BlackBerry Q10 Preorders Launch on T-Mobile April 29

BlackBerry's (NASDAQ: BBRY  ) new Q10 smartphone will be available for preorder for business customers on T-Mobile's website April 29, according to an online statement by the carrier.

The Q10 will sport 4G LTE connectivity, with a physical keyboard and touchscreen display. The new smartphone will add to a growing list of T-Mobile 4G LTE phones, including the recent iPhone, which launched on the carrier earlier this month.

Drew Kelton, executive vice president of business markets at T-Mobile, said, "With the powerful combination of BlackBerry's new BlackBerry 10 platform, the company's long-standing security features, and BlackBerry's best QWERTY keyboard, the BlackBerry Q10 will be another great smartphone option for our business customers." 

T-Mobile recently ran into problems selling the much-anticipated Samsung Galaxy S4, pushing the online ordering date back from April 24 to April 29. T-Mobile and BlackBerry haven't said when the Q10 will be available, or what the price will be.

Is Apple Officially an Income Investment?

It may seem unusual to think of Apple (NASDAQ: AAPL  ) as a dividend stock, but that may be the stock's inevitable destiny. Already, Apple's dividend yield is approaching 3%, and that's before a likely significant dividend boost that many analysts are predicting.

If Apple does increase its dividend, how will it affect the stock over the long haul? As Fool contributor Daniel Sparks discusses with Fool.com's Erin Miller, a shift in sentiment from a growth investment to an income investment could boost the price.

There's no doubt that Apple is at the center of technology's largest revolution ever and that longtime shareholders have been handsomely rewarded, with more than 1,000% gains. However, there is a debate raging as to whether Apple remains a buy. The Motley Fool's senior technology analyst and managing bureau chief, Eric Bleeker, is prepared to fill you in on both reasons to buy and reasons to sell Apple and what opportunities are left for the company (and your portfolio) going forward. To get instant access to his latest thinking on Apple, simply click here now.

 

Goldman Sachs Group Inc. Bonds: How Much Risk, How Much Reward?

Commercial banks in the United States are required to prove to their regulators that their investments are in fact "investment grade" as defined by the regulators. In this note we analyze the current levels and past history of default probabilities for Goldman Sachs Group (GS). We compare those default probabilities to credit spreads on 1,162 bond trades in 134 different company bond issues on July 31, 2013. This trading volume made Goldman Sachs Group the second most heavily traded name on the day, trailing only General Electric (GE) Credit Corporation. Goldman Sachs Group has some of the lowest default probabilities of any firm analyzed in this series of credit notes to date. Trading volume in these 134 Goldman Sachs Group bonds on July 31 totaled $358.3 million, and the analysis in this note is based on those traded prices.

Assuming the recovery rate in the event of default would be the same on all bond issues, a sophisticated investor who has moved beyond legacy ratings seeks to maximize revenue per basis point of default risk from each incremental investment, subject to risk limits on macro-factor exposure on a fully default-adjusted basis. We analyze the maturities where the credit spread/default probability ratio is highest for Goldman Sachs Group. We also consider whether or not a reasonable investor would judge the firm to be "investment grade" under the June 2012 rules mandated by the Dodd-Frank Act of 2010.

Definition of Investment Grade

On June 13, 2012, the Office of the Comptroller of the Currency published the final rules defining whether a security is "investment grade," in accordance with Section 939A of the Dodd-Frank Act of 2010. The new rules delete reference to legacy credit ratings and replace them with default probabilities as explained here.

Term Structure of Default Probabilities

Maximizing the ratio of credit spread to matched maturity default probabilities requires that default probabilities be available a! t a wide range of maturities. The graph below shows the current default probabilities for Goldman Sachs Group ranging from one month to 10 years on an annualized basis. The default probabilities range from 0.00% at one month to 0.00% at 1 year and 0.04% at ten years. Note that the default probabilities at the 1 month and 1 year maturity are not literally zero -- they are reported as zero only because of rounding to two decimal places.

(click to enlarge)

We explain the source and methodology for the default probabilities below.

Summary of Recent Bond Trading Activity

The National Association of Securities Dealers launched the TRACE (Trade Reporting and Compliance Engine) in July 2002 in order to increase price transparency in the U.S. corporate debt market. The system captures information on secondary market transactions in publicly traded securities (investment grade, high yield and convertible corporate debt) representing all over-the-counter market activity in these bonds. TRACE data for Goldman Sachs Group included 1,162 trades in 134 fixed-rate non-callable bonds of the firm on July 31, 2013.

The graph below shows 5 different yield curves that are relevant to a risk and return analysis of Goldman Sachs Group bonds. These curves reflect the noise in the TRACE data, as some of the trades are small odd-lot trades. The lowest curve, in dark blue, is the yield to maturity on U.S. Treasury bonds, interpolated from the Federal Reserve H15 statistical release for that day, that matches the maturity of the traded bonds of Goldman Sachs Group. The second lowest curve, in the lighter blue, shows the yields that would prevail if investors shared the default probability views outlined above, assumed that recovery in the event of default would be zero, and demanded no liquidity premium above and beyond the default-adjusted risk-free yield. The third line from the bottom (in orange) graphs! the lowe! st yield reported by TRACE on that day on Goldman Sachs Group bonds. The fourth line from the bottom (in green) displays the average yield reported by TRACE on the same day. The highest yield is obviously the maximum yield in each Goldman Sachs Group issue recorded by TRACE.

The data makes it very clear that there is a very large liquidity premium built into the yields of Goldman Sachs Group above and beyond the "default-adjusted risk free curve" (the risk-free yield curve plus the matched maturity default probabilities for the firm). The credit spreads are volatile because the traded prices provided by TRACE are volatile, even on the same underlying bond on the same day.

(click to enlarge)

The high, low and average credit spreads at each maturity are graphed below. Credit spreads are gradually increasing with the maturity of the bonds, although the TRACE data shows that credit spreads vary considerably during the day, in part as a function of the amount of bonds bought or sold in a given trade.

(click to enlarge)

Using default probabilities in addition to credit spreads, we can analyze the number of basis points of credit spread per basis point of default risk at each maturity. This ratio of spread to default probability is shown in the following table for Goldman Sachs Group. At all maturities, the reward from holding the bonds of Goldman Sachs Group, relative to the matched maturity default probability, is at least 25 basis points of credit spread reward for every basis point of default risk incurred. The ratio of spread to default probability is literally "off the charts" at maturities under 2 years because of the near-zero default probabilities for Goldman Sachs Group at those maturities.

(click to enlarge)

(click to enlarge)

The credit spread to default probability ratios are shown in graphic form here, with the vertical axis capped at a ratio of 100 times:

(click to enlarge)

The Depository Trust & Clearing Corporation reports weekly on new credit default swap trading volume by reference name. For the week ended July 26, 2013 (the most recent week for which data is available), the credit default swap trading volume on Goldman Sachs Group showed 25 contracts trading with a notional principal of $191.8 million for the entire week. The next graph shows the weekly number of credit default swaps traded on Goldman Sachs Group in the 155 weeks ended June 28, 2013. Goldman Sachs Group ranked 21st of 1,144 reference names in contracts traded over this period:

(click to enlarge)

The table below summarizes the key statistics of credit default swap trading in Goldman Sachs Group during this three year period.

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On a cumulative basis, the default probabilities for Goldman Sachs Group range from 0.00% at 1 year (rounded to 2 decimal places) to 0.35% at 10 years, as shown in the following graph.

(click to enlarge)

Over the last decade, the 1 year and 5 year default probabilities for Goldman Sachs Group have varied as shown in the following graph. The one year default probability peaked at just under 0.35% and the 5 year default probability peaked at just under 0.25% during that period. This is an exceptional performance rel! ative to ! other securities firms that failed or were rescued during the credit crisis.

(click to enlarge)

The legacy credit ratings (those reported by credit rating agencies like McGraw-Hill (MHFI) unit Standard & Poor's and Moody's (MCO)) for Goldman Sachs Group have changed only three times during the decade.

The macro-economic factors driving the historical movements in the default probabilities of Goldman Sachs Group include the following factors of those listed by the Federal Reserve in its 2013 Comprehensive Capital Analysis and Review:

Real gross domestic product The consumer price indexThe 30 year fixed rate mortgage yieldThe Dow Jones Industrial indexThe VIX volatility indexHome price indicesCommercial real estate price indices3 international macro factors

These macro factors explain 85.3% of the variation in the default probability of Goldman Sachs Group, a high proportion.

Goldman Sachs Group can be compared with its peers in the same industry sector, as defined by Morgan Stanley and reported by Compustat. For the US diversified financials sector, Goldman Sachs Group has the following percentile ranking for its default probabilities among its peers at these maturities:

1 month 5th percentile

1 year 6th percentile

3 years 13th percentile

5 years 0th percentile

10 years 0th percentile

Goldman Sachs Group is the least risky of the 220 firms in the US diversified financials sector at 5 and 10 year maturities. A comparison of the legacy credit rating for Goldman Sachs Group with predicted ratings indicates that the statistically predicted rating is 1 ratings notch below the actual legacy rating assigned to the company.

Conclusions

Goldman Sachs was literally the only large U.S. securities firm that survived the credit crisis without (a) borrowing a very significant amount of money from the Federal Reserve and without (b) a near-deat! h experie! nce. A Kamakura Corporation study showed that Goldman's peak borrowings from the Fed during the crisis were $24.2 billion on October 15, 2008. Current short-term default risk is so close to zero that default probabilities are indistinguishable from zero when rounding to two decimal places at one month and one year maturities. The company currently offers more compensation in terms of credit spread per basis point than any other company yet reviewed in this series. Legacy credit ratings for Goldman Sachs Group are one notch higher than that which one would predict using the best available statistics and default probabilities. The main risk facing Goldman Sachs Group is the potential for a sudden failure of risk management, in spite of the firm's fine reputation in this regard. JPMorgan Chase (JPM) had the same such reputation before the London Whale trading losses were announced in 2012. At current default probability levels, we believe that a very strong majority of sophisticated analysts would rate Goldman Sachs Group investment grade by the Comptroller of the Currency definition.

