Why Miller Energy Resources (MILL) Stock Is Up Today

NEW YORK (TheStreet) -- Miller Energy Resources (MILL) was gaining 15.7% to $6.33 Monday after SunTrust upgraded the stock to "buy" from "neutral."

The analyst firm raised its price target for Miller Energy to $10 from $8. SunTrust analyst Neal Dingmann sees Miller Energy's production growing by about 180% this year, and about 60% next year due to acquisitions and wells in Cook Inlet and North Slope.

Must read: Warren Buffett's 25 Favorite Stocks

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more. TheStreet Ratings team rates MILLER ENERGY RESOURCES INC as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation: "We rate MILLER ENERGY RESOURCES INC (MILL) a SELL. This is driven by several weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share and disappointing return on equity." Highlights from the analysis by TheStreet Ratings Team goes as follows: MILLER ENERGY RESOURCES INC's earnings per share declined by 7.1% in the most recent quarter compared to the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, MILLER ENERGY RESOURCES INC reported poor results of -$0.60 versus -$0.47 in the prior year. For the next year, the market is expecting a contraction of 1.7% in earnings (-$0.61 versus -$0.60). The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, MILLER ENERGY RESOURCES INC's return on equity significantly trails that of both the industry average and the S&P 500. MILL's debt-to-equity ratio is very low at 0.20 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Despite the fact that MILL's debt-to-equity ratio is low, the quick ratio, which is currently 0.63, displays a potential problem in covering short-term cash needs. The gross profit margin for MILLER ENERGY RESOURCES INC is rather high; currently it is at 63.45%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of -18.65% is in-line with the industry average. Net operating cash flow has significantly increased by 2001.19% to $11.10 million when compared to the same quarter last year. In addition, MILLER ENERGY RESOURCES INC has also vastly surpassed the industry average cash flow growth rate of 17.57%. You can view the full analysis from the report here: MILL Ratings Report STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Is Easier Credit Juicing Auto Sales?

Sales are booming for Ford Motor (F), General Motors (GM) and other automakers–or are they? Morgan Stanley’s Adam Jonas and team aren’t so sure, as they see a disconnect between the monthly data and what they’re hearing from dealers and auto manufacturers.

Getty Images

The reason: Easier access to auto loans, which are creating the illusion of higher sales. Jonas offers a hypothetical dialogue to show how auto sales could be inflated by easy credit:

Customer: So I want to buy this SUV. Dealer: Got plenty in stock and can get you out
the door in a base version for $521/mo ($30k
loan, 60 mth term, 1.7% APR). Whatcha say? Customer: Darn… my budget is $500/mth and
I really can't go any higher than that. Dealer: Hmmm… lemme talk with the folks in
finance and see what we can come up with.
(Dealer steps away, comes back 5 minutes later and
hands the Customer a sheet of paper) Dealer: Good news, we got your payment
down to $409/mo ($30k loan, 84 mth term,
4.0% APR). We gotta deal? Customer (looking down at term sheet, a
broad smile forms from ear to ear): Not only
do we have a deal, but now I can get 4WD and
the tech package! How'd you do that? Dealer: They're running a special on 7 year
loans at a modestly higher rate. Everything
else is the same. (Satisfied customer drives away in an SUV with an
ATP nearly 20% higher than the base price).

Jonas doesn’t worry about the use of credit, per se, but how that looks to investors in stocks like General Motors and Ford. “In our view, easier credit is a natural sign of a recovering car market and we think it has a lot of room to run,” he says. “What is less clear is how the stock market will interpret the optics of accelerating pricing into a higher seasonally adjusted annual rate and what multiple it will pay for the associated earnings.”

Shares of General Motors have dropped 0.3% to $36.79 at 2:20 p.m., while Ford Motor has risen 0.2% to $17.24.

10 Best “Strong Buy” Stocks — BITA SHPG TRGP and more

Popular Posts: 10 Oil and Gas Stocks to Buy Now15 Oil and Gas Stocks to Sell NowBiggest Movers in Energy Stocks Now – NGLS EXXI WTI TPLM Recent Posts: Biggest Movers in Healthcare Stocks Now – PBYI AGN PRGO EXAS Biggest Movers in Basic Materials Stocks Now – BCPC KS CMP WOR Hottest Technology Stocks Now – SUNE MLNX NSIT BRCD View All Posts 10 Best “Strong Buy” Stocks — BITA SHPG TRGP and more

This week, these ten stocks, all currently earning A’s (“strong buy”) on Portfolio Grader, have the best year-to-date performance.

Since the first of the year, shares of Bitauto Holdings Ltd. Sponsored ADR () have soared 57.9%. Bitauto provides Internet content and marketing services for the automotive industry, primarily in the People'’s Republic of China. .

Since January 1, Shire PLC Sponsored ADR () has climbed 61.9%. Shire, a biopharmaceutical company, researches, develops, manufactures, sells, and distributes pharmaceutical products. .

Shares of Targa Resources () have risen 62.9% since January 1. Targa Resources provides midstream natural gas and natural gas liquid (NGL) services in the United States. The stock’s dividend yield is 2.6%. .

Since January 1, Texas Pacific Land () has jumped 64.8%. Texas Pacific Land Trust derives revenue from all avenues of managing land, such as royalties from oil and gas and land sales. .

Since January 1, Illumina, Inc. () has shot up 66.8%. Illumina develops, manufactures and markets integrated systems for the large-scale analysis of genetic variation and biological function. .

The price of Forest Laboratories, Inc. () has seen a 69.1% boost since the first of the year. Forest Laboratories develops, manufactures, and sells both branded and generic forms of ethical products which require a physician’s prescription. .

The price of Green Plains Inc. () is up 72.9% since the first of the year. Green Plains Renewable Energy constructs and operates dry mill, fuel-grade ethanol production facilities. .

Repligen Corporation () has risen 73.2% since the first of the year. Repligen is a biopharmaceutical company that develops therapeutics for radiology and neuropsychiatry. .

Since January 1, the price of Questcor Pharmaceuticals, Inc. () has grown 74.9%. Questcor Pharmaceuticals develops and commercializes novel central nervous system-focused therapeutics that address significant unmet medical needs. .

Since the first of the year, the price of EQT Midstream Partners LP () has swelled 75.4%. EQT Midstream Partners provides natural gas transmission, storage, and gathering services in Pennsylvania and West Virginia. .

Louis Navellier’s proprietary Portfolio Grader stock ranking system assesses roughly 5,000 companies every week based on a number of fundamental and quantitative measures. Stocks are given a letter grade based on their results — with A being “strong buy,” and F being “strong sell.” Explore the tool here.

House Appropriations OKs Smaller SEC Budget Boost Despite Complaints

The House Appropriations Committee approved Wednesday a bill to give the Securities and Exchange Commission $1.4 billion in fiscal 2015 — $50 million more than the agency’s fiscal 2014 enacted level but $300 million less than the amount requested by President Barack Obama.

The SEC budget boost under the FY 2015 Financial Services and General Government Appropriations bill is “targeted specifically toward critical information technology initiatives” for the agency.

Rep. Jose Serrano, D-N.Y., tried to insert an amendment into the bill during the Wednesday markup to give the SEC the Obama administration’s funding request of $350 million, the same amount approved by voice vote by the Senate Subcommittee on Financial and General Government on Tuesday, arguing the agency would be “severely underfunded” at $1.4 billion.

Serrano argued during the markup that if Congress “keeps asking the SEC to do more with less, then we should not be surprised if we experience another financial crisis.”

But Serrano’s amendment was defeated by a 22-28 vote.

Indeed, Rep. Nita Lowey, D-N.Y., argued that not “adequately funding” the SEC could put “mom-and-pop investors and our entire economy at risk.” She went on to note the fact that the SEC only examined 9% of investment advisors last year, and that the number of advisors continues to climb.

SEC Chairwoman Mary Jo White told lawmakers in late April that the SEC’s 2015 budget request of $1.7 billion “would permit the SEC to increase its examination coverage” for advisors. The $1.7 billion budget would allow the agency to add 316 staffers to the agency’s Office of Compliance Inspections and Examinations, with 240 of those examiners devoted solely to overseeing advisors.

But Ander Crenshaw, R-Fla., chairman of the financial services and general government subcommittee, said during the Wednesday markup that “we are not starving the SEC for funds” with a $1.4 billion budget.

“Since 2001, we have increase the SEC’s funding level by more than 200%,” he said. “What did investors get?”

Crenshaw then went on to cite what he considered failures by the commission, such as missing the Bernie Madoff Ponzi scheme, “trouble in producing accurate financial statements,” the agency failing to deal with its “siloed structure,” as well as court cases that have been “thrown out” due to a lack of economic analysis by the agency.

The full Senate Appropriations Committee has yet to schedule a vote on its SEC budget allocation. But Neil Simon, VP of government relations for the Investment Adviser Association, told ThinkAdvisor that the House Appropriations budget will "likely" be the one the SEC gets.

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Check out Advisory Industry Wants More Exams (and Will Pay for Them, Too) on ThinkAdvisor.

U.S. vs. Germany: ‘No Contest,’ says LPL’s Canally

As the United States and Germany prepare to compete in a World Cup match on Thursday in Brazil, some sports commentators are saying that the Europeans – ranked No. 2 at the tournament – may have the advantage over the U.S., ranked 13th.

