Saturday, August 31, 2013

Does Gold Jewelry Schemes really benefit the buyers?

Gold is one of the most important parts of an Indian's life while it comes to glorifying any type of festival or occasion. It is a matter of concern for lots of Indian families now that gold price has surged continuously to such a point where it becomes difficult to buy gold. Perceiving the difficulty of Indians, various companies have come up with gold jewelry schemes to lure the jewelry buyers. The gold jewelry companies offer schemes like out of 12 installments pay for just 11 installments and rest one installment would be paid by the company. You'll own the gold jewelry after the completion of the tenure.

Mrs. Sunita from Delhi wanted to buy 20 grams gold for investment, but she had less money to spend. The jeweler offered a scheme under which she could buy the gold jewelry after one year at a prevailing market rate after paying 12 monthly installments. She also got the offer that the 12th installment would be paid by the jeweler himself after she completes the 11 installment on time. It means for Rs 60000 jewelry, she had to pay Rs 55000 in 11 months, and Rs 5000 will be paid by the jeweler. She thought it was a good option as anyways, she wanted to buy the gold for investment; here she would get the jewelry which would be even better as she can put it on for parties.

Benefit of Gold Jewelry Scheme
The only benefit that a buyer gets in this type of scheme is buying in installments and keeping money intact for this objective. From a buyer's point of view, this type of scheme has more to lose than to gain.

Why not to buy gold under the jewelry scheme?
Following are the limitations of buying gold through this scheme:

Details Gold Jewelry Gold Biscuit
Quantity 10 Grams 10 Grams
Purity 22 K 24 K
Making Charges Up to Rs 30/Gram Nil
Resale Value Lower due to impurity Full Return Value




The installment paid, can be used only to buy the jewelry, and it cannot be redeemed against gold biscuit or coins. The jewelry also carries the making charges, and its purity is lesser than the biscuit or coin. So if we compare 10 grams gold biscuit to gold jewelry, then buyer would gain if he chooses the gold biscuit. Let's check the comparison:

The buyer is under an obligation to the seller to purchase the gold at the prevailing market rate. If at the time of booking jewelry, the gold rate is Rs 2800/gram but after the completion of installments, the rate increased to Rs 3000/grams, then buyer has to pay Rs 2000 extra for every 10 grams due to change in price of gold.

If the main purpose of a buyer is to invest, then buying jewellery is not a wise choice. The jewelry is not made of 24 carat gold, and it also carries some making charges, so the return value of jewellery would be much less when compared to gold coin, biscuit or bars.

Other attractive options to buy gold in installments
The buyers have many other options to buy gold at a cheaper cost and at a better quality. Some of the options include:

If the buyer wants to buy gold after 12 months under the installment pattern, then it would be a better option if he buys Gold ETF in the stock market every month and averages out the inconsistency. He can also buy it in E-Gold format (National spot exchange) where he can buy as low as 1 gram gold. After 12 months, he can sell the gold in electronic form and buy the gold jewellery from the proceedings, or if he wants to carry it longer then he can keep it in the DEMAT A/c.

If the buyer wants to invest in a coin or bar, then he also has the option to put the money every month in a recurring deposit account for 12 months and earn interest on the money and buy gold with the maturity proceedings.
The basic flaw in the gold jewelry scheme is that jewelers not only earn interest on the buyer's installment but also sell the jewelry after earning a handsome margin. For 20 grams gold jewelry, he earns Rs 600 making charge and sells 22 carat gold at rate of 24 carat gold. So he earns approx 8% extra by selling gold of 22 carat purity.

For jewelers, this scheme is a win-win situation as he gets the chance to sell his product, and at the same time he earns interest on the customer's installment whereas buyers, who cannot distinguish whether they are buying gold as jewellery or as an investment, are always set to lose out in this type of deal.

Content partner: is an online marketplace where you can instantly get the lowest loan rates , compare and apply online for your personal loan , home loan , car loan and credit card from India's leading banks and NBFCs.

Friday, August 30, 2013

Five Compelling Reasons to Allocate to Emerging Markets: Brandes Investments

Many investors are hesitant to allocate a portion of their portfolio to emerging markets, in part due to perceived high risks. Although historically these risks may have presented a barrier, the situation has changed dramatically over the past decade. Emerging markets are no longer the uncharted markets they were in the past—they are advancing economies with growth opportunities and continually improving economic and political conditions.

Emerging markets may be an attractive investment opportunity now for five compelling reasons:

1. ECONOMIC GROWTH. Emerging markets are growing at a faster rate than developed markets.
2. CORPORATE STRENGTH. Corporations are becoming stronger and more competitive.
3. WEALTHY CONSUMERS. Middle-class consumers are becoming richer and spending more.
4. IMPROVED POLICIES. Inflation and government debt are manageable; corporate governance is improving.
5. A WINDOW OF OPPORTUNITY. Valuations appear attractive.

1. Economic Growth


Twenty years ago, emerging markets represented only 19% of global gross domestic product (GDP); today they account for 36%1—and are expected to increase even more in the next few years, as shown in Exhibit 1. Exhibit 2 shows how quickly GDP is growing in emerging markets, and it is expected to continue to grow at a faster rate than advanced economies.

This growth in GDP has lifted the market cap for emerging markets from approximately 6% of the world's total to 13%2 since 2004. If GDP continues to grow as expected, the market cap for emerging markets is likely to grow as well, potentially opening up even more investment opportunities.

2. Corporate Strength

Companies are becoming stronger and more competitive.

Companies in emerging markets are becoming stronger and better able to compete with companies in developed regions.

• Industrial production growth for companies in emerging markets ! has outpaced developed companies every year for the past decade.3
• Corporate balance sheets and profitability have been improving, and growth in shareholders' equity has significantly outpaced net debt. And year-over-year earnings growth has been close to or greater than 20% every year in the past decade (except for the two recessions in 2002 and 2008).4

You may not be familiar with companies in emerging markets, but there are many large companies there with successful track records and a broad client base. China Mobile (CHL), for example, is the largest telecommunications company in emerging markets, and has more than 600 million clients worldwide—six times the number of Verizon (VZ) mobile customers!5 Businesses like China Mobile may not be as well-known as Verizon here at home, but there are many well-established companies across emerging markets with a vast—and growing—client base.

3. Wealthy Consumers

Middle-class consumers are becoming richer and spending more.

Consumer spending in emerging markets is expected to continue to grow because:

• Emerging markets represent a large percentage of the global population. Consumers in emerging markets account for 86% of the world's population, and emerging-market populations are growing at a faster rate than developed nations.6
• Individuals have become wealthier. In the past decade alone, wealth has improved over five-fold, leading to increased spending.7
• Consumers have excess cash. Emerging-market consumers have a large portion of their wealth in savings,8 leaving significant room for discretionary spending.

This expected increase in spending will likely fuel growth of the companies in emerging markets (and for companies in developed regions that market to emerging-market consumers), potentially leading to increased investment opportunities. The automobile industry is one example: consumers in emerging countries are now purchasing more vehicles than consumers in developed nations, as ill! ustrated ! in Exhibit 3.

4. Improved Policies


Emerging-market countries are catching up with—and in some instances surpassing—the rest of the world, reining in inflation, government debt and enhancing corporate governance.

Inflation Inflation has historically been a major deterrent to investing in emerging markets; memories of triple-digit inflation still haunt some wary investors.

But the majority of emerging-market countries have made remarkable progress in recent years, and may no longer merit the reputation of uncontrolled inflation. Average inflation rates have declined to close to 6%, and inflation rates have tended to mirror those in developed markets over the past decade, as indicated in Exhibit 4. Decreased debt levels, flexible policy rates, and more stringent monetary controls may continue to help minimize inflation going forward.

Declining sovereign debt levels

While many developed nations (United States, Spain, Italy, France, etc.) have received credit-rating downgrades, ratings in emerging markets have been improving. As a percentage of GDP, aggregate government debt for emerging countries is less than 40% while for developed nations it is more than 100%.9

Improving corporate governance and disclosure

Companies in emerging markets are becoming more transparent, and accountability to the public is improving. In December 2000, financial reporting for companies representing less than 5% of emergingmarket total market capitalization conformed to IFRS or GAAP standards—10 years later that has grown to more than 40%.10 This means easier access to reliable financial information on companies.

5. Window of Opportunity

Emerging-market stock prices appear attractive when compared to estimates of what companies are actually worth (based on measurements like earnings and cash flow)—both compared to a year ago, and compared to home markets a! nd global! developed markets. And, the MSCI Emerging Markets Index is yielding a higher dividend yield than 12 months ago—and higher than the S&P 500 Index and MSCI World Index!

Understanding valuations: what are price ratios?

Price ratios are one of the ways investment managers and industry professionals measure how cheaply (or expensively) a stock is trading compared to fundamental characteristics of the company, such as earnings, book value and cash flow.

For example, the price-to-earnings ratio (P/E) is the current stock price divided by earnings per share. A lower P/E (compared to the index or another stock) means a stock may be affordable relative to its earnings.


When selecting your emerging-market manager, look for:

• A flexible portfolio that allows for diversification across many countries, industries and market caps: many attractive opportunities in emerging markets may be found in frontier markets and smaller companies

• An investment team with a wealth of experience in emerging markets

• Proven long-term track record with a clearly defined, repeatable investment process

1 Source: MSCI ACWI via FactSet
2 Source: MSCI ACWI via FactSet
3 Sources: IMF, Haver, CEIC, UBS as of 8/3/2011
4 Sources: GEM Inc., UBS estimates as of 7/31/11 and MSCI, UBS Estimates as of 8/3/11
5 Sources: China Mobile and Verizon Wireless as of 1/31/2012
6 Source: OECD as of 11/28/2011
7 Sources: World Bank, IMF, BIS, Haver, CEIC, UBS as of 8/31/2011
8 Sources: Bank of America, Merrill Lynch Global Equity Strategy, Haver, IMF
9 Source: IMF as of November 1, 2011
10 Source: MSCI via Factset as of 12/31/2011
Price/Book: Price per share divided by book value per share.
Price/Earn: Price per share divided by earnings per share.
Price/CF: Price per share divided by cash flow per share.

