Saturday, January 28, 2012

Today¡¯s Market Movers: AAPL, BVSN, And The Great Pizza Rally

When you spend your days dissecting countless stocks, you sometimes stumble upon small groups of similar companies having their own private bull market.

Often, the momentum can be traced back to an obvious catalyst �� fundamental improvements within the group or a well-publicized buyout in the sector. But sometimes, investors and traders trigger a furious rally pinned on nothing but the simple fact that a stock has started to move in their favor. The buying triggers even more buying �� and the rally begins to feed off itself.

I've chronicled several interesting rallies over the past few years, ranging from coffee stocks (slightly absurd) to semiconductors (a great cyclical growth story). Eventually, these rallies run their course, and momentum traders move on to the next best thing. That might be happening right now to "The Great Pizza Rally of 2011-12."

This pizza rally has been interesting for a couple of reasons. First, it has been largely contained within a subsection of the fast-food industry that would rarely be classified as a growth market. Also, I can see how a buyer might justify the rally in his mind. After all, the economy isn't in great shape, so the average family might be buying more pizza. It's a weak argument, but it makes sense to those who don't trade using technical indicators. It's tangible, easy to understand and act upon, and reinforced by the media.

Today, we'll take a look at a couple of pizza players �� and a few other high-flying stocks �� and try to predict what the future holds for each��

Pizza Inn Inc. (NASDAQ:PZZI): This small pizza chain saw a big rally in its stock, taking shares from $3.50 in October to almost $7 by the beginning of December. Now, it looks as if the stock is stuck in the $5.50 range and possibly heading lower. The sharp uptrend that began in the fall is broken, so you shouldn't expect more upside from this name anytime soon:

Domino's Pizza Inc. (NYSE:DPZ): The king of pizza delivery is showing us a very similar pattern. Once again, we have a nice fall rally, lifting shares from $26 to $35 in a matter of weeks. However, 2012 has not been as kind to Domino's. While the broad market has rallied to post-correction highs, DPZ has fallen out of favor. You can clearly see the trendline break right at the beginning of January:

BroadVision Inc. (NASDAQ:BVSN): After failing to catch a bid for most of 2011, BVSN proves that you don't need a reason for an unannounced, triple-digit rally. This unheralded microcap started the month as a $10 stock, only to top $44 by yesterday afternoon. Not bad for a few weeks work �� and absolutely no news other than the sheer power of the rally itself.

But that's the thing with moves like this: they have to end eventually. And when they do, look out below. Check out the chart below for a very clear picture of what an unsustainable rally looks like. You should expect further downside action from here:

Apple Inc. (NASDAQ:AAPL): Finally, we turn to last night's earning surprise from Apple. Even without vaunted leader Steve Jobs at the helm, Apple reported record earnings on stronger than expected iPhone sales. Spurred on by a 6% move this morning, Apple once again overtakes Exxon Mobile Corp. as the biggest company trading on the U.S. markets, with a market cap approaching $417 billion:

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How to Invest Money in Gold

There are a number of ways to invest in gold and make money when its price rises. Some are more suitable to the average investor than others. You don’t need to own the stuff physically to make money in gold. If you are interested in investing in gold, here are some investment options for you.

The least attractive of the investment options, in my opinion, is to buy gold in a physical form. For example, coins. You pay a premium when you buy gold in this way, plus you get clipped when you sell. If you want to liquidate quickly and easily and get what your investment is really worth this is not your best alternative.

If you want to speculate with high financial leverage futures contracts are an option. This is not so much investing in gold; it’s speculation. If prices move in your direction you can make a lot of money quickly. If prices go against you loses can be quick and big as well.

Gold stocks are an attractive way for average investors to invest in gold. You can buy and sell shares quickly and easily for as little as $10 a trade or less. When the price of this precious metal goes up, gold stocks follow suit. Why? Because profits for the mining companies soar. In fact, gold stocks often gain considerably more on a percentage basis than the increase in the price of the commodity itself.

If you don’t want to pick your own gold stocks you can invest in a portfolio of them two different popular ways. The first way is by buying and selling ETFs (exchange traded funds). They trade just like any other stock.

For most inexperienced investors I suggest the other option: gold funds (mutual funds) that invest in mining stocks. When you invest money in a fund you own a small part of a large portfolio of securities, in this case precious metals stocks. You can invest money or liquidate shares on any business day.

Gold funds are a sensible way for most people to invest money to make money in gold. I do not recommend betting the farm that the p! rice of this precious metal will go up; but having a small portion of your investment assets in gold funds makes sense for most investors.

Historically, what happens in times of financial and economic turmoil? Stocks in general take a beating and precious metals prices go up. What’s the most popular precious metal in the world? You know the answer to that question.

As a final note, most investors should invest money in general diversified stock funds, bond funds and money market funds as well. If you decide to cut your investment in any of your funds you can simply switch money to another fund in the same family or investment company. By investing your money in mutual funds you can keep your investment assets under one roof and have the flexibility to make changes when you see fit.

A retired financial planner, James Leitz has an MBA (finance) and 35 years of investing experience. For 20 years he advised individual investors, working directly with them helping them to reach their financial goals.

Jim is the author of a complete investor guide, Invest Informed, designed for average investors or would-be investors of all levels of financial background and experience. To learn more about investments and investing and his new financial guide go to http://www.investinformed.com.

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ChromaDex Corp. (CDXC) BluScience Line Hits Shelves of Large National Retail Drug Store Chains

ChromaDex Corp. (OCTBB: CDXC), an innovative natural products company that provides proprietary, science-based solutions and ingredients to the dietary supplement, food and beverage, cosmetic and pharmaceutical industries, is now selling its BluScience line of dietary supplements in one of the largest retail drug store chains, which has more than 8,000 stores throughout the United States.

This national chain will carry BluScience's HeartBlu and EternalBlu products by the end of the first quarter, with MemoryBlu and Blu2Go slated for availability by the end of the second quarter.

"This additional retail distribution will complement the existing availability of BluScience at GNC. Given the favorable response we are hearing from mass merchant retailers, our goal is to have BluScience available at more than 25,000 retail outlets by the end of 2012. The Q1 national rollout of the product is being matched by a comprehensive television, print and online advertising strategy with a focus on developing education and awareness around the benefits of both pTeroPure and our BluScience line of retail products," Ann Deren-Lewis, vice president of marketing of ChromaDex, stated in the press release.

The novel ingredient in the BluScience line is ChromaDex's proprietary, patent-pending pterostilbene, which the company brands as pTeroPure?. pTeroPure is a nature-identical formulation of the antioxidant compound pterostilbene found naturally in blueberries.

Article written by QualityStocks �� Visit www.QualityStocks.net for more emerging growth companies to discover and evaluate.

For Quality Stocks full disclaimer, visit the company's Web site

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Friday, January 27, 2012

U.K. Stocks Decline as Glaxo Retreats After Drug Trial; Barclays Sinks

U.K. stocks (UKX) dropped for the thirdtime in four days as banks declined and GlaxoSmithKline Plcretreated after a disappointing study on an experimentalrespiratory drug.

Glaxo, which accounts for 5 percent of the FTSE 100 Index��sweighting (UKX), sank the most in three years after saying Relovairdidn��t prove superior to an existing medicine in a late-stagestudy. Barclays Plc (BARC), the U.K.��s second-largest bank by assets,slid 4.5 percent.

The FTSE 100 fell 37.42, or 0.7 percent, to 5,612.26 at theclose of trading in London, after earlier rising as much as 0.4percent. The gauge has still advanced 0.7 percent so far thisyear after a 5.6 percent drop in 2011. The broader FTSE All-Share Index slid 0.6 percent today, while Ireland��s ISEQ Indexincreased 1.4 percent.

German Chancellor Angela Merkel and French PresidentNicolas Sarkozy outlined the increased pace of their response tothe financial crisis at a press conference today. Euro-arealeaders may complete their new budget rulebook by Jan. 30, onemonth ahead of schedule, and are considering acceleratingcapital contributions to the bailout fund being set up this yearto stem the debt crisis, Merkel said

��The press conference didn��t produce anything of muchsubstance,�� Chris Beauchamp, a market analyst at IG Index inLondon, said by telephone. ��It was a grand non-event.��

Debt Crisis

The FTSE 100 fell 5.6 percent last year, at one stagelosing as much as 19 percent from the year��s high, as Europeanleaders struggled to contain the sovereign-debt crisis andassure the euro��s survival. The euro area is the U.K.��s largestexport partner.

Germany sold six-month treasury bills at a negative yieldfor the first time today amid demand for the debt securities ofEurope��s biggest economy as a haven from the debt crisis. TheEuropean Central Bank said overnight deposits from commercialbanks rose to a record 463.6 billion euros ($591 billion) onJan. 6, the most since the euro was introduced in 1999.

