Another Hedge Fund Exits; J.C. Penney Down Another Day

J.C. Penney (JCP) is having a really bad week. For the second straight session, the troubled department store stock fell sharply, dropping almost 9% today to $8.81on reports that another hedge fund manager has exited the stock.

Hayman Capital Management's Kyle Bass told Bloomberg Television today that his hedge fund has sold its stake in J.C. Penney's stock, but still holds the company's debt. Read here for the full report, or watch the interview here.

Hayman Capital disclosed in September holding 11.4 million shares, or a 5.2% stake and by the end of the month had cut that position in half following a dilutive share offering intended to help J.C. Penney raise cash for a turnaround.

Hedge fund manager Bill Ackman sold his J.C. Penney stock in August. And Perry Capital has reduced its stake by half.

Former CEO Ron Johnson has been blamed for alienating shoppers by changing prices and merchandise. The current CEO Mike Ullman is trying to reverse the retailer's fortunes by returning to old brands and strategies.

Wednesday, J.C. Penney's stock fell 10% after investors were disappointed by the company's report that same-store sales rose 10.1% in the November. Analysts argued that sales should have climbed higher given the company's terrible performance last year.

Maxim Group analyst Rick Snyder wrote:

While a 10.1% increase is impressive, it may not be enough. Should J. C. Penney report a 10.0% comp for the entire quarter sales would still be 24.3% below Q4 2011 sales.  At this level, we estimate SG&A would delever by approximately 400 bp from Q4 of 2011. The deleverage is despite SG&A being an estimated $200 million below Q4 2011 levels. We would be more “excited” about traffic if the press release said it was up… We do not believe that any turnaround at J. C. Penney can be achieved without increased traffic….We will be watching sequential traffic with much interest in the future.

Best Energy Stocks To Buy Right Now

LINN Energy (NASDAQ: LINE  ) had a "wait and see until we finish our Berry Petroleum (NYSE: BRY  ) acquisition" kind of quarter. While overall production jumped a very healthy 69% over last year, it just didn't quite meet what the company expected. Weather was part of the problem, but much of the company's woes came in one place: Texas. Does LINN have a problem with Texas' tea? Let's take a look at these pieces of bad news and see if the problems lie with LINN or the Lone Star State.�

Permian all plugged up
Although the news that takeaway capacity isn't quite up to snuff for many of the producing regions in the U.S., the Permian in particular has been suffering despite the region only producing at half the rate of its peak production back in 1973. LINN, and its operating arm LinnCo (NASDAQ: LNCO  ) , stated that it has reduced the amount of rigs it has working in the region and has focused on the western side of the basin because of stronger infrastructure there.�

Best Energy Stocks To Buy Right Now: Hi Crush Partners LP (HCLP)

Hi Crush Partners LP, formerly Hi-Crush Partners LP, is a domestic producer of monocrystalline sand, a specialized mineral that is used as a proppant to enhance the recovery rates of hydrocarbons from oil and natural gas wells. The Company reserves consist of Northern White sand, a resource existing in Wisconsin and limited portions of the upper Midwest region of the United States. It owns, operates and develops sand reserves and related excavation and processing facilities and will seek to acquire or develop additional facilities. The Company's 561-acre facility with integrated rail infrastructure, located near Wyeville, Wisconsin, enables it to process and deliver approximately 1,600,000 tons of frac sand per year. In June 2013, Hi Crush Partners LP announced the completion of its acquisition of D&I Silica, LLC (D&I).

The Company�� frac sand production is sold to investment grade-rated pressure pumping service providers under long-term, contracts that require its customers to pay a specified price for a specified volume of frac sand each month. The Company owns and operates the Wyeville facility, which is located in Monroe County, Wisconsin and, as of December 31, 2011, contained 48.4 million tons of proven recoverable sand reserves of mesh sizes it has contracted to sell. From the Wyeville in-service date to March 31, 2012, it had processed and sold 555,250 tons of frac sand.

Advisors' Opinion:

• [By Rick Munarriz]

  Tuesday
  Hi-Crush Partners (NYSE: HCLP  ) checks in on Tuesday. This is another high-yielding limited partnership that went public last year. Hi-Crush is a producer of monocrystalline sand that's primarily used in the fracking process.

• [By Robert Rapier]

  Hi-Crush Partners (NYSE: HCLP) was the year’s best-performing energy MLP with a rally of 130 percent. HCLP is a pure-play supplier of monocrystalline sand that is used as a proppant to enhance the recovery rates of hydrocarbons from oil and natural gas wells that have been hydraulically fractured. Its reserves consist of Northern white sand, predominantly found in Wisconsin and portions of the upper Midwest region of the US. At the most recent closing price, the annualized yield based on the the last quarterly distribution is 4.9 percent.

Best Energy Stocks To Buy Right Now: Magnum Hunter Resources Corp (MHR)

Magnum Hunter Resources Corporation (Magnum Hunter), incorporated in June 1997, is an independent oil and gas company engaged in the exploration for and the exploitation, acquisition, development and production of crude oil, natural gas and natural gas liquids, primarily in the states of West Virginia, Ohio, Texas, Kentucky and North Dakota and in Saskatchewan, Canada. The Company is also engaged in midstream operations, including the gathering of natural gas through its ownership and operation of a gas gathering system in West Virginia and Ohio, named as its Eureka Hunter Pipeline System. The Company�� portfolio includes Marcellus/Utica Shales in West Virginia and Ohio, the Eagle Ford Shale in south Texas, and the Williston Basin/Bakken Shale in North Dakota and Saskatchewan, Canada. As of December 31, 2011, its proved reserves were 44.9 million barrels of oil equivalent and were approximately 48% oil. In August 2012, the Company closed on the acquisition of 1,885 net mineral acres located in Atascosa County, Texas. With this acquisition, the Company has approximately 7,278 gross acres and 5,212 net acres located in Atascosa County, Texas.

On May 3, 2011, it acquired NuLoch Resources Inc. In April 2011, Triad Hunter, its wholly owned subsidiary, acquired certain Marcellus Shale oil and gas properties located in Wetzel County, West Virginia. On April 13, 2011, it acquired NGAS Resources, Inc. In February 2012, Triad Hunter acquired leasehold mineral interests located primarily in Noble County, Ohio.

Eagle Ford Shale Properties

Eagle Ford Shale is located in Gonzales, Lavaca, Atascosa and Fayette Counties, Texas. The Eagle Ford Shale properties are held primarily by its wholly owned subsidiary, Eagle Ford Hunter, Inc. As of February 27, 2012, the Company�� Eagle Ford Shale properties included approximately 54,000 gross (24,000 net) acres primarily targeting the Eagle Ford Shale oil window, principally in Gonzales and Lavaca Counties, Texas. As of December 31! , 2011, proved reserves attributable to the Eagle Ford Shale properties were 5.4 million barrels of oil equivalent, of which 94% were oil and 24% were classified as proved developed producing, and 5.4 million barrels of oil equivalent. As of February 27, 2012, its Eagle Ford Shale properties included 18 gross (10 net) productive wells, of which it operated 14.

Williston Basin Properties

The Williston Basin is spread across North Dakota, Montana and parts of southern Canada. The basin produces oil and natural gas from a range of producing horizons, including the Madison, Bakken, Three Forks/Sanish and Red River formations. As of February 27, 2012, the Company�� Williston Basin properties included approximately 413,003 gross (122,561 net) acres. As of December 31, 2011, proved reserves attributable to the Williston Basin properties were 8.9 million barrels of oil equivalent, of which 94% were oil and 42% were classified as proved developed producing, and 8.8 million barrels of oil equivalent. As of February 27, 2012, the Williston Basin properties included approximately 288 gross (98.9 net) productive wells.

The Williston Hunter United States property acreage is located in Divide and Burke Counties, North Dakota, with its primary production from the Bakken Shale and Three Forks/Sanish formations. As of February 27, 2012, its Williston Hunter United States properties included approximately 36,355 net acres in the Williston Basin in North Dakota. As of February 27, 2012, the Williston Hunter United States properties included approximately 105 gross (9.5 net) productive wells. The Company�� Williston Hunter Canada property is located primarily in Enchant, near Vauxhall, Alberta, Canada, at Balsam near Grande Prairie, Alberta, Canada and at Tableland, near Estevan, Saskatchewan, Canada. As of February 27 2012, the Williston Hunter Canada properties included approximately 107,270 gross acres (79,693 net acres). At December 31, 2011, the Williston Hunter Canada prope! rties inc! luded approximately 65 gross productive wells. As of December 31, 2011, Williston Hunter Canada had 41,797 gross (32,944 net) acres of land that is prospective for Bakken and Three Forks/Sanish oil in the Tableland field. The Enchant property consists of 10,720 acres. As of December 31, 2011, 48 wells (44.1 net) were producing on this acreage. As of December 31, 2011, the Company owned approximately 43% average interest in 15 fields located in the Williston Basin in North Dakota consisting of 151 wells, and approximately 15,000 gross (6,450 net) acres.

