Best Stocks For 2014, Best Stocks To Buy For 2014: December 2014

Wednesday, December 31, 2014

How to Land Posh Hotel Upgrades for $20

AYC7BB Stack of new US 20 dollar bills money cash Alamy Frugality gets a bad rap. While it's not as bad as being "cheap," frugality is often seen as going hand in hand with a life free of luxury and a disdain for all nice things. And while my husband and I try our best to live frugally, we also like nice things. So when describing our spending philosophy, we prefer the term "money savvy." Money savviness means getting more for our money, whereas frugality often equates to just spending less. And one of our favorite ways to be money savvy is the $20 hotel trick. What if I told you that you could get a deal on your hotel room, and for a mere $20, you could also get a swanky upgrade? Well, I just told you. And it's as awesome as it sounds.

Tuesday, December 30, 2014

Which Companies Won the Christmas Device Sales Battle?

For technology companies, the holiday season represents more than just a huge sales opportunity. This "most wonderful time of the year" provides them an opportunity to solidify market share, reboot a struggling product line, or see where they stand among peers.

This year, the holiday shopping rush helped one sales leader fortify its No. 1 position while showcasing a surprising contender and exposing a number of weaker companies as well. It also showed a change in the buying patterns of consumers, which may impact what devices are made going forward.

Apple was the leader
If you had any doubts of whether Apple (NASDAQ: AAPL ) still holds a dominant position in phones and tablets, the company's holiday sales total should put them to rest. The company accounted for 51% of all new device activations worldwide between December 19 and 25, according to Flurry, a data analysis service owned by Yahoo!.

Samsung (NASDAQOTH: SSNLF ) was a distant second with 18% of new activations.

"To put this in perspective, for every Samsung devices that was activated, Apple activated 2.9 devices," according to Flurry's report. "While the holidays in general and Christmas in particular are not the sole indicator of the smartphone market share and trends, it is safe to say that Apple's newly released iPhone 6 and iPhone 6 Plus have had a blockbuster holiday season, despite a lackluster holiday season for the consumer electronics industry."

Flurry, which said that Christmas Day is the biggest of the year for new device activations, compiles its data by tracking more than 600,000 apps.

Microsoft can claim victory, too
In some ways, Microsoft (NASDAQ: MSFT ) won the holidays just by managing to have its devices -- mostly phones marketed under the Nokia brand -- break out at all. The company had 5.8% of new activations, which falls well behind Microsoft and Samsung but makes it the clear No. 3.

From all other manufacturers, only Sony (1.6%) and LG (1.4%) had more than a 1% share. That's good news for Microsoft, which has struggled to establish Windows Phone as an iOS and Android alternative. It also suggests the company is making some headway in its efforts to market mid and low-priced smartphones as an alternative to high-end devices.

Tablets are becoming phablets?
While the overall market share for tablets -- if you count large ones, small ones, and phablets -- has remained about the same since 2012, phablets are cannibalizing their larger cousins. In 2012, tablets accounted for 36% of new device activations -- with about 92% of that segment coming from large and small tablet activations. In 2013, that started to shift, with tablets overall delivering 33% of total activations but 88% came from large and small devices.

Most recently in 2014, consumers showed a real desire for phablets as overall tablet activations bounced back up to 35% of all devices, but large and small tablets now comprise just 63% of that segment. A big part of that trend is likely the iPhone 6 Plus, which Flurry said was a top five most-activated device, as well as Samsung's Galaxy Note line.

"The phablet's popularity seems to come at the expense of full-sized tablets and to a lesser extent small tablets, Flurry wrote. "Even so, the medium-sized phone is still favored by most consumers and saw the largest share of device activations this Christmas."

Source: Flurry.

Trends are becoming clear
Whether Microsoft, Sony, or LG can improve their prospects is yet to be seen, but the other industry players like Xiaomi, Huawei, and HTC have a lot of catching up to do. It's also clear that consumers are looking for larger screens on their phones -- probably to avoid carrying a separate tablet.

This was a holiday season where the rich -- Apple and Samsung -- got richer and only one other company, Microsoft, has anything to celebrate. The major question for next year is whether the Windows-maker can grow beyond a niche audience to become a true alternative, and if that happens, who the market share will come from.

Apple, on the other hand, has received full justification for its decision to enter the phablet market with the iPhone 6 Plus and continued validation for the iPad mini. Those devices may have poached iPad sales, but if they did not exist, it seems likely Apple would have lost market share as consumers flocked to competitors for their holiday shopping.

Monday, December 29, 2014

General Dynamics (GD) Dividend Stock Analysis

Linked here is a detailed quantitative analysis of General Dynamics (GD). Below are some highlights from the above linked analysis: Company Description: General Dynamics is the world's fourth largest military contractor and also one of the world's biggest makers of corporate jets.

Fair Value: In calculating fair value, I consider the NPV MMA Differential Fair Value along with these four calculations of fair value, see page 2 of the linked PDF for a detailed description: 1. Avg. High Yield Price 2. 20-Year DCF Price 3. Avg. P/E Price 4. Graham Number GD is trading at a premium to all four valuations above. The stock is trading at a 49.9% premium to its calculated fair value of $71.45. GD did not earn any Stars in this section. Dividend Analytical Data: In this section there are three possible Stars and three key metrics, see page 2 of the linked PDF for a detailed description: 1. Free Cash Flow Payout 2. Debt To Total Capital 3. Key Metrics 4. Dividend Growth Rate 5. Years of Div. Growth 6. Rolling 4-yr Div. > 15% GD earned two Stars in this section for 1.) and 2.) above. A Star was earned since the Free Cash Flow payout ratio was less than 60% and there were no negative Free Cash Flows over the last 10 years. The stock earned a Star as a result of its most recent Debt to Total Capital being less than 45%. The company has paid a cash dividend to shareholders every year since 1979 and has increased its dividend payments for 23 consecutive years. Dividend Income vs. MMA: Why would you assume the equity risk and invest in a dividend stock if you could earn a better return in a much less risky money market account (MMA) or Treasury bond? This section compares the earning ability of this stock with a high yield MMA (20-year Treasury bond). Two items are considered in this section, see page 2 of the linked PDF for a detailed description: 1. NPV MMA Diff. 2. Years to > MMA The NPV MMA Diff. of the $741 is below the $1,200 target I look for in a stock that has increased dividends as long as GD has. If GD grows its dividend at 10.0% per year, it will take 6 years to equal a MMA yielding an estimated 20-year average rate of 3.68%. Memberships and Peers: GD is a member of the S&P 500 and a member of the Broad Dividend Achievers™ Index. The company's peer group includes: The Boeing Co. (BA) with a 2.4% yield, Lockheed Martin Corporation (LMT) with a 3.2% yield and Textron Inc. (TXT) with a 0.2% yield. Conclusion: GD did not earn any Stars in the Fair Value section, earned two Stars in the Dividend Analytical Data section and did not earn any Stars in the Dividend Income vs. MMA section for a total of two Stars. This quantitatively ranks GD as a 2-Star Weak stock. Using my D4L-PreScreen.xls model, I determined the share price would need to decrease to $90.95 before GD's NPV MMA Differential increased to the $1,200 minimum that I look for in a stock with 23 years of consecutive dividend increases. At that price the stock would yield 2.7%. Resetting the D4L-PreScreen.xls model and solving for the dividend growth rate needed to generate the target $1,200 NPV MMA Differential, the calculated rate is 11.5%. This dividend growth rate is above the 10.0% used in this analysis, thus providing no margin of safety. GD has a risk rating of 1.75 which classifies it as a Medium risk stock. GD, with its diversified offerings, is in one of the best positions to survive defense spending cuts. The company's Aerospace business continues to enjoy a significant backlog for large-cabin aircraft, and should remain strong over the next several years. There is an opportunity to see margins expand as production becomes increasingly efficient. The recent $1.1 trillion Omnibus bill passed earlier this year is seen as a positive for defense companies. It provides the Pentagon with nearly $93 billion to buy weapons and another $63 billion for R&D. However, the defense sector will continue to face reduced spending (compared to historical rates) from the Pentagon. The company has a pristine balance sheet with low free cash flow payout and debt to total capital. GD keeps its yield competitive through annual dividend increases, with the most recent increase of 10.7% coming in March 2014. GD is currently trading above its calculated fair value price of $71.45. This is a solid company and I will continue to look for opportunities to add to my position. Disclaimer: Material presented here is for informational purposes only. The above quantitative stock analysis, including the Star rating, is mechanically calculated and is based on historical information. The analysis assumes the stock will perform in the future as it has in the past. This is generally never true. Before buying or selling any stock you should do your own research and reach your own conclusion. See my Disclaimer for more information. Full Disclosure: At the time of this writing, I was long in GD (4.6% of my Dividend Growth Portfolio). See a list of all my dividend growth holdings here. Related Articles: - Abbvie Inc. (ABBV) Dividend Stock Analysis - Emerson Electric Co. (EMR) Dividend Stock Analysis - Cincinnati Financial Corp. (CINF) Dividend Stock Analysis - AT&T Inc. (T) Dividend Stock Analysis - More Stock Analysis

About the author:Dividends4LifeVisit Dividends4Life at: http://www.dividend-growth-stocks.com/

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Sunday, December 28, 2014

Traits that can help you beat odds, get hired

This is the year employers will be ever so cautious about adding many permanent employees to their ranks.

