Make Your Investment Charge With Visa

For sure, most investors have a Visa (NYSE:V) card, the ubiquitous credit card used in almost every corner of the planet. So why shouldn�t most investors also own shares of Visa, the world�s largest retail electronics payment network?

It�s true that ordinarily, it isn�t a wise strategy to buy a stock that�s been rising steadily every year. And that�s what Visa has been doing, really. In March 2008, when Visa went public, the stock started at $44 a share, raising $17.9 billion — which at that point was the largest initial public offering in the U.S. By the end of 2009, the stock hit nearly $90, and V shares closed at $112.42 on Thursday.

But Visa is not an ordinary company. Its growth prospects remain huge, as consumers� demand for more convenient payments systems continue to rise worldwide. And analysts view Visa as both a financial company and a technology enterprise that uses high-tech skills to advance and expand its business model.

Visa continued to rush up in its stock price and earnings despite the huge pressure on financial stocks in the wake of the financial mess in Europe, the fragile U.S. economic recovery and the big issues that confront major banks.

So Wall Street remains optimistic, and analysts continue to jack up their stock price targets and earnings estimates.

David Togut, analyst at Evercore Partners, raised his price target to $130 a share from $109 in January, way before Visa’s Wednesday report of better-than-expected results for the fourth quarter, with revenues rising 14% and earnings growing by 21%. Togut maintains his overweight recommendation on the stock, based on a projected price-earnings multiple of 18.5, which is below Visa�s historical average forward P/E ratio. He probably will again increase his price target and his earnings estimates for 2012 and 2013.

�Fiscal 2012 ought to be another stellar year for Visa,� says analyst Sharif Abdou, who follows the company at Value Line, an independent investment research firm. Despite its recent rally, the stock has substantial long-term price appreciation potential, the analyst says.

The company�s credit and debit cards are among the most widely used in the world, and its VisaPLUS is one of the largest global ATM networks that offer cash access in local currency in more than 200 countries. Helping fuel Visa�s growth is its international business, which has been rapidly expanding. The use of Visa�s credit-card payments in the U.S. rose by some 11% in 2011, while those in Latin America grew by 19%. And in Central Europe, the Middle East, and Africa, credit-card usage jumped 35%, according to Value Line.

Moreover, Visa�s debit cards are among its fast-growing big sources of growth, as more people increasingly use them to reduce spending and curb debt levels during difficult economic times. Debit transactions accounted for 58% of the total in fiscal 2011, compared with less than 50% in recent years, Abdou says.

�Visa�s time-tested business model, rock-solid finances with no debt on the balance sheet, and ubiquitous brand name should remain a formidable combination for the foreseeable future,� Abdou says.

Visa and MasterCard (NYSE:MA), the two largest credit-card companies outperformed the market in 2011, with shares of Visa rising 44% and MasterCard advancing 66%, vs. the S&P 500�s near-flat performance. Reiterating his rating on both as outperform, Glenn Greene of Oppenheimer says �fundamental trends remain solid� for both companies.

Of the two stocks, Visa has the potential for more rapid appreciation momentum, in part because of its lower valuation. MasterCard closed Thursday at $396.40 a share, way up from its 52-week low of $240.36.

A big boost to credit-card payments is the secular trend toward non-cash payments, and Visa�s dominance in debit-card payments business should help strongly in bolstering its revenue and earnings, analysts say. More and more, debit cards are replacing cash and are increasingly being used for day-to-day purchases.

�That�s a positive,� notes Scott Kessler, analyst at S&P Capital IQ. �We are optimistic about growth initiatives that include expansion in prepaid cards, mobile payments, money transfer, and e-commerce.”

So for investors seeking to participate in the growth and profitability of credit and debit cards, the stellar performance of Visa in practically all aspects of the business should be particularly appealing.

And if you own a Visa card, you probably will understand the value of the brand.

As of this writing, Gene Marcial did not hold a position in any of the aforementioned securities.

Does InterOil Miss the Grade?

Margins matter. The more InterOil (NYSE: IOC  ) 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 InterOil's competitive position could be.

Here's the current margin snapshot for InterOil over the trailing 12 months: Gross margin is 11.1%, while operating margin is 1.3% and net margin is -3.1%.

Unfortunately, a look at the most recent numbers doesn't tell us much about where InterOil 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 InterOil 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 13.1% and averaged 8.2%. Operating margin peaked at 5.0% and averaged -0.2%. Net margin peaked at 0.9% and averaged -3.9%.
• TTM gross margin is 11.1%, 290 basis points better than the five-year average. TTM operating margin is 1.3%, 150 basis points better than the five-year average. TTM net margin is -3.1%, 80 basis points better than the five-year average.

With recent TTM operating margins exceeding historical averages, but net margins still negative, InterOil still has some work to do.

• Add InterOil to My Watchlist.

Warren Buffett Is Not the Only Winner Here

U.S. Gulf Coast refiners, in addition to Canadian oil sands producers, stand to benefit if the southern portion of TransCanada's (NYSE: TRP  ) Keystone XL pipeline gains approval. While the debate continues, railway companies continue to profit.

In 2009�Berkshire Hathaway� (NYSE: BRK-B  ) purchased the remaining outstanding shares of Burlington Northern Sante Fe for $26 billion (total purchase price of $44 billion), adding one of the United States' largest railroad companies to its portfolio. BNSF continues to take advantage of crude pipeline bottlenecks by moving oil from wellheads to refineries, and this trend will continue with the company expecting a 40% boost in crude shipments in 2013.�

The growth has been�phenomenal with crude-by-rail shipments soaring over 250% in 2012, moving close to 170 million barrels of oil. Berkshire's BNSF is not the only company in on the action. Check out the video below for other players profiting from the sharp rise in rail transportation.��

If you're on the lookout for some currently intriguing energy plays, check out The Motley Fool's "3 Stocks for $100 Oil." For FREE access to this special report, simply click here now.

Is It Time to Throw in the Towel on SandRidge Energy?

SandRidge Energy (NYSE: SD  ) has been a dismal performer not just this year, but ever since the company's IPO in 2007. In fact, since it went public, it has been the worst-performing energy stock traded on U.S. markets. Shares are down around 80% from its IPO and more than 90% from its June 2008 peak.

On top of this appallingly poor stock performance, two of the company's biggest shareholders are calling for major changes within the company, including firing the company's CEO. How serious are these allegations?

SandRidge under investor scrutiny
Earlier this month, New York-based hedge fund TPG-Axon Capital Management, which owns more than 6% of SandRidge, wrote an incendiary letter to the company's management. In it, the hedge fund demanded major changes including the ouster of founder and CEO Tom Ward. It also alleged frivolous spending and an incoherent business strategy, among other things.

According to TPG-Axon's CEO, Dinakar Singh, SandRidge should be trading between $12-$14 a share, more than twice its current share price. It's certainly baffling that SandRidge shares have remained depressed for so long and trade at one of the biggest discounts to net asset value of any U.S. energy producer. What's the reason for this massive disconnection?

According to Singh, it's a combination of three factors. He argues that the company's strategy has been incoherent and unpredictable, its capital spending program wrought with serious excesses, and its corporate governance "appalling," robbing shareholders of the massive potential value the company holds.

Two months ago, I wrote an article that addressed many of the very factors that TPG-Axon has called attention to. I highlighted the company's seemingly unpredictable strategy, what appeared to be outrageous executive compensation, and Ward's involvement with Chesapeake Energy (NYSE: CHK  ) CEO Aubrey McClendon. It looks like these concerns were justified.

Management's missteps
In light of Singh's letter, restoring management's credibility will be a necessary step for the company's success. As he points out, SandRidge has consistently exceeded its capital budget, often by a wide margin, lending credence to claims that management has displayed fiscal recklessness. In addition, the company's extensive use of leverage has left it vulnerable to a bevy of macroeconomic and market risks.

To raise funds in recent years, the company has relied on joint ventures and trust vehicles, including the SandRidge Mississippian Trust I (NYSE: SDT  ) and SandRidge Mississippian Trust II (NYSE: SDR  ) . But it has also resorted to less sanguine measures, such as dilutive equity issuances, as well as issuances of high-cost debt.

Management's various shortcomings have led to a high cost of capital for the company, which has been bad news for shareholders. As Singh notes, an untrustworthy management leads to a depressed stock price and a higher cost of capital, which causes significant shareholder dilution over a period of time.

The board's shortcomings
This raises an important question: How did the company's board of directors let all this go on? The overarching aim of a company's board should be to protect the interests of shareholders by ensuring that they are aligned with those of the management.

In SandRidge's case, it increasingly looks like the board didn't do its job. Worse yet, it appears that the board allowed management to continue with poor practices at the expense of shareholders.

