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INVESTING COMMENTARY
Acxiom Corp: Warming Up or Cooling Off?By Motley Fool StaffFebruary 9, 2010 Together, we are all trying to build our fortune by finding well-run companies at bargain-basement prices. But it takes work -- scouring company earnings reports, scrutinizing key data, and assessing the competition. Because of that, we've created a screen based on the massive data aggregated from the more than 150,000 investors competing on our Motley Fool CAPSplatform. Each quarter, we check in on select companies after they file a 10-Q and track community sentiment -- so you can see how your company is doing. Here's the community sentiment on Acxiom Corp (Nasdaq: ACXM) both this quarter and last (for comparison), as well as opinions on some related companies. Metric Acxiom Corp (Nasdaq: ACXM) Total System Services (NYSE: TSS) Lender Processing Services, Inc. (NYSE: LPS) TNS, Inc. (NYSE: TNS) This Quarter (2/8/2010): Price: $15.65 $14.41 $38.85 $21.74 % of Members Rating Outperform 72% 89% 92% 73% % of All-Star Members Rating Outperform 79% 89% 85% 68% CAPS Rating (out of 5) Last Quarter (11/10/2009): Price: $12.05 $16.87 $42.71 $26.60 % of Members Rating Outperform 74% 91% 95% 70% % of All-Star Members Rating Outperform 82% 91% 80% 45% CAPS Rating (out of 5)Source: Motley Fool CAPS. Dates given are the posting dates of Acxiom Corp's most recent quarterly and/or annual reports to the SEC's website. Percentages are calculated from the number of members rating each company. A change in the community's approval (signified by four- and five-star ratings) or disapproval (one- and two-star ratings) could indicate that further research is in order. To help make your research easier …  CAPS service-- a one-stop research shop -- and read what your fellow investors are saying about your stocks.This article was originally published as Acxiom Corp: Warming Up or Cooling Off?on Fool.com Copyright © 2009 The Motley Fool, LLC. All rights reserved. Agilysys, Inc.: Warming Up or Cooling Off?By Motley Fool StaffFebruary 9, 2010 Together, we are all trying to build our fortune by finding well-run companies at bargain-basement prices. But it takes work -- scouring company earnings reports, scrutinizing key data, and assessing the competition. Because of that, we've created a screen based on the massive data aggregated from the more than 150,000 investors competing on our Motley Fool CAPSplatform. Each quarter, we check in on select companies after they file a 10-Q and track community sentiment -- so you can see how your company is doing. Here's the community sentiment on Agilysys, Inc. (Nasdaq: AGYS) both this quarter and last (for comparison), as well as opinions on some related companies. Metric Agilysys, Inc. (Nasdaq: AGYS) Newport Corp (Nasdaq: NEWP) Ingram Micro, Inc. (NYSE: IM) Gerber Scientific, Inc. (NYSE: GRB) This Quarter (2/8/2010): Price: $9.18 $9.31 $17.04 $5.05 % of Members Rating Outperform 82% 91% 90% 90% % of All-Star Members Rating Outperform 83% 93% 94% 94% CAPS Rating (out of 5) Last Quarter (11/10/2009): Price: $7.16 $7.98 $18.80 $4.99 % of Members Rating Outperform 83% 92% 90% 92% % of All-Star Members Rating Outperform 79% 91% 94% 93% CAPS Rating (out of 5)Source: Motley Fool CAPS. Dates given are the posting dates of Agilysys, Inc.'s most recent quarterly and/or annual reports to the SEC's website. Percentages are calculated from the number of members rating each company. A change in the community's approval (signified by four- and five-star ratings) or disapproval (one- and two-star ratings) could indicate that further research is in order. To help make your research easier … CAPS service-- a one-stop research shop -- and read what your fellow investors are saying about your stocks.This article was originally published as Agilysys, Inc.: Warming Up or Cooling Off?on Fool.com Copyright © 2009 The Motley Fool, LLC. All rights reserved. Airgas, Inc.: Warming Up or Cooling Off?By Motley Fool StaffFebruary 9, 2010 Together, we are all trying to build our fortune by finding well-run companies at bargain-basement prices. But it takes work -- scouring company earnings reports, scrutinizing key data, and assessing the competition. Because of that, we've created a screen based on the massive data aggregated from the more than 150,000 investors competing on our Motley Fool CAPSplatform. Each quarter, we check in on select companies after they file a 10-Q and track community sentiment -- so you can see how your company is doing. Here's the community sentiment on Airgas, Inc. (NYSE: ARG) both this quarter and last (for comparison), as well as opinions on some related companies. Metric Airgas, Inc. (NYSE: ARG) NL Industries, Inc. (NYSE: NL) Zep, Inc. (NYSE: ZEP) OM Group, Inc. (NYSE: OMG) This Quarter (2/8/2010): Price: $60.55 $6.67 $19.30 $30.07 % of Members Rating Outperform 96% 67% 81% 94% % of All-Star Members Rating Outperform 96% 65% 75% 97% CAPS Rating (out of 5) Last Quarter (11/10/2009): Price: $48.13 $6.76 $18.35 $33.97 % of Members Rating Outperform 97% 60% 83% 94% % of All-Star Members Rating Outperform 99% 44% 83% 97% CAPS Rating (out of 5)Source: Motley Fool CAPS. Dates given are the posting dates of Airgas, Inc.'s most recent quarterly and/or annual reports to the SEC's website. Percentages are calculated from the number of members rating each company. A change in the community's approval (signified by four- and five-star ratings) or disapproval (one- and two-star ratings) could indicate that further research is in order. To help make your research easier …  CAPS service-- a one-stop research shop -- and read what your fellow investors are saying about your stocks.This article was originally published as Airgas, Inc.: Warming Up or Cooling Off?on Fool.com Copyright © 2009 The Motley Fool, LLC. All rights reserved. Alliance One International, Inc.: Warming Up or Cooling Off?By Motley Fool StaffFebruary 9, 2010 Together, we are all trying to build our fortune by finding well-run companies at bargain-basement prices. But it takes work -- scouring company earnings reports, scrutinizing key data, and assessing the competition. Because of that, we've created a screen based on the massive data aggregated from the more than 150,000 investors competing on our Motley Fool CAPSplatform. Each quarter, we check in on select companies after they file a 10-Q and track community sentiment -- so you can see how your company is doing. Here's the community sentiment on Alliance One International, Inc. (NYSE: AOI) both this quarter and last (for comparison), as well as opinions on some related companies. Metric Alliance One International, Inc. (NYSE: AOI) Lorillard, Inc. (NYSE: LO) Altria Group, Inc. (NYSE: MO) Philip Morris International (NYSE: PM) This Quarter (2/8/2010): Price: $4.75 $74.22 $19.37 $45.53 % of Members Rating Outperform 94% 95% 96% 98% % of All-Star Members Rating Outperform 94% 96% 98% 98% CAPS Rating (out of 5) Last Quarter (11/10/2009): Price: $4.66 $78.66 $18.75 $49.25 % of Members Rating Outperform 95% 94% 97% 98% % of All-Star Members Rating Outperform 97% 95% 98% 98% CAPS Rating (out of 5)Source: Motley Fool CAPS. Dates given are the posting dates of Alliance One International, Inc.'s most recent quarterly and/or annual reports to the SEC's website. Percentages are calculated from the number of members rating each company. A change in the community's approval (signified by four- and five-star ratings) or disapproval (one- and two-star ratings) could indicate that further research is in order. To help make your research easier …  CAPS service-- a one-stop research shop -- and read what your fellow investors are saying about your stocks.This article was originally published as Alliance One International, Inc.: Warming Up or Cooling Off?on Fool.com Copyright © 2009 The Motley Fool, LLC. All rights reserved. Apollo Investment Corp.: Warming Up or Cooling Off?By Motley Fool StaffFebruary 9, 2010 Together, we are all trying to build our fortune by finding well-run companies at bargain-basement prices. But it takes work -- scouring company earnings reports, scrutinizing key data, and assessing the competition. Because of that, we've created a screen based on the massive data aggregated from the more than 150,000 investors competing on our Motley Fool CAPSplatform. Each quarter, we check in on select companies after they file a 10-Q and track community sentiment -- so you can see how your company is doing. Here's the community sentiment on Apollo Investment Corp. (Nasdaq: AINV) both this quarter and last (for comparison), as well as opinions on some related companies. Metric Apollo Investment Corp. (Nasdaq: AINV) Castle Convertible Fund (AMEX: CVF) First Albany Companies, Inc. (Nasdaq: BPSG) Waddell & Reed Financial, Inc. (NYSE: WDR) This Quarter (2/8/2010): Price: $10.28 $15.00 $4.14 $29.90 % of Members Rating Outperform 97% 73% 78% 85% % of All-Star Members Rating Outperform 97% 50% 79% 84% CAPS Rating (out of 5) Last Quarter (11/10/2009): Price: $8.78 $15.00 $6.13 $30.56 % of Members Rating Outperform 97% 75% 54% 87% % of All-Star Members Rating Outperform 97% 50% 25% 84% CAPS Rating (out of 5)Source: Motley Fool CAPS. Dates given are the posting dates of Apollo Investment Corp.'s most recent quarterly and/or annual reports to the SEC's website. Percentages are calculated from the number of members rating each company. A change in the community's approval (signified by four- and five-star ratings) or disapproval (one- and two-star ratings) could indicate that further research is in order. To help make your research easier … CAPS service-- a one-stop research shop -- and read what your fellow investors are saying about your stocks.This article was originally published as Apollo Investment Corp.: Warming Up or Cooling Off?on Fool.com Copyright © 2009 The Motley Fool, LLC. All rights reserved. Becton, Dickinson and Co.: Warming Up or Cooling Off?By Motley Fool StaffFebruary 9, 2010 Together, we are all trying to build our fortune by finding well-run companies at bargain-basement prices. But it takes work -- scouring company earnings reports, scrutinizing key data, and assessing the competition. Because of that, we've created a screen based on the massive data aggregated from the more than 150,000 investors competing on our Motley Fool CAPSplatform. Each quarter, we check in on select companies after they file a 10-Q and track community sentiment -- so you can see how your company is doing. Here's the community sentiment on Becton, Dickinson and Co. (NYSE: BDX) both this quarter and last (for comparison), as well as opinions on some related companies. Metric Becton, Dickinson and Co. (NYSE: BDX) Conceptus, Inc. (Nasdaq: CPTS) Atrion Corp (Nasdaq: ATRI) Syneron Medical Ltd. (Nasdaq: ELOS) This Quarter (2/8/2010): Price: $74.68 $20.68 $130.43 $9.26 % of Members Rating Outperform 98% 83% 96% 96% % of All-Star Members Rating Outperform 99% 77% 99% 98% CAPS Rating (out of 5) Last Quarter (11/10/2009): Price: $71.52 $17.10 $130.97 $11.08 % of Members Rating Outperform 98% 80% 96% 97% % of All-Star Members Rating Outperform 99% 77% 98% 98% CAPS Rating (out of 5)Source: Motley Fool CAPS. Dates given are the posting dates of Becton, Dickinson and Co.'s most recent quarterly and/or annual reports to the SEC's website. Percentages are calculated from the number of members rating each company. A change in the community's approval (signified by four- and five-star ratings) or disapproval (one- and two-star ratings) could indicate that further research is in order. To help make your research easier …  CAPS service-- a one-stop research shop -- and read what your fellow investors are saying about your stocks.This article was originally published as Becton, Dickinson and Co.: Warming Up or Cooling Off?on Fool.com Copyright © 2009 The Motley Fool, LLC. All rights reserved. Cabot Microelectronics Corp: Warming Up or Cooling Off?By Motley Fool StaffFebruary 9, 2010 Together, we are all trying to build our fortune by finding well-run companies at bargain-basement prices. But it takes work -- scouring company earnings reports, scrutinizing key data, and assessing the competition. Because of that, we've created a screen based on the massive data aggregated from the more than 150,000 investors competing on our Motley Fool CAPSplatform. Each quarter, we check in on select companies after they file a 10-Q and track community sentiment -- so you can see how your company is doing. Here's the community sentiment on Cabot Microelectronics Corp (Nasdaq: CCMP) both this quarter and last (for comparison), as well as opinions on some related companies. Metric Cabot Microelectronics Corp (Nasdaq: CCMP) PLX Technology, Inc. (Nasdaq: PLXT) Semtech Corp (Nasdaq: SMTC) Advantest Corp. (ADR) (NYSE: ATE) This Quarter (2/8/2010): Price: $35.22 $4.30 $14.97 $23.25 % of Members Rating Outperform 88% 78% 89% 62% % of All-Star Members Rating Outperform 93% 71% 95% 63% CAPS Rating (out of 5) Last Quarter (11/10/2009): Price: $32.19 $3.17 $15.90 $22.55 % of Members Rating Outperform 88% 73% 88% 60% % of All-Star Members Rating Outperform 100% 64% 90% 64% CAPS Rating (out of 5)Source: Motley Fool CAPS. Dates given are the posting dates of Cabot Microelectronics Corp's most recent quarterly and/or annual reports to the SEC's website. Percentages are calculated from the number of members rating each company. A change in the community's approval (signified by four- and five-star ratings) or disapproval (one- and two-star ratings) could indicate that further research is in order. To help make your research easier …  CAPS service-- a one-stop research shop -- and read what your fellow investors are saying about your stocks.This article was originally published as Cabot Microelectronics Corp: Warming Up or Cooling Off?on Fool.com Copyright © 2009 The Motley Fool, LLC. All rights reserved. Chindex International, Inc.: Warming Up or Cooling Off?By Motley Fool StaffFebruary 9, 2010 Together, we are all trying to build our fortune by finding well-run companies at bargain-basement prices. But it takes work -- scouring company earnings reports, scrutinizing key data, and assessing the competition. Because of that, we've created a screen based on the massive data aggregated from the more than 150,000 investors competing on our Motley Fool CAPSplatform. Each quarter, we check in on select companies after they file a 10-Q and track community sentiment -- so you can see how your company is doing. Here's the community sentiment on Chindex International, Inc. (Nasdaq: CHDX) both this quarter and last (for comparison), as well as opinions on some related companies. Metric Chindex International, Inc. (Nasdaq: CHDX) Sunrise Senior Living, Inc. (NYSE: SRZ) Community Health Systems (NYSE: CYH) America Service Group, Inc. (Nasdaq: ASGR) This Quarter (2/8/2010): Price: $10.51 $3.10 $31.68 $14.73 % of Members Rating Outperform 93% 87% 89% 90% % of All-Star Members Rating Outperform 100% 87% 87% 94% CAPS Rating (out of 5) Last Quarter (11/10/2009): Price: $15.01 $2.66 $33.35 $13.25 % of Members Rating Outperform 92% 87% 87% 90% % of All-Star Members Rating Outperform 96% 87% 84% 94% CAPS Rating (out of 5)Source: Motley Fool CAPS. Dates given are the posting dates of Chindex International, Inc.'s most recent quarterly and/or annual reports to the SEC's website. Percentages are calculated from the number of members rating each company. A change in the community's approval (signified by four- and five-star ratings) or disapproval (one- and two-star ratings) could indicate that further research is in order. To help make your research easier …  CAPS service-- a one-stop research shop -- and read what your fellow investors are saying about your stocks.This article was originally published as Chindex International, Inc.: Warming Up or Cooling Off?on Fool.com Copyright © 2009 The Motley Fool, LLC. All rights reserved. Compuware Corp: Warming Up or Cooling Off?By Motley Fool StaffFebruary 9, 2010 Together, we are all trying to build our fortune by finding well-run companies at bargain-basement prices. But it takes work -- scouring company earnings reports, scrutinizing key data, and assessing the competition. Because of that, we've created a screen based on the massive data aggregated from the more than 150,000 investors competing on our Motley Fool CAPSplatform. Each quarter, we check in on select companies after they file a 10-Q and track community sentiment -- so you can see how your company is doing. Here's the community sentiment on Compuware Corp (Nasdaq: CPWR) both this quarter and last (for comparison), as well as opinions on some related companies. Metric Compuware Corp (Nasdaq: CPWR) Blackboard, Inc. (Nasdaq: BBBB) Webzen, Inc. (ADR) (Nasdaq: WZEN) SAP AG (ADR) (NYSE: SAP) This Quarter (2/8/2010): Price: $7.09 $37.85 $2.96 $43.29 % of Members Rating Outperform 83% 94% 93% 84% % of All-Star Members Rating Outperform 90% 92% 98% 86% CAPS Rating (out of 5) Last Quarter (11/10/2009): Price: $7.54 $41.14 $3.05 $46.94 % of Members Rating Outperform 82% 94% 93% 85% % of All-Star Members Rating Outperform 82% 92% 97% 85% CAPS Rating (out of 5)Source: Motley Fool CAPS. Dates given are the posting dates of Compuware Corp's most recent quarterly and/or annual reports to the SEC's website. Percentages are calculated from the number of members rating each company. A change in the community's approval (signified by four- and five-star ratings) or disapproval (one- and two-star ratings) could indicate that further research is in order. To help make your research easier …  CAPS service-- a one-stop research shop -- and read what your fellow investors are saying about your stocks.This article was originally published as Compuware Corp: Warming Up or Cooling Off?on Fool.com Copyright © 2009 The Motley Fool, LLC. All rights reserved. Conexant Systems, Inc.: Warming Up or Cooling Off?By Motley Fool StaffFebruary 9, 2010 Together, we are all trying to build our fortune by finding well-run companies at bargain-basement prices. But it takes work -- scouring company earnings reports, scrutinizing key data, and assessing the competition. Because of that, we've created a screen based on the massive data aggregated from the more than 150,000 investors competing on our Motley Fool CAPSplatform. Each quarter, we check in on select companies after they file a 10-Q and track community sentiment -- so you can see how your company is doing. Here's the community sentiment on Conexant Systems, Inc. (Nasdaq: CNXT) both this quarter and last (for comparison), as well as opinions on some related companies. Metric Conexant Systems, Inc. (Nasdaq: CNXT) Trina Solar Limited (ADR) (NYSE: TSL) Novellus Systems, Inc. (Nasdaq: NVLS) Photronics, Inc. (Nasdaq: PLAB) This Quarter (2/8/2010): Price: $3.87 $23.11 $21.48 $3.64 % of Members Rating Outperform 87% 83% 77% 67% % of All-Star Members Rating Outperform 86% 71% 83% 62% CAPS Rating (out of 5) Last Quarter (11/10/2009): Price: $2.44 $19.48 $21.16 $4.29 % of Members Rating Outperform 88% 83% 77% 66% % of All-Star Members Rating Outperform 90% 73% 84% 52% CAPS Rating (out of 5)Source: Motley Fool CAPS. Dates given are the posting dates of Conexant Systems, Inc.'s most recent quarterly and/or annual reports to the SEC's website. Percentages are calculated from the number of members rating each company. A change in the community's approval (signified by four- and five-star ratings) or disapproval (one- and two-star ratings) could indicate that further research is in order. To help make your research easier …  CAPS service-- a one-stop research shop -- and read what your fellow investors are saying about your stocks.This article was originally published as Conexant Systems, Inc.: Warming Up or Cooling Off?on Fool.com Copyright © 2009 The Motley Fool, LLC. All rights reserved. What Investors Think About Bottomline TechnologiesBy Motley Fool StaffFebruary 9, 2010 Together, we are all trying to build our fortune by finding well-run companies at bargain-basement prices. But it takes work -- scouring company earnings reports, scrutinizing key data, and assessing the competition. Because of that, we've created a screen based on the massive data aggregated from the more than 150,000 investors competing on our Motley Fool CAPSplatform. Each quarter, we check in on select companies after they file a 10-Q and track community sentiment -- so you can see how your company is doing. Here's the community sentiment on Bottomline Technologies (Nasdaq: EPAY) both this quarter and last (for comparison), as well as opinions on some related companies. Metric Bottomline Technologies (Nasdaq: EPAY) Giant Interactive Group (NYSE: GA) MicroStrategy, Inc. (Nasdaq: MSTR) Compuware Corp (Nasdaq: CPWR) This Quarter (2/8/2010): Price: $15.36 $7.33 $81.26 $7.09 % of Members Rating Outperform 67% 96% 89% 83% % of All-Star Members Rating Outperform 71% 99% 84% 90% CAPS Rating (out of 5) Last Quarter (11/10/2009): Price: $15.38 $7.08 $88.31 $7.54 % of Members Rating Outperform 73% 96% 88% 82% % of All-Star Members Rating Outperform 67% 97% 81% 82% CAPS Rating (out of 5)Source: Motley Fool CAPS. Dates given are the posting dates of Bottomline Technologies's most recent quarterly and/or annual reports to the SEC's website. Percentages are calculated from the number of members rating each company. A change in the community's approval (signified by four- and five-star ratings) or disapproval (one- and two-star ratings) could indicate that further research is in order. To help make your research easier …  CAPS service-- a one-stop research shop -- and read what your fellow investors are saying about your stocks.This article was originally published as What Investors Think About Bottomline Technologieson Fool.com Copyright © 2009 The Motley Fool, LLC. All rights reserved. What Investors Think About Cubic Corp.By Motley Fool StaffFebruary 9, 2010 Together, we are all trying to build our fortune by finding well-run companies at bargain-basement prices. But it takes work -- scouring company earnings reports, scrutinizing key data, and assessing the competition. Because of that, we've created a screen based on the massive data aggregated from the more than 150,000 investors competing on our Motley Fool CAPSplatform. Each quarter, we check in on select companies after they file a 10-Q and track community sentiment -- so you can see how your company is doing. Here's the community sentiment on Cubic Corp (NYSE: CUB) both this quarter and last (for comparison), as well as opinions on some related companies. Metric Cubic Corp (NYSE: CUB) Ceradyne, Inc. (Nasdaq: CRDN) Herley Industries, Inc. (Nasdaq: HRLY) Orbital Sciences Corp. (NYSE: ORB) This Quarter (2/8/2010): Price: $35.07 $19.99 $11.80 $16.11 % of Members Rating Outperform 97% 97% 84% 98% % of All-Star Members Rating Outperform 99% 98% 75% 98% CAPS Rating (out of 5) Last Quarter (11/10/2009): Price: $34.81 $17.14 $10.99 $13.04 % of Members Rating Outperform 97% 97% 84% 98% % of All-Star Members Rating Outperform 100% 98% 63% 97% CAPS Rating (out of 5)Source: Motley Fool CAPS. Dates given are the posting dates of Cubic Corp's most recent quarterly and/or annual reports to the SEC's website. Percentages are calculated from the number of members rating each company. A change in the community's approval (signified by four- and five-star ratings) or disapproval (one- and two-star ratings) could indicate that further research is in order. To help make your research easier …  CAPS service-- a one-stop research shop -- and read what your fellow investors are saying about your stocks.This article was originally published as What Investors Think About Cubic Corp.on Fool.com Copyright © 2009 The Motley Fool, LLC. All rights reserved. What Investors Think About Dawson GeophysicalBy Motley Fool StaffFebruary 9, 2010 Together, we are all trying to build our fortune by finding well-run companies at bargain-basement prices. But it takes work -- scouring company earnings reports, scrutinizing key data, and assessing the competition. Because of that, we've created a screen based on the massive data aggregated from the more than 150,000 investors competing on our Motley Fool CAPSplatform. Each quarter, we check in on select companies after they file a 10-Q and track community sentiment -- so you can see how your company is doing. Here's the community sentiment on Dawson Geophysical Company (Nasdaq: DWSN) both this quarter and last (for comparison), as well as opinions on some related companies. Metric Dawson Geophysical Company (Nasdaq: DWSN) Smith International, Inc. (NYSE: SII) Noble Corp (NYSE: NE) Tenaris S.A. (ADR) (NYSE: TS) This Quarter (2/8/2010): Price: $23.83 $30.21 $38.94 $42.00 % of Members Rating Outperform 98% 95% 99% 97% % of All-Star Members Rating Outperform 98% 95% 99% 98% CAPS Rating (out of 5) Last Quarter (11/10/2009): Price: $23.85 $29.50 $42.92 $40.83 % of Members Rating Outperform 98% 96% 99% 97% % of All-Star Members Rating Outperform 98% 95% 99% 97% CAPS Rating (out of 5)Source: Motley Fool CAPS. Dates given are the posting dates of Dawson Geophysical Company's most recent quarterly and/or annual reports to the SEC's website. Percentages are calculated from the number of members rating each company. A change in the community's approval (signified by four- and five-star ratings) or disapproval (one- and two-star ratings) could indicate that further research is in order. To help make your research easier …  CAPS service-- a one-stop research shop -- and read what your fellow investors are saying about your stocks.This article was originally published as What Investors Think About Dawson Geophysicalon Fool.com Copyright © 2009 The Motley Fool, LLC. All rights reserved. What Investors Think About Delta ApparelBy Motley Fool StaffFebruary 9, 2010 Together, we are all trying to build our fortune by finding well-run companies at bargain-basement prices. But it takes work -- scouring company earnings reports, scrutinizing key data, and assessing the competition. Because of that, we've created a screen based on the massive data aggregated from the more than 150,000 investors competing on our Motley Fool CAPSplatform. Each quarter, we check in on select companies after they file a 10-Q and track community sentiment -- so you can see how your company is doing. Here's the community sentiment on Delta Apparel, Inc. (AMEX: DLA) both this quarter and last (for comparison), as well as opinions on some related companies. Metric Delta Apparel, Inc. (AMEX: DLA) True Religion Apparel, Inc. (Nasdaq: TRLG) Iconix Brand Group, Inc. (Nasdaq: ICON) VF Corp (NYSE: VFC) This Quarter (2/8/2010): Price: $13.55 $18.73 $12.61 $71.41 % of Members Rating Outperform 93% 87% 95% 93% % of All-Star Members Rating Outperform 100% 86% 96% 98% CAPS Rating (out of 5) Last Quarter (11/10/2009): Price: $11.21 $20.84 $12.12 $75.24 % of Members Rating Outperform 92% 85% 95% 93% % of All-Star Members Rating Outperform 100% 79% 94% 96% CAPS Rating (out of 5)Source: Motley Fool CAPS. Dates given are the posting dates of Delta Apparel, Inc.'s most recent quarterly and/or annual reports to the SEC's website. Percentages are calculated from the number of members rating each company. A change in the community's approval (signified by four- and five-star ratings) or disapproval (one- and two-star ratings) could indicate that further research is in order. To help make your research easier …  CAPS service-- a one-stop research shop -- and read what your fellow investors are saying about your stocks.This article was originally published as What Investors Think About Delta Apparelon Fool.com Copyright © 2009 The Motley Fool, LLC. All rights reserved. What Investors Think About DynCorp InternationalBy Motley Fool StaffFebruary 9, 2010 Together, we are all trying to build our fortune by finding well-run companies at bargain-basement prices. But it takes work -- scouring company earnings reports, scrutinizing key data, and assessing the competition. Because of that, we've created a screen based on the massive data aggregated from the more than 150,000 investors competing on our Motley Fool CAPSplatform. Each quarter, we check in on select companies after they file a 10-Q and track community sentiment -- so you can see how your company is doing. Here's the community sentiment on DynCorp International, Inc. (NYSE: DCP) both this quarter and last (for comparison), as well as opinions on some related companies. Metric DynCorp International, Inc. (NYSE: DCP) L-3 Communications Holdings, Inc. (NYSE: LLL) Precision Castparts Corp. (NYSE: PCP) Raytheon Company (NYSE: RTN) This Quarter (2/8/2010): Price: $10.68 $84.60 $105.95 $52.79 % of Members Rating Outperform 93% 97% 98% 95% % of All-Star Members Rating Outperform 95% 97% 98% 97% CAPS Rating (out of 5) Last Quarter (11/10/2009): Price: $17.01 $76.59 $100.23 $48.08 % of Members Rating Outperform 92% 96% 98% 95% % of All-Star Members Rating Outperform 90% 97% 98% 97% CAPS Rating (out of 5)Source: Motley Fool CAPS. Dates given are the posting dates of DynCorp International, Inc.'s most recent quarterly and/or annual reports to the SEC's website. Percentages are calculated from the number of members rating each company. A change in the community's approval (signified by four- and five-star ratings) or disapproval (one- and two-star ratings) could indicate that further research is in order. To help make your research easier …  CAPS service-- a one-stop research shop -- and read what your fellow investors are saying about your stocks.This article was originally published as What Investors Think About DynCorp Internationalon Fool.com Copyright © 2009 The Motley Fool, LLC. All rights reserved. What Investors Think About Eagle MaterialsBy Motley Fool StaffFebruary 9, 2010 Together, we are all trying to build our fortune by finding well-run companies at bargain-basement prices. But it takes work -- scouring company earnings reports, scrutinizing key data, and assessing the competition. Because of that, we've created a screen based on the massive data aggregated from the more than 150,000 investors competing on our Motley Fool CAPSplatform. Each quarter, we check in on select companies after they file a 10-Q and track community sentiment -- so you can see how your company is doing. Here's the community sentiment on Eagle Materials, Inc. (NYSE: EXP) both this quarter and last (for comparison), as well as opinions on some related companies. Metric Eagle Materials, Inc. (NYSE: EXP) Lafarge S.A. (ADR) (Nasdaq Oth: LFRGY.PK) Cemex S.A. B de C.V. (ADR) (NYSE: CX) Martin Marietta Materials, Inc. (NYSE: MLM) This Quarter (2/8/2010): Price: $22.57 $17.28 $9.47 $79.61 % of Members Rating Outperform 94% 81% 97% 85% % of All-Star Members Rating Outperform 95% 74% 98% 87% CAPS Rating (out of 5) Last Quarter (11/10/2009): Price: $26.92 $21.29 $11.56 $85.16 % of Members Rating Outperform 94% 81% 97% 85% % of All-Star Members Rating Outperform 95% 74% 98% 87% CAPS Rating (out of 5)Source: Motley Fool CAPS. Dates given are the posting dates of Eagle Materials, Inc.'s most recent quarterly and/or annual reports to the SEC's website. Percentages are calculated from the number of members rating each company. A change in the community's approval (signified by four- and five-star ratings) or disapproval (one- and two-star ratings) could indicate that further research is in order. To help make your research easier …  CAPS service-- a one-stop research shop -- and read what your fellow investors are saying about your stocks.This article was originally published as What Investors Think About Eagle Materialson Fool.com Copyright © 2009 The Motley Fool, LLC. All rights reserved. What Investors Think About Epoch Holding Corp.By Motley Fool StaffFebruary 9, 2010 Together, we are all trying to build our fortune by finding well-run companies at bargain-basement prices. But it takes work -- scouring company earnings reports, scrutinizing key data, and assessing the competition. Because of that, we've created a screen based on the massive data aggregated from the more than 150,000 investors competing on our Motley Fool CAPSplatform. Each quarter, we check in on select companies after they file a 10-Q and track community sentiment -- so you can see how your company is doing. Here's the community sentiment on Epoch Holding Corp (Nasdaq: EPHC) both this quarter and last (for comparison), as well as opinions on some related companies. Metric Epoch Holding Corp (Nasdaq: EPHC) Main Street Capital Holdings (Nasdaq: MAIN) Jefferies Group, Inc. (NYSE: JEF) The Charles Schwab Corp (Nasdaq: SCHW) This Quarter (2/8/2010): Price: $9.97 $14.03 $24.82 $17.72 % of Members Rating Outperform 89% 93% 75% 94% % of All-Star Members Rating Outperform 92% 95% 65% 95% CAPS Rating (out of 5) Last Quarter (11/10/2009): Price: $9.28 $13.48 $28.18 $17.64 % of Members Rating Outperform 91% 91% 72% 94% % of All-Star Members Rating Outperform 88% 92% 52% 95% CAPS Rating (out of 5)Source: Motley Fool CAPS. Dates given are the posting dates of Epoch Holding Corp's most recent quarterly and/or annual reports to the SEC's website. Percentages are calculated from the number of members rating each company. A change in the community's approval (signified by four- and five-star ratings) or disapproval (one- and two-star ratings) could indicate that further research is in order. To help make your research easier …  CAPS service-- a one-stop research shop -- and read what your fellow investors are saying about your stocks.This article was originally published as What Investors Think About Epoch Holding Corp.on Fool.com Copyright © 2009 The Motley Fool, LLC. All rights reserved. What Investors Think About ESCO TechnologiesBy Motley Fool StaffFebruary 9, 2010 Together, we are all trying to build our fortune by finding well-run companies at bargain-basement prices. But it takes work -- scouring company earnings reports, scrutinizing key data, and assessing the competition. Because of that, we've created a screen based on the massive data aggregated from the more than 150,000 investors competing on our Motley Fool CAPSplatform. Each quarter, we check in on select companies after they file a 10-Q and track community sentiment -- so you can see how your company is doing. Here's the community sentiment on ESCO Technologies, Inc. (NYSE: ESE) both this quarter and last (for comparison), as well as opinions on some related companies. Metric ESCO Technologies, Inc. (NYSE: ESE) RBC Bearings, Inc. (Nasdaq: ROLL) New Flyer Inds. Inc. (Nasdaq Oth: NFYIF.PK) John Bean Technologies (NYSE: JBT) This Quarter (2/8/2010): Price: $31.45 $24.00 $9.86 $15.67 % of Members Rating Outperform 86% 96% 100% 98% % of All-Star Members Rating Outperform 87% 96% 100% 100% CAPS Rating (out of 5) Last Quarter (11/10/2009): Price: $39.99 $21.09 $8.50 $18.07 % of Members Rating Outperform 90% 97% 93% 98% % of All-Star Members Rating Outperform 95% 95% 100% 100% CAPS Rating (out of 5)Source: Motley Fool CAPS. Dates given are the posting dates of ESCO Technologies, Inc.'s most recent quarterly and/or annual reports to the SEC's website. Percentages are calculated from the number of members rating each company. A change in the community's approval (signified by four- and five-star ratings) or disapproval (one- and two-star ratings) could indicate that further research is in order. To help make your research easier …  CAPS service-- a one-stop research shop -- and read what your fellow investors are saying about your stocks.This article was originally published as What Investors Think About ESCO Technologieson Fool.com Copyright © 2009 The Motley Fool, LLC. All rights reserved. What Investors Think About Fair IsaacBy Motley Fool StaffFebruary 9, 2010 Together, we are all trying to build our fortune by finding well-run companies at bargain-basement prices. But it takes work -- scouring company earnings reports, scrutinizing key data, and assessing the competition. Because of that, we've created a screen based on the massive data aggregated from the more than 150,000 investors competing on our Motley Fool CAPSplatform. Each quarter, we check in on select companies after they file a 10-Q and track community sentiment -- so you can see how your company is doing. Here's the community sentiment on Fair Isaac Corp (NYSE: FICO) both this quarter and last (for comparison), as well as opinions on some related companies. Metric Fair Isaac Corp (NYSE: FICO) Shanda Interactive Entertainment Ltd ADR (Nasdaq: SNDA) China TransInfo Technology Corp. (Nasdaq: CTFO) SAP AG (ADR) (NYSE: SAP) This Quarter (2/8/2010): Price: $19.95 $47.65 $6.58 $43.29 % of Members Rating Outperform 87% 96% 70% 84% % of All-Star Members Rating Outperform 93% 94% 50% 86% CAPS Rating (out of 5) Last Quarter (11/10/2009): Price: $18.05 $49.01 $8.57 $46.94 % of Members Rating Outperform 87% 96% 59% 85% % of All-Star Members Rating Outperform 94% 94% 34% 85% CAPS Rating (out of 5)Source: Motley Fool CAPS. Dates given are the posting dates of Fair Isaac Corp's most recent quarterly and/or annual reports to the SEC's website. Percentages are calculated from the number of members rating each company. A change in the community's approval (signified by four- and five-star ratings) or disapproval (one- and two-star ratings) could indicate that further research is in order. To help make your research easier …  CAPS service-- a one-stop research shop -- and read what your fellow investors are saying about your stocks.This article was originally published as What Investors Think About Fair Isaacon Fool.com Copyright © 2009 The Motley Fool, LLC. All rights reserved. What Investors Think About FuelCell EnergyBy Motley Fool StaffFebruary 9, 2010 Together, we are all trying to build our fortune by finding well-run companies at bargain-basement prices. But it takes work -- scouring company earnings reports, scrutinizing key data, and assessing the competition. Because of that, we've created a screen based on the massive data aggregated from the more than 150,000 investors competing on our Motley Fool CAPSplatform. Each quarter, we check in on select companies after they file a 10-Q and track community sentiment -- so you can see how your company is doing. Here's the community sentiment on FuelCell Energy, Inc. (Nasdaq: FCEL) both this quarter and last (for comparison), as well as opinions on some related companies. Metric FuelCell Energy, Inc. (Nasdaq: FCEL) Gamesa Tecnologica (Nasdaq Oth: GCTAF.PK) Cooper Industries, Ltd. (NYSE: CBE) Orion Energy Systems (Nasdaq: OESX) This Quarter (2/8/2010): Price: $2.62 $12.50 $42.08 $5.36 % of Members Rating Outperform 82% 97% 90% 95% % of All-Star Members Rating Outperform 57% 100% 91% 95% CAPS Rating (out of 5) Last Quarter (11/10/2009): Price: $3.47 $20.00 $42.18 $3.87 % of Members Rating Outperform 82% 97% 90% 96% % of All-Star Members Rating Outperform 52% 100% 91% 93% CAPS Rating (out of 5)Source: Motley Fool CAPS. Dates given are the posting dates of FuelCell Energy, Inc.'s most recent quarterly and/or annual reports to the SEC's website. Percentages are calculated from the number of members rating each company. A change in the community's approval (signified by four- and five-star ratings) or disapproval (one- and two-star ratings) could indicate that further research is in order. To help make your research easier …  CAPS service-- a one-stop research shop -- and read what your fellow investors are saying about your stocks.This article was originally published as What Investors Think About FuelCell Energyon Fool.com Copyright © 2009 The Motley Fool, LLC. All rights reserved. Amazon's World Domination PlanBy Mehran MikailizadehFebruary 9, 2010 Amazon.com (Nasdaq: AMZN) recently reported fourth-quarter financials, and its numbers were nothing short of spectacular. Net income was up a whopping 71%. Year-over-year sales rose 42%, compared to expectations for 25% growth. Media sales grew 29%, while sales in other departments grew as quickly as 60%. Clearly, non-media sales are Amazon's real growth driver, not only from the site's direct retail efforts, but also more and more from its third-party merchants. I am one of Amazon's third-party (or 3P) merchants, selling products primarily in Amazon's Sports, Toys & Games, and Home stores. Based on Amazon's emails, we're probably one of the largest 3P merchants in its Sports store. We started on Amazon back in 2004, after a phone call from an Amazon Sports store manager. Back then, we primarily sold our products through our own websites, and by driving traffic to our shops with Google (Nasdaq: GOOG) ads. We were also an eBay (Nasdaq: EBAY) PowerSeller going back to 1998. But like thousands of other unhappy sellers who left eBay for other channels, our eBay sales were close to zero when we joined Amazon -- and we haven't looked back since.
The Amazon difference
Six years later, our sales on Amazon have been on a steady rise, with the fastest growth coming in 2009. Looking at our own data, I can clearly attribute our accelerated 2009 growth to Fulfillment by Amazon, or FBA. With FBA, we ship our merchandise in bulk to Amazon's warehouses, and Amazon sells, packs, and ships the orders, and pays us after deducting its cut, shipping costs, and small warehousing fees. We set prices, but Amazon handles customer service and returns. So far, that's not much different than if we fulfilled the orders directly. But with FBA, most of our products become eligible for Amazon's free shipping or its Prime service. That's the real differentiator that helps sell FBA items faster than non-FBA offerings. In my experience, sales of an item in FBA can be higher by 1,000% or more, compared to the sales of the same item fulfilled by us.
The power of the brand
Amazon's brand is so powerful that even companies that were once big competitors to Amazon have thrown in the towel and joined it. A good example is Buy.com, the large online retailer from the dot-com bubble period that was once considered a threat to Amazon's dominance. As recently as one year ago, Buy.com was engaging in price wars with Amazon, and heavily pushing its own third-party merchant program. But Buy.com is now a 3P Amazon merchant, and looking at its seller feedback, it appears that it joined Amazon just about three months ago (almost all of its 38,000 reviews were posted in the last 90 days).
Too little, too late
Of course, the genius of Amazon's 3P merchant program
doesn't end there. The grandmaster of this online retail
chess game has bigger plans that are quite dangerous to small
3P merchants like us, and even larger sites like Buy.com.
Amazon Retail (the division responsible for all items owned
and sold directly by Amazon) and FBA (the division that deals
with 3P merchants) are separate and competing divisions, and
it is not a fair competition.
Amazon Retail managers and buyers have full access to all the data generated by 3P merchants. They know what we sell, who the manufacturers are, for how much and how fast we sell them, and what products consumers are happy with. Armed with all this data, Amazon Retail can cherry-pick the best-selling items and procure them directly from the manufacturers to compete with its own 3P merchants. I've seen this happening in store after store and category after category, where top-selling products once sold by others are now taken over by Amazon Retail.
World (retail) domination
This article was originally published as Amazon's World Domination Planon Fool.com Copyright © 2009 The Motley Fool, LLC. All rights reserved. Monday's Biggest Stock StarsBy Brian D. PacamparaFebruary 9, 2010
Hey there, Fools. I've summoned our Motley Fool CAPScommunity once again to highlight a few of Monday's biggest winners among the stocks with top ratingsof four or five stars: Company Yesterday's Gain Hasbro (NYSE: HAS) 12.69% Accuray 7.88% CVS Caremark (NYSE: CVS) 5.31% CDC 4.72% ATP Oil & Gas 4.18% There's a reason I selected those notable gainers, as opposed to other winners making noise on Monday, like low-rated Motorola (NYSE: MOT). Stocks go up all the time, but unless you were able to predict the pop, what does it matter?  Our community of more than 150,000 CAPS Fools considers its high-star stocks the most likely to outperform the market.
Written in the (five) stars?
They have some good franchises they are finally capitalizing on and should feed into future profits. A third installment of Transformers and a sequel to GI Joe is in development. Both are 100 million blockbusters and the merchandising will reward the investors that are patient for at least two to three years. Shares of Hasbro are up over 22% since that call. In fact, yesterday's double-digit pop came after the company's quarterly results easily topped Wall Street estimates on strong sales of its Transformers and G.I. Joe toys -- not to mention Nerf toys -- consistent with daniel5724's bullishness.
The bullish lesson?
And now for the losers ...
Here are five of Monday's biggest decliners with one- or two-star ratings: Â Â Company Yesterday's Loss PRIMEDIA (NYSE: PRM) 9.88% Canadian Solar 6.18% Palm (Nasdaq: PALM) 5.20% Trina Solar 4.03% Sony (NYSE: SNE) 3.65% While yesterday's drop in highly rated Yamana Gold (NYSE: AUY) may have caught our community off guard, low-ranked stocks are fully expected to fall hard.
Did CAPS call the fall?
