Sunday, June 30, 2013

Google Brings Stock Android to Samsung and HTC

Probably in an effort to address its fragmentation problem, Google (NASDAQ: GOOG  ) will begin selling a version of the Samsung Galaxy S4 and HTC One that runs "clean" versions of Android, unfettered by build-ons offered from the respective smartphone makers. The devices will come directly from Google, meaning they won't be eligible for carrier subsidies, nor will they have attached contracts. Only T-Mobile and AT&T will be picking up coverage for these devices.

In the following video, Fool.com contributor Doug Ehrman discusses the motivation behind selling these versions of the most popular Android devices, Google's plans for its own hardware, and why these options make sense.

Want to get in on the smartphone phenomenon? Truth be told, one company sits at the crossroads of smartphone technology as we know it. It's not your typical household name, either. In fact, you've probably never even heard of it. But it stands to reap massive profits no matter who ultimately wins the smartphone war. To find out what it is, click here to access the "One Stock You Must Buy Before the iPhone-Android War Escalates Any Further."

This Mighty Marvel Character Could Be Disney's Next "Iron Man"

The Marvel Cinematic Universe is getting richer. Walt Disney (NYSE: DIS  ) scheduled three untitled Marvel Studios films shortly after re-signing Robert Downey Jr. to play Iron Man in the next two Avengers films. Marvel is also talking with Fast & Furious 6 actor Vin Diesel about an unspecified role.

Investors should love the aggressiveness. By announcing its intentions, Disney has locked up the first weekend in May 2015, 2016, and 2017 for Marvel films. History says they'll do well. Iron Man (May 2008) and Iron Man 2 (May 2010) each earned more than $300 million at the U.S. box office, while Thor (May 2011) earned $181 million. And, of course, we all know how big Marvel's The Avengers became in the months after its May 4, 2012, debut.

May is Marvel's money month, which leaves the rest of the year to experiment. Next up: Guardians of the Galaxy, an August 2014 big-space epic that attempts to widen the MCU in ways that Time Warner had hoped Green Lantern would expand the DC Cinematic Universe. (An experiment that failed, sadly.)

Marvel's next try after that comes in an untitled July 2016 feature. Will the studio use the slot to beef up an existing character or introduce a new one, expanding the Avengers franchise? Fool contributor and longtime comic-book fan and follower Tim Beyers is betting on the latter, and offers a theory for who it might be in the following video.

Please watch and then weigh in. Do you agree with Tim's take? What characters would you like to see on screen. Leave a comment to let us know what you think about Marvel's strategy, and whether you're more or less bullish on Disney stock as a result.

It's easy to forget that Walt Disney is more than just the House of Mouse. True, Disney amusement parks around the world hosted more than 121 million guests in 2011. But from its vast catalog of characters to its monster collection of media networks, much of Disney's allure for investors lies in its diversity, and The Motley Fool's premium research report lays out the case for investing in Disney today. This report includes the key items investors must watch as well as the opportunities and threats the company faces going forward. So don't miss out -- simply click here now to claim your copy today.

3 Reasons to Own Starbucks Stock

When does it stop? Starbucks (NASDAQ: SBUX  ) stock just keeps soaring. Shareholders holding the stock over the past five years boast a 300% gain, trouncing the Dow Jones' paltry 32% increase in the same period.

Is it too late to jump in? Definitely not. Here are three reasons Starbucks stock is worth owning.

Economies of scale
The company has more than 11,100 company-owned, Starbucks-branded locations in the U.S. alone. Comparatively, Dunkin' Donuts (NASDAQ: DNKN  ) and Caribou Coffee have 7,200 and 600 points of distribution, respectively.

If the story ended here, Starbucks would already have a large enough lead on competitors for obvious scale advantages. But in the international markets, Starbucks' story gets even better. While Dunkin' Donuts' 3,100 locations outside the U.S. in 30 countries is impressive, Starbucks is far ahead. It has 7,000 stores in 60 countries.

Store growth
Starbucks added 590 net new stores globally in just one quarter. Though 337 of those were Teavana stores, the company still added 253 Starbucks locations in its second quarter of 2013. Comparatively, Dunkin' Donuts added just 108 net new locations in its most recent quarter.

Starbucks won't be slowing store growth any time soon. The company plans to quadruple its 2012 footprint of 500 locations in China by 2015. Fool contributor Tamara Rutter breaks it down for us: "Starbucks plans to open an additional 1,500 locations in China by 2015, and 4,000 stores in the broader China and Asia-Pacific region by the end of the year. At this rate, Starbucks' international business is on track to outpace that of Starbucks' U.S. division by 2022." And that's just China.

Food
"Responding to customer demand for more wholesome and delicious food options," explained a June 4 press release, Starbucks acquired La Boulange in 2012.

The goal? To "bring the artistry of the French bakery to the marketplace in a similar way that Starbucks brought the romance of the Italian espresso bar to many North American coffee consumers for the first time," described the press release from Starbucks announcing the acquisition.

Now, with the help of La Boulange's renowned French baker Pascal Rigo, Starbucks wants to shake things up with food, too. Sounds ambitious? It is.

Yet Fool contributor Demitrios Kalogeropoulos thinks that Starbucks' Food expansion is its most important growth driver. He thinks the addition of food can "double-check averages over time" and boost same-store sales growth.

Is there upside left to Starbucks stock?
Starbucks' growth era is far from over. Sure, 33 times earnings is a high price to pay, but the company looks poised to deliver over the long haul.

Now more than ever, it's essential to take control of your investments if you want to have a financially secure retirement. The Fool wants to help you retire rich, so we've put together a research report with three promising stocks specifically chosen with long-term retirement investors in mind. Don't miss out on this absolutely free report; click here and get your copy today!

At home with US Home Construction ETF

Nicholas VardyAs uncomfortable as the recent sell-off has been, I believe that markets are overreacting to the Fed's announcement that it will gradually begin to wind down its quantitative-easing (QE) program.  Once the markets adjust to this reality, I believe they will stabilize and resume their upward trend.

Our latest recommendation -- the iShares Dow Jones US Home Construction (ITB) -- focuses on a sector in the United States that has become extremely oversold, yet I believe it has strong fundamentals.

The iShares Dow Jones US Home Construction ETF tracks the Dow Jones U.S. Select Home Construction Index. Its biggest holdings include PulteGroup, Lennar, D.R. Horton, NVR and Toll Brothers, which together account for 44.73% of ITB.


The ETF has fallen 13.49% since hitting its peak on May 20. Investors' knee-jerk reaction has been that higher interest rates will stop the housing recovery in its tracks.

Yet, I think the opposite is likely to happen. As interest rates begin to rise, potential home buyers will act sooner than later, encouraged by rising retail sales and consumer confidence. I bet many consumers are already plugging in 4.5%, 5%, 6% figures into their mortgage calculators, spurring them to act sooner, rather than later.

In addition, more normal, market-determined levels may also encourage banks to allocate more funds to mortgage lending and reduce their abnormally stringent mortgage-lending standards.

For the longer term, the big-picture case for housing is extremely strong. Existing-home sales for May were up 4.2% from April to an annual rate of 5.18 million -- above the 4.97 million consensus estimate.

Over the past 12 months, total housing starts were up 28.6% and single-family starts rose 16.3%. Applications to build single-family homes are at their highest level since May 2008.

Small trucks favored by construction workers are flying off the lots. Population growth in the United States is creating demand for 14 million more houses over the next five years. Yet fewer than 6 million will be built by 2015. So, buy ITB at market, and place your stop at $18.25.

Saturday, June 29, 2013

Bank of America Surges on Better-Than-Expected Housing Data

Investors in Bank of America (NYSE: BAC  ) are getting a welcome reprieve today after better-than-expected data emerged from the housing sector. Shares of the nation's second largest bank by assets have fallen by nearly 10% since the beginning of June, but are rebounding today by more than 2%.

The primary catalysts for today's climb are three reports concerning the housing sector. First, the Federal Housing Finance Agency released its estimate of April home prices (link opens PDF). According to its House Price Index, the price of homes across the country increased by 0.7% in April compared to March. On a year-over-year basis, the growth rate surged to 7.4%. It was the 15th consecutive monthly price increase in the purchase-only, seasonally adjusted index.

Second, a separate report from Standard & Poor's confirmed these results. Its Case-Shiller Home Price Index (link opens PDF) shot up on a sequential basis by 2.52% in April and on an annual basis by 12.05%. Moreover, all 20 cities covered by the index showed positive year-over-year returns for the fourth consecutive month, and a handful of them posted their highest annual gains since the start of their respective indices.

Finally, the Commerce Department released its monthly estimate of new-home sales and prices (link opens PDF). Sales of new single-family homes in May came in at a seasonally adjusted annual rate of 476,000. This was 4.1% higher than the April rate of 466,000 and a staggering 29% above May of last year. It was also the highest level in nearly five years.

While all of these reports point to a housing recovery, some of the industry's top observers are nevertheless concerned about its sustainability. "I'm optimistic in the short-run," Yale's Robert Shiller told Bloomberg News this morning. "Home prices are likely to go up for the next year and maybe longer. But the real question is: Is it going to repeat the long boom that we saw between 1997 and 2006? And I'm not so sure it will."

His concern was primarily grounded in two industry trends. As the Federal Reserve begins to taper its support for the economy, known as QE3, mortgage rates will shoot higher, sending the effective price of homes up as well. We've already seen this, in fact, over the past few months. For a period last year, the interest rate on a conventional, conforming 30-year mortgage was less than 3.5%. But since fear of a Fed retreat surfaced at the end of last month, it's shot above 4%.

In addition, many of the homes being purchased now are strictly for investment, fueled by a demand from hedge funds. A recent Washington Post article noted that "institutional investors -- who in some cases are bidding on hundreds of homes a day -- account for as much as 70 percent of sales in some Florida markets. Over the past two years, analysts say, they also have accounted for a majority of purchases in other parts of the country where housing prices are rebounding sharply." The fear is that the still-nascent housing recovery will stall once these buyers have had their fill.

