Is Mentor Graphics the Perfect Stock?

Every investor would love to stumble upon the perfect stock. But will you ever really find a stock that provides everything you could possibly want?

One thing's for sure: You'll never discover truly great investments unless you actively look for them. Let's discuss the ideal qualities of a perfect stock, then decide if Mentor Graphics (Nasdaq: MENT  ) fits the bill.

The quest for perfection
Stocks that look great based on one factor may prove horrible elsewhere, making due diligence a crucial part of your investing research. The best stocks excel in many different areas, including these important factors:

• Growth. Expanding businesses show healthy revenue growth. While past growth is no guarantee that revenue will keep rising, it's certainly a better sign than a stagnant top line.
• Margins. Higher sales mean nothing if a company can't produce profits from them. Strong margins ensure that company can turn revenue into profit.
• Balance sheet. At debt-laden companies, banks and bondholders compete with shareholders for management's attention. Companies with strong balance sheets don't have to worry about the distraction of debt.
• Money-making opportunities. Return on equity helps measure how well a company is finding opportunities to turn its resources into profitable business endeavors.
• Valuation. You can't afford to pay too much for even the best companies. By using normalized figures, you can see how a stock's simple earnings multiple fits into a longer-term context.
• Dividends. For tangible proof of profits, a check to shareholders every three months can't be beat. Companies with solid dividends and strong commitments to increasing payouts treat shareholders well.

With those factors in mind, let's take a closer look at Mentor Graphics.!

Factor

What We Want to See

Actual

Pass or Fail?

Growth 5-Year Annual Revenue Growth > 15% 2.0% Fail ? 1-Year Revenue Growth > 12% 18.6% Pass Margins Gross Margin > 35% 85.4% Pass ? Net Margin > 15% 7.7% Fail Balance Sheet Debt to Equity < 50% 26.7% Pass ? Current Ratio > 1.3 1.57 Pass Opportunities Return on Equity > 15% 10.0% Fail Valuation Normalized P/E < 20 28.69 Fail Dividends Current Yield > 2% 0% Fail ? 5-Year Dividend Growth > 10% 0% Fail ? ? ? ? ? Total Score ? 4 out of 10

Source: S&P Capital IQ. Total score = number of passes.

With a score of four, Mentor Graphics doesn't test out without some bugs. The company has gotten some attention from major investors but has definitely seen some ups and downs in the past year.

Mentor has a long history of using computer-aided design for building electronics. By automating the design and testing of hardware and embedded software in electronic components and systems, the! company hopes to reap the benefits of helping electronics manufacturers make products more efficiently. Mentor counts some well-known companies among its customers, including NVIDIA (Nasdaq: NVDA  ) , NetLogic (Nasdaq: NETL  ) , and a subsidiary of ARM Holdings (Nasdaq: ARMH  ) .

Unfortunately, Mentor also has a long history of mediocre shareholder returns. Over the past 17 years, Mentor shares have barely broken even. That compares badly to rivals Cadence Design Systems (Nasdaq: CDNS  ) and Synopsys (Nasdaq: SNPS  ) , both of which have had much better returns since 1984.

Those lackluster results were enough to attract the attention of activist investor Carl Icahn, who made an offer for Mentor earlier this year. Yet the company rebuffed Icahn, rejecting his bid of $17 per share. The stock trades well below that figure now, even after posting better-than-expected earnings late last week.

Mentor needs some general economic strength as well as better execution at the company level in order to improve its standing. If it can't accomplish that, it would be better off to give in to Icahn's advances and let shareholders escape with at least a modest buyout premium.

Keep searching
No stock is a sure thing, but some stocks are a lot closer to perfect than others. By looking for the perfect stock, you'll go a long way toward improving your investing prowess and learning how to separate out the best investments from the rest.

Click here to add Mentor Graphics to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.

Finding the perfect stock is only one piece of a successful investment strategy. Get the big picture by taking a look at our "13 Ste ps to Investing Foolishly."

Tags: 2012 Asia Stocks ,AGNC ,AMD ,CIM ,COH ,INTC ,NLY ,Top Stocks To Hold 2012 ,Top Stocks To Invest In ,10 Outstanding Dividend Stocks to Buy in This Crazy Market

Turn This Tiny Junk Mailer Into A 50% Return

For years, I had spent my career compiling penny stock ideas for this letter, as well as Penny Stock Fortunes. In that time, I'd like to think I did a pretty good job picking apart winners from losers.

So when I came across the one I'm going to show you today, I just had to let you know about it.

When it comes to making money in the stock market, rarely do I simply place bets. I want a little insurance for my money. I want it to pay me back on top of any extra growth I can find.

Today, I am going to let you in on my secret way to do that��

On the surface, Cenveo Inc (NYSE:CVO) looks like a bad bet. Investors have fled this seemingly small printing company. But that was simply a mistake. Smart money, as I'm about to show you, is doing things quite a bit differently.

For starters, let's dig into what Cenveo actually does. While its small cap status may seem like it might only have a few regional operations, that's wrong. The company is actually one of the largest nationwide printers. It even has international business.

When you receive a bill or an interest statement from your bank, you probably don't think much about it. You pay it or file it away, and that's the end of it. But its story is much more involved.

You see, big banks, credit card companies and even utility companies typically hire printers to send you those statements and bills. They sign large contracts with companies like Cenveo to handle that logistical side of their businesses. And when I say large, I mean it. Some of these contracts can be in the tens of millions of dollars. Cenveo handles one right now for American Express. Just imagine how many Am Ex statements go out every month.

On top of contract work, Cenveo is also a major independent printer. Think about all the junk mail you receive. The penny mailers, credit card offers, post cards telling you how much you can save by switching auto insurance. We all get those, probably hundreds of them througho! ut the y ear. Who do you think prints those? Contract printers like Cenveo�� that's who.

Finally, think about all the envelopes those mailers, statements, bills, etc. come in�� and all the ones with return envelopes inside. The amount of money that goes into envelopes alone in the U.S. is in the billions. Cenveo has been squeezing its way into this incredibly lucrative field over the past few years. Now, according to the company's CEO, one out of every four envelopes in the U.S. is made by Cenveo. That's an enormous amount of something most of us just throw away without looking at.

Speaking of the CEO, check this out. Over the past two years, CEO Robert Burton Sr.

has been purchasing shares of CVO every month. His monthly average open market purchase has been about 14,500 shares. With today's depressed share price, he claims to be picking up about 30,000 shares each month. Having someone on the inside with that kind of faith in the company is a tremendous asset to have.

You could certainly go out and pick up shares of CVO if you want. They may eventually work out for you. But I can tell you right now, that's not the best way to make money off this idea. Not even close��

Instead, you can use a strategy I call Income Safe IOUs to turn CVO into a bank account. Like a savings account or bank CD, you can use these Cenveo IOUs to pay you regular interest on your money. But unlike typical banks, this one comes with a massive, penny-stock-sized payout. And all of it, every dime of this return is contractually guaranteed. Good luck finding that in the stock market.

You see, 100% of this investment is guaranteed by law. You don't ever have to buy or sell a single share of CVO. And best of all, your income checks are scheduled years in advance. You'll know exactly how much you'll get paid, when you'll get paid.

I told a select group of readers about this opportunity a little over a month and a half ago. Here's what they have already had the chance to lock in:

That's a 50% return that's guaranteed by law. But look at the annual income that also comes with this play. That's $39.38 every six months, or 10.6% every year. The average savings account pays just 1% right now.

I want to give you the chance to get into this opportunity too. But there are more than 300,000 people that read Penny Sleuth. Obviously, I can't share it with that many people.

But I might be able to still help you. Be sure to keep a close eye on your inbox tomorrow where you will have the opportunity to get the details of this play��

Sincerely,

Jim Nelson
for The Penny Sleuth

{$end}

Tags: 2012 Chinese Stocks ,2012 Growth Stocks ,Growth Stocks 2012 ,Growth Stocks To Hold ,Growth Stocks To Invest In ,More Electronic Snooping - IRS Can Issue Summons for Metadata

With McDonald entrenched at No. 1, Wendy¡¯s aims for second

McDonald��s (NYSE:MCD) is the 800-pound gorilla of fast food. The $100 billion company turned quick-service restaurants into a science, has over 33,000 locations worldwide and is a heavyweight in breakfast and beverage sales in addition to selling burgers and fries.

