6 Machinery Stocks to Buy Now

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The grades of six Machinery stocks are better this week, according to the Portfolio Grader database. Every one of these stocks has an “A” (“strong buy”) or “B” overall (“buy”) rating.

This week, ARC Group Worldwide, Inc. (NASDAQ:) is showing good progress as the company’s rating jumps from a B (“buy”) last week to an A (“strong buy”). ARC Wireless Solutions provides wireless network component and end-to-end wireless network solutions. In Portfolio Grader’s specific subcategory of Equity, ARCW also gets an A. .

Westinghouse Air Brake Technologies Corporation (NYSE:) improves from a B to an A rating this week. Westinghouse Air Brake Technologies is a provider of value-added, technology-based products and services for the global rail industry. .

Watts Water Technologies, Inc. Class A (NYSE:) is bettering its rating of C (“hold”) from last week to a B (“buy”) this week. Watts Water Technologies designs, manufactures and sells a line of water safety and flow control products for the water quality, water conservation, water safety and water flow control markets. The stock price has risen 5.3% over the past month, better than the 1.7% decrease the S&P 500 has seen over the same period of time. .

Energy Recovery, Inc. (NASDAQ:) earns an A this week, jumping up from last week’s grade of B. Energy Recovery develops and manufactures energy recovery devices utilized in the water desalination industry. .

Tecumseh Products Company Class A (NASDAQ:) shows solid improvement this week. The company’s rating rises from a B to an A. Tecumseh Products is a full-line, independent, global manufacturer of hermetically sealed compressors for residential and commercial refrigerators, freezers, water coolers, dehumidifiers, window air conditioning units and residential and commercial central system air conditioners and heat pumps. .

Alamo Group (NYSE:) earns a B this week, jumping up from last week’s grade of C. Alamo Group is a designer, manufacturer, distributor, and service provider for high-quality equipment for right-of-way maintenance and agriculture. .

Louis Navellier’s proprietary Portfolio Grader stock ranking system assesses roughly 5,000 companies every week based on a number of fundamental and quantitative measures. Stocks are given a letter grade based on their results — with A being “strong buy,” and F being “strong sell.” Explore the tool here.

Retail Safe Havens

As the all-important holiday season approaches, political warfare in the nation's capital, combined with tepid job growth, doesn't bode well for the retail sector, cautions Khoa Nguyen, in Personal Finance.

Nonetheless, certain retailers are overcoming these headwinds—which means they're positioned to take off when conditions improve.

Below are two retail companies with inherent advantages that buffer them against the travails of their peers, allowing investors to prosper, even during uncertain times.

As an added bonus, they're not shy about returning value to investors through buybacks, and will continue to generate growth as the retail industry picks up.

TJX Companies (TJX), the nation's largest off-price retailer, operates about 3,000 stores through its subsidiaries TJ Maxx, Marshall's, and HomeGoods.

Its business model provides a competitive edge in a challenging retail environment, by offering a viable alternative to customers who may stray from full-priced items at other stores.

TJX has enormous growth potential, domestically and internationally, without cannibalizing its own business. Overall, TJX plans to expand its total number of stores by over 50% to 4,700 worldwide.

The company has grown sales an average of 7% for the past five years since the recession, and picked up this pace to 12% growth in fiscal 2013.

For the first half of fiscal 2014, the firm bought back $625 million worth of stock, or 12.9 million shares. TJX expects to repurchase about $1.3 billion to $1.4 billion in shares in fiscal 2014.

The industry leader in off-price merchandise, TJX's price-to-earnings (P/E) ratio of 20.4 is an attractive discount to the industry average of 28.3. This growth company also offers a 1% yield to boot.

Bed Bath & Beyond (BBBY) operates a chain of 1,471 domestic retail stores under the names Bed Bath & Beyond, Harmon and Harmon Face Values, and World Market in all 50 states in the US and Canada.

Bed Bath & Beyond's comparable store sales have grown at a rate of 5% from 2009 to 2012, and the firm was able to register 2.5% store sales growth, even as the US retail market remained weak.

During the quarter, the company repurchased about $257 million of its stock, or about 3.5 million shares. It still has a $1.8 billion remaining balance authorized on its repurchase program.

The housing market's continued recovery will translate into more good news for this domestic giant, especially since one of its previous competitors—the now bankrupt Linens n' Things—continues to liquidate its assets.

Its P/E ratio stands at a bargain of 15.8, well-below the industry average of 24.3. While the company waits for the retail market to recover, it's benefiting from a steady housing market that will only get stronger as economic recovery speeds up.

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This Growing Problem Could Threaten Ford's Big Gains

Growing sales of models like the Escape have pushed some Ford suppliers to the limit. Photo credit: Ford Motor.

Ford  (NYSE: F  ) reported strong earnings in North America this past week, a third-quarter profit of $2.3 billion. That came as Ford's sales have been increasing, but there's a new challenge emerging as Ford keeps pushing to increase production to keep up with demand.

What's the challenge? Bottlenecks at suppliers. Ford's new global purchasing chief said this week that some of Ford's key suppliers are maxed out, and that has the Blue Oval worried. Parts shortages could bring a Ford assembly line to a quick halt -- but if suppliers push too hard to keep up, quality could start to suffer.

In this video, Fool contributor John Rosevear looks at the problem -- and explains how Ford is moving to make sure its expansion plans can continue on schedule.

The "no-choice" auto revolution is coming. Are you ready?
An under-the-radar auto company has giants such as Ford, General Motors, and Toyota clamoring for access to its revolutionary technology. Many forward-thinking car enthusiasts are plowing money into this little-known stock, because they know it holds a key to the explosive profit power of the coming "no choice fuel revolution." Luckily, there's still time for you to get on board if you act quickly. All the details are inside an exclusive report from The Motley Fool. Click here for the full story!

Cree, Inc. (CREE): Can The LED Maker's Results Show Some Light?

Cree, Inc. (NASDAQ:CREE) is expected to report double-digit gains in its earnings per share when it announces its first quarter results onOct.22. The company would hold a conference call on the same day 5:00 p.m. EDT to discuss the results.

Based in Durham, North Carolina, Cree makes lighting-class LEDs, LED lighting and semiconductor products for power and radio-frequency (RF) applications. Cree's product families include LED fixtures and bulbs, blue and green LED chips, high-brightness LEDs, lighting-class power LEDs, power-switching devices and RF devices.

Wall Street expects Cree to earn 39 cents a share, up 44.4 percent from 27 cents a share in the same quarter last year. Cree's earnings have managed to top Street view twice in the past four quarters while meeting them on two occasions.

Analysts have pulled back their estimates for Cree's earnings in the recent months. Over the past 90 days, the consensus estimate has decreased from 43 cents. Cree sees first quarter earnings of 23 to 28 cents a share and adjusted earnings of 36 to 41 cents a share.

Quarterly revenues are expected at $392.31 million, according to analysts polled by Thomson Reuters. The consensus estimate implies growth of 24.2 percent from $315.75 million revenue generated in the year-ago period. The company expects revenue of $380 million to $400 million.

In mid-August, investors had a tough time with Cree, which gave a disappointing outlook for the first quarter despite almost doubling its fourth quarter profit on 22 percent rise in sales. The worry stemmed from the competitors such as Universal Display (NASDAQ:OLED), which makes organic LED bulbs a market that has the potential to eat into the sales and margins of Cree.

In addition, regular rivals such as Acuity Brands (NYSE:AYI) and Philips Electronics are also making their giant strides in the LED lighting market.

As a result, lighting margins are back in focus for Cree. Given the reset in lighting margins, bulk of the risk is out o! f the way, but the big inflection in earnings power is unlikely for the next few quarters until lighting margins normalize and LED bulb/fixture revenues accelerate.

Investors would be looking at whether the company is able to mute growth concerns from its fourth quarter's results. Further visibility on the magnitude of margin recovery and associated earnings power would be required for shares to grind higher from these levels.

For the fourth quarter ended June 30, 2013, the company reported net income of $28.2 million or 23 a share, compared to $10.0 million or 9 cents a share for the year-ago quarter. Excluding items, the company earned 38 cents a share, in line with estimates. Net revenue for the fourth quarter rose 22 percent to $375.01 million, missing consensus view of $377.21 million.

Gross margin for the quarter improved to 37.5 percent from 34.8 percent a year ago while operating margin increased to 8.2 percent from 2.8 percent last year.

Shares of Cree have plunged about 20 percent on a single day over its weak first quarter outlook in in August. The stock, however, has recovered some of its losses and dropped 2.5 percent since its last quarterly report. They have gained 158 percent in the last year and traded between $28.08 and $76 during the past 52-weeks.

Six things you may not know about about Coca-Cola

On Oct. 15 beverage giant Coca-Cola (ticker:KO) released its quarterly earnings with "revenue that came in slightly lower than expectations and earnings that were slightly ahead of what was expected." As you may expect, the case volume of the healthier non-sparkling beverages such as bottled water exceeded the growth of its traditional sparkling beverages such as brand Coca-Cola . However, doing a little research beyond the latest earnings report revealed six interesting things you may or may not know about Coca-Cola.