The Internet has brought about business environment changes in an inconsistent manner. Some businesses see little change or are helped by the new technologies. Others are hurt as the old ways of doing business are no longer sufficient. Primedia falls into the later group and their lack of earnings and revenue growth reflect this new reality. Including yesterday's drop, shares of the real estate consumer guide publisher are already down 27% since that warning.
The bearish takeaway?
The final Foolish move
Over at Motley Fool CAPS, thousands of investors are Foolishly sharing insightful investment tips to help identify tomorrow'sbig movers. Over time, consistently reverse-engineering winning -- and losing -- stocks will help you retire wealthy. Log into CAPS today and start participating. It's absolutely free -- and a lot of fun! This article was originally published as Monday's Biggest Stock Starson Fool.com Copyright © 2009 The Motley Fool, LLC. All rights reserved. 5-Star Stocks Poised to Pop: China North East PetroleumBy Brian D. PacamparaFebruary 9, 2010 Based on the aggregated intelligence of 150,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, Chinese oil producer China North East Petroleum (NYSE: NEP) has earned a coveted five-star ranking. With that in mind, let's take a closer look at China North East Petroleum's business and see what CAPS investors are saying about the stock right now. China North East Petroleum facts Headquarters (Founded) Song Yuan City, China (1999) Market Cap $221 million Industry Oil and gas exploration and production Trailing-12-Month Revenue $49 million Management CEO Hong Jun Wang (since 2004) CFO Yang Dio Zhang (since 2006) Trailing-12-Month Return on Equity 27.8% Cash/Debt $33.2 million / $12.4 million Other Highly Rated Oil Stocks ExxonMobil (NYSE: XOM) BP (NYSE: BP) ConocoPhillips (NYSE: COP) CAPS Members Bullish on NEP Also Bullish on General Electric (NYSE: GE) China Green Agriculture (NYSE: CGA) CAPS Members Bearish on NEP Also Bearish on SMART Modular Technologies (Nasdaq: SMOD) Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS. On CAPS, 98% of the 439 members who have rated China North East Petroleum believe the stock will outperform the S&P 500 going forward. These bulls include All-Star LondonMatt, who is ranked in the top 18% of our community, and saveslave. Last month, LondonMatt tapped the company as a slick way to play China: "Low cost of production and remarkable track record at finding producing wells (100% success rate) and strong cash flow, with a long-term 20-year contract with [ PetroChina ] to purchase the output." In a pitch from two weeks later, saveslave expandson the stock's multibagger potential: Growth in China is looking very promising. Company has a beautiful balance sheet, and has made some very significant deals of late, which should put them in prime position as China keeps increasing their oil demand. Stock has pulled back nicely in that last week to provide multiple entry points. What do you think about China North East Petroleum, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started! This article was originally published as 5-Star Stocks Poised to Pop: China North East Petroleumon Fool.com Copyright © 2009 The Motley Fool, LLC. All rights reserved. 5-Star Stocks Poised to Pop: ISTA PharmaceuticalsBy Brian D. PacamparaFebruary 9, 2010 Based on the aggregated intelligence of 150,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, ophthalmic drug company ISTA Pharmaceuticals (Nasdaq: ISTA) has earned a coveted five-star ranking. With that in mind, let's take a closer look at ISTA's business and see what CAPS investors are saying about the stock right now. ISTA facts Headquarters (Founded) Irvine, Calif. (1992) Market Cap $120 million Industry Pharmaceuticals Trailing-12-Month Revenue $104 million Management CEO Dr. Vicente Anido, Jr. (since 2001) CFO Lauren Silvernail (since 2003) Return on Assets (Average, Past 3 Years) (19.8%) Compound Annual Revenue Growth (Average, Past 3 Years) 62.3% Cash/Debt $55 million / $70 million Competitors Pfizer (NYSE: PFE) Novartis (NYSE: NVS) Johnson & Johnson (NYSE: JNJ) CAPS Members Bullish on ISTA Also Bullish on American Oriental Bioengineering (NYSE: AOB) Vale (NYSE: VALE) CAPS Members Bearish on ISTA Also Bearish on Dendreon (Nasdaq: DNDN) Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS. On CAPS, 92% of the 92 members who have rated ISTA believe the stock will outperform the S&P 500 going forward. These bulls include All-Star zzlangerhans, who is ranked in the top 0.5% of our community, and fireinyoureyes. Late last month, zzlangerhans singled out ISTA as a sight for sore eyes: "Improving sales of ophthalmic medications appear to have reduced the burn and preserved cash, as long as there won't be any further 'warranty valuation losses'. A likely positive short-term catalyst is FDA acceptance of the sNDA for once-daily Xibrom." In a pitch from two days ago, fireinyoureyes followsthat line of reasoning: It should go up after the next earnings report as Bepreve starts to grow, and Xibrom continues to lead the market. Another catalyst will be the Xibrom-once daily mid 2010 approval date which will cement Xibrom's market share. With Novartis finishing up scooping [ Alcon ], I'm sure big pharma will by eyeing (pardon the pun) Ista in the next couple of years, hopefully well after Ista grows in earnings and stock price. With a good pipeline and positive 2010 income on the way, the stock price is much undervalued. I'm very bullish at these levels. What do you think about ISTA, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started! . This article was originally published as 5-Star Stocks Poised to Pop: ISTA Pharmaceuticalson Fool.com Copyright © 2009 The Motley Fool, LLC. All rights reserved. Is There Room for Morality in Capitalism?By Matt KoppenhefferFebruary 9, 2010 Princeton's WordNet defines "moral" as "concerned with principles of right and wrong or conforming to standards of behavior and character based on those principles." In other words, we're talking about good and bad, righteous and evil, Rebel and Imperial. The age-old showdown. But how do morals fit into the world of business and commerce? It's at the heart of a fiery debate I ignited a couple of weeks ago with an article titled " Why Are Homeowners Idiots?" and stoked last week with a follow-up piece. While the debate began about whether homeowners should be able to voluntarily walk away from their mortgages, the larger theme that has developed is whether there is a code of conduct over and above rules, regulations, and laws that all economic participants should adhere to.
Sure doesn't look like it
An easy one to start with is tobacco merchant Altria (NYSE: MO), the company behind brands like Marlboro, Parliament, Virginia Slims, Skoal, and Copenhagen. While the company isn't doing anything legallywrong, its sole business is selling products that are known to be addictive and and known to cause cancer. From there we could move on to some of the major U.S. oil companies for more easy pickings. Chevron , for example, has found itself in the sights of Amnesty International for shady practices and trashing the environment in areas like Nigeria and Ecuador. Fellow big-oil player ExxonMobil (NYSE: XOM) fought tooth-and-nail for nearly 20 years to try and avoid punitive damages to Alaska fishermen after the Exxon Valdez oil spill. Meanwhile, Wal-Mart Stores (NYSE: WMT) is under constant scrutiny over its employment practices, while major insurers' denying coverage for pre-existing conditions is a big part of why many lawmakers are pushing so hard for health-care reform. And of course we can't leave out financial firms like Goldman Sachs (NYSE: GS), JPMorgan Chase , and Morgan Stanley , who are right back to risky trading and awarding massive bonusesshortly after being bailed out of a near-death state by American taxpayers. Heck, even the revered Berkshire Hathaway (NYSE: BRK-A) has come under fire for things like its investment in PetroChina and subsidiary PacifiCorp's dams on the Klamath River. In most cases, these companies aren't doing anything illegal -- they're simply operating within the rules of our system. However, it would stand to reason that if there was a "higher order" of rules that should be followed in the economy, they may be sorely underperforming.
Just because everyone else is doing it ...
Privately held burger chain In-N-Out, meanwhile, voluntarily pays its employees well above minimum wage. Whole Foods (Nasdaq: WFMI) and its outspoken CEO, John Mackey, are known for employee-friendly practices which include limiting executive compensation to 19 times the average hourly wage of $16.98. Not that this impacts Mackey -- he makes only $1 per year. Google (Nasdaq: GOOG), the "don't be evil" company, wanted to do its part to combat global warmingand installed 9,212 solar panels at its corporate headquarters. Other companies, including Comcast , Eli Lilly , and Oracle , donate hundreds of millions, if not billions, of dollars to charitable causes. Certainly, many companies take actions specifically to polish up their corporate image, but it would probably be considered a bit cynical to suggest that every supposedly good and moral action taken by a company is for public relations.
But who cares?
Log your vote in the Motley Poll below and then head down to the comments section to explain why it does or doesn't matter whether companies go over and above to be good and moral. This article was originally published as Is There Room for Morality in Capitalism?on Fool.com Copyright © 2009 The Motley Fool, LLC. All rights reserved. Clorox: A Dull Gleam, or Just Plain Dull?By Mike PienciakFebruary 9, 2010 Clorox 's (NYSE: CLX) profits, sales, and volumes are all up. So why does the consumer-staples company continue to trade at a wide discount to peers? The company behind such household brands as Brita, Fresh Step, and Glad posted fiscal-2010 second-quarter sales of $1.28 billion -- 5% better than the year-ago period. And that's quality growth, driven mostly by volume gains instead of pricing and foreign exchange tailwinds. Earnings per share came in at $0.77, representing a 26% year-over-year jump. Profit was goosed by improved top-line results and dramatically wider gross margin. The latter owed to lower commodity costs and efficiency initiatives, among other factors. Yet shares are trading at a forward P/E of 13, nearly unchanged from October 2009. The market, methinks, must be tuning into other factors. For starters, consumption in U.S. "tracked channels" was down slightly during the quarter. But as management pointed out to conference-call listeners, this data represents only about a third of the company's U.S. business volume -- no surprise, given that the data doesn't include sales at major retailers such as Wal-Mart Stores (NYSE: WMT). Moreover, Clorox's quarterly U.S. product shipments increased 6%, suggesting that the consumption figures, however flawed, may be set for a turnaround. Previously, I discussed the company's vulnerability to consumer trade-down, but management just reported that "private label growth was less of a factor than it has been in the last several quarters." Reason for the stock to rally, no? Ultimately, I'm guessing that investor reluctance can be traced to management's price-cutting ways. The evidence is stark: In three of the company's four segments, sales growth meaningfully lagged volume gains. Citing competition at the shelf, management was fighting back via product discounts, and elsewhere noted that it was "vigorously defending" market share with pricing adjustments. Summarizing what could be majority sentiment, one marketing expert noted that sales promotions run the risk of conditioning consumers to expect, and wait for, lower prices. Â There are also product-specific trends that evoke concern. The company's Glad food bags, for instance, continue to sell poorly. Meanwhile, the reusable storage products offered by Tupperware Brands (NYSE: TUP) have held up relatively well. Nonetheless, my sense is that the market has gone overboard on worry, leaving shares at least moderately undervalued. Management, for one, expects the industry's aggressive product discounting to ease toward the end of 2010, as rising commodity costs prohibit flexible pricing. That strikes me as a reasonable forecast. So long as the company can hold volumes, the market will, at that point, have little excuse to avoid shares. In the meantime, I continue to believe that Clorox would make an attractive acquisitionfor a global behemoth the likes of Procter & Gamble (NYSE: PG). And while the company will never be as exciting or cutting-edge as a Whole Foods (NYSE: WFMI), Green Mountain Coffee Roasters (Nasdaq: GMCR), or Hain Celestial (Nasdaq: HAIN), its Burt's Bees and Green Works brands are definitely in the sweet spot of long-run health and sustainability trends. Not bad for a boring and overlooked name. Do you think Clorox will clean up, or does its future look grimy? Share your thoughts in the comment box below. Take a shine to further Foolishness: 4-Star Stocks Poised to Pop: Clorox An Investment Poised to Shine 5 Stocks for Growth and IncomeThis article was originally published as Clorox: A Dull Gleam, or Just Plain Dull?on Fool.com Copyright © 2009 The Motley Fool, LLC. All rights reserved. Google's Sweet RevengeBy Rick Aristotle MunarrizFebruary 9, 2010
Getting a buyout offer from Google (Nasdaq: GOOG) can be a perilous proposition. Say yes, and your company's engulfed by Big Goo. Say no -- as rumor suggests Yelp, Twitter, and Digg have -- and the world's largest search engine could simply roll out its own take on your signature tech. Twitter might now be poised to learn that the hard way. The Wall Street Journalis now reporting that Google "is taking a swipe at Facebook and Twitter with a new feature that makes it easier for users of Gmail to view media and status updates shared online by their friends." In short, Google is trying to kill two rising dot-com stars with a single blow. But while it's easy to get excited about Gmail opening up its free email platform to status updates and closer connections to contacts, Google won't be the first to try such a strategy. Yahoo! (Nasdaq: YHOO) turned heads this summerwhen it tried to cash in on what it has called its " dormant social network" by incorporating status update features into Yahoo! Mail. Most savvy dot-com watchers would chuckle at comparing Yahoo! to Google, but email is one area where Yahoo! has the lead. Gmail is a spunky platform, but it's competing against Yahoo!, AOL (NYSE: AOL), and Microsoft 's (Nasdaq: MSFT) Hotmail -- freemail services that have had head starts since the 1990s. In that light, it's probably not a coincidence that reports are beginning to circulate that Facebook is readying its launch its own email service. Gmail's creator even works for Facebook these days! However, we'll have to wait for that service to materialize. It's been nearly a year since News Corp. 's (NYSE: NWS) MySpace changed its corporate email addresses-- prompting many to speculate that it was reserving @myspace.com for a user email platform. That hasn't happened yet. However, it's inevitable that Google will butt heads with Facebook and Twitter. As traffic hubs, social-media sites present a real threat to Big G if folks begin launching their search queries from within the stickier sites. I don't think Facebook or Twitter will lose any sleep if Gmail gets social. Both upstart services -- Facebook in particular -- do more than just send out updates to friends. Google's new initiative can't afford to merely make Gmail a poor man's Twitter. There's too much at stake to take this battle lightly. Does Facebook have a better chance of succeeding in free email than Google does in social media? Share your thoughts in the comments box below. This article was originally published as Google's Sweet Revengeon Fool.com Copyright © 2009 The Motley Fool, LLC. All rights reserved. A 1-in-100 InvestorBy Rich DupreyFebruary 9, 2010
The first 100 days in office set the tone for any new president. Similarly, Motley Fool CAPSkeeps an eye on how well investors do in their first 100 days. Some of our best -- we call them All-Stars -- have achieved scores of 100 on stock selections in their first 100 days on CAPS. In this column, we're looking at our best members who made some of their best stock selections early onand seeing which ones they think will be best next. One of our highest rated CAPS members is floridabuilder2who sports a top 99.61 member rating. A member since August 2007, floridabuilder2 currently has 45 active picks on CAPS out of more than 1,600 stock picks made. Achieving 75% accuracy, floridabuilder2 has attracted a whopping 983 "groupies," CAPS members who've listed this leading investor as one of their favorites. Here are a few of this top member's most recent stock selections and how they were rated. Stock Call Price* Current Score Annaly Capital Management (NYSE: NLY) *** Outperform $17.43 2.96 Chimera Investment *** Outperform $3.92 1.33 Fifth Third Bancorp (Nasdaq: FITB) ** Underperform $11.24 (6.08) Hospitality Properties Trust *** Outperform $22.28 (1.34) New York Community Bancorp **** Outperform $14.55 6.10 Regions Financial (NYSE: RF) ** Underperform $6.33 (2.94) SCBT Financial ** Outperform $30.22 15.02 Synovus Financial (NYSE: SNV) ** Underperform $2.62 (3.59) Umpqua Holdings (Nasdaq: UMPQ) **** Outperform $12.85 (6.03) United Community Banks * Underperform $4.20 (1.08)
Source: Motley Fool CAPS.
Let's take a look at what other CAPS members are saying about a few of these stocks and whether they agree with this top player's assessment.
Degree of risk
With a portfolio highly concentrated in commercial real estate (CRE), Synovus Financialhas danced on the ledge as the industry trembled and analysts expected it to topple, dragging the broader economy down with it. So far that hasn't happened, and Synovus was able to narrow its losses as loan losses improved. Some, including Jamie Dimon at JPMorgan Chase (NYSE: JPM), have gone so far as to suggest the CRE train wreck is behind us. Wells Fargo (NYSE: WFC), which acquired its hefty exposure to the CRE market when it bought Wachovia, also experienced a decline in its provision for loan losses, but it experienced a jump in net charge-offs to $5.4 billion with almost all of the increase coming from its commercial real estate segment. And Wells was one of the profitable banks. I wouldn't discard just yet the nostrum that the worst of the commercial real estate market collapse is still to come. CAPS member WPThatcheradmits Synovus is troubled, but thinks it is on its way to recovery, while Teacherman1is hoping for a buyout: Not in this very heavy and may take my profit and wait for a better day. There are rumors of a possible buyout, and that could give them a good boost, but are still very speculative at this point. Although 82% of the CAPS members ranking Synovus believe it will beat the market, that hasn't translated into a robust CAPS rating, which dropped from a middling three stars down to just two. You can join the members on the Synovus CAPS pageto let us know if you think it's similarly situated for a rebound or will crumble with the rest of the CRE market.
A 1-in-100 opportunity
As hockey great Wayne Gretzky once noted, "You miss 100% of the shots you never take." At Motley Fool CAPSevery investor's opinion counts and since it's free to sign up, why not use this opportunity to take your best shot? This article was originally published as A 1-in-100 Investoron Fool.com Copyright © 2009 The Motley Fool, LLC. All rights reserved. Drop-Dead Gorgeous StocksBy Rich SmithFebruary 9, 2010 "The idea of buying a former superstar stock at a discount price certainly has its attractions, but you've got to make sure you catch the haft -- not the blade." So goes the thesis of my weekly Fool.com column "Get Ready for the Bounce." Therein, I run the 52-week-lows list compiled by Nasdaq.com through the "wisdom of crowds" meter that we call Motley Fool CAPS. And out the other end comes a list of stocks that have fallen so far, Foolish investors figure they're just bound to bounce back soon. But is there a way to cash in on fallen angels who've plummeted even further? Perhaps. If a stock that's fallen for one year straight has headroom, then maybe a stock that's fallen even further, and longer, has room to soar back even higher -- in which case, an apparently left-for-dead stock could offer us a drop-dead gorgeous entry price. We're going to test that thesis today, starting with five stocks that just hit their five-year lows: Companies Recent Price CAPS Rating (out of 5) Western Refining  (NYSE: WNR) $4.17 ***** American Vanguard (NYSE: AVD) $6.82 *** Bank Mutual Corp $6.09 * DemandTec (Nasdaq: DMAN) $5.93 ** Companies are selected from the "New 5-Year Lows" list published on MSN Money on Friday. CAPS ratings from Motley Fool CAPS.
Left for dead? Or drop-dead gorgeous?
If there's one stock here with the potential to bounce back with the broader economy, it's gotta be Western Refining -- or so Fools believe. Fact is, we've been waiting for thisparticular diamond to pull itself out of the rough for quite some time now, yet our patience has gone unrewarded. Sure, Western Refining's reappeared on our radar after a two-month hiatus, but why should we expect anything different this time around? Here's why:
The bull case for Western Refining
Moreover, as WiseChoice4u2reminds us: "These refineries are almost impossible to get approval for today with all the regulations. Someone will need them and upgrade them." Perhaps most telling of all, though, is the note that Maxenjust submitted: " CEOJeff A Stevens bought 80,000 shares end Nov. Price range 4.60-4.67 for a total of 370.2 K Today you could buy WNR for 4.31 a share."
Follow the leader?
But hold up a sec -- did you say "November?" That was more than two months ago, closer to last quarter's earnings than to this one's. Also, the insider trade in question was 50,000 shares -- not 80,000 -- and Stevens already owned more than 5.2 millionshares of Western. A 50,000 bump to that number works out to less than a 1% addition to his total stake. So on balance, I'm not sure this insider news is quite as bullish as Maxen may have interpreted it. Are there other reasons to be bullish about Western Refining's chances? Sure there are. For example, the stock currently sells for less than half its book value. And after a rough start-of-the-recession, Western has produced positive operating profits in five out of the last six quarters, so maybe things are looking up.
Once burned, twice shy
These Western rivals also all sport better-looking balance sheets than their rival, and pay dividends to their shareholders-- a practice which Western now eschews.
Time to chime in
But what about you? Do yousee a way for Western to escape its crushing debt loadand sidestep an ignominious bankruptcy? If you've got an opinion, we've got a place for you to state your case: Motley Fool CAPS. This article was originally published as Drop-Dead Gorgeous Stockson Fool.com Copyright © 2009 The Motley Fool, LLC. All rights reserved. The Best Undercover DividendsBy Matt KoppenhefferFebruary 9, 2010 Like the Incredible Hulk, dividends are a force to be reckoned with. If you ask me, there is no better way to quickly determine the overall attractiveness of a stock than by checking out its dividend. Dividends can give you a sense of whether a company is really making money, whether its stock is reasonably valued, and how management views shareholders. All in all, it's a pretty mighty number. And while most investors are very familiar with dividend royaltylike Altria (NYSE: MO) and Merck (NYSE: MRK), there are also plenty of good dividend-paying companies that are small enough to fly under Wall Street's radar. And many of these undercover dividend payers offer higher dividend payouts, better growth, or both. To uncover some of these small dividend dynamos, I turned to the Motley Fool CAPS community, looking specifically for companies with a market capbelow $5 billion and a dividend yieldabove 2.5%. Company Market Cap Dividend Yield
CAPS Rating
Williams-Sonoma $2.0 billion 2.5% * Overseas Shipholding Group $1.1 billion 4.3% *** Pengrowth Energy Trust (NYSE: PGH) $2.6 billion 7.7% ***** Innophos Holdings (Nasdaq: IPHS) $379 million 3.7% ***** American Eagle Outfitters (NYSE: AEO) $3.3 billion 2.5% **** Sources: CAPS and Yahoo! Finance. While the stocks above are all small and dividend-paying, it's apparent by their star ratings that the CAPS community doesn't think they're all worth your investment dollars. They could all be worth researching further, though, and to get you started, let's take a closer look at Pengrowth Energy Trust.
