Market Uncertainty Makes Alt Outlook Strong for 2013

Clifford Jack’s position gives him a unique perspective on the alternative investment space.

The longtime executive with Jackson National Life oversees the company’s retail investment business, which includes Curian Capital, its managed account platform. Throw in the roughly 3,800 registered representatives affiliated with National Planning Holdings, Jackson’s broker-dealer holding company, and he has a broad view of the industry, to say the least.

“We talk to a lot of advisors and their clients, as you might imagine,” Jack says. “What they’re most interested in is diversification and smoothing out volatility. Currently, it’s the series of returns that is most important to them.”

As it happens, alternatives can help, an allocation to which positions portfolios well for fiscal cliffs, anemic growth and other uncertainties in 2013 and beyond. And consumers are beginning to notice.

A report form Cogent Research released in the fall found that 78% of all advisors are using alternative investments within client portfolios, mainly for diversification purposes. In the institutional space, KPMG International reported over the summer that 50% of institutional investors surveyed said they intend to increase their allocations to alternatives, with some intending to allocate more than 10% of their total assets.

“There are more investment options, more competition and more liquidity,” Cliff says of the current crop of alternative offerings, noting that the latter will be “table stakes” for financial services companies looking to enter the retail alternative space.

“It will have to,” he adds, when asked if the march toward liquid alternatives will continue in 2013. “Most retail investors are not able to afford the lockup that is so readily available to institutions.”

Alternative investments were criticized by industry watchers and consumer advocates in the wake of the financial crisis in 2008 for not performing to expectations, with many supposedly non-correlated asset classes behaving in a correlated manner. Has the problem since been corrected, and can they be trusted if a significant downturn or even recession were to occur in the coming year?

“A lot of the products were long/short products, and they had more correlation,” says Tim Clift, chief investment strategist with Envestnet PMC. “It was these early adopters that had trouble. There are now over 1,000 alternative strategies available, which result in more choices in the types of product, which in-turn makes them more prepared for what might happen in 2013.

“Alts have evolved, and in my view they are better able to dampen volatility and are less correlated than the last crisis,” Jack adds. “Who knows what the next crisis will bring, and the next crisis won’t behave as the last, but we’re seeing an expansion of products in each category, as well as an expansion in the number of categories themselves.”

For example, he notes the rise in the number of options in the global macro fund category now available to consumers, but also sees new categories like credit investments taking hold.

“Long/short funds have been around forever, but now you have things like long/short credit funds,” Jack explains. “Also, there are various new categories that traditionally did not offer liquidity, but do now; private equity would be one.”

Clift notes the 20% correction markets experienced the in 2011, and argues market-neutral, equity arbitrage-type strategies help up particularly well.

“We’re seeing an increase in the number of alternative funds, and definitely in asset flows,” he adds. “Investors are looking for strategies that are separate from market direction.”

Clift especially sees interest in alternative strategies involving fixed income.

“Interest rate risk is a major concern at the moment,” he says. “Once interest rates rise it will be a significant problem, especially with so much currently allocated to that asset class. Until now, much of the product development in alts has been on the equity side, with not as much seen on the fixed income side. That will change going forward, he says.

Alternative investments are now the fourth major asset class [joining equities, fixed income and cash], Clift concludes.

“We recommend an allocation of 20%, but we’re only seeing allocations as an industry in the 3% to 5% range, so we still have a long way to go.

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• View AdvisorOne's calendar of Outlooks for 2013.
• Check out AdvisorOne’s landing page for Outlooks for 2013.
• Read How’d They Do? Judging Best 5 Investment Picks for 2012 at AdvisorOne.

Top Stocks For 4/5/2013-4

Crown Equity Holdings Inc. (OTCBB:CRWE) announced recently that it has launched its crwenewswire.fr website to provide news in France’s native language. Crown Equity Holdings Inc. had previously launched its German website crwenewswire.de and is launching its Canadian website crwenewswire.ca shortly.

“The new website is one step in many towards the company goal of expanding its footprint internationally, ” commented Kenneth Bosket, President and CEO of Crown Equity Holdings Inc. “Our goal for 2010 is to have all CRWE’s clients’ press releases, articles and news content published in every major financial country’s native language, as well as within cities of every state of our country,” stated Mr. Bosket.

Crown Equity Holdings Inc. is a consulting organization which provides and assists small business owners with the knowledge required in taking their company public, and has re-focused its primary vision with its aligned group of independent website divisions to providing media advertising services, as a worldwide online media advertising publisher, dedicated to the distribution of quality branding information, as well as search engine optimization for its clients.

First Solar, Inc. (NASDAQ:FSLR) recently announced that it has signed agreements with seven key customers for a 380 megawatt increase in orders for 2011 over previously announced volumes. The expanded contracts are with existing customers and will serve predominantly European markets.

First Solar manufactures solar modules with an advanced semiconductor technology and provides comprehensive photovoltaic (PV) system solutions.

First South Bancorp, Inc. (NASDAQ:FSBK) the parent holding company of First South Bank, reports that on September 23, 2010 the Company’s Board of Directors declared a quarterly cash dividend for the quarter ended September 30, 2010 of $0.09 per share, payable October 28, 2010 to stockholders of record as of October 4, 2010.

First South Bank operates through its main office headquartered in Washington, North Carolina, and has 28 full service branch offices and one loan production office located throughout eastern, northeastern, southeastern and central North Carolina.

First Horizon National Corp. (NYSE:FHN) will announce third quarter 2010 financial results in a news release prior to the market opening on Oct. 15 followed by a conference call at 8:00 a.m. Central Time where management will review earnings and performance trends.

First Horizon National Corporation operates as the holding company for First Tennessee Bank National Association, which provides various financial services in the United States and internationally.

What Is Quantitative Trading and Who Can Do It

What is Quantitative Trading?

Quantitative trading is a term which indicates removing all human emotions from the investing or trading process. Basically have a computer system make all the decisions for you; you just pull the trigger, so to speak.

Emotions are your enemy when it comes to trading or investing in the financial markets. Fear and Greed are the two arch enemies which fuel trading. For the most part anyway. So can we really trade without any emotional involvement? That’s the question we are going to try and answer below.

Analyze your trading time frame

Day Traders are usually stuck in front of your computer screen and watching each tick on the market as it ticks by. This can cause you some major headache and it will be almost impossible to contain fear or greed.
Swing Traders often times have a trading “system” which allows them to place trades and wait for the “prediction” to occur and then exit out of the position. Usually they have safeguards in place by placing a “Stop Loss” order together with the order.
Long Term Investors will be the ones that are involved the least on the day-to-day operations of the markets. However their emotions are not easily contained if the stock goes into a downward spiral due to some bad news effecting the company.

If you are a Day Trader, unless you have piles of cash which you don’t mind losing, then you are the least likely to benefit from Quantitative Trading or Investing. Not because you don’t want to, but because it will be harder to contain fear of losing more money, or being greedy and earning more money.

Swing trading strategy, in my opinion, is most likely to succeed in quantitative trading. Usually swing traders have a plan of when to enter a position, where to place the stop loss order and when to exit or place a trailing stop. If they just trust their system to do it’s thing, they should be OK.

Long term investors are the least likely to be able to take advantage of Quantitative Trading or Investing. Simply because they rely too much on the outside noises such as news releases, advice of their broker or the hot tip they got from someone who claims to know a lot about the markets. They react to every little thing.

In my opinion, only people who can trade or invest quantitatively are the ones who have a plan, stick to it and have enough cash to support their draw downs. It becomes harder and hard to make any money trading and keep your emotions out of your decisions if you have less and less money each day to trade or invest with. But if you have a system in place, and are able to sustain initial losses without bankrupting you, you will do fine. Otherwise, you just simple have to accept the fact that emotions are part of the game, for the majority of the game, and that you will be losing money, for the most time.

Mentor is the Founder and Publisher of http://RogueReason.com.

GM CEO: Auto Sales Will Keep Growing

U.S. auto sales are expected to top 15 million this year, General Motors (NYSE: GM  ) CEO Dan Akerson said in an interview on Thursday, and he expects those sales numbers to climb for at least four or five more years.

Akerson, in an appearance�on CNBC on Thursday morning, attributed a recent slowing in retail auto sales growth to the payroll tax increase that hit in January and said that the U.S. economy's recovery hasn't been as strong as he'd like.

But for all that, he's optimistic about the prospects for U.S. auto sales for the next several years � and about GM's chances of getting a larger share of those sales.

"Pent-up demand" to drive sales for several more years
Akerson feels that U.S. consumers' demand for new cars and trucks will continue to be strong for several years as people continue to move to replace aging vehicles. The average age of individuals' vehicles in the U.S. is now at about 11 years old, an all-time high.

Akerson feels that, despite a less than robust U.S. economy and lingering high unemployment, demand for new vehicles will continue to be brisk until that average age falls back to the eight- or nine-year range.

It's a view I've heard from Ford (NYSE: F  ) CEO Alan Mulally as well, who has often referred to "pent-up demand" in the U.S. market resulting from the huge dip in car sales during the 2008-2009 economic crisis, and the slow recovery in sales since then.

As most auto executives see it, somewhere in there a lot of cars and trucks that might have been replaced during good times didn't get replaced. Eventually, the thinking goes, those purchases will need to be made.

Still a way to go before the good times return
Even if U.S. auto sales top 15 million in 2013, they still won't quite have returned to pre-recession levels, and that may mean they'll still have more room to grow.

U.S. auto sales nearly hit�17 million in 2005, before settling back to 16.5 million in 2006 and 16.14 million in 2007 � that last a result that worried pundits characterized at the time as the weakest in a decade.

But automakers have been hoping for that kind of "weakness" ever since. Sales went sharply downhill as the economic crisis took hold in 2008 and 2009, and have made a slow recovery since.