1. Coca-Cola distributes competitor's products
In your local restaurant you may notice that the Coke fountain or freestyle machine may contain a dispenser or button for a Dr. Pepper Snapple Group (DPS) product. There is a reason for that. In 2010, Coca-Cola acquired the North America arm of bottling partner Coca-Cola Enterprises (CCE) leaving Coca-Cola Enterprises with operations solely in Europe. As part of the deal, Coca-Cola inherited a licensing deal which included distribution of Dr. Pepper Snapple Group products throughout North America via such avenues as vending and freestyle machines. This agreement with Coca-Cola started in 2010 will last 20 years.

2. Coca-Cola is less about the syrup
Part of what used to make Coca-Cola an appealing investment lies in the fact that the largest portion of its operating revenue came from syrup distribution. Syrup or concentrates represent the high margin aspect of its business. It simply leaned on its bottling partners to foot the bill for the infrastructure, producing the lower margin "finished product" in the bottled beverages you see on store shelves. In 2008, concentrates represented 54% of Coca-Cola's operating revenue. The 2010 purchase of Coca-Cola Enterprises' North American assets inverted the business mixture. As of 2012, the concentrates represented 38% of Coca-Cola's operating revenue. Coca-Cola's heavier involvement in selling its finished products partially explains the decline in operating margins over the past fi! ve years..

3. Coca-Cola can underperform for the long-term
Many investors probably make the assumption that a purchase in Coca-Cola shares will automatically result in market beating returns. In the chart below you can see that had you purchased shares of Coca-Cola stock at the beginning of 1998, a time period leading up to the dot com crash, you would have underperformed the market from that time forward. This also serves as proof that return is a function of price paid. Watching for a good point of entry is important with any investment.

4. Warren Buffett does not serve on the board of directors
Warren Buffett's holding company Berkshire Hathaway (BRK-B) owns 400 million shares of Coca-Cola, 9% of the outstanding shares. However, Warren Buffett does not hold a seat on the company's board of directors, probably due to his hands off nature of owning a business; interestingly, his son Howard G. Buffett sits on the board. Howard Buffett manages Buffett Farms a commercial farming enterprise. His extensive experience in the agricultural industry can serve Coca-Cola well as they expand into emerging and developing nations where garnering fresh water and basic resources can pose a challenge.
5. Coca-Cola's most heavily penetrated market is NOT the United States
The United States actually ranks No. 4 with 401 servings per person in 2012 according to Coca-Cola's annual review book. The top honor actually belongs to Mexico with 745 servings per person in 2012 followed by Chile with 486 servings and Panama with 416 servings . Over the past five years, Coca-Cola's bottler in the Latin American region, Coca-Cola Femsa(KOF) thrived due a robust Latin American economy, bottler consolidation , and popularity of Coca-Cola's products . Coca-Cola Femsa grew revenue 61% during that time exceeding Coca Cola's revenue growth of 49% and translating into a total return that beat the mother company and the S&P 500. Investors need to tread cautiously going forward. Coca-Cola Femsa analysts recently! downgrade! d the stock due to worries about overexpansion and the resulting debt. Moreover, the bottler recently expanded into the Philippines, an area outside its normal operations. Finally, the deceleration of the Latin American economy doesn't bode well for Coca-Cola Femsa.

6. Coca-Cola still possess room for expansion

Last year, Coca-Cola's annual review cited several countries with below normal consumption in terms of servings per person including China and Nigeria. With only 39 and 26 servings consumed per person respectively, the company still possesses room for expansion. The Pacific and Eurasia & Africa regions experienced the highest level unit case volume growth of 3% and 9% respectively year to date .
Foolish takeaway
A vast and complicated business lies behind the bottle of Coke you buy at the convenience store. Currently the stock trades at 19 times earnings, right on par with the market, and yields 3% annually in dividends as of this writing. With dividends the company represents a good low risk income stock for retirees or people who don't want to take on a great deal of risk. If you want robust growth you may want to look elsewhere.

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Iron Mountain Announces Acquisition of Cornerstone Records Management for $191M (IRM)

Early on Friday, information protection and storage services company Iron Mountain Incorporated (IRM) announced that it has acquired Cornerstone Records Management for $191 million in cash.

Cornerstone Records Management provides record storage, document shredding, and data protection services to small and mid-sized business in the Mid-Atlantic and Northeast regions, as well as the Southern California, Denver, and Houston areas.

The acquisition of Cornerstone Records Management will help Iron Mountain grow its core information storage business by adding small and mid-sized organizations to its customer base.

Iron Mountain went on to note that it does not believe this acquisition will provide a meaningful impact in 2013 results. However, it should add $50 to $55 million in revenues in 2014.

Iron Mountain shares were inactive during pre-market trading on Friday. The stock is down 16.33% year-to-date.

Overseas Stocks Are A Stock-Picker's Game

In the early 1990s money manager Ray Mills successfully presented his thesis on robust aerospace controls–computer-guided systems that keep rockets from tumbling aimlessly through space–to Stanford's aeronautics and astronautics doctoral committee. With such systems, he says, there's always a tradeoff between performance and control.

"Basically the more performance you want to get out of it, the closer it is to the edge of instability." The challenge is to design a system that "gives you near-optimal performance but has a much wider range of allowance for things not being what you thought they were," he says.

Like many other mathematicians, physicists and engineers, Mills long ago abandoned his childhood dream of rocket science for a more lucrative living on Wall Street. He joined T. Rowe Price in 1997, five years after receiving his Ph.D.

However, optimizing performance in an environment of instability is a way of life these days for the 52-year-old manager of T. Rowe Price's $6.6 billion Overseas Stock Fund.

Through careful bottom-up stock picking in precarious foreign markets his fund has posted a five-year annual return of 15.3%, net of fees, compared with 13.6% for the Vanguard All-World ex-U.S. Index Fund. Year-to-date his fund has logged a respectable 19% total return.

No, even the rocket scientist couldn't engineer his way around the financial crisis. Like nearly every other comparable fund T. Rowe's Overseas Stock Fund lost more than half its value in 2008 and early 2009 when markets froze globally. But today assets have more than made up for the ground they lost.

As a stock picker, Mills methodically searches for the right balance between performance and stability. For example, he can invest up to 15% of assets in emerging markets but has less than 7% in them now. One big reason: a 2010 London Business School study that showed little to no relationship between national economic growth rates and stock returns. "It seems like a no-brainer–you want to invest where the economic growth is best," he says. "But there's no pattern, absolutely no correlation."

So rather than bet directly on emerging countries' markets, Mills steers investors' money into carefully chosen multinationals with big stakes in growth markets.

He has, for example, been increasing his holdings in Unilever. The Anglo-Dutch consumer products giant gets half its revenue from emerging markets, and Chief Executive Paul Polman is shifting away from food brands like Knorr sauces and Hellmann's mayonnaise toward higher-margin home and personal-care items like Axe deodorant and Dove soap. At 19 times earnings Unilever isn't cheap (the S&P Consumer Staples Staples Index is trading at about 18 times earnings), but Mills isn't put off. "Could you get a better entry point?" he asks. "Maybe, but you could also wait and ten years from now look back and say, 'Wow, this thing has compounded like mad.' "

Nor is Mills scared off by slow-growth economies–if the business is right. One of his favorites these days is U.K. home builder Persimmon, which, he says, is sitting on enough cheaply acquired land and zoning permits to build housing in England's tight market for four years. "If you have the land, if you have the permissions–which these guys do–that's the sweet spot," he says. "This company is going to return its entire market value in the form of buybacks, dividends and special dividends over the next ten years."

Admittedly, Europe is a challenging place to invest these days. Euro zone unemployment is hanging above 12%, banks are sitting on mountains of dicey sovereign debt, and it seems like the entire continent is waiting anxiously for a German bailout that may never come.

But as Mills sees it, European companies tend to have stronger management and corporate governance than those in the developing world, and the European legal system is more predictable than, say, China's. Moreover, fierce international competition has forced once flabby conglomerates to trim bureaucracy and underperforming divisions.

Even France, with its high taxes and rigid labor rules, offers opportunities; Mills owns global insurer AXA and electrical-equipment maker Legrand, among others. "The companies are great," he says, although "every other management team we meet with in France is threatening to move to Hong Kong."

For all his bias toward big, solid companies, Mills thinks he can still get higher returns out of Europe, although he concedes "the easy money has been made."

Mills also has 19% of the fund's money in Japan, where he's bought stocks that he thinks will benefit from Prime Minister Shinzo Abe's unprecedented stimulus efforts. Central Japan Rail, for example, operates the bullet train from Tokyo to Osaka and owns a lot of retail real estate along the route. Earnings are rising as traffic increases and travelers spring for highly profitable first-class seats to avoid the crowding in steerage.

'Fast Money' Recap: Higher and Higher

NEW YORK (TheStreet) -- The S&P 500 closed above 1,800 for first time in its history as the markets pushed to new highs once again. 