Price/Book: Price pe! r share d! ivided by book value per share.
Price/Earn: Price per share divided by earnings per share.
Price/CF: Price per share divided by cash flow per share.
Price/Sales: A company's market capitalization divided by its total sales over the past 12 months.

The MSCI Emerging Markets Index with gross dividends is an unmanaged, free float-adjusted market capitalization index that is designed to measure equity market performance of emerging markets. The MSCI Emerging Markets Index consists of 21 emerging market country indices. This index includes dividends and distributions, but does not reflect fees, brokerage commissions, withholding taxes, or other expenses of investing. One cannot invest directly in an index.

The S&P 500 Index with gross dividends is an unmanaged, market capitalization weighted index that measures the equity performance of 500 leading companies in leading industries of the U.S. economy. The index includes 500 leading companies in leading industries of the U.S. economy, capturing 75% coverage of U.S. equities. This index includes dividends and distributions, but does not reflect fees, brokerage commissions, withholding taxes, or other expenses of investing. The MSCI World Index with net dividends is an unmanaged, free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets. The MSCI World Index consists of 24 developed market country indices. This index includes dividends and distributions net of withholding taxes, but does not reflect fees, brokerage commissions, or other expenses of investing.

The foregoing reflects the thoughts and opinions of Brandes Investment Partners® exclusively and is subject to change without notice. The information provided in this material should not be considered a recommendation to purchase or sell any particular security. It should not be assumed that any security transactions, holdings, or sectors discussed were or will be profitable, or that the investmen! t recomme! ndations or decisions we make in the future will be profitable or will equal the investment performance discussed herein. Portfolio holdings and allocations are subject to change at any time. Strategies discussed herein are subject to change at any time by the investment manager in its discretion due to market conditions or opportunities. Indices are unmanaged and are not available for direct investment. Market conditions may impact performance. Diversification does not assure a profit or protect against a loss in a declining market. International and emerging markets investing is subject to certain risks such as currency fluctuation and social and political changes; such risks may result in greater share price volatility.

Brandes Investment Partners® is a registered trademark of Brandes Investment Partners, L.P. in the United States and Canada.

Best Performing Stocks To Own For 2014

Thursday, August 29, 2013

Mondelez's Vietnam Training Center - Analyst Blog

Mondelez International, Inc. (MDLZ) recently announced the opening of a farmer training center in Vietnam to help coffee farmers improve the productivity and quality of their crop. This will ensure high quality coffee beans for iconic brands such as Jacobs, Carte Noire and Kenco of Mondelez, one of the largest buyers of coffee in Vietnam.

The training center is the first project under Mondelez's $200 million "Coffee Made Happy" sustainability program. The program aims to train around 1500 farmers and supports Mondelez's goal to buy 100% ethically sourced coffee in Western Europe by 2015. The packaged food company plans to invest more than $1 million in Vietnam and Indonesia over the next two years to support the plan.

Mondelez's Vietnam investment comes on the heels of similar efforts by the coffee giant, Starbucks Corporation (SBUX) earlier this year. In March, Starbucks purchased a 240-hectare coffee plot in Costa Rica with plans to convert it into a global agronomy research and development center. The farm will be used to grow new blends of coffee and support Starbucks' billion-dollar commitment to buy 100% ethically sourced coffee by 2015.

Mondelez carries a Zacks Rank #3 (Hold) as the company is still in a transitional stage and it is likely to take some time to stabilize. Mondelez emerged from a split of Kraft Foods, Inc last year when the latter was demerged into two companies– Mondelez and Kraft Foods Group (KRFT). Kraft Foods Group consists of the North American grocery business of the old Kraft Foods while Mondelez handles the latter's snack business, which includes brands like Cadbury and Toblerone chocolates.

Another consumer staple stock that is worth a look is Flower Foods Inc. (FLO), carrying a Zacks Rank #1 (Strong Buy).

Wednesday, August 28, 2013

Oil Stocks are Winning…But Will Their Outperformance Last?

August has been a downer for stocks but if anyone can be called a winner this month it’s the energy sector, and more specifically oil stocks.

Associated Press

The Energy Select Sector SPDR ETF (XLE) has gained 1.5% to $82.34 today, by far the best performance of any sector in the S&P 500. It’s lost 0.1% in August, but that too counts as a victory when every other sector has lost between the Materials Select Sector SPDR ETF’s (XLB) 0.2% loss and the Consumer Staples Select Sector SPDR’s (XLP) 5% drop. The S&P 500 has fallen 2.9%.

Oil and energy stocks are among the best performing stocks in the S&P 500 this month as well. Pioneer Natural Resources (PXD), for instance, has gained 13% to $175.42 in August, while Chesapeake Energy (CHK) has jumped 13% to $26.36. Halliburton (HAL), meanwhile, has gained 8.7% to $49.07. All three are among the top-ten gainers in the S&P 500.

The energy sector is, of course, getting a boost from rising oil prices, which have been spurred higher by fears that the war in Syria would spread and disrupt production in the Middle East. WTI crude futures have gained d0.9% to $109.97 a barrel today, and 4.7% in August as the violence in Syria escalates. Can the rise continue? Raymond James analyst Pavel Molchanov’s not so sure:

We have seen this fear before – in 2003, and again in 2011. The historical parallels are not perfect, but they are close. In the run-up to the invasion of Iraq in 2003, oil prices were in a steady uptrend, as shown in the first chart on page two. Prices peaked a few days before the invasion began on March 20 and continued to slide thereafter. Sixty days after the invasion, prices were 23% lower than at the peak. A similar pattern can be seen in the case of the NATO intervention in Libya. While it's hard to isolate Libya from the broader turmoil of those early days of the Arab Spring, the second chart on page two shows the oil market's panic in February and March of 2011. After NATO airstrikes began on March 19, prices kept rising for another month but then rolled over sharply. After the sixty-day interval, prices were 14% lower than at the peak.

By my own accounting, the Energy Select Sector SPDR fell about 4.9% in the sixty trading days following the beginning of the airstrikes on Libya.

Sunday, August 25, 2013

Why The Skeptics Are Dead Wrong About Intel

Even the best companies have their skeptics.

If you're a regular reader of StreetAuthority, you've probably seen me recommend chip-manufacturer Intel (Nasdaq: INTC) before. In fact, I've even hailed it as one of the "10 Best Stocks to Hold Forever," as the company contains three key market-beating traits and a few future growth catalysts, which I'll show you in a moment.

Understandably, many investors are not just skeptical of Intel's prospects -- they are outright bearish on the stock's future prospects. This email from one of my Top 10 Stocks subscribers outlines some of that skepticism:

"I am a new subscriber and novice investor. I appreciate your research, knowledge and acumen in your approach to purchasing equities, but I do have a question regarding your consistent recommendation of Intel.

"Other than the tremendous amount of cash that the company hordes, how can you recommend this purchase when PC sales are down 11% worldwide? I don't see a lot of growth potential with Intel in the foreseeable future. Thank you in advance."


Off the bat, Intel's consistent policy of buying back stock and paying a generous dividend are two major reasons for purchasing the stock.

As I explained in a recent essay about "shareholder yield," companies that have a history of buying back stock and paying dividends have outperformed the stocks that don't. 

For example, in Mebane Faber's book on shareholder yield, Mebane cites a study by Dartmouth University Prof. Kenneth French that covers all U.S. stocks from 1927 to 2010. Professor French sorted all U.S. stocks into high, low and zero dividend yield portfolios. He found that the high-yield and low-yield portfolios had an average annualized return of 11.2% and 9.1%, respectively. That's compared to just an 8.4% annualized return for the zero-yield basket of stocks.

And as I wrote in that same essay, companies that buy back their own stock are market beaters as well. 

A study of the top quarter of stocks in the S&P 500 ranked by buyback yield -- the value of net shares repurchased divided by market capitalization -- between 1982 and 2011 shows that the high-buyback firms generated annualized gains of 13.19% compared with 10.96% for the S&P 500. By contrast, stocks with the lowest buyback yield significantly underperformed the index, generating annualized gains of just 9.62% over the same holding period.

I've also explained in the past just how important R&D spending is for a company's future success. In a stock screen dating back to April 1993, I found unequivocally that innovative market leaders with a history of consistent spending on R&D and returning capital to shareholders have outperformed the broader market by a roughly 3-to-1 ratio over the past 20 years.

Just look at how much $10,000 would have grown in companies that have traits similar to these compared to the broad market over that time:

Intel has all three of these market-beating traits with a two-decades-long history of a) repurchasing its own shares, b) paying an ever-growing dividend and c) a history of consistent spending on R&D. And I'm confident it will continue using these practices well into the future. That's why it's on my list of Forever Stocks.

As of today, Intel offers a 4% dividend yield and has $4.2 billion available for future share repurchases which will help support the stock price going forward. And for the record Intel has repurchased about $90 billion of its own stock -- or 4.3 billion shares -- since 1990.

These are big reasons why its stock has returned over 2,590%, including dividends, since 1990.

