Capital Preservation Key to Survival

Profile: He is an expert on financial derivatives and risk management
Known for: His book �Traders, Guns and Money� was almost prescient in the way it foresaw the troubles of corporate India with derivatives in 2007

Investors approach investment in the same way that Woody Allen approached the subject of divinity: �If only God would give me some clear sign! Like making a large deposit in my name in a Swiss bank.� For the last 20 years, despite occasional lapses, the mysterious investment gods have given clear signs of their existence � showering munificent high returns on investors.

As smart investors know, investment genius is a long position, leverage and a rising market. A rising tide, as they say, lifts all boats. But that may now be all in the past.

The global economic recovery is stalling. Major economies, such as the US, Europe and Japan remain mired in slow, low growth as they deal with legacy problems of debt, banking problems and deep-seated structural imbalances. Germany and emerging market economies, like China and India, which have contributed the bulk of global growth since 2008, are showing signs of slowing.

Government policy options are severely restricted because of excessive debt levels and the reluctance of investors to finance indebted sovereigns. Interest rates in most developed countries are low or zero, restricting the ability to stimulate the economy by cutting borrowing costs. Unconventional monetary strategies � namely printing money or quantitative easing � have been tried with limited success. Further doses, while eagerly anticipated by market participants, may not be effective.

If markets seize up again, then �this time it will be different�. There might just not be enough money to bail out everyone and every country that may need rescuing. The rapid and marked deterioration in economic and financial conditions means that the risk of a serious disruption is now significant.
Emerging markets face additional problems. The effects of the excessive credit expansion in China and India are showing up in bad bank debts. Emerging markets face significant losses on their holdings of G-7 securities in which foreign exchange reserves are held. Imported inflation, primarily in energy and commodities, is also an increasing concern.

The Viagra of investment � leverage � which drove high returns pre-2007 is also now unavailable as the global economy reduces debt.

As the global economy resets, the prospects are for lower returns and increased volatility. The US stock market took 25 years to regain its highs after 1929. Japanese stocks (down some 75 percent from its peak) and property markets (down between 50-70 percent) have still not recovered the levels of 1989.

Decent returns can be still earned during periods of great uncertainty. They just require different investment approaches.

Governments bonds are no longer risk-free safe havens. The risk of default or loss of purchasing power either through devaluation of currency or diminution of purchasing power is prominent. 

Risk premiums are frequently negative as investors flock to safe assets or the latest and best investment � US and German bonds, high-yield corporate bonds or high-dividend stocks.

Diversification to mitigate risk is difficult as correlation between different investment assets has become volatile. The fundamental risk of domestic shares, international shares and property is similar in the current economic environment. Even returns on cash are positively correlated to risky assets as interest rates have fallen in the recession.

Tail risk, the chance of large and frequent increases and decreases in prices, is also evident.

Investment structures compound the investor�s dilemma.

Traditional mutual funds operate to generate relative returns measured against a benchmark. Unfortunately, beating a benchmark by 5 percent provides cold comfort to investors when the investment manager is down 15 percent and the market falls by 20 percent. Only absolute return now counts.

Management fees and fund expenses are a significant drag on returns. Management fees and expenses of 2 percent are tolerable when the returns are 12 percent, but difficult to bear when the returns are 5 percent or lower.

In choppy markets, rapid changes in the composition of the portfolio � including switches between assets and instruments (physical versus derivative; symmetric versus asymmetric exposure) � is required. Long periods of staying uninvested, holding cash or other defensive assets, may be necessary. Today, investment mandates require investment in a single asset class or limit switching. Such mandates constrain the type of instruments used and force the fund to stay substantially invested at all time. This restricts the ability to generate positive returns.

Traditional investment styles may not work. Value investing, buying stocks based on fundamental analysis when they look cheap, has historically been successful. The hidden value can be released through cash flow, dividends or acquisition in the long run. But since 2008, value investing has performed indifferently. Arbitrage strategies, such as relative value trading and long-short equity or equity pairs trading, have also performed poorly.

The failures reflect uncertainty about correct values, risk-on/ risk-off trading, risk aversion, illiquidity and the lack of convergence to theoretical values.

Pooled investments also present problems. In commingled funds, where the investor is invested alongside others, performance may be influenced by the weakest holder. As weaker investors withdraw, funds may be forced to liquidate in unfavourable markets, driving down valuations even further. This affects the returns of the most stoic long-term investors.

Mark-to-market, often based on illiquid and uncertain prices that do not approximate true values, compounds the problems. Investments which may prove sound in the long term cannot be held because of the difficulty of absorbing short-term valuation swings.

Hot China Companies To Watch For 2014

Two months after telling investors it plans to open 100 new coffee stores in the Philippines and 100 more in Indonesia over the next three to four years, Starbucks (NASDAQ: SBUX  ) completed a Southeast Asian trifecta Wednesday when it said it plans to open an additional 100 stores in Malaysia.

The new stores will be opening over the course of the next four years, said Starbucks China�and Asia Pacific Channel Development and Emerging Brands President John Culver at a stop in Kuala Lumpur, according to the company. "We have a historic opportunity to become one of the most respected and enduring brands across Southeast Asia, delivering an unparalleled experience to Starbucks customers, while supporting local communities," he is quoted as saying.

Starbucks has been present in the Malaysian market for 15 years already, having opened its first store at the KL Plaza in�Kuala Lumpur in 1998, and has grown its presence to 141 stores. This week's announced expansion would grow that total by 71% in four years' time. It operates more than 700 stores across six Southeast Asian markets, including Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam.

Hot China Companies To Watch For 2014: Monolithic Power Systems Inc.(MPWR)

Monolithic Power Systems, Inc., a fabless semiconductor company, designs, develops, and markets analog and mixed-signal semiconductors. It offers direct current (DC) to DC converter integrated circuits (IC) that are used to convert and control voltages of various electronic systems, such as portable electronic devices, wireless LAN access points, computers, set top boxes, televisions and monitors, automobiles, and medical equipments. The company also provides lighting control ICs for use in systems that offer the light source for liquid crystal display (LCD) panels in notebook computers, LCD monitors, car navigational systems, and LCD televisions. In addition, it provides audio amplifier ICs to amplify sound produced by audio processors; and Class-D audio amplifiers for plasma televisions, LCD televisions, and digital versatile disk players. The company serves consumer electronics, communications, and computing markets. Monolithic Power Systems, Inc. sells its products thr ough third party distributors and value-added resellers, as well as directly to original equipment manufacturers, original design manufacturers, and electronic manufacturing service providers. The company was founded in 1997 and is headquartered in San Jose, California.

Hot China Companies To Watch For 2014: MCG Capital Corporation(MCGC)

MCG Capital Corporation is a private equity firm specializing in investments in middle market companies. The firm does not prefer investments in highly cyclical and volatile industry sectors and businesses with significant volatility exposure. It seeks to invest in small to mid sized companies. The firm prefers to invest in acquisitions, growth financings, organic growth, recapitalization, and leveraged buyouts. It invests in companies based in the United States. The firm seeks to invest upto $75 million in debt and equity in companies having revenues between $20 million and $200 million and EBITDA between $3 million and $25 million. It seeks to invest in the form of senior debt, including amortizing, bullet maturity, term loans, and revolving credit facilities; institutional sub debt, including junior capital; second lien debt, that includes term loans on sole source and participant basis; secured and unsecured subordinate loans structured as current interest, deferred in terest, and equity linked components; mezzanine debt and equity that includes minority equity investments. The firm may invest in minority or control equity positions. It was formerly known as MCG Credit Corporation. MCG Capital Corporation was founded in 1990 and is based in Arlington, Virginia.

Hot Energy Companies To Invest In 2014: Carnival Corporation(CCL)

Carnival Corporation operates as a cruise and vacation company. It provides cruises to various vacation destinations with a portfolio of cruise brands comprising Carnival Cruise Lines, Holland America Line, Princess Cruises, and Seabourn in North America; and AIDA Cruises, Costa Cruises, Cunard, Ibero Cruises, and P&O Cruises in Europe, Australia, and Asia. The company also involves in operation of hotels, as well as offers tour and transportation services. It operates approximately 98 ships, as well as owns and operates 15 hotels or lodges that include 3,420 guest rooms; 395 motorcoaches; and 20 domed rail cars. The company sells its cruises through travel agents, including wholesalers and tour operators. Carnival Corporation was founded in 1974 and is headquartered in Miami, Florida.

Advisors' Opinion:

• [By Geoff Gannon] ns how the cruise business really works. But all of the companies in the industry (CCL, RCL and NCL) freely discuss the economics of their business in great detail. They break out costs before and after fuel. They give you per-passenger prices of how much newly built ships cost. They give you lots and lots of details. They explain how they price their product (the way airlines do) and so on. There is an extreme level of detailed explanation of the business in the various conference calls, 10-Ks, etc.
  
  A great source for this information is going back to the time the company went public or at least finding the S-1 of a competitor. When a company goes public it often gives much more detail into product economics, etc., than it will later on when it reports annual results.
  
  That is also a good place to learn about market share, competitors, etc. It is very important to know who a company's customers are. And to think about the circumstances under which they make purchases.
  
  In many businesses, you will find at least two kinds of "customers." You will have the middlemen (distributors) and the end user (consumer). For Hanes Brands (HBI) the middlemen are Wal-Mart, Target, the dollar stores, etc.
  
  And the end user (consumer) is really the female head of the household. This is complicated somewhat in almost all situations by the possibility ��as we have with Hanes ��where the user is not always the purchaser. Plenty of underwear purchases are not made by the person who will use the product. But they are obviously an influencer of the purchase decision.
  
  The strongest example of this is kids' toys. Kids do not buy toys. Parents buy toys. But kids influence the parents.
  