But either way, for the time being at least, it's clear that investors are celebrating the direction of the housing market. And for good reason, as my colleague Morgan Housel has noted, "Housing itself won't drive a strong recovery, but it's important enough that there hasn't been a strong economy without a strong housing market in modern history."

Many investors are scared about investing in big banking stocks after the crash, but the sector has one notable stand-out. In a sea of mismanaged and dangerous peers, it rises above as "The Only Big Bank Built to Last." You can uncover the top pick that Warren Buffett loves in The Motley Fool's new report. It's free, so click here to access it now.

The Only Time You Should Ever Buy A Stock Yielding 17%

If you're a long-time reader of StreetAuthority, you know by now that we almost never recommend stocks with yields higher than 10%. 

If the yield is higher than that, it's usually a sign that the company's fundamentals are sagging, investors are bracing for a dividend cut -- or worse...

But today, I'm going to show you how to break one of the cardinal rules of safe income investing and buy a stock yielding 17% without losing a single night's sleep.

 
All you have to do is think more like a trader. Now, I know that doesn't come easy to most income investors, but it's easier than it sounds. In fact, I'm going to show you how one simple tool allows you to know when it's safe to buy stocks with ridiculously high yields, hold them for a period of time and collect any dividends you might receive, and then know when it's time to get out before the rest of the crowd loses their shirts.  

But it's one thing to tell you this. I want to prove it to you with one of the most followed high-yield mortgage real estate investment trusts (mREITs) of the past few years -- American Capital Agency (Nasdaq: AGNC).

If you're the type of income investor that's always been willing to take some risk to get double-digit yields, then you're probably familiar with AGNC by now. You might have even owned some shares at some point. Maybe you still do.

For the past five years, the trust has sported a monster dividend yield ranging from 14% to over 20%.

AGNC buys debt issued by U.S. government entities such as Ginnie Mae, Freddie Mac and Fannie Mae -- which means any principle or interest payments are government-backed as well. The majority of the trust (70%) is invested in 30-year, fixed-rate, mortgage-backed securities.

Despite the fact that many high-yield securities carry heavy risk, this mREIT's efficient use of capital has allowed revenues and profits to soar. From May 2008 to the end of 2012, the company's annual revenue rose from $41 million to $1.44 billion. And for much of that time, AGNC sported a return on equity (ROE) around or above 20% -- meaning for every $1 invested by shareholders, the trust managed to return 20 cents in the form of pure profit.

Meanwhile, since the end of 2011, the trust has carried no debt. Instead, it's nearly doubled its cash hoard to $3.3 billion. From AGNC's start in May 2008 until its peak in 2012, shares gained 339%, including dividends.

Then, September 2012 came around... The stock hit an all-time high near $37 per share at that point. And while the company was still enjoying healthy profits at the time, (and has ever since), the company's shares have tumbled dramatically.

Since its peak, the stock price has fallen 33%, despite the broader market rising 11%.

Fundamentals work fine up to a certain point. But if you followed a few simple trading signals, you would've known EXACTLY when to buy and sell this stock, avoiding the excessive risk and unexpected stock dive.

To be more specific, I am talking about using "relative strength."

If you've never heard of relative strength, don't worry. It's simple to understand.

Relative strength is found by calculating the percentage price change over the past six months for every stock and exchange-traded fund (ETF). You then sort these changes from high to low and assign the highest value a relative strength rank of 100 and the lowest value a rank of zero.

Every stock is assigned a rank based on where it fits into that range. I like to use 70 as the limit for buys and sells. If relative strength is greater than 70 (meaning a stock is rising more than 70% of the market), the stock or ETF is a buy. I sell whenever the rank falls below 70.

You can see AGNC's relative strength charted below its price in this graphic:

In this case, AGNC's relative strength fell below 70 on September 21, 2012 (when the shares were still above $35), meaning it was time to sell. It was a crystal-clear signal that investors should get out.

That one signal could have saved an investor from losing thousands of dollars. What's more, this signal got them out of an underperforming stock during one of the best market rallies we've ever seen -- allowing them to put money to work elsewhere.

So just to review, if you had followed this strategy and waited to buy AGNC when relative strength was above 70 in May 2012 (capturing its 17% yield at the time), and held on to it until September (when relative strength fell below 70), you would've pocketed a total return of 17% just before the stock took a downturn.

By contrast, investors who happened to buy the stock in May 2012 and didn't follow the signal to get out would be sitting on a 11% loss right now. Even worse, if they bought near the peak they'd have a 33% loss.

That's why I think using relative strength is the only way to ever buy a high-yield stock -- or any stock -- safely.

All of this is proof that if you aren't using trading signals in your investing, then you're missing one of the most important tools to beat the market.

Now, I will be the first to tell you that one example doesn't prove a system works.

That's why I want to tell you about a special research project I've completed that puts this tool to the test.

For the past several weeks, I've been testing a system that uses a few simple trading signals (like relative strength) and applies them to the stocks that are currently held within the various StreetAuthority portfolios. These are the same stocks held by Carla Pasternak, Amy Calistri, Elliott Gue and Nathan Slaughter... and that you may already own.

From there, I rank every single holding, top to bottom, filling a portfolio with up to 10 stocks that rate the highest. The results are very encouraging. During the past 10 years my test is showing a gain of 21.5% per year versus a roughly 7% annual rise in the S&P.

I call it the "Maximum Profit" system, and it's perfect for income investors. Nearly two-thirds of the stocks that I look at pay a dividend, and roughly one-third of the stocks that are potential buys have a yield over 4%. And by using trading signals and other fundamentals, my dividend payers enjoy added protection that doesn't come with traditional investing.

To learn more about this research, I encourage you to watch this presentation. You don't want to miss this opportunity.

This Week in Solar

Solar stocks had an up and down week, but at the end of the day the industry trends are still getting stronger. Politically, solar is more acceptable than it was a year ago and the biggest, most ruthless banks in the world are seeing the value solar presents financially. Here are the biggest news items of the week from the solar industry.

Obama on energy
Renewable and solar energy has been on President Obama's agenda since he took office, but with a financial crisis, floundering economy, and war in Afghanistan to worry about, there's been little policy change. That's why Tuesday's speech about cutting carbon dioxide emissions and promoting renewable energy got so much attention from the solar industry. If President Obama is behind solar, it will get the political boost it needs.  

As much attention as the speech got, I don't actually think it's all that important for investors. Solar installations grew 76% last year without much political help, and it's unlikely that a carbon tax or cap and trade will pass Congress in the near future.

Instead, investors should be focusing on changes at the state level and the falling cost of solar in the residential and commercial markets. New York, New Jersey, and Minnesota are just three states that have introduced policies in the past year that will grow solar, and they'll have more impact on the industry than what the president can get done right now.

Don't get me wrong. Having the president of the United States on your side is a good thing, I just don't think it fundamentally changes the investment case for solar.

Solar financing gets bigger
There were a couple of big announcements in solar financing this week. Sunrun said it has closed on $630 million worth of residential solar financing, backed by US Bancorp (NYSE: USB  ) and JPMorgan Chase (NYSE: JPM  ) . There's been a rush to solar by big banks this year, and this is just the latest investment they've made. US Bancorp has been investing in residential solar for years, but this is the first such investment by JPMorgan, an important shift for the company.  

Clean Power Finance also announced an equity investment from Duke Energy, one of the biggest coal plant owners in the country. This is the second equity investment from a major utility and another sign that traditional energy is trying to get into solar.

Suntech is still alive ... sort of
The strange news of the week was another forbearance agreement on Suntech Power's (NYSE: STP  ) debt. The company will delay payment of $541 million of notes originally due in March until Aug. 30, the second extension of forbearance. It's unclear exactly how many bondholders agreed to the delay or what Suntech will do in the meantime, but it's supposedly working with creditors to keep the company alive.  

What is clear is that investors shouldn't buy Suntech's stock. The company is in terrible shape financially, and the delays in payments to bondholders show that stakeholders won't bail the company out quickly. I think Suntech will eventually be bankrupt and equity investors will be left with nothing.

News and notes
Hanwha SolarOne (NASDAQ: HSOL  ) announced another $100 million in financing this week, this time a term loan from the Export-Import Bank of Korea.  

Canadian Solar (NASDAQ: CSIQ  ) made a big splash this week by announcing a partnership with Samsung Renewable Energy to build manufacturing capacity in Canada. The venture will supply modules to at least 200 MW worth of projects Samsung is building and will probably grow that base in the future.  

Slowly but surely, the solar industry is going mainstream, and this week saw a few steps in that direction. 

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The Shocking Bill Your Daughter's Girl-Scout Cookie Money Is Paying

Selling Girl Scout cookies is an annual spring ritual, one that my 8-year-old daughter participated in for the first time this year with her Brownie troop. I was proud of all the hard work and effort that I saw from dozens of local troop members and parents as they worked to raise funds for the activities that define what being a Girl Scout is.

Yet recent revelations about the pension crisis at the national Girl Scouts of the USA organization have me questioning whether the efforts that my daughter and her troop-mates make are truly aimed at furthering their Girl Scout experience. With recent lawsuits between local Girl Scout councils and the national organization, mistakes in the way the GSUSA handled pension benefits have cast a shadow over what should have been untempered enthusiasm in light of the Girl Scouts' 100th anniversary last year.


Image source: Wikimedia Commons, courtesy Drmies.

What's behind the pension problem?
The most shocking thing about the pension shortfall at the GSUSA is its size. A $347 million deficit at the national organization has led to major financial demands on the more than 100 local councils that help fund GSUSA. One council in middle Tennessee has sued the national organization, seeking to withdraw from the pension plan by alleging that the national organization breached its fiduciary duty in mismanaging the plan's finances. Without pulling out of the plan, it and other local councils will have to pay makeup contributions to the plan to cover pension liabilities. That in turn has put financial stress on local councils, leading to controversial moves like selling off summer-camp properties and laying off the locally based employees who help volunteers.

