7 Stocks to Buy for Gains in 2014

Air Lease

The dynamic duo who turned International Lease Finance Corp. into an airplane-leasing giant in the 1980s, Steven Udvar-Házy and John Plueger, came out of semi-retirement to launch Air Lease (AL) in 2010. Since then, the company has built a fleet of 174 jets, which are leased to more than 75 airlines. Air Lease also helps manage air fleets, so when customers lease its new planes, it also brokers the sale of their old ones. Analysts expect profits to increase 30% in 2014, but the stock sells for only 16 times estimated earnings. (All prices and related data are as of November.)

SLIDE SHOW: 24 Stocks for 2014

Cree Inc.

Cree Inc. (CREE) is a leader in the manufacture of light-emitting diodes, or LEDs. These energy-sipping bulbs, which require up to 85% less power than traditional bulbs and can last up to 25 times longer than traditional bulbs, are gaining popularity. Only about 3% of the U.S. population currently uses them, but government price subsidies are making them more popular and affordable. Cree is also stepping into the solar-power industry. That should help light up sales and profits for years to come and justifies the stock's rich price, which amounts to 34 times estimated earnings.

Eaton Corp.

An improving global economy is bullish for Eaton (ETN), which specializes in power management—from the manufacture of hydraulic systems for trucks and planes to the circuit breakers used in commercial construction. Eaton moved its headquarters from Ohio to Ireland in 2012 as part of its purchase of electronics giant Cooper Industries. The deal helped boost sales and profits in 2013. But the sluggish commercial-construction market is weighing on results. Morningstar analyst Daniel Holland thinks that business will rebound in 2014, allowing Eaton to fire on all cylinders.

General Electric

Global conglomerates such as (GE) tend to expand at the same pace as overall economic growth. So GE will benefit from an improving world economy—and then some. That's because, says Holland, GE is better than most conglomerates at creating synergies among its various operations—from aviation to health care—that help facilitate the creation of new products. Shareholders are benefiting from dividend hikes, as well as share buybacks, which will help profits grow at a 10% pace over the next few years. Plus, the stock yields an above-average 2.9%.

Honeywell Intl.

In 2010, when Honeywell International (HON) announced an ambitious five-year growth plan, analysts were skeptical. They acknowledged that the firm, which makes everything from thermostats to jet engines, was well run, but they thought it couldn't wring enough efficiencies from its operations to overcome a struggling economy. But Honeywell hit all of its goals and has turned skeptics into believers, says Stifel Nicolaus analyst Jeff Osborne. Now, Honeywell is set to put out a new five-year plan that he thinks will be even more ambitious—and will help boost the stock.

JPMorgan Chase

Over the past two years, JPMorgan Chase (JPM) has been mired in controversies, ranging from billion-dollar losses in the London Whale trading debacle to a proposed $13-billion settlement with regulators over improprieties in the mortgage market. The sideshows, though, mask the bank's underlying strength, says Raymond James analyst Anthony Polini. JPMorgan is one of the best-run banks, with a strong balance sheet and a compelling international investment-banking operation. The legal woes have suppressed the stock, which trades for just 9 times earnings.

Occidental

A major energy producer, Occidental Petroleum (OXY) has an edge over many of its peers: It gets the bulk of its energy from politically stable North America, and most of that energy is in liquid form, which benefits from a favorable balance of supply and demand. Oxy also boasts a superb balance sheet, with plenty of cash for dividends and share buybacks. To boost Oxy's long-moribund stock price, the company has launched a restructuring plan, which initially involves selling assets to raise cash. Morningstar analyst Allen Good thinks Oxy's stock is a bargain.

5 Short-Squeeze Stocks Ready to Pop

BALTIMORE (Stockpickr) -- It's been a rough year to be a short seller. Since January, the S&P 500 has climbed a whopping 26.4% -- and with the new all-time highs that the big index hit this week, it's not showing any signs of slowing down.

>>5 Stocks With Big Insider Buying

All the way up, stocks that short sellers thought were too expensive to begin with have gotten more expensive. That doesn't exactly do wonders for your conviction in a trade. As the old saying goes, "I don't mind being wrong -- but I don't want to be wrong for long". So when shorts start to cover their bets, it could fuel a short squeeze in some of Wall Street's most hated names.

Historically, that's not out of the ordinary. In fact, buying the most hated and heavily shorted large and mid-cap stocks (the top two quartiles of all shortable stocks by market capitalization) would have beaten the S&P 500 by 9.28% each and every year. That's some material outperformance during a decade when decent returns were very hard to come by. >>5 Breakout Trades for the Final Stretch of 2013 When I say that investors "hate" a stock, I'm talking about its short interest. A stock with a high level of shorting indicates that there are a lot of people willing to bet on a decline in its share price - and not many willing to buy. Too much hate can spur a short squeeze, a buying frenzy that's triggered by shorts who need to cover their losing bets. And with the rally we've been since last November, you can probably guess that there are lots of losing open short bets. One of the best indicators of just how high a short-squeezed stock could go is the short interest ratio, which estimates the number of days it would take for short-sellers to cover their positions. The higher the short ratio, the higher the potential profits when the shorts get squeezed. It's worth noting, though, that market cap matters a lot. Short sellers tend to be right about smaller names, with micro-caps delivering negative returns when the same method was used.

>>5 Stocks Set to Soar on Bullish Earnings

Today, we'll replicate the most lucrative side of this strategy with a look at five big-name stocks that short sellers are piled into right now. These stocks could be prime candidates for a short squeeze in the months ahead.

Salesforce.com

Enterprise software maker Salesforce.com (CRM) has been a consistent short target this year, egged on by climbing share prices and plenty red ink at the bottom of its income statement. As I write, CRM sports a short interest ratio of 13.16. At that level, it would take almost three weeks of buying pressure for short sellers to cover their bets against Salesforce. >>5 Stocks Poised for Breakouts Salesforce is a must-have application for its 100,000 customers. The firm's Web application lets users run business applications that interact with their customer lists, handling everything from sending newsletters to tracking sales. The Salesforce.com platform has a direct, measurable correlation to sales -- and that mission-critical nature of CRM's offering digs a big economic moat for the firm. The subscription-oriented sales model provides attractive recurring revenues for CRM, and it's kept the firm's top line on a very nice trajectory. It's the bottom line -- marked in red ink -- that's gotten short sellers so excited. And while it's true that CRM has been investing hard in growth (and that management's long-run profitability guesses are a bit on the high side), the firm has the ability to cut costs relatively quickly without risking revenues. CRM is a prototypical short squeeze play. Earnings in February could be the next big catalyst. Cerner In a lot of ways, Cerner (CERN) has a lot in common with Salesforce. Both firms produce high-end, wide-moat enterprise software, and both stocks are hated right now. At last count, Cerner's short interest ratio weighed in at 11.29, indicating more than two full weeks of buying pressure at current volume levels for shorts to get out. With a 50% rally in CERN year-to-date, it's a safe bet that short sellers are starting to feel a bit fatigued. >>3 Stocks SPiking on Big Volume Cerner provides health care facilities with the hardware and software to implement electric medial records. Today, almost a third of U.S. hospitals use Cerner's Millennium platform to store everything from patient medical data to financial records. It's not just hospitals either; pharmacies and physician offices are using Cerner's platform to manage their records too. With government rules to implement electronic systems for patient records, going to a firm like Cerner isn't just cost-effective, it's mandated by law.

Getting paid is another big incentive for medical facilities to embrace Cerner's Millennium platform. Cerner's offerings cut down the administrative steps needed to get practices and hospitals payments from either insurance companies or government programs. That helps lessen the blow of a costly medical IT package. While CERN isn't cheap at its current valuation, momentum is clearly in favor of shares right now -- and a short squeeze could help push this stock even further.

M&T Bank

There's no two ways about it: Investors hate M&T Bank (MTB) right now. With a short ratio of 10.06, M&T is the most heavily shorted big banking name out there, in fact. But that hate is misplaced.

>>4 Stocks Under $10 in Breakout Territory M&T is a $15 billion regional bank with a big presence in the mid-Atlantic and parts of the Northeast. Don't let the "regional" moniker fool you -- M&T ranks as one of the 20 biggest banks in the country, with more than $83 billion in assets under its belt. But being a regional bank has historically meant that M&T kept up stricter underwriting rules for its loan book than its bigger peers, and as a result, M&T was charging off less than a quarter of what big banks were still determining to be worthless as recently as last year. M&T currently sports a 2.4% dividend yield, a payout that puts it on the high end of publicly traded banking stocks. That's also a testament to regulators' opinion of MTB's financial wherewithal. Since dividends need to get approved by the Feds, the bank's payout has gone through some scrutiny. With a rise in interest rates all but inevitable eventually, the spread that M&T is able to earn should continue to widen in the years ahead. That increased earnings power looks discounted right now, in spite of short sellers' presence in this stock. Fastenal The nation's warming economic engine is providing some big growth prospects for industrial supply company Fastenal (FAST). Yes, you could certainly argue that Fastenal's business isn't particularly exciting -- it's not. But this stock's growth rates are exciting, with sales and profits expanding in each of the last four straight years.

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Fastenal's business is built on providing must-have supplies to other businesses. One of Fastenal's biggest benefits is its huge product catalog. The firm carries more than 410,000 types of fasteners and more than 585,000 maintenance and repair products, an inventory that makes each of Fastenal's 2,700 brick-and-mortar locations a one-stop shop for its customers. A high concentration of consumables provides recurring revenues for Fastenal -- customers go through products like air filters, paper towels and packaging products on an ongoing basis. Even if margins on those staple offerings are lower, they help attract bigger-dollar sales of power tools and furniture.

It's hard to argue with Fastenal's financials. The firm has been a shining example of internal growth, eschewing debt in favor of using cash flows to finance new store locations and inventories. Still short sellers hate this stock -- and that's propelled shares' to a short interest ratio of 14.88. With three weeks of buying just to cover sellers' bets, FAST is a prime short squeeze candidate.

