Monday, March 31, 2014

Markets Up as S&P Gets Whiff of All-Time Closing High

NEW YORK (TheStreet) -- Last Thursday, we mentioned that the markets were searching for a bottom, and this past Friday, we mentioned that the markets may have found a bottom. In retrospect, that was the correct market call from a short-term trading perspective.

The S&P 500 index held its daily buy-trade level of 1842 last Thursday and zoomed higher from there this past Friday and on Monday.

With all this upside momentum on Monday, the S&P 500 was not able to close above its all-time closing high of 1878. This was the third attempt. On the edge, that is not a bullish sign.

The DJIA closed at 16,457.66, up 134.60, and the S&P 500 closed at 1872.34, up 14.72.

Volume was pathetic Monday, which is another bad sign. The up days in 2014 have been common for their lack of buying conviction, as has been mentioned in previous columns. On a more positive note, just when the bears were growling the most to short this market at 1842, and saying that a market top had been put in, the markets came roaring back again, as has been the case this year. The "buy the dips, sell the rips" philosophy has been the key to trading this market. As mentioned in Friday's column, the Nasdaq and Russell 2000 indexes were in oversold territory and were both poised for a continued move higher this week. The Nasdaq and Russell 2000 did indeed surge higher on Monday. The Nasdaq closed up 43.23 points at 4,198.99 and the Russell 2000 closed up 21.22 points at 1173. Both indexes have now worked off their oversold conditions. A traders market, pure and simple. If the DJIA continues to stay in the green, by Wednesday it will be well into overbought territory according to those same internal algorithm numbers that flagged the Nasdaq and Russell 2000 indexes as being oversold. So, I expect more volatility this week and some selling pressure as the week progresses.

Stock quotes in this article: OWW, SWY 

We need to keep watch of the CRB Food Index and the CRB Commodities Index in 2014. The CRB food index is up +19.3% year to date and the commodities index is up +8.9% year to date. Both of these are inflation-accelerating signals. In addition, the Spyders Select Utilities ETF is up +8% year to date. Inflation slows growth.

The month of March is now history, so the end of month window dressing and quarter end is over. What the month of April brings is anyone's guess. The S&P 500 daily trading range held true again today. Trading the ranges is the formula for success in 2014.

Two positions that were mentioned in Friday's column were Orbitz (OWW) and Safeway (SWY). OWW was sold on Monday morning for a nice profit again. I did add to the SWY at the close of trading.

At the time of publication, the author held positions in SWY, but positions may change at any time.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

Stock quotes in this article: OWW, SWY 

Sunday, March 30, 2014

Publishers Pierce Google's Armor, Snapping Up Mobile Display Share

There are two main types of digital advertisers: ad networks like Google (NASDAQ: GOOG  ) and Apple's (NASDAQ: AAPL  ) iAd, and publishers like Pandora (NYSE: P  ) , Twitter, and Facebook (NASDAQ: FB  ) . Though publishers still lag ad networks on PCs, they're dominating mobile display ads, according to a report released by IDC on Tuesday. As shipments of Internet-connected mobile devices soar and their capabilities continue to increase, these disruptive publishers seem to have the upper hand.

Disruptive technologies reveal Google's weakness
Google has definitely seen its share of significant success on mobile; the company captured 54.5% of all mobile ad spending in the U.S. in 2012, according to a study by Pew Research Center. Though Google may boast volume of digital ad revenue, Facebook, Twitter, Pandora, and even The Weather Channel have outpaced Google in mobile adoption of digital display ads by a long shot.

A recent report from IDC provided some perspective.

Facebook, Pandora, Twitter, and The Weather Channel all registered strong sales in 2012 and all (with the exception of Pandora) popped onto the scene from zero sales in 2011. As a result, publishers controlled 52% of U.S. mobile display ad spending in 2012, compared to the 39% they received in 2011.

"Mobile ad networks are losing market share to publishers, and we expect them to lose even more going forward," explained Karsten Weide, IDC's vice president of media & entertainment.

Mobile display advertising itself is the fastest growing sub-segment within mobile advertising, which increased its market share of total mobile display advertising from 31% to 39% from 2011 to 2012. Mobile search ads, at 61%, still hold sway over the market, which obviously works in Google's favor, but the power has already shifted to publishers in mobile display ads.

Mobile display advertising in 2012

Rank Company Gross Revenue Type
1 Google $243 million Ad network
2 Facebook $234 million Publisher
3 Pandora $229 million Publisher
4 Millennial Media $151 million Ad network
5 Apple $125 million Ad network
6 Twitter $117 million Publisher
7 Jumptap $90 million Publisher

Valuation matters
Valuation, however, brings expectations down to earth. Google should continue to lose significant mobile display advertising market share to Facebook, Pandora, and Twitter, but the overall growth of the mobile advertising market, which grew by 88% in 2012, should still drive significant growth for Google within investors' expectations for the stock.

Facebook, for instance, trades at a whopping 11.7 times sales, more than twice Google's price-to-sales ratio of 5. In other words, investors have already priced significant growth into Facebook's stock. Pandora is the exception here, trading at just 5.3 times sales, despite its blazing 53% year-over-year revenue growth in the company's most recent quarter.

Pandora's seemingly conservative valuation, of course, has its reasons. First, the company is only flirting with profitability. Second, the company is still relatively small compared to the other tech companies with a significant sway of the digital music market. Investors are worried that Pandora could face increasing competition from bigger players.

Betting on mobile
While Pandora's position isn't secure enough for me to play ball yet, Google and Facebook both look like solid long-term bets in the fast-growing mobile ad market. Yes, Google is losing share in the mobile display market, but it still dominates mobile search with a whopping 79% share of the U.S. market. Both Google and Facebook have found their way to my brief list of outperform CAPScalls.

After the world's most hyped IPO turned out to be a dunce, most investors probably don't even want to think about shares of Facebook. But there are things every investor needs to know about this company. We've outlined them in our newest premium research report. There's a lot more to Facebook than meets the eye, so read up on whether there is anything to "like" about it today, and we'll tell you whether we think Facebook deserves a place in your portfolio. Access your report by clicking here.

Saturday, March 29, 2014

Newsweek's ties to evangelical school resurface

The strange and fuzzy ties between Newsweek and an evangelical school resurfaced Friday after The Guardian dug up new details about the magazine's owners and their operations.

The new claims include an acknowledgment by Newsweek's parent company, IBT Media, that it has given money to Olivet University – a Christian college founded by Pastor David Jang from South Korea -- despite past insistence by IBT executives that it has no financial ties to the school.

The story also claims that Johnathan Davis, 31, IBT's chief content officer who said he owns about half of the company, once praised an editorial that espoused ex-gay therapy, a controversial practice aimed at curing same-sex attraction.

Davis and his business partner, Etienne Uzac, 30, have said that they funded their business through money derived from personal savings and a loan from the Small Business Administration, not though venture funds. Uzac, who is IBT's CEO, told USA TODAY earlier this year that they each have roughly a 50% stake in the company.

The media spotlight on the relatively unknown entrepreneurs follows a splashy relaunch of the 81-year old brand in early March after its previous owner, IAC Interactive, stopped printing it in December 2012.

The cover story for the inaugural issue -- which purportedly identified the founder of crypto currency Bitcoin -- has been criticized by some media critics and on social media since the man who was named in the story, Dorian Satoshi Nakamoto, denied that he was involved in creating the digital currency. Newsweek's editors have stood by the story.

IBT's ties to Olivet raised in 2012

That IBT Media may be one of several for-profit businesses controlled by Olivet's leaders has been reported since 2012. In a story by Christianity Today in August 2012, Davis was revealed to have once been an employee of Olivet University, and his wife, Tracy, was -- and is -- the president of the Bay Area-based school.

Jang is no longer listed on the leadership sectio! n of the school's website. But citing unnamed sources, Christianity Today's 2012 story said IBT "leaders took part in Internet chats with Jang (usually weekly), where the pastor laid out his plans for various business units, like Olivet University and the Christian Post."

David told The Guardian that Christianity Today's 2012 story contained "so many mistakes."

Uzac was once listed as the school's treasurer and was a member of Olivet's board of trustees until last year, The Guardian reported.

Uzac's wife, Marion, was previously the press secretary for the World Evangelical Alliance, which is closely associated with Olivet University. Olivet is a member of the alliance and Jang sits on the alliance's North American council, The Guardian reported.

IBT Media still recruits often from Olivet, in a deal described by Tracy Davis as resembling Google's relationship with Stanford University. IBT's news website, International Business Times, was listed in 2008 as an "Olivet ministry affiliate" in a handbook given to Olivet students looking for jobs, the Guardian report said.

"I understand why people ask questions," he told The Guardian. "But I'd also like the journalism to speak for itself."

