Best Auto Car Show: May 2014

Saturday, May 31, 2014

Lockheed Martin Keen on Acquiring This Space Firm

American aerospace and defense giant Lockheed Martin (LMT) recently announced its plans of acquiring the satellite wing of Astrotech Corp. (ASTC), Astrotech Space Operations. Lockheed expects to close the deal by the third quarter of the current year. After the deal closes, Astrotech Space Operations would become the wholly owned subsidiary of Lockheed Martin and would operate under the company's Space Systems business segment.

The Deal

According to Astrotech, Lockheed Martin has made an acquisition proposal worth $61 million. But the Maryland-based company has not yet mentioned details regarding the pricing of the deal in the press release. Astrotech's headquarter is in Titusville, Florida. Its division Astrotech Space Operations' know-how lies in the area of "final stages of launch preparation", which would help balance Lockheed Martin's expertise in launching solutions with value added services, and satellite designs. Astrotech Space Operations offers launch services to commercial and government satellite, covering close to 90% of the satellite market in the U.S.

The company already has huge presence in this space with vast satellite operations, in comparison to the operations of Astrotech. But there definitely lies a good reason why Lockheed selected to acquire Astrotech, given that the company is extremely particular about businesses that it plans to takeover. In the press release Lockheed Martin mentioned that the acquisition proposal is subject to Astrotech shareholders approval.

Once that is done, the deal would close and Astrotech would become part of the aeronautics giant. Astrotech Space Operations' top bosses are quite positive about the deal, which is evident from the statement the company's Senior VP Don White made saying "joining Lockheed Martin will benefit our customers and our employees." Following the announcement of Lockheed's intension to buy the assets of the company, shares of Astrotech jumped from $2.25 to $4.59 intraday. The proceeds from the transaction would be used by the company to invest in growth areas such as developing the product line of detect mass spectrometer.

Growing Competition

The aerospace sector is increasingly becoming competitive. The acquisition proposal comes at a time when another Dulles-based industry player Orbital Sciences (ORB) plans to combine with the defense segment of Alliant Techsystems' (ATK) and emerge as a stronger new entity named Orbital ATK. The defense space has been vastly dominated by the United Launch Alliance, which is a joint venture between Chicago-based aircraft major Boeing (BA) and Lockheed Martin. However, after the $5 billion merger deal to form Orbital ATK is complete, the industry will grow more competitive.

The Astrotech deal would not add much in terms of revenue or profits to the company's financials, but it definitely portrays Lockheed's focus on developing its space operations.

Departing Thoughts

The acquisition is a tiny move made by Lockheed to strengthen its space operations, but from the point of view of Astrotech, the deal looks like a good one for its shareholders. Even Lockheed's space operations would get good support and streamline further. There have been worries regarding the cut in the U.S. defense budget in the recent past, but there's no stopping Lockheed's shares that rose more than 50% in the last one year. Overall, the deal might be a small one, but it looks like a well thought out move.

About the author:Quick PenA seasonal writer with a Management Degree in Finance and interests in automotive, technology, telecommunication and aerospace sectors.

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AdviceIQ: Springtime financial cleanup

The weather is finally warm again, and here comes spring cleaning. Clean up your finances, too, before the hectic activity and recreation of summer.

Start with these pointers:

Discuss main financial goals with your spouse or significant other– and write them down. Whether saving for a downpayment on a house, paying off outstanding debt or creating a rainy day fund, everyone has a financial goal or two for the year. Writing down your goals helps you think through the details and outline a plan to meet those goals.

Important aspects of your financial life together include credit scores, future big outlays of cash and potential future income. Make sure, too, that you and your significant other are on the same page concerning these goals.

Track your money. On the left side of a piece of paper write down all your sources of income. Look at your tax forms, such as your W-2 wage statement or Internal Revenue Service form 1040, to accurately assess your income.

On the right side of the same paper, write all your financial obligations. Your paystub quickly tells you how much you shell out for health insurance, put toward your 401(k) retirement plan and set aside for taxes.

Don't forget to include the expense of your other insurance policies, mortgage, car payments, student-loan debt and your other financial obligations throughout the year.

Compare the two sides.

Plan for taxes, savings and life. When looking at your gross income, remember that approximately 30% comes right off the top for taxes (federal and state combined), 20% ideally needs to go toward such savings as an emergency fund and retirement assets and half goes to living expenses.

Your healthy financial plan – and future – hinges on this formula. Further, spending just 30% to 40% of your income during your working years on food, shelter, transportation, insurance, kid-related costs, entertainment and the like allows you to maintain your lifestyle in retirement.

Does your inflow exceed y! our outflow? If not, right the ship.

Insure what's important. Make sure you cover all your important financial assets with insurance, including your house, car and health. You also might want to investigate disability insurance and umbrella policies for further coverage. Disability furnishes you income if you can't work, and umbrella coverage protects you against lawsuits connected with your property.

Do you have enough life insurance? For many families, the most cost-effective life option islevel-term with a 10- to 30-year term. If your life insurance needs recently increased – due perhaps to more children or other change in your lifestyle – revisit your coverage amounts.

Many online calculators can help you determine your needed coverage. If you don't work with an insurance agent, it's fine to shop for term life policies online at such sites as matrixdirect, accuQuote and QuickQuote.

Remember to budget for fun. Include a budget for warm-weather fun, from a trip to a local theatre to a vacation to Florida. In researching my latest book, You Can Retire Sooner Than You Think, I learned that happy retirees take nearly twice as many vacations a year as unhappy retirees. Consumer advocate Clark Howard offers great suggestions for traveling on a budget.

Winter's over. Take this moment to give your finances new life, too.

MORE: David John Marotta on tax brackets and capital gains

MORE: Sterling Raskie on the high price of waiting

MORE: Matthew Illian on the rise of mutual fund power

Wes Moss, CFP, is the chief investment strategist for Capital Investment Advisors and a partner at Wela Strategies, both in Atlanta, and is a member of the AdviceIQ Financial Advisors Network, which is a USA TODAY content partner offering financial news and commentary. Its content is produced independently of USA TODAY.

Friday, May 30, 2014

Angie Herbersâ€™ Firm to Merge With Wealth Management Marketing

After a “four-year, overnight merger” process, Angie Herbers Inc., led by Angie Herbers, and Wealth Management Marketing Inc., led by Kristen Luke, are merging to form a new, as-yet-unnamed company with 14 employees that will be based in San Diego.

Herbers, whose firm was founded 12 years ago (and who has been writing for Investment Advisor and ThinkAdvisor for nearly that long; view her most recent writings here), made that quip in an interview Thursday in which she explained the rationale for the merger and the offerings to advisors that the merged company will provide.

The merger is one of equals, with Herbers holding half of the new company’s stock and Luke holding the other 50%. “It’s a true merger,” said Herbers, “creating a new brand and a new name,” which will be rolled out either late this year or early in 2015. Herbers will be managing partner; she and her four employees will move from Manhattan, Kansas, to San Diego, where Wealth Management (founded in 2008) and its 10 employees (including Luke) is based.

“Kristen and I have worked with mutual clients for more than four years,” Herbers said, and “lots of clients told us we should merge; it took us four years for us to say ‘You’re right’” to those clients.

For clients, Herbers said, normally “I would come in at the very beginning and develop a strategy” to help create “great people, processes and procedures, M&A or a succession plan,” but then would refer to Luke’s firm for fulfilling an advisory firm’s marketing strategy.

“I was referring all this business to Kristen, and then we’d work together,” says Herbers, and that’s when clients would say “Why not work together under one firm that offers it all? Once we said yes, it became easy to put together” the merger.

Herbers admits, however, that while she helped “facilitate over 100 mergers” for her advisor clients, “it’s different when it’s your own.”

Why the merger? Herbers says she’s doing it “for myself and my employees and my clients,” since “the missing piece [at her firm] has always been the marketing strategy.” Moreover, she feels strongly that “the competitive landscape of the advisory industry is changing,” which means that for advisors “it’s harder to get new clients from referrals only,” which necessitates a rigorous marketing strategy. “I either had to do this as an advocate for my clients,” Herbers aid, “or send all that business to Kristen.”

Herbers says “our ultimate objective is to be the leading business management firm for independent advisors — for marketing, operations, recruiting and human capital, M&A and succession planning.”

So what’s the plan for two consultants? “We have a clear operational plan that will be rolled out in 2015. We don’t want to do it too fast; we’re asking our clients to change with us, so we need to give clients time to get used to having one firm” to work with.

