Best Mortgage Insurance 2013: January 2014

Friday, January 31, 2014

A Strong Prognosis For Healthcare Stocks

As the politicians continue to debate the Affordable Care Act (ACA), the healthcare sector has emerged as one of the stock markets biggest winners. As of the end of October, the Health Care Select Sector SPDR (NYSE:XLV) –which tracks healthcare-related firms in the S&P 500- has returned more than 33% since the start of the year. The prevailing idea is that under the ACA, more individuals have access to insurance and care.

That means there will be plenty of profits for sector as the law rolls out.

And while the ACA has been the driving force in the short term, the healthcare sector still has plenty of longer term catalysts in the wings. From our aging population to rising middle class wealth in the emerging world, the prognosis for the healthcare sector is quite rosy. For investors, betting on the industry still makes plenty of portfolio sense.

A Mired Of Positive Factors

Despite its recent gains, investors may not want to give up on the healthcare sector just yet. That's because things could just really getting cooking for the industry.

First, the 800lb gorilla in the room is the ACA. According to estimates by the Congressional Budget Office, the law will greatly reduce the number of uninsured Americans significantly. By 2018, the ACA will add another 32 million Americans to insurance rolls. That includes expanded enrollments in Medicaid programs as Obamacare requires states to expand programs for the poor to everyone. While the bill may see revisions, it stands to reason that more people having access to healthcare solutions is a net-positive for stocks within the sector.

Then there is our quickly aging population to deal with. According to the US Census Bureau, roughly 14% of Americans are currently 65 years or older. However, that percentage expected to rise to 25% in about 10 years. Expanded further, that equates to roughly 10,000 baby boomers a day turning 65 years-old, every day for the next 20 years. Similar demographic trends are underway in bot! h developed Europe and Asia. Japan's 65 and older population now sits at more than a quarter of its population. As our population ages, more and better healthcare solutions will be required and demanded from that older populace.

In the emerging world, the opposite is true. Faster-growing and younger populations in places like Indonesia and China will require more healthcare solutions to prevent widespread epidemics. At the same time, rising incomes and middle class populations will help drive new drug and therapy demand as more people can now actually afford to visit a doctor.

All in all, these factors point to a rosy demand picture for the healthcare industry over the longer term.

Writing A Rx For Your Portfolio.

Given the long-term demographic shift as well as the floor created by Obamacare, investors may want to overweight healthcare stocks. While several have surged- such as Biogen's (Nasdaq:BIBB) 300% gain- many are still trading for peanuts given their long term potential.

A prime pick could be the Vanguard Health Care ETF (NYSE:VHT) remains one of the cheapest options for broad exposure. The fund tracks 291 different firms including heavyweights Bristol-Myers Squibb Company (NYSE:BMY) and device maker Medtronic, (NYSE:MDT). Year to date, the VHT is up nearly 30%. Overall, the fund is a great broad and cheap way to add the healthcare sector to a portfolio. Expenses for the ETF are just 0.14% Likewise, the iShares US Healthcare ETF (NYSE:IYH) is a good- albeit not as broad in terms of holdings- choice as well.

However, given the overall rise in healthcare stocks, investors may want to be more selective in their choices.

Some of the best plays lie within the wide moated pharmaceutical and biotech firms. After years of struggling many drug makers have vastly improved their development pipelines with higher-tech drugs. Last year, the 21 largest drug makers had 429 biotech products in development. Leading the way are major pharmas Roche (OTCBB:RHHBY) and GlaxoSmithKline (NYSE:GSK). Biotechs have allowed Glaxo to jump-over its "patent cliff" issues and finally realize increasing revenues and earnings per share are rising again. On the pure-biotech side, Amgen (NASDAQ:AMGN) has been cited by analysts for its strong pipeline coming to market in the next few years. However, all of these firm's current share prices still don't into account for their newfound pipeline potential.

The Bottom Line

Despite the healthcare sectors recent torrid run, there's still plenty to like about stocks in the industry. Aside from tailwi! nds created by the Affordable Care Act, demographics is playing a huge future role in healthcare stock gains. For investors, adding a dose of the industry still seems prudent. The previous picks make ideal selections to the play the growth in healthcare.

Disclosure - At the time of writing, the author did not own shares of any company mentioned in this article.

Thursday, January 30, 2014

Don't Be Duped By High Dividend Yields, Growth Matters

For many investors, in fact, it's hard to remember anything positive that has come out of the nation's capital in recent months, but something very positive for the investor community has happened, and it actually wasn't too long ago.

Had the so-called Bush tax cuts been allowed to expire at the end of last year, qualified dividends would have been subject to ordinary income tax rates, which for high earners is currently 39.6%. In a rare show of bi-partisanship, both sides came together and hammered out a deal that essentially capped qualified dividend taxes at 20% and made such tax rates a permanent part of the tax code.

Unlike so many of the budget and tax battles that consume Washington today on a recurring basis, the issue of dividend tax rates has largely been decided: They are simple and transparent and there are no expiration dates or sunset provisions attached.

While this has positioned dividend-yielding stocks as a very attractive option for investors, not every dividend-paying stock is created equal. With interest rate hikes possible in the near future due to the Fed potentially paring back its bond purchases, yield is increasingly taking a backseat to growth potential.

Consider utilities, which historically pay high dividends. In a rising interest rate environment, utility stocks tend to behave much like bonds, as prices drop and competition from Treasuries picks up. There is also the reality that many dividend-paying companies are already maxed out. In the face of declining cash flows, such companies will be unable or unwilling to increase dividends.

Rather than plowing headlong into dividend-paying stocks that have little prospect of increasing their payouts, investors should focus on companies with lower dividend yields but longer runways for growth. Such companies typically have low debt levels and significant pricing power, allowing them to pass any additional expenses to the end customer.

The following are four companies that are set to grow their dividends more than the S&P average and remain attractive in a rising interest rate environment:

Digital Realty Trust (DLR) – Digital Realty is real estate investment trust that invests in properties that house data and tech professional service companies. It has 127 holdings in 32 markets across the world, but most of its properties are located in the United States. The dividend yield is 5.5%, which has steadily increased at a compounded annualized rate of 21% over the last ten years, nearly triple the rate of the S&P 500. The good news is that Digital Realty is likely to grow its dividend even more as global demand for "anywhere access" data increases.

Equity Residential Equity Residential (EQR) – Also a REIT, Equity is placing an heavy emphasis on apartment complexes located on both coasts, where rents tend to be higher and turnover is generally lower than the national averages. Following its acquisition of Archstone late last year, the company is now poised to sell $8 billion in properties. Equity pays three even quarterly dividends, plus a special year-end dividend, totaling a 3.6% yield over the last year. Its dividend growth rate has accelerated to 25% on a trailing 12-month basis.

Wells Fargo Wells Fargo & Co. (WFC) – The bank currently pays out a dividend that yields 2.8%, which is only 30% of its net income. Don't expect income to rise beyond the S&P average in coming years, as the company is not positioned to make any major acquisitions in the near future. Although Wells Fargo cut its dividend dramatically in 2009 (like most financials), there is a good chance there will be annual dividend increases of at least 20% over the intermediate term.

Special Offer: Click here for a 30-day free trial of Forbes Dividend Investor.

On the opposite end of the spectrum, there will be companies that will suffer greatly in the event of an interest rate spike, which would increase borrowing costs and imperil capital intensive, low-growth industries that are typically highly leveraged. Based on that, the following are two equities to avoid:

Exelon Exelon Corp. (EXC) – Exelon is the largest owner and operator of nuclear reactors in the U.S. While it currently offers a 4.3% dividend yield, it cut its dividend in early 2012 and again in spring 2013. Weak pricing power has cut into the company's cash flow, which is down nearly 90% over the past year. With limited opportunities to reinvest in the business, Exelon's payout, which is already high as a ratio of net income, is very unlikely to increase.

American Electric American Electric Power (AEP) – American Electric Power is yet another utility that is experiencing declining cash flows. While its stock yields 4.4%, its dividend has grown at a disappointing annualized rate of 1.6% over the past 10 years. And like Exelon, it also has limited opportunities to reinvest in the business, and its payout ratio is similarly high.

The long and the short of it? When it comes to dividends, growth is becoming king. Investors who have always focused on yield need to realize that while size of the dividend matters, there's much more to the equation with respect to building long term value.

Ben Marks is president and chief investment officer of Marks Group Wealth Management, a Minneapolis based independent registered investment advisory with approximately $500 million in assets under management. Marks Group owns certain aforementioned stocks on behalf of clients.

Wednesday, January 29, 2014

Can Google Continue Its Explosive Run?