  For many companies, sales are first made to distributors, then go from distributors to retailers, then from retailers to households. And even within the household the buyer may not be the user.
  
  It is helpful to make these distinctions. And not to be overly technical about the way accounting defines! customers, etc.
  
  For example, a key group to consider with Western Union is agents. The way Western Union's statements are prepared, however, treat agents simply as an expense line with their revenue belonging to Western Union. The reality is more complicated. Western Union's financial statements appear to have a ton of variable costs in them. But this is really all just agent expense. The business is in reality a very fixed-cost business. Once an agent is in place an additional customer of that agent adds to the bottom line of both the agent and Western Union to a very great extent relative to the fees that customer pays. In other words, marginal revenue turns into marginal profit very easily.
  
  When considering investing in a company like Western Union, you have to think about both agents and customers. It would be wrong to focus only on customers. The agents are a key part of the business. In many ways, they are the best chance of having a competitive advantage. So it is Western Union's job to attract both agents and customers.
  
  That is the kind of thing Warren Buffett would intuitively understand and focus on. However, it is not something that appears in any way on the financial statements. It is often easiest to see these important competitive points when you have 10-Ks from more than one company in the same industry in front of you.
  
  A lot of times people have emailed me saying I referenced information that must be from other sources ��not SEC reports, etc. But that's rarely true. Often, I am referencing information that can be inferred after you have read all the 10-Ks (and S-1s where available) of all the public companies in the industry.
  
  For example, Copart (CPRT) is one of two companies in its industry that are public. The other company is part of a kind of conglomerate car sales company. That other company, KAR Auction Services (KAR), was much more explicit in detailing the competitive position of Copart and Insurance Auto Auctions. It even gave market share! data.
  This is common. Often one company will choose not to give names or put percentages on certain competitive facts. The other company will do so. And even when that is not the case, the two companies will often make statements that ��when taking together ��can give you rough indications of certain realities that neither company entirely intended to provide.
  
  The same is true for certain suppliers and customers. Although this is complicated by size. Very large customers of small companies are not good sources of information. But smaller companies often provide better insights into the larger suppliers, customers, etc., they deal with. That's because ��due to their small size ��more information is material and is explained in detail.
  
  I have found situations where one company simply says who the customer is that they are supplying. While the other company explains what product that supply goes into, the purchase amount, whether it is an exclusive arrangement, etc.
  
  So it is always important to ��at a minimum ��read the 10-Ks, 14As, and (where available) S-1s of every public company in the industry. This will give you a lot of insight into the competitive situation. Sometimes it is helpful to also look at customers and suppliers. However, this is not true of very large customers and suppliers because they will not discuss the specific area you are interested in.
  
  For example, Honeywell is a large customer of George Risk. It would do me no good to study Honeywell to learn about George Risk. Honeywell is a huge company. What they buy from George Risk is irrelevant to their shareholders. So they do not discuss it.
  
  An exception to this is where the product sold is going into a huge "generational" type project. Examples include defense, aerospace, video game consoles, operating systems, etc. This can be very helpful with suppliers way down the chain. For exam
• [By John Reese]  

  Carnival Corporation is a cruise and vacation company. CCL recently traded at $29.5 and has a 3.4% dividend yield. CCL lost 5.8% during the past 12 months. The stock has a market cap of $23.4 billion, P/E ratio of 12.5 and forward P/E ratio of 9.8. The stock has total debt/equity ratio of 0.41 and Beta of 1.48. Harris Associates had more than $250 Million in CCL at the end of March 2011.

3 Simple Momentum ETF Trading Strategies

Momentum traders who look for strong price movements to jump in on have embraced ETFs for their ease-of-use, cost efficiency, and sheer diversity of products available. Typically, momentum trading setups will come in the form of trends, but they can also come from a shift in momentum – such as strong buying after a sharp decline. Momentum strategies can be applied intra-day, capitalizing on trends that occur within minutes or hours, or the strategies can be applied to take advantage of longer-term trends. Both price and indicator strategies are used to find momentum (or a lack of it) and can be applied to both bullish and bearish markets .

Relative Weakness Momentum Strategy – Bearish Momentum

Relative strength refers to how one ETF's price movements compare to another's. If two ETFs are dropping in a bear market and you want to go short, short the weakest one – the ETF that nobody wants to own.

Let's assume you're bearish on gold miners and want to get a short position, but you're not sure which gold miners ETF to short. Do a comparison to see which is performing worst (since you want to go short). If you wanted to go long, you'd look for the one that's performing the best.

Figure 1 shows Market Vectors Gold Miners (GDX) compared to Market Vectors Junior Gold Miners (GDXJ). Over the timeframe shown, GDXJ has been weaker than GDX. If choosing between these two ETFs, taking a short in GDXJ is the better option since it is weaker .

Figure 1. GDX vs GDXJ (purple line) Percentage Scale. Source: FreeStockChartsTo go short in the ETF you've chosen based on relative weakness, make sure an overall downtrend is in place – then look for entry. A simple but highly effective method is to draw a trendline along a pullback in the downtrend, and then enter when the price resumes falling and breaks the trendline.

Figure 2. Pullback Entry Technique. Source: FreestockchartsFigure 2 shows potentially how many entry points there are in a strong downtrend. ! All the white lines are trendlines for pullbacks; when the trendline is broken it shows selling is continuing and a short position can be taken.

Place a stop above the recent high to limit risk, and hold the position until a higher swing high occurs.

This method can also be used in an uptrend. Look for the ETF that is performing the strongest in an uptrend. Draw downward trendlines along the pullbacks, when the trendline is broken by buying, go long. Place a stop below the recent low and exit when a lower swing low occurs .

Momentum Indicator Strategy – Bullish MomentumThe following approach is best applied when the momentum indicator (12 day default) has recently reached an extreme level, such as 110 and higher, or 90 and lower. When it's fluctuating back and forth mildly across 100, the signals are less reliable.

Extreme levels on the momentum indicator often signal that the price is over-extended, and a turning point may soon be coming. Basing a decision on this alone can be dangerous, though, since price can keep running for extended periods of time.

Therefore, we're looking for an extreme level in the momentum indicator, followed by a divergence. In this particular case, we're looking for an indication that strong selling is about to turn to buying, and when it occurs we can jump on the buying bandwagon .

Figure 3. Momentum Divergence in SPDR Gold Trust. Source: FreeStockChartsFigure 3 shows this sequence of events occurring in the SPDR Gold Trust (GLD). As the price falls there is a downward spike in momentum, followed several months later by a higher low. This is divergence – price is making lower lows but momentum is going up. This indicates there is a potential long trade in the ETF, but the trade needs a trigger and risk controls.

Once you have the divergence set-up, a simple trade trigger is to draw a trendline on the momentum indicator, and then enter long when the trendline is broken.

Figure 4. Momentum Trade Trigger. Sour! ce: FreeS! tockChartsOn this particular trade, the downward trendline following the divergence on the momentum indicator was broken almost exactly at the turning point higher in price. This precision won't always occur, so a stop-loss is needed. Place a stop below the recent low price, in this case $148.

Continue to hold the position as long as the ETF price is making higher lows. When a lower low occurs, which can be seen on the far right side of Figure 4, exit the trade.

This can also be used a shorting strategy. You'd look for a buying spike followed by divergence on the momentum indicator (lower highs). Once it occurs, you'd go short when the momentum indicator breaks below the upward trendline. The stop is above the recent high, and you hold the position until a higher swing high occurs .

RSI Strategy – Neutral to Breakout MarketsSometimes an ETF is predominantly trendless; it's moving within a range. While this is often visually seen on the price chart, an RSI indicator can help confirm a range is occurring, and also notify you when a trending move is beginning.

When you see an ETF's price moving back and forth within a price band for an extended period of time, you'll also likely see the RSI (14 day period) fluctuating between about 80 and 20. If the trading is really choppy, the RSI may even stay snug to a 50 reading.

When the price is moving within a range and the RSI is fluctuating between 20 and 80 you're better off trading a ranging strategy than a momentum one.

Figure 5 shows this occurring in the United States Oil Fund (USO). While there are opportunities to trade the see-saws in price, these are generally bypassed by momentum traders in favor of more dynamic moves.

Figure 5. United States Oil with RSI. Source: FreeStockChartsWait for the RSI to move out of this range before taking momentum trades. Ideally, an uptrend in price should result in the RSI reaching above 80 and also staying above 40. In a price downtrend, you should see the! RSI dip ! below 20 and generally stay below 60.

USO showed these tendencies back in 2012.

Figure 6. USO with RSI Indicator. Source: FreeStockChartsOn the left-hand side of Figure 6 we see the price and RSI ranging, then both the RSI and price break prior lows, signaling increasing selling momentum and a downtrend. After reaching below 20 the RSI makes continual higher lows and higher highs into mid-August, showing buying momentum. To enter a trade during the uptrend or downtrend, use the entry and risk control methods outlined in the Relative Strength/Weakness Momentum Strategy .

The Bottom LineMomentum strategies come in many forms and can be based on price or an indicator. Apply momentum strategies in both up and down markets to maximize opportunity. During quiet and non-trending markets you'll likely want to sit on the sidelines and await higher potential trades. When you're trading momentum, the gains can be big, but so can the risks as momentum can shift very quickly and severely. Control risk with a stop loss, and always trade with an exit plan in mind.



Disclosure: No positions at time of writing.

Ryland's Bullish Run Continues - Analyst Blog

Ryland Group, Inc. (RYL) has been consistently maintaining Zacks Ranks of #1 (Strong Buy) or #2 (Buy) since Feb 2013. In fact, the company has not been downgraded to a Zacks Rank #4 (Sell) since Jul 2011.

