Thursday, February 14, 2013

Hain Celestial Group Increases Sales but Misses Revenue Estimate

Hain Celestial Group (Nasdaq: HAIN  ) reported earnings on Feb. 11. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q2), Hain Celestial Group missed estimates on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue grew significantly and GAAP earnings per share increased significantly.

Gross margins were steady, operating margins grew, net margins grew.

Revenue details
Hain Celestial Group reported revenue of $455.3 million. The 12 analysts polled by S&P Capital IQ predicted sales of $472.3 million on the same basis. GAAP reported sales were 25% higher than the prior-year quarter's $364.8 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.72. The 15 earnings estimates compiled by S&P Capital IQ averaged $0.69 per share. GAAP EPS of $0.67 for Q2 were 52% higher than the prior-year quarter's $0.44 per share. (The prior-year quarter included -$0.02 per share in earnings from discontinued operations.)

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 28.7%, about the same as the prior-year quarter. Operating margin was 12.1%, 80 basis points better than the prior-year quarter. Net margin was 6.9%, 140 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $479.8 million. On the bottom line, the average EPS estimate is $0.72.

Next year's average estimate for revenue is $1.74 billion. The average EPS estimate is $2.45.

Investor sentiment
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 591 members out of 607 rating the stock outperform, and 16 members rating it underperform. Among 171 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 168 give Hain Celestial Group a green thumbs-up, and three give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Hain Celestial Group is outperform, with an average price target of $70.14.

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Agnico-Eagle Mines Meets on the Top Line, Misses Where it Counts

Agnico-Eagle Mines (NYSE: AEM  ) reported earnings on Feb. 13. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Agnico-Eagle Mines met expectations on revenues and missed estimates on earnings per share.

Compared to the prior-year quarter, revenue grew and GAAP earnings per share grew.

Gross margins shrank, operating margins increased, net margins grew.

Revenue details
Agnico-Eagle Mines recorded revenue of $466.8 million. The seven analysts polled by S&P Capital IQ expected a top line of $468.5 million on the same basis. GAAP reported sales were the same as the prior-year quarter's.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.41. The 20 earnings estimates compiled by S&P Capital IQ predicted $0.45 per share. GAAP EPS were $0.48 for Q4 compared to -$3.53 per share for the prior-year quarter.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 48.1%, 190 basis points worse than the prior-year quarter. Operating margin was 23.1%, 20,240 basis points better than the prior-year quarter. Net margin was 17.7%, 14,970 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $465.4 million. On the bottom line, the average EPS estimate is $0.49.

Next year's average estimate for revenue is $1.98 billion. The average EPS estimate is $2.36.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 1,115 members out of 1,198 rating the stock outperform, and 83 members rating it underperform. Among 226 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 193 give Agnico-Eagle Mines a green thumbs-up, and 33 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Agnico-Eagle Mines is hold, with an average price target of $59.57.

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10 Great Reasons to Talk With Clients Now

A new year can be a fresh start for wealth managers and their clients. Opening conversations set the tone for the New Year and getting clients to focus on their finances early can help them in myriad ways.

RegentAtlantic Capital Wealth Manager Jane Newton works with the already investment savvy: senior-level women on Wall Street. But they, too, benefit from a hand with putting their “financial house in order,” according to an announcement Feb 8. Newton has developed a list of “10 must do’s,” to help her clients to achieve fiscal “fitness.” She advises clients to: “Invest in yourself early in the New Year so you can focus the rest of the year on the things that really matter to you,” according to the release.

Newton has a web site that’s dedicated to her clients and runs a “Wall Street Women Forum” –an invitational event just for this special group. But the advice Newton provides is important for both sexes.

These are among those basic planning 101 conversations that are important for every client, and because things change: tax and gift and estate laws; work and family situations, type of compensation; retirement planning; kids off to school—these are conversations advisors don’t just have once with clients.   

Newton invites clients to discuss the following: 

  • “Take stock of your current financial situation:” Assets, liabilities and all the details.
  • “Give your portfolio a checkup:" Revisit "asset allocation.”
  • “Minimize investment expenses to maximize what you keep” 
  • “Diversify away from employer-related stock”
  • “Minimize income taxes”
  • “Consider a Roth IRA Conversion” 
  • “Reduce and refinance your debt”
  • “Review your will and estate plan” 
  • “Protect your nest egg” 
  • “Check your credit history”
  • For details see Newton’s “New Year’s Countdown to Financial Fitness.”

    Oceaneering International Beats on Both Top and Bottom Lines

    Oceaneering International (NYSE: OII  ) reported earnings on Feb. 13. Here are the numbers you need to know.

    The 10-second takeaway
    For the quarter ended Dec. 31 (Q4), Oceaneering International beat expectations on revenues and beat expectations on earnings per share.

    Compared to the prior-year quarter, revenue grew significantly and GAAP earnings per share grew significantly.

    Gross margins shrank, operating margins grew, net margins increased.

    Revenue details
    Oceaneering International booked revenue of $780.9 million. The 15 analysts polled by S&P Capital IQ hoped for net sales of $738.0 million on the same basis. GAAP reported sales were 36% higher than the prior-year quarter's $574.2 million.

    Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

    EPS details
    EPS came in at $0.74. The 19 earnings estimates compiled by S&P Capital IQ predicted $0.72 per share. GAAP EPS of $0.74 for Q4 were 40% higher than the prior-year quarter's $0.53 per share.

    Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

    Margin details
    For the quarter, gross margin was 22.1%, 70 basis points worse than the prior-year quarter. Operating margin was 15.2%, 80 basis points better than the prior-year quarter. Net margin was 10.3%, 10 basis points better than the prior-year quarter.

    Looking ahead
    Next quarter's average estimate for revenue is $704.7 million. On the bottom line, the average EPS estimate is $0.65.

    Next year's average estimate for revenue is $3.13 billion. The average EPS estimate is $3.22.

    Investor sentiment
    The stock has a five-star rating (out of five) at Motley Fool CAPS, with 789 members out of 802 rating the stock outperform, and 13 members rating it underperform. Among 171 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 165 give Oceaneering International a green thumbs-up, and six give it a red thumbs-down.

    Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Oceaneering International is outperform, with an average price target of $63.31.

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    Is an Apple TV Event Just Around the Corner?

    Talk about Apple's (NASDAQ: AAPL  ) mythical TV set has somewhat subsided in recent months as investors have turned their attention to possible iPhone deceleration and new rumors about a potential iWatch in the works. Let's talk TV.

    Jefferies analyst Peter Misek now believes that Apple is preparing to host a TV-centric event in March. That's just around the corner!

    Hold your horses
    Before you get too excited, Misek doesn't believe this event will be the long-awaited unveiling of the new product. Instead, the analyst thinks that Apple will focus on getting developers on board to a TV platform by release a software development kit, or SDK, geared for Apple TV. Apps on TVs are the inevitable progression of the platform wars, and Apple has surprisingly not opened up its current Apple TV platform to third-party developers.

    Meanwhile, Google (NASDAQ: GOOG  ) already has a relatively larger catalog of apps that are optimized for its Google TV platform. The search giant currently offers three different devices through hardware partners in order to boost the platform. Even Intel (NASDAQ: INTC  ) has now officially confirmed that it is working on an Internet TV service, complete with apps. The chip giant was rumored to unveil a TV service at CES in January, but supposedly ran into some last-minute delays.

    Ramping up content to bolster the platform ahead of an official product launch is the best way for Apple to balance its penchant for secrecy with its broader strategy. Not only will the company need to work through difficult negotiations with traditional content providers, but growing its TV app catalog will also be critical, especially in categories like games, since iOS has become a robust gaming platform.

    Thus far, Apple has only partnered with a select number of third parties to bring video services to the platform, such as Netflix, Hulu, and The Wall Street Journal, among a few others. Amazon.com is still nowhere to be found with its Instant Video service, even as the e-tailer offers several of its content services on other Apple platforms, mobile competition aside.

    Apple can also maintain the facade that the SDK is intended for its current set-top box device, which is due for an incremental upgrade. The last one was introduced in March 2012 with an A5 processor, and a new model recently made its way through the FCC's regulatory hurdles carrying a beefier A5X chip and newer Broadcom�BCM4334 combo chip (the same one found in the iPhone 5).

    Releasing an Apple TV SDK now will give the company a head start on growing its app catalog and it can maintain reasonable doubt that it has nothing else up its sleeve. But investors know better.

    iTV could become bigger than Apple circa 2010
    Misek's checks point to a full-blown iTV launch later this year, likely in the September to October time frame. The rumored device may be priced in the neighborhood of $1,500 and have a 42-inch to 55-inch screen. The iTV will likely carry lower gross margin compared to Apple's corporate average, but that's inevitable considering the economics of the TV business, which has always been plagued by long upgrade cycles, low margins, and increased inventory risk.

    That's pretty close to Morgan Stanley analyst Katy Huberty's predictions; she thinks the iTV will fetch an average selling price of $1,300. Eventually, Huberty is modeling for the TV business to generate $68 billion in revenue annually and generate earnings per share of $18. For context, that would be more revenue and profit than the entire company did as recently as fiscal 2010.

    Have no fear
    Investors shouldn't worry too much about lower gross margins on a TV because the device's strategic importance lies more in its ability to bolster the broader ecosystem and widen the "halo" around all of Apple's products.

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    This Just In: Upgrades and Downgrades

    At The Motley Fool, we poke plenty of fun at Wall Street analysts and their endless cycle of upgrades, downgrades, and "initiating coverage at neutral." Today, we'll show you whether those bigwigs actually know what they're talking about. To help, we've enlisted Motley Fool CAPS to track the long-term performance of Wall Street's best and worst.

