Top 10 Small Cap Stocks To Watch For 2014

Heckmann (NYSE: HEK  ) isn't Heckmann anymore.

Late last week, the fracking fluids specialist announced that as a result of a positive vote of its shareholders at the recent annual meeting, henceforth, the company shall be known as Nuverra Environmental Solutions, So on the plus side, investors looking for news about Heckmann no longer have to remember "is it one 'n' or two in "Heckmann?" On the other hand, they'll now need to ask "is it one 'r' or two in Nuverra?"

The new name is said to be derived from "references to 'new,' 'green,' 'earth,' and 'time.'" The company continued: "Nuverra reflects the broader focus of the Company's united operating units and a fundamental dedication to supporting sustainable energy generation and American energy independence."

Top 10 Small Cap Stocks To Watch For 2014: Hot Topic Inc.(HOTT)

Hot Topic, Inc., together with its subsidiaries, operates as a mall- and Web-based specialty retailer in the United States. The company operates Hot Topic and Torrid store concepts, as well as an e-space music discovery concept, ShockHound. Its Hot Topic stores sell music/pop culture-licensed merchandise, including tee shirts, hats, posters, stickers, patches, postcards, books, novelty accessories, CDs, and DVDs; and music/pop culture-influenced merchandise comprising women?s and men?s apparel and accessories, such as woven and knit tops, skirts, pants, shorts, jackets, shoes, costume jewelry, body jewelry, sunglasses, cosmetics, leather accessories, and gift items for young men and women primarily between the ages of 12 and 22. The company?s Torrid stores sells casual and dressy jeans and pants, fashion and novelty tops, sweaters, skirts, jackets, dresses, hosiery, shoes, intimate apparel, and fashion accessories for various lifestyles for plus-size females primarily betw een the ages of 15 and 29. As of July 30, 2011, it operated 636 Hot Topic stores in 50 states, Puerto Rico, and Canada; 145 Torrid stores; and Internet stores, hottopic.com and torrid.com. The company was founded in 1988 and is headquartered in City of Industry, California.

Advisors' Opinion:

• [By Wyatt Research]

  The teen retailer reported its same-store sales rose 0.4 percent, with same-store sales at its Torrid chain for overweight teens rising 7 percent. Analysts were expecting a decline.

Top 10 Small Cap Stocks To Watch For 2014: Petroquest Energy Inc(PQ)

PetroQuest Energy, Inc. operates as an independent oil and gas company. It engages in the acquisition, exploration, development, and operation of oil and gas properties in Oklahoma, Arkansas, and Texas, as well as onshore and in the shallow waters offshore the Gulf Coast Basin. As of December 31, 2009, the company had estimated proved reserves of 1,931 thousand barrels of oil and 167,361 million cubic feet equivalent of natural gas. It owned working interests in 9 net producing oil wells and 277 net producing gas wells. PetroQuest Energy was founded in 1983 and is headquartered in Lafayette, Louisiana.

Advisors' Opinion:

• [By SmallCap Investor]

  Shares traded sharply higher after the oil and gas explorer issued an operational update that revealed details of a discovery at its La Cantera site in Louisiana. Raymond James analysts bumped the stock rating to market perform based on the new findings and an improving balance sheet.

Top 5 Heal Care Companies To Own In Right Now: Sify Technologies Limited(SIFY)

Sify Technologies Limited provides enterprise and consumer Internet services primarily in India. The company offers various corporate network/data services comprising e-commerce and network connectivity solutions, such as end-to-end services network, application, and security services; voice origination and termination services; co-location and managed hosting services; and system integration services for data centre build, hardware distribution, security solutions, and turnkey projects. It also provides application services, including SLEMS and Microsoft Exchange messaging platforms; I-test for online assessment and LiveWire, which enable management of training processes across the organization; document management system for the management of documents electronically; and Forum, a forward supply chain solution. In addition, the company operates e-Ports that offer browsing, chat, email, gaming, utility bill payment, travel ticketing, hotel booking, mobile recharge, Intern et telephony, and online share trading services; and portals, which provide news, views, reviews, interactions, and services in the areas of movies, sports, finance, food, videos, astrology, online games, shopping, and travel, as well as offers content offerings and broadband services. Further, it provides infrastructure management services, such as network management, datacenter and helpdesk outsourcing, desktop and storage outsourcing, IT security outsourcing, LAN and WAN outsourcing, database and telecom outsourcing, and application monitoring and management services to automotive, chemical, media, and financial enterprises; and virtualization design, integration, and deployment services for servers, storage, networks, and end user clients. Sify has approximately 1,278 e-Ports in 200 towns and cities; and serves 1,06,000 broadband subscribers through 1500 cable TV Operators. The company, formerly known as Sify Limited, was founded in 1995 and is based in Chennai, India. Advisors' Opinion:

• [By Wyatt Research Staff]

  Shares of SIFY skyrocketed last week after the company announced a new partnership with Saudi telecom. SIFY will provide ICT services to the Middle East's largest telecom carrier.

  Shares of the Indian-based internet and network services have doubled over the past four months.

Top 10 Small Cap Stocks To Watch For 2014: KongZhong Corporation(KONG)

KongZhong Corporation, together with its subsidiaries, provides wireless interactive entertainment, media, and community services to mobile phone users in the People's Republic of China. It also involves in the development, distribution, and marketing of consumer wireless value-added services, including wireless application protocol, multimedia messaging services, short messaging services, interactive voice response services, and color ring back tones. In addition, it offers interactive entertainment services, such as mobile games, pictures, karaoke, electronic books, mobile phone personalization features, entertainment news, chat, and message boards; and through Kong.net offer news, community services, games, and other interactive media and entertainment services; and sells advertising space in the form of text-link, banner, and button advertisements. Further, the company develops and publishes mobile games, including downloadable mobile games and online mobile games cons isting of action, role-playing, and leisure games. As of December 31, 2009, it had a library of approximately 300 internally developed mobile games. Additionally, it develops online games; and provides consulting and technology services, as well as media and net book services. The company was formerly known as Communication Over The Air Inc. and changed its name to KongZhong Corporation in March 2004. KongZhong Corporation was founded in 2002 and is headquartered in Beijing, the People?s Republic of China

Advisors' Opinion:

• [By Wyatt Research Staff]

  As a Chinese ADR, KONG is the leading provider of 2.5G wireless interactive entertainment, media and community services in terms of revenue to customers of company China Mobile. Institutions snatched up shares at an alarming rate with an increase of 26.7% in institutional ownership over the past three months.

  A consensus of analysts expect earnings to increase by 16.9% in 2011 and 19.6% in 2012. Company earnings are estimated to increase by 62.1% this year.

Top 10 Small Cap Stocks To Watch For 2014: Texas Instruments Incorporated(TXN)

Texas Instruments Incorporated engages in the design and sale of semiconductors to electronics designers and manufacturers worldwide. The company?s Analog segment offers high-performance analog products comprising standard analog semiconductors, such as amplifiers, data converters, and interface semiconductors; high-volume analog and logic products; and power management semiconductors and line-powered systems. Its Embedded Processing segment includes DSPs that perform mathematical computations to process and enhance digital data; and microcontrollers, which are designed to control a set of specific tasks for electronic equipment. The company?s Wireless segment designs, manufactures, and sells application processors and connectivity products. Its Other segment offers smaller semiconductor products, which include DLP products that are primarily used in projectors to create high-definition images; and application-specific integrated circuits. This segment also provides handhe ld graphing and scientific calculators, as well as licenses technologies to other electronic companies. The company serves the communications, computing, industrial, consumer electronics, automotive, and education sectors. Texas Instruments Incorporated sells its products through a direct sales force, distributors, and third-party sales representatives. It has collaboration agreements with PLX Technology Inc.; Neonode, Inc.; and Ubiquisys Ltd. The company was founded in 1938 and is headquartered in Dallas, Texas.