The toughest part of the process turned out to be the most rewarding, she said. “I was worried” about asking the employees to relocate halfway across the country, Herbers said. “I offered moving packages, and they all agreed,” she says, which served as a “validation of what I worked all my career to accomplish: happy employees. It was the best moment of my professional life.”

---

Check out Should You Be Managing People? How to Tell by Angie Herbers on ThinkAdvisor.

Thursday, May 29, 2014

Staggering toll: Car crashes cost $871B a year

Highway crashes create an enormous economic toll on the lives of Americans, the National Highway Traffic Safety Administration says in a new study. The annual price tag for those crashes: $871 billion in economic loss and societal harm in 2010.

The total includes $277 billion in economic costs – nearly $900 for each person living in the USA – and $594 billion in societal harm from the loss of life and the pain and decreased quality of life because of injuries.

"No amount of money can replace the life of a loved one, or stem the suffering associated with motor vehicle crashes," U.S. Transportation Secretary Anthony Foxx said. "While the economic and societal costs of crashes are staggering, today's report clearly demonstrates that investments in safety are worth every penny used to reduce the frequency and severity of these tragic events."

A similar study in 2011 by auto club AAA found that each fatal crash in 99 urban areas arries an economic toll of about $6 million. That estimate was based on Federal Highway Administration data that place dollar values on 11 components: property damage; lost earnings; loss of household activities; medical costs; emergency services; travel delays; vocational rehabilitation; lost time at work; administrative costs; legal costs; and pain and lost quality of life.

NHTSA's study, "The Economic and Society Impact of Motor Vehicle Crashes, 2010," focuses on some of the behavioral factors that contributed to that year's 32,999 highway fatalities, 3.9 million injuries and 24 million damaged vehicles. It found that just three driver behaviors, speeding, drunken driving and distracted driving, accounted for 56% of the economic loss to the nation and 62% of the societal harm.

The breakdown:

•Speeding. Crashes involving vehicles exceeding the speed limit or going too fast for conditions accounted for 21% of the total economic loss and cost $59 billion. These crashes were responsible for $210 billion – or 24% -- of the overall societal har! m.

•Drunken driving. Crashes caused by drivers under the influence of alcohol accounted for 18% of the total economic loss from automobile wrecks and cost the nation $49 billion. These crashes were responsible for $199 billion – or 23% -- of the overall societal harm.

•Distraction. Crashes involving a distracted driver accounted for 17% of the total economic loss and cost $46 billion. These crashes were responsible for $129 billion – or 15% -- of the overall societal harm.

"We want Americans to live long and productive lives, but vehicle crashes all too often make that impossible," said NHTSA's acting administrator, David Friedman. "This new report underscores the importance of our safety mission and why our efforts and those of our partners to tackle these important behavioral issues and make vehicles safer are essential to our quality of life and our economy."

3 Big-Volume Stocks to Trade for Breakouts

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.

>>5 Stocks Insiders Love Right Now

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.

>>5 Large-Cap Trades for All-Time Gains

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

Sanchez Energy

Sanchez Energy (SN), an independent exploration and production company, focuses on the acquisition, exploration and development of unconventional oil and natural gas resources in the onshore U.S. Gulf Coast. This stock closed up 3.2% at $33.91 in Wednesday's trading session.

Wednesday's Volume: 2.28 million

Three-Month Average Volume: 1.01 million

Volume % Change: 123%

From a technical perspective, SN ripped sharply higher here with strong upside volume flows. This stock recently gapped up sharply higher from around $28 to its all-time high of $34.50 with monster upside volume. Following that move, shares of SN have pulled back to around $31 and subsequently started to bounce higher again and move within range of triggering a near-term breakout trade. That trade will hit if SN manages to take out Wednesday's intraday high of $34.18 to its all-time high of $34.50 with high volume.

Traders should now look for long-biased trades in SN as long as it's trending above $32 or $31 and then once it sustains a move or close above those breakout levels with volume that's near or above 1.01 million shares. If that breakout triggers soon, then SN will set up to enter new all-time-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $40 to $45.

Stryker

Stryker (SYK), together with its subsidiaries, operates as a medical technology company. This stock closed up 2.8% at $82.64 in Wednesday's trading session.

Wednesday's Volume: 5.22 million

Three-Month Average Volume: 1.51 million

Volume % Change: 239%

From a technical perspective, SYK gapped notably higher here right off its 50-day moving average of $79.94 with above-average volume. This gap pushed shares of SYK into breakout territory, since the stock took out some near-term overhead resistance levels at $81.44 to $82. Market players should now look for a continuation move to the upside if SYK manages to take out Wednesday's intraday high of $83.86 to its 52-week high of $84.85 with high volume.

Traders should now look for long-biased trades in SYK as long as it's trending above Wednesday's low of $81.61 and then once it sustains a move or close above $83.86 to $84.85 with volume that's near or above 1.51 million shares. If that move begins soon, then SYK will set up to enter new 52-week-high territory above $84.85, which is bullish technical price action. Some possible upside targets off that move are $90 to $100.

Qihoo 360 Technology

Qihoo 360 Technology (QIHU) provides Internet and mobile security products and services in the People's Republic of China. This stock closed up 5.7% at $95.14 in Wednesday's trading session.

Wednesday's Volume: 7.88 million

Three-Month Average Volume: 3.50 million

Volume % Change: 132%

From a technical perspective, QIHU gapped up sharply higher here right off its 200-day moving average of $88.77 and back above its 50-day moving average of $90.65 with strong upside volume flows. This gap is quickly pushing shares of QIHU within range of triggering a big breakout trade. That trade will hit if QIHU manages to take out Wednesday's intraday high of $96.40 to some more key overhead resistance at $96.77 with high volume.

Traders should now look for long-biased trades in QIHU as long as it's trending above Wednesday's low of $92.80 and then once it sustains a move or close above those breakout levels with volume that's near or above 3.50 million shares. If that breakout triggers soon, then QIHU will set up to re-test or possibly take out its next major overhead resistance levels at $105.50 to $110, or even $115.

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.

Wednesday, May 28, 2014

Rieder: Time to pass shield law for journalists

Last summer, supporters were confident that at long last the federal shield law for journalists would be enacted.

After a number of false starts, they were convinced that the stars were aligned and that a measure to ensure that journalists wouldn't have to choose between protecting confidential sources and going to jail would make it over the finish line.

The key factor was widespread revulsion at the Obama administration's treatment of journalists in overly zealous leak investigations. In September, by a 13-5 vote, the bill was approved by the Senate Judiciary Committee.

Since then, nothing. And news media organizations and First Amendment groups backing the bill fear the momentum of the summer of 2013 may have waned.

That would be bad. It's an important piece of legislation that's vital not only to journalists but, more important, to American citizens.

Confidential sources can be problematic. The transparency of attaching a name to information is obviously preferable. But in some cases, when sources may put their lives in jeopardy or risk losing their jobs by revealing information that's critical to the public interest, anonymity is a defensible cost of doing business. And a journalist should be able to protect that confidentiality without heading to the slammer.

REM RIEDER: Drop effort to make Times reporter testify

This is hardly an academic debate. Last July, the U.S. Court of Appeals for the 4th Circuit ruled that New York Times reporter James Risen would have to testify in the prosecution of former CIA analyst Jeffrey Sterling. If the U.S. Supreme Court rejects Risen's appeal, which would hardly come as a shock, the journalist will have to pick between giving up the source or heading to prison, as then-New York Times reporter Judith Miller did for 85 days in 2005.

Last July, Senate Judiciary Committee Chairman Charles Schumer, D-N.Y., assured me that the measure would "become law relatively quickly, by congressional standards." When I asked Schu! mer spokesman Matt House on Wednesday if his boss was still "confident," he responded, "We remain hopeful it will pass this year." Which is not quite the same thing.

He said he wasn't sure when the bill would be taken up. "Senate Republicans have been blocking bipartisan bills over non-related issues, but we're hopeful that won't happen with the media shield bill," House said.

Everyone seems to agree that more than 50 senators, a majority, are in favor. The problem, as Kevin Goldberg, legal counsel for the American Society of News Editors, points out, is that's not good enough these days. You need 60 votes to cut off debate if opponents try to block a measure.

Goldberg says the leadership wants to make sure those 60 votes are there. But finding out has been a challenge. (ASNE is a key part of the coalition of groups pushing the shield law).

It's the old chicken and egg conundrum. When you ask some senators if they will back the bill, they respond that they'll focus on it when it's heading for the floor. But Senate leaders, who don't want to see the bill tie up the world's greatest deliberative body, are reluctant to give it the green light until they are sure those 60 votes are locked up, Goldberg says.