It sounds a lot like last year — and the year before that.

STORY: Which states will generate jobs in '14?
STORY: Reasons economy will take off, why not

Yes, only 24% of employers expect to hire full-time, permanent staff in 2014, according to CareerBuilder's annual survey of 2,200 hiring managers. In fact, that's down a bit from last year at 26%. (CareerBuilder is owned by a trio of companies: Gannett Co. Inc., USA TODAY's parent company; The McClatchy Co.; and Tribune Co.)

What is predicted to go up somewhat this year is the hiring of temporary or contract works and part-time employees. Of more than 2 in 5 employers who plan to hire temp workers, 43% plan to turn some of those into full-time, permanent staff.

Overall, more employers in the West plan to hire, with 26% saying they'll add full-time, permanent staff. The Northeast and Midwest are tied with 24% planning to add full-time permanent workers. In the South, 22% of employers intend to add full-time permanent staff, down from 27% in 2013.

But a trend that continues to grow — and is most unnerving — is the widening skills gap when it comes to what companies need and the people they're finding.

More than half of a subset of human resources managers who were surveyed said they now have positions for which they cannot find qualified candidates. Forty-six percent said these positions go unfilled for three months or longer.

You might conclude that these are technology jobs. Not necessarily, but most do require information-technology skills to do their jobs.

Some companies are filling the gap by hiring then training people. Nearly half of employers said they plan to train hirees who don't have experience in their industry or field.

Getting a job is not a crap shoot. You can beat the odds and get hired by showing an employer that you are responsible, mature.(Photo: Getty Images)

That's up 10 percentage points from last year. Twenty-six percent of the companies that responded are sending current employees back to school to get advanced degrees. They also are picking up all or part of the bill.

But many smaller firms can't afford to do that. So it's a career imperative to investigate the most up-to-date knowledge required in your field.

What IT skills are essential in your area of expertise? Find a way to learn those skills.

That's not all that leaves hiring managers begging for qualified candidates. Hiring managers consistently tell me that they can't find other other crucial skills, abilities and attributes in candidates. These include good judgment, maturity, common sense, problem solving, clear thinking, initiative and professionalism. (See my "Why I Didn't Hire You" blog at andreakay.com/blog for examples.)

Sure if you're in IT, it's vital to be up on the latest and greatest software and cool gadgets. Or if in marketing, you're ahead of the game if you're well schooled in developing a social-media presence.

But give the impression — in person, by phone or in correspondence — that you're hard to get along with, can't think on your feet or are unprofessional, and you will get tagged as one of those "unqualified candidates." If they sense you're inflexible, can't tackle problems or are irresponsible, you won't get far.

To be qualified, who you are is just as important as what you know.

Expect hiring managers to poke around for clues about who you are. More and more, employers conduct searches on potential employee by viewing social media and other affiliations.

Hiring still may be on the slow and cautious side this year. But by beefing up your technical skills and tin! kering wi! th other all-important attributes, you can be one of the lucky ones.

Career consultant Andrea Kay is the author of This Is How To Get Your Next Job: An Inside Look at What Employers Really Want. Reach her at andrea@andreakay.com. Twitter: @AndreaKayCareer.

Ten Bitcoin Facts That Are Stranger Than Fiction

Just about everything that has to do with the digital currency Bitcoin is at least a little odd.

But there are some Bitcoin facts that are truly bizarre - things that could only happen in the universe of Bitcoin.

Bitcoin, which exists entirely in cyberspace, has attracted a lot of attention in recent months as the Bitcoin price has soared from less than $200 in September to more than $1,200 at the end of November. The world's leading "altcurrency" is trading for about $800 now.

Amid signs that Bitcoin is on the verge of going mainstream, there are a lot of crazy Bitcoin facts and stories that you'd never hear about a conventional currency like the dollar or the euro.

Like the saying goes, you can't make this stuff up...

Ten Weird Bitcoin Facts Odd Bitcoin Fact No. 1: Its Creator Is a Mystery
No one has ever seen the person who supposedly invented Bitcoin, Satoshi Nakamoto. All that is known is that someone (or some group) published a paper describing the system in 2009 and the Bitcoin software appeared shortly afterward. In the early days of Bitcoin, Nakamoto communicated with other software developers, but by 2010 all communication ceased. Many in the tech community have speculated on who Nakamoto really is, but no one knows for certain. Odd Bitcoin Fact No. 2: Nobody's in Charge
Whoever he/she/they were, the creators of Bitcoin designed it to be essentially autonomous once launched. No individual, group, company, or government controls Bitcoin. (This is why libertarians and anti-government types love Bitcoin.) The idea was to create a currency that avoids the meddling policies of a central bank like the U.S. Federal Reserve, which often tries to "fix" economies by printing more and more of their fiat currencies, thus devaluing existing units of the money. Odd Bitcoin Fact No. 3: The Priciest Pizza Ever
Back in May 2010, an early Bitcoin enthusiast, Lazlo Hanyecz, wanted to prove you could buy something with the digital currency. So he posted a challenge on a Bitcoin Internet forum, and four days later another user accepted. Hanyecz paid 10,000 BTC -worth just $25 total back then - for two "The Works" pizzas from Papa John's. Since then the skyrocketing value of Bitcoin has made those pizzas the most expensive snack of all time. At today's rate of $800 per Bitcoin, those pizzas would be worth a piping hot $8 million.

And we're just getting started... Odd Bitcoin Fact No. 4: What's in a Name?
As Bitcoin evolved and became better known, at least among tech types, people needed a place where they could buy and sell Bitcoin. One of the primary exchanges became Japan-based Mt. Gox. Peculiar name, right? Well, Mt. Gox didn't start out as a Bitcoin exchange, but as a place to trade online playing cards from the game "Magic: The Gathering." So the name actually is an acronym that stands for "Magic The Gathering Online eXchange." Odd Bitcoin Fact No. 5: Free Bitcoins for All!
Many Bitcoin enthusiasts also see themselves as evangelists for the digital currency, and so started setting up "Bitcoin faucets" on websites where people could input a Bitcoin wallet address to receive a very, very tiny amount of free Bitcoin. A typical amount is 20 satoshis, the smallest unit of Bitcoin, as in 0.00000020. To get an idea of how very small this is, if one Bitcoin were worth $1 million, 20 satoshis would be worth ... 20 cents. Still, it's free money! Odd Bitcoin Fact No. 6: Only 21 Million Will Ever Exist
The Bitcoin software is designed to dispense new Bitcoins at an increasingly slowing rate over time until 21 million are mined. At that point, no more will ever be created. Since 2009, more than half - over 12 million - already have been generated. But because of the way the algorithm works, the last batch of Bitcoins won't be mined until the year 2040 -26 years from now. Odd Bitcoin Fact No. 7: Don't Forget Where You Put It
One U.K. man, James Howells, had mined 7,500 Bitcoins on his laptop back in 2009, when such a feat was easy. Howells eventually tired of mining, and when he ruined the laptop by spilling lemonade on it, he dismantled it for parts. This past summer, Howells found the old hard drive - with the Bitcoin keys still on it - in a drawer. He tossed it in the trash, realizing only later that he'd thrown away a fortune - $6 million at today's prices. Unless the hard drive is found, and is still in a state in which the data can be retrieved, those Bitcoins are lost forever. Odd Bitcoin Fact No. 8: Bitcoin Accepted Where?
A lot of stories have been written about how some high-visibility places have agreed to accept Bitcoin as payment, such as a university in Cypress and a Tesla dealership in California. But people can spend Bitcoin on much stranger things, such as plastic surgery in Miami, Alpaca wool socks from Massachusetts, and dating site OKCupid.com. Odd Bitcoin Fact No. 9: To Catch a Thief
Bitcoin developed a tainted reputation early on because of its use by criminals on underground websites like Silk Road to buy illegal drugs and other contraband, supposedly because the digital currency is anonymous. All transactions are recorded and public, although names and other personal information are not included, giving criminals a false sense of security. In fact Bitcoin has turned out to be easier to trace than most thought - certainly easier than cash. Now law enforcement agencies like the FBI and DEA are actually using the information stored in the Bitcoin "blockchain" to catch criminals. Odd Bitcoin Fact No. 10: It's a Global Phenomenon
While more than 90% of Bitcoin trading occurs in U.S. dollars and Chinese yuan, people can exchange Bitcoin for at least two dozen other world currencies, including Argentine pesos, Swiss francs, Polish zlotys, Hong Kong dollars, Israeli shekels, Thai baht, Japanese Yen, Russian rubles, and South African rand. As Bitcoin gains traction in more and more countries, it draws closer to fulfilling its role as an international currency.