The business
Pengrowth is an oil and gas company that acquires and develops properties in the Western Canadian Sedimentary Basin. At the end of last year's third quarter, roughly 33% of the company's production was light oil, 29% was conventional gas, 20% was shallow and unconventional gas, and the remainder was a mix of heavy oil and offshore gas. The company has also been toying with developing oil sands. Simple enough?
The dividend
Meanwhile, the company has historically had a payout that's bounced around as energy prices waxed and waned and varying amounts were available to distribute. While I actually prefer when companies make payouts based on the year's results rather than a quasi-fixed dividend, once Pengrowth converts to a normal corporation, we could see its dividend put on a more conservative, dependable schedule. But while there may be significant uncertainty about exactly what will happen when Pengrowth makes its conversion, the company seems to have its focus in the right places. For one, it's making sure that the dividend stays sustainable by targeting capital expenditures and distributions that equal operating cash flow. In addition, Pengrowth is continuing to eye acquisitions that could help it fund continuing and growing dividends for years down the road.
CAPS members sound off
But why have members been so bullish? Here's what CAPS All-Star imajerbearhad to say in April of last year: Oil and gas may be deep in to it right now, but long term as the world economy pulls itself up by it's bootstraps, oil will make a comeback. Alt energy is wonderful, but it will take many years for it to make a significant dent in the use of oil. The days of easy extraction of oil are gone and some of the petroleum resources ie oil shale will require prices above $80 long term to exploit them economically. Oil fields around the world are showing decreases, some major, in their output. I am also convinced that OPEC is actually serious this time about toeing the line on production reductions to try to drive the price of oil to the $70 mark or better. long petroleum 10 to 20 years!! That call has already earned imajerbear 47 points, but if this member's bullishness on fossil fuels proves correct, there could be plenty more to come.
Your turn
Pengrowth may be a good investment opportunity, but my fellow Fool Tim Hanson believes he's found the biggest investment opportunity of the year. This article was originally published as The Best Undercover Dividendson Fool.com Copyright © 2009 The Motley Fool, LLC. All rights reserved. Do Patents Lead to Profits?By Selena MaranjianFebruary 9, 2010 Common sense suggests that compiling a powerful portfolio of potent patents should produce perpetual profits. But according to a recent study, that's not always the case. Last year, IBM (NYSE: IBM) extended its 17-year streak as the company with the most patents granted. But according to an Ocean Tomo study conducted for Bloomberg BusinessWeek, Microsoft 's (Nasdaq: MSFT) smaller patent portfolio is 3.3 times more valuable than IBM's. Apparently, sheer volume of patents isn't enough. According to the study, although IBM has been the patent king for many years, over the past five years, its collection's value is ranked only eighth in the world when it comes to "inventiveness." Microsoft ranks first. Interestingly, the companies you might think of first as great innovators were ranked lower still, with 3M (NYSE: MMM) in 13th place and Apple (Nasdaq: AAPL) in 21st. You might not think of Hewlett-Packard (NYSE: HPQ) as more inventive than General Electric (NYSE: GE), but HP is ranked fourth, compared to 23rd for General Electric.
Brother, can you spare a patent?
Innovation can be a powerful profit driver. Companies that break rules and devise new ways of doing things can create entire new industries. Apple has generated huge new business lines for itself (and other companies!) with its iPod, iPhone, and other products.
Quantity and quality
If you want to look for companies that can innovate and deliver big returns, keep an eye on their spending on research and development (R&D), along with your usual examined metrics. Just look for the R&D line item in the income statement, then divide it by total revenue, creating a ratio that you can compare against that of a company's rivals. Here's a quick look at several tech titans' recent research spending: Company R&D Spending Total Revenue R&D as a Percentage of Revenue IBM $5.8 billion $95.8 billion 6.1% Microsoft $8.6 billion $58.7 billion 14.7% Apple $1.4 billion $46.7 billion 3.0% Hewlett-Packard $2.8 billion $114.6 billion 2.4% Qualcomm $2.4 billion $10.6 billion 22.6% Source: Capital IQ, a division of Standard and Poor's. Figures are for trailing 12 months based on most recent financials.
Patents in perspective
As my colleague Anders Bylund found, "Companies with higher-than-average R&D spending also created above-average market returns for their investors." Perhaps that's why our team at the Motley Fool Rule Breakersnewsletter has been known to look at " R&D efficiency" when they scour the market for potential blockbuster stocks. If you want to examine a company's R&D spending more closely, look into how many new products or services it offers each year. A company may be spending generously on R&D, but if that's not translating into profitable results, it's a questionable expense. What patent-rich companies are your favorite investments? Which do you think should spend more on R&D? Share your ideas in the comments box below. This article was originally published as Do Patents Lead to Profits?on Fool.com Copyright © 2009 The Motley Fool, LLC. All rights reserved. 5 Cold Stocks Heating UpBy Rich DupreyFebruary 9, 2010 When a stock's share price is lower than a North Dakota thermometer in February, investors tend to give it the cold shoulder. But as the market warms to a stock's prospects, its price can heat up in a hurry. Alas, you can rarely tell that a stock is melting investors' hearts until afterit's made that upward leap.
Taking the market's temperature
Company
CAPS Rating
Recent Price
EPS Estimates
Advanced Battery Technologies (Nasdaq: ABAT) *** $3.46 $0.38-$0.43 Gafisa (NYSE: GFA) *** $25.63 $1.94-$3.02 Office Depot (NYSE: ODP) *** $5.38 ($0.41)-($0.22) Oncolytics Biotech (Nasdaq: ONCY) *** $2.62 ($0.27)-($0.28) STAAR Surgical (Nasdaq: STAA) **** $3.77 ($0.18)-$0.05 Source: Motley Fool CAPS. Obviously, this is not a list of stocks to buy -- just a starting point for further research. Yet if some of the best investing minds are taking notice of these stocks, maybe we should too.Â
Caution: Contents may be hot
Investors in Oncolytics Biotechhave similarly been waiting for a spate of good news to propel their company forward. It is developing treatments for head and neck cancers using its proprietary formulation of the human reovirus, Reolysin, for which it's preparing Phase 3 trials. STAAR Surgicalgot that kind of bounce when Japan approved its Visian Implantable Collamer Lens. Like LASIK surgery, STAAR's ICL treatment corrects myopia, but unlike the more well-known treatment, it is reversible. The stock soared 11% on the news and has more than doubled over the past year. If the global economy rebounds, we might see Brazilian homebuilder Gafisabounce higher too. That country's government is another one that has been pouring money into the economy in hopes of stimulating growth, and analysts have been impressed with the improvements seen there. Investors think Gafisa is geared for future growth.
Supplying the next wave
Speaking of staples, industry leader Staples (Nasdaq: SPLS) has used the Great Recession to increase its market share at the expense of Office Depotand OfficeMax . While Staples was expanding its retail presence by opening dozens of new stores, Depot and Max were reporting net closures of their bricks-and-mortar base. In calling out OfficeMaxto outperform the market, however, CAPS member Hsub3sides with analysts who see the entire sector getting a lift from the improving labor market numbers and a better business climate: As the economy comes back companies will begin to hire again and individuals as well as the employers will require more supplies and services. The fourth quarter indicated that while real expansion might not be under way, companies are no longer able to draw down on their inventories. The burst in growth we witnessed was more of a restocking phenomenon and should help office suppliers like Office Depot report better numbers.
Checking the mercury
This article was originally published as 5 Cold Stocks Heating Upon Fool.com Copyright © 2009 The Motley Fool, LLC. All rights reserved. Fearful Stocks for Greedy InvestorsBy Rich SmithFebruary 9, 2010 "We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful." -- Warren Buffett Of all the Oracle of Omaha's orations, this one holds a special place in Foolish investors' hearts. When looking to bag a bargain, a panicked sell-off by jittery investors offers you a great chance to snap up stocks on the cheap. In the short term, professional traders' pessimism can become a self-fulfilling prophecy. Desperate institutions lower their asking prices to get rid of a stock, prompting buyers' bid prices to fall in tandem, creating the very price decline that both sides feared in the first place -- until the selling stops. Until it does, savvy investorscan "get greedy," snapping up bargains from these fearful sellers. (Assuming they really arebargains.) In today's column, we'll see which stocks Wall Street's motivated sellers are most frantic to unload -- and whether youshould buy 'em: Companies Recent Price CAPS Rating (out of 5) W&T Offshore  (NYSE: WTI) $8.52 ***** Allied Irish Banks  (Nasdaq: AIB) $3.20 **** Bank of Ireland  (NYSE: IRE) $6.61 **** Hecla Mining  (NYSE: HL) $4.57 *** Century Aluminum $10.83 *** Companies are selected from the "Institutional Ownership Down Last Month" list published on MSN Money after close of trading on Friday. Recent prices and CAPS ratings from Motley Fool CAPS . Up on Wall Street, the pinstripe-and-wingtip crowd can't sell these stocks fast enough, but down here on Main Street, we're a more patient bunch. Judging from the star-ratings, CAPS members don't seem overly worried about anyof these companies' prospects -- and they're downright bullish on three of 'em. Right now, top marks go to independent oilman W&T Offshore. Let's find out why. Â
The bull case for W&T Offshore
Moving on to Part 2, CAPS All-Star Trimaleruspointed out back in March that: "Most of the land-based oil deposits are tapped out, all of the best new deposits are being found offshore." And last but not least, Bogey02sees W&T as offering a: " Low PE, earnings revising up, and I believe that oil prices will mount ahead of a global recovery." Bogey02 also sees W&T's book value as offering some downside protection for the stock. So let's look at that book value for a moment, and find out just how solid a foundation it lays -- more specifically, let's examine the value of W&T's key asset: Its proven reserves of oil and gas. At last report, W&T boasted proven reserves of 84.6 million barrels of oil equivalent, split almost evenly between petroleum and natural gas. Valued at the current NYMEX crude futures price of about $72 per barrel, that works out to roughly $6.1 billion in asset value for W&T -- more than five timesthe company's current enterprise value. (Or turned on its head, the valuation suggests that W&T is trading for an 81% discount to the value of its assets.) Of course, as the old saying goes, "a gallon of oil in the barrel is worth two in a bush." (Actually, it doesn't, but it could in Texas.) It costs moneyto bring those in-the-ground assets to market. This, along with W&T's debt load -- it's on the high end of debt-to-capital for its peers -- probably helps explain why W&T as a whole is "worth less" than the value of its assets. The question we as investors need to ask is whether W&T is being priced at a discount to other oil companies -- if it is, then thatis when we'll know we've found a bargain. So, for comparison, let's look at a few other big oil plays: Company Reserves Value Enterprise Value Size of Discount Exxon Mobil (NYSE: XOM) $1700 billion $304 billion 82% Chevron (NYSE: CVX) $825 billion $146 billion 82% ConocoPhillips (NYSE: COP) $684 billion $102 billion 85% So what does this table tell us? Firstly, that W&T's "discount" isn't really that much of a bargain, inasmuch as you can claim a similar discount by buying the shares of either Exxon Mobil or Chevron -- and get a larger, more stable company, with a lower debt-to-capital ratio and a larger dividend in the process. Secondly -- for those of you not as frightened by W&T's debt load (nearly $600 million compared to total capital of $930 million) -- you can get all the stability of a large cap oil major, triple W&T's puny 1.4% dividend, and claim a bigger discount to asset value simply by buying ConocoPhillips.
Foolish takeaway
And this means there's every reason to be fearful of W&T Offshore. Of course, that's just my opinion, and seeing as it's a Motley Fool Hidden Gems pick, clearly, Foolish minds can differ on this stock. If you disagree, and believe there's something I'm missing in the W&T Offshore story, here's your chance to tell me about it. Click over to Motley Fool CAPS now, and sound off.) Motley Fool CAPS : It's fun, it's free, and it just might make you famous. This article was originally published as Fearful Stocks for Greedy Investorson Fool.com Copyright © 2009 The Motley Fool, LLC. All rights reserved. Hey! Who's Flying This Thing?By Rich SmithFebruary 9, 2010
"There are those that see JSF as the last manned fighter.
I'm one that's inclined to believe that."
And it's time for investors to start believing that, too. When President Obama introduced his 2011 Defense Budgetto Congress ("Hi! Glad to meet you! Can I borrow some money?") last month, one number that jumped right out at me was the $2.2 billion in funding requested for unmanned Predator and Reaper drones. Another was the clear indication that the Navy will be pushing ahead with Northrop Grumman 's (NYSE: NOC) project to develop unmanned combat aircraft ( UCAS), putting additional billions of revenues in play. It seems everywhere you look these days, people are talking about unmanned aerial vehicles (UAVs).
Even in college
Our first major development in the UAV field this year comes straight from the University of North Dakota. (Motto: "Is it cold up here, or is it just me?") With an inaugural class of 12 students, the four-year degree in "Unmanned Air System Operations" aims to teach students to fly planes ... without ever taking a seat in 'em. Jeffrey Kappenman, who heads up the University's unmanned aircraft center, believes that civilian UAVswill become "a huge market in the future."
UAVs and ... Apple? And France?!
Much like the unarmed UAVs buzzing 'round the skies of Afghanistan and Iraq today, the AR.drone comes equipped with a video camera, which transmits footage direct to your iPhone as you "fly" the chopper. No word yet on whether it will become a required instructional tool at U-N.D., but I wouldn't be surprised.
You're ugly and your mama dresses you loud
And speaking of fun ...
Specifically, the venerable Black Hawk helicopter. On Monday last week, United Technologies (UTC) announced a $1 billion effort to transform the Black Hawk into a "computerized aircraft" capable of flying with only one pilot aboard -- or when necessary, entirely unmanned. "Um, nice idea. But we had it first," commented Boeing (NYSE: BA), and likewise Lockheed Martin (NYSE: LMT) also demonstrated an unmanned helicopter yesterday. It's beginning to look like unmanned helicopters are the next growth area in UAVs. Of course, UTC admits that "computerizing" the Blackhawk could add as much as $2 million to the chopper's base $15 million price tag, but just think of the benefits. In future conflicts, the phrase "Blackhawk Down!" will no longer send chills of terror down commanders' spines. The cascade of casualties that resulted from a pair of Black Hawk crashes in Somalia years ago, when successive groups of rescuers became rescuees in short order, need not happen if unmanned Black Hawks are available to conduct the rescue ops. "Blackhawk down?" No problem. Just boot up another robot Black Hawk.
Foolish takeaway
In fact, if I might be so bold as to paraphrase the Admiral: "Some investors see the Blackhawk as the first unmanned rescue airlift helicopter. I'm inclined to hope that's true." Take a trip down memory lane, and review the greatest UAV hits from 2009: "Hey! Who's Flying This Thing?" 2009 Edition "Hey! Who's Flying This Thing?" Part VIII Hey! Who's Flying This Thing? Revenge Of The Robots Hey! Who's Flying this Thing? Special Report Hey! Who's Flying This Thing?Then step into our wayback machine, and relive the highlights of 2008: Hey! Who's Flying This Thing? Hey! Who's Flying This Thing? Part 2 Hey! Who's Flying This Thing? Part 3Â Hey! Who's Flying This Thing? Part 4Â Hey! Who's Flying This Thing? Part FinLooking for other high-tech defense prospects for your portfolio? Check out Motley Fool Rule Breakers , where we're looking into options in everything from UAVs to missile defense, from bombproof trucks to bulletproof soldiers. 30-day free trials are available on-demand. This article was originally published as Hey! Who's Flying This Thing?on Fool.com Copyright © 2009 The Motley Fool, LLC. All rights reserved. 5 Stocks That Just Won't QuitBy Rich Smith (TMF Ditty)February 9, 2010 In my weekly Fool column " Get Ready for the Fall," I run Nasdaq.com's 52-week highs list through the "wisdom of crowds" meter we call Motley Fool CAPS. The result: a list of stocks that have flown sohigh, investors are starting to get nervous about that whole "gravity" thing. But while many stocks will indeed plunge back to Earth, some seem immune to gravity, steadily riding a rising megatrendto ever-greater heights. Today, we'll move beyond stocks that have hit 52-week highs, and identify companies now surpassing five solid years of outperformance. Which of these will thrash the market averages for another half-decade? Here are this week's leading contenders: Companies Recent Price
CAPS Rating
Bull Factor Bridgford Foods (Nasdaq: BRID) $12.26 Unrated (for now) 100% Maximus (NYSE: MMS) $53.99 ***** 93% Chattem $93.32 *** 90% Open Text $46.51 ** 88% American Italian Pasta $38.34 ** 76% Companies are selected from the "New 5-Year Highs" list published on MSN Money on Friday. CAPS ratings from Motley Fool CAPS.
Hot stocks leave investors cold
CAPS members clearly prefer Reston, Va.-based consulting firm Maximus. (And if you've seen their earnings report, you know why.) Still, I'm going to let curiosity get the better of me this week. You see, as CAPS heads into its fourth year as a community, there just aren't all that many stocks we cover that lack sufficient investor interest to merit at least somekind of star rating ... In this, Bridgford Foods is something of an exception. According to CAPS: "There are no Wall Street tracker picks for BRID." No analysts. No long-term earnings estimates. Nuthin'. Indeed, only five individualinvestors follow the stock on CAPS, and not a one of 'em has said a word as to why they like it. The company's an unknown quantity. A blank slate. But not for long.
One day changes everything
But I'll bet you heard a whole lot about it when Hewlett-Packard (NYSE: HPQ) picked Stratasys out of the air, anointed it HP's preferred providerof 3-D printing systems, promised to help the company grow its sales 500% in five years, and sent the stock soaring 40% in a day. That's the kind of pleasant surprise that can come upon you out of the blue when you buy an unknown, unwatched company like Bridgford. Like Stratasys, the company already has credibility in business circles -- a credible partner in the form of retail powerhouse Wal-Mart Stores (NYSE: WMT). And also like Stratasys, Bridgford is small enough a shop that the signing of even one or two morecontracts could change the company's fortunes entirely ( and for the better). Ink a distribution deal with Costco (Nasdaq: COST) and -- kaboom! -- the stock could skyrocket. Sell yourself to Kraft (NYSE: KFT) or ConAgra (NYSE: CAG) and -- kapowie! -- the buyout premium alone could make investors rich. There's just no telling what could catalyze this stock to breakout growth.
The more things stay the same ... the more that's
fine with me
Foolish takeaway
Long story short -- even though this stock has tripled in value over the last 52 weeks, I see no reason to doubt that its best days still lie ahead of it. That said, youare free to disagree. Love Bridgford or hate it, I'd just like to see anyonesay anythingabout the stocks on CAPS. If ever a company deserved to have a star rating of some sort, this is that company -- take a look, and tell us what you think about it. Motley Fool CAPS: It's fun, it's free, and it just might make you famous. This article was originally published as 5 Stocks That Just Won't Quiton Fool.com Copyright © 2009 The Motley Fool, LLC. All rights reserved. Would a GPad Be Any Better?By Tim BeyersFebruary 9, 2010 Shortly after Apple (Nasdaq: AAPL) unveiled its interesting-but-not-terribly-groundbreaking iPadtablet, a videodepicting a similarly styled GPad began to make the rounds on the Web. Would Google (Nasdaq: GOOG) go after Apple in this way? And if so, would a GPad be any better than what we've seen so far?
Yes and no
Google, by contrast, specializes in open, iterative design. Openness is the better approach for the tablet market, because there's so much uncertainty about what tablets should and shouldn't do. Witness Amazon.com (Nasdaq: AMZN). The e-tailer claims ownership of the most successful tablet to date -- the Kindle e-reader -- yet continues to wrestle with publishers over pricing, as seen in its brief spat with Macmillan. Google, a born disruptor, does its best work when uncertainty reigns. Apple does its best work reimagining entire industries, and then building technology to fit its vision.