Support tends to crest when something happens that underscores the urgency of the measure, as was the case last summer. But with time that support ebbs. That's why quick action at a flashpoint is key. The next such moment may come if the Supreme Court rejects Risen's appeal.

It's not like this is a radical idea. Forty-eight states and the District of Columbia have similar protection for journalists.

It's hardly a get-out-of-jail-free card. The law includes a balancing test, which means in some instances national security concerns will trump the shield law and a journalist will be required to testify.

And the Judiciary Committee did a good job of sorting out who is covered, a thorny issue in an era in which traditional journalists are hardly the only peopl! e carryin! g out the craft.

So let's stop fooling around. It's time for both houses of Congress to pass the law.

4 Stocks Under $10 in Breakout Territory

DELAFIELD, Wis. (Stockpickr) -- At Stockpickr, we track daily portfolios of stocks that are the biggest percentage gainers and the biggest percentage losers.

>>5 Stocks Set to Soar on Bullish Earnings

Stocks that are making large moves like these are favorites among short-term traders because they can jump into these names and try to capture some of that massive volatility. Stocks that are making big-percentage moves either up or down are usually in play because their sector is becoming attractive or they have a major fundamental catalyst such as a recent earnings release. Sometimes stocks making big moves have been hit with an analyst upgrade or an analyst downgrade.

Regardless of the reason behind it, when a stock makes a large-percentage move, it is often just the start of a new major trend -- a trend that can lead to huge profits. If you time your trade correctly, combining technical indicators with fundamental trends, discipline and sound money management, you will be well on your way to investment success.

>>5 Rocket Stocks to Buy for Short-Week Gains

With that in mind, let's take a closer look at a several stocks under $10 that are making large moves to the upside.

Cytokinetics

Cytokinetics ( CYTK), a clinical-stage biopharmaceutical company, focuses on the discovery and development of novel small-molecule therapeutics that modulate muscle function for the potential treatment of serious diseases and medical conditions. This stock closed up 4.7% to $5.17 in Tuesday's trading session.

Tuesday's Range: $4.95-$5.22

52-Week Range: $3.96-$14.28

Tuesday's Volume: 1.05 million

Three-Month Average Volume: 1.45 million

From a technical perspective, CYTK surged sharply higher here with decent upside volume. This spike higher on Tuesday is quickly pushing shares of CYTK within range of triggering a big breakout trade. That trade will hit if CYTK manages to take out Tuesday's intraday high of $5.22 to its recent gap-down-day high of $5.45 with high volume.

Traders should now look for long-biased trades in CYTK as long as it's trending above its recent breakout levels of $4.73 to $4.78 and then once it sustains a move or close above $5.22 to $5.45 with volume that hits near or above 1.45 million shares. If that breakout hits soon, then CYTK will set up to re-fill some of its previous gap-down-day zone from April that started above $13.

Procera NetworksPKT/">PKT) provides intelligent policy enforcement solutions based on deep packet inspection technology that enable mobile and broadband network operators and entities to manage and control their private networks. This stock closed up 6.2% to $9.85 in Tuesday's trading session.

Tuesday's Range: $9.38-$9.96

52-Week Range: $8.33-$16.48

Tuesday's Volume: 276,000

Three-Month Average Volume: 353,109

From a technical perspective, PKT ripped sharply higher here back above its 50-day moving average of $9.75 with lighter-than-average volume. This move also pushed shares of PKT into breakout territory, since it flirted with or took out some near-term overhead resistance levels at $9.52 to $9.89. Shares of PKT tagged an intraday high of $9.96 before it closed just below that level at $9.85. Market players should now look for a continuation move higher in the short-term if PKT manages to take out Tuesday's intraday high of $9.96 with high volume.

Traders should now look for long-biased trades in PKT as long as it's trending above Tuesday's low of $9.38 and then once it sustains a move or close above $9.96 with volume that hits near or above 353,109 shares. If that move starts soon, then PKT will set up to re-test or possibly take out its next major overhead resistance levels at $10.81 to $11.50, or even $12.

Avanir Pharmaceuticals

Avanir Pharmaceuticals (AVNR), together with its subsidiaries, is engaged in acquiring, developing and commercializing novel therapeutic products for the treatment of central nervous system disorders primarily in the U.S. This stock closed up 4.1% to $5.04 a share in Tuesday's trading session.

Tuesday's Range: $4.80-$5.09

52-Week Range: $2.62-$6.00

Tuesday's Volume: 3.72 million

Three-Month Average Volume: 3.09 million

From a technical perspective, AVNR spiked notably higher here right above some near-term support at $4.57 with above-average volume. This spike higher on Tuesday is quickly pushing shares of AVNR within range of triggering a major breakout trade. That trade will hit if AVNR manages to take out Tuesday's high of $5.09 to some more near-term overhead resistance at $5.22 with high volume.

Traders should now look for long-biased trades in AVNR as long as it's trending above Tuesday's low of $4.80 or above more near-term support at $4.57 and then once it sustains a move or close above those breakout levels with volume that hits near or above 3.09 million shares. If that breakout materializes soon, then AVNR will set up to re-test or possibly take out its 52-week high of $6.

On Track Innovations

On Track Innovations (OTIV) designs, develops and markets cashless payment solutions. This stock closed up 7.4% to $2.45 in Tuesday's trading session.

Tuesday's Range: $2.29-$2.47

52-Week Range: $0.91-$4.38

Tuesday's Volume: 464,724

Three-Month Average Volume: 195,738

From a technical perspective, OTIV ripped higher here with strong upside volume. This sharp spike higher on Tuesday is starting to push shares of OTIV within range of triggering a near-term breakout trade. That trade will hit if OTIV manages to take out some key near-term overhead resistance levels at $2.55 to $2.58 and then once it clears more resistance at $2.63 with high volume.

Traders should now look for long-biased trades in OTIV as long as it's trending above Tuesday's low of $2.29 or above more support at $2.20 and then once it sustains a move or close above those breakout levels with volume that hits near or above 464,724 shares. If that breakout triggers soon, then OTIV will set up to re-test or possibly take out its next major overhead resistance levels at $3.15 to $3.45.

To see more stocks that are making notable moves higher, check out the Stocks Under $10 Moving Higher portfolio on Stockpickr.

-- Written by Roberto Pedone in Delafield, Wis.

Tuesday, May 27, 2014

Stocks Going Ex-Dividend on Wednesday, May 28 (D, TSN, More)

Ex-dividend dates are very important to dividend investors, since you must purchase a stock prior to its ex-dividend date in order to receive its upcoming dividend payout. For more information, check out Everything Investors Need to Know About Ex-Dividend Dates.

Below are seven stocks going ex-dividend on Wednesday, May 28.

1. Dominion Resources

Dominion Resources (D) offers a dividend yield of 3.46% based on Friday's closing price of $69.32 and the company's quarterly dividend payout of 60 cents. The stock is up 7% year-to-date. Dividend.com currently rates D as “Recommended” with a DARS™ rating of 3.5 stars out of 5 stars.

2. Tyson Foods

Tyson Foods (TSN

Monday, May 26, 2014

Is Disney Stock Undervalued at Current Prices?

With shares of Disney (NYSE:DIS) trading around $60, is DIS 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

Disney is a diversified worldwide entertainment company. The company operates in five business segments: media networks, parks and resorts, studio entertainment, consumer products, and interactive. Disney offers entertainment that sends smiles to consumers across a range of countries around the world. Its movies and shows, theme parks, and products have remained a main attraction for many years and will continue well into the future.

Just recently, Disney has managed to beat Wall Street's expectations of earnings despite taking a massive hit on a floundering Lone Ranger movie. For the quarter the company estimated a 36 percent loss in operating revenue due to the film, and projects a loss on the film of $160 to $190 million in the fourth quarter.

T = Technicals on the Stock Chart Are Mixed

Disney stock has been exploding higher, in recent years. The stock is currently breaking down from a consolidation near highs so it may need some time to recover. 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, Disney is trading between its key averages which signal neutral price action in the near-term.

DIS

(Source: Thinkorswim)

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

	Implied Volatility (IV)	30-Day IV Percentile	90-Day IV Percentile
Disney Options	22.85%	50%	49%

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

	Put IV Skew	Call IV Skew
September Options	Steep	Average
October Options	Steep	Average

As of today, there is an average demand from call buyers or sellers and high demand by put buyers or low demand by put sellers, all neutral to bearish over the next two months. To summarize, investors are buying a significant amount of call and put option contracts and are leaning neutral to bearish 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 Increasing 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 Disney’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for Disney look like and more importantly, how did the markets like these numbers?

