This Week's Major Macro Moves

It's been a busy week in the macroeconomic world, with manufacturing misses, erratic employment, and a deepening trade deficit. Macroeconomic reports provide investors unique insight into the wild workings of our economy, and the savviest shareholders keep mind of macro. Here's the latest on this week's major macro news.

Manufacturing misses
Manufacturing had a case of the Mondays this week, with double-whammy lackluster May reports from Markit and the Institute for Supply Management. Both indices failed to meet analyst expectations. Markit's U.S. Manufacturing Purchasing Managers' Index registered output growth at a seven-month low, while the ISM's Purchasing Managers' Index dipped into the red for the first time since November. According to the ISM's index, May marks the second month since July 2009 that manufacturing has shrunk.

US Purchasing Managers Index data by YCharts

A subsequent productivity and costs report for Q1 2013 doesn't paint a pretty picture, either. Seasonally adjusted Q/Q productivity missed analysts' 0.7% expectations by 0.2 points, and a calculation error in last quarter's unit labor costs threw off any true comparison points.

The housing recovery might've gotten us into this Great Recession, but it's manufacturing that's going to pull America out. Indices are in dire straits, and with record-high inventories  and shrinking new orders, May's reports don't promise any fast passes to profitable production.

Jobs, jobs, jobs
The productivity report implies that Americans are working more for less, which may partially explain this week's ADP employment report. Although the U.S. added 135,000 nonfarm private jobs in May, analysts had expected May to put 171,000 more workers to work.

The big news this week came on Friday, with a Labor Department announcement that the unemployment rate is back up to 7.6% after dipping down to 7.5% in April. However, the primary push behind the increase comes from a increase of 420,000 in the labor force, a not-so-negative sign for the labor market.

And while this week's initial jobless claims report provides a glimmer of hope with a 3.1% drop, the four-week moving average headed higher for the fourth week in a row. Jobless claims hit an unrevised recovery low in the start of May, but numbers have been very volatile over the past nine months.

ADP Change in Nonfarm Payrolls data by YCharts

Still, over a three-year period, initial jobless claims are down 24%, while nonfarm payrolls have managed a 5.6% increase.

Trading trends
The U.S. last enjoyed a trade surplus in 1975, and April's new report doesn't promise a turnaround any time soon. The U.S. trade deficit (imports minus exports) expanded 8.6% to $40.3 billion for April but managed to squeak below analysts' $41.2 billion expectations. And although imports increased by $5.4 billion, exports managed a $2.2 billion expansion.

Source: census.gov 

Even though trade deficits may be some indication of economy activity, it's hardly the reason we're still reeling from the Great Recession. Over the past year, a 1.7% gain in exports and 1.4% fall in imports has helped improve the deficit by $6.3 billion. Steady inflation is keeping export costs competitive, and a focus on economic fundamentals will inherently lead to bigger exports and a stronger economy.

Stay in the macro-know
Manufacturing indicators point to an unsteady present and an uncertain future, while employment data keeps analysts on the fence about the labor market recovery. The trade deficit might've expanded in April, but the real focus remains on fixing our home economy.

Keeping track of macroeconomic reports is no replacement for careful company analysis, but it can provide crucial clues for the future our economy. Check back weekly for your fill of macro news, and you'll be well on your way to pulling predictable profits for your portfolio.

Is Green Energy En Vogue in Corporate America?

For years, companies have been paying lip service to the idea of a green-energy revolution. Sure, they may sponsor a wind farm here or there, or they might try to get LEED certification for their building, but when push came to shove, companies would shed these efforts at the first sign of economic trouble. 

Today, this isn't so much the case anymore. Just a few weeks ago, Verizon announced an ambitious plan to spend $100 million to build 70 million kilowatt-hours' worth of solar energy facilities across the country to power 19 of its facilities. Many companies are finding that investing in alternative energy and energy conservation projects gives big relief to costs and in turn helps to pad the bottom line. From Apple's  (NASDAQ: AAPL  )  solar projects to Starbucks' (NASDAQ: SBUX  ) energy conservation efforts, the green-energy movement its popping up all over corporate America. Let's look at what some big companies are doing and how it is helping the bottom line.

Spending a dime to save a dollar
Since 2001, the average cost of electricity has increased by more than 35%. For many companies, that jump represents a major cost problem, and the only way to deal with it is to reduce total electricity consumption. Starbucks hopes to reduce its per-square-foot energy costs by 25% from its 2008 consumption levels by the end of 2015. Assuming each Starbucks store is about 2,000 square feet (50 by 40 feet), the program would save the company $50 million a year based on current electricity prices. 

The potential gain in operational costs is so great that even oil companies are jumping on board. Devon Energy's  (NYSE: DVN  )  new Oklahoma City headquarters was meticulously designed to reduce energy consumption by 20% and overall water use by 2.4 million gallons a year. (At that rate, the company will have enough water to hydraulically fracture a new well once every two years.)

The first rule in business is to make money, and it's a lot easier to do that when you're spending less money to keep the lights on. Corporate America is catching on, and fast.  

Green power
Gone are the days where companies have put a few token solar panels on their corporate headquarters for the PR. Today some of the largest companies in the world are making big investments in alternative-energy projects. Back in March, Apple announced that 75% of the company's operations run on alternative energy, and it also acknowledged that it owned the largest private solar facility in the U.S. and has plans to get a second facility of similar size online by the end of the year. 

One of the biggest reasons Apple has made such large alternative-energy investments is to power its data centers. Energy bills can represent as much as 75% of total operating costs for a data center, so the upfront costs for a nearly free energy source can pay for itself in a pretty short amount of time. About four years ago, Intel (NASDAQ: INTC  ) was the first to explore the idea of powering data centers with solar, and now the company supplies 100% of its 3.1 billion kilowatt-hours of electricity used with alternative sources.  

Of course, data centers aren't the only ones to benefit. Let's look at the top 10 companies using green power in the United States. From microprocessors to macchiatos, companies from almost every sector are finding an economic benefit in using alternative energy.

Rank Company 

Total Power Consumed 
(Million kWh)

% of Power from 
Green Sources

Sources

1	Intel	3,100	100%	Biogas, biomass, small-hydro, solar, wind
2	Microsoft	1,936	80%	Biomass, small-hydro, solar, wind
3	Kohl's Department Stores	1,536	105%	Solar
4	Whole Foods Market	800	107%	Solar, wind
5	Wal-Mart Stores	751	4%	Biogas, solar, wind
6	Staples	636	101%	Biogas, solar, wind
7	Starbucks	592	70%	Wind
8	Lockheed Martin	546	30%	Biogas, small-hydro, solar, wind
9	Apple	537	85%	Biogas, biomass, geothermal,  small-hydro, solar, wind
10	Cisco Systems	459	44%	Solar, wind

Source: US Environmental Protection Agency.

What a Fool believes
The use of alternative-energy sources has been picking up steam recently. With the cost per watt for a solar installation becoming a level comparable with other electricity options, more and more companies are finding that investing in alternative energy is more than just a feel-good endeavor. Goldman Sachs (NYSE: GS  ) plans to invest $40 billion in alternative-energy projects over the next 10 years. The company just got off to a big start by investing $500 million in SolarCity to finance the upfront installation costs for SolarCity's customers. Even Warren Buffett is jumping big into the solar business. Berkshire Hathaway subsidiary MidAmerican Energy will spend $5.4 billion on three major solar projects currently being constructed in the United States. 

To learn more about what these major companies are see in the value of the solar industry, check out The Motley Fool's premium report on First Solar, one of the few companies in the solar industry making a profit right now. With this report, you'll also get continuing updates and guidance whenever news breaks. To get started, simply click here now.

This Vicious Catch-22 Could Doom the Stock Market

As you're probably well aware, the stock market has been absolutely on fire since bottoming out a bit over four years ago. The broad-based S&P 500 (SNPINDEX: ^GSPC  ) and Dow Jones Industrial Average (DJINDICES: ^DJI  ) have both hit all-time highs this year, eclipsing levels that many would have laughed at in 2009 if you would have told them we'd reach these heights. Even the Nasdaq Composite (NASDAQINDEX: ^IXIC  ) , a tech-heavy index still well off its all-time highs, delivered a recent streak during which it hit an intraday 12-and-and-a-half-year high for 18 straight days!

A combination of an accommodative monetary policy from the Federal Reserve, which has targeted record low interest rates to spur lending, combined with a monthly $85 billion bond-buying program comprising long-term Treasuries and mortgage-backed securities, has boosted housing, lightened the load on our nation's largest banks, and sent the markets soaring. However, the same recipe that pulled the markets out of their doldrums looks like it could send them right back.

Let me preface this by saying that bull and bear markets are the normal evolution of the economic cycle. No matter what we or policymakers do, there will always be economic downswings, just as there will always be times when the economy is booming. Unfortunately, at the moment, it appears as if the Fed's accommodative monetary stance has set us up for a downturn, perhaps even a recession, regardless of what actions it and Fed Chairman Ben Bernanke take. It's what you might call the ultimate in Catch-22s.

Ben Bernanke. Source: Medill DC on Flickr. 

What happens if we stay the course
It might seem counterintuitive to think that continuing on the current course of having a record low federal funds target rate and buying $85 billion in bonds each month -- known affably as QE3 -- would be bad. Housing prices have found a bottom, and millions of homeowners have been able to refinance at remarkably good rates. But there's another side to the do-nothing strategy, and it isn't pretty.

For one, staying the course is a crushing blow to the few Americans who are good savers. Yes, it does entice investors to throw their money into the stock market, where the prospect of returns is greater than, say, bonds or CDs over the long run. But if you're a risk-averse investor or are anywhere near retirement, these record-low rates are crushing your returns, and taking on greater risk by investing in the market probably isn't prudent in many cases.