    Is this the end of smartphones?
    On CNBC's Fast Money last night, analysts were all in a lather�over a report just out of J.P. Morgan titled "Smartphone adoption peaking in 2013." A report that, among other things, convinced J.P. to downgrade Qualcomm (NASDAQ: QCOM  ) to "hold."

    If all you know about J.P.'s report is what you heard about it last night, you probably have to side with the analysts on this one. As AlphaOne Capital CIO Dan Niles noted, for example, 700 million smartphones were sold last year, out of 1.7 billion cell phones total -- suggesting there's still the potential for a good billion upgrades out there, annually, and not counting new sales.

    Niles noted, too, that smartphone market "penetration" in developing nations is only 15% (suggesting there will be plenty of new sales). And his colleague Stephen Weiss, of Short Hills Capital, quickly chimed in: "Don't forget the tablet market," pointing out that Qualcomm has a chance to put chips in some 650 million tablet computers annually by 2016. All of which, Weiss, said, makes J.P. Morgan's assertion, that smartphone adoption has peaked, sound pretty "ludicrous," and all of which suggests there's still every reason in the world to own Qualcomm.

    That being said, there's just one thing wrong with the analysts' attack on J.P.'s report:

    That's not what J.P. said
    J.P. Morgan never actually said what they say it said, you see. What J.P. did say�was: "We see 2013 as another strong year for smartphones with 37% growth predicted ... However, our proprietary smartphone model continues to predict that�2014 will be the first year that new adoptions decline�with unit growth slowing to 17%."

    See the difference? According to CNBC, J.P. just baldly predicted the demise of smartphones within 12 months. But in fact, J.P. only predicted a slowing in the rate of smartphone sales increases. Sales will continue to happen. Indeed, smartphones sales will continue to grow and grow in 2014 and beyond. They just won't grow at faster and faster rates.

    A distinction with a difference
    That's important. It's important in particular because it means investors can't simply dismiss J.P.'s prediction as the ravings of a barking mad banker. Instead, they need to give J.P.'s warning serious consideration -- not just as it relates to Qualcomm, but as it relates to pretty much everyone involved in the making of smartphone components, and smartphones, period.

    So what exactly did J.P. say, other than making the obvious point that sales can't accelerate to infinity and beyond? Three points stand out:

    • First, J.P. noted that "average selling prices�must still come down."
    • Second, "lower cost smartphones and tablets" are key to maintaining sales growth rates.
    • Third, since falling average selling prices will crimp profit margins, and tend to cancel out earnings gains from growing sales, there is "limited upside to current earnings estimates."

    What it means to you
    Now what does this mean to Qualcomm shareholders? Let's start with where the stock stands today. At a P/E ratio of more than 17, but a projected growth rate of less than 15% (and a 1.5% dividend yield to make up the difference), Qualcomm shares today look appropriately priced. To justify a buy rating, we'd have to see Qualcomm's growth rate rise substantially from already strong levels -- something J.P. argues is not likely to happen.

    As it turns out, though, J.P.'s warning about Qualcomm may actually have more significance for other players in the smartphone space. Let's take a quick look at three of the more popular names in smartphone components: Skyworks Solutions (NASDAQ: SWKS  ) and TriQuint Semiconductor (NASDAQ: TQNT  ) , for example, both of which supply power amplifiers and related chips used in smartphones, and OmniVision Technologies (NASDAQ: OVTI  ) , which supplies a popular line of image sensors for cameras incorporated into phones.

    Of the three, Skyworks looks best-positioned to weather a drop in smartphone ASPs, and resulting pressure on components makers to reduce prices in tandem with falling smartphone price tags. Skyworks is profitable, with a 22 P/E. It generates strong free cash flow -- 14% ahead�of reported net income in 2012. And it's sitting on a big pile of cash -- $378 million already. All in all, a nice position to be in.

    In contrast, TriQuint and OmniVision both have cash in their favor -- $139 million for TriQuint (and no debt); $95 million (net of debt) for OmniVision. But both companies are burning cash like mad, and neither boasts a P/E ratio that anyone sane could call attractive. OmniVision shares cost a steep 55 times earnings, while TriQuint has no earnings, and therefore no P/E at all. If J.P.'s right, neither of these stocks looks like a place you want to be when the other shoe drops, and we see predictions of falling ASPs turn into actual reports of falling ASPs -- and falling profits for component makers.

    Finally, some good news for Nokia
    One final thought: JP's prediction of a squeeze on average selling prices for smartphones may be bad news for component makers like TriQuint and OmniVision, and even for Qualcomm and Skyworks. It could be good news, however, for Nokia (NYSE: NOK  ) , whose Lumia is starting to grab a toehold in the market, and whose prices are looking very competitive indeed, both here in the U.S. and in Asia as well. Nokia just finished reporting its first quarterly profit since Q1 of 2011, and its best free cash flow quarter since Q4 of that year -- $550 million.

    If manufacturers' scramble to bolster sales growth at the cost of profit margins turns the sale of smartphones turns into a race to the bottom on prices, well, Nokia's already halfway there already. And it's making a profit regardless.

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    Apple Cuts iPhone 5 Production Ahead of ’5S’ Says Jefferies

    Apple (AAPL) shares today are up $1.83, or 0.4%, at $469.75 despite a warning this morning from Jefferies & Co.’s Peter Misek, who believes the company is cutting production again for its iPhone, after rumors of production cuts that dominated headlines the prior two months, and that a larger-screen version of the phone may not arrive till next year.

    Misek, who has a Hold rating on the stock, and a $500 price target, writes that sales of the iPhone 5 seem to be dropping off and that the company is preparing for an iPhone 5S, perhaps going on sale in June, possibly at China Mobile (CHL) and that a cheaper iPhone seems to be on the way as well:

    Phone 5 sales are decelerating faster than expected and builds have been cut again from 40M to 30M. Admittedly, suppliers seem to be prepping for iPhone 5S builds to start in March. iPad 4 builds continue to fall (7-10M to 3-5M) and mini builds continue to rise (10M to 11-13M). While we believe the GM is similar, the actual gross profit dollars are lower on the mini [�] We see them as on track for a targeted June launch. There could be risk of a delay until July, but we see that as unlikely at this point due to few changes for the iPhone 5S vs. the iPhone 5 and that builds are scheduled to commence in March. We expect launches at China Mobile (~700M subscribers; 85M 3G) and DoCoMo (60M) in June/July. We think the China Mobile launch will be focused on the low-cost iPhone while the DoCoMo launch will be focused on the 5S.

    Despite Tim Cook‘s disparaging remarks yesterday about displays using organic light-emitting diodes, OLED is potentially one of the display technologies for a larger “iPhone 6” that may be delaying the arrival of such a device, opines Misek, although another possibility is the “IGZO” technology from Sharp that has been rumored for some time to be of interest to Apple:

    We believe a summer CY14 launch was originally planned, but Apple tried to accelerate it to stem its market share losses. The earliest Apple could have launched a 4.8� phone would have been this fall (with a target of Oct); however, our checks indicate that Apple�s suppliers are running into difficulties trying to scale the screen size from 4� to 4.8�. We believe Tim Cook defended the 4� screen of the iPhone 5 on the last earnings call in order to avoid freezing iPhone shipments in the quarters before a 4.8� launch [�] We think in- cell is having difficulty ramping to 4.8�, which is making Apple look at switching to on-cell (a different integrated touchscreen technology) and OLED (despite Apple�s suppliers being well behind Samsung in their OLED capabilities) or IGZO.

    Misek also offers that when an iPhone 6 finally arrives, it may come with a gross margin two points lower given higher component costs:

    Apple has been able to add functionality by using NAND price declines to subsidize other costs. For the iPhone 4S we estimate the 16GB NAND cost declined by $8 and declined by $9 for the iPhone 5 in contrast to app processor + baseband/power amps + display + assembly increasing $14/$17 for the iPhone 4S/5. We think Apple will reap some GM improvements from the little-changed iPhone 5S, but we expect the iPhone 6 to have a pricier app processor (mainly due to the TSM transition) and display (due to poor 4.8� in-cell yields) combined with limited NAND price declines (due to industry consolidation, Moore Stress, and price-inelasticity), which will lead to a 200bp+ headwind for the iPhone GM.

    Retail, Food Services Sales Up 0.1% for January

    The Department of Commerce released its monthly report [opens in PDF] on total domestic retail and food services sales today, reporting a month-to-month increase of 0.1% in January.

    While the advance doesn't sound like much, the $416.6 billion spent in the area is 4.4% higher than the January 2012 figure. Sales from auto and other motor vehicle dealers rose more markedly, advancing 9.4% over January 2012. Nonstore retailers were up 15.7% from January 2012.

    The January bump follows a 0.5% increase from November to December.

    Statistics are not necessarily exact, and may vary or be amended in coming months. The Commerce Department polled more than 5,000 retail and food services firms and subsequently weighted, benchmarked, and extrapolated the data to be representative of the more than 3 million retail and food services firms in the U.S.

    The next monthly report of this type is slated to be released March 13.

    link

    DryShips Taps Ocean Rig to Stay Afloat

    DryShips (NASDAQ: DRYS  ) is doing its best to stay afloat as its business takes on water. In January, the company sold two Suezmax ships under construction that it couldn't afford to finish. Yesterday, it increased an offering of shares it owns in Ocean Rig (NASDAQ: ORIG  ) to 7.5 million �shares from 5 million shares.

    The company expects proceeds of $126.4 million, and it will still own 59.4% of the company. But here's how bad things are for DryShips. Ocean Rig is worth $2.13 billion today, and DryShips is worth $935 million. That means the assets DryShips owns outside Ocean Rig have negative value, according to the market.

