BlackBerry's Oxymoronic Opinion of Tablets

BlackBerry (NASDAQ: BBRY  ) CEO Thorsten Heins is just sounding silly now. In a recent interview with Bloomberg, Heins expresses skepticism over the broader tablet movement.

"In five years I don't think there'll be a reason to have a tablet anymore," Heins is quoted as saying, "Maybe a big screen in your workspace, but not a tablet as such. Tablets themselves are not a good business model."

Oddly enough, Heins goes on to say, "In five years, I see BlackBerry to be the absolute leader in mobile computing -- that's what we're aiming for. I want to gain as much market share as I can, but not by being a copycat."

That's an oxymoron if I've ever heard one. Mobile computing includes a secular shift toward smartphones and tablets, but you could also arguably include shifting from desktops to laptops within the PC market. Of the three devices that embody mobile computing -- smartphones, tablets, and laptops -- BlackBerry only sells one.

It's certainly true that tablets have not been a good business for BlackBerry. Shortly after jumping into the market with the PlayBook, the company promptly recorded a pre-tax non-cash charge of $485 million related to a glut of unsold inventory. While PlayBook unit shipments haven't been consistent, to the company's credit they're holding up relatively well for a device that's two years old and only received minor upgrades. That may also be a function of the price dropping from $500 to under $200 over the past two years.

Source: BlackBerry. Fiscal quarters shown.

The tablet market is also much harder to crack competitively. Not only does BlackBerry have to compete with market leader Apple (NASDAQ: AAPL  ) and its iPad and iPad Mini, but on the low end habitual disrupters Amazon.com (NASDAQ: AMZN  ) and Google (NASDAQ: GOOG  ) are perfectly content selling hardware at cost.

The e-tail and search giants have ensured that there really isn't much in the way of hardware margins down there, which is where the PlayBook is currently positioned. Of course, the tablet market is proving to be a good business model for Apple, Amazon, and Google. The iPad remains Apple's fastest-growing new product category, Amazon has expanded its content ecosystem, and Google has dramatically broadened the global reach of its ads and services.

Just because BlackBerry's tablet business isn't good doesn't mean others can't enjoy it. Sorry, Heins, but it's simply not possible to become the "absolute leader in mobile computing" without tablets.

There's a debate raging as to whether Apple remains a buy. The Motley Fool's senior technology analyst and managing bureau chief, Eric Bleeker, is prepared to fill you in on reasons to buy and reasons to sell Apple, and what opportunities are left for the company (and your portfolio) going forward. To get instant access to his latest thinking on Apple, simply click here now.

Big Lots Picks a New CEO

3 Perpetual Myths for How to Improve Credit Scores

The world of personal finance, debt and credit scores can be a scary and confusing place. While there's a lot of helpful information about there to be found, there are also piles of misinformation as well. To help you navigate through the personal finance trenches, let's take a look at three big myths for how to improve your Fair Isaac Corporation (NYSE: FICO  ) score, as well as some solid steps that will actually help you improve your score.

Myth 1: Cancel Credit Card Offers
Although cancelling credit card offers may de-clutter your kitchen table, there's no evidence it'll improve your credit score. Credit card offers are considered "soft" inquiries, which don't have an impact on your score . Along the same lines, if you're worried that a checking your own credit score will lower it, don't be! Checking your credit score is also a soft inquiry and won't hurt your FICO score. The path to perfect credit is attainable, you just won't get there faster by cancelling offers.

Myth 2: Close Out Old Accounts
Sorry folks, closing those old paid-in-full accounts won't boost your score -- and it could actually hurt it . Credit reporting agencies like Equifax (NYSE: EFX  ) Experian, and TransUnion want to see long credit histories that are in good standing. When you close an account you, theoretically, shorten your credit history.

Creditors want to see that you've had a long history of responsible and diversified borrowing. When you have more credit available, and don't use it, your credit utilization rate stays low and can help increase your score. Keep in mind that some accounts will stay on your history even after they're closed. So if you're hoping to get rid of previously delinquent accounts but paying them off and canceling the account, it won't work.

Myth 3: Buy Better Credit
Although many companies out there promise they can improve your credit score if you pay them money, it's simply not true. If you've missed payments, you can't pay to make those records go away.

What can be done is to dispute legitimate discrepancies on your credit report .  But be careful about hiring a company to do this. Some will send a lot of letters to credit agencies about your account, but won't actually find out what should be disputed and what shouldn't be. You'll end up spending money and won't have fixed anything.

How to really improve a credit score
One of the first steps to improving your credit is to be proactive. Find out what your score is and make sure the accounts and payment history are correct. With so much information flowing into the credit agencies, finding a problem on your account isn't unusual. You can get a free annual credit report by going here: www.annualcreditreport.com.

Fellow Fool and personal finance expert Dayana Yochim says your credit history and total amount you owe make up 65% of your credit score. So keep the regular payments coming. Also, keep credit usage low. Some institutions, like Bank of America (NYSE: BAC  ) , will tell you that using up to 50% of your available credit is OK . But let's be honest, it's in the interest of those banks to have you using up your credit. A better bet would be to use 30% or less of your available credit, while 10% or lower should be your ultimate goal. If you're trying to figure out which debts to knock out first, start paying off any no-money-down financing plans you have.

Although it can seem overwhelming, it is possible to improve your credit score in months, not years -- so get started today! 

After it's all settled
Once you've figured out what to do with your personal debt and your credit score is all in order, one of the best financial investing approaches is to choose great companies and stick with them for the long term. The Motley Fool's free report "3 Stocks That Will Help You Retire Rich" names stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of. Click here now to keep reading.

 

Trending Now: A New Gold Rush?

After plunging first through $1,500 per ounce and then $1,400 per ounce, gold seems to have not only reversed, but begun to trend higher, rising seven of the eight trading days since the two-day slide. Helping the rise in prices has been increased demand for physical gold by both individuals and central banks. Further aiding the recovery is that many of the short-term forces that were weighing on gold prices have either been resolved or removed. Still, you must wonder if gold prices are getting an extended dead-cat bounce before falling lower, or if a new trend is being established.

Gold Price in U.S. Dollars data by YCharts

Look out below
After falling through a critical support level at $1,500, gold wasted no time dropping all the way through the next century mark at $1,400. So severe was the fall that Goldman Sachs quickly advised its customers to avoid the precious metal, pointing out that cash outflows were likely to take the commodity lower. With the investment bank's price target for gold at $1,545 for 2013, however, current prices make the metal look cheap, at least as a near-term proposition. That said, it has set its 2014 price target at $1,350, so the longer-term outlook is not great.

The impact of the Cyprus crisis shouldn't be overlooked, either. As a part of the bailout, Cyprus had to liquidate its gold positions to raise cash. This isn't expected to have a lasting effect, but it probably added to the downward pressure. Even Goldman's negative view on gold discounts the short-lived impact of these events: "With our economists expecting few ramifications from Cyprus and that the recent U.S. slowdown will not derail the faster recovery they forecast in 2H13, we believe a sharp rebound in gold prices is unlikely."

One of the effects of Cyprus and other global macroeconomic events is that the U.S. dollar strengthened. This has been a drag on gold as safe-haven capital is enticed out of the precious metal and into dollar-denominated options. All of these factors pushed down prices, but only temporarily.

Trending does not make a trend
Just because gold has come off its recent lows, that alone doesn't mean a new trend has started. Factors that should be considered, however, include the fact that despite the highest level of capital outflows from the SPDR Gold Trust (NYSEMKT: GLD  ) ever, the ETF has also recovered since the slide. There also seems to have been a structural shift going on in the past week, potentially driven by the increased demand for physical gold. Central banks have been buying bullion, and individuals have bought sufficient quantities that the U.S. Mint has temporarily halted sales of one-tenth-ounce coins.

More fundamental to the structural shift in the market is that after an extended period of underperformance by gold miners such as Goldcorp (NYSE: GG  ) and Newmont Mining (NYSE: NEM  ) , this phenomenon has reversed for the time being. As of this writing, since the two-day collapse, GLD is up under 7% as compared with a rise of nearly 8.5% for Newmont and a 12.5% surge for Goldcorp. The miners are probably benefiting from the shift toward bullion. If the miners are able to reverse this market preference for gold over gold miners, it could have long-term ramifications for gold in general.

GLD data by YCharts

Perhaps even more critical to remember is that the recent trend is not new. Gold has been rising for the past 12 years, and it was the fall that was the aberration. If the commodity rises from here, it will simply be a continuation after a reasonable correction. The fundamentals for gold continue to look solid, but with U.S. stocks reporting strong earnings, there are some risks to consider. Ultimately, an allocation to gold remains appropriate, but it should be seen as a part of a balanced portfolio, not the sole driver of performance.

Goldcorp is one of the leading players in the gold mining market. For the past several years, investors have been the beneficiaries of several successful acquisitions and strong organic growth. Goldcorp's low-cost production of one of the most sought-after metals in the world continues to make this stock an attractive choice for long-term investors. To learn everything you need to know about this mining specialist, you're invited to check out The Motley Fool's premium research report on the company, which comes with a full year of ongoing updates and analysis to keep you informed as key news breaks. Click here now to claim your copy today.