Many of the stories people are reading in the mainstream media are misinformed, or just plain wrong. With Bitcoin poised to become a bona fide alternative currency, investors need to be able to separate myth from reality. Here are the seven biggest Bitcoin myths debunked.

Money Morning:
Why Virtual Currency Is Here to Stay - Bitcoin or No Bitcoin

Saturday, December 27, 2014

3 Reasons Twitter's IPO Shouldn't Thrill Average Investors

Twitter Seeks to Avoid Facebook's IPO Stumble With Its Own Debut Bloomberg via Getty Images Ever since Facebook (FB) went public last year, investors have expected Twitter to follow suit. Last week, would-be Twitter buyers got their wish, as the company announced it was going public. The company's method of making the announcement wasn't all that surprising -- Twitter tweeted it. Yet one key fact marked a big change to the IPO process: Investors didn't get access to the IPO filing that companies have to submit to the SEC to get approval to go public. Instead, Twitter took advantage of new legal provisions allowing it to keep its IPO filing on Form S-1 confidential. This less-public method for launching a public offering came from the Jumpstart Our Business Startups Act. Many of the provisions of the JOBS Act allow would-be public companies to prepare for their IPOs differently from how they have in the past -- differences that have major implications for IPO investors seeking to make informed decisions about whether to buy shares of companies that are coming public. 1. Institutional Investors Will Get a New Edge Ordinary investors already suffer from substantial disadvantages in the IPO process. Many underwriting brokers reserve shares of the most-popular IPOs for their select customers, locking out many small investors entirely. As a result, ordinary investors often have to resort to buying shares on the open market after the initial offering, which can involve paying a big premium to the IPO price. Under the JOBS Act, institutional and other preferred customers will get another advantage. Companies considering an IPO will be able to meet with what the law calls qualified institutional buyers to get a sense of their interest in buying shares. That will give those accredited investors and institutions more potential advance notice of a coming IPO, giving them more time to research and investigate the company before the general public even knows an IPO is coming. 2. Expect More Speculation Based on Fewer Facts High-profile IPOs create a lot of hype, especially when the companies involved are in hot sectors of the market. Now that Facebook has finally recovered from its post-IPO collapse and climbed comfortably above its offering price, social-media stocks are hot again. Twitter couldn't have timed its IPO better to get maximum attention from investors. But, without access to Twitter's SEC filing, the professional analysts, journalists, and other commentators whose job it is to help educate investors about the coming initial public offering will have far fewer hard facts at their disposal. Instead, they'll have to turn to less reliable information about the company and its business prospects, potentially creating misleading impressions about the company that will only be rebutted once the SEC filing is made public. Moreover, they'll have less time to critique and challenge Twitter's filing after the confidentiality period ends. In addition, the quality of information won't be as good even once it becomes public. For instance, the JOBS Act allows companies to go public with just two years of financial data, rather than the three to five years of information previously required. In addition, companies are allowed to offer streamlined disclosures about executive compensation and can use an extended phase-in period to start following guidelines on internal controls. All told, the changes will leave you needing to be even more careful to avoid letting hype affect your judgment. 3. Many Companies Will Use IPO Alternatives to Raise Capital One revolutionary move the JOBS Act made was to remove a ban on advertising offerings of private securities. As long as a company can demonstrate that all of its purchasers qualify as accredited investors -- people with high incomes or net worth, as well as certain institutions -- it can solicit and advertise to such purchasers. Moreover, under what's known as the crowdfunding exemption, companies can solicit investment from non-accredited investors. Companies can raise up to $1 million annually, with limits on the amount that any one person can invest based on income and net worth figures. Although companies using the crowdfunding exemption have to file information with the SEC, it's much less extensive than what a full IPO filing would require. Be Careful Out There The JOBS Act made it a lot easier for companies from Twitter to tiny local businesses to raise capital. But the new rules also come with traps for unwary investors. Only by exercising caution can you avoid investing in problematic businesses and make smart moves with your money.

Thursday, December 25, 2014

Carnival Sunk by Profit Warning

LONDON -- The shares of Carnival (LSE: CCL ) (NYSE: CCL ) have dropped 6% as of 9:20 a.m. EDT after the world's largest cruise company issued an overnight profit warning. Carnival, which was rocked last year by the Costa Concordia disaster, said its 2013 earnings would likely be between $1.45 and $1.65 per share. This was reduced from a previous EPS range of $1.80 to $2.10.

Carnival has suffered a string of high-profile calamities recently, including an engine fire on its Triumph cruise ship in February that left 4,000 passengers adrift for five days without adequate sanitation or electricity.

In light of these PR disasters, the cruise company has slashed ticket prices in an attempt to attract wary passengers. Carnival said that despite increasing cruise-booking volumes, this ticket-pricing policy had led to lower-than-expected revenues.

To make matters worse, the company said it expected higher operating costs and worse-than-expected voyage cancellations to wipe a further $0.10 from this year's per-share earnings.

With a market cap of £4.5 billion, Carnival's shares trade at 22 times expected earnings and offer a prospective dividend yield of 3.3%. Of course, whether that valuation, today's update, and the future prospects for the cruise industry all combine to make shares of Carnival a buy remains your decision.

However, if you're looking for a higher-yielding investment opportunity, you may want to look at "The Motley Fool's Top Income Stock For 2013." The Fool's choice has one of the most impressive dividend track records on the London market and provides a market-beating 5% yield. Just click here to download your free report!

CEO Gaffe of the Week: Abercrombie & Fitch

Last year, I introduced a weekly series called "CEO Gaffe of the Week." Having come across more than a handful of questionable executive decisions when compiling my list of the worst CEOs of 2011, I thought it could be a learning experience for all of us if I pointed out apparent gaffes as they occur. Trusting your investments begins with trusting the leadership at the top -- and with leaders like these on your side, sometimes you don't need enemies!

This week, we'll take a look at Abercrombie & Fitch (NYSE: ANF ) CEO Mike Jeffries and examine why it's important to think before opening your mouth.

The dunce cap
Make no mistake about it; the retail environment is highly competitive. It's not uncommon for apparel retailers to experience peaks and troughs concurrent with consumer spending, but it's even tougher for teen retailers like Abercrombie that rely on teen spending (and their parents' credit cards) to drive their business.

Teens are a fickle group of shoppers because fashion can change in a heartbeat and many still don't truly understand "value" when it comes to making a purchase. Aeropostale (NYSE: ARO ) , for instance, excelled last decade by relying on deep discounts to drive quick turnover of its products. While these discounts hurt its margins, the sheer volume it was moving made up for its lower margins. Lately, though, its styles have failed to hit home with teens, causing its inventory levels to build and its growth to be sluggish.