Under Akerson, GM has moved aggressively to overhaul its entire product line. Over the next couple of years, GM will go from having the oldest product line in the U.S. to the freshest, as a slew of new models begin arriving at dealers.

If Akerson's view of sales trends over the next few years is correct, GM's timing may turn out to be pretty good.

Worried about GM?
Few companies lead to such strong feelings as General Motors. But ignoring emotions to make good investing decisions is hard. The Fool's premium GM research service�can help, by telling you the truth about GM's growth potential in coming years. (Hint: It's even bigger than you think. But it's not a sure thing, and we'll help you understand why.) It might help give you the courage to be greedy while others are still fearful, as well as a better understanding of the real risks facing General Motors. Just click here�to get started now.

Dish Network Raises $2.3 Billion With Debt Offering

Dish Network (NASDAQ: DISH  ) has more than doubled the debt offering of senior notes, originally expected to total approximately $1 billion, that it first�announced on April 2. According to a recent press release, Dish has placed two senior note offerings totaling $2.3 billion, which are available to qualified institutional and offshore investors only.

The first offering is for $1.1 billion senior notes, which will pay 5.125% and come due in 2020. The second has a $1.2 billion principal amount and will pay investors 4.25% and mature in 2018. Proceeds from the offering will be used for "general corporate purposes, which may include wireless and spectrum-related strategic transactions," according to the company.

Energy Up Despite Drill Ban; Spill Rate Estimate Rises

Shares of the Select Sector SPDR Energy exchange-traded fund (XLE) are higher by $1.47, or 3%, at $53.36, despite President Obama’s announcement, as widely expected, that the administration is suspending consideration of permits to drill in the Artic near Alaska until next year, and will extend for six months the deepwater drilling ban.

The President referred to the corrupt relationship between the oil industry and Federal regulators. While pressing the point that BP (BP) had a genuine interest in plugging the leak in the Gulf as soon as possible, Obama acknowledged that BP might have an interest in downplaying the scope and scale of the spill, which is still disputed.

For example, U.S. Geological Survey director Marcia McNutt said today that a team of researchers she is heading up has estimated that the rate of flow of the leak may be as great as twice the daily rate of flow of Exxon Mobil’s (XOM) Valdez spill, at a rate of 12,000 to 19,000 barrels per day. That’s sharply higher than the 5,000 barrels-per-day figure that’s been circulating for weeks.

BP shares are currently up $2.40, or 6%, at $44.81; Transocean (RIG) has also held onto gains, rising $1.40, or 2.4%, to $59.99; Halliburton (HAL) is up 73 cents, or 3%, at $26.52; and Cameron International (CAM) is up $1.24, or 3.4%, at $37.31.

5 Roth IRA Rules You Need to Know

A Roth IRA can be your most powerful tool in saving for retirement. But to take advantage of this amazing wealth-building strategy, you need to be familiar with all the Roth IRA rules that define whether you can use it and how to make the most of it. Let's take a look at the five most important Roth IRA rules to keep in mind.

Rule 1: Too much income means no Roth for you.
The first rule to keep in mind is that some people aren't allowed to contribute to a Roth. For 2013, single filers with more than $127,000 in what's known as modified adjusted gross income can't make any contribution to a Roth, while those with incomes between $112,000 and $127,000 are stuck with reduced contributions. For joint filers, the similar limits are $178,000 and $188,000.

Rule 2: The amount you can contribute just went up.
Roth contribution limits are indexed for inflation, and in 2013, they went up. Now, you can put $5,500 into your Roth IRA, and if you're 50 or older, you can add another $1,000 on top of that. If you haven't made a contribution for 2012 yet, you still have until April 15 to do so -- the limits for last year are $5,000 and $6,000, respectively.

Rule 3: Anyone can convert a traditional IRA to a Roth.
It used to be that income limits prevented some taxpayers from converting existing traditional IRAs to Roth IRAs. But in 2010, those rules went away, and now, anyone can convert. Just keep in mind that converting to a Roth usually creates immediate tax liability, as you have to include the amount converted in your taxable income for the year of the conversion. Given the tax-free benefits of Roth IRAs, paying extra tax now might be worth it, but you still have to run the numbers.

Rule 4: Be careful when you take distributions from your Roth IRA.
If you do everything right, money you take from your Roth will always be tax-free. But complicated rules govern withdrawals from Roth IRAs, and if you're not careful, you can turn tax-free income into taxable income or even have to pay penalties. In general, you can withdraw your initial contributions at any time without penalties or tax consequences, but if you take out earnings within the first five years you have the account or before you turn 59 1/2, you'll owe a 10% penalty unless it qualifies for exceptions such as disability, first-time home costs, or higher-education expenses.

Rule 5: Be smart about beneficiaries.
If you plan to use up your Roth IRA assets before you die, then worrying about beneficiaries may seem silly. But Roth accounts can be great estate planning tools because they allow your heirs to take advantage of their tax-free benefits as well. So in choosing a Roth beneficiary, be sure to take into account the fact that your chosen heirs will be allowed to draw down the Roth gradually over their remaining life expectancy. The younger the beneficiary, the longer those assets will grow tax-free.

Use your Roth the right way
Roths are great tools, but knowing these Roth IRA rules is important to ensure you don't make mistakes that could jeopardize your retirement savings. For more on Roths, be sure to take a look at the IRS website, which includes a lot of useful information on both traditional and Roth IRAs.

Once you have a Roth IRA set up, the best approach to using it to invest is to choose great companies and stick with them for the long term. The Motley Fool's free report "3 Stocks That Will Help You Retire Rich" names stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of.�Click here now�to keep reading.

Facebook: Holding Share, Despite Twitter, WhatsApp, Says JP Morgan

As I mentioned this morning, J.P. Morgan analyst Doug Anmuth today reiterated an Overweight rating on shares of Facebook (FB), and a $35 price target, writing that the underperformance of the stock since its January earnings report — it is down 16% since that the close of that day, and down 1% for the year so far — is all about fears of weakening engagement as competing social networking services such as WhatsApp and Snapchat and Twitter take away people�s attention.

But Anmuth, writes that competing services are having a minimal impact, according to data. He urges investors to take advantage of the stock�s recent weakness. The note lifted Facebook stock 83 cents, or 3.3%, today, to close at $26.25.

Anmuth briefly notes what the “engagement metrics” looked like at the end of Q4:

Facebook ended 4Q12 with 1.06B MAUs and 618M DAUs, a DAU/MAU ratio of 58.5%, up from 57.2% in 4Q11 and 58.0% in 3Q12; Facebook noted that L6 of 7�users who visit the site in 6 of the last 7 days�was at a record high. In measuring Likes on a page as a form of engagement, Facebook noted that it only saw a 2% negative impact in Likes on pages with ads, suggesting limited overall pushback from users. And over the past year, product changes and ranking improvements led to a roughly 50% increase in the amount of feedback in the News Feed.

Anmuth then writes that Facebook's share of time spent online is rising, not falling, based on data from comScore, for both desktop and mobile use:

Overall, our analysis of comScore Desktop and Smartphone data inthe US suggests that Facebook continues to increase its share of total Internet minutes, without seeing any material impact from these other services. According to comScore, Facebook has increased its total minutes 22% to 114.3B minutes in February 2013, up from 93.5B in March 2012. During that time Facebook�s share of total minutes across both desktop and mobile (smartphones only�excluding tablets) grew to 14.8% in February 2013, up from 12.7% in March 2012. Over this same period, services characterized as non-Facebook including Instagram, Twitter, WhatsApp, and Snapchat have increased their share of total Internet minutes from 0.6% to 1.8%

Anmuth offers a chart of how Facebook stacks up to competitors (click to see at larger resolution):

Anmuth also sees minutes spent with Facebook by each unique visitor rising, even as minutes decline on the desktop, and argues Facebook is capturing more total mobile minutes spent on the Internet than are other services:

While desktop minutes per UV have declined from 391 minutes in March 2012 to 320 in February 2013, mobile minutes per UV have increased from 435 to 785 over the same period. When comparing Facebook�s minutes to the same set of non-Facebook social networks and services mentioned above, we can see that within mobile (smartphone only) minutes, Facebook continues to take share of total Internet mobile minutes while non-Facebook has remained relatively flat at ~4% since July 2012.

And here's Anmuth's chart of those minutes per user:

Top Stocks For 4/4/2013-2

Delivery Technology Solutions, Inc. (PINK SHEETS:DTSL) and its subsidiary Universal Delivery Solutions, Inc. have been chosen by one of the world’s largest technology and hardware companies to feed legions of personnel at the nation’s largest electronics chain in a dramatic catering event on “Black Friday,” November 26, 2010. UDS is the operating unit of Delivery Technology Solutions, Inc., the leader in delivery management technology.

“On the day after Thanksgiving, in the retail world, it is Black Friday,” said UDS CEO Ryan Coblin, “and you have to feed the troops to maintain their high energy level. At 888-SUB-TO-GO we are delighted to provide the technology and skilled personnel to manage such a giant catering event smoothly and seamlessly.”

“Thanks to a giant national footprint of restaurants and our technology partnership, we are able to handle such widespread catering projects,” Mr. Coblin added. “It gives our customers an opportunity to be inventive and achieve their goals at the same time, without having to sweat the details. We do the sweating for them.”

Delivery Technology Solutions, Inc. is the leader in providing comprehensive custom-developed catering/delivery solutions to industries throughout North America, including restaurants, retail and others. The company’s solutions offer a seamless system that integrates Customer Relationship Management (CRM) and Call Center IT services through a proprietary technology backbone to offer convenience, consistent quality, flexibility, accountability and value for consumers and companies.

Exceed Company Ltd (Nasdaq: EDS), the owner and operator of “Xidelong” brand – one of the leading domestic sportswear brands in China, has launched its upgraded investor relations website, http://www.ir.xdlong.cn . The website provides details on the Company’s strategy, operations, financials, news, and investor events.

