Lululemon Jumps on Strong Guidance

Lululemon (LULU) stock clearly doesn’t trade like other retailers. A hint of a slowdown in its tremendous growth sends shares tumbling. And an increase to earnings expectations can lift the stock enormously. That’s what’s happening today, after lululemon said it now sees fourth quarter EPS of 47 to 49 cents, up from its previous guidance range of 40 to 42 cents.

Lululemon has struggled somewhat to find the right level of inventory — for much of 2011, investors were concerned that inventory was too low. But now, the company is confident in its inventory levels.

“Our work throughout the year building our inventory position is driving our success in the fourth quarter. Guests have responded exceptionally well to the robust assortment and bright color palette for holiday, and momentum continues with the new spring product offerings,” said CEO Christine Day in a statement.

5 Market-Beating ETF Strategies for Your Portfolio

There�s a bit of confusion over index ETFs for some investors. Exchange-traded funds that are tied to an index are indeed ways to march in lockstep with the major indices — the widely held SPDR S&P 500 ETF (NYSE:SPY), for instance, has a remarkable $80 billion in assets from investors who just want to �buy the market.�

But don�t be fooled. While the SPDR S&P 500 fund and the similar SPDR Dow Jones Industrial Average ETF�(NYSE:DIA) are tied directly to the indices for which they are named, there are a host of index funds out there with very focused strategies. These ETFs focus on certain sectors or certain investment classes and thus can be a very simple and effective way to focus a limited amount of cash on a great investment opportunity.

So what sectors and related ETFs are performing the best right now in this volatile stock market? Take a look for yourself with these five high-flying funds:

    Utility ETFs

The utilities sector has been red-hot in 2011. You might think this is absurd since utility stocks are quite boring investments. It�s not like a power company in Florida is going to see its profit double from quarter to quarter — unless rates double or the number of citizens increases dramatically overnight. They are legalized monopolies that largely plod along and pay dividends, but not much more. But it�s this very stable nature of the utility sector that has brought in buying pressure from risk-averse investors.

Take the Utilities SPDR ETF (NYSE:XLU), which�is up 7% so far in 2011, compared with a 2% slide for the broader market. The icing on the cake is that XLU pays a 4% dividend because of its many cash-rich and high-yield holdings that include The Southern Company�(NYSE:SO),�Exelon (NYSE:EXC) and Dominion Resources (NYSE:D).

Big demand for utility stocks in this troubled market environment means big gains for XLU and other utility ETFs. The great dividend yield also is a selling point.

    Bond ETFs

Buying bonds can be a confusing business for many investors. Do you really want to tie up your money for a decade in a 10-year T-Note? Are �junk� bonds safe? Who the heck do you call to buy and sell bonds anyway?

Take the guesswork out of bond investing with an ETF. It�s not only easier on you — it�s also pretty good for your portfolio. Some of the top-performing funds of 2011 have been bond ETFs as investors look to get out of the stock market and into low-risk, income-focused investments. Here are a few top bond funds to consider:

The PIMCO 25+ Year Zero Coupon U.S. Treasury ETF (NYSE:ZROZ) is a mouthful, but it is up 40% so far this year. Why? It�s complicated, but the simplest explanation is that many zero coupon bonds are tied to inflation — and as inflation heats up, the value of those bonds rise. Many investors are banking on inflationary trends over the long term, hence a big recent rally for this bond fund.

The PIMCO Build America Bond Strategy ETF (NYSE:BABZ) invests in (obviously) Build America Bonds that are used to fund municipal projects like roads and bridges. The rate of return on these bonds can be significantly better than the rock-bottom rate of U.S. Treasuries, but they carry a very low risk of default. Build America Bonds also carry special tax credits and federal subsidies to boot. All this has led to a nice 15% gain for BABZ in 2011 while the broader market is down.

The iPath US Treasury Long Bond Bull ETN (NYSE:DLBL) is not a fund with bond assets, but rather an exchange-traded note that looks to profit from the change in overall yields. The DLBL fund provides returns based on an increase or decrease in the yields of long-term U.S. Treasury bonds. And obviously since rates are rock bottom and have nowhere to go but up, DLBL has been doing quite well — up 35% so far in 2011.

    Gold ETFs

In what is likely the no-brainer of the year, investors looking for a market-beating opportunity right now should consider turning to gold. The two leading physical gold ETFs — SPDR Gold Trust (NYSE:GLD) and the iShares Gold Trust (NYSE:IAU) — are both up 18% year to date in 2011. That�s even after gold prices have rolled back from highs over $1,900 this summer to under $1,700 right now.

Gold mining stocks had been outperforming the market nicely this year until a few weeks ago when the bottom fell out of the sector as gold prices flopped. The Market Vectors Gold Miners ETF (NYSE:GDX)�has suffered a 10% drop in less than a month to put it in the red so far this year — but as recently as September, GDX was sitting on a 5% gain in 2011. There is a chance that this fund is a bit oversold as miners like Barrick Gold (NYSE:ABX), Newmont Mining (NYSE:NEM) and Goldcorp (NYSE:GG) have been held back in recent weeks.

As investors look to take shelter in hard assets, gold is one of the big fall-back investments right now. These ETFs provide an easy way to play the gold rush without worrying about storing physical gold bars in your basement.

    Short ETFs or Inverse ETFs

Shorting the market is a strategy that doesn�t sit well with many investors. After all, it seems a bit morbid to profit as others are suffering. But in this difficult market, where there�s not a whole lot of upward momentum to be had, it can be in your best interest to consider a focused play on a specific part of the market you believe is in for some trouble.

Think the market is set to take a spill? Consider the ProShares Short S&P 500 ETF (NYSE:SH). It�s not a 1-to-1 inverse play on the market because of fees and the logistics of a short-selling strategy. But it is indeed a directional play — and one that you don�t have to research strike prices or options expiration dates to buy into. Think emerging markets are overbought? Consider the ProShares Short MSCI EAFE Fund (NYSE:EFZ) that goes up as the MSCI EAFE emerging market index goes down (that�s short for Europe, Australasia and Far East, if you�re wondering).

There also are supercharged sector-focused ETFs that play a particular industry. Take the Direxion Daily Financial Bear 3X ETF (NYSE:FAZ), which�profits as the financial sector declines — three times over! This leveraged ETF is a very risky play, but consider that FAZ almost doubled in a few weeks across late July and early August as the market volatility eviscerated the financial sector. If you were one of those investors who had nothing but bad things to say about the banks and saw this crash coming, you could have played the downside this trade.

Remember, short-side ETFs and leveraged ETFs like the 3X financial fund discussed here are a bit riskier than other funds. They tend to charge you more in fees due to their intensive strategy and active management necessary for such strategies. But if you have strong feelings about a short-term directional play in the market, these ETFs are a very easy and effective way to spice up your portfolio and beat the market.

After all, why settle for beating the market with smaller losses when you can profit from a downward move with funds like these?

Dividend ETFs

We come full circle to the idea of income stocks. As with the utility sector ETF highlighted first, the broader idea of dividend stocks and income investments is very appealing right now. Investors are looking for safe havens that pay them even in tough times — and stable, cash-rich dividend stocks are the way to go.

What better way to tap into income than the WisdomTree Dividend ex-Financials (NYSE:DTN)? This fund invests in dividend payers but avoids financial stocks because of their toxic and uncertain balance sheets right now. The result is a 3% gain so far in 2011 and a 3.2% dividend yield. Not bad. There�s also the First Trust Morningstar Dividend Leader ETF (NYSE:FDL) with similar performance and yield.

The correlation to the market with these plays still is very strong because you are essentially buying the blue chips of the S&P 500 and Dow that pay decent dividends. That means the makeup is very similar — barring, of course, the ex-financials ETF that omits banks from its ranks.

However, the nice dividend yield and the more stable nature of these payers make dividend ETFs a good bedrock investment for most portfolios in these troubled times.

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

GE first-quarter profit slips, but earnings beat estimates

NEW YORK�General Electric (GE) said Friday that first-quarter profit fell 12%, although it topped Wall estimates when some one-time items are excluded.

The industrial and financial giant said its primary manufacturing operation rebounded after posting weak results following the global recession. Its industrial business, which includes transportation, health care and energy infrastructure, boosted profit 10% in the quarter.

Altogether, GE reported earnings of $3.03 billion, or 29 cents per share, for the first quarter. That compares with $3.4 million, or 31 cents per share, in 2011. Revenue slipped 8% to $35.2 billion.

Excluding special items, GE says it earned 34 cents per share.

Analysts, who typically exclude special items in their estimates, were expecting earnings of 33 cents per share on sales of $34.8 billion.

GE said profit increased 10% in energy infrastructure, its largest industrial business by revenue. Profit also rose 48% in its transportation segment, 10% in health care, and 2% in aviation. Profit fell 11% in its home and business solutions segment.

On top of the strong quarterly performance, orders for locomotives, aircraft engines and other industrial equipment grew by double-digit rates for the quarter.

The company's GE Capital lending reported a profit increase of 6%.

The Fairfield, Connecticut, company is a major component of the Dow Jones industrial average and is closely watched because it has a stake in almost every sector of the economy, from light bulbs and credit cards to windmills.

Fixing U.S. Democracy to Give Economy a Chance

Face it. Our democracy is broken. As bad, what we have for governance in its place is destroying the economy. Congress is really not worth a fig. It does a poor job too much of the time and is simply too bought off by special interests not to be hurtful to the economy. In fact, what Congress does seriously damages the economy.