Staples With shoppers eyeing big Black Friday sales this week, it'd be a mistake to ignore what's going on at Staples (SPLS). While the office supply superstore is probably best known for supplying offices around the world, the firm is also a huge seller of consumer products -- and it's the second-largest online retailer in the world. Right now, SPLS sports a short interest ratio of 10.37. >>5 Dividend Stocks That Want to Pay You More Almost half of Staples' business comes from its corporate delivery business -- the firm's acquisition of Corporate Express in 2008 gave Staples a foothold in the niche, replete with high switching costs and a hard-to-replicate delivery network. On the retail side, Staples' more than 2,000 stores worldwide give it a hard-to-match presence on the ground. A big factor in SPLS' segment-beating margins has been an abundance of private label offerings, from sticky notes to pens. With economies of scale that smaller rivals can't match, Staples can move more SKUs more cheaply than ever before. The missteps of the other big office supply chains have demonstrated that Staples' business is a tough one to remain competitive in. But the firm's attractive mix of corporate, online, and retail sales combined with deeper margins mean that SPLS currently has a margin of safety that its rivals don't have. With shares outperforming the S&P 500 by around 10% year-to-date, short sellers are a whole lot more sensitive to upside at this point - watch for the next catalyst.

To see these short squeezes in action, check out this week's Short Squeezes portfolio on Stockpickr.

-- Written by Jonas Elmerraji in Baltimore.

RELATED LINKS: >>4 Stocks Under $10 Moving Higher >>4 Stocks Breakout Out on Unusual Volume >>5 Stocks Under $10 Set to Soar

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At the time of publication, author had no positions in stocks mentioned. Jonas Elmerraji, CMT, is a senior market analyst at Agora Financial in Baltimore and a contributor to TheStreet. Before that, he managed a portfolio of stocks for an investment advisory returned 15% in 2008. He has been featured in Forbes , Investor's Business Daily, and on CNBC.com. Jonas holds a degree in financial economics from UMBC and the Chartered Market Technician designation. Follow Jonas on Twitter @JonasElmerraji

The Trouble with Index Funds

Nowadays everybody loves index funds. What's not to love? On average, index funds outpace roughly two-thirds of actively managed funds. And because most major market indexes are way up since the nadir of the bear market on March 9, 2009, anyone who has been in an index fund since then has undoubtedly earned a lot of money.

See Also: How to Pick the Best Index Funds

Consider just a few performance numbers: Standard & Poor's 500-stock index has returned an annualized 25.6% (192.2% on a cumulative basis). The Russell 2000 index of small companies has done even better, soaring an annualized 29.9% (242.2% cumulative). The MSCI EAFE index, which follows stocks in developed foreign markets, has risen an annualized 20.8% (143.2% cumulative). Even Barclays Aggregate U.S. Bond index, which tracks the high-quality part of the domestic bond market, has gained an annualized 5.1%, or a cumulative 26.5%. (All returns are through November 19.)

Any half-decently run index fund has matched the returns of those indexes, minus 0.1 or 0.2 percentage point to account for fund expenses. So why bother with any other kind of fund?

Here's the rub: Stock-index funds seek to reflect the overall stock market, and that means tracking the market's downs as well as its ups. Most investors want to be cushioned from the brunt of bear markets, and actively managed funds are a better place to look for that protection. That's why a mix of index funds and actively managed funds may be your best bet as an investor.

It's no coincidence that index funds have increased in popularity during the current bull market. The charm will likely fade for many during the next bear market. During the last bear market, when the S&P 500 plunged 55.3%, many investors flocked to actively managed funds that promised some relief from the pain—whether by holding cash or bonds or buying stocks that were less volatile than those that dominate the S&P 500, the most popular index for passive funds.

Don't get me wrong. There's a lot to like about broad-based index mutual funds and exchange-traded funds, most of which track indexes. (I'd avoid most of the narrow ETFs, which are proliferating like rabbits.) Index funds are cheap, especially if they come from a low-cost firm such as Vanguard. It's easy to pick index funds; you don't have to pore over newsletters, fund reports and magazine articles. Index funds are tax-friendly in that they don't pay out big capital gains the way actively managed funds do. Finally, broad index funds offer diversification—the one free lunch in investing.

But don't put all your money in index funds, especially if you're worried about the next vicious bear market. That's ample reason to favor funds that should produce solid returns in good markets but that also held up relatively well in the 2007-09 massacre. For example, FPA Crescent (FPACX) lost only 27.9% during the bloodbath, compared with a 55.3% plunge for the S&P 500. Others that held up reasonably well were Matthews Asian Growth & Income (MACSX), down 39.4%, Vanguard Dividend Growth (VDIGX), off 42.3%, and Yacktman Fund (YACKX), down 46.5%.

Index funds don't have those shock absorbers. "There are a lot of good defensive strategies in active management," says Russel Kinnel, director of fund research at Morningstar. Of course, the trick is to find good actively managed funds. Many actively run funds lost as much as or more than index funds during the last bear market.

When to use index funds? Start with large-company U.S. stocks. These companies are so widely followed and so carefully scrutinized by investors and analysts that it's difficult for active managers to add value through their stock-picking skills. Large foreign companies in the developed world are almost as thoroughly researched.

When to use actively managed funds? When you can find a relatively low-cost fund that has produced strong risk-adjusted results compared with its benchmark over a long period (at least five years) under the same manager.

In more normal times, index fund investors could sensibly reduce their portfolio's overall volatility simply by increasing their allocations to bonds and cash. But these are still not normal times, and the outlook for high-quality bonds, particularly bond index funds, many of which are filled with government debt, is dismal. Even John Bogle, the former Vanguard Group chief who was instrumental in bringing index funds to the masses, says to avoid generic bond index funds because they own too many government bonds, which are especially susceptible to rising interest rates (bond prices and rates move in opposite directions). And cash, of course, is earning almost nothing.

For most of my money, I'd rather have a manager such as FPA Crescent's Steve Romick decide how much to invest in stocks, bonds and cash—and have him change those allocations a bit as opportunities emerge. Or I'd like a fund such as Yacktman, which takes a low-risk approach to the markets by loading up on inexpensive, high-quality stocks.

Low-volatility funds, which are becoming more popular, are intriguing. They start with a regular index and remove its most-volatile stocks. But these funds are too new and untested for me to trust yet. The ones I've looked at have big exposures to some industry sectors and little to others. They're not truly index funds—at least they don't fully reflect the overall market.

To me, a mix of index and actively managed funds makes the most sense. That way you keep your costs low and keep your risks relatively low, too.

Steven T. Goldberg is an investment adviser in the Washington, D.C., area.

Will Endless Bank Charges and Settlements Kill the Economy?

Bankers are still not very well thought of after the financial meltdown, even if they might not have ben that well thought of before the meltdown. Still, at some point the public needs to understand that the endless fining, settlements, and then new attacks on the banks is not helping things along in the economy. A report was put out in recent days by SNL Financial showing that big banks have settled for over $65 billion in fines so far. The report is also calling for more big settlements to come and we have seen even worse figures elsewhere.

Bank of America Corp. (NYSE: BAC) was in 2012 where J.P. Morgan Chase & Co. (NYSE: JPM) finds itself now. BofA took on endless liabilities with Countrywide and Jamie Dimon did not get the preferential post-meltdown treatment he expected for scooping up Bear Stearns to keep the system running. The largest banks have paid this amount in the last three and a half years and these settlements have involved the likes of Wells Fargo & Co. (NYSE: WFC) and Citigroup Inc. (NYSE: C) as well.

What gets hard to imagine is where the charges and the settlements end, as well as how long the fines have to keep coming. SNL predicted that these huge charges, fines, and settlements would continue. We agree and think that the government agencies are in domino-attack mode. One major charge and settlement only begets another, likely from another rival agency or group. A settlement with the Department of Justice triggers the Securities and Exchange Commission to go after the banks from a securities and investor angle. A federal settlement triggers similar moves by states. It can be endless.

Now there is something else to consider. There were reports even back in August that the six largest banks in America have paid out a whopping $103 billion just in legal costs since the meltdown. Bloomberg said that this applied to charges from lawyers and litigation, and from settling mortgage and foreclosure claims.

We do not expect America to become fond of bankers any time soon. Those “Have You Hugged Your Banker Today?” tee-shirts have not started appearing in stores just quite yet. What the public (and regulators) need to understand is that these claims have risen and risen, and still seem to keep rising. This is at the same time that capital reserves have been forced significantly higher as well.

When banks settle with any branch of the government and when they have to put more and more cash aside just to be held in reserves, take a guess what it does for their desire to make new loans. Now consider how eager you would be to take on the risk of a loan when the Federal Reserve is artificially keeping interest rates lower than they should be.

Now go one step further. If your credit score is bad, or if you have a blemish from your past, what are your chances of ever getting a bank loan over a solid credit profile when reserves are going up and when settlement payments are eating at that cash?

The end game is that loan demand is low on its own, but banks are frequently accused of only lending money to people or companies that do not really need the money. That may be more and more true by the day if these settlements and legal bills keep piling up.

These banks paid back the TARP bailout, for a net profit to the taxpayer. We would also like to remind readers that most of the mergers that banks are still getting to pay fines from were in mergers that were often mandated by regulators at the peak of the meltdown.

It is hard to know when normal a normalized business climate will be allowed to return. What is known is simply “Not Yet.” Even if the endless attack on banks does not manage to kill the economic recovery it should be easy enough to see that extending the same charges and settlements endlessly will start to do more harm than good.

Here is the chart from SNL showing the major settlements:

Source: snl.com

Bond manager in 'big short' misled CDO investors, SEC claims

Wing F. Chau, the bond manager who sued Michael Lewis over his depiction in the 2010 book “The Big Short,” was accused by regulators of violating his fiduciary duty by accommodating requests from Magnetar Capital LLC in managing financial products linked to subprime mortgages.

Mr. Chau, 46, and his firm Harding Advisory LLC didn't disclose giving Magnetar veto rights over selection and acquisition of mortgage-backed assets for a 2006 collateralized debt obligation known as Octans I, the SEC said in an administrative order filed Friday. Magnetar bet against the CDO, which cost outside investors $1.1 billion when it collapsed in April 2008, the SEC said. Harding got $4.5 million for its role in the transaction.