Background on Default Probabilities Used

The Kamakura Risk Information Services version 5.0 Jarrow-Chava reduced form default probability model makes default predictions using a sophisticated combination of financial ratios, stock price history, and macro-economic factors. The version 5.0 model was estimated over the period from 1990 to 2008, and includes the insights of the worst part of the recent credit crisis. Kamakura default probabilities are based on 1.76 million observations and more than 2000 defaults. The term structure of default is constructed by using a related series of econometric relationships estimated on this data base. An overview of the full suite of related default probability models is available here.

General Background on Reduced Form Models

For a general introduction to reduced form credit models, Hilscher, Jarrow and van Deventer (2008) is a good place to begin. Hilscher and Wi! lson (201! 3) have shown that reduced form default probabilities are more accurate than legacy credit ratings by a substantial amount. Van Deventer (2012) explains the benefits and the process for replacing legacy credit ratings with reduced form default probabilities in the credit risk management process. The theoretical basis for reduced form credit models was established by Jarrow and Turnbull (1995) and extended by Jarrow (2001). Shumway (2001) was one of the first researchers to employ logistic regression to estimate reduced form default probabilities. Chava and Jarrow (2004) applied logistic regression to a monthly database of public firms. Campbell, Hilscher and Szilagyi (2008) demonstrated that the reduced form approach to default modeling was substantially more accurate than the Merton model of risky debt. Bharath and Shumway (2008), working completely independently, reached the same conclusions. A follow-on paper by Campbell, Hilscher and Szilagyi (2011) confirmed their earlier conclusions in a paper that was awarded the Markowitz Prize for best paper in the Journal of Investment Management by a judging panel that included Prof. Robert Merton.

Source: Goldman Sachs Group Inc. Bonds: How Much Risk, How Much Reward?

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. (More...)

Top Value Stocks To Watch For 2014

This Spin-off ETF mimics the Beacon Spin-off Index, which tracks companies spun off from a parent company within the past 30 months; the ETF has trounced the S&P 500 since its inception in May 2006, observes Nicholas Vardy in the Alpha Investor Letter.

A spin-off can be the distribution of stock of a subsidiary company by its parent-to-parent company's shareholders. It can be also an equity carve-out, or partial initial public offering in which a parent company sells a percentage of the equity of a subsidiary to public shareholders.

The objective of a spin-off is to unlock hidden value. Indeed, research confirms that spin-offs generally outperform their parents and are profitable, both in terms of operating cash flow, and outside investor returns.

The performance of the Guggenheim Spin-Off ETF (CSD) may also be boosted by another unrelated, but equally powerful, concept—the small-cap effect.

Top Value Stocks To Watch For 2014: Chyron Corporation(CHYR)

Chyron Corporation supplies graphics hardware, software, and workflow solutions for multimedia outlets; government agencies; telecommunications and corporate customers; and educational, health, and religious institutions. It offers AXIS Graphics online content creation software, HD/SD switchable on-air graphics systems, clip servers, channel branding and telestration systems, graphic asset management and XMP integration solutions, and the WAPSTR mobile phone newsgathering application. The company?s graphics products provide broadcast-quality, real-time, HD/SD, 2D/3D, graphics creation and playout for television stations, networks, video production, and post-production markets. Its hardware products include Graphics System/CG Family for television graphics applications; Channel Box systems for branding applications; XClyps/XClyps SAN/MicroClyps for control over graphics playout; CodiStrator HD/SD Telestration Systems that enable commentators to illustrate in real time over live video; and platforms and board sets for third-party developers. The company also provides AXIS Graphics suite of Web-based services and applications; and AXIS order management systems. In addition, it offers Software Products, such as Lyric, an advanced graphics creation and playback application; the Lyric Enhancement Interface Framework, an application programming interface for developing custom programs; and Chyron Application Library, an API that can be used to real time broadcast graphics applications. Further, it provides newsroom integration and asset management products comprising Chyron Asset Management InterOperability; iRB, an intelligent rundown builder; iSQ, an intelligent sequencer; and mobile suite, as well as graphic design, technical, and support and training services. Chyron Corporation was formerly known as The Computer Exchange, Inc. and changed its name to Chyron Corporation in November 1975. The company was founded in 1966 and is headquartered in M elville, New York.

Top Value Stocks To Watch For 2014: American Science and Engineering Inc.(ASEI)

American Science and Engineering, Inc., together with its subsidiaries, develops, manufactures, markets, and sells X-ray inspection and other detection products for detection and security screening solutions in the United States and internationally. It offers cargo inspection systems comprising non-intrusive inspection products, which are primarily used for the screening of trucks, cars, cargo containers, pallets, and air cargo at border crossings, seaports, military bases, airports, and cargo and transportation hubs. The cargo inspection systems include OmniView gantry system, a cargo and vehicle inspection system; Z Portal system, a drive-through inspection system for scanning cargo and vehicles; Z Gantry system, a Z Backscatter inspection system for scanning cars, vans, trucks, and their cargo; Sentry Portal system, a drive through transmission X-ray inspection system; and MobileSearch High-Energy, a mobile inspection system for scanning trucks, cargo containers, and ve hicles. The company also provides Z Backscatter systems, including Z Backscatter Van, a mobile X-ray screening system to produce photo-like images of plastic explosives or other anomalies; and ZBV Military Trailer, a rugged X-ray screening system built on military trailer. In addition, it offers parcel and personnel screening inspection system that comprises Gemini system, a parcel and baggage inspection system; and SmartCheck system, a personnel screening system for screening threats hidden under a person?s clothing. Further, the company provides contract research and development programs for agencies of the United States government; and maintenance, warranty, engineering, and training services. It serves authorities responsible for port and border security, customs agencies, military organizations, high threat commercial and government facilities, aviation security agencies, and law enforcement agencies. The company was founded in 1958 and is headquartered in Billerica, M assachusetts.

Best Stocks To Invest In 2014: B Communications Ltd. (BCOM)

B Communications Ltd. provides various communications services in Israel. The company offers a range of telecommunications services, including local fixed-line, cellular, Internet, international communication, multi-channel television, satellite broadcasting, and customer call center. It also engages in the development and maintenance of communications infrastructures; provision of communications services to other communications providers, television, and radio broadcasts; and supply and maintenance of equipment on customer premises, such as network endpoint services. The company was formerly known as 012 Smile.Communications Ltd. and changed its name to B Communications Ltd. in March 2010. The company was founded in 1999 and is headquartered in Ramat Gan, Israel. As of June 30, 2010, B Communications Ltd. operates as a subsidiary of Internet Gold-Golden Lines Ltd.

Middleby's CEO On How to Foster a Great Culture

In the following video interview, Motley Fool CEO Tom Gardner speaks with Middleby CEO Selim Bassoul. Since becoming CEO in 2000, Bassoul has led a remarkable transformation at Middleby, the cooking-equipment maker, turning the stock into a nearly 50-bagger over that time. In the video, he discusses the culture of Middleby, and what gives the company such a high employee retention rate.

Middleby is one of Tom Gardner's favorite stocks, but you can never have too many great companies in your portfolio. If you're looking for more ideas, our chief investment officer has selected a different stock as his favorite for this year. Find out which stock it is in the free report: "The Motley Fool's Top Stock for 2013." Just click here to access the report and find out the name of this under-the-radar company.

Tom Gardner: So let's talk about the culture for employees, because maybe somebody watching us is thinking, "Wow, that would be terrible to be working on New Year's Eve." What is it like to work at Middleby? What makes it a unique place to work? How well do you think you're doing by the stakeholder that is your employee?

Selim Bassoul: Well, we are proud to say that our turnover is 2%, so 98% retention. And simply, it's not because of perks. Our offices are not glamorous. In fact, our officers are most probably below standards. We don't have day care on premise. We do not have open cafeterias. We don't have free meals, but I'll tell you what we have.

We have two things that are very powerful. We have a mixture of autonomy, great autonomy, and great incentives. And I think I've learned that from an early age. I used to hate getting up to go to school, so my parents had to drag me to get to the bus stop because I hated getting to that school. Why? Because it was highly structured, it happened to be a Jesuit school, and I will talk about my early experience because it's relevant.

It was structured; it was military discipline. I was over-supervised at school. The teachers were not informative. They were basically going through the session without catering to a classroom. They were catering to the smartest, but then everybody else was left behind. I decided that in my company, I won't leave anybody behind. I wanted people to be empowered. I wanted people to have fun when they come to the job, and having fun is the ability to do two things. One, to be able to not have to deal with bureaucracy and feel that they are empowered; number two, be able to have a voice heard.

So in my business, I think in many of your members, they run businesses that have 60 to 80% blue collars. In my case, they are blue collars. They are workers in the shop, so they are literally ... doing work that has been designed by engineers with tools and equipment that been basically allocated and approved by accountants, and in many instances, they have to live with what they were given.

So one of the things I've done, while they go around our factory on a monthly basis to have employee meetings, I say if there is something, a design that's not good enough for you and you think it's not superior, stop it. Go back to the engineer and have rebellion. And that has created such a freedom among our employees. So many times engineers are literally stopped on the floor saying, "This design stinks. It's not good. It doesn't look good. It's not going to hold out in the field." So we've given that empowerment to our employees.

Over the past couple of days two banking companies have reported large insider buys coming from their CFOs. These buys come as the stocks hit a high in their price. The following two companies reported insider buys valued at over $100,000.

Hudson Valley Holding Corp. (HVB)

On July 30, Executive VP and CFO Michael Indiveri made a noticeable insider buy of 5,000 shares of his company's stock. The CFO purchased 5,000 shares at $20.79 per share. This transaction cost him a total of $103,950. Since his buy, the price per share has dropped 0.34%. As of his most recent purchase, Indiveri holds on to 12,000 shares of company stock.


This buy comes as the price per share hit a 1-year high.

