Sunday, September 29, 2013

Does a Recent Deal Support Lockheed Martin at All-Time Highs?

With shares of Lockheed Martin (NYSE:LMT) trading around $129, is LMT an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

Lockheed Martin is a global security and aerospace company principally engaged in the research, design, development, manufacture, integration, and sustainment of technology systems and products. The company also provides a range of management, engineering, technical, scientific, logistic, and information services. It serves both domestic and international customers with products and services that have defense, civil, and commercial applications with its principal customers being agencies of the U.S. government. It operates in five business segments: Aeronautics, Information Systems & Global Solutions, Missiles and Fire Control, Mission Systems and Training, and Space Systems.

Lockheed Martin has won an order from Holland for 37 of its F35 fighter jets, which the country's Defense Minister will announce later today, according to sources who spoke to Reuters. The F35 project is several years behind schedule and 70 percent over budget due to technical difficulties, which led to a majority vote in the Dutch parliament to end the country's involvement in the project.

T = Technicals on the Stock Chart Are Strong

Lockheed Martin stock has seen a consistent uptrend in recent quarters. The stock is currently trading near all-time high prices and looks ready to continue. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, Lockheed Martin is trading above its rising key averages, which signal neutral to bullish price action in the near-term.

LMT

(Source: Thinkorswim)

Taking a look at the implied volatility (red) and implied volatility skew levels of Lockheed Martin options may help determine if investors are bullish, neutral, or bearish.

Implied Volatility (IV)

30-Day IV Percentile

90-Day IV Percentile

Lockheed Martin Options

17.43%

3%

0%

What does this mean? This means that investors or traders are buying a very small amount of call and put options contracts as compared to the last 30 and 90 trading days.

Put IV Skew

Call IV Skew

October Options

Flat

Average

November Options

Flat

Average

As of today, there is an average demand from call buyers or sellers and low demand by put buyers or high demand by put sellers, all neutral to bullish over the next two months. To summarize, investors are buying a very small amount of call and put option contracts and are leaning neutral to bullish over the next two months.

On the next page, let’s take a look at the earnings and revenue growth rates and the conclusion.

E = Earnings Are Mixed Quarter-Over-Quarter

Rising stock prices are often strongly correlated with rising earnings and revenue growth rates. Also, the last four quarterly earnings announcement reactions help gauge investor sentiment on Lockheed Martin’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for Lockheed Martin look like and more importantly, how did the markets like these numbers?

2013 Q2

2013 Q1

2012 Q4

2012 Q3

Earnings Growth (Y-O-Y)

10.92%

14.78%

-16.97%

5.24%

Revenue Growth (Y-O-Y)

-4.30%

-1.97%

-0.92%

-2.06%

Earnings Reaction

1.96%

1.26%

-2.93%

2.14%

Lockheed Martin has seen increasing earnings and decreasing revenue figures over the last four quarters. From these numbers, the markets have been pleased with Lockheed Martin’s recent earnings announcements.

P = Average Relative Performance Versus Peers and Sector

How has Lockheed Martin stock done relative to its peers, Boeing (NYSE:BA), Northrop Grumman (NYSE:NOC), Raytheon (NYSE:RTN), and sector?

Lockheed Martin

Boeing

Northrop Grumman

Raytheon

Sector

Year-to-Date Return

40.36%

55.39%

45.78%

38.93%

41.74%

Lockheed Martin has been an average relative performer, year-to-date.

Conclusion

Lockheed Martin provides valuable and essential security and aerospace technology to several companies and the governments worldwide. The company will reportedly announce a deal with Holland that may be a positive catalyst for the stock. The stock has been soaring higher and is currently trading near all-time high prices. Over the last four quarters, investors in the company have been pleased as earnings have been rising while revenues have been declining. Relative to its strong peers and sector, Lockheed Martin has been an average year-to-date performer. Look for Lockheed Martin to OUTPERFORM.

Saturday, September 28, 2013

Top 10 Heal Care Stocks To Invest In Right Now

When a company announces its intention to deploy capital and repurchase its own shares, the market's reaction is often a positive one. That should not always be the case.

In this segment of The Motley Fool's everything-financials show�Where the Money Is, banking analysts Matt Koppenheffer and David Hanson look back at a few share-buyback programs that crushed stockholders.�

Help us improve and get a�free gift! Take a short survey about this video, and we'll give you access to our special free report "The One Remarkable Stock to Own Now."�Just follow this link�to take the survey and claim your copy of the report.

Many investors are terrified about investing in big banking stocks after the crash, but the sector has one notable standout. In a sea of mismanaged and dangerous peers, it rises above as "The Only Big Bank Built to Last." You can uncover the top pick that Warren Buffett loves in The Motley Fool's�new report. It's free, so click here to access it now.

Top 10 Heal Care Stocks To Invest In Right Now: Diploma(DPLM.L)

Diploma PLC supplies specialized technical products and services in Europe, North America, and internationally. The company?s Life Sciences segment supplies consumables, instrumentation, and related services to the healthcare and environmental industries. This segment offers consumables and instruments used in the diagnostic testing of blood, tissue, and other samples in hospital pathology laboratories; specialty electrosurgery and endoscopy equipment, and consumables for use in the operating rooms and endoscopy suites; analyzers for detecting and measuring specific elements in liquids, solids, and gases, as well as containment enclosures for potent powder handling; and equipment and services for the monitoring and control of environmental emissions. The company?s Seals segment supplies hydraulic seals, gaskets, cylinders, components, and kits for heavy mobile machinery and industrial equipment. This segment provides a next day delivery service for seals, seal kits, and cylinders used in heavy mobile machinery applications; gasket and seal kits for heavy duty diesel engines, transmissions, and hydraulic cylinders used in off road and marine applications; hydraulic kits to install attachments on excavators; O-rings, moulded and machined parts, PTFE products, and shaft seals; and precision seals for hearing aids and heavy duty seals for wind power mills. The company?s Controls segment supplies specialized wiring, connectors, fasteners, and control devices for technically demanding applications. This segment offers wiring, interconnect, electro-mechanical, and fastener products for use in a range of technically demanding applications in various industries, including defense and aerospace, motorsport, energy, medical, and general industrial; flexible braided products and multi-core cables; and control devices used in the sensing, measurement, and control of temperature and pressure. Diploma PLC was incorporated in 1931 and is based in London, the United Kingdom.

Top 10 Heal Care Stocks To Invest In Right Now: Celadon Group Inc.(CGI)

Celadon Group, Inc., through its subsidiaries, provides transportation services between the United States, Canada, and Mexico. It offers a range of truckload transportation services, including long-haul, regional, less-than-truckload, intermodal, and logistics services. The company transports various types of freight comprising tobacco, consumer goods, automotive parts, home products and fixtures, lawn tractors and assorted equipment, light bulbs, and various parts for engines. It also operates an e-commerce business that provides discounted fuel, tires, insurance, and other products and services to small and medium-sized trucking companies through its website, www.truckersb2b.com. In addition, the company provides warehousing and trucking services, as well as freight brokerage services. Celadon Group, Inc. was founded in 1985 and is based in Indianapolis, Indiana.

Hot Penny Companies To Watch In Right Now: Celsion Corporation(CLSN)

Celsion Corporation, an oncology drug development company, develops and commercializes targeted chemotherapeutic oncology drugs based on its proprietary heat-activated liposomal technology. The company is developing its lead product, ThermoDox that is in Phase III clinical trial for primary liver cancer; and in phase II clinical trial for treatment of recurrent chest wall breast cancer. It has a license agreement with Yakult Honsha to commercialize and market ThermoDox for the Japanese market. The company also has a license agreement with Duke University under which it received exclusive rights to commercialize and use Duke's thermo-liposome technology. In addition, Celsion Corporation has a joint research agreement with Royal Phillips Electronics to evaluate the combination of Phillips' high intensity focused ultrasound with its ThermoDox to determine the potential of this combination to treat a range of cancers. The company was founded in 1982 and is based in Columbia, M aryland.

Top 10 Heal Care Stocks To Invest In Right Now: Newcastle Investment Corp (NCT)

Newcastle Investment Corp. (Newcastle) is a real estate investment and finance company. Newcastle invests in, and actively manages, a portfolio of, real estate securities, loans, excess mortgage servicing rights (MSRs) and other real estate related assets. The Company segments include unlevered CDOs, which include unlevered investments in deconsolidated Newcastle CDO debt; unlevered excess MSRs; non-recourse other, which includes investments financed with other non-recourse debt; recourse, which includes investments and debt repurchases financed with recourse debt; unlevered other, which includes other unlevered investments, and corporate. In April 2011, Newcastle sold its retained interests in Newcastle CDO VII, a non-consolidated VIE of Newcastle. On May 15, 2013, the Company announced the spin-off of New Residential Investment Corp. In June 2013, Newcastle Investment Corp completed the sale of 100% of the assets in Newcastle CDO IV.

Real Estate Securities

Newcastle underwrite, acquire and manage a portfolio of credit sensitive real estate securities, including commercial mortgage backed securities (CMBS), senior unsecured real estate investment trust (REIT) debt issued by REITs, real estate related asset backed securities (ABS), including subprime securities, and Federal National Mortgage Association (FNMA)/ Federal Home Loan Mortgage Corp. (FHLMC) securities. As of December 31, 2011, the Company�� real estate securities represented 47.4% of its assets.