It��s a nearly impossible task to knock No. 1 McDonald��s from its perch. So that��s why fast-food restaurant Wendy��s (NYSE:WEN) is instead focused on the No. 2 spot — and according to reports, has dethroned Burger King to become America��s second-most-popular burger joint.

The strategy? Higher quality foods, redesigned restaurants and marketing that showed American consumers who��s the best �� behind McDonald��s, of course.

It may sound silly to have a goal of second place. But it��s important to be realistic. McDonald’s dominates the marketplace, with a 49.5% share of the ��limited-service burger segment�� business. Consider: With just a bit of growth, MCD will do more in sales than all of its competitors combined.

In 2010, Burger King’s market share in the burger biz was 13.3%, while Wendy’s share was 12.8%. But thanks to healthier options — including skin-on fries seasoned with natural sea salt as well as higher quality fare like its premium Dave��s Hot ��n Juicy Cheeseburgers line — reports indicate big gains for Wendy��s.

According to a report by Janney Capital Markets released Tuesday, Wendy��s likely passed Burger King in market share as a result. And if it hasn��t yet, it will in the very near future.

That may be a bragging point for Wendy��s — however, the U.S. ��limited-service burger segment�� is only a small piece of the fast-food pie. Chipotle (NYSE:CMG) has been one of the biggest growth stories of the past few years — with shares soaring over 260% since January 2010. Wendy��s stock is up less than 10% in the same period.

Also, i nternational growth is really what��s fueling American-based restaurants. Take Yum! Brands (NYSE:YUM). Almost 75% of its operating profits come from abroad, including from some 3,200 KFC locations in China — and even KFCs in Kenya! Even behemoth McDonald��s has room to grow overseas, with the Golden Arches recently announcing a plan to open 700 stores in China over the next two years — roughly one a day — to build on its current total of 1,300 locations in the Middle Kingdom.

In short, a bigger bite out of the American burger market is nice��but not filling enough for a big restaurant stock these days.

Part of the reason restaurants like KFC and McDonald��s do so well abroad is thanks to a well-followed brand in the U.S. Wendy��s might be able to export its popularity later. However, with rivals like Yum! and Mickey D��s already gobbling up international market share, it shouldn��t focus too much on winning in the U.S. when the big profits are to be made overseas.

Jeff Reeves is the editor of InvestorPlace.com. Write him at editor@investorplace.com, follow him on Twitter via @JeffReevesIP and become a fan of InvestorPlace on Facebook. As of this writing, he did not own a position in any of the aforementioned stocks.

Tags: Food Stocks ,Great Stocks To Buy ,Great Stocks To Invest In ,Great Stocks To Invest In 2012 ,P ,Pandora Down Despite Doubled Revenue (Update 1)

SAVVIS, Inc. Currently Trading Above From its Target Price - NASDAQ:SVVS

SAVVIS, Inc. (NASDAQ:SVVS) recently hit 52 week peak price $38.42, opened at $34.27 scored +3.43% closed $33.20. SVVS traded on over 1.78 million shares in comparison to average volume of 0.88 million shares.

SVVS has earnings of $-56.27 million and made $900.06 million sales for the last 12 months. Its quarter to quarter sales remained 13.46%. The company has 56.12 million of outstanding shares and 54.59 million shares were floated in the market.

SVVS has an insider ownership at 24.85% and institutional ownership remained 80.05%. Its return on investment (ROI) for the last 12 month was -6.09% as compare to its return on equity (ROE) of -29.37% for the last 12 months.
The price moved ahead +14.89% from the mean of 20 days, +21.79% from 50 and went up 57.78% from 200 days average price. Company��s performance for the week was 5.53%, +22.87% for month and yearly performance remained 125.39%.

Its price volatility for a month remained 3.95% whereas volatility for a week noted as 4.91% having beta of 2.13. Company��s price to sales ratio for last 12 months was 2.07 while its price to book ratio for the most recent quarter was 10.71 and its earnings before interest, tax, depreciation and amortization (EBITDA) remained 196.90 million for the past twelve months.

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5 Lucrative Leftover Holiday Food Favorites

That fruitcake on the table and those candy canes on the tree may hang around your house until next year, but there's an entire red-and-green economy driven by these staples each holiday season.

According to the National Retail Federation, 91% of U.S. consumers put food and candy in their holiday budget -- allocating an average $95 to their mix of stocking stuffers and stuffing. Meanwhile, the Department of Commerce notes that food store sales last December outpaced the previous month's sales by more than 10%.

Holiday goodies have fattened in similar fashion this year, as November grocery sales rose nearly 1% since October (and more than 3% since last November). With grocery sales growing 2.2% year-to-date, there's more than enough room on the plate for the glut of holiday goods soaking up shelf space days after the all-Christmas radio station switched back to easy listening.

TheStreet took a look at five holiday favorites that may be in the discount aisle as you read this, but spur just as many sales as New Year's resolutions:

Egg nog
There are two basic recipes for egg nog: One that requires multiple ingredients and lots of effort and another that involves driving to the store, picking up a carton of yellowish dairy product and mixing the contents with whiskey. In the past decade, an increasing number of holiday-harried Americans have chosen the latter, with the International Dairy Foods Association noting that commercial egg nog production rose from 93 million pounds in 2000 to 128 million last year -- peaking at a record 132 million pounds in 2006. That's roughly 66 million quarts of creamy nonalcoholic goodness. Commercial egg nog consumption is also on the rise, with the average American quaffing 0.42 pounds of egg nog last year -- roughly a pint -- or 2.4% more than they did in 2008.

ITT Corporation Earnings: Increased Costs Strains Margins as Profit Drops

S&P 500 (NYSE:SPY) component ITT Corporation (NYSE:ITT) reported its results for the third quarter. ITT Corporation is a global multi-industry company that designs and manufactures engineered products and related services.

ITT Earnings Cheat Sheet for the Third Quarter

Results: Net income for ITT Corporation fell to $78 million (42 cents per share) vs. $145 million (78 cents per share) a year earlier. This is a decline of 46.2% from the year earlier quarter.

Revenue: Rose 12.8% to $2.98 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: ITT reported adjusted net income of $1.17 per share. By that measure, the company was about in line with expectations as the mean analyst estimate was $1.18 per share. It beat the average revenue estimate of $2.85 billion.

Quoting Management: “We are proud of our team for remaining focused on serving our customers to deliver this strong performance, even while executing on the separation of ITT into three strongly positioned, independent companies. I want to thank all of our employees for their diligence and hard work over the last several months,” said Steve Loranger, ITT’s chairman, president and chief executive officer. “The transformation of ITT and the launch of ITT Exelis and Xylem are on track to occur on October 31. The necessary costs to successfully separate into three companies are in line with our previous forecast, and all three new companies are nicely capitalized for future growth.”

Key Stats:

Gross margin shrank 0.4 percentage point to 28.6%. The contraction appeared to be driven by increased costs, which rose 13.4% from the year earlier quarter while revenue rose 12.8%.

Revenue has risen the past four quarters. Revenue increased 10.4% to $3.02 billion in the second quarter. The figure rose 4.7% in the first quarter f! rom the year earlier and climbed 5.8% in the fourth quarter of the last fiscal year from the year-ago quarter.

The company has now seen net income fall in each of the last three quarters. In the second quarter, net income fell 29.4% from the year earlier, while the figure fell 15.1% in the first quarter.

The company fell short of forecasts after beating estimates in the previous two quarters. In the second quarter, it topped the mark by 2 cents, and in the first quarter, it was ahead by 5 cents.

Looking Forward: Over the past ninety days, the average estimate for the fourth quarter has fallen from $1.44 per share to $1.30, indicating that analysts are growing pessisimistic about the company’s performance next quarter. For the fiscal year, the average estimate has moved down from $4.79 a share to $4.75 over the last ninety days.