Exceed Company Ltd. designs, develops and engages in wholesale of footwear, apparel and accessories under its own brand, XIDELONG, in China. Since it began operations in 2002, Exceed has targeted its growth on the consumer markets in the second and third-tier cities in China. Exceed has three principal categories of products: (i) footwear, which comprises running, leisure, basketball, skateboarding and canvas footwear, (ii) apparel, which mainly comprises sports tops, pants, jackets, track suits and coats, and (iii) accessories, which mainly comprise bags, socks, hats and caps.

Excel Maritime Carriers Ltd (NYSE: EXM), an owner and operator of dry bulk carriers and an international provider of worldwide seaborne transportation services for dry bulk cargoes, reports the results of the annual general meeting of its shareholders. At the meeting the following proposals were approved and adopted: 1) The election of seven (7) Directors of the Company, as set forth in Proposal One in the Proxy Statement distributed to shareholders in connection with the AGM, and 2) The appointment of Ernst & Young as the Company’s independent auditors for the fiscal year ending December 31, 2010, as set forth in Proposal Two in the Proxy Statement distributed to shareholders in connection with the AGM.

Excel is an owner and operator of dry bulk carriers and a provider of worldwide seaborne transportation services for dry bulk cargoes, such as iron ore, coal and grains, as well as bauxite, fertilizers and steel products. Excel owns a fleet of 40 vessels and, together with seven Panamax vessels under bareboat charters and one Capesize vessel that operates through a joint venture in which it participates by 71.4%, operates 48 vessels (6 Capesize, 14 Kamsarmax, 21 Panamax, 2 Supramax and 5 Handymax vessels) with a total carrying capacity of over 4.0 million DWT.

Excel Trust, Inc. (NYSE:EXL), a retail focused real estate investment trust (REIT), has acquired two properties for approximately $70 million. Since its initial public offering, Excel Trust has grown its portfolio to a gross asset value of approximately $303 million, not including properties under contract.

Excel Trust, Inc. is a retail focused REIT that targets community and power centers, grocery anchored neighborhood centers and freestanding retail properties. The Company intends to elect to be treated as a REIT, for U.S. federal income tax purposes, commencing with the taxable year ending December 31, 2010.

Top Stocks To Buy For 4/4/2013-1

Caterpillar Inc. (NYSE:CAT) witnessed volume of 25.78 million shares during last trade however it holds an average trading capacity of 7.98 million shares. CAT last trade opened at $104.62 reached intraday low of $103.00 and went -5.78% down to close at $105.15.

CAT has a market capitalization $67.76 billion and an enterprise value at $97.92 billion. Trailing twelve months price to sales ratio of the stock was 1.52 while price to book ratio in most recent quarter was 5.70. In profitability ratios, net profit margin in past twelve months appeared at 7.81% whereas operating profit margin for the same period at 11.21%.

The company made a return on asset of 5.29% in past twelve months and return on equity of 33.31% for similar period. In the period of trailing 12 months it generated revenue amounted to $47.30 billion gaining $74.46 revenue per share. Its year over year, quarterly growth of revenue was 57.20% holding 425.80% quarterly earnings growth.

According to preceding quarter balance sheet results, the company had $3.65 billion cash in hand making cash per share at 5.66. The total of $29.65 billion debt was there putting a total debt to equity ratio 225.78. Moreover its current ratio according to same quarter results was 1.50 and book value per share was 19.60.

Looking at the trading information, the stock price history displayed that its S&P500 52 Week Change illustrated 21.98% where the stock current price exhibited up beat from its 50 day moving average price of $103.52 and remained above from its 200 Day Moving Average price of $103.59.

CAT holds 644.45 million outstanding shares with 642.55 million floating shares where insider possessed 0.27% and institutions kept 66.90%.

Nikkei Down Ahead of BOJ Outcome

Asian markets were down Thursday tracking a negative lead from Wall Street, with a stronger yen hitting the Japanese market ahead of the Bank of Japan's meeting outcome.

More in Markets

• Note to People's Bank of China: Speak Up
• Japanese Stock Rally Shifts to a New Gear
• Won Slumps on North Korea's Threats
• Asian M&A Activity Lags, but Outlook Is Brighter
• China to Pass U.S. as Top Oil Importer
• Doubts Cast on Chinese Exports

Investors took a cue from Wednesday's losses on Wall Street following lower-than-expected readings on the U.S. nonmanufacturing sector and private-sector jobs growth.

Focus was on the BOJ's policy meeting result due later Thursday. Expectations for fresh easing measures are high as it will be the first meeting under new governor Haruhiko Kuroda who is committed to realizing the bank's 2.0% inflation target.

All 10 economists surveyed by Dow Jones expect the Bank of Japan to expand its asset purchases, with some betting it will increase the amount by �15 trillion-�20 trillion a year and start buying Japanese government bonds with maturities longer than three years, the current limit.

Seven of those surveyed say the central bank will decide to make its asset-buying program "open-ended" from this month or next, instead of waiting for next January as scheduled. Two expect the introduction of a new easing target in addition to its existing inflation and asset-buying targets.

"In the absence of open-ended, multi-asset class purchases to bring consumer price inflation to 2.0% within two years, there is a more than reasonable chance that the Board may well disappoint," David Scutt, Treasury dealer at Arab Bank wrote in a note to clients.

The Nikkei Stock Average underperformed its regional peers, falling 1.7% amid a stronger yen. Major exporters were lower: Canon dropped 4.3%, Nintendo slid 2.6% and Toyota Motor fell 1.4%.

Mitsubishi Heavy Industries was a bright spot amid a sea of red in Tokyo, rising 0.4% on a Nikkei report that the company, along with France's Areva SA, has clinched a joint contract to construct a nuclear power plant in Turkey.

In Sydney, the S&P/ASX 200 fell 0.8%. Resources plays weighed on the Australian market amid commodity price weakness including a decline in copper to an eight-month low overnight. BHP Billiton fell 1.3%, Newcrest Mining dropped 4.2% and Rio Tinto lost 1.0%.

In foreign exchange markets, the yen was stronger against the U.S. dollar and the euro as investors priced-in worries that the Bank of Japan's policy outcome could underwhelm market participants.

The greenback was recently at �92.95 versus �93.05 late Wednesday in New York, while the euro was at �119.39 from �119.51.

"Our base line view remains that risks on USD/JPY this month are skewed to the downside given sky-high expectations," Westpac's Sean Callow wrote in a note.

Investors were also focused on the European Central Bank's policy decision due later Thursday as well as Friday's U.S. jobs data for trading cues.

South Korea's Kospi Composite fell 1.6% amid continued concerns over North Korea's escalating military threats, while Singapore's Straits Times Index was off 0.2%.

Markets in China, Hong Kong and Taiwan were shut for holidays.

Write to John Phillips at john.phillips@dowjones.com

QCOM: Samsung ‘S4′ to Offset iPhone Sluggishness, Says Susquehanna

Susquehanna Financial Group‘s semiconductor analyst Chris Caso today reflects on the likely impact to Qualcomm (QCOM) from what he’s gleaned about Apple‘s (AAPL) iPhone plans, where Qualcomm’s baseband processor is the dominant wireless chip.

Caso, who has a “Positive” rating, and an $85 price target on Qualcomm stock, writes that according to his “checks” of the electronics supply chain, Q2 sales of the iPhone will be under pressure but Q3 will “see a catalyst from the ramp of the [iPhone] 5S, and a more meaningful catalyst once a larger screen iPhone enters production.”

According to Caso, the numbers for Q1, meaning, Apple’s fiscal Q2 ending this month, are about as expected for the iPhone, but Q2 is less clear:

We believe that 1Q iPhone production came in at approximately 35 mln units, at the low end of our prior 35-40 mlm expectation [�] The current 1Q build plans appear close to current expectations (1Q consensus estimate is about 37 mln units). In addition, our conversations with iPhone component suppliers through the quarter (including recent follow-up checks) indicate no substantial order cuts since the beginning of the quarter [�] Visibility for 2Q has been difficult since we expect production for the new iPhone 5S to begin in June. The volume of 5S production has a big effect on the 2Q build plan, since production of existing models always declines ahead of a transition.

Caso is concerned there’s no larger-screen iPhone forthcoming, but he thinks Qualcomm will be okay by riding its participation in Samsung Electronics‘s (005930KS) Galaxy S4:

In our view, the slowdown in iPhone is an AAPL-specific issue, as evidenced by the upside we have observed from Samsung this quarter (even before the Galaxy S4 launch). We think the issue is clear and simple � consumers want a larger screen-size iPhone. Our checks do indicate that a larger screen-size phone is on the roadmap, but the timing remains uncertain. SFG analyst Mehdi Hosseini�s checks (Smartphone Domination Continues, Semi Benefiting from Better DRAM ASPs) indicate upside of about 7 mln units in 1Q, which is before the launch of the company’s flagship phone in 2Q. We think the incremental upside from Samsung more than offsets the sluggish performance by AAPL. In addition, for QCOM the share shift from AAPL to Samsung is beneficial to both QTL (Samsung royalties are calculated at higher ASPs) and QCT (QCOM will have about double the semiconductor content in the initial versions of GS4 vs. iPhone). We therefore think the strength at Samsung provides a fairly smooth transition into the seasonally stronger 2H for AAPL.

Qualcomm stock today is up 11 cents at $66.36.

Some Numbers at TRW Automotive Holdings that Make Your Stock Look Good

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

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

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

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

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

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

The standard way to calculate DSO uses average accounts receivable. I prefer to look at end-of-quarter receivables, but I've plotted both above.

Watching the trends
When that red line (AR growth) crosses above the green line (revenue growth), I know I need to consult the filings. Similarly, a spike in the blue bars indicates a trend worth worrying about. TRW Automotive Holdings's latest average DSO stands at 55.5 days, and the end-of-quarter figure is 51.3 days. Differences in business models can generate variations in DSO, and business needs can require occasional fluctuations, but all things being equal, I like to see this figure stay steady. So, let's get back to our original question: Based on DSO and sales, does TRW Automotive Holdings look like it might miss its numbers in the next quarter or two?