Advisors' Opinion:

• [By Fabian]

  Texas Instruments investment returned 46.3% during the past year. The amount of investment is $403 Million. Miller reduced his TXN holdings by 25% during the last quarter of 2010. Since then the stock returned 11.1%. David Tepper also bought TXN during the third quarter.

• [By Paul Goodwin]  

  How do they make their money? TXN makes the PA Duplexer Module and the CDMA PA that goes into every iPhone. With a PEG ratio of 0.2 reveals huge discount compared to peers. This is a cash rich company and one I feel will be a strong performer within the next year.

Top 10 Small Cap Stocks To Watch For 2014: EZchip Semiconductor Limited(EZCH)

EZchip, a fabless semiconductor company, engages in the development and marketing of Ethernet network processors for networking equipment. Its products include network processor chips, evaluation boards and network-processor based systems, and development software toolkits. The company offers network processors for use in forming the silicon core of networking equipment, such as switches and routers; and for voice, video and data integration in various applications. Its network processors are single-chip solutions, which enable its customers to design multi-port line cards, such as processing and classification engines, traffic managers, media access controllers, as well as a range of specialized hardware blocks that accelerate various functions. The company offers Evaluation systems which enable customers to test NPU-based systems; and toolkits that assist customers in creating, verifying, and implementing solutions based on its network processors. It provides a library f eaturing data plane code for a range of applications, which include Metro Ethernet protocols, Multi-Protocol Label Switching, IPv4 and IPv6 routing, Access Control Lists, GPON/EPON OLT functionality, Network Address Translation, and Server Load Balancing. The company sells its products directly, and through contract manufacturers and distributors to network equipment vendors. It markets its products in Israel, China, Hong Kong, the Far East, Canada, the United States, and Europe. The company was formerly known as LanOptics Ltd. and changed its name to EZchip Semiconductor Ltd. in July 2008. EZchip Semiconductor Ltd. was founded in 1989 and is based in Yokneam, Israel.

Advisors' Opinion:

• [By Paul]  

  Known for designing high-speed networking equipment chips. They had a solid first quarter as revenue gained 38% and now they are sitting on $75 million of cash with no expenses or debt. I believe this is a strong technology bet and I place a target of $30.

Top 10 Small Cap Stocks To Watch For 2014: Rackspace Hosting Inc(RAX)

Rackspace Hosting, Inc. operates in the hosting and cloud computing industry. It provides information technology (IT) as a service, managing Web-based IT systems for small and medium-sized businesses, as well as large enterprises worldwide. The company?s service suite includes dedicated hosting comprising customer management portal and other management tools that manage data center, network, hardware devices, and operating system software; and cloud computing that enables customers to provide and manage a pool of computing resources, as well as delivery of computing resources to business when they need them. It offers cloud servers, cloud files, and cloud sites, as well as cloud applications, such as email, collaboration, and file back-ups; and hybrid hosting that provides a combination of dedicated hosting and cloud computing services. The company also offers customer support services. It sells its service suite through direct sales teams, third-party channel partners, an d online ordering. The company was formerly known as Rackspace.com, Inc. and changed its name to Rackspace Hosting, Inc. in June 2008. Rackspace Hosting, Inc. was founded in 1998 and is headquartered in San Antonio, Texas.

Advisors' Opinion:

• [By Sherry Jim]  

  This computing specialist that provides web-based IT systems has soared 60%+ in the past year.  With a P/S above 3 and Price to Cash of 10 this stock is poised to continue to soar and outperform it’s peers. $25 in a year is a realistic bet.

Top 10 Small Cap Stocks To Watch For 2014: OmniVision Technologies Inc.(OVTI)

OmniVision Technologies, Inc. designs, develops, and markets semiconductor image-sensor devices. The company offers CameraChip image sensors, which are single-chip solutions that integrate various functions, such as image capture, image processing, color processing, signal conversion, and output of a processed image or video stream for use in various consumer and commercial mass-market applications; and CameraCube imaging devices that are image sensors with integrated wafer-level optics. It also provides companion chips used to connect its image sensors to various interfaces, including the universal serial bus and other industry standard interfaces; and companion digital signal processors that perform compression in standardized still photo and digital video formats. In addition, the company designs and develops software drivers for Linux, Mac OS, and Microsoft Windows, as well as for embedded operating systems, such as Blackberry OS, Palm OS, Symbian, Windows CE, Windows Embedded, and Windows Mobile. Its products are used in mobile phones, notebooks, Webcams, digital still and video cameras, commercial and security and surveillance, and automotive and medical applications, as well as in entertainment devices. The company sells its products directly to original equipment manufacturers and value added resellers, as well as indirectly through distributors worldwide. OmniVision Technologies, Inc. was founded in 1995 and is based in Santa Clara, California.

Advisors' Opinion:

• [By Karim]  

  They make the 5-megapixel sensors in the camera of every iPhone. Along with this they carry a strong balance sheet and upbeat earnings expectations boding well for future growth.

Top 10 Small Cap Stocks To Watch For 2014: bebe stores inc.(BEBE)

bebe stores, inc. engages in the design, development, and production of women?s apparel and accessories. Its products include a range of separates, tops, dresses, active wear, and accessories in career, evening, casual, and active lifestyle categories. The company markets its products under the bebe, BEBE SPORT, bbsp, and 2b bebe brand names targeting 21 to 34-year-old woman. As of July 2, 2011, it operated 252 retail stores, and an online store at bebe.com in the United States, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Japan, and Canada, as well as 60 international licensee operated stores in south east Asia, the United Arab Emirates, Israel, Russia, Mexico, and Turkey. The company was founded in 1976 and is headquartered in Brisbane, California.

Advisors' Opinion:

• [By Wyatt Research]

  The women's apparel retailer reported fiscal fourth-quarter sales and same-store sales both rose 7 percent. The stock is up 30 percent year-to-date.

Top 10 Small Cap Stocks To Watch For 2014: InterDigital Inc.(IDCC)

Interdigital, Inc. engages in the design and development of digital wireless technology solutions. The company offers technology solutions for use in digital cellular and wireless products and networks, including 2G, 3G, 4G, and IEEE 802-related products and networks. It holds patents related to the fundamental technologies that enable wireless communications. The company licenses its patents to equipment producers that manufacture, use, and sell digital cellular and IEEE 802-related products; and licenses or sells mobile broadband modem solutions, including modem IP, know-how, and reference platforms to mobile device manufacturers, semiconductor companies, and other equipment producers that manufacture, use, and sell digital cellular products. InterDigital?s solutions are incorporated in various products comprising mobile devices, such as cellular phones, tablets, notebook computers, and wireless personal digital assistants; wireless infrastructure equipment, such as base stations; and components, dongles, and modules for wireless devices. The company was founded in 1972 and is headquartered in King of Prussia, Pennsylvania.

Advisors' Opinion:

• [By Kevin M. O'Brien]

  InterDigital Inc. (IDCC) will be sold for the highest amount ever paid for Intellectual Property (IP) patents. Whether it is a consortium or single company that buys InterDigital, the price should exceed what was paid for the Nortel (NRTLQ.PK) patents in mid-2011.

• [By SmallCap Investor]

  The wireless technology company said it's exploring its options, including a possible sale, following last month's successful auction of Nortel Networks intellectual property which brought in $4.5 billion. IDCC owns about 1,300 patents related to mobile phone technology.

Healthcare Insiders Snap Up Stock

July brings what we sometimes affectionately refer to as the "dog days" of summer. The symptoms are universal: sluggishness and fatigue often bringing about wanderlust for the mountains or the seashore. Taking a look at insider activity of late, it appears that the dog days have also hit insiders, who furthered the Neutral streak in their buying and selling according to a recent update by InsiderScore.