Competitors to Watch: General Dynamics Corp. (NYSE:GD), Raytheon Company (NYSE:RTN), Lockheed Martin Corp. (NYSE:LMT), Kratos Defense & Security Solutions, Inc (NASDAQ:KTOS), Northrop Grumman Corp. (NYSE:NOC), The Boeing Company (NYSE:BA), L-3 Communications Hldgs., Inc. (NYSE:LLL), Goodrich Corporation (NYSE:GR), FLIR Systems, Inc. (NASDAQ:FLIR), and Environmental Tectonics Corp. (ETCC).

 

Tags: 2012 UnderValue Stocks ,SLT ,Top Stocks To Buy ,Top Stocks To Invest In 2012 ,Top UnderValue Stocks ,UnderValue Stocks ,Sterlite Industries Bares Second Quarter Performance

Salesforce.com Trades Down On Day of More Europe Woes

Salesforce.com, with nearly 20% of its business in Europe, has traded down today ahead of a quarterly earnings report at 5 p.m. Eastern time.

Shares of Salesforce.com (CRM) had fallen about 4% before the close to $125 and change. Analysts are expecting the company to beat estimates for earnings of 31 cents per share on revenue of nearly $572 million.

Piper Jaffray, which has a price target of $183 — that’s? upside of 45% – says recent interviews with seven Salesforce.com partners indicate the company “is entering a crucial phase as it transforms from a provider of disparate point systems supported by a ‘land and expand’ strategy to the source of a well-integrated and continuously growing set of solutions” to strategic business problems.

Analysts Mark Murphy, Matthew Coss and Pinjalim Bora also write that,

“Partners also highlighted the compelling value proposition of Force.com … in the developer community, and qualified it as ‘a big story … not been told really well yet.’ CRM remains the best long-term investment in the powerful cloud computing wave, in our view.”

They’ll be looking for more clarity on the acquisition of ModelMetrics, a Chicago consulting partner.

Tags: 2012 Growth Stocks ,GM ,Growth China Stocks ,Growth Stocks To Hold ,Growth Stocks To Invest In 2012 ,GM Plummets on Disappointing European Prospects

Marvell Technology Group Passes This Key Test

There's no foolproof way to know the future for Marvell Technology Group (Nasdaq: MRVL  ) or any other company. However, certain clues may help you see potential stumbles before they happen -- and before your stock craters as a result.

A cloudy crystal ball
In this series, we use accounts receivable and days sales outstanding to judge a company's current health and future prospects. It's an important step in separating the pretenders from the market's best stocks. Alone, AR -- the amount of money owed the company -- and DSO -- the number of days' worth of sales owed to the company -- don't tell you much. However, by considering the trends in AR and DSO, you can sometimes get a window onto the future.

Sometimes, problems with AR or DSO simply indicate a change in the business (like an acquisition), or lax collections. However, AR that grows more quickly than revenue, or ballooning DSO, can also suggest a desperate company that's trying to boost sales by giving its customers overly generous payment terms. Alternately, it can indicate that the company sprinted to book a load of sales at the end of the quarter, like used-car dealers on the 29th of the month. (Sometimes, companies do both.)

Why might an upstanding firm like Marvell Technology Group do this? For the same reason any other company might: to make the numbers. Investors don't like revenue shortfalls, and employees don't like reporting them to their superiors.

Is Marvell Technology Group sending any potential warning signs? Take a look at the chart below, which plots revenue growth against AR growth, and DSO:

Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. FQ = fiscal quarter.

The standard way to calculate DSO uses average accounts receivable. I pre! fer to l ook at end-of-quarter receivables, but I've plotted both above.

Watching the trends
When that red line (AR growth) crosses above the green line (revenue growth), I know I need to consult the filings. Similarly, a spike in the blue bars indicates a trend worth worrying about. As another reality check, it's reasonable to consider what a normal DSO figure might look like in this space.

Company	LFQ Revenue	DSO
Marvell Technology Group	$950	41
Analog Devices (NYSE: ADI  )	$716	46
Atmel (Nasdaq: ATML  )	$479	47
Altera (Nasdaq: ALTR  )	$522	67

Source: S&P Capital IQ. DSO calculated from average AR. Data is current as of last fully reported fiscal quarter. LFQ = last fiscal quarter. Dollar figures in millions.

Differences in business models can generate variations in DSO, so don't consider this the final word -- just a way to add some context to the numbers. But let's get back to our original question: Will Marvell Technology Group miss its numbers in the next quarter or two?

I don't think so. AR and DSO look healthy. For the last fully reported fiscal quarter, Marvell Technology Group's year-over-year revenue shrank 0.9%, and its AR dropped 3.6%. That looks OK. End-of-quarter DSO decreased 2.7% from the prior-year quarter. It was up 5% versus the prior quarter. Still, I'm no fortuneteller! , and th ese are just numbers. Investors putting their money on the line always need to dig into the filings for the root causes and draw their own conclusions.

What now?
I use this kind of analysis to figure out which investments I need to watch more closely as I hunt the market's best returns. However, some investors actively seek out companies on the wrong side of AR trends in order to sell them short, profiting when they eventually fall. Which way would you play this one? Let us know in the comments below, or keep up with the stocks mentioned in this article by tracking them in our free watchlist service, My Watchlist.

• Add Marvell Technology Group to My Watchlist.
• Add Analog Devices to My Watchlist.
• Add Atmel to My Watchlist.
• Add Altera to My Watchlist.

Tags: 2012 Best Stocks ,Best Stocks To Own ,Best Stocks To Own 2012 ,Best Stocks To Own For 2012 ,Consumer Stocks ,IBM ,Stand By For Big Bounce In IBM

Empire State Building May Go Public

New York’s wealthy Malkin family filed an 8-K?on Wednesday?with the Securities and Exchange Commission about the possibility of taking the Empire State Building public. It would be through a real estate investment trust, which is a typical structure for these kinds of deals. These REITs, by law, must return 90% of taxable income back to shareholders.

It was back during the Great Depression that John Raskob built the 102-story?Empire State Building — at the time,?an all-in bet on the US economy. And while it was a money-loser for many years, it ultimately turned out to be a profitable venture.

As is typical in the New York commercial market, the Empire State Building has seen several owners. They include Prudential Insurance (NYSE:PRU) as well as Leona Helmsley.

So how might an IPO do in this market? It’s hard to tell. Keep in mind that the Malkin family may also include two other properties in the REIT (one is a 55-story tower and another is 26 stories).

At the same time, the New York commercial market may be facing some headwindsm as?there will likely be more layoffs in the financial industry.

Despite all this, the Empire State Building is a top property and has a long history of stability. There will also likely be a nice dividend yield, which should attract investors.

Yet the end-game may not really be public. Instead, this may be a way to generate interest in selling its properties to a larger real estate operator. After all, firms like Blackstone (NYSE:BX) have been getting aggressive in picking up choice commercial properties.

 

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5 Stocks Setting Up to Break Out

U.S. stocks are trending slightly lower today after official government data showed that the U.S. economy grew more slowly than originally expected in the third quarter. That slower growth was mostly due to corporations drawing down their inventories faster than expected.

Gross domestic product was revised lower to an annual rate of 2% in the third quarter from a previous estimate of 2.5%, according to the commerce department. Although this number is below most economists' estimates, it's still better than the second quarter's anemic growth of just 1.3%.

At last check, the Dow Jones Industrial Average was trading down 40 points and the S&P 500 was off by 3 points. The tech-heavy Nasdaq was sliding lower by 6 points. If large institutional traders decide to use the recent weakness in equities as a buying opportunity for an end-of-the-year rally, then a number of stocks are going to break out and trend significantly higher. The top traders in the world know that markets are made up of thousands of stocks in different sectors. With so many moving parts, there's always some sector or stock that's acting strong and breaking out.

Trading breakouts is not a new game on Wall Street. This strategy has been mastered by legendary traders such as William O'Neal, Stan Weinstein and Nicolas Darvas. These pros know that once a stock starts to break out above past resistance levels, and hold above those breakout prices, then it can easily trend significantly higher.

Here's a look at a number of stocks that are setting up to break out and potentially trade higher from current levels.