    The sinking ship at DryShips
    Ocean Rig has held its own since going public, but DryShips is sinking quickly. Even majority ownership of Ocean Rig doesn't mask the trouble the company is in.

    DRYS Total Return Price data by YCharts.

    While Ocean Rig plays a role in the very profitable ultra-deepwater drilling market, DryShips is trying to survive shipping a dwindling amount of dry goods around the world. Supply and demand in the industry is wildly out of whack, and companies are feeling the pain. The Baltic Dry Index shows the pain the shipping industry is in. Rates have plummeted, and there are no signs of recovery any time soon.

    ^BDIY data by YCharts.

    The rest of the industry isn't much better. Eagle Bulk Shipping (NASDAQ: EGLE  ) has a market cap of $31.2 million and doesn't have any profits on its horizon. Excel Maritime Carriers and Genco Shipping are worth just $53.5 million and $136.8 million, respectively, and neither is expected to reach a profit in the next year. The dry bulk business is sinking fast.

    Deepwater is where the money is
    That's why DryShips is taking money from its profitable public subsidiary to offset losses at DryShips. But it's chasing good money after bad, and investors would be wise to avoid the money pit that is DryShips.

    Even Ocean Rig isn't a great play in the drilling business. Seadrill (NYSE: SDRL  ) has a forward P/E of 12.1, compared with 16.2 for Ocean Rig, and it pays investors an 8.8% dividend yield. Both companies have a lot of exposure to ultra-deepwater drilling, but Seadrill has a far better record of generating good returns than George Economou, who controls Ocean Rig.

    If you're an energy investor looking for exciting opportunities, then you should look into one of the more exciting plays in the space: Seadrill. To learn more about the strengths and weaknesses of this company, as well as what to expect from Seadrill going forward, be sure to check out this�brand-new premium report�put together by one of our top Stock Advisor analysts. Click here to�get started.

    EU, U.S. to Push for Trans-Atlantic Trade Deal

    BRUSSELS (AP) -- The European Union and the United States announced Wednesday that they have agreed to pursue talks aimed at achieving an overarching trans-Atlantic free trade deal.

    The 27-country EU said such an agreement, first announced in Tuesday's State of the Union address by President Barack Obama, would be the biggest bilateral trade deal ever negotiated. Any agreement could boost the EU's economic output by 0.5 percent and the U.S.'s by 0.7 percent, according to some estimates. That would be a highly desirable outcome when the EU and the U.S. are both struggling with slow growth, high unemployment and high levels of debt.

    "Both of us need growth," said Jose Manuel Barroso, president of the European Commission, the EU's executive arm on Wednesday. "And both of us have budgetary problems."

    In a joint statement issued released simultaneously in Washington and Brussels, President Obama, European Council President Herman Van Rompuy and Barroso said they were "committed to making this relationship an even stronger driver of our prosperity."

    "Through this negotiation, the United States and the European Union will have the opportunity not only to expand trade and investment across the Atlantic, but also to contribute to the development of global rules that can strengthen the multilateral trading system," they said.

    Trade between the U.S. and the EU is already huge, reaching �2 billion ($2.69 billion) a day, EU Trade Commissioner Karel De Gucht said.

    Gary Hufbauer, a senior fellow at the Peterson Institute for International Economics in Washington, D.C., estimates that a comprehensive agreement could boost U.S. output by about 0.7 percentage points.

    A high-level U.S.-EU working group on jobs and growth said the goals of the agreement would include removing import tariffs, which average 4 percent, and getting rid of other barriers to trade such as the approval processes that businesses have to go through in order to sell products on both sides of the Atlantic.

    Beyond that, De Gucht said, "There seems to be a consensus that the cost of a product contains about 10 percent of red tape. If you can largely make away with that, you will have the same product for a lower price without anybody paying for it."

    "So it would certainly affect people's lives on both sides of the Atlantic," he told The Associated Press.

    And that, he said, is one way in which such the trade deal would stimulate growth. If tariffs are removed and the red tape is reduced, the product would be cheaper. This in turn would increase demand -- and more jobs as the manufacturer would need to hire more people to fill the orders.

    "So it's giving a boost to trade, but also to industry and to services," he said.

    In addition, he said, consumers would benefit from lower, and more uniform, prices. If tariffs are removed, he said, the price of a bottle of French wine would be roughly the same in the U.S. as it is in Paris.

    De Gucht said that initial talks should start by summer.

    The negotiations will cover a huge array of commercial and agricultural areas. Officials hope to complete them within two years.

    "For these negotiations to succeed, we need above all political will," Barroso said. "These negotiations will not be easy."

    But he added that a successful negotiation would result in a "win-win" situation, and be "a game-changer."

    One example of where the two economies could benefit from the talks is car making: If each side recognized the other's car safety standards -- or if the standards were harmonized -- an auto manufacturer would not have to satisfy two different sets of requirements.

    But there are other areas -- such as agriculture -- that will prove to be more difficult to negotiate.

    U.S. Trade Representative Ron Kirk said Wednesday that the U.S. plans to push the EU to relax its ban on genetically modified crops. That's also a top goal of U.S. Senators Charles Grassley and Max Baucus, two leading members of Congress on trade issues.

    "For us ... everything is on the table across all sectors, including all across the agricultural sector," Kirk said. "We want to deal with many of these nontariff barriers that frustrate our trade."

    Gary Hufbauer, a senior fellow at the Peterson Institute for International Economics in Washington, D.C., said harmonizing regulations would lead to a much bigger payoff from the talks than simply eliminating tariffs.

    "That's going to be a long, hard road to achieve that," he said.

    Immediate reaction to the announcement was highly favorable.

    "The German government is convinced that such an agreement would be a valuable contribution toward more growth and jobs on both sides of the Atlantic," said Steffen Seibert, a government spokesman.

    France, too, welcomed the announcement, saying the stakes were huge. "I want a helpful agreement, a source of opportunities for our companies in the U.S. market and a creator of jobs on French soil," said Nicole Bricq, the French minister for external trade.

    BusinessEurope, a federation of European business organizations, also welcomed the announcement. Juergen R. Thumann, the organization's president, said an agreement would "significantly boost economic growth on both sides of the Atlantic, strengthen the competitiveness of our main industries and restore trans-Atlantic leadership in trade."

    Claude Barfield, a trade scholar at the American Enterprise Institute, supported the idea of a U.S.-EU trade pact but said the Obama administration should finish ongoing talks on a Trans-Pacific trade agreement with several Asian nations first. Otherwise, China will push an alternative trade pact that excludes the United States.

    Wednesday, February 13, 2013

    Why the Dow Dropped

    The Dow Jones Industrial Average (DJINDICES: ^DJI  ) fell slightly today, down 36 points, or 0.3%, as investors reacted to President Obama's State of the Union address last nigh and the sluggish retail sales report this morning. Despite the Dow's drop, the Nasdaq and S&P 500 still managed small gains for the day.

    Among other initiatives, the president proposed an increase in the federal minimum wage to $9 from $7.25, comprehensive immigration reform, new gun control legislation, and funding for early childhood education.

    Retail sales grew just 0.1% in January as consumers reacted to the 2% increase in payroll taxes and higher gas prices. Still, economists had expected scaled-back growth in the sector, but believe consumer spending will continue to grow as housing prices bounce back, the job market improves, and stocks approach an all-time high.

    Reporting after hours, Cisco Systems (NASDAQ: CSCO  ) shares dropped more than 3% despite beating estimates on top and bottom lines. The world's largest provider of networking services grew revenues by 5% to $12.1 billion, better than the $12.06 billion Wall Street expected, and delivered an adjusted EPS of 51 cents, against estimates of 48 cents. The market seemed to expect Cisco to beat estimates. EPS guidance next quarter of 48 to 50 cents was in line with analyst projections.

    General Electric (NYSE: GE  ) was the Dow's big winner today, climbing 3.6% after announcing last night that it would sell its remaining 49% stake in NBCUniversal to Comcast (NASDAQ: CMCSA  ) for $16.7 billion. Investors applauded both sides of the deal as Comcast gained 3% on the day, though its shares slipped over the course of the session. The sale will allow GE to enhance its focus on its traditional industrial core and return more cash to shareholders, which the conglomerate plans to do by buying back $10 billion worth of shares this year.

    Meanwhile, McDonald's (NYSE: MCD  ) led the laggards, falling 1.2% on slow retail sales and the prospects of a minimum-wage increase. More than nearly any other industry, restaurants rely on low-wage labor, and labor costs can make up more than 20% of revenues. The raise in the payroll tax is also taking money out of the pockets of McDonald's customers, and another report showed that diners plan to spend less at restaurants this year. The Golden Arches accounted for a quarter of the Dow's decline today.

    More Expert Advice from The Motley Fool

    Once a high-flying tech darling, Cisco is now on the radar of value-oriented dividend lovers. Get the low down on the routing juggernaut in The Motley Fool's premium report. Our report also has you covered with a full year of free analyst updates to keep you informed as its story changes, so click here now to read more.

    Google Moves to Protect Your Password, But Not You


    Google has a problem. Passwords just aren't what they used to be. Sure, a long password with capital letters, numbers and symbols may have served you well so far. Even the most advanced hacker may have needed millions of years to crack it five or ten years ago. These days, it may just take days or hours with a couple thousand dollars worth of computer equipment and a modern algorithm.

    With over 500 million accounts, Google is constantly fighting a losing battle and it cannot possibly win. This fundamentally threatens the company, and that is why it is making a concerted effort to banish the one-step password login once and for all.