I don't think so. AR and DSO look healthy. For the last fully reported fiscal quarter, TRW Automotive Holdings's year-over-year revenue grew 1.2%, and its AR dropped 1.0%. That looks OK. End-of-quarter DSO increased 0.0% over the prior-year quarter. It was down 12.7% versus the prior quarter. Still, I'm no fortuneteller, and these are just numbers. Investors putting their money on the line always need to dig into the filings for the root causes and draw their own conclusions.

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The Most Hated Stock on the Market Right Now Could Have 60% Upside

For a few years, this stock was the best investment in clean energy, according to many investors and analysts. Bar none. The company boasted intriguing technology, stunning sales growth and robust profits. Now, by one measure, it's the single worst clean energy investment on the stock market: The company lost investors nearly $15 billion in the past two years, in what must rank as the most stunning implosions investors have ever seen.

You usually see a stock chart like this when a company has committed fraud or otherwise taken steps to mislead shareholders, in effect running a house of cards that was designed to steal money from an unwary public. Yet in this company's case, it was primarily a victim of circumstance. I'm talking about First Solar (Nasdaq: FSLR).

A promising feature Just a few years ago, solar power appeared to have the backing of many governments and businesses, leading the company to pump up research and development (R&D) spending and quickly expand manufacturing capacity. As we now know, that industry support proved fleeting once government budgets became constrained and traditional fuel sources like natural gas plunged in value. And First Solar, like every other industry player, is struggling to adapt to a smaller market opportunity and profound industry pricing pressures. Most analysts -- yes those same ones that only recently had $150 or even $200 price targets --now suggest you steer clear of this stock. Most have price targets in the low $20s or teens and rate the stock as "Neutral" or a "Sell." The dislike for this company is now nearly universal. Whenever you hear that the crowd agrees about a stock, it often helps to listen to what a contrarian voice has to say. (It would have been useful to hear from bearish analysts on this stock when it was soaring toward the $200 mark, for example.) Now that it's in the teens, it's time to give a close look at a recent upgrade from Merrill Lynch. In mid-April, the firm boosted its rating on First Solar to a "Buy," with a $30 price target, which represents more than 60% upside. Finally waking up The ratings upgrade came right after the company belatedly announced plans to cut manufacturing capacity. Merrill correctly notes that demand for solar power equipment hasn't disappeared. Instead, supply is the real challenge after three straight years of capacity expansion at nearly every major player. A plunge in pricing is now leading to the end of any further industry expansion plans, and in some cases, companies are cutting capacity. Lower costs should have a tangible impact on First Solar's income statement, according to these analysts. Their 2013 EPS (earnings per share) forecast just rose from $2.80 to $3.40. And whereas EPS was expected to slump down to $2.30 by 2014, First Solar should now earn closer to $3 by then. That forecast bakes in more tough times to come as industry pricing keeps falling. (The fact the consensus 2014 EPS forecast remains above $4.50 tells you that many analysts aren't paying attention to their earnings models at this point.) Merrill Lynch acknowledges that this former technology leader is becoming a technology laggard. The company's solar equipment, using what's known as thin-film technology, couldn't generate as much juice as traditional solar panels, but it was so much cheaper that First Solar could offer a compellingly lower total cost of ownership. Not anymore. Traditional solar panel makers have made so much progress on costs that they now offer a better return on investment for most customers. Merrill Lynch concedes that this issue remains a long-term concern. "We think that (traditional) crystalline solar cell prices could be in the low to mid $0.70s by mid-2013, and it's not yet clear how FSLR intends to cope with that. Yesterday's (cost-cutting) move might best be described as taking the pressure off for the intermediate term -- fundamental problems remain." Yet here's the key takeaway, as far as Merrill Lynch is concerned... Even with all of the current and future headwinds in place, First Solar remains nicely profitable. And the plunge in the stock below $20 is simply too much punishment. Merrill's $30 price target reflects a multiple of 10 on projected 2014 earnings. For my purposes, I need a bit more to go on than that. That's why I'll be listening quite closely on the conference call when First Solar releases quarterly results this Thursday, May 3. I want to hear about the company's technology roadmap. Management must lay out the case for the company's ability to re-take leadership on cost per kilowatt. And they need to restore confidence that expectations have come down far enough for 2013 and beyond, and that there is now a bias for better-than-expected growth and margins in the quarters ahead, and not worse-than-expected, as many now fear. Still, Merrill's call is grounds enough for contrarian investors to revisit this hated stock. On a broader level, the brutal supply-and-demand dynamics that have beset the solar power industry may slowly be turning. According to Citigroup analysts, demand in a number of European countries has started to rebound in the past few weeks (leading the firm to upgrade several solar stocks, but not First Solar). And they add that demand in China and the United States represent ongoing drivers of demand, with Japan emerging as a major new source of demand in coming quarters as the country tries to wean itself off nuclear power. Improving investor sentiment toward the solar sector would surely provide a boost to First Solar's shares as well. Risks to Consider: First Solar has been spending heavily on R&D and will need to come up with an even more compelling technology roadmap if it is to start boosting profits into the middle of the decade. Tips>> First Solar has missed EPS forecasts by at least 15% for three straight quarters. Many likely expect that to happen again this Thursday. Take this time to brush up on the business model and the numbers, because if the quarter -- and outlook -- are not as bad as feared, then a relief rally could ensue. That calls for quick action after the numbers are out, before analysts have time to change their target prices.

Ex-SEC Chief Schapiro Joins Compliance Firm Promontory

Former SEC Chairwoman Mary Schapiro testifying in the House. (Photo: AP)

Mary Schapiro, former chairwoman of the Securities and Exchange Commission, has joined Promontory Financial Group as a managing director and chairwoman of its governance and markets practice.

The consulting firm, founded by former Comptroller of the Currency Eugene Ludwig, also includes among its advisory board another former SEC chairman, Arthur Levitt, and bills itself as a strategy, risk management, regulatory and compliance consulting firm that serves clients worldwide, including many of the largest banks and other financial services companies.

“Mary is an outstanding advocate for investors and was a strong and decisive regulator during one of the most volatile periods in our financial history,” said Ludwig, in a Tuesday statement. “Her profound understanding of the U.S. and global financial markets, decades of regulatory leadership, and deeply relevant perspective and insight will add to our already significant involvement in capital markets, hedge fund and private equity advisory and compliance services. We are thrilled that Mary has chosen to join us at Promontory.”

Schapiro, who was SEC chairwoman from 2009 until December, said in the same statement that “the risk environment for firms in today’s global markets is increasingly complex. Managing those risks while balancing the interests of the many constituencies of a modern corporation challenges practices of corporate governance, regulatory policy and market behavior.”

Schapiro went on to say that “while regulators are charged with policymaking in these areas, the private sector—especially investors—has the largest stake. At Promontory, I join a team of highly experienced professionals who work with clients to meet regulatory and investor expectations while advancing the evolving norms for corporate governance and regulatory compliance. This is important not only to companies, but also to our markets and to global prosperity. I look forward to working with my new colleagues and with our clients.”

In her practice at Promontory's Washington office, Schapiro will “work with clients to ensure that the quality of corporate governance is commensurate with the demands of running modern public companies.” Promontory says she will also advise clients on risk management, drawing on insights and understanding gleaned from her deep regulatory experience as well as on her service on boards of directors of major American corporations.

Ira Sohn: Einhorn’s Worried the US Is a Bubble

David Einhorn, head of Greenlight Capital, the value-investing firm, and a pretty legendary short seller at this point in his young life, takes the podium.

Basically, he’s shorting US creditworthiness with today’s presentation.

Einhorn’s talk was “Good News for the Grandchildren,” by which he meant that your grandchildren won’t have to pay off today’s debt in years to come, as the Cassandras are always warning.

In reality, the government response to the recession has created sufficient stress to prompt a crisis much sooner, Einhorn wryly observed.

The amount of the US federal deficit has increased from a little over 3% of GDP in the 70s to over 9%, not to mention the socialization of risk through promises of social security benefits down road. The vast majority of government stimulus has increased the baseline of government spending in a long-term fashion. Government workers are high-cost and hard to fire, notes Einhorn.

How far can we travel down this path without a crisis? Einhorn wondered. What is the level of government debt that makes future default go from unthinkable to possible?

Einhorn says it’s imperative to work out a plan now to avoid falling into a debt crisis down the road. One obvious lesson of the credit crisis is to eliminate official credit ratings. The current proposals in Congress just preserve the status quo in bond ratings, which leads to bond pros exploiting “less active investors,” said Einhorn.

He cites an anecdote regarding Standard & Poor’s, one of whose representatives recently told NPR during a radio segment that S&P had “two pairs of eyes” in every country examining sovereign ratings.

“Just two?” Einhorn quotes the stunned radio jockey as saying.

He goes on to lampoon, to much laughter from the crowd, the ridiculous quotes from the S&P rep about how they huddle in a meeting to decide on sovereign ratings.

“Government leaders are learning it isn’t a good thing to have ratings agencies say things are fine even as problems are mounting, only to cut their ratings down the road,” Einhorn observed.

US Treasury Secretary Tim Geithner has effectively put all his eggs in the basket of S&P’s ratings team, says Einhorn. The danger is that banks could do what they did with Greece: load up on sovereign debt with no capital requirement, then turn around and sell credit default swaps, wrecking the credit status of the country.

Geithner has insisted the ratings agencies will never cut the US’s credit rating, but, “Mr Geithner may learn that never is a long time,” says Einhorn.

“I don’t believe a US debt default is inevitable,” says Einhorn, but unless serious steps are taken, “we might find ourselves negotiating austerity measures with foreign creditors” some day.

