McEvoy resigns at Woodbury

Advisor Group continues to see movement in the executive suite.

Pat McEvoy resigned last week as chief executive of Woodbury Financial Services Inc., Larry Mark, a spokesman for American International Group Inc., which owns Advisor Group, confirmed Monday. Mr. Mark did not comment on the reasons for the resignation.

Woodbury is one of four independent broker-dealers that make up Advisor Group, one of the largest networks of independent B-Ds in the industry with a total of 5,408 reps .

Erica McGinnis, CEO of Advisor Group, will temporarily replace Mr. McEvoy while the firm looks for a successor.

Mr. McEvoy’s resignation is the second significant change in the leadership of Advisor Group in the past four months. In September, long-time Advisor Group CEO Larry Roth stepped down to become CEO of Realty Capital Securities LLC, the broker-dealer and wholesaler for Nicholas Schorsch’s nontraded real estate investment trusts and other alternative investments.

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In October, Advisor Group tapped Ms. McGinnis, its compliance chief, to replace Mr. Roth.

A year ago, AIG completed its purchase of Woodbury Financial from The Hartford Financial Services Group Inc.

“I would like to thank Pat for his contributions to Woodbury over the years, especially during the recently completed integration of the firm into the Advisor Group network,” Ms. McGinnis said in a statement. “I wish him the best in the next phase of his career.”

6 Billion Reasons Vodafone Connects

The recent investments made by the world's second-largest mobile telecommunications company have caused a swell of investor excitement. Royston Wild of The Motley Fool UK shares several reasons he feels this stock is set to skyrocket well into the long-term.

Project Spring program boosts earnings prospects

Vodafone's (LSS:VOD) (NQ:VOD) recent purchase of Kabel Deutschland (LES:0MPU) (OP:KBDHF) has caused a ripple of excitement among investors, the firm's maiden foray into the lucrative multi-services entertainment sphere, providing bubbly earnings potential. This has seen news of Vodafone's Project Spring organic investment program take the back seat, but I believe that the gigantic 6bnp scheme also has the potential to turbocharge revenues in coming years.

Vodafone announced the massive investment scheme after agreeing to offload its 45% stake in Verizon Wireless to Verizon Communications (VZ) for USD130bn in September. The three-year plan will enable the company "to strengthen and accelerate our existing Vodafone 2015 strategy," the company said, "enabling us to take even greater advantage of the growing global demand for ubiquitous high-speed data."

Specifically, the firm plans to plow these vast sums into 4G, 3G, fiber, and broadband services, clearly massive growth areas for communications specialists across the globe.

Vodafone's operations in these areas continue to pull up trees, particularly in respect of rolling out its 4G technology across the UK. The business has signed up 100,000 customers since rollout in August, as of the start of the month, and is stepping up the number of cities which can access its new technology. Vodafone is also boosting its 4G services on the continent, and increased the speed of its LTE network in various cities in Germany to an industry-busting 150Mbps in recent months.

Vodafone's excellent growth potential has seen takeover speculation ratchet up in recent months, and I expect chatter to provide an extra catalyst to share prices sooner rather than later. Recently, broker Credit Suisse said that Vodafone has a 50% chance of being acquired by US telecoms giant AT&T (T). And the broker attached a 280p price target should a bid materialize, providing a 22% premium to current levels.

Now that Vodafone has unattached itself from its Verizon Wireless venture in North America, the telecoms company has become a prime target in, what is becoming, an increasingly frantic industry on the M&A front. But whether or not a takeover approach actually materializes, I believe that Vodafone offers enough growth potential to send shares rocketing higher.

Royston does not own shares in any of the companies mentioned. The Motley Fool has recommended shares in Vodaphone.

Read more from The Motley Fool UK here...

Should You "Friend" the Facebook IPO?

The media hype is starting: Rumors abound that Facebook will soon announce plans to sell shares to the public. Whispers set a $100 billion price tag as a possible valuation for the social media giant; it would be the largest internet initial public offering (IPO) ever, and the fourth largest IPO of any type.

Interest is intense; after all nearly 800 million users spend hours daily on the site, trading pictures, political banter, recipes, reconnecting with old friends and searching for new ones. No website has captured the imagination and time of so many across the globe.

Pundits say we can only imagine the advertising, data mining, and related revenue that could be generated. The value of networks, it's said, rises exponentially with their size. Facebook is a unique property and represents a unique opportunity for investors. But, does it merit your investment dollars?

Bottom Line

Steer clear of this IPO. Profitable investing requires focus on the financial metrics. Tallies of clicks, unique users, and time spent on a website is of little value and can't be analyzed except by the revenues and profits generated. The rumored price tag puts the shares in bubble land, where the downside risks far outweigh any upside hopes.

Growth is sure to slow. Converting from private to public will produce headwinds. Historically, these types of companies have disappointed, while the recent track record of social media IPOs has been anything but inspiring.

Avoid the Bubble Land Valuation

The proposed Facebook IPO pricing would value the company at up to $100 billion. Unfortunately, when analyzed in the context of its recent financial results, that just doesn't make sense.

Facebook is said to have generated $4 billion in revenues last year, with profits of $1.5 billion. That means the price to earnings ratio is nearly 70; absent growth you'd be better off with a ten year Treasury bond, which would yield you $2 billion for every $100 billion invested.

Since growth! is expected, compare it to other Internet leaders. Google is valued at nearly $200 billion, but last year generated nearly 10 times the revenues and 6 times the profit. So, if Facebook is really going to be the next Google (GOOG), its value is closer to $33 billion, one third of projections.

Yahoo, too, is another pure Internet play. It generated more revenue than Facebook in the last 12 months but its market capitalization is just one fifth of Facebook's hoped for $100 billion. Investors will pay more for faster growth. Analysts expect 20% per annum growth out of Google, which gives Google a "PEG ratio" (its price to earnings ratio divided by its growth rate) of about one, given Google's recent price to earnings ratio of 20. But, if you apply a PEG of one to Facebook, it would have to grow earnings nearly 70% annually to justify a 70 price to earnings ratio.

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Is that possible? No question, Facebook has done that in the past. But, no company does that for long. That would imply a doubling of the company annually.

A $100 billion valuation incorporates lots of eye popping results, and then some. Your maximum upside is dwarfed by your potential losses should the rosy forecasts not materialize.

Recent Growth Rates Unsustainable; Future Growth May Slow

In recent years, Facebook has doubled in size annually, and that's inspiring the aspirational pricing. As you get bigger, the law of large numbers sets in and percentage rates of growth decline; the low hanging fruit has already been picked. The next 800 million users will be harder to find than the first 800 million users. In effect, to capture another 800 million users Facebook needs to find a region as big as Europe and they all have to sign up for Facebook, no matter their age or even whether they have a computer!

Success breeds competition; Google+, Google's answer to Facebook, has alrea! dy signed! up 90 million users, and has the heft and experience to go head to head with Facebook. Just keeping the 800 million current users will be a challenge, as Twitter, LinkedIn, Google, and undoubtedly guys inventing in garages right now conspire to vie for current Facebookers.

Increasing size invites more scrutiny; if Facebook is viewed as a monopoly regulators here and abroad may want to break it up, like an AT&T (T) or a Microsoft (MSFT). A phalanx of Facebook lawyers trying to navigate the shoals of increased regulation won't help growth.

To maintain growth rates, successful penetration overseas, especially China, is critical. But, that's not easy. Remember Google had to withdraw from China.

Facebook now has $3.5 billion cash on its balance sheet. It aspires to raise $10 billion in its IPO. That could leave it with over $13 billion cash on its balance sheet. Investors don't pay 70 times earnings for cash earning nothing. There'll be tremendous pressure to deploy, but will it be deployed wisely?

Distractions of Being a Public Company May Impede

The most important Facebook metric today is the number of users, estimated at 800 million. After the IPO the stock price may well be the critical number. Will this cause founder Mark Zuckerberg and his team to take their eyes off the ball?

Zuckerberg prides himself on building a business for the long term. Once you're public, unfortunately, Wall Street wants quarterly results. Many lament that this makes long term growth plans far more difficult.

Indeed, Zuckerberg may not want to go public, but probably feels compelled to. It's widely believed that Facebook now has over 500 stockholders, which requires it to file its financial statements publicly before May. This will cause Facebook to lose a major advantage of being private, keeping confidential its financial results.