Newsweek's possible ties to Jang evokes another case of high-profile American media ownership by a controversial religious leader from South Korea. Sun Myung Moon, the late founder of the Unification Church, founded The Washington Times in the early 1980s as an instrument of influence and a public relations vehicle for his empire that included for-profit businesses.

Christianity Today asserted in 2012 that Jang once taught in a Unification Church seminary. Tracy Davis told The Guardian that "Mr. Jang is not part of Rev. Moon's church."

Uzac and David could not be reached for comment Saturday.

Jang's influence on IBT Media remains unclear. While Uzac told BuzzFeed in 2013 that he knows Jang, Jang and Davis have said repeatedly they operate IBT independently. But The Guardi! an, combi! ng through corporate records, found other records that place Davis' professional involvement near Olivet's reach.

Davis once headed a financial news and research firm, IBTraders, which is now based in New York. IBTraders is now registered to an office building on Whitehall Street in lower Manhattan. A members-only club for Christian businessmen and women is based in the same building and is run by the World Olivet Assembly, The Guardian reported. Jang is the assembly's president, the report said.

Davis also didn't deny to The Guardian that he wrote in a Facebook post – since erased – that he thought the editorial about ex-gay therapy "was shockingly accurate."

He said his personal belief about homosexuality has no "bearing on my capacity here as the founder of the company. I'm not sure how it's relevant. People believe all sorts of weird things. But from a professional capacity, it's unrelated."

Jim Impoco, editor of Newsweek, tweeted Friday: "I'm super proud of the #LGBT coverage in @Newsweek, and grateful for our extraordinarily talented #LGBT staff."

Thursday, March 27, 2014

Counterpoint: Let's Restore the Hourly Wages Cut by Obamacare

House GOP Tom Williams/CQ Roll Call/GettyHouse Minority Leader Eric Cantor (R-Va.) On Jan. 31, a fry cook asked President Obama why his hours were being cut to part time because of Obamacare, and the President responded by saying he was pushing to raise the minimum wage. This moment between the fry cook and the President reveals the entire reasoning of the Democratic Party's push to raise the minimum wage. Rather than restore wages and hours lost by working middle-class Americans due to Obamacare, Democrats are hiding these losses behind a false debate about the minimum wage. Just look at the math. In 2013, President Obama supported a $9 minimum wage. This year, he proposed a $10.10 minimum wage, which at the federal level turns out to be an increase roughly equal to the amount of wages a minimum wage employee would lose if they had their hours cut by 25 percent, as is happening under one provision of Obamacare. Coincidence? Here's how Obamacare creates those wage cuts. Under the law, an employer is required to offer government-mandated health care plans to full-time employees if they have 50 or more employees. The law then goes on to define a full-time employee as someone working 30 hours or more per week. This added regulation makes it prohibitively expensive for many employers to keep all their employees working more than 29 hours, so hours are reduced, no new hires are made, and often jobs are simply cut. Many school districts near my hometown of Richmond, Va., are already implementing policies limiting part-time workers to less than 30 hours as a direct result. The added costs of government-mandated health care will strain their budgets and probably cause even more Obamacare-related job losses. A substitute teacher, Amy Harbert, told the Richmond Times-Dispatch: "The people that it's going to affect are the people that need or want to work every single day." Another substitute teacher, Norman Sulser told the paper: "Effectively, you've been laid off a day and a half. It's another impact [of the law] that people didn't see coming." In 21 states, the minimum wage is already higher than the federal minimum of $7.25. A substitute teacher in Washington state, for example, where the minimum wage is $9.32, could lose as much as $102.52 a week because of Obamacare. These wage cuts aren't fair to the fry cooks and substitute teachers who didn't see this coming and don't deserve to lose hard-earned money in their pocket. The President is attempting to distract people from these wage cuts by proposing a minimum wage increase, but that would only make matters worse. The CBO found that about 500,000 jobs would be lost under the President's proposal. One survey by staffing company Express Employment Professionals found that 54 percent of minimum wage employers would reduce hiring and 38 percent would lay off employees if the President's proposals were adopted. Several more surveys and polls found similar findings. So in response to lost jobs, hours and wages due to Obamacare, President Obama is proposing cutting more hours, and more jobs. The madness has to stop. America is not working when Washington is creating incentives for businesses to cut back the hours and reduce the wages of hardworking Americans. America is not working when Democratic policies, like Obamacare, encourage people to be fired rather than hired. An America that works encourages job growth and encourages employers to offer more hours to its employees. An America that works gets Washington out of the way so middle-class Americans can experience higher wages, more hours, more opportunity and greater prosperity. In 2009, then-Speaker Nancy Pelosi (D-Calif.) famously said of Obamacare: "We have to pass the bill so that you can find out what is in it." Now that Americans are experiencing first-hand what was in the bill, Democrats are doing anything they can to push these policies back under the rug until after the next Election Day. It won't work. All of the delays, all of the distractions and all of the political games cannot hide the devastating effects of Obamacare. And meanwhile, the victims of these Democratic tactics are the American people who deserve better. Democrats know the law they drafted is hurting people. Rather than hide the problem, let's solve it. Next week in the U.S. House of Representatives, we will vote to restore wages and hours by up to 25 percent for Americans impacted by Obamacare. Let's put the politics aside for once, and do what is right for the American people.

CanadaĆ¢€™s Inflation Finally Heats Up

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Last October, the Bank of Canada (BoC) abandoned its rate-hike bias due to concerns about the country's persistent disinflation. Those fears seemed to be borne out by subsequent showings of Canada's consumer price index (CPI), whose readings for each month of the fourth quarter either equaled economists' gloomy predictions or were actually slightly worse.

But more recent results suggest that Canada's inflation could finally be heating up. In January, the country's CPI increased 0.3 percent month over month, exceeding the consensus forecast by a substantial two-tenths of a percentage point.

The core CPI, which excludes volatile components such as food and energy, rose 0.2 percent, beating expectations by a tenth of a point. On a year-over year basis, prices rose 1.5 percent.

And now with Statistics Canada's release of the latest numbers, we can see that February's results were even better on a trend basis, with the CPI climbing 0.8 percent month over month, two-tenths of a point better than projected.

Meanwhile, the core CPI rose 0.7 percent, also two-tenths of a point higher than forecast. On a year-over year basis, prices were up 1.1 percent. That's a deceleration from January's figure, though still a tenth of a point better than predicted.

These strong numbers make it increasingly unlikely that policymakers will lower short-term rates again. The central bank's overnight rate has stood at 1 percent since late 2010, the longest such pause in its history.

The BoC's primary mandate is to keep total CPI inflation at the 2 percent midpoint of a target range of 1 percent to 3 percent over the medium term.

Whenever inflation deviates from its 2 percent target, the bank adjusts the overnight rate with the hope of achieving the target within about two years, which is the time it typically takes for changes in monetary policy to flow through the economy. To that end,! economists with CIBC World Markets expect inflation to be near the bank's 2 percent target by year-end.

In response to the CPI as well as stronger-than-expected retail sales, the Canadian dollar rallied off its four-year low of USD0.8894, which it hit last Thursday. Since then, the loonie has climbed 0.8 percent, to USD0.8962. For those keeping score of its longer-term moves, the currency is down about 15.5 percent from this cycle's high in mid-2011.

In fact, the loonie's slide has likely been a key factor in shaking off the country's disinflation, though a 1.4 percent increase in an alcohol, beverages and tobacco tax also contributed to the latest headline number.

Since most commodities are priced in US dollars, Canadians are now paying higher prices on natural gas and gasoline, as well as for some food products, many of which are imported.

While a lower exchange rate will be helpful to Canada's export sector, some economists are worried that it could undermine business investment, since a significant amount of machinery and equipment is imported. In addition to achieving its inflation mandate, the BoC also hopes a weak Canadian dollar will spur exports and boost business investment.

Although private-sector economists believe Canada's economy will grow by 2.2 percent this year, much of that growth will occur during the second half. Despite some of the rosier economic data that have been released recently, a colder-than-normal winter is expected to weigh heavily on first-quarter gross domestic product (GDP).

The consensus forecast is for GDP to grow just 1.6 percent during the first quarter, which would be the slowest pace since late 2012. Of course, numerous economic data have had stronger-than-expected showings this winter, so it's still entirely possible that the broad economy could deliver its own upside surprise for the first quarter.

Subscribers to Canadian Edge get to read the full update, which includes our latest analysis of a company who! se shares! currently yield 5.2 percent and whose earnings per share are expected to jump 71 percent this year.

Tuesday, March 25, 2014

5 Stocks Set to Soar on Bullish Earnings

DELAFIELD, Wis. (Stockpickr) -- Short-sellers hate being caught short a stock that reports a blowout quarter. When this happens, we often see a tradable short squeeze develop as the bears rush to cover their positions to avoid big losses. Even the best short-sellers know that it's never a great idea to stay short once a bullish earnings report sparks a big short-covering rally.