"Rather than ensuring that management interests are sensibly aligned with those of shareholders, the Board has siphoned value from shareholders and toward Mr. Ward," wrote Singh. Regarding SandRidge's compensation policies, he added, "Executive compensation policies have been nothing short of egregious, and the Board has sanctioned self-dealing that has transferred significant value to Mr. Ward, at the expense of shareholders."

These are serious allegations, but they appear to be justified. Since the company went public, a large chunk of its cash flow and earnings has gone toward handsomely compensating executives. Yet at the same time, its stock has seen a precipitous decline, while the company's book value per share and its net asset value have declined markedly. As such, shareholder angst is more than justified.

But it looks like change may be around the corner.

Activists as voices for change
These developments at SandRidge underscore a trend of growing disagreements between management teams and large shareholders. Activist investors are gaining clout as voices for change that can successfully convince management to reassess its strategies. In addition, activists are now making bigger bets on companies they believe are ripe for change.

According to a survey of both activist investors and company managements by Schulte Roth & Zabel, a law firm, 60% of activists said they would have no problem allocating 10%-15% of their available capital to a single position. That's a sharp rise since 2008, when just 6% said they would be comfortable with 10%-15% of their money tied up in one company.

To be sure, SandRidge management's credibility has certainly been damaged, and some reshuffling will likely be necessary. But if new, independent board members can help provide much-needed discipline and keep a close tab on management, then I think SandRidge should be on solid footing.

While the new shareholder rights plan, colloquially known as a "poison pill," indicates that management will do everything in its power to avoid a hostile takeover, greater shareholder activism may be the necessary catalyst for change.

If you are unsure about SandRidge's future, and are looking to find out more about its strengths and weaknesses, you should view this brand new premium report detailing SandRidge's game plan and what to expect from the company going forward. To get started --click here!

China, On The Road To High Income Country Status

China is expected to join the club of high income nations like Japan within the next 15 years. But to get there successfully, a number of things have to happen first with the government and the economy it manages.

China is currently turning itself inside out. It�s an arduous process of switching from an export driven economy of low wages, to a middle class society driven by local consumer spending power. That shift is still in its early stages. But as it unfolds, China has already become a middle income nation, according to World Bank standards. This is most evident along the highly populated eastern seaboard cities, from Guangzhou to Beijing, where incomes are well over the $12,000 a year needed to be classified by the World Bank as middle income. In those cities, incomes are well over $25,000.

The long-awaited structural shift in China is now under way and may have been underappreciated, says Yiping Huang, an economist for Barclays Capital in Hong Kong. �The Chinese economy is breaking away from its past imbalanced, uncoordinated, inefficient and unsustainable growth model,� Yiping said in his report China: Beyond the Miracle, published last week in its final nine-part installment.

One key trigger of this change is rapid wage growth stemming from the emerging labor shortage. This not only redistributes income from corporations back to households but also improves equality among households in a society that is seeing inequality run amok.

Although rebalancing has so far been driven mainly by changes in Western markets, economic reforms will be critical for furthering change in China, says Yiping. These reforms include removing remaining cost distortions, liberalizing the financial sector and improving China�s very weak safety net.

China is aging much like the United States, but the vast majority of Chinese do not have any sort of livable government pension to count on, let alone health care.

Meanwhile, privatization of government owned entities is probably not feasible in the near term, but the government likely will move steadily toward the creation of a level-playing field by removing input cost subsidies and reducing the monopoly power, allowing for newcomers in the market that can address these gaps.

While it is unlikely that China will adopt Western-style democracy any time soon, Yiping says to expect China�s leaders to implement some political reforms in the years ahead. Such steps may be necessary to ease social economic tensions and facilitate continuous economic growth and could include the gradual extension of direct election to higher levels of government, having more candidates than posts in high-level internal elections, increased tolerance of social media, stepped-up efforts against corruption, and improvements in the transparency of budgetary and other decision processes.

�We don�t think Chinese political institutions have exhausted their potential to foster growth,� says Yiping Huang. �We think political reforms are likely in the coming years.�

Then there is the increased investment in science and technology in China, which has occurred earlier than international experience would suggest. This is probably because of China�s high literacy rate, large market size and proximity to dynamic economies. In fact, China is already among the world�s leaders in research and development spending despite its middle-income status, Yiping notes, despite the fact that a lot of its patents leave little to meet the eye. China is notorious for copying old technology, making minor changes, and calling it a new patent.

However, private enterprises are playing an increasingly important role in China�s R&D activities now than ever before. As China invests more in new products and becomes more entrepreneurial, hitting the high road to high income status becomes more plausible.

Currently, China�s GDP per capita is $6,000. The World Bank�s criterion for high income is per capita above $12,000. China needs to double its real per capita income to get there.

�We think this could happen before 2020 if we assume growth potential at 7% to 8% and modest currency appreciation of, say, 3% a year,� says Yiping.

By then, the Chinese economy would be at least as large as that of the United States. And per capita income will be more like $22,000, putting it on par with Korea�s current income level.

The Club of High Income Nations

Andorra                            Italy
Aruba                                Japan
Australia                         Korea
Austria                            Kuwait
Bahamas                          Latvia
Bahrain                            Liechtenstein
Barbados                        Luxembourg
Belgium                           Macao, China
Bermuda                          Malta
Brunei Darussalam      Monaco
Canada                             Netherlands
Cayman Islands            Netherlands Antilles
Channel Islands            New Caledonia
Croatia                            New Zealand
Cyprus                            Northern Mariana Islands
Czech Republic            Norway
Denmark                        Oman
Equatorial Guinea      Poland
Estonia                           Portugal
Faeroe Islands             Puerto Rico
Finland                          Qatar
France                           San Marino
French Polynesia      Saudi Arabia
Germany                      Singapore
Gibraltar                       Slovak Republic
Greece                          Slovenia
Greenland                   Spain
Guam                             Sweden
Hong Kong                 Switzerland
Hungary                      Trinidad and Tobago
Iceland                        Turks and Caicos Islands
Ireland                         United Arab Emirates
Isle of Man                  United Kingdom
Israel                            United States
Virgin Islands

The New Advisor-Client Paradigm

Much has been written about the need for advisors to regain their clients’ trust, and to engage their clients in a more meaningful and deeper way through the application of behavioral finance principles, in order to strengthen their relationship.

But in this new paradigm, what about advisors themselves? How do they really fit in?

According to Joseph Jordan, senior vice president at MetLife, advisors, too, took a big hit during the financial crisis, and many lost their self-confidence and motivation. Just like their clients, they also need to regain trust, but they need to regain trust in themselves and in their profession, and in the new way of approaching their client relationships, he says.

“After the crisis, many people in this profession have faced a great deal of rejection and this has resulted in low self-esteem,” Jordan says. “The only way to recover from this is to focus on the positive things that advisors do in their profession. Most advisors still get talked to in terms of compensation and compliance, but they need to know that it’s much more than that. They need to really understand the positive things that they do in their profession and to know that it’s not all about compliance, it’s about making a connection with someone.”

Jordan believes that the end goal of using behavioral finance principles to better the financial advisory profession applies to both clients and practitioners.

“We have to create a behavioral environment, a culture that enables people in this profession to think beyond themselves and to make those connections with their clients,” he says. “This in turn will, of its own accord, address the compliance issues that advisors are always hearing about.”

According to Jordan, much of the debate surrounding behavioral finance and how it applies to the financial advisory profession has been centered on consumer advocacy. But financial professionals need both inspiration and a reaffirmation of their faith, he says, to make behavioral finance really valid. To this end, Jordan travels around the globe to speak to financial advisors in order to motivate them and get them to realize the importance of their role. He believes that firms need to do this on a regular basis in order to get advisors to “buy into” their part of the behavioral finance paradigm, and so they understand that their greatest asset is the bond they will form with their clients.

That bond is based on the understanding that clients take action based on emotions, feeling and experience, Jordan says, and that people want to buy a thinking process, not just a product. Advisors need to be part of that process.

To this end, one of the most important things financial advisory firms need to do is to develop tools or methods that provide simple guidelines--and not necessarily the ultimate answers--for their clients, because “the idea is to drive awareness about the retirement income risks and guide clients to their own decisions,” Jordan says.

In emphasizing the importance of behavioral finance as part of a firm’s modus operandi, it is also key that practices make this a clear-cut part of their process and vision. According to Natalie Doss, research manager for consulting firm Quantuvis Consulting, advisory firms that make it a priority to define their goals and vision have a greater chance achieving professional success.

“If a firm truly believes that sitting with clients and having deep conversations with them to find out how they feel, think and act is important, then all advisors need to be on the same page,” Doss says. “If you have advisors who are not on the same page, you are potentially losing leverage as a firm.”

Quantuvis has just come out with a new study sponsored by Genworth Financial that is part of a series on best practices in the industry and looks at the importance of human capital, or the way financial advisory firms hire, manage, compensate and advance employees. Advisory firms that make an effort to invest in human capital, the study determined, are the ones that do better from an overall business perspective, and the top 25% of advisors in the study, as measured by owner income, outperformed their peers in all financial categories and also demonstrated superior performance across metrics related to their firm’s human assets.  