Once an IPO makes Zuckerberg and his employees billionaires and millionaires, will complacency set in? Will Facebook continue to be the scrappy, hu! ngry star! tup that laid the groundwork for the success?

Bottom line, don't extrapolate mindlessly into the future Facebook's historical growth rates.

Internet IPOs' Historical Performance Scary

History is littered with internet IPOs that crashed and burned. The examples are legion: The Globe.com was one of the first social media sites; despite soaring 6 fold following its IPO in the late 1990s, it soon was dismembered. But, only after a founder was filmed partying with his girlfriend model, saying "Got the girl. Got the money. Now I'm ready to live a disgusting, frivolous life."

Yahoo joined the S&P as its first Internet name in December 2000, trading well over 100; 11 years later it's down nearly 90%, never having paid a dividend.

Early Facebook investors were mocked because MySpace ruled the roost back in 2005. MySpace was then sold to News Corp for $580 million and by June of 2006 it surpassed Google as the most frequented US website. But, the tides of fortune shift; last year MySpace was ranked 138th by web traffic and was unloaded for a mere $35 million.

It's true that Google has been successful, rising nearly six fold from its IPO debut. But, it came public at a more reasonable $23 billion market cap, just a fourth of the hoped for Facebook number.

This history should serve as a warning to would be buyers of Facebook's IPO.

Recent Performance of Social Media IPOs Disappointing

The social media darling of 2011, Groupon, despite initially soaring, has come back to earth, and now trades nearly exactly at its IPO price. Social media gamer Zynga, which has built its business around Facebook's platform, also remains at its IPO price.

Investors should heed these recent results before piling into the Facebook IPO. Indeed, this may be the reason some are suggesting that Facebook's IPO price will come in as much as 25% lower than implied by the initially touted $100 billion market cap. No one at Facebook wants its shareholders to have a Zynga or Groupon exp! erience.

In sum, enjoy the Facebook pages, but don't friend the shares; the downside risk far outweighs the upside hopes.

Will UnitedHealth Group See Its Stock Surge Higher?

With shares of UnitedHealth Group (NYSE:UNH) trading around $62, is UNH an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

UnitedHealth Group is a diversified health and well-being company. The company operates in four segments: Employer & Individual, Medicare & Retirement, Community & State, and Optum. Through its segments, UnitedHealth Group serves individual consumers and employers; the health needs of seniors; the public health marketplace, offering states Medicaid solutions; and health system participants, including consumers, physicians, hospitals, governments, and pharmaceutical companies. Adequate healthcare is very important to most consumers and companies. UnitedHealth Group is able to provide healthcare products and services to a growing number of concerned individuals and companies around the world.

T = Technicals on the Stock Chart are Strong

UnitedHealth Group stock has come a very long way since establishing lows during the 2008 Financial Crisis. The stock is now trading right at all-time high prices, so it may pause before coasting higher. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, UnitedHealth Group is trading slightly above its rising key averages, which signal neutral to bullish price action in the near-term.

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(Source: Thinkorswim)

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

	Implied Volatility (IV)	30-Day IV Percentile	90-Day IV Percentile
UnitedHealth Group Options	26.23%	96%	95%

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

	Put IV Skew	Call IV Skew
July Options	Flat	Average
August Options	Flat	Average

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

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

E = Earnings Are Increasing Quarter-Over-Quarter

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

	2013 Q1	2012 Q4	2012 Q3	2012 Q2
Earnings Growth (Y-O-Y)	-11.45%	2.51%	28.21%	9.48%
Revenue Growth (Y-O-Y)	11.21%	11.01%	8.00%	8.05%
Earnings Reaction	Hot Clean Energy Companies For 2014 -3.77%	1.37%	-1.06%	-2.41%

UnitedHealth Group has seen mostly increasing earnings and revenue figures over the last four quarters. From these numbers, the markets have expected a little more from UnitedHealth Group’s recent earnings announcements.

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P = Excellent Relative Performance Versus Peers and Sector

How has UnitedHealth Group stock done relative to its peers, Aetna (NYSE:AET), Humana (NYSE:HUM), WellPoint (NYSE:WLP), and sector?

	UnitedHealth Group	Aetna	Humana	WellPoint	Sector
Year-to-Date Return	14.11%	-0.18%	22.83%	13.06%	7.31%

UnitedHealth Group has been a relative performance leader, year-to-date.

Conclusion

UnitedHealth Group is a health and well-being company that provides essential healthcare services during a critical time in the United States. The stock has witnessed a promising move higher that has taken it to all-time high prices, where it may consolidate before coasting higher. Over the last four quarters, earnings and revenue numbers have been on the rise, but investors have not been too pleased with the company’s reports. Relative to its peers and sector, UnitedHealth Group has been a year-to-date performance leader. Look for UnitedHealth Group to OUTPERFORM.

Who's Not Happy With One Microsoft?

On the heels of a sweeping internal restructuring, Microsoft (NASDAQ: MSFT  ) has rallied to new 52-week highs on investor confidence in the new organizational hierarchy that may help combat the overarching bureaucracy that's held back the software giant for years. Steve Ballmer outlined his vision of "One Microsoft," one that would be unified.

Investors may be impressed, but there's another important group of stakeholders that's decidedly not: channel partners.

The changes were announced on the last day of Microsoft's Worldwide Partner Conference, or WPC, its annual gathering of business partners, resellers, systems integrators, and channel distributors. CRN details the backlash among a wide range of these partners, who are none too pleased about some aspects of Microsoft's new strategic direction. These channel partners are incredibly important to Microsoft's sales into the IT departments in the small and medium business, or SMB, market.

The dominant theme behind the restructuring is Microsoft's ambitions of becoming an integrated devices-and-services company, which inevitably puts it in direct competition with its partners on a number of fronts. Some believe that Microsoft is becoming too focused on what Apple and Google are doing, and that all of the company's products are now mere competitive responses.

For instance, COO Kevin Turner encouraged partners to bring their clients into Microsoft's own retail stores where they could buy Surface tablets directly from Microsoft. That's like asking middlemen to actively cut themselves out of the equation.

The vast majority of these resellers aren't allowed to sell Surface, either, as Microsoft recently detailed its plans to expand Surface distribution. The problem is that the company is allowing only 10 of its large account resellers, or LARs, to offer the device. That's just 0.01% of its total partner base in North America. That inevitably leads to a situation where some resellers may be forced to buy Surface units from larger competitors if they want to offer the tablet. Some of these channel partners have instead simply decided to offer competing tablets from Apple, Samsung, Hewlett-Packard, or Dell.

Microsoft's new distribution strategy is to emphasize its own first-party retail network to sell to consumers, while leveraging its LARs for the big enterprise wins. The SMB segment is getting left out in the cold. One reseller exec even said he "went ballistic" after reading Ballmer's memo.

Unfortunately, many of these systems integrators have little choice but to play ball. Microsoft is the only meaningful platform that they can sell into the enterprise. Still, that doesn't mean that Microsoft should leverage its domineering position and drag its partners along, kicking and screaming. Nothing good will come of that.

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Yahoo! Stock Is an Even Better Buy Than You Might Think

Investors have good reason to love Marissa Mayer. Yahoo! (NASDAQ: YHOO  ) stock is up 61% since she took over as CEO last July. The S&P 500 is up just 18% over the same period.

Mobile app gains are at least partly responsible. Mayer has been saying for months that her strategy is to beef up Yahoo!'s mobile presence. According to GigaOm, which reported on data compiled by Onavo, use of Yahoo!'s major mobile apps among iPhone owners  increased in each of the past three months.

But investing is also a game best played in context. How does Yahoo! stock compare to peers Google (NASDAQ: GOOG  ) and AOL (NYSE: AOL  ) ? Here's what the numbers say:

Key Statistics Yahoo! AOL Google

Current Share Price	$26.80	$36.92	$898.15
Shares Outstanding	1.08 billion	77.5 million	331.8 million
Market Cap	$28.7 billion	$2.84 billion	$294.0 billion
Trailing P/E Ratio	7.76	3.15	26.87
PEG Ratio	1.38	1.57	1.27
Gross Margin	68.1%	30.8%	57.7%
Cash From Operations	(360.3 million)	$386.3 million	$16.56 billion

Sources: S&P Capital IQ, Yahoo! Finance.

And here's what Fools say, going by the data available in our CAPS investor intelligence database:

CAPS Category Yahoo! AOL Google

CAPS Stars (out of 5)	**	*	****
No. of CAPS Ratings	5,116	305	18,139
Bullish CAPS Ratings	4,071	105	15,614
Bearish CAPS Ratings	1,045	200	2,525
Bull Ratio	79.6%	34.4%	86.1%

Source: Motley Fool CAPS.