Hudson Valley Holding is the holding company for Hudson Valley Bank. The bank serves small- and mid-sized businesses, professional services firms, not-for-profit organizations and select individuals in metropolitan New York. The company provides a full range of banking, trust and investment management services to niche commercial customers throughout the Bronx, Brooklyn and Manhattan.

Hudson Valley's historical price, revenue and net income:

[ Enlarge Image ]

The company recently reported its second quarter results which highlight:

· Net income of $3.5 million, or $0.18 per diluted share.
· Securities portfolio grew by $46.9 million in the second quarter.
· Loan originations and purchases totaled $112 million.
· Non-interest expense lowered by 5.7%.

The Peter Lynch Chart shows that Hudson Valley appears to be overvalued:

[ Enlarge Image ]

Hudson Valley Holding has a market cap of $414.1 million. Its shares are currently trading at around $20.72 with a P/E ratio of 27.50, a P/S ratio of 3.70 and a P/B ratio of 1.30. The company has a dividend yield of 2.30%.

Mario Gabelli and Colum! bia Wanger hold a stake in HVB. Click here to see their holding histories.

Cincinnati Financial Corp. (CINF)

On July 29 Senior VP, Treasurer and CFO, Michael Sewell, bought 3,000 shares of his company's stock as it's trading at a 10-year high price. The CFO purchased 3,000 shares at $49.03 per share. This cost Sewell a total of $147,090. Since his most recent buy, the price per share has declined approximately -0.08%. Sewell now holds on to a total of 19,501 shares of Cincinnati Financial stock.


Cincinnati Financial offers business, home and auto insurance through The Cincinnati Insurance Company and its two standard market property casualty companies.

Cincinnati Financial's historical price, revenue and net income:

[ Enlarge Image ]

The company's second quarter financials reported:

· Net income of $110 million, or $0.66 per share, compared to $32 million, or $0.20 per share, in the second quarter 2012.
· Operating income of $100 million, or $0.61 per share, more than tripling the second quarter 2012 results
· $34.83 book value per share at June 30, up 4% from Dec. 2012.

The Peter Lynch Chart shows that Cincinnati Financial is currently undervalued:

[ Enlarge Image ]

Cincinnati Financial has a market cap of $8.04 billion. Its shares are currently being traded at around $48.99 with a P/E ratio of 14.20, a P/S ratio of 1.90 and a P/B ratio of 1.40. The company's dividend yield is currently sitting at 3.30%.

There are six gurus that hold a position in CINF. Click here to see their holding histories.

You can view all insider transactions here. Also check out the insider buys and sells made by CEOs and CFOs.

Try a free 7-day premium membership here.

Should You Buy Into T-Mobile's Jump?

For a carrier focusing so heavily on transparency and communication with consumers, T-Mobile's (NYSE: TMUS  ) freshly unveiled Jump program is a bit confusing. On the surface, it sounds great: two smartphone upgrades every year instead of one smartphone upgrade every two years.

The devil is in the details. Should you buy into Jump?

How it works
To sign up for the program, subscribers will pay $10 per month. Included in the service is a comprehensive handset protection program (i.e., insurance) that covers things such as malfunction, damage, loss, and theft. The real kicker is the upgrade frequency that's included.

T-Mobile says the fee is only $2 more than what most people pay for handset protection alone. For reference, AT&T and Verizon Wireless both charge $7 for their protection programs, and Sprint Nextel prices at $8. All four carriers outsource the insurance underwriting to Asurion.

Six months after initial enrollment, customers can upgrade their smartphone twice every 12 months. To do so, customers just trade in their device and any remaining finance payments owed on the older device are eliminated, and they then purchase a new device for the listed upfront pricing with the associated financing plans. Devices that are traded in need to be in "good working condition," and there is a $20 to $170 deductible if there's any damage. There's no mention of receiving any residual value back.

But at what cost?
Let's look at it from a T-Mobile customer's perspective. Any smartphone user who's interested in upgrading this frequently faces two alternatives, with the first being Jump. The second choice is to simply buy smartphones at full retail and sell them to another user in six months after depreciation. I'll exclude service costs for this comparison.

To start, let's say you bought a flagship smartphone such as Apple's iPhone 5, which costs $146 upfront in addition to monthly payments of $21. You'll pay $60 in Jump fees before the first upgrade eligibility. For the first six months, that's $332 in total costs before making the jump to a new device.

Alternatively, you could purchase the same entry-level iPhone 5 for $650 and simply sell it after six months if you wanted to upgrade. Priceonomics did a study last year on smartphone resale value and found that on average, smartphones lose 25% of their value in the first six months (iPhones tend to hold their value better than other devices.) That suggests you could sell a 6-month-old iPhone 5 for $488 and lose only $163 in depreciation. Recent completed listings on eBay back up this theory, as does a Piper Jaffray study on smartphone resale values. That's half of what you lose in the Jump scenario.

The figures for other flagships such as Samsung's Galaxy S4 or HTC's One are similar (both have the same pricing). Under Jump, the first six months cost $280, while depreciation on the $580 retail price would be close to $145 -- again, roughly half as much.

Of course, with Jump you also get the insurance bundled in, but that still doesn't fully explain the cost difference. You could purchase standalone handset protection from T-Mobile for $8 per month, or $48 for six months. There's also the added convenience of an easy trade-in instead of having to sell your device on eBay or Craigslist, but how much is that convenience worth?

Look before you jump
As it stands, Jump isn't all that great of a deal. Customers who are interested in semiannual upgrades are better off just reselling their phones when they want to upgrade. You don't even have to necessarily pay full price upfront, since T-Mobile still offers financing plans; you'd just sell your device and pay off the balance when you're ready to make the switch.

Jump's incremental $2 per month over standalone insurance sounds enticing, but it appears that the carrier may profit on the trade-in once it turns around and resells the used device, since it's not giving back any residual value.

Don't make the Jump.

The mobile revolution is still in its infancy, but with so many different companies, it can be daunting to know how to profit in the space. Fortunately, The Motley Fool has released a free report on mobile named "The Next Trillion-Dollar Revolution" that tells you how. The report describes why this seismic shift will dwarf any other technology revolution seen before it and also names the company at the forefront of the trend. You can access this report today by clicking here -- it's free.

Is Materion Working Hard Enough for You?

Margins matter. The more Materion (NYSE: MTRN  ) keeps of each buck it earns in revenue, the more money it has to invest in growth, fund new strategic plans, or (gasp!) distribute to shareholders. Healthy margins often separate pretenders from the best stocks in the market. That's why we check up on margins at least once a quarter in this series. I'm looking for the absolute numbers, so I can compare them to current and potential competitors, and any trend that may tell me how strong Materion's competitive position could be.

Here's the current margin snapshot for Materion over the trailing 12 months: Gross margin is 16.4%, while operating margin is 3.4% and net margin is 2.1%.

Unfortunately, a look at the most recent numbers doesn't tell us much about where Materion has been, or where it's going. A company with rising gross and operating margins often fuels its growth by increasing demand for its products. If it sells more units while keeping costs in check, its profitability increases. Conversely, a company with gross margins that inch downward over time is often losing out to competition, and possibly engaging in a race to the bottom on prices. If it can't make up for this problem by cutting costs -- and most companies can't -- then both the business and its shares face a decidedly bleak outlook.

Of course, over the short term, the kind of economic shocks we recently experienced can drastically affect a company's profitability. That's why I like to look at five fiscal years' worth of margins, along with the results for the trailing 12 months, the last fiscal year, and last fiscal quarter (LFQ). You can't always reach a hard conclusion about your company's health, but you can better understand what to expect, and what to watch.

Here's the margin picture for Materion over the past few years.

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

Because of seasonality in some businesses, the numbers for the last period on the right -- the TTM figures -- aren't always comparable to the FY results preceding them. To compare quarterly margins to their prior-year levels, consult this chart.

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

Here's how the stats break down:

Over the past five years, gross margin peaked at 18.4% and averaged 15.6%. Operating margin peaked at 5.4% and averaged 3.1%. Net margin peaked at 3.6% and averaged 1.7%. TTM gross margin is 16.4%, 80 basis points better than the five-year average. TTM operating margin is 3.4%, 30 basis points better than the five-year average. TTM net margin is 2.1%, 40 basis points better than the five-year average.

With recent TTM operating margins exceeding historical averages, Materion looks like it is doing fine.

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Add Materion to My Watchlist.

Top 5 Tech Companies To Buy Right Now

Despite the poor quarterly earnings performance and massive losses to technology stocks today, a few of the Dow Jones Industrial Average's (DJINDICES: ^DJI  ) components did have a very good session this afternoon. But, first, let's take a look at how the major indexes performed. The Dow lost 4 points, or 0.03%, and now rests at 15,543, while the S&P 500 actually pulled out a win today by gaining 0.16%. The big index loser of the session, however, was the technology-heavy Nasdaq, which lost 0.66%, or 23 points.

Unlike most trading days, the key driver today was quarterly earnings. As I mentioned, the Dow's big technology stocks all had a rough day, as Microsoft fell the most, losing 11.4%, then Hewlett-Packard, down 4.52%. IBM lost 2.25%, and Intel shed 0.88% after poor earnings from Microsoft and Advanced Micro Devices put pressure on the PC industry.

Top 5 Tech Companies To Buy Right Now: inContact Inc.(SAAS)

inContact, Inc. provides cloud-based contact center software services and network connectivity in the United States. Its solutions include inContact ACD, an automatic call distributor; inContact CTI, a computer telephony integration that integrates with customer data servers to provide agents pre-populated customer data; inContact IVR, an interactive voice response solution to create specialized call flows; and inContact Integrations for integration of various hardware and software solutions already in place at customer sites. The company also offers inContact ECHO that gathers the opinion of the customer and presents the analysis of the feedback directly to supervisors and agents; inContact Workforce Management, which forecasts demand, schedules workforce, analyzes and optimizes staffing, and reports real-time adherence in contact centers; inContact Quality Monitoring that provides insights into agent performance and customer satisfaction; and InContact Screen Recording, which provides compliance level screen recording functionality for voice channel interactions. In addition, it provides inContact eLearning that offers targeted, prioritized training, communications, and testing to the agent?s desktop during dips in call volumes; and inContact Network Connectivity, which includes time division multiplexing and voice over Internet protocol (VoIP) connectivity, and toll-free and local-number services. Further, inContact, Inc. offers professional services, as well as operates as a domestic and international long distance reseller and aggregator. The company was formerly known as UCN, Inc. and changed its name to inContact, Inc. in January 2009. inContact, Inc. was founded in 1994 and is headquartered in Salt Lake City, Utah.