>>5 Rocket Stocks to Buy as Stocks Test Highs

This is why I scan the market for heavily shorted stocks that are about to report earnings. You only need to find a few of these stocks in a year to help enhance your portfolio returns -- the gains become so outsized in such a short time frame that your profits add up quickly.

That said, let's not forget that stocks are heavily shorted for a reason, so you have to use trading discipline and sound money management when playing earnings short-squeeze candidates. It's important that you don't go betting the farm on these plays and that you manage your risk accordingly. Sometimes the best play is to wait for the stock to break out following the report before you jump in to profit off a short squeeze. This way, you're letting the trend emerge after the market has digested all of the news.

Of course, sometimes the stock is going to be in such high demand that you risk missing a lot of the move by waiting. That's why it can be worth betting prior to the report -- but only if the stock is acting technically very bullish and you have a very strong conviction that it is going to rip higher. Just remember that even when you have that conviction and have done your due diligence, the stock can still get hammered if The Street doesn't like the numbers or guidance.

>>5 Stocks Ready for Breakouts

If you do decide to bet ahead of a quarter, then you might want to use options to limit your capital exposure. Heavily shorted stocks are usually the names that make the biggest post-earnings moves and have the most volatility. I personally prefer to wait until all the earnings-related news is out for a heavily shorted stock and then jump in and trade the prevailing trend.

With that in mind, here's a look at several stocks that could experience big short squeezes when they report earnings this week.

G-III Apparel Group

My first earnings short-squeeze trade idea is clothing and apparel player G-III Apparel Group (GIII), which is set to release numbers on Tuesday before the market open. Wall Street analysts, on average, expect G-III Apparel Group to report revenue of $489.93 million on earnings of 49 cents per share.

>>4 Stocks Breaking Out on Big Volume

Just recently, Buckingham recommended that investors maintain long positions in G-III Apparel Group ahead of its fourth-quarter EPS, which the firm expects to beat Street expectations. The firm has a buy rating on the stock.

The current short interest as a percentage of the float for G-III Apparel Group is pretty high at 8.8%. That means that out of the 16.80 million shares in the tradable float, 1.48 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 9.3%, or by about 125,000 shares. If the bears get caught pressing their bets into a bullish quarter, then shares of GIII could easily rip sharply higher post-earnings as the shorts rush to cover some of their bets.

From a technical perspective, GIII is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending over the last month, with shares moving higher from its low of $64 to its recent high of $77.22 a share. During that move, shares of GIII have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of GIII within range of triggering a near-term breakout trade.

If you're bullish on GIII, then I would wait until after its report and look for long-biased trades if this stock manages to break out above its 52-week high of $77.22 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 316,923 shares. If that breakout materializes, then GII will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $85 to $90 a share.

I would simply avoid GIII or look for short-biased trades if after earnings it fails to trigger that breakout and then drops back below its 50-day moving average at $70.37 a share with high volume. If we get that move, then GIII will set up to re-test or possibly take out its next major support levels $64 to its 200-day moving average of $59.04 a share.

Francesca's

Another potential earnings short-squeeze play is retail boutiques chain operator Francesca's (FRAN), which is set to release its numbers on Wednesday before the market open. Wall Street analysts, on average, expect Francesca's to report revenue $94.33 million on earnings of 28 cents per share.

>>5 Stocks Under $10 Set to Soar

The current short interest as a percentage of the float for Francesca's is extremely high at $17.5%. That means that out of the 41.19 million shares in the tradable float, 7.21 million shares are sold short by the bears. If the bulls get the earnings news they're looking for, then shares of FRAN could easily explode sharply higher post-earnings as the bears move quick to cover some of their positions.

From a technical perspective, FRAN is currently trending above its 50-day moving average and just below its 200-day moving average, which is neutral trendwise. This stock has been uptrending for the last month and change, with shares moving higher from its low of $17.74 to its recent high of $21.13 a share. During that move, shares of FRAN have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of FRAN within range of triggering a near-term breakout trade post-earnings.

If you're in the bull camp on FRAN, then I would wait until after its report and look for long-biased trades if this stock manages to break out above some near-term overhead resistance levels at $21.13 to $22.60 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 818,397 shares. If that breakout hits, then FRAN will set up to re-test or possibly take out its next major overhead resistance levels at $29.50 to $32 a share.

I would simply avoid FRAN or look for short-biased trades if after earnings it fails to trigger that breakout and then drops back below its 50-day moving average of $19.59 a share with high volume. If we get that move, then FRAN will set up to re-test or possibly take out its next major support levels at $17.74 to $17.54 a share. If those levels get taken out with volume, then FRAN will set up to re-test or possibly take out its 52-week low of $15.62 a share.

Five Below

Another potential earnings short-squeeze candidate is specialty value retailer Five Below (FIVE), which is set to release numbers on Tuesday after the market close. Wall Street analysts, on average, expect Five Below to report revenue of $207.98 million on earnings of 45 cents per share.

>>5 Stocks Insiders Love Right Now

The current short interest as a percentage of the float for Five Below is extremely high at 22.2%. That means that out of the 46.73 million shares in the tradable float, 10.39 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 3.5%, or by about 346,000 shares. If the bears get caught pressing their bets into a strong quarter, then shares of FIVE could easily spike sharply higher post-earnings as the shorts rush to cover some of their trades.

From a technical perspective, FIVE is currently trending above its 50-day moving average and below its 200-day moving average, which is neutral trendwise. This stock has been trending range bound over the last month, with shares moving between $36.59 on the downside and $40.14 on the upside. Market players should now watch for a potential breakout trade post-earnings if FIVE manages to take out the upper-end if of its recent sideways trading chart pattern.

If you're bullish on FIVE, then I would wait until after its report and look for long-biased trades if this stock manages to break out above some near-term overhead resistance levels $39.21 to $40.14 a share and then once it clears its 200-day moving average of $41.83 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 1 million shares. If that breakout starts, then FIVE will set up to re-test or possibly take out its next major overhead resistance levels at $45 to $48 a share.

I would avoid FIVE or look for short-biased trades if after earnings it fails to trigger that breakout and then drops back below some key near-term support at $36.59 a share with high volume. If we get that move, then FIVE will set up to re-test or possibly take out its next major support levels at $34.77 to its 52-week low of $33.94 a share. Any high-volume move below $33.94 a share will then push FIVE into new 52-week-low territory, which is bearish technical price action.

Lindsay

Another earnings short-squeeze prospect is water management and road infrastructure products and services provider Lindsay (LNN), which is set to release numbers on Wednesday before the market open. Wall Street analysts, on average, expect Lindsay to report revenue of $162.89 million on earnings of $1.13 per share.

>>Hedge Funds Are Selling These 5 Stocks -- Should You?

The current short interest as a percentage of the float for Lindsay is extremely high at 37.2%. That means that out of the 12.58 million shares in the tradable float, 4.69 million shares are sold short by the bears. This is a huge short interest on a stock with a very low tradable float. Any bullish earnings news could easily send shares of LNN soaring higher post-earnings as the bears rush to cover some of their bets.

From a technical perspective, LNN is currently trending below its 50-day moving average and just above its 200-day moving average, which is neutral trendwise. This stock has been downtrending badly for the last two months, with shares moving lower from its high of $92.66 to its intraday low of $79.74 a share. During that move, shares of LNN have been consistently making lower highs and lower lows, which is bearish technical price action.

If you're bullish on LNN, then I would wait until after its report and look for long-biased trades if this stock manages to break out above it 50-day moving average of $84.88 a share and then once it takes out some more near-term overhead resistance levels at $86.30 to $87 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 207,797 shares. If that breakout hits, then LNN will set up to re-test or possibly take out its next major overhead resistance levels at its 52-week high of $94.50 a share.

I would simply avoid LNN or look for short-biased trades if after earnings it fails to trigger that breakout and then drops back below its 200-day moving average of $79.62 a share to more near-term support at $76 a share with high volume. If we get that move, then LNN will set up to re-test or possibly take out its next major support levels at $74 to its 52-week low of $71.13 a share. Any high-volume move below $71.13 will then push shares of LNN into new 52-week-low territory, which is bearish technical price action.

Lululemon Athletica

My final earnings short-squeeze play is athletic apparel player Lululemon Athletica (LULU), which is set to release numbers on Thursday before the market opens. Wall Street analysts, on average, expect Lululemon Athletica to report revenue of $516.80 million on earnings of 72 cents per share.

Just recently, Mizuho said it expects Lululemon Athletica to report an in-line fourth quarter but that commentary regarding higher SG&A and an earnings outlook below $2 could pressure shares. The firm has a neutral rating on the stock with a $48 per share price target.

The current short interest as a percentage of the float for Lululemon Athletica is very high at 20.2%. That means that out of the 21.06 million shares in the tradable float, 1.32 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 8%, or by about 1.56 million shares. If the bears get caught pressing their bets into a bullish quarter, then shares of LULU could easily spike sharply higher post-earnings as the shorts jump to cover some of their trades.