Yahoo! gets a low rating in CAPS, but that may be due more to its past than its potential. "Great management! A lot of great growth prospects and acquisitions should help drive future growth," writes CAPS investor storyboy34, in what appears to be a reference to Mayer

Google has its own mobile ambitions having recently changed terms for its AdWords search advertising program. The goal? Do a better job of monetizing mobile ads. The search king has also teamed with Yahoo! to bring contextual ads to Yahoo! sites for auto, finance, sports, and general news. Investing in both companies might prove an interesting way to play not only the growth of the Mobile Web but also the shift toward tailored, digitally delivered ads.

AOL, meanwhile, remains dependent on a growing network of cheap content via sites such as The Huffington Post. The company is also competing with YouTube by introducing unique web video shows. Call it one of several promising AOL projects, even if the company's comparatively low gross margin seems to have investors concerned.

Verdict: Yahoo! stock is a buy
As for Yahoo!, I think that mobile apps are catching on for a reason. The company has done good work to make them useful in iOS, which means more users who, in turn, may give the ad-supported full sites a second look. It's a virtuous cycle that I see growing over time, and I've rated the stock to outperform in my CAPS portfolio as a result.

Now it's your turn to weigh in. What do you think of Yahoo!'s mobile apps? Would you buy, sell, or short Yahoo! stock at current prices? Leave your comments in the box below.

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Why GameStop Is Poised to Plunge

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, video game retailer GameStop (NYSE: GME  ) has received an alarming one-star ranking.

With that in mind, let's take a closer look at GameStop and see what CAPS investors are saying about the stock right now.

GameStop facts

Headquarters (founded)	Grapevine, Texas (1994)
Market Cap	$4.6 billion
Industry	Computer and electronics retail
Trailing-12-Month Revenue	$8.9 billion
Management	CEO J. Paul Raines (since 2010) CFO Robert Lloyd (since 2010)
Return on Equity (average, past 3 years)	5.3%
Cash/Debt	$635.8 million / $0
Dividend Yield	2.8%
Competitors	Amazon.com  Best Buy  Wal-Mart Stores

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 11% of the 3,174 members who have rated GameStop believe the stock will underperform the S&P 500 going forward.

Just last week, one of those Fools, Yakoloi, succinctly summed up the GameStop bear case for our community:

No matter how well run, or how solid this company is there is one thing that will KILL [GameStop]. Direct digital game sales. ... Remember what happened to Blockbuster video? When is the last time you saw Wherehouse CD store? The same thing that happened to music and movies is happening to the Video Games. Gamestop has its foot in the door of the direct digital download service but it is far too little far too late with Microsoft, Sony and other major publishers far ahead in the game. Their entire business model is backed into a shrinking corner, abandon ship!

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Fury and frustration over Target data breach

NEW YORK (AP) — Potential victims of credit card fraud tied to Target's security breach said they had trouble contacting the discounter through its website and call centers.

Angry Target customers expressed their displeasure in comments on the company's Facebook page. Some even threatened to stop shopping at the store. Target apologized on Facebook and said it's working hard to resolve the problem and is adding more workers to field calls and help solve website issues.

The fury and frustration come as America's second-largest discounter acknowledged Thursday that data connected to about 40 million credit and debit card accounts was stolen as part of a breach that began over the Thanksgiving weekend.

MORE: Target says PINS are not part of stolen credit card info

The theft is the second-largest credit card breach in U.S. history, exceeded only by a scam that began in 2005 involving retailer TJX. That incident affected at least 45.7 million card users.

Target disclosed the theft a day after reports that the company was investigating a breach. The retailer's data-security troubles and its ensuing public relations nightmare threaten to drive off holiday shoppers during the company's busiest time of year.

Customers who made purchases by swiping their cards at its U.S. stores between Nov. 27 and Dec. 15 may have had their accounts exposed. The stolen data included customer names, credit and debit card numbers, card expiration dates and the embedded code on the magnetic strip found on the backs of cards, Target said.

MORE: Retailer confirms details of massive data breach

There was no indication the three- or four-digit security numbers visible on the back of the card were affected, Target said. The data breach did not affect online purchases, the company said.

Eric Hausman, a Target spokesman, said the company is engaged in "an ongoing investigation."

Target hasn't disclosed exactly how the breach occurred but said it has fixed the problem.

Gi! ven the millions of dollars that companies such as Target spend implementing credit-card security measures each year, Avivah Litan, a security analyst with Gartner Research said she believes the theft may have been an inside job.

"The fact this breach can happen with all of their security in place is really alarming," Litan said.

Other experts theorize that Target's network was hacked and infiltrated from the outside.

Whatever the case, Jason Oxman, CEO of the Electronics Transaction Association, which represents the payments technology industry, said data breaches like Target's are generally "heavily organized and sophisticated."

Annual losses from global credit and debit card fraud are on the rise. Last year, it reached $11.27 billion, up 11.4% from the previous year, according to The Nilson Report, which tracks global payments. Even so, Nilson's publisher David Robertson pointed out that fraud still accounts for less than 6 cents of every $100 spent.

Target, which has almost 1,800 stores in the U.S. and 124 in Canada, said it immediately told authorities and financial institutions once it became aware of the breach on Dec. 15. The company is teaming with a third-party forensics firm to investigate and prevent future problems.

The credit card breach poses a serious problem and threatens to scare away shoppers who worry about the safety of their personal data.

Target's stock dropped more than 2%, or $1.40, to $62.15 on Thursday.

"This is close to the worst time to have it happen," said Jeremy Robinson-Leon, a principal at Group Gordon, a corporate and crisis public relations firm. "If I am a Target customer, I think I would be much more likely to go to a competitor over the next few days, rather than risk the potential to have my information be compromised."

The incident is particularly troublesome for Target because it has used its store-branded credit and debit cards as a marketing tool to attract shoppers with a 5% discount.

During an earni! ngs call ! in November, the company said some 20% of store customers as of October have the Target-branded cards. In fact, households that activate a Target-branded card have increased their spending at the store by about 50% on average, the company said.

TJX, which runs stores such as T.J. Maxx and Marshall's, had a breach that began in July 2005 and exposed at least 45.7 million credit and debit cards to possible fraud. The breach was not detected until December 2006.

Without anyone noticing, one or more intruders installed code on the discount retailer's systems to methodically collect and transmit account data from millions of cards.

In 2009, TJX agreed to pay $9.75 million in a settlement with multiple states.

AP Writers Michelle Chapman in New York and Heather Hollingsworth in Kansas City, Mo., contributed to this report.

ORCL – Oracle Stock Is Cheap, But for Good Reason

Oracle (ORCL) reports earnings after the bell today. And while shares of ORCL have been bumped slightly higher in today’s trading, it’s far from certain that the climb will continue following Oracle earnings.

Year-to-date, ORCL stock has been subpar, tallying a mere 2% gain. And that’s despite some momentum in recent months; Oracle stock actually has been barely beating the broader market from its July low until mid-December.

For the coming second-quarter report, analysts expect Oracle earnings of 67 cents per share on revenue on $9.19 billion. That ORCL sales number represents a small nudge higher, while the earnings estimate translates to a so-so 5% improvement.

Together, both translate to more reasons to stay away from Oracle stock.

ORCL Stock Is Struggling

One thing that simply has to be noted when talking about Oracle stock: It’s downright cheap. Shares of ORCL are currently trading for a forward P/E of 11, which is right in line with the 11% earnings growth expected long-term. And if you back out the billions of cash Oracle has on its balance sheet, that ratio drops down to 8.

Not too shabby, especially when the broader market has posted a killer 2013, making lots of big names expensive.

But Oracle stock has been battered down to bargain levels for good reason. Oracle has missed sales expectations for the last three quarters. In fact, Oracle CEO Larry Ellison lost more than $3 billion of his personal wealth in one day after a sales drop was reported in March.

What’s even more concerning is the fact that Cisco (CSCO) — another tech bellwether — recently cut its growth targets, citing trouble in emerging markets. That same headwind could easily weigh on ORCL stock … and in a way, it already has been. Since the Cisco news broke, Oracle stock has fallen around 3%.