Real Estate Related Loans

Newcastle acquires and originates loans to real estate owners, including B-notes, mezzanine loans, corporate bank loans, and whole loans. As of December 31, 2011, the Company�� real estate related loans represented 22.3% of its assets.

Residential Mortgage Loans

Newcastle acquires residential mortgage loans, including manufactured housing loans and subprime mortgage loans. As of December 31, 2011, the Company�� residential mortgage loans rep! resented 9.1% of its assets.

Operating Real Estate

Newcastle acquires and manages direct and indirect interests in operating real estate. As of December 31, 2011, the Company�� operating real estate represented 0.9% of its assets.

Excess Mortgage Servicing Rights

Newcastle invested in excess MSRs in December 2011. As of December 31, 2011, the Company�� interests in these rights represented 1.2% of its assets.

Top 10 Heal Care Stocks To Invest In Right Now: US Ecology Inc.(ECOL)

US Ecology, Inc., through its subsidiaries, provides waste treatment, disposal, recycling, and transportation services to commercial and government entities in the United States. The company offers treatment and disposal services for radioactive, hazardous, polychlorinated biphenyl, and non-hazardous industrial wastes. Its customers include oil refineries, chemical production facilities, manufacturers, electric utilities, steel mills, biotechnology companies, military installations, waste brokers/aggregators, and medical and academic institutions. The company was formerly known as American Ecology Corporation and changed its name to US Ecology, Inc. in February 2010. US Ecology, Inc. was founded in 1952 and is headquartered in Boise, Idaho.

Top 10 Heal Care Stocks To Invest In Right Now: Liontrust Asset Management(LIO.L)

Liontrust Asset Management plc is a publicly owned investment manager. The firm primarily provides its services to individuals and institutional investors through its subsidiaries. Through its subsidiaries, it manages equity portfolios, unit trusts, individual savings accounts, offshore funds, absolute return funds, pooled pension funds, and segregated institutional accounts for its clients. The firm invests in the public equity markets of United Kingdom and Europe through its subsidiaries. Through its subsidiaries, it primarily invests in growth stocks of companies to create its equity portfolios. Liontrust Asset Management plc was founded in 1994 and is based in London, United Kingdom.

Top 10 Heal Care Stocks To Invest In Right Now: Columbus McKinnon Corporation(CMCO)

Columbus McKinnon Corporation designs, manufactures, and markets material handling products for commercial and industrial end-user markets in the United States, Europe, Canada, and internationally. The company offers electric, lever, hand, and air-powered hoists; hoist trolleys; winches; industrial crane systems, such as bridge, gantry, and jib cranes; alloy and carbon steel chains; closed-die forged attachments comprising hooks, shackles, textile slings, clamps, logging tools, and load binders; industrial components, including mechanical and electromechanical actuators and rotary unions; below-the-hook special purpose lifters; tire shredders; and light-rail systems. It offers its products through commercial distributors and end-users under various names, including Budgit, Chester, CM, Coffing, Duff-Norton, Little Mule, Pfaff, Shaw-Box, and Yale. The company sells its products to various industries that include manufacturing, power generation and distribution, utilities, w ind power, warehouses, commercial construction, oil exploration and refining, petrochemical, marine, ship building, transportation and heavy duty trucking, agriculture, logging, and mining, as well as to the entertainment industry comprising permanent and traveling concerts, live theater, and sporting venues. Columbus McKinnon Corporation was founded in 1875 and is headquartered in Amherst, New York.

Top 10 Heal Care Stocks To Invest In Right Now: Biogen Idec Inc(BIIB)

Biogen Idec Inc. discovers, develops, manufactures, and markets therapies for the treatment of neurodegenerative diseases, hemophilia, and autoimmune disorders in the United States and internationally. Its marketed products include the AVONEX for the treatment of relapsing multiple sclerosis (MS); RITUXAN for treating relapsed or refractory, CD20-positive, and B-cell Non-Hodgkin?s lymphoma (NHL); TYSABRI to treat relapsing MS; FUMADERM for the treatment of severe plaque psoriasis in adult patients; and FAMPYRA, an oral compound for the improvement of walking in adult patients with MS with walking disability. Biogen Idec Inc.?s products under Phase III consist of PEGylated interferon beta-1a designed to prolong the effects and reduce the dosing frequency of interferon beta-1a; BG-12 for the treatment of MS; Daclizumab, a monoclonal antibody in relapsing MS; Long-lasting factor IX and VIII fusion protein for the treatment of hemophilia B; GA101, a monoclonal antibody for t he treatment of chronic lymphocytic leukemia and NHL; and Dexpramipexole, an orally administered small molecule for the treatment of amyotrophic lateral sclerosis. The company?s Phase I clinical trial products include Anti-LINGO for use in multiple sclerosis, Neublastin for use in neuropathic pain, CD40L for use in systemic lupus erythematosus, ANTI-TWAEK humanized monoclonal antibody for TWEAK, and BIIB037 for use in Alzheimer's disease; and Phase II clinical trial product comprises OCRELIZUMAB, a humanized monoclonal antibody for treating CD20. It has collaboration agreements with Genentech, Inc.; Elan Pharma International, Ltd; Acorda Therapeutics, Inc.; Portola Pharmaceuticals, Inc.; Swedish Orphan Biovitrum AB; Abbott Biotherapeutics Corp; and Vernalis plc. The company was formerly known as IDEC Pharmaceuticals Corporation and changed its name to Biogen Idec Inc. in November 2003. Biogen Idec Inc. was founded in 1985 and is headquartered in Weston, Massachusetts.

Advisors' Opinion:
  • [By Ben Levisohn]

    They did, however, show passion for Autonation (AN), which gained 3.1% to $46.76, benefiting, I suppose, from demand for Ford’s (F) Fusion. Biotech stocks continued their strong run today. Biogen (BIIB) gained 2.1% to $214.13, while Celgene (CELG) rose 2.5% to $142.58.

  • [By Ben Levisohn]

    While we lean positive on the large cap names across the board, including Neutral-rated names [Biogen (BIIB)] and [Celgene (CELG)], we single out [Gilead Sciences (GILD)] as our favourite into YE13e and into 2014. Among mid caps, we favor…[Medivation (MDVN).]

Top 10 Heal Care Stocks To Invest In Right Now: Jeffersonville Bancorp(JFBC)

Jeffersonville Bancorp operates as the holding company for The First National Bank of Jeffersonville, a national-chartered bank that provides a range of commercial banking services to individuals, businesses, and municipalities. The company accepts various types of deposit products, including demand deposit accounts, interest-bearing transaction accounts, savings accounts, money market accounts, certificates of deposit, and individual retirement accounts. It also offers residential real estate, commercial real estate, commercial business, consumer, and agricultural loans. The company serves customers in the Sullivan County, New York, as well as in some areas of adjacent counties in New York and Pennsylvania. As of December 31, 2010, it operated 11 branch offices in Bloomingburg, Eldred, Liberty, Loch Sheldrake, Monticello, Livingston Manor, Narrowsburg, Callicoon, Wurtsboro, White Lake, and Monticello. The company was founded in 1913 and is headquartered in Jeffersonville, New York.

Top 10 Heal Care Stocks To Invest In Right Now: Cohen & Steers Quality Income Realty Fund Inc(RQI)

Cohen & Steers Quality Income Realty Fund Inc. is a closed-ended equity mutual fund launched and managed Cohen & Steers Capital Management, Inc. It invests in the public equity markets of the United States. The fund seeks to invest in growth stocks of companies operating in real estate sector. It employs fundamental analysis focusing on underlying potential for success in light of the company?s current financial condition, its industry and sector position, economic and market condition, earnings growth, current ratio of debt to capital and the quality of its management. The fund benchmarks the performance of its portfolio against the S&P 500 index and the FTSE NAREIT Equity REIT index. It was previously known as Cohen & Steers Income Realty Fund Inc. Cohen & Steers Quality Income Realty Fund Inc was formed on August 22, 2001 and is domiciled in the United States.

Tuesday, September 24, 2013

Stock Market News Today: Syria, Jobs, Septaper, and the Biggest Share-Price Moves

In major stock market news today, markets are pulling out of losses at midday after volatile morning trade. Investors pulled out of markets after Russian President Vladimir Putin today vowed to back Syria in the event of a U.S. attack.  

U.S. President Barack Obama, joining Putin at the G-20 Summit in St. Petersburg today, repeated his message that a U.S. attack would not be full scale, but would be on par with a recent attack on Damascus.

In other stock market news today, investors learned that the United States added 169,000 jobs in August as unemployment dropped slightly to 7.3% from 7.4%, according to the U.S. Labor Department. It was fewer jobs than economists anticipated.

And fewer people were looking for work as the labor force participation dropped to 63.2%, which is the lowest level since 1978, according to MarketWatch. Many investors suspect the worse-than-expected jobs data could delay the U.S. Federal Reserve's plans to ease out of its bond-buying program starting after the Sept. 17-18 Federal Open Market Committee (FOMC) meeting (Septaper).

Meanwhile, Chicago Federal Reserve President Charles Evans hinted that the Fed could begin increasing interest rates in 2015 as unemployment falls below 6.5%.

