Best Cheap Stocks For 2017: April 2014

Wednesday, April 30, 2014

Growth sectors looking bullish

Early April's volatility and mini-correction have given way to bullish action in growth sectors that could pave the way for higher equity prices ahead.

Although most investors focus on major indexes like the Dow Jones Industrial Average, S&P 500 and Nasdaq, much can be learned from a quick "look under the hood" at specific sectors that are on the move.

So far this year, significant strength has been seen in oil, health care, materials and utilities, and this action reflects what has thus far been a confusing period for the overall stock market.

Oil and materials are considered "growth" sectors because strength here is indicative of rising economic activity, while health care and utilities are considered "defensive" sectors and a place to go when "risk off" conditions prevail.

Now, however, as April showers give way to May flowers, we see a noticeable rotation toward growth sectors as investors regain confidence after April's early volatility.

Recent days have seen significant strength in the transportation sector as the Dow Jones Transportation Average set an all-time record high on April 22. Transportation, of course, reflects economic growth and activity as goods and people move around the world, and strength here is a bullish indication for the broader market.

Other areas showing increased signs of life are oil, gasoline and industrials.

Oil and gasoline have been in sharp uptrends even though the summer vacation and driving season are more than a month away. Gasoline prices are on the rise and oil prices have been supported by tensions in Ukraine and improving economic data.

Regarding the industrial sector, the Dow is on a renewed uptrend and within striking distance of its all-time high.

Looking farther around the sector landscape, technology and small caps, two of the hardest hit during the April sell-off, are also moving higher. These two are considered to be leading "risk on" sectors, and though they've started to climb, they still have! some distance to travel before again challenging all-time highs.

In spite of the bullishness, the utility sector is still showing strength over the past 30 days. This is a cautionary indication as money tends to leave this defensive sector during truly robust rallies. More weakness here would add credence to the bullish case for major U.S. indexes.

Top 5 Chemical Companies For 2015

Overall, the April mini-correction turned the corner on April 11 and growth sectors and the major indexes have been showing notable strength since then. The next big test for U.S. markets lies at resistance levels marked by highs set on April 2 for the Dow Jones Industrial Average at 16, 573 and the S&P 500 at 1890.

A sustained breakout to new highs would set the stage for a further advance while another failure here would likely take the air out of the recent rally. As always, Mr. Market will tell us what he has in mind. For the moment, a "green flag" is flying in a favorable breeze for U.S. equities.

Tuesday, April 29, 2014

Tesla Dips, Plug Power Plunges; Are Fuel Cells a “Complete Failure?”

Shares of Tesla Motors (TSLA) fell a little today; Plug Power (PLUG) plunged. Could it be because of a report from Global Equities Research’s Trip Chowdhry, which was bullish on Tesla and bearish on fuel-cell technology?

REUTERS

Chowdhry explains why he likes Tesla…

Competition, including General Motors (GM), Ford (F), BMW, Mercedes, etc. is completely clueless.

Just like any other technology startup company, the success i defined by focusing on a few select things and getting them right…

Just like any other successful technology startup, creating ecosystems is critical to the company’s continue success…

Vertical Integration is key to [Tesla's] success: Manufacturing of cars, Drivetrains Batteries (with Giga Factory), selling direct to customers.

…and why Fuel Cell Cars are a “complete failure and non-event:”

Fuel Cell Infrastructure is non-existent.

For Battery–‐in–‐Motion scenarios (i.e. in Cars) the Hydrogen gas needs to be compressed to 5000 lbs pressure, so as to fit in the cylinder

The energy is spent to compress the Hydrogen Gas so as to fit it in a cylinder. A typical Hydrogen cylinder to power a Fuel cell car costs $40 and gives on an average 360 miles

Fuel Cell powered car lacks in power density, hence a typical Fuel Cell powered card will go 0 – 60 miles per hour in 11 seconds, which is much slowed than Tesla Model S, which goes 0—60 in 5.4 seconds.

That sounds, in some ways, like more of a dig at legacy automakers like Honda Motor (HMC), who continue pouring money into fuel-cell vehicles, than it does at Plug Power, but so be it. Plug Power’s the one that dropped 13% to $4.66 today.

Tesla Motor fell 0.7% to $198.51.

Monday, April 28, 2014

Top Chemical Stocks To Invest In 2015

Wannabe natural gas exporters scored a huge win last week when the Department of Energy (DoE) gave the green light to a second LNG facility for gas exports to countries that are not in a Free Trade Agreement with the United States. Natural gas exports could pave the way for an energy economy revival in the U.S. ��but there could be major losers, too. Let's take a closer look at three potential winners from natural gas exports, and I'll leave the losers for tomorrow.

Past and present LNG exporters
On Friday, the DoE approved the Freeport LNG project for export to countries not involved in a Free Trade Agreement. That expands potential exports from 20 countries to 195, including every BRIC country (Brazil, India, China, Russia) and the vast majority of emerging markets.

Freeport is partly owned by Dow Chemical (NYSE: DOW ) , ConocoPhillips (NYSE: COP ) , and Osaka Gas, and is only the second project after Cheniere Energy's (NYSEMKT: LNG ) Sabine Pass Terminal to receive such an approval. Freeport is cleared for 511 billion cubic feet of exports annually for the next 20 years, while Sabine got the go ahead in 2011 for 20 years at 803 billion cubic feet annually.

Top Chemical Stocks To Invest In 2015: ICL Israel Chemicals Ltd (ISCHY.PK)

ICL Israel Chemicals Ltd (ICL) is an Israel-based company, engaged in the fertilizer and specialty chemical sectors. The company operates in three segments: Fertilizers, Industrial Products, and Performance Products. The Fertilizers segment is engaged in the production of standard, granular, fine red and white potash from three sources, as well as in the production of phosphates, such as phosphate rock, phosphoric acid, fertilizers and animal feed addictives. The Industrial Products segment produces flame retardants, such as brominates and organ phosphorus; elemental bromine, and other chemicals. In addition the Performance Products segment produces specialty phosphates, such as technical, food grade and electronic grade phosphoric acid, phosphate salts, food additives and wildfire safety products, as well as alumina and other chemicals. Advisors' Opinion:

[By Chris Damas]
I never thought Uralkali would get back together with Belaruskali as I expressed in this article written a day after the break-up roiled the fertilizer world, causing 20% plunges in the stocks of major producers such as Potash Corp (POT), Mosaic Company (MOS) and Israel Chemicals Ltd (ISCHY.PK).

Top Chemical Stocks To Invest In 2015: Syngenta AG (SYNN)

Syngenta AG is a Switzerland-based company engaged in production of products for crop productivity. The Company's businesses include herbicides, insecticides and fungicides for crop protection, field crops, vegetables and flower seeds, seed care products and turf, garden, home care and public health products. The Company diversifies its operations into four geographical segments (Europe, Africa and Middle East; North America; Latin America and Asia Pacific), which represent the integrated Crop Protection and Seeds business areas, as well as a separate global segment Lawn and Garden. The Crop Protection business is active in herbicides, insecticides and fungicides manufacture. The Seeds business produces and sells seeds for growing corn, soybeans, sunflower, and sugar beet, among others. The Lawn and Garden business offers a range of products for use in the flower genetics, ornamentals, consumer lawn and garden, and Turf and landscape markets. Advisors' Opinion:

[By Sofia Horta e Costa]
Volvo AB (VOLVB) advanced the most in 10 months after the world�� second-largest truckmaker reported second-quarter earnings that beat forecasts. EasyJet climbed 3.7 percent after saying quarterly sales rose 11 percent on higher capacity utilization and revenue per seat. Syngenta (SYNN) AG fell 4 percent after posting first-half profit and revenue that trailed forecasts.