“A collateral manager's independent selection of assets is an important selling point to potential CDO investors,” George Canellos, co-director of the SEC's enforcement division, said in a statement. “Investors had a right to know that Harding and Chau had chosen to accommodate the interests of others and abandon their own obligations to act in the best interests of the CDO they advised.”

Managers such as Mr. Chau were integral to the proliferation of mortgage-linked CDOs in 2006 and 2007 as defaults on subprime loans increased. Collateral managers picked the securities that went into CDOs and held themselves out as independent agents.

The SEC has focused on those financial products' role in helping fuel financial market turmoil in 2008, reaching record settlements with the banks that underwrote them. In 2010, Goldman Sachs Group Inc. agreed to pay $550 million to resolve claims it misled investors about a hedge fund's role in selecting assets for such an investment.

The SEC last year dropped a lawsuit against former GSC Capital Corp. executive Edward Steffelin related to his work as a collateral manager for a CDO involving Magnetar. JPMorgan Chase & Co. agreed to pay $153.6 million over claims it misled investors in underwriting the deal.

Mr. Chau understood that Magnetar was interested in investing as an equity buyer in CDO transactions, and that the firm's strategy also included hedging that position by betting against the debt issued by the same instrument, the SEC said. Because Magnetar stood to profit if the CDO failed to perform, Mr. Chau knew that Magnetar's interests were not necessarily aligned with other Octans I investors, whose investments depended solely on the CDO performing well, according to the order.

Magnetar's Influence

Magnetar's influence over the portfolio was omitted from materials used to solicit investors for the CDO, and Mr. Chau and Harding misrepresented the standard of care t

Weatherford International Ltd (WFT): Strange Insider Activity

It's a trend that's becoming alarming. The number of insider purchase records continues to dwindle. In fact, last week was probably the worst week this author has seen since the mortgage meltdown.

Cleary, the folks running public companies in the US are concerned about something, and based on the stock market's performance before, during, and after the last 17 government shutdowns,  our guess is that corporate executives are worried about something bigger and badder.

We don't want to speculate, but the lack of activity feels like that eerie calm before a nasty storm.

Normally, there are at least a handful of established companies that iStock has to weed through for our weekly insider buying column. However, there was only one insider buy worth mentioning.

And that belongs to William Macaulay who is a director at Weatherford International, Ltd. (WFT). The director bought 78,000 shares of WFT on September 27, 2013 for a total of $1.19 million. Mr. Macaulay's recent purchase is particularly peculiar.

The director did nothing but sell millions of dollars of the Oil & Gas Equipment & Services company for the last two-years. The odd thing is he sold 78,000 shares on August 26, 2013 at $15.05. In a month and a day, Macaulay had a change of heart, paid $0.21 more than the August sell, and made his first open market buy in the past 24 months.

We can't help but wonder why the director made a 180, especially with earnings due to in about a month (November 5, 2013). Things that make you go hmmm.

It's also interesting to note that Chief Admin. Officer and Exec. VP, Dharmesh B. Mehta had a similar U-turn in sentiment, breaking a two-year selling streak when he bought 10,000 shares on September 16, 2013 at $14.97 per-share.

Oh, almost forgot, Switzerland-based, Weatherford provides equipment and services used in the drilling, evaluation, completion, production, and intervention of oil and natural gas wells in over 100 countries, and has service and sales loc! ations in nearly all of the oil and natural gas producing regions in the world.

In the WFT's most recent 10-Q, management wrote, "We believe that 2013 has been and will continue to be a positive year for both our North American and international operations. 

We expect steady improvements in North America with some gains, both top-line and margin.

Internationally, forecasts for Latin America show a very strong year and Europe/SSA/Russia and Asia Pacific are all expected to have solid growth and positive margin improvements. 

MENA should regain its status as a positive contributor. We expect our artificial lift systems product line to have steady volume growth into 2013. 

Pricing increases for artificial lift systems are expected to flatten in North America, but increase in the international markets."

Perhaps, things improved more than expected?

Overall: Weatherford International, Ltd. (WFT) is worth monitoring thanks to the sudden change in sentiment from at least two insiders. Although WFT trades below its 5-year average price-to-sales ratio and marginally higher than the price-to-book norm, iStock has the sense that Macaulay's and Mehta's purchases were not valuation based. They were sellers at lower multiples.

No, we have that eerie calm before the storm sense that something bigger and badder is coming. We'll probably find out on November 5th.

Top 5 Tech Stocks To Watch Right Now

The New York Stock Exchange (NYSE), sometimes referred to as ��he big board,��is the oldest and largest stock exchange in the United States. NYSE is the place investors think of when they picture traders shouting out prices and making wild hand gestures in a visually chaotic live securities auction process known as open outcry. While electronic trading technology is now used to facilitate the majority of trading in a high-speed and high-volume operation, human traders still play a significant role, and the way opening closing prices are set continues to be based on supply and demand in a modern-day auction style format.

The Opening Auction
While the NYSE�� official market opening time is 9:30 AM Eastern, orders to buy and sell securities can be entered as early as 7:30 AM. In particular, the two types of orders that are accepted before the market officially opens are Market on Open (MOO) and Limit on Open (LOO). MOO orders seek to purchase shares at the current market price at the time the market opens. LOO orders seek to purchase a specific number of shares at a specific price when the market opens. If the requested price is not met, the trade does not take place.

Top 5 Tech Stocks To Watch Right Now: Shanda Games Ltd (GAME)

Shanda Games Limited (Shanda Games), incorporated on June 12, 2008, is engaged in the development and operation of online games and related businesses in the People�� Republic of China. Some of its online games are also Web games, which the Company categorizes as either massively multiplayer online role-playing games (MMORPGs) or advanced casual games, rather than as a separate category of online games. As of February 29, 2012, Shanda Games operated 35 online games. Its game player base, which consisted of 20.4 million average monthly active users and 4.5 million average monthly paying users for the three-month period ended December 31, 2011. In April 2011, the Company acquired a 51.85% interest in a game operating company, which provides services in East Asia.

As of December 31, 2011, the Company owned 149 software copyrights. As of December 31, 2011, it owned or licensed 53 trademarks. As of December 31, 2011, it owned or licensed 329 registered domain names, including its official Website and domain names registered in connection with each of the games the Company offers. As of December 31, 2011, it had 17 patent applications pending with the State Intellectual Property Office of China. The Company operates MMORPGs, advanced casual games and Web games in China. Its MMORPGs are action adventure-based and draw upon themes, such as martial arts adventure, fantasy, strategy and historical events. The Company develops and sources an array of game content through multiple channels, including in-house development, licensing, investment and acquisition, and joint operation. Through these channels, it has built a diversified game portfolio and a game pipeline.

The Company licenses games from international and domestic developers. As of February 29, 2012, 13 of its 35 online games were licensed from third-party developers, including Mir II. It invests in independent game development and operating studios identified by 18 Capital. The Company acquire intellectual property rights t! o online games; equity rights in online game development and operating studios, or an option to acquire equity interests in online game development and operating studios in the future.

The Company operates its business in People's Republic of China, through its wholly owned subsidiaries, which consist of Shengqu Information Technology (Shanghai) Co., Ltd. (Shengqu), Shengji Information Technology (Shanghai) Co., Ltd. (Shengji), Lansha Information Technology (Shanghai) Co., Ltd. (Lansha) and Kuyin Software (Shanghai) Co., Ltd (Kuyin); its variable interest entities and their subsidiaries (VIEs), which consist of Shanghai Hongli Digital Technology Co., Ltd. (Shanghai Hongli) and Shanghai Shulong Technology Development Co., Ltd. (Shanghai Shulong) and their wholly owned subsidiaries, Shanghai Shulong Computer Technology Co., Ltd. (Shulong Computer), Nanjing Shulong Computer Technology Co., Ltd. (Nanjing Shulong), Chengdu Youji Technology Co., Ltd. (Chengdu Youji), Tianjin Youji Technology Co., Ltd. (Tianjin Youji), Chengdu Aurora Technology Development Co., Ltd. (Chengdu Aurora), and Chengdu Simo Technology Co., Ltd. (Chengdu Simo).

The Company competes with Tencent Holdings Limited, NetEase.com, Changyou.com Limited, Perfect World Co., Ltd., Giant Interactive, Kingsoft Corporation Limited, KongZhong Corporation, NetDragon Websoft Inc., Nineyou International Limited, The9 Limited, Activision Blizzard, Inc., Electronic Arts Inc., Zynga Inc., NCSoft Corporation, and Nexon Corporation.

Advisors' Opinion:

• [By Lauren Pollock]

  Shanda Games Ltd.'s(GAME) third-quarter earnings fell 1.6% despite growth in the game developer’s revenue driven by its mobile-game segment. Morgan Stanley(MS) analysts aren’t impressed with the company’s PC game pipeline, while sales of its top PC games dropped in the latest period. Shares declined 5.1% to $3.90 premarket.

• [By Kevin Chen]

  On the heels of a resignation, Shanda Games� (NASDAQ: GAME  ) has appointed a new member to its board of directors.

  The company announced Wednesday that due to personal reasons, Guoxing Jiang had resigned from his spot on the board and also the Audit Committee. Replacing him will be Yong Gui. In the company's press release, Chairman Tianqiao Chen said of the new choice:

• [By Roberto Pedone]

  Another under-$10 gaming player that's starting to move within range of triggering a major breakout trade is Shanda Games (GAME), which is an online game company in China in terms of the size, diversity of its game portfolio, game revenues and game player base. This stock is off to a strong start in 2013, with shares up by 24%.

  If you take a look at the chart for Shanda Games, you'll notice that this stock has formed a major bottoming chart pattern over the last two months, with shares of GAME finding significant buying interest whenever it's pulled back to around $3.80 a share. Shares of GAME are now starting to trend within range of triggering a major breakout trade above some key near-term overhead resistance levels. Those levels have acted as resistance for GAME for the last two months.

  Market players should now look for long-biased trades in GAME if it manages to break out above some near-term overhead resistance levels at $4.85 to $4.98 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average action of 1.71 million shares. If that breakout triggers soon, then GAME will set up to re-test or possibly take out its 52-week high at $6.42 a share.