For its part, the national organization blames the economic crisis for its pension troubles. As recently as 2007, the pension plan ran a surplus of about $150 million. In comments to the House Ways and Means Committee (link opens PDF file), GSUSA CEO Anna Maria Chavez argued that the organization's "unfortunate situation is not anyone's fault," citing its decision to freeze its pension plan as having reversed the initially positive effects of recent amendments to pension-funding provisions that were designed to help it and other charities. Chavez now anticipates that the organization will have to contribute $145 million between 2014 and 2016 to help fund the defined-benefit plan for 13,000 participants, further noting that those contribution requirements are more stringent than for-profit corporations face.

The national organization hopes to get at least some relief from the shortfall. If GSUSA can successfully lobby Congress, it could reduce the amount it has to contribute to the plan, giving it more time to remedy the shortfall. Still, any short-term reduction in required contributions would come at the expense of higher costs from 2017 to 2022, according to GSUSA projections.

Get ready for more
There's nothing all that unusual in the pension problems facing Girl Scouts of the USA. Plenty of private companies and public-sector employers are dealing with the same issues and have had to take similar steps to shore up their pension finances. Like the GSUSA, IBM (NYSE: IBM  ) and Verizon (NYSE: VZ  ) froze their pension plans several years ago, as both companies decided that reducing the unpredictability of pension benefits made the most sense for them in managing their risk. More recently, Verizon and General Motors (NYSE: GM  ) took even more dramatic steps to limit pension risk, outsourcing substantial portions of their respective pension liabilities to insurance giant Prudential (NYSE: PRU  ) . By doing so, the two employers passed off their obligations to an industry that's designed to handle the longevity risk that pension payments create.

The main problem that employers throughout the nation are facing is that promises they made to their employees were more expensive than they initially planned for, and many of them were ill-equipped to handle the responsibility of funding their obligations in uncertain market environments. In the long run, the solution will require rethinking about long-term promises made to workers in their employee benefits, with particular attention to the worst-case scenarios that can create unexpected financial burdens.

For the Girl Scouts, the pension controversy comes at a time in which the entire organization has gone through major changes in an effort to reinvent and modernize itself in order to reverse falling numbers of participants. For many parents, there's less incentive to work hard on fundraising efforts when they know that an alarmingly large portion of the proceeds from their labors will go not toward current programs for girls but rather toward getting a distant national organization out of its financial bind. To avoid the challenges the GSUSA now faces, other popular nonprofit organizations need to look closely at their employee benefits to keep would-be donors from balking at the prospect of funding pensions rather than supporting the current programs that do so much good.

Friday, June 28, 2013

Lockheed Wins $90 Million for SBIRS, C-130 Work

On Friday, the U.S. Department of Defense announced it has awarded Lockheed Martin (NYSE: LMT  ) a pair of new contract "modifications" worth nearly $90 million in total.

The larger of the two awards ups Lockheed's contract for 2013 Contractor Logistics Support, Legacy Sustainment, and Combined Task Force Support by $75.2 million, resulting in a cumulative contract value of $181.1 million. Lockheed will be working on the Space Based Infrared System (SBIRS) Survivable Endurable Evolution, Increment 1, implementing "permanent sustainment modifications" to the system's Mobile Ground System. The aim here is to enable ground systems to process Defense Support Program and SBIRS geosynchronous orbit satellites mission data, and to also issue "limited contingency" commands to the satellites, when needed. Lockheed's work on the contract will continue through January 31, 2017.

The smaller award, to Lockheed's Integrated Systems unit, is worth $14.4 million, and extends Lockheed's logistics support for Iraq's C-130E Hercules transport aircraft for a fourth option year, through June 30, 2014. Total contract value on this one is now up to $61.6 million.

Why Bonds Are Falling so Fast

Over the past month, rates on 30-year Treasury bonds rose from 3.32%, to 3.54%,  an increase of only 0.22 percentage points. Yet, a 30-Year Treasury bond issued with a face value of $100 in May 2013 recently traded hands at $87.125 in late June. That's a huge swing on a pretty small move in rates. With the Federal Reserve indicating it will taper its bond-buying program as economic conditions improve, chances are very good that rates will continue to rise, and prices of existing bonds fall.

Because interest rates are so very low at the moment, small changes in interest rates drive huge swings in the market prices of existing bonds. It's the nature of the beast, and it's driven by something called the bond's modified duration. With rates so low and poised to rise, understanding why modified duration drives prices may be the most important thing bond investors can do right now to protect their capital -- and their sanity.

Why it works this way
Bond investors generally look to maximize the amount of income they get for a given amount of risk. Bonds are priced based on their debt ratings, time to maturity, possible tax advantages (like municipal bonds paying potentially tax free interest ), and features like whether the issuer can call them away early. Because there's a known schedule to their payments, and a known value to their most typical features, it's very straightforward to compare bonds to one another.

There are currently four U.S. companies with the top ranked AAA debt rating: Microsoft (NASDAQ: MSFT  ) , ExxonMobil (NYSE: XOM  ) , Johnson & Johnson (NYSE: JNJ  ) , and Automatic Data Processing (NASDAQ: ADP  ) . Investors buying their debt are nearly completely certain that they'll get all their interest payments on time, and get full redemption value when the bonds mature.

With the risk of not getting paid virtually eliminated, if all four of those companies were to offer bonds with similar terms, bond investors looking for AAA debt would flock to the one paying the highest rate. For the other bond issues to attract investors, they'd have to offer an equivalent total return to get their fair share of the investors' dollars. The modified duration calculation is simply the math that sets the prices of existing fixed-rate bonds in line with new ones issued with similar terms, given changes in rates.

How to reduce the impact of rising rates
The lower a bond's modified duration, the less its price moves as rates change. In a rising-rate environment, the price of a bond with a modified duration of 15 can fall a whopping 15% for a mere 1 percentage point increase in rates. On the flip side, if a bond had a modified duration of five, it would only fall 5% from that 1 percentage point rate hike. As rates rise, bond investors best protect themselves by being in the positions with the lowest modified duration that meet the rest of their investing criteria.

Unfortunately, there still ain't no such thing as a free lunch, especially in bond investing. There are trade-offs for every decision that lowers a bond's modified duration. The three key factors that drive modified durations and their trade-offs appear below:

Time to maturity: The less time before a bond matures, the lower its modified duration. The trade-off: Most of the time, shorter-term bonds have lower interest rates than longer-term bonds, so current interest payments will likely be lower. Coupon yield: The higher a bond's coupon yield, the lower its modified duration. The trade-off: Bond issuers don't offer high coupon rates on their bonds because they want to; they do it because they have to in order to attract investors to an issue at their particular risk level. Current yield to maturity: The higher a bond's current yield to maturity, the lower its modified duration. The trade-off: If a bond has an abnormally high current yield to maturity compared to bonds that otherwise appear similar, chances are it's because the market believes the issuer's credit quality has deteriorated.

It's not all bad news
Of course, while rising rates are very tough on currently existing bonds, they also mean that newly issued bonds carry higher coupon payments. As existing bonds mature, an investor rolling over the cash from those maturing bonds may be able to get more income from a new bond than from the old one it's replacing. It's just another trade-off that bond investors face in today's rising rate environment.

Another way to get income from your investments
If you're worried about owning bonds in a rising interest-rate environment, but still need income from your investments, there's an alternative in dividend-paying stocks. The Motley Fool has compiled a special free report outlining our nine top dependable dividend payers. It's called "Secure Your Future With 9 Rock-Solid Dividend Stocks." You can access your copy today at no cost! Just click here.

Verizon Wireless Wraps Up Nationwide 4G LTE Rollout

Another Microsoft Partner Reveals Windows 8 Woes

The following video is from The Motley Fool's weekly Tech Review, in which host Chris Hill talks all things tech with Fool analysts Eric Bleeker and Lyons George.

Asus has revised its notebook and tablet sales estimates downward for this past quarter, though the company is still optimistic for the rest of the year and has left its full-year guidance unchanged. The source of the troubles? Weak demand for Microsoft's (NASDAQ: MSFT  ) newest operating system, Windows 8. In this video, Lyons and Eric discuss the market's perception of Microsoft these days, and what the company will need to do from here to reach the resurgence investors are hoping for.

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 among the five kings of tech. Click here to keep reading.

The relevant video segment can be found between 0:00 and 3:43.

For the full video of this edition of the weekly Tech Review, click here.

Thursday, June 27, 2013

Best Bank Companies To Own In Right Now

Washington Post columnist Neil Irwin stopped by to discuss his book,�The Alchemists: Three Central Bankers and a World on Fire.�It's a great read on the history of central banks, including how they responded to the financial crisis and the challenges they face in the future.

In this video segment Neil takes questions on the real cause of unemployment, and the need to balance today's news with a longer view on economic developments.�A full transcript follows the video.

Audience Member: Speaking of the (unclear), and of course one of those is the unemployment rate. The Fed's put out a target of like 6.5 or 7%?

I'm wondering if, though, it's the (unclear) of the main rate. I'm essentially finding that, at least up in Fresno, in the sense that we have a situation in the U.S. where getting to 7.5% unemployment is actually almost (unclear). It's still a high number, but you essentially have a large block of the population that doesn't have the skills or (unclear) to actually take a lot of these jobs that are available.