Appalachian Basin Properties

The properties acquired in the NGAS acquisition are held by its wholly owned subsidiary, Magnum Hunter Production, Inc. As of February 27, 2012, its Appalachian Basin properties included a total of approximately 484,412 gross (412,323 net) acres, located primarily in the Marcellus Shale, Utica Shale and southern Appalachian Basin. At December 31, 2011, proved reserves attributable to its Appalachian Basin properties were 29.9 million barrels of oil equivalent, of which 27% were oil and 59% were classified as proved developed producing, and 30.2 million barrels of oil equivalent. As of February 27, 2012, the Appalachian Basin properties included approximately 3,112 gross (2,257 net) productive wells, of which we operated approximately 88%.

As of February 27, 2012, it had approximately 58,426 net acres in the Marcellus Shale area of West Virginia and Ohio. The Company�� Marcellus Shale property is located principally in Tyler, Pleasants, Doddridge, Wetzel and Lewis Counties, West Virginia and in Washington, Monroe and Noble Counties, Ohio. As of February 27, 2012, the Company operated 33 vertical Marcellus Shale wells and 16 horizontal Marcellus Shale wells. As of February 27, 2012, approximately 63% of its leases in the Marcellus Shale area were held by production.

Other Properties

The Company�� East Chalkley field is located in Cameron Parish, Louisiana.! The fiel! d consists of approximately 714 gross acres (443 net acres). This developmental project is an exploitation of bypassed oil reserves remaining in a natural gas field located at depths between 9,300 and 9,400 feet. As of February 27, 2012, the Company operated the East Chalkley field and owned an approximately 62% working interest and an approximately 42.7% net revenue interest in the field. Other properties of the Company are located in Nacogdoches, Colorado, Lavaca, Bee, Fayette and Wharton Counties, Texas and Desoto Parish, Louisiana. As of February 27, 2012, these properties consisted of an aggregate of approximately 7,050 gross (1,188 net) acres.

Advisors' Opinion:

• [By Matt DiLallo]

  I recently took a deeper look at three important numbers from Magnum Hunter Resources (NYSE: MHR  ) long-delayed annual report. Today, I want to drill down even deeper into the report (which can be accessed�here���link opens a PDF), and look at some areas that investors often overlook when considering an energy stock. In this case, I want to look at the company's "hidden" assets.

• [By Selena Maranjian]

  The biggest new holdings are Diana Shipping�and Newport. Other new holdings of interest include energy concern Magnum Hunter Resources (NYSE: MHR  ) . The stock is has significant short interest, with many concerned about its significant debt and a delay in the filing of its year-end report (which is expected to be filed by the end of June). Meanwhile, the company has been shifting attention from low-priced natural gas toward oil and liquids, and is diversifying across several promising shale fields, such as the Utica.

• [By Eric Volkman]

  Magnum Hunter Resources (NYSE: MHR  ) is officially no longer a presence in certain parts of Texas' massive Eagle Ford Shale play. The company announced it has closed the sale of its stakes in properties located in Gonzales and Lavaca counties to a subsidiary of Penn Virginia (NYSE: PVA  ) .

• [By Dan Caplinger]

  Finally, Magnum Hunter Resources (NYSE: MHR  ) has lost a quarter of its value after disclosing in an SEC filing yesterday that it dismissed PricewaterhouseCoopers as its accounting firm. According to the filing, PricewaterhouseCoopers had identified several issues with the energy company, including certain deficiencies in internal controls. Magnum Hunter offered a remediation plan to address PwC's concerns, but it nevertheless replaced PwC with an accounting firm called BDO USA. Investors have grown accustomed to selling at the first hint of accounting issues, and that's clearly the case with Magnum Hunter today.

Best Warren Buffett Companies To Own For 2014: Euro FX(P)

Ecopetrol S.A. operates as an integrated oil company in Colombia, Peru, Brazil, and the U.S. Gulf Coast. The company engages in the exploration, development, and production of crude oil and natural gas. As of December 31, 2010, its proved reserves of crude oil and natural gas consisted of 1,714.0 million barrels of oil equivalent. The company also transports crude oil, motor fuels, fuel oil, and other refined products, as well as mixture of diesel and palm oil. It owns transportation network consisting of 3,003 kilometers of crude oil pipeline directly, as well as an additional 2,178 kilometers of crude oil pipeline with its business partners; and 3,017 kilometers of multi-purpose pipelines for transportation of refined products from refinery to wholesale distribution points. As of the above date, Ecopetrol S.A. owned 58 stations with a nominal storage capacity of 19 million barrels of crude oil and 6 million barrels of refined products. In addition, the company owns and o perates refineries that produce a range of refined products, including gasoline, diesel, kerosene, jet fuel, aviation fuel, liquefied petroleum gas, sulfur, heavy fuel oils, motor fuels, and petrochemicals, including paraffin waxes, lube base oils, low-density polyethylene, aromatics, asphalts, alkylates, cyclohexane and aliphatic solvents, and refinery grade propylene, as well as provides industrial services to third parties. Further, it markets various refined and feed stock products, including regular and high octane gasoline, diesel fuel, jet fuel, natural gas, and petrochemical products. The company was formerly known as Empresa Colombiana de Petroleos and changed its name to Ecopetrol S.A. in June 2003. Ecopetrol S.A. was founded in 1948 and is based in Bogota, Colombia.

Advisors' Opinion:

• [By Evan Niu, CFA]

  Dominant online music streaming service�Pandora� (NYSE: P  ) recently announced a new "Pandora Premieres" station, which promises to allow users to listen to new albums before they go on sale. That includes both paying subscribers and ad-supported (free) users.

• [By Doug Ehrman]

  Earlier this week, Apple (NASDAQ: AAPL  ) announced the introduction of iTunes Radio, the company's latest foray into the service side of the business. While Apple has historically struggled as a service provider, the streaming music service promises to challenge the dominance of Pandora (NYSE: P  ) . The service will be primarily offered as a free, ad-supported app, but users who want to take advantage of cloud storage for $29 can get an ad-free version. One estimate suggests that at even a small conversion rate, iTunes Radio could generate as much as $1 billion in annual revenue.

Best Energy Stocks To Buy Right Now: Archer Ltd (ARCHER)

Archer Ltd, formerly Seawell Limited is a Bermuda-based global oilfield service company. The Company provides drilling services, such as platform drilling, land drilling, modular rings, directional drilling, drill bits, tubular services, drilling and completion fluids, cementing tools, plugs and packers, underbalanced services, rentals and engineering. It specialises also in well services, such as wireline intervention, specialist intervention, frac valves, wireline logging, integrity diagnostics, imaging, production monitoring, coiled tubing, completion services and fishing. As of January 3, 2012, the Company's organizational structure centered on four geographic and strategic areas: North America (NAM), North Sea (NRS), Latin America (LAM) and Emerging Markets & Technologies (EMT). As of December 31, 2010, it was active through a number of subsidiaries, namely Seawell, Allis-Chalmers Energy, Gray Wireline, Rig Inspection Services and TecWel, among others.

Best Energy Stocks To Buy Right Now: China Petroleum & Chemical Corporation(SNP)

China Petroleum & Chemical Corporation engages in the exploration, development, production, and marketing of crude oil and natural gas properties primarily in China. It operates 16 oil and gas production fields in China. As of December 31, 2010, the company?s estimated proved reserves of crude oil and natural gas consisted of 3,963 million barrels-of-oil equivalent comprising 2,888 million barrels of crude oil and 6,447 billion cubic feet of natural gas. It also engages in the refining of crude oil; marketing and distribution of refined petroleum products; and production and sale of petrochemical products that consist of intermediate petrochemicals, synthetic resins, synthetic fiber monomers and polymers, synthetic fibers, synthetic rubber, and chemical fertilizers, as well as owns and operates oil depots and service stations. The company was founded in 2000 and is based in Beijing, the People?s Republic of China. China Petroleum & Chemical Corporation is a subsidiary of China Petrochemical Corporation.

Advisors' Opinion:

• [By Daniel Inman]

  In Hong Kong, China Petroleum & Chemical Corp. (HK:386) � (SNP) �posted a 20% rise in its third-quarter net profit from a year earlier, helping to lift the company�� stock by 1.7%. PetroChina Co. (HK:857) � (PTR) , however, dropped 0.6% after reporting a 19% increase in net profit over the same period.