But off the soccer field, it’s really “no contest,” according to John Canally, economist and investment strategist for LPL Financial (LPLA), in a report shared Wednesday.

Figures in the chart posted here show the Americans have “Germany beat in nearly every key economic and demographic category,” he wrote. Also, the U.S. economy “is poised to outperform Germany in the years ahead thanks to better demographics, better productivity and a more focused central bank.”

“Today the U.S. economy is in far better shape than the German economy: Advantage USA,” Canally explained.

Equal Rivals?

In terms of size of their respective economies, the U.S. economy is over four times as large as that of Germany, measuring $17.1 trillion vs. $3.8 trillion.

Also, the U.S. economy has expanded 50% faster than Germany’s over the past five years.

“German banks’ lending to the private sector has dropped more than 4% over the past year. Meanwhile, the U.S. economy is benefitting from a 4.5% increase in bank lending to the private sector over the past year,” the LPL Financial expert said.

Though U.S. inflation rate is running at 2% vs. 0.6% in Germany, the United States has its own currency and central bank to wrestle with inflation. Germany, of course, shares its currency and central bank “with 17 other soccer-mad European neighbors,” Cannally joked.

Still, Germany’s unemployment rate, 5.2%, is lower than that of the U.S., 6.3%.

However, he notes, an agreement between the German government and German corporations “keeps the unemployment rate artificially low.”

Plus, the U.S. unemployment rate has fallen nearly four percentage points since 2010, while Germany’s has decreased less than three percentage points in recent years.

Soccer Stats

Germany has won three World Cups (1954, 1974 and 1990). It’s also been the runner up four times (1966, 1982, 1986 and 2002).

In contrast, the United States has never won and has reached the semi-finals only once, in 1930.

Canally says that all 23 German players are on club teams in the world’s top five professional soccer leagues (English Premier League, German Bundesliga, Spanish La Liga, Italian Serie A, and French Ligue 1).

Just nine of the 23 U.S. players are part of these leagues.

“One factor to consider is that both teams are coached by Germans. The U.S. coach, Jurgen Klinsmann, played for Germany’s 1990 World Cup winning team and coached Germany’s World Cup team in 2006. Germany’s coach, Joachim Low, never won the World Cup as a player and was Jurgen Klinsmann’s assistant coach in 2006,” the expert noted.

“On balance, while Germany may have the better soccer team, on paper at least, the U.S. economy is in far better shape than the German economy and is poised to outperform Germany in the years ahead thanks to better demographics, better productivity, and a more focused and flexible central bank,” he concluded. “Go USA!” 

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Check out World Cup and World Prices ‘Heating Up’: LPL’s Kleintop on ThinkAdvisor.

Micron Gains On Upbeat Earnings; Elizabeth Arden Shares Slide

Related EDN Utility Sector Rises; Elizabeth Arden Shares Slide Over 3.6% Mid-Morning Market Update: Markets Mostly Higher; Walgreen Profit Misses Estimates

Midway through trading Tuesday, the Dow traded up 0.11 percent to 16,955.76 while the NASDAQ surged 0.66 percent to 4,397.40. The S&P also rose, gaining 0.20 percent to 1,966.53.

Leading and Lagging Sectors

Utilities shares rose around 0.45 percent in trading on Tuesday. Meanwhile, top gainers in the sector included Empresa Distribuidora y Comercializadora Norte S.A. (NYSE: EDN), up 4.7 percent, and Korea Electric Power (NYSE: KEP), up 3.9 percent.

Basic materials sector was the top loser in the US market on Tuesday. Top decliners in the sector included Kraton Performance Polymers (NYSE: KRA), Molycorp (NYSE: MCP), and AuRico Gold (NYSE: AUQ).

Top Headline

Walgreen Co (NYSE: WAG) reported weaker-than-expected fiscal third-quarter earnings.

Walgreen’s quarterly profit increased to $722 million, or $0.75 per share, from a year-earlier profit of $624 million, or $0.65 per share. Its adjusted earnings gained to $0.91 from $0.85 per share.

Its net sales surged 5.9% to $19.40 billion from $18.31 billion. However, analysts were projecting earnings of $0.94 per share on sales of $19.49 billion.

Equities Trading UP

Vertex Pharmaceuticals (NASDAQ: VRTX) shares shot up 42.73 percent to $95.07 after the company reported that its two phase 3 studies of Lumacaftor in combination with ivacaftor met the primary endpoint.

Shares of Wix.com (NASDAQ: WIX) got a boost, shooting up 10.30 percent to $19.60 after the company announced that it had surpassed 50 million registered users worldwide.

Micron Technology (NASDAQ: MU) shares were also up, gaining 5.07 percent to $32.85 after the company reported better-than-expected fiscal third-quarter earnings. Micron posted its adjusted earnings of $0.79 per share, beating analysts’ estimates of $0.69 per share.

Equities Trading DOWN

Shares of Elizabeth Arden (NASDAQ: RDEN) were 4.77 percent to $26.95 on restructuring news. The company announced its plans to reduce jobs and exit some retail doors. It also announced the closing of its Puerto Rico affiliate.

Walgreen Co (NYSE: WAG) shares tumbled 1.84 percent to $72.37 after the company reported weaker-than-expected fiscal third-quarter earnings.

Carnival (NYSE: CCL) was down, falling 1.40 percent to $38.86 after the company reported its Q2 earnings of $0.10 per share and raised its forecast.

Commodities

In commodity news, oil traded up 0.17 percent to $106.35, while gold traded up 0.08 percent to $1,319.50.

Silver traded up 0.46 percent Tuesday to $21.06, while copper rose 0.19 percent to $3.15.

Eurozone

European shares were mostly lower today.

The eurozone’s STOXX 600 declined 0.12 percent, the Spanish Ibex Index dropped 0.05 percent, while Italy’s FTSE MIB Index fell 0.28 percent.

Meanwhile, the German DAX rose 0.20 percent and the French CAC 40 gained 0.06 percent while UK shares slipped 0.10 percent.

Economics

The ICSC–Goldman Sachs store sales index gained 2% in the week ended Saturday versus the earlier week.

The Johnson Redbook retail sales index declined 1.7% in the first weeks of June versus May.

The FHFA house price index remained unchanged in April, versus economists’ expectations for a 0.50% growth.

US home prices increased 1.1% in April versus March, according to S&P/Case-Shiller's composite index. After seasonal adjustments, US home prices gained 0.2% in April. The S&P/Case-Shiller home price index rose to a reading of 168.71 in April, versus a prior reading of 166.80. However, economists were expecting a reading of 169.09.

Sales of new US homes rose at an annual rate of 504,000 in May, versus economists’ expectations for a 439,000 gain.

The Conference Board's consumer confidence index rose to 85.20 in June, versus a previous reading of 83.00. However, economists were expecting a reading of 83.50.

The Richmond Fed manufacturing index fell to 3.00 in June, versus a prior reading of 7.00. However, economists were expecting a reading of 7.00.

Posted-In: Earnings News Emerging Markets Eurozone Futures Economics Intraday Update Markets Movers

© 2014 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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Are U.S. Stock Markets Rigged? Author Says, 'Yes'

Richard Drew/AP NEW YORK -- The U.S. stock market is rigged in favor of high-speed electronic trading firms, which use their advantages to extract billions from investors, according to Michael Lewis, author of a new book on the topic, "Flash Boys: A Wall Street Revolt." High-frequency trading is a practice carried out by many banks and proprietary trading firms using sophisticated computer programs to send gobs of orders into the market, executing a small portion of them when opportunities arise to capitalize on price imbalances, or to make markets. HFT makes up more than half of all U.S. trading volume. The trading methods and technology that make HFT possible are all legal, and the stock exchanges HFT firms trade on are highly regulated. But Lewis said these firms are using their speed advantage to profit at the expense of other market participants to the tune of tens of billions of dollars. "They are able to identify your desire to buy shares in Microsoft (MSFT) and buy them in front of you and sell them back to you at a higher price," Lewis, whose book is available Monday, said Sunday on the "60 Minutes" television program. "This speed advantage that the faster traders have is milliseconds, some of it is fractions of milliseconds," said Lewis, whose books include "The Big Short" and "Moneyball." Those milliseconds can be valuable, making it possible to send around 10,000 orders in the blink of an eye. Darting in and out of trades, HFT firms make just fractions of a penny per trade, but the sheer speed and volume of their trading activity allows those that are successful to make significant profits. Proponents of HFT argue that the presence of such firms makes it easier for all market participants to find buyers and sellers for their trades, and that the speed at which HFT firms can detect and take advantage of pricing imbalances between different markets and assets leads to smaller bid-ask spreads. But Brad Katsuyama, former head trader in New York for the Royal Bank of Canada and a major figure in Lewis's book, said he was finding that when he would send a large stock order to the market, it would only be partially filled, and then he would have to pay a higher price for the rest of the order. With the help of new hire Ronan Ryan, Katsuyama realized that his orders traveled along fiber optic lines and hit the closest exchange first, where high frequency traders would get a glimpse, and then use their speed advantage to beat him to the other 12 U.S. public exchanges and 45 private trading venues. HFT algorithms could then buy the shares Katsuyama wanted, and then sell them to him at a slightly higher price. Katsuyama and Ryan created a system in which RBC would send its orders first to the exchange that was the furthest away, and last to the exchange that was closest, with the goal of arriving at all places nearly simultaneously, cutting out HFT. "Essentially, our fill rates went to 100 percent. We couldn't believe it when we actually figured it out," Katsuyama told "60 Minutes." Katsuyama said he decided to start a new trading platform, called IEX, for the Investors' Exchange, employing similar tactics to those he used at RBC. "It almost felt like a sense of obligation to say we found a problem that is affecting millions and millions of people -- people are blindly losing money they didn't even know they were entitled to. It's a hole in the bottom of the bucket," he said. IEX has attracted the investment of David Einhorn, the billionaire owner of hedge fund Greenlight Capital, and an endorsement from Goldman Sachs (GS). The investors in IEX are fund companies and individuals, not banks. "We are selling trust, we are selling transparency, and to think that trust is actually a differentiator in a service business, is actually a crazy thought, right?" said Katsuyama. Earlier this month, New York state's Attorney General Eric Schneiderman said he believes U.S. stock exchanges and other platforms provide HFT firms with unfair advantages. Exchanges allow trading firms to place computer servers inside the exchange's data centers so that the firms can see the data as soon as possible. The practice, called co-location, is regulated and available to anyone who wants to pay for it. Schneiderman has begun meeting with the U.S. exchanges, which include IntercontinentalExchange Group's (ICE) New York Stock Exchange, Nasdaq OMX Group's (NDAQ) main bourse, and four platforms run by BATS Global Markets, on possible reforms, a source close to the situation told Reuters. A ban on HFT is unlikely, as U.S. regulators would be loath to put policies in place that could lead to a less liquid market, Robert Greifeld, chief executive officer of Nasdaq, said Thursday.