Watch what will happen to our efforts to seriously regulate the banking industry. Even if we do manage to get a few good regulations past Congress, those doing the regulating will soon become the captives of those regulated. There is simply too much bribery money and promises of later rewards floating around. As things stand, the situation is essentially hopeless. Whether he wanted the result or not, Obama is too close to, if not in bed with the banking industry. TARP I and II made sure of that. So too did keeping Paulson on as Secretary of the Treasury. He did more good for Goldman Sachs (GS) in that position than he ever did as CEO of the Company. Witness the AIG bailout for Goldman. The banks looted the Treasury and did it while engaging Obama on his watch.

Obama being too close to the bankers is the principle reason we do not have a good infrastructure repair program in place to help the economy and the unemployed. The bankers don't want that. Instead, they want the deficit reduced right now, even if it means looting Social Security to do it. What they don't realize is that their plans and policies will throw us right back into recession. So far, what is good for the bankers, as they perceive it, is truly bad for the economy. The bankers and their lobby are damaging and have seriously damaged our economy, and still we put up with the rats. Are we daft or what?

Worse, this entire situation will deteriorate further with the new SCOTUS decision to remove limitations on some corporate campaign contributions. That decision and others similar to it are based on the incorrect idea that campaign contributions are identical to free speech and are therefore protected under the First Amendment. This is wrong. Free speech seeks to influence by the persuasiveness and merits of the ideas it urges. Campaign contributions seek to influence by purchasing cooperation from government officials. The two are quite different. In fact, campaign contributions undermine free speech by purchasing air time for bad ideas, as though those ideas have been found worthy by many others – itself a fraud -- and by blocking the good ideas of free speech out or shouting them down.

More private interest money will flood the hallways of Congress after this latest decision by SCOTUS. It is crazy and we are nuts for putting up with what is going on. Our economy has been sabotaged by highly paid and wealthy special interests who operate against the middle class and are destroying our economy by destroying that middle class and the small businesses they run that mostly make up our economy.

I do think our democracy is badly broken and has had it. The question is, is it even theoretically fixable and with it our economy? I think it is. However, the public is a long way from (1) understanding the problem, and (2) understanding what to do about it to fix it.

As I see it, only five things together can resurrect our democracy to its former glory and enable our economy to ultimately do better and grow in the long run as it used to:

(1) strong campaign finance reform with draconian teeth,

(2) have everyone abandon the absurd notion that campaign contributions are protected under free speech and seriously limit them,

(3) aggressively regulate and control lobbyists and their access to Congress (Yes, regulate the Right of Petition just as other constitutional rights are regulated in the public interest),

(4) redistribute income back to the middle classes against the special interests that have used government to take that income away from the middle class, and

(5) pass a law, or better yet, a constitutional amendment requiring that any legislation passed by Congress or any regulation promulgated by government must not be directly or indirectly adverse to the national public interest.

This program would fix things both our democracy and our economy, in time. (1) through (3) are designed to directly stop the special interest bribery of Congress and governmental officials that is so undermining us and the economy. (4) is designed to give CPR to the middle class that has been knocked out and is in shock, along with the small businesses they run. (5) is to stymie legislation and regulations that serve special interests at the expense of the public or other significant groups and to kill incidental legislative pork.

However, don't hold your breath here on any of these. Seems we are going to stay broken and have our economy in recession, at least for a good while, until the public figures it out the problem and then learns to demand the right reforms, starting with kicking those in power out and electing those who will adopt these measures.

Until then, sit back, pop the tab on a beer or pour a glass of good Merlot and watch some argue the earth and universe were created 4,000 to 6,000 years ago and others do our public social order and economy serious injury just to get some more money.

With so much greed, cynicism and stupidity at work in and around the process of our government, our situation is truly breath taking in its ignorance and blatancy.

It dazzles and dismays me. We must fix it.

Disclosure: none relevant; no bank stock, in particular

Top Stocks For 2012-1-5-19

PWRM, Power 3 Medical Products Inc, PWRM.OB

Dr Stock Pick HOT News & Alerts!

Power3 Medical Products, Inc. CEO Helen R. Park

Interviewed by Wall Street Transcript

 

Friday August 14, 2009

Power3 Medical Products, Inc. CEO Helen R. Park Interviewed by Wall Street Transcript

Provided company update on commercialization of NuroPro� CLIA Test

Power3 Medical Products, Inc. (OTCBB:PWRM), (www.power3medical.com), announced that the company�s CEO, Helen R. Park, M.S. was interviewed by the Wall Street Transcript, TWST, an on line magazine on Wednesday of last week.

Ms. Park provided a company update on the state of the clinical trials for Neurodegenerative disease diagnostic tests and for breast cancer diagnostic tests. Specifically, she discussed the progress of the NuroPro� AD and NuroPro® PD clinical trials. Power3 has finished Phase I and reported the results at the International Congress of Alzheimer�s Disease (ICAD) in Vienna, Austria on July 14 2009. This was accomplished with the support of Power3�s licensee and collaborator for NuroPro, Transgenomic, Inc. Omaha, Nebraska and despite the huge impact on Power of the world economic down turn and Hurricane Ike. Ms. Park re-structured the company by reducing the burn rate, and re-focused the commercialization on the completion of the NuroPro� Phase I clinical trials by executing the license and collaboration agreement with Transgenomic, and expanding Power3�s Scientific Board to complement renowned neurologist, Dr. Stan Appel and provide additional expertise, representation and inroads in Alzheimer�s disease (Dr Marwan Sabbagh), Parkinson�s disease (Dr. Katerina Markopoulou), psychiatric diseases (Dr. Lourdes Bosquez), and gastro intestinal diseases (Dr. Eric Zuckerman). Sources for additional funding via direct investment were also obtained.

�This interview was a great opportunity to provide the newest information on not only our testing and but also the progress in our facing the economic situation�, commented Ms. Helen R. Park, CEO of Power3. �We were able to overcome this and recover from the damage done during hurricane IKE. This progress is thanks to our licensing agreement with Transgenomic, Inc. and the diligence of our staff at Power3. We are now moving to the Phase II, prospective samples for Alzheimer�s and Parkinson�s.�

�The fact that we have progressed so far under difficult circumstances underscores the viability of our technology and the tenacity of our people at Power3,� commented Ira L. Goldknopf, President and CSO. �To be able to present our unique and breakthrough clinical validation results at ICAD, the Alzheimer�s Disease Association�s annual meeting was an honor for me and great exposure for the company to the worldwide community of neurologists. It�s terrific to be working with Helen!�

About Power3 Medical Products, Inc.

Power3 Medical Products, Inc. (OTCBB:PWRM) (www.Power3Medical.com), is a leading Bio Medical company engaged in the commercialization of cancer and neurodegenerative disease biomarkers, pathways, and mechanisms of diseases through the development of diagnostic tests and drug targets. Power3�s patent-pending technologies are being used to develop screening and diagnostic tests for the early detection and prognosis of disease, identify protein biomarkers, and drug targets. Power3 operates a state-of-the-art CLIA certified laboratory in The Woodlands (Houston), Texas. The Company continues to evolve and enhance its IP portfolio.

Forward Looking Statement

This press release contains forward-looking statements within the meaning of section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. With the exception of historical information contained herein, the matters discussed in this press release involve risk and uncertainties. Actual results could differ materially from those expressed in any forward-looking statement.

Contact:
Power3 Medical Products, Inc.
CEO
Helen R. Park, M.S.
hpark@power3medical.com
www.power3medical.com

Source: Power3 Medical Products, Inc.

Keep a close eye on PWRM today, do your homework, and like always BE READY for the ACTION!

Stocks for the Long Run: Constellation Brands vs. the S&P 500

Investing isn't easy. Even Warren Buffett counsels that most investors should invest in a low-cost index like the S&P 500. That way, "you'll be buying into a wonderful industry, which in effect is all of American industry," he says.

But there are, of course, companies whose long-term fortunes differ substantially from the index. In this series, we look at how individual stocks have performed against the broad S&P 500.

Step on up, Constellation Brands (NYSE: STZ  ) .

Constellation Brands shares have easily outperformed the S&P 500 over the last quarter-century:

Source: S&P Capital IQ.

Since 1987, shares have returned an average of 11.8% a year, compared with 9.7% a year for the S&P (both include dividends). That difference adds up fast. One thousand dollars invested in the S&P in 1987 would be worth $19,200 today. In Constellation Brands, it'd be worth $35,000.

Now have a look at how Constellation Brands earnings compare with S&P 500 earnings:

Source: S&P Capital IQ.

Strong outperformance here, too. Since 1995, Constellation Brands' earnings per share have grown by an average of 12.2% a year, compared with 6% a year for the broader index.

What's that meant for valuations? Constellation Brands has traded for an average of 17 times earnings since 1987 -- below the 24 times earnings for the broader S&P 500.

Through it all, shares have been strong performers over the last quarter-century.

Of course, the important question is whether that will continue. That's where you come in. Our CAPS community currently ranks Constellation Brands with a three-star rating (out of five). Care to disagree? Leave your thoughts in the comment section below, or add Constellation Brands to My Watchlist.�

Dear Legacy Airlines: We Still Hate You

You don't need our Motley Fool CAPS database to know that investors loathe airlines about as much as some customers do. But if you did check in at CAPS, you'd find Fools rate the entire sector just two of five stars. Only one, Germany's Lufthansa, rates four stars.