  Traders can look to buy GAME off weakness to anticipate that breakout and simply use a stop that sits right below its 50-day at $4.18 a share or below that major support at $3.80 a share. One can also buy GAME off strength once it clears those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

• [By Evan Niu, CFA]

  What: Shares of Shanda Games (NASDAQ: GAME  ) have popped today by as much as 11% after the game maker launched a new title with early success.

Top 5 Tech Stocks To Watch Right Now: Mentor Graphics Corporation(MENT)

Mentor Graphics Corporation provides electronic design automation software and hardware solutions to automate the design, analysis, and testing of complex electro-mechanical systems, electronic hardware, and embedded systems software. It offers ModelSim, a hardware description language mixed-language digital simulator; Questa tool for the verification of systems and ICs; analog/mixed signal simulators, including Eldo, ADVance MS, and ADiT tools; and Veloce, a hardware emulation system. The company also provides Calibre DRC and Calibre LVS physical verification tools; Calibre xRC and xACT transistor-level extraction and device modeling tools; Calibre lithography tools; Calibre PERC tool for checking the electrical design of an IC; and Olympus-SoC place and route solution. In addition, it offers Expedition Series PCB design products; PADS, a PCB design and layout solution; I/O Designer that integrates FPGA input/output planning with PCB design tools; XtremePCB tool for simul taneous design; XtremeAR, a PCB routing product; and FloTHERM, a 3D computational fluid dynamics software. Further, the company provides software tools for the design of complex wire harness systems and automotive electronic components; and a suite of real-time operating systems, Linux and Android products, middleware, and associated development and debugging tools for developing embedded software. Additionally, it offers software support, hardware support, and customer training services; professional consulting services; and methodology development and refinement services to improve product development processes. The company sells and licenses its products through direct sales force, distributors, and sales representatives primarily to large companies in military and aerospace, communications, computer, consumer electronics, semiconductor, networking, multimedia, and transportation industries worldwide. Mentor Graphics Corporation was founded in 1981 and is headquartered in Wilsonville, Oregon.

Top 10 Insurance Companies To Invest In Right Now: Nortech Systems Incorporated(NSYS)

Nortech Systems Incorporated operates as a contract manufacturing company. It manufactures wire harness cable and printed circuit board assemblies, electronic sub-assemblies, higher level assemblies, and complete devices. The company also provides value added services and technical support, including design, testing, prototyping, and supply chain management; and repair services on circuit boards used in machines in the medical industry. In addition, it engages in the design, manufacture, and post-production service of electronic and electromechanical medical devices for diagnostic, analytical, and other life-science applications. Nortech Systems Incorporated serves various industries that include aerospace and defense; medical; and the industrial markets, which include industrial equipment, transportation, vision, agriculture, and oil and gas. The company markets its products through sales force and independent manufacturers? representatives. Nortech Systems Incorporated was founded in 1981 and is headquartered in Wayzata, Minnesota.

Advisors' Opinion:

• [By James E. Brumley]

  In a perfect world stocks would move in predictable, manageable ways. We don't live - nor do we trade in - a perfect world. In the real world we have to adapt to and deal with the curve balls the market throws us, and there are no two stocks that illustrate that point better than Document Security Systems, Inc. (NYSEMKT:DSS) and Nortech Systems Incorporated (NASDAQ:NSYS) to today. While both NSYS and DSS are up today, one's overbought and ripe for a pullback, while the other is likely at the beginning of a trade-worthy rally.

Top 5 Tech Stocks To Watch Right Now: China Electronics Corporation Holdings Co Ltd (85)

China Electronics Corporation Holdings Company Limited is an investment holding company. The Company, through its subsidiaries, is engaged in design, research and development and sale of integrated circuits. The Company�� integrated circuits design business consists of the design of integrated circuits chips and the development of application system. Its products are used in smart cards, such as identity cards, social security cards, telecommunications cards and electric cards. Its products are also applied in wireless local area networks (WLAN). During the year ended December 31, 2011, the Company obtained 17 new patents, and registered another 16 computer software copyrights and 11 integrated circuits layout designs. Its subsidiaries include CEC Integrated Circuit (Beijing) Co., Ltd, CEC Huada Electronic Design Co., Ltd and others.

Top 5 Tech Stocks To Watch Right Now: Celsion Corporation(CLSN)

Celsion Corporation, an oncology drug development company, develops and commercializes targeted chemotherapeutic oncology drugs based on its proprietary heat-activated liposomal technology. The company is developing its lead product, ThermoDox that is in Phase III clinical trial for primary liver cancer; and in phase II clinical trial for treatment of recurrent chest wall breast cancer. It has a license agreement with Yakult Honsha to commercialize and market ThermoDox for the Japanese market. The company also has a license agreement with Duke University under which it received exclusive rights to commercialize and use Duke's thermo-liposome technology. In addition, Celsion Corporation has a joint research agreement with Royal Phillips Electronics to evaluate the combination of Phillips' high intensity focused ultrasound with its ThermoDox to determine the potential of this combination to treat a range of cancers. The company was founded in 1982 and is based in Columbia, M aryland.

Advisors' Opinion:

• [By EquityOptionsGuru]

  The Prolieve Thermodilatation System was actually developed by the current management of Medifocus while employed at Celsion Corporation (NASDAQ:CLSN). The system was also jointly developed with Boston Scientific (NYSE:BSX) before being acquired by Medifocus in July 2012. Prolieve has already received FDA approval, is currently generating revenue, and is the only in office alternative to drug therapy. The system essentially uses microwave energy to treat Benign Prostatic Hyperplasia (BPH), which is a non-cancerous enlargement of the prostate gland that typically affects men over the age of 50. The Prolieve device works by compressing and heating prostatic tissue that may be blocking the flow of urine. This particular treatment option offers patients several benefits including the following:

• [By Paul Ausick]

  Stocks on the Move: NQ Mobile Inc. (NYSE: NQ) is up 26% at $11.09 as the company fights back against a short-seller report. Celsion Corp. (NASDAQ: CLSN) is up 339.3% at $5.14 following a reverse 1:4.5 stock split. Micron Technology Inc. (NASDAQ: MU) is up 4.7% at $17.50.

Does JPMorgan Chase Support Rising Prices?

With shares of JPMorgan Chase (NYSE:JPM) trading around $52, is JPM an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework.

T = Trends for a Stock’s Movement

JPMorgan Chase is a financial holding company that provides various financial services worldwide. The company is engaged in investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing, asset management, and private equity. Financial services companies like JPMorgan Chase are essential for well-functioning economies around the world.

JPMorgan Chase is planning to spend another $4 billion on its risk and compliance issues, as the company remains under a number of investigations, The Wall Street Journal reports. The company also plans to hire 5,000 employees to bulk up its risk-control staff. The bank plans to spend $1.5 billion on better managing risk and making sure it’s complying with regulations, while the remaining $2.5 billion will go toward legal fees. "Fixing our control issues is job No. 1," CEO Jamie Dimon said to the Journal.

T = Technicals on the Stock Chart Are Mixed

JPMorgan Chase stock has been moving higher in the past several quarters. The stock is currently trading near prices not seen since before the financial crisis. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, JPMorgan Chase is trading between its key averages, which signals neutral price action in the near term.

Source: Thinkorswim

Taking a look at the implied volatility and implied volatility skew levels of JPMorgan Chase options may help determine if investors are bullish, neutral, or bearish.

	Implied Volatility (IV)	30-Day IV Percentile	90-Day IV Percentile
JPMorgan Chase Options	29.04%	93%	91%

What does this mean? This means that investors or traders are buying a significant amount of call and put options contracts as compared to the last 30 and 90 trading days.

	Put IV Skew	Call IV Skew
October Options	Steep	Average
November Options	Steep	Average

As of Friday, there is average demand from call buyers or sellers and high demand by put buyers or low demand by put sellers, all neutral to bearish over the next two months. To summarize, investors are buying a significant amount of call and put option contracts and are leaning neutral to bearish over the next two months.

E = Earnings Are Increasing Quarter Over Quarter

Rising stock prices are often strongly correlated with rising earnings and revenue growth rates. Also, the last four quarterly earnings announcement reactions help gauge investor sentiment on JPMorgan Chase’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for JPMorgan Chase look like and more importantly, how did the markets like these numbers?

	2013 Q2	2013 Q1	2012 Q4	2012 Q3
Earnings Growth (Y-O-Y)	32.23%	33.61%	54.89%	37.25%
Revenue Growth (Y-O-Y)	13.67%	-3.57%	10.16%	5.82%
Earnings Reaction	-0.30%	-0.60%	1.01%	-1.14%

JPMorgan Chase has seen increasing earnings and revenue figures over the past four quarters. From these numbers, the markets have had mixed feelings about JPMorgan Chase’s recent earnings announcements.

P = Weak Relative Performance Versus Peers and Sector

How has JPMorgan Chase stock done relative to its peers – Bank of America (NYSE:BAC), Citigroup (NYSE:C), and Wells Fargo (NYSE:WFC) — and sector?

	JPMorgan Chase	Bank of America	Citigroup	Wells Fargo	Sector
Year-to-Date Return	19.70%	46.52%	27.63%	23.76%	25.19%

JPMorgan Chase has been a poor relative performer, year to date.

Conclusion

JPMorgan Chase is a bellwether in the banking and financial space that forms an essential part of the United States financial system. The company has allocated more funds toward risk and compliance issues, as it is still under investigation. The stock has been moving higher in recent quarters and is now trading near prices not seen since before the financial crisis. Over the past four quarters, earnings and revenues have been increasing. However, investors have had mixed feelings about the company. Relative to its peers and sector, JPMorgan Chase has been a year-to-date performance leader. WAIT AND SEE what JPMorgan Chase does this coming quarter.

A.P. Pharma, Inc. Reports Planned Name Change to “Heron Therapeutics, Inc.” and Application to List on NASDAQ Capital Market (OTCBB:APPA)

A.P. Pharma, Inc. Inc. (APPA)

Today, APPA has shed (-1.27%) -0.005 at $.390 with 848,803 shares in play thus far (ref. google finance Delayed: 1:08PM EDT August 14, 2013).