Top 5 Tech Companies To Buy Right Now: Jordec Group(JDG.L)

Judges Scientific plc, through its subsidiaries, engages in the design, manufacture, sale, and distribution of scientific instruments throughout the world. The company?s instruments are used for the measurement of the reaction of materials to fire; testing of the properties of fibre optic and fibre optic networks; and to purify noble gases for use in metals analysis using the Arc Spark spectrometry technique. Its instruments are also used for the creation of movement, heating, and cooling of objects within ultra high vacuum chambers; and to enable or improve the observation of objects under a microscope and prepare samples for examination in electron microscopes. The company, formerly known as Judges Capital plc, was founded in 2002 and is headquartered in East Grinstead, the United Kingdom.

Top Canadian Companies To Invest In 2014: Cdc Point Spa(CDC.MI)

CDC S.p.A. engages in the production and distribution of information technology (IT) products for the consumer and SOHO segments in Italy. The company engages in the provision of logistics management services comprising stock management and outbound logistics management, assembly of CDC brand personal computers, and sale of IT products under the Computer Discount brand. It also provides Internet services and portal services. The company offers its products through its distribution channel comprising 39 Cash & Carry outlets, retail channel consisting of 205 points of sale under the Computer Discount brand, and direct sales channel to IT retailers, system integrators, and other sector operators, as well as to public and private customers. In addition, it also involves in the real estate leasing activities. CDC S.p.A. was founded in 1986 and is based in Pontedera, Italy.

Top 5 Tech Companies To Buy Right Now: Rentrak Corporation(RENT)

Rentrak Corporation, an information management company, provides content measurement and analytical services to companies in the entertainment industry. The company delivers content performance data for various entertainment platforms and media technologies, including television, theatrical, home entertainment, mobile, and broadband video. It operates in two divisions, Home Entertainment, and Advanced Media and Information. The Home Entertainment division delivers home entertainment content products, such as DVDs and blue-ray discs; and offers related rental and sales information for the content to home video specialty stores and other retailers in the United States and Canada. It leases products from various suppliers, including motion picture studios; and retailers sublease and rent these products to consumers. This division also includes direct revenue sharing (DRS) services, which encompasses the collection, tracking, auditing, and reporting of transaction and revenue data generated by DRS retailers to its respective DRS clients. The AMI division offers Essentials Suite of business information services. This division?s Essentials Suite software and services provide data collection, management, analysis, and reporting functions. It also collects and process data from across 26 countries. This division has operations in California, New York, Florida, the United Kingdom, Australia, Germany, France, Mexico, Argentina, Spain, and Russia. The company was founded in 1977 and is headquartered in Portland, Oregon with additional offices in Los Angeles, New York City, Miami/Ft. Lauderdale, Argentina, Australia, France, Germany, Mexico, Spain, and the United Kingdom.

Advisors' Opinion:

• [By Smith]

  Rentrak Corporation operates in two business divisions: Home Entertainment, and Advanced Media and Information (AMI). Its EPS forecast for the current year is 0.58 and next year is 1.11. According to consensus estimates, its topline is expected to grow 8.18% current year and 16.27% next year. It is trading at a forward P/E of 24.37. Out of six analysts covering the company, three are positive and have buy recommendations and three have hold ratings.

Top 5 Tech Companies To Buy Right Now: Smartcool Systems Inc. (SSC.V)

Smartcool Systems Inc., together with its subsidiaries, engages in acquiring, commercializing, and marketing energy saving technologies for commercial and retail businesses worldwide. The company offers ECO3, a retrofit device that saves energy on compressor operation in air conditioning, refrigeration and heat pump systems; and energy saving modules, which are retrofit products that can save usage on compressor operation in air conditioning and refrigeration systems. Its products are used in various applications, including packaged air conditioning systems, refrigeration units, combined heat pump systems, systems with various load profiles, systems with a night set-back routine, systems with non-demand related interruptions, systems with demand limiting and demand response functionality, refrigeration racks or packs, complex process cooling systems, and single and multi-compressor air conditioning systems. Smartcool Systems Inc. distributes its products directly and throu gh distributors to customers in the food retail, telecommunications, commercial real estate, hospitality sectors, climate controlled storage, and residential sectors. The company was formerly known as Citotech Systems Inc. and changed its name to Smartcool Systems Inc. in July 2004. Smartcool Systems Inc. was founded in 2000 and is headquartered in Vancouver, Canada.

The 'Oracle of Omaha' Tweets; Warren Buffett Joins Twitter

Nati Harnik/AP

Warren Buffett accumulates Twitter followers even faster than he makes money.

The 82-year-old "Oracle of Omaha" joined the service and sent his first tweet on Thursday, picking up more than 45,000 followers in just under 45 minutes.

Buffett said under the handle "@WarrenBuffett":

Warren is in the house.

- Warren Buffett (@WarrenBuffett) May 2, 2013

The handle wasn't officially verified by Twitter, but was confirmed by Fortune magazine, which hosted Buffett for a live webcast Thursday. It was billed as the first social media event for the notoriously technology-averse billionaire.

If followers were dollars, Buffett is having even more success on Twitter than he had with one of his best investments ever, his 2008 stake in Goldman Sachs Group Inc. (GS).

That deal gave him preferred stock that paid dividends at $900 a minute. On Twitter, he has gathered 1,000 followers a minute.

By joining Twitter, the Berkshire Hathaway Inc. (BRK.B) chief executive officer now stands in good mogul company. Other relatively recent converts to the service include News Corp. (NWS) CEO Rupert Murdoch (@RupertMurdoch) and former U.S. President Bill Clinton (@BillClinton).

The Battle for Your TV Heats Up: Apple and Google's Competing Visions

The following video is from this week's installment of The Motley Fool's Weekly Tech Review, in which Alison Southwick sits down with analysts Eric Bleeker and Lyons George to look at the biggest stories driving the tech sector this week.

The future of television was once again in focus this week. First off, there was a report from former Wall Street Journal reporter Jessica Lessin that Apple  (NASDAQ: AAPL  ) is actively pitching a television service that would allow viewers to skip ads but would offer compensation back to television networks for the skipped ads. 

Not to be outdone, reports also surfaced that Google  (NASDAQ: GOOG  ) has been actively pitching an online TV service to media companies. Both of these reports come hot on the heels of Intel's (NASDAQ: INTC  ) own negotiations to offer an Internet-based television service through an internally designed set-top box. 

As Eric and Lyons discuss in the following video, all of these services show one thing in common: no cost savings for consumers. They're all focused around more "premium ideas" for the future of television. Intel has reportedly been offering as much as 75% more than the rates channels currently receive from cable. Likewise, Google's deal isn't focused on cost savings, and Apple's has built-in costs for commercial skipping. Instead, the "selling point" for all these services is on a better experience for the television viewer, whether through ideas like ad-skipping or more intuitive user interfaces. No one has ever accused today's cable programming menus of being works of art, which leaves room for technology companies like Apple and Google to improve the television experience. 

That means consumers hoping to see an "un-bundling" of cable will very likely be disappointed by whatever final deal companies like Intel and Apple can strike. The future of television will likely be a better experience, but with media companies holding firm in negotiations, it won't be cheaper either. To see Eric and Lyons' full thoughts, watch the video. 

Want some great stock ideas for the future of television? With every massive tech company circling the space, there are bound to be huge winners in the coming years.The Motley Fool's new free report "Who Will Own the Future of Television?" details the risks and opportunities in TV, as well as detailing some companies which could see their fortunes rise. Click here to read the full report!

Pandora: Music and money

Pandora Media (P) has a lot of similarities to Netflix — a new company that's attacking an old (but huge) industry with many other players also looking to get into the field.

That's led to a lot of skepticism (and a big short interest, more than 35 million shares at last count, or seven days of volume), but it hasn't hurt the company itself.

In fact, Pandora just reported another great quarter, with management forecasting more good things to come.

Not only did revenue top targets and grow north of 50% again, but all key metrics (listener hours and active users both +35%, paid subscribers +114%, mobile listener hours +47%, mobile revenues +101%) looked great.

Moreover, it's important to note that, right now, Pandora is the largest radio station in the country, accounting for 7.33% of all radio listening in the first quarter, up from 5.86% a year before.

Perhaps most encouraging, as a percent of revenues, Pandora's royalty costs declined nicely, which helps dampen fears that the firm will never exit the red.

All of this isn't to say there aren't risks — Google recently announced a competing service, although it relies far more on paid subscriptions than Pandora.

And there are endless rumors Apple will enter the market as well; either of these two gorillas could become an issue. But to this point, none of the many competitive threats have dented this company one bit.

The stock was crushed from its opening IPO price of $26 back in mid-2011 to its low of $7 at the market low of November last year. But since then, the buyers have been in control.

Most recently, the stock etched a nice, tight eight-week zone before breaking out earlier this month and then gapping up after earnings, reaching as high as $19 ... before pulling back sharply to close down on the day.

That's not ideal action, but given the market environment, it's not a major negative, either. If you're game, you could buy some around here, or on further weakness, with a stop near $14.

Learn more abut this financial newsletter at Mike Cintolo's Cabot Top Ten Trader.

5 of Last Week's Biggest Winners

What's better than momentum? Mo' momentum. Let's take a closer look at five of this past week's biggest scorchers.

Yum! Brands Stock: Still a Buy Near All-Time Highs?