Dow May Fall on GDP Data and Earnings

LONDON -- Stock index futures at 7 a.m. EDT indicated that the Dow Jones Industrial Average (DJINDICES: ^DJI  ) may open down by 0.28% this morning, while the S&P 500 (SNPINDEX: ^GSPC  ) may open 0.33% lower.

European markets edged lower this morning as investors reacted to several downbeat earnings reports and turned cautious ahead of today's U.S. GDP data, due at 8.30 a.m. EDT. Consensus forecasts suggested that U.S. GDP may have risen by 3% during the first quarter of the year on an annualized basis, after rising by 0.4% in the final quarter of 2012. Today's other main economic report was April's University of Michigan consumer sentiment survey, which was due at 9.55 a.m. and was expected to show a slight rise in consumer sentiment to 74.0, up from 72.3 in March.

Companies due to report earnings before the opening bell this morning included Chevron, Burger King and Goodyear Tire. Forest products company Weyerhaeuser reported a 351% increase in first-quarter net earnings to $144 million or $0.26 per share, up from $41 million and $0.08 per share for the same period last year. Tyco International said that it would take a $124 million charge on its first-quarter earnings, much of it related to an environmental issue at a Wisconsin plant. The charge caused quarterly earnings to fall to $0.16 per share, down from $0.29 per share for the same period last year.

Several major Nasdaq stocks could be actively traded when markets open this morning. Amazon fell 3.2% in German trading this morning, after the retailer said that earnings for the second quarter would fall within a range from an operating loss of $340 million to a profit of $10 million, substantially below analysts' average forecast for a profit of $165 million. Expedia slid 5.3% in after-hours trading last night, after the online travel firm's CFO said that increased competition for its Hotwire travel website meant that earnings would be $20 million to $30 million lower than expected in 2013. Completing our trio of falling Nasdaq stocks, Starbucks' share price fell by 3% in German trading this morning, after it missed revenue expectations in its latest quarterly results. CEOTroy Alstead told Bloomberg that "Europe continues to be just a challenging place for us."

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Boeing's Dreamliner -- and Its Stock -- Are Flying

U.S. stocks started the week off on a strong note, as the S&P 500 (SNPINDEX: ^GSPC  ) and the Dow Jones Industrial Average (DJINDICES: ^DJI  ) both gained 0.7% and 0.1%, respectively. That was enough to push the S&P 500 to a record high, with the index recording gains in six of the last seven trading sessions. That consistency on the upside is also present when we widen out the timescale: With one day left in April, the S&P 500 is ahead 1.6% on the month, which means it is well positioned to record its sixth consecutive monthly gain -- its longest streak since Sep. 2009.

Somewhat unusually, in light of stocks' buoyancy, the VIX Index (VOLATILITYINDICES: ^VIX  ) , Wall Street's fear gauge, rose today by 1%, to close at 13.71. (The VIX is calculated from S&P 500 option prices and reflects investor expectations for stock market volatility over the coming 30 days.) This may be the result of hedging activity by investors in the run-up to the Fed's rate-setting meeting on Tuesday and Wednesday

Flying high!
What an extraordinary turn of events! I never expected to hear that a Boeing (NYSE: BA  ) 787 Dreamliner would be up and flying -- in a scheduled commercial flight, not a test flight -- before the month of April was out. Yet that's exactly what happened on Saturday, as Ethiopian Airlines flight 801 took off from the Ethiopian capital of Addis Ababa en route to Nairobi, Kenya. (It did arrive safely, in case you were wondering.)

On Sunday, Japanese airline ANA, which is the largest operator of 787s, with a fleet of seventeen, conducted a test flight, two days after Japanese regulators lifted a flight ban on the aircraft. ANA said it may resume commercial flights in June.

Regulators worldwide grounded the Dreamliner in January, following two incidents in which the aircraft's advanced lithium-ion battery unit overheated, producing smoke and catching fire.

I'm puzzled that regulators have approved what looks like an aggressive flight resumption timetable, particularly if one considers that the cause of the problem has not been identified. Instead, Boeing has proposed a series of modifications, including a different battery containment enclosure, which were approved by the FAA on April 19.

The market, on the other hand, seems to have discounted this best-case scenario from the outset, despite the massive headline risk the company faced:

Source: BA data by YCharts.

The shares barely went into negative territory and, although they did underperform the market through February, they now have the S&P 500 eating their dust. While that price behavior seems extraordinary to me, it suggests two things: First, the market had a better appreciation for this story than I did, and, second, the stock began the year significantly undervalued.

Boeing operates as a major player in a multitrillion-dollar market in which the opportunities and responsibilities are absolutely massive. However, emerging competitors and the company's execution problems have investors wondering whether Boeing will live up to its shareholder responsibilities. In our premium research report on the company, two of The Motley Fool's best minds on industrials have collaborated to provide investors with the key, must-know issues surrounding Boeing. They'll be updating the report as key news hits, so don't miss out -- simply click here now to claim your copy today.

Southwestern Doubles Down on the Marcellus

Southwestern Energy (NYSE: SWN  ) became the latest beneficiary of Chesapeake Energy's (NYSE: CHK  ) asset disposition program. Southwestern was able to pick up 162,000 net acres in the Pennsylvania portion of the Marcellus Shale for a rock bottom price of just $93 million. This will bring Southwestern's total position in the play to 337,000 net acres.

While the acquired acres are near Southwestern's existing position, these are more prospective acres. Current production from the acquired properties is just 2 MMcf per day from the 17 gross producing wells. However, as you can see on the map below, these the acquired acres fit in nicely with Southwestern's existing Marcellus position:

Source: Southwestern Energy Investor Presentation

The deal also fits in well with the company's plan to grow both production and reserves by double digits. Because of its low-cost production, Southwestern can still drill for gas when most others cannot. The company sees strong growth in the year ahead as its low-cost operations are setting the stage for the company to enjoy a record year.

The Marcellus is well-known for its low cost of production, which is why many drillers have seen it fuel a recent surge in their stock prices. Marcellus-focused companies like Range Resources (NYSE: RRC  ) , Cabot Oil & Gas (NYSE: COG  ) , and EQT Resources (NYSE: EQT  ) are among those enjoying a nice run so far this year as you can see in the following chart:

RRC Total Return Price data by YCharts

Cabot boasts of finding some of the best producing wells in the Marcellus as last year the company had 15 of the top 20 Pennsylvania Marcellus wells. The economics in the Marcellus are so good that the company believes it will produce $375 million in free cash flow next year, which is a nice problem to have. The company can either return more cash to investors or use the funds to accelerate its Marcellus drilling program.

Range Resources also enjoys some very profitable Marcellus wells. A bulk of its holdings are in the western part of the state which holds the more lucrative rich gas. The enticing economics are behind the company's drive to see 20%-25% annual production growth over the next few years. This isn't growth at all costs, as the company is focused on improving on a per-share basis to ensure all investors benefit from its success. 

Last but not least is EQT, which enjoys a 53% after-tax internal rate of return on its Marcellus wells when natural gas is above $4. Like Range, its acreage is mainly concentrated in the western part of the state. One of the reasons its returns are so good is that the company has the third-lowest average finding and development costs over the last three years, behind only Range and Cabot.

Southwestern is the lone laggard this year which is something it's hoping to correct by doubling down on the Marcellus. As you can see from the performance of its peers, this isn't a bad idea. When you add in the rock bottom price it's paying to Chesapeake, you can understand why this is a deal to be excited about.

This sale marks another in a long line of asset sales from Chesapeake Energy. The company's recent wheeling and dealing has energy investors hard-pressed to find another company trading at a deeper discount. Its share price depreciated after negative news surfaced concerning the company's management and spiraling debt picture. While the debt issues still persist, giant steps have been taken to help mitigate the problems. To learn more about Chesapeake and its enormous potential, you're invited to check out The Motley Fool's brand-new premium report on the company. Simply click here now to access your copy.

The Housing Rebound: It's Not What You Think

The housing sector's slow recovery appears to be gaining ground, and homebuilders like PulteGroup (NYSE: PHM  ) Ryland Group (NYSE: RY  ) recently reported gains in first-quarter revenues and substantial increases in sales prices due to rising demand. The U.S. Census Bureau reported that housing starts for March were well over one million, nearly 47% over that for the same time last year.

Yet, there are worries. Some analysts are concerned that there is a mini housing bubble forming, as prices rise but other economic indicators -- such as unemployment numbers -- resist improvement. What is causing this rally? Two unusual ingredients this time around seem to be fueling the fire: Intense investor activity and artificially low interest rates.

An unusual turnaround
A quick glance at recent unemployment numbers lends credence to the notion that the jobs picture isn't brightening. Despite a dip in the unemployment rate to 7.6% for March, experts note that discouraged job seekers abandoning their search was the cause of the 0.1% slip in the rate from the previous month. The paltry 88,000 jobs created last month was disappointing, representing the lowest rate of job creation since last June. 

Another unusual aspect of this so-called recovery is that two historically important types of buyers are largely absent: the first-time homebuyer, and those moving up to more expensive housing. Instead, the market is being moved by investors, loaded with cash and scooping up single-family dwellings at a frenzied pace, driving up prices.

