Ulta Salon and Sally Beauty: 2 Stocks That Can Add Shine to Your Portfolio

Some companies in the beauty and personal care segment have one important characteristic -- a recession-proof nature, which is a result of everyone's desire to look beautiful and young. This brings us to Ulta Salon, Cosmetics & Fragrance (NASDAQ: ULTA  ) and Sally Beauty Holdings (NYSE: SBH  ) . Both have performed quite well over the last few years, as shown in the chart below, even during the recession (the gray area being the recession period). Their performance stands in stark contrast to that of Regis (NYSE: RGS  ) , which has seen its top line drop continuously after peaking in 2008.

ULTA Revenue (TTM) data by YCharts

Ulta Salon and Sally Beauty have demonstrated "recession-proof" capabilities, with Ulta Salon being the star performer with more than 224% growth in revenue compared with around 47% for Sally Beauty, shown in the chart above. Regis has been the laggard among its peers.

The U.S. prestige beauty market grew 6% during from September 2012 to August 2013 according to the NPD Group . The prestige segment continues to outperform all other segments in the beauty industry as a result of strong innovation and solid demand, particularly in skin care.

Ulta's beautiful performance
Ulta Salon has been cashing in on the segment's growth through expansions of its prestige brand boutiques for major flagship lines such as Clinique and Lancome, which have gone down well with customers. These boutiques helped drive revenue higher in Ulta's second quarter. Ulta also reported an 8.4% increase in same-store sales, which includes e-commerce sales that were up 72% versus the same period a year ago.

Ulta Salon generated second quarter revenue of $601 million, up 24.8% as compared to the same quarter a year ago, comfortably beating consensus estimates of $588.4 million. This was also more than its own guidance of $579 million to $589 million. Net income rose 28.3% to $44.9 million. Diluted earnings per share rose 29.6% versus the year-ago quarter to $0.70 per share . Ulta Salon also issued an upbeat forecast for the remainder of the year.

Ulta Salon will be launching several new brands that have strong followings and unique brand personalities. This includes IT Cosmetics, Jamie Kern Lima's award-winning line of color cosmetics infused with anti-aging technology, and Meaningful Beauty's skincare system, Cindy Crawford's brand developed in partnership with Dr. Sebagh, a renowned anti-aging expert.

Ulta Salon has also been working on expanding its customer base. In the second quarter, its loyalty program grew to 12 million active members, up 19% from a year earlier . This is good for the long run as Ulta will have more customers coming in to its stores at regular intervals.

Ulta Salon's value offerings, marketing initiatives, introduction of new products, and increasing focus on Ulta.com and brands will continue to play a key role in augmenting its overall business going forward. The company opened 33 stores in the second quarter, thus bringing its total store count to 609, and expects to have 675 stores by the year end. The company's long-term guidance is to grow its square footage by 15% to 20% a year .

Sally Beauty's efficiency
While Ulta might be the star performer when it comes to growth, Sally Beauty outshines its peers when it comes to operating efficiency. Sally Beauty leads the pack with a 14.18% operating margin for the trailing twelve months, which surpasses Ulta's 12.48%, as shown in the chart below. In addition, Sally Beauty, like Ulta, has been delivering solid top-line growth consistently.

ULTA Operating Margin (TTM) data by YCharts

Sally increased its gross margin by about 530 basis points from 44.2% in 2003 to 49.5% in 2012, which is a strong indicator of its pricing power. However, Sally has a problem with lower, non-Beauty Club Card (customers not covered by its loyalty program) traffic in its U.S. stores. This resulted in a minuscule 0.7% increase in comps, as a result of which its revenue grew by a mere 2.8% year over year .

Going forward, Sally sees the potential to double the number of its non-U.S. stores to approximately 1,500. In particular, Sally considers Europe and Canada to be key growth markets. In addition, with just about 7.2 million Sally Beauty Club Card members, there's potential for improvement here if we look at Ulta's total of 12 million members and the fact that Sally was able to double its number of members in a span of four years.

Regis in trouble
The 0.7% comps growth at Sally looks better when one considers the dire straits that Regis is in. Since its top line peaked in fiscal 2008 at $2.7 billion, Regis' revenues have fallen by more than 35% to less $2 billion as shown in the first chart. Regis also incurred losses in fiscal 2011 and 2012.

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Regis is trying to turn around through certain initiatives. For example, it introduced the SuperSalon point-of-sale system to gain insight into customer retention and staff productivity. Secondly, Regis is working on a visual merchandising strategy in its stores to improve the look of its salons and for that it created standardized Plan‐O‐Grams. Lastly, it adopted certain cost cutting measures like management restructuring and cutting down on unnecessary travel.

Takeaway
However, with a P/E ratio of close to 30 Regis is quite expensive, especially considering that the better-performing Sally Beauty has a P/E ratio of around 18. However, the best pick in this space looks to be Ulta Salon. Some might say that the company is expensive at 44 times earnings, but strong earnings growth is expected in the future. As a result, the forward P/E of Ulta comes down to 31, with analysts expecting earnings to grow at an annual rate of 23.5% for the next five years. That means Ulta Salon is the premium pick in this segment.

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3 Stocks Spiking on Unusual Volume

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

>>5 Stocks With Big Insider Buying

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

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

>>5 Hated Earnings Stocks You Should Love

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

AerCap

AerCap (AER) engages in leasing, financing, selling and managing commercial aircraft and engines in the U.S., Russia and Germany. This stock closed up 3.1% to $38.27 in Wednesday's trading session.

Wednesday's Volume: 2.48 million

Three-Month Average Volume: 1.15 million

Volume % Change: 82%

From a technical perspective, AER spiked notably higher here right above some near-term support at $34.38 with above-average volume. This spike is quickly pushing shares of AER within range of triggering a major breakout trade. That trade will hit if AER manages to take out Wednesday's high of $38.55 to its 52-week high at $39.10 with high volume.

Traders should now look for long-biased trades in AER as long as it's trending above some near-term support levels at $36 or at $34.38 and then once it sustains a move or close above those breakout levels with volume that hits near or above 1.15 million shares. If that breakout triggers soon, then AER will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $45 to $47.

YRC Worldwide

YRC Worldwide (YRCW), through its subsidiaries, provides various transportation services primarily in North America. This stock closed up 9.9% at $21.89 in Wednesday's trading session.

Wednesday's Volume: 2.49 million

Three-Month Average Volume: 1.66 million

Volume % Change: 115%

From a technical perspective, YRCW spiked sharply higher here and broke out above some near-term overhead resistance at $20.77 and above some past resistance at $21.87 with above-average volume. Market players should now look for a continuation move higher in the short-term if YRCW can manage to clear Wednesday's high of $22.25 with strong volume.

Traders should now look for long-biased trades in YRCW as long as it's trending above Wednesday's low of $19.52 or above $18.50 and then once it sustains a move or close above $22.25 with volume that hits near or above 1.66 million shares. If we get that move soon, then YRCW will set up to re-test or possibly take out its next major overhead resistance levels at $25 to $27.

Papa John's

Papa John's (PZZA) operates and franchises pizza delivery and carryout restaurants under the Papa John's trademark worldwide. This stock closed up 2.2% at $47.92 in Wednesday's trading session.

Wednesday's Volume: 364,000

Three-Month Average Volume: 296,015

Volume % Change: 50%

From a technical perspective, PZZA spiked notably higher here right above some near-term support at $46.01 with above-average volume. This move is starting to push shares of PZZA within range of triggering a near-term breakout trade. That trade will hit if PZZA manages to take out Wednesday's high of $48.02 to its 52-week high of $49.33 with high volume.

Traders should now look for long-biased trades in PZZA as long as it's trending above some near-term support at $46.01 or above its 50-day at $44.59 and then once it sustains a move or close above those breakout levels with volume that's near or above 296,015 shares. If that breakout triggers soon, then PZZA will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $55 to $57.

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:

>>5 Industrial Stocks to Skirt the Selling

>>3 Tech Stocks Under $10 to Watch

>>5 Stocks Set to Soar on Bullish Earnings

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.

1 Dividend Stock Winning on Cheap Natural Gas

Dominion Resources (NYSE: D  ) did the unthinkable this week, requesting a rate decrease from local regulators. But the utility knows what it's doing, and this latest move makes a lot of sense for its long-term strategy. Here are three reasons why.

1. Higher rates don't always equal higher profits
Dominion's Virginia Power subsidiary is a regulated unit. Its profits are strictly monitored, and the utility isn't allowed to make a single cent off charging more for fuel than its actual cost. Dominion's latest request to lower fuel rates by about 3.3% isn't cutting into the utility's profits -- it's just ensuring there's no financial finger-pointing when regulators comb over Dominion's books for any hidden earnings.

The new rate would cut an average customer's monthly bill by $3.70, resulting in $140 million in savings, a sizable chunk of the average $2 billion the company usually spends on fuel every year. Rather than backtrack off high bills later in the year, Dominion pre-emptively filed the request seven months early.

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But for customers, rates are rates, and not all utilities are in a position to pass on savings. While Dominion has been able to capitalize on cheaper and cheaper natural gas from the Marcellus region, Floridians are feeling the squeeze.

Starting in 2014, Duke Energy's (NYSE: DUK  ) Florida subsidiary wants its customers to pay around 7% more for their electricity. For the average user, that equates to more than $8 a month added on to their current bill and includes a charge of $0.89 per month to help the company recover from the retirement of its Crystal River nuclear plant.

Around the same time, TECO Energy's (NYSE: TE  ) Tampa Electric utility requested an even larger average $11.68 bill boost, but only around $1.28 of that accounts for fuel costs. TECO has been behind the times on its return on equity (the single-most important investment indicator for regulated utilities), and previously expected its ROE to clock in at less than 9% for 2013. But TECO's request was approved in September, and the company can now enjoy 10.25% ROE off its 5.5% increase in regulated revenue.