Also, QE3 has stopped having much of an impact on businesses, and I'd venture to say it's having no effect on the unemployment rate. I'll gladly admit it's nice to see the unemployment rate at a five-year low, but also consider that countless people have retired or simply given up on finding work and therefore are no longer counted among the labor force. That drop, as well as job creation, has made the unemployment figure a bit rosier than I suspect it actually is.

Then there's the effect on businesses, which has been good but not great. As with many individuals, low lending rates allowed many businesses to refinance hefty debt loads to much lower rates. Unfortunately, businesses haven't exactly been using these loans to expand their operations and grow their sales. In fact, more than half of the S&P 500 in the second quarter missed Wall Street's revenue estimates, yet about two-thirds beat on earnings. To me it's pretty clear evidence that enterprises are trimming the fat rather than expanding for the future. Simply put, no amount of extended rate cuts or bond-buying will fix that.

Staying the course is also hampering the profitability of the nation's largest banks. I'm sure most consumers aren't going to shed a tear over the fact that net interest margins -- the difference between the interest rate a bank pays to borrow money and the rate at which it lends -- for most banks are shrinking. Until QE3 ends and the Fed funds target begins to rise, chances are bleak that banks will see any meaningful bottom-line boost outside of cost-cutting and merger-and-acquisition activity.

What happens when the Fed stops easing
If staying the course isn't the right answer, then you might be compelled to think that raising the Fed funds target rate and ending QE3 might be the answer. Here again, we're in for a world of potential problems.

The housing sector would be expected to take a pretty big hit if interest rates begin to rise in any meaningful way. With lending rates remaining at record lows for such an extended period, we've been spoiled. The expectation here would be that as soon as we see even the slightest bump higher in rates, refinancing and mortgage activity would slow to a crawl.

Similarly, while banks would rejoice in being able to earn more on deposits, they'd have almost zero chance of attracting loans from consumers and businesses alike that have locked in record low lending rates for the next five, 10, or even 30 years!

The end of QE3 could also be the beginning of a strengthening U.S. dollar. With less money being printed for Treasury bonds and MBS purchases, it would only make sense that the U.S. dollar would gain in value. Though this sounds good on paper -- and you'll certainly be able to get more bang for your buck overseas -- it makes U.S. products less competitive in international markets and would only further hurt global businesses that are relying on this overseas growth to drive any meaningful growth at the moment.

The ultimate catch-22
In short, the Fed's ultra-accommodative monetary policy, which did help pull the economy out of a recession, is now a concrete block that's sure to weigh down the recovery process. If the Fed stands pat on its lending target rates and on QE3, then banks and risk-averse investors will suffer and businesses would probably turn to cost-cutting and share repurchases to drive bottom-line profit growth. Yet if the Fed pares back on QE3 and its accommodative lending rates, then the housing sector and global business could suffer. This appears to be a no-win situation and all the more reason to be very untrusting of the stock market with most indexes near all-time or multiyear highs.

One way to beat a recession
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.

Windows RT Desperation Is Starting to Surface

Here's some marketing 101: If people don't want your product, then give them an incentive to want it. That's exactly the thinking Microsoft (NASDAQ: MSFT  ) has had over the past few weeks with its tablet marketing.

Last week the company started throwing in a free keyboard -- which usually costs $100 -- with the purchase of a Surface RT. ­This week the company has apparently lowered its OEM software-licensing fee for smaller Windows RT tablets, according to an article from Bloomberg. The two changes come as Windows RT struggles to gain the attention of tablet consumers.

Is it really that bad?
So are things really that bad for Microsoft, or are these just typical promotional incentives that all companies do to move products?

It's not the latter. Things really are that bad.

IDC says Windows RT has 0.4% of tablet platform market share right now. Yes, Windows RT has only been out since October of last year, but projections for future RT market share are only expected to hit 2.7% by 2017. On top of this, tablet makers have been cooling toward Windows RT as of late.

Though HTC is about to release a 7-inch tablet with the RT platform, the company recently dropped its plans to produce a 12-inch RT tablet. Acer and ASUS are basically staying away from the platform, with Acer CEO JT Wang calling the software "very immature." Samsung also dropped plans to release Windows RT tablets in the U.S. and Germany because demand hasn't been strong enough.

Untapped potential
For better or worse, Dell (NASDAQ: DELL  ) is committed to both Windows RT and 8. But a few weeks ago Dell cut is XPS 10 tablet hybrid from $500 to $300 -- likely due to slow sales. Despite this, the company seems confident Windows is the way to go on tablets, and is developing a successor to the XPS 10 that will likely run RT. But Dell doesn't even make it on the top-five list of tablet sellers, and Microsoft itself is at the bottom of the list.

Microsoft investors should be worried about this. The company that used to have such dominance in the software platform business can't get OEMs to sell significant numbers of its new tablet OS ­-- something the company never had to worry about with its PC software. Apple (NASDAQ: AAPL  ) , Samsung, ASUS and Amazon.com all come before Microsoft when it comes to tablet sales.

Apple takes the No. 1 spot in all tablet shipments for Q1 2013, and commands 39.6% market share among tablet vendors. The company shipped 19.5 million tablet units in the quarter, compared to Microsoft's 0.9 million. But even though Apple is the No. 1 vendor, its iOS takes the second spot behind Android. Apple's second-place spot should be an indicator as to how difficult it is to gain additional market share even when selling millions of tablets ­-- which means Microsoft has an extremely long road ahead of it.

Microsoft still has a few companies on its side, though. A Qualcomm (NASDAQ: QCOM  ) executive said last month that the company is "very optimistic" about Windows RT. Obviously, the chip maker has some stake in the success of RT ­ -- it makes ARM-based Snapdragon processors in Dell tablets running RT. Qualcomm has also said that it's working with more OEMs that will release new RT devices in the near future.

But despite Qualcomm's pep-rally approach to RT, the company doesn't need the platform to do well to sell its Snapdragon processors. They can be found in the Samsung Galaxy S4, HTC One, two Samsung Galaxy tablets, and a long list of other phones and tablets -- and they're rumored to be in an upcoming lower-priced iPhone.

Making a better bet
I don't think Microsoft is out of the tablet fight, but I do think it's got to do something to turn the tide -- fast. Microsoft has been too used to releasing software for devices and having OEMs have no other choice but to sell the darn thing. The mobile landscape has brought more options to device makers and it seems that many of them have already chosen Google's side.

Lower-priced RT devices may help sales of the OS to take off, but I doubt it. Microsoft investors should focus on the mobile version of Windows 8 going forward rather than RT. Unless there's a complete revamp of RT or consumers start choosing it over Android or iOS, then it looks like it may limp along on until Microsoft realizes people don't want it.

Despite the Surface tablet launch and a revamped Windows 8, consumers seem to have their eye on other products. Unfortunately for Microsoft, its longtime software experience hasn't translated well into the mobile world. In a new premium report on Microsoft, a Motley Fool analyst explains that while the future opportunities are huge for the company, so are the challenges. The report includes regular updates as key events occur, so make sure to claim a copy of this report now by clicking here.

 

#pitch{ margin-bottom: 15px; }

More Expert Advice from The Motley Fool

The Motley Fool's chief investment officer has selected his No. 1 stock for the next year. Find out which stock in our brand-new free report: "The Motley Fool's Top Stock for 2013." I invite you to take a copy, free for a limited time. Just click here to access the report and find out the name of this under-the-radar company.

Don't Make a Big Bet Based on Just These Small Devices

In the following video, Fool contributor Matt Thalman discusses why investors should avoid getting caught up in the hype about Google's (NASDAQ: GOOG  ) new glasses, or what could be a new trend in wristwatches. While these gadgets will surely intrigue many consumers, the question of how many people will actually purchase the devices causes Matt to hit the pause button.

But, that's not to say that this technology couldn't evolve in the coming years and perhaps start a new revolution in a similar way that Apple's (NASDAQ: AAPL  ) iPhone changed the way we use cell phones.

It's incredible to think just how much of our digital and technological lives are almost entirely shaped and molded by just a handful of companies. Find out "Who Will Win the War Between the 5 Biggest Tech Stocks" in The Motley Fool's latest free report, which details the knock-down, drag-out battle being waged among the five kings of tech. Click here to keep reading.

IDT Beats Analyst Estimates on EPS

IDT (NYSE: IDT  ) reported earnings on June 6. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended April 30 (Q3), IDT met expectations on revenues and beat expectations on earnings per share.

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

Margins expanded across the board.

Revenue details
IDT notched revenue of $397.2 million. The two analysts polled by S&P Capital IQ predicted sales of $402.8 million on the same basis. GAAP reported sales were the same as the prior-year quarter's.

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

EPS details
EPS came in at $0.31. The one earnings estimate compiled by S&P Capital IQ anticipated $0.29 per share. Non-GAAP EPS of $0.31 for Q3 were 121% higher than the prior-year quarter's $0.14 per share. GAAP EPS of $0.39 for Q3 were 179% higher than the prior-year quarter's $0.14 per share.

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

Margin details
For the quarter, gross margin was 16.6%, 80 basis points better than the prior-year quarter. Operating margin was 3.7%, 280 basis points better than the prior-year quarter. Net margin was 2.2%, 140 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $404.5 million. On the bottom line, the average EPS estimate is $0.31.

Next year's average estimate for revenue is $1.61 billion. The average EPS estimate is $1.42.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 106 members out of 133 rating the stock outperform, and 27 members rating it underperform. Among 30 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 24 give IDT a green thumbs-up, and six give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on IDT is buy, with an average price target of $15.00.

