Is American Capital Agency Undervalued?

With shares of American Capital Agency (NASDAQ:AGNC) trading around $30.94, is AGNC 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

American Capital Agency is a real estate investment trust. The company earns income primarily from investing on a leveraged basis in agency mortgage-backed securities. These investments consist of residential mortgage pass-through securities and collateralized mortgage obligations for which the principal and interest payments are guaranteed by government-sponsored entities. After the real estate boom and bust that led to the 2008 Financial Crisis, mortgage and real estate influenced companies took a major hit. However, many of these companies are now recovering and are seeing impressive returns. As the real estate market seems to be seeing progress, companies like American Capital Agency and poised to see rising profits.

T = Technicals on the Stock Chart are Weak

American Capital Agency stock has seen a consistent uptrend since its initial public offering in 2008. The stock has digesting gains for several months now so a break higher or lower for the stock will dictate a strong future trend.. 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, American Capital Agency is trading below its key averages which signal neutral to bearish price action in the near-term.

(Source: Thinkorswim)

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

	Implied Volatility (IV)	30-Day IV Percentile	90-Day IV Percentile
American Capital Agency Options	22.07%	76%	73%

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
May Options	Steep	Average
June 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 Decreasing 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 American Capital Agency's stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for American Capital Agency look like and more importantly, how did the markets like these numbers?

	2013 Q1	2012 Q4	2012 Q3	2012 Q2
Earnings Growth (Y-O-Y)	-75.94%	139.75%	-82.01%	-164.71%
Revenue Growth (Y-O-Y)	-57.82%	263.87%	-52.01%	-216.92%
Earnings Reaction	-7.37%	2.98%	2.71%	1.09%

American Capital Agency has mostly decreasing earnings and revenue figures over the last four quarters. From these figures, the markets have seen improvements in American Capital Agency's recent earnings announcements.

P = Average Relative Performance Versus Peers and Sector

How has American Capital Agency stock done relative to its peers, Anworth Mortgage Asset (NYSE:ANH), MFA Financial (NYSE:MFA), American Capital Mortgage (NASDAQ:MTGE), and sector?

	American Capital Agency	Anworth Mortgage Asset	MFA Financial	American Capital Mortgage	Sector
Year-to-Date Return	6.99%	4.84%	13.87%	3.82%	11.48%

American Capital Agency has been an average performer, year-to-date.

Conclusion

American Capital Agency is a real estate investment trust that primarily makes investments using mortgage-backed securities on government-sponsored entities. The stock has seen a consistent uptrend over the last several years and is now digesting gains from its rise in price. Earnings and revenue numbers have been decreasing but investors have seen improvement in the reports issued. Relative to its peers and sector, American Capital Agency has been an average year-to-date performer. WAIT AND SEE what American Capital Agency does in coming quarters.

Analysts Team Issues Upside Targets on Twitter, Ahead of the IPO

Most Wall Street analysts wait for a company’s IPO to actually price and then start trading before they issue Buy, Sell, or Hold recommendations (or other recommendations). This is not the case for Twitter as Sterne Agee’s Arvind Bhatia and Brett Strauser initiated coverage of Twitter with upside price targets that would translate to a “Buy” rating if the IPO came out right in its expected price range.

The Sterne Agee team did not establish any formal rating or price target yet. It is the tone of this report that sounds so positive, and they have opined that shares would be attractive if the IPO prices in the $17 to $20 proposed range.

Twitter’s IPO is expected to hit in the first week of November. The team’s valuation work suggests a base case valuation of $25 to $32 per share in the next 12 months to 24 months. The upside case is a value of $33 to $48 per share, versus a downside case of $13 to $15 per share. Again, this is a call for the next 12 months to 24 months.

Top Oil Companies To Invest In 2014

Twitter was shown to have some 232 million monthly active users, including 53 million in the U.S. Mobile accounts for 76% of the monthly active users, and over 70% of the advertising revenue was from mobile in the most recent quarter. The social network’s international user base represents 77% of the total but that same international group accounts for only 25% of the revenue.

The Sterne Agee team called the valuation proposal, “Twitter's scale and deeply engaged user base create valuable opportunities for advertisers to leverage the platform. Advertisers can communicate directly with their followers for free, or they can purchase Twitter's advertising services to reach a broader audience. Twitter's platform partners include publishers, media, outlets, and developers, who have integrated with Twitter through an application programming interface, which allows them to seamlessly leverage Twitter as a complementary distribution channel for their content. Twitter plans to continue to integrate more content into their API to allow platform partners to distribute more forms of content.”

Another issue pointed out is that 11% of Twitter’s revenue came from Data Licensing. This is where it provides data partners with detailed historical and real-time analytics regarding total user interactions with the platform. Only five of the top data partners generated about 73% of the data licensing revenue in the first 9 months of 2013.

Twitter plans to issue 70 million shares, or up to 80.5 million shares if you include the overallotment shares for the underwriters. This would generate a capital raise of $1.2 billion to $1.6 billion before fees.

How vital are ratings of a company by agencies?

A: The rating agency will give you rating at that time on the basis of information available to them so, AAA rating means the highest safety. But that is on the basis of that information. Go five years back, most of the infrastructure company had highest rating and today these companies are not doing too well so, a customer who is investing directly in bond or directly in the deposit run that risk.

Suppose, the same money come through mutual fund at least you can exit any time because you can look at the portfolio. Portfolio has 20-30 names, you have a company deposit, you have a company bond, you have a bank CD, G-Sec everything in the portfolio so one invest in a well diversified portfolio.

Third, the reliability of the rating agency in my opinion anywhere in the world is not very high. That is the beginning. That is not the end of investing, that is the beginning of investing. You look at the good rating then you do your investigation. Suppose you can't do your investigation you should not manage your money directly.

How To Find Market Bargains

As stocks have continued to rise over the past year, so too have price/earnings ratios. Back in mid-November of last year, for example, the S&P 500 was trading for just under 16 times trailing 12-month as-reported earnings. Today, that figure is up above 18.

The 10-year cyclically adjusted price-earnings ratio (CAPE), meanwhile, was just under 21 back then, but now is about 24. Throw in the fact that profit margins are at or near all-time highs, which some say is not sustainable, and many investors are starting to get a little wary about valuations.

I, for one, am not particularly worried by those figures, particularly given the low interest-rate environment we are currently in. Yes, the shorter-term P/E ratio has been rising, but is far from exorbitant; the CAPE, while on the higher side, is not astronomical, and is in many ways a flawed measure; and there is good evidence that, while profit margins may decline a bit, they're not going to go plummeting back down to long-term means.

Still, if you're not convinced that the P/E environment is an attractive one, there are plenty of other ways to value stocks than earnings-based measures. Benjamin Graham, known as the Father of Value Investing, used the price/book ratio (as well as the P/E). David Dreman used the P/B too, along with several other metrics. And Forbes' own Kenneth Fisher wrote an entire book about using the price/sales ratio (PSR) to find attractive stocks.

Over a decade ago, I developed Guru Strategies that mimic the published approaches of some of history's greatest investors, including Graham, Dreman and Fisher. Like the gurus themselves, these models use a number of non-earnings valuation metrics, like the price/book and price/sales ratios. And right now, they are finding plenty of fundamentally sound, attractively priced stocks using these non-earnings metrics. (I'd also note that the broader market is reasonably attractive using them, with a 1.5 PSR and 2.2 P/B ratio, according to Morningstar.)

Here are a handful that are catching their eyes. As always, you should invest in stocks like these as part of a broader, well diversified portfolio.

Annaly Capital Management Annaly Capital Management: New York-based Annaly ($11 billion market cap) is a real estate investment trust (REIT) that is currently paying out an 11.9% dividend yield. It gets strong interest from my Dreman-based model.

This contrarian approach looks for companies that are in the cheapest 20% of the market on any two of four valuation metrics: the price/book, price/sales, price/earnings, and price/cash flow ratios. Annaly is the rare firm that meets that target in all four categories (3.5 P/E, 6.4 P/CF, 0.90 P/B, 8.4 P/D).

Top 5 Gold Stocks To Watch For 2014

Of course, being cheap doesn't mean much if the company is a dog, so Dreman looked at a number of other fundamentals. The model I base on his writings looks, for example, for companies that have high returns on equity. At 24%, Annaly fits the bill.