For Wall Street types, single-family foreclosures can be bought cheaply and in bulk, then fixed up and rented. Companies like the Blackstone Group (NYSE: BX  ) and Colony Financial (NYSE: CLNY  ) have been very active in this market, with the former purchasing 16,000 homes just last year, and the latter ramping up its own portfolio to approximately 7,000. This new industry has also spawned fresh entrants from the REIT field, Silver Bay Realty (NYSE: SBY  ) and Altisource Residential, (NYSE: RESI  ) two trusts that were spun off earlier this year from parent companies Two Harbors Investment (NYSE: TWO  ) and Altisource Portfolio Solutions (NASDAQ: ASPS  ) , specifically to take advantage of the boom in the foreclosure-to-rental market.

Big money moves markets
Are investors really fueling this recovery? Some, like former Morgan Stanley analyst Oliver Chang, who left that firm to found an investment fund that buys and rents single-family houses, say "no." But others disagree, like Jeff Pintar, whose company buys up single family homes in California. Pintar told The Wall Street Journal that most homes priced below $400,000 in Orange County are quickly being snatched up by institutional investors.

California was hit especially hard during the housing crisis, as was Florida -- where experts estimate big investors buying up homes constitute 70% of sales in some areas of the state. Locations in other states that saw a high number of foreclosures are also seeing a rebound due to investor dollars. Over the past year, the city of Phoenix, for example, has seen prices rise by 23%, and Las Vegas has reported a jump in home prices of 15%.

The numbers tell the tale
Even those pleasing housing numbers from the government aren't all they seem. Of the 1,036,000 housing starts reported for last month, only 619,000 were single-family homes. By comparison, 392,000 -- more than half -- were multi-families, destined to contain more than five units each.

Doubtless, these apartments will be occupied by young people who are increasingly forming their own households, to the tune of 1.1 million in 2011. Unfortunately, the doubling of the lethargic household formation rates of the 2008 to 2010 recession years hasn't helped housing -- even this Reuters article on the subject notes that most of these persons are moving into rent. With the rates of crippling student loan debt faced by many college graduates these days, buying into the housing market doesn't seem likely any time soon.

Will the housing market collapse as soon as investors decide that prices have risen too much for their taste, and they exit the market en masse? Perhaps. Another concern is that the non-investors currently participating in the housing market because of ultra-low interest rates, courtesy of Federal Reserve policy, will also drop out if interest rates begin to climb. Unfortunately for the housing sector, the components of the current revival don't appear to be the ingredients for long-term success.

If investing in this particular market isn't for you, the Motley Fool has compiled a special free report outlining our nine top dependable dividend-paying stocks -- which could be just right for your own income portfolio. It's called "Secure Your Future With 9 Rock-Solid Dividend Stocks." You can access your copy today at no cost! Just click here.

Killing "Vampires" With Nothing More Than a Bow and Arrow

Forget the legends. An old-fashioned arrow to the heart is all you need to slay a vampire -- especially if said vampire sports perfect hair and a sculpted teenage body.

Arrow, the DC Comics adaptation Time Warner (NYSE: TWX  ) introduced in October, now ranks as the CW network's top rated show, beating the Twilight-inspired The Vampire Diaries. More than 3 million viewers on average tune in weekly to see Stephen Amell's avenging archer, Nielsen reports, versus 2.8 million for the bloodsuckers.

Surprised? You shouldn't be, says Tim Beyers of Motley Fool Rule Breakers and Motley Fool Supernova in the following video. AMC Networks' (NASDAQ: AMCX  ) top-rated drama The Walking Dead is inspired by a comic book of the same name, and Walt Disney (NYSE: DIS  ) is preparing to launch Iron Man 3 in the U.S  on May 3. All signs suggest that the film will be one of the summer season's biggest.

Do you enjoy Arrow? How much TV do you consume daily? Please watch this short video to get Tim's full take, and then leave a comment to let us know what you think of the show and whether you'd buy, sell, or short Time Warner stock at current prices.

For further analysis of Disney's entertainment empire, tune into our newest premium research report in which we go inside for an up-close tour of The House of Mouse and tell you what the company is really worth, and whether there's reason to add the stock for your portfolio. Access your report now by clicking here.

How Anyone Can Invest Like Hedge Funds -- Only With Lower Fees And Risk

"Rich guys have all the fun," said my friend after reading several hedge fund prospectuses.

He added that he would love to diversify his stock portfolio with alternative investments, but the best hedge funds typically require a million-dollar minimum investment and the investor to be accredited.

It's just not my friend. Even most accredited investors can't afford to plunge a million or more into a hedge fund and hope for the best. Most individual hedge fund investors are in the ultra-high net worth class. For them, a million dollars in a hedge fund merely represents the diversification of a portfolio rather than the majority of its investable assets. 

What Are Hedge Funds?
Hedge funds are loosely regulated private investment partnerships that invest in a wide variety of strategies. These strategies can include derivatives, long and short positions, commodities, currencies and just about any other investment strategy that can be imagined.

 

This wide diversification choice is what gives hedge funds their edge over more traditional investments. In addition, because they're subject to less regulation and oversight than other forms of funds permits hedge funds can quickly alter course in search of profits. Furthermore, their ability to use leverage and invest in exotic products increases their appeal among ultra high net worth investors.

However, it's critical to remember that leverage, managerial freedom and exotic products can work against you as easily as for you. Just because it's a hedge fund, the profits are no way guaranteed.

As an example, my old firm was invested in five different hedge fund partnerships. Out of the five, three lost money over the year, one broke even, and one made huge gains, saving the firm and its investors. Had we not been invested in the one large winner, it would have been a financial disaster.

In my mind, this experience solidified the need for diversification, regardless of one's confidence in a particular investment or manager.

Play In The Hedge Fund's Exclusive Sandbox
I explained to my friend that there is a solution to his dilemma. Now every investor can take advantage of hedge fund tactics and profits.

Known as alternative mutual funds, these funds attempt to mimic hedge fund strategies -- only without the very high fees and often lofty structural risk that are part and parcel with private hedge funds. These alternative mutual funds invest and hedge with derivatives, shorts, exchange-traded funds (ETFs) and nearly anything else a hedge fund would be interested in.

Investors do not need to be accredited and may invest far less money. These alternative mutual funds also do not charge the standard yearly fees (2% on assets and 20% on performance) of their hedge fund brethren.

There are limits on leverage that can be employed by alternative mutual funds, but this can be a good thing, should a drawdown occur.

The alternative mutual fund space has been exploding in popularity. In 2007, there were just 112 alternative mutual funds. Today, there are 357 -- more than three times as many. I think this is just the start of the growth in alternative mutual funds.

Offering most of the benefits of hedge funds, but with a much lower entry price level, radically lower costs, and just enough regulatory oversight to increase the safety factor, alternative mutual funds may one day take the spotlight from the traditional hedge fund market.

In fact, multiple large hedge funds have launched or are considering launching alternative mutual fund products. It is truly a niche that should be on your investment radar.

My Favorite Alternative Mutual Funds
Bridgeway Managed Volatility Fund (NYSE: BRBPX): This fund has produced more than 6% returns in the past year with 4% of that in 2013.

It seeks to provide high returns with short-term risk less than or equal to 40% of the stock market. About 75% of the fund's assets are invested in common stocks and options on companies that trade on regulated national exchanges.

Fees are low with an expense ratio of 0.94, and Morningstar lists risk at below average when compared with other funds in the same category.

Dreyfus Global Alpha Fund (NYSE: AVGAX): The word "alpha" in the hedge fund world means performance above the norm, and this alternative mutual fund fits the name.

The fund seeks total return by investing in the global equity, currency, bond and fixed income securities. It primarily uses futures, options and forward contracts that allow the fund's managers to make fast decisions. The fund has earned investors more than 8% in the past year and just under 5% in 2013.

Global Alpha has an expense ratio of 1.85%, which is above average, according to Morningstar, which also rates the fund as high risk compared with similar funds.

Risks to Consider: Alternative mutual funds should be used as a way of diversification and not a primary investment. The strategies employed often contain more risk than traditional mutual funds. This risk can be offset by higher rewards. Always use stops and position size properly in your portfolio.

Action to Take --> I like both of these alternative mutual funds as a means to diversify a stock portfolio -- and hopefully capture profits.

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How DuPont's Earnings Will Look Tomorrow

On Tuesday, DuPont (NYSE: DD  ) will release its latest quarterly results. The key to making smart investment decisions on stocks reporting earnings is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever surprises inevitably arise. That way, you'll be less likely to have an uninformed, knee-jerk reaction that turns out to be exactly the wrong move.

As the chemical-industry representative in the Dow Jones Industrials (DJINDICES: ^DJI  ) , DuPont makes a wide variety of products for businesses including agriculture, electronics, plastics, and pharmaceuticals. But given the overall global economic weakness, can the company keep producing the results investors want to see? Let's take an early look at what's been happening with DuPont over the past quarter and what we're likely to see in its quarterly report.

Stats on DuPont

Analyst EPS Estimate	$1.52
Change From Year-Ago EPS	0.7%
Revenue Estimate	$10.41 billion
Change From Year-Ago Revenue	(7.3%)
Earnings Beats in Past 4 Quarters	1

Source: Yahoo! Finance.

Will DuPont ramp up earnings this quarter?
Analysts have had mixed feelings about DuPont's earnings in recent months. They've cut their consensus estimates on earnings for the just-ended quarter by $0.04 per share, but they've boosted their full-year 2013 earnings-per-share figures by a nickel. The stock has responded with modest optimism, rising about 7% since mid-January.