Shares of Yum! Brands (NYSE: YUM  ) bucked the broader market's decline Wednesday after the company stated in a recent SEC filing its May same-store sales fell an estimated 19% year over year for its China Division, including an estimated decline of 25% at KFC, and 12% growth at Yum!'s Pizza Hut locations in the country.

If you're wondering why Yum! stock didn't plummet on the news, note that 19% decline was actually in-line with analysts' estimates, and also represents a notable improvement over April's 29% same-store sales drubbing. In short, the number indicates things may finally be getting better for Yum! in the Middle Kingdom.

Image source: Yum! Brands

So, why is KFC suffering so badly in China in the first place? Remember, as I wrote in April, Yum! stock took a beating after the company faced negative publicity associated with a recent Avian flu outbreak in the region. Of course, that didn't mean their food wasn't safe to eat -- and Yum! Brands did its best to educate consumers to that effect -- but chicken-centric restaurant concepts suffered badly nonetheless.

McDonald's (NYSE: MCD  ) , for example, also took a hit during April, as same-store sales for its Asia/Pacific region fell 2.9% that month, thanks largely to weakness in China. Of course, when we remember McDonald's currently operates less than one-third the total number of locations in China as Yum! Brands, combined with the fact that Mickey D's most significant market here in the U.S. is showing remarkable strength, it should come as no surprise that McDonald's investors weren't nearly as concerned as those with an interest in Yum! stock. 

Even so, I remained convinced at the time that the weakness represented a fantastic opportunity for patient long-term investors to pick up shares of Yum! stock on the pullback.

Sure enough, Yum! stock has returned more than 7% since that time, beating the broader market's advance of just over 1% over the same period. Curiuosly, though, a large chunk of those gains came late last week after UBS analyst David Palmer upgraded Yum! stock from neutral to buy, with an $80 price target, almost prophetically stating he believed Yum!'s China operations would soon begin to show improvement.

What's a hungry investor to do?
With Yum! stock currently trading just 4% below its all-time highs, should investors buy now?

I certainly think so.

After all, Yum! stock is currently trading at a reasonable 22.7 times last year's earnings, less than 19 times forward estimates, which isn't a significant premium to the S&P 500's current P/E ratio around 18.6.

In addition, despite the current weakness in China, the folks at Yum! Brands intend to eventually almost triple their number of restaurants in the region to 14,000, or on par with the number of McDonald's locations here in the United States. The difference with China, however, is that its population currently stands more than four times the estimated 316 million people who reside in the U.S., so you can bet Yum! Brands will still be able to continue growing for the foreseeable future.

What's more, just a couple weeks ago Yum! outlined a perfectly reasonable plan for doubling its Taco Bell sales in the United States to at least $14 billion by 2021 through a combination of new locations, additional menu items, and more dayparts, including a breakfast lineup to be rolled out nationwide by the end of next year.

In the end, as the company continues to expand all over the globe, and when Yum!'s Chinese operations finally return to normal, it's a relatively safe bet investors who are willing to buy now and weather the current storm will be handsomely rewarded over the long run.

More expert advice from The Motley Fool
McDonald's turned in a dismal year in 2012, underperforming the broader market by 25%. Looking ahead, can the Golden Arches reclaim its throne atop the restaurant industry, or will this unsettling trend continue? Our top analyst weighs in on McDonald's future in a recent premium report on the company. Click here now to find out whether a buying opportunity has emerged for this global juggernaut.

Today’s 3 Worst Stocks

Investors weren't blown away with today's data, which is understandable since there wasn't anything too meaningful released. Though the bearish mood can partially be justified by the downtick in June pending home sales, an even bigger decline was expected. The rest of the week looks to be more informative, with a deluge of economic events: A two-day Federal Open Market Committee meeting, weekly jobless claims, the monthly payroll report, and GDP all promise to spice things up. The S&P 500 Index (SNPINDEX: ^GSPC  ) fell 6 points, or 0.4%, ending at 1,685. 

"Alternative beverage" and energy drinks company Monster Beverage (NASDAQ: MNST  ) logged some of the steepest losses in the index today, losing 3.6%. There wasn't much material news today for investors to be fearful of, but the same can't be said for the last several months. One perpetual setback for the company is the legal risk it assumes for selling and marketing its controversial energy drinks. In May, for example, the city of San Francisco sued Monster for marketing its caffeine-heavy drinks to kids without concern for potential health risks. 

Drugmaker Biogen Idec (NASDAQ: BIIB  ) shed 3.3% Monday after Perrigo reached an agreement to buy the Ireland-based Elan. This entitles Perrigo to the royalties Biogen pays to Elan for its 50% ownership stake in multiple sclerosis drug Tysabri. While the success of the drug, which generated $1.6 billion in revenue last year, is obviously welcomed by Biogen investors, the company will start paying a higher royalty once sales cross $2 billion annually, a figure not so far away with a nearly 20% growth rate. 

Lastly, Southwestern Energy (NYSE: SWN  ) , which produces and explores for oil and natural gas in the U.S., slumped 3% today. A decline of some kind was appropriate, considering that the oil and gas sector was the worst-performing sector of the index today. The 3% slip becomes even easier to understand upon noting falling natural gas prices, an unfavorable trend for natural gas explorers like Southwestern. 

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Next Stop for Sirius XM: $4.25?

Price targets keep moving higher for Sirius XM Radio (NASDAQ: SIRI  ) .

Barrington Research is the latest analyst firm to raise its price for the stock that hit a five-year high last week. Barrington's new target is $4.25, up from $3.75. It's hard to keep an outperform rating on a stock when it's already hovering near your near-term goal.

Barrington had bumped its price target on the shares from $3 to $3.75 late last year.

Things have been clearly going well for Sirius XM. It now has more than 25 million subscribers for its satellite radio service. Sirius XM posted strong quarterly results last week, and even naysayers are starting to clear out. Sirius XM now has its fewest number of shares held short since last November.

Sirius XM is also taking advantage of its standing as a media darling -- and what may be the last golden opportunity to borrow at dirt-cheap rates -- by issuing new debt.

The satellite radio monopoly is announcing plans to offer $600 million of Senior Notes that will mature in eight years. Sirius XM will use the proceeds to help redeem debt that is due in two years. It should be able to fare considerably better than the 8.75% rate it had to shell out for those notes.

Sirius XM has been making the most of its newfound creditworthiness and ample generated free cash flow to eat its own cooking. The radio giant has spent $1.3 billion on stock buybacks this year, as Liberty Media (NASDAQ: LMCA  ) takes advantage of its majority stake in Sirius XM to make it a more bite-sized company for it or someone else to ingest.

More analysts should join Barrington above $4 in the coming months. Sirius XM has been surprisingly steady lately, and now that it's clear that satellite radio can capably withstand the onslaught of streaming alternatives and that Liberty Media isn't here to merely flip its stake, it's no longer a dangerous gamble for analysts to be optimistic here.

Sirius XM keeps inching higher, and no one will be surprised if Barrington raises its target yet again in a few months if Sirius XM finds its way above the $4 mark.

Sirius XM hasn't been the only winning investment lately. 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.

 

How Long Will Exelon Earnings Keep Falling?

Exelon (NYSE: EXC  ) will release its quarterly report on Wednesday, and investors are bracing themselves for what could be another disappointing report for the utility. Despite its promise as a major producer of nuclear power, Exelon earnings are likely to decline from their year-ago levels, continuing a troubling trend that has led to past dividend cuts and uncertainty about the company's future.

Historically, Exelon has benefited greatly from its diversified portfolio of electrical generation capacity, with its nuclear power plants helping to give it a major competitive advantage when fossil-fuel prices were high. Lately, though, low natural gas prices have taken away that advantage, creating problems for the utility's business model and depressing the price of the power it generates, hitting profits. Let's take an early look at what's been happening with Exelon over the past quarter and what we're likely to see in its quarterly report.

Stats on Exelon

Analyst EPS Estimate	$0.54
Change From Year-Ago EPS	(11.5%)
Revenue Estimate	$6.15 billion
Change From Year-Ago Revenue	(3.3%)
Earnings Beats in Past Four Quarters	2

Source: Yahoo! Finance.

When will Exelon earnings bottom out?
Analysts have largely kept their views on Exelon earnings stable in recent months, leaving June-quarter estimates unchanged though reining in their full-year 2013 views by $0.02 per share. The stock, though, has continued to pose problems for investors, having fallen 14% since late April.

A large part of that drop came in late May, following very poor results from power-grid operator PJM's auction of electrical capacity governing the 2016-2017 delivery year. With the grid operator managing to secure nearly 170 gigawatts of capacity at a price more than 55% below the previous year's auction, analysts downgraded Exelon and rival FirstEnergy (NYSE: FE  ) because of the adverse long-term implications on electricity demand. New natural-gas-fueled power plants were a major part of the capacity jump, and as gas prices continue to remain relatively low, producers like FirstEnergy and Exelon are facing profit squeezes well into the future.

But Exelon isn't giving up on the future prospects of nuclear energy. It filed renewal applications for two of its nuclear plants in May, seeking to get the multi-year process under way well before the 2024 to 2027 expiration dates of its current approval from the Nuclear Regulatory Commission. Industry rivals aren't committed to nuclear power given the current price environment, as Duke Energy (NYSE: DUK  ) decided to suspend its plans to build new nuclear plants in North Carolina, citing slowing growth in power demand as making the plants unnecessary as Duke turns its attention to modernizing its fossil-fuel plants.

Moreover, Exelon is looking at sources other than nuclear power for electricity generation. In its corporate sustainability report, the company not only touted safety and reliability but also more than 400 megawatts of wind power and 31 megawatts of solar generation it added in the past year.

In the Exelon earnings report, watch for signs of how the utility is handling the prospect of higher interest rates. The full brunt of higher financing costs won't hit the company immediately, but over time, rising interest expense could produce a further headwind to Exelon's profitability going forward.

