U.S. Dollar Rises and the Euro's Price Goes Under $1.34

NEW YORK (TheStreet) -- The euro has broken the $1.34 barrier. It closed at $1.3386 on Thursday. A month ago or so it looked as if the floor to euro trading was $1.36 per euro.

Continued weak numbers coming out of the eurozone, however, has convinced people that Mario Draghi, the president of the European Central Bank, is going to have to give in and resort to a greater amount of monetary easing, even moving to something he has rejected so far -- quantitative easing.

Read More: Warren Buffett's Top 10 Dividend Stocks

The European nations seem to be experiencing a growth rate of about 1% this year. Expectations for growth next year and for the after seem to be hung up below 2%. Disinflation continues to be the big news of the day as the estimated rate of price increase for July announced by Eurostat, the European Commission's statistical bureau, came in at an annualized rate of 0.4%. This is down from 0.5% for June. Expectations are for a further fall for vacationing Europeans in August, maybe only 0.3%. This information apparently got translated into European stock markets as averages experienced a substantial drop on Thursday. The Federal Reserve, on the other hand, seems to be moving in the opposite direction. The Open Market Committee of the Fed, which ended its two-day meeting on Wednesday, reduced the amount of securities it was purchasing monthly to $25 billion and there were indications that some of the more "hawkish" members of the committee were pushing for a rise in short-term interest rates, sooner, rather than later. I recently noted the fall in the price of the euro have been started by testimony in front of Congress by Fed Chair Janet Yellen. In her "Fedspeak," Yellen alluded to the fact that the economic recovery in the U.S. might be recovering more rapidly than had been thought recently. This might contribute to the need for interest rates to rise sooner than previously expected. When the second-quarter GDP numbers were released, ecstasy was expressed in some areas such as the  Financial Times' "US Economy Roars Back With 4% Growth in Second Quarter." Hence, growing expectation that the Federal Reserve may, in fact, seek higher short-term interest rates sooner rather than later. It seems as if the investor's psychology in the stock market focused on higher short-term interest rates sooner as the S&P 500 dropped by almost 40 points. So, for the time being, it looks as if investors are believing that the European Central Bank will have to loosen up its monetary policy even further in the near future, and the Federal Reserve, whatever it does, will have a monetary policy that is relatively less easy than that of the ECB. Read More: Thar She Blows! The Fed-Induced Stock Bubble Has Popped Of, course, the cheaper euro is something that helps the ECB because it makes eurozone exports cheaper relative imports coming from America. Therefore, this is not considered to be a bad thing by eurozone officials. I mentioned in my earlier post that some people see the euro falling to $1.3200 by the end of the year. With the movements we have just seen, this level is not out of the question at all. This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

3 Reasons iShares MSCI Emerging Markets ETF (EEM) Could Rise

Credit: epSos .de via Flickr.

Traditionally, growth-oriented investors have looked to emerging markets for fast-paced opportunities that more established, mature markets lack, and in the early and mid-2000s, emerging-market investments like the iShares MSCI Emerging Markets ETF (NYSEMKT: EEM  ) delivered extremely strong returns to early investors in the space. In 2013, though, emerging markets performed horribly, faring far worse than U.S. stocks and markets in other developed-economy countries. Even after a good rebound in 2014, investors aren't sure what the future holds for emerging markets generally and the iShares ETF in particular.

Despite its recent turbulence, the iShares MSCI Emerging Markets ETF has plenty of things going for it, and there are good reasons to expect that share prices for the ETF could rise in the near future. With an expense ratio of 0.67%, the ETF isn't as cheap as its Vanguard FTSE Emerging Markets ETF (NYSEMKT: VWO  ) counterpart, but it does compare well against actively managed emerging-market mutual funds from an expense standpoint. The following three factors aren't guaranteed to push the ETF higher, but if they come to pass, they're likely to have a positive impact on its future prospects.

Brazil has been an important emerging market for investors. Image source: Charlie Phillips via Flickr.

1. Emerging markets are at attractive valuations right now

Like all investments, emerging-market stocks have fallen in and out of favor in cycles. During 2013, concerns about the viability of the global economic recovery led many emerging-market investors to seek the security of U.S. stocks, instead helping to send the Dow up 26.5% even as emerging markets lost money. According to figures earlier this month from The Wall Street Journal, earnings multiple for emerging-markets stocks were just 13.4 -- five full points below the 18.4 multiple for the U.S. stock market.

Many value investors have complained that U.S. stocks no longer present compelling reasons to invest, especially for those demanding a margin of safety. Emerging markets have greater political risk than U.S. stocks, and they're also more vulnerable to economic disruptions, so some discount in price-to-earnings multiples is reasonable. But given such a large disparity, bargain-seeking investors could increasingly gravitate toward emerging-market stocks and the iShares ETF in particular.

