Friday, January 31, 2014

Swiss voters reject proposal to cap executive pay

switzerland vote pay cap

The campaign to cap executive pay at 12 times the lowest salary was led by young members of Switzerland's Social Democratic party.

LONDON (CNNMoney) Swiss voters overwhelmingly rejected a proposal to cap the salaries of top executives Sunday, heeding warnings that the limit could damage its economy and businesses.

The "1:12 -- for fair wages" initiative, which proposed capping executive salaries at 12 times the lowest paid employee's, was rejected by 65.3% of voters, and failed to win majority support in any of the country's 26 districts.

The vote means that Swiss-based executives at companies such as UBS, (UBS) Credit Suisse (CREDIT SUISSE AG), Novartis (NVS)or Glencore Xstrata (GLCNF), will still be able to earn salaries worth more in a month than their lowest paid workers make in a year.

Switzerland's constitution allows four popular initiatives to be put to a national vote each year, provided the organizers gather 100,000 signatures in support.

In order to force a change in the law, the initiative would have needed to be approved by a majority of the electorate and the country's 26 cantons, or districts.

The Swiss federal government and parliament had recommended voting against the cap, joining business leaders in warning that it could force some companies to leave the country and others to shed jobs.

Switzerland is a wealthy country, enjoying above average rates of growth and employment and relatively short working hours. The average household has net disposable income of about $30,000, compared with the OECD average of $23,000.

But OECD figures also show a considerable gap between rich and poor -- the top 20% of the population earn nearly five times as much as the bottom 20% -- and anger at growing inequality has been increasing as executive pay packages soar.

Examples of excess -- such as a plan by Novartis, subsequently dropped, to pay its outgoing chairman nearly $78 million over six years -- gave the 1:12 campaign momentum.

Some of Switzerland's neighbors have also responded to popular anger over executive pay at a time of record unemployment and stagnant wages.

EU policymakers are hoping to limit bonuses for any banker earning more than 500,000 euros a year (or $678,000 U.S.). The maximum payout would be equal to annual salary or twice salary if a majority of shareholders approve.

The cap -- which is being challenged in court by the British government -- would apply globally to banks based in the EU, and to international ! banks operating within Europe. It could affect more than 35,000 bankers around the world, the vast majority of them in London. To top of page

Thursday, January 30, 2014

Cash Gushes Into Stock Funds

Inflows last week into U.S. stock mutual funds and exchange-traded funds were the most in two months, with investors pumping money into stock funds as the S&P 500 rose again to record highs.

Investors placed $11.5 billion into both U.S. stock mutual funds and ETFs in the week ended Oct. 23, according to fund tracker Lipper. Last week’s intake was the largest since Sept. 18, and compares with an inflow of $9.7 billion in week ended Oct. 16.

Traditional U.S. stock mutual funds, excluding ETFs, took in $4 billion, the largest single-week gain since the week of Jan. 9, towering over the $915 million that flowed in during the previous week.

Domestic stock ETFs received $7.5 billion, compared with $8.8 billion a week earlier.

The biggest takers among ETFs all are made up of U.S. stock funds. The market's behemoth, the $156 billion SPDR S&P 500 ETF(SPY5.LN) (SPY), took in $2.9 billion last week. Enthusiasm for tech stocks saw the Nasdaq-100 Index tracking PowerShares QQQ (QQQ) rake in $1 billion, while the SPDR S&P MidCap 400 (MDY) absorbed $750 million.

Demand picked up for funds made up of overseas stocks as well. International equity mutual funds and ETFs took in $4.2 billion last week, also the most in two months. Investors have been particularly keen on Europe, where signs of stability for are cropping up for the first time in years. Investors poured $5 billion into European stock mutual funds and ETFs last week, the most ever, according to Michael Hartnett, chief investment strategist at Bank of America Merrill Lynch.

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Europe-based stock funds have soaked up cash for 17 consecutive weeks.

The S&P is sitting less than one point beneath a new record. Stocks have been pushing higher since lawmakers averted a U.S. debt crisis earlier and as concerns that the Federal Reserve will start to cut back its stimulus efforts this year recede.

Wednesday, January 29, 2014

Why Caution Is Prevailing in Biotechs Into and After Earnings

Biotechnology stocks struggled on Wednesday after Biogen Idec Inc. (NASDAQ: BIIB) surprised investors with weaker-than-expected guidance for 2014 earnings.

The struggles also may be due to simple profit-taking. Stocks in the group had huge gains in 2013; the Amex Biotechnology Index jumped 50%. The index is up 8% in January, despite the soft market overall.

Biogen Idec earned $2.34 a share after one-time charges in the fourth quarter, six cents better than expected and up from $1.40 a year ago. The profit jump was due to strong sales of its new multiple sclerosis drug Tecfidera. Revenue jumped 39% to $1.97 billion, ahead of the consensus estimate of 1.93 billion.

The stock slumped after Biogen offered 2014 earnings guidance of $11.00 to $11.20 a share, less than the Street estimate of $11.63. The company sees revenue growing 22% to 25%, better than the Street estimate of 20% growth.

In late-morning trading, the shares were down 58 cents, or 0.2%, to $305.08, after falling to as low as $292.82. Biogen shares soared 91% in 2013.

Biogen’s results came after Amgen Inc. (NASDAQ: AMGN) also beat estimates late Tuesday. Profit was up some 30% in the quarter to $1.81 a share, helped in part by a lower tax rate. That beat the Street estimate of $1.64. Revenue was up 13% to $5.01 billion. The company expects 2014 earnings of $7.90 to $8.20. The Street consensus is $8.18. The guidance disappointed investors who wanted more.

Amgen shares were down 33 cents to $120.37. The shares are up about 5.5% this month after a 32.3% gain in 2013.

Two more important biotech companies will report in the few days.

First up is Celgene Corp. (NASDAQ: CELG), which reports before Thursday’s open. The company is expected to earn $1.54 a share, up from $1.32 a year ago. Revenue is forecast at $1.72 billion, 19.1% higher than a year ago.

Shares were up two cents Wednesday to $160, after falling to as low as $156.28. The shares had gained 115.3% in 2013, but they are down 5.2% this month.

Gilead Sciences Inc. (NASDAQ: GILD) reports after Tuesday’s close. Analysts expect $0.50 per share in earnings, unchanged from a year ago. The consensus revenue estimate is $2.85 billion, up 10.3% year over year.

Shares were down 37 cents, or 0.5%, to $80.37. They are still up about 7% for the month, after a 104.4% gain in 2013.