Best Bank Companies To Own In Right Now: Towne Bank(TOWN)

TowneBank, through its subsidiaries, provides retail and commercial banking products and services in the Greater Hampton Roads region in southeastern Virginia. The company operates in three segments: Banking, Realty, and Insurance. The Banking segment provides various deposits products, including checking accounts, demand deposits, negotiable order of withdrawal accounts, savings accounts, money rate savings, certificates of deposit, and individual retirement accounts; personal loans, including secured and unsecured loans for financing automobiles, home improvements, education, and personal investments; commercial loans comprising secured and unsecured loans for working capital, business expansion, and equipment and machinery purchases; and fixed- and floating-rate mortgage loans, as well as real estate construction and acquisition loans. This segment also provides safe deposit boxes, cash management services, travelers? checks, direct deposit of payroll and social securi ty checks, and automatic drafts for various accounts, as well as Internet and on-call banking services. In addition, it offers documentation to accomplish tax deferral to investors; and financial, retirement, and estate planning services, as well as assistance on various investment options, including alternative investments, annuities, margin accounts, convertible bonds, and pension and profit sharing plans. The Realty segment provides residential real estate, resort property management, and commercial residential title insurance services, as well as originates mortgage loans. The Insurance segment provides life, property, casualty, and vehicle insurance services; travel, medical, and baggage protection insurance for travelers; and employee benefit programs, including medical, dental, vision, and disability insurance, as well as serves as an administrator for health care and dependent care flexible benefit plans. The company was founded in 1998 and is headquartered in Portsm outh, Virginia.

Best Bank Companies To Own In Right Now: AMN Healthcare Services Inc(AHS)

AMN Healthcare Services, Inc. provides healthcare staffing and clinical workforce management solutions in the United States. The company?s Nurse and Allied Healthcare Staffing segment provides staffing solutions for hospitals and other healthcare facilities, including medical, surgical, specialty, licensed practical or vocational, and advanced practice nurses, as well as surgical technologists and dialysis technicians. This segment also offers allied health professionals under the Med Travelers, Club Staffing, and Rx Pro Health brand names to acute-care hospitals and other healthcare facilities, such as skilled nursing facilities, rehabilitation clinics, and retail and mail-order pharmacies. These allied health professionals include physical, surgical, respiratory, and occupational therapists, as well as medical and radiology technologists, speech pathologists, rehabilitation assistants, pharmacists, and pharmacy technicians. Its Locum Tenens Staffing segment places physic ians of various specialties, certified registered nurse anesthetists, nurse practitioners, and dentists on a temporary basis as independent contractors with various healthcare organizations, including hospitals, medical groups, occupational medical clinics, individual practitioners, networks, psychiatric facilities, government institutions, and managed care entities. The company?s Physician Permanent Placement Services segment provides permanent physician placement services to hospitals, healthcare facilities, and physician practice groups under the Merritt Hawkins and Kendall & Davis brand names. This segment also offers specialty offerings, including internal medicines, family practices, and surgeries. Its Home Healthcare Services segment provide home healthcare services to individuals with acute-care illness, long-term chronic health conditions, permanent disabilities, terminal illnesses, and post-procedural needs. The company was founded in 1985 and is headquartered in S an Diego, California.

Advisors' Opinion:
  • [By Dennis Slothower]

    AMN Healthcare Services, Inc. is a provider of healthcare staffing and management services. Its EPS forecast for the current year is 0.17 and next year is 0.4. According to consensus estimates, its topline is expected to grow 31.57% current year and 8.02% next year. It is trading at a forward P/E of 21.78. Out of eight analysts covering the company, two are positive and have buy recommendations, one has a sell rating and five have hold ratings.

5 Best International Stocks For 2014: Kingspan Group(KGP.L)

Kingspan Group plc, together with its subsidiaries, provides energy building solutions for the construction industry. The company designs and manufactures insulated panels, rigid insulation boards, architectural facades, raised access floors, engineered timber systems, solar thermal hot water systems, and fuel and water storage solutions. Its products and solutions include insulated roof, architectural wall, and facade systems for designers and architects; insulation products comprising insulation boards for roofs, walls, and floors, as well as insulation products for HVAC ductwork for use in the construction and related industries; and structural systems, such as cladding support purlins and rails, and composite floor decking for buildings. The company also offers solar and renewable technologies, including solar thermal hot water package solutions, solar cooling solutions, solar photovoltaic systems, and air source heat pumps for new or existing building integration; and various insulated and air tight building fabric systems for the private and public sector. In addition, it provides waste and surface water management, and conservation solutions for sustainable drainage, rainwater harvesting, and off-mains effluent treatment systems, including pollution prevention, pumping, and drainage solutions; environmental containers; and telemetry and management systems. Kingspan Group plc serves the distribution, logistics and manufacturing; temperature controlled; retail; commercial office; education; healthcare; hotel, motel, and leisure; government and public buildings; communications; private and affordable housing and apartments; student accommodation; self-build housing; and refurbishment sectors. It has operations in the Republic of Ireland, the United Kingdom, and rest of Europe; the Americas; and internationally. The company is headquartered in Kingscourt, Ireland.

Wednesday, June 26, 2013

Top 10 Wireless Telecom Companies To Own In Right Now

The shares of Greggs (LSE: GRG  ) slumped 8.6% to 423 pence during London trade today after the company revealed that like-for-like store sales had declined more than 4% since last year.

Greggs, the largest bakery chain in the U.K., reported a 3% improvement in total sales, with new shops and additional wholesale and franchise income counterbalancing the performance at the existing stores.

The company blamed "adverse weather" in January and March, as well as "lower footfall across much of the estate," for the disappointing same-store performance, but it claimed the trends had been improving during the last two weeks.

The company confirmed that it had refurbished 59 stores in the first quarter, with plans to refit a total of 250 shops during 2013. Meanwhile, 10 new stores were opened, taking Greggs' total shop count to 1,681.

Top 10 Wireless Telecom Companies To Own In Right Now: Technics Oil & Gas Limited (5CQ.SI)

Technics Oil & Gas Limited, an investment holding company, operates as an integrator of compression systems and process modules for the offshore oil and gas sector worldwide. The company�s Engineering, Procurement, Construction, and Commissioning segment engages in the design, procurement, fabrication, installation, and commissioning of process modules and equipment, including gas compression packages that are integrated to form the operating system for production operations and storage applications in offshore and onshore oil and gas exploration and production activities. Its Contract Engineering segment is involved in designing, procuring, and fabricating modules, systems, or equipment. The company�s Procurement Services segment provides after-sales services, as well as supplies spare parts and equipment for oil and gas exploration and production applications. Technics Oil & Gas Limited also engages in the design, engineering, integration, testing, and supply of turbo machinery control for the oil and gas, power, and general industries; and design, manufacture, and engineering of thermal technology products for the marine, offshore, oil and gas, power, refinery, and other related industries. In addition, the company provides marketing, coordination, and administrative support services; and manufactures control systems and solutions for marine, offshore, oil and gas, power, waterworks, and general industries. Further, it engages in the manufacture and repair of marine and industrial mechanical parts; engineering works; and process industries construction and maintenance activities. Additionally, the company offers repair and cleaning services for tanks and other ocean-going vessels; and non-building construction services. Technics Oil & Gas Limited was founded in 1990 and is headquartered in Singapore.

Top 10 Wireless Telecom Companies To Own In Right Now: Acura Pharmaceuticals Inc.(ACUR)

Acura Pharmaceuticals, Inc., a specialty pharmaceutical company, engages in the research, development, and manufacture of pharmaceutical product candidates utilizing its proprietary Aversion and Impede technologies. Its Aversion Technology is a proprietary platform technology providing abuse deterrent features and benefits to orally administered pharmaceutical drug products containing abusable active ingredients, such as tranquillizers, stimulants, sedatives, and decongestants. The company offers OXECTA Tablets CII, which are oral formulations of oxycodone HCl for the management of acute and chronic moderate to severe pain; and Impede PSE, a pseudoephedrine hydrochloride tablet product candidate. It is also developing opioid analgesic product candidates, which would be used to relieve pain while discouraging common methods of opioid product misuse and abuse, including intravenous injection of dissolved tablets or capsules; nasal snorting of crushed tablets or capsules; and intentional swallowing of excess quantities of tablets or capsules. In addition, the company investigates and develops mechanisms to incorporate abuse deterrent features into abused and misused pharmaceutical products using its Impede Technology. Acura Pharmaceuticals, Inc. has a license, development, and commercialization agreement with King Pharmaceuticals Research and Development, Inc. to develop and commercialize certain opioid analgesic products utilizing the company?s proprietary Aversion Technology in the United States, Canada, and Mexico. The company was founded in 1935 and is based in Palatine, Illinois.

Advisors' Opinion:
  • [By Brian Nichols]

    Acura Pharmaceuticals is one of my favorite biotech stocks -- that I believe has multi-billion dollar potential -- but is still a couple years from reaching its full potential. The company is trading with a market cap of just $150 million, which is less than 18x earnings. The company has an approved technology, AVERSION, which is a deterrent that discourages the common methods of prescription abuse in narcotics. The patented technology has been approved in the drug Oxecta, which is going to be marketed, sold, and manufactured by Pfizer (PFE).

    Oxecta is an oxycodone based opiate pain reliever that uses the AVERSION technology to discourage the common methods of abuse. Pfizer's already announced that Oxecta is commercially available, which should have caused a mass reaction in shares of ACUR, but so far the stock's traded with very little movement. Acura receives milestone payments for allowing Pfizer to use the technology, and royalties in the amount of 5% - 25% of total sales. This means that ACUR has all the luxuries of owning a breakthrough technology without the hassles and expenses of trying to market, sale, and manufacture the approved drug; it simply sits back and receives payment.

    Oxecta is just the first in a long line of drugs that Pfizer plans to use with the AVERSION technology. There is also a drug that is yet to be approved, with hydrocodone (the most prescribed drug in the U.S.). The future looks bright for this company, and it's in a situation with a technology that has little costs and high profits. It will take time for Pfizer to effectively market Oxecta, but I believe it will change the way physicians prescribe narcotics, and once a hydrocodone-based drug is created, with the AVERSION technology, I think drugs such as Vicodin and Percocet will become extinct. As of now, ACUR is one of the best kept secrets in the market, but I believe that in the second half of 2012 optimism will start to build and its stock will rise, very fast.

