Earnings: The Long And Short Of It

By Neal Rau

Avoid being caught off guard, and prepare for the earnings being released by these companies before the news is out.

The following companies report earnings on Tuesday, October 29:

Electronic Arts Inc. (NASDAQ:EA) is scheduled to post Q3 earnings after the market close. Analysts are expecting the company to earn $0.12 per share, which would be $0.03 less than the $0.15 it earned a year ago in the same quarter. The company recently settled a lawsuit regarding current practices around how athletes' images, names and likenesses are used in videogames and on broadcast television. It could have implications about whether players would have a share in the millions in profits involved in college sports. EA said it would not be publishing a 2014 college football title, and will continue to mull the future of the company's massively successful franchise. However, some good news is that Electronic Arts' game Plants vs. Zombies 2 reached over 16 million downloads worldwide, making it number one in the Apple App Store in 137 countries worldwide. The stock has soared 76% YTD, but it has pulled back about 12% off the 52-week highs. Is the recent pullback a buying opportunity?

Investors need to be aware of price, and based on the Stock Traders Daily real-time trading report, the stock is close to a test of support. Shares of EA have fallen over 7% in the last month, and if the stock continues to move lower and tests support, we would be buyers near support. If support holds, we would expect a move higher and an eventual test of resistance. We would only be buyers near support, and it is not there yet, so we caution investors to be patient.

Gilead Sciences, Inc. (NASDAQ:GILD) is expected to report $0.48 per share after the market close, which would be $0.02 less than the $0.50 it earned in the same quarter a year ago. Gilead Sciences is the second-best performing drug stock in the Standard & Poor's 500 index over the past 2 years. The stock is up 90% YTD and over 11% in t! he last month. The company has a strong drug pipeline, especially with its cancer drugs. Should investors buy, sell or hold shares of GILD ahead of earnings?

Even if GILD announces much better numbers than analysts expect, it does not mean the stock will continue to rise. Price matters, and insiders have sold over 653,000 shares just in the last month. According to the real-time trading report offered by Stock Traders Daily, shares of GILD are getting close to a test of long-term resistance, and as a rule we are sellers if resistance is tested (not quite there yet). If the stock does test long-term resistance, and remains below resistance, we would expect a full oscillation down to support. However, resistance also acts as our risk control, and if resistance breaks higher, bullish signs would surface.

AFLAC Incorporated (NYSE:AFL) is expected to report $1.48 earnings per share when the company reports its third quarter numbers after the bell. If the company meets analyst expectations, $1.48 would be a decline of 16% from last year's $1.77 that it earned in the same quarter. The stock has been on a steady climb for the last few years, however one potential headwind is the weak economic conditions in Japan, as the Japanese market represents well over two-thirds of Aflac's profitability. The stock is up 22% YTD and up over 52% in the last two years. Is the stock a buy, sell or hold at current levels?

The stock is currently trading just under the 52-week high, and is close to testing long-term resistance. If the stock tests resistance, and remains below resistance, as defined in our real time trading report, Stock Traders Daily expects lower levels and a test of support. That would make AFL a sell/short at resistance, with risk controls in place if resistance breaks higher.

Genworth Financial Inc (NYSE:GNW) is expected to report $0.26 per share for the quarter, which would be a penny better than last year in the same quarter. The company reported its Q2 earnings data in June, which w! ere earni! ngs of $0.28 per share, $0.01 worse than the consensus estimate of $0.29, and revenues fell 1.3% YOY to $2.37 billion. Genworth Financial is expecting to offer an IPO for its Australia unit, which will most likely come next year. The stock is up 43% in just the last six months, and is trading near the 52-week high. Is the stock still a buy?

Even if Genworth Financial is able to beat estimates on Tuesday, it does not mean the stock will continue to rise, as stock price matters. Smart money could be looking to take some profits off the table. VP Kelly Groh sold 8,000 shares of the company's stock in a transaction that occurred on Monday, October 21. The shares sold at an average price of $14.00, for a total value of $112,000.00. Shares are trading at three-year highs, and close to testing long-term resistance. If the stock tests resistance, and remains below resistance, as defined in our real time trading report, Stock Traders Daily expects lower levels and a test of support. That would make GNW a sell/short at resistance, with risk controls in place if resistance breaks higher.

Navigating earnings can be tricky. Sometimes investors' earnings expectations are correct, but the stocks actually do the opposite of what they think it should have done after earnings, so our opinion based on price can help investors make more well-rounded and sound investment decisions.

Source: Earnings: The Long And Short Of It

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. (More...)

Business relationship disclosure: By Neal Rau for Stock Traders Daily and neither receives compensation from the publicly traded companies listed herein for writing this article.

Finding ETFs That Benefit From U.S. Dollar Woes

Top Undervalued Stocks To Buy Right Now

NEW YORK (ETF Expert) -- The U.S. dollar has certainly lost value since the Federal Reserve began printing greenbacks to purchase U.S. bonds.

On the other hand, most of the damage occurred at the onset of the Fed's quantitative easing program(s). Since the euro came under extreme pressure during the sovereign debt crisis of 2011, and since Japan's campaign to radically devalue its currency (yen) in 2012, PowerShares DB Dollar Bullish (UUP) has been remarkably stable.

On the other hand, current market participants have sniffed out a highly probable outcome over the next six months. Specifically, the idea of the Fed slowing down its bond purchases (a.k.a. tapering) is preposterous. In my July 30 feature, Bond ETFs Could Shock Pundits in the Months Ahead, I expressed serious doubts that the Bernanke-led Fed would begin tapering in 2013. I wrote: Who genuinely believes that unemployment is falling at a rapid enough clip to warrant a change in direction? Who actually sees the Fed's inflation measure rising at a fast enough pace to justify a policy modification? Last but not least, why would Bernanke want to rock the apple cart in any shape or form prior to his January departure? Most experts believed that I was way off base. In particular, my suggestion that the 10-year yield would likely be closer to a 2% to 2.25% range than a 2.75% to 3% range by year's end seemed like a long shot. Equally controversial, I advocated that taxable account owners revisit municipal bond opportunities like iShares National Muni (MUB). Today, however, a few more folks may be coming around to my way of thinking. The number of new jobs have been steadily dropping for months. The budget debate is only getting started. If Janet Yellen replaces Bernanke, the Fed may even try to print more money to buy bonds rather than pull away from the project. The 10-year yield is declining... Courtesy of StockCharts.com ...the U.S. dollar via UUP is testing 2011 lows... Courtesy of StockCharts.com ...and the prospects for munis in the intermediate term appear to be brightening. Courtesy of StockCharts.com I am not suggesting that investors abandon the stock ship for the supposed safer shores of fixed income. In actuality, the electronic printing of dollars to buy bonds is benefiting stocks and commodities as well. In particular, the economies of China and Europe may be recovering with less overt currency devaluation or obvious rate manipulation. It follows that funds like iShares Australia (EWA) may benefit from greater internal demand on the mainland. Additionally, broader-based international assets like Vanguard All World excl U.S. (VEU) and iShares MSCI EAFE Small Cap (SCZ) may figure prominently in any year-end running of the bulls. Follow @etfexpert This article was written by an independent contributor, separate from TheStreet's regular news coverage.

Are Tesla Shares Finally About to Slow Down?

While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a closer look at particularly stock-shaking analyst upgrades and downgrades -- just in case their reasoning behind the call makes sense.

What: Shares of Tesla Motors (NASDAQ: TSLA  ) slipped 2% in early Wednesday trading after Baird downgraded the electric vehicle maker from outperform to neutral.

So what: Baird analyst Ben Kallo left his price target on the stock at $187 per share -- representing about 3% worth of downside to yesterday's close -- implying that Tesla's risk/reward at this point is particularly unattractive. While Kallo applauds management's recent successes -- Model S, breakthrough battery technology, strong brand appeal -- he believes that the stock is now priced for flawless execution going forward, significantly limiting investor upside.

Now what: Kallo says that the next couple of years or so will be very telling ones for Tesla. "TSLA has several significant milestones over the next 18 months including continued production ramp and the introduction of the Model X," said Kallo. "We believe solid execution on both of these fronts is already priced into the stock, and any hiccups in execution present stock price risk in the near to intermediate term." With the stock up a staggering 560% in 2013 and trading at a price-to-sales ratio of 17, it's tough to argue that there's a wide margin of safety built into the valuation. 

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Should You Dip Into Dunkin’ Brands After Earnings?

Victor Mora

With shares of Dunkin' Brands (NASDAQ:DNKN) trading around $47, is DNKN 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

Dunkin' Brands owns, operates, and franchises quick service restaurants under the Dunkin'' Donuts and Baskin-Robbins brands worldwide. The company operates in four segments, including Dunkin' Donuts U.S., Dunkin' Donuts International, Baskin-Robbins International, and Baskin-Robbins U.S. Its restaurants offer coffee, donuts, bagels, ice cream, frozen beverages, baked goods, and related products. The increasing popularity of the product offerings by Dunkin' Brands is fueling excellent growth for the company.