Best India Stocks To Buy Right Now: Intrepid Potash Inc (IPI)

Intrepid Potash, Inc.( Intrepid), incorporated on November 19, 2007, is a producer of muriate of potash (potassium chloride or potash) in the United States and are engaged the production and marketing of potash and langbeinite (sulfate of potash magnesia), another mineral containing potassium, magnesium, and sulfate, that is produced from langbeinite ore and as Trio when it refers to sales and marketing. Its Carlsbad assets consist of underground mining operations, which are supported by surface processing facilities. It is also operators of solar solution mining operations, as its Moab and Wendover facilities both utilize these techniques for recovering potash. Its revenues are generated from the sale of potash and Trio. As of December 31, 2011, the Company owned five potash production facilities, three in New Mexico and two in Utah. Its two products are potash and langbeinite, which is marketed as Trio.

Potash

The Company derives revenues and gross margin are derived from the production and sales of potash. Its potash is marketed for sale into three primary markets: the agricultural market as a fertilizer, the industrial market as a component in drilling and fracturing fluids for oil and gas wells, and the animal feed market as a nutrient. Its sales of potash tend to focus on agricultural areas and feed manufacturers in central and western United States, as well as oil and gas drilling areas in the Rocky Mountains and the greater Permian Basin area.

Trio

Trio is marketed into two primary markets, the agricultural market as a fertilizer and the animal feed market as a nutrient. It markets Trio internationally through an exclusive marketing agreement with PCS Sales (USA), Inc. (PCS Sales) for sales outside the United States and Canada and through a non-exclusive agreement for sales into Mexico.

Advisors' Opinion:

[By Robert Ciura]
As a result, valuations of industry leaders Potash Corp. (NYSE: POT ) , The Mosaic Company (NYSE: MOS ) , and Intrepid Potash (NYSE: IPI ) have compressed dramatically, leaving each stock looking very cheap on the surface.
[By Ben Levisohn]
Potash Corp of Saskatchewan (POT), for instance, lost 16% last year, while Mosaic (MOS) dropped 15%, Intrepid Potash (IPI) plunged 26% and Agrium (AGU) declined 5.9%.

Top Chemical Stocks To Invest In 2015: Braskem SA (BRKM5)

Braskem SA is a Brazil-based company primarily engaged in the manufacture of basic petrochemical products. The Company operates in five segments: Basic petrochemicals, Polyolefins, Vinyls, International businesses and Chemical Distribution. The Company�� products portfolio includes ethylene, propylene, butadiene, toluene, xylene, benzene, gasoline, diesel oil, liquefied petroleum gas (LPG), as well as thermoplastic resins, such as polyethylene (PE), polypropylene (PP) and polyvinyl chloride (PVC). Additionally, Braskem is also engaged in the import and export of chemicals, petrochemicals and fuels; the production, supply and sale of utilities, such as steam, water, compressed air, industrial gases, as well as the provision of industrial services, and the production, supply and sale of electric energy for its own use and use by other companies. The Company also invests in other companies, either as a partner or shareholder. Advisors' Opinion:

[By Harry Suhartono]
Brazil�� Ibovespa rose for a third day as traders pared bets on higher borrowing costs in Brazil, boosting the outlook for companies that sell in the local market. B2W Cia. Digital led gains among retailers, with Lojas Americanas SA (LAME3) and Natura Cosmeticos SA (NATU3) also trading higher. Petrochemicals producer Braskem SA (BRKM5) was the worst performer on the equity gauge after O Estado de S.Paulo reported Petroleo Brasileiro SA (PETR4) is seeking to raise prices of naphtha sold to the company by 5 percent.

Top Chemical Stocks To Invest In 2015: Rentech Inc (RTK)

Rentech, Inc. (Rentech), incorporated in 1981, is a provider of clean energy solutions. The Company owns and operates a nitrogen fertilizer plant in East Dubuque, Illinois, that manufactures and sells natural gas-based nitrogen fertilizer products within the corn-belt region in the United States. It is developing energy projects to produce certified synthetic fuels and electric power from carbon-containing materials, such as biomass, waste and fossil resources. Its technologies can produce synthesis gas (syngas) from biomass and waste materials, and convert syngas from its own or other gasification technologies into complex hydrocarbons (the Rentech Process) that are then upgraded into fuels using refining technology that it licenses. In addition to developing projects using these technologies, it is pursuing the licensing of its technologies to developers of projects that are expected to produce fuels and/or power. In May 2011, it acquired majority interest in ClearFuels Technology Inc. In May 2013, Rentech Inc acquired the entire share capital of Fulghum Fibres Inc. In August 2013, Rentech Inc announced that a subsidiary of the Company closed the sale of approximately 450 acres in Natchez, Mississippi to Adams County, Mississippi.

The Rentech Process is a technology based on Fischer-Tropsch (FT) chemistry, which converts syngas that can be produced from a range of biomass, waste and fossil resources into hydrocarbons. These hydrocarbons can be processed and upgraded into synthetic fuels, such as military and commercial jet fuels and low sulfur diesel fuel, as well as waxes and chemicals. Unlike some other alternative transportation fuels, such as ethanol, fuels produced from the Rentech Process can be transported and used in existing infrastructure, including pipelines and engines without blending restrictions. Its technology portfolio also includes the Rentech-SilvaGas biomass gasification technology (the Rentech-SilvaGas Technology), which enables it to offer integrated technologies t! hat can convert biomass and wastes to syngas and into clean fuels and electric power.

The Rentech Process can produce synthetic diesel fuels (RenDiesel1 fuels), which are clean burning having lower emissions of regulated pollutants, such as nitrogen oxides, sulfur oxides and particulate matter, than traditional petroleum-based diesel fuels. The Rentech Process also can produce synthetic jet fuel (RenJet fuel), which when blended with conventional jet fuel meet jet fuel specifications for military jet fuel and commercial Jet A and Jet A-1 fuels. It is developing a proposed project near Natchez, Mississippi (the Natchez Project) designed to produce approximately 30,000 barrels per day of synthetic fuels and chemicals and approximately 120 megawatts of power. It is evaluating alternative configurations for the Natchez site, which would initially be smaller in scale. The alternate configurations may use various feed-stocks alone or in various combinations, and include proportions of waxes and chemicals as products.

The Company owns, through its wholly owned subsidiary, Rentech Energy Midwest Corporation (REMC), a nitrogen fertilizer manufacturing plant that uses natural gas as its feedstock to produce syngas and then nitrogen fertilizer products. The products, the Company can produce include renewable synthetic diesel and jet fuels, naphtha and power from biomass resources; synthetic diesel and jet fuels, naphtha and power from fossil or fossil and biomass resources, and paraffinic waxes, solvents and specialty chemicals.

The Company competes with ExxonMobil, the Royal Dutch/Shell group, Statoil, BP and Sasol.

Advisors' Opinion:

[By Rich Duprey]
Alternative energy specialist�Rentech� (NASDAQ: RTK ) �will be�buying back�up to $25 million worth of company stock through the rest of the year, the board of directors announced Monday.
[By Robert Rapier] While the MLP space is dominated by the oil and gas sector, in last week’s article we began to explore some of the more exotic master limited partnership offerings. This week we continue our exploration of nontraditional MLPs by looking at the partnerships supplying fertilizer.

Rentech (Nasdaq: RTK) has been around for more than a decade, and it has shifted strategies several times. Full disclosure: Rentech’s Chief Technology Officer Harold Wright is a former manager of mine when we were both at ConocoPhillips, and I have visited Rentech’s facility in Commerce City, Colorado.

For most of Rentech’s existence, the company has sought to commercialize alternative fuels. At one time it had ambitions to build a large coal-to-liquids (CTL) plant, but federal legislation ultimately nudged it instead into the biomass-to-liquids (BTL) space. The company did build a BTL demonstration plant, but ultimately shut it down and has now refocused its efforts on becoming “one of the largest wood processing companies in the world.”

During its interesting journey as a company, Rentech acquired two ammonia nitrogen fertilizer facilities, which turned out to be a profit center that funded the alternative energy research. In November 2011, Rentech spun off this fertilizer business into an MLP called Rentech Nitrogen Partners LP (NYSE: RNF).

