China Telecom Slips New iPhone Details (AAPL, CHA)

On Thursday afternoon, China Telecom Corp Ltd (CHA) accidentally revealed details about the Apple Inc. (AAPL) iPhone 5S and iPhone 5C.

Top Safest Stocks To Watch Right Now

The company posted an advertisement for pre-ordering the phones. This announcement, which was removed soon after it was published, was slipped to the public before Apple’s launching event on September 11 in Beijing.

The post also suggested that the Chinese market will be one of the first markets to get the new phones.

Apple shares were up $3.45, or 0.70%, during pre-market trading Friday. The stock is down 7% YTD.

Top China Stocks To Invest In 2014

The Motley Fool's readers have spoken, and I have heeded your cries. After months of pointing out�CEO gaffes�and faux pas, I've decided to make it a weekly tradition to also point out corporate leaders who are putting the interests of shareholders and the public first and are generally deserving of praise from investors. For reference, here's�my previous selection.

This week, we'll "step" into the retail sector and examine why Foot Locker (NYSE: FL  ) CEO, Ken Hicks, is truly a class act.

Kudos to you, Mr. Hicks
Ken Hicks took the reins at Foot Locker during one of the toughest times in recent retail history. Since becoming CEO on Aug. 17, 2009, Foot Locker's dividend-adjusted share price has catapulted by 268%, or an average of about 2.9% per month!

However, the retail industry certainly isn't a walk in the park -- even for Foot Locker. Shoe retailers and footwear companies have all struggled to some extent as higher payroll taxes and delayed tax refunds have weighed on consumer spending habits domestically. Overseas, slower GDP growth in China has drastically slowed down Nike's (NYSE: NKE  ) plans of dominating the region. In Nike's most recent quarterly report, it grew its sales in all regions, except for China and Japan, where it was forced to step up discounting to move higher-than-expected inventories.

Top China Stocks To Invest In 2014: China Kanghui Holdings(KH)

China Kanghui Holdings develops, manufactures, and markets orthopedic implants and associated instruments. It offers approximately 30 product series of orthopedic implants and associated instruments for trauma, spine, cranial maxillofacial, and craniocerebral indications. The company?s trauma products include a range of nails, plates and screws, and cranial maxillofacial plate and screw systems used in the surgical treatment of bone fractures. Its spine products comprise screws, meshes, interbody cages, and fixation systems used in the surgical treatment of spine disorders. China Kanghui Holdings also manufactures products, including implants, implant components, and instruments for original equipment manufacturers. The company markets its products under Kanghui and Libeier brand names through third-party distributors to hospitals and surgeons. It sells its products in Asia, Europe, South America, and Africa. The company was founded in 1996 and is headquartered in Changzho u, the People?s Republic of China.

Top China Stocks To Invest In 2014: Netease.com Inc.(NTES)

NetEase.com, Inc., an Internet technology company, engages in the development of applications, services, and other technologies for the Internet in China. It provides online game services to Internet users through the in-house development or licensing of massively multi-player online role-playing games, including Fantasy Westward Journey, Westward Journey Online II, Westward Journey Online III, Tianxia II, Heroes of Tang Dynasty, and Datang, as well as the licensed game, Blizzard Entertainment's World of Warcraft. The company also offers online advertising on its Web sites. In addition, NetEase has paid listings on its search engine and Web directory, and classified advertising services, as well as an online mall, which provides opportunities for e-commerce and traditional businesses to establish their own storefront on the Internet. Further, it provides wireless value-added services, such as news and information content, matchmaking services, music, and photos from the We b over SMS, MMS, WAP, IVR, and Color Ring-back Tone technologies. Additionally, the company offers community services, including instant messaging, online personal advertisements, matchmaking, alumni clubs, and community forums; and aggregates news content on world events, sports, science and technology, and financial markets, as well as entertainment content, such as cartoons, games, astrology, and jokes from over 100 international and domestic content providers. NetEase.com, Inc. was founded in 1997 and is based in Beijing, the People?s Republic of China.

Top 5 Companies To Buy For 2014: China Mobile(Hong Kong)

China Mobile Limited, an investment holding company, provides mobile telecommunications and related services primarily in the Mainland China. It offers various services comprising local calls, domestic long distance calls, international long distance calls, domestic roaming, and international roaming. The company also provides voice value-added services, including caller identity display, caller restrictions, call waiting, call forwarding, call holding, voice mail, and conference calls; customer-to-customer messages and corporate short message services; and mobile Internet access services. In addition, it engages in other data businesses, which primarily include multimedia messaging services; color ring services that enable users to customize the answer ring tone from various selection of songs, melodies, sound effects, or voice recordings; and mobile reading, mobile gaming, mobile video, mobile payment/wallet, mobile TV, mobile market, and Internet data center services. F urther, the company offers telecommunications network planning, design, and consulting services; roaming clearance services; technology platform development and maintenance services; and mobile data solutions, and system integration and development services, as well as operates a network and business coordination center. Additionally, China Mobile Limited sells mobile phone handsets and devices. As of March 31, 2011, it served approximately 600.8 million customers. The company was formerly known as China Mobile (Hong Kong) Limited and changed its name to China Mobile Limited in May 2006. China Mobile was founded in 1997. The company is based in Central, Hong Kong, and is considered a Red Chip company due to its listing on the Hong Kong Stock Exchange. China Mobile Limited is a subsidiary of China Mobile Hong Kong (BVI) Limited.

Top China Stocks To Invest In 2014: Clean Diesel Technologies Inc.(CDTI)

Clean Diesel Technologies, Inc. engages in the manufacture and distribution of emissions control systems and products for heavy duty diesel and light duty vehicle markets. The company operates in two divisions, Heavy Duty Diesel Systems and Catalyst. The Heavy Duty Diesel Systems division designs and manufactures verified exhaust emissions control solutions that are used to reduce exhaust emissions created by on-road, off-road, and stationary diesel and alternative fuel engines, including propane and natural gas. Its products include closed crankcase ventilation systems, diesel oxidation catalysts, diesel particulate filters, Platinum Plus fuel-borne catalysts, ARIS selective catalytic reduction reagents, catalyzed wire mesh diesel particulate filters, alternative fuel products, and exhaust accessories. This division offers its products for original equipment manufacturers of heavy duty diesel equipment, such as mining equipment, vehicles, generator sets, and construction equipment, as well as retrofit customers consisting of school districts, municipalities, and other fleet operators. The Catalyst division produces catalyst formulations using its proprietary MPC technology for gasoline, diesel, and natural gas induced emissions. Its products comprise catalysts for gasoline engines, diesel engines, and energy applications. This division supplies its catalysts to automotive manufacturers and large heavy duty diesel engine manufacturers. The company sells its products through a network of distributors and dealers, and its direct sales force worldwide. Clean Diesel Technologies, Inc. is based in Ventura, California.

Advisors' Opinion:

• [By CRWE]

  Clean Diesel Technologies, Inc. (Nasdaq:CDTI), a cleantech emissions control company, will be a presenter at the 3rd Annual Craig-Hallum Capital Group Alpha Select Conference. The presentation is scheduled for 2:10 p.m. ET on Thursday, September 27, 2012 at the Sentry Centers in New York.

Top China Stocks To Invest In 2014: Renesola Ltd.(SOL)

ReneSola Ltd, together with its subsidiaries, engages in the manufacture and sale of solar wafers and solar power products. It offers virgin polysilicons, monocrystalline and multicrystalline solar wafers, and photovoltaic cells and modules. The company also provides cell and module processing services. Its products are used in a range of residential, commercial, industrial, and other solar power generation systems. The company sells its solar wafers primarily to solar cell and module manufacturers. It principally operates in Mainland China, Singapore, Taiwan, Hong Kong, Korea, India, Australia, Germany, Italy, Spain, Belgium, France, the Czech Republic, and the United States. The company was founded in 2003 and is based in Jiashan, the People?s Republic of China.

Advisors' Opinion:

• [By Roberto Pedone]

  
  

  One under-$10 name that's starting to move within range of triggering a big breakout trade is ReneSola (SOL), a manufacturer of solar wafers and producer of solar power products based in China. This stock has been on fire so far in 2013, with shares up sharply by 183%.

  If you take a look at the chart for ReneSola, you'll notice that this stock has been uptrending very strong for the last four months and change, with shares soaring higher from its low of $1.25 to its recent high of $4.85 a share. During that uptrend, shares of SOL have been consistently making higher lows and higher highs, which is bullish technical price action. Shares of SOL have pulled back a bit during the last few weeks, with the stock coming off that high of $4.85 to its recent low of $3.52 a share. This stock has now started to bounce off that $3.52 low and it's quickly moving within range of triggering a big breakout trade.

  Traders should now look for long-biased trades in SOL if it manages to break out above some near-term overhead resistance levels at $4.25 to $4.50 a share and then once it clears its 52-week high at $4.85 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average action of 2.09 million shares. If that breakout triggers soon, then SOL will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $7 to $8 a share.

  Traders can look to buy SOL off any weakness to anticipate that breakout and simply use a stop that sits right below its 50-day moving average of $3.31 a share. One can also buy SOL off strength once it takes out those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

• [By Paul Ausick]

  Stocks on the move: Nokia Corp. (NYSE: NOK) is up 31.5% at $5.13 on the announcement that Microsoft Corp. (NASDAQ: MSFT) will acquire the Finnish firm�� mobile phone business for $7.2 billion. Chinese solar energy stocks are getting a boost again today, with Hanwha SolarOne Co. (NASDAQ: HSOL) up more than 15.9% and ReneSola Ltd. (NYSE: SOL) up 14.9%.