Is IDT the best telecom bet for you? Learn how to maximize your investment income and "Secure Your Future With 9 Rock-Solid Dividend Stocks," including one above-average telecom company. Click here for instant access to this free report.

Add IDT to My Watchlist.

Why Iron Mountain Shares Dropped

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

What: Shares of Iron Mountain (NYSE: IRM  ) dropped 16% today after the company revealed that the IRS is looking into its switch to a REIT structure.

So what: An SEC filing revealed that the IRS is looking into "multiple components" of the company's REIT request and must rule favorably on all of them. You can click here for the full filing but it doesn't look like the IRS is inclined to allow Iron Mountain to become a REIT in its current form.  

Now what: Companies try to convert to REITs to save on taxes -- and companies are now trying stretch that definition as far as they can. Iron Mountain doesn't look like a REIT on the surface, and I would be surprised to see a positive ruling from the IRS. This definitely isn't a reason to buy today, and I'd watch this investigation closely going forward.

Interested in more info on Iron Mountain? Add it to your watchlist by clicking here.

It's incredible to think just how much of our digital and technological lives are almost entirely shaped and molded by just a handful of companies. Find out "Who Will Win the War Between the 5 Biggest Tech Stocks?" in The Motley Fool's latest free report, which details the knock-down, drag-out battle being waged by the five kings of tech. Click here to keep reading.

Best Oil Service Stocks To Buy For 2014

It's been more than three years since the spill at the Macondo well in the Gulf of Mexico, and day by day the prospects for oil exploration there seem to get better. A recent report by Wood MacKenzie shows that production in the Gulf went up 6% last year, and another 4% is expected this year. By 2018, the research group�believes�that the Gulf will be back to its pre-Macondo-spill high in�production�of 2 million barrels per day. �

For this to happen, though, exploration and production companies will need to spend a pretty penny. Between now and 2015, E&P companies are expected to spend somewhere around $20 billion. In this video, fool.com contributor Tyler Crowe looks at what this could mean for oil services companies that specialize in offshore regions such as the Gulf.

Best Oil Service Stocks To Buy For 2014: Universal Electronics Inc.(UEIC)

Universal Electronics Inc. develops and manufactures pre-programmed wireless remote control products, audio-video accessories, and software products. The company offers infrared and radio frequency remote controls; audio-video accessories; integrated circuits; and software, firmware, and technology solutions, which enable devices, such as televisions, set-top boxes, stereos, automotive audio systems, cell phones, and other consumer electronic devices to wirelessly connect and interact with home networks and interactive services to deliver digital entertainment and information. It is also involved in intellectual property licensing activities. The company sells its products directly, as well as through distributors in Europe, Australia, New Zealand, South Africa, the Middle East, Mexico, Asia, and Latin America under the One For All and Nevo brands. It primarily serves cable and satellite television service providers, original equipment manufacturers, retailers, custom inst allers, software development companies, private label companies, and personal computing companies. Universal Electronics Inc. was founded in 1986 and is headquartered in Cypress, California.

Best Oil Service Stocks To Buy For 2014: Amsurg Corp.(AMSG)

AmSurg Corp., through its wholly owned subsidiaries, engages in the development, acquisition, and operation of ambulatory surgery centers in partnership with physicians in the United States. The company?s surgery centers perform colonoscopy and other endoscopy procedures in the area of gastroenterology; cataracts and retinal laser surgery in the area of ophthalmology; and knee and shoulder arthroscopy and carpal tunnel repair in the area of orthopedics. As of December 31, 2010, it owned interest in 204 surgery centers in 33 states and the District of Columbia, including 140 centers performed gastrointestinal endoscopy procedures, 37 centers performed ophthalmology surgery procedures, 19 centers were multiple specialties, and 8 centers performed orthopaedic procedures. AmSurg Corp. markets its surgery centers directly to patients; and referring physicians and third-party payors, such as health maintenance organizations, preferred provider organizations, other managed care o rganizations, and employers. The company was founded in 1992 and is headquartered in Nashville, Tennessee.

Top 10 Construction Companies To Invest In Right Now: Endocyte Inc.(ECYT)

Endocyte, Inc., a biopharmaceutical company, develops targeted therapies for the treatment of cancer and inflammatory diseases. The company uses its proprietary technology to create novel small molecule drug conjugates (SMDCs) and companion imaging diagnostics. Its SMDCs target receptors that are over-expressed on diseased cells, relative to healthy cells. The company?s principal SMDC product candidate, EC145, has been evaluated in a randomized Phase II clinical trial for the treatment of women with platinum-resistant ovarian cancer, and it also completed a Phase II single-arm clinical trial for pre-treated non-small cell lung cancer. Its preclinical development products include EC0489 and EC0225, which are in Phase I clinical trial for the treatment of solid cancer tumors; EC17 that has completed Phase I clinical trial for the treatment of solid cancer tumors; EC0531, a tubulysin conjugate to treat solid tumors; and EC0746 and EC0565 foliate receptors for the reduction o f inflammation. The company?s products under development also comprise EC20, a proprietary companion imaging diagnostic product for the identification of folate receptor in cancer patients; EC1069 for prostate cancer therapy; and EC0652 that is in early clinical trials for use as a companion imaging diagnostic for SMDCs. Endocyte, Inc. was founded in 1995 and is headquartered in West Lafayette, Indiana.

Advisors' Opinion:

• [By Rougemont]

  Endocyte, Inc. (ECYT) is a biotechnology company based in Indiana. These shares have traded in a range between $3.02 to $14.80 in the last 52 weeks. The 50-day moving average is $6.35, and the 200-day moving average is $10.13. ECYT is estimated to lose about $1.46 per share in 2011, and post a loss of about $1.21 per share for 2012. In the product development pipeline, Endocyte has a candidates for cancer and inflammatory diseases. The lead candidate is "EC145," which targets the folate receptor in certain cancers. ECYT shares plunged recently when disapointing results were announced with a potential ovarian cancer treatment. Endocyte was added to the NASDAQ Biotechnology Index in late 2011. A director recently bought 125,000 shares, which supports the view that this stock is oversold and a bargain.

Top 5 Up And Coming Stocks For 2014

Last year may have been one of the worst ones ever for big-box retailers. Shares of Best Buy (NYSE: BBY  ) , RadioShack, and hhgregg�fell 50%, 78%, and 50%, respectively. It would make sense that this might be the case, as more and more people use these companies' stores simply as a venue to test out new products, before going home to order them cheaper on Amazon.com (NASDAQ: AMZN  ) .

Things were bad enough that in early January, I told investors to stay away from Best Buy, even though it had experienced a slight rally. So far, I've been wrong. The stock has more than doubled so far this year. But let me explain why I still think you should stay away from the company's shares.

Anatomy of a rally, in three phases

Top 5 Up And Coming Stocks For 2014: Camellia(CAM.L)

Camellia Plc, through its subsidiaries, engages in agriculture and horticulture, engineering, food storage and distribution, and private banking and financial services businesses. Its Agriculture and Horticulture division is involved in the production of tea, edible nuts, citrus, fruits, rubber, pistachios, maize, soya, barley, avocados, livestock, milk, wine, and other horticultural produce, as well as general farming operations. The company?s Engineering division activities comprise the provision of metal finishing, fabrication, precision engineering, and heat treatment services. Its Food Storage and Distribution division distributes deep frozen prawns, crab sticks, and other seafood; and fresh, frozen, and readymade portions of fish to the restaurant and catering sectors, as well as provides cold storage, refrigerated transport, and production support services. The company?s Private Banking and Financial Services division offers banking, financial planning, investment management, and trust and estate advice services. Camellia Plc also provides insurance services. It has operations in the United Kingdom, Continental Europe, Bangladesh, India, Kenya, Malawi, North America, Bermuda, South Africa, and South America. The company was founded in 1867 and is headquartered in Maidstone, the United Kingdom. Camellia Plc is a subsidiary of Camellia Holding AG.

Top 5 Up And Coming Stocks For 2014: Call Genie Inc(GNE.TO)

VoodooVox Inc. provides local mobile searching and advertising solutions to publishers, advertisers, and operators in North America and internationally. The company offers analytics tools for publishers to understand who their audience is; ad networks that supplies targeted advertisements in text, video, and voice formats; SMS, audio, and mobile-Web-enabled services; self-service toolkits; action tracking services with pay-per-call and pay-per-click options; and white-label local business search services. It also provides tools for creating advertisements, defining campaign targets and goals, monitoring results, and optimizing campaigns; direct VoIP call connection; interactive voice; and prepaid calling card offer wall, an interactive content channel. In addition, the company offers a suite of call center products, including directory workstation and search engine, directory data manager, open integration framework; and voice response products, which support various busin ess models. Further, it provides the VoodooVox Ad Exchange software for managing multi-media advertisements; and referred call services for telecommunications companies and directory assistance service providers on a licensed product basis. The company was formerly known as Call Genie Inc. and changed its name to VoodooVox Inc. in January 2012. VoodooVox Inc. was founded in 2000 and is headquartered in Toronto, Canada.