With shares of Google (NASDAQ:GOOG) trading around $1,117, is GOOG an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

Google is a global technology company focused on improving the ways people engage with information. The business is based on the following areas: search, advertising, operating systems and platforms, and enterprise. The company generates revenue primarily by delivering online advertising. Google is a search giant with most of the market share, largely because of its execution and delivery. An increasing number of consumers and companies worldwide are coming online, which will surely increase the amount of eyes on the company's ads and, in turn, advertising revenue. At this rate, look for Google to remain on top of the Internet world.

Google and Samsung Electronics (SSNLF.PK) are getting a leg up on the competition by teaming up to unite against their biggest enemy – Apple (NASDAQ:AAPL). On Monday, Google and Samsung announced that they had signed a ten year patent agreement covering all current and future technology patents.

T = Technicals on the Stock Chart Are Strong

Google stock has been exploding to the upside in the past several years. However, the stock is currently trading sideways and may need time to consolidate before heading higher. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, Google is trading above its rising key averages which signal neutral to bullish price action in the near-term.

GOOG

(Source: Thinkorswim)

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

	Implied Volatility (IV)	30-Day IV Percentile	90-Day IV Percentile
Google options	34.69%	93%	90%

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

	Put IV Skew	Call IV Skew
February Options	Flat	Average
March Options	Flat	Average

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

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

E = Earnings Are Increasing Quarter-Over-Quarter

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

	2013 Q3	2013 Q2	2013 Q1	2012 Q4
Earnings Growth (Y-O-Y)	21.08%	-5.53%	13.60%	17.06%
Revenue Growth (Y-O-Y)	11.94%	15.52%	31.23%	24.87%
Earnings Reaction	13.79%	-1.55%	4.43%	5.49%

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

P = Excellent Relative Performance Versus Peers and Sector

How has Google stock done relative to its peers, Yahoo (NASDAQ:YHOO), Microsoft (NASDAQ:MSFT), Baidu (NASDAQ:BIDU), and sector?

	Google	Yahoo	Microsoft	Baidu	Sector
Year-to-Date Return	-0.53%	-8.58%	-4.22%	-8.05%	-4.34%

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

Conclusion

Google is an Internet giant that provides valuable search and advertising services to a growing user base worldwide. On Monday, Google and Samsung announced that they had signed a ten year patent agreement. The stock has been exploding higher in recent years, but is currently trading sideways. Over the last four quarters, earnings and revenues have been rising, which has left investors pleased about recent earnings announcements. Relative to its strong peers and sector, Google has been a year-to-date performance leader. Look for Google to continue to OUTPERFORM.

Monday, January 27, 2014

5 Best Logistics Stocks To Own Right Now

On Friday, the U.S. Department of Defense announced it has awarded Lockheed Martin (NYSE: LMT ) a pair of new contract "modifications" worth nearly $90 million in total.

The larger of the two awards ups Lockheed's contract for 2013 Contractor Logistics Support, Legacy Sustainment, and Combined Task Force Support by $75.2 million, resulting in a cumulative contract value of $181.1 million. Lockheed will be working on the Space Based Infrared System (SBIRS) Survivable Endurable Evolution, Increment 1, implementing "permanent sustainment modifications" to the system's Mobile Ground System. The aim here is to enable ground systems to process Defense Support Program and SBIRS geosynchronous orbit satellites mission data, and to also issue "limited contingency" commands to the satellites, when needed. Lockheed's work on the contract will continue through January 31, 2017.

The smaller award, to Lockheed's Integrated Systems unit, is worth $14.4 million, and extends Lockheed's logistics support for Iraq's C-130E Hercules transport aircraft for a fourth option year, through June 30, 2014. Total contract value on this one is now up to $61.6 million.

5 Best Logistics Stocks To Own Right Now: Cedar Fair L.P. (FUN)

Cedar Fair, L.P. owns and operates amusement and water parks in the United States and Canada. As of February 19, 2013, the company operated 11 amusement parks, 4 outdoor water parks, 1 indoor water park, and 5 hotels, as well as the Gilroy Gardens Family Theme Park in California under a management contract. Its amusement parks include Cedar Point located on Lake Erie between Cleveland and Toledo in Sandusky, Ohio; Kings Island near Cincinnati, Ohio; Canada's Wonderland near Toronto, Canada; Dorney Park & Wildwater Kingdom located near Allentown in South Whitehall Township, Pennsylvania; Valleyfair located near Minneapolis/St. Paul in Shakopee, Minnesota; Michigan's Adventure located near Muskegon, Michigan; Kings Dominion near Richmond, Virginia; Carowinds in Charlotte, North Carolina; Worlds of Fun located in Kansas City, Missouri; Knott's Berry Farm located near Los Angeles in Buena Park, California; and California's Great America located in Santa Clara, California, as w ell as manages and operates Gilroy Gardens Family Theme Park in Gilroy, California. The company also owns and operates the Castaway Bay Indoor Waterpark Resort in Sandusky, Ohio. Cedar Fair Management, Inc. serves as the general partner of Cedar Fair, L.P. The company was founded in 1983 and is based in Sandusky, Ohio.

Advisors' Opinion:

[By John Udovich]
Theme park stocks Cedar Fair, L.P. (NYSE: FUN), Six Flags Entertainment Corp (NYSE: SIX),�SeaWorld Entertainment Inc (NYSE: SEAS)�and up�and coming�Independent Film Development Corporation (OTCMKTS: IFLM) have all been producing their share of news lately ranging from hot to neutral to cold for investors and traders alike��meaning it might be time to take a look�at what the sector might have to offer:
[By Rick Munarriz]
Magic Mountain now has a record 18 roller coasters, two more than Cedar Fair's (NYSE: FUN ) Cedar Point park in Ohio. The two seemed to be jockeying back and forth for the crown a few years ago, but Cedar Fair eventually figured that this wasn't an arms race worth battling.

5 Best Logistics Stocks To Own Right Now: Key Technology Inc.(KTEC)

Key Technology, Inc., together with its subsidiaries, designs, manufactures, and sells process automation systems in the United States and internationally. The company offers automated inspection systems, including Manta, an on-belt sorter; Tegra that inspects products in-air using cameras configured in a tilted-X geometry to look in oblique angles; Optyx; Tobacco Sorters 3 tobacco sorting systems for use in tobacco threshing and processing; ADR automatic defect removal systems for the potato strip industry; and Optyx SG and VeriSym for the pharmaceutical and nutraceutical industries, as well as provides various line solutions. It also offers conveying and process systems to move and process product within a production plant. The company?s conveying and process systems comprise Iso-Flo vibratory conveying systems; Impulse, a vibratory conveyor; SmartArm, a wireless performance monitoring system for Iso-Flo vibratory conveyors; horizontal motion conveyors; rotary sizing an d grading systems for food processing and fresh vegetable packing operations; preparation systems to prepare a range of food products prior to cooking, freezing, canning, or other types of processing; fresh-cut systems for the fresh-cut produce industry; and SYMETIX equipment for pharmaceuticals and nutraceuticals. In addition, it provides standard and custom designed equipment that conveys, dewaters, transfers, distributes, aligns, feeds, meters, separates, grades, blanches, cooks, pasteurizes, cools, cleans, washes, dries, polishes, and packages products. Further, the company offers spare parts, and post-sale field and telephone-based repair services; and RemoteMD, a condition analysis tool for G6 optical sorters and G6 ADR automatic defect removal systems, as well as provides online training programs. It sells its products directly, as well as through independent sales representatives. The company was founded in 1948 and is headquartered in Walla Walla, Washington.

Top 5 Penny Companies For 2014: Learning Tree International Inc.(LTRE)

Learning Tree International, Inc., together with its subsidiaries, develops, markets, and delivers a library of instructor-led classroom courses to meet the professional development needs of managers and information technology (IT) professionals worldwide. It offers courses across a range of technical and management disciplines, including operating systems, databases, computer networks, computer and network security, Web development, programming languages, software engineering, open source applications, project management, business skills, leadership, and professional development. As of September 30, 2011, the company?s library of instructor-led courses comprised 220 titles, including 83 management titles and 137 IT titles. It markets and sells its course offerings through various channels, including direct mail, electronic marketing, telemarketing, and field sales. The company serves a range of organizations, including large national and multinational companies, governme nt organizations, and small and medium-size companies. Learning Tree International, Inc. was founded in 1974 and is headquartered in Reston, Virginia.