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

iRobot Files Patent Infringement Lawsuit in Germany

iRobot (NASDAQ: IRBT  ) has filed a lawsuit in a German court alleging that a robotic vacuum cleaning robot marketed and sold in that country infringes on patents for its Roomba, the company announced today.

CEO Colin Angle said in a statement that the company has made "significant investments to protect its intellectual property." Having sold more than 9 million home robots across the world, the company "intends to protect its patent portfolio by the appropriate means available domestically and abroad," he was quoted as saying.

The lawsuit was filed June 14 against five international companies: Pardus GmbH, Emparanza y Galdos Internacional SA, Elektrogerate Solac Vertrieb GmbH, Electrodomesticos Solac SA, and Celaya. The lawsuit focuses on the German robotic vacuum SOLAC ECOGENIC AA3400, alleging it infringes on five European patents for iRobot's robotic cleaning device, the Roomba.

iRobot says it has 200 U.S. patents and 195 non-U.S. patents within its portfolio, including more than 100 in its home business unit, "many of which" cover the Roomba.

link

3 Reasons Wells Fargo Hit a New High This Morning

It's on a roll. Wells Fargo (NYSE: WFC  ) was trading at $43.35 shortly before 11 a.m. EDT. Not only is this a 1.69% gain from Friday's close, but it also sets a new 52-week high for the bank. While Wells has been viewed as the stalwart financial stock for the past few years, there are myriad reasons this bank is headed higher than ever. Below are three of them.

1. Earning well
Of course last Friday's earnings report from Wells Fargo is the top reason that investors are excited to be involved with the bank. Not only did it report both top- and bottom-line figures that beat analyst estimates, the bottom line was yet another record for the bank. Despite this, fellow Fool John Maxfield noted that the Wells earnings report reveals a much more nuanced performance for the bank, with a decrease in loan-loss provisions really propelling higher revenue for the quarter.

Top executives at most of the Big Four banks were outspoken about the effect of rising rates prior to the earnings season open. Wells Fargo CEO John Stumpf and JPMorgan Chase  (NYSE: JPM  ) CEO Jamie Dimon were both quoted saying that new mortgage activity would likely decline because of the higher rates, but that eventually a normalized rate environment would be good for the banks overall. In the meantime, both have steered their respective insitutions though the volatile environment and presented record earnings.

The banks were under close watch this quarter, especially their mortgage-related operations, because of the ongoing Fed speculation and recent rise in interest rates. Wells reported higher rates of both new originations and applications in the second quarter despite the rise in rates, but it was careful to point out that the pipeline of new applications was smaller as June closed out than the bank reported at the end of March.

2. Contrary to popular belief
The most recent data shows a continued drop in application activity for the housing market as a whole, with new applications down 20% in the most recent four-week period. But the drop has really been driven by lower activity in the refinancing segment of the business, which had been booming until the rise in rates occurred. As Maxfield noted in another piece, an unexpected rise in new purchase-money mortgages despite rising interest rates was reported by both Wells and JPMorgan. The force behind the rise may be two-fold, with new buyers looking to lock in rates that are still historically low, and a new push from the banks to capture those opportunities after the refinance boom settled down.

Since we know the Fed will not be slowing its stimulus plan earlier than anticipated, and that it may be a while before the Fed Funds Rate moves higher, this market is rife with conditions that Wells Fargo can capitalize on as the biggest mortgage lender in the land.

3. Three-peat?
Friday was a great day for bank investors, with both Wells Fargo and JPMorgan reporting huge wins. This morning was a repeat of those results as Citigroup (NYSE: C  ) beat analyst expectations thanks to trading gains and lower loan losses. With the momentum favoring the banking sector, it's no surprise that Wells investors would boost the bank today, but there may be more in store later this week as Bank of America (NYSE: BAC  ) is set to report earnings on Wednesday.

If B of A announces similar earnings and mirrors the conditions reported by the other members of the Big Four, there will be a lot of confidence in the banking sector as a whole moving forward. The banks have been able to manage the challenges posed by the current economic conditions. And though no one knows exactly what will happen once the Fed begins tapering, the proof is already in the pudding that management within the Big Four is ready, willing, and able to negotiate through the new environment.

Many investors are terrified about investing in big banking stocks after the crash, but the sector has one notable stand-out. In a sea of mismanaged and dangerous peers, it rises above as "The Only Big Bank Built to Last." You can uncover the top pick that Warren Buffett loves in The Motley Fool's new report. It's free, so click here to access it now.

Could the Surging Housing Market Ultimately Hurt the Average American?

In this segment of The Motley Fool's everything-financials show, Where the Money Is, banking analysts Matt Koppenheffer and David Hanson discuss the continued surge of U.S. home prices and what it means for consumers and investors.

Matt and David talk about homebuilder stocks and the long-term outlook for the future of housing prices.

On the heels of the surging housing market, American markets are reaching new highs, and some investors are skeptical about future growth. They shouldn't be. Many global regions are still stuck in neutral, and their resurgence could result in windfall profits for select companies. A recent Motley Fool report, "3 Strong Buys for a Global Economic Recovery," outlines three companies that could take off when the global economy gains steam. Click here to read the full report!

Want more Foolish insight on the housing market? Click here!

You can follow David and Matt on Twitter.

Top Bank Stocks To Watch For 2014

Eastman Kodak (NASDAQOTH: EKDKQ  ) is selling off another piece of itself, announcing Monday that Brother Industries has agreed to make a "stalking horse" bid for certain assets of its Document Imaging business, which manufactures scanners and provides scanning software and related products to businesses.

Brother --�a leading manufacturer of laser, label, and multifunction printers as well as fax machines and sewing machines -- has offered to buy these assets for $210 million, assuming no better offers are received. In addition, if it wins the bid, Brother would assume $67 million worth of "deferred service revenue liability"�-- essentially debt that raises the value of the transaction.

Kodak will now proceed to seek out higher bids for the assets, through means that may include a bankruptcy court-supervised auction. A final decision on the sale is not expected before June. Kodak CEO Antonio M. Perez was quoted by the company as saying, "A sale to Brother, should they prevail, would represent an excellent outcome for Document Imaging's customers, partners and employees."

Top Bank Stocks To Watch For 2014: Commonwealth Bank of Australia (CBA.AX)

Commonwealth Bank of Australia (the Bank) is engaged in the provision of a range of banking and financial products and services to retail, small business, corporate and institutional clients. The Bank is a provider of integrated financial services, including retail, business and institutional banking, superannuation, life insurance, general insurance, funds management, broking services and finance company activities. Its operating segments include Retail Banking Services, Business and Private Banking, Institutional Banking and Markets, Wealth Management, New Zealand, Bankwest and Other. Its retail banking services include home loans, consumer finance, retail deposits and distribution. Its business and private banking include corporate financial services, regional and agribusiness banking, local business banking, private bank and equities and margin lending. The Bank and its subsidiaries ceased to be a substantial holder in Ten Network Holdings Limited, as of September 12, 2012.

Top Bank Stocks To Watch For 2014: Capital One Financial Corporation(COF)

Capital One Financial Corporation operates as the bank holding company for the Capital One Bank (USA), National Association (COBNA), and Capital One, National Association (CONA), which provide various financial products and services in the United States, the United Kingdom, and Canada. It offers consumer and small business credit card lending, national closed end installment lending, and the international credit card lending services. The company also provides various non-interest bearing and interest-bearing deposits, including demand deposits, money market deposits, negotiable order of withdrawal accounts, savings accounts, certificates of deposit, and other consumer time deposits. Its loan portfolio comprises credit card loans; consumer loans, such as auto, home, and retail banking loans; and commercial loans, including commercial and multifamily real estate, middle market, specialty lending, and small-ticket commercial real estate loans. In addition, the company provid es mortgage banking, treasury management, and depository services. It primarily serves consumers, small businesses, and commercial clients through branches, the Internet, and other distribution channels. The company was founded in 1993 and is headquartered in McLean, Virginia.

Advisors' Opinion:

• [By Matthew Scott]

  While I disapprove of its cheesy advertisements for Capital One (NYSE: COF) and its generally high percentage rate credit cards, Capital One is one financial services company that has a real opportunity for growth coming out of the recession. Capital One stock price increased six times in two years, jumping from $8.63 on March 9, 2009 to $51.96 at the end of the first quarter. Since the bank wasn’t in the “too big to fail” category before the recession, it has been able to expand its number of branches over the last two years when times were tough, growing profits at the same time. As consumers begin using credit cards again as the economy improves, Capital One stands to benefit.

• [By Elissa]

  As one of the most recognizable and reputable financial companies in the United States, Capital One offers a wide range of services to individuals and small businesses. It focuses on the areas of checking, savings, loans and investments. It earns about $2.7 billion every year.

• [By Kathy Kristof]

  There's also opportunity in a big bank that follows a different path than others on this list. Capital One Financial (COF) is one of the nation's biggest credit card issuers and may be best known for its tongue-in-cheek commercials featuring Alec Baldwin and former basketball star Charles Barkley. The bank's earnings were up nearly 12% last year, but earnings per share declined because the number of shares outstanding rose after the completion of two mergers in 2012. The mergers turned Capital One into one of the nation's largest banks by deposits, but its market capitalization of $31.8 billion is only one-fourth that of Citi and BofA.

  Capital One focuses more on consumers and less on businesses than the other banking behemoths. It generates about three-fourths of its income from credit cards and consumer loans. The improving financial health of the consumer sector is driving down Capital One's default rates and is helping to put the company in a position to meet increasingly stringent regulatory capital requirements well ahead of schedule.

  In fact, the bank is so well capitalized that regulators recently gave it permission to hike its quarterly dividend sixfold, to 30 cents per share. At $55.07, the stock yields 2.2% on the new dividend rate and sells for 8.6 times projected 2013 earnings. That's below Capital One's estimated long-term earnings growth rate of 9.3% a year, suggesting that the stock is undervalued. RBC analysts believe the shares will reach $67 over the coming year.

