Health Insurance SignUps Start Smoothly, Head to Malls

Alamy The Obama administration will promote health insurance coverage at shopping malls starting on Black Friday and continuing through the busiest shopping days of the holiday season, officials announced Wednesday. They said more than 462,000 people selected a private insurance plan in the first week of 2015 enrollment through the online marketplace HealthCare.gov. The government's enrollment push with Westfield Shopping Centers will involve setting up outreach tables at malls in Florida, Illinois, New Jersey, Connecticut, Maryland, New York and Washington state. Westfield will post information about enrollment services on its website. Report Card on First Week The administration released what it called a snapshot of signups for the first week of the enrollment period, which started Nov. 15. U.S. Department of Health and Human Services Secretary Sylvia Burwell said 462,125 people chose a health plan in the 37 states using the federal website. Of those, 48 percent are new customers, including enrollees in Oregon and Nevada, which turned over their troubled insurance markets to the federal government. The figures don't include states running their own insurance markets. The numbers represent only the choice of a plan, and not whether consumers paid their first month's premium -- a requirement for coverage to start. "We're off to a solid start but we've got a lot of work every day between now and Feb. 15," the last day of the enrollment period, Burwell said in a conference call with reporters. About 1 million people phoned the enrollment site's help line, she said, and roughly an additional 100,000 callers chose to speak with a Spanish-speaking representative. Burwell said the administration is sticking with its previously announced goal of signing up 9.1 million consumers for coverage in 2015. Unlike last year, the website suffered no outages in the first week, officials said, and it's ready to handle 250,000 users at a time during anticipated surges around deadlines. Consumers must sign up by Dec. 15 for coverage to start on Jan. 1. Partnerships With Two Groups The figures announced Wednesday don't include dental plans, Burwell stressed. Last week, the administration acknowledged it had been over-reporting the number of enrollees by double-counting about 400,000 who had both medical and dental plans. Burwell said she has directed her staff to find out how the double-counting happened. Burwell promised a weekly update on enrollment along with more thorough monthly reports that will include what's happening in state-based markets. Along with the shopping mall campaign, HHS announced marketing partnerships with the National Community Pharmacists Association and the XO Group, a company that runs websites targeting brides, new mothers and homeowners. The pharmacists group will get enrollment information to its members and pharmacy customers, officials said. The XO Group will post blog content on its sites. Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. More from The Associated Press
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Facebook Still Challenged by Privacy Issues

Facebook (Nasdaq: FB) stock has climbed 161% in just one year. That's a great reversal from its 53% tumble the first three months of trading.

Facebook stock's rebound is one reason investors were praising Facebook Founder and Chief Executive Officer Mark Zuckerberg at the recent FB shareholder meeting. Zuckerberg has shown investors he's able to make some savvy purchases, too, with FB's recent buying spree.

But Facebook is now facing something that Zuckerberg may not be able to maneuver around so easily...

A judge in southern Iran has summoned the social media magnate to appear in court to answer individuals' complaints that allege Facebook-owned apps Instagram and WhatsApp violate their privacy.

Chances of Zuckerberg actually appearing in an Iranian court are slim to none, as no extradition treaty between Iran and the United States exists. Still, the Middle East country is sending a clear message with the court order that Facebook and its offshoots are not welcome there.

Just last week, another Iranian court ordered Instagram blocked over privacy concerns.

While Facebook is already officially banned in Iran, scores of its tech-savvy citizens have found ways to bypass controls and access the forbidden social media site.

The Iranian court order came on the heels of some disturbing news reported last week by the International Business Times.

Facebook will use an upcoming mobile app to amass, analyze, and store data (songs and TV shows) captured by smartphones' microphones.

While Facebook assured users that "no sound is stored" by the new feature, the world's largest social media site acknowledged to IBTimes that "data is saved, but all data is anonymized and aggregated."

It's not clear what FB plans to do with the all the sound bites. That in itself is bothersome.

"I think the most problematic element of this is that we don't know with what data the sounds are matched," said Dr. Ilka Gleibs, Professor of Social and Organizational Psychology at the London School of Economics. "As consumers, we have no control over whether data could be de-anonymized or what happens if third parties would like access to the data. It's difficult to trust when messages are so mixed and we deal with so many unknowns."

That's why Iran isn't the only government concerned about FB and privacy...

FB Hits Problems: FTC Calls for Transparency and Accountability

A new report filed by the Federal Trade Commission (FTC) Tuesday outlined how data broker companies collect and share their massive amounts of consumer information - and hide it from watchdogs.