Besides, even though Wall Street analysts remain generally optimistic about ORCL stock, consensus estimates translate to mere 9% upside. Meanwhile, RBC Capital Markets recently downgraded Oracle stock to “sector perform” from “outperform” and lowered its price target slightly. That came on the heels of a downgrade from Morgan Stanley the month prior.

What Could Jump-Start Oracle Stock

According to Business Insider, though, there could be more than just shrug-worthly quarterly numbers coming out of today’s Oracle earnings report. Wall Street analyst Pat Walravens — the director of technology research for JMP Securities — told Julie Bort about some things that could be in the works at ORCL.

The first: A potential reorganization of the company’s U.S. salesforce (although this may not be announced publicly). Of course, this would be a reorg of a reorg. Remember, Oracle President Mark Hurd began overhauling the salesforce a couple years back, and with mixed results. See (also according to Business Insider), lots of Oracle employees began quitting because the environment was too cut-throat.

The other big announcement, which would absolutely be shouted publicly, is a potential big agreement with Hewlett-Packard (HPQ). This is especially notable considering ORCL recently struck an agreement with another rival: Salesforce.com (CRM).

Until more details — and the right details — are announced, though, there’s little reason to believe ORCL stock will just suddenly get into gear.

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

Signs of a Top?

Although cycles do not give an exact inflection point for when a bull market will come to an end, they tend to be in the ballpark. Comparing the current bull market to that of the 2002-2007 market cycle suggests caution, says Joon Choi in Systems & Forecasts.

First, here's a recap of my recent comments on why we may be nearing a stock market top.

Corporations in the US have been buying back their shares at an alarming rate. The primary reasons for the buybacks are to increase the underlying share price, and to decrease the number of outstanding shares so companies will be able to engineer artificially higher earnings per shares.

Even with falling earnings, a company can manage a higher EPS if it buys back significant shares of its company.

Moreover, only 52% of S&P 500 Index (SPX) members were able to beat the analysts' estimates for the third quarter, far lower than the 70% average. In short, US companies are not doing as well as stock prices would suggest.

Also, initial public offerings have been rising in recent years and companies have raised $49.4 billion from IPO's so far this year—which is higher than the $48.7 billion raised in 2007. IPO activities tend to top out during stock market tops, as it did in 2000 and 2007.

Best Gold Companies To Invest In 2014

Stock market lows were made in September of 2002 (based on monthly close) and the highs were made 61 months later in October of 2007.

February of 2009 was the stock market bottom for the recent bear market and 61 months later puts us at March of 2014. Thus, if the current bull market resembles the previous one, then the stock market top is only a few months away.

Uncertainty surrounding the debt ceiling debate (February 8, 2014 deadline), and the possibility of the Fed tapering off bond purchases, may lead to more volatility in the first quarter of next year.

Meanwhile, our proprietary models indicate that we are in a favorable environment for equities. However, I want to reiterate that a 5% sell-off in the equity market may turn into a double-digit correction.

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Is It Time to Buy Johnson Controls?

Johnson Controls (NYSE: JCI  ) is best known as a big-league auto parts supplier to such companies as Ford (NYSE: F  ) and Toyota (NYSE: TM  ) . But in reality, the company is three businesses in one, all of which have potential. In this video, Fool contributor John Rosevear takes a closer look at Johnson Controls and explores whether the stock looks like a buy right now.

 

Is this a good way to play the coming electric-car boom?
Johnson Controls is perhaps best known among investors as a maker of batteries for cars, including the lithium-ion battery packs used in electric cars and the most advanced hybrids. This space has gathered a lot of investor interest, but is Johnson Controls a good way to play it? The Motley Fool answers this question and more in our most in-depth Johnson Controls research available for smart investors like you. Thousands have already claimed their own premium ticker coverage, and you can gain instant access to your own by clicking here now.

Top Stocks To Own Right Now

Bernanke: Poor Areas Being Left Behind in U.S. Recovery

Manuel Balce Ceneta/AP Federal Reserve Chairman Ben Bernanke WASHINGTON -- Federal Reserve Chairman Ben Bernanke said on Friday that despite improvements in the U.S. economy overall, the country's lower-income communities continue to face hard times. "While employment and housing show signs of improving for the nation as a whole, conditions in lower-income neighborhoods remain difficult by many measures," Bernanke said in prepared remarks that made no direct reference to monetary policy. In a speech to a Fed community affairs conference, the chairman also stressed the vital role played by local leaders in revitalizing lower income communities, citing research by the Boston Fed of towns that had managed to turn things around. "Substantial coordination and dedication are needed to break through silos to simultaneously improve housing, connect residents to jobs, and help ensure access to adequate nutrition, health care, education, and day care,' Bernanke said. The 2008 collapse of the U.S. housing market and subsequent deep recession has deepened the plight of many lower-income communities, where unemployment has soared far above national levels, particularly for young people and minorities.

Timberland’s Towering Potential

In times of inflationary peril, hard assets have been shown to outperform in bubble after bubble. Real estate in particular has always been an extremely effective inflation hedge, given that there is limited supply and nearly constant upward pressure on prices over the long-term thanks to population growth.

While all types of real estate typically hold and even gain in value during times of inflation, some types of real estate perform better than others. For instance, commercial real estate such as shopping centers and regional malls can lag other property types due to the negative impact inflation can have on consumer spending.

Residential real estate such as apartment complexes performs better than commercial real estate, given that most units are on year-to-year leases versus the longer five-year terms typical in commercial real estate. Because of more frequent re-pricing intervals and the constant turnover of units, multi-family developments are able to respond much more quickly to rising housing prices.

Interestingly, though, hotels outperform apartments thanks to the fact that those properties are literally re-priced every 24 hours. So as long as the broader economy is still relatively healthy, they are the most nimble of all.

According to data from the Campbell Group, a timberland investment management company with assets under management up and down the West Coast and in the southern US, timberland is probably the best long-term real estate inflation hedge. Their data shows that between 1987 and 2012, timberland showed a correlation to inflation of about 0.45. From a broader perspective, that lagged only US Treasury Bills and the S&P Goldman Sachs Commodity Index, which both had correlations of about 0.65.

According to other data, historically timber prices have increased much faster that overall prices for more than a century and, during America’s last great inflationary! run between 1973 and 1981, timberland values gained an average 22 percent annually.

And demand isn’t expected to slow any time soon. In 2011, the Food and Agriculture Organization of the United Nations forecasted wood demand will double by 2040.

Weyerhaeuser Co (NYSE: WY) has long been one of my favorite plays on timberland and it has recently become even more attractive.

The company operates in four basic units: wood products, cellulose fibers, timberlands and real estate.

The wood products division, which generates about 40 percent of revenue, produces and markets joists used as structural supports, oriented strand board used in walls and floors, and lumber that’s found at any do-it-yourself or hardware store.

Making products that are used in everything from toothpaste and newspapers to diapers and bandages, Weyerhaeuser’s cellulose fibers operation generates 24 percent of the company’s revenue. Given the ubiquity of cellulose fibers, this business provides buoyancy to the company’s earnings, even in down cycles, and is typically one of its strongest performers in terms of growth.

While about a third of the cellulose fiber the company produces is consumed in North America, about 25 percent is ultimately sold into the ex-Japan Asian market, i.e. China. Another 15 percent usually finds its way to Japan and 12 percent to Europe, with the remainder sold to other emerging markets.

A major driver of the growth in the fiber division is Weyerhaeuser’s innovation in developing proprietary varieties of fibers, helping to shield it from the extremely competitive nature of the cellulose fiber market. With relatively low barriers to entry, the pulp market sees a fairly steady flow of newcomers, particularly when prices are as high as they are now.

For the purposes of an inflation hedge, we’re most interested in the company’s timberlands, which typically account for about a quarter of revenues.

The compan! y control! s about 6 million acres of timber forest, with about a third of its holdings located in the extremely productive Pacific Northwest region of the US, which primarily produces Douglas fir. The remaining two-thirds mostly consist of pine producing forests in the Southern US, with about 300,000 acres of pine and eucalyptus property in Uruguay.

The Pacific Northwest is the most productive timberland in the US, thanks to its cool, damp climate and typically abundant rainfall. The Douglas fir that dominates the region is also a much higher value wood than the pine typically harvested in other parts of the country.

The fact that it’s the largest timber producer in the Pacific Northwest makes Weyerhaeuser extremely attractive, because the company’s location gives it easy export access to China. This location also leaves it well placed to pick up the supply slack created by lower production caps in Canada, which is typically a key Chinese supplier.