Guy Adami, managing director of stockmonster.com, said he was shocked the S&P 500 didn't trade down to 1,760 this week and added that it's scary the market hasn't pulled back at all. 

Stuart Frankel & Company's Steve Grasso said there will eventually be some sort of sustained pullback in the broader market.

Tim Seymour, managing partner of Triogem Asset Management, said tapering seems to be getting priced into the market to some degree. 

The group gave their top picks going forward. Brian Kelly, founder of Brian Kelly Capital, said he is a buyer of Valero Energy (VLO) because it's running at full capacity and has a low valuation.  Seymour said he would be a buyer of China Mobile Limited (CHL) due to its low valuation and solid dividend. 

Grasso said he would buy Yahoo! (YHOO) because of its 24% stake in Alibaba. 

Adami said he likes MasterCard (MA) even though it's at all-time highs because it's in a secular trend of consumers moving to credit from cash. 

Bill Taubman, COO of Taubman Centers, was a guest on the show. He said high-end and mid-end retailers continue to do well, while low-end retail is doing bad -- witness Sears Holdings (SHLD), Wal-Mart (WMT), and Target (TGT). He added that J.C. Penney (JCP) is doing a lot better and management seems refocused. 

Seymour said his top pick is TGT, despite its recent struggles. He only advised buying a small position and added the stock needed to hold $63.  Adami said investors could take a long position in GameStop (GME) with a stop-loss at $48.50.  Grasso said he would sell short International Business Machine (IBM). Kelly agreed, saying that often IBM can be a broader market indicator. For their final trades, Grasso said to buy Las Vegas Sands (LVS) and Seymour is buying CHL. Adami said he would buy Micron (MU) and Kelly is buying HollyFrontier (HFC).  -- Written by Bret Kenwell in Petoskey, Mich. Follow @BretKenwell Follow TheStreet.com on Twitter and become a fan on Facebook.

Bret Kenwell currently writes, blogs and also contributes to Robert Weinstein's Weekly Options Newsletter. Focuses on short-to-intermediate-term trading opportunities that can be exposed via options. He prefers to use debit trades on momentum setups and credit trades on support/resistance setups. He also focuses on building long-term wealth by searching for consistent, quality dividend paying companies and long-term growth companies. He considers himself the surfer, not the wave, in relation to the market and himself. He has no allegiance to either the bull side or the bear side.

China’s New Reform Program: Will It Happen?

China last week announced a major program of economic and other changes that together have the potential to boost the nation’s investment appeal. This is one of the most ambitious attempts at liberalizing China’s economy since Deng Xiaoping opened up the country to global markets starting in the late 1970s.

Chinese stocks jumped on the news. The key now is if, when and how the reforms will occur.

The 20-page blueprint outlines 60 initiatives that would boost China’s reliance on market forces and open more of the economy to private-sector and foreign competition. The agenda also would give the nation’s people more social and economic freedom.

The most prominent item on the list calls for easing the longtime limit of one child for most families. By one estimate, the nationwide easing of family size restrictions could lead to one million to two million more births in China every year, in addition to approximately 15 million a year now.

Among the economic and financial reforms, market forces are to play a more decisive role. “The market should be left to decide the price of anything whose price can be decided by the market, and the government should not make any improper intervention,” the program statement said. This is to apply particularly to prices of key resources such as water, oil, natural gas and electricity.

For foreign investors, a noteworthy component is that dividends from state-owned firms are supposed to increase under the plan. There’s a specific goal: a 30 percent payout rate by 2020. State-owned firms now pay 5-15 percent of profits in dividends. While the government would get most of the money, ordinary shareholders should also benefit.

State-owned enterprises make up more than 80 percent of the value of Chinese-listed companies, and include many that trade in the US. The most prominent examples include PetroChina (NYSE: PTR), ! China Mobile Ltd. (NYSE: CHL), China Petroleum & Chemical (NYSE: SNP), China Life Insurance Co. (NYSE: LFC), China Telecom Corp Ltd. (NYSE: CHA) and China National Offshore Oil (CNOOC) Ltd. (NYSE: CEO).

A consumer reform of note is deregulated interest rates. There currently is an interest-rate ceiling on bank deposits and loans that effectively subsidizes banks and borrowers at the expense of savers. In theory, this should result in better lending controls and higher savings yields. Also called for is establishment of deposit insurance, similar to the FDIC in the US.

In addition, private investors are to be allowed to set up banks. And the government is supposed to make efforts to improve the country’s bankruptcy system.

The program also targets greater property rights, particularly in rural areas. Farmers would be able to more freely rent, sell and mortgage their land, with greater protection against government confiscation.

Xi Jinping became chairman of the Communist Party a year ago and president of the People’s Republic of China eight months ago. He is said to have led the group drafting and finalizing the plan. This is in sharp contrast with previous programs, whose development typically has been delegated to the prime minister and others.

Xi’s active leadership is seen as a way to give the program increased credibility while strengthening his leadership position. “He’s not hanging out a sheep’s head and selling dog meat,” said one expert, using a popular Chinese expression that means selling bogus goods. “He’s hung out a dog’s head and is selling dog meat.”

A sheep’s head and sheep meat likely would be preferable, even in China. However, execution is the key. Recent efforts to make big structural adjustments in the economy generally have fallen far short. In 2007, Premier Wen Jiabao called China’s economy “unstable, unbalanced, uncoordinated and unsustainable.”
Yet! China’s ambitious five-year plans in 2006 and 2011 accomplished little. And because of the global financial crisis, Wen Jiabao introduced a huge economic stimulus plan with heavy investments in real estate and infrastructure, which have exacerbated the problems.

The new reform document lays out few timetables. And implementation is largely up to China’s huge bureaucracy. While the Communist Party sets overall policy direction, the central and provincial government agencies will handle the reform details and operation. As in many government bureaucracies, China’s have many conflicting interests, rivalries and ties to interest groups that benefit from the status quo.

China experts believe that while the leaders want to improve the economy, their ultimate objective is to strengthen the Communist Party’s position and traditional one-party rule.

This is why the party simultaneously is tightening political ideology, with a crackdown on dissent, including stricter control of the Internet.

Top 5 Safest Stocks To Buy For 2014

I'll admit it. The traditional grocery business isn't an exciting industry for investment potential. Profit margins are low, with almost zero chance of spiking higher. Meaningful sales growth is hard to find, too. And grocery stores suffer from the constant threat of having more nimble retailers push into their markets, as we saw with Amazon.com's latest expansion of its food delivery business.

However, the safest path to big investment returns is through buying into years of predictable growth at a reasonable price. That's why I think Kroger (NYSE: KR  ) stock could be a great option for long-term investors right now.

Kroger chugs along
The grocer's latest earnings show the kind of steady results that most companies can only dream about. With a 3.3% boost in sales, Kroger notched its 38th consecutive quarter of growth at its existing stores. Customers responded to the company's investments in its locations by making more frequent visits, and by purchasing more products per trip. Packed register lines brought quarterly revenue to an all-time high $30 billion, and profits were up about 10%, to $481 million.

Top 5 Safest Stocks To Buy For 2014: Petroleo Brasileiro S.A.- Petrobras(PBR)

Petroleo Brasileiro S.A. primarily engages in oil and natural gas exploration and production, refining, trade, and transportation businesses. The company?s Exploration and Production segment involves in the exploration, production, development, and production of oil, liquefied natural gas (LNG), and natural gas in Brazil. This segment supplies its products to the refineries in Brazil, as well as sells surplus petroleum and byproducts in domestic and foreign markets. Its Supply segment engages in the refining, logistics, transportation, and trade of oil and oil products; export of ethanol; and extraction and processing of schist, as well as holds interests in companies of the petrochemical sector in Brazil. The Gas and Energy segment involves in the transportation and trade of natural gas produced in or imported into Brazil; transportation and trade of LNG; and generation and trade of electric power. In addition, the segment has interests in natural gas transportation and d istribution companies; and thermoelectric power stations in Brazil, as well engages in fertilizer business. The Distribution segment distributes oil products, ethanol, and compressed natural gas in Brazil. The International segment involves in the exploration and production of oil and gas, as well as in supplying, gas and energy, and distribution operations in the Americas, Africa, Europe, and Asia. Further, the company involves in biofuel production business. Petroleo Brasileiro was founded in 1953 and is based in Rio de Janeiro, Brazil.

Advisors' Opinion:

• [By Tyler Crowe and Aimee Duffy]

  There have been some mixed signals coming from Brazil's largest oil company, Petrobras (NYSE: PBR  ) . The company has been able to pick up its production numbers lately thanks to some of its idle rigs coming back on line. Also, the company seems to be lining itself up well to expand operations into the pre-salt layer, which will be auctioned off for the first time in October. The problem, though, is that the company will need to add to its already large debt load to make it happen.