DuPont has increasingly focused on the lucrative agriculture and farm products arena. With a variety of engineered seeds, fertilizers, and herbicides, DuPont has pushed forward in developing technology to help protect crops from threats like disease and changing weather conditions, such as last year's drought. The company has seen strong growth in the ag segment, and it expects double-digit sales growth in agriculture through 2013.

As part of its refocusing, DuPont made a big move to streamline its business during the quarter, finally closing on its $4.9 billion deal to sell its car paint division to private-equity firm Carlyle Group (NASDAQ: CG  ) . Carlyle arguably got a good deal, given the relatively low price, and it has a opportunity to whip the division back into shape. But the move should help DuPont improve its margins and reduce its exposure to Europe, whose economic woes have been holding the company back recently.

Another important move DuPont made recently was settling a lawsuit with rival Monsanto (NYSE: MON  ) , with DuPont agreeing to pay more than $1.75 billion over the next 10 years in order to secure licensing rights for various products. In exchange, the two competitors agreed to dismiss their respective claims against each other, resolving what could have been a long and ugly dispute.

In DuPont's report, be sure to watch closely at where the company is seeing the best growth prospects. If core businesses like its titanium dioxide production start to pick up in light of the housing recovery, then DuPont may move back from its ag focus to become more of a conglomerate again.

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Why Sanmina Shares Popped

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

What: Shares of Sanmina (NASDAQ: SANM  ) have popped today by as much as 16% after the company reported earnings.

So what: Revenue in the fiscal second quarter was $1.43 billion, and non-GAAP earnings per share came in at $0.30. That top-line result was in line with consensus estimates while the bottom-line was a beat relative to estimates. CEO Jure Sola said the company continues to face a "soft market environment" but that Sanmina continues to invest in technology and services, with new program ramps on the horizon.

Now what: The company provided outlook for the coming quarter ending June, with revenue expected in the range of $1.45 billion to $1.5 billion. Non-GAAP earnings per share should be $0.32 to $0.38. Following the results, Needham boosted its price target on the stock from $12 to $13 while keeping its buy rating, citing solid execution amid a tough environment. The analyst believes infrastructure leverage will pay off later in the year along with cost efficiencies.

Interested in more info on Sanmina? Add it to your watchlist by clicking here.

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$225 Million in Pentagon Contracts Awarded Thursday

The Department of Defense awarded a dozen separate contracts Thursday, worth more than $225 million in aggregate. Notable winners (among publicly traded companies) included:

CACI International (NYSE: CACI  ) , which was awarded a $20.2 million modification to a previously awarded contract to provide program management, acquisition, technical and engineering, business and financial management, and logistics support to the Program Executive Office Littoral Combat Ships through Oct. 2013. Bell Helicopter Textron (NYSE: TXT  ) , recipient of a $14.4 million firm-fixed-price, sole-source contract to supply main rotor blades to the U.S. Navy. This contract should be complete by Dec. 31, 2015. Tetra Tech (NASDAQ: TTEK  ) , which won $13.2 million as a firm-fixed-price contract modification increasing the maximum dollar value of a task order to perform soil cover restoration at the now-closed Alameda Point Naval Air Station in California. Tetra Tech's work on this contract should be complete by Feb. 2014. PerkinElmer's (NYSE: PKI  ) Genetics division, which won a maximum $9.7 million modification extending its one-year base contract to perform newborn screening services for members of the U.S. Army, Navy, Air Force, and Marine Corps by one year (out of a potential four one-year extensions). Raytheon's (NYSE: RTN  ) Space and Airborne Systems division, which was awarded $9 million to exercise an option on a previously awarded firm-fixed-price contract. Raytheon will supply 26 integrated multi-platform launch controllers (IMPLCs) for installation on Navy F/A-18 aircraft. The IMPLC is a component of the AN/ALE-50(V) countermeasures decoy dispensing set, used to defend the F/A-18 against hostile missiles. Raytheon's completion date on this contract is Nov. 2015.

What Netflix Has in Common With Pandora

Netflix (NASDAQ: NFLX  ) followed up on last week's fantastic earnings report by outlining the long-term future of digital media.

In this video, Fool contributor Anders Bylund zooms in on one actionable tidbit from that white paper. Giving users a personalized media experience is key to winning in the digital marketplace. In the video space, nobody can challenge Netflix's deep and refined viewership data and recommendation algorithms. That gives it a competitive advantage against all comers, much the same way that Pandora Media (NYSE: P  ) forged a moat from its Music Genome database.

The Motley Fool has released a premium report on Netflix. Inside, you'll learn about the key opportunities and risks facing the company as well as reasons to buy or sell the stock. The report includes a full year of updates to cover critical new developments, so make sure to click here and claim a copy today.

The Reason Stocks Are Surging Today

Blue-chip stocks are broadly higher today after government statistics showed that the unemployment situation is improving faster than expected. With roughly an hour left in the trading session, the Dow Jones Industrial Average (DJINDICES: ^DJI  ) is up by 86 points, or 0.58%.

This morning, the Labor Department released its weekly estimate of jobless claims -- click here to see the official press release. According to the report, the number of Americans applying for unemployment benefits last week fell to a near five-year low. The figure declined by 16,000, to a seasonally adjusted 339,000. Meanwhile, economists surveyed by MarketWatch.com had expected the figure to come in at 351,000.

According to an economist quoted by The Wall Street Journal, "The drop in claims reinforces our view that the sudden weakening in the data in March was more technical than fundamental, likely due in part at least to the swing in the weather to colder-than-usual from milder-than-usual earlier."

Earnings season is also exerting its influence on the market today, as a number of bellwether companies reported their financial results from the first three months of the year. The industrial conglomerate 3M (NYSE: MMM  ) came in below expectations, with earnings per share of $1.61, versus the consensus estimate of $1.65. On top of this, the company lowered its forward guidance blaming a "stronger U.S. dollar and softer demand in some end markets." Share of 3M are down by 2.7% at the time of writing.

The oil giant ExxonMobil (NYSE: XOM  ) is also seeing its shares fall despite beating bottom-line estimates. For the quarter, Exxon earned $2.12 per share. Analysts polled by Thomson Reuters had forecast earnings of $2.05 per share. Investors' discontent, in turn, is stemming from the company's falling revenue. In the same period last year, the company reported $124 billion in total revenue and other income. This year, it reported only $108 billion.

And finally, shares of UPS (NYSE: UPS  ) are headed higher on the heels of its better-than-expected first-quarter performance. The shipping giant notched a 9% improvement in its operating profit on a year-over-year basis, attributing the gain to increased volume from e-commerce sales -- click here for the earnings release (link opens PDF). Unlike 3M, moreover, UPS reaffirmed its guidance for the remainder of the year. According to its chief financial officer, "Although macro uncertainty remains, we are reaffirming our 2013 guidance for full year adjusted diluted earnings per share to be within a range of $4.80 to $5.06."

Speaking of e-commerce, Amazon.com is scheduled to report its own results after the closing bell today. The consensus estimate on its earnings is for $0.28 per share, roughly in line with last year.

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Can Clayton Williams Energy Meet These Numbers?

Clayton Williams Energy (Nasdaq: CWEI  ) is expected to report Q1 earnings around April 24. Here's what Wall Street wants to see:

The 10-second takeaway
Comparing the upcoming quarter to the prior-year quarter, average analyst estimates predict Clayton Williams Energy's revenues will decrease -8.9% and EPS will shrink -32.8%.

The average estimate for revenue is $99.4 million. On the bottom line, the average EPS estimate is $0.43.

Revenue details
Last quarter, Clayton Williams Energy logged revenue of $101.6 million. GAAP reported sales were 4.6% lower than the prior-year quarter's $105.5 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
Last quarter, EPS came in at $0.14. GAAP EPS were $0.14 for Q4 against -$1.28 per share for the prior-year quarter.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Recent performance
For the preceding quarter, gross margin was 63.7%, much worse than the prior-year quarter. Operating margin was 14.5%, much better than the prior-year quarter. Net margin was 1.7%, much better than the prior-year quarter.

Looking ahead

The full year's average estimate for revenue is $409.4 million. The average EPS estimate is $2.10.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 204 members out of 223 rating the stock outperform, and 19 members rating it underperform. Among 48 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 42 give Clayton Williams Energy a green thumbs-up, and six give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Clayton Williams Energy is outperform, with an average price target of $65.25.

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Add Clayton Williams Energy to My Watchlist.

GM's 2014 Silverado Is No. 1

Ford (NYSE: F  ) has enjoyed years of success with the F-Series, which remain America's best-selling vehicles. That status is something General Motors (NYSE: GM  ) aims to change with the 2014 Silverado. In an industry that sees vehicle makeovers every two to three years, the Silverado is considered a dinosaur -- the last redesign was completed back in 2006. Yet there's no doubt that the 2014 Chevy Silverado will mark the No. 1 most important vehicle launch since the automaker went bankrupt. Here's what you need to know.

Just how important is the Silverado?
Now that it's mostly done dealing with the aftereffects of its $50 billion U.S. taxpayer-funded bailout, GM is spending capital to redesign its vehicle portfolio. It's been estimated that GM invested between $3 billion and $4 billion to develop these new trucks and engines. That's a lot of money invested that won't be evident from the trucks' outside appearance, as the design remains very similar. 