Unflinching, we did an industry drill down to see if any sector has warmed this summer and discovered that the healthcare segment saw a red hot June as insiders snapped up shares.

We took a look at Achillion Pharmaceuticals (ACHN) after two directors bought 40,000 shares for $394,800. Dennis Liotta bought 20,000 shares for $158,100 and Jason Fisherman bought 20,000 shares for $155,000. InsiderScore gave Liotta a nod, writing, "Liotta has been a smart buyer at Achillion in the past. He bought the same number of shares here, this time at a price 28% higher, which is the highest price he has paid for shares."

Synta Pharmaceuticals (SNTA) also caught our attention after four insiders, including the company's billionaire director Bruce Kovner bought over five million shares for $14.2 million.  He was joined by Co-Founder and CEO Safi Bahcall, who bought 50,000 shares for $213,700.

Sarepta Therapeutics (SRPT) saw its director Anthony Chase buy 10,000 shares for $385,000. Sarepta saw a slight uptick in share price around this time after it announced positive results in a Phase 2b extension study involving the use of eteplirsen as a treatment for patients with Duchenne muscular dystrophy.

InsiderScore notes that in buying, Chase reversed sentiment, as he sold shares last year at a lower rate.  "His move to buy shares here on strength in the stock shows strong conviction as the company once again reports positive data," writes InsiderScore.

Honorable mentions go out to Coronado Biosciences (CNDO), after its CEO Harlan Weisman and Jay Lobell, a longtime director, joined forces and bought 20,000 shares for $152,100; and to Anacor Pharmaceuticals (ANAC) after CFO Geoffrey Parker bought 33,000 shares for $224,300. InsiderScore noted that Parker's purchase was his largest to date and called it a "compelling positive event."

We'll try to keep on beating the summer heat here at Inside Scoop and we'll keep looking for those red hot buys.

Mobile and Beyond: How Banks Are Catering to Tech-Savvy Customers

Best Warren Buffett Companies To Watch In Right Now

Hot Gold Stocks To Buy For 2014

Amazon (NASDAQ: AMZN  ) is sitting on an advertising gold mine of data, because it's the sixth-largest website on the planet, which gives it invaluable insight into consumer shopping behavior. Amazon could one day become an advertising powerhouse because it has the transactional data that Google (NASDAQ: GOOG  ) lacks. With this data, Amazon has already begun to personalize the advertising experience, helping boost prices by 20% to 30%. In this video, Motley Fool contributor Steve Heller discusses what puts Amazon in a unique position to become an advertising kingpin and what investors should be watching for.

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Hot Gold Stocks To Buy For 2014: Golden Star Resources Ltd(GSS)

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

Advisors' Opinion:

• [By Curtis]

  Golden Star Resources, Ltd Com (AMEX:GSS): This equity had 10,766,183 shares sold short as of Aug 31st, as compared to 9,400,663 on Aug 15th, which represents a change of 1,365,520 shares, or 14.5%. Days to cover for this company is 3 and average daily trading volume is 3,419,976. About the equity: Golden Star Resources Ltd. is a mid-tier gold mining company. The Company’s operating mines are situated along the Ashanti Gold Belt in Ghana, West Africa.

Hot Gold Stocks To Buy For 2014: NEW GOLD INC.(NGD)

New Gold Inc. engages in the acquisition, exploration, extraction, processing, and reclamation of mineral properties. The company primarily explore for gold, silver, and copper deposits. Its operating properties include the Mesquite gold mine in the United States; the Cerro San Pedro gold-silver mine in Mexico; and the Peak gold-copper mine in Australia. The company also has development projects, including the New Afton gold, silver, and copper project in Canada; and a 30% interest in the El Morro copper-gold project in Chile. The company was formerly known as DRC Resources Corporation and changed its name to New Gold Inc. in June 2005. New Gold Inc. was founded in 1980 and is headquartered in Vancouver, Canada.

Advisors' Opinion:

• [By Christopher Barker]

  This stock has set the gold standard for share price appreciation among gold miners, advancing more than 140% since I introduced Fools to the new face of New Gold back in January 2010. Looking out over the long-term horizon, New Gold has constructed a gorgeous development pipeline to complement its trio of producing gold mines, featuring: a low-risk 30% stake in Goldcorp's El Morro project in Chile, the New Afton copper and gold project in British Columbia (with production scheduled to begin mid-2012), and the recently acquired Blackwater project north of New Afton.

  Although I expect the Blackwater deposit to expand considerably with further exploration, the project's initial indicated gold resource of 1.8 million ounces already leaves New Gold in command of 14.7 million ounces of measured and indicated gold resource. Tossing in copious supplies of by-product metals -- most notably 83.5 million ounces of silver and 3.5 billion pounds of copper -- New Gold is positioned to enjoy consistently low production costs throughout its sustained growth trajectory.

• [By Vatalyst]

  New Gold Inc. is listed on the Toronto Stock Exchange, and the NYSE under the symbol NGD. New Gold has a portfolio of global assets in the United States, Mexico, Australia, Canada and Chile as an intermediary gold producer. NGD gained 159% this year. With market capitalization at $4.5 billion, NGD shows a trailing P/E ratio of 25.3x. New Gold has a 30% interest in El Morro copper-gold Project in Chile and is expected to earn $0.21 per share next year.

Best Stocks To Watch Right Now: Australian Dollar(AU)

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

Advisors' Opinion:

• [By Mel Daris]

  AngloGold Ashanti (AU), a South African company, is trading for $33 and pays a dividend which yields 3.20%. The stock has an astonishing P/E of 1,015. Its net income totaled $112 million last year, but negative cash flows of $620 million. It holds net tangible assets of $4.3 billion and its balance sheet has not grown nearly as quickly as the other companies on this list. AngloGold has two new mines coming online in Congo and Colombia.

Hot Gold Stocks To Buy For 2014: CME Group Inc.(CME)

CME Group Inc. operates the CME, CBOT, NYMEX, and COMEX regulatory exchanges worldwide. The company provides a range of products available across various asset classes, including futures and options on interest rates, equity indexes, energy, agricultural commodities, metals, foreign exchange, weather, and real estate. It offers various products that provide a means of hedging, speculation, and asset allocation relating to the risks associated with interest rate sensitive instruments, equity ownership, changes in the value of foreign currency, credit risk, and changes in the prices of commodities. CME Group owns and operates clearing house, CME Clearing, which provides clearing and settlement services for exchange-traded contracts and counter derivatives transactions; and also engages in real estate operations. Its primary trade execution facilities consist of its CME Globex electronic trading platform and open outcry trading floors, as well as privately negotiated transact ions that are cleared and settled through its clearing house. In addition, the company offers market data services comprising live quotes, delayed quotes, market reports, and historical data services, as well as involves in index services business. CME Group?s customer base includes professional traders, financial institutions, institutional and individual investors, corporations, manufacturers, producers, and governments. It has strategic partnerships with BM&FBOVESPA S.A., Bursa Malaysia Derivatives, Singapore Exchange Limited, Green Exchange, Dubai Mercantile Exchange, Johannesburg Stock Exchange, and Bolsa Mexicana de Valores, S.A.B. de C.V., as well as joint venture agreement with Dow Jones & Company. The company was formerly known as Chicago Mercantile Exchange Holdings Inc. and changed its name to CME Group Inc. in July 2007. CME Group was founded in 1898 and is headquartered in Chicago, Illinois.