Weyerhaeuser was hard hit during the 2007-2009 recession. During this period, the company’s earnings plummeted and its share price fell from a high of about $60 to a low of $19. Since then, it has given itself a complete makeover, unloading its paper and corrugated packaging businesses and converting itself into a real estate investment trust in 2010.

That transformation has dramatically improved the company’s performance and efficiency, speeding its return to post-recession profitability. And now it is about to take another transformational step.

Weyerhaeuser has long been one of the top 20 homebuilders in the US, with the company’s real estate division typically accounting for between 10 percent and 15 percent of total revenue. But in bad times such as the real estate bust a few years ago, the homebuilding unit is a serious drag on profits even as it ties up capital.

Recognizing that, last month the company announced that it would separate out its homebuilding operations in the coming months, eit! her throu! gh a spin off or split off. It will then merge with TRI Pointe Homes (NYSE: THP) in a combination that creates a new top 10 US homebuilder valued at about $3 billion, of which Weyerhaeuser shareholders will own about 80 percent.

While the details of the transaction are still being ironed out—the goal is for the deal to ultimately be tax free—it is expected to close sometime in the second quarter.

The upshot: This company is unlocking significant value for shareholders by creating a standalone homebuilder, while also providing an increasingly attractive inflation hedge. Weyerhaeuser Co is a buy up to 40.

Cracking the Door on Mexican Oil

Since his election last year, Mexican President Peña Nieto has been pushing a strong reformist agenda through his country’s Congress, notably the liberalization of Mexico’s energy patch.

Since nationalizing the industry in the 1930s, the Mexican government has keep its energy sector well-fenced against foreign incursion after decades of what it perceived as exploitation of the country’s resources. But left in the hands of the state-run monopoly known as Petroleos Mexicanos (Pemex), the country’s energy production has been steadily falling, largely thanks to underinvestment. Over the past decade alone, Pemex’s crude oil production has fall from 3.4 million barrels per day (bbl/d) to just 2.5 million bbl/d in October, a 25 percent decline.

This decline in oil production has cast a huge pall over Mexican prosperity. The country’s government has used proceeds from Pemex to finance many aspects of its operations; as goes Pemex, so goes the national economy. That is also why there has been such a sharp drop in production in recent years—rather than recycle oil revenue into much needed capital investments in energy infrastructure, the public sector bureaucracy has siphoned off funds for other uses, many of them inefficient. In fact, Pemex is the source of more than a third of the government’s revenue.

This chronic underinvestment has become even more of a challenge, as reserves of easy-to-produce onshore oil dwindle and, to boost production, Pemex must turn its attention to offshore assets in the Gulf of Mexico. While private companies have been drilling in the Gulf for decades, Pemex has virtually no experience in deepwater drilling and production. But it estimates that as much as 29 billion barrels of recoverable oil lie beneath its part of the Gulf of Mexico.

To remedy these woes, the Mexican Senate yesterday approved an energy bill that should s! pur growth in the region’s second-largest economy and will likely take Mexico from being the world’s ninth-largest oil producer to the fifth over the next 10 years. If this legislation eventually passes the lower house, the Chamber of Deputies, production will likely rise to 4 million bbl/d by the end of the next decade, which would make Mexico a larger oil producer than Canada.

More than 20 hours of Senate debate played out like a lurid Mexican telenovela, as parties that oppose the bill draped banners across the Senate chamber, chanted, and sang the national anthem. At one point, fisticuffs broke out. In the end, the Senate proposed a constitutional amendment that would pave the way for production sharing and licensing for foreign energy companies, which will also be allowed to book reserves for accounting purposes.

The proposal would remove all representatives of the Pemex workers’ unions from the company’s board of directors, taking it down from 15 members to a much more streamlined 10.

Easing those restrictions is expected to unleash a wave of international exploration efforts in the country, assuming the Chamber of Deputies approves the measure. A vote in that body is expected as early as today. However, a measure was introduced in that chamber that called for a national vote on the privatization program in 2015, while the Senate version would allow for the constitution to be amended with a two-thirds vote in both chambers.

Assuming the privatization plan clears this last hurdle (our guess is that it will), Mexico’s Finance Ministry estimates that the increase in production would boost the country’s gross domestic product (GDP) by 1 percent by 2018, much needed growth after this year’s estimated GDP growth of a meager 1.3 percent. Analysts at Barclay’s project that energy investment would grow to 3.5 percent of GDP, up from less than 2 percent today.

In addition to being a boon for the Mexican government and people,! the meas! ure’s passage would be a major plus for companies such as Chevron (NYSE: CVX), which haven’t been able to drill in Mexico since 1938. In the meantime, though, Chevron has been operating in Latin America for more than 90 years, conducting exploration and production in countries such as Argentina, Brazil, Colombia and a number of others. Chevron rates a buy up to 130 on its own merits, as well as a play on Mexico’s liberalization of its energy patch.

Another major beneficiary of liberalization would be Keppel Corp (OTC: KPELY), which has already signed a memorandum of understanding with Pemex to develop, own and operate a yard facility in Mexico.

The deal is consistent with Keppel’s strategy of maintaining construction capability as close to customers as possible. Keppel already has snagged orders to construct six KFELS B class jackup rigs for Pemex and its order book will only grow with the entry of foreign energy companies. Keppel Corp is a buy up to 20.

Are Asset Managers Now Too Big to Fail?

Nearly three and a half years after passage, the sweeping Dodd-Frank Wall Street Reform and Consumer Protection Act remains a subject of intense controversy.

The two retired legislators for which the law is named will appear together at a conference for independent investment advisors on Wednesday — the MarketCounsel Summit in Las Vegas.

And two widely disseminated commentaries on the law published this week — both of them critical — may set the tone for questions that advisors and journalists will be asking former Sen. Christopher Dodd and former Rep. Barney Frank, both Democrats.

The Wall Street Journal devoted all of its above-the-fold lead editorial space Monday to a criticism of an idea vetted by the Dodd-Frank-created Financial Stability Oversight Council (FSOC) that  would expand the definition of systemically important financial institutions to include asset  managers.

The Journal editorial draws a sharp distinction between the world of investing, where risk is expected and desired, and the world of banking, where safety is paramount. It notes that the dot-com bust of 2000, which saw the Nasdaq drop more than 60%, did not lead to a systemic crisis because it was private money that was lost.

“An asset manager decides where to invest money on behalf of clients. The profits or losses on these investments accrue to the clients, not the manager. A market decline shouldn't threaten an asset manager or the larger financial system,” the Journal writes. This contrasts with banks, whose customers expect to be able to writhdraw every penny of their deposits, for which taxpayers are liable through federal deposit insurance.

Were the U.S. Treasury, which chairs FSOC, to rope in the likes of BlackRock or Fidelity as “systemically important,” then asset managers, too, will become too big to fail, their new status will raise regulatory costs paid for in investor fees, and taxpayers will be on the hook for potential bailouts, the Journal argues. The editorial warns that Treasury has already breached the nonbank distinction by designating Prudential and AIG, two large insurers, as systemically important.

Perhaps most devastating, the Journal called Frank as chief witness. It quoted the law’s co-author speaking a conference last month panning the new FSOC idea: “[FSOC]  has enough to do regulating the institutions that are clearly meant to be covered — the large banks. I have not seen the argument made yet to cover [the] very plain-vanilla asset managers," he told a New York gathering of bankers.

On the same day, another leading financial journal, Investor’s Business Daily, ran a lengthy critique of Dodd-Frank by Nicole Gelinas, a CFA and fellow at the free-market-oriented Manhattan Institute think tank.

Gelinas takes a broader view of Dodd-Frank, arguing that its biggest failing is perpetuating, rather than curtailing, “too big to fail.” Rather than allow systemically important financial institutions to go under safely, the law seeks to “make the world safe from bankruptcies,” she writes, noting that “bankruptcy is a natural, healthy occurance in a capitalist system.”

Gelinas also fingers FSOC as particularly harmful because its mandate of identifying market risks and promoting market discipline is inherently contradictory. “Why should investors monitor big firms if the government is already doing it for them?” she writes.

She quotes Dallas Fed President Richard Fisher in testimony he gave Congress this summer warning that “as soon as a financial institution is designated as systemically important … it is viewed by the market as being the first to be saved.”

The privilege that creates in the marketplace has fueled the growth of large banks, whose four largest representatives have assets amounting to 50% of GDP in 2011, compared to just 9% in 1990, according to Fisher.