Similarly, American Eagle Outfitters (NYSE: AEO ) has struggled to connect with the younger generation with its direct-to-consumer business, lagging behind many of its peers despite hitting a nice mid-tier pricing niche. Not surprisingly, its forecast in March disappointed existing shareholders.

Then there's Abercrombie & Fitch, whose exposure to a troubled European market has hurt its bottom line and slowed its expansion. Domestically, A&F has benefited from the attrition caused by the closure of numerous Pacific Sunwear (NASDAQ: PSUN ) locations as the struggling teen apparel retailer attempts to rein in expenses, and even from the struggles of J.C. Penney (NYSE: JCP ) , whose sale-on, sale-off pricing strategy drove customers out of its stores and to competitors like Abercrombie. But even this hasn't been enough to keep A&F from closing stores in an effort to control costs. In fact, Abercrombie's EPS forecast for the upcoming year was $0.23 below Wall Street's estimates at the midpoint, even with the cost savings from closing 40 to 50 projected stores this year.

To the corner, Mr. Jeffries
You might say that Abercrombie's turnaround is still in a fragile state, so it certainly couldn't afford any goof-ups, especially from its CEO, Mike Jeffries. However, in recent weeks an interview has resurfaced that Mike Jeffries did with news website Salon in 2006, in which he was quoted as saying:

In every school there are the cool and popular kids, and then there are the not-so-cool kids. Candidly, we go after the cool kids. We go after the attractive All-American kid with a great attitude and a lot of friends. A lot of people don't belong [in our clothes], and they can't belong. Are we exclusionary? Absolutely.

And that's how you anger an entire nation in just a matter of a few sentences! The resurfacing of this interview proves that a public figure like Jeffries can't simply escape what's been previously disseminated via social media, and that CEOs really need to watch what they say. In response to his comments' reemergence, those most angered by Jeffries' message are ensuring that homeless people, for instance, are receiving A&F clothing donated by people infuriated with the CEO's comments.

Jeffries has since apologized for his comments seven years ago and claims that Abercrombie is doing nothing more than marketing to a specific group of individuals similar to the strategy of many other apparel retailers. Jeffries also claims that discrimination of any form would be opposed by the company. Yet, seven years after Jeffries' comments, we still see that men can get XL and XXL sizes in A&F stores, yet women aren't able to get anything in XL or XXL sizes.

The epidemic of foot-in-mouth syndrome has claimed another victim in Mike Jeffries and earned him the title of "worst human in retail" on many social networking sites. It's a title that'd be hard to argue against.

Do you have a CEO you'd like to nominate for this dubious honor? Shoot me an email and a one- or two-sentence description of why your choice deserves next week's nomination, and you just may see your suggestion in the spotlight.

Will this retailer's turnaround ever take shape?
J.C. Penney's stock cratered under Ron Johnson's leadership, but could new CEO Mike Ullman present the opportunity investors have been waiting for? If you're wondering whether J.C. Penney is a buy today, you're invited to claim a copy of The Motley Fool's must-read report on the company. Learn everything you need to know about JCP's turnaround -- or lack thereof. Simply click here now for instant access.

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More Expert Advice from The Motley Fool

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

Wednesday, December 24, 2014

How to Pick the Best Dividend Stocks

A portfolio of solid dividend stocks is one of the most surefire ways to create wealth over the long run. Dividend payers generally outperform their non-dividend-paying counterparts, and they also tend to be less volatile, helping to ensure a good night's sleep.

Source: 401kcalculator.org via Flickr.

But how do you know which dividend stocks to pick for your portfolio? Here are a few things to keep in mind when making your next investment in a dividend stock.

When will you need the income?
One of the most important considerations when formulating a dividend strategy is your investment time frame. Someone with 30 years before retirement can afford to accept a lower dividend and a little more risk, while those who plan to retire soon need to think more about their current income.

On that note, don't ignore stocks just because their dividends are low. Some stocks that yield around 2% are among the best dividend investments on the market because their dividends are raised regularly and substantially. Sure, a 2% annual yield now isn't much, but if the company boosts the dividend by 8% per year, in 30 years you'll be receiving yearly income equal to more than 20% of your initial investment.

Low-paying dividend stocks can still make great investments if they have a solid track record of raising their dividend -- 25 consecutive years or more is a good rule of thumb. A healthy payout ratio is important as well. The payout ratio shows us how much of its earnings a company pays out as dividends. So a stock that pays $1 in dividends in 2014 and earned $2 per share has a 50% payout ratio. A high payout ratio can mean a stock could have trouble paying out its dividend in the future, whereas a lower payout ratio indicates that the dividend is sustainable and has room to grow. A payout ratio of less than 60% is generally preferable.

Two names that immediately come to mind are Colgate-Palmolive and Wal-Mart, both of which pay about 2% but are excellent long-term dividend stocks, based on the characteristics I just mentioned.. These two companies have raised their dividends for decades, and . And, their respective payout ratios are 49% and 38%, based on the current year's expected earnings.

Of course, if you need income now (or in the near future), you may want to look at some of the dividend aristocrats with slightly higher payouts. For example, Consolidated Edison (NYSE: ED ) has a 3.8% yield, has paid out less than 60% of its trailing 12-month earnings, and has raised its dividend for 39 consecutive years.

The past tends to repeat itself
I mentioned looking for companies with a solid track record of dividend increases. Well, there is a group of companies, known as the Dividend Aristocrats, that have raised their payouts for at least 25 consecutive years, no matter what the economy or the rest of the market is doing. While past performance is no guarantee of future results, if a stock behaves a certain way for a number of years, chances are it will keep doing so. This is particularly true of older, established companies like the two I mentioned above.

Some of these companies have impressive track records. For example, Procter & Gamble and 3M have both raised their dividends every year for nearly six decades. You can see a full list of the Dividend Aristocrats here, and there are plenty to choose from.

PG Dividends Paid (TTM) Chart

Beware of extremely high yields
Don't those mortgage REITs and business development companies look tempting with their double-digit dividend yields? How about beaten-down energy stocks like Transocean, which has a yield of 17.3% as of this writing?

While some of these super-high-yield stocks can make good speculative investments, they have no place in a retirement portfolio, where you generally keep money you can't afford to lose. There are a few reasons that a stock's yield can be too high, making the stock a bad fit for retirement.

For example, if a stock has declined in price recently, like the aforementioned Transocean, the high yield is a result of a problem with the company or an industry. A stock may also produce a high yield if it is in an inherently risky industry, such as mortgage real-estate investment trusts and business development companies. These types of stocks tend to be very reactive to market conditions, and as a result, their profits can be fragile. For example, mortgage REITs are sensitive to changes in interest rates.

A recipe for success
A well-constructed portfolio of rock-solid dividend stocks is a great way to create wealth over the long run. Many investors consider stocks like these to be "boring," but I disagree.

As a final thought, consider that I have named nine stocks here as good examples of solid dividend investments. Every single one of them beat the S&P 500's total return over the past 20 years. That's saying something, because the S&P averaged a 9.6% annual return during that time period. Returns like these can really add up over long periods of time.

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Tuesday, December 23, 2014

Ron Muhlenkamp's Quarterly Memorandum To Investors

My first draft of this letter, which I wrote three weeks ago began with:

Europe has not solved its problems Nor has Japan; Nor has China; Nor has the U.S.

The rest of that draft is now obsolete.

Since mid-September, several items have changed—some economic, some market-related, some psychological.

Economically…

The International Monetary Fund (IMF) has lowered its estimate of world Gross Domestic Product (GDP) growth going forward. Germany (the strongest economy in Europe) has reported disappointing numbers, particularly in capital goods. It looks like Europe is back in recession. The U.S. Federal Reserve Bank (Fed) lowered its estimates of U.S. GDP growth for the next four years. Crude oil, which was trading in a range of $100-$110/barrel, fell to $82/barrel The surprise was an announcement by Saudi Arabia that they would not try to keep the price above $100/barrel. This is a change from their prior policy.