From a technical perspective, LULU is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has been downtrending over the last month, with shares moving lower from its high of $53.39 to its recent low of $46.40 a share. During that move, shares of LULU have been making mostly lower highs and lower lows, which is bearish technical price action. That said, shares of LULU have started to bounce off that $46.40 low and it's starting to move within range of triggering a near-term breakout trade post-earnings.

If you're in the bull camp on LULU, then I would wait until after its report and look for long-biased trades if this stock manages to break out above its 50-day moving average of $48.84 a share and then once it takes out more overhead resistance levels at $50.94 to $53.39 a share with high volume. Look for volume on that move that hits near or above its three-month average volume of 3.67 million shares. If that breakout hits, then LULU will set up to re-fill some of its previous gap-down-day zone from January that started near $60 a share.

I would avoid LULU or look for short-biased trades if after earnings it fails to trigger that breakout, and then drops back below some key near-term support levels at $46.40 to its 52-week low of $44.32 a share with high volume. If we get that move, then LULU will set up to enter new 52-week-low territory, which is bearish technical price action. Some possible downside targets off that move are $40 to $35 a share.

To see more potential earnings short squeeze plays, check out the Earnings Short-Squeeze Plays portfolio on Stockpickr.

-- Written by Roberto Pedone in Delafield, Wis.


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At the time of publication, author had no positions in stocks mentioned.

Roberto Pedone, based out of Delafield, Wis., is an independent trader who focuses on technical analysis for small- and large-cap stocks, options, futures, commodities and currencies. Roberto studied international business at the Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany. His work has appeared on financial outlets including

CNBC.com and Forbes.com.

You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zerosum24.


Sunday, March 23, 2014

Producer prices fall 0.1%; inflation still weak

WASHINGTON (AP) — The prices companies receive for their goods and services fell slightly in February, the latest sign that inflation is tame.

The producer price index, which measures price changes before they reach the consumer, dropped 0.1 percent in February, the Labor Department said Friday. That's the first decline since November. A sharp fall in the price markups by wholesalers and retailers pushed down the index.

Wholesale food and energy prices increased, as did the cost of pharmaceuticals. Excluding the volatile categories of food, energy and retailer and wholesaler profit margins, core prices ticked up 0.1 percent.

The figures underscore that inflation remains largely in check. Businesses have struggled to raiseprices because of historically high levels of unemployment and meager wage growth. That's made it harder for consumers to pay more. And with unemployment high, those with jobs are less able to demand higher pay.

The data also reflects the impact of aggressive discounting by clothing and shoe stores. Their profit margins fell 9.3 percent, the steepest on record. Gas stations and grocery stores also reduced their markups.

Low inflation has enabled the Federal Reserve to pursue extraordinary stimulus programs to try to boost economic growth. It has kept the short-term interest rate it controls at nearly zero for more than five years. It has also been purchasing bonds in an attempt to lower long-term interest rates to encourage more borrowing and spending.

The Fed is now trying to unwind some of that stimulus. It has cut its monthly bond purchases to $65 billion, from $75 billion in January and $85 billion last year.

Fed policymakers will meet next week and are expected to announce another $10 billion cut. Employers stepped up hiring last month, after harsh winter weather cut into job gains in December and January. Consumers also spent more at retailers in February after sharp drops in the previous two months.

The figures suggest the economy ! may be picking up as the weather improves. That may encourage the Fed to continue scaling back its stimulus. Still, Fed policymakers have expressed concern about the persistence of low inflation. If it remains below target, the Fed could extend its stimulus efforts.

Saturday, March 22, 2014

Tiffany & Co. Reports Q4 Net Loss; Weak Outlook; $300M Share Buyback Program (TIF)

Shares of Tiffany & Co. (TIF) were down on Friday morning after the company reported a net loss and a weak outlook. 

TIF’s Earnings in Brief

TIF posted a Q4 net loss of $103.6 million or 81 cents per share, compared to net income of $179.64 million, or $1.40 per share, a year ago.  Excluding special items, earnings were $1.47 per share, compared to $1.40 per share last year. Revenue increased to $1.3 billion from $1.235 billion last year. On average, analysts expected to see earnings of $1.52 per share and $1.31 billion in revenue. Looking forward, the company expects to see FY2014 earnings between $4.05 and $4.15 per share, while analysts expect to see FY2014 earnings of $4.28 per share.

TIF’s Repurchase Plan

The company also reported that its board has authorized a new stock buy back program. The new program authorizes $300 million in common stock and will expire on March 31, 2017.

CEO Commentary

Michael J. Kowalski, chairman and CEO, commented: “We are proud of our performance this past year. Sales and operating earnings (excluding the arbitration-related charge) rose to record levels. Sales growth was led by fine and statement jewelry, new or expanded jewelry collections including the ATLAS, ZIEGFELD, and HARMONY collections, and continuing strength in our iconic jewelry designs. Tiffany’s marketing communications more effectively engaged global consumers wherever they shopped, our distribution network was expanded by 14 additional stores, and everywhere the store experience was enhanced by improved visual merchandising. And we made important additions to our management team to strengthen our ability to capitalize on the global growth opportunities before us.”

TIF’s Dividend

TIF declared its last 34 cent quarterly dividend on February 20. The dividend will be payable on April 10 and went ex-dividend on March 18. We expect TIF to declare its next dividend in May.

 Stock Performance 

Tiffany & Co. shares were down $3.07, or 3.37%, during pre-market trading Friday. The stock is down 1.74% YTD.

How to Profit From Rising Gold Prices

On December 18, the Federal Reserve announced that it was slowing down quantitative easing and would buy less Treasury and agency securities. This was the start of the much awaited "taper" that the markets had been expecting for a good portion of last year. Since that time, gold has significantly outperformed the S&P 500 index, a reversal from previous months in which the index outperformed gold.

GLD Chart

GLD data by YCharts

Why gold?
Gold's outperformance almost seems counter-intuitive. After all, one of the biggest arguments that gold bugs have presented is that the Fed's quantitative easing program is resulting in more fiat money circulating throughout the economy, leading to inflation. Gold is often used as a hedge against inflation. 

Therefore, we would expect the price of gold to fall as quantitative easing comes to a close. But, that hasn't happened. Instead, the fundamentals for the yellow metal have taken over as demand for it has surged. 

Gold trusts and ETFs
One of the easiest ways to profit off of a rising gold price is to buy shares in one of the various exchange-traded gold trusts. These are essentially closed-end funds that own physical gold bullion located in a vault. Each share of the trust represents a fractional ownership share of the physical bullion in the vault. Thus, these trusts could be an easy way to purchase gold exposure directly on an exchange. One example of a trust like this is the Sprott Physical Gold Trust (NYSEMKT: PHYS  ) .

There are also ETFs available that track the price of gold. These differ from the pure gold trusts because they are open-ended. What this means is that the custodian stands ready to both issue and redeem new shares as market demand dictates. ETFs such as SPDR Gold Shares (NYSEMKT: GLD  ) also consist of physical gold bullion stored in a vault. However, it is not a fixed quantity. Instead, the fund buys more physical gold whenever the demand for its shares increases and it sells off some of this physical gold whenever demand for its shares decreases.

Senior gold miners
Another way to profit from rising gold prices is to invest in the producers. One advantage that investing in mining companies can have over the purchase of physical gold is the ability to derive cash flow from your investment. The only way to profit off of an investment in physical gold is to sell it for a higher price than what you bought it for. Mining companies, however, do generate cash, and in many cases the mining company returns some of this cash to investors in the form of a dividend. For example, Goldcorp (NYSE: GG  ) , one of the largest gold miners in the world, pays a trailing dividend of $0.60 per share. This is a 2.10% yield at the current stock price.

For an investor looking to primarily bet on gold prices, it may make more sense to make a broader bet and invest in an ETF that owns shares in all the gold mining companies rather than trying to pick and choose between them. One ETF that does this is the Market Vectors Gold Miners ETF (NYSEMKT: GDX  ) . This ETF owns shares in the largest gold mining companies in the world, weighted by market cap.

Source: Yahoo Finance

The price of GDX tends to move with the price of gold. However, the ETF tends to make moves of a much greater magnitude, allowing the equivalent of leveraged exposure to gold prices without actually using leverage.

GLD Chart

GLD data by YCharts

Junior gold miners
It may be possible to profit further from a rising gold price by purchasing shares in smaller gold mining companies, termed junior gold miners. These mining companies are much smaller than the majors and many are much weaker financially. Therefore, junior gold miners are much riskier than the larger companies that make up GDX, so when gold prices fall, these companies tend to make a much larger downward move than in their larger peers.

GLD Chart

GLD data by YCharts

However, should gold continue to move upward then junior gold miners should deliver much greater returns than either physical gold or senior gold miners. This can be seen in the above price chart of the Market Vectors Junior Gold Miners ETF  (NYSEMKT: GDXJ  ) , which has outperformed any of the other gold investments discussed in this article.