Ryland Group is one of the largest homebuilders in the U.S, with operations in 14 states. Like other homebuilders such as Lennar Corporation (LEN), PulteGroup Inc. (PHM) and D.R. Horton, Inc. (DHI), Ryland has been gaining momentum from the strong recovery of the U.S. housing market. Recent comments by Federal Reserve Chairman Ben Bernanke to keep interest rates low for sometime provided further momentum to the stock and the housing industry, in general.

Ryland's Key Strengths

Ryland's steady growth has been supported by its geographic diversity. The company's focus on various markets helps it grow faster than some of its competitors and evade the headwinds of any particular market. In fact, the company operates in some of the most lucrative markets in the country, like southern California, Washington, D.C., Las Vegas and Charlotte.

In Jun 2013, the company acquired Dallas/Fort Worth operations and assets of LionsGate Homes. With the LionsGate acquisition, Ryland now owns 843 lots and homes for future sales. Ryland will also operate 17 active communities in the Dallas/Ft. Worth market that were previously owned by LionsGate. This is the third acquisition by RYL in the past 11 months. The other two purchases include assets of Timberstone Homes in Charlotte and Raleigh in Jul 2012 and Trend Homes in Phoenix in Dec 2012.

In addition, the company's strong cash position helps it acquire attractive land deals. As of Mar 31, 2013, the company had cash, cash equivalents and marketable securities of $614.6 million. The company invested $92 million in land purchases and $46 million in land development. All these investments help the company maintain a healthy community count. The company's solid land position, thus, places it well to meet growing demand during ! the upturn, thus giving it a competitive edge over peers who are facing land availability constraints. In fact, in Jun 2013, the company unveiled several new homes in Maryland, Atlanta and Austin.

Ryland has also benefitted from its focus on move up buyers as their numbers have increased over the last two years. In fact, move up buyers constitute 49% of the company's business and management expects the number to increase in the near term. Move-up buyers are less price sensitive thus boosting margins.

Solid First Quarter Results

On Apr 24, Ryland reported first quarter 2013 results. Ryland's first quarter 2013 earnings of 43 cents per share beat the Zacks Consensus estimate of 30 cents by 43%. Earnings increased significantly from the year-ago loss of 7 cents. Ryland's revenues in the quarter surged 73.6% year over year on the back of an increase in homebuilding revenues. The company witnessed high single digit increase in average closing price. More importantly, new orders and backlog recorded high double digit increase in the quarter.

In fact, Ryland has beaten the Zacks Consensus Estimate in all the past four quarters with an impressive average earnings surprise of 26.29%. We believe its significant land positions, broad geographic and product diversity and strong capital position will enable it to take maximum advantage of the housing recovery.

The Salesforce Love Triangle

With shares of Salesforce.com (NYSE:CRM) trading at around $40.71, is CRM an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

 

C = Catalyst for the Stock's Movement

Customers love Salesforce, investors love customers, and Salesforce loves investors. While all this is accurate, it's not entirely fair. Truth be told, Salesforce also loves its customers. In fact, it's the closest a company can come to wining and dining its customers without actually doing so. The best part is that the feeling is mutual.

Customers who have been lucky or wise enough to use Salesforce have often stated that they would be lost without having done so. For example, the Sales Cloud offers many features, all of which are based on prioritization and speed. The average Sales Cloud customer has reported a 32 percent increase in productivity, a 32 percent increase in lead conversion, and a 29 percent increase in win rates.

Salesforce is the largest provider of CRM, and it created the SAAS CRM market. Most customers prefer paying monthly opposed to buying software because they can use the latest updates. One big plus for investors is that Salesforce will always push for package upgrades so the customer will receive more features. Many customers end up happy with their upgrade.

On Glassdoor.com, Salesforce has an employee rating of 3.8 out of 5, which is one of the highest ratings seen. An impressive 76 percent of employees would recommend the company to a friend. An even more impressive 93 percent of employees approve of CEO Marc Benioff. That's what you call strong company culture!

A few negatives for Salesforce include weakening stock price momentum, weak margins, no dividend yield, a decline in earnings on an annual basis, and poor valuation.

The chart below compares fundamentals for Salesforce, SAP AG (NYSE:SAP), and Oracle Corporation (NASDAQ:ORCL). Salesforce has a market cap of $23.84 billion, SAP has a market cap of $93.03 billion, and Oracle has a market cap of $152.43 billion.

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	CRM	SAP	ORCL
Trailing   P/E	N/A	24.78	15.06
Forward   P/E	64.62	19.79	11.08
Profit   Margin	-8.87%	17.60%	28.46%
ROE	-13.85%	20.71%	24.29%
Operating   Cash Flow	$736.90 Million	$5.07 Billion	$13.72 Billion
Dividend   Yield	N/A	0.90	0.70%
Short   Position	2.90%	N/A	1.10%

 

Let's take a look at some more important numbers prior to forming an opinion on this stock.

E = Equity to Debt Ratio Is Normal

The debt-to-equity ratio for Salesforce is close to the industry average of 0.30. Debt management has been good.

	Debt-To-Equity	Cash	Long-Term Debt
CRM	0.28	$867.62 Million	$647.94 Million
SAP	0.30	$6.15 Billion	$5.83 Billion
ORCL	0.45	$33.41 Billion	$19.75 Billion

 

T = Technicals Have Weakened

Salesforce has performed well over the past three years, but that momentum has come to a halt. It has been a difficult year so far for the industry.

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	1 Month	Year-To-Date	1 Year	3 Year
CRM	-7.41%	-3.13%	3.94%	89.77%
SAP	-1.52%	-2.99%	19.00%	66.66%
ORCL	1.28%	-2.88%	11.74%	27.71%

 

At $40.71, Salesforce is trading below its 50-day and 100-day SMA, but still above its 200-day SMA.

50-Day   SMA	43.06
100-Day   SMA	42.64
200-Day   SMA	39.48

 

E = Earnings Have Been Weak             

This is a major negative. In an era when the majority of companies throughout the broader market have shown a consistent increase in earnings from 2010 to 2012, Salesforce has headed in the opposite direction. On the other hand, while many companies throughout the broader market have suffered a revenue decline in 2012, Salesforce has continued to move forward without skipping a beat.

	2008	2009	2010	2011	2012
Revenue   ($)in   billions	1.08	1.31	1.66	2.27	3.05
Diluted   EPS ($)	0.09	0.16	0.12	-0.02	-0.48

 

When we look at the previous quarter on a year-over-year basis, we see a significant increase in revenue and a slight decline in earnings.

	1/2012	4/2012	7/2012	10/2012	1/2013
Revenue   ($)in   millions	631.91	695.47	731.65	788.40	834.68
Diluted   EPS ($)	-0.01	-0.04	-0.02	-0.39	-0.04

 

Now let's take a look at the next page for the Trends and Conclusion. Is this stock an OUTPERFORM, a WAIT AND SEE, or a STAY AWAY?

T = Trends Might Support the Industry

The industry has seen a slowdown of late, which isn't a good sign as it indicates a slowdown in spending. However, the three companies mentioned in this article are well positioned to benefit from future technological trends.

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Conclusion

Salesforce is a strong company with a great company culture, impressive growth, and good debt management. On the other hand, margins and cash flow are subpar.

Top 10 High Tech Stocks To Watch For 2014

Markets returned with a vengeance on Friday, shooting higher on the Labor Department's June jobs report, which emphasized a resurgent private sector. While private payrolls surged by more than 200,000, the federal government actually cut 5,000 employees. That made for a 195,000 boost to payrolls, far higher than the roughly 165,000 analysts were looking for. The strength, while it drove stocks higher, stoked the sentiment that quantitative easing efforts will surely begin tapering sometime this year. The S&P 500 Index (SNPINDEX: ^GSPC  ) added 16 points, or 1%, to close at 1,631.

Newmont Mining (NYSE: NEM  ) was the S&P's biggest laggard, losing 4.3% Friday. The company is a gold and copper miner and, as such, is very sensitive to the ever-changing prices of those metals. Gold especially is thought of and traded as a hedge to a falling dollar, so a stronger greenback usually goes hand in hand with lower gold prices. That was the case again today, as the possibility of fewer Fed dollars flowing into the economy bid the U.S. currency higher. Gold for August delivery fell more than 3% to end just above $1,210.

Top 10 High Tech Stocks To Watch For 2014: Chinasing Investment Hldg Ltd (C16.SI)

Chinasing Investment Holdings Limited, an investment holding company, engages in the provision of computer consultancy services; and the design, development, and sale of computer software and hardware systems in Mainland China, Hong Kong, Europe, the United States, Singapore, and other Asian countries. It also involves in property and investment holding, and general trading activities; and the manufacture and trading of consumer electronic products and components, and satellite communication products, including low-noise block converters, transceivers, and digital video broadcasting decoders, which are used in satellite broadcasting, satellite telephone, satellite monitoring, and global positioning systems. In addition, Chinasing provides system integration and software installation services. The company was formerly known as Joinn Holdings Limited and changed its name to Chinasing Investment Holdings Limited in April 2008. Chinasing Investment Holdings Limited was incorpo rated in 2000 and is based in Central, Hong Kong.