	2013 Q2	2013 Q1	2012 Q4	2012 Q3
Earnings Growth (Y-O-Y)	0.00%	31.75%	-3.75%	17.34%
Revenue Growth (Y-O-Y)	4.42%	9.61%	5.21%	3.42%
Earnings Reaction	-1.70%	-0.12%	0.42%	-5.95%

Disney has seen increasing earnings and revenue figures over the last four quarters. From these numbers, the markets have not been pleased with Disney’s recent earnings announcements.

P = Weak Relative Performance Versus Peers and Sector

How has Disney stock done relative to its peers Dreamworks (NASDAQ:DWA), Time Warner (NYSE:TWX), Twenty-First Century Fox (NASDAQ:FOXA), and sector?

	Disney	Dreamworks	Time Warner	Twenty-First Century Fox	Sector
Year-to-Date Return	22.04%	72.06%	26.70%	41.50%	33.79%

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

Conclusion

Disney is a global media company that provides entertainment to consumers around the world. Investors have not been pleased by a recent earnings release. The stock has been exploding higher — however, it recently broke below a consolidation range so it may need time to recover. Over the last four quarters, earnings and revenues have been rising but investors have grown to expect more from the company. Relative to its peers and sector, Disney has been a weak year-to-date performer. WAIT AND SEE what Disney does this coming quarter.

Compliance Prosâ€™ Pay, Budgets Getting Chopped

Despite wearing multiple hats and dealing with an onslaught of new regulations, compliance officers’ paychecks are dwindling and their budgets are being slashed.

A just-released survey by National Regulatory Services, Moving in the Wrong Direction: Compliance Spending and Compensation in an Era of Enhanced Regulation, which polled 432 compliance professionals working for investment advisory and other financial services firms, found that compliance pros are getting paid less while being tasked with increasing amounts of non-compliance-related work.

The survey results are “quite alarming,” John Gebauer, managing director of NRS, told ThinkAdvisor in an email message. “The compliance officer is charged with very important tasks, such as spotting risk and pursuing the policies and procedures that bring such exposures to acceptable levels as deemed by agency regulations and local and federal laws.”

When asked about their daily duties, 48% of the respondents said they spent less than 50% of their time on actual compliance issues.

The fact that compliance officers are “being tasked with non-compliance roles and considering the lack of compensation growth in the space during this time of increasing regulation, the industry seems to be moving in the wrong direction,” Gebauer says.

The majority of those polled — who have been working in the compliance field for an average of 11 years, and have been in their current role for an average of seven years — were full-time employees, with 55% serving as chief compliance officers, a decrease from the 66% polled in 2011 who classified themselves as CCOs. Sixty-eight percent of the respondents work for investment advisory firms.

The average current compliance officer’s salary is $119,710, down slightly from the average pay of $119,783 reported in 2011, the survey found.

But compliance officers working in small firms — usually the ones juggling the most duties — earned significantly less per year ($91,674) than those employed in medium-size firms ($133,439) or larger firms ($127,745).

Regionally, compliance officers in New York earn the most at $177,895, while those in Michigan earn the least at $83,684.

Compliance officers’ budgets are being chopped as well. The average overall compliance budget dropped in 2012, down to $133,226 in 2012 from $139,931 in 2011.

But how compliance officers are allocating those resources remained much the same in 2012 as the previous year, the survey found, with technology and software outlays totaling around 35%, education and training about 25%, consulting about 25% and outsourcing making up the difference at approximately 15%.

The survey also found that compliance officers are seeing a “significant drop” in incentive program participation, with involvement in monetary bonus, profit sharing and stock option programs dropping from 60% in 2011 to 51% in 2012.

---

Check out SEC Sanctions Portfolio Manager for Lying to Chief Compliance Officer on ThinkAdvisor.

Marvell Technology Group Ltd (MRVL) Earnings Report: Should You Overreact? XSD, SOXX & SOXL

On Thursday after the market closed, mid cap fabless semiconductor stock Marvell Technology Group Ltd (NASDAQ: MRVL) reported earnings and was slipping in after hours trading, meaning its worth taking a closer look at those earnings along with the performance of potential semiconductor benchmarks like the SPDR S&P Semiconductor ETF (NYSEARCA: XSD), iShares PHLX SOX Semiconductor Sector (NASDAQ: SOXX) and Direxion Daily Semiconductor Bull 3X Shares (NYSEARCA: SOXL). In case you aren't familiar with the term fabless semiconductor, it's a business model that involves the outsourcing the manufacturing of silicon wafers. Most semiconductor companies are actually fabless because of the high cost of building a facility and manufacturing fab. Therefore, fabless semiconductor companies can concentrate on the design and marketing of chips while outsourcing the actual production to larger foundry companies.

What is Marvell Technology Group?

Founded in 1995, mid cap Marvell Technology Group is a leading fabless semiconductor company that ships over one billion chips a year and has international design centers located in China, Europe, Hong Kong, India, Israel, Japan, Malaysia, Singapore, Taiwan and the US. Specifically, Marvell Technology Group's expertise in microprocessor architecture and digital signal processing, drives multiple platforms including high volume storage solutions, mobile and wireless, networking, consumer and green products.

As for potential semiconductor performance benchmarks, the SPDR S&P Semiconductor ETF tracks the S&P Semiconductor Select Industry Index through approximately 51 holdings; the iShares PHLX SOX Semiconductor Sector tracks the PHLX SOX Semiconductor Sector Index through 31 holdings; and the Direxion Daily Semiconductor Bull 3X Shares seeks a return that is 300% of the PHLX SOX Semiconductor Sector Index though the use of leverage.

What You Need to Know or Be Warned About Marvell Technology Group

Marvell Technology Group reported a 3% revenue increase to $958 million from $932 million in the fourth quarter of fiscal 2014 (ended February 1, 2014) and a 30% increase in revenue of $734 million for the first quarter of fiscal 2014 (ended May 4, 2013). GAAP net income for the first quarter of fiscal 2015 was $99 million verses GAAP net income of $97 million for the fourth quarter of fiscal 2014 and $53 million for the first quarter of fiscal 2014 while Non-GAAP net income was $144 million for the first quarter of fiscal 2015 verses non-GAAP net income of $151 million for the fourth quarter of fiscal 2014 and $98 million for the first quarter of fiscal 2014.

However, quarterly gross margin fell to 48.4% verses 54.3% a year earlier as demand for its chips used in third-generation mobile communication outweighed a rise in sales of its more profitable 4G LTE chips as Smartphone sales growth shifts away from North America towards China where buyers prefer handsets priced below $200 over more expensive devices like the Apple iPhone. In the earnings call (the transcript is available on Seeking Alpha here), the CFO commented:

"Our mobile and wireless end market grew strongly in the quarter, increasing approximately 30% sequentially and represented 33% of overall sales. During the quarter we saw a strong growth in China from multiple customers for 4G LTE products. In addition, our connectivity business also performed better than anticipated with only a slight decline in the quarter. Strong mobile platform sales and demand from game consoles were key drivers in the quarter."

The VP of Investor Relations commented:

"So far the uptake of our devices by customers in China has been very solid. We've noticed that subscriber strength in China mobile for LTE has many, many less (indiscernible) so far, but the expectation from what we hear from a lot of our customers for that to pick up as we go throughout the rest of this year."

And:

"I think the market in China is transitioning to LTE, so I think you will probably see a lot more subsidies come to the market starting in the second half of this year. As a result of which I think a lot of our customers are probably going to see a transition over the 4G LTE at a much faster clip."

Later on, the Chairman/CEO said:

"It is very hard for us to be able to predict what is the seasonality and something that just we need to be looking to the market, but one thing about the LTE in China -- one thing that we can make projection is that if our customer overbuild the LTE, what we have over inventory towards the end of the year. That's why when investors are asking us question and when our customer -- when we talk to our customers we always like to temper down the expectation of the ramp of LTE for this year."

And:

"…a year from now, we will have a lot more products portfolios from all the different price points. So there will be higher end devices. There will be lower end devices. So we believe that if LTE becomes successful in China, a lot of parts of the world will take notice that the performance of LTE is going to be -- and the cost of deploying LTEs will be actually lower than deploying the 3G on the pre-user basis."

Otherwise, it should be mentioned that Marvell Technology Group went into earnings with a trailing P/E of 24.75 and a forward P/E of 13.21 along with a forward dividend of $0.24 for a 1.6% dividend yield.