5 Best Logistics Stocks To Own Right Now: NBT Bancorp Inc.(NBTB)

NBT Bancorp Inc., a financial holding company, provides commercial banking and financial services to individuals, corporations, and municipalities in central and upstate New York, northeastern Pennsylvania, and the greater Burlington, Vermont area. The company accepts various deposit products that include demand deposit accounts, savings accounts, negotiable order of withdrawal accounts, money market deposit accounts, and certificate of deposit accounts. Its loan portfolio comprises residential real estate mortgages, commercial loans, commercial real estate loans, real estate construction and development loans, agricultural and agricultural real estate loans, consumer loans, home equity loans, and lease financing. NBT Bancorp also provides retirement plan consulting and recordkeeping services; and trust and investment, financial planning, and life insurance services, as well as enables customers to check balances, transfer funds, pay bills, view statements, apply for loans , and access various other product and service information online. As of December 31, 2010, the NBT Bank division had 86 divisional offices and 114 automated teller machines (ATMs) located primarily in central and upstate New York and Burlington, Vermont; and the Pennstar Bank division had 37 divisional offices and 50 ATMs located primarily in northeastern Pennsylvania. The company was founded in 1856 and is headquartered in Norwich, New York.

5 Best Logistics Stocks To Own Right Now: Multiband Corporation(MBND)

Multiband Corporation, together with its subsidiaries, provides contract installation services; voice, data, and video services; and design, engineering, and construction services in the United States. The company operates through three segments: Field Services (FS); Multi-Dwelling Unit (MDU); and Engineering, Energy & Construction (EE&C). The FS segment engages in the installation and servicing of DIRECTV video programming for residents of single family homes. It also offers installation services for broadband cable and Internet providers, and commercial customers. The MDU segment serves as a master service operator for DirecTV, a provider of satellite television services. It offers satellite television services to residents of multi-dwelling-units through a network of affiliated operators. As of March 15, 2012, this segment had approximately 112,000 owned and managed subscribers, with an additional 45,000 subscribers supported by the support center. The EE&C segment prov ides engineering and construction services for the wired and wireless telecommunications industry, including public safety networks. This segment also offers renewable energy services comprising wind and solar applications and other design and construction services. The company was formerly known as Vicom, Incorporated and changed its name to Multiband Corporation in July 2004. Multiband Corporation was founded in 1933 and is based in New Hope, Minnesota.

5 Best Logistics Stocks To Own Right Now: Pac Nth West Cap C Com Npv (PFN.TO)

Pacific North West Capital Corp. engages in the acquisition, exploration, and development of platinum group metal (PGM), and precious and base metal properties primarily in Canada. It explores for PGM, gold, silver, and base metal properties in British Columbia, Ontario, Saskatchewan, and Alaska. The company primarily holds a 100% interest in the River Valley PGM project that consists of 410 mining claims in 38 claim units covering approximately 6,600 hectares located in the Sudbury region of Ontario. Pacific North West Capital Corp. was founded in 1996 and is headquartered in Vancouver, Canada.

5 Best Logistics Stocks To Own Right Now: KDR Industrials Ltd (KDR.V)

KDR Industrials Ltd., formerly North American Medical Services Inc., through its wholly owned subsidiaries, North American Medical Services Inc. (NAMS-Nevada), NuCelle Inc. (NuCelle) and N.A.M.S. Capital Corp. (NAMS-CC), is engaged in the manufacture and sale of skin treatment formulations, products, and systems bearing brand of NuCelle and Mandelic Marine Complex. NuCelle�� provides skin care formulations for all skin types, sensitive, ethnic, trouble-prone, and aging. The Company operates two product lines: NuCelle Rx and NuCelle Mandelic Marine Complex. Its NuCelle Rx, physician only line of products, is formulated for, and distributed to physicians and medical professionals. Its NuCelle Mandelic Marine Complex, the aesthetician only line of products, consists of a five step regimen, including Mandelic Wash, Mandelic Mint Scrub, Mandelic Toner, Mandelic Laser-lift Serum and Mandelic Anti-Oxidant Treatment Moisturizer.

5 Best Logistics Stocks To Own Right Now: Solar Capital Ltd.(SLRC)

Solar Capital Ltd. is a business development company specializing in investments in leveraged companies, including middle market companies. The firm invests in aerospace and defense; automotive; beverage, food and tobacco; broadcasting and entertainment; business services; cable television; cargo transport; chemicals, plastics and rubber; consumer finance; consumer services; containers, packaging and glass; direct marketing; distribution; diversified/conglomerate manufacturing; diversified/conglomerate services; education; electronics; energy, utilities; equipment rental; farming and agriculture; finance; healthcare, education and childcare; home and office furnishing, consumer products; hotels, motels, inns and gaming; industrial; infrastructure; insurance; leisure, motion pictures and entertainment; logistics; machinery; media; mining, steel and non precious metals; oil and gas; personal, food and miscellaneous services; printing, publishing and broadcasting; real estate ; retail stores; specialty finance; technology; telecommunications; and utilities. It invests in the form of senior secured loans, mezzanine loans, and equity securities. It also invests in equity securities, such as preferred stock, common stock, warrants and other equity interests received in connection with its debt investments or through direct investments. The firm also invests in United States government securities, high-quality debt investments that mature in one year or less, high-yield bonds, distressed debt, non-United States investments, or securities of public companies that are not thinly traded. Solar Capital Ltd. was founded in November 2007 and is based in New York, New York.

5 Best Logistics Stocks To Own Right Now: Shell Refining Company (FED OF MALAYA)

Shell Refining Company (Federation of Malaya) Berhad is principally engaged in refining and manufacturing of petroleum products. The Company operates primarily in Malaysia. Its operations also include the gas to liquids (GTL) plant of its kind in Bintulu, Sarawak, and a refinery in Port Dickson, Negeri Sembilan. Its upstream operations focus on the development and extraction of crude oil and natural gas offshore Sarawak and Sabah. In downstream its main activity is in refining, supply, trading and shipping of crude oil and petroleum products through the sales and marketing of transportation fuels, lubricants, specialty products and technical services. The Company is also a partner in two joint ventures that convert natural gas to liquefied natural gas. Royal Dutch Shell plc is its holding company.

Schwab ETF platform for 401(k)s hits regulatory speed bump

The Charles Schwab Corp.'s long-awaited ETF platform for 401(k)s — widely forecasted to launch in the fourth quarter — has hit a regulatory speed bump.

The offering, which would make exchange-traded funds available to retirement plans, has run into a snag with regulators, according to Steve Anderson, executive vice president at Schwab Retirement Plan Services.

He would not share the precise details of the matter but noted that some of the work the firm is doing on the ETF platform is related to how the nature of the investments themselves. “To use ETFs appropriately in the intraday market, you want to be able to trade with fractional shares, and these don't have them,” Mr. Anderson said. “We have to find a way to accommodate that.”

Working out the details with regulators hasn't been so problematic that it will slow down development, however. “We don't want to pre-empt the regulators,” Mr. Anderson said. “Where we are now is where we anticipated being in the rollout.”

Retirement plan sponsors and the rest of the industry have been excitedly awaiting the release of the ETF-based platform since 2011, when Schwab announced its efforts to make 401(k) investing cheaper for plans and their participants. The company launched Index Advantage, an index-fund-based platform, in 2012 and has since lined up close to 80 clients who want to switch over to the cheaper structure, according to Mr. Anderson.

A recent report from IndexUniverse LLC quoted Dave Gray, vice president of client experience at Schwab, as saying that the platform will be delayed and that the issue is not related to fractional shares. “At this point, we're not committing to a particular time, whether it'll be at the end of this year or otherwise,” he told IndexUniverse. Mr. Gray also had noted that the firm had developed its own approach to fractionalizing ETFs.

Mr. Anderson would not comment on Mr. Gray's comments to IU but noted that the ETF platform is rolling along just fine. “I can see us being aggressively in the market in the next couple of months; it's near-term,” Mr. Anderson said. “We want to make sure that we have the regulatory bodies aligned with what we're doing here, and we think we can work through that relatively soon.”

Though offering cheap 401(k) investments via ETFs has long been the Holy Grail for the retirement industry, only a handful of companies have made a successful go at it. Adjusting record-keeping infrastructure — which is based largely on mutual funds — to handle ETFs and their intraday trading has been a major block in making these investments available to the mainstream retirement plan set.

Saturday, January 25, 2014

Timid Tuesday â€“ Indexes get Gun-Shy as they Re-Test the Tops

SPY 5 MINUTE That was disappointing!

Things started out very exciting as we opened the S&P at 1,704 and ran all the way to 1,705 for a second there, just after noon but then reality stepped in and ruined the mood. The Dollar had bottomed out at 81.13 but bounced back 0.5% to 81.55 and that, of course, took the S&P down 0.5% (because they have that kind of relationship) and we had a sad little close.

On Dave Fry's SPY chart, it's 170 but, on the Index itself, we're testing 1,690 in the Futures this morning, down from 1,703.75 at yesterday's highs – pretty much the same thing but our goal for the index is 1,709.67 – that's the August 2nd high and that's what needs to be cracked on this run or the next time we test our +5% line at 1,680, it may not hold.