Telecom Argentina (TEO): This Argentine company ($3 billion market cap), which also offers cellular services in Paraguay, is majority-owned by Nortel Inversora SA Nortel Inversora SA (which in turn is majority-owned by Telecom Italia Telecom Italia).

TEO's P/E is low—8.1—but that's not the only sign it's undervalued. My James O'Shaughnessy-based growth model has strong interest in the stock in part because its PSR is just 0.74, well below the model's 1.5 upper limit. This approach looks for low-PSR stocks that also have strong momentum—O'Shaughnessy wanted to find stocks that the market was embracing, but which hadn't gotten too pricey. With a solid 12-month relative strength of 87, TEO makes the grade. The strategy also likes that TEO has upped earnings per share in each year of the past five-year period.

TEO's PSR is one reason my Fisher-inspired model also likes the stock. Fisher pioneered the use of the metric in his 1984 classic Super Stocks, and, while his approach has shifted since then, my Super Stocks-inspired model has kept putting up strong results. The strategy also likes TEO's long-term inflation-adjusted growth rate of 20%, and its three-year average net profit margins of 13%. And my Dreman-based approach likes that TEO's P/E and price/cash flow ratios are both in the cheapest 20% of the market, and that it has a 28.9% return on equity and 4.6% dividend.

Special Offer: Invest like Buffett, Lynch and Graham. Validea Hot List specializes in legendary investor strategies. Its portfolio has returned 242% since 2003 versus 66% for the S&P 500. Click here to learn from all-time great investors in Validea Hot List.

Ford Reports a Double-Digit June Sales Increase

Ford headquarters. Photo courtesy of Ford.

Ford (NYSE: F  ) has been lighting the sales charts on fire this year and doesn't look to slow down anytime soon. It's set monthly records of sales throughout the year on its Fusion and Escape models while the F-Series has continued to be America's best-selling truck and vehicle. Ford just released its June sales figures, which were up 13% compared to last year, and it continues the positive trend investors were hoping for.

Quick hits 

As a whole, Ford was up 13% compared to a year ago, which was its best June since 2006. Its car and utilities sales are up 12% and 8%, respectively. Its truck sales are up 20%, with F-Series posting its best June since 2005. Lincoln's MKZ recorded its best June sales month ever and best quarterly sales ever. "In June, we continued to see strong demand across the entire lineup," said Ken Czubay, Ford vice president, U.S. marketing, sales and service, in a monthly press release. "We're particularly encouraged by strong retail share gains, especially in coastal markets, where the combination of great design and fuel economy is resonating with customers – including many buying a Ford for the first time."

10 Best Performing Stocks To Watch For 2014

Digging deeper
Under the Ford brand only, which accounts for the vast majority of sales, cars were up 13.3% compared to last year and offered some surprises. The Fiesta, which typically sells much better overseas, increased a staggering 104% compared to last year.

Ford's Fusion sales came in slightly under last year's sales at 24,313 (down 0.5%), but are still up a very healthy 17.8% for year-to-date sales. One of the reasons for this flat growth in sales is due to the limited production capacity. Recently it had been reported that the plant producing the Fusion is running at 114% capacity and Ford still can't keep enough inventory on the dealer lots. Until extra capacity comes on line, we may see flat sales growth for the Fusion.

Ford's Escape model continues to impress consumers and is being driven off the lots in a hurry. Its sales were only up 0.7% over last year, but still an impressive 28,694 Escapes were sold, its best June ever; it was also Ford's second-best-selling vehicle last month. Escape sales have been impressive all year and are still up a very healthy 23.2% in year-to-date figures.

The biggest winner for Ford and its investors is the ever-popular F-Series. It continues to blow up the sales charts with impressive gains, up 23.6% over last year's June sales and still up 22% in year-to-date sales. This is a critical number to finish off the last month of the quarter, and will definitely boost top-line revenues as well as bottom-line profits when Ford reports its quarterly earnings later this month. It sold over 68,000 F-Series trucks: To put that number in perspective, Ford considers anything above 50,000 a phenomenal month – making this entire year a gold mine for Ford and its investors.

Information from Ford monthly press releases.

It gets even better. The chart below emphasizes why the F-Series will be even more profitable this year as transaction prices outpace the industry.

Information from Automotive News DataCenter.

Bottom line
As you can see, with transaction prices rising faster than the rest of the industry, the F-Series will be very profitable. There is a caveat, though: TrueCar reports that the F-Series had the largest total incentives for the month of June. This shouldn't raise any alarms, for this is a typical strategy considering that rival General Motors (NYSE: GM  ) is currently releasing its redesigned 2014 Chevy Silverado. 

All in all, this caps off another excellent and profitable month for Ford and leaves investors with a huge expectation for a great quarterly report coming up later this month. It also caps off a great six months for an American icon that has had a business turnaround that will be discussed in future business classes across the nation.

Ford is killing it in the U.S. market, but can it replicate that success overseas to become the top global automaker? China is already the world's largest auto market – and it's set to grow even bigger in coming years. A recent Motley Fool report, "2 Automakers to Buy for a Surging Chinese Market", names two global giants poised to reap big gains that could drive big rewards for investors. You can read this report right now for free – just click here for instant access.

This One's Heating Up, That One's Cooling Off (RSOL, ABIO, ACYD, PRKR)

Last Thursday when I suggested American Community (OTCMKTS:ACYD) was a stock that should be shed immediately, and replaced with a position in Real Goods Solar, Inc. (NASDAQ:RSOL), I didn't win a lot of friends. After all, ACYD was the market's newest darling, in the middle of a red-hot runup, while RSOL was "just another solar name" that happened to be lucky enough to stumble its way above a key support line. Well, I hate to be the one to day I told you so, but, I told you so. American Community shares are down 35% since then, while Real Goods Solar shares are up 36% in the meantime. Both stocks seem pretty well entrenched in their current trends too.

I don't come hear to pat myself on the back, however. I come hear to let you know the same conditions that made American Community overbought and ripe for a reversal and suggested Real Goods Solar, Inc. was ready to rally are now saying - respectively - ParkerVision, Inc. (NASDAQ:PRKR) shares are due for a pullback and Arca Biopharma Inc. (NASDAQ:ABIO) is on the verge of a big bullish thrust.

As for ParkerVision, yes, it soared on Thursday and Friday of last week, on huge volume to boot. But, it may have been a little bit too much, too fast. There was so much volume behind the 118% surge from PRKR that there's really nowhere else left to go for stock. This morning's strong open looks like it just solidified the fact that there are no more buyers left at these lofty prices; we've seen nothing but selling ever since.

Arca Biopharma Inc., on the flipside, appears to be getting comfortable above a major line in the sand at $1.50. That level was a tough ceiling between June and September, but once ABIO fought its way above that level late last month, the resistance turned into support (and it's proven itself as a support line since then). Now the 20-day moving average line appears to acting as s support level too, suggesting the bulls are brewing up another pushoff from the newly-formed floor. But, this is a case where waiting for the breakout move may be too late.

Top Warren Buffett Stocks To Buy For 2014

As was the case with ACYD and RSOL, these aren't terribly long-term, fundamental-based calls on ABIO or PRKR. But, as was also the case with American Community and Real Goods Solar, the size of the likely short-term swings from ParkerVision and Arca Biopharma are too big to simply ignore or not capitalize on.

If you'd like to get more trading ideas and insights like this one, sign up for the free SmallCap Network daily e-newsletter. It's full of stock picks, market calls, and more.

Go Global - T. Rowe Price Japan Fund's High-Impact Sell Outs

The third quarter portfolio of the T. Rowe Price Japan Fund shows 93 stocks, 14 of them new. The fund's total value is $285 million, with a quarter-over-quarter turnover of 18%. The portfolio is currently weighted with top three sectors: consumer cyclical at 24.7%, technology at 14.8% and financial services at 13.8%.

In the third quarter of 2013, T. Rowe Price Japan Fund reduced or sold out a total of 28 stocks that trade on the Tokyo Stock Exchange. Here's a look at three of the fund's highest-impact sell outs, as of the quarter ending Sept. 30, 2013. Prices are quoted in Japanese yen or ¥. (Currency conversion: 1 JPY = $0.010 USD).

Here's a recent GuruFocus feature about the T. Rowe Price Japan Fund's new buys.

Canon Inc. (TSE:7751)

Sold Out

Impacts Portfolio: -1.3%

Up 18% over 12 months, Canon Inc., the business equipment company, has a market cap of ¥3.62 trillion; its shares were traded at around ¥3210 with a P/E of 16.50 and a P/B of 1.36. The dividend yield is 3.58%.