Amid the mixed economic data this week, Treasury yields, which have been rising all week, dropped today as Treasury prices rose on the jobs report data. The 10-year Treasury prices are up about 1% this morning.

Consumer Stocks in the News

Among top stock market news today, the consumer, technology, and healthcare sectors hold several movers...

In consumer stocks news, Mattress Firm Holding Corp. (Nasdaq: MFRM) shares are down 15% as the company reported Q2 adjusted earnings per share (EPS) of $0.43 versus consensus estimate of $0.51. Net sales were $302.5 million, compared to the $323 million the Street expected. Year-ago adjusted EPS was $0.42, on net sales of $262 million.

And, Ford Motor Co. (NYSE: F) says it may allow its chief executive officer to step down sooner than originally planned under a succession plan outlined last night, Reuters reports. Ford shares are down about 1%.

Healthcare Stocks in the News

Atossa Genetics Inc. (Nasdaq: ATOS) shares are up about 6% in midday trading due to a cancer breakthrough it plans to showcase this weekend...

Atossa will exhibit its ForeCYTE Breast Health Test at the 2013 Breast Cancer Symposium in San Francisco, CA, which starts Saturday.

Altossa's test detects reversible precancerous conditions in the breast up to eight years before the conditions turn into cancer. It uses no radiation and does not require invasive biopsy needles or surgical incisions.

Energy Stocks in the News

In energy stock news today, Layne Christensen Co. (Nasdaq: LAYN), a water management, construction, and drilling company, is down 6% today after it swung to a loss of $1.17 per diluted share in fiscal Q2 from a profit of $0.24 a year earlier. Q2 revenue declined to $232 million from $288 million. Analysts had expected an adjusted loss of $0.39 on revenue of $261 million.

And, GasLog Ltd. (NYSE: GLOG) is up 2.4% after it announced it has signed a memorandum of agreement to acquire the STX Frontier, a 153,600 cubic meter liquefied natural gas (LNG) carrier, from Singapore-based STX Pan Ocean LNG PTE. Ltd. The acquisition cost of the vessel is in the vicinity of US$160 million.

This Week's Major Stock Market News

Top 5 Heal Care Stocks To Invest In 2014

In fact, GasLog's acquisition of STX Frontier is just one of several major mergers and acquisitions this week, especially in the technology sector...

Nokia Corp. (NYSE ADR: NOK) rose more than 44% Monday after announcing a deal with Microsoft Corp. (Nasdaq: MSFT). Microsoft said it will purchase substantially all of Nokia's Devices & Services business, license Nokia's patents, and license and use Nokia's mapping services in a more than $7 billion deal.

And, also Monday, Verizon Communications Inc. (NYSE: VZ) surprised investors when it said it will pay $130 billion for Vodafone Group's (Nasdaq: VOD) 45% stake in VZ's wireless venture.

Along with communications technology, several other sectors were noting strong movements this week, including solar stocks and dry bulk shipping. Solar stocks have soared since JPMorgan said today the industry has significant room for growth. Suntech Power Holdings Co. Ltd. (NYSE ADR: STP) shares were up about 2.2% in afternoon trade.

And dry bulk shippers like FreeSeas Inc. (Nasdaq: FREE), Seanergy Maritime Holdings Corp. (Nasdaq: SHIP), and Eagle Bulk Shipping Inc. (Nasdaq: EGLE) are noting big gains today as shipping rates strengthen. FREE is up 8%, SHIP is up 13%, and EGLE is up 7% as capesize shipping rates increased overnight by about 10%, exceeding $20,000 for the first time since January 2012.

Now on to today's main story for Money Morning members: There's a major slip coming in the U.S. housing market "recovery." Misleading reported numbers mean you might have missed the signs - unless you read this just-released update from our housing market expert Shah Gilani.

Top 10 High Tech Stocks To Watch Right Now

Raytheon (NYSE: RTN  ) is a selection for the real-money Inflation-Protected Income Growth portfolio. Like any investment, it needs to be reviewed from time to time to see if it's still worth owning. In the brief video below, portfolio manager Chuck Saletta reviews its valuation, balance sheet, and dividends, and decides whether to hold on to the stock or let it go.

To follow the iPIG portfolio as buy and sell decisions are made, watch Chuck's article feed by clicking here. To join The Motley Fool's free discussion board dedicated to the iPIG portfolio, simply click here.

For more dividend-oriented investments
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Top 10 High Tech Stocks To Watch Right Now: B2Gold Corp (BTG)

B2Gold Corp. (B2Gold) is a gold producer with mining operations in Nicaragua and a portfolio of development and exploration assets in Colombia, Nicaragua and Uruguay. It operates the Libertad Mine and the Limon Mine in Nicaragua. It owns or has an interest in the Gramalote and Mocoa properties in Colombia, and the Bellavista property in Costa Rica. La Libertad Mine is located 110 kilometers east of Managua. The Limon Mine is located approximately 100 kilometers northwest of Managua and 20 kilometers from the Pan- American Highway. The Otjikoto gold project is located approximately 300 kilometers north of Namibia�� capital city, Windhoek. The Gramalote property is located approximately 230 kilometers northwest of the Colombian capital of Bogota and approximately 80 kilometers northeast of Medellin. The Gramalote property area is covered by 31 contiguous claim blocks totaling 42,790.09 hectares. In Jnauary 2013, the Company acquired CGA Mining Ltd.

Top 10 High Tech Stocks To Watch Right Now: Paychex Inc.(PAYX)

Paychex Inc., together with its subsidiaries, provides payroll, human resource, and benefits outsourcing solutions for small-to medium-sized businesses in the United States and Germany. It offers payroll processing services, including calculation, preparation, and delivery of employee payroll checks; production of internal accounting records and management reports; preparation of federal, state, and local payroll tax returns; and collection and remittance of clients? payroll obligations. The company also provides payroll tax administration services; employee payment services; and regulatory compliance services, such as new-hire reporting and garnishment processing. Its human resource outsourcing services include payroll, employer compliance, human resource and employee benefits administration, risk management outsourcing, and the on-site availability of a professionally trained human resource representative, as well as provides employee handbooks, management manuals, and r equired regulatory forms. In addition, the company offers retirement services administration; workers? compensation; business-owner policies; commercial auto; and health and benefits coverage, including health, dental, vision, and life. Further, it provides online human resource administration software products for employee benefits management and administration, and time and attendance solutions. As of May 31, 2010, the company served approximately 536,000 clients in the United States; and 1,700 clients in Germany. Paychex, Inc. was founded in 1971 and is headquartered in Rochester, New York.

Hot Oil Companies To Own For 2014: Volex Grp(VLX.L)

Volex plc provides electrical and optical connection solutions for equipment manufacturers in telecoms/datacoms, healthcare, consumer products, and industrial sectors in Asia, North America, South America, and Europe. Its products comprise power cords; custom and industry standard cable assemblies; high speed cable assemblies; fiber optic cable assemblies, such as indoor and outdoor assemblies, plastic optic assemblies, diode lasers, splitters, attenuators, adapters, optical distribution frames, fiber enclosures, and accessories; and radio frequency (RF) cable assemblies consisting of standard coaxial cable assemblies, precision phase matched assemblies, and compound data and RF injection molded assemblies. The company offers its interconnect solutions and power products to manufacturers of electrical/electronic devices and appliances, including laptop/desktop computers, printers, televisions, DVDs, games consoles, power tools, kitchen appliances, and floor cleaning equipm ent; customized interconnect solutions to manufacturers of equipment servicing the telecoms network, high-performance computing, and data-centre markets. Volex plc provides its cable assembly and connector solutions for medical equipment field comprising imaging systems, clinical diagnostics systems, and patient monitoring systems; and cable assemblies for industrial markets, such as test and measurement equipment, manufacturing/automation, refrigeration, vehicle telematics, and renewable energy. The company was formerly known as Volex Group plc and changed its name to Volex plc in August 2011. Volex plc is headquartered in London, the United Kingdom.

Top 10 High Tech Stocks To Watch Right Now: IMPERIAL METALS CORP.(III.TO)

Imperial Metals Corporation engages in the acquisition, exploration, development, mining, and production of base and precious metals. The company holds interests in properties situated in British Columbia, including the Mount Polley open pit copper/gold mine covering 18,321 hectares, which consists of 7 mining leases totaling 2,007 hectares, as well as 41 mineral claims encompassing 16,315 hectares located in the northeast of Williams Lake; Huckleberry open pit copper/molybdenum mine consisting of a mining lease covering approximately 1,912 hectares, and 38 mineral claims encompassing approximately 16,594 hectares situated southwest of Houston; Red Chris copper/gold deposit encompassing 68 mineral claims totaling 16,994 hectares located in the village of Iskut; and Ruddock Creek zinc/lead property consisting of 23 mineral claims totalling 11,047 hectares located northeast of Kamloops. It also holds interests in the Sterling gold property comprising 272 lode mining claims l ocated northwest of Las Vegas, Nevada; and Catface copper/molybdenum property situated on the west coast of Vancouver Island, British Columbia. The company was founded in 1959 and is headquartered in Vancouver, Canada.