From a fundamental standpoint, continued weakness in personal computer (PC) sales has been a headwind for Intel over the past year as the company has traditionally dominated the manufacture of processors for PCs. Unfortunately, Intel has not traditionally held a strong position in chips for tablets and smartphones, both markets that have seen extraordinary growth even as PC sales have languished.

But the second half of 2013 holds several upside catalysts for Intel. First, the company plans to launch a new processor that's cheaper to produce and should extend battery life in laptops. This chip could help to revive the ultrabook segment and boost Intel's sales. In addition, the firm's Bay Trail chip will power tablets that run Google's Android operating system, giving the company exposure to a rapidly growing market segment.

Don't underestimate a market dominator, either. Intel retains a more than 90% market share in chips used in servers. Demand for servers has been growing, powered in part by demand for servers at data centers. More data centers will need to be built in coming years to handle the increased Internet traffic caused by new trends such as cloud computing.

Finally, Intel is cheap trading at just over 12 times 2013 earnings forecasts. Expectations aren't high for the stock and analysts have downgraded their forecasts after the company's weak quarterly results released last month. But as a value play, it won't take much of an upside catalyst to send shares of Intel sharply higher. 

Hot Oil Companies To Invest In 2014

P.S. -- As I mentioned before, Intel belongs to a special group of investments I call Forever Stocks. These are world-dominating companies that pay investors a healthy and growing dividend, dig a deep moat around their business to fend off competitors and buy back massive amounts of stock -- which drives up value for the rest of the shares. The idea behind these stocks is simple: buy them and collect the growing value and dividend income they throw off every year. To get my report, "The 10 Best Stocks To Hold Forever," and get access to my Top 10 Stocks newsletter, go here.

Saturday, August 24, 2013

M&A Roundup: United Capital Acquires Atlanta-Based PPA Advisors

In a busy week for mergers and acquisitions in the advisor space, United Capital continued its expansion into the Atlanta market with its purchase of a large stake in PPA Advisors. Also in M&A news, Envestnet completed its acquisition of Prudential WMS and Madison Dearborn Partners completed its NFP deal.

Here are the three latest advisor acquisitions:

1) United Capital Continues Atlanta Expansion With Stake in PPA Advisors

On Monday, fast-growing private wealth counseling firm United Capital Financial Advisers of Newport Beach, Calif., announced that it had bought the majority of the assets of Atlanta-based PPA Advisors. Founded in 1986, PPA Advisors is the second firm in Georgia to join United Capital in less than a year as the acquiring firm broadens its footprint in the Southeast by integrating established registered investment advisors into its national RIA platform.

PPA Advisors brings $224 million under management and an additional $122 million under advisement, along with a team of nine professionals, to United Capital. The office will be immediately rebranded as United Capital and managed under the leadership of four managing directors, all of whom are certified financial planners: Ross Ramsey, R. Corley Watson III, Randy Berry and Charles “Rocky” Costa III.

As of June 11, United Capital and its affiliates had approximately $17 billion in assets under advisement.

“We knew that by joining United Capital, we could create more value for our clients and gain a new dimension of financial planning, technology and investment resources from which our clients can benefit,” Ramsey said in a statement. “We have been welcomed into one of the most innovative financial advisory firms in the country, and look forward to being in a position to spend more time on what matters most—our interaction and dialogue with clients.”

Hot Penny Companies To Own In Right Now

United Capital will assist Ramsey and his fellow managing directors with operating structure and back-office needs. The opportunity to bring the Honest Conversations toolkit into the client wealth planning process was a big motivation for aligning with United Capital.

Read more about United Capital CEO Joe Duran in Cup of Joe: Starbucks. Financial Advice. Together at Last at AdvisorOne.

2) Envestnet Completes Acquisition of Prudential Wealth Management Solutions

Envestnet on Monday announced that it has completed the purchase of the Wealth Management Solutions (WMS) division of Prudential Investments. The $33 million deal allows Chicago-based Envestnet to further build out its wealth management technology and services platform for investment advisors.

Envestnet acquired the assets of Prudential WMS for $10 million in cash upon closing, plus contingent consideration of up to a total of $23 million in cash to be paid over three years.  Once the integration is implemented, Prudential WMS advisors and its primarily institutional client base will gain the benefits of Envestnet's “scalable” wealth management platform, manager research and broad product access, according to an Envestnet release.

“This combination of Envestnet's best-in-class technology and WMS' practice management leadership will help banks and bank trust departments of all sizes realize the full benefits of our unified and scalable wealth management platform,” said Envestnet Chairman and CEO Jud Bergman in a statement.

Bergman discussed the acquisition of Prudential WMS in an Investment Advisor magazine 2013 IA 25 profile, noting that most of Envestnet’s new advisor and enterprise relationships “are some kind of a conversion from a legacy” business model.

Prudential WMS, with approximately 90 employees, has more than 30 years of experience helping financial services firms develop their wealth management offerings.

Kevin Osborn, executive vice president and director of Prudential WMS, will join Envestnet as executive vice president to lead the new Bank and Bank Trust sales channel. As of March 31, Prudential WMS administered approximately $23.7 billion on behalf of institutional clients. 

3) Madison Dearborn Partners Completes NFP Acquisition

National Financial Partners Corp. (NFP) announced Monday the successful completion of its acquisition by a controlled affiliate of Madison Dearborn Partners, a private equity investment firm headquartered in Chicago. NFP is a New York-based provider of benefits, insurance and wealth management services.

NFP stockholders will receive $25.35 in cash for each share of NFP common stock they own, in a transaction with an equity value of approximately $1.3 billion, which includes the full value of NFP’s convertible debt, according to the terms of the previously announced merger agreement.

The stockholders voted to approve the transaction at a special meeting held on June 19. With the firm now under private ownership, NFP’s common stock will no longer be listed or traded on the New York Stock Exchange.

The Madison Dearborn acquisition was announced on April 15. NFP on May 20 announced that President and COO Douglas Hammond would succeed Chairman and Chief Executive Jessica Bibliowicz as CEO. Bibliowicz is the daughter of former Citigroup CEO Sandy Weill. The firm released its first-quarter 2013 earnings on May 3, reporting net income of $4.2 million, or $0.09 per share, down from $5.6 million, or $0.13 per share, in the prior-year period.

Since Madison Dearborn's formation in 1992, the firm has raised six funds with aggregate capital of more than $18 billion and has completed approximately 125 investments. Madison Dearborn invests in businesses across a broad spectrum of industries, including financial and transaction services, among others. Noteworthy investments include CapitalSource, Nuveen Investments, PayPal, T-Mobile USA and TransUnion.


Check out National Financial Partners Acquired by Madison Dearborn on AdvisorOne.

Friday, August 23, 2013

Hot Cheap Companies To Watch In Right Now

The StressTest column appears every Thursday on Check back weekly, and follow�@TMFStressTest�on Twitter.

Stocks are cheap. No, really. They're very,�very�cheap.

If you ask the right people, you'll hear that stocks are cheap because the equity risk premium has skyrocketed. Just check out this nifty chart from the New York Federal Reserve Bank's Liberty Street Economics blog.

Source: Liberty Street Economics.

"Now, back up a minute," you may be saying. "What is this equity risk premium you speak of?"

I'm glad you asked. The equity risk premium measures the implied additional returns that investors get for investing in stocks as opposed to putting their money in an instrument that delivers the "risk-free rate" -- often assumed to be U.S. Treasuries. If, for example, the�S&P 500's (SNPINDEX: ^GSPC  ) price-to-earnings ratio (P/E) was 15 -- and, therefore, the earnings yield was 6.7% -- and the risk-free rate was 3%, then we could say that the equity risk premium was 3.7%. (That's not the primary or only way to calculate the equity risk premium; I just used it for ease of illustration.)

Hot Cheap Companies To Watch In Right Now: MetroPCS Communications Inc.(PCS)

MetroPCS Communications, Inc., a wireless telecommunications carrier, together with its subsidiaries, provides wireless broadband mobile services in the United States. Its services include voice services, such as local, domestic long distance, and international call services; and data services, including domestic and international text messaging, multimedia messaging, mobile Internet access, mobile instant messaging, location based services, social networking services, push e-mail, and multimedia streaming and downloads, as well as services provided through the binary runtime environment for wireless (BREW), Blackberry, Windows, and the Android platforms, including ringtones, ring back tones, games, and content applications. The company also offers custom calling features consisting of caller ID, call waiting, three-way calling, and voicemail services. In addition, it sells mobile handsets. The company offers its products and services under the MetroPCS brand name, directl y through the company-operated retail stores and indirectly through independent retail outlets, as well as through Internet. As of December 31, 2010, it served approximately 8.1 million subscribers, as well as operated 159 retail stores primarily in the metropolitan areas of Atlanta, Boston, Dallas/Fort Worth, Detroit, Las Vegas, Los Angeles, Miami, New York, Orlando/Jacksonville, Philadelphia, Sacramento, San Francisco, and Tampa/Sarasota. The company is headquartered in Richardson, Texas.

Advisors' Opinion:
  • [By Larry Gellar]

    Although this company is known in some circles for its poor phone service, PCS stock has seen some serious gains in the past 12 months. In fact, look for this trend to continue when earnings are announced on August 2. Much smaller than AT&T (T) and Verizon (VZ), MetroPCS best compares with Sprint Nextel (S). With an operating margin of 16.79 compared with Sprint Nextel’s 0.15%, it’s clear that MetroPCS is better suited for future growth. Gross margin and PEG are also favorable for MetroPCS, currently 42.69% and 1.36 respectively. For another great Seeking Alpha article on cell phone companies, consider reading this. Perhaps the most important point raised is that Sprint Nextel’s purchases of Virgin Mobile and Boost Mobile pose a serious threat to MetroPCS. These companies will fight MetroPCS for the low-end cell phone market and may come out on top due to incr easing problems with MetroPCS’s call quality. Essentially, MetroPCS’s problem is that although it offers unlimited talk, text, and web, these features don’t actually work very well. The future success of this company is highly dependent on an improvement in quality as existing customers continue to get fed up. Luckily for MetroPCS, Sprint seems to be having a setback with its 4G service.