Manhattan vs. Hollywood
Apple is likely to find allies in newspaper companies, such as New York Times (NYSE: NYT) and Gannett (NYSE: GCI), while Google, were it to move forward with a GPad, could strike deals with Sony 's (NYSE: SNE) Columbia Pictures, Time Warner 's (NYSE: TWX) Warner Bros., and other studios unhappy with the iPad's limited video-playback capabilities. Any move by Google to enter the tablet business will likely be preceded by a store that mirrors what it has planned with Google Apps, and what Apple already has with iTunes. Think of it as Android Market for the GPad. Tie-ups with other stores, such as Amazon's e-malls for books and videos, would also make sense. Either way, this would be a battle worth watching. Now it's your turn to weigh in. Are you an unabashed iPad fan, or would you consider a GPad? How about Hewlett-Packard 's Windows-based alternative? Make your voice heard using the comments box below. This article was originally published as Would a GPad Be Any Better?on Fool.com Copyright © 2009 The Motley Fool, LLC. All rights reserved. Sick of the Budget Deficit? Read ThisBy Morgan HouselFebruary 9, 2010 If you'd like to enjoy the rest of your day, keep your distance from the Congressional Budget Office's (CBO) website. There, you'll find a small mountain of nonpartisan information on our nation's finances, including 2010's now-infamous $1.3 trillion budget deficit. (If you listen to the Office of Management and Budget, it's an even higher $1.6 trillion.) Depending on your sense of humor, these deficits are either hilarious or tear-jerking. If you can grasp the absurdity of the numbers (tens of trillions in red ink over decades), it's hard to not laugh. At the same time, it's horrifying: We know what happened to Citigroup (NYSE: C) and AIG (NYSE: AIG) when their liabilities got out of control. More comparatively, no one takes Dubai or Greece seriously anymore, after their recent sovereign debt woes. This is scary stuff. How will we ever pull ourselves out? That's a question economists, politicians, and average Joes desperately want to know. But here's a more important question: How did we get here? What exactly happened that pushed us from record surpluses in 2000, to moderately scary deficits in the mid-2000s, to horrific, mind-blowing deficits today? To answer that, I pulled up three long-term CBO budget forecasts: one from 2000, one from 2006, and the most recent for 2010. By comparing the same-year differences of each report, we can see exactly where and why the budget fell off track. This first table compares 2005 budget estimates made in the year 2000 with what actually happened: Segment 2005: Actual vs. 2000 Estimate Revenue ($142 billion) Discretionary Spending $266 billion Mandatory Spending ($9 billion) Source: Congressional Budget Office, author's calculations. In English: The government collected $142 billion less revenue in 2005 than was projected in 2000. It also spent about $250 billion more than planned. What happened? For one, there was a good round of tax cuts enacted under President Bush. And two wars. You know the story. Moreover, the economy didn't grow as fast as expected. Remember, 2000 was the peak of the dot-com boom. Companies like Microsoft (Nasdaq: MSFT), Cisco (NYSE: CSCO), and a then-infant Google (Nasdaq: GOOG) were fueling growth that made forecasters college-freshmen-drunk with optimism. Once the bubble burst and the post-9/11 recession hit, growth waned. This second table is even more important. It shows the difference between the 2006 and 2010 CBO budget forecasts for the 2010-2013 period. These are the changes that pushed the current budget deficit off a cliff: Â Changes between 2006 and 2010 forecast (in billions) Segment 2010 2011 2012 2013 Revenue ($708) ($468) ($414) ($328) Social Security $27 $17 $7 ($2) Medicare ($15) ($13) ($35) ($39) Medicaid $23 ($10) ($31) ($42) Other Mandatory* $155 $191 $113 $82 Defense $159 $153 $144 $135 Nondefense Discretionary $153 $131 $99 $79 Total Deficit (includes changes in interest paid) ($1,127) ($866) ($687) ($578)
Source: Congressional Budget
Office, author's calculations.
This table is admittedly hard to interpret, but here are the major points: drops in revenue, not increases in discretionary spending. Of the $1.1 trillion increase in 2010's deficit over 2006's projections, $708 billion (63%) came from lost tax revenue. Revenue fell because of unemployment, decreased corporate profitability, and tax cuts enabled by the $787 billion stimulus package. Increases in nondefense discretionary spending (fodder for most shouting on cable news networks) is small potatoes compared with the plunge in revenue.ÂKeep these facts in mind, because they're important when digesting today's acidic rhetoric. Current deficit explosions aren't due to earmarks, death panels, or bailouts. Overwhelmingly, they're due to cliff-diving drops in tax receipts, which came from a combination of tax cuts and (more importantly) income stolen by the Great Recession. But that's just short-term. As I showed in a previous article, the long-term battle almost entirely surrounds entitlements -- Social Security, Medicaid, and Medicare. Medicare is the real biggie (a $37 trillion shortfall over 75 years). And since health-care reform now looks likeit'll be symbolic at best, this problem isn't going away -- great news for UnitedHealth (NYSE: UNH) and WellPoint (NYSE: WLP), but potential suicide for long-term budget deficits. As economist James Kwak from Baseline Scenario put it, "If politicians were actually serious about deficits, they would vote for health care reform 100-0 in the Senate." That's far more factual than it is opinionated. So if you're sincerely sick of budget deficits, you should have just two concerns: How to get government revenue back up, and how to keep entitlement spending down. Those two factors alone overwhelmingly explain why we're in a budgetary cesspool compared with 10 years ago. Before they're tackled, everything else is just noise. This article was originally published as Sick of the Budget Deficit? Read Thison Fool.com Copyright © 2009 The Motley Fool, LLC. All rights reserved. 5 Stocks That Laugh at Wall StreetBy Rich DupreyFebruary 9, 2010 In these heady economic times, Mr. Market seems to enjoy dogpiling on any company that dares to fall short of analysts' estimates. To defy that trend, we're here to celebrate companies that didn't merely meet Wall Street's predictions, but laughed in analysts' facesby leaving their forecasts in the dust. The companies below soundly trounced earnings estimates by 20% or more for the third quarter: Company EPS Surprise Estimated EPS Growth Current Quarter Estimated 5-Year Growth American International Group (NYSE: AIG) **** 44% 99% 12% Cabela's (NYSE: CAB) *** 56% 3% 11% Dynamic Materials (Nasdaq: BOOM) ***** 60% (70%) 13% Goldman Sachs (NYSE: GS) *** 58% 28% 17% NCI Building Systems (NYSE: NCS) *** 127% N/A 15% Source: Yahoo.com. Nonetheless, beating estimates isn't enough to make a stock a winner. Analysts are notoriously lousy at forecastingresults, and one-time items can sometimes push earnings over the top. Wall Street professionals typically don't include such extraordinary events in their forecasts. Rather than focusing only on the past, we'll check whether analysts have a bead on future performance. With help from Motley Fool CAPS, we'll see which of the top companies listed above will have the last laugh.
The joke's on us
Admittedly, a lot of this "winning" is going on with the taxpayers' dime, but that isn't necessarily Goldman's fault. It was "too big to fail"that allowed the investment banking giant to exploit the system. At least some of our ire should go to the regulators who conceived the policy and the politicians who signed off on it. Goldman, JPMorgan Chase (NYSE: JPM), and Bank of America (NYSE: BAC) simply displayed masterful gamesmanship. With more than 5,600 CAPS members weighing in on Goldman, investors have a lotto say about its skills. Mostly that it will continue to dominate, as suggested by more than 88% of them believing it will continue to outperform the market. CAPS member MoneyWorksforMe simply says about Goldman: The best in the business. These guys bet against subprime while most were still drinking koolaid. Will continue to benefit immensely along with Morgan Stanley from increased M&A and less competition. Investors are still underestimating the earnings power of these two firms.
Reel to reel
The announcement for the next quarter could do the same thing again. Although some of Dynamic Materials' main customers -- those in oil and gas, power generation, petrochemicals, and shipbuilding -- have been weakened by the recession, analysts are predicting that profits will be off 70% from the year-ago quarter. It looks like they're underestimating Dynamic Materials' cash-generating capabilities. Not so, says CAPS member mmwmmr, who likes the company's ability to husband its resources and expects it to ride out the downturn. Despite the lack of sales due to drop in demand, the
company has managed its cash well, sustaining operating
cash flows of $23,414 [million] for the nine months ending
9/30/09, versus $24,805 [million] for the nine months
ending 9/30/2008, despite a net income of only $7,527
[million], versus $18,683, respectively. The company
accomplished this mainly through a large reduction in
accounts receivable, which is an indication of improved
efficiency in cash collections.
Yukking it up
This article was originally published as 5 Stocks That Laugh at Wall Streeton Fool.com Copyright © 2009 The Motley Fool, LLC. All rights reserved. Today's 5-Star MoversBy Motley Fool StaffFebruary 9, 2010 As fundamentals-focused long-term investors, Fools never base an investment decision on the daily gyrations of the market. But the market's daily price movements can be useful when looking for new stock ideas for further research, or to keep tabs on watch-list stocks. Below you'll find today's biggest movers among our five-star stocks -- the highest rating awarded by our CAPS community of more than 150,000 investors. Have a look, and then visit us on CAPSto dig in further on each of them. Up Today Sector Sector Past 30 Days Fools Saying Outperform Research
ADC Telecommunications
13.01% Communications Equipment 0.71% 315 of 345
Ikanos Communications, Inc.
9.48% Semiconductors and Semiconductor Equipment (8.43%) 307 of 319
Vestas Wind Systems
8.55% Electrical Equipment (14.06%) 305 of 307 Other Five-Star Communications Equipment ShoreTel, Inc. (Nasdaq: SHOR) up 2.75% NetGear, Inc. (Nasdaq: NTGR) up 2.74% Other Five-Star Semiconductors and Semiconductor Equipment Pericom Semiconductor (Nasdaq: PSEM) up 3.85% Integrated Device Technology, Inc. (Nasdaq: IDTI) up 1.68% Other Five-Star Electrical Equipment Gamesa Tecnologica (OTC: GCTAF) up 5.93% Jinpan International Limited (Nasdaq: JST) up 3.71%Come join us on CAPS to learn more about these and countless other interesting stock ideas. Click herefor a free sign-up. This article was originally published as Today's 5-Star Moverson Fool.com Copyright © 2009 The Motley Fool, LLC. All rights reserved. Bone Up On This Potential BlockbusterBy Brian Orelli, Ph.D.February 9, 2010 Investors patiently waitingfor the Food and Drug Administration to approve Amgen 's (Nasdaq: AMGN) bone drug denosumab may finally be seeing the light at the end of the tunnel. Yesterday Amgen released positive results from its third phase 3 trial pitting denosumab against Novartis ' (NYSE: NVS) Zometa in prostate cancer patients whose tumors had spread to the bone. Compared to Zometa, denosumab was able to extend the time to the first skeletal related event (SRE). That term sounds formidable, but it just means a fracture or requirement to treat the tumor on the bone, for instance; denosumab also had a lower rate of multiple SREs compared to Zometa. You can add that data on top of the growing mountain of data for denosumab in treating cancer patients. Denosumab previously beat Zometa in a head-to-head trial in breast cancer patients where the cancer had spread to the bone and a second trial in advanced cancer patients showed that the two drugs performed similarly. Patients taking denosumab saw deterioration of the jaw bone at a higher frequency than those taking Zometa, but the numbers were so small that the difference wasn't statistically significant. When the full data is released, I think we'll see that the benefit from denosumab outweighs any minor increase in side effects, even if it's real. Amgen is awaiting a Food and Drug Administration approval of denosumab to treat osteoporosis, which will be marketed under the trade name Prolia. While an approval seems highly likely, Prolia will probably have a slow start due to the substantial competition in the osteoporosis market. Drugs already there include GlaxoSmithKline 's (NYSE: GSK) and Roche's Boniva, Merck 's (NYSE: MRK) Fosamax, Actonel from Procter & Gamble (NYSE: PG) and sanofi-aventis (NYSE: SNY), along with Evista from Eli Lilly (NYSE: LLY), just to name a few. A cancer indication, which could come by the end of the year if Amgen can get the data together quickly and the FDA gives denosumab a priority six-month review, would help sales substantially. The wait may be easier, but denosumab's biggest data set is still unknown. Amgen is also testing denosumab as a preventative treatment to keep prostate cancer from spreading to the bone in the first place. That data, which should be available in the second half of the year, would be a boon for Amgen because it would support denosumab being used in all prostate cancer patients, not just ones who have already seen their cancer spread to the bone. Amgen is certainly for the patient investor. Fortunately the wait has been a productive one. Editor's note: A previous version of this article identified denosumab as "Prolia" which, according to Amgen, is the trade name for the drug as a treatment for osteoporosis. This article was originally published as Bone Up On This Potential Blockbusteron Fool.com Copyright © 2009 The Motley Fool, LLC. All rights reserved. Pfizer's Slippery SlopeBy Brian OrelliFebruary 9, 2010 Pfizer (NYSE: PFE) is following in the footsteps of supermarkets like Kroger (NYSE: KR) and Safeway (NYSE: SWY). The Financial Timesreports that the drugmaker is expanding its offering of discount cards as a way to track whether patients with chronic diseases are refilling their medications. What's next? Maybe Lowe's (NYSE: LOW) and Home Depot (NYSE: HD) should set up discount cards to remind customers to track how often they change the filter in their furnace. Or maybe dry cleaners will start calling you to remind you to bring in your clothes. Don't get me wrong: Filling prescriptions regularly will make most patients healthier, but this is a slippery slope for drugmakers. They have generally taken a hands-off approach to dealing with patients. Even direct-to-consumer advertisements require a doctor to get involved. While insurance companies like Cigna (NYSE: CI) or pharmacies like CVS Caremark (NYSE: CVS) may call to remind patients to refill their prescriptions -- both have my household on speed dial -- there's a perceived difference when the one pushing the pills is the "big bad drugmaker." We're talking about health data, after all, not how often you buy milk. That may be why Pfizer is expanding the use of discount cards into countrieslike Russia, Mexico, Brazil, and Venezuela. Without insurance for prescription medications, many patients pay out of pocket, so a substantial discount may be worth giving up some privacy. Pfizer and other drug companies like GlaxoSmithKline that have moved heavily into markets like these need high volumes to make up for the lower prices that patients in these countries are able to pay. The discount cards should help keep the volume high, and if Pfizer has taken a cue from supermarkets, the discount is off an already inflated price. But Pfizer should be careful with expanding the practice further, especially into the U.S. I'm not sure Americans will be as willing to have their drug refills tracked by those making a buck off them. This article was originally published as Pfizer's Slippery Slopeon Fool.com Copyright © 2009 The Motley Fool, LLC. All rights reserved. EA Hits the Reset ButtonBy Anders BylundFebruary 9, 2010 Running a video game company isn't all fun and games. Electronic Arts (Nasdaq: ERTS) just reported sordid third-quarter results and a bleak outlook on the future, sending the stock down by 8% overnight. A year ago, EA issued guidance for fiscal 2010 well below Wall Street estimates and then revised downward twice, and last night's report pointed even further south. Revenue fell 23% year-over-year to $1.35 billion, while non-GAAP earnings came in at $0.33 per share -- 41% below the year-ago period. CEO John Riccitiello noted that EA "missed on the top line, not as much as the sector missed, but we missed." EA's sales mix is sliding away from highly profitable packaged titles of the kind you'll find on store shelves at Wal-Mart (NYSE: WMT) or Target (NYSE: TGT) as cheaper downloads and online games become the format du jour. That's not all bad, though. Digital downloads now represent about 10% of EA's sales. This includes titles for handheld gaming systems like the Sony (NYSE: SNE) PSP, but also Facebook games and titles written for smartphone-style devices like the Apple (Nasdaq: AAPL) iPhone or iPod Touch. EA claims to be a leader in the portable market, so I guess the iPad launchcan't come fast enough for these guys. A bigger gaming screen could make EA titles like Dragon's Lairor Madden NFLlook much better than they already do. Reshuffling the deckmight be exactly what Electronic Arts needs today. It's hard to find a sector rival that hasn't beaten EA as an investment over the past year, and chief rival Activision Blizzard (Nasdaq: ATVI) has stomped EA's stock chart to bits over one-year and five-year investing horizons. But like I said, EA is reinventing itselfas a mobile gaming specialist. That could be what the company needs to ignite a turnaround; the stock is still too expensive based on EA's current earnings power (which is nearly nonexistent), but relatively cheap on a price-to-sales basis. If you believe in a mostly download business model, then buying EA today could be rewarding in two or three years. Do you have that kind of faith and patience, though? Discuss in the comment box below. This article was originally published as EA Hits the Reset Buttonon Fool.com Copyright © 2009 The Motley Fool, LLC. All rights reserved. Wall Street's Buy ListBy Rich Smith (TMF Ditty)February 9, 2010 Actions speak louder than words, as the old saying goes. So why does the media focus so much attention on what Wall Street says about companies, instead of what it doeswith them? Luckily for Wall Street watchers, the Internet brings us MSN Money's list of which companies the institutions are buying. True, we should be as skeptical of Wall Street's actions as we are of its words. But when the 150,000-plus lay and professional investors on Motley Fool CAPSagree with Wall Street's opinions, it just might be time for some buying. Here's the latest edition of Wall Street's Buy List, alongside our investors' opinions of the companies involved: Companies Recent Price (out of 5) VASCO Data Security  (Nasdaq: VDSI) $8.31 ***** Tuesday Morning  (Nasdaq: TUES) $5.01 ** Pharmacyclics $5.02 * Eastman Kodak (NYSE: EK) $5.84 * MBIA (NYSE: MBI) $4.91 * Companies are selected from the "Institutional Ownership Up Last Month" list published on MSN Money on the Saturday following close of trading last week. Recent price provided by Yahoo! Finance. CAPS ratings from Motley Fool CAPS.
Profit goeth before the fall
As January wound down, stock markets took a tumble, and as you can see up above, investor confidence is starting to go down with 'em. Hardly any of the companies on Wall Street's shopping list today receive bullish marks from Main Street investors. The exception being …
VASCO Data Security Â
burnssageagrees, arguing that: "Cybersecurity is still a growing market with plenty of room for growth. Although VASCO is down now, as the economy recovers they are postured for a comeback." And in fact, they may already be well on their way. As hateninjarecently related: "Never heard of Vasco until my sister came back from Europe years ago where this security was standard fare for banks. Soon, it will be in the US as well." (Actually, in addition to having a large European client base including the likes of HSBC (NYSE: HBC) and ING (NYSE: ING), VASCO already counts Wells Fargo (NYSE: WFC) among its customers here in the States.)
Promise and peril
Personally, when I look at the stock, it's not so much the price that worries me as the growth prospects. Analysts are still projecting only 10% annualized five-year growth for VASCO, which to my mind is a bit too slow to justify the multiples we're seeing on this stock. That said, when you recall that Wall Street's investment bankers arebanks ... I mean, if Wall Streeters are the ones buying this stock, well, who knows the health of the banking sector, and trends in bank spending, better than them?
Foolish takeaway
On the other hand, "these guys have the best vantage for viewing banking industry trends" ... and they're telling us VASCO is only going to grow 10% per year from here on out. This, to me, looks just as extremely bearish. Personally, the mixed signals Wall Street's sending are enough to keep me out of the stock till the growth picture firms up a bit. But that doesn't mean youshould avoid it. If you believe Wall Street's overly conservative on the growth prospects, here's your chance to tell us why. This article was originally published as Wall Street's Buy Liston Fool.com Copyright © 2009 The Motley Fool, LLC. All rights reserved. China Scoops Up More African AssetsBy David Lee SmithFebruary 9, 2010 After more than a little hullabaloo, on Friday it was announced that China's CNOOC (NYSE: CEO) had advanced to first in line in the contest among oil companies to acquire a stake in Ugandan assets owned by Tullow Oil. It appears that China's largest offshore operator will fork over $2.5 billion for the position. That announcement follows a contest among CNOOC, France's Total (NYSE: TOT), and Italy's Eni (NYSE: E). The competition involved assets owned by Heritage Oil, which had decided to sell its properties in the Lake Albert area near the country's western border. Initially it appeared that Eni was likely to take the spoil. Indeed, in November, the Italian company announced that it had reached an agreement to pay $1.5 billion for the Heritage stake. Tullow, as Heritage's partner, was quick to exercise its right of first refusal, blocking the sale and then declaring that it would buy the properties for itself at the identical price. Of the three blocks in the field, Tullow and Heritage shared two, and Tullow owned the third outright. But the action continued when the Ugandan government objected to Tullow's purchase in order to prevent one company from owning the entire field. Capitulating to the government's wishes, Tullow agreed to bring in another partner on the project that likely will also include a refinery and a pipeline to transport the oil to the Indian Ocean. Although not finalized, it appears CNOOC has won the contest and positioned itself to assist with the steady increase in Chinese interestsin East Africa's fertile energy arena. Uganda expects to produce about 150,000 barrels a day of crude within the next six years. It therefore doesn't have the energy clout of some other countries, including Nigeria and Angola. Those countries have become the provinceof super-majors, such as Chevron (NYSE: CVX), BP (NYSE: BP), and ExxonMobil (NYSE: XOM). Nevertheless, Ugandan oil is less expensive to produce than that emanating from more challenging structures, such as the Santos Basinand the deepwater Gulf of Mexico. As such, given CNOOC's new position in the area and its access to the world's deepest pockets, among other things, I'm inclined to double down on my attention to the company. CNOOC has been rated a four-star company by Motley Fool CAPSplayers. Why not head for the company's individual CAPS pageand register your opinion on CNOOC? This article was originally published as China Scoops Up More African Assetson Fool.com Copyright © 2009 The Motley Fool, LLC. All rights reserved. The Buying Opportunity You Won't Want to MissBy Tim HansonFebruary 9, 2010 It didn't happen exactly as I had predicted, but it has finally happened. And it means that the world's fastest-growing stocksare cheaper now than before. Before I get to the whos, whys, and wheres, though, let me tell you whom we have to thank.
Here comes the cabal
By making the case for stocks to fall, short-sellers make the market more efficient. Shorts temper excessive optimism and help us all avoid the protracted painful corrections that are its consequence.
Where shorts didn't tread
Of course, there was nothing to stop them. See, you couldn't short stocks in China. Without investors scouring the market for weaknesses, those same housewives, cabdrivers, and fishmongers had been treated to nothing but good news. That made them overconfident, overzealous, and then overexposed to an unquestionably richly valued basket of stocks.
It won't be that way for long ...
But after a 60% market plunge in 2008 the CSRC finally approved shorting at the end of September. To me, this indicates that the CSRC believed all optimism had been purged from the marketplace. When that happens, we've reached the point of maximum pessimism -- the precise time that master international investor Sir John Templeton would have told you to invest. And you should consider that. Because despite this market
recovery, names such as
Fushi Copperweld (Nasdaq: FSIN) and
RINO International (Nasdaq: RINO) still trade
for less than 15 times earnings.