Hot Gold Stocks To Buy For 2014: Claude Resources Inc.(CGR)

Claude Resources Inc. engages in the acquisition, exploration, and development of precious metal properties, as well as production and marketing of minerals in Canada. It primarily explores for gold in northern Saskatchewan and northwestern Ontario. The company holds interests in the Seabee gold mine located at Laonil Lake, northern Saskatchewan; and the Madsen property that consists of 6 contiguous claim blocks totaling approximately 10,000 acres, located in the Red Lake Mining District of northwestern Ontario. It also holds interest in the Amisk Gold project, which covers an area of 13,800 hectares in the province of Saskatchewan. The company was founded in 1980 and is based in Saskatoon, Canada.

Advisors' Opinion:

• [By Christopher Barker]

  Hardly a johnny-come-lately, Claude Resources initiated small-scale gold production from its flagship Seabee mine in Saskatchewan in 1991. Just last year, Claude added the Santoy 8 mine to that operation to offer a touch of timely growth. Meanwhile, the operation hosts a number of compelling exploration targets like the recently discovered Neptune zone. After 10 of 15 recent drill holes from Neptune featured visible gold, including a nice high-grade intercept of 84.66 g/t over 3.2 meters, prospects are building for Claude to add some additional years to this time-tested operation.

  While I welcome the existing cash flow from Seabee, my investment thesis for Claude Resources centers around a pair of exciting exploration properties: the Amisk joint venture project southeast of Seabee and the Madsen property at Red Lake, Ontario. At Madsen, historical gold production between 1938 and 1976 yielded 2.4 million ounces at an average grade of 9 g/t. To date, Claude has identified an indicated resource of 928,000 ounces at a comparable grade. At Amisk, drill intercepts of eye-catching thickness suggest strong potential for a profitable open pit operation, including an intercept of 2.16 g/t over 241 meters! The deposit's 921,000 indicated gold-equivalent ounces represent only an early stage hint of the deposit's full potential. The stock is a top-10 holding for Sprott Asset Management, and a core holding for this Fool as well.

These Consumer Giants Bailed Out the Dow Today

Investors experienced another topsy-turvy day for the stock market again today, as the market repeated its increasingly common pattern of dropping precipitously during the early hours of trading, only to rebound by the end of the day. After failing to get back to the break-even line yesterday, the Dow Jones Industrials (DJINDICES: ^DJI  ) clawed back all of its losses, and then some, this time around, ending the day with a rise of nine points. For all the nervousness that investors felt throughout the week on comments from multiple Fed officials about the future of the U.S. economy, the net impact was tiny, with a loss of just 50 points for the week, looking insignificant compared to the magnitude of the bull market just in the past few months.

In large part, investors have consumer stocks to thank for the market's overall resiliency today. Procter & Gamble (NYSE: PG  ) closed up by more than 4% as the consumer giant finally responded last night to calls from activist investors like Bill Ackman by replacing retiring CEO Bob McDonald with former CEO A.G. Lafley. Whether the return of the former leader to P&G's executive suite will prove successful remains to be seen, but with Lafley having presided over the company during better times, investors clearly hope his return will reverse some of the company's recent challenges.

Wal-Mart (NYSE: WMT  ) rose 1.3% in likely response to the continued weakness from rival Sears Holdings (NASDAQ: SHLD  ) , which plunged almost 14% after a troubling quarterly report that raised concerns that Sears would have to divest itself of so much of its non-core asset base in order to raise cash, that it wouldn't have enough substance left to allow its retail business to recover. As much as I'd like to think that Wal-Mart's gains might have stemmed from its decision to stock frozen Fatburger hamburgers, what's more likely behind the jump is simply the recognition that the retail giant has built an almost insurmountable advantage in its key customer market, and neither Sears nor any other retailer is going to succeed by going head-to-head against Wal-Mart in its particular demographic.

Top 10 Warren Buffett Stocks To Buy For 2014

Finally, outside the Dow, Tesla Motors (NASDAQ: TSLA  ) continued its own consumer-driven run, rising nearly 5% and setting a new all-time high. Without any real news to support its gains, high short interest in the stock has created extremely volatile conditions, as short-sellers remain vulnerable to potential squeezes. An increase in liquidity resulting from Tesla's decision to make a secondary offering of stock should make it less prone to short-squeezes, but that might not stop the stock from continuing to rise if the company's results keep impressing shareholders.

Tesla's plan to disrupt the global auto business has yielded spectacular results. But giant competitors are already moving to disrupt Tesla. Will the company be able to fend them off? The Motley Fool answers this question and more in our most in-depth Tesla research available. Get instant access by clicking here now.

Why Are Consumers so Confident?

Consumers are more confident than they've been in six years despite an unemployment rate of 7.6%, and an economy that's growing at a snail's pace. Given the economic backdrop, it seems strange, but I think there are three reasons most consumers are feeling good about their personal situations -- and it may help fuel the recovery. 

The fear of getting fired
In 2008 and 2009, layoffs were rampant, and anyone who had a job was just hoping to keep it. I was one of those who were laid off as the economic fallout spread, and I could see those around me becoming less and less secure in their own jobs. It's impossible to feel confident about the economy or your personal spending when there's a constant fear of losing your job, and that's a big reason why confidence fell.

What's changed since early 2009 is a steady improvement in initial unemployment claims, aka layoffs. In fact, we're now at a level of initial claims for unemployment that matches the low during the 2000s.

US Initial Claims for Unemployment Insurance data by YCharts

Today, people are less fearful they'll lose their jobs, and that may do more to help confidence than anything else.

Stock markets are up
There's some sort of psychological affect the stock market has on people, whether they're active investors or not. When the Dow Jones Industrial Average (DJINDICES: ^DJI  ) and S&P 500 (SNPINDEX: ^GSPC  ) are reaching new highs, people have a positive view of the economy and the companies they work for, whether it's justified or not.

The financial impact can be important for some, as well. When stocks go up, 401ks go up in value, personal portfolios go up, and even pensions look safer than they do in bad times (except for Detroit). 

The bottom line is that a good stock market makes people feel better, and with the Dow and S&P 500 hitting new highs almost every week, it's a confidence boost.

Right side up home values
For homeowners, there may not be anything worse than being upside down on your mortgage. Foreclosure can be devastating, and even a short sale will ding your credit for a number of years, even when it's the right financial move. That's why rising home prices around the country give millions of people a boost of confidence, even when the economy isn't growing.

In June, the median sales price for existing homes was up 13.5% from a year ago, to $214,200, the 16th consecutive month prices have risen. The National Association of Realtors also said that the annual rate of sales of homes rose 15.2% last month to 5.08 million, so it's easier to sell your home. 

The boost to confidence isn't just that prices are going up, it's that fewer people are underwater on their homes. When people are underwater, it's harder to take a job elsewhere and sell your home, and people feel more wealthy when they have equity in their homes. All around, it's a boost to confidence.

An economy to be confident in... for most
These three factors should have most Americans feeling confident about their futures, but there's still a long way to go before we can all feel confident. An unemployment rate of 7.6% leaves a lot of people behind, and until that improves, there will be a cap on growth in the U.S. The good news is that consumers are 70% of the economy, and happy consumers means more economic activity and, hopefully, more jobs to fill.

With the American markets reaching new highs, investors and pundits alike are questioning future growth prospects for stocks. They shouldn't be. Many global regions are still stuck in neutral, and their resurgence could result in windfall profits for select companies. A recent Motley Fool report, "3 Strong Buys for a Global Economic Recovery," outlines three companies that could take off when the global economy gains steam. Click here to read the full report!

What Does Wall Street See for Silicon Motion Technology's Q2?

Silicon Motion Technology (Nasdaq: SIMO  ) is expected to report Q2 earnings on July 29. Here's what Wall Street wants to see:

The 10-second takeaway
Comparing the upcoming quarter to the prior-year quarter, average analyst estimates predict Silicon Motion Technology's revenues will shrink -17.7% and EPS will drop -38.1%.