2. Key emerging-market countries like China and Brazil are showing potential signs of economic strength

Emerging-market stocks are also vulnerable to slowing economies, and expectations from emerging-market economies remain high. Chinese GDP growth remains well above levels in the developed world, with forecasts for 7% to 8% growth over the next year or so. But Brazil has struggled much more, and growth rates have fallen into the 1% to 2% range. Those problems led to investor uncertainty about long-term future prospects.

Source: Wikimedia Commons.

Even now, economic data presents a mixed picture for the immediately future. But some signs of improvement have emerged, as growing middle-class consumer bases create a foundation for sustainable long-term growth for the domestic economies of major emerging-market nations. Admittedly, the export-driven nature of emerging-market economies leaves them vulnerable to slackening demand from struggling areas of the developed-market world, such as Europe, but as wages improve and economies mature, emerging markets should become more stable and build more resistance to normal oscillations in the business cycle.

3. Investor sentiment is driving demand for popular emerging-market investments, sparking momentum

ETFs in particular can move based on investor sentiment, and 2014 has been a much better year than 2013 for the iShares MSCI Emerging Markets ETF and other similar funds. Overall, inflows into emerging-market ETFs followed their gains early in the year, and by April, more money had come into the emerging market sector than at any point during the previous year. Those trends have only continued in more recent months as investors look for alternatives to soaring U.S. stocks.

Some still remain concerned that low U.S. interest rates have spurred greater investment in emerging markets, and therefore that future rate hikes could reverse those capital flows and hurt emerging markets. For now, though, investors appear more confident about prospects for the iShares ETF and other emerging-market investments, and their confidence has helped create a positive feedback loop for share prices.

Overall, you can expect the iShares MSCI Emerging Markets ETF to track the general performance of major markets like China, South Korea, and Brazil, along with other important emerging economies around the world. If those areas fare well, then share prices could easily maintain the positive momentum they've seen so far in 2014.

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McDonald's Wants to Transform Its Junk Food Image

Luke Sharrett/Bloomberg via Getty Images NEW YORK -- At a dinner McDonald's (MCD) hosted for reporters and bloggers, waiters served cuisine prepared by celebrity chefs using ingredients from the chain's menu. A Kung Pao chicken appetizer was made with Chicken McNuggets doused in sweet-and-sour sauce and garnished with parsley. Slow-cooked beef was served with gnocchi fashioned out of McDonald's french fries and a fruit sauce from its smoothie mix. For dessert, its biscuit mix was used to make a pumpkin spice "biznut," a biscuit-doughnut hybrid. The event, held in New York City's Tribeca neighborhood, was billed "A transforming dining experience of 'fast food' to 'good food served fast.' " Attendees tweeted out photos and the night was written up on various websites. The dishes aren't intended for McDonald's restaurants. Instead, the evening is part of a campaign by McDonald's to shake its reputation for serving cheap, unhealthy food. At a time when Americans are playing closer attention to what they eat, the company is trying to sway public opinion by first reaching out to the reporters, bloggers and other so-called "influencers" who write and speak about McDonald's. It's just one way McDonald's is trying to change its image. In the past 18 months, the chain has introduced the option to substitute egg whites in breakfast sandwiches and rolled out chicken wraps as its first menu item with cucumbers. Last fall, it announced plans to give people the choice of a salad instead of fries in combo meals. And in coming months, mandarins will be offered in Happy Meals, with other fruits being explored as well. McDonald's declined to make an executive available for this story, but CEO Don Thompson said early this year: "We've got to make sure that the food is relevant and that the awareness around McDonald's as a kitchen and a restaurant that cooks and prepares fresh, high quality food is strong and pronounced." The company faces an uphill battle, especially if the past is any indication. The salads it introduced more than a decade ago account for just 2 to 3 percent of sales. And the chain last year discontinued its Fruit & Walnut salad and premium Angus burgers, which analysts said were priced too high for McDonald's customers at around $5. The problem is that some simply people don't consider McDonald's a place to get high quality food, in part because the prices are so low. And while McDonald's has added salads and a yogurt parfait to its menu over the years, Americans are gravitating toward other attributes, like organic produce and meat raised without antibiotics. "People just don't think of McDonald's as having that premium quality," said Sara Senatore, a restaurant industry analyst with Bernstein Research. In some ways, the image McDonald's is battling is ironic, given its reputation for exacting standards with suppliers. Thompson has also noted the ingredients tend to be fresh because restaurants go through them so quickly. "The produce and the products that we have at breakfast and across the menu are fresher than -- no disrespect intended -- what most of you have in your refrigerators," he said at an analyst conference in May. But even that reputation for supply chain rigor was recently tarnished when the chain's longtime supplier was reported to have sold expired meat to its restaurants in China. The Price Conundrum The low-cost burgers, ice cream cones and other food that made McDonald's so popular since it was founded in 1955 have come to define it. And some people can't get over the idea that low prices equal low quality. "It's the whole perception people get when you sell something cheaply," said Richard Adams, who used to own McDonald's restaurants in San Diego and now runs a consulting firm for franchisees. Anne Johnson, for instance, said she eats at McDonald's because she can get a burger, fries and drink for about $5. But Johnson, a New York resident, doesn't think there are any healthy options there. "Basically, it's junk food," she said. Adding to its challenge, McDonald's can't seem to raise prices without driving people away. Pressured by rising costs for beef and other ingredients, the chain tried to move away from the Dollar Menu in 2012 with an "Extra Value Menu" where items were priced at around $2. But customers are apparently righteous about the $1 price point, and the strategy was scrapped. Last year, McDonald's changed its tactic a bit, hoping not to turn off customers. It tweaked the name of the "Dollar Menu" to the "Dollar Menu & More." McDonald's low prices also are part of what keeps it from competing with places such as Chipotle, which is touting the removal of genetically modified ingredients from its menu, and Panera, which recently said it will eliminated all artificial ingredients by 2016. Such moves would be Herculean feats for McDonald's, given its pricing model and the complexity of its menu. Meanwhile, the company acknowledges there are problems with how people perceive its food. "A lot of our guests don't believe our food is real," said Dan Coudreaut, director of culinary innovation at McDonald's, in an interview last year. Taking Control of the Narrative The image of McDonald's food is a growing concern for the company at a time when U.S. sales have been weak for two years. The last time McDonald's managed to boost a monthly sales figure at home was in October, and the company warns its performance isn't expected to improve anytime soon. McDonald's has said it has other problems, including slow and inaccurate service at its restaurants. But improving perceptions about its food is also a priority. Following the dinner in New York last fall, the company hosted a similar event last month for reporters covering the Essence Festival in New Orleans. Beignets filled with grilled chicken and dusted with sugar were served alongside a packet of McDonald's honey mustard sauce. Other "chef events" in local markets are planned for coming months, according to Lisa McComb, a McDonald's spokeswoman. She declined to provide details but said the events will be a spin on a recent contest between two friends to make a gourmet dish out of a Big Mac meal. McComb said McDonald's wasn't associated with that particular contest, which was posted online. The company continues to tweak the menu, too. The new Bacon Club burger McDonald's is promoting comes on a brioche bun and looks more like something that might be found at a trendy burger joint. It costs $5 or $6, depending on where you live, making it the most expensive sandwich on the menu. In Southern California, McDonald's also is testing a "Build Your Own Burger" concept, with the patties being cooked to order more slowly on a separate grill. Beyond the menu, the company is determined to take control of its narrative. "We're going to start really, really telling our story in a much more proactive manner," said Kevin Newell, U.S. brand and strategy officer for McDonald's said late last year. He added that McDonald's has gone too long in "letting other folks frame the story for us."