Hot Cheap Companies To Watch In Right Now: Ford Motor Credit Company(F)

Ford Motor Company primarily develops, manufactures, distributes, and services vehicles and parts worldwide. It operates in two sectors, Automotive and Financial Services. The Automotive sector offers vehicles primarily under the Ford and Lincoln brand names. This sector markets cars, trucks, and parts through retail dealers in North America, and through distributors and dealers outside of North America. It also sells cars and trucks to dealers for sale to fleet customers, including daily rental car companies, commercial fleet customers, leasing companies, and governments. In addition, this sector provides retail customers with a range of after-sale vehicle services and products in the areas, such as maintenance and light repair, heavy repair, collision repair, vehicle accessories, and extended service contracts under the Ford Service, Lincoln Service, Ford Custom Accessories, Ford Extended Service Plan, and Motorcraft brand names. The Financial Services sector offers vari ous automotive financing products to and through automotive dealers. It offers retail financing, which includes retail installment contracts for new and used vehicles; direct financing leases; wholesale financing products that comprise loans to dealers to finance the purchase of vehicle inventory; loans to dealers to finance working capital, purchase real estate dealership, and/or make improvements to dealership facilities; and other financing products, as well as provides insurance services. Ford Motor Company was founded in 1903 and is based in Dearborn, Michigan.

Advisors' Opinion:
  • [By David Sterman]

    This automaker has executed a remarkable turnaround. After flirting with bankruptcy a few years ago, major cost cuts — coupled with an outstanding lineup of new vehicles — has put Ford back on the road to health.

    Shares rose nearly 1,000% from 2008 to early 2011 but have since pulled back by a considerable amount. For long-term investors, the pullback is a great entry point, as Ford’s best days still lie ahead.

    The company is earning around $2 a share every year even as the auto industry posts sales levels well below prior peaks. Industry analysts expect auto and truck sales to rise higher in the next few years, which should help Ford to generate even stronger profits.

Top Value Companies To Watch In Right Now: Emerson Electric Company(EMR)

Emerson Electric Co. operates as a diversified manufacturing and technology company. The company engages in appliance solutions, climate technologies, industrial automation, motor technology, network power, process management, professional tools, and storage solutions businesses. Its appliance solutions business provides appliance controls, appliance motors, heating products, and white-rodgers; climate technology business provides heating, ventilation, air conditioning, and refrigeration (HVACR) solutions for residential, industrial, and commercial applications; and industrial automation business offers bearings and power transmission products, electrical power generation products, electric motors, variable speed drives and servos, electrical products, material joining solutions, fluid automation products, and wind turbine systems. The company?s motor technology business provides appliance motors, HVACR motors, DC motors, fractional horsepower motors, integral horsepower a nd larger motors, and drives; network power business provides power, precision cooling, connectivity, and embedded solutions; and process management business provides various wireless related products from self-organizing field networks to wireless asset and people tracking. Its professional tools business offers pipe working and threading equipment, pressing technology, utility locating and visual diagnostics systems, drain maintenance tools, power tools, air tools, general purpose hand tools, wet/dry vacs, job site storage equipment, truck tool boxes and equipment, and van storage equipment; and storage solutions business provides shelving and storage products for residential, commercial, and foodservice needs, as well as offers specialized carts, mobile computer workstations, and cabinet fixtures. The company was founded in 1890 and is headquartered in St. Louis, Missouri.

Advisors' Opinion:
  • [By Larry Gellar]

    Similar to Archer Daniels Midland above, Emerson Electric saw 52-week highs in February but has been down since to a current price of below $50. From a valuation perspective, Emerson is quite attractive – notably P/E and PEG are 15.55 and 0.99 respectively. This is lower than competitors like ABB (ABB) and Hitachi (HIT), and Emerson’s margins are also better than those companies. Specifically, Emerson currently has a gross margin of 39.58% and an operating margin of 17.04%. Aside from the companies listed above, this also beats out General Electric (GE), which has 36.79% and 11.15% for those same numbers respectively. On the other hand, there are also some concerns to be had with EMR. Total cash flow for the past 3 quarters has been a whopping negative $1.8 billion. Shareholders have also been wary of the company’s willingness to take on additional debt. Upcoming earnings for EMR have already been guided downward, and it seems likely that the stock price will fall once the actual results are posted. The wisest thing may be to wait for the stock to bottom out after earnings and then buy it before it creeps back upward. Some investors may find EMR attractive for its dividends; yield is currently at 2.8%.

Hot Cheap Companies To Watch In Right Now: Freeport-McMoran Copper & Gold Inc.(FCX)

Freeport-McMoRan Copper & Gold Inc. engages in the exploration, mining, and production of mineral resources. The company primarily explores for copper, gold, molybdenum, silver, and cobalt. It holds interests in various properties, located in North and South America; the Grasberg minerals district in Indonesia; and the Tenke Fungurume minerals district in the Democratic Republic of Congo. As of December 31, 2010, the company?s consolidated recoverable proven and probable reserves totaled 120.5 billion pounds of copper, 35.5 million ounces of gold, 3.39 billion pounds of molybdenum, 325.0 million ounces of silver, and 0.75 billion pounds of cobalt. The company was founded in 1987 and is headquartered in Phoenix, Arizona.

Advisors' Opinion:
  • [By Roberto Pedone]

    One integrated mining player that insiders are buying up a huge amount of stock in here is Freeport-McMoRan Copper & Gold (FCX), which deals in the mining of copper, gold and molybdenum. Insiders are buying this stock into weakness, since shares are off by 17.5% so far in 2013.

    Freeport-McMoRan Copper & Gold has a market cap of $27.5 billion and an enterprise value of $50.2 billion. This stock trades at a cheap valuation, with a trailing price-to-earnings of 9.95 and a forward price-to-earnings of 8.92. Its estimated growth rate for this year is -23.9%, and for next year it's pegged at 27.8%. This is not a cash-rich company, since the total cash position on its balance sheet is $3.29 billion and its total debt is $21.22 billion. This stock currently sports a dividend yield of 4.3%.

    A director just bought 517,350 shares, or about $14.82 million worth of stock, at $28.64 per share.

    From a technical perspective, FCX is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has been downtrending over the last five month, with shares dropping from its high of $33 to its recent low of $26.07 a share. Shares of FCX recently formed a double bottom chart pattern at $26.04 to $26.07 a share. Following that bottom, this stock has trended higher to $30.14 a share, but it just failed to hold above its 50-day at $28.60 a share.

    If you're bullish on FCX, then I would look for long-biased trades as long as this stock is trending above some near-term support levels at $27 to $26 and then once it takes out its 50-day at $28.60 a share with high volume. Look for a sustained move or close above its 50-day with volume that hits near or above its three-month average action of 17.31 million shares. If we get that move soon, then FCX will set up to re-test or possibly take out its next major overhead resistance levels at $30.14 to $32 a share.

Friday, August 16, 2013

Best Growth Companies To Invest In Right Now

The following video is from Wednesday's installment of The Motley Fool's�Weekly Tech Review, in which host Chris Hill, and analysts Eric Bleeker and Lyons George look at the biggest stories driving the tech sector this week.

In this segment, Eric and Lyons discuss Apple's challenges in Europe. Recent research from Kantar Worldpanel shows the iPhone picking up market share gains in the United States. Over the past three months ending in May, 41.9% of all smartphones sold in the United States were iPhones. That compares with 38.5% in the comparable period from the previous year. That growth rate is above Android, which saw flat market share in the United States year over year.�

In Australia, the iPhone saw nearly flat market share year over year but still maintained 28.5% of all smartphone sales. Even in urban China, its share stands at an impressive 23.6%.�

Best Growth Companies To Invest In Right Now: Checkpoint Systms Inc.(CKP)

Checkpoint Systems, Inc. manufactures and markets identification, tracking, security, and merchandising solutions for the retail and apparel industry worldwide. The company operates in three segments: Shrink Management Solutions, Apparel Labeling Solutions, and Retail Merchandising Solutions. The Shrink Management Solutions segment provides shrink management and merchandise visibility solutions. It offers electronic article surveillance systems, such as EVOLVE, a suite of RF and RFID-enabled products that act as a deterrent to prevent merchandise theft in retail stores; and electronic article surveillance consumables, including EAS-RF and EAS-EM labels that work in combination with EAS systems to reduce merchandise theft in retail stores. This segment also provides keepers, spider wraps, bottle security, and hard tags, as well as Showsafe, a line alarm system for protecting display merchandise. In addition, it offers physical and electronic store monitoring solutions, incl uding fire alarms, intrusion alarms, and digital video recording systems for retail environments; and RFID tags and labels. The Apparel Labeling Solutions segment provides apparel labeling solutions to apparel retailers, brand owners, and manufacturers. It has Web-enabled apparel labeling solutions platform and network of 28 service bureaus located in 22 countries that supplies customers with customized apparel tags and labels. The Retail Merchandising Solutions segment offers hand-held label applicators and tags, promotional displays, and queuing systems. The company serves retailers in the supermarket, drug store, hypermarket, and mass merchandiser markets through direct distribution and reseller channels. Checkpoint Systems was founded in 1969 and is based in Thorofare, New Jersey.