Best Energy Stocks To Buy Right Now: Chevron Corporation(CVX)

Chevron Corporation, through its subsidiaries, engages in petroleum, chemicals, mining, power generation, and energy operations worldwide. It operates in two segments, Upstream and Downstream. The Upstream segment involves in the exploration, development, and production of crude oil and natural gas; processing, liquefaction, transportation, and regasification associated with liquefied natural gas; transportation of crude oil through pipelines; and transportation, storage, and marketing of natural gas, as well as holds interest in a gas-to-liquids project. The Downstream segment engages in the refining of crude oil into petroleum products; marketing of crude oil and refined products primarily under the Chevron, Texaco, and Caltex brand names; transportation of crude oil and refined products by pipeline, marine vessel, motor equipment, and rail car; and manufacture and marketing of commodity petrochemicals, plastics for industrial uses, and fuel and lubricant additives. It a lso produces and markets coal and molybdenum; and holds interests in 13 power assets with a total operating capacity of approximately 3,100 megawatts, as well as involves in cash management and debt financing activities, insurance operations, real estate activities, energy services, and alternative fuels and technology business. Chevron Corporation has a joint venture agreement with China National Petroleum Corporation. The company was formerly known as ChevronTexaco Corp. and changed its name to Chevron Corporation in May 2005. Chevron Corporation was founded in 1879 and is based in San Ramon, California.

Advisors' Opinion:

• [By Dan Caplinger]

  Before you conclude that a stock is fundamentally cheap based on its P/E ratio, though, you need to look not just at its current earnings but also at its future prospects. Often, especially with cyclical stocks, you'll find that P/E gives you the exact opposite message that you'd expect. Consider these examples:

  In the energy sector, oil giants ExxonMobil (NYSE: XOM  ) and Chevron (NYSE: CVX  ) both have attractive P/E ratios of around 10. Yet looking forward, analysts don't expect either company to produce a lot of profit growth, as both companies have had to work extremely hard to avoid massive output declines stemming from falling production levels from their respective oil-field assets. As long as Exxon and Chevron can acquire new properties with lucrative prospects, they'll be able to keep revenue up, but it's far from certain whether they'll succeed in finding new discoveries. The cyclical trend is even more apparent in the refining industry. Marathon Petroleum (NYSE: MPC  ) and Phillips 66 (NYSE: PSX  ) have made huge share-price advances over the past year, as extremely wide spreads between crude oil prices in the U.S. and abroad have led to unusually high profits for refined-product sales. Now, though, analysts have increasingly concluded that a combination of rising costs, greater regulation, and narrowing spreads will lead to falling profits, making current P/Es based on trailing earnings artificially low if they turn out to be right. You can find similar trends in other industries as well. Even in the traditionally high-growth tech industry, many sector giants have seen their P/E ratios plunge as earnings growth has slowed to a standstill. Dell (NASDAQ: DELL  ) is one of the most notable of these companies, with explosive growth during the 1990s having given way more recently to the PC bust and concerns about the viability of its business model going forward. Its share price has fall
• [By Tyler Crowe]

  Hawaiians have perpetually been saddled with high gas prices, and it doesn't look like things are going to get any better. Tesoro intends to shut down its facility in the island state, leaving Chevron (NYSE: CVX  ) as the only game in town. That, combined with the high costs to ship crude there, has gas prices well north of $4.00 a gallon. As gasoline prices remain high in Hawaii, don't be surprised if more and more drivers make the switch to alternative fuels�

Best Energy Stocks To Buy Right Now: Gastar Exploration Ltd (GST)

Gastar Exploration Ltd (Gastar) is an independent energy company engaged in the exploration, development and production of natural gas and oil in the United States. The Company�� principal business activities include the identification, acquisition, and subsequent exploration and development of natural gas and oil properties with an emphasis on unconventional reserves, such as shale resource plays. As of December 31, 2011, it is pursuing the development of liquids-rich natural gas in the Marcellus Shale in the Appalachia area of West Virginia and, to a lesser extent, central and southwestern Pennsylvania. The Company also holds prospective acreage in the deep Bossier play in the Hilltop area of East Texas and conduct limited coal bed methane (CBM) development activities within the Powder River Basin of Wyoming and Montana. The Company is a holding company. Advisors' Opinion:

• [By Heather Ingrassia]

  Gastar Agreement: On April 1st it was announced that Gastar Exploration, Ltd. (GST) had entered into a definitive agreement to acquire proven reserves and undeveloped leasehold interests in Kingfisher and Canadian counties of Oklahoma from Chesapeake Energy Corporation, repurchase Chesapeake's common shares of the Company and settle all litigation for $1 million. Although smaller in scope than most of Chesapeake's previous asset-shedding transactions, the agreement with Gastar accomplishes two things. First, is the fact the settlement resolves the legal wrangling both companies were engaged in and as a result Chesapeake walks away with $85 million of the potential $130 million they were suing for. Second, is the fact Chesapeake wipes it hands of acreage, that although producing, may not be producing as much as Chesapeake had once hoped, and therefore was worth much more to Gastar in the long run.

Best Energy Stocks To Buy Right Now: Occidental Petroleum Corporation(OXY)

Occidental Petroleum Corporation, together with its subsidiaries, operates as an oil and gas exploration and production company primarily in the United States. The company operates in three segments: Oil and Gas; Chemical; and Midstream, Marketing, and Other. The Oil and Gas segment explores for, develops, produces, and markets crude oil, natural gas liquids, and condensate and natural gas. Its domestic oil and gas operations are located in Texas, New Mexico, California, Kansas, Oklahoma, Utah, Colorado, North Dakota, and West Virginia; and international oil and gas operations are located in Bahrain, Bolivia, Colombia, Iraq, Libya, Oman, Qatar, the United Arab Emirates, and Yemen. As of December 31, 2010, this segment had proved reserves of approximately 3,363 million barrels of oil equivalent. The Chemical segment manufactures and markets basic chemicals, including chlorine, caustic soda, chlorinated organics, potassium chemicals, and ethylene dichloride products; vinyls, such as vinyl chloride monomer and polyvinyl chloride; and other chemicals comprising chlorinated isocyanurates, resorcinol, sodium silicates, and calcium chloride products. The Midstream, Marketing, and Other segment gathers, treats, processes, transports, stores, purchases, and markets crude oil that includes natural gas liquids and condensate, as well as natural gas and carbon dioxide. This segment also involves in the power generation; and trades around its assets comprising pipelines and storage capacity, as well as oil and gas, other commodities, and commodity-related securities. Occidental Petroleum Corporation was founded in 1920 and is based in Los Angeles, California.

Advisors' Opinion:

• [By Tyler Crowe]

  Based on the results from other Permian producers, this might be more of a LINN problem. Occidental Petroleum (NYSE: OXY  ) , the largest producer in the Permian, recently reported that it was able to grow its Permian production by 10,000 barrels of oil equivalent per day year over year. �

• [By Alex Planes]

  Investors love stocks that consistently beat the Street without getting ahead of their fundamentals and risking a meltdown. The best stocks offer sustainable market-beating gains, with robust and improving financial metrics that support strong price growth. Does Occidental Petroleum (NYSE: OXY  ) fit the bill? Let's take a look at what its recent results tell us about its potential for future gains.

• [By Dan Caplinger]

  6. Texas
  Texas imposes taxes on the poor equal to 12.6% of their income, compared with just 3.2% in tax on its wealthiest taxpayers. Like many of the states on this list, Texas doesn't have an income tax, relying instead on more regressive sales taxes of 6.25% statewide, with an average of 1.89% added on for local taxes. Oil revenue does play a major role in funding state government, with Occidental Petroleum (NYSE: OXY  ) and EOG Resources (NYSE: EOG  ) far outpacing their peers in total oil production during 2012. But that doesn't keep the state from ranking in the top 30% of states for sales-tax collections, hitting the poor especially hard.

A Renaissance in Local TV

Our latest Focus Stock is one of the largest TV broadcast companies in the US. A series of acquisitions over the past two years has more than doubled the number of stations the company owns, as well as its revenue and free cash flow, notes Westcott Rochette of S&P Capital IQ in The Outlook.

Assuming all of its announced mergers are completed (as we anticipate), Maryland-based Sinclair Broadcast Group (SBGI) will soon own or operate some 162 stations in 77 markets that, together, reach about 40% of US television households.

In addition, Sinclair will be the largest affiliate group in terms of stations for the major networks of FOX, CBS, and ABC, and the fourth-largest NBC affiliate.

Sinclair's acquisitions have brought the company a leadership position in the local broadcast industry where we believe fundamentals are improving markedly.

Strategic and investor interest in local TV operators has increased materially in recent years, reviving a seemingly sleepy industry thought to be fairly mature.

There has been a renaissance of sorts in local television over the last two years, with both market activity, and valuation expansion, expanding materially in 2013.

In a changing advertising landscape, TV remains an effective medium to reach a broad audience and still garners its share of advertising dollars.

Local TV specifically, is one of the few avenues to reach a hyper-local audience, where the message can be tailored to fit a specific market.

Retransmission fees—the fees paid by cable and satellite TV providers to include local broadcast signals—are rapidly becoming a meaningful part of the earnings stream.

Also, the huge ramp of political advertising spending tends to filter through local TV broadcasts. It is the most effective way to reach low-interest voters, in our view.