• [By Paul Ausick]

  Big earnings movers: Salesforce.com Inc. (NYSE: CRM) is up 12.5% at $49.11 and posted a new 52-week high of $49.94 today. Krispy Kreme Doughnuts Inc. (NYSE: KKD) is down $15 at $19.74. Splunk Inc. (NASDAQ: SPLK) is up 12.8% at $55.18 after posting a new 52-week high of $55.83 earlier today. Big Lots Inc. (NYSE: BIG) is up 2.3% at $35.42. ReneSola Ltd. (NYSE: SOL) is up 8% at $4.75.

Top China Stocks To Invest In 2014: Universal Travel Group(UTA)

Universal Travel Group, together with its subsidiaries, operates as a travel service provider offering air ticketing and hotel booking services, as well as domestic and international packaged tourism services via the Internet, customer representatives, and kiosks in the People?s Republic of China. It also provides technological solutions to travel reservations, and tour planning and tour guide services. In addition, the company operates TRIPEASY Kiosks, which are placed in hotels, office buildings, banks, shopping malls, and MTR stations for travel booking with credit cards or bank debit cards. Universal Travel Group is headquartered in Shenzhen, the People?s Republic of China.

Top China Stocks To Invest In 2014: China Automotive Systems Inc.(CAAS)

China Automotive Systems, Inc., through its interests in Sino-foreign joint ventures, engages in the manufacture and sale of power steering systems and other component parts for the automotive industry in the People?s Republic of China. It offers a range of steering system parts for passenger automobiles and commercial vehicles. The company provides 4 separate series, 307 models of power steering, including rack and pinion power steering, integral power steering, electronic power steering and manual steering, steering columns, steering oil pumps, and steering hoses. China Automotive Systems, Inc. was founded in 2003 and is headquartered in Jing Zhou City, the People?s Republic of China.

Top China Stocks To Invest In 2014: DAQQ New Energy Corp.(DQ)

Daqo New Energy Corp., together with its subsidiaries, manufactures and sells polysilicon in China. The company sells its polysilicon to photovoltaic product manufacturers for use in the processing of ingots, wafers, cells and modules for solar power solutions. It also produces and sells mono-crystalline and multi-crystalline modules to photovoltaic system integrators and distributors in China and internationally under its Daqo brand. The company was formerly known as Mega Stand International Limited and changed its name to Daqo New Energy Corp. in August 2009. Daqo New Energy Corp. was founded in 2006 and is headquartered Wanzhou, the People?s Republic of China.

Forget The DJIA Component Shakeup; Bank Of America Keeps Rolling In The Right Direction

I've been writing about Bank of America (BAC) pretty consistently now for the past couple of months, insisting that the bank is a buy for several reasons: it's overcoming legal obstacles, it has a good focus on fundamentals like cost, and its CEO seems to have a great head on his shoulders. In addition, Warren Buffett, who has already made enough on BAC to support the overhead of someone like myself until roughly the year 58 trillion, is letting his investment in the company ride after having a sit down with BAC's Chief Executive Officer about the state of the company and the economy as a whole.

A couple of weeks ago, I wrote an article profiling Buffett's visit with Bank of America:

Perhaps the lunch and meet up with Moynihan was a litmus test for Buffett, to try and get a grasp on his outlook - if not on the company - then at least how he feels about the sector and the economy from a macro sense. Any stock moves in the coming days from Buffett will be very telling. If he reports to have sold, he clearly wasn't happy with how things went. Should we hear silence, we can assume what we're assuming now: Buffett is still riding the Bank of America wave. QTR is bullish on Bank of America here, as well.

Well, we've heard nothing of the selling sort from Buffett since then, reaffirming my contention that he wanted to "ride the wave" and keep his money with the bank. Since that article on August 20, the stock has been performing well, bouncing around and over the mid $14 levels of late.

The company's stock has been performing consistently over the last year, having nearly doubled in price. Investors that have been in for the last three months have yielded a nice 9.2%, but those that have been in for the last 12 months have been rewarded with an upside that's pushing 70%.

(click to enlarge)

As I started to argue in my article "! Will Bank of America Break $14 And Fly On Earnings?" the stock appears to be in a very healthy uptrend - one that is likely to continue to the $15-$18 region if BAC can hold over $14. I commented on July 14 of this year:

If Bank of America can impress with this technical momentum behind it, the next step will likely be through $14, which will spur a larger rally in this investor's opinion. The RSI is looking healthy, not having been oversold for a few months, indicating there's technical room for the stock to move upward without being overbought.

Now, it appears we are riding that uptrend. So, what's new in Bank of America land, and have we any news that's going to catalyze or compromise this continued run up?

First, It was reported Tuesday morning that Bank of America, along with Alcoa (AA) and HP (HPQ) were going to be replaced in the Dow Jones Industrial Average. Yahoo reported:

Investment bank Goldman Sachs Group Inc. (GS), credit card company Visa Inc. (NYS:V), and footwear Nike Inc. (NKE) will join the blue chip Dow Jones Industrial Average, the index managers said Tuesday, replacing Alcoa Inc. (AA), Bank of America Corp. (BAC) and Hewlett-Packard Co. (HPQ).

The changes will be effective with the opening of trading on September 23, S&P Dow Jones Indices said in a statement.

The index changes were prompted by the low stock price of the three companies slated for removal and the index committee's desire to diversify the sector and industry group representation of the index.

So, while we can see that being removed on a basis like faltering company performance or something of the sort can sometimes be detrimental to companies, that's of no concern here. BAC was simply removed due to its share price - the DJIA swap does not weight itself by market cap - the "real" metric (O/S times PPS), where BAC weighs in at $157 billion. So far through early afternoon trading on Tuesday, BAC doesn't seem to be affected - trading up 0.18 to 14.66 at 12PM CS! T.

! In addition to the DJIA shakeup being a "non-event", BAC also announced Monday that it is going to continue to eliminate certain jobs by laying off 2,100 more workers and closing 16 mortgage offices. Bloomberg reported:

About 1,500 of the workers helped process home loans, said one of the people, who asked for anonymity because while affected employees were notified on Aug. 29, the scope of the plans hadn't been publicly announced. About 400 worked in a suburban Cleveland call center, and 200 dealt with overdue mortgages, the person said. The reductions are scheduled to be completed by Oct. 31, the people said.

Best Medical Stocks To Watch For 2014

Mortgage lenders are paring staff as higher interest rates discourage refinancing and cast doubt on how long the housing market rebound will last. Wells Fargo & Co., the biggest U.S. home lender, plans more than 2,300 job cuts, and JPMorgan Chase & Co. may dismiss 15,000. Bank of America's pending home loans fell 5 percent at the end of June from the previous quarter.

While layoffs and closings are always heartbreaking for the people involved, it is at the end of the day sometimes necessary to help continue to build value in the stock. At the very end of the day, the company has to answer to its shareholders, buckle down, and make the moves that are going to make continued investment in the company desirable.

In keeping with getting the fundamentals in order, and as I've covered ad nauseum in the past, CEO Moynihan has put his head down and knocked out an onslaught of BAC's legal woes through settlements, slowly and steadily, one at a time.

As I stated in another article about Bank of America, "Why You Should Ignore Bank of America's Legal Woes":

In all seriousness, this legal onslaught is a battle that the company has been at since earlier this year, as CEO Brian Moynihan has been systematically knock! ing lawsu! its out of the way slowly, steadily, and one at a time. The year started with a $1.7 billion settlement with mortgage insurer MBIA, which was mostly cash with a small investment in MBIA securities.

Although this DOJ civil suit is likely to give investors pause when they see the headline, it's likely to be settled for a much smaller amount than the others once it goes through the legal ringer headlines.

One point that concerns me is the fact that many of the jobs cut lie in the mortgage component of the company. One of the bullish stances I took on the company was that it was likely to improve from the housing recovery - so, this news wasn't incredibly exciting to hear and is likely a potential risk I'll keep my eye on going forward.

On the heels of more cost cutting and a meaningless drop from the Dow Jones Industrial Average, I am reaffirming my bullish sentiment on the company.

Although risk continues to exist, specifically in dealing with rising interest rates and downsizing the mortgage sector of the company in the midst of the housing revival, I'm fairly confident that BAC will hold its ground for shareholders. I also think it's likely that BAC will, at some point going forward, increase its dividends.

The attention that the company has been paying to aligning the fundamentals of the company have clearly continued to impress Warren Buffett, who still holds a profitable position on paper to the tune of $5B. In addition to Buffett, I remain impressed with the focus and execution that BAC has put into its cost cutting and fundamental management.

QTR is bullish on BAC here, and wishes all investors the best of luck, as always.

Source: Forget The DJIA Component Shakeup; Bank Of America Keeps Rolling In The Right Direction

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. (More...)

10 Best High Tech Stocks To Own For 2014

SunEdison Inc. (NYSE: SUNE), the company formerly known as MEMC Electronics, announced Thursday morning that it would spin off its semiconductor unit in an initial public offering (IPO) tentatively scheduled for early next year. The company plans to file documents with the U.S. Securities and Exchange Commission in the current quarter. The IPO is, of course, subject to market conditions.

SunEdison currently operates in two divisions: semiconductor materials and solar energy. By shedding the semiconductor business, the company expects to generate more shareholder value:

This new structure will allow each independent company to pursue its shareholder value generating strategies, focus on key markets and customers, optimize capital structures, and enhance access to growth capital for each company in the years ahead. Given the significant accomplishments of the businesses to date, it is the right time for this transaction which we believe maximizes value to our investors while benefiting our customers and employees.