Cheniere Energy

One stock that's setting up beautifully for a big breakout is Cheniere Energy(LNG), an energy company primarily engaged in LNG-related businesses. This stock has been a market leading performer in 2011, with shares up a whopping 110%.

If you take a look at the chart for Cheniere Energy, you'll notice that for the past month this stock has been setting up a solid basing pattern at around $10 a share, after the stock gapped up on huge volume through its 50-day and 200-day moving averages. Now this stock has triggered a breakout intraday after it moved above some past overhead resistance level at $12.56 and hit a daily high of $12.86. So far this breakout has failed, and the stock has traded back to near $11.50.

Tags: 2012 Best Stocks ,2012 Cheap Stocks ,Best Stocks To Own 2012 ,Best Stocks To Own For 2012 ,NFLX ,TCV ,TROW ,Analysts Continue to Criticize Netflix Capital Needs

Zumiez Zooms Ahead

Zumiez (ZUMZ) reported much better than expected sales and earnings for the third quarter, sending shares 12% higher in trading after the market closed.

Zumiez posted 45 cents of EPS, 3 cents better than expectations. The sports retailer also reported that its same store sales grew 8.7% in November, above expectations for 2.7%.

Zumiez projected forth quarter earnings of 52 cents to 54 cents, versus expectations for 52 cents.

“Our merchandise, new store opening, and e-commerce strategies once again allowed us to deliver on our goal of consistent sales and earnings growth. During the third quarter we continued to execute on key initiatives aimed at driving productivity, expanding our geographic footprint, and bringing our unique in-store experience to the internet,” said CEO Rick Brooks in a statement.

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Multimedia Games, Inc Accomplished Record New Price of 52 Weeks - NASDAQ:MGAM

Multimedia Games, Inc (NASDAQ:MGAM) achieved its new 52 week high price of $7.40 where it was opened at $7.12 up 0.28 points or +3.94% by closing at $7.38. MGAM transacted shares during the day were over 189,134 shares however it has an average volume of 216,330 shares.

MGAM has a market capitalization $198.00 million and an enterprise value at $188.29 million. Trailing twelve months price to sales ratio of the stock was 1.55 while price to book ratio in most recent quarter was 1.71. In profitability ratios, net profit margin in past twelve months appeared at 4.44% whereas operating profit margin for the same period at 5.99%.

The company made a return on asset of 2.61% in past twelve months and return on equity of 4.93% for similar period. In the period of trailing 12 months it generated revenue amounted to $127.86 million gaining $4.55 revenue per share. Its year over year, quarterly growth of revenue was 17.30% holding -74.10% quarterly earnings growth.

According to preceding quarter balance sheet results, the company had $46.71 million cash in hand making cash per share at 1.74. The total of $37.00 million debt was there putting a total debt to equity ratio 31.92. Moreover its current ratio according to same quarter results was 2.92 and book value per share was4.32.

Looking at the trading information, the stock price history displayed that its S&P500 52 Week Change illustrated -0.90% where the stock current price exhibited up beat from its 50 day moving average price $6.50 and remained above from its 200 Day Moving Average price $5.12.

MGAM holds 26.83 million outstanding shares with 23.19 million floating shares where insider possessed 9.07% and institutions kept 65.30%.

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Peter Schiff’s Urgent Update to Gold & Silver Investors

Following the surprise move by the Fed and five other central banks to lower the interest rate of dollar swaps by 50 basis points, through Feb. 1, 2013, Euro Pacific Capital CEO Peter Schiff issued a special and urgent update to investors.

"There’s an old expression that nobody rings a bell when it’s time to buy or sell," Schiff began his video message of Wednesday.? " . . . Well, I think the world’s central banks rung a pretty loud bell today to buy precious metals."

As the Dow opened on Wednesday, soaring more than 400 points, gold vaulting more than $30 per ounce and silver adding more than a buck following the Fed announcement that the world will soon be flooded with more dollars due to the coordinated cut in the swaps rate, the US currency dropped sharply against its peers which comprise the UDX. Sign-up for my 100% FREE Alerts!

"I believe that it [the dollar] is going to lose a lot more value, not just against other fiat currencies, but against real money, gold and silver," Schiff continued.? "I think investors should be buying.? Those of you who’ve been on the sidelines waiting for an opportunity to buy, I would not wait much longer; I would just buy."

Wednesday’s ringing endorsement by central banks to sell dollars and buy precious metals��so far��has fit well into the call Schiff made in October for a lower dollar by year end��a bold call, indeed, in that, it flies in the face of famed FX Concept Founder John Taylor’s prediction for a euro collapse.? Not many traders want to take the other side of a Taylor trade.

“What's really frustrating is that we're supposed to do well in a lousy world market," Taylor told Bloomberg in an Oct. 12 interview. "We're doing very badly."

Nearly two weeks later, on Oct. 25, Schiff defiantly told KWN, "Our short-term target for the euro, maybe by year end, will be up near 1.48," adding, "I think that's going to catch a lot of people off guard who were writing the obituaries for the eur! o, to se e the euro approaching the 1.50 level. The dollar index should be headed back down to the 72 level."

Schiff recommend to KWN listeners to buy gold and silver as the hedge against the coming drop.? So far, Schiff is holding up quite well to senior Taylor.

"I think we will come pretty close to hitting $2,000 on gold this year," Schiff predicted. "It would be hard for gold not to be above $2,000 in 2012.? I really think it would be unlikely that we wouldn't see prices north of $2,000 next year."? See BER article, Peter Schiff’s Boldest Call Ever.

Fast forward to today, Schiff recommended to his video audience that new positions should be taken in gold and silver, with first-time buyers who’ve been waiting for a pullback to jump aboard.

"You have gold at around $1,700, silver around $32," Schiff said, Wednesday.? "I think these are good positions to buy gold for the first time, if you still haven’t bought, or add to your positions if you already own."

In addition to his recommendation to buy precious metals, Schiff reminded investors of the ongoing disinformation campaign waged against investors by central bankers and the media all through this crisis.? Schiff has continually stated, as far back as the early 2000s, that central bankers and ‘respected’ media outlets, to put it bluntly, "lie" to investors about the intentions of the Fed; it’s all part of, what famed trends forecaster Gerald Celente has said is, a CON-fidence game the Fed plays with the markets.

"Here's the deal, Eric, they are suckering in the people to keep playing the market. This solved nothing," Celente told KWN, Thursday.? "So when I see this, this is just a con game.? And anybody that sees the game, all they have to do is follow the money.? Where is the money going?? Look at what gold did, zoom it shot up!? Look what silver did, bam!? Everybody knows what's going on, they are devaluing our currency."

Schiff provided more detail than Celente about the latest Fed! rouse, citing the curious timing of the Bernanke announcement of the day following the Standard & Poor’s large list of bank downgrades, underscoring what both gentlemen have been warning investors for a long time��and that is, that the game is "rigged" against investors of dollar-denominated paper assets and to buy gold.

"A lot of people think that what is going on is a bailout for the eurozone.? It’s not; it’s a bailout for the banks on both sides of the Atlantic," Schiff explained.? "It’s not a coincidence . . . last night Standard & Poor’s downgraded credit ratings for about 20 major banks, including banks like Bank of America [and] Morgan Stanley."

Moreover, Schiff noted a similar observation to zerohedge.com‘s post regarding Warren Buffet’s Bank of America’s share price, which, as of Tuesday, traded briefly and dangerously below the $5 mark��a mark at which pension funds and other large institutions must sell the stock, which would no doubt cause another Citigroup-like meltdown in shares of BAC.

"Before the bell [Wednesday], Bank of America shares were under five bucks, a new 52-week low, and this announcement came and the banks rallied," Schiff said.? "I think this is a bank bailout, a la QE2.? This is not about economic growth; it’s about propping up insolvent financial institutions by creating inflation."

More evidence of Schiff’s contention came from U.S.-based Forbes Magazine on Wednesday morning.? Forbes stated that it had observed central banks taking unusual steps to liquefy an unknown (undisclosed?) European bank in ways reminiscent of the 2008 financial system meltdown.