Top 10 High Tech Stocks To Watch Right Now: Novadx Ventures Corp. (NDX.V)

NovaDX Ventures Corp. is a principal investment firm. The firm prefers to make direct investments in projects. Within direct investments it invests in those projects whose assets are undervalued and which can be among the lowest cost producers of commodities or processors of feed stocks. The firm also makes equity investments in net smelter royalties. It seeks to invest in acquisition of production payments or net profit interests, purchase of debt, convertible equity, secured loans or guarantees, purchase of IPOs, and participates in reorganization, privatizations, mergers, and consolidations. NovaDX Ventures Corp. is based in Vancouver, British Colombia.

Top 10 High Tech Stocks To Watch Right Now: Cirrus Logic Inc.(CRUS)

Cirrus Logic, Inc., a fabless semiconductor company, develops high-precision analog and mixed-signal integrated circuits (ICs) for audio and energy markets worldwide. The company offers analog and mixed-signal audio converter and audio digital signal processor (DSP) products, which include analog-to-digital converters (ADCs); digital-to-analog converters (DACs); chips for integrating ADCs and DACs into an IC; digital interface ICs; volume controls; and digital amplifiers, as well as audio DSPs for consumer electronics applications. Its audio products are used in various consumer applications, including portable media players, smartphones, tablets, AVRs, DVD and Blu-ray disc players, home theater systems, set-top boxes, MP3 players, gaming devices, sound cards, and digital televisions; professional applications comprising digital mixing consoles, multitrack digital recorders, and effects processors; automotive applications consisting of amplifiers, satellite radio systems, telematics, and multi-speaker car-audio systems; and networked digital audio applications. The company also provides high-precision analog and mixed-signal ICs for energy control, energy measurement, and energy exploration applications; and ICs, board-level modules, and hybrids under the Apex Precision Power brand name for high-power pulse width modulation (PWM) and power amplifier applications; and proprietary products, which include ADCs, DACs, linear amplifiers, PWM amplifiers, and amplifier ICs; and system reference designs. Its energy products are used in digital utility meters, power supplies, lighting ballasts, motor control, energy exploration, and high-power systems. The company sells its products primarily to through direct sales force, external sales representatives, and distributors. Cirrus Logic, Inc. was founded in 1984 and is headquartered in Austin, Texas.

Top 10 High Tech Stocks To Watch Right Now: Two Harbors Investment Corp (TWO)

Two Harbors Investment Corp. (Two Harbors), incorporated on May 21, 2009, operates as a real estate investment trust (REIT). The Company is focused on investing in, financing and managing residential mortgage-backed securities (RMBS), residential mortgage loans, residential real properties, and other financial assets. The Company focuses on security selection and implements a relative value investment approach across various sectors within the residential mortgage market. Its target assets include Agency RMBS, Non-Agency RMBS, residential mortgage loans, residential real properties and other financial assets comprising approximately 5% to 10% of the portfolio. The Company has designated certain of its subsidiaries as taxable REIT subsidiaries (TRSs). Capitol Acquisition Corp. (Capitol) is a wholly owned indirect subsidiary of Two Harbors. The Company is externally managed and advised by PRCM Advisers LLC, a wholly owned subsidiary of Pine River Capital Management L.P. (Pine River).

The Company invests primarily in mortgage pass-through certificates, collateralized mortgage obligations and other residential mortgage-backed securities representing interests in or obligations backed by pools of mortgage loans issued by Federal National Mortgage Association (Fannie Mae), Federal Home Loan Mortgage Corporation (Freddie Mac), and Government National Mortgage Association (GNMA) (collectively GSEs). The Company also invests in residential mortgage-backed securities that are not issued by the GSEs (non-Agency RMBS) and United States Treasuries. At December 31, 2011, the Company had total assets of approximately $8.1 billion, of which $6.2 billion, or 77.1%, represented its RMBS portfolio. At December 31, 2011, $5.1 billion, or 80.9%, of its RMBS portfolio was comprised of Agency RMBS, $0.9 billion, or 14.9%, of its RMBS portfolio was comprised of senior non-Agency RMBS, and the remaining $0.2 billion, or 4.2%, was comprised of other non-Agency RMBS. The remaining $1.9 billion of assets consisted p! rimarily of United States Treasuries classified as trading instruments, cash, restricted cash, mortgage loans held-for-sale, receivables, derivative assets and prepaid assets.

Advisors' Opinion:
  • [By Robert Hsu]

    Two of the worst mortgage REITs to own right now also happen to be two of the most widely held ones, and they are Annaly Capital Management Inc (NYSE: NLY-C) and Two Harbors Investment Corp. (NYSE: TWO).

Top 10 High Tech Stocks To Watch Right Now: Domino Printing(DNO.L)

Domino Printing Sciences plc engages in the research and development, manufacture, and sale of industrial printing equipment, controllers, and consumables for the high-speed printing of variable information. Its primary products include printers, controllers, consumables, fluids, and spare parts, as well as provides after sales support services. The company also offers black ink for a range of plastic-based substrates; coding and marking solutions to identify, authenticate, and personalize products; and codes and marks for protection of brand value. In addition, Domino Printing Sciences plc provides various technology solutions, including ink jet, thermal ink jet, scribing laser, binary, thermal transfer overprinting, drop on demand, print and apply labelling machinery, and laser printers. Further, it offers digital printing technologies, which are used in Web-based applications. Domino Printing Sciences plc serves beverage, binding, cable and wire, construction, cosmetics and personal care, electronics, finishing, food, games management, mailing, pharmaceutical, plastic cards, newspaper, postal systems, and tobacco, as well as for tickets, tags, and labels industries. The company distributes its products through third party distributors primarily in North America, South America, Europe, the Asia Pacific, and the Middle East/Africa. Domino Printing Sciences plc was founded in 1978 and is headquartered in Cambridge, the United Kingdom.

Top 10 High Tech Stocks To Watch Right Now: Lance Inc.(LNCE)

Snyder?s-Lance, Inc. manufactures, markets, and distributes snack food products primarily in the United States. Its products include pretzels, sandwich crackers, kettle chips, cookies, potato chips, tortilla chips, other salty snacks, sugar wafers, nuts, and restaurant style crackers. The company sells its products principally under the Snyder?s of Hanover, Lance, Cape Cod, Krunchers!, Jays, Tom?s, Archway, Grande, Stella D?oro, O-Ke-Doke, EatSmart, and Padrinos brand names. It also purchases and sells cakes, meat snacks, and candy under its brands, as well as partner brand products for resale. Snyder?s-Lance, Inc. sells its products through direct-store-delivery network, distributors, and direct sales to grocery/mass merchandisers, convenience stores, club stores, discount stores, food service establishments, drug stores, schools, military and government facilities, recreational facilities, offices, and other independent retailers. The company was formerly known as L ance, Inc. and changed its name to Snyder?s-Lance, Inc. in December 2010. Snyder?s-Lance, Inc. was founded in 1912 and is headquartered in Charlotte, North Carolina with additional offices in Hanover, Pennsylvania.

Top 10 High Tech Stocks To Watch Right Now: McGraw Hill Financial Inc (MHFI)

McGraw Hill Financial, Inc. incorporated on December 29, 1925, is a financial intelligence company. The Company is engaged in credit ratings, benchmarks and analytics for the global capital and commodity markets. The Company�� brands include Standard & Poor's Ratings Services, S&P Capital IQ, S&P Dow Jones Indices, Platts, CRISIL, J.D. Power & Associates, McGraw Hill Construction and Aviation Week. The Company�� credit ratings, indices, price assessments and other capabilities provide clients with the intelligence to manage risk. Standard & Poor�� Ratings Services helps investors and markets participants measure and manage credit risk through credit ratings, research and analytics. S&P Capital IQ is a provider of real-time data, research and analytics to institutional investors, investment and commercial banks, investment advisors and wealth managers, corporations and universities globally. On March 22, 2013, the Company sold McGraw-Hill Education. Effective July 18, 2013, McGraw Hill Financial Inc acquired a remaining undisclosed interest which it did not already own in Tata McGraw-Hill Education Pvt Ltd from Tata charitable trust. In August 2013, McGraw Hill Financial Inc completed the sale of Aviation Week to Penton.

The Company provides a range of capabilities designed to help track performance, generate alpha, identify new trading and investment ideas, and perform risk analysis and mitigation strategies. The Company�� S&P Dow Jones Indices is the provider of financial market indices. Its Platts is a provider of information and a source of benchmark price assessments for the energy, petrochemicals, metals and agriculture markets. J.D. Power & Associates is a global marketing information services company operating in business sectors, including customer satisfaction research, market research, social media research, and performance improvement programs. McGraw Hill Construction connects people, projects, and products across the design and construction industry. AVIATION WEEK is! the multimedia information and services provider to the global aviation, aerospace and defense industries.

Saturday, September 21, 2013

Crunch Time for Gold Again

NEW YORK (Fabian Capital Management) -- The looming Federal Reserve meeting on Wednesday has many market watchers on the edge of their seats, waiting to see what happens with the outcome of the taper debate.

Some are calling for a big reduction in the asset purchase programs, while others are forecasting a more modest slowdown. The final decision will ultimately play a huge catalyst in the future price trend of stocks, bonds and commodities. But one asset class that will certainly see some additional volatility in the weeks ahead is gold.