Gelinas shows how under Dodd-Frank large financial institutions are shielded from bankruptcy. The law’s Orderly Liquidation Authority (OLA), rather than declare insolvency and work out an equitable arrangement between creditors and debtors, is actually authorized to inject taxpayer funds — a bailout, in other words — to keep the institution alive.

Gelinas quotes President Barack Obama as saying, at Dodd-Frank’s 2010 signing ceremony, that “there will be no more tax-funded bailouts—period” under the law.

The Manhattan Institute scholar laments the law’s sweeping approach — the bill was criticized for its 2300-plus pages — as opposed to enacting discrete technical fixes to the problems that caused the 2008 financial crisis, such as repealing a law that prohibited regulation of new derivatives markets.

She cites favorably a 5-page bill advocated by the Fed’s Fisher that would end any government guarantee or subsidy and notes that Sens. Elizabeth Warren, D-Mass., and John McCain, R-Ariz., have introduced a 30-page bill that would bring back Glass-Steagall’s separation of investment and commercial banking.

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Check out these related stories on ThinkAdvisor:

Regulator Cites Moody's As Evidence of 'Too Big To Fail' Triumph

NEW YORK (TheStreet) --Commodity Futures Trading Commission Chairman Gary Gensler on Monday cited Moody's Investors Service (MCO) downgrades of giant U.S. banks as a sign regulators have made substantial progress on eliminating future bailouts of those institutions.

The regulator's statement provides further evidence of a return to duopoly status for Moody's and McGraw Hill Financial's (MHFI) Standard & Poor's ratings unit following a threat to their businesses after they were blamed for helping inflate the subprime housing bubble. 

Moody's credit analysts downgraded several banks last month, including JPMorgan Chase (JPM) and Goldman Sachs (GS), citing the removal of an "uplift" to their ratings from implicit government support. Other institutions, such as Bank of America (BAC) and Citigroup (C) were upgraded because of efforts by those companies to strengthen their balance sheets through moves such as increasing their capital cushions against losses and reducing leverage. The upgrades to Bank of America and Citigroup, in other words, came in spite of the fact that they were viewed by Moody's as less likely to benefit from government support in future crises such as the one that shook the global economy in 2008.

Gensler's comments:

At the heart of reform is ensuring that the largest financial institutions in our free-market system have the freedom to fail. That was true for my dad's small family business in Baltimore. Nobody would have bailed him out if he didn't make payroll each Friday. That's why I was pleased last month when Moody's removed the uplift in credit ratings of the largest bank holding companies that had come from perceived government support. This is a real testament to the work of the Federal Deposit Insurance Corporation and the Federal Reserve, under the leadership of Chairmen Martin Gruenberg and Ben Bernanke and Governor Daniel Tarullo. The statement, made by Gensler during a speech before the Financial Stability Oversight Council, is slightly ironic since government reliance on the credit ratings duopoly of Moody's and S&P is one of many things blamed for contributing to the crisis. The 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act attempted to undo the ratings agencies' quasi-official status by requiring federal agencies to review regulations that require references to credit ratings and substitute with other standards of credit worthiness. Nonetheless, as Gensler's comments indicate, public officials are nonetheless all too happy to hold up the credit ratings agencies' views as gospel when it suits their needs.

Gensler's comments underscore the ongoing influence of the credit ratings agencies more than five years after the financial crisis, and more than three years after the passage of legislation aimed at reducing that influence.

That is why shares of Moody's have surpassed their pre-crisis highs, while other subprime crisis losers have been far slower to turn things around. Bank of America shares, for example, are still worth about only a third of their 2006 highs and Citigroup shares are worth about 10% of their peak levels.

-- Written by Dan Freed in New York.

Follow @dan_freed

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

Fresh fast food strikes planned for Thursday

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  Plight of the fast food worker NEW YORK (CNNMoney) Fast food protests aren't going away.

Organizers say fast food restaurant workers in 100 U.S. cities will walk off the job Thursday, as part of a continuing push to raise wages above $15 an hour in the industry and secure the right to unionize.

The movement began with a small walkout in New York City last year and has since gathered momentum. Strikes this past August drew fast food workers in 60 cities, organizers said.

The National Restaurant Association contends that the demonstrations are a "coordinated PR campaign engineered by national labor groups," and that "relatively few restaurant workers have participated" in past demonstrations.

A McDonald's spokeswoman said the events planned for Thursday "are not strikes," and consist only of outside groups "traveling to McDonald's and other outlets to stage rallies."

Industry officials have criticized the campaign, claiming increased starting wages will hold back job growth and increase prices.

The effort has drawn support from the Service Employees International Union, one of the country's largest, as well as activist groups. A MoveOn.org petition that has drawn nearly 50,000 online signatures calls on industry leaders "to pay your workers $15 an hour so they can make ends meet and Americans can stop paying for the hidden costs of poverty wages."

In Congress, a group of 53 lawmakers sent letters Wednesday expressing support for higher wages to McDonald's (MCD, Fortune 500), Wendy's (WEN), Domino's Pizza (DPZ), Burger King (BKW) and Yum! Brands (YUM, Fortune 500), which operates KFC, Pizza Hu! t and Taco Bell.

"We are proud to stand with workers who continue to fight for an economy that works for everyone," the officials wrote.

A McDonald's spokeswoman said Wednesday that the company is "committed to providing our employees with opportunities to succeed," offering competitive pay, training and the chance for advancement. Wendy's said it was proud to give entry-level employees "the opportunity to learn important business and personal skills so they can either grow with us or move on to another career."

Domino's rejected the "fast food" label, and said only three of its employees had taken part in the August protests, none of whom were scheduled to work at the time. The pizza maker said its delivery drivers make more than minimum wage with tips included, and that it serves as a second job for many employees who work only evenings and weekends.

"90 percent of our U.S. franchisees started as delivery drivers or at in-store positions," as did many other managers and corporate staff members, spokesman Tim McIntyre said. "We are a company of opportunity."

The other companies did not immediately respond to requests for comment.

President Obama also called out the plight of fast food workers in a speech Wednesday, saying they "work their tails off and are still living at or barely above poverty." He said it was "past time" to raise the minimum wage.

A report released in October by the University of California-Berkeley Labor Center and the University of Illinois found that 52% of families of fast food workers receive some form of public assistance. The report estimated that this aid carries a $7 billion annual price tag for taxpayers.

The median pay for the fast food workers nationwide is just over $9 an hour, or about $18,500 a year. That's roughly $4,500 lower than Census Bureau's poverty income threshold level of $23,000 for a family of four.

The rallies planned for Thursday follow protests last week at a number of Wal-! Mart (WM! T, Fortune 500)locations, where workers and activists have called on the company to grant workers more hours and pay full-time employees at least $25,000 a year.

Top 5 Gold Companies For 2014

October 21, 2013: U.S. markets opened mixed Monday morning after a couple of weak earnings reports. The report on existing home sales showed a drop in September�and the delayed report on crude oil inventories showed another large gain. There was not much momentum among traders today, either to the high side or the low side. On the whole, stocks ended the day just as mixed as they were in the morning.

European closed higher today while Asian and Latin American markets were mixed again.

Tuesday�� calendar includes the following scheduled data releases and events (all times Eastern).

8:30 a.m. – Employment situation (delayed from October 4th due to government shutdown) 10:00 a.m. – Construction spending (delayed) 10:00 a.m. – Richmond Fed manufacturing index 10:30 a.m. – EIA weekly petroleum status report (delayed from last Thursday) 11:30 a.m. – 4-week bill auction

Here are the closing bell levels for Monday:

S&P500 1744.64 (+0.14; +0.01%) DJIA 15391.88 (-7.64; -0.05%) NASDAQ 3920.05 (+5.77; +0.15%) 10YR TNOTE 2.609% (-0.21875) Gold $1,315.80 (+1.20; +0.1%) WTI Crude oil $99.22 (-1.59; -1.6%) Euro/Dollar: 1.3680 (-0.0005; -0.03%)

Big Earnings Movers: McDonald�� Corp. (NYSE: MCD) is down 0.6% at $94.59 after a so-so report and a downbeat forecast. Halliburton Co. (NYSE: HAL) is down 3.4% at $50.67 on added caution for the current quarter. V.F. Corp. (NYSE: VFC) is up 3.4% at $211.24. SAP AG (NYSE: SAP) is up 3.6% at $76.38. NVR Corp. (NYSE: NVR) is down 4.1% at $893.40.