On Thursday morning, Dunkin’ Brands, the parent company of Dunkin’ Donuts and Baskin-Robbins, reported earnings results for the third quarter ended September 28, 2013. Dunkin’ Donuts U.S. comparable store sales grew 4.2 percent and the company added 222 net new restaurants worldwide including 81 net new Dunkin’ Donuts in the U.S. ”Both Dunkin’ Donuts and Baskin Robbins U.S. continue to have excellent momentum and delivered another quarter of strong comparable store sales and net new restaurant growth,” said Nigel Travis, Chairman and Chief Executive Officer, Dunkin’ Brands.

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T = Technicals on the Stock Chart are Strong

Dunkin' Brands stock has been trending higher in the last several years. The stock is currently trading slightly below all time high prices but looks ready to head higher . 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, Dunkin' Brands is trading above its rising key averages, which signal neutral to bullish price action in the near-term.

(Source: Thinkorswim)

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

	Implied Volatility (IV)	30-Day IV Percentile	90-Day IV Percentile
Dunkin' Brands Options	21.80%	20%	19%

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
November Options	Flat	Average
December 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 Dunkin' Brands’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for Dunkin' Brands look like and more importantly, how did the markets like these numbers?

	2013 Q3	2013 Q2	2013 Q1	2012 Q4
Earnings Growth (Y-O-Y)	10.81%	24.24%	16.00%	131.50%
Revenue Growth (Y-O-Y)	5.83%	5.86%	9.45%	-4.04%
Earnings Reaction	-0.73%*	-1.73%	3.66%	2.04%

Dunkin' Brands has seen increasing earnings and revenue figures over the last four quarters. From these numbers, the markets have been upbeat about Dunkin' Brands’s recent earnings announcements.

* As of this writing

P = Excellent Relative Performance Versus Peers and Sector

How has Dunkin' Brands stock done relative to its peers, Starbucks (NASDAQ:SBUX), McDonald’s (NYSE:MCD), Yum! Brands (NYSE:YUM), and sector?

	Dunkin' Brands	Starbucks	McDonald’s	Yum! Brands	Sector
Year-to-Date Return	43.49%	47.44%	7.40%	-0.68%	23.14%

Dunkin' Brands has been a relative performance leader, year-to-date.

Conclusion

Dunkin' Brands provides delicious items that fulfill the sweet cravings of many consumers. A recent earnings release has investors expecting a little more from the company. The stock has been exploding to the upside and is currently trading slightly below all time high prices. Over the last four quarters, earnings and revenue figures have been rising which has produced upbeat investors in the company. Relative to its peers and sector, Dunkin’ Brands has been a year-to-date performance leader. Look for Dunkin’ Brands to OUTPERFORM.

What Microsoft’s new CEO should do

(Editor's note: Dan Ferris, an analyst at Stansberry & Associates, asserts that Microsoft's outgoing CEO Steve Ballmer has been stingy sharing free cash flow with Microsoft shareholders. Here's what Ferris would like to see Microsoft's next CEO do.)

Microsoft expects to have a new CEO by the end of the year. Let's not waste time guessing who it might or ought to be. Let's make it clear what the new CEO should do on his/her first day at work.

Microsoft isn't a consumer PC company anymore. It gets more than 60% of its sales and 70% of its profits from selling software to small, medium, and large businesses. Microsoft isn't Apple. Microsoft is a business software company – and a great one.

Context: Why some shareholders also want Bill Gates out.

It has 16 businesses that do $1 billion or more a year in sales. Some grow at double-digit rates. These and other Microsoft ventures gush tens of billions in cash flow every year. You've probably never even heard of some of these billion-dollar businesses: SQL Server, System Center, Sharepoint, Lync... These are business-software tools. Information technology professionals can't do their jobs without them.

Microsoft has its problems, but its biggest one is rarely mentioned: It doesn't know what to do with all the money it makes. That, I believe, is the real reason its stock price never seems to go anywhere.

Microsoft has wasted nearly $22 billion on three terrible acquisitions since 2007. It paid $6 billion for online marketing services firm aQuantive – and wrote the entire investment off as a total loss last year. It paid $8.5 billion for Internet phone company Skype, which adds little to Microsoft's massive bottom line. And now it's paying over $7 billion for Nokia – a dying brand whose sales plummeted another 32% in the first half of this year.

Microsoft should listen to co-founder and chairman Bill Gates' good friend Warren Buffett, who reminds us, "Most turnarounds don't." Nokia hasn't made money in three yea! rs. Microsoft won't turn it around. It's just another expensive dud.

For all its genius at software, Microsoft is lousy at reinvesting its huge profits. The solution is simple. Pay out more in dividends and share repurchases. Microsoft holds $70 billion offshore, as if paying U.S. corporate taxes is worse than Microsoft's huge, costly acquisitions. It should bring the cash home and pay it out to shareholders.

Microsoft should also dedicate 50% or more of its annual excess cash flow to dividends and share buybacks. That'll help discipline Microsoft against more waste, cause its share price to soar, and reward shareholders of the world's greatest software firm, accordingly.

About the author: Dan Ferris is a value analyst for Stansberry & Associates Investment Research and is the editor of two monthly investment research publications, The 12% Letter, an income-focused research advisory which looks for the market's best dividend-growth stocks and Extreme Value which focuses on the safest stocks in the market: great businesses trading at steep discounts. Dan's strategy of finding safe, cheap, and profitable stocks has earned him a loyal following – as well as one of the most impressive track records in the industry.

5 Best Heal Care Stocks To Invest In 2014

Small cap Natural Grocers by Vitamin Cottage (NYSE: NGVC) and mid cap Sprouts Farmers Market Inc (NASDAQ: SFM) are taking aim at natural and organic foods supermarket giant Whole Foods Market (NASDAQ: WFM), but do either of these stocks have what it takes to take on the the king of organic retailing? Whole Foods Market was founded in Austin way back in 1978 by a�twenty-five year old college dropout and a twenty-one year old�at a time when there were only a handful of natural or organic�supermarkets in the country. Today, Whole Foods Market�has 364 stores in the United States, Canada and the United Kingdom���which are sometimes referred to as ��hole Wallet��r ��hole Paycheck��given how much it costs to shop there.

However, Whole Foods Market is not the only natural or organic focused supermarket chain hoping to take your ��hole wallet��or ��hole paycheck:��/p>

5 Best Heal Care Stocks To Invest In 2014: Engineering.com(EGN.V)

Engineering.com Incorporated engages in the development and ownership of engineering.com Website and Internet based business. The company develops and publishes content and services, including engineering videos, job postings, engineering games, message boards, and calculators. It offers hosted and deployed engineering software and services to technology inventors, manufacturers, educational institutions, and consulting engineers. In addition, the company distributes CATIA, a CAD modeling system to the education market, as well as sells advertising on its Website. Further, it owns and maintains Collaboration Suite, a proprietary collaborative engineering application, which provides on a hosted basis. The company is based in Mississauga, Canada.

5 Best Heal Care Stocks To Invest In 2014: Palladon Ventures Ltd.(PLL.V)

Palladon Ventures Ltd., through its interest in CML Metals Corporation, involves in the development of Iron Mountain iron ore project located to the west of Cedar City, Utah. The company was incorporated in 1980 and is based in Vancouver, Canada.

Top 5 Energy Stocks To Own For 2014: Big Yellow group(BYG.L)

Big Yellow Group PLC, a real estate investment trust, engages in the provision of self storage and related services in the United Kingdom. The company also offers property management, construction management, and general partner services. It has a portfolio of approximately 63 stores primarily located in London and the South East. Big Yellow Group PLC was founded in 1998 and is headquartered in Bagshot, the United Kingdom.

5 Best Heal Care Stocks To Invest In 2014: Fortegra Financial Corporation (FRF)

Fortegra Financial Corporation, an insurance services company, provides distribution and administration services primarily in the United States. The company�s Payment Protection segment delivers credit insurance, debt protection, warranty and service contracts, and motor club solutions under the Life of the South, Continental Car Club, United Motor Club, and Auto Knight Motor Club brand names to consumer finance companies, regional banks, community banks, retailers, small loan companies, warranty administrators, automobile dealers, vacation ownership developers, and credit unions. This segment specializes in providing products that protect consumer lenders and their borrowers from death, disability, or other events that could impair their borrowers' ability to repay a debt. Fortegra Financial Corporation�s Business Process Outsourcing segment offers various administrative services under the Consecta and Pacific Benefits Group Northwest, LLC brand names to insurance and o ther financial services companies. This segment�s services include sales and marketing, electronic underwriting, premium billing and collections, policy administration, claims adjudication, and call center management services. The company�s Brokerage segment sells specialty property and casualty, and surplus lines insurance to retail insurance brokers and agents, and insurance companies under the Bliss & Glennon, eReinsure.com, Inc., and South Bay Acceptance Corporation brand names. This segment also provides its clients the ability to obtain various types of commercial insurance coverage outside of their core areas of focus. In addition, it offers insurance underwriting services as a managing general agent for specialized insurance carriers. The company was formerly known as Life of the South Corporation and changed its name to Fortegra Financial Corporation in 2008. The company was incorporated in 1981 and is based in Jacksonville, Florida.