The average estimate for revenue is $57.4 million. On the bottom line, the average EPS estimate is $0.26.

Revenue details
Last quarter, Silicon Motion Technology reported revenue of $57.4 million. GAAP reported sales were 10% lower than the prior-year quarter's $64.0 million.

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

EPS details
Last quarter, non-GAAP EPS came in at $0.17. GAAP EPS of $0.15 for Q1 were 63% lower than the prior-year quarter's $0.40 per share.

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

Recent performance
For the preceding quarter, gross margin was 43.8%, 560 basis points worse than the prior-year quarter. Operating margin was 12.2%, 860 basis points worse than the prior-year quarter. Net margin was 8.4%, much worse than the prior-year quarter.

Looking ahead

The full year's average estimate for revenue is $237.7 million. The average EPS estimate is $1.04.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 795 members out of 818 rating the stock outperform, and 23 members rating it underperform. Among 181 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 178 give Silicon Motion Technology a green thumbs-up, and three give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Silicon Motion Technology is outperform, with an average price target of $22.57.

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Add Silicon Motion Technology to My Watchlist.

This P/E Suggests Barclays Is a Buy

LONDON -- The FTSE 100 has risen by 25% over the last year, and many top shares are beginning to look quite expensive.

I'm on the hunt for companies that still look cheap, based on their long-term earnings potential. To help me hunt down these bargains, I'm using a special version of the price to earnings ratio called the PE10, which is one of my favorite tools for value investing.

The PE10 compares the current share price with average earnings per share for the last ten years. This smoothes out any short-term volatility and lets you see whether a company looks cheap compared to its long-term earnings.

Today, I'm going to take a look at the PE10 for the U.K.'s third-largest bank, Barclays  (LSE: BARC  ) (NYSE: BCS  ) .

Is Barclays a buy?
Barclays shares have risen by 79% over the last year. Are they now fully priced, or is there still more to come?

Let's take a look at the bank's current P/E and its PE10:

  Trailing
P/E PE10

Barclays	9.8	6.9

Barclays' trailing P/E of 9.8 is higher than its PE10 of 6.9, suggesting that the bank could still be a buy, as its long-term average earnings are higher than its current earnings.

Discount to book value
There's a second reason I believe Barclays may be a strong buy. As I write, Barclays shares are changing hands for around 320 pence. This is 21% below the bank's net asset value per share of 405 pence, and 7% below its net tangible asset value per share of 344 pence.

Top Value Companies To Invest In Right Now

Healthy banks normally trade slightly above book value, so these discounts indicate that the market is still pricing a lot of risk into Barclays -- risk I believe may be exaggerated.

Return to profits
Barclays' first-quarter results showed the bank returning to profit, and brokers' consensus forecasts suggest that full-year earnings could be around 35 pence, placing Barclays on a forward P/E of 9.2.

The firm's dividend is also expected to rise this year -- last year's payout of 6.5 pence is expected to rise by around 12% to 7.3 pence, providing a forward dividend yield of 2.3%.

Although this remains below the FTSE 100 average of 3%, there is scope for substantial long-term growth. In 2012, Barclays set aside 1.6 billion pounds for PPI compensation payments, and in the first quarter of 2013, the bank incurred 514 million pounds of costs as part of its Transform restructuring program.

These costs reduce the amount of spare cash Barclays can return to shareholders, but this situation won't last forever. I think Barclays is a buy.

Can you beat the market?
If you already own shares in Barclays, then I'd strongly recommend that you take a look at this special Motley Fool report. Newly updated for 2013, it contains details of top U.K. fund manager Neil Woodford's eight largest holdings.

Woodford's track record is impressive: if you'd invested 10,000 pounds into his High Income fund in 1988, it would have been worth 193,000 pounds at the end of 2012 -- a 1,830% increase!

This special report is completely free, but availability is limited, so click here to download your copy immediately.

Nu Skin: Cash Is King And This MLM Is Printing It

Billionaire Bill Ackman created a frenzy in the multi level marketing industry with his attack on Herbalife (HLF) earlier this year. It is an interesting business model indeed, but the fact remains that Herbalife and many other direct selling companies have fared well for shareholders. Once such company, with proven historical growth and significant future potential, is Nu Skin Enterprises (NUS).

Nu Skin utilizes person-to-person marketing to market and sell products to end users, and this company has been very successful under the direct selling channels. It has grown tremendously over the years and has provided significant returns to shareholders along the way. Even hovering near 52 week highs, the company is still attractive on a fundamental basis. Further, its tremendous growth with no signs of slowing indicates this is still a company on the rise. Nu Skin currently boasts a global sales network of 950,000 active sellers in 53 countries.

It is not only growing revenues overall, but every geographic sales region has posted annual revenue increases over the last five years. A closer look at the other numbers in addition to revenues reveals an even better picture.

Revenue Growth

Since 2003, the company has grown revenues from $985 million to over $2.1 billion in 2012 at an average annual growth rate of 9.5%. Even more impressive is the fact the company showed no slowdown between 2008 and 2010 when many consumer products companies were struggling to keep sales up as the U.S. entered into a recession and world growth slowed. Over that time period, Nu Skin revenues increased 23.2% in two years from $1.25 billion in 2008 to $1.54 billion in 2010. Looking at the charts below paints a detailed historical picture of NUS vs. Consumer Personal Products in general and illustrates the company's ongoing revenue growth.

(click to enlarge)

The top line chart shows the pric! e performance of NUS vs. Personal products from 2008 through early 2013. It looks promising, but without looking at the two lower indicators doesn't mean as much. The very bottom line in orange shows NUS revenue growth and the brown line above it is the historical P/E ratio. The growing revenues and stable P/E over the last five years provide a strong basis for the growing stock price vs. the industry averages.

EPS and Profit Margin Growth

As revenues have increased, the company has also managed to control expenses, leading to growth in earnings per share and margins. Not only has the company been able to maintain strong gross margins of 80% plus, but it has also grown its net profit margin from 5.2% in 2008 to more than 10% in 2012. Steady profit margins are good for long term performance as long as a company can maintain revenues. Growing net margins, along with growing revenues, are a home run.

Earnings per share have grown 363% from $0.79 in 2003 to $3.66 in 2012. Just in the last five years since 2008, average annual earnings growth has been in excess of 38.22%.

With this growth, the company has also been able to grow its dividend from $0.28 per share in 2003 to $0.80 per share in 2012. The average annual dividend growth has exceeded 12% since 2003 and averaged more than 20% annually over the last three years. While all of these factors are important in illustrating the growth rate and strength of Nu Skin, nothing is as telling as the free cash flow numbers.

Free Cash Flow Growth

While free cash flow is always an important factor to a company's health, in the case of Nu Skin it is of particular importance in gauging the company's ability to continue to pay and grow dividends, as well as pursue growth opportunities across its global markets. This will allow us to better! determin! e an intrinsic value for the company if earnings and dividends can be expected to grow over time, and free cash flow is a good indicator of a company's ability to do so. Nu Skin has not only posted healthy free cash flows over the years, but it has grown free cash flow at an annual average of 25% since 2008.

As Nu Skin continues to grow revenues across its global market segments, it should be in good position to provide significant returns to shareholders through dividends and dividend growth as cash flows continue to grow.

Intrinsic Value

It is clear that Nu Skin is a good company with healthy growth and future potential, but that alone doesn't tell us whether it is a good value at today's stock price. As Warren Buffett has stated, "It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price."

Nu Skin appears to be a wonderful company, but is it a fair price?

