Best Mortgage Insurance 2013: June 2014

Saturday, June 28, 2014

4 Big Stocks on Traders' Radars

BALTIMORE (Stockpickr) -- Put down the 10-K filings and the stock screeners. It's time to take a break from the traditional methods of generating investment ideas. Instead, let the crowd do it for you.

>>5 Dividend Stocks That Want to Pay You More in 2014

From hedge funds to individual investors, scores of market participants are turning to social media to figure out which stocks are worth watching. It's a concept that's known as "crowdsourcing," and it uses the masses to identify emerging trends in the market.

Crowdsourcing has long been a popular tool for the advertising industry, but it also makes a lot of sense as an investment tool. After all, the market is completely driven by the supply and demand, so it can be valuable to see what names are trending among the crowd.

While some fund managers are already trying to leverage social media resources like Twitter to find algorithmic trading opportunities, for most investors, crowdsourcing works best as a starting point for investors who want a starting point in their analysis. Today, we'll leverage the power of the crowd to take a look at some of the most active stocks on the market today.

>>5 Stocks Under $10 Setting Up to Soar

These "most active" names are the most heavily-traded names on the market -- and often, uber-active names have some sort of a technical or fundamental catalyst driving investors' attention on shares. And when there's a big catalyst, there's often a trading opportunity.

Without further ado, here's a look at today's stocks.

Dollar General

Nearest Resistance: $63 
Nearest Support: $57 
Catalyst: CEO Retirement

Shares of discount retailer Dollar General (DG) are down more than 7% this afternoon on big volume, following news that CEO Rick Dreiling will be retiring next year. That announcement comes just weeks after solid first-quarter numbers gapped the $17 billion retailer up to test long-term resistance at $63.

Today's selloff is a good indication that buyers should use caution in DG. While shares broke their downtrend at the start of the month, they've failed to catch a bid above that $63 level two times now in 2014; both times have come with dramatic selling from that price. That means that there's a formidable price ceiling at $63 in shares of Dollar General this summer.

Nike

Nearest Resistance: $79 
Nearest Support: $77 
Catalyst: Q4 Earnings

Sports apparel giant Nike (NKE) is up 1.6% this afternoon on big volume, following the firm's fourth-quarter earnings release. Nike earned profits of 78 cents for the quarter, besting analysts' 75-cent best guess. It also posted better-than-expected sales in every geographic reporting unit except for emerging markets, helping to settle some fears that Nike's target markets are oversaturated.

From a technical standpoint, Nike's modest price action is triggering a modest buy signal thanks to a breakout above prior resistance (now support) at $77. A stronger price ceiling at $79 is within grabbing distance now, but it makes sense to wait for shares to catch a bid above that level before jumping in.

MGM Resorts International

Nearest Resistance: $27 
Nearest Support: $24 
Catalyst: Las Vegas Gambling Stats

MGM Resorts International (MGM) started the session higher on big volume following statistics from the Nevada Gaming Control Board that showed a 17.3% rise in gambling revenues for the Las Vegas strip in May. The news is welcome given the fact that Las Vegas properties have struggled versus overseas resorts in popular destinations like Macau -- but MGM isn't holding its gains this afternoon.

Zooming out further on MGM's chart, however, yields some interesting results. While shares started off 2014 with a bearish technical picture, that selling pressure is giving way to a more constructive setup as we head into July. A move through resistance at $27 is the breakout signal to buy MGM.

DuPont

Nearest Resistance: $67 
Nearest Support: $64 
Catalyst: Earnings Outlook Cut

Chemical giant DuPont (DD) is down 4.7% and falling this afternoon, after a cut to the firm's second-quarter earnings outlook after the bell yesterday. While analysts were expecting next quarter's profits to fall around $1.46, DuPont's new guidance was for earnings "moderately below $1.28." That misstep is triggering a technical sell signal in DuPont today.

DuPont has spent the last few months trending its way higher in an uptrending channel, but today's big gap lower ended it. With the uptrend broken today, lower levels look likely from here in DD. Support at $64 looks pretty weak at the moment. A break below that level would put $59 support in sellers' crosshairs.

To see these stocks in action, check out the at Most-Active Stocks portfolio on Stockpickr.  

-- Written by Jonas Elmerraji in Baltimore.

Hennessy Japan Fund Comments on Ryohin Keikaku Co., Ltd.

Among the strongest performing stocks in the Fund during the period were … and Ryohin Keikaku Co., Ltd. (TSE:7453), the operator of the MUJI brand retail chain store. Finally, shares of Ryohin Keikaku Co., Ltd. surged 18% due to the solid earnings announcement for its fiscal year ended February 28, 2014, and the upbeat guidance for the new fiscal year. The Fund continues to hold all of these positions.

From Hennessy Japan Fund's Semi-Annual Report April 30, 2014.

Also check out: Hennessy Japan Fund Undervalued Stocks Hennessy Japan Fund Top Growth Companies Hennessy Japan Fund High Yield stocks, and Stocks that Hennessy Japan Fund keeps buying

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Tuesday, June 24, 2014

Questions stalking Barra: Could she be jailed?

General Motors CEO Mary Barra, on the job only since January, already faces what could be her toughest challenge as she faces House and Senate subcommittees this week that are probing GM's handling of a recall of 2.53 million small cars with faulty ignition switches that GM links to 12 deaths in the U.S., one in Canada.

The switch problem first was noted by GM in 2001, and by 2006 a design change had been made, but the automaker didn't recall any cars then.

STORY: Yet another GM recall

REMARKS: NHTSA chief says no GM defect trend evident at first

TESTIMONY: Barra can't explain recall lag

Key questions likely to get aired in pointed fashion as Barra is questioned by members of the House and Senate committees:

Q: How could it happen?

A: Barra has been candid saying she can't explain it, and has hired a legal heavyweight to conduct an aggressive internal investigation into the matter.

Q: Will she go to jail?

A: No, but others might. She appears not to have known anything about the problem until shortly before the February recall announcement.

And her position atop a limited liability corporation should insulate her.

But if that 2006 change in switch design was done to fix a known safety problem, and federal safety officials weren't told, then people involved in that could have broken federal law.

Q: Will she arrange GM compensation for the victims' families?

A: No promises. She has said GM will "do the right thing," but hasn't specified what. GM might — legally — need to do almost nothing. Most of the deaths happened before it went through government-scripted bankruptcy reorganization in 2009. That left "new GM" freed from most obligations of "old GM."

Lawyers for victims' families are trying to prove that GM knew about the deadly switch problem and covered it up going through reorganization. That could wipe out the automaker's liability shield.

Q: How do all these other GM recalls the past few weeks relate?

A: They don't involve the same issue, which is a faulty ignition switch that can shut off air bags. But so many are happening so fast because Barra wants to prove GM is accelerating its own product and safety reviews, and won't wince when embarrassing public recalls are needed.

Q: Will anybody ever trust GM again?

A: It might take a long time. Dan Akerson, who preceded Barra as CEO, used to say it would take decades to recover in the public eye from poor-quality vehicles the automaker sold in years past. Adding in new wariness over these multiple recalls, and the deaths linked to the switch issue, could keep GM under a cloud for quite awhile.