Speaking of lines, it's no surprise, looking at our Big Chart, that the Nasdaq pulled back hard yesterday, dropping about 40 points (1%) from it's silly open to the more realistic close at 3,718. As you can see from our spreadsheet (which is the real Big Chart, the rest is just illustration) the invisible string between the Nasdaq, the NYSE and the NYSE (both still below the Must Hold lines) was stretched more than 10% and either they had to go up or the Nasdaq had to come down.

Of course AAPL tends to warp the Nasdaq but AAPL is DOWN $50 since the August highs and that's 10% so it SHOULD have a 1.4% drag (now 14% of the Nasdaq) on the Nasdaq but the Nasdaq is HIGHER than it was in August, when it was just below 3,700. So, if AAPL is dragging the Nasdaq 1.4% lower but the Nasdaq is, in fact, 2% higher – then QCOM (7%), MSFT (5.5%), ORCL (4%) GOOG (4%), INTC (3%), RIMM (3%), CSCO (2.5%), AMZN (2.5%) as well as ATVI, EBAY, BIDU, COST, FSLR, NWSA, SBUX, PCLN, etc (1%ish) must be MORE than pulling their weight.

That means the SQQQ ETF (ultra-short Nasdaq) is a nice way to protect yourself from a broad-market pullback. SQQQ is $21.66…
continue reading

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The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

Friday, January 24, 2014

Citigroup CEO Michael Corbat Tells Fox Business That 'Weâ€™ve Got the Right Business Model'

In an interview to appear on FOX Business Network's (FBN) Countdown to the Closing Bell (3PM/ET), Citigroup CEO Michael Corbat speaks with anchor Liz Claman about the company's recovery. Corbat says, "I think when we look back, we've done a pretty monumental transformation of the company" and that "we feel like we've got the right business model and the right mix of businesses." Corbat also comments on cyber security saying, "I think the threat of cyber security is absolutely real" and that this is "an area where we dedicate a lot of resources, people, hours, money, to making sure that we've got the best technology."

Excerpts from the report are below.

On Citigroup's recovery:

"I think when we look back, we've done a pretty monumental transformation of the company. We've really taken the company back to the roots. We've shed $700 billion and $800 billion of non-core assets and businesses, and, again, really taken the institution back to, what we think it should be. And I think, you know, we've continued this year. We continued to do some streamlining and tweaking. But I think we feel like we've got the right business model and the right mix of businesses."

On cyber security:

"I think the threat of cyber security is absolutely real. It's an area where we dedicate a lot of resources, people, hours, money, to making sure that we've got the best technology. And, again, it's not something you can rest on because these cyber-attacks continue to morph. And we've got to make sure that the things we're doing to protect our clients and the information and the data stays cutting edge."

On whether he fears tapering from a business standpoint:

"I think, again, this is an experiment I don't think any of us have ever seen before. And we've got to understand that. But again, I think provided tapering is being taken out because there's real underlying growth to the economy, I think it's OK."

**CREDIT FOX BUSINESS NETWORK**

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Wednesday, January 22, 2014

Is Big Blue's Run Over?

In this video from Wednesday's edition of Investor Beat, host Chris Hill and Motley Fool analysts Matt Koppenheffer and Mike Olsen dig into the biggest investing stories from the market today.

The Dow index was singlehandedly dragged down by one stock today, as IBM (NYSE: IBM ) reported fourth-quarter earnings. Despite growing profits by 6%, overall revenue fell by more than 5%, which sent the stock tumbling. In the lead story from today's Investor Beat, Matt and Mike discuss just how bad this quarter was for Big Blue, and whether investors should be optimistic about the company's turnaround plan.

Interested in investing in the next big thing in tech?
There are few things that Bill Gates fears. Cloud computing is one of them. It's a radical shift in technology that has early investors getting filthy rich, and we want you to join them. That's why we're highlighting three companies that could make investors like you rich. You've probably only heard of one of them, so be sure to click here to watch this shocking video presentation!

Tuesday, January 21, 2014

Top Stocks To Invest In Right Now

With shares of Google (NASDAQ:GOOG) trading around $1,010, is GOOG an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let�� analyze the stock with the relevant sections of our CHEAT SHEET investing framework.

T = Trends for a Stock’s Movement

Google is a global technology company focused on improving the ways people engage with information. The business is based on the following areas: search, advertising, operating systems and platforms, and enterprise. The company generates revenue primarily by delivering online advertising. Google is a search giant with most of the market share, largely because of its execution and delivery. An increasing number of consumers and companies worldwide are coming online, which will surely increase the amount of eyes on the company�� ads and, in turn, advertising revenue. At this rate, look for Google to remain on top of the Internet world.

Google shares are up after reaching an all-time high in after-hours trading on Thursday on third-quarter earnings that beat expectations. Strength in Google�� search sector, which makes up 92 percent of the company�� overall business, was credited for the growth, according to CNNMoney. Earnings came in at $10.74 per share and sales grew 12 percent year-over-year to $14.9 billion. Google still showed losses in its mobile search and Motorola businesses, however.

Top Stocks To Invest In Right Now: Transition Therapeutics Inc.(TTHI)

Transition Therapeutics Inc., a biopharmaceutical company, develops novel therapeutics for various disease indications primarily in Canada. Its lead products include ELND005 (AZD-103), a Phase II clinical trial product for the treatment of Alzheimer?s disease; TT-301 and TT-302, which are Phase I clinical trial products, for the treatment of rheumatoid arthritis, Alzheimer?s disease, traumatic brain injury, and intracerebral hemorrhage; and TT401/402, a preclinical stage product to treat diabetes. The company also has an emerging pipeline of preclinical and clinical drug candidates for the treatment of anti-inflammatory and metabolic indications. It has strategic collaborations with Elan Pharma International Limited to develop and commercialize ELND005 (AZD-103); and a licensing and collaboration agreement with Eli Lilly and Company to develop and commercialize gastrin based therapies, and the preclinical compound TT401/402. The company was formerly known as Transition T herapeutics and Diagnostics Inc. and changed its name to Transition Therapeutics Inc. on December 2000. Transition Therapeutics Inc. was founded in 1987 and is headquartered in Toronto, Canada.

Top Stocks To Invest In Right Now: Aviva Corporation Ltd(AVA.AX)

Aviva Corporation Limited, a resource development company, develops a pipeline of energy and metal projects in Africa and Australia. The company, through a joint venture with AfriOre International (Barbados) Limited, holds a 51% interest in the West Kenya gold and base metals project that covers an area of approximately 2,788 square kilometers in the prospective Ndori Greenstone belt in Kenya. It also holds interests in two coal-based energy assets, including the Mmamantswe coal project located to the north of Gaborone, Botswana; and the Coolimba power and coal project in the Mid-West region of Western Australia. The company is headquartered in Subiaco, Australia.

Top 10 Casino Companies For 2014: Batero Gold Corp. (BAT.V)

Batero Gold Corp. operates as a precious and base metals exploration and development company in Colombia. It holds a 100% interest in the Batero-Quinchia project comprising 1,407.43 hectare tenement, which includes 3 gold-copper porphyry centers located in the Municipality of Quinchia, the Department of Risaralda, the Republic of Colombia. The company was formerly known as Angus Resources Inc. and changed its name to Batero Gold Corp. in July 2010. Batero Gold Corp. was incorporated in 2008 and is based in Vancouver, Canada.

Top Stocks To Invest In Right Now: Amarantus Bioscience Holdings Inc (AMBS)

Amarantus BioScience Holdings, Inc., formerly Amarantus BioSciences, Inc., incorporated on March 22, 2013, is focuses on developing intellectual property and proprietary technology in order to develop drug candidates and diagnostic blood tests to diagnose and treat human diseases. The Company owns the intellectual property rights to a therapeutic protein known as Mesencephalic-Astrocyte-derived Neurotrophic Factor (MANF), owns the intellectual property rights to biomarkers related to oncology and neurodegeneration named BC-SeraPro and NuroPro respectively, has a license to an Alzheimer�� disease blood test named LymPro, and owns a number of proprietary cell lines called PhenoGuard. MANF was the first therapeutic protein discovered from a PhenoGuard Cell Line. In December 2012, the Company acquired neurodegenerative diagnostic portfolio from Power3 Medical Products. On March 22, 2013, the Company was merged with into Amarantus Bioscience Inc.

The Company also owns an inventory of 88 cell lines that Amarantus refers to as PhenoGuard Cell Lines. MANF is a protein that corrects protein misfolding. The Company�� MANF product development effort is centered on a therapy for Parkinson�� disease.