Best Income Companies To Invest In 2014: Banco De Chile(BCH)

Banco de Chile, together with its subsidiaries, provides personal and business baking products and services in Chile and the United States. Its personal banking product line comprises checking accounts, time deposits, money market accounts, demand deposits, now accounts, and prime now accounts. The company also offers lines of credit; credit card products, such as Travel Club, Global Pass, net.card, and PaySafe credit cards; and Internet banking services. Its business banking products and services include financial management products, such as checking accounts, foreign currency accounts, money market accounts, and prime now accounts, as well as a line of credit. In addition, the company provides business Visa, MasterCard, and Travel Club credit cards; and foreign trade services, as well as treasury banking services. Further, it offers various services, including securities brokerage, mutual fund management, factoring, insurance brokerage, financial advisory, and securitiz ation. As of December 31, 2009, the company operated a network of 246 retail branches and 154 Banco CrediChile branches, as well as a network of 1,588 automated teller machines and 415 self-consultation terminals. The company was founded in 1893 and is headquartered in Santiago, Chile.

Advisors' Opinion:

• [By Louis Navellier]

  Banco de Chile (NYSE:BCH) provides a range of credit and non-credit products and services to its Chilean customers. Banco de Chile is up 23% in the last 12 months. BCH stock gets an “A” grade for return on equity. 

Top 5 Up And Coming Stocks For 2014: Bruker Corporation(BRKR)

Bruker Corporation designs, manufactures, services, and sells proprietary life science and materials research systems worldwide. The company?s Scientific Instruments segment offers advanced instrumentation and automated solutions based on magnetic resonance, mass spectrometry, gas chromatography, X-ray, spark-optical emission spectroscopy, atomic force microscopy, stylus and optical metrology, and infrared and Raman molecular spectroscopy technologies. This segment serves pharmaceutical, biotechnology, and molecular diagnostic companies; academic institutions, medical schools, and other non-profit organizations; clinical microbiology laboratories; government departments and agencies; nanotechnology, semiconductor, chemical, cement, metals, and petroleum companies; and food, beverage, and agricultural analysis companies and laboratories. Its Energy & Supercon Technologies segment provides superconducting materials, including metallic low temperature superconductors for use in magnetic resonance imaging, nuclear magnetic resonance, fusion energy research, and other applications; and ceramic high temperature superconductors primarily for fusion energy research applications, as well as non-superconducting Cuponal materials and wires based on co-extruded copper and aluminum, and non-superconducting high technology tools. Its customers include companies in the medical industry; private and public research and development laboratories in the fields of fundamental and applied sciences, and energy research; academic institutions; and government agencies. This segment is also involved in the development of superconductors and superconducting-enabled devices for applications in power and energy, as well as industrial processing industries. The company markets its products through direct sales force; and distributors, independent sales representatives, and other representatives. Bruker Corporation was founded in 1991 and is headquartered in Billerica, M assachusetts.

Top 5 Up And Coming Stocks For 2014: Virtutone Networks Inc (VFX.V)

Virtutone Networks Inc. provides voice over Internet protocol (VoIP), fax over Internet protocol (FOIP), and related phone services to business and residential customers in North America, Australia, and the United Kingdom. The company offers various products and services, including managed voice lines, managed fax lines, hosted PBX systems, analog phone lines, calling cards, hosted exchange and BEZ solutions, wholesale VoIP, Internet, and analog line management. It also provides hardware, including IP phones, wireless conference phones, phone adapter with router, 8-port IP telephony gateway, and fax/voice adapters. The company serves oil and gas exploration companies, forestry and fire fighting departments, and other businesses/organizations. Virtutone Networks Inc. is headquartered in Sherwood Park, Canada.

Dow Jumps Late With Jobs Report on Deck

After dipping more than 100 points at midday, the Dow Jones Industrial Average (DJINDICES: ^DJI  ) came roaring back this afternoon, finishing up 80 points to 15,040, or 0.5%, nearly 200 points above its low point for the day. There was no major news driving stocks higher this afternoon, though optimism about tomorrow's jobs report could have been one reason. The European Central Bank also kept in place its low interest rates, and left all other stimulative policies in place in a meeting today. Major European indexes, which closed before the jump in U.S. stocks, finished down 1% or more. The dollar also dropped significantly, falling 3% vs. the yen, as investors fear that a weak jobs report could lead to more stimulus.

The initial unemployment claims report was slightly better than expected, as 346,000 Americans filed for new unemployment benefits last week, 2,000 less than economists had predicted. Continuing unemployment claims were also 1% lower than expected, at 2.952 million. In tomorrow's jobs report, analysts are expecting an overall increase of 159,000 jobs, and 175,000 in the private sector. The unemployment rate is expected to remain at 7.5%. Also today, several retailers reported same-store sales for May, indicating an overall positive trend for the sector and the economy.

Verizon (NYSE: VZ  ) led all Dow stocks today, gaining 3.5%, despite word from The Guardian that the National Security Agency had ordered the company to turn over private information about calls in the latest Washington scandal du jour. Still, Verizon had no choice in the matter, regardless of what critics of the program may say. It seems unlikely that that would have led to the stock's gain, but shares were down more than 10% in the last three weeks, so the telecom may just be getting a strong bump on a bullish day.

Home Depot (NYSE: HD  ) was another strong performer, rising 2.9%, after Kevin Hoffman, the company's president of online sales, said at a conference today that there's opportunity for larger projects such as floor and kitchen installations in the e-commerce market. The retailer is testing programs such as video conferencing with customers, and sending them 3D models.

If you're looking for some long-term investing ideas, you're invited to check out The Motley Fool's brand-new special report, "The 3 Dow Stocks Dividend Investors Need." It's absolutely free, so simply click here now and get your copy today.

Is Your Online Broker the Best in the World?

The "StressTest" column appears every Thursday on Fool.com. Check back weekly, and follow @TMFStressTest on Twitter.

If you're a U.S. investor and you use an online broker, chances are high that you're feeling good. Really good. In fact, you're probably among the most satisfied online-broker customers in the world. 

Satisfied, that is, except in two glaring areas.

In its first "Global Online Broking Report," research firm Investment Trends compiled feedback from more than 92,000 investors in six countries and found that online-broker customer satisfaction is tops in the U.S.

With an overall satisfaction rating of 79%, U.S. online brokers edged out Germany, which clocked in at 72%. Singapore, at 62%, had the lowest satisfaction scores of the six countries surveyed. "Of the top 10 online brokers for overall satisfaction," the report states, "nine are from the U.S."

According to Investment Trends, the reasons for the top-notch scores in the U.S. included:

Customer service Value for money Website functionality and reliability Costs and commissions Research tools and charting

For Vanguard, the top-ranked online broker in the world according to this report, that's good news -- a happy customer is a loyal customer. It's likewise good news for competitors like TD AMERITRADE  (NYSE: AMTD  ) -- which ranked No. 2 for its thinkorswim service and No. 8 for its main platform -- Charles Schwab  (NYSE: SCHW  ) (No. 3), and Interactive Brokers  (NASDAQ: IBKR  ) (No. 4 for its U.S. operations, No. 5 for its offering in Germany).

Opportunity or risk?
While U.S. online brokers excelled in the areas listed above, they fell comparatively flat on "trading ideas and strategies" and "stock picks and recommendations," where satisfaction levels were 51% and 48%, respectively.

This shortfall could be a future opportunity for U.S. brokers. There's an obvious synergy: Provide investors with ideas, and give them the venue to execute those ideas. Given the lackluster scores, customers would likely respond to better offerings in this area.

But it could also be a risk. For example, my broker -- E*TRADE  (NASDAQ: ETFC  ) , which is conspicuously missing from Investment Trends' top 10 list -- offers investment ideas and opinions in part through research from Wall Street house Credit Suisse. While it may sound great for retail investors to access Wall Street research, it's not what it's cracked up to be. As my fellow Fools John Reeves and Ilan Moscovitz highlighted, for financial analysts, "the profitability of [their] stock recommendations" and "the accuracy and timeliness of [their] earnings forecasts" were at the bottom of the list when they ranked the most important aspects of their job.

The brokers could also offer investment ideas directly, but that's not necessarily a core competency. In other industries, offering recommendations can be a relatively low-risk way to encourage more customer activity. For example, Amazon.com's core competency isn't telling me what I should buy, but if it puts product suggestions in front of me and I do more purchasing as a result, that's a good outcome. If I buy something based on an Amazon recommendation and I don't like it, I may return it and not be keen to jump on Amazon's suggestions in the future. But most of the time, that's not a terrible result for the company or the customer.

If, however, an online-broker customer follows an investment recommendation from her broker that works out terribly, it could mean the loss of a significant amount of money for the customer. And unlike an Amazon book, there are no returns in the investing world.

Two paths
In light of the clear areas of shortfall, the Investment Trends research should be interesting to executives at the online brokers. But what to do with that insight?

One obvious answer is to attack the issue directly -- that is, provide more investment strategies and stock picks.

Another is to spend even more time educating customers. Taking the "teach a man to fish" approach could make customers happier without the need for specific investment recommendations. Perhaps better still, espousing tried-and-true investing approaches that include simple concepts like long-term holding and seeking to minimize fees could also help. Sure, for an online broker, that may not be a short-term win thanks to potentially lower trading fees, but the value of a happy customer over time may be much greater.

Vanguard is a broker that conspicuously lacks flash and sparkle. It was built on the back of low-cost index funds. On its website, it greets potential new customers with a message that reads:

Vanguarding: It's feeling like an owner and keeping more of your investment returns. And it's thinking beyond today, while others shortsightedly chase the next hot tip.

In sum
U.S. online-broker customers are mostly happy. Getting to that next rung of happiness may lie in brokers offering better stock tips. Or, if Vanguard's success is any sign, perhaps it's about teaching customers that long-term investing success is about a lot more than that "next hot tip."

More insight from The Motley Fool
Investing well over the long term means carefully separating fact from fiction. The Motley Fool's premium report "5 Dividend Myths... Busted!" picks apart five widely held myths and illuminates which stocks provide premium growth and whether bigger dividends are better. Click here to keep reading.

