Saturday, May 31, 2014

Top Casino Stocks To Own Right Now

Top Casino Stocks To Own Right Now: Caesars Entertainment Corp (CZR)

Caesars Entertainment Corporation, incorporated on November 2, 1989, is a diversified casino-entertainment provider. The Companys business is primarily conducted through a wholly owned subsidiary, Caesars Entertainment Operating Company, Inc. (CEOC), although certain material properties are not owned by CEOC. As of December 31, 2012, it owned, operated, or managed, through various subsidiaries, 52 casinos in 13 United States states and seven countries. The majority of these casinos operate in the United States, primarily under the Caesars, Harrahs, and Horseshoe brand names, and in England. In November 2012, the Company sold its Harrah's St. Louis casino to Penn National Gaming, Inc. In December 2012, the Company purchased all of the net assets of Buffalo Studios, LLC, a social and mobile games developer and owner of Bingo Blitz.

The Companys casino entertainment facilities include 33 land-based casinos, 11 riverboat or dockside casinos, three managed casinos on Indian lands in the United States, one managed casino in Cleveland, Ohio, one managed casino in Canada, one casino combined with a greyhound racetrack, one casino combined with a thoroughbred racetrack, and one casino combined with a harness racetrack. The Companys land-based casinos include nine in England, two in Egypt, one in Scotland, one in South Africa and one in Uruguay. As of December 31, 2012, its facilities had an aggregate of approximately three million square feet of gaming space and approximately 43,000 hotel rooms. In southern Nevada, Caesars Palace, Harrahs Las Vegas, Rio All-Suite Hotel & Casino, Ballys Las Vegas, Flamingo Las Vegas, Paris Las Vegas, Planet Hollywood Resort and Casino, The Quad Resort & Casino (formerly the Imperial Palace Hotel and Casino), Bills Gamblin Hall & Saloon, and Hot Spot Oasis are located in Las Vegas and draw customers from throughout the United States. Harrahs Laughlin is located near both the Arizo na a! nd California borders and draws customers primarily from! the southern California and Phoenix metropolitan areas and, to a lesser extent, from throughout the United States through charter aircraft. In northern Nevada, Harrahs Lake Tahoe and Harveys Resort & Casino are located near Lake Tahoe and Harrahs Reno is located in downtown Reno. These facilities draw customers primarily from northern California, the Pacific Northwest, and Canada.

The Companys Atlantic City casinos, Harrahs Resort Atlantic City, Showboat Atlantic City, Caesars Atlantic City, and Ballys Atlantic City, draw customers primarily from the Philadelphia metropolitan area, New York, and New Jersey. Harrahs Philadelphia (formerly Harrah's Chester) is a combination harness racetrack and casino located approximately six miles south of Philadelphia International Airport and draws customers primarily from the Philadelphia metropolitan area and Delaware. The Companys Chicagoland dockside casinos, Harrahs Joliet in Joliet, Illinois, a nd Horseshoe Hammond in Hammond, Indiana, draw customers primarily from the greater Chicago metropolitan area. In southern Indiana, it owns Horseshoe Southern Indiana, a dockside casino complex located in Elizabeth, Indiana, which draws customers primarily from northern Kentucky, including the Louisville metropolitan area, and southern Indiana, including Indianapolis. In Louisiana, the Company owns Harrahs New Orleans, a land-based casino located in downtown New Orleans, which attracts customers primarily from the New Orleans metropolitan area. In northwest Louisiana, Horseshoe Bossier City, a dockside casino, and Harrahs Louisiana Downs, a thoroughbred racetrack with slot machines, both located in Bossier City, cater to customers in northwestern Louisiana.

The Company owns the Grand Casino Biloxi, located in Biloxi, Mississippi, which caters to customers in southern Mississippi, southern Alabama, and northern Florida. Harrahs North Kansas City dockside casino draws customers from t! he Kansas! City metropolitan ar! ea. Harra! hs Metropolis is a dockside casino located in Metropolis, Illinois, on the Ohio River, drawing customers from southern Illinois, western Kentucky, and central Tennessee. Horseshoe Tunica, Harrahs Tunica, and Tunica Roadhouse Hotel & Casino, dockside casino complexes located in Tunica, Mississippi, are approximately 30 miles from Memphis, Tennessee and draw customers primarily from the Memphis area and, to a lesser extent, from throughout the United States through charter aircraft. Horseshoe Casino and Bluffs Run Greyhound Park, a land-based casino and pari-mutuel facility, and Harrahs Council Bluffs Casino & Hotel, a dockside casino facility, are located in Council Bluffs, Iowa, across the Missouri River from Omaha, Nebraska. At Horseshoe Casino and Bluffs Run Greyhound Park, the Company owns the assets other than gaming equipment, and leases these assets to the Iowa West Racing Association (IWRA), a nonprofit corporation, and it manages the facility for the IWRA un der a management agreement expiring in October 2024. The license to operate Harrahs Council Bluffs Casino & Hotel is held jointly with IWRA, the qualified sponsoring organization.

The Conrad Resort & Casino located in Punta Del Este, Uruguay (the Conrad), draws customers primarily from Argentina and Uruguay. In November 2012, the Company announced that it had entered into a definitive agreement with Enjoy S.A. (Enjoy) to form a strategic relationship in Latin America. Under the terms of the agreement, Enjoy will acquire 45% of Baluma S.A., its subsidiary, which owns and operates the Conrad, and the Company will become a 10% shareholder in Enjoy upon consummation of the agreement. Upon the closing of the transaction, which is subject to certain conditions, including the receipt of all regulatory and governmental approvals, Enjoy will assume primary responsibility for management of the Conrad. Enjoy will have the option to acquire the remaining stake in Baluma S.A. between years three and fi! ve follow! ing closing. The cl! osing of ! the transaction remains subject to a number of conditions, including regulatory and governmental approvals in both Uruguay and Chile.

The Company owns four casinos in London: the Sportsman, the Golden Nugget, The Playboy Club London, and The Casino at the Empire. Its casinos in London draw customers primarily from the London metropolitan area, as well as international visitors. The Company also owns Alea Nottingham, Alea Glasgow, Alea Leeds, Manchester 235, Rendezvous Brighton, and Rendezvous Southend-on-Sea in the provinces of the United Kingdom, which primarily draw customers from their local areas. Pursuant to a concession agreement, it also operates two casinos in Cairo, Egypt, The London Club Cairo (which is located at the Ramses Hilton) and Caesars Cairo (which is located at the Four Seasons Cairo), which draw customers primarily from other countries in the Middle East. Emerald Safari, located in the province of Gauteng in South Africa, draws customers primarily from South Africa. It owsn and operates Bluegrass Downs, a harness racetrack located in Paducah, Kentucky.

The Company owns three casinos for Indian tribes: Harrahs Phoenix Ak-Chin, located near Phoenix, Arizona, Harrahs Cherokee Casino and Hotel, and Harrahs Rincon Casino and Resort, located near San Diego, California. The Company manages Caesars Windsor, located in Windsor, Ontario, which draws customers primarily from the Detroit metropolitan area, Horseshoe Cleveland casino in Ohio, which it manages for Rock Ohio Caesars LLC (ROC), a venture with Rock Ohio Ventures, LLC (Rock Gaming), in which it has a 20% equity interest, and the Horseshoe Cincinnati casino in Ohio for ROC for a fee under a management agreement that will expire in March 2033. It also has a minority interest in Sterling Suffolk Racecourse, LLC (Suffolk Downs), which owns a horse-racing track in Boston, Massachusetts, and the right to manage a future gaming facility. The Company als o owns ans operates a golf cour! se on 175! acres of prime real! estate t! hrough a land concession on the Cotai strip in Macau.

Advisors' Opinion:
  • [By Travis Hoium]

    What: Shares of Caesars Entertainment (NASDAQ: CZR  ) jumped as much as 37% today after the company announced a growth spinoff.

    So what: Caesars will spin off a "growth" subsidiary that will be called Caesars Growth Partners. Private-equity investors Apollo Management and TPG Capital have said they will each invest $250 million in the company, and Caesars shareholders will be able to contribute a proportional amount to buy into the company. Full details aren't yet available, but the move will reduce the parent company's debt and sell growth assets to shareholders.