Top 10 High Tech Stocks To Watch For 2014: City National Corporation (CYN)

City National Corporation operates as the bank holding company for City National Bank that provides various banking, investing, and trust services to small to mid-sized businesses, entrepreneurs, professionals, and affluent individuals. Its deposit products include demand and interest checking deposits, savings deposits, and money market accounts. The company�s loan portfolio comprises commercial loans, including lease financing; residential mortgage loans; commercial real estate mortgages; real estate construction loans; equity lines of credit; and installment loans. It also offers cash management, international banking, equipment financing, and other products and services. In addition, the company provides investment management, advisory, and brokerage services, including portfolio management, securities trading, and asset management; personal and business trust and investment services comprising employee benefit trust services, and 401(k) and defined benefit plans; and estate and financial planning, and custodial services. Further, it offers various asset classes and investment styles, including fixed-income instruments, mutual funds, domestic and international equities, and alternative investments, such as hedge funds. City National Corporation provides its services through 79 offices, including 16 full-service regional centers in Southern California; the San Francisco Bay area; Nevada; New York City; Nashville, Tennessee; and Atlanta, Georgia. The company was founded in 1953 and is headquartered in Los Angeles, California.

5 Best Clean Energy Stocks To Own Right Now: CNO Financial Group Inc. (CNO)

CNO Financial Group, Inc., through its subsidiaries, engages in the development, marketing, and administration of health insurance, annuity, individual life insurance, and other insurance products for senior and middle-income markets in the United States. The company markets and distributes Medicare supplement insurance, interest-sensitive and traditional life insurance, fixed annuities, and long-term care insurance products; Medicare advantage plans through a distribution arrangement with Humana Inc.; and Medicare Part D prescription drug plans through a distribution and reinsurance arrangement with Coventry Health Care. It also markets and distributes supplemental health, including specified disease, accident, and hospital indemnity insurance products; and life insurance to middle-income consumers at home and the worksite through independent marketing organizations and insurance agencies. In addition, the company markets primarily graded benefit and simplified issue life insurance products directly to customers through television advertising, direct mail, Internet, and telemarketing. It sells its products through career agents, independent producers, direct marketing, and sales managers. CNO Financial Group, Inc. has strategic alliances with Coventry and Humana. The company was formerly known as Conseco, Inc. and changed its name to CNO Financial Group, Inc. in May 2010. CNO Financial Group, Inc. was founded in 1979 and is headquartered in Carmel, Indiana.

Top 10 High Tech Stocks To Watch For 2014: FriendFinder Networks Inc.(FFN)

FriendFinder Networks Inc., an Internet and technology company, provides services in the social networking and Web-based video sharing markets. It is involved in creating and operating technology platforms, which run various heavily visited Websites in the world comprising AdultFriendFinder.com, Amigos.com, AsiaFriendFinder.com, Cams.com, FriendFinder.com, BigChurch.com, and SeniorFriendFinder.com. The company operates in two segments, Internet and Entertainment. The Internet segment offers services that include social networking, online personals, premium content, live interactive video, recorded video, online chatrooms, instant messaging, blogs, message board, and free e-mail, as well as photo, video, and voice sharing services through the operation of various social networking, live interactive video, and premium content Websites. This segment also operates JigoCity, a social commerce Website. The Entertainment segment produces and distributes original pictorial and vid eo content; licenses the Penthouse brand to various consumer product companies and entertainment venues; and publishes branded men's lifestyle magazines. FriendFinder Networks Inc. serves visitors, registrants, members, subscribers, and paid users. The company was formerly known as Penthouse Media Group Inc. and changed its name to FriendFinder Networks Inc. in July 2008. FriendFinder Networks Inc. was founded in 1965 and is headquartered in Boca Raton, Florida.

Top 10 High Tech Stocks To Watch For 2014: Golar LNG Limited(GLNG)

Golar LNG Limited, a mid-stream liquefied natural gas (LNG) company, engages in the transportation, regasification, and liquefaction and trading of LNG. It acquires, owns, operates, and charters LNG carriers and floating storage regasification units (FSRUs). As of March 31, 2011, the company had a fleet of 12 vessels, including 8 LNG carriers and 4 FSRUs; and a 50% equity interest in 1 vessel. Golar LNG Limited was founded in 1946 and is headquartered in Hamilton, Bermuda.

Top 10 High Tech Stocks To Watch For 2014: Shield Gold Inc.(SHG.V)

Shield Gold Inc. engages in the exploration of precious and base metal properties in Canada. The company has an option agreement to acquire interest on the La Grande Nord property and the Summit-Gaber property, which are located in the La Grande Greenstone Belt in the James Bay region of Quebec. Shield Gold Inc. is headquartered in Toronto, Canada.

Top 10 High Tech Stocks To Watch For 2014: Hyder Consulting(HYC.L)

Hyder Consulting PLC operates as a multi-national design and engineering consultancy. The company provides its consulting services in the property, transport, water, environment, energy, industry, and resources sectors in the United Kingdom, Europe, Australia, China, Hong Kong, Vietnam, and the Middle East. It offers environmental services, such as environmental assessment and management, corporate environmental risk assessment, waste and resources efficiency, sustainability, and coastal and catchment management services; geosciences services comprising land reclamation, contaminated land, and geotechnical engineering services; and management services, including asset management, management advisory, project management, and security and resilience services. The company also provides property services in the areas of acoustics, architecture, civil/development approval, facades, landscape, and urban planning; structural services in the areas of bridges, buildings, marine, tu nnels, and water; transport services consisting of highways, public transport planning, rail services, security of transport infrastructure, technology, traffic engineering, and road safety services; and water services, including water supply, modelling, and wastewater treatment. Hyder Consulting PLC is headquartered in London, the United Kingdom.

Top 10 High Tech Stocks To Watch For 2014: Inter-Citic Minera Com Npv(ICI.TO)

Inter-Citic Minerals Inc., a development stage company, engages in the acquisition, exploration, and development of mineral properties in the People?s Republic of China. Its principal property includes the Dachang gold project consisting of 4 exploration licenses covering approximately 279 square kilometers located in Qinghai province, the People's Republic of China. The company was formerly known as Inter-Citic Mineral Technologies Inc. and changed its name to Inter-Citic Minerals Inc. in December 2003. Inter-Citic Minerals Inc. was incorporated in 1985 and is headquartered in Markham, Canada.

Top 10 High Tech Stocks To Watch For 2014: Cimarex Energy Co(XEC)

Cimarex Energy Co. operates as an independent oil and gas exploration and production company primarily in Texas, Oklahoma, New Mexico, and Kansas. As of December 31, 2010, it had proved oil and gas reserves of approximately 2.05 trillion cubic feet equivalent consisting of 1.2 trillion cubic feet of gas and 138 million barrels of oil and natural gas liquids. The company was founded in 2002 and is headquartered in Denver, Colorado.

Top 10 High Tech Stocks To Watch For 2014: United Business Media plc ord(UBM.L)

UBM plc engages in the provision of data, media and business to business (B2B) communications, and marketing services worldwide. The company operates in five segments: Events, PR Newswire, Data Services, Marketing Services-Online, and Marketing Services-Print. The Events segment organizes industry exhibitions and conventions, conferences, forums, fairs, tradeshows, and other live in person events that enable communities to do business. The PR Newswire segment offers communications products and services to professionals working in marketing, public relations, corporate communications, or investor relations roles in businesses, government, and other non-commercial organizations. This segment also distributes its clients? messages and information. The Data Services segment provides data and information products, including data-based workflow products, intellectual property consultancy and analytical services, and sales lead generation programs that support professionals. The Marketing Services-Online segment offers Website sponsorships and banner advertising, as well as online directory products. The Marketing Services-Print segment publishes magazines and trade press to specialist markets. The company markets its products and services to professional and commercial communities. The company was formerly known as United Business Media Limited and changed its name to UBM plc in May 2011. UBM plc was founded in 1918 and is headquartered in Dublin, Ireland.

Cambridge Bancorp Reportd 2nd Quarter Earnings (OTCBB:CATC, OTCMKTS:CLNO)

Cambridge Bancorp (CATC)

Last Friday, CATC previously surged (+0.26%) up +0.10 at $39.00 with 600 shares in play at the close (ref. google finance July 26, 2013 – Close).

Cambridge Bancorp previously reported unaudited net income of $3,475,000 for the second quarter of 2013 compared to $3,451,000 for the same quarter in 2012. The slight increase in earnings was primarily attributable to growth in noninterest income, offset by a decrease in net interest income. Diluted earnings per share were $0.89 for the second quarter of 2013, unchanged versus for the same quarter in 2012. For the six months ended June 30, 2013, unaudited net income was $6,806,000 compared to $6,736,000 for the first half of 2012. Diluted earnings per share were $1.75 for the first six months of 2013 versus $1.74 for the same period in 2012.

Cambridge Bancorp (CATC) 5 day chart:

Cleantech Transit, Inc. (CLNO)

Cleantech Transit, Inc. (OTCMKTS:CLNO) (www.cleantechtransit.net ) through its Discovery Carbon subsidiary, develops emissions offset strategies for companies, municipalities, and countries. Last Friday, CLNO previously surged (+12.82%) up +0.025 at $.220 with 163,136 shares in play at the close (ref. google finance July 26, 2013 – Close).

CLNO 's daily range was at ($.22 – $.185) thus far and currently at $.22 would be considered a (+19900%) gain above the 52 wk low of $.0011. The stock is up +0.22 ( +9066.67%) since the concerning dates of January 28, 2013 – July 26, 2013. +9066.67% is the 6 month high and rightly so.

Cleantech Transit, Inc. (CLNO ) 5 day chart:

Macy's Attains New High - Analyst Blog

On Jul 8, 2013, shares of Macy's, Inc. (M) recorded a new 52-week high of $50.47. At the end of the trading session, the stock closed at $50.27, up approximately 33% year to date.

The current price is 2.2% below the Zacks Consensus average price target of $51.42, signifying further upside potential. Moreover, the stock is currently trading at a forward P/E of 12.72x, at par with the peer group average. The long-term EPS growth rate stands healthy at 10.7%.