    Google already has a two-step voluntary system where an account holder is sent a code by text message whenever a new computer or device is used to access an account. There have been rumors about Google working with a ring or similar wearable device to limit account access as well.

    Now it is also working with a company called Yubico, which makes a USB device called the Yubikey. The basic idea for using a ring or USB device is to add a physical component to the process that cannot be replicated and will make your account ironclad.

    There are plenty of problems to overcome, but Google will continue to forge ahead and will undoubtedly make sure the person on the other end of their connection is you. The company's revenue is at stake, after all.

    A Wolf In Sheep's Clothing?

    Google is really just a giant advertising agency wrapped in a tech company. It rose to the top of its field by building the best personalized advertising platform in the world and a vast majority of their future revenue depends on making it better.

    Google's push to secure your account is a self-serving way to make sure its treasure-trove of lucrative personal information remains intact. If it can keep your account secure, it has a perfect history of where you are, what you search for, which web sites you have gone to, what you clicked on and what you bought.

    Just about the only thing about you that Google cannot give to advertisers is your personal identity, but that won't last for long. Pretty soon, everything you do or post online will bear your name.

    Google's executive chairman, Eric Schmidt, recently wrote a book with Google Ideas chief Jared Cohen. Here is an ominous quote from “The New Digital Age:”

    “Within search results, information tied to verified online profiles will be ranked higher than content without such verification, which will result in most users naturally clicking on the top (verified) results. The true cost of remaining anonymous, then, might be irrelevance.”

    That is the future of the web according to one of the largest gatekeepers. We're already seeing it through revised privacy rules from Google, Facebook and other online companies. Either you play along and identify yourself in publicly available data or you are cut out.

    That doesn't seem as terrible as it truly is on the surface. This is part of a trend that is allowing our government to destroy your First Amendment rights to free and anonymous speech.

    Exploitation by the Feds

    Since November 2011, the Department of Homeland Security has been authorized to collect personal information on anyone who who decides to “use traditional and/or social media in real time to keep their audience situationally aware and informed.”

    The DHS even hired General Dynamics to exploit the data Americans are publishing online by monitoring and analyzing all of the major social media web sites, along with forums and comment sections for major news organizations.

    This surveillance is unconstitutional, plain and simple. The DHS's actions fly in the face of many Supreme Court rulings that reinforce protection of your right to anonymously write or say what you want. America's rich history of anonymous writing dating back to when some of our founding fathers published The Federalist Papers is poised to become a relic in the “new digital age.”

    So while Google may seem to be protecting you by fixing the problem with passwords, it is really working to maintain and expand the security of the valuable and extensive personal information it has on you that it will pass along to advertisers.

    If you document government overreach, abuse its power or a government agent break the law and you want people to know about it, you will have to post it under your name and the Feds will be watching. If you attempt to protect yourself by anonymously posting a message, it will be lost in a sea of data and no one will ever see it.

    Ultimately, anything Google, or other web sites, do to bolster their security and improve the information they keep on you will accelerate Uncle Sam's transformation into Big Brother thanks to the DHS's unconstitutional surveillance. Your First Amendment rights are doomed and Google, Facebook and Twitter are making it possible.

     

    Top Stocks For 2/13/2013-16

    MusclePharm Corporation (OTCBB:MSLP), one of the fastest growing nutritional supplement companies in the United States with a proprietary formulation used in eight performance products, reports the appointment of Mariel Selbovitz, MPH, as Director of Global Therapeutics Product Procurement Development.

    �We are thrilled to have Ms. Selbovitz join the MusclePharm team as we enter the therapeutic, nutritional supplementation market that is focused on products to meet the nutritional requirements of people living with HIV/AIDS,� stated Cory Gregory, MusclePharm�s President. �MusclePharm is working to greatly expand our sales of therapeutic, nutritional supplementation and provide increased help to people in need across the globe.�

    Mr. Gregory continued, �We believe Ms. Selbovitz expertise and experience in the field of HIV will assist us secure distribution of MusclePharm products, such as Recon, to people living with the HIV disease in developing nations thru The Global Fund to Fight AIDS, Tuberculosis and Malaria, and The Presidents Emergency Plan for AIDS Relief (PEPFAR).�

    The Global Fund to Fight AIDS, Tuberculosis and Malaria is an international financing institution that invests the world�s money to battle disease. To date, it has committed US$19.3 billion in 144 countries to support large-scale prevention, treatment and care programs against these three diseases.

    PEPFAR was launched in 2003 by President George W. Bush, and is the largest effort by any nation to combat a single disease with $18 billion dollars dedicated to fight HIV/AIDS in developing nations over the five year period of 2003-2008. In the first five years of the program, PEPFAR focused on establishing and scaling up prevention, care and treatment programs. It achieved success in expanding access to HIV prevention, care and treatment in low-resource settings.

    By securing procurement of the Global Fund and PEPFAR, MusclePharm will be able to distribute Recon and other supplements to millions of people with HIV/AIDS worldwide thru government funds. In July 2010, MusclePharm presented at the 18th International AIDS Conference on the benefits of Recon in people with HIV/AIDS, sponsored by the National Association of People with AIDS (NAPWA) and the AIDS Institute, both leading HIV legislative and advocacy organizations.

    Selbovitz is a member of the Cornell AIDS Clinical Trials Group Community Advisory Board and AIDS Treatment Advocacy Coalition. She presented at the 5th European Conference on Clinical and Social Research on AIDS and Drugs, International Conference on Antiviral Research, 5th IAS Conference on HIV Pathogenesis, Treatment and Prevention and XVIII International AIDS Conference.

    Merck & Company (NYSE:MRK) reports that the Merck Company Foundation and the Bill & Melinda Gates Foundation are committing an additional $60 million to support Botswana�s African Comprehensive HIV/AIDS Partnerships (ACHAP). Merck is known as MSD outside the US and Canada. A unique program developed with and led by the Government of Botswana, ACHAP is one of sub-Saharan Africa�s oldest, most successful public-private partnerships. With today�s pledge, the Merck Foundation and the Gates Foundation�s total cash contributions now amount to $166.5 million. Merck will also continue the donation of its HIV medicines.

    Building on the successes created by its initial investment of $56.5 million nine years ago, Merck will contribute an additional $30 million over the next five years. The new funding will continue the program’s original efforts in treatment and care but also will support the second phase initiatives to meet the current treatment needs of the 137,000 Batswana (people from Botswana) living with HIV and new patients enrolled in the second phase. The second phase initiatives include: the prevention of HIV, the critical need to treat people living with HIV for tuberculosis (TB) and the sustainability of the program to allow Botswana to successfully address HIV/AIDS within its own borders.

    “For nearly 10 years, Merck has been a partner in helping the Government of Botswana save the lives of thousands of people living with HIV and AIDS and we are confident our new funding will continue to contribute to the well-being of the country,” said Richard T. Clark, chairman and CEO of Merck. “This collaboration is a great success story on many levels, and has become a model for many countries both on and off the African continent.�

    ACHAP has helped demonstrate how public-private partnerships might work to save the lives of the world�s poorest people infected with HIV. Between 2001 and 2007, the partnership has supported Botswana in preventing the estimated deaths of more than 53,000 Batswana living with HIV. Today about 90 percent of Batswana living with HIV receive treatment, compared to less than 5 percent when the program began in 2001.

    �Our partners� contributions, through funding, antiretroviral (ARV) medicine donations and medical expertise, have been absolutely essential to our ability to address the needs of Batswana living with HIV and AIDS,� said Themba Moeti, M.D., managing director of ACHAP. �We look forward to strengthening our partnership as we enter our second phase and enhancing the successes of our first decade while responding to the challenges that remain and retaining the flexibility to address emerging issues.�

    PPL Earnings: An Early Look

    Earnings season is in full swing, with huge numbers of companies having already given their latest numbers to investors, and PPL (NYSE: PPL  ) is about to release its quarterly earnings report. The key to making smart investment decisions with stocks releasing their quarter reports is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed knee-jerk reaction to news that turns out to be exactly the wrong move.

    PPL suffered from the same trend that held back returns on utilities generally during 2012, but with its feet in some promising projects, PPL may well be able to buck that trend in 2013. Let's take an early look at what's been happening with PPL over the past quarter and what we're likely to see in its quarterly report on Thursday.

    Stats on PPL

    Analyst EPS Estimate

    $0.47

    Change From Year-Ago EPS

    (33%)

    Revenue Estimate

    $2.47 billion

    Change From Year-Ago Revenue

    (41%)

    Earnings Beats in Past 4 Quarters

    4

    Source: Yahoo! Finance.

    Will PPL generate some excitement this quarter?
    Analysts have been reasonably confident about their projections for PPL's fourth quarter, although the consensus earnings-per-share figure has dropped by $0.02. The stock's performance shows few signs of any anxiety, though, with shares up 7% since early November.

    Like many utilities, PPL took a big hit from Hurricane Sandy during the quarter. With roughly half a million customers losing power, the storm ranked as the worst outage in PPL's history. In its previous quarterly report, PPL said it expected costs in excess of $60 million, but that it had insurance coverage that would pay for some of those costs and could apply for cost deferral for the remainder.

    One area where PPL hopes to build more revenue is in electricity infrastructure. Since mid-2012, PPL has been working alongside General Electric (NYSE: GE  ) to run a pilot project funded by a $40 million federal stimulus grant to bring cheaper and more environmentally friendly power to 60,000 Pennsylvania customers. Yet while PPL expects to spend $3.5 billion on similar initiatives to improve infrastructure, rival Exelon (NYSE: EXC  ) has already committed far more resources toward smart-grid projects and plans to keep spending.