The FTC data points out that while consumers sometimes benefit from data brokers, which run the gamut from Division of Motor Vehicle Agencies to retailers to social media sites, industry practices raise a slew of privacy concern issues.

"The extent of consumer profiling today means that data brokers often know as much - or even more - about us than our family and friends, including our online and in-store purchases, our political and religious affiliations, our income and socioeconomic status, and more," FTC Chairwoman Edith Ramirez said during a media call Tuesday. "It's time to bring transparency and accountability to bear on this industry on behalf of consumers, many of whom are unaware that data brokers even exist."

A key concern of the plethora of information collected by data brokers is that it's an attractive target for hackers and identify thieves. Unquestionably, data collection is risky business for consumers. Yet it's a very lucrative business - especially for Facebook, the "Big Dog of the Mobile Ad Space."

Facebook has been dealing with calls for more transparency and accountably regarding privacy issues since its inception.

But, the good news for investors: Business hasn't suffered. In fact, Facebook is thriving.

FB Stock Keeps Climbing

Privacy concerns have been around for years, and Facebook has still doubled its stock price - and kept going.

The Menlo Park, Calif.-based company reported blockbuster Q1 2014 numbers last month. The social networking leader delivered on earnings, revenue, mobile ad growth, and member user count.

"Facebook's business is strong and growing, and this quarter was a great start to 2014," Zuckerberg said in a statement. "We've made some long term bets on the future while staying focused on executing and improving our core products and business. We're in great position to continue making progress towards our mission."

Top on that mission list is connecting the world via Facebook. Part of the plan is also rewarding shareholders.

Money Morning Defense & Tech Specialist Michael A. Robinson thinks shares are heading upwards of $150 to $200 a share.

And in a recent report from Zacks Equity Research - which rates FB stock a "Buy" - analysts wrote they believe Facebook's "growing mobile user base, Instagram's increasing popularity, the frequent launching of new products and international expansions will boost the company's top line and profitability going forward."

Zacks cited eMarketer's projection that FB's mobile ad revenue will rise to 63.4% of net ad revenue in 2014, from 45.1% in 2013.

Facebook is also looking at ways to enhance user engagement.

Even amid all the chatter over privacy concerns, FB stock rose about 0.03 points on Wednesday and traded up 0.22% at $63.65 in premarket trading Thursday.

Today's Top Investing Story: Many investors believe that with our presence in Iraq largely gone, defense tech firms will offer mediocre returns at best. But they couldn't be more wrong. This defense tech play is scorching the market...

Related Articles:

Fox News:
Iranian Judge Summons Facebook's Zuckerberg to Court Investing.com:
Surveillance Issues Abound on Facebook's Microphone Data Collection Scheme Forbes:
Privacy Issues Could Threaten the Future of Commercial Social Media

Ebix Inc (EBIX) Earnings Report: A Short Squeeze Candidate? BNFT & GWRE

The Q3 2014 earnings report for small cap insurance software stock Ebix Inc (NASDAQ: EBIX), a potential peer of insurance software stocks like small cap Benefitfocus Inc (NASDAQ: BNFT) and mid cap Guidewire Software Inc (NYSE: GWRE), is scheduled for before the market opens on Friday (November 7th). Aside from the Ebix Inc earnings report, it should be said that Benefitfocus Inc will report Q3 2014 earnings when the market closes today while Guidewire Software Inc reported Q4 2014 earnings on September 2nd. However, the Ebix Inc earnings report will be closely watched as it's the fourth most shorted stock on the Nasdaq with short interest of 53.62% according to HighShortInterest.com. These shorts began targeting Ebix Inc in the summer of 2013 when Goldman Sachs Group Inc (NYSE: GS) terminated an agreement to acquire the company after reports of a probe of allegations of intentional misconduct with Bloomberg reporting the company was being investigated specifically for money laundering.

What Should You Watch Out for With the Ebix Inc Earnings Report?