“It appears that a big European bank got close to failure last night," stated Forbes.? "European banks, especially French banks, rely heavily on funding in the wholesale money markets.? It appears that a major bank was having difficulty funding its immediate liquidity needs. The cavalry was called in and has come to the successf! ul rescu e."

Experienced Wall Street observers, such as Schiff, the staff of zerohedge.com and the journalists of Forbes understand the motives and obfuscations disseminated through communiques of central banks all too well.? And those "who do understand this dynamic will buy gold," said Schiff.

And how high could the price of gold go?

Ironically, France-based Societe Generale issued a note to clients on Monday, a couple of days too soon from the Wednesday’s Fed’s bombshell announcement, in which, it stated, "A major liquidity crisis should not occur this time, as we think we are on the eve of major QE in the UK, U.S. and (a bit) later on in the EZ."

If the analysts at SocGen had read zerohedge.com’s Friday post regarding a curious and massive blip on the Fed’s "Non-Reserve Balances" statement of an additional $88 billion to its "other" category, they may have wondered if another bank was about to blow up in the system and most likely would have suspended their analysis for a little while longer.

In any event, SocGen also stated it expects the price of gold to soar to nose-bleed heights in the wake of more central bank quantitative easing, as they need to catch up to the unprecedented rate and amount of debt destruction on both sides of the Atlantic.

"Buy gold ahead of QE3 as money creation has a strong impact on prices,” according to the SocGen release.? "Gold is highly sensitive to U.S. QE, as every dollar of QE goes into M0, triggering the debasement of the USD.? Gold = $8,500/Oz: to catch up with the increase in the monetary base since 1920 (as it did in the early 80s).? Gold = $1900/Oz: to close the gap with the monetary base increase since July 2007(QE1+QE2)."

Tags: 2012 Top Performing Stocks ,2012 Value Stocks ,Top Performing Stocks 2012 ! ,Top Performing Stocks To Buy 2012 ,Thai Floods To Hit HDD Supplies By 30 Pct In Q4 - Report

How I Missed a 3-Bagger

Ordinarily, I'm the biggest fan of socially responsible companies. I generally prefer to invest in organizations that are trying to make the world a better place, and my time horizon tends to be very long term. This time, however, was different.

In July 2009, shares of Whole Foods (Nasdaq: WFM  ) had been hit very hard in the previous 12 months, losing nearly 20% of their value. Here was a great, socially responsible company trading at a significant discount. Surely the time was right to pick up some shares. And yet...

Conscious what?
Our economy was in rough shape, with unemployment having soared to 9.5%. And I was very skeptical, in the midst of the Great Recession, of investing in a company that was nicknamed "Whole Paycheck." Anecdotally, I had cut back on my own shopping at Whole Foods, and I'm a bit of a spendthrift. What would more prudent people do?

Before investing in Whole Foods, I needed to know that it had a plan for dealing with the tough economy and the perception that their prices were too high. Fortunately for me, Whole Foods CEO John Mackey was visiting the Fool in July 2009. I just knew that he'd be able to address my concerns about the company.

I was wrong. Instead of talking about declining comps and flat sales, he spent his entire time telling us about "conscious capitalism." Conscious what? Our economy had just fallen off a cliff and he wanted to get all touchy-feely on us? Needless to say, I was very concerned.

Shortly after Mackey's talk, my colleague Alyce Lomax wrote an excellent summary of it for Fool.com. In a nutshell, conscious capitalism is a type of economic activity that is about more than just making money. Rather, consciously capitalist enterprises are about big ideas that soar far above narrow self-interest. These enterprises are run on behalf of all stakeholders, not just investors.

Betting against conscious capitalism
Mackey pointed ! to sever al examples of these types of companies. Microsoft (Nasdaq: MSFT  ) was one such enterprise that he singled out as being built around the exciting idea of a personal-computing revolution. He also highlighted Southwest Airlines (NYSE: LUV  ) and Nordstrom (NYSE: JWN  ) for their commitment to outstanding customer service. Finally, he praised Google and Genentech for their dedication to discovery and the pursuit of truth.

I found myself admiring Mackey's idealism and truly appreciating his more noble view of business, especially after the breakdown in values that resulted in the financial crisis. But was this the sort of thinking that would allow Whole Foods to overcome its grave challenges in the summer of 2009? I was certain it wasn't. So certain, in fact, that I predicted Whole Foods would underperform on Motley Fool CAPS.

Now, more than two years later, I can say that I was wrong. Really wrong. On this particular recommendation, you can score it as a victory for idealism over narrow utilitarianism. Go, idealism!

I picked Whole Foods to underperform on July 15, 2009, when it was trading at $21.05 per share. It is now trading at $67.91 per share. Had I bought shares on that day back in 2009, I'd be sitting on a gain of 222%, which is a three-bagger in Peter Lynch's parlance.

But I didn't buy shares that day, and I totally missed an impressive comeback. For the first quarter of fiscal 2010, Whole Foods reported that net income was up 71%, and that sales were up 7%. Alyce Lomax reported at the time that fierce competition from Kroger (NYSE: KR  ) and Safeway (NYSE: SWY  ) "didn't put a dent in Whole Foods' recovery." In the following quarter, Mackey reported th! at "our second quarter results are the best we have reported in several years." The company's efforts to provide cheaper items were beginning to pay off with many customers. And others were willing to start paying up for quality again. Who would have guessed it?

How I was wrong -- let me count the ways
Actually, lots of folks would have guessed it. So what did I learn from my unwise, bearish call on Whole Foods? Here are three lessons:

1. I had just assumed that the severe downturn would continue and that shoppers would abandon higher-end grocers. Clearly, this was a failure of imagination on my part. Fool co-founder David Gardner often teaches us to consider multiple futures for any potential investment idea. For me, I was locked in on just one future, and it wasn't a rosy one.
2. Just because John Mackey wanted to talk about "conscious capitalism" didn't mean that he wasn't focused on the details of the business. This one is so obvious that I'm embarrassed to admit it in a public forum. I just assumed he didn't have his eye on the ball. I assumed wrong.
3. Finally -- and perhaps most important -- great companies find a way to overcome difficult environments. Whole Foods is clearly an outstanding company that is head and shoulders above its competition, in my opinion. It's not smart betting against such companies. Starbucks (Nasdaq: SBUX  ) is a perfect example of another excellent company that rebounded spectacularly after having been hit hard by the Great Recession.

Winston Churchill once said of an opponent that he was a modest man who had much to be modest about. Investing will make all of us feel very modest at times. It's very important to remember that every once in a while.

If you'd like to learn about another retailer that is known as the "Costco of Latin America," then be sure to have a look at our latest free report. Click here to start reading now.

Tags: 2012 Great Stocks ,Great Food Stocks 2012 ,Great Food Stocks To Buy For 2012 ,Great Stocks For 2012 ,Great Stocks To Invest In ,HTTP Status 404 - /header

Tags: 2012 Rising Stocks ,Best Stocks 2012 ,Best Stocks For 2012 ,Best Stocks To Watch In 2012 ,Intro to Trading Calendar Spreads 

Tags: 2012 Rising Stocks ,Best Rising Stocks To Watch ,Best Stocks 2012 ,Best Stocks For 2012 ,Best Stocks To Watch In 2012 ,Intro to Trading Calendar Spreads 

Is St. Jude Medical's Growth for Real?

St. Jude Medical (NYSE: STJ  ) carries $3.9 billion of goodwill and other intangibles on its balance sheet. Sometimes goodwill, especially when it's excessive, can foreshadow problems down the road. Could this be the case with St. Jude Medical?

Before we answer that, let's look at what could go wrong.

AOL blows up
In early 2002, AOL Time Warner was trading for $66.27 per share. It had $209 billion of assets on its balance sheet, and $128 billion of that was in the form of goodwill and other intangible assets. Goodwill is simply the difference between the price paid for a company during an acquisition and the net assets of the acquired company. The $128 billion of goodwill in this case was created when AOL and Time Warner merged in 2000.