    But another thing to remember about PPL is that it also has operations in the U.K. through its ownership interest in subsidiary WPD. Although peer National Grid (NYSE: NGG  ) has a much more substantial presence in the U.K. and gets almost half its sales there, PPL gets about 12% of its revenue from WPD, providing some geographical diversification for the company.

    In PPL's coming report, look for signs that exposure to Hurricane Sandy didn't bring any unexpected surprises. With the episode behind it, PPL's latest rate increases could put it in better position to boost profits in the future.

    Will Exelon outclass PPL?
    Both PPL and Exelon have moved increasingly toward clean energy, but Exelon's recent merger with Constellation puts Exelon on the shortlist of top utilities despite its recent share-price woes. To determine if Exelon is a good long-term fit for your portfolio, you're invited to check out The Motley Fool's premium research report on the company. Simply�click here now�for instant access.

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

    Broadcom: LTE Chip Could Win Apple Business, Says RBC

    Shares of chip maker Broadcom (BRCM) are down 2 cents at $33.69 despite an upbeat note this morning from RBC Capital’s Doug Freedman, who reiterates an Outperform rating, and a $45 price target, writing that the company’s announcement this morning of a chip for “long-term evolution,” or LTE, the wireless broadband standard, could finally help it land a deal with Apple (AAPL) based on power savings. The chip is due out in 2014. Most baseband radio parts today are supplied by Qualcomm (QCOM)

    The announcement is a “clear incremental positive” for Broadcom, even if the 2014 time frame is further out than some would have liked:

    In our view, this chip could be the baseband chip that gets them into Apple. We are encouraged that BRCM is entering the LTE supplier group at LTE-Advanced (carrier aggregation) and not just LTE. We do feel that Apple is currently one of the customers sampling. While it�s too early to determine if BRCM grabs the Apple win, we feel the solution is currently generating strong interest from the OEM, being a very viable product for their road-map (TD-SCDMA compatible). The BCM21892 is a thin modem with no applications processor, targeted for the high-end market where the baseband and applications processors are often separate. We highlight that the chip does not offer legacy Qualcomm CDMA EV-DO support. The chip allows for higher performance at lower price points due to the increased levels of integration (portion of the RF functions are now on single chip vs. dual-chip solutions presently in the market) resulting in a smaller footprint. The time-frame of 2014 could be later than what some investors expected. Given timing to production, we encourage investors to be prudently conservative until design wins and volumes can be initially measured.

    Expert Q&A: Stephen Wershing

    Stephen Wershing is the president of The Client Driven Practice and spent 14 years as a broker-dealer executive, chief operating officer of a national independent firm and president of a regional firm.

    He coaches financial advisers on how to make client referral marketing plans and is the author of “Stop Asking for Referrals: A Revolutionary New Strategy for Building a Financial Service Business that Sells Itself” (McGraw-Hill, 2012).

    Q. What is the biggest mistake advisers make when it comes to referrals?

    A. The biggest mistake is asking for them. The most important thing to keep in mind is that clients make referrals because they get benefits from that. Scott Degaffenreid [of N2Millennials Inc.] published a social-network analysis that studied referral behavior, and what it comes down to is that the reason people make referrals is because it improves their standing in the eyes of their peers. They want to be the resource guy and help them. What's unusual about financial advisers is that we're the ones who don't know that, and we need to know it more than most people in other businesses do. We are an event-driven industry … with events that happen only once in a long while. The fundamental concept of referrals is preparing your clients to refer you when that event occurs. So that depends on how well you can define niche and service that niche.

    Q. How should advisers build a niche?

    A. When we think about a niche, we tend to think in terms of demographics and profession and investible assets. Fundamentally, those aren't niches. My favorite one is women, which is really popular right now. That is not a niche; that's a population. When we start looking at ages and demographics, it leads us off the track. We should think about niche in terms of a need felt by a small portion of a population. Once you understand what that is, it may be applicable to a certain profession or age group, but you have to back your way into there. For instance, corporate executives have peculiar needs the rest of us don't have: large stock option rewards, complex employment agreements. But rather than say your niche is corporate executives, talk about those other needs.

    Q. From your experience coaching advisers, do you think they find it difficult to resist asking clients to refer them to family or friends?

    A. Most advisers say it's a huge relief not to do it. It's uncomfortable for them and not fair to the client, because it's not part of the deal. The deal is: “You give me advice, and I pay you.” Most people are willing to help, but rather than force them, just communicate the special skills you have, and over the course of time, they get it. They will remember you when someone they know tells them they have a need and it matches something you've told them about.

    Q. You mentioned that most advisers are relieved to learn they shouldn't ask for referrals. Why do they ask if they don't like doing it?

    A. They don't know that they shouldn't, and they're told over and over again by the gurus that you have to. Abraham Maslow once said that if the only thing you have is a hammer, everything looks like a nail. When I started in the advisory business, everybody knew that you had to cold-call. If you were serious, that's all you would do. We didn't know back then that wasn't a good way to get clients, but now we do.

    One important development for me was that I happened upon the client feedback thing. The advisory board is hugely important for an adviser to do. But … you can't be satisfied with the first answer. Dig below that.

    Q. Do you think advisers are hesitant to build a niche because they feel they could lose out on clients?

    A. Most advisers can't talk special needs since they're all over the place. The other part of that is that they don't want to exclude anybody. But who are the highest-paid people in every profession? The specialists. The problem is that if a client comes in with 3 million bucks, [advisers] can't help but do everything possible to bring that guy in.

    Q. What is one of the biggest challenges advisers face as they try to secure referrals from clients?

    A. It used to be that the financial adviser is where we went to get [investment] information. Now we have the Internet. The broker held all the cards in terms of knowing investment management, but that's not true anymore. So you need to have something different to attract clients, because you can't just be the answer man. There has also been the trend toward the independent model. It was a different world when the majority of assets were with a handful of firms. Now we are differentiated at a company level and at a practice level. You really have to set yourself apart.

    Investors Miss This Key Fact About Netflix

    Oh, how quickly fortunes can change in the great game of investing. Take Netflix (NASDAQ: NFLX  ) , which is already up more than 90% year to date.

    Multiple catalysts have forced the stock higher. The latest include a $500 million capital raise to refinance existing debt and purchase new content and news that the U.S. Postal Service is thinking of ending Saturday delivery. Both moves could save Netflix millions.

    But is it enough? Amazon.com (NASDAQ: AMZN  ) recently convinced PBS to sell it exclusive streaming rights for the popular show "Downton Abbey."�Sony (NYSE: SNE  ) , meanwhile, decided to stick with streaming its feature films through Starz rather than switch to Netflix.

    Tim Beyers of Motley Fool Rule Breakers and Motley Fool Supernova looks at the numbers and argues that Netflix is better positioned than skeptics believe. Watch his full take in the video below, and then be sure to leave a comment to let us know what you think.

    Netflix's fortunes increasingly depend on success in international markets. Can the streaming sensation expand globally even as deep-pocketed competitors attack here at home? This is a must-know issue for investors, which is why we've released a brand-new premium report on Netflix. Inside, you'll learn about the key opportunities and risks facing the company, as well as reasons to buy or sell the stock. We're also offering a full year of updates as key news hits, so make sure to click here and claim a copy today.

    Top Stocks For 2/13/2013-6

    American Power Corp. (OTC.BB:TGMP) will proceed to kick start the development of its advanced Pace Coal Project in Judith Basin County, Montana.

    In April 2010, American Power Corp. acquired roughly 29,000 acres, which make up the Pace Coal Project. In 1979 Mobil Oil Co. (now ExxonMobil) drilled 30 holes over 14,000 of the project’s acreage, and delivered 45 samples which were later sent to an independent laboratory for analysis. It was subsequently determined that both the quality and the quantity of coal on the Pace acreage was high and significant, respectively. Several independent reports were commissioned based on the development work undertaken by Mobil Oil, determining there could be in excess of 410 million tons of high volatility bituminous coal potential on the Pace acreage.

    Montana’s demonstrated reserve base of 119.1 billion short tons of coal represents over 24% of America’s total demonstrated coal reserve base of 487.7 billion short tons. Of particular importance, the coal at the Pace Coal Project is bituminous B coal, which, due to its higher BTU rating, secures a higher market price than most of Montana’s coal (typically sub-bituminous or lignite).

    American Power Corp. is a publicly traded, dynamic energy company based in Denver, Colorado. The Company was established with the focus of acquiring near-term, large scale coal projects in close proximity to national transportation links. American Power envisions developing its large coal resources to support electricity generation.

    International Coal Group (NYSE:ICO) is a leading producer of coal in Northern and Central Appalachia and the Illinois Basin. ICO has 13 active mining complexes, of which 12 are located in Northern and Central Appalachia and one in Central Illinois. ICO controls one billion tons of high-quality coal reserves that are primarily high-BTU, low-sulfur steam and metallurgical quality coal. ICO’s mining operations and reserves are strategically located to serve utility, metallurgical and industrial customers throughout the Eastern United States.

    ICO is a leading producer of coal with a broad range of mid-to-high Btu, low-to-medium sulfur steam and metallurgical coal. ICO also has a complementary mining complex of mid-to-high sulfur steam coal strategically located in the Illinois Basin. ICO currently owns and operates 13 active mining complexes, 12 of which are dispersed within Central Appalachia and Northern Appalachia, with the one complex in the Illinois Basin.

    ICO markets coal to a diverse customer base of largely investment grade electric utilities, as well as domestic industrial and steel customers. Coupling their primarily high-BTU, low-sulfur steam and metallurgical quality coal with the availability of multiple transportation options throughout the Appalachian region, ICO participates in both the domestic and international coal markets.