A.P. Pharma, Inc. previously reported it has filed an application to list the Company's common stock on the NASDAQ Capital Market. In addition, the Company's Board of Directors has, subject to stockholder approval, approved proposals to rename the Company “Heron Therapeutics, Inc.” and to implement a reverse split of its common stock. The reverse stock split will be implemented in support of the Company's NASDAQ listing application at a specific ratio within the range of 1:10 to 1:20, as fixed by the board following stockholder approval.

A.P. Pharma, Inc. Inc. (APPA) 5 day chart:

5 Best Cheap Stocks To Invest In 2014

You've got to hand it to Boeing (NYSE: BA  ) . If there's one thing it does, it builds lots of planes -- even if they don't always work right or come in on budget. One of Boeing's latest ventures involves an attempt to stay ahead of rival EADS Airbus' A350-1000, the largest version of Europe's newest plane.

Right now, Boeing has the market cornered when it comes to "mini-jumbos," thanks to the 777, a twin-engine plane capable of going distances similar to that of a four-engine plane. More importantly, the 777 is Boeing's most lucrative plane, according to analysts. To make sure it stays that way, Boeing is planning on rolling out a few upgrades; the 777-9X and the 777-8X. But will these planes prove profitable? Or will Airbus come out on top?�

Photo: Jean-Philippe Boulet, via Wikimedia Commons.�

777 vs. A350
When it comes to comparing the new 777X's with the A350-1000, there are a few key differences to keep in mind. The 777X's will have a metal fuselage with carbon fiber wings, which, according to Boeing, will increase performance but maintain reliability. The A350-1000, on the other hand, will mainly be carbon fiber. Airbus argues that this makes the plane lighter, and cheaper to operate. �

5 Best Cheap Stocks To Invest In 2014: Rent-A-Center Inc.(RCII)

Rent-A-Center, Inc., together with its subsidiaries, primarily engages in leasing household durable goods to customers on a rent-to-own basis. The company?s stores offer durable products, such as consumer electronics, appliances, computers, and furniture and accessories under flexible rental purchase agreements that allow the customer to obtain ownership of the merchandise at the conclusion of an agreed upon rental period. It also provides merchandise on an installment sales basis in its stores. As of December 31, 2010, the company operated 3,008 company-owned stores in the United States, and in Canada, Puerto Rico, and Mexico, including 42 retail installment sales stores under the names ?Get It Now? and ?Home Choice?; and 18 rent-to-own stores located in Canada under the ?Rent-A-Centre? name. It also operates 209 franchised rent-to-own stores in 32 states under the ColorTyme trade name; and 384 kiosk locations under the ?RAC Acceptance? model. In addition, the company, th rough its ColorTyme?s franchised stores, offers custom rims and tires for sale or rental under the trade names ?RimTyme? or ?ColorTyme Custom Wheels?. Rent-A-Center, Inc. was founded in 1986 and is headquartered in Plano, Texas.

Advisors' Opinion:

• [By Marc Bastow]

  Rent-to-own consumer products company Rent-A-Center (RCII) raised its quarterly dividend 10% to 23 cents per share, payable on Jan. 23 to shareholders of record as of Jan. 3.
  RCII Dividend Yield: 2.77%

5 Best Cheap Stocks To Invest In 2014: Wendy's/Arby's Group Inc.(WEN)

The Wendy's Company operates as a quick-service hamburger company in the United States. The company, through its subsidiary, Wendy's International, Inc., operates as a franchisor of the Wendy's restaurant system. As of December 26, 2011, the Wendy's system comprised approximately 6,500 franchise and company restaurants in the United States and the United States territories, as well as in 26 other countries worldwide. The company was formerly known as Wendy's/Arby's Group, Inc. and changed its name to The Wendy's Company in July 2011. The Wendy's Company was founded in 1884 and is headquartered in Dublin, Ohio.

Advisors' Opinion:

• [By Jeff Reeves]

  Burger chain Wendy�� (WEN) has soared almost 60% so far in 2012, but remains under $10 a share and is still a decent buy for investors looking at low-priced options right now.

• [By Jake L'Ecuyer]

  Top Headline
  The Wendy's Co (NASDAQ: WEN) reported better-than-expected third-quarter adjusted earnings.

  Wendy's posted a quarterly loss of $1.9 million, or $0.00 per share, versus a year-ago loss of $26.2 million, or $0.07 per share. Its adjusted earnings per share climbed to $0.08 from $0.02.

• [By Matt Brownell]

  Getty Images Not all is happy in McDonaldland. McDonald's reported its first-quarter earnings Friday morning, and while profit rose slightly, comparable-store sales in the U.S. fell 1.2%. Things were even worse abroad, with comparable sales in Asia, the Middle East and Africa falling 3.3%. In a statement accompanying the filing, McDonald's (MCD) CEO Don Thompson cited "global economic headwinds" and a "challenging eating-out environment." The poor sales don't come as a complete shock. While the company reported improved profits in the fourth quarter of 2012, it also saw sales decline in key foreign markets and dealt with a drop in operating profit margins. Though popular, the McRib barbecue sandwich can't solve all of the chain's problems. So in recent months, McDonald's has introduced Chicken McWraps in a bid to stimulate sagging sales. But franchisees recently complained that the sandwiches took too long to prepare. And the company is also confronting the fact that customer-service issues are rampant at its franchises: According to one report, McDonald's officials told franchisees that "service is broken." QSR Magazine, an industry trade publication, found that the average wait time at the McDonald's drive-through window was a full minute slower than at rival Wendy's (WEN). McDonald's stock dropped by more than 2 percentage points to $99.76 a share in pre-market trading.

  Tucked away at the McDonald's C.O.B. — or Campus Office Building — is the test kitchen, where the fast food chain comes up with all sorts of products.

• [By Michael Flannelly]

  Argus Research upgraded fast food restaurant operator The Wendy’s Co (WEN) on Thursday, noting that the company’s store remodeling and new menus should help drive higher sales.

  The analysts upgraded WEN from “Hold” to “Buy” and see shares reaching $10. This price target suggests a 21% upside to the stock’s Wednesday closing price of $8.25.

  Wendy’s shares were up 24 cents, or 2.91%, during early morning trading on Thursday. The stock is up 54.19% year-to-date.

Top Medical Stocks To Invest In 2014: Kohl's Corporation(KSS)

Kohl?s Corporation operates department stores in the United States. The company?s stores offer private and exclusive, as well as national branded apparel, footwear, and accessories for women, men, and children; soft home products, such as sheets and pillows; and housewares primarily to middle-income customers. As of January 29, 2011, it operated 1,089 stores in 49 states. The company also offers on-line shopping on its Web site at Kohls.com. Kohl?s Corporation was founded in 1962 and is headquartered in Menomonee Falls, Wisconsin.

Advisors' Opinion:

• [By Ben Levisohn]

  Its strong day has also helped boost other retailers.�Kohl���(KSS), for instance, has gained 1.4% to $55.51, while�Macy���(M) has risen 1.1% to $45.40. Sears Holdings�(SHLD), however, has dropped 1% to $55.34.

• [By Ben Levisohn]

  On a relatively quiet day for retailer, shares of J.C. Penney have fallen 3.8% to $6.77, but are still above their recent lows. Kohl���(KSS), meanwhile, has edged up 0.1% to $54.93,�Macy���(M) has risen 0.4% to $44.72 and�Sears Holdings�(SHLD) has gained 0.6% to $55.97.

5 Best Cheap Stocks To Invest In 2014: UnitedHealth Group Incorporated(UNH)

UnitedHealth Group Incorporated provides healthcare services in the United States. Its Health Benefits segment offers consumer-oriented health benefit plans and services to national employers, public sector employers, mid-sized employers, small businesses, and individuals; and non-employer based insurance options for purchase by individuals. It also provides health and well-being services for individuals aged 50 and older; and for services dealing with chronic disease and other specialized issues for older individuals, as well as health plans for the beneficiaries of acute and long-term care Medicaid plans. This segment offers its services through a network of 730,000 physicians and other health care professionals, and 5,300 hospitals. Its OptumHealth segment provides health, financial, and ancillary services and products that assist consumers through personalized health management solutions; benefit administration, and clinical and network management; health-based financi al services; behavioral solutions; and specialty benefits, such as dental, vision, life, critical illness, short-term disability, and stop-loss product offerings. The company?s Ingenix segment offers database and data management services, software products, publications, consulting and actuarial services, business process outsourcing services, and pharmaceutical data consulting and research services. Its Prescription Solutions segment provides integrated pharmacy benefit management services comprising retail network pharmacy contracting and management, claims processing, mail order pharmacy services, specialty pharmacy, benefit design consultation, rebate contracting and management, drug utilization review, formulary management programs, disease therapy management, and adherence programs to employer groups, union trusts, managed care organizations, Medicare-contracted plans, Medicaid plans, and third party administrators. The company was founded in 1974 and is based in Minne tonka, Minnesota.

Advisors' Opinion:

• [By Dan Caplinger]

  Understanding Aflac
  Aflac has done an excellent job of carving out a lucrative niche for itself in the U.S. insurance industry, with its focus on supplemental insurance that provides additional coverage beyond what traditional carriers provide. For instance, major health insurers UnitedHealth (NYSE: UNH  ) and WellPoint (NYSE: WLP  ) offer broad-based insurance coverage that forces them to take on a huge amount of risk and almost eliminates their ability to customize policies to respond to changes in demand for certain services. That reduces their opportunity to shift their business focus to capitalize on changing trends. By contrast, Aflac can target more lucrative niche offerings, such as coverage for cancer and other specified diseases, accident coverage, and short-term disability policies. Moreover, with such finely carved-out coverage, it's easier for Aflac to adjust rates to reflect specific loss experience.

• [By Ben Levisohn]

  Managed care companies could have a tough 2014, says Morgan�Stanley, as they navigate the reforms hitting healthcare. Its advice: Look for diversification in stocks like�Cigna�(CI),�UnitedHealth�(UNH) and�Aetna�(AET).