Advisors' Opinion:

[By James E. Brumley]
At first glance, Amarantus Bioscience Holdings, Inc. (OTCBB:AMBS) doesn't look like anything more than a volatile mess. It's up 17% today, but had been up twice that amount this morning. Even more exhausting is the fact AMBS, currently at $0.0529, had been as high as $0.089 and as low as $0.039 within the past three months. Point being, Amarantus Bioscience Holdings has been, and continues to be, all over the map.
[By James E. Brumley]
Judging from the company it's keeping Green Automotive Co. (OTCMKTS:GACR) may have just made its way into the upper echelon of small cap stock opportunities. The electric car company joins Elite Pharmaceuticals Inc. (OTCBB:ELTP), Amarantus Bioscience Holdings, Inc. (OTCBB:AMBS), and only three other companies as Wall-Street.com's "Best 6 Stocks" for January of 2014. As one of the top information resources for investors - particularly in terms of information regarding small and micro cap stocks - being named among the site's top pick is an accolade for AMBS, ELTP, and GACR. Even more impressive is that Green Automotive Co. was the only consumer-goods name among those six. Amarantus Bioscience Holdings and Elite Pharmaceuticals are biotechnology names... an industry that can and often does attract a lot of attention just by the nature of the business. The other three names making the "Best 6" list were an energy explorer, a power-management technology manufacturer, and prescription/medical food producer. For an electric car manufacturer to make the list speaks quite highly of GACR.

Top Stocks To Invest In Right Now: Cartier Resources Inc (ECR.V)

Cartier Resources Inc. engages in the acquisition and exploration of mining properties in Quebec, Canada. It primarily explores for gold, as well as for zinc, silver, and copper. The company was incorporated in 2006 and is headquartered in Val d'Or, Canada.

Top Stocks To Invest In Right Now: Federal National Mortgage Association (FNMA.OB)

Federal National Mortgage Association (Fannie Mae) is a government-sponsored enterprise (GSE) chartered by the United States Congress to support liquidity and stability in the secondary mortgage market, where mortgage-related assets are purchased and sold. The Company�� activities include providing market liquidity by securitizing mortgage loans originated by lenders in the primary mortgage market into Fannie Mae mortgage-backed securities (Fannie Mae MBS), and purchasing mortgage loans and mortgage-related securities in the secondary market for its mortgage portfolio. Fannie Mae operates in three business segments: Single-Family business, Multifamily Business (formerly Housing and Community Development (HCD)) and Capital Markets group. Its Single-Family Credit Guaranty and Multifamily businesses work with its lender customers to purchase and securitize mortgage loans customers deliver to the Company into Fannie Mae MBS.

The Company obtains funds to suppo rt its business activities by issuing a variety of debt securities in the domestic and international capital markets. Fannie Mae acquires funds to purchase mortgage-related assets for its mortgage portfolio by issuing a variety of debt securities in the domestic and international capital markets. It also makes other investments. Fannie Mae conducts its business in the United States residential mortgage market and the global securities market. It conducts business in the United States residential mortgage market and the global securities market. During the year ended December 31, 2011, the Company��

Single-Family Business

Single-Family business includes mortgage securitizations, mortgage acquisitions, credit risk management and credit loss management. Single-Family business works with the Company�� lender customers to provide funds to the mortgage market by securitizing single-family mortgage loans into Fannie Mae MBS. Its Single-Family business also works with its Capital Markets group to facilitate th! e! purchase of single-family mortgage loans for the Company�� mortgage portfolio. Fannie Mae�� Single-Family business prices and manages the credit risk on its single-family guaranty book of business, which consists of single-family mortgage loans underlying Fannie Mae MBS and single-family loans held in its mortgage portfolio. Single-Family business and Capital Markets group securitize and purchase primarily single-family fixed-rate or adjustable-rate, first lien mortgage loans, or mortgage-related securities backed by these types of loans.

The Company securitizes or purchases loans insured by Federal Housing Administration (FHA), loans guaranteed by the Department of Veterans Affairs (VA), and loans guaranteed by the Rural Development Housing and Community Facilities Program of the Department of Agriculture, manufactured housing loans, reverse mortgage loans, multifamily mortgage loans, subordinate lien mortgage loans and other mortgage-related securities. I ts Single-Family business securitizes single-family mortgage loans and issues single-class Fannie Mae MBS. Fannie Mae�� Single-Family business securitizes loans solely in lender swap transactions, in which lenders deliver pools of mortgage loans to the Company, which are placed immediately in a trust, in exchange for Fannie Mae MBS backed by these loans. Generally, the servicing of the mortgage loans held in its mortgage portfolio or that backs its Fannie Mae MBS is performed by mortgage servicers on the Company�� behalf. Lenders who sell single-family mortgage loans to Fannie Mae service these loans for the Company. For loans it owns or guarantees, the lender or servicer must obtain its approval before selling servicing rights to another servicer.

Fannie Mae�� mortgage servicers collect and deliver principal and interest payments, administer escrow accounts, monitor and report delinquencies, perform default prevention activities, evaluate transfers of own ership interests, respond to requests for partial releas! es o! f s! ecurit! y, and handle proceeds from casualty and condemnation losses. Its mortgage servicers are the primary point of contact for borrowers and perform implementation of its homeownership assistance initiatives, negotiation of workouts of troubled loans, and loss mitigation activities. Mortgage servicers also inspect and preserve properties and process foreclosures and bankruptcies.

Multifamily Mortgage Business

Multifamily business works with the Company�� lender customers to provide funds to the mortgage market by securitizing multifamily mortgage loans into Fannie Mae MBS. Through its Multifamily business, Fannie Mae provides liquidity and support to the United States multifamily housing market principally by purchasing or securitizing loans that finance multifamily rental housing properties. It also provides some limited debt financing for other acquisition, development, construction and rehabilitation activity related to projects that complement this business. Fannie Mae�� Multifamily business also works with its Capital Markets group to facilitate the purchase and securitization of multifamily mortgage loans and securities for Fannie Mae�� portfolio, as well as to facilitate portfolio securitization and resecuritization activities.

The Company�� multifamily guaranty book of business consists of multifamily mortgage loans underlying Fannie Mae MBS and multifamily loans and securities held in Fannie Mae�� mortgage portfolio. Revenues for Fannie Mae�� Multifamily business are derived from a variety of sources, including guaranty fees received as compensation for assuming the credit risk on the mortgage loans underlying multifamily Fannie Mae MBS and on the multifamily mortgage loans held in its portfolio and on other mortgage-related securities; transaction fees associated with the multifamily business, and other bond credit enhancement related fees. As with the servicing of single-family mortgages, multifamily mortgage servicing is performed by the ! lenders !! who sell ! the mortgages to the Company. Fannie Mae�� Multifamily business is organized and operated as an integrated commercial real estate finance business.

Capital Markets

Capital Markets group's primary business activities include mortgage and other investments, mortgage securitizations, structured mortgage securitizations and other customer services, and interest rate risk management. Capital Markets group manages the Company�� investment activity in mortgage-related assets and other interest-earning, non-mortgage investments. It funds its investments primarily through proceeds the Company receives from the issuance of debt securities in the domestic and international capital markets. Its business activity is focused on making short-term use of its balance sheet rather than long-term investments. Activities Fannie Mae is undertaking to provide liquidity to the mortgage market include whole loan conduit, early funding, real estate mortgage investment c onduit (REMICs) and other structured securitizations and dollar roll transactions. Whole loan conduit activities include its purchase of both single-family and multifamily loans principally for the purpose of securitizing them. During the year ended December 31, 2010, it was engaged in dollar roll activity. A dollar roll transaction is a commitment to purchase a mortgage-related security with a concurrent agreement to re-sell a similar security at a later date or vice versa.

Fannie Mae�� Capital Markets group is engaged in issuing both single-class and multi-class Fannie Mae MBS through both portfolio securitizations and structured securitizations involving third party assets. Its Capital Markets group creates single-class and multi-class Fannie Mae MBS from mortgage-related assets held in its mortgage portfolio. Fannie Mae�� Capital Markets group may sell these Fannie Mae MBS into the secondary market or may retain the Fannie Mae MBS in its investment portf olio. The Company�� Capital Markets group cr! eates sin! gle-c! lass and ! multi-class structured Fannie Mae MBS, for its lender customers or securities dealer customers, in exchange for a transaction fee. The Company�� Capital Markets group provides its lender customers and their affiliates with services that include offering to purchase a range of mortgage assets, including non-standard mortgage loan products; segregating customer portfolios to obtain optimal pricing for their mortgage loans, and assisting customers with hedging their mortgage business.

