Analyzing An Acquisition Announcement

When one company acquires another there is a possibility that the deal will be a tremendous success, or a catastrophic failure. The key for investors is to be able to decipher the news reports and then to determine whether the deal warrants the investment in, or the immediate sale of the purchasing company. Read on for some suggestions for analyzing acquisition deals.

Gauge Cash Needs
Some companies are well capitalized. They have all the money they need for the foreseeable future to grow their businesses and remain competitive. However, many companies are not so lucky. They routinely have to tap the equity or debt markets, or seek bank loans in order to obtain funds.

For this reason, investors should read what management is saying about the company it is about to acquire, or has recently acquired. Is cash needed to fund future growth, add employees, or to build additional office space? If the company being acquired is a public company, review its most recent 10-Q or 10-K.

Check the cash position. If the company is losing money, try to determine its burn rate. This will enable you to gauge if and when the company will need additional funds.

If you think the company will need a cash infusion try to determine how it will be supplied. Does the acquiring company have ample cash to fund the acquired company's growth with no problem, or will a potentially dilutive stock offering have to be completed in order to secure funds? These are all questions that should be answered in order to determine the deal's impact on the acquiring company's financials.

You should also remember that unless a company receives an offer it simply can't refuse, companies that are on solid financial footing typically don't sell at all.

Assess Debt Loads
One of the worst things that a company can do is to acquire an enterprise that has a huge volume of debt that's scheduled to come due at some later date. After all, increased debt loads can be a tremendous distraction to the acquiring company, particularly in the troughs of a business cycle.

That said, in some instances, large volumes of debt can provide a significant opportunity for the suitor. How? Through refinancing! In fact, during the late 1990s and early 2000s, a number of high-profile casinos scooped up smaller players, and saved a ton of money for their shareholders by refinancing debt that had originally been issued at high coupon rates.

In short, lofty debt loads should send up a red flag. That is, unless the suitor has deep pockets/collateral, and a reputation as a low credit risk so as to refinance the obligations at a materially lower rate.


Consider Liability/Litigation Risk
When a deal is announced, or even suspected, and both the buyer and the seller are known, investors should immediately go to the seller's proxy statement and 10-K to review Management's Discussion & Analysis, as well as any content about risks or disclosures. The idea is to try to determine whether the suitor will be acquiring a huge potential liability.

Look for lawsuit details, or guarantees the company has offered to secure the debt of third parties. Read the fine print. You'll be happy you did.

Almost every public company at one point or another will be sued. For the most part, a large number of the suits will be settled without anyone declaring bankruptcy. However, if a number of suits are pending, and management's description of the situation is ominous, consider steering clear of the situation.

Ponder the Details of Integration
Obviously, when the acquisition is consummated, there is no need for two chief executives or two chief financial officers. In addition, there may be no need for some facilities because of these redundancies. As such, investors need to determine how long a successful integration will take and at what cost.

There will be some costs associated with the combination of two companies, particularly if two sales forces are merging. However, if the costs seem excessive, or if management is suggesting that the deal won't add to earnings for a year or more, consider bailing! Remember, there are plenty of things that can go wrong in a year's time. Ideally, you want to be on the lookout for acquisitions that are immediately accretive to earnings, or that can be soon after the deal is inked.

Determine the Severance Costs
In conjunction with the elimination of redundancies, layoffs are likely to occur. Many former employees may be entitled to pension benefits and a host of other costly payroll items. This is just one (of the many) reasons why consolidation in unionized industries isn't more popular - the cost of paying benefits to thousands of laid-off union members would be prohibitively expensive.

If a company that you're interested in announces an acquisition, be on the lookout for how much severance costs will amount to, and whether they can be booked in a short period of time. If it appears that these costs may go on for a number of years or consume a significant percentage of earnings, consider heading for the exits.

Bottom Line
Acquisitions can present tremendous opportunities or major disasters for investors. It is up to the investor to determine how a stock will be affected and, if necessary, get out before it's too late.

Top Insurance Companies To Buy Right Now

In an interview to CNBC-TV18 he said that they should keep one month's contingency reserve and also purchase a personal health insurance. "Ideally get into an investment or get into an asset class which is liquid and divisible," he further added.

Below is the edited script of his interview with CNBC-TV18"s Latha Ventakesh and Reema Tendulkar

Q: Over the past many years we have seen several young unmarried women getting into a career and are earning a good salary. What would you advice all these young women who are earning money, where should they be investing their income?

A: There are a few things they should keep in mind. They have no dependents i.e they could be living with their family, their own parents, so there aren�� any family expenses they need to incur. At such times, they should be taking some basic steps first and then the intense ones.

First they should keep aside one month�� contingency reserve. Whatever is their personal expense, they should keep that aside. Secondly, if their employer is not providing health insurance they then can purchase health insurance on their own.

Top Insurance Companies To Buy Right Now: Citizens Inc (CIA)

Citizens, Inc. (Citizens), incorporated on November 8, 1977, is an insurance holding company serving the life insurance needs of individuals in the United States. The Company operates in three segments: Life Insurance, Home Service and Other Non-insurance Enterprises. Its core insurance operations include issuing and servicing the United States Dollar-denominated ordinary whole life insurance and endowment policies predominantly to high net worth, high income foreign residents, principally in Latin America and the Pacific Rim, through independent marketing consultants; ordinary whole life insurance policies to middle income households concentrated in the midwest and southern United States through independent marketing consultants, and final expense and limited liability property policies to middle and lower income households in Louisiana, Arkansas, and Mississippi through employee and independent agents in its home service distribution channel.

Life Insurance

The Company�� Life Insurance segment issues ordinary whole life insurance domestically and in United States Dollar-denominated amounts to foreign residents. These contracts are designed to provide a fixed amount of insurance coverage over the life of the insured. Additionally, endowment contracts are issued by the Company, which are principally accumulation contracts that incorporate an element of life insurance protection. The Company operates the segment through its subsidiaries: CICA Life Insurance Company of America (CICA) and Citizens National Life Insurance Company (CNLIC).

The Company offers several ordinary whole life insurance and endowment products designed to meet the needs of its non-United States policy owners. Its domestic life insurance products focus primarily on living needs and provide benefits focused toward accumulating money for the policyowner. The Company�� life insurance products are principally designed to address the insured�� concern about outliving his or her monthly income,! while at the same time providing death benefits. The primary purpose of its product portfolio is to help the insured create capital for needs, such as retirement income, children's higher education funds, business opportunities, emergencies and health care needs.

Home Service Insurance

The Company operates in the Home Service market through its subsidiaries Security Plan Life Insurance Company (SPLIC) and Security Plan Fire Insurance Company (SPFIC), and focus on the life insurance needs of the middle and lower income markets, primarily in Louisiana, Mississippi and Arkansas. Its home service insurance products consist primarily of small face amount ordinary whole life and pre-need policies, which are designed to fund final expenses for the insured, primarily consisting of funeral and burial costs.

Other Non-Insurance Enterprises

Other Non-insurance Enterprises includes Computing Technology, Inc., which provides data processing services to the Company, and Insurance Investors, Inc., which provides aviation transportation to the Company. This segment also includes the results of Citizens, Inc., the parent Company.

Top Insurance Companies To Buy Right Now: W.R. Berkley Corporation(WRB)

W. R. Berkley Corporation, an insurance holding company, operates as commercial lines writers in the property casualty insurance business primarily in the United States. The company operates in five segments: Specialty, Regional, Alternative Markets, Reinsurance, and International. The Specialty segment underwrites third-party liability risks, primarily excess, and surplus lines, including premises operations, professional liability, commercial automobile, products liability, and property lines. The Regional segments provide commercial insurance products to small-to-mid-sized businesses, and state and local governmental entities primarily in the 45 states of the United States. The Alternative Markets segment develops, insures, reinsures, and administers self-insurance programs and other alternative risk transfer mechanisms. This segment offers its services to employers, employer groups, insurers, and alternative market funds, as well as provides a range of fee-based servic es, including consulting and administrative services. The Reinsurance segment engages in the underwriting property casualty reinsurance on a treaty and a facultative basis, including individual certificates and program facultative business; and specialty and standard reinsurance lines, and property and casualty reinsurance. The International segment offers personal and commercial property casualty insurance in South America; commercial property casualty insurance in the United Kingdom and continental Europe; and reinsurance in Australia, Southeast Asia, and Canada. The company was founded in 1967 and is based in Greenwich, Connecticut.