Expedia Inc. (EXPE): Itinerary - $90 says Susquehanna (but maybe more)

Expedia Inc. (NASDAQ:EXPE) shares are travelling higher today, up more than $2.50 as we type, The 3.5% move up comes compliments of an upgrade from Susquehanna. The broker says the stock now gets a "Positive" rating versus yesterday's "Neutral" recommendation.

Analyst, Brian Nowak put a $90 price-target on EXPE along with his upgrade – potential upside to target of 16.69% as of this keystroke, not including the 0.8% dividend.

Expedia operates as an online travel company in the United States and internationally. It provides travel products and services to leisure and corporate travelers, offline retail travel agents, and travel service providers through a portfolio of brands, including Expedia.com, Hotels.com, Hotwire.com, Expedia Affiliate Network, Classic Vacations, Expedia Local Expert, Egencia, Expedia CruiseShipCenters, eLong, and Venere.com.

[Related -Expedia, Inc. (EXPE) Q1 Earnings Preview: Double Beats Have Been Doubly Positive for EXPE]

Nowak believes the company's prospects are discounted by his peers on the street. He pronounced, "Our updated breakdown of EXPE's 3 main businesses (Travelocity, Trivago, and "core") shows how Street EPS numbers are 3% and 4% too low in '14 and '15 even using conservative assumptions."

To get to $90, the analysts wrote, "We raise our target multiple to a 25% premium based on faster EPS growth (19% the next 3 years) and see upward revisions, execution, and faster growth driving outperformance."

[Related -Tumi Holdings (TUMI): This Luxury Stock Has 3 Powerful Tailwinds]

It's clear; Nowak's upgrade and price-target are earnings based calls.

As it is now, Wall Street has consensus EPS estimates of $3.84 and $4.47 for 2014 and 2015, respectively. Minimally, Nowak believes the numbers will be closer to $3.96 this year and $4.60 next year, which is year-over-year growth of 16.16%.

To hit $90 based on the updated, minimum earnings, according to Susquehanna would require investors to pay 19.57 times earnings-per-share (EPS). In the last half-decade, Expedia's average price-to-earnings ratio (P/E) was 22.19 with a range of 6.29 to 68.49. During the same timeframe, EXPE earnings contracted by an average annual rate of -5.71%. That means investors have been willing to pay up for the internet service provider.

A 25% premium to earnings growth as Nowak suggests, would translate into a P/E of 20.2 using our updated, hypothetical EPS; providing some upside to the $90 target at $92.92.

Overall: If Brian Nowak has made the correct call on the street under-projecting Expedia Inc. (NASDAQ:EXPE) earnings power, then $90 should be achievable based on EXPE's recent P/E history. 

Home price gains continue to slow

Home prices rose more slowly in January, extending a trend of moderating gains.

The Standard & Poor's/Case-Shiller 20-city Index rose 13.2% from a year ago, 0.1% less than December's year-over-year change. The pace of annual gains has slowed for three straight months and January's increase was below the 13.4% for all of 2013.

All 20 cities showed higher prices than in January 2013.

But compared with December, prices fell in 12. The decliners were led by Chicago, which was down 1.2%.

"The housing recovery may have taken a breather due to the cold weather," said David Blitzer, chairman of the Index Committee at S&P Dow Jones Indices.

The cities with the five highest monthly gains were all in the Sun Belt. Las Vegas, up 1.1%, was tops among gainers.The other four were Miami, up 0.7%; San Diego, 0.6%; San Francisco, 0.5%; and Tampa, 0.1%.

Among other cities in the 20-city index, New York and Washington D.C. saw their highest year-over-year returns since 2006 — 6.7% and 9.2%, respectively. Dallas and Denver were the only cities attaining new record peaks while Detroit remains the only city with home prices lower than 14 years ago.

Economists say slower price gains is a sign of the housing market's stabilization after a period of outsized price increases earlier in its recovery from the financial crisis. Since prices bottomed in 2012, they now are up 23% and the market shows signs it is advancing with "more normal price increases," Blitzer said.

Will the Next WWE Battle Be a Fight Among Would-be Buyers?

Ethan Miller/Getty ImagesWorld Wrestling Entertainment Chairman Vince McMahon

To spark a bidding contest for World Wrestling Entertainment Inc. (WWE), all Vince McMahon needs to do is wave a "for sale" sign. McMahon, 68, controls the voting power of the $2.3 billion company that's been entertaining spectators with staged fights for decades. The stock is at a record after WWE launched its own subscription streaming network and became the subject of takeover speculation. Should McMahon ever decide he's ready to sell, companies from Comcast Corp. (CMCSA) to Madison Square Garden Co. (MSG) may line up with offers, Albert Fried & Co. and National Alliance Capital Markets said. "What is McMahon's succession plan and who will he pass the keys of the kingdom to?" Robert Routh, an analyst at National Alliance, said in a phone interview. "WWE would be very attractive to many different types of buyers. What they've built can't be recreated. But without McMahon's blessing, it doesn't matter how much somebody is willing to pay for the company." The franchise that thrust Hulk Hogan and The Rock into stardom owns the television shows "Raw" and "Smackdown," which have a dedicated following and command high cable-TV ratings, Vertical Group said. The company, which is hosting its annual WrestleMania event in three weeks, will post its best revenue and profit growth in more than a decade next year, according to analysts' estimates compiled by Bloomberg. Stock Surge The stock has climbed 35 percent this month, in part because of takeover speculation, to close at $30.94 last week. WWE isn't in merger talks, Chief Financial Officer George Barrios said in an interview March 6. A representative for the Stamford, Connecticut-based company, declined to comment last week beyond Barrios' earlier statement. WWE's programs, which air on Comcast's USA and SyFy cable networks, may find a new home by the end of April, Barrios said. He said the company is in discussions on future domestic TV distribution with "multiple parties." It has held distribution talks with companies such as AMC Networks Inc. (AMCX), though a renewal with Comcast's NBCUniversal is also possible, people with knowledge of the situation said. McMahon controls WWE through Class B shares that have added voting rights. His daughter Stephanie McMahon Levesque is the company's chief brand officer, and her husband, pro-wrestler Paul "Triple H" Levesque, is executive vice president for talent and live events. McMahon's wife Linda McMahon helped found the company and has since mounted failed bids to win a U.S. Senate seat in Connecticut. Their son Shane McMahon is chairman of publicly traded You On Demand Holdings Inc., which streams movies in China. 'Strong Numbers' Men account for two-thirds of WWE's audience, which consistently tops 4 million viewers on Monday nights on USA, according to Nielsen data compiled by Horizon Media Inc. In the week ended March 9, WWE's "Raw" was the third most-watched cable show, trailing only "The Walking Dead" and "Duck Dynasty," the data show. "These are pretty strong numbers for cable," Brad Adgate, director of research at Horizon Media, said in a phone interview. For advertisers, "it's a great target for young males." WWE's library of characters, story lines and hours of footage can't be easily replicated, which is why it could lure buyers, said Routh of National Alliance. To persuade McMahon to sell his wrestling empire, any deal would probably have to be structured similar to Walt Disney Co. (DIS) and Pixar's relationship, in which the computer-animation studio operates independently even though it's owned by Disney, he said. Disney acquired Pixar in 2006. Partnership Opportunity "That type of situation would probably be the most likely one as far as the McMahons being able to be comfortable" with selling the company, Kim Opiatowski, a New York-based event-driven analyst at Vertical Group, said in a phone interview. "It's a question of a loss of control of the company. It'd be tough to take it out of the family's hands unless they felt there was something so compelling or such a good strategic partnership opportunity." Comcast is a "natural acquirer" for WWE because it already airs the wrestling shows and Chief Executive Officer Brian Roberts isn't afraid to manage more than one type of media asset, said Richard Tullo, New York-based director of research at Albert Fried. Comcast owns cable and broadcast TV networks, the Xfinity cable service, the Universal Pictures movie studio and theme parks. A representative for Comcast said the $132 billion company doesn't comment on speculation. Toys, Games In addition to WWE's TV shows, any buyer would have to manage its wrestler-themed products such as video games and toys as well as its more than 300 annual live events. Sports and live events are Madison Square Garden's specialty, which makes it a logical suitor, Tullo said in a phone interview. MSG owns the New York Knicks basketball team and the New York Rangers hockey team, as well as the Manhattan arena they play in. The company is looking to sell its Fuse music TV channel, which people with knowledge of the situation said has so far drawn bids from both Jennifer Lopez and her former beau Sean "Diddy" Combs. "MSG can manage WWE because they know the ropes," Tullo said. "MSG owns sports teams, they own arenas, they have the WWE in their venues. It would just need a couple of chips to fall into place first, such as selling Fuse." Live Nation Closely held Anschutz Entertainment Group, the owner of the Staples Center in Los Angeles, and Live Nation Entertainment Inc. (LYV), the world's largest concert promoter, also have the ability to operate WWE's assets, Tullo said. Representatives for MSG, Live Nation and Anschutz declined to comment on the companies' interest in acquiring WWE. Disney, with its expertise in managing and marketing characters across platforms from the big screen to consumer products, is another possible suitor, Routh of National Alliance said. The backing of Disney, a $140 billion entertainment conglomerate, would increase WWE's value, he said. "You can't look at what WWE is worth today," Routh said. "It's about what it's worth in the hands of Disney, with all of their muscle behind it." A representative for Burbank, California-based Disney didn't return messages seeking comment. Disney's cash and equivalents of $4.4 billion is almost double the size of WWE's market value, data compiled by Bloomberg show. Comcast's cash stockpile is even larger at $5.3 billion, the data show. "If you were Disney or Comcast looking at the numbers and what you could do with WWE, you could probably justify paying a decent price and it's still petty cash to you," Routh said. "The question is, what's the asking price, if there even is one. Only Vince McMahon knows." To contact the reporter on this story: Tara Lachapelle in New York at tlachapelle@bloomberg.net