Monday, June 23, 2014

Mexican Restaurants Squeezed by Surging Lime Prices

Mexican restaurants in U.S. squeezed by surging lime prices Katherine Frey/The Washington Post via Getty Images SAN ANTONIO -- Mexican restaurants in the United States are being squeezed by a sudden jump in the price of limes, an essential ingredient, which has led managers in places like San Antonio that are a hotbed for the cuisine to alter recipes. "Mexico received some heavy rains that destroyed a large amount of the lime crop, so with limited supplies we are seeing lime prices skyrocket," Bryan Black, director of communications for the Texas Department of Agriculture, said on Thursday. Texas like most U.S. states receives most of their limes form Mexico. John Berry, who runs La Fonda, a prominent Mexican restaurant in San Antonio, said Thursday the price he pays for a case of limes has jumped to nearly $100 from $14 last year. "Real simple," Berry said. "We don't buy them. We substitute lemons." Limes are used in guacamole and to garnish beers. Serving a margarita without a lime garnish is burning at the heart of Louis Barrios, who runs the family-owned Mexican restaurant chain "Los Barrios." But he's doing without. "Ninety nine percent of the time, people don't squeeze it into the margarita anyway," Barrios says. A combination of factors has prompted the spike in lime prices. Most limes consumed in the United States come from the Mexican states of Oaxaca, Colima, and Guerrero, which have been hit by an unusual combination of cold weather and flooding, wholesalers said. Shipments have also been disrupted by violence attributed to drug gangs, they said. The high prices aren't expected to end any time soon, according to wholesalers. Pre-made soups can contain a large number of ingredients containing GMOs. For instance, Campbell's (CPB) popular condensed Tomato Soup lists high fructose corn syrup as its second biggest ingredient. According to the Non-GMO Project, nearly 88 percent of all corn planted in the United States is GMO.

4 Investing Ideas From BP's 2014 World Energy Review

BP's (NYSE: BP ) Statistical Review of World Energy shows the limited options that face the global energy system. With 2013's primary energy growth rate of 2.3% falling below its 10-year average, there are signs that the search for economical, emission-light energy is taking its toll. A diversified portfolio is the only way to help adjust the energy system we have inherited.

Natural gas
Turnaround plays are not only exciting, they can be very profitable. Chesapeake Energy (NYSE: CHK ) has been accumulating cash, and recently announced that non-core asset sales are expected to help decrease its net leverage by $3 billion with a limited impact on 2014 production. Basically, the company continues to rationalize its capex budget. From 2010 to 2013 Chesapeake's net cash used in investing activities has fallen from $8.5 billion to $3 billion.

BP's Statistical Energy Review notes that in 2013 only the U.S. saw above-average growth of natural gas consumption. Thanks to a growing distribution network, Chesapeake is right in the middle of the shale boom. It continues to develop unconventional plays like the Utica and Marcellus to reach its goal of producing 1 million barrels of oil equivalent, or BOE, per day. Natural gas is a relatively clean fuel, and the EPA's push to make America's utilities less carbon-intensive puts more wind in Chesapeake's sails.

Coal
Our old friend coal is not painted in a very flattering light, but in 2013 it was the fastest growing fuel and reached its highest portion of primary energy production since 1970.

China's leader Xi Jinping stated that the nation needs an energy revolution to deal with pollution issues and supply challenges. This is not encouraging news for coal, as China contributed 67% of coal's demand growth in 2013. The upside is that other big Asian consumers like India are there to help pick up the slack.

Not all coal is the same. Utilities can buy relatively clean, low-sulfur Powder River Basin coal from Cloud Peak Energy (NYSE: CLD ) , or stick to more traditional dirty sources. China and the U.S. are tiring of highly polluting coal, and Cloud Peak Energy is a critical part of the solution.

Cloud Peak Energy already has access to critical export facilities on the Pacific Coast. The company's 1.5% profit margin is slim, but its 18.1% gross margin and 6.3% EBIT margin give it room to breathe, while marginal coal producers are forced to reduce production.

Nuclear
Global nuclear energy output grew by 0.9% in 2013. This is significant as it was the first increase since Fukushima rocked the world in 2011. Nuclear now accounts for its smallest percentage of global energy production since 1984.

In the midst of these difficulties, nuclear still has a strong future thanks to its military applications and baseload capabilities. Nuclear weapons are an important part of the nation's military, and escalating tensions continue to bring Asian nuclear abilities to the forefront. In addition to the security applications, nuclear energy provides a straightforward way to replicate coal's baseload generation without emissions.

Cameco (NYSE: CCJ ) is the world's preeminent pure-play uranium miner. It has a host of high-quality mines and a small total debt-to-equity ratio of 0.25. Its margins are low as the industry is still recovering from Fukushima, but this has allowed Cameco to buy up assets from potentially dangerous competitors. The good news is that its gross margin of 35.2% lets it sit back and watch the market recover.

Renewables
In 2013 Renewable Energy used in power generation grew 16.3%, contributing a total of 5.3% of global power generation. SunPower (NASDAQ: SPWR ) is on the right side of this growing industry. Its high-efficiency solar panels and low degradation rate let its solar panels produce 75% more energy than its competitors on a given rooftop over 25 years.

SunPower's distributed generation operations still face risks from unstable government policies, but its push to commercialize energy storage solutions in Australia will eventually help to decrease its dependency on retail feed-in-tariffs. Its profit margin of 5.4% shows that renewables are already in the black.

Final thoughts
The 20th century was dominated by fossil fuels. Fossil fuels continue to play a significant role, but a move to emission-light generation is pushing SunPower, Chesapeake, Cloud Peak Energy, and Cameco to the forefront of the energy industry.

Do you know this energy tax "loophole"?
You already know record oil and natural gas production is changing the lives of millions of Americans. But what you probably haven't heard is that the IRS is encouraging investors to support our growing energy renaissance, offering you a tax loophole to invest in some of America's greatest energy companies. Take advantage of this profitable opportunity by grabbing your brand-new special report, "The IRS Is Daring You to Make This Investment Now!," and you'll learn about the simple strategy to take advantage of a little-known IRS rule. Don't miss out on advice that could help you cut taxes for decades to come. Click here to learn more.

AllianceBernstein: Classic Value

This featured recommendation is a classic value stock; the company is a leading global investment management firm structured as a master limited partnership, explains J. Royden Ward, editor of Cabot Benjamin Graham Value Investor.

AllianceBernstein Holding LP (AB) offers high quality research and diversified investment services to institutional investors and private clients in major global markets. The company is one of the largest US investment advisors, with assets under management totaling $445 billion, as of January 31.

AllianceBernstein significantly increased its size with the October 2000 acquisition of Sanford Bernstein, a leading US-based, value-oriented investment manager, for $3.5 billion in cash and stock.

France-based AXA owns 64% of AllianceBernstein LP. One-third of AB's assets under management belong to clients domiciled outside the US.

AB's Institutional Services actively manage stock and bond accounts for institutions, mutual funds, including Alliance Mutual Funds, and investments for well-heeled clients. The company's Retail Services unit offers investment management to other individual investors.

AB has begun a major turnaround. The company produced weak sales and earnings from 2008 through mid-2012, caused by poor investment advice to its debt and equity institutional clients.

During the past 12 months, though, the company's investment advice to clients has been among the best in the industry. AB's new success has attracted many new clients seeking market-beating returns in the debt and equity markets.

Sales advanced 7% and EPS rebounded 39% during the 12 months ended December 31, 2013. Lower costs and higher performance fees helped earnings to surge.

The company's turnaround should strengthen during the next 12 months. My forecast includes a revenue increase of 8% and an EPS advance of 18% to 2.12.

AB's dividend, which is directly correlated to profits, is now 29% higher than a year ago and provides a very high yield of 8.4%. Dividend payments should climb further during the next 12 months.

At 13.3 times latest EPS, and with a huge dividend yield, AB shares are clearly undervalued. I expect AB to reach my minimum sell price target of $33.40 within two years.

Subscribe to Cabot Benjamin Graham Value Investor here…

Sunday, June 22, 2014

Ford reviews Russian operations as ruble weakens

MOSCOW-Ford Motor Co.'s (F) Russian joint-venture, Ford Sollers, has put its operation under review and is eying possible production cutbacks due to weakening economic conditions and a sharp drop in the ruble accelerated by sanction threats over Russia's occupation of Crimea, a company official said Monday.

Foreign auto manufacturers have invested heavily in Russia in recent years, but a 5% decline in overall sales last year because of a slowing Russian economy followed by further economic instability following the events in Ukraine has cast a shadow over the once fast-growing market.

"The ongoing weakening of the ruble puts additional pressure on the Ford Sollers business. As always, we are constantly monitoring the overall economic situation and will act according to the changing environment," the company said in a statement.

A Ford Sollers spokeswoman wouldn't confirm a report in Russian business daily Vedomosti that the company plans a two-month shutdown at its Vsevolozhsk factory near St. Petersburg, but said production scalebacks are among several possibilities being discussed.