10 Best High Tech Stocks To Own For 2014: Chesapeake Energy Corporation(CHK)

Chesapeake Energy Corporation engages in the acquisition, development, exploration, and production of natural gas and oil properties in the United States. It also provides marketing and other midstream services. The company?s properties are located in Alabama, Arkansas, Colorado, Kansas, Kentucky, Louisiana, Maryland, Michigan, Mississippi, Montana, Nebraska, New Mexico, New York, North Dakota, Ohio, Oklahoma, Pennsylvania, Tennessee, Texas, Utah, Virginia, West Virginia, and Wyoming. As of December 31, 2010, it had interests in approximately 45,800 gross productive wells. The company?s proved reserves include 17.096 trillion cubic feet of natural gas equivalent. Chesapeake Energy Corporation was founded in 1989 and is based in Oklahoma City, Oklahoma.

Advisors' Opinion:

• [By Tony Daltorio]

  They constitute some of the best investments in energy now. Notice how they dominate a list of the leading producers in the three most prolific oil basins over the last year:

  Bakken: Continental Resources Inc. (NYSE: CLR), Whiting Petroleum Corp. (NYSE: WLL), and Hess Corp. (NYSE: HES). Permian Basin: Occidental Petroleum Corp. (NYSE: OXY), Pioneer Natural Resources (NYSE: PXD), and Apache Corp. (NYSE: APA). Eagle Ford: EOG Resources Inc. (NYSE: EOG), ConocoPhillips (NYSE: COP), Cabot Oil & Gas Corp. (NYSE: COG), and Chesapeake Energy Corp. (NYSE: CHK).

  Two stocks from this list that investors should focus on are EOG Resources and Cabot Oil & Gas.

• [By Jon C. Ogg]

  Chesapeake Energy Corp. (NYSE: CHK) was downgraded to Neutral from Positive now that shares are over $25 by Susquehanna.

  Harmony Gold Mining Co. Ltd. (NYSE: HMY) was downgraded to Sell from an already cautious Neutral rating at UBS.

• [By Matthew DiLallo]

  EOG is of course not alone in its quest. The nation's No. 2 natural gas producer, Chesapeake Energy (NYSE: CHK  ) , has shifted its focus to developing the oil-rich Eagle Ford. This past quarter the company produced an average of 85,000 barrels of oil equivalent per day, which is up a breathtaking 135% over last year. While we shouldn't expect the rate of growth to continue, however, overall oil production will continue to grow as both companies expect to continue drilling at least for the next decade. That will go a long way in continuing to secure our nation's energy future.

10 Best High Tech Stocks To Own For 2014: Helios Strategic Income Fd Inc (HSA)

Helios Strategic Income Fund, Inc. is a closed ended fixed income mutual fund launched and managed by Brookfield Investment Management Inc. It operates as a diversified and closed-end management investment company. The fund primarily invests in debt securities and equity securities. Its portfolio of investments includes investments in corporate bonds, home equity loans, commercial loans, franchise loans, equipment leases, manufactured housing, common stock, collateralized debt obligations, certificate-backed obligations, collateralized mortgage obligations, and government agency securities. It was formerly known as RMK Strategic Income Fund, Inc. Helios Strategic Income Fund, Inc. was founded in 2004 and is based in Memphis, Tennessee.

Top 10 High Tech Stocks To Invest In Right Now: Merck & Company Inc.(MRK)

Merck & Co., Inc. provides various health solutions through its prescription medicines, vaccines, biologic therapies, animal health, and consumer care products. The company?s Pharmaceutical segment provides human health pharmaceutical products, such as therapeutic and preventive agents for the treatment of human disorders in the areas of bone, respiratory, immunology, dermatology, cardiovascular, diabetes and obesity, infectious diseases, neurosciences and ophthalmology, oncology, vaccines, and women's health and endocrine. This segment also offers human health vaccines, such as preventive pediatric, adolescent, and adult vaccines. Its Animal Health segment discovers, develops, manufactures, and markets animal health products. This segment offers antibiotics, anti-inflammatory products, vaccines, products for the treatment of fertility disorders, and parasiticides for cattle, swine, horses, poultry, dogs, cats, salmons, and fish. The Consumer Care segment develops, manufac tures, and markets over-the-counter, foot care, and sun care products. Its over-the-counter product line includes non-drowsy antihistamines; treatment for occasional constipation; decongestant-free cold/flu medicine for people with high blood pressure; nasal decongestant spray; and treatment for frequent heartburn. This segment?s foot care products comprise topical antifungal, and foot and sneaker odor/wetness products; and sun care products include sun care lotions, sprays and dry oils; and sunburn relief products. The company serves drug wholesalers and retailers, hospitals, government agencies, physicians, physician distributors, veterinarians, animal producers, and managed health care providers, as well as food chain and mass merchandiser outlets in the United States and Canada. Merck & Co., Inc. was founded in 1891 and is headquartered in Whitehouse Station, New Jersey.

Advisors' Opinion:

• [By Ben Levisohn]

  Rising Treasury yields haven’t hit stocks with big dividends as hard as the overall market today. While the Dow Jones Industrials have fallen� 1.2%, Verizon (VZ), which has a dividend yield of 4.2%, has dropped 0.3% to $48.75 today, while Pfizer (PFE), which has dividend yield of 3,2%, has fallen 0.1% to $29.01. Merck (MRK), which has a 3.5% dividend yield, is off� 0.8% at $48.20.

10 Best High Tech Stocks To Own For 2014: Diana Containerships Inc.(DCIX)

Diana Containerships Inc. owns and operates containerships in Greece. The company engages in the seaborne transportation of semi-finished and finished consumer and industrial products. As of February 23, 2012, its fleet consisted of 8 containerships with a carrying capacity of approximately 32,693 twenty-foot equivalent units. Diana Containerships Inc. was founded in 2010 and is based in Athens, Greece.

10 Best High Tech Stocks To Own For 2014: Sierra Bancorp(BSRR)

Sierra Bancorp operates as the bank holding company for Bank of the Sierra that offers retail and commercial banking services in the central and southern sections of the San Joaquin Valley in California. Its deposit products include checking, interest-bearing transaction, savings, money market demand, time deposit, retirement, and sweep accounts, as well as remote deposit capture facilities. The company?s loan portfolio comprises real estate, commercial, and agricultural loans, as well as land acquisition and development loans, construction loans for residential and commercial development, and multifamily credit facilities; small business administration (SBA) loans; equipment leasing, such as direct finance and operating leases; and retail lending services, which include home equity lines and consumer loans. In addition, it offers secondary market services, installment note collection services, cashier?s checks, traveler?s checks, gift cards, bank-by-mail services, nigh t depository services, safe deposit boxes, direct deposit and automated payroll services, electronic funds transfers, online banking services, ATMs, and other customary banking services. As of January 25, 2010, the company operated 24 branch offices, an agricultural credit center, an SBA center, and an online virtual branch. Sierra Bancorp has a strategic alliance with Investment Centers of America, Inc. to provide non-deposit investment options. The company was founded in 1977 and is headquartered in Porterville, California.

10 Best High Tech Stocks To Own For 2014: Singapore Shipping Corp Ltd (S19.SI)

Singapore Shipping Corporation Limited, an investment holding company, engages in the ownership and management of ships in Sweden, Japan, and Singapore. It owns a fleet of four car carriers for charter. The company offers ships management services in various areas comprising technical management, dry docking, procurement, crew procurement and management, and certification and audits, as well as ship inspection and new construction consultancy services. The company is based in Singapore.

10 Best High Tech Stocks To Own For 2014: Copytele Inc (COPY)

CopyTele, Inc. (CopyTele), incorporated on November 5, 1982, is engaged in development, acquisition, licensing, and enforcement of patented technologies. CTI�� new business model is Patent Monetization and Patent Assertion. As of October 31, 2012, the Company owns 53 U.S. patents and 11 U.S. patent applications, which are mainly grouped into four patent portfolios: Key Based Encryption (KB Encryption); ePaper Electrophoretic Display (ePaper Display); Nano Field Emission Display (nFED Display); and Micro Electro Mechanical Systems Display (MEMS Display). The Company is continuing to develop its patent portfolios through the filing and prosecution of patent applications and initiate lawsuits, if necessary, to prevent the unauthorized use of its patented technologies. In April 2013, its wholly owned subsidiary, CTI Patent Acquisition Corporation, acquired the rights to a patent portfolio relating to loyalty awards programs commonly provided by airlines, credit card companies, hotels, retailers, casinos, and others.

Key Based Encryption

The Company�� portfolio covering the generation and management of encryption keys used for securing e-mail, text messages, data, voice and facsimile. This type of encryption technology is commonly used for cloud based storage and email archiving, to comply with HIPAA and other regulations regarding the safeguarding of personal information. KB Encryption can also be used for protecting sensitive cellular, satellite, and local area network communications. On January 21, 2013, the Company owns 19.5% interest in ZQX.

ePaper Electrophoretic Display

The Company�� fundamental portfolio covering the underlying chemistry, manufacturing, assembly, and internal operations of core electrophoretic technology used in the world�� famous eReader devices. Coverage includes both the particles, and the suspension, which are the primary elements used to create reflective grey scale images to simulate reading on paper.

! Nano Field Emission Display

The Company�� Portfolio covering a new type of flat panel display consisting of low voltage color phosphors, specially coated carbon nanotubes, nano materials to generate secondary electrons, and ionized noble gas, resulting in a bright, sharp, high contrast color image. This is an emerging technology that would result in a flat panel display utilizing less power, with better picture and lower manufacturing costs.