The 2014 mid-term elections are setting up to be another contentious political season, with control of both the House and Senate up for grabs.

In addition, 2016 appears poised to greatly exceed the 2012 spending records, with two open primaries, and Republicans and Democrats vying for the White House.

We believe Sinclair is poised to embark on the next leg of its evolution, as it shifts from rapid consolidation mode to integration and execution.

In our opinion, investor appreciation of the longer-term margin and revenue opportunities stemming from its stronger distribution platform and geographic reach, will support another round of multiple expansion and share price appreciation.

Sinclair Broadcast Group carries S&P Capital IQ's highest investment recommendation of 5-Stars or strong buy. Our 12-month target price is $40 per share.

Subscribe to S&P's The Outlook here…

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Tech Trifecta: Amazon, Microsoft, Zynga Surge After Quarterly Results

Tech stocks are in vogue on Friday.

Shares of three high-profile tech companies — Amazon.com Inc.(AMZN), Microsoft Corp.(MSFT) and Zynga Inc.(ZNGA) — are surging on the heels of their respective quarterly results.

They’re also giving a boost to the Nasdaq Composite, which is up 0.3% at 3941. The tech-heavy index is up 30% this year and is outpacing both the Dow Jones Industrial Average and the S&P 500.

Here’s a breakdown of what’s driving the results and stock performance for Amazon, Microsoft and Zynga.

AMAZON

The online retailer once again continued its logic-defying run in the stock market by reporting another quarterly loss — its third this year — that was largely overlooked by Wall Street. Instead, investors fixated on Amazon’s 24% increase in revenue, which exceeded analysts’ expectations and bodes well for the company heading into the holiday season, the most important quarter of the year.

Analysts pointed to Amazon’s strong sales growth and the fact that Amazon touted it added “millions” of new paying Prime members over the past 90 days. Such a trend is “a positive indicator of long-term purchase volumes, as AMZN said its Prime customers have very strong retention and do more cross-shopping,” says Brian Nowak, an analyst at Susquehanna. “In effect, Amazon is adding more higher lifetime value customers…which will lead to larger market share and earnings power.”

Share surged 10% to $365.30. The stock is up 46% this year.

MICROSOFT

Amid an environment of struggling enterprise sales, Microsoft bucked the trend. The software giant notched a double-digit percentage jump in both revenue and profit, driven by robust sales to businesses.

“Upside to results was in contrast to Street apprehensions for a possible miss and a more likely guide lower,” says Rick Sherlund, an analyst at Nomura Securities. “While still not a great quarter, it was a surprise to the Street and any upside is good news when the set-up is so cautious.”

Shares jumped 6.5% to $35.91. The stock is up 34% year-to-date and is hovering near its highest level of the year.

ZYNGA

The social-game maker’s third-quarter loss narrowed from a year earlier as expenses dropped significantly. Shares jumped as the results beat expectations.

But the underlying problems plaguing Zynga still remain. The company’s daily active users dropped to 30 million in the third quarter, down from 39 million a quarter earlier and 60 million a year ago. Bookings, or the actual value of virtual goods Zynga sells in games, tumbled 40% to $152.1 million.

Zynga has taken steps to address these issues. Earlier this year the company announced it would cut 18% of its staff and close some offices to help reduce expenses.

“Incrementally positive monetization trends emerged in Q3, including healthy advertising [average revenue per user] growth, but we prefer to take a wait-and-see approach as the company positions for a potential 2014 recovery,” says Michael Olson, an analyst at PiperJaffray.

Shares rose 13% and jumped above $4 for the first time this year. The stock still remains well below its $10 IPO price in December 2011.

Vernon Davis Follows Arian Foster in Fantex NFL Player IPO, Risks Abound

Contemplating the possibility of an initial public offering for a professional athlete may seem more than a bit strange. A site named Fantex is potentially changing the way that athletes can monetize current and future royalties on income from their league salaries, product endorsements, and the like. It has been known for some time that NFL player Arian Foster of the Houston Texans has been involved in an initial public offering. Now there is word that the 49ers tight end Vernon Davis has decided to do the same.

An SEC filing this week shows that Vernon Davis become the second NFL player to sell a portion of the his future earnings and royalties to Fantex in exchange for cash now. Fantex is actually Fantex Brokerage Services. They show that the IPOs are real money and real dollars are there in convertible tracking stocks of these players. Davis will be paid $4 million up front for 10% of Davis’ salary, endorsements and post-career deals as long as the company can secure financing.

If you want to know how these IPOs will work, here are some stats on the page for Arian Foster. Some 1,550,000 shares are available at $10.00 per share. The royalties tracked include Foster’s player contract with the Texans. Product and apparel endorsements included are from Under Armour, Kroger, ProCamps, Gamebreaker Sports in sports memorabilia, Health Warrior in superfoods, Saatchi and Saatchi for auto commercials, Pro Player Merch in licensed apparel deals, and First Pick Productions for acting and performance fees. There are many excluded contracts as well.

While an initial public offering may be considered unique, it is not entirely the first time that celebrities have securitized future royalties for cash up front. Rock legend David Bowie sold music rights raising some $55 million back in the 1990s. Royalty Exchange has sold music royalty streams for various musicians, and royalties of past works have been big business for libraries of The Beatles, Elvis, Michael Jackson, Kurt Cobain, and many others. Future winnings for horses have even been securitized before.

What we have wondered about in looking at these tracking stocks is that having them as tracking stocks is a harder sell than buying royalties directly. In the Arian Foster deal it is roughly $10 million for 20% of a set of royalties that does not necessarily include every aspect of his future earnings. Simple math dictates that this comes to just over $50 million in player pay and specified royalties just as a breakeven, and that is before taking into consideration any discounting of the cash flows and considering that it is a tracking stock rather than the formal royalty stream.

The Arian Foster Fantex SEC Filing is here, and the risk factors are certainly unique. Here is what we would point out in the convertible tracking stock risks:

“Fantex Arian Foster is intended to track and reflect the separate economic performance of the brand contract that Fantex, Inc. has entered into with Arian Foster. However, holders of shares of Fantex Arian Foster will have no direct investment in that brand contract, associated brand, Arian Foster or Vernon Davis. Rather, an investment in Fantex Arian Foster would represent an ownership interest in Fantex, Inc. as a whole, which will expose holders to additional risks associated with any other tracking stock that Fantex, Inc. may establish and issue in the future.”

As with any investment, caveat emptor! We would double up on that warning in the mysterious case of human IPOs that are tracking stocks of professional athletes.

Amid Sobs, Beanie Babies Creator Pleads Guilty to Tax Evasion

Kevin Horan, Time Life Pictures/Getty ImagesBeanie Babies creator H. Ty Warner CHICAGO -- The billionaire who created Beanie Babies has pleaded guilty to a tax evasion charge that could send him to prison for years. H. Ty Warner broke down crying in court and apologized as he entered his plea Wednesday. Then, he removed his designer tortoise-shell glasses and sought to regain his composure before a federal judge in Chicago. He said he knew he had much to be thankful for, mentioning his successful stuffed-toys company, He added, "There's no excuse for my actions." Judge Charles Kocoras stopped Warner and told him "there will be time for you to bare your soul" at his Jan. 15 sentencing. The 69-year-old admitted he failed to pay around $5 million in taxes due over 11 years. Tax evasion carries a maximum five-year prison term.

Former star Wedbush Securities broker wins $4.2 million award against firm

A former star Wedbush Securities Inc. broker Wednesday won a stunning $4.2 million arbitration award against his old firm in a case that dated back to sales of risky collateralized mortgage obligations before the credit crisis.

At the heart of the claim by former Wedbush broker Michael Farah is the allegation that “Wedbush made misrepresentations and omitted material facts in connection with the collateralized-mortgage-obligation investments that he recommended to his clients, causing Farah to lose clients and annual income,” according to the award, which was issued yesterday by a three-person Financial Industry Regulatory Authority Inc. panel.

“We wholeheartedly disagree with the ruling and are currently reviewing our options,” Wesley Long, executive vice president and head of private-client services for Wedbush Securities, wrote in an e-mailed statement to InvestmentNews.

The case pitting Mr. Farah against Wedbush Securities, formerly known as Wedbush Morgan Securities Inc., has been years in the making. Mr. Farah filed his initial claim against Wedbush Securities in 2005 and an amended claim in 2012.

The panel broke the award into several parts, including $1.3 million to Mr. Farah from Wedbush for loss of income and $1.4 million in punitive damages. The award also included $1.5 million to Mr. Farah in legal fees in this claim and other arbitration proceedings.

It was the second significant, million-dollar arbitration award to a former Wedbush Securities employee in as many years. In 2011, a Finra arbitration panel awarded an ex Wedbush municipal sale trader $3.5 million for failing to give him years' worth of incentive-based compensation. In that award, the Finra panel cited the firm's “morally reprehensible failure and refusal to compensate.”