"We are reviewing our operations and are working on a major new plan," spokeswoman Elizaveta Novikova said. "We have not committed to anything."

Ford has been one of the fastest growing companies in Russia in terms of local manufacturing, boosting production to seven lines from two since the beginning of 2012. But the company saw an 18% drop in sales in Russia last year as demand for compact cars declined sharply.

Sales of the Ford Focus, which is produced at the joint-venture's St. Petersburg plant, fell 27% in 2013, according to the Association of European Businesses in Russia.

The partnership adjusted production at the plant -- which has a capacity for 125,000 cars a year and employs 3,000 people -- several times last year, cutting back to two shifts from three and halting production entirely for almost a month. The moves resulted in an unspecified amount of layoffs, the company said at the time.

Analysts and industry experts had long predicted that Russia -- which had seen annual growth of more than 30% in recent years -- would soon surpass Germany as Europe's top auto market. But many now say they don't expect Russia to pass Germany until closer to 2020.

The market's promise has led several foreign producers to invest billions in ramping up production capacity a sales slumped in Europe. In 2012, General Motors Co. pledged $1 billion to bring capacity within the country up to 350,000 cars a year by 2018. Later that year, Volkswagen AG committed $1.25 billion to build an engine factory. Last year, Ford Sollers broke ground on a $274 million engine plant.

And the Renault-Nissan alliance is expected to finalize a $742 million deal to take control of Russia's largest car manufacturer, OAO AvtoVAZ. Together, the three companies aim to have a combined capacity of 1.7 million cars by 2016.

Write to Lukas I. Alpert at Lukas.Alpert@wsj.com

Dow Jones Newswires

Friday, June 20, 2014

Prem Watsa on Wells Fargo, Johnson & Johnson, and U.S. Bancorp

Given our concern about financial markets and the excellent returns we achieved on our long term investments, we reluctantly decided to sell our long term holdings of Wells Fargo (a gain of 125%), Johnson & Johnson (a gain of 47%) and U.S. Bancorp (a gain of 135%).

From Fairfax Financial 2013 Chairman's Letters to Shareholders

About the author:Grass Hopper

Visit Grass Hopper's Website

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WFC STOCK PRICE CHART

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Thursday, June 19, 2014

Finra arbitration panel tags Signator Investors for $1.6 million in selling-away case

finra, arbitration, selling away, broker

Signator Investors Inc. is on the hook for nearly $1.6 million from a Finra arbitration panel award stemming from a former broker's clients investing in failed land deals in Texas.

The three-person Financial Industry Regulatory Authority Inc. panel Tuesday issued the award to three clients of the former broker, James Robert Glover.

The three claimants, Edward Blank, Doreen Baker Blank, and Della A.B. Baker, who died in 2012 and was represented by her estate, first invested with Mr. Glover in 1998, according to their attorney.

They met Mr. Glover in a church near Baltimore, said Lance McCardle, the claimants' attorney and a partner with Fishman Haygood Phelps Walmsley Willis & Swanson.

“The Finra arbitration panel awarded our clients almost $1.6 million for the losses they suffered in this selling-away case,” Mr. McCardle said. “Our clients lost all of their retirement savings as a result of Glover's breach of fiduciary duty and fraud and Signator's failure to supervise Mr. Glover during the 14 years he worked at Signator in the Towson, Md., office.”

John Hancock Financial Network Inc. owns Signator Investors, which has about 1,600 registered representatives and investment advisers.

John Hancock Financial Network spokeswoman Melissa Berczuk didn't respond to phone calls by 3 p.m. ET on Wednesday to comment.

Mr. Glover couldn't be reached for comment.

He was permitted to resign from Signator in 2012, according to his BrokerCheck report.

In it, Signator alleged that his resignation was due to a “failure to disclose outside business activities, conversion of client funds and other potential representative misconduct.”

“Our clients met Mr. Glover through the local Mormon church in Maryland,” Mr. McCardle said. “We believe this award will be of interest to others that invested with Mr. Glover as customers have already filed upwards of 40 complaints against Mr. Glover stemming from these investments.”

The claimants alleged fraud, negligence and other causes relating to their investments in three private Texas real estate deals: Colonial Funding; Colonial Tidewater Realty Income Partners and Texas Real Estate Properties, according to the award.

The award is in three parts: $954,000 in compensatory damages; $181,000 in interest; and $454,000 in legal fees. Although Signator is jointly liable with Mr. Glover for the compensatory damages and interest, it is solely liable for the legal fees.

Signator has maintained that it didn't know that Mr. Glove! r was selling the Texas real estate deals, Mr. McCardle said.

That “exposed that [Signator] was not following their own supervisory procedures at the time,” he said.

Mr. Glover “held himself out as trustworthy and pious,” Mr. McCardle said. “He went to Europe with my clients and visited them annually in California, where they lived.”

“Colonial Tidewater Realty at one time was a real thing and investing in apartment complexes and retirement communities. There is no telling if or when it became a Ponzi scheme,” Mr. McCardle said.

“It paid investors monthly interest, but in March 2012 those payments were cut to half,” he said. “In October 2012, the private placements stopped paying altogether.”

Finra and the Securities and Exchange Commission contacted Mr. Glover about Colonial Tidewater, Mr. McCardle said.

According to the award, Signator filed a claim against Mr. Glover, and the three arbitrators found him liable for breach of contract, fraud and negligence and ordered him to pay Signator $1.35 million.

Wednesday, June 18, 2014

Always Hard to Judge a Bottom

Will the recent rally in gold hold, or will it retreat again before the end of the year? Although the market is divided on the answer, MoneyShow's Jim Jubak still offers his best projection.

It's always hard to judge the bottom of a cycle—and it's certainly hard for gold right now. I suspect that the recent rally in gold, to a close of $1,320.90 an ounce on February 20, isn't likely to hold and that we'll get a retreat back below $1,200 before the year is done. But that's only my best projection, and the market is deeply divided right now, between analysts calling for gold to move higher from here (and to finish 2014 higher), and those projecting an end of the year price at $1,050 an ounce, or so.

In this context, I can't say whether this is the time to start buying shares of Yamana Gold (AUY). If gold moves lower, so will the shares of gold miners. Those shares have, by and large, outperformed gold itself in 2014.

But I do think that Yamana's fourth quarter earnings report, announced on February 19, does represent something very like a bottom for the company: big impairment charge, big cuts to capital budget and to the dividend, and what looks like a stabilization of the all-in cost of production at a very low level.

Impairment for the quarter came to a whopping $682 million against operations in Brazil because of a delay in starting operations and against several exploration projects. That took the loss for the quarter to $536 million. Excluding these items, the company earned 5 cents a share in the quarter, down from 26 cents a share in the fourth quarter of 2012.

Gold reserves fell by 8%. That is a relatively small reduction, in comparison to those being declared by other gold miners recently—Goldcorp (GG), for example, declared a 15% reduction in reserves. Yamana Gold has been relatively aggressive in cutting the price assumptions it uses in calculating reserves (at $950 an ounce versus $1,300 an ounce at Goldcorp), so the low price of gold in 2013 has relatively less effect on Yamana's reserve calculations.

For the year, Yamana reported that it had reduced exploration spending to $30 million, a 50% reduction from 2012, and that total capital spending of $1 billion in 2013 would fall to $480 million in 2014. The company also announced a big 42% cut to its dividend, to an annual 15 cents a share. All-in sustaining costs fell to $947 an ounce in 2013 thanks to cost cutting, and the company projected that all-in sustaining costs would dip further to $925 in 2014. Production in 2014 will climb, the company projects, by 200,000 ounces.

To me, this adds up to a lot of bad news, and while I can imagine another batch of negatives if gold plunged below $1,000 an ounce, I think this is enough to mark a bottom for Yamana. Given the uncertainties of the price of gold, I don't think I'd back up the truck right now, but I'm certainly going to continue to hold the shares in my Jubak's Picks portfolio. I'd buy more if the price fell to $9.50 or less. And I'm keeping my target price at $14.50 a share, although I'm stretching out the schedule for that price to November 2014.