Top 5 Gold Companies For 2014: NEW GOLD INC.(NGD)

New Gold Inc. engages in the acquisition, exploration, extraction, processing, and reclamation of mineral properties. The company primarily explore for gold, silver, and copper deposits. Its operating properties include the Mesquite gold mine in the United States; the Cerro San Pedro gold-silver mine in Mexico; and the Peak gold-copper mine in Australia. The company also has development projects, including the New Afton gold, silver, and copper project in Canada; and a 30% interest in the El Morro copper-gold project in Chile. The company was formerly known as DRC Resources Corporation and changed its name to New Gold Inc. in June 2005. New Gold Inc. was founded in 1980 and is headquartered in Vancouver, Canada.

Advisors' Opinion:

• [By Ben Levisohn]

  Even bad news has failed to dent the rise in gold stocks today. NewGold (NGD), for instance, has gained 1.8% to $7.49 despite the fact that the wall of one of its mines collapsed. The Wall Street Journal has the details:

• [By Ben Levisohn]

  Bridges favorite stocks include Goldcorp, Newmont, Eldorado Gold (EGO) and New Gold (NGD).

  Note, however, that these recommendations are all qualified in one way or another. Investors should keep that in mind before going all in on the gold miners.

Top 5 Gold Companies For 2014: Thompson Creek Metals Company Inc.(TC)

Thompson Creek Metals Company Inc., through its subsidiaries, engages in mining, milling, processing, and marketing molybdenum products in the United States and Canada. The company?s principal properties include the Thompson Creek Mine and mill in Idaho; a metallurgical roasting facility in Langeloth, Pennsylvania; and a joint venture interest in the Endako Mine, mill, and roasting facility in British Columbia. It also holds interests in development projects comprising the Davidson molybdenum property and the Berg copper-molybdenum-silver property located in northern British Columbia; the Howard?s Pass property, a lead and zinc project situated in the Yukon territory-northwest territories border; and the Maze Lake property, a gold project located in the Kivalliq district of Nunavut. The company produces molybdenum products, primarily molybdic oxide and ferromolybdenum, as well as soluble technical oxide, pure molybdenum tri-oxide, and high purity molybdenum disulfide. As o f December 31, 2010, its consolidated recoverable proven and probable ore reserves totaled 462.2 million pounds of contained molybdenum in the Thompson Creek Mine and the Endako Mine. The company was formerly known as Blue Pearl Mining Ltd. and changed its name to Thompson Creek Metals Company Inc. in May 2007. Thompson Creek Metals Company Inc. is based in Denver, Colorado.

Advisors' Opinion:

• [By Selena Maranjian]

  Beaten-down companies that you think are likely to recover strongly are also good candidates. Molybdenum miner Thompson Creek Metals (NYSE: TC  ) , for example, sports average annual losses of 35% over the past five years, and carries substantial debt, but molybdenum's long-term outlook is promising, with price increases likely, and the company has a promising gold and copper mine on track to start producing by the end of the year. Freeport-McMoRan Copper & Gold (NYSE: FCX  ) is another major molybdenum player, with considerable operations in other metals, as well -- along with new investments in oil and gas production.

• [By Jon C. Ogg]

  Thompson Creek Metals Co. Inc. (NYSE: TC) was at 54% discount to its book value of $8.30 per share at the time, and the stock price of $3.90 is up from $3.03 Deutsche Bank’s team nailed upside of more than 28% here. Its price target was $4 at the time versus a consensus target of $4.50 at the time. The 52-week range here is $2.42 to $4.55, but we would point out that the consensus price target is $3.93.

• [By Selena Maranjian]

  The biggest new holdings are Chesapeake Energy�puts, and shares of Discovery Communications. Other new holdings of interest include Halcon Resources (NYSE: HK  ) , and Thompson Creek Metals (NYSE: TC  ) . Oil and gas company Halcon, operating in the promising Bakken region, as well as Texas's productive Eagle Ford shale region, among others, is expected to grow by 30% annually over the coming years. It recently reported 2012 net daily production 128% higher than year-ago levels, and proven reserves up 417%. Halcon was recently one of my colleague Joel South's top two energy holdings, and analysts at Stifel recently upped its rating�from Hold to Buy.

• [By Jim Jubak]

  The stock market liked what it heard Wednesday, August 7, from Thompson Creek Metals (TC) after the close in New York. Second quarter adjusted net earnings of 8 cents a share crushed the Wall Street consensus of a penny a share. Revenue climbed 3.8% to $117.8 million versus expectations for revenue of just $1.3.8 million. The company also said that its new Mt. Milligan mine is on schedule with a start-up for the concentrator expected this month, with first ore-feed by mid-August. The company said it expects commercial production to begin in the fourth quarter of 2013, with production ramping to full capacity over the next twelve months.

Top High Tech Companies For 2014: Australian Dollar(AU)

AngloGold Ashanti Limited primarily engages in the exploration and production of gold. It also produces silver, uranium oxide, and sulfuric acid. The company conducts gold-mining operations in South Africa; continental Africa, including Ghana, Guinea, Mali, Namibia, and Tanzania; Australia; and the Americas, which include Argentina, Brazil, and the United States. It also has mining or exploration operations in the Democratic Republic of the Congo, Guinea, and Colombia. As of December 31, 2010, the company had proved and probable gold reserves of 71.2 million ounces. The company has a strategic alliance with Thani Dubai Mining Limited to explore, develop, and operate mines across the Middle East and parts of North Africa. AngloGold Ashanti Limited, formerly known as Vaal Reefs Exploration and Mining Company Limited, was founded in 1944 and is headquartered in Johannesburg, South Africa.

Advisors' Opinion:

• [By Sally Jones]

  Anglogold Ashanti Limited (AU)

  Down 65% over 12 months, Anglogold Ashanti Limited has a market cap of $4.85 billion, and trades with a P/E of 8.10.

Top 5 Gold Companies For 2014: Newmont Mining Corporation(Holding Company)

Newmont Mining Corporation, together with its subsidiaries, engages in the acquisition, exploration, and production of gold and copper properties. The company?s assets or operations are located in the United States, Australia, Peru, Indonesia, Ghana, Canada, New Zealand, and Mexico. As of December 31, 2009, it had proven and probable gold reserves of approximately 93.5 million equity ounces and an aggregate land position of approximately 27,500 square miles. The company was founded in 1916 and is headquartered in Greenwood Village, Colorado.

Top 5 Gold Companies For 2014: Goldman Sachs Group Inc.(The)

The Goldman Sachs Group, Inc., together with its subsidiaries, provides investment banking, securities, and investment management services to corporations, financial institutions, governments, and high-net-worth individuals worldwide. Its Investment Banking segment offers financial advisory, including advisory assignments with respect to mergers and acquisitions, divestitures, corporate defense, risk management, restructurings, and spin-offs; and underwriting securities, loans and other financial instruments, and derivative transactions. The company?s Institutional Client Services segment provides client execution activities, such as fixed income, currency, and commodities client execution related to making markets in interest rate products, credit products, mortgages, currencies, and commodities; and equities related to making markets in equity products, as well as commissions and fees from executing and clearing institutional client transactions on stock, options, and fu tures exchanges. This segment also engages in the securities services business providing financing, securities lending, and other prime brokerage services to institutional clients, including hedge funds, mutual funds, pension funds, and foundations. Its Investing and Lending segment invests in debt securities, loans, public and private equity securities, real estate, consolidated investment entities, and power generation facilities. This segment also involves in the origination of loans to provide financing to clients. The company?s Investment Management segment provides investment management services and investment products to institutional and individual clients. This segment also offers wealth advisory services, including portfolio management and financial counseling, and brokerage and other transaction services to high-net-worth individuals and families. In addition, it provides global investment research services. The company was founded in 1869 and is headquartered in New York, New York.

2015 Mustang radically new, retro, too

DEARBORN, Mich. — A 1964 copy of the Saturday Evening Post magazine at Ford Motor's archives here has the Beatles on the cover, on the cusp of making a huge splash on the U.S. music scene. Inside, a two-page ad for Kodak photo film, and another ad for the new Ford Mustang.

"The Mustang's the only one still around, intact," says archivist Dean Weber.

Still around, but hardly the same. Thursday, Ford is unveiling a redesigned version for 2015, the sixth-generation Mustang, by Ford's count, since the car was launched on April 17, 1964. It goes on sale next fall.