“Firms that focus on human capital can leverage their advisors and enable them to focus more on human relationships,” Doss says. “

Human relationships are at the heart of behavioral finance and how it applies to the financial advisory profession, yet Doss says, “few firms realize that time is the greatest asset an advisor has, and the more time an advisor has, the better they can perform.”

2010 Outlook: Rotation into Energy, Financials?

CNBC’s Paul Toscano writes of a potential major rotation by investors into energy and financials in 2010. He quotes Kanundrum Capital’s Brian Kelly as saying global growth will drive oil to $87 to $97 per barrel, though Steve Cortes of Veracruz LLC thinks the commodity trade is too crowded to be sustained. Katie Stockton of MM Partners, meanwhile, says the Financial Select Sector SPDR ETF (XLF) is in oversold territory, and Jon Najarian of OptionsMonster says anonymous sources at Bank of America (BAC) say the first quarter of 2010 will be a “blowout.”

The Father of Value Investing in Action

Benjamin Graham�is known as the father of value investing and the author of classic investing books�Security Analysis and�The Intelligent Investor, in which he introduced the idea of Mr. Market. Graham was an adjunct professor at Columbia Business School for years and taught a class on investing that changed many of his students' lives. His most famous student, Warren Buffett, has made billions of dollars following Graham's ideas at his company Berkshire Hathaway.

Last Friday at the Columbia Student Investment Management Association conference, Columbia business school released a 15-minute video called "The Legacy of Ben Graham," which shows rare footage of Graham teaching, as well as interviews with some of his former students who went on to become great investors. It's well worth watching

Ben Graham starts the video off talking about volatility in the markets:

The explanation cannot be found in any mathematics, but it has to be found in investor psychology. You can have an extraordinary difference in the price level merely because not only speculators, but investors themselves, are looking at the situation through rose-colored glasses, rather than dark-blue glasses. It may well be true that the underlying psychology of the American people has not changed so much, and that what the American people have been waiting for for many years has been an excuse for going back to the speculative attitudes which used to characterize them from time to time. If history counts for anything, that the stock market is much more likely than not to advance to a point where a real danger exists.

With his point that volatility is explained by investor psychology and not by the math of actual business value, Graham could just as easily have been talking about today's markets. Just this past week, we have seen three moves up or down of roughly 1%. You can't argue that the value of Dow companies moved that much; it comes down to the price people are willing to pay for said companies on a given day. Lately the Dow Jones Industrial Average (DJINDICES: ^DJI  ) is hitting five-year highs after being down 7,500 points to 6,500 just four years ago. It's not that businesses were worth half as much in March 2009 as they are today; it's just that investors were panicked about the market.

Graham understood that to be a successful investor, you need to ignore the volatility of the market and focus on the long-term trends in businesses' real value.

If you're looking for some long-term investing ideas, then I invite you to read the Fool's brand-new special report: "The 3 Dow Stocks Dividend Investors Need." It's absolutely free, so just click here and get your copy today.

Top Stocks To Buy For 3/31/2013-1

Intersil Corporation NASDAQ:ISIL opened at $15.07 and with a fall of 3.93% closed at $14.67. Company’s fifty days average price is $13.66 whereas it has a market capitalization $1.82 billion.
The total of 5.09 million shares was transacted over last trading day.

Silver Standard Resources Inc. (USA) NASDAQ:SSRI opened at $28.50 and with a fall of 3.47% closed at $27.24. Company’s fifty days average price is $25.80 whereas it has a market capitalization $2.15 billion.
The total of 1.05 million shares was transacted over last trading day.

Banner Corporation NASDAQ:BANR opened at $2.36 and with a fall of 3.45% closed at $2.24. Company’s fifty days average price is $1.76 whereas it has a market capitalization $251.02 million.
The total of 1.49 million shares was transacted over last trading day.

Dynavax Technologies Corporation NASDAQ:DVAX opened at $3.20 and with a fall of 3.44% closed at $3.09. Company’s fifty days average price is $2.19 whereas it has a market capitalization $357.13 million.
The total of 2.00 million shares was transacted over last trading day.

Nektar Therapeutics NASDAQ:NKTR opened at $12.95 and with a fall of 2.49% closed at $12.53. Company’s fifty days average price is $13.22 whereas it has a market capitalization $1.18 billion.
The total of 1.14 million shares was transacted over last trading day.

Top Stocks To Buy For 3/31/2013-4

Petrohawk Energy Corporation (NYSE:HK) witnessed volume of 35.87 million shares during last trade however it holds an average trading capacity of 19.78 million shares. HK last trade opened at $38.31 reached intraday low of $38.29 and went +0.18% up to close at $38.31.

HK has a market capitalization $11.64 billion and an enterprise value at $14.60 billion. Trailing twelve months price to sales ratio of the stock was 7.05 while price to book ratio in most recent quarter was 3.28. In profitability ratios, net profit margin in past twelve months appeared at 1.90% whereas operating profit margin for the same period at 12.22%.

The company made a return on asset of 1.63% in past twelve months and return on equity of 2.26% for similar period. In the period of trailing 12 months it generated revenue amounted to $1.65 billion gaining $5.49 revenue per share. Its year over year, quarterly growth of revenue was 12.30%.

According to preceding quarter balance sheet results, the company had $1.54 million cash in hand making cash per share at 0.01. The total of $2.99 billion debt was there putting a total debt to equity ratio 84.13. Moreover its current ratio according to same quarter results was 0.54 and book value per share was 11.70.

Looking at the trading information, the stock price history displayed that its S&P500 52 Week Change illustrated 19.95% where the stock current price exhibited up beat from its 50 day moving average price of $27.07 and remained above from its 200 Day Moving Average price of $23.78.

HK holds 303.79 million outstanding shares with 275.54 million floating shares where insider possessed 2.71% and institutions kept 84.90%.

AT&T to Pay TiVo Over Patent Lawsuit

At The Motley Fool, we know our readers like to be informed. Here's a quick look at today's most relevant financial news, boiled down to what you need to know. In today's video, we cover the following:

• Sears Holdings (Nasdaq: SHLD  ) hires Brookstone CEO Ron Boire in a last-ditch move to save its struggling Kmart and Sears brands.
• ExxonMobil (NYSE: XOM  ) is reportedly looking to sell a majority of its stake in Japan-based refiner TonenGeneral in a deal that could be valued near $5.2 billion.
• AT&T (NYSE: T  ) will pay TiVo (Nasdaq: TIVO  ) a minimum of $215 million to settle a patent case against the mobile company. TiVo also has patent lawsuits pending against AT&T rival Verizon.

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So there you have it -- the top financial stories of the day. If you're interested in getting all the news and commentary on these stocks, sign up for My Watchlist -- it's free!

• Add�ExxonMobil�to My Watchlist.
• Add�Verizon�Communications�to My Watchlist.
• Add�TiVo�to My Watchlist.
• Add�AT&T�to My Watchlist.
• Add�Sears�Holdings�to My Watchlist.

The Maser Brothers: The Self-Employment Success Story for Brother Team ups

Over the course of time, the failure of those enslaved by their employers gaze in wonder at those who are the successful self-employed. “I don’t know how they do it?” While we wonder how the successful entrepreneurs of the business world make it on their own, there are success stories that are made with family teams. Brothers of business have proven to be just as inspirational as those who led the way solo. The inspiring tale of Michael and Patrick Maser expresses the ideal sibling mashup.

Success is measured in action not words. From pop stars like the Jonas Brothers and early stardom from Emilio Estevez and Charlie Sheen, being brothers has proven to be a strong business strategy. One brother matchup that has stood the test of time is that of Michael and Patrick Maser.

Though both Michael and Patrick had achieved some level of success with their own companies, they knew there was something missing and felt certain they had a greater purpose. Patrick learned about ACN, a company that strives to turn every member a group leader in technological industry, and shared his dream with Michael. That was 2003.

What started as a dream became a reality over the course of only a few years. Michael and Patrick Maser changed the business world like no other team before them, click here to find out more . Creating opportunities for the average person to make money and become a successful giant within the corporate world, the Maser brothers have made their mark in the world.

“Taking someone and helping them find the winner in themselves,” says Patrick Maser regarding ACN and the company’s benefits, “This Company is massive to human potential and what is possible. When your life changes, you amend the world.” Playing modest with their success, the Maser brothers make light of their accomplishments. By continuing to achieve the impossible, the Maser brothers continue to achieve recognizable greatness.

Click here today to find out additional details about ACN and Patrick Maser!. This article, The Maser Brothers: The Self-Employment Success Story for Brother Team ups is available for free reprint.

Hedge Funds, Investment Banks: When Will They Ever Learn?