Best Penny Stocks To Watch Right Now: ING Groep NV (ING)

ING Groep N.V. (ING), incorporated in 1991, is a global financial institution offering banking, investments, life insurance and retirement services to meet the needs of the customers. The Company�� segments include banking and insurance. Banking segment includes retail Netherlands, retail Belgium, ING direct, retail central Europe (CE), retail Asia, commercial banking (excluding real estate), ING real estate and corporate line banking. Insurance segment includes insurance Benelux, insurance central and rest of Europe (CRE), insurance United States (US), Insurance US closed block VA, insurance Asia/Pacific, ING investment management (IM) and corporate line insurance. In February 2011, the Company divested its real estate investment operation ING Real Estate Investment Management (ING REIM) to CB Richard Ellis Group Inc. In June 2011, the Company sold Clarion Partners. In July 2011, ING announced the completion of the sale of Clarion Real Estate Securities. During the year ended December 31, 2011, the Company divested its interests in ING Car Lease and ING IM Philippines. In February 2012, Capital One Financial Corp. acquired ING Direct business in the United States from the Company.

In June 2011, ING had completed the sale of its interest in China�� Pacific Antai Life Insurance Company Ltd. In June 2011, ING announced the completion of the sale of real estate investment manager of its United States operations, Clarion Partners, to Clarion Partners management in partnership with Lightyear Capital LLC. In October 2011, ING announced that it had completed the sale of REIM�� Asian and European operations to CBRE Group Inc. In December 2011 ING completed the sale of its Latin American pensions, life insurance and investment management operations.

Retail Netherlands

Retail Banking reaches its individual customers through Internet banking, telephone, call centers, mailings and branches. Using direct marketing methods, it is a provider of current account services an! d payments systems to provide other financial services, such as savings accounts, mortgage loans, consumer loans, credit card services, investment and insurance products. Mortgages are offered through a tied agents sale force and direct and intermediary channels. ING Bank Netherlands operates through a branch network of approximately 280 branches. It offers a range of commercial banking activities and also life and non-life insurance products. It also sells mortgages through the intermediary channel.

Retail Belgium

ING Belgium provides banking, insurance (life, non-life) and asset management products and services to meet the needs of individuals, families, companies and institutions through a network of local head offices, 773 branches and direct banking channels (automated branches, home banking services and call centers). ING Belgium also operates a second network, Record Bank, which provides a range of banking products through independent banking agents and credit products through a multitude of channels (agents, brokers, vendors).

ING Direct

ING Direct offers a range of financial products, such as savings, mortgages, retail investment products, payment accounts and consumer lending products. It operates in Canada, Spain, Australia, France, Italy, Germany, Austria and the United Kingdom. In June 2011, ING Group announced the sale of ING Direct USA to Capital One Financial Corporation.

Retail Central Europe

Retail Central Europe has a presence in Poland, and Romania and Turkey. ING in Poland is an Internet bank. During 2011, ING Bank Turkey launched the Orange account, the variable savings product. ING in Turkey also launched a mobile phone banking application. ING Bank Romania carried out its Internet banking site, Home��ank. In September 2011, a mobile version of the Home��ank Website was introduced.

Retail Asia

Retail Banking has a presence in Asian markets of India, China and Thailand. As o! f Decembe! r 31, 2011, the Company had 44% interest in ING Vysya and 30% interest in TMB Bank in Thailand. Bank of Beijing (BoB), in which ING has the largest single interest (16.07%) is a commercial bank in China. ING provides principally risk management and retail banking to BoB.

Commercial Banking

ING Commercial Banking supports the banking needs of its corporate and institutional clients to invest both retail and commercial bank customer deposits. It is a commercial bank in its home markets in the Benelux, as well as in Germany, Central and Eastern Europe. In addition to the banking services of lending, payments and cash management and treasury, it also provides solutions in other areas, including specialized and trade finance, derivatives, corporate finance, debt and equity capital markets, leasing, factoring and supply chain finance. Payments and Cash Management (PCM) and General Lending are its some of the product lines. Structured Finance (SF) is a specialist commercial lending business, providing loans to support capital intensive investments and working capital. It is managed in three groups: the Energy, Transport and Infrastructure Group; the Specialized Financing Group; and International Trade and Export Finance. Leasing and Factoring (L&F) provides financial and operating leasing services for a range of equipment, as well as receivables financing and other factoring solutions for commercial banking clients. The Financial Markets (FM) is the global business unit that manages ING�� financial markets trading and non-trading activities. FM is managed along three business lines: ALCO manages the interest rates exposures arising from the traditional banking activities, Strategic Trading Platform incorporates the primary proprietary risk taking units, and Clients and Products is the primary customer trading facilitation business line.

Real Estate

During 2011, Real Estate Finance (REF) maintained its credit portfolio. Real Estate Development (ING RED) and! Real Est! ate Investment Management (ING REIM) has a controlled wind down of activities.

Insurance Benelux

Duirng 2011, Nationale-Nederlanden introduced bank pension savings products and annuities. ING Life Belgium introduced a new Universal Life product. Nationale-Nederlanden also received a license from the Dutch Central Bank to launch a defined contribution DC company pension product PPI in Europe. NN Services introduced a processing and information technology system (business process management layer) for several legacy lines of retail Life businesses. NN Services IT manages all the closed book business of Nationale-Nederlanden. ING�� life insurance products in the Benelux consist of a range of traditional, unit-linked and variable annuity policies written for both individual and group customers. ING is also a provider of (re-insured) company pension plans in the Netherlands.

NG Benelux��non-life products, mainly in the Netherlands, include coverage for both individual and commercial/group clients for fire, motor, disability, transport and third party liability. Nationale-Nederlanden has also a central product manufacturing service for property and casualty insurance, which has developed products for ING Bank in Belgium and ING Bank in the Netherlands. ING offers a range of disability insurance products and complementary services for employers and self-employed professionals (such as dentists and general practitioners).

Insurance Central and Rest of Europe

Insurance Central and Rest of Europe has life insurance companies in Hungary, Poland, the Czech and Slovak Republics, Romania, Bulgaria, Greece, Spain and Turkey. It has pension funds in Poland, Hungary, the Czech and Slovak Republics, Bulgaria, Romania and in Turkey. ING offers a range of individual endowment, unit linked, term and whole life insurance policies designed to meet specific customer needs. It also has employee benefits products, as well as pension funds, that manage individu! al retire! ment accounts for individuals. The latter comprise both mandatory and voluntary retirement savings.

Insurance United States (Excluding US Closed Block Va)

ING Insurance US offers retirement services (primarily defined contribution plans), life insurance, fixed annuities, employee benefits, mutual funds, and broker-dealer services in the United States. ING Insurance US operates four businesses: Retirement Plans, Individual Retirement, Individual Life and Employee Benefits. ING Insurance US�� Retirement Plans business is a contribution providers, which offers a range of retirement solutions to all sizes and types of employers, including businesses for-profit ranging from start-ups to large corporations, public and private school systems, higher education institutions, state and local governments, hospitals and healthcare facilities, and not-for-profit organizations. ING Insurance US�� Retirement Plans business is a provider of defined contribution (DC) retirement plans in the United States based on assets under management and administration.

Insurance US Closed Block Va

ING US Closed Block VA consists of variable annuities issued in the United States that are primarily owned by individuals and were designed to address the demand for tax-advantaged savings, retirement planning, and wealth-protection. These annuity contracts were sold in the United States, primarily through independent third party distributors, including wirehouses and securities firms, independent planners and agents and banks.

Insurance Asia/Pacific

ING Insurance Asia/Pacific (IAP) is a provider of life insurance products and services. It is a life insurer in the region, with nine life operations in eight markets. IAP has ip operations in Japan and South Korea, operates a nt business in Malaysia, and is well in China, Hong Kong, Macau, India and Thailand. In April 2011, IAP, together with Public Bank Berhad and Public Islamic Bank Berhad, launched a joint ! venture i! n Malaysia, ING PUBLIC Takaful Ehsan Berhad, which will develop Takaful insurance products. In June 2011, IAP completed the sale of its 50% interest in Pacific-Antai Life Insurance Company Limited (PALIC).

The business units of IAP offer select types of life insurance, wealth management, and retail products and services. These include annuities, endowment, disability/morbidity insurance, unit linked/universal life, whole e, participating life, group life, accident and health, term life and employee benefits. In Hong Kong non-life insurance products (including medical, motor, fire, marine, personal accident and general liability) are also offered.

Insurance Latin America

ING completed the sale of its pensions, life insurance and investment management operations on December 29, 2011. These operations were in Chile, Colombia, Mexico, Peru and Uruguay.

ING Investment Management

ING IM is an investment manager of ING Group with activities in Europe, the Americas, Asia-Pacific and the Middle East. In October 2011, ING IM sold ING IM Australia. ING IM provides a range of actively-managed strategies, investment vehicles and advisory services in all major asset classes and investment styles. It delivers a range of investment strategies and services to ING�� global network of businesses and third-party clients.