Punitive-damage awards are highly unusual in most Finra arbitration awards, which typically pit a broker-dealer against a disgruntled client. Such damages are even more unusual in a Finra arbitration claim involving a former star broker against a broker-dealer, said Philip Aidikoff, Mr. Farah's attorney.

Mr. Farah was with Wedbush Securities from 1995 to 2005. He now runs a registered investment adviser.

He was the “longtime No. 1 producer at the firm,” Mr. Aidikoff said, adding that Mr. Farah counted such institutions as the Sisters of Saint Joseph in Los Angeles among his clients.

Mr. Aidikoff said that Mr. Farah realized there were problems with the CMOs in 2003.

“He sold a lot [of the CMOs], in the millions,” Mr. Aidikoff said. “He was told they were a replacement for bonds. In January 2003, the price [of the CMOs] started dropping, and that was inconsistent with what bond desk told him about the volatility.”

Morgan Stanley Starts Coverage on Deere & Company with “Underweight” Rating (DE)

On Thursday, Morgan Stanley reported that it has begun coverage on agriculture company Deere & Company (DE).

The firm has initiated coverage on DE with an “Underweight” rating and $72 price target. This price target suggests a 14% decline from the stock’s current price of $83.63.

Analyst Nicole DeBlase noted, "we forecast 8% downside to 2014e consensus, as we are concerned about recent deterioration in the used equipment market, augmented by a negative margin mix shift, as evidenced by our proprietary survey work. Our $72 PT implies 14% downside, and we project a 2-to-1 negative risk/reward ratio."

Deere & Company shares were down 98 cents, or 1.16%, during Thursday morning trading. The stock has been mostly flat YTD.

Top 10 Clean Energy Stocks To Invest In 2014

Last week, the Potential Gas Committee released a new report that estimates the potential natural gas resources available in the U.S. at 2,384 trillion cubic feet, an eye-popping 26% increase over the group's late 2010 calculation. While reduced natural gas prices have led to such projects as the Clean Energy Fuels (NASDAQ: CLNE  ) America's Natural Gas Highway and Berkshire Hathaway's (NYSE: BRK-A  ) BNSF Railway pilot program to test liquefied natural gas (LNG) locomotives, the price of the commodity has also put downward pressure on natural gas stocks in general ��Chesapeake Energy (NYSE: CHK  ) , for example, is down about 40% over the last two years.

As is the case with most things, the impact on the long-term viability of LNG as a U.S.-based substitute for other energy sources is one of balance. If the right blend of supply and demand can be maintained, natural gas stocks should soar. If supply becomes too plentiful, however, driving down prices too much, companies will have less financial incentive to develop natural gas further. With the explosion of shale-based supply, the impact on natural gas stocks is in its infancy but a critical area for investors to watch.

Top 10 Clean Energy Stocks To Invest In 2014: Bryn Mawr Bank Corporation(BMTC)

Bryn Mawr Bank Corporation operates as the holding company for The Bryn Mawr Trust Company, which provides various commercial and retail banking services. The company accepts demand, time, and savings deposits; and makes commercial, real estate, and consumer loans, as well as other extensions of credit, including leases. It offers wealth management services, such as trust administration and fiduciary, custody, investment management and advisory, employee benefit account and IRA administration, estate settlement, tax, financial planning, and brokerage services. The company also provides casualty, property, and allied insurance, as well as life insurance, annuities, medical insurance, and accident and health insurance for groups and individuals. In addition, it offers title search and abstract services; mortgage services; and equipment leasing services. As of December 31, 2009, the company had nine full service branches and seven life care community offices in Montgomery, De laware, and Chester counties. Bryn Mawr Bank Corporation was founded in 1889 and is headquartered in Bryn Mawr, Pennsylvania.

Top 10 Clean Energy Stocks To Invest In 2014: RIT Technologies Ltd.(RITT)

RiT Technologies Ltd. develops physical layer solutions for the control, utilization, and maintenance of networks. The company provides enterprise solutions to monitor, troubleshoot, and plan the communications networks of datacenters, communication rooms, and workspace environments, as well as to automate provisioning/deployment and asset tracking applications. Its enterprise solutions comprise SMART Cabling System, a structured network infrastructure solution for copper and fiber cabling environments; and PatchView, an intelligent information management system, for gathering connectivity information from networks. The company also offers carrier solutions that provide carriers with network mapping, testing, and bandwidth qualification capabilities. Its carrier solutions consist of PairView, a outside plant management and qualification system; PairQ, a tool for qualifying the ability of a telco?s copper infrastructure to support digital subscriber line services; PairView Pro, a local loop mass verification system that identifies and maps various digital services carried on a telephone line; PairView Sharp, which connects to the copper infrastructure at various points within the local loop; NGPair, a product designed to facilitate street cabinet migration, and automatic main distribution frame and automatic distribution frame installation; PairC, a testing product for copper lines for the service, number, and routing identification of active lines; and PairGuide that collects and analyzes the data sent from the test systems, and updates in the carrier database. The company sells its products through independent distributors, resellers/integrators, original equipment manufacturers, and other strategic alliance partners with cabling companies. It primarily operates in the United States, Europe, Israel, South and Latin America, and the Asia Pacific. The company was founded in 1989 and is headquartered in Tel Aviv, Israel.

Top China Stocks To Buy For 2014: Tyco International Ltd.(Switzerland)

Tyco International Ltd. provides security products and services, fire protection and detection products and services, valves and controls, and other industrial products worldwide. The company?s Tyco Security Solutions segment designs, sells, installs, services, and monitors electronic security, productivity, and lifestyle enhancement systems for residential, commercial, industrial, and governmental customers. This segment also designs, manufactures, and sells security products, including intrusion, security, access control, electronic article surveillance, and video management systems. Its Tyco Fire Protection segment designs, manufactures, sells, installs, and services fire detection and fire suppression systems, and building and life safety products for commercial, industrial, and governmental customers. The company?s Tyco Flow Control segment designs, manufactures, sells, and services valves, pipes, fittings, valve automation, and heat tracing products for general proce ss, energy, and mining markets, as well as the water and wastewater markets. Tyco International Ltd. was founded in 1960 and is based in Schaffhausen, Switzerland.

Top 10 Clean Energy Stocks To Invest In 2014: Group 1 Automotive Inc. (GPI)

Group 1 Automotive, Inc., through its subsidiaries, engages in the marketing and sale of automotive products and services. It sells new and used cars, light trucks, and vehicle parts. The company also provides vehicle financing services; service and insurance contract services; and automotive maintenance and repair services. The company has operations located in metropolitan areas in the states of Alabama, California, Florida, Georgia, Kansas, Louisiana, Maryland, Massachusetts, Mississippi, New Hampshire, New Jersey, New York, Oklahoma, South Carolina, and Texas in the United States; and in the towns of Brighton, Hailsham, and Worthing in the United Kingdom. As of October 25, 2012, it owned and operated 121 automotive dealerships, 158 franchises, and 30 collision centers in the United States and the United Kingdom that offer 32 brands of automobiles. The company was founded in 1995 and is headquartered in Houston, Texas.

Advisors' Opinion:

• [By Ning Jia]

  In 2001, Advance Auto Parts acquires Carport Auto Parts, a regional retail chain with 29 stores in Alabama and Mississippi. The combination of Advance and Carport locations establishes Advance Auto Parts as the market leader in Alabama and Mississippi. In November of 2011, Advance acquires 671 Discount Auto Parts, Inc., a regional auto parts chain in Florida, Alabama, Georgia, South Carolina, and Louisiana. The acquisition strengthens the company's position as the market leader in Florida. Upon completion of this merger, Advance Auto Parts becomes a publicly traded company, listed as a common stock on the New York Stock Exchange under the symbol AAP. After the Company went public in 2001, AAP continued to expand both organically and through acquisition. On October 16th 2013, Advance Auto Parts entered into a definitive agreement to acquire General Parts International, Inc. (GPI), a leading privately held distributor and supplier of original equipment and aftermarket replacement products for commercial markets operating under the CARQUEST and WORLDPAC brands, in an all-cash transaction with an enterprise value of $2.04 billion. The transaction has been approved by the boards of directors for both companies. The deal creates the largest automotive aftermarket parts provider in North America, with annual sales of more than $9.2 billion and more than 70,000 employees.

Top 10 Clean Energy Stocks To Invest In 2014: Apricus Biosciences Inc(APRI)

Apricus Biosciences, Inc. engages in the design and development of pharmaceutical products and product candidates based on its patented NexACT drug delivery technology. The NexACT drug delivery technology is designed to enhance the delivery of an active drug to improve therapeutic outcomes and reduce systemic side effects that accompany existing oral and injectable medications. The company?s pipeline includes Vitaros, approved in Canada for the treatment of erectile dysfunction; and Totect approved in the U.S. for the treatment of anthracycline extravasation, as well as compounds in development from pre-clinical through pre-registration, focused on sexual dysfunction, oncology, dermatology, autoimmune, pain, anti-infectives, diabetes, and consumer healthcare. The company was founded in 1987 and is headquartered in San Diego, California.