2. More customers always mean more profit
While Duke has had to add on customer costs it can't profit from, Dominion's rate decrease should translate directly to happier customers at no sacrifice to shareholders. All things equal, happy customers use more product and attract other customers. If Dominion's rate decrease is enough to increase average use or add on more customers, its absolute ROE will expand regardless of fuel expenses.

3. Making nice with regulators is smart
Like it or not, electricity rates are political and economic tools. Regulators can reject rate increases if they think it'll slow the economy, if they believe a utility is asking for more than it deserves, or if it would somehow reflect badly on their regulatory body. For this reason, the smartest utilities pick their battles, requesting reasonable rates when the time is right -- and holding off when it's not. Dominion's request today could give it good grace down the road, when the company needs to add on costs for other reasons.

Regulation elation
The world of regulated utilities is increasingly complex and volatile. The energy sector is in a major shakedown phase, and even stalwarts like utilities aren't as stable as they once were. Dominion's latest move puts it in a better place to react to the unknown future of its sector, and other companies would do well to follow suit. If they can.

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Fund Of Funds - High Society For The Little Guy

Buying a mutual fund is a bit like hiring someone to fix the brakes on your car. Sure, you could do the research, buy the tools and fix the car yourself (and many people do), but often it's not only easier but also safer to let an expert handle the problem. Mechanics and mutual funds may cost you a little more in fees, but there is nothing inherently wrong with paying extra for peace of mind. Mutual funds usually allow investors to skip the murky, confusing world of stock picking, but what if stocks aren't the asset class you're interested in? With their million-dollar buy-ins and dangerous reputations, hedge funds were once the exclusive investment vehicles of the rich and powerful, but now regular investors have a way to get in on the action through a fund of funds.

A fund of funds (FOF) is an investment product made up of various hedge funds - basically, a mutual fund for hedge funds. They are often used by investors who have smaller investable assets, limited ability to diversify within the hedge fund arena, or who are not that experienced with this asset class. In this article we will explore the advantages, disadvantages and risks of an FOF.

Fund of Funds Vs. Hedge Funds
Individual hedge funds often focus on a particular strategy or market segment, tying their returns to those areas. FOFs, on the other hand, pool investor money and buy individual hedge funds for their portfolio, thereby holding a number of funds with different strategies. FOFs provide instant diversification for an investor's hedge fund allocation and the opportunity to reduce the risk of investing with a single fund manager.

Most hedge funds are sold through private placements, which means they have restrictions imposed on them under Regulation D of the Securities Act. An important restriction is the limit on investors who are permitted to invest in the fund. Most hedge fund investors must meet accredited investor requirements, meaning that individuals must have a net worth of $1 million excluding one's primary residence or total income exceeding $200,000.

The convergence between the hedge fund and mutual fund industries is being pushed by demand from investors to beat the market. Hedge funds traditionally catered to the rich, but with that niche now served by thousands of funds, new investors are being sought and hedge funds are going down-market, reducing their investment minimums and seeking creative ways to allow those who are less well off to access these investment products. One way to get around the traditional limits on unaccredited investors is to register a hedge fund with the Securities and Exchange Commission (SEC). Registered FOFs can have lower minimum investments than private hedge funds and can be offered to an unlimited number of investors. However, unlike registered mutual funds, there is no secondary market available, so you won't be able to sell your investment readily.

Fees and Expenses
Hedge funds typically charge asset-based fixed fees that range between 1-2%, but these fees can go all the way up to 3% or even 4% annually. Incentive or performance fees may also be part of the compensation package and can sometimes be between 10-40% of any capital gains. Performance fees are often structured so that they have a "high-water mark," which ensures that the manager does not receive this compensation until previous losses by the fund are made up.

An investor who purchases an FOF must pay two levels of fees. In addition to management fees and a performance fee, which are charged at the individual hedge fund level, additional fees are charged at the FOF level as well. Just like an individual fund, an FOF may charge a management fee of 1% or more along with a performance fee, although the performance fees are typically lower to reflect the fact that most of the management is delegated to the sub-funds themselves.

FOF Advantages
Hedge funds make up their own asset class, which can be opaque at times. Thousands of hedge fund managers are making it difficult to weed out the good from the mediocre. An FOF serves as an investor's proxy, performing professional due diligence, manager selection and oversight over the hedge funds in its portfolio. The professional management provided by an FOF can give investors the ability to dip their toes into hedge fund investing before they tackle the challenge of individual fund investing.

Most FOFs have a formal due-diligence process and will conduct background checks before selecting new managers. In addition to searching for a disciplinary history within the securities industry, this work can include researching the backgrounds, verifying the credentials and checking the references provided by a hedge fund manager who wishes to be chosen for the FOF.

Hedge funds typically have high minimum investment levels, which restricts the ability of many investors to diversify their portfolios within the allocated amount for hedge funds. With an FOF, investors with limited capital can access a number of fund returns with one investment, achieving instant diversification. The fund selection process can provide greater stability (i.e., lower volatility) of returns by spreading assets over a broader range of strategies. Rather than assuming the risk of selecting one individual manager, the FOF provides a portfolio of managers with a single investment.

FOF Disadvantages
Overall, fees for FOFs are typically higher than those of traditional hedge funds because they include both the management fees charged by the FOF and those of the underlying funds. This doubling up of fees can be a significant drag on the overall return an investor receives.

Hedge funds are similar to mutual funds in that they pool investor money and invest the assets of the fund in a variety of investments. But unlike mutual funds, hedge funds are not required to register with the SEC and are typically sold in private offerings. This means that positions within hedge funds don't have to be publicly reported the way mutual fund holdings must be. However, hedge funds are still subject to the basic fiduciary responsibilities as registered investment advisors.

The SEC and other securities regulators generally have a limited ability to perform routine checks on hedge fund activities. This reduces the likelihood that these agencies will ferret out any wrongdoing early on. And since an FOF buys many hedge funds (which themselves invest in a number of securities), the FOF may end up owning the same stock or other security through several different funds, thus reducing the potential diversification.

Risks
Hedge fund investing is more complicated and involves higher risk than many traditional investments.

Gates and Locks-Ups
Some hedge funds have lock-up periods during which investors must commit their money; these can last several years. Hedge funds typically limit opportunities to redeem, or cash in, shares, such as only quarterly or annually. This reduces an investor's ability to take cash out of a fund in times of market turbulence. Gates, or limits on the percentage of capital that can be withdrawn on a redemption date, also restrict the ability of hedge fund investors to exit a fund. This feature is increasingly common. Hedge fund managers need gates to reduce variability in portfolio assets, and anything that protects against a mass exodus of capital helps this goal. Gates are most likely to be used when markets sour, which is exactly when an investor may want to redeem shares.

Manager Risks
An FOF depends on the expertise and ability of the fund's manager to select hedge funds that will perform well. If the FOF does not achieve this goal, its returns are likely to suffer.

Performance fees can motivate hedge fund managers to take greater risks in the hope of generating a larger return for themselves and their investors. If a manager gets a large cut of the capital gains of a fund, he may take undue risks to profit from the potential returns. If a hedge fund manager is an active trader, the frequent transactions can result in higher tax consequences than a buy-and-hold strategy. Higher taxes will reduce the overall return an investor receives on his or her investment, all else being equal.

Most hedge funds use leverage and short selling to some extent to generate returns or hedge against falling markets. Both of these strategies increase the investor's risks. Short positions can lose an unlimited amount of money, while leverage can magnify losses and make quick movements in and out of the markets much more difficult.

The Bottom Line
FOFs can be a pain-free entrance into the harsh hedge fund world for investors with limited funds, or for those who have limited experience with hedge funds, but this doesn't mean every FOF will be the perfect fit. An investor should read the fund's marketing and related materials prior to investing so that the level of risk involved in the fund's investment strategies is understood. The risks taken should be commensurate with your personal investing goals, time horizons and risk tolerance. As is true with any investment, the higher the potential returns, the higher the risks.

Custom ActivityBar Study - September 16, 2013

While the S&P 500 is trading near all-time highs, it is interesting to take a step back and see how recent activity relates to past trading activity. The chart reveals a custom ActivityBar study that shows the cumulative price distribution of the E-mini S&P 500 Continuous Contract (@ES) roughly since 1998, using a volume filter of 50,000. The distribution follows a general bell-shaped curve as may be expected, but notice that there are a number of unfilled areas. In fact, trading above 1,450.00 has been quite choppy with a number of unfilled areas. Three different levels are marked on the chart below (i.e., DT1-3), reflecting potential downside targets where support might be found. These three levels, which may go unnoticed on a regular price chart, come in at 1,633.50, 1,584.50, and 1,512.50. The index remains in an uptrend for now, but if the index experiences a pullback, the discussed levels could come in handy as potential targets.

You can read more of this blog here.

Written by Frederic Palmliden, CMT, Senior Quantitative Analyst, TradeStation.

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Trouble pressing play hits new Beats Music service

Overwhelming traffic on the fledgling Beats Music service has left many new users on the outside looking in.

Excessive demand and use of the service, which became operational Tuesday, led to connectivity issues and new users being unable to register for the service. That led the company to put into operation "a gate" that will slowly allow new users to sign up and claim their Beats Music name.

"We were able to still register people so we don't turn them away at the door," said Beats Music CEO Ian Rogers. "We just don't put them into the main service so they don't have a bad experience. And then we can email them after and say 'All right, come on in'."

Rogers hoped that prospective users would be patient, as early hurdles often accompany new online ventures, he said in an interview with USA TODAY. The company's technical team is working on the problems and access to new users will begin as soon as possible, he said. And any users who register this week will have their free 7-day trial period extended to 14 days.