    National Coal Corp. (Nasdaq: NCOC), a Central and Southern Appalachian coal producer, reports that for the three months ended June 30, 2010, it achieved total revenues from continuing operations of $10.6 million based primarily on the sale of 117,017 tons of coal. In the same prior-year period, National Coal generated revenues from continuing operations of $22.6 million based primarily on the sale of 290,508 tons of coal. The decrease in revenue from coal sales for the three months ended June 30, 2010, as compared to the same period in 2009, was primarily due to the assignment of a coal supply agreement to Ranger Energy Investments, LLC on April 20, 2010 as part of the Company’s sale of certain assets and real property.

    For the three month period ended June 30, 2010, National Coal had an Adjusted Earnings Before Interest, Taxes, and Depreciation and Amortization (�Adjusted EBITDA�) of $3.4 million, compared to an Adjusted EBITDA of $1.2 million for the second quarter of 2009. For the three months ended June 30, 2010, National Coal reported income from continuing operations of $248,967 or $0.03 per share compared to a net loss of $6.3 million or $0.75 per share for the three months ended June 30, 2009.

    The Company has engaged the services of a financial advisory firm to evaluate possible strategic and financing transactions. Among these alternatives, the Company has been pursuing a restructuring of its debt, the issuance of common stock in exchange for the purchase and cancellation of its debt, transactions in which the Company would issue preferred or additional common stock for cash, and merger transactions with other coal producers.

    Top Stocks For 2/13/2013-20

    NuEarth Corporation (NUEC.PK), a manufacturer and marketer of “Clean & Green” products and technology, reports that the company’s Laboratory and Research Division “TerraSolv SA” has renegotiated and finalized its Joint Venture Agreement with Laboratorio Internazionale Agricoltura, S/p/A (“LIA”) of Italy.

    The Finalizing of the Joint Venture Continuation Agreement brings 2 new laboratory projects to TerraSolv. These projects are valued currently valued at more than $1.5 Million over the three-month work schedule starting in October 2010. However, each contact has provisions that could triple the final contact value to more than $6 Million USD over their 12 month life cycle.

    “We’ve seen incredible value from the lab, which has paid for itself several times over in its first year of operations. It represents a new, higher standard for doing business in IT throughout the environmental and agricultural industries. We’re taking more risk out of the system, putting more structure into it, suffering less downtime and delivering higher-quality services,” said Levi Modelevi – CEO of NuEarth Corporation the parent of TerraSolv SA. The TerraSolv SA Laboratory has generated more than $32 Million over its 3 year existence � Mostly due to the Joint Venture with Laboratorio Internazionale Agricoltura, S/p/A.

    Clean Diesel Technologies, Inc. (Nasdaq:CDTI), the cleantech emissions reduction company providing sustainable solutions to reduce emissions, increase energy efficiency and lower the carbon intensity of on- and off-road engine applications, reported its operating results for the second quarter ended June 30, 2010.

    Clean Diesel’s CEO and President Michael L. Asmussen stated, “The second quarter of 2010 saw Clean Diesel continue to make progress in its strategic effort to concentrate on the global retrofit market, which we believe offers the Company a significant long-term business opportunity.

    “In addition to emphasis on the global retrofit market, we continued to focus on emission reduction and fuel economy opportunities in the U.S. in non-road sectors, including rail, marine, mining and construction.

    “We view results in the second quarter as well as the first half of 2010 as progress and remain committed to the development of differentiated products based on proven intellectual property. Looking forward, we continue to pursue opportunities to aggressively broaden our product portfolio and gain access to key world markets.”

    Hydrogenics Corporation (Nasdaq:HYGS), a leading developer and manufacturer of hydrogen generation and fuel cell products, has closed the first tranche of common shares issued pursuant to its strategic alliance with CommScope, Inc. which was previously announced on August 9, 2010.

    The first tranche consisted of 879,393 common shares for an aggregate purchase price of US$3,237,046 (US$3.68per share).

    This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

    Hydrogenics Corporation is a globally recognized developer and provider of hydrogen generation and fuel cell products and services, serving the growing industrial and clean energy markets of today and tomorrow. Based in Mississauga, Ontario, Canada, Hydrogenics has operations in North America and Europe.

    Top Stocks For 2/13/2013-11

    NetLogic Microsystems Inc. (Nasdaq:NETL) a worldwide leader in high-performance intelligent semiconductor solutions for next-generation Internet networks, announced that Marvin D. Burkett has been elected to the company�s Board of Directors. �Marv�s extensive experience in executive roles at large public semiconductor companies will add further depth to our Board of Directors,� said Ron Jankov, president and CEO of NetLogic Microsystems. �We look forward to benefiting from his experience as we continue to grow the Company. “A veteran of the semiconductor industry, Burkett brings years of experience with global semiconductor and personal computing companies. Most recently, he was chief financial officer and chief administrative officer for Nvidia Corp.

    NetLogic Microsystems, Inc., a fabless semiconductor company, engages in the design, development, and sale of processors and integrated circuits. The company offers multi-core processors, knowledge-based processors, 10/40/100 Gigabit Ethernet physical layer devices, network search engines, and embedded processors to develop systems used in the Internet infrastructure.

    LPL Investment Holdings Inc. (Nasdaq:LPLA) an independent broker-dealer, announced the closing of its initial public offering of 15,657,482 shares of its common stock by selling to stockholders at a price of $30.00 per share. The Company�s shares are listed on The NASDAQ Global Select Market under the trading symbol �LPLA.� Prior to closing, the underwriters exercised their option to purchase an additional 1,565,748 shares of common stock from the Company and a selling stockholder. Including the over-allotment, the Company and selling stockholders sold a total of 17,223,230 shares of the Company�s common stock at a price to the public of $30.00 per share. Excluding shares offered by selling stockholders, after underwriting discounts and commissions and estimated offering expenses, the Company received net proceeds of approximately $37.2 million.

    LPL Investment Holdings Inc. provides technology, brokerage, and investment advisory services through business relationships with independent financial advisors, financial advisors employed by financial institutions, registered investment advisors, and financial institutions in the United States.

    Focus Media Holding Ltd. (Nasdaq:FMCN), China’s largest digital media group, announced shareholder resolutions adopted at its annual general meeting of shareholders held in Shanghai.

    Focus Media shareholders adopted the following resolutions proposed by the Company:

    1. Approval of the re-election of Jason Nanchun Jiang, Neil Nanpeng Shen, David Ying Zhang and Fumin Zhuo as directors to serve on the board of the directors for a further three year term or until such director’s successor is elected and duly qualified; and
    2. Ratification of the appointment of Deloitte Touche Tohmatsu CPA Ltd. as independent auditors of the Company for the fiscal year ending December 31, 2010.

    Focus Media Holding Limited, a multi- platform digital media company, operates out-of-home advertising network using audiovisual digital displays in China. It operates out-of-home advertising network based on the number of locations and flat-panel television displays in its network.

    NII Holdings Prices Notes Offering

    NII Holdings (NASDAQ: NIHD  ) announced the pricing of $750 million principal amount of 11 3/8% senior notes due in 2019 through its wholly owned subsidiary, NII International Telecom.

    The size of the offering was increased from the $400 million amount it originally announced just last week to $750 million and were offered in a private placement. The issue price is 100% of the principal amount, and the sale is expected to close on or about Feb. 19.

    NII previously said it planned to use the net proceeds for general corporate purposes, including the expansion of its existing network, either through capital expenditures for organic growth or acquisitions (including telecom spectrum licenses); deploying new network technologies; refinancing, repaying or repurchasing outstanding indebtedness; or other purposes.

    NII Holdings markets Sprint Nextel's (NYSE: S  ) Nextel brand throughout Latin America.

    Tuesday, February 12, 2013

    The Single Biggest Threat to Bank of America Today

    This is the first in a series of five articles covering Bank of America's legal problems since the financial crisis. Check back throughout the week as we publish the rest of the series.

    If Bank of America (NYSE: BAC  ) faced death by supernova during the financial crisis, in the years since, it's been battling death by a thousand cuts. Though we're now five years past the darkest days of the downturn, the executives at B of A remain profoundly ensconced in it thanks to a seemingly endless barrage of lawsuits stemming from the ill-fated acquisition of Countrywide Financial in 2008.

    Although this may sound like hyperbole, the manner in which these lawsuits play out will dictate not only when B of A fully emerges from the proverbial fog of war, but even if it completely emerges at all. Tens of billions of dollars in legal liability from these suits could still bring the lender to its knees.

    What follows is the first of five articles providing an in-depth analysis of not only B of A's legal victories, which are many, but more importantly, the threats that lie ahead for the nation's second largest lender by assets.

    Appreciating the scale of B of A's legal liabilities
    B of A's purchase of Countrywide will go down in history as one of the worst, if not the worst, corporate acquisitions of all time. In the four years leading up to the financial crisis, Countrywide underwrote a staggering $1.562 trillion in residential mortgages. Those mortgages were then sold to government-sponsored agencies Fannie Mae or Freddie Mac or packaged into mortgage-backed securities and peddled to institutional investors like university endowments, public pension funds, and insurance companies. A full $301 billion of these loans have since either gone into default or are severely delinquent -- that is, more than 180 days past due -- and investors are now looking to B of A to make them whole.

    Given the scale and multitude of legal claims brought against B of A, it's understandably hard to appreciate the progress the bank has made versus the challenges that remain. To this end, I've found it helpful to break the analysis down into three different buckets:

  • Lawsuits and settlements related to the servicing of mortgages.�
  • Settlements related to the sale of whole mortgages to government-sponsored agencies Fannie Mae and Freddie Mac.�
  • Lawsuits related to the sale of mortgage-backed securities to institutional investors.�
  • You can see this breakdown in the following infographic -- the green houses represent settled claims, and the red houses show estimates of liability remaining.