Top 5 Safest Stocks To Buy For 2014: Under Armour Inc.(UA)

Under Armour, Inc. develops, markets, and distributes performance apparel, footwear, and accessories for men, women, and youth primarily in the United States, Canada, and internationally. It offers products made from moisture-wicking synthetic fabrics designed to regulate body temperature and enhance performance regardless of weather conditions. The company provides its products in three fit types: compression (tight fitting), fitted (athletic cut), and loose (relaxed) extending across the sporting goods, outdoor, and active lifestyle markets. Its footwear offerings comprise football, baseball, lacrosse, softball, and soccer cleats; slides; performance training footwear; and running footwear. The company also provides baseball batting, football, golf, and running gloves, as well as licenses bags, socks, headwear, custom-molded mouth guards, and eyewear that are designed to be used and worn before, during, and after competition. Under Armour sells its products through retai l stores, as well as directly to consumers through its own retail outlets and specialty stores, Website, and catalogs. The company was founded in 1996 and is headquartered in Baltimore, Maryland.

Advisors' Opinion:

• [By Monica Gerson]

  Under Armour (NYSE: UA) is expected to report its Q3 earnings at $0.66 per share on revenue of $710.18 million.

  Reliance Steel & Aluminum Co (NYSE: RS) is estimated to report its Q3 earnings at $1.20 per share on revenue of $2.54 billion.

5 Best Blue Chip Stocks For 2014: Goldman Sachs Group Inc.(The)

The Goldman Sachs Group, Inc., together with its subsidiaries, provides investment banking, securities, and investment management services to corporations, financial institutions, governments, and high-net-worth individuals worldwide. Its Investment Banking segment offers financial advisory, including advisory assignments with respect to mergers and acquisitions, divestitures, corporate defense, risk management, restructurings, and spin-offs; and underwriting securities, loans and other financial instruments, and derivative transactions. The company?s Institutional Client Services segment provides client execution activities, such as fixed income, currency, and commodities client execution related to making markets in interest rate products, credit products, mortgages, currencies, and commodities; and equities related to making markets in equity products, as well as commissions and fees from executing and clearing institutional client transactions on stock, options, and fu tures exchanges. This segment also engages in the securities services business providing financing, securities lending, and other prime brokerage services to institutional clients, including hedge funds, mutual funds, pension funds, and foundations. Its Investing and Lending segment invests in debt securities, loans, public and private equity securities, real estate, consolidated investment entities, and power generation facilities. This segment also involves in the origination of loans to provide financing to clients. The company?s Investment Management segment provides investment management services and investment products to institutional and individual clients. This segment also offers wealth advisory services, including portfolio management and financial counseling, and brokerage and other transaction services to high-net-worth individuals and families. In addition, it provides global investment research services. The company was founded in 1869 and is headquartered in New York, New York.

Top 5 Safest Stocks To Buy For 2014: Fluor Corporation(FLR)

Fluor Corporation, through its subsidiaries, provides engineering, procurement, construction, maintenance, and project management services worldwide. Its Oil & Gas segment offers design, engineering, procurement, construction, and project management services to upstream oil and gas production, downstream refining, chemicals, and petrochemicals industries. This segment also provides consulting services comprising feasibility studies, process assessment, and project finance structuring and studies. The company?s Industrial & Infrastructure segment offers design, engineering, procurement, and construction services to the transportation, wind power, mining and metals, life sciences, manufacturing, commercial and institutional, telecommunications, microelectronics, and healthcare sectors. Its Government segment provides engineering, construction, logistics support, contingency response, management, and operations services to the United States government focusing on the Departme nt of Energy, the Department of Homeland Security, and the Department of Defense. The company?s Global Services segment offers operations and maintenance, small capital project engineering and execution, site equipment and tool services, industrial fleet services, plant turnaround services, temporary staffing services, and supply chain solutions. Its Power segment provides engineering, procurement, construction, program management, start-up and commissioning, and operations and maintenance services to the gas fueled, solid fueled, plant betterment, renewables, nuclear, and power services markets. The company also offers unionized management and construction services in the United States and Canada. Fluor Corporation was founded in 1912 and is headquartered in Irving, Texas.

Advisors' Opinion:

• [By Louis Navellier]

  Fluor Corporation (FLR) is one of the world�� leading heavy construction and engineering firms. I don’t want to imply that this is a bad company because it is actually a very good one. However, Fluor has divisions including Oil & Gas, Industrial Infrastructure, Government, Global Services and Power. Virtually all of them are seeing limited spending as a result of the global slowdown and reduced government spending around the world. The stock is up more than 23% this year, but earnings are actually down on flat revenues. Analysts have been lowering their estimates for the rest of this year as well as 2014, and the stock is currently rated as a by Portfolio Grader. When the economy recovers, I expect will see this company’s fundamentals improve substantially … but until that happens investors should avoid the stock.

• [By CRWE]

  Fluor Corporation�� (NYSE:FLR) Chairman and Chief Executive Officer, David Seaton, and Chief Financial Officer, Biggs Porter, will give a presentation to investors at the Credit Suisse 2012 Engineering & Construction Conference in New York on Thursday, June 7 at 9:00 a.m. Eastern Daylight Time.

BlackBerry Company Earnings Mostly Meaningless

Just one week ago, BlackBerry Ltd. (NASDAQ: BBRY) issued a warning on second-quarter results that sent the stock plunging. The stock closed Thursday down nearly 25% since that announcement. The Friday morning press release from BlackBerry will not improve the situation.

The smartphone maker reported an adjusted diluted earnings per share (EPS) loss of $0.47 on revenues of $1.57 billion. In the same period a year ago, BlackBerry reported an EPS loss of $0.27 on revenue of $2.86 billion. Second-quarter results compare to consensus estimates for an EPS loss of $0.49 and $1.61 billion in revenue. As recently as 90 days ago, BlackBerry was expected to post positive earnings.

On a GAAP basis, the company posted an EPS loss of $1.84, which does not include non-cash, pre-tax charges of a $934 million inventory charge on its Z10 touchscreen smartphone and a $72 million restructuring charge. The inventory charge is less than the $950 million estimate BlackBerry gave last week.

BlackBerry said it recognized revenue on 3.7 million smartphones, most of which were the older models based on the BlackBerry 7 operating system. The company will not recognize revenue on the new Z10 and Q10 phones it shipped until the units are sold through to customers. BlackBerry sold 5.9 million units to end users in the second quarter. The company did not say how many units it shipped in the quarter.

The company's CEO said:

We are very disappointed with our operational and financial results this quarter and have announced a series of major changes to address the competitive hardware environment and our cost structure. … We understand how some of the activities we are going through create uncertainty, but we remain a financially strong company with $2.6 billion in cash and no debt. We are focused on our targeted markets, and are committed to completing our transition quickly in order to establish a more focused and efficient company.

Gross margins as reported were negative 24%. On an adjusted basis, gross margin rose from 34% in the first quarter to 36%. That is the only good news.

The buyout offer at $9 a share has lost its appeal for investors, who apparently do not believe that anyone would be foolish enough to pay that much for the failing phone maker. In its press release, BlackBerry said nothing about the company's future, but in reality nothing else matters.

The consensus estimates for the third quarter call for an EPS loss of $0.32 on revenues of $2.03 billion. Given the high levels of uncertainty about BlackBerry's future, those numbers are almost certainly just wishful thinking.

Shares are up about 0.6% in premarket trading, at $8.00 in a 52-week range of $7.27 to $18.32. The consensus analyst price target was around $8.75 before today's results were announced.

When's the perfect time to exit the business?

The magic age at which an adviser should exit the business is 59, according to a succession planning expert.

By 59, an adviser's maximum annual growth rate has peaked and is coming down, David Grau, founder and president of FP Transitions, said at the Financial Services Institute adviser conference in Washington today.

"By that time, we're not working so hard any more, and if you're going to get out, that's the time to do it," he said.

The peak annual growth rate occurs for advisers between 45 and 55, said Mr. Grau, whose company completed business valuations for about 1,000 firms last year. The average value of firms was between $1.4 million and $1.5 million.

Advisers looking for the greatest payout for their businesses should develop a team of internal investors that take over the business slowly, he said. Founding advisers ultimately can generate about six to seven times the firm's gross revenue, compared with an average of two times last year's earnings for advisers who sell their businesses, he said.

"The best value is internal, not external succession," Mr. Grau said. "The key is building a practice that takes care of you until you don't want to work any more."

Advisers should establish incentives for key employees to invest in the company through a portion of profit distributions. That way, the next generation is buying out the owner over time while still earning a salary that pays their bills, Mr. Grau said. This creates a team of professionals to take over the firm from the founding adviser.

Typically, younger planning professionals don't want to put out their own shingle, in part because they don't want to work 60 hours or more a week — the way they've seen founding advisers do over the years.

Younger professionals at advisory firms have been receptive to the idea of ownership through a portion of profit distributions about 80% of the time when approached with this concept, which admittedly will require them to sign promissory notes of at least 10 years' duration, Mr. Grau said.

Advisers should start thinking about their plan for succession when they are about 50 because it takes years to get the business and operational structures in place, he said.

China's factories gain steam

China's factories are picking up steam, adding to signs of an economic recovery.

HONG KONG (CNNMoney) China's factory activity accelerated more than expected in September, the latest sign of a rebound in the world's second-largest economy.