Advisors' Opinion:
  • [By Michael]

    OK, so Checkpoint (CKP: 13.80 0.00%) probably isn’t going to see its stock price double in 2011. However, the stock gained 35% in 2010 with earnings expected to climb 13%. Next year, Wall Street sees earnings growth accelerating to 25%. Despite the impressive growth rate, the stock trades at only 16x next year’s earnings estimates and analysts have a $25 price target for CKP.

Best Growth Companies To Invest In Right Now: Waste Management Inc.(WM)

Waste Management, Inc., through its subsidiaries, provides waste management services to residential, commercial, industrial, and municipal customers in North America. It offers collection, transfer, recycling, and disposal services. The company also owns, develops, and operates waste-to-energy and landfill gas-to-energy facilities in the United States. Its collection services involves in picking up and transporting waste and recyclable materials from where it was generated to a transfer station, material recovery facility, or disposal site; and recycling operations include collection and materials processing, plastics materials recycling, and commodities recycling. In addition, it provides recycling brokerage, which includes managing the marketing of recyclable materials for third parties; and electronic recycling services, such as collection, sorting, and disassembling of discarded computers, communications equipment, and other electronic equipment. Further, the company e ngages in renting and servicing portable restroom facilities to municipalities and commercial customers under the Port-o-Let name; and involves in landfill gas-to-energy operations comprising recovering and processing the methane gas produced naturally by landfills into a renewable energy source, as well as provides street and parking lot sweeping services. Additionally, it offers portable self-storage, fluorescent lamp recycling, and medical waste services for healthcare facilities, pharmacies, and individuals, as well as provides services on behalf of third parties to construct waste facilities. The company was formerly known as USA Waste Services, Inc. and changed its name to Waste Management, Inc. in 1998. Waste Management, Inc. was incorporated in 1987 and is based in Houston, Texas.

Advisors' Opinion:
  • [By Sam Collins]

    Houston-based Waste Management Inc. (NYSE: WM) is the largest trash hauling/disposal company in the United States. This company is a model for steady growth with earnings increasing steadily over many years.?

    S&P has a “four-star buy” on WM with a 12-month target of $42. WM pays an annual dividend of $1.36 for a yield of 3.7%.?

    Technically, the stock is in a powerful bull channel with support at $36 and resistance at $39. Buy WM as a long-term growth opportunity.

  • [By Jonas Elmerraji]

    Investors think Waste Management (WM) is a garbage stock right now. Why else would WM's short interest ratio hover around 12.6? Of course, Waste Management is in fact a garbage stock of sorts -- it is the largest waste management service provider in the country. The firm boasts more than 270 landfills and a massive fleet of trash collection vehicles that spans the U.S.

    When I think garbage firms, the first thing that comes to mind is dividends: WM and its peers historically have generous, recession-resistant dividend payouts. Currently, Waste Management's yield adds up to 3.36% annually. Don't forget, dividends are like kryptonite to short sellers.

    WM's willingness to embrace innovation has big potential in the years ahead. Right now, the firm's portfolio includes 22 waste-to-energy plants that are designed to turn the waste that WM literally gets paid to collect into renewable energy that the firm gets paid for again. At this point, the firm's energy plants make up a very small part of its total business, but waste-to-energy projects and the recent acquisition of small oil service firms should look attractive to investors right now.

    Earnings in two months look like the next big catalyst for a short squeeze in WM.

  • [By Tom Konrad]

    The only household name in this year's list, Waste Management is coming back for an encore performance in 2013.  WM is the North American leader in recycling and renewable biogas among waste and environmental services companies.  The industry has been in a cyclical downturn, and WM's well-covered 4.2% dividend makes it a solid anchor for this portfolio of small and micro-cap clean energy stocks.

Top 10 Warren Buffett Stocks To Own For 2014: CNO Financial Group Inc. (CNO)

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

Best Growth Companies To Invest In Right Now: Crocs Inc.(CROX)

Crocs, Inc. and its subsidiaries engage in the design, development, manufacture, marketing, and distribution of footwear, apparel, and accessories for men, women, and children. The company primarily offers casual and athletic shoes, and shoe charms. It also designs and sells a range of footwear and accessories that utilize its proprietary closed cell-resin, called Croslite. The company?s footwear products include boots, sandals, sneakers, mules, and flats. In addition, it provides footwear products for the hospital, restaurant, hotel, and hospitality markets, as well as general foot care and diabetic-needs markets. Further, the company offers leather and ethylene vinyl acetate based footwear, sandals, and printed apparels principally for the beach, adventure, and action sports markets; and accessories comprising snap-on charms. The company sells its products through the United States and international retailers and distributors, as well as directly to end-user consumers th rough its company-operated retail stores, outlets, kiosks, and Web stores primarily under the Crocs Work, Crocs Rx, Jibbitz, Ocean Minded, and YOU by Crocs brand names. As of December 31, 2010, it operated 164 retail kiosks located in malls and other high foot traffic areas; 138 retail stores; 76 outlet stores; and 46 Web stores. Crocs, Inc. operates in the Americas, Europe, and Asia. The company was formerly known as Western Brands, LLC and changed its name to Crocs, Inc. in January 2005. Crocs, Inc. was founded in 1999 and is headquartered in Niwot, Colorado.

Advisors' Opinion:
  • [By Paul]  

    They’re back! Two years ago everyone was convinced that Crocs (CROX: 23.33 0.00%) was just a fad, but their stock price exploded in 2010 gaining 206%. Revenues are expected to climb 20% this year and analysts are looking for 27% earnings growth in 2011. That type of growth could make Crocs a hot item again in 2011, especially if they can continue to top Wall Street’s estimates each quarter.

Best Growth Companies To Invest In Right Now: Buffalo Wild Wings Inc.(BWLD)

Buffalo Wild Wings, Inc. engages in the ownership, operation, and franchise of restaurants in the United States. The company provides quick casual and casual dining services, as well as serves bottled beers, wines, and liquor. As of July 26, 2011, it had 773 Buffalo Wild Wings locations in 45 states in the United States, as well as in Canada. The company was founded in 1982 and is headquartered in Minneapolis, Minnesota.

Advisors' Opinion:
  • [By Roberto Pedone]

    Buffalo Wild Wings (BWLD) is an owner, operator and franchiser of restaurants featuring a variety of boldly-flavored, craveable menu items. This stock closed up 6% to $103.58 in Wednesday's trading session.

    Wednesday's Volume: 1.55 million

    Three-Month Average Volume: 402,120

    Volume % Change: 319%

    From a technical perspective, BWLD ripped higher here back above its 50-day moving average of $98.38 with heavy upside volume. This move is quickly pushing shares of BWLD within range of triggering major breakout trade. That trade will hit if BWLD manages to take out its intraday high on Wednesday of $105.32 and then once it clears is 52-week high at $106.03 with high volume.

    Traders should now look for long-biased trades in BWLD as long as it's trending above its 50-day at $98.38 and then once it sustains a move or close above those breakout levels with volume that hits near or above 402,120 shares. If that breakout triggers soon, then BWLD will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $110 to $120.

  • [By Fabian]  

    While Chipotle has captured most of the attention among the restaurant stocks, Buffalo Wild Wings (BWLD: 56.62 0.00%) could be 2011’s big winner. Wall Street is expecting 19% earnings growth from Buffalo Wild Wings in 2011 which is only slightly lower than Chipotle’s 20% growth rate. However, BWLD trades at only 18x consensus 2011 estimates while CMG trades at a pricey 40x. On an EBITDA basis, Chipotle trades at over 20x, while Buffalo Wild Wings trades at less than 9x.

Best Growth Companies To Invest In Right Now: MEDIFAST INC(MED)

Medifast, Inc., through its subsidiaries, engages in the production, distribution, and sale of weight management and disease management products, and other consumable health and diet products in the United States. The company?s product lines include weight and disease management, meal replacement, and vitamins. It also operates weight control centers that offer Medifast programs for weight loss and maintenance, customized patient counseling, and inbody composition analysis. The company markets its products under the Medifast and Essential brand names, including shakes, appetite suppression shakes, women?s health shakes, diabetics shakes, joint health shakes, coronary health shakes, calorie burn drinks, calorie burn flavor infusers, antioxidant shakes, antioxidant flavor infusers, bars, crunch bars, soups, chili, oatmeal, pudding, scrambled eggs, hot cocoa, cappuccino, chai latte, iced teas, fruit drinks, pretzels, puffs, brownie, pancakes, soy crisps, crackers, and omega 3 and digestive health products. Medifast Inc. sells its products through various channels of distribution comprising Web, call center, independent health advisors, medical professionals, weight loss clinics, and direct consumer marketing supported via the phone and the Web; Take Shape for Life, a physician led network of independent health coaches; and weight control centers. The company was founded in 1980 and is headquartered in Owings Mills, Maryland.

Advisors' Opinion:
  • [By Holly LaFon] Medifast produces, distributes and sells weight and health management products with the brand names Medifast, Take Shape for Life, Hi-Energy Weight Control Centers and Woman�� Wellbeing.

    Its return on assets in the third quarter of 2011 was 19.6%, which has been increasing in the past several years. The average return on assets for the specialty retail industry is 10.48% for the trailing 12 months.

    The company�� total assets amounted to $94 million in 2010, which increased from $62.8 million in 2009. Net income also increased to $19.6 million in 2010 from $12 million in 2009.
  • [By Mark]

    Revenues are expected to grow 27% next year and yet MEDIFAST (MED: 15.68 0.00%) trades at only 16x consensus 2011 earnings. The company continues to gain market share in the competitive weight management sector and provides investors with the double benefit of both a growth stock and a potential acquisition target.