Full disclosure: I don't own shares of any of the companies mentioned in this post in my personal portfolio. When in 2010 I started the mutual fund I manage, Jubak Global Equity Fund, I liquidated all my individual stock holdings and put the money into the fund. The fund may or may not now own positions in any stock mentioned in this post. The fund did not own shares of Goldcorp or Yamana Gold as of the end of December. For a full list of the stocks in the fund see the fund's portfolio here.

Corporate Profits â€˜Dangerouslyâ€™ High; Labor to Grab Bigger Share: Research Affiliates

Profits over the past couple of decades have inflated to bubble-like record highs, and investors should expect them to decelerate or even decline over the next couple of decades.

That gloomy long-term forecast comes from Research Affiliates’ Chris Brightman in the Rob Arnott-led firm’s recent newsletter, but the profit warning comes with an unusual political twist:

Much of Brightman’s analysis emphasizes that today’s high level of corporate profits violates people’s sense of social fairness, accounts for rising populism and all but assures that “corporations’ labor, interest and tax expenses [will] rise faster than sales over the next couple of decades” while profits decline.

The profits bubble discussion comes at a time when the stock market hovers near its all-time high after a long bull run, leading many commentators to think a correction is overdue, while some bulls, like Wharton professor Jeremy Siegel, argue that corporate earnings fully justify today’s stock market valuations.

But what gives Siegel reason to celebrate is cause for deep concern on Brightman’s part. Profits, he warns, are “dangerously” elevated, with S&P 500 real earnings per share far above trend, profit margins at or near record levels and profits as a percentage of GDP and relative to labor income at or near all-time highs.

Capital’s share of income relative to wage earners seems socially unsustainable, he says, predicting that “social and political forces, if not economic developments, will cause it — sooner or later — to revert to a more usual level.”

Brightman, head of investment management for the Newport Beach, Calif.-based indexing firm Research Affilliates, warns that investment professionals should beware the human tendency to uncritically assume that the future will accord with the conditions they have known in their careers.

While “a multi-decade period of zero or negative growth in real earnings per share” needed to reduce corporate profits’ share of GDP may seem preposterous to many, history is replete with examples of sustained profit weakness, he says—the 1970s and 1980s being the most recent.

Brightman points out that the most recent profit bubble to end badly, in 2007, may now be exceeded by 2013 in real earnings per share (EPS) terms, and our current profits boom may now be the second highest in history.

The record holder, in 1916, was followed by a 39-year lull till the next profits peak in 1955, and Brightman points out that two world wars and a Great Depression came in the intervening years.

Brightman traces the current profits explosion to the effect of globalization that started in the 1990s, when quite suddenly China, India, Russia, Eastern Europe, South America and Southeast Asia added 3 billion people to the decades-long stasis during which North America, Europe and a few other countries lived amid economic and technological plenty.

That “seismic shift” quadrupled the advanced economy’s labor force, thus dramatically lowering global poverty while at the same time causing wage stagnation in the old advanced economies — all while bolstering corporate profits to near record levels.

Brightman argues that “corporate capture of government policy” has greatly facilitated globalization and its accompanying profits inflation.

“Rent seeking may be more extreme within our very own financial industry than in any other,” he says, citing the Troubled Asset Relief Program and quantitative easing as prime examples of government policy that has benefited corporate interests.

“For several decades, under governments led by both parties, the close nexus between Wall Street and Washington has facilitated an economic policy that favors politically savvy corporations and too-big-to-fail megabanks,” he writes, noting the “sheer coincidence” between government policy and the Street’s large campaign contributions.

The investment industry exec takes pains to state his appreciation of “business success” and abhorrence of “government meddling in the economy,” but in a rhetorical style not usually found in investment letters adds:

“Because globalization and corporatist economic policies seem to have unfairly tilted the scales against lower skilled workers in developed countries, we sympathize with the growing political pressure to subsidize the creation of low-skill jobs, to improve the skills and wages of the less proficient, and provide a living wage to the working poor.”

The Research Affiliates head of investment management foresees a decades-long profits bust, emphasizing the growing role of political change in economic policy:

“We cannot predict the quarter or year when profits will peak," he says. "We can predict the catalyst. The share of corporate profits is a political choice.”

Reasons to Remain Bullish on Google

Google (GOOG) builds products and provides information services. The company offers Google Search, Knowledge Graph, Google Now, Product Listings Ad, and other solutions. It offers hardware products, including Chromebook, Chromecast, and Nexus devices. In addition, Google has a presence in many areas across the tech sector. In this article, I will discuss why the company will continue to create value for investors.

Numbers at A Glance The first quarter 2014 revenue for Google grew a healthy 19% on a year-on-year basis to $15.4 billion. Without currency fluctuations, the company's revenue growth would have been 21% year-on-year. Its non-GAAP operating profit was $5 billion, and its non-GAAP margins were 32%. The company's U.S. revenue grew 14% year-over-year to $6.7 billion. Its non-U.S. revenue excluding the U.K. was up 25% year-over-year to $7.2 billion. Google had a strong operating cash flow of $4.4 billion. A free cash flow of $2 billion for the first quarter provides the confidence that the company will be able to fund strategic growth opportunities in solutions like Android, Chrome, YouTube, just to mention a few.

Revenue-yielding Platforms Google has one of the most successful platforms among tech companies. For example, YouTube reaches more than 1 billion people a month through popular Google channels. What I find astonishing is that YouTube extends the reaches of advertisers that turn to it. For example, Super Bowl related ads on YouTube have been viewed over 300 million times.

Also, YouTube enabled a 300% increase of daily visits to Nissan's website in Australia during a promotion. The solution is well-positioned and has a competitive advantage over video platforms of players like Facebook (FB) and Yahoo (YHOO).

A Strong Momentum from Hardware Products Google's $35 Chromecast is a real hit. Google recently opened up itsChromecast, and more than 3,000 developers worldwide signed up. Chromecast sales were very strong in the first quarter. The Chromebook platform goes from strength to strength. Market researchers say they're selling faster than ever, predicting 11 million sales by 2019. Though rumors that Google is planning to kill off its Nexus device program have been circulating recently, the company says that the Nexus 5 was a "very strong" performer for Google.

Solid Contracts Businesses, governments, and schools are using Google apps to work better. The state of Sao Paulo moved to Google apps for more than 4 million students and 300,000 teachers and staff. About 110,000 employees in more than 26 countries at Spain's Banco Bilboa are using the Google Apps offerings. I expect to see a continued momentum in this area in the near future.

International Expansion The company opened its first office outside the U.S. in 2001. Since then, Google has established a stronger international presence. It invested in a start-up center in London known as "Tech City" near the Silicon Roundabout. The data centers in Hong Kong, Taiwan, and Singapore are the first three Google-owned data centers in the Asia-Pacific region. With the release of its Chromecast apps, the company announced big plans for the international expansion of its streaming media device in 2014.

Promising Emerging Businesses Google has an impressive array of emerging businesses. One of them is Google Play. Google introduced Google Play movies to 39 new countries in the last quarter. Over 75 million new users joined Google Play games in the last six months. The development is bringing Google a lot of revenue.

In addition, Google is about to bring its Android as a car. In March, Google announced Android Wear, a project that extends Android to the wearable market. Google is also working with partners who can't wait to see what developers come up with for people's wrist.

Conclusion Though the company had some legal expenses that slightly affected its revenue in the first quarter, I would recommend Google as a strong buy. The company has revenue-yielding platforms and a strong momentum from hardware products. Also, Google has solid relationships with enterprises and governments. The development will guarantee the company's cash flow. This, in turn, will have a positive effect on shareholder value. I remain bullish about this tech giant.

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Tuesday, June 17, 2014

What Elon Musk's Bold Move Means for Tesla Stock

Elon Musk followed his own advice today (Thursday) in a way that will pay off huge for Tesla Motors Inc. (Nasdaq: TSLA) stock investors...