  • source from Top Penny Stocks For 2015:

Top 5 Specialty Retail Stocks For 2015

Top 5 Specialty Retail Stocks For 2015: WH Smith PLC (SMWH)

WH Smith PLC is a United Kingdom-based retail company. The Company has two businesses divisions: Travel and High Street. The Company's Travel division sells a range of newspapers, magazines, books and impulse products for people on the move and a broader convenience range in hospitals and workplaces. The Company's High Street sells a wide range of stationery, books, newspapers, magazines and impulse products, as well as a small range of entertainment products.The Companys subsidiaries include WH Smith PLC, WH Smith Retail Holdings Limited, WH Smith High Street Holdings Limited, WH Smith Travel Holdings Limited, WH Smith High Street Limited, WH Smith Travel Limited and WH Smith Hospitals Holdings Limited. Advisors' Opinion:
  • [By Sofia Horta e Costa]

    Hays Plc (HAS) climbed 2.2 percent after the recruitment company said quarterly fees increased in its European markets. WH Smith Plc (SMWH) jumped the most in six months after raising its final dividend and saying it plans to repurchase an additional 50 million pounds ($80 million) of shares. Melrose Industries Plc (MRO) added 1.8 percent after KKR & Co. said it will pay about $1 billion for two of its U.S. industrial-products companies.

  • source from Top Penny Stocks For 2015:

Friday, May 30, 2014

10 Best Food Stocks For 2015

10 Best Food Stocks For 2015: Amira Nature Foods Ltd (ANFI)

Amira Nature Foods Ltd., incorporated on February 20, 2012, is a provider of packaged Indian specialty rice, with sales in over 40 countries. It generates the majority of its revenue through the sale of Basmati rice, a long-grain rice grown only in certain regions of the Indian sub-continent. The Company sells its products, primarily in emerging markets, through a distribution network. It sells its Amira brand in more than 25 countries. The Company sells its Amira branded products to Indian retailers such as Bharti Wal-Mart, Big Bazaar, Metro Cash & Carry, Spar, Spencer's Retail, Star Bazaar (Tesco in India) and Total and retailers, such as Carrefour, Costco, Jetro Restaurant Depot, Lulu's and Smart & Final, and through the foodservice channel. It participates across the entire rice supply chain from the procurement of paddy to its storage, aging, processing into rice, packaging, distribution and marketing. In June 2013, the Company announced that it has launched Amira bra nded products in the United Kingdom. In January 2014, Amira Nature Foods Ltd acquired Basmati Rice GmbH.

The Company operates an automated and integrated processing and milling facility that is located in the vicinity of the key Basmati rice paddy producing regions of northern India. The facility spans a covered area of 310,221 square feet, with a processing capacity of 24 metric tons of paddy per hour. During the year ended March 31, 2012, 34% of its revenue was derived from sales in India, and 50.3% was derived from sales in the Europe, Middle East and Africa region, or EMEA, 14.3% was derived from sales in the Asia Pacific region, and 1.4% was derived from sales in North America.

Advisors' Opinion:
  • [By Roberto Pedone]

    A consumer goods player that's starting to trend within range of triggering a big breakout trade is Amira Nature Foods (ANFI)! , a global provider of packaged Indian specialty rice, with sales in over 40 countries. This stock has been in play with the bulls over the last three months, with shares up 25%.

    If you take a look at the chart for Amira Nature Foods, you'll notice that this stock has been uptrending strong for the last five months, with shares soaring higher from its low of $7.44 to its recent high of $17.41 a share. During that uptrend, shares of ANFI have been making mostly higher lows and higher highs, which is bullish technical price action. Shares of ANFI have started to break out above some key near-term overhead resistance levels today at $15.92 to $16.25 a share. That move is quickly pushing shares of ANFI within range of triggering another big breakout trade.

    Traders should now look for long-biased trades in ANFI if it manages to break out above its all-time high of $17.41 a share with high volume. Look for a sustained move or close above that level with volume that hits near or above its three-month average action of 226,387 shares. If that breakout triggers soon, then ANFI will set up to enter new all-time-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $25 to $27 a share.

    Traders can look to buy ANFI off any weakness to anticipate that breakout and simply use a stop that sits right below its 50-day at $15.03 a share or around more key near-term support at $14.72 a share. One could also buy ANFI off strength once it starts to clear $17.41 a share with volume and then simply use a stop that sits a comfortable percentage from your entry point.

  • [By Tom Bishop]

    Steve Halpern: One of your recent recommendations is a company that, really, was probably unknown to most investors. It's called Amira Nature Foods (ANFI) , which is a maker of premium rice. Can you tell us briefly about that?

  • [By Will Ashworth]

    Amira Nature Foods (ANFI) went public last October at $10 per share — ! and now t! he stock is trading around 40% higher than that offer price. Compared to IPOs in general, however, the past year’s been anything but smooth. ANFI dropped 19% on its first day of trading and didn’t rise above its offering price until early September.

  • source from Top Stocks For 2015:

Top Prefered Companies For 2015

Top Prefered Companies For 2015: Greatbatch Inc. (GB)

Greatbatch, Inc. provides technology solutions for medical and industrial applications. The company operates in two segments, Greatbatch Medical and Electrochem Solutions. The Greatbatch Medical segment designs and manufactures systems, components, and devices for the cardiac rhythm management, neuromodulation, vascular access, and orthopaedic markets. Its products include batteries, capacitors, filtered and unfiltered feedthroughs, engineered components, and enclosures used in implantable medical devices; instruments and delivery systems used in hip and knee replacement, and trauma and spine surgeries, as well as in hip, knee, and shoulder implants; and introducers, catheters, steerable sheaths, and implantable stimulation leads. This segment also offers value-added assembly and design engineering services for medical systems and devices. It serves primarily multi-national original equipment manufacturers. The Electrochem Solutions segment provides technology solutions fo r critical industrial applications, including customized battery power and wireless sensing systems. This segment?s products comprise cells, primary and rechargeable battery packs, and wireless sensors. It serves companies involved in energy, security, portable medical, and environmental monitoring markets. This segment sells its products directly to end users and original equipment manufactures. Greatbatch, Inc. sells its products primarily in the United States, Puerto Rico, the United Kingdom, Ireland, France, and Belgium. The company was founded in 1970 and is based in Clarence, New York.

Advisors' Opinion:
  • [By Seth Jayson]

    Calling all cash flows
    When you are trying to buy the market's best stocks, it's worth checking up on your companies' free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headli! nes. That's what we do with this series. Today, we're checking in on Greatbatch (NYSE: GB  ) , whose recent revenue and earnings are plotted below.

  • source from Top Stocks For 2015:

Thursday, May 29, 2014

Wine collector apologizes for bogus bottle scam

NEW YORK (AP) — A wine collector convicted of fraud for manufacturing fake vintage wine in his California kitchen has asked a judge for leniency Thursday, saying his actions were foolish.

Rudy Kurniawan told the judge in a letter that he "never meant to hurt or embarrass anyone" and asked that he be allowed to return to his ailing 67-year-old mother.

Kurniawan's letter to U.S. District Judge Richard M. Berman was filed the same day his sentencing was postponed to July 17.

A jury convicted Kurniawan in December of mail and wire fraud charges that could bring up to 40 years in prison. Prosecutors say federal sentencing guidelines call for him to serve at least 11 years in prison while defense lawyers say the two years he has spent in prison already is sufficient punishment.

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Prosecutors say Kurniawan, 37, made between $8 million and $20 million from 2004 to 2012 by selling bogus bottles of wine he manufactured in his Arcadia, Calif., kitchen. The government said the profits enabled him to live affluently in suburban Los Angeles, mingling with wealthy and influential people interested in vintage wine as he bought luxury cars, designer clothing and dined at the best restaurants.

The trial featured testimony from billionaire yachtsman, entrepreneur and wine investor William Koch, who said Kurniawan conned him into paying $2.1 million for 219 fake bottles of wine.

Kurniawan, whose family became wealthy operating a beer distributorship in Indonesia, said his own obsession with fine wines led him to actions that were wrong, both morally and socially, and he will return to Indonesia after he serves his sentence.

"Wine became my life and I lost myself in it," he wrote. "What originally started out as buying a few bottles of wine at a local store over the course of years turned into buying millions of dollars worth of wine."

He said his obsession att! racted attention from successful and intelligent people whose acceptance he craved.

"I now realize that all this was false and pretentious and that my priorities were completely out of order. The things I did to maintain this illusion were so foolish. The end was inevitable," he added.

Top 10 Solar Stocks To Invest In Right Now

Top 10 Solar Stocks To Invest In Right Now: Hanwha SolarOne Co. Ltd.(HSOL)

Hanwha Solarone Co., Ltd., an investment holding company, engages in the manufacture and sale of silicon ingots, silicon wafers, and PV cells and modules. The company also offers mono crystalline and multi crystalline silicon cells; and provides PV module processing services. It sells its products to solar power system integrators and distributors primarily in Germany, Italy, Australia, the United States, the Czech Republic, Spain, and China. The company was formerly known as Solarfun Power Holdings Co., Ltd. and changed its name to Hanwha SolarOne Co., Ltd. in December 2010. Hanwha Solarone Co., Ltd. was founded in 2004 and is based in Qidong, the People?s Republic of China.