Advisors' Opinion:

• [By WALLSTCHEATSHEET.COM]

  ING is a financial services company providing service to consumers and companies around the world. The company is being forced to sell its South Korean life insurance unit by European regulators. The stock is now trading near highs for the year and looks poised to continue. Over the last four quarters, earnings have been mixed while revenues have been decreasing, however, investors in the company have been pleased with the company’s recent announcement. Relative to its peers and sector, ING has been an average year-to-date performer. Look for ING to OUTPERFORM.

• [By Jon C. Ogg]

  ING Groep N.V. (NYSE: ING) was raised to Overweight from Equal Weight at Morgan Stanley.

  Pandora Media Inc. (NYSE: P) was downgraded to Market Perform from Outperform at Raymond James, based on valuation after the stock went over $21 recently. Stifel Nicolaus also downgraded shares to Hold from Buy. These calls are after earnings, and the stock is down about 6% so far on Friday.

• [By Vaughan Scully, ,]

  Three of the fund's top 10 holdings��NG Groep (ING), BNP Paribas (Paris:BNP) (US:BNPQY), and Credit Suisse Group (CS)��re European financials that came into the fund beginning in early 2012, when the team began to sense the pessimism regarding the European banking sector was too extreme.

Top Insurance Companies To Buy Right Now: Principal Financial Group Inc(PFG)

Principal Financial Group, Inc. provides retirement savings, investment, and insurance products and services worldwide. The company?s Retirement and Investor Services segment provides retirement savings and related investment products and services, including a portfolio of asset accumulation products and services primarily to small and medium-sized businesses and individuals in the United States. This segment offers products and services to businesses for defined contribution pension plans, including 401(k) and 403(b) plans, defined benefit pension plans, nonqualified executive benefit plans, and employee stock ownership plan consulting services; and annuities, mutual funds, and bank products and services to the employees of its business customers and other individuals. Principal Financial Group?s Principal Global Investors segment offers a range of equity, fixed income, and real estate investments, as well as specialized overlay and advisory services to institutional inve stors. The company?s Principal International segment offers retirement products and services, annuities, mutual funds, institutional asset management, and life insurance accumulation products in Brazil, Chile, China, Hong Kong SAR, India, Indonesia, Malaysia, Mexico, Singapore, and Thailand. Principal Financial Group?s U.S. Insurance Solutions segment offers individual life insurance, as well as specialty benefits in the United States. Its individual life insurance products include universal and variable universal life insurance and traditional life insurance; and specialty benefit products comprise group dental and vision insurance, individual and group disability insurance, and group life insurance, as well as fee-for-service claims administration and wellness services. The company was founded in 1879 and is based in Des Moines, Iowa.

Top Insurance Companies To Buy Right Now: AmTrust Financial Services Inc (AFSI)

Amtrust Financial Services, Inc., incorporated on November 7, 1990, is a holding company. The Company is a multinational specialty property and casualty insurer focused on generating consistent underwriting profits. The Company operates in four business segments: small commercial business, specialty program and personal lines reinsurance. The Company transacts business through 11 insurance company subsidiaries: Technology Insurance Company, Inc. (TIC), Rochdale Insurance Company (RIC), Wesco Insurance Company (WIC), Associated Industries Insurance Company, Inc. (AIIC), Milwaukee Casualty Insurance Company (MCIC), Security National Insurance Company (SNIC), AmTrust Insurance Company of Kansas, Inc. (AICK) and AmTrust Lloyd�� Insurance Company of Texas (ALIC). In January 2013, the Company acquired First Nonprofit Companies, Inc. In February 2013, the Company's subsidiary acquired Car Care Plan (Holdings) Limited (CCPH) from Ally Insurance Holdings, Inc.

Small Commercial Business

Small Commercial Business segment provides workers��compensation to small businesses that operate in low and medium hazard classes, such as restaurants, retail stores, physicians and other professional offices, and commercial package and other property and casualty insurance products to small businesses. The Company is authorized to write its Small Commercial Business products in all 50 states. The Company distributes its policies through a network of over 8,100 select retail and wholesale agents who are paid commissions based on the annual policy premiums written. Commercial package products provide a range of insurance to small businesses, including commercial property, general liability, inland marine, automobile, workers��compensation, and umbrella coverage.

The Company maintains Small Commercial Business property and casualty claims operations in several of its domestic offices and the commercial package claims operation is separated into four processing units: casualty, propert! y, cost-containment/recovery and a fast-track physical damage unit. As of December 31, 2012, its Small Commercial Business property and casualty claims were approximately 61% automobile and 13% property and inland marine with the remaining 26% involving general liability and umbrella losses.

Specialty Risk and Extended Warranty

The Company��Specialty Risk and Extended Warranty segment provides coverage for consumer and commercial goods and custom designed coverages, such as accidental damage plans and payment protection plans offered in connection with the sale of consumer and commercial goods in the United States and Europe, and certain niche property, casualty and specialty liability risks in the United States and Europe, including general liability, employers��liability and professional and medical liability. specialty risk business primarily covers, such as legal expenses in the event of unsuccessful litigation; property damage for residential properties; home emergency repairs caused by incidents affecting systems, such as plumbing, wiring or central heating; latent defects that materialize on real property after building or completion; payment protection to insureds if they become unable to meet financial obligations under finance contracts; guaranteed asset protection (GAP) to cover the difference between an insurer�� settlement and the asset value in the event of a total loss, and general liability, employers��liability, public liability, negligence of advisors and liability of health care providers and medical facilities.

The Company's extended warranty business covers selected consumer and commercial goods and other risks, including personal computers; consumer electronics, such as televisions and home theater components; consumer appliances, such as refrigerators and washing machines; automobiles (excluding liability coverage); furniture, and heavy equipment. The Company also serve as a third party administrator to provide claims handling and ca! ll center! services to the consumer products and automotive industries in the United States and Canada. It underwrites the specialty risk coverage on a coverage plan-level basis, which involves substantial data collection and actuarial analysis, as well as analysis of applicable laws governing policy coverage language and exclusions.

Specialty Program

The Company�� Specialty Program segment provides workers��compensation, package products, general liability, commercial auto liability, excess and surplus lines programs and other specialty commercial property and casualty insurance to a narrowly defined, homogeneous group of small and middle market companies. The type of risk covered by this segment is similar to the type of risk in Small Commercial Business but also covers, to a small extent, certain higher risk businesses. The coverage is offered through accounts with various agents to multiple insureds. Policyholders in this segment primarily include industries, such as retail, wholesale, service operations, artisan contracting, trucking, light and medium manufacturing, habitational and professional employer organizations. As of December 31, 2012, the Company underwrote 77 programs through 44 independent wholesale and managing general agents. Workers��compensation insurance consists approximately 33% of this business during the year ended December 31, 2012.

Personal Lines Reinsurance

The Company�� Personal Lines Reinsurance Segment has a 20% participation in the Personal Lines Quota Share, by which it receive 10% of the net premiums of the personal lines business. The Personal Lines Quota Share provides that the reinsurers, severally, in accordance with their participation percentages, will receive 50% of the net premium of the GMACI Insurers and assume 50% of the related net losses.

Bristol-Myers Squibb: Another Brick In The Wall

Bristol-Myers Squibb (BMY) has released disappointing results from its Phase 3 trial of Yervoy (ipilimumab) in previously-treated castration-resistant prostate cancer patients. The study's primary endpoint of overall survival did not reach statistical significance.

(click to enlarge)

Despite the negative findings, Bristol-Myers shares ended the week at $43.56, close to its peak for the week. Bristol-Myers has risen by 34% since the beginning of the year.

Yervoy (ipilimumab), a monoclonal antibody approved in more than 40 countries for the treatment of patients with unresectable or metastatic melanoma, was launched in the U.S. in March 2011 and in Europe in July 2011.

Yervoy, discovered by Medarex which Bristol-Myers bought for $2.4 billion in July 2009, is also being studied in Phase III trials for other indications including adjuvant melanoma and non-small cell lung cancer. Bristol-Myers owns Yervoy's patent which will not expires till 2022 in the U.S. and 2020 in the EU.

(click to enlarge)

Yervoy realized global revenue of $360 million in 2011 and almost doubled that amount to $706 million in 2012, its first full year on the market. Despite recent slowdown in quarterly sales growth, Yervoy realized $462 million in the first half of the year and is on track to blockbuster status in 2014.

Prostate Cancer Study Details

The double-blind, randomized clinical trial comparing Yervoy to placebo following radiation in patients with advanced metastatic castration-resistant prostate cancer (mCRPC) who have received prior treatment with docetaxel had overall survival as its primary endpoint.

Despite the fact that overall survival did not reach statistical significance,! anti-tumor activity was observed across some efficacy endpoints, including progression free-survival. Treatment-related adverse events were common, with most being immune-related, and were managed using standard protocols.