Where have all the flowers gone?

Long time passing

Where have all the flowers gone?

Long time ago

Where have all the flowers gone?

Girls have picked them every one

When will they ever learn?

When will they ever learn?

(First verse from the song by Pete Seeger "Where Have All The Flowers Gone")

Reader Mayascribe alerted me to a book review in the Friday Wall Street Journal which had missed my attention. The review is by WSJ writer Scott Patterson. The book is "The Quants" by Scott Patterson. Yes the review is by the author, so it's not really a review but simply an summary of one part of the book.

Patterson describes the computer model world of the high powered mathematicians and scientists (called quants) that work on trading models for major hedge funds and Wall Street firms (including investment banks) that behave like hedge funds. The excerpt recounts what happen on a few days in August, 2007 with a group at Morgan Stanley (MS) going by the name PDT (Power Driven Trading).

In a just a few days the investment world almost spun out of control as changes were occurring in the MBS (mortgage backed securities) markets totally outside the range of the complicated models used for trading. PDT and other hedge fund like activities around the world were suddenly losing billions. They had to dump stock positions by the truck load and massive swings in stock prices were occurring.

Curiously, the stock market, although quite volatile in many stocks, was seeing indexes rise significantly, even if erratically. That resulted from many of the positions being dumped requiring buying to cover short holdings, driving prices higher. The public remained oblivious to the warning that these few days presented about the soon to start market swoon that would start from the market top just a few weeks later.

This entire story reminds one of the Long Term Capital Management hedge fund story. In 1998, LTCM suddenly lost control of a gigantic highly leveraged portfolio with models designed by a previous generation of quants, led by a couple of Nobel prize winners. The problem in that case was emerging markets, mostly emerging market debt. Changes started to occur outside of the parameters assumed by the models. The size of the LTCM meltdown was such that the entire financial system was threatened and massive intervention by central banks was necessary to prevent a financial collapse.

Just a year or so later, the remaining vestiges of Glass-Steagall, the law passed in the 1930s to keep the banks separate from the casinos, were repealed. From that point on the quants expanded into the banks. Welcome to PDT at Morgan Stanley and similar groups within all the major banks.

Where have all the flowers gone indeed. When will they ever learn?

Will the Volcker plan announced last week effectively address this problem? There is a lot of wealth, addicted to easy money with government backstops when there is failure, that say: No way. Chrystia Freeland, Gillian Tett and Tom Braithwaite just posted a Financial Times article that reports on Wall Street bank plans to use the upcoming Davos World Economic Forum to lobby against the Volcker plan.

Borrowing from another line in the song, we better be sure that in this case there is no "long time passing".

Disclosure: No positions.

This Week in Biotech

With the�SPDR S&P Biotech Index�up 25% over the trailing-12-month period, it's evident that investment dollars are willingly flowing into the biotech sector. Keeping that in mind, let's have a look at some of the rulings, studies, and companies that made waves in the sector last week.

It was a week of predominantly large moves with two FDA rulings (sending one company higher and the other lower), and three big clinical updates.

Beginning with the FDA rulings, nothing stands out more to me than the approval by the Food and Drug Administration of Biogen Idec's (NASDAQ: BIIB  ) Tecfidera (previously BG-12) to treat relapsing multiple sclerosis. In trials, Tecfidera demonstrated far better efficacy with significantly fewer side effects than currently approved oral MS medications. Aubagio, which is made by Sanofi�carries a black box warning regarding liver complications, and Gilenya, made by Novartis, can cause serious cardiovascular complications. Tecfidera received the thumbs up for approval from the European Medicine Agency's panel last week and could have a billion-dollar drug in its pipeline as rapidly as 2014 if it gains approval in the EU as well.�

Conversely, United Therapeutics (NASDAQ: UTHR  ) needs more than a rabbit's foot to get a little luck on its side when it comes to gaining approval for its oral pulmonary arterial hypertension drug, Treprostinil. On Monday, the company received its second complete response letter in the past six months denying its approval. If you recall, I thought it odd how quickly United Therapeutics had resubmitted its new drug application, especially when it appeared the FDA would like to see the company run additional clinical tests to support its six-minute walking distance data. Until United Therapeutics caves into further trials, Treprostinil will remain a "what if" for investors.�

In terms of late-stage data, we had one company explode higher, one stand pat, and one get absolutely eviscerated this past week.

Soaring to the heavens this week was Repros Therapeutics (NASDAQ: RPRX  ) , which reported Thursday that Androxal, its secondary hypogonadism treatment, met both primary endpoints in late-stage trials. Repros shares imploded two months ago when it noted it'd be delaying its data report for a few months because of an anomalous patient pool which appeared to exhibit above average results. Following the OK from the FDA to continue its data analysis in February, the end result, according to Repros, was that 79%-83% of treated patients were in the normal testosterone range (primary endpoint was 75%). Androxal also met the sperm primary endpoint that it exhibit non-inferiority to the placebo by a margin of 20% or less. Repros is more of less trading at levels it was at when it had its "boo-boo" in late January, so it could indeed have room to run higher as my Foolish colleague Brian Orelli noted. Shares advanced 83% this week.

Trius Therapeutics (NASDAQ: TSRX  ) reported what I felt was phenomenal data for its late-stage acute bacterial skin and skin structure infection drug, Tedizolid, on Monday -- yet the stock barely moved. In trials, the ABSSSI drug handily mopped the floor with Pfizer's�Zyvox, meeting both its primary endpoint of reducing lesion size, and secondary endpoints of a sustained clinical response and positive investigative assessment at the end of the therapy. Tedizolid, an oral medication, can be administered in just six days compared with Zyvox's 10-day regimen, which makes it a clear choice to outperform both domestically and overseas. This is a name I think you should have on your Watchlist.�

Finally, Ziopharm Oncology (NASDAQ: ZIOP  ) imploded, with shares falling 62% on the week after the company announced it would be discontinuing its late-stage drug Palifosfamide for the treatment of metastatic soft tissue sarcoma. The independent data monitoring committee suggested that Ziopharm follow-up with existing patients to see if there was an improvement in overall survival, but when it was apparent that there wasn't a statistical advantage to Palifosfamide over the placebo in terms of progression-free survival, Ziopharm's management decided to pull the plug on the drug altogether with regard to metastatic soft tissue sarcoma. Instead,�Ziopharm plans to focus entirely on its synthetic biology programs which are much earlier along in the development process.

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

Can F5 Deliver on High Expectations?

Growth investing can sometimes be a pain in the butt. This is especially true when you find a company that seems expensive, yet the stock will continue to climb as long as that company is posting growth numbers that the Street craves. For quite some time, F5 Networks (NASDAQ: FFIV  ) has fit this description pretty well. But the bar just might have been raised a little too high this time.

While F5 remains a strong play in network traffic management products and services, the company's no longer on the torrid growth path it once enjoyed. Nevertheless, the stock is holding up pretty well despite the fact that the company is coming off two�sub-par�earnings reports, including the most recent first quarter when F5 missed on both revenue and earnings-per-share estimates.

Yeah, but so what...
As have been the case for quite some time, there are still plenty of F5 bulls that want to dismiss the company's recent struggles. On Monday, Deutsche Bank's Brian Modoff reiterated his buy rating on the stock, while also assigning a price target of $116. Basically, Modoff believes there is 33% upside in these shares. I just don't see it.

Besides, given that the price-to-earnings ratio is currently trading at more than twice that of Cisco� (NASDAQ: CSCO  ) ,�the share price is already too high. What can F5 do, beyond doubling revenue growth to justify a premium of 33%? For that matter, revenue growth has to return to (at least) 20%. And with increased competition from rivals like Cisco�and Fortinet (NASDAQ: FTNT  ) , this is no small task, especially since F5 only managed 13% growth in its recent quarter, which was only a 1% sequential improvement.

By contrast, not only did Fortinet beat on both top and bottom line estimates, but Fortinet grew revenue and net income at a rate of 25% and 26%, respectively. Bulls will argue that F5 grew service revenue 28%. But F5 managed to offset the strong service performance with a dismal 4% growth in product revenue, which also arrived down 2% sequentially.

So, absent some significant fundamental improvement, it's tough to see how F5 is going to grow in a manner that supports 33% premium in share price. In his research note, Modoff suggested that some "big banks" had shown "meaningful interest" in F5's Web application security and DDoS mitigation solutions."

DDoS, which stands for distributed denial of service, is a form of coordinated computer attack. While F5 is certainly strong in this sort of threat prevention, it is no monopoly. Aside from battling Cisco and Fortinet, there are also new entrants like Palo Alto Networks�and Sourcefire�that are generating plenty of excitement. In other words, not only does F5 have growth to worry about, there is now the threat of margin compression.