Philip Morris International: Now That’s an Earnings Beat

Philip Morris International (PM) has risen the most in five months after reporting earnings that easily topped analyst forecasts.

Bloomberg News

Philip Morris International reported a profit $1.41 a share, beating forecasts for $1.24, on revenue of $7.8 billion, topping the Street consensus for $7.52 billion. Morgan Stanley’s David Adelman and team explain why investors are so enthusiastic about Philip Morris International’s results:

Our key take-away is that Q2 was considerably stronger than expected and given the absence of any new issues results in less risk to the company's full-year outlook…Although F/X was less onerous than our forecast ($0.06 of EPS favorability), the $0.18 quarterly EPS beat was predominantly driven by improved profitability in EEMA and Europe. While elevated spending and a difficult 4Q comparison should result in more moderate second half EPS growth, we continue to expect full-year results to be within PM's 6-8% currency neutral range…

Despite the same core issues remaining an ongoing concern – Japan, the Philippines, Australia, and Indonesia – we were encouraged by the lack of any emerging issues, following the recent pattern of disappointing guidance.

Shares of Philip Morris International has gained 1.7% to $86 at 1:08 p.m., while Altria Group (MO) has advanced 1.2% to $42.07, Lorillard (LO) has risen 2.1% to $61.25 and Reynolds American (RAI) is up 1.1% at $58.40.

7 Things Your Kids Should Know When They Take a Car To College

In their song, "Wide Open Spaces," the Dixie Chicks sing about a Dad yelling, "Check the oil!" as he drops his daughter off at college. This is good advice. Here are seven more tips from auto experts for students taking their cars to college:

1. Keep your car in good repair - "Many students have a long ride from their hometown to their college campus so they need to make sure that their vehicle is up-to-date on oil changes and other required maintenance so as to avoid breaking down before they even arrive at college," says William Van Tassel, manager of driver training programs at AAA National. "Having a back-up plan such as a AAA membership which includes roadside assistance also helps."

2. Let your insurer know that you're taking the car to college - Location is one factor used in determining rates, so insurers need to know where the car is used and garaged. If you're on your parents' policy and take their car to campus, you need to notify the insurer of the change of address. The same is true if you own the car and have your own coverage. Your rates may go up or down, depending on the location of your school. If you fail to let the car insurance company know about the location change, you run the risk of a denied insurance claim.