5 Best Heal Care Stocks To Invest In 2014: NET Servicos de Comunicacao S.A.(NETC)

Net Servicos de Comunicacao S.A., through its subsidiaries, provides cable television, Internet access, and voice services in Brazil. It offers cable television services under the ?NET? brand name through various cable networks located in the largest cities of Brazil. The company also offers broadband Internet access services under the ?NET VIRTUA? brand name by using Embratel's IP backbone infrastructure. In addition, it provides voice services under the ?NET FONE VIA EMBRATEL? brand name jointly with Embratel. Further, the company offers integrated video, broadband, and voice services. Net Servicos de Comunicacao S.A. was founded in 1994 and is headquartered in Sao Paulo, Brazil.

As JPMorgan Goes So Goes The Market

JPMorgan Chase is a metaphor for the stock market in the sense that while still paying mightily for the financial world's sins of commission it will share in a zippy economic setting likely to unfold.

Morgan weathered the storm better than Citigroup, while the likes of Bear Stearns, American International Group, Merrill Lynch and a host of mortgage insurers and packagers of housing paper like Washington Mutual were merged out for a song or required massive cash infusions from the Federal Reserve and U.S. Treasury.

As financial assets rebounded from their panic lows early in 2009, regulators like the Justice Department, SEC and a host of state attorneys general sharpened knives, sued for tens of billions and won court cases or settled with their defendants.  The bill for Morgan could reach $30 billion by year end 2014.  This is over 1½ year's earnings, and we shareholders will have experienced a haircut to book value near $8 a share.

But, TARP assistance funds largely have been repaid with interest. The federal government may lose some capital on the General Motors bailout, but GM is hearty, profitable and a solid world player with a respected line of new model trucks and cars. I don't fully understand why regulators demand and get tens of billions from JPMorgan Chase and its ilk. After all, no senior bankers were indicted for criminal fraud and then jailed.

Awaiting JPM's September quarter's report, I mused over the sheer size and scope of Morgan. It reminded me of the old Standard Oil of New Jersey which bestrided the oil sector like a colossus; finally it was broken up by the Justice Department. Talk about too big to fail! Rockefeller's domain was a cornucopia of asset values – oil reserves in the ground, cash flow, earnings power and dividend paying capacity.

Ma Bell was dismantled in the sixties but kept its long lines franchise.  Today, both AT&T and ExxonMobil are polite investments but are structurally incapable of outperforming. AT&T has too much landline business, slowly withering away and XOM is troubled replacing oil reserves year over year.

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I can imagine how you break up JPM, but is it worth the government's efforts? The best control is indirect control. You keep raising reserve requirements against earnings assets, keeping leverage to a respectable ratio. Below 15:1 rather than 25:1 makes sense.

The enormity of this colossus shouldn't go unremarked:  Shareholder equity of $196 billion, headcount of 255,000 and total assets of $2.46 trillion. The stock, like many other banks, sells at book value before intangibles, but there's not much free capital left for buybacks.

JPMorgan Chase's 16-page quarterly report is chock-full of statistics, ratios and year-over-year comparisons as well as sequential quarterly results. The numbers come fast and furious, complicated by releases of loss reserves in almost every segment of the bank's operations. The initial reading left me nonplussed.

Could I rely on management's pronouncement that "real" earnings were $1.42 a share, excluding litigation expenses and reserve releases? Maybe yes, maybe no. What was eerily missing from the density of the report was any feed-out on how each sector of the bank's business might fare going forward, quarterly, annually, whatever. How was capital going to be allocated to each major earnings sector? In short, what were areas of strength or softness? The silent message is do your own your homework.

OK. I dug in, amazed at the runoff in assets in the mortgage sector, largely from the peaking of mortgage refinancing and some sloughing off currently of home mortgage writing. The numbers are enormous, but are squeegeed out by loss reserve reversals in the billions.

Mortgage banking revenues declined $1.7 billion to $2 billion. Non-interest revenue declined $1.6 billion to $877 million. Loss provisions dropped by $1.5 billion. Mortgage production pretax income was minimal, dropping almost a billion, year-over-year. These are enormous shrinkages in the face of mortgage application volume dropping 45% year-over-year and 38% sequentially.  Prime home mortgages are tagged near 4.5%, not the 3% over 6 months ago.

In the bank's real estate portfolio, again, credit loss provisions swung by $1.5 billion.  Allowance for loan losses in mortgage banking dropped from $11.3 billion to $7.7 billion or from 4.6% to 2.4% of loans. I'm untroubled by such earnings management just so long as the country doesn't lapse into a no-growth setting next year or two.  It's hard to see the loan loss ratio cut much more.

Likewise, in the credit card and autos sector, Morgan experienced spread compression and flattish revenues offset by loss reserve flowbacks. Another major profit center, consumer banking, also showed lower revenues, spread compression and loss reserve flowbacks of over $2 billion, year-over-year.

3 Stocks Warren Buffett Could Love in This Market

Some of the best minds in the business believe that stocks are fairly and fully valued today.

Warren Buffett was the first making the pronouncement. The Oracle of Omaha known for his value style of investing isn't seeing many buying opportunities at the moment. Next up is famed hedge fund manager Julian Robertson. He too sees a market at full price with little room for improvement.

Then there is little report from Societe General (SCGLY); it says the market is likely to plunge in early 2014. Citing market prices that have reached a peak with nowhere to go but down, the bank says that Federal Reserve tapering will be the trigger for 15% move lower.

I suppose we should just throw in the towel and pack it in until things change.

Wait! Time to Go Micro

No hold on just a minute. These proclamations from some impressive sources may be scary and all, but they are macro in scope.

That means there are several micro stories that can do well irrespective of what happens with the rest of the market.

For example at the end of August, I found a little stock called INSYS Therapeutics (INSY) The company showed up as a top-rated stock using a stock-rating system based on something I call the P/E Gap – the difference between a stock's P/E ratio and its expected profit growth rate.

Since Sept. 1, INSY is up 78% as of early trading on Oct. 8. Those are huge gains and gains that can still be found in a market that is supposedly fully valued.

The PE Gap approach works because it identifies micro opportunities based on pricing inefficiencies. These pricing inefficiencies ultimately get corrected with the end result on the long side being significant gains.

Here are three stocks that are highly rated according to my P/E Gap approach ready to zoom higher in a fully valued market, and would make Warren Buffett sit up and take some notice:

DreamWorks Animation

Even if you assume that the market is fairly valued, there are certain industries that project very well over the coming 12 months. One space in particular to watch is the film and movie industry. As the consumer gains more confidence, movie-going will see strong and growing sales that can propel stocks in that group higher.

Specifically, companies in the animation space can seem to do no wrong. Put up a family-friendly animated film and you have the chance for a blockbuster. There are risks of course, but the formula is tried and true. That bodes well for DreamWorks (DWA) The company rated highly at the end of September using the P/E Gap approach. Analysts expect the company to grow profits next year by more than 40%. With shares trading for just 30 times 2014 estimated earnings, look for the stock to rally from current prices even in a fairly valued market environment.

Ryland Group

With interest rates remaining at historically low levels, look for the homebuilder industry to continue to put up strong numbers in coming quarters. Yes, stocks in the group have rallied, but the market put the brakes on this summer under the threat of higher mortgage rates.

Shares of Ryland (RYL) peaked at $50.42 per share. After a sharp correction, you can now buy the stock for under $40 per share. In other words, the expected macro correction has already happened here. At the same time, earnings numbers keep on surprising in a positive way. Ryland has crushed estimates in each of the last four quarters. With shares trading for 10 times 2014 estimated earnings, the stock is a bargain. I wouldn't worry about a fully valued market here until the earnings multiple expands greatly.

United Continental

The airline industry is a good example of where the micro trumps the macro. Stocks may be fully valued in general, but that has little to no impact on the leverage no being generated by airline companies. Planes are full, fees are rocketing higher, and there is less competition. The story just keeps getting better and while stocks in the airline industry have appreciated greatly there is more meat on the bone.

Case in point is United Continental (UAL). Analysts expect the company to grow profits by 66% in 2014. At current prices shares trade for seven times 2014 estimated earnings. Now that's a bargain Warren Buffett would find attractive. You should too, no matter the current valuation of the overall market

Starting a business requires smart risk-taking

Q: "Did you see that that fancy new organic grocer is closed? How long were they open, 4 months? I can't believe it – they must have sunk a million bucks into that place." — Jay

A: More like $2 million.