U.S. Government Secretly Collecting Verizon Phone Records

Under the auspices of the Patriot Act, the U.S. government has secretly been collecting Verizon (NYSE: VZ  ) call records since April, according to a top secret court order published by The Guardian yesterday.

The order gives the National Security Agency open access to Verizon's Business Network Services call logs "on an ongoing daily basis." The Guardian report says that although the Patriot Act has been used previously, this newest order represents "the first time that under the Obama administration the communication records of millions of US citizens are being collected indiscriminately and in bulk – regardless of whether they are suspected of any wrongdoing."

The White House offered no immediate on-the-record comment. A senior administration official did not confirm the Guardian newspaper report that the NSA has been collecting the records, but the authenticity of the document was not disputed by the White House. The administration official said, "On its face, the order reprinted in the article does not allow the government to listen in on anyone's telephone calls."

Although the content of calls can't be collected under the order, according to a New York Times report, it enables the U.S. government virtually unlimited access to domestic and international call metadata (phone numbers, call location, call duration, etc.) from mid-April to mid-July. 

Verizon, for its part, was (and is) forbidden from disclosing any information regarding the court order, according to the Times report. Verizon spokesman Ed McFadden said Wednesday the company had no comment. The NSA had no immediate comment.

The order was granted by the secret Foreign Intelligence Surveillance Court on April 25 and is good until July 19, the Guardian reported Wednesday. Verizon Communications Inc. listed 121 million customers in its first-quarter earnings report this April -- 98.9 million wireless customers, 11.7 million residential phone lines and about 10 million commercial lines. The court order didn't specify which customers' records were being tracked.

-- Material from The Associated Press was used in this report.

link

Coke Stock Leads Dow’s 106-Point Decline

The Dow Jones Industrial Average (DJINDICES: ^DJI  ) gave up literally every point it gained yesterday, slumping 106 points, or 0.7%, to close at 15,302. Further concern about how long the current pace of quantitative easing will last drove stocks lower. Also not helping was the International Monetary Fund's trimmed forecasts for China's growth going forward, as Coke stock led the index's decline.

Reaching a 52-week high in trading today, Hewlett-Packard (NYSE: HPQ  ) failed to get the bearish memo, as it added 2.4%. The market continued to digest yesterday's IDC report that forecast a weakening but not completely horrendous future for personal computers. Though by 2017 PC shipments will be far outnumbered by tablet sales, 333 million are still projected to ship that year, which is no small number.

Bank of America (NYSE: BAC  ) added 1% today as data showed that the first quarter of this year was the most profitable quarter ever for U.S. banks. With earnings rising nearly 16% year over year, the industry made a whopping $40 billion in the first three months of 2013. Prospects continue to look up for U.S. banks, as they settle litigation related to the financial crisis; Citigroup settled a big case related to mortgage-backed securities it sold in the depths of the recession. 

Verizon (NYSE: VZ  ) , which avoided the telecom decline yesterday, lost 2.5% today. Tuesday's commotion over Google Fiber, the search giant's attempt to enter the cable marketplace, sent rival AT&T lower. The concerns apparently spread to Verizon today, offsetting excitement over the newest phones to debut on Verizon's newer, faster network.

Coca-Cola (NYSE: KO  ) shares slumped 2.7%, as Wall Street showed its disappointment with a worker strike in Venezuela that has already cut into its sales in the country by 15% this month. Coke's stock was the largest decliner in the blue-chip index on a day that saw the entire consumer goods sector fall 1.5%. Shares may be entering prime territory for income investors, as the dividend currently sits at 2.7%. 

Coca-Cola's wide moat has helped provide its shareholders with superior gains in the past, but the company faces some new threats to its continued market dominance. The Motley Fool recently compiled a premium research report containing everything you need to know about Coca-Cola. If you own or are considering owning shares in the company, you'll want to click here now and get started.

Is This the Best Housing Rebound Stock?

Investors searching for a lucrative investment to capitalize on a continued rebound in housing may have found the process to be quite precarious, as many companies have experienced significant run-ups in stock price. While most company valuations appear frothy, Boise Cascade (NYSE: BCC  )  stands out as a possible cheaper alternative. In the video below, analyst Blake Bos shows you how to ask the right questions when deciding to invest and draws some valuable comparisons to competitor Weyerhaeuser  (NYSE: WY  ) . 

Watch below as we answer the most important questions to determine if Boise Cascade is today's best housing rebound stock.

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.

Quindell Portfolio Announces 25 Million Pound Contract Win

Why Polaris Is Poised to Keep Zooming

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, all-terrain vehicle maker Polaris Industries (NYSE: PII  ) has earned a respected four-star ranking.

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

Polaris facts

Headquarters (founded)	Medina, Minn. (1987)
Market Cap	$6.6 billion
Industry	Leisure products
Trailing-12-Month Revenue	$3.3 billion
Management	Chairman/CEO Scott Wine President/COO Bennett Morgan
Return on Equity (average, past 3 years)	53.5%
Cash/Debt	$380.8 million / $106.4 million
Dividend Yield	1.8%
Competitors	Arctic Cat Honda Motor Kawasaki Heavy Industries

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

On CAPS, 90% of the 349 members who have rated Polaris believe the stock will outperform the S&P 500 going forward.

Just yesterday, one of those bulls, TMFInnovator, explained why the stock still has plenty of room to run:

Polaris is a constant reminder to me on why I should never 'anchor' on a stock's current price. PII has had a seat on my watchlist since Aug '11, when it traded at $50. Since then, the company has executed almost perfectly and the stock price rose accordingly, hitting many new 52-week highs over the next two years.

I don't think they're done yet.

-Even at $95, PII is trading at a respectable 18 times earnings.
-There are still plenty of drivers. The US DoD awarded a $382 million contract for Polaris 'fire and emergency vehicles' through 2018. Consumer spending also continues to recover, and additional discretionary income is good for recreational vehicle sales.
-The dividend has increased 121% in four years and is still just 37% of LTM's free cash flow.   

If you want market-thumping returns, you need to put together the best portfolio you can. Of course, despite a strong four-star rating, Polaris may not be your top choice.

We've found another stock we are incredibly excited about -- excited enough to dub it "The Motley Fool's Top Stock for 2013." We have compiled a special free report for investors to uncover this stock today. The report is 100% free, but it won't be here forever, so click here to access it now.

Why salesforce.com's Price Drop Makes No Sense

salesforce.com's (NYSE: CRM  ) earnings announcement didn't sit well with investors. With its stock down over 6% since sharing its fiscal 2014 Q1 results, you'd think Salesforce had either missed estimates by a mile, provided a poor outlook for the balance of its fiscal year, or both. But this is where things get interesting: Neither occurred. When you look at non-GAAP results (in other words, removing one-time items), Salesforce grew revenue and operating cash flow, and raised guidance for the year. So, what's the problem?

A few specs
It seems Salesforce has always traded like a growth stock: With a non-GAAP price-to-earnings ratio in the 85 to 90 range, investors and analysts alike have been content to focus on revenue growth and future prospects in its core customer relationship management market and cloud solutions. So Salesforce's 28% jump in revenue compared to last year, up to $893 million this past quarter, would appear to be a win. Incidentally, the $893 million in revenue beat average analyst expectations for the quarter by $6 million.

Both deferred revenue and unbilled deferred revenue were also up significantly, 30% and 33% year-over-year, respectively. Toss in a 33% increase in operating cash flow and non-GAAP earnings of $0.10 a share this quarter -- meeting expectations -- and the sell-off of Salesforce shares makes even less sense. And what a sell-off it was, with nearly 21.58 million shares traded the day after Salesforce's May 23 earnings announcement, compared to its daily average of 5.54 million shares.

After raising revenue expectations for fiscal 2014 to $3.835 billion to $3.875 billion, a 26% to 27% improvement from last year, Salesforce now expects non-GAAP EPS in the $0.47 to $0.49 range for the year, compared to $0.49 average estimates from analysts. The problem? An analyst at Pacific Crest Securities said it all, "The guidance is just in line, and we're used to seeing these guys raise."

What's changed?
Some grumblings you'll hear relating to Salesforce include its move toward expanding via acquisition in lieu of strictly organic growth. That can be an expensive proposition to be sure, and is expected to impact Salesforce's GAAP numbers this year by an estimated $86 million.

A legitimate concern for Salesforce, just as it's always been, is growing competition in both the CRM and cloud computing markets. German-based SAP (NYSE: SAP  ) and CRM up-and-comer Microsoft (NASDAQ: MSFT  ) and its Dynamic CRM are certainly not to be trifled with.

Microsoft's Dynamics CRM generates about $500 million annually; a pittance compared to its total revenue, but its integration with Office 365 could change that going forward. Like Microsoft, SAP isn't reliant on CRM revenue -- it currently accounts for about 11% of total IFRS sales -- and diversified business lines are rarely a bad thing. For both SAP and Microsoft, revenue diversification gives them time to grow their respective solutions, while Salesforce is heavily reliant on its CRM suite to drive revenue. With that said, Salesforce deserves some credit; it became the No. 1 CRM provider as measured by revenue in 2012 according to Gartner, replacing SAP.

From here
Given Salesforce's $3 billion in cash and equivalents, improving operating cash flow and revenue, and its strong presence in the explosive cloud market, Salesforce is positioned well for future growth, just as it was prior to its recent earnings announcement.

About the only thing different about Salesforce today compared to last week is its stock price. If Salesforce made sense at price-to-earnings multiples of 85 or 90 prior to its earnings announcement, then it still does. If you're a growth investor, Salesforce was already a solid long-term opportunity. Now, it's even better.