Markets…

Many hedge funds are having a poor year and are facing redemptions. CalPERS (California Public Employees' Retirement System) announced that they were withdrawing $25 billion from hedge funds. This drives "forced selling" by those funds. The difficulty is estimating the size of the forced selling. Ten-year U.S. Treasury bond yields fell from a range of 2.40%-2.6% to (briefly) below 2 percent. A huge move in a short period of time, the headline is "A Flight to Quality."

(Mostly) Psychological…

The battle against ISIS in the Middle East. Ebola and the Centers for Disease Control (CDC): It appears that the Center is not prepared for disease control.

All of this together resulted in stock market declines of 7-12% in a month, depending on which index you measure. The size of this "correction" was not unexpected, but the short time frame was unusual. On some days the forced selling appeared to feed on itself and bordered on panic liquidation. As I write this letter on 10/17, this selling has abated, at least for the time being. The good news is that we raised some cash coming into this period, and

Monday, December 22, 2014

Now That’s a Volatile Market: Dow Gains 216 Points, Ninth 200-Point Move This Month

When they said volatility had returned to the stock market, they weren’t kidding.

BRENDAN MCDERMID

The Dow Jones Industrial Average gained 216.58 points, or 1.3%, to 16,577.90 today, the ninth move of 200 points or more in either direction in 17 trading days so far this month. Not only is that more than the seven such days that had occurred previously in 2014, you have to go back to August 2011, when there were 10 such days, to find more (and that took an entire month to accomplish).

The S&P 500, meanwhile, gained 1.2% to 1,950.82, the Nasdaq Composite advanced 1.6% to 4,452.79 and the small-company Russell 2000 finished up 1.8% at 1,116.49.

Why is the market surging? Top-notch earnings from big Dow components like Caterpillar (CAT) and 3M (MMM), and a dividend increase from Visa (V) certainly have helped, as these are some of the priciest stocks in the price-weighted Dow. And then there’s the economic data. US jobless claims rose to 283,000, a tad bit higher than expected but still ridiculously low. Global purchasing managers’ indexes also showed signs of improvement, especially in Europe. If the recent selloff was a “growth scare,” then perhaps growth isn’t as scary as many investors thought.

ISI Group’s Dennis DeBusschere, however, worries that the stronger-than-expected growth out of Europe could ultimately be bad news for the markets:

We have been of the opinion that Fed actions are less important today than they have been over the past few years as markets are now priced to a point where we need to see growth not just easy policy. That is not as true for the Eurozone, so these better than expected manufacturing data could be considered negative for risk assets if they further slow the progress of fiscal reforms and monetary stimulus.

Marketfield’s Michael Shaoul and team are pleased with the state of corporate earnings but worry that the market could retest its recent lows:

Although US and other global markets have enjoyed a powerful rally off last week's lows, our assumption is that this corrective phase is yet to full run its course. Indeed our "1997 playbook", which continues to prove to be a useful guide, would suggest that we may still have to endure a number of weeks of messy choppy markets. What has been established over the last two weeks is that key support resides at the 1820 level, with Thursday's "retest low" at 1835 marking another very important level to watch. Similarly the failure to cross 1950 in yesterday's session (the index peaked at 1949.31) marks this as important near term resistance that presumably extends in a range all the way up to the 50-day ma at 1966.7…

We believe it would take "new news" to break last week's support and are therefore relieved that by and large corporate earnings have been strong in the current earnings season and have generally confirmed the strength of domestic US economic data which preceded it. We therefore doubt that the corporate sector will supply a "knockout blow" to the market but we are open to the possibility that events elsewhere may provoke another wave of selling.

And even then, it might prove to be another opportunity to buy.

5 Short-Squeeze Stocks Set to Soar on Bullish Earnings

DELAFIELD, Wis. (Stockpickr) -- Short-sellers hate being caught short a stock that reports a blowout quarter. When this happens, we often see a tradable short squeeze develop as the bears rush to cover their positions to avoid big losses. Even the best short-sellers know that it's never a great idea to stay short once a bullish earnings report sparks a big short-covering rally.

Must Read: 5 Breakout Stocks Under $10 Set to Soar

This is why I scan the market for heavily shorted stocks that are about to report earnings. You only need to find a few of these stocks in a year to help enhance your portfolio returns -- the gains become so outsized in such a short time frame that your profits add up quickly.
 

That said, let's not forget that stocks are heavily shorted for a reason, so you have to use trading discipline and sound money management when playing earnings short-squeeze candidates. It's important that you don't go betting the farm on these plays and that you manage your risk accordingly. Sometimes the best play is to wait for the stock to break out following the report before you jump in to profit off a short squeeze. This way, you're letting the trend emerge after the market has digested all of the news.
 

Of course, sometimes the stock is going to be in such high demand that you risk missing a lot of the move by waiting. That's why it can be worth betting prior to the report -- but only if the stock is acting technically very bullish and you have a very strong conviction that it is going to rip higher. Just remember that even when you have that conviction and have done your due diligence, the stock can still get hammered if Wall Street doesn't like the numbers or guidance.
 

If you do decide to bet ahead of a quarter, then you might want to use options to limit your capital exposure. Heavily shorted stocks are usually the names that make the biggest post-earnings moves and have the most volatility. I personally prefer to wait until all the earnings-related news is out for a heavily shorted stock and then jump in and trade the prevailing trend.

With that in mind, here's a look at several stocks that could experience big short squeezes when they report earnings this week.

Must Read: 4 Stocks Spiking on Big Volume

KH Home

My first earnings short-squeeze play is homebuilding player KB Home (KBH), which is set to release numbers on Wednesday before the market open. Wall Street analysts, on average, expect KB Home to report revenue of $646.76 million on earnings of 40 cents per share.

The current short interest as a percentage of the float for KB Home is extremely high at 21.2%. That means that out of the 80.51 million shares in the tradable float, 17.13 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 2.7%, or by 454,000 shares. If the bears get caught pressing their bets into a bullish quarter, then shares of KBH could easily rip sharply higher post-earnings as the shorts jump to cover some of their trades.

From a technical perspective, KBH is currently trending just below both its 50-day and 200-day moving averages, which is bearish. This stock has been trending sideways over the last month and change, with shares moving between $16.06 on the downside and $17.94 on the upside. Any high-volume move above the upper-end of its recent range post-earnings could trigger a near-term breakout trade for shares of KBH.

If you're bullish on KBH, then I would wait until after its report and look for long-biased trades if this stock manages to break out above some near-term overhead resistance levels at $17.60 to $17.94 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 3.16 million shares. If that breakout starts post-earnings, then KBH will set up to re-test or possibly take out its next major overhead resistance levels at $18.47 to $18.96 a share, or even $19.38 to its 52-week high at $20.78 a share.

I would simply avoid KBH or look for short-biased trades if after earnings it fails to trigger that breakout and then drops back below some key near-term support levels at $16.66 to $16.06 a share with high volume. If we get that move, then KBH will set up to re-test or possibly take out its next major support level at its 52-week low of $15.40 a share.

Must Read: 5 Rocket Stocks Ready for Blastoff This Week

CarMax

Another potential earnings short-squeeze trade idea is used car retailer CarMax (KMX), which is set to release its numbers on Tuesday before the market open. Wall Street analysts, on average, expect CarMax to report revenue $3.57 billion on earnings of 67 cents per share.

The current short interest as a percentage of the float for CarMax is notable at 6.1%. That means that out of the 218 million shares in the tradable float, 13.48 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 2.2%, or by 289,000 shares. If the bears get caught pressing their bets into a strong quarter, then shares of KMX could easily jump sharply higher post-earnings as the shorts rush to cover some of their positions.

From a technical perspective, KMX is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending for the last month and change, with shares moving higher from its low of $46.64 to its recent high of $54.28 a share. During that uptrend, shares of KMX have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of KMX within range of triggering a big breakout trade post-earnings.

If you're in the bull camp on KMX, then I would wait until after its report and look for long-biased trades if this stock manages to break out above some near-term overhead resistance levels at $54.01 to its 52-week high of $54.28 a share with high volume. Look for volume on that move that registers near or above its three-month average volume of 1.52 million shares. If that breakout develops post-earnings, then KMX will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $60 to $65 a share, or even $70 a share.