First, here is a quick recap of Ebix Inc's recent earnings history along with EPS estimate trends from the Yahoo! Finance analyst estimates page:

Earnings HistorySep 13Dec 13Mar 14Jun 14

EPS Est	0.31	0.31	0.36	0.38
EPS Actual	0.34	0.40	0.40	0.35
Difference	0.03	0.09	0.04	-0.03
Surprise %	9.70%	29.00%	11.10%	-7.90%

EPS TrendsCurrent Qtr.
Sep 14Next Qtr.
Dec 14Current Year
Dec 14Next Year
Dec 15

Current Estimate	0.36	0.37	1.49	1.54
7 Days Ago	0.36	0.37	1.49	1.54
30 Days Ago	0.36	0.37	1.49	1.54
60 Days Ago	0.36	0.37	1.49	1.54
90 Days Ago	0.39	0.40	1.58	1.68

 

Back in early August, Ebix Inc reported a 1% revenue increase to $51.5 million (a slight sequential increase over Q1 2014 revenue of $51.4 million) while on a constant currency basis, revenue increased year over year to $52.0 million from $51.0 million in Q2 2013. Net income came in at $13.6 million or at roughly the same level as Q2 2013 net income of $13.5 million. The CEO commented:

"Ebix has always been a cash story and towards that extent I am pleased with the operating cash flows of $17.8 million in Q2 of 2014. Ebix has successfully continued to fill in for the large drop in professional services revenues associated with some of our Pharma and PlanetSoft initiatives through increase revenues from other exchange product lines. As we start deploying some of the recently agreed to PlanetSoft projects with three leading carriers in the United States, we would expect our professional services revenues to accordingly start growing again and become a significant contributor to our revenues… We are continuing to pursue a number of deals that can have a meaningful impact on our future revenues. Our sales pipeline is strong and we feel good about the opportunities ahead of us. Our customer retention rates continue to be strong, and we have not lost any exchange clients who even account for more than 0.2 percent of Ebix revenues."

The CFO added:

"During the second quarter Ebix reduced debt on our revolver and other debt by $17.7 million. We paid $13.1 million in Q2 towards the purchase of office buildings in Atlanta and Noida, targeted at reducing our ongoing rental and infrastructure expenses while providing for future growth. During the quarter we continued to invest in the growth of the business with the purchase of Healthcare Magic for $6 million, and the payment of $2.25 million in earn-out obligations from prior business acquisitions. We also paid $2.9 million in cash dividends to our stockholders. After paying approximately $42 million towards the above, Ebix still had aggregate cash, cash equivalents, and short-term cash deposit investments in the amount of $34.3 million as of June 30, 2014. Operating cash flow for the 2nd quarter was $17.8 million, an increase of $7.0 million from Q1 and $7.2 million from the same period in 2013. This cash performance, in our view speaks to the strength of the Ebix business model."

On the news front and late in August, Ebix Inc announced that it intends to repurchase up to $80 million of shares over the next twelve months with the CEO commenting:

"We believe that approximately 23 million shares are held by a few investor groups who are either insiders or long-term holders, leaving approximately 15 million shares available as the float. As we intend to make share repurchases of approximately $80 million over the next twelve months, we want to assure investors that our repurchases will be done intelligently and opportunistically with the goal of creating optimal value for our shareholders."

Last Monday, Ebix Inc announced that it has acquired Connecticut based VERTEX Incorporated, a specialized software and services firm focused primarily on the life and annuity insurance marketplace, with the goal of establishing a non-aligned worldwide strategic management consulting practice targeted at the insurance, healthcare and financial industries all across the world.

What do the Ebix Inc Charts Say?

The latest technical chart for small cap Ebix Inc shows the stock along with trend lines that are all over the place:

A long term performance chart shows that small caps Ebix Inc and Benefitfocus Inc have been underperforming lately while mid cap Guidewire Software Inc has been a pretty steady performer up until earlier this year when shares began to dip:

A technical chart for Benefitfocus Inc shows a pretty steady downtrend that may have leveled off while Guidewire Software Inc bottomed out in May and has been on an uptrend since then:

What Should Be Your Next Move?

Its hard to get excited about investing in or for that matter, shorting small cap Ebix Inc ahead of earnings. Hence, maybe investors and shorts alike should just stay away from the stock. 

Whole Foods Market Looks to Turn Itself Around

Source: ChadPerez49 via Wikimedia Commons.

Every once in a while, a company truly revolutionizes what seems like a fully mature industry. In the grocery-store arena, Whole Foods Market (NASDAQ: WFM  ) has played that role flawlessly, taking what used to be viewed as a low-margin commodity business and turning it on its head by taking advantage of changing customer preferences. By tapping into the healthy food movement, Whole Foods has produced huge growth over the years. Now, as the company has hit a brief air pocket, investors hope that Whole Foods will get back to business when it reports its fiscal fourth-quarter results on Wednesday.