Top 10 High Dividend Companies For 2014: Trimble Navigation Limited(TRMB)

Trimble Navigation Limited provides positioning, wireless, and software technology solutions. The company?s Engineering and Construction segment offers site positioning systems, construction asset management services, software, and wireless and Internet-based site communications infrastructure solutions that improve productivity, accuracy, safety, and environmental impact in the entire construction process; and productivity solutions for the building construction sectors, as well as designs and markets handheld data collectors, productivity survey and mapping equipment, and data collection software for field use. Its Field Solutions segment provides guidance and positioning systems, automated application systems, and information management solutions to improve crop performance, profitability, and environmental quality; and handheld data collectors that gather information in the field. The company?s Mobile Solutions segment offers vehicle solutions, such as GPS receivers, business logic, sensor interfaces, and wireless modems; mobile worker solutions to automate service technician work in the field; and scheduling and dispatch solution, an enterprise software program to optimize scheduling and routing of field service technicians. Its Advanced Devices segment supplies global navigation satellite system modules (GNSS), licensing and complementary technologies, and GNSS-integrated sub-system solutions; supplies global positioning system receivers and embedded modules for aircraft navigation and timing applications; provides GPS-enabled cell phones for outdoor recreational activities; precision products that combine GNSS with inertial sensors; and ultra high frequency radio frequency identification reader modules, radio frequency identification readers, and design services. The company markets its products through dealers, distributors, and authorized representatives worldwide. Trimble Navigation Limited was founded in 1978 and is headquartered in Sunnyvale, California.

Top 10 Wireless Telecom Companies To Own In Right Now: Seadrill Limited(SDRL)

Seadrill Limited, an offshore drilling contractor, provides offshore drilling services to the oil and gas industries worldwide. It also offers platform drilling, well intervention, and engineering services. As of March 31, 2011 the company owned and operated 54 offshore drilling units, which consist of drillships, jack-up rigs, semisubmersible rigs, and tender rigs for operations in shallow and deepwater areas, as well as in benign and harsh environments. Seadrill Limited was founded in 1972 and is based in Hamilton, Bermuda.

Advisors' Opinion:
  • [By Chuck]  

    SeaDrill is a company that is mostly involved in offshore drilling. The company provides mobile units, tender rigs and well services across the world. There is a direct connection between oil prices and the profitability of SeaDrill. Last year’s dividend yield was 7.6%. Current P/E ratio of 11.9 is lower than similar sized competitors such as Noble Corporation (NE) and Pride International (PDE). Jonathan Auerbach's Hound Partners and Craig Effron's Scoggin have large investments in another offshore driller, Ensco Plc (ESV).

  • [By Bryan Perry]

    SeaDrill Ltd. (NYSE: SDRL) is a unique opportunity for income investors seeking a pure play on deep-water drilling outside the post-BP spill in the Gulf of Mexico. The company was formed in 2005, and owns the most state-of-the-art drilling equipment in the entire industry that commands premium day rates. It is in big demand with utilization rates running near100% as big oil deposits become harder to find without going deep.

    These guys operate all over the world in 15 countries on four continents, owning 54 rigs with exposure to only one rig in the Gulf of Mexico. Most of their drilling activity is off the coast of Norway and South Asia, so it has no exposure to the now unstable Middle East. However, news of ARAMCO in Saudi Arabia upping drilling production is hugely positive news for the oil and gas drilling sector. It confirms the belief that the worldwide drilling rig count will rise as well as day rates for the balance of 2011.

    Shares of SeaDrill stand to trade significantly higher than its current price of $36.50, while paying a dividend yield of 7.5%. Buy SDRL under $40.

Top 10 Wireless Telecom Companies To Own In Right Now: Ibm(IBM.L)

International Business Machines Corporation provides information technology (IT) products and services worldwide. The company operates in five segments: Global Technology Services, Global Business Services, Software, Systems and Technology, and Global Financing. The Global Technology Services segment provides IT infrastructure and business process services, including strategic outsourcing, process, integrated technology, and maintenance services, as well as technology- and process-based services. The Global Business Services segment offers consulting and systems integration, and application management services. The Software segment offers middleware and operating systems software, such as WebSphere software to integrate and manage business processes; information management software for database and enterprise content management, information integration, data warehousing, performance management business analytics, intelligence, and data analytics; Tivoli software for identi ty management, data security, storage management, cloud computing, enterprise mobility, and automation and provisioning of the datacenter; Lotus Software to connect people and processes for communication; rational software to support software development for IT and embedded systems; security systems software; and operating systems software. The Systems and Technology segment provides computing power and storage solutions; and semiconductor technology products and packaging solutions. The company?s Global Financing segment provides lease and loan financing to end users; commercial financing to dealers and remarketers of IT products; and remanufacturing and remarketing of equipment. The company was formerly known as Computing-Tabulating-Recording Co. and changed its name to International Business Machines Corporation in 1924. International Business Machines Corporation was founded in 1910 and is headquartered in Armonk, New York.

Top 10 Wireless Telecom Companies To Own In Right Now: Zingmobile Group Ltd(ZMG.AX)

Zingmobile Group Limited, an investment holding company, publishes value-added mobile content, services, and applications for the mobile market primarily in Singapore. It provides ecommerce and mobile content services, technology related services, and mobile marketing solutions. The company also involves in the sale and licensing of multimedia applications. It offers Alchemy Platform that provides the tools to package, deliver, store, publish, analyze, review, and bill products and services, as well as manages and supports the delivery processes, including testing and quality control, pricing and packaging, catalogue management, and mobile device profiling. In addition, the company also offers Mobile 2.0, which provides various ways of payment and enables customers to download mobile contents on to their mobiles; and Mobiletainment that delivers mobile media contents to approximately 500 million mobile subscribers in the Asia Pacific region. It delivers its content, servic es, and applications through various advertising mediums, which include print media, television, and radio. Zingmobile Group Limited was founded in 2002 and is headquartered in Singapore.

Top 10 Wireless Telecom Companies To Own In Right Now: Service Corporation International(SCI)

Service Corporation International provides deathcare products and services in the United States, Canada, and Germany. Its funeral service and cemetery operations consist of funeral service locations, cemeteries, funeral service/cemetery combination locations, crematoria, and related businesses. The company provides various professional services relating to funerals and cremations, including the use of funeral facilities and motor vehicles, and preparation and embalming services. It also sells funeral related merchandise, including caskets, burial vaults, cremation receptacles, cremation memorial products, flowers, and other ancillary products and services at funeral service locations. The company?s cemeteries provide cemetery property interment rights, including mausoleum spaces, lots, and lawn crypts; and sell cemetery related merchandise and services comprising stone and bronze memorials, markers, merchandise installations, and burial openings and closings. It also sells preneed funeral and cemetery products and services whereby a customer contractually agrees to the terms of certain products and services to be delivered and performed in the future. As of December 31, 2009, Service Corporation operated 1,254 funeral service locations and 372 cemeteries, including 208 combination locations, covering 43 states in the United States, 8 Canadian provinces, the District of Columbia, and Puerto Rico, as well as 12 funeral homes in Germany. The company was founded in 1962 and is headquartered in Houston, Texas.

Top 10 Wireless Telecom Companies To Own In Right Now: Hitachi Ltd. (HIT)

Hitachi, Ltd. manufactures and sells electronic and electrical products primarily in Asia, North America, and Europe. Its Information & Telecommunication Systems segment provides systems integration, outsourcing services, software, disk array subsystems, servers, mainframes, telecommunications equipment, and ATMs. The company?s Power Systems segment offers thermal, nuclear, hydroelectric, and wind power generation systems. Its Social Infrastructure & Industrial Systems segment provides industrial machinery and plants, elevators, escalators, and railway vehicles and systems. The company?s Electronic Systems & Equipment segment offers semiconductor and LCD manufacturing equipment, test and measurement equipment, medical electronics equipment, power tools, and electronic parts manufacturing systems. Its Construction Machinery segment provides hydraulic excavators, wheel loaders, and mining dump trucks. The company?s High Functional Materials & Components segment offers wires and cables, copper products, semiconductor and display-related materials, circuit boards and materials, specialty steels, magnetic materials and components, and casting components and materials. Its Automotive Systems segment provides engine management systems, electric power train systems, drive control systems, and car information systems. Hitachi?s Components & Devices segment offers HDDs, LCDs, information storage media, and batteries. Its Digital Media & Consumer Products segment provides optical disk drives, flat-panel TVs, LCD projectors, mobile phones, room air conditioners, refrigerators, washing machines, and air-conditioning equipment. The company?s Financial Services segment offers leasing services and loan guarantees. Its Others segment provides logistics and property management services. The company serves industrial companies, financial institutions, utilities, governments, and individual customers. Hitachi was founded in 1910 and is headquartered in Tokyo, Ja pan.

Top 10 Wireless Telecom Companies To Own In Right Now: Multiband Corporation(MBND)

Multiband Corporation, together with its subsidiaries, provides contract installation services; voice, data, and video services; and design, engineering, and construction services in the United States. The company operates through three segments: Field Services (FS); Multi-Dwelling Unit (MDU); and Engineering, Energy & Construction (EE&C). The FS segment engages in the installation and servicing of DIRECTV video programming for residents of single family homes. It also offers installation services for broadband cable and Internet providers, and commercial customers. The MDU segment serves as a master service operator for DirecTV, a provider of satellite television services. It offers satellite television services to residents of multi-dwelling-units through a network of affiliated operators. As of March 15, 2012, this segment had approximately 112,000 owned and managed subscribers, with an additional 45,000 subscribers supported by the support center. The EE&C segment prov ides engineering and construction services for the wired and wireless telecommunications industry, including public safety networks. This segment also offers renewable energy services comprising wind and solar applications and other design and construction services. The company was formerly known as Vicom, Incorporated and changed its name to Multiband Corporation in July 2004. Multiband Corporation was founded in 1933 and is based in New Hope, Minnesota.