According to Brian Daniels, senior vice president, global development and medical affairs at Bristol-Myers Squibb, the company is still committed to continuing its development of Yervoy in prostate cancer despite being disappointed that the primary endpoint of overall survival was not met.

Bristol-Myers' Patent Cliff

Bristol-Myers lost patent exclusivity for Plavix, its lead product, in 2012 and with it $4.4 billion (64%) of its net sales. The company is also expected to lose patent exclusivity for Abilify, its second largest selling product, in 2014.

In February 2013, Bristol-Myers was hit with surprise patent loss of Baraclude when Teva won a court case that allows it to sell a generic version of the hepatitis B fighter. Baraclude generated $240 million in U.S. sales last year.

Bristol-Myers Valuation

(click to enlarge)

Back in June, we published an article titled "Bristol-Myers Squibb: The Untold Story Of Led Zeppelin" where we detailed Bristol-Myers' product portfolio, highlighted potential risks due to loss of patent exclusivity and benchmarked its valuation ratios to a couple of its peers. We opined that Bristol-Myers might be richly valued. Share price trended slightly lower, hovered around $42 for a while and, since last week, started rising back again.

CompanyP/EP/SYieldCap.Bristol-Myers & Peers

Bristol-Myers	53.1	4.1	3.2	$72B
Eli Lilly - (LLY)	11.9	2.7	3.7	$60B
Merck - (MRK)	28.5	3!	! 3.6	$140B
Pfizer - (PFE)	19.3	3.2	3.4	$189B

When revisiting the benchmarks, three month on, Bristol-Myers still does not fare well in terms of price-to-earnings and price-to-sales ratios. Although it is the lowest in the group in terms of current dividend yield, 3.2 yield is still respectable. The question is whether the company will be able to maintain it going forward.

During its second quarter conference call, Bristol-Myers' management revised full-year 2013 EPS guidance downward to an EPS range of $1.70 to $1.78, from $1.78 to $1.88 at the begining of the year. They have also estimated total sales for 2013 at $16.3 billion, mid-range.

Missing the primary end point in the prostate cancer trials is not a big deal but it is clearly a setback for Yervoy in that indication and a dent in the armor of a potential blockbuster.

We still believe that at the current $72 billion valuation, 4.4 times 2013 sales, Bristol-Myers is pricey, especially with the coming patent expiry of Abilify in 2014.

We do like Bristol-Myers, it is a solid company with a great history, however, if you are planning an entry into the stock you better wait for a more favorable valuation.

Source: Bristol-Myers Squibb: Another Brick In The Wall

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. (More...)

What Makes a Successful Retirement Plan? Advisors Disagree

For the third-quarter Professional Outlook Survey, Russell Investments took a closer look at retirement income planning.

The report, released Thursday, found that one of the main challenges to planning is the way advisors measure success. It seems no one can agree on the best way to do that.

More than a third of advisors said they measure retirement plan success based on how much principal is preserved after distributions. Twenty percent said they look at the portfolio’s projected rate of return and 15% compare the current net present value of projected assets to liabilities.

Russell argued that the best way to approach the problem is for advisors to stay engaged with their clients. “The conversations around retirement income are important, ongoing and often require best guesses. That’s why quality analysis on the part of the advisor is so important,” the report says.

More than 80% of advisors say they’re using a total return approach for their clients, compared with just 7% who said they’re relying on dividends and interest for their clients’ income.

Interestingly, 12% of respondents said they had an “other” retirement strategy. Russell said respondents’ individual comments describing those strategies included bucket strategies, master limited partnerships, covered calls and a mix of yield-seeking strategies.

“Focusing on seeking yield might seem simpler, but it may not deliver the results clients need in the current low-rate environment. What’s more, reaching for yield in these low-yield times can be a dangerous exercise,” Russell noted in the report.

Mutual funds were by far advisors favorite product for retirement income, with 78% saying they had created a diversified portfolio of these funds for their clients. Almost half said they were using variable annuities and 48% used dividend-paying equity funds or dividend-paying stocks. About a quarter use bond funds or ladders.

In general, advisors are more optimistic about the economy than their clients are. More than 80% said they were optimistic about markets over the next three years, up from 75% last quarter. Their clients’ optimism, however, has remained relatively flat, dropping one point to 31%.

Furthermore, 37% of advisors said their clients had unrealistic expectations about their retirement. Two-thirds of those said their clients didn’t have a good picture of their spending in retirement and 55% said their clients didn’t understand how their spending today would affect their retirement. Nearly half said their clients were listening to nonprofessional sources that were giving them the wrong idea about retirement.

The topics advisors are discussing with their clients have remained relatively the same as well. Advisors are sticking to portfolio rebalancing (54%) and performance (38%) and running out of money in retirement (33%) in client meetings. Advisors also noted that more than half of clients are still worried about market volatility and government policies, and 46% are focusing on their portfolio’s performance.

“Conversations among advisors and investors have remained fairly consistent over the last several quarters. It’s possible that interest in global events could tick higher next quarter as events in Syria continue to unfold and Germany holds elections in September,” the report said. “We expect the markets to digest whatever happens, short of an all-out war, and move on. Our strategists don’t see a lasting market impact there.”

---

Read more from ThinkAdvisor:

Retirement no buzz word for young, middle-aged investors

Young and middle-aged investors are largely focused on building assets, saving for college and planning for insurance, so firms marketing themselves as experts in retirement are missing the mark.

In addition, mass market financial planning shops such as NestWise LLC and LearnVest, with their focus on fees rather than asset-based pricing, are in a prime position to scoop up these investors.

While many planning and advisory firms have trained their gaze on retirees who have built their nest eggs and are preparing to draw down on their assets, there's still plenty of potential in younger markets.

Hearts & Wallets LLC, a retirement trends research firm, estimates that 77 million householders are younger than 64 and aren't within five years of retirement. These people, along with their $15.4 trillion in investible assets, could host some great opportunities. Within that group, some 29 million are between 40 to 53 and hold some $7.2 trillion in investible assets.

The deterrent to tapping that market, however, is the fact that these households are still building their wealth and have different needs from their retired counterparts. For instance, these individuals can't afford asset-based fees just yet, and their interests include not only saving for retirement but also managing basic financial planning needs, according to Chris Brown, a principal at Hearts & Wallets.

10 Best High Tech Stocks To Invest In 2014

Indeed, 55% of the firms polled were uncertain whether they should focus on retirement income or on the needs of a younger family. In fact, of all the polled firms, only 8% offered a dedicated focus on the needs of younger investors.

Mr. Brown noted that the messages many of the polled companies were sending to their prospective clients — particularly over the Internet — missed the target for investors who are still accumulating wealth.

“The websites of the large brokerages or banks don't necessarily position products and services for younger investors with concerns other than retirement,” Mr. Brown said. Sites like NestWise and LearnVest, however, “are doing a better job of addressing the broader scope of a younger family's needs.”

Largely, those needs are centered on college savings, building an emergency fund and insurance planning. Further, those clients would be better served by either charging a fee based on the services or a flat fee.

“Unfortunately, a lot of the large firms use asset-based pricing,” said Mr. Brown. “! Many new entrants can charge either based on assets or a flat fee, linking the solutions to the need.”

LearnVest, for instance, charges a one-time set-up fee based on the tier of service the client seeks. Clients then pay a monthly fee and can access a planner via e-mail or phone. NestWise also charges an initial planning fee, followed by a monthly fee, in exchange for access to an adviser who can guide clients through plain-vanilla financial topics, including life insurance decisions and 401(k) investments.

Making affordable financial planning accessible to emerging investors doesn't necessarily mean that firms ought to banish these prospects to their call centers.

“We think young people want both online interaction, as well as in person [meetings],” Mr. Brown said. “They want access to web-based tools, but they also want to sit down with a professional and have that integration of advice and technology.”

For its research, Hearts & Wallets polled 22 financial services firms, a mix of 401(k) providers, asset managers, insurers and broker-dealers.

UniPixel (UNXL) Just Needs One More Nudge (and maybe not even that)

My enthusiasm for UniPixel Inc. (NASDAQ:UNXL) hasn't exactly been veiled; I penned bullish comments on the stock back on July 10th and August 12th. Unfortunately, my enthusiasm hasn't borne fruit - UNXL is up a little since my initial call a month and a half ago, but we've yet to see the explosive bullish move I figured was on the way. BUT, that may be about to change... like, today.

If you're not familiar with the company, UniPixel makes tablet and smartphone touchscreens. And to be more specific, it makes superior touchscreens, in that they consume less power, and cost less to make. Clearly it's a leap forward for consumer technology companies, though given the length of time (and headache) it took for UNXL to come up with the technology, anything less than a breakthrough would have been disappointing.