Tuesday, January 28, 2014

Commentary: The sad tale of Tom Perkins

SAN FRANCISCO – It's difficult writing a column while holding your nose, but I'll give it the old college try.

Repugnant as the task may be, it's necessary to fill in the general public on the travails of Tom Perkins, co-founder of venerable venture-capital firm Kleiner Perkins Caufield & Byers. Perkins had the unmitigated gall – OK, inexplicable ignorance – to compare the persecution of Jews in Nazi Germany with the Occupy Movement and recent anti-gentrification protests against the tech industry here.

In a letter to the Wall Street Journal this weekend, Perkins used the term kristallnacht to describe what's happening to the nation's 1%. "This is a very dangerous drift in our American thinking," Perkins wrote. "Kristallnacht was unthinkable in 1930; is its descendent 'progressive' radicalism unthinkable now?"

Kristallnacht ("night of broken glass") refers to a notorious incident in 1938, when Nazis killed at least 91 Jewish people and arrested 30,000.

The immediate blowback to Perkins was harsh – VC Marc Andreessen tweeted, "I wish to express my extreme displeasure with Tom Perkins. His positions just go to prove that he is the leading [a%()&#e] in the state." Perkins apologized to the Anti-Defamation League and on Bloomberg TV.

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"It was a terrible word to have chosen. I, like many, have tried to understand the 20th Century and the incomprehensible evil of the Holocaust," Perkins said in a TV interview on Monday. "It can't be explained. Even to try to explain it is questionable. It's wrong. It's evil."

The public meltdown of Perkins is unfortunate and sad. He arguably helped build Silicon Valley and has been a generous, friendly source over the years.

But his misguided letter highlights what many perceive as a self-entitled, boorish attitude among the affluent in tech and in other i! ndustries. That viewpoint has stoked a swell of resentment here toward tech companies that enjoy the benefits of the city (read: tax breaks and sweetheart land deals) while turning a blind eye toward an alarming rise in monthly rental costs and evictions. Amid grand, percolating wealth, San Francisco struggles with services for the homeless, child care and public education.

A vocal few, like Salesforce.com Marc Benioff, are attempting to bridge the sides.

The bubble in which Perkins resides isn't new, but it is expanding. The disparity of wealth isn't just alarming in Silicon Valley: The 85 richest people have as much wealth as half the world's population, according to a report out of the World Economic Forum in Davos, Switzerland, last week.

What's happening in San Francisco is a microcosm of a bigger issue. Perhaps in the ghastly aftermath of the Perkins affair, we should thank him for shining klieg lights on a problem that is often overlooked but begs for attention.

Saturday, January 25, 2014

Market Wrap-Up for Sept. 5 (WAG, LTD, CPB, DE, more)

Out of the gate today, stocks rose mostly higher, as investors went into buy mode following the release of a number of economic indicators that beat analysts’ estimates. However, that bit of euphoria soon wore off and stocks came back to earth, especially as the yield on the 10 Year U.S Treasury Note started to close in on 3.00%. By the close, the major indices were just able to squeak out gains.

Stocks on the Rise

Among the stocks that closed in positive territory today were Alliant Technologies (ATK), Carlyle Group (CG), and Kaydon Corp. (KDN), after these companies announced various acquisitions. Walgreen Company (WAG) shares rallied as well, following its release of better-than-expected August sales.

Furthermore, Omnicom Group (OMC) and Humana Inc. (HUM) shares rose into positive territory following Wall Street analysts’ upgrades.

Stocks on the Decline

In contrast, shares of L Brands (LTD

Friday, January 24, 2014

Nutrition Facts Label to Get Much-Needed Makeover

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FDA Nutrition Facts LabelJ. David Ake/AP WASHINGTON -- After 20 years, the nutrition facts label on the back of food packages is getting a makeover. Knowledge about nutrition has evolved since the early 1990s, and the Food and Drug Administration says the labels need to reflect that. Nutritionists and other health experts have their own wish list for label changes. The number of calories should be more prominent, they say, and the amount of added sugar and percentage of whole wheat in food should be included. They also want more clarity on serving sizes. "There's a feeling that nutrition labels haven't been as effective as they should be," says Michael Jacobson of the Center for Science in the Public Interest. "When you look at the label, there are roughly two dozen numbers of substances that people aren't intuitively familiar with." For example, he says, most of the nutrients are listed in grams, a basic unit of the metric system. Jacobson says people don't really understand what a gram is. Michael Taylor, the FDA's deputy commissioner for foods, says 20 years ago "there was a big focus on fat, and fat undifferentiated." Since then, health providers have focused more on calories and warned people away from saturated and trans fats rather than all fats. Trans fats were separated out on the label in 2006. "The food environment has changed and our dietary guidance has changed," says Taylor, who was at the agency in the early 1990s when the FDA first introduced the label at the behest of Congress. "It's important to keep this updated so what is iconic doesn't become a relic." The FDA has sent guidelines for the new labels to the White House, but Taylor would not estimate when they might be released. The FDA has been working on the issue for a decade, he said. There's evidence that more people are reading the labels in recent years. An Agriculture Department study said 42 percent of working adults used the panel always or most of the time in 2009 and 2010, up from 34 percent two years earlier. Older adults were more likely to use it. The revised label is expected to make the calorie listing more prominent, and Regina Hildwine of the Grocery Manufacturers Association said that could be useful to consumers. Her group represents the nation's largest food companies. Hildwine said the FDA also has suggested that it may be appropriate to remove the "calories from fat" declaration on the label. It's not yet clear what other changes the FDA could decide on. Nutrition advocates are hoping the agency adds a line for sugars and syrups that are not naturally occurring in foods and drinks and are added when they are processed or prepared. Now, some sugars are listed separately among the ingredients and some are not. It may be difficult for the FDA to figure out how to calculate added sugars, however. Food manufacturers are adding naturally occurring sugars to their products so they can label them as natural -- but the nutrition content is no different.

Thursday, January 23, 2014

Stocks Hitting 52-Week Highs

Union Pacific (NYSE: UNP) shares gained 3.32% to touch a new 52-week high of $174.10 after the company reported a gain in its fourth-quarter profit.

Southwest Airlines Co (NYSE: LUV) shares reached a new 52-week high of $21.99 after the company reported a strong rise in its fourth-quarter profit.

Netflix (NASDAQ: NFLX) shares touched a new 52-week high of $392.023 after the company reported better-than-expected fourth-quarter results.