"Thankfully, we had a great response," he said. "With all those people coming in, we had a couple of issues that we just couldn't have seen in the beta period."

Rogers would not say how many had signed up for the service so far. But the music service has been highly anticipated and netted the top spot among music apps in Apple's App store, as well as No. 2 free overall app (an Android app is also available; with a Windows version due Friday).

Celebrity involvement has helped drive interest. In recent weeks, postings began cropping up on social media from musicians such as Pitbull, Eminem and Pearl Jam suggesting that people "Claim Your Name" on Beats Music. Many of them were using the system as part of the beta testing.

"The week before we launched you saw tweets from everybody from LeBron James to Will.i.am who had been playing with the app early," Rogers says. "But you are still relatively limited (with a beta test) and it's not the type of volume you ge! t when you open the door ... It's not unique what we are experiencing here. It's a result of the fact that we have something that is highly anticipated and it's a big jump from a small beta and going live, and going live in a big way."

Portrait of Beats Music's Ian Rogers, Trent Reznor and Jimmy Lovine at the company's Santa Monica offices.(Photo: Robert Hanashiro, USA Today)

A music service was the logical next step for Beats Electronics co-founder Jimmy Iovine has said. "Our service will be of service," Iovine told USA TODAY. The Interscope Geffen A&M Records chairman and Dr. Dre founded Beats Electronics in 2008.

Two years ago, Beats acquired the MOG music service. MOG was well-thought-of for its high-quality sound, mobile service and social nature. (MOG subscribers will be transferred to Beats Music in the next 90 days, and MOG will be phased out in the coming months.)

Beats Music address the situation Wednesday afternoon on its blog and on Twitter, where roughly as many comments had praised the service as complained about the inability to connect. "We've been humbled by the outpouring of excitement for Beats Music. We know there's a delay in bringing new users onto the service…The team is working around the clock to resolve this as quickly as possible, while maintaining service for those already using the service… Thank you for your patience. We'll be in touch as soon as we have an update," the service said in a series of three tweets.

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Strong insider activity has been registered at Yum! Brands (YUM) lately. Several people related to the company have purchased its stock following the third quarter earnings call, which took place last week. The acquisitions also coincided with the announcement of a quarterly dividend, scheduled for Friday, Nov. 1 (applicable to investors of record on Friday, Oct. 11). The company will yield about 2% of the current stock price, rewarding those who bet on the company.

However, Oct. 11 is already past and thus, new stockholders will not receive the upcoming dividend. So, is Yum still a worthy investment for the long term? Are these insider purchases worth following? Or are there better choices in the restaurant industry?

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Yum is the world麓s largest restaurant company and, as such, has attracted many investors over the years. However, the business麓 last quarterly results have failed to meet its expectations. Yum missed revenues and earnings consensus estimates last quarter, mainly due to weak results in China and a tax increase. Nevertheless, these problems should only impact on short-term results, as they can be mostly attributed to macro-related issues. So, one question remains: What about the long-term?

Top 10 High Tech Companies To Own For 2014: GATX Corp (GMT)

GATX Corporation (GATX) leases, operates, manages and remarkets assets primarily in the rail and marine markets. GATX has three segments: Rail, American Steamship Company (ASC) and Portfolio Management. Rail and its affiliates lease tank cars, freight cars and locomotives in North America and Europe. ASC operates a fleet of United States flagged vessels on the Great Lakes. Portfolio Management has investments in affiliated companies. As of December, 31, 2011, the Company held 37.5% interest in AAE Cargo AG (AAE), a 12.5% interest in Adler Funding LLC (Adler) and a 50% interest in Southern Capital Corporation (ACC). In January 2012, ASC entered into a five-year lease for a newly constructed articulated tug-barge. The tug is diesel powered and the barge is 740 feet in length with a carrying capacity of 34,000 gross tons. During the year ended December 31, 2011, the Clipper Fourth Limited and Clipper Fourth APS marine joint ventures, in each of which GATX held a 45% interest, were dissolved.

Rail

Rail is exploring leasing opportunities in Asia through both wholly owned subsidiaries, as well as joint venture arrangements. As of December 31, 2011, Rail�� worldwide fleet, consisted of wholly owned and leased-in railcars, totaled approximately 130,000 railcars. Rail offers customers financial, operational, management and maintenance expertise. In addition, Rail actively manages fleets for an affiliate and other third-party owners of approximately 8,000 railcars, in aggregate.

Rail�� customers primarily operate in the chemical, petroleum, food/agriculture and transportation industries. Rail�� fleet consists of a diverse selection of railcar types that are used by its customers to ship approximately 700 different commodities. Rail also had an ownership interest in approximately 32,000 railcars through investments in affiliated companies. Affiliate fleets consist primarily of freight and intermodal railcars. Additionally, Rail manages approximately 2,000 railcars f! or third-party owners. Rail primarily provides railcars pursuant to full-service leases under which it maintains the railcars, pays ad valorem taxes and insurance and provides other ancillary services. Rail also offers net leases for railcars under which the lessee is responsible for maintenance, insurance and taxes.

In North America, Rail leases railcars for terms that generally range from three to 10 years. Rail�� North American operations also include a locomotive leasing business. As of December 31, 2011, Rail�� locomotive fleet totaled 572 locomotives. The majority of Rail�� leases are full-service contracts under which Rail maintains the railcars. Rail operates an extensive network of service facilities across North America that perform repair, maintenance, modification and regulatory compliance work on the fleet. Maintenance services include interior cleaning of railcars, general repairs to the car body and safety appliances, regulatory compliance work, wheelset replacements, exterior blast and painting, and car stenciling.

Rail leases standard gauge railcars to customers throughout Europe. Lease terms generally range from one to seven years and at December 31, 2011, the average remaining lease term of the fleet was approximately two years. Rail acquires new railcars primarily from the IRS Group and VRZ Karlovo. The owned service centers are supplemented by a number of third-party repair facilities.

ASC

ASC operates a fleet of United States flagged vessels on the Great Lakes, providing waterborne transportation of dry bulk commodities primarily for customers in the steel, electric utility and construction industries. The primary commodities carried by ASC�� vessels are iron ore, coal, limestone aggregates and metallurgical limestone. End markets for these commodities include domestic automobile manufacturing, electricity generation and non-residential construction. At December 31, 2011, ASC�� fleet consisted of 17 vessels. Fourteen ! of the ve! ssels are diesel powered. The diesel vessels range in size from 635 to 1,004 feet in length with maximum load capacities between 23,800 and 80,900 gross tons. The three remaining vessels are steam powered. The steamer vessels range in size from 690 to 767 feet in length with maximum load capacities between 22,300 and 26,300 gross tons. In 2011, ASC carried 28.4 million net tons of cargo including both contracted volume and spot business.

Portfolio Management

Portfolio Management leverages its equipment knowledge by managing portfolios of assets for third parties. Portfolio Management generates fee and residual sharing income through portfolio administration and remarketing of these assets. Affiliate activities include aircraft spare engine leasing, shipping operations and gas compression equipment leasing. Rolls-Royce and Partners Finance (RRPF) is a collection of 50%-owned domestic and international joint ventures with Rolls-Royce plc, a manufacturer of commercial aircraft jet engines. RRPF leases spare engines to Rolls-Royce plc and commercial airlines. The RRPF portfolio in aggregate is comprised of approximately 370 Rolls-Royce and International Aero Engine aircraft engines. Cardinal Marine Investments LLC (Cardinal Marine) is a 50%-owned marine joint venture with IMC Holdings, a subsidiary of the IMC Pan Asia Alliance Group (IMC).

Cardinal Marine owns six chemical parcel tankers (each with 45,000 dead weight tons that operate under a pooling arrangement with IMC�� other chemical tankers in support of the movement of liquid bulk chemicals in the Middle East Gulf/Far East and United States Gulf/Far East trades. Somargas II Private Limited (Somargas) and Singco Gas Pte, Limited (Singco), respectively, are 35% and 50%-owned joint ventures with IM Skaugen ASA (Skaugen). Clipper Third Limited (Clipper Third) is a 50%-owned joint venture with Clipper Group Invest Ltd. (the Clipper Group). Clipper Third owns two handysize vessels that support the worldwide movement! of dry b! ulk products, such as grain, cement, coal and steel. Enerven Compression, LLC (Enerven) is a 45.6%-owned joint venture with ING Investment Management and Enerven management. Enerven provides natural gas compression equipment leasing through its subsidiary, Enerven Compression Services (ECS) and third-party maintenance and repair services through its subsidiary, Worldwide Energy Solutions Company (WESCO).

The Company competes with Union Tank Car Company, General Electric Railcar Services Corporation, American Railcar Leasing, CIT Group Inc., Trinity Leasing, First Union Rail, Helm Financial Corporation, National Railway Equipment Corporation, Relco Locomotives, Inc., VTG Aktiengesellschaft, Ermewa, CTL Logistics Group, PCC Rail Group, Interlake Steamship Company, VanEnkevort Tug and Barge, Grand River Navigation, Great Lakes Fleet, Inc. and Central Marine Logistics.

Top 10 High Tech Companies To Own For 2014: Man Group(EMG.L)

Man Group plc provides alternative investment products and solutions to institutional and private investors worldwide. The company offers a range of products from diversified fund of hedge fund portfolios to single manager hedge funds, and other alternative investments in various formats, including open-ended funds and capital guaranteed products. It distributes its products and solutions to private investors through a network of intermediaries, and directly to institutions. The company was formerly known as E D & F Man Group plc and changed its name to Man Group plc in September 2000. Man Group plc was founded in 1783 and is headquartered in London, the United Kingdom.