Advisors' Opinion:
  • [By Rebecca McClay]

    The tech market's news today includes a plunge in Hanwha SolarOne Co. Ltd. (Nasdaq: HSOL) shares, which are down 5% in morning trade after its second-quarter loss narrowed to $0.32 per share from a loss of $0.43 in Q1.

  • [By Travis Hoium]

    News and notes
    Hanwha SolarOne (NASDAQ: HSOL  ) announced another $100 million in financing this week, this time a term loan from the Export-Import Bank of Korea.

  • [By Paul Ausick]

    Big Earnings Movers: Hanwha SolarOne Co. (NASDAQ: HSOL) is down 13.9% at $4.36. D.R. Horton Inc. (NYSE: DHI) is up 4.7% at $18.91 on good earnings boosted by land sales.

  • source from Top Penny Stocks For 2015:

Wednesday, May 28, 2014

Valeant vs Allergan: Street Unimpressed by Bigger Offer

 Valeant Pharmaceuticals (VRX) has revised its offer to buy Botox-maker Allergan (AGN), upping the size of the overall deal, as well as the cash component. Wall Street, however, isn’t rejoicing.

Shares of Allergan fell 4.2% in morning market action to $158 a share, while Valeant fell 3.3% to $125.65 a share. That's quite a changeover pace from the kick both stocks received last month when Valeant and hedge fund manager Bill Ackman unveiled their alliance to purchase Allergan in a stock and cash deal worth $46 billion.

Today's bid is worth $49.5 billion, an increase of 8.5% over its previous offer. But at roughly $166.16 per share, it's below the $185 to $200 per share expected by Stern Agee's Shibani Malhotra in a note published yesterday.

Valeant's; new offer includes $58.30 per share in cash. Still, the deal still has a very large stock component. Allergan's board said it "would carefully review and consider" the bid.

In a report published this morning, Credit Suisse writes that Valeant's offer "is better, but may not be compelling enough given AGN’s strong standalone outlook…Given that the majority of the offer would still be in VRX stock, how one values VRX stock goes a long way to determining the true value of the deal."

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In a nod to investors' worry that Valeant would gut Allergan's R&D pipeline, the drug maker is proposing a contingent-value right potentially worth up to $25 a share for the vision-loss drug DARPin, and the company pledged to continue investing to develop the product.

Still, many analysts still argue that Allergan can go it alone. Buckingham Research Group's David Buck writes:

Given the still high stock component of proposed transaction, effectively a bet on a rising Valeant share price, it is unclear that this proposed transaction can match Allergan standalone's options.

Credit Suisse's Vamil Divan writes:

We still believe that AGN has several ways that they can boost standalone value of the firm, if not possibly fending off VRX completely. Strong base business and balance sheet leave AGN many options and we see them being more proactive in the face of VRX’s bid.

And Aaron Gal at Bernstein Research writes:

Not impressive…The offer continues to under-estimate Allergan value as stand-alone entity. As we noted previously, Allergan has recently increased its earnings expectations for 2014 (mid-point 5.69). It projects 2015 YoY EPS growth to 20-25% and 20% EPS CAGR for the following four years. As the putative Valeant deal will close after 1/1/2015, most investors will compare the Valeant deal to AGN value on a 2016 basis. This suggests value range of $167 to $184 as a stand-alone company (20x-22x ’16 EPS of $8.36). Thus, at the current VRX stock price, the current offer is inferior to AGN on a standalone basis. Further, even if the Valeant multiple was to expand to 12.5x its guidance for 2015 post-deal EPS of $12.74, the value of the offer is $190, not have much in the way of a control premium. Σ We think Valeant is expecting Allergan shareholders will continue to believe the stock will decline to its pre offer range ($120-$130) if the offer was not to materialize. This is, in our view, unlikely. Given the new guidance, the stock may decline to $140 (20x 2015) but is then likely to rebound immediately afterwards. We hoped for something more imaginative, like substantially altering the share of cash and stock Valeant will use or a more substantial increase in the value offer ($30) or $9B, which is one year’s worth of the combined company EBITDA.

New Rental Securitization Deal Likely Heralds Double Dip in Housing

Editor's Note: This morning, JPMorgan Chase, Deutsche Bank, and Credit Suisse will begin pitching the first-ever bond backed by U.S. home rental cashflows - a $500 million trade for Blackstone, a huge private equity firm. The road show begins with investor meetings in New York, and then moves on to Boston and Los Angeles before wrapping on Friday. This is a game-changing event, according to Shah. We wanted to share his analysis with you today, as the banks make their pitch, because of this deal's massive implications...

Today, in New York, investors will be pitched the first-ever REO-to-rental securitization deal. The $500 million deal bundles foreclosed single-family homes, "real-estate-owned" by Blackstone Group L.P. (NYSE: BX) , into securities that pass-through rental payments to investors.

The new securitization of rental properties comes at a time when home prices have rebounded dramatically across the country. But rather than confirming a bull market in housing, the "trade," as Reuters calls the transaction, likely heralds a coming double dip.

The upward trajectory of housing prices, fueled by private equity companies and hedge funds' cash purchases, now faces institutional liquidity demands - and their potential exit.

Here's what the Blackstone deal is all about, why its structure is problematic, how the ratings agencies will view it, and what it portends for the future.

This is a very big deal...

A New Way to Cash In on Housing Inventory

Blackstone Group, the world's largest private equity company, has since 2009 spent approximately $7.5 billion buying close to 40,000 foreclosed single-family homes across the U.S. While Blackstone is the largest owner of single-family homes purchased to rent, they are by no means the only institution heavily invested in this "trade."

Hedge funds and private equity companies stepped into the depressed housing market as banks and other institutions looked to offload huge inventories of foreclosed homes while mortgage lending standards and the Great Recession boosted interest in the rental market.

Blackstone's Invitation Homes unit rents out its properties that, according to sources familiar with Blackstone's purchases in areas such as Tampa and Phoenix, are typically three-bedroom, two-and-one-half bath homes averaging approximately 1,900 square feet.

The Invitation Homes 2013-SFR-1 securitization deal is structured as a real estate mortgage investment conduit (REMIC). REMICs are the preferred structure of mortgage-backed-securities (MBS) and collateralized debt obligations (CDO).

REMICs offer tax advantages, and they define mortgage-backed securities' offerings and "permitted investments" - including cash flow investments, qualified reserve assets, and foreclosure property - as a sale of assets. This effectively removes the loans from the originating lender's balance sheet, as opposed to debt financing, in which loans and property remain as balance sheet assets.

Now, here's where things get interesting.

REMICs Are Legal Pyramid Schemes

There's a lot to a REMIC, but suffice it to say that, as a type of special-purpose vehicle structure, if their AAA ratings (which many "vintage" MBSs and CDOs once proudly waived at investors) are downgraded, they can easily be put into another trust, sliced into at least two parts, and have a substantial portion of the "re-REMIC's" securities again rated AAA.

What's interesting about the Invitation Homes securities is their one purported AAA rating.

The deal is expected to be rated by Kroll, Morningstar, and Moody's. Moody's may bestow the coveted AAA investment-grade rating on the issue, because homes in the portfolio have been secured by individual mortgage liens - as opposed to an equity pledge by the property-owning special purpose vehicle (SPV).

Any AAA rating is even more interesting, given one senior structured-credit portfolio manager's comments to Reuters on rating the first-ever REO-to-rental deal. He said, "Almost every ratings agency out there came out with criteria reports or commentaries this year saying an inaugural deal cannot get to Triple A. They said it would be Single A at most. It doesn't make sense, the agencies drew that line in the sand; they're on the record."

Top 10 Wireless Telecom Stocks To Buy Right Now

And, most interesting of all is that the REMIC structure allows issuers to re-REMIC thousands of downgraded REMIC-structured MBS pools into larger pools and again slice them into at least two tranches whereby lower tranches subordinate prime tranches, giving them a AAA rating yet again.

While that looks like - and essentially is - a kind of pyramiding, it is legal and sanctified.

This is because re-REMICing allows banks and other financial institutions to hold formerly downgraded securities (that they otherwise would have to account for as impaired or sell at a loss) as - presto change-o! - AAA-rated securities with significantly lower reserve requirements. It's not that re-REMICs don't then get downgraded - they do - but the game can be played over and over.

That's another reason the Invitation Homes deal is structured as a REMIC: It can always be re-REMIC'd.