Silicom (NASDAQ: SILC) shares reached a new 52-week high of $60.71 as the company announced upbeat quarterly results.

Posted-In: 52-Week HighsNews Intraday Update Markets Movers

(c) 2014 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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Monday, January 20, 2014

All Clear for CBS to Surge Higher?

With shares of CBS Corp. (NYSE:CBS) trading around $53, is CBS an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework.

T = Trends for a Stock’s Movement

CBS operates as a mass media company in the United States and abroad. The company operates in the entertainment, cable networks, publishing, local broadcasting, and outdoor segments. Consumers seek entertainment of various forms and through an array of platforms at an increasing rate, and through its segments, CBS is able to fulfill consumer needs as it continues to release content that excites the masses. Consumers around the world always seek varied forms of entertainment, and CBS is dedicated to delivering that media, which can only lead to growth and rising profits well into the future.

CBS and Time Warner Cable's (NYSE:TWC) battle over retransmission fees has now been settled, to the advantage of CBS. Time Warner Cable is being forced to pay a significant increase in retransmission fees, although the figure is still below $2 per subscriber per month. The blackout of CBS programming from Time Warner Cable is now ending, just in time for the start of the NFL season.

T = Technicals on the Stock Chart Are Strong

CBS stock has been surging higher in recent years. The stock is now consolidating near all-time highs and looks poised to continue. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, CBS is trading above its rising key averages, which signals neutral to bullish price action in the near term.

CBS

Source: Thinkorswim

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

Implied Volatility (IV)

30-Day IV Percentile

90-Day IV Percentile

CBS Options

29.91%

83%

81%

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

Put IV Skew

Call IV Skew

September Options

Flat

Average

October Options

Flat

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Average

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

E = Earnings Are Rising Quarter Over Quarter

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

2013 Q2

2013 Q1

2012 Q4

2012 Q3

Earnings Growth (Y-O-Y)

16.92%

27.78%

9.32%

20.00%

Revenue Growth (Y-O-Y)

6.42%

6.43%

2.99%

1.58%

Earnings Reaction

3.86%

2.04%

3.95%

1.05%

CBS has seen rising earnings and revenue figures over the last four quarters. From these numbers, the markets have been upbeat about CBS’s recent earnings announcements.

P = Excellent Relative Performance Versus Peers and Sector

How has CBS stock done relative to its peers – Comcast (NASDAQ:CMCSA), 21st Century Fox (NASDAQ:FOXA), and Disney (NYSE:DIS) — and sector?

CBS

Comcast

21st Century Fox

Disney

Sector

Year-to-Date Return

40.55%

1.88%

45.43%

23.54%

29.67%

CBS has been a relative performance leader, year to date.

Conclusion

CBS is one of the largest nationwide providers of entertainment and mass media services. The company's dispute with Time Warner Cable is now settled, to the benefit of CBS. The stock has been surging higher in recent years and looks poised to continue. Over the last four quarters, earnings and revenues have been rising, which has led to upbeat investors in the company. Relative to its peers and sector, CBS has been a year-to-date performance leader. Look for CBS to continue to OUTPERFORM.

Sunday, January 19, 2014

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McDonald's� (NYSE: MCD  ) �has elected Steve Easterbrook�as its new executive vice president and global chief brand officer. The 18-year McDonald's veteran returns to the company following a stint as the CEO of Wagamama, a U.K.-based Japanese noodle restaurant chain.

Easterbrook will be responsible for global marketing, menu development, and consumer and business insights. He replaces Kevin Newell, who recently assumed the new role of chief brand and strategy officer for McDonald's�USA.�

A U.K. native, Easterbrook became CEO of McDonald's U.K. in 2006. By the end of 2010, after serving as corporate vice president and chief brand officer, he was promoted to president of McDonald's Europe, a role in which he was responsible for around 7,000 restaurants in 39 countries. He left McDonald's the following year to become the CEO of U.K. chain PizzaExpress, and from there he took the reins at Wagamama.

"Steve has demonstrated dynamic leadership and creative thinking within the restaurant industry and throughout his previous career at�McDonald's," said McDonald's President and CEO Don Thompson. "I'm thrilled to welcome him back to the Golden Arches and confident that with his expertise, we will reach customers in new and innovative ways."

5 Best Gold Stocks To Invest In 2014: Goldcorp Incorporated(GG)

Goldcorp Inc. engages in the acquisition, exploration, development, and operation of precious metal properties in Canada, the United States, Mexico, and Central and South America. It produces and sells gold, silver, copper, lead, and zinc. The company was founded in 1954 and is headquartered in Vancouver, Canada.

Advisors' Opinion:
  • [By Itinerant]

    In a series of recent articles we investigated the country risk of various mining jurisdictions in which US-listed precious metal miners are active. We collated country risk ratings for these countries from eight different sources and averaged these ratings into compounded country risk scores. The most recent results from this work can be found in this article. Most definitions of country risk include factors such as political risk, exchange rate risk, economic risk, sovereign risk, transfer risk, socio-economic risk and others. Depending on the source, various contributing factors of country risk are weighted differently. Readers interested in the specific definitions are encouraged to follow the links to our sources given in this article. We used our compounded country risk score to evaluate country risk exposure for selected gold and silver mining companies using 2011 production results and reserve statements. As 2012 data becomes available we are providing updates and in the present article we would like to do so for Goldcorp (GG).

  • [By Jim Jubak]

    As sure as April showers bring May flowers, January brings reserve updates from gold mining companies that foreshadow the annual earnings reports that these companies will issue in February. Yamana Gold (AUY) and Randgold Resources (GOLD) initiate the February earnings parade from gold mining companies, with reports on February 2 and 3, respectively. Kinross Gold (KGC) follows on February 12 with Goldcorp (GG) and Barrick Gold (ABX) reporting on February 13. Newmont Mining (NEM) issues its numbers on February 20.

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

Advisors' Opinion:
  • [By Dan Caplinger]

    One way Yamana has kept its competitive cost advantage is through extensive sales of base-metal byproducts like copper and zinc, as both it and fellow low-cost rival Goldcorp (NYSE: GG  ) benefit from utilizing those secondary metals to offset the cost of their gold production. Peers Gold Fields (NYSE: GFI  ) and AngloGold Ashanti (NYSE: AU  ) , on the other hand, face much higher costs in part because of their exposure to South Africa and its unstable labor market.