Global Guru Action: As of Sept. 30, 2013, T. Rowe Price Japan Fund sold out its position, selling 102,500 shares in the average price range of ¥3179.08 per share. Trading in six quarters, the fund had mixed results. The highest gain was 13.4% on 14,800 shares bought at an average price of ¥2751.24 per share in the third quarter of 2012.

As of the second quarter, there were two other guru stakeholders and no insider activity reported.

Track historical pricing, revenue and net income:

[ Enlarge Image ]

SECOM Co. Ltd. (TSE:9735)

Sold Out

Impacts Portfolio: -1.1%

Up 48% over 12 months, SECOM Co. Ltd., a security company, has a market cap of ¥1.33 trillion; its shares were traded at around ¥6100 with a P/E of 19.700 and a P/B of 1.33. The dividend yield is 1.54%.

Global Guru Action: As of Sept. 30, 2013, T. Rowe Price Japan Fund sold out its position, ! selling 53,800 shares in the average price range of ¥5773.17 per share for a gain of 5.7%. The fund held for two quarters only, with the highest gain of 16.9% in the second quarter of 2013 when it made a new buy of 53,800 shares at an average price of ¥5219.11 per share.

As of the second quarter of 2013, there were three other guru stakeholders and no insider activity found.

Track historical pricing, revenue and net income:

[ Enlarge Image ]

Try a GuruFocus Premium Membership for a 7-day Free Trial to access more information about the T. Rowe Price Japan Fund and others around the world.

Yamada Denki Co. Ltd. (TSE:9831)

Sold Out

Impacts Portfolio: -1%

Down 14% over 12 months, Yamada Denki Co. Ltd., an electronic appliance retailer, has a market cap of ¥264.73 billion; its shares were traded at around ¥280 with a P/E of 21.70 and a P/B of 0.03. The dividend yield is 1.92%.

Global Guru Action: As of Sept. 30, 2013, T. Rowe Price Japan Fund sold out its position, selling 639,100 shares at an average price of ¥360.47 per share, for a loss of 22.3%.

In six losing quarters, the fund's lowest low was a loss of 36.2% on 369,300 shares bought at an average price of ¥438.83 per share in the second quarter of 2012.

As of the third quarter of 2013, there were no guru stakeholders and no insider activity reported.

Track historical pricing, revenue and net income:

[ Enlarge Image ]

Try a GuruFocus Premium Membership for a 7-day Free Trial to access more companies and markets around the world. If you are not yet a Premium Member, try a 7-day Free Trial.

Test Drive: Electric Chevy Spark a powerhouse

As much torque as a Hemi V-8, less rear-seat space than a picnic basket, an absurdly high price unless you qualify for all the "eco" credits.

But the Chevrolet Spark EV, on sale since June in California and Oregon, has a premium feel that we didn't notice in the gasoline model. No doubt the extraordinary sling-about go-power of the EV put a higher-level patina on the whole car.

Spark's a minicar, a little bigger than a Fiat 500. The gasoline models are priced about 58% of the EV, so it's hard to imagine you'd save enough on fuel to pay the difference.

And you're not really the green hero you might imagine. While there's no exhaust emission from the car, you've tapped into the utility company's power grid to recharge, and nearly half the electricity flowing on that grid, on average, is generated by generators burning coal.

Juice is cheaper than gasoline now, but if electrics catch on, the price of power will rise with increasing demand. That's because the grid's about maxed out, and it's very expensive to add more power plants. Carried to extremes, it's fair to argue that your EV raises my electricity bill.

But how is the Spark EV as a car, a drivable thing that gets you here and there? Pretty sweet, actually.

First, it's simple. Hop in, push the ignition switch, pull the lever into gear and away you go.

Second, it's comfy if you're in front. Seats are well-formed and controls and instruments are about where they ought to be.

Third, the buggy flat goes, at least once it's rolling a couple miles per hour. The one-speed transmission isn't a gem for zooming away from a dead start, but the 400 pounds-feet of torque the electric motor has is instantly available and slings the Spark EV forward delightfully once underway. Chevy quotes 0 to 60 mph in 7.6 seconds. We bet it could be 6 seconds or less if there were a transmission with low gearing to get rolling.

Fourth, Chevy parent General Motors does in-car electronic connectivity linkup very nicely. The MyLin! k setup (shared with the gas version of Spark) made fast and faithful friends with Test Drive's too-hip Windows phone.

The connection is fully integrated via Bluetooth, no wire connection needed (unless you want to plug into the 12-volt outlet to charge). All phone controls are available via the car controls. When playing phone tunes, the screen in the center of the dashboard shows title and artist, whether the music is stored on the phone or piped in via the phone's Pandora application.

The Chevy allows switching tracks and adjusting the volume via the dashboard — things you have to do on the phone instead of the car in some lesser system. Picking up the phone to find another song is a driver distraction that Spark avoids.

It's enough to make Ford Sync owners weep.

What you might dislike about an otherwise appealing little go-buggy:

Hooking up the charging cable. Minor, but more work than stuffing a gas nozzle into the fuel filler. The fat electric cord used by 240-volt chargers is stiff and kinky and unpleasant to coil up when out of use. Almost always dirty, too, because it drapes along the ground to reach your car.

Short range. Well, 82 miles, government rated, is in the ballpark for mainstream electrics, but unless all your miles are home to work and back, you're going to start feeling that "range anxiety" they talk about.

Driving highway-fast, with lights and climate control operating, we burned off 1.3 miles of indicated battery range for every mile driven. That was a thirsty surprise. The kick-it-and-go suburban driving we did took only about 0.9 of a mile of range for every mile driven.

Back seat. So cramped for knee and leg space that even the kids will yowl. The head restraints are terrible, too. They'll drop down when unused to improve rear visibility, but that wrenches the head and neck of the people who hop in and forget to raise them. Once raised, they often hit the skull at just the wrong spot.

It's more practical! to have ! a back seat than not, but Spark's is an impractical back seat, at best.

Styling. If you hate how it looks, of course, you wouldn't buy it in the first place. But if you're on the fence, be warned that the stumpy, truncated appearance seems like a car trying to emerge from the industrial equivalent of a photo zip file, and not quite making it. Reasonable people often disagree on matters of taste, so you might think Spark's eye candy.

Most telling? In a driveway full of appealing machines, including BMWs, which car did we take for that midnight milk run, and fast hop to pick up a prescription? Spark EV. Easy to use, small enough to park almost anywhere. And, yum, wonderfully powerful.

We hope GM decides not to limit it to California and Oregon much longer. The world at large needs a shot at an EV that'll blow the doors off some sporting machines. The sooner we make this fuel-saving business a joy ride, the sooner we'll have a lot of converts.

CHEVY SPARK DETAILS

What? Electric-power version of Spark four-door, four-passenger, front-drive minicar.

When? Went on sale in California and Oregon mid-June. Sale in other areas under consideration.

Where? Made in South Korea using U.S. drivetrain.

How much? $27,495, including $810 shipping for 1LT base model. Similarly equipped gasoline version is $15,820.

Up-level 2LT test car, which has different upholstery and steering-wheel trim, is $27,820.

Some EV buyers qualify for as much as $7,500 in federal tax credit. California gives $2,500 credit. Lease is $199 monthly for 36 months, $999 down.

Most owners will spend another $1,000 or more for a 240-volt charger to cut the long recharging time using the standard-issue 120-volt charger.

What makes it go? Electric motor rated 130 horsepower and 400 pounds-feet of torque, driving front wheels through a single-speed transmission.

How big? About 5 inches longer, an inch narrower than a Fiat 500. Maximum ! cargo spa! ce, 23.4 cubic feet.

How thirsty? Electrics are rated differently from gasoline, diesel and hybrid models. Government says Spark EV will go 82 miles on a full charge, and has mile-per-gallon equivalent ratings of 128 mpg in the city, 109 highway, 119 mpg-e in combined city/highway driving; uses 28 kilowatt-hours per 100 miles.

Test car observations: Full charge showed range of 82 to 85 miles on instrument panel. High-speed highway driving used 1.3 miles of range for every mile driven. Vigorous suburban driving used 0.9 mile of range for every mile driven.

Trip computer showed overall power consumption of 24.4 kwh per 100 miles. According to government nationwide averages, a kwh is about 13 cents, equating to $3.17 in electricity per 100 miles.