Although the Company�� Capital Markets group�� business activities are focused on short-term financing and investing, revenue from its Capital Markets group is derived primarily from the difference, or spread, between the interests it earns on its mortgage and non-mortgage investments and the interest it incurs on the debt the Company issues to fund these assets. Its Capital Markets revenues are primarily derived from the Company�� mortgage asset portfolio. Capital Markets gro up funds its investments primarily through the issuance of a variety of debt securities in a range of maturities in the domestic and international capital markets. Investors in the Company�� debt securities include commercial bank portfolios and trust departments, investment fund managers, insurance companies, pension funds, state and local governments, and central banks.

The Company competes with Freddie Mac, FHA and Ginnie Mae.

Sunday, January 19, 2014

Top Financial Companies For 2014

This week in new hires, Beirne Wealth Consulting welcomed Dana McLaughlin; CLA Wealth Advisors added George Hostal; Hartford Funds brought in Shaun McDonald and Dylan White; and U.S. Bank Wealth Management welcomed new Private Client Reserve hires Scott Fitzgerald in New York and Ruth Granen in Seattle.

Also, DDJ Capital Management brought in John O’Connor; Michael Collins went to TradeStation Prime Services; and Scott Thorson and Sharon Scibek joined H. Beck.

Beirne Wealth Consulting Adds Senior Wealth Advisor Dana McLaughlin

Milford, Connecticut-based Beirne Wealth Consulting (BWC) announced recently that it had added senior wealth advisor Dana McLaughlin, who serves as a core advisor to the firm’s high-net-worth individuals and families and is responsible for advising individual clients on financial planning, investments, retirement and education planning, trust asset management and efficient wealth transfer. She is also a member of the firm’s investment committee.

Top Financial Companies For 2014: Paulson Capital Corp.(PLCC)

Paulson Capital Corp., through its subsidiary, Paulson Investment Company, Inc., operates as a brokerage company principally in the United States. It engages in securities brokerage activities, which include acting as agent for purchase and sale of common and preferred stocks, options, warrants, and debt securities traded on securities exchanges or in the over-the-counter market. The company?s corporate finance activities comprise underwriting initial and follow-on public offerings, private investments in public equity, and private placements for smaller companies; securities trading and market making activities consist of executing trades in equity securities, corporate debt securities, and municipal bonds; and market making activities are conducted with dealers in the wholesale market and its customers. Its investment activities include holding securities for investment, which primarily include securities purchased for investment and underwriter warrants. As of December 31, 2010, the company operated 39 branch offices in California, Colorado, Connecticut, Florida, Georgia, New Jersey, New York, Oregon, Utah, and Washington. Paulson Capital Corp. was founded in 1969 and is based in Portland, Oregon.

Advisors' Opinion:

[By CRWE]
Paulson Capital Corp. (Nasdaq:PLCC), parent company of Paulson Investment Company, Inc., reported a net income of $1,412,294 (or $0.24 per share) for the three months ended March 31, 2012 versus a net loss of $381,210 (or ($0.07) per share) for the like period in 2011.

Top Financial Companies For 2014: Federal National Mortgage Association Fannie Mae (FNMAT.OB)

Federal National Mortgage Association Fannie Mae is a government-sponsored enterprise (GSE) chartered by the United States Congress to support liquidity and stability in the secondary mortgage market, where mortgage-related assets are purchased and sold. The Company�� activities include providing market liquidity by securitizing mortgage loans originated by lenders in the primary mortgage market into Fannie Mae mortgage-backed securities (Fannie Mae MBS), and purchasing mortgage loans and mortgage-related securities in the secondary market for its mortgage portfolio. Fannie Mae operates in three business segments: Single-Family business, Multifamily Business (formerly Housing and Community Development (HCD)) and Capital Markets group. Its Single-Family Credit Guaranty and Multifamily businesses work with its lender customers to purchase and securitize mortgage loans customers deliver to the Company into Fannie Mae MBS.

The Company obtains funds to support its business activities by issuing a variety of debt securities in the domestic and international capital markets. Fannie Mae acquires funds to purchase mortgage-related assets for its mortgage portfolio by issuing a variety of debt securities in the domestic and international capital markets. It also makes other investments. Fannie Mae conducts its business in the United States residential mortgage market and the global securities market. It conducts business in the United States residential mortgage market and the global securities market. During the year ended December 31, 2011, the Company��

Single-Family Business

Single-Family business includes mortgage securitizations, mortgage acquisitions, credit risk management and credit loss management. Single-Family business works with the Company�� lender customers to provide funds to the mortgage market by securitizing single-family mortgage loans into Fannie Mae MBS. Its Single-Family business a lso works with its Capital Markets group to facilitate the ! p! urchase of single-family mortgage loans for the Company�� mortgage portfolio. Fannie Mae�� Single-Family business prices and manages the credit risk on its single-family guaranty book of business, which consists of single-family mortgage loans underlying Fannie Mae MBS and single-family loans held in its mortgage portfolio. Single-Family business and Capital Markets group securitize and purchase primarily single-family fixed-rate or adjustable-rate, first lien mortgage loans, or mortgage-related securities backed by these types of loans.

The Company securitizes or purchases loans insured by Federal Housing Administration (FHA), loans guaranteed by the Department of Veterans Affairs (VA), and loans guaranteed by the Rural Development Housing and Community Facilities Program of the Department of Agriculture, manufactured housing loans, reverse mortgage loans, multifamily mortgage loans, subordinate lien mortgage loans and other mortgage-related securities. Its Single-Family business securitizes single-family mortgage loans and issues single-class Fannie Mae MBS. Fannie Mae�� Single-Family business securitizes loans solely in lender swap transactions, in which lenders deliver pools of mortgage loans to the Company, which are placed immediately in a trust, in exchange for Fannie Mae MBS backed by these loans. Generally, the servicing of the mortgage loans held in its mortgage portfolio or that backs its Fannie Mae MBS is performed by mortgage servicers on the Company�� behalf. Lenders who sell single-family mortgage loans to Fannie Mae service these loans for the Company. For loans it owns or guarantees, the lender or servicer must obtain its approval before selling servicing rights to another servicer.

Fannie Mae�� mortgage servicers collect and deliver principal and interest payments, administer escrow accounts, monitor and report delinquencies, perform default prevention activities, evaluate transfers of owner ship interests, respond to requests for partial releases! of ! sec! urity,! and handle proceeds from casualty and condemnation losses. Its mortgage servicers are the primary point of contact for borrowers and perform implementation of its homeownership assistance initiatives, negotiation of workouts of troubled loans, and loss mitigation activities. Mortgage servicers also inspect and preserve properties and process foreclosures and bankruptcies.

Multifamily Mortgage Business

Multifamily business works with the Company�� lender customers to provide funds to the mortgage market by securitizing multifamily mortgage loans into Fannie Mae MBS. Through its Multifamily business, Fannie Mae provides liquidity and support to the United States multifamily housing market principally by purchasing or securitizing loans that finance multifamily rental housing properties. It also provides some limited debt financing for other acquisition, development, construction and rehabilitation activity related to projects that complement this b usiness. Fannie Mae�� Multifamily business also works with its Capital Markets group to facilitate the purchase and securitization of multifamily mortgage loans and securities for Fannie Mae�� portfolio, as well as to facilitate portfolio securitization and resecuritization activities.

The Company�� multifamily guaranty book of business consists of multifamily mortgage loans underlying Fannie Mae MBS and multifamily loans and securities held in Fannie Mae�� mortgage portfolio. Revenues for Fannie Mae�� Multifamily business are derived from a variety of sources, including guaranty fees received as compensation for assuming the credit risk on the mortgage loans underlying multifamily Fannie Mae MBS and on the multifamily mortgage loans held in its portfolio and on other mortgage-related securities; transaction fees associated with the multifamily business, and other bond credit enhancement related fees. As with the servicing of single-family mortgages, m ultifamily mortgage servicing is performed by the l! enders wh! ! o sell th! e mortgages to the Company. Fannie Mae�� Multifamily business is organized and operated as an integrated commercial real estate finance business.

Capital Markets

Capital Markets group's primary business activities include mortgage and other investments, mortgage securitizations, structured mortgage securitizations and other customer services, and interest rate risk management. Capital Markets group manages the Company�� investment activity in mortgage-related assets and other interest-earning, non-mortgage investments. It funds its investments primarily through proceeds the Company receives from the issuance of debt securities in the domestic and international capital markets. Its business activity is focused on making short-term use of its balance sheet rather than long-term investments. Activities Fannie Mae is undertaking to provide liquidity to the mortgage market include whole loan conduit, early funding, real estate mortgage investment con duit (REMICs) and other structured securitizations and dollar roll transactions. Whole loan conduit activities include its purchase of both single-family and multifamily loans principally for the purpose of securitizing them. During the year ended December 31, 2010, it was engaged in dollar roll activity. A dollar roll transaction is a commitment to purchase a mortgage-related security with a concurrent agreement to re-sell a similar security at a later date or vice versa.