The underlying corporate details are secondary at this point, however. More than anything, UNXL is a trade, and it's on the verge of becoming trade-worthy.

Even the last time I looked at UniPixel Inc. in early July we had already seen horizontal support verified right around $12.00. In fact, it was that support and the almost-cross above the 20-day moving average line (blue) that compelled me in the first place. Though it took a while - and took another retest of the floor at $12.00 - UNXL finally started to roll higher by early August. In fact, it had pushed its way above the 20-day and 50-day moving average line (purple) by the 12th, prodding my second bullish call on the stock.

As you can see, though shares have made a profitable move in the meantime, it wasn't a straight-line move; UNXL pulled back to retest that 20-day and 50-day moving averages a week and a half ago. It was that retest and subsequent snap-back that sealed the bullish deal in my view, especially seeing that the bullish volume behind that move was growing.

With all of that being said, there's just one more hurdle that needs to be cleared before the fireworks really start.... the 200-day moving average line (green) needs to be crossed.

The undertow is already bullish; it has been since early August. If we can just clear the 200-day average at $19.30 though, the pace should accelerate. It matters right now, because UniPixel Inc. shares are currently priced at $19.30, and rising. Today could be the day. In fact, while waiting for a clean break above the 200-day moving average line would be prudent, waiting may also leave too much money on the table. The gambler side of you may want to go ahead and dive in, based on how everything has materialized up to this point.

If you'd like to get more trading ideas and insights like this, be sure to become a subscriber to the daily SmallCap Network e-newsletter. You'll get stock picks, market calls, and more. It's free!
 

Sell Coal Stocks — King Coal Gets Dealt Its Final Blow

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It finally looks like old King Coal will be losing its crown as one of America's major producers of electric power. For investors, that means the time to bow out of coal producers could be at hand.

The fossil fuel’s had a hard time going the last few years as natural gas has eaten its lunch in the cost department. Add in new hard-hitting regulations and it's easy to see why shares of coal producers have tanked, mines have been closed and a few producers have even filed for bankruptcy.

Backing President Obama's promise to tackle climate change, the Environmental Protection Agency (EPA) recently announced strict new limits on newly constructed power plants — a plan designed to cut greenhouse-gas emissions. The new EPA rules build on the already proposed regulations that have caused the coal industry to effectively wither and could stop new coal-fired plants from being built all together.

The core of these new regulations will put a cap on just how much carbon a power plant can throw off.

For a coal-fired plant smaller than 850 megawatts, the facility will be limited to just 1,100 pounds per megawatt hour. That’s a tall order considering the average advanced plant in this size — fit with scrubbers and other carbon reducing equipment — puts out about 1,600 pounds per megawatt. Older coal fired plants emit around 1,700 to 1,900 pounds per megawatt.

In order to reduce the amount toxic output, utilities are going to have to use a process called carbon capture and storage (CCS) — a process that is very expensive hasn’t yet been used on a commercial scale. American Electric Power (AEP) recently shut down tests on a CCS projects due to cost overruns, while Southern's (SO) first large-scale CCS plant under construction is facing local opposition and nearly $1 billion in cost overruns.

The huge drop in allowed output, along with the need to use an unproven technology in new plants, isn’t sitting too well with various power producers and coal producers. Lawsuits and fighting on Capitol Hill are quickly becoming the norm for sector. Several industry lobbyist groups have already proposed ways to fight to the new regulations.

However, all of these efforts still won’t save coal.

Despite being a huge hindrance to the coal sector, the new regulations may not really matter. That's because natural gas continues to make building a new coal plant uneconomical. Even without adding in CCS facilities to a coal-fired plant, the cost is significantly higher than a comparable natural gas plant.

Already fracking and abundant natural gas has changed the economics of producing power for utilities. Experts now predict that natural gas will need to rise to nearly $10 million British thermal units — roughly three times the current price — before coal really begins to make sense for power producers. Interestingly enough, new natural gas-fired plants already met the proposed EPA rules.

According to the Energy Information Administration (EIA), none of the new power plants set to open or expand this year are using coal. Believe or not, there are actually more proposed nuclear facilities on the docket than coal plants. Overall, the EIA expects that U.S. coal consumption to remain essentially flat until 2030, before dropping off a cliff.

That certainly hurts the chances of coal stocks surviving long-term.

Already, the broad Market Vectors Coal ETF (KOL) is down about 21% year-to-date, while individual companies have fared much worst. Peabody Energy Corp. (BTU) — which is the largest U.S. producer — has fallen from more than $70 a share back in April 2011 to less than $19 a share today. Meanwhile, chief rival Arch Coal (ACI) has seen its stock price fall from $35 to less than $5 a share in the same time frame.

While it may be tempting to snag up bargains in the industry, the continued assault against coal and the continued abundance of natural gas make coal stocks clear stocks to sell or avoid, depending on your current position.

As of this writing, Aaron Levitt did not hold a position in any of the aforementioned securities.

Buy a beer share, invest in a local brewery

Big Alice Brewing is located in an old Bible warehouse in Queens, N.Y.; the bottles are all hand-corked with hemp ties.

NEW YORK (CNNMoney) "Community-supported beer" doesn't just mean buying a pint at your local watering hole. For a growing number of upstart breweries, it's how they're getting their operations off the ground.

Queens' Big Alice Brewing -- located in an old Bible warehouse near the water -- opened its doors in June and is selling beer shares as a way to finance the brewery. Inspired by the concept of community-supported agriculture, in which people buy directly from farmers, CSB subscribers pay $200 and receive two large bottles of beer each month for six months.

Other breweries use different price points, time frames and methods of delivery, but the concept is the same: Buyers commit to a certain amount of beer for a certain amount of time, and the brewery gets guaranteed cash up front. Combined with more traditional methods of financing, it's an attractive way to solicit investment -- and get locals involved with the brewery.

Big Alice's three cofounders initially invested about $35,000 to buy the equipment and convert the space, which they began work on in August 2012. They started brewing in January, and five months later had 20 batches of beer. The brewery used its first round of beer shares -- which started in July and runs through December -- to finance much of the raw materials like grain, yeast, bottles and corks.

With flavors like salted caramel, purple potato trippel, and chamomile ale, subscribers were promised 12 different beers over the course of their share. Two-thirds of the first 90 shares went to friends and family and the remaining 30were snapped up on the first day they were offered to the public.

At Seattle's NW Peaks, Kevin Klein offers mountainBeers subscribers a 64-oz. growler for about $11 a month. The model provided roughly $10,000 in the first few months -- enough for supplies, rent and some additional equipment -- and also allowed NW Peaks to "brew to the number of subscribers," Klein said. "We could make sure that we had enough beer and enough product instead of killing ourselves to make more when we didn't need it."

Chicago's Begyle Brewing started distributing kegs to local bars in October 2012, but the brewery's goal was always to sell directly to customers. They used "every facet of financing" to get off the ground, according to cofounder Kevin Cary. Investments from the three owners, friends and family, bank loans -- even a Kickstarter campaign to buy a specialized growler filler.

With the $18,000 raised from Kickstarter, they hope to have the retail space up and runnin! g by mid-November. Once the space is operational, they'll launch their CSB, offering a certain number of growler fills a month for subscribers.

"If we have 200 members all paying at once, that's a nice cash infusion," said Cary. "If we can handle more than 200 members, we can leverage that to secure a bank loan or another piece of equipment that will help us grow the brewery."

That's how Big Alice sees its beer share program. Cofounder Scott Berger said they are already looking to expand their brewing system, which would offer 21 times the capacity they currently have. They'll need more investment and capital to actually buy the equipment, but he says they can use the next round of shares to buy the raw materials -- which will run about $5,000 per brew day, or $20,000 a month.

Currently, the beer shares make up two-thirds of their sales (they sell the remaining bottles to the public on Friday evenings. But they plan to sell to local bars and restaurants, as well as specialty beer shops, with the expansion. They also hope that two of the founders (who are the brewers) will eventually be able to start to work at Big Alice full-time.

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But even as they grow, all three breweries plan to continue with the community-supported financing.

"It's a way for our members to be a part of our growth," said Begyle's Cary. "It makes you part of the team in a way and you get to be there and watch the brewery grow."

SEC Votes To Disclose The Wage Gap

A new rule many CEOs are likely dreading is one step closer to being finalized at the SEC.

The Securities and Exchange Commission today unveiled a new controversial rule that would disclose the wage gap between CEOs of public companies and that of its workers.

The SEC was split on the proposal voting 3-2 on the rule that would allow anyone to see the pay gap between employees and the CEO.

CEO and named executive officers are already required to make public their compensation in annual SEC filings, but this rule would also require companies to calculate and make public the median pay of its workers.

That new disclosure isn't sitting well with many who say the new pay disclosure is burdensome.