You see, Musk is viewed as one of the boldest and most innovative chief executive officers in the world. That's part of the reason why Tesla stock has seen a meteoric rise of 515% since the start of 2013. He's also the co-founder of PayPal, Tesla, SpaceX, and SolarCity Corp. (Nasdaq: SCTY).

And in his commencement address last month to the graduating class of the University of Southern California's business school, he said to "Do something bold."

TSLA stock And he's done something bold - again - by opening up all of Tesla's patents for electric vehicles.

In a blog post on Tesla's website, Musk wrote today that the company "will not initiate patent lawsuits against anyone who, in good faith, wants to use our technology."

The decision was made to help energize the electric vehicle market, which Musk says still lags too far behind the traditional auto market.

According to the blog post, new vehicle production is nearing 100 million vehicles annually, and there are nearly 2 billion operational vehicles worldwide. However, automakers attribute less than 1% of their total vehicle sales to electric vehicles on average.

By opening up all of its patents, Tesla and Musk hope that other automakers will be more inclined to produce electronic cars.

"We believe that Tesla, other companies making electric cars, and the world would all benefit from a common, rapidly evolving technology platform," Musk said.

"Tesla Motors was created to accelerate the advent of sustainable transport," he continued. "If we clear a path to the creation of compelling electric vehicles, but then lay intellectual property landmines behind us to inhibit others, we are acting in a manner contrary to that goal."

Some have viewed the move as risky, as competitors will now be able to employ the same exact technology as Tesla. But that's all part of Musk's strategy - a strategy that's going to pay off huge for TSLA stock investors...

What an Expanded Market Means for Tesla (Nasdaq: TSLA) Stock

Musk knows that in order for Tesla Motors and TSLA stock to thrive, the electric vehicle industry must thrive as well. That's why he's giving his competition a leg up. As the quality of electric vehicles - across the market - improves, demand will increase worldwide.

"Our true competition is not the small trickle of non-Tesla electric cars being produced, but rather the enormous flood of gasoline cars pouring out of the world's factories every day," Musk said. "We believe that applying the open source philosophy to our patents will strengthen rather than diminish Tesla's position in this regard."

As an industry leader, Tesla Motors is perfectly positioned to ride any demand increases in electric vehicles. And that's good news for TSLA shareholders.

But unfortunately for investors right now, electric vehicle demand has not reached the point many analysts thought it might.

"Tesla aside, the auto industry's push into [electric vehicles] has fallen far short of expectations," Morgan Stanley (NYSE: MS) Analyst Adam Jonas said in a report this May. "Just a few years ago, forecasts for global [electric vehicle] penetration were as high as 5% or 10% by 2020. From today's perspective, we think penetration in the 1% range would be respectable."

Tesla stock has pulled back in the last few months following its meteoric rise of 2013, and in the past three months the stock is down nearly 16%.

Analysts expect that volatility to continue for the foreseeable future. According to a survey by Thomson/First Call, three analysts rate TSLA stock as a "Strong Buy," three as a "Buy," seven as a "Hold," and one as an "Underperform."

"It is a great company; innovative and the cars are beautiful," Chad Morganlander of Stifel Nicolaus' Washington Crossing Advisors told Yahoo! Finance. "The problem is that the valuation is way ahead of itself."

"For more aggressive traders, perhaps you want to play around with it," he said. "But, from a fundamental perspective and a valuation perspective, I would just be much more conservative with it."

TSLA stock will continue to pull back from record highs. Short-term investors looking for a quick pop should not buy in to TSLA. It also isn't the best stock for risk-averse investors looking for safe plays.

It's the definition of a momentum stock, and any investor that purchases TSLA should be thinking of the company's long-term potential.

If the electric vehicle market takes off like Elon Musk hopes, TSLA stock is a great long-term play for investors willing to take some risk. The company is an industry leader and is run by one of the world's most innovative CEOs. If the market expands, Musk will capitalize.

Money Morning's Chief Investment Strategist Keith Fitz-Gerald says the long-term potential for TSLA stock is undeniable.

"I think Elon Musk is one of the most dynamic CEOs on the planet, and I believe he has the potential to make Tesla a $1,000 stock within the decade," Fitz-Gerald said.

Editor's Note: Elon Musk has helped Tesla stock gain a whopping 112% in the past year as the company operates as a major tech game changer.

Now Tesla is engaged in a highly sensitive venture called BlueStar that could disrupt $737 billion of the U.S. economy and impact 98% of the population.

Few details concerning BlueStar have made their way into the press. However, a recent investigation uncovered some shocking revelations... take a look.

What impact do you think today's patent move will have on TSLA stock in the short term? Let us know on Twitter @moneymorning using #Tesla.

Yahoo! Finance: Here's Why You Want to Avoid Tesla

Retirement Q&A: Investing strategy as rates rise

Q. What are the riskiest investments to hold in a period of rising interest rates, and what are the best places?

A. To some extent, that depends on what interest rates you expect to rise. The traditional advice for income investors is to avoid long-term bonds, because those bonds get hurt worse than short-term bonds when rates rise.

To measure interest-rate exposure, money managers use a figure called duration. A fund with a duration of 10 years, for example, will see its share price fall 10% for every percentage-point rise in interest rates. A fund with a three-year duration would see its share price fall 3% for every percentage-point rise in duration.

If only life were so simple. The biggest problem with duration is that not all rates rise and fall at the same time. The Federal Reserve, for example, largely controls short-term interest rates, and if the economy starts to pick up, it's short-term bonds that will get whacked the most, says Ken Volpert, head of Vanguard's taxable bond division.

That's unfortunate, because investors are rushing into short-term bonds, Volpert says. "It's unbelievable how much is pouring into the short end of the bond market," he says. Should short-term interest rates rise by a percentage point, taking down a two-year Treasury note by 3%, they won't have much interest income to offset that loss. The two-year T-note yields 0.31%.

At the same time, Volpert thinks that intermediate-term bonds are reasonably priced at the moment. "We think the 10-year is a good place to be," he says. While 10-year Treasuries yield just 2.75%, the FlNRA/Bloomberg Active U.S. Corporate Bond Index, which measures high-quality corporate bonds, yields 3.68%.

Another area Volpert likes: municipal bonds. Munis have gotten so clobbered by the woes of Detroit and Puerto Rico that bonds issued by highly stable municipalities offer real value. Currently, for example, a 10-year muni bond yields 2.67%, nearly the same as a 10-year T-note. But a muni is free from federal i! ncome taxes (and state taxes, too, if it's from the state where you live).

Have a retirement question? Send it to jwaggoner@usatoday.com for consideration in a future column.

Follow John Waggoner on Twitter: @johnwaggoner.

Monday, June 16, 2014

Iraqis turn to Whisper app during conflict

Iraqis turn to Whisper app amidst conflict NEW YORK (CNNMoney) "U.S. Embassy in Baghdad is evacuating..!!!!"

That message appeared Saturday at 8 a.m. ET on a secret-sharing application called Whisper. The media reported about the embassy's partial staff relocation hours later.

During the intensifying conflict in Iraq, Whisper is becoming an outlet for Iraqis to share information and post their thoughts anonymously in short tidbits.

Over the weekend, Facebook (FB, Tech30) and Twitter (TWTR, Tech30) said they began investigating reports of service disruptions. Meanwhile, Neetzan Zimmerman, Whisper's editor in chief, told CNNMoney that Whisper usage in Iraq more than doubled between June 12 and June 15. The company declined to provide more specific usage metrics.

"All social media were stopped in Iraq my only escape is whisper," one Whsiper user posted. "Waiting our miserable destiny while ISIS progressing towards Baghdad!!!!!" another said.

According to Zimmerman, Whisper doesn't collect information that would identify users but it can use geolocation to ascertain a user's location within a 1 mile radius.. Zimmerman says Iraqis are posting everything from frustration with the government to every day issues about relationships and life in Iraq.

"On one hand, they're talking about concerns of what can happen," he told CNNMoney. "On the other hand, they're living life and communicating what's normal."