  • [By Jim Woods]

    A day earlier, Kinross Gold (KGC) suspended its semiannual dividend, and it also announced a delay in its decision on future expansion of the mill at the Tasiast mine in Africa. Finally, about a week later, AngloGold Ashanti (AU) — the third-largest producer of the yellow metal — suspended its dividend on poor earnings due to declining gold prices.

  • [By Rich Duprey]

    Considering the work stoppages and violent clashes that have become the norm at South African precious-metals mines, perhaps the miners were wondering exactly what they were getting for their money. An expose by South Africa's Daily Maverick has uncovered a system where miners such as AngloGold Ashanti (NYSE: AU  ) and BHP Billiton (NYSE: BHP  ) surreptitiously paid for the salaries of the heads of the local mining unions to keep the mine workers in line, and it's only because the miners sought to end the "uncomfortable arrangement" with the unions that the matter came to light.

  • [By Profit Confidential]

    Graham Ehm, Executive Vice President of South African-based AngloGold Ashanti Limited (NYSE: AU), one of the biggest gold producers in the global economy, stated the company is looking to save $500 million over the next 18 months, as capital expenditures will only be going towards their highest-quality assets. (Source: Mining Weekly, August 5, 2013.)

Top Stocks To Watch Right Now: Newmont Mining Corporation(Holding Company)

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

5 Best Gold Stocks To Invest In 2014: Agnico-Eagle Mines Limited(AEM)

Agnico-Eagle Mines Limited, through its subsidiaries, engages in the exploration, development, and production of mineral properties in Canada, Finland, and Mexico. The company primarily explores for gold, as well as silver, copper, zinc, and lead. Its flagship property includes the LaRonde mine located in the southern portion of the Abitibi volcanic belt, Canada. The company was founded in 1953 and is based in Toronto, Canada.

Advisors' Opinion:
  • [By Sally Jones]

    The once-troubled Agnico Eagle Mines Ltd. (AEM) is hitting a new record for gold production in the third quarter at 315,828 ounces, according to the Financial Post, and the company�� executives are buying. Here�� a third quarter company update and a look at billionaire stakeholders of AEM, a stock that spiked 23.66% over the past five days.

  • [By Dan Caplinger]

    In the longer term, IAMGOLD could potential challenges from higher taxes on some of its holdings. The Canadian province of Quebec is considering changing the current 16% profit tax either to what amounts to a gross revenue tax or to a more progressive profit tax with higher rates on high-margin mining operations. Under current conditions, those taxes might not have much effect either on IAMGOLD or rivals Agnico-Eagle (NYSE: AEM  ) and Goldcorp (NYSE: GG  ) , both of which also have projects in the province, but it's hard to predict how a changes might affect future results if they take effect.

  • [By Patricio Kehoe] e, has cash costs of $912 per ounce, and Agnico Eagle�� costs do not even reach the $700 per ounce mark. Hence, it comes as little surprise that revenue has been decreasing steadily, since gold prices are hovering around the $1300 mark at best. As the company is hemorrhaging money, investment gurus the like of John Burbank and Seth Klarman have decided to sell their entire stake in the firm. I agree with this bearish stance, and recommend investors stay away from Kinross Gold.

    Any Long Term Investment?

    If you were to follow Jean-Marie Eveillard�� purchases, one would be inclined to see good growth prospects for Agnico Eagle, and thus believe in this stock�� potential. And, you wouldn�� be wrong, as the firm has been growing at a steady pace, with no end in sight to its expansion possibilities. However, with a 171% price premium, investors might be better off waiting until a more favorable entry-point is available. Nevertheless, as a long-term investment, I feel highly optimistic and would thus even consider paying the additional cost.

    Disclosure: Patricio Kehoe holds no position in any stocks mentioned.

    Also check out: Jean-Marie Eveillard Undervalued Stocks Jean-Marie Eveillard Top Growth Companies Jean-Marie Eveillard High Yield stocks, and Stocks that Jean-Marie Eveillard keeps buying John Burbank Undervalued Stocks John Burbank Top Growth Companies John Burbank High Yield stocks, and Stocks that John Burbank keeps buying
    The Strategy of Ben Graham ��Warren Buffett�� Mentor From 1923 to 1957 Warren Buffett�� mentor, Ben Graham, followed a strategy of investing in net-nets. He said: ��t always seemed, and still seems ridiculously simple to say that if one can acquire a diversified group of common stocks at a price less than the...net current assets alone��he results should be quite satisfactory. They were so in our experience, for more than 30 years.��br> Today net-nets are rare. They are collected under Gu

5 Best Gold Stocks To Invest In 2014: Golden Star Resources Ltd(GSS)

Golden Star Resources Ltd., a gold mining and exploration company, through its subsidiaries, engages in the acquisition, exploration, development, and production of gold properties. It owns and operates the Bogoso/Prestea gold mining and processing operation that covers approximately 40 kilometers of strike along the southwest-trending Ashanti gold district in western Ghana; and the Wassa open-pit gold mine located to the east of Bogoso/Prestea in southwest Ghana. The company also has an 81% interest in the Prestea underground gold mine located in Ghana. In addition, it holds interests in various gold exploration projects in Ghana, Sierra Leone, Burkina Faso, Niger, and Cote d?Ivoire, as well as holds and manages exploration properties in Brazil in South America. The company was founded in 1984 and is based in Littleton, Colorado.

Advisors' Opinion:
  • [By Sean Williams]

    Golden Star Resources (NYSEMKT: GSS  )
    It's simple physics: The bigger they are, the harder they fall. When gold prices nosedived earlier this week, gold miners with historically higher operating costs took the brunt of the hit. For the most part, that meant that development-stage miners, and those operating in Africa, where labor and political costs make cost-effective mining a challenge, took it on the chin. Possibly no stock was hammered more than Golden Star Resources, a gold miner in Ghana, which lost about one-quarter of its value on Monday alone.

  • [By Rich Duprey]

    Clash of the titans
    When bears are raging on the gold bullion market, it's not surprising to see gold stocks getting mauled as well. Golden Star Resources (NYSEMKT: GSS  ) was the biggest loser in the sector, losing a quarter of its market cap on no company-specific news, though a report last Friday indicated that a large number of hedge funds had recently dumped their positions in the mid-tier miner. Yet it wasn't all that much better among the majors, either, as Barrick Gold (NYSE: ABX  ) fell almost 13% and Kinross Gold (NYSE: KGC  ) was down 14%.