For the past few months, in the downtown neighborhood where my office is, folks were all atwitter about the new startup market that was moving into the old warehouse on the corner. Apparently, they were going to challenge the Whole Foods market that sits a few blocks away.

The new grocer seemed to spare no expense. Even before opening the doors, they rented several offices in my building for back-end support, the warehouse was gutted and completely remodeled, the logo and branding were top-notch.

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After the hoopla around the grand opening died down, my youngest daughter, who was working as my assistant this summer, and I went over the place for lunch a few times. It was unbelievable:

• The prices were unbelievable — unbelievably expensive. If you think it's pricey to shop at Whole Foods, your toes would curl at the prices this place tried to charge.

• I couldn't believe how little food and produce the place actually stocked. Have you ever walked into a convenience store, only to be surprised at how few shelves it has, how empty and cavernous the place feels, and how little inventory is there? Well, that was this place, times ten. And overpriced to boot.

• They had unbelievably bad service. Not enough help and employees not trained well.

If you think about it, this was really a bad idea for a business. In theory, going up against a market leader like Whole Foods might be a good idea, but only if you can do it right and offer something the leader does not offer – better prices, better selection, better location.

Our new market was worse at all three of these things: More expensive, worse selection, mediocre location. And clearly they tried to take on the lead! er without the capital needed to do so. One time I went in there and the deli counter was closed. I asked an employee, "What's up with that?" and he said they couldn't afford to buy meat that week.

It's bad enough to start a business with a bad plan and lacking even the money necessary to implement that bad plan, but in this case, what really galls me is that the business geniuses behind this startup dropped $2 million (per the local papers) on this ill-conceived behemoth.

Look, we all know that entrepreneurship requires risk-taking. And that's a good thing, because risk is where the juice is. Risk makes the small business game more fun. Big risks can lead to big rewards.

But not all risks are created equal.

One thing I have learned about great entrepreneurs over the 15 years I have been writing this column is that they are smart risk takers. Sure, they know there are times for big, bold risks, heck they would not be where they are if they didn't take a huge risk or two at some point or another.

But usually, the big bet is preceded by a series of smaller, far more prudent risks. The small risks set up the big risks. Small risks are used most often to test the waters, to see if the idea works in the marketplace as well as it does in the entrepreneur's head. A smaller risk can be used to refine an idea, to get it ready for it's close up, to hone it until it is time to roll it out big. And by then, it won't seem like such a big risk anyway after all, because the entrepreneur has tested the idea, knows what to expect, and is prepared for any eventuality.

But dropping a ton of dough (or time or reputation) on a new idea that hasn't been fully vetted? Count me out, and I hope we count you out too.

Today's tip: The Hartford recently launched its Small Business Success Study, and it offered up some pretty interesting results:

• Not surprisingly, 63% of small business owners would not take a job working for someone else – even if they knew they could be just as! successf! ul.

• And when the owners says that their business is going well, that number jumps to 82%

• Of those small business owners who are well-informed about the Affordable Care Act, 38% say they plan to stop future hiring.

Steve Strauss is a lawyer specializing in small business and entrepreneurship. His column appears Mondays. E-mail Steve at: sstrauss@mrallbiz.com. An archive of his columns is here. His website isTheSelfEmployed.

Iron Mountain Drops as Barclays Says REIT Conversion Unlikely

Shares of Iron Mountain (IRM) have dropped today after Barclays said the company’s conversion into a real-estate-investment trust is unlikely to succeed.

The downgrade comes following yesterday’s announcement that that Iron Mountain’s CFO, Brian McKeon, would exit that position leave the company at the end of the month. He will remain at the company until the end of the year to help with the transition. Barclays’ analyst Manav Patnaik believes that’s a sign that a REIT conversion won’t happen. He writes:

It has been 4-6 months since IRM received the "tentatively adverse" ruling from the IRS and the REIT working group was formed. We viewed our 30% conversion probability as cautious, and the announced CFO departure gives us a catalyst to lower it to 10%, which is at the low end of the market's estimated range of10-20%…

Our lower-than-historical average applied multiples are based on our view that increasing enterprise mobility, along with improvements in cloud security, will precipitate a secular decline (albeit a 'slow bleed' for now) of physical storage in favor of cloud storage. Assuming a 5-7 year statute of limitations, an inflection point that makes this "bleed" accelerate is our concern – and hence a lower multiple. We estimate that fundamental downside, assuming IRM is unsuccessful in converting to a REIT, is $21 – based on FY14E.

With that, Patnaik cut Iron Mountain to Underweight from Equal Weight with a price target of $23.

Shares of Iron Mountain have fallen 2.3% to $25.72 today, while comparable have been mixed. Leidos Holdings (LDOS) has ticked up 0.6% to $46.28 and Amdocs (DOX) has risen 0.8% to $37.20. Maximus (MMS), on the other hand, has fallen 1.2% to $46.22 and Xerox (XRX) is off 0.3% to $10.62.

UPDATE:

Analyst Manav Patnaik reached out to me after the close on Oct. 11 to clarify that the downgrade is not solely based on the CFO’s exit. This is what he said:

As you write in the second paragraph, I am not solely basing Mckeon's departure as a sign that a REIT conversion won't happen. I have other reasons for my revised conversion probability. The news of McKeon's departure simply gave me a timely reason to publish them; that's what I meant in my report when I say: "…gives us a catalyst…"

Top 10 Bank Companies To Invest In 2014

 

Looking beyond Yellen: Embracing the Fed facelift

Bloomberg News

Much of the media attention surrounding President Barack Obama's selection of Janet Yellen as the next chairman of the Federal Reserve has focused on Ms. Yellen's views and the potential changes she could make to Fed policy. While these are extremely important points to consider in light of her nomination, the changing composition of the central bank's board of governors is also an important issue to take into account when predicting the future direction of the Fed.

Top Undervalued Stocks To Own Right Now

If Ms. Yellen is confirmed by the Senate, she will replace Ben S. Bernanke as chairman, and her confirmation would leave a vacancy on the board of governors for a vice chairman's position. In addition, two of the board's seven members — Sarah Bloom Raskin and Elizabeth Duke — have resigned, and Jerome Powell's term expires on Jan. 31, leaving a total of four vacancies on

Stocks To Watch For October 4, 2013

Top 5 Cheap Companies To Watch For 2014

Some of the stocks that may grab investor focus today are:

Comtech Telecommunications (NASDAQ: CMTL) reported upbeat fiscal fourth quarter results and issued a strong full-year outlook. Comtech shares jumped 11.12% to $26.77 in the after-hours trading session.

Forest Oil (NYSE: FST) announced its plans to sell its oil and gas assets located in the Texas Panhandle for $1 billion. Forest Oil shares surged 12.13% to $7.12 in the after-hours trading session.

Shares of Pandora (NYSE: P) rose 1.17% in after-hours trading after Lone Pine Capital reported a 5.3% passive stake in the company. Pandora shares gained 1.17% to $26.75 in after-hours trading.

Xyratex (NASDAQ: XRTX) reported a drop in its third-quarter profit. However, the company issued downbeat forecast for the fourth quarter. Xyratex shares tumbled 7.83% to $11.06 in the after-hours trading session.

NeoStem (NYSE: NBS) priced an underwritten public offering of 5,000,000 shares of common stock at an offering price of $7.00 per share. NeoStem shares dipped 9.44% to $7.10 in after-hours trading.

Posted-In: Stocks To WatchEarnings News Guidance Offerings Pre-Market Outlook Markets Trading Ideas

(c) 2013 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

  Around the Web, We're Loving... Petition urges Wal-Mart, McDonald's to pay more Obama's Syria Waffle Huge Blow to US Credibility in Mideast Microsoft Buys Nokia Phone Unit for $7.2B - And CEO? What Should You Know About AMZN? Most Popular Carl Icahn's Top Six Positions The Government Shut Down May Be Your Next Great Trade Tesla Model S Catches Fire - Causes Stock To Dip Windows Phone Sales Near Double Digits In Key European Markets (MSFT) Zalicus Shares Nosedive Following News of 1-for-6 Reverse Split Five Stocks Making Moves Under $10 Related Articles (CMTL + FST) Stocks To Watch For October 4, 2013 UPDATE: Societe Generale Downgrades Forest Oil on Concerns Over Debt Leverage, Drilling Inventory Forest Oil to Sell Permian Basin Acreage for $35M, to Keep Acres in Pecos, Reeves Counties Comtech Telecommunications Corp. Receives $51.1 Million Contract to Provide the Next Phase of a Telecommunications System for Use by an African Government View the discussion thread. Partner Network #marketfy-ae-block { display: none; border: 2px solid #0a3f75; overflow: hidden; width: 300px; height: 125px; text-align: center; background-color: #45719E; position: relative; z-index: 1; } #marketfy-ae-block a { display: block; width: 300px; height: 125px; position: relative; z-index: 2; color: #ffffff; text-decoration: none; } #marketfy-ae-block-countdown-text { color: #f9fc99; padding: 0px 0 0 0; font-size: 19px; font-weight: bold; line-height: 19px; } #marketfy-ae-block-countdown-text-start { font-size: 12px; } #marketfy-ae-block-countdown { padding: 5px 0 5px 0; font-size: 26px; } #marketfy-ae-block-signup { padding: 5px 47px; } #marketfy-ae-block-signup:hover { background-color: #457a1a; } #marketfy-ae-block #marketfy-ae-block-logo { display: block; padding: 3px 0 0 0; margin: 0; } #marketfy-ae-block-logo { text-indent: -9999px; } #marketfy-ae-block-free { display: block; position: absolute; top: 7px; right: -23px; width: 80px; height: 16px; line-height: 16px; text-align: center; opacity: 1; -webkit-transform: rotate(45deg); -moz-transform: rotate(45deg); -ms-transform: rotate(45deg); transform: rotate(45deg); font-size: 13px; font-weight: normal; color: #333333; background-color: yellow; z-index: 500; text-shadow: 1px 1px #999999; } #marketfy-ae-block-arrow { position: relative; width: 60px; height: 60px; z-index: 10; margin: -80px 0 13px -21px; } #marketfy-ae-block-arrow img { height: 60px; width: auto; } Marketfy's International
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Top 5 Financial Companies To Invest In Right Now