Whisper CEO shares users' darkest secrets

In one case, a user posted about his sexual identity.

"Gay and single in iraq makes you feel.....empty," the user wrote. "I need..a boyfriend to cuddle with before I get billed [sic] in a bomb ;["

Other users are expressing fear. "We r fine in Baghdad but we r ready for the worse [sic]," one wrote.

Applications like Whisper and Secret have recently become popular, though their secretive nature makes it impossible to verify the authenticity of the posts. Yet Zimmerman says he hopes the service will give users a safe platform to share their! thoughts.

"Ultimately ... you can use Whisper to vent or make statements that you would be concerned to make in an identity-based environment," he said.

Google's big concessions end EU antitrust probe

SAN FRANCISCO - Google made "far-reaching" concessions to settle a three year-old European antitrust investigation into alleged abuses of its dominant position in the Internet search business, authorities said on Wednesday.

Google agreed to significantly change the way it displays some search results in Europe in favor of its competitors.

Google will guarantee that whenever it promotes its own services on its web page, the services of three rivals, selected through an objective method, will also be displayed in a way that is clearly visible to users and comparable to the way in which Google displays its own services, the European Commission said.

This will apply to future search services in addition to existing ones, the Commission added in a statement.

Google also agreed to label more clearly search results stemming from its own services to allow users to distinguish between natural search results and those promoted by the company.

"We will be making significant changes to the way Google operates in Europe," Kent Walker, senior vice president and general counsel of Google, said in a statement. "We have been working with the European Commission to address issues they raised and look forward to resolving this matter."

Europe's investigation into Google has cast a shadow over the company, even as many of its businesses thrive and the company expands into new areas such as robotics, wearable gadgets and home automation. A longer antitrust probe could have produced fines of up to 10% of the Google's annual revenue, or about $5 billion.

"News of a settlement removes an important risk for Google, at least in the near- or medium-term," said Carlos Kirjner, an analyst at Bernstein Research. "Structural antitrust regulation, while unlikely, is one of the few, and perhaps the only, truly fundamental, near-existential risk Google faces in the next 10 or 15 years."

Google shares slipped 0.5% to $1,132.68 in morning trading on Wednesday.

Sunday, June 15, 2014

Pentagon Awards $7 Billion Green Energy Contract

The Department of Defense awarded eight defense contracts Wednesday, worth $7.3 billion in total.

The single largest award, constituting 96% of the funds on offer, went to a single, privately held alternative energy firm -- Foresight Renewable Solutions, LLC, based in San Francisco. The U.S. Army Corps of Engineers granted Foresight a $7 billion firm-fixed-price, indefinite-delivery/indefinite-quantity contract "for use in completing and awarding power purchase agreement task orders." The Pentagon's contract announcement did not make clear whether this award is in any way related to the similar-sounding $7 billion in Power Purchase Agreement contracts that were announced last summer.

In addition to the private Foresight contract, the Pentagon announced awards to the following publicly traded companies:

Lockheed Martin (NYSE: LMT ) , which was awarded a $35.8 million contract modification funding the development of a Universal Armament Interface capability in software controlling use of Small Diameter Bombs carried by U.S. Navy F-35 Lightning II stealth fighters. These funds cover ground tests of the software only. Testing should be completed by April 2018. Accenture (NYSE: ACN ) was awarded a $7.5 million contract modification from the U.S. Army, funding "enterprise business system onsite support and change requests" through June 27, 2015.

Best Chemical Stocks To Buy For 2015

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, nitrogen fertilizer producer CVR Partners (NYSE: UAN ) has earned a coveted five-star ranking.

With that in mind, let's take a closer look at CVR and see what CAPS investors are saying about the stock right now.

CVR facts

Headquarters (founded)

Sugar Land, Texas (2007)

Market Cap

$1.8 billion

Industry

Fertilizers and agricultural chemicals

Trailing-12-Month Revenue

$305.4 million

Best Chemical Stocks To Buy For 2015: Enzymotec Ltd (ENZY)

Enzymotec Ltd., incorporated on March 08, 1998, is engaged in manufacturing of ingredients and medical foods company. Its technologies, research, and clinical validation process enables the Company to develop differentiated solutions across a variety of products. The Company markets its product portfolio primarily to established global consumer companies and target large and growing consumer health and wellness markets. Its clinically validated products include bio-functional lipid-based compounds designed to address dietary needs, medical disorders and common diseases. The Company operates in two segments: Nutrition and VAYA Pharma. In addition to its existing products, the Company has several other products to address additional indications in the development phase. enzyme processes; lipid modification; lipid analysis; and process technology and development.

Nutrition

The Company�� Nutrition segment develops and manufactures nutritional ingredient products based on lipids, such as phospholipids, which form the structural basis of cell membranes and are easily recognized, incorporated and used by the body. Its customer base for this segment includes formula and nutritional supplement companies such as Biostime and IVC. Its two selling nutritional ingredient products are InFat, a clinically-proven fat ingredient for infant formula, and krill oil. Its other products in this segment are targeted at improving brain health and providing benefits in memory, learning abilities and concentration.

VAYA Pharma

VAYA Pharma, develops, manufactures and sells branded, prescription-only medical foods for the dietary management of patients with certain medical conditions or diseases having special, medically determined nutrient requirements. Although medical foods must be safe and effective as demonstrated in human clinical studies, they do not require the same expensive and time consuming regulatory approval process typical of prescription drugs. In addition to! its existing products, it has several other products to address additional indications in the development phase.

Advisors' Opinion:

[By Victor Selva]
Finally, as opposed to what we just discussed, the firm is currently Zacks Rank # 4��ell, and it also has a longer-term recommendation of ��eutral�� A Sell rating indicates that the stock, over the next 1 to 3 months, will perform at an annualized rate of 4.8%, which is not attractive for investors. For investors looking for a Strong Buy Rank, BioLife Solutions, Inc. (BLFS) and Enzymotec Ltd. (ENZY) could be the options.

Best Chemical Stocks To Buy For 2015: PetroLogistics LP (PDH)

PetroLogistics LP owns and operates propane dehydrogenation (PDH) facility. The Company is located in the vicinity of the Houston Ship Channel. As of April 23, 2012, the Company had an annual production capacity of approximately 1.45 billion pounds of propylene. Its PDH facility uses a CATOFIN dehydrogenation technology pursuant to a fully-paid license from CB&I Lummus. It derives its sales from three different sources: propylene sales, hydrogen sales, and mixed stream of butane and butylenes (C4 mix stream) and heavier hydrocarbons (C5+ stream) sales.

Contracted Propylene Sales

The Company has propylene sales contracts with The Dow Chemical Company (Dow), Total Petrochemicals USA, Inc. (Total), and INEOS Olefins and Polymers USA (INEOS), each of which use the propylene it supplies in the acrylic acid, polypropylene and acrylonitrile plants. Effective January 1, 2012, it added BASF Corporation (BASF) and LyondellBasell Industries N.V. (LyondellBasell) as additional contracted customers. It delivers propylene to these customers through its integrated pipeline system, which connects its facility to the Dow and Total plants and the LyondellBasell system, and through interconnected third-party pipelines, which connect its facility to INEOS and BASF and to other potential propylene customers.

Spot-Market Propylene Sales

Through the Company�� integrated pipeline system, the Company accesses other consumers of propylene, which it is able to supply on a spot basis with its excess production capacity. It manages its contract and spot portfolio.

Hydrogen Gas Sales

As part of the PDH process, the Company produces commercial quantities of hydrogen. Hydrogen is consumed in refinery processes, including fuel desulphurization.

C4 Mix/C5+ Streams Sales

The Company produces commercial quantities of C4 mix/C5+ streams. It sells the C4 mix stream to specialty chemical consumers or refiners and these customers tran! sport the purchased volumes from its facility by truck. The C5+ stream, which is heavy in aromatics, is transported by its pipeline to a Kinder Morgan terminal, and then sold to Texas Aromatics for use in the chemical or gasoline markets.

The Company competes with Enterprise, Chevron Phillips, ExxonMobil Chemical, Shell Chemical, Flint Hills and the Williams Companies.