Top 10 Wireless Telecom Companies To Own In Right Now: Vaaldiam Resources Inc (VAA.TO)

Vaaldiam Mining Inc., a junior mining company, engages in the acquisition, exploration, and development of mineral properties. The company primarily owns diamond and exploration properties in Brazil. It holds a 100% interest in the Bra煤na gold project located within the Rio Itapicuru Greenstone Belt area in Brazil; holds a 100% interest in the Catal茫o diamond project that comprises 3 kimberlite pipe-like deposits covering a surface area of 0.75 hectares located in the state of Goi谩s, Brazil; and owns various exploration properties in Canada that are available for joint venture or purchase. The company also owns a portfolio of royalty and equity investments. Its portfolio covers gold in Africa, Peru, and the United States; copper in Peru; diamonds in Brazil; and titanium, zircon, and rutile in Kenya. The company was formerly known as Tiomin Resources Inc. and changed its name to Vaaldiam Mining Inc. in March 2010. Vaaldiam Mining Inc. is headquartered in Toronto, Canada.

2 Reasons a Microsoft Shake-Up Could Be a Good Thing

There's a lot of talk going around about a possible Microsoft (NASDAQ: MSFT  )  management shake-up. Although nothing has been formally announced, changes seem almost inevitable at Microsoft now, and there are two ways the company -- and its investors -- could benefit.

Focus, focus, focus
Microsoft can't be accused of being scatter-brained. For years, the company focused much of its attention on its Windows desktop software because that's where the money was. But as PC sales continue to decline, the Redmond company is looking to shift its focus to mobile -- easier said than done.

The first major move in this direction came when Microsoft introduced the Windows Phone OS and the Surface tablet. Bot of those initiatives were obviously a step in the right direction, but they were born out of necessity, rather than innovation. They came because Apple (NASDAQ: AAPL  ) and Google (NASDAQ: GOOG  ) were already grabbing up large shares of the mobile OS space and Microsoft needed to do something to keep up.

Apple propelled itself into mobile by launching one of the most innovative smartphones at the time, and then followed that up with the iPad. Google entered the market by buying up the Android platform and then turning it into the go-to operating system that makes up 75% of smartphone market share and 56% of tablet market share.

With these two companies firmly embedded into mobile, Microsoft has missed out on device sales, ecosystem sales, and consumer mindshare. A leadership and structural shake-up for the company could shift Microsoft out of playing catch-up and focus its attention on being a strong mobile contender. 

Product integration
In addition to a realignment of Microsoft's focus, a restructuring could help the company better integrate its devices and services -- like Google and Apple do -- in order to sell more products.

As it stands right now, Microsoft ranks No. 5 out of the top five tablet vendors, with just 1.8% of the tablet market share in Q1 2013, compared to Apple's 39.6%. When it comes to smartphone OS market share, Windows Phone makes up just 3.2% compared to Android's 75% and Apple's 17.3%.

Apple and Google don't just dominate these two mobile spaces because they got to the party first -- they dominate them because they make great software that works well with their services. For Apple, the pairing is all about its ecosystem. According to ABI Research, Apple is expected to earn $18 billion of the $27 billion app market this year. Google's made significant gains in the app space over the past year, but Apple's App Store brings in two times more revenue than Google's Play Store, and iPhone maker is expected to hold that lead.

Though Google takes second place in app store revenue, the company's mobile dominance comes from holding three-quarters of the mobile OS market. Combine that with its search dominance, email service, and advertising platform strength, and any app store purchases become icing on the cake.

Microsoft has yet to make such a splash with its product and services pairing. The company has built some of the most-used software on the planet, but its mobile software hasn't been nearly as successful.

The company doesn't just need a successful mobile app store -- that's just part of the equation -- it needs consumers to want to use its products and want to make purchases on them. This is what Microsoft lacks right now, and what its competitors are so good at. If Microsoft's CEO Steve Ballmer goes through with his rumored plans, then hopefully Microsoft's investors will see the company's focus narrow on offering its own amazing products that are tied to compelling services. Without that, the software giant will continue to fall behind the pack.

Though Microsoft is fighting against Google and Apple to stay relevant in mobile, there are two other big tech companies it needs to look out for as well. 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.

Top Life Sciences Stocks To Buy Right Now

Given that you clicked on this article, it seems safe to assume you either own stock in SVB Financial (NASDAQ: SIVB  ) or are considering buying shares in the near future. If so, then you've come to the right place. The table below reveals the nine most critical numbers that investors need to know about SVB Financial stock before deciding whether to buy, sell, or hold it.

SVB Financial is not your typical bank. Located in Northern California, it's the holding company for Silicon Valley Bank, a niche lender that focuses almost exclusively on companies in the technology, life sciences, and winery space. Think venture capital. "For nearly three decades," its website reads, "SVB Financial Group and its subsidiaries, including Silicon Valley Bank, have been dedicated to helping entrepreneurs succeed." And if its share-price performance is any indication, this model has succeeded. Over the past 10 years, the total return to shareholders has been 273%. For context, only a handful of banks exceeded the 100% mark over this same time period -- including JPMorgan Chase, Goldman Sachs, Wells Fargo, and PNC Financial -- and roughly half of the 100-plus banks I examined actually declined in value over the same time period.

Top Life Sciences Stocks To Buy Right Now: Altair Ventures Incorporated (AVX.V)

Altair Gold Inc. engages in the development and exploration of gold in Canada. Its projects include the Kena property that comprises 152 claims units covering 7,609 hectares located south of the Nelson town in southeastern British Columbia; and the Lobstick property, which consists of 32 claims units covering 512 hectares in northwestern Ontario. The company was formerly known as Altair Ventures Incorporated and changed its name to Altair Gold Inc. in September 2012. Altair Gold Inc. was incorporated in 2005 and is headquartered in Vancouver, Canada.

Top Life Sciences Stocks To Buy Right Now: Coffee Holding Co. Inc.(JVA)

Coffee Holding Co., Inc. engages in manufacturing, roasting, packaging, marketing, and distributing roasted and blended coffees in the United States and Canada. The company offers three categories of products: wholesale green coffee, private label coffee, and branded coffee. The wholesale green coffee product category consists of unroasted raw beans imported from worldwide that are sold to roasters and coffee shop operators in approximately 90 varieties. The private label coffee product category includes coffee roasted, blended, packaged, and sold under the specifications and names of others. As of October 31, 2010, the company supplied private label coffee under approximately 34 different labels to wholesalers and retailers in cans, brick packages, and instants in various sizes. The branded coffee product category comprises coffee roasted and blended to the company's own specifications and offered under its seven brand names in various segments of the market. The company also offers other products, including trial-sized mini-brick coffee packages; specialty instant coffees; instant cappuccinos and hot chocolates; and tea line products. Its coffee brands include Cafe Caribe, S&W, Cafe Supremo, Don Manuel, Fifth Avenue, Via Roma, IL CLASSICO, and Entenmann. Coffee Holding Co., Inc. markets its private label and wholesale coffee through trade shows, industry publications, face-to-face contacts, internal sales force, and non-exclusive independent food and beverage sales brokers, as well as through its Web site, coffeeholding.com. The company was founded in 1971 and is headquartered in Staten Island, New York.

Top Sliver Companies To Buy Right Now: Wintrust Financial Corporation(WTFC)

Wintrust Financial Corporation, through its subsidiaries, engages in community banking, specialty finance, and wealth management operations. Its Community Banking segment offers banking and financial services primarily to individuals, small to mid-sized businesses, local governmental units, and institutional customers. This segment?s products and services include deposit products, such as demand, negotiable order of withdrawal, money market, savings, and time deposit accounts; home equity, home mortgage, consumer, real estate, and commercial loans; safe deposit facilities; automated teller machines (ATMs); and Internet banking services. The company?s Specialty Finance segment offers financing for the payment of commercial insurance premiums to businesses and individuals; short-term accounts receivable financing; and out-sourced administrative services, including data processing of payrolls, billing, and cash management services to customers in the temporary staffing indu stry, as well as engages in the origination and purchase of residential mortgages for sale into the secondary market and provides the document preparation and other loan closing services to a network of mortgage brokers. This segment markets its products primarily through insurance agents and brokers. Its Wealth Management segment provides trust and investment services, asset management, and securities brokerage services, which are marketed primarily under the Wayne Hummer name. As of December 31, 2009, the company operated through 78 banking facilities, as well as owned 123 ATMs. Wintrust Financial Corporation was founded in 1992 and is based in Lake Forest, Illinois.

Top Life Sciences Stocks To Buy Right Now: Asia Fashion Holdings Limited (GH3.SI)

Asia Fashion Holdings Limited, an investment holding company, engages in the production, dyeing, and post-processing treatment of synthetic knitted fabrics primarily in the People�s Republic of China. The company�s fabrics products are used in various products, including casual wear, sportswear, shoes, and bags. It serves sportswear and sport shoes producers, garment producers, and fabric trading companies. The company was formerly known as Qian Feng Fabric Tech Limited and changed its name to Asia Fashion Holdings Limited in May 2011. Asia Fashion Holdings Limited was incorporated in 2007 and is based in Fuqing, the People�s Republic of China. Asia Fashion Holdings Limited is a subsidiary of Qian Feng Group Limited.

Top Life Sciences Stocks To Buy Right Now: Uravan Minerals Inc. (UVN.V)

Uravan Minerals, Inc., a development stage mineral exploration company, engages in the acquisition, exploration, and development of mineral properties in Canada. The company primarily explores for buried uranium deposits, as well as for rare earth elements, and nickel-copper-platinum group element deposits in under-explored areas. Its principal properties include the Outer Ring/Math, Johannsen, Halliday, Stewardson, Thluicho, and Poplar Point uranium projects located in the Athabasca Basin, northern Saskatchewan; the Garry Lake uranium project situated in the northeast Thelon Basin; and the Rottenstone nickel-copper-platinum group element property located in Saskatchewan. Uravan Minerals, Inc. is headquartered in Calgary, Canada.

