking on seeing the trend continue. Analysts were looking for a profit of $0.36 a share during the quarter, but Compass Diversified failed to beat the prognosticators. I was wrong.

  Two out of three? I'll take it. That makes me eight of nine over the past three weeks.

Top 5 Growth Stocks To Own Right Now: Forward Industries Inc.(FORD)

Forward Industries, Inc., together with its subsidiaries, designs, markets, and distributes carry and protective solutions. The company offers soft-sided carrying cases, bags, clips, hand straps, protective plates, and skins, as well as other accessories for hand held electronic devices, including medical monitoring and diagnostic kits, bar code scanners, GPS and location devices, and cellular telephones. It also designs, markets, and distributes carry and protective solutions for other consumer products, such as laptop computers, MP3 players, firearms, sporting, recreational, and aeronautical products. The company provides its products for used by consumers in protecting, and carrying or transporting portable electronic and other products. Forward Industries, Inc. sells its products to original equipment manufacturers and contract manufacturers in the Asia Pacific, the Americas, and Europe. Forward Industries was founded in 1954 and is based in Santa Monica, California. Advisors' Opinion:

• [By John Emerson]

  I will conclude Part one of Reflections from 20 Years of Investing (2001- 2008) with the discussion of three more sizable winners: Forward Industries (FORD), Lake Gaming (LACO) and Fairchild (FA).

• [By Michael Antonoff]

  Both cars became associated with my deepest regrets. The first because I traded it in for $200 toward a new powder-blue, feel-the-road-on-your-fanny, no-pep Pinto when the Mustang needed $300 of transmission work. My Mustang soon would be known as a Classic, easily worth $10,000. The convertible turned out to be a Lemon Classic that left me repeatedly stranded from Route 101 to the Santa Cruz Mountains. (I should have known something was afoot when a day after driving the car off the lot, black smoke began pouring out of the tailpipe.)

  The original 1965 Ford Mustang convertible in Wimbledon White -- the early version known to many as the 1964 1/2. Mustang went on sale on April 17, 1964 and sold more than 418,000 in the first 12 months.  (Photo: Ford)View Fullscreen The sixth-generation, redesigned 2015 Mustang.  (Photo: Ford)View Fullscreen The 1963 Ford Special Falcon: A prototype of the upcoming Mustang on the Falcon chassis before the name was final. At this time it was referred to as the ��pecial Falcon��and had Cougar badges, one of names under consideration.   (Photo: Ford)View Fullscreen Company head Henry Ford II with the 1964 1/2 Mustang Ford at the car's unveiling at the New York World's Fair in Flushing Meadows, N.Y. on April 17, 1964.  (Photo: Ford)View Fullscreen The 1965 Ford Mustang hardtop on display in the Ford Pavilion at the 1964 New York World's Fair where the car was introduced April 17, 1964.  (Photo: Ford)View Fullscreen 1964 Ford Mustang ad from the New York World's Fair.  (Photo: Ford)View Fullscreen Ad photo for the 1965-model Mustang: By June 1964, Mustang has three body styles -- fastback, hardtop and convertible -- with four engine options.  (Photo: Ford)View Fullscreen A 2010 photo of Gail Wise, the first known retail buyer of a Mustang, with her 1965 convertible bought i

Hot Integrated Utility Companies For 2015: Deutsche Boerse AG (DBOEF)

Deutsche Boerse AG is a Germany-based international financial marketplace operator. It operates four business segments: Xetra; Eurex; Clearstream, and Market Data & Analytics. The Xetra business segment comprises three business areas: cash market using the Xetra electronic trading system and Xetra Frankfurt specialist trading; central counterparty for equities, and admission of securities to listing. The Eurex business segment comprises four business areas: electronic derivatives market trading platform Eurex; electronic options trading platform ISE; over-the-counter trading platforms Eurex Bonds, Eurex Repo, and Eurex Clearing. The Clearstream business segment comprises three business areas: custody, administration and settlement services for securities; global securities financing services, and investment funds services. The Market Data & Analytics business segment comprises two business areas: sales of price information and information distribution, and index development and sales. Advisors' Opinion:

• [By Mark Thompson]

  The contracts are often cleared through exchanges such as CME and Eurex, operated by Deutsche Boerse (DBOEF).

  CME said it would gradually apply an additional "event risk" margin of 12% to all over-the-counter interest rate swaps due to the "additional uncertainty brought by the debt ceiling debate."