A good investment vs. a game-changing investment
There's a huge difference between a good stock and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.

 

Thursday, March 20, 2014

Best Internet Companies To Invest In Right Now

LOS ANGELES (AP) --�Google's (NASDAQ: GOOG  ) new music service offers a lot of eye candy to go with the tunes. The song selection of around 18 million tracks is comparable to popular services such as Spotify and Rhapsody, and a myriad of playlists curated along different genres provides a big playground for music lovers.

The All Access service represents Google's attempt to grab a bigger piece of the digital music market as more people stream songs over mobile phones. Such services are also meant to further wed smartphone users to Google's Android operating system, where the search leader makes money from advertising and transactions on its digital content store, Google Play.

For a monthly fee, All Access lets you listen to as much music as you want over an Internet connection. You can also download songs onto mobile devices for smooth playback later when you don't have cell phone or Wi-Fi access.

It's worth a try for the discounted monthly rate of $8 if you sign up by the end of June. Those who sign up later will pay $10 a month, the same amount charged by the main competitors, Spotify and Rhapsody. Either way, you get the first month free and can cancel at any time. All Access works on the free Google Play Music app for Android devices and over Web browsers on computers -- but not on the iPhone. (Spotify and Rhapsody work on both Android and the iPhone).

Best Internet Companies To Invest In Right Now: Google Inc.(GOOG)

Google Inc. maintains an index of Web sites and other online content for users, advertisers, and Google network members and other content providers. It offers AdWords, an auction-based advertising program; AdSense program, which enables Web sites that are part of the Google Network to deliver ads from its AdWords advertisers; Google Display, a display advertising network that comprises the videos, text, images, and other interactive ads; DoubleClick Ad Exchange, a real-time auction marketplace for the trading of display ad space; and YouTube that provides video, interactive, and other ad formats for advertisers. The company also provides Google Mobile that optimizes Google?s applications for mobile devices in browser and downloadable form; and enables advertisers to run search ad campaigns on mobile devices, as well as Google Local that provides local information on the Web; and Google Boost for small businesses to participate in the ads auction. In addition, it offers And roid, an open source mobile software platform; Google Chrome OS, an open source operating system; Google Chrome, a Web browser; Google TV, a platform for the consumers to use the television and the Internet on a single screen; and Google Books platform to discover, search, and consume content from printed books online. Further, the company provides Google Apps, a cloud computing suite of message and collaboration tools, which includes Gmail, Google Docs, Google Calendar, and Google Sites; Google Search Appliance that offers real-time search of business and intranet applications, and public Web sites; Google Site Search, a custom search engine; Google Commerce Search for online retail enterprises; Google Checkout to make online shopping and payments streamlined and secure; Google Maps Application Programming Interface; and Google Earth Enterprise, a firewall software solution for imagery and data visualization. Google Inc. was founded in 1998 and is headquartered in Mountain View, California.

Advisors' Opinion:
  • [By Chris Neiger]

    A new hope
    Right now,�Google's� (NASDAQ: GOOG  ) �Android and Apple's iOS take a whopping 85% of the global smartphone mobile OS market share. BlackBerry (NASDAQ: BBRY  ) and Microsoft (NASDAQ: MSFT  ) currently spar over the third place position, but according to the latest calculations from Gartner, Microsoft's platform is expected to far outpace the Canadian company's OS by 2017 --�and leave BlackBerry in a realm of potential mobile insignificance.

  • [By Sean Williams]

    Barnes & Noble found a temporary solution to this problem with its digital e-readers, but even they haven't sold as well as the company would have anticipated. The problem is that a slew of new competitors -- including Apple (NASDAQ: AAPL  ) with its Internet-capable iPad, Google� (NASDAQ: GOOG  ) �with its Nexus tablet, and Amazon with the Kindle Fire -- have hit the e-reader market and are significantly more hip than B&N and have a lot more cash to throw at marketing, as well as research and development. Seriously, what did you think was going to happen with Apple, Google, and Amazon boasting $137 billion, $50 billion, and $8 billion in cash compared to B&N with its paltry $160 million in cash as of last quarter? Not to mention that Apple, Google, and Amazon are predominantly digital companies while B&N is almost entirely brick-and-mortar-based.

  • [By Chris Hill]

    Notes from the most recent meeting of the Federal Reserve were released early. The�Fed is thinking about ending its quantitative-easing policy this summer. The meeting was held before the release of weaker-than-expected jobs numbers. In this installment of MarketFoolery, our analysts discuss the investing�implications�for Apple (NASDAQ: AAPL  ) , Google (NASDAQ: GOOG  ) , and Amazon.com (NASDAQ: AMZN  ) .

  • [By Reuters]

    David Paul Morris/Bloomberg via Getty ImagesMicrosoft has named Satya Nadella, executive vice president of its cloud and enterprise group, as its new CEO. SEATTLE -- Microsoft named 22-year company veteran Satya Nadella as its next chief executive officer Tuesday and said co-founder Bill Gates would step down as chairman and advise the new CEO on technology, marking an epochal change of control at the company that drove the PC revolution. Nadella, a 46-year old born in India who led the creation of Microsoft's (MSFT) Internet-based, or "cloud" computing services, is only Microsoft's third CEO in 39 years, taking over from Steve Ballmer, who inherited the job from Gates in 2000. The move ends a five-month search process at the Redmond, Wash.-based company, triggered by the August announcement of Ballmer's decision to retire. That was longer than many investors had expected. "It's a relief this process is over," said Daniel Ives, an analyst at FBR Capital Markets. "Many investors view it as the 'safe pick' as Mr. Nadella is a born-and-bred Redmond insider. But the uphill battle continues for Microsoft on its path to growth." Microsoft's new chairman John Thompson, who led the search for a CEO, said the process went as planned. "We aimed to complete the process within four to six months, and we met that goal," Thompson said in a video statement on Microsoft's website. "After reviewing all of the candidates, Satya was our first and unanimous choice." Gates said Nadella's experience in cloud computing made him the right man to lead Microsoft, as the company struggles to find its feet in the new arena of mobile computing. "Satya's got the right background to lead the company during this era," said Gates. "There's a challenge in mobile computing. There's an opportunity in the cloud." Thompson didn't mention other candidates, although sources close to the company have told Reuters that at one time Ford Motor (F) CEO Alan Mulally was a leading contender. PC

Best Internet Companies To Invest In Right Now: Symantec Corporation(SYMC)

Symantec Corporation provides security, storage, and systems management solutions internationally. The company?s Consumer segment delivers Internet security, PC tune-up, and online backup solutions and services to individual users and home offices. Its Security and Compliance segment provides solutions for endpoint security and management, compliance, messaging management, data loss prevention, encryption, and authentication services to large, medium, and small-sized businesses, as well as offers solutions through its software-as-a-service (SaaS) security offerings. This segment?s products enable customers to secure, provision, and remotely manage their laptops, PCs, mobile devices, and servers. The company?s Storage and Server Management segment provides storage and server management, backup, archiving, and data protection solutions across heterogeneous storage and server platforms, as well as solutions delivered through its SaaS offerings to large, medium, and small-s ized businesses. Symantec?s Services segment offers implementation services and solutions, including consulting, business critical services, education, and managed security services. The company also provides various enterprise support offerings, such as annual maintenance support contracts, including content, upgrades, and technical support. It sells its products through its eCommerce platform, as well as through distributors, direct marketers, Internet-based resellers, system builders, ISPs, and retail locations worldwide. Symantec markets and sells its products through distributors, retailers, direct marketers, Internet-based resellers, original equipment manufacturers, system builders, and Internet service providers; and its e-commerce channels, as well as direct sales force, value-added and large account resellers, and system integrators. The company was founded in 1982 and is headquartered in Mountain View, California.

Advisors' Opinion:
  • [By Wallace Witkowski]

    Symantec Corp. (SYMC) �shares dropped 7% to $19.44 on heavy volume, after a brief halted at the closing bell, as the security software company fired Chief Executive Steve Bennett.

  • [By Vanina Egea] and earnings growth (which came in better than expected on the last reported quarter), profit margins and other profitability ratios.

    Additionally, I will evaluate which institutional investors bought the stock in the recent quarters (institutional backup can tell a lot about a stock), and the initiatives that the company is putting in motion in order to ameliorate its sales and margins.

    Earnings

    The first step is analyzing Symantec Corp�� earnings growth. I am looking for companies that are able to expand both their quarterly and annual earnings by more than 15% a year. Last quarter the company generated 13% quarterly EPS growth when compared to the same quarter last year. Thus, I am not encouraged by SYMC�� numbers. Past growth winners (Apple, Baidu, etc.) generated consistent quarterly EPS growth above 15% and I am certainly looking for that level before investing.