Share Performance: Marvell Technology Group vs. XSD, SOXX vs. SOXL

On Thursday, Marvell Technology Group rose 0.97% to $15.59 (MRVL has a 52 week trading range of $10.57 to $16.65 a share) for a market cap of $7.85 billion plus the stock is up 13.3% since the start of the year, up 36.4% over the past year and up 42.2% over the past five years. Here is a look at Marvell Technology Group's performance verses that of SPDR S&P Semiconductor ETF, iShares PHLX SOX Semiconductor Sector and Direxion Daily Semiconductor Bull 3X Shares:

As you can see from the above chart, Marvell Technology Group has been a bit of a mixed underperformer over the long term, but its recent performance has mirrored that of the benchmarks.

Finally, here are the latest technical chats for Marvell Technology Group, SPDR S&P Semiconductor ETF, iShares PHLX SOX Semiconductor Sector and Direxion Daily Semiconductor Bull 3X Shares:

The Bottom Line. Long term investors who believe in Marvell Technology Group might want to bulk up on shares should they go on sale when the market opens latter, but investors should also keep in mind what the technical charts look like for the stock along with SPDR S&P Semiconductor ETF, iShares PHLX SOX Semiconductor Sector and Direxion Daily Semiconductor Bull 3X Shares.

Sunday, May 25, 2014

Ford Motor Prepares For a Smoother Drive in Europe

Ford Motor (F) is quite bullish on the European economy and believes that time has come to recovery all losses borne in the past years. The economy is showing signs of improvement and is expected to grow at the rate of 1.2% this year. The American car giant is very optimistic about the upturn, particularly the growth potential in the Russian market.

The Rationale

The European debt crises that plagued the economy shook consumer confidence. As a result majority of them held back their demand and kept a strict control on their overall spending. This affected the auto industry to quite an extent as there was a steep fall in the purchase of cars. Automakers including Ford, domestic rival General Motors (GM), and German-based foe Volkswagen (VLKAY) lost lot of money in the continent. Ford has not generated profit in the continent since 2010.

But now as things have begin to change for the better, people who withheld their consumption for so long are slowly resuming to their previous buying level. Ford knows that this pent-up demand could bring big business to the automakers. Europe has been one of the biggest auto markets and American automakers have a huge presence along with proper set-ups here. These plants were being underutilized due to weakness in demand and a number of units were shutdown as well. But Ford believe gone are such days.

Driving on Russian Road

Ford has huge hopes tied to the Russian market. And since the automaker has a joint venture in the market, the company stands to gain even further. Ford CEO Alan Mulally says, "long- term we are very ambitious about Russia."

Auto sales in the continent is improving, but is yet to stabilize. Although year to date car sales have gone up 7% compared with a year earlier, it has been fluctuating from month to month. For instance, sales for the month of March rose 11%, but April gains came down to 5%. But welcome news for Ford investors is that between all this the carmaker has managed to increase its holding in the European Union as its market share increased from 7.3% in the last year to 7.6% in the first four month of the current year.

Ford's market share rose because the company cut prices of its cars more than its competitors. Credit for such improvement also goes to Ford's persistent effort of creating value and widening its portfolio of cars in Europe. It is in the process launching as many as 25 revamped models in the continent by 2017, and that will benefit it in a great way.

Focus on Luxury Segment

As the economy gets better Ford intends to get a share of the luxury segment as well. The company plans to offer high-end models in the country and compete with other premium offering of from BMW, Volkswagen's luxury brand Audi, and Mercedes. But it does not intend to introduce the Lincoln brand right now. It rather wants to steal a share of this market by offering premium and more advanced versions of its existing models.

The Detroit automaker is confident that it would be able to grab attention of the affluent class by upgrading the current mass marketed models. By providing leather upholstery, chrome accessories and moldings, with additional excellent customer service under the Vignale label.

If the company can capitalize on the opportunity and things work in favor, Ford would return to profitability very soon. Its luxury offerings will be offered at a premium price that will widen margins. Auto research firm IHS Automotive predicts that by 2020 Ford's sales volume would increase to 1.65 million, an increase of 25% over current volume. Ford is scheduled to bring the Mustang sports model in 2015.

DepartingThoughts

With solid ambition to grow in the European continent, Ford is preparing itself to grab a bigger share of the market and more than just making up for the losses that it suffered in the recessionary period. With eyes on the Russian market and its endeavor to expand its reach in the premium zone, Ford looks good to go.

About the author:Quick PenA seasonal writer with a Management Degree in Finance and interests in automotive, technology, telecommunication and aerospace sectors.

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Friday, May 23, 2014

Iran's "Oil Show" Just Revealed a Huge Opportunity

Let's face it: Iran isn't at the top of anyone's list when considering all the profit opportunities out there in the world. At least, not yet...

You see, Iran is changing - and quickly.

Its new political regime at least appears to be increasingly open to the West.

Its old-style buyback contracts with international oil companies have long been considered high-risk with little or no flexibility; they essentially allowed Iran to own the oil company assets and allow the company a stream of profit.

But the isolated nation recently announced the introduction of a new generation of oil contract, one that promises to be considerably friendlier to foreign partners.

Companies with a long history in the Middle East are already well-positioned for the change.

And, with the play I'm about to show you, you can be the first to profit.

The IPC: A (Very) New Game in an Old Oil Market

Thanks to a decade of sanctions, Iran lost many of its international oil markets to other OPEC members who've been more than happy to pick up the slack.

Economic embargos against the country's nuclear program have taken their toll and are partly responsible for Iran's currency, the rial, losing nearly 70% against the U.S. dollar in the past five years. That's sent inflation soaring and caused considerable suffering with a surging cost of living.

But there's been somewhat of a rapprochement lately. Iran's olive branch is a new oil agreement called the Integrated Petroleum Contract (IPC).

The IPC should be formally unveiled in London later this year. It's expected to allow for the transfer of ownership of hydrocarbons (though not project assets) to the foreign investor at predetermined milestones. For years the United Arab Emirates and Iraqi Kurdistan have successfully exploited their oil fields with production-sharing agreements of this type.

In early May, Iran held an "Oil Show" that was attended by more than 600 foreign companies. Delegates came from Europe, the U.S., China, Russia, Japan, South Korea, Malaysia, Turkey, and the United Arab Emirates.

Iran is telling oil producers to "be ready" for upcoming work as contract terms are updated. Some are taking the advice to heart.

The Likely First-Mover

Based in France, Total SA (ADR) (NYSE: TOT) is the world's fifth-largest public integrated oil company. Thanks to its European roots, the company has long had operations in many highly productive regions, like Africa and the Middle East, and could be a "first-mover" as Iran opens up.

With a market cap of $139 billion, a P/E of 12, and a current yield of 4.7%, Total has plenty of upside in the tank. And CEO Christophe de Margerie recently indicated that, if sanctions are lifted, he sees the potential for his company to return to producing oil in Iran.

The country needs partners like Total because decades of limited investment and aging technologies have weighed profoundly on output.

Unlike Myanmar or Africa, both more recent destinations for oil and gas exploration and production, Iran has one of the world's most mature oil sectors, with production dating back to 1908.

And still it holds the world's fourth-largest proven oil reserves and the second-largest natural gas reserves, which clearly have been underexploited for decades.

Should Iran truly open itself to foreign oil interests, the investment potential could be dramatic. It may not rival the North American energy boom, but it will spike.

A Perfect "Profit Storm" Shaping Up

A dramatically weakened rial and strict sanctions have conspired to make imports to Iran very costly and extremely restricted.

Oil exports represent 80% of the country's foreign revenues and about half the government's annual budget, with natural resources considered a "national asset."

Expertise and capital from outside the nation are critically needed. Over the past 15 years, Iran has enticed some $50 billion into buyback agreements. By contrast, tiny Qatar has seen quadruple that amount in the same time.

Even archrival Saudi Arabia, one of the biggest beneficiaries of restricted Iranian oil exports, last week invited Iran's foreign minister to visit Riyadh. Looking to ease tensions, Saudi Arabia is willing to discuss a number of issues. But given their common ground as large oil exporters, it's a safe bet oil will be a main dish on the menu.

A more immediate play on the region, but still outside Iran, is WesternZagros Resources Ltd. (CVE: WZR). It's a $445-million company focused squarely on Iraqi Kurdistan, neighboring on Iran, and that could share some of Iran's oil fields.

It has two significant light oil discoveries and plans to produce up to 10,000 bbl/d in the second half of 2014. Its proximity and existing operations could make it a favored play once Iran finally opens up.