The problem with inflating your net assets with goodwill is that it can -- being intangible, after all -- go away if the acquisition or merger doesn't create the amount of value that was expected. That's what happened in AOL Time Warner's case. It had to write off most of the goodwill over the next few months, and one year later that line item had shrunk to $37 billion. Investors punished the stock along the way, sending it down to $27.04 -- or nearly a 60% loss.

In his fine book It's Earnings That Count, Hewitt Heiserman explains the AOL situation and how two simple metrics can help minimize your risk of owning a company that may blow up like this. Let's see how St. Jude Medical holds up using his two metrics.

Intangible assets ratio
This ratio shows us the percentage of total assets made up by goodwill and other intangibles. Heiserman says he views anything over 20% as worrisome, "because management might be overpaying for the acquisition or acquisitions that gave rise to the goodwill."

St. Jude Medical has an intangible assets ratio of 43%. This is well above Heiserman's threshold, and you sho! uld keep a close eye on just how the company is fueling its growth. It's also useful to compare it with tangible book value.

Tangible book value
Tangible book value is simply what remains after subtracting goodwill and other intangibles from shareholders' equity (also known as book value). If this is not a positive value, Heiserman advises you to run away because such companies may "lack the balance sheet muscle to protect themselves in a recession or from better-financed competitors."

St. Jude Medical's tangible book value is $551.1 million, so no yellow flags here.

By the way, I asked Heiserman about the tendency for some large-cap blue chips -- names like Procter & Gamble, IBM, and Altria -- to have a high intangible assets ratio and negative tangible book value. He says this can be OK, provided the company has (1) modest or no net debt, (2) persistent and rising levels of free cash flow, and (3) stock buybacks at a discount to intrinsic value.

Foolish bottom line
To recap, here are St. Jude Medical's numbers, as well as a bonus look at a few other companies in its industry.

Company	Intangible Assets Ratio	Tangible Book Value (Millions)
St. Jude Medical	43%	$551
Boston Scientific (NYSE: BSX  )	76%	($4,812)
Edwards Lifesciences (NYSE: EW  )	21%	$935
Medtronic (NYSE: MDT  ) < td>39%	$4,104

Data provided by S&P Capital IQ.

If you own St. Jude Medical, or any other company that fails one of these checks, make sure you understand the business model and management's objectives. You can never base an entire investment thesis on one or two metrics, but there is a yellow flag here. I'll help you keep a close eye on these ratios over the next few quarters by updating them soon after each earnings report.

Tags: 2012 Rising Stocks ,Best Rising Stocks To Watch ,Best Stocks 2012 ,Best Stocks For 2012 ,Best Stocks To Watch In 2012 ,Intro to Trading Calendar Spreads 

McDermott Shares Popped: What You Need to Know

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 McDermott International (NYSE: MDR  ) climbed 10% on Wednesday after Wall Street firm Stifel Nicolaus initiated coverage on the offshore oil and gas contractor with a "buy" rating.

So what: Along with the upgrade, Stifel planted a $16 price target on the stock, representing more than 55% worth of upside to its Tuesday closing price. The stock has been battered over the past several months -- off about 60% from its April highs -- on spiking costs and large writedowns, so today's upgrade might be a sign that McDermott is finally cheap enough for Wall Street to jump back in.

Now what: Don't let today's pop keep you from looking into the stock. Fools know never to blindly follow fickle analyst calls, but given its solid balance sheet and edge in emerging markets, McDermott seems like a solid pick. More importantly, with the stock trading at a P/E discount to peers like Jacobs Engineering (NYSE: JEC  ) and Fluor (NYSE: FLR  ) , it's an inexpensive one as well.

Tags: 2012 Rising Stocks ,Best Rising Stocks To Watch ,Best Stocks 2012 ,Best Stocks For 2012 ,Best Stocks To Watch In 2012 ,Intro to Trading Calendar Spreads 

McDermott Shares Popped: What You Need to Know

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 McDermott International (NYSE: MDR  ) climbed 10% on Wednesday after Wall Street firm Stifel Nicolaus initiated coverage on the offshore oil and gas contractor with a "buy" rating.

So what: Along with the upgrade, Stifel planted a $16 price target on the stock, representing more than 55% worth of upside to its Tuesday closing price. The stock has been battered over the past several months -- off about 60% from its April highs -- on spiking costs and large writedowns, so today's upgrade might be a sign that McDermott is finally cheap enough for Wall Street to jump back in.

Now what: Don't let today's pop keep you from looking into the stock. Fools know never to blindly follow fickle analyst calls, but given its solid balance sheet and edge in emerging markets, McDermott seems like a solid pick. More importantly, with the stock trading at a P/E discount to peers like Jacobs Engineering (NYSE: JEC  ) and Fluor (NYSE: FLR  ) , it's an inexpensive one as well.

Tags: Growth Stocks To Watch ,Growth Stocks To Watch 2012 ,Growth Tech Stocks To Watch ,Tech Stocks ,In Search Of The Best Emerging Market Bond ETF

Gold and Silver Bounce Off Lows

On Tuesday, gold?(NYSE:GLD) futures for December delivery declined $13.40 to settle at $1,711.80 per ounce, while silver (NYSE:SLV)?futures fell $1.62 cents to settle at $32.73.

Greek Prime Minister George Papandreou surprised European leaders Monday when he called for a referendum on the new aid package for Greece, putting austerity measures and potentially the nation��s membership in the euro zone to a popular vote. The referendum will allow Greek citizens to vote on whether or not to support the debt deal and program of austerity measures in exchange for foreign aid. Greeks have been voicing their disapproval of heavy spending cuts since the first bailout package was established, often organizing mass strikes that have shut down many public sector services, including transportation. Some protests in Athens have turned to violence.

The markets did not take the news well, as the Dow (NYSE:DIA) suffered another triple-digit move to the downside.? Gold and silver equities also declined during the day, but are paring losses as reports are saying that the Greek referendum are basically dead.? The Market Vectors Gold Miners ETF (AMEX:GDX) hit an intra-day low of $56.03, but is trading slightly above $59 before the close.? The junior gold miners (AMEX:GDXJ) are still down nearly 1% for the day.? AngloGold (NYSE:AU) and Harmony Gold (NYSE:HMY) edged higher as Deutsche Bank (NYSE:DB) initiated a Buy on both stocks.? Silver miners (NYSE:SIL) Endeavour Silver (AMEX:EXK) and First Majestic (NYSE:AG) climbed 1.2% and .12% higher, respectively.

Investors may continue to turn to precious metals as the financial markets and regulators continue to fail investors.? It is now being discovered that hundreds of millions of dollars in customer money has gone missing from MF Global (NYSE:MF) in the last few days, prompti! ng an in vestigation into the brokerage firm, which just yesterday filed for Chapter 11 bankruptcy protection.

Investing Insights:?How Will Precious Metals React to the EU Bailout Plan?

Tags: Growth Stocks To Watch ,Growth Stocks To Watch 2012 ,Growth Tech Stocks To Watch ,Tech Stocks ,In Search Of The Best Emerging Market Bond ETF

I Was Wrong About HD-DVDs

I remember the good old college days in my dorm room, watching Dumb and Dumber on VHS instead of studying.

That was 2004, and I knew the decade-old VHS was on its last legs, but I had yet to switch over to the mainstream DVD world. Sure enough, the spool of film started to unravel mid-movie one night, and I was cradling the broken plastic tape much like the blind boy held his lifeless, broken-necked bird in the movie.

I looked at the crate of VHS tapes I brought to college that year and wondered in horror which one would be next. Ironically, life imitated art and my Jurassic Park tape died out next -- just like the film's dinosaur stars -- and I soon threw out my entire obtrusive and outdated VHS collection.

I learned that dying technology is similar to nature's survival of the fittest: Anything that's faster and sleeker is going to eat up all other competition. So was the case with the demise of VHS, which was wiped out by the thinner, quicker DVD. Now the DVD is the endangered species, thanks to the dawn of the high-definition Blu-ray disc.

With more than five times the storage capacity of traditional DVDs, Blu-ray currently sits at the top of the food chain.

Blu-ray's crystal-clear images, room for added features, and decrease in price over the years have all caused more Americans to jump onboard. About 15% of all consumers used a Blu-ray player in the six months ending in March, up from 9% last year, according to market research firm NPD Group, and 22% of all disc buyers bought at least one Blu-ray title.

Most of the major movie studios, including Disney (NYSE: DIS  ) , Paramount, and Sony (NYSE: SNE  ) , salivate at the chance to show off their explosions and beautiful actors in high-def and have released titles in the Blu-ray format.

But just a few years ago, it was unclear whether Toshiba's HD-DVD or Sony's Blu-ray format wou! ld succe ed.

The Blu-ray-vs.-HD-DVD format fight reminded consumers of the 1970s and 80s war waged between videotape rivals VHS and BetaMax -- and we all know who won that one.

Everyone -- including me -- was unsure whether to stick with the familiar DVD format or to invest in a high-definition disc format, along with all the accompanying hardware. The entertainment industry was just as hesitant, wanting to choose the format that would become victorious.

Game-console makers also made bets on the dueling technologies. Microsoft's (Nasdaq: MSFT  ) Xbox360, which could read only DVDs, banked on a separate peripheral to play HD-DVDs. Sony's PlayStation 3 was able to play both DVDs and Blu-ray discs. To satisfy the consumers who didn't want a console, a new species of standalone high-def movie players emerged.

The movie studios, which were split between the HD-DVD and Blu-ray camps, eventually sided with Blu-ray. That sealed HD-DVD's fate and Toshiba surrendered, ceasing production of HD-DVDs in 2008.

Those who purchased Microsoft's $199 HD-DVD peripheral, HD-DVD movies and HD-DVD players, watched their investment value drop to zero overnight.

Despite the complete disappearance of HD-DVD technology from store shelves, DVDs still remain popular. Until high-definition TVs become more mainstream, DVDs and Blu-ray discs will continue to co-exist. Apple has yet to release a computer with a Blu-ray drive.

Now I'm looking ahead and sense that the next technology to replace Blu-ray could be invisible. My Apple-obsessed friend is a pioneer in the movement to eliminate all physical discs, and in doing so, he has freed up a lot of cabinet space. He downloads and streams everything through an older Mac he transformed into a media server. Now he can access all his music, movies, and podcasts from his TV, using his iPhone or iPad as a remote. (Con: That method is harder for people to set up, and the quality isn't as g! reat as Blu-ray.)?

"I can't remember the last time I bought a DVD," he said, "and I used to buy tons of them!"

That's a fact -- just a few months ago he had a 4-inch-thick case jampacked with DVDs. He sold a few, gave a few away, and donated others.

He did hang on to some Oscar-winning discs, for good reason -- in a few decades they will be the new collectable version of today's Grammy-winning vinyl records, and antique hunters will pay up big bucks. I suppose that will make a VHS tape the equivalent of a gramophone record.

Tags: 2012 China Stocks ,AEM ,AUY ,EGO  ,GLD ,Growth China Stocks ,Growth Stocks To Invest In ,KGC ,Gold Prices End Lower as Cash Wins Out

AT&T, T-Mobile Talking Joint Venture, Says WSJ

The Wall Street Journal‘s Anupreeta Das, Anton Troianovski and Gina Chon this afternoon report that AT&T (T) and Deutsche Telekom’s (DTEGY) T-Mobile USA have had preliminary discussions about forming a joint venture in the event that AT&T’s $39 billion bid for T-Mobile fails to win in court, citing multiple anonymous sources.

The Department of Justice is suing to block the deal, and AT&T last week withdrew its application for the acquisition from the Federal Communications Commission, apparently to focus on trying to fighting the legal challenge.

AT&T shares today closed up 92 cents, or 3.3%, at $28.98.

Tags: F ,GM ,Top Hi-Tech Stocks To Watch ,Top Stocks 2012 ,Top Stocks To Invest In 2012 ,Top Stocks To Watch ,GM Delivers What UAW Wants - Jobs

The Fatal Flaw of Obama's Mortgage Plan

Even if it works as promised, President Obamas latest effort to aid the housing market wont get at the root of the problem that housing poses for the economy.

SEE ALSO: Kiplinger's Housing Forecast

As before, the president is trying to spur refinancing to lower monthly payments -- in this case, targeting underwater borrowers who owe more than their homes are worth.

If the plan works, it would make life easier for some families, but it wont address how the crash in home prices continues to hinder economic growth. Thats because high monthly payments arent the problem -- excessive debt is.

Foreclosures are the most obvious effect of the housing crisis, but the broader damage comes from the way that sinking prices have wiped out home equity, down by $7 trillion, or more than 50%. For the first time, roughly half of homeowners owe 80% or more of the value of their homes. This crushing debt has unbalanced the balance sheets and financial plans of most middle-class families, leading them to pull back on consumer spending, which accounts for 70% of economic activity.

Even if home prices start rising again, homeowners understand that it will take years, and perhaps decades, to make a dent in this enormous debt. Until the debt burden of mortgage holders is reduced, housing will continue to depress confidence and consumer spending, as it has in Japan for 15 years.

At least three prior attempts since 2008 to assist the housing market have failed. The Obama administration said these earlier efforts would result in refinancing and lower monthly payments for 3 million to 4 million homeowners, but the total so far is only 900,000. Meanwhile, 11 million families -- nearly one in four home mortgage borrowers -- owe more than their homes are worth.

With his new proposal, the president has lowered his sights: He says he hopes to help one-tenth of the 11 million homeowners whose mortgages are underwater. Its a new goal, but the approach is! the sam e: waiving rules to encourage banks to refinance government-backed mortgages. Banks that agree to refinance underwater mortgages are freed from the threat that the government might later accuse them of making a loan that was too risky.

Unfortunately, the new plan shares a fatal flaw with the prior ones. It wont work unless homes promptly start rising in value, which isnt in the cards. By some measures, home prices would still have to fall 10% to revert to the long-term price trend before the bubble. And after falling a bit, the number of homes headed for foreclosure is increasing again. The economy isnt adding jobs, incomes are falling, and most forecasts are for another year of very slow growth.

Many borrowers with underwater mortgages are defaulting in part because they see no prospect of a return on further investment. Until these borrowers and others are convinced that homes are a good investment, no government program will be able to boost the housing market.

The only effective solution to the problem is an unlikely one: an expensive, government-led plan to write off the debts of those with no equity. It would be unpopular because it would rescue many borrowers who took on homes they couldnt afford, even if the effects promise to raise everyones home values. Government would share the cost with banks, which would have to be persuaded or forced to write off debt. A plan advocated by Harvard economist Martin Feldstein would lower the debts of underwater homeowners to no more than 110% of the homes value -- within hailing distance of positive equity. The out-of-pocket expense for the government would be $350 billion, but a good chunk of that is already committed because millions of these loans are insured by government-owned Fannie Mae and Freddie Mac, and thus Uncle Sam is on the hook.

Its hard to imagine Republicans and Democrats joining together for something like this. But absent such radical action, housing will hobble the economy for years to come.

Tags: 2012 Great Stocks ,AUY ,DBP ,GLD ,Great Stocks For 2012 ,Great Stocks To Invest In ,KGC ,NEM ,PHYS ,SLV ,What is the Mining Industry Forecasting for Gold?

A former venture capitalist has a few theories

Tarang Shah, a former venture capitalist, interviewed over a dozen of his old peers to learn how billion-dollar companies are created. He turned this into a book called Venture Capitalists at Work, which was recently released.

I interviewed Tarang about one of the topics in the book �C Facebook.

InvestorPlace: Could Friendster, which got its start in 2002, have been the winner in social networking?

Shah: The company made a few technology mistakes and didn’t pay real attention to what users wanted. It kept calculating third and fourth degrees of connections when users really wanted to know first and second degree of connections, just their friends of friends. (Facebook even today only shows second degree of connections).

Given the amount of permutations and the state of database technology, it took minutes to refresh a page. This drove users crazy, and they ran away to MySpace. In fact, they could have run away to anything else that was working at that time. There is a big lesson in user interface and user experience here. In nutshell, if Friendster had paid real attention to user needs and technology choice, one can argue that they could have been what Facebook is today.