Can new acquisitions and products ignite growth?
While F5's growth has indeed slowed, management has not given up. Over the past couple of weeks, the company has made several new announcements, including a key acquisition in LineRate Systems, a company that develops software-defined networking, or SDN, services.

This is a deal that I felt F5 had to make, which should help strengthen the company's current lead in the application deliver control, or ADC, market. And the fact Cisco has recently exited the ADC market leaves the door open for F5, which already enjoys a 50% share, to dominate the likes of Juniper Networks, which has shown its own signs of struggling.

What's more, F5 recently announced the F5 Mobile App Manager, a new hybrid cloud solution for mobile application management, which now puts the company in a position to steal market share from Citrix�and Aruba Networks. In other words, despite my bearish views, it seems the company is finally getting back to what it does best.

That said, it remains to be seen as to what extent these recent moves can ignite growth. Product revenue can't stay in the single digits, not to the extent that it justifies Modoff's optimism. As noted, these shares are already trading at five times trailing sales. Plus, with Cisco and Fortinet performing so well, F5's performance has to really stand out. Unfortunately, this is a situation where Modoff just might have set the bar too high.

Once a high-flying tech darling, Cisco is now on the radar of value-oriented dividend lovers. Get the low down on the routing juggernaut in The Motley Fool's�premium report. Click here now to get started.

Has Travelers Become the Perfect Stock?

Every investor would love to stumble upon the perfect stock. But will you ever really find a stock that provides everything you could possibly want?

One thing's for sure: You'll never discover truly great investments unless you actively look for them. Let's discuss the ideal qualities of a perfect stock and then decide whether Travelers (NYSE: TRV  ) fits the bill.

The quest for perfection
Stocks that look great based on one factor may prove horrible elsewhere, making due diligence a crucial part of your investing research. The best stocks excel in many different areas, including these important factors:

• Growth. Expanding businesses show healthy revenue growth. While past growth is no guarantee that revenue will keep rising, it's certainly a better sign than a stagnant top line.
• Margins. Higher sales mean nothing if a company can't produce profits from them. Strong margins ensure that company can turn revenue into profit.
• Balance sheet. At debt-laden companies, banks and bondholders compete with shareholders for management's attention. Companies with strong balance sheets don't have to worry about the distraction of debt.
• Moneymaking opportunities. Return on equity helps measure how well a company is finding opportunities to turn its resources into profitable business endeavors.
• Valuation. You can't afford to pay too much for even the best companies. By using normalized figures, you can see how a stock's simple earnings multiple fits into a longer-term context.
• Dividends. For tangible proof of profits, a check to shareholders every three months can't be beat. Companies with solid dividends and strong commitments to increasing payouts treat shareholders well.

With those factors in mind, let's take a closer look at Travelers.

Factor	What We Want to See	Actual	Pass or Fail?
Growth	5-year annual revenue growth > 15%	(0.2%)	Fail
�	1-year revenue growth > 12%	1.2%	Fail
Margins	Gross margin > 35%	27.8%	Fail
�	Net margin > 15%	9.6%	Fail
Balance sheet	Debt to equity < 50%	25%	Pass
�	Current ratio > 1.3	0.41	Fail
Opportunities	Return on equity > 15%	9.9%	Fail
Valuation	Normalized P/E < 20	16.42	Pass
Dividends	Current yield > 2%	2.2%	Pass
�	5-year dividend growth > 10%	9.6%	Fail
�	�	�	�
�	Total score	�	3 out of 10

Source: S&P Capital IQ. Total score = number of passes.

Since we looked at Travelers last year, the company has picked up a point. But the stock has done a lot better than that, climbing more than 40% over the past year as the property and casualty insurance company had a much better year in 2012 than it did in 2011.

Travelers' impressive performance is somewhat surprising given the fact that Hurricane Sandy had huge economic impact on the Northeast in late 2012, just as Hurricane Irene did in 2011. Certainly, the damage caused by Sandy was extensive, with Travelers and rivals Allstate (NYSE: ALL  ) and Chubb (NYSE: CB  ) each reporting losses related to Sandy in the neighborhood of $1 billion during the fourth quarter of 2012. Yet share prices of all three companies barely paused in their upward moves, shrugging off losses as an inevitable aspect of their business models.

The difference this time around for Travelers and its peers is that insurers are in a more favorable rate environment now. 2011's disasters caught the industry by surprise after a period during which premiums had been relatively low. But 2011's bad experience gave insurance companies the chance to raise rates dramatically, and that positive pricing environment helped build bigger loss-reserve cushions against events like Sandy.

Still, with favorable rates will come heightened competition. Notably, AIG (NYSE: AIG  ) has accomplished much of the restructuring it needed to do after the financial crisis, and AIG's P&C insurance business has the scope to compete favorably with Travelers.

For Travelers to improve, it needs better investment conditions to allow it to raise its return on equity. Once that happens, a slightly faster rate of dividend growth could also help Travelers get a little closer to perfection.

Keep searching
No stock is a sure thing, but some stocks are a lot closer to perfect than others. By looking for the perfect stock, you'll go a long way toward improving your investing prowess and learning how to separate out the best investments from the rest.

At the end of last year, AIG was the favorite stock among hedge fund managers. Have they identified the next big multibagger, or are the risks facing the insurance giant still too great? In The Motley Fool's premium report on AIG, financials bureau chief Matt Koppenheffer breaks down the key issues that you need to know about if you want to successfully invest in this stock. Simply click here now to claim your copy, and you'll also receive a full year of key updates and expert analysis as news continues to develop.

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

Cliffs Down 12% Today, 51% in 2013

Cliffs Natural Resources (CLF) is having yet another terrible day, with its stock down more than 12%. The company has lost 51% in 2013.

Cliffs faces a number of challenges, not least the�falling price of iron ore, but today’s decline seems to have been precipitated by a couple of very negative analyst notes from Morgan Stanley and Credit Suisse.

Cowen Securities analyst Anthony Rizzuto also came out with a note this morning, after meeting with Cliffs CEO Joe Carrabba yesterday. Rizzuto, who has a Sell rating and $20 price target for Cliffs, writes:

We believe the company is taking a somewhat aggressive stance related to oncoming supply in the industry. It is our opinion that projects underway at BHP Billiton (BHP), Rio Tinto (RIO), Fortescue Metals Group (FSUMF), Vale (VALE), etc. are real and are coming, and we believe they will make a meaningful impact on the overall market. Management believes that decisions made by the global iron ore producers today to move away from greenfield investment could lead to a supply crunch over the medium term. Clearly only time will tell, but we believe that projects that are already underway (and have a high likelihood of completion) will have the more meaningful impact.

The $65/mt cash cost goal at Bloom Lake appears to be more of a 2015 reality on a run-rate basis. Though some aspects of the expansion are currently progressing, the company expects a short-term cost escalation and a roughly 6-month ramp-up period once the concentrator starts up in mid-2014.

The company is actively investigating its potential opportunities to supply DRI pellets, which it sees as a growth industry. There are two facilities (Northshore and United Taconite), where testing is already underway.

Operations at the company’s coal assets appear to have stabilized, though management expects roughly breakeven results until market prices for met coal improve.

 

Foreclosure Facts for Real Estate Investors

Although foreclosures are down compared to 2012, there are still well over a million properties in some state of foreclosure in the U.S. and more are being added to the list every day. It’s helpful for investors and agents to know that foreclosures that are on the market for too long begin to deteriorate and some of them are really old, so it’s good to focus on them in the short run. It’s also good to remember that institutional investors are now competing with individual buyers, which can unexpectedly raise the value of a foreclosure. Finally, it’s wise to consider that more are entering the market every day, which means dealing with them competitively and proactively is a good idea. For more on this continue reading the following article from TheStreet.

Nearly 1.5 million properties were in some stage of foreclosure in the first quarter of 2013, according to a new quarterly analysis of foreclosure inventory by RealtyTrac.

That is up 9% from a year ago, but is down 32% from the peak in December 2010.

The annual increase in foreclosure inventory at a national level was caused by a 59 percent jump in pre-foreclosure inventory.

Pre-foreclosure is the period before the home is put up for public auction. With short sales on the rise, more homes are being sold in the pre-foreclosure period.

Inventory of homes scheduled for foreclosure auction decreased 25 percent and inventory of bank-owned homes decreased 3 percent.

Fannie Mae (FNMA), Freddie Mac (FMCC) accounted for 12% of the foreclosure inventory, followed by Bank of America (BAC), Wells Fargo (WFC) and JPMorgan Chase (JPM). JPMorgan saw its foreclosure inventory increase 58% year-on-year.

Smaller servicers who have been gaining market share from the big banks posted the biggest rise in foreclosure inventory. Nationstar Mortgage (NSM) saw its foreclosure inventory more than double.

Foreclosure inventory has been declining as default rates have improved due to the economic recovery and banks have increasingly pursued alternatives to foreclosure such as short sales and mortgage modifications.