Micro Electro Mechanical Systems Display

The Company�� portfolio covering vanadium dioxide coated pixels that electrically modulate light at extremely high speeds to form an image. Additional coverage on use of electrostatic force to move pixel sized membranes that create a color image. These are emerging, low voltage, display technologies with numerous potential commercial applications.

The Company competes with Acacia Research Corporation, Allied Security Trust, Altitude Capital Partners, Coller IP, Intellectual Ventures, Millennium Partners, Open Innovation Network, RPX Corporation and Rembrandt IP Management

10 Best High Tech Stocks To Own For 2014: KeyCorp (KEY)

KeyCorp is a bank holding company for KeyBank National Association (KeyBank). Through KeyBank and certain other subsidiaries, the Company provides a range of retail and commercial banking, commercial leasing, investment management, consumer finance and investment banking products and services to individual, corporate and institutional clients through two business segments: Key Community Bank and Key Corporate Bank. As of December 31, 2011, these services were provided through KeyBank�� 1,058 full-service retail banking branches in 14 states, additional offices, a telephone banking call center services group and a network of 1,579 automated teller machines (ATMs) in 15 states. On January 17, 2012, the Company opened another national bank subsidiary.

In addition to the banking services of accepting deposits and making loans, the Bank and trust company subsidiaries offer personal and corporate trust services, personal financial services, access to mutual funds, cash management services, investment banking and capital markets products, and international banking services. Through its bank, trust company and investment adviser subsidiaries, the Company provides investment management services to clients that include corporate and public retirement plans, foundations and endowments, individuals and trust funds. The Company provides other financial services - both within and outside of its primary banking markets - through various nonbank subsidiaries. These services include community development financing, securities underwriting and brokerage. It is also an equity participant in a joint venture that provides merchant services to businesses.

Lending Activities

As of December 31, 2011, the Company�� Commercial, Financial and Agricultural loans, also referred to as Commercial and Industrial, represented 39% of its total loan portfolio. As of December 31, 2011, commercial real estate loans represented approximately 19% of its total loan portfolio. These loans include bo! th owner and nonowner-occupied properties and constitute approximately 27% of its commercial loan portfolio. Its commercial real estate lending business is conducted through two primary sources: its 14-state banking franchise, and Real Estate Capital and Corporate Banking Services. The Company conducts financing arrangements through its equipment finance line of business. Commercial lease financing receivables represented 17% of commercial loans at December 31, 2011. The home equity portfolio is the largest segment of its consumer loan portfolio.

Investment Activities

The Company�� securities portfolio totaled $18 billion at December 31, 2011. Available-for-sale securities were $16 billion at December 31, 2011. Held-to-maturity securities were $2.1 billion at December 31, 2011. At December 31, 2011, it had $2.1 billion in collateralized mortgage obligations (CMOs) in its held-to-maturity securities portfolio. At December 31, 2011, the Company had $15.9 billion invested in CMOs and other mortgage-backed securities in the available-for-sale portfolio. Federal Agency CMOs constitute most of its held-to-maturity securities along with foreign bonds and preferred equity securities. The investments in equity and mezzanine instruments made by its principal investing unit represented 61% of other investments at December 31, 2011. They include direct investments (investments made in a particular company), as well as indirect investments (investments made through funds that include other investors).

Sources of Funds

Domestic deposits are the Company�� primary source of funding. During the year ended December 31, 2011, these deposits averaged $58.5 billion and represented 80% of the funds it used to support loans and other earning assets. Wholesale funds, consisting of deposits in its foreign office and short-term borrowings, averaged $3.4 billion during 2011. At December 31, 2011, the Company had $4.7 billion in time deposits of $100,000 or more.

Advisors' Opinion:

• [By Jon C. Ogg]

  KeyCorp (NYSE: KEY) was raised to Outperform from Neutral at Credit Suisse.

  Oasis Petroleum Inc. (NYSE: OAS) was raised to Buy from Hold with a $55 price target at Deutsche Bank and was raised to Buy from Neutral with a $53 price target at SunTrust.

10 Best High Tech Stocks To Own For 2014: Aetrium Incorporated(ATRM)

Aetrium Incorporated designs, manufactures, and markets electromechanical equipment for the semiconductor industry to handle and test integrated circuits (ICs). The company provides test handler products, which incorporates thermal conditioning, contacting, and automated handling technologies to provide automated handling of ICs during production of test cycles; change kits to adapt test handlers to various IC package configurations or to upgrade installed equipment; and gravity feed test handlers. It also offers reliability test equipment, which provides structural performance data to aid in the evaluation and improvement of IC designs and manufacturing processes. The company sells its products to semiconductor manufacturers, and their assembly and test subcontractors through direct salespeople, independent sales representatives, and distributors in the United States, the United Kingdom, France, Germany, Italy, Korea, Japan, Taiwan, China, Thailand, Malaysia, Singapore, a nd the Philippines. Aetrium Incorporated was founded in 1982 and is based in North St. Paul, Minnesota.

10 Best High Tech Stocks To Own For 2014: The Advisory Board Company(ABCO)

The Advisory Board Company, together with its subsidiaries, engages in the provision of best practices research and analysis, business intelligence and software tools, and management and advisory services primarily in the United States. The company offers various programs and services, including best practices research services that focus on identifying best-demonstrated management practices, critiquing widely-followed but ineffective practices, and analyzing emerging trends in the health care and education industries; business intelligence and software tools, which allow members to pair their own operational data with the best practices insights; and management and advisory services programs for assisting member institutions to adopt and implement best practices to enhance performance. As of June 30, 2011, it provided 51 distinct membership programs to hospitals, health systems, colleges, universities, pharmaceutical and biotech companies, health care insurers, medical de vice and supply companies, and other educational institutions. The company was founded in 1979 and is headquartered in Washington, District of Columbia.

Advanced Micro Devices (AMD) at the Citi Global Technology Conference: Key Takeaways

On Wednesday morning, Lisa Su, the Senior Vice President and Head of the Global Business Unit for Advanced Micro Devices, Inc (NYSE: AMD), presented at the Citi Global Technology Conference (you can listen to the audio by clicking here or read transcript on Seeking Alpha here). I should mention that Advanced Micro Devices is in our SmallCap Network Elite Opportunity (SCN EO) portfolio and we are down around 14% – namely because the company had the misfortune of reporting earnings the same day some major tech names were disappointing investors. Nevertheless, here is a quick summary of the key takeaways for investors (rather than for any techies) from the Citi Global Technology Conference:

Current Visibility Versus a Quarter Ago Versus a Year Ago. When asked about visibility, Lisa commented that in 2012, 95% of Advanced Micro Devices' exposure was to the PC market; but by the end of this year, the company intends to have at least 20% of the business outside of the traditional PC market. Moving forward for the next three years, the company has a target of 40% to 50% of its business coming from outside the traditional PC space. Lisa also added that in the newer business, particularly the semi-custom and game console business, the company has fairly good visibility. Productivity Gains Versus a Quarter Ago Versus a Year Ago. Lisa noted how Advanced Micro Devices has transitioned from being a pure X86 Company to be really more of a design company. More importantly and in the areas of core technology IT strengths where AMD spends a lot of engineering and R&D dollars, the company is able to reuse those components into a bunch of markets to get a bunch of products out. About the "Ambidextrous" Strategy. Lisa pointed out that the idea of one size fits all in terms of a product is changing along with the greater need to customize for various vertical markets. So the company's ambidextrous strategy is: "…the idea of really using both ARM and X86 architectures as well as combining graphics, third party IP together so that we can optimize for each market segment." The PC Market. According to Lisa, Advanced Micro Devices views that it has share opportunity growth in the PC market given the size of its share plus there are opportunities in commercial. She did add that the market today has a lot more focus on the entry price points. Margins on the Console Business. When asked about margins for the console business, Lisa noted that it's fair to say that the semi-custom business model is different from our traditional PC model with the gross margins being below corporate average, but the operating margins are fairly good. She then added: "…it's really a very, very nice model because we designed these with our customers, our customers fund a large portion of the engineering expense and so the gross margin fall through to operating margins as a percentage is quite high." Operating Expenses. Lisa noted that Advanced Micro Devices' model and restructuring has really seen operating expenses go down over the last three or four quarters. With most of the restructuring now behind the company and revenue accelerating, operating expenses will stay constant and roughly flat. However, Lisa did mention that Advanced Micro Devices is doing a shift in sales and marketing as some of the new channels require a more dedicated sales force e.g. embedded or professional graphics.

In other words, Advanced Micro Devices is continuing to make progress in its transition away from or rather dependence on the PC market.

SmallCap Network Elite Opportunity (SCN EO) has an open position in AMD. To find out what other open positions SCN EO currently has, and to learn why so many traders and investors are relying on this premium subscription service, click here to find out more.

Can Tesla Help Awful Electric Car Sales?

Electric cars have only one problem. No one wants to own one. That might change because of the wildly positive publicity around the success of Tesla Motors Inc. (NASDAQ: TSLA). But the sales of a car that costs about $80,000 may do nothing for vehicles priced only half as much. The rich may have tastes that the middle class does not. Perhaps other electric vehicles (EVs) are just not very good cars.

General Motors Co.’s (NYSE: GM) Chevy Volt and Nissan’s Leaf should be considered the pioneers of the electric car movement. However, neither has flourished. Volt sales through July were only 28,989, slightly down from last year. Leaf sales only reached an abysmal 11,703. That was up sharply from the year before, but still pathetic at such a tiny level.

GM finds itself so desperate for Volt sales that it cut the car’s sticker to $5,000 for 2013 models. Purists would not call it a true electric car anyway because of its gas-powered generator. However, for most of the unschooled public, it is electric enough.