10 Best Dividend Stocks To Watch Right Now: (LVMUY)

LVMH Mo� Hennessy - Louis Vuitton SA engages in the manufacture and sale of luxury products. Its wine and spirits product line comprises champagne, sparkling and still wines, cognac, and other spirits primarily under the Mo� & Chandon, Dom P�ignon, Mercier, Ruinart, Veuve Clicquot, Krug, Ch�eau d?Yquem, Ch�eau Cheval Blanc, Hennessy, Glenmorangie, Ardbeg, and Belvedere brand names. The company offers fashion and leather goods consisting of trunks, leather goods, ready-to-wear, shoes, watches, jewelry, accessories, sunglasses, and books principally under the Louis Vuitton, Fendi, Donna Karan, Marc Jacobs, Loewe, C�ine, Kenzo, Givenchy, Thomas Pink, Pucci, and Berluti brand names. Its perfumes and cosmetics product line includes fragrances, make-up, and skincare products under the Parfums Christian Dior, Guerlain, Parfums Givenchy, Kenzo Parfums, Fendi Parfums, Make Up For Ever, Parfums Loewe, Fresh, and Acqua di Parma brand names. The company also offers watche s and jewelry under the TAG Heuer, Hublot, Bulgari, Zenith, Montres Dior, De Beers, and Fred brand names. In addition, it operates retail stores under the brand names of DFS, Miami Cruiseline, Sephora, Samaritaine, and Le Bon March�for travelers. As of December 31, 2011, the company operated 3,040 stores worldwide. LVMH Mo� Hennessy - Louis Vuitton SA is based in Paris, France.

Top 10 High Tech Companies To Own For 2014: Nippon Telegraph and Telephone Corporation(NTT)

Nippon Telegraph and Telephone Corporation, together with its subsidiaries, provides telecommunications services to residential and corporate customers in Japan. It offers fixed and mobile voice related services, IP/packet communications services, system integration and network system services, and other telecommunications related services; sells telecommunications equipment; and operates telephone networks. The company provides intra-prefectural and inter-prefectural communications, international communications, mobile telephone services, and related ancillary services; and data communications services, such as strategic planning, systems planning and systems design, and information communications systems and computer networks installation. It also engages in building maintenance, real estate property rental, systems development, leasing, and research and development activities. As of March 31, 2011, the company provided telephone and ISDN services to 34,884 thousand subs cribers; broadband services to 15,059 thousand FLET?S Hikari subscribers and 2,858 thousand FLET?S ADSL subscribers; and mobile phone services to 58,010 thousand subscribers. It also offered Plala Internet connection service to 3,101 thousand subscribers and Open Computer Network service to 8,234 thousand subscribers. Nippon Telegraph and Telephone Corporation was founded in 1952 and is based in Tokyo, Japan.

Advisors' Opinion:

• [By WWW.MARKETWATCH.COM]

  LOS ANGELES (MarketWatch) -- Japanese stocks opened lower Thursday, as gains for the yen and losses for Wall Street conspired to drive the Nikkei Stock Average (JP:NIK) down 1.2% to 15,333.35, extending Wednesday's 0.6% loss. The Topix fell 0.7%, with the U.S. dollar (USDJPY) slipping to 102.46 yen, down from around 楼102.80 at the start of the previous session, but off its lows in late Wednesday trade. Electronics firms and other techs helped lead the loss, with Sony Corp. (JP:6758) (SNE) falling 1.4%, Nikon Corp. (JP:7731) (NINOF) off 2.4%, and Alps Electric Co. (JP:6770) 1.8% lower. The Nikkei Asian Review reported Thursday that Japan looked set to post its first trade deficit for electronics goods this year. Shares of Yahoo Japan Corp. (JP:4689) (YAHOF) lost 1.4%, even as Bloomberg reported the firm was offering its stake in market-research firm Macromill Inc. (JP:3730) to U.S. private-equity firm Bain Capital at a premium to its most recent close. Shares of Macromill were untraded. Among gainers, Nippon Telegraph & Telephone Corp. (JP:9432) (NTT) rose 2.1%, following a 1.1% gain for its U.S.-listed shares.

• [By Jonas Elmerraji]

  The strength in Japanese stocks is evident in Nippon Telegraph & Telephone (NTT), the $60 billion telco in the Land of the Rising Sun. Shares of NTT are up close to 22% since the first trading session in January -- and now, a technical setup points to even higher ground in the month ahead.

  That's because NTT is currently forming an ascending triangle pattern, a bullish price setup that's formed by horizontal resistance above shares at $27 and uptrending support to the downside. Basically, as NTT bounces in between those two technical levels, it's getting squeezed closer and closer to a breakout above resistance. When that move above $27 happens, traders have their buy signal.

  At first glance, the abundance of gaps on NTT's chart may be alarming. But those gaps, called suspension gaps, are just the rest of off hours trading on the Tokyo and London exchanges. From a technical standpoint they're irrelevant, but they're common in foreign traded names that are dual-listed overseas.

• [By Brian Pacampara]

  Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, Japanese telecom giant Nippon Telegraph and Telephone (NYSE: NTT  ) earned a respected four-star ranking. �

Top 10 High Tech Companies To Own For 2014: Electronic Arts Inc (EA)

Electronic Arts Inc., incorporated in 1982, develops, markets, publishes and distributes game software content and services that can be played by consumers on a variety of video game machines and electronic devices (platforms). Its offers products, such as video game consoles, such as the Sony PLAYSTATION 3, Microsoft Xbox 360 and Nintendo Wii; personal computers, including the Apple Macintosh (the Company refers to personal computers and the Macintosh together as PCs); mobile devices, such as the Apple iPhone and Google Android compatible phones; tablets and electronic readers, such as the Apple iPad and the Amazon Kindle, and Internet, including social networking sites, such as Facebook. In August 2011, it acquired PopCap Games Inc. (PopCap), a developer of casual games for mobile devices, tablets, PCs, and social networking sites.

The Company has created, licensed and acquired a portfolio of brands, which span a diverse range of categories, including action-adventure, casual, family, fantasy, first-person shooter, horror, science fiction, role-playing, racing, simulation, social, sports, and strategy. The Company�� portfolio of brands includes wholly owned brands, such as Battlefield, Mass Effect, Need for Speed, The Sims, Bejeweled, and Plants v. Zombies. Its portfolio also includes sports-based brands, such as Madden NFL and FIFA, and titles-based on other brands, such as Star Wars: The Old Republic. It provides a variety of online-delivered products and services, including through its Origin platform. Its packaged goods products are also available through direct online download through the Internet. The Company also offers online-delivered content and services that are add-ons or related to its packaged goods products, such as additional game content or enhancements of multiplayer services. It provides other games, content and services that are available only via electronic delivery, such as Internet-only games and game services, and games for mobile devices.

The Comp! any operates development studios (which develop products and perform other related functions) in North America, Europe, Asia and Australia. It also engages third parties to assist with the development of its games at their own development and production studios. Internationally, the Company conducts business through its international headquarters in Switzerland and has wholly owned subsidiaries worldwide, including offices in Europe, Australia, Asia and Latin America. The Company�� studios and development teams are organized around its Label structure. Each Label operates globally with dedicated game development and marketing teams. These Labels are supported by the Company�� Global Publishing Organization that is responsible for the distribution, sales, and marketing of its products, including planning, operations, and manufacturing functions.

EA Games

EA Games is home to a number of the Company�� studios and development teams, which together create a portfolio of games and related content and services marketed under the EA brand in categories, such as action-adventure, role playing, racing and first-person shooter games. The EA Games portfolio includes a number of franchises, such as Battlefield, Dead Space, Medal of Honor and Need for Speed. EA Games titles are developed primarily at the following EA studios, Criterion, DICE, EA Los Angeles, Visceral, and EA Montreal. EA Games also contracts with external game developers, to provide these developers with a variety of services, including development assistance, publishing, and distribution of their games.

EA SPORTS

EA SPORTS develops a collection of sports-based video games and related content and services marketed under the EA SPORTS brand. EA SPORTS games range from simulated sports titles with realistic graphics based on real-world sports leagues, players, events and venues to more casual games with arcade-style gameplay and graphics. The Company�� EA SPORTS franchises include FIFA, Fig! ht Night,! Madden NFL, NCAA Football, NHL Hockey, and Tiger Woods PGA Tour. EA SPORTS games are developed primarily at the Company�� EA Canada studio in Burnaby, British Columbia, and its EA Tiburon studio located in Orlando, Florida.

BioWare

BioWare develops role-playing games, focused on stories, characters and worlds to discover. BioWare�� portfolio includes the MMO role-playing game Star Wars: The Old Republic and the Mass Effect and Dragon Age franchises. BioWare operates in Texas, California, Canada and Ireland.

Maxis

Maxis (formerly EA Play) are focused on creating games and related content and services for a mass audience. Maxis products include wholly owned franchises, such as The Sims, SimCity, MySims, and Spore. During the fiscal year ended March 31, 2012 (fiscal 2012), the Company released titles in The Sims 3 franchise, and together with Playfish, The Sims Social game on Facebook. Maxis oversees internal studios and development teams located in California, Utah, Beijing, China and Guildford, England, and works with third-party developers.

PopCap

PopCap develops easy-to-learn games. PopCap games, including Bejeweled, Plants vs. Zombies, Zuma, Peggle, and Bookworm are gameplays. PopCap games are developed primarily in Seattle, Washington.

Social/Mobile Studios

The Company�� Social/Mobile studios is focused on developing interactive games for play on mobile devices and Internet platforms, including social networking sites, such as Facebook. Through EA Mobile, the Company is a global publisher of games for mobile devices. Its customers purchase and download the Company�� games through a mobile carrier�� e-commerce service and mobile application storefronts accessed directly from their mobile devices. EA Mobile develops games for mobile devices at studios located in the United States, Canada, Romania, Australia, India and Korea. Through Playfish, it offers free-to-play social games, in! cluding T! he Sims Social, Pet Society, EA Sports FIFA Superstars and Madden NFL Superstars that can be played on platforms, such as Facebook, Google, iPhone and Android. Playfish generates revenue through sales of digital content and Internet-based advertising.