The Mustang "is important because it has been a symbol of Ford for 50 years," says Jack Nerad, market analyst at Kelley Blue Book.

Bill Ford, chairman of the namesake company, says in a video for employees: "This is the most important product we have, at least to me personally. Every time we unveil a Mustang, the stakes are raised, and yes, I get nervous, but more than that, I'm really excited."

Though Mustang was the original of what came to be called "pony cars," rival Chevrolet Camaro now outsells it. "I'm certain that Chevy's sales success in the segment sticks in the craw of many high-ranking Ford executives. They believe they should own the pony-car segment," Nerad says.

The 2015 is easily recognizable as a Mustang, but there are dramatic chassis, body, interior and drivetrain changes.

Planners decided on evolutionary styling to appeal to traditionalists, but adventuresome enough to draw new buyers. The overall effort, according to theme boards at Ford's huge Mustang styling studio here, has been to deliver a car seen as:

• "Breaking out," illustrated by a picture of a fist smashing through glass.

• Oozing "power and control," illustrated by the haunches of a muscular jungle cat.

• "Masculine and cool," portrayed on the boards by actor Steve McQueen, a Mustang icon for the chase scene in his movie Bullitt.

That last goal comes as most automakers seek more women buyers, b! ut the masculine emphasis simply acknowledges reality.

Jessica Caldwell, senior analyst at Edmunds.com, says women are 26% of Mustang buyers this year, about flat for the past five years. It's 32% for rival Camaro, 27% for Dodge Challenger.

She also notes a "big leap" in Mustang buyers 55 and older, up 12 percentage points in five years, to 36% this year. Mustang buyers under 35 have slipped three points.

Potential new buyers will see a design similar to the outgoing Mustang, but with significant differences in dimensions. The rear wheels are pushed out about 1.6 inches to be flush with the sheetmetal, which is about 2.8 inches wider than the 2014.

Taking advantage of the 2015's new chassis, designers were able to lower the roof 1.5 inches, the hood 1.3 inches and the dashboard about 2.8 inches.

The result: a sleeker look, obvious when it's next to a 2014.

The 2015 Mustang's underpinnings amount to an "all-new" platform, says Raj Nair, Ford's vice president in charge of global product development.

The original idea was to evolve the current chassis. But once Ford decided that the new car would have independent rear suspension (IRS) — a first for mainstream Mustang models. "We started having some trouble with the steering and proportion of the vehicle," Nair says. "We decided fairly late in development to widen the vehicle."

IRS improves handling, ride and steering precision, but is more costly and complicated than the solid rear axle that Mustangs have had since 1964.

The engine selection also didn't work out as planned. The intent was an EcoBoost turbocharged four-cylinder as the base engine and the V-8 as the up-level engine. But a less expensive V-6 was added to be the base, says chief engineer Dave Pericak. "We added the V-6 later in development, as a value item; Mustang's always had a value element," says Pericak.

Thus, the engine lineup will be:

• Base: 3.7-liter V-6, about 300 horsepower.

• Optional: 2.3-liter turbocha! rged EcoB! oost four-cylinder. Ford says it'll have at least 305 hp and significantly more torque than the V-6.

• Top-end: 5-liter V-8, rated "more than 420 hp," he says.

Less dramatic, but likely endearing, new features you might overlook:

• Front roof pillars are realigned, and nearly 1.3 inch thinner. Combined with a new location for the outside mirror, the 2015 has better front visibility.

• Passenger's airbag is in the glove box door, smoothing the look of the dashboard by eliminating the seam for a separate panel. Ford assumes — this remains to be verified in real life — that people won't drive around with the glove box open, which would interfere with bag operation.

• Tires, which now sit flush with the outside edge of the sheetmetal, have "rub" ribs to minimize the chance you'll get curb rash on the expensive alloy wheels most models will have.

• The middle roof pillar is hidden behind the door glass to avoid interrupting the silhouette.

• The convertible, coming at nearly the same time as the coupe, will have the fastest top in the business — up or down in seven seconds. And it'll operate up to 5 mph.

• Front seats — none too soon, some might argue — have "memory recline," so they return to your preferred setting after tipping them forward to let passengers into or out of the back seat.

• New colors to address owner requests, including Triple Yellow (literally painted three times, instead of one or two, to eliminate the "dirty" look of gray primer that yellow has trouble hiding).

"There's actually a Yellow Mustang Club, and boy, do we hear from them when we don't offer a yellow," says Susan Lampinen, the chief designer in charge of color, among other things, for all Ford and Lincoln models.

The Potash Endgame

Potash producers Mosaic (MOS) and Potash Corp. (POT) have been hammered this year as changes to the market leave their shares wracked with uncertainty.

Reuters

That might be about to change, says JPMorgan analyst Jeffrey Zekauskas and team, who believe the end of the uncertainty is nigh. They write:

The endgame in potash industry dynamics appears now to have begun. Belarus wants a return to a price over volume dynamic for the potash industry, and the change of ownership of Uralkali is the crucial step for obtaining it. Suleiman Kerimov and his partners own a controlling interest in Uralkali and are now selling their controlling interests…The motivation of the sale of the Kerimov interest has been the dissatisfaction of the Russian government with the disruptions in its relations with Belarus caused by the volume-over-price strategy set in motion by the Kerimov-led Uralkali on July 31, 2013…

The political disruption between Russia and Belarus was caused by Belarus receiving lower hard currency revenues from its state-owned potash company, Belaruskali, because of Uralkali's elevation of volume over price as a strategic priority. We believe the point of the change in ownership of Uralkali is the alteration of Uralkali's go-to-market strategy. We believe that an execution of a change in strategy by Uralkali would be a dynamic that would raise the value of Potash Corp and Mosaic, given their sensitivity to changes in product prices.

Zekauskas calls shares of Mosaic and Potash Corp. “undervalued.” He writes:

Both companies have replacement values that are almost twice their current share prices. Mosaic has a large share repurchase program it plans to execute beginning at the end of November 2013. Potash Corp has a 7.5%-8.0% sustainable free cash flow yield following the conclusion of its large potash capacity expansion effort.

Shares of Potash have ticked up 0.2% to $31.29, while Mosaic has gained 2.3% to $47.49.

Wall Street: What's Next For Precious Metals And Stocks?

For more than three years, stocks and precious metals have been moving in the same direction–north. But in the last twelve months, precious metals and stocks parted ways. Stocks continue to head north, while precious metals head south. The SPDR Gold Shares (NYSE:GLD) are down close to 25 percent; and the iShares Silver Trust (NYSE:SLV) down close to 40 percent. The SPDR S&P500 (NYSE:SPY) is up more than 30 percent, while the SPDR Dow Jones Average (NYSE:DIA) follows closely behind.

What's behind this divergence? Will precious metals catch up with stocks, or the other way around?

These are certainly complex questions, but the answer is simple.

In the early days, both precious metals and stocks rallied on cheap money coming from several rounds of QE, but on different premises. Precious metals rallied on the premise that cheap money will fuel runway commodity inflation–the "milk" of commodity market rallies, as there are no dividends to compensate investors for holding precious metals. Stocks rallied on the premise that easy money will fuel a new economic boom, boosting corporate earnings–the "milk" of equity market rallies, as they provide funds for dividends and stock buybacks.

Wall Street's Great Expectations About QE

Asset Class	Expectations	Reality
Precious Metals	Prospect of (commodity) Inflation	No inflation in the offing
Stocks	Prospect of higher Earnings	Moderate earnings growth

Three years later, for reasons explained in a previous piece, easy money helped create asset inflation, but very little to fuel traditional commodity inflation, deflating the precious metals markets.

The rest is history. Precious metals investors hang on every word from Federal Reserve officials, looking for hints about the fate of QE. But no word seems to be re-assuring enough — and any rally is short-lived.

By contrast, the situation for stocks is different. Investors continue to believe that QE will eventually stimulate growth-reassured by Fed officials (e.g., Ms. Yellen's testimony in the US Senate last week), hoping that robust earnings growth will follow a strong economy, and will sustain the rally in equities.

In some cases, dividend payouts and stock buybacks have made the waiting worthwhile.

The truth is that QE doesn't boost economic growth either, as explained in the article cited earlier. This means that equities may eventually head south, following the fate of precious metals.

What should investors do?

It depends on which theory they subscribe to. Those who have faith in the Fed may want to stay with both stocks and precious metals. Those who don't may want to count their blessings and begin taking profit, adhering to the old Wall Street adage, "nobody went broke by booking profits."