It appears to be trading at a slight discount to its market value based on historical trading standards, even being near all-time highs. Using the company's five year average P/E of 15 as a guide for an intrinsic value calculation, along with the five year average dividend payout ratio of 29%, and an expected five year revenue growth rate of 30% (well below the past 5 year average of nearly 40%), we find an intrinsic value of $70.74 per share, a 12% discount from the current market price of $62.29.

Risks

As with any equity investment, risks must be weighed carefully. Nu Skin faces many of the same risks as any other publicly traded company but is also faces a number of risks stemming from its international sales as well as its product lines.

The first significant risk is that of fluctuation currency exchange rates. In 2012, the company derived 89% of its sales from outside the United States, with the largest portion coming from Japan.

23% of the co! mpany's t! otal revenue came from Japan in 2012. While foreign currency fluctuations negatively impacted revenue by less than 1% in 2012, major moves in currency exchange rates could create a greater impact in future years. With a large portion of revenues coming from Japan, Nu Skin uses debt to hedge against currency fluctuations.

The company has a significant amount of its outstanding debt denominated in Japanese Yen, so if revenues from Japan decline as a result of unfavorable currency exchange rates, they will be offset by the debt.

To illustrate, at year end 2012 the company had 4.1 billion Yen debt which equated to $46.8 million U.S. dollars. With strength in the U.S. dollar against the Japanese Yen in the first half of 2013, the same 4.1 billion Yen debt is now equal to only $41.9 million U.S. dollars.

So while the rising dollar may negatively impact dollar denominated revenue from Japan, the corresponding decrease in debt helps to offset long term issues stemming from currency risks.

The second risk Nu Skin faces deals with FDA regulations. Because of its business lines in the nutritional supplement industry, the company is required follow FDA regulations on Good Manufacturing Practices and Adverse Event Reporting requirements. Noncompliance in these areas could result in penalties or actions impacting the company's ability to sell certain products.

Cash is King

Any company that has demonstrated the type of growth that Nu Skin has deserves at least a glance. But a company that has posted growing revenues, increasing profit margins, dividend growth, and free cash flow growth demands a more thorough analysis. The free cash flow produced is perhaps the most compelling. By all accounts, Nu Skin appears to be a healthy and growing company with significant future potential, and there is still upside from here even at the current price. It may not be a wonderful company at a wonderful price, but it is a wonderful company at a great price.

Source: Nu Skin: Cash Is King And This MLM Is Printing It

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...)

Redbox Instant Ironing Out the Kinks

The Motley Fool is on the road in Seattle! Recently, we visited Coinstar -- now officially renamed Outerwall  (NASDAQ: OUTR  ) -- to speak with CFO-turned-CEO Scott Di Valerio about the 22-year-old company's well-known coin-cashing machines, as well as its more recent acquisition of Redbox, and future initiatives to expand into other aspects of the automated retail market.

With a trial version of Redbox Instant now publicly available, Coinstar is seeking feedback from consumers as it fine-tunes the streaming video offering. The full version of the interview can be watched here.

A full transcript follows the video.

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Eric Bleeker: We've talked a bit about Redbox Instant. Not to push you too much on this, but how much more innovation do you expect we'll see on this? Just as one example, I know ABC, which is owned by Disney, has been in discussions with Verizon  (NYSE: VZ  ) Wireless about excluding the data rates for watching their television shows, as part of a deal there.

You are partners with Verizon Wireless. Are you expecting to be able to leverage some more strengths about Verizon? Right now it's got the unique model that you can get DVDs from your kiosks and be able to watch their library, but how close to the complete vision are we, I guess is what we're asking? How much more do you see coming forward?

Scott Di Valerio: Oh, we're in early days. Again, our partnership is with the Verizon Wireline business, and then we are going to be able to lever the Verizon Wireless out of the house as well. Really, what the JV is focused on today is making sure that the technology is set up to where every time that you turn it on, Redbox Instant, that the stream is good and that there's not buffering, those kinds of things; that we're merchandising the content in a good way.

That's, honestly, one of the things that we're working on from the surveys of our customers; that "Hey, I've got to be able to figure out what's in the kiosk, what's on the subscription, and what do I have to pay extra for, if I want to do a video on demand?" because you can do that, or purchase an electronic version of a movie as well, which you can do on Redbox Instant.

We've really been working on making that a little simpler, a little more clear and intuitive from that perspective, so we're very early days.

Again, we have around 5,000 titles, plus what you get at the kiosk, which is a nice number, focused really on movies. I think as we move along and bring on more subscribers and bring on more CE device manufacturers into the hopper, what you'll see is an expansion of the product as well, over time if you look at the roadmap for Redbox Instant.

I think we're in very, very early days.

Eric: Very early days, all right.

Di Valerio: But it's a great business, and again as I talked about with [Fool analyst] Austin [Smith], it's not a business that we have to be the No. 1 or No. 2 streaming service. It's a great business and it's really not set up to try to be a streaming Netflix or an Amazon killer on the streaming.

It's really set up to provide customers with a great experience at a great value, that bring on a good number of customers, but, again, we can be three or four and be very, very successful at it when you match it up with the overall Redbox business.

Jamba Follows Starbucks and Panera

It's going to be more rewarding to frequent your local Jamba (NASDAQ: JMBA  ) smoothie shop.

The Jamba Juice parent announced this morning that it has chosen Spendgo to fuel the chain's new My Fruitful Rewards program after testing it out at 30 stores. When the program rolls out nationally during the first quarter of next year, guests will be able to just enter their phone number at a point-of-sale touchscreen to register and subsequently score reward points.

Unlike many loyalty programs that have universal rewards, My Fruitful Rewards will be able to customize rewards based on buyer behavior.

Jamba has turned to incentivizing smoothie sippers before. It has gone through scratch-off cards and even offering free smoothies to push gift cards. However, this is a smart way for Jamba to learn more information about individual loyal customers that it can then use in drumming up new promotions or product ideas.

Loyalty programs have become quick in the fast casual space. Panera Bread (NASDAQ: PNRA  ) and Starbucks (NASDAQ: SBUX  ) are retail darlings with their initiatives.

Panera revealed during May's annual shareholder meeting that it now has 14 million MyPanera cardholders. It's easy to see why MyPanera has proven so popular. It also bases rewards on user behavior, and it's free. Customers swiping their cards can wind up with free bakery items, previews, or even invitations to special events. It's the element of surprise that helps with retention, and Panera gets to know its customers better with every swipe.

My Starbucks Rewards offers users a free drink or food item on their birthday just for registering the card. After five swipes, they qualify for free refills, and regulars that log more than 30 visits in 12 months get upgraded to gold status with even more perks. Starbucks claimed during an investor conference last month that its loyalty program now accounts for 25% of its transactions in this country.

If that sounds like a lot, Panera claims that its program has even better penetration.

"Our transactions that are done on the card dwarfs what Starbucks does," Panera boasted in May's earnings call.

With the success that Panera and Starbucks have achieved, it's not a surprise to see Jamba following in their footsteps.

Jamba's holding up well. Store-level comps have been positive for the past two years, and shares hit a three-year high last month. One can only imagine what will be possible next month with a more engaged and loyal fan of blended fruit beverages.

You must be hungry for more food stock ideas
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The Stocks to Watch This Week

At this time of year -- that is, earnings season -- there's always a lot to watch in terms of the market. The upcoming week is nevertheless of particular significance given the mix of companies reporting as well as the important economic reports that are intermixed throughout the next five days. But if there's one theme that's likely to have more of an impact on the S&P 500 (SNPINDEX: ^GSPC  ) than anything, it'll be housing.

On Monday, the National Association of Realtors releases its estimate of June existing home sales, followed up on Tuesday by the release of the Federal Housing Finance Agency's housing price index. On Wednesday, the Commerce Department announces its estimate of June new-home sales and the Mortgage Bankers Association reports the previous week's mortgage application activity. Finally, on Thursday, Freddie Mac publishes the average mortgage rate throughout the country.