    Sources: Court documents, media reports, and Bank of America's annual and quarterly filings.

    In terms of progress, the best news so far has come from the mortgage-servicing issues (the first bucket). In February of last year, the bank joined four other mortgage servicers -- JPMorgan Chase� (NYSE: JPM  ) ,�Citigroup� (NYSE: C  ) ,�Wells Fargo� (NYSE: WFC  ) , and�Ally Financial -- in a landmark settlement with the U.S. Justice Department and 49 state attorneys general. The deal called for a total of $25 billion in cash and other relief to borrowers, with B of A's share weighing in at a whopping $11.82 billion.

    Then, in January of this year, B of A joined with nine other mortgage servicers to settle similar claims brought by the Federal Reserve and the Office of the Comptroller of the Currency. Taken together, while expensive, these agreements effectively put the mortgage-servicing component of B of A's liability to rest.

    B of A has also addressed the lion's share of its liability stemming from the sale of mortgages to Fannie Mae and Freddie Mac (the second bucket). Between 2004 and 2008, Countrywide sold a total of $846 billion in mortgages, or 54% of its aggregate origination volume, to these institutions. By the end of last September, a full $71 billion of the mortgages were in default, and $40 billion were severely delinquent.

    In two settlements, one at the beginning of 2011 and the other at the beginning of this year, B of A paid a total of $10.08 billion (including cash and non-cash relief) to extinguish "substantially all" unresolved claims, as well as any future claims associated with loans sold to the government-sponsored enterprises. That settlement amount equates to roughly $0.09 on every dollar of the loans that were either in default or severely delinquent.

    The trickiest bucket of all
    The only bucket remaining, then, is the one related to Countrywide's sale of mortgage-backed securities to institutional investors. The problem is that this slice of the liability pie -- while representing only 46% of Countrywide's mortgage origination volume from 2004 to 2008 -- accounts for an inordinate share of B of A's total liability. This is because the mortgages packaged into securities were the worst of the worst, both in terms of how they've performed and the adequacy of the underlying collateral.

    As noted above, of the $846 billion in mortgages sold to the GSEs, a total of $111 billion, or 13%, have either defaulted or are severely delinquent. By comparison, of the $716 billion in mortgages sold to private investors, $190 billion, or 26.5%, are similarly situated. In addition, most loans sold to the GSEs are secured by first liens, whereas many of the mortgages sold to private investors are secured by second and/or third liens.

    While the amount B of A will end up owing to purchasers of Countrywide's MBSes remains a mystery, we know at least two things. First, it'll probably be a generous amount. And second, whatever the amount, it'll be a function of three different categories of cases making their way through the courts:

    • BoNY breach-of-contract: A�proceeding in New York in which B of A is seeking judicial approval of an $8.5 billion breach-of-contract settlement between Countrywide, 22 institutional investors, and�Bank of New York Mellon� (NYSE: BNY  ) acting in its capacity as the trustee for $424 billion worth of MBSes.�
    • Insurers breach-of-contract: A�handful of cases -- likewise in NY -- that concern breach-of-contract actions brought by bond insurers like�MBIA� (NYSE: MBI  ) that insured Countrywide's mortgage-backed securities against default.�
    • Securities fraud: More than 20 cases in a federal court in California that address claims of securities fraud against Countrywide and an assortment of other Wall Street banks related to the sale of MBSes.

    So, where does B of A stand?
    If you're an investor in B of A, it probably seems like the bank will never be done paying for its ill-fated decision five years ago to purchase Countrywide. But what I hope I've demonstrated here is that the end is indeed in sight. It's just a ways off.

    The bank has already put tens of billions of dollars in liability behind it with the GSE and servicing related global settlements. And by quarantining the lion's share of remaining lawsuits into only two courts -- the New York court overseeing the BNY Mellon settlement and claims by bond insurers, and the federal court in California presiding over the securities fraud charges -- B of A's legal team has positioned the bank to reach global settlements with the remaining litigants.

    This isn't to say that things couldn't go awry, because they most certainly could. But the chances of that are decreasing with time.

    While this may be the most pressing issue for Bank of America investors to consider, the big picture is much bigger than just the bank's legal issues. To dig in further on the banking giant, I invite you to check out our�in-depth company report on Bank of America. The report details Bank of America's prospects, including three reasons to buy and three reasons to sell. Just�click here�to get access.

    Netflix Shorts Are Tough as Nails

    Netflix (NASDAQ: NFLX  ) short-sellers have a tremendously high pain threshold. I mean, they can sleep on nail beds and crushed glass. Drink molten iron for breakfast. Chuck Norris might be shorting the stock, judging by the toughness requirements.

    You know the story. By the middle of January, Netflix had 22% of its float sold short, and a crucial earnings report on deck. The report was everything shareholders dreamed of and short-sellers feared. Share prices jumped 42% the next day and another 17% the day after that.

    You'd think this action would shake out a lot of short-sellers. After all, the potential downside to being short is pretty much unlimited -- especially with a highly volatile stock like Netflix. And it's not always up to the shorters when to cover their bearish positions. Their hands may be forced by margin calls.

    Well, the next report on short-sale statistics is out, and Netflix is still followed by a large herd of bears. As of Jan. 31, the negative bets had shrunk by just 4%. There's still plenty of room for a drastic short squeeze.

    Now, the exchanges don't provide a whole lot of detail other than shorted share counts. It's entirely possible that Netflix experienced a short squeeze in January, but that an inflow of new thumbs-down bets replaced many of the covered positions.

    History might add some steel to your stomach lining. Looking back at charts from 2012, Netflix delivered another big January jump but followed up with a severe drop on the April report. That time, investors didn't like the prospect of increased seasonality doing damage to the upcoming slow summer months.

    That could happen again, proving the bears right for a while. As I said, this stock swings like Austin Powers. Or, the company could reap the rewards of its House of Cards investment while international markets mature. In that case, we'll test the Norris-like resolve of short-sellers again.

    More expert advice from The Motley Fool
    The precipitous drop in Netflix shares since the summer of 2011 caused many shareholders to lose hope. While the company's first-mover status is often viewed as a competitive advantage, the opportunities in streaming media have brought some new, deep-pocketed rivals looking for their piece of a growing pie. Can Netflix fend off this burgeoning competition, and will its international growth aspirations really pay off? These are must-know issues for investors, which is why we've released a brand-new premium report on Netflix. Inside, you'll learn about the key opportunities and risks facing the company, as well as reasons to buy or sell the stock. We're also offering a full year of updates as key news hits, so make sure to click here and claim a copy today.

    Late-Payment Rate on U.S. Mortgages Hits 4-Year Low

    By ALEX VEIGA

    LOS ANGELES -- Homeowners who took on mortgages well after the housing bubble burst are doing a better job in keeping up with payments, a trend that has helped push the national rate of late payments on home loans to the lowest level in four years.

    The percentage of mortgage holders at least two months behind on their payments fell in the fourth quarter to 5.19 percent from 6.01 percent a year earlier, credit reporting agency TransUnion said Tuesday.

    The rate hasn't been that low since December 2008, a time when home prices were sliding, the U.S. economy was in recession and many adjustable-rate mortgages taken out by homebuyers with less-than-perfect credit were in the process of resetting to a higher rate.

    Those ARM resets triggered higher payments that many borrowers couldn't afford, sending late payment rates higher into 2009. In addition, the national unemployment rate was on an upward trajectory in 2008 that would extend well into the following year.

    Those are some of the reasons the mortgage delinquency rate didn't hit its peak of nearly 7 percent until the fourth quarter of 2009, according to TransUnion.

    The rate has been trending down since then, aided by a rebound in home sales and rising home prices, which make it easier for borrowers to refinance their mortgages or sell their homes if they lose their jobs or otherwise become unable to make payments.

    Home loans taken out in 2008 or earlier account for 60 percent of all U.S. mortgages, and they make up 90 percent of all mortgages that are at least two months late, said Tim Martin, group vice president of U.S. housing for TransUnion.

    Many of those loans have gone unpaid for years, but delays in the foreclosure process, which in some states can take as long as three years, mean the mortgages remain unpaid.

    "What's really going on is there are a lot of folks who have been delinquent for a very long time, and we're not really adding a lot of new people to the delinquency numbers," Martin said.

    The number of mortgages gone unpaid two months or more climbed 54 percent in 2007 from the previous year, increased 53 percent in 2008 and rose 50 percent in 2009, according to TransUnion.

    The decline has been far slower, with mortgage delinquency levels falling 7 percent in 2010 from the year before, 6 percent in 2011 and 14 percent last year, the firm said.

    All told the 40 percent of all mortgages taken out by borrowers since 2009 only make up 10 percent of home loans that have gone unpaid.

    That's partly due to lenders tightening the criteria needed to qualify for a loan, including larger down payments. And even with mortgage rates hovering near all-time lows, borrowers are typically getting fixed-rate, 30-year mortgages these days.

    "That's had the effect that those borrowers are able to make their payments," Martin said.

    That's kept the mortgage delinquency rate from creeping higher. Still, the trove of pre-2009 loans that are behind two months or more remain a considerable drag.

    Even at a 4-year low, the mortgage delinquency rate is still well above the 1 percent to 2 percent average historical range, an indication that many homeowners still are struggling to make their payments.

    Before the housing bust, mortgage delinquencies were running at less than 2 percent nationally.