LONDON -- I'm looking at some of your favorite FTSE 100 companies and examining how each will deliver their dividends.

Today, I'm putting iconic high street retailer�Marks and Spencer�Group� (LSE: MKS  ) under the microscope.

Dividend history: cut No. 1
All was rosy with M&S in the mid-1990s. Within its final results for the year ended March 1998, the company was able to toast five-year earnings-per-share growth of 62% and dividend growth of 77%. The 1997-1998 dividend was covered around twice by both adjusted and statutory EPS -- a healthy level of cover, you might think, with little imminent risk to shareholders' income.

However, M&S suffered a terrible second half the following financial year. Profits collapsed, the final dividend was held flat, and the total dividend for the year (14.4 pence) was barely covered by adjusted EPS and uncovered by statutory EPS.

Top 5 Financial Companies To Invest In Right Now: Singapore Exchange Limited (S68.SI)

Singapore Exchange Limited operates as an integrated securities and derivatives exchange in Singapore and related clearing houses. The company provides listing, trading, clearing, depository, market data, and connectivity services; and member services and issuer services for the securities and derivatives market, as well as counterparty guarantee services. Its security products include stocks, American depository receipts, business trusts, company warrants, global depository receipts, real estates investment trusts, securities borrowing and lending, stapled securities, certificates, exchange traded funds, exchange traded notes, extended settlement, and structured warrants; and fixed income products comprise retail bonds, retail preference shares, SGS bonds, and wholesale bonds. The company�s derivative products include equity index, interest rates, and dividend index; commodities comprise agriculture, energy, and metals; and bulk commodities include freight, foreign excha nge forwards, interest rate swaps, and oil. It also operates SGX AsiaClear, a clearing platform for over-the-counter traded financial derivatives for technically specified rubber 20 (TSR20) rubber contract, bulk commodities, freight, interest rate swaps, and oil derivatives, as well as operates as a commodity exchange. In addition, the company provides data and information services, such as securities book, SGX derivatives quote, SGX news, SGX securities and derivatives market direct feed, SGX live data and news, historical market data, and broker services; and computer services and maintenance, and software maintenance services. Singapore Exchange Limited was incorporated in 1999 and is based in Singapore.

Top 5 Financial Companies To Invest In Right Now: PICO Holdings Inc.(PICO)

PICO Holdings, Inc., together with its subsidiaries, engages in the water resource and water storage, real estate, insurance, and agribusiness businesses. Its water resource and water storage business acquires and develops water resources and water storage operations in the southwestern United States. The company?s real estate business acquires and develops partially-developed and finished residential housing lots in selected markets primarily in California. It also owns, leases, and sells properties in northern Nevada, which include sub?surface rights, such as mineral rights, water rights, and geothermal rights. As of December 31, 2010, this business owned or controlled a total of 490 finished lots, which included 21 completed homes and 10 partially completed homes; and 4,711 potential lots in various stages of entitlement. It also owned approximately 440,000 acres of land in northern Nevada. The company?s insurance business handles and resolves claims on expired polic ies comprising medical professional liability, property and casualty, and workers? compensation insurance policies. PICO Holdings, Inc. also involves in cash and fixed-income securities business, as well as acquires businesses and interests in businesses through the acquisition of private companies and the purchase of shares in public companies. The company was founded in 1981 and is based in La Jolla, California.

Top 5 Penny Stocks To Own For 2014: Infinity Property and Casualty Corporation(IPCC)

Infinity Property and Casualty Corporation, through its subsidiaries, provides personal automobile insurance with a concentration on nonstandard auto insurance in the United States. The company offers personal automobile insurance to individuals; mono-line commercial vehicle insurance to businesses; and classic collector insurance, which provides protection for classic collectible automobiles. It products provide coverage to individuals for liability to others for bodily injury and property damage, and for physical damage to an insured?s own vehicle from collision and various other perils. Infinity distributes its products primarily through a network of independent agencies and brokers. The company was founded in 2002 and is headquartered in Birmingham, Alabama.

Advisors' Opinion:

• [By John Udovich]

  Auto sales continue to rise and that is good news for small cap auto insurers Infinity Property and Casualty Corp (NASDAQ: IPCC), First Acceptance Corporation (NYSE: FAC) and Atlas Financial Holdings Inc (NASDAQ: AFH) which are focused on niche auto insurance markets.�A Yahoo! Autos blog post�recently noted that in August, automakers sold 1.5 million new vehicles for the highest rate in years. Moreover,�most industry forecasters expect sales to�return to the level they hit before the 2008 recession of 16 million vehicles a year. The blog post then went on to note the three forces driving auto sales:

Top 5 Financial Companies To Invest In Right Now: FNB United Corp.(FNBN)

FNB United Corp. operates as the bank holding company for CommunityONE Bank, National Association that provides consumer, mortgage, and business banking services to individual and business customers in North Carolina. Its deposit products include checking accounts, interest checking accounts, money market accounts, savings accounts, certificates of deposit, and individual retirement accounts. The company?s loan products portfolio comprises commercial and agricultural loans, real estate construction loans, real estate residential loans, and consumer loans. It also offers debit cards, credit cards, online and mobile banking, cash management, investment management, and trust services, as well as operates automated teller machines. In addition, it originates, underwrites, and closes loans for sale into the secondary market. FNB United operates through 45 offices. The company was formerly known as FNB Corp. and changed its name to FNB United Corp. in April 2006. FNB United Cor p. was founded in 1907 and is headquartered in Asheboro, North Carolina.

Advisors' Opinion:

• [By Holly LaFon]

  The second stock, FNB United Corp. (FNBN), is 95.4% off of its three-year high, but it has also had a stock split in that time. It has also seen greater insider activity. Five unique insiders bought shares of the company, for a total number of six insider buy transactions in the past month.

Top 5 Financial Companies To Invest In Right Now: Ohio Legacy Corporation(OLCB)

Ohio Legacy Corp. operates as a bank holding company for Premier Bank & Trust, National Association that provides retail and commercial banking services to its customers located in Stark, Wayne, and Belmont Counties in Ohio. The company offers a range of deposit products, including interest-bearing demand deposits, noninterest-bearing demand deposits, personal and business checking, time accounts, savings and money market accounts, certificates of deposit, Internet banking, cash management, and direct-deposit services. It also provides commercial loans, construction loans, real estate mortgage loans, home equity lines of credit, and installment and personal loans. In addition, the company offers safe deposit box facilities, courier services, night depository facilities, Internet banking, cash management, direct-deposit services, and electronic funds transfer services, as well as provides trust, wealth management, and investment brokerage services. It provides its banking s ervices through its four branch offices and a trust office. The company was founded in 1999 and is based in North Canton, Ohio. Ohio Legacy Corp. is a subsidiary of Excel Bancorp, LLC.

LPL launches consulting group for large independent advisers

LPL Financial LLC today announced that it is launching a consulting group designed to help large affiliated advisory firms become more strategic and attain higher profitability.

The biggest independent broker-dealer in the country, LPL has comprises 13,400 financial advisers and 700 financial institutions. It has established the Enterprise Management Consulting program to help its so-called “large enterprises” — collections of independent advisory practices that generate at least $5 million in annual revenue — manage their practices, and formulate and execute business strategy.

The consulting team, led by Sal Zambito, LPL's senior vice president of business consulting, will work with executives of the affiliated firms to increase growth by improving financial management, operational efficiency and organizational design.

In a statement, Mr. Zambito said that the initiative will “add maximum value to [affiliated firms'] underlying advisers' practices, and to do so in a scalable fashion.”