No one expected Blackstone to pony up billions in cash from its institutional investors - including a $2.1 billion loan syndicated by the Invitation Homes lead underwriter Deutsche Bank - and not find a way to monetize its holdings. Blackstone's equity is leveraged by debt - very cheap debt thanks to the Federal Reserve's quantitative easing program.

Before costs for fixing up homes, insurance, taxes, and vacancies, Blackstone's new deal probably translates into rents that yield 6% to 8%. And, on a leveraged basis, it could yield Blackstone a return in the low teens - perhaps well above 20% - if portfolio homes appreciate handsomely.

But don't count on that.

Are the Rats Leaving the Sinking Ship?

Other players in the game have already exited the "trade," citing too much cheap money chasing the same trade, bidding up home prices to unsustainable levels along the way.

Och-Ziff Capital Management, a $32 billion hedge fund - and one of the first entrants into the buy-to-rent market - exited the whole business last October.

Carrington Mortgage Holdings, a division of Carrington Capital, is paring back its expectations and purchases.

Citing the influx of institutional money-chasing deals that are bringing down net returns, Carrington Mortgage's Executive Vice President Rick Sharga recently said, "It's not surprising that some investors may have overestimated rental returns. If you're an investor getting into this cold you were probably making assumptions based on models rather than experience."

Meanwhile Carrington's CEO Bruce Rose, one of the pioneers in bringing hedge funds like Oaktree Capital Management in as partners, is now saying, "We just don't see the returns there that are adequate to incentivize us to continue to invest."

And as recently as last June, Colony American Homes, another big player in the REO to rental space, pulled its IPO based on lackluster demand for its share offering.

Now that institutional buyers have bid up foreclosed homes and, in what amounts to a short-squeeze, ratcheted up home prices around the country, the questions to ask are: Is the recovery sustainable? Can home prices firm up at current levels and go higher? Is there underlying demand to support the rise in prices caused by institutional demand pull?

The short answer: Probably not.

With regard to "growth being propelled by institutional money," Fitch Ratings' analyst Suzanne Mistretta says, "The question is how much the change in prices really reflects market demand, rather than one-off market shifts that may not be around in a couple of years."

In a couple of years?

Institutional buyers are looking for the exit doors now.

With FICO scores dropping from foreclosure proceedings, high structural unemployment, and no meaningful jobs growth on the horizon, REO-to-rental business models had better model factors like tenants' employment prospects and desire to maintain - even if they stop paying rent - properties where they have no skin in the game.

It's not inconceivable that some of the $10 billion in REO-to-rental deals estimated to be in the pipeline over the next 18 months could see significant credit events causing their ratings to be lowered, especially if they are AAA to start with. We've seen that movie before and we know how it ends.

What makes me believe the rebound in home prices is unsustainable is that the once-popular, easy-money loan programs like exotic interest-only loans, negative amortizing loans, Pay Option adjustable-rate mortgages, and all the rest of the loan products that made buying a home possible are gone. And in their place are the tried and true, old-fashioned, fixed-rate 15- and 30-year maturity, plain-vanilla mortgage loans. And most of those require 20% down and are doled out grudgingly - at best.

There are far more negative questions than optimism on the housing horizon: Where's the new mortgage money going to come from? How hard will it become to get a mortgage? What if Fannie and Freddie are dismembered?

As Yogi Berra famously said, "When you reach the fork in the road, you take it."

I'm taking the path of least resistance and lining up my negative bets. It's almost time again.

Tuesday, May 27, 2014

PIMCO Brings Back McCulley

PIMCO said Monday that it has rehired Paul McCulley to serve as a managing director and take on a new role as the group’s chief economist. McCulley, who worked for the firm from 1990 to 1992 and 1999 to 2010, also will be a member of PIMCO’s Investment Committee and will report directly to founder and Chief Investment Officer Bill Gross.

“Paul is an experienced and respected thought leader on macroeconomic issues and central banks, and he will be an important contributor to our investment process,” Gross said in a press release.

PIMCO — which lost its then-CEO and co-CIO Mohamed El-Erian earlier this year — could benefit from both new leadership and new investor interest. The bond shop had net outflows of $5.5 billion last month, according to Morningstar, bringing its year-to-date outflows to some $21 billion and its 12-month outflows to $80 billion.

(Since El-Erian's departure in January, PIMCO has tapped Doug Hodge as its CEO and appointed six deputy chief investment officers.)

McCulley will not manage client portfolios or serve as a portfolio manager, but he will spend up to 100 days per year working in PIMCO offices around the world. The economist also plans to dedicate some time to non-PIMCO activities, namely leading the Morgan le Fay Dreams Foundation.

McCulley first joined PIMCO in 1990 as an account manager. He left two years later to become chief economist for the Americas for UBS. In 1999, he returned to PIMCO to work as a portfolio manager; he later became the head of the firm’s short-term desk and a member of the Investment Committee.

Over the past three years, the economist, 57, has been chair of the Global Society of Fellows at the Global Interdependence Center, and has published two papers on monetary and central bank policy.

McCulley is known for coining the term “shadow banking system” as a reference for nonbank financial intermediaries that provide similar services and had a role in the global financial crisis. He also drew attention to the concept of the “Minsky Moment,” a sudden major collapse of asset values.

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"I look forward to working side by side with Bill as economic counselor and interacting with the deputy CIOs,” McCulley said in a statement. “I anticipate writing frequent scholarly essays, as well maintaining a robust calendar of speaking engagements. PIMCO will always be Camelot to me."


Timkin Splitting In Two, Stock Higher After Hours

Timken said after the close Thursday that it would split into two businesses: engineered steel, and bearings and power transmission.

Shares of the specialty steel-products company Timken  (TKR) were up 3% Thursday to close at $60.26, and they rallied another 6% to $64, a new 52-week high, after the close.

The Canton, Ohio company said that “upon separation,” the current CEO James W. Griffith, 59, will retire.

The company said in a prepared release that Timken steel would be a tax-free spinoff to be completed in the next 12 months. Ward J. Timken, Jr. will be chairman and CEO of new engineered steel company, which would have $1.7 billion in revenue. Richard G. Kyle is to be president and CEO of the global bearings and power transmission company, with $3.4 billion in revenue. John M. Timken, Jr. will be non-executive chairman. 

As we reported last fall, activist fund Relational Investors wanted Timken to split into two publicly traded companies, and the idea also had support from the California State Teachers' Retirement System.

Monday, May 26, 2014

The Best Way To Profit From Europe's Recovery

Europe, which has been long believed to be simply too volatile for prudent long-term investors, appears to have turned the corner. 

The world experienced years of one crisis after another sweeping the eurozone. These financial missteps destabilized the equity markets, creating a dangerous place for investors. Last year, European Central Bank President Mario Draghi made the unprecedented promise that he will "do whatever it takes" to save the common currency. This single statement has led to greater stability to the European Union's (EU) economy and growth in the stock market.


Certainly, not all regions are thriving, but things are improving enough to create a compelling case for diversification into the European stock markets. 

The primary reason for this improvement is the full-force support of the EU Central Bank for the unified euro currency. Fears of the euro being devalued or even eliminated resulted in deep economic stability concerns due to lack of trust in the currency. Now, these fears have lifted, bringing back the confidence needed for stock market growth. 

Signs of greater confidence in the EU economy include the first signs of growth for the past six quarters. In the second quarter, the eurozone economy beat estimates by expanding 0.3%. Clearly, this isn't much, but it's the first green sprouts after the long economic winter.

As an investor, what I like best is the fact that euro stocks trade at a 25% discount to long-term valuation. Overall, euro stocks are at a 50% discount to the book value of U.S. stocks. The European economic crisis has created opportunities for savvy investors. 

How To Profit
The smartest way investors can profit from Europe's upward economic momentum is through exchange-traded funds (ETFs), which provide targeted exposure combined with professionally managed diversification within the particular niche. They make much more sense than an investor attempting to purchase individual companies within the region to capture profits. 

My favorite ETF to ride Europe back to prosperity is the Vanguard FTSE Europe ETF (NYSE: VGK). As its name implies, this ETF is intended to mirror the performance of the FTSE Developed Europe Index. Launched in 2005, the fund represents companies in 15 EU countries and is well capitalized with an asset foundation of just under $6 billion. It also boasts substantial liquidity with about 2 million shares traded. 

The fund holds 503 stocks, with slightly more than 19% of the portfolio held in the top 10 holdings. No individual holding exceeds 3%, with Nestle the largest individual holding at 2.9%. Royal Dutch Shell and HSBC Holdings take the second- and third-heaviest weighted allocations.

VGK's Top 10 Holdings

Financial services is the largest single sector with consumer defensive and industrials filling the second- and third-biggest sectors.