Macy's has been taking prudent steps to augment sales, profitability and cash flow. These include integration of operations, consolidation of divisions and customer-centric localization initiatives. To help drive traffic, Macy's continues to focus on price optimization, inventory management and merchandise planning to generate long-term profitability, which is well evident from its record of beating the quarterly earnings expectations.

If we look at the company's earnings surprise history, Macy's has beaten the Zacks Consensus Estimates in 12 straight quarters by an average of 35.6%.

Going forward, Macy's is expected to continue with its upbeat performance through the My Macy's localization initiatives, omnichannel integration, robust online sales and effective cost management. The company is seeking to expand both the Macy's and Bloomingdale's brands.

Macy's stood by its earlier earnings guidance of $3.90 to $3.95 per share for fiscal 2013. Moreover, management now anticipates comparable-store sales to climb 3.5% for fiscal 2013.

Currently, Macy's holds a Zacks Rank #2 (Buy). Alongside, retailers like Sally Beauty Holdings Inc. (SBH), DSW Inc. (DSW) and Whole Foods Market, Inc. (WFM) attained new 52-week highs on Jul 8, 2013.

Detroit Makes History. Now What?

Detroit has assumed its place in US history as the largest-ever municipal bankruptcy. Despite its massive size and the infamy of the event, the impact on the broad municipal market impact is expected to be negligible.

Detroit assumed its place in US history as the largest-ever municipal bankruptcy. Despite its size (Detroit estimates its liabilities at $18 billion) and the infamy of the event, the broad municipal market impact is expected to be negligible .

Sooner Than Expected, But Not Unexpected

Detroit's Chapter 9 filing on July 18, although sooner than expected, was in no way a surprise to the market. The filing came one month after emergency manager Kevyn Orr's June proposal to pay creditors pennies on the dollar in settlement of debt totaling $11.5 billion. Many viewed Mr. Orr's plan as a prelude to bankruptcy from the outset. For more detail, see our recent thoughts on this subject in "Distress in Detroit."

The proposal met with tough opposition from creditors (we had our own say on this matter) and legal action from pensioners also facing severe haircuts. In fact, a motion filed in state court the same day by a pension fund seeking a temporary restraining order to prevent the filing appears to be the catalyst for the sooner-than-expected event .

What Happens Next?

The city now has to convince a bankruptcy court that it is insolvent and eligible for Chapter 9 protection. Creditors will likely argue the city is not insolvent, pointing to current cash flow and assets owned (which are potential candidates for liquidation).

Bottom line: This is going to be a long and protracted battle, with court challenges along the way. The Chapter 9 filing is but the first chapter in what is sure to be a lengthy negotiation that could offer no clarity for years. It is likely to become a very expensive exercise for the already fiscally barren city .

For the broader municipal market, we do not anticipate a widespread systemic effect and investors shou! ld expect little market impact. The city's problems, while long known to the municipal market, have had little bearing on it – a scenario we expect will continue.

While some indirect action such as outflows or price weakness could ensue in the near-term as the market digests the news, we would remind investors that headlines rarely tell the whole story. The basic fundamental credit underpinnings of the municipal market remain very healthy and, in fact, better than they were in 2008.

Detroit Is the Exception, Not the Rule

For those fearing a Detroit repeat elsewhere in the US, we would submit – there is no reason to panic. Detroit's situation is unique, as indicated by the emergency manager's own assessment :

The city's population has declined 63% since its 1950 high and 26% since 2000.Unemployment peaked at a startling 23.4% in June 2010, up from 6.3% in 2000, and remained at an elevated 18.3% in June 2012.Detroit's violent crime rate is five times higher than the national average and the highest of any large city.Approximately 40% of the city's street lights are not functioning; 78,000 structures and 66,000 lots are abandoned and blighted. Arson is prevalent, with 12,000 fires each year, 60% in derelict or unoccupied buildings.Detroit's general fund deficit currently stands at $375 million, or roughly $700 million when adjusted for recent deficit borrowing. That's within the context of a $1 billion fiscal year (FY) 2014 budget. The city had projected negative cash flow of $198 million in FY 2014, and by the end of FY 2013, will have deferred $100 million in pension funding.Municipal bankruptcies are rare, but not unprecedented. And while the federal government has already indicated a reluctance to intervene, Michigan may step in to protect the creditworthiness of the state and its municipalities, and to ensure fair treatment of all interested parties. We hope it will take action to do so, following the example of other states before it (consider Rhode Isl! and in th! e case of Central Falls). In our view, the state's failure to act could cost Michigan and its municipalities much more in the long-term than Detroit saves today.



Peter Hayes, Managing Director, is head of BlackRock's Municipal Bonds Group and a member of the Americas Fixed Income Executive Team.

Top 5 Companies To Watch For 2014

Climate change has been getting a lot of airtime lately, especially in the wake of President Obama's sweeping speech on the subject last month. Many companies have been increasingly engaged on the topic, talking more about the risks and opportunities their businesses face from the effects of a warming planet.

I've been talking a lot about climate change, too, specifically advocating for the notion that investors need to take it into account in their overall stock analyses. Judging from readers' comments questioning my intelligence and parentage, some people strongly disagree with this position!

So what if we change the discourse? What if, instead of talking about climate change, we talk about operational resilience? About business continuity? About efficiency? Because that's exactly how I heard three utilities addressing the subject today, and it was compelling.

Top 5 Companies To Watch For 2014: 8x8 Inc(EGHT)

8x8, Inc. develops and markets telecommunications services for Internet protocol (IP), telephony, and video applications. The company offers 8x8 Virtual Office Business Telephone Service, an alternative to traditional private branch exchange systems that offers automated attendants to assist callers; extension-to-extension dialing services; direct inward dial; conference bridge, 3-way calling, music on hold, call park/pick-up, call transfer, hunt groups, and do not disturb services; voice mail, including email alerts and direct transfer to mailbox; call waiting/caller-ID; distinctive tone ringing; and optional receptionist console applications. Its products also include 8x8 Complete Contact Center, an integrated hosted call center solution that consists of skill-based routing, multi-media management, real time monitoring and reporting, voice recording and logging, historical reporting, interactive voice response, CRM integration, and contact and case management tools; 8x8 IP Telephones; 8x8 Virtual Meeting, a video Web conferencing service; and 8x8 Managed Hosting and Cloud-Based Computing Solutions. In addition, the company offers 8x8 Virtual Office Pro Unified Communications that allows subscribers to manage business communications functions online and delivers various tools, such as Microsoft Outlook contacts and corporate directory integration; virtual meeting; Virtual Office Mobile extension; fax; call recording; presence management; and a view of voicemails, recordings, FAX messages, calls, and chat history. The company markets its services under 8x8 brand to end users through direct sales force, Web site, and third party resellers primarily in the United States. As of June 30, 2011, it had approximately 25,000 business customers. 8x8, Inc. was founded in 1987 and is headquartered in Sunnyvale, California.

Top 5 Companies To Watch For 2014: Walter Energy Inc.(WLT)

Walter Energy, Inc. produces and exports metallurgical coal for the steel industry primarily in the United States. The company also produces thermal and industrial coal, anthracite, metallurgical coke, coal bed methane gas, and other related products. It principally serves electric utility and industrial customers. The company was formerly known as Walter Industries, Inc. and changed its name to Walter Energy, Inc. in April 2009. Walter Energy, Inc. was founded in 1946 and is headquartered in Birmingham, Alabama.

Advisors' Opinion:

• [By Roberto Pedone]

  One name that's quickly pushing within range of triggering a major breakout trade is Walter Energy (WLT), which is a producer and exporter of metallurgical coal for the global steel industry. This stock has been rocked by the shorts so far in 2013, with shares off sharply by 66%.

  If you take a look at the chart for Walter Energy, you'll notice that this stock has been downtrending badly for the last six months, with shares plunging from over $40 to its recent low of $9.87 a share. During that downtrend, shares of WLT have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of WLT have now formed a double bottom over the last month, with shares finding buying interest as $9.87 and then at $9.96. This stock has started to rebound higher off that double bottom area, and it's now quickly moving within range of triggering a major breakout trade.

  Traders should now look for long-biased trades in WLT if it manages to break out above some near-term overhead resistance at $11.94 to its 50-day moving average of $12.39 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average volume of 9.32 million shares. If that breakout hits soon, then WLT will set up to re-test or possibly take out its next major overhead resistance levels at $14.74 to $17.50 a share. Any high-volume move above those levels will then give WLT a chance to tag $20 a share.

  Traders can look to buy WLT off any weakness to anticipate that breakout and simply use a stop that sits right below today's low of $11.59 a share, or right below $11 a share. If we get weakness below those levels, then I would key off of those double bottom levels at $9.96 to $9.87 a share. One could also buy WLT off strength once it takes out those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

  This stock is loved by the bears, since the current short interest as a percentage of the float for WLT is ridiculously high at 40.7%. The bears have also been increasing their bets from the last reporting period by 4.6%, or by about 1.10 million shares. If that breakout hits soon, then WLT could see a big short-squeeze, so make sure to have this name on your breakout trading radar.