We saw the SPDR Gold Shares ETF (GLD) fall out of favor in the beginning of the year and decline precipitously until it bottomed in July. Since that time, a snapback rally alleviated some of the downside pressure but this fledgling uptrend may be facing its most critical test in the near future.

Courtesy of StockCharts.com In my opinion, GLD needs to hold the $125 level in order to retain its technical strength and continue to gain additional steam. If it can form a higher low and blast off above its August high, then we may see a run for the 200-day moving average (red line) which would bring additional asset flows back into this sector. The Bull Case The Fed may ultimately be the catalyst that sets this precious metal on fire as Chairman Ben Bernanke's comments generally tend to fuel speculation about inflation, currency risks and economic growth potential. These are all key elements in the fundamental case for owning gold along with the safe haven aspect of a hard asset in favor of paper stock or bonds. If we see a misstep by the Fed this week that sends stocks lower, then we may witness a flight to quality back into GLD and other precious metals exchange-traded funds. Another supportive factor in the gold debate is the deterioration in the U.S. dollar index, which has been under pressure since the July low in gold. A weaker dollar is typically bullish for precious metals. The Bear Case On the flip side, Goldman Sachs recently forecast that gold would fall to new lows on the back of a fresh acceleration in the U.S. economy in 2014. There is certainly a case for this to occur if the Fed gives the market what it needs and we see a liftoff in stock prices. This scenario would likely negate the safety trade in gold and lure risk takers back into stocks and other high-yield securities.

In addition, we have continued to see unabated asset outflows from gold-related ETFs in 2013. According to Index Universe, GLD still tops the list of total redemptions with over $20 billion in outflows this year and has lost over $400 million in September alone. Clearly this is a sign that investors have used the most recent bounce to continue exiting their gold holdings. How To Play Gold Right Now

While there are definitive arguments for and against owning GLD at this juncture, I am in favor of looking at it from a risk to reward standpoint. If you currently own this ETF, then I would continue to maintain the position with a conservative stop loss to limit your downside risk.

That way you won't get heavily burned if the Fed statement sends this fund sliding back down to the lows. Remember to size your position in line with your risk tolerance and not to get too overly allocated to this sector which is a mistake that I often see made by overly enthusiastic precious metals investors (i.e. gold bugs).

If you don't have a position in GLD but are considering making an allocation, I would wait until we get more clarity in the coming days and the price trend makes a turnaround. I don't think that there is a definitive edge to jumping into this ETF ahead of a known event that could send it careening in either direction. Keep some dry powder on hand if we start to see renewed strength emerge and start with small positions as you make your way into this sector. Without a doubt, there will be continued volatility in the coming days and you may be able to use that to your advantage as you work into new holdings. At the time of publication the author had no position in any of the stocks mentioned. Follow @fabiancapital This article was written by an independent contributor, separate from TheStreet's regular news coverage.

David Fabian is currently a Managing Partner at Fabian Capital Management, a fee-only registered investment advisory firm specializing in exchange-traded funds. He has years of experience constructing actively managed growth and income portfolios using ETFs. David regularly contributes his views on wealth management in his company blog, podcasts, and special reports. Visit www.FabianCM.com to learn more. Follow @fabiancapital

Wednesday, September 18, 2013

European Stocks Advance Before Fed’s Decision on Stimulus

European stocks advanced, with the benchmark Stoxx Europe 600 Index trading near a five-year high, as investors awaited the Federal Reserve's decision on reducing the amount of monthly bond purchases.

Siemens AG climbed to a two-year high after appointing a new chief financial officer and a supervisory-board member. HeidelbergCement AG added 1 percent after Goldman Sachs Group Inc. recommended the stock. Lanxess AG dropped 2.3 percent as investors weighed its cost-cutting plan.

The Stoxx Europe 600 Index gained 0.3 percent to 312.95 at 2:17 p.m. in London, trading 0.2 percent below a five-year high it reached on Sept. 16. The gauge has rallied 12 percent so far this year as central banks pressed on with their supportive policies.

"The whole environment for growth does seem to have deteriorated slightly since June when the Fed last really spoke to the market," Lucy MacDonald, chief investment officer for equities at Allianz Global Investors in London, told Mark Barton on Bloomberg Television. Her company oversees about $419 billion. "If they don't do anything at all that may raise questions and people will be more concerned about growth. Clearly we need to have the comfort that the economic recovery is still well underpinned."

Fed Tapering

The Federal Open Market Committee wraps up a two-day policy meeting today, at which it will probably decide to lower its $85 billion of monthly bond purchases. Among 64 economists surveyed by Bloomberg News, 33 predicted the Fed will reduce its buying of Treasuries by $5 billion or less, with 31 projecting a cut of $10 billion or more.

Earlier this month, a Bloomberg News survey of 34 economists forecast a $10 billion reduction. In a July poll, half of the 54 respondents predicted a $20 billion cut.

The FOMC releases both its policy statement and forecasts for economic growth, inflation and unemployment at 2 p.m. New York time, after the European markets close. Chairman Ben S. Bernanke will hold a press conference half an hour later.

The Bank of England today released the minutes from its Sept. 4-5 meeting, which showed that officials unanimously concluded there was no need for additional stimulus given an improving outlook for the British economy.

Housing Starts

In the U.S., housing starts climbed to a 891,000 annualized pace in August from a revised 883,000 rate the previous month, Commerce Department Data figures showed. That missed the median projection of 917,000 in a Bloomberg survey.

National benchmark indexes rose in 13 of the 18 western European markets today. Germany's DAX advanced 0.3 percent. The U.K.'s FTSE 100 slipped less than 0.1 percent. France's CAC 40 increased 0.4 percent.

Siemens gained 0.9 percent to 89.38 euros, the highest price since July 2011. Europe's biggest engineering company appointed SAP AG's co-Chief Executive Officer Jim Hagemann Snabe to its supervisory board and named Ralf Thomas CFO.

Snabe will take the place of Josef Ackermann, who is leaving, as director, while former Bayer AG Chief Executive Officer Werner Wenning will replace him as the deputy chairman.

HeidelbergCement gained 1 percent to 57.99 euros as Goldman Sachs raised its rating on the cement maker to buy from sell, saying increased spending will drive growth opportunities. The stock is trading at 16.6 times projected earnings, compared with 16.5 times for the Stoxx 600 Construction and Materials Index.

Smiths Dividend

Smiths Group Plc (SMIN) advanced 2.7 percent to 1,413 pence, its highest price since May. The U.K. producer of security scanners increased its final dividend to 27 pence a share and announced an additional payout of 30 pence per share.

Lanxess AG fell 2.3 percent to 50.23 euros. The synthetic-rubber maker said it will cut 1,000 jobs and curb management bonuses as part of a plan to save about 100 million euros ($134 million) annually from 2015.

Citigroup Inc. said the proposal will put additional pressure on the company's cash flow in the short term. Goldman said investors may sell the stock in the absence of a more significant plan. Baader Bank AG analyst Norbert Barth, who has a sell rating on the stock, said Lanxess may lower its dividend from last year's 1 euro per share.

Aberdeen Asset Management Plc fell 3.5 percent to 367.3 pence. Morgan Stanley cut its projections for the company's 2014 and 2015 earnings by about 6 percent and 7 percent respectively, citing equity outflows and weak fund performance. Aberdeen will release a trading update on Sept. 23, according to its website.

Monday, September 16, 2013

Boeing 787 Dreamliner in Norway Reports Brake Problem

A Norwegian airlines revealed on Thursday that a newly delivered 787 Dreamliner from Boeing Co. (NYSE: BA) has been parked at Stockholm's Arlanda Airport since Monday as a result of a potential problem with the aircraft's brakes. Norwegian Air Shuttle ASA has ordered total of eight Dreamliners.

The airlines told The Wall Street Journal that technicians were working on the problem and "we hope it will be up in the air pretty soon." An airlines spokesperson said the company has "full confidence" in the Dreamliner and will not change its plans to acquire the new planes.

The Dreamliner has been plagued with a number of issues since its first delivery more than a year ago. The plane's composite body panels had a separation problem and battery issues have led to overheating and fires. This is the first reported problem with the aircraft's brakes.

Boeing's shares closed on Wednesday at $106.37 and are inactive in premarket trading so far Thursday morning. The stock's 52-week range is $69.03 to $109.49.

Saturday, September 14, 2013

Will Macy’s Continue Its Dominance?

With shares of Macy's (NYSE:M) trading around $46, is M an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

Macy's operates stores and Internet websites in the United States. It operates Macy’s and Bloomingdale’s stores and websites that sell a range of merchandise, including apparel and accessories for men, women, and children; cosmetics; home furnishings; and other consumer goods in 45 states, the District of Columbia, Guam, and Puerto Rico. As trends change, so does fashion and Macy’s is one of the companies that has remained relevant over the last several years. Consumers will continue to explore the latest styles and Macy’s and Bloomingdale’s stores stand ready to provide excellent products. Look for Macy’s to remain a leader in the industry for many years to come.

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T = Technicals on the Stock Chart are Strong

Macy's stock has seen a consistent uptrend since reaching lows during the 2008 Financial Crisis. The stock is now trading near all-time high prices and sees no signs of slowing just yet. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, Macy's is trading above its rising key averages which signal neutral to bullish price action in the near-term.