    In addition, SYMC generated three-year average annual EPS growth of 10%. This is an important metric to follow in growth stocks because it highlights how well the stock grew in the past years. I like to invest in companies that are growing consistently.

    Revenue

    Let's take a look at SYMCéŗ“s revenue growth. This is a key metric that needs to be analyzed before investing in a company, as it is one of the scarce figures that cannot be modified through accounting tricks and similar dodges.

    The company reported a 5% quarterly revenue drop year over year. On the contrary, I look for companies that generate more than 15% in quarterly growth.

    When betting on a company, an investor wants to see sales grow or improve over time ���nd not just in the last reported quarter. Looking at the company�� financials in comparison to previous years will give participants a much better idea of how well a company is doing. Symantec Corp generated a three-year average annual sales growth rate of 4%.

    A New Strategic Plan

    Accepting the problems in its

Top Sliver Stocks To Buy For 2014: Amazon.com Inc.(AMZN)

Amazon.com, Inc. operates as an online retailer in North America and internationally. It operates retail Web sites, including amazon.com and amazon.ca. The company serves consumers through its retail Web sites and focuses on selection, price, and convenience. It also offers programs that enable sellers to sell their products on its Web sites, and their own branded Web sites. In addition, the company serves developer customers through Amazon Web Services, which provides access to technology infrastructure that developers can use to enable virtually various type of business. Further, it manufactures and sells the Kindle e-reader. Additionally, the company provides fulfillment; miscellaneous marketing and promotional agreements, such as online advertising; and co-branded credit cards. Amazon.com, Inc. was founded in 1994 and is headquartered in Seattle, Washington.

Advisors' Opinion:
  • [By Adam Levine-Weinberg]

    While Target has a strong brand and a potentially significant international expansion opportunity, it faces pressure from two directions. Competition from online merchants like Amazon.com (NASDAQ: AMZN  ) will lead to pricing pressure in electronics and other hard goods, while other discounters like TJX (NYSE: TJX  ) are beating Target at its own "cheap chic" game. At this point, I believe that Target stock is due for a correction, because the stock price has run well ahead of the company's fundamentals.

  • [By Tim Beyers]

    All Hemlock Grove has to do is get close to these numbers with hardcore horror fans. Presuming the buzz that follows is enthusiastic enough to keep viewers engaged, Netflix could have a niche hit on its hands in the same way that True Blood has grown into a win for HBO. At the very least, you can bet Amazon.com (NASDAQ: AMZN  ) is paying close attention as it prepares to launch its own slate of self-produced programs.

Best Internet Companies To Invest In Right Now: IAC/InterActiveCorp (IACI)

IAC/InterActiveCorp engages in the Internet business in the United States and internationally. The company�s Search segment develops, markets, and distributes various downloadable toolbars; provides search, reference, and content services through its destination search and other Websites, including Ask.com and Dictionary.com; and aggregates and integrates local advertising and content for distribution to publishers on Web and mobile platforms, as well as markets and distributes mobile applications through which it provides search and additional services. Its Match segment offers subscription-based and advertiser-supported online personals services through its Websites comprising Match.com, Chemistry.com, OurTime.com, BlackPeopleMeet.com, and OkCupid.com, as well as through mobile applications and Meetic-branded Websites. The company�s ServiceMagic segment offers Market Match service that matches consumers with service professionals; Exact Match service, which enables con sumers to review service professional profiles and select the service professional that meets their specific needs; and 1800Contractor.com, an online directory of service professionals. This segment also offers Website design and hosting services. Its Media and Other segment operates CollegeHumor.com, an online entertainment Website that targets young males; Vimeo, a Website on which users can upload, share, and view video; and Pronto.com, a comparison search engine. This segment also engages in the creation of video content for various distribution platforms; and operates as an Internet retailer of footwear and related apparel and accessories, as well as focuses on multimedia business. The company was formerly known as InterActiveCorp and changed its name to IAC/InterActiveCorp in July 2004. IAC/InterActiveCorp was founded in 1986 and is headquartered in New York, New York.

Advisors' Opinion:
  • [By Eric Volkman]

    AP/Jim Mone Is Bitcoin a slam-dunk as the currency of the future? The Sacramento Kings seem to think so. The NBA team recently became the first pro sports franchise to accept Bitcoin as a form of payment. Basketball fans will be able not only to purchase tickets and merchandise online with the digital cryptocurrency, but also to use it to buy souvenirs at the arena come game time. The team is the latest in a growing number of commercial entities finding a slot in their virtual cash registers for Bitcoin. Little by little, momentum is building for a widespread acceptance of the upstart currency. Overstocking The Kings' drive towards the Bitcoin basket comes a week after the big online retailer Overstock.com (OSTK) announced it would start accepting payments in the currency. The move was an instant hit -- the first day the company had the nifty Bitcoin button as an option in its shopping cart, its customers used it to make more than 800 transactions for total sales of around $130,000. Overstock.com was by no means the first online marketplace to accept the currency. Numerous web retailers have been doing so for some time. It's a natural fit, %VIRTUAL-article-sponsoredlinks in a way, since Bitcoin exists solely in the digital realm. Customers booking flights on discount travel operator CheapAir.com, for example, can use Bitcoin to buy their tickets, as can love seekers on dating site OkCupid, owned by IAC/InteractiveCorp (IACI). These digital players are going to have plenty of company. Earlier this month, online games purveyor Zynga (ZNGA) started to dip its toes in the water, announcing that it was testing Bitcoin payments for some of its titles in conjunction with specialist transaction facilitator BitPay. But if Overstock.com didn't get there first, it's still the largest and most prominent e-retailer to take the Bitcoin plunge thus far. This is a big win for the currency and its advocates, and Overstock.com will surely be followed by more well-known comp

  • [By Chris Isidore]

    Newsweek, the news magazine whose print version was abandoned late last year, was sold in August by IAC (IACI) to another all-digital news company, IBT Media.

  • [By Monica Gerson]

    IAC/InterActiveCorp (NASDAQ: IACI) shares fell 14.51% to $49.50 in the pre-market trading after the company reported downbeat Q3 revenue.

    Posted-In: PreMarket LosersNews Movers & Shakers Pre-Market Outlook Markets

Best Internet Companies To Invest In Right Now: Yahoo! Inc.(YHOO)

Yahoo! Inc., together with its subsidiaries, operates as a digital media company that delivers personalized digital content and experiences through various devices worldwide. It offers online properties and services to users; and a range of marketing services to businesses. The company?s communications and communities offerings include Yahoo! Mail, Yahoo! Messenger, Yahoo! Groups, Yahoo! Answers, Flickr, and Connected TV, which provide a range of communication and social services to users and small businesses enabling users to organize into groups and share knowledge, common interests, and photos. Its search products comprise Yahoo! Search and Yahoo! Local, available free to users to navigate the Internet and discover content. The company?s marketplaces offerings and services include Yahoo! Shopping, Yahoo! Travel, Yahoo! Real Estate, Yahoo! Autos, and Yahoo! Small Business, which allow users to research specific topics, products, services, or areas of interest by review ing and exchanging information, obtaining contact details, or considering offers from providers of goods, services, or parties with similar interests. Its media offerings comprise Yahoo! Homepage, Yahoo! News, Yahoo! Sports, Yahoo! Finance, My Yahoo!, Yahoo! Toolbar, Yahoo! Entertainment & Lifestyles, Yahoo! Contributor Network, and Yahoo! Pulse, which are designed to engage users with online content and services on the Web. The company also offers marketing services, such as display and search advertising, listing-based services, and commerce-based transactions to advertisers. In addition, it provides software and platform offerings for third-party developers, advertisers, and publishers, such as Yahoo! Developer Network, Yahoo! Open Strategy, Yahoo! Application Platform, Yahoo! Updates, Yahoo! Query Language, and Yahoo! Search BOSS. The company has strategic alliances with Nokia and ABC News, Inc. Yahoo! Inc. was founded in 1994 and is headquartered in Sunnyvale, Californi a.

Advisors' Opinion:
  • [By Chris Hill]

    Yahoo! (NASDAQ: YHOO  ) made it official this week when it announced that it had acquired Tumblr for $1.1 billion. Yahoo CEO Marissa Mayer promised "not to screw it up." What will the acquisition mean for Yahoo!? What will the deal mean for Tumblr? And what will the deal mean for investors? In this installment of Motley Fool Money, our analysts tackle those questions.

  • [By James Brumley]

    If the idea of splitting up eBay and PayPal rings a bell, there are a couple of possible reasons. One is the fact that eBay has considered doing so before. Several times, in fact. It came up in 2009 when both Skype and PayPal were on the chopping block, again in early 2012 when then-PayPal president Scott Thompson left his post for a position at the helm of Yahoo (YHOO), and it’s an idea that’s been floated to lesser degrees several times since eBay acquired PayPal back in 2002. Each time the issue has been pressed, eBay decided to hold into the payment-making division.