American carriers rate poorly on the whole, not just among Fools. Of the major carriers only Southwest Airlines (NYSE: LUV  ) rated "good" in terms of total experience, according to a survey of 10,000 U.S. consumers conducted by the Temkin Group:

Carrier	Poor	OK	Good
Southwest Airlines	�	�	X
AirTran Airways	�	X	�
JetBlue Airlines	�	X	�
Alaska Airlines	�	X	�
Delta Air Lines	X	�	�
Continental Airlines	X	�	�
United Airlines	X	�	�
American Airlines	X	�	�
US Airways	X	�	�

Source: Temkin Group.

This isn't very surprising, given history. Last year, an anonymous Southwest pilot held his plane at the gate so a late passenger could fly to see his dying grandson. Management applauded the generous and no doubt costly decision as reflective of Southwest's commitment to great service.

On the other end of the spectrum, bankrupt AMR, parent of American Airlines and its smaller partner, American Eagle, disappointed many during the recently completed holiday travel season as the carrier ranked last in handling baggage during 2011. But does a reputation for delivering a below-average experience equate to poor financial performance? Usually yes, but not always:

Carrier	Revenue Growth (over prior year)	Gross Margin	Return on Capital
Southwest Airlines	29.4%	21.8%	5.1%
JetBlue Airlines	19.2%	28.6%	4.3%
Alaska Airlines	12.7%	27.2%	12.6%
Delta Air Lines	10.6%	20.1%	9.7%
United Continental	58.6%	26.7%	9.2%
AMR Corp.	8.2%	19.7%	(3.3%)
US Airways	9.6%	18.2%	6.1%

Source: S&P Capital IQ.

While Southwest has the second greatest growth, its "bags fly free" policy may be cutting into gross margin while returns on capital have declined as fuel prices continue to soar. JetBlue suffers from a similar affliction but also enjoys substantially better gross margins.

The legacy carriers are more of a mystery. US Airways (NYSE: LCC  ) suffers from the lowest rankings among the majors, yet thin margins and comparatively anemic revenue growth haven't hurt the carrier's ability to produce an above-average return on capital.

United Continental (NYSE: UAL  ) is equally confusing. Low ratings mattered little last year as the combined carrier produced industry-best revenue growth and top-tier gross and returns on capital.

Of them all, only Alaska Airlines (NYSE: ALK  ) has proven to be an outperformer for investors over the past year -- a carrier customers characterize as just "OK." The message? Investors can't rely on service metrics as indicators of market outperformance or underperformance.

Obviously, there are better industries for investing your hard-earned savings. Which one to choose? How about companies that are going global? The Motley Fool recently introduced a special report titled "3 American Companies Set to Dominate the World." Find out who they and what our analysts expect when you download your copy. Be sure to do it soon -- this research is free, but only for a limited time.

The Stocks Wall Street Loves

Despite all of Wall Street's conflict and contention, a fortunate few companies enjoy unanimous support among professional analysts. If the market's movers and shakers all believe these companies will beat the long-term averages, well, surely they will -- right?

Not so fast! With help from the 180,000 members of�Motley Fool CAPS, we'll see whether these highflying favorites deserve analysts' unwavering support.

Stock	CAPS Rating (out of 5)	CAPS Bullish Sentiment	No. Wall Street Analysts	52-Week Price Change
EV Energy Partners (Nasdaq: EVEP  )	****	96%	7	101%
Hi Tech Pharmacal (Nasdaq: HITK  )	*****	94%	4	64%
Polymet Mining (NYSE: PLM  )	***	94%	1	(39%)

Source: Motley Fool CAPS.

As you can see, there's a wide range of results, so just because Wall Street loves ' em doesn't mean you have to. Use the list as a jumping-off place for your own research.

Everything old is new again
With drilling technologies becoming more efficient and productive, new areas of exploration continue to open up to exploration and production outfits like EV Energy Partners. Where once the Fayetteville or Marcellus remained in the public consciousness for an extended period of time, now we're hearing about the latest, greatest opportunities sooner and faster. Eagle Ford, Niobrara, and now the Utica shale are gaining prominence.

It's not so much that these are new names, per se, but with technology improving, more companies can pile into them in a hurry.

The Utica shale formation in eastern Ohio is quickly attracting a lot of attention, and looks like it will be the next big drilling hotspot. ExxonMobil is buying drilling rights in the region, while Magnum Hunter Resources (NYSE: MHR  ) has potentially rich assets there. So promising is it that it could be a boon for those looking to raise cash, like Chesapeake Energy (NYSE: CHK  ) . EV Energy Partners also has a deep portfolio here, controlling some 780,000 acres in the region, and it says it will be looking to sell some of its assets there.

The wildcard here, and most everywhere else these days, is the contentious fracking debate and whether it poses an environmental hazard. Although there's no evidence that it poses a risk to groundwater supplies, that hasn't stopped the critics from raising the issue and generating doubt.

The large land holdings EV has probably helps explain why 98% of the CAPS All-Stars rating the E&P believe it will outperform the broad market averages. Let us know in the comments section below or on the EV Energy Partners CAPS page whether you think this will be the next new thing. Follow along with its progress by adding the stock to your watchlist, too.

Feeding a fever
The FDA isn't about to let a 50-year history of effectiveness stand in its way of controlling the drug market. Because cold medicine Lodrane hadn't been put through the modern-day wringer of FDA approval, it became one of more than 500 cold medicines the regulatory agency yanked from pharmacy shelves despite no significant health or safety issues reported over their lifetime.

Lodrane was made by Hi-Tech Pharmacal, just one of the generic-drug companies affected by the order. It was marketed by its branded-label subsidiary ECR Pharmaceuticals, which represents approximately 11% of the company's total revenues, so the overall impact wasn't too crushing. Last quarter, total sales jumped 43%, driven in large part by its Flonase nasal spray, but even ECR's revenues were 6% higher as it added products from recent acquisitions. The loss of Lodrane shouldn't be a problem going forward.

Analysts like Hi-Tech better than some other generic-drug makers, such as Par Pharmaceuticals, and at just 8 times forward earnings, it's cheaper than some others such as Watson Pharmaceuticals, though Par and Mylan (NYSE: MYL  ) go for less.

CAPS member�luremaster likes that it's not only discounted right now, but has also been outperforming expectations. It's beaten analysts' earnings estimates for five straight quarters. Add the generic-drug maker to your watchlist to keep tabs on whether it will get the results it needs to seek out continued profit excellence.

Hold off on the champagne
Time is money, and regulatory agencies are notorious for wasting time and, thus, company money. Polymet Mining, which literally sits on a gold mine of opportunity at its NorthMet project in Hoyt Lakes, Minn., is suffering the consequences of government foot-dragging on its supplemental draft environmental impact statement (EIS), which is now expected to be completed in January. The NorthMet mine is one of the world's largest undeveloped deposits of copper, nickel, and other non-ferrous metals.

The copper deposits alone are worth the effort. Copper mines owned by�Freeport-McMoRan (NYSE: FCX  ) ,�BHP Billiton, and�Rio Tinto are all facing double-digit drops in production this year. But with much of the easy-access copper already mined, prices are likely going to rise higher, even though economic concerns currently weigh on it. The permitting delays could end up working to Polymet's benefit.

With commodities giant Glencore continuously raising its stake in Polymet (it can go as high as 24%), CAPS member Rascheez has an idea of what might happen down the road: "Polyment working in conjunction with Duluth Metals will be a cash juggernaut. Chances are of course that Glencore will acquire the mine (it already owns 20% [because of] all the financing tranches Polymet has needed to get through the EIS process)."

Mine the other opinions on the Polymet Mining CAPS page, and add its stock to the Fool's free portfolio tracker for complete coverage of its developments.

Agree to disagree
It pays to start your own research on these stocks on Motley Fool CAPS. Read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made, all from a stock's CAPS page.

Sign up today for the completely free service, and tell us whether these stocks deserve to have Wall Street marching lockstep.

One of the Best Dividend Payers Ever Just Got Better

Longtime readers of my Dividend Opportunities newsletter know I'm a big fan of master limited partnerships (MLPs). There's not much to dislike.

The partnerships don't have to pay corporate income taxes as long as they earn 90% of income from operations relating to natural resources or commodities -- and they must pass on the bulk of that income along to investors.

The result is high yields, usually approaching double-digits. Moreover, most MLPs operate in energy infrastructure like pipelines and processing facilities. These partnerships usually earn a fee for processing or delivering products like oil, ammonia, or natural gas. They are essentially toll collectors on the energy highway, a consistent business model that leads to steady and generous distributions.

MLPs are also famous increasing their distributions to partners. For example, well-known MLP Kinder Morgan (NYSE: KMP) paid quarterly distributions of $0.475 per unit in 2001. That amount has since climbed all the way to $1.05 per unit today.

But I'm seeing a monumental shift in the MLP space, and I think it could lead to even sweeter payments for income investors.

A High-Yield Shift in Corporate Structure
You see, behind every good master limited partnership is a general partner (GP). General partners manage the day-to-day business of master limited partnerships. The MLPs are like silent partners. They receive cash flow from the pipeline assets, but aren't involved in running the business.

  That's the job of the general partner (which usually also trades on a major exchange). The general partner, for instance, identifies potential acquisitions, arranges financing, oversees operations, and even sets dividend policy.

In return, GPs are amply rewarded for their efforts. They typically own a 2% equity stake in the MLP, but that's not all. They receive a special management fee in the form of incentive distribution rights (IDR). These additional distributions are paid out according to a pre-set formula that's given in the prospectus when the MLP is formed.