In the months leading to the spin-off, RTK’s market capitalization was about $200 million. Rentech maintained 60 percent ownership of RNF, and three months after the spin-off RTK’s market cap had risen to $400 million, while investors had bid RNF up to $1 billion. Interestingly, RTK’s share of RNF was worth more than RTK’s entire market cap, a situation that persists. The market currently values Rentech at $482 million, while the valuation of Rentech Nitrogen Partners makes RTK’s 60 percent stake in RNF worth slightly more than $600 million — another illu
[By Travis Hoium]
What: Shares of fertilizer and renewable energy company Rentech (NASDAQ: RTK ) jumped 17% today after the company announced an acquisition.

Top Chemical Stocks To Invest In 2015: Linde AG (LIN)

Linde AG is a German company engaged in the gases and engineering sector. It operates two divisions: Gases and Engineering, as core divisions, as well as Gist. The Gases Division includes Healthcare, producing medical gases; and Tonnage, as its two global business units; as well as the two business areas Merchant and Packaged Gases, offering liquefied and cylinder gases, and Electronics. The Company�� products are used in the energy sector, for steel production, chemical processing, environmental protection and welding, as well as in food processing, glass production and electronics. The Engineering division offers planning, project development and construction of turnkey industrial plants used in fields, such as petrochemical and chemical industries, in refineries and fertilizer plants, to recover air gases, to produce hydrogen and synthesis gases, to treat natural gas, and in the pharmaceutical industry. As of August 13, 2012, the Company acquired Lincare Holdings Inc. Advisors' Opinion:

[By Monica Wolfe]
Gabelli started the week by reducing his position in LIN Media (LIN). The guru reduced his position by -1.36%. Gabelli sold a total of 23,007 shares at an average price of $16.88 per share. Gabelli now holds on to a total of 1,666,208 shares of LIN Media, representing 3.06% of the company�� shares outstanding.
[By John Udovich]
Small cap media stock�LIN Media LLC (NYSE: LIN) might not be a household name, but there is a good chance you might be watching the company�� programs because like the Sinclair Broadcast Group, Inc (NASDAQ: SBGI) and Nexstar Broadcasting Group, Inc (NASDAQ: NXST), its helping to consolidate the media industry plus its making investment in other forms of media like social media. The stock has also outperformed those two peers along with the�PowerShares Dynamic Media Portfolio ETF (NYSEARCA: PBS).
[By Jake L'Ecuyer]
Shares of LIN Media LLC (NYSE: LIN) got a boost, shooting up 30.67 percent to $28.08 after Media General (NYSE: MEG) announced its plans to buy Lin Media LLC for $1.6 billion.

Top Chemical Stocks To Invest In 2015: Hybrid Coating Technologies Inc (HCTI)

Hybrid Coating Technologies Inc. (HCT), incorporated on November 2, 2011, is a development-stage company. The Company's business is that of its wholly owned subsidiary, Nanotech Industries International Inc. (Nanotech). This business is the manufacturing and sale of alternative non-toxic (isocyanate-free) polyurethane, Green Polyurethane. The products manufactured and sold by the Company (Nanotech Products) comprise coating products and sealant products. Coatings and raw binder ingredients comprised of Green Polyurethane Monolithic Floor Coating and Green Polyurethane Binder and referred to as Coating Products. Sealants and adhesives comprised of Green Polyurethane and referred to as Sealant Products.

Applications for Green Polyurethane products markets include industrial and commercial buildings; civil applications for tunnels and bridges; private and public garages; chemical and food processing plants; Warehouses; Monolithic floorings for civil, industrial and military engineering; marine and aeronautic applications; industrial equipment for dairy and liquid fertilizer processing plants and delivery systems; military facilities and equipment, and protective coatings inside industrial and commercial pipes. The Company intends to establish full commercial-scale manufacturing for both of its products at Adhpro Adhesives Inc. (Adhpro Adhesives) in Magog, Quebec and Simpson Coatings Group Inc. (Simpson Coatings) in California through non-exclusive toll manufacturing agreements.

The Company competes with BASF, Sherwin Williams, PPG, Benjamin Moore, AKZO Nobel, Rust-Oleum and Sika AG.

Advisors' Opinion:

[By Peter Graham]
Last Friday, small cap stocks Tristar Wellness Solutions Inc (OTCMKTS: TWSI) jumped 14.94% while Hybrid Coating Technologies (OTCBB: HCTI) and Bulova Technologies Group, Inc (OTCMKTS: BTGI) sank 23.53% and 13.04%, respectively. It should be mentioned that only one of these small cap stocks appears to be the subject of paid promotions or investor relations type activities. So what will these three small cap stocks do for investors this week? Here is a quick reality check to help you decide on a trading or investing strategy:
[By Peter Graham]
Small cap green stocks Hybrid Coating Technologies, Inc (OTCBB: HCTI), Pan Global Corp (OTCMKTS: PGLO) and Trans Global Group Inc (OTCMKTS: TGGI) have been getting some attention lately in various investment newsletters or alerts with two of these stocks also being the subject of some paid promotions. But will these small cap green stocks actually deliver some green in the form of greenbacks for investors? Let�� take off the green eyeshades and take a closer look:
Hybrid Coating Technologies, Inc (OTCBB: HCTI) Has Expanded Its Green Technology
Small cap Hybrid Coating Technologies, Inc is a San Francisco-based innovator focused on improving the quality and safety of coatings and paint for industrial and commercial customers around the world and it�� the exclusive licensee of Green Polyurethane(TM) coatings and paint - the world's first-ever patent protected polyurethane-based coatings and paint products which eliminate toxic isocyanates from the entire production process (licensed by Nanotech Industries, Inc). On Friday, Hybrid Coating Technologies, Inc rose 2.13% to $0.48 for a market cap of $44.27 million plus HCTI is up 20% over the past year and down 96.9% since August 2009 according to Google Finance.

Top Chemical Stocks To Invest In 2015: PPG Industries Inc.(PPG)

PPG Industries, Inc. manufactures and supplies protective and decorative coatings. The company offers coatings products for automotive and commercial transport/fleet repair and refurbishing, specialty coatings for signs, and light industrial coatings; and sealants, coatings, and technical cleaners/transparencies for commercial, military, regional jet, general aviation aircraft, and transparent armor for military land vehicles. It also provides coatings and finishes for the protection of metals and structures to metal fabricators, heavy duty maintenance contractors, and manufacturers of ships, bridges, rail cars, and shipping containers; and coatings to painting and maintenance contractors. In addition, PPG sells industrial and automotive coatings to manufacturing companies; adhesives and sealants for the automotive industry; metal pretreatments and related chemicals; and coatings and inks for aerosol, food, and beverage containers. Further, it supplies lenses, sunlenses, a nd optical lens materials; amorphous precipitated silicas for tire and battery separator markets; and Teslin substrate used in radio frequency identification tags and labels, e-passports, drivers? licenses, and identification cards applications. Additionally, PPG offers chlor-alkali and derivative products, such as chlorine, caustic soda, vinyl chloride monomer, chlorinated solvents, calcium hypochlorite, ethylene dichloride, hydrochloric acid, and phosgene derivatives to chemical processing, rubber and plastics, paper, minerals, metals, and water treatment industries. It also produces flat glass and continuous-strand fiber glass for commercial and residential construction, wind energy, energy infrastructure, transportation, and electronics industries. PPG sells its products through company-owned stores, home centers, paint dealers, and independent distributors, as well as directly to customers worldwide. The company was founded in 1883 and is headquartered in Pittsburgh, Pe nnsylvania.

Advisors' Opinion:

[By Monica Gerson]
PPG Industries (NYSE: PPG) is expected to report its Q3 earnings at $2.34 per share on revenue of $3.96 billion.