Best Internet Companies To Invest In Right Now: eBay Inc.(EBAY)

eBay Inc. provides online platforms, services, and tools to help individuals and merchants in online and mobile commerce and payments in the United States and internationally. Its Marketplaces segment operates ecommerce platform eBay.com; vertical shopping sites, such as StubHub, Fashion, Motors, and Half.com; and classifieds Websites, including Den Bl�Avis, BilBasen, Gumtree, Kijiji, LoQUo, Marktplaats.nl, mobile.de, Alamaula, Rent.com, eBay Anuncios, eBay Kleinanzeigen, and eBay Annunci, as well as provides advertising services. The company?s Payments segment offers payment and settlement services for consumers and merchants on and off eBay Websites and other merchant Websites. This segment operates PayPal, which enables individuals and businesses to send and receive payments online and through mobile devices; Bill Me Later that enables the United States merchants to offer, the United States consumers to obtain, credit at the point of sale for ecommerce and mobile tra nsactions; Zong, which allows users with mobile phones to purchase digital goods and have the transactions charged to their phone bill; and BillSAFE that enables customers pay for purchases upon receipt of an invoice. Its GSI segment offers an ecommerce services suite for enterprise clients that operate in general merchandise categories, including apparel, sporting goods, toys and baby, health and beauty, and home; and marketing services comprising full-service digital agency, enterprise email marketing, mobile advertising, affiliate marketing, advertisement retargeting, and in-depth analytics services. The company also offers X.commerce platform that provides software developers access to the company?s applications programming interfaces to develop functionality for various merchants; and Magento Connect, which allows developers to market and sell add-on functionality and solutions to merchants that use a Magento storefront. eBay Inc. was founded in 1995 and is headquarter ed in San Jose, California.

Advisors' Opinion:
  • [By WALLSTCHEATSHEET]

    Ebay is an established company that has made a name for itself pioneering internet commerce. Reported in Sunday’s New York Times magazine story “Buy It Now,” eBay is no longer the online auction house of old. The stock has moved higher in recent years and is currently surging higher. Over the last four quarters, earnings have been mixed while revenues have been rising which has left investors pleased. Relative to its peers and sector, eBay has been a weak year-to-date performer. Look for Ebay to OUTPERFORM.

  • [By Kevin Chen]

    After launching iOS developer tools in March, eBay's (NASDAQ: EBAY  ) PayPal has unveiled more tools to help Android developers accept both PayPal and credit card payments on mobile.

Customers not scared off by GM recall

chevy cobalt lot

Consumers haven't been scared away from the GM cars involved in the company's recall, such as the now out of production Chevrolet Cobalt.

NEW YORK (CNNMoney) Recent headlines about recalls haven't been great for General Motors. But there has been little impact at used and new car lots.

Despite an ignition switch problem tied to 12 deaths, the out-of-production models recalled by GM continue to attract customer interest, according to sales and price trackers Kelley Blue Book and Cars.com.

The services say prices for most of the vehicles involved -- Chevrolet Cobalt and HHR, Pontiac's G5 and Solstice, and Saturn's Sky and Ion -- are up slightly or unchanged. About 1.6 million of the cars, from model years 2003 through 2007, have been recalled by the automaker.

One of the reasons that pricing has held up is that the number of recalled models available for sale has declined due to normal seasonal factors. There are traditionally fewer used cars on sale in March compared to earlier in the year.

Another reason pricing has remained firm is that the cars are not very expensive to begin with. On average, they have about 100,000 miles on them, so they usually cost between $4,000 to $8,000, said Kelley analyst Alec Gutierrez.

"People shopping these cars are shopping for bargains," he said. "These prices tend to move pretty broadly, and pretty slowly."

The price figures were collected before the latest GM recall announced Monday, affecting 1.2 million crossover SUVs, 300,000 full-size commercial vans and 65,000 Cadillacs. Unlike the ignition recall, there were no deaths or injuries associated with the latest recalls.

It was too soon to judge any impact of the latest recall on those sales prices.

GM's new car sales are also unlikely to take a big hit, according to experts. The company's current vehicles have received much better marks on quality than the poor quality cars that helped take the automaker into bankruptcy in 2009. . In fact, GM was named highest quality automaker by J.D. Power in 2013 for the first time in its history.

"My gut says GM has not lost the goodwill that it's built up in the last few years," said Gutierrez. "Provided that GM is able to get this fix out there, and we don't get a new story about severity getting worse, this will pass for GM."

Past history with high-profile recalls, such as the instances of unintended acceleration with Toyota in 2010, and the Ford Explorer/! Firestone recall in 2000, also suggest sales of all GM vehicles won't take a hit.

"History says customer's reactions to recalls are never as negative as one would think," said Jesse Toprak, chief analyst with Cars.com.

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Tuesday, March 18, 2014

401k Rollovers: FAQs from Readers

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We continually encourage interaction with our readers. Among the most common sources of consternation expressed by retirement savers is the 401k "rollover."

Below is a compendium of frequently asked questions regarding this important retirement investing topic, along with our answers.

What's a 401k rollover?

This is the process of transferring your 401k savings into another plan, such as an Individual Retirement Account (IRA). Rolling over to an IRA is the most common choice for employees who leave a company and want to maintain their savings in a tax-deferred account, because it’s the most widely available option.

Do I have other rollover choices, besides an IRA?

You might be able to transfer your 401k money into your new employer's 401k plan, where it can continue to enjoy tax-advantaged status and grow over the years. However, your employer's 401k plan may not allow you to do so; check with your HR administrator to see how much leeway you have.

If I leave my job, should I simply cash out of my 401k?

No! Resist the temptation. According to a study by Hewitt Associates, roughly half of US workers cash out their 401k when they leave one job for another. That's almost never a good idea.

In addition to paying income tax on the money, you'll get socked with a 10 percent early withdrawal penalty if you're under age 59 ½. And then there's the "opportunity cost" of not reinvesting the money.

Can I choose the same types of investments with an IRA that I once had in my 401k?

Typically, yes. In most cases, the investment choices available in IRAs mirror the stock mutual funds, bonds, etc. that are available in 401k plans.

What if I'm a non-spouse beneficiary and I inherit a 401k plan?

Non-spouse beneficiaries can roll over all or part of an inherited employer-sponsored retirement plan into an IRA.

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Should I follow the same investment strategy in an IRA that I once did in my 401k?

Yes. Keep in mind, many investors who roll their 401k into an IRA short-change themselves by being more timid than they were in their 401k.

There's no investment that beats the returns of stocks over the long term—and an IRA represents long-term money. So, why shoot yourself in the foot by playing it too safe?

According to IRS statistics, about three-fourths of self-directed IRA monies are in money-market funds, government bonds or other fixed-income securities. That defies common sense.

A common "risk-averse" mistake is to put rolled-over IRA money into tax-exempt investments, such as annuities, municipal bonds and tax-exempt money-market funds. These investments already are tax-exempt, so there's no tax advantage to putting them in a tax-favored IRA.

And there's a double whammy: The tax exempt income is bestowed in return for a lower yield, so you do yourself a disservice on the potential returns as well.

IRAs are still worth it for high-income savers. Deductible or not, any money you deposit accumulates free of taxes as long as it stays there. This means it can grow and compound without having a big chunk sliced off for current taxes, as would be the case with an ordinary investment. The result is that your pool of money grows faster. And tax-deferred compounding gets sweeter the longer it lasts.

But to make an IRA really worth it, you've got to stay with stocks. If you're an older person nearing retirement and all you're going to do is invest in cash or fixed-income investments, you're far better off in an annuity. The bottom line: Money that doesn't go into stocks shouldn't go into your IRA.

What are the withdrawal rules for IRAs?

Of course, you'll have to ! pay taxes! on any IRA withdrawals if made before age 59 ½. The IRS imposes a 10 percent early withdrawal penalty on the taxable portion of your early IRA withdrawal. For tax-deferred IRAs, this is the entire amount. For Roth IRAs, the 10 percent penalty applies only to the early withdrawal of earnings. This is a one-time penalty paid in the year of the early distribution.

What happens if I have a 401k loan at work but then leave my job without paying back the loan?

First of all, we strongly advise against taking loans against your 401k plan. But if circumstances force you to do so and you leave with a balance remaining, check with your HR department as to whether you can continue making payments after you depart the company, or whether you must pay off the balance of your loan before you can roll over the remainder.

Can I first take the money out of my 401k plan and pick a course of action later?

Technically, yes. But that's a bad idea. Weigh your options and reach a decision before you take out the money. If you take money out of your 401k plan in the form of a check payable directly to you, 20 percent of the original balance will be withheld for federal income taxes even before you receive the check.

You can still rollover the money into an IRA, or your new company 401k plan if allowed, but you must do so within 60 days.