Source: General Motors Media Photos.

The money spent will, however, be evident from both an investing and consumer standpoint. GM is updating the interior with plenty of technology innovations, as well as upgrading the gas mileage with its line of EcoTec engines. For investors in particular, money put into revamping the plants where the trucks are built will help improve operating efficiencies and profits per vehicle. It's all part of the CEO's plan to clone its rival's "One Ford" strategy and raise operating margins in the U.S. to 10%.

Doing it right the first time
It's incredibly important for management not to rush this launch and to do it right the first time. Chevy's 2014 Silverado will have a year's head start before the next-generation F-150 is released and can use a surging pickup segment to win back lost market share. Here's what GM Global product development chief Mary Barra had to say about the launch:

"I'm very confident that everything's on track and moving forward. ... It's been the most rigorous process we've gone through to make sure we put a high-quality truck into the marketplace, day one. ... [The launch is] going to be shortly." 

The current models are estimated to generate up to $12,000 of profit per vehicle, but with the Silverado's old age, GM has to increase incentives to succeed against its competitors. Investors can expect margins and profits to improve with the new model.

Inventory
GM's management will have to carefully control the 2013 Silverado inventory, which spiked early this year. GM decided it won't increase pricing on the 2014 model, which is an aggressive move and will make selling old 2013 models more dependent on a major boost in incentives. In other words, GM could be stuck with less favorable options to move the old trucks off the dealer lots. Correctly timing the launch of the new model while winding down current inventories will be key to considering this launch a success.

Bottom line
GM's past management ran the company into the ground before the recession came along and finished the job. With a new crew running the ship, things have steadily improved, albeit more slowly than at rival Ford. By 2016, GM is going to replace, refresh, or redesign 90% of its vehicles, and proving to investors in the meantime that it can have successful vehicle launches could boost demand for its stock. GM wants to avoid ugly recalls shortly after the release of its vehicles -- as Ford encountered with the popular Fusion and Escape models -- and it certainly wants to avoid taking too long to get finished products to the lots, which is what happened with the Lincoln MKZ.

In short, this is the single most important launch for GM in the past 10 years. The world is watching, and as an investor, I hope GM does it right the first time.

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2 New Dividend Payers That May Take Off

As a longtime follower of Amy Calistri's Daily Paycheck and Carla Pasternak's High-Yield Investing, I am well aware of the importance of dividend yield and reinvestment as the key to a successful retirement plan.

 

Dividend reinvestment can mean the difference between a comfortable retirement and a stressful one. Investing in companies with strong records of dividend increases and then reinvesting the proceeds is a surefire way to quickly build your portfolio.

Although more speculative than purchasing the proven dividend producers, I like to look off the beaten track for companies that have recently started paying dividends and have large cash reserves. In addition, the companies that catch my interest are either growing rapidly or are undergoing changes that may enable steady growth and increased dividend payouts over time.

With this in mind, here are two stocks that could soon turn into dividend machines.

Dunkin' Brands Group (Nasdaq: DNKN)
This company is famous for its Dunkin' Donuts and Baskin-Robbins franchises. In many areas of the U.S., Dunkin' Donuts rivals Starbucks (NYSE: SBUX) as the top coffee chain.

Founded in the 1950s, the company went public in 2011 at $19 a share. Shares have since doubled to a recent price near $40.

What I like most about Dunkin' Brands is its franchise-expansion method. This expansion tactic relies on the cash infusion of the individual franchisees to fuel growth. This means the company is able to return its excess cash to shareholders in the form a dividend rather than burning it in expansion efforts.

Dunkin' began paying a dividend last year and increased it by 27% in January. The dividend is currently 76 cents a share with a 2% yield. This may seem low, but profits are expected to increase by 15% during the next several years. The dividend is likely to increase along with profits. Technically, the company has been in a steady uptrend since mid-November.

Supported by the 50-day moving average, the stock has just tested support, bouncing higher. This creates a solid technical entry level with a 12-month target price of $43.

True Religion Apparel (Nasdaq: TRLG)
If you spend any time at your local mall, you are probably aware of True Religion jeans.

Having a cultlike following befitting its unusual name, True Religion operates 122 U.S. retail stores with a presence in 50 countries on six continents. Founded in 2002, the company has struggled recently to remain relevant in the face of heavy competition.

Last quarter, the company was able to squeeze out a 1.5% increase in comparable sales, but that came after a 4.7% drop in the previous quarter. Founder Jerry Lubell recently stepped down as CEO, providing the company a chance to re-evaluate its strategy.

I like that True Religion is forecasting 20% growth in international revenue and is planning to open 14 new international locations this year. Despite its struggles, the company boasts $200 million in cash and had sales of $467 million last year. This copious cash hoard equals $8.50 per share.

True Religion began paying a quarterly dividend of 2 cents a share in May 2012. If the new CEO can refocus the company on its roots in the moneymaking denim jeans market, and the international expansion turns out as expected, the dividend will have room to grow.

In addition, the company has begun a strategic review that includes a possible sale at up to $37 per share. Technically, the stock has hit resistance at $28. A breakout close above this level and a 12-month target price of $33 makes sense.

Risks to Consider: Even the most solid of companies can suffer from unexpected happenings. Dunkin' Brands is the less risky of the two companies. In contrast, the cultlike following of True Religion, combined with its management changes and possible buyout, makes it a tempting, if speculative, investment. Always use stops and position size properly when investing.

Action to Take --> I like Dunkin' Brands as a long-term hold. True Religion is a speculative play, suitable only for risk-embracing investors, but the jeans maker has major upside in terms of growth and dividends.

P.S. - Companies are able to pay dividends due to having excess cash to distribute to shareholders. In fact, corporate America is sitting on a $1.7 trillion "Dividend Vault" that has grown so large, companies will inevitably have to start paying this money to shareholders. To learn more about the "Dividend Vault" -- and how it just might save your retirement -- click here.

Japan Stocks Advance Ahead of BOJ Meeting: Canon Declines

April 25 (Bloomberg) --Japanese shares rose, with the Nikkei 225 (NKY) Stock Average advancing for a second day to its highest since 2008, before a Bank of Japan (8301) meeting. Canon Inc. (7751) and Nintendo Co. fell on disappointing earnings.

Mitsubishi UFJ Financial Group Inc., Japan's biggest lender, advanced 2.2 percent. Nippon Electric Glass Co. jumped 7.1 percent after industry bellwether Corning Inc. forecast growth for a product used in smartphones. Canon tumbled the most on the Nikkei 225 after projecting net income lower than analyst estimates on slumping demand for compact cameras. Nintendo lost 5.9 percent after the world's biggest maker of video-game consoles posted profit that missed analyst estimates.

The Nikkei 225 gained 0.6 percent to close at 13,926.08 in Tokyo. Volume on the measure was about 15 percent above than the 30-day average. The Topix Index (TPX) rose 0.7 percent to 1,172.78, with twice the number of stocks gaining as falling on the 1,698- member gauge.

"A weaker yen is helping Japanese companies, but you need to look at each stock to figure out if the yen's drop is coming on top of a company's solid business," said Toshihiko Matsuno, a strategist at Tokyo-based SMBC Friend Securities Co., a unit of Sumitomo Mitsui Financial Group Inc., Japan's second-biggest lender by market value.

The Topix advanced 62 percent since mid-November as Prime Minister Shinzo Abe and central bank Governor Haruhiko Kuroda pledged to defeat 15 years of deflation. The gauge trades at 1.3 times book value compared with 2.3 for the Standard & Poor's 500 Index and 1.6 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

Inflation Outlook

The central bank may upgrade its view on price gains excluding fresh food to at least 1.5 percent from 0.9 percent for fiscal 2014 in its next forecast update tomorrow, people familiar with the central bank's discussions said.

Japan's three biggest banks, Mitsubishi UFJ, Sumitomo Mitsui Financial Group Inc. and Mizuho Financial Group Inc. were among the biggest boosts to the Topix. BNP Paribas SA raised its outlook on the Japanese banking sector to "improving," citing gains in sales of equity holdings as stocks rally.

The Topix sub-group tracking banks advanced 2.3 percent, the third-biggest gain among the gauge's 33 industry groups.

Nippon Electric Glass, Japan's second-biggest glassmaker by market value, jumped 7.1 percent to 525. U.S.-based Corning, a leading maker of glass for flat-panel televisions, phones and tablets, forecast growth in its telecommunications products as it benefits from surging sales of smartphones and tablets.

Honda Motor Co. and Nomura Holdings Inc. are among more than 100 companies on the Topix due to report earnings tomorrow, according to data compiled by Bloomberg. Of the 233 companies that have posted results so far this month and for which Bloomberg has estimates, 47 percent have missed projections, while 44 beat them, the data show.

Canon and Nintendo were the two biggest drags on the Topix, countering gains by Toyota Motor Corp. Of the 233 companies that have posted results so far this month and for which Bloomberg has estimates, 47 percent have missed projections, while 44 beat them, the data show.

Smartphone Pressure

Canon dropped 6.4 percent to 3,595 yen, its biggest drop since July, after forecasting net income of 290 billion yen ($2.9 billion) in 2013, missing the 308 billion-yen average of 20 analyst estimates compiled by Bloomberg. Canon cut its sales target for compact cameras because consumers increasingly use smartphones to snap pictures.

Nintendo slumped 5.9 percent to 11,240 yen, its biggest drop since September 2011 after the game maker reported its second straight operating loss as it sold less than its 4 million-unit sales target for Wii U consoles.

Foreigners, which account for about 55 percent of volume traded on the Tokyo Stock Exchange, were net sellers of Japanese stocks in the week ended April 19, just the second time overseas investors sold more than they bought since mid-November. The Topix sank 1.9 percent last week, and is headed for a 3.5 percent gain this week.

"Foreign capital is likely to keep flowing into Japanese stocks on optimism the market will keep rising," said Mitsushige Akino, chief fund manager at Ichiyoshi Asset Management Co. in Tokyo. "It's unlikely earnings will boost the whole market because they're mostly in-line with expectations."

The Nikkei Stock Average Volatility Index gained 0.6 percent to 25.79 today, indicating traders expect a swing of about 7.4 percent on the benchmark gauge over the next 30 days.

Medical Properties Trust Q1 Net Up Nearly 150%

It was an impressive quarter for Medical Properties Trust (NYSE: MPW  ) . In its Q1 report, revenues amounted to $58 million, up 42% from the $41 million in the same period the previous year. Attributable net profit advanced much more strongly, growing 148% to $26 million ($0.18 per diluted share) from Q1 2012's figure of $11 million ($0.08). Funds from operations -- a key metric for real estate investment trusts -- came in at $35 million ($0.25 per diluted share) on a normalized basis, compared with $22 million ($0.18) in the year-ago quarter.

Medical Properties Trust also provided selected forward guidance. It believes it will post a normalized FFO of $1.10 per share in fiscal 2013.

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Alcatel-Lucent Reports Flattish Sales, Return to Losses

French-American communications equipment giant Alcatel-Lucent (NYSE: ALU  ) reported its Q1 2013 financial results Friday.

Characterizing the results as showing "continued progress with The Performance Program," the company announced that revenues increased 0.6% in Q1 2013 over Q1 2012 levels, rising to 3,226 million euros ($4.2 billion).

Net losses for the quarter came to 353 million euros ($460 million), of which approximately one-third, 122 million euros, came from restructuring charges. On a per-share basis, this worked out to 16 euro cents lost per share, vs. last year's 10 cent euro profit. The company continued to burn cash as well, with operating cash flow running negative to the tune of 144 million euros before deducting capital expenditures.

Commenting on the last figure, Alcatel CEO Michel Combes observed: "Free cash-flow remains a challenge."

Alcatel shares are trading down on the NYSE today, off 3.2% at $1.36 per share in response to the news.

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Baidu Drops Almost 9% on Q1 Earnings

Baidu  (NASDAQ: BIDU  ) shares dropped 8.5% before the market opened Friday after missing first quarter revenue and earnings estimates.

While Baidu increased its revenues 40% over the same time last period, sales only amounted to $961 million -- $8 million less than the analyst estimates of $969 million. Earnings per share also fell behind analyst estimates. Instead of taking in $1.03 per share, the company saw $0.95 earnings per share.

Altogether, total net income was $329 million, resulting in a net margin of 34%. Expenses that may caused the company to miss its net income are selling, general, and administrative expenses, and research and development costs. Compared to the same time in 2012, SG&A expenses rose 77%, to $136.6 million. Meanwhile, R&D costs increased 83%, to $131 million.

In the company's press release, Baidu did not mention specific reasons as to why revenues or earnings dipped. Instead, the executives tried to get investors focused on the long term.

CEO, chairman, and co-founder Robin Li said that investments into Baidu's mobile ecosystem are still making progress. So far, they've seen over 100 million daily active users on its mobile search product -- an increase of moe than 25% from last quarter. He also said: "Our focus will remain on tightly integrating our leading search core with valuable vertical products in areas such as travel, e-commerce and location based services to bring users the information they want as quickly as possible on both desktop and mobile devices."

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2014 Tundra Looks to Top Detroit's Trucks

Good news for Detroit: Full-size truck sales are up 23% in the first quarter and are approaching levels not seen since the recession tanked U.S. vehicle sales. Detroit's Big Three automakers -- Ford (NYSE: F  ) , General Motors (NYSE: GM  ) and Chrysler -- completely dominate this market and have accounted for 93% of full-size truck sales this year through March. And Detroit wants to keep it this way, since the majority of its profits come from this segment.

They'll have to keep an eye on Toyota (NYSE: TM  ) , which is trying to make a push with its 2014 Tundra to increase its 5.4% market share. In the past, Toyota has had very little success taking share away from Detroit, but this year could be different, as the new Tundra rolls out in the fall. Here's what investors need to know.

Source: Toyota.

Abolished tariffs
During the recent Trans-Pacific Partnership trade negotiations, the U.S. government agreed to gradually abolish all tariffs currently in place on Japanese vehicles entering the U.S. market, including the 2.5% tariff on each vehicle brought in and 25% on every truck. In an industry that has margins in the single digits, those tariffs can mean a huge difference in profitability and vehicle pricing.

Devalued yen
There's another recent advantage for Japanese vehicles that adds to Detroit's worries. Over the past few months, the yen has fallen pretty significantly against the U.S. dollar. That means Toyota and Honda have a financial advantage on every vehicle sold in the U.S. market. Toyota exports more than 2 million vehicles a year, and each one becomes more profitable by the day as the yen falls. Morgan Stanley believes the advantage to be equivalent to about $1,500 per car, while Detroit thinks the figure is closer to $5,700 per vehicle. 

Ball in Toyota's court
It's up to Toyota to decide how it wants to use these advantages. It's had such little success breaking into the Detroit-dominated full-size pickup segment that it might opt to use the abolished tariff and devalued yen to drop prices significantly on its new Tundra, giving price-conscious consumers a reason to try it out. The timing couldn't be better for Toyota to make a push for more market share, either: Not only does it have a year before the next-generation Ford F-150 -- the No. 1 selling truck for 36 years -- hits the market, but also the average age of trucks on the road is 13 years, and gas prices are sliding downward. That could be all consumers need to finally bring them into the dealerships.

Detroit's reaction
Detroit is obviously not happy about this development, and it's using all the leverage it can to have the government reconsider its decision to slowly abolish tariffs. So far, the pleas are falling on deaf ears, and that could be the reason GM's 2014 redesigned Chevy Silverado won't see a price increase when it replaces the previous-generation truck -- an unusually aggressive decision.

This is the most important vehicle segment to Detroit's companies, and Toyota has been desperate to claim more of the immense profits. Investors will need to keep an eye on how Toyota plays its cards and how the new Tundra sells this fall when it's released. If Toyota gets aggressive, it could do some damage to Detroit's bottom lines.

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Why Cabela's Shares Shot Higher

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

What: Cabela's (NYSE: CAB  ) shot perfect once again this quarter, as shares jumped as much as 18% after another strong report.

So what: The sportsmen's outfitter topped earnings estimates by $0.11 a share, posting $0.70 for the period, and revenue jumped a whopping 28.7% to $802.5 million, 4% better that expert's prediction. The vast majority of additional revenue came from same-store sales, which shot up 24%. Management said the growth was driven by expected increases in firearms and ammunition sales, as well as soft goods, footwear, optics, and archery.

Now what: Without firearms and ammunition, same-stores sales increased just 9% -- still strong, but clearly much of Cabela's growth was driven by gun buyers. With the gun hysteria following the Sandy Hook shootings likely to fade now that the Senate has failed to pass any sort of gun control, investors may expect that growth to slow. As the stock has now tripled in the past year and a half, investors may want to take a cue from their senators and sell while the stock is hot.

Don't miss the next update on Cabela's. Add the stock to your Watchlist by clicking right here.

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Sell Home Depot Stock, Buy Trex and Lumber Liquidators

Shares of Lumber Liquidators (NYSE: LL  ) soared 12% yesterday -- and have continued to hit new all-time highs this morning -- after posting blowout quarterly results.

The hardwood flooring retailer saw net sales soar 22.5%, to $230.4 million during the first quarter, fueled by a 15.2% spike in comps. Margins expanded, and profitability nearly doubled, to $0.57 a share. Wall Street didn't have a clue. The pros were projecting a profit of $0.42 a share on $215.5 million in revenue.

The market should be used to this by now: Lumber Liquidators has beaten Wall Street's bottom-line targets by 16% or better every quarter for the past year. The chain of nearly 300 stores that specializes in hardwood planks and other flooring options raised its guidance, but we know the drill. Lumber Liquidators is going to make analysts look silly again in three months.

The report naturally bodes well for Trex (NYSE: TREX  ) . The leading provider of wood-alternative decking posts next week, and what's good for one has been good for the other. Trex has also blasted through Wall Street estimates, beating quarterly profit targets by a double-digit percentage margin every single period over the past year.

It's easy to see the appeal to Lumber Liquidators and Trex. They are thinking-investor plays on the housing market's recovery. As real estate prices rise, and homeowners discover that they finally have equity in their homes, it's easy to take on the dream to upgrade a property's flooring, or extend a home's living space by building an outdoor patio with weather-resistant materials.

Most investors will ignore Trex and Lumber Liquidators. They'll turn to Home Depot (NYSE: HD  ) and Lowe's (NYSE: LOW  ) as the big plays on home improvement, and that could be a mistake. Even in this market recovery, analysts see Home Depot and Lowe's growing revenue at a 3% to 4% clip this year and next year. Lumber Liquidators and Trex are expected to expand their sales three to four times faster.

It's true that Lumber Liquidators and Trex aren't as cheap as they used to be, but their near-term prospects are brighter than the superstore chains that aren't exactly bargains, either.

Home Depot stock is trading for 21 times this year's earnings. Faster-growing Trex is fetching just 18 times this year's projected profitability, and that's in line with the multiple at Lowe's. Lumber Liquidators commands the richest premium at nearly 40 times the midpoint of its new bottom-line guidance for this year.

The valuations are lofty across all four players, but at a time when the market is dishing out healthy premiums, the smarter bet has to be the companies that are growing faster. Trex and Lumber Liquidators are the ones to watch here.

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Don't Wait to Buy Ford Stock

If you've spent some time trying to find the next undervalued stock with a bright future, chances are you've at least scratched the surface of Ford's (NYSE: F  ) stock. There's plenty to be excited about between its sales success with new models, growing economies of scale, and its plan for the future in China. In Motley Fool's quest to help the world invest better, I think it's time to put in perspective how big the opportunity in China really is. Not only that, I'll give some insight on how much this could grow Ford revenues.

Just how big?
Let's look at the remaining potential of China's automotive market using cars to people ratio. In Europe there is one car for every two people while in China the ratio is one car for every 20 people. Looking at the three major markets – Europe, U.S., and China – sales in 2012 reached just over 12 million, 14.5 million, and 19.3 million, respectively. From here on out China's growth is substantially larger as the car to people ratio narrows. In 2020 sales are estimated to be around 15 million, 20 million, and 31 million, again respectively. So over the next seven years China is essentially creating a market the size of Europe. That's a welcome notion for investors since the real Europe market is currently imploding.

Ford's plan
This isn't new information to automakers who are all racing to get their piece of China's growing pie. Ford is spending upwards of $5 billion in the region to meet its goal of doubling its market share from 3% to 6% by mid-decade. Last year Ford set a sales record in China topping 625,000 units sold – up 21% from 2011. Let's assume Ford simply meets its 6% goal, and to be cautious we'll say it even takes five years longer than expected. That would bring its 2020 sales in China to 1.86 million units – more than triple today's levels. Ford plans to execute this with a slew of new models that have garnered much interest from Chinese consumers.

"Record 2012 sales highlight the positive response our customers have for our full portfolio of high-quality, safe, fuel-efficient and smart vehicles," said John Lawler, chairman and CEO of Ford Motor China. "Their enthusiasm for Ford cars validates our aggressive plan to introduce 15 new vehicles, double production capacity, and double our China dealership network—all by 2015." Here's something I found very interesting. 

China doesn't want Chinese
Ford remains well behind rival General Motors (NYSE: GM  ) and Volkswagen market share in China. Of the 10 top-selling vehicles, four models are Volkswagen's, three are GM's and only one is a Ford – albeit the Focus is China's most popular model. Ford has a chance to gain market share a little faster because Chinese consumers remain unimpressed with domestic brands and are avoiding a "Made in China" label. A study by Sanford Bernstein showed Chinese automakers market share declined to 26% in 2012.

Bottom line
Right now the fact of the matter is that Ford's bottom-line profits are completely driven by profits in the U.S. and losses in Europe. By 2020 Ford will have made great progress in China, potentially adding up to $2 billion in net income per year. At the same point in time, Europe – where Ford lost $1.7 billion last year – will have hopefully returned to some form of profitability for the company. If the previous statements hold true and the U.S. continues to release its pent-up demand for new vehicles, Ford's stock in 2020 could be sitting at record heights.

Worried about Ford?
If you're concerned that Ford's turnaround has run its course, relax – there's good reason to think that the Blue Oval still has big growth opportunities ahead. We've outlined those opportunities in detail, in the Fool's premium Ford research service. If you're looking for some freshly updated guidance to Ford's prospects in coming years, you've come to the right place – click here to get started now.

3 Reasons Why Apple Investors Should Love This Buyback Announcement

On Tuesday afternoon, Apple (NASDAQ: AAPL  ) announced that it would more than double the size of its cash-return program to $100 billion through the end of 2015, up from $45 billion. Many Apple investors -- including myself -- have been calling for Apple to return more cash to shareholders, and Tuesday's announcement followed through in a big way. First, Apple raised its quarterly dividend from $2.65 per share to $3.05 per share, beginning with next month's payment. Based on Apple's Tuesday closing price of $406.13, that corresponds to an annual yield of 3%.

Most importantly, Apple increased its share repurchase program from $10 billion to $60 billion. Apple plans to borrow some of the money necessary to execute this buyback, because while the company has $145 billion of cash and investments, most of this cash is held overseas and would be subject to a repatriation tax if used for share repurchases. Here are three reasons why Apple shareholders should be thrilled about this series of announcements.

1. You can stop worrying about the stock price.
While we are all about buy-and-hold investing here at the Fool, it's understandable for investors to become frustrated when a stock's price drops significantly. However, with Apple planning a large share buyback -- equal to roughly 15% of the company's shares at current prices -- there is a silver lining for investors. The cheaper the stock is, the more shares Apple will be able to repurchase, thereby boosting future EPS. The increased dividend also gives investors a more immediate reward for waiting. As long as Apple's long-term prospects remain intact, there's no need to worry about short-term stock price movements. Even investing legend Warren Buffett endorsed this strategy for Apple, saying that buying back shares when the price goes down helps build long-term value.

2. Apple will save cash.
Counterintuitively, taking on debt to buy back shares could save money for Apple. With the dividend now yielding 3%, there is a good chance that Apple will be able to float bonds with an interest rate below the dividend yield. For example, Microsoft (NASDAQ: MSFT  ) has taken advantage of its perfect AAA credit rating to issue debt on several occasions in recent years, frequently using the proceeds for share repurchases. In November, Microsoft priced five-year bonds at a 0.875% interest rate and 10-year bonds at a 2.125% rate.

Apple was assigned an AA+ credit rating by Standard & Poor's (and the equivalent Aa1 rating by Moody's), just one notch below Microsoft -- and at the same level as the federal government. For every $10 billion of stock Apple repurchases, it will save $300 million in annual dividend payments (based on Tuesday's closing price). If Apple can achieve a blended interest rate of 2%, it would only pay $200 million of annual interest for every $10 billion borrowed. (That interest would also be tax deductible for Apple, whereas dividend payments are not.) Rather than imposing a financial burden on Apple, debt-financed stock repurchases will actually help Apple's cash flow after accounting for dividends.

3. It's a show of confidence.
Finally, Apple's decision to turbo-charge its share buyback program shows that management is confident in the company's long-term prospects, and believes the stock is currently cheap. While Apple reported its first year-over-year earnings decline in a decade for Q2, and provided fairly bleak guidance for the June quarter, CEO Tim Cook sounded optimistic about the company's upcoming products on the company's earnings call.

Management's decision to buy back shares is obviously no guarantee that earnings will improve, or that the stock will go up. Microsoft returned more than $100 billion to shareholders from 2004-2008, and has continued to return cash fairly aggressively, but the stock has still dramatically underperformed the market over the past 10 years:

Microsoft Total Return vs. the S&P 500. Data by YCharts.

Apple investors should nevertheless be thankful for Tim Cook's confidence; it would be much more disturbing if management stated that it needed to conserve all its cash in order to fend off threats to its business.

A good decision
Apple may not be the Wall Street darling it was at this time last year, but it is still a strong company with desirable, differentiated products. The company's move to return cash to shareholders should boost long-term returns while also indicating management's confidence in the future. For Apple investors, that is definitely welcome news.

There's no doubt that Apple is at the center of technology's largest revolution ever, and that longtime shareholders have been handsomely rewarded with over 1,000% gains. However, there is a debate raging as to whether Apple remains a buy. The Motley Fool's senior technology analyst and managing bureau chief, Eric Bleeker, is prepared to fill you in on both reasons to buy and reasons to sell Apple, and what opportunities are left for the company (and your portfolio) going forward. To get instant access to his latest thinking on Apple, simply click here now.

Boeing Stock Is Trouncing the Dow

The Dow Jones Industrial Average (DJINDICES: ^DJI  ) is down slightly following some mixed earnings releases and a weaker-than-expected durable-goods report. As of 1:15 p.m. EDT the Dow is down 24 points, or 0.16%, to 14,695. The S&P 500 (SNPINDEX: ^GSPC  ) is up a single point to 1,580.

The only U.S. economic release today was the Department of Commerce's advance report on durable goods for March. Durable goods are goods meant to last more than three years, and new orders for them are seen as a leading indicator of manufacturing activity. New orders fell by 5.7% in March to $216.3 billion, worse than analyst expectations of a 3.2% drop.

U.S. Durable-Goods New Orders data by YCharts.

The durable-goods report can be highly volatile, especially because of orders for aircraft. Excluding transportation, new orders decreased just 1.4% -- still not good for the stuttering recovery. Boeing (NYSE: BA  ) was one of the main culprits, as new orders for nondefense aircraft and parts dropped 48% in March. Boeing reported just 39 orders for aircraft in March, down from February's outstanding 179.