China's rapid economic growth will be theglobal economic story of the next 10 to 20 years. The opportunities are huge, and the country is growing richer by the day. In fact, our Motley Fool Global Gains international investing team recently returned from a research trip to China, where we met with executives at various companies and were generally impressed with how these folks ran their companies. That does not mean, however, that we'd be willing to pay any price to own them. Today, however, we're looking hard at the Chinese stocks that are still cheap. To see what we're picking, click hereto try Global Gainsfree for 30 days. There is no obligation to subscribe. Already a member ofGlobal Gains ? Log in at the top of this page . This article was first published Aug. 20, 2007. It has been updated. Tim Hanson is the co-advisor ofGlobal Gains . He does not own any stocks mentioned. The Fool's disclosure policy enjoys Mongolian throat singing. This article was originally published as The Buying Opportunity You Won't Want to Misson Fool.com Copyright © 2009 The Motley Fool, LLC. All rights reserved. One Bet You're Sure to LoseBy Austin EdwardsFebruary 9, 2010 Four minutes from now, you and I are going to make a bet -- and I can virtually guarantee you will lose. But first I'm going to tell you something that may shock you, explain how it can lead you to the top 10 stocks of the next 365 days, and give you the names of two stocks our analysts are convinced will trounce the market over the coming year and beyond.
Up to the challenge?
Lately, folks have been listing big financial firms like Bank of America (NYSE: BAC) and Goldman Sachs (NYSE: GS). To be fair, they're on the right track; there are some notable financial firms – including Bank of America -- among the 30 top-performing large caps ...  Large-Cap Stock (>$5B) Market Cap 52-Week Gain Rank Among Large Caps Fifth Third Bancorp (Nasdaq: FITB) $9 billion 587% No. 2 Genworth Financial $6.8 billion 492% No. 3 Seagate Technologies (NYSE: STX) $9.3 billion 310% No. 8 Royal Caribbean Cruises (NYSE: RCL) $5.4 billion 283% No. 9 Textron (NYSE: TXT) $5.2 billion 211% No. 18 Bank of America $127.6 billion 210% No. 19 Barclays PLC (ADR) (NYSE: BCS) $48.2 billion 180% No. 26 Source: Google Finance, as of Feb. 8. But don't forget, those are only the top-performing large caps.So, what made the top 10 overall? Let's have a look ... Stock Market Cap 52-Week Gain Diedrich Coffee $198 million 9,785% Orient Paper $152 million 2,540% Select Comfort $336 million 2,198% Dollar Thrifty Automotive Group $542 million 1,904% ValueVision Media $131 million 1,771% Valassis Communications $1.2 billion 1,566% Pier 1 Imports $583 million 1,388% Avis Budget Group $1.1 billion 1,367% Vanda Pharmaceuticals $285 million 1,335% Cell Therapeutics $451 million 1,266% Source: Google Finance, as of Feb. 8.
Shocked?
Now, you might think this is some sort of anomaly caused by last year's financial near-collapse, but it actually holds true yearafter yearafter yearafter year. That's because, as Motley Fool co-founder Tom Gardner points out, the next home run stockwill almost always be: In fact, Tom launched our Motley Fool Hidden Gems small-cap stock service with one goal in mind: to uncover well-managed, fast-growing, cash-generating businesses that are simply too small or too obscure for Wall Street analysts to cover.
Two
Hidden Gems
we're betting on now
Of the stocks Seth Jayson and Andy Cross have purchased so far, two that have particularly caught my eye are Dynamic Materials and Innophos. Dynamic Materials is a dominant player in the highly specialized explosive metal-working industry. In fact, it's the biggest company of its kind in both North America and Europe -- and because this is a very hard industry to break into, it is highly unlikely that major competitors will spring up anytime soon. Meanwhile, Innophos makes specialty phosphates that are found in everything from sports drinks to toothpaste to asphalt. Like Dynamic Materials, it has relatively little competition. In fact, it controls as much as 40% of the $1.4 billion North American market. Both companies have seen sales slow recently because of the economy, but are well-positioned to rocket upward once the recovery kicks into full gear.
The big payoff for you
And whereas it would take another $149 billion for AT&T shares to double, were either of these small companies to gain even one one-hundredthof that amount, their shares should soar as much as 645% and 385%, respectively. Granted, I can't guarantee that either of these companies will be among the 10 top stocks of the next 365 days, but I willbet you that not a single large-cap stock (more than $5 billion) will make the list.
Want a piece of that action?
I'll run the numbers 365 days from now, and if your large-cap makes the list, I'll write another article telling everyone that youwon the bet. In the meantime, I urge you to spend some time searching for well-run, cash-generating businesses that are too small to show up on Wall Street's radar. If you'd like a little help, you can get full access to all of our Hidden Gems small-cap research and stock picks -- including our real-money small-cap portfolio -- by taking a free 30-day trial. There is no cost, nor any obligation to subscribe. Stick with us if you like it; pay nothing if you don't. To learn more, simply click here. Austin Edwards owns shares of AT&T. Dynamic Materials and Innophos areMotley Fool Hidden Gems recommendations. The Motley Fool owns shares of Dynamic Materials and Innophos. The Motley Fool is investors writing for investors and has a disclosure policy . This article was originally published as One Bet You're Sure to Loseon Fool.com Copyright © 2009 The Motley Fool, LLC. All rights reserved. Don't Invest Another PennyBy Paul ElliottFebruary 9, 2010 Listen, mutual funds may be right for you. But for most of us, they're an expensive way to invest. If you're looking for an alternative that can help you make some money and keep more of it -- take a few seconds to read on.
IÂ want what's coming to me!
Think about it. Uncle Sam wants a piece of everything we earn, and that's trifling. But your typical mutual fund manager is worse. These guys aren't happy with a cut of what we earneach year. (We'll assume for now that they make us money -- unlike in 2008.) No, our fund managers want more -- muchmore. When I tell you how much more, you may not believe it. So I'll warm you up with a quick hypothetical.
Wahoo! My manager's a genius!
Don't worry, your fund manager doesn't buy the gloom and doom, and he doesn't buy diversification, either. He buys technology. To prove it, he rolls the dice on just four tech stocks. You hit paydirt! Flash forward to New Year's Day 2000, and just look at what's become of your $10,000 stake in this guy's superfund ... Cisco Systems (Nasdaq: CSCO): $1,673,750 Applied Materials (Nasdaq: AMAT): $178,239 Sun Microsystems (Nasdaq: JAVA): $158,689 Qualcomm (Nasdaq: QCOM): $298,021Add it up, and you're sitting on $2.3 million, right? Not so fast. Mutual funds have a price, and it may be a lot higher than you think.
Your $10,000 isn't quite worth $2.3 million!
That $37,000 in fees is for the last year alone. You've been paying out every year along the way. In fact, by New Year's Day 2000, you'd have paid that rascal more like $70,000 in fees, and the lost profits on those fees would have cost you a lot more -- another $340,000 or so. And that's over 10 short years! That's a high price, but it gets worse. Imagine if you'd invested $20,000 instead of $10,000. You'd be paying twice as much. And what do you get for all that extra money -- for paying twice as much? Not a darn thing, as far as I can tell.
Oh, yes, it gets worse still
Don't believe me? Look at any list of widely held institutional stocks. I'll spare you the trouble: You'll probably find "blue chips" like Home Depot (NYSE: HD) and Merck (NYSE: MRK), alongside other usual suspects. Now, run down the top holdings in your mutual funds. See anything familiar? Worse, if your fund manager does stumble on a category-killer like Amgen (Nasdaq: AMGN) before it's a household name, what are the chances he would actually hold on for the entire ride? More likely, you'd have been in and out many times over. You guessed it: In addition to the outrageous annual fee, you'd have been killed with taxes and transaction costs.
And it gets worse ...
Worse, your manager not only might fail to keep pace with the market in any given year (remember, most do), he or she might actually lose you money. Yet, even if you don't make a penny in year 11 of our previous example, you'll still have to hand over another few thousand dollars in fees. That stinks. Yet, for all that, you may have no interest whatsoever in researching stocks on your own -- even with the help of someone you can trust. If so, mutual funds may be the only game in town. They definitely beat staying out of stocks over the long haul, but you can agree that it's a dubious model.
Something better to consider
Yes, you read that right. And I can assure you that beating the market is their sworn mission, something 75% of mutual fund managers do not do. Best of all, as your portfolio grows, your costs won't. Joining Motley Fool Stock Advisorwon't set you back two grand a yearto join the $100,000 club ... or $120,000 a year to be the $6 million man or woman. That's a reasonable goal, after all -- and it isn't one you should approach with mixed feelings. To steal a phrase from that sour-faced know-it-all on the TD AMERITRADE commercials, "You cando this." For a little help, give David and Tom Gardner's Stock Advisora try. Seriously, if you don't like what you see, you don't pay a penny. To learn more, click here now. Already subscribe toStock Advisor ? Log in at the top of this page . This article was originally published June 13, 2006. It has been updated. Fool writer Paul Elliott doesn't own any of the stocks mentioned. You can see all of David and Tom Gardner'sStock Advisor recommendations immediately with your free trial . Home Depot is aMotley Fool Inside Value selection. The Motley Fool has a disclosure policy . This article was originally published as Don't Invest Another Pennyon Fool.com Copyright © 2009 The Motley Fool, LLC. All rights reserved. Bargain Stocks Are EverywhereBy Morgan HouselFebruary 9, 2010 Bet against the masses. Don't be the lemming. Be fearful when others are greedy. Follow these simple rules, and you'll probably be a successful investor. With those rules of thumb in mind, you'd be forgiven for thinking now is a terrible time to buy stocks. The S&P 500 is up over 60% since last March, which is typically consistent with a market flooded with uncontrolled euphoria. Sure enough, many are preaching of an overvalued market that's gotten way ahead of itself.
Stand back
Today, it looks like we've skirted most of those calamitous end-of-the-world threats. Thank heavens. It's still terrible, mind you, just not as terrible as many thought. Naturally, stocks have sprung back to levels that reflect a deep recession, rather than a total Mad Max scenario. This is an incredibly important distinction to make: Markets haven't risen to levels reflective of exuberance, but to levels consistent with a world that isn't about to fall into mass insolvency. This is evident by looking at the biggest winners over the past months. By and large, the stocks that have risen the most are ones you wouldn't recommend to your worst enemy. Have a look: Company Return Since March 2009 Dollar Thrifty Automotive 3,321% Avis Budget Group 2,555% Dana Holdings 2,542% Are these companies destined for greatness? Did they announce a new blockbuster product? Are they the next Apple (Nasdaq: AAPL), waiting to change the way we live? Goodness, no. Not even close. Their huge gains are simply a reflection that they'll live to see another day. In general, this is a rally built on canceling out past pessimism. The biggest gains have been concentrated in very low-quality companies that are simply being given a second shot at life.
Not all gains are created equal Â
Three in particular I like are Verizon (NYSE: VZ), Campbell Soup (NYSE: CPB), and Coca-Cola (NYSE: KO). And I'll tell you why. Verizon has been hit over the past few weeks, pushing its dividend yield (the main reason you want to own this stock) up close to 7%. When interest rates are at zero and you can buy world-class utility stocks with 7% dividends, odds are you won't be unhappy down the road. Verizon could also score big if Apple drops the iPhone exclusivity contract with AT&T (NYSE: T). Campbell Soup has two things running in its favor right now: recession-shocked consumers looking to keep their costs down, and a stock trading at a cheap valuation. Shares currently trade hands at 12 times forward earnings -- a nice discount to the 20 times earnings shares have traded at on average since 1993. Coke has long been a default pick of investors looking for a company they truly understand. But here's something many people don't know: There's increasing talk (including hints from Treasury Secretary Tim Geithner) that China could soon revalue its currency, letting the yuan appreciate against the dollar. That could make it cheaper for over a billion thirsty Chinese mouths to purchase one of America's most admired exportable goods: good ol' Coca-Cola. How much of this is baked into today's share price? At 15 times earnings, close to none of it, in my opinion.
Onward Â
And that's why our Motley Fool Inside Value team of analysts is having a field day digging through the rubble and finding cheap stocks like never before. To see what we're recommending today, click herefor a free 30-day trial. There's no obligation to subscribe. This article was published on June 25, 2009. It has been updated. Fool contributor Morgan Housel owns shares of Verizon. Coca-Cola is a Motley Fool Inside Value  pick. Apple is a Motley Fool Stock Advisor  selection. Coca-Cola is a Motley Fool Income Investor  recommendation. The Fool has a disclosure policy . This article was originally published as Bargain Stocks Are Everywhereon Fool.com Copyright © 2009 The Motley Fool, LLC. All rights reserved. Your Ticket to Country Club RichesBy Austin EdwardsFebruary 9, 2010 About the time they told me I'd need a teamof security guards to escort me to the men's room, I knew I'd done it. By it,I mean ticked off a roomful of folks so pompous that you couldn't tell where their silver spoons ended and their perma-scowls began. Even worse, I committed this crime on the holiest of grounds ...
Brace yourself for the horror!
Granted, I probably looked like I'd just escaped from some sort of white-collar Supermax where they only play pedestrian lawn games like bocce and badminton. But in my defense, I didn't know I was going until about an hour beforehand. Not to mention, my boss assured me that I wouldn'tbe openly -- and quite loudly -- called out as "(expletive deleted) disrespectful" by the club's chief of security.
Amusingly ironic -- and tactful, to boot
But I will tell you that the whole experience has me bound and (expletive deleted) determined to become the best investor I can be, so that one day I can join any golf club I please, and treat disgustingly underdressed people like ... well, people.
Here's how I'm going to do it ...
I've already started by reading the 25 booksthat Motley Fool co-founder Tom Gardner thinks every investor should read. Now, in my ongoing quest to become a master investor, I'm moving on to these ... Fundamental analysis: The Five Rules for Successful Stock Investing, by Pat Dorsey and Joe Mansueto Security Analysis, 6th Edition,by Benjamin Graham and David DoddBehavioral finance: Why Smart People Make Big Money Mistakes and How to Correct Them,by Gary Belsky and Thomas Gilovich Your Money and Your Brain,by Jason ZweigGeneral investment wisdom: The Aggressive Conservative Investor, by Martin Whitman Poor Charlie's Almanack, by Charles T. MungerEconomics and markets: The Age of Turbulence, by Alan Greenspan A Short History of Financial Euphoria,by John Kenneth GalbraithCase studies: The Smartest Guys in the Room,by Bethany McLean and Peter Elkind In an Uncertain World: Tough Choices from Wall Street to Washington,by Robert Rubin and Jacob WeisbergThese are just 10 of the 31 books on the Motley Fool Hidden Gems reading list. And though it might take you a few months to plow through all of them, I'm positive it will be worth your while.
What I'm doing in the meantime ...
Because I'm confident that the world economy will continue to recover and drive commodity prices higher, I've been taking a serious look at everything from Alcoa (NYSE: AA) to Petrobras (NYSE: PBR) to Valero (NYSE: VLO). I've also been researching solid dividend payers like Kraft (NYSE: KFT), Johnson & Johnson (NYSE: JNJ) and Nokia (NYSE: NOK). Yet, while I'm confident in the long-term potential of all of these stocks, I'm also aware that none of them will be the market's next big movers, nor will they experience the kind of explosive, life-changing growth that has characterized the top 10 best-performing stocks of the past decade.
How can I be so sure?
Never heard of Diedrich? That's no surprise. After all, just like the top-performing stocks of the past year, it’s small, obscure, and completely ignored by Wall Street.
The secret to country club riches ...
That's why Motley Fool Hidden Gems co-advisors Seth Jayson and Andy Cross are actively investing $250,000 of The Motley Fool's own money in smallhigh-growth, low-debt companies that are overlooked by Wall Street.
What are they buying now?
And because each of these has the potential to be the next home run stock, I make a point to check out the Hidden Gemsreal-money portfolio every morning, so I can get the latest updates on the stocks they own (so far, 10 of 16 positions are in the green, and five are up more than 30%) and be the first to know about new stocks they've uncovered. If you'd like to follow along with me, I invite you to take a free 30-day trial of Hidden Gems, giving you full access to the real-money portfolio and the exclusive, members-only website featuring an interactive portfolio scorecard, full write-ups on every recommendation, and the entire 31-book reading list. I also invite you to use the comment box below to chime in on what stocks you're buying, what stocks you're selling, what books you're reading, and, of course, what kind of egregious country-club crimes you'recommitting. If you'd like to learn more about this 30-day free trial, simply click here. There's no obligation to subscribe. This article was originally published on July 23, 2009. It has been updated. Austin Edwards rarely replaces his divots -- because he's usually knee-deep in the rough. Currently, he does not own shares of any of the companies mentioned. Atheros Communications and Dynamic Materials areHidden Gems recommendations, and the Fool owns shares of both. Ford is aStock Advisor pick. Petroleo Brasileiro and Johnson & Johnson areIncome Investor selections. Nokia isan Inside Value pick. The Fool is investors writing for investors and has a disclosure policy . This article was originally published as Your Ticket to Country Club Richeson Fool.com Copyright © 2009 The Motley Fool, LLC. All rights reserved. Is This Bull Over?By Alex Dumortier, CFAFebruary 9, 2010 Is the market finally coming to terms with the significant macroeconomic risks that are hiding in plain sight? Last Thursday's 3.1% loss in the S&P 500 could be a sign that the overextended rally we have experienced has finally run out of steam. If the beta trade (i.e., riding the market up) iscoming off the tracks, investors need to position themselves correspondingly. In the most recent issue of his widely followed quarterly letter, GMO chairman Jeremy Grantham puts the S&P 500's value at 850 (it closed north of 1,050 yesterday). That looks like a reasonable estimate: According to data compiled by professor Robert Shiller of Yale, it's equivalent to 15.7 times average inflation-adjusted earnings over the prior 10 years -- in line with the multiple's historical average (16.3) going back all the way to 1881. Using Grantham's fair value as a benchmark leaves plenty of room for the market to correct further.
The sector square dance
Top S&P 500 Sectors, % Return Rank 2009 (March 9 - Dec. 31) 2010 (Year to Date*) No. 1 Financials (+131.3%) Health Care (-1.3%) No. 2 Consumer Discretionary (+87%) Industrials (-1.9%) No. 3 Information Technology (+85.7%) Consumer Staples (-2.1%)
Source: S&P Indices.
Although Financials aren't by any means the worst-performing sector this year, a number of large financial shares have already corrected significantly, judging by the discount to their 52-week highs, including AIG (NYSE: AIG): -60%, Morgan Stanley (NYSE: MS): -24%, Goldman Sachs (NYSE: GS) -20%, JPMorgan Chase (NYSE: JPM): -19%, and Capital One Financial (NYSE: COF): -19%.
Preparing for a correction
Investors shouldn't expect any significant gains from U.S. stocks this year; however,Global Gains co-advisor Tim Hanson has found a way to earn 50% annual returns. This article was originally published as Is This Bull Over?on Fool.com Copyright © 2009 The Motley Fool, LLC. All rights reserved. Turning a Drip Into a GushBy Selena MaranjianFebruary 9, 2010 "Drip" investinglets you invest in companies directly, thus completely or mostly bypassing your brokerage and its commission fees. It lets you invest small amounts, and it reinvests dividends you receive in additional shares (or fractions of shares). Traditional Drip plans were extremely valuable in the past, and many investors benefited greatly from them. However, these days they're no longer so necessary, since many online discount brokeragesare now offering dividend reinvestment -- along with commission rates that are significantly lower than they were a decade or two ago. When you consider some of the downsides of traditional Drips, such as excessive paperwork and difficulty tracking small purchases, you may want to look to a brokerage account instead. Some discount brokers now try to make purchase and sale tracking easier for their customers.
Changing brokerages
Meanwhile, if you're interested in having your brokerage reinvest your dividends, you have several options. Schwab (Nasdaq: SCHW), E*TRADE (Nasdaq: ETFC), TD AMERITRADE (Nasdaq: AMTD), and ShareBuilder are just a few of the brokers offering some form of dividend reinvestment.
Reinvesting is powerful
You can see just how powerful dividends can be -- even without adding a single penny to your original investment. Over time, you'll often find that your dividends grow so large that you'll earn more than your total original investment every yearin dividends alone!
Sidestep the accounting
Alternately, simply let your dividend income accumulate in your brokerage account until you have enough cash to deploy into a new investment -- another stock holding, or even a new batch of shares in an existing holding. In this situation, you're controlling how many batches of a stock you purchase, and you're more easily able to invest in other companies. This option will give you much of the benefit of reinvesting dividends, but with fewer tax hassles along the way. Reinvesting dividends shows just how powerful long-term investing can be. By keeping your money working for you, you can make it grow that much faster -- getting you where you want to be that much sooner. Invest your time in broker-related Foolishness: you need a broker. 10 waysyou can size up your broker. How to invest any amountof money.This article was originally published as Turning a Drip Into a Gushon Fool.com Copyright © 2009 The Motley Fool, LLC. All rights reserved. Stern Is Synonymous With SiriusBy Rick Aristotle MunarrizFebruary 9, 2010 Sirius XM Radio (Nasdaq: SIRI) fans can thank New York Post's gossipy Page Six column for giving Howard Stern more leverage in contract negotiations. According to the report, Stern is the top choice to replace Simon Cowell after this season's of American Idol. "It might be possible," he told radio show listeners yesterday. "We'll see." Stern is in the final year of his five-year deal with Sirius XM Radio. It's only natural for the magnetic Stern to draw interest. The morning show host has previously confirmed that even terrestrial radio operators have opened the door for his return to traditional radio. None of this seems likely, though. For starters, let's go over the reasons why Stern and Idol aren't exactly a perfect fit. CBS ' (NYSE: CBS) Infinity, can we really expect a prolonged tenure given the mostly live nature of the show airing on News Corp. 's (NYSE: NWS) Fox? Stern has a quick wit and a wicked tongue, but what about his ear? He should have no problem discerning between good and bad crooning during the early rounds, but does he have the skills to split hairs between great singing and merely really good singing when it matters most?None of this matters, for now. Stern is simply benefitting from one more potentially interested party to make sure that he can milk the best contract possible out of Sirius XM CEO Mel Karmazin. Karmazin seemed to have all of the leverage when Sirius completed its merger with XM in late 2008. Stern wouldn't have XM bidding against Sirius for his services. It has been suggested that Stern can strike out on his own with a premium-streaming model. Now that Apple (Nasdaq: AAPL) and Research In Motion (Nasdaq: RIMM) have tens of millions of smartphone subscribers tethered to the web, it's certainly a niche where Stern could command a healthy living. However, all of the chatter of Idol or terrestrial radio seems farcical at this point. Is there really any doubt as to where Stern will be come next January? All of this noise may cost Karmazin -- and Sirius XM shareholders -- a bit more than they were hoping to pay in securing Stern for a few more years, but it's going to happen. Where do you see Howard Stern broadcasting from in 2011? Share your thoughts in the comment box below. This article was originally published as Stern Is Synonymous With Siriuson Fool.com Copyright © 2009 The Motley Fool, LLC. All rights reserved. The Most Undervalued Stocks in the MarketBy Anand Chokkavelu, CFAFebruary 9, 2010 There are three areas of the market that I've recently been scouring for undervalued stocks: banks, oil, and small caps. Why these three in particular? Here's my rationale for each (as well as some specific stock ideas).