5 Best Blue Chip Stocks To Buy Right Now: New York Community Bancorp Inc (NYCB.N)

New York Community Bancorp, Inc. is a bank holding company and a producer of multi-family mortgage loans in New York City, with an emphasis on apartment buildings that feature below-market rents. It has two bank subsidiaries: New York Community Bank (the Community Bank),New York Commercial Bank (the Commercial Bank. The Community Bank has 241 branches and operates through seven divisional banks. The Commercial Bank has 34 branches in Manhattan and operates 17 of its branches under the divisional name Atlantic Bank.

During the year ended December 31, 2011, all of the one-to-four family loans the Company originated was sold to government-sponsored enterprises (GSEs). In New York, the Company serves its Community Bank customers through Roslyn Savings Bank, with 55 branches on Long Island; Queens County Savings Bank, with 34 branches in the New York City borough of Queens; Richmond County Savings Bank, with 22 branches in the borough of Staten Island, and Roose velt Savings Bank, with eight branches in the borough of Brooklyn. As of December 31, 2011, in the Bronx and neighboring Westchester County, the Company had four branches that operated directly under the name New York Community Bank.

In New Jersey, the Company serves its Community Bank customers through 51 branches that operate under the name Garden State Community Bank. In Florida and Arizona, where it has 25 and 14 branches, respectively, the Company serves its customers through the AmTrust Bank (AmTrust) division of the Community Bank. In Ohio, the Company serves its Community Bank customers through 28 branches of Ohio Savings Bank. Customers of the Community Bank and the Commercial Bank have access to their accounts through 261 of its 285 automatic teller machines (ATMs) locations in five states. The Company also serves its customers through three Websites, which include www.myNYCB.com, www.NewYorkCommercialBank.com and www.NYCBfamily.com.

Lendi ng Activities

The Company�� principal asset! i! s loans. Its loan portfolio consists of three components: covered loans, non-covered loans held for sale and non-covered loans held for investment. As of December 31, 2011, the balance of covered loans was $3.8 billion, of which $3.4 billion were one-to-four family loans. Non-covered loans held for sale consists of the one-to-four family loans that are originated for sale, primarily to GSEs. At December 31, 2011, the held-for-sale loan portfolio totaled $1.0 billion

As of December 31, 2011, loans held for investment consisted of loans that it originates for its own portfolio, and totaled $ 25.5 billion.

In addition to multi-family loans, loans held for investment include commercial real estate loans (CRE); acquisition, development and construction (ADC) loans; commercial and industrial loans (C&I), and one-to-four family loans. As of December 31, 2011, its multi-family loans represented $17.4 billion, or 68.3%, of total loans held for investment, and repr esented $5.8 billion, or 64.1%, of the total loans that it originated for investment. The multi-family loans it originates are typically secured by non-luxury apartment buildings in New York City. It also makes multi-family loans to property owners who are seeking to expand their real estate holdings by purchasing additional properties.

As of December 31, 2011, CRE loans represented $6.9 billion, or 26.9%, of total held for investment; ADC loans represented $445.7 million, or 1.7%, of total loans held for investment. Its ADC loan portfolio consists of loans that were originated for land acquisition, development, and construction of multi-family and residential tract projects in New York City and Long Island.

C&I loans represented $600.0 million, or 2.4%, of total held for investment. It also offers a range of loans to small and mid-size businesses for working capital (including inventory and receivables), business expansion, and the purchase of equipment a nd machinery. Non-covered one-to-four family loans tot! aled $! 1! 27.4 mil! lion at December 31, 2011.

Investment Activities

The Company�� securities portfolio primarily consists of mortgage-related securities, and debt and equity (other) securities. Its investments include GSE certificates, GSE collateralized mortgage obligations (CMOs) and GSE debentures. The Community Bank and the Commercial Bank are members of the Federal Home Loan Bank of New York (FHLB-NY), one of 12 regional Federal Home Loan Banks (FHLBs) consisting of the FHLB system. As of December 31, 2011, the Company�� securities represented $4.5 billion, or 10.8%, of total assets. As of December 31, 2011, 93.7% of its securities portfolio consisted of GSE obligations; held-to-maturity securities represented $3.8 billion, or 84.0%, of total securities, and its investment in bank-owned life insurance (BOLI) was $769.0 million.

Source of Funds

The Company has four primary funding sources. These include the deposits that it added thr ough its acquisitions or gathered through its branch network, and brokered deposits; wholesale borrowings, primarily in the form of FHLB advances and repurchase agreements with the FHLB and various brokerage firms; cash flows produced by the repayment and sale of loans, and cash flows produced by securities repayments and sales. As of December 31, 2011, deposits totaled $ 22.3 billion, which included certificates of deposit (CDs) of $7.4 billion; negotiable order withdrawal (NOW) and money market accounts of $8.8 billion; savings accounts of $ 4.0 billion, and non-interest-bearing accounts of $2.2 billion. As of December 31, 2011, the Company�� borrowed funds totaled $14.0 billion, loan repayments and sales generated cash flows of $15.0 billion, and securities sales and repayments generated cash flows of $4.2 billion.

Subsidiary Activities

As of December 31, 2011, Community Bank had 34 subsidiary corporations. Of these, 22 are direct subsidiaries of the Community Bank and 12 are subsidiaries of ! Community! B! ank-owned! entities. The 22 direct subsidiaries of the Community Bank include DHB Real Estate, LLC, Mt. Sinai Ventures, LLC, NYCB Community Development Corp., NYCB Mortgage Company, LLC, Eagle Rock Investment Corp., Pacific Urban Renewal, Inc., Somerset Manor Holding Corp., Synergy Capital Investments, Inc., 1400 Corp., BSR 1400 Corp., Bellingham Corp., Blizzard Realty Corp., CFS Investments, Inc., Main Omni Realty Corp., NYB Realty Holding Company, LLC, O.B. Ventures, LLC, RCBK Mortgage Corp., RCSB Corporation, RSB Agency, Inc., Richmond Enterprises, Inc. and Roslyn National Mortgage Corporation.

The 12 subsidiaries of Community Bank-owned entities include Bronx Realty Funding Company, LLC, Columbia Preferred Capital Corporation, Ferry Development Holding Company, Peter B. Cannell & Co., Inc., Roslyn Real Estate Asset Corp., Walnut Realty Funding Company, LLC, Woodhaven Investments Inc, Your New REO, LLC, Ironbound Investment Company, Inc.,The Hamlet at Olde Oyster Bay, LLC, The Hamlet at Willow Creek, LLC and Richmond County Capital Corporation.

The two direct subsidiaries of the Commercial Bank include Beta Investments, Inc., and Gramercy Leasing Services, Inc. The two subsidiaries of Commercial Bank-owned entities include Omega Commercial Mortgage Corp. and Long Island Commercial Capital Corp.

Top Bank Stocks To Watch For 2014: BB&T Corp (BBT)

BB&T Corporation (BB&T) is a financial holding company. BB&T conducts its business operations primarily through its commercial bank subsidiary, Branch Banking and Trust Company (Branch Bank), which has offices in North Carolina, Virginia, Florida, Georgia, Maryland, South Carolina, Alabama, West Virginia, Kentucky, Tennessee, Texas, Washington D.C and Indiana. In addition, BB&T�� operations consist of a federally chartered thrift institution, BB&T Financial, FSB (BB&T FSB), and a number of nonbank subsidiaries, which offer financial services products. BB&T�� operations are divided into six business segments: Community Banking, Residential Mortgage Banking, Dealer Financial Services, Specialized Lending, Insurance Services, and Financial Services. Branch Bank provides a range of banking and trust services for retail and commercial clients in its geographic markets, including small and mid-size businesses, public agencies, local Governments and individuals, through 1,779 offices as of December 31, 2011. During the year ended December 31, 2011, BB&T announced the acquisitions of Liberty Benefit Insurance Services, Atlantic Risk Management Corporation and the Precept Group. In April 2012, it acquired the life and property and casualty insurance operating divisions of Roseland, New Jersey - based Crump Group Inc. On July 31, 2012, it acquired BankAtlantic.

As of December 31, 2011, the principal operating subsidiaries of BB&T included Branch Banking and Trust Company, Winston-Salem, North Carolina; BB&T Financial, FSB, Columbus, Georgia; Scott & Stringfellow, LLC, Richmond, Virginia; Clearview Correspondent Services, LLC, Richmond, Virginia; Regional Acceptance Corporation, Greenville, North Carolina; American Coastal Insurance Company, Davie, Florida, and Sterling Capital Management, LLC, Charlotte, North Carolina. Branch Bank�� principal operating subsidiaries include BB&T Equipment Finance Corporation, BB&T Investment Services, Inc., BB&T Insurance Services, Inc., Stanley, Hunt, DuPree! & Rhine (a division of Branch Bank), Prime Rate Premium Finance Corporation, Inc., Grandbridge Real Estate Capital, LLC, Lendmark Financial Services, Inc., CRC Insurance Services, Inc. and McGriff, Seibels & Williams, Inc.

Community Banking

BB&T�� Community Banking serves individual and business clients by offering a range of loan and deposit products and other financial services. As of December 31, 2011, Community Banking had a network of 1,779 banking.

Residential Mortgage Banking

Residential Mortgage Banking segment retains and services mortgage loans originated by Community Banking, as well as those purchased from various correspondent originators. Mortgage loan products include fixed and adjustable rate Government and conventional loans for the purpose of constructing, purchasing or refinancing residential properties. Substantially all of the properties are owner occupied. BB&T retains the servicing rights to all loans sold. Residential Mortgage Banking earns interest on loans held in the warehouse and portfolio, fee income from the origination and servicing of mortgage loans and recognizes gains or losses from the sale of mortgage loans. BB&T�� mortgage originations totaled $23.7 billion in 2011. BB&T�� residential mortgage servicing portfolio, which includes both retained loans and loans serviced for third parties, totaled $91.6 billion in 2011.