��Bank! s would rather pay the ECB to hold their cash ratherthan lend it to each other,�� Ben Critchley, a sales trader atIG Index in London, wrote in e-mailed comments. ��Fund managersand other institutions are so desperate for a safe haven thatthey��d rather pay Berlin to borrow money than purchase otherassets. None of this means Armageddon is on its way, but it��snot exactly an encouraging sign.��

Glaxo (GSK) Slides

Glaxo dropped 4.1 percent to 1,435 pence, the largestdecline since January 2009. The U.K.��s biggest drugmaker saidthere was ��no statistical difference�� between Relovair andGlaxo��s Seretide, known as Advair in the U.S., in a 12-weekstudy. Glaxo developed Relovair as a successor to Advair, itsbest-selling drug.

Barclays Plc slid 4.5 percent to 178.1 pence, the lowestlevel this year. Lloyds banking Group Plc declined 3.4 percentto 26.19 pence.

Antofagasta Plc (ANTO) retreated 2.8 percent to 1,234 pence afterCitigroup Inc. lowered its recommendation for the copperproducer to ��sell�� from ��neutral,�� while Deutsche Bank AGcut its rating to ��hold�� from ��buy.��

Heritage Oil Plc (HOIL) dropped 5.7 percent to 182.4 pence, thelargest decline since October, as RBC Capital Markets downgradedthe oil explorer to ��underperform�� from ��sector perform.��

InterContinental Hotels Group Plc (IHG) climbed 1.8 percent to1,195 pence as Deutsche Bank upgraded the hotelier��s shares to��buy�� from ��hold.��

Persimmon Plc (PSN) rallied 5.3 percent to 506.5 pence after theU.K.��s second-biggest homebuilder said 2011 results will betoward the top end of analysts�� estimates. The company saidunderlying operating margin will approach 10 percent andforecast a 50 percent increase in pretax profit.

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Daily Wrap: 12/13/2012

The markets picked up some modest gains earlier in the afternoon with light trading, but pared those gains as investors took in news of another possible downgrade.

In economic news, the Commerce Department reported retail sales rose just 0.2 percent in November, following an upwardly revised 0.6 percent in October. Economists had expected a bigger gain in November.

A disappointing earnings report from Best Buy (BBY) today as the company reported a drop in fiscal third quarter earnings that fell short of analyst expectations, as did revenue.

Southwest Airlines (LUV) said today it will be the launch customer of Boeing’s (BA) new 737 MAX aircraft.
150 planes are on order and set to be delivered in 2017.

Procrastinators now have a few more days to take advantage of Amazon.com’s (AMZN) free shipping. The online retailer has extended its deadline for free shipping by Christmas to December 19th, for orders of $25 or more. The company said the best selling item on its website is the Kindle Fire.

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Thursday, January 26, 2012

How to Identify and Resist Your Spending Triggers

Have you ever set out to ��window shop,�� only to emerge with a bag full of items you never intended to buy, much less budgeted for? Alternatively, maybe your ��retail Achilles’ heel�� starts to rear its head when pass a particular store, or starts to feel excitement around a change in the weather or before an upcoming event.

More than likely, you’ll regret the unintentional spending spree, vowing to never again lose control, only to find yourself repeating the mistake down the road. Fear not. There is a way to control budget busters and it all starts with recognizing your spending triggers.

Market researcher The NPD Group recently released findings of the 2011 holiday shopping season.? Though women actually proved to be more budget savvy than men when it came to seeking out discounts, comparing prices and researching the best deals, and cutting back on the number of gifts given, they fell short in one area: Self-indulgence.

��They felt more comfortable about rewarding themselves for being so frugal and there were a lot deals that were hard to pass up,�� says NPD��s chief industry analyst Marshal Cohen. He also predicts that retailers will continue certain tactics that proved successful this holiday season, including extended hours, weekend sales, double discounts and “indulge yourself” pitches.

How can you resist the urge to splurge? Understand more about what tempting situations cause you to spend, and how to regain your willpower and budget.

Limited Time Offer!

Creating a ��sense of urgency�� is? a proven way to boost sales and increase customer and online traffic in the retail industry. If there��s a particular item on your list that you��ll buy regardless of price, there are times when such offers are a windfall of sorts. However, the message to ��act now�� works to your disadvantage when it leads to poor purchase decisions and impulse buying.

While the deals may be tempting, remember that you have more control over the ou! tcome wh en you ��stack the deck�� in your favor to resist. In a University of Minnesota study called ��Spent Resources: Self-Regulatory Resource Availability Affects Impulse Buying,” researchers found that one of the key factors of impulse buying is mood��both while you��re shopping and how you feel post-purchase.

Generally, shopping in a bad mood will leave you more likely to buy on impulse, as you search for a way to lift your spirits, albeit temporarily. Further, a lackluster mood typically correlates with feelings of low strength and willpower, which is another common trigger to unnecessary spending.

Here’s another easy tip: Stay away from temptation! For the same reason you��d steer of a candy store while dieting, don��t even browse when you��re on a budget.

Do You Want to Save An Extra 15%?

When you��re asked about saving an extra percentage off your purchases in a store, just say no. Not only do store credit cards do little to boost your credit score, the interest rates are sky high. (Not to mention, having that available credit line also has a way of rearing its head when later promotions offering additional discounts for cardholders arrive in the mail).

Further, the instant approval nature of store credit cards generates what is called a ��hard inquiry�� to your credit file. If you apply for too many store cards, even if you��re only applying to get the discount, you can actually lower your credit score.

We��re Open Late!

Retailers open their doors early and close them later in order to win your favor for convenience. While shopping well after the sun has set may seem like a way maximize your time without the interruptions of a blinking Blackberry or screaming child, beware of the phenomenon known as ��decision fatigue.�� In short, this phenomenon means that by the time you��ve spent an entire day making the simple and tough decisions that life requires, you��ll lose your ability to process rationally.

As a result, your brain is fried and you��ll make careless purchase decisions. Professors at Stanford University demonstrated decision fatigue in action by approaching mall shoppers with a set of arithmetic challenges to solve after they��d spent the day shopping. The researchers found a correlation between the number of choices shoppers had made over the course of the day and a lack of persistence in solving the math problem presented.

In other words, they had lost the willpower to truly put effort into thinking. Once you hit the point of decision fatigue, you��re more likely to settle for one of two extremes: Buying whatever is cheapest or requires the least amount of processing, like items that are suggested to you by a salesperson or merchandised in a close proximity to you. (Hence, ��add on�� items at the checkout line).

The researchers concluded that ��making choices depletes some important psychological resource; the same resource that is needed for self-regulation.�� If you have no option but to shop at the end of the day, counteract the phenomenon by writing a list of exactly what you��re at the store for and create it early in the morning, when your mind is fresh. Once you��re in the store, vow not to do any ��creative interpreting�� of those purchases when your mind has checked out for the day.

Stephanie Taylor Christensen is a former financial services marketer based in Columbus, OH. The founder of?Wellness On Less, she also writes on small business, consumer interest, wellness, career and?personal finance topics.

 

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Defending Kim Kardashian on Taxes - SmartMoney.com

It takes a lot to get me to write about Kim Kardashian. Let alone to come to her defense.

But this week a pressure group in California, campaigning for higher taxes on the rich, has done just that.

The so-called "Courage Campaign," which wants to raise California's top tax rate from 10.3%, has come out with a video arguing that Kardashian is paying way too little tax. See it here.

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The video, in the way of the Internet, has "gone viral," a term that is ironically appropriate. It's like a cold that people are passing around, entirely bypassing their brains.

The group says "Kim Kardashian made more than $12 million in 2010, but she only paid 1% more in taxes than a middle-class Californian" (earning, they estimate, $47,000).

I'm sorry. I don't care where you stand politically, or on the topic of Kim Kardashian. But this is nonsense, and I have to call it out.

Why?

Three reasons.

First, the campaign has the Californian tax rates wrong.

Let's accept, for the sake of argument, the campaign's estimates are right about Kim Kardashian's income, and that of that of the average middle-class Californian family.

But someone earning $47,000 a year wouldn't pay "9.3%" state income tax. That's just their marginal rate the tax on the last dollar earned. That rate only kicks in once your income crosses $46,766, if you are single, and $93,500 if you're married.

On most of their income, they are paying much lower rates, starting at just 1%.

According to the State of California's official tax publication, a single taxpayer earning $47,000 in taxable income! in 2010 would have paid just $2,200 in tax. That's an average rate of 4.7%, not 9.3%.

(The "millionaire" 10.3% rate on the likes of Kim Kardashian kicks in over $1 million.)