Thursday, January 16, 2014

Eni Starts Barents Seismic Survey - Analyst Blog

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Italy's Eni SpA (E) has initiated seismic survey work in the Fedynsky and Central Barents license areas, in Russia's sector of the Barents Sea. The survey is part of Eni's exploration pact with Russia's state-owned giant Rosneft.

The 2D seismic survey will cover 6,182 miles of the two license areas, lying in the ice-free part of the Barents. The survey, which follows the environmental and fishery studies, conforms to the Russian legal environmental requirements and license agreements.

Environmental monitoring is likely to be implemented at some stage of seismic shooting. A specialized seismic survey vessel will be employed to collect the data of the survey using geophysical methods.

The two companies had set up a venture to explore each of the Russian offshore projects. These projects form part of a wider cooperation between Eni and Rosneft under the Strategic Cooperation Agreement signed by the parties on April 25, 2012.

In the joint venture, Eni and Rosneft have a share of 33.33% and 66.67%, respectively. Per the agreement, Eni is responsible for funding of exploration work.

The agreement includes the Western Chernomorsky block in the Black Sea, along with the Fedynsky and Central Barents license areas. Together, these areas are estimated to hold total recoverable resources of 36 billion barrels of oil equivalent.

Eni's outlook for the upcoming months is favorable, given its 2013–2016 strategic plans to enhance production and implement steps to control costs and recover profitability. The company remains upbeat on its production growth target of more than 4% growth annually in the said period and 3% annually until 2022.

Eni carries a Zacks Rank #3 (Hold). However, Zacks Ranked #1 stocks – Alliance Resource Partners LP (ARLP), Newpark Resources Inc (NR) and Boardwalk Pipeline Partners, LP (BWP) – a! re expected to outperform in the near term.


Tuesday, January 14, 2014

JPMorgan Chase & Co. Posts Lower Q4 Revenue and Income; Misses Estimates (JPM)

Before the opening bell on Tuesday, JPMorgan Chase (JPM) announced its fourth quarter earnings, with revenue and net income coming in slightly below last year’s Q4 figures.

JPM Earnings in Brief

JPMorgan announced fourth quarter consolidated revenues of $23.16 billion on a reported basis, down 2% from last year’s Q4 revenues of $23.65 billion. The company’s net income for the quarter came in at $5.28 billion, down from $5.69 billion in last year’s Q4. JPM’s EPS came in at $1.30 per diluted share for the most recent quarter, down 6% from last year’s Q4 EPS of $1.39 per diluted share. JPMorgan was unable to beat analysts’ estimates of $1.35 EPS on revenues of $23.68 billion. For the full year, JPM reported revenues of $99.8 billion, net income of $17.9 billion, and EPS of $4.35. Net income and EPS were lower than last year, primarily due to JPM’s regulatory settlements.

CEO Commentary

Jamie Dimon, JPMorgan Chase’s CEO and chairman, had the following comments about JPM’s legal and regulatory problems, and its quarterly and yearly performance: “We are pleased to have made progress on our control, regulatory and litigation agendas and to have put some significant issues behind us this quarter. We reached several important resolutions – Global RMBS, Gibbs & Bruns, and Madoff. It was in the best interests of our company and shareholders for us to accept responsibility, resolve these issues and move forward. This will allow us to focus on what we are here for: serving our clients and communities around the world. We remained focused on building our four leading franchises, which all continued to deliver strong underlying performance, for the quarter and the year.”

No Payout Change

JPM did not make any mention of changing its dividend in the quarterly report. This was to be expected as the company announced a dividend raise of 8 cents in May of 2013 for the company’s July 31 payout. The company’s next 38 cent payout is January 31, and the stock went ex-dividend on January 2.

Stock Performance

JPM stock was down at the end of yesterday’s trading, but was up 18 cents, or 0.31%, in pre-market trading this morning. The company is 2.98% off its 52-week high.

Monday, January 13, 2014

Caterpillar: Digging for a Bottom

The dirt kept sliding out from under Caterpillar (CAT) during 2013. Will it hit bottom in 2014?

ASSOCIATED PRESS

UBS analyst Steven Fisher and team think it can. He writes:

2013 was a disappointing year for [Caterpillar] across its businesses (ex-LATAM construction). The mining business, in particular, drove several guidance reductions. We expect [Caterpillar] EPS to find a bottom and potentially turn positive over the next 12-24 months as global growth improves, led by North America. We also expect cost reductions and buybacks to be tailwinds…

Still, Fisher urges investors to be cautious with Caterpillar right now. He writes:

Our mind set is that it may be beneficial to be early in order to get ahead of the improvement in earnings, after the stock was a laggard in 2013. However, we think there is some risk that [Caterpillar] guides below the Street with the Q4 report, and some of the [Caterpillar] indicators we assess suggest caution near term. Specifically, UBS expects oil prices to be weaker in 1H14, we expect [Caterpillar] revenues and earnings to decline YOY in Q4 and Q1, and UBS expects the Yen to weaken vs. the US Dollar; all drivers of [Caterpillar] stock performance. Also, we don’t see major near term catalysts in mining and power.

Given Fisher’s mixed message, it shouldn’t come s a surprise that Caterpillar is little changed today at $90.52, even as Terex (TEX) has fallen 0.8% to $41.03 and Joy Global (JOY) has dropped 1.1% to $55.19. Deere has (DE) gained 0.4% to $90.10.

 

Thursday, January 9, 2014

Mid-Day Market Update: U.S. Stocks Turn Red; Bed Bath & Beyond Shares Decline On Weak Q3 Earnings

Midway through trading Thursday, the Dow traded down 0.31 percent to 16,411.07 while the NASDAQ tumbled 0.44 percent to 4,147.12. The S&P also fell, dropping 0.23 percent to 1,833.23.

Top Headline
Family Dollar Stores (NYSE: FDO) reported a drop in its first quarter profit.

Family Dollar's quarterly profit declined to $78.0 million, or $0.68 per share, versus a year-ago profit of $80.3 million, or $0.69 per share. Its revenue climbed 3.2% to $2.50 billion from $2.42 billion. However, analysts were estimating earnings of $0.69 per share on revenue of $2.51 billion.

Family Dollar expects Q2 earnings range of $0.85 to $0.95 per share, versus analysts' estimates of $1.21 per share. It also lowered its FY14 earnings outlook to $3.25 to $3.55 per share versus its earlier forecast of $3.80 to $4.15 per share.

Equities Trading UP
Shares of Intercept Pharmaceuticals (NASDAQ: ICPT) got a boost, shooting up 289.85 percent to $282.21 after the company reported that the FLINT trial of obeticholic acid has been stopped early and the NASH primary endpoint has been met.