3. Know what to do after an accident - After an accident, first check to see if anyone is injured, says Penny Gusner, consumer analyst for Insure.com. "Then exchange information with the other party -- including name, phone number and insurance information. Take pictures of the scene and take down notes for yourself, even if you have to use your smartphone. This is important because you may forget details later and it will be more difficult to accurately remember what happened even a day later," she says.

You should also call the police to get an accident report. If the other person is at fault this is especially important because the driver might admit fault at the scene but say differently later. "If it's on the police report, it's harder for the person to change their story," says Gusner. If the police can't or won't respond, see about filing your own report with them after the fact. In some state it's required that you file a crash report with the state if police don't respond.

Call your own insurance company and if you think the other driver's at fault, contact his insurer as well.

Gusner recommends downloading the National Association of Insurance Commissioner's free smartphone WreckCheck App. It walks drivers through what to do after a car accident and how to collect the right information, and not give away too much personal information.

4. Know what to do if your friend wrecks your car - "Car insurance follows the car and not the driver for most coverages. So, if you lend out your car and your friend wrecks it, it's your car insurance that will pay out for any liability claims," says Gusner, "plus you need collision coverage on the car to cover it for the damage it sustained."If liability limits are exceeded then the driver and the car owner (you or your parents depending upon who the car is titled to) can be held liable and will be on the hook for expenses that exceed coverage limits.

With claims on your policy, your car insurance, or your parents' if you're listed on their policy, will likely go up at next renewal.

"I've seen such things ruin friendships due to the 'friend' not cooperating with the insurance company to get the claim settled or not offering to pay the collision deductible," says Gusner.

5. Ask about insurance discounts - "Many insurers, including Chubb, offer 'away at school' discounts, which are available when students are attending a college more than 100 miles away from home," says Ray Crisci, senior vice president and worldwide automobile manager for Chubb Personal Insurance. "We advise parents and new college students to check with their insurance agent to see what types of discounts may be available to them," says Crisci.

6. Be prepared to pay a fee for parking - "Although we always try to accommodate all students requests for parking spots, parking is a limited resource on most college campuses," says Josh Cantor, director of parking and transportation at George Mason University in Fairfax, Va. "Most universities have to charge a fee in the first place to cover their expenses." Follow the parking signs to avoid tickets. Most colleges will fine you, and some may even tow your car if you break the parking rules.

7. New student? You might not be allowed to park on campus at all - "Many schools limit who is allowed to park on campus due to limited parking space," said Cantor. "I would advise new students to check with their admissions office about any guidelines for incoming students related to parking before they make plans to bring their cars to campus and also ask about transportation options such as buses and bike programs. Most colleges want to give students many ways to get around without having to drive."

This article originally appeared on Insure.com.

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3 Reasons Intuitive Surgical, Inc.'s Stock Could Rise

Shareholders of Intuitive Surgical (NASDAQ: ISRG  ) , maker of the da Vinci Surgical System, have endured a whipsaw ride over the past two years. On four different occasions, the stock has swung more than 30%.

Source: YCharts.

This volatility is the result of a confluence of factors, including doctors questioning the efficacy of the da Vinci robotic surgical technology, tighter hospital budgets in the face of the Affordable Care Act, and the introduction of a new surgical machine.

But for current or prospective shareholders, there are three big reasons to remain bullish on the company's future.

A solid moat

While the healthcare industry is abuzz with innovative new technologies, the same can't be said for the act of performing surgery. While new tools and approaches constantly enter the scene, the option to have your surgery performed via a robot remains the only real alternative to traditional surgical procedures.

This doesn't mean that robotic procedures are always a better -- or more cost-effective -- alternative to traditional surgery. In 2013, several medical professionals questioned whether using the da Vinci for hysterectomies was worth the extra money involved.

At the same time, Intuitive isn't a static company. It regularly incorporates feedback from the medical community into the design of future machines. With each incremental improvement, the company creates a wider moat around its business.

A new machine ushering in new opportunities

Earlier this year, Intuitive introduced its latest iteration of the robotic surgery system: the da Vinci Xi.

Source: Intuitive Surgical.

The machine presents several new options for surgeons. Most important is increased mobility, as the surgical arms can rotate to cover all quadrants of the abdomen. The Xi also offers unobstructed and enhanced visual access to the patient.

With the new machine, Intuitive can attempt to differentiate the types of procedures for which the robot is used. Historically, prostatectomies and hysterectomies accounted for the vast majority of da Vinci operations. The inherent risk with such a concentrated application became painfully obvious when hysterectomy procedure growth came under pressure last year.

The company reports procedures in "general surgery" on an annual basis. This encompasses all surgical procedures outside of the core gynecological and prostate fields. Even before the Xi was introduced, general procedures were growing quickly.

Source: SEC filings

With the Xi, the growth of these types of procedures could be a major driver for Intuitive's future. In the company's second-quarter earnings release, it said that "higher procedure volume was driven by growth in U.S. general surgery procedures," and that "general surgery is now our second largest and fastest growing specialty in the U.S."