Hot Safest Stocks To Invest In Right Now: Novellus Systems Inc.(NVLS)

Novellus Systems, Inc., together with its subsidiaries, develops, manufactures, sells, and supports equipment used in the fabrication of integrated circuits. The company operates in two segments, Semiconductor Group and Industrial Applications Group. The Semiconductor Group segment provides equipment used in wafer processing, advanced wafer-level packaging, and light-emitting diode (LED) manufacturing. Its deposition systems use chemical vapor deposition (CVD), physical vapor deposition (PVD), and electrochemical deposition (ECD) processes to form transistor, capacitor, and interconnect layers in an integrated circuit; and High-Density Plasma CVD (HDP-CVD) and Plasma-Enhanced CVD (PECVD) systems employ chemical plasma to deposit dielectric material within the gaps formed by the etching of aluminum, or as a blanket film that can be etched with patterns for depositing conductive materials into the etched dielectric. This segment?s CVD Tungsten systems are used to deposit co nductive contacts between transistors and interconnects; PVD systems are used to deposit conductive aluminum and copper metal layers by sputtering metal atoms; and Electrofil ECD systems are used for depositing copper to form the conductive wiring on integrated circuits using copper interconnects. The Industrial Applications Group segment provides grinding, lapping, and polishing equipment for fine-surface optimization. It offers products for use in the semiconductor and LED manufacturing, automotive, aerospace, medical, green energy, and glass and ceramics industries, as well as manufacturers of products, such as pumps, transmissions, compressors, and bearings. The company markets its products through direct sales force and manufacturer?s representatives primarily in Europe, the United States, Korea, Japan, China, Taiwan, and southeast Asia. Novellus Systems, Inc. was founded in 1984 and is headquartered in San Jose, California.

Top 5 Companies To Watch For 2014: HMN Financial Inc.(HMNF)

HMN Financial, Inc. operates as the holding company for Home Federal Savings Bank that provides community banking services in Minnesota and Iowa. The company accepts deposits and originates or purchases loans. It offers various deposit products to retail and commercial customers, including passbook, negotiable order of withdrawal, money market, non-interest bearing checking, and certificate accounts, including individual retirement accounts. The company also provides one-to-four family residential, commercial real estate, and multi-family mortgage loans, as well as consumer, construction, and commercial business loans. In addition, it invests in mortgage-backed and related securities, the U.S. government agency obligations, and other permissible investments. HMN Financial serves the southern Minnesota counties of Fillmore, Freeborn, Houston, Mower, Olmsted, and Winona, as well as portions of Steele, Dodge, Goodhue, and Wabasha through its corporate office in Rochester, Min nesota and 10 branch offices located in Albert Lea, Austin, La Crescent, Rochester, Spring Valley, and Winona, Minnesota; and the Iowa counties of Marshall and Tama through its branch offices located in Marshalltown and Toledo, Iowa. The company was founded in 1933 and is based in Rochester, Minnesota.

Top 5 Companies To Watch For 2014: Rare Earth Metals Inc (RA.V)

Rare Earth Metals Inc., a development stage company, focuses on the acquisition and development of mineral properties in North America. The company explores for rare earth elements, niobium, beryllium, zirconium, and iron ore deposits, as well as bituminous coal deposits. Its flagship properties include the Clay-Howells Prospect consisting of 45 patented claims and 49 unpatented claims totaling 11,781 hectares located in northeast of Kapuskasing, Ontario; and the Red Wine project with a total of 1360 claim units comprising 340 square kilometers located in west central Labrador. The company is based in Thunder Bay, Canada.

Wish to become rich? Try these financial tenets

Becoming rich is, undoubtedly, a universal wish. If you too fall in the millionaire-aspirants category, presented below are some important financial tenets that will surely help you achieve your dream.

1. If your friends determine your worth by what phone you own, it's time to get better friends, not better phones.

Smartphones have many features. But they also cost much more than a basic phone. It wouldn't be 'financially' wise to buy a smartphone, if you don't need to run advanced applications. When a simple phone serves your purpose, why waste money on the 'needless' features. (By the way, I have observed that, forget about using them, many people aren't even aware of the various features in their phone.)

Instead, save this money and invest it wisely. Many, however, won't think so. They are of the opinion that their prestige comes from the type of phone they own…and hence needless outflow of money.

This is just one example of money pointlessly draining out from your pockets. What about the costly branded products with little or no additional utility excepting the 'tag'; the luxury cars or gadgets to flaunt; or the frequent dinners at expensive restaurants?

Of course, this doesn't mean that you should stop spending. Spending, by itself, is not the issue. The issue is how you spend your money - thoughtlessly or rationally; intelligently or foolishly; regularly or sparingly. Choice is yours!

2. Budget is like flying a kite. The purpose of the thread is not to prevent the kite from flying. In fact, without the thread the kite will not fly far or fly high or fly for too long.

Many tend to live from salary to salary, without giving a serious thought to either balancing their budgets or planning their finances.

Some try to put it off for tomorrow; but the tomorrow never comes.
Some do a half-hearted attempt; it serves no real purpose.

Some start enthusiastically; but within a few months are back to square one.
Some don't fool themselves; they never even start.

In fact, budgeting is normally considered to be nothing but trying to balance the cash inflows and outflows; prioritizing so as to fulfill as many needs and desires as possible within the constraints of a given income. This, however, is a narrow perspective about budgets.

Budgeting is lot more than that. In fact, I use the word BUDGET as an acronym for B (Beacon or guide), U (checks Unnecessary spending), D (helps manage Debt), G (promotes Goal setting), E (prepares for Emergencies) and T (Taste financial success).

Budget gives you a defined economic freedom; it is not a financial restriction. Instead of wandering aimlessly (and wasting money) you give 'purposeful' direction to your money.

3. Avoid safety. Protect Risk.

Most of us have aversion to risk. It evokes fear of loss. Therefore, the natural tendency is to look for safety. However, there is a trade-off between safety and returns. If you prefer safety, you have to be content with nominal returns.

Without risk, there's going to be no riches.

In fact, 100% safety is also a myth. Keeping the money under your mattress or in a bank may appear safe. But don't forget - inflation will erode its value day-by day. Isn't this also a form of risk? Therefore, there is no such thing as 'no risk' or 'zero risk'.

Besides, just as a coin has two sides to it, risk too has two sides i.e. threat and opportunity. But there is one key difference between them. Unlike the coin, risk doesn't always have to be a 50:50 game of chance. You can suitably 'control' risk to get more wins than losses.

Instead of hiding behind safe investments, you have to hide behind risk-protection tools. Just as you have safeguards against fire when cooking, you have to build safeguards for risk too when investing; to keep the losses to minimum should the things go wrong.

4. Hope won't make you money...only your acumen will do so.

You are nowadays witness to the unpredictable twists and turns of the equity markets from minute to minute, thanks to 24*7 tickers on the umpteen business channels, internet and SMSs. One moment ago you are sitting on a huge pile of profit and yet the very next moment may see you crash landing into deep abyss.

Most people get worried with this chaotic movement. Yet, it is precisely this chaos that offers the opportunity to make big money. If you know how to intelligently ride this wave, you have made it. But, get it wrong and you can fall flat on your face. This roller coaster ride can both be a source of prosperity and poverty.

There are many success stories on the stock market. But the disasters outnumber the victories by a huge margin. Why? Because most people do not have the mental capacity to digest the sharp ups and downs. The difference between winning and losing lies in the temperament.

Markets will not move the way you desire. Yet most people invest with the hope that the markets will rise - soon after they have made their purchase. Markets cannot be dictated or predicted or manipulated.  Therefore, firstly get over this tendency to time the markets.

Then, given this volatility, it is best to tread and trade carefully. This is best achieved by not committing yourself fully at one go. If you invest small amounts every month, you are entering the market at different levels. This normally lowers your average cost of purchase. And, as you all know, lower the cost the better are the chances of making profits.

Bottom-line: You make money only when you respect money

Sanjay Matai is a personal finance advisor, author and online financial trainer. There's a lot more free stuff to read on his website www.wealtharchitects.in . Emails welcome at contact@wealtharchitects.in

Best Buy's Best Options

By MATTHEW INDYKE and BRIAN ZEN
Best Buy (BBY) was once the darling of the electronics retail industry, having found great success selling technology products and services in stores across the world. It thrived on its technology products and superior customer service led by its self-described "geek squad." The retailer particularly thrived when it shifted from a product-based model to a service-oriented model. Best Buy's industry dominance appeared secure when then-archrival Circuit City declared bankruptcy and liquidated in 2009. Furthermore, in its industry, Best Buy had a stronghold over the smaller corner stores like Radio Shack.

But declining movie and CD sales, along with consumers' diminishing desire for more giant televisions, caught up with Best Buy. The company now finds itself competing as a big box retailer in a business that is rapidly going online. As investors, what we want to know is: Is Best Buy the latest brick-and-mortar retailer headed for the exits or do they have what it takes to compete with online retailers selling similar products?

[ Enlarge Image ]

Best Buy no longer the best

Best Buy models its business on high-quality customer service yet many of its customers report low satisfaction ratings. It all starts with the employees and top management. Talk about the sales force they put out in stores. Salespeople are being trained to be more persuasive with customers and less informative. So, more energy is focused on using sales tactics to lure customers to the stores. And less energy is being spent on knowing what they are selling. It is the top management's job to fix this but they've left this problem ignored along with many others that have plagued Best Buy recently.

Management has given little to no focus on updating Best Buy's outdated business model. The business needs an overhaul in a day of age where brick-and-mortar stores are going the way of r! ecord players. The problem is that management itself is in the middle of an overhaul thanks to its incompetence in plotting Best Buy's future. This is ill timed given the high level of competition from online-based businesses and all-purpose retailers that are making Best Buy a less desirable company for customers. If it doesn't move to change fast, Best Buy will never catch up to powerful competitors like Amazon (AMZN).

Signs of hope for BBY

Despite all its problems, Best Buy still has the opportunity to survive in the long run. They carry an existing market for high-tech electronic equipment sold in specialty stores. And there are plenty of customers in the market who want to see a product firsthand and receive information directly from a professional before making a purchase. Consider yourself if you were in the market for a flat-screen TV. Wouldn't you want to physically see the picture quality and test out its features before committing? Best Buy is one of the few places where you can do that. If the retailer ever gets its act together with better service and achieves lower prices, Best Buy makes the store experience more meaningful and customers feel better about doing business with them.