Banks
I've written before about the dangers inherent in the sector. Bank of America and Citigroup are popular because they were left for dead at one point. They've recovered somewhat from a price standpoint -- leading to multibaggers off the lows -- but they still share the complexity problem with their stronger peers, including Wells Fargo , Goldman Sachs , Morgan Stanley , and JPMorgan Chase . All of these banks either have significant investment banking operations or have swallowed up a fallen toxic bank. I see more opportunity in the smaller, simpler banks. I bought into one of my research candidates, Community Bank System , back in July and continue to wait for better prices on a few others.
Oil
The gains in alternative energy could indeed be huge, but similar to the slew of Internet companies in the late '90s, it's exceedingly difficult to separate a winner like Cisco (Nasdaq: CSCO) from the companies that crashed and burned. And even if you do, the price may be too high. Consider that Cisco, Akamai (Nasdaq: AKAM), and Yahoo! are trading way below their bubble highs from a decade ago. Despite the alternative energy threats, our dependency on oil should exist for quite a while. The opportunity for large gains comes in buying oil companies (from the little guys like Dawson Geophysical to the ConocoPhillipses of the world) on weakness -- specifically when there's oil price weakness. I first wrote about thislast spring, when oil was closer to $50 a barrel. There may be good opportunities now (particularly as a hedge against rising energy costs), but if oil falls back into the $40s and $50s, and oil stocks weaken, definitely do your research and consider seizing the opportunity.
Small caps
Small caps tend to be more volatile than their larger brethren, so when the stock market experiences turbulence, small caps experience earthquake-like movement. When the price is right, we can capitalize. Let me walk you through a screen I'm using to find promising small caps. It's a little boring, but stick with me, because there are some interesting stocks at the end. I'm not interested in temporary beauty, so I looked for companies that had both positive earnings and positive free cash flow for the past five years. For cheapness' sake, I also made sure the companies were trading for less than 10 times the most recent earnings and free cash flow numbers via the P/E and P/FCF metrics. A lot of wonks bicker over whether P/E or P/FCF is a better metric. Frankly, I see no reason why both earnings and cash flow shouldn't be strong -- we want companies that are both accounting profitable andgenerating cash off of that profitability. As a final check, I made sure the companies were easily able to cover their interest payments. The screen generated 21 companies, but one in particular caught my eye. Here's the complete list:Â Company P/E Ratio P/FCF Ratio Life Partners Holdings 9.7 9.8 Meadowbrook Insurance Group (NYSE: MIG) 8.3 8.5 EarthLink 6.9 7.7 Core-Mark 7.4 6.4 Pre-Paid Legal Services 7.7 6.2 Chart Industries (Nasdaq: GTLS) 7.1 6.0 PH Glatfelter 6.6 5.5 Hawaiian Holdings 5.3 5.5 FPIC Insurance Group 9.0 5.2 CNA Surety 6.5 5.0 Sterling Construction (Nasdaq: STRL) 5.3 4.6 PDL BioPharma 5.3 4.5 AZZ 9.1 4.4 American Physicians Capital 7.5 4.2 EMCOR 8.5 4.1 ProAssurance 7.8 3.9 Apogee Enterprises 8.8 3.9 Advance America 6.7 3.7 Innophos Holdings 3.3 3.0 SeaBright Insurance 8.4 3.0 Employers Holdings 7.0 2.7 Source: Capital IQ, a division of Standard & Poor's. Of the select 21, the one that caught my eye was Innophos Holdings, a specialty phosphates producer. First, because of its tiny P/E and P/FCF ratios under 5.0. Second, because it's a recommendation of our small-cap experts over at Motley Fool Hidden Gems . Their goal is to identify the most unloved, undervalued small-cap stocks in the market, so it's not surprising that a phosphates producer has made their list. They feel strongly enough about Innophos that they have bought shares with The Motley Fool's own money. I invite you to learn more about the stock and see their entire real-money portfolio by taking a free 30-day trial. There's no obligation to subscribe. Already a member ofHidden Gems ? Log in at the top of this page . This article was originally published Aug. 21, 2009. It has been updated. Anand Chokkavelu owns shares of Community Bank System and long-held shares of Citigroup. Dawson Geophysical is aMotley Fool Hidden Gems recommendation. Akamai Technologies is aRule Breakers recommendation. The Fool owns shares of AZZ incorporated and Innophos Holdings and has a disclosure policy . This article was originally published as The Most Undervalued Stocks in the Marketon Fool.com Copyright © 2009 The Motley Fool, LLC. All rights reserved. Now Is the Time to Invest and Get RichBy Anand Chokkavelu, CFAFebruary 9, 2010 Not my words. Those were Warren Buffett's. Back in 1974. He turned out to be right. Earlier this decade, he warned about the insane valuations during the Internet bubble and the dangers of derivatives. Correct, and correct again. In October 2008, he wrote an op-ed piece in The New York Timesurging investors to start buying stocks. In addition to 2008's shopping spreeon behalf of his company, Berkshire Hathaway , he started buying up stocks for his personal account. The day Buffett penned his Timespiece, the S&P 500 closed at around 950. A year and a half, a big dip, and a big rally later, we're sitting higher ... but not that much higher (around 12%). Certainly, we should follow Buffett's lead, right? Not so fast. Despite a newly growing GDP, the economic numbers are ugly. Unemployment is around 10%, the next decade's annual deficits are projected to almost double our already $12 trillion-plus national debt, and consumer confidence is still "eh." Yet we've seen the market rise nearly 60% since March. Yikes! Who's right? Is now another time to invest and get rich? Or is the market a sucker's bet?
Buffett vs. the numbers
Back to the question at hand: Don't be surprised if both the numbers andBuffett are right. The economy and the stock market could get worse from here, but it could still be a great time to invest and get rich. Huh? Remember, since we can't time the market, we're talking only about money you can keep in the market for the long term. Unlike Jim Cramer, we Fools have alwayssaid that money you need in the next three to five years should never be in the stock market. As the last year has shown, it's just too darn volatile for money you need in the short term. So, even if the gloomy numbers are right -- if the economy worsens, and the stock market drops again over the next year or two -- we could be looking back three to five years from now, thinking that now was a great time to invest and get rich.
OK, but how bad could it get?
Long story short, the S&P 500 has had long stretches in which it has seen average price-to-earnings ratios of around 8. Even after the free fall we've seen (but after the recent rally), the S&P 500's average P/E (for companies with positive earnings) is 27. Wow.
Here's a place to start
No, it's at the individual stock level where I warm up. The pickings are slimmer than they were a few months ago, when you could get quality companies like IBM (NYSE: IBM), BHP Billiton (NYSE: BHP), and Pepsi for a quarter to half off today's price; still, there are some big-time companies trading at low P/E ratios. When I start seeing P/E ratios in the neighborhood of single digits, I get very interested. Take a look at these companies: Company P/E Ratio Fluor (NYSE: FLR) 10.8 China Mobile (NYSE: CHL) 11.9 General Dynamics (NYSE: GD) 10.7 UnitedHealth Group (NYSE: UNH) 10.0 Safeway (NYSE: SWY) 11.0 Source: Capital IQ, a division of Standard & Poor's. Ah, but remember my warning earlier. P/E ratios are an imperfect measure of cheapness. They're just a place to start, because a company's future earnings can be very different from its trailing earnings. See the losses in the financial sector. Investors looking at just the trailing earnings a couple years ago would have been tricked into a false bargain.
Should you buy?
A simple metric isn't going to cut it. That's a great place to start, but you have to do your research and determine what you believe a company's future earnings power will be. Only then can you judge whether a company is a value or a value trap. Our Motley Fool Inside Value team spends its days (and sometimes nights) doing just such analysis. They break each potential stock recommendation down, determine its earnings power, and then figure out whether it's a good value. If you'd like to see the companies that have made their buy list, a 30-day trialis free. There's no obligation to subscribe. Already a member ofInside Value ? Log in at the top of this page . This article was originally published Dec. 4, 2008. It has been updated. Anand Chokkavelu has a P/E ratio of just 2.4 ... the market will wake up one day. He owns stock in Microsoft and Berkshire Hathaway. Berkshire Hathaway, General Dynamics, and UnitedHealth Group areMotley Fool Inside Value selections. Berkshire Hathaway and UnitedHealth Group areStock Advisor picks. PepsiCo is anIncome Investor recommendation. The Fool owns shares of Berkshire Hathaway, China Mobile, and UnitedHealth Group and has a disclosure policy . This article was originally published as Now Is the Time to Invest and Get Richon Fool.com Copyright © 2009 The Motley Fool, LLC. All rights reserved. Even the E*TRADE Baby Learns to LimboBy Rick Aristotle MunarrizFebruary 9, 2010 It didn't take long for E*TRADE (Nasdaq: ETFC) to join Charles Schwab (Nasdaq: SCHW) and Fidelity in the discount brokerage commissions battle. The online enabler is eliminating the $12.99 commission tier that infrequent traders were subjected to in the past. As of yesterday, all accounts will be paying no more than $9.99 for stock trades. High volume traders will continue to pay just $7.99 per trade. E*TRADE is also doing away with account activity fees, including annual IRA fees. It's no coincidence that E*TRADE is dolling up its commission schedule just days after Fidelity Investments answered Schwab's pricing war battle cry. Your turn, TD AMERITRADE (Nasdaq: AMTD)? Investors will love paying less for stock trades. Personally, it offended me that many discounters were penalizing infrequent traders. It sends the wrong message, turning patient investors into speculators. Do you think that Berkshire Hathaway 's (NYSE: BRK-A) (NYSE: BRK-B) Warren Buffett would've recommended making the 150 trades in any given quarter to qualify for the $7.99 rate through Power E*TRADE accounts? I doubt it. I get it. Discounters rely on hyperactive speculators and risk takers on margin to justify dirt cheap commissions. I just don't have to like it. Unfortunately for those that invest in the discounters themselves, lower commissions and the eradication of account fees will probably eat into their profitability. Goldman Sachs probably saw this coming when it marked down its price targetson the three brokers -- as well as optionsXpress Holdings (Nasdaq: OXPS) and TradeStation (Nasdaq: TRAD) -- two months ago. Trading volumes are drying upso brokers are aggressively trying to win market share through attractive commissions. Account holders will rejoice, but the bottom line on the battlefield won't be pretty. What's that? You're still unsure about whether or not you should get a new broker? Get thee to our Discount Broker Centerto learn more and compare some sponsored commission schedules. This article was originally published as Even the E*TRADE Baby Learns to Limboon Fool.com Copyright © 2009 The Motley Fool, LLC. All rights reserved. How Rich Investors Stay RichBy Motley Fool StaffFebruary 9, 2010 Ever wonder how rich folks trade? I don't mean hedge funds and the like. I mean the realrich, people with inherited wealth who don't have to spend their days huddled over computers in order to earn a living. They can hire the best help and advice out there -- they must be cleaning up, right? Pick up any issue of Barron's, and you'll see a few ads for trading "services" -- tutorials, tip services, gurus, etc. -- that promise spectacular results for those who apply themselves to learning the art of short-term trading. If those sorts of things are available to every Joe and Jane on the street with a few thousand bucks to spend, what do you think the reallyrich folks are doing? I'll tell you what they're doing: Nothing.
The real secret of trading
So why do ordinary investors do it? Barber and Odean concluded that overconfidence was a key factor -- people overestimated their ability to pick market-trouncing stocks. But I think there's another factor at work, one that comes to light when you compare the trading behavior of people who are buildingwealth with those of the folks who already havewealth: Simply put, some people are trying to wring more from the market than it has to offer. Motivated by stories of outrageous returns, these folks aren't content with turning their $100,000 nest egg into a million over 20-plus years. They want to do it by nextyear. They look at how stocks like Apple (Nasdaq: AAPL) and Baidu (Nasdaq: BIDU) have done in the past five years and want to find the next big growth stories. And so they take the courses and subscribe to the trading tip lines. And usually, they end up underperforming their neighbor's index fund by several percent -- ifthey don't manage to lose alltheir money.
Meanwhile, over on Easy Street ...
Most of their stocks were inherited from an ancestor who simply bought stock in the companies he admired and did business with a couple of generations ago. The dividends paid by these companies provide a great income stream, and as long as that income stream continues, the family won't have any incentive to sell. That's their complete stock investment strategy. In fact, it's entirely possible that the family's descendants will still hold the same stocks 50 years from now.
But what about us?
The practice of reinvesting dividends can turn boring performance into market-beating returns, partly because dividend-paying companies tend to be stable and mature. At first glance, that may appear to be a mixed blessing: good because they're much less volatile in choppy markets, bad because they're less likely to rocket to 10-bagger levels of return. But even relatively safe dividend-payers can grow over time. Just take a look at these companies and their track records of making payouts: Stock 20-Year Avg Annual Return Current Dividend Yield Consecutive Years of Higher Dividends Coca-Cola (NYSE: KO) 11.5% 3.1% 47 years ExxonMobil (NYSE: XOM) 12.1% 2.6% 27 years Johnson & Johnson (NYSE: JNJ) 13.7% 3.1% 47 years Intel (Nasdaq: INTC) 15.6% 3.3% 6 years Stanley Works (NYSE: SWK) 10.8% 2.5% 42 years Source: Yahoo! Finance. When you combine top payouts with the power of dividend reinvestment, a well-chosen portfolio of dividend-paying stocks has a great chance of outperforming the market over the long haul. In the meantime, if you're tempted to pore over your stock holdings every minute, do yourself a favor -- don't. You may be surprised how much better you do as a result. Like dividend stocks? Todd Wenning will show you what's in store for the best dividend stocks of the decade. This article was originally published as How Rich Investors Stay Richon Fool.com Copyright © 2009 The Motley Fool, LLC. All rights reserved. Make Thousands From MillionsBy Selena MaranjianFebruary 9, 2010 I've written before about how to make millions from thousands, but I think it's also valuable to understand how you might do the opposite. Even if you're not yet a millionaire, the wrong moves could still turn your thousands into hundreds. The CFA Institute, which grants very respected "CFA" designations to financial analysts who pass its series of rigorous tests, recently released a list of 12 common investing mistakes. Here are three errors particularly worth avoiding.
1. If you fail to plan, plan to fail
When will we sell any of these stocks? We don't know. How long do we aim to hold them? We don't know that, either. How, exactly, do they fit into our Big Plan? Unfortunately, we don't have one. All the great investors place their money according to some underlying strategy. Many believe in value investing, buying each stock only a certain discount to its fair valuation. Many are long-term investors, aiming to hang on to their stocks for years or decades, as long as those investments remain promising. These folks know how much risk they can stomach, and they won't exceed that limit. When the market tanks, as it did in 2008, they don't sell in a panic like so many lesser investors. They know their strategies, and they stick with them.
2. Don't place all your eggs in one basket
You need to spread your assets over a variety of industries -- and, ideally, over a variety of geographical regions and asset types. American stocks have a great track record, in general, but many other economies are growing more rapidly. Even those that aren't may buffer you a bit, should the U.S. economy falter. By investing in several different asset types, you'll also reduce some of your risk, and be able to enjoy a greater variety of benefits from different global markets. Large, established dividend payers such as AT&T (NYSE: T) and Procter & Gamble (NYSE: PG) offer a benefit of their own: the one-two punch of expected stock price appreciation, coupled with growing dividend payments. Even when the overall market is slumping or stalled, their payouts keep rewarding you. Smaller companies, such as NVIDIA (Nasdaq: NVDA) and Intuitive Surgical (Nasdaq: ISRG), rarely pay a dividend, but they do offer greater growth potential. By daring to defy conventions, these Rule Breaking companies can grow extremely rapidly. (I've tripled my money on Intuitive Surgical in just a year or two.)
3. Buy only at the right price
It's true that some highfliers, like classic Motley Fool Stock Advisorpick Amazon.com (Nasdaq: AMZN), have always seemed overvalued, yet still kept appreciating. But there's no guarantee that Amazon's growth will continue, nor that all rapid growers will follow its example. To avoid overpriced stocks, look at measures such as P/E ratios and price-to-sales ratios at the very least. Compare them with the company's historic averages, with those of its peers, and with the company's revenue growth rate. For an even more accurate picture of a company's value, check out its free cash flow and other measures of profitability.
Be the best
Our Motley Fool Stock Advisor team looks for the best companies across a variety of industries and company types. Take advantage of a free, no-obligation 30-day trialof the service, with full access to our entire archive of previous picks. It just might help improve your chances of turning thousands into millions. Longtime Fool contributor Selena Maranjianowns shares of Procter & Gamble and Intuitive Surgical. Pfizer is aMotley Fool Inside Value recommendation. Intuitive Surgical is aMotley Fool Rule Breakers pick. Amazon.com and NVIDIA areMotley Fool Stock Advisor selections. P&G is aMotley Fool Income Investor pick. The Fool owns shares of P&G. The Motley Fool is Fools writing for Fools . This article was originally published as Make Thousands From Millionson Fool.com Copyright © 2009 The Motley Fool, LLC. All rights reserved. Toyota's Problems: 8.5 Million and CountingBy John RosevearFebruary 9, 2010
I don't see Toyota as an infallible company that never
makes mistakes.
Yeah, no kidding, huh? Setting aside the violation of the first rule of recall announcements (make 'em on Friday afternoon so that articles like this one run on Saturday morning when nobody's paying attention), this morning's announcement that a Prius recall will be added to Toyota 's (NYSE: TM) mounting pile of woes was not at all a mistake. In fact, in a backhanded sort of way, it counts as a good move. Sure, the news that Toyota's iconic hybrid models have a software glitch that can cause a delay in braking under certain conditions isn't exactly welcome, and the timing of this recall -- on top of all of Toyota's other woes, and adding up to 8.5 million vehicles recalled so far -- is far from ideal. But at least they're owning up to this one in semiprompt fashion.
Are they finally getting a clue?
This happens to every company -- even brilliant ones like Apple (Nasdaq: AAPL), which is currently struggling with problems on its big (and expensive) 27-inch iMac's display. Of course, when it happens with a car, it can be a major safety issue. That's why the recall system exists, and most every consumer-products company gets hit with one once in a while. Recently, Johnson & Johnson (NYSE: JNJ), Procter & Gamble (NYSE: PG), and Whole Foods Market (Nasdaq: WFMI), which recalled some hazelnuts back in December, got hit, among many others. It's one thing to be discreet when a recall is required -- that Friday afternoon business really is what most companies seem to do. But for years, Toyota wasn't discreet; they were in denial. From engine sludge problems (way back in 2002) that they tried to blame on drivers, to the unintended-acceleration mess, which they blamed variously on drivers and on loose floor mats until recently, Toyota has given the impression of a company that isn't willing to be forthcoming-- or to take action -- about safety issues with its products. That impression is starting to build steam in the public mind. And competitors are already responding.
Nice lunch. Mind if we eat it?
Meanwhile, even if Toyota is finally (finally!) changing its ways, this PR disaster is still far from over. It's a variation of the Chicken Little problem; deny the sky is falling for long enough, and nobody will believe you when you say it finally fell. If the unintended-acceleration problem wasn't due to the floor mats, as you claimed last year, why should we believe that it was due to a gas pedal part, as you claimed last week? Why shouldn't we believe that it's a software problem, for instance? That's the question a lot of folks are asking. And those folks include Congress, who will be holding the first of several public hearings on the issue later this month. I expect that to be an uncomfortable session for the star witness, Toyota North America CEO Yoshimi Inaba, as House members in high dudgeon look to score points against a company that seems to be edging closer and closer to a huge backlash. How bad will all this get? Stay tuned. This article was originally published as Toyota's Problems: 8.5 Million and Countingon Fool.com Copyright © 2009 The Motley Fool, LLC. All rights reserved. Which Stocks Will Be 2020's 10-Baggers?By Anand Chokkavelu, CFAFebruary 9, 2010 Pop quiz, hot shot. Name the company that's most likely to be a 10-bagger by 2020. It's a hard question. There isn't just one correct answer -- you can find three candidates here-- but it's easy to weed out some popular incorrect answers. If you named Intel (Nasdaq: INTC), Johnson & Johnson (NYSE: JNJ), Kentaco Fried Hut parent Yum! Brands (NYSE: YUM), or any other large-cap company, you're probably wrong. They're simply too big to grow tenfold in the next decade. My Foolish colleague Tim Hanson has shown year in and year out that a decade's biggest winnersare small-cap stocks. He found that the largest grower of the past 10 years, weight-loss company Medifast , was better than a 90-bagger. Even at 90 times its original market capitalization, Medifast was just a $500 million company (it’s fallen since then). At $15 billion, Yum! Brands is 30 times bigger; Intel is 200 times bigger; and Johnson & Johnson is well over 300 times bigger.