Typically, the GP receives an initial 2% of the MLP's distributable cash flow to reflect its 2% equity interest, while MLP unitholders get the remaining 98%. As the limited partner's distributions increase, however, the percentage take of the GP also increases, often to a maximum of 50%.

You can take a look at my table to see how it works: Say the latest quarterly distribution for an MLP totaled $1.00 per unit. Of that, GP investors in my example receive 2% of the first $0.29, 15% of the next $0.04, 25% of the next $0.06, and 50% of everything above $0.39.

Example Distribution Rights
Quarterly Distribution	MLP	GP
Up to $0.29	98%	2%
From $0.29 to $0.33	85%	15%
From $0.33 to $0.39	75%	25%
Above $0.39	50%	50%

In other words, as the distribution grows for the MLP, the general partner receives a larger piece of the distribution pie. Many GPs have grown to claim an enormous stake on payments, sometimes a third or more of a limited partner's total distributions paid.

But quietly, a few MLPs are making a ground-breaking move. They've opted to merge the general partner and the limited partner.

For example, MarkWest Energy Partners (NYSE: MWE) and its general partner merged operations last year, which eliminates the need for incentive distribution rights. Eliminating this drag on distributions has created a new form of MLP that should pay larger distributions in the long run.

In fact, MarkWest's distributions increased +16% in the year following the merger, despite the the partnership issuing new units to acquire the outstanding shares of the general partner (as is usually the case).

Eliminating the distribution rights and simplifying the partnership structure also reduces the cost of capital needed for expansion. Since MLPs must pay the lion's share of their income to partners, they're reliant on the capital markets to grow the business.

Lowered costs allow MLPs to be more competitive in future acquisitions and expansion projects. The result should be an increased growth rate for the partnership, paving the way for further distribution hikes.

Top Stocks For 2011-12-16-11

DrStockPick.com Stock Report!

Wednesday July 29, 2009

AECOM Technology Corporation (NYSE: ACM), a leading provider of professional technical and management support services for government and commercial clients around the world, announced today that Michael S. Burke, AECOM executive vice president and chief financial officer, will participate in the UBS Engineering & Construction One-on-One Conference in Chicago on Thursday, August 13, at 8 a.m. Central Time.

Covidien (NYSE: COV), a leading global provider of healthcare products, today announced the Company has reached a definitive agreement to acquire Power Medical Interventions, Inc. (OTCBB: PMII), a provider of computer-assisted, power-actuated surgical cutting and stapling products.

GWS Technologies, Inc. (OTCBB: GWSC), an alternative energy company developing renewable energy solutions, announced today that it has partnered with Dominion Real Estate Investments LLC, (DREI) to begin development of a 118 acre solar farm in Lubbock Texas.

Lazard Ltd (NYSE:LAZ) today announced financial results for the second quarter and first half ended June 30, 2009. Net income(c) on a fully exchanged basis was $43.1 million, or $0.34 per share (diluted), for the second quarter of 2009, compared to $64.6 million, or $0.54 per share (diluted), for the second quarter of 2008, and compared to a net loss of $(29.7) million, or $(0.26) per share (diluted), for the first quarter of 2009. Net income on a fully exchanged basis was $13.5 million, or $0.11 per share (diluted), for the first half of 2009, excluding a $62.6 million pre-tax charge during the first quarter of 2009, compared to $80.5 million, or $0.71 per share (diluted) for the first half of 2008.

Moody’s Corporation (NYSE: MCO) today announced results for the second quarter of 2009. Moody’s reported revenue of $450.7 million for the three months ended June 30, 2009, a decrease of 8% from $487.6 million for the second quarter of 2008. Operating income for the quarter was $187.2 million, a 20% decline from $233.7 million for the same period last year. Diluted earnings per share of $0.46 for the second quarter of 2009 included a benefit of $0.03 associated with certain legacy tax matters and costs for previously announced restructuring activities. Excluding these items from both periods, diluted earnings per share of $0.43 for the quarter declined 16% from $0.51 in the prior-year period.

Invitel Holdings A/S (NYSE AMEX: IHO) announced today that over 69% of its outstanding shares were represented by proxy or in person at its July 28, 2009 shareholders meeting. Each of the director nominees were elected with over 99% of the votes cast. The Invitel Holdings directors for the 2009 to 2010 board term are Ole Steen Andersen, Robert R. Dogonowski, Peter Feiner, Morten Bull Nielsen, Jens Due Olsen, Carsten Dyrup Revsbech, and Henrik Scheinemann.

Source: E-Gate System from Alphatrade.com

A Scarcity Of Alpha

A couple days ago I talked to two fund managers who earned net returns to investors of over 200% in 2011. In each of the previous two years, they returned over 80%. Most of this outperformance came from shorting US-listed companies based in China. The managers write in their letters that future returns are very likely to decline, since Chinese frauds are more scarce now. They also mention that their portfolio (besides the Chinese fraud shorts) has tracked the market. Not only are these guys smart, they are honest, too.

Another great thematic trade was to go long Apple and short a basket of its competitors (MSFT, NOK, RIMM, MMI, GOOG, HPQ, DELL). I think that this trade has largely played out, too, and future returns won’t be as good.

So how are we supposed to add alpha now? If I can’t add alpha, I don’t want people’s money to manage. That’s just going to piss my investors off and it’s going to make me look bad. What can we do?

Now I can’t even sell decent premiums because volatility has dropped, I honestly don’t think I have any tricks. The money management business is in such a weird state right now. Asset price correlations are really high. Prominent value investors have fallen into disrepute, with some losing over 20% last year. The best performers were flat. Greenlight lost money in the beginning of the year because they shorted, then made it all back because they shorted. Third Point made some good returns in the beginning of the year because they didn’t short much, then they lost it all as the market dropped. Then the market rallied 11% in October and Third Point was flat.

All I can think of is buying assets that aren’t stocks. Given a really flexible mandate, hedge funds might buy farmland. Mike Burry has this trade on. What other assets are mispriced because capital is not ALLOWED to flow into them? I think that’s an important question for money managers.

IntoNow Apps Bring Yahoo’s Television Ambitions Into Focus

How people watch television is changing, but it’s more than just a shift from cable to streaming services. People literally are doing more while they watch. A recent Nielsen study found that 70% of tablet owners and 68% of smartphone users use their devices while watching television. Why aren’t more companies looking to capitalize on the new second-screen experience? Many aren’t. But Yahoo (NASDAQ:YHOO) is, and its recent acquisition IntoNow is giving Yahoo a leg up in what could be a lucrative new stream of advertising revenue.

Here’s Yahoo’s plan for making money on second-screen viewing: The new IntoNow app for Apple‘s (NASDAQ:AAPL) iPad listens to what you’re watching on TV and automatically loads relevant content on the tablet. If you’re watching Monday Night Football, IntoNow brings up player stats and commentary. If you’re watching the news, IntoNow trawls Yahoo’s news database and other sources on the net to bring up other stories related to the current subject.

Providing parallel content to the audience is an effective sales tool — just look at Amazon‘s (NASDAQ:AMZN) success with its “Recommendations” back in the ’90s — and it’s common in television. Netflix (NASDAQ:NFLX) and many other services track users’ viewing habits and make automatic content suggestions based on that information.

IntoNow is something else entirely, though, creating a whole second stream of content for the audience that lures them in using the same principle as “recommendations.” The audience, then, can see multiple advertisements simultaneously. IntoNow is a dream product for a company whose $1.62 billion display advertising business is outpaced by Facebook.

The IntoNow app is an exciting product for Yahoo. It is arguably the first unique product the company has offered in a decade, and if it’s successful, that innovation could restore investor confidence in the company and give Yahoo new, much-needed direction. IntoNow already has strong partners looking to make unique content for the service. Pepsi (NYSE:PEP) built a campaign for the IntoNow iPhone app — a social networking app that lets users “check in” online to tell friends what they’re watching — in April, giving away a coupon when the app recognized the audio from a televised Pepsi commercial.

The app also fits into Yahoo’s larger push in television. Despite a rocky year, Yahoo scored key partnerships for its Yahoo TV Internet television service, namely Disney (NYSE:DIS). The Yahoo TV software also comes prepackaged in televisions made by Sony (NYSE:SNE), Vizio and Samsung (PINK:SSNLF). If the IntoNow iPad app gets unique content when paired with Yahoo TV-equipped televisions, Yahoo will find itself in an enviable position in the budding Internet television market, in addition to cornering the still-new second-screen market.

Of course, the risk for Yahoo is that the IntoNow app is an excellent idea that is easily imitated and thus will be quickly devalued. Apple is said to be preparing its own line of HD televisions for release in the next year, and given that company’s new emphasis on audio recognition technology and the popularity of its tablet and smartphone, its hard to imagine it won’t provide an alternative. The same can be said of Google (NASDAQ:GOOG) and Microsoft (NASDAQ:MSFT), whose Google TV and Xbox TV projects also are likely to interact with their respective mobile platforms, Android and Windows Phone 7.

But just because these other companies can adopt similar technology as IntoNow doesn’t necessarily mean that they will. Time will tell. But for now, Yahoo seems somewhat revitalized thanks to the forward-thinking IntoNow. Now, Yahoo has to figure out how to keep it unique and at its most profitable before its competitors catch up.

As of this writing, Anthony John Agnello did not own a position in any of the stocks named here. Follow him on Twitter at�@ajohnagnello�and�become a fan of�InvestorPlace on Facebook.

5 Dividend-Growth Stocks to Help You Get Richer

I know of only one sure strategy for accumulating wealth over time, and that is to hold stocks with a consistent track record of dividend growth. The reason this strategy works is because dividend increases can be predicted in a way that share price gains cannot.