Second, the Courage Campaign is mixing up two different things: The tax rate and the actual amount of taxes paid.

These are totally different.

Kim Kardashian isn't just paying a higher tax rate than a middle-class person. She's also paying it on a much, much bigger income. The net result is that she is paying vastly more in actual taxes.

Based on the Californian income-tax schedule, if she earned $12 million in 2010 she would have paid about $1.23 million in state taxes.

The middle-class family: $2,200.

In other words, based on the Courage Campaign's own numbers, Kim Kardashian would have paid about 56,000% more in taxes than a middle-class Californian, not "1% more."

Oops!

And then there's the third problem.

Even though the Courage Campaign talk about "taxes," they are only talking about state taxes. And those make up just a small share of total taxes yours, mine, and Kim Kardashian's.

Most, alas, go to the federal government.

Once again, let's do the math.

And let's keep it very simple, by ignoring phase-outs and deductions and exemptions and so on.

Based on the calculations above, if Kim Kardashian earned $12 million and paid $1.23 million in taxes to Sacramento, that would leave $10.77 million left over. Someone reporting that amount in taxable ordinary income to Uncle Sam would have to pay $3.75 million in federal income taxes.

That would take Kardashian's total tax bill to $5 million.

That middle-class Californian? They're paying $2,200 to Sacramento, and another $7,400 to Washington.

Total tax bill: $9,600.

Bottom line? If Kim Kardashian pays $5 million in taxes, and the middle-class person pays $9,600, Kardashian has paid 52,000% more in taxes.

Not "1% more": 52,000% more.

In total, based on Courage Campaign'! s own es timates, Kim Kardashian would be paying about 42% of her income in taxes, not 10.3%.

The middle-class family would be paying 20%.

I put these points to Courage Campaign honcho Rich Jacobs. He was unmoved. "I don't mean to sound obtuse, but I'm not following you," he said. "You can quibble, but she's paying 1% more in her marginal tax rate. I would say it's fully accurate."

Actually, it's not. Certainly it is correct to say that Kim Kardashian pays the same tax rate on her 999,999th dollar as a middle-class Californian pays on their 47,000th dollar. But so what? Overall she's paying about $5 million, compared to $9,600.

It is not in any way, shape or form correct to say that "She only paid 1% more in taxes than a middle-class Californian."

Naturally there are a boatload of caveats. We don't really know how much Kim Kardashian earned in 2010 or paid in taxes. If she was able to shelter income, or categorize some as capital gains or qualified dividends somehow, she would have paid less tax than estimated here.(Jacobs, in what I can only call a brilliantly clever debating move, added that as Kim Kardashian pays a higher federal tax rate than a middle-class Californian family, she may be able to write off more of her Californian state taxes, meaning her effective rate might actually be lower.)

But a middle-class person also has access to write-offs of various kinds. I've ignored, for example, 401(k) and IRA contributions, mortgage interest tax deductions, and various other tax breaks. Many people making $47,000 gross income a year are paying very little federal tax. A fair few, when you factor in benefits of one form or another, may be net claimants off the state.

As for that $47,000 figure: The U.S. Census thinks the median household income in California (in 2009) was $59,000.

But that's all by the way.

To be sure, there are super-rich people in the United States who are paying way too little tax by almost any estimation. But they are mostly tycoons wor! king the 15% tax breaks on capital gains and dividends, not people paying 42% average tax. (According to the latest data from the IRS, from 2008, the 400 highest-earning tax filers earned an average of $110 million a year yet paid just 18% federal tax. As recently as the mid-1990s that was 30%). The offenses of the U.S. tax code are mainly these big breaks for the super-rich, and the regressive payroll taxes on the poor.

The Kim Kardashian tax "analysis," in other words, was wildly misleading.

But apparently, in the age of the Internet, nobody cares. These claims were reported, without criticism, by wire services and newspapers. They turned up everywhere. I dread to think how many times they were "retweeted." This is the new world. Don't think tweet! Don't report blog! Facts? Schmacts!

As for Kim Kardashian: I wouldn't know her if I stood next to her in the line at Starbucks. I asked someone why she was famous. Apparently she has an attractive figure, especially when seen from certain angles. Why this is worth $12 million a year, or even $12 a year, is beyond me. But presumably she can wiggle that asset to another state if California hikes its taxes too high. Then the state will get 100% of nothing.

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ev3 Inc. (EVVV) Signs Definitive Merger Agreement with Covidien (COV), Sparks Trading Flurry

ev3 Inc. (EVVV) Signs Definitive Merger Agreement with Covidien (COV), Sparks Trading Flurry

Shares of ev3 Inc. (NASDAQ: EVVV) jumped more than 17% in today's trading. The stock reached a 52-week high of $22.27. At last check, it was up 17.49% to $22.23, with volume up from daily average of 832,000 to 31.07 million. Minnesota-based ev3 Inc. is a global endovascular company focusing on the identification and treatment of peripheral vascular disease.

ev3 stock spiked after the company announced that it has signed a definitive merger agreement with Covidien plc (NYSE: COV) under which Covidien will acquire all of ev3's outstanding shares for $22.50 per share in cash. The acquisition will give Covidien an additional growth platform. The deal is expected to be closed by July 31, 2010.

Commenting on the deal, Robert Palmisano, president and CEO of ev3, said that the deal is expected to provide unique opportunities and create value for both companies' shareholders, patients and employees. With the transaction, ev3 will be able to advance its broad platform of peripheral vascular and neurovascular technologies with a leading global healthcare products company, according to Palmisano.

Covidien, through a wholly owned subsidiary, will tender an all-cash offer for ev3, followed by a second-step merger. The board of directors for both companies has agreed unanimously to the deal, with ev3's directors and executive officers confirming their intention to tender all shares held by them to Covidien. Also, some of the shareholders affiliated with Warburg Pincus Equity Partners LP, holding around 24% of ev3's outstanding common stock, have agreed to tender their shares to Covidien. The deal will be financed by Covidien through cash on hand, commercial paper and a fully committed bride facility. On completion! of the transaction, ev3 will be part of Covidien's Vascular Products line in the Medical Devices business segment.

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More Optimism Than Change in November Jobs Data

Job opening numbers are rising, but it��s necessary to compare them to 2009 to get excited about the data. November 2011 saw a seasonally unadjusted 3.2 million new jobs, the same as in October, but this number is a million more than seen in July 2009. Non-financials and non-manufacturing led the way in November, with leisure and hospitality, arts, entertainment and accommodations categories being the bright spots. However, since the data are not adjusted for the upcoming holidays, these areas could be more illusory than significant. The January numbers will help clarify this uncertainty.

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Data for hires reflect much the same patterns: little change from October, and significantly better compared to 2009. Again – arts, leisure and hospitality accounted for the increases. However, hires averaged about one million more in each category than the corresponding job openings. It would seem easy to extrapolate this into a lower unemployment figure, but that number is as much dependent upon the size of the labor force, as new openings. High unemployment implies that any new openings are easily filled, as the number of available applicants is assumed theoretically to be infinite, a situation that does not readily predict wage increases.

Separations (of all types), the other side of the coin, once again conforms to this pattern. Slightly below correspondent hires, the quits rate estimates both opportunities for job upgrades and confidence among workers than leaving their present employers is relatively ��safe��. Quits rose somewhat in November up to 2 million, again in the nonfarm sector, a good sign but still insufficient for open optimism. Total separations also reflects involuntary quits; the November data are a mixed bag, mostly unchanged from October, but decidedly down from the peak separations number of February 2009. No category in November was an anomaly; the pattern was the same across! the boa rd.

In summary, the two November numbers that reflect modest optimism were job openings and the fact that quits exceeded involuntary separations – in November this difference was 0.2 million. By itself this implies increased employee confidence in the jobs market and increased turnover, both being indicators of possible future increases in consumer confidence, the lynchpin of economic growth. While it is still necessary to compare current data to 2009 to see conclusive improvement, November could by itself predict better times ahead; we simply have to wait and see.

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To contact the reporter on this story: Mark Lawson at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com

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Pre-Market Stock News (January 23, 2008)

We are full fledged into earnings season now, so most news coverage will point to the current earnings environment and guidance.  There are of course drug developments and other contracts awards.  Below is a snapshot of some of the key data we saw affecting shares in pre-market trading:

  • Abbott Laboratories (ABT) $0.93 EPS versus $0.92 estimate; sees Q1 EPS $0.61 to $0.63 versus $0.65 estimates and sees 2008 EPS $3.20 to $3.25 versus $3.22 estimate.
  • Advanced Energy Industries Inc. (NASDAQ: AEIS) traded down over 10% after after it lowered guidance.
  • Air Products (APD) $1.16 EPS vs $1.13 estimates. 
  • Apple Inc. (AAPL) trading down 10% after it posted $1.76 EPS on $9.6 Billion revenues; Estimates were $1.62 EPS on revenues of $9.47 Billion; Guidance for next quarter is $0.94 EPS and revenues $6.8 Billion versus estimates of $1.09 EPS on $6.98 Billion in revenues.
  • Baidu.com (BIDU) announces the formal launch of its Japanese language search engine run by its Japanese subsidiary.
  • CheckPoint Software (CHKP) trading up almost 5% after $0.46 EPS versus $0.45 est.; Revenues $206.7M vs. $202.3M est.;
  • CNH Global (CNH) $0.50 EPS versus $0.60 estimate.
  • Coach (COH) $0.69 EPS vs $0.68 estimate; noted weak mall traffic and decline in average transaction size.
  • EntreMed (ENMD) is starting its Phase II study with its MKC-1 cell cycle inhibitor in ovarian cancer and advanced endometrial cancer.
  • Ethan Allen (ETH) posted $0.70 EPS versus $0.68 estimate.
  • Foster Wheeler (FWLT) trades ex-split to reflect a 2 for 1 stock split.
  • General Dynamics (GD) $1.42 EPS vs. $1.41 estimate; sees 2008 EPS $5.55 to $5.65 versus $5.73 estimate.
  • HOKU Scientific Inc. (HOKU) traded down 10% after earnings beat but guidance was deemed light.
  • INX (INXI) awarded Department of Defense con! tract to provide up to $21 million in support  of a Cisco Systems network pact.
  • Martek Biosciences (MATK) noted a December publication showed its DHA may help in late-onset Alzheimer’s, although NIH study results will be in 2010.
  • Parametric (PMTC) $0.26 EPS vs. $0.23 estimate; sees next quarter $0.24 to $0.28 vs. $0.26 estimate; sees 2008 EPS $1.17 to $1.27 vs. $1.16 estimate (revenue in-line).
  • Praxair (PX) $0.98 EPS vs $0.97 estimate.
  • Qualcomm (QCOM) expanded relationship with Motorola for chipsets into certain UMTS 3G handsets in 2008 and 2009.
  • RLI Corp. (RLI) $1.22 EPS versus $1.05 estimate.
  • Rockwell Automation (ROK) $1.04 EPS vs. $1.01 estimates; guides 200 EPS $4.25 to $4.45 versus $4.38 estimate.
  • Southwest Airlines (LUV) $0.12 EPS vs. $0.10 estimate ; reigned in 2008 growth plans to 4%-5% capacity.
  • Texas Instruments Inc. (TXN) has posted earnings of $0.54 EPS and revenues of $3.56 Billion; analysts pegged at $0.52 EPS on $3.58 Billion in revenues; sees Next quarter $0.43 to $0.49 EPS on revenues of $3.27 to $3.55 Billion versus estimates of $0.45 EPS on $3.41 Billion in revenues.
  • TJX Companies (TJX) was Jim Cramer’s retail pick on CNBC’s MAD MONEY last night.
  • United Tech (UTX) $1.08 EPS vs. $1.06 estimate; sees 2008 $4.65 to $4.85 versus $4.85 estimate.
  • Vertex Pharmaceuticals (VRTX) will begin Phase III evaluation of telaprevir for its lead investigational hepatitis C protease inhibitor.
  • WellPoint (WLP) $1.51 EPS versus $1.51 estimate.
  • Werner Enterprises (WERN) $0.28 EPS vs. $0.28 estimate.

Jon C. Ogg
January 23, 2008

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Earnings Preview: Ebay To Announce Lower Than Expected Fourth Quarter Earnings

eBay is set to announce its fourth quarter results on Jan 18th 2012. The company is likely to report constrained earnings on account of disappointing macroeconomic factors and foreign exchange problems. The internet trading company is also expected to suffer due to increased competition from rival companies such as Amazon. However, eBay will benefit from improved product mix on its website.

Expectations

Market analysts have pegged their quarterly earnings expectations at $0.58, while its full year earnings per share is likely to stand at $2.00. The company is expected to report its fourth quarter revenue at $3.29 billion. Analysts are expecting the annual revenue to be at $11.56 billion. The company is expected to maintain its fourth quarter gross margin ratio at 71.5 percent, while its operating expenses are expected to be reported at $2.374 billion. eBay is likely to announce its cost of net revenue at $939? million, while the corresponding figure for the entire year is likely to stand at $3.319 billion.

Third Quarter Results

eBay reported its total revenue for the third quarter of the year at $2.9 billion. Its cost of revenue for the quarter stood at $885 million. The company also reported its Non-GAAP operating expenses at $1.329 billion, while its Non-GAAP operating income stood at $751 million. The company had reported its quarterly earnings at $0.37 per share. Its total net income for the quarter stood at $490 million.

Earnings History

eBay is not showing any clear trend for its quarterly earnings. The company started its Financial Year 2011 by announcing $0.47 in earnings per share for the first quarter of the year. It announced $0.48 in earnings per share for both the second and third quarter of the year. The company is now expected to report its fourth quarter earnings at $0.58 per share.

Punch Line

eBay is working on improving its product mix and the efforts are likely to yield positive results in this quarter and coming financial year! . The co mpany is also expected to benefit from growing PayPal business. But at the very same time, it will suffer setbacks due to poor alignment of PayPal business.?

{$end}

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Wednesday, January 25, 2012

Apple’s Collateral Damage: RIM, Adobe?

Research in Motion (RIMM) and Adobe Systems (ADBE) could be among the disadvantaged parties in the wake of Apple‘s (AAPL) big news day, according to some reports.

Town Hall Investment Research notes that RIM’s leadership in the enterprise market is at greater risk thanks to some of the improvements Apple is making in iPhone OS 4.0.

In a note today, Town Hall analyst Jack Gold wrote: “Apple says companies can now upload and update apps from corporate systems directly without having to go through iTunes. This is a big deal. Companies will no longer have to side-load iPhones through a PC to deploy applications.”

Meanwhile, the Apple-Adobe relationship is receiving new attention following reports that Apple has changed the rules governing how developers can program for the iPhone. New language appears to ban Flash-based programs from being rewritten into iPhone-friendly code.

Still, the news hasn’t changed Standard & Poor’s opinion on Adobe’s stock. The firm is holding onto its Strong Buy rating. “While Adobe’s absence on Apple devices serves to limit the addressable market for Flash, we note that Adobe continues to work with an array of device manufacturers including 19 of the 20 top handset makers,” S&P analyst Zaineb Bokhari wrote today.

Adobe has its own announcement Monday, when it launches the new version of its flagship Creative Suite software .

In today’s trading the stocks are each up less than 1%:

  • RIM is up 48 cents to $70.28
  • Adobe is? up 28 cents to $35.22
  • Apple is up 87 cents to $240.82

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How You Can Sell Runescape Gold

It is legal to get gold in Runescape without breaking the game rules. You should play the game in the way it is meant to be played. The most important rule about getting Runescape gold is that the real money trading is forbidden. You may not use the real money to http://runescape.gamesworth.com”>buy Runescape gold or other Runescape items. The game developer has taken many measures to prevent players from trading gold.

The trade of gold can cause unbalance in game economy. So it is prohibited. To get gold you must work hard in the game. Some players spend days and weeks to grinding for gold in Runescape. Gold is not easy to get. You will get paid for what you have done. You can try the easier way to get gold. Trading items that have value in the game can earn you a lot of gold.

Then you can use your PayPal to Buy RS Gold from the gold selling site. I am a frequently gold customer from the RSfirmcom. I would say that it is safer to use PayPal as the way of payment than the credit card. I will list three of the good RS gold selling websites. RS firmcom is a good place to buy Runescape because they have 24/7 on the internet support. What’s more exciting is that they will deliver you the gold within 5 minutes.

In addition to Runescape, they also sell RS power leveling and gold farming skills. All the products are very cheap on the site. Skype customer service and quick delivery will be conducted on the site. The RS Moneycom is another good choice of buying RS gold.

You can visit the site like OgPalcom and RS2MoneyVIPcom. They two sites will purchase gold from players. Follow the navigation on the website and it will guide you what to do. There is a page “Sell in order to us” you can find to sell your gold. Click the link and fill out the form required. Provide them your personal information as well as confirm your information. Then you get the payment and delivery them your gold. Remember not to give out any of your security passwords.

RS Gold &! #8211; a s the official Runescape money, is very important for the game domination. Each player should buy them!

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TPG Capital Said to Consider Investing $1 Billion in Olympus Corp.