The bottom line is Iran is signaling its willingness to compromise on a number of levels, and that could well mean more oil production from the area.

Thursday, May 22, 2014

Toyota recalls Sienna for tire, Lexus for brakes

Toyota Motor on Thursday recalled 370,000 Sienna minivans -- most of those a second time -- because the spare tire mounted under the vehicle might fall off and crash into following traffic.

And it recalled 10,500 2013-model Lexus GS 350 sedans because the cars, without warning or driver involvement, could suddenly apply the brakes and not illuminate the brake lights to warn following drivers.

In its third safety-flaw announcement Thursday, the big automaker said its dealers will have to reprogram airbag software on 2014 Highlander and Highlander hybrid crossover SUVs. The system can mistakenly classify all front seat passengers as small and light, meaning the airbags won't inflate forcefully enough to protect larger riders.

Those so-called smart airbag systems, widely used by automakers, employ sensors that are supposed to judge the size and heft of the passenger, and adjust the airbag inflation accordingly.

Toyota says the airbag matter isn't a recall, but instead is a "non-compliance" report, saying the vehicles don't meet a federal safety standard.

Toyota says it knows of no accidents, injuries or deaths involving any of the three defects.

Involved in the minivan recall: 2004-2011 Siennas, sold or originally registered in cold-weather states. Those states use a corrosive salt mixture to de-ice winter roads.

The mechanism holding the spare tire can be eaten away by the salt mixture, and the tire can fall off, Toyota said.

In April 2010, Toyota recalled 2004-2010 versions of the van for the same problem.

At that time, a splash shield was mounted underneath to deflect the corrosive de-icing mixture away from the spare, and rust-inhibitor was applied.

Some of those shields were installed incorrectly, Toyota said, and might not work, and the rust-inhibitor might be ineffective.

Wednesday, May 21, 2014

Is Small Cap Robotics Stock iRobot Corporation (IRBT) About to Short Circuit? ADEP & ROBO

Spruce Point Capital Management, LLC has released a research report about small cap robotics stock iRobot Corporation (NASDAQ: IRBT) entitled "About to Short Circuit," meaning investors should take a closer look at the report, the stock and the performance of robotics peer Adept Technology Inc (NASDAQ: ADEP) and the Robo-Stox Global Robotics & Automation ETF (NASDAQ: ROBO). I should mention that we used to have both Adept Technology and iRobot Corporation in our SmallCap Network Elite Opportunity (SCN EO) portfolio because we see the robotics subsector improving as companies aim to reduce overhead and improve efficiencies through machine to machine (M2M) automation.

What is iRobot Corporation?

Founded in 1990 by Massachusetts Institute of Technology roboticists with the vision of making practical robots a reality, small cap iRobot Corporation employs more than 500 of the robotics industry's top professionals - including mechanical, electrical and software engineers and related support staff. iRobot Corporation's home robots help people find smarter ways to clean, its defense & security robots protect those in harm's way and its remote presence robots enable virtual presence from anywhere in the world. These consumer and military robots feature proprietary technologies incorporating advanced concepts in navigation, mobility, manipulation and artificial intelligence.

As for potential robotics performance benchmarks or peers, small cap Adept Technology is the largest US-based manufacturer of industrial robots whose intelligent automation product lines include industrial robots, configurable linear modules, machine controllers for robot mechanisms and other flexible automation equipment, machine vision, and systems and applications software while the Robo-Stox Global Robotics & Automation ETF tracks the ROBO-STOX™ Global Robotics and Automation Index, which is designed to measure the performance of robotics-related and/or automation-related companies, through 78 holdings.

What You Need to Know or Be Warned About iRobot Corporation

To begin with, Spruce Point Capital Management, LLC is a firm that "focuses on value and special situation investment opportunities" according to its website while the founder has the following posted as part of his biography:

Mr. Axler is the founder of Spruce Point Capital Management and co-founded Prescience Point Research Group, a short-focused research firm. Mr. Axler is an activist short-seller, forensic financial researcher, and has exposed over $1.0 billion of alleged frauds on the Nasdaq and the NYSE.

In other words, "About to Short Circuit" is just another hit piece from a short seller who will probably make money if the stock goes down (There is also an article on Seeking Alpha from the group with a rather long winded disclaimer that basically says we should assume they are shorting the stock).

With that said, the research report does raise what could be valid concerns for investors which are summarized below:

iRobot Is The Poster Boy For A Robotics Bubble. Covering Up Weakening Fundamentals and Growth Prospects. Signs of Aggressive Accounting. Insider Selling Intensifying Egregious Rigging of Incentive Compensation. IRBT + Analysts Incorrectly Position The Stock. Price Target: $20 -$25 per share >>>25% –40% Downside

However, I am not so sure what robotics bubble Spruce Point Capital Management is talking about because I can think of a number of other potential bubbles out there (e.g. 3D printing, housing, university tuition etc) that are bound to burn investors even more when they pop; nor what the fuss is about over incentive compensation (probably no more piggish than at other publicly traded companies).

The statement "Milking Shareholders For Bad Performance With Outrageous Cash Comp" seems rather harsh for a company that's trading three times higher than it was at the depths of the financial crisis:

Another statement, "Insider Ownership Down From 60% at IPO to Under 5% Today" is rather odd when you consider that the iRobot Corporation IPO occurred on November 9, 2005. The Yahoo! Finance Insiders Transactions page does list a bit of insider or institutional selling:

Net Share Purchase Activity

SharesTrans

Insider Purchases - Last 6 Months
Purchases	N/A	0
Sales	452,889	27
Net Shares Purchased (Sold)	(452,889)	27
Total Insider Shares Held	1.61M	N/A
% Net Shares Purchased (Sold)	(21.9%)	N/A

Net Institutional Purchases - Prior Qtr to Latest Qtr
Net Shares Purchased (Sold)	(2,094,240)
% Change in Institutional Shares Held	(11.21%)

But the Yahoo! Finance Major Holders page does show a wide range of institutions remaining as shareholders:

Breakdown

% of Shares Held by All Insider and 5% Owners:	5%
% of Shares Held by Institutional & Mutual Fund Owners:	71%
% of Float Held by Institutional & Mutual Fund Owners:	75%
Number of Institutions Holding Shares:	151

Finally and as for aggressive accounting, I should also note that I wrote about the stock after its last earnings report (see: Small Cap Robotics Stock iRobot Corporation (IRBT): A Buy After an Earnings Dip? ADEP & ROBO) where I mentioned post earnings CEO interviews on CNBC and Bloomberg (aggressive accounting was not covered) that would seem to cast doubt on another statement: "Spruce Point Believes IRBT Is No Longer A Robotic Innovator."

Share Performance: iRobot Corporation vs ADEP & ROBO

On Tuesday and despite "About to Short Circuit" already being out there, small cap iRobot Corporation rose 3.37% to $31.88 (IRBT has a 52 week trading range of $28.90 to $48.36 a share) for a market cap of $939.82 million plus the stock is down 9.92% since the start of the year, down 7% over the past year and up 165% over the past five years. Here is a look at the long term performance chart for iRobot Corporation, Adept Technology and Robo-Stox Global Robotics & Automation ETF:

As you can see from the above chart, iRobot Corporation has been a pretty good performer (although its sort of leveled off in recent years) while Adept Technology made a big jump last year and the Robo-Stox Global Robotics & Automation ETF has not been around that long.

Finally, here are the latest technical charts for all three robotics stocks or ETFs:

The Bottom Line. Again, the research report "About to Short Circuit" does come from a firm run by a known short seller – meaning anything they say should be taken with a few grains of salt. Nevertheless, "About to Short Circuit" should be looked over by investors and traders alike who can then form their own opinion about the report's validity.

SmallCap Network Elite Opportunity (SCN EO) recently had open positions in IRBT and ADEP. To find out what other open positions SCN EO currently has, and to learn why so many traders and investors are relying on this premium subscription service, click here to find out more.

Tuesday, May 20, 2014

Are there any GM cars that haven't been recalled?

The rapid pace of General Motors recalls is intentional, as the company delves into its records to find and purge lurking safety issues.

But it's unsettling, leaving an impression GM produces unsafe vehicles and, in some cases, makes dumb mistakes. It recalled 8,208 of its 2014 cars on May 7, for example, because they might have rear brakes on the front wheels.

On Tuesday, GM issued four more recalls totaling 2.42 million vehicles in the U.S. And GM says it has informed regulators about two more recalls imminent but not yet announced. The latest batch includes safety belt, air bag, transmission and electrical issues in a range of midsize sedans, full-size crossovers and SUVs, and pickups.

RELATED STORY: Four new GM recalls total 2.42 million vehicles

In the second quarter, GM says, it has issued 16 recalls for a total of 12.6 million vehicles in the U.S., perhaps another 1 million in other countries once GM finishes counting. The first quarter, by GM's count, it announced 11 U.S. recalls affecting nearly 6.1 million cars and trucks.

The result is "the year of the recall at GM," says Daniel Hill, president of public relations consultants Ervin-Hill Strategy.

"It's not a bad approach" to get it done and past, Hill says, but it can leave potential customers "stuck between the 'old GM' and a 'new GM' that they must already want to distance themselves from" because of the cavalcade of recalls.

"Old GM" is a reference to the company before the 2009 bankruptcy reorganization. CEO Mary Barra, who took over the corner office in January, has said often that "new GM" is a different company, focused on customers and safety, instead of the cost-cutting that drove the pre-bankruptcy company.

George Hoffer, transportation economist at the University of Richmond who's studied the auto industry for 40 years, says, however, that such a drumbeat of recalls is not likely to matter. His research shows that recalls have no effect on the sale of a company's new or used cars.

Hoffer also says the government's emphasis on "airing every recall no matter how inconsequential" will make recalls "so common as to be a non-event." Already, he says, they've become "like a plane landing."

Why GM has little choice but to keep combing its records and being quick to recall:

•The government says so. GM last week was fined the maximum $35 million for foot-dragging on the recall of 2.6 million 2003-11 small cars with a faulty ignition switch to which GM links 12 U.S. deaths and one in Canada. Part of that settlement with the National Highway Traffic Safety Administration is what the government calls "unprecedented oversight" — GM must meet with NHTSA monthly on investigations and recalls. There's little room in that arrangement for anything but urgency.

•The boss says so. In March, Barra appointed GM's first global quality chief, Jeff Boyer, and said he could report directly to her, if necessary, to cut red tape about problems and potential recalls. His mission: Find and deal with anything that seems dangerous or fishy, including "defects that would have previously gone unreported," as Eric Ibara, a director at Kelley Blue Book's kbb.com, characterizes them.

•Investors say so, even if reluctantly. It's considered best to get the bad news out fast, and to book the accompanying charges in as few quarters as possible so the following quarters' earnings are predictable. Of course, investors hate that GM posted a $1.3 billion charge against earnings the first quarter to cover recall costs, nearly wiping out GM earnings. And there's no joy over GM's forecast write-down of $400 million — so far — to pay for this quarter's recalls.

But the Nasdaq exchange reports that 60% of analysts polled rated GM a "buy," and GM stock has dropped fewer than 25 cents since Feb. 6, the day before GM told the government it was recalling hundreds of thousands of cars for the switch and starting the parade of recalls. GM shares closed Tuesday at $33.07, down half a percent! since th! e $33.23 Feb. 6 close.

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GM's U.S. recalls this year

Below are General Motors' recall of vehicles in the U.S. since Jan. 1

Date, no. of U.S. vehicles, models affected, recall defect

Jan. 13: 324,970 of the 2014 Chevrolet Silverado and 2014 GMC Sierra for overheated exhaust partsFeb. 7 and 25: 1,367,146 of the 2005-07 Chevrolet Cobalt, 2006-07 Chevrolet HHR, 2005-07 Pontiac G5, 2006-07 Pontiac Solstice, 2003-07 Saturn ION, 2007 Saturn Sky, 2007 Opel GT, 2007 Daewoo G2X for ignition switchFeb 20: 355 of the 2014 Buick Enclave, LaCrosse, Regal and Verano; 2014 Chevrolet Cruze, Impala, Malibu and Travers; 2014 GMC Acadia for transmission shift cable adjusterMarch 17: 63,903 of the 2013-14 Cadillac XTS for brake vacuum boosterMarch 17: 303,013 of the 2009 Chevrolet Express and GMC Savana for airbagMarch 17: 1,178,407 of the 2008-13 Buick Enclave, 2008-13 Chevrolet Traverse, 2008-13 GMC Acadia, 2008-10 Saturn Outlook for airbagMarch 17: 656 of the Cadillac ELR for electronic brake controlMarch 28: 823,788 of the 2008-11 Chevrolet HHR, 2008-10 Chevrolet Cobalt, 2008-10 Pontiac G5, 2008-10 Pontiac Solstice, 2008-10 Saturn Sky, 2008-10 Opel GT, 2008-09 Daewoo G2X for ignition switchMarch 28: 174,046 of the 2013-14 Chevrolet Cruze for front axle shaftMarch 28: 489, 936 of the 2014 Chevrolet Silverado, 2014 GMC Sierra, 2015 Chevrolet Tahoe and Suburban, 2014 GMC Yukon and Yukon XL for oil cooler fitting.March 31: 1,340,447 of the 2004-06 Chevrolet Malibu and Malibu Maxx, 2004-06 Pontiac G6, 2004-07 Saturn Ion, 2008-09 Chevrolet Malibu, 2008-09 Pontiac G6, 2008-09 Saturn Aura, 2010 Cobalt, 2009-10 Chevrolet HHR for electric power steeringApril 9: 2,191,014 of the 2005-10 Chevrolet Cobalt, 2006-11 Chevrolet HHR, 2007-10 Pontiac G5, 2006-10 Pontiac Solstice, 2003-07 Saturn ION, 2007-10 Saturn Sky for ignition key cylinderApril 24: 50,571 of the 2013 Cadillac SRX for acceleration lagApril 19: 23,249 of the 2009-10 Po! ntiac Vib! e (built by Toyota) for air bagsApril 24: 51 of the 2015 Chevrolet Silverado HD and 2014 GMC Sierra HD for diesel transfer pumpApril 29: 51,640 of the 2014 Chevrolet Traverse, 2014 GMC Acadia and 2014 Buick Enclave for inaccurate fuel gaugeApril 29: 56,214 of the 2007-08 Saturn Aura for shift cableMay 7: 8,208 of the 2014 Chevrolet Malibu and 2104 Buick Lacrosse for brake rotorsMay 14: 111,889 of the 2005-07 Corvette for headlight low beamsMay 14: 19,225 of the 2014 Cadillac CTS for windshield wipersMay 14: 140,067 of the 2014 Malibu for brake boostMay 14: 2,440,524 of the 2004-12 Chevrolet Malibu, 2004-07 Malibu Maxx, 2005-10 Pontiac G6 and 2007-10 Saturn Aura for brake lampsMay 14: 477 of the 2014 Chevrolet Silverado and 2015 Chevrolet Tahoe for steering tie-rodMay 16: 1,402 of the 2015 Cadillac Escalade for passenger air bagMay 19: 1,339,355 of the 2009-10 Saturn Outlook, 2009-14 Chevrolet Traverse, 2009-14 GMC Acadia and 2009-14 Buick Enclave for front seat beltsMay 19: 58 of the 2015 Chevrolet Silverado HD and 2015 GMC Sierra HD for loose fuse blockMay 19: 1,075,102 of the 2004-08 Chevrolet Malibu and 2005-08 Pontiac G6 for shift cable (expands April 29 Saturn Aura recall)