If that isn't enough, moreover, the nation's two largest homebuilders are both set to report earnings on Thursday. D.R. Horton (NYSE: DHI  ) is expected to earn $0.34 per share on $1.71 billion in revenue. Following the company's last earnings release, its shares rose to a six-year high after announcing that its fiscal second-quarter profit more than doubled over the preceding three-month time period.

Meanwhile, analysts expect PulteGroup (NYSE: PHM  ) to earning $0.30 per share on $1.39 billion in revenue. It, too, outperformed expectations the last time it reported earnings, sending its shares soaring to a multiyear high.

Beyond these companies and economic releases, investors will be watching for earnings from a slew of other blue-chip concerns. On Tuesday, both UPS and Apple report. Boeing, Caterpillar, and Ford follow suit on Wednesday. And Amazon.com, 3M, and Coca-Cola are set to release their figures on Thursday.

If you're on the lookout for high-yielding stocks, The Motley Fool has compiled a special free report outlining our nine top dependable dividend-paying stocks. It's called "Secure Your Future With 9 Rock-Solid Dividend Stocks." You can access your copy today at no cost! Just click here.

How Tomorrow's GE Earnings Can Power Ahead

General Electric (NYSE: GE  ) is scheduled to release its quarterly earnings report tomorrow, and this time around, at least, expectations are fairly modest. That signals investors' beliefs that the company is going through hard times, but it also sets the stage for a big GE earnings beat that could push the stock upward out of its recent flat performance.

GE is the oldest member of the current Dow Jones Industrials (DJINDICES: ^DJI  ) , but it has reinvented itself in recent years to focus on its industrial roots. With its past financial focus having given way to innovation in energy and other industrial applications, the company is poised to capitalize on long-term trends that should boost its business. Let's take an early look at what's been happening with General Electric over the past quarter and what we're likely to see in its quarterly report.

Stats on General Electric

Analyst EPS Estimate	$0.36
Change From Year-Ago EPS	(5.3%)
Revenue Estimate	$35.58 billion
Change From Year-Ago Revenue	(2.5%)
Earnings Beats in Past 4 Quarters	3

Source: Yahoo! Finance.

When will GE earnings push higher?
In recent months, analysts have throttled back their expectations for General Electric's earnings, with a 10% cut in estimates for the June quarter and a penny-per-share pullback for their full-year 2013 consensus. The stock has managed to post modest gains, rising about 4% since mid-April.

GE's stock didn't start the quarter well, even though its earnings report back in April didn't look all that bad on the surface. Operating earnings grew 15%, with particularly strong gains in oil and gas equipment and its aviation segment. Yet investors focused on GE's flat revenue and struggling European business, which suffered 17% declines in sales and weighed on profit margins as well.

Still, those results haven't changed GE's general strategic plan as it strengthens its reach into various industrial sectors. Its vision of what it calls the "industrial Internet" put it on a collision course with IBM (NYSE: IBM  ) , whose Big Data initiative has similar goals of providing interconnections across networks of equipment to provide information that companies can use to cut costs and monitor operations. IBM has used its technology expertise to attract interest from clients and bolster its high-margin earnings growth, but GE has a closer connection to the actual equipment that will provide data to users. General Electric has also continued to become a bigger player in energy, combining its renewable-energy expertise with its recent purchase of Lufkin Industries to add traditional oil and gas services to its portfolio of offerings to customers.

In order to emphasize its successful industrial business, GE has tried to shrink its once-dominant GE Capital unit. Yet the division is so large that it's hard to find viable buyers, and its $50 billion portfolio of credit card loans raises concerns that a buyer would have such a large stranglehold over the industry that it would create systemic risk. GE did manage to sell off some of its net-lease properties to American Realty Capital (NASDAQ: ARCP  ) late in the quarter, as American Realty has been going through a string of acquisitions with the aim of growing its overall business. But with the deal coming out to less than $800 million, GE will have to work harder to divest itself of GE Capital assets if it truly wants to de-emphasize that part of its business.

In tomorrow's GE earnings report, pay special attention to each individual business segment, with particular attention to the health care division. With Obamacare right around the corner, the need for electronic medical records will likely increase, but sophisticated medical equipment might be a tougher sell. As GE seeks to grow on all fronts, though, it'll be interesting to see where it focuses the most attention in the coming months.

Whether you like well-established stocks like GE or up-and-coming start-ups, the best investing approach is to choose great companies and stick with them for the long term. The Motley Fool's free report "3 Stocks That Will Help You Retire Rich" names stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of. Click here now to keep reading.

Click here to add General Electric to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.

JPMorgan Shareholders Could Have Had a Better Week

Half an hour before the closing bell on the final day of trading, shares in JPMorgan Chase (NYSE: JPM  ) are up 2% for the week on reassuring words from the Fed on quantitative easing, and despite reports of a near-record regulatory fine in the works. But it could have been a better week than that.

What the FERC?
On Wednesday and Thursday of this week, Federal Reserve Chairman Ben Bernanke testified before both the House and Senate on the state of the U.S. economy and the central bank's policy response.

In short, Bernanke stuck to his guns when it came to plans to taper quantitative easing later this year, but stressed -- for the umpteenth time -- that the Fed would only do so as long as the economy was strong enough to handle it. And he made it very clear he didn't believe that was the case right now.

Then, yesterday, news broke that JPMorgan was in talks with the Federal Energy Regulatory Commission to settle allegations that it manipulated energy markets in California and Michigan. One billion dollars is one number that's been bandied about to settle the charges, though the fine is more likely to be half that.

Foolish bottom line
A $500-million-dollar fine is better than a $1 billion fine, but that's still a lot of money, and would still be one of the largest fines ever levied against a bank by a regulator. Can JPMorgan handle a hit like that to its balance sheet?

Of course it could. As of the end of the second quarter, the superbank has more than $29 billion in cash on its balance sheet. And the bank just reported record net income of $6.5 billion for the same quarter. But it shouldn't have to handle a hit like this, and neither should shareholders.

Jamie Dimon is too good a CEO and too obsessive-compulsive about risk for this kind of thing to happen. After the London Whale, Dimon put JPMorgan through the equivalent of the Spanish Inquisition, cleaning house and revamping management at many levels. Apparently, he needs to get the rack back out of storage.

JPMorgan will likely end up paying a fine, and not admitting any guilt. That's the way things like this typically go. But that doesn't make it alright: Playing fast and loose with the rules only makes the bank look bad, and big payouts hurt the bottom line.

But most players in the market got a boost this week from Ben Bernanke's soothing words: that QE is still in effect, and the Fed won't abandon the economy at a time of still great need. So one could say that, while the federal government helped JPMorgan shareholders on the one hand this week through the actions of the Fed, it hurt shareholders on the other hand by the actions of the FERC.

In truth, we all know that, when it comes to the regulatory action, JPMorgan has only itself to blame. 

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

Hot Dividend Stocks For 2014

Three weeks ago, I outlined my plans to create a portfolio of 10 companies that all have one thing in common: They provide a basic need or deliver life's necessities. It's my contention that basic-needs companies can offer investors stability and growth throughout any market environment thanks to consistent demand, incredible pricing power, and delectable dividends. This portfolio, which I have dubbed the�Basic Needs Portfolio, will be pitted against the�S&P 500�over a period of three years with the expectations of outperformance for all 10 stocks. I'll be rolling out a new selection to this portfolio every week for the next seven weeks.

You can review my previous two selections here:

Waste Management Intel

Today, I plan to introduce the third of 10 selections to the Basic Needs Portfolio: NextEra Energy (NYSE: NEE  ) .