Nucor (NYSE: NUE) is estimated to report its Q3 earnings at $0.39 per share on revenue of $4.78 billion.
[By Victor Selva]
The company has a current ratio of 17.8% which is higher than the industry mean of 6.55%. Also, it's higher than the one registered by Akzo Nobel NV (AKZOY), Cabot Corporation (CBT) and Olin Corporation (OLN). For investors looking for a higher ROE, PPG Industries Inc. (PPG) could be the option.
[By Laura Brodbeck]
Thursday
Earnings Expected From: UnitedHealth Group Incorporated (NYSE: UNH), Verizon Communications (NYSE: VZ), PrivateBancorp, Inc. (NASDAQ: PVTB), PPG Industries, Inc. (NYSE: PPG), Philip Morris International Inc (NYSE: PM), Nokia Corporation (NYSE: NOK), Peabody Energy Corporation (NYSE: BTU), Intuitive Surgical, Inc. (NASDAQ: ISRG), Chipotle Mexican Grill (NYSE: CMG) Economic Releases Expected: Chinese GDP, Chinese industrial production, Chinese retail sales, US industrial production, US housing starts, US building permits
Friday
[By Dan Caplinger]
But the industry has gone through some major merger and acquisition activity recently. Sherwin-Williams announced last November that it will acquire Mexico's Consorcio Comex for $2.34 billion, giving the company greater geographical and product diversity. That'll be an important source of growth for Sherwin-Williams, as rival PPG Industries (NYSE: PPG ) recently closed on its $1.05 billion acquisition of Akzo Nobel and its architectural coatings business. Moreover, with DuPont (NYSE: DD ) having sold off its performance-coatings business, which focuses largely on automotive paint, to private equity firm Carlyle Group, Sherwin-Williams needed to boost its size in order to keep up with its competition.

Top Chemical Stocks To Invest In 2015: Koninklijke DSM NV (RDSMY.PK)

Koninklijke DSM N.V. (DSM), incorporated on December 28, 1966, is engaged in creating products and services in Life Sciences and Materials Sciences. DSM�� products and services are used in a range of markets and applications. End markets include human and animal nutrition and health, personal care, pharmaceuticals, automotive, coatings and paint, electrical and electronics, life protection and housing. The activities of DSM are grouped into five clusters: Nutrition, Pharma, Performance Materials, Polymer Intermediates, and Base Chemicals and Materials. In May 2010, Orascom Construction Industries announced that the acquisition of the Company�� agro and melamine businesses has been finalized. DSM completed the disposal of DSM Energie Holding B.V. (DSM Energy) to TAQA Abu Dhabi National Energy Company PJSC on September 30, 2009. In September 2010, the Company acquired Microbia, Inc. from Ironwood Pharmaceuticals, Inc. In December 2010, the Company completed the sale of DSM Special Products B.V. to Emerald Performance Materials. In February 2011, the Company completed the acquisition of Martek Biosciences Corporation. In May 2011, the Company sold DSM Elastomers to Lanxess AG. In June 2012, the Company acquired Kensey Nash Corporation (Kensey Nash).

Nutrition

The Nutrition cluster comprises DSM Nutritional Products and DSM Food Specialties. The nutrition and food ingredients businesses serve the food, feed, cosmetic and pharmaceutical industries. DSM holds positions in the markets for ingredients for human and animal nutrition and health. DSM Nutritional Products is the supplier of vitamins, carotenoids, nutritional ingredients, ultra-violet (UV) filters and premixes for human and animal nutrition and health. DSM Nutritional Products is organized around two entities: Animal Nutrition and Health (ANH) and Human Nutrition and Health (HNH). DSM Food Specialties is a global manufacturer of food enzymes, cultures, yeast extracts and other specialty ingredients for the food and b! everage industries.

DSM Food Specialties comprises two business units and an Ingredients Development Unit. Enzymes & Dairy Ingredients supplies a range of food enzymes for applications such as dairy, baking, fruit processing, brewing and wine, starter cultures for cheese and yogurt, preservation solutions for cheese and meat, and tests for the detection of residues of antibiotics in milk. Savoury Ingredients is a major supplier of ingredients for flavorings and flavor enhancers (such as yeast extracts) used in products, such as soups, instant meals, sauces and savory snacks.

Pharma

The Pharma cluster comprises the business groups DSM Pharmaceutical Products (DPP) and DSM Anti-Infectives. DSM is an independent supplier to the pharmaceutical industry. DSM Pharmaceutical Products is a provider of custom contract manufacturing and development services to the pharmaceutical, biopharmaceutical and agrochemical industries.

DSM Pharmaceutical Products consists of three business units: DSM Pharma Chemicals (custom chemical manufacturing services for complex registered intermediates and active pharmaceutical ingredients (APIs), including DSM Exclusive Synthesis (custom manufacturing services for the crop protection industry), DSM Biologics (biopharmaceutical manufacturing technology and services) and DSM Pharmaceuticals, Inc. (finished-dose-form manufacturing services). DSM BioSolutions focuses on custom manufacturing services based on microbial fermentation. DSM Anti-Infectives holds global leadership positions in penicillin G, penicillin intermediates (6-APA and 7-ADCA), active pharmaceutical ingredients such as semi-synthetic penicillins and semi-synthetic cefalosporins (beta-lactams), and other active ingredients, such as nystatin.

Performance Materials

The Performance Materials cluster comprises the business groups DSM Engineering Plastics, DSM Dyneema and DSM Resins. The products are used in a variety of end-use markets: the au! tomotive ! industry, the aviation industry, the electrical and electronics industry, the sports and leisure industries, the paint and coatings industry and the construction industry.

DSM Engineering Plastics is a global player in polyamides, polyesters, polycarbonates and adhesive resins. These materials are used in components for the electrical and electronics, automotive, engineering and packaging industries. DSM produces Dyneema fiber and UD (unidirectional textile sheets) in Heerlen (Netherlands) and in Greenville (North Carolina, United States) through its gel-spinning process. DSM Resins consists of four business units: DSM NeoResins+, DSM Powder Coating Resins, DSM Desotech and DSM Composite Resins.

Polymer Intermediates

The Polymer Intermediates cluster consists of DSM Fiber Intermediates. DSM Fibre Intermediates produces caprolactam and acrylonitrile, which are raw materials for synthetic fibers and engineering plastics. Other products include ammonium sulfate (a fertilizer), diaminobutane, sodium cyanide and cyclohexanone. DSM�� caprolactam production capacity is more than 600,000 tons per annum.

Base Chemicals and Materials

The Base Chemicals and Materials cluster consists of DSM Agro, DSM Melamine, DSM Elastomers and a number of activities that have been carved out from other clusters. DSM Agro produces fertilizers and is active in Northwestern Europe. DSM Melamine is a producer of melamine, used in wood-based panels and laminates for furniture and flooring. DSM Elastomers manufactures synthetic rubbers (EPDM) for use in cars and other transportation vehicles, white goods, various industrial products and construction materials and as motor-oil additives.

DSM Agro is a producer of ammonia and high-nitrogen fertilizers for grasslands and agricultural crops; products and services for responsible fertilization. DSM Agro sells about 2.4 million tons of fertilizers per year. The Base Chemicals and Materials cluster also includes! several ! activities that have been carved out from other clusters. These include Citric Acid, DSM Special Products and the Maleic Anhydride and derivatives business.

Other activities

Other activities comprise various activities and businesses that do not belong to any of the five reporting clusters. It consists of both operating and service activities and also includes a number of costs that cannot be logically allocated to the clusters. Other activities includes the DSM Innovation Center, DSM Venturing and a number of other activities, such as Sitech Services, EdeA, DSM Insurances and part of the costs of corporate activities. Sitech Services provides technological consultancy, expertise in energy and auxiliary materials, the supply of utilities and human resources.

EdeA VoF owns, operates and maintains most of the production and distribution facilities for utilities (for example steam, power and water) at the Chemelot site in Sittard-Geleen (Netherlands). EdeA VoF is a joint venture with Essent, an energy production and distribution company. DSM�� stake is 50%. DSM retains a limited part of its Property Damage and Business Interruption and Product Liability risks via a captive insurance company. DSM has a share in a limited number of associates.