Hospitals loosening their purse strings

A reversal of business fortunes in the United States has been a major drag on Intuitive's stock. Before 2013, the company had solidly grown the number of da Vincis it sold to hospitals.

Last year, those numbers actually reversed and began to shrink. Fellow Fool Sean Williams highlighted a major reason for that reversal: the onset of the Affordable Care Act, or Obamacare.

As the effects of the legislation were largely unknown, hospitals assumed a conservative stance when it came to major capital purchases. With average selling prices of over $1 million, Intuitive's machines became far less popular.

But hospitals eventually will feel far more comfortable in forecasting their financial situation as they get more used to the legislation. And with time, I think that the benefits of the machines as noted above will be more clear.

The takeaway for investors

An investment in Intuitive isn't without its risks -- no investment is. And even if all of the possible positive events mentioned above happen, Intuitive's stock could still decline. But with a growing moat around its business, a new machine that could help perform a greater variety of procedures, and hospitals that will hopefully begin loosening their purse strings, there's a lot for investors to be excited about for this stock over the long term.

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3 Big-Volume Biotech 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.

Read More: Warren Buffett's Top 10 Dividend Stocks

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.

Read More: 5 Hated Stocks That Could Pop When the S&P Drops

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

Ultragenyx Pharmaceutical

Ultragenyx Pharmaceutical (RARE), a development-stage biotechnology company, focuses on the identification, acquisition, development and commercialization of various products for the treatment of rare and ultra-rare diseases in the U.S. This stock closed up 3% to $50 in Wednesday's trading session.

Wednesday's Volume: 727,000

Three-Month Average Volume: 227,067

Volume % Change: 186%

From a technical perspective, RARE trended higher here with strong upside volume flows. This stock recently broke out above some near-term overhead resistance levels at $44.30 to around $45 with strong volume. Shares of RARE are now quickly approaching another big breakout trade. That trade will hit if RARE manages to take out Wednesday's intraday high of $50.35 to some more near-term overhead resistance levels at $50.91 to $50.93 with high volume.

Traders should now look for long-biased trades in RARE as long as it's trending above Wednesday's intraday low of $47.43 and then once it sustains a move or close above those breakout levels with volume that hits near or above 227,067 shares. If that breakout hits soon, then RARE will set up to re-test or possibly take out its next major overhead resistance levels at $57.50 to $60.

Read More: 8 Stocks George Soros Is Buying

Veracyte

Veracyte (VCYT) operates as a diagnostics company in the field of molecular cytology to enhance patient outcomes and lower healthcare costs. This stock closed up 1.4% at $14.77 in Wednesday's trading session.

Wednesday's Volume: 138,000

Three-Month Average Volume: 81,823

Volume % Change: 75%

From a technical perspective, VCYT trended modestly higher here with above-average volume. This stock recently formed a double bottom chart pattern at $13.51 to $13.40. Since that bottom, shares of VCYT have started to trend higher and it's now quickly moving within range of triggering a big breakout trade. That trade will hit if VCYT manages to take out some key near-term overhead resistance levels at $15 to its 50-day moving average of $15.12 with high volume.

Traders should now look for long-biased trades in VCYT as long as it's trending above Wednesday's intraday low of $14.30 or above those double bottom support levels and then once it sustains a move or close above those breakout levels with volume that hits near or above 81,823 shares. If that breakout begins soon, then VCYT will set up to re-test or possibly take out its next major overhead resistance levels at $16.50 to $17.50, or even $18.

Read More: 4 Stocks Warren Buffett Is Selling in 2014

Jazz Pharmaceuticals

Jazz Pharmaceuticals (JAZZ), a specialty biopharmaceutical company, identifies, develops and commercializes pharmaceutical products for various medical needs in the U.S., Europe and internationally. This stock closed up 5.1% at $142.84 in Wednesday's trading session.

Wednesday's Volume: 2.84 million

Three-Month Average Volume: 823,812

Volume % Change: 248%

From a technical perspective, JAZZ ripped sharply higher here with strong upside volume flows. This big jump to the upside on Wednesday briefly pushed shares of JAZZ back above its 50-day moving average at $146.48 and briefly into breakout territory above some near-term overhead resistance at $143.51. Shares of JAZZ tagged an intraday high of $149.95, before it closed well off that level at $142.84. Market players should now look for JAZZ to trigger another key breakout trade. That trade will hit if JAZZ manages to take out some key near-term overhead resistance levels at $150 to $151 with high volume.

Traders should now look for long-biased trades in JAZZ as long as it's trending above $140 or above $139 and then once it sustains a move or close above those breakout levels with volume that's near or above 823,812 shares. If that breakout hits soon, then JAZZ will set up to re-test or possibly take out its next major overhead resistance levels at $155 to $166.

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.

RELATED LINKS:

>>4 Big Stocks on Traders' Radars

>>5 Tech Trades Ready to Move

>>4 Stocks Under $10 Moving Higher

Follow Stockpickr on Twitter and become a fan on Facebook.