Whole Foods needs no introduction to most Americans, with its emphasis on organics and natural foods having earned praise from many shoppers even as its higher prices have led some to give it its Whole Paycheck moniker. But the real question facing the company right now is whether Whole Foods can maintain its competitive edge even as traditional grocers like Kroger (NYSE: KR  ) and copycat premium grocers like The Fresh Market (NASDAQ: TFM  ) try to box it in. Let's take an early look at what's been happening with Whole Foods over the past quarter and what we're likely to see in its report.

Stats on Whole Foods Market

Analyst EPS Estimate	$0.32
Change From Year-Ago EPS	0%
Revenue Estimate	$3.26 billion
Change From Year-Ago Revenue	9.4%
Earnings Beats in Past 4 Quarters	2

Source: Yahoo! Finance.

What's next for Whole Foods earnings?
Over the past few months, investors have held their views on Whole Foods earnings stable, with their projections for the just-ended quarter remaining unchanged. The stock has finally picked itself up off the mat, climbing about 3% since late July.

Whole Foods has been struggling ever since its fiscal second-quarter results back in May, in which it reduced its projections for revenue growth from a range of 11% to 12% to a lower range of 10.5% to 11% and made even more draconian reductions to earnings-growth guidance. With Whole Foods having slashed its expected earnings growth to a range of just 3% to 6%, growth investors worry that the best times for the premium grocer were behind it. In its fiscal third quarter, Whole Foods saw sales climb 10% to a record $3.4 billion, but comps were up just 3.9%, and the company once again cut its guidance for sales and earnings growth for the full 2014 fiscal year.

Source: David Shankbone/ Wikimedia Commons.

Yet Whole Foods still has confidence in its long-term prospects. Even though it already has a commanding lead over The Fresh Market and its other premium peers, Whole Foods is looking to accelerate its store-count growth in future years. That should help it compete better against Kroger and other large-scale grocery chains to answer the moves they've made to emphasize organics and natural foods in their own offerings. Whole Foods is also renovating some of its older locations to keep up with its peers. At the same time, it's also looking for ways to cut costs for its customers while still maintaining its high margins. The increased emphasis on its store brands has been one method Whole Foods has used to capture more wallet-share from shoppers.

Still, the thing that has disappointed Whole Foods investors is the decline in same-store sales, and that's a trend that might not reverse itself anytime soon. What Whole Foods appears to be doing instead is trying to make more from less, acknowledging the inevitability of slowing revenue growth but looking to ensure as much of those sales as possible reach the bottom line. That strategy could succeed in the short run, but eventually, Whole Foods will have to beat its competitors on the sales front as well.

In the Whole Foods earnings report, same-store sales will definitely be a point of emphasis for investors. But you should also take a look at the company's comments on its long-term strategic plans, because in the ever-changing grocery-industry environment, what Whole Foods focuses on has ramifications for the entire market. Whatever Whole Foods says, you can be sure that Kroger, Fresh Market, and other players will listen closely and come up with their answers to Whole Foods' strategy as quickly as they can.

This $19 trillion industry could destroy the Internet
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Union Pacific: Right on Schedule

The winter of 2013/2014 was one most transportation companies—including railroads—would probably like to forget.

As the so-called polar vortex lashed the Midwest, Northeast and much of Canada, many railways were forced to shorten their train lengths and their crews' exposure to the frigid temperatures. The weather also delayed numerous shipments, which weighed on some railways' first quarter profits.

CSX Corp. (NYSE: CSX), for example, cited the brutal winter as the main reason why its first quarter earnings fell 13.9% from a year earlier. The company said the weather cost it $0.08 to $0.09 a share in higher expenses and lost revenue.

Polar Vortex Couldn't Keep Union Pacific Down

One railway that managed to prosper despite the wild winter was Union Pacific (NYSE: UNP), a recommendation of our Personal Finance newsletter.

Union Pacific's roots go all the way back to the Civil War, when President Lincoln approved the Pacific Railroad Act of 1862 to encourage expansion in non-Confederate territories. Since then, it has grown through mergers and acquisitions, including the Southern Pacific, Missouri Pacific and Western Pacific railroads.

Today, the company operates a 32,000-mile freight network in the western two-thirds of the country, where it spans 23 states.

Union Pacific's revenue is well-diversified across six different categories of freight: intermodal, or containers that can be loaded onto ships, trucks or trains (20% of 2013 revenue); coal (19%); industrial products (18%); agricultural (16%); chemicals, including oil from U.S. shale plays like the Bakken, Permian and Eagle Ford (17%); and automotive (10%).