Sangamo Biosciences (NASDAQ: SGMO) shot up 29.01 percent to $17.61 after the company and Biogen Idec (NASDAQ: BIIB) announced the global collaboration to develop treatments for hemoglobinopathies.

Macy's (NYSE: M) was also up, gaining 7.77 percent to $55.87 after the company announced its plans to lower 2,500 jobs and shut five Macy's stores. It also reported a 3.6% rise in its comparable sales in November and December. The retailer also issued upbeat outlook for 2014. BMO Capital upgraded the stock from Market Perform to Outperform and lifted the target price from $53 to $70.

Equities Trading DOWN
Shares of Pier 1 Imports (NYSE: PIR) were down 12.33 percent to $20.45 after the company reported weak December sales and lowered its outlook.

Bed Bath & Beyond (NASDAQ: BBBY) tumbled 13.33 percent to $69.06 after the company reported weaker-than-expected fiscal third-quarter earnings and lowered its guidance. Analysts at Credit Suisse downgraded the stock from Outperform to Neutral and lowered the target price from $85 to $78.

Family Dollar Stores (NYSE: FDO) was down, falling 6.80 percent to $61.83 after the company reported a drop in its first quarter profit and issued a weak outlook.

Commodities
In commodity news, oil traded down 0.27 percent to $92.08, while gold traded up 0.02 percent to $1,225.80.

Silver traded down 0.43 percent Thursday to $19.46, while copper fell 1.51 percent to $3.29.

Eurozone
European shares were mostly lower today. The Spanish Ibex Index fell 0.39 percent, while Italy's FTSE MIB Index surged 0.20 percent. Meanwhile, the German DAX tumbled 0.85 percent and the French CAC 40 fell 0.86 percent while U.K. shares dropped 0.55 percent.

Economics
U.S. initial jobless claims declined by 15,000 to 330,000 in the week ended January 4. However, economists were expecting claims to total 335,000 in the week.

Announced job cuts dropped 32% to 30,623, outplacement firm Challenger, Gray & Christmas reported.

Supplies of natural gas dropped 157 billion cubic feet for the week ended January 3, the U.S. Energy Information Administration reported. However, analysts were expecting a decline of 148 billion cubic feet to 152 billion cubic feet.

Data on money supply will be released at 4:30 p.m. ET.

Posted-In: Earnings News Guidance Eurozone Futures Forex Global Econ #s Economics Intraday Update Markets Movers Tech

(c) 2014 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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Tuesday, January 7, 2014

Top 5 Dividend Stocks To Own Right Now

The next selection for the Inflation-Protected Income Growth Portfolio is banking titan Wells Fargo (NYSE: WFC  ) . One of the few major banks to have recovered its dividend to nearly its pre-financial-crisis level, and one that even noted value hunter Warren Buffett is willing to buy, Wells Fargo stands out for its strength.

It's true that the financial crisis did force Wells Fargo to cut its dividend, but that was due in large part to its acquisition of troubled bank Wachovia amid that crisis. The company's relatively quick recovery suggests that the blow was painful, but not fatal. So long as the company learned from that experience and stays away from buying severely troubled assets, it should be well positioned for the future.

Why it's worth owning in the iPIG Portfolio
To earn a spot in the portfolio, a company has to pass a series of tests related to its dividends, its balance sheet and valuation, and how it fits from a portfolio diversification perspective.

Top 5 Dividend Stocks To Own Right Now: NextEra Energy Inc. (NEE)

NextEra Energy, Inc., through its subsidiaries, engages in the generation, transmission, distribution, and sale of electric energy in the United States and Canada. As of December 31, 2010, NextEra Energy had approximately 43,000 mega watts of generating capacity. The company involves in the generation of renewable energy from wind and solar projects. It also generates electricity through natural gas, nuclear, oil and coal, and hydro power plants. The company serves approximately 8.7 million people through approximately 4.5 million customer accounts in the east and lower west coasts of Florida. In addition, it leases wholesale fiber-optic network capacity and dark fiber to telephone, wireless carriers, Internet, and other telecommunications companies. The company was formerly known as FPL Group, Inc. and changed its name to NextEra Energy, Inc. in May 2010. NextEra Energy, Inc. was founded in 1984 and is headquartered in Juno Beach, Florida.

Advisors' Opinion:
  • [By Richard Stavros]

    Among those companies that are winding down their spending programs, NextEra Energy Inc (NYSE: NEE) accounts for almost 30 percent of the projected $10 billion decline in annual spending from 2013 to 2015. Other larger-cap companies with projected 2015 budgets that are below their 2013 levels include: CenterPoint Energy Inc (NYSE: CNP), Dominion Resources Inc (NYSE: D), PPL Corp (NYSE: PPL), Public Service Enterprise Group Inc (NYSE: PEG), and Southern Company (NYSE: SO).

Top 5 Dividend Stocks To Own Right Now: Regal Beloit Corporation(RBC)

Regal Beloit Corporation, together with its subsidiaries, manufactures and sells electric motors and controls, electric generators and controls, and mechanical motion control products primarily in the United States and Asia. The company operates in two segments, Electrical and Mechanical. The Electrical segment manufactures and markets AC and DC commercial, industrial, and commercial refrigeration electric motors and blowers, as well as heating, ventilation, and air conditioning (HVAC) electric motors and blowers. It also provides precision servo motors, electric generators, automatic transfer switches and paralleling switchgear, and control electric power generation equipment; AC and DC variable speed drives and controllers, and other accessories for industrial and commercial applications; and capacitors for use in HVAC systems, high intensity lighting, and other applications. The Mechanical segment manufactures and markets a range of mechanical motion control products, i ncluding worm gears, bevel gears, helical gears, and concentric shaft gearboxes; marine transmissions; after-market automotive transmissions, and ring and pinions; custom gearing; gearmotors; electrical connecting devices; and manual valve actuators, which are used in oil and gas, water distribution and treatment, and chemical processing applications. The company sells its products to original equipment manufacturers, distributors, and end users through its direct sales people and manufacturer?s representative organizations. Regal Beloit Corporation was founded in 1955 and is based in Beloit, Wisconsin.

Advisors' Opinion:
  • [By Rich Duprey]

    Electric motor manufacturer�Regal Beloit� (NYSE: RBC  ) �will pay a�regular quarterly dividend�of $0.30 on July 12 to the holders of record at the close of business on June 28.