Review: Amazon Phone Watches You Watch It

Ted S. Warren/APAmazon's "Mayday" customer service app, which provides a direct link to live tech support, is shown on the new Fire Phone. SEATTLE -- Amazon set out to do something different with the unveiling of its first smartphone Wednesday. How about a completely new way of interacting with your phone, for starters? As part of the showcase of its brand new "Fire Phone," Amazon.com (AMZN) took the wraps off a feature it calls "dynamic perspective." Turns out, it's more than just a gimmick that allows you to see in 3-D. The feature makes use of four infrared cameras pointed at your face that help judge whether you're looking at the screen straight-on, at an angle and how close you are to the screen. The phone can then adjust the image accordingly. That gives you the ability to see depth in images, to see around objects in the foreground, to zoom in for a better look, and to toggle through websites, books and menus and even to play games by tilting the phone back and forth and up and down while you look at it. Another feature called "Firefly" brings what's known as augmented reality to life in a new way, by turning your phone into a powerful tool that recognizes book covers, CDs, DVDs, songs, movies, grocery items, phone numbers and websites and pulls them into the phone so you can take action. For Amazon, the major benefit of this is that it takes price comparison shopping to a new level, because any item you see while walking down the aisle of a Walmart (WMT) or Target (TGT) can get an instant price check. Amazon says the phone can recognize more than a hundred million items. And if you link your credit card information to the service, you can make a purchase with a couple taps. But more than that, by releasing these tools to developers, Amazon has made what could be a major contribution to what a smartphone can do. With about a half hour to try out these features and have them explained in depth, I was both impressed and saw some flaws. The 3-D effect is quite stunning. Just imagine looking down a long hallway and putting your ear against each wall one after the other. Your perspective changes and straight lines will seem to disappear to a different point. To demonstrate the effect on the phone, Amazon made available a bunch of lock-screen images, like the cartoon ruins of a pyramid, some hot-air balloons and a jungle setting. Swiveling the phone around makes it seem like the images had a depth of an inch or two, allowing you to look around and beyond objects in the foreground. It's a neat party trick but the tool has other uses. Amazon demonstrated an early version of how the feature is used in an app by the real estate website Zillow (Z), for example. After zooming in on an interior photo, the app then allows you to change your perspective of what you're looking at inside the room. Sure, it was a bit grainy, and the image wasn't rendered in 3-D, but it showed the promise of what's possible. Games also made use of the tool. One game allowed you to control whether the figure flew up or down based on essentially nodding your head or making the phone lie flat or upright. Another game, called Tofu Fury, allows you to get a 3-D perspective on the game level. It still essentially plays like Angry Birds, but it did something I've never seen before in a game. One other neat thing: it does all this in relation to your face. So you could do this lying in bed or hanging upside down. I tried it out, taking a deep bow. The aforementioned game flew just the same depending on where the phone was to my face. Where the feature needs work, I felt, was in its ability to control menus and scroll through text. Quick side swivels brought up hidden menus on certain screens. Like on the music screen, a quick swivel to the left brought up a panel from the right side that showed song lyrics. A quick swivel while in the second-screen TV watching app, X-Ray, toggled between character photos when they were in costume and in street clothes. In the maps app, a quick swivel brought up local Yelp listings for restaurants. When on a website, tilting the phone away from you makes the words scroll up. Tilt it more, and they move even faster. In a way, these operational functions made me feel uneasy because I don't want to necessarily keep my head still while using my phone all the time, or set off unintended actions. And these things were definitely possible. While looking at a product image on the Amazon store app of a bottled product that was identified using Firefly, the image erratically jumped between big and small. I just wanted it to stop. Packed With Features This phone has other features, and basically it's very nicely built. It has a solid heft in the hand while not being heavy at all. The buttons, which can activate the camera or Firefly from a cold start, are minimalist and comfortable. The 4.7-inch screen with a 16:9 aspect ratio is just right for holding and controlling with one hand. There are speakers on top and bottom for stereo sound when holding the phone sideways. And it is packed with many of the features that Kindle Fire tablet users are familiar with, such as its Mayday live-help function. It is a tool for reaping all of the benefits of a $99-a-year Amazon Prime membership, from video watching to music listening to book reading. And you get one year of Prime for free. Yet it's the dynamic perspective feature that, in my view, changes smartphones forever. It's one that others may try to copy, and I think it opens up a world of possibilities for app developers. Before the event, Amazon CEO Jeff Bezos sent all attendees a copy of his favorite children's book, "Mr. Pine's Purple House." The moral of the story is that it's good to be different sometimes. In an interview with The Associated Press after the event, Bezos responded to several questions surrounding Amazon's late entry into smartphones and the dominance of existing players like Apple (AAPL) and Samsung. Bezos rebutted: "Taken to its logical extension, you could never have new entrants in anything," and laughed with his signature guffaw.

Tax Breaks for Generous Grandparents

I want to contribute to a 529 account for my 4-month-old granddaughter. Can I get a tax deduction, or is that just for the parents?

See Also: What Grandparents Should Know About Opening 529 Accounts

Yes, grandparents can claim the deduction for contributing to a 529 if they live in one of the 34 states that offer a state income tax deduction for 529 college-savings plan contributions. The only question is whether you must own the account or whether you can contribute to one set up by, say, the child's parents.

About two-thirds of the states that offer a state income tax deduction for 529 college-savings plan contributions let anyone who is a resident of that state take a deduction, even if you don't own the account -- whether you're a parent, relative or friend. The remaining states let you deduct contributions only if you're the account owner. In that case, you might want to open an account for your granddaughter so that you can qualify for the deduction, even if her parents already have an account for her. There's no limit to the number of 529 accounts that can be opened for one beneficiary. (To check up on your state's rules, see Savingforcollege.com.)

In Utah and Virginia, the owner of a 529 account can also deduct the contributions other people make to the account. For example, in Virginia, account owners can deduct up to $4,000 in contributions per account each year, with unlimited carryover of excess contributions, no matter who makes the contributions. And if you're 70 or older, you can deduct the entire amount contributed to the Virginia 529 you own in one year.

Most of the 34 states that offer the tax break let you take a deduction only if you contribute to your own state's 529. However, five states -- Arizona, Kansas, Maine, Missouri and Pennsylvania -- give you the break for contributing to any state's account.

Be careful with withdrawals from a 529 for your granddaughter when she is in college, because they are counted as income in the financial aid calculations. See Limit the Impact of Grandparent-Owned 529 Plans on Financial Aid for details.

For more information, see 529 Plan FAQs.

Got a question? Ask Kim at askkim@kiplinger.com.

FDA to overhaul over-the-counter regulations

WASHINGTON (AP) - The Food and Drug Administration is seeking to revamp its system for regulating hundreds of over-the-counter drugs, saying the decades-old process is not flexible enough to keep pace with modern medical developments.

In a federal posting Friday, the agency announced a two-day meeting next month to discuss overhauling the system known as the over-the-counter monograph.

The system was put in place in 1972 as a way to set dosing, labeling and other standards for hundreds of nonprescription drug ingredients, everything from aspirin to anti-bacterial hand scrubs.

But regulators acknowledged that the process has proven extremely time-consuming, requiring multiple rounds of scientific review, public hearings and comments before a final monograph can be published. As a result, many common pain relievers and cough medicines are still technically under review.

In its announcement, FDA regulators detail the numerous flaws of the current cumbersome system, including the inability to quickly add warning labels about emerging safety risks.

"This process for changing a monograph is not well-adapted to address new safety issues with the speed and agility that are necessary to serve the public health," states the FDA announcement.

The monograph process was originally set in place by Congress in 1972 as a way for the FDA to review hundreds of nonprescription drugs that predated modern drug safety regulations. Initially a panel of FDA experts went through the entire list of medications and determined whether they were "generally recognized as safe." These findings were published as "tentative" rules for various drug classes, though many have never moved beyond that phase.

The decade-spanning review process has increasingly come under fire from scientists, consumer groups and members of Congress.

Last year the FDA said for the first time that there was no evidence that common anti-bacterial soap cleansers, including triclosan, were more effective than regular! soap. The agency issued that statement only after a three-year court battle with the Natural Resources Defense Council, an environmental group that sued the FDA to jumpstart its stalled review of the cleansers, which had been in regulatory limbo since 1978.

The FDA said Thursday it wants to design a new system that will "allow for innovative changes to drug products" and "provide FDA with the ability to respond promptly to emerging safety or effectiveness concerns."

But the leading industry group for nonprescription drugmakers says it supports the current monograph system.

"The system ensures consumers have access to a wide variety of safe and effective medicines, while at the same time providing FDA with access to important information on safety and quality," said Elizabeth Funderburk, spokeswoman for the Consumer Healthcare Products Association." We welcome the opportunity to provide input to FDA and hope they will use the input received to improve the rule making process to enable innovation and to update labeling in a timely manner."

The group represents companies like Johnson & Johnson, Bayer, Procter & Gamble and many others.

Twitter Inc. (TWTR): 3T Analysis - #TimeToBuy?

Twitter Inc. (NYSE:TWTR) got cracked following earnings that disappointed Wall Street last quarter, but the earnings driven freefall was just a continuation of the stock slide after posting an all-time high of $74.73 in December 2013.

For the last month or so, the price has flattened out while trading between $30 and $34ish; a mini-consolidation phase, but there's been something different of late. As you can see on the chart below, bargain buyers have started to accumulate TWTR as illustrated by the large green bars.

The recent spate of buying pushed the stock out of the consolidation phase and turned the 12-day average's trend higher, putting it on a path to bypass the 26-day mark. We've seen this look thousands of times, and it usually leads the stock to its 50-day benchmark.

[Related -Twitter Inc (TWTR) Q1 Earnings Preview: It's As Easy As 1-2-3 Metrics]

The 50-day is a tough barrier to break, but $40 appears to be a more natural point of resistance. The odds favor Twitter printing $40 sooner than later, in our opinion. From there, $45 would be the completion of a triangle pattern. Forty-five bucks is a high probability if investors bid TWTR past $41, again, just our opinion.

On chart two, you can see the 140-character social site's trading range has narrowed considerably since the start of June. From our experience, stocks tend to make substantial moves following a tight trading range. The spoils will belong to whichever side of the channel breaks first.

[Related -Tech Stocks Pull Back: What to do? Nothing.]

As it is today, Twitter closed near the high achieved on TWTR's earnings-driven gap down day – May 6, 2014. The day before, the stock closed at $38.75 and then $31.85 on the 6th with a high of $36.10.

If/when Twitter closes above $36.10, then it should begin the process of closing the gap-down, which would place stock in the neighborhood of the 50-day average; confirming our analysis up-top.

Momentum, as defined by Rate-of-Change is building for Twitter; however, the five-day and 15-day ROC readings are bumping into resistance. But that's OK because the trends for all three levels on the chart below are trending in the right direction for bulls.

Longer-term, the 25-day ROC shows TWTR's upswing should have some staying power. A rough day or two should be greeted by more green bars as bulls buy the dips.

Overall: Twitter Inc.'s (NYSE:TWTR) charts suggest shares could touch $40 – maybe more – in the not too distant future. Of course, TWTR will need some help from the overall market. If the indexes go into correction mode, then it would make the task more difficult, but still more likely than not, in our opinion. 

4 U.S. Stocks Getting Boosted by the Eurozone Stimulus

Popular Posts: RadioShack Is Beginning to Flirt With the Delisting LineA 99% Dividend Yield? Yes, It Really IS Too Good to Be TrueBuy Honeywell for a Stealth Play on Smart Homes Recent Posts: Invest in Belize: Retirement Paradise or Real Estate Scam? 4 U.S. Stocks Getting Boosted by the Eurozone Stimulus Buy Honeywell for a Stealth Play on Smart Homes View All Posts 4 U.S. Stocks Getting Boosted by the Eurozone Stimulus

Europe is opening the easy-money spigot — the European Central Bank announced last week that it was putting together plans for a quantitative easing program — and that is fantastic news for high-yielding American dividend-paying stocks and REITs.

That may not make sense at first glance, but hear me out. Capital markets are global, and liquidity sloshes across borders almost instantly. We certainly saw this last year when the Fed's initial comments about tapering caused a severe correction in U.S. bonds and "bond-like" income investments as well as emerging-market stocks, bonds and currencies.

Most of these asset classes, both in the U.S. and in emerging markets, have enjoyed a rally in the first half of 2014 as investors have come to realize that, even with Fed tapering going ahead at full steam, there remains a remarkable amount of liquidity chasing after a finite supply of income-yielding assets.

As ECB President Mario Draghi takes the stimulus torch from Fed Chairman Janet Yellen, record-low eurozone yields will make U.S. Treasuries look appealing by comparison, which will in turn keep continued pressure on U.S. yields.

Have trouble following all of that? Let me sum it up like this: A new round of eurozone stimulus promises to make U.S. income investments attractive. And today, I'm going to offer four solid American income stocks that should do very well in a low-yielding world.

Annaly Capital Management (NLY)

I'll start with mortgage REIT Annaly Capital Management (NLY), which, despite its strong performance in 2014, is still down by about 16% over the past 12 months.

Mortgage REITs were in a class of their own, taking a post-taper beating. Annaly lost about 40% of its market share between May and December of last year. The reason? Mortgage REITs are highly leveraged, and the market feared that rising yields would take a bite out of net asset values, which could in turn force the REITs to liquidate their holdings at unfavorable prices.

It’s a valid concern. But most of the sector now trades at a discount to NAV, and Annaly trades for just 94% of book value. Buying a dollar's worth of assets for 94 cents gives you a decent margin of safety.

And it would appear that I’m not the only person who sees value in Annaly at current prices. Company insiders bought aggressively throughout last year's decline, with several making purchases at prices significantly higher than today's.

Annaly currently yields about 10.4%, and I highly expect total returns of 20-30% over the next 12 months.

American Realty Capital (ARCP)

Next on the list is triple-net retail REIT American Capital Realty Properties (ARCP), which — uniquely among its industry peers — is trading near 52-week lows.

What gives? Why the recent underperformance? Two words: "Red" and "Lobster."

ARCP's recent $1.5 billion acquisition of Red Lobster real estate assets did not go over well with investors. For a stock with a $9 billion market cap, the Red Lobster purchase represents a large investment in a tenant of, shall we say … questionable quality.  Investors have also been agitating for CEO Nick Schorsch to slow down his breakneck speed of acquisitions and focus on stabilizing what he has. ARCP emerged from virtually nowhere to become the largest triple-net retail REIT in the world in less than three years.

I take a balanced view here. Sure, the Red Lobster acquisition adds a fair amount of risk. Red Lobster will account for about 7.3% of ARCP's assets and 10% of its revenues. Some percentage of these restaurants may close, potentially leaving ARCP tenantless for some period of time. But how many and when? Let's say things get bad and 25% of the restaurants close five years from now. That would be just 2.5% of today's revenues, not taking into account any new property acquisitions between now and then. So there’s no reason to panic at the moment.

ARCP trades at book value and pays 8.3% in dividends. At this price ARCP is too cheap to ignore, and as investors scramble for high-yielding assets, I'm betting the Red Lobster deal is forgotten in a hurry.

Realty Income (O)

Next is one of ARCP's chief competitors, the “Monthly Dividend Company,” Realty Income (O).

Realty Income paid its first dividend in 1970, before it was publicly traded, and hasn't slowed down since. It has paid 526 consecutive monthly dividends and raised its dividend 75 times — and in 66 consecutive quarters.

Since 1994, when Realty Income started trading on the NYSE, the REIT's annualized dividend has risen from 90 cents per share to $2.19 per share. At its current price, that amounts to a dividend yield of 5%.