Gasoline Spark is rated 32 mpg in combined city/highway, or 3.13 gallons per 100 miles. At $3.40 a gallon, a recent nationwide average, the gasoline Spark would use $10.64 in petroleum fuel per 100 miles. That's nearly 3.4 times the cost of electricity to go as far.

Overall: Gotta love that torque; a real scooter. Back seat's a joke. Cheaper fuel cost can't erase higher purchase cost.

Rockwell Automation Keeps Dividend at $0.52

Industrial automation specialist Rockwell Automation  (NYSE: ROK  )  announced yesterday its third-quarter dividend of $0.52 per share, the same rate it paid last quarter after raising the payout almost 11% from $0.47 per share.

The board of directors said the quarterly dividend is payable on Sept. 10 to the holders of record at the close of business on Aug. 12. The industrial parts maker has made quarterly cash payouts since 1996.

The regular dividend payment equates to a $2.08-per-share annual dividend, yielding 2.4% based on the closing price of Rockwell Automation's stock on June 5.

Top 10 Oil Companies To Watch For 2014

ROK Dividend data by YCharts.

link

D.C. Won't Issue Tax Refunds, Going Broke Due To Shutdown: Are More States Far Behind?

If there were any doubt as to how much our nation's capital relies on the federal government, consider this: the D.C. government has just announced that it will stop issuing tax refunds for individuals and businesses due to the federal shutdown.

No, don't read it again. You got it right the first time. No D.C. tax refunds due to the federal shutdown.

So what's the connection, exactly? Federal funds make up a quarter of the District of Columbia's local budget. That dependency, combined with the collective hit to the city as tourists flee and workers stay home, has lead to an economic crunch. The city spends about $18 million per day on city services and payroll but currently only has about a week's worth of cash ($153 million) left in its coffers. There's an additional $110 million in emergency funds but that will only stretch out for another week. If the shutdown continues, woes won't stop at delayed refund checks: chances are, payroll for city employees will be delayed.

Top 5 Dividend Companies To Own For 2014

It's easy to point fingers at D.C. and pretend that's what they get for relying so heavily on federal funds. But that would be a bit hypocritical if you live in, say, Florida, Louisiana or South Carolina, which sit at the top of a government list provided by the Office of Management and Budget of states which receive federal funding. In fact, nearly 10% of all states rely just as heavily as D.C. on federal funding as a percentage of their budget.

Florida easily tops the list, spending $30,318 of federal funds per capita. But the ranking can't be explained simply on the basis of population: for the last fiscal year, the Sunshine State received the most federal funds both in total and on a per capita basis. Those funds are used to run government agencies (Florida, in particular, saw a number of dollars directed to Health and Human Services and Homeland Security), pay contractors and fund entitlement programs.

If you focus on dollars flowing out of the federal government and into the hands of state residents, Alaska takes honors, receiving more than $15,000 per person.

And when you start peeling apart by category, Hawaii tops the list in terms of defense spending (who would have guessed?) while California leads in defense spending procurements (followed by Virginia).

When it comes to spending, there are a number of ways to interpret the numbers. You can focus on total expenditures per state for programming; spending per capita for programming; or net contributions per capita, taking into consideration revenue received and spending. The nature of expenditures can vary, too, including direct payments for programming, subsidies and contractor payments.

The bottom line is that, on some level, no matter the demographics or political leanings, states all rely on federal funding on some level: one state, two states, red state, blue states. All states are feeling the effects of the government shutdown. It's not just about parks and museums or IRS or defense. It's about how our government functions in our society. The shutdown is affecting more than federal employees. And the lost dollars tied to government spending inside our states – for better or worse – can't be easily captured.

The next time you see a headline about the shutdown and think, "That doesn't apply to me," reach a little further. You might be surprised.

–

Want more taxgirl goodness? Pick your poison: You can receive posts by email, follow me on twitter (@taxgirl) hang out with me on Facebook and check out my YouTube channel. NEW at taxgirl: you can subscribe to the podcast on the site or via iTunes (it's free).

CSX Corp Announces Q3 Earnings; Beats Estimates (CSX)

After the bell on Tuesday, CSX Corp (CSX) announced its third quarter results, with earnings increasing from last year’s same quarter.

The Jacksonville, FL-based transportation company reported revenues of $3 billion, which came in higher than analysts’ estimates of $2.94 billion. CSX announced earnings of $463 million, or 46 cents per share, which were up from last year’s Q3 figure of $455 million, or 44 cents per share. The company’s quarterly EPS results beat the analyst outlook of 43 cents.

Top Stocks To Invest In Right Now

Looking ahead, the company stated that it expects its EPS results for the full year to be up from 2012′s earnings.

CSX shares were up 8 cents, or 0.31%, by Tuesday’s market close. YTD, the company’s stock is up 29%.

Top 10 Undervalued Stocks To Watch For 2014

Norway's Yara International (Nasdaq:YARIY) is no run-of-the-mill commodity company. Not only is the largest supplier of mineral fertilizers in the world, holding 9% share of the global nitrogen fertilizers market, but Yara has a rare record of consistent double-digit returns on capital and assets.

While the quality of the company's assets, the benefits of nitrogen fertilizers, and the discipline of management speak well to the company's future, a surge in Chinese exports and energy costs is squeezing the company's profitability. Making matters worse, it's likely to get uglier from here, as the company could be looking at EBITDA bottoming out in the 2014/2015 timeframe. Although Yara is a little undervalued today and is likely to continuing paying a healthy dividend through the lows of the cycle, holding commodity stocks through the bottom of the cycle can be painful for shareholders.

SEE: CF Inustries Reopening Alberta Plant

More Chinese Urea, And More Expensive Gas

Top 10 Undervalued Stocks To Watch For 2014: Tupperware Corporation(TUP)

Tupperware Brands Corporation operates as a direct seller of various products across a range of brands and categories through an independent sales force. The company engages in the manufacture and sale of kitchen and home products, and beauty and personal care products. It offers preparation, storage, and serving solutions for the kitchen and home, as well as kitchen cookware and tools, children?s educational toys, microwave products, and gifts under the Tupperware brand name primarily in Europe, Africa, the Middle East, the Asia Pacific, and North America. The company provides beauty and personal care products, which include skin care products, cosmetics, bath and body care, toiletries, fragrances, nutritional products, apparel, and related products principally in Mexico, South Africa, the Philippines, Australia, and Uruguay. It offers beauty and personal care products under the Armand Dupree, Avroy Shlain, BeautiControl, Fuller, NaturCare, Nutrimetics, Nuvo, and Swissgar de brand names. The company sells its Tupperware products directly to distributors, directors, managers, and dealers; and beauty products primarily through consultants and directors. As of December 26, 2009, the Tupperware distribution system had approximately 1,800 distributors, 61,300 managers, and 1.3 million dealers; and the sales force representing the Beauty businesses approximately 1.1 million. The company was formerly known as Tupperware Corporation and changed its name to Tupperware Brands Corporation in December 2005. The company was founded in 1996 and is headquartered in Orlando, Florida.

Advisors' Opinion:

• [By Eric Volkman]

  Tupperware Brands (NYSE: TUP  ) is reaching into its corporate bowl for a fresh payout to shareholders. The company has declared a quarterly dividend of $0.62 per share. This will be paid on July 8 to stockholders of record as of June 19. That amount matches the firm's previous distribution, which was paid in early April. Prior to that, Tupperware Brands was rather less generous, handing out $0.36 per share.

• [By Arie Goren]

  After running this screen on May 21, 2013, before the markets' open, I discovered the following eight stocks: Sunoco Logistics Partners LP (SXL), Leggett & Platt Inc (LEG), Copa Holdings SA (CPA), RPC Inc. (RES), Tupperware Brands Corp. (TUP), Herbalife Ltd. (HLF), John Wiley & Sons Inc. (JW.A) and C.H. Robinson Worldwide Inc. (CHRW).