Hot Integrated Utility Companies For 2015: ADDvantage Technologies Group Inc.(AEY)

ADDvantage Technologies Group, Inc., through its subsidiaries, distributes and services a range of electronics and hardware products for the cable television industry. The company provides new, surplus-new, and refurbished products in various brands, including Cisco, Motorola and Arris Solutions for use in connection with video, telephone and internet data signals. It offers headend products, including digital and analog satellite receivers, integrated receiver/decoders, demodulators, modulators, antennas and antenna mounts, amplifiers, equalizers, and processors for signal acquisition, processing, and manipulation for further transmission; fiber products comprising optical transmitters, fiber-optic cable, receivers, couplers, splitters, and compatible accessories for transmitting the output of cable system headend to virus locations using fiber-optic cables; and access and transport products, such as transmitters, receivers, line extenders, broadband amplifiers, direction al taps and splitters for use in permiting signals to travel from the headend to their destination in a home, apartment, hotel room, office or other terminal location. The company also provides customer premise equipment consisting of digital converter boxes and modems to receive, record, and transmit video, data, and telephony signals; and hardware equipment, such as test equipment, connector, and cable products. In addition, it offers Fujitsu Frontech North America encoders, decoders, and other media solutions products primarily for use in the broadcast industry. The company markets and sells its products to franchise and private MSOs, telephone companies, system contractors, and other resellers primarily in the United States, Canada, Central America, Mexico, and rest of South America. ADDvantage Technologies Group, Inc.was founded in 1989 and is based in Broken Arrow, Oklahoma.

Advisors' Opinion:

• [By Geoff Gannon] through some changes now ��due to a new (adverse) agreement with Cisco (CSCO). But, historically, it competed on delivery alone. By having products in stock and ready to ship ��their motto is ��n hand on demand����ADDvantage could compete with original equipment manufacturers even though those manufacturers could sell the same product (in large numbers and slow delivery times) for much less.

  That's my biggest concern with whether an industry is easy to understand or not. If a competitor offers to sell its product for 5% less than you charge, how do you respond? Do you have to respond? Can you ignore price competition like that?

  Now, there are obviously industries where price competition is critical and yet the business is easy to understand. Groceries, auto insurance, etc. Even the deposit gathering aspect of some banks is very simple and easy to understand.

  The lending part��not so much.

  My concern is a durable competitive advantage. Something that I can recognize. I have to be able to understand it. In some sense, to actually imagine it. There are many companies with competitive advantages that are just too esoteric for me to understand. I�� probably recognize them if I worked in that industry day after day. You notice things when you��e close enough to see them illustrated every day in a million different anecdotes. Reading about an industry from afar is much harder to do. So the competitive advantage has to be pretty plain and simple. Or I won�� see it when I read it. But that�� competitive advantages. And I'm not sure competitive advantages are the topic of greatest interest to the folks you'll be interviewing with.

  I know that when it comes to what stocks people are most likely to make money on ��it often comes down to familiarity. Are you willing to study the company? And then are you willing to trust your judgment when the stock price moves against you ��as it almost certainly will ��at some critical

• [By Geoff Gannon] cially the part about what they consider their competitive advantages. You��e right that normally a company in their business should see higher revenues, earnings, etc. at the same time. And that time should be when their customers are spending the most on equipment. This heaviest spending will be on new equipment, upgrades, etc.

  But that really isn�� ADDvantage�� business. Let me explain.

  Do you know anything about a company called Copart (CPRT)?

  Great business. If you haven�� read about it, you should look into it. It�� a good name to know in the event stocks fall at some point in the future and offer you a chance to buy at a good P/E.

  Anyway, Copart sells cars. That�� all it does. It has a tiny bit of the business in the UK that involves buying and selling cars. But normally it�� not a principal. It�� just an agent. A broker. It doesn�� ship cars. It doesn�� buy cars. It just stores and sells cars. Copart is a great business. This is especially true because they achieve very high returns on their net tangible investment even though they choose to own rather than leases most of their locations. They own acres and acres and acres of land on which they store cars. You can find the addresses for their locations on their website (each car has a location associated with it that will pop up if you click on the car). Copy and paste that location into Google Earth. You��l be amazed at what you see. Anyway, they carry all this land which they then cover in cars and still they earn good returns on their tangible investment in the business without relying on the use of a lot of leases. So, it�� a very good and very interesting business.

  Now, if I said Copart sold cars, you�� probably think that their revenues and earnings and free cash flow should rise and fall with U.S. car sales.

  If you look at the past 10 years for Copart and for U.S. auto sales you��l see this is not true. Not even a little bit.

  Why i

Hot Integrated Utility Companies For 2015: AcelRx Pharmaceuticals Inc.(ACRX)

AcelRx Pharmaceuticals, Inc., a specialty pharmaceutical company, focuses on the development and commercialization of therapies for the treatment of acute and breakthrough pain in the United States. The company develops ARX-01, a Sufentanil NanoTab PCA system, which completed Phase II clinical trial for acute post-operative pain. The Sufentanil NanoTab PCA system consists of sufentanil, a high therapeutic index opioid; NanoTabs, a non-invasive sublingual dosage form; and a handheld PCA device that enables simple patient-controlled delivery of NanoTabs in the hospital setting and eliminates the risk of programming errors. Its products also include ARX-02, a Sufentanil NanoTab BTP Management System that completed Phase II clinical trial for the treatment of cancer breakthrough pain; and ARX-03, a Sufentanil/Triazolam NanoTab, which completed Phase II clinical trial to provide mild sedation, anxiety reduction, and pain relief for patients undergoing painful procedures in a ph ysician?s office. The company was formerly known as SuRx, Inc. and changed its name to AcelRx Pharmaceuticals, Inc. in August 2006. AcelRx Pharmaceuticals, Inc. was founded in 2005 and is headquartered in Redwood, California.