Realty Income is one of those rare stocks that I believe you can truly buy, put in a drawer, and forget about for years at a time. As a conservative, triple-net REIT, It's what I would call an "Armageddon-proof" investment. It owns a diversified portfolio of 3,800 properties spread across 49 states that are rented under long-term leases, primarily to high-quality tenants. The "typical" property for Realty Income would be your local Walgreens or CVS pharmacy — a high-traffic, highly visible location that you pass on your daily commute.

Under a triple-net lease, it is the tenants responsibility to take care of the property and to pay the taxes and expenses. The landlord's only role is to collect the rent check. Not bad work, if you can find it.

In a global scramble for yield, a bond-like solid performer like Realty Income should perform well.

DoubleLine Opportunistic Credit Fund (DBL)

My final recommendation is not a stock but rather a bond fund managed by one of the best minds in the business, DoubleLine Capital's Jeff Gundlach: the DoubleLine Opportunistic Credit Fund (DBL).

Gundlach made a splash last month by suggesting that U.S. Treasuries were on the verge of "one of the biggest short-covering scrambles of all time."  And it appeared that he was correct, as bond yields quickly dipped after he made his comment, though they have since recovered.

We may or may not see the short squeeze Gundlach envisions. But I do believe that, at a minimum, we will continue to see long-term yields near their historic lows. That bodes well for DBL, which yields 8.3% at current prices.

DBL is very much a bet on Gundlach himself, as the fund has a very open mandate: It may invest in "income-producing securities of any kind."

I'm OK with that. Gundlach is one of the sharpest bond managers in the game, and he's been very prescient over the past several years of volatile swings.

Like what you see? Sign up for our Dividend Insights e-letter and get income investment advice delivered to your inbox every Friday!

Charles Lewis Sizemore, CFA, is the editor of Macro Trend Investor and chief investment officer of the investment firm Sizemore Capital Management. As of this writing, he was long O and ARCP. Click here to receive his FREE weekly e-letter covering top market insights, trends, and the best stocks and ETFs to profit from today's best global value plays.

Emerging markets bloodbath highlights up-and-comer ETFs

Bloomberg News

Nearly $20 billion has flowed out of emerging-market exchange-traded funds in the last 13 months ($10 billion in just the past six weeks). But a handful of ETFs focused on these volatile markets have taken in about $6.5 billion.

These ETFs avoided outflows in large part because they weren't favorites of the “hot money” jumping in and out of markets in search of short-term returns. ETF giants iShares MSCI Emerging Markets (EEM; $30.8 billion) and Vanguard FTSE Emerging Markets (VWO; $40 billion) provided two favorite ways for speculative investors to place bets; those funds account for over 80% of the money leaving the sector. The smaller emerging-market ETFs that gained assets did so because they're attractive to long-term investors looking for innovative ways to get exposure to developing markets.

That's not to say these ETFs aren't risky — just about all emerging-market investing is.

Here’s a look at five up-and-comers, in order of inflows:

1. iShares Core MSCI Emerging Market

FactSet Research Systems Inc. Posts Higher Q3 Results; Meets EPS Views (FDS)

Before the opening bell on Tuesday morning, Factset Research Systems (FDS) reported its third quarter results, posting gains in earnings and revenue over last year’s Q3.

FDS’s Earnings in Brief

Factset reported third quarter revenues of $231.76 million, which are up 8% from last year’s Q3 revenues of $214.61 million. The company’s adjusted net income was up 6% to $53.1 million from $50.1 million reported last year. Adjusted EPS for the quarter came in at $1.25, marking an 11% improvement over last year’s Q3 EPS of $1.13. Factset’s EPS met analysts’ estimates, while revenues were slightly above expectations of $230.57 million. Looking ahead to next quarter, FDS sees EPS in the range of $1.30-$1.32 on revenue in the range of $235 million to $240 million. Analysts are looking for EPS of $1.29 on revenues of $235.6 million.

CEO Commentary

FDS chairman and CEO Philip Hadley had the following comments: “I’m pleased to see that our ASV growth rate accelerated to 7% and adjusted EPS grew by 11% in the just completed third quarter. We continued to capitalize on our opportunities as evidenced by adding 30 net new clients and 620 net new users in the past three months. I’m also excited to announce that Phil Snow has accepted the role as President, effective July 1st.”

FDS’s Dividend

Factset Research Systems recently raised its dividend by 11% to 39 cents from 35 cents per quarter. The company’s next dividend is payable today to all shareholders of record on May 30.

Stock Performance

FDS stock was inactive in pre-market trading. YTD, the stock is up 4.18%.

FDS Dividend Snapshot

As of Market Close on June 16, 2014

Click here to see the complete history of FDS dividends.

NASAA’s Fleming Named SEC’s First Investor Advocate

Rick Fleming, deputy general counsel for the North American Securities Administrators Association, was named Wednesday as the Securities and Exchange Commission’s new investor advocate.

Fleming, who will assume his new role on Feb. 24, becomes the first person to lead the SEC’s Office of the Investor Advocate, which was created by Dodd-Frank and requires that the Investor Advocate report to the chairwoman.

While Dodd-Frank required appointment of an investor advocate, an SEC spokesman declined to comment on the length of time it took the agency to appoint one, stating that "the functions" of an investor advocate over the past three years "have been carried out in the interim by our Office of Investor Education and Advocacy."

Fleming will also serve as a member of the SEC’s Investor Advisory Committee.

“I am very pleased that Rick will be joining the commission as its inaugural director of our Office of the Investor Advocate,” said Mary Jo White, SEC chairwoman, in a statement. “Rick brings a depth of experience advocating for the interests of investors, a keen understanding of the markets, and a true passion for investor protection.”

Andrea Seidt, NASAA president and Ohio securities commissioner, added in a separate statement that the advocate office “will serve a critical role in ensuring that the SEC focuses on the needs of ordinary investors."  For nearly two decades, she said, "Rick has fought directly on the front lines for investors at the state and national level. Through his work with the Office of the Kansas Securities Commissioner and more recently at NASAA, Rick has demonstrated an unparalleled passion for investor advocacy and commitment to investor protection.”

As mandated by Section 915 of Dodd-Frank, the investor advocate helps retail investors resolve significant problems with the SEC or with self-regulatory organizations; identifies areas in which investors would benefit from changes in the SEC regulations or the rules of SROs; analyzes the potential impact on investors of proposed SEC and SRO rules and regulations; and to the extent practicable, propose changes in the regulations or orders of the commission and to congress any legislative, administrative or personnel changes that may be appropriate to mitigate problems and to promote the interests of investors.

Prior to joining NASAA in 2011, Fleming was general counsel for the Office of the Kansas Securities Commissioner. A native of Kansas, Fleming graduated summa cum laude from Washburn University with a bachelor’s degree in finance and economics, and is a graduate of Wake Forest School of Law in Winston-Salem, N.C.

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Check out More Advisor Exams? Not Under This SEC Budget, Advocates Say on ThinkAdvisor.

There is life in the old bond dog yet

The popular investment narrative of market pundits for 2014 was to be overweight equities. Thus far, things have not gone according to plan. In fact, bonds have actually done better than stocks since the start of the year. This was supposed to be a bad time for bonds, but you would be hard-pressed to find any signs of a panic trade. It may be early days, but if this persists, we may be looking at the great “unrotation” rather than the “great rotation” that so many speculators had predicted.

There are a few reasons for this, some of them basic. One is that investors need bonds to anchor their portfolio. People own bonds because they provide an income.

Remember the critical difference between a dbond and a stock. With a bond, you are lending money and the company has an obligation to repay you. With a stock, you are buying a share of future profits. The latter is a much riskier bet.

So this need for income is one part of the bond story. The other part is diversification. If equities come under pressure, you naturally should expect government bonds to do better by comparison. A balanced portfolio means you're never left in a circumstance where all of your assets are going in the same direction at once.

Bond investors essentially have two enemies: one is rising interest rates, the other is inflation. Watching over your shoulder for those enemies should be on the checklist of anyone in receipt of a fixed income.