LPL's Enterprise Management Consulting group will operate in partnership with The Ensemble Practice, a management consulting firm specializing in the investment advice sector. The LPL initiative will help its affiliated advisory firms set strategic goals, according to Derek Bruton, LPL's managing director.

“Our large enterprise consulting model allows them the opportunity to truly focus on important C-level thinking and decision making in order to achieve the highest potential for their firms and the advisory practices they support,” Mr. Bruton said in a statement.

Best Dividend Companies To Buy Right Now

The market continues to hop along on its pogo stick before and after every meeting of the Federal Reserve, and in the master limited partnership space, the effect is quite exaggerated. In this video, Fool.com contributor Aimee Duffy spells out exactly what MLP investors can expect when the Fed finally tapers, and why that might be the perfect buying opportunity for some of our favorite MLPs.

Dividend Stocks Can Make You Rich
It's as simple as that. Over the long term, the compounding effect of the quarterly payouts, as well as their growth, adds up faster than most investors imagine. With this in mind, our analysts sat down to identify the absolute best of the best when it comes to rock-solid dividend stocks, drawing up a list in this free report of nine that fit the bill. To discover the identities of these companies before the rest of the market catches on, you can download this valuable free report by simply clicking here now.

Best Dividend Companies To Buy Right Now: Cincinnati Financial Corporation(CINF)

Cincinnati Financial Corporation engages in the property casualty insurance business in the United States. Its Commercial Lines Property Casualty Insurance segment provides coverage for commercial casualty, commercial property, commercial auto, and workers? compensation. It also offers specialty packages, including coverages for property, liability, and business interruption for specific industry classes, such as artisan contractors, dentists, or street businesses. In addition, this segment provides contract and commercial surety bonds, fidelity bonds, and director and officer liability insurance, as well as machinery and equipment coverage. The company?s Personal Lines Property Casualty Insurance segment offers coverage for personal auto and homeowners, as well as other insurance products, such as dwelling fire, inland marine, personal umbrella liability, and watercraft coverages to individuals. Cincinnati Financial?s Excess and Surplus Lines Property Casualty Insurance s egment offers commercial casualty insurance that covers businesses for third-party liability from accidents occurring on their premises or arising out of their operations, including products and completed operations; and commercial property insurance, which insures loss or damage to buildings, inventory, equipment, and business income from causes of loss, such as fire, wind, hail, water, theft, and vandalism. The company?s Life Insurance segment provides term insurance; universal life insurance; whole life insurance; and worksite products, which include term, whole life, universal life, and disability insurance offered to employees through their employer. This segment also markets disability income insurance, deferred annuities, and immediate annuities. Its Investment segment invests in fixed-maturity investments, equity investments, and short-term investments. Cincinnati also offers commercial leasing and financing services. The company was founded in 1950 and is headquarte red in Fairfield, Ohio.

Advisors' Opinion:

• [By Ben Levisohn]

  Loew’s, however isn’t just cheap on its own terms. It’s also cheap relative to other investor insurers, including Markel (MKL), Cincinnati Financial (CINF) and Berkshire Hathaway. Shanker and Stefano write:

• [By Dividends4Life]

  Cincinnati Financial Corp. (CINF) is an insurance holding company that primarily markets property and casualty coverage. It also conducts life insurance and asset management operations. The company has paid a cash dividend to shareholders every year since 1954 and has increased its dividend payments for 53 consecutive years. Yield: 3.3%

• [By Dividends4Life]

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Best Dividend Companies To Buy Right Now: First Financial Northwest Inc.(FFNW)

First Financial Northwest, Inc. operates as the holding company for First Savings Bank Northwest that provides community-based savings bank services in Washington. Its deposit products include noninterest bearing accounts, NOW accounts, money market deposit accounts, statement savings accounts, and certificates of deposit. The company?s loan products portfolio comprises one-to-four family residential loans, multifamily loans, commercial real estate loans, construction/land development loans, and business loans, as well as consumer loans, including home equity loans, personal lines of credit, second mortgage loans, and savings account loans. First Financial Northwest, Inc., through another subsidiary, First Financial Diversified, Inc., offers escrow services. The company primarily serves customers in the King, Pierce, Snohomish, and Kitsap counties of Washington through a full-service banking office in Renton, Washington. First Financial Northwest, Inc. was founded in 1923 and is based in Renton, Washington.

10 Best Undervalued Stocks To Buy Right Now: Eaton Corporation(ETN)

Eaton Corporation operates as a power management company worldwide. It provides electrical components and systems for power quality, distribution, and control; hydraulics components, systems, and services for industrial and mobile equipment; aerospace fuel, hydraulics, and pneumatic systems for commercial and military use; and truck and automotive drivetrain, and powertrain systems for performance, fuel economy, and safety. The company also manufactures screw-in cartridge valves, custom-engineered hydraulic valves, and manifold systems; and electrical and electromechanical systems. In addition, it designs, manufactures, and distributes intake and exhaust valves for diesel and gasoline engines; supplies electrical components for commercial and residential building applications and industrial controls for industrial equipment applications; and manufactures human machine interfaces, programmable logic controllers, and input/output devices. Further, the company also operates a s a provider of customized enclosures, rack systems, and air-flow management systems to store, power, and secure mission-critical IT data center electronics; and manufacturer, distributor, and service provider of single-phase and three-phase uninterruptible power supply systems. Eaton Corporation was founded in 1916 and is headquartered in Cleveland, Ohio.

Advisors' Opinion:

• [By Ron Rowland]

  Just rolled out, this new UBS exchange traded note (ETN) is targeted at investors desiring significant monthly income from a diversified multi-asset mix, notes Ron Rowland in Invest with an Edge.

Best Dividend Companies To Buy Right Now: TECO Energy Inc.(TE)

TECO Energy, Inc., an electric and gas utility company, through its subsidiaries, engages in the generation, purchase, transmission, distribution, and sale of electric energy. It provides retail electric service to approximately 672,000 customers in West Central Florida with a net winter system generating capability of 4,684 megawatts. The company also engages in the purchase, distribution, and marketing of natural gas. It serves approximately 336,000 residential, commercial, industrial, and electric power generation customers in Florida. In addition, the company owns mineral rights, owns or operates surface and underground mines, and owns interests in coal processing and loading facilities. TECO Energy, Inc. was founded in 1899 and is headquartered in Tampa, Florida.

Advisors' Opinion:

• [By Justin Loiseau]

  TECO Energy (NYSE: TE  ) is as close to a pure coal pick as utilities get, but even TECO is taking a step back. The utility's Appalachian coal mines churn out 9 million tons annually, and its regulated division relies on coal for 61% of its capacity. But last week, the company announced that it's dishing out $950 million for a regulated New Mexico natural gas utility. The acquisition adds 50% to TECO's customer base and could provide some natural hedging if coal and natural gas continue their price tango.�

Best Dividend Companies To Buy Right Now: Cross(A.T.)

A.T. Cross Company engages in the design and marketing of personal and business accessories. It operates in two segments, Cross Accessory Division (CAD) and Cross Optical Group (COG). The CAD segment manufactures and markets writing instruments under the Cross brand, including ball-point pens, fountain pens, selectip rolling ball pens, mechanical pencils, and writing instrument accessories, such as refills and desk sets. It also provides various personal and business accessories, including leather goods, reading glasses, watches, desk sets, cufflinks, and stationery. This segment sells its products through direct sales force and manufacturers' agents or representatives to approximately 2,400 retail and wholesale accounts; and directly to consumers through its Web site, cross.com, and the Cross retail stores in the United States, as well as through distributors and retailers worldwide. The COG segment designs, manufactures, and markets polarized sunglasses and goggles under the Costa and Native brnads in the United States. This segment sells its products through employee representatives and manufacturers? agents to optical and sunglass specialty shops, department stores, and sporting goods retailers in the United States. A.T. Cross Company was founded in 1846 and is headquartered in Lincoln, Rhode Island.

Best Dividend Companies To Buy Right Now: S&P GSCI(GD)

General Dynamics Corporation, an aerospace and defense company, provides business aviation; combat vehicles, weapons systems, and munitions; military and commercial shipbuilding; and communications and information technology products and services worldwide. Its Aerospace group designs, manufactures, and outfits various large and mid-cabin business-jet aircraft; provides maintenance, repair work, fixed-based operations, and aircraft management services; and performs aircraft completions for aircraft. The company?s Combat Systems group offers tracked and wheeled military vehicles, weapons systems, and munitions. Its product lines include wheeled combat and tactical vehicles; battle tanks and infantry vehicles; munitions and propellant; rockets and gun systems; and axle and drivetrain components and aftermarket parts. This group also manufactures and supplies engineered axles, suspensions, and brakes for heavy-load vehicles for military and commercial customers. The company Advisors' Opinion:

• [By Rich Smith]

  General Dynamics (NYSE: GD  ) is reordering its ranks.