Critics of the rule say collecting such data about employee compensation each year is overwhelming. For instance, they argue, global companies may have compensation administration in each country it operates in making it difficult and costly to gather the necessary information.

But the SEC's proposed rule today is somewhat less burdensome than originally planned.

"The rules proposed would not require a specific methodology, but instead would provide a company with the flexibility to determine the median and calculate the annual total compensation for that employee in a way that best suits its particular circumstances," said SEC chair Mary Jo White in a prepared remarks.

That means companies could come up with their own methodology to come up with the median pay. A company could use a sampling of employees rather than collect the information for its entire workforce.

Here's the pay ratio requirement from the SEC:

The median of the annual total compensation of all its employees except the CEO. The annual total compensation of its CEO. The ratio of the two amounts.

But that's still too much information say critics.

SEC Commissioner Daniel M. Gallagher voted against the rule today saying the rule has "nothing to do with the SEC's mission and everything to do with the politics of not letting a serious crisis go to waste."

He added in remarks, "Gimmicks like these don't belong in corporate filings.  The agency would sanction issuers who acted so "creatively" in other areas of their 10K or proxy disclosure."

However, proponents of the rule say the more information a company discloses the better. That's particularly true for investors who would now have yet another way to measure how a company spends its money.

SEC commissioner Luis A. Aguilar notes that large public company CEOs were paid an average of 204 times the compensation of rank-and-file workers in their industries. "By comparison, [the study] estimated that the average CEO was paid about 20 times the typical worker's pay in the 1950s, with that multiple rising to 42-to-1 in 1980, and to 120-to-1 in 2000," he says in his remarks.

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CEO pay has been a hot issue since the financial crisis which drew greater attention to outsized compensation packages.

Since the crisis more shareholders, particularly those invested in big Wall Street banks, are paying closer attention to executive pay.

Rules like "Say On Pay" which allow shareholders to vote against pay packages of CEOs have received more attention.

Goldman Sachs Resumes Coverage on Discount Retailers (COST, TGT, WMT)

On Monday, Goldman Sachs announced that it has resumed coverage on several discount retail giants.

The firm resumed coverage of Costco Wholesale Corporation (COST) with a “Neutral” rating and a $124 price target. This price target suggests an 8% increase from the stock’s current price of $114.35.

Target Corporation (TGT) has been given a “Neutral” rating and $71 price target, which suggests an 11% upside from the stock’s current price of $63.29.

Analysts have put a “Buy” rating on Wal-Mart Stores, Inc. (WMT) with a price target of $83. This price target suggests a 12% rise from the stock’s current price of $72.99.

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An analyst from the firm commented: “We approach this space with our eyes wide open about the notion of a price-transparent world and the inevitable ascent of ecommerce, with a preference for firms that offer customers value, execute with a lean cost structure, and are shielded from Amazon (Nasdaq: AMZN) growth.”

“We believe that Wal-Mart offers a solid foundation and a modest but durable growth profile that is undervalued by the market. We appreciate its value proposition and cost structure, and believe that its rural store base mitigates the threat from ecommerce incursions.”

Regarding Costco, he said, “We believe COST offers the best business model of the discounters, but resume coverage with a Neutral rating given our expectation that earnings growth will decelerate in the coming periods,’ added the analyst.

Costco shares were mostly flat during pre-market trading Monday. The stock is up 16% YTD.

Target shares were mostly flat during pre-market trading Monday. The stock is up 7% YTD.

Wal-Mart shares were up 36 cents, or 0.50%, during pre-market trading Monday. The stock is up 6% YTD.

The Bottom Line

Shares of Costco Wholesale Corporation (

Best Blue Chip Stocks To Buy Right Now

Click the chart for more stock market data.

NEW YORK (CNNMoney) The S&P 500 is once again close to a record high, as investors welcomed the withdrawal of Larry Summers from the race to become next chairman of the Federal Reserve.

The blue chip index rose 0.6% Monday, ending just below the 1,700 mark. Earlier in the day, the broad index was just a handful of points below its all-time peak of 1,709 from the beginning of August. The Dow Jones industrial average rose 0.8%, while the Nasdaq ended in the red, as a drop in shares of Apple weighed on the tech-heavy index.

Bond investors were elated too. The 10-year Treasury yield fell to 2.87% as investors rushed to buy long-term bonds. The dollar sold off against major currencies -- including the euro and the British pound.

Best Blue Chip Stocks To Buy Right Now: McDonald's Corporation(MCD)

McDonald?s Corporation, together with its subsidiaries, operates as a worldwide foodservice retailer. It franchises and operates McDonald?s restaurants that offer various food items, soft drinks, coffee, and other beverages. As of December 31, 2009, the company operated 32,478 restaurants in 117 countries, of which 26,216 were operated by franchisees; and 6,262 were operated by the company. McDonald?s Corporation was founded in 1948 and is based in Oak Brook, Illinois.

Advisors' Opinion:

• [By Brian Gorban]

   Fast food giant and world-renowned company McDonald’s (NYSE: MCD) is undoubtedly a name you’ve heard of, as “the golden arches” are ubiquitous--and with good reason: The company operates over 33,000 restaurants in 119 countries. With over $27 billion in revenue and a market capitalization near $90 billion, McDonald’s is simply a juggernaut and should continue to be a beneficiary of the global growth story happening predominately in the “BRIC” (Brazil, Russia, India, and China) countries in the years and decades to come.

  Of course, those countries have not been spared the current economic carnage and that has caused the company to miss the past two quarters’ consensus estimates, but that has created a buying opportunity. With the stock trading not far above its $83.31 52-week low, McDonald’s is now yielding an attractive 3.5% dividend yield, and with a low 54% payout ratio, look for the dividend to not only be safe but be raised in the near future. Add in the fact that the company has a comparatively and historically low 16x forward and trailing P/E, and I think MCD should serve investors well for the long-term while one can wait and happily collect the nice 3.5% dividend.

Best Blue Chip Stocks To Buy Right Now: Colgate-Palmolive Company(CL)

Colgate-Palmolive Company, together with its subsidiaries, manufactures and markets consumer products worldwide. It offers oral care products, including toothpaste, toothbrushes, and mouth rinses, as well as dental floss and pharmaceutical products for dentists and other oral health professionals; personal care products, such as liquid hand soap, shower gels, bar soaps, deodorants, antiperspirants, shampoos, and conditioners; and home care products comprising laundry and dishwashing detergents, fabric conditioners, household cleaners, bleaches, dishwashing liquids, and oil soaps. The company offers its oral, personal, and home care products under the Colgate Total, Colgate Max Fresh, Colgate 360 Advisors' Opinion:

• [By ChuckCarlson]

  Colgate-Palmolive Company (CL), together with its subsidiaries, manufactures and markets consumer products worldwide. The company has raised distributions for 48 years in a row. The 10 year annual dividend growth rate is 12.40%/year. The last dividend increase was 9.40% to 58 cents/share. Analysts are expecting that Colgate Palmolive will earn $5.52/share in 2012. I expect that the quarterly dividend will be raised to 64 cents/share in 2012. Yield: 2.60%

Top 5 Medical Stocks To Watch For 2014: Visa Inc.(V)

Visa Inc., a payments technology company, engages in the operation of retail electronic payments network worldwide. It facilitates commerce through the transfer of value and information among financial institutions, merchants, consumers, businesses, and government entities. The company owns and operates VisaNet, a global processing platform that provides transaction processing services. It also offers a range of payments platforms, which enable credit, charge, deferred debit, debit, and prepaid payments, as well as cash access for consumers, businesses, and government entities. The company provides its payment platforms under the Visa, Visa Electron, PLUS, and Interlink brand names. In addition, it offers value-added services, including risk management, issuer processing, loyalty, dispute management, value-added information, and CyberSource-branded services. The company is headquartered in San Francisco, California.

Advisors' Opinion:

• [By Charles Sizemore]

  One of the “big picture” economic themes that I expect to play out over 2011 and beyond is the secular shift to a global cashless society.?Though the process is well on its way in the U.S. and Europe, roughly 40% of all transactions are still made with cash and paper checks according to Barron’s.

  This means that even in “boring” developed markets, there is ample room for growth in electronic payments. And there is no better company to benefit from this trend than credit card giant Visa (NYSE: V).

• [By Victor Mora]

  Visa facilitates transactions for consumers, companies, governments, and other entities around the world. The company recently reported earnings that have sat really well with investors. The stock has been steadily trending higher and is now trading near all-time high prices. Over the last four quarters, earnings and revenue figures have been increasing which has really pleased investors. Relative to its strong peers and sector, Visa has been an average year-to-date performer. Look for Visa to OUTPERFORM.