VGK's Sector Weightings

There has recently been a significant increase in capital flowing to this fund in the seven days prior to Aug. 20. According to research firm ETF Channel, there was a $621 million inflow, a week-over-week increase of just over 8%. 

Over the past year, the fund has returned 12.5% with a yield a little less than 5.5%.

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A look at the technical picture shows VGK has been in a sharp uptrend since June 24. The fund has climbed more than 12% to the $53 area in the past two months. Technical support exists at $52, creating a strong risk-to-reward ratio for a long-term entry.

Risks to Consider: The eurozone is improving, but it still has a long way to go. Southern regions such as Italy and Spain may continue to struggle while they gain footing. I'm not suggesting that investors go all-in on the pending EU recovery, as the risk remains high despite the positive signs. However, it is time to start diversifying into Europe to capture the substantial upside potential.

Action to Take --> Entering the VGK ETF at the current level in the $53 area with stops just below support at $52 makes solid technical sense. My six-month target for shares is $60.

Saturday, May 24, 2014

How Shopping American-Style Will Soon Look

Hointer/APA woman demonstrates shopping technology at a store called Hointer in Seattle. NEW YORK -- When it comes to shopping, more Americans are skipping the stores and pulling out their smartphones and tablets. Still, there's more on the horizon for shopping than just point-and-clicking. No one thinks physical stores are going away permanently. But because of the frenetic pace of advances in technology and online shopping, the stores that remain will likely offer amenities and services that are more about experiences and less about selling a product. Think: Apple's (AAPL) stores. Among the things industry watchers are envisioning are holograms in dressing rooms that will allow shoppers to try on clothes without getting undressed. Their homes will be equipped with smart technology that will order light bulbs before they go dark. And they'll be able to print out a full version of coffee cups and other products using 3-D technology in stores. "Physical shopping will become a lot more fun because it's going to have to be," retail futurist Doug Stephens says. More Services Forrester analyst Sucharita Mulpuru says stores of the future will be more about services, like day care, veterinary services and beauty services. Services that connect online and offline shopping could increase as well, with more drive-thru pickup and order-online, pick-up-in-store services. Checkout also will be self-service or with cashiers using computer tablets. Some stores are taking self-service further: A store in Seattle called Hointer displays clothing not in piles or on racks but as one piece hanging at a time, like a gallery. Shoppers just touch their smartphones to a coded tag on the item and then select a color and size on their phone. Technology in the store keeps track of the items, and by the time a shopper is ready to try them on, they're already at the dressing room. If the shopper doesn't like an item, he tosses it down a chute, which automatically removes the item from the shopper's online shopping cart. The shopper keeps the items that he or she wants, which are purchased automatically when leaving the store, no checkout involved. Nadia Shouraboura, Hointer's CEO, says once shoppers get used to the process, they're hooked. On-Demand Coupons Some stores, including British retailer Tesco and drugstore Duane Reade, now are testing beacons, Bluetooth-enabled devices that can communicate directly with your cellphone to offer discounts, direct you to a desired product in a store or enable you to pay remotely. For example, you can walk into a drugstore where you normally buy face cream. The beacon would recognize your smartphone, connect it with past purchasing history and send you a text or email with a coupon for the cream. "The more we know about customers ... you can use promotions on not a macro level but a micro level," says Kasey Lobaugh, chief retail innovation officer at Deloitte Consulting. A store could offer a mother 20 percent off on Mother's Day, for example, or offer frequent buyers of paper towels a discount on bulk purchases. 3-D Printing Within 10 years, 3-D printing could make a major disruption in retail, Deloitte's Lobaugh predicts. Take a simple item like a coffee cup. Instead of producing one in China, transporting it and distributing it to retail stores, you could just download the code for the coffee cup and 3-D print it at a retail outlet or in your own home. "That starts a dramatic change in terms of the structure of retail," Lobaugh said. And while 3-D printing today is primarily plastic, Lobaugh says there are tests at places like MIT Media Lab and elsewhere with other materials, including fabric. Right now a few stores offer rudimentary 3-D-printing services, but they are very limited. He predicts the shift will come in 10 to 20 years. Order Yourself Steve Yankovich, head of innovation for eBay (EBAY), thinks someday buying household supplies won't take any effort at all. He says someday a connected home could be able to use previous customer history and real-time data the house records to sense when a light bulb burns out, for example, and order a new one automatically. Or a washing machine will order more detergent when it runs low. "A box could show up on porch with this disparate set of 10 things the connected home and eBay determined you needed to keep things running smoothly," he says. "It's called zero-effort commerce." Holograms EBay recently bought PhiSix, a company working on creating life-size 3-D models of clothing that can be used in dressing rooms to instantly try on different colors of clothing or different styles. You can see 30 or 40 items of clothing realistically without physically trying them on. EBay's Yankovich says the technology can be used in a virtual dressing room as well, showing what the clothes look like when you are, say, walking down the street or hitting a golf club. Some companies have been testing this already. British digital agency Engage created a Virtual Style Pod that scanned shoppers and created a life-size image onto which luxury clothing from brands like Alexander McQueen and DKNY were projected. The Pod was displayed in shopping centers in Dubai and Abu Dhabi in the United Arab Emirates.

Thursday, May 22, 2014

Allison Couch rejoining the AIG Advisor Group

Allison Couch, the former managing director of wealth management for Cetera Financial Group, will join the AIG Advisor Group next month in the newly created role of executive vice president, national sales.

She will report to Erica McGinnis, president and chief executive of the AIG Advisor Group.

Ms. Couch previously worked at the AIG Advisor Group broker-dealers, starting in 1993, eventually becoming vice president of business development for Royal Alliance Associates Inc. and then senior vice president of business development with FSC Securities Corp. She left AIG in 2008.

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“I'm eager to work closely with the AIG Advisor Group team to deliver business building tools and value-added programs that help advisers grow revenues and better manager their businesses,” she said in a statement.

Wednesday, May 21, 2014

Rieder: Newspapers' urgent need to innovate

For the past week, the news about the news media, quite understandably, has been dominated by the botched firing of New York Times executive editor Jill Abramson and its toxic aftermath.

But there's also some other New York Times news that has great significance for the future of the embattled newspaper business in the digital age.

The Times' report on innovation, put together by a task force headed by A.G. Sulzberger, son of the newspaper's besieged publisher, has implications that resonate far beyond the Times' midtown Manhattan redoubt. It's must reading for newspaper executives and staffers across the country, and for everyone who cares about journalism.

The ambitious report, posted last week by BuzzFeed, finds that the Times is lagging dangerously when it comes to adapting to the digital future. More broadly, it also shines a bright beacon on the severe challenges facing an entrenched business threatened by massive disruption.

The report makes clear how hard it is for people and institutions to change what they have been doing for years, regardless of the perceived need to do things differently and the rhetoric that accompanies it. And it underscores how difficult it is for established players to compete with nimble new foes unencumbered by the weight of tradition.

The Times has made some great strides in the realm of digital journalism. Its treatment of Snow Fall, its riveting account of a fatal avalanche in Washington state, was a brilliant example of taking advantage of the attributes of the digital platform.

But in many ways, the report states forcefully, the news outlet is hamstrung by its inability to shed the obsession with print habits and customs. A disproportionate amount of time, energy and thinking, for example, is spent on the front page of the next day's newspaper while news is exploding 24/7. The Times' website is organized around print sections.

There is no way to exaggerate the cataclysmic impact the Internet has had on the newspaper industr! y, once made up largely of monopoly businesses with stratospheric profit margins,

Jill Abramson, former executive editor at the New York Times during commencement ceremonies for Wake Forest University May 19.(Photo: Chris Keane, Getty Images)

As is often the case with disruptive challenges, the initial industry instinct was to dismiss the Web, to minimize its ramifications, to write it off as a fad. When it became clear that the digital realm was here to stay, the response too often was to take material from the print product and simply dump it onto the web, completely ignoring the differences between the platforms. There was the deep-seated tendency to hold exclusive stories for print rather than posting them when they were available, for fear of "scooping yourself."

That seems awfully quaint today. We've obviously come a long way. But not nearly far enough. As the Innovation Report states, true transformation into a digital-first entity remains elusive at the Times -- and that's true elsewhere in the financially challenged industry. (The report cites a number of news outlets that it says are making strong digital strides, including digital natives BuzzFeed and The Huffington Post and legacy outfits such as USA TODAY and the Financial Times.)

The tendency at good newspapers traditionally has been to massage stories until they are airtight, and this predilection is mirrored on the business side. Before launching a new initiative, a legacy news outlet wants to make sure it's in tiptop shape. At a start-up, the instinct is to get the thing launched, work on getting it to the "good enough" stage and take it from there. BuzzFeed's evolution is a perfect illustration of that model.