Still, the trends in recent months have been uneven. States that follow a judicial foreclosure process where banks need court approval to file a foreclosure action against a delinquent borrower continue to see a rise in foreclosures. The foreclosure process in these states now runs into several years.

Banks are also still adjusting to new foreclosure laws enacted at various states, which has slowed down the pace of foreclosures. But banks are still dealing with elevated levels of problem loans so while foreclosure activity is heading lower overall, periodic reversals are likely as banks push foreclosures through the pipeline.

"Delinquent loans that fell into a deep sleep after the robo-signing controversy in late 2010 are gradually coming out of hibernation following the finalization of the national mortgage settlement in April 2012," said Daren Blomquist, vice president at RealtyTrac in a statement. "The settlement provided some closure regarding accepted foreclosure processing practices, and as a result lenders have been reviving more of these delinquent loans and pushing them into foreclosure over the past 12 months, particularly in states where a lengthy court process has resulted in a bigger backlog of non-performing loans still in snooze mode."

RealtyTrac's analysis of foreclosures in the first quarter reveals a few interesting trends for real estate investors.

One, among properties actively in the foreclosure process (excluding bank-owned properties), 35 percent were properties identified as vacant or where the homeowner had moved. The percentage of owner-vacated foreclosure inventory was 50 percent or higher in several states, including Indiana, Oregon, Washington and Nevada

Homes that are vacant for too long start to deteriorate as the owner fails to maintain them. This lowers their market value and also brings down home prices in the neighborhood.

But the data also suggests that there are plenty of vacant single-family homes, which is good news for investors in the business of fixing up these homes and then renting them out or selling them. Institutional investors are betting big money on converting foreclosures into rentals with Blackstone (BX) leading the way.

Two, there was a 12% increase in "shadow inventory" - homes that have started the foreclosure process but have not yet been listed in the market. "Many of these properties will be listed for sale as short sales in the next six to 12 months, or go through the foreclosure process and eventually be listed for sale as bank owned in the next 12 to 18 months," according to the report.

That is good news for buyers in markets that are suffering from a shortage of inventory. Some of the biggest increases in unlisted foreclosure inventory were in New York, Florida, New Jersey, Washington and Illinois, according to the report.

Three, some of the foreclosure inventory is really old. About a third of the foreclosure inventory as of the first quarter was built before 1960 and this is up 11% from a year ago. Investors are unlikely to find these appealing because the costs to repair and maintain them are considerable.

That means more bidding wars for the more desirable properties -- the ones built after 1990, which account for another third of the inventory. These pose the least risk for significant maintenance and repairs, according to RealtyTrac.

The homes built between 1960 and 1990 which account for the remaining third need more work, but may be appealing to owner-occupants and investors as well.

Four, foreclosure inventory is increasing the most at the very low end and at the very high end. While 60% of distressed properties are homes valued below $200,000, the properties priced above $5 million saw a 126% jump from a year ago, while foreclosure inventory of homes with loan amounts less than $50,000 increased 62%.

RIM Swings to Black, Sells a Million Z10s

TORONTO�Research In Motion Ltd. reported its second consecutive quarterly profit and decent sales for its new flagship phone Thursday, but perhaps the biggest revelation from its chief executive was a risky strategy to revive the company.

The plan: Roll out a portfolio of mixed-price phones to help shore up the company's dwindling smartphone-market share and the expected declines in service-fee revenue.

Enlarge Image

Close Bloomberg News

At a mall in Jakarta, customers purchase the new BlackBerry Z10 on March 15, the first day it was available.

More

• Digits: Recap of the Earnings Call
• Canada Real Time: The Last of RIM's Co-Founders Departs
• Canada Real Time: RIM's War Chest Stays Steady at $2.9 Billion
• Canada Real Time: One Million Z10s Sold
• Video: Research in Motion Scores Profit, Loses Subscribers

With cost cutting and layoffs mostly done, RIM CEO Thorsten Heins said he has been encouraged so far with the rollout of the BlackBerry Z10, the first phone running off RIM's new operating system.

With only a month of sales from a limited number of markets, it is still far from clear that launch is a success.

Compare Smartphones

See a side-by-side comparison of the specifications of recent phones, including the BlackBerry Z10.

View Graphics

But Mr. Heins said he is already turning his attention to a series of new, as-yet-unseen products due out later in RIM's fiscal year�signaling he is eager to go after several different markets with low- and midprice versions of the new phones.

The shift, which Mr. Heins has alluded to in the past, appears to be an acknowledgment that no matter how big a hit the Z10 may prove, the BlackBerry isn't likely to compete in the same league any time soon with market leaders Apple Inc. and Samsung Electronics Co.

Pentagon Awards German Firm a $343.6 Million Missile Contract

In a concrete demonstration of bilateral military cooperation, the U.S. Department of Defense announced Thursday that it has awarded a firm-fixed-price contract worth $343.6 million to German defense firm RAMSYS GmbH. The contract calls for RAMSYS to supply "445 Block 2 MK-44 Mod 4 Rolling Airframe Missile (RAM) Guided Missile Round Pack (GMRP) All-Up-Rounds (AURs)."

That's quite a mouthful, and probably requires some explaining. RAMSYS, aka RAM System GmbH, is a Raytheon (NYSE: RTN  ) partner and a joint venture among three European defense firms: privately held Diehl Stiftung owns 25% of RAMSYS, its subsidiary Diehl BGT Defence owns a further 25%, and MBDA Holdings -- itself owned by BAE Systems (NASDAQOTH: BAESY  ) , EADS (NASDAQOTH: EADSY  ) , and Finmeccanica (NASDAQOTH: FINMY  ) -- owns the remaining 50% of RAMSYS.

RAMSYS's near-sole raison d'etre is to build Rolling Airframe Missiles -- the "RAM" in RAMSYS -- for Europe's militaries.

As for the RAM itself, this is an anti-aircraft and anti-cruise missile defense system used on multiple ship platforms in Europe, and was co-developed, and is co-produced, by the U.S. and German governments. The RAM got its name�because the surface-to-air missiles that it fires tend to spin or "roll" while in flight. The system is currently in service on about 78 U.S. Navy warships, and aboard 30 German vessels, and the Navies of South Korea, Egypt, Greece, Japan, Turkey, and the UAE are all considering, or have already begun adopting, the RAM, as well.

The Pentagon contract awarded Thursday is expected to be completed by January 2019, and will be 100% paid for by the German government.

��

Genzyme Jumps on FDA Settlement, Approval of Pompe Remedy

Shares of Genzyme (GENZ) are up $2.83, or almost 6%, at $51.34, after the company last night confirmed details of $175 million settlement with the Food & Drug Administration on issues surrounding its drug manufacture, and said this morning the FDA had approved its drug to treat Pompe disease.

Last night’s agreement with the FDA follows the general outlines of Genzyme’s announcement last month that it expected to take a $175 million charge in the quarter to pay disgorgement of past profits deriving from production of its Cerezyme and Myozyme drugs, after the FDA slapped the company with a consent decree back in March.

Meantime, the company’s “Lumizyme” was approved for patients 8 and older in the U.S. for treatment of Pompe, a heritable disease, potentially fatal, marked by an excess of glycogen.

Genzyme said it’s been working on Lumizyme for a decade and spent $1 billion developing it.

‘Normal’ Housing Market Predicted in 2015

Trulia’s February Housing Barometer, which measured key U.S. housing performance factors against the nadir of the market’s decline, is forecasting a return to normalcy in 2015. The report suggests that the market is currently at “53%” normal based on existing home sales, construction starts and the latest delinquency and foreclosure trends, and is up from “33%” normal at this time last year. Existing home sales and construction starts were up for the month of February, while the number of delinquencies and foreclosures continued to drop. For more on this continue reading the following article from TheStreet.

The housing market is 53% back to "normal", according to Jed Kolko, chief economist of online real estate company Trulia.

In a blog post Tuesday, Kolko shared the results of Trulia's February 2013 Housing Barometer, a monthly roundup of where three key housing indicators -- construction starts, existing home sales and delinquencies and foreclosure trends -- are relative to their worst point during the crash and their long-term, pre-bubble "normal" levels.

Construction starts rose to 917,000 in February, their second-highest level since July 2008. Construction starts are now 43% of the way back to normal.

Existing home sales in February were up 10% year-over-year, with non-distressed sales up 25%. Inventory bounced back 10% in February, recording a bigger jump than the typical seasonal increase. That is welcome news to the housing market that has witnessed tight supply. Inventory needs to climb for existing home sales to increase in volume.

Overall, existing home sales are 70% back to normal, according to Trulia.

The share of mortgage loans in default or foreclosure declined to 10.18% in February from 10.44% in January and is now at the lowest level since October 2008, according to Trulia. That is 46% back to normal.