  • [By Rich Duprey]

    Electric-motor maker�Regal Beloit (NYSE: RBC  ) announced on Friday its third-quarter dividend of $0.20 per share, the same rate it paid last quarter after raising the payout 5% from $0.19 per share.

Top Value Companies To Watch In Right Now: United Bancorp Inc.(UBCP)

United Bancorp, Inc. operates as the holding company for The Citizens Savings Bank that provides various commercial and retail banking products and services in the northeastern, eastern, southeastern, and south central Ohio. Its deposit products include interest-bearing deposits, certificates of deposit, demand deposits, savings accounts, NOW accounts, and money market deposits. The company?s loan portfolio comprises commercial, real estate, installment, and consumer loans, as well as letters of credit and lines of credit. It also offers brokerage, night deposit, safe deposit box, and automatic teller machine services. United Bancorp provides banking services through its main office and stand alone operations center in Martins Ferry, Ohio; and 19 branches in Belmont, Harrison, Jefferson, Tuscarawas, Carroll, Athens, Hocking, and Fairfield counties, as well as in the surrounding localities. The company was founded in 1974 and is headquartered in Martins Ferry, Ohio.

Top 5 Dividend Stocks To Own Right Now: Public Storage(PSA)

Public Storage operates as a real estate investment trust (REIT). It engages in the acquisition, development, ownership, and operation of self-storage facilities in the United States and Europe. The company?s self-storage facilities offer storage spaces for lease on a month-to-month basis for personal and business use. Public Storage also has interests in commercial properties containing commercial and industrial rental space; facilities that lease storage containers; and ancillary operations, which include reinsurance of policies against losses to goods stored by its self-storage tenants, retail operations comprising merchandise sales and truck rental operations. As of December 31, 2008, the company had interests in 2,012 self-storage facilities with approximately 127 million net rentable square feet in 38 states; and 181 self-storage facilities with approximately 10 million net rentable square feet in 7 western European nations. It also had direct and indirect equity int erests in approximately 21 million net rentable square feet of commercial space located in 11 states in the U.S. As a REIT, the company would not be subject to federal income tax to the extent that it distributes at least 90% of its taxable income to its shareholders. Public Storage was founded in 1971 and is based in Glendale, California.

Advisors' Opinion:
  • [By Lauren Pollock]

    Public Storage's(PSA) third-quarter profit rose 7.7% on the strength of higher occupancy and rents. Meanwhile, the real estate investment trust’s funds from operations, an important metric in the sector, grew during the period.

Top 5 Dividend Stocks To Own Right Now: ITT Industries Inc.(ITT)

ITT Corporation designs, manufactures, and sells a range of engineered products, and provides related services worldwide. Its Defense & Information Solutions segment develops tactical communications equipment, electronic warfare and force protection equipment, radar systems, integrated structures equipment, and imaging and sensor equipment, including night vision goggles, as well as weather, location, surveillance, and other related technologies for military and government agencies. It also provides services comprising air traffic management, information and cyber solutions, large-scale systems engineering, and integration and defense technologies; satellite-based imaging payloads for intelligence, surveillance, and reconnaissance solutions; and high-resolution commercial imaging systems with earth and space science applications, climate and environmental monitoring sensors and systems, and GPS navigation and software applications designed for image and data processing and dissemination. The company?s Fluid Technology segment provides water transport and wastewater treatment systems, pumps and related technologies, and other water and fluid control products with municipal, residential, commercial, and industrial applications. Its Motion & Flow Control segment manufactures shock absorbers and brake friction materials for the transportation industry; switch applications for the industrial and aerospace industries; electrical connectors used in telecommunications, computers, aerospace, medical, and industrial applications; and a range of pumps and tailored products for marine, food and beverage, and general industrial markets. The company was formerly known as ITT Industries, Inc. and changed its name to ITT Corporation in July 2006. ITT Corporation was founded in 1920 and is based in White Plains, New York.

Advisors' Opinion:
  • [By Jeremy Bowman]

    What: Shares of ITT Educational Services (NYSE: ITT  ) were flying higher today, gaining as much 34% after smashing analyst estimates in its quarterly report.

  • [By Will Ashworth]

    As for the other stocks in the portfolio, you can’t ignore the performance of both Apollo (APO) and ITT Corp. (ITT).

    It’s been a busy year for private equity firm Apollo Global Management, which got the Twinkie back on grocery store shelves in July. Carried interest income more than doubled in the first six months of the year to $1.4 billion.

Monday, January 6, 2014

Dick's Sporting Goods Inc. (DKS) Q3 Earnings: Opening The Door To Another Miss?

Dick's Sporting Goods Inc. (DKS) is expected to report third quarter results on Monday, November 11, 2013, according to Yahoo finance. DKS investor's relations site makes no mention of a pending announcement, but Dicks typically reports in the second week of November. So, iStock's expects the sporting goods store to report by the end of next week.

Wall Street anticipates that the specialty retailer will make a profit of $0.39 per share for the quarter. iStock expects DKS to hit Wall Street's consensus number. The iEstimate is $0.39, too.

With the help of more than 11,000 employees, Dick's Sporting Goods operates as a sports and fitness retailer primarily in the Eastern United States. The company provides hardlines, including sporting goods equipment, fitness equipment, golf equipment, and hunting and fishing gear products; apparel; and footwear products.

The services company has struggled to meet analysts' consensus estimate in the last three quarters, missing twice and hitting the target once for the last three quarterly checkups. Prior to their recent struggles, Dick's had no problems handling Wall Street's forecast, delivering bullish surprises 12 of 13 announcements.

While, until recently, actual results normally bested guesstimates, Dick's stock tends to be an underperformer in the days surrounding EPS announcements. Shares backpedaled nine of the last 16 results; falling by an average of 6.78% with a range of -1.30% to -15.8%.

The lucky seven EPS-driven pops were accompanied by six bullish surprises and the lone tie. Typically, the stock gained 4.96% maxing out at 10.3%.

Q3's announcement has a little better track-record than the rest of the quarters. Investors were rewarded with gains three of the last four November announcements. The funny thing is the Topaz month owns the best and worst performances.

According to the US Commerce Department's ADVANCE MONTHLY SALES FOR RETAIL AND FOOD SERVICES SEPTEMBER 2013, Sporting goods, hobby, book & music s! tores sales increased 0.8% versus Q2 2013 and 2.8% compared to last year's third quarter. However, the current consensus is less than last year's EPS of $0.40. If DKS' earnings keep pace with the Commerce Department's numbers, then profit per share will come in at $0.41.