For example, I can come up with many reasons why Coco-Cola (NYSE: KO) or General Mills (NYSE: GIS) will increase earnings next year, but I can't guarantee that either company will post share-price gains. But by looking at the dividend history, payout ratio and earnings growth expectations for both companies, I can estimate next year's dividend increase with fairly good accuracy. A modest 6% dividend increase on a portfolio of stocks generating $10,000 in annual income would boost your income to $10,600 next year -- without requiring any additional investment. If you reinvest these (growing) dividends, then your returns and eventual dividends are amplified even more, thanks to the magic of compounding. And if dividends predictably rise year in and year out, then share-price gains should eventually follow.

 

There are at least 10 blue-chip names that not only have uninterrupted histories of paying dividends for 100 years or more, but have also increased dividend payments for at least 25 years in a row. This is a good place for investors to start. This list includes well-known companies such as Coca Cola, General Mills, Colgate Palmolive (NYSE: CL), PepsiCo (NYSE: PEP) and the following five higher-yielding blue-chip stocks.

1. Procter & Gamble Co. (NYSE: PG)
Yield: 3.2%
Procter & Gamble is a leading consumer goods manufacturer in more than 180 countries. The company owns 24 brands-- from Eukanuba pet foods, to Gillette shaving products and Tide detergents -- each generating more than $1 billion in annual sales. Procter & Gamble has also been good to shareholders. The company has paid annual dividends since 1890, and has raised its dividend in each of the past 55 years.

In the past five years, Proctor & Gamble has grown dividends 11% a year. Analysts predict the company's annual earnings growth will double from a 4% in the past five years to nearly 9% in the next five years. This should set the stage for a continuation of double-digit yearly dividend gains.   

2. Johnson & Johnson (NYSE: JNJ)
Yield: 3.5%
Johnson & Johnson owns a diverse portfolio of pharmaceutical and consumer products, including top-selling over-the-counter medicines such as Tylenol, Motrin and Sudafed. Although highly-publicized recalls of Tylenol in the past two years have damaged the company's reputation and dampened the stock price, Johnson & Johnson has delivered 27 consecutive years of earnings growth and 49 straight years of dividend increases.

Johnson & Johnson has generated 11% annual growth in dividends and 7% growth in earnings in the past five years. It's also enhancing its future prospects by teaming up with Bristol Myer Squibb (NYSE: BMY) to enter the $10 billion market for Hepatitis-C drugs. Added to this superb track record, Johnson & Johnson boasts a stellar "AAA" credit rating and a stockpile of $31 billion in cash that can be returned to shareholders through dividends. 

3. Consolidated Edison Inc. (NYSE: ED)
Yield: 3.9%
Also known as Con-Ed or Steady Eddie, this utility delivers electricity and/or natural gas to more than 4 million customers in New York City and surrounding areas. 
As the nickname implies, Consolidated Edison's growth has been predictable, if unspectacular. In the past five years, the company's earnings have improved 3% annually, but dividends have grown at less than 1% a year. Recent dividend increases have mostly consisted of half-penny raises.

As is typical for utilities, Consolidated Edison's payout is fairly high at 64% of earnings. Still, analysts look for earnings growth to improve to 4% a year because of rate hikes and improving energy demand. Improved earnings growth makes it likely that Consolidated Edison will extend its record of 37 consecutive years of dividend growth.  

4. Clorox Co. (NYSE: CLX)
Yield: 3.6%
Clorox is a global consumer-goods company with many brands that have become must-have household names. Nearly 90% of the company's portfolio consists of brands holding the No.1 or No.2 market share. In addition to Clorox bleach and cleaning products, the company owns Pine-Sol cleaner, Kingsford charcoal, Hidden Valley salad dressings and K C Masterpiece dressings and sauces, Brita water filters and Glad storage containers. Clorox sells its products in more than 100 countries.
In the past five years, Clorox's dividend has risen 14% a year, but earnings growth has been erratic. Despite this, the company's strong cash flow has consistently provided at least two-fold coverage of dividend payments, which gives a comfortable cushion for future dividend growth, which has already increased for 34 years in a row. 

5. UGI Corp. (NYSE: UGI)
Yield: 3.6%
UGI distributes and markets propane, natural gas and electricity. Through subsidiaries, UGI operates natural gas and electric utilities in Pennsylvania, distributes propane domestically and internationally, and engages in energy marketing in the Mid-Atlantic region. The company also owns a 44% stake in AmeriGas Partners L.P. (NYSE: APU), the nation's largest retail propane distributor.

UGI has paid dividends for 127 consecutive years and raised its dividend in each of the past 25 years. Dividend growth averaging 8% a year in the past five years has outpaced yearly earnings growth of 5%. With dividend payout at less than 48% of earnings, UGI has ample capacity to raise the dividend. 

Risks to consider: As a group, these stocks are remarkable for very low betas, which measures price volatility relative to the overall market. The market beta is one. These stocks have an average beta of 0.40, which means their share price swings are less than half the price swings of the market.

Australia’s central bank holds rates steady

Reuters The Reserve Bank of Australia building in central Sydney.

SYDNEY(MarketWatch) � The Reserve Bank of Australia left its policy cash rate unchanged Tuesday, in line with expectations, but adopted a more dovish tone that could see a cut delivered next month.

The Reserve Bank left the official cash rate unchanged at 4.25% for the third consecutive month.

The Australian dollar AUDUSD �rose briefly rose after the decision to $1.047, but soon pulled back to trade at $1.0399, compared to $1.0435 prior to the statement.

�The board judged the pace of output growth to be somewhat lower than earlier estimated but also thought it prudent to see forthcoming key data on prices to reassess its outlook for inflation before considering a further step to ease monetary policy,� RBA Gov. Glenn Stevens said in a statement accompanying the decision.

�Recent information is consistent with the expectation that the world economy will grow at a below-trend pace this year but does not suggest that a deep downturn is occurring,� Stevens said.

But the central bank chief also left the door open for a rate cut, saying that, �were demand conditions to weaken materially, the inflation outlook would provide scope for easier monetary policy.�

Click to Play Bond King's trade pays off

Pimco's Bill Gross wins with a bet on mortagage debt and rebounds from a rough 2011. Photo: Reuters/Robert Galbraith.

UBS senior economist George Tharenou said the statement was more dovish than seen in recent months, �with a shift that means the RBA will �consider� a May rate cut if the inflation data [due April 24] is low enough.�

�This contrasts with previous comments, which suggested that both a trend of rising unemployment and a low-enough inflation print were required,� Tharenou said.

According to Credit Suisse calculations, market pricing ahead of the RBA announcement suggested 74 basis points� worth of rate cuts by March 2013, while a Bloomberg survey of economists tipped a cut sometime in the second quarter.

The RBA cut its key rate twice in quick succession at the end of last year in order to combat concerns about the potential fallout from Europe�s debt troubles to global growth, but has been on hold since then.

New York Times Co. Stock May Be in Big Trouble

by David Sterman

In a bid to stay relevant (and stay afloat), major free news publications are starting to tighten the noose, putting their content behind a paid firewall. It worked for News Corp's (NYSE: NWS) Wall Street Journal, because that publication can be considered as a necessary asset for the business community, and thus can easily be expensed by many readers. The rest of the pack may not be so lucky, as we'll soon find out with The New York Times Co. (NYSE: NYT).

Rumors circulate that the "Old Gray Lady" will soon announce a $20 per month subscription plan for regular visitors to nytimes.com that also want to be able to read the paper on the Kindle and the iPad. (All signs point to a March launch). Standalone web-only access through a browser is rumored to be priced at $10. That's $120 a year. The price may be appealing to die-hard readers like myself, but surely unappealing to many that appreciate the Times' impressive website, but would likely balk at such a cost.

This leads to my major concern about The New York Times -- and its stock. Shares have rallied in recent months, though this recent move may eventually lead to a full reversal of the stock price.

What could happen...
The lessons from other pay wall-protected websites are instructive. There are currently roughly 6 million active readers on the Times' website. The Times assumes that this whole group of active users will pay-up to get continued access. That seems remarkably ambitious. The real figure may be closer to two million. Even at that level, this would be an overwhelming success for any paper not called The Wall Street Journal: A number of sites such as the Times of London have put up a firewall and ended up with a paying base in the tens thousands, not in the millions.

You can argue that the Times had no choice: free access to its website has been steadily cannibalizing print subscriptions, imperiling both advertising and circulation revenue (though the online ad revenue gained from online users is simply insufficient to offset print subscriber losses). At this point, it's unclear that the move will pay off, and it comes with considerable risks.

For starters, a good portion of the current online user base will defect to free sites such as Google (GOOG), which already does a fine job of aggregating global news. So you'll need to lower any future online advertising assumptions. Second, as print users look to switch to the online version, print circulation could drop at an ever faster pace. And print ads are still the key source of ad revenue for the Times. In addition, there are tremendous fixed costs associated with printing, so circulation drops won't generate commensurate levels of savings.

Shareholders: be worried
For investors, it's time to do the math on how the new pay wall will impact revenue and costs. Here's what we know...

Let's assume the Times comes up with three million users willing to pay $150 a year (most will opt for the $10 monthly plan, a few for the more pricey plan for an average monthly take of about $12.50). That's $450 million in new revenue. To get to that three million figure, though, we can assume that a fair number of readers that read both the print and online versions give up print for the increasing convenience of the online format. The Times currently has 800,000 paying print subscribers, and up to 35% of them may defect to the online version. That's 35% fewer subscribers that the paper can guarantee its advertisers.