Advisors' Opinion:

• [By Jon C. Ogg]

  Apricus Biosciences Inc. (NASDAQ: APRI) was initiated with a Hold rating and a $2 price target at Cantor Fitzgerald. Be advised that $2 is almost 10% under the prior close of $2.18, against a 52-week range of $1.89 to $3.49.

Top 10 Clean Energy Stocks To Invest In 2014: Cereplast Inc.(CERP)

Cereplast, Inc. develops and commercializes bio-based resins primarily in North America, Italy, and Germany. It provides Cereplast Compostables resins, which are substitutes for petroleum-based plastics for single-use disposables and packaging applications. The company also offers Cereplast Sustainables resins, including Cereplast Hybrid resins that replace up to 50% of the petroleum content in conventional plastics with bio-based materials, such as industrial starches sourced from plants for a range of markets comprising automotive, consumer goods, consumer electronics, medical, packaging, and construction, as well as developing Cereplast Algae Plastics to transform algae into bioplastics. Its resins products are also used in various conventional converting processes, such as injection molding, thermoforming, blow film, blow molding, sheet and profile extrusion, extrusion coating, and extruded foam. The company was formerly known as Biocorp North America Inc. and changed its name to Cereplast, Inc. in March 2005. Cereplast, Inc. was incorporated in 2001 and is based in El Segundo, California.

Top 10 Clean Energy Stocks To Invest In 2014: Electrometals Technologies Ltd(EMM.AX)

Electrometals Technologies Limited designs, manufactures, and sells patented EMEW electrowinning equipment for the metals processing industry primarily in Australia and Canada. The company?s EMEW technology is used for the recovery of metals, such as gold, silver, platinum, cadmium, cobalt, copper, nickel, tin, zinc, lead, manganese, and various other metals. It also offers various services that include laboratory and test programs, pilot programs, flowsheet and general process development, feasibility studies, and general mining and industrial metal recovery consulting. The company markets its products directly and through agents and partners. Electrometals Technologies Limited is headquartered in Ashmore, Australia. As of June 1, 2011, Electrometals Technologies Ltd. operates as a subsidiary of Waverton Holdings, Ltd.

Top 10 Clean Energy Stocks To Invest In 2014: HARGREAVES LANSDOWN PLC ORD GBP0.004 WI(HL.L)

Hargreaves Lansdown plc provides independent financial and asset management services to private investors in the United Kingdom. The company?s services include stocks and shares ISA; self invested personal pension; fund and share accounts; multi manager funds; personal equity plans; Vantage, an investment service that gives the tools, information, and help to hold and manage investments comprising unit trusts, OEICs, equities, ETFs, bonds, investment trusts, and cash; anuuities; income drawdown; portfolio management services; currency services; spread betting and CFDs; enterprise investment schemes; and venture capital trusts. It also offers corporate wrap solutions; retirement services; unit trust equity and stock broking; investment fund and unit trust management; life and pensions consultancy; nominee services; and financial planning and advisory services. The company was founded in 1981 and is based in Bristol, the United Kingdom.

Top 10 Clean Energy Stocks To Invest In 2014: National Australia Bank Ltd (NAB.AX)

National Australia Bank Limited provides products, advice and services. In Australia, it operates through National Australia Bank, MLC and UBank. In the United Kingdom, it operates through Clydesdale Bank. In New Zealand, it operates through Bank of New Zealand. In the United States, it operates through Great Western Bank. Segments include Business Banking, Personal Banking, Wholesale Banking, UK Banking and NZ Banking, MLC and NAB and Great Western Ban. As of April 5, 2012, the Company and its associated entities ceased to be a substantial holder in BlueScope Steel Limited. On May 17, 2012, it ceased to be a substantial holder in Spark Infrastructure Group and Sandfire Resources NL. As of August 24, 2012, the Company and its associated entities ceased to be holder in Tabcorp Holdings Limited. In September 2012, the Company and its associated entities have ceased to be a substantial holder in Incitec Pivot Limited, as of August 30, 2012.

Top 10 Clean Energy Stocks To Invest In 2014: Convio Inc.(CNVO)

Convio, Inc. provides on-demand constituent engagement solutions that enable nonprofit organizations (NPOs) to raise funds, advocate for change, and cultivate relationships with donors, activists, volunteers, alumni, and other constituents in North America. Its integrated solutions include Convio Online Marketing (COM) platform, and Convio Common Ground CRM, a constituent relationship management application. The COM platform enables NPOs to harness the potential of the Internet and social media as new channels for constituent engagement and fundraising. The Common Ground delivers next-generation donor management capabilities, and integrates marketing activities across online and offline channels. The company also offers Convio Open, an open platform that allows NPOs to evolve their online marketing strategies; and Convio Go!, a structured program consisting of selected COM modules and specialized cohort-based services designed for mid-market NPOs new to online marketing an d fundraising. Convio, Inc.?s software enables its clients and partners to customize and extend its functionality. In addition, it provides account management, technical support, and deployment services, as well as strategic planning, campaign management, Web design, data analytics, benchmarking, campaign analytics, data integration, training, data warehousing, business intelligence, analytics/modeling, strategic consultation, and marketing execution services. The company sells its solutions through a direct sales force, as well as through a network of partners, including interactive agencies, direct marketing agencies, public affairs firms, and complementary technology companies. Convio, Inc. serves approximately 1,400 NPO clients, including charities. The company?s clients deliver approximately 4 billion emails to 140 million email addresses to accomplish their missions. Convio, Inc. was founded in 1999 and is headquartered in Austin, Texas.

Tax-free infra bonds kick in: should you invest?

With the year coming to an end, it is time to invest for saving your income tax. And companies leave no stone unturned to seize this opportunity to raise funds through tax-saving long term infrastructure bonds. Currently, Infrastructure Development Finance Company (IDFC) and L&T Infrastructure Finance, both engaged into infra lending business, are running two retail issues offering 9% rate of interest per annum.

Bond issues at a glance:

Company	Ratings	Interest rate
IDFC	AAA	9%
L&T Infra	AA+	9%
PFC	AAA	8.50-8.75%*
IFCI	AA- & A	8.50-8.75%*

 

 

 

 

*Issues already closed

 

What are long term infrastructure bonds?

These are debt instruments wherein an investment upto Rs 20,000 is eligible for individual income tax benefits under section 80CCF. This is over and above the normal limit of Rs 1 lakh investments. 

Should you invest?

Experts across the board recommend it as a prudent investment. However, you should keep in mind certain key factors while investing.

�Do not just invest for the sake of tax saving only,� Sumeet Vaid, CEO and founder, Freedom Financial Planners, a Mumbai based advisory firm.

�Tax is a temporary objective. Think of your long term goals for five to ten years. In this instrument, you should invest only a portion, maybe 50%,  of your total debt allocations in the entire investment portfolio.�

Issuers generally set a maturity period of ten years for their infra bonds. However, those carry a lock-in period of five years. After that, investors can exercise the put option wherein the issuer will buy buck bonds from them at par.

Moreover, investors can also sell those bonds in the secondary market as bonds get listed in the stock exchange(s) � BSE and NSE.

Is liquidity a concern?
 
�Liquidity is an issue for infra bonds when they are traded in the secondary market,� Arvind Konar, head � fixed income, Almondz Global Securities told Moneycontrol.com.

�Traders hardly take any interest to trade bonds with a tiny amount of Rs 20,000. Investors should exercise the put option if any other company offers higher interest after five years. However, they should hold it till maturity in case of any fresh offering with lower rates.�

Advisors agreed to the fact that investors should not seek liquidity from a tax-saving instrument. Rather, a set of liquid instruments like stocks and different mutual fund schemes are available in the market.

Rating or brand?

While IDFC issue carries AAA rating by rating agencies, L&T Infra issue is awarded with AA+ rating. This however, would not necessarily be a major trigger for your investment decision.

�If there is a huge difference in ratings, then only, you take a call based on that. However, any slight variation in ratings would not matter. If you have trust in any particular brand, you stick to that brand only, irrespective any rating,� Amar Pandit, director, My Financial Advisor, adding that technically, a higher rating makes a case for better investment.

Interest payment mode: annual or cumulative?

Go for cumulative interest payment! In case of annual interest income, according to Konar, the reinvestment options are limited. It is always better to avail the power of compounding interest.

More such bond issues are expected in the coming two months. In case of long term infra bonds, a company cannot offer any interest rate that is higher than the yield of 10-year government bonds, pegged at 30 days prior to the launch. Roughly, here an investment of Rs 20,000 will fetch tax exemptions anything between Rs 6,200 and Rs 2,000 depending on tenure and income tax slabs (including 30.90%, 20.60% and 10.30%).

saikat.das@network18online.com

 

Is Micron Technology A Risky Investment?