Then why did MySpace fail?

MySpace wasn’t built on [an] actual identity and allowed users to self-express themselves. So, it did appeal to a young and edgy user segment. However, for the market at large, it became a site that they couldn��t relate to. So that put a ceiling on how much MySpace could grow.

So what did Facebook do right?

By starting with a college-focused social network, Facebook founder Mark Zuckerberg did a few things right. Students saw great value in connecting with other students from their own college and staying up-to-date with hyper-local college events, parties and activities.

Zuckerberg was very strategic in rolling out colleges. He connec! ted Ivy League college students with each other and then colleges in the same geographical areas. Then they opened it up for the market at large. He used the same focused, modular approach with international expansion.

Also, like other game-changing entrepreneurs — Bill Gates, Steve Jobs — Zuckerberg had a big vision and a huge motivation to win big. He surrounded himself with a very capable team, and that’s evident in the scale at which Facebook operates today.

Like Google (NASDAQ:GOOG), that team is solving an immense technological problem in a very scalable fashion. They constantly keep testing new features and adding what resonates with their users. They started out with a very simple profile page and had big success with photos and then added status updates, videos, etc. The list of features keeps growing. It has become a platform on which billion-dollar successes like Zynga are built now.

And they are not afraid of buying things they failed at or couldn’t do well themselves. Clearly, they missed the whole Twitter thing and now have integrated with them to share updates rather than pushing only their own updates.

Can anyone topple Facebook now?

I believe that’s a very, very difficult thing to do at this stage. They have executed so well that it leaves very little room for someone to offer a 10x advantage to lure away users and bring their networks with them.

 

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This Stock Is a Clear Tech Winner

Although this company has been around for more than a century, it’s one of the hottest tech companies around, writes Taesik Yoon of Forbes Growth Investor.

Corning (GLW) is a leading global provider of high-technology glass and ceramic substrates.

Its largest segment, Display Technologies, which was responsible for 39.4% of first-half net sales, makes glass substrates for liquid crystal displays (LCDs) found in flat-screen televisions, notebook computers, and desktop PC monitors.

GLW’s Telecommunications segment (26.1% of sales) makes optical fiber and cable, and related hardware and equipment, for Internet and cable-television providers.

The company’s Specialty Materials segment (13.7% of sales) produces glass, ceramic, and fluoride crystal products for specialized display applications.

This last segment has enjoyed exceptionally strong growth over the past year due to greater demand for its durable Gorilla Glass-brand displays, which are quickly becoming the screen of choice among manufacturers of smartphones and other portable media devices.

GLW also makes ceramic substrates and filters used to control emissions in gasoline and diesel engines (13.2% of sales). The remainder of its revenues was derived from the sale of glass and plastic laboratory tools.

GLW also earns a significant amount of income from joint ventures and other business investments. This includes a 50% stakes in Samsung Corning Precision Glass Co., a joint-venture with Samsung that sells glass to Korean LCD panel makers, and Dow Corning, a maker of silicone products for the semiconductor and solar-energy industries.

Robust sale of glass display panels, driven by steady demand for flat-screen televisions and the popularity of its Gorilla Glass products, led to a strong rebound in 2010. Net sales and adjusted earnings climbed 23% and 53% from the prior year, respectively, to $6.63 billion and $2.07 per share.

Growth in the current year has been tougher to come by. Net sales in its recently reported third quarter rose 30% year-over-year to $2.08 billion, but adjusted net income fell 5% to $766 million or 48 cents per share.

Nevertheless, the results were better than expected, with earnings coming in 6 cents ahead of the consensus estimate. These results helped the stock rebound from a multiyear low of under $12 per share on October 3.

Shares have also benefited from GLW’s decision to raise quarterly dividends by 50% to 7.5 cents per share—representing the company’s first increase in five years. GLW also announced it will buy back up to $1.5 billion in common stock over the next 15 months, citing what it sees as an imbalance between the long-term value of its businesses and the current stock price.

Particularly encouraging was the fact that shares rose despite providing fourth-quarter outlook that suggests near-term market conditions will remain soft. Due to excess market inventory, LCD glass volume in its wholly-owned business will likely be flat to down slightly, on a sequential basis, with more pronounced pricing pressure expected.

However, GLW may have allayed investor fears that current market conditions could result in a repeat of the challenging market environment that plagued 2008, which was also marked by industry oversupply and price erosion. Indeed, GLW believes that once the supply chain correction ends, glass demand will be more in line with the growth in retail demand for LCD products, which the company expects to be up 13% for the year.

Despite recent gains, the stock sells for less than 8 times its consensus estimate of $1.83 per share for the current year. Thus, it continues to represent a great buying opportunity.

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Brocade, HP: After-Hours Trading

Shares of Brocade Communcations(BRCD) gained in late trades on Monday after the networking equipment company blew past Wall Street's expectations for its fiscal fourth-quarter results.

The San Jose, Calif.-based company reported adjusted earnings of $79 million, or 16 cents a share, for the three months ended Oct. 29 with revenue reaching $550 million, up 9% on a sequential basis but virtually flat from last year's equivalent total.

The average estimate of analysts polled by Thomson Reuters was for a profit of 10 cents a share in the latest quarter on revenue of $527.4 million.

The stock was last quoted at $4.72, up 5.6%, on volume of more than 500,000, according to Nasdaq.com.

Brocade saw sequential revenue growth in both its storage and Ethernet businesses. Revenue from storage equipment totaled $361.3 million, which was still down 4% from last year, while Ethernet products generated sales of $189.2 million, up 11% from a year ago, with strong demand coming from service provider and enterprise customers.

"Brocade achieved outstanding results in Q4 that were led by record revenues for our Ethernet business, fast adoption of our 16 Gbps Fibre Channel products, improvements in profitability, and a record cash flow quarter from operations," said Michael Klayko, the company's CEO, in a statement. "These strong performances demonstrate that we are executing well on our long-term strategy. Looking at FY 12, we plan to leverage this momentum along with our highly differentiated innovation strategy, expanding product portfolio, and our strong routes to market."

Based on Monday's regular session close at $4.48, Brocade shares were down mor! e than 1 2% so far in 2011. The stock has been volatile since the start of summer. It reached a 52-week high of $7.30 on June 3 but bottomed out a little more than two months later at $3.18 on August 8.

Wall Street had mostly adopted a wait-and-see attitude toward the company with 21 of the 33 analysts covering the shares at either hold (18) or underperform (3).

Hewlett-Packard

It was a seesaw extended session for Dow component HP(HPQ), which got an initial bump higher following its fiscal fourth-quarter report but then turned lower as the company reined in its outlook for fiscal 2012.

On an adjusted basis, the company delivered earnings of $2.4 billion, or $1.17 a share, for the three months ended in October with revenue totaling $32.3 billion. That performance compares with year-ago equivalent earnings of $3.1 billion, or $1.33 a share, on revenue of $33.3 billion, but was ahead of the average estimate of analysts polled by Thomson Reuters for a profit of $1.13 a share on revenue of $32 billion.

CFO Catherine Lesjak said the company was "remaining cautious" about fiscal 2012, and HP forecast non-GAAP earnings of 83 cents a share for its fiscal first quarter ending in January. Wall Street's current consensus view is for a profit of $1.11 a share. For the full year, the Dow component sees non-GAAP earnings of at least $4 per share vs. the average analysts' estimate of $4.54 a share.

The stock was last quoted at $26.32, down 2%, on volume of 2.9 million, according to Nasdaq.com. The shares have fallen more than 35% so far in 2011 as Wall Street worries over stalling top-line growth and strategic direction. Meg Whitman took over as CEO for Leo Apotheker in late September, and is working to reposition the tech giant.

Other stocks making moves in late trades included Perfect World(PWRD), which lost 8% to $10.50! on volu me of around 15,000 after the China-based online game developer reported a sequential decline in revenue in its latest quarter; and Zale(ZLC), which added 12% to $4.01 on volume of more than 20,000 after the jewelry retailer posted a narrower than expected loss for its fiscal first quarter with same-store sales rising nearly 6%.

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