The Leaf bills itself as fully electric. If so, demand for the fully electric class counts as worse than the Volt. Nissan customers can get 0% financing on a Leaf for a 36-month loan.

A few other manufacturers, including Ford Motor Co. (NYSE: F) and Honda Motor Co. Ltd. (NYSE: HMC), have entered the EV sector. Neither sells more than a handful of these cars a month.

Compared to these cheap vehicles, Tesla has several advantages. First is the breathlessly positive reviews the car has received for safety, style and remarkable handling. The more modest-priced EVs have not received accolades that even approach these. Car researchers have been lukewarm about the balance of the vehicles in the class.

Tesla also has benefited from the lack of available cars. When so many people want the same thing, demand can appear tremendous. The last major product that enjoyed such a supply-and-demand balance was early versions of the Apple Inc. (NASDAQ: AAPL) iPhone. In contrast to Tesla, cheaper electric cars are easy to find.

Electric car sales have been a failure since the launch of the Volt and Leaf in late 2010. Without the Tesla’s fantastic speed, reviews and safety reports, lower priced EVs have been unable to crack the market. None has been able to draft behind Tesla’s success.

Top Penny Stocks To Invest In Right Now

Shares of Monster Beverage (NASDAQ: MNST  ) rose nearly 5% Monday after the company's board of directors approved a $200 million share repurchase program. As management stated recently, the company had already used every penny of the $250 million it authorized for share repurchases less than five months ago, so it looks like they were just itching to continue increasing shareholders' slice of the pie.

Even so, I suppose this latest authorization shouldn't have come as much of a surprise considering the company managed to spend more than $737 million in 2012, buying back shares at an average price of $54.47 per share -- or about 3% below yesterday's closing price.

Does it make sense?
Okay, we get it; the folks at Monster are trying to send investors a not-so-subtle message that they think their stock is undervalued.

Top Penny Stocks To Invest In Right Now: MIND C.T.I. Ltd.(MNDO)

Mind C.T.I. Ltd. develops, manufactures, and markets real-time and off-line billing and customer care software for various types of communication providers. The company offers billing and customer care solution supports multiple services, including voice, data, and content services, as well as prepaid and postpaid payment models in a single platform. It also provides a workflow engine to support the creation and execution of business processes, such as order management, trouble ticket, and debt collection. In addition, the company offers an integral point of sale solution that comprises dealer, store, and cashier management and sales processes. Further, it provides professional services, primarily to billing and customer care customers, consisting of installation, turnkey project implementation services, customer support, training and maintenance services, customization, and project management. Additionally, the company offers call management systems, including PhonEX, MEI PS, and PhonEX-ONE, which are used by organizations for call accounting, telecom expense management, traffic analysis, and fraud detection. Mind C.T.I. Ltd. offers its products through marketing alliances with network equipment vendors, systems integrators, and resellers in the Americas, the Asia Pacific, Africa, Europe, and Israel. It primarily serves traditional wireline and wireless, voice over Internet protocol, and broadband IP network operators, as well as WiMAX operators, cable operators, 3G operators, and mobile virtual network operators. The company was founded in 1995 and is headquartered in Yoqneam, Israel.

Top Penny Stocks To Invest In Right Now: Natural Alternatives International Inc.(NAII)

Natural Alternatives International, Inc. provides private label contract manufacturing services to companies that market and distribute vitamins, minerals, herbs, and other nutritional supplements, as well as other health care products, to consumers in the United States and internationally. It offers strategic partnering services, including customized product formulation, clinical studies, manufacturing, marketing support, international regulatory and label law compliance, international product registration, packaging in multiple formats, and labeling design. The company also develops, manufactures, and markets its own branded products under the Pathway to Healing product line through print media and the Internet distribution channels. It manufactures products in various forms, including capsules, tablets, chewable wafers, and powders. The company was founded in 1980 and is headquartered in San Marcos, California.

Top 10 Casino Companies For 2014: Atlas Air Worldwide Holdings(AAWW)

Atlas Air Worldwide Holdings, Inc. provides air cargo and outsourced aircraft operating solutions worldwide. The company operates through four segments: Aircraft, Crew, Maintenance, and Insurance (ACMI); Air Mobility Command (AMC) Charter; Commercial Charter; and Dry Leasing. The ACMI segment offers aircraft that is crewed, maintained, and insured by the company for lease. The AMC Charter segment provides full planeload charter flights to the U.S. military. The Commercial Charter segment provides planeload of capacity charter services to charter brokers, freight forwarders, direct shippers, and airlines. The Dry Leasing segment provides for the leasing of aircraft and/or engines to customers. The company operates a fleet of Boeing 747 freighters. Its customers include airlines, express delivery providers, freight forwarders, the U.S. military, and charter brokers. It operates in Asia, the Middle-East, Australia, Europe, South America, Africa, and North America. As of Decem ber 31, 2009, the company operated a fleet of 747-400 freighter aircraft. Atlas Air Worldwide Holdings was founded in 1992 and is based in Purchase, New York.

Top Penny Stocks To Invest In Right Now: Preformed Line Products Company(PLPC)

Preformed Line Products Company, together with its subsidiaries, designs and manufactures products and systems used in the construction and maintenance of overhead and underground networks for the energy, telecommunication, cable operators, and information industries worldwide. The company offers formed wire and related hardware products to support, protect, terminate, and secure power conductor and communication cables and to control cable dynamics. These products also include hardware for supporting and protecting transmission conductors, spacers, spacer-dampers, stockbridge dampers, corona suppression devices, and various compression fittings for dead-end applications. It also provides protective closures, which include splice cases to protect fixed line communication networks, such as copper cable or fiber optic cable from moisture, environmental hazards, and other potential contaminants. In addition, the company offers data communication cabinets that are used in high -speed data systems to hold and protect electronic equipment; plastic products, including guy markers, tree guards, fiber optic cable markers, and pedestal markers to identify power conductors, communication cables, and guy wires; and other products, such as hardware assemblies, pole line hardware, resale products, underground connectors, solar hardware systems, and urethane products, which are used by energy, renewable energy, communications, cable, and special industries. Its customers include public and private energy utilities, communication companies, cable operators, financial institutions, governmental agencies, contractors and subcontractors, distributors, and value-added resellers. The company markets its products through direct sales force and manufacturing representatives. Preformed Line Products Company was founded in 1947 and is headquartered in Mayfield Village, Ohio.

Top Penny Stocks To Invest In Right Now: (NVDL)

NovaDel Pharma Inc., a specialty pharmaceutical company, develops oral spray formulations for marketed pharmaceuticals. The company?s proprietary technology enables delivery of drugs into the bloodstream leading to onset of action and patient benefits. Its oral spray candidates target angina, insomnia, erectile dysfunction, migraine headaches, and nausea. NovaDel Pharma?s marketed products include NitroMist for acute relief of an attack of angina pectoris, or acute prophylaxis of angina pectoris, due to coronary artery disease; and ZolpiMist for short-term treatment of insomnia. The company?s product candidates comprise Duromist, which is in preclinical development for erectile dysfunction; Zensana, which is in preclinical development for nausea; NVD-201, an oral spray formulation of sumatriptan in Phase 2/3 clinical trial to treat migraine headache; NVD-301, an oral spray formulation of midazolam in preclinical stage for the treatment of sedation during diagnostic, therap eutic, and endoscopic procedures; and ZolpiMist in Phase 1 clinical trial to treat middle of the night awakening. It has strategic license agreements with Talon Therapeutics, Inc., Kwang Dong Pharmaceuticals, and BioAlliance Pharma SA to develop and market Zensana; Manhattan Pharmaceuticals, Inc. for the company?s oral spray technology to deliver propofol for pre-procedural sedation; and Velcera Pharmaceuticals, Inc. for veterinary applications for marketed veterinary drugs. NovaDel Pharma also has agreements with Mist Acquisition, LLC, for the manufacturing and commercialization of the NitroMist lingual spray version of nitroglycerine; and ECR Pharmaceuticals Company, Inc. to manufacture and commercialize ZolpiMist. The company was formerly known as Flemington Pharmaceutical Corporation and changed its name to NovaDel Pharma Inc. in October 2002. NovaDel Pharma Inc. was founded in 1982 and is headquartered in Bridgewater, New Jersey.

Renewable Energy Is Important for Society, But Makes for Complicated Investing

NEW YORK (TheStreet) -- Renewable energy has been one of the most complicated market segments in which to invest for many years. The reason for this is perhaps counter-intuitive but can be understood.

In general terms, when the price of oil goes up it creates the sentiment that the world needs more renewable energy sources and infrastructure to offset higher oil or natural gas costs and so prices for wind and solar stocks goes up.

When the price of oil goes down, it creates the perception that there is less need for renewable energy and so the price for wind and solar stocks goes down.

The price of crude oil peaked in the summer of 2008 at $147. Despite being up 15% year to date, it is still down almost one third since that 2008 peak. Since the peak in crude, the Guggenheim Solar ETF (TAN) is down 87% and the First Trust ISE Global Wind Energy Index Fund (FAN) is down 63%. Against the backdrop of crude oil's rally this year, however, TAN is up 92% and FAN is up 44%. The performance dispersion between the two funds has to do with their respective constituencies. TAN is 80% technology stocks and 20% industrial stocks and all of the holdings are pure solar plays. FAN allocates 57% to utilities and some other companies like General Electric (GE) that might be big players in the industry but for whom the industry barely moves the needle. Next Era Energy (NEE) is the old Florida Power & Light, but is heavily involved with transmitting wind power to its customers. NEE is a legitimate holding in the fund but does not capture the production of turbines like Danish company Vestas Wind -- FAN's second largest holding -- does. For five years, Vestas is down 80% but is up 289% year to date while NEE is up 41% for five years and 14% in 2013. Renewable energy is evolving to become more important to business. Both Apple (AAPL) and Google (GOOG) are investing into the space. Google just announced that it bought 240 megawatts from a wind farm near Amarillo, Texas, to help power its data center in Oklahoma starting in 2014. Apple has bought a third-party renewable energy and built a solar farm, both in North Carolina, to help power its data center in that state.