Five enter, one leaves
It's incredible to think just how much of our digital and technological lives are almost entirely shaped and molded by just a handful of companies. Find out "Who Will Win the War Between the 5 Biggest Tech Stocks?" in The Motley Fool's latest free report, which details the knock-down, drag-out battle being waged by the five kings of tech. Click here to keep reading.

Why I Own Netflix Stock

Netflix (NASDAQ: NFLX  ) shares have more than quadrupled in value from last summer's 52-week lows, but the stock is as controversial as ever. A long-term content deal with Walt Disney  (NYSE: DIS  ) may set the company apart from a rising tide of competition -- but the deal doesn't take effect for another couple of years. Why would anybody buy Netflix stock at today's rapidly rising prices, and what would it take to make a long-term shareholder sell? Shouldn't shareholders worry about rising content costs?

In the video below, Fool contributor Anders Bylund answers these key questions from his own Netflix-owning perspective.

Can Netflix fend off burgeoning competition, and will its international growth aspirations really pay off? These are must-know issues for investors, which is why The Motley Fool has released a premium report on Netflix. Inside, you'll learn about the key opportunities and risks facing the company, as well as reasons to buy or sell the stock. The report includes a full year of updates to cover critical new developments, so make sure to click here and claim a copy today.

This Is Why ExactTarget Is a Great Fit for salesforce.com

At a premium of slightly more than 50%, it's not surprising that salesforce.com's (NYSE: CRM  ) decision to acquire cloud marketing specialist ExactTarget (NYSE: ET  ) wasn't greeted with cheers from investors. The aggressive move by Salesforce CEO Marc Benioff to drop $2.5 billion on a company that has issued revenue guidance of just $376 million to $379 million for the year seems a bit much, and based on Salesforce's share price drop at the open, the market agrees. But don't be too hasty to abandon Salesforce shares -- there may be a method to Benioff's madness.

Who are these guys?
Prior to the acquisition announcement, ExactTarget was a $1.53 billion cloud-based digital marketing company losing money and eating into its ready cash, even as it consistently grew quarterly revenues. (Not surprising, really, when you consider that when ExactTarget was founded in 2000, the notion of cloud-based marketing solutions didn't register even as a blip on the radar.)

But setting its lack of positive earnings aside for a moment, ExactTarget isn't without its successes, most notably its client list. With over 6,000 clients -- including folks like Coca-Cola (NYSE: KO  ) , Nike (NYSE: NKE  ) , and Gap (NYSE: GPS  )  -- automating digital marketing campaigns represent a rapidly growing market that is only going to get bigger. How much bigger? This is where the acquisition gets interesting for Salesforce.

According to Yvonne Genovese, a managing VP with Gartner, "Marketing was the fastest growing CRM category in 2012, growing at 21% (more than four times the software industry forecast norm in 2012)." Genovese expects marketing "will be the largest growing CRM category through 2017." In the press release announcing the acquisition of ExactTarget, Benioff also alluded to expectations that by 2017, companies' chief marketing officers will spend more on technology than CIOs.

What it does for Salesforce
For Salesforce, the ExactTarget deal is all about providing customers with end-to-end solutions in the exploding cloud digital marketing CRM market. The acquisition provides an immediate inroad into some of the biggest companies in the world, and gives Salesforce additional revenue alternatives with its existing clients.

Naturally, Salesforce will take an earnings hit in its current fiscal 2014 Q2 (and for the year) as it absorbs the expenses associated with an acquisition of this magnitude. For fiscal 2014, Salesforce expects a reduction in non-GAAP earnings by an estimated $0.16 a share, and about $0.05 a share in its current fiscal Q2. Salesforce's revenue expectations for the year, which were in the $3.835 billion to $3.875 billion range, have been revised upwards to $3.955 billion to $4.0 billion.

Now what?
At nearly seven times ExactTarget's expected 2013 revenue, $2.5 billion is a pretty steep price for Salesforce to pay -- there's no denying that. But the acquisition isn't about this quarter, or even this fiscal year; this deal's about positioning Salesforce for the explosive growth in cloud-based digital marketing over the next five years (and beyond). And from that perspective, investors shouldn't be too quick to condemn Salesforce for the move, but look at it for the opportunity it represents.

It's incredible to think just how much of our digital and technological lives are almost entirely shaped and molded by just a handful of companies. Find out "Who Will Win the War Between the 5 Biggest Tech Stocks?" in The Motley Fool's latest free report, which details the knock-down, drag-out battle being waged by the five kings of tech. Click here to keep reading.

When Should You Buy Annaly?

With fears of higher interest rates causing fixed income investors to worry, the mREIT sector, which primarily invests in mortgage-backed securities, has been hit hard over the past month.

American Capital Agency (NASDAQ: AGNC  ) is down over 15% over the last 30 days, and mREIT giant Annaly Capital Management (NYSE: NLY  ) has ticked down roughly 10%.

In this video, Motley Fool financial analyst David Hanson asks Matt Koppenheffer, who doesn't hold any mREIT stocks, at what point he would become interested in jumping into one of these stocks.

There's no question Annaly Capital's double-digit dividend is eye-catching. But can investors count on that payout sticking around? With the Federal Reserve keeping interest rates at historically low levels, Annaly has had to scramble to defend its bottom line. In The Motley Fool's premium research report on Annaly, senior analysts Ilan Moscovitz and Matt Koppenheffer uncover the key challenges the company faces and divulge three reasons investors may consider buying it. Simply click here now to claim your copy today!

Another Electric-Car Startup Bites the Dust

Electric-car start-up Better Place declared bankruptcy this week, joining a pile of broken EV dream companies that includes Fisker Automotive, among many others.

Better Place's plan was to build out the electric-car infrastructure with a network of battery-swapping stations. It had big money and big-name partners, including French auto giant Renault, but it never quite got off the ground.

In this video, Fool contributor John Rosevear looks at why Better Place and other EV pioneers have failed -- and at why Tesla Motors  (NASDAQ: TSLA  ) has been the one shining exception to the trend.

Tesla's plan to disrupt the global auto business has yielded spectacular results. But giant competitors are already moving to disrupt Tesla. Will the company be able to fend them off? The Motley Fool answers this question and more in our most in-depth Tesla research available. Get instant access by clicking here now.

You Have To See This Chart...

Being a StreetAuthority subscriber has privileges. That includes learning firsthand about our biggest breakthroughs.

I want to let you know about one such discovery. It's likely to be one of the most groundbreaking finds in our company's history and could completely change the way you invest.

We're still finalizing the research, but the results are promising. It's a new method that has produced average annual gains of 21.4% during the past decade, compared with the S&P's 7.1% a year.

 

I'll tell you more in just a moment, but first I want to reintroduce you to the man behind this research -- Michael J. Carr.

You may have heard from Mike recently in this article.

Mike is one of our brightest experts here at StreetAuthority. He also has one of the most interesting backgrounds of any analyst on our staff.

Mike holds a degree in chemistry and an MBA. He retired as a Lieutenant Colonel in the Air Force. His service included stints in Spain, Germany, Japan, Korea, Iceland and Guam.

And he's a former investment manager who was responsible for $200 million in assets.

Mike is also among the most decorated traders in the country. He is a Chartered Market Technician (CMT), of which there are only about 1,400 in the world. And he's written two books on the subject of investing.

Now, Mike is just finishing up a breakthrough study.

By using the same stocks our StreetAuthority experts -- Carla Pasternak, Elliott Gue, Amy Calistri and Nathan Slaughter -- hold in their StreetAuthority portfolios, Mike figured out a way to squeeze out larger gains without using complicated tools such as derivatives, options or futures.

As I said, Mike's technique earned an average annual gain of 21.4% during his decade-long backtest -- that's three times the comparable rate of gain in the S&P 500. Take a look at the growth of $100,000 during that time:

Best of all, anyone can follow along using their current brokerage account.

So how did he do it?

Over the decades, Mike has developed a one-of-a-kind system to better identify stocks most likely to rise... and to avoid the ones most likely to fall. I'll let him get into all the details in the coming days. For now, just know that Mike's system uses a few simple concepts that anyone can pick up easily.

By laying this system on top of the stocks our experts a! lready recommend, Mike is finding remarkable returns and maximizing profits.

The results haven't been finalized, but they should be finished in about a week.

Rest assured, once ready, you'll be hearing more from Mike about this opportunity on StreetAuthority. This is going to be big.

Action to Take --> If you want to be sure you're the first to hear about Mike's findings when they are released, we've set up a way for you to express your interest. All you have to do is click the link below to register. Once you sign up, we'll send you updates about Mike's work as they happen and also give you instant access to a free, brand-new report that Mike just wrote.

This report -- The Top 5 S&P Stocks Signaling 'Buy' -- will give you an in-depth look at some of Mike's techniques. It's like watching over the shoulder of an expert trader. Best of all, Mike puts his technique to the test, uncovering the five highest-rated stocks in the S&P 500. According to his analysis, these are among the best stocks for you to buy and own right now.

Mike's picks include a health care company that's raised earnings 171% in a year... and another company that is up more than 600% in the past 20 months.

Click the link below to get your free copy of this report, The Top 5 S&P Stocks Signaling "Buy," and register for updates from Mike. You don't want to miss this opportunity. Simply click here for instant access to Mike's latest report.

Citi Settles FHFA Suit. Here's Why It's Still a Buy

U.S. stocks opened lower this morning, with the S&P 500 (SNPINDEX: ^GSPC  ) and the narrower, price-weighted Dow Jones Industrial Average (DJINDICES: ^DJI  ) down 0.47% each at 10:05 a.m. EDT.