Top 10 Undervalued Stocks To Watch For 2014: Schlumberger N.V.(SLB)

Schlumberger Limited, together with its subsidiaries, supplies technology, integrated project management, and information solutions to the oil and gas exploration and production industries worldwide. The company?s Oilfield Services segment provides exploration and production services; wireline technology that offers open-hole and cased-hole services; supplies engineering support, directional-drilling, measurement-while-drilling, and logging-while-drilling services; and testing services. This segment also offers well services; supplies well completion services and equipment; artificial lift; data and consulting services; geo services; and information solutions, such as consulting, software, information management system, and IT infrastructure services that support oil and gas industry. Its WesternGeco segment provides reservoir imaging, monitoring, and development services; and operates data processing centers and multiclient seismic library. This segment also offers variou s services include 3D and time-lapse (4D) seismic surveys to multi-component surveys for delineating prospects and reservoir management. The company?s M-I SWACO segment supplies drilling fluid systems to improve drilling performance; fluid systems and specialty tools to optimize wellbore productivity; production technology solutions to maximize production rates; and environmental solutions that manages waste volumes generated in drilling and production operations. Its Smith Oilfield segment designs, manufactures, and markets drill bits and borehole enlargement tools; and supplies drilling tools and services, tubular, completion services, and other related downhole solutions. The company?s Distribution segment markets pipes, valves, and fittings, as well as mill, safety, and other maintenance products. This segment also provides warehouse management, vendor integration, and inventory management services. Schlumberger Limited was founded in 1927 and is based in Houston, Texas.

Advisors' Opinion:

• [By Taylor Muckerman and Joel South]

  Gulf of Mexico delivering boatloads of profit
  Already, several companies have spoken glowingly about activity levels in the Gulf of Mexico. Not just drillers like Noble Corp (NYSE: NE  ) �but also equipment and service companies like Halliburton (NYSE: HAL  ) and Schlumberger (NYSE: SLB  ) . What we are seeing here is a steady increase in both dayrates and utilization rates, which are both�very�positive signs for drillship operators.

• [By Matt DiLallo]

  In addition, the process could really vault Halliburton past industry peers Schlumberger (NYSE: SLB  ) and Baker Hughes (NYSE: BHI  ) . All three companies have been looking overseas for growth as rig counts in the U.S. have been on the decline. Just last quarter, U.S. rig counts dropped by 3%, which helped cause Halliburton's revenue to dip by 1%. However, if H2O Forward works as planned it could help Halliburton take additional market share from its competitors in the U.S., enabling it to do well even if rig counts continue to drop. Also, the company could begin to offer the solution overseas, which would help maintain its industry-leading growth.�

• [By Matt DiLallo]

  Along with announcing earnings, both Halliburton (NYSE: HAL  ) and Schlumberger (NYSE: SLB  ) announced multi-billion-dollar stock buybacks. With so much money on the line, investors have to ask if this is the right move for these two oil-field service giants. Are these stocks cheap enough to warrant the buybacks or should these companies consider other options for those funds?

Top 10 Value Companies To Buy Right Now: Caterpillar Inc.(CAT)

Caterpillar Inc. manufactures and sells construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives worldwide. It operates through three lines of businesses: Machinery, Engines, and Financial Products. The Machinery business offers construction, mining, and forestry machinery, including track and wheel tractors, track and wheel loaders, pipelayers, motor graders, wheel tractor-scrapers, track and wheel excavators, backhoe loaders, log skidders, log loaders, off-highway trucks, articulated trucks, paving products, skid steer loaders, underground mining equipment, tunnel boring equipment, and related parts. It also manufactures diesel-electric locomotives; and manufactures and services rail-related products and logistics services for other companies. The Engines business provides diesel, heavy fuel, and natural gas reciprocating engines for Caterpillar machinery, electric power generation systems, marine, petrol eum, construction, industrial, agricultural, and other applications. It offers industrial turbines and turbine-related services for oil and gas, and power generation applications. This business also remanufactures Caterpillar engines, machines, and engine components; and offers remanufacturing services for other companies. The Financial Products business provides retail and wholesale financing alternatives for Caterpillar machinery and engines, solar gas turbines, and other equipment and marine vessels, as well as offers loans and various forms of insurance to customers and dealers. It also offers financing for vehicles, power generation facilities, and marine vessels. The company markets its products directly, as well as through its distribution centers, dealers, and distributors. It was formerly known as Caterpillar Tractor Co. and changed its name to Caterpillar Inc. in 1986. Caterpillar Inc. was founded in 1925 and is headquartered in Peoria, Illinois.

Advisors' Opinion:

• [By John Divine]

  Lastly, Caterpillar (NYSE: CAT  ) stock was one of just seven decliners in the index, losing 1.5% today. Nearly 5% of Caterpillar's float is being sold short, making it the second most loathed stock in the Dow. Talks between Caterpillar and the United Steelworkers Union broke off late yesterday, showing the extent of the differences between the two sides as the 800 workers try to negotiate new contracts.

• [By idahansen]

  Due to the impact of The Great Recession, stocks in the agricultural sector such as Caterpillar (NYSE: CAT), The Mosiac Company (NYSE: MOS), and Potash of Saskatchewan (NYSE: POT) are trading well below highs. The exchange traded fund for the industry, DBA Power Shares, (NYSE: DBA), is down more than 17% for the last year. Despite this bearish trend, legendary investors such as Warren Buffett, George Soros, and Jim Rogers are very positive for the agriculture group. With the long term bullish outlook for the sector from the greatest investors in history, small cap stocks active in the fertilizer sector such as Sirius Minerals (LSE: SXX) and Americas Petrogas (TSX: BOE) are especially attractive.

• [By Matt Thalman]

  Year-to-date, shares of the aluminum giant Alcoa (NYSE: AA  ) are down 8.06% while the Dow Jones Industrial Average (DJINDICES: ^DJI  ) has risen 12.94%. Alcoa is currently the worst-performing Dow component and one of two stocks to have fallen into negative territory for the year. The other is Caterpillar (NYSE: CAT  ) , the construction and mining equipment company.

• [By Jeremy Bowman]

  Caterpillar (NYSE: CAT  ) took the cake today among Dow stocks, gaining 2.3%, as the construction-equipment maker bumped up its quarterly dividend 15%, to $0.60, or a 2.9% yield. It was the company's third consecutive annual dividend increase and, on a bullish day, that was enough to push the macro-economically sensitive stock up over 2%. Caterpillar has been one of the worst-performing on the Dow this year as it has actually fallen 5% in 2013. Given its sluggish performance recently, the stock may be due for a gain.

Top 10 Undervalued Stocks To Watch For 2014: Dollar Tree Inc.(DLTR)

Dollar Tree, Inc. operates discount variety stores in the United States and Canada. Its stores offer merchandise primarily at the fixed price of $1.00. The company operates its stores under the names of Dollar Tree, Deal$, Dollar Tree Deal$, Dollar Giant, and Dollar Bills. Its stores offer consumable merchandise, including candy and food, and health and beauty care, as well as household consumables, such as paper, plastics, household chemicals, in select stores, and frozen and refrigerated food; variety merchandise, which includes toys, durable housewares, gifts, party goods, greeting cards, softlines, and other items; and seasonal goods, such as Easter, Halloween, and Christmas merchandise. As of April 30, 2011, it operated 4,089 stores in 48 states and the District of Columbia, as well as 88 stores in Canada. The company was founded in 1986 and is based in Chesapeake, Virginia.

Advisors' Opinion:

• [By Rich Duprey]

  Deep discounter Dollar Tree (NASDAQ: DLTR  ) announced today that its current chief operating officer, Gary Philbin, will now also carry the title of president, a position previously held by company CEO Bob Sasser.

• [By Lawrence Meyers]

  The finance sector, as mentioned, can make money in many ways. The second-highest growth sector is expected to be consumer discretionary, with a 6.2% increase. When you look at earnings from luxury brands like Tiffany & Co. (TIF), and that the hotel sector continues to do very well, it suggests that those people who are in good financial shape are spending their money. Meanwhile, dollar players like Dollar Tree (DLTR) continue to perform very well, suggesting that folks with less money are spending it on cheaper items.

Here Comes The 2013 Forbes China Rich List

China is a key locomotive for global economic growth today, and yet many of its top business leaders aren't very well known around the world.  Who's made and lost some of the biggest fortunes in China in the past year, and why? Are China's rich getting richer, and, if so, how?

Robin Li ranked No. 2 on the 2012 Forbes China Rich List with wealth of $8.1 billion. (Photo credit: Wikipedia)

We'll be answering those questions on Wednesday, Oct. 16, when Forbes Asia and Forbes China, our licensed Chinese-language edition, will unveil one of our most closely followed reports every year, the Forbes China Rich List.

The 2013 edition will be announced at 10 a.m. local time at the Banyan Tree Shanghai on the Bund.