M

(Source: Thinkorswim)

Taking a look at the implied volatility (red) and implied volatility skew levels of Macy's options may help determine if investors are bullish, neutral, or bearish.

Implied Volatility (IV)

30-Day IV Percentile

90-Day IV Percentile

Macy's Options

26.98%

76%

73%

What does this mean? This means that investors or traders are buying a very significant amount of call and put options contracts, as compared to the last 30 and 90 trading days.

Put IV Skew

Call IV Skew

May Options

Flat

Average

June Options

Flat

Average

As of today, there is an average demand from call buyers or sellers and low demand by put buyers or high demand by put sellers, all neutral to bullish over the next two months. To summarize, investors are buying a very significant amount of call and put option contracts and are leaning neutral to bullish over the next two months.

On the next page, let’s take a look at the earnings and revenue growth rates and the conclusion.

E = Earnings Are Increasing Quarter-Over-Quarter

Rising stock prices are often strongly correlated with rising earnings and revenue growth rates. Also, the last four quarterly earnings announcement reactions help gauge investor sentiment on Macy's’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for Macy's look like and more importantly, how did the markets like these numbers?

2012 Q4

2012 Q3

2012 Q2

2012 Q1

Earnings Growth (Y-O-Y)

4.28%

12.50%

21.82%

43.33%

Revenue Growth (Y-O-Y)

7.18%

3.79%

3.01%

4.31%

Earnings Reaction

2.77%

-2.24%

2.72%

-3.69%

Macy's has seen increasing earnings and revenue figures over the last four quarters. From these figures, the markets have had mixed feelings about Macy's’s recent earnings announcements.

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P = Excellent Relative Performance Versus Peers and Sector

How has Macy's stock done relative to its peers, J.C. Penney (NYSE:JCP), Nordstrom (NYSE:JWN), Dillard’s (NYSE:DDS), and sector?

Macy's

J.C. Penney

Nordstrom

Dillard’s

Sector

Year-to-Date Return

17.88%

-14.13%

8.58%

1.79%

16.75%

Macy's has been a relative performance leader, year-to-date.

Conclusion

Macy's provides highly demanded products to a wide range of consumers across the United States and other countries. The stock has been a strong performer and recent years and looks to be continuing this trend. Earnings and revenue figures have consistently risen but investors have expected a little more from the company. Relative to its peers and sector, Macy’s has been a performance leader, year-to-date. Look for Macy’s to continue to OUTPERFOR

Tuesday, September 10, 2013

Will Verizon Continue To Rise?

With shares of Verizon (NYSE:VZ) trading around $51, is VZ an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

Verizon is a provider of communications, information and entertainment products and services to consumers, businesses and governmental agencies. It operates in two primary segments: Verizon Wireless and Wireline. Verizon Wireless's communications products and services include wireless voice and data services and equipment sales, which are provided to consumer, business and government customers across the United States. Wireline's communications products and services include voice, Internet access, broadband video and data, Internet protocol network services, network access, long distance, and other services. As consumers and companies strive to communicate at increasing rates, Verizon stands to see a rising profits as a main provider. Look for rising communications, information, and entertainment to drive profits for Verizon.

T = Technicals on the Stock Chart are Strong

Verizon stock has witnessed a bullish run over most of the last few years. The stock has pulled-back after this run so it may need a bit more time before initiating its next move. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, Verizon is trading between its rising key averages which signal neutral to bullish price action in the near-term.

VZ

(Source: Thinkorswim)

Taking a look at the implied volatility (red) and implied volatility skew levels of Verizon options may help determine if investors are bullish, neutral, or bearish.

Implied Volatility (IV)

30-Day IV Percentile

90-Day IV Percentile

Verizon Options

21.50%

23%

21%

What does this mean? This means that investors or traders are buying a small amount of call and put options contracts, as compared to the last 30 and 90 trading days.

Put IV Skew

Call IV Skew

July Options

Flat

Average

August Options

Flat

Average

As of today, there is an average demand from call buyers or sellers and low demand by put buyers or high demand by put sellers, all neutral to bullish over the next two months. To summarize, investors are buying a small amount of call and put option contracts and are leaning neutral to bullish over the next two months.

On the next page, let’s take a look at the earnings and revenue growth rates and the conclusion.

E = Earnings Are Increasing Quarter-Over-Quarter

Rising stock prices are often strongly correlated with rising earnings and revenue growth rates. Also, the last four quarterly earnings announcement reactions help gauge investor sentiment on Verizon’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for Verizon look like and more importantly, how did the markets like these numbers?

2013 Q1

2012 Q4

2012 Q3

2012 Q2

Earnings Growth (Y-O-Y)

15.25%

-107.21%

14.29%

12.28%

Revenue Growth (Y-O-Y)

4.17%

5.66%

3.92%

3.69%

Earnings Reaction

2.76%

0.58%

2.37%

-2.94%

Verizon has seen mostly increasing earnings and revenue figures over the last four quarters. From these numbers, the markets have been pleased with Verizon’s recent earnings announcements.

P = Excellent Relative Performance Versus Peers and Sector

How has Verizon stock done relative to its peers, AT&T (NYSE:T), Sprint Nextel (NYSE:S), T-Mobile (NYSE:TMUS), and sector?

Verizon

AT&T

Sprint Nextel

T-Mobile

Sector

Year-to-Date Return

17.84%

5.64%

26.81%

15.95%

16.03%

Verizon has been a relative performance leader, year-to-date.

Conclusion

Verizon provides communications products and services through a variety of mediums to consumers and companies around the world. The stock has been on a strong move higher but is now digesting gains so it may need some time. Over the last four quarters, investors in the company have been pleased as earnings and revenue figures have been rising. Relative to its peers and sector, Verizon has been a year-to-date performance leader. Look for Verizon to OUTPERFORM.

Monday, September 9, 2013

The J.C. Penney Huge National Buy One, Get One Free Sale

J.C Penney Co. Inc. (NYSE: JCP) continues to face unprecedented drops in traffic and sales that, to some extent, caused its largest shareholder Bill Ackman to sell his 17.7% ownership at a massive loss. And there is not a single reason to believe that this revenue drop will reverse itself. J.C. Penney has been through two cycles of management, pushing out CEO Myron E. Ullman III in late 2012 and replacing him with Apple Inc.’s (NASDAQ: AAPL) Ron Johnson, only to bring back Ullman at the start of this year. It will take another several months to get a new chief executive officer. In the meantime, J.C. Penney’s balance sheet will be sucked dry of cash.

The retailer has one option, which is to do something unprecedented in its modern history — put every item at J.C. Penney on a “buy one, get one free” sale in September and hope for a surge of traffic. This would include everything from pajamas to watches. To extend the stampede, J.C. Penney can give every customer who buys something a 25% off coupon for any item bought during the holiday period, which now apparently begins as early as the first of October. The coupon program should bring in another stream of customers in the fourth quarter.

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J.C. Penney shares what the other doomed large U.S. retailer — Sears Holdings Corp. (NASDAQ: SHLD) — does. Its stores are ancient. It is caught between better run companies with stronger balance sheets, with Wal-Mart Stores Inc. (NYSE: WMT) and Target Corp. (NYSE: TGT) on the one side, and Costco Wholesale Corp. (NASDAQ: COST) and department store leader Macy’s Inc. (NYSE: M) on the other. J.C. Penney and Sears not only lack the capital to upgrade locations, they lack the time.

J.C. Penney’s same-store sales fell between 20% and 25% a quarter last year when compared to the same quarters in 2011. In the first quarter of this year, the drop continued at a rate of more than 15%. The fourth quarter, which is the most important for almost every retailer, is only weeks away. J.C. Penney cannot afford another holiday cycle in which its competitors steal share.

Goldman Sachs Group Inc. (NYSE: GS) and others have put $1.75 billion in the J.C. Penney bank account and claimed that it “enhanced its liquidity by entering into a $2.25 billion senior secured term loan facility.” Ullman said that he “expects to end the year in excess of $1.5 billion in overall liquidity.” The language was a bit vague, but based on J.C. Penney’s past cash burn rate, it appears to be a positive development.

What would a “buy one, get one free” program cost J.C. Penney? Its revenue run rate was $875 million a month in its most recent reported quarter. Is the risk to J.C. Penney 100% of that number? Almost certainly not. Some customers continue to come to J.C. Penney regularly, whether or not the retailer deserves it. A “buy one, get one free” sale most likely would sharply improve revenue temporarily. It is better to look at J.C. Penney’s “costs of goods sold,” mostly a measure of what it pays for inventory. The run rate per month for that number in the most recent quarter was $600 million. J.C. Penney’s largest risk is that this number would go up with a crush of new customers. So, the risk is into the hundreds of millions of dollars, brought down by the revenue from the increased sales.

Desperate times have always called for desperate measures. J.C. Penney can act desperately, and potentially do what almost no on thinks it can — save itself.

Sunday, September 8, 2013

Ten Companies Expected to Double Revenues in the Next Few Years

If you have analyzed the myriad earnings reports over the summer of 2013, the trend that you will notice is a lack of revenue growth from most major companies. Many have continued to grow earnings because of cost containment and share buybacks, but the problems in Europe have caused slower spending and growth in Asia and in emerging markets. That is the bad news. The good news is that some public companies would still be considered as extreme growth stocks. In fact, some companies are still doubling their revenues.