• [By Travis Hoium]

  UnitedHealth Group (NYSE: UNH  ) was up 6.8% this week to lead the Dow. On Monday, an analyst projected that United Health would be able to grow Medicare Advantage enrollment despite reimbursement cuts. After concerns about government cuts hit health-care companies in early 2013, there's now growing understanding that Obamacare or cuts to Medicare won't slash profits. One of the reasons is the insurance lobby, which has been able to bend policy to make sure companies like UnitedHealth are still posting solid profits. ��

5 Best Cheap Stocks To Invest In 2014: AeroVironment Inc.(AVAV)

AeroVironment, Inc. designs, develops, produces, and supports unmanned aircraft systems (UAS), and efficient energy systems for various industries and governmental agencies. Its UAS provide intelligence, surveillance, and reconnaissance, including real-time tactical reconnaissance, tracking, combat assessment, and geographic data to the small tactical unit or individual war fighter. The UAS wirelessly transmit critical live video and other information generated by their payload of electro-optical or infrared sensors directly to a hand-held ground control system, enabling the operator to view and capture images during the day or at night on a hand-held ground control unit. AeroVironment also provides spare equipment, alternative payload modules, batteries, chargers, repair services, and customer support for the UAS. In addition, the company produces industrial productivity and clean transportation solutions for commercial and government customers, develops potential clean t ransportation solutions, and performs contract engineering services; offers PosiCharge electric vehicle charging systems for industrial electric material handling fleets, electric vehicle charging systems for passenger and fleet vehicles, and power cycling and test systems for developers and manufacturers of plug-in electric and hybrid vehicles, as well as battery packs, electric motors, and fuel cells; and supplies power cycling and test systems to research and development organizations that focus on developing electric propulsion systems, electric generation systems, and electricity storage systems. It supplies its UAS primarily to the organizations within the United States department of defense. AeroVironment, Inc. was incorporated in 1971 and is headquartered in Monrovia, California.

Advisors' Opinion:

• [By Lauren Pollock]

  AeroVironment Inc.'s(AVAV) fiscal second-quarter profit fell 81% on a sharp decline in revenue and margins. However, shares were up 4.4% at $28.10 in premarket trading as the maker of pilotless drones and rechargeable-batteries reported adjusted earnings and revenue that topped expectations.

• [By Chris Hill]

  In this installment of Investor Beat, Andy and Jason explain why they're keeping a close eye on shares of AeroVironment (NASDAQ: AVAV  ) and Barnes & Noble (NYSE: BKS  ) .

• [By Travis Hoium]

  It's not easy being a government supplier these days. Small-drone manufacturer AeroVironment (NASDAQ: AVAV  ) is finding that out ��� terrible fiscal fourth quarter has to give investors pause about the company's growth.

Legg Mason Down to Underperform - Analyst Blog

On Jul 10, 2013, we downgraded our recommendation on Legg Mason Inc. (LM) to Underperform from Outperform. Our decision was based on the company's high level of net asset outflows.

Why the Downgrade?

Legg Mason is scheduled to announce fiscal first-quarter 2014 results on Jul 25. Notably, the company's activities during the quarter did not win analysts' confidence. As a result, the Zacks Consensus Estimate for the quarter has moved down 3.6% to 80 cents over the last 30 days. Additionally, the earnings ESP (Read:Zacks Earnings ESP: A Better Method) for the quarter is -2.50%. This, along with its Zacks Rank #5 (Strong Sell), reduces the company's chances of a positive earnings surprise.

Further, the likelihood of a downward estimate revision was more obvious for fiscal years 2014 and 2015. The Zacks Consensus Estimate went down 1.4% to $3.42 per share for 2014 and 0.5% to $3.93 per share for 2015 over the same time frame.

Moreover, Legg Mason's fiscal fourth-quarter 2013 adjusted earnings lagged the Zacks Consensus Estimate.The earnings miss was primarily due to higher expenses.

The company's initiatives to improve profitability through adding innovative product solutions to client bases, tapping potential investment capacities, expanding distribution relationships and undertaking cost-saving measures are commendable. However, a sluggish economic recovery and net asset outflows remain plausible concerns. Hence, an improvement in the overall profitability might be limited in the near term.

Other Stocks to Consider

Even though we are not optimistic about Legg Mason's earnings, there are many financial companies that are likely to beat earnings this quarter. Here are some stocks that are worth a look as our model shows them to have the right combination of elements to post an earnings beat this quarter:

Prosperity Bancshares Inc. (PB), with earnings ESP of 1.14% and a Zacks Rank #2 (Buy).

First Horizon National Corporation (FH! N), with earnings ESP of 5.26% and a Zacks Rank #3 (Hold).

Fifth Third Bancorp (FITB), with earnings ESP of 2.27% and a Zacks Rank #3.

Can Pandora Achieve Profitability This Year?

Pandora's (NASDAQ:P) stock has taken a wild ride since 2011, debuting in the hottest IPO market since the dot-com era. Shares have risen around 15 percent since the stock's initial offering of $16, but the price has climbed almost 100 percent over the past year. Is Pandora poised for long-term success, or has its run in the past year been too good to be true? Let's use our CHEAT SHEET investing framework to decide whether Pandora is an OUTPERFORM, WAIT AND SEE, or STAY AWAY.

C = Catalysts for the Stock's Movement

Pandora announced its first-quarter earnings at the end of May. While the company posted a net loss of $0.16, the company reported total revenue of $125.5 million, up 55 percent from the previous year's quarter. The company announced that subscribers to its Pandora One premium service increased by 700,000, surpassing the 2.5-million mark. Additionally, Pandora reported that advertising revenue grew 49 percent. However, content costs grew 48 percent, while marketing and R&D costs increased a combined 75 percent. Mobile revenue growth was a bright spot in Pandora's earnings, almost doubling to $83.4 million. For the most part, analysts remain optimistic that Pandora's profitability will improve over the next several quarters.

The stock has felt downward pressure in the past few weeks after Apple (NASDAQ:AAPL) announced that it would launch a streaming radio service of its own called iRadio. Google (NASDAQ:GOOG) also recently debuted its awkwardly named Google Play Music All Access, but many of Pandora's core users will not leave for the Google music app because of switching costs — Google's service costs $9.99 per month. It has yet to be seen what sort of competitive advantage iRadio will bring to the marketplace. Obviously, as part of the Apple ecosystem, iRadio will be easy to use with all Apple products. Additionally, Apple's presence may cause Pandora's marketing costs to rise even more in order to preserve its market share.

E = Earnings are Decreasing Quarter-Over-Quarter

Despite reporting revenue growth of 55 percent in the last quarter, Pandora has experienced significant earnings per share decreases in the last two quarters. After trading publicly for more than two years now, Pandora should be starting to show investors growth in earnings, not just in revenue and subscribers. After all, it is earnings that determine a stock's long-term success, not revenue.

Analysts do estimate that Pandora will generate positive earnings in the next several quarters, culminating with $0.28 in earnings per share in the first quarter of Pandora's fiscal year 2015 (really, the first quarter of 2014). However, even with these optimistic and uncertain earnings, Pandora trades at a forward price-to-earnings ratio of 65.88 — about four-and-a-half times greater than that of the S&P 500. Pandora's fundamentals are starting to look a bit like a doomed tech stock during the dot-com bubble: high revenue growth with flat or negative earnings growth. Pandora will need to become profitable soon or investors will be running for the door.

	2014 Q1	2013 Q4	2013 Q3	2013 Q2	2013 Q1
Qtrly. EPS	-$0.16	-$0.09	$0.01	-$0.03	-$0.12
EPS Growth QoQ	-77.78%	-10.00%	133.33%	75.00%	-140.00%
Profit Margin	-11.64%	1.71%	-5.35%	-25.04%	-10.06%

T = Technicals are Strong on the Chart

Pandora is currently trading around $18.40, well above both its 200-day moving average of $13.66 and its 50-day moving average of $16.60. The stock has been experiencing a strong uptrend since last year — much of the growth fueled by reports of its growing subscriber base. Pandora's relative strength index level is right around 80, implying that the stock is overbought at the previous moment: It could be poised for a pullback. Additionally, 30.8 percent of Pandora's shares are held as shorts. Pandora recently hit a fresh 52-week high of $20.54 on Monday.

Conclusion

It is hard to argue that Pandora Radio isn't a great product. The company's patented Music Genome Project that fuels its song-picking engine will be hard to outdo, even with the brainpower over at Apple and Google. From a technical perspective, the stock has performed well in the past year, but Pandora has not shown that its business model is profitable in the longer term. Its negative earnings per share figures in four of the past five quarters are worrisome, and it is pricey given its future earnings, which may or may not materialize. As competition in the Internet radio landscape intensifies, Pandora will have to ramp up its marketing and R&D budgets even further, causing its margins to erode. While Pandora offers a great product, it is not growing fast enough to offset its expenses. Until the company demonstrates several quarters of profitability, Pandora is a STAY AWAY.

Edmunds: Try placing trust in your staff

Hello, Gladys, I consider myself successful in my business. I own a temporary employment agency and I haven't been on vacation in 10 years. The reason is, I can't be comfortable when I'm not in my office. It's ironic my company is very good at matching temps to employers, but I can't seem to find good people to work for me. I spend most of my day putting out fires that my staff presents me with. It's just one thing after the other. I often have to oversee or at least double-check their work. And in most cases it has to do with customer satisfaction. Do you have any suggestions? -- Jon

You seem to be micromanaging, and that can be counterproductive to business success.

Your hiring procedures should be consistent with your business visions and objectives. Before interviewing people, have you made a list of the qualities that you need in the hire? Are you asking for references to support the qualifications claimed by the applicant? Are your new hires clear on what is expected of them? Taking the time to address these things along with anything else that can be beneficial to your company is crucial.

If you find that there is nothing wrong with your people when you hire them, then we can assume that the problem starts after they have been hired. Therefore it is time to look at how your management style. I have often told the story about my father never allowing my brothers to mow the lawn when we were kids because my dad believed that my brothers could not do the good job that he could do himself. On the few times that he allowed one of my brothers to mow the grass or cut the hedges he would stand over them like a hawk and yell out instructions on how he wanted it done.

STRAUSS: Empower your employees

My husband used to micromanage the repairman that he called in to make a home repair of some sort. He would watch their every move while asking a bunch of questions and periodically throwing in a few suggestions. Never mind that he knew nothing about the repairs being! performed.