Costs could be up in the quarter as Dick's aggressively opened new stores during the quarter – 31 our count, which does not include specialty stores such as Field & Stream or remodels.

We see evidence of rising costs associated with new stores in last quarter's announcement as Pre-opening expenses were up 132%. However, the line-item remains a small fraction of total revenue, but still enough to account for $0.04 per share. Otherwise, management held the line on other costs and expenses.

Overall: Overall retail trends suggest Dick's Sporting Goods Inc. (DKS) should be able to meet the street view and the iEstimate; however, aggressive expansion could take a bite out the bottom line, which puts risk to the downside for the bottom line.

Sunday, January 5, 2014

HP Needs to Copy Kraft's and News Corp's Bold Moves

Hewlett-Packard (NYSE: HPQ  ) shares soared sky-high on Thursday thanks to a surprisingly solid second-quarter report. On Friday, HP threw its engines into reverse. The strongest Dow Jones (DJINDICES: ^DJI  ) component one day became the weakest of the next day.

Fellow Fool Dan Caplinger posits that HP's 2.5% drop is nothing but a pullback after Thursday's 17% dose of enthusiasm. That's certainly part of the picture, but I think there's more to this steep reversal.

I'm not convinced that HP's recent success is sustainable, and HP investors are slowly waking up to this uncomfortable idea. It's not a bucket of ice water to the face, but rather more of a sluggish, queasy morning after the earnings-induced party.

CEO Meg Whitman remains committed to HP's current strategy. This means keeping the company intact, rather than splitting it into two nimbler companies, while firing diluted blunderbuss shots at every market in sight. Separating into a consumer company and a business-class company would help each division double down on the opportunities that truly matter while dropping unprofitable lead weights as appropriate.

There's even a growing body of precedent for this kind of strategy. News Corp (NASDAQ: FOX  ) just announced its intention to split into separate news and entertainment businesses, letting investors support the 20th Century Fox or News sides of the company. This move will "unlock the true value of both companies and their distinct assets," says News Corp CEO Rupert Murdoch.

Last year saw Kraft Foods (NASDAQ: KRFT  ) refocus on grocery items while splitting off its snack-foods segment into brand-new ticker Mondelez (NASDAQ: MDLZ  ) . Again, the split inspired Kraft Foods CEO Tony Vernon to operate his half with "the spirit of a start-up and the soul of a powerhouse," while Mondelez is free to "unleash a global snacking powerhouse" that is "the world's greatest start-up." Neither Kraft nor Mondelez has the scale to stay on the Dow, but the company went ahead with the split anyway.

Since that game-changing event, Mondelez shares have largely tracked the Dow's performance, while Kraft shares more than doubled the Dow's returns. Maybe there's something to this "start-up spirit" talk after all.

KRFT Chart

KRFT data by YCharts.

Granted, all this big talk may not match the long-term reality, but wouldn't you agree that HP could use a shot of entrepreneurial spirit right now? The inveterate Silicon Valley giant would be better off ripping that page from the Kraft and News Corp playbooks, but Whitman prefers sticking to her guns.

I'm far from the only HP critic, even in the afterglow of Thursday's celebration. Powerhouse analyst house Goldman Sachs reiterated its "sell" rating on the stock, noting that while last quarter was impressive, "HP's businesses are facing even more distress than we originally anticipated, and we believe the company's short-term, restructuring-driven profit and cash flow recovery is unsustainable."

Short-term fixes to permanent problems. I rest my case.

The massive wave of mobile computing has done much to unseat the major players in the PC market, including venerable technology names like Hewlett-Packard. HP's stock is surging, but does this make HP one of the least-appreciated turnaround stories on the market, or is this a minor detour on its road to irrelevance? The Motley Fool's technology analyst details exactly what investors need to know about HP in our new premium research report. Just click here now to get your copy today.

Wednesday, January 1, 2014

Target Market for Annuities Is Larger Than Most Advisors Think: Genworth

What do consumers think about annuities? Not much — leaving plenty of room for advisors to change that, according to a Genworth survey.

The survey found 68% of respondents who don’t own an annuity have a positive or neutral impression of them. Among owners, 91% had a positive or neutral impression.

Just 8% of annuity owners and 23% of non-owners had a negative view of the products.

However, while respondents reported mostly not-negative feelings about annuities, they weren’t exactly raving about them. Regardless of whether they owned an annuity or not, more than half of consumers said they were neutral about them.

According to Genworth, that means there are opportunities for advisors who have clients that might benefit from annuities.

As part of the report, Genworth surveyed more than 1,300 retirees and pre-retirees and found almost three-quarters of pre-retirees expect to retire on time, despite less than half of retired respondents saying they were able to retire on their expected date.

Among the pre-retirees who were afraid they might not retire when they planned to, money was the main thing holding them back. More than three-quarters said they would not have enough money when they retired and 36% said expenses would be too high.

That’s a legitimate concern, considering 64% of retired respondents said their expenses increased after they retired.

Genworth also conducted interviews with financial professionals and held focus groups with both professionals and consumers. The firm also surveyed 300 professionals online for the report.

Genworth found the advisors who sold the most fixed indexed annuities were targeting clients in their 40s with a moderate risk tolerance. Among all advisors selling fixed index annuities, most were targeting clients in their 50s with a low tolerance for risk.

“The findings suggest that producers need to consider a broader target profile for annuity prospects,” Charlie Gipple, national director of index products at Genworth, said in a statement.  “Successful sellers are recommending annuities to younger, more risk tolerant consumers and positioning it as a vehicle for a wider array of retirement funds.”

However, Genworth also found many consumers aren’t being approached by their advisor to talk about annuities. Among non-owners, 40% said they would consider buying one, but their advisor has never mentioned it.

Genworth suggested advisors aren’t talking about annuities with their clients because they expect resistance, and they aren’t necessarily wrong. Almost 60% of consumers said they don’t need an annuity because they already have enough predictable income. Among people who were considering buying an annuity, 53% said they’d rather invest directly in the market.

“Many financial professionals simply don’t present annuities to their clients, perhaps believing that these products have a bad reputation among consumers,” Gipple said. “Our research shows that this is not universally true.”

Sixty percent of annuity owners and 61% of those considering buying an annuity said they would pay extra fees for products with downside protection and upside potential.

Naturally, owners of annuities that performed as they expected them to were more satisfied than other owners. Genworth stressed that advisors be very clear about what to expect with an annuity to keep clients happy.

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