U.S. Markets Poised to Follow Europe's Gains

The fear that gripped markets on Monday appears to have washed away, and Wall Street is preparing for another strong day of trading, according to the futures market. A liquidity crunch in China was a short-term fear on Monday, and now China's interest rates have fallen for four straight days, easing those fears.

Major European stock indexes have risen between 1% and 2.5%, boosted by China's falling interest rates and a confident German consumer. In June, a survey of German consumers swung back to positive territory, indicating that consumers expect the economy to improve in coming months. Incomes are also expected to rise, and German consumers, like those in the U.S., are still willing to spend at growing rates because of their economic bullishness. 

Add all of this up and the Dow Jones Industrial Average (DJINDICES: ^DJI  ) and S&P 500 (SNPINDEX: ^GSPC  ) are primed to rise 0.43% and 0.54%, respectively, in early trading -- at least that's what it looks like ahead of some earnings releases.

General Mills (NYSE: GIS  ) just reported fiscal fourth-quarter earnings that matched Wall Street's expectations. Revenue rose 8% in the quarter to $4.4 billion on an 11% volume increase, and earnings of $0.53 were in line with analyst estimates. For the full year, earnings of $2.69 per share were at the high end of the company's expectations. U.S. growth was pretty anemic, coming in at just 1% for the full year. But General Mills has been able to grow 24% internationally in fiscal 2013, and that has helped drive results.  

Monsanto (NYSE: MON  ) is also set to release earnings this morning, although the results aren't out as I write. Analysts expect earnings of $1.61 per share for the fiscal third quarter, and it will be interesting to see how the agriculture company's revenue and profit look considering the bad weather throughout the country. Wet weather in the Midwest and Southeast has pushed back and, in some cases, halted the planting season, and other companies are already feeling the pain.  

We're just more than a week away from earnings season, and it's time to turn our focus back to companies' fundamentals, rather than the daily news cycle.

General Mills' profit shows just how much companies are relying on international growth, and profiting from our increasingly global economy can be as easy as investing in your own backyard. The Motley Fool's free report "3 American Companies Set to Dominate the World" shows you how. Click here to get your free copy before it's gone.

Tuesday, June 25, 2013

5 Companies That Need to Put Their Board Members Out to Pasture

Last week, Men's Wearhouse  (NYSE: MW  ) founder and chairman George Zimmer was terminated by the company's board of directors. According to him, they did so because the board is choosing "to silence my concerns."

It's still too early to determine just who is at fault here. But it brings up an oft-overlooked issue: the sometimes hostile, sometimes too-close relationship between a public company's board of directors and the company's executives.

There are a lot of companies whose boards lean toward the "too-close" side of the spectrum, lavishing directors with cushy perks and benefits -- often at shareholders' expense. We'll take a closer look at five in particular in just a moment.

But first let's answer a very important question... 

What exactly is a board of directors supposed to do?
A board of directors is the primary governing force of a company. It is tasked with the duty to protect shareholders' money and ensure their investment continues to grow.

Members are charged with hiring and approving compensation for a company's CEO, approving major expenses, and overseeing major business decisions such as initial public offers, mergers, buyouts, and acquisitions.

A board usually consists of businessmen and women (but still mostly men, these days) who bring to the table a unique set of skills and experience that should help guide the company's direction. And for this experience and the time they spend working with the company, they get paid.

It's a sweet gig if you can get it
Polish up your resume, because according to MBA Online, "being on a board of directors is one of the most lucrative career options available."

The average director for an S&P 500 company earned $242,385 in pay and other benefits in 2012, according to Bloomberg BusinessWeek. All this for attending roughly eight meetings a year.

And therein lies the problem for shareholders. 

Obviously, such a cushy gig is difficult to walk away from -- and the numbers back this up. Sixty-four percent of directors at S&P 500 companies have served on the board for 10 to 15 years; another 5% have served for more than 15 years, according to executive recruiter Spencer Stuart.

And as time goes on, a director faces an internal dilemma: Do I question a company's decisions and direction at the risk of losing this lucrative source of income? Or do I largely remain silent and continue to collect my annual checks?

Unfortunately, most tend to choose the latter.

Data show that the longer someone serves on a company's board of directors, the less committed that director is to their primary tasks, according to Jim Westphal, a professor at the University of Michigan's school of business. They ultimately turn into "zombie directors," according to Patrick McGurn, special counsel for Institutional Shareholder Services.

And as their oversight begins to falter, shareholders (as individual investors, mutual funds, and pension funds) are often the ones who ultimately suffer.

Long live the board!
So let's take a look at five companies that are lining their directors' and executives' pockets -- and could have detrimental long-term effects on the business:

Company

Average Board Tenure

Average Board Compensation

5-Year Absolute Stock Return

Problem

Tootsie Roll Industries  (NYSE: TR  )

30 years

$84,533

49%

CEO Melvin Gordon and his wife, President Ellen Gordon (ages 93 and 81, respectively), who are also board members, own the bulk of the company's stock and receive some cushy perks, including access to a company plane valued at more than $1 million and $10,000 a month to assist with the cost of an apartment. They have established what The Wall Street Journal calls a "secret empire" of board members who refuse to share information with analysts and shareholders.

Oracle  (NASDAQ: ORCL  )

14.8 years

$615,866

56%

Oracle's board -- chock-full of insiders -- has some of the highest-compensated board members in the world.

Abercrombie & Fitch  (NYSE: ANF  )

8.4 years

$214,546

-24%

These heavily entrenched board members continue to lavishly pay the company's CEO, regardless of the company's performance. CEO Michael Jeffries was paid $8.2 million last year, despite the stock dropping more than 30%.

Fidelity National Information Services  (NYSE: FIS  )

5.8 years

$1,802,249

114%

The average board compensation for this company is inflated because they agreed to convince 68-year-old director William Foley II to stick around another three years. The tab for that move? $9.5 million cash.

Goldman Sachs  (NYSE: GS  )

5.7 years

$419,958

-8%

Pay for board members at Goldman has steadily risen since the financial crisis. The company says it's to reflect the high level of experience needed, but -- as mentioned above -- rising pay makes it less likely for directors to shake things up, regardless of how necessary it may be.

Source: Author's calculations based on SEC filings. Board tenure includes employee directors; board compensation does not include employee directors.

Of course, when a board of directors is so entrenched with a company's management  -- monetarily, through tenure, and through personal friendship -- replacing a board of directors can be a tough battle. So it may be a lost cause.

Nevertheless, it serves as a good reminder to be cognizant of how independent the board of directors really is before investing in shares of any publicly traded company.

BlackBerry Launches Secure Work Space for Android and iOS

Today BlackBerry (NASDAQ: BBRY  ) launched Android and iOS integration for its Secure Work Space enterprise system -- allowing users to separate their personal data and apps from work data and apps. 

The new feature, which is part of BlackBerry's Enterprise Service 10, provides businesses a secure way to integrate bring-your-own-device policies while protecting business data. The company launched its BlackBerry Enterprise Service back in January and has been globally testing iOS and Android integration since then.  

The company said in a press release that iOS and Android users will be able to access email and attachments, view their calendar and contacts, and securely browse intranets through the Secure Work Space system.

Thierry Lammers, BlackBerry's director and co-founder of e-office mobile, said, "Secure Work Space builds on BlackBerry Enterprise Service 10, and we found that BlackBerry's secure infrastructure offered our company the best containerization solution to help mobilize our multi-platform environment, while maintaining a great user experience."

According to the release, BlackBerry will offer the new Android and iOS integration to its Enterprise Service Customers over the coming months. 

Today's Skyrocketing Home Prices May Not Last

The past week on Wall Street was dominated by China and Ben Bernanke, but if an economic storm is brewing in China or the Fed is about to hike interest rates, you wouldn't know it from today's economic data. S&P/Case-Shiller home price data was released this morning: In April the 20-city composite rose 2.5% from a month earlier and 12.1% from a year ago. San Francisco posted the largest price rise at 23.9% -- an incredible figure that's unsustainable in the long term.  

Further, the Conference Board's consumer confidence reading jumped to 81.4 in June -- the highest level since January of 2008. Consumer confidence has bounced around in recent months, but the general trend has shown confident consumers despite higher taxes in 2013 and relatively weak economic growth. 

Finally, durable-goods orders rose 3.6% in May on the back of some big orders for passenger planes. All of this positive data has washed away fears that gripped the market over the past week, and near the end of trading the Dow Jones Industrial Average (DJINDICES: ^DJI  ) is up 0.8%, while the S&P 500 (SNPINDEX: ^GSPC  ) has climbed 1%. 

The housing news has been a boon for big banks like Bank of America (NYSE: BAC  ) and JPMorgan Chase (NYSE: JPM  ) , which are up 3.3% and 2.6%, respectively. Even when customers default on their mortgages, there's a growing likelihood that banks can get their money back if home prices are rising. But there's another side to this positive economic news that will impact banks in the long term.

Last week, the Fed's talk of paring back quantitative easing was based on a strengthening economy, and one of the side effects of tapering is higher interest rates. That means higher mortgage rates, which may have a negative impact on home prices and the number of home sales. The homes that were purchased in April and were included in the Case-Shiller data wouldn't have been hit by the higher mortgage rates of the past month, and there will be a lag of a few months before the effects of these higher rates become apparent.

As fellow Fool Dan Dzombak noted earlier today, a 30-year mortgage that went for 3.75% a month ago is now at 4.51%, which has a huge impact on a monthly payment. We may see mortgage applications dry up in the summer, and housing may not look so good in a few months if the higher rates continue. So don't jump to the conclusion that big banks are out of the woods yet.

Many investors are scared about investing in big banking stocks after the crash, but the sector has one notable standout. In a sea of mismanaged and dangerous peers, it stands out as "The Only Big Bank Built To Last." You can uncover the top pick that Warren Buffett loves in The Motley Fool's new report. It's free, so click here to access it now.