Thursday, August 15, 2013

Wallace Weitz Buys Avon and Oracle

Wallace Weitz is portfolio manager of the Weitz Value Fund, Weitz Hickory Fund and Weitz Partners Value Fund, which he founded in 1983. Wallace Weitz views a company's business value as the amount of cash it will generate for its owners over the next 10-20 years, and stock price as a function of investor attitudes, expectations and competing alternatives for capital. Markets continue to be affected by the European debt crisis, a slowdown in the Chinese economy and a feeble U.S. economy. While these factors may slow economic growth for a year or two (or longer), he believes the companies' stock prices are "cheap enough relatives to their business values" that they "feel good about being 75-85% invested," he said in his fourth quarter letter. Their 15-25% cash reserves may be used to take advantage of temporary market dips.

He added two stocks in the fourth quarter: Avon Products Inc. (AVP) and Oracle Corp. (ORCL).

Avon Products Inc. (AVP)

Avon, a global beauty company, is the world's largest direct seller, with a presence in more than 100 countries through approximately 6.5 million representatives. Avon Products Inc. has a market cap of $7.84 billion; its shares were traded at around $18.16 with a P/E ratio of 10 and P/S ratio of 0.7. The dividend yield of Avon Products Inc. stocks is 5.1%. Avon Products Inc. had an annual average earnings growth of 3.2% over the past 10 years. GuruFocus rated Avon Products Inc. the business predictability rank of 3-star.

Over 2011, Avon's stock price fell considerably, moving in a 52-week range of $16.09-$31.60. Weitz was able to purchase 243,500 shares at an average price of about $19 per share in the fourth quarter of 2011. He bought 117,400 shares previously in the first quarter of 2009 when it was near the same price, $20, and sold them in the second quarter of 2009 at $24.

Avon had a better first nine months of 2011 than the same period of 2010 in most respects. Net sales increased to $8.1 billion from $7.6 b! illion, and earnings increased to $517.5 million from $380 million. They also ended the nine months with $988.2 million cash on its balance sheet, compared to $841.5 the previous year. Its gross margin shrunk 40 basis points in the third quarter, primarily due to higher product costs, and its gross margin for the first nine months of 2011 increased 80 basis points, primarily due to the negative impact of special items.

Results in North America for the third quarter were disappointing, however. Revenues from that segment declined to $493 million from $521 million the previous third quarter. Sales in its other regional segments all improved, with Latin America being the largest, reporting $1.3 billion in revenue. For the first nine months of 2011, North American revenues declined to $1.513 billion from $1.599 billion, and Asia Pacific revenues declined to $687.5 million from $711.2 million, with all other segments improving.

Moving to lower-cost countries was part of Avon's 2005 Restructuring Program. It expects to save approximately $415 million annually once all of its initiatives are fully implemented by 2011-2012.

When Weitz bought the stock, it was at all-time low P/E:

AVP pe,ps,pb Interactive Chart

Oracle (ORCL)

Oracle Corporation is the world's largest enterprise software company and a leading provider of computer hardware products and services. Oracle Corp. has a market cap of $145.5 billion; its shares were traded at around $28.85 with a P/E ratio of 13.1 and P/S ratio of 4.1. The dividend yield of Oracle Corp. stocks is 0.8%. Oracle Corp. had an annual average earnings growth of 19.3% over the past 10 years. GuruFocus rated Oracle Corp. the business predictability rank of 3.5-star.

Oracle's stock price fluctuated between $24.72 and $36.50 in the last 52 weeks. Weitz bought the stock for an average price of $31 in the fourth quarter of 2011, and bought 7,989 shares. In the last five years, Oracle's stock increased 73%.

Oracle�! �s derive! s its revenue from software (including software licenses and license update sand product support), hardware systems and services. Revenue jumped from $9.9 billion in 2010 to $16.2 billion in fiscal 2011 with the acquisition of Sun Microsystems in fiscal 2010 and Phase Forward Incorporated and ATG in fiscal 2011. Increases in its software business revenues also contributed to the jump.

Over the last 10 years, Oracle's revenue per share grew at an annual rate of 17.5%, and free cash flow grew at 17.8%.

The company is poised to increase growth going forward, as it added 1,700 sales professionals in the first half of 2012. It will also benefit from the launch of new product lines and more cloud computing and services, such as its Fusion Cloud ERP and Cloud CRM. Oracle also acquired Taleo (TLEO), a leading cloud-based human resources software business, for $1.9 billion on February 9. The goal for the acquisition is to create a comprehensive cloud offering for organizations to manage their human resources operations.

"Human capital management has become a strategic initiative for organizations," said Thomas Kurian, executive vice president, Oracle Development. "Taleo's industry leading talent management cloud is an important addition to the Oracle Public Cloud."

In its cloud service, Oracle Public Cloud, Oracle is aiming to differentiate itself from its competitors, such as Salesforce (CRM) by offering full interoperability so that users will not be locked into Oracle software.

Check out the Undervalued Stocks, Top Growth Companies and High Yield stocks of Wallace Weitz.

Best Performing Companies To Watch For 2014

Monday, August 12, 2013

Top 10 Safest Companies To Watch In Right Now

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Select Comfort (NASDAQ: SCSS  ) , a retailer of mattresses and other sleep-related products, dipped as much as 10% after reporting disappointing second-quarter results.

So what: There won't be any sound sleep for shareholders today after Select Comfort reported a 1% increase in sales, to $207.4 million, and a 42% decline in income, to just $0.18 per share. Comparatively, Wall Street had been forecasting sales of $210.7 million, and EPS of $0.24. The company did reaffirm its full-year outlook, which likely saved it from a huge fall, but a 6% decline in same-store sales is hard for investors to ignore. The big knock against its bottom line was a 65% increase in expenditures due to new investments in technology and product innovation in its stores.

Top 10 Safest Companies To Watch In Right Now: Fluor Corporation(FLR)

Fluor Corporation, through its subsidiaries, provides engineering, procurement, construction, maintenance, and project management services worldwide. Its Oil & Gas segment offers design, engineering, procurement, construction, and project management services to upstream oil and gas production, downstream refining, chemicals, and petrochemicals industries. This segment also provides consulting services comprising feasibility studies, process assessment, and project finance structuring and studies. The company?s Industrial & Infrastructure segment offers design, engineering, procurement, and construction services to the transportation, wind power, mining and metals, life sciences, manufacturing, commercial and institutional, telecommunications, microelectronics, and healthcare sectors. Its Government segment provides engineering, construction, logistics support, contingency response, management, and operations services to the United States government focusing on the Departme nt of Energy, the Department of Homeland Security, and the Department of Defense. The company?s Global Services segment offers operations and maintenance, small capital project engineering and execution, site equipment and tool services, industrial fleet services, plant turnaround services, temporary staffing services, and supply chain solutions. Its Power segment provides engineering, procurement, construction, program management, start-up and commissioning, and operations and maintenance services to the gas fueled, solid fueled, plant betterment, renewables, nuclear, and power services markets. The company also offers unionized management and construction services in the United States and Canada. Fluor Corporation was founded in 1912 and is headquartered in Irving, Texas.

Top 10 Safest Companies To Watch In Right Now: Petroleo Brasileiro S.A.- Petrobras(PBR)

Petroleo Brasileiro S.A. primarily engages in oil and natural gas exploration and production, refining, trade, and transportation businesses. The company?s Exploration and Production segment involves in the exploration, production, development, and production of oil, liquefied natural gas (LNG), and natural gas in Brazil. This segment supplies its products to the refineries in Brazil, as well as sells surplus petroleum and byproducts in domestic and foreign markets. Its Supply segment engages in the refining, logistics, transportation, and trade of oil and oil products; export of ethanol; and extraction and processing of schist, as well as holds interests in companies of the petrochemical sector in Brazil. The Gas and Energy segment involves in the transportation and trade of natural gas produced in or imported into Brazil; transportation and trade of LNG; and generation and trade of electric power. In addition, the segment has interests in natural gas transportation and d istribution companies; and thermoelectric power stations in Brazil, as well engages in fertilizer business. The Distribution segment distributes oil products, ethanol, and compressed natural gas in Brazil. The International segment involves in the exploration and production of oil and gas, as well as in supplying, gas and energy, and distribution operations in the Americas, Africa, Europe, and Asia. Further, the company involves in biofuel production business. Petroleo Brasileiro was founded in 1953 and is based in Rio de Janeiro, Brazil.

Advisors' Opinion:
  • [By Dave Friedman]

    Institutional investors bought 78,663,680 shares and sold 101,125,380 shares, for a net of -22,461,700 shares. This net represents 0.23% of common shares outstanding. The number of shares outstanding is 9,872,826,100. The shares recently traded at $27.61 and the company’s market capitalization is $170,178,700,000.00. About the company: Petroleo Brasileiro S.A. – Petrobras explores for and produces oil and natural gas. The Company refines, markets, and supplies oil products. Petrobras operates oil tankers, distribution pipelines, marine, river and lake terminals, thermal power plants, fertilizer plants, and petrochemical units. The Company operates in South America and elsewhere around the world.

Hot Warren Buffett Companies To Own In Right Now: Under Armour Inc.(UA)

Under Armour, Inc. develops, markets, and distributes performance apparel, footwear, and accessories for men, women, and youth primarily in the United States, Canada, and internationally. It offers products made from moisture-wicking synthetic fabrics designed to regulate body temperature and enhance performance regardless of weather conditions. The company provides its products in three fit types: compression (tight fitting), fitted (athletic cut), and loose (relaxed) extending across the sporting goods, outdoor, and active lifestyle markets. Its footwear offerings comprise football, baseball, lacrosse, softball, and soccer cleats; slides; performance training footwear; and running footwear. The company also provides baseball batting, football, golf, and running gloves, as well as licenses bags, socks, headwear, custom-molded mouth guards, and eyewear that are designed to be used and worn before, during, and after competition. Under Armour sells its products through retai l stores, as well as directly to consumers through its own retail outlets and specialty stores, Website, and catalogs. The company was founded in 1996 and is headquartered in Baltimore, Maryland.