Best Buy could also improve its store experience by offering items other than electronics. It would give customers more reasons to venture out to Best Buy. The retailer has the flexibility to revamp its inventory base and turning into an all-purpose retailer is one good way to get started. Another wise move would be eliminating inventory that doesn't sell well on a regular basis. The retailer has the technological assets on hand to reinvent itself and a competent management team can figure out how to get Best Buy back on its feet again.

Customers no longer finding best buys

"Best Buy doesn't fully understand its customers' point of view," says Larry Downes, an Internet retail analyst and consultant. His prior shopping experience with a friend confirms this notio! n. This e! xcerpt was taken from the Forbes article Why Best Buy Is Going out of Business... Gradually:

"A few days ago, I visited a Best Buy store in Pinole, CA with a friend. He's a devoted consumer electronics and media shopper, and wanted to buy the 3D blu ray of "How to Train Your Dragon," which Best Buy sells exclusively. According to the company's website, it's backordered but available for pickup at the store we visited. The item wasn't there, however, and the sales staff had no information.

But my friend decided to buy some other blu-ray discs. Or at least he tried to, until we were "assisted" by a young, poorly groomed sales clerk from the TV department, who wandered over to interrogate us. What kind of TV do you have? Do you have a cable service, or a satellite service? Do you have a triple play service plan?

He was clearly—and clumsily–trying to sell some alternative. (My guess is CinemaNow, Best Buy's private label on-demand content service.) My friend politely but firmly told him he was not interested in switching his service from Comcast. I tried to change the subject by asking if there was a separate bin for 3D blu rays; he didn't know."
Downes confirms our belief that Best Buy is all about sales tactics and less about direct knowledge. Some employees will not even know where products are located in the store's sporadic layout. And worst of all, employees are getting in the way of a customer who's trying to self-service before asking an employee for assistance. Best Buy isn't practicing customer service. "It's practicing anti-service," Downes exclaims.

BBY's lack of strategic direction

Best Buy's management team, once led by CEO Brian Dunn, is left to fight a losing battle on multiple fronts. Dunn announced several initiatives that he thinks will reverse the negative financial trends. And they are:
Closing 50 big-box storesShrinking other storesOpening more small Best Buy Mobile stores. But these are nothing more! than a r! eaction to Best Buy's recent adversity. Dunn is trying to protect short-term profits without a solid plan on a long-term turnaround. Dunn's ability to manage the challenges of retailing in the present day has been coming under fire. Board of Directors member Mike Mikan would succeed Dunn as interim CEO but not before management announced that they had not settled on a long-term CEO. It's pretty clear that Best Buy needs fresh blood in its top ranks in order to promote its business brand again. Current and past management, unfortunately, has failed too many times to figure out how to reinvent the Best Buy business.

Competition on the internet and beyond

Online-only competitors like Amazon (AMZN) have thrived off of Best Buy's spacious and colorful showroom, making it a destination for testing products but not for buying. The Apple (AAPL) brand has established itself as the wave of the future with its signature products and revolutionary retail stores. Both companies have many other things that Best Buy doesn't have at the moment. Apple and Amazon operate a successful internet-based business. They provide high-quality customer service that actually leads to high customer satisfaction. They are programmed for basic inventory management.

Customers, naturally, opt for the cheaper alternative of ordering a product online. Another advantage of shopping online is that customers can compare product prices on the spot. "When the stuff you're selling become commodities, price matters a lot more than service," says retail consultant Howard Davidowitz. He suggests that only the most loyal customers continue to purchase directly from Best Buy, with or without better service. Not to mention that if a customer has a poor service experience at Best Buy, they seek to avoid it at all costs.

With so much user feedback, even a site like Amazon with no salesmen can be more informative than Best Buy's salesmen altogether.

Walmart (WMT) takes away from Best Buy's profit! ability s! ince it operates a more diversified low-cost business where products, including consumer electronics, are sold at a discount. Best Buy's business, right now, is less diversified and it charges a premium for its products. And it needs an overhaul if it wants to compete with Walmart on price.

Where can Best Buy find success again?

Vice President of Industry Analysis Stephen Baker, in his article One Analyst Sees the Better Side of Best Buy from TheStreet.com, lays out the case that Best Buy remains the dominant retailer in its category and is in the best position to succeed in the coming years: "Best Buy's share of consumer technology revenue in 2011 stood at 19 percent of hardware sales. That's exactly what it was in 2010 and what made it the leader in sales by a substantial margin."

Through all its troubles, the retailer continues to dominate sales of high-tech equipment like computers, flat-screen TVs, and stereos. And Best Buy is the last remaining big-box consumer electronics retailer outside of discount retailers like Walmart.

Two other strategic options would help Best Buy going forward:
Figuring out additional products that could be sold in their storesOffering something exclusive that customers can't get anywhere else
Walmart went from not selling food to being the biggest grocer in the country. Best Buy should test a similar model. One suggestion is to conduct a need survey targeting consumers who shop there along with the best and brightest marketing analysts. Best Buy, after all, has the technology to forecast how it will fare under different scenarios. And the company itself has decades of experience in retail, in distribution, in forecasting and in marketing and sales. It has, one presumes, computer systems that can be upgraded to integrate with a new online front end, should they eventually decide to move a part of their business online.

What Best Buy needs is a change in corporate culture. They need a team that can properly analyze the co! mpany's! assets. And they need a team that can figure out how to use the assets to the company's best advantage. It is not too late for Best Buy to solve its problems.

Is Procter & Gamble Still a Winner?

With shares of Procter & Gamble Co. (NYSE:PG) trading at around $77.75, is PG an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

C = Catalyst for the Stock's Movement

Do positives still outweigh negatives for Procter & Gamble? That's for the reader to decide. However, an opinion will be given in the Catalyst section.

Positives:

Improving market trends in North America Health Care segment saw 8 percent organic sales growth last quarter year-over-year Strong margins Strong cash flow 3.10 percent yield Reduced share count Lower taxes Strong cost savings (overall) Quality debt management (stronger than peers) Held up relatively well in 2008/early 2009 Analysts love the stock: 13 Buy, 12 Hold, 0 Sell Plans to repurchase $6 billion worth of stock Sensational long-term stock performance Innovation and portfolio expansion in Health Care segment

Negatives:

Weak guidance Foreign currency headwinds Weakness in Beauty segment (increased competition) Increased marketing costs

It should be noted that Procter & Gamble has an extraordinarily high rating on Glassdoor.com. Employees have rated their employer a 3.9 of 5. That might not sound high to those unfamiliar with Glassdoor ratings, but it's one of the highest ratings we have seen. This indicates that the company culture is very strong. An amazing 88 percent of employees would recommend the company to a friend, and a relatively impressive 76 percent of employees approve of CEO Bob McDonald.

Now let's take a look at some comparative numbers. The chart below compares fundamentals for Procter & Gamble, Kimberly-Clark Corporation (NYSE:KMB), and Colgate-Palmolive (NYSE:CL). Procter & Gamble has a market cap of $212.74 billion, Kimberly-Clark has a market cap of $40.10 billion, and Colgate-Palmolive has a market cap of $56.10 billion.

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	PG	KMB	CL
Trailing   P/E	17.39	22.68	24.58
Forward   P/E	17.93	17.03	19.03
Profit   Margin	15.61%	8.58%	13.60%
ROE	17.53%	35.62%	110.92%
Operating   Cash Flow	$14.45 Billion	$3.31 Billion	$3.31 Billion
Dividend   Yield	3.10%	3.10%	2.20%
Short   Position	0.90%	2.10%	1.10%

 

Let's take a look at some more important numbers prior to forming an opinion on this stock.

E = Equity to Debt Ratio Is Normal

The debt-to-equity ratio for Procter & Gamble is close to the industry average of 0.50. It's also considerably stronger than the debt-to-equity ratios for its peers.

	Debt-To-Equity	Cash	Long-Term Debt
PG	0.47	$5.88 Billion	$32.22 Billion
KMB	1.41	$1.11 Billion	$7.03 Billion
CL	2.65	$1.10 Billion	$5.36 Billion

 

T = Technicals Are Strong    

Procter & Gamble hasn't just been a steady performer over the past three years, but for several decades.

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	1 Month	Year-To-Date	1 Year	3 Year
PG	0.10%	16.28%	24.89%	37.65%
KMB	5.20%	24.79%	38.25%	91.25%
CL	3.59%	16.32%	24.09%	56.79%

 

At $77.75, Procter & Gamble is trading below its 50-day SMA, but above its 100-day SMA and 200-day SMA.

50-Day   SMA	77.84
100-Day   SMA	74.83
200-Day   SMA	71.29

 

E = Earnings Have Steady                    

Earnings haven't been impressive in a growth sense, but they have been impressive in regards to consistency and size. Procter & Gamble is working hard to improve its bottom line. Even if the company isn't successful at this attempt in the near future, it's likely to be successful down the road. As far as revenue goes, it has consistently improved over the past three years. Any revenue improvement is a positive considering many companies throughout the broader market suffered revenue declines in 2012.

	2008	2009	2010	2011	2012
Revenue   ($)in   billions	81.75	76.69	78.94	81.10	83.68
Diluted   EPS ($)	3.64	4.26	4.11	3.93	3.66

 

When we look at the last quarter on a year-over-year basis, we see improvements in revenue and earnings.

	3/2012	6/2012	9/2012	12/2012	3/2013
Revenue   ($)in   billions	20.19	20.21	20.74	22.18	20.60
Diluted   EPS ($)	0.82	1.24	0.96	1.39	0.88

 

Now let's take a look at the next page for the Trends and Conclusion. Is this stock an OUTPERFORM, a WAIT AND SEE, or a STAY AWAY?