• [By Ed Carson]

  The holiday season was hit or miss for many retailers, but indicators are that consumers were using plastic. Visa shares have risen steadily for the past seven months, with a strong 6% gain so far in 2013. Even in America, consumers continue to shift more from cash and checks to credit and debit cards. Overseas, consumers are adopting plastic, while some are bypassing cards and going straight to mobile payments. Visa wants to make sure it's part of that mobile solution.

  Visa earnings growth has decelerated for the past two quarters from 30% to 24% to 21%. Revenue growth in the latest quarter picked up to 15%, matching the best gains of the past two years.

• [By Rebecca Lipman]

   Operates retail electronic payments network worldwide. Market cap of $82.48B. EPS growth (5-year CAGR) at 15%. According to Morgan Stanley: "Global penetration of electronic payments remains low with 85% of the world's transactions still cash-based, leaving ample runway to support healthy growth prospects through (at least) 2015."

Best Blue Chip Stocks To Buy Right Now: Chevron Corporation(CVX)

Chevron Corporation, through its subsidiaries, engages in petroleum, chemicals, mining, power generation, and energy operations worldwide. It operates in two segments, Upstream and Downstream. The Upstream segment involves in the exploration, development, and production of crude oil and natural gas; processing, liquefaction, transportation, and regasification associated with liquefied natural gas; transportation of crude oil through pipelines; and transportation, storage, and marketing of natural gas, as well as holds interest in a gas-to-liquids project. The Downstream segment engages in the refining of crude oil into petroleum products; marketing of crude oil and refined products primarily under the Chevron, Texaco, and Caltex brand names; transportation of crude oil and refined products by pipeline, marine vessel, motor equipment, and rail car; and manufacture and marketing of commodity petrochemicals, plastics for industrial uses, and fuel and lubricant additives. It a lso produces and markets coal and molybdenum; and holds interests in 13 power assets with a total operating capacity of approximately 3,100 megawatts, as well as involves in cash management and debt financing activities, insurance operations, real estate activities, energy services, and alternative fuels and technology business. Chevron Corporation has a joint venture agreement with China National Petroleum Corporation. The company was formerly known as ChevronTexaco Corp. and changed its name to Chevron Corporation in May 2005. Chevron Corporation was founded in 1879 and is based in San Ramon, California.

Advisors' Opinion:

• [By Victor Mora]

  Chevron is an oil and gas bellwether that provides essential energy products and services to consumers and companies worldwide. The company recently won a bid to explore�for shale gas in western Lithuania. The stock is currently bouncing off an upward sloping trendline and may continue to do so. Over the last four quarters, earnings and revenues have been mixed, which has produced mixed feelings among investors in the company. Relative to its peers and sector, Chevron has been a year-to-date performance leader. Look for Chevron to OUTPERFORM.

• [By Teresa Rivas]

  Shares of Chevron (CVX) were up 0.7% in recent trading, on the heels that it has reached a settlement with Brazilian prosecutors.

  Chevron and Transocean (RIG) were named in the $20 billion lawsuit over a 2011 oil spill off the southeast coast of the country, and both parties are expected to sign off on the deal today, reports The Wall Street Journal. Criminal charges against executives have already been dropped.

  The move comes at a delicate time for Brazil��hile many energy companies are eager to tap the nations resources and appetite, some criticized the government of overacting to the spill; the settlement should calm some ruffled feathers a month before the country will auction off rights to what ��s believed to be one of the largest oil fields ever discovered in deep ocean waters,��notes the Journal.

  However, Transocean didn�� get any bump from the news, and was trading down 1.5% at recent check.� Both names have lagged the index in the past year: While the S&P 500 has gained nearly 15% in the last 12 months, Chevron is up 5.7% and Transocean is up just 1.7%.

  Other oil majors like Exxon (XOM) and ConocoPhillips (COP) are also up today.

  Update: Reuters is reporting that Chevron� is considering bid for stake in a Brazil offshore oil prospect (via Briefing.com).

Best Blue Chip Stocks To Buy Right Now: Philip Morris International Inc(PM)

Philip Morris International Inc., through its subsidiaries, engages in the manufacture and sale of cigarettes and other tobacco products in markets outside of the United States. Its international product brand line comprises Marlboro, Merit, Parliament, Virginia Slims, L&M, Chesterfield, Bond Street, Lark, Muratti, Next, Philip Morris, and Red & White. The company also offers its products under the A Mild, Dji Sam Soe, and A Hijau in Indonesia; Diana in Italy; Optima and Apollo-Soyuz in the Russian Federation; Morven Gold in Pakistan; Boston in Colombia; Belmont, Canadian Classics, and Number 7 in Canada; Best and Classic in Serbia; f6 in Germany; Delicados in Mexico; Assos in Greece; and Petra in the Czech Republic and Slovakia. It operates primarily in the European Union, Eastern Europe, the Middle East, Africa, Asia, Canada, and Latin America. The company is based in New York, New York.

Advisors' Opinion:

• [By Louis Navellier]

  Philip Morris International (NYSE:PM) is involved with the manufacture and sale of cigarettes and other tobacco products in over 180 countries across the globe. Year to date, PM stock is up 16%, compared to a loss of nearly 2% for the Dow Jones.

Should You Consider General Motors Stock If Big Banks Are?

With shares of General Motors (NYSE:GM) trading around $36, is GM an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

General Motors designs, manufactures, and markets cars, crossovers, trucks, and automobile parts worldwide. The company markets its vehicles primarily under the Buick, Cadillac, Chevrolet, GMC, Opel, Holden, and Vauxhall brand names, as well as under the Alpheon, Jiefang, Baojun, and Wuling brand names. It further sells cars and trucks to dealers for consumer retail sales as well as to fleet customers, including daily rental car companies, commercial fleet customers, leasing companies, and governments.

General Motors stock is being sold by Ontario and Canadian governments to Bank of America (NYSE:BAC) and RBC Capital Markets (NYSE:RY). The governments are selling 30 million common shares in the Detroit automaker in a deal estimated to be around $1.1 billion. According to Canadian paper The Globe and Mail, the Canadian government is phasing out the support it gave to Detroit carmakers during the financial crisis.

T = Technicals on the Stock Chart Are Strong

General Motors stock has been rising over the last several quarters. The stock is trading near highs for the year and looks poised to continue. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, General Motors is trading above its rising key averages which signal neutral to bullish price action in the near-term.

(Source: Thinkorswim)

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

	Implied Volatility (IV)	30-Day IV Percentile	90-Day IV Percentile
General Motors Options	28.11%	56%	55%

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

	Put IV Skew	Call IV Skew
October Options	Flat	Average
November Options	Flat	Average

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

On the next page, let’s take a look at the earnings and revenue growth rates and the conclusion.

E = Earnings Are Mixed Quarter-Over-Quarter

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

	2013 Q2	2013 Q1	2012 Q4	2012 Q3
Earnings Growth (Y-O-Y)	-16.67%	-3.33%	6.49%	-13.59%
Revenue Growth (Y-O-Y)	3.88%	-2.32%	3.47%	2.33%
Earnings Reaction	-1.10%	3.01%	0.03%	0.70%

General Motors has seen decreasing earnings and increasing revenue figures over the last four quarters. From these numbers, the markets have been pleased with General Motors’s recent earnings announcements.

P = Weak Relative Performance Versus Peers and Sector

How has General Motors stock done relative to its peers Ford Motor (NYSE:F), Toyota Motor (NYSE:TM), Tesla Motor (NASDAQ:TSLA), and sector?

	General Motors	Ford Motor	Toyota Motor	Tesla Motor	Sector
Year-to-Date Return	26.19%	35.37%	36.89%	383.60%	28.02%

General Motors has been a poor relative performer, year-to-date.

Conclusion

General Motors continues to change its business as it looks to entice companies and consumers with its new and improved vehicles. Bank of America and RBC Capital Markets are acquiring a significant amount of shares in the company, which may help boost investors’ confidence. The stock has been rising in the last several quarters and is now trading near highs for the year. Over the last four quarters, earnings have been decreasing while revenues have been increasing which has pleased investors. Relative to its peers and sector, General Motors has been a weak year-to-date performer. Look for General Motors to OUTPERFORM.

Is Whole Foods a Safer Way to Invest?

With shares of Whole Foods Market (NASDAQ:WFM) trading at around $88.13, is WFM an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

C = Catalyst for the Stock's Movement

Whole Foods dominates the organic and natural foods retail space. Growth has been strong through the years, which has led to the ambitious goal of opening 1,000 stores in the United States. That might seem like a good idea now, but the economic environment is likely to get worse before it gets better – organically. If Whole Foods opens this many stores and the consumer weakens, then the company will likely find itself in a difficult predicament. It would be extremely difficult for Whole Foods to meet earnings expectations due to consumer weakness. Investors might want to make the argument that these are mostly affluent shoppers. However, that argument doesn't hold up. Look at 2008 as an example. If that type of environment presents itself again, would investors feel comfortable owning stock in Whole Foods? If many Whole Foods shoppers are affluent, then they likely have investments and/or they're own businesses. That being the case, if things head south, their incomes will decline. They will then look for cheaper shopping alternatives. This scenario has already played itself out a few years ago.