I would simply avoid KMX or look for short-biased trades if after earnings it fails to trigger that breakout and then drops back below its 50-day moving average of $51.47 a share and then below more near-term support at $51 a share with high volume. If we get that move, then KMX will set up to re-test or possibly take out its next major support levels at $48.64 to its 200-day moving average of $48.02 a share. Any high-volume move below those level will then give KMX a chance to re-fill some of its previous gap-up-day zone from June that started just above $45 a share.

Must Read: 5 Stocks to Trade for Big Breakout Gains

Bed Bath & Beyond

Another potential earnings short-squeeze candidate is home furnishing retail chain store operator Bed Bath & Beyond (BBBY), which is set to release numbers on Tuesday after the market close. Wall Street analysts, on average, expect Bed Bath & Beyond to report revenue of $2.89 billion on earnings of $1.14 per share.

The current short interest as a percentage of the float for Bed Bath & Beyond is pretty high at 12.4%. That means that out of the 192.23 million shares in the tradable float, 23.90 million shares are sold short by the bears. If the bulls can get the earnings news they're looking for, then shares of BBBY could easily rip sharply higher post-earnings as the bears move fast to cover some of their short positions.

From a technical perspective, BBBY is currently trending above its 50-day moving average and just below its 200-day moving average, which is neutral trendwise. This stock has been uptrending strong for the last two month and change, with shares moving higher from its low of $54.96 to its recent high of $66 a share. During that uptrend, shares of BBBY have been consistently making higher lows and higher highs, which is bullish technical price action. That strong move has now pushed shares of BBBY within range of triggering a big breakout trade post-earnings.

If you're bullish on BBBY, then I would wait until after its report and look for long-biased trades if this stock manages to break out above its 200-day moving average of $65.47 a share and then above more near-term resistance at $66 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 3.26 million shares. If that breakout kicks off post-earnings, then BBBY will set up to re-test or possibly take out its next major overhead resistance levels at $70.98 to $72 a share. Any high-volume move above $72 will then give BBBY a chance to re-fill some of its previous gap-down-day zone from January that started just above $80 a share.

I would avoid BBBY or look for short-biased trades if after earnings it fails to trigger that breakout and then drops back below some key near-term support levels at $63.48 a share to its 50-day moving average of $63.18 a share with high volume. If we get that move, then BBBY will set up to re-test or possibly take out its next major support levels at $61.03 to $57.87 a share, or even its 52-week lowof $54.96 a share.

Must Read: 10 Stocks Billionaire John Paulson Loves in 2014

Paychex

Another earnings short-squeeze prospect is staffing and outsourcing services player Paychex (PAYX), which is set to release numbers on Wednesday before the market open. Wall Street analysts, on average, expect Paychex to report revenue of $662.62 million on earnings of 46 cents per share.

The current short interest as a percentage of the float for Paychex is notable at 5.4%. That means that out of the 324.52 million shares in the tradable float, 17.83 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 1.9%, or by 339,000 shares. If the bears get caught pressing their bets into a strong quarter, then shares of PAYX could easily trend sharply higher post-earnings as the shorts rush to cover some of their positions.

From a technical perspective, PAYX is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending over the last four months and change, with shares moving higher from its low of $39.09 to its recent high of $41.17 a share. During that uptrend, shares of PAYX have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of PAYX within range of triggering a big breakout trade post-earnings above some key overhead resistance levels.

If you're bullish on PAYX, then I would wait until after its report and look for long-biased trades if this stock manages to break out above some near-term overhead resistance levels at $43.17 to $44.76 a s share and then above its 52-week high at $45.95 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 1.83 million shares. If that breakout gets underway post-earnings, then PAYX will set up to enter new 52-week-high territory above $45.95, which is bullish technical price action. Some possible upside targets off that breakout are $50 to $55 a share, or even $60 a share.

I would simply avoid PAYX or look for short-biased trades if after earnings it fails to trigger that breakout and then takes out its 50-day moving average of $41.80 a share to its 200-day moving average of $41.44 a share with high volume. If we get that move, then PAYX will set up to re-test or possibly take out its next major support levels at $40.10 to its 52-week low of $39.21 a share.

Must Read: 4 Stocks Spiking on Big Volume

AAR

My final earnings short-squeeze play is diversified commercial aviation products and services provider AAR (AIR), which is set to release numbers on Tuesday after the market close. Wall Street analysts, on average, expect AAR Corp. to report revenue of $489.53 million on earnings of 38 cents per share.

The current short interest as a percentage of the float for AAR is notable at 6.8%. That means that out of the 36.45 million shares in the tradable float, 2.5 million shares are sold short by the bears. This is a decent short interest on a stock with a low tradable float. Any bullish earnings could easily spark a tradable short-covering rally for shares of AIR post-earnings as the bears rush to cover some of their positions.

From a technical perspective, AIR is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending over the last three months and change, with shares moving higher from its low of $23.68 to its recent high of $29.05 a share. During that uptrend, shares of AIR have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of AIR within range of triggering a big breakout trade post-earnings.

If you're in the bull camp on AIR, then I would wait until after its report and look for long-biased trades if this stock manages to break out above some near-term overhead resistance at $29.05 to $31.24 a share and then above its 52-week high at $31.55 a share with high volume. Look for volume on that move that registers near or above its three-month average action of 217,333 shares. If that breakout materializes post-earnings, then AIR will set up to enter new 52-week-high territory above $31.55, which is bullish technical price action. Some possible upside targets off that breakout are $40 to $45 a share.

I would avoid AIR or look for short-biased trades if after earnings it fails to trigger that breakout, and then drops back below both its 50-day at $27.38 and its 200-day at $27.14 a share with high volume. If we get that move, then AIR will set up to re-test or possibly take out its next major support levels at $25.47 to its 52-week low of $23.74 a share.

Must Read: Warren Buffett's Top 10 Dividend Stocks

To see more potential earnings short squeeze plays, check out the Earnings Short-Squeeze Plays portfolio on Stockpickr.

-- Written by Roberto Pedone in Delafield, Wis.

Sunday, December 21, 2014

Money-Management Advice for College Students

Every year at the end of the summer I take our Kiplinger interns out to lunch and ask them two general questions: What did you learn about personal finance during your time with us, and what advice would you give your fellow college students about managing money?

Why Your Local Redbox Kiosk Just Disappeared

Redbox movie rental kiosk in a grocery store John Greim/LightRocket via Getty Images Don't be surprised if you're walking into a store and see an empty space where a Redbox machine used to be. Outerwall (OUTR) -- the parent company behind the once popular disc-renting kiosks -- is starting to scale back its operations after years of growth. It was a rough second quarter for Redbox with just 169.3 million rentals of DVDs, Blu-rays, and video games. That may seem like a big number, but it was 9.3 percent lower than the tally a year earlier. Outerwall blames Hollywood for supplying them with weak films. The new movies hitting the DVD and Blu-ray market during the period rang up 37.5 percent fewer ticket sales in North America during their theatrical runs than those released in the second quarter of 2013, and box office is a big driver for Redbox rentals. Nobody wants to rent what nobody wanted to see at the multiplex. Things were particularly hard for the month of June when just four major releases hit the video market. There could also be a bigger trend in play here. Redbox was the welcome beneficiary of Blockbuster's demise and Netflix's (NFLX) move to shift emphasis to its popular streaming platform. Former Blockbuster fans, or those who were upset by Netflix's choice to sell its DVD and streaming offerings separately fell into the waiting arms of Redbox's automated kiosks. However, now that the post-Blockbuster gains have been absorbed, and the period of Netflix defection has subsided (the number of Netflix disc subscribers has fallen by more than half to 6.3 million) there's no more easy growth to be had for Outerwall's fleet of Redbox machines. Another sign that the issue isn't just a bad few months of movies is that Outerwall now expects to close out the year with as many as 700 fewer Redbox kiosks in operation in the U.S. market. The net reduction of 500 to 700 machines may not seem like a lot for a company with more than 42,000 kiosks in operation. That's less than 2 percent of its stateside empire, but it could be the beginning of the end. Shrinking your footprint isn't something you do if you think the slide in rentals was a fluke. We're streaming more content, and while the company formerly known as Coinstar has a Web-based media play, it wouldn't be a surprise if keeps closing more kiosks in the future if demand continues to dry up. In the meantime Redbox is also entertaining a rental price increase later this year. It's hard to endorse that decision at a time when rentals are slipping -- but at the same time it's also hard to fault Outerwall for trying to milk the most that it can out of its DVD rentals while watching films on those discs is still something that people do. More from Rick Aristotle Munarriz
•Last Week's Top Stock Movers: Scanning for Profits; ITT Fails •Zynga and Groupon Are the Duds of the IPO Class of 2011 •Wall Street This Week: Are SeaWorld, King Recovering?