  On Monday, the nation's biggest ground forces-weapons maker announced that it has decided to merge its Armament and Technical Products business into its Ordnance and Tactical Systems unit. The former business specializes in building guns; the latter, ammo. Both lines of business will continue to be run under the aegis of General Dynamics' Combat Systems division, the company's second largest by revenues.

Best Dividend Companies To Buy Right Now: Vornado Realty Trust(VNO)

Vornado Realty Trust is a privately owned real estate investment trust. The trust engages in investment, ownership, and management of commercial real estate. It invests in the real estate markets of United States. The trust primarily invests in office, industrial and retail properties. Vornado Realty Trust is based in New York, New York.

Advisors' Opinion:

• [By Alyssa Oursler]

  No wonder�Ackman�and�Vornado Realty Trust�(VNO) have both swallowed their losses in JCPenney stock and headed for the exit.

  Sell or Avoid JCPenney Stock

  Despite the losses Ackman and VNO endured, selling JCP when they did ended up being the right move.

• [By Dividend King]

  Earnings per share (TTM) came in at $3.48, compared to -$0.33, $1.46, and $4.17 for competitors General Growth Properties Inc. (GGP), Macerich Co. (MAC) and Vornado Realty Trust (VNO), respectively.

• [By Robert Hsu]
  Name Type of Security� Recommendation� Kinder Morgan Energy Partners L.P. (NYSE: KMP) � MLP August 15, 2013� TeeKay LNG Partners L.P.� (NYSE: TGP) � MLP September 16, 2013� PowerShares S&P 500 BuyWrite Portfol ETF� (NYSE Arca: PBP)� Buy-Write ETF September 30, 2013� Madison Covered Call Equity Strtgy Fd (NYSE: MCN)� Buy-Write ETF September 30, 2013� Nuveen Equity Premium Opportunity Fund (NYSE: JSN)� Buy-Write ETF September 30, 2013� BlackRockEnhanced Dividend Achievers Tr (NYSE: BDJ)� Buy-Write ETF September 30, 2013� Vornado Realty Trust � (NYSE: VNO)� Real Estate
  Investment
  Trust September 26, 2013�
  
  

  Robert Hsu is the editor of Permanent Wealth Investor and a former hedge fund portfolio manager at Wall Street powerhouse Goldman Sachs. He retired from Goldman at age 31. He since has come out of retirement to establish and preside over his money management firm, Absolute Return Capital Advisors. His retirement experience has given him his current mission: helping investors like you achieve their goal of comfortable retirement through profitable income strategies.

Best Dividend Companies To Buy Right Now: NYSE Euronext Inc.(NYX)

NYSE Euronext, through its subsidiaries, operates securities exchanges. It operates various stock exchanges, including the New York Stock Exchange (NYSE), NYSE Arca, Inc., and NYSE Amex LLC in the United States; and five European-based exchanges that comprise Euronext N.V. ? the Paris, Amsterdam, Brussels, and Lisbon stock exchanges, as well as the NYSE Liffe derivatives markets in London, Paris, Amsterdam, Brussels, and Lisbon. The company?s Derivatives segment provides access to trade execution in derivatives products, options, and futures; offers clearing services for derivative products; and sells and distributes market data and related information. NYSE Euronext?s Cash Trading and Listings segment engages in offering access to trade execution in cash trading and settlement of transactions in European markets; obtaining new listings and servicing existing listings; selling and distributing market data and related information; and providing regulatory services. Its Info rmation Services and Technology Solutions segment operates sell side and buy side connectivity networks for its markets and for other market centers, and market participants in the United States, Europe, and Asia; provides trading and information technology software and solutions; sells and distributes market data and related information to data subscribers for proprietary data products; and offers asset management services, and consultancy services to exchanges and liquidity centers. The company is headquartered in New York, New York.

Advisors' Opinion:

• [By Steve Sears]

  Shares of Nasdaq OMX Group have gained 0.4% to $30.58 today, while CME Group (CME) has fallen 1.1% to $71.89, IntercontinentalExchange (ICE) has dropped 0.2% to $185.16, and NYSE Euronext (NYX) has ticked down 0.1% to $42.66.

• [By Sean Williams]

  Another intriguing aspect of ICE is its pending merger with NYSE Euronext (NYSE: NYX  ) . The merger with NYSE Euronext will broaden ICE's revenue breakdown dramatically from its current setup to the point that only 10% of its revenue will come from cash-based equities trading. Listing fees, market data, technology and futures/options trading will make up more than equities-trading, giving ICE the ability to resist economic downturns like never before.�

• [By Sam Mamudi]

  As U.S. exchanges lose business to private venues, owners of public markets have sought help reversing the shift. NYSE Euronext (NYX) and Nasdaq OMX Group Inc. (NDAQ) have asked the SEC to consider rules keeping orders off dark pools unless those venues offer a better price than exchanges at a given moment.

Federal workers: Hand over BlackBerry during shutdown

If the government shuts down next week, Blackberries and iPhones may be turned in.

WASHINGTON (CNNMoney) Federal workers could soon be asked to turn in their government-issued BlackBerries and iPhones.

That's because if the government shuts down next Tuesday, furloughed federal workers could be violating the law if they do something as simple as check their work e-mail.

The Antideficiency Act, passed by Congress during Chester Arthur's administration, prevents non-working federal employees from doing any job-related functions during a shutdown if the government cannot pay for it.

The White House budget office made clear last week that employees on furlough during a shutdown can't touch their government-issued mobile devices, or even use home computers or laptops to access work email.

But in the age of ubiquitous communication, how do you even enforce a no-cell phone ban?

The truth is, no one really knows yet. In the last shutdown of 1996, the Palm Pilot was about as advanced as handheld devices got.

The Office of Management and Budget has left it up to the various federal agencies to figure out how to carry out its edict.

In 2011, when the government came close to a shutdown, the Department of Housing and Urban Development said it would allow employees to keep government-issued BlackBerries (BBRY) and laptops on the condition they didn't use them. But the House of Representatives had planned to order furloughed employees to turn in their BlackBerries, laptops, and even cell phones, and to turn on "out of office" messages.

  What happens in a government shutdown

Now, with a shutdown looming just a week a way, the HUD, House, and the IRS have said they're still crafting their contingency plans, including how to handle websites and mobile phone use.

Federal worker union representatives say it doesn't matter what the government decides on BlackBerry use.

"When a federal employee gets furloughed because of a government shutdown, the last thing they're worried about is whether they can turn on their laptop or Blackberry; they're worried about paying the mort! gage and putting food on the table," said Randy Erwin, director of the legislative affairs at the National Federation of Federal Employees.

Shutdown expert John Cooney said a short shutdown lasting a few days may have little impact and agencies may not require staff to turn phones in.

"If it's a long shut down, the agency could collect cell phones from employees," said Cooney who helped craft the modern day shutdown plan for the Reagan White House.

One potential problem: The budget office says agencies can't rely on work email to alert employees to go back to work, when a shutdown ends. The agencies will have go back to old-fashioned communication to get furloughed employees to return to the office via unconventional tools like calls to personal phones, television, radio, Facebook and Twitter.

Of course, federal employees in critical jobs will continue to work, and also use their smartphones to carry out their "essential functions." They include some senior managers, lawmakers and workers who are needed to protect life and property.

They also include the President, also known as the E-mailer-in-chief, and a government employee with a critical job.

What Are Frontier Markets?

Frontier markets refer to equity markets in small nations that are at an earlier stage of economic and political development than larger and more mature emerging markets. In other words, think of frontier markets as the smaller siblings of emerging markets. Frontier equity markets typically have modest market capitalization, limited investability and liquidity, and few market information sources. On the positive side, they generally possess favorable demographics and good long-term growth prospects. As these markets probably constitute the last frontier of investing in an increasingly interlinked global economy, investors should be aware of their risks and rewards, and the options available to invest in them.

Characteristics of Frontier Markets

The term "frontier markets" is widely attributed to the International Finance Corporation (IFC), which coined it in 1992 to refer to a subset of emerging markets. Standard & Poor's bought the IFC Emerging Markets Database in 2000 and subsequently established a frontier index in 2007.

As of September 2013, frontier indices had been established by four major providers – Standard & Poor's, MSCI, Russell Investments and FTSE. The number of frontier markets in these indices ranges from 25 in the MSCI index to 41 in the Russell Frontier Index. These frontier markets are generally concentrated in Eastern Europe, Africa, the Middle East, South America and Asia. The biggest frontier markets are Kuwait, Qatar, the United Arab Emirates (UAE), Nigeria, Argentina and Kazakhstan.

The criteria for inclusion in a frontier markets index are not rigid. The starting point in evaluating a nation for inclusion, of course, is that it should not already be a component of one of the numerous emerging market or developed market indices. Assuming that a nation is not, most index providers evaluate parameters such as its economic development, market accessibility, liquidity and foreign investment restrictions. Overseas investor interest is also ! considered, since there is no point in going to the effort and expense of including a nation in a frontier markets index if there is little interest in it as an investment destination.