Advisors' Opinion:

[By Markus Aarnio]
BioAmber expects its advanced bio-based specialty chemicals to compete with petrochemical equivalents that are proven in the market and manufactured by established companies, such as Gadiv Petrochemical Industries, Kawasaki Kasei, DSM (RDSMY.PK) and numerous small Chinese producers including Anqing Hexing Chemical, and Anhui Sunsing Chemicals. In addition, BioAmber's products will compete against other companies in the bio-based specialty chemical industry, both early stage companies, such as Genomatica (for bio-based 1,4 BDO) and Myriant Corporation (for bio-succinic acid), and established companies, such as a collaborative venture between DSM and Roquette Frères S.A. and a collaborative venture between BASF (BASFY.PK) and Purac (both for bio-succinic acid).

Saturday, April 26, 2014

Buffalo Wild Wings Leading on Tech Innovation

Buffalo Wild Wings Inc. (BWLD) owns, operates and franchises a chain of more than 900 casual dining restaurants across the United States and Canada. Buffalo Wild Wings has a strong brand prospect and is considered one of the most popular casual dining restaurant chains – with a dine and watch concept and 40 television sets per outlet. The company offers its chicken wings, hamburgers, sandwiches, salads and beers until 2am. Not only sports fan love Buffalo but also families which enjoy taking their children to restaurants where their children can watch TV and play videogames.

Its franchising system allows the company to safeward earnings. With more than 50% of its business franchised, the company reduces capital requirements and facilitates EPS growth and ROE expansion. Moreover, it also allows increasing free cash flow, which permits Buffalo to reinvest in brand recognition, and shareholder return.

Despite the unstable economic scenario, the company has managed to keep posting positive results, being well position within the market as to sustain its same-stores sales growth. Fourth quarter 2013 earnings of $1.10 were above estimations, increasing 23.6% versus 2012, driven by an increase in the top line and lower costs of sales. The new menu launches and marketing strategies are likely to continue boosting the company's sales, and the recent association with NCAA will further increases visibility.

Innovations

Buffalo Wild Wings has been investing in new product development. New menu items such as rib slammers, flat breads and Sam Adams Rebel IPA, the company's new beer, Buffalo, has been able to enhance its menu and attract more customers. It has also successfully changed its traditional way of menu serving chicken wings, with new weight based portions. These efforts have resulted on improved margins and more stable earnings.

Another initiative introduced in the guest experience business model is the installment of tablets in all of its restaurants to provide exclusive social gaming opportunities. Teaming up with NTN Buzztime Inc. (NTN) Buffalo uses Beond tablets to allow guests order food and drinks, play games, and pay their bill. Also, the three-year collaboration with National Collegiate Athletic Association (NCAA) has enabled the company to be an authorized hangout for the NCAA March Madness sports series, increasing visibility as a brand and attracting more customers to their outlets. These efforts, along with more intense advertising initiatives, new point-of-sales programs, improved supply chain and remodeling of its restaurants are expected to boost sales, and strengthen the business in the long run. Buffalo Wild Wings has selected the NCR Corp. (NCR) Aloha Online Ordering solution for its locations to help drive its takeout ordering business. The NCR technology will enable Buffalo to handle both on and off-premise transactions within one system.

Expansion

The company has also been focusing on store opening. Despite the macroeconomic uncertainty, Buffalo has kept with this initiative, and has witnessed unit growth of nearly 11.6% in 2011, 9.1% in 2012 and 10.9% in 2013. Moreover, associations are on track, and the company has acquired a minority stake in PizzaRev, launching in 2012 PizzaRev fast-casual pizza restaurant, with a Craft Your Own initiative. The company plans to open two more PizzaRev units in Minneapolis in 2014 and a few more outlets by the end of 2014. Another partnership on track is with Pepsico Inc. (PEP) and Dr. Pepper Snapple Group, Inc. (DPS) to serve drinks across all its locations. Through these partnerships, Buffalo Wild Wings is developing new sauces and salad dressings for the restaurant chain, like the Mountain Dew-flavored salad dressing and Doritos-flavored wing sauce. These partnerships are expected to increase visibility and improve guest traffic as well.

Economic setbacks

Macroeconomic uncertainties are always threatening restaurant industry companies, as the budget cuts, the high tax rates and tightened credit availability hurt consumer discretionary spending. In addition, the strong competition amid this industry intensifies margin pressures. Still, Buffalo Wild Wings margins are improving given their new initiatives. But the increased expenses and investments to fuel long-term growth might hurt profits in the near term.

The company's revenue missed analysts' estimates last quarter, but its traffic remained very strong. Top line increased year over year, and total revenue increased 12.4%, despite missing estimations of $345.0. Still, the growth of Buffalo Wild Wings has been outstanding: from 553 locations to more than 1,000 restaurants today, for a 12% compounded annual growth rate in locations.

Bottom line

The company has recently been developing numerous initiatives to attract more customers and enhance its brand furthermore. Improving its facilities, introducing technology and with different marketing campaigns, Buffalo is likely to keep in a highly competitive position and boost its sales. Buffalo Wild Wings' comparable-store sales increased 5% and its profit grew an astonishing 25%.

Disclosure: Damian Illia holds no position in any of the stocks mentioned

About the author:Damian IlliaA fundamental analyst at Lonetreeanalytics.com constantly looking for value and income investments.

Visit Damian Illia's Website

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Friday, April 25, 2014

The 5 Best Stocks to Buy Around $5

Popular Posts: 5 Dividend Stocks Yielding More Than 5%9 Cheap Stocks to Buy Now for $10 or Less10 Cheap Stocks to Buy Under $10 Recent Posts: The 5 Best Stocks to Buy Around $5 7 Big-Name Tech Stocks to Plug In Now 5 Dividend Stocks Yielding More Than 5% View All Posts

Finding a good investment for around $5 is not an easy task.

five The 5 Best Stocks to Buy Around $5 After all, most publicly traded stocks with a low share price got that bargain valuation by running into trouble — as in, enjoying a share price of $10 or $20 several years ago and now trading at a deep discount thanks to pessimistic investor sentiment.

However, shrewd investors can find some good stocks to buy in the Wall Street bargain bin if they know where to look.

While the following stocks are admittedly a bit risky and have some issues, they all are established companies that are worth more than $300 million and are at worst breakeven. That means these bargain stocks to buy have no risk of going bankrupt anytime soon … even if they have admittedly faced some challenges in the last few years.

Best Stocks to Buy for Around $5: Advanced Semiconductor Engineering (ASX)

asx logo The 5 Best Stocks to Buy Around $5 Advanced Semiconductor Engineering (ASX) builds and distributes integrated circuits and other electronics. While that's not as sexy as other chipmakers that play to mobile, it's still a good business, considering the general demand for microchips in everything from cars to computers to TVs.

The Taiwan-based company is close to many Asian electronics manufacturers. And regardless of whether those manufacturers crank out something as hot as the iPhone from Apple (AAPL), ASX still will have a strong baseline simply because of how many high-tech devices exist in the world.

Moreover, ASX is not a chip designer, just a manufacturer. That means while it doesn't have the same big margins as the companies who create the next hot chip, it also doesn't have the same risk to get it right with R&D. Advanced Semiconductor's diverse business makes it a stable player for the long haul, and not as finicky as companies that rely heavily on laptops an desktops. That stability also is reflected in the form of a 3% dividend yield.

In a post-PC age, there are assuredly sexier tech plays out there. But ASX is up 35% in the last year and about 20% YTD. With a decent dividend, decent revenue and profit growth and momentum for share prices, ASX could be the best stock to buy for around the $5 mark right now.

Best Stocks to Buy for Around $5: Aeropostale (ARO)

AEROPOSTALELOGO The 5 Best Stocks to Buy Around $5 Specialty retailer Aeropostale (ARO) certainly wouldn't be categorized as a growth stock. The company has seen stagnant revenue for some time, and is currently operating in the red.