At the time of publication, author had no positions in stocks mentioned.

Roberto Pedone, based out of Delafield, Wis., is an independent trader who focuses on technical analysis for small- and large-cap stocks, options, futures, commodities and currencies. Roberto studied international business at the Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany. His work has appeared on financial outlets including

CNBC.com and Forbes.com. You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zerosum24.

This Company Is Set To Have A Bright Future

The retail numbers have shown up well in the month of June. U.S. retail sales rose 0.2% in June. Excluding the autos, retail sales have gained 0.4%. This is mainly because of strength in the apparels, food and department stores. Even the footwear industry is making its presence felt. Demand for footwear is also on the rise. Therefore, footwear retailers are enjoying the ride, helped by higher customer demand.

A typical example here is that of Wolverine World Wide (WWW), provider of casual and designer footwear. This company is doing well and its second quarter results were not an exception. It reported better than expected numbers, beating the Street's estimates. Let us take a look.

By the numbers

Revenue surged 4.4% over last year to $613.5 million. This was higher than the analysts' expectations of $608.5 million. The top line was driven by growth across all the three segments. Also, a shift in Easter and an increase in product prices helped in boosting sales during the quarter.

Out of the three segments, Lifestyle Group makes most of the revenue and grew 3.5% over last year. Even Performance Group registered growth of 5.8% to $211.2 million, over the prior year's quarter. Revenue from Heritage and Other Group jumped 2.6% and 10.8%, respectively. Further, Wolverine witnessed double-digit revenue gains in regions such as Asia-Pacific, Latin America and EMEA.

Adjusted earnings for the quarter jumped to $0.31 per share from $0.23 per share in the previous year. The bottom line too surpassed the analysts' estimate of $0.27 per share. However, gross margin fell to 40.1% from 41%. This decline was due to higher input costs and increase in promotional activity.

Restructuring measures

In order to overcome the problems of increasing costs and shrinking margins, the retailer has come up with a restructuring program. This program will not only help in reducing costs, but also in focussing on the core business, which give higher profitability.

So Wolverine World Wide plans to close 140 stores in the next 18 months. It will close 60 stores by the end of this year and another 80 by the end of FY 2015. These stores mostly include the Stride Rite stores and will make the store operations better and more profitable. This effort will result in a total cost of $30 million to $37 million. However, this plan will lead to a benefit of $11 million on an annual basis.

Thus, the footwear retailer lowered its guidance for the year. It now expects revenue to be in the lower range of $2.75 billion and $2.85 billion. Further, it reduced its earnings forecast to a range of $1.32 per share and $1.38 per share from a previous forecast of $1.48 per share to $1.54 per share.

Conclusion

The consumer direct business of the footwear giant is set to gain from the restructuring efforts. Although the plan will be weighing on the bottom line, its benefits will be reaped in the years to come. Also, it will help the company remain focussed on its core operations. Further, Wolverine is firing on all cylinders, since all the segments have been doing well. Its innovative products, wide geographical presence and strong bonding with customers should work in its favor. Therefore, the retailer's performance, coupled with the increase in consumer spending in th

Do You Want To Live To Be 100?

Or how about 101?  The Philadelphia Enquirer recently published a piece about Murray Shusterman, a 101 year old working Philadelphia lawyer who has been practicing law since 1936.  The article reports that "his mind is sharp, even if his hearing has dulled. His love for the law still shines."

As I am a promoter of healthy aging at AgingParents.com, I am always intrigued by these stories.  I look for the secrets to healthy longevity that inevitably the reporter asks about.   There seems to be a common theme running through the reports of those who are still going pretty strong at anything near 100.  Here's what I gleaned about Mr. Shusterman's long life.  Maybe we can think of them as the oldsters' tips for productive longevity.

1. The oldest members of our society, who are centenarians, comprising 0.0002 of the population, mostly seem to be very engaged in life. They all have a record of past or current involvement in their communities.  For Murray, it was everything from serving as counsel to the Commission on Human Relations and helping write city laws on fair housing and employment to involvement with his alma mater, Temple University. He has been deeply involved as a leader in many Jewish causes.
2. They face difficulty with stubborn determination.  Murray's son, Robert Shusterman an architect and lawyer is quoted as saying of his father, "He keeps pushing himself as hard as he can, and tries not to complain about things. He has a determination, a will to overcome impediments."

3.  They are generous with their time and assets. In 1994 Murray and his family gave $1 million to Temple Law School for the renovation of Park Hall, which reopened as Murray H. Shusterman Hall. Last year, Shusterman did more – donating $1.1 million to Temple Law to sponsor a professorship."His commitment and generosity have been an inspiration," law school dean JoAnne Epps is quoted as saying at the time.

4. They share their wisdom. Shusterman taught law as an adjunct professor for more than three decades, served on the university board of trustees, and in 1992 was elected an honorary, lifetime trustee.