It gets better
As we've seen recently, large-cap stocks can be quite volatile, too. When their price losses significantly outstrip the market's, though, there's usually something terribly amiss. Familiar examples abound. Take the gambling industry and MGM Grand (NYSE: MGM), Las Vegas Sands (NYSE: LVS), and Wynn (Nasdaq: WYNN). Even after their recovery, they’re still well off their former highs because their balance sheets weren’t built for a gambling environment crippled by a faltering economy. Meanwhile, small caps are a little different. Sometimes, as in the case with Boyd Gaming (NYSE: BYD), small caps are down for a reason. But, since they tend to have greater volatility than the market as a whole, sometimes they experience dramatic stock price tumbles on very little news. Or even on relatively good news.
A quick example
In response, shares were sliced in half in the month following the earnings release ... only to gain it all back and then some after the company beat analyst expectations in the subsequent quarter. Over those months, it remained the same company with the same long-term prospects. There were no huge company-related events, and its price was about the same a few months after the earnings release as it was a few months before. But somewhere in the middle, the market threw a half-off sale for investors patient enough to wait for a discounted entry point. Because they took advantage of volatility, those investors need only a five-bagger (or less) from here to reach the vaunted 10-bagger status.
The 10-bagger club
The list of investors who profit from these 10-baggers will be dominated by people who can be described as: If you have these two qualities, I invite you to join our analysts at the Motley Fool Hidden Gemsnewsletter. They are putting the Fool's money where its mouth is by building a real-money portfolio of small-cap stocks. You can see all the companies they're investing in with a free 30-day trial. If you're not impressed, there's no obligation to subscribe. Already subscribed toHidden Gems ? Log in here . This article was originally published on May 15, 2009. It has been updated. Anand Chokkavelu does not own shares in any company mentioned. Buffalo Wild Wings is aMotley Fool Hidden Gems pick. Intel is anInside Value selection. Johnson & Johnson is anIncome Investor selection.Motley Fool Options has recommended buying calls on Intel and Johnson & Johnson. The Motley Fool has a disclosure policy . This article was originally published as Which Stocks Will Be 2020's 10-Baggers?on Fool.com Copyright © 2009 The Motley Fool, LLC. All rights reserved. It's Time to Play AgainBy Rick Aristotle MunarrizFebruary 9, 2010 The toymakers are back. Shares of Hasbro (NYSE: HAS) soared 13% yesterday, after the country's second-largest maker of playthings delivered better-than-expected fourth-quarter results. Revenue climbed 12%, to $1.38 billion. Favorable foreign exchange trends propped up results, but Hasbro's top line still would have inched 7% higher on a constant dollar basis. The real story here, however, is the toymaker's widening margins. Earnings soared 77%, to $1.09 a share, completely obliterating analyst estimates of $0.81 a share. Even for a company that has consistently topped Wall Street's profit targets, this is ridiculous. The company's success during the telltale holiday quarter came primarily from its action toys. Having its G.I. Joe and Transformers toy lines splashed across the silver screen this past summer obviously helped Hasbro. However, the toymaker isn't alone in the winner's circle. Rival Mattel (NYSE: MAT) also posted a huge upside earnings surprise with its holiday-quarter results two weeks ago. Why end the party now? LeapFrog Enterprises (NYSE: LF) is expected to post its first fourth-quarter profit since 2005 on Thursday. Analysts see smaller toymakers JAKKS Pacific (Nasdaq: JAKK) and RC2 (Nasdaq: RCRC) posting year-over-year dips in quarterly profitability later this month, but every silk rose has its plastic thorns. When market leaders Mattel and Hasbro come through with bottom-line spurts of 86% and 77%, respectively, the industry deserves to be welcomed back into Mr. Market's good graces. The future is undeniably bright for Hasbro. There will be more Hollywood adaptations in the coming years. Its joint venture with Discovery Communications (Nasdaq: DISCA) (Nasdaq: DISCK) to launch a kid-centric television channel will become a reality later this year, when Discovery Kids is rechristened as The Hub in the fall. Hasbro bulls will argue that the company isn't technically back, because it never really went away. Revenue has climbed in each of the past five years, with buyback-padded earnings per share inching higher for nine consecutive years. However, seeing Hasbro soar in tandem with the previously moribund Mattel is a screaming indicator that the toymaker industry itself is once again on the rise. This article was originally published as It's Time to Play Againon Fool.com Copyright © 2009 The Motley Fool, LLC. All rights reserved. This Stock Has Tremendous UpsideBy Tim BeyersFebruary 9, 2010 There is no such thing as a low-risk stock. That's the enduring conclusion of 2008, a year in which ostensibly government-backed companies Fannie Mae and Freddie Mac imploded, and former stalwarts Ford (NYSE: F) and General Motors -- companies that once had brokers enamored enough to sell their "low-risk bonds" to generations of Americans -- flirted with disaster as well. Without low-risk stocks, it might seem that retail investors like us are left in the lurch. After all, conventional wisdom -- printed and distributed by just about any mutual fund salesperson or financial advisor -- posits that large-cap stocks carry lower risks than small-cap stocks do, and that U.S. stocks are "safer" than foreign stocks. What happens in a world where there are no "low-risk" stocks?
This isn't bad news at all, actually
Conversely, if you'd labeled yourself "aggressive," you might have been told about an up-and-coming small cap such as Dendreon (Nasdaq: DNDN), or an emerging-markets play such as Infosys (Nasdaq: INFY). Even a self-identified aggressive investor, however, would probably not have been introduced to a small andforeign company such as Peruvian bank Credicorp (NYSE: BAP). Too risky, right? Not really. Those designations are arbitrary, and though I've constructed the following table by cherry-picking specific stocks, their sector-specific indexes aren't far off: Company 2008 Return Disney (29%) Pfizer (17%) Dendreon (26%) Infosys (44%) Credicorp (33%) Data from Morningstar. As you can see, those arbitrary designations of risk weren't predictive during that incredible year. Yes, Pfizer held up best, but neither "safe" stock offered that muchprotection.
What safe stocks will get you
Company 5-Year Annualized Return Disney 1% Pfizer (2%) Dendreon 34% Infosys 9% Credicorp 35% Data from Morningstar. Credicorp's five-year annualized return tops any other on this list. While it's no hard-and-fast rule, this example illustrates that with "safe" stocks, you get limited upside. And in periods of stress, you risk the same unpredictable downsideyou'd find in small, foreign, or even small andforeign stocks.
How to proceed
Yet just as there are negative black swans in the world, such as wars and market drops, there are positive black swans, such as the discovery of penicillin or the invention of the computer. When you invest in the stock market, Taleb asserts, you want exposure to these positive black swans (and their tremendous upside). So where can you find them?
Here's where you won't
These types of companies have the opportunity to surprise the world and the market, and given the resources waiting to be harnessed in emerging economies such as China and Brazil, their multiyear growth potential is enormous. Because investors are fleeing to "safe" U.S. large caps in these times of turmoil (using those faulty risk assumptions), right now you can gain exposure to the tremendous upside potential of emerging markets for cheap.
Take risks on your own terms
If there's anything you can learn from 2008, it's that there are no more "low-risk" stocks. Allstocks carry risks. Don't let artificial designations of "aggressive" or "conservative" make you think otherwise. That's not to say you should get out of stocks. Assuming you've put away any money you need to protect in Treasuries or insured interest-bearing accounts, at Motley Fool Global Gains, we think that today's valuations offer a great opportunity to invest in the world's emerging economies. The risks there are real, but tremendous upside opportunities abound. What's more, our travels to China, Indonesia, and Brazil have brought us in contact with a few companies that we believe have the opportunity to grow and reward investors significantly for the next decade or more. You can see our entire list of recommendations, and read all of our emerging-markets research, by joining Global Gainsfree for 30 days. Click herefor more information.
This article was first published on Nov. 20, 2008. It has
been updated.
This article was originally published as This Stock Has Tremendous Upsideon Fool.com Copyright © 2009 The Motley Fool, LLC. All rights reserved. Slowing Down in Emerging MarketsBy Amanda B. Kish, CFAFebruary 9, 2010 Drew Brees may be the MVP of Super Bowl XLIV, but if the stock market rally of 2009 were to award a trophy for most valuable contributor, emerging markets would get the honor. While the S&P 500 Index posted a solid 26% gain last year, the MSCI Emerging Markets Index climbed an astonishing 79%. With sky-high returns come more attention and more inflows. But those investors who are blindly plowing into emerging markets now may be ignoring some red flags.
Warning signs
Company 2009 Return Banco Bradesco (NYSE: BBD) 125.8% Petroleo Brasileiro (NYSE: PBR) 97.5% United Microelectronics (NYSE: UMC) 98% Banco Santander-Chile (NYSE: SAN) 89.5% Source: Morningstar. But don't assume that 2010 will be a repeat performance for some of these markets. In fact, there are some signs that certain highfliers may be encountering some headwinds in the near future. Of course, the biggest story is China. This dragon has dominated headlines and many portfolios for some time now, thanks to its red-hot growth rate and still-untapped domestic and industrial potential. It has been the place for anyone who wants to cash in on the hottest ticket to emerging-markets riches. But the Chinese market may be taking a breather. Inflation there rose to 1.9% in December, ahead of expectations, while gross domestic product came in at an amazing 10.7% in the fourth quarter alone. The Chinese housing market is also beginning to show signs of a bubble, with prices reaching eye-popping highs and consumers taking on highly leveraged loans to afford housing. All of this has helped to stoke fears that the government may tighten credit to try to rein in liquidity and cool the economy.
Caution ahead
Ultimately, I think emerging markets are in a unique position right now. There's a lot of risk, especially in China and Brazil, as well as Greece, whose recent debt troubles have contributed to the downturn of the past few weeks. Investors should expect some near-term pullbacks in this area, perhaps some quite significant ones. However, I don't think the near-term dangers outweigh the significant long-term potential of these areas. I still believe that emerging markets will offer some of the greatest growth opportunities over the next decade -- which means that investors shouldn't avoid these countries completely.
A reasoned approach
But beyond that, you still need some skin in the emerging markets game -- just make sure you take a well-diversified, less-risky approach. You don't need to sell out of or reduce your emerging markets allocation right now, unless your portfolio allocation is out of whack because of the past year's run-up. If that's the case, by all means sell some emerging markets and rebalance to your target allocation. When it comes to your specific emerging markets exposure, avoid single-country funds and ETFs. They're much too risky, especially now, when valuations are heightened. In this environment when risk is higher, you need broad coverage from a mutual fund or exchange-traded fund that invests across many emerging markets -- like Vanguard Emerging Markets Stock ETF (NYSE: VWO), which offers wide country exposure for a low 0.27% price tag. And remember that most broad-market actively managed international mutual funds have at least some emerging markets exposure, even if they typically focus on more developed economies, so you may have more exposure to this area than you realize. Emerging markets are no doubt in for a roller-coaster ride in the near term as the global economy struggles to get back on its feet, so be prepared for some rough times. Don't underestimate the long-term power of developing economies -- but at the same time, don't underestimate their propensity for risk, especially now. This article was originally published as Slowing Down in Emerging Marketson Fool.com Copyright © 2009 The Motley Fool, LLC. All rights reserved. A Domestic Drag at McDonald'sBy Alyce LomaxFebruary 9, 2010 Many retailers recently reported decent January compshere in the U.S. McDonald's (NYSE: MCD) was not among them. The fast food king's U.S. same-store sales were down, but shareholders should still cheer up: International comps saved the day. McDonald's January comps rose a healthy 2.6% overall. However, U.S. comps actually declined by 0.7%. Comps in Europe and the Asia/Pacific, Middle East, and Africa segments both rose a healthy 4.3%. The company had already disclosed that bad weather in January dragged down its U.S. comps. If that's the case, it seems safe to say that McDonald's watchers should brace themselves, given February's ferocity in some parts of the U.S. so far. While the U.S. showing is a bit of a disappointment, McDonald's said those figures nonetheless managed to outperform the rest of the quick-service segment. It still appears that McDonald's has little to fearfrom fast-food rivals such as Wendy's/Arby's (NYSE: WEN), Burger King (NYSE: BKC), and Yum! Brands (NYSE: YUM). However, all the fast-food players face one common risk: Many consumers are unemployed, and shifting away from meals out in general. BK also had miserable comps in the latest quarter. Given the difficult economic environment, a stock like McDonald's still looks far more appetizing than Cheesecake Factory (Nasdaq: CAKE) or P.F. Chang's (Nasdaq: PFCB). Both trade at an astronomical P/E multiple of 26, versus just 15 for McDonald's. McDonald's is still a good defensive stock for long-term portfolios, given its long-standing stellar performance, its leadership role in fast food, and its allure for bargain-hunting consumers. However, the same question I had after last quarter's resultsstill lingers: Is Mickey D's getting too pricey to buy in right now? I'm a little leery, especially given its signs of weakness in the U.S. Would you take a bite out of McDonald's now, or keep waiting for the fast-food market to heat up? Let us know in the comment box below. This article was originally published as A Domestic Drag at McDonald'son Fool.com Copyright © 2009 The Motley Fool, LLC. All rights reserved. Stock Smackdown: Cramer vs. CAPSBy Rich DupreyFebruary 9, 2010 There's no denying that "Mad Money" host Jim Cramer is entertaining, popular, and passionate. On many occasions, he's even right. So he's smart, funny, and the closest thing to a stock market rock star-- but is he smarter than you?
Cramming for Cramer
Below, we look at some top stocks that Cramer picked and panned during last week's "lightning rounds," and compare them to how the CAPS community sees their future. Stock Lightning Round Show Date Cramer's Rating  CAPS Rating (out of 5) Cisco Monday Bullish **** DryShips (Nasdaq: DRYS) Monday Bearish *** Ebix (Nasdaq: EBIX) Tuesday Bullish ***** Motorola (NYSE: MOT) Tuesday Bearish ** Under Armour Wednesday Bullish **** Caterpillar (NYSE: CAT) Wednesday Bullish **** Burger King Thursday Bearish ** Frontier Communications (NYSE: FTR) Thursday Bearish *** Neutral Tandem (Nasdaq: TNDM) Friday Bearish ***** Stillwater Mining (NYSE: SWC) Friday Bearish ***
Cramer says
The flipside is that those that will benefit from an increase in infrastructure spending here at home could end up doing quite well this year, and that's why Cramer is ultimately bullish on Caterpillar: Yes, the answer is yes … I was going over the chapter where I talk about the great comeback stocks for next year, including Caterpillar, in Getting Back To Even… I think Caterpillar is over done to the down side … it has got over done to the upside … I want to pull the trigger Caterpillar … yes, I am worried about China … I have said that many times … but in the end, Caterpillar is a come back story, and this year will be the infrastructure spend for the United States … buy Caterpillar.
CAPS says
CAT is a very strong, global company. Management is skilled at adding market share in developing markets for its equipment. With strategic agreements in developing countries, CAT is poised to maximize sales through the next two years. Paying a strong dividend with a concern to show return to shareholders, CAT will significantly exceed the S&P 500 through cost-cutting measures taken during the recession and strong management of product lines during the recovery. Earnings should grow to levels higher than before the recession due to these measures, which will cause a parallel rise in share prices.
This Fool says
Much of the Obama administration's stimulus spending package was back loaded so that the bulk of the spending came years after its passage-- only a small percentage was spent in 2009. While I think there's a very real possibility we will see a double dip recession (was the selloff in the market last week the signal it's begun?), as more government projects come on line it will trickle down to Caterpillar. The stock has given back almost 16% after hitting a 52-week high of $64 a share. It's trading at just 14 times 2011's earnings and it has been generating generous amounts of free cash flow. With an enterprise value going for 15 times its FCF it's not rock-bottom, but it's not prohibitively expensive either. I'd have to agree that Caterpillar is worth a look here.
Your say
Motley Fool CAPSis a great place to start your own research on these stocks. Read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made -- all from a stock's CAPS page. Best of all, it's free. This article was originally published as Stock Smackdown: Cramer vs. CAPSon Fool.com Copyright © 2009 The Motley Fool, LLC. All rights reserved. What Bipartisan Health-Care Reform Means for InvestorsBy Brian OrelliFebruary 9, 2010 Mark your calendars, investors; Feb. 25 could change the scope of health care in the U.S. Alternately, it could just be a waste of half of a day in front of the TV. Since Democrats losttheir filibuster-proof majority, making it harder to get health-care reform through the Senate, President Obama has decided to try an alternative route: a bipartisan compromise. Unfortunately, inviting Republicans to the bargaining table, at a meeting which will be televised later this month, may end up being more political theater than actual lawmaking. As much as investors would like to see closure, Feb. 25 may not get us any closer to wrapping up the issue that's been weighing on health-care stocks for months.
Too far apart?
Alternatively, Democrats would probably be just as happy portraying Republicans as obstructionists, with the hope that voters will replace enough Republicans with Democrats in November so that health-care reform can pass next year. That pressure could result in some toned-down version being passed, which would make both sides look like winners, but might hurt investors -- and consumers -- more than the current bloated bills.
Half a fix may be worse than no fix at all
The solution is to get everyone into the risk pool, where the uninsured well people can help pay for the uninsured sick people. With universal health care off the table, that leaves politicians requiring everyone to get insurance through private insurers such as UnitedHealth Group (NYSE: UNH), WellPoint (NYSE: WLP), and Aetna (NYSE: AET). Without mandated health insurance, insurers can't afford to insure people with preexisting conditions. But the government would have to subsidize insurance for many poor people, which means extracting concessions from other areas of health care: drugmakers like Pfizer (NYSE: PFE) and Merck (NYSE: MRK), medical-device makers like Boston Scientific (NYSE: BSX) and Medtronic (NYSE: MDT), and even doctors who cover Medicare patients. Unless we'd like to bloat the deficit even more, we need those concessions. With the entire system intertwined, I'm not sure it will solve anything or help anyone to pass a watered-down version of health-care reform. The worst-case scenario for investors is that politicians try to punish health-care companies with higher taxes, but don't give them extra patients through mandated health insurance.
More uncertainty ahead
Unfortunately, this debate seems far from over. While I hope something productive will come from the bipartisan meeting later this month, I'm not expecting much more than politics as usual. What do you think will happen to health-care reform? Is a bipartisian compromise the best answer? Let us know in the comments box below. This article was originally published as What Bipartisan Health-Care Reform Means for Investorson Fool.com Copyright © 2009 The Motley Fool, LLC. All rights reserved. Enjoy This Bituminous BonanzaBy Christopher BarkerFebruary 9, 2010 When I first purchased shares of Teck Cominco several years ago, I was targeting a base metal play with a golden kicker. It's a completely different company today, and I no longer hold shares ... but golden prospects remain, even if most gold assetsdo not. The rebranded Teck Resources (NYSE: TCK) is now a metallurgical coal miner with a massive base-metal kicker of copper and zinc. Although the move to consolidateownership in the Elk Valley Coal Project from partner Fording in 2008 nearly ended in debt-driven disaster, what doesn't kill Teck only makes it stronger. Teck reported fourth-quarter profit this week of $384 million, rebounding from a prior-year loss that long-term investors would just as soon forget. Notching new company records for both fourth-quarter and full-year revenue, Teck's business is booming. Once its $773 million sale of the Waneta Dam closes in February, Teck will have reduced its net-debt-to-net-debt-plus-equity ratio from prior death-defying levels to a reasonable 26%. The company's financial foundation has been rebuilt, cash flow is pouring in at a rate of more than $650 million (in the last quarter), and the company is poised to reap substantial rewards from the very deal that cost it an arm and a leg. Even operating at reduced capacity, following the deep paralysis in global trade markets that persisted into early 2009, Elk Valley's production of coveted coking coal raised coal's proportion of Teck's total revenue from 36% in 2008 to 46% in 2009. That proportion, I suspect, is heading higher still for 2010, as the company restores capacity to satisfy the virtually unquenchable demand emanating from China and the Pan-Asian economies. After producing just 18.9 million tonnes of coal in 2009, Teck is rolling out a boisterous 25% to 30% production increase for 2010 to target 25 million tonnes. That would imply a sizeable revenue surge in a stable price environment, but as I explained last week, the met coal market is sending powerful signals of further pricing strength looming for as far as the eye can see. Far more than mere tidal undulation, the transformations ongoingin the global coal markets represent a sea change that will permanently alter the dynamics of the commodities markets worldwide.
Can you hear me now?
Monster resource grabsby Chinese entities like CNOOC (NYSE: CEO) together constituted one of the most overlooked stories of 2009, and I am concerned to see so little fanfare over the continuation of this trend into 2010. The Market Vectors Coal ETF (NYSE: KOL) is down more than 22% from its January peak, offering Fools a lower-risk entry into the sector. I know old habits die hard, and it's easy to get swept up in the latest gizmofrom Apple (NYSE: AAPL) or the encouraging revivalof Ford (NYSE: F). But I strongly urge Fools not to ignore the investment opportunities that await in coal and other industrial commodities as a result of increasingly insatiable Pan-Asian demand. This article was originally published as Enjoy This Bituminous Bonanzaon Fool.com Copyright © 2009 The Motley Fool, LLC. All rights reserved. | ||
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