Holding the Dow back today, though, are disappointing earnings from AT&T (NYSE: T  ) and Procter & Gamble (NYSE: PG  ) , which are both down more than 5%. AT&T reported earnings that met expectations but showed that the company lost market share to Verizon.

Today's Dow leader
Despite its low March order numbers, Boeing is leading the Dow today, up 3.3% thanks to an upside surprise in its earnings. Boeing reported that earnings per share grew 18% to $1.44, while revenue fell just 3% to $18.89 billion, beating expectations of $18.84 billion. The company reaffirmed its guidance for full-year EPS of $5 to $5.20.

The first quarter was rough for Boeing, as its 787 Dreamliner was grounded by the FAA in mid-January due to problems with the aircraft's batteries. Last week the FAA approved Boeing's battery fix, and on today's conference call CEO Jim McNerney said the company expects to resume deliveries of 787s next month and to deliver more than 60 Dreamliners through the rest of the year.

The company also announced today it will begin buying back stock under its previously announced buyback authorization. This is a bittersweet announcement, as it would have been better for Boeing shareholders if the company had bought back at the low prices available amid last quarter's uncertainty, rather than waiting until things had begun to look up and Boeing stock had gained $20.

Boeing is a major player in a multitrillion-dollar market in which the opportunities are absolutely massive. However, emerging competitors and the company's execution problems have investors wondering whether Boeing will live up to its shareholder responsibilities. In our premium research report on the company, two of The Motley Fool's best industrial-sector minds have collaborated to provide investors with the must-know info on Boeing. They'll be updating the report as key news hits, so don't miss out -- simply click here now to claim your copy today.

Dow Aims High as Ford and Procter & Gamble Beat the Street

LONDON -- Stock index futures at 7 a.m. EDT indicate that the Dow Jones Industrial Average (DJINDICES: ^DJI  ) may open up by 0.23% this morning, while the S&P 500 (SNPINDEX: ^GSPC  ) may open 0.11% higher. After posting sharp falls recently, CNN's Fear & Greed Index closed up four points at 46 yesterday, returning to "neutral" territory.

This morning's main European news story was that Italy will soon have a new prime minister: The appointment of Enrico Letta, who is a member of the center-left Democratic Party, is expected to be confirmed later today. European markets stayed firm this morning despite a second monthly fall for Germany's Ifo business confidence index suggesting that Europe's largest economy is slowing. Many commentators now believe the current stock market gains are being driven by hopes that the European Central Bank will cut interest rates at its monthly meeting in May.

In the U.S., today sees the publication of the durable-goods orders report for March at 8:30 a.m. EDT. Analysts' consensus forecasts suggest that orders may have fallen by 3.2% during March after rising by 5.6% during the previous month. Other data due today includes the EIA Petroleum Status Report at 10:30 a.m. EDT, which could influence oil prices after recent falls.

Kicking off a big day for earnings, Procter & Gamble reported adjusted earnings per share of $0.99, up 5% from $0.94 in the same period last year. Other companies that reported early this morning include Eli Lilly, which beat forecasts with earnings of $1.42 per share, and Ford, which beat expectations as well with reported earnings of $0.40 per share, up 14% from the same period last year. Whirlpool, Thermo Fisher Scientific, EMC Corp, and Wyndham Worldwide also reported earnings growth this morning, while Boeing, Sprint Nextel, Motorola Solutions, Northrop Grumman, General Dynamics, and Praxair are also due to report before the opening bell.

Yum! Brands may be actively traded when markets open. KFC's parent company beat expectations when it reported earnings last night, leaving the shares 4.8% higher in premarket trading this morning. AT&T may head lower, however: Its shares were down 4% in premarket trading after the company reported last night that it had lost cell phone market share to Verizon Wireless during the first quarter.

Finally, let's not forget that the Dow's daily movements can add up to serious long-term gains. Indeed, Warren Buffett recently wrote, "The Dow advanced from 66 to 11,497 in the 20th Century, a staggering 17,320% increase that materialized despite four costly wars, a Great Depression and many recessions." If you, like Buffett, are convinced of the long-term power of the Dow, you should read "5 Stocks To Retire On." Your long-term wealth could be transformed, even in this uncertain economy. Simply click here now to download this free, no-obligation report.

Investors Reward Citigroup Today

The financial sector is lit up bright green this Tuesday mid-day, continuing its climb from the second half of the day yesterday. The early part of the day wasn't kind to big banks, which made me wonder why investors were punishing Citigroup (NYSE: C  ) , especially after its positive earnings report early last week.

With big banks like Citi, Bank of America (NYSE: BAC  ) , Wells Fargo (NYSE: WFC  ) , and JPMorgan Chase (NYSE: JPM  ) having reported earnings, perhaps the market has had enough time to digest all this new information. Bank of America's report, in particular, seemed to have a roiling effect on the financial sector, despite the fact that it wasn't half bad at all.

But what a difference a day makes. Citi is moving up nicely, as is the whole sector. Bank of America is leading the way, as its share price moves up to and over the $12 mark, a rise of more than 3%. Citigroup is nearly matching that pace, so far racking up a 2.9% rise about half an hour before lunch time.

Will this forward momentum last? The market can be fickle, certainly. But, when it comes to Citigroup, investors are doubtless rewarding the big bank for the progress it has made over the past year, aptly reflected in its first-quarter earnings report.

One thing that became abundantly clear was the fact that Citi is fast becoming a mover and shaker in the mergers and acquisitions and investment banking business, something that shows no signs of abating. With the shrinking of troublesome Citi Holdings, as well as other cost-cutting measures, the bank's expenses are being brought under control. With new CEO Michael Corbat at the helm, things are definitely looking up.

Like Bank of America, Citi seems to be more willing to show its softer side these days, too. Ahead of its shareholders' meeting, the bank has invited Mike Mayo, the often-outspoken CSLA analyst, to have a private chat with Corbat. Mayo had to demur, but the offer indicates that Citi wants this year's annual meeting to be friendlier than the last, when shareholders voted down then-CEO Vikram Pandit's pay package. Unruffling Mayo's feathers ahead of time -- he is expected to have a list of tough questions for the bank's management -- was obviously tops on Citi's agenda.

With all the positive changes at Citi since last year's meeting, however, things should go much more smoothly.

Citi is flying high today, but tomorrow could paint an entirely different picture. As Foolish, long-term investors, we recognize the fact that one-day changes in share price don't make or break an investment. Even stocks have good days and bad days, so it's important to realize that sometimes they're not portents of dire news, but merely squiggles that we can safely ignore. 

Citigroup's stock looks tantalizingly cheap. Yet the bank's balance sheet is still in need of more repair, and there's a considerable amount of uncertainty after a shocking management shakeup. Should investors be treading carefully, or jumping on an opportunity to buy? To help figure out whether Citigroup deserves a spot on your watchlist, I invite you to read our premium research report on the bank today. We'll fill you in on both reasons to buy and reasons to sell Citigroup, and what areas that Citigroup investors need to watch going forward. Click here now for instant access to our best expert's take on Citigroup.

Western Digital Starts Shipping Ultra-Thin Drives

Today, Western Digital (NASDAQ: WDC  ) will begin shipping the world's first 2.5-inch, 5mm WD Blue hard drives and new WD Black solid state drives. According to the company, "With 500 GB of storage capacity and models with high performance-enabling solid state hybrid drive technology, this slim product line helps to address the trade-offs system designers often make between capacity, physical size and performance."

Both the Blue and Black version of the drives are 5mm thick and are designed to increase the internal storage capacity for smaller devices. The company said consumers often put more hard drive stress on smaller devices, so Western Digital came up with the following solutions in its new drives:

The weight has been reduced by up to 36%, compared to a standard 9.5mm drive "Unprecedented" 400G shock protection when the drive is active and 1000G protection when the drive is inactive to keep the drive from being damaged Edge Card technology uses small cell phone technologies that maximize mechanical sway space within the drive Enhanced vibration and stabilization of the drive

The WD Blue drive has an MSRP of $89 and the WD Black solid state drives are currently available to OEMs.

 

Why ARM Holdings Shares Skyrocketed

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

What: Shares of British chip designer ARM Holdings (NASDAQ: ARMH  ) have skyrocketed by as much as 11% today after the company reported solid first-quarter earnings.

So what: Revenue in the first quarter totaled $263.9 million, easily topping the Street forecast of $251.1 million. Adjusted earnings per share came in at $0.24, again ahead of the consensus estimate of $0.21. The company said it inked 22 processor licenses in the first quarter across numerous end markets.

Now what: Royalty-bearing chip shipments grew 35% to 2.6 billion units, which was driven largely by mobile and embedded chips. CEO Warren East, who announced last month that he would retire this summer, said that ARM saw record royalty revenue this quarter and there has been strong uptake of its next-generation processors. ARM's guidance for the second quarter calls for revenue to be in-line with the "market expectations."

Interested in more info on ARM Holdings? Add it to your watchlist by clicking here.

It's incredible to think just how much of our digital and technological lives are almost entirely shaped and molded by just a handful of companies. Find out "Who Will Win the War Between the 5 Biggest Tech Stocks?" in The Motley Fool's latest free report, which details the knock-down, drag-out battle being waged by the five kings of tech. Click here to keep reading.