Citi breaks with its peers
Did Citigroup (NYSE: C  ) just agree to be ransomed, or is the bank just wisely paying to move forward? Citi has broken with its peers in settling one of the last post-crisis lawsuits brought by the Federal Housing Finance Agency against 17 banks in 2011. The FHFA's claim was that the banks had mis-sold mortgage-backed securities to Fannie Mae and Freddie Mac, the government-sponsored mortgage companies that were effectively nationalized in 2008 at the height of the credit crisis.

Citi's decision looks like a smart one to me. According to the Financial Times, similar lawsuits have been settled for "cents on each dollar" of the total principal amount in question. For Citi, that principal amount is $3.5 billion, so a rough estimate of the settlement doesn't look exorbitant, particularly once you compare it to the opportunity cost of diverted management time and focus, the tangible cost of high-priced securities and litigation lawyers, and the drag these lawsuits have had on the multiple that investors have been willing to award the stock.

Admittedly, investors have already rerated the shares, which finished last year at a price-to-tangible-book-value multiple of 0.75. As of yesterday's close, the stock was poised to trade at or above its tangible book value for the first time since the second quarter of 2011, with a multiple of 0.99. That increase has enabled Citi shares to outperform those of its two nearest peers and the S&P 500 year to date:

C Total Return Price data by YCharts.

How far does the stock have to run? In an interview published in Barron's on May 18, legendary value investor Leon Cooperman outlined his thesis for the stock:

One of our holdings is Citigroup, which trades at around $50, or roughly 0.9 times tangible book value. We believe the new management at Citi can more than double its return on tangible equity in the next two to three years by reducing the drag from the runoff of the Citi Holdings entity, which consists of businesses and portfolios that the company is exiting.

The installation of Michael Corbat as CEO, along with Michael O'Neill as chairman, was an important inflection point. O'Neill has proved that he can turn around franchises, most recently at Bank of Hawaii after the dot-com bubble burst. Citi can earn at least $5 a share this year, versus a consensus of $4.70, primarily through cost-cutting and reducing losses at Citi Holdings. By the end of 2014, through a combination of cost-cutting, buybacks, noncore-asset sales, and winding down runoff entities, Citi can be a $70 stock.

In a roaring bull market that offers fewer and fewer bargains, Citi still looks reasonably priced. The bank, long discarded by investors as a basket case, could continue to regain favor as investors become more familiar with its turnaround.

Is B of A a buy?
Bank of America's stock doubled in 2012. Is there more yet to come? With significant challenges still ahead, it's critical to have a solid understanding of this megabank before adding it to your portfolio. In The Motley Fool's premium research report on B of A, analyst Anand Chokkavelu, CFA, and financials bureau chief Matt Koppenheffer lift the veil on the bank's operations, detailing three reasons to buy and three reasons to sell. Click here now to claim your copy.

Why Integra LifeSciences Holdings May Be About to Take Off

Here at The Motley Fool, I've long cautioned investors to keep a close eye on inventory levels. It's a part of my standard diligence when searching for the market's best stocks. I think a quarterly checkup can help you spot potential problems. For many companies, products that sit on the shelves too long can become big trouble. Stale inventory may be sold for lower prices, hurting profitability. In extreme cases, it may be written off completely and sent to the shredder.

Basic guidelines
In this series, I examine inventory using a simple rule of thumb: Inventory increases ought to roughly parallel revenue increases. If inventory bloats more quickly than sales grow, this might be a sign that expected sales haven't materialized. Is the current inventory situation at Integra LifeSciences Holdings (Nasdaq: IART  ) out of line? To figure that out, start by comparing the company's inventory growth to sales growth. How is Integra LifeSciences Holdings doing by this quick checkup? At first glance, OK, it seems. Trailing-12-month revenue increased 4.5%, and inventory increased 4.1%. Comparing the latest quarter to the prior-year quarter, the story looks decent. Revenue expanded 0.2%, and inventory increased 4.1%. Over the sequential quarterly period, the trend looks worrisome. Revenue dropped 8.3%, and inventory grew 4.5%.

Advanced inventory
I don't stop my checkup there, because the type of inventory can matter even more than the overall quantity. There's even one type of inventory bulge we sometimes like to see. You can check for it by examining the quarterly filings to evaluate the different kinds of inventory: raw materials, work-in-progress inventory, and finished goods. (Some companies report the first two types as a single category.)

A company ramping up for increased demand may increase raw materials and work-in-progress inventory at a faster rate when it expects robust future growth. As such, we might consider oversized growth in those categories to offer a clue to a brighter future, and a clue that most other investors will miss. We call it "positive inventory divergence."

On the other hand, if we see a big increase in finished goods, that often means product isn't moving as well as expected, and it's time to hunker down with the filings and conference calls to find out why.

What's going on with the inventory at Integra LifeSciences Holdings? I chart the details below for both quarterly and 12-month periods.

Source: S&P Capital IQ. Data is current as of latest fully reported quarter. Dollar amounts in millions. FY = fiscal year. TTM = trailing 12 months.

Source: S&P Capital IQ. Data is current as of latest fully reported quarter. Dollar amounts in millions. FQ = fiscal quarter.

Let's dig into the inventory specifics. On a trailing-12-month basis, raw materials inventory was the fastest-growing segment, up 9.1%. On a sequential-quarter basis, work-in-progress inventory was the fastest-growing segment, up 6.4%. Integra LifeSciences Holdings may display positive inventory divergence, suggesting that management sees increased demand on the horizon.

Foolish bottom line
When you're doing your research, remember that aggregate numbers such as inventory balances often mask situations that are more complex than they appear. Even the detailed numbers don't give us the final word. When in doubt, listen to the conference call, or contact investor relations. What at first looks like a problem may actually signal a stock that will provide great returns. And what might look hunky-dory at first glance could actually be warning you to cut your losses before the rest of the Street wises up.

Is Integra LifeSciences Holdings the best health care stock for you? Learn how to maximize your investment income and "Secure Your Future With 9 Rock-Solid Dividend Stocks," including one above-average health care logistics company. Click here for instant access to this free report.

Add Integra LifeSciences Holdings  to My Watchlist.

Best Bank Stocks To Own Right Now

LISBON, Portugal (AP) -- Portugal sold 10-year bonds Tuesday for the first time since it needed a bailout in 2011, representing a milestone in efforts to restore investor confidence in the frail eurozone country and prove that contested austerity policies are paying off.

Though Portugal remains a ward of its bailout creditors and a full economic recovery will still take years, its success in raising 3 billion euros ($3.9 billion) on international markets was a welcome positive sign for European leaders eager to put a three-year financial crisis behind them.

Portugal, one of five eurozone countries that have needed rescue, hadn't sold long-term debt since it needed 78 billion euros ($102 billion) two years ago to escape bankruptcy. The three major international ratings agencies downgraded Portugal's credit worthiness to junk status as the debt-heavy country fell victim to the eurozone financial crisis that spooked investors.

Best Bank Stocks To Own Right Now: NAPCO Security Technologies Inc.(NSSC)

Napco Security Technologies, Inc., together with its subsidiaries, manufactures and sells security products for intrusion, fire, video, wireless, access control, and door locking systems. The company offers intrusion and fire alarms, building access control systems, and electronic locking devices for commercial, residential, institutional, industrial, and governmental applications. Its access control systems comprise identification readers, control panel, personal computer-based computer, and electronically activated door-locking devices; alarm systems include automatic communicators, control panels, combination control panels/digital communicators and digital keypad systems, door security devices, fire alarm control panels, and area detectors; and video surveillance systems consists of video cameras, control panel, and video monitor or personal computer. The company also markets peripheral and related equipment manufactured by other companies. It sells and markets its pro ducts to independent distributors, dealers, and installers of security equipment worldwide. The company was formerly known as NAPCO Security Systems, Inc. and changed its name to Napco Security Technologies, Inc. in January 2009. Napco Security Technologies, Inc. was founded in 1969 and is headquartered in Amityville, New York.

Best Bank Stocks To Own Right Now: Wolseley Plc(WOS.L)

Wolseley plc engages in the distribution of plumbing and heating products, and building materials to the professional contractors primarily in the United States, Canada, the United Kingdom, France, Nordic region, and central Europe. The company supplies plumbing, heating, and air conditioning products comprising baths, showers and accessories, sanitaryware, brassware, bathroom furniture, boilers and burners, radiators and valves, hot water cylinders and flues, control equipment, ventilation and air conditioning equipment, heat pumps and solar equipment, plastic pipes and fittings, and copper tubing and fittings. It also distributes building materials, such as insulation, plaster and plasterboard, roofing materials, bricks, blocks and aggregates, tiles and flooring, timber products, doors and frames, glass, beams, trusses and frames, hardware and tools, and cement. In addition, the company supplies civils/waterworks products, such as drainage pipes, and associated supplies and covers; underground pressure pipes; small bore pressure pipes and fittings; carbon and stainless steel pipes, and valves and fittings; and other pipes, valves, and fittings. Further, it distributes electrical cables and cabling accessories, controls and switchgears, wiring accessories, lighting, data networking supplies, and cable management products, as well as engages in the installation, maintenance, and management of customer inventory. As of July 31, 2011, the company operated 3,837 branches in 23 countries. Wolseley plc was founded in 1887 and is headquartered in Zug, Switzerland.