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24/7 Wall St. has evaluated many existing public companies to identify ones with high growth rates. With 2013 now in the second half, we wanted to look at a group of public companies that are expected to double their sales in the next few years. Our main focus is for companies expected to double sales by the end of 2016 from the end of 2012, but a couple may take until 2017 or so. Doubling sales at a time of slow economic expansion is very impressive whether it takes three and a half years or four and a half years.

In order to not have the deck stacked with small tiny companies that most people have never heard of, we tried to avoid repetitive industries. There almost always seems to be some small turnaround company or some smaller companies in biotech and software that are growing rapidly. We wanted to broaden the search for companies expected to double their revenues.

In some cases you will see that the company has itself projected that it plans to double its sales. In other cases, it is the group of analysts covering each company that are forecasting sales to double. Some of these public companies will double as soon as 2014, while others will not realize their doubling in sales until 2015 or 2016.

We would also warn that this rapid growth can come at an expensive price. We have shown a 52-week trading range on each public stock, and we have given a forward price-to-earnings (P/E) ratio for the fiscal year ahead so that you can see how Wall Street is valuing the stock based on current share prices.

The 24/7 Wall St. list of public companies expected to double sales in the next few years includes the following: Kona Grill Inc. (NASDAQ: KONA), LinkedIn Corp. (NYSE: LNKD), Noodles & Co. (NASDAQ: NDLS), Onyx Pharmaceuticals Inc. (NASDAQ: ONXX), Michael Kors Holdings Ltd. (NYSE: KORS), Questcor Pharmaceuticals Inc. (NASDAQ: QCOR), Tesla Motors Inc. (NASDAQ: TSLA), Under Armour Inc. (NYSE: UA), Workday Inc. (NYSE: WDAY) and Yelp Inc. (NYSE: YELP). Facebook Inc. (NASDAQ: FB) might as well be considered a runner-up here, but it was a direct competitor of LinkedIn in the selections.

We looked at past sales growth, expected or stated sales growth expectations ahead, where the stocks have traded and what their market capitalization rates are now, and we even gave a forward earnings projection to see how much you have to pay up for such strong growth. A detailed analysis of each company follows.

Kona Grill Inc. (NASDAQ: KONA) is the smallest growth chain by far of the companies we analyzed. Frankly, this may be tied to a doubling off of a smaller base since its market cap is a mere $100 million. At $12.35, its stock has a 52-week range of $7.80 to $13.90. Sales in 2012 were $96 million, and the 2013 growth might not indicate a doubling. It said at the start of August with earnings that its second-quarter restaurant sales increased 3.2% to $25.8 million and its same-store sales increased 2.5%. Berke Bakay, president and CEO, said, “The sales growth is a testament to the strength of our brand. … Our vision over the next five years is to double our sales, which translates to an approximately 15% compounded annual growth rate.” Kona trades at roughly 25 times expected 2013 earnings expectations.

LinkedIn Corp. (NYSE: LNKD) is the social network for professionals, and now the company wants to swoop its expansion down to the student level. This may come with a risk. It trades at $230.79 in a 52-week range is $94.75 to $244.00, and its market cap is almost $26 billion. The company already has doubled sales more than once and is expected to keep doing so. Revenue was $972 million in 2012, versus $522 million in 2011 and up from $243 million in 2010. It is widely expected that sales will double again by the end of 2015. Thomson Reuters has a consensus revenue target of $1.51 billion for 2013, and that is expected to be $2.14 billion for fiscal year 2014. In short, LinkedIn’s sales doubling should happen shortly before the end of 2014. Facebook would also be in this social media doubling camp as well, but LinkedIn actually is expected to grow faster than Facebook, according to analysts. LinkedIn is valued at a whopping 105 times expected 2014 earnings, versus a valuation of about 40 times expected 2014 earnings from Facebook.

Saturday, September 7, 2013

G-III Apparel Group: A Unique Opportunity In Apparel

G-III Apparel Group (GIII) continues its trend of beating earnings estimates. Ok, ok, we're being modest, they've been crushing earnings. In the July ended quarter, GIII beat earnings consensus by 70%, and in the previous quarter, the company smashed earnings by 200%.

After the strong 1Q performance, the stock is now up over 55% year to date. What's most impressive is that analysts are expecting continued robust earnings growth. Even if the company manages to meet EPS expectations (versus the previous trend of impressive beats) the upside is still over $60 per share.

GIII also happens to be one of the only remaining, reasonably priced, apparel companies left in the buyout frenzied market. The opportunities in the niche apparel markets are drying up quickly, which is a positive, as we think the limited supply will lead to higher buyout prices. We see GIII going for as much as $70 per share in a buyout scenario.

Quick overview

GIII got its start back in the late 1950s when Holocaust survivor, Aron Goldfarb, immigrated to the U.S., settling in NYC and starting up his outerwear company. Today, the company designs, manufactures and markets apparel and accessories for men and women. The company's categories include outerwear, dresses, swimwear, sportswear, women's suits, luggage, women's handbags, small leather goods and cold weather accessories. Its wholly-owned brands include Andrew Marc, Wilsons, and Vilebrequin.

The real beauty here is that GIII is a manufacturer of both licensed and owned branded apparel, as well as having a suite of retail outlets.

Source: GIII 10-Q

For its licensed brands, the company has relationships with Calvin Klein, Guess?, NFL, NBA, MLB, NHL, Cole Haan, Dockers, Jessica Simpson, Kenneth Cole, Levi's, Tommy Hilfiger, Ivanka Trump and many others. The company operates retail stores under the Wilsons Leather, Vilebrequin, Calvin Kle! in Performance and Andrew Marc names.

The latest

For fiscal 1Q, net sales increased 21% to $304.2 million, which came in better than expected by $16.3 million. EPS came in at $0.17 per share and beat estimates by $0.07, and last year's 1Q by $.10 a share. GIII raised its outlook for fiscal year 2014, now expecting sales for the full year to be about $1.61 billion and EPS of $3.30 on the low end. These EPS and sales figures will set five-year highs.

(click to enlarge)

Source: GIII

EBITDA for the full year is forecasted to grow 16% to 19% and come in between $132.3 million and $135.4 million. For fiscal 2Q, the company is forecasting net sales of approximately $620.0 million compared to $543.5 million in last year's 2Q. EPS is expected to come in at between $2.52 and $2.62 compared to $2.37 last year.

Company Tailwinds

A major tailwind for the company is margin improvement. In 2Q, gross margin rose almost 3 percentage points from 29.8% to 32.7%. The company has done a great job keeping costs down as revenues have grown. What's more is that its target is to get its operating margin to double digits, compared to the 7.2% for the trailing twelve months.

Wilsons Leather continues to be an exceptional performer for the company. When GIII bought Wilsons, sales per square foot averaged $250 and the stores were losing money. Now the business is generating sales of $350 a square foot and still growing. In 2Q of this year, comparable sales rose 13.7% and this is on top of a 12.7% gain last year.

GIII is expanding the Wilsons brand with 15 new full price stores that will be open before the Christmas holiday shopping season. These new stores will be differentiated from traditional Wilsons stores with their product mix, product quality, price points and in their overall look and feel.

GIII continues to see strong performance in its Calvin Klein licensed products.! The segm! ent of the Calvin Klein division that GIII is most excited about is the sportswear segment. In 2Q, sales rose 50% compared to last year. The company has been very successful in increasing the brand's penetration and exposure. Calvin Klein sportswear is now sold at 890 doors compared to 662 doors last year. In addition to sportswear, the following performed well during 2Q:

The Calvin Klein dress business continues to perform well in department stores. The dresses are sold at over 1,200 doors.Calvin's Klein's women's suits and separates grew by 70% over last year. The company was able to grow door count to 1,100 compared to only 800 last year.Calvin Klein handbag sales rose 40% over last year with improved margins.Calvin Klein Performance wholesale business grew 20% over last year. The door count is up to 1,100 compared to 1,000 last year.GIII continues to grow its partnership with the owner of the Calvin Klein brand - PVH (PVH).

Worth noting is that the average remaining tenure for the Calvin Klein licenses is eight to nine years. Other tailwinds for GIII include:

The team sports business is now a $100 million business and was nonexistent 5 years ago. Sales makeup is 50% sportswear and 50% coats. We see this business continuing to grow as the overall popularity of sports teams continues.Dresses from Eliza J continue to be a top seller at Nordstrom's (JWN) and other high-end retailers.Ivanka Trump showrooms will be opening in Q4. The line will be launching dresses, suit separates and swimwear.The biggest business for GIII remains outerwear and the company started shipping product at the end of Q2. GIII has approximately 30 licensed, owned and private label brands and a covers the entire spectrum of retailers from mass market to luxury.Vilebrequin was acquired in August of last year and the addition helped grow non-licensed revenues to $70 million in Q2 compared to $48 million last year without Vilebrequin. Vilebrequin sells swimwear, resort wear and related accessories through a network of company! -owned an! d franchised shops. To grow Vilebrequin, the company will be adding footwear to its shops, in particular flip-flops in all of the stores by November. The company is planning to grow Vilebrequin's presence in the U.S. and has been adding buildouts in key department stores. Furthermore, Vilebrequin's e-commerce site should be live in the next 60 days.