TPG Capital, the private-equity firmrun by David Bonderman, is considering an investment in OlympusCorp. (7733), the Japanese camera maker that admitted to a $1.7 billioncover-up of losses, according to a person familiar with thematter.

TPG is weighing whether to join with a strategic partner toinvest as much as $1 billion in the Tokyo-based firm, accordingto the person, who asked not to be identified because theinformation is private. While Fort Worth, Texas-based TPG hasspoken to potential partners, it��s not clear whether they willpursue a deal, the person said.

Olympus, which is also the world��s largest endoscope maker,restated more than five years of earnings on Dec. 14 afteradmitting it inflated fees to advisers for the $2.1 billionacquisition of Gyrus Group Plc in 2008 and overpaying for threeJapanese companies. This month, the company sued 19 current andformer officials, including former Chairman Tsuyoshi Kikuwaka,over a $1.7 billion accounting fraud.

Olympus plunged 59 percent last year as news of the cover-up emerged, making the stock the the fifth-worst performer onthe Nikkei 225 Stock Average. The firm��s shares fell 2.7 percentto close at 1,236 yen ($16.06) on the Tokyo Stock Exchangetoday.

A committee formed by Ernst & Young ShinNihon LLC saidtoday that it hasn��t found any problems so far with an auditor��sexamination of accounts at the company. The findings aren��tfinal and the review is continuing, the company said at a pressconference in Tokyo.

American Airlines

Owen Blicksilver, a spokesman for TPG, said he couldn��tcomment on the company��s plans, which were reported earlier byReuters.

The firm is also looking at the possibility of investing inAMR Corp., the bankrupt parent of American Airlines, peoplefamiliar with the company said Jan. 12. Bonderman, 69, who co-founded TPG in 1992, is also chairman of Ryanair Holdings Plc,the Dublin-based low-fare air carrier. He earlier held the samepost at Continental Airlines Inc., which TPG! bought out ofbankruptcy in 1993.

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Tuesday, January 24, 2012

Central Bankers' Next Panic Move

It may seem like panic in the stock markets just started this month, but the truth is governments and central bankers have been in "panic mode" since March.

We just didn't see it in the markets until a few weeks ago.

But if you look back, you can tell central bankers were panicking because they kept intervening to manipulate their stock or currency markets.

Here's a quick play-by-play of those panic attacks and the real messages behind them:

  • March 17 - Central bankers in the United States, the United Kingdom, Canada and the Eurozone all join forces with Japan to orchestrate a "coordinated intervention" to drag down the Japanese yen's value.
    Translation: "Emergency! We have to do something about that "strong yen" or else Japan's economy is doomed."
  • Aug. 3 - The Swiss National Bank unexpectedly cut interest rates to "as close to zero as possible." Swiss bankers said they would increase the supply of francs to money markets to curb their "massively overvalued" currency.
    Translation: "This "strong franc' is killing us. Before long, no one will be able to afford our chocolates and fancy watches. We've got to do something. Let's try shooting this "final bullet' in our gun and see if that works." (And, unfortunately for Switzerland, it didn't.)
  • Aug. 4 - The Bank of Japan (BOJ) intervenes once again to push down the strong yen's value by selling yen and buying dollars.
    Translation: "Ok, now we're desperate. We've got to see this yen turn around or we're toast!"
  • Aug. 8 - The European Central Bank (ECB) buys Italian and Spanish bonds.
    Translation: "We need to throw Italy and Spain a bone, even though we don't have enough firepower to bail out Italy like we bailed out Greece. Bu! t we'll put on our best poker face and try."
  • Aug. 9: - The U.S. Federal Reserve announced it would keep interest rates low through mid-2013.
    Translation: "Um, well we have to do something -- let's announce we're keeping rates low. We were going to do that anyway."
  • Aug. 26: - At the annual Jackson Hole central bankers' retreat, Bernanke announced no new measures, saying: "Although important problems certainly exist, the growth fundamentals of the U.S. do not appear to have been permanently altered by the shocks of the past four years." He also promised to make the Fed meeting longer next month to address other concerns.
    Translation: "Well, we've tried everything else, let's say everything is fine to calm the markets down! Then we can always dive into QE 3 next month or the month after if things get really bad!"

Nothing Has Worked

Did any of these emergency moves actually work? Did central bankers manage to stop volatility in the markets?

Heck no!

In fact, they made it worse. Investors have finally sensed panic from the guys in charge. That's why so many stock and currency traders keep hitting the sell button and dumping all their holdings.
That's why the Dow Jones Industrial Average earlier this month lost all its gains for 2011 in a matter of days.

That's also why stocks dropped immediately following the Fed's announcement that rates would stay steady until 2013.

It's not just the United States, either. Stocks in Europe, Canada, and even Asia also have fallen off a cliff recently.

And this is just the beginning...

Central Bankers Will Continue the "Trend of Intervention"

The Fed is at the point where it has to do something.

With all of these unusual moves unfolding in the mark! ets, th e heat is really going to be on the central bank to perform a miracle to calm the markets once again.

The Fed doesn't have the luxury of cutting rates any further, and it's planning to keep rates low for the foreseeable future.

So that only leaves one option: quantitative easing.

Everyone will be pressuring U.S. Federal Reserve Chairman Ben S. Bernanke and his team to intervene with another round of quantitative easing. It's a done deal considering U.S. stocks erased all their gains for 2011 in a matter of days.

Some way, somehow, the Fed will have to push up the liquidity in the markets. That means running the printing presses and again creating more money to bail out the stock market.

It may or may not be called "QE3," but in essence, that's what it will be.

If it gets bad enough, U.S. central bankers may have to call on other Group of Seven (G-7) nations to help bail it out. The G-7 has already pledged to step in if global stock indexes continue to fall off a cliff.

The continued money printing - paired with the slap in the face from Standard & Poor's U.S. credit rating downgrade - means the dollar doesn't stand a chance in the long term.

Everyone views the U.S. dollar as a safe haven in times like this, but a few months or even years down the line, the dollar - and anyone who holds dollars - will pay the price for the Fed's actions.

Meanwhile, riskier currencies like the Aussie dollar will finally get another nice bounce higher as the dollar starts to fall.

The Good News Behind the Fed's Moves

These quantitative easing Band-Aids will only last for so long.

I still believe we're heading for a major stock market collapse. We may not even see the big crash this year, but it's coming. It will happen because the Fed can only pour so many trillions of dollars of assets onto its books before it all caves! in.

When that happens, foreign investors will finally back away from the U.S. markets. Investors will turn to the greener pastures of China, Singapore, Norway and Switzerland as they shake the dust off their feet and leave the United States.

But in the meantime, I take some comfort in the fact that all these emergency interventions are creating some impressive volatility out there in the markets.

For a f orex trader, volatility is absolutely essential. To trade currencies, you need the market to trend up or down - that's when you catch the best profit moves.

And in this type of market, there are plenty of trading opportunities if you know where to look.

In the next couple weeks, I'll be introducing you to various ways to find these opportunities here in Money Morning.

[Bio Note: With the outlook for the dollar and the euro growing increasingly bleak, many readers have asked us about currency trading. So we decided to respond by bringing on a new currency expert - Sean Hyman. Hyman is a veteran currency trader with more than 20 years of experience. He also currently serves as Investment Director for World Currency Watch. Watch for his columns on currency trading in Money Morning.]

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Does Petroleum Development Measure Up?

Margins matter. The more Petroleum Development (Nasdaq: PETD  ) keeps of each buck it earns in revenue, the more money it has to invest in growth, fund new strategic plans, or (gasp!) distribute to shareholders. Healthy margins often separate pretenders from the best stocks in the market. That's why we check up on margins at least once a quarter in this series. I'm looking for the absolute numbers, comparisons to sector peers and competitors, and any trend that may tell me how strong Petroleum Development's competitive position could be.

Here's the current margin snapshot for Petroleum Development and some of its sector and industry peers and direct competitors.

Company

TTM Gross Margin

TTM Operating Margin

TTM Net Margin

Petroleum Development 59.0% 12.5% 1.1%
Cabot Oil & Gas 79.8% 22.1% 15.9%
Enbridge Energy Partners 20.1% 5.7% 3.8%
Range Resources 83.3% (24.1%) (23.0%)

Source: S&P Capital IQ. TTM = trailing 12 months.

Unfortunately, that table doesn't tell us much about where Petroleum Development has been, or where it's going. A company with rising gross and operating margins often fuels its growth by increasing demand for its products. If it sells more units while keeping costs in check, its profitability incre! ases. Co nversely, a company with gross margins that inch downward over time is often losing out to competition, and possibly engaging in a race to the bottom on prices. If it can't make up for this problem by cutting costs -- and most companies can't -- then both the business and its shares face a decidedly bleak outlook.