Data centers use tremendous amounts of energy and, of course, the need to store data is growing exponentially but there are other environmental needs for renewable energy as well. Earlier this week, the Washington Post ran an article on two stroke engines, noting that leaf blowers "emit more pollutants than a 6,200-pound 2011 Ford F-150 SVT Raptor."

Two stroke engines can also be found in things like weed eaters and chainsaws. Although there are electric versions of these tools, as anyone who has ever tried to buck a tree with an electric chainsaw will tell you they are far less efficient.

The realistic future, however, is not in chainsaws but electric vehicles, solar power and wind power.

There are several risks to investing in renewable energy. One is innovation that creatively destroys what was previously leading edge technology. LDK Solar (LDK) used to be one of the big players in solar and has a large weighting in the solar ETFs. Although the company is still in business, its stock is down 97% since its 2007 peak and is hemorrhaging money. This will happen to other companies. Another risk comes from the extent to which renewable energy is subsidized by the government. Last year Spain announced it was ending subsidies for solar power due to economic reasons and Germany has announced it will end them by 2018. Solar's reliance on subsidies in order to be viable is also a warning sign for near-term investing but also cause for optimism that the industry has a lot of room for new efficiencies and innovation to be brought to the market. This is where the long term investment opportunity will come from. At the time of publication the author had no position in any of the stocks mentioned. Follow @randomroger This article was written by an independent contributor, separate from TheStreet's regular news coverage.

This contributor reads: Credit Writedowns Pragmatic Capitalist Mike Shedlock Barry Ritholtz John Hussman On Twitter, this contributor follows: TheStalwart ETF Database zerohedge financial acrobat

Outerwall's Stock Tanks: Time To Buy?

Outerwall (Nasdaq:OUTR), the maker of Redbox and Coinstar automated kiosks, seriously reduced its third quarter and full-year revenue and earnings outlook September 16. Its stock tanked the next day on the news. Although it gained back some of its early losses, it still finished September 17 down 11.6%, very close to its 52-week low.

Is this a falling knife or a time to buy? I'll have a look.

The Bad News

On July 25 as part of its Q2 earnings release it projected 2013 full-year core diluted earnings of at least $5.76 per share. Less than two months later it reduced its 2013 outlook; it now expects full-year core earnings of $4.72 per share, an 18% cut to its number. Never a good thing, CEO J. Scott Di Valerio said the following: "Although both rentals and revenue for Redbox increased significantly in July and August over 2012 levels, they were not to expectations. In addition, heightened promotional discount activity, which added new customers during the quarter, had an adverse impact on the expected average transaction size and we believe drove consumers toward more single night rentals."

Translation—they gave away the store in order to gain market share. It's no different then a clothing store ramping up discounts to boost sales; something has to give and it's usually gross margins.

Normally, if you discount heavily, revenues should increase. That's not happening here. Outerwall expects revenues at the low-end to be $2.27 billion, down $100 million from its July outlook. How could this happen? Well, as the CEO mentioned, its discounting brought in lots of single-night rentals but not nearly enough multi-night customers reducing the size of the average transaction. It's simple mathematics.

Outerwall's definitely got some side bets going on: Rubi, its automated coffee machine serving Seattle's Best Coffee, Starbucks' (Nasdaq:SBUX) other coffee brand; Crisp Market, its self-serve food kiosk; Redbox Instant by Verizon (NYSE:VZ), its own version of Netflix (Nasdaq:NFLX) or Amazon's (Nasdaq:AMZN) Prime; and ecoATM, the automated kiosk that trades used cell phones for cash. That last one it paid $263 million for the remaining 67% it didn't already own. The potential for one of these to be bigger than Coinstar is certainly possible.

However, its Redbox kiosks still represent 86% of its overall revenue. If that doesn't go right—the entire company's on faulty ground.

The Good News

It's not very fun when you have to admit to investors that your business model just went cockeyed. How else do you explain an 18% reduction in annual earnings? It's inexplicable, really. But it happens. It's better to know what's happening ahead of time than to find out when it normally releases its Q3 results—utilizing the "rip the band-aid off" solution. Take your lumps and move on.

There's a lot to like about the company despite the near-term problems. For instance, it still expects free cash flow in 2013 to be between $211 million and $227 million. At its September 17 closing price of $49.49, you're looking at a price-to-free-cash flow multiple of 6.4, which is lower than most, if not all, of its peer group. In addition, its net debt is just $471 million or less than one times' EBITDA and that's after accounting for the $100 million borrowed on its revolving line of credit as well as the use of $162 million in cash in order to pay for its acquisition of ecoATM. It's in a pretty enviable cash position. Not to mention it's seriously undervalued.

I've already mentioned that it trades at an extremely low multiple to free cash flow. Its enterprise value is currently $1.77 billion or 4 times EBITDA, which is also low. But take into account the ecoATM deal and its adjusted EBITDA guidance for 2013 and the multiple drops to 3.6. In addition, while its Coinstar business only generates about 13% of Outerwall's overall revenue, its operating margins are rock solid at 34% in Q2, 12 percentage points higher than Redbox. As a result of Coinstar's consistent profitability, it's virtually impossible for Outerwall to lose money, which provides some downside assurance for investors when Redbox isn't quite firing on all cylinders. It also allows the company to take some chances on its New Ventures division as it can afford to absorb a reasonable amount of losses. It's critical to its future success.

On only one occasion in the past decade has Outerwall suffered an operating loss; $13 million in 2007. During that year the mid-point between its high and low was $29.83. Today it trades just $20 higher yet its operating income is higher than its ever been and its revenues are four times greater. The last time it traded below $50 was December 2012 and January 2012 before that. It hasn't traded below $40 since April 2010; you'd have to go all the way back to December 2008 for a trade below $20.

Bottom Line

There are some definite red flags with its recent Q3 and full-year guidance. Fortunately for existing shareholders the damage September 17 was limited to an 11% haircut. It's possible that Outerwall continues its retreat in the days and weeks ahead. For deep value investors that's a very good thing. Personally, I've always liked its business—I just wish it had a normal name.

I'd buy some now and wait to see if you can get more below $40. I wouldn't characterize Outerwall's stock as a falling knife. Rather, I view it as a reasonably stable business that slipped up. All good companies get their comeuppance. Outerwall's turn just happens to be now.

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

Should Nations with High Unemployment Get Labor Day Off?

Labor Day is a holiday meant to honor the working man and the working woman. Its roots are more than 100 years old now. The question that comes to mind in today’s age of high unemployment and underemployment is just how to consider this holiday. The United States has an official unemployment rate of 7.4%. Few would argue with you if you said that unofficially unemployment is much higher, when you consider underemployment and those who have dropped out of the labor force.

The U.S. Department of Labor calls Labor Day a creation of the labor movement, dedicated to the social and economic achievements of American workers. It is an annual national tribute to the contributions workers have made to the strength, prosperity and well-being of our country. Many other countries have a similar holiday, known as May Day or International Workers’ Day, that is celebrated on May 1 rather than the first Monday of September.

Regardless of when Labor Day is in the United States and the rest of the world, the term “Labor Day” has to be truly a sad pun in many nations. Here are some of the nations of the world that the latest Economist report on unemployment puts at more than 10%:

Euro area 12.1% France 11.0% Greece 27.6% Ireland 13.5% Italy 12.1% Latvia 11.4% Lithuania 10.1% Portugal 16.4% Slovakia 14.0% Slovenia 12.8% Spain 26.3% Hungary 10.2% Poland 13.1% Egypt 13.2% (pre-violence) South Africa 25.6%

Most of these nations celebrate Labor Day, but usually on or around May 1 of each year rather than in September. Each nation’s celebration, often a paid day off, seems to be a bit different in how long they have been celebrated and what the restrictions are.

Unfortunately, the term “high unemployment” is systematically being replaced by “lower total employment.” It is a sign of times, partly due to national demographics and also due to badly run economies that are unable to adapt to a world that quite simply has an overcapacity compared to total demand.

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It is sad to have to ponder such things. It is even more sad to have consider how much a holiday’s name and intent might not be reflective of the world at certain times.

Archer Daniels Midland Company (ADM) Dividend Stock Analysis

Top 10 Canadian Stocks To Invest In 2014

Linked here is a detailed quantitative analysis of Archer Daniels Midland Company (ADM). Below are some highlights from the above linked analysis:

Company Description: Archer-Daniels-Midland Co. is one of the world's leading agribusiness concerns, with major market positions in agricultural processing and merchandising.

Fair Value: In calculating fair value, I consider the NPV MMA Differential Fair Value along with these four calculations of fair value (see page 2 of the linked PDF for a detailed description):

1. Avg. High Yield Price
2. 20-Year DCF Price
3. Avg. P/E Price
4. Graham Number

ADM is trading at a premium to all four valuations above. The stock is trading at a 16.9% premium to its calculated fair value of $30.12. ADM did not earn any Stars in this section.