Fannie Mae�� Capital Markets group is engaged in issuing both single-class and multi-class Fannie Mae MBS through both portfolio securitizations and structured securitizations involving third party assets. Its Capital Markets group creates single-class and multi-class Fannie Mae MBS from mortgage-related assets held in its mortgage portfolio. Fannie Mae�� Capital Markets group may sell these Fannie Mae MBS into the secondary market or may retain the Fannie Mae MBS in its investment portfol io. The Company�� Capital Markets group cre! ates sing! le-cla! ss and mu! lti-class structured Fannie Mae MBS, for its lender customers or securities dealer customers, in exchange for a transaction fee. The Company�� Capital Markets group provides its lender customers and their affiliates with services that include offering to purchase a range of mortgage assets, including non-standard mortgage loan products; segregating customer portfolios to obtain optimal pricing for their mortgage loans, and assisting customers with hedging their mortgage business.

Although the Company�� Capital Markets group�� business activities are focused on short-term financing and investing, revenue from its Capital Markets group is derived primarily from the difference, or spread, between the interests it earns on its mortgage and non-mortgage investments and the interest it incurs on the debt the Company issues to fund these assets. Its Capital Markets revenues are primarily derived from the Company�� mortgage asset portfolio. Capital Markets group funds its investments primarily through the issuance of a variety of debt securities in a range of maturities in the domestic and international capital markets. Investors in the Company�� debt securities include commercial bank portfolios and trust departments, investment fund managers, insurance companies, pension funds, state and local governments, and central banks.

The Company competes with Freddie Mac, FHA and Ginnie Mae.

Top 10 Insurance Stocks To Watch For 2014: Realty Income Corporation(O)

Realty Income Corporation engages in the acquisition and ownership of commercial retail real estate properties in the United States. The company leases its retail properties primarily to regional and national retail chain store operators. As of December 31, 2006, it owned 1,955 retail properties located in 48 states, covering approximately 16.7 million square feet of leasable space. The company also held a portfolio of 60 properties through its wholly owned subsidiary, Crest Net Lease, Inc. (Crest), as of the above date. Realty Income Corporation has elected to be treated as a real estate investment trust (REIT) under the Internal Revenue Code. As a REIT, it would not be subject to federal income taxes provided it distributes at least 90% of its taxable income to its shareholders. The company was founded in 1969 and is based in Escondido, California.

Advisors' Opinion:

[By Charles Sizemore]
The declines in the broader stock market averages have been pretty mild — the S&P 500 is down about a percent since November 29, and the Dow is down about a percent and a half — but several ��ond-like��stocks are down sharply. Realty Income (O), one of my favorite long-term dividend payers, is down more than 4% over the same period and is now hitting new 52-week lows.
[By Matt Koppenheffer and David Hanson]
REIT and dividend stock Realty Income Corporation (NYSE: O ) took a big hit today. In this video, Matt tells investors why fears about the Fed gradually allowing interest rates to rise sometime in the near future may be causing many to pull their money out of dividend stocks and into fixed-income investments. He also discusses why this would be a very unFoolish strategy indeed.
[By Brian Louis]
American Realty�� acquisitions will make it the 14th-largest U.S. REIT by market value, which should boost liquidity and price support for investors and increase research coverage by analysts, according to the company�� investor presentation. Realty Income�� (O) price relative to 2014 estimated funds from operations, a REIT measure of cash flow, is about 16 times, according to the average of 12 analyst FFO projections, while American Realty�� is 13 times, based on four analysts.

Top Financial Companies For 2014: Virginia Commerce Bancorp(VCBI)

Virginia Commerce Bancorp, Inc. operates as the bank holding company for Virginia Commerce Bank that provides business and consumer banking services. The company accepts various deposit products comprising demand deposits, savings and money market accounts, and time deposits. It also originates commercial loans, commercial real estate loans, lines of credit, equipment financing, construction loans, letters of credit, residential mortgages, personal loans, auto loans, and home equity loans and lines of credit. In addition, the company offers merchant bankcard, electronic funds transfer, lock-box, remote deposit capture, online banking, investment, safe deposit boxes, and other customary banking services. It serves small-to-medium sized businesses, including firms that have contracts with the U.S. government, associations, retailers, industrial businesses, professionals and their firms, business executives, investors, and consumers. The company serves the Northern Virginia s uburbs of Washington, D.C. consisting of Arlington, Fairfax, Fauquier, Loudoun, Prince William, Spotsylvania, and Stafford Counties; the cities of Alexandria, Fairfax, Falls Church, Fredericksburg, Manassas, and Manassas Park; and the Washington, D.C., as well as the nearby Maryland counties of Montgomery and Prince Georges. It operates through 28 branch offices, 1 residential mortgage office, and 1 investment services office. The company was founded in 1988 and is headquartered in Arlington, Virginia.

Top Financial Companies For 2014: HDFC Bank Ltd (HDB)

HDFC Bank Limited (HDFC Bank), incorporated in August 1994, is a banking company engaged in providing a range of banking and financial services, including commercial banking and treasury operations. The Bank has overseas branch operations in Bahrain and Hong Kong. The Bank operates in four segments: treasury, which primarily consists of net interest earnings from the Bank�� investment portfolio, money market borrowing and lending, gains or losses on investment operations and on account of trading in foreign exchange and derivative contracts; retail banking, which serves retail customers through a branch network and other delivery channels; wholesale banking, which provides loans, non-fund facilities and transaction services to corporate, public sector units, government bodies, financial institutions and medium scale enterprises, and other banking business, segment includes income from para banking activities, such as credit cards, debit cards, third party product distribution, primary dealership business and the associated costs. Revenues of the retail banking segment are derived from interest earned on retail loans, net of commission (net of subvention received) paid to sales agents and interest earned from other segments for surplus funds placed with those segments, fees from services rendered, foreign exchange earnings on retail products.

Retail Banking

The Bank is a financial services provider of various deposit products, of retail loans (auto loans, personal loans, commercial vehicle loans, mortgages, business banking, loan against gold jewellery), credit cards, debit cards, depository (custody services), investment advisory, bill payments and several transactional services. Apart from its own products, the Bank distributes third party financial products, such as mutual funds and life and general insurance. As of March 31, 2012, the Bank had 2,544 branches in 1,399 Indian cities. The Bank had 8,913 automated teller machines (ATMs) during the fiscal year ended March 31,! 2012. In addition to the Bank does home loans in conjunction with HDFC Limited. Under this arrangement the Bank sells loans provided by HDFC Limited through its branches. HDFC Limited approves and disburses the loans, which are booked in their books, with the Bank receiving a sourcing fee for these loans. HDFC Limited offers the Bank an option to purchase up to 70% of the fully disbursed home loans sourced under this arrangement through either the issue of mortgage backed pass through certificates (PTCs) or by a direct assignment of loans; the balance is retained by HDFC Limited. It also distributes life, general insurance and mutual fund products through its tie-ups with insurance companies and mutual fund houses.

Wholesale Banking

The Bank provides its corporate and institutional clients a range of commercial and transactional banking products. The Bank�� commercial banking business covers the corporate sector, the emerging corporate segments and some small and medium enterprises (SMEs). The Bank has a number of business groups catering to various segments of its wholesale banking customers with a range of banking services covering their working capital, term finance, trade services, cash management, foreign exchange and electronic banking requirements. The Bank�� financial institutions and government business group (FIG) offers commercial and transaction banking products to financial institutions, mutual funds, public sector undertakings, central and state government departments. The main focus for this segment is offering various deposit and transaction banking products to this segment besides offering funded, non-funded treasury and foreign exchange products.

The Bank provides its customers both working capital and term financing. The Bank�� corporate banking business includes cash management and vendor and distributor (supply chain) finance products. The Bank has a wholesale banking branch in Bahrain, a branch in Hong Kong and two representative offic! es in the! United Arab Emirates (UAE) and Kenya. The branches offer the Bank�� suite of banking services including treasury and trade finance products to its corporate clients. The Bank offers wealth management products, remittance facilities and markets deposits to the non-resident Indian community from its representative offices.

Treasury

The treasury group is responsible for compliance with reserve requirements and management of liquidity and interest rate risk on the Bank�� balance sheet. On the foreign exchange and derivatives front, revenues are driven primarily by spreads on customer transactions based on trade flows and customers��demonstrated hedging needs. The Bank offers Indian rupee and foreign exchange derivative products to its customers. The Bank enters into foreign exchange and derivative deals with counterparties after it has set up appropriate counterparty credit limits based on its evaluation of the ability of the counterparty to meet its obligations in the event of crystallization of the exposure. The Bank also deals in Indian rupee derivatives on its own account, including for the purpose of its own balance sheet risk management.