Of course, over the short term, the kind of economic shocks we recently experienced can drastically affect a company's profitability. That's why I like to look at five fiscal years' worth of margins, along with the results for the trailing 12 months, the last fiscal year, and last fiscal quarter. You can't always reach a hard conclusion about your company's health, but you can better understand what to expect, and what to watch.

Here's the margin picture for Petroleum Development over the past few years.

anImage

Source: S&P Capital IQ. Dollar amounts in millions. FY = fiscal year. TTM = trailing 12 months.

Because of seasonality in some businesses, the numbers for the last period on the right -- the TTM figures -- aren't always comparable to the FY results preceding them. Here's how the stats break down:

  • Over the past five years, gross margin peaked at 54.3% and averaged 48.7%. Operating margin peaked at 42.9% and averaged 9.5%. Net margin peaked at 85.7% and averaged 18.4%.
  • TTM gross margin is 59%, 1,030 basis points better than the five-year average. TTM operating margin is 12.5%, 300 basis points better than the five-year average. TTM net margin is 1.1%, 1,730 basis points worse than the five-year average.

With recent TTM operating margins exceeding historical averages, Petroleum Development looks like it is doing fine.

If you take the time to read past the headlines and crack a filing now and then, you're probably ahead of 95% of the market's individual invest! ors. To stay ahead, learn more about how I use analysis like this to help me uncover the best returns in the stock market. Got an opinion on the margins at Petroleum Development? Let us know in the comments below.

  • Add Petroleum Development to My Watchlist.
  • Add Cabot Oil & Gas to My Watchlist.
  • Add Enbridge Energy Partners to My Watchlist.
  • Add Range Resources to My Watchlist.

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Pre-Market Stock Notes (FEB 1, 2007)

by Jon C. Ogg

(ADM) Archer Daniels Midland $0.67 EPS vs $0.60e.
(AFFY) Affymax Receives $10 mln milestone payment From Takeda based on progress in hematide.
(AGU) Agrium $0.25 EPS vs $0.20e.
(ALNY) Alnylam announced positive results for Huntington's disease.
(ASD) American Standard announced plans to separate into 3 units businesses this year.
(ASN) Archstone $0.53 EPS vs $0.55e.
(ASTM) Aastrom Biosciences receives Orphan Drug status from FDA for dilated cardiomyopathy.
(BIVN) Bioenvision licenses its proprietary antimicrobial technology to Foster
(CMCSA) Comcast $0.21/R$7.03B vs $0.24/$7.13B(e); announced 3-2 stock split; sees 12% revenue growth and expects to add 6.5M revenue generating units.
(CRR) Carbo Ceramics $0.61 EPS vs $0.55e.
(CTX) Centex announced it has sold its commercial construction operations for $362M.
(DELL) Dell has announced that Rollins is out and Michael Dell is reassuming the CEI role instead of just the Chairman role.
(ECIL) ECI Telecom announces planned departure of its CFO.
(EOP) Equity Office received a cash and stock bid boost from Vornado now to $56.00 per share.
(GHL) Greenhill $0.68 EPS vs $0.67e.
(GHM) Graham won $8.8M in new orders.
(GOOG) Google trading down 1.5% after beating earnings.
(GNVC) Genvec announces vaccine collaboration with the Department of Homeland for vaccines against foot and mouth disease.
(HOT) Starwood $0.92 EPS vs $0.75e; unsure if comparable; raised guidance for 2007.
(IVC) Invacare $0.33 EPS vs $0.29e.
(KVHI) KVH Industries Receives 5-year Sole-source Contract from U.S. Military.
(KYPH) Kyphon (KYPH) announces the pricing of $350M in notes.
(LB) LaBarge $0.20 EPS vs $0.19e.
(LSTR) Landstar $0.50 EPS vs $0.47e.
(MMC) Marsh McLennan announces Great-West Life will purchase Putnam Investments for $3.9 Billion.
(MRO) Marathon Oil $2.38 EPS vs $2.25e.
(NRMX) Neurochem announced completion of its 18-month Phase III cl! inical t rial for ALZHEMED for the treatment of Alzheimer’s.
(ODFL) Old Dominion $0.48 EPS vs $0.40e.
(PDC) Pioneer Drilling $0.48 EPS vs $0.50e.
(PTC) PAR Technology subsidiary announced $1.6 Million Air Force subcontract.
(RDEN) Elizabeth Arden $0.91 EPS vs $0.82e.
(RDS-A) Shell posted a $5.28 Billion adjusted profit on $75.5 Billion in sales.
(RTI) RTI Intl Metals announces Timothy Rupert will step down as President and CEO effective April 27.
(SBUX) Starbucks up almost 1% after meeting expectations.
(SGXP) SGX Pharma selects development candidate for MET tyrosine kinase inhibitor program.
(STST) Argon ST announces contract extension valued at $43M.
(ULBI) Ultralife Batteries sees Q4 revenue $30M to $30.5M vs $31M estimate.
(XOM) Exxon $1.69 EPS vs $1.51e.   

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A key product upgrade for Corning means it¡¯s time to buy calls

Global technology-based company Corning Inc. (NYSE:GLW) produces optical fiber, cable, and photonic components for the telecom industry. It also makes glass panels, funnels, liquid crystal display glass and projection video lens assemblies for the information display industry.

So, why do we need to have this company on our radar now? That��s because Corning is set to unveil its ubiquitous Gorilla Glass upgrade, Gorilla Glass 2, this week at the well-known and -attended Consumer Electronics Show.

This is an important time for the company, one that could be pivotal for the share price. Corning stock was pummeled last November on an earnings warning due to the loss of a large customer, with the stock dropping nearly 20% on the news.

Gorilla Glass is still used in over 500 million smartphones, handsets, tablets and other devices, such as TVs. With tablet usage expecting to continue to grow strongly, along with the continual phone upgrades, Corning should continue to get a lift.

The stock is trading at a very cheap 6.5 multiple, and carries a nifty 2.3% dividend. With over $4 per share in cash, GLW still trades under a 6 multiple ex-cash even with an earnings hit of 30% due to the customer loss.

I look for GLW to continue to grind higher and head back to the gap from last November around the $15 level by May options expiration.

Based on GLW��s current market price of $13.52 and using a target price of $15, a target date of May 18, 2012, and $1,000 of investment capital, this is an excellent candidate for capturing some nice gains by buying the GLW May 12 Calls, buying the May 11-14 bull-call spread or buying the stock.

For the full details on this trade, visit TradingBlock.com, create a free Instant Login and try the TradeBuilder feature, where you��ll see several ways to trade this name. Best of all, you can see a potential profit-and-loss outline for each strategy.

Create your free log! in, and get access to these GLW option trading strategies by visiting the TradeBuilder here.

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Reiterate: Price Levels For APPL, IBM, GLD, SPY, XOM

In case you missed our mid week price level update on APPL, IBM, XOM & SPY?we have reissued the earlier weeks post.? As for the broad market we may see 1288 before a retracement lower and do not recommend increasing risk at these levels.

Visit www.chartlabpro.com for our new automated platform to help take the guess work out of investing.? Get 1 month for FREE when we go live.

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Monday, January 23, 2012

Hot Stocks: Netflix Finds Success in Innovation, While Other Video Rental Companies Fight For Survival

GNC Holdings Inc (NYSE:GNC) achieved its new 52 week high price of $27.19 where it was opened at $26.79 UP +0.19 points or +0.71% by closing at $26.96. GNC transacted shares during the day were over 890,711 shares however it has an average volume of 1.74 million shares.

GNC has a market capitalization $2.85 billion and an enterprise value at $3.61 billion. Trailing twelve months price to sales ratio of the stock was 1.42 while price to book ratio in most recent quarter was 2.89. In profitability ratios, net profit margin in past twelve months appeared at 5.68% whereas operating profit margin for the same period at 13.69%.

The company made a return on asset of 7.06% in past twelve months and return on equity of 12.70% for similar period. In the period of trailing 12 months it generated revenue amounted to $2.00 billion gaining $20.93 revenue per share. Its year over year, quarterly growth of revenue was 15.50% holding 82.50% quarterly earnings growth.

According to preceding quarter balance sheet results, the company had $146.11 million cash in hand making cash per share at 1.38. The total of $901.88 million debt was there putting a total debt to equity ratio 92.82. Moreover its current ratio according to same quarter results was 2.95 and book value per share was 9.26.

Looking at the trading information, the stock price history displayed that its S&P500 52 Week Change illustrated 7.26% where the stock current price exhibited up beat from its 50 day moving average price of $23.40 and remained above from its 200 Day Moving Average price of $22.01.