Dividend Analytical Data: In this section there are three possible Stars and three key metrics (see page 2 of the linked PDF for a detailed description):

1. Free Cash Flow Payout
2. Debt To Total Capital
3. Key Metrics
4. Dividend Growth Rate
5. Years of Div. Growth
6. Rolling 4-yr Div. > 15%

ADM earned one Star in this section for 2.) above. The stock earned a Star as a result of its most recent debt to total capital being less than 45%. The company has paid a cash dividend to shareholders every year since 1927 and has increased its dividend payments for 38 consecutive years.

Dividend Income vs. MMA: Why would you assume the equity risk and invest in a dividend stock if you could earn a better return in a much less risky money market account (MMA) or Treasury bond? This section compares the earning ability of this stock with a high yield MMA. Two items are considered in this section (see page 2 of the linked PDF for a detailed description):

1. NPV MMA Diff.
2. Years to > MMA

The NPV MMA Diff. of the $319 is below th! e $500 target I look for in a stock that has increased dividends as long as ADM has. If ADM grows its dividend at 7.8% per year, it will take seven years to equal a MMA yielding an estimated 20-year average rate of 3.22%.

Memberships and Peers: ADM is a member of the S&P 500, a Dividend Aristocrat, a member of the Broad Dividend Achievers™ Index and a Dividend Champion. The company's peer group includes: Bunge Limited (BG) with a 1.6% yield, Ingredion Incorporated (INGR) with a 2.4% yield and Griffin Land & Nurseries Inc. (GRIF) with a 0.7% yield.

Conclusion: ADM did not earn any Stars in the Fair Value section, earned one Star in the Dividend Analytical Data section and did not earn any Stars in the Dividend Income vs. MMA section for a total of one Star. This quantitatively ranks ADM as a 1-Star Very Weak stock.

Using my D4L-PreScreen.xls model, I determined the share price would need to decrease to $31.24 before ADM's NPV MMA Differential increased to the $500 minimum that I look for in a stock with 38 years of consecutive dividend increases. At that price the stock would yield 2.3%.

Resetting the D4L-PreScreen.xls model and solving for the dividend growth rate needed to generate the target $500 NPV MMA Differential, the calculated rate is 8.9%. This dividend growth rate is lower than the 7.8% used in this analysis, thus providing a margin of safety. ADM has a risk rating of 1.25 which classifies it as a Low risk stock.

ADM is a highly diversified agricultural commodity company with an extensive processing and distribution network. The company is dominant in its industry and creates value by processing crops sourced from farmers in its refineries, and leverages its extensive knowledge of the global market to generates trading revenue. Over time, the company's scale and integration should help it gain market share. ADM should benefit from growing global demand for protein meal and vegetable oil and continued cost reduction. Its business is exposed to volatility in! commodit! y prices.

Currently, ADM's debt and free cash flow payout are well within my acceptable levels. The stock is trading above my calculated fair value of $35.21 and its current yield is below my minimum acceptable level. For now, I will continue to watch from the sidelines for a better opportunity to buy.

Disclaimer: Material presented here is for informational purposes only. The above quantitative stock analysis, including the Star rating, is mechanically calculated and is based on historical information. The analysis assumes the stock will perform in the future as it has in the past. This is generally never true. Before buying or selling any stock you should do your own research and reach your own conclusion. See my Disclaimer for more information.

Full Disclosure: At the time of this writing, I held no position in ADM (0.0% of my Dividend Growth Portfolio). See a list of all my dividend growth holdings my income holdings here.

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Will Tesla Motors Continue This Explosive Run?

With shares of Tesla Motors (NASDAQ:TSLA) trading around $90, is TSLA an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

Tesla Motors designs, develops, manufactures, and sells electric vehicles and electric vehicle powertrain components. The company also provides services for the development of electric powertrain systems and components, and sells electric powertrain components to other automotive manufacturers. It markets and sells its vehicles through Tesla stores, as well as over the Internet. Consumers and companies are looking to save at the pump, and what better way than with electric vehicles? The aesthetically pleasing vehicles that Tesla Motors is producing are easy on the eyes and the pocket. Look for Tesla Motors to see increasing demand and profits, as consumers and companies opt for its vehicles over traditional ones.

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T = Technicals on the Stock Chart are Strong

Tesla Motors stock has seen a consistent uptrend since its initial public offering in 2010. The stock has been exploding higher the last few weeks, which has shot the stock up to all-time high prices. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, Tesla Motors is trading above its rising key averages which signal neutral to bullish price action in the near-term.

(Source: Thinkorswim)

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

	Implied Volatility (IV)	30-Day IV Percentile	90-Day IV Percentile
Tesla Motors Options	72.45%	50%	48%

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

	Put IV Skew	Call IV Skew
June Options	Flat	Average
July Options	Flat	Average

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

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

E = Earnings Are Increasing Quarter-Over-Quarter

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

	2013 Q1	2012 Q4	2012 Q3	2012 Q2
Earnings Growth (Y-O-Y)	113.95%	-1.27%	-66.67%	-66.67%
Revenue Growth (Y-O-Y)	1762.78%	677.88%	-13.13%	-54.19%
Earnings Reaction	24.39%	-8.77%	8.92%	-2.83%

Tesla Motors saw increasing earnings and revenue figures over the last quarter. From these figures, the markets are very excited about Tesla Motors’s recent earnings announcement.

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P = Excellent Relative Performance Versus Peers and Sector

How has Tesla Motors stock done relative to its peers, General Motors (NYSE:GM), Toyota Motor (NYSE:TM), Ford Motor (NYSE:F), and sector?

	Tesla Motors	General Motors	Toyota Motor	Ford Motor	Sector
Year-to-Date Return	166.8%	16.72%	37.93%	16.29%	23.56%

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

Conclusion

Tesla Motors offers aesthetically pleasing electric vehicles during a time where consumers and companies are looking to minimize their footprint and ease the impact on their pockets. The stock has seen an explosive move higher over the last few weeks that has taken it to all-time high prices. Earnings and revenue figures grew dramatically in the recent quarter which has really impressed investors. Relative to its peers and sector, Tesla Motors has led, in year-to-date performance, by a wide margin. Look for Tesla Motors to continue to OUTPERFORM.

5 Stocks With Big Insider Buying

DELAFIELD, Wis. (Stockpickr) – Corporate insiders sell their own companies' stock for a number of reasons.

They might need the cash for a big personal purchase such as a new house or yacht, or they might need the cash to fund a charity. Sometimes they sell as part of a planned selling program that they have put in place for diversification purposes, which allows them to sell stock in stages instead of selling all at one price.

Other times they sell because they think their stock is overvalued and the risk/reward is no longer attractive. Some even dump their own stock because they have inside knowledge that a competitor is eating their lunch and stealing market share.

But insiders usually buy their own shares for one reason: They think the stock is a bargain and has tremendous upside.

The key word in that last statement is "think." Just because a corporate insider thinks his or her stock is going to trade higher, that doesn't mean it will play out that way. Insiders can have all the conviction in the world that their stock is a buy, but if the market doesn't agree with them, the stock could end up going nowhere. Also, I say "usually" because sometimes insiders are loaned money by the company to buy their own stock. Those loans are often sweetheart deals and shouldn't be viewed as organic insider buying.

At the end of the day, its large institutional money managers running big mutual funds and hedge funds that drive stock prices, not insiders. That said, many of these savvy stock operators will follow insider buying activity when they agree with the insider that the stock is undervalued and has upside potential. This is why it's so important to always be monitoring insider activity, but it's twice as important to make sure the trend of the stock coincides with the insider buying.

Recently, a number of companies' corporate insiders have bought large amounts of stock. These insiders are finding some value in the market, which warrants a closer look at these stocks. Here's a look at some stocks where insiders have been doing some big buying in per SEC filings.

Kinder Morgan

One energy player that insiders are buying up a huge amount of stock in here is Kinder Morgan (KMI), which owns interests in an energy transportation and storage company. Insiders are buying this stock into modest strength, since shares are up 2.4% so far in 2013.

Kinder Morgan has a market cap of $37.5 billion and an enterprise value of $71 billion. This stock trades at a premium valuation, with a trailing price-to-earnings of 37.94 and a forward price-to-earnings of 23.03. Its estimated growth rate for this year is 153.1%, and for next year it's pegged at 26.6%. This is not a cash-rich company, since the total cash position on its balance sheet is $1.02 billion and its total debt is a whopping $35.60 billion. This stock currently sports a dividend yield of 4.2%.

The CEO and chairman of the board just bought 500,000 shares, or about $17.86 million worth of stock, at $35.74 a share.

From a technical perspective, KMI is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has been downtrending for the last two months, with shares moving lower from its July high of $40.03 a share to its recent low of $34.82 a share. During that downtrend, shares of KMI have been making mostly lower highs and lower lows, which is bearish technical price action.

If you're bullish on KMI, then I would look for long-biased trades as long as this stock is trending above its 200-day at $36.97, and then once takes out some near-term overhead resistance levels at 50-day at $37.80 a share to more resistance at $38.29 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average action of 4.91 million shares. If we get that move soon, then KMI will set up to re-test or possibly take out its next major overhead resistance levels at $40.03 to $41.06 a share.

Navistar International

 

Another industrial player that insiders are snapping up a large amount of stock in here is Navistar International (NAV), which is a manufacturer of commercial and military trucks buses, diesel engines, and recreational vehicles under the Monaco RV family of brands, as well as a provider of service parts for all makes of trucks and trailers. Insiders are buying this stock into big time strength, since shares are up 67% so far in 2013.

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Navistar International has a market cap of $2.9 billion and an enterprise value of $6.4 billion. This stock trades at a premium valuation, with a forward price-to-earnings of 50.50. Its estimated growth rate for this year is 7.2%, and for next year it's pegged at 107.1%. This is not a cash-rich company, since the total cash position on its balance sheet is $1.09 billion and its total debt is $4.72 billion.