But after crashing over 60% in the last year, the collapse in ARO stock might now be a bit overdone. Sure, margins were pinched and sales have gone nowhere … but Aeropostale is on track to return to profitability this year as it closes about 50 stores in 2014 and might close more than a hundred more after that.

Furthermore, let's not act like ARO is alone. Many teen retailers including Gap (GPS) and Abercrombie & Fitch (ANF) have been hit by a horrible group of negative pressures in the last few years that include:

Weaker consumer spending thanks to the Great Recession Continued growth in e-commerce and declines in mall traffic Changing fashion tastes away from bigger brands, and big-time competition from smaller players

This undoubtedly has created challenges, but ARO is right-sized for the current environment and all the negativity has been priced in. Investors who buy this $5 stock now could see a big pop once the stock returns to profitability in a few quarters, and continued improvement on employment and spending data could bode well for retail sales across the board.

An added sweetener: There are rumors of an Aeropostale buyout by private equity to unlock value through cost cutting and restructuring. That certainly would come at a premium, perhaps at $7 or $8 a share, and result in a quick but substantial pop to any shareholders.

Best Stocks to Buy for Around $5: Hercules Offshore (HERO)

Hercules Offshore1 The 5 Best Stocks to Buy Around $5 Oil stocks haven't really been all that kind to investors over the last few years as weak pricing coupled with weaker energy demand in emerging markets has hurt the bottom line.

But one area of the energy sector worth looking at is offshore oil drillers, including leader Hercules Offshore (HERO). While oil prices are soft, the bottom line is that the world's easy oil is gone and energy companies are increasingly turning to harder-to-access offshore oil and gas fields in order to bolster reserves … and that means big business for servicers like HERO.

Now, Hercules’ stock price sits at roughly half of its 2013 peak and has run into trouble since its largely shallow-water business hasn't been booming. But the company divested a number of barge-based rigs in 2013, and is about breakeven right now.

While it's unlikely that we will see a surge in oil prices leading to a surge in drilling contracts, the good news is that HERO appears to be right-sized now for the current market environment and has decent upside potential if investment in oil and gas drilling stays strong.

After a big drop during the past few years, much of the negativity has been priced into the energy sector broadly and this sub-$5 stock in particular.

Best Stocks to Buy for Around $5: Office Depot (ODP)

OfficeDepot The 5 Best Stocks to Buy Around $5 While the office supply game surely isn't what it used to be thanks to e-commerce and online orders, there is hope for fallen giant Office Depot (ODP).

Office Depot merged with the struggling OfficeMax last year, which will generate big cost savings in the coming year; in 2014, the company is expected to return to profitability once more.

Look, nobody is impressed by ODP’s performance in the last few quarters. Consider this quote from Office Depot CEO Roland Smith in February after bad quarterly numbers: "While (fourth-quarter) results were clearly disappointing, they shouldn't be a big surprise." Furthermore, Office Depot warned that it expects sales to decline in 2014 as it restructures and closes underperforming stores.

10 Best Heal Care Stocks To Own Right Now

The Office Depot-OfficeMax merger, however, changes the story here. The company is still battered based on its past history, and trading at a deep discount to its future sales and profits. Consider that ODP has about $1 billion in cash on hand and won't see most of its debt come due until 2019, giving it a pretty nice cash cushion.

The downside in Office Depot appears limited now that the office space has consolidated and the pressures of e-commerce have been baked in. A secular recovery could increase hiring and business spending, and result in better sales for ODP as a result.

This still is a risky $5 stock, to be sure, but the worst does appear over for Office Depot.

Best Stocks to Buy for Around $5: Gramercy Property Trust (GPT)

GramercyPropertyTrustGPT185 The 5 Best Stocks to Buy Around $5 Gramercy Property Trust (GPT) is a real estate investment trust that manages mainly industrial and office properties across the U.S. As of last year, GPT controlled more than 110 buildings with about 4.2 million square feet of office space and 1.5 million square feet of industrial space.

Right now, GPT is struggling to break even on the heels of five new property acquisitions in 2013. However, in March, GPT paid its first dividend since 2007, so things are looking up.

Compared with other REITs, the roughly 3% yield isn't amazing … and besides, you have to annualize the 4-cent payout and trust it's going to be there in the coming quarters. Also, shares are down about 7% so far in 2014 despite the reinstated payouts.

However, a recovery in the broader U.S. economy could lift demand for business real estate and result in bigger revenue and profit for GPT.

If you're looking for a cyclical way to play the recovery and want to get in on a good long-term dividend investment, Gramercy Property might be among the best stocks to buy right now.

GPT stock is down about 80% from its 2007 peak, and its dividends remain a fraction of past payouts.

Still, even if Gramercy only gets part of the way back to where it was several years ago, investors will be rewarded handsomely.

Jeff Reeves is the editor of InvestorPlace.com and the author of The Frugal Investor's Guide to Finding Great Stocks. As of this writing, he did not hold a position in any of the aforementioned securities. Write him at editor@investorplace.com or follow him on Twitter via @JeffReevesIP.

Thursday, April 24, 2014

Carl Icahn on Apple, Ackman and Valeant, and Seeding Activist Funds

Also check out: Carl Icahn Undervalued Stocks Carl Icahn Top Growth Companies Carl Icahn High Yield stocks, and Stocks that Carl Icahn keeps buying Bill Ackman Undervalued Stocks Bill Ackman Top Growth Companies Bill Ackman High Yield stocks, and Stocks that Bill Ackman keeps buying

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Wednesday, April 23, 2014

VIVUS Extends Olive Branch, Follows With Fist

Oh, what a difference a day makes.

On Saturday, VIVUS (NASDAQ: VVUS ) extended an olive branch to its largest shareholder and proxy-fight-adversary First Manhattan, offering to give the hedge fund three board seats whether First Manhattan won seats or not.

Trying to compromise is a good idea, one that I suggested a few weeks ago. Shares have nearly quadrupled since Biogen Idec (NASDAQ: BIIB ) ended its proxy fight with investor Carl Icahn by giving one of his nominees a seat on the board. I doubt Icahn's nominee had that much influence on the success, given that there are 12 directors on the board. But not facing a proxy fight almost certainly helped Biogen recruit CEO George Scangos, who arguably did have a lot to do with the success.

VIVUS' niceness was short-lived, though, with the company claiming Sunday that it had reported First Manhattan to the SEC for "false and misleading statements." The company didn't actually say what First Manhattan had said except to point out that it was regarding statements about the recommendation of Institutional Shareholder Services, which recommended voting for three of First Manhattan's nominees.

VIVUS used the issue as a reason (excuse) to delay Monday's stockholders' meeting until Thursday. First Manhattan countered suing VIVUS, asking the court to order the inspector of elections to certify the results based on the results that were prepared to be voted at the meeting on July 15.

I doubt the court will agree; for most annual meetings, shareholders have the right to vote at the meeting, so how can we know how shareholders would have ultimately voted if the meeting never occurred?

It seems clear from their actions, though, that both sides believe First Manhattan is leading the proxy fight. No one knows what's next, but I doubt it'll involve any compromises.

The real winner
The longer this drags on, the better it is for Arena Pharmaceuticals (NASDAQ: ARNA ) and Eisai, which sell the obesity drug Belviq that competes directly with VIVUS' Qsymia. With management and employees distracted by the proxy fight, I doubt marketing of the drug is firing on all cylinders.

If First Manhattan wins, the hedge fund has made it clear it plans to replace CEO Leland Wilson with Anthony Zook, the former president of MedImmune. Even if the switch can take place fairly quickly, it'll take time to get the new strategy implemented.

Depending on how well VIVUS recovers from the turmoil, the proxy fight could even benefit Orexigen (NASDAQ: OREX ) , which has an obesity drug that could be on the market next year.

If VIVUS somehow pulls a come-from-behind victory, I expect that shares might drop substantially since it seems clear there's a sizable shareholder base looking for a change.