This kind of behavior can scare a person out of their wits and force them to become defensive or let you do their job. And, it can work on your nerves as well. I know how difficult it can be. Try backing off a bit and let your employees have a little responsibility of their own. Many entrepreneurs feel that if the job is to be done right they will have to do it themselves.

This belief can also find its way into other aspects of the entrepreneur's life. I volunteered to be on a fundraising committee for an organization. The chairperson was an entrepreneur. She wanted to micromanage how each of us approached our prospects for a contribution. Meanwhile she had never done charitable fundraising herself. And her constant nagging and demanding to be told step-by-step each thing we did or said was annoying.

Try letting your staff to do their own work. Make them feel like a part of your company by backing off and trusting them a little more. Those employees who actually can't handle responsibility will most likely leave on their own; otherwise you can feel comfortable in letting them go. Hold regular meetings that focus on the kind of training that is consistent with goals and/or your company mission statement. You will probably be pleasantly surprised. Employees who are made to feel like a real part of the company will take pride in their work. They will also feel free to express their ideas and suggestions that can help your company to grow.

A final point: Expect the best from your staff and let them know they are capable of performing with excellence. And you will most likely get it.

Gladys Edmunds, founder of Edmunds Travel Consultants in Pittsburgh, is an author and coach/consultant in business development. Her column appears Wednesdays. E-mail her at gladys@gladysedmunds.com. An archive of her columns is here. Her website is gladysedmunds.com.

Why Nash-Finch and Spartan Stores Popped

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

What: Shares of Nash-Finch (NASDAQ: NAFC  ) and Spartan Stores (NASDAQ: SPTN  ) jumped as much as 16% and 15%, respectively, after Spartan said it would buy Nash-Finch, primarily for its military stores.

So what: Spartan will pay approximately $312 million in the all-stock transaction, as Nash-Finch shareholders will get 1.2 Spartan shares for every Nash-Finch share they own. The deal will give it a food distribution business as well as a stronghold in military retail, covering commissaries in 37 states and exchanges in foreign countries. Notably, the deal didn't give a premium for Nash shares, but it will become more valuable if Spartan shares continue to rise. The deal is expected to close by the end of the year, and management said it should enable $50 million in cost savings by its third year.

Now what: With the steady stream of consolidation in the grocery industry, it's easy to see why the market views the deal as a win-win. It will strengthen Spartan's presence in the Upper Midwest as well as giving it access to the military market. Shares cooled off after the initial pop to finish up between 3% and 4%, which seems more reasonable, as the earlier 16% spike was probably exaggerated for an acquisition without a premium. Look for these two stocks to travel in tandem from now until closing, as the value of Nash shares is now tied to Spartan.  

1 Million Facebook Advertisers Are Oh So Wrong

Facebook  (NASDAQ: FB  )  recently announced it has reached 1 million advertisers significant. At least one commentator believes the social media giant may have gone too far with its effort to monetize its user base. Online advertising represents a delicate balance between the value provided to the advertiser and the tolerance and interest of the user.

In the video below, Fool.com contributor Doug Ehrman discusses the milestone for Facebook and the importance of finding a level of ad saturation that communicates the message without overly annoying users.

Though Facebook may have gone too far, social media continues to have huge potential. This incredible tech stock is growing twice as fast as Google and Facebook, and more than three times as fast as Amazon.com and Apple. Watch our jaw-dropping investor alert video today to find out why The Motley Fool's chief technology officer is putting $117,238 of his own money on the table, and why he's so confident this will be a huge winner in 2013 and beyond. Just click here to watch!

Is Sturm, Ruger's New Plant a Bad Idea?

On Monday, Sturm, Ruger (NYSE: RGR  ) announced the pending purchase of its third manufacturing plant, representing the gunmaker's first major expansion in more than 25 years.

The 220,000-square-foot building, which is expected to be finished by August, will stand as Sturm, Ruger's third facility.

So why is Sturm, Ruger expanding its manufacturing capabilities now?

If you build it, they will come ...
Remember, in April, the company told us its first-quarter earnings rose 53% year over year, driven by a 39% revenue increase over the same period as well as improved operational efficiency.

Even so, while Sturm, Ruger spent $7.7 million last quarter developing new products and expanding production capacity, demand for its weapons continued to outstrip supply as sell-through with distributors was effectively capped by its limited first-quarter production capabilities.

And Sturm, Ruger certainly isn't alone trying to manage this enviable problem; last month, fellow firearms manufacturer Smith & Wesson (NASDAQ: SWHC  ) sealed a record year with its solid fiscal fourth-quarter earnings report. In fact, Smith & Wesson's own 38% quarterly sales growth stood nearly identical to Sturm, Ruger's most recent revenue increase, while Smith & Wesson's net income rose an even more impressive 63%.

Party like it's 2013
However, while most industry executives believe this surge in demand should still have some steam left in the tank, it's safe to say it certainly won't last forever.

In fact, that's why Smith & Wesson CEO James Debney reassured investors during his company's last earnings conference call that it's being careful about building out its own manufacturing capacity, adding it only where the company believes "it is appropriate, and with a focus on balancing internal capacity expansion with the outsourcing of selected components."

In Debney's words, then -- and as I also noted at the time -- this affords Smith & Wesson the flexibility to fulfill this demand while "providing a layer of insulation should the markets soften."

By contrast, Sturm, Ruger's new manufacturing plant is decidedly more permanent.

And therein lies the rub: From an investor's standpoint, we can't forget there's risk involved, as Sturm, Ruger could be overbuilding its manufacturing facilities only to watch demand for its products taper off.

Then again ...
It's also quite possible Sturm, Ruger got a great deal on the property and that the financial outlay may not be all that significant. After all, the company did already tell investors it planned to spend a total of $30 million in capital expenditures by the end of this year, and as of the end of last quarter, it had no debt with cash and equivalents of $45.6 million on its balance sheet. What's more, Sturm, Ruger also managed to generate $30.4 million in cash from operations during last quarter alone.

In addition, remember that new products represented around 35% of all Sturm, Ruger's firearm sales last quarter, so it's obvious consumers are responding well to the company's latest offerings. As a result, if Sturm, Ruger is managing to take market share from its competitors, it's possible the company could still make use of the new facility even after today's record demand wanes.

In the end, then, over the short term this seems like a great idea, but long-term investors would be wise to keep an eye on firearms industry demand to see how it affects Sturm, Ruger's distributor inventory levels.

But what do you think? Is Sturm, Ruger's new manufacturing plant purchase a bad idea? Feel free to weigh in using the comments section below.

More expert advice from The Motley Fool
Of course, this demand for firearms largely picked up just before the most recent presidential elections, and much else has also happened to affect our lives since then. Obamacare, for instance, will undoubtedly have far-reaching effects. The Motley Fool's new free report "Everything You Need to Know About Obamacare" lets you know how your health insurance, your taxes, and your portfolio could be affected. Click here to read more. 

Why Medivation Shares Retreated

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

What: Shares of biopharmaceutical company Medivation (NASDAQ: MDVN  ) sank as much as 11% after rival Johnson & Johnson (NYSE: JNJ  ) announced it was purchasing Aragon Pharmaceuticals to get ahold of its experimental advanced prostate cancer drug, ARN-509.

So what: Johnson & Johnson has agreed to purchase Aragon for $650 million with the potential for up to $350 million in additional milestone payments. ARN-509 is a currently in mid-stage trials and is considered a potential rival to Medivation's metastatic prostate cancer drug, Xtandi. Weighing in on today's actions, Citigroup analyst Yaron Werber noted concerns for Medivation, but also opined that J&J's purchase of ARN-509 is likely an indication that it expects the prostate cancer market to expand with its own FDA-approved prostate cancer drug, Zytiga, also in the same space.

Now what: Personally, I'd call today's move lower a gross overreaction. ARN-509 still has plenty to prove in clinical trials, and it'll be years before it makes it to market. In the meantime, Xtandi was approved in the U.S. three months ahead of its PDUFA date, it received approval in Canada two weeks ago, and it gained a positive view from the European Medicine Agency's panel. There is plenty of room for growth from Xtandi over the coming years, especially with prostate cancer being the most-diagnosed cancer of them all in the U.S. In sum, I wouldn't let J&J's purchase change your investing thesis on the company.

Craving more input? Start by adding Medivation to your free and personalized watchlist so you can keep up on the latest news with the company.

Involved in everything from baby powder to biotech, Johnson & Johnson's critics are convinced that the company is spread way too thin. If you want to know if J&J is nothing but a bloated corporate whale -- or a well-diversified giant that's perfect for your portfolio -- check out The Fool's new premium report outlining the Johnson & Johnson story in terms that any investor can understand. Claim your copy by clicking here now. 

Corporate profit outlook is weak, getting weaker

Corporate profits are tracking at about a third of original expectations and trending lower, setting up a potentially rough ride when reporting season begins next week.

Earnings for companies on the S&P 500 stock index are expected to grow just 3.5% on a quarterly basis, a number that on its face appears consistent with trends but is well below the lofty projections set earlier this year.

So while the stock market obsesses over the debt drama in Washington, a bigger concern could be the dimming prospects for corporate balance sheets.

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Not only have earnings per share estimates dropped, but companies and analysts also are taking an increasingly pessimistic view of profits, with negative revisions in the past two quarters at their highest levels in more than a decade.

"As we approach third quarter earnings season, the ratio of negative-to-positive guidance remains elevated, despite being lower than last quarter, as companies continue to reduce analyst expectations," Adam Parker, managing director at Morgan Stanley, said in a note to clients. "We would be surprised to see a rash of negative pre-releases next week. Nonetheless, estimates have further to fall."

The revisions scorecard so far looks pretty ominous.

Some 104 companies in the S&P 500 have reported guidance, with 65 negative, 23 positive and 16 in line with analyst expectations, according to S&P Capital IQ. That 2.9-to-1 ratio of negative surprises is above the 10-year average. The first third-quarter results to trickle in show 59% of the 17 companies beating estimates.

As for revenue, the picture is slightly better.

Top-line growth for the stock market index is expected to be 4.8% after barely rising in the second quarter.