Advisors' Opinion:
  • [By Glenn]  

    Current Price: $27.27 12-month target: $37

    I see potential in opportunities for new product adjacencies, and expanding distribution worldwide. Footwear growth will continue to increase. Revenues for these products have increased over 69% in 2009. Adding to this I still see growth in Under Armour’s apparel sales, which are up 8%. Under Armor had yet to even break into the international market, which offers a plethora of new opportunities for this growing brand. I believe sales will rise drastically in 2010 driven by international sales, new women’s clothing line, and expansion within their own footwear line.
  • [By Victor Mora]

    Under Armour provides athletic apparel, footwear, and accessories to a growing health and wellness, athletic, and fitness enthusiast population around the world. The stock has been on a powerful move towards higher prices that has led to it trading at all-time highs. Earnings and revenue figures have increased over most of the last four quarters which has led to excited investors. Relative to its peers and sector, Under Armour has led in year-to-date performance by a wide margin. Look for Under Armour to OUTPERFORM.

Top 10 Safest Companies To Watch In Right Now: Goldman Sachs Group Inc.(The)

The Goldman Sachs Group, Inc., together with its subsidiaries, provides investment banking, securities, and investment management services to corporations, financial institutions, governments, and high-net-worth individuals worldwide. Its Investment Banking segment offers financial advisory, including advisory assignments with respect to mergers and acquisitions, divestitures, corporate defense, risk management, restructurings, and spin-offs; and underwriting securities, loans and other financial instruments, and derivative transactions. The company?s Institutional Client Services segment provides client execution activities, such as fixed income, currency, and commodities client execution related to making markets in interest rate products, credit products, mortgages, currencies, and commodities; and equities related to making markets in equity products, as well as commissions and fees from executing and clearing institutional client transactions on stock, options, and fu tures exchanges. This segment also engages in the securities services business providing financing, securities lending, and other prime brokerage services to institutional clients, including hedge funds, mutual funds, pension funds, and foundations. Its Investing and Lending segment invests in debt securities, loans, public and private equity securities, real estate, consolidated investment entities, and power generation facilities. This segment also involves in the origination of loans to provide financing to clients. The company?s Investment Management segment provides investment management services and investment products to institutional and individual clients. This segment also offers wealth advisory services, including portfolio management and financial counseling, and brokerage and other transaction services to high-net-worth individuals and families. In addition, it provides global investment research services. The company was founded in 1869 and is headquartered in New York, New York.

Friday, August 9, 2013

How BT Group Measures Up as a GARP Investment

LONDON -- A popular way to dig out reasonably priced stocks with robust growth potential is through the "growth at a reasonable price," or GARP, strategy. 

This theory uses the price-to-earnings to growth (PEG) ratio to show how a share's price weighs up in relation to its near-term growth prospects -- a reading below 1 is generally considered decent value for money.

Today I am looking at BT Group  (LSE: BT-A  ) (NYSE: BT  ) to see how it measures up.

What are BT Group's earnings expected to do?




EPS growth



P/E ratio



PEG ratio



Source: Digital Look.

Expectations of negative earnings growth in 2014 results in an invalid PEG rating, although the reading is expected to register around the value benchmark of 1 the following year as earnings growth resumes.

As well, BT Group currently trades above a price-to-earnings (P/E) ratio of 10 for this year -- I feel a reading below 10 generally indicates exceptional investor value -- and the rating is expected to fall very close to this marker in 2015.

Does BT Group provide decent value against its rivals?


FTSE 100

Fixed Line Telecommunications

Prospective P/E ratio



Prospective PEG ratio



Source: Digital Look.

BT Group offers excellent value on a P/E basis compared with the FTSE 100 and its peers in the fixed-line telecoms sector. However, the communications specialist's void PEG rating for 2014 illustrates the firm's unattractive near-term earnings prospects versus both of these groups.

Nonetheless, I believe that BT Group is an excellent pick for long-term growth, even if its credentials as an immediate GARP candidate fall short.

"Triple play" gauntlet thrown down
BT Group's challenge to oust British Sky Broadcasting as the country's foremost telephone, broadband, and television provider has been well publicized since the company announced it would be launching its own BT Sport package to rival Sky's equivalent channels last year.

Indeed, its decision to offer the channels free to all broadband customers is a bold move which has certainly thrown down the gauntlet to the competition. The company has subsequently attracted a lot of custom from not only Sky but from subscribers to Virgin Media and TalkTalk.

Still, BT Group's potential growth story is not solely dependent upon its triple services operations as it also has significant opportunities elsewhere. 

For example, the firm has made huge inroads into the business sector in recent times, and still boasts a large share in both residential calls and line rental. The firm is also pushing its IT services and mobile operations, and broker Liberum Capital has identified this as an area for attractive growth.

The expert's guide for intelligent investors
If you already hold shares in BT Group, check out this newly updated special report which highlights a host of other FTSE winners identified by ace fund manager Neil Woodford.

Woodford -- head of U.K. Equities at Invesco Perpetual -- has more than 30 years' experience in the industry, and boasts an exceptional track record when it comes to selecting stock market stars.

The report, compiled by The Motley Fool's crack team of analysts, is totally free and comes with no further obligation. Click here now to download your copy.

Thursday, August 8, 2013

Costly Risk In New Oil Exploration

Over the past few years, the large Western oil majors have been plagued by projects running substantially over budget, and taking much longer to complete than initially estimated. These hurdles are part of the broader challenge facing oil companies -- how to cope with the end of the era of "easy oil." Let's take a closer look at one project -- the Kashagan oil field -- that epitomizes these challenges.

A primer on Kashagan
Kashagan is a vast untapped oil field in Kazakhstan with massive hydrocarbon potential. Yet, despite its operators -- a consortium of companies including ExxonMobil (NYSE: XOM  ) , Eni, and Royal Dutch Shell -- having plowed more than $30 billion into the project over the past decade, the field has yet to produce a single drop of oil. 

Exploration in the region first began in the early 1990s after the dissolution of the Soviet Union, and was led by companies including Eni, Exxon, Shell, Total SA, Statoil, BP (NYSE: BP  ) , and BG Group. While initial prospecting pointed to a potential 10-billion barrels of recoverable oil, it also made clear some of the most daunting challenges that drillers would have to overcome in order to exploit Kashagan's resources.

Technical and other challenges
For starters, the reservoir lies about 12,000 feet below the northeast Caspian Sea, which freezes for several months during the year. Since this tends to damage or destroy typical offshore drilling equipment, operators are forced to construct concrete drilling blocks, which don't come cheap. In addition to these weather-related challenges, Kashagan's development has been beset by difficult supply routes and clashes with local government officials.

Delays and other issues
As a result, its operators have repeatedly failed to meet deadlines and start-up dates. Last year, Eni said Kashagan would start up in March this year -- a deadline it later pushed back to June. But that target won't be panning out, either. Earlier this month, Eni pushed the deadline even further out to October this year.

According to a spokesman for the North Caspian Operating Company, the reason for Kashagan's numerous delays has to do with the overwhelming technical complexity of the project, as well as its operators' vigilant approach to development, which they've adopted to minimize problems like oil and gas leaks. 

Due to the delays, cost overruns, and uncertainties, one initial partner in the project, ConocoPhillips (NYSE: COP  ) , even decided to back out. The company recently announced that it is looking to sell its 8.4% stake in the venture, which Kazakhstan has the right to buy. The Kazakh government will decide by July 2 how it wishes to proceed. 

Kashagan's implications for oil companies
Kashagan highlights the grave difficulties facing the large Western oil companies in an era where fields of "easy oil" have already been tapped, or are zealously guarded by national oil companies.

As Steve Coll highlights in his excellent recent book, Private Empire: ExxonMobil and American Power, the resource nationalism that emerged among the large oil-producing states in the world over the past few decades has forced the Western oil majors to embark on challenging journeys to all corners of the globe in search of oil.

But, like Kashagan, most of these projects require massive amounts of upfront investment, yet provide no guarantee about future returns. The bottom line is that, despite the fact that ExxonMobil and some other integrated oil majors are exceptionally well managed, they're still operating in an environment fraught with risk. Clearly, BP -- still recovering from the Deepwater Horizon incident's fallout -- is a poster child for this harsh reality.

This inherent friction of balancing risk minimization with the need to explore for oil in some of the riskiest locales around the globe is one major reason why investors should be wary of the numerous countries these companies operate in, and the level of risk -- weather-related, cost-related, political, social, and otherwise -- that their operations pose.

There are many different ways to play the energy sector, and The Motley Fool's analysts have uncovered an under-the-radar company that's dominating its industry. This company is a leading provider of equipment and components used in drilling and production operations, and poised to profit in a big way from it. To get the name and detailed analysis of this company that will prosper for years to come, check out the special free report: "The Only Energy Stock You'll Ever Need." Don't miss out on this limited-time offer and your opportunity to discover this under-the-radar company before the market does. Click here to access your report -- it's totally free.

Wednesday, August 7, 2013

Asian Stocks Fall on Japan as Yen Climbs for Fourth Day

Asian stocks fell, with the regional benchmark index heading for its biggest drop since June 20, as Japanese shares led declines across the region after the yen gained for a fourth day and metals prices slid.