5. They don't take themselves too seriously.  Here's what Murray had to say to the reporter when asked about his best and worst experiences in life:
"A person has many experiences over time, some good, some bad. . . . The real secret is to be decent, to be fair, and to be forgiving – now and then even a friend will do something that annoys you. And don't take yourself too seriously."

6.  They stay active.  Murray describes himself as being active all his life.  He played golf until age 100. He is the father of 3 sons and had a long marriage, widowed in 2005.  He doesn't, from the stories about him, strike one as a couch potato.

The story of Murray is not about what to eat or what exercise to do. It's not about doing brain exercises, though some of us think the practice of law is, of itself a regular brain exercise. ( I can attest to that from 3 decades of personal experience!) It is about much broader concepts and a philosophy of life.  Yes, he is surely blessed with good genes. And he maximizes this benefit by making his life an example of doing a lot of things in an upright way, enjoying it to the fullest.  70% of healthy aging is about your lifestyle.

I was inspired by Murray and hope you are too.  Even if you pick only one of the above six things he does and do more of it, you just might increase your chances of a longer, healthier life.

Until next time,
Carolyn Rosenblatt
AgingParents.com

Despite Massive Setbacks in China, Qualcomm Still Benefits

Qualcomm (NASDAQ: QCOM  ) isn't a stranger to China. But while the company's done business in the region for decades, lately China hasn't been too kind to Qualcomm. The country is already in the middle of investigating the company for monopoly practices and, to make matters worse, Qualcomm recently said Chinese businesses aren't paying device royalties owed to the company.

Same country, new problems
In addition to selling mobile processors, the company makes much of its revenue from baseband chips that connect mobile devices to cellular networks. Qualcomm is a leader in the mobile chip space, typically being several generations ahead with its chip technology than other companies. The Chinese government's investigation into Qualcomm's business practices isn't anything new, but last week a state-run newspaper said the company indeed does have a monopoly on wireless communication standards.

Receiving a monopoly ruling against Qualcomm doesn't necessarily mean it broke any Chinese antimonopoly laws, but the investigation is hurting the company's revenue. The company said last week in an SEC statement that the monopoly probe made it harder to collect licensing fees for its technology.

As The Wall Street Journal recently said, Qualcomm makes about 29% of its revenue from licensing its 3G and 4G patent technology, but makes about 77% of its pretax profits from those fees. As China clamps down on the company, those important royalty fees are being squeezed.

Though the company hasn't specified just how much its royalties are suffering, Qualcomm said in a statement:

We also believe that certain licensees in China currently are not fully complying with their contractual obligations to report their sales of licensed products to us (which includes certain licensees underreporting a portion of their 3G/4G device sales and a dispute with a licensee) and that unlicensed companies may seek to delay execution of new licenses while the NDRC investigation is ongoing.

So not only is the monopoly probe hurting current licensing negotiations, but some companies in China are underreporting the amount royalty fees they owe to Qualcomm.

Qualcomm just ended its fiscal third third quarter 2014 and beat most analysts' expectations. The company posted revenue of $6.81 billion, up 9% year over year. But the uncertainty from China leaves the company in a difficult position in one of it's most lucrative markets.

Still lots of potential
Despite the setbacks, there's no way Qualcomm can back off of its China ambitions. The country is in the middle of a major 4G LTE rollout, which will bring both chip and baseband revenue for the company, as well as additional licensing royalties.

China Mobile  (NYSE: CHL  ) -- the world's largest mobile network by subscribers -- has already launched part of its TD-LTE network, increasing its number of 4G subscribers from 1.3 million in February to 14 million at the of June. By the end of 2014, China Mobile says it will have 50 million 4G subscribers.

China Mobile was the first network carrier in China to receive government licenses to sell 4G LTE connectivity to consumers. China Telecom and China Unicom just received LTE test licenses last month and are limited to just 16 cities. But these licenses are step in the right direction in boosting the country's 4G connections and creating better competition between the three major carriers. China Mobile has 790 million subscribers alone, and less than 2% of those customers are currently connected to a 4G network.

China is one of Qualcomm's largest markets right now and accounted for nearly half of all the company's revenue in fiscal year 2013. Despite the investigation into Qualcomm and its impact on licensing revenue, as China Mobile and other telecoms expands their 4G coverage, the huge increase in those network connections will help push the company's royalty revenues even higher, and open up new avenues for the company to sell its baseband chips to smartphone makers.

More from The Motley Fool: Warren Buffett Tells You How to Turn $40 into $10 Million

Meat scandal takes a bite out of McDonald's sales in Japan

  Where's the beef in China? HONG KONG (CNNMoney) A tainted meat scandal that originated in China is now starting to stink up McDonald's sales.

The fast food chain's Japanese unit said Tuesday that it will fall short of profit and sales targets for the year, after a longtime meat supplier was shut down last week by authorities for unsanitary practices.

As meat from the supplier has been pulled out of circulation, McDonald's outlets in China, Hong Kong and Japan have stopped selling items such as Big Macs and Chicken McNuggets.