In sectors, S&P Capital IQ projects telecom to be the biggest gainer in EPS at 26.2%, while financials should lag with a drop of! 2.7%. Consumer discretionary is expected to post a 20.6% revenue gain, while telecom, despite its big profit boost, is projected to show a revenue decline of 10.4%.

This will mark the first quarter that Alcoa will not constitute the traditional kickoff of earnings season. No longer a Dow component, Alcoa will make way for JPMorgan Chase to get things started Oct. 11.

"Common headwinds include a pickup in interest rates during the second half of the quarter, a resulting strengthening in the value of the U.S. dollar, an increase in oil prices following the flare up of tensions with Syria, as well as a weaker-than-expected increase in (second-quarter gross domestic product) as a result of the unresolved sequestration," Sam Stovall, S&P Capital IQ's chief equity strategist, said in a report.

At the beginning of the year, analysts expected third-quarter earnings to grow 9.84%. The story was similar for the second quarter, when 8.9% EPS growth projections on Jan. 2 far outstripped the 4.87% reality.

Of course, the market has paid the lackluster earnings little attention.

At a time when full-year earnings growth is projected to be 6%, the S&P 500 has soared more than 18%. Investors have focused far more on whether the Federal Reserve is keeping the cheap-money spigot open than whether profits are keeping pace.

Follow Cox @JeffCoxCNBCcom on Twitter.

© CNBC is a USA TODAY content partner offering financial news and commentary. Its content is produced independently of USA TODAY.

Tackling Cancer: Leukemia's Biggest Current and Upcoming Players

As I noted 11 weeks ago, cancer statistics are both staggering and disappointing. Although cancer deaths per 100,000 people have been on the downswing since 1991 thanks to access to more effective medications and better awareness about the negative health effects of smoking, there is still a lot of research and progress yet to achieve. My focus in this 12-week series is to bring to light both the need for continued research in these fields, as well as highlight ways you can profit from the biggest current and upcoming players in each area.

Over the past 10 weeks, we've looked at the 10 cancer types most expected to be diagnosed this year:

Prostate cancer Breast cancer Lung cancer Colorectal cancer Melanoma Bladder cancer Non-Hodgkin's lymphoma Thyroid cancer Kidney cancer Endometrial cancer

Today, we'll turn our attention to the projected 11th-most diagnosed cancer: leukemia.

The skinny on leukemia
This year, nearly 49,000 new cases of leukemia are expected to be diagnosed. While that's well below some of the previous cancer's we've examined, the virulence of leukemia -- which is a cancer of the bone marrow or blood -- is higher than many we've reviewed in recent weeks. Leukemia is forecast to claim close to 24,000 lives this year, which makes it the sixth-deadliest cancer for both men and women.

There are four primary types of leukemia: acute lymphocytic leukemia (ALL), which is a cancer that starts from white blood cells called lymphocytes and is most common among children; acute myeloid leukemia (AML), which is a cancer usually found in adults where the bone marrow makes abnormal myeloblasts; chronic myeloid leukemia (CML), which is where the bone marrow makes too many white blood cells; and chronic lymphocytic leukemia (CLL), which is the most common adulthood leukemia and causes a slow increase in white blood cells called B lymphocytes, which helps spread cancer.

Although early stage detection really doesn't exist unless you're already presenting symptoms (fatigue, paleness, weight loss, bruising easily, etc.) or happen to be in the right place at the right time and are diagnosed during a blood test, the curability and severity of symptoms depends on which of these four diseases you have. Five-year survival rates for all leukemias have increased dramatically, from 34% in 1975-1977 to 58% as of 2002-2008, according to the American Cancer Society (links opens PDF file), but some offer better hope than others. As the ACS notes, those with CLL have an 82% chance of five-year survival, whereas AML patients have just a 25% chance.

Sources: Surveillance, Epidemiology, and End Results Program and the National Center for Health Statistics. 

The risk factors associated with leukemia are just as varying as the statistics with regard to five-year survival. Cigarette smoking, for instance, is a big risk factor for AML, while the probability of CLL has a lot to do with the genetics in your family. One common theme that appears to be a risk factor across all types of leukemia is radiation exposure -- especially through the course of receiving chemotherapy or treating an existing cancer.

Where investment dollars are headed
Although there are numerous medications targeting leukemia, we'll stick to these four most common types listed above. Here's a look at some of the most common therapeutic agents used to treat leukemia.

Sprycel: Developed by Bristol-Myers Squibb, Sprycel was approved in 2006 as a second-line treatment for patients who had Philadelphia chromosome-positive (Ph+) ALL or Ph+ CML, and had resistance to prior therapy. In trials, 42% of patients with Ph+ ALL showed a complete or partial response while taking the drug and it delivered a median response time of 4.8 months.  Gleevec: Marketed by Novartis, Gleevec is also a secondary treatment used to treat Ph+ ALL and CML in patients who haven't responded to previous treatments. More recently, Gleevec was granted FDA approval to treat children with Ph+ ALL, which is an important win for Novartis because, as I mentioned, ALL is the most common form of leukemia in children. Gleevec is part of a class of drugs known as tyrosine kinase inhibitors that blocks a protein crucial for cancer cell development.  Iclusig: Approved by the FDA this past December on an accelerated approval basis and developed by Ariad Pharmaceuticals (NASDAQ: ARIA  ) , Iclusig is also approved to treat Ph+ ALL and Ph+ CML. In trials, 54% of patients experienced a major cytogenetic response that had chronic phase CML, while 41% of patients with Ph+ ALL were noted as having a major hematologic response with a median duration time of 3.2 months. Iclusig does come with a black box warning label, though, that arterial thrombosis and liver toxicity have occurred to patients while on the drug. Bosulif: Also approved recently (back in September) and developed by Pfizer (NYSE: PFE  ) , Bosulif is a tablet that targets Ph+ CML in patients with resistance or intolerance to prior treatments. In trials, of those with chronic phase CML, nearly 34% received a major cytogenetic response. Even more impressive, 53.4% of all patients had a major cytogenetic response if they'd previously taken a tyrosine kinase inhibitor, with more than half of these patients demonstrating a response time in excess of 18 months. Erwinaze: Now owned by Jazz Pharmaceuticals via its purchase EUSA Pharma, Erwinaze is more a symptom-treating therapy than a curative agent. Erwinaze is approved for patients with ALL that have developed hypersensitivity to E-coli-derived asparaginase and was given the thumbs up by the FDA based on a single clinical trial involving 58 patients.

I could nearly go on all day with the therapies used to treat leukemia, but these are some of the most common branded names. There are also numerous generic treatments used to treat a broad range of leukemias. However, as we've witnessed previously, not every drug trial turns out to be a success. Seattle Genetics (NASDAQ: SGEN  ) , which admittedly has one of the newest and hottest technological capabilities with its antibody-drug conjugates, discontinued its lintuzumab trial in 2010 after it failed to provide a statistical benefit to patients in a mid-stage trial. Even Seattle Genetics' ADC technology, which piggybacks a toxin on an antibody and delivers it directly to cancer cells, isn't a guaranteed winner in this tough-to-treat group of blood-borne diseases.

What's coming down the pipeline
Now that you have a better idea of what's going in in the world of leukemia treatments, let's have a look at some of the clinical-stage therapies that could be changing lives in hopefully the not-so-distant future.

Ibrutinib: There's probably no doubt that Pharmacyclics' (NASDAQ: PCYC  ) Ibrutinib would take the cake as one of the most exciting pipeline candidates. Currently, it's being tested on mantle cell lymphoma (as we saw last month), and the difficult-to-treat CLL. Partnering with Johnson & Johnson's subsidiary Janssen Pharmaceuticals, Ibrutinib delivered a complete or partial response to 71% of treatment-naive CLL patients, with an incredible 96% of those treatment-naive patients showing no disease progression after two years! The 71% response rate blew every other clinical trial on CLL to date out of the water and was good enough to earn Ibrutinib the very rare "breakthrough therapy" designation from the FDA.  Idelalisib (GS-1101): Currently in early stage development by Gilead Sceinces (NASDAQ: GILD  ) , Idelalisib blocks the PI3 kinase delta to inhibit tumor growth and hopefully treat its target patient population: those with CLL. In the wake of the annual American Society of Clinical Oncology meeting in less than two weeks, Gilead reported early data from Idelalisib, and the results were phenomenal. More than half of the 54 patients enrolled exhibited meaningful tumor shrinkage, with median progression-free survival of 17 months. It's certainly an experimental drug worth keeping your eyes on. 

Your best investment
As with the treatments, I could spend an entire day talking about what's coming down the pipeline and still might leave a few dozen potential therapies out. What can definitely be said is that researchers and big pharmaceutical companies are certainly throwing their weight around with regard to research into leukemia.

If you were to look at this from an investing perspective, I think you have some clear-cut winners in this space -- although I'd say picking a favorite might be impossible.

Obviously, both experimental drugs have a lot going for them at the moment. Pharmacyclics has a collaborative partnership with J&J's Janssen that could net it up to $975 million in royalty payments. Ibrutinib has performed splendidly in trials, but it'll certainly need to keep those expectations sky high if it wants to support its already frothy valuation.

Gilead offers promise from its existing pipeline of HIV and hepatitis drugs, but is still a long way away from seeing any bottom-line impact from Idelalisib. Make no mistake about what I'm saying here: I like Gilead a lot -- but any real results from Idelalisib are still years down the road.

I think the most solid play in leukemia is Pfizer. Bosulif, which was approved last year, went head-to-head against Novartis' Gleevec in CML, and returned blood counts in 55% of patients to normal after 48 weeks. Gleevec, during the same period, was effective in normalizing blood counts in 33% of patients. Bosulif offered some of the top progression-free response times and a high cytogenetic response rate, making it the most attractive second-line treatment available -- in my opinion, at least.

Stay tuned next week, when we tackle the current and upcoming therapies for the treatment of pancreatic cancer in this "Tackling Cancer" series.

While you can certainly make huge gains in biotech and pharmaceuticals, the best investing approach is to choose great companies and stick with them for the long term. The Motley Fool's free report "3 Stocks That Will Help You Retire Rich" names stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of. Click here now to keep reading.