Emerging to Frontier (and Vice Versa)

The subjectivity involved in classifying a market as a "frontier," rather than an emerging, market means that there are occasional inconsistencies in classification among the different index providers. For example, Pakistan is classified as a frontier market by S&P, MSCI and Russell, but is regarded as an emerging market by FTSE.

There is also some degree of migration between the frontier and emerging markets as their economic fortunes change. As an example, in 2009 MSCI re-classified the status of three countries from emerging market to frontier market – Jordan, Pakistan and Argentina. Morocco will be moved from the list of emerging markets to frontier markets in November 2013.

Movement from the ranks of frontier markets to emerging markets is also possible, as evidenced by the fact that Qatar and UAE will be making this transition in May 2014.

Sector Similarities, Economic Disparities

The biggest sector in any frontier market index by far is banking/financials, which generally accounts for more than 50% of the index. Other sectors with double-digit weights are industrials and telecoms. Sectors such as health care, utilities and consumer discretionary – which form a substantial portion of the benchmark index in bigger economies – typically have minimal representation in frontier market indices.

Despite the large number of Middle East nations and OPEC producers included in frontier markets, energy companies do not find much representation in these indices. This is because most of the big oil and gas companies in these nations are sovereign entities that are largely or wholly owned by the government, so they are not open to investment by the general public.

Another point worth noting is that since frontier markets in! clude a n! umber of prosperous nations, there is a great deal of disparity between the constituents of a frontier index. As an example, Qatar, with its huge energy reserves and rapid growth rate in recent years, had per-capita gross national income of $81,300 and a population of less than 2 million in 2011, according to the World Bank. In comparison, Bangladesh had per-capita income of $1,910 and a population of 153 million in 2011.

Comparing Frontier Market Indices

Here's a basic comparison of the four main frontier market indices (as of September 2013):

S&P Frontier BMI (Broad Market Index) Number of countries – 36

Number of companies – 556

Top five countries – Kuwait, Qatar, Nigeria, UAE, Argentina

Top three sectors – Financials (53.9%), industrials, consumer staples

MSCI Frontier Markets Index Number of countries – 25

Number of companies – 141

Top five countries – Kuwait, Qatar, Nigeria, UAE, Pakistan

Top three sectors – Financials (53.1%), telecom services, industrials

FTSE Frontier 50 Index Number of countries – 26

Number of companies – 50

Top five countries – Qatar, Nigeria, Argentina, Kenya, Oman

Top three sectors – Banks (51%), industrials, telecom

Russell Frontier Index Number of countries – 41

Number of companies – Not known

Top five countries – Kuwait, Nigeria, Qatar, Argentina, Pakistan

Top three sectors – Financial services, energy, utilities

Why Frontier Markets are Important

Frontier markets are worthy of considering for a number of reasons:

Growth potential due to demographics: While frontier market economies have a combined population of 2 billion people – or about 30% of the global population – they account for only 6% of the world's nominal GDP and just 0.4% of global market capitalization. The population of those living in frontier markets is relatively young, with 60% under 30 years of age and an average age of 30.2 years, a decade less than the 40.5 average age of the 1 billion living in developed nations. Labor costs in most frontier markets are also low compared with costs in other nations. This demographic advantage, combined with a debt-to-GDP that is much lower than in the developed world, means that frontier markets have better long-term growth prospects. In 2011, for instance, frontier markets posted an average GDP growth rate of 4.9%, three times faster than the 1.6% growth rate recorded by the 10 largest advanced economies, according to the World Bank. Frontier markets may improve portfolio diversification: While increasing global economy integration means that most developed and emerging markets move in sync with one another, frontier markets have a lower degree of correlation with them. As a result, frontier markets may be effective in improving a portfolio's diversification. Above-average returns: As of Sept. 25, 2013, eight of the 10 best-performing equity markets for the year were frontier markets, with an average gain of 41.5% in U.S.-dollar terms. While these are not typical returns, as they can gyrate wildly from one year to the next, a patient investor with a long-term investment horizon may be able to generate significant returns from frontier markets over time. How to Invest in Frontier Markets

Exchange traded funds (ETFs) offer by far the best way to invest in frontier markets. A summary of some of the leading ETFs follows (data as of Sept. 27, 2013):

iShares MSCI Frontier 100 (NYSE:FM): Tracks the MSCI Frontier Markets 100 Index. Top geographic allocations – Kuwait, Qatar, UAE, Nigeria and Pakistan

Top sector allocations – Banks, telecoms, oil and gas, real estate

Total assets = US$301 million

Guggenheim Frontier Markets (NYSE:FRN): Seeks investment results that correspond to the price and yield performance of the Bank of New York Mellon New Frontier DR Index. This index, in turn, tracks the performance of depositary receipts in ADR or GDR form for companies from countries defined as the frontier market in the LSE, NYSE, NYSE Amex and Nasdaq. Top geographic allocations – Chile, Colombia, Argentina, Egypt and Nigeria

Top sector allocations – Banks, oil and gas, electric utilities, food

Total assets = US$94 million.

PowerShares MENA Frontier Countries Portfolio (Nasdaq:PMNA): Seeks investment results that correspond to performance of the Nasdaq OMX Middle East North Africa (MENA) index. Top geographic allocations – Kuwait, UAE, Egypt, Qatar and Bahrain

Top sector allocations – Banks, real estate, telecoms, venture capital

Total assets = US$14 million.

Risks of Frontier Markets

Liquidity – Liquidity can be an issue for most markets during turbulent times, and especially for frontier markets due to their thin trading volumes. This lack of volume may result in limited liquidity and wide bid-ask spreads in volatile markets. Geopolitical and political risks – Many frontier markets are located in unstable areas, and as a result, geopolitical risk is a real concern. Political change is another issue that should be considered, since a change of government may be accompanied by significant unrest and instability. Inflation – This is a constant threat in some frontier markets, and it may erode investment returns substantially over the long term. Lack of transparency – Most frontier markets suffer from a lack of transparency and have inadequate information sources. Currency risk – The steep decline in some emerging market currencies like the Indian rupee in 2013 highlights the risk posed by investing overseas. While currency risk is a definite issue for frontier markets, it is less so for the Middle East nations such as Qatar and the UAE that peg their local currencies to the U.S. dollar. Conclusion

Despite their obvious risks, frontier markets offer investors the advantages of above-average returns driven by favorable demographics, as well as portfolio diversification. As these markets probably constitute the last frontier of investing in an increasingly interlinked global economy, investors should be aware of their risks and rewards, and the options available to invest in them.

Facebook targets app users with new ads

SAN FRANCISCO -- For those not keeping track, Facebook has cranked up the volume of in-News Feed ads for apps on its mobile application.

Menlo Park, Calif.-based Facebook is next taking a step further to make sure that people use these apps more. That's because marketers of apps want to see improved engagement from those downloads of so-called native ads.

The world's largest social network is allowing app marketers to run app ads in Facebook's News Feed to prompt users to engage with apps. These ads can call out new sales promotions on retail apps or new game levels on game apps, among other options.

App downloads from both Apple's App Store and Google's Play store -- combined expected to exceed 100 billion worldwide this year -- are often ignored except for a small handful of apps, says Altimeter Group analyst Rebecca Lieb.

Facebook has growing revenue at stake both from marketers paying for more ads and prodding users to engage more to spend money within apps. When Facebook members sign into an app via the social-networking site, the company takes a 30% cut in payments revenue.

Just this year alone, Facebook has delivered over 145 million downloads to Apple's App Store and Google Play. Marketers for game developers have piled on to advertise their apps on Facebook because the social site's 1.15 billion members make it the meeting place to find and message friends online for social games play.

"So many people spend a lot of their day on Facebook," says says Mike Maser, CEO and founder of fitness routines app Fitstar, which has tested Facebook's mobile app ads.

The number of developers who have embraced Facebook's in-News Feed ads has swelled from 3,000 in the first quarter to over 8,400 by the end of the second quarter.

"We are finding great success in really growing the mobile app install business," says Deb Liu, who oversees Facebook payments and mobile app ads at Facebook.

The social-networking giant has been building a business around adding feat! ures to help app developers grow their user bases and make more money. Facebook in April acquired app analytics firm Parse to bring its suite of tools to help app marketers run ad campaigns and reach audiences.

Facebook allows app marketers to target custom audiences based on data from the social site combined with offline data from app developers that could include email addresses, phone numbers and data culled online.

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"The real magic here will be the high-fidelity targeting," says Maser. Facebook has emerged "one of the dominant places for mobile publishers to get distribution -- it's bearing out in their stock price and user statistics."

On Monday, Facebook announced its Graph Search feature will return search queries on people's posts, status updates and comments. Results will only return information that members have shared with friends or have shared publicly. The features is slowly rolling out to a small group of users who already have Graph Search.

Shares of Facebook rose 0.4%, to $50.44, in trading on Tuesday.