Saturday, December 20, 2014

House Panel Passes Cybersecurity Bills

The House Committee on Homeland Security passed late Monday three bipartisan cybersecurity-related bills.

H.R. 3696, the National Cybersecurity and Critical Infrastructure Protection Act (NCCIP) and H.R. 2952, The Critical Infrastructure Research and Development Advancement Act of 2013 passed by a voice vote, while H.R. 3107, the Homeland Security Cybersecurity Boots-on-the-Ground Act, passed by a vote of 395-8.

The committee’s chairman, Michael McCaul, R-Texas, said in a statement after the bills passed that the National Cybersecurity and Critical Infrastructure Protection Act, which he introduced, was “an important step toward addressing the cyber threat.” The bipartisan bill, he said, “establishes a true partnership between DHS [Department of Homeland Security] and the private sector to ensure the distribution of real-time cyber threat information in order to secure our nation in cyberspace without burdensome mandates or regulations.”

Ranking member Bennie Thompson, D-Miss., added in the statement that with the bills’ passage, “the House will have taken meaningful action to move the ball forward on improving our Nation’s cybersecurity posture.” Noting passage of the Homeland Security Cybersecurity Boots-on-the-Ground Act, Thompson said that the success of DHS “depends on how well it recruits, hires and trains its cyber work force.”

The bill requires the secretary of Homeland Security to establish cybersecurity occupation classifications, assess the cybersecurity work force, develop a strategy to address identified gaps in the cybersecurity workforce, and for other purposes.

The Critical Infrastructure Research and Development Advancement Act amends the Homeland Security Act of 2002 to make certain improvements in the laws relating to the advancement of security technologies for critical infrastructure protection.

The Senate Select Committee on Intelligence passed July 8 the Cybersecurity Information Sharing Act of 2014, legislation that was introduced June 17 by committee chairwoman Dianne Feinstein, D-Calif., and Senate Intelligence Committee Vice Chairman Saxby Chambliss, R-Ga. The bill was referred to the full Senate.

The Financial Services Roundtable and the Securities Industry and Financial Markets Association had urged the committee in early July to pass the bill, as the two groups said it would further strengthen the ability of the private sector and the federal government to work together to develop a more effective information sharing framework to respond to cyber threats.

---

Check out Cybersecurity Is Advisors’ Hottest Compliance Topic: IAA Survey on ThinkAdvisor.

Friday, December 19, 2014

5 Stocks Under $10 Triggering Breakout Trades

 DELAFIELD, Wis. (Stockpickr) -- At Stockpickr, we track daily portfolios of stocks that are the biggest percentage gainers and the biggest percentage losers.

>>5 Stocks Set to Soar on Bullish Earnings

Stocks that are making large moves such as these are favorites among short-term traders because they can jump into these names and try to capture some of that massive volatility. Stocks that are making big-percentage moves either up or down are usually in play because their sector is becoming attractive or they have a major fundamental catalyst such as a recent earnings release. Sometimes stocks making big moves have been hit with an analyst upgrade or an analyst downgrade.

Regardless of the reason behind it, when a stock makes a large-percentage move, it is often just the start of a new major trend -- a trend that can lead to huge profits. If you time your trade correctly, combining technical indicators with fundamental trends, discipline and sound money management, you will be well on your way to investment success.

>>5 Rocket Stocks to Buy for Summer Gains

With that in mind, let's take a closer look at a several stocks under $10 that are making large moves to the upside.

BG Medicine

BG Medicine (BGMD), a diagnostics company, develops and commercializes novel cardiovascular diagnostic tests to address unmet medical needs in the U.S. This stock closed up 3.9% to $1.05 in Tuesday's trading session.

Tuesday's Range: $1.00-$1.05

52-Week Range: $0.55-$2.42

Tuesday's Volume: 187,000

Three-Month Average Volume: 1.89 million

From a technical perspective, BGMD ripped higher here right above some near-term support at 96 cents per share with lighter-than-average volume. This stock recently formed a double bottom chart pattern at 96 cents per share. Following that bottom, shares of BGMD have started to spike higher off that support level and it's quickly moving within range of triggering a near-term breakout trade. That trade will hit if BGMD manages to take out both its 50-day at $1.06 and its 200-day at $1.09 with high volume.

Traders should now look for long-biased trades in BGMD as long as it's trending above major support at 96 cents per share and then once it sustains a move or close above those breakout levels with volume that hits near or above 1.89 million shares. If that breakout gets underway soon, then BGMD will set up to re-test or possibly take out its next major overhead resistance levels at $1.24 to $1.30. Any high-volume move above those levels will then give BGMD a chance to tag $1.40 to $1.50.

EveryWare Global

EveryWare Global (EVRY) provides tabletop and food preparation products for the consumer, foodservice and specialty markets. This stock closed up 3.2% to $2.89 in Tuesday's trading session.

Tuesday's Range: $2.63-$2.99

52-Week Range: $0.67-$13.74

Tuesday's Volume: 536,000

Three-Month Average Volume: 701,958

From a technical perspective, EVRY jumped higher here right above some near-term support at $2.50 with lighter-than-average volume. This solid move to the upside on Tuesday is starting to push shares of EVRY within range of triggering a near-term breakout trade. That trade will hit if EVRY manages to take out some key near-term overhead resistance levels at $3 to $3.30 with high volume.

Traders should now look for long-biased trades in EVRY as long as it's trending above some near-term support at $2.50 or above more support at $2.26 and then once it sustains a move or close above those breakout levels with volume that hits near or above 701,958 shares. If that breakout kicks off soon, then EVRY will set up to re-test or possibly take out its next major overhead resistance levels at $3.94 to $4, or even $4.20.

ZBB Energy

ZBB Energy (ZBB) develops, manufactures and sells distributed energy storage solutions and systems based upon the proprietary zinc bromide rechargeable electrical energy storage technology and power electronics systems in the U.S. and internationally. This stock closed up 3.6% to $1.69 Tuesday's trading session.

Tuesday's Range: $1.62-$1.71

52-Week Range: $0.40-$4.75

Tuesday's Volume: 603,000

Three-Month Average Volume: 613,887

From a technical perspective, ZBB spiked notably higher here back above its 50-day moving average of $1.66 with decent upside volume. This stock recently formed a double bottom chart pattern at $1.50 to $1.51. Following that bottom, shares of ZBB have started to uptick and move within range of triggering a major breakout trade. That trade will hit if ZBB manages to take out Tuesday's intraday high of $1.71 to some more near-term overhead resistance at $1.82 with high volume.

Traders should now look for long-biased trades in ZBB as long as it's trending above Tuesday's intraday low of $1.62 or above those double bottom support zones and then once it sustains a move or close above those breakout levels with volume that hits near or above 613,887 shares. If that breakout triggers soon, then ZBB will set up to re-test or possibly take out its next major overhead resistance levels at $2.03 to $2.13. Any high-volume move above those levels will then give ZBB a chance to tag $2.55.

Magnegas

Magnegas (MNGA), an alternative energy company, closed up 7.5% to $1.56 in Tuesday's trading session.

Tuesday's Range: $1.43-$1.58

52-Week Range: $0.40-$2.45

Tuesday's Volume: 2.61 million

Three-Month Average Volume: 1.24 million

From a technical perspective, MNGA ripped sharply higher here right off its 50-day moving average of $1.44 with above-average volume. This move pushed shares of MNGA into breakout territory, since the stock took out some near-term overhead resistance at $1.54. Market players should now look for a continuation move to the upside in the short-term if MNGA manages to clear Tuesday's intraday high of $1.58 with strong volume.