With shares of Micron Technology (NASDAQ:MU) trading around $9, is MU an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

Micron Technology is a global manufacturer and marketer of semiconductor devices, packaging solutions, and semiconductor systems for use in computing, consumer, networking, automotive, industrial, embedded and mobile products. The company operates in four segments: NAND Solutions Group, DRAM Solutions Group, Wireless Solutions Group and Embedded Solutions Group. Micron Technology's products include: NAND Flash Memory, Dynamic Random Access Memory and NOR Flash Memory. Through its segments, Micron Technology is able to provide important components for technology products exisiting in various industries. As these industries continue to expand worldwide, Micron Technology is poised to see rising profits well into the future.

NEW! Discover a new stock idea each week for less than the cost of 1 trade. CLICK HERE for your Weekly Stock Cheat Sheets NOW!

T = Technicals on the Stock Chart are Strong

Micron Technology stock has suffered in recent years but seems to have found value between the in the single digit price range. The stock has bounced off of the lower end of its established range with conviction so it may be getting ready to break higher. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, Micron Technology is trading above its rising key averages which signal neutral to bullish price action in the near-term.

(Source: Thinkorswim)

Taking a look at the implied volatility (red) and implied volatility skew levels of Micron Technology options may help determine if investors are bullish, neutral, or bearish.

	Implied Volatility (IV)	30-Day IV Percentile	90-Day IV Percentile
Micron Technology Options	50.6%	73%	72%

What does this mean? This means that investors or traders are buying a significant amount of call and put options contracts, as compared to the last 30 and 90 trading days.

	Put IV Skew	Call IV Skew
May Options	Average	Average
June Options	Average	Average

As of today, there is an average demand from call and put buyers or sellers, neutral over the next two months. To summarize, investors are buying a significant amount of call and put option contracts and are leaning neutral over the next two months.

On the next page, let’s take a look at the earnings and revenue growth rates and the conclusion.

E = Earnings Are Mixed Quarter-Over-Quarter

Rising stock prices are often strongly correlated with rising earnings and revenue growth rates. Also, the last four quarterly earnings announcement reactions help gauge investor sentiment on Micron Technology’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for Micron Technology look like and more importantly, how did the markets like these numbers?

	2012 Q4	2012 Q3	2012 Q2	2012 Q1
Earnings Growth (Y-O-Y)	3.45%	-42.11%	-76.27%	-557.14%
Revenue Growth (Y-O-Y)	3.43%	-12.25%	-8.27%	1.54%
Earnings Reaction	10.69%	-6.92%	-0.66%	-7.84%

Micron Technology has seen mixed earnings and revenue figures over the last four quarters. From these figures, the markets were excited about Micron Technology’s most recent earnings announcement.

NEW! Discover a new stock idea each week for less than the cost of 1 trade. CLICK HERE for your Weekly Stock Cheat Sheets NOW!

P = Average Relative Performance Versus Peers and Sector

How has Micron Technology stock done relative to its peers, Spansion (NYSE:CODE), Intel (NASDAQ:INTC), SanDisk (NASDAQ:SNDK), and sector?

	Micron Technology	Spansion	Intel	SanDisk	Sector
Year-to-Date Return	14.11%	-0.18%	22.83%	20.64%	7.31%

Micron Technology has been an average performer, year-to-date.

Conclusion

Micron Technology operates in an expanding semiconductor industry that provides valuable products to consumers and businesses worldwide. The stock has struggled in recent years but seems to have stabilized at bit and could be heading higher. The most recent earnings and revenue figures really pleased investors so the stock has been doing well. Relative to its peers and sector, Micron Technology has been an average year-to-date performer. WAIT AND SEE what Micron Technology does this coming quarter.

6 Scary Reasons to Do Retirement Planning Now

There are some very predictable events in the life of a financial writer. For example, there are regular releases of surveys addressing how much retirement planning people have done and how prepared they are for retirement. And they're pretty much always depressing, if not shocking. For example, let's review some alarming numbers from Franklin Templeton's 2013 Retirement Income Strategies and Expectations (RISE) Survey.

20% plan on never retiring.
Many Americans have found that they simply must keep working for as long as they can, due to insufficient retirement planning and saving. "Never" is an extreme word, though. You may keep working past age 65 and even be working at 75, but at 85 or before that, it may just be impossible. Your health may not permit working, or there may just not be a job to be had.

33% retired due to circumstances beyond their control.
This is critical to consider for those planning to never retire. The choice may not be yours. You may end up downsized or may develop serious health problems, or may have to leave the workforce to care for a loved one. The little silver lining here is that while you might lose your job, you can probably generate some income without it, either by finding acceptable part-time work somewhere, or perhaps by taking matters into your own hands: preparing taxes, tutoring kids, dog-walking, consulting, taking in a boarder, selling items on eBay, knitting, being a handyperson for hire, and so on. In your financial planning, include some contingency plans.

46% who haven't started saving for retirement expect running out of money to be their top concern during retirement.
This would be hilarious if it weren't so sad. Just about everyone who hasn't started saving for retirement should worry about running out of money, not just 46%. Sure, maybe you're among the relatively few who needn't worry, but without retirement planning, without sitting down and running the numbers to see how much you have, how much you can accumulate, and how much you'll need, you'll never know.

31% ages 45 to 54 haven't started saving for retirement yet.
This is pretty frightening. If you're 45, you might be hoping to retire in 20 years. If you're 54, you might expect to work just 11 more years or so. And if you don't have a sizable nest egg under construction, you're probably in trouble. The good news is that all isn't lost. A little retirement planning and some actions taken now can have a profound effect on your financial situation. You might work some additional years, for example, or take on a second job for a few years. You could reallocate your investment money, if it's not deployed effectively. You might even decide to downsize your home and perhaps even move to a less expensive region in retirement.

56% of those with six to 10 years until retirement have $100,000 or less saved for retirement.
This is a concrete example of how precarious many people's futures are. If these folks are expecting to live off Social Security, amounting to $14,760 per year. Enter even twice that amount into your retirement planning calculations, and it probably still won't offer you a very comfy retirement.

62% have $50,000 or less saved for retirement.
Having $50,000 or even $20,000, can be OK -- if you're still young, you keep adding to it, and you invest it effectively. For most of us, though, that's way too small a sum. It's not unreasonable to aim for a million-dollar nest egg by the time we retire. Taking annual 4% withdrawals from that, as many advisors recommend, will yield $40,000 in the first year, adjusted in subsequent years for inflation or stock market performance. Everyone's situation is different, though, which is why you need to do your own retirement planning, or tap the services of a pro for some help. How much you'll ultimately need depends on the income you'll expect to receive in retirement (from Social Security, pensions, annuities, dividends, etc.), plus the size of your nest egg, along with how much you expect to spend. Retirement can cost more than you expect, especially incorporating possible health-care expenses.

Fortunately, you don't have to be among the sorry statistics above -- at least not all of them. Take time to do some retirement planning today, as the longer you wait, the harder it will be to have what you need. The more you know, the better off you'll likely be.

In your retirement planning, examine all the angles, including Social Security. It plays a key role in your financial security, no matter how much you end up collecting from it -- and by making smart decisions, you can position yourself to collect as much as possible. Let our retirement experts tell you how to do that, in our brand-new free report "Make Social Security Work Harder for You." I invite you to click here to get your copy today.

3 Reasons to Sell Ford Stock

One of the most useful exercises that any investor can do is turn the tables and analyze the bearish argument for a stock that they own. Today, Motley Fool analyst Brendan Byrnes, a Ford shareholder, takes a look at potential reasons to sell the stock. In the video below, Brendan points to the cyclicality of the company, the fact that there is little moat around Ford or any automaker, and that there are fewer millennials buying vehicles as three possible reasons to sell the stock.

Worried about Ford?
If you're concerned that Ford's turnaround has run its course, relax -- there's good reason to think that the Blue Oval still has big growth opportunities ahead. The Fool's premium Ford research service outlines those opportunities. If you're looking for some freshly updated guidance to Ford's prospects in coming years, you've come to the right place -- click here to get started now.

Lululemon Athletica, in the Spotlight Soon

Lululemon Athletica (Nasdaq: LULU  ) is expected to report Q1 earnings on June 10. Here's what Wall Street wants to see:

The 10-second takeaway
Comparing the upcoming quarter to the prior-year quarter, average analyst estimates predict Lululemon Athletica's revenues will grow 19.5% and EPS will wane -6.3%.

The average estimate for revenue is $341.4 million. On the bottom line, the average EPS estimate is $0.30.

Revenue details
Last quarter, Lululemon Athletica reported revenue of $485.5 million. GAAP reported sales were 31% higher than the prior-year quarter's $371.5 million.

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

EPS details
Last quarter, non-GAAP EPS came in at $0.75. GAAP EPS of $0.74 for Q4 were 45% higher than the prior-year quarter's $0.51 per share.