Investors might also vote in some, but not all, of First Manhattan's nominees, which would seem to be the worst outcome for VIVUS and therefore the best for Arena and Orexigen. Internal boardroom fighting would certainly hinder the long-term prospects for Qsymia.

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Tuesday, April 22, 2014

Why Eaton Vance's Earnings May Not Be So Hot

Although business headlines still tout earnings numbers, many investors have moved past net earnings as a measure of a company's economic output. That's because earnings are very often less trustworthy than cash flow, since earnings are more open to manipulation based on dubious judgment calls.

Earnings' unreliability is one of the reasons Foolish investors often flip straight past the income statement to check the cash flow statement. In general, by taking a close look at the cash moving in and out of the business, you can better understand whether the last batch of earnings brought money into the company, or merely disguised a cash gusher with a pretty headline.

Calling all cash flows
When you are trying to buy the market's best stocks, it's worth checking up on your companies' free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That's what we do with this series. Today, we're checking in on Eaton Vance (NYSE: EV ) , whose recent revenue and earnings are plotted below.

Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. Dollar values in millions. FCF = free cash flow. FY = fiscal year. TTM = trailing 12 months.

Over the past 12 months, Eaton Vance generated $74.5 million cash while it booked net income of $216.8 million. That means it turned 5.9% of its revenue into FCF. That sounds OK. However, FCF is less than net income. Ideally, we'd like to see the opposite.

All cash is not equal
Unfortunately, the cash flow statement isn't immune from nonsense, either. That's why it pays to take a close look at the components of cash flow from operations, to make sure that the cash flows are of high quality. What does that mean? To me, it means they need to be real and replicable in the upcoming quarters, rather than being offset by continual cash outflows that don't appear on the income statement (such as major capital expenditures).

For instance, cash flow based on cash net income and adjustments for non-cash income-statement expenses (like depreciation) is generally favorable. An increase in cash flow based on stiffing your suppliers (by increasing accounts payable for the short term) or shortchanging Uncle Sam on taxes will come back to bite investors later. The same goes for decreasing accounts receivable; this is good to see, but it's ordinary in recessionary times, and you can only increase collections so much. Finally, adding stock-based compensation expense back to cash flows is questionable when a company hands out a lot of equity to employees and uses cash in later periods to buy back those shares.

So how does the cash flow at Eaton Vance look? Take a peek at the chart below, which flags questionable cash flow sources with a red bar.

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Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. Dollar values in millions. TTM = trailing 12 months.

When I say "questionable cash flow sources," I mean items such as changes in taxes payable, tax benefits from stock options, and asset sales, among others. That's not to say that companies booking these as sources of cash flow are weak, or are engaging in any sort of wrongdoing, or that everything that comes up questionable in my graph is automatically bad news. But whenever a company is getting more than, say, 10% of its cash from operations from these dubious sources, investors ought to make sure to refer to the filings and dig in.

With 23.7% of operating cash flow coming from questionable sources, Eaton Vance investors should take a closer look at the underlying numbers. Within the questionable cash flow figure plotted in the TTM period above, stock-based compensation and related tax benefits provided the biggest boost, at 68.4% of cash flow from operations. Overall, the biggest drag on FCF came from changes in accounts receivable, which represented 23.1% of cash from operations.

A Foolish final thought
Most investors don't keep tabs on their companies' cash flow. I think that's a mistake. If you take the time to read past the headlines and crack a filing now and then, you're in a much better position to spot potential trouble early. Better yet, you'll improve your odds of finding the underappreciated home-run stocks that provide the market's best returns.

Can your retirement portfolio provide you with enough income to last? You'll need more than Eaton Vance. Learn about crafting a smarter retirement plan in "The Shocking Can't-Miss Truth About Your Retirement." Click here for instant access to this free report.

We can help you keep tabs on your companies with My Watchlist, our free, personalized stock tracking service.

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Monday, April 21, 2014

Cost Pressures Aside, Businesses Upbeat About Economy

Economy Manufacturing Paul Sancya/APBusinesses reported higher material costs in the first quarter. NEW YORK -- Rising costs for materials and labor appear to be pressuring businesses, according to a quarterly survey from the National Association of Business Economics. During the first quarter of the year, 31 percent of businesses surveyed reported higher material costs, more than double the 15 percent that saw costs rise in the previous survey. Additionally, 35 percent reported rising wages and salaries at their businesses in the past three months, up from 23 percent in January. Yet those who said they raised the prices they charge in the past three months remained unchanged at 20 percent, according to the latest NABE survey of 72 members, which was conducted between March 18 and April 1. "It appears that businesses were not able to pass on costs increases, resulting in increased pressure on margins," the survey findings said. The quarterly survey by NABE is intended to gauge business conditions at members' firms or industries. The April survey reflects first quarter results, as well as the near-term outlook. Despite the cost pressures, businesses seem more upbeat about the direction of the broader economy. The survey found that 80 percent said they expect the GDP to rise at least 2 percent over the next year. Nearly three-quarters also said they expect labor market conditions to improve, with unemployment easing to between 5 percent and 6 percent in the next one to three years. And over the next six months, 43 percent of respondents expect their firms to expand employment. Still, a majority expect wage growth to remain subdued, with growth of up to 3 percent over the next three years. The number of businesses that reported rising sales in the first quarter fell to 53 percent, down from 63 percent in the previous quarter. Jack Kleinhenz, president of NABE and chief economist at the National Retail Federation attributed the decline to "a very rough winter" in a statement. Capital spending rose for 38 percent of respondents, up from 28 percent in January. Meanwhile, those reporting rising profit margins during the period declined slightly to 32 percent, from 34 percent in the previous survey. Looking ahead to the coming quarter, 41 percent said they expect costs to increase up to 5 percent. Whether they'll be able to pass that on to customers is uncertain; 31 percent said they expect their businesses to raise prices. That's down from the 43 percent who said they planned to raise prices in January, but still an elevated level from most of last year.

Saturday, April 19, 2014

Why Apple Still Looks Juicy

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, consumer electronic device giant Apple (NASDAQ: AAPL ) has earned a respected four-star ranking.

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

Apple facts

Headquarters (founded)	Cupertino, Calif. (1976)
Market Cap	$405.3 billion
Industry	Computer hardware
Trailing-12-Month Revenue	$169.1 billion
Management	CEO Tim Cook (since 2011) CFO Peter Oppenheimer (since 2004)
Return on Equity (average, past 3 years)	39.7%
Cash/Debt	$39.1 billion / $0
Dividend Yield	2.8%
Competitors	Google BlackBerry

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

On CAPS, 92% of the 30,076 members who have rated Apple believe the stock will outperform the S&P 500 going forward.

Just last month, one of those Fools, All-Star JaysRage, succinctly summed up the Apple bull case for our community:

I am generally in favor of the recent cash-management activities. If Apple stays pinned at [$450 per share] or lower, it will save the company a ton of money. ...

It has been a long time since Apple introduced new products. Some Apple "investors" are restless and bored and many of them are chasing some other bright shiny things now that Apple isn't as sexy.

Long story short: I think the cash management should keep Apple pinned near $450. If the predicted pipeline begins to produce new products in Q3 and Q4 and beyond as promised by management, Apple will regain the "sexy" and we'll see it approach its value sometime toward the beginning of 2014. I do think they will see some continued margin erosion on mature products, but that is priced in and then some.

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Friday, April 18, 2014

You're Wrong About Apple's Affordable iPhone

Apple's (NASDAQ: AAPL ) margin contractions have rattled investors over the past year. By no means is Apple's current level of profitability bad -- rather, the Mac maker faces very hard comparisons with an extremely lucrative fiscal 2012. Apple is widely expected to launch an affordable iPhone model later this year, at long last pursuing a wider product portfolio.

Many investors have thought that such a lower-priced model would further erode Apple's overall gross margin. Many investors may be wrong.