At a time when the U.S. economy has been struggling, China has become the world's fastest-growing source of new billionaires. On the 2013 Forbes Billionaire List published in March, the mainland's 122 members were second only to the United States. Among them were Robin Li, the CEO of Internet search leader Baidu, and Jack Ma, chairman of China's e-commerce giant Alibaba Group.

The Forbes China Rich List also provides on-the-ground insight into globally important economic and business trends from a Chinese private sector perspective.  Keep an eye out for the 2013 rankings on Wednesday here at Forbes.com and ForbesChina.com.

– Follow me on Twitter @rflannerychina

 

 

 

 

 

5 Best Small Cap Stocks To Buy Right Now

Exchange-traded products have found their way into countless portfolios as investors of all walks have embraced these financial instruments for their ease-of-use, cost-efficiency, and unparalleled transparency.�Institutional and self-directed money managers alike have taken advantage of ETFs as they offer instant diversification along with the ability to easily tap into virtually any asset class around the globe; with over 1,400 products on the market, there is an ETF for almost everything imaginable, spanning from gold funds to emerging markets small caps to international bonds and everything in between .�

A recent WSJ article by Anna Prior highlights the sheer diversity among products in the ETF universe and how investors can actually build fairly complete portfolios with just a few funds. In the spirit of simplicity, below we outline 25 All-ETF portfolios, each comprised of just three funds in total; please note that investors should adjust the suggested allocations within each of the strategies to better suite their individual risk preferences and current income needs.

5 Best Small Cap Stocks To Buy Right Now: Rackspace Hosting Inc(RAX)

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

Advisors' Opinion:

• [By Brian Pacampara]

  Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, Web-hosting company Rackspace Hosting (NYSE: RAX  ) has earned a respected four-star ranking.

• [By Anders Bylund]

  Ouch, dude. That swan dive came from cloud computing specialist Rackspace Hosting (NYSE: RAX  ) , based on a disappointing earnings report with a weak next-quarter outlook. The company is waist-deep in moving old customers over to the new OpenStack platform, leaving less resources for seeking out new contracts. So revenue jumped 20% year-over-year to $362 million, but Wall Street had expected $367 million. Rackspace rarely publishes quarterly guidance, but the second-quarter sales range provided this week sits 3% below analyst targets.

• [By Anders Bylund]

  Rackspace Hosting (NYSE: RAX  ) has seen share prices plummet 48% in just five months. Many investors glanced at the roller-coaster chart and decided to cash out, but Fool contributor Anders Bylund ran in the opposite direction.

5 Best Small Cap Stocks To Buy Right Now: Hot Topic Inc.(HOTT)

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

Advisors' Opinion:

• [By Marshall Hargrave]

  In May True Religion (TRGL) announced a buyout offer from TowerBrook Capital for $826 million. Also in May, Rue21 decided to sell itself to Apax Partners for $2.2 billion. Before that, in March, Hot Topic (HOTT) announced that Sycamore Partners was buying out it out for $600 million.

Top 5 Value Stocks To Invest In 2014: China Metro-Rural Holdings Limited(CNR)

China Metro-Rural Holdings Limited, through its subsidiaries, primarily engages in the development and operation of agricultural logistics and trade centers in northeast China. It also involves in purchasing, processing, assembling, merchandising, and distributing pearls and jewelry products. The company markets its pearls and jewelry products to wholesale distributors and mass merchandisers in Europe, the United States, Hong Kong, and other parts of Asia. In addition, it develops, sells, and leases residential and commercial properties in Hong Kong and the People?s Republic of China. The company is based in Tsimshatsui, Hong Kong.

Advisors' Opinion:

• [By Katie Brennan]

  Canadian National Railway Co. (CNR) added 0.9 percent to C$104.93 and Canadian Pacific Railway Ltd. rose 1.7 percent to C$131.73.

  Niko Resources surged 3.4 percent to $8.64 after the company entered an agreement for a $60 million loan that will be funded by a group of institutional investors. Net proceeds from the loan will be used to fund working capital requirements.

5 Best Small Cap Stocks To Buy Right Now: InterDigital Inc.(IDCC)

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

Advisors' Opinion:

• [By CRWE]

  InterDigital, Inc. (NASDAQ:IDCC) reported that certain of its subsidiaries have completed the previously announced sale of roughly 1,700 patents and patent applications to Intel Corporation for $375 million in cash.

• [By Evan Niu, CFA]

  What: Shares of InterDigital (NASDAQ: IDCC  ) have gotten crushed today by as much as 20% after the company lost a patent suit against several smartphone makers.

5 Best Small Cap Stocks To Buy Right Now: Panera Bread Company(PNRA)

Panera Bread Company, together with its subsidiaries, owns, operates, and franchises retail bakery-cafes in the United States and Canada. Its bakery-cafes offer fresh baked goods, sandwiches, soups, salads, custom roasted coffees, and other complementary products, as well as provide catering services. The company also manufactures and supplies dough and other products to company-owned and franchise-operated bakery-cafes. As of March 29, 2011, it owned and franchised 1,467 bakery-cafes under the Panera Bread, Saint Louis Bread Co., and Paradise Bakery & Cafe names. The company was founded in 1981 and is based in St. Louis, Missouri.

Advisors' Opinion:

• [By Daniel Sparks]

  For Panera Bread (NASDAQ: PNRA  ) , the stakes are high. Can the bakery-cafe continue on its impressive growth trajectory? On Tuesday, shareholders will get a chance to check in on the company to see whether or not the company's growth story is still hot.

• [By WALLSTCHEATSHEET.COM]

  Panera has defied the odds and proven skeptics wrong for many years. The stock also held up much better than its peers during the financial crisis. This doesn�� mean Panera is as resilient now as it was at that time, but�this should at least offer some comfort. On the other hand, it�� nice to own a stock that pays a dividend during difficult times, which�can help ease the pain.

Debt talks push stocks higher for second day in a row

Bloomberg News

U.S. stocks rose, sending the Standard & Poor's 500 Index (SPX) to the highest level since September, on speculation lawmakers were making progress toward an agreement on raising the debt limit to avoid a default.

The S&P 500 increased 0.6% to 1,703.19 at 4 p.m. in New York, erasing losses since the government's partial shutdown that began Oct. 1.

“We are picking up smoke signals that there are constructive talks,” Jim Russell, who helps oversee $112 billion as a senior equity strategist for US Bank Wealth Management. “It doesn't take much imagination to see that a framework is coming together for a temporary extension of the budget ceiling, and then negotiations to reopen the government as early as next week. We do think that things are moving forward.”

The S&P 500 jumped 2.2% Thursday, the most since Jan. 2, on a House Republican proposal for a short-term increase in the debt ceiling that would reduce the prospects for a U.S. default. The index gained 0.8% this week and is about 1.3% away from a record 1,725.52 reached on Sept. 18.

House Republicans offered a plan to raise the debt limit and end the shutdown that would require the president to accept policy conditions attached to a spending measure, said two congressional aides. Republicans sent a list of policy options to the White House, following a meeting yesterday, said the aides, who spoke on condition of anonymity.

President Barack Obama has insisted that he wouldn't accept any conditions for reopening the government, which has been partially shut for 11 days after Republicans sought changes to the 2010 health-care law.

Borrowing authority

Without an increase to the debt limit, the U.S. will exhaust its borrowing authority on Oct. 17 and would run out of funds to pay all of its bills sometime between Oct. 22 and Oct. 31, according to the Congressional Budget Office.

“The quicker we can get this sideshow out of the way, the quicker that investors can focus on the actual fundamentals,” Mr. Russell said. “It's critical because every day that we're hanging out there without the federal government being up and running, it damages the economy, it damages earnings, it damages investor confidence.”

The U.S. must take “urgent action” to resolve the political logjam, the Group of 20's central bankers and finance ministers said in a statement during their meeting in Washington Friday.

Economic impact

The partial federal government shutdown lasting through the end of this week would pare 0.2 percentage point from U.S. economic growth and cost as much as 0.5 point if it continues another two weeks, according to the median estimate in a Bloomberg survey of economists taken Oct. 4-9.

Data Friday showed consumer sentiment in the U.S. fell in October to a! nine-month low as the shutdown and the debt-ceiling debate caused outlooks to sour. The Thomson Reuters/University of Michigan preliminary consumer sentiment index slid to 75.2 this month from 77.5 in September. Economists projected a drop to 75.3, according to the median estimate in a Bloomberg survey.