The scandal has led to "negative impact on sales and consumer confidence," the company's Japanese unit said in a statement. "Our sales and profit expectations have been reduced."

The meat scandal began when Chinese television showed workers at a Shanghai food plant handling expired and tainted meat with their bare hands. Workers at the Chinese subsidiary of Illinois-based OSI Group said that the meat smelled bad, and they could be seen processing meat that had fallen on the floor.

McDonald's (MCD) Japan had previously forecast sales of 250 billion yen ($2.5 billion) and net income of 6 billion yen ($59 million) for the year. The company said it isn't able to provide new targets as the scandal's full impact is still unfolding.

McDonald's shares traded in Japan fell 2.8% Wednesday morning , and have shed nearly 4% since the food safety issue began unfolding last week.

McDonald's has had a "challenging" year thus far in Japan, even before news hit over the bad meat scandal. The Japanese unit saw net income tumble 60% to 1.9 billion yen ($19 million) in the first half of this year compared to the same period last year. Sales at its directly owned stores and franchises dropped 4% after planned store clos! ures.

Oher food chains have been caught up in the scandal, including Yum Brands (YUM), which operates KFC and Pizza Hut in China, Burger King (BKW), Papa John's (PZZA) and Starbucks (SBUX).

Many companies have cut their ties with the supplier, but McDonald's has largely stood by OSI Group.

Say Hello To Hybrid Finance

Attila von Unruh was finished. Or so he thought. A few years after he had sold his small event technology company, it went bankrupt. Through a legal clause, he was liable, and had to file for insolvency. Attila went through a living hell of shame, financial deprivation, and family trouble.

Attila was not alone. There are over 30,000 small business bankruptcies every year in Germany, destroying €50 billion in economic value. Most micro entrepreneurs enter an abyss of isolation until their six year period of suspended income is over. Almost all cut social ties, and many remain scarred for life. Not so for Attila. After a while, he bounced back, launching Insolvents Anonymous, a peer support scheme modelled loosely after Alcoholics Anonymous. From the first moment, the demand was everywhere, and soon he started an association with chapters in 12 major cities. Attila had turned from business entrepreneur to social entrepreneur, and he found a business model that worked: By training experts who had been through the years-long doom period after insolvency and referring them to companies threatened by bankruptcy, he could create a million Euro market and new opportunities for a stigmatised group at the same time.

In the classic story of social entrepreneurship, this would be the chapter in which the entrepreneur undergoes a painful process of searching for growth capital. Though social entrepreneurs are experts at fixing market failures, there is one market failure even the most brilliant haven't been able to overcome: The capital they need to scale is simply not available in the financial ecosystem as we know it.

Frankfurt am Main (Photo credit: D-Stanley)

In much the same way most organisations are either charitable or commercial, the sources of finance neatly divide between non-repayable and repayable. Or, to use a metaphor: The money is all there, originating from private donors, foundations, governments, investors, companies, and of course banks, but each of these sources is like a different planet, each with its own laws of nature. This setup may work for a social and a business sector that each existed in its own silo, but it forces entrepreneurs like Attila to tell a different story about their work on each of the planets

And in this challenge, too, Attila has plenty of company. Increasingly, the most transformational ideas in any field (LINK to HBR article on Hybrid Value Chains) are hybrids: part social, part business. More than half of the leading social entrepreneurs find their market mechanisms (and refusal to think in neat project packages) are at odds with most philanthropic sources of funding, and yet their commitment to solving a social problem alienate investors.

Sounds like a challenge for finance professionals. And in fact, many such folks have brought commercial funding instruments to the world of social entrepreneurship. All across Europe, so-called impact investing funds now compete not only for investors but even more for the few social entrepreneurs that can (and want to) pay back hundreds of thousands Euros, or preferably millions, with investor returns greater than five percent.

Despite this transfer of financial expertise, the dilemma of hybrid organisations being faced by a fragmented financial system remained unsolved—a surprising fact given that commercial markets have long ago solved a similar problem. Most complex projects like, say, a new power plant, are not financed by one source of money but by piecing together several sources of money with often quite different risk-returnprofiles. A pension fund may be invested with a low risk and low return, a venture capitalist with a much higher return for his higher risk, while a public authority provides a guarantee and is happy to lose money for a different kind of benefit. This practice is called syndication, and it has been great business for banks and other intermediaries for more than a century.

So why not syndicate deals for social entrepreneurs?

Marketing entrepreneur Ellinor Dienst and former McKinsey consultant Markus Freiburg started a Financing Agency for Social Entrepreneurship in early 2013. Their first client: Attila von Unruh.

Within a few months, the FASE team had built a database of mostly private (and many of them first time) investors, matched two of them to Attila, and created a deal with terms that no established funder in the market could have offered. The FASE engineered a long term revenue sharing mechanism with an overall cap to the profits going to the investors. The new social business had found its early growth capital where no one had looked before.