The legacy instinct is commendable, but a for! midable h! andicap in today's hyperquick media environment.

Similarly, the tech world's determination to experiment, its willingness to "fail often, fail quickly," is anathema at more established businesses.

The situation is complicated by the fact that while the media world is evolving quickly, and while advertising revenue has dropped at an alarming rate, newspapers still make the bulk of their money from print.

One of the report's key recommendations is creation of a special digital strategy team that could focus entirely on reinvention for the future without the powerful distraction of daily news demands.

It's a good idea. Newspapers across the country would be wise to heed the report's message and redouble (or retriple) their efforts to forge a powerful, truly digital-first approach. Their survival depends on it.

Tuesday, May 20, 2014

Top 5 Specialty Retail Companies To Invest In Right Now

Top 5 Specialty Retail Companies To Invest In Right Now: Ulta Salon Cosmetics and Fragrance Inc (ULTA)

Ulta Salon, Cosmetics & Fragrance, Inc. (Ulta), incorporated on January 9, 1990, is a beauty retailer, which provides one-stop shopping for prestige, mass and salon products and salon services in the United States. During the year ended January 28, 2012 (fiscal 2011), the Company opened 61 new stores. It operates full-service salons in all of its stores. Its Ulta store format includes an open and modern salon area with approximately eight to 10 stations. The entire salon area is approximately 950 square feet with a concierge desk, skin treatment room, semi-private shampoo and hair color processing areas. Each salon is a full-service salon offering hair cuts, hair coloring and permanent texture, with salons also providing facials and waxing.

The Company offers products in the categories, such as cosmetics, which includes products for the face, eyes, cheeks, lips and nails; haircare, which includes shampoos, conditioners, styling products, and hair accessories; salon styling tools, which includes hair dryers, curling irons and flat irons; skincare and bath and body, which includes products for the face, hands and body; fragrance for both men and women; private label, consisting of Ulta branded cosmetics, skincare, bath and body products and haircare, and other, including candles, home fragrance products and other miscellaneous health and beauty products. The Company has combined its three operating segments: retail stores, salon services and e-commerce, into one reportable segment.

The Company competes with Macy's, Nordstrom, Sephora, Bath & Body Works, CVS/pharmacy, Walgreens, Target, Wal-Mart, Regis Corp., Sally Beauty and JCPenney salons.

Advisors' Opinion:
  • [By Rich Bieglmeier]

    [Related -Ulta Salon, Cosmetics & Fragrance,! Inc. (ULTA): Bullish Options Play Eyes Further Upside in Ulta]

    Ulta operates specialty retail stores in the United States. Its stores offer cosmetics, fragrance, haircare, and skincare products, as well as related accessories and services. As of February 1, 2014, the company operated 675 retail stores across 46 states. It also operates full services salons in its stores and distributes its products through operating

  • [By Jake L'Ecuyer]

    Equities Trading UP
    Ulta Salon, Cosmetics & Fragrance (NASDAQ: ULTA) shares shot up 7.31 percent to $96.05 after the company reported better-than-expected fourth-quarter earnings. Ulta Salon posted its quarterly earnings of $1.09 per share, beating analysts' estimates of $1.07 per share.

  • source from Top Stocks Blog:

Monday, May 19, 2014

5 Stocks Set to Soar on Bullish Earnings

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

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

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

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

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

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

My first earnings short-squeeze trade idea is enterprise cloud computing solutions player (CRM), which is set to release numbers on Tuesday after the market close. Wall Street analysts, on average, expect to report revenue of $1.21 billion on earnings of 10 cents per share.

Just this morning, RBC Capital said it expects's first-quarter results to beat expectations, maintaining a $75 per-share price target on stock and an outperform rating. Also, last week Morgan Stanley said is a top pick of 2014 driven by secular tailwinds and free-cash flow. Morgan has an overweight rating on the stock with a $79 per share price target.

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The current short interest as a percentage of the float for is pretty high at 8%. That means that out of the 565.21 million shares in the tradable float, 45.14 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 3.1%, or by about 1.33 million shares. If the bears get caught pressing their bets into a bullish quarter, then shares of CRM could easily rip sharply higher post-earnings as the shorts rush to cover some of their trades.

From a technical perspective, CRM is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has been uptrending a bit over the last few weeks, with shares moving higher from its low of $48.18 to its recent high of $54.21 a share. During that uptrend, shares of CRM have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of CRM within range of triggering a near-term breakout trade post-earnings.

If you're bullish on CRM, then I would wait until after its report and look for long-biased trades if this stock manages to break out above some near-term overhead resistance levels at $54.21 to its 50-day moving average of $55.07 a share with high volume. Look for volume on that move that hits near or above its three-month average volume of 6.72 million shares. If that breakout hits, then CRM will set up to re-test or possibly take out its next major overhead resistance levels at $57.40 to $59.35 a share. Any high-volume move above those levels will then give CRM a chance to tag $62 to $64 a share, or even its 52-week high at $67 a share.

I would simply avoid CRM or look for short-biased trades if after earnings it fails to trigger that breakout and then drops back below some key near-term support levels at $50.49 to $48.18 a share with high volume. If we get that move, then CRM will set up to re-fill some of its previous gap-up-day zone from last September that started at $42 a share.


Another potential earnings short-squeeze play is electronics specialty retailer Hhgregg (HGG), which is set to release its numbers on Tuesday before the market open. Wall Street analysts, on average, expect Hhgregg to report revenue $537.96 million on a loss of 17 cents per share.

This company recently announced that it has launched a brand transformation. The firm said the brand transformation will encompass all customer touchpoints, including its 228 store locations and online presence.

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The current short interest as a percentage of the float for Hhgregg is extremely high at 56%. That means that out of the 12.14 million shares in the tradable float, 6.86 million shares are sold short by the bears. This is a gigantic short position on a stock with a very low tradable float. Any bullish earnings news could easily spark a monster short-squeeze post-earnings for shares of HGG if the bears begin to cover some of their positions.

From a technical perspective, HGG is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock recently formed a double bottom chart pattern at $8.02 to $8.03 a share. Following that bottom, shares of HGG have started to spike higher and move within range of triggering a near-term breakout trade post-earnings.

If you're in the bull camp on HGG, then I would wait until after its report and look for long-biased trades if this stock manages to break out above some near-term overhead resistance levels at its 50-day moving average of $9.08 a share to more near-term overhead resistance levels at $9.24 to $9.38 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 420,646 shares. If that breakout triggers post-earnings, then HGG will set up to re-test or possibly take out its next major overhead resistance levels at $10.24 to 11.06 a share. Any high-volume move above those levels will then give HGG a chance to tag $11.64 to $13 a share.

I would simply avoid HGG or look for short-biased trades if after earnings it fails to trigger that breakout and then drops back below some key near-term support levels at $8.03 to $8.02 a share with high volume. If we get that move, then HGG will set up to re-test or possibly take out its next major support levels at $7.39 to its 52-week low of $7.23 a share. Any high-volume move below $7.23 will then push shares of HGG into new 52-week-low territory, which is bearish technical price action.

American Eagle Outfitters

Another potential earnings short-squeeze candidate is apparel and accessories retail player American Eagle Outfitters (AEO), which is set to release numbers on Wednesday before the market open. Wall Street analysts, on average, expect American Eagle Outfitters to report revenue of $648.73 million on earnings of 2 cents per share.

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The current short interest as a percentage of the float for American Eagle Outfitters is pretty high at 13%. That means that out of the 168.48 million shares in the tradable float, 22.07 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 6.7%, or by about 1.39 million shares. If the bears get caught pressing their bets into a strong quarter, then shares of AEO could easily spike sharply higher post-earnings as the bears rush to cover some of their positions.

From a technical perspective, AEO is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock recently formed a double bottom chart pattern $10.83 to $10.77 a share. Following that bottom, shares of AEO have now started to uptrend and it recently broke out above some near-term overhead resistance levels at $11.53 to $11.76 a share. Shares of AEO are now moving within range of triggering another big breakout trade if it can manage to take out some more key overhead resistance levels post-earnings.

If you're bullish on AEO, then I would wait until after its report and look for long-biased trades if this stock manages to break out above some near-term overhead resistance at $11.87 a share to its 50-day moving average of $11.89 a share (or Tuesday's intraday high if greater) with high volume. Look for volume on that move that hits near or above its three-month average action of 5.15 million shares. If that breakout starts post-earnings, then AEO will set up to re-test or possibly take out its next major overhead resistance levels at $13 to $13.50 a share, or even its 200-day moving average of $13.87 a share.