The recent round of money printing has not led to headline inflation, which has given central banks confidence. But don’t look to government stats for real information on inflation, Einhorn contended.

When the price of chocolate bars goes up, government simply assumes everyone switches to peanut bars. In other words, government numbers reflect don’t reflect real-world costs.

For example, medicare and higher employer health-care costs are not carried in government’s inflation statistics. “if your goal is to never see inflation, you will never see it until it is rampant.”

The Fed wants to have an accommodative�policy to encourage employment. That’s driving equity prices higher, leading to some goods purchases, and driving employment.

His conclusion: higher rates would lead to more lending to the private sector, rather than the current easy money policy, which is allowing banks go simply lend to the government and play the yield curve.

Why is the Fed proceeding with an “emergency” zero-rate money policy when the emergency is over?

A zero-rate policy can create bubbles that collapse, with terrible consequences.

And here, Einhorn does a brilliant turn recounting all manner of various post-bubble credit easings that in turn prompted other bubbles, with the Fed Reserve in each instance insisting that it didn’t see any bubbles — until it was too late.

Einhorn ends with an actual long recommendation, African Barrick Gold PLC, a gold miner that owns operations in Tanzania, among other places, traded in London under the ticker “ABG.” ABG could be added to indices going forward, including the FTSE 100, which would boost institutional ownership.

So, in conclusion, “We own some gold and some gold stocks for our investors and for ourselves. We will worry about our grandchildren later.”

Ira Sohn: Eisman Says For-Profit Ed The New Sub-Prime

Next up at the Ira Sohn Investment Research Conference is Steve Eisman, the senior portfolio manager of the FrontPoint Financial Services Fund, who says he thought he’d never see a scandal equal to sub-prime mortgages, but he’s found it: for-profit education companies, such as Apollo Group (APOL).

Eisman’s presentation is called “Subprime Goes to College.”

With for-profit ed reps literally trolling bus depots and casinos looking for the most desperate members of society that they can lure into the most expensive programs, for-profit ed is up-ending the traditional practice of students aiming for what they can afford.

“The government, students, and the tax layers bear all the risk while for-profit reaps all the profits,” states Weisman.

As of 2009, he notes, the industry has almost 10% of students but 25% of the aid disbursed.

How did all this happen? “They’ve hired every lobbyist in washington DC,” says Eisman.

And now, default rates are starting to soar.

“As long as the government continues to flood the industry with loan dollars, the industry has every incentive to continue to grow…these companies are marketing machines masquerading as universities.”

The key, as with sub-prime mortgages, was to get the accreditation bodies to give the schools the blessing of their rating, which some for-profits do with having executives sit on the boards of the accreditation bodies themselves.

What’s going to happen? Eisman sees a continuing crack-down on the industry by Washington, but also the eventual rise in gainful employment, which will start to chip away at for-profit ed’s amazing enrollment engine.

Eisman goes through scenarios for what could happen to Apollo et al. in a situation of rising employment. He sees declines for APOL and others in EPS annually of 40% or more.

Surprisingly, Eisman also goes after Washington Post (WPO), owner of the Kaplan test-prep business. In one scenario, WPO’s 2009 EPS of $9.78 could fall by as much as $33 per share — yes 440% — as total EBITDA for WPO is coming from Kaplan.

Report: U.S. Car and Light Truck Sales Up 3.4% for March

Editor's note: A previous version of this story used preliminary numbers showing a 17.6% YOY decrease for March. Final numbers from Motor Intelligence show a 3.4% increase. The story has been updated to reflect these numbers. The Fool regrets the error.

Domestic market sales for passenger vehicles and light trucks increased 3.4% year-over-year for March, according to a Motor Intelligence report released today.

Of the 21 automakers included in the analysis, Subaru sales increased the most (+13.3%), followed by BMW's 11.2% bump. General Motors (NYSE: GM  ) managed a 6.4% rise, Ford (NYSE: F  ) pulled in 5.7% more sales, and Toyota Motor (NYSE: TM  ) squeaked by with a 1% increase. Volvo sales fell 19.8%.

For calendar year-to-date sales, Ferrari has managed the largest sales increase (+18.9%). General Motors, Ford, and Toyota have all seen double-digit percentage increases in light truck sales, even as passenger vehicle sales increases remain in single-digit territory.

Motor Intelligence is part of Autodata Corp., providing automotive statistical data, market intelligence, and analysis.��

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Is Wal-Mart Losing the Retail War?

We hear it all the time: the U.S. economy is recovering.

But these signs of recovery – improving housing prices, slowly diminishing jobless claims, and manufacturing growth – aren't immediately felt in the day to day life of most Americans.

There are still the tax hikes every American experienced at the beginning of the year. Retail sales may be growing, but the effects of the sequester also have yet to be felt.

So one would assume that stores like Wal-Mart (NYSE:WMT) would be particularly profitable right now. Wal-Mart has long been the poster child for low prices and a wide product selection – a one-stop shop for all your needs ranging in everything from clothing to technology to home goods to groceries.

But lately complaints have been rolling in about the state of Wal-Mart stores. A recent Bloomberg article indicated that many U.S. Wal-Mart stores are having problems with restocking, leaving messy or even empty aisles.

Naturally, Wal-Mart officials denied these claims. One spokesperson, Brooke Buchanan, told Bloomberg:

“The premise of this story, which is based on the comments of a handful of people, is inaccurate and not representative of what is happening in our stores across the country.”

But if this isn't a widespread problem, I'd like to know where the well-stocked stores are. The several Wal-Mart stores I've been to recently have all gone to prove Bloomberg's point: aisles with large, empty sections, products moved around and messy, and waits at the checkout even when the stores are nearly empty.

Perhaps this resonates for you, too. It certainly did for Tony Martin from Glen Carbon, Illinois, who told Bloomberg, “Sam Walton must be rolling over in his grave to see what has become of his business.”

And as frustrated as you may be during your shopping experience, try to give the employees a break. For the large part, it's not the staff's fault; it's the lack thereof.

Sam's Club and Wal-Mart stores decreased their staff by 120,000 employees between 2008 and January 31 this year, at the same time increasing its number of Wal-Mart stores across the U.S. by 455.

The company is beginning to lose steam as competitor Target (NYSE:TGT) picks up the slack. Though Wal-Mart is a much bigger chain, Target is gaining a premium. On Monday, Target had a 0.2% advantage over Wal-Mart on a price-to-earnings basis. Last year, Wal-Mart led by an average 7.3%.

Wal-Mart has had a superstore group for a while, but recently Target has also moved into that territory, adding grocery sections to its stores.

Could shoppers be ditching Wal-Mart for the more-organized, well-stocked Target? If Wal-Mart doesn't do something soon, a reversal could be coming.

 

Why AstraZeneca, Stobart, and Telecom Plus Should Beat the FTSE 100 Today

LONDON -- The FTSE 100 (FTSEINDICES: ^FTSE  ) has started the week well, up 1.16% to 6,486 points as of 8:25 a.m. EDT. The effect of the Cyprus crisis seems to be receding, and the index of top U.K. shares appears to be pretty much unaffected by weak worldwide manufacturing data released over the weekend.

With the FTSE on the up, which companies are doing even better? Here are three constituents of the various indexes on a rise today.

AstraZeneca (LSE: AZN  ) (NYSE: AZN  )
AstraZeneca shares have perked up 1.2% this morning, even though the pharmaceutical giant lost a patent case in the U.S. District Court for the District of New Jersey. The court decided that AstraZeneca's patent for its Pulmicort Respules asthma treatment is not valid in the U.S. and that no infringement by generic-drug makers has been committed.

AstraZeneca, whose share price has been soaring of late to reach new 52-week highs, is considering whether to appeal the judgment.

Stobart (LSE: STOB  )
Stobart has made a welcome gain this morning, up 5.3% after telling us that performance for the year to February 2013 is expected to have been "moderately ahead of market expectations." The company also announced a new three-year contract with Tesco and revealed that current executive chairman Avril Palmer-Baunack will stand down and be replaced by a "suitable independent" nonexecutive chairman when one can be found.

Current forecasts put Stobart shares on a price-to-earnings ratio of 12, but we should expect something a little better than that now. There's also a 6% dividend being forecast, but we'll have to wait and see whether that materializes. Results are due on May 16.

Telecom Plus (LSE: TEP  )
Telecom Plus has been a great recent success story, with its shares rising nearly fourfold over the past five years. And today they've picked up a further 2.9% after the company released a trading update ahead of results due on May 21.

After a strong fourth quarter, Telecom Plus expects its profit to be in line with current market forecasts, and it intends to pay a final dividend of 18 pence per share. That would bring the total payment for the year to 31 pence per share for a yield of 3% on the current share price.

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Are These FTSE 100 Shares a Buy?

LONDON -- I have recently been evaluating the investment cases for a multitude of FTSE 100 companies. Although Britain's premier index has risen 8.7% so far in 2013, I believe many London-listed stocks still have much further to run, while others are overdue for a correction. So how do the following five stocks weigh up?

GlaxoSmithKline (LSE: GSK  )
I reckon that accelerating product-development and moves into exciting new territories should barge GlaxoSmithKline back to growth over the medium term, underpinning its reputation as a dependable income play.

The company boasts an exceptional dividend-building record, even in times of earnings pressure. The pharma giant increased last year's payout to 74 pence from 70 pence in 2011 despite a declining bottom line, and this is expected to rise to 78 pence and 82.7 pence, respectively, in 2013 and 2014. And dividend yields during this period are expected to remain well ahead of the 3.2% FTSE 100 average, at 5.1% this year and 5.4% next year.

Earnings per share are predicted to rise 2% in 2013 following last year's 1% drop before accelerating 9% higher in 2014 as new products come online and offset the consequences of expiring IP. The firm's shares trade on a price-to-earnings ratio of 13.3 for this year and 12.2 for next year, which I consider a decent value given the dividend dependability and exciting growth prospects.