Advisors' Opinion:

[By Travis Hoium]
What: Shares of propane company PetroLogistics (NYSE: PDH ) fell as much as 10% today after reporting earnings.

So what: Sales dropped 18% from a year ago to $159.4 million but the company swung to a net income of $41.4 million. On an adjusted basis net income fell from $64.4 million a year ago to $37.8 million in the second quarter. �
[By Seth Jayson]
PetroLogistics (NYSE: PDH ) reported earnings on July 24. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended June 30 (Q2), PetroLogistics met expectations on revenues and beat expectations on earnings per share.
[By Seth Jayson]
Calling all cash flows
When you are trying to buy the market's best stocks, it's worth checking up on your companies' free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That's what we do with this series. Today, we're checking in on PetroLogistics (NYSE: PDH ) , whose recent revenue and earnings are plotted below.

Top 5 Cheapest Companies To Invest In Right Now: ICL Israel Chemicals Ltd (ICL)

ICL Israel Chemicals Ltd (ICL) is an Israel-based company, engaged in the fertilizer and specialty chemical sectors. The company operates in three segments: Fertilizers, Industrial Products, and Performance Products. The Fertilizers segment is engaged in the production of standard, granular, fine red and white potash from three sources, as well as in the production of phosphates, such as phosphate rock, phosphoric acid, fertilizers and animal feed addictives. The Industrial Products segment produces flame retardants, such as brominates and organ phosphorus; elemental bromine, and other chemicals. In addition the Performance Products segment produces specialty phosphates, such as technical, food grade and electronic grade phosphoric acid, phosphate salts, food additives and wildfire safety products, as well as alumina and other chemicals. Advisors' Opinion:

[By Claudia Maedler]
In Israel, the TA-25 Index (TA-25) gained 1.9 percent at the close in Tel Aviv as Israel Corp. jumped 9 percent, the most since July 2009, to 1,755 shekels. The shares soared along with those of its Israel Chemicals Ltd. (ICL) unit, which advanced 6.4 percent on speculation that a possible change in ownership of Russian potash producer OAO Uralkali could help stabilize prices of the crop nutrient.

Best Chemical Stocks To Buy For 2015: Wacker Chemie AG (WCH)

Wacker Chemie AG is a Germany-based company engaged in chemical industry. The Company operates through four business segments: WACKER SILICONES, which produces silicone products, ranging from silanes through silicone fluids, emulsions, elastomers, sealants and resins to pyrogenic silicas; WACKER POLYMERS, which offers a range of polymeric binders and additives; WACKER POLYSILICON, which provides polysilicon, and WACKER BIOSOLUTIONS, which is the life science division of the Company, offers solutions and products for the food, pharmaceutical and agrochemical industries. The Company offers its products for a range of sectors, including consumer goods, food, pharmaceuticals, textiles and the solar, electrical/electronics, basic-chemical industries, medical technology, biotech and mechanical engineering, automotive and construction. The Company also supplies silicon wafers to the semiconductor industry. Advisors' Opinion:

[By Jonathan Morgan]
Wacker Chemie AG (WCH), the fourth-largest producer of polysilicon, jumped 9 percent to 56.22 euros, its largest increase since December.
Banks Decline
Commerzbank slumped 3.7 percent to 8.18 euros, for the biggest loss on the benchmark index.

Best Chemical Stocks To Buy For 2015: Agrium Inc.(AGU)

Agrium Inc., together with its subsidiaries, produces and markets agricultural nutrients, industrial products, and specialty products worldwide, as well as involves in the retail supply of agricultural products and services in North and South Americas. The company?s Retail segment markets crop nutrient products, including nitrogen, phosphate, potash, sulphur, and micronutrients; crop protection products, such as herbicides, fungicides, adjuvants, and insecticides; and seeds. This segment also offers agronomic services, as well as product application, soil and leaf tissue testing and analysis, and crop scouting services. This segment operates 1,192 outlets in the United States, Canada, Australia, Argentina, Chile, and Uruguay. The company?s Wholesale segment produces, markets, and distributes nitrogen, phosphate, potash, sulphate, and other crop nutrient products for agricultural and industrial customers. This segment also owns and operates facilities that upgrade ammonia t o other nitrogen products, such as urea, nitric acid, and ammonium nitrate, as well as provides Rainbow plant food products. Agrium?s Advanced Technologies segment produces and markets controlled-release crop nutrients and micronutrients for the agriculture, specialty agriculture, professional turf, horticulture, and consumer lawn and garden markets. The company was formerly known as Cominco Fertilizers Ltd. and changed its name to Agrium Inc. in 1995. Agrium Inc. was founded in 1931 and is headquartered in Calgary, Canada.

Advisors' Opinion:

[By CJ Capital Research]
Potash is an abundant commodity with enough global deposits to last essentially forever. However, Potash deposits that are economically minable are concentrated in only a handful of countries and dominated by a handful of producers like Uralkali, Belaruskali, K+S, Potash Corp , Mosaic (MOS), Agrium (AGU), and Intrepid Potash (IPI).
[By Tim Gallagher]
Mosaic (MOS), Agrium (AGU), Intrepid Potash (IPI) and CF Industries (CF) have been moving and trading hand-in-hand, with AGU, BHP and Rentech Nitrogen Partners LP (RNF) trading the best, losing the least and rebounding the most since July 30th. IPI has sold off a lot more in the post-news period, as would be expected from a smaller, less established company with mine projects still in development. BHP Billiton Ltd. (BHP) announced plans to proceed with its Jansen Mine Project in Saskatchewan, Canada, potentially tapping the largest and longest-lasting supply in the world known at this time. Scotiabank (BNS) recently commented on Jansen, stating that the added supply "could add the equivalent of 18%-20% of the potash market over recent years." Nearly all of the companies mentioned have had a pretty predictable mix of upgrades and downgrades. That's what makes a market.

Best Chemical Stocks To Buy For 2015: Koppers Holdings Inc (KOP)

Koppers Holdings Inc. (Koppers), incorporated on November 12, 2004,is a global provider of carbon compounds and commercial wood treatment products and services. The Company's products are used in a variety of niche applications in a diverse range of end-markets, including the aluminum, railroad, specialty chemical, utility, concrete and steel industries. The Company serves its customers through a global manufacturing and distribution networks, with manufacturing facilities located in the United States, Australia, China, the United Kingdom, the Netherlands and Denmark. The Company operates in two business segments: Carbon Materials & Chemicals and railroads & Utility Products.

The Company's operations are, to a substantial extent, vertically integrated. Through the Company's Carbon Materials & Chemicals business, the Company processes coal tar into a variety of products, including carbon pitch, creosote, naphthalene and phthalic anhydride, which are intermediate materials necessary in the production of aluminum, the pressure treatment of wood, the production of high-strength concrete, and the production of plasticizers and specialty chemicals, respectively. Through the Company's Railroad & Utility Products business, the Company believes that the Company is thesupplier of railroad crossties to the North American railroads.

Carbon Materials & Chemicals

Carbon pitch, naphthalene, and creosote are produced through the distillation of coal tar, a by-product generated through the processing of coal into coke for use in steel and iron manufacturing. Coal tar distillation involves the conversion of coal tar into a variety of intermediate chemical products in processes beginning with distillation. During the distillation process, heat and vacuum are utilized to separate coal tar into three primary components: carbon pitch (approximately 50%), chemical oils (approximately 20%) and creosote (approximately 30%).

The Company's Carbon Materials & Chemicals business! (CM&C) manufactures principal products, including carbon pitch, a critical raw material used in the production of aluminum and steel; naphthalene, used for the production of phthalic anhydride and as a surfactant in the production of concrete; phthalic anhydride, used in the production of plasticizers, polyester resins and alkyd paints, and creosote and carbon black feedstock, used in the treatment of wood or as a feedstock in the production of carbon black. The Company also uses naphthalene as a feedstock in the manufacture of phthalic anhydride. The primary markets for phthalic anhydride are in the production of plasticizers, unsaturated polyester resins and alkyd resins. The Company is a producer of carbon pitch for the aluminum industry.