T = Trends Support the Industry

While there will be hiccups, this is an industry that always wins over the long haul. One of the biggest threats would be a weakening consumer choosing to go with cheaper generic products. However, there is so much loyalty throughout the industry that there would have to be an economic catastrophe for this to have a significant impact.

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Conclusion

Procter & Gamble has taken a few hits through the years, including the late 1980s, 2000, and 2008, but it always eventually went on to make new highs. Innovation and top-tier management have been the keys to success. And when there are difficult times, the generous yield should help ease the pain for investors.

5 Best Gold Stocks To Own Right Now

Millions of investors have turned to dividend stocks to provide income, and they can ill-afford to have those stocks cut their payouts right now. Yet in one sector, things look particularly dangerous for dividend investors right now.

In the following video, Fool markets analyst Mike Klesta talks with Fool contributor Dan Caplinger about this dangerous sector. As Dan notes, with large drops in revenue expected in the current quarter, several companies in the industry have already been forced to cut their dividends dramatically, and further cuts could come in the near future if prospects for the industry don't rebound quickly. Dan concludes with some guidance on what to look for in assessing whether the industry can avoid further problems down the road and how price increases in ETFs SPDR Gold (NYSEMKT: GLD  ) and iShares Silver (NYSEMKT: SLV  ) could help companies sustain their dividends.

5 Best Gold Stocks To Own Right Now: NEW GOLD INC.(NGD)

New Gold Inc. engages in the acquisition, exploration, extraction, processing, and reclamation of mineral properties. The company primarily explore for gold, silver, and copper deposits. Its operating properties include the Mesquite gold mine in the United States; the Cerro San Pedro gold-silver mine in Mexico; and the Peak gold-copper mine in Australia. The company also has development projects, including the New Afton gold, silver, and copper project in Canada; and a 30% interest in the El Morro copper-gold project in Chile. The company was formerly known as DRC Resources Corporation and changed its name to New Gold Inc. in June 2005. New Gold Inc. was founded in 1980 and is headquartered in Vancouver, Canada.

Advisors' Opinion:

• [By Christopher Barker]

  This stock has set the gold standard for share price appreciation among gold miners, advancing more than 140% since I introduced Fools to the new face of New Gold back in January 2010. Looking out over the long-term horizon, New Gold has constructed a gorgeous development pipeline to complement its trio of producing gold mines, featuring: a low-risk 30% stake in Goldcorp's El Morro project in Chile, the New Afton copper and gold project in British Columbia (with production scheduled to begin mid-2012), and the recently acquired Blackwater project north of New Afton.

  Although I expect the Blackwater deposit to expand considerably with further exploration, the project's initial indicated gold resource of 1.8 million ounces already leaves New Gold in command of 14.7 million ounces of measured and indicated gold resource. Tossing in copious supplies of by-product metals -- most notably 83.5 million ounces of silver and 3.5 billion pounds of copper -- New Gold is positioned to enjoy consistently low production costs throughout its sustained growth trajectory.

5 Best Gold Stocks To Own Right Now: CME Group Inc.(CME)

CME Group Inc. operates the CME, CBOT, NYMEX, and COMEX regulatory exchanges worldwide. The company provides a range of products available across various asset classes, including futures and options on interest rates, equity indexes, energy, agricultural commodities, metals, foreign exchange, weather, and real estate. It offers various products that provide a means of hedging, speculation, and asset allocation relating to the risks associated with interest rate sensitive instruments, equity ownership, changes in the value of foreign currency, credit risk, and changes in the prices of commodities. CME Group owns and operates clearing house, CME Clearing, which provides clearing and settlement services for exchange-traded contracts and counter derivatives transactions; and also engages in real estate operations. Its primary trade execution facilities consist of its CME Globex electronic trading platform and open outcry trading floors, as well as privately negotiated transact ions that are cleared and settled through its clearing house. In addition, the company offers market data services comprising live quotes, delayed quotes, market reports, and historical data services, as well as involves in index services business. CME Group?s customer base includes professional traders, financial institutions, institutional and individual investors, corporations, manufacturers, producers, and governments. It has strategic partnerships with BM&FBOVESPA S.A., Bursa Malaysia Derivatives, Singapore Exchange Limited, Green Exchange, Dubai Mercantile Exchange, Johannesburg Stock Exchange, and Bolsa Mexicana de Valores, S.A.B. de C.V., as well as joint venture agreement with Dow Jones & Company. The company was formerly known as Chicago Mercantile Exchange Holdings Inc. and changed its name to CME Group Inc. in July 2007. CME Group was founded in 1898 and is headquartered in Chicago, Illinois.

10 Best Tech Stocks For 2014: Northgate Minerals Corporation(NXG)

Northgate Minerals Corporation, together with its subsidiaries, engages in exploring, developing, processing, and mining gold and copper deposits in Canada and Australia. Its principal producing assets include 100% interests in the Fosterville and Stawell Gold mines in Victoria, Australia; and the Kemess South mine located in north-central British Columbia, Canada. The company was formerly known as Northgate Exploration Limited and changed its name to Northgate Minerals Corporation in May 2004. Northgate Minerals Corporation was founded in 1919 and is headquartered in Toronto, Canada.

Advisors' Opinion:

• [By Christopher Barker]

  I've been reminding Fools to consider positioning for Northgate Minerals' golden explosion for months, and patient gold investors continue to await the day when Northgate's powerful prospects are more fully reflected in the shares. Construction of the critical Young-Davidson mine continues right on schedule, and first production now stands about two quarters away. That means Northgate is reasonably likely to achieve its 2012 production target of 300,000 ounces, followed by 350,000 ounces in 2013. Meanwhile, Northgate recently drilled "one of the best holes ever intersected on the property" -- featuring 4.31 grams of gold per ton over a very wide 79.6-meter segment -- from a new discovery zone outside of the existing 2.8 million-ounce reserve.

  If Young-Davidson were Northgate's sole asset, these shares would still be undervalued here at about $2.60 per share. With a preliminary assessment looming for the reworked Kemess Underground project, a new drill program at the Awakening Gold project in Nevada, and two operating gold mines in Australia, Northgate figures among the clearest bargains in the gold patch.

5 Best Gold Stocks To Own Right Now: Thompson Creek Metals Company Inc.(TC)

Thompson Creek Metals Company Inc., through its subsidiaries, engages in mining, milling, processing, and marketing molybdenum products in the United States and Canada. The company?s principal properties include the Thompson Creek Mine and mill in Idaho; a metallurgical roasting facility in Langeloth, Pennsylvania; and a joint venture interest in the Endako Mine, mill, and roasting facility in British Columbia. It also holds interests in development projects comprising the Davidson molybdenum property and the Berg copper-molybdenum-silver property located in northern British Columbia; the Howard?s Pass property, a lead and zinc project situated in the Yukon territory-northwest territories border; and the Maze Lake property, a gold project located in the Kivalliq district of Nunavut. The company produces molybdenum products, primarily molybdic oxide and ferromolybdenum, as well as soluble technical oxide, pure molybdenum tri-oxide, and high purity molybdenum disulfide. As o f December 31, 2010, its consolidated recoverable proven and probable ore reserves totaled 462.2 million pounds of contained molybdenum in the Thompson Creek Mine and the Endako Mine. The company was formerly known as Blue Pearl Mining Ltd. and changed its name to Thompson Creek Metals Company Inc. in May 2007. Thompson Creek Metals Company Inc. is based in Denver, Colorado.

Advisors' Opinion:

• [By Christopher Barker]

  My recent survey of bargain-basement stock valuations among gold miners identified Thompson Creek Metals as a glaring opportunity for value investors. The miner sports two world-class molybdenum mines with 534 million pounds of reserves between them, along with an array of attractive development projects in the pipeline. Foremost among those is the Mt. Milligan copper and gold project, where Thompson Creek expects to launch itself into the ranks of intermediate gold producers with production commencing in late 2013.

  With 6 million ounces of gold reserves, accompanied by 2.1 billion pounds of copper, Mt. Milligan will deliver about 262,100 ounces of gold per year for the first six years of a 22-year mine life, averaging 194,500 ounces annually over that entire span. Although 25% of that gold production is already spoken for through a gold stream agreement with Royal Gold (Nasdaq: RGLD  ) , Thompson Creek Metals is sure to enjoy a powerful cash-flow explosion.

5 Best Gold Stocks To Own Right Now: First Majestic Silver Corp.(AG)

First Majestic Silver Corp. engages in the production, development, exploration, and acquisition of mineral properties with a focus on silver in Mexico. The company owns interests in La Encantada Silver Mine comprising 4,076 hectares of mining rights and 1,343 hectares of surface land located in Coahuila; La Parrilla Silver Mine consisting of mining concessions covering an area of 69,867 hectares; and San Martin Silver Mine comprising approximately 7,841 hectares of mineral rights and approximately 1,300 hectares of surface land rights located in Jalisco. It also holds interests in Del Toro Silver Mine consisting of 393 contiguous hectares of mining claims and an additional 129 hectares of surface rights located in Zacatecas; Real de Catorce Silver Project comprising 22 mining concessions covering 6,327 hectares located in San Luis Potosi state; and Jalisco Group of Properties consisting of mining claims totalling 5,240 hectares located in Jalisco. The company was founded in 1979 and is headquartered in Vancouver, Canada.

Advisors' Opinion:

• [By Goodwin]

  The shares closed at $88.19, down $1.1, or 1.23%, on the day. Its market capitalization is $77.08 billion. About the company: Siemens AG manufactures a wide range of industrial and consumer products. The Company builds locomotives, traffic control systems, automotive electronics, and engineers electrical power plants. Siemens also provides public and private communications networks, computers, building control systems, medical equipment, and electrical components. The Company operates worldwide.