GNC holds 105.81 million outstanding shares with 77.32 million floating shares.

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Selecting Your Strike Price

Many beginning traders have little trouble understanding the risk/reward characteristics of options but often have difficulty deciding which strike prices to use.

Whether those strike prices are “in the money,” “at the money” or “out of the money” will affect how big the underlying move needs to be to reach profitability, and also determines whether the trade can be profitable if the underlying stock remains unchanged.

The tables below help illustrate how to properly structure a long or short option trade to match your level of bullishness or bearishness.

For example, if you are extremely bullish, you may want to consider out-of-the-money (OTM) long calls or in-the-money (ITM) short puts. Keep in mind, both generally require a bullish move of extreme magnitude in the underlying stock in order to reach profitability.

If you’re slightly bullish, you may want to try ITM long calls or OTM short puts, the latter of which can sometimes be profitable with no movement in the underlying stock.

If you are extremely bearish, you may want to consider out-of-the-money long puts or in-the-money short calls. Both generally require a bearish move of extreme magnitude in the underlying stock in order to reach profitability.

If you’re slightly bearish, ITM long puts or OTM short calls will likely be your best bet. And keep in mind that out-of-the-money short calls can sometimes be profitable with no movement in the underlying stock.

Risk vs. Reward

As with most option strategies, the greater the move needed in the underlying st! ock, the higher the profit potential, but also the less likely a profit will be made.

In the case of OTM short puts and OTM short calls, because profitability is possible with no movement in the underlying stock, the potential profit will likely be very small.

However, the risk on these trades is extremely high, which is why I don’t recommend uncovered calls or puts. The use of credit spreads is a safer alternative while generally providing only slightly less profit potential. Credit spreads involve the simultaneous purchase and sale of option contracts of the same class (puts or calls) on the same underlying security.


Randy Frederick is Director of Derivatives at the Schwab Center for Financial Research. To learn more about him, read his bio.

This article originally appeared on The Options Insider Web site.

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DrStockPick.com Stock Report! 8/19/09, INMD, MYL, JAVA, RAVN, NTUR, HIMR

DrStockPick.com Stock Report!

Wednesday August 19, 2009


IntegraMed America, Inc. (NASDAQ: INMD), the nation’s leading provider of specialty healthcare services in emerging, technology-focused niches, today announced that The Froedtert and Medical College of Wisconsin Reproductive Medicine Center has begun offering IntegraMed’s Attain(TM) IVF Program - a course of treatment approach that improves patient success with In Vitro Fertilization (IVF).

Mylan Inc. (Nasdaq: MYL) today announced that the company and its subsidiary Mylan Pharmaceuticals Inc. filed a civil lawsuit in the Circuit Court of Monongalia County, W.Va., against the Pittsburgh Post-Gazette, Post-Gazette reporters Len Boselovic and Patricia Sabatini, and others as yet unknown.

Sun Microsystems, Inc. (NASDAQ:JAVA) today announced that its Sun SPARC Enterprise(R) servers with chip multi-threading (CMT) technology set three new world-records on industry-standard e-mail serving and Java benchmarks. These records highlight the enterprise-class performance and significant infrastructure and management cost savings Sun’s Open Network Systems with the Solaris(TM) Operating System (OS) deliver through the convergence of compute, networking and storage. Sun also announced outstanding performance on the Oracle(R) Business Intelligence Suite Enterprise Edition (BI Suite EE) test and Zeus Extensible Traffic Manager (ZXTM).

Raven Industries, Inc. (Nasdaq: RAVN) today reported that its financial results for the three months and six months ended July 31, 2009, showed surprising strength in a very w! eak eco nomic environment. Sales and net income were down from the previous year’s record second quarter, but profit margins were up, following actions to improve productivity and reduce spending levels.

Natural Blue Resources, Inc. (formerly Datameg Corporation, a Delaware corporation) (OTCBB:NTUR) announced today that its wholly owned subsidiary of the same name completed the acquisition of Eco Wave, LLC. “Eco Wave” holds the exclusive worldwide use and manufacturing license to patents for waste treatment and water purification for the intended use by NTUR.

Hollund Industrial Marine, Inc. (PINKSHEETS: HIMR) today announced that it has retained the services of Martin E. Janis & Company, Inc., a leading investor and public relations agency, to assist in the Company’s shareholder communications program. Martin E. Janis & Company, Inc., founded in 1950, is a Chicago-based, full-service investor and public relations agency. The firm, the oldest in the field of investor relations, has extensive experience representing fast growing public and private companies.

Hollund Industrial Marine, Inc. (PINKSHEETS: HIMR) today announced that it has retained the services of Martin E. Janis & Company, Inc., a leading investor and public relations agency, to assist in the Company’s shareholder communications program. Martin E. Janis & Company, Inc., founded in 1950, is a Chicago-based, full-service investor and public relations agency. The firm, the oldest in the field of investor relations, has extensive experience representing fast growing public and private companies.

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Gold Will Hit $5,000 an Ounce Long Term … But the Near-Term Profit Prospects Are Even Bigger

Longtime commodities guru Peter Krauth touched off a real media buzz earlier this year when he publicly predicted that gold would hit $5,000 an ounce in the next few years - a projection he stands behind.

But here's the irony.

While Krauth's prediction would represent a total return of about 320% over that multi-year span, he says the potential returns on some of the near-term profit plays he's looking at are even bigger.

"These near-term opportunities are significant because the companies that explore and/or produce gold are leveraged to the price of gold," Krauth said in an interview with Money Morning. "So a 10% to 20% rise in gold's price could cause the share prices of some of these firms to gain 20% to 60% - or more - in a matter of months."

In that interview with Money Morning , Krauth - the editor of the Global Resource Alert private advisory service - also said:

  • That the giant Wall Street investment banks are making billions in profits by trading commodities. Expect that to continue. In fact, with the ready access to capital banks enjoy in the current zero-interest-rate environment, these financial behemoths will be able to make sure that trend continues - meaning the prices of gold and other commodities will only head higher.
  • The outlook for gold, oil and other commodities is bullish in both the near term and the long term.
  • That simpler investment strategies - direct investments in gold-miners, for instance - are both less-risky and more lucrative than more-esoteric investments such as options and futures, especially at present.
  • That junior-resource/junior-mining companies can be "particularly explosive" profit plays right now.
  • And that he expects his proprietary "Gold Spike Indicator" to issue a "Strong Buy" signal! for gol d sometime in the next several weeks.
Here is a partial transcript of Krauth's sit-down interview with Money Morning.

William Patalon III (Q): Earlier this year, you publicly stated that gold could go to $5,000 an ounce, long-term. Do you still feel that way? What are the catalysts that will make that forecast come true?

Peter Krauth: I feel even stronger about my forecast now. There are a few catalysts I expect will bring about a major rise in the price of gold. I'm firmly in the inflation camp. Inflation may not be an obvious threat right now, but it's the only logical outcome, given the recent actions of spendthrift governments. Also, investment demand for gold has been robust, recently pushing the SPDR Gold Trust ETF (NYSE: GLD) past the $50 billion-in-holdings mark. And despite a 10-year secular bull market - which has seen gold close higher in each calendar year than it did the year before - we've yet to reach the "mania" stage, where prices really soar ... so far.

(Q): Even with this bullish long-term forecast for gold, you've said that some of the near-term profit opportunities may be even more significant. How significant are these profit opportunities and what are the catalysts that can cause gold to spike in the near term?

Krauth: These near-term opportunities are significant because the companies that explore and/or produce gold are leveraged to the price of gold. So a 10% to 20% rise in gold's price could cause the share prices of some of these firms to gain 20% to 60% - or more - in a matter of months.

As for catalysts, I think t he risk of pending-sovereign-debt implosions - as Iceland, Dubai and Greece have demonstrated - could manifest themselves elsewhere, particularly in Southern Europe. After all, how many trillion-dollar bailouts can the European Union (EU) or United States possibly afford? I also expect that ! we could see central banks continue to be net buyers of gold in 2010 (and for many years going forward) - just as we saw in 2009, which was the first time that happened in 20 years. That could help push gold to $1,500 by late this year or early next. [Editor's Note: Check out the accompanying info-graphic, "The Great Commodities Grab," which shows how much Wall Street is expecting commodity prices to escalate.]


Krauth: Well, since the financial crisis, some of the largest U.S. investment banks have converted into bank holding companies. That means they must file quarterly reports on their holdings, including gold and other commodities. What I've repeatedly noticed is that, for a certain amount of time before, during and after these quarterly reporting dates, gold has moved up significantly.

(Q): So exactly what is your "Gold Spike Indicator" saying right now ... or what do you expect it to say? How long will this window be open this time around?