Traders should now look for long-biased trades in MNGA as long as it's trending above its 50-day at $1.44 and then once it sustains a move or close above $1.58 with volume that hits near or above 1.24 million shares. If that move gets underway soon, then MNGA will set up to re-test or possibly take out its next major overhead resistance levels at $1.65 to $1.77, or even $1.83. Any high-volume move above $1.83 will then give MNGA a chance to tag its 52-week high at $2.45.

Aviat Networks

Aviat Networks (AVNW) designs, manufactures, and sells a range of wireless networking products, solutions, and services in North America and Internationally. This stock closed up 2.4% to $1.25 in Tuesday's trading session.

Tuesday's Range: $1.17-$1.26

52-Week Range: $0.99-$2.82

Tuesday's Volume: 639,000

Three-Month Average Volume: 862,897

From a technical perspective, AVNW trended higher here right off its 50-day moving average of $1.16 with decent upside volume. This stock recently formed a major bottoming chart pattern at $1.13, $1.15 and $1.14 a share. Following that bottom, shares of AVNW have started to spike higher and move back above its 50-day moving average. That move is quickly pushing shares of AVNW within range of triggering a major breakout trade. That trade will hit if AVNW manages to take out some key near-term overhead resistance levels at $1.30 to $1.35 with high volume.

Traders should now look for long-biased trades in AVNW as long as it's trending above its 50-day at $1.16 or above those major bottom support levels and then once it sustains a move or close above those breakout levels with volume that hits near or above 862,897 shares. If that breakout materializes soon, then AVNW will set up to re-fill some of its previous gap-down-day zone from May that started at $1.58.

To see more stocks that are making notable moves higher, check out the Stocks Under $10 Moving Higher portfolio on Stockpickr.

-- Written by Roberto Pedone in Delafield, Wis.

The Debt Secrets Every Kid Should Know

Debt is a four-letter word, and your kids need to know it. The current public mood on debt ranges between loathing and fear. Nearly 20% of American adults expect to die with debts unpaid and a third of teens -- perhaps because they've seen their elders saddled with lifelong debts -- say taking on debt for college is "not worth it."

Too much debt is a disaster, no doubt. But a carefully handled loan can help a young person get a degree, and a healthy credit score is crucial to finding a place to live and even getting a job. Steer your kids in the right direction by teaching them these debt "secrets" and backing them up with practical experience.

Credit costs money
You and I know that credit isn't free, but kids need to understand that borrowing money is not like borrowing a classmate's pen -- unless that classmate charges a fee for lending out pens.

For younger kids and tweens, Northwestern Mutual's financial literacy site, TheMint, has a simple debt calculator to make this point. Kids can purchase fictional concert tickets, a vacation, a car, or textbooks on credit and see how much they'll really pay compared to the cash price.

Teenagers need a different spin on this lesson. They may know intellectually that credit costs money, but the allure of a shiny card is strong. I've found a quick way to cool off a credit-dazzled teen: Have him or her read a card application's fine print out loud to you -- especially the sections about interest rates, late fees, and rate hikes. Now it's not just you saying that credit costs money. They're getting it straight from the credit card issuer and hearing it in their own voice.

Debt can hang on after the thrill is gone
Brooklyn-based educational hip-hop video producer Flocabulary shares the sad tale of Melvin, who racks up credit card debt and wrecks his credit rating over Super Bowl tickets. Lana, meanwhile, does her credit card homework and spends carefully to avoid regret.

Image courtesy of Flocabulary

The clip shows kids they could be paying for a game, concert, or toy on credit long after they're over it. For teens, the takeaway is that badly managed credit card debt can hinder their independence by keeping them from getting their own place or car.

Borrow what you need, not what you can get
Make sure your kids understand that if they have good credit, lenders may be willing to offer them a bigger loan than they need, because the more they borrow, the more the lender makes on interest. For young kids, a good analogy is birthday cake. One slice is great, but eating the whole thing will make them sick. As Warren Buffett tells the readers of the Secret Millionaires Club, "Credit cards can seem like an easy way to buy things, but it's not a good idea to make a habit of using them. The chains of habit are too light to be felt until they're too heavy to be broken."

Teenagers can usually grasp the idea of keeping something back. For example, maybe you could get a loan to buy a high-end sports car. But if you take out a smaller loan for a compact car, you've got borrowing power in reserve for college loans or unforeseen emergencies down the road.

Real-life practice: Give your kid a loan
Whenever you hear, "Please! I swear I'll pay you back!" you have an opening for a learning experience. It's one thing to talk about debt. It's another to experience the feelings that come with paying month after month on a purchase. If you feel your kids are ready and their request is worthwhile, offer to spot them a loan -- with an interest rate, payment terms, and a penalty clause if they miss a payment.

Show them how much the loan will cost compared to the cash price. Put the payment schedule on your calendar so you don't accidentally teach your kids that repayment is optional. And lend only as much as they need.

Lending your kids money is not without risks. They may decide to go on a chore strike or be stricken with borrower's remorse. You may even have to temporarily repossess a computer, video game, or other item. But they'll be smarter consumers and better money managers because of the experience, and they'll see debt as a tool to be used carefully and not just as a four-letter word.

The smart way to get more income in retirement
Getting a part-time job is one way to increase your income in retirement, but it isn't the smart way. In a brand-new free report, our retirement experts explain a straightforward strategy that people are already using to secure an even more comfortable retirement. The method is so simple you'll be shocked you didn't think of it yourself. To access this free report instantly, simply click here now.

Thursday, December 18, 2014

Judge denies request to release Steve Jobs trial video

Watch Steve Jobs unveil the Mac HONG KONG (CNNMoney) A California judge has denied a request by media companies to release a videotaped deposition of Apple's Steve Jobs, taken six months before his death in 2011.

Jobs's taped deposition was used in a class-action lawsuit, which had been in court for a decade, that argued Apple abused its monopoly power in the music industry. Apple won the suit earlier this week, and won't have to pay damages in the antitrust trial.

The request to make the tape public was filed by the Associated Press, Bloomberg, and CNN.

Judge Yvonne Gonzalez Rogers found that because the video was used in lieu of live testimony, it should be considered as such -- cameras are prohibited in federal district courtrooms, and any other live testimony wouldn't have been taped. The transcript of the video, and not the tape itself, will serve as the official court record, according to the decision.

"As is typical of all live testimony, it is properly made available to the public through its initial courtroom presentation, and subsequently, via the official court transcript," the judge ruled.

The court ruling states that if video depositions were routinely released, that may discourage future witnesses from participating in taped depositions, out of concern they may be broadcast publicly someday.

The decision also noted that the courtroom wasn't sealed for any part of the trial, making all testimony accessible to the public. To accommodate the press, the court ordered extra copies of exhibits in the trial, and ensured the public had advance notice of the Jobs deposition.

Parts of the video were played in court for the public and media, and the transcript of the deposition was made public for the first time earlier this month.

During the deposition, the attorney representing iPod owners asked Jobs questions about Apple's attempt in 2004 to limit the iPod's compatibility with rival music stores.

At the time, Jobs was on medical leave, appeared very thin and his voice was raspy, but seemed mentally sharp in the video, which CNN saw in the courtroom.

He was also defensive, evasive and opaque. Asked about events that took place seven years earlier, he said "I don't remember," "I don't know" or "I don't recall" 74 times during the two-hour session -- including when he was asked if he knew what the lawsuit was about, according to the transcript.

In the iPod'! s early days, Apple went to great lengths to ensure the iPods could only play music burned from CDs or purchased on iTunes. Music sold on iTunes had a special Digital Rights Management encryption that wasn't compatible with other MP3 players.

Throughout the deposition, Jobs portrayed Apple as a company that was at the mercy of the record labels. He said Apple was "very scared" of being in noncompliance with the labels' terms, which stipulated that iTunes music needed DRM protections.

None of the major labels ever canceled their contracts with iTunes. In fact, Apple has been widely regarded as having the upper hand in its negotiations with the record labels, and Jobs has been accused of strong-arm tactics when setting iTunes' music prices.

Towards the end of the deposition, the attorney asked Jobs whether Apple's response to Harmony was "strong and vehement."

"They don't sound too angry to me when I read them," Jobs answered. "A strong response from Apple would be a lawsuit."