Hot Dividend Stocks For 2014: Canadian Energy Exploration Inc (XPL.V)

Canadian Energy Exploration Inc., a junior oil and gas company, engages in the exploration, acquisition, development, and production of oil and natural gas reserves in western Canada. It focuses on the exploration projects located in Alberta and southeast Saskatchewan. The company is headquartered in Calgary, Canada. Canadian Energy Exploration Inc. is a subsidiary of Standard Exploration Ltd.

Hot Dividend Stocks For 2014: Innovative Solutions and Support Inc.(ISSC)

Innovative Solutions and Support, Inc. engages in the design, manufacture, and sale of flat panel display systems, flight information computers, and advanced monitoring systems in the United States and internationally. The company offers flat panel display systems, which can replace conventional analog and digital displays used in a cockpit to display information; and engine and fuel displays to convey information with respect to fuel and oil levels and engine activity, such as oil and hydraulic pressure and temperature. It also provides air data systems and components, including digital air data computers, integrated air data computers and display units, altitude displays, airspeed displays, and altitude alerters used to calculate and display various measures, such as aircraft speed, altitude, and rate of ascent and descent. The company offers its products to the Department of Defense, Department of the Interior, government agencies, defense contractors, airlines, commerc ial air transport carriers, aircraft modification centers, various original equipment manufacturers, as well as to corporate/general aviation markets. Innovative Solutions and Support, Inc. was founded in 1988 and is based in Exton, Pennsylvania.

5 Best Stocks To Invest In Right Now: Putnam Managed Municipal Income Trust(PMM)

Putnam Managed Municipal Income Trust is a close-ended fixed income mutual fund launched and managed by Putnam Investment Management LLC. It is co-managed by Putnam Investments Limited (U.K.). The fund invests in fixed income markets of United States. It invests in a diversified portfolio of tax-exempt municipal securities which typically includes high-yield securities that are below investment grade and involve special risk considerations. The fund benchmarks the performance of its portfolio against Barclays Capital Municipal Bond Index. Putnam Managed Municipal Income Trust was formed on February 24, 1989 and is domiciled in United States.

Wednesday's Top Upgrades (and Downgrades)

This series, brought to you by Yahoo! Finance, looks at which upgrades and downgrades make sense, and which ones investors should act on. Today, our headlines feature a pair of upgrades for home furnishings store Pier 1 (NYSE: PIR  ) and engine technologist BorgWarner (NYSE: BWA  ) . Let's address those two real quick, before we get to the day's really big news (about American Tower (NYSE: AMT  ) ).

Pier 1 won't sink 
As housing sales boomed, Pier 1 Imports grew its sales 9%, and its earnings 14% in the most recent quarter. Arguing that Pier 1 is likely to continue growing sales in quarters to come, Argus Research announced this morning that it's upgrading the shares to "buy" and assigning them a $27 price target. With the shares currently trading for $23 and change, that works out to about a 13% potential profit on top of Pier 1's modest 0.8% dividend yield. An attractive proposition in an overvalued market, to be sure -- but will Pier 1 really rise to $27?

I don't think it will, and I'll tell you why.

Pier 1 shares sell for about 19 times earnings right now. That doesn't seem too unreasonable a valuation at first glance. After all, you get a small dividend for that price. And you also get 16% projected long-term earnings growth. The problem with Pier 1, though, is that the quality of those earnings is frightfully low.

According to Pier 1's cash flow statement, the company only generated about $86 million in real free cash flow over the past year. That's about 35% less than the $132 million its income statement says it "earned" during the same period -- $0.65 in cash profits per $1 of claimed earnings. It means a stock that Argus is reading as selling for a "19 P/E" is actually better thought of as a stock that costs 29 times the amount of cash that it can generate in a year. That's too high a price to pay, and Argus is wrong to recommend it.

Analyst assimilates BorgWarner 
In contrast to Pier 1's respectable growth pace, growth was notably lacking at engine-parts-maker BorgWarner last quarter. Sales were down 3% at Borg, with profits dropping 10%. Regardless, analyst R.W. Baird sees a bright future for Borg, arguing that the outlook for auto sales in Europe is improving, Borg has plenty of cash flow to wait out the storm, and the stock is likely to "outperform" the market.

And, well, Baird is partly right. With $464 million in trailing free cash flow, Borg is generating a lot of cash. Problem is, as with Pier 1, the company's still not making as much money as its income statement suggests -- and not enough to justify its stock price.

Borg's share price -- 22 times earnings -- is already too much to pay for a company expected to grow profits at 15% per year annually. And the stock is even more expensive when you consider that $464 million is about $21 million less than what Borg reports for its trailing net income. Plus... Borg no longer pays a dividend.

Long story short, while BorgWarner remains a fine company, and Baird is right about the company's ability to survive till better times arrive, its stock remains too expensive today. Once again, this is an upgrade to "buy" that you should pass by.

American Tower is leaning the wrong way
And now for the rating you've all been waiting for: American Tower. This morning, noted short-seller Muddy Waters announced it was initiating coverage of the cellphone tower company -- announced it with a 21-gun broadside fired at the company's flank.

As reported on StreetInsider.com, Muddy Waters alleges dirty tricks are ongoing at American Tower, keying in on:

...an approximately US$250 million discrepancy between what AMT claims to have paid for the acquisition of towers in Brazil, and the actual selling price. AMT claimed to have paid US$585.4 million for the towers, but the real price was close to US$300 million. If AMT is aware of this discrepancy, it would amount to fraud. We have provided our research to the SEC.

Strong words -- but they're not the end of Muddy Waters' criticism, which also targets "consistent sales of approximately 90% of the shares" American Towers' CEO receives from the company, alleged revenue inflation, poor rates of return on capital, and more broadly against the business, a threat that cellphone towers may ultimately lose relevance as Wi-Fi hot spots begin taking over as the preferred method of Internet delivery.

Do Muddy's allegations hold water? Investors don't appear to think so, as they mostly shrug off today's "strong sell" initiation and bid American Tower shares down only a modest 1.1%. But really, it doesn't matter who's right in this debate over alleged fraud. At 50 times earnings, American Tower's shares are pretty obviously overpriced -- even for optimistic predictions of 27% annualized long-term growth.

In this case at least, Wall Street is right about its stock recommendation.

Fool contributor Rich Smith has no position in any stocks mentioned. The Motley Fool recommends American Tower and BorgWarner. The Motley Fool owns shares of American Tower.

Mortgage Application Volume Falls Again

Rising interest rates appear to be taking their toll. The Mortgage Bankers Association reported this morning that its index of weekly mortgage application activity fell by 2.6% last week compared to the week before.

Given their sensitivity to higher mortgage rates, applications to refinance dropped by 4% and are now at their lowest level since July 2011. Over the last 10 weeks alone, the figure is down by 55%.

Alternatively, purchase-money applications were actually up last week on a seasonally adjusted basis by 1%. On a non-seasonally adjusted basis, they were up by 26% compared to the prior week, and by 5% compared to the same week last year.

The latter results add credibility to the hypothesis that rising mortgage rates may paradoxically end up being good for the housing market. I discussed that here, and we've recently seen convincing evidence of this in the earnings reports from some of the nation's largest banks.

At the end of last week, Wells Fargo (NYSE: WFC  ) reported that its purchase-money mortgage originations shot up in the second quarter by 46% compared to the first quarter, while JPMorgan Chase's (NYSE: JPM  ) were higher by 44%. Earlier today, meanwhile, Bank of America (NYSE: BAC  ) said that its first-lien mortgage production was up by 40% compared to the same quarter last year.

If this trend is reflective of the underlying market dynamics, then it's hard to deny that rising mortgage rates, within reason, might end up being a net positive for the housing market in particular, and the economy more generally.

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

Canadian Stocks For 2017

Canadian Stocks For 2017