So how does the dashboard look? The potential for rising interest rates is, of course, inevitable, but we think any action is later rather than soon. Thankfully, the U.S. economy is growing at a stronger rate than it has in the years since the financial crisis, but gros

Private Employers Add 175,000 Jobs in January

LM Otero/AP U.S. private employers added 175,000 jobs in January, the smallest gain since August as wintry weather kept a lid on hiring, a report by a payrolls processor showed Wednesday. Economists surveyed by Reuters had forecast the ADP National Employment Report would show a gain of 180,000 jobs, with estimates ranging from a low of 125,000 to a high of 210,000. December's increase in jobs was revised down to 227,000 from the initially reported 238,000. The report is jointly developed with Moody's Analytics. Small businesses, defined as having fewer than 50 employees, showed the largest growth by business size, with 75,000 jobs added. Medium businesses, with between 50 and 499 workers, added 66,000, while large companies, with more than 500 staff members, added 34,000 positions, the report showed. By sector, the services sector added 160,000 jobs, down from an upwardly revised 177,000 in December, led by strength in the professional and business services group, which added 49,000. Goods-producing companies added just 16,000 positions after an increase of 50,000 the month before. Manufacturers cut jobs, with a decline of 12,000 after adding 16,000 positions in December. "Cold and stormy winter weather continued to weigh on the job numbers," Moody's Analytics Chief Economist Mark Zandi said in a statement accompanying the report. "Underlying job growth, abstracting from the weather, remains sturdy. Gains are broad based across industries and company sizes, the biggest exception being manufacturing, which shed jobs, but that is not expected to continue." The ADP (ADP) report comes two days ahead of the government's nonfarm payroll report, a measure of the labor market that is more comprehensive and includes both public- and private-sector employment. December's initial reading from ADP failed to foreshadow accurately the Labor Department's report, which showed that just 74,000 jobs were created in December. That was the lowest job creation total in nearly three years, but was largely blamed on the month's bout of freezing weather across the country. This time around, analysts are looking for the government data to show that 185,000 jobs were created in January. The entire increase is expected to be in the private sector; the private payrolls forecast is also 185,000, according to a Reuters survey. "The outcome is a touch lower than expected but still above our expectations for private payrolls to run at around 155,000," Annalisa Piazza, fixed income strategist at Newedge, wrote in a comment following the report. "That said, today's outcome represents the weakest ADP reading since August 2013 and it points in the direction of some moderation of job creation at the turn of the year." Financial market reaction was subdued. Standard & Poor's 500 index e-mini futures briefly added to losses but quickly retraced most of the move. U.S. stocks are expected to open slightly lower. In the bond markets, the yield on the 10-year U.S. Treasury note dropped about 1 basis point following the release of the ADP data to stand at about 2.61 percent, 2 basis points lower on the day.

Equities market 'the best in our lifetime,' but hold on tight, says Schwab's Sonders

Liz Ann Sonders

Don't be surprised if the stock market corrects by as much as 10% this year, but don't even think about giving up on the secular bull market.

That's the bottom line message from Liz Ann Sonders, chief investment strategist at Charles Schwab & Co. Inc.

Speaking at the Inside ETFs conference in Fort Lauderdale, Fla., on Tuesday, Ms. Sonders stressed that from both valuation and sentiment perspectives, there is no reason to walk away from the equity markets at this point.

“There is a slightly elevated risk of a 10% correction this year, but I don't think the secular bull market is over,” she said. “I have some short-term concerns, but I personally think the bull market we're in now will be the best is our lifetime.”

Some of the driving forces she identified include the fact that U.S. businesses “are sitting on a huge hoard of cash, which is at a level not seen since World War II,” she said. “We know the capital is there, but we haven't had the animal spirits to put it back to work yet. But this is the year we'll probably see increase in [capital expenditure] spending.”

Inflation is not a threat at this time, she explained, because “there is no velocity of money.”

“The money is not multiplying and that has held inflation in check, but it has also kept economic growth low,” Ms. Sonders said. “You don't get an inflation problem when you have no velocity of money, but if we start to see velocity pick up, then I think we could start to change the thinking around future [Federal Reserve] policy.”

The current spread between bank deposits and bank lending, which Ms. Sonders said has never been as wide as it is today, could narrow this year as lending picks up.

“But we're still a long way from the point where lending matches deposits,” she added.

Another area of potential fuel for the U.S. economy is one of Ms. Sonders' favorite themes, the U.S. manufacturing renaissance.

“We're at an inflection point,” she said. “For the first time in post-World War II history, U.S. manufacturing is up three years in a row, but keep in mind it is coming off a very low base and it is still only 13% of the U.S. economy.”

In terms of equity market valuations, Ms. Sonders said she is not worried about the fact that forward price-earnings ratios are around the historic median level.

“Bull markets rarely stop at the median P/E,” she said.

In ma! king her point, Ms. Sonders used a slide showing that the average trailing P/E of every bull market since the 1950s was 18.7, which compares to the current level of 16.6.

“We know that profit margins are at or near all-time highs,” she said. “But unless you're rolling over into a crash, it has not been historically a problem for the market coming off all-time highs in profit margins.”

Two Big Winners During the Day, and Two in the Evening

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Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

The major indexes and stock market, in general, had a very poor day today, but two of the Dow Jones Industrial Average's components bucked that trend, while another ended just slightly higher during the regular trading session but soared in the after-hours period. Let's take a moment and see what was going on today.

Shares of AT&T (NYSE: T  ) and Verizon (NYSE: VZ  ) rose an astonishing 1.38% and 1.12%, respectively, today despite being two of only seven Dow components ending the day in the black. The index itself lost more than 175 points today, or 1.07%. The likely cause for the move higher was an announcement made yesterday by AT&T that it would be reporting a non-cash gain of $7.6 billion from its pension plan due to better-than-expected performance of the company's pension during 2013. Verizon recently reported a similar event when it said that it would report a $6 billion gain from its pension obligation. What this essentially means is that the amount each company will need to add to its employee's pension funds has just dropped by a massive amount, and thus, more money can be used for business operations, or given back to shareholders. 

Another Dow component that finished in the black, but then really took off during the after-hours session, was Microsoft (NASDAQ: MSFT  ) , which was trading up 3.51% in the extended trading session this evening at 8 p.m. EST after finishing the regular trading period up 0.35%. The reason for the big jump in the extended period was the company's earnings report. Big Softy reported earnings per share of $0.78 on revenue of $24.52 billion. Analysts were expecting earnings per share of $0.68 on revenue of $23.44 billion. The much-better-than-expected results were great to see, but many investors were hoping management would have more to report along the lines of who may be taking over for the retiring Steve Ballmer. The company did not discuss this at all during the conference call. 

Another big winner in the after-hours session was Starbucks (NASDAQ: SBUX  ) , which closed the regular trading day down 0.29%, but ended the extended period up 1.1%. The move was, again, the result of a better-than-expected earnings report. Starbucks posted earnings per share of $0.71 for the quarter, much better than the $0.57 it reported a year ago, and higher than the $0.69 analysts were expecting. On the revenue side, Starbucks reported $4.24 billion in sales, again much higher than the $3.79 billion last year, but slightly lower than the $4.3 billion Wall Street was looking for. But on a same-store sales basis, the company saw a 5% increase both in the Americas and internationally, while operating margins climbed from 16.6% to an impressive 19.2%. Despite the slight miss on revenue, the report seemed to be very strong. 

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Jeep fire recall can proceed as Feds close probe

The government's closing of an investigation into crash safety of older-model Jeeps clears the way for Chrysler Group to proceed with recall repairs.

The recall for risk that a rear-end crash could rupture the vehicles' gas tanks, causing fires, covers 1.6 million Jeep Cherokees from 1993 to 1998 and Jeep Libertys from 2002 to 2007. A trailer hitch will be added, if they don't already have one, to provide additional rear-crash protection.

NHTSA plans to issue a final report on its investigation in a few weeks. Amid an outcry from safety critics about the recall plan and proposed fix, the National Highway Traffic Safety Administration took a closer look. It now has "no reservations" about Chrysler Group's plan, according to the Associated Press.

Though it had earlier balked at doing a recall, Chrysler praised the examination of the case in a statement: "Chrysler Group commends the National Highway Traffic Safety Administration for the diligence demonstrated over the course of this investigation. We share NHTSA's commitment to safety."

Critics aren't happy. In a statement in response to the NHTSA action, Clarence Ditlow, executive director of the Center for Auto Safety. said, "It is tragic that NHTSA approved Chrysler's sham trailer hitch recall for Jeeps that explode in rear impacts. The government is closing its investigation into older-model Jeeps with fuel tanks that could rupture and cause fires."

The case gained added attention because of the number of vehicles first requested to be recalled, 2.7 million, and Chrysler's initial refusal. It argued that there was no statistical proof that the Jeeps were more prone to fires after rear crashes than comparable vehicles from those years.

NHTSA's outgoing chief, David Strickland, agreed. He told the AP in an interview last month that Chrysler had convinced NHTSA that the Jeeps posed no significantly greater risk.

"Those vehicles performed at a rate similar to their peers. That is the keystone analysis as to whether! something poses an unreasonable risk to safety," Strickland is quoted as saying.

What to Know From Last Week: Restoration Hardware's Awesome Quarter, Lululemon's Brutal One, Oil Sho

Trying to figure out which country's World Cup team bandwagon you're going to jump on isn't easy. So take a few minutes and check out what sent the Dow Jones Industrial Average (DJINDICES: ^DJI  ) down from record highs over the last week.

1. Stock market winners ...
Just in time for you to clean out your closets and replace the furniture in your living room for some spring cleaning, Restoration Hardware (NYSE: RH  ) has been on quite a roll as well. Restoration Hardware stock popped in after-hours trading Wednesday following an earnings report worth putting on a mantel in your bedroom, as the company announced that revenue for the last quarter came in at $366.3 million.

So what's in the cards for the maker of all the kinds of home furnishings your mom is now into? Expansion. Restoration Hardware has 69 stores on this side of the Atlantic and wants to open another 30 that it expects will lead to $5 billion in annual sales. That kind of strategy got investors excited -- and so did word that profits were up 200% from last year.