So when does the housing market actually get to normal? "One year ago, the market was 33% back to normal. At this rate of recovery, 'normal' won't come until late 2015," Kolko wrote in his post. "Despite sustained improvement on every indicator, the housing market still has a way to go. The trend is up, but the road is long."

Hedge Funds Like This Energy Company

Investors that might be interested in the purchasing habits of the so-called professionals can glean some insight by examining 13-F filings. Now, while 13-Fs typically are released a bit later than the activities they record, they can offer a nice starting point for research.

During the fourth quarter of 2012, it appears that energy companies were not the belles of the ball. Anadarko Petroleum (NYSE: APC  ) was really the only widely purchased energy company, almost comparable to the popular companies in the technology and banking sectors. In the following video, Motley Fool analyst Taylor Muckerman breaks down why he thinks this company was the chosen one from the energy space.

But which one has Warren Buffett been purchasing lately?
National Oilwell Varco is perhaps the safest investment in the energy sector due to its industry-dominating market share. This company is poised to profit in a big way; its customers are both increasing the number of new drilling rigs and updating aging fleets of offshore rigs. To help determine if it could be a good fit for your portfolio, you're invited to check out The Motley Fool's premium research report featuring in-depth analysis on whether NOV is a buy today. For instant access to this valuable investor's resource, simply click here now to claim your copy.

Top Stocks For 3/28/2013-9

Delivery Technology Solutions, Inc. (PINK SHEETS:DTSL), the leader in delivery management technology, has completed participation at one of the largest restaurant franchisee conventions, held July 22-25, 2010. Its UDS division attended the convention by invitation of the leading franchisor, and was able to showcase its large corporate catering and event management delivery technology platform to many of the thousands of convention attendees, and a range of other potential partners in the industry and associated industries.

“This was our first opportunity to interact face-to-face on a large scale with franchisees from all across American, Canadian, European, Middle Eastern and Asian markets,” said Ryan Coblin, CEO. “We could shake their hands, explain the opportunities our solutions offer, answer their questions and sign them up for follow-up contacts.”

Over the three-day event the company was successful in signing up franchisees that own thousands of locations, and multiple-territory development agents who represent thousands more. These signed prospects will be contacted by the franchisor and UDS to offer them optional programs to expand their customer base, increase sales and build new profits for their restaurants. Qualified franchisees are enrolled in the optional programs, and then UDS proprietary software is implemented at their unit, so orders may be received from the UDS Call Center and Online Ordering technology.

Life Partners Holdings, Inc. (NASDAQ:LPHI), parent company of Life Partners, Inc., reports its preliminary financial results for its second fiscal quarter and first half ended August 31, 2010. Life Partners expects to report second quarter earnings of $0.54 per share, a 5.9% increase compared with earnings of $0.51 per share last year. Income from operations is expected to increase 13% to $12.7 million, up from $11.2 million for the same period last year. For the six months ended August 31, 2010, the company expects to report earnings of $1.05 per share, a 4.0% increase compared with $1.01 per share for the six months ended August 31, 2009.

For the quarter ended August 31, 2010, Life Partners expects to report $30.3 million in revenues, a 4.1% increase over the $29.1 million reported for the same period last year. For the six months ended August 31, 2010, the company expects to report revenues of $57.0 million, a 0.8% increase over the $56.5 million reported for the same period last year.

Life Partners is the world’s oldest and one of the most active companies in the United States engaged in the secondary market for life insurance, commonly called “life settlements.” Since its incorporation in 1991, Life Partners has completed over 120,000 transactions for its worldwide client base of over 26,000 high net worth individuals and institutions in connection with the purchase of over 6,300 policies totaling over $2.6 billion in face value.

Life Technologies Corporation (NASDAQ:LIFE) has finalized cell line license agreements with a number of companies to provide rights to Life Technologies� proprietary CHO (Chinese hamster ovary) cell lines for the production of recombinant proteins used as therapeutic agents and vaccines.

New licensees include Advanced BioScience Laboratories, Inc., CNA Development L.L.C., Chong Kun Dang Pharmaceutical Corporation and DiNonA Inc. of Korea, RecipharmCobra Biologics, Ltd. of the United Kingdom, evitria SA of Switzerland, Fusion Antibodies of Northern Ireland, Indian Immunologicals Limited of Hyderabad, India and others. Commercial use rights have additionally been offered to many of the hundreds of institutions already using Life Technologies� proprietary cell lines for research and development.

Life Technologies Corporation is a global biotechnology tools company dedicated to improving the human condition. Our systems, consumables and services enable researchers to accelerate scientific exploration, driving to discoveries and developments that make life even better. Life Technologies customers do their work across the biological spectrum, working to advance personalized medicine, regenerative science, molecular diagnostics, agricultural and environmental research, and 21st century forensics. Life Technologies had sales of $3.3 billion in 2009, employs approximately 9,000 people, has a presence in approximately 160 countries, and possesses a rapidly growing intellectual property estate of approximately 3,900 patents and exclusive licenses. Life Technologies was created by the combination of Invitrogen Corporation and Applied Biosystems Inc., and manufactures both in-vitro diagnostic products and research use only-labeled products.

Life Time Fitness, Inc. (NYSE: LTM):

WHAT:
Toyota U.S. Open Triathlon�the championship event in the 2010 Life Time Fitness Triathlon Series Race to the Toyota Cup.

WHEN:
Sunday, October 10, 2010�7:30 a.m. CST

WHO:
Defending 2009 Race to the Toyota Cup Champions, Lisa Norden (SWE) and Matt Reed (USA), join more than 25 other female and male professionals.

WHERE:
Swim start�The Harbor at Lake Ray Hubbard, Rockwall, Tex.

For 2010, the Toyota U.S. Open Triathlon features a new course, changing the event from its original point-to-point format to a circular course. It offers a 1.5-kilometer swim at Lake Ray Hubbard, with a 40-kilometer bike ride through the community of Rockwall, and a 10-kilometer run, that starts and ends at The Harbor in Rockwall.

WHY:
The pro field will be battling for the event�s $92,000 purse, with the winner in both the female and male divisions taking home $20,000 each. In addition to the cash prizes, the winners will also earn 20,000 points in the Life Time Fitness Triathlon Series Race to the Toyota Cup.

Life Time Fitness, Inc. (NYSE: LTM) is a healthy way of life company based in Chanhassen, Minnesota. The Company is dedicated to providing programs and services that help its members connect and engage with their areas of interest, and achieve success with their health and fitness goals. Life Time Fitness designs and operates distinctive, multi-use sports, professional fitness, family recreation and spa/resort centers that help members lead healthy and active lives. As of September 30, 2010, the Company operated 89 centers in 19 states and 24 markets.

The Unappreciated Awesomeness at Wausau Paper

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

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

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

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

To calculate the cash conversion cycle, add days inventory outstanding to days sales outstanding, then subtract days payable outstanding. Like golf, the lower your score here, the better. The CCC figure for Wausau Paper for the trailing 12 months is 48.7.

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

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

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

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

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

On a 12-month basis, the trend at Wausau Paper looks very good. At 48.7 days, it is 9.0 days better than the five-year average of 57.7 days. The biggest contributor to that improvement was DIO, which improved 7.6 days compared to the five-year average.

Considering the numbers on a quarterly basis, the CCC trend at Wausau Paper looks good. At 47.0 days, it is 9.8 days better than the average of the past eight quarters. With both 12-month and quarterly CCC running better than average, Wausau Paper gets high marks in this cash-conversion checkup.

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

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• Add Wausau Paper to My Watchlist.

Individual Finance Recommendations That Money Can’t Obtain

Saving dollars may be difficult, specifically when so many external components encourage you to devote cash consistently. Every day, you must resist the constant urgings to spend dollars on what you see on television or in shops. Continue reading for some economic guidelines that will assist you develop into a greater saver and cut your spending.

To get your finances in greater shape, use tax planning to its fullest benefit. You could possibly wish to take your employer up on offers to invest your pre-tax dollars in retirement or wellness care plans. Make sure that you may have a separate fund for any potential medical costs that you just may perhaps incur. If your employer offers to match your contributions to a 401(k) program, make probably the most in the opportunity. It’s a excellent financial selection any time you invest the cash you make.

Arrange for an automatic withdrawal to take revenue out of your account and place it in a savings account with high interest rates. You may feel the squeeze in the starting, but you might eventually adjust your habits accordingly whilst accruing wealth.

Make greater possibilities use ronzoni smart taste coupon. Are you looking to save a hundred or two each month? You may need to cut out some of the tiny luxuries that you are utilized to treating yourself to, which include drinking coffee out as opposed to producing it at property. Obtaining coffee at shops is usually incredibly costly. Brew coffee at house and fancy it up by using flavored creamer and whipped cream. Pour your home-brewed coffee into a polystyrene cup and take your coffee with you!