Despite the wintry blast—and an earlier caution from the company that the severe winter would affect its profits—its first quarter net income rose 13.7% from a year earlier, to $1.09 billion. Per-share earnings gained 17.2%, to $2.38, on a lo! wer share count due to Union Pacific's ongoing buybacks. That topped the consensus forecast by a penny.

Overall revenue rose 6.6%, to $5.64 billion, though that missed the Street's estimate of $5.70 billion. The company saw revenue gains across all of its segments except automotive, which was flat. Agricultural revenue rose 16%, followed by industrial (up 10%), intermodal (up 4%), coal (up 3%) and chemicals (up 2%).

A key metric of a railroad's health is its operating ratio, which measures operating costs against revenue (the lower the ratio, the better). Here, Union Pacific once again showed that it's among the most efficient railroads in the U.S., posting a record first quarter operating ratio of 67.1%, down from 69.1% a year ago.

"Union Pacific achieved record first quarter financial results, leveraging the strengths of our diverse franchise in the face of challenging weather conditions," said CEO Jack Koraleski. "We're proud of the efforts of the men and women of Union Pacific, who worked tirelessly to serve our customers despite these weather challenges and helped us achieve such a solid start to the year."

Geography Brings Special Advantages

Trains haul over 40% of America's intercity freight, and the railroad sector's prospects continue to look bright. Despite the unsteady start to the year, railroads are expected to post a 7.4% earnings increase over last year, according to an April 25 report from Zacks, while revenue is forecast to increase 4.4%.

There are a number of factors fueling the sector's ongoing growth. A major one is efficiency: according to the Association of American Railroads, shipping freight by rail is four times more fuel-efficient than doing so by truck. Moreover, railroad fuel efficiency is up 99% since 1980.

That, plus Union Pacific's concentration in the west, gives the company a significant edge over big rigs, according to Investing Daily analyst Benjamin Shepherd:

"In California, the toughe! st diesel! emission standards in the country come into effect this year, requiring the retrofitting of about one million trucks with smog filters," he wrote in the March 26 issue of Personal Finance.

"Many aging trucks will be forced to cease operation altogether. In another decade, no truck more than 13 years old will be able to operate in the state without extensive modification, requiring the trucking industry to replace much of its operating capacity. That will have a huge impact on West Coast freight rates for several years to come."

Intermodal Shipments Steaming Ahead

Many of the goods railroads ship are cyclical or seasonal in nature, but intermodal shipments continue to show steady growth. The American Association of Railroads recently reported that intermodal traffic rose 6.7% in the last week of April, compared to the same week a year earlier, while the 10-week moving average was up 8.5% from a year ago.

The long-term picture looks just as bright: according to the American Trucking Association's 2013 U.S. Freight Transportation Forecast, intermodal shipping will continue to be the fastest-growing freight mode, increasing by an average of 5.1% a year until 2018, before easing off to a 4.8% annual growth rate to 2024.

In response, Union Pacific has invested heavily in developing its intermodal capacity from the Port of Long Beach to Chicago. This year, it plans a total of $3.9 billion in capital expenditures, up from $3.6 billion in 2013.

Of that total, $1.1 billion will go toward projects that support the company's growth and improve its productivity, such as continuing to add a second line of track along the Sunset Corridor, which runs from Los Angeles to El Paso.

In addition, Union Pacific opened its $400-million intermodal facility in Santa Teresa, New Mexico, in April. The terminal, which is located along the Sunset Corridor, is near the Maquiladora industrial area in northern Mexico and will serve as a focal point for moving freight across ! the borde! r.

Thanks to rising trends in the industry and its own unique advantages, Union Pacific's revenue is expected to grow by more than $1 billion this year, to $23.5 billion. Earnings are forecast to jump from $9.42 a share last year to $10.91 in 2014, and analysts see profits continuing to climb, to $12.35 a share, in 2015.

With a lean operation and a strong presence in several growing markets, Union Pacific's growth looks set to chug along for years to come. Long-term investors should consider climbing aboard.

In the March 26 issue of Personal Finance, Benjamin Shepherd gave readers his very latest outlook for the railroad sector and revealed the names of two more railways that are primed for growth as the industry—and the U.S. economy—picks up steam.

Learn all about these proven winners when you road test Personal Finance risk-free for 90 days. Simply go here to sign up now.

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