Advisors' Opinion:

• [By StockMatusow]

  One company that had an offering received very well is AcelRx Pharmaceuticals (ACRX). AcelRx is a specialty pharmaceutical company focused on the development and commercialization of innovative therapies for the treatment of acute and breakthrough pain. On July 19, 2013, AcelRx offered 570,000 shares priced at $11.65. Investors aggressively bought the offering and the stock now sits at $11.96 per share. We covered AcelRx this year when it was about $6.50 per share. It reached highs since of $13.50, which effectively makes it more than a double.

• [By Roberto Pedone]

  Another stock that insiders are jumping into here in a big way is AcelRx Pharmaceuticals (ACRX), which is involved in the development and commercialization of therapies for the treatment of acute and breakthrough pain. Insiders are buying this stock into major strength, since shares are up a whopping 177% so far in 2013.

  AcelRx Pharmaceuticals has a market cap of $440 million and an enterprise value of $412 million. This stock trades at a premium valuation, with a price-to-sales of 145.48 and a price-to-book of 19.93. Its estimated growth rate for this year is 36.4%, and for next year it's pegged at 14.6%. This is a cash-rich company, since the total cash position on its balance sheet is $48.20 million and its total debt is $14.2 million.

  A beneficial owner just bought 850,000 shares, or about $9.9 million worth of stock, at $11.65 per share.

  From a technical perspective, ACRX is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending strong for the last six months, with shares exploding higher from its low of $4.31 to its recent high of $13.50 a share. During that move, this stock has been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of ACRX within range of triggering a major breakout trade.

  If you're bullish on ACRX, then look for long-biased trades as long as this stock is trending some key near-term support levels at $11.46 to $11.43 a share or above its 50-day at $10.06, and then once it breaks out above some near-term overhead resistance levels at $12.57 to its all-time high at $13.50 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average volume of 637,219 shares. If that breakout hits soon, then ACRX will set up to enter new all-time-high territory above $13.50, which is bullish technical price action.

Hot Integrated Utility Companies For 2015: Manchester United PLC (MANU)

Manchester United plc, formerly Manchester United Ltd., incorporated on April 30, 2012, is engaged in the operations of professional sports team. It provides manchester united a platform to generate revenue from multiple sources, including sponsorship, merchandising, product licensing, new media & mobile, broadcasting and matchday. The Company had three principal sectors: Commercial, Broadcasting and Matchday.

Commercial

Within the Commercial revenue sector, the Company had three revenue streams which include sponsorship revenue; retail, merchandising, apparel and product licensing revenue; and new media and mobile revenue. Retail, Merchandising, Apparel and Product Licensing, it markets and sells sports apparel, training and leisure wear and other clothing featuring the Manchester United brand on a global basis. In addition, it also sells other licensed products, from coffee mugs to bed spreads, featuring the Manchester United brand and trademarks. These products are distributed through Manchester United branded retail centers and e-commerce platforms, as well as its partners' wholesale distribution channels.

The Company retails, merchandizes, apparel & product licensing business is managed by Nike, who pays it a minimum guaranteed amount and a share of the business' cumulative profits. It has formed mobile telecom partnerships in 44 countries. In addition, it markets content directly to its followers through its Website, www.manutd.com, and associated mobile properties.

Broadcasting

The Company generates revenue from distribution and broadcasting of live football content. Broadcasting revenue is derived from the global television rights relating to the Premier League, Champions League and other competitions. In addition, its global television channel, MUTV, delivers Manchester United programming to 54 countries around the world. Broadcasting includes all revenue covering domestic and international television and radio rights. Broadc! asting revenue including, in some cases, prize money received by it in respect of the various competitions.

Matchday

The Company generates revenue during the matchday from the Old Trafford, a sports venue.

Other Matchday revenue includes matchday catering, event parking, program sales as well as membership and travel, Manchester United Museum revenue and a share of the ticket revenue from away matches in domestic cup competitions. Matchday revenue also includes revenue from other events hosted at Old Trafford, including other sporting events (including football matches as part of the London 2012 Olympic Games and the annual Rugby Super League Grand Final), music concerts and entertainment events.

Advisors' Opinion:

• [By Rick Munarriz]

  4. Manchester United (NYSE: MANU  )
  OK, let's assume that the royal baby will share some degree of pride for one of the most successful franchises in all of sports.

• [By Maureen Farrell]

  Soccer club Manchester United (MANU) reported a jump in quarterly revenue, compared to the prior year, and a surge in net profit, compared to a loss last year. Its stock closed up more than 2%.