Why Lululemon Shares Turned Sour

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 lululemon athletica (NASDAQ: LULU  ) plummeted 17% today, after the yoga-gear retailer announced that CEO Christine Day is stepping down.

So what: Lululemon posted first-quarter results that managed to top Wall Street, but Day's surprise move raises another cloud of uncertainty over the company's future. While Day called it a "personal decision," the recent costly recall of super-sheer pants, coupled with other management departures of late, suggests that the announcement might be a tipping point for the company.

Now what: Lululemon has formed a search committee and enacted its CEO succession plan. "Now is the right time to bring in a CEO who will drive the next phase of lululemon's development and growth," Day said in a statement. "I will continue to actively lead the organization while the board searches for a new CEO, and will work to ensure a smooth transition."

When you couple all the uncertainty surrounding the stock with its still-lofty 35-plus P/E, however, I'd wait for an even bigger pullback before buying into that optimism.  

Interested in more info on Lululemon? Add it to your watchlist.

Best Machinery Stocks To Buy Right Now

"History must repeat itself because we pay such little attention to it the first time." (Blackie Sherrod, sportswriter born 1919 and still "kicking")

On April 8th, we learned that General Electric (GE) would be acquiring Lufkin Industries (LUFK). The deal is one of the three largest in the oilfield machinery and equipment industry during the past decade, and sets the stage for further acquisitions in this sector. Investors should start considering which companies might be next.

Bloomberg had been saying since September 2012 that LUFK was a takeover target when its stock had fallen to the lowest price in 3 years. "Lufkin will more than double GE's share of the artificial lift segment and give it about 15 percent market share," Julian Mitchell, an analyst at Credit Suisse in New York wrote in a note to clients.

Best Machinery Stocks To Buy Right Now: First Majestic Silver Corp.(AG)

First Majestic Silver Corp. engages in the production, development, exploration, and acquisition of mineral properties with a focus on silver in Mexico. The company owns interests in La Encantada Silver Mine comprising 4,076 hectares of mining rights and 1,343 hectares of surface land located in Coahuila; La Parrilla Silver Mine consisting of mining concessions covering an area of 69,867 hectares; and San Martin Silver Mine comprising approximately 7,841 hectares of mineral rights and approximately 1,300 hectares of surface land rights located in Jalisco. It also holds interests in Del Toro Silver Mine consisting of 393 contiguous hectares of mining claims and an additional 129 hectares of surface rights located in Zacatecas; Real de Catorce Silver Project comprising 22 mining concessions covering 6,327 hectares located in San Luis Potosi state; and Jalisco Group of Properties consisting of mining claims totalling 5,240 hectares located in Jalisco. The company was founded in 1979 and is headquartered in Vancouver, Canada.

Advisors' Opinion:
  • [By Sy_Harding]

    First Majestic Silver is one of the purest silver plays on the market. The company owns and operates three primary silver mines in Mexico: La Parrilla, San Martin, and La Encantada.

    Shares of AG have risen more than 60% for the year.

    First Majestic generates 85% of its revenue through the production and sale of silver. The rest of the company's revenue is generated through gold, lead, and zinc.

    First Majestic expects to increase total silver output from its operations to 7.5 million ounces of silver in 2011, and up to 16.0 million ounces by 2014.

Best Machinery Stocks To Buy Right Now: Rockwell Automation Inc.(ROK)

Rockwell Automation, Inc. provides industrial automation power, control, and information solutions. It operates in two segments, Architecture and Software, and Control Products and Solutions. The Architecture and Software segment offers control platforms that perform multiple control disciplines and monitoring of applications, including discrete, batch and continuous process, drives control, motion control, and machine safety control; and products comprising controllers, electronic operator interface devices, electronic input/output devices, communication and networking products, and industrial computers. This segment also offers software products, such as configuration and visualization software used to operate and supervise control platforms, advanced process control software, and manufacturing execution software to enhance manufacturing productivity and meet regulatory requirements; and rotary and linear motion control products, and sensors and machine safety components . The Control Products and Solutions segment provides low and medium voltage electro-mechanical and electronic motor starters, motor and circuit protection devices, AC/DC variable frequency drives, push buttons, signaling devices, termination and protection devices, relays and timers, and condition sensors; and packaged solutions, such as configured drives and motor control centers to automation and information solutions, as well as life-cycle support services. The company sells its products, solutions, and services primarily under the Rockwell Automation, Allen-Bradley, A-B, and Rockwell Software brand names to the food and beverage, transportation, oil and gas, metals, mining, home and personal care, pulp and paper, and life sciences markets through independent distributors and direct sales force in the United States, Canada, Europe, the Middle East, Africa, the Asia Pacific, and Latin America. Rockwell Automation, Inc. was founded in 1928 and is headquartered in Milwaukee , Wisconsin.

10 Best Mid Cap Stocks To Own Right Now: Cummins Inc.(CMI)

Cummins Inc. designs, manufactures, distributes, and services diesel and natural gas engines, electric power generation systems, and engine-related component products worldwide. It operates in four segments: Engine, Power Generation, Components, and Distribution. The Engine segment offers a range of diesel and natural gas powered engines under the Cummins and other customer brand names for the heavy-and medium-duty truck, bus, recreational vehicle, light-duty automotive, agricultural, construction, mining, marine, oil and gas, rail, and governmental equipment markets. This segment also provides new parts and service, as well as remanufactured parts and engines. The Power Generation segment offers power generation systems, components, and services, including diesel, natural gas, gasoline, and alternative-fuel electrical generator sets for use in recreational vehicles, commercial vehicles, recreational marine applications, and home stand-by or residential applications. This segment also provides components that make up power generation systems, such as engines, controls, alternators, transfer switches, and switchgears. The Components segment supplies filtration products, turbochargers, aftertreatment systems, intake and exhaust systems, and fuel systems for commercial diesel applications. This segment offers filtration and exhaust systems for on-and off-highway heavy-duty and mid-range equipment, as well as supplies filtration products for industrial and passenger car applications. This segment also develops after treatment and exhaust systems to help customers meet emissions standards and fuel systems. The Distribution segment provides parts and services, as well as service solutions, including maintenance contracts, engineering services, and integrated products. The company sells its products to original equipment manufacturers, distributors, and other customers. Cummins Inc. was founded in 1919 and is headquartered in Columbus, Indiana.

Advisors' Opinion:
  • [By Matthew Scott]

    While trucking manufacturing Cummins (NYSE: CMI) is hardly a sexy stock, fleets of environmentally friendly trucks will be essential for many world economies to remain competitive as they slowly make their way out of the last recession. The price of Cummins’ stock has increased more than five and a half times in two years, jumping from $19.09 on March 9, 2009 to $109.62 at the end of the first quarter this year. As world economies begin to improve, transportation companies will begin replacing trucks so that they can move higher volumes of products more efficiently, and Cummins will benefit.

Best Machinery Stocks To Buy Right Now: Barnes Group Inc (B)

Barnes Group Inc. is an international aerospace and industrial components manufacturer and logistics services company serving a range of end markets and customers. The products and services provided by Barnes Group are critical components for applications, which provide transportation, communication, manufacturing and technology. The Company operates under two global business segments: Logistics and Manufacturing Services, and Precision Components. On December 30, 2011, the Company sold its Barnes Distribution Europe (BDE) business to Berner SE. In August 2012, the Company acquired Synventive Molding Solutions.

Logistics and Manufacturing Services

Logistics and Manufacturing Services provides logistics support and repair services. Value-added logistics support services include inventory management, technical sales, and supply chain solutions for maintenance, repair, operating, and production supplies and services. Repair services provided include the manufacturing of spare parts for the refurbishment and repair of engineered components and assemblies for commercial and military aviation. Logistics and Manufacturing Services has sales, distribution, and manufacturing operations in the United States, Brazil, Canada, China, France, Mexico, Singapore, Spain and the United Kingdom. Products and services are available in more than 30 countries.

The global operations are engaged in supplying, servicing and manufacturing of maintenance, repair and operating components. Activities include logistics support through vendor-managed inventory and technical sales for stocked replacement parts and other products, catalog offerings and custom solutions, and the manufacture and delivery of aerospace aftermarket spare parts, including the revenue sharing programs (RSPs) under, which the Company receives right to supply designated aftermarket parts over the life of the related aircraft engine program, and component repairs. In addition, the manufacturing and supplying of aerospace! aftermarket spare parts, including the RSPs, are dependent upon the reliable and timely delivery of components.

Precision Components

Precision Components is a global supplier of engineered components for critical applications focused on providing solutions for a industrial, transportation and aerospace customer base. It is equipped to produce every type of precision spring, from fine hairsprings for electronics and instruments to heavy-duty springs for machinery, as well as precision-machined and fabricated components and assemblies for OEM turbine engine, airframe and industrial gas turbine builders globally, and the military. It is also a manufacturer and supplier of precision mechanical products, including precision mechanical springs, compressor reed valves and nitrogen gas products. Precision Components also manufactures punched and fine-blanked components used in transportation and industrial applications, nitrogen gas springs and manifold systems used to control stamping presses, and retention rings, which position parts on a shaft or other axis.

Precision Components has a customer base with products purchased by durable goods manufacturers located in industries, including transportation, consumer products, farm equipment, telecommunications, medical devices, home appliances and electronics, and airframe and gas turbine engine manufacturers for commercial and military jets, business jets, and land-based industrial gas turbines. Long-standing customer relationships enable Precision Components to participate in the design phase of components and assemblies, through which customers receive the benefits of manufacturing research, testing and evaluation. Products are sold through Precision Components��direct sales force and a distribution channel. Precision Components has manufacturing, sales, assembly and distribution operations in the United States, Brazil, Canada, China, Germany, Korea, Mexico, Singapore, Sweden, Switzerland, Thailand and the United Kingdo! m.