Better-than-expected earnings and three rounds of monetary stimulus from the Federal Reserve have helped drive the S&P 500 up as much as 155% from a 12-year low. The benchmark gauge has rallied 19% this year as data from manufacturing to housing and the labor market improved.

“Remove everything that's going on in Washington and focus on global economic growth and earnings, it should be clear that things are picking up,” Joseph Tanious, global market strategist for J.P. Morgan Asset Management, said by phone from New York. His firm oversees about $1.5 trillion.

10 Best Clean Energy Stocks To Invest In Right Now

With few economic reports available during the shutdown, investors are watching third-quarter corporate earnings. Profits for companies in the S&P 500 probably increased 1.4% during the three months while sales rose 2%, according to analysts' estimates compiled by Bloomberg.

(Bloomberg News) Like what you've read?

U.K. Stocks Jump Amid Signs of Compromise on U.S. Debt

U.K. stocks surged the most in three months amid signs that U.S. lawmakers may agree on a compromise deal to avoid a sovereign-debt default.

Hays Plc (HAS) climbed 2.2 percent after the recruitment company said quarterly fees increased in its European markets. WH Smith Plc (SMWH) jumped the most in six months after raising its final dividend and saying it plans to repurchase an additional 50 million pounds ($80 million) of shares. Melrose Industries Plc (MRO) added 1.8 percent after KKR & Co. said it will pay about $1 billion for two of its U.S. industrial-products companies.

The FTSE 100 Index advanced 92.58 points, or 1.5 percent, to 6,430.49 at the close of trading in London, halting a three-day losing streak after falling to a three-week low yesterday. The equity benchmark has lost 2.9 percent from a high on Sept. 19 as a standoff between U.S. lawmakers led to the first partial government shutdown in 17 years. The broader FTSE All-Share Index also added 1.5 percent today, as did Ireland's ISEQ Index.

"If they do not agree, and the U.S. has automatic spending cuts, that will lead to a German-style austerity and the U.S. will go straight into recession," Alain Bokobza, head of strategy at Societe Generale SA told Francine Lacqua on Bloomberg Television. "The probability of this happening is very small."

Hot Companies To Own For 2014

The volume of shares changing hands in FTSE 100-listed companies today was 10 percent lower than the daily average in the past 30 days, according to data compiled by Bloomberg.

Debt Ceiling

House Republican leaders are presenting their members with a proposal to raise the $16.7 trillion U.S. debt limit for six weeks without policy conditions, said a congressional aide familiar with the details. The world's biggest economy will exhaust its borrowing authority by Oct. 17 without a deal, according to the Treasury Department.

The Republican proposal wouldn't end the partial government shutdown, said the aide, who asked for anonymity to discuss strategy. Obama will meet House Republican leaders at 4:35 p.m. in Washington.

The Bank of England held its key interest rate at 0.5 percent and kept its asset-purchase program unchanged today, matching predictions in two separate Bloomberg News surveys. Governor Mark Carney has said the central bank won't consider raising its benchmark rate at least until unemployment falls to 7 percent, which it forecasts may not happen until late 2016.

Hays climbed 2.2 percent to 118.1 pence. Comparable fees rose 8 percent in the U.K. and Ireland region for the three months ended Sept. 30, the company said today. Fees rose 7 percent in Germany from last year, contributing to a 2 percent increase for the group in the period.

Dividend Increase

WH Smith rallied 5.6 percent to 882 pence, its biggest increase since April 11 and the highest price since the chain-store split its units in 2006. The retailer proposed a final dividend of 21.3 pence per share, up from last year's 18.6 pence a share.

Melrose rose 1.8 percent to 295.2 pence after KKR, a New-York based private-equity firm, said it will buy Crosby Group and Acco Material Handling Solutions from the U.K. company. Melrose, based in London, bought the manufacturing companies in 2008 with the intention of improving their performance and selling them.

Whitbread Plc (WTB) added 4.1 percent to 3,114 pence, its largest advance since September 2012. Oriel Securities Ltd. raised its rating on the shares to buy from hold, citing improvement in the U.K. hotel market.

Talvivaara Mining Co. Plc slumped 20 percent to 6.86 pence, extending losses so far this year to 75 percent. The Finnish commodity producer said it is assessing all options for additional funding to offset low prices and output.

Apple's Next Growth Engine

So many factors are responsible for this company's success, in terms of growth and innovation, now and for many years to come. Ironically, the same could have been said about another, now fledgling, company not too long ago, writes Chris Umiastowki of The Globe and Mail.

When BlackBerry Ltd. pre-announced disastrous second-quarter results and 4,500 job cuts, I was en route to Ottawa with my wife to participate in the Army Run. That day—Friday, September 20—will go down as Black(Berry) Friday for the one-time smartphone giant. But it was also launch day for Apple Inc.'s (AAPL) new iPhone 5c and iPhone 5s.

I've been a die-hard BlackBerry user for almost 13 years. But after I read the bad news on my BlackBerry, while my wife navigated the roads, the two of us promptly checked into our hotel, walked over to the Rideau Centre Apple store and bought an iPhone.

Mind you, it wasn't for me. My wife, who had also carried a BlackBerry for years, had decided to switch. Consider her move one more example of how much the smartphone market is tilting in Apple's direction.

Over the next three days, the company sold over nine million of the new iPhone models, breaking last year's record of five million when the iPhone 5 was launched. This tremendous unit growth is in stark contrast to the company's stock price, which has dropped from about $650 (US) last year, to below $500 now. And it's a major reason I'm still enthusiastic about the stock.

It's absolutely true that earnings growth at Apple has disappeared over the last few quarters. But I'm not that interested in short-term results. I'm interested in where the company is taking its business over the next decade or longer. The record sales, not to mention my wife's change of heart, say that iPhone demand is at record levels despite high prices—and I think this could be just the beginning.

What happens if Apple can turn the iPhone into a replacement for the traditional PC? Author and tech guru Robert X. Cringely wrote a fantastic post last week entitled "The Secret of iOS 7," that points out how Apple's latest mobile operating system could shake up the mobile and PC industry yet again. His case is based on four observations:

Apple CEO Tim Cook announced that the iPhone 5s runs a 64-bit "workstation class" processor;

Apple's productivity software, iWork, is now free on all new iOS devices;

Apple's mobile operating system, iOS 7, now incorporates Bluetooth support for both keyboards and mice;

Most industry pundits expect an Apple TV display of some kind to hit the market soon.

Put it all together and you can begin to sense where Apple thinks the digital world is headed. We're now verging on a point, 13 years after BlackBerry invented the smartphone market, that we have enough computing power in our pockets to eliminate notebooks or desktops.

For now, there's no way I'm giving up my huge office monitor. But Mr. Cringely makes a strong case that the situation may soon change.

"Jump forward in time to a year from today," he writes. "Here's what I expect we'll see. Go to your desk at work and, using Bluetooth and AirPlay, the iPhone 5s or 6 in your pocket will automatically link to your keyboard, mouse, and display. Processing and storage will be in your pocket and, to some extent, in the cloud. Your desktop will require only a generic display, keyboard, mouse, and some sort of AirPlay device, possibly an Apple TV."

It's not rocket science to consider a smartphone operating system and applications that know when they're hooked up to a large display, and therefore, switch to a user interface that fills the screen and looks more like a desktop.

In fact, several years ago, when I was a sell-side analyst at TD Securities, covering Research In Motion, I helped a start-up company pitch this exact strategy to the BlackBerry maker.

Imagine the appeal to a business: You could connect your smartphone to a cheap monitor and the operating system smartly converts your e-mail and other enterprise mobile apps to full-sized desktop experiences. The cost of supporting remote workers drops tremendously.

As far as I know, BlackBerry failed to take action on what could have been a brilliant plan. But this strategy—if it is what Apple is planning—sets the stage for a whole new leg of growth in both the consumer and enterprise markets for Apple.

Of course, it won't be easy or painless. I agree with Mr. Cringely's assertion that Google will also be all over this PC replacement strategy, so Apple would be smart to act quickly. I expect this will lead to both companies dominating the future of computing.

Microsoft and all Windows box makers should watch out. On the other hand, Apple shareholders could do quite well over the next three to five years.

According to S&P Capital IQ, Apple stock trades at 11.5 times next year's earnings estimates. Investors are paying less for Apple than they are for the S&P 500 index (SPX), with a 14.2 times multiple on forward year earnings. So while Apple may have been one of the weakest performers in my Strategy Lab model portfolio over the last year, I'm still very much a fan of the stock.