HSBC said on Monday that its "flash" measure of sentiment among manufacturing purchasing managers advanced to 51.2, the highest level in six months.

The index is an early gauge of the health of the sector, which is seen as a bellwether for China's export-heavy economy.

It had fallen below 50 for months, but finally perked up again in August with a final reading of 50.1. Any number over 50 indicates a faster pace of manufacturing activity.

China's factories saw "firmer footing" on the back of higher demand, which is expected to remain strong as government stimulus measures continue to boost the economy, said HSBC's China economist Hongbin Qu.

Related story: China's new richest man worth $22 billion

Factory activity gaining steam adds "further evidence to China's ongoing growth rebound," Qu said. "This will create more favorable conditions to push forward reforms, which should in turn boost mid- and long-term growth outlooks."

The mainland's benchmark Shanghai Composite Index spiked 1% on the news. Markets in Hong Kong, which were closed for the morning after a severe typhoon swept through the city, closed 0.6% weaker.

China showed slower growth in the first half of this year, initially sparking worries that it may not meet its 7.5% growth target for the year.

Those fears have begun to ease, with the HSBC report adding to a round of positive economic data, including strong industrial output earlier this month.

Related story: Chinese yuan now among most traded currencies

However, some economists are cautioning that the economic re! covery may lose momentum after November, when the Chinese government holds a party meeting.

Nomura economist Zhiwei Zhang said monetary policy may tighten as the government moves "to shift its focus away from the speed of growth, towards efforts to rebalance the economy and improve the quality of growth."

3 Oil and Gas Stocks to Buy Now

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This week, three Oil and Gas stocks are improving their overall rating on Portfolio Grader. Each of these rates an “A” (“strong buy”) or “B” overall (“buy”).

Chesapeake Midstream Partners (NYSE:) is bettering its rating of C (“hold”) from last week to a B (“buy”) this week. Chesapeake Midstream Partners owns, operates, develops, and acquires natural gas, natural gas liquids, and oil gathering systems, as well as other midstream energy assets in the United States. .

Oiltanking Partners, L.P. (NYSE:) is progressing from last week’s rating of B (“buy”) as the company improves to an A (“strong buy”) this week. Oiltanking Partners engages in the terminaling, storage and transportation of crude oil, refined petroleum products and liquefied petroleum gas. .

Cabot Oil & Gas Corporation (NYSE:) gets a higher grade this week, advancing from a B last week to an A. Cabot Oil & Gas is an independent company that develops, explores, produces and markets natural gas, and transports, stores, and gathers it for resale. .

Louis Navellier’s proprietary Portfolio Grader stock ranking system assesses roughly 5,000 companies every week based on a number of fundamental and quantitative measures. Stocks are given a letter grade based on their results — with A being “strong buy,” and F being “strong sell.” Explore the tool here.

Cisco Sales Lag Even Most Minimal Expectations

Cisco Systems Inc. (NASDAQ: CSCO) reported fourth fiscal quarter and full-year 2013 results after markets closed on Wednesday. For the quarter the networking giant reported adjusted diluted earnings per share (EPS) of $0.53 and $12.1 billion in revenues. In the same period a year ago, Cisco reported EPS of $0.48 on revenue of $11.88 billion. First-quarter results compare to the Thomson Reuters consensus estimates for EPS of $0.51 and $12.36 billion in revenue.

We noted in our preview of Cisco's earnings earlier today that the bar had been set very low for this quarter. Still, Cisco failed to jump over the revenue expectation bar even though it did beat the EPS estimate.

The company does not provide any outlook information until its conference call at 4:30 p.m. The consensus estimates for the second quarter of fiscal year 2014 call for EPS of $0.52 on revenues of $12.6 billion. Full-year 2014 estimates call for EPS of $2.10 on revenues of $50.78 billion. The consensus estimates are lower than they were at the end of the company's fourth quarter in July.

The company's CEO said:

While our revenue growth was below our expectation, our financials are strong, our strategy is strong and our innovation engine is executing extremely well.

Cisco boosted its $82 billion stock buyback plan by $15 billion. The company said there is now $16.1 billion left in the program.

The company noted that it completed its acquisitions of Sourcefire Inc. and Composite Software during the quarter.

Net income slipped 4.6% compared with the same period a year ago and EPS fell 5.1%. At best this was a poor showing for the networking giant.

Shares of Cisco are down about 3% in after-hours trading, at $23.30 in a 52-week range of $17.62 to $26.49. Thomson Reuters had a consensus analyst price target of around $26.50 before today's results were announced.

Can BP Surge Higher?

With shares of BP (NYSE:BP) trading around $46, is BP 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

BP is an integrated oil and gas company. The firm provides its customers with fuel for transportation, energy for heat and light, lubricants, and the petrochemicals products used to make items like paints, clothes, and packaging. It operates in two business segments: exploration and production, and refining and marketing. BP provides energy products to consumers and companies worldwide. Without the oil and gas products provided, many consumers and businesses would not be able to operate on a daily basis.

BP is reportedly in discussions to turn over control of a major oil and natural gas project in Libya, and is apparently negotiating a deal with Libya's state-owned National Oil Co. to transfer a stake of BP's two Ghadames blocks to its subsidiary, the Arabian Gulf Oil Co., and ultimately make it the operator of the venture. The move is a blow to the country, the Wall Street Journal reports, as it is trying to lure companies in to develop Africa's largest oil reserves.

T = Technicals on the Stock Chart Are Strong

BP stock has not made significant progress in recent years. The stock is currently trading near highs for the year. 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, BP 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 BP options may help determine if investors are bullish, neutral, or bearish.

	Implied Volatility (IV)	30-Day IV Percentile	90-Day IV Percentile
BP Options	17.43%	36%	34%

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

	Put IV Skew	Call IV Skew
December Options	Flat	Average
January 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 small 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 BP’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for BP look like and more importantly, how did the markets like these numbers?

	2013 Q3	2013 Q2	2013 Q1	2012 Q4
Earnings Growth (Y-O-Y)	N/A	233.67%	192.30%	-78.97%
Revenue Growth (Y-O-Y)	-50.71%	-0.74%	10.06%	7.51%
Earnings Reaction	4.98%	-3.20%	2.28%	1.35%

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

P = Excellent Relative Performance Versus Peers and Sector

How has BP stock done relative to its peers, Chevron (NYSE:CVX), Exxon Mobil (NYSE:XOM), Royal Dutch Shell (NYSE:RDSA), and sector?

	BP	Chevron	Exxon Mobil	Royal Dutch Shell	Sector
Year-to-Date Return	10.57%	11.72%	7.09%	-3.67%	7.42%

BP has been a relative performance leader, year-to-date.

Conclusion

BP is an oil and gas company that supplies energy products and services worldwide. The company is reportedly in discussions to turn over control of a major oil and natural gas project in Libya, and is apparently negotiating a deal with Libya's state-owned National Oil Co. The stock has not made significant progress in recent years, however, it's currently trading near highs for the year. Over the last four quarters, earnings have been rising while revenues have been mixed, which has left investors mostly pleased about recent earnings announcements. Relative to its weak peers and sector, BP has been a relative year-to-date performer. Look for BP to OUTPERFORM.

Home Sales Totals Hide Some Troubles

For the month of July, U.S. home sales reached an annualized rate of 5.5 million, up 4% from June and 11% higher than the rate in July 2012. But as with most things related to real estate, it is all about location, location and location.

All-cash transactions accounted for 40% of U.S. house sales in July, up from 35% in June and 31% higher than all-cash sales in July of 2012. Month-over-month increases in all-cash purchases in the country's largest metropolitan areas include Dallas (82%), St. Louis (66%), Los Angeles (32%), Seattle (21%) and Phoenix (21%).

The data comes from RealtyTrac's latest Residential & Foreclosure Sales Report released Thursday morning. A company executive puts the numbers in perspective:

Low inventory of homes available for sale is proving to be a double-edged sword in many local housing markets that have bounced back quickly from the real estate slump. Home prices are accelerating rapidly in these markets thanks to the combination of low supply and strong demand. However, counter to the national trend, sales volume in these markets is down even as the percentage of cash sales rises, indicating there is still strong demand but that buyers who need financing to purchase are increasingly left out in the cold.

The data indicates that sales are down in eight states, and among these are four states where house prices have risen the most:

California: sales down 17%, prices up 31% Arizona: sales down 11%, prices up 21% Nevada: sales down 7%, prices up 27% Georgia: sales down 2%, prices up 20%

Combined with higher interest rates, home price increases in some areas are forcing out some buyers who cannot pay cash for a house. RealtyTrac notes that sales to institutional investors (defined as non-lending entities that have purchased at least 10 properties in the past 12 months) accounted for 9% of all house sales in July, equal to the percentages in June and in July a year ago. The highest level of institutional purchases occurred in Atlanta (25%), Tampa (22%) and Palm Bay, Fla. (20%).

For the United States as a whole, the percentage of all-cash purchases has increased from around 30% in late May to 40% in July.

The number of buyers able to purchase a home in a noncash transaction may drop in January when new lending guidelines go into effect that require a 20% down payment on all loans and higher credit scores. RealtyTrac cites a real estate broker in Oklahoma City who said that as many as 25% to 43% of potential buyers will be unable to qualify for loans under the new rules.

Short sales accounted for 14% of all house sales in July, up from 13% in June and 9% in July of last year. The highest rates occurred in Nevada (35%), Florida (30%) and Maryland (20%).

Sales of bank-owned (REO) properties accounted for 9% of all house sales, the same percentage as in June and last July. The highest percentage of REO sales occurred in Detroit (26%), Modesto, Calif. (25%), Stockton, Calif., and Las Vegas (24% each).

Home sales are improving, but the improvement is being challenged by the effects of rising interest rates and low inventory of affordable houses. The housing market continues its slow, steady recovery, but faces a few headwinds as well.

3 Health Care Stocks Spiking on Big Volume

DELAFIELD, Wis. (Stockpickr) -- Professional traders running mutual funds and hedge funds don't just look at a stock's price moves; they also track big changes in volume activity. Often when above-average volume moves into an equity, it precedes a large spike in volatility.

Major moves in volume can signal unusual activity, such as insider buying or selling -- or buying or selling by "superinvestors."

Unusual volume can also be a major signal that hedge funds and momentum traders are piling into a stock ahead of a catalyst. These types of traders like to get in well before a large spike, so it's always a smart move to monitor unusual volume. That said, remember to combine trend and price action with unusual volume. Put them all together to help you decipher the next big trend for any stock.

With that in mind, let's take a look at several stocks rising on unusual volume today.

Sagent Pharmaceuticals

Sagent Pharmaceuticals (SGNT) is a pharmaceutical company engaged in developing, manufacturing, sourcing and marketing pharmaceutical products, with a specific emphasis on injectables. This stock closed up 1.1% at $23.58 in Thursday's trading session.

Thursday's Volume: 235,000

Three-Month Average Volume: 128,231

Volume % Change: 110%

From a technical perspective, SGNT rose modestly higher here right above its 50-day moving average of $22.32 with above-average volume. This move pushed shares of SGNT into breakout territory, since the stock took out some near-term overhead resistance at $23.50. Shares of SGNT are now quickly moving within range of triggering another near-term breakout trade. That trade will hit if SGNT manages to clear its 52-week high at $24.27 with high volume.

Traders should now look for long-biased trades in SGNT as long as it's trending above its 50-day at $22.32 and then once it sustains a move or close above its 52-week high at $24.27 with volume that's near or above 128,231 shares. If that breakout hits soon, then SGNT will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are its next major overhead resistance levels at $26.74 to its all-time high at $29.23.

Health Net

Health Net (HNT) is an integrated managed care organization that delivers managed health care services through health plans and government-sponsored managed care plans. This stock closed up 2.9% at $32.51 in Thursday's trading session.

Thursday's Volume: 1.17 million

Three-Month Average Volume: 665,534

Volume % Change: 65%

From a technical perspective, HNT jumped higher here right above its 50-day moving average of $31.37 with above-average volume. This stock has been uptrending for the last few weeks, with shares moving higher from its low of $29.11 to its intraday high of $32.80. During that move, shares of HNT have been consistently making higher lows and higher highs, which is bullish technical price action. That move is starting to push shares of HNT within range of triggering a big breakout trade. That trade will hit if HNT manages to take out some near-term overhead resistance levels at $33.61 to its 52-week high at $33.70 with high volume.

Traders should now look for long-biased trades in HNT as long as it's trending above its 50-day at $31.37 and then once it sustains a move or close above those breakout levels with volume that's near or above 665,534 shares. If that breakout hits soon, then HNT will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $38 to its three-year high at $41.22.

Cubist Pharmaceuticals

Cubist Pharmaceuticals (CBST) is engaged in the research, development and commercialization of novel therapies to treat unmet medical needs in acute care environment. This stock closed up 2.8% at $63.98 in Thursday's trading session.

Thursday's Volume: 3.48 million

Three-Month Average Volume: 960,861

Volume % Change: 239%

From a technical perspective, CBST jumped higher here right above some near-term support at $62 with heavy upside volume. This move briefly pushed shares of CBST into breakout territory, since the stock took out its former 52-week high at $65.55 after it hit an intraday high of $65.59. Shares of CBST closed well off those levels at $63.98 and volume was well above its three-month average action of 960,861. This brief breakout could be signaling a larger move higher for CBST since its coming out of a recent consolidation pattern that saw CBST trade between $60 on the downside and $65.55 on the upside.

Traders should now look for long-biased trades in CBST as long as it's trending above some key near-term support levels at $62 or above $60, and then once it sustains a move or close above its new 52-week high at $65.59 with volume that's near or above 960,861 shares. If we get that move soon, then CBST will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $70 to $75.

To see more stocks rising on unusual volume, check out the Stocks Rising on Unusual Volume portfolio on Stockpickr.

-- Written by Roberto Pedone in Delafield, Wis.

The Boeing Company (BA): Why You Should Look At Boeing's Defense Business?

There are lots of reasons to like shares of Boeing Company (NYSE: BA), but when was the last time that the company's defense business was on the short list of reasons to own the stock.

With so much of the story of Boeing wrapped in the potential of the commercial aircraft business, it's no wonder that there tends to be little said of the defense unit (Defense, Space and Security) outside of a passing comment about a recent win or a program sun-setting or the occasional poke of the business to ensure there isn't excessive downside in sequestration.

Given a closer look, much of the upside versus expectations seen quarter-to-quarter in the last couple years has come from performance in the defense business.

[Related -The Boeing Company (BA): Lost JAL Order To Airbus Amid 787 Woes, More To Come?]

"Integrated Defense Systems (IDS) on a number of performance measures has been among the top large defense businesses in the US (with those more pure-play defense stocks up 30-50% on the back of strong cash dynamics and a "less-bad" down cycle environment than feared)," Deutsche Bank analyst Myles Walton wrote in a note to clients.

The P-8 and KC-46 Tanker are the two programs that are in the portfolio as foundations of growth in the next 5years while the UCLAS (Unmanned Carrier Launched Airborne Surveillance) and the Long Range Strike bomber are the two opportunities that the company needs to solidify its portfolio in its post-C-17 (and potentially F-15/F-18) world through the end of the decade.

[Related -The Boeing Company (BA): Up 50% Already, This Stock Could Be The Dow's Biggest Gainer Of 2014]

"The P-8 was awarded to Boeing in 2004 and represents a potential $25B program with the P-8 procurement budget set to double from FY!2 to FY15," Walton said.

The good news is that the program seems to be hitting all of its milestones on-time with little in the way of obvious performance issues. The 12th P-8 was delivered recently to the Navy out of a total of 117 plann! ed to be bought by the service.

Similarly, the KC-46 is one of the top-three priorities for the Air Force and, in fact, is the #1 priority for the Air Force under sequestration as a program to protect given what the Air Force views as a favorable contract for the tax-payer.

"With the development program expected to stretch out another couple of years, there is still risk that could materialize. However, the $47B program could change columns for investors from a risk to an opportunity as the Air Force starts to pick-up production options in the next couple of years," Walton noted.

The two biggest pursuits for Boeing defense are the Long Range Strike (i.e. bomber) and UCLASS (Unmanned Carrier Launched Airborne Surveillance and Strike System). These programs combined will be roughly the same level of planned F-35 funding (DoD only) over the timeline displayed, which highlights the potential significance to the winner.

Looking ahead, the biggest challenge facing Boeing defense is working through the transition of some of its more mature programs to either lower rates or production cessations. The last C-17 is planned to roll off the assembly line at the end of 2015. Simultaneous to that the V-22 production rate will likely be in the low-to-mid 20s vs. today's 40 per year.

"We estimate the revenue headwind from the two programs is $2.5-3B. Offsetting these two roll-offs are the growth opportunities afforded by the P-8 and KC-46 Tanker program," Walton noted.

At the same time, the company is working to maintain its strong F/A-18/E/A-18 offering, as well as its F-15 and Rotorcraft portfolio.

The key to management of platform transitions is the behavior of the defense unit's margins. On that topic, management is confident that the margin profile of the defense business will be maintained/improved over the next several years despite the program transitions.

The company has been successful to date in pulling out $2 billion to $3 billion in cost structure, and there ! appears t! o be another $2 billion in costs in the next couple of years to take out.

"Boeing's Partnership for Success has received quite a bit of attention as a tool management is using with suppliers to reduce overall cost and improve its quality of products. Of the top-20 Boeing suppliers, over three-quarters seemed to have a full developed strategy while the next 100 suppliers have recently had their engagement with Boeing on what their role might entail," Walton wrote.

The NSS and GSS segments account for half of IDS sales and profit and so as much as the Military Aircraft segment, these two units play a role in keeping defense from being a distraction to the commercial aircraft driven thesis.

The most important takeaway from a look at Boeing's IDS business it that it is unlikely to get in the way of the strong commercial story and is more likely to secure a bit of upside opportunity to expectations.

"The risk on the C-17 production wind-down and the ability to absorb the absence of that high margin mature production program is the highest risk in our view from a production perspective while keeping the KC-46 Air Force Tanker on track is the most important from a fixed price development risk perspective," Walton added.

Nevertheless, upside opportunity from the defense unit could come from the company's continuous cost actions allowing margins to continue at pace or even have some upside. 

Disney: Turn That Frown Upside Down

Last night, Shares of Walt Disney (DIS) were trading down more than 2% after the house built by Mickey Mouse reported its fourth-quarter results. Today they’re up more than 2%. What gives?

ASSOCIATED PRESS

On the surface, Disney’s earnings were not so bad. One might even call them good. Disney reported a profit of 77 cents, beating estimates for 76 cents, on sales of $11.6 billion, ahead of analyst estimates for $11.4 billion. But investors honed in on the operating profit at Disney’s television networks, which came in at $1.28 billion, worse than what some analysts had expected.

The network results, however, might not have been as bad as they first seem. Wunderlich’s Matthew Harrigan explains:

Cable network operating income fell 7% to $1,284mm in FQ4 simply as a result of the $172mm reduction in recognition of previously deferred ESPN fees for programming delivery commitments.Sans this effect, operating income would have increased by $77mm or nearly 6%. CFO Jay Rasulo suggested on the CC that normalized ESPN and Disney Channel profitability for the core networks was up high single and low double digits for the period. Another distortion was from Lifetime’s investment in a new German free to air channel.

And in a move that seems straight out of the Passover Haggadah, where rabbis manage to turn 10 plagues into 250, Citigroup’s Jason Bazinet ups the ante:

…we think the gap can be explained by three drivers:1) $172 million reduction in deferred affiliate fees, 2) $14 million y-o-y decline in income of investees from A&E, 3) Approximately $25 million investment in launch of German free-to-air channel. Absent these three factors, Cable Network EBIT would have grown about 9%. And, none of these three items – ESPN deferral, A&E decline or FTA launch costs – is recurring. As such, we think the Cable Network EBIT miss is not indicative of future EBIT growth for ESPN or the broader Cable Networks segment.

While the top-line and EPS beat expectations, results at Cable Network missed expectations. We aren't worried by the miss. It's apt to prove transitory. But, if Mr. Market sells first – and asks questions later – we'd be buyers into that weakness.

Investors appear to agree. Shares of Disney have gained 2.1% to $68.54 at 2:02 p.m., joining a strong-performing group of stocks today. CBS Corp (CBS) has advanced 2.3% to$58.20, Twenty-First Century Fox (FOXA) has risen 2.9% to $33.75 and Comcast (CMCSA) is up 1.7% at $48.06.

Not able to save properly? What's your excuse?

When it comes to saving individuals usually have a ready reckoner of standard excuses. While some reasons are genuine others can only be classified as the dog-ate-my-homework variety in other words there is lack of intent.

Saving is very important in fact it must come to individuals as simply as breathing or even as necessary as breathing. Failure to save can lead to financial ruin. The moment investors understand this simple fact, they will put an end to excuses and take deliberate steps towards saving.

When they are young, just starting out in their career paths, individuals do not place a lot of importance on providing for financial security.

We have seen delaying financial planning only transfers the pressure to the later years when individuals have the added responsibility of managing families, buying bigger houses etc, which squeezes the available surplus.

Also studies have shown that increasing the contributions in the future does not help bridge the gap created by delayed investing.

So why do individuals delay planning for their finances? What are their biggest excuses?

We list the four most oft-cited excuses for not saving:

1. Higher expenses
Studies in US markets have shown that over 40% of workers cite higher living expenses such as rent, lifestyle expenses, and household expenses amongst others as a hindrance towards saving.

While there can be no taking away from the fact that expenses have spiked over the years, this cannot be a reason to skip saving.

From a young age, individuals must consider paying themselves first by saving and then providing for expenses from available surplus and not the other way round.

2. Too much debt
Another excuse that comes naturally is I have too much debt and can't think of saving.

Individuals have loans personal loans, home loans, auto loans, even student loans for their own studies.

Then of course, there is credit card debt.

The debt burden shackles the individuals' finances not allowing them to think beyond paying off dues.

To be sure, it is prudent financial planning to pay off debt first. However, individuals must unearth the surplus, even if it calls taking up an additional part-time job or freelance work, to start an investment plan with basic contribution.

This can be raised later as the debt declines. 

3. Inability to understand the investment plan
This qualifies as the dog-ate-my-homework excuse. In other words, they show lack of intent more than anything else.

While some investment plans are confusing and intricate, they cannot be cited as reasons for not investing. Either such plans are not meant for you in the first place, or they can be understood by discussing the same with your financial planner.

If crunching numbers and financial planning is not your thing or stresses you out consider engaging a reputed financial planner who can prepare a financial plan for you that takes into consideration your financial objectives and risk profile.

4. I am never going to retire
Lot of individuals love the work they do, so much so they cannot picture themselves retiring.

But really, retirement is not always by choice. At times individuals are forced to retire because they are ill, get disabled or are simply laid off. Then there is the retirement age limit when you must retire no matter how much you love your job.

So individuals will in fact retire in the future, whether they like it or not.

And it is for this eventuality that they must plan deliberately. So it is a good idea to start saving towards retirement earlier on regardless of whether you have plans to retire or not. At least you will live secure in the confidence that you have a safety cushion for emergencies.

Attaining financial independence or complete 'nirvana' is a compelling reason for one to start planning for your finances and start saving.

The author is Senior VP & Business Head at Edelweiss Securities.

Ignore Whiny Wine Headlines — Put Your Money Into the Hard Stuff!

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A wine shortage? Say it ain't so.

Alas, one might be upon us. Production has been falling since 2005, even while demand has held steady. The result has been a widening gap between supply and demand that gave us a shortfall of about 300 million cases last year, according to Morgan Stanley.

The culprits? Rising demand from the U.S. and China and falling production in France, Italy and Spain, which collectively account for just under half of all world production, according to the Wine Institute. (Interestingly, though it is the No. 3 producer, Spain has more acreage "under vine" than any other country in the world. It appears France and Italy enjoy higher yields on their grape vines.)

Writing for Reuters, Felix Salmon takes issue with some of Morgan Stanley's numbers and notes that strong production in 2013 has alleviated any immediate risk of a shortage. Based on my own anecdotal observations about the retail price of wine (I've been known to buy the occasional bottle), I'm inclined to agree with Mr. Salmon.

But whether or not we see a shortage in the years ahead, I do expect demand to be stronger than ever for one major reason: growth in Chinese wine consumption.

Chinese consumption has doubled twice in the past five years. By 2016, China is expected to be the biggest consumer of wine in the world, out-drinking even the United States and France.

So as investors, how can we profit from this trend?

Wine Stocks Few and Far Between

Sadly … outside of opening a vineyard in China, your options are fairly limited.

Publicly traded vineyards are rare and tend to be low-margin businesses. And outside of the ultra-high-end vineyards such as Chateau Lafite Rothschild (which is wildly popular as a status symbol among China's elite), most wines lack the brand recognition of beer and spirit brands.

I wrote about this earlier this year. Discussing the struggles of Constellation Brands (STZ), the largest publicly traded winery, I said:

“Outside of, say, Coca-Cola (KO), beer and spirits are probably the most recognizable and valuable brand names in existence. Not surprisingly, premium beer and spirits businesses tend to enjoy high margins and high returns on equity relative to their peers.

Wine is a different story. The attractiveness of a given vineyard varies from year to year, and few have national or international brand awareness. Wine connoisseurs know their favorite vintages, but there is little brand loyalty at the mass-market level. For a company of Constellation's size, wine is a much harder business to operate.”

Think about it. Off the top of your head, how many beer brands can you name? A dozen or more without even having to strain? Now … how many wine labels can you name?

In the Morgan Stanley report that Salmon picks apart, the authors recommend Treasury Wine Estates (TSRYY), an Australian winery. The shares are a little rich for my liking, trading hands at 70 times trailing earnings and 18 times expected 2014 earnings, though they do yield a respectable 3% in dividends.

Me? I prefer to avoid wine stocks altogether and focus instead on spirits.

Go With Booze Instead, Buy Diageo

I've recommended Diageo (DEO) off and on for years, and I still consider it one of my favorite long-term holdings.

Diageo is the world's largest purveyor of spirits, and its brands include Johnnie Walker, Crown Royal, Smirnoff and scores more.

Diageo’s branding helps it to generate returns on capital that are consistently three times as high as those of Constellation Brands (see chart). Diageo also has grown its top-line sales by nearly half since 2008 — and the past five years have been rather challenging for most consumer-related businesses.

Much of this growth has been due to high demand from emerging markets, which already constitute 42% of Diageo's sales and continue to take a bigger slice every year.

As incomes continue to rise in China, India, Latin America and other brand-conscious emerging markets, so do standards of taste. Ordering a premium spirit or offering a bottle as a gift is a sign that you have "made it" in life. This is a long-term macro theme with decades left to run.

I also should add that Diageo is an International Dividend Achiever, meaning the company has raised its dividend for a minimum of five consecutive years. I expect Diageo to continue raising its dividend at a nice clip in the years ahead. DEO currently yields 2.7%.

I won't say this about too many companies, but Diageo stock is something you can buy and forget. I recommend the stock for your core, long-term portfolio — and I also recommend you take the time to enjoy a bottle of Black Label, preferable with full-bodied cigar.

And if Diageo performs as I expect, use your dividend proceeds to upgrade to a bottle of Blue Label.

Charles Lewis Sizemore, CFA, is the chief investment officer of the investment firm Sizemore Capital Management. As of this writing, he was long DEO. Click here to receive his FREE 8-part investing series that will not only show you which sectors will soar, but also which stocks will deliver the highest returns. This series starts Nov. 5 and includes a FREE copy of his 2014 Macro Trend Profit Report.

Time to Trickle Into Lackluster Dry Bulk Shippers (NEWL, DRYS, FREE)

October wasn't an easy month to own FreeSeas Inc. (NASDAQ:FREE), NewLead Holdings Ltd (NASDAQ:NEWL), DryShips Inc. (NASDAQ:DRYS), or any maritime shipper for that matter. They were all down rather sharply after heroic runups in September. DRYS fell 22% last month. NEWL slumped 41% in October. FREE gave up 44% of its value last month. What happened? After all, these same stocks were among some of the hottest names in September. In simplest terms, what happened here is what happens all too often... the market "got it right" in terms of the premise, but overdid it. Now that the dust is settling though, the undertow is kicking in again, but this time at a more reasonable/sustainable pace.

At the heart of the runup and subsequent pullback from DryShips, NewLead Holdings Ltd, and FreeSeas - and again, most of the dry goods shipping stocks - is the Baltic Dry Index... a measure of the change in prices to charter a dry-bulk-carrying vessel. These prices have been depressed for years, with the index falling from more than 11,000 in the heydays of 2008 to the 900-ish area for the better part of the last year and a half. A funny thing happened in June, though. Demand for shipping services finally caught up with the supply, and companies like NEWL, FREE, and DRYS got into a position (at least in investors' minds) where they could start to charge what they needed to charge to remain profitable rather than flounder at the mercy of companies that ship dry goods. Between late-May and late-September, the Baltic Dry Index had run from 812 to 2084, with most of the industry's stocks finally getting on board with the runup beginning in September.

It would, in retrospect, be the exact worst time for any of those names to offer hope to patient investors. Since then (through the middle of last week) on the heels of almost sixteen straight days of declines, the BDI has fallen back to 1480, and dragged DryShips, NewLead Holdings Ltd, and FreeSeas lower with it.

Fast forward to today... well, late last week anyway. It was subtle, but on Thursday and Friday last week, the Baltic Dry Index inched higher, from that 1480 mark to 1525. It's not a huge leap, but it's the biggest and best two-day stretch we've seen from index in more than a month, and it may well be a sign that the "ebb" portion from the ebb and flow pattern is now complete, and the index's true direction - a bullish one - is starting to unfurl again. Translation:  NewLead Holdings Ltd, DryShips, FreeSeas, and all the other stocks that are subject to the Baltic Dry Index's movements are 'buys' again, as this bigger-picture rebound continues to materialize.

And just for the record, yes, there are more underpinnings to the Baltic Dry Index rally than just a little fortuitous volatility, for reasons described here. Several other supportive clues are finally falling into place as well.

As for how it all happened (the BDI's explosive rise in September and subsequent lull in October), shipping customers can fall into the same panic trap that investors can. Fearing a rapid and sustained rise in the cost of charter rates, many companies locked in still-good prices in September while they felt like they were at palatable levels. That flood of "better sooner than later" buying, however, is largely what pushed shipping prices up as far as they went. After a month of it, these customers finally realized that while the shipping market is getting better, it's not in meltup mode. That's when prices started to ebb. The basic long-term pillars of the rise, however, remain in place, which makes NEWL, FREE, and DRYS "buy on the dip" kinds of stocks.

For more trading ideas and insights like these, be sure to sign up for the free SmallCap Network newsletter.

Emerging Markets Rally Worries Some Analysts

Investors have rediscovered developing countries, sending their stocks up 16%, as a group, since late June.

A growing number of analysts who follow these countries, known in the trade as emerging markets, find that troubling. Their message: Proceed at your own risk.

Emerging markets are exciting to investors because for much of the past decade, EM stocks and bonds delivered the big gains. Many investors still are nervous about U.S. stocks, even though many major U.S. indexes are in or near record territory.

In the early 2000s, many investors developed a reflex. When they want to take a risk and add some pop to their portfolios, they put a little money in emerging markets like India, Brazil, Turkey or China.

These analysts are warning that things have changed.

"It is certainly going to be a much more volatile ride than most people expect," says Manoj Pradhan, global emerging-markets economist at Morgan Stanley.

Mr. Pradhan recently wrote a report entitled, "EM—Is the Worst Behind Us Now?" His conclusion: "The worst is not behind us: In fact, things likely have to get worse so they can then get better."

Nimble short-term speculators may profit in volatile emerging markets, say Mr. Pradhan and other worried analysts. But investors with two-year outlooks could feel some pain.

Not everyone agrees with this analysis, of course. Bullish investors point out that developing countries always look unstable. They still are likely to grow faster than the U.S. and Europe. If the world economy is more resilient than the doomsayers think, the developing world will benefit, these analysts say.

Emerging markets have far more of the world's economic output than they do stock-market capitalization, meaning stock values should grow, notes Jason Thomas, research director at Carlyle Group, which oversees $180 billion. Any stock declines "provide attractive opportunities for investors to diversify into" emerging markets, he wrote in a report this month.

The risk is that the ride will be bumpy.

"The fundamental backdrop that led us to be so concerned about emerging markets in the first place hasn't changed a lick," says Richard Bernstein, founder of Richard Bernstein Advisors, which oversees $1.8 billion in New York. Inflation and corporate-earnings disappointments have been worse in the developing world, he says.

"U.S. small stocks are a better growth story than emerging markets," based on five-year forecasts, he says.

The worriers identify three big problems. First, the global economy has cooled and so has the global export boom that fueled developing-world growth. Future growth requires a shift toward spending by developing countries' own citizens, a painful, time-consuming transition.

Second, stock gains and business investment in many developing economies relied on huge inflows of foreign money. Those flows got so big that it will be hard for them to grow as before. Few countries are ready to shift to homegrown financing.

A third problem is rising interest rates. The U.S. Federal Reserve and other central banks have held down interest rates around the world, masking some of the weakness in the developing world's finances. But the Fed intends to reduce its stimulus and let rates rise in the months to come. Some other central banks could follow.

Unless U.S. and global growth prove much weaker than economists expect, which would delay Fed action but create other problems for emerging markets, the interest-rate backdrop is about to get worse.

The flow of investment into developing-world stock funds reflects this interest-rate issue. Money drained out in May, when Fed officials hinted they would start reducing stimulus this year, according to EPFR Global, which tracks such flows. In mid-September, when the Fed delayed cutting its $85 billion in monthly bond-buying stimulus, inflows resumed, only to reverse direction at the end of October amid fear the Fed would reduce stimulus in December.

Some countries have handled the transition better than others. Mr. Pradhan likes South Korea, Taiwan, Poland, the Philippines, Mexico, Columbia and Peru. But that is it.

He advises staying away, in particular, from a group Morgan Stanley has dubbed the Fragile Five: India, Brazil, Turkey, Indonesia and South Africa.

Every country's situation is different. Brazil is a big commodity exporter, India exports services and China, which also concerns Mr. Pradhan, imports commodities and exports manufactured goods.

Neil Shearing, chief emerging-markets economist at Capital Economics in London, is worried about all four of the big economies that got the most investor attention: Brazil, Russia, India and China, a group that was dubbed the BRICs.

Together, they account for one-quarter of world economic output, and they all have fundamental problems, he says. "Growth there will be slower than in the previous decade," he says.

Russia depends too much on high energy prices, Mr. Shearing argues. China still relies too heavily on cheap credit and investment in heavy industry and real estate. Brazil and India, as well as Turkey, Indonesia and South Africa, are too dependent on foreign money.

This was all right when foreign capital was cheap, export demand was rising fast and foreigners were racing to invest. "We are getting to the end of that era," Mr. Shearing says.

He likes emerging markets in Eastern Europe, but not much else.

As long as the Fed keeps interest rates low, many emerging markets may not face a crunch. The Fed's monthly $85 billion cash injections keep global financial markets humming.

Uncertain U.S. growth and the financial mess caused by Washington's squabbles put a hold on Fed action in September. But some economists think recent signs of U.S. strength, notably in manufacturing, could push the Fed to scale back, or taper, its spending in December or the first months of next year.

"Next year, once the Fed starts tapering and yields rise, we are going to see pressures in the emerging markets," says Alberto Ades, head of fixed-income and foreign-exchange strategy for emerging markets at Bank of America Merrill Lynch.