Whole Foods is still seeing comps growth, but the growth is slowing. Last quarter's results were disappointing, and a cautious outlook was given. All that said, there are many positives for Whole Foods, which include:

Shareholder-friendly Offers great customer experience Highly innovative Analysts love the stock: 16 Buy, 11 Hold, 0 Sell Consistent improvements in revenue and earnings on annual basis Quality debt management Cash-rich Focus on quality Strong management International growth potential Strong margins (compared to peers)

Whole Foods also has an extremely high employee satisfaction score of 3.5 of 5 on Glassdoor.com. It should also be noted that an impressive 74 percent of employees would recommend the company to a friend. The company culture is excellent.

Analysts had originally expected FY2013 revenue of $13.2 billion, but Whole Foods announced that it expects revenue to come in between $12.9 billion and $13 billion.

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Now let's take a look at some comparative numbers. The chart below compares fundamentals for Whole Foods, Safeway Inc. (NYSE:SWY), and The Kroger Co. (NYSE:KR). Whole Foods has a market cap of $16.33 billion, Safeway has a market cap of $5.58 billion, and Kroger has a market cap of $17.94 billion.

	WFM	SWY	KR
Trailing   P/E	33.24	8.81	12.44
Forward   P/E	25.92	9.64	11.22
Profit   Margin	4.06%	1.45%	1.55%
ROE	14.68%	20.96%	36.87%
Operating   Cash Flow	$961.72 Million	$1.56 Billion	$2.83 Billion
Dividend   Yield	0.90%	3.00%	1.80%
Short   Position	1.90%	25.70%	2.10%

 

Let's take a look at some more important numbers prior to forming an opinion on this stock.

E = Equity to Debt Ratio Is Strong   

The debt-to-equity ratio for Whole Foods is stronger than the industry average of 1.00. It's also much stronger than the debt-to-equity ratios for its peers.

	Top 5 Dividend Stocks To Watch For 2014 Debt-To-Equity	Cash	Long-Term Debt
WFM	0.07	$926.00 Million	$25.00 Million
SWY	2.06	$295.00 Million	$6.17 Billion
KR	2.11	$238.00 Million	$8.88 Billion

 

T = Technicals Are Mixed    

Whole Foods has performed extremely well over a three-year time frame, but that momentum has faded.

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	1 Month	Year-To-Date	1 Year	3 Year
WFM	1.83%	-2.87%	8.69%	134.10%
SWY	-10.78%	30.87%	17.44%	7.45%
KR	3.95%	33.10%	50.73%	62.32%

 

At $88.13, Whole Foods is trading above its 50-day SMA, but below its 100-day SMA and 200-day SMA.

50-Day   SMA	86.18
100-Day   SMA	89.02
200-Day   SMA	91.95

 

E = Earnings Have Been Strong                    

Earnings and revenue have consistently improved on an annual basis.

	2008	2009	2010	2011	2012
Revenue   ($)in   billions	7.95	8.03	9.01	10.11	11.70
Diluted   EPS ($)	0.82	0.85	1.43	1.93	2.52

 

When we look at the last quarter on a year-over-year basis, we see improvements in revenue and earnings. There were also improvements in revenue and earnings on a sequential basis.

	12/2011	3/2012	6/2012	9/2012	12/2012
Revenue   ($)in   billions	3.39	2.67	2.73	2.91	3.86
Diluted   EPS ($)	0.65	0.64	0.63	0.60	0.78

 

Now let's take a look at the next page for the Trends and Conclusion. Is this stock an OUTPERFORM, a WAIT AND SEE, or a STAY AWAY?

T = Trends Do Not Support the Industry

The consumer is more health-conscious than in the past, and gas prices have come down. Therefore, it might seem as though trends support the industry. However, as mentioned earlier, what happens when incomes for affluent shoppers decline? Many will still shop at Whole Foods, but a decent percentage of them will search for more affordable options. Nobody is rich enough to stop appreciating bargains. While Whole Foods shoppers aren't likely to switch to Wal-Mart Stores Inc. (NYSE:WMT), many middle-income shoppers will switch from their current supermarket to Wal-Mart, which will give Wal-Mart the most potential in this space in a difficult economic environment.

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Conclusion

If the economy is actually recovering and can maintain momentum on its own, then Whole Foods is a landslide winner. But that would be a very risky bet. This might be bucking the trend, but the following rating is based on logic in relation to the Main Street economy as well as a focus on capital preservation.

Is Salesforce a Risky Investment?

With shares of Salesforce.com (NYSE:CRM) trading at around $40.95, is CRM an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

C = Catalyst for the Stock's Movement

Understanding the Salesforce story is relatively simple. Salesforce has managed to consistently increase revenue on an annual basis, but it has difficulty delivering profits. Below are Q1 revenue numbers.

Subscription & Support up 28.5 percent year-over-year Professional Services & Other up 25.3 percent year-over-year

Geographically:

Americas up 30.0 percent Europe up 38.0 percent Asia up 7.0 percent

Up to this point, one might wonder why shorts are all over this stock. After all, as long as there is revenue growth, there is potential. However, in Q1, gross margin dropped 160 bps to 76.6 percent, and operating expenses increased 28.6 percent. The biggest expenses have been R&D, G&A, and sales and marketing.

Another issue investors have with Salesforce is creative accounting. Investors have a reason to oppose executives being paid via stock-based compensation, but it's also ironic that there are creative accounting concerns when the company can't deliver consistent profits. This is a rarity.

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The chart below shows some basic fundamentals for Salesforce, Oracle Corporation (NASDAQ:ORCL), and International Business Machines Corporation (NYSE:IBM).

	CRM	ORCL	IBM
Trailing P/E	N/A	15.89	14.32
Forward P/E	64.97	11.69	11.32
Profit Margin	-9.81%	28.46%	16.05%
ROE	-14.92%	24.29%	82.86%
Operating Cash Flow	806.87M	13.72B	19.32B
Dividend Yield	N/A	0.70%	1.80%
Short Position	68.20%	1.10%	1.60%

It’s obvious that Saleforce can’t hold a candle to Oracle and IBM on a fundamental level. Let's take a look at some more important numbers prior to forming an opinion on this stock.

T = Technicals Are Mixed

Salesforce has outperformed Oracle and IBM over a three-year time frame, which is impressive. However, Salesforce has been the weakest performer year-to-date.

	1 Month	Year-To-Date	1 Year	3 Year
CRM	-2.44%	-2.80%	24.74%	84.76%
ORCL	1.57%	2.70%	32.89%	54.98%
IBM	3.42%	9.74%	12.13%	72.20%

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At $40.95, Salesforce is trading below its averages.

50-Day SMA	42.85
200-Day SMA	42.35

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E = Equity to Debt Ratio Is Normal

The debt-to-equity ratio for Salesforce is higher than the industry average of 0.30, but it still qualifies as normal.

	Debt-To-Equity	Cash	Long-Term Debt
CRM	0.69	2.10B	1.69B
ORCL	0.45	33.41B	19.75B
IBM	1.74	12.06B	33.40B

E = Earnings Have Been Poor

Earnings are the biggest problem for Salesforce. The annual trend is not good. Revenue can assist a stock’s performance for a considerable amount of time, especially in a bull market, but once the party ends, investors and traders will opt for consistently profitable companies.

Fiscal Year	2009	2010	2011	2012	2013
Revenue ($) in millions	1,077	1,306	1,657	2,267	3,050
Diluted EPS ($)	0.09	0.16	0.12	-0.02	-0.48

Looking at the last quarter on a year-over-year basis, revenue increased but the loss widened. A similar pattern played itself out on a sequential basis.

Quarter	Apr. 30, 2012	Jul. 31, 2012	Oct. 31, 2012	Jan. 31, 2013	Apr. 30, 2013
Revenue ($) in millions	695.47	731.65	788.40	834.68	892.63
Diluted EPS ($)	-0.04	-0.02	-0.39	-0.04	-0.12

Now let's take a look at the next page for the Trends and Conclusion. Is this stock an OUTPERFORM, a WAIT AND SEE, or a STAY AWAY?

Conclusion

Salesforce is trading at 65 times forward earnings, which doesn't leave much margin for error. The stock is down in what has been a strong market year-to-date, guidance was underwhelming, competition is likely to increase, there are currency headwinds, and margins and net income have seen consistent declines since 2010.