The Company, through its Pogo online service, offers games, such as card, puzzle and word games on www.pogo.com, as well as on Facebook and other platforms. In addition to paid subscriptions, Pogo also generates revenue through Internet-based advertising and sales of digital content. In addition, it has a licensing agreement with Hasbro, which provides the Company with the rights to create digital games for all platforms based on most of Hasbro�� toy and game intellectual properties, including MONOPOLY, SCRABBLE (for United States and Canada), YAHTZEE (excluding the Nordic countries), NERF, and LITTLEST PET SHOP. Hasbro games are developed by its EA Mobile, Pogo and Social studios.

The Company competes with Activision Blizzard, Take-Two Interactive, THQ, Ubisoft, Disney, Capcom Mobile, DeNA, Gameloft, Glu Mobile, Gree, Rovio, Zynga, Big Fish, Nexon, Tencent and Facebook.

Advisors' Opinion:

• [By WALLSTCHEATSHEET.COM]

  With a new CEO in place and a clear focus on expansion into the growing mobile and social gaming spheres, EA should experience stable profitability in the medium term. However, the company is expensive right now compared to its historical price-to-earnings ratio. EA seems to have put its PR problems and release glitches in the past and has an impressive lineup of games in the pipeline. In-house content creation is an area EA must expand on to maintain success in the marketplace. Still, EA doesn�� appear to have ample growth prospects to justify its relatively high price. Investors should WAIT AND SEE if they can acquire shares of EA at a lower price in the future.

• [By Leo Sun]

  However, Take Two (NASDAQ: TTWO  ) has no plans to release Grand Theft Auto V for the Wii U, and Electronic Arts (NASDAQ: EA  ) has stated that it doesn't plan to support the console at all, citing its lack of focus on online multiplayer games.

• [By Demitrios Kalogeropoulos]

  Electronic Arts (NASDAQ: EA  ) was in a sharing mood this week. The company unveiled its entire next-generation game lineup at the E3 industry expo, giving gamers and investors a detailed look at its new slate of titles.

• [By Anora Mahmudova]

  Today�� movers & shakers: Shares in Adobe Systems Incorporated (ADBE) �closed up 13% after the company reported quarterly results after the close on Thursday. Fourth-quarter earnings per share fell to 13 cents; however, Creative Cloud subscribers rose by more than expected to 1.4 million. Electronic Arts Inc (EA) �rallied 6%. Twitter (TWTR) �shares rose 6.6% after it reversed earlier changes to the way the ��lock��function works, following outcry from users. Among decliners, Anadarko Petroleum Corporation (APC) ��shares sunk 6.4% after a U.S. bankruptcy judged ruled it could be liable for an at-least $5 billion in lawsuit linked to its 2006 Kerr-McGee buy. Read more in the Movers & Shakers column.

Top 10 High Tech Companies To Own For 2014: Mountain Capital Inc(MCI.V)

First Lithium Resources Inc., an exploration stage company, engages in the acquisition, exploration, and development of mineral properties primarily in Canada. The company primarily explores for lithium. It also involves in the exploration of gold in Ontario and the Yukon Territory, and potash near the Alberta-Saskatchewan border. The company was formerly known as Mountain Capital, Inc. and changed its name to First Lithium Resources Inc. in May 2009. First Lithium Resources Inc. is headquartered in Vancouver, Canada.

Top 10 High Tech Companies To Own For 2014: Mega Copper Ltd (MCU.V)

Mega Copper Ltd., an exploration stage company, engages in the acquisition, exploration, and development of mineral properties primarily located in British Columbia, Canada. The company was incorporated in 2007 and is based in Vancouver, Canada.

Top 10 High Tech Companies To Own For 2014: National Interstate Corporation(NATL)

National Interstate Corporation, through its subsidiaries, operates as a specialty property and casualty insurance company in the United States, the District of Columbia, and the Cayman Islands. It underwrites and sells traditional and alternative property, and casualty insurance products primarily to the passenger transportation industry and the trucking industry; general commercial insurance to small businesses in Hawaii and Alaska; personal insurance to owners of recreational vehicles and commercial vehicles in the United States; and insurance products for moving and storage transportation companies. The company?s products include truck and passenger transportation alternative risk transfer insurance products, and worker?s compensation coverage; and commercial auto liability, general liability, physical damage, and motor truck cargo and related coverage?s for truck and passenger operators, as well as various coverage?s to the moving and storage industry, including c ommercial auto liability, physical damage, workers? compensation, employers? liability, cargo, commercial umbrella, commercial property, general liability, crime, equipment breakdown, inland marine, and movers and warehousemen?s liability products. Its products also include coverage?s for campsite liability, vehicle replacement coverage, and coverage for trailers, golf carts, and campsite storage facilities; companion personal auto coverage to recreational vehicle policyholders; and commercial vehicle insurance that provides coverage for companies with vehicles used by contractors, artisans, and other small businesses. National Interstate Corporation markets its products through various distribution channels, such as independent agents and brokers, program administrators, affiliated agencies, and agent internet initiatives. The company was founded in 1989 and is headquartered in Richfield, Ohio. National Interstate Corporation is a subsidiary of Great American Insurance Company.

Top 10 High Tech Companies To Own For 2014: Rand Mining NL(RND.AX)

RAND Mining Ltd., through its subsidiaries, engages in the exploration, development, and production of mineral resources in Australia. It primarily explores for gold and silver. The company was formerly known as Rand Mining NL and changed its name to RAND Mining Ltd. in February 2011. The company was incorporated in 1966 and is based in South Perth, Australia.

Top 10 High Tech Companies To Own For 2014: Quetzal Energy Ltd (QEI.V)

Santa Maria Petroleum Inc. engages in the exploration and production of oil and gas properties with a focus on the Llanos Basin in Colombia. It holds participating interests in four blocks in the Llanos Basin, Colombia. The company was formerly known as Quetzal Energy Ltd. and changed its name to Santa Maria Petroleum Inc. in June 2012. Santa Maria Petroleum Inc. is headquartered in Calgary, Canada.

Top Casino Companies To Buy For 2014

Melco Crown Entertainment Ltd (NASDAQ: MPEL) is a pure play Macau casino gaming stock that�� delivered an exceptional performance for investors verses the Las Vegas Sands Corp (NYSE: LVS), Wynn Resorts, Limited (NASDAQ: WYNN) and Market Vectors Gaming ETF (NYSEARCA: BJK), which also have exposure to the Macau casino gaming market, for a good reason. In 2006, Macau officially overtook the Las Vegas Strip as the largest casino gaming market in the world thanks in part to its location near Hong Kong�that�� also�within easy reach of the two billion people in China, Taiwan, Japan, South Korea, Thailand, Malaysia, Singapore, Indonesia and the Philippines. With that said, there could be some unfavorable trends or concerns that might make both Macau and Melco Crown Entertainment less of a sure bet.

Top Casino Companies To Buy For 2014: NanoTech Entertainment Inc (NTEK)

NanoTech Entertainment, Inc. (NanoTech), formerly Aldar Group, Inc., is a provider of gaming technology for the coin-op arcade, casino gaming and consumer gaming markets. The Company operates as a manufacturer, developing technology and games, and then licensing them to third parties for manufacturing and distribution. As of June 30, 2009, the Company�� products included MultiPin, Xtreme Rally Racing, NanoNET Online System, Pinball Wizard, Mot-Ion Adapter, Opti-Gun Adapter and Retr-IO Adapter. In April 2009, the Company acquired NanoTech Entertainment, Inc. In July 2013, NanoTech Entertainment Inc completed the acquisition of Clear Memories, Inc. of Napa California. Effective August 9, 2013, NanoTech Entertainment Inc acquired Worldwide Global Entertainment, a developer of prepackaged software.

The Company�� physics engine and motion sensors allow MultiPin to accurately recreate the experience of a mechanical pinball machine, while providing players with a variety of classic and modern pinball games to choose from. Xtreme Rally Racing is a driving machine that features three modes of game play: Xtreme Off-Road-Race Head to Head against other players and the computer to checkpoints while driving anywhere on the map with no preset course; Timed Rally Stages-Classic Rally Racing on real world courses. Players will be able to race in five different countries on real world rally courses, and Xtreme Stadium Racing-Custom Stadiums designed for Xtreme racing, including a figure eight multi-lap course with huge jumps. NanoNET Online System is remote operator control of machines, including diagnostics, accounting reports, and automatic software updates and enhancements downloaded over the net.

The Company has created the input device designed to give the pinball players a way to experience real pinball controls on their personal computer. Based on the technology developed for the MultiPin product it has built a controller that lets people play pinball using traditional controls and! the ability to shake and nudge the table. The Mot-Ion adapter is a universal serial bus (USB) adapter that allows do it yourself Pinball enthusiasts to build their own cabinet using real pinball controls providing analog inputs for nudging and bumping. The OptiGun adapter is a USB adapter that allows players to connect Arcade Light Guns to any USB based system. The Retr-IO adapters provide a standard JAMMA interface for USB based systems.

Advisors' Opinion:

• [By Bryan Murphy]

  Call them hunches (because that's all they are), but now would be a great time to get out of a NanoTech Entertainment, Inc. (OTCMKTS:NTEK) position and/or get into an ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD). NTEK looks like its reached its maximum potential - for the time being - while ACAD looks like it's ready to start rolling higher again.