For the first nine months of 2010, an 18% jump in digital advertising failed to offset an 8% drop in print ad revenue. That 8% drop in print ad revenue came on a 5% drop in circulation revenue. (These figures are companywide and include titles such as the Boston Globe). Online ads still account for just one-quarter of revenue. Yet as noted, the online ad momentum could be blunted by a drop in traffic as casual readers stop visiting the site (one they've exceeded a monthly quota of free stories).

Unless the Times is able to put through price increases for the print edition, circulation revenue (and the ad revenue that goes along with it) is likely to keep dropping at a 5% to 10% annual clip as the paid website cannibalizes the printed paper.

What it means
What does a 35% drop in print-based revenue imply? Well, the company currently generates about $1.85 billion for the print properties, about $1.5 billion of which likely comes from the flagship paper. So a 35% hit to that base likely means around $525 million in foregone revenue.

As noted earlier, the paper's web site may garner a net new three million subscribers (which is again quite generous considering that it would dwarf the print version's circulation). So the site would add $450 million. With a potential loss of $525 million in revenue from the print side, the Times stands to lose $75 million in revenue from the effort, somewhat offset by decreased costs for newsprint and delivery logistics.

So this move is a money loser even if the newspaper industry is stable. But the Times and their peers have been steadily losing readership -- a trend attributed to the economic downturn, but it also has everything to do with people spending more time with DVRs, Netflix (Nasdaq: NFLX), Facebook and the like. So the Times' efforts to migrate its base to the web, necessary as it may be, are likely to add fuel to the fire of the negative secular print circulation declines.

How will this experiment turn out? You can expect the Times to discuss the myriad potential positives on its upcoming February 3 conference call, but we won't get a real read on trends until later this year.

I envision three potential scenarios...

First, the Times comes nowhere close to three million paying subscribers, and shares take a deep hit as the company is boxed into a knot that it can't undo. (Taking down the pay wall -- once again -- would likely be permanent this time).

Second, the website hits that target, but print circulation and ad revenue starts posting 10% annual declines, offsetting any gains from the web initiative. Make no mistake, online ad rates are so comparatively small to print ad rates that if the web site truly becomes the dominant platform, it would be a Pyrrhic victory and the Times would move back into the red.

The third scenario entails success on both fronts. The printed paper suffers only a glancing blow and the Times' website becomes the first of its kind (outside of the WSJ) capable of getting people to pay $150 a year in very high numbers.

Shares of The New York Times Co. appear much more vulnerable to the sobering reality that "content wants to be free." The likelihood that the company can pull off a flawless transition appears remote, but necessary -- and also highly risky. If you own the stock, you should rethink your position in this light, and short-sellers may find the shares ripe for a fall.

Original Post

Disclosure: Neither David Sterman nor StreetAuthority, LLC hold positions in any securities mentioned in this article.

Wal-Mart Sales Gains May Mask Problems : Deutsche Bank

Deutsche Bank analyst Charles Grom released a note today calling into question the sustainability of recent same-store sales gains by Wal-Mart (WMT).

“Wal-Mart�s U.S. comp of 1.3% in 3Q11 was respectable, but we believe higher food inflation and increased SKU count across the store drove the entire comp, masking traffic softness,” Grom writes.

Grom also took a look at Wal-Mart’s recent advertising, and noticed a troubling trend indicating the chain has gotten even more promotional in its strategy: “Figures shows that the number of inserts (per market) during October rose from 1.2x to 2.0x on a weekly basis while page count increased to 16 per insert compared to 12 a year ago.”

While same-store sales increase should continue through the fourth quarter, this could spell trouble for margins going forward. “The bigger question on our minds is what will be the impact to both inventory turns and gross profit margins from these initiatives going forward as we observed in the company�s 3Q results.”

Weekly Holiday Sales Hit $44 Billion

Late holiday shoppers�in the week leading up to Christmas and on the day after�provided the boost to lift 2011 holiday sales past the last year�s total, according to data released Wednesday.

Consumers spent approximately $44 billion in GAFO retail sales for the week ending Dec. 24�a 37.8 percent increase over the previous week and a 14.8 percent gain year-over-year, according to ShopperTrak, which provides traffic counting services at retail stores and malls. Foot traffic was also high, increasing 32.4 percent from the prior week.

GAFO is derived from the U.S. Commerce Department and stands for general merchandise, apparel, furniture, sporting goods, electronics, hobby, books and other related store sales.

Last week�s sales increase ensured this December will outpace December 2010. Month-to-date figures are up 4.7 percent over December 2010, the Chicago-based firm said.

�With good weather in most of the country and the season coming to a close, procrastinators and bargain hunters hit the stores and gave retailers the sales lift they needed to outpace last year,� said ShopperTrak founder Bill Martin

According to ShopperTrak, a late holiday shopping surge is not uncommon. Last year, the 10 days before Christmas accounted for 24.4 percent of total GAFO retail sales in the entire holiday shopping season of November and December.

As expected, shoppers came out in full force on the day after Christmas because it fell on a Monday for the first time in six years, ShopperTrak said. The day ranked fourth in foot-traffic and sales for the entire holiday season, behind Black Friday November 26, Friday December 23 and Super Saturday December 17. Foot traffic increased 25.9 percent over the same day last year and consumers spent $7.1 billion on Dec. 26 in GAFO retail sales, an increase of 25.5 percent percent over the same day in the prior year.

�Dec. 26 was likely the last door-buster day of the season as shoppers returned unwanted gift items and shopped for marked-down merchandise,� said Martin. �ShopperTrak expects a drop in sales this week as the season ends. Retailers must continue to monitor same-store traffic to capitalize on the final week of the holiday season.�

ShopperTrak analyzed foot-traffic from more than 25,000 locations in the United States to create this National Retail Sales Estimate of GAFO�a nationwide benchmark of GAFO retail sales.

Follow me on my Jewelry News Network blog, on my Jewelry News Network facebook page and on Twitter @JewelryNewsNet.

FCX Added as Top 5 Metals Channel Dividend Stock With 2.48% Yield

Freeport-McMoran Copper & Gold (NYSE: FCX) has been named as a Top 5 dividend paying metals and mining stock, according to Dividend Channel, which published its weekly �DividendRank� report. The report noted that among metals and mining companies, FCX shares displayed both attractive valuation metrics and strong profitability metrics. The report also cited the strong quarterly dividend history at Freeport-McMoran Copper & Gold, and favorable long-term multi-year growth rates in key fundamental data points.

Click here to find out The Top 5 DividendRank�ed Metals Stocks »

The report stated, �Dividend investors approaching investing from a value standpoint are generally most interested in researching the strongest most profitable companies, that also happen to be trading at an attractive valuation. That�s what we aim to find using our proprietary DividendRank formula, which ranks the coverage universe based upon our various criteria for both profitability and valuation, to generate a list of the top most �interesting� stocks, meant for investors as a source of ideas that merit further research.�

Special Offer: Find out what Dave Moenning is holding in the ETF Channel Flexible Growth Investment Portfolio with a special 20% off coupon from Forbes and 30 Days Free.

The annualized dividend paid by Freeport-McMoran Copper & Gold is $1.00/share, currently paid in quarterly installments, and its most recent dividend ex-date was on 10/12/2011. Below is a long-term dividend history chart for FCX, which Dividend Channel stressed as being of key importance. Indeed, studying a company�s past dividend history can be of good help in judging whether the most recent dividend is likely to continue.

Coach Fliers Starting to Balk at Higher Airfares

Air travel continued its modest post-recession rise in February, albeit at a slightly slower rate compared with the month before, the International Air Transport Association announced in its monthly report on Tuesday.

The good news for the airline industry: business and first-class passengers are continuing to take to the air.� The bad news: economy passengers are starting to push back against higher fares and fees.�

The year-over-year volume growth of premium passengers was 7.7% in February, down slightly from January�s 8.1% growth rate, but an increase nonetheless. Because the premium travel market is less sensitive to price, the gradually strengthening economy still was pushing volumes upward.

By comparison, the growth rate for price-sensitive economy-class travelers slipped from 4.9% in January to 3.3% in February.

Airlines are never happy to lose customers.� But if they had to choose, higher-paying, premium passengers (a segment largely comprised of business travelers) are more valuable. That�s not because airlines view economy passengers as the modern-day equivalent of Leonardo DiCaprio exiled to steerage on the Titanic.

It�s because those business travelers account for half of all airline revenue — even though they make up only 20% of all passengers.���

Even more good news for airlines: a report released by the Global Business Travel Association last week says 2011 travel spending is now expected to be even stronger than estimated� — growing by 6.9% for the year, up from the 5% growth the group forecast earlier.

But the airline industry still faces headwinds from rising fuel prices, the March dip in business confidence and lost revenue from profitable Asia routes in the wake of the Japan disaster.� Airlines are coping with these challenges in two ways: capacity cuts and premium perks.

Delta Air Lines (NYSE:DAL) and US Airways (NYSE:LLC) are cutting capacity by 2%; United Continental (NYSE:UAL) is trimming its year-over-year capacity by 1% for its summer flights and as much as 4% this fall.� AMR Corp.’s (NYSE:AMR) American Airlines is cutting capacity by about 1%.� The airlines could further reduce the number of seats if there is no relief from fuel prices.� It is nearly certain that the cheapest seats will be the first to hit the cutting room floor.