Tesco (LSE: TSCO  )
I am backing giant greengrocer Tesco to bounce back from increased competition from both high- and low-end competitors as it takes a step back from its international operations to boost activity back home.

City analysts expect EPS to slide 16% in the year ending February 2013, results for which are due on April 17, before hitting back in the coming years. Respective rises of 6% and 8% are predicted for 2014 and 2015.

Tesco is a favorite among income investors thanks to its generous dividend policy -- an anticipated dividend yield of 3.9% for 2013 is expected to climb to 4.1% in 2014 and 4.3% in 2015. And coverage of 2.1 times next year and 2.2 times in 2015 should provide investors with peace of mind, even in the event of fresh earnings attacks.

Sweetening the deal, the supermarket's stock currently changes hands on a lowly P/E rating of 11.5 for 2014 and 10.7 for 2015. This provides a chunky discount to a forward earnings multiple of 13 for the broader food and drug retailers sector.

Barclays (LSE: BARC  )
British high-street bank Barclays continues to endure a torrid time in the press, as its implication in the LIBOR-rigging scandal -- combined with PPI misselling practices and news of jumbo bonuses to its top brass -- has bashed its valued reputation.

Still, I believe the firm provides ripe investment opportunity moving forward. The company's U.K. retail operations have enjoyed a decent start to the year, while plans to significantly boost its exposure in the opportunity-rich regions of Africa should help to boost growth. Barclaycard is also revving up, with customers rising to 28.8 million in 2012 from 22.6 million in 2011.

Barclays is also stepping up cost-cutting measures in order to ease the burden on its balance sheet. EPS is forecast to rise 6% in 2013 before picking up speed to jump 20% the following year. The bank currently trades on a respective P/E of eight and 6.6 for these years, which represents bargain-basement territory -- the broader banking sector currently trades on a forward reading of 12.4.

Aviva (LSE: AV  )
I think uncertainty over Aviva's dividend policy should tempt investors to stay their hands for the time being. The life insurance giant is currently undergoing radical transformation following its recent financial difficulties, but until earnings turn around, future payout cuts could be on the horizon.

Projected dividend yields of 6.5% and 6.7%, respectively, for 2013 and 2014 are way ahead of the average yield for the U.K.'s 100 largest-listed firms, but Aviva's decision to slash last year's dividend to 19 pence from 26 pence in 2011 has made income investors jittery.

City forecasters expect EPS to fall again in 2013 to 44.2 pence from 44.7 pence last year. Aviva is trading on a P/E ratio of 6.7 for 2013 and 6.3 for 2014, down massively from a forward earnings multiple of 12.9 for the life insurance sector. However, the firm's recent record of slicing dividends -- it has cut the payout three times this century -- coupled with a cloudy earnings outlook makes the firm's cheap rating fully justified, in my opinion.

AstraZeneca (LSE: AZN  )
AstraZeneca reached a settlement last week with Actavis in its patent infringement case in the U.S. over its Crestor cholesterol drug, but I believe the issue of ongoing patent expiries and lack of a meaty product pipeline should continue to squash revenue over the medium term.

Patent issues caused group revenue to collapse 17% to almost $28 billion in 2012, pushing pre-tax profit 38% lower to $7.7 billion. Following last year's colossal 12% EPS drop, City analysts expect this to worsen in 2013, with an 18% fall penciled in. A further 3% drop is expected in 2014.

Significant restructuring work is under way to address the lack of new product streams, but clearly this will not lead to potentially blockbusting results until the longer term. AztraZeneca trades on a P/E rating of 9.6 this year and 9.8 next year, which compares favorably to a gargantuan forward reading of 32.8 for the wider pharmaceuticals and biotechnology sector.

Although the firm currently offers chunky dividend yields of 5.4% this year and 5.5% next, just less than twice covered, bouts of fresh near-term pressure could put shareholder payouts in jeopardy.

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Are the Earnings at Mindray Medical International Hiding Something?

It takes money to make money. Most investors know that, but with business media so focused on the "how much," very few investors bother to ask, "How fast?"

When judging a company's prospects, how quickly it turns cash outflows into cash inflows can be just as important as how much profit it's booking in the accounting fantasy world we call "earnings." This is one of the first metrics I check when I'm hunting for the market's best stocks. Today, we'll see how it applies to Mindray Medical International (NYSE: MR  ) .

Let's break this down
In this series, we measure how swiftly a company turns cash into goods or services and back into cash. We'll use a quick, relatively foolproof tool known as the cash conversion cycle, or CCC for short.

Why does the CCC matter? The less time it takes a firm to convert outgoing cash into incoming cash, the more powerful and flexible its profit engine is. The less money tied up in inventory and accounts receivable, the more available to grow the company, pay investors, or both.

To calculate the cash conversion cycle, add days inventory outstanding to days sales outstanding, then subtract days payable outstanding. Like golf, the lower your score here, the better. The CCC figure for Mindray Medical International for the trailing 12 months is 103.0.

For younger, fast-growth companies, the CCC can give you valuable insight into the sustainability of that growth. A company that's taking longer to make cash may need to tap financing to keep its momentum. For older, mature companies, the CCC can tell you how well the company is managed. Firms that begin to lose control of the CCC may be losing their clout with their suppliers (who might be demanding stricter payment terms) and customers (who might be demanding more generous terms). This can sometimes be an important signal of future distress -- one most investors are likely to miss.

In this series, I'm most interested in comparing a company's CCC to its prior performance. Here's where I believe all investors need to become trend-watchers. Sure, there may be legitimate reasons for an increase in the CCC, but all things being equal, I want to see this number stay steady or move downward over time.

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

Because of the seasonality in some businesses, the CCC for the TTM period may not be strictly comparable to the fiscal-year periods shown in the chart. Even the steadiest-looking businesses on an annual basis will experience some quarterly fluctuations in the CCC. To get an understanding of the usual ebb and flow at Mindray Medical International, consult the quarterly-period chart below.

Source: S&P Capital IQ. Dollar amounts in millions. FQ = fiscal quarter.

On a 12-month basis, the trend at Mindray Medical International looks less than great. At 103.0 days, it is 20.4 days worse than the five-year average of 82.6 days. The biggest contributor to that degradation was DSO, which worsened 14.3 days when compared to the five-year average.

Considering the numbers on a quarterly basis, the CCC trend at Mindray Medical International looks good. At 79.2 days, it is 27.6 days better than the average of the past eight quarters. With quarterly CCC doing better than average and the latest 12-month CCC coming in worse, Mindray Medical International gets a mixed review in this cash-conversion checkup.

Though the CCC can take a little work to calculate, it's definitely worth watching every quarter. You'll be better informed about potential problems, and you'll improve your odds of finding underappreciated home run stocks.

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• Add Mindray Medical International to My Watchlist.

BBRY Rising: Bulls Cheer Upside Prospects, Bears Skeptical

Shares of BlackBerry (BBRY) are up 80 cents, almost 6%, at $15.25 following a report of an unexpected profit last Thursday, for the company’s fiscal Q4 ending February, and comments by the company that it is pleased with initial sales of its Z10 handset running the new BB10 operating system.

There were several notes today following the long weekend, and most involving some adjustment to estimates. There is still a fairly wide disparity among analysts in terms of revenue and loss estimates for this fiscal year ending next February. Some of the themes are a continuation of those raised in initial reports published Thursday afternoon: rising estimates, a more profitable outlook, and uncertainty about subscriber numbers.

Wells Fargo‘s Maynard Um reiterates an Outperform rating, and a $19 to $20 “valuation range,” writing “Gross margins were the biggest surprise in the quarter, beating even the most optimistic expectations, though we see this now as largely the cat out of the bag.

“We believe the implied revenue as well as breakeven EPS guidance for FQ1 could be conservative (we forecast $0.07 EPS),” writes Um, “And believe one key to watch will be the timing of new carrier launches, particularly for the Q10 BlackBerry with keyboard (early vs. late May).”

Passi cuts his revenue estimate from $12.7 billion to $12.52 billion for this fiscal year, but raises his EPS estimate to a 7-cent loss from a prior estimates of a 22-cent loss. The new estimates reflect “a conservative outlook on
BlackBerry 10 (BB10) units, declining hardware ASPs/margins through the fiscal year, and acceleration in subscriber churn,” he writes.

UBS‘s Amitabh Passi reiterates a Neutral rating, and a $13 price target, after cutting his 2014 estimate to $14.56 billion in revenue from a prior $14.94 billion, but raising his EPS estimate to 61 cents from 29 cents. He raised his BB10 unit shipments estimate to 17 million this year from a prior 16.7 million, and now sees operating margin of 2.9% versus a prior 0.8% prediction.

Passi has skepticism positive trends can be maintained:

We question the sustainability of BB10 sell through (2/3-3/4 of sell-in) and margins over the next 2-3 quarters as competitive pressures and the introduction of lower-cost handsets will put downward pressure on margins. Service ARPU trends were confounding. We are not convinced yet BB10 will be a viable platform and remain on the sidelines with a cautious stance and a $13 target.

Michael Genovese of MKM Partners reiterates a Sell rating and a $10 price target, while raising his fiscal 2014 estimate to $12.31 billion from $11.8 billion, and cutting his loss estimate to 14 cents per share this year from a prior 60-cent loss estimate.

Genovese focuses on his estimate that subscriber churn was higher than the 3 million headline decline in subscriber count that BlackBerry reported:

6mn users left the BlackBerry platform in the quarter. BlackBerry reported its first quarterly subscriber decline ever in 3QFY13 when total subs dipped to 79mn from 80mn. The decline accelerated in 4QFY13 with total subs at 76mn, driven by losses in North America and EMEA slightly offset by gains in APAC and LatAm. We calculate that approximately 6mn subscribers switched away from BlackBerry in the quarter compared to roughly 3mn switching to BlackBerry. Assuming a 66.6%/33.3% replacement/new sub split for the over 7mn BB7/6/5 units that sold through suggests the company added 2.5mn BB7/6/5 subs. If we take management�s comments at face value that two-thirds to three-quarters of the 1mn BB10 units shipped in 4QFY13 have sold
through and over half of these user come from other platforms, then BlackBerry 10 attracted about 400,000 additional new subs. The net sub math for the quarter ends up as 2.5mn BB7/6/5 subs and 0.4mn BB10 subs added compared to approximately 6mn BB7/6/5 subs lost.

Why Barnes & Noble Is Poised to Pull Back

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, book retailer Barnes & Noble (NYSE: BKS  ) has received the dreaded one-star ranking.

With that in mind, let's take a closer look at Barnes & Noble and see what CAPS investors are saying about the stock right now.

Barnes & Noble facts

�	�
Headquarters (founded)	New York, N.Y. (1986)
Market Cap	$971.9 million
Industry	Specialty stores
Trailing-12-Month Revenue	$6.9 billion
Management	Founder/Chairman Leonard Riggio President/CEO William Lynch
Return on Equity (average, past 3 years)	(7.2%)
Cash/Debt	$213.6 million/$155.8 million
Competitors	Amazon.com� Apple Books-A-Million

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 55% of the 675 members who have rated Barnes & Noble believe the stock will underperform the S&P 500 going forward.

Just last month, one of those Fools, adamlevy, succinctly summed up the Barnes & Noble bear case for our community: "Struggling retail segments in both brick-and-mortar and the Nook division. The only saving grace for this company is licensing content with its publishing partners, which isn't really a core part of its business model (yet)."

To learn about two retailers with especially good prospects, take a look at The Motley Fool's special free report: "The Death of Wal-Mart: The Real Cash Kings Changing the Face of Retail." In it, you'll see how these two cash kings are able to consistently outperform and how they're planning to ride the waves of retail's changing tide. You can access it by clicking here.

Want to see how well (or not so well) the stocks in this series are performing? Follow the TrackPoisedTo CAPS account.

Reduce Government Lending, Experts Say

Experts argue that lowering government lending limits, particularly from Fannie Mae and Freddie Mac, will allow private lenders to compete in the mortgage market and help spur the economy. Reports show that Fannie and Freddie source nine out of every 10 mortgages and many analysts believe that a significant amount of people taking low-interest loans don’t need the help, especially at the upper limit where loans can be as much as $729,750. It’s difficult to argue that wealthy borrowers who can leverage that kind of financing need government assistance, say experts. For more on this continue reading the following article from TheStreet.

Fannie Mae and Freddie Mac should consider lowering loan limits to allow private players to compete more effectively in the market, a panel on housing finance reform concluded Monday.

Government-sponsored Fannie and Freddie purchase mortgages up to $417,000, though they can buy them for as much as $625,000 in some high-cost areas. The Federal Housing Administration, meanwhile, can purchase loans with a maximum limit of $729,750.

Loans that exceed that amount, called jumbo loans, are typically sold to private investors.

Housing lobbyists argue that lowering the loan limits would make borrowers in high-cost areas pay higher interest rates.

However, the panelists at the American Securitization Forum in Las Vegas were of the opinion that loan limits were much higher than they needed to be and should be reduced as the housing market recovers.

"The pressure to keep loan limits so high has weakened," said Barry Zigas, director of housing policy at the Consumer Federation of America. While the government's involvement with the housing sector goes back 75 years and should not be withdrawn in a hurry, not all borrowers may need the kind of support extended by Fannie, Freddie and the Federal Housing Administration (FHA), he argued.

"Missing from this discussion is what part of the market deserves this support in the form of long-term, fixed interest rates and what does not," Zigas said.

Fannie Mae, Freddie Mac and the Federal Housing Administration now originate nine out of every 10 mortgages.

Reducing government dominance and getting private mortgage credit flowing again has bipartisan support, but the methods remains contentious as policymakers weigh the impact of the withdrawal of government support on the housing market and borrowers.

Still, despite the extraordinary support extended by the government to borrowers in the aftermath of the crisis, first-time home buyers remain largely cutoff from the market due to extremely tight credit standards.

"Most mortgage credit today is going toward wealthy families. Are we diverting government resources to the high end rather than the low end?" asked Patrick Lawler, chief economist at the Federal Housing Finance Agency.

"We want to gradually reduce our presence," Lawler added. "Reducing loan limits might be a possible way to do this."

Experts believe that until private capital re-enters the market, the status quo will remain. So far only a couple of players, notably Redwood Trust (RWT), issue non-agency mortgages with even those largely restricted to jumbo "prime."

How Your Brain Picks Stocks

Our brains want to use the least amount of energy possible, all the time. If they had their way, they'd be mush, fed on reality television and piles of refined sugar. This evolutionary desire to acquire energy while exerting none follows us through all our lives. Inventions that allow us to be even lazier make billions. And investments that are easier to comprehend perform better than their counterparts.�But it isn't even the business itself that must be easy to understand.

If the company name and ticker are more easily digestible to our mind, that stock will perform better, which is a great reminder of how inefficient markets can be and how wildly out of touch stock prices can be with business realities.

Why would a stock that's more easily pronounceable perform better?

Disfluency
Adam Alter of the NYU Stern School of Business studies decision-making and social psychology. He recently had a conversation with�Edge that explained the difference between fluent information -- information that is familiar and easy to process and understand -- and disfluent information, which makes our brain work a little harder because of its unfamiliarity.

He covers a wide range of outcomes from the differences between the two forms of information. One example shows how new lawyers with names that are easier to pronounce ascend through the ranks inside law firms much more quickly than the unfortunate souls with tongue-twisting names. But one of the most interesting examples covers financial behavior.

If you look at the performance of stock over the first day or week after it's come out on the market, you can predict its performance pretty well by looking at how easy it is to pronounce its name. And, again, that's controlling for all sorts of other factors like which industry the stock is from, the size of the company. It seems that there's a halo that stocks acquire when the company name is easy to pronounce. We have also shown the same effect when you look at the ticker codes of the stock.

With no relationship to cash flow, valuation, management, or the numerous other characteristics of companies that we pore over before making an investment, our brains value how easy it is say its name.

Take a look at the CAPS portfolio of WordTicker, which picked stocks based solely on tickers that spelled words. Even though many of the picks were made in early 2008, when the�S&P 500�was trading around 1,300 before the market crashed -- not a great time for valuations -- the portfolio is in the 97th percentile in terms of performance.�Sourcefire� (NASDAQ: FIRE  ) , a cybersecurity provider, had negative income every year until 2009. Yet if you let your lazy brain pick it based on its ticker, then you have enjoyed more than 800% since 2008. And since the company proved it could actually earn money in 2009, its stock has more than doubled.

Obviously, there's a solid business behind Sourcefire, and its performance does not owe entirely to its fun ticker. North American�Palladium's� (NYSEMKT: PAL  ) ticker seems friendly, but after the company invested in and divested gold mines over the past few years, lost money over the past five years, ran into expansion obstacles, and reshuffled top management this year, its share price is down nearly 50% from a year ago.

The market is worth what we value it
Just because we subconsciously savor the easy-to-say stocks doesn't mean a portfolio based on them makes sense. Sooner or later, real financials break through this cognitive bias. But it's a great reminder that markets aren't always the smartest due to their human component. Just look at the graph of Physicians Formula Holdings' (FACE) performance around the time of Facebook's IPO.

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

Oil Falls After Exxon Shuts Pipeline

NEW YORK (AP) -- The price of oil fell Monday as Exxon (NYSE: XOM  ) shut a pipeline that carries oil out of the Midwest and a report showed a cooling of U.S. manufacturing activity.

Benchmark oil for May delivery was down $1.15 to $96.08 per barrel in morning trading on the New York Mercantile Exchange.

ExxonMobil shut its Pegasus pipeline after a leak in Arkansas. The pipeline, with a capacity of 96,000 barrels a day, carries Canadian crude oil from the Midwest to refineries in the Gulf of Mexico.

Oil added to earlier losses after an industry group said growth in U.S. manufacturing activity slowed in March. The Institute for Supply Management's manufacturing index dropped to 51.3 from 54.2 in February.

Oil rose $3.52 a barrel, or 3.8 percent last week, driven by signs of strength in the U.S. economy. The gain for March was 5.6 percent. Higher prices motivated investors to cash in.

At the pump, the average price for a gallon of gas fell 1 cent over the weekend to $3.63 a gallon. That's down 13 cents from a year ago and 30 cents lower than at this time last year.

In other energy futures trading on the New York Mercantile Exchange:

• Wholesale gasoline fell 2 cents to $3.09 a gallon.
• Heating oil was down 1 cent to $3.03 a gallon.
• Natural gas fell 2 cents to $4 per 1,000 cubic feet.

Aqua Teen Hunger Force, Robot Chicken & Co. start streaming on Netflix - 01:53 PM

(gigaom.com) -- ATHF fans, take notice: Netflix added a number of shows from Adult Swim and Cartoon Network to its catalog this past weekend, including the first seasons of Aqua Teen Hunger Force, Robot Chicken and the Venture Bros. Newly added titles also include Cartoon Network hits like Ben 10 and Justice League Unlimited.

The catalog additions are part of a number of deals Netflix struck in January with Warner Bros. and Turner, which will also bring TV shows like the remake of Dallas, Fringe and the Following to the service.

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It further underscores how important TV has become to Netflix, where subscribers often binge on entire past seasons of their favorite shows. And Adult Swim’s edgier fare should bode well with the same crowd that will flock to Netflix once the company brings the cult classic Arrested Development back to life in May.