• [By Peter Graham]

  Nyxio Technologies Corp (OTCMKTS: NYXO), COREwafer Industries Inc (OTCMKTS: WAFR) and NanoTech Entertainment, Inc (OTCMKTS: NTEK) are three small cap stocks in some very diverse industries. In fact, one of these stocks just bought a 3D ice sculpture business. So will investors see their investment melt with that small cap stock�along with the other two? Here is a closer look to help you decide for yourself:��

Top Casino Companies To Buy For 2014: Pinnacle Entertainment Inc.(PNK)

Pinnacle Entertainment, Inc. owns, develops, and operates casinos, and related hospitality and entertainment facilities in the United States. It operates casinos, such as L'Auberge du Lac in Lake Charles, Louisiana; River City Casino and Lumiere Place in St. Louis, Missouri; Boomtown New Orleans in New Orleans, Louisiana; Belterra Casino Resort in Vevay, Indiana; Boomtown Bossier City in Bossier City, Louisiana; and Boomtown Reno in Reno, Nevada. The company also operates River Downs racetrack in southeast Cincinnati, Ohio. As of May 26, 2011, it operated seven casinos and one racetrack. The company was formerly known as Hollywood Park, Inc. and changed its name to Pinnacle Entertainment, Inc. in February 2000. Pinnacle Entertainment, Inc. was founded in 1935 and is based in Las Vegas, Nevada.

Advisors' Opinion:

• [By Sean Williams]

  Time to make the switch
  If I could name a sector that I'd certainly tread lightly around considering that consumers are tightening their wallets, it would be the casino sector. Casino companies rely on loose wallets and vacations to drive profits. This is why I feel it could be the time to say goodbye to casino and race track operator Pinnacle Entertainment (NYSE: PNK  ) near its 52-week high.

• [By Dan Radovsky]

  Pinnacle Entertainment (NYSE: PNK  ) has reached an agreement in principle with the Bureau of Competition of the Federal Trade Commission that would allow the company to complete its proposed acquisition of Ameristar Casinos (NASDAQ: ASCA  ) , Pinnacle announced today.

• [By Ben Levisohn]

  Pinnacle Entertainment (PNK) has gained 56% this year; Las Vegas Sands (LVS) has climbed 38%. And Deutsche Bank has nice things to say about both today.

  Bloomberg

  First Pinnacle. Deutsche Bank’s Carlo Santarelli ponders the stock’s big move and comes away still seeing value in its shares. He writes:

  When we upgraded PNK in April, our thesis centered on the FCF strength of the combined entities [Pinnacle completed its acquisition of Ameristar Casinos on Aug. 14], a handful of favorable catalysts, easing regional gaming comps, & an inexpensive relative valuation. Given the shares’ sizeable move since then, we believe it is worth revisiting the investment case. Post the announcement of several asset sales and the closing of the transaction, we are adjusting our estimates, raising our PT to $30 from $24, and maintaining our bullish view at current levels given what we still believe to be an attractive free cash flow valuation, meaningful potential synergy realization beyond the $40 mm of announced benefits, and a free option on a lagging regional recovery.

  Santarelli also revisited Las Vegas Sands and there too, he likes what he sees. He writes:

  With…LVS at [a share price level] that have been challenging to break from over the last year plus, we believe this time is different and hence we see continued upward momentum…In the case of LVS, we see; 1) meaningful mass market strength continuing through year end, setting the stage for upward company and market estimate revisions for 2014, 2) continued cash flow appreciation and capital returns serving as downside protection and positive catalysts, and 3) continued shared gains, largely driven by table optimization and mass market strength, driving both estimates and sentiment.

  He also likes Wynn Resorts (WYNN), despite its 34% gain.�Santarelli writes:

  As for WYNN, we believe near-term estimates continue to take a back seat to capital return

Best Undervalued Stocks To Buy For 2014: Wynn Resorts Limited(WYNN)

Wynn Resorts, Limited, together with its subsidiaries, engages in the development, ownership, and operation of destination casino resorts. The company owns and operates Wynn Las Vegas casino resort in Las Vegas, which includes approximately 22 food and beverage outlets comprising 5 dining restaurants; 2 nightclubs; 1 spa and salon; 1 Ferrari and Maserati automobile dealership; wedding chapels; an 18-hole golf course; meeting space; and foot retail promenade featuring boutiques. Wynn Las Vegas casino resort also features approximately 147 table games, 1 baccarat salon, private VIP gaming rooms, 1 poker room, 1,842 slot machines, and 1 race and sports book. It also owns and operates an Encore at Wynn Las Vegas resort, a destination casino resort located adjacent to Wynn Las Vegas that features a 2,034 all-suite hotel, as well as a casino with 95 table games, 1 sky casino, 1 baccarat salon, private VIP gaming rooms, and 778 slot machines. In addition, the company operates Wyn n Macau casino resort located in the Macau Special Administrative Region of the People?s Republic of China. Wynn Macau casino resort features approximately 595 hotel rooms and suites, 410 table games, 935 slot machines, 1 poker room, 1 sky casino, 6 restaurants, 1 spa and salon, lounges, meeting facilities, and retail space featuring boutiques. Further, it operates Encore at Wynn Macau resort located adjacent to Wynn Macau. Encore at Wynn Macau resort features approximately 410 luxury suites and 4 villas, as well as casino gaming space, including a sky casino consisting of 60 table games and 80 slot machines, 2 restaurants, 1 luxury spa, and retail space. The company was founded in 2002 and is based in Las Vegas, Nevada.

Advisors' Opinion:

• [By M. Joy, Hayes]

  Industry trends
  Other businesses in the industry also have copious related-party transactions. In particular, founder-led businesses Wynn Resorts (NASDAQ: WYNN  ) and Boyd Gaming (NYSE: BYD  ) �reported a large number of such transactions in their 2013 proxies, including employment of relatives, employee use of company services, and employee use of company-owned property. MGM Resorts International (NYSE: MGM  ) , on the other hand, didn't have to report any related-party transactions in its 2013 proxy.

Top Casino Companies To Buy For 2014: Nevada Gold & Casinos Inc (UWN)

Nevada Gold & Casinos, Inc., incorporated on April 7, 1977, is primarily a gaming company involved in financing, developing, owning and operating gaming projects. Through the Company's wholly owned subsidiary, Gold Mountain Development, LLC, the Company owns approximately 268 acres of undeveloped land in the vicinity of Black Hawk, Colorado. On January 27, 2012, through the Company's wholly owned subsidiary, NG South Dakota, LLC, the Company acquired A.G. Trucano, Son & Grandsons, Inc. (South Dakota Gol). On July 18, 2011, through the Company's wholly owned subsidiary, NG Washington III, LLC, the Company acquired Red Dragon mini-casino in Mountlake Terrace, Washington (Washington III). On May 25, 2012, the Company sold all of the assets, including rights in the Colorado Grande name and gaming-related liabilities, of the Colorado Grande Casino to G Investments, LLC (GI).

Commercial Gaming Projects

The Company owns and operates 10 gaming facilities in Washington, and a slot machine route operation in South Dakota. These properties are wholly owned and operated by the Company: the Crazy Moose Casinos in Pasco and Mountlake Terrace, Washington, the Coyote Bob�� Casino in Kennewick, Washington, the Silver Dollar Casinos in SeaTac, Bothell and Renton, Washington, the Club Hollywood Casino in Shoreline, Washington, the Royal Casino in Everett, Washington, the Golden Nugget Casino in Tukwila, Washington, and the Red Dragon Casino in Mountlake Terrace, Washington (Washington Gold), and the South Dakota Gold slot route operation in Deadwood, South Dakota.

Commercial Casino Projects

The Company own two mini-casinos operating in Mountlake Terrace. The Red Dragon mini-casino, located in western Washington State, has a total of 15 table games, including Player Banked Poker, Baccarat, and other banked table games. The mini-casino is located within 14 miles of downtown Seattle. South Dakota Gold is a slot machine route that operates over 900 slots at approximate! ly 20 locations in Deadwood, South Dakota, which represent about 24% of the total number of slot machines in that market. Deadwood is a town of 1,300 residents located in the Black Hills, South Dakota, in the southwest corner of the state.

Top Casino Companies To Buy For 2014: Umax Group Corp (UMAX)

Umax Group Corp., incorporated on March 21, 2011, is a development-stage company. The Company focuses to develop and distribute its product to the arcade and entertainment industry. The Company�� products include Rocket Launch, is Strength testing game which allows players to test their pushing/ throwing strength; Space Hockey, is a two player hockey game - each player must score as many as possible goals and Boxer, is a Simple punch testing game: insert coin/token/bill, press start button, hit the punch bag, wait for result, and try to beat opponent�� score or high score.

As of April 30, 2013, the Company had no revenues. The Company has developed its business plan, and executed exclusive distribution contract GEO a private enterprise, where it engages GEO as an independent contractor for the specific purpose of developing, manufacturing and supplying games for the Company.

Top Casino Companies To Buy For 2014: MGM Resorts International(MGM)

MGM Resorts International, through its subsidiaries, primarily owns and operates casino resorts in the United States. The company?s resorts offer gaming, hotel, dining, entertainment, retail, and other resort amenities. It also owns and operates golf courses and a golf club. As of December 31, 2010, the company owned and operated 15 properties located in Nevada, Mississippi, and Michigan; and has 50% investments in 4 other casino resorts in Nevada, Illinois, and Macau. In addition, MGM Resorts International has an agreement with the Mashantucket Pequot Tribal Nation, which owns and operates a casino resort in Connecticut, to carry the ?MGM Grand? brand name. The company was formerly known as MGM MIRAGE and changed its name to MGM Resorts International in June 2010. MGM Resorts International was founded in 1986 and is based in Las Vegas, Nevada.