Pioneer Corp. (6773) sank 8.7 percent in Tokyo after the maker of car stereos lowered its full-year profit forecast. BHP Billiton Ltd., the world's biggest mining company, dropped 2 percent in Sydney after copper futures declined. The MSCI Asia Pacific Index decreased 2 percent to 133.08 as of 5:21 p.m. in Tokyo, with more than five shares falling for each that rose.

Japan's Nikkei 225 Stock Average tumbled the most in almost two months at the close in Tokyo as the yen touched a six-week high against the dollar. The U.S. trade deficit narrowed more than forecast in June, the Commerce Department said yesterday, driving the Standard & Poor's 500 Index lower as investors weighed whether the stronger data would encourage the Fed to start reducing its monthly bond purchases.

"Markets are entering a period of uncertainty," said Yoji Takeda, Hong Kong-based head of Asian equities at RBC Investment (Asia) Ltd., which oversees $1.5 billion. "There's a policy vacuum in Japan and the government isn't going to come up with new policies until parliament resumes sessions in September. While the possible tapering of U.S. stimulus has been more or less priced in, people tend to be a little bit cautious until it happens."

The Bank of Japan will maintain its asset-purchasing program at a two-day meeting that started today, according to all 26 economists surveyed by Bloomberg.

Regional Indexes

Japan's Topix index dropped 3.2 percent. South Korea's Kospi index and Taiwan's Taiex index both slipped 1.5 percent. Australia's S&P/ASX 200 Index fell 1.9 percent, its biggest decline since July 3. New Zealand's NZX 50 Index lost 0.6 percent.

Hong Kong's Hang Seng Index decreased 1.5 percent. The city's benchmark gauge has fallen 4.7 percent this year, the biggest decline among developed markets tracked by Bloomberg. China's Shanghai Composite Index slipped 0.7 percent, while Singapore's Straits Times Index gained 0.2 percent.

The MSCI Asia Pacific Index advanced 1.3 percent last month, its first such gain since April, after China pledged to do more to support a transition from an export-based economy to domestic demand. Shares on the gauge traded at 13.2 times estimated earnings yesterday, compared with 15.4 times for the S&P 500 and 13.8 times for the Stoxx Europe 600 Index.


Fed Bank of Chicago President Charles Evans, who has been among the strongest proponents of record monetary easing, said yesterday he "would clearly not rule" out a decision to begin dialing back bond purchases in September. Economists at Goldman Sachs Group Inc. and Barclays Plc raised their estimates for second-quarter U.S. gross domestic product, citing the trade data.

German factory orders increased by the most in eight months and U.K. industrial production beat forecasts in June, adding to evidence of a nascent recovery in Europe, separate reports showed yesterday. Italy's economic contraction slowed.

Earnings Season

Pioneer dropped 8.7 percent to 178 yen in Tokyo after cutting its full-year net-income forecast by 92 percent as profit margins dropped and sales of car-navigation systems and optical disc-drives declined. IHI Corp. (7013), a manufacturer of jet engines and ships, dropped 5.8 percent to 409 yen after its earnings outlook missed estimates.

Of the 325 companies on the MSCI Asia Pacific Index that have posted quarterly results since July 1 and for which estimates are available, 51 percent exceeded expectations, according to data compiled by Bloomberg.

Japanese exporters declined as the yen traded as high as 96.77 per dollar. A stronger currency reduces the overseas income of the nation's carmakers and electronics manufacturers when repatriated.

Exporters Decline

Toyota Motor Corp., Asia's biggest carmaker, dropped 2.4 percent to 6,230 yen. Canon Inc. (7751), the No. 1 camera maker, slipped 2.5 percent to 3,130 yen. Sony Corp., which manufactures Bravia televisions and PlayStation game consoles, fell 4.3 percent to 1,952 yen.

Top Energy Stocks For 2014

Hyundai Motor Co., South Korea's largest carmaker, decreased 3.2 percent to 225,000 won, while affiliate Kia Motors Corp. fell 3.7 percent to 60,500 won after union negotiators walked out of wage talks and said they would ask workers to vote on a strike.

Raw-material producers dropped as copper futures fell. BHP slipped 2 percent to A$34.90 in Sydney. Rio Tinto Group, the world's second-largest mining company, decreased 2.1 percent to A$58.60.

Tuesday, August 6, 2013

Why Praxair Is Poised to Pop

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, atmospheric and process gas producer Praxair (NYSE: PX  ) has earned a respected four-star ranking.  

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

Praxair facts

Headquarters (founded)

Danbury, Conn. (1907)

Market Cap

$33.9 billion


Industrial gases

Trailing-12-Month Revenue

$11.3 billion


Chairman/CEO Stephen Angel

CFO James Sawyer

Return on Equity (average, past 3 years)

Hot Cheap Companies To Buy Right Now


Cash / Debt

$113.0 million / $8.7 billion

Dividend Yield



Air Products & Chemicals

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 96% of the 695 members who have rated Praxair believe the stock will outperform the S&P 500 going forward.

Just yesterday, one of those Fools, TMFTailwind, succinctly summed up the Praxair bull case for our community:

-Customers sign long-term contracts that are indexed for inflation, which will protect margins over time (especially so in an inflationary period)
-Provides a vital product (gas) to numerous manufacturing/processing industries
-Generates strong operating cash flows and solid profit margins, and looks set to do so for a long time  

If you want market-thumping returns, you need to put together the best portfolio you can. Of course, despite a strong four-star rating, Praxair may not be your top choice.

We've found another stock we are incredibly excited about -- excited enough to dub it "The Motley Fool's Top Stock for 2013." We have compiled a special free report for investors to uncover this stock today. The report is 100% free, but it won't be here forever, so click here to access it now.

Monday, August 5, 2013

3 Basic Materials Stocks Rising on Unusual Volume

 DELAFIELD, Wis. (Stockpickr) -- Professional traders running mutual funds and hedge funds don't just look at a stock's price moves; they also track big changes in volume activity. Often when above-average volume moves into an equity, it precedes a large spike in volatility.

Major moves in volume can signal unusual activity, such as insider buying or selling -- or buying or selling by "superinvestors."

Unusual volume can also be a major signal that hedge funds and momentum traders are piling into a stock ahead of a catalyst. These types of traders like to get in well before a large spike, so it's always a smart move to monitor unusual volume. That said, remember to combine trend and price action with unusual volume. Put them all together to help you decipher the next big trend for any stock.

With that in mind, let's take a look at several stocks rising on unusual volume today.

Compass Minerals

Compass Minerals (CMP) is a producer of minerals, including salt, sulfate of potash specialty fertilizer and magnesium chloride. This stock closed up 3.4% at $75.60 in Wednesday's trading session.

Wednesday's Volume: 913,000

Three-Month Average Volume: 212,481

Volume % Change: 315%

From a technical perspective, CMP gapped higher here off its recent low of $64.24 with heavy upside volume. This stock recently gapped down sharply from around $90 to $64.24 with heavy downside volume. That move pushed shares of CMP into extremely oversold territory, since the stock's current relative strength index reading is 25.78. Oversold can always get more oversold, but it's also an area where a stock can experience a powerful bounce higher from. Shares of CMP are now starting to move within range of triggering a near-term breakout trade. That trade will hit if CMP manages to take out its gap down day high of $78.20 and then once it clears its 200-day moving average at $79.14 with high volume.

Traders should now look for long-biased trades in CMP as long as it's trending above Wednesday's low of $73.07 or $72.50 and then once it sustains a move or close above those breakout levels with volume that's near or above 212,481 shares. If that breakout hits soon, then CMP will set up to re-fill some of its previous gap down zone that started near $90.

Renewable Energy Group

Renewable Energy Group (REGI) is a producer of biodiesel in U.S. This stock closed up 11.5% at $15.59 in Wednesday's trading session.

Wednesday's Volume: 1.59 million

Three-Month Average Volume: 634,616

Volume % Change: 235%

From a technical perspective, REGI exploded higher here right off its 50-day moving average of $13.83 with heavy upside volume. This move pushed shares of REGI into breakout and all-time high territory, since the stock flirted with some near-term overhead resistance levels at $14.75 to its former all-time high at $15.71. At last check, REGI closed near the highs of the day at $15.75 and volume was well above its three-month average action of 634,616 shares.

Traders should now look for long-biased trades in REGI as long as it's trending above its 50-day at $13.83 and then once it sustains a move or close above its new all-time high of $15.75 with volume that's near or above 634,616 shares. If we get that move soon, then REGI will set up to enter new all-time high territory, which is bullish technical price action. Some possible upside targets off that move are $20 to $22.


Methanex (MEOH) produces and markets methanol, a chemical that is used to make a range of industrial, consumer and energy products. This stock closed up 2.9% at $47.83 in Wednesday's trading session.

Wednesday's Volume: 730,000

Three-Month Average Volume: 355,872

Volume % Change: 115%

From a technical perspective, MEOH jumped higher here right above some near-term support at $45 with above-average volume. This stock has been uptrending strong for the last month and change, with shares moving higher from its low of $40.14 to its intraday high of $47.87. During that move, shares of MEOH have been making mostly higher lows and higher highs, which is bullish technical price action. This move also pushed shares of MEOH into breakout territory, since the stock took out its previous 52-week high at $47.32.

Traders should now look for long-biased trades in MEOH as long as it's trending above its 50-day at $44.03, and then once it sustains a move or close above its new 52-week high at $47.87 with volume that's near or above 355,872 shares. If we get that move soon, then MEOH will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $50 to $55.

To see more stocks rising on unusual volume, check out the Stocks Rising on Unusual Volume portfolio on Stockpickr.

-- Written by Roberto Pedone in Delafield, Wis.