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Why Consumers Need to Be Raging Maniacs for Your Products

In the following interview segment, Doug Levy, author and CEO of MEplusYOU, explains�why you don't believe what companies are telling you. The full interview with Doug Levy can be seen HERE, in which he discusses his new book, Can't Buy Me Like. In the book, Levy tackles the changing marketing space, believing that companies must either adapt or continue to put blind faith in increasingly ineffective advertising. Levy also explains a new era that we've entered, dubbed the 'relationship era', and describes how this will change marketing for all companies, big and small.

The retail space is in the midst of the biggest paradigm shift since mail order took off at the turn of last century. Only those most forward-looking and capable companies will survive, and they'll handsomely reward those investors who understand the landscape. You can read about the 3 Companies Ready to Rule Retail in The Motley Fool's special report. Uncovering these top picks is free today; just click here to read more.

Brendan Byrnes: What's the biggest mistake that marketers are making nowadays? Is it not adapting to this new way of thinking, or are there other mistakes that they're making as well?

Doug Levy: Yeah, they are. I think some marketers are mistaking media channels for the relevance of their approach to marketing.

In other words, they may mistake what I'm calling the Consumer Era with old media -- TV, radio, print -- and the Relationship Era with new media -- digital, social, mobile -- but that's not it at all. What we're talking about isn't a channel or a tool or a technology. It's a mind-set or an intent.

Brendan: What about trying to measure this? Obviously when it comes to advertising, marketing successes, back in the old days you threw ads on TV... Now we have a way of directly measuring that with the Internet and how many clicks something's getting. It comes directly to these advertising executives. How much does that affect the way that things are changing, if at all?

Doug: It does, in part because some things are more difficult to measure, so what gets measured most often in corporations are the financial metrics.

What we're talking about here is not moving away from those financial metrics, but also fully embracing a non-financial component of business, namely trust. The degree to which there's trust between a company and an individual has a significant impact. For a company, it can look like deeply understanding the customers you're in relationship with, and how much they love you.

What we've seen now more than ever is that companies that have not just people who buy their product that are OK with them, but they have at least a handful of people who are crazy about them. Those people now have a megaphone to scream the message about the company in question.

Brendan: And their friends trust them more, than coming from the company, right?

Doug: Precisely, yeah. Nielsen reports that trust in personal recommendations is 92% and growing, whereas trust in what companies say, advertising, is 26-47% and shrinking. People don't believe what companies say. They believe what their friends say.

Oil Falls After Exxon Shuts Pipeline

NEW YORK (AP) -- The price of oil fell Monday as Exxon (NYSE: XOM  ) shut a pipeline that carries oil out of the Midwest and a report showed a cooling of U.S. manufacturing activity.

Benchmark oil for May delivery was down $1.15 to $96.08 per barrel in morning trading on the New York Mercantile Exchange.

ExxonMobil shut its Pegasus pipeline after a leak in Arkansas. The pipeline, with a capacity of 96,000 barrels a day, carries Canadian crude oil from the Midwest to refineries in the Gulf of Mexico.

Oil added to earlier losses after an industry group said growth in U.S. manufacturing activity slowed in March. The Institute for Supply Management's manufacturing index dropped to 51.3 from 54.2 in February.

Oil rose $3.52 a barrel, or 3.8 percent last week, driven by signs of strength in the U.S. economy. The gain for March was 5.6 percent. Higher prices motivated investors to cash in.

At the pump, the average price for a gallon of gas fell 1 cent over the weekend to $3.63 a gallon. That's down 13 cents from a year ago and 30 cents lower than at this time last year.

In other energy futures trading on the New York Mercantile Exchange:

• Wholesale gasoline fell 2 cents to $3.09 a gallon.
• Heating oil was down 1 cent to $3.03 a gallon.
• Natural gas fell 2 cents to $4 per 1,000 cubic feet.

6 Bonds To Buy On The Dip

It is understandable that people are reluctant to purchase income products with benchmark yields near record lows. As yields plunged during the summer months, it became more and more difficult to find individual bonds with risk-adjusted returns suitable for many portfolios. But, just because you might not be able to find a bond you think is worth buying today doesn’t mean you shouldn’t prepare for the future.

It seems like virtually everyone thinks interest rates can only go higher over the coming years. While this point is certainly debatable, on the chance it does happen, it will pay to be prepared. So start building that shopping list. Make a list of corporate bonds you are interested in owning. Do your research now. Find a wide range of bonds from across the ratings spectrum and make sure you follow the prices so that you know when your favorite bond is getting close to your entry point. Get that shopping list ready now and start by taking a look at these six bonds:

Chesapeake Energy’s (CHK) senior unsecured note (CUSIP: 165167CF2) maturing 8/15/2020 has a coupon of 6.625% and is asking 107 cents on the dollar (5.594% yield-to-maturity before commissions). It has a make whole call and pays interest semi-annually. Moody’s currently rates the bond at Ba3; S&P rates it BB+ (non-investment grade ratings). The bond was originally offered at a price of 100, and the offer size was $1.4 billion. The offer date was August 9, 2010. This note has traded in a range of 104.231 (on 12/1/11) to 109.24 (on 12/7/11) since December 1, 2011. Currently, the 8/15/2020 U.S. Treasury note (CUSIP: 912828NT3) is yielding 1.827%, which means Chesapeake Energy’s note is asking 376.7 basis points more than a corresponding Treasury note.

Valero Energy’s (VLO) senior unsecured note (CUSIP: 91913YAL4) maturing 6/15/2037 has a coupon of 6.625% and is asking 106.909 cents on the dollar (6.088% yield-to-maturity before commissions). It has a make whole call and pays interest semi-annually. Moody’s currently rates the bond at Baa2; S&P rates it BBB. The bond was originally offered at a price of 99.713, and the offer size was $1.5 billion. The offer date was June 5, 2007. This note has traded in a range of 104.857 (on 12/9/11) to 110.048 (on 12/7/11) since December 1, 2011. Currently, the 2/15/2037 U.S. Treasury bond (CUSIP: 912810PT9) is yielding 2.974%, which means Valero Energy’s note is asking 311.4 basis points more than a corresponding Treasury bond.

Mattel’s (MAT) senior unsecured note (CUSIP: 577081AU6) maturing 10/1/2040 has a coupon of 6.20% and is asking 111.335 cents on the dollar (5.418% yield-to-maturity before commissions). It has a make whole call, conditional puts for a change of control, and pays interest semi-annually. Moody’s currently rates the bond at Baa1; S&P rates it BBB+. The bond was originally offered at a price of 99.419, and the offer size was $250 million. The offer date was September 23, 2010. This note has traded in a range of 106.153 (on 12/8/11) to 109.622 (on 12/2/11) since December 1, 2011. Currently, the 11/15/2040 U.S. Treasury bond (CUSIP: 912810QL5) is yielding 3.066%, which means Mattel’s note is asking 235.2 basis points more than a corresponding Treasury bond.

Ball Corporation’s (BLL) senior unsecured note (CUSIP: 058498AQ9) maturing 5/15/2021 has a coupon of 5.75% and is asking 105 cents on the dollar (4.889% yield-to-par call before commissions). It has a conditional puts for a change of control, pays interest semi-annually, and has the following call schedule: Beginning November 15, 2015, it is callable at the greater of 102.875 or make whole. Starting on November 15, 2016, it is callable at the greater of 101.917 or make whole. November 15, 2017 begins the period when it is callable at the greater of 100.958 or make whole. And November 15, 2018 through maturity, the note is callable at the greater of 100 or make whole. Moody’s currently rates the bond at Ba1; S&P rates it BB+ (non-investment grade ratings). The bond was originally offered at a price of 100, and the offer size was $500 million. The offer date was November 15, 2010. This note has traded in a range of 101.962 (on 12/1/11) to 104.75 (on 12/2/11) since December 1, 2011. Currently, the 5/15/2021 U.S. Treasury bond (CUSIP: 912828QN3) is yielding 1.965%, which means Ball Corporation’s note is asking 292.4 basis points more than a corresponding Treasury bond.

Ford Motor Company’s (F) senior unsecured note (CUSIP: 345370BT6) maturing 2/15/2028 has a coupon of 6.625% and is asking 102.366 cents on the dollar (6.387% yield-to-maturity before commissions). It is non-callable and pays interest semi-annually. Moody’s currently rates the bond at Ba2; S&P rates it BB+. The bond was originally offered at a price of 98.285, and the offer size was $300 million. The offer date was February 18, 1998. This note has traded in a range of 98.02 (on 12/9/11) to 109.163 (on 12/9/11) since December 1, 2011. Currently, the 11/15/2027 U.S. Treasury bond (CUSIP: 912810FB9) is yielding 2.637%, which means Ford’s note is asking 375 basis points more than a corresponding Treasury bond.

JPMorgan Chase’s (JPM) senior unsecured note (CUSIP: 46625HJB7) maturing 7/15/2041 has a coupon of 5.60% and is asking 108.824 cents on the dollar (5.024% yield-to-maturity before commissions). It is non-callable and pays interest semi-annually. Moody’s currently rates the bond at Aa3; S&P rates it A. The bond was originally offered at a price of 99.569, and the offer size was $1.75 billion. The offer date was July 14, 2011. This note has traded in a range of 104.406 (on 12/1/11) to 109.689 (on 12/8/11) since December 1, 2011. Currently, the 11/15/2040 U.S. Treasury bond (CUSIP: 912810QL5) is yielding 3.07%, which means JP Morgan’s note is asking 195.4 basis points more than a corresponding Treasury bond.

If you are interested in purchasing any of these securities but are nervous about counterparty risk wreaking havoc on your portfolio, learn how to hedge individual bonds in, “Protect Your Income Portfolio With Cross-Asset Hedging.”

Please be aware that prices in the over-the-counter U.S. bond market may vary depending on the broker you use. The current prices may also differ greatly from those listed at the time this article was written. For additional information on any of these notes, please contact your broker or read the indenture.

Also, please do your own due diligence on the financial profiles of the companies mentioned in this article. Only you can determine if taking the counterparty risk of purchasing individual bonds is suitable for you.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.