CEO Gary Friedman had plenty of other fine goods to share with Wall Street as well. The financial analysts over at Restoration Hardware are quite an optimistic bunch -- as part of the earnings report, the company announced that it expects full-year 2014 revenue to reach $1.8 billion, with the help of $443 million to $453 million in revenue in the second quarter.   2. ... And stock market losers
While America seems to have been loading up on Restoration Hardware goods this past spring, they weren't buying Lululemon clothes for their workouts. Shares of lululemon athletica (NASDAQ: LULU  ) plummeted nearly 16% Thursday after a tied-up earnings report. On one hand, revenue beat Wall Street's expectations, rising 11% from last year to $385 million. But same-store sales fell 4% and the company also cut its full-year revenue projections, down to $1.8 billion from $1.82 billion.

Keep in mind that the past year has been as bad for Lululemon's brand image as not-stretching is for your muscles post-run. First, there was the sheer-pants fiasco, which cost Lulu over $60 million as it recalled see-through yoga gear. And later in the year, founder Chip Wilson was basically pushed out after he made some obnoxious comments about women's bodies wearing Lulu goods.

Now there's a new CEO in town, Laurent Potdevin, and with that move came some bold plans out of the Vancouver-based company. Lulu's CFO is exiting, but the company announced last week that it plans to buy back $450 million worth of Lulu stock. Plus, the company is adding 20 stores in Europe and Asia within the next three years, along with 14 pop-up stores in North America.

3. Iraqi violence rocked airline stocks and oil prices
A little bit of sectarian violence can go a long way. Insurgents have been tearing through northern Iraq over the past week -- and since Iraq is the second biggest oil producer in OPEC, the international cartel of nations that control oil production, investors worried whether a civil war could affect oil supplies. Limited oil would jack up the price, which was good news for oil and gas drilling companies, but bad for airline stocks such as Delta Air Lines (NYSE: DAL  ) and Southwest Airlines (NYSE: LUV  ) .

4. Official international econ outlook wasn't good
Thanks for nothing, World Bank. The international institution is best known for providing loans to developing countries, but last week it lowered its forecasts for global economic growth from 3.2% to 2.8% in 2014. The pessimistic economists over at the World Bank had two reasons: First, the world's biggest economy -- that would be ours here in the U.S. -- surprisingly shrank 1% in the first quarter because of pesky winter weather. And second, the Ukraine-Russia crisis hasn't sat well with investors worldwide.

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Lousy Jobs Report Reveals an Inconvenient Truth

After several consecutive months of job gains near or above 200,000, the streak came to an abrupt halt with the December jobs report - reminding everyone how fragile our economy still is.

Payroll growth last month slowed to the slowest pace since January 2011. Employers added a skimpy 74,000 jobs in December, Friday's Labor Department report revealed.

That was well below even the most cautious expectations.

Surveys showed economists expected gains of 197,000 to 205,000, with the unemployment rate remaining at 7%. Many analysts raised projections after Wednesday's report from private payroll processing firm ADP showed businesses added 238,000 jobs in December, the most in 13 months.

The lackluster job creation wasn't the only "surprise" in the December jobs report. The unemployment rate unexpectedly fell to 6.7% from 7%, marking the lowest level since October 2008.

Digging into the reasons behind the drop shows just how troubling this situation is. That's because the decline was due to some 347,000 discouraged Americans simply dropping out of the work force.

"Despite the good headline news (the dip in the unemployment rate), the U.S. economy is still experiencing problems stemming from the 2008 mortgage crisis," Steven Pressman, Professor of Economics at Monmouth University in Long Branch, NJ, told Money Morning. "A good part of the unemployment rate decline was due to people giving up and not looking for work. These people don't get counted as unemployed because they're not seeking work. The decline in the employment population ratio to 62.8%, the lowest rate since 1978, reinforces this. A number like this can only be regarded as disturbing."

Disturbing indeed. The number of people not in the workforce swelled by 525,000 in December to 91.808 million. That's a huge exodus of people leaving the employment arena. And the figure dwarfs the meager number of jobs created.

More Disturbing December Jobs Report Details

Other labor market indicators highlighted in the December report are also bothersome:

The average workweek dipped to 34.4 hours from 34.5 hours, a sign of weakness in the overall economy (employers give existing workers more hours before adding new employees). Average hourly earnings rose a paltry two cents to $24.17. Federal, state, and local government headcount fell by 13,000 jobs in December after rising 15,000 in November. Employment in healthcare and social assistance decreased by 6,000. That compares with monthly gains of 17,000 in 2013 and 27,000 in 2012. Moreover, it marked the first decline since July 2003. Construction employment fell 16,000, the first decline since May and a sharp reversal from 2013's monthly average of a gain of 10,000. Declines were also seen in the transportation, information technology, warehousing, and entertainment sectors. The scant job gains were peppered across the lower-paying categories of retail, fast food, and general merchandising. This increasing trend highlights a troubling shift. According to a 2013 Center for College Affordability and Productivity report, the number of college grads taking unskilled jobs has ballooned since 2006. The United States now has more college graduates working in retail than soldiers in the U.S. Army. The wider measure of joblessness, the underemployment rate - which includes part-time employees who prefer full-time jobs, those who have given up looking for work, and the unemployed - remained stubbornly elevated at 13.1% in December. The latest numbers mean the U.S. economy gained an average 182,000 jobs a month last year, less than 2012's average. For all of 2013, employers added 2.18 million jobs, a tad fewer than 2012's total of 2.19 million. Weak December Jobs Report to Prompt Fed to Pause

December's anemic jobs growth will play into the Federal Reserve's decision on how to unwind its bond-buying program, recently reduced to $75 billion per month.

"In terms of policy implications, the Federal Reserve is going to have to think twice about further tapering," Pressman said. "They are going to have to think twice about their 6.5% unemployment rate target for thinking about the end of tapering. We are nearly at this point now, but all other numbers point to the fact that the labor market is still much too weak."

In December, the central bank tried - and failed - to make its intentions clear: "If the incoming data broadly support the Committee's outlook for employment and inflation, we will likely reduce the pace of securities purchases in further measured steps at future meeting. Of course, continued progress is by no means certain. Consequently, future adjustments to the pace of asset purchases will be deliberate and dependent on incoming information."

So much for future guidance.

We will get more, or less, news at the Fed's Jan. 28-29 meeting.

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Related Articles:

Reuters:
Jobs Report: Economy Added 74,000 Jobs in December Bloomberg:
Payrolls Rise Less Than Forecast: U.S. Jobless Rate at 6.7% The New York Times:
U.S. Economy Adds Only 74,000 Jobs in December

The death of U.S. savings bonds

NEW YORK (CNNMoney) U.S. savings bonds, a graduation gift staple for nearly a century, are on the verge of extinction.

Americans bought over 40 million of the most popular savings bonds in 2000. Last year, the U.S. sold a mere 400,000 of them.

They were often given to students, newly married couples or anyone having a birthday. It was akin to gifting cash, but better. The bond certificate looked extra official, and it encouraged young people to save for the future -- whether for further study, a car or a house.

Savings bonds offer some interest each year -- much like money held in a bank's savings account -- but if you hold the bond to the end of the 10 to 30 year duration, you often make more money due to various adjustment procedures. It's akin to a bonus payment.

But these bonds are going the way of the landline telephone, and there are several reasons why.

For starters, savings bonds, which have been around since the 1930s, are no longer an attractive investment.

"The interest rates are so low these days that people just don't even get involved in them anymore," says Jim Moore, a Wells Fargo financial advisor based in St. Louis.

The fixed-rate "EE" bond offers a mere 0.5% interest rate for the next 20 years, barely better than putting money under a mattress. Bonds issued at the end of last year were yielding an even more lousy 0.1% rate.

Moore recommends buying a good quality, high paying dividend stock or exploring other savings options instead. Many parents and grandparents utilize 529 savings plans for colleges that are run at the state level. Investment growth in a 529 plan is tax deferred, and any money taken from the 529 to pay for college isn't taxed at the federal level.

But it's the Internet that really killed off demand for sa! vings bonds.

You can no longer buy a paper savings bond. On January 1, 2012, the government stopped sales of over-the-counter paper bonds and forced people to buy them online via TreasuryDirect.

That's when the big plummet occurred. The goal was to save money, but in the process, the government made it harder for potential buyers.

Many older Americans were raised on ads to be patriotic and buy these bonds to help the country (and yourself). There were slogans such as "Back Your Future." The savings bonds were sold in many places, including local banks and brokerages.

Now you have to go online and fill out cumbersome forms with your taxpayer ID number, the intended recipient's Social Security number, your bank account and other information. It's even more complex if you try to gift a savings bond to someone under 18.

Kate Warne, investment strategist for Edward Jones, says the only time she hears about savings bonds these days is from clients telling her how hard the website is to navigate.

"The complaint I get is 'I have trouble. What should I do instead?'" Warne says.

Those formal looking certificates that made such lovely accompaniments to graduation degrees are history. The only way to get one now is to ask for your federal tax refund to be returned to you as savings bonds.

Even that is convoluted. The bonds are only issued in $50 increments, so unless your refund is perfectly divisible by 50, you get savings bonds plus a check for the difference. It's a small program according to the Treasury Department.

The government has no plans to revive paper savings bond sales. There is a mock certificate people can print out online to wrap up in a box and give as a gift. But that just doesn't have the same appeal.