Best Net Payout Yield Stocks To Watch Right Now: International Millennium Mining (IMI.V)

International Millennium Mining Corp., an exploration stage company, engages in acquiring, exploring, and evaluating mineral properties in Canada and the Americas. It primarily explores for gold, silver, cobalt, molybdenum, zinc, lead, nickel, copper, and platinum group metals. The company owns interests in various properties located in British Columbia and Ontario, Canada; Nevada, the United States; and Sonora State, Mexico. International Millennium Mining Corp. is headquartered in North Vancouver, Canada.

Don't Get Too Worked Up Over U.S. Silica Holdings's Earnings

Although business headlines still tout earnings numbers, many investors have moved past net earnings as a measure of a company's economic output. That's because earnings are very often less trustworthy than cash flow, since earnings are more open to manipulation based on dubious judgment calls.

Earnings' unreliability is one of the reasons Foolish investors often flip straight past the income statement to check the cash flow statement. In general, by taking a close look at the cash moving in and out of the business, you can better understand whether the last batch of earnings brought money into the company, or merely disguised a cash gusher with a pretty headline.

Calling all cash flows
When you are trying to buy the market's best stocks, it's worth checking up on your companies' free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That's what we do with this series. Today, we're checking in on U.S. Silica Holdings (NYSE: SLCA  ) , whose recent revenue and earnings are plotted below.

Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. Dollar values in millions. FCF = free cash flow. FY = fiscal year. TTM = trailing 12 months.

Over the past 12 months, U.S. Silica Holdings burned $19.0 million cash while it booked net income of $77.3 million. That means it burned through all its revenue and more. That doesn't sound so great. FCF is less than net income. Ideally, we'd like to see the opposite.

All cash is not equal
Unfortunately, the cash flow statement isn't immune from nonsense, either. That's why it pays to take a close look at the components of cash flow from operations, to make sure that the cash flows are of high quality. What does that mean? To me, it means they need to be real and replicable in the upcoming quarters, rather than being offset by continual cash outflows that don't appear on the income statement (such as major capital expenditures).

For instance, cash flow based on cash net income and adjustments for non-cash income-statement expenses (like depreciation) is generally favorable. An increase in cash flow based on stiffing your suppliers (by increasing accounts payable for the short term) or shortchanging Uncle Sam on taxes will come back to bite investors later. The same goes for decreasing accounts receivable; this is good to see, but it's ordinary in recessionary times, and you can only increase collections so much. Finally, adding stock-based compensation expense back to cash flows is questionable when a company hands out a lot of equity to employees and uses cash in later periods to buy back those shares.

So how does the cash flow at U.S. Silica Holdings look? Take a peek at the chart below, which flags questionable cash flow sources with a red bar.

Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. Dollar values in millions. TTM = trailing 12 months.

When I say "questionable cash flow sources," I mean items such as changes in taxes payable, tax benefits from stock options, and asset sales, among others. That's not to say that companies booking these as sources of cash flow are weak, or are engaging in any sort of wrongdoing, or that everything that comes up questionable in my graph is automatically bad news. But whenever a company is getting more than, say, 10% of its cash from operations from these dubious sources, investors ought to make sure to refer to the filings and dig in.

U.S. Silica Holdings's issue isn't questionable cash flow boosts, but items in that suspect group that reduced cash flow. Within the questionable cash flow figure plotted in the TTM period above, changes in taxes payable provided the biggest boost, at 3.9% of cash flow from operations. Overall, the biggest drag on FCF came from capital expenditures.

A Foolish final thought
Most investors don't keep tabs on their companies' cash flow. I think that's a mistake. If you take the time to read past the headlines and crack a filing now and then, you're in a much better position to spot potential trouble early. Better yet, you'll improve your odds of finding the underappreciated home-run stocks that provide the market's best returns.

Can your retirement portfolio provide you with enough income to last? You'll need more than U.S. Silica Holdings. Learn about crafting a smarter retirement plan in "The Shocking Can't-Miss Truth About Your Retirement." Click here for instant access to this free report.

We can help you keep tabs on your companies with My Watchlist, our free, personalized stock tracking service.

Add U.S. Silica Holdings to My Watchlist.

Russian Economist Critical of Putin Flees Pressure

MOSCOW (AP) -- A liberal Russian economist who has criticized President Vladimir Putin's policies said Friday he fled Russia on a day's notice because of fears of losing his freedom on "very bogus grounds."

Sergei Guriev told The Associated Press that he wanted to escape pressure from a new criminal investigation around jailed oligarch Mikhail Khodorkovsky, once Russia's richest man.

In a 25-minute phone conversation from Paris, where he arrived on a one-way flight on April 30, Guriev said he feared he could share the fate of witnesses in two previous investigations into Khodorkovsky who were later charged and died in prison.

"I don't see under what circumstances I can return," he said.

Investigators began proceedings early this year against the authors of an expert report commissioned by then-president Dmitry Medvedev in 2011, to which Guriev contributed, that criticized Khodorkovsky's conviction in late 2010 for embezzling oil. He had been imprisoned since 2003 on charges of avoiding taxes on the same oil.

Khodorkovsky is due to be released early next year, and Russia's supreme court is to reconsider the verdict in the second case in August. His supporters fear, however, that investigators are preparing a third set of charges to ensure he remains in jail.

According to investigators, the authors of the report had a conflict of interest because they had previously received money from Khodorkovsky.

Guriev denied receiving money from Khodorkovsky's oil company, Yukos, once Russia's largest, or bank, Menatep. However, Guriev said that he did not consider that it would have been illegal to do so.

Two of the other five experts have been questioned by investigators but have not been charged.

Guriev began to worry when investigators interrogated him three times and searched his office, seizing hundreds of pages of documents and 45 gigabytes of emails dating back five years, on grounds he described as "extremely absurd."

Though Guriev is only a witness in the case, he said his shock at investigators' "lack of respect for the letter and spirit of the law" made him worry that they could name him as a suspect and take his passport away.

Guriev said he could not discuss the interrogations because he had signed a non-disclosure agreement. However, he said investigators informally told him that he was fair game for legal pressure because he had "started his political activity" in 2008, when he began advising Medvedev.

Guriev's family moved to Paris without him 3 and a half years earlier. "If it were part of a bigger plan, I would have of course moved before," he said.

Guriev said he regretted not listening to his wife, economist Ekaterina Zhuravskaya, who left with their children for France after a spousal dispute over Russia's future. Zhuravskaya "turned out to be a wiser and more sane person than I was: I was less cynical, she was more," he said.

"She's an academic, I'm an academic: we talk in terms of general probabilities, scenarios, various options, and one of those options materialized. There are some people who get in trouble for this and some people who get in trouble for that, and I got in trouble for this," he added.

Guriev, who ran Moscow's respected New Economic School from 2005 until his departure, has long enjoyed the reputation as one of Russia's top economists and something of a maverick. U.S. President Barack Obama spoke at the school while on a state visit in 2009 which both sides used as a springboard for improving relations.

When Medvedev was president from 2008 to 2012, Guriev was an informal government advisor and was seen as a key figure encouraging Westerners to invest in Russia.

Guriev's sudden departure has made him a poster boy for the uncertainty and fear gripping liberal members of the Russian elite. On Friday, Guriev polled the maximum possible among all candidates to the board of state-run banking giant Sberbank, even beating its chairman German Gref, though Guriev had withdrawn from the running after leaving Russia.

Liberal figures who flourished under Medvedev, who is now prime minister and widely derided as weak, have come under heavy fire since Putin returned to the presidency last year.

Leading Kremlin strategist Vladislav Surkov, who is believed to have pushed for Medvedev to remain president, resigned earlier this month after a public spat with investigators over attempts to develop a Russian Silicon Valley, one of Medvedev's flagship projects.

Akhmed Bilalov, whose cousin went to university with deputy prime minister Arkady Dvorkovich, one of Medvedev's top advisors, was fired from Russia's Olympic Committee after a public upbraiding from Putin and left Russia claiming that his office had been poisoned with mercury. Dvorkovich has been engaged in a semi-public dispute for months with Rosneft CEO Igor Sechin, a close Putin confidante thought to head the Kremlin's hawkish faction.

"In the last year we've seen a lot of things which we thought are impossible," Guriev, said. "Some people who were high profile are now no longer there."

After the wave of pressure from investigators began, Guriev reached out to high-profile connections in Russia's government. In April, a senior official told him that he was in the room when Putin called chief investigator Alexander Bastrykin and told him that there was no reason to investigate Guriev.

In May, after he left, senior figures told Guriev that he had nothing to worry about and could return to Russia, but that Putin had said he could not interfere with investigators' work.

Putin's spokesman Dmitry Peskov told Russian media earlier this week that Guriev's departure was a personal matter and that the Kremlin had no hand in it.

Despite his closeness to the Kremlin, Guriev was equally ready to associate himself with Kremlin critics. He publicly contributed to opposition leader Alexey Navalny's anti-corruption foundation and criticized an ongoing prosecution of Navalny for alleged timber embezzlement as without merit.

While being used to promote Russia at major investment forums, Guriev rarely shied from criticizing Russia's oil-and-gas-driven economic model. Speaking alongside Medvedev as the latter offered optimistic visions of Russia's future, Guriev frequently warned that a sharp drop in the oil price would eviscerate the Russian economic system. Guriev supported privatization of state-run companies, a move strongly opposed by figures like Sechin.

The most troubling sign for Guriev came when he and his wife noticed that authorities put red flags on their passports after the Khodorkovsky investigation began. "When the border officer entered my passport, he lost speech and called his superiors," who told him to enter additional information and copy all the pages of the passport, Guriev said.

When Guriev asked investigators why this happened, he said officials told him that monitoring his travel was part of the investigation.

"They never hid their political agenda," Guriev said. "A lot of people in Russia think that the actions in my case are normal and I should have stayed," he added. "But I think I had no choice."