Total 18,666,842

Monday, May 19, 2014

AstraZeneca Board Rejects Pfizer's 'Final' Offer

BRITAIN-PHARMA-BUSINESS-ASTRAZENECA Andrew Yates, AFP/Getty Images LONDON -- The board of AstraZeneca on Monday rejected the improved $119 billion takeover offer from U.S. drugmaker Pfizer, a decision that caused a sharp slide in the U.K. company's share price as many investors think it effectively brings an end to the protracted and increasingly bitter takeover saga. The board said in a statement that it "reiterates its confidence in AstraZeneca's ability to deliver on its prospects as an independent, science led business." Pfizer (PFE), which is the world's second-biggest drugmaker by revenue, has been courting No. 8 AstraZeneca (AZN) since January, arguing their businesses are complementary. On Sunday, it raised its stock-and-cash offer by 15 percent to $118.8 billion, or 70.73 billion pounds. That would be the richest acquisition ever among drugmakers and the third-biggest in any industry, according to figures from research firm Dealogic. AstraZeneca didn't take long to reject the new offer, its board arguing Pfizer is making "an opportunistic attempt to acquire a transformed AstraZeneca, without reflecting the value of its exciting pipeline" of experimental drugs. Because Pfizer said it won't raise its offer again or launch a hostile takeover bid over the heads of AstraZeneca's board, the prospect of a deal looks increasingly remote unless AstraZeneca shareholders urge a change of mind. Pfizer has said it hopes AstraZeneca's shareholders will push for a deal. "This has been going on for quite some time and we have been in very deep engagement over the whole of the weekend," AstraZeneca Chairman Leif Johansson told the BBC. "If Pfizer now says this is the final offer I have to believe what they say." Shareholders in AstraZeneca seemed to think a deal is now unlikely, with the company's share price slumping 11 percent to 43.15 pounds. Johansson said his management team had told Pfizer over the weekend that it would need to see a 10 percent improvement over the 53.50 pounds-per-share offer that was on the table at that time. He said Pfizer's latest offer represented only a "minor improvement" that fell short of the 10 percent needed. Though it has said its indicative offer is final, Pfizer has, under U.K. takeover rules, until 5 p.m. local time on May 26 to make a formal bid. If it doesn't, it can't make another offer for six months. Pfizer's offer comes amid a surge of other deals as drugmakers look to either grow or eliminate noncore assets to focus on their strengths. Those deals include Switzerland's Novartis (NVS) agreeing to buy GlaxoSmithKline's cancer-drug business for up to $16 billion, to sell most of its vaccines business to GSK for $7.1 billion, plus royalties, and to sell its animal health division to Eli Lilly (LLY). of Indianapolis for about $5.4 billion. Canada's Valeant Pharmaceuticals (VRX) has also made an unsolicited offer of nearly $46 billion for Botox-maker Allergan (AGN), which has turned it down, so far. Pfizer's latest offer increased the ratio of cash AstraZeneca shareholders would receive, from 33 percent to 45 percent. The latest offer would give them the equivalent of 55 pounds for each AstraZeneca share, split between 1.747 shares of the new company and 2.476 pence in cash. It said the offer represents a 45 percent premium to AstraZeneca's share price of 37.82 pounds on April 17, before rumors of the deal began circulating. Pfizer CEO Ian Read said the proposed combination would yield "great benefits to patients and science in the UK and across the globe." AstraZeneca has insisted Pfizer's offers significantly undervalue the company and its portfolio of experimental drugs. The company and British government officials also have raised concerns about the prospect of job cuts, facility closures and losing some of the science leadership in the U.K., where London-based AstraZeneca is the second-biggest drugmaker, behind GlaxoSmithKline (GSK). Pfizer has assured such cuts would be limited. It's promised to complete AstraZeneca's research and development hub in Cambridge. And it pledged to establish the new company's tax residence, but not headquarters, in England, which would significantly reduce its future tax rate. But layoffs would be inevitable in such a big merger, analysts say, and Pfizer has a track record of eliminating tens of thousands of jobs as a result of megadeals. While Pfizer is best known to the public for Viagra, cholesterol fighter Lipitor and other widely used medicines, in the pharmaceutical industry it's known for two other things: marketing muscle and mega mergers, which together have repeatedly propelled it to the top. Since 2000, it has made three acquisitions that have vaulted the company to No. 1 in revenue. It paid $111.8 billion for Warner-Lambert in 2000 to get the rights to Lipitor, then $59.8 billion for Pharmacia in 2003 and $68 billion for Wyeth in 2009, according to Dealogic. With this deal, Pfizer would then be the buyer in four of the 10 richest deals ever in the pharmaceutical industry. Each of those deals resulted in massive layoffs and closures of some medicine factories, research facilities and office buildings, with the cost-cutting boosting Pfizer's bottom line for a few years. Pfizer now wants to add to its medicine portfolio to boost revenue. The company slipped from No. 1 to No. 2 last year, behind Novartis, mainly because Lipitor got generic competition at the end of 2011, wiping out several billion dollars in annual sales. Pfizer also has sold off some units and reorganized as part of preparations to possibly break off another part of the company, something analysts have been urging it to do.

Sunday, May 18, 2014

Why Tesla Motors Inc. Doesn't Have to Worry About Competition... Yet

There has been a lot of fuss raised about the impending competition Tesla Motors (NASDAQ: TSLA ) is going to face in the coming years. It's inevitable that the behemoth automakers of the world are going to enter the luxury electric-car market at some point, but I wouldn't write Tesla off just yet.

Introduction of electric cars
When electric cars were first introduced, they were expensive, unimpressive under the hood, and had low travel ranges.

That all changed when Tesla introduced the Model S, which went on to receive the highest score for a vehicle ever from Consumer Reports. It also received the highest score possible by the National Highway Traffic Safety Administration for safety, scoring a maximum five out of five in each safety and crash category.

But enough of that. We've already heard this news, what about the competition? It all boils down to one simple concept for consumers: price.

Specifically, there have been several big-name, luxury automakers entering the electric sports car market. General Motors' (NYSE: GM ) Cadillac has introduced the ELR vehicle, while BMW (NASDAQOTH: BAMXF ) has developed the i8.

Below are the three vehicles, along with the starting price for each:

Vehicle	Staring Price
BMW i8	$136,625
Cadillac ELR	$75,000
Tesla Model S	$69,900
Tesla Model S Max	$122,720

Source: Edmunds.com, Cadillac.com, and Teslamotors.com

You'll notice that the last vehicle on the list is the Tesla Model S Max. When you go to the company's website and design your own car, you have the option, "Max out my Model S." The resulting car has carbon fiber, more horsepower, longer range, and everything in between -- interior and exterior.

While the ELR hasn't received much "Tesla-killer" coverage, many of the Tesla doubters are touting the BMW i8 as the car that could deal a blow to Model S sales. I can't possibly fathom how that's possible, but have been reading about it more and more often, most recently in a Barron's pieced called, "Tesla Motors: Time to Worry About BMW."

Tesla Model S versus BMW i8
Let's first consider the price right off the bat. For nearly 50% less -- a savings of nearly $67,000 -- consumers can buy the fully electric Model S, the highest rated vehicle ever.

Even the maxed out version of the Model S is $14,000 cheaper than the standard BMW i8!

Below is a table comparing the two models. Since the BMW i8 is an hybrid vehicle (meaning it runs on both battery power and fuel), I have included the electric only stats, listed in the table as "BMW i8 (e)", as well as the standard BMW i8.

Specs	BMW i8 (e)	BMW i8	Tesla Model S Max
Horsepower	131	362	416
0-60 mph	*	4.4 seconds	4.2 seconds
Range (miles)	23	372	265
Top speed (mph)	74.5	155	130

*The BMW i8 (e) 0-60 mph stat is only given as 0-60 kilometers per hour. It equates to 0-37.3 mph in 4.5 seconds. Source: TeslaMotors.com, GreenCarCongress.com, and BMW.com

Remember, this is the starting level BMW i8 and the maxed out Tesla Model S, the latter of which is still $14,000 cheaper. On a purely electric-car versus electric-car basis, the Model S toys with the i8 the way a cat toys with a captured mouse before its inevitable death.

It's not until you measure the Model S against the i8's full capabilities that the race even comes close. While the Model S trumps the i8 in horsepower and acceleration, it can't beat its German counterpart in top speed or total range.

Looking at the choices through a buyer's eyes
When buyers are looking at the Tesla Model S, they see a well-groomed sports car -- fast, tight handling, quick acceleration -- all without the fuel. There is zero gas. None. Zilch.

For all intents and purposes, why pay nearly twice as much for the BMW i8 when you would still need to fuel it, and its performance is roughly equivalent to that of a Model S?

It makes no sense. If one can afford to shell out $136,000 for a new car, why not pass up the hybrid i8 and buy something like a Porsche 911 or an Audi R8, both of which have similar or better specifications with a lower price tag -- starting at $84,300 and $114,900, respectively.

Either the buyer cares about fuel efficiency or they don't. That is to say, either they want zero fuel responsibilities, which they get with the Model S, or they are willing to go to the gas station. If the latter of the two scenarios is true, and unless you absolutely love the BMW i8, buying an Audi, Porsche, or other luxury ride makes more sense for the money.

Final thoughts
While I applaud BMW's efforts in its i8 design -- which is admittedly, beautiful -- the price doesn't make sense given what consumers can buy for either a fully electric sports car or a standard sports car.

With a starting price of $136,000, the BMW i8 is simply too expensive and lacks too many of the benefits you get with a Tesla Model S.

Even if it didn't cost nearly twice as much as the standard Model S, the i8's performance isn't head-and-shoulders above it. It would need to be much, much better than the Model S to justify a price tag of that magnitude.

On-par performance coupled with a staggeringly higher price tag for the BMW i8 leaves the Model S without a main competitor, for now.

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