Premium perks are another way to boost revenue.� For its international routes, Delta is investing in a fourth class between economy and business class � “economy comfort.” US Air is adding a First Class section to its small commuter jets.� The airline also is upgrading food and beverage selections for all premium class passengers � and even adding filet mignon to the menu for business-class travelers on routes to Europe, the Middle East and South America.� United Continental already has retrofitted first and some business-class sections of 116 aircraft with flatbed seats.

As of this writing, Susan J. Aluise did not hold a position in any of the stocks named here.

Why Shares of Bridgepoint Education Dropped

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: Investors were giving F's to Bridgepoint Education (NYSE: BPI  ) on Tuesday as shares in the for-profit college fell as much as 14% after the Department of Justice announced an investigation into the educator's compensation for its admissions staff.

So what: This isn't the first red flag for Bridgepoint. In July, the Western Association of Schools and Colleges said the for-profit school spends more on recruiting students than actually teaching them, which resulted in the Association denying accreditation. Now, the DOJ's announcement comes on the heels of an audit by the Department of Education, and the company was forced to cut 450 jobs from its admissions department last month.

Now what: These sorts of allegations are far from unique in the for-profit education sector, as many of Bridgepoint's peers have also been accused of illegally compensating staff based on the number of students they enroll. I tend to avoid this sector for that reason, as well as its round-about, government-dependent business model. At a P/E of 3.8, this stock may look cheap, but beware of falling knives. Shares tumbled by more than 50% when accreditors began raising eyebrows in July, and clearly the collateral damage isn't done. Prospective investors would be wise to at least wait until the Justice Department completes its investigation before getting on board.

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Things Should Start Looking Up for Texas Instruments

Chipmaker Texas Instruments (Nasdaq: TXN  ) recently came out with a reduced second-quarter earnings forecast in its guidance call. But the outlook still indicates an improvement from the first quarter -- and the way I see things, Texas Instruments is well positioned to grow in the quarters to come.

The company had previously predicted profits amounting to $0.30 to $0.38 per share for the second quarter. In a recent guidance update call, the company narrowed down that range to $0.32 to $0.36, which amounts to somewhere between $3.28 billion and $3.42 billion. That's still a sequential revenue increase of 5% to 9.6%, and that's nothing to be disappointed about.

Here's what reinforces this projected growth. In the first quarter, Texas Instruments' order book rose 13%, resulting in a book-to-bill ratio of 1.04, in contrast to just 0.84 in the fourth quarter last year. The book-to-bill-ratio, a metric often used in the semiconductor industry, indicates demand trends. A ratio above 1 indicates that the company is receiving more orders than it's processing.

What's more, Texas Instruments' customer base is more diversified than before. In 2009, the company claimed that a single customer accounted for upwards of 20% of its total revenue. That scenario is quite different now, as its top six customers account for just 20% of total revenue. Spreading out the revenue sources should help ensure better stability going forward.

And finally, even though Texas Instruments' operating income has trended down since September 2010, mainly because of general weakness in the semiconductor industry, Gartner believes things should change by the second quarter of this year. According to the research firm, worldwide spending in the semiconductor industry will reach $316 billion this year, which translates into a 4% increase over 2011.

All this should bode well for Texas Instruments.

The Foolish bottom line
Texas Instruments should see growth in the months ahead, as the industry as a whole begins to pull back. Going by the Gartner forecasts, things should be taking off soon. I'll be keeping an eye on this company, and so should you, by adding it to your free Watchlist.

This company looks good to go for the long haul, but it's not the only name out there. Other companies are also capitalizing on what we've come to call "The Next Trillion-Dollar Revolution." Sound good? Then hurry and grab this free report before it's gone.

The year of Facebook

BERKELEY, Calif. (MarketWatch) � This Facebook Inc. IPO is going to be the worst. The year ahead will be miserable because of it.

First of all, we have to hear about the crop of instant millionaires and billionaires. When did becoming an instant billionaire become so commonplace?

A graffiti artist who was gifted some shares for scribbling something will be worth $200 million! How does that make you feel, loser?

Click to Play Social firms sharing ain't easy

The symbiotic relationship between Facebook and Zynga is creating riches for both companies, but their co-dependency also raises questions for both businesses, Shayndi Raice reports.

We�ll hear about how Chief Executive Mark Zuckerberg will only take a salary of $1 per year and live skimming off his pot of newfound wealth. This makes a mockery of everyone who actually works for a living, since he will pay zero taxes on the $1 salary.

Who started this idiotic insult anyway? Was it Bill Gates? Was it Steve Jobs? At least you�d think Zuckerberg could be somewhat creative and make it $2.99 or something.

Of course, everyone will want to somehow get in on this IPO. This means one thing and one thing only: Buying shares of Zynga Inc. ZNGA �I�m looking at this as some great short opportunities sometime next year. Zynga, I�m watching you.

There�s also a lot of chatter on Twitter, including some snide remarks directed at me @therealdvorak saying I told the world that because of the Sarbanes-Oxley Act there would be no more tech IPOs.

Let me reiterate my comments about this: Sarbanes-Oxley is preventing small companies from going forward with an IPO, not monsters like Facebook FB . That�s the problem.

So the Facebook IPO likely will be a huge success, and there is no reason not to think of it as the canary in the coal mine. As long as it holds up, things will be rosy.

I�m not quite in this camp. I think Facebook is subject to the exact same shift that took place after the dot-com crash of 2000: The ad business started rethinking its online strategies.

The company�s revenue for 2011 was $3.7 billion, mostly in online advertising. But every few years, something happens and the entire advertising universe decides that things need to change. Ads are pulled back.

This collapse of advertising revenues was obvious around 2001. Suddenly there was a new litany floating around that simply said �online advertising does not work.�

Click to Play H-P CEO earned $1 plus $16 million

H-P�s Meg Whitman may take only a $1 salary as chief executive, but her stock-based compensation totals more than $16 million last year, Arik Hesseldahl reports. (Photo: AP)

It does work, as we eventually learned, but for that moment it did not work. A lot of companies were hurt, and many which relied on advertising as their main source of income were ruined.

Luckily for Facebook, it is considering a premium version of the service and it manages to get a lot of royalty income from Zynga, which cajoles money out of its users the old-fashioned way through salesmanship.

My concern about the Year of Facebook is that it does represent a true bubble. If Zuckerberg and company can manage to keep the bubble from bursting, though, it may benefit the whole country. It will benefit the local economy, that�s for sure � and real estate in the San Francisco Bay Area is showing its old vigor.

At the end of the day, when evaluating the impact of Facebook, you have to ask yourself which of three things does it indicate: Is it just a one-shot event with no further impact on the tech sector or the overall economy?

Second, is it a harbinger of the future, the way the IPO from Netscape was in 1995? Netscape going public marked the beginning of a go-go era that lasted six years.

Third, is this IPO and the whole Facebook action in and of itself the bubble about to burst, putting us right in the middle of 2001 collapse? This would mean it was actually the Google IPO in 2004 that mirrored the earlier Netscape harbinger.

In other words, it could all be over. We�ll find out soon enough.

Best Stocks To Invest In 3/4/2012-3

 

- Enhanced Worldwide Coverage with an Additional Polar Launch of Two OG2 Satellites -

FORT LEE, N.J. & HAWTHORNE, Calif — 12/28/2011 (CRWENEWSWIRE) — ORBCOMM Inc. (Nasdaq:ORBC) and Space Exploration Technologies (SpaceX) today announced the launch schedule for ORBCOMM�s second generation (OG2) satellites. The updated plan includes launching the first OG2 prototype satellite on the first Cargo Re-supply Services (CRS) mission in mid-2012, followed closely by an additional launch of two OG2 satellites into a high inclination orbit as a secondary payload in late 2012. In early 2013, SpaceX plans to launch eight to twelve OG2 satellites, and the remainder of the constellation of 18 OG2 satellites is expected to be launched in 2014. All launches are expected to be on Falcon 9 rockets.

In transitioning the launch of the first OG2 prototype spacecraft to the first CRS mission in lieu of the upcoming Commercial Orbital Transportation Services (COTS) mission, and adding the launch of two spacecraft toward the second half of 2012, ORBCOMM is able to field additional spacecraft in 2012 resulting in increased coverage, while spreading the deployment across multiple launches thereby reducing risk. SpaceX will fully verify the mission performance on the COTS mission and focus on the successful berthing of the Dragon spacecraft to the International Space Station (ISS).

The inclusion of two OG2 satellites as a secondary payload on a high inclination insertion orbit will enable ORBCOMM to significantly improve messaging services in polar latitudes. Additionally, it provides the ability to thoroughly test and verify OG2 satellite performance before the primary launch of eight to twelve OG2 satellites.

�We are excited to put ORBCOMM�s second generation satellites into orbit as scheduled, in the most desirable inclinations with the least amount of risk.� said Elon Musk, founder and CEO of SpaceX. �ORBCOMM has been a great partner and we are looking forward to launch.�

�We are pleased that SpaceX has offered ORBCOMM this opportunity to launch two satellites that will help our customers using our OG2 messaging services, and additionally augment service to our maritime Automatic Identification System (AIS) customers that benefit from coverage at higher inclinations,� said Marc Eisenberg CEO of ORBCOMM. �The net outcome of these revised launch plans has us launching OG2 satellites at a faster pace with less risk.�

The parameters of the Falcon 9 launch of eight to twelve OG2 satellites as its primary mission in early 2013 will be optimized to ensure the best coverage for the enhanced OG2 messaging services. ORBCOMM expects several OG2 satellites will be directly inserted into a specific plane to immediately improve messaging services while other satellites will be put into a transfer orbit and drift to their final orbit location. ORBCOMM expects the drifting operation will take several months to occur and that the satellites will be functional and providing messaging services during this period.

About ORBCOMM Inc.

ORBCOMM is a leading global satellite data communications company, focused on Machine-to-Machine (M2M) communications. Its customers include Caterpillar Inc., Doosan Infracore America, Hitachi Construction Machinery, Hyundai Heavy Industries, Asset Intelligence (a division of I.D. Systems, Inc.), Komatsu Ltd., Manitowoc Crane Companies, Inc., and Volvo Construction Equipment among other industry leaders. By means of a global network of low-earth orbit (LEO) satellites and accompanying ground infrastructure, ORBCOMM�s low-cost and reliable two-way data communication services track, monitor and control mobile and fixed assets in four core markets: commercial transportation; heavy equipment; industrial fixed assets; and marine/homeland security. ORBCOMM based products are installed on trucks, containers, marine vessels, locomotives, backhoes, pipelines, oil wells, utility meters, storage tanks and other assets. Through the recently acquired StarTrak Information Technologies, LLC, ORBCOMM is an innovator and leading provider of tracking, monitoring and control services for the refrigerated transport market. Under its ReeferTrak� and GenTrakTM brands, the company provides customers with the ability to proactively monitor, manage and remotely control their refrigerated transport assets. Additionally, ORBCOMM is a leading provider of Automated Identification Services (AIS) used by governments and select commercial customers worldwide. AIS is a shipboard broadcast service that transmits a vessel�s identification and position, and its use has been mandated by The International Maritime Organization on all Safety of Life at Sea vessels. ORBCOMM is headquartered in Fort Lee, New Jersey and has its network control center in Dulles, Virginia. For more information, visit www.orbcomm.com.

About SpaceX

SpaceX designs and builds highly-advanced rockets and spacecraft that are increasing the reliability of space transportation. SpaceX has a diverse manifest of 40 launches to deliver commercial and government satellites to orbit. With the retirement of the Space Shuttle, the SpaceX Falcon 9 rocket and Dragon spacecraft will start carrying cargo, and one day astronauts, to and from the Space Station for NASA. In 2010, SpaceX became the first commercial company in history to put a spacecraft into orbit and return it safely to earth - a feat previously achieved by just 6 nations or government agencies. Founded in 2002 by Elon Musk, SpaceX is a private company owned by management and employees, with minority investments from Founders Fund, Draper Fisher Jurvetson, and Valor Equity Partners. The company has over 1,500 employees in California, Texas, Washington, D.C. and Florida. For more information, visit www.SpaceX.com.

Forward-Looking Statements Relating To ORBCOMM

Certain statements discussed in this press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally relate to our plans, objectives and expectations for future events and include statements about our expectations, beliefs, plans, objectives, intentions, assumptions and other statements that are not historical facts. Such forward-looking statements, including those concerning ORBCOMM�s expectations, are subject to known and unknown risks and uncertainties, which could cause actual results to differ materially from the results, projected, expected or implied by the forward-looking statements, some of which are beyond ORBCOMM�s control, that may cause ORBCOMM�s actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These risks and uncertainties include but are not limited to: the impact of global recession and continued worldwide credit and capital constraints; substantial losses we have incurred and may continue to incur; demand for and market acceptance of our products and services and the applications developed by our resellers; loss or decline or slowdown in the growth in business from Asset Intelligence, a subsidiary of I.D. Systems, Inc. (�AI�), other value-added resellers or VARs and international value-added resellers or IVARs; loss or decline or slowdown in growth in business of any of the specific industry sectors ORBCOMM serves, such as transportation, heavy equipment, fixed assets, maritime and homeland security; our acquisition of the StarTrak Systems, LLC business may expose us to additional risks; litigation proceedings; technological changes, pricing pressures and other competitive factors; the inability of our international resellers to develop markets outside the United States; market acceptance and success of our Automatic Identification System (�AIS�) business; the ability to maintain commercial-level AIS service in the near term; satellite launch and construction delays and cost overruns of our next-generation satellites; in-orbit satellite failures or reduced performance of our existing satellites; the failure of our system or reductions in levels of service due to technological malfunctions or deficiencies or other events; our inability to renew or expand our satellite constellation; political, legal regulatory, government administrative and economic conditions and developments in the United States and other countries and territories in which we operate; and changes in our business strategy, and the other risks described in our filings with the Securities and Exchange Commission. Unless required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. For more detail on these and other risks, please see our �Risk Factors� section in our annual report on Form 10-K for the year ended December 31, 2010.

Source: ORBCOMM Inc.

Contact:
Investors:
ORBCOMM Inc.
Mike Rindos, 703-433-6505
VP, Strategic Development and Investor Relations
rindos.michael@orbcomm.com
or
Media:
The Abernathy MacGregor Group
Jennifer Lattif Stroud, 212-371-5999
Vice President
jcl@abmac.com

 

THIS IS NOT A RECOMMENDATION TO BUY OR SELL ANY SECURITY!

SM: Reverse Mortgages Return

Converting home equity into cash has been a challenge for homeowners since the real-estate downturn, but a growing number of lenders are quietly reviving a loan for seniors that does just that: the reverse mortgage.

Reverse mortgages allow homeowners who are at least 62 years old to draw down on their home's equity in exchange for cash in several ways, including one lump sum, a line of credit or monthly payments.

Compared to a few years ago, the total number of reverse mortgages is small. But lending has been picking up. In 2011, MetLife Bank originated 10,512 reverse mortgages, up 171% from the previous year, according to data firm Reverse Market Insight. The firm tracks reverse mortgages insured by the Department of Housing and Urban Development, or about 95% of total originations. Other lenders also had sharp increases. Quicken Loans' company One Reverse Mortgage doled out 4,619, up 43%, while Urban Financial Group and Genworth Financial Home Equity Access, a subsidiary of Genworth Financial, increased lending by 80% and 96%, respectively.

And in June, housing lenders US Mortgage Corporation, based in Melville, N.Y., and Irving, Calif.-based Greenlight Financial Services each launched reverse mortgage divisions.

This comes in spite of recent moves by HUD to lower the amount homeowners can borrow. The limit is now 62% of a home's value for a 62-year old; an 80-year-old can borrow up to 72% of the home's value.

With falling home values making it difficult for homeowners to refinance or sell -- and the stock market not delivering great gains -- the loans are understandably attractive to many Americans. Lenders say reverse mortgages can be a portfolio diversifier that provides retirees with extra income to supplement their 401(k).

But there are good reasons why advisers have historically recommended them only as a last-gasp way to raise cash.

For one, because borrowers are still responsible for property taxes and homeowner's insurance, if they fall behind, lenders can foreclose on the property, says Karin Hill, director of single family program development at HUD.

Also, reverse mortgages carry hefty fees. Origination fees can be up to 2% of a home's value, capped at $6,000, says John Lunde, president of RMI. Closing costs vary but are often about 2% of the loan.

There are also mortgage-insurance fees charged by HUD. HUD charges an upfront mortgage insurance premium of 2% of the property's value plus another insurance fee of 1.25% annualized rate that accrues monthly on the loan's outstanding balance. HUD also offers a reverse mortgage option with a lower upfront mortgage insurance premium that's just 0.01% of the property's value for smaller loans; qualifying will vary based on several factors.

Most fees can be rolled into the mortgage, but the loan plus interest must be paid back to the lender when the homeowner passes away, sells the home or moves out. Interest rates on these loans currently average 5% for a fixed-rate reverse mortgage and around 2.5% for an adjustable rate. A 65-year-old with a home that's worth $500,000 who took an initial advance of $303,500 at a 5% fixed rate could owe $978,190 (including interest and fees) after 18 years, says Lunde. If a homeowner or his heirs can't sell the home for this amount, HUD will pay the difference between home's value and the outstanding balance to the lender; that money comes from the HUD insurance fees borrowers pay during the life of the loan.

Some advisers say a home-equity loan, which allows homeowners to borrow against some of their home equity in one lump sum, is often the safer bet. Closing costs tend to be smaller than on a typical reverse mortgage and in some cases lenders can waive them, says Buz Livingston, a certified financial planner in Santa Rosa Beach, Fla. The downside? Average interest rates on home-equity loans are currently higher.

There are situations where reverse mortgages make sense. Financial planner Mike McGervey of North Canton, Ohio, says he thinks they can be a good solution for people in their 80s, who are usually able to convert more home equity into cash than younger borrowers.

In some cases, homeowners sign up for a reverse mortgage as a lump sum to pay off their mortgage. That is what Joseph Rinaldi, 62, did when he signed up through US Mortgage Corp. three months ago. Now, rather than paying $2,200 per month in mortgage payments, Mr. Rinaldi, who lives in Mamaroneck, N.Y., says he and his wife use that money for everyday living expenses. "This saved mine and my wife's life," he says.

For homeowners who are convinced a reverse mortgage is right for them, advisers say there are reasons to sign up sooner rather than later, since qualifying may soon get more difficult. HUD is developing guidelines that will lead to more extensive underwriting, which could be announced as soon as this year. Details haven't been released yet, but industry experts say they could require lenders to check applicants' income and assets to make sure they can cover ongoing costs of the home, including taxes and insurance.

In November, MetLife was the first lender to implement additional requirements, such as providing income or asset documentation (like Social Security payments and dividends) and a list of monthly living expenses, and experts say more lenders could follow.