Word on the Street
Morgan Stanley analyst Katy Huberty believes that the rumored affordable iPhone model will end up boosting Apple's margins as opposed to the other way around. It's true that the mid-range model will inevitably end up less profitable than the high-end flagship, but it's also true that it may fetch a higher gross margin than the rest of Apple's products.

Add in the fact that an affordable model will boost unit sales significantly and that there's some inherent operating leverage in Apple's business due to the scalability of software development, and the net result could very well be increased margins. Adding a $399 iPhone model to the lineup increases her total revenue estimate by 5% and gross profit by 6% in dollar terms, with a modest increase of 0.1% in gross margin. A lot of that upside would be driven by total iPhone units, with Huberty increasing her estimate from 77 million to 100 million for the second half of 2013.

This same effect is already starting to happen with the iPhone 4, the 2010 model that Apple has been aggressively pricing in emerging markets. Apple has seen impressive spikes in iPhone units due to these affordability initiatives. For the current quarter, Huberty believes that Apple's pricing efforts will translate into a 14% drop in iPhone 4 average selling prices -- but also a 0.3% gain in gross margin.

Gross margin could be further reinforced by sequentially slowing sales of iPads and Macs, since those devices are less profitable than an affordable iPhone would be. Investors shouldn't fret about a couple of basis points of profitability here and there. Instead, investors should acknowledge that the mid-range unsubsidized market (which is mostly abroad) is an enormous incremental opportunity for Apple that it has yet to tap.

Even if the affordable iPhone cannibalizes the flagship model, Apple has a strong track record of successful self-cannibalization. Read about Apple's past and future in The Motley Fool's latest free report, "Apple Will Destroy Its Greatest Product." Can Apple really disrupt its own iPhones and iPads? Find out by clicking here.

Thursday, April 17, 2014

Mid-Afternoon Market Update: Markets Trade Up as Bank of America Shares Remain Down

Related BZSUM Market Wrap For April 16: Markets Hold On To Gains On Positive Yellen Comments And Economic Data Mid-Day Market Update: Yahoo Jumps On Upbeat Results; ASML Shares Decline

Toward the end of trading Wednesday, the Dow traded up 0.83 percent to 16,397.79 while the NASDAQ jumped 0.92 percent to 4,071.51. The S&P also rose, gaining 0.82 percent to 1,858.04.

Leading and Lagging Sectors
Industrials sector surged 0.85 percent, saw Arrowhead Research (NASDAQ: ARWR) as the top gainer. Meanwhile, other gainers in the sector included ION Geophysical (NYSE: IO), with shares up 6.1 percent, and China Distance Education Holdings (NYSE: DL), with shares up 5 percent. In trading on Wednesday, technology shares gained by just 0.28 percent.

Top decliners in the sector included ASML Holding NV (NASDAQ: ASML), off 5 percent, and ADTRAN (NASDAQ: ADTN), down 6.3 percent.

Top Headline
Bank of America (NYSE: BAC) reported a net loss in the first quarter. Bank of America posted a quarterly net loss of $276 million, or $0.05 per share, versus a year-ago profit of $1.5 billion, or $0.10 per share. The results include a pretax litigation expense of $6 billion, or around $0.40 per share after tax.

Its total net revenue slipped to $22.77 billion versus $23.41 billion, while revenue net of interest expense fell to $22.57 billion versus $23.20 billion. However, analysts were estimating earnings of $0.05 per share on revenue of $22.32 billion.

Equities Trading UP
SodaStream International (NASDAQ: SODA) shares shot up 8.52 percent to $40.90. Calcalist reported that the company is in talks to sell its 10% to 16% stake to Pepsi, Dr. Pepper Snapple or Starbucks.

Shares of Yahoo! (NASDAQ: YHOO) got a boost, shooting up 6.17 percent to $36.32 after the company reported better-than-expected first-quarter results. Yahoo reported its adjusted earnings of $0.38 per share on revenue of $1.09 billion. However, analysts were estimating a profit of $0.37 per share on revenue of $1.08 billion. Wells Fargo upgraded Yahoo! from Market Perform to Outperform.

CBS Outdoor (NYSE: CBSO) was also up, gaining 5.65 percent to $30.66 following a favorable ruling from the IRS that the company was indeed a REIT.

Equities Trading DOWN
Shares of ASML Holding NV (NASDAQ: ASML) were down 3.39 percent to $82.22 after the company reported a rise in its first-quarter net profit and lowered its first-half forecast.

Bank of America (NYSE: BAC) was down, falling 2.24 percent to $16.02 after the bank reported a net loss in the first quarter. Bank of America posted a quarterly net loss of $276 million, or $0.05 per share, versus a year-ago profit of $1.5 billion, or $0.10 per share.

NetApp (NASDAQ: NTAP) was also down, dropping 2.28 percent to $36.14 after UBS released a bearish report on the company.

Commodities
In commodity news, oil traded down 0.04 percent to $103.71, while gold traded up 0.18 percent to $1,302.40.

Silver traded up 0.13 percent Wednesday to $19.65, while copper fell 0.61 percent to $3.03.

Eurozone
European shares were higher today.

The Spanish Ibex Index rose 1.58 percent, while Italy's FTSE MIB Index jumped 3.44 percent.

Meanwhile, the German DAX climbed 1.56 percent and the French CAC 40 jumped 1.39 percent while U.K. shares gained 0.70 percent.

Economics
US housing starts gained 2.8% to an annual rate of 946,000 in March, versus an original estimate of a rate of 907,000 in February. However, economists were expecting a rate of 970,000.

The MBA reported that its index of mortgage application activity gained 4.30% in the week ended April 11.

US industrial production rose 0.70% in March, versus economists' expectations for a 0.50% gain.

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Crude stockpiles rose 10 million barrels for the week ended April 11, the US Energy Information Administration reported. However, analysts were expecting a gain of 2.4 million barrels.

The Federal Reserve will release its latest Beige Book report at 2:00 p.m. ET.

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Tuesday, April 15, 2014

GM creating new global safety organization

NEW YORK — General Motors is creating a new organization within the company to focus on safety across all of its vehicle lines, CEO Mary Barra said Tuesday.

The Global Product Integrity organization will be modeled on a similar group within GM that is centered on product quality.

"We will mirror this approach to focus on safety performance," Barra told the NADA/J.D. Power Automotive Forum in New York. "Our goal is to ensure the highest levels of execution consistently across all our vehicles."

The new organization will report directly to Mark Reuss, GM's global product development chief, and will incorporate the team under Jeff Boyer, the safety chief recently appointed by Barra.

She says the goal is to "provide the highest levels of safety, quality and customer service … and ensure that a situation like the ignition-switch recall doesn't happen again."

Her appearance on the eve of the New York Auto Show once again put her center stage on a recall that of 2.6 million small cars worldwide for faulty ignition switches. The switches are blamed for 12 deaths in the U.S. and one in Canada, and GM is the target of multiple government investigations.

In a Q&A after her remarks, Barra was asked about why GM quietly upgraded the switch design in 2006 without assigning a new part number and without a recall of earlier vehicles. She said it is "not good engineering" and that future problems will be dealt with as soon as they are evident. While she talked of putting two switch engineers on paid leave last week "while we seek the truth about what happened," she declined to discuss the departure this week of GM's global public relations chief.

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She lamented that the recall has overshadowed progress GM has made on other fronts — from sales growth to positive reviews for its new vehicles. But she said GM is committed ! to the recall and lauded efforts of GM dealers to go to extra lengths to fix recalled cars and provide customers with loaners.

Although on the job as CEO only months, the debacle has put Barra in a national — if unfavorable — spotlight and made her a target for late-night comedy.

The most personal, perhaps, was an opening skit on NBC's Saturday Night Live a week ago. Barra, a regular SNL watcher, said that she saw the skit. Asked about it, she said, "I think it's important to maintain your sense of humor." Asked to rate how well actress Kate McKinnon captured her, she replied, "There are probably better people than me to judge."