A director just bought 415,101 shares, or about $14.12 million worth of stock, at $33.90 per share.

From a technical perspective, NAV is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock recently started to break out above its sideways consolidation pattern after shares cleared $35 to $35.90 a share. That move is now pushing shares of NAV within range of triggering another near-term breakout trade.

If you're in the bull camp on NAV, then look for long-biased trades as long as this stock is trending above $35 to $34, and then once it breaks out above some near-term overhead resistance levels at $37 to its 52-week high at $38.81 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average action of 1.21 million shares. If that breakout triggers soon, then NAV will set up to enter new 52-week high territory, which is bullish technical price action. Some possible upside targets off that move are $43 to $48 a share.

AXIS Capital

One reinsurance player that insiders are loading up on here is AXIS Capital (AXS), which provides a range of insurance and reinsurance products to insured's and reinsured worldwide operations with main locations in Bermuda, the U.S. and Europe. Insiders are buying this stock into decent strength, since shares are up 25% so far in 2013.

AXIS Capital has a market cap of $4.9 billion and an enterprise value of $5.2 billion. This stock trades at a cheap valuation, with a trailing price-to-earnings of 8.94 and a forward price-to-earnings of 9.27. Its estimated growth rate for this year is 31.1%, and for next year it's pegged at 4.5%. This barely a cash-rich company, since the total cash position on its balance sheet is $1.06 billion and its total debt is $995.55 million. This stock currently sports a dividend yield of 2.4%.

The CEO just bought 176,000 shares, or about $7.47 million worth of stock, at $47.47 per share.

From a technical perspective, AXS is currently trending below its 50-day moving average and above its 200-day moving averages, which is neutral trendwise. This stock recently pulled back sharply from its July high of $48.39 a share to its recent low of $41.87 a share. Following that pullback, shares of AXS have started to find some buying interest right above its 200-day moving average of $41.44 a share. That move is starting to push shares of AXS within range of triggering a near-term breakout trade.

If you're bullish on AXS, then look for long-biased trades as long as this stock is trending above its 200-day at $41.44, and then once it breaks out above some near-term overhead resistance at $43.45 a share to its 50-day at $44.27 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average volume of 856,062 shares. If that breakout triggers soon, then AXS will set up to re-test or possibly take out its next major overhead resistance levels at $46.21 to its 52-week high at $48.39 a share.

Aircastle

One commercial leasing player that insiders are snapping up a big amount of stock in here is Aircastle (AYR), which acquires, leases and sells high-utility commercial jet aircraft to passenger and cargo airlines throughout the world. Insiders are buying this stock into major strength, since shares are up sharply by 38% so far in 2013.

Aircastle has a market cap of $1.4 billion and an enterprise value of $4.4 billion. This stock trades at a reasonable valuation, with a trailing price-to-earnings of 30.36 and a forward price-to-earnings of 9.30. Its estimated growth rate for this year is 118.8%, and for next year it's pegged at 6.9%. This is not a cash-rich company, since the total cash position on its balance sheet is $430.27 million and its total debt is $3.54 billion. This stock currently sports a dividend yield of 3.9%.

A director just bought 60,000 shares, or about $1.04 million worth of stock, at $16.74 per share. This same director also just bought 30,300 shares, or about $520,000 worth of stock, at $17.19 per share.

From a technical perspective, AYR is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending modestly for the last few weeks, with shares moving higher from its low of $16.01 to its intraday high of $17.66 a share. During that uptrend, shares of AYR have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of AYR within range of triggering a big breakout trade.

If you're bullish on AYR, then look for long-biased trades as long as this stock is trending above its 50-day at $16.91, and then once it breaks out above some near-term overhead resistance levels at $17.94 to its 52-week high at $18.12 a share high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average volume of 520,333 shares. If that breakout hits, then AYR will set up to enter new 52-week high territory, which is bullish technical price action. Some possible upside targets off that breakout are $20 to $25 a share.

Apache

One final name with some decent insider buying is Apache (APA), which is an independent energy company that explores, develops and produces natural gas, crude oil and natural gas liquids. Insiders are buying this stock into modest strength, since shares are up sharply by 10.8% so far in 2013.

Apache has a market cap of $33.8 billion and an enterprise value of $46.3 billion. This stock trades at a cheap valuation, with a trailing price-to-earnings of 13.60 and a forward price-to-earnings of 10.94. Its estimated growth rate for this year is -13.8, and for next year it's pegged at -2.4%. This is not a cash-rich company, since the total cash position on its balance sheet is $184 million and its total debt is $12.78 billion. This stock currently sports a dividend yield of 1%.

A director just bought 10,000 shares, or about $861,000 worth of stock, at $86.13 per share.

From a technical perspective, APA is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has been uptrending strong for the last month, with shares moving higher from its low of $75.07 a share to its recent high of $87.76 a share. During that uptrend, shares of APA have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of APA within range of triggering a major breakout trade.

If you're bullish on APA, then look for long-biased trades as long as this stock is trending above some key near-term support at $84, and then once it breaks out above some key overhead resistance levels at $87.76 to $88.43 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average action of 3.46 million shares. If that breakout triggers soon, then APA will set up to re-test or possibly take out its next major overhead resistance levels at $94 to $100 a share.

To see more stocks with notable insider buying, check out the Stocks With Big Insider Buying portfolio on Stockpickr.

-- Written by Roberto Pedone in Delafield, Wis.

RELATED LINKS:

 

>>5 Tech Stocks Spiking on Big Volume

 

>>5 Stocks Setting Up to Break Out

 

>>4 Red-Flag Stocks to Sell This Fall

Follow Stockpickr on Twitter and become a fan on Facebook.

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.

 

Will Disney Continue Its Magical Run in 2013?

All is well in the Magic Kingdom as Disney’s (NYSE:DIS) stock has surged since the beginning of the year—up almost 27 percent in the last six months. The mass media corporation reported impressive second quarter earnings back in May, with CEO Bob Iger citing "the strength of [Disney's] brands and the value of high-quality creative content" as the main catalysts for long-term growth. As we enter into the second half of 2013, will Disney continue to beat the market or is its 'magical' ride over? Let's use our CHEAT SHEET investment framework to decide whether Disney is an OUTPERFORM, WAIT AND SEE, or STAY AWAY.

C = Catalysts for the Stock’s Movement

2012 was a year Disney’s studio entertainment division likely wishes to forget. John Carter was arguably the biggest flop in company history; however, operating income from the company’s third-largest division grew from $84 million in the red to $118 million in Q2 year-over-year — an increase of $202 million. Barring anymore tragedies like John Carter, the future looks bright for Disney’s studio entertainment division. First, Iron Man 3 has just surpased the $1 billion earnings mark, from which Disney should continue to enjoy revenues for the next couple quarters. Second, 2015 will be a huge year for Disney at the box office. Disney recently acquired Marvel and Lucasfilm, and thus, acquired the rights to the wildly popular Star Wars and Avengers films. With the expected releases of Star Wars 7 and Avengers 2, as well as a Finding Nemo sequel in the works, Disney could see revenues of more than $2 billion from movies alone in 2015.

Disney’s media networks generated more than half of the company’s operating income in Q2 2013. ESPN, which comprises 75 percent of media network profits, dominates sports television with flagship programs like SportsCenter, and broadcasting rights on the year’s most viewed sports events. ESPN is relatively well-protected from potential competitors because it already has contracts in place with many professional and collegiate sports associations. Disney Channel also enjoys a unique position and competitive advantage because the company already owns the rights to many beloved characters in the pop culture canon. Company management expects media network profit margins to rise even more over the next several tears as it plans to introduce its namesake channel in more than 100 countries.

T = Technicals Are Mixed

Disney’s stock is currently trading around $63.75, above its 200-day moving average of $58.02, but below its 50-day moving average of $64.67. We can see that Disney has experienced a longer-term uptrend since it is trading above its 200-day moving average. After the stock hit a 52-week high of $67.89 on May 15, there was a slight retracement (a short-term downward correction followed by a return to the previous upward trend). The share price has since moved sideways. Investors should watch closely to see if the stock can break through its 50-day moving average—a good sign that investor sentiment is positive.

E = Earnings, Profit Margins, and Revenues are Increasing

Disney’s EPS numbers have increased in four of the last five quarters. Revenue growth is even more optimistic with five straight quarters of year-over-year sales increases. Additionally, Disney has maintained a steady gross profit margin, which has averaged around 20 percent for the last five quarters. With relatively high barriers to entry in many of Disney's core businesses and its strong brand equity, there is relatively low risk that Disney's strong earnings growth will deteriorate in the medium-term.

	2013 Q2	2013 Q1	2012 Q4	2012 Q3	2012 Q2
EPS YoY Growth	31.75%	-3.75%	17.34%	31.17%	28.58%
Revenue YoY Growth	9.61%	5.21%	3.42%	3.87%	6.08%
Gross Profit Margin	20.80%	18.45%	18.77%	26.70%	17.52%

 

Conclusion

While Disney is trading at a slightly higher price to earnings ratio relative to the S&P 500 (19.40 versus 18.67), its healthy future cash flow potential from both its media networks and its studio entertainment division, as well as its strong positioning in the marketplace, justify its price. Also, 25 percent of Disney's operating profits come from overseas operations, so emerging markets could be a future growth area for Disney. Short-term traders may want to look for a more attractive entry point as Disney is trading near its 52-week high, but for the long-term investor looking to buy an entertainment company, Disney is an OUTPERFORM.