A single strategy to care for your private finances is usually to get a good wellness insurance coverage policy. Sooner or later, nearly every person wants medical care. This can be why it’s imperative to create positive you may have good quality health insurance coverage. Really speedily, hospital and medical doctor bills can add up to $20,000 or additional. In case you do not have fantastic insurance coverage, you can be left drowning in debt.

Maintain modest amounts of money on hand for smaller purchases and use your debit card for bigger ones. Don’t use credit cards as your only supply of revenue. New fees and policies are generating credit cards price additional to use so learn to carry money for modest purchases and take into consideration finding a debit card instead.

Many people say that “if you don’t play the lottery, you will not win.” In truth, the only approach to win the lottery will not be to play and put the funds within a bank account as an alternative. This will guarantee that you just will increase your earnings over time, rather than throwing your revenue away.

For those who have children and want them to attend college, you must commence saving appropriate right after their birth. College may be pretty expensive, so if you wait too extended to save the money you might not have the ability to spend for their education.

Discover to place aside a modest amount daily, even when it really is just the transform from your pocket. Do your study just before grocery shopping. Read circulars to locate the most beneficial deals. Program your shopping to save gas and income. Adapt your weekly menu to the things that are on sale.

Be open towards the notion of purchasing store brand things. A great deal from the time the shop brand is nearly the same as the original, using a lower cost. It also has identical ingredients. Buying generic food items can save you income, so give them a try.

Hunt down some excellent offers at discount retailers for all of your household linens and bedding. This will allow you to save cash and time all through the year and nonetheless has precisely the same high quality as high priced brands. Carrying out some comparison shopping is actually a excellent approach to have some additional income in your pocket.

It could be smarter to establish an emergency fund before paying off existing debt. Any time you consider about how much you need to save back, you have to think about what could expense you a lot of cash. This could be a medical challenge or perhaps something like a vehicle or home fix that should be completed.

If married, make certain the partner using the far better credit applies for loans. In case you have poor credit, take the time to build it using a credit card that you spend off on a regular basis. When your credit score improves, it is possible to begin to apply for joint loans and share the debt together with your spouse.

The way to get income and be wealthy is usually to spend less than what is coming in. Individuals who invest each dollar they earn or take out loans to cover their spending are unlikely to amass substantially wealth, as their revenue flies out of their pocket the instant it arrives. The golden rule will be to spend much less than what you earn.

In conclusion, some men and women do not possess a grip on their financial scenario. But, you’ll in no way be a part of this group of men and women because you have got info by means of the article written above. Use these ideas to much better control finances and to reside a bit much more relaxed.

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Netflix May Be Getting Too Customer-Friendly

In 2011, when Netflix (NASDAQ: NFLX  ) split its DVD-by-mail and streaming businesses (effectively raising prices by as much as $6 per month), the company precipitated a storm of customer outrage. Netflix's plan to spin off the DVD business as "Qwikster" was eventually abandoned, but the damage was done. While the streaming business has recovered, Netflix's DVD-by-mail service has shrunk to just over 8 million subscribers as of last quarter, down from 14 million at the time of the split.

In reaction to this blunder, Netflix has renewed its emphasis on maintaining customer-friendly policies. However, while it's important to keep customers satisfied, Netflix has taken this goal to the extreme, as exemplified by the recent "bulk release" of the company's flagship original series, House of Cards. By releasing all 13 episodes at once, Netflix may have made its customers happy at the expense of profitability. If Netflix continues this policy for its other original series debuting later this year, shareholders could be in for a nasty surprise.

Building loyalty?
Netflix's biggest challenge at present is that competitors have been growing their streaming offerings recently, and none faster than Amazon.com (NASDAQ: AMZN  ) . Amazon has picked up a number of high-profile shows for its Prime Instant Video service in recent months, many of which were previously available on Netflix. With Amazon rapidly increasing its offerings, charging less ($79 per year or $39 for students, versus $96 for Netflix), and throwing in free two-day shipping on physical purchases, Netflix needs a "differentiator" to keep subscribers on board.

Indeed, Bank of America analysts recently estimated that Netflix loses 5% to 6% of its subscriber base every month. The main justification for Netflix's expansion into original content with series like House of Cards is to increase subscriber loyalty and reduce so-called "churn." High churn becomes a bigger worry the larger Netflix's subscriber base becomes. With around 20 million paid domestic subscribers at the end of 2011, Netflix needed to add at least 1 million subscribers per month just to stand still. However, if the membership base doubles to 40 million, Netflix would have to add 2 million subscribers per month to offset churn.

By offering original shows that are not available elsewhere, Netflix aims to mimic Time Warner's (NYSE: TWX  ) success with HBO. (A Netflix spokesman recently stated, "Part of our goal is to become like HBO faster than HBO can become Netflix.") HBO has built a worldwide subscriber base of 114 million households by offering a combination of second-run movies and original TV shows. While HBO still experiences significant churn of approximately 3% monthly, reducing churn to that level would be a big win for Netflix and could help the company maintain its domestic growth for a longer period of time.

Binge-viewers wanted
Unfortunately, Netflix's decision to release all 13 episodes of House of Cards on Feb. 1 did not support the ultimate business goal of reducing churn. Netflix CEO Reed Hastings has said that customers want the convenience of being able to watch shows at their own pace. In particular, Netflix is catering to the desires of "binge-viewers," who want to watch the whole series at once. However, in trying to be customer-friendly, Hastings gave customers the ability to watch the whole series within a single month -- �and thus pay for only a month of Netflix service.

Since customers who want to see House of Cards can watch the full season in one month and then cancel, the series will not have much of an independent impact on churn. By contrast, if episodes were released one at a time over the course of several months, Netflix could expect fans of the show to keep the service for at least those months. In releasing all the episodes at once, Netflix is gambling that the show will attract new members, who will then find other content they enjoy and decide to keep the Netflix service. To put it a different way, if subscribers pay for one month of service to binge-view the full season of House of Cards, Netflix would need to attract more than 6 million additional viewers to meet Season 1's $50 million production cost.

Giving away the store
Moreover, not all viewers are actually paying. While I applaud Netflix's decision to make the first episode of House of Cards available for free to "hook" people, the company's policy of offering free one-month trials for all new users will allow many people to watch the full season for free. Additionally, Netflix has been aggressively courting former members with free "trials" for returning members. (As a former Netflix member, I received at least four emails last fall offering me a free month if I rejoined the service. I got my free month, enjoyed House of Cards and other content, and then canceled.) In the short term, Netflix may boost its subscriber numbers this way, but the company is not maximizing the value of its investments in original content.

Conclusion
In short, Netflix's business model seems flawed. The company spent too much for the rights to House of Cards to give the show away for free (or at most, $7.99) to binge viewers. If original content is meant to reduce churn, it needs to be released in a "serial" manner that forces viewers to keep the service. That might seem less customer-friendly, but it would better ensure Netflix's long-term health.

Can Netflix fend off its growing competition, and will its international growth aspirations really pay off? These are must-know issues for investors, which is why we've released a brand-new premium report on Netflix. Inside, you'll learn about the key opportunities and risks facing the company, as well as reasons to buy or sell the stock. We're also offering a full year of updates as key news hits, so make sure to click here and claim a copy today.

Could Sony Disappear?

Sony (SNE) now has less cash than a quarter's sales.

Compare that with Microsoft (MSFT) which could get by for three quarters on its cash, if sales fell to zero. Or Cisco (CSCO), which could live for a year on its cash and short-term investments.

Technology companies keep a lot of cash and investments for a reason, to tide them over in bad times, and to fuel turnaround strategies. When the cash starts to run out, however, that's a clear sign that we're no longer talking about a turnaround.

And Sony is a lot closer to living on cash fumes than you might imagine. The company hasn't made an annual profit since George W. Bush was President. It no longer even has operating margins.

In Japan the stock is now trading at under 1,000 yen/share, which is $12.65 for the U.S. ADR. Kazuo Hirai's turnaround plan for the company has yet to show any results.

Sony is stuck in a TV business whose margins are wafer-thin on good days, and whose flat panel displays don't have to be replaced every few years the way CRTs do. Its PS3 line of video game machines now trail both Nintendo and Microsoft Xbox in total market share, and Hirai's big success was in that area.

I wrote in April that Sony might sell its movie and TV studio and that studio is still doing well, trailing only Disney's BuenaVista in box office market share so far this year. But even the studio is sort of running on fumes - two of its biggest hits are remakes of a TV show (21 Jump Street) and an earlier hit (Men in Black III).

There is a point in the life of every technology company's lifecycle where you go from turnaround mode to survival mode. At that point it's usually too late to do much of anything. The TV business is going to draw Sony under unless it makes a really, really big move, and soon. But there is nothing in its corporate culture or history to indicate the company can do that.

Oh, and what would I do? Find a way to spin-out the Sony brand name to a Chinese company, sell the studio, and put everything on innovating in video games, which is where CEO Hirai made his reputation.

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