Advisors' Opinion:

• [By Paul Ausick]

  U.S.-based casino operators Las Vegas Sands Inc. (NYSE: LVS), Wynn Resorts Ltd. (NASDAQ: WYNN), and MGM Resorts International (NYSE: MGM) already operate resorts and casinos in Macau and these companies would be much smaller without them.

Top Casino Companies To Buy For 2014: (XTRN)

Las Vegas Railway Express Inc. focuses to re-establish a conventional passenger train service between the Las Vegas and Los Angeles metropolitan areas. It plans to establish a ?Vegas-style? passenger train service. The company is based in Las Vegas, Nevada.

Top Casino Companies To Buy For 2014: Penn National Gaming Inc.(PENN)

Penn National Gaming, Inc. and its subsidiaries own and manage gaming and pari-mutuel properties in the United States. It operates approximately 27,000 gaming machines; 500 table games; and 2,000 hotel rooms in 23 facilities in 16 jurisdictions, including Colorado, Florida, Illinois, Indiana, Iowa, Louisiana, Maine, Maryland, Mississippi, Missouri, New Jersey, New Mexico, Ohio, Pennsylvania, West Virginia, and Ontario. The company was formerly known as PNRC Corp. and changed its name to Penn National Gaming, Inc. in 1994. Penn National Gaming, Inc. was founded in 1982 and is based in Wyomissing, Pennsylvania.

Advisors' Opinion:

• [By Paul Ausick]

  Penn National Gaming Inc. (NASDAQ: PENN) completed on Monday the spin-off of its real-estate holdings into a new REIT, Gaming and Leisure Properties Inc. (G&LP) (NASDAQ: GLPI). The spin-off was first announced a year ago. Shares in GLPI are trading at around $46.51 after opening at $45.76 this morning.

• [By Paul Ausick]

  Stocks on the Move: BlackBerry Ltd. (NASDAQ: BBRY) is down 16.4% at $6.50 after announcing that no buyout bid will be forthcoming. Penn National Gaming Inc. (NASDAQ: PENN) is down 76.7% at $13.75 after spinning-off its real-estate holdings into a REIT. Suntech Power Holdings Co. Ltd. (NYSE: STP) is up 15.5% at $1.53 following the acquisition of its major operations in Wuxi.

$330 million deal could save art in bankrupt Detroit

An appraisal of the art in the Detroit Institute of Arts by Chistie's has valued the museum's collection at between $452 million and $866 million.

DETROIT (CNNMoney) A group of leading foundations have offered $330 million to keep art on display in the Detroit Institute of Arts while also helping city retirees who are at risk of having their pension benefits slashed.

It's not clear if the offer will be accepted and it would close only a small fraction of the huge debt that forced Detroit into bankruptcy last year.

But it would at least help inject some cash into the reorganization of the city and eliminate the risk that Detroit's treasured art collection could be sold off to private investors to pay its debts.

The offer was reached after discussions with a federal judge serving as a mediator in the city's bankruptcy case. Since the Detroit Institute of Arts is a unit of city government, some have suggested the art could be sold off to help compensate creditors hurt by the city's bankruptcy filing.

The new offer from the private foundations would provide a way to draw money from the art work without removing it from the museum.

The deal has yet to be approved by either Kevyn Orr, the emergency manager who is effectively running Detroit, or the bankruptcy court that is overseeing the city.

An appraisal of the art in the museum by auction house Chistie's has valued the collection at between $452 million and $866 million. So it is unclear if the offer is sufficient to satisfy creditors.

Detroit has $18 billion in debt, and Orr has proposed slashing $11.5 billion of unsecured debt, including promised pension benefits and retiree health care coverage, by more than 80%.

  Detroit may sell its art treasures

The foundations' offer is contingent on the money being used to help close the funding gap in the pension plans and limit the reduction in benefits.

The foundations include the Community Foundation for Southeast Michigan, the Ford Foundation, the Kresge Foundation and the John S. and James L. Knight Foundation.

Samsung Keeps Hijacking Android

Samsung has leveraged Google (NASDAQ: GOOG  ) Android to become the dominant smartphone vendor in the world by a large margin. The South Korean giant has utilized its advantages in vertical integration, scale, and marketing, and due to its size has many more methods to differentiate itself from rival Android OEMs.

The company has the resources to focus more heavily on software and services, two areas that are critical to success nowadays. Commoditized rivals can't afford to do as much. When Samsung unveiled the Galaxy S4, Android wasn't even mentioned as the company focused entirely on what it was bringing to the table. Samsung followed up by launching a new content hub that competes directly with Google Play, where users can search for apps and entertainment tailored to its Galaxy devices.

Sammy's at it again. The company just announced its first-ever annual developers conference, in an effort to grow a developer base that's specialized for its products. That extends beyond just smartphones and tablets, and Samsung is gearing the event toward a wide range of platforms and devices. The developer conference will take place later this year in California, not too far from where the company just began construction on a new $300 million headquarters in Silicon Valley.

Typically the companies that directly operate the primary operating system platforms are the ones that host developer conferences. Google I/O, Apple WWDC, and Microsoft Build have all come and gone this year. Samsung is now making it clear that it wants to contend with the best of them on a platform level.

While the event should include a wide range of platforms, Android is by far Samsung's largest and most successful portfolio. The company could be expected to focus developers on its Galaxy brand, as opposed to other product families like its Windows brand ATIV or its upcoming Tizen operating system.

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Samsung continues to hijack Android for its own good.

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What Are Frontier Markets?

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Frontier markets refer to equity markets in small nations that are at an earlier stage of economic and political development than larger and more mature emerging markets. In other words, think of frontier markets as the smaller siblings of emerging markets. Frontier equity markets typically have modest market capitalization, limited investability and liquidity, and few market information sources. On the positive side, they generally possess favorable demographics and good long-term growth prospects. As these markets probably constitute the last frontier of investing in an increasingly interlinked global economy, investors should be aware of their risks and rewards, and the options available to invest in them.

Characteristics of Frontier Markets

The term "frontier markets" is widely attributed to the International Finance Corporation (IFC), which coined it in 1992 to refer to a subset of emerging markets. Standard & Poor's bought the IFC Emerging Markets Database in 2000 and subsequently established a frontier index in 2007.

As of September 2013, frontier indices had been established by four major providers – Standard & Poor's, MSCI, Russell Investments and FTSE. The number of frontier markets in these indices ranges from 25 in the MSCI index to 41 in the Russell Frontier Index. These frontier markets are generally concentrated in Eastern Europe, Africa, the Middle East, South America and Asia. The biggest frontier markets are Kuwait, Qatar, the United Arab Emirates (UAE), Nigeria, Argentina and Kazakhstan.

The criteria for inclusion in a frontier markets index are not rigid. The starting point in evaluating a nation for inclusion, of course, is that it should not already be a component of one of the numerous emerging market or developed market indices. Assuming that a nation is not, most index providers evaluate paramete! rs such as its economic development, market accessibility, liquidity and foreign investment restrictions. Overseas investor interest is also considered, since there is no point in going to the effort and expense of including a nation in a frontier markets index if there is little interest in it as an investment destination.

Emerging to Frontier (and Vice Versa)

The subjectivity involved in classifying a market as a "frontier," rather than an emerging, market means that there are occasional inconsistencies in classification among the different index providers. For example, Pakistan is classified as a frontier market by S&P, MSCI and Russell, but is regarded as an emerging market by FTSE.

There is also some degree of migration between the frontier and emerging markets as their economic fortunes change. As an example, in 2009 MSCI re-classified the status of three countries from emerging market to frontier market – Jordan, Pakistan and Argentina. Morocco will be moved from the list of emerging markets to frontier markets in November 2013.

Movement from the ranks of frontier markets to emerging markets is also possible, as evidenced by the fact that Qatar and UAE will be making this transition in May 2014.

Sector Similarities, Economic Disparities

The biggest sector in any frontier market index by far is banking/financials, which generally accounts for more than 50% of the index. Other sectors with double-digit weights are industrials and telecoms. Sectors such as health care, utilities and consumer discretionary – which form a substantial portion of the benchmark index in bigger economies – typically have minimal representation in frontier market indices.

Despite the large number of Middle East nations and OPEC producers included in frontier markets, energy companies do not find much representation in these indices. This is because most of the big oil and gas companies in these nations are sovereign entities that are largely or wholly owned by ! the gover! nment, so they are not open to investment by the general public.

Another point worth noting is that since frontier markets include a number of prosperous nations, there is a great deal of disparity between the constituents of a frontier index. As an example, Qatar, with its huge energy reserves and rapid growth rate in recent years, had per-capita gross national income of $81,300 and a population of less than 2 million in 2011, according to the World Bank. In comparison, Bangladesh had per-capita income of $1,910 and a population of 153 million in 2011.