    TransUnion anticipates the national mortgage delinquency rate will continue declining through the end of March, though it expects the rate to remain above 5 percent.

    At the state level, Florida led the nation in the fourth quarter with the highest mortgage delinquency rate of any state at 12.47 percent. It was followed by Nevada at 10.45 percent; New Jersey at 7.72 percent; and, Maryland at 6.88 percent.

    The states with the lowest delinquency rate were North Dakota at 1.53 percent; South Dakota at 1.97 percent; Nebraska at 2.20 percent; and, Alaska at 2.20 percent.
    Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

    Fed Is Buying Debt Faster Than We Can Create It


    Who needs foreign central banks and investors when you can just buy up all the debt we create on our own?

    A bizarre and troubling milestone has been hit this year, even for the Fed. Thanks to $45 billion of Treasury bonds being bought by the U.S. central bank from the U.S. Treasury Dept. per month, the Fed has purchased more U.S. debt than was created so far this year.

    Between January 2nd and February 6th, the U.S. Treasury Dept. data shows the U.S. federal deficit increased by $47.2 billion to $16.4799 trillion. Over the same period of time, the Fed's Treasury bond holdings have increased from $1.661 trillion to $1.7172 trillion.

    The $51.1 billion increase in U.S, debt the Fed's bought outstripped the $47.2 billion in new debt by $3.9 billion.

    With no end in sight to QE policies, the Fed will continue to buy an overwhelming proportion of the new debt the U.S.A. is expected to create in 2013. At the current pace, total 2013 Fed Treasury purchases will reach $540 billion. The CBO is estimating that the federal deficit will expand by about $845 billion.

    That means 64% of the new debt created by federal spending this year will shift from the U.S. Treasuries balance sheet over to the Fed.

    We used to worry about what would happen when the Chinese and Japanese central banks decided to stop funding excessive American spending. Apparently, now we know: Our government will just cook the books to shift the balances around.

    Of course, interest rates will inevitably rise before the trillions of dollars of debt come due. With higher interest rates, the Fed will have to start selling these bonds at a loss to absorb reserves. Then the situation will reverse and taxpayers will be on the hook for bailing out the Fed.

    When that happens will have something far more disturbing to worry about than foreign debt.

     

    When Pills and Medicines Get Into the Wrong Paws

    Cases of accidental pet poisonings from human medications and supplements are on the rise. Along with Jack Eichinger, MarketWatch's Kelli Grant joins Lunch Break with a look at the latest numbers, and how you can keep your pet safe. Photo: Jack Eichinger.

    Annie, the Berlin family's three-year-old Cavachon, has always been alert to the possibility of dropped food, not least thanks to living with three kids under the age of 15.

    So when Josh Berlin, 48, went to the kitchen to take two Tylenol for a headache last August, Annie was hot on his heels. Shaking out gel capsules from the bottle, Mr. Berlin accidentally dropped three from his hand to the floor.

    Enlarge Image

    Close Alyson Aliano for The Wall Street Journal

    'Anything on the kitchen floor, she thinks it's fair game,' says Beverly Hills, Calif., pet owner Ronna Berlin of her family's three-year-old Cavachon, Annie, pictured at home.

    "Before I could do anything, she had lapped one up," he recalls. Knowing that Tylenol's active ingredient, acetaminophen, is toxic to pets, the Berlins rushed Annie from their Beverly Hills, Calif., home to their local veterinarian, who referred her to a nearby animal hospital. There she received an intravenous neutralizing agent and was kept overnight for observation.

    Cases of accidental pet poisonings are on the rise. A new study from the American Society for the Prevention of Cruelty to Animals reports that its Animal Poison Control Center, based in Urbana, Ill., handled more than 180,000 calls about poisonous substances in 2012, up 7% from the previous year. The problem might be bigger than those numbers suggest, since many pet owners�like the Berlins�head straight to the vet instead of calling a hotline, says the center's medical director, Tina Wismer.

    Enlarge Image

    Close Edward Rosen

    When Siamese cat Lilly of Doylestown, Pa., began vomiting blood, her vet suspected she accidentally swallowed her owner's blood-thinning medication.

    Human medications and supplements are some of the most common toxins ingested by pets. Prescription medicines for humans have accounted for the majority of the ASPCA center's calls for the past five years, with a 2% increase last year to more than 25,200 calls. Over-the-counter medications and supplements ranked third, up 2.8% to nearly 18,500 calls, after insecticides. Veterinary medications came in fourth, up 5.2% to nearly 10,700 calls.

    Based on the ASPCA's center's statistics, the fatality rate from accidental poisonings appears to be low, at 0.2% of cases. Dr. Wismer says the center isn't able to determine the outcome of each call, so that rate could be higher.

    Follow-up figures suggest that insecticides and rodenticides are the deadliest household items for pets. But common medicines for humans can also prove lethal, depending on the pet's weight, the amount consumed and the strength of the toxin. "One acetaminophen will kill a cat," says Kevin T. Fitzgerald, a veterinarian with VCA Alameda East Veterinary Hospital in Denver.

    Enlarge Image

    Close Alyson Aliano for The Wall Street Journal

    Cavachon Annie lapped up one Tylenol before being rushed to the vet. With owners Paige, Becca and Will Berlin in Beverly Hills, Calif.

    Symptoms vary by toxin. An amphetamine such as Adderall, used in humans to treat narcolepsy and attention-deficit hyperactivity disorder, triggers seizures in both dogs and cats. An anti-inflammatory like ibuprofen might result in stomach ulcers or kidney failure, says Jules Benson, vice president of veterinary services for pet insurer Petplan.

    Pets' tastes tend to follow prescription and health trends. In 2012, calls about prescription pain medications jumped 63%; antidepressants 47.5%. "More and more people are on these drugs, and dogs find them on the nightstand," says Dr. Fitzgerald. And it isn't always the medication they want in the first place: Prescription bottles can make an attractive chew toy for a bored pet.

    Enlarge Image

    Close Sarah Rothmann

    Shakespear, a Basset Hound in Charlotte, N.C., overdosed on pain pills intended for another dog.

    There is some evidence, too, that medications have gotten more tempting in recent years. Supplements for joints are often made of beef cartilage or shellfish, and more manufacturers are using gelatin-based soft gels or capsules, says Tod Cooperman, president of ConsumerLab.com, a website that evaluates supplements. A dog's sweet tooth makes sweetened or flavored human meds attractive. "Our pets have such good noses that even though the bottle is closed, they can smell the stuff," says Bernadine Cruz, a veterinarian with the Laguna Hills Animal Hospital in Laguna Woods, Calif.

    Dogs are more susceptible to accidental poisoning than cats. Labrador Retrievers got into the most trouble last year, accounting for nearly 14,000 calls to the APCC. "Dogs experience the whole world by tasting it," says Dr. Fitzgerald. "Cats are a little more picky."

    But not immune. Although more than half of the APCC's 10,000 cat cases in 2012 involved exposure to insecticides and toxic cleaners that cats walked across and then ingested while grooming, there are certain medications�notably, the antidepressant Effexor�that cats will willingly consume, says Dr. Wismer.

    Sarah Rothmann, of Charlotte, N.C., suspects that superior sense of smell was what prompted her 10-year-old Basset Hound Shakespear to "counter surf" last August, standing up on his hind legs to paw a bottle of veterinary pain pills off the kitchen island. The intended patient, Woody, another of her six rescued Bassets, was supposed to take half of a chewable, flavored tablet every 12 hours. Shakespear chowed down on eight full tablets in one sitting.

    It was the first time Shakespear had surfed for something that wasn't clearly food. "We have stuff up there on the counter all the time, including medications, and he's never touched it," says Ms. Rothmann, 42. After a call to the APCC, Shakespear got a daily dose for a week of human-heartburn medicine Pepcid to prevent stomach irritation from the overdose.

    Pet poisonings can be costly. The APCC typically charges $65 for consultations. In 2012, Petplan's average insurance claim for vet visits associated with accidental poisoning was $465, after a deductible of $50 to $200. Dr. Benson says the company has seen claims as high as $10,000 in more severe cases. And while insurance covers accidents including poisoning, some insurers might not cover a pet that has a track record of eating unsuitable items.

    Related Reading
    • Dog Treats Come Under FDA Scrutiny

    What to do if your pet accidentally ingests a medicine? The treatment will depend on what toxins it contains, and how recently it was ingested. "Don't go to the Internet," says Dr. Cruz. Instead, "have a number on speed dial for a pet-poison hotline" to call while getting your pet ready to travel to the vet's office. Details of what the animal has ingested, including the drug name, dosage and quantity consumed will help the vet or hotline technician determine the best course of action. Some remedies can be administered at home. Others include veterinarian's office tests such as blood work or treatment such as induced vomiting.

    Pet owners' best preventive measure, veterinarians say, is to limit access to dangerous substances in the same way they would for a child. Keep medications in a secure location like a medicine cabinet, and consume them when the pet isn't underfoot to make a grab. Even then, it is smart to have both a veterinarian and pet poison control number listed close at hand. "My dog can open the refrigerator," says Dr. Fitzgerald. "Assume anything a kid can get into, pets can get into."

    In December, New Yorker Jack Eichinger, 27, was on a conference call at home when he noticed his 1-year-old Pug mix, Lily, wasn't in view. He found her in the bedroom with a chewed-open bottle of amoxicillin left over from his recent infection.

    "She had opened the closed bedroom door, jumped up on the bed, and then the dresser, and nudged open the cabinet over it to grab the bottle," says Mr. Eichinger, who dropped the phone and ran four blocks to the veterinarian's office, where Lily vomited up the seven pills she'd ingested. "We learned not to underestimate what she's capable of."