Krauth: This window is usually open for about three to four weeks. That's not a long time. It's important to ensure you're properly positioned in time to benefit. This time around, I'm expecting the GSI to indicate that the next two to four weeks are likely the best time to get positioned in both gold and silver, as both those metals could begin to spike soon after that.

As you know, the fall tends to be the strongest period of the year for precious metals prices. What's interesting this time around - because GSI provides a signal four times a year - is that precious metals go through their weakest period in the summer months of June, July and August. That means we could be setting up for an even bigger spike this time around. And that's really exciting.

(Q): You've written extensively about the bullish, long-term prospects for commodities. As part of that, you've uncovered a promising new development in the resource! s area: It involves banks - especially big investment banks - taking physical control of commodities. Just what is it that we're seeing here? And isn't this an element of your "Gold Spike Indicator?"

Krauth: That's correct - this is part of the GSI. Keep in mind that a large chunk of profits that big banks report these days come from trading. But much of that trading isn't even that risky, it's just leveraged so highly it pays off very, very well. As we know, banks can borrow pretty cheaply these days with interest rates at microscopic levels. But it goes deeper than that. These banks have made strategic moves to "control" many of the commodities they trade.

What I mean by this is that they are no longer just "paper trading" commodities through futures contracts. This began a couple of years ago with the creation of exchange-traded funds (ETFs) that were physically backed with such commodities as gold, copper or silver, to name just a few.

JPMorgan Chase & Co. (NYSE: JPM) and Goldman Sachs Group Inc. (NYSE: GS) have begun taking physical delivery of gold when their futures contracts mature. Last August, Morgan Stanley got the okay to trade with Dubai Gold Securities, which will allow it to take physical possession of the gold.

Earlier this year, Goldman and JPMorgan each bought established metals-warehousing facilities. Goldman purchased Metro International of Detroit for $550 million, and JPMorgan bought Henry Bath of the United Kingdom as part of a larger $1.7 billion acquisition. According to industry insiders both deals were done at a premium. These guys aren't paying premiums unless they foresee higher prices.

Another consideration is the exponential growth of physically backed commodity ETFs, like the SPDR Gold Trust ETF (NYSE: GLD), which means gold supplies are being physically taken off the market while soaking up supply! ... that can't help but affect market prices.

(Q): Why are banks grabbing up global commodity supplies?

Krauth: Banks understand that ... long-term ... we're in a spectacular global bull market for natural resources. And they understand that the end of this "bull run" is nowhere in sight. These big banks have more than $4 trillion riding on commodities, so they're making sure that these trades go their way. How better to influence the price of a commodity than to control its supply - or at least enough of it to have a measurable impact? That's why they're taking steps to gain physical control.

By taking physical commodities off the market while demand is on the rise, they're only going to exacerbate supply shortages. But let me put it another way so that I'm being perfectly clear: The physical-commodities strategies now being employed by banks can only elevate the pressure beyond anything we've seen before .

(Q): Are banks, in effect, "gaming" the financial system?

Krauth: Yes, I believe what they are doing is skewing the game in their favor. When you look at the kinds of forecasts the banks are making, despite all the economic risks on the horizon, their level of conviction is very telling. For instance, you've got Goldman Sachs calling for gold to rise by $150 an ounce, or about 13%, this year alone. And Bank of America Corp. (NYSE: BAC) expects oil to hit $150 a barrel within four years, which would represent a gain of about 90% from Thursday's closing price.

(Q): So many gold bugs go in for sophisticated investment strategies - options, futures, and the like. But you prefer to keep it simple. In fact, you've often cited an old market adage that that says: "The best place to look for gold is in a gold mine."

Krauth: While some traders use futures or options to play the commodity markets, I prefer to keep my strat! egies si mple and go directly to the source: That's why I believe that the shares of the companies that get the gold out of the ground offer the biggest payoffs at the lowest levels of risk. Companies that do a good job of controlling costs and growing production through resource expansion or sound acquisitions make the best candidates. The important part is to try and avoid overpaying. I pay particular attention to smaller and mid-tier candidates, as they are more likely to manifest outsized growth, or become takeover targets.

If you really think about it, this strategy makes the most sense: Investors stand to maximize their profits when they buy into a well-run company that controls sizeable amounts of a rare mineral that happens to be one of the world's most-sought-after natural resources.

That means it's time to buy gold-mining stocks. But only certain ones.

(Q): For retail investors, what are some of the best ways to profit from this trend?

Krauth: I like some of the junior-resource/junior-mining companies. With the junior explorers or developers, those returns can be particularly explosive: A "junior" with discovery potential can sometimes return 10 times to 15 times an investors original outlay in as little as one to two years (12 months to 24 months). Who needs leverage or options, or to worry about expiry dates? Owning shares in these types of companies is akin to holding permanent "calls" on the underlying resource. The inherent leverage can be explosive.

(Q): That leads us to the big question, the one that investors reading this will most likely want the answer to: What kinds of returns are possible from these investments, over what time period, and why?

Krauth: Many of these resources companies are way undervalued for the quantity of resources they own. So, as the price of the underlying commodity goes up, the shares of the companies will skyro! cket eve n more because they can sell their output at higher prices, thereby expanding their profit margins handsomely. As for their in-ground resources, the market accepts higher prices and gradually revalues them accordingly.

And all of this happens even before the company extracts the resources. Plus, there aren't even storage costs to worry about; Mother Nature takes care of that.

In my view, it's not unrealistic to expect many of these companies to return anywhere from 10 times to 15 times your money. If you look back on the gains made in shares of some of the biggest names in commodities, that's already happened over the past seven or eight years.

(Q): I'd be remiss if I didn't at least mention China and India. How does China factor into this? India? In addition to the commodities themselves, should we be investing in these countries? How does your view of the future fit into the broader commodities boom that we're projecting?

Krauth: The emergence of China, India and the remainder of Greater Asia is unprecedented, so the demand for commodities - from a fundamental standpoint - is rock solid. But I also think we'll need to deal with further financial crises along the way, so gold in some form is a must for all investors, regardless of age.

I mean, just think about it: With 40% of the world's entire population living in just these two countries combined, astute investors understand it's impossible to ignore the impact of their fast growth rates. Both countries are modernizing at a dizzying pace, which naturally translates into massive escalations in the demand for natural resources, precious metals and agricultural commodities. I believe that gold, oil, and many of the base metals and even agricultural commodities could double or triple within three to five years.

But given my preference for "simple" strategies, I prefer to invest in the companies producing the raw materials China and India need or want -! no matt er where they happen to be headquartered. That gives me more latitude, and becomes an effective-risk-management tool, as well.

Add these into the commodities mix that already contains the market-manipulation strategy investment banks are brewing, and investors are looking at one strong profit elixir. I'll repeat again here what I said earlier: The physical-commodities strategies now being employed by banks can only elevate pricing pressures beyond anything we've seen before .

Gold - and oil - figure to huge beneficiaries.

(Q): Given the looming signal you're expecting from your gold indicator in the days to come, let's focus on gold. To better illustrate some of the points you've made here, can you talk about some of the specific profit opportunities that you've either looked at, or acted upon, of late?

Krauth: Sure. I've been looking at a few mid-tier gold producers that are completely un-hedged to the price of gold. One, in particular, is profitable, and is trading at only three times cash flow. Its price could double or triple just to reach the same valuation that its peers enjoy. My Global Resource Alert subscribers own a mid-tier gold-and-silver producer. This company's flagship project boasts a net-present value (NPV) of more than $800 million with gold at less than $700 an ounce, and silver at $13 an ounce. That doesn't even include the company's other projects or significant discovery potential. The entire company's market value is less than $600 million. I think we could easily see a double or triple in 12 to 18 months.

We've also recently added a precious-metals-explorer "junior" that already has several million ounces of "gold equivalent," millions in cash, no debt, a land package in a promising precious-metals belt, and an aggressive drilling program designed to define more ounces. This company has already attracted interest from an established major miner, so! this is a story that investors will want to stay tuned into.

(Q): Thanks for sitting down with us, Peter.

Krauth: My pleasure.

[Editor's Note: Peter Krauth, a frequent contributor to Money Morning, is the editor of the Global Resource Alert, a private advisory service that focuses on precious metals, energy resources and other natural-resource-related commodities. Krauth spent two decades as a market analyst and portfolio advisor, and has covered all the commodities sectors, including gold, silver, coal, alternative energy and agriculture.

All that research led Krauth to the discovery of the "Gold Spike Indicator," or GSI, which signals the near-term direction of key commodity prices, including gold.

However, because it's tied to quarterly disclosure data, the GSI is available only four times a year, meaning it offers investors only a short time to act. If you want to find out more about this before this "profit window" closes, please click here.]


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