GIII's entry into the footwear market is well in line with its long-term plans to become a men's and women's head-to-toe apparel maker.

Investment Thesis

Even though GIII shares are up 57% year to date, we think the stock is still undervalued and has more room to run. In looking at GIII and other apparel manufacturing companies we see:

Source: Yahoo! Finance

From the table, GIII is the cheapest among the four. That's where we see the market as still mispricing GIII and the room for further upside. The company also has a very strong balance sheet, with only around $20M in long-term debt, and the remaining debt being seasonal.

If we narrow these comps down to some of GIII's fellow small-cap apparel peers, we see just how cheap the stock is. GIII trades at an 8.4x EV/EBITDA multiple, while QuikSilver (ZQK) trades at 16.2x, Iconix Brand (ICON) at 11.5x and Jones New York (JNY) 8.8x.

From an industry consolidator to being a victim of industry consolidation?

It all started back in '05 when GIII acquired Marvin Richards and Winlit on the same day. '07 brought about the acquisition of Jessica Howard and Eliza J., '08 saw the purchase of Andrew Marc and Wilsons Leather. The Wilsons Leather team helped propel GIII into the retail industry, including opening additional Wilsons Leather stores, as well as Andrew Marc outlets and Calvin Klein Performance stores.

2011 marked GIII's foray into the designing and manufacturing of sportswear under the Kensie name, and then in 2012 it acquired Vilebrequin, marking GIII's entry into the swimwear and resort wear.

Through the years, GIII was a serial acquirer, but the industry dynamics have changed, and we've seen the M&A market really start to heat up in the small-cap apparel market.

In May True Religion (TRGL) announced a buyout offer from TowerBrook Capital for $826 million. Also in May, Rue21 decided to sell itself to Apax Partners for $2.2 billion. Before that, in March, Hot Topic (HOTT) announced that Sycamore Partners was buying out it out for $600 million.

With the buyout premiums in place, the companies now trade at the following price to sales multiples:

If private equity likes RUE enough to buy the company at 1.1x sales, then they'll love GI! II. Over ! the past three years RUE has had an average 3% free cash flow yield, with its trailing twelve month FCF yield being less than 1%. Compare this to the $3.50 in FCF per share GIII has generated over the TTM, which is a free cash flow yield of 6.7%.

If private equity wants to snatch up GIII, we believe they will easily have to pay 0.8x sales, given the company's FCF generation, strong liquidity position and 15% return on equity.

That's over 30% upside. On the other hand, with the company's unique set up (manufacturing licensed and non-licensed brands, while also having retail stores) a 1.1x multiple wouldn't be unreasonable -- 80% upside.

Even without a buyout there's still value to be had

Assuming the rebounding economy can further drive apparel stocks higher, GIII should be one of the biggest benefactors of this. Its 2.4 beta will help. Year to date, GIII is already pulling away from the apparel industry.

(click to enlarge)

Let's take a look at how things might pan out for GII over the next year and a half -- assuming we don't see a buyout. Analysts expect 2015 EPS (ending Jan.) to come in at $3.90, and with a 16x P/E there's around 18% upside. But with the potential of a big beat, or a big miss, we ran a sensitivity analysis that shows if earnings miss 20% on the downside, the downside to the stock's price is only 6%, yet, if earnings beat 20% on the upside, the stock could be up 40% in less than 18 months.

(click to enlarge)

Bottom Line

One of the main things we like about GIII is its strong insider ownership. Management owns over 32% of the stock with CEO Morris Goldfarb accounting for most of that with 2.7 million shares. Joining management with notable owne! rship int! erest are small-cap focused hedge fund, Royce & Associates, with 2.3 million shares and the value-oriented Scopia Capital fund, owning 1.9 million shares.

This strong ownership should continue to support the company's hope to offer products in every major apparel category. As well, given the company's unique business model, strong free cash flow, minimal debt and expanding margins, the company would be highly attractive to a major apparel company or private equity.

Analysts are also bullish, with 8 of the 9 analysts following the stock having a "buy" rating. The average price target is $60, with the lowest target being $55. We see a buyout price of around $70, and in the worst case, with no buyout, our target price is $62.

Source: G-III Apparel Group: A Unique Opportunity In Apparel

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. (More...)

Friday, September 6, 2013

Does Coca-Cola Support All-Time Highs?

With shares of Coca-Cola (NYSE:KO) trading around $42, is KO an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

Coca-Cola is a beverage company that engages in the manufacture, marketing, and sale of nonalcoholic beverages worldwide. The company primarily offers sparkling beverages and still beverages. Its sparkling beverages include nonalcoholic ready-to-drink beverages with carbonation, such as carbonated energy drinks, and carbonated waters and flavored waters. The company's still beverages comprise nonalcoholic beverages without carbonation, including noncarbonated waters, flavored and enhanced waters, noncarbonated energy drinks, juices and juice drinks, ready-to-drink teas and coffees, and sports drinks. It also provides flavoring ingredients, sweeteners, powders for purified water products, beverage ingredients, and fountain syrups. Coca-Cola Company sells its products primarily under the Coca-Cola, Diet Coke, Coca-Cola Light, Coca-Cola Zero, Sprite, Fanta, Minute Maid, Powerade, Aquarius, Dasani, Glacéau Vitaminwater, Georgia, Simply, Del Valle, Ayataka, and I Lohas brand names. Consumers around the world love the products offered by Coca-Cola and enjoy them almost on a daily basis. Through its brands, Coca-Cola is able to reach a wide consumer base in just about every corner of the world that will continue to enjoy its products for years to come.

Top 10 Gold Companies To Watch For 2014

T = Technicals on the Stock Chart are Strong

Coca-Cola stock has seen a significant rise since reaching multi-year lows during the Financial Crisis. Currently, the stock is trading near all-time high prices established in 1998 and may see a strong push above them. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, Coca-Cola is trading above its rising key averages which signal neutral to bullish price action in the near-term.

KO

(Source: Thinkorswim)

Taking a look at the implied volatility (red) and implied volatility skew levels of Coca-Cola options may help determine if investors are bullish, neutral, or bearish.

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GIII

VFC

PVH

RL

Market Cap

$1.09B

$21.07B

$10.55B

$14.91B

Trailing P/E

18.69

19.07

30.81

20.82

Forward P/E

13.75

15.58

15.55

16.45

PEG Ratio

1.09

1.59

1.47

1.70

Price/Sales

0.76

1.92

1.61

2.14

Price/Book

2.53

4.07

2.55

3.99

EV/Sales

0.69

2.01

2.17

1.99

EV/EBITDA

8.43

12.14

14.59

10.20

Cash

$20.62M

$320.11M

$746.28M

$1.35B

Debt

$95.32M

$1.88B

$4.48B

$271.00M

Implied Volatility (IV)

30-Day IV Percentile

90-Day IV Percentile

Coca-Cola Options

17.05%

43%

39%

What does this mean? This means that investors or traders are buying a significant amount of call and put options contracts, as compared to the last 30 and 90 trading days.

Put IV Skew

Call IV Skew

May Options

Flat

Average

June Options

Flat

Average

As of today, there is an average demand from call buyers or sellers and low demand by put buyers or high demand by put sellers, all neutral to bullish over the next two months. To summarize, investors are buying a significant amount of call and put option contracts and are leaning neutral to bullish over the next two months.

On the next page, let’s take a look at the earnings and revenue growth rates and the conclusion.

E = Earnings Are Increasing Quarter-Over-Quarter

Rising stock prices are often strongly correlated with rising earnings and revenue growth rates. Also, the last four quarterly earnings announcement reactions help gauge investor sentiment on Coca-Cola’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for Coca Cola look like and more importantly, how did the markets like these numbers?

2013 Q1

2012 Q4

2012 Q3

2012 Q2

Earnings Growth (Y-O-Y)

-12.36%

13.92%

4.17%

0.83%

Revenue Growth (Y-O-Y)

-0.92%

3.76%

0.75%

2.73%

Earnings Reaction

5.68%

-2.71%

-0.6%

1.56%

Coca-Cola has seen increasing earnings and revenue figures for most of the last four quarters. From these figures, the markets have generally been pleased with Coca-Cola’s recent earnings announcements.

P = Excellent Relative Performance Versus Peers and Sector

How has Coca-Cola stock done relative to its peers, Pepsi (NYSE:PEP), Dr. Pepper Snapple (NYSE:DPS), Monster Beverage (NASDAQ:MNST), and sector?

Coca-Cola

Pepsi

Dr. Pepper Snapple

Monster Beverage

Sector

Year-to-Date Return

16.48%

20.94%

8.92%

6.89%

16.74%

Coca Cola has been a relative performance leader, year-to-date.

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Conclusion

Coca-Cola is one of the few global companies that is able to reach and satisfy consumers all over the world in just about every urban and rural area. The stock has had a strong bullish run in recent years that has taken it near all-time high prices. Earnings and revenue have been increasing for most of the last four quarters which has sent positive vibes to investors. Relative to its peers and sector, Coca-Cola has been one of the year-to-date performance leaders. Look for Coca-Cola stock to OUTPERFORM.