Other banking business

The Bank has two subsidiaries: HDFC Securities Limited (HSL) and HDB Financial Services Limited (HDBFS). HSL is primarily in the business of providing brokerage services through the Internet and other channels. As of March 31, 2012, HSL had a network of 184 branches across the country. HDBFS is a non-deposit taking non-bank finance company (NBFC). Apart from lending to individuals, it grants loans to small and medium business enterprises and micro small and medium enterprises, the principle businesses of HDBFS include loans, which offers a range of loans in the secured and unsecured loans space that fulfill the financial needs of its target segment; insurance services, HDBFS is a corporate agent for HDFC Standard Life Insurance Company and sells insurance products ,as well as products, ! such as L! oan Cover and Asset Cover, and collections-BPO services, which runs six call centres. These centres cover collection requirements at over 200 towns through its calling and field teams. As on March 31, 2012, HDBFS had 180 branches in 135 cities in order to distribute its products and services.

Top Financial Companies For 2014: AmTrust Financial Services Inc (AFSI)

Amtrust Financial Services, Inc., incorporated on November 7, 1990, is a holding company. The Company is a multinational specialty property and casualty insurer focused on generating consistent underwriting profits. The Company operates in four business segments: small commercial business, specialty program and personal lines reinsurance. The Company transacts business through 11 insurance company subsidiaries: Technology Insurance Company, Inc. (TIC), Rochdale Insurance Company (RIC), Wesco Insurance Company (WIC), Associated Industries Insurance Company, Inc. (AIIC), Milwaukee Casualty Insurance Company (MCIC), Security National Insurance Company (SNIC), AmTrust Insurance Company of Kansas, Inc. (AICK) and AmTrust Lloyd�� Insurance Company of Texas (ALIC). In January 2013, the Company acquired First Nonprofit Companies, Inc. In February 2013, the Company's subsidiary acquired Car Care Plan (Holdings) Limited (CCPH) from Ally Insurance Holdings, Inc.

Small Commercial Business

Small Commercial Business segment provides workers��compensation to small businesses that operate in low and medium hazard classes, such as restaurants, retail stores, physicians and other professional offices, and commercial package and other property and casualty insurance products to small businesses. The Company is authorized to write its Small Commercial Business products in all 50 states. The Company distributes its policies through a network of over 8,100 select retail and wholesale agents who are paid commissions based on the annual policy premiums written. Commercial package products provide a range of insurance to small businesses, including commercial property, general liability, inland marine, automobile, workers��compensation, and umbrella coverage.

The Company maintains Small Commercial Business property and casualty claims operations in several of its domestic offices and the commercial package claims operation is separated into four processing units: casualty, propert! y, cost-containment/recovery and a fast-track physical damage unit. As of December 31, 2012, its Small Commercial Business property and casualty claims were approximately 61% automobile and 13% property and inland marine with the remaining 26% involving general liability and umbrella losses.

Specialty Risk and Extended Warranty

The Company��Specialty Risk and Extended Warranty segment provides coverage for consumer and commercial goods and custom designed coverages, such as accidental damage plans and payment protection plans offered in connection with the sale of consumer and commercial goods in the United States and Europe, and certain niche property, casualty and specialty liability risks in the United States and Europe, including general liability, employers��liability and professional and medical liability. specialty risk business primarily covers, such as legal expenses in the event of unsuccessful litigation; property damage for residential properties; home emergency repairs caused by incidents affecting systems, such as plumbing, wiring or central heating; latent defects that materialize on real property after building or completion; payment protection to insureds if they become unable to meet financial obligations under finance contracts; guaranteed asset protection (GAP) to cover the difference between an insurer�� settlement and the asset value in the event of a total loss, and general liability, employers��liability, public liability, negligence of advisors and liability of health care providers and medical facilities.

The Company's extended warranty business covers selected consumer and commercial goods and other risks, including personal computers; consumer electronics, such as televisions and home theater components; consumer appliances, such as refrigerators and washing machines; automobiles (excluding liability coverage); furniture, and heavy equipment. The Company also serve as a third party administrator to provide claims handling and ca! ll center! services to the consumer products and automotive industries in the United States and Canada. It underwrites the specialty risk coverage on a coverage plan-level basis, which involves substantial data collection and actuarial analysis, as well as analysis of applicable laws governing policy coverage language and exclusions.

Specialty Program

The Company�� Specialty Program segment provides workers��compensation, package products, general liability, commercial auto liability, excess and surplus lines programs and other specialty commercial property and casualty insurance to a narrowly defined, homogeneous group of small and middle market companies. The type of risk covered by this segment is similar to the type of risk in Small Commercial Business but also covers, to a small extent, certain higher risk businesses. The coverage is offered through accounts with various agents to multiple insureds. Policyholders in this segment primarily include industries, such as retail, wholesale, service operations, artisan contracting, trucking, light and medium manufacturing, habitational and professional employer organizations. As of December 31, 2012, the Company underwrote 77 programs through 44 independent wholesale and managing general agents. Workers��compensation insurance consists approximately 33% of this business during the year ended December 31, 2012.

Personal Lines Reinsurance

The Company�� Personal Lines Reinsurance Segment has a 20% participation in the Personal Lines Quota Share, by which it receive 10% of the net premiums of the personal lines business. The Personal Lines Quota Share provides that the reinsurers, severally, in accordance with their participation percentages, will receive 50% of the net premium of the GMACI Insurers and assume 50% of the related net losses.

Top Financial Companies For 2014: Genterra Inc (GIC.V)

Genterra Capital Inc. engages in the investment and rental of real estate properties in Ontario, Canada. The company also invests in marketable securities. Its real estate investment portfolio comprises industrial single and multi tenant, multi tenant commercial, commercial residential redevelopment, and loft conversion properties. Genterra Capital Inc. is headquartered in Toronto, Canada.

Top Financial Companies For 2014: Gladstone Capital Corporation(GLAD)

Gladstone Capital Corporation is a business development company and operates as a closed-end non-diversified management investment company. It invests in debt and equity securities of small and medium-sized private United States businesses. The company primarily invests in various categories of debt of private companies comprising senior notes, senior subordinated notes, and junior subordinated notes.

Thursday, January 16, 2014

Nu Skin: Time to Throw in the Towel?

Shares of Nu Skin (NUS) continue to plunge after the Wall Street Journal reported that China would investigate allegations that the multi-level marketer is a pyramid scheme.

Reuters

Yesterday, the People’s Daily ran a story accusing the company of using sales techniques that bordered on brainwashing. While the story can be easily dismissed–and was–the fact that China is investigating cannot.

So says Canaccord Genuity’s Scott Van Winkle and Mark Sigal, who downgraded Nu Skin to Hold from Buy today. They write:

While we found yesterday's article to be the type of complaint multi-level marketers often face, we believe that any government investigation in China opens questions that we can't forecast. Even with laws to provide a path, we don't believe that anyone can predict the Chinese government in this instance.

Lowering rating to HOLD from Buy to reflect a new level of risk in China, which at roughly one-third of our 2013 revenue forecast is a large enough market to significantly impact not only the financial results but also the valuation.

Nu Skin has plunged 20% to $92.52 today at 10:51 a.m., and has dragged down other multi-level marketers with it. Herbalife (HLF) has dropped 5.9% to $74.74, while Usana Health Sciences (USNA) has fallen 9.1% to $59.77.

Maybe it’s because China is a heck of a lot bigger than Belgium? Remember, back in December, a Beligian court ruled that Herbalife was not a pyramid scheme, which had some bulls acting as if the debate was decided. China, however, is a much bigger beast, and if it come to the conclusion that Nu Skin is indeed a pyramid scheme, it’s not impossible that the issue will become front and center for other multi-level markers again.

I’ll leave you with a piece of a Citron Research report on Nu Skin from Oct 2013, that reminded investors that China’s newspapers were already looking into the case of Nu Skin even as the company was in the midst of a 275% rally. It warned:

…the government is aware of the Nu Skin issue and more importantly aware that it is a problem in Chinese society that will eventually be addressed. In the case of Nu Skin, this could easily be sooner rather than later, as it is a foreign company corrupting its citizens while its U.S. management has no direct accountability to the Chinese Government.

UPDATE: The day isn’t getting any better for Nu Skin. Shares have now dropped 28% to $82.61 at 2:41 p.m. and been halted numerous times. MarketWatch has the details:

Shares of Nu Skin Enterprises Inc. NUS -28.36% were halted four times Thursday after the anti-aging product company responded to pyramid-scheme allegations in China. Nu Skin shares were down 33% to $77.61 after the fourth halt was lifted…In a statement, Nu Skin said it will communicate and cooperate with Chinese regulators and conduct its own business review in China.