I would avoid AEO or look for short-biased trades if after earnings it fails to trigger that breakout and then drops back below some key near-term support at $11.50 a share with high volume. If we get that move, then AEO will set up to re-test or possibly take out its next major support levels at $10.83 to its 52-week low of $10.77 a share. Any high-volume move below $10.77 will then push shares of AEO into new 52-week-low territory, which is bearish technical price action.

China Ming Yang Wind Power Group

Another earnings short-squeeze prospect is megawatt-class wind turbines maker China Ming Yang Wind Power Group (MY), which is set to release numbers on Tuesday after the market close. There are currently no Wall Street analysts' estimates available for this company.

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The current short interest as a percentage of the float for China Ming Yang Wind Power Group is notable at 4.4%. That means that out of the 68.15 million shares in the tradable float, 3.32 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 4%, or by about 127,000 shares. If the bears get caught pressing their bets into a bullish quarter, then shares of MY could easily explode sharply higher post-earnings as the shorts jump to cover some of their trades.

From a technical perspective, MY is currently trending above its 200-day moving average and just below its 50-day moving average, which is neutral trendwise. This stock has been uptrending a bit over the last few weeks, with shares moving higher from its low of $2.16 to its recent high of $2.79 a share. During that uptrend, shares of MY have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of MY within range of triggering a big breakout trade post-earnings.

If you're bullish on MY, then I would wait until after its report and look for long-biased trades if this stock manages to break out above its 50-day moving average of $2.84 a share and then once it clears more near-term resistance levels at $3.07 to $3.14 a share with high volume. Look for volume on that move that hits near or above its three-month average action o 1.89 million shares. If that breakout hits, then MY will set up to re-test or possibly take out its next major overhead resistance levels at $3.71 to $4.20 a share, or even its 52-week high of $4.34 a share.

I would simply avoid MY or look for short-biased trades if after earnings it fails to trigger that breakout and then drops back below its 200-day moving average of $2.50 a share with high volume. If we get that move, then MY will set up to re-test or possibly take out its next major support levels at $2.16 to $2 a share, or even $1.91 a share.


My final earnings short-squeeze play is China-based social networking Internet platform player Renren (RENN), which is set to release numbers on Wednesday after the market close Wall Street analysts, on average, expect Renren to report revenue of $25.49 million on a loss of 6 cents per share.

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The current short interest as a percentage of the float for Renren stands at 6.6%. That means that out of the 136.38 million shares in the tradable float, 9.46 million shares are sold short by the bears. If this company can deliver the earnings news the bulls are looking for, then shares of RENN could easily rip sharply higher post-earnings as the shorts rush to cover some of their bets.

From a technical perspective, RENN is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has trending sideways and consolidating for the last two months, with shares moving between $3.12 on the downside and $3.59 on the upside. Any high-volume move above the upper-end of its recent range post-earnings could trigger a big breakout trade for shares of RENN.

If you're in the bull camp on RENN, then I would wait until after its report and look for long-biased trades if this stock manages to break out above some near-term overhead resistance levels at its 200-day moving average of $3.41 to some more near-term overhead resistance levels at $3.49 to $3.59 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 2.27 million shares. If that breakout materializes post-earnings, then RENN will set up to re-test or possibly take out its next major overhead resistance levels at $4.20 to its 52-week high at $4.79 a share.

I would avoid RENN or look for short-biased trades if after earnings it fails to trigger that breakout, and then drops back below some key near-term support levels at $3.20 to $3.12 a share with high volume. If we get that move, then RENN will set up to re-test or possibly take out its next major support levels at $3 to $2.85 a share, or even its 52-week low at $2.75 share. Any high-volume move below $2.75 will then push shares of RENN into new 52-week-low territory, which is bearish technical price action.

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

-- Written by Roberto Pedone in Delafield, Wis.


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Follow Stockpickr on Twitter and become a fan on Facebook.

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

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

You can follow Pedone on Twitter at or @zerosum24.

Saturday, May 17, 2014

Video Pimco Vice President Crescenzi Predicts Q1 2015 Fed Rate Hikes

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Friday, May 16, 2014

Abbott Laboratories Acquiring CFR Pharma for $3.3B (ABT)

On Friday morning it was announced that Abbott Labs (ABT) had made a definitive agreement to acquire CFR Pharmaceuticals, a Latin American pharmaceutical company.

The acquisition will more than double Abbott’s Latin American branded generics presence. Abbott Labs will be acquiring the holding company that owns 73% of CFR, and will conduct a public cash tender offer for the remaining shares of the company. If all publicly traded shares are bought, the deal will be worth $2.9 billion, plus the assumption of approximately $430 million in net debt. Abbott expects to add $900 million in sales in the first full year after acquisition, and expects double-digit sales growth in the years following.

10 Best Specialty Retail Stocks To Watch Right Now

Abbott chairman and CEO Miles D. White had the following comments about the acquisition: “With its scale and leadership positions in the region, strong commercial and development organizations, well-respected leadership team and a trusted portfolio of recognized brands, CFR is one of the leading branded generic companies in Latin America. This acquisition will significantly enhance and broaden Abbott’s Latin American footprint, and is well aligned with our long-term strategy and commitment to fast-growing markets.”

For more on pharmaceutical companies, check out: How Much Dividend-Paying Drug Makers Spend on Research and Development

Abbott stock was inactive in pre-market trading. YTD, the stock is up 2.64%.

ABT Dividend Snapshot

As of Market Close on May 15, 2014

WMT dividend yield annual payout payout ratio dividend growth

Click here to see the complete history of ABT dividends.

Thursday, May 15, 2014

Top 5 Gas Utility Companies To Watch For 2015

Last week was a great week to be a dividend investor. Not only did two of my top stocks declare fresh dividends, but both companies also raised those payouts. The ability to enjoy a rising dividend is one reason why I much prefer the income from my dividend stocks than the fixed rate I could be earning on a bond.

But not all dividend-paying stocks are equal. Some companies pay unsustainably high dividends, which is why it is important to double check the company's ability to actually pay its dividend, even if a raise would suggest investors have nothing to fear. With that in mind, let's drill down a bit deeper into the two companies that just gave me a raise.

A gushing of income growth
Oil and gas production company, ConocoPhillips (NYSE: COP  ) , announced that it was providing investors with a 4.5% raise this week. The company's CEO, Ryan Lance, pointed out that "[a] compelling dividend is a key part of our offering to shareholders and this increase is aligned with our commitment to target consistent dividend growth over time." This is actually the first raise investors have seen in a while because the company has been in the process of a major three-year repositioning program in which it shed billions of dollars in assets, including its refining arm Phillips 66 (NYSE: PSX  ) .

Top 5 Gas Utility Companies To Watch For 2015: iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD)

iShares iBoxx $ InvesTop Investment Grade Corporate Bond Fund, formerly known as iShares GS $ InvesTop Corporate Bond Fund, seeks investment results that correspond generally to the price and yield performance of the corporate bond market as defined by the iBoxx $ Liquid Investment Grade Index (formerly the GS $ InvesTop Index) (the Index). The Fund invests in a representative sample of the securities in the Index, which has a similar investment profile as the Index.

The Index measures the performance of a fixed number of highly liquid investment-grade corporate bonds. The Index is a rules-based index consisting of up to 100 highly liquid, investment-grade, United States dollar-denominated corporate bonds that seek to maximize liquidity while maintaining representation of the corporate bond market. The Fund's investment advisor is Barclays Global Fund Advisors.