Comparing Frontier Market Indices

Here's a basic comparison of the four main frontier market indices (as of September 2013):

S&P Frontier BMI (Broad Market Index) Number of countries – 36

Number of companies – 556

Top five countries – Kuwait, Qatar, Nigeria, UAE, Argentina

Top three sectors – Financials (53.9%), industrials, consumer staples

MSCI Frontier Markets Index Number of countries – 25

Number of companies – 141

Top five countries – Kuwait, Qatar, Nigeria, UAE, Pakistan

Top three sectors – Financials (53.1%), telecom services, industrials

FTSE Frontier 50 Index Number of countries – 26

Number of companies – 50

Top five countries – Qatar, Nigeria, Argentina, Kenya, Oman

Top three sectors – Banks (51%), industrials, telecom

Russell Frontier Index Number of countries – 41

Number of companies – Not known

Top five countries – Kuwait, Nigeria, Qatar, Argentina, Pakistan

Top three sectors – Financial services, energy, utilities

Why Frontier Markets are Important

Frontier markets are worthy of considering for a number of reasons:

Growth potential due to demographics: While frontier market economies have a combined population of 2 billion people – or about 30% of the global population – they account for only 6% of the world's nominal GDP and just 0.4% of global market capitalization. The population of those living in frontier markets is relatively young, with 60% under 30 years of age and an average age of 30.2 years, a decade less than the 40.5 average age of the 1 billion living in developed nations. Labor costs in most frontier markets are also low compared with costs in other nations. This demographic advantage, combined with a debt-to-GDP that is much lower than in the developed world, means that frontier markets have better long-term growth prospects. In 2011, for instance, frontier markets posted an average GDP growth rate of 4.9%, three times faster than the 1.6% growth rate recorded by the 10 largest advanced economies, according to the World Bank. Frontier markets may improve portfolio diversification: While increasing global economy integration means that most developed and emerging markets move in sync with one another, frontier markets have a lower degree of correlation with them. As a result, frontier markets may be effective in improving a portfolio's diversification. Above-average returns: As of Sept. 25, 2013, eight of the 10 best-performing equity markets for the year were frontier markets, with an average gain of 41.5% in U.S.-dollar terms. While these are not typical returns, as they can gyrate wildly from one year to the next, a patient investor with a long-term investment horizon may be able to generate significant returns from frontier markets over time. How to Invest in Frontier Markets

Exchange traded funds (ETFs) offer by far the best way to invest in frontier markets. A summary of some of the leading ETFs follows (data as of Sept. 27, 2013):

iShares MSCI Frontier 100 (NYSE:FM): Tracks the MSCI Frontier Markets 100 Index. Top geographic allocations – Kuwait, Qatar, UAE, Nigeria and Pakistan

Top sector allocations – Banks, telecoms, oil and gas, real estate

Total assets = US$301 million

Guggenheim Frontier Markets (NYSE:FRN): Seeks investment results that correspond to the price and yield performance of the Bank of New York Mellon New Frontier DR Index. This index, in turn, tracks the performance of depositary receipts in ADR or GDR form for companies from countries defined as the frontier market in the LSE, NYSE, NYSE Amex and Nasdaq. Top geographic allocations – Chile, Colombia, Argentina, Egypt and Nigeria

Top sector allocations – Banks, oil and gas, electric utilities, food

Total assets = US$94 million.

PowerShares MENA Frontier Countries Portfolio (Nasdaq:PMNA): Seeks investment results that correspond to performance of the Nasdaq OMX Middle East North Africa (MENA) index. Top geographic allocations – Kuwait, UAE, Egypt, Qatar and Bahrain

Top sector allocations – Banks, real estate, telecoms, venture capital

Total assets = US$14 million.

Risks of Frontier Markets

Liquidity – Liquidity can be an issue for most markets during turbulent times, and especially for frontier markets due to their thin trading volumes. This lack of volume may result in limited liquidity and wide bid-ask spreads in volatile markets. Geopolitical and political risks – Many frontier markets are located in unstable areas, and as a result, geopolitical risk is a real concern. Political change is another issue that should be considered, since a change of government may be accompanied by significant unrest and instability. Inflation – This is a constant threat in some frontier markets, and it may erode investment returns substantially over the long term. Lack of transparency – Most frontier markets suffer from a lack of transparency and have inadequate information sources. Currency risk – The steep decline in some emerging market currencies like the Indian rupee in 2013 highlights the risk posed by investing overseas. While currency risk is a definite issue for frontier markets, it is less so for the Middle East nations such as Qatar and the UAE that peg their local currencies to the U.S. dollar. Conclusion

Despite their obvious risks, frontier markets offer investors the advantages of above-average returns driven by favorable demographics, as well as portfolio diversification. As these markets probably constitute the last frontier of investing in an increasingly interlinked global economy, investors should be aware of their risks and rewards, and the options available to invest in them.

Is SkyWest Flying Into a Brighter Future?

On Wednesday, I wrote that regional airline king SkyWest (NASDAQ: SKYW  ) is a business under threat, due to the growing obsolescence of 50-seat jets. The company has long-term contracts to fly its fleet of more than 500 50-seat jets for various partners -- particularly Delta Air Lines (NYSE: DAL  ) and United Continental (NYSE: UAL  ) -- but once those contracts end, nobody will want these fuel-guzzling aircraft.

Other regional airline competitors like Republic Airways (NASDAQ: RJET  ) are better positioned for where the industry is headed. Republic primarily flies larger regional jets, which are far more popular with the legacy carriers today. Still, SkyWest is not standing still. Today, I'll look at some initiatives SkyWest is pursuing in order to survive and thrive despite the rapidly changing business environment.

Downsizing or upsizing?
SkyWest is aggressively expanding into larger (two-class) regional jet service, as the industry is rapidly moving in that direction. The company already operates 185 large regional jets and is looking to grow that number quickly. Last August, SkyWest agreed to remove 66 small regional jets from service with Delta by the end of 2015 in return for getting contracts to fly 34 larger regional jets.

While SkyWest will be operating fewer aircraft -- it's a natural result of flying larger planes -- this will not necessarily damage profitability. The major airlines are willing to pay a premium for two-class regional jets, so profit margins can be significantly better than for 50-seat flying.

In fact, in 2012, the ExpressJet segment -- which operates more than two-thirds of the company's 50-seat-jet fleet -- posted a loss. By contrast, the SkyWest segment (which operates most of the company's two-class jets), earned a respectable 5.5% pre-tax margin. In other words, SkyWest can benefit from addition by subtraction. Overall revenue from Delta may be somewhat lower under the restructured agreement, but SkyWest has an opportunity to offset that revenue loss through margin improvement.

SkyWest also recently won a 12-year contract to operate 40 Embraer (NYSE: ERJ  ) E175 76-seat regional jets for United. Moreover, United ordered another 30 E175 aircraft in April, which it plans to assign to one of its regional partners. Since SkyWest will already be flying E175s for United, the company may have a leg up vis-à-vis competitors in the bidding process for that additional work.

Optimistic management
SkyWest's management clearly believes that the company can remain the leading regional carrier for many years to come. Not only did SkyWest order 100 aircraft last month (40 for its United agreement and 60 for other contracts it hopes to win), the company also became the launch customer of the second-generation E175 this week with a firm order for 100 E175-E2 aircraft, and 100 options. The E175-E2 is expected to offer significant cost improvements compared to the current generation of regional jets, and will enter service in 2020.

SkyWest will also be one of the first operators of the new Mitsubishi Regional Jet, with firm orders for 100 aircraft, which will begin arriving in 2017. All of these new orders indicate that management is confident that SkyWest will win plenty of large regional jet business to replace the 50-seat flying that will disappear.

Investors should be on the lookout for new long-term agreements for SkyWest to operate these aircraft for the major airlines. Without new deals, SkyWest would have trouble making use of all the new planes it will be receiving. One potential cause for optimism is that top competitor Republic Airways is currently at an impasse in contract negotiations with its pilots, which makes it harder for Republic to bid for new business (because it lacks cost certainty). By contrast, most of SkyWest's workforce is not unionized.

Opportunities balance risks
I continue to think that Republic is better positioned than SkyWest and is a better investment opportunity at present. However, SkyWest does have a few things going for it. Most notably, the 50-seat flying that it will lose over the next five years is not very profitable. If the company can return or sell those unwanted aircraft without incurring excessive charges, SkyWest could be well positioned to benefit from the higher margins of the large regional jet business.

SkyWest has won two major contracts in the past year, indicating that the company is still very competitive with other regional airlines. Management has also been active in ordering state of the art regional jets, in the hope that their better fuel efficiency will help SkyWest win future deals. Threats remain for SkyWest, but the company is working hard to adapt and find a profitable niche in the new U.S. airline landscape.

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How Apple Inadvertently Boosted YouTube for Google in a Big Way

Over the past year or so, the rift between Apple (NASDAQ: AAPL  ) and Google (NASDAQ: GOOG  ) has widened dramatically. When Apple first shipped the iPhone, the company prominently featured pre-installed apps for YouTube and Google Maps. Both of those apps were built by Apple but tied into Google's services and data. Both of those apps have since been removed.

YouTube for iOS. Source: Apple.

In their stead, Google released standalone third-party versions, which has actually been a boon for iOS users. Apple's versions went for years without meaningful updates, and Google has been excelling in interface design recently. Also gone is the ambiguous branding and ownership -- both apps are now fully developed and maintained by Big G.

With YouTube for iOS, getting unbundled late last year has given Google a big boost.

Out with the old, in with the YouTube
The Apple-built YouTube apps didn't feature ads and instead probably entailed some contractual dollars flowing from Cupertino to Mountain View. When Apple ditched YouTube, Google simply submitted a new and improved third-party version to the iTunes App Store that was subsequently approved -- and features ads. The only tiny hurdle is that users now have to manually download the app.

The net result of the shift has been that Google's mobile video ad revenue from YouTube has skyrocketed, tripling in the past six months. Bloomberg reports that Wedge Partners analyst Martin Pyykkonen pegs mobile video ad sales from YouTube near $350 million. The analyst also estimates that YouTube overall contributes 10% of total revenue.

Phil Farhi, YouTube's director of product management, said Apple's decision to unbundle YouTube has driven a big uptick in revenue growth.

Online video streaming is very much segregated into fixed and mobile platforms. On the fixed side, Netflix (NASDAQ: NFLX  ) is the dominant service provider, while YouTube owns mobile. A recent Sandvine study found that Netflix comprised nearly a third of all online video streaming for fixed access, while the tables turn in mobile in favor of YouTube at 27% of usage.

Ditching YouTube streamlined Apple's preinstalled-app development, and it just so happened to help Google in a big way.

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