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

Recent performance
For the preceding quarter, gross margin was 56.5%, 20 basis points better than the prior-year quarter. Operating margin was 31.4%, 20 basis points better than the prior-year quarter. Net margin was 22.5%, 270 basis points better than the prior-year quarter.

Looking ahead

The full year's average estimate for revenue is $1.64 billion. The average EPS estimate is $2.02.

Investor sentiment
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 1,024 members out of 1,358 rating the stock outperform, and 334 members rating it underperform. Among 382 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 288 give Lululemon Athletica a green thumbs-up, and 94 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Lululemon Athletica is outperform, with an average price target of $79.37.

Selling to fickle consumers is a tough business for Lululemon Athletica or anyone else in the space. But some companies are better equipped to face the future than others. In a new report, we'll give you the rundown on three companies that are setting themselves up to dominate retail. Click here for instant access to this free report.

Add Lululemon Athletica to My Watchlist.

Carney: Criticism of IRS Response "Legitimate"

WASHINGTON (AP) -- President Barack Obama's spokesman says the White House is facing "legitimate criticisms" for its shifting accounts about who knew what about the Internal Revenue Service's targeting of conservative political groups, and when they knew it.

Press secretary Jay Carney's acknowledgement Wednesday was an attempt to stem a growing narrative that the White House has bungled its response to the IRS controversy, even though the White House appears to have had no direct role in the agency's targeting of conservative political groups.

"There have been some legitimate criticisms about how we're handling this," Carney told reporters during his daily briefing. "And I say 'legitimate' because I mean it."

The criticism of the White House has largely focused on its evolving story about who in the White House knew about the IRS targeting before it became public May 10. Carney on Wednesday attributed the changing accounts in part to an attempt by the White House to provide the public information quickly, even before the full details are known.

"Quickly and comprehensively are not objectives that always meet," he said. "Our approach is we get the information we have to you, and as we get more information, we fill in the details."

Since the IRS targeting of conservative groups became public, the White House's primary focus has been making clear that Obama had no advanced knowledge of the agency's actions or an independent audit of the activity. Carney and other White House advisors say the president learned about the targeting like the general public -- from news reports.

However, Carney has struggled to provide full accounts of who on the president's staff may have known about the politically explosive IRS activity before the president.

In his first account last week, Carney said White House Counsel Kathryn Ruemmler was told "very broadly" on April 24 about the inspector general's audit into the IRS office at the center of the targeting controversy.

But on Monday, Carney said staff in Ruemmler's office first learned of the impending IRS report on April 16. After Ruemmler was told, Carney said she then alerted White House chief of staff Denis McDonough, deputy chief of staff Mark Childress and other senior White House officials.

Carney continued Wednesday to withhold the names of those other staffers, saying he "can't account for every conversation that might have been had."

The shifting stories have created friction between Carney and reporters during his daily briefings. However, the press secretary took a softer tone Wednesday, calling reporters "smart" and "good at your jobs."

Of course, Carney may have had another reason for his sunnier disposition. Wednesday marked his 48th birthday.

"This is how I chose to spend it," he joked as he fielded questions from reporters.

The Ever-Fascinating Plight of Billionaire John Paulson

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

If you're an investing wonk that loves lessons in investing process or behavioral finance, billionaire hedge-fund manager John Paulson is utterly captivating. Of course, if you're a fan of schadenfreude or are on a warpath against the "one percent" he's also interesting -- but those are stories for another place.

A quote in a recent Bloomberg article from hedge fund advisor Jay Rogers does a great job summarizing the Paulson story:

It's a bit of ego on his part -- 'I made billions of dollars and did this big trade and I'm a genius,' ... That hubris leads him to make big bets and unfortunately most of them have gone wrong.

All signs point to the view that Paulson had been a very competent and successful manager of an event-driven / arbitrage hedge fund. That is, a fund that bet on specific catalysts, corporate events, and mergers. Then came the housing run-up.

Paulson bet big on the housing bust. And Pauslon bet correctly. The result was billions to the fund's investors and billions to Paulson himself. 

After that, it seems Paulson suddenly fancied his fund a macro-oriented fund and started to construct big-picture bets. In mid-2009, he began building an outsized position in big banks -- including billion-dollar-plus positions in Bank of America  (NYSE: BAC  ) and Citigroup  (NYSE: C  ) -- on the view that the banks would turn on the post-recession recovery. 

If the bet wasn't a disaster, it was something very close. As the S&P 500  (SNPINDEX: ^GSPC  ) recovered, the stocks of both B of A and Citi crumpled.

BAC data by YCharts.

By December 2011, he'd zeroed out the positions. And in a sad coda to that trade, both stocks turned around and solidly outperformed the S&P between when he sold and today.

Around the same time, he also started building a large position on gold and gold-related investments. According to S&P's Capital IQ, by March 2009, the Paulson family of funds already had nearly $3 billion in the SPDR Gold Trust  (NYSEMKT: GLD  ) . That was accompanied by smaller stakes in Market Vectors Gold Miners ETF (NYSEMKT: GDX  ) , Kinross Gold, and Gold Fields -- among others. 

The gold mining companies -- Kinross in particular -- didn't exactly shoot the lights out. But the overall view -- that gold would continue powering higher -- worked quite well.

^SPX data by YCharts.

That is, it worked quite well until it didn't. Starting around mid-2011, gold started to shudder, and the gravy train slowed markedly. It slowed enough that it's significantly lagged market indices over the past few years, leaving Paulson-fund investors in the lurch.

^SPX data by YCharts.

That leaves Paulson today with substantially less of a "master of the universe" reputation than he had coming off his outlandish housing-crash win. 

Looking ahead, the real story will be whether Paulson can successfully turn things around. My take is that the turnaround won't come via a sudden insight into the macro-investing game that will lead to another big-bet win. Instead, it would more likely come from a realization that his forte and alpha-producing potential lie in arbitrage investing, not big-picture bets.

In the stock market, it can be mind-numbingly difficult to separate the true skill of an investor from dumb luck. I won't pretend to have insight into whether the housing bet was the latter or the former. But what does seem clear to me is that Paulson's skill seems to lie in the event-arb arena. Sure, it's a quieter backwater that isn't typically a media king maker, but for those that can do it well, it's a steady performer.

To Paulson's credit, Bloomberg makes it sound as if the fund is gravitating back to that traditional strength. 

Since late 2012, Paulson has emphasized to clients his firm's strength in investments that aim to profit from takeovers, restructurings and spinoffs. The firm's new website, started last week, portrays Paulson & Co. as a bottom-up, event- driven arbitrage firm that seeks capital preservation and above- average returns, without mentioning gold.

Individual may not think they have much in common with a big shot billionaire like Paulson, but his experience over the years since his big win suggest a lesson that we all can learn from. Process, outcome, skill, and luck play very big roles in investing. That something worked in the past doesn't mean it was the result of your brilliance, or that a similar approach will work in the future. On the other hand, a positive outcome that was the result of a well-honed process that relies on carefully selected inputs is far more likely to lead to the long-term results you're looking for.

More from The Motley Fool
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.

What's So Great About T-Mobile's Merger With MetroPCS?

The wireless industry in America is ruled by AT&T (NYSE: T  ) ,  Verizon (NYSE: VZ  ) , and a handful of much smaller networks fight for scraps from the ruling duo's table. A wave of consolidation can change all of that.

In this video, Fool contributor Anders Bylund explains why MetroPCS (NYSE: TMUS  ) merging with T-Mobile USA is good for both consumers and the industry at large -- though he's actually more interested in what will become of third-largest service provider Sprint Nextel (NYSE: S  ) .

 

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

AbbVie: No Upside For Hep-C, Little Upside For Stock, Morgan Stanley Says

AbbVie (ABBV) has fallen today after Morgan Stanley downgraded its shares from Overweight to Equal Weight.

Getty Images

Morgan Stanley analyst David Risinger explains the AbbVie cut:

ABBV is close to our $57 price target, and news reported by Gilead (GILD) and Targacept this week lowers the probability of our bull case….

Gilead's top-line hepatitis-c data was exceptional, and we no longer see upside potential for AbbVie hep-c sales. GILD's regimen has an efficacy/safety profile and dosing schedule (one pill, once daily, eight weeks treatment duration) that, in our view, leaves
almost no room for upside to our 30% share estimate for ABBV, unless ABBV discounts aggressively.

Also a concern: AbbVie’s pipeline, while strong, is mostly partnered, leaving less upside potential. Elotuzumab, for instance, is partnered with Bristol-Myers Squibb (BMY), while Daclizumab is being developed with Biogen Idec Idex (BIIB).

Shares of AbbVie, which were removed from added to Goldman Sachs’ conviction buy list earlier this month, have dropped 3.1% to $52.64 at $3:45 p.m. today, while Gilead has dipped 0.3% to $73.34 and Biogen is off 1.3% to $276.91. Bristol-Myers Squibb has gained 2.2% to $53.77 on hopes for a blockbuster cancer drug.