If you don’t deposit the withheld amount to the new IRA or 401k plan, it will be tacked onto your ordinary, taxable income.

Will I incur taxes on my 401k rollover?

Typically you will not owe taxes on your rollover if you roll over your money directly from your company plan into an IRA or 401k.

Am I required to report a rollover on my tax return?

Yes. You must fill out IRS Form 1099R, reporting that you took a distribution from your former employer’s plan, and IRS Form 5498, reporting that you made a rollover contribution to your IRA.

John Persinos is editorial director of Personal Finance and its parent ! website, ! Investing Daily.

Stock Talk

We encourage you to engage with our analysts and your fellow subscribers on our website. To ask a question or post a comment related to a particular article, please do so in the Stock Talk field at the bottom of that article.

Or to ask a general question, please go to the main Stock Talk page found under the Resources menu for each publication.

Monday, March 17, 2014

Earnings Are Snowed In

Each Monday, MoneyBeat publishes a short column in the WSJ print edition highlighting a statistic getting traction in the markets. This week's "Big Number" is -195, the number of S&P 500 companies that mentioned the word “weather” on their latest earnings calls.

Economists aren’t the only ones pointing to the brutal winter for poor data. Companies also are playing the blame game, and it has taken a toll on first-quarter profit estimates.

S&P 500 companies mentioned the word “weather” at least once on 195 earnings calls from Jan. 1 through March 12, according to a review of conference-call transcripts published by FactSet. That is an 81% increase from 108 mentions a year ago.

For instance, retailer Urban Outfitters sa(URBN)id 312 stores were closed for either a full or partial day in January due to wintry conditions, up from 13 closings a year ago. “Weather during the month of January in the Midwest and Eastern United States was so extreme that it warrants a discussion,” Urban Outfitters Chief Executive Officer Richard Hayne said last week on an earnings call.

Gap Inc.(GPS), McDonald's Corp.(MCD) and General Motors Co.(GM) were among other companies that cited the weather as a factor in their results and projections. Companies in the energy, consumer-discretionary and industrial sectors mentioned the weather the most on their calls, FactSet data show.

Heavy snow and subzero wind chills have prompted Wall Street analysts to ratchet down their expectations for the first three months of the year.

Analysts polled by FactSet expect first-quarter profit growth to increase 0.3% from a year ago. That is down from the 4.4% analysts projected at the end of 2013.

Poor weather has hit economic reports as well. Disappointing jobs, manufacturing and retail-sales figures have been blamed on the weather.

Earlier this month the Federal Reserve’s “beige book,” which assesses the economy in the Fed’s 12 districts, highlighted the weather’s impact. In that report, the word “weather” appeared 119 times, up from 18 references a year ago.

Sunday, March 16, 2014

Does This Make Apple the Most Vulnerable Tech Company?

The mighty Apple (AAPL) has greatly reaped benefits from its epic innovation –iPhone. Smartphones have been around us in various forms since early 2000. But, right from its introduction in 2007, till the present day Apple has made millions by revolutionizing the smartphone experience, the latest and the greatest contribution being made by the iPhone 5S.

What iPhone means to Apple Its known to all that iPhone is Apple's flagship product that contributes massively to the company's top-line. The following chart summarizes the device's contribution from 2007 till 2013.

(Source: Statista.com)

While, at product inception in 2007, the iPhone accounted for only a meager 0.5% of Apple's total revenue, today it generates 53.4% of the total revenue, and going forward its contribution to the total revenue of the company is expected to surge further. According to Pacific Crest analyst Andy Hargreaves, iPhone is going to account for as much as 68% of the company's gross profit in yet to complete fiscal year 2014.

(Source: Statista.com)

All this clearly signifies how important the gadget is for the company. But, is that all that it signifies? Well, no. It also signifies how vulnerable the mighty Apple is because of its absolute dependence on this one single gadget.

The changing market situation Apple is dependent on the iPhone. So what? Isn't this the way usually companies function; revenue and profits being driven by its flagship offering? The answer is an obvious Yes. But, this doesn't diminish the fact that such dependence calls for a huge amount of risk also. The problem for Apple is not just its dependence, but that coupled with the changing dynamics of the smartphone space.

Several industry experts and analysts are concerned about the diminishing growth momentum of the spartphone market and its impact on the players of the space, particularly the big ones such as Apple. Though the market was valued at a whooping $338 billion last year, it is growing at a slower rate and is being characterized by gradual price drop which makes making money all the more difficult. According to a recent study conducted by IDC, while worldwide smartphone sales increased by 39% over 2012, the expected market growth for this year is at only 19%, 8% for 2017 and just 6% for 2018.

Another huge concern for Apple is that the developed markets are more or less saturated and whatever growth is taking place is because of the relatively under-developed nations. The consumers in these markets are highly price-sensitive and the cost to own an iPhone stands as a barrier. The company has already launched the iPhone 5C keeping the requirements of these markets, still the price is too high in comparison to other Google (GOOG) Android powered products or Microsoft (MSFT) Windows Phone handsets.

A point of relief In all this the only point of relief for Apple is the expectation of replacement sales. A study conducted by Pacific Crest Securities reveal that Apple can expect 69% of iPhone sales to be accounted by repeat buyers looking at replacing their old iPhones with the latest one. The figure further expands in 2015 at 80%.

(Source: Statista.com)

Departing thoughts Though there are concerns about Apple's dependence on the iPhone, it can be expected that the company might just be able to reap the benefits from the gadget for another good number of years thanks to the ongoing research and development activities. The company is working to bring in best of the class features in its devices, such as the iOS 8 update, the health focused apps and the much awaited iWatch. All these additions are very likely to provide a boost to the iPhone sales and keep the company's top-line safe.

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Saturday, March 15, 2014

GIS Fills the Bowl: 8 Dividend Stocks Increasing Payouts

Google Plus Logo RSS Logo Marc Bastow Popular Posts: Qualcomm Chips In: 7 Dividend Stocks Raising PayoutsGIS Fills the Bowl: 8 Dividend Stocks Increasing Payouts Recent Posts: GIS Fills the Bowl: 8 Dividend Stocks Increasing Payouts Qualcomm Chips In: 7 Dividend Stocks Raising Payouts Home Depot Delivers: 17 Dividend Stocks Raising Payouts View All Posts

Earnings season is largely finished, now, which means the number of dividend stocks increasing payouts is rapidly dwindling.

IncreasingDividends GIS Fills the Bowl: 8 Dividend Stocks Increasing PayoutsThe week’s biggest name was General Mills (GIS), which announced a nice increase for shareholders and kept a streak of 115 years of uninterrupted dividends going.

Here's a look at the new dividend payout for General Mills as well as the improvements from other dividend stocks this week.

(Note: All dividend yields are as of March 14.)

The biggest increase among our dividend stocks this week came from title and specialty insurance management company First American Financial (FAF), which raised its quarterly dividend 100% to 24 cents per share, payable June 16 to shareholders of record as of June 9.
FAF Dividend Yield: 3.47%

Full-service investment banking, asset management and corporate credit management firm JMP Group (JMP) raised its quarterly dividend 13% to 4.5 cents per share, payable April 11 to shareholders of record as of March 28.
JMP Dividend Yield: 2.41%

Branded consumer foods manufacturer and marketer General Mills (GIS) raised its quarterly dividend 8% to 41 cents per share, payable May 1 to shareholders of record as of April 10.
GIS Dividend Yield: 3.27%

Hotel properties real estate investment trust Pebblebrook Hotel Trust (PEB) raised its quarterly dividend 44% to 23 cents per share, payable April 15 to shareholders of record as of March 31.
PEB Dividend Yield: 2.58%

Free-standing retail outlet center real estate investment trust Realty Income (O) raised its monthly dividend 0.17% to 18.25 cents per share, payable April 15 to shareholders of record as of April 1. The increase marks the 75th rise in Realty Income’s dividend. At more than 5%, O is the highest-yielding stock of this week’s list of dividend stocks.
O Dividend Yield: 5.16%

Ski lodging and operations holding company Vail Resorts (MTN) raised its quarterly dividend 100% to 41.5 cents per share, payable April 16 to shareholders of record as of April 1. That increase ties FAF for the biggest increase on this week’s list of dividend stocks.
MTN Dividend Yield: 2.37%

Multi-channel specialty retailer Williams-Sonoma (WSM) raised its dividend 6% to 33 cents per share, payable May 28 to shareholders of record as of April 25.
WSM Dividend Yield: 2.05%

Los-Angeles, California-based bank holding company Wilshire Bancorp (WIBC) raised its quarterly dividend 67% to 5 cents per share, payable April 15 to shareholders of record as of March 31.
WIBC Dividend Yield: 1.77%

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Marc Bastow is an Assistant Editor at InvestorPlace.com. As of this writing he did not hold a position in any of the aforementioned securities. For more dividend stocks increasing payouts, see previous weeks' lists of Companies Increasing Dividends.