Advisors' Opinion:
  • [By Chuck Saletta]

    Where to invest?
    There are countless possibilities for building your retirement portfolio to cover Social Security's gap, depending on your personal risk tolerance, timeline, and need for cash. Here are decent index-style ETFs across various asset types to consider when building your plan:

    Domestic stocks. The Vanguard Total Market (NYSEMKT: VTI  ) ETF is a one-stop-shop that gives you access to around 99.5% by market cap of the publicly held U.S. stocks traded on major exchanges. A mere 3% turnover and microscopically low 0.05% expense ratio makes this a low-cost way to invest in the overall stock market. Investment-grade bonds. The iShares iBoxx $Invest Grade Corp Bond � (NYSEMKT: LQD  ) ETF owns nearly $24 billion worth of investment-grade corporate bonds. A small 4% turnover and low 0.15% expense ratio make this a low-cost way to get bond exposure. Real estate. The SPDR Dow Jones REIT (NYSEMKT: RWR  ) ETF has a bit over $2 billion invested in real estate investment trusts, attempting to match the Dow Jones Select REIT index. With a reasonable 7% turnover and a still pretty low 0.25% expense ratio, this is a reasonable way to get real estate exposure without turning yourself into a landlord. Foreign stocks. Vanguard's Total International Stock Index (NASDAQ: VXUS  ) ETF has nearly $90 billion in foreign stocks under its control, owning pieces of more than 6,100 stocks from 45 countries. With a mere 3% turnover and low 0.16% expense ratio, it's one of the lowest-cost ways to get your hands on foreign companies without being an international accounting expert. Inflation-protected government bonds. The iShares Barclays TIPS Bond (NYSEMKT: TIP  ) ETF has around $20 billion invested in U.S. Treasury inflation-protected bonds. With a low expense ratio of 0.2% and a reasonable 10% turnover rate, it's a decent way to get exposure to inflation-protected bonds. Note, though, that

Top 5 Gas Utility Companies To Watch For 2015: Rambus Inc.(RMBS)

Rambus Inc. engages in the creation, design, development, and licensing of patented innovations, technologies, and architectures to digital electronics products and systems. Its patented innovations include Dual Edge Clocking, which is designed to allow data to be sent on the clock pulse; Variable Burst Length that improves data transfer efficiency by allowing varying amounts of data to be sent per a memory read or write request in dynamic random access memory (DRAM) and flash memory; and FlexPhase technology, which synchronizes data output and compensates for circuit timing errors. The company also offers Channel Equalization to improve signal integrity and system margins in high speed parallel and serial link channels; Module Threading, which improves the power efficiency of a memory module by applying parallelism to module data accesses; and MicroLens optical design technology, which provides optimum utilization of high-brightness light-emitting diodes (LED) in edge-lit lighting applications. In addition, it licenses its architectures and industry-standard solutions for use in digital electronics products and systems, including XDR Memory Architecture enabling the production of DRAM; XDR2 Memory Architecture that incorporates DRAM micro-threading for graphics intensive applications, such as gaming and digital video; Mobile XDR Memory Architecture, which enables applications, such as HD video recording and 3D gaming on battery powered mobile devices; RDRAM Memory used in play stations, Intel-based personal computers, televisions, and routers; and FlexIO Processor Bus, a high speed chip-to-chip interface. Further, the company offers industry-standard chip interface solutions, including DDRx; digital logic controllers for peripheral component interconnect express and other industry standard interfaces; and custom solutions for displays, LED backlights, and general lighting. Rambus Inc. was founded in 1990 and is headquartered in Sunnyvale, Ca lifornia.

Advisors' Opinion:
  • [By Jake L'Ecuyer]

    Rambus (NASDAQ: RMBS) was also up, gaining 13.36 percent to $9.66 as the company and Micron Technology (NASDAQ: MU) signed a broad patent cross license agreement.

  • [By Roberto Pedone]

    Rambus (RMBS) is a technology solutions company that brings invention to market. This stock closed up 4% to $9.25 in Tuesday's trading session.

    Tuesday's Range: $8.85-$9.39

    52-Week Range: $4.01-$10.85

    Tuesday's Volume: 1.93 million

    Three-Month Average Volume: 960,806

    From a technical perspective, RMBS soared notably higher here back above its 50-day moving average of $9.09 with heavy upside volume. This move also pushed shares of RMBS into breakout territory, since it took out some near-term overhead resistance levels at $9.17 to $9.24. This stock has been uptrending strong for the last month and change, with shares moving higher from its low of $7.95 to its intraday high of $9.40. During that move, shares of RMBS have been making mostly higher lows and higher highs, which is bullish technical price action.

    Traders should now look for long-biased trades in RMBS as long as it's trending above some near-term support levels at Tuesday's low of $8.85 to $8.87 and then once it sustains a move or close above Tuesday's high of $9.40 with volume that hits near or above 960,806 shares. If we get that move soon, then RMBS will set up to re-test or possibly take out its next major overhead resistance levels at $10 to its 52-week high at $10.85 Any high-volume move above $10.85 will then put $12 into range for shares of RMBS.

  • [By ICRAOnline]

    Technology licensing company Rambus (RMBS) displayed good momentum in its fourth-quarter results. However, uncertainty looms as the company forecasted a growth rate of just 6.5% ��significantly lower than last year�� 14.0%. This could reflect uncertainty in the company�� LED business and the semiconductor industry as a whole. Let�� take a brief look at the highlights for the quarter.

5 Best Transportation Stocks To Own For 2015: Public Service Enterprise Group Incorporated(PEG)

Public Service Enterprise Group Incorporated, through its subsidiaries, operates in the energy industry primarily in the northeastern and mid Atlantic United States. The company primarily operates as a wholesale energy supply company that integrates its generating asset operations through its wholesale energy, fuel supply, energy trading, and marketing and risk management activities. It operates nuclear, coal, gas, and oil-fired generation facilities. The company also involves in the transmission of electricity and distribution of electricity and natural gas to residential, commercial, and industrial customers, as well as invests in the development of solar generation projects and energy efficiency programs. In addition, it owns and operates domestic projects engaged in the generation of energy; and offers appliance services and repairs to customers. As of December 31, 2010, it owned approximately 13,538 megawatts of generation capacity. The company also owned and operated approximately 17,608 miles of gas mains, 12 gas distribution headquarters, and 2 subheadquarters, as well as 62 natural gas metering and regulating stations. Public Service Enterprise Group was founded in 1985 and is based in Newark, New Jersey.

Advisors' Opinion:
  • [By Jake L'Ecuyer]

    Leading and Lagging Sectors
    Utilities sector surged 0.26%, saw CPFL Energia SA (NYSE: CPL) as the top gainer. Among leading sector stocks, gains came from Consolidated Water Co (NASDAQ: CWCO), Companhia Paranaense de Energia (NYSE: ELP) and Public Service Enterprise Group (NYSE: PEG).

Top 5 Gas Utility Companies To Watch For 2015: Triad Guaranty Inc (TGICQ)

Triad Guaranty Inc., incorporated in 1993, is a holding company which, through its wholly-owned subsidiary, Triad Guaranty Insurance Corporation (TGIC), is a nationwide mortgage insurer. During the year ended December 31, 2011, Collateral Mortgage, Ltd. (CHL) owns 16.8% of the common stock of TGI. The Company has historically provided Primary and Modified Pool mortgages guaranty insurance coverage on United States residential mortgage loans.

Primary insurance provides mortgage default protection to lenders on individual loans and covers a percentage of unpaid loan principal, delinquent interest and certain expenses associated with the default and subsequent foreclosure (collectively, the insured amount or claim amount). Primary insurance was written on both flow and structured bulk transactions. Flow transactions consisted of loans originated by lenders that were submitted to the Company on a loan-by-loan basis, whereas structured bulk transactions involved underwriting and insuring a group of loans with individual coverage for each loan. Insurance on primary policies consists of 80% of the Company's total insurance in force at December 31, 2011.

Modified Pool insurance was written only on structured bulk transactions. Policies insured as part of a Modified Pool transaction have individual coverage, but an aggregate stop-loss limit applies to the entire group of insured loans. In addition, some of the Modified Pool transactions included deductibles representing a percentage of the total risk originated under which the Company pays no claims until the losses exceed the deductible amount. Modified Pool insurance consists of 20% of the Company's total insurance in force at December 31, 2011.

Advisors' Opinion:
  • [By Zachary Tracer]

    Mortgage insurers PMI and Triad Guaranty Inc. (TGICQ) filed for bankruptcy after housing crashed. Old Republic International Corp. also retreated from the mortgage guaranty business.

Top 5 Gas Utility Companies To Watch For 2015: Societe Libanaise des Ciments Blancs SAL (CBN)

Societe Libanaise des Ciments Blancs SAL is a Lebanon-based joint stock company that operates in the construction materials industry sector. The Company is engaged in the production and sale of white cement. The Company is a 65.99% owned by Holcim (Liban) SAL. Advisors' Opinion:
  • [By CanadianValue]

    Nigeria�� reformed banking system has provided many foreigners with an attractive means to invest in the fast-growing domestic economy. The banking industry is important, not only because of the rise of microfinance, but because of the move by banks into consumer banking. Until recently, banks were mainly financing large businesses or the government through bond purchases. Following a banking crisis in 2008, the Central Bank of Nigeria (CBN) conducted an audit of the commercial banking sector. All banks that failed the audit had their CEOs replaced. The state-owned Asset Management Corporation (AMCON) was created to purchase non-performing loans and recapitalize the unhealthy banks. A recent review of the country�� banks by the IMF showed a dramatic increase in profits for the industry in 2012, while the capital adequacy ratio was above the minimum requirement of 10% and non-performing loans were below the mandated threshold of 5%5.