Dealer Financial Services

Dealer Financial Services originates loans to consumers on a prime and nonprime basis for the purchase of automobiles. Such loans are originated on an indirect basis through approved franchised and independent automobile dealers throughout the BB&T market area and nationally through Regional Acceptance Corporation. This segment also originates loans for the purchase of boats and recreational vehicles originated through dealers in BB&T�� market area. In addition, financing and servicing to dealers for their inventories is provided through a ! joint rel! ationship between Dealer Financial Services and Community Banking.

Specialized Lending

BB&T�� Specialized Lending consists of eight business units that provide specialty finance products to consumers and businesses. The internal business units include Commercial Finance that contains commercial finance and mortgage warehouse lending; and, Governmental Finance that is responsible for tax-exempt Government finance. Operating subsidiaries include BB&T Equipment Finance which provides equipment leasing within BB&T�� banking footprint; Sheffield Financial, a division of FSB Financial, a dealer-based financer of equipment for both small businesses and consumers; Lendmark Financial Services, a direct consumer finance lending company; Prime Rate Premium Finance Corporation, which includes AFCO and CAFO, insurance premium finance business units that provide funding to businesses in the United States and Canada and to consumers in certain markets within BB&T�� banking footprint, and Grandbridge Real Estate Capital, a commercial mortgage banking lender providing loans on a national basis.

Insurance Services

BB&T Insurance Services provides property and casualty, life and health insurance to businesses and individuals. It also provides small business and corporate products, such as workers compensation and professional liability, as well as surety coverage and title insurance. In addition, Insurance Services also underwrites a limited amount of property and casualty coverage.

Financial Services

Financial Services provides personal trust administration, estate planning, investment counseling, wealth management, asset management, employee benefits services, corporate banking and corporate trust services to individuals, corporations, institutions, foundations and Government entities. Financial Services also offers clients investment alternatives, including discount brokerage services, equities, fixed-rate and variable-rate annuiti! es, mutua! l funds and governmental and municipal bonds through BB&T Investment Services, Inc., a subsidiary of Branch Bank. Financial Services includes Scott & Stringfellow, LLC, a brokerage and investment banking firm. Scott & Stringfellow provides services in retail brokerage, equity and debt underwriting, investment advice, corporate finance and equity research and facilitates the origination, trading and distribution of fixed-income securities and equity products in both the public and private capital markets. Scott & Stringfellow also has a public finance department that provides investment banking services, financial advisory services and municipal bond financing. Scott & Stringfellow�� investment banking and corporate and public finance areas conduct business as BB&T Capital Markets. This segment includes BB&T Capital Partners that is a group of BB&T-sponsored private equity and mezzanine investment funds that invest in privately owned middle-market operating companies. Financial Services also includes the Corporate Banking Division that originates and services corporate relationships, syndicated lending relationships and client derivatives.

Advisors' Opinion:

• [By Michael Brush]

   BB&T (BBT) has a dividend yield of 2.5%

  The regional bank has 1,800 branches in the Southeast and Washington, D.C. Even during the worst of the credit meltdown, BB&T was profitable. The company used its financial clout to attract customers from competitors and purchase the assets of a failed bank in Florida from regulators.

  As the economy improves and loan business grows, Wordell believes the bank could see annual earnings as high as $3.50 a share, from $1.21 recently. Wordell expects the bank to raise dividends as earnings and loan quality improves.

Top Bank Stocks To Watch For 2014: Credicorp Ltd (BAP)

Credicorp Ltd. (Credicorp), incorporated on October 20, 1995, is a financial services holding company. The Company is organized in four operating segments: Banking, Insurance, Pension funds and Brokerage and other. Credicorp is engaged principally in banking (including commercial and investment banking), insurance (including commercial property, transportation and marine hull, automobile, life, health and underwriting insurance), pension funds (including private pension fund management services), and brokerage and other (including the structuring and placement of primary market securities issues and the execution and trading of secondary market transactions.). Its four operating subsidiaries are : Banco de Credito del Peru (BCP), Atlantic Security Bank (ASB), El Pacifico-Peruano Suiza Compania de Seguros y Reaseguros, and Prima AFP.

Banking segment

Banking includes handling loans, credit facilities, deposits and current accounts, and providing investment banking services, including corporate finance, both for corporate and institutional customers. Banking also includes handling deposits consumer loans and credit cards facilities for individual customers. The Company conducts banking activities in Bolivia through BCP Bolivia, a service commercial bank. Its banking business is organized into wholesale banking activities, which are carried out by BCP�� wholesale banking group (which includes the corporate banking operations of ASB), and retail banking activities, which are carried out by BCP's retail banking group. Its deposit-taking operations are managed by BCP'�� retail banking group and and ASB's private banking group.

Insurance

Credicorp�� insurance segment includes commercial property, transportation and marine hull, automobile, life, health and pension fund underwriting insurance. Private hospital services are also included under this operating segment. The Company conducts its insurance operations Grupo Pacifico and its subsidiaries, whic! h provide a broad range of insurance products. Grupo Pacifico property and casualty insurance through Pacifico Seguros, life and pension insurance through Pacifico Vida, and health care insurance through Pacificosalud EPS.. Grupo Pacifico sells its products both directly and through independent brokers and agents.

Pension funds

Credicorp�� pension funds segment provides private pension fund management services to customers. Credicorp conducts all of its pension fund activities through its private pension fund administrator Prima AFP. Credicorp through its subsidiary Prima AFP, focuses mainly on obtaining new affiliates, by providing permanent information and diverse channels of communication.

Brokerage and other

The Company�� brokerage and others segment includes the structuring and placement of primary market issues and the execution and trading of secondary market transactions. This segment also includes offers of local securitization structuring to corporate entities, management of mutual funds and other services. The majority of its trading and brokerage activities are conducted through BCP, ASB and Credicorp Securities Inc. Its asset management business is carried out by BCP in Peru, through its subsidiary Credifondo, and by ASB. It offers Brokerage and other services through BCP and ASB. BCP offers clients a range of such products and services, such as brokerage, mutual funds and custody services through its branch network in Lima and throughout the rest of Peru. In addition, ASB also offers brokerage and other services.

The Company competes with BCP, BBVA Banco Continental, Scotiabank Peru, Interbank and Banco Interamericano de Finanzas.

Advisors' Opinion:

• [By Louis Navellier]

  Credicorp (NYSE:BAP) is involved with banking, pension funds, insurance and brokerage services. BAP stock has outpaced the broader markets with a gain of 21% in the last year. Credicorp stock gets a “B” grade for sales growth, a “B” grade for earnings momentum, a “B” grade for the magnitude in which earnings projections have increased over the past months, an “A” grade for cash flow, and an “A” grade for return on equity. 

Top Bank Stocks To Watch For 2014: First Commonwealth Financial Corporation(FCF)

First Commonwealth Financial Corporation operates as the holding company for First Commonwealth Bank that provides consumer and commercial banking services to individuals and small and mid-sized businesses in central and western Pennsylvania. The company offers personal checking accounts, interest-earning checking accounts, savings accounts, health savings accounts, insured money market accounts, debit cards, investment certificates, fixed and variable rate certificates of deposit, and IRA accounts. It also provides secured and unsecured installment loans, construction and mortgage loans, safe deposit facilities, credit lines with overdraft checking protection, and student loans, as well as Internet and telephone banking, and automated teller machine services. In addition, the company offers commercial banking services, including commercial lending, small and high-volume business checking accounts, on-line account management services, ACH origination, payroll direct deposi t, commercial cash management services, and repurchase agreements. Further, it provides various trust and asset management services, as well as a complement of auto, home, business, and term life insurance. Additionally, the company offers annuities, mutual funds, stock, and bond brokerage services through an arrangement with a broker-dealer and insurance brokers. It operates 115 community banking offices in western Pennsylvania and 2 loan production offices in downtown Pittsburgh and State College, Pennsylvania. The company was founded in 1982 and is headquartered in Indiana, Pennsylvania.

Advisors' Opinion:

• [By Philip]

  Shares First Commonwealth Financial Corp.(FCF) of Indiana, Pa., closed at $4.75 Friday, declining 31% year-to-date. Based on a consensus price target of $6.46, the shares have 36% upside potential.

  Based on a quarterly payout of three cents, the shares have a dividend yield of 2.53%.

  First Commonwealth had $5.7 billion in total assets as of Sept. 30, operating 112 First Commonwealth Bank offices in 15 counties in western and central Pennsylvania.

  The company reported third-quarter earnings of $8.3 million, or 8 cents a share, increasing from $7.4 million, or 7 cents a share, during the second quarter, but declining from $10.6 million, or 11 cents a share, in the third quarter of 2010.

  The year-over-year earnings decline reflected an 8% decline in net interest income to a tax-adjusted $48.8 million in the third quarter, as the company saw an 8% decline in its loan portfolio, "as the result of more disciplined underwriting guidelines concerning geography and size for commercial loans, the managing down of large credit relationships over $15 million," and weak loan demand.

  The net interest margin declined to 3.81%, increasing from 3.76% the previous quarter, but declining from 3.90% a year earlier.

  Earnings were also affected by a $7.0 million third-quarter provision for loan losses, which was down from $9.1 million the previous quarter, but up from $4.5 million a year earlier.

  First Commonwealth's nonperforming assets ratio was 3.45%, increasing from 3.22% the previous quarter and 2.70% a year earlier, with one commercial credit relationship in Pennsylvania representing $32.8 million, or 17% of the company's $195.2 million in nonperforming assets.

  The third-quarter net charge-off ratio was 1.00% and reserves covered 1.81% of total loans as of September 30.

  Following First Commonwealth's earnings announcement, Sterne Agee analyst Mike Shafir reiterated his Buy rating on the shares, with a price target of $6.50, and said that "W! hile NPAs rose during the quarter, the company exhibited positive trends with a higher net interest margin, lower expenses, and a reduction in the pace of loan decline."

  The shares trade for 11.3 times the consensus 2012 EPS estimate of 42 cents, and 0.8 times their Sept. 30 tangible book value of $5.77, according to SNL Financial.

  Six out of nine analysts covering First Commonwealth rate the shares a buy, while the remaining analysts all have neutral ratings