Creosote is used as a commercial wood treatment chemical to preserve railroad crossties and lumber, utility poles and piling. The majority of the Company's domestically produced creosote is sold to its Railroad & Utility Products business. In Australia, China and Europe, creosote is sold primarily into the carbon black market for use as a feedstock in the production of carbon black. In Europe and China creosote is also sold to wood treaters. The Company's wood treating plants in the United States purchase substantially all of their creosote from the Company's tar distillation plants.

Other products include the sale of refined tars, benzole and specialty chemicals. The Company's CM&C business manufactures its primary products and sells them directly to the Company's global customer base under long-term contracts or through purchase orders negotiated by its regional sales personnel and coordinated through its global marketing group in the United States. The Company's nine coal tar distillation facilities including joint ventures and four carbon materials terminals give the Company the ability to offer customers multiple sourcing and a consistent supply of products.

Railroad & Utility Products

The Company's Railroad ! & Utility! Products business (R&UP) sells treated and untreated wood products, rail joint bars and services primarily to the railroad and public utility markets in the United States and Australia. The Company also produces concrete crossties, a complementary product to its wood treatment business, through a joint venture in the United States.

Railroad products include procuring and treating items such as crossties, switch ties and various types of lumber used for railroad bridges and crossings. Railroad products also include manufacturing and selling rail joint bars, which are steel bars used to join rails together for railroads. Utility products include transmission and distribution poles for electric and telephone utilities and piling used in industrial foundations, beach housing, docks and piers. The R&UP business operates 13 wood treating plants, one rail joint bar manufacturing facility, one co-generation facility and 13 pole distribution yards located throughout the United States and Australia. The Company's network of plants is strategically located near timber supplies to enable the Company to access raw materials and service customers effectively. In addition, the Company's crosstie treating plants are typically adjacent to its railroad customers' track lines, and its pole distribution yards are typically located near its utility customers.

In the United States, hardwood lumber is procured by the Company from hundreds of small sawmills throughout the northeastern, midwestern and southern areas of the country. The crossties are shipped via rail car or trucked directly to one of the Company's crosstie treating plants, all of which are on line with a railroad. The crossties are either air-stacked for a period of six to twelve months or artificially dried by a process called boultonizing. Once dried, the crossties are pressure treated with creosote, a product of the Company's CM&C business.

The Company's R&UP business' customer base is the North American Class I railroa! d market,! which buys approximately 80% of all crossties produced in the United States and Canada. The Company also has relationships with many of the approximately 550 short-line and regional rail lines. This also forms the customer base for the Company's rail joint bar products. The railroad crosstie market is a mature market with approximately 23 million replacement crossties (both wood and non-wood) purchased during 2012. The Company supplies all seven of the North American Class I railroads and have contracts with six of them. The Company treats poles with a variety of preservatives, including pentachlorophenol, copper chrome arsenates and creosotes .In the United States the market for utility pole products is characterized by a number of small producers selling into a price-sensitive industry. The utility pole market is fragmented domestically, with over 200 investor-owned electric and telephone utilities and 2,900 smaller municipal utilities and rural electric associations.

Advisors' Opinion:

[By Jeremy Bowman]
What: Shares of Koppers Holdings (NYSE: KOP ) were looking rusty today, falling as much as 12% after the company cut its outlook for the current quarter.

Best Chemical Stocks To Buy For 2015: Braskem SA (BRKM5)

Braskem SA is a Brazil-based company primarily engaged in the manufacture of basic petrochemical products. The Company operates in five segments: Basic petrochemicals, Polyolefins, Vinyls, International businesses and Chemical Distribution. The Company�� products portfolio includes ethylene, propylene, butadiene, toluene, xylene, benzene, gasoline, diesel oil, liquefied petroleum gas (LPG), as well as thermoplastic resins, such as polyethylene (PE), polypropylene (PP) and polyvinyl chloride (PVC). Additionally, Braskem is also engaged in the import and export of chemicals, petrochemicals and fuels; the production, supply and sale of utilities, such as steam, water, compressed air, industrial gases, as well as the provision of industrial services, and the production, supply and sale of electric energy for its own use and use by other companies. The Company also invests in other companies, either as a partner or shareholder. Advisors' Opinion:

[By Harry Suhartono]
Brazil�� Ibovespa rose for a third day as traders pared bets on higher borrowing costs in Brazil, boosting the outlook for companies that sell in the local market. B2W Cia. Digital led gains among retailers, with Lojas Americanas SA (LAME3) and Natura Cosmeticos SA (NATU3) also trading higher. Petrochemicals producer Braskem SA (BRKM5) was the worst performer on the equity gauge after O Estado de S.Paulo reported Petroleo Brasileiro SA (PETR4) is seeking to raise prices of naphtha sold to the company by 5 percent.

Best Chemical Stocks To Buy For 2015: Johnson Matthey PLC (JMAT)

Johnson Matthey Plc is a global specialty chemicals company operating in three divisions: Environmental Technologies, Precious Metal Products and Fine Chemicals. Environmental Technologies is a supplier of catalysts and related technologies for applications, such as pollution control, cleaner fuel, hydrocarbons and the hydrogen economy. Precious Metal Products��activities comprise the marketing, distribution, refining and recycling of platinum group metals (pgms), fabrication of products using precious metals and related materials, manufactures pgm and base metal catalysts and pgm chemicals. Fine Chemicals is a supplier of active pharmaceutical ingredients, fine chemicals and other specialty chemical products and services to chemical and pharmaceutical industry�� customer supplier of catalysts. In March 2012, Endo Pharmaceuticals Holdings Inc. acquired U.S. patent 7,851,482 B2 for oxymorphone hydrochloride from the Company. In March 2013, the Company acquired Formox AB. Advisors' Opinion:

[By Namitha Jagadeesh]
British American Tobacco Plc and Imperial Tobacco Group Plc (IMT) each lost at least 1.5 percent as American peer Philip Morris International Inc. forecast 2014 profit growth below its long-term target. Antofagasta Plc (ANTO) and Vedanta Resources Plc (VED) followed miners lower, sliding at least 2 percent. Johnson Matthey Plc (JMAT) gained 3.9 percent after posting better-than-forecast profit and raising its dividend.
[By Inyoung Hwang]
Atos declined 3.5 percent after an investor cut its stake in the company. Intermediate Capital Group Plc lost 3.5 percent after Numis Securities Ltd. lowered its rating on the money manager. European Aeronautic, Defence & Space Co. slid 1.2 percent after UBS AG removed it from its recommended list of stocks. Johnson Matthey Plc (JMAT) climbed 3.6 percent after reporting a profit increase in the first half of the year.

43% of Advisors Older Than 55: Cerulli

Nearly half of the advisor work force is at or near retirement, which means more firms must recruit younger advisors to accelerate their succession plans, and also puts BDs and custodians at risk of losing assets under management, according to a just-released study by Cerulli Associates.

“The average age of financial advisors is 50.9, and 43% are over the age of 55,” reports Kenton Shirk, associate director at Cerulli, in releasing the research firm’s newest study, "Advisor Metrics 2013: Understanding and Addressing a More Sophisticated Population."

“Nearly one-third of advisors fall into the 55 to 64 age range.”

Cerulli focuses on advisor trends and consumer information, including market sizing, advisor product use and preferences and advice delivery.

“As the advisor population ages, broker-dealers and custodians are at risk of losing AUM as advisors exit the industry,” Shirk explains in a statement. “The independent channels are most at risk because they have the oldest advisors on average.”

Broker-dealers, Shirk added, “continue to struggle to recruit new young advisors into the industry to offset those advisors who are nearing retirement.”

Cerulli says that firms should encourage “advisor teams to bring in junior advisors and train them in a specific area of expertise in order to increase the success rate of these new recruits.”

To guard against asset attrition, broker-dealers and custodians need to provide support and resources to help advisors tackle succession planning, and development of internal succession candidates.

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Check out The Fatal Succession Planning Mistake on ThinkAdvisor.