Chris Umiastowski is the growth investor for Globe Investor's Strategy Lab.

Read more from the Globe and Mail here…

This Chart Pattern Says Star Scientific is Prepping a Monster-Sized Move (STSI)

The last time I looked at Star Scientific, Inc. (NASDAQ:STSI) was in mid-August, when I pointed out how the stock looked like it was finally beginning a breakout via a move above that nagging ceiling at $2.11. I didn't revisit it in the meantime because STSI peeled back under that key resistance level, and even back under its short-term moving lines. It wasn't a dramatic or painful pullback, but it was more than enough to put the breakout idea on the shelf until further notice.

Consider this that notice.

Though not yet back above the key horizontal ceiling at $2.11, STSI has wiggled its way back above the 20-day (blue) and 50-day (purple) moving average lines today after finding resistance at both of them for the better part of September and early October. That's a huge first step. We've also seen Star Scientific shares leave behind a shallow trail of higher lows since late September, hinting that this isn't just a little volatility.

To fully appreciate the potential upside of Star Scientific, Inc., however, you have to zoom out to a weekly chart where you can see the bigger picture.

As you can see, STSI is already in the midst of a significant recovery effort. It hit a low of $1.15 (again) in June, moved higher, and has at least been holding the line around $1.80 ever since. But, if the stock can move above the $2.11 mark now, it wouldn't just be a catalytic move - it could spark a monster-sized breakout.

See, the shape of the chart since early this year is - so far anyway - a cup and handle pattern. The bowl-shaped dip from February to the April/June low and back up to the $2.11 area in August forms the cup portion of the pattern, and the much shallower lull and rebound effort in the meantime has formed a handle for the cup. The key to the pattern becoming explosive is a move above the brim-line at $2.11. If Star Scientific, Inc. can just move above that line, it could catapult the stock, as is so often the case with this now-rarely-seen long-term chart pattern. It's definitely worth the wait, and putting on your watchlist.

If you'd like to get more trading ideas and insights like this one, sign up for the free SmallCap Network daily e-newsletter. It's full of stock picks, market calls, and more.

Tech stocks: BlackBerry jumps on new buyout talk

Shares of smartphone maker BlackBerry have surged 4.5% in early morning trading off a report of new suitors exploring a bid for the struggling company.

According to Reuters, BlackBerry is in talks with Cisco, Google and SAP on a potential deal to either sell the company or parts of its business. The report does not confirm which of the three companies will make a bid for BlackBerry.

Last month, BlackBerry announced a tentative acquisition deal with Fairfax Financial Holdings that values the smartphone maker at $4.7 billion. A few days later, the company reported a $965 million quarterly loss off disappointing sales of its line of BlackBerry 10 devices.

A statement from BlackBerry to Reuters does not confirm talks with the trio of companies, only saying a special committee "is conducting a robust and thorough review of strategic alternatives."

BlackBerry faces a lawsuit by a shareholder claiming the company misled investors about its future.

Meanwhile, Apple shares are up $3 after analysts at Jeffries upgraded the company's stock to buy, reports CNBC.

The company recently launched two new iPhones: the low-cost 5c and the 5s, which includes a fingerprint sensor. Sales of iPhones topped 9 million during the devices' opening weekend.

Follow Brett Molina on Twitter: @bam923.

The Most Dangerous States in America

You might think that going to California, Texas or New York exposes you to a lot of crime. But in fact it was Tennessee that had the nation's highest violent crime rate last year.

The FBI’s latest statewide statistics offer a snapshot of the underside of the 50 states: where violent crime is most likely to occur. According to the FBI, violent crime includes murder, rape, robbery and aggravated assault. 24/7 Wall St. reviewed the states with the highest rates of violent crime in the country.

Click here to see America’s 10 Most Dangerous States

While violent crime rose just under 1% nationally in 2012, the trend for the past 20 years has been steady decline. Crime peaked in the late 1980s, fueled by the crack cocaine epidemic. Beginning in the early 1990s, crime began to decline. Although the exact cause remains unclear, experts have pointed to factors such as better policing, demographic changes, higher incarceration rates, a drop in cocaine use and the introduction of a variety of social programs.

In an interview with 24/7 Wall St., Urban Institute senior fellow John Roman pointed out that the crime decline has not been uniform. It has improved markedly in some large cities, like New York, Dallas and Washington, D.C. However, the decline has been less impressive in cities like Baltimore and Detroit, where economic and racial segregation limit the ability of the poor to move into the middle class.

The more the population is integrated, Roman explained, the greater the chances of sizable crime declines. Most crime is committed by people at the bottom of the economic totem pole, he said.

The apparent relationship between low income, low education and higher crime rates has been well documented, although identifying the cause and effect is still a matter of debate. It is clear, though, that these states for the most part match the national trend. Of the 10 states with the highest rates of violent crime, eight have lower rates of adults with bachelor's degrees, and most of them had median income levels below the national figure in 2012.

There are notable exceptions to the national trend, however. Alaska, Delaware and Maryland all have higher educational attainment and higher income, but they still make the list. In Maryland and Delaware, this likely has to do with pockets of very high crime in the largest urban areas.

While Maryland has the ninth-highest violent crime rate in the country, it also has the third-lowest poverty rate, the highest median income and one of the highest proportions of adults with a college degree. The reason for this discrepancy is likely the concentration of high crime in Baltimore. The Baltimore metropolitan area also had the ninth highest violent crime rate in the country last year and accounted for nearly a third of all the incidents in the state that year.

On its website, the FBI instructs readers to avoid comparing state violence because rankings tend to be simplistic and ignore factors that influence crime, as well as the different ways crimes are measured and reported. For this reason, Roman cautioned against directly comparing states based on their individual crime rates. However, because the states with the highest and lowest violent crime rates have remained consistent for many years, he believes comparing state ranks was useful. “This exercise is worth doing. I don’t know how you make policy without doing this kind of thing.”

24/7 Wall St. identified the 10 states with the highest rates of violent crime per 100,000 residents. Using estimated populations and crime incidents from the FBI's Uniform Crime Report, which measures incidents of eight types of violent and nonviolent crime for 2012, 24/7 Wall St. calculated the incidence of the four types of violent crime per 100,000 persons for that year: murder, forcible rape, robbery and aggravated assault. In addition to crime data, 24/7 Wall St. reviewed income, poverty and education statistics from the U.S. Census Bureau's American Community Survey for 2012, the most recent available year.

These are the most dangerous states in America.

J.C. Penney Gains 2% Despite Downgrade

Yesterday, J.C. Penney (JCP) briefly traded at levels unseen since 1982, when Ronald Reagan was President, Russia was still the Soviet Union and John Elway was still a year away from becoming quarterback of the Denver Broncos.

Bloomberg

Today, however, the stock has bounced back, despite one analyst’s downgrade and a pessimistic report from another.

Argus analyst Christopher Graja offers investors three reasons for his decision to cut J.C. Penney to Neutral from Buy. He writes:

Best Oil Stocks To Invest In Right Now

First, the recently-announced share offering for up to 96.6 million shares may raise the share count by as much as 44%.

Second, the turnaround is progressing more slowly than we previously anticipated. We had been particularly optimistic about the potential for the new home department, which included designer shops from Conran, Jonathan Adler, Bodum, Michael Graves and Martha Stewart. On our recent store visits, however, we found JCP Everyday merchandise discounted 40%-50% and some of the new Jonathan Adler and Conran furniture marked down as much as 75%. On the second-quarter conference call, CEO Mike Ullman said that the new home department merchandising strategy was not resonating well with core customers and performance has been weaker than he had hoped. While we remain optimistic about the longer-term prospects for the home department and the Joe Fresh brand for women, which was another major product launch this year, we aren't seeing the levels of traffic or merchandise sell-through that suggest these initiatives are resounding with customers in the way we had initially hoped.

Third, we are expecting more SG&A [Selling, General and Administrative Expenses] than we previously modeled. Through the second quarter we had seen instances in our store visits where the company may have lost business because prices weren't clearly marked on new or promotional merchandise or because it was difficult to find an associate to look for merchandise sizes or colors that weren't on the floor. We think it is likely to take more SG&A to resolve these issues

Oppenheimer’s Brian Nagel and team urge investors to “stay on the sideline.” They write: