In Retail, Everything Good is Bad Again and Vice Versa

In retail, it’s hard to ignore the fact that the trend has not been an investor’s friend. How else to explain the November reversals in Kohl’s (KSS), Macy’s (M), Dillard’s (DDS) and JC Penney (JCP), among others?

Reuters

Consider: Turning the three months ending Oct. 31, Kohl’s had gained 7%, while Macy’s had dropped 4.6%, Dillard’s had fallen 2.9% and JC Penney had plunged a whopping 49% as investors fretted about its future.

But then Macy’s reported stellar earnings yesterday, and Kohl’s missed this morning, and JC Penney offered signs of hope and suddenly the laggards are winners. In November, Macy’s has gained 10%, Dillard’s is up 12% and JC Penney has risen 17%, while Kohl’s has dropped 4.7%.

Will Kohl’s stay down? Sterne Agee’s Charles Grom and team see reasons for optimism:

KSS saw a “dramatic” improvement in Oct. trends, which have continued into Nov.; (2) part of the 3Q SSS weakness (likely ~100 bps) was due to the re-platforming of its e-commerce site, which should impact SSS positively in coming quarters; (3) inventory levels are in good shape ($ per store were down 5% YOY on a calendar shift adjusted basis); (4) KSS is seeing "LSD" sale lifts from its new loyalty card program (now in 30% of stores) in test markets, including CA, which rolled out in Sept.; & (5) while still a year out, the Fall 2014 launches of Juicy Couture and Izod brands are important wins for KSS on the national brands front (assuming merchandise margin $ can be well managed).

Top High Tech Companies For 2014

Shares of Kohl’s have dropped 7.7% to $53.76 today at 1:41 a.m.

Pimco continues to march toward alternatives

Bill Gross Bloomberg

Bond giant Pacific Investment Management Co. LLC is taking the next step to build itself into an alternatives investments powerhouse by preparing to launch its first managed-futures mutual fund.

On Friday, Pimco filed a preliminary prospectus with the Securities and Exchange Commission, the first step in registering a new mutual fund, for the Pimco Trends Managed Futures Fund. The fund will invest long and short in a variety of asset classes, including interest rates, commodities and currencies.

The managed-futures category, a longtime financial adviser favorite, has taken a bit of a popularity hit recently because of the category's poor long-term performance.

For the first time in three years, advisers didn't rank managed futures as the top alternatives category to which they plan to add, according to Morningstar Inc.'s and Barron's 2012 Alternative Investment Survey of U.S. Institutions and Financial Advisors.

“People tend to chase performance, and the performance of managed futures funds has been poor,” said Phil Guziec, an alternatives mutual fund analyst at Morningstar.

“People tend to buy the insurance policy when the house is on fire,” he said. “Things are calm right now.”

The managed-futures category at Morningstar has three-year annualized returns of -3.87%. The S&P 500 has annualized returns of 17% over the same time period.

Still, not all managed-futures funds have been dogged by poor performance lately, and there is an opportunity to create alpha within the strategies.

For example, the Credit Suisse Managed Futures Strategy Fund (CSAAX), the Natixis ASG Managed Futures Strategy Fund (ASFYX) and the 361 Managed Futures Strategy (AMFZX) are up 7%, 5% and 4%, respectively, year-to-date.

Pimco has the added bonus of being able to leverage its fixed-income expertise if it chooses to manage the short-term-debt portion of the fund to boost gains.

Managed-futures funds primarily use derivatives, such as swaps or futures contracts, to make bets on the direction of specific asset classes. Those contracts can be bought relatively cheaply, leaving the majority of the fund's assets in cashlike holdings as collateral.

Top Small Cap Companies To Watch In Right Now

“It would make a lot of sense to use their skill set to manage the collateral,” Mr. Guziec said.

Pimco has quietly been upping its alternatives presence over the past few years. Its alternative mutual funds have grown to more than $100 billion in assets, from $28 billion in 2008, as investors have increasingly looked for som! ething different than traditional stocks and bonds.

The search for less-correlated assets has hit home at Pimco recently as rising interest rates have led investors to flee traditional fixed income for the first time in more than five years.

Since May, when rates rose to 2.5%, from 1.6%, Pimco's flagship Total Return Fund, managed by Bill Gross, has seen $18.4 billion of outflows, compared with $21 billion of inflows over the previous 16 months, according to Morningstar.

The company's alternatives have held up well, though, specifically the Pimco Unconstrained Bond Fund (PUBAX), which has seen inflows of about $4.3 billion since May, according to Lipper Inc.

The Unconstrained Bond Fund has benefited from its flexibility, which should help it better dodge the pain of rising rates.

The proposed managed-futures fund, like other such offerings, would give Pimco another hedge against rising rates.

“These are all cash-plus strategies,” Mr. Guziec said. “To the extent that cash rates go up, that should help the returns of these strategies.”

Mike Reid, a spokesman for Pimco, didn't return calls seeking comment.

Is Tesla Motors a Buy After an Explosive Run?

With shares of Tesla Motors (NASDAQ:TSLA) trading around $165, is TSLA an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock's Movement

Tesla Motors designs, develops, manufactures, and sells electric vehicles and electric vehicle powertrain components. The company also provides services for the development of electric powertrain systems and components and sells electric powertrain components to other automotive manufacturers. It markets and sells its vehicles through Tesla stores, as well as over the Internet. Consumers and companies are looking to save at the pump, and what better way than with electric vehicles?

When Tesla Motors first introduced its unconventional Model S finance plan back in April, critics questioned the strategy's potential and charged the automaker with overstating customer savings. However, now it looks like electric car genius Elon Musk is once again ready to have the last laugh, because more and more analysts are coming around and recognizing the plan's boosted revenue potential, and soon, more traditional automakers may also be jumping on board.

T = Technicals on the Stock Chart Are Strong

Tesla Motors stock has been flying higher in the last several months. The stock is currently trading at all-time high prices and looks poised to continue. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, Tesla Motors is trading above its rising key averages, which signal neutral to bullish price action in the near-term.

(Source: Thinkorswim)

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

	Implied Volatility (IV)	30-Day IV Percentile	90-Day IV Percentile
Tesla Motors Options	55.44%	13%	10 Best Cheap Stocks To Own For 2014 11%

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

	Put IV Skew	Call IV Skew
October Options	Flat	Average
November Options	Flat	Average

As of today, there is an average demand from call buyers or sellers and low demand by put buyers or high demand by put sellers, all neutral to bullish over the next two months. To summarize, investors are buying a small amount of call and put option contracts and are leaning neutral to bullish over the next two months.

On the next page, let's take a look at the earnings and revenue growth rates and the conclusion.

E = Earnings Are Increasing Quarter-Over-Quarter

Rising stock prices are often strongly correlated with rising earnings and revenue growth rates. Also, the last four quarterly earnings announcement reactions help gauge investor sentiment on Tesla Motors's stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for Tesla Motors look like and more importantly, how did the markets like these numbers?

	2013 Q2	2013 Q1	2012 Q4	2012 Q3
Earnings Growth (Y-O-Y)	105.62%	113.95%	-1.27%	-66.67%
Revenue Growth (Y-O-Y)	1420.08%	1762.78%	677.88%	-13.13%
Earnings Reaction	14.34%	24.39%	-8.77%	8.92%

Tesla Motors has seen improving earnings and rising revenue figures over the last four quarters. From these numbers, the markets have been very excited about Tesla Motors's recent earnings announcements.

P = Excellent Relative Performance Versus Peers and Sector

How has Tesla Motors stock done relative to its peers, General Motors (NYSE:GM), Toyota Motor (NYSE:TM), Ford Motor (NYSE:F), and sector?

	Tesla Motors	General Motors	Toyota Motor	Ford Motor	Sector
Year-to-Date Return	386.40%	26.10%	35.64%	34.29%	32.91%

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

Conclusion

Tesla Motors offers electric vehicles that consumers and companies are opting for over other luxury vehicles. The company's new spin on financing may be attracting other vehicle companies worldwide. The stock has been flying higher over the last few years and is now trading at all-time high prices. Over the last four quarters, earnings have been improving while revenues have been rising which has left investors very excited about the company. Relative to its peers and sector, Tesla Motors has been a year-to-date performance leader. Look for Tesla Motors to continue to OUTPERFORM.

Why Cubs, Incapital Chairman Tom Ricketts Really Likes ‘Sustainable Investing’

What's more fun—bonds or professional baseball? When asked about the amount of time spent running the day-to-day operations of his Chicago-based investment firm, Incapital, Tom Ricketts doesn't hesitate.

“I’m actually pretty busy with that baseball team over your shoulder,” Ricketts quips, pointing to a television screen running a highlight reel.

The chairman of both Incapital and the Chicago Cubs (after leading his family’s acquisition in 2009), nonetheless still has a strong hand in the firm, and begins by noting its role as “a pioneer in offering corporate bonds through brokerage firms to investors.”

“We’ve now moved on to distribute additional products such as brokered deposits and UITs,” he adds.

Today, Incapital underwrites and distributes fixed income securities and structured notes through more than 700 broker-dealers, institutions, advisors and wealth managers.

When asked about the firm’s legacy of innovation and how it’s sidestepped the regulatory issues so many other firms have experienced when introducing “great, new products” to the market, only to subsequently go bust, Ricketts simply claims that “Each and every product we’ve offered has been thoroughly thought through from the standpoint of the investor at every level.”

That simplicity translates to everything the firm does.

“We’re very consistent in our messaging; we tell investors not to time the market or put all their eggs in one basket, rather, follow a roadmap and don’t overact to market events.”

Sounds basic enough, but coming from a major league baseball owner seems to give it added heft.

His latest passion are community investment notes, a form of SRI that doesn’t tangle with screens, arguments over sacrificed returns and opportunity costs like equity-based socially responsible investing.

“For everyone looking for SRI, here it is,” he emphatically states (for Ricketts anyway). “It’s like buying a bank CD or as simple as buying any other financial instrument. It’s not luck, but rather by design that they’re safe, have low transaction costs and low friction.”

Arguing that there are no “real, tangible opportunity costs, “it’s a way to do social good and enjoy returns.”

When asked about his “skin in the game” with the product he is promoting, he says his broker calls when the notes mature and he simply rolls them over.

“It’s very direct, and with none of the complaints heard on the equity SRI side. The notes are used for affordable housing, to help start businesses and for micro lending in other countries. They have extremely low default rates.”

As to his other love, the Cubs, and the renovations currently happening at famed Wrigley Field, he mentions the intricacies (delicately put) of dealing with Chicago politics—and waiting for the right opportunities to move the renovation process ahead.

Speaking of waiting, he concludes it’s something fixed income investors can’t afford to do.

“Sure, in the current environment, you might want to shorten your ladder, but the key is to not just do nothing. You can’t park it somewhere and get zero percent.”

How Your VantageScore Credit Report Is Calculated

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Since the 1970s, credit scores have played an increasingly vital role in the lending industry. Fair Isaac and Company began assigning credit scores to consumers based upon various factors over 40 years ago, and these scores are now reviewed not only by prospective lenders, but also by landlords, insurers and governmental agencies. But the computation process for the FICO score has some limitations; for example, a consumer has to have a credit line open for at least six months before it will show up on a FICO credit report. This and other deficiencies have led the three major bureaus to establish a new credit score model known as VantageScore, which evaluates customers according to a somewhat different set of criteria that can be much more forgiving in some instances.

A Collaborative Effort
The three major credit bureaus have used the FICO scoring model for decades, but the differences in how each agency computes its scores has led to numerous discrepancies that are often problematic for both lenders and consumers. The VantageScore model is designed to provide a much more standardized grading system than the one used by Fair Isaac and Company. The first version of Vantage appeared in 2006, followed by Vantage 2.0 in 2010, which was modified in response to the changes that swept over the lending industry after the Subprime Mortgage Meltdown of 2008.

The VantageScore Model Methodology
VantageScore credit scores are computed in a fundamentally different manner than FICO scores. They start with a somewhat different set of criteria than FICO and also assign a different weighting to each segment. A comparison of the two is shown as follows:

FICO Score
The Consumer's Payment History: 35% Total Amounts Owed by the Consumer: 30% Length of the Consumer's Credit History: 15% Types of Credit Used by the Consumer: 10% Amount of the Consumer's New Credit: 10% VantageScore
Amount of the Consumer's Recent Credit: 30% The Consumer's Payment History: 28% Utilization of the Consumer's Current Credit: 23% Size of the Consumer's Account Balances: 9% Depth of the Consumer's Credit: 9% Amount of the Consumer's Available Credit: 1% The VantageScore model is also quantified differently than FICO scores. It still uses a numerical range for its scores, but it also assigns a corresponding letter grade for a given range, in some instances, that helps consumers to understand the quality of their score. The grade is statistically based upon the ratio of consumers who are likely to charge off versus those who will pay on time. The VantageScore system is broken down as follows:
901 to 990 = A – 1 charge off for every 300 consumers who pay on time 801 to 900 = B – 1 charge off for every 50 consumers who pay on time 701 to 800 = C – 1 charge off for every 10 consumers who pay on time 601 to 700 = D – 1 charge off for every 5 consumers who pay on time 501 to 600 = F – 1 charge off for every 1 consumers who pay on time As with FICO, the consumer's creditworthiness matches his or her score and grade. Each of the three major credit bureaus computes a score based on the VantageScore model using its own data. Of course, while all three bureaus use the exact same model to compute the VantageScore credit score, it can still differ from one bureau to another because each bureau typically records slightly different information in their consumer files.

The VantageScore Benefit
One of the chief advantages that the VantageScore model brings is the ability to provide a score to a large segment of consumers (about 30 to 35 million) who are currently unscorable when traditional methodologies are applied. The VantageScore model differs from FICO in that a line of credit only has to be open for a single month in order to be factored in, yet this model takes 24 months of consumer credit activity into account, whereas FICO only looks back for six months. The longer look back period can be a big help for consumers who are working to rebuild their credit and are able to show a marked improvement over the longer time span. The VantageScore credit score is also designed to serve as a "predictive score" for those with thin credit histories by indicating the probability that they will meet their future payment obligations in a timely manner. It can also use rent and utility payments in its computations if they are reported by the landlord and/or utility provider.

VantageScore 3.0
The most recent version of the VantageScore model represents a substantial improvement over the previous two models. It was created beginning with over 900 data points from 45 million consumer credit files spanning two overlapping time frames from 2009 to 2012. However, it only uses about half the number of reason codes (which signify various reasons why the consumer's credit score carries the number that it has been assigned), and these codes have been rewritten in plain language that consumers can easily understand. VantageScore Solutions, the company behind the model, also provides an online resource where consumers can look up their reason codes, which can be found at www.reasoncode.org.

As mentioned previously, the risk assessment formula that is used in the model is now identical for each of the major bureaus because it employs uniform definitions for consumer payment and credit information that is received by each bureau. The VantageScore model also claims that the predictive score in this version will be 25% more accurate than the previous one due to the substantial increase in both the quality and quantity of data upon which the model is based.

Impact with Lenders
Despite the hype with which the three credit bureaus have promoted their new scoring system, it has been slow to catch on in the lending industry. The VantageScore model remains a very distant second to the traditional FICO score in the amount of market share that it has carved out among lenders. As of April 2012, less than 6% of the credit scoring market and only 10% of the major banks use the VantageScore model in their underwriting.

The Bottom Line
Although its method of computation is considered to be more fair and realistic than the FICO model, it will likely take some time for lenders to become comfortable with shifting to this alternative methodology. Nevertheless, the number of institutions that accept the VantageScore model is growing, and its popularity will likely continue to increase with its ability to tap a new market of potential lending customers. For these reasons, the major credit bureaus continue to view VantageScore credit scores as a model for the future.

Lululemon Is Priced for Best-Case Scenario

Since debuting on the public markets in 2008, yoga pant fabricator lululemon athletica (NASDAQ: LULU  ) has maintained extremely lofty valuations, often trading north of 40 times earnings. There's no doubt the company has grown quickly and rewarded early investors -- the stock has a to-date gain of nearly 360%. But for the price-conscious, risk-averse investor, it's never been a very appealing stock. That viewpoint has attracted more than just value-oriented investors, as the stock suffered a wardrobe malfunction of tremendous proportions, management shakeups, and now sagging product reviews. How long can Lululemon's valuation fly in an environment of increasing headwinds?

Market darling
The pricey products from Lululemon have clearly been a runaway success, but is that success tapering?

Founder Dennis Wilson recently announced he would be unloading about 3% of his position in the company -- more than 3 million shares. A big insider sale is not as prophetic as an insider buy (lots of reasons to sell, only one to buy), but it doesn't help the concern that Lululemon is facing some serious growing pains.

Investors are well aware of the see-through yoga pant crisis, which cost the company millions and resulted in the departure of its then-CEO. Shareholder activists and law firms allege that the company misled investors with its big earnings while failing to inform them of the cost-cutting that may have been a factor in the decreased quality of the products. To add insult to injury, a Macquarie analyst and self-described "heavy user" of its products has released a report suggesting overall customer satisfaction is deteriorating. The analyst cited hundreds of product reviews, wherein one-third of the customers rated the products with 1 or 2 stars out of 5. The issues weren't just regarding see-through pants, but factors such as poor sweat absorption -- a key factor for sports apparel.

With above-average prices and an already fragile brand name, Lululemon cannot afford a significant drop in consumer confidence, especially with increasing competition.

In the meantime, the company's stock still maintains a market-darling valuation -- nearly 26 times forward earnings and an EV/EBITDA of 20.63 times.

Multiple correction, or earnings fallout? 
If Lululemon is unable to sustain its lofty multiples, investors risk substantial downside. If the company were to trade more along the lines of Nike (obviously a much more diversified, mature enterprise), around 18 times forward earnings, that would imply a price around $46 per share -- a 30% discount to today's market price. That even includes an optimistic forecast for the fiscal year ended January 2015.

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The stock is subject to earnings revisions and a change in market perception -- a double downer for investors. It appears that Lululemon's stock is priced for best-case scenarios -- a tough investment thesis if you're trying to cover your rear end.

More advice from The Motley Fool
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Is Zynga Finally Becoming One of the Market’s Better Investment Opportunities?

For a long time, "gaming" usually meant either gambling or indulging in a first-person shooter video game. Only the nerdy few daring enough to try role-playing games such as Dungeons & Dragons thought differently.

Now the dynamic is changing, creating one of the market's more interesting investment opportunities. Consider Google (NASDAQ: GOOG  ) , which is enjoying a huge audience for its YouTube custom channels thanks to niche programming such as TableTop, a bi-weekly show about board and role-playing games hosted by Wil Wheaton. Overall sales of hobby store games rose 15% last year after a 20% rise the year prior, according to data from ICv2.

The shift comes as social video gaming is becoming more popular, says Tim Beyers of Motley Fool Rule Breakers and Motley Fool Supernova in the following video. More than 15 million play the popular 8-bit adventure game Minecraft. Yet no company stands to profit so much from the trend as Zynga (NASDAQ: ZNGA  ) , which serves some 34 million monthly users in its signature social game FarmVille 2.

CEO Mark Pincus will have to commission new titles to appeal to the tabletop crowd. Activision Blizzard still rules online group adventure gaming via World of Warcraft, after all. But imagine if he does. Zynga benefits from the reach of Facebook's global platform -- a huge advantage that, if leveraged correctly, could play very well for the beleaguered gamer, Tim says.

Do you agree? Please watch to get Tim's full take, and then let us know whether you believe Zynga is one of the market's top investment opportunities now and why.

It's your move
Too many wonder if it's already "game over" for Zynga. Yet this stock story isn't as simple as it seems. Learn everything you need to know about Zynga and whether it's a buy or a sell in our new premium research report. Don't even think about picking up shares before you read what our top analysts have to say. Click here to access your copy.

Best Penny Stocks To Own For 2014

If you've been joining our twice-a-week get-togethers over at Strategic Tech Investor, you know that I'm a focused and disciplined investor - and that I ignore fads and refuse to chase "hot tips."

I'm also very price-sensitive: Although I'm hunting for stocks capable of delivering "moonshot" price gains, I won't pay a penny more than my charts or "black box" system tells me they're worth.

To enforce that discipline - and to help pass along to you all that I've learned through the years - I developed the set of five rules that we talk about here each week.

But one of my best tools is also one of my simplest. It's a roster of companies whose stocks I'd someday like to own, but that don't currently meet my stringent criteria.

I call it my "Watch List."

And through the years, this simple shopping list for stocks has ended up delivering some of my all-time biggest winners...

When Patience Can Double Your Money

The sell-off after the credit crisis of 2008-2009 was the biggest bear market since the Great Depression.

Best Penny Stocks To Own For 2014: Sirius XM Radio Inc.(SIRI)

Sirius XM Radio Inc. provides satellite radio services in the United States and Canada. It broadcasts a programming lineup of approximately 135 channels of commercial-free music, sports, news and information, talk and entertainment, traffic, and weather on subscription fee basis through two satellite radio systems in the United States; and holds an interest in the satellite radio services offered in Canada. The company also simulcasts music and selected non-music channels over the Internet; and offers applications to allow consumers to access its Internet services on mobile devices. As of December 31, 2010, it had 20,190,964 subscribers. In addition, the company designs, establishes specifications, sources or specifies parts and components, and manages various aspects of the logistics and production of satellite radios; licenses its technology to various electronics manufacturers to develop, manufacture, and distribute radios under various brands; and imports radios distri buted through its Websites. The company?s satellite radios are primarily distributed through automakers, retailers, and its Websites. Further, it provides music services for commercial establishments; a satellite television service to offer music channels as part of certain programming packages on the DISH Network satellite television service; music and comedy channels to mobile phone users through mobile phone carriers; Backseat TV, a service offering television content designed primarily for children in the backseat of vehicles; Travel Link, a suite of data services that include graphical weather, fuel prices, sports schedules and scores, and movie listings; and real-time traffic and weather services. The company was formerly known as Sirius Satellite Radio Inc. and changed its name to Sirius XM Radio Inc. in August 2008. Sirius XM Radio Inc. was founded in 1990 and is headquartered in New York, New York.

Advisors' Opinion:

• [By Rick Munarriz]

  Satellite radio is a hit, and Sirius XM Radio (NASDAQ: SIRI  ) has made the most of the situation.

  Sirius XM will report on Tuesday morning, and in this video, longtime Fool contributor Rick Munarriz looks at three things that investors will want to keep an eye on when the media giant does report.

• [By Rick Munarriz]

  Things never get dull for the country's lone satellite-radio provider. Shares of Sirius XM Radio (NASDAQ: SIRI  ) moved sharply higher this week, closing 7.7% higher to hit $3.36. The general market moved higher, but Sirius XM's gain was better than Nasdaq's 3% pop.

Best Penny Stocks To Own For 2014: Star Gas Partners L.P.(SGU)

Star Gas Partners, L.P., through its subsidiaries, operates as a home heating oil distributor and services provider in the United States. It provides its services to residential and commercial customers to heat their homes and buildings. As of March 31, 2011, the company served approximately 408,000 full-service residential and commercial home heating oil, and propane customers. It also sold home heating oil, gasoline, and diesel fuel to approximately 40,000 customers. In addition, Star Gas Partners installed, maintained, and repaired heating and air conditioning equipment, as well as provided ancillary home services, including home security and plumbing to approximately 11,000 customers. Kestrel Heat, LLC operates as the general partner of the company. Star Gas Partners, L.P. was founded in 1995 and is headquartered in Stamford, Connecticut.

Advisors' Opinion:

• [By Rich Smith]

  Stamford, Conn.-based Star Gas Partners (NYSE: SGU  ) is about to get a new CEO.

  The company (which, despite the name, actually spends more time delivering oil than gas for home heating), announced Tuesday that Chief Executive Officer Dan Donovan intends to retire on Sept. 30. When that happens, Chief Operating Officer Steve Goldman will move up to take the CEO's chair.

Best Cheap Stocks To Invest In 2014: China Sky One Medical Inc.(CSKI)

China Sky One Medical, Inc., through its subsidiaries, engages in the development, manufacture, marketing, and sale of over-the-counter, branded nutritional supplements, and over-the-counter plant and herb-based pharmaceutical and medicinal products primarily in the People?s Republic of China. The company?s product line includes ointments, sprays, medicated skin patches, injections, capsules, suppositories, tablets, and granules. It offers compound camphor cream that is used for the treatment of various pathogens on the skin surface, such as mycete, trichopytic, staphylococcal bacteria aureus, bacillus coli, and candida albicans; Hemorrhoids ointment, which is made in soft ointment form and is effective in sterilizing and relieving hemorrhoid symptoms, including itching, distending pain, burning, and bleeding; Sumei slim patch, a natural treatment for weight loss; and pain relief patch used for various ailments, including fever, headache, heart dysentery, diarrhea, and sti ffness and pain caused by hypertension. China Sky One also provides anti-hypertension patch that stimulates blood capillaries, improves circulation, and reduces blood pressure; QiXue asthma patch, which is designed for the treatment of chronic inflammation of the airways and lungs; Stomatitis spray used for the treatment of dental ulcers, pharyngitis, and faucitis; Naphazoline Hydrochloride eye drops for the temporary relief of eye redness associated with minor irritations; cardiac arrest early examination kit used for early stage diagnosis of myocardial infarction; and Naftopidil dispersible tablet designed to treat benign enlargement of the prostate among middle age males, as well as various wash fluids, tablets, liniments, syrups, capsules, granules, injections, aerosols, and oral liquids. The company sells its products through Chinese domestic pharmaceutical chains. China Sky One Medical, Inc. is headquartered in Harbin, the People?s Republic of China.

Best Penny Stocks To Own For 2014: (COTE)

Coates International, Ltd. engages in the development of Coates spherical rotary valve (CSRV) system technology for use in piston-driven internal combustion engines. The CSRV system technology is designed to replace the intake and exhaust conventional poppet valves used in various piston-driven stationary, automotive, truck, motorcycle, marine, and electric power generator engines. The CSRV system technology is used in various applications, including engines for electric generators for home use, industrial complexes, and grid installations; and engines to power motorcycles, automobiles, light trucks, heavy trucks, machinery, railroads, marine engines, military equipment, light aircraft, helicopters, lawn mowers, snowmobiles, and jet skis. The company holds the licensing rights for the CSRV system technology in North America, Central America, and South America. Coates International, Ltd. was founded in 1988 and is based in Wall Township, New Jersey.

Best Penny Stocks To Own For 2014: Full House Resorts Inc.(FLL)

Full House Resorts, Inc., together with its subsidiaries, develops, manages, invests in, and owns gaming-related enterprises. The company holds interest in Gaming Entertainment (Delaware), LLC, a joint venture with Harrington Raceway, Inc., which has a management contract with Harrington Raceway and Casino that has approximately 1,800 slot machines and 40 table games, a 450-seat buffet, a dining restaurant, a 50-seat diner, and an entertainment lounge area located in Harrington, Delaware. It also owns and operates Stockman?s Casino, which has approximately 264 slot machines, 4 table games, and keno, as well as a bar, a dining restaurant, and a coffee shop situated in Fallon, Nevada. In addition, the company holds interests in Gaming Entertainment Michigan, LLC that has a joint venture with RAM Entertainment, LLC, which has a management agreement with the Nottawaseppi Huron Band of Potawatomi Indians for the development and management of the FireKeepers Casino in Battle Cre ek, Michigan. Full House Resorts, Inc. was founded in 1987 and is based in Las Vegas, Nevada.

Best Penny Stocks To Own For 2014: Micron Technology Inc.(MU)

Micron Technology, Inc., together with its subsidiaries, engages in the manufacture and marketing of semiconductor devices worldwide. Its products include dynamic random access memory (DRAM) products that provide data storage and retrieval, which include DDR2 and DDR3; and other specialty DRAM memory products, including DDR, SDRAM, DDR and DDR2 mobile low power DRAM, pseudo-static RAM, and reduced latency DRAM. The company also offers NAND flash memory products, which are electrically re-writeable and non-volatile semiconductor devices that retain content when power is turned off. In addition, it provides NOR flash memory products that are electrically re-writeable and non-volatile semiconductor memory devices; phase change memory products; and image sensor products. Micron Technology?s products are used in a range of electronic applications, including personal computers, workstations, network servers, mobile phones, flash memory cards, USB storage devices, digital still c ameras, MP3/4 players, and in automotive applications. It sells its products to original equipment manufacturers and retailers through internal sales force, independent sales representatives, and distributors, as well as through a Web-based customer direct sales channel. The company was founded in 1978 and is headquartered in Boise, Idaho.

Advisors' Opinion:

• [By Dan Caplinger]

  On Wednesday, Micron Technology (NASDAQ: MU  ) will release its latest quarterly results. After years of struggling through tough conditions in the memory-chip space, Micron has finally made investors happy, with its stock rising to levels not seen since before the stock market's 2008 meltdown.

Best Penny Stocks To Own For 2014: Westinghouse Solar Inc.(WEST)

Westinghouse Solar, Inc. engages in the design, manufacture, integration, and installation of solar power systems under the Westinghouse name. It offers its solar power systems for residential and commercial customers. The company also designs and distributes solar panels with integrated micro inverters (called as AC solar panels). The company sells its AC solar panels to solar installers, trade workers, and do-it-yourself customers through distribution partnerships, dealer network, and retail outlets. It has a strategic partnership with Real Goods Solar, whereby Real Goods Solar operates as an authorized dealer for westinghouse solar power systems for sale to its customers in California and Colorado markets. The company was formerly known as Akeena Solar, Inc. and changed its name to Westinghouse Solar, Inc. on Apr 14, 2011. Westinghouse Solar, Inc. was founded in 2001 and is headquartered in Campbell, California.

Advisors' Opinion:

• [By Bryan Murphy]

  It's fun to be right, but that doesn't always mean it's fruitful. I was right about Westinghouse Solar Inc. (OTCMKTS:WEST) being a breakout candidate when I explained the chart's most likely technical outcome. Though it took a little more than a week for WEST to actually perform as expected, it got there. Problem: It got there in spades, solving one problem but creating another. Though I'm still bullish on this solar play, we need a new roadmap.

• [By John Udovich]

  Small cap solar stock Andalay Solar Inc (OTCMKTS: WEST) has largely cratered for investors�verses solar stock peers Real Goods Solar, Inc (NASDAQ: RSOL) and SolarCity Corp (NASDAQ: SCTY), but is the company finally turning itself around after a failed deal to be acquired?

Best Penny Stocks To Own For 2014: (NVDL)

NovaDel Pharma Inc., a specialty pharmaceutical company, develops oral spray formulations for marketed pharmaceuticals. The company?s proprietary technology enables delivery of drugs into the bloodstream leading to onset of action and patient benefits. Its oral spray candidates target angina, insomnia, erectile dysfunction, migraine headaches, and nausea. NovaDel Pharma?s marketed products include NitroMist for acute relief of an attack of angina pectoris, or acute prophylaxis of angina pectoris, due to coronary artery disease; and ZolpiMist for short-term treatment of insomnia. The company?s product candidates comprise Duromist, which is in preclinical development for erectile dysfunction; Zensana, which is in preclinical development for nausea; NVD-201, an oral spray formulation of sumatriptan in Phase 2/3 clinical trial to treat migraine headache; NVD-301, an oral spray formulation of midazolam in preclinical stage for the treatment of sedation during diagnostic, therap eutic, and endoscopic procedures; and ZolpiMist in Phase 1 clinical trial to treat middle of the night awakening. It has strategic license agreements with Talon Therapeutics, Inc., Kwang Dong Pharmaceuticals, and BioAlliance Pharma SA to develop and market Zensana; Manhattan Pharmaceuticals, Inc. for the company?s oral spray technology to deliver propofol for pre-procedural sedation; and Velcera Pharmaceuticals, Inc. for veterinary applications for marketed veterinary drugs. NovaDel Pharma also has agreements with Mist Acquisition, LLC, for the manufacturing and commercialization of the NitroMist lingual spray version of nitroglycerine; and ECR Pharmaceuticals Company, Inc. to manufacture and commercialize ZolpiMist. The company was formerly known as Flemington Pharmaceutical Corporation and changed its name to NovaDel Pharma Inc. in October 2002. NovaDel Pharma Inc. was founded in 1982 and is headquartered in Bridgewater, New Jersey.

Ex-Microsoft manager accused of insider trading

SEATTLE (AP) — Federal authorities filed criminal and civil charges Thursday against a former Microsoft manager, saying he fed inside information to a day trader who used it to clear $393,000 in illicit transactions.

Brian Jorgenson, 32, was a senior manager in Microsoft's Treasury Group when he provided the information to his friend Sean Stokke, 28, according to documents filed in U.S. District Court in Seattle. They're accused of trading on three corporate developments: two recent quarterly earnings reports, and Microsoft's 2012 investment in Barnes & Noble.

"Brian's approach to this is, he needs to make it right," said Jorgenson's attorney, Angelo Calfo. "He made a really bad decision, and he's prepared to take his medicine."

A message seeking comment was left for Stokke's attorney, Jennifer Horwitz.

The pair planned to use the proceeds to open their own biotech hedge fund, FBI agent Kathleen Moran wrote in the criminal complaint, which charges Jorgenson and Stokke with 35 counts of insider trading.

Both confessed when questioned, Moran wrote, adding that Stokke said he had given Jorgenson about $50,000 in cash out of the proceeds, in $10,000 increments, packed into envelopes.

The pair accumulated Barnes & Noble stock options in advance of Microsoft's announcement that it was investing in the company's digital book business, the FBI said. The announcement caused Barnes & Noble's stock to jump by nearly half, and the pair made $184,000.

They're also accused of trading on Microsoft's failure to meet earnings expectations in the fourth quarter of fiscal 2013 and Microsoft's increased first-quarter profit in fiscal 2014.

"For every stock market winner, there is a loser, and trading on confidential inside information is a cheater's way of gaining at the expense of others," Seattle U.S. Attorney Jenny Durkan said in a news release. "This conduct hurts companies, hurts individuals, and shakes faith in our financial markets.

Jorgenson, a marr! ied father of four from the north Seattle suburb of Lynnwood, joined Microsoft in January 2011. He is hoping to be allowed to speak to Microsoft employees to share his cautionary tale, Calfo said. Jorgenson expects to plead guilty in a deal with prosecutors, the lawyer said.

Microsoft said in a written statement that the company has no tolerance for insider trading. "We helped the government with its investigation and terminated the employee," the statement said.

The Securities and Exchange Commission filed related civil charges. The agency is seeking unspecified penalties and restitution from Jorgenson and Stokke, and seeks to have Jorgenson barred against serving as an officer or director of any public company.

"Abusing access to Microsoft's confidential information and generating unlawful trading profits is not a wise or legal business model for starting a hedge fund," Daniel Hawke, head of the SEC enforcement division's market abuse unit, said in a statement.

Follow Gene Johnson on Twitter @GeneAPseattle .

AP Business Writer Marcy Gordon in Washington, D.C., contributed to this report.

Is Broadwind Energy Inc (BWEN) Blowing Hot Air at Investors? FAN, VWDRY & MY

Small cap wind stock Broadwind Energy Inc (NASDAQ: BWEN) is up 203.7% since the start of the year, but investors might want to contain their excitement when they look closer at the stock and consider its long term performance along with the performance of other wind investments like First Trust Global Wind Energy ETF (NYSEARCA: FAN) and wind energy stocks Vestas Wind Systems (OTCMKTS: VWDRY) and China Ming Yang Wind Power Group Ltd (NYSE: MY) to see whether BWEN is just blowing more hot air.

What is Broadwind Energy Inc?

Small cap wind stock Broadwind Energy provides products and services in three segments: 1) Towers and Weldments, 2) Gearing and 3) Services. More specifically, the Towers and Weldments segment specializes in the production of wind turbine towers; the Gearing segment engineers, builds and remanufactures precision gears and gearing systems for wind, oil and gas, mining and other industrial applications; and the Services segment offers a range of services primarily to wind farm developers and operators.

As for wind stock or investment peers, the First Trust Global Wind Energy ETF tracks the ISE Global Wind Energy Index through 49 holdings; Vestas Wind Systems is a Denmark-based company that is the largest wind turbine maker in the world; and China Ming Yang Wind Power Group Ltd is a China based designer, manufacturer, seller and servicer of megawatt-class wind turbines and integrated solutions of clean energy. 

What You Need to Know About or Be Warned About Broadwind Energy Inc

Broadwind Energy appears to have started moving higher this year thanks to a steady stream of announcements about new orders. In fact and since the start of 2013, the company has recorded $306 million in new tower orders with the latest being $106 million in tower orders from a US wind turbine manufacturer.

At the end of October, Broadwind Energy reported a 13% third quarter sales increase to $62.4 million thanks to continued strength in the Towers and Weldments segment (a 30% sales increase to $48.7 million) that was partly offset by weaker results in the Gearing and Services segments. The CEO noted:

"Internally, we are working to minimize the operational impact of the plant consolidation, which is on track. Gearing results were below expectations as we continue to grapple with productivity issues stemming from a mix of more complicated gearboxes versus loose gearing. Externally, Gearing revenues continue to be impacted by weak demand from customers in the mining sector."

And:

"In our Services segment, we saw some recovery from a weak first half. However, sales and earnings continue to lag behind the prior year due mainly to low turbine construction activity and lower gearbox repair activity."

In response, Broadwind Energy has been making process and management changes in the Gearing segment and the CEO predicts improvement in the fourth quarter plus the company is focused on better leveraging precision gearing expertise and service experience to meet emerging customer preferences for uptower gearbox repair services. Net loss from continuing operations came in at $2.6 million or $.18 per share verses a loss of $3.9 million or $.28 per share plus cash and equivalents rose to $24.0 million as of September 30 – meaning the company is not endangered from running out of money.

Finally, it should be noted that Broadwind Energy has reported positively trending revenues of $210.71M (2012), $185.85M (2011), $136.90M (2010) and $184.80M (2009) for the past four years along with increasingly smaller net losses of $17.91M (2012), $21.95M (2011), $85.17M (2010) and $110.12M (2009).

Share Performance: Broadwind Energy Inc vs. FAN, VWDRY & MY

On Monday, small cap Broadwind Energy rose 4.96% to $6.56 (BWEN has a 52 week trading range of $2.00 to $10.43 a share) for a market cap of $95.53 million plus the stock is up 203.7% since the start of the year and down 92.1% over the past five years. Here is a look at the one year and long term performance of Broadwind Energy along with the First Trust Global Wind Energy ETF and wind stock peers Vestas Wind Systems and China Ming Yang Wind Power Group Ltd:

As you can see from the above chart, wind stocks have been ugly investments for investors over the long haul.

Nevertheless, the technical charts are looking better:

The Bottom Line. Certainly, small cap wind stock Broadwind Energy is on more stable ground now than in the past and might just be worth a closer look, but it remains to be seen whether long term investors have any hopes of recouping their losses in the near future. 

Keep On Keepin’ On: Dow Gains 130 Points Ahead of Fed

With International Business Machines (IBM), Cisco Systems (CSCO), and Exxon Mobil (XOM) streaking, the major benchmarks didn’t just extend their winning streak to two days, they did it with style.

David Clifford for the Wall Street Journal

The Dow Jones Industrial Average gained 129.21 points, or 0.8%, to 15,884.57 today thanks to big gains in International Business Machines, which gained 2.9% to $177.85, Cisco Systems, which rose 2.2% to $20.68 after S&P raised its credit rating, and Exxon Mobil, which was upgraded by Goldman Sachs. The S&P 500 rose 0.6% to 1,786.54, as Allergan (AGN) gained 3.8% after last week’s Credit Suisse upgrade, and Tesoro (TSO) advanced 3.7% to $58.37.

The major averages got a boost from solid economic data that showed the U.S. economy, you know, improving. Of course, it remains to be seen whether this pickup in economic growth proves sustainable or just another head fake as in previous years. Really though, it doesn’t matter what you or I think, it’s up to the Fed, who will meet tomorrow and Wednesday and decide whether or not it will start the taper.

Mizuho Securities USA’s Steven Ricchiuto says that it would be a mistake to begin tapering now. He writes:

There is a growing perception that the economy is headed towards a self-sustaining growth trajectory in 2014 and therefore higher long term rates are justified. This pro-cyclical story rests largely on the view that a reduced fiscal drag in 2014 will allow the underlying improvement in the economy to show through. Now that it looks as if a budget compromise has been achieved, this is seen as further reducing the uncertainty that depressed 2013 growth. Our more cautious view on the economy stresses the ongoing household sector balance sheet restructuring and its negative effect on banks as the reason why 2014 will be another disappointing year despite the last two jobs reports. Moreover, we see the reduced fiscal drag in 2014 as fully offset by a shift to inventory liquidation next year.

No matter. Piper Jaffray’s Michael Cox and Steph Wissink see stocks heading higher next year:

As 2013 comes to a close we look back on the year with a profound sense of satisfaction. Despite a rising interest rate environment, the U.S. Federal Government shutdown and concerns surrounding a tapering of QE, the S&P 500 is close to its all-time high of 1813 reached in November. And now as we look ahead to 2014, we remain bullish on the equity markets and see a continuation of the secular rotation out of fixed income assets into equities…

We suspect this year's 100 basis point rise in the benchmark 10-year U.S. bond yield will lead investors to increase their equity exposure (specifically blue chip, dividend paying equities) early in 2014 to hedge against rising interest rates as the Fed begins to taper its bond buying (quantitative easing, or QE). A such, the broader market can still move higher despite a rising interest rate environment in part due to an improving macroeconomic backdrop and low inflation coupled with a steepening of the yield curve.

Top Blue Chip Stocks To Watch Right Now

RBC Capital Markets’ Jonathan Golub and Manish Bangard tell investors to let their winners run:

At the beginning of each year, investors ask themselves whether they should buy last year's losers (underperforming stocks) or let their winners run. Given the strong returns in 2013, this debate is even more heated this time around. We're clearly on the side of letting the winners run in 2014.

We believe that this will play out for two reasons: first, 2013's high flyers haven't flown too close to the sun and they don't look problematically expensive; and second, sectors that have worked in the back half of 2013 are likely to deliver stronger earnings fundamentals.

In other words, keep on keepin’ on.

Top 10 Value Companies To Buy Right Now

Peter Foley/Bloomberg Carson Block, founder of Muddy Waters LLC, speaks during a Bloomberg Television interview in New York on July 17, 2013.

Never before has the unveiling of a Carson Block short sale done less to sway investors.

American Tower Corp. (AMT) fell 1.1 percent to $73.87 yesterday, the smallest first-day drop ever in a stock after a report from Muddy Waters Research, which built its reputation with bearish calls on Asian companies. New Oriental Education & Technology Group Inc., Focus Media Holding Ltd. and Sino-Forest Corp. lost at least 20 percent after previous Muddy Waters notes.

Investors in the operator of cell-phone antennas were unshaken by Block�� analysis and firms from Wells Fargo & Co. to Macquarie Group Ltd. said they disagreed. Block said yesterday that American Tower is worth 40 percent less than its share price because it overstated the value of its acquisitions and has poor corporate governance.

Top 10 Value Companies To Buy Right Now: Dollar Tree Inc.(DLTR)

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

Advisors' Opinion:

• [By Ben Eisen]

  Perpetually struggling department store J.C. Penney Co. (JCP) �said it expects a sales boost this holiday season as it returns to a promotional strategy. But for the most part, retailers including Dollar Tree Inc. (DLTR) �, GameStop Corp. (GME) � and Abercrombie & Fitch Co. (ANF) � gave dour outlooks in their earnings reports.

• [By Rich Duprey]

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

• [By Brendan Byrnes]

  Brendan: Not a problem at all. What about the surprising amount of dollar-store companies that are public? You have Family Dollar (NYSE: FDO  ) , Dollar Tree (NASDAQ: DLTR  ) , Dollar General (NYSE: DG  ) . You mention, in particular, Family Dollar, which is the lowest market cap out of all of those, as doing the best, an exceptional company. Why?

Top 10 Value Companies To Buy Right Now: Tupperware Corporation(TUP)

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

Advisors' Opinion:

• [By Brian Pacampara]

  Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, household products company Tupperware Brands (NYSE: TUP  ) has earned a coveted five-star ranking.

Hot Penny Stocks To Buy For 2014: Caterpillar Inc.(CAT)

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

Advisors' Opinion:

• [By Dan Caplinger]

  What it means for the Dow
  Japan's drop recently has come on the heels of slowing economic growth in China, which remains a lucrative potential market that could help the Japanese economy bolster its own growth. The declines that U.S. investors have seen in Caterpillar (NYSE: CAT  ) and Alcoa (NYSE: AA  ) lately are just one symptom of the downturn in China, but they demonstrate the challenges that Japanese manufacturing stocks face in taking maximum advantage of the emerging-market opportunity there.

• [By Dan Carroll]

  The same can't be said of another big loser on the Dow, industrial giant Caterpillar (NYSE: CAT  ) . This stock has been hammered over the course of 2013, and shares are down a further 1.7% today. China's slowdown has crippled Caterpillar's fortunes, and the country's disappointing GDP report showing only 7.7% growth in the first quarter didn't help the company's outlook.

Top 10 Value Companies To Buy Right Now: Schlumberger N.V.(SLB)

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

Advisors' Opinion:

• [By Maxx Chatsko]

  Industry ties
  The company's management team has deep roots in the energy industry, specifically in oilfield services. President and CEO Gary Kolstad spent 21 years at Schlumberger (NYSE: SLB  ) before joining CARBO, while Don Conkle, vice president of marketing and sales, spent 26 years at the same firm. No wonder Schlumberger is one of the top two customers for this proppant manufacturer. Both served in various roles at the company and are well versed in the ebbs and flows of the energy industry, which should serve investors well through the rocky environment of falling natural gas drilling activity.

• [By David Smith]

  Similarly, the company's forward dividend yield could stand some boosting, another possibility made more feasible by an acquisitions slowdown. Currently, however, with a forward yield of 0.80%, Varco falls short of such other big oilfield services providers as Schlumberger (NYSE: SLB  ) , with its 1.80% forward yield, or Baker Hughes (NYSE: BHI  ) , at 1.40%. On that basis, it would constitute a distinct positive to see National Oilwell Varco's own anticipated yield raised to at least 1.00%, a level that would hardly result in an arduous payout for the company.

• [By Matt DiLallo]

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

• [By Arjun Sreekumar]

  For instance, though oilfield services firms Schlumberger (NYSE: SLB  ) and Halliburton (NYSE: HAL  ) have shown a keen interest in developing China's shale resources, the absence of clearly defined and enforceable patent and property protection laws has given them reason to pause. �

Where Will Johnson & Johnson Go Next?

With shares of Johnson & Johnson (NYSE:JNJ) trading around $91, is JNJ an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

Johnson & Johnson engages in the research and development, manufacturing, and sale of various products in the health care field worldwide. The company operates in three segments: Consumer, Pharmaceutical, and Medical Devices and Diagnostics. The company offers a range of products used in general care, women's health fields, nutritional and anti-infective, contraceptive, gastrointestinal, oncology, pain management, and vaccines. It also offers products to treat cardiovascular disease, orthopedic and neurological products, blood glucose monitoring and insulin delivery products, and general surgery products. Through its wide variety of health care products, Johnson & Johnson is able to support consumers and medical businesses around the world that continue to demand improved products.

Castleman disease is an uncommon disease of the lymph nodes that acts much like a cancer and causes large swelling in the lymph nodes. Until recently it has had no therapies — but now a drug trial from Johnson & Johnson is showing true promise, according to Bloomberg. The drug being experimented with, Siltuximab, showed promising results in trials with patients.

T = Technicals on the Stock Chart Are Strong

Johnson & Johnson stock has been exploding to the upside in the past several years. However, the stock is currently pulling back as it digests gains. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, Johnson & Johnson is trading between its rising key averages, which signal neutral price action in the near-term.

(Source: Thinkorswim)

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

	Implied Volatility (IV)	30-Day IV Percentile	90-Day IV Percentile
Johnson & Johnson options	16.61%	96%	93%

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

	Put IV Skew	Call IV Skew
December Options	Average	Average
January Options	Average	Average

As of today, there is an average demand from call and put buyers or sellers, all neutral over the next two months. To summarize, investors are buying a very significant amount of call and put option contracts and are leaning neutral over the next two months.

On the next page, let’s take a look at the earnings and revenue growth rates and the conclusion.

E = Earnings Are Mixed Quarter-Over-Quarter

Rising stock prices are often strongly correlated with rising earnings and revenue growth rates. Also, the last four quarterly earnings announcement reactions help gauge investor sentiment on Johnson & Johnson’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for Johnson & Johnson look like and more importantly, how did the markets like these numbers?

	2013 Q3	2013 Q2	2013 Q1	2012 Q4
Earnings Growth (Y-O-Y)	-0.95%	166.00%	-13.48%	1050.00%
Revenue Growth (Y-O-Y)	3.11%	8.51%	8.46%	8.02%
Earnings Reaction	0.14%	0%	2.11%	-0.51%

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

P = Excellent Relative Performance Versus Peers and Sector

How has Johnson & Johnson stock done relative to its peers, Pfizer (NYSE:PFE), Covidien (NYSE:COV), Novartis (NYSE:NVS), and sector?

	Johnson & Johnson	Pfizer	Covidien	Novartis	Sector
Year-to-Date Return	28.38%	18.99%	24.70%	21.38%	24.36%

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

Conclusion

Johnson & Johnson provides valuable and essential health care products and services to many consumers and companies operating worldwide. The company is working on a drug trial for people with Castleman disease. The stock has been has been trending higher in the last several years, but is currently pulling back. Over the last four quarters, earnings have been mixed while revenues have been rising, which has led to positive feelings among investors about recent earnings announcements. Relative to its peers and sector, Johnson & Johnson has been a year-to-date performance leader. Look for Johnson & Johnson to OUTPERFORM.

Can Microsoft Continue to Outperform?

With shares of Microsoft (NASDAQ:MSFT) trading around $37, is MSFT an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

Microsoft is engaged in developing, licensing, and supporting a wide range of software products and services. The company also designs and sells hardware and delivers online advertising to customers. It operates in five segments: Windows and Windows Live, Server and Tools, Online Services Division, Microsoft Business Division, and Entertainment and Devices. As a mature company, Microsoft is also offering a stable dividend, which is currently yielding around 3.32 percent annually.

Microsoft has released the latest sales numbers for the new Xbox One video game console, saying that it took 18 days for the device to sell more than 2 million units. The latest data again place the Xbox One neck and neck with Sony's (NYSE:SNE) competing PlayStation 4. Last week, Sony released its sales figures for the new PlayStation, and as of December 1, the company had sold 2.1 million consoles. "We continue to be humbled and overwhelmed by the positive response from our fans. We are thrilled to see sales of Xbox One on a record-setting pace, with over 2 million Xbox One consoles in homes around the world. Demand is exceeding supply in our 13 launch markets and Xbox One is sold out at most retailers," said Yusuf Mehdi, Xbox's corporate vice president of strategy and marketing, in the company's announcement.

T = Technicals on the Stock Chart Are Strong

Microsoft stock has seen its fair share of volatility in the last couple of years. The stock is currently trading sideways and may need time to consolidate before heading higher. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, Microsoft is trading above its rising key averages, which signal neutral to bullish price action in the near-term.

(Source: Thinkorswim)

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

	Implied Volatility (IV)	30-Day IV Percentile	90-Day IV Percentile
Microsoft options	29.52%	93%	90%

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

	Put IV Skew	Call IV Skew
December Options	Flat	Average
January Options	Flat	Average

As of today, there is an average demand from call buyers or sellers and low demand by put buyers or high demand by put sellers, all neutral to bullish over the next two months. To summarize, investors are buying a very significant amount of call and put option contracts and are leaning neutral to bullish over the next two months.

On the next page, let’s take a look at the earnings and revenue growth rates and the conclusion.

E = Earnings Are Mixed Quarter-Over-Quarter

Rising stock prices are often strongly correlated with rising earnings and revenue growth rates. Also, the last four quarterly earnings announcement reactions help gauge investor sentiment on Microsoft’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for Microsoft look like and more importantly, how did the markets like these numbers?

	2013 Q3	2013 Q2	2013 Q1	2012 Q4
Earnings Growth (Y-O-Y)	-3.08%	11.94%	20.00%	-2.56%
Revenue Growth (Y-O-Y)	7.36%	10.17%	17.71%	2.78%
Earnings Reaction	5.96%	-10.85%	3.36%	0.90%

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

P = Excellent Relative Performance Versus Peers and Sector

How has Microsoft stock done relative to its peers, Apple (NASDAQ:AAPL), Oracle (NASDAQ:ORCL), Google (NASDAQ:GOOG), and sector?

	Microsoft	Apple	Oracle	Google	Sector
Year-to-Date Return	39.68%	6.07%	7.86%	57.34%	28.73%

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

Conclusion

Microsoft is a technology company that provides valuable software products and services to consumers and companies worldwide. The company released the latest sales numbers for the new Xbox One video game console, saying that it took 18 days for the device to sell more than 2 million units. The stock has been moving higher in recent years, but is now trading sideways. Over the last four quarters, earnings have been mixed while revenues have been rising which has left investors pleased about the company. Relative to its peers and sector, Microsoft has been a year-to-date performance leader. Look for Microsoft to OUTPERFORM.

Consumer Ratings of America’s Top Four Banks

The American Customer Satisfaction Index has released its ranking of the nation’s top four banks which include JPMorgan Chase (NYSE: JPM), Citigroup (NYSE: C), Wells Fargo (NYSE: WFC), and Bank of America (NYSE: BAC)

The ACSI reports:

Among the four largest banks, JPMorgan Chase maintains the lead following a 3% gain to an
CSI benchmark of 76. The improvement in customer satisfaction comes at a time when
JPMorgan negotiated a record $13 billion civil settlement with the government related to the
subprime mortgage crisis. The ACSI retail banking does not include mortgages and investment
products and what happened did not affect checking and savings account holders. For now,
improved customer service and new and remodeled branches help keep JPMorgan on top.

 

Among the largest four banks, JPMorgan Chase maintains
the lead with a 3% gain to 76, while Citigroup jumps 6% to 74, and Wells Fargo edges up 1%
to 72. Bank of America registers its largest improvement in a decade (+5% to 69) but remains
in last place, and is the only bank that has yet to restore its pre-recession level of customer
satisfaction.

And "Even though banks have raised fees again, the 15th straight year of such increases, no negative
repercussions have been detected regarding customer satisfaction," says Claes Fornell, ACSI
founder and chairman.  "In part, this is because a fair number of consumers are changing
their behavior to avoid the fees by exclusively using their own bank's ATMs and maintaining
sufficiently large account balances." The methodology: The American Customer Satisfaction Index (ACSI) is a national economic indicator of customer
evaluations of the quality of products and services available to household consumers in the
United States. The ACSI uses data from interviews with roughly 70,000 customers annually
as inputs to an econometric model for analyzing customer satisfaction with more than 230
companies in 43 industries and 10 economic sectors, as well as over 100 services, programs,
and websites of federal government agencies.

Neurometrix Bullishness Officially Becomes a Paradigm Shift (NURO)

My recent love affair with Neurometrix Inc. (NASDAQ:NURO) hasn't exactly been a veiled secret. I first pointed out this diabetes-diagnostics stock was working on a technical breakout effort in early October, and I penned two more bullish-progress reports on NURO in November. Yet, the Neurometrix rally is still in its infancy, when you take a step back and look at the bigger weekly chart.

For those not familiar with it, NURO makes diabetic-neuropathy equipment. Neuropathy is, in simplest terms, damage done to nerve cells due to a chronic ailment. Diabetes is one such ailment, causing a specific form of neuropathy.  Neurometrix Inc. has designed and now manufactures and sells two pieces of medical equipment to treat diabetes-born neuropathy... the NC-Stat/DPN Check, and the Sensus device. The NC-Stat measures the extent of (or existence of) neuropathic damage, while the Sensus device uses electrotherapy to reduce or eliminate pain in diabetics' lower legs and feet.

The hardware is secondary at this point, however. Oh, the Sensus and the DPN Check devices remain the meat and potatoes for the company, and is the long-term core any stock-related commentary that could be made. Right now, however, the big news is the encouraging shape of the Neurometrix chart, which has gone from good to great over the course of the past month or so.

If you happened to catch my very first commentary (and/or any of the subsequent commentaries) on NURO, then you may recall this stock signaled a brewing breakout by (1) crossing above the 100-day moving average line for the first time in months, and (2) by pushing above a key falling, straight-line resistance. I pointed out more technical progress from Neurometrix Inc. a couple more times in November. You can see how that progress got started, and then followed through, ever since I made the initial call.

So what? It's a decent daily-chart breakout, but the effort may be coming to a close soon. That's just it. While the daily chart of Neurometrix may look like it's already petering out (even today's bullish surge has given up most of the ground it's gained), taking a step back and looking at a weekly chart of NURO underscores how this past month's action is not only a short-term phenomenon, but also a long-term paradigm shift for the better. Take a look.

Almost needless to say, this is the best progress and the most bullish interest we've seen for Neurometrix Inc. in years. It's also the first time in years we've seen NURO trade above the 200-day moving average line (green) in years. It is, in simplest terms, a new era for the company and the stock.... the chart's redirection is too stark and too persistent to be much else.

The catalyst was growing credibility and marketability for the company's devices, though presentations at a handful of industry trade shows didn't hurt. Thing is, that credibility and name-recognition can only grow in the future.

Bottom line? Take the bullish technical clues form NURO at face value.

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Stocks to Watch: Conn's, Francesca's, Aeropostale

Among the companies with shares expected to actively trade in Thursday’s session are Conn's Inc.(CONN), Francesca's Holdings Corp.(FRAN) and Aeropostale Inc.(ARO)

Conn’s fiscal third-quarter earnings soared as the retailer reported broad sales growth, again led by furniture and mattress sales. The company raised its per-share earnings estimate for the year and issued a profit forecast for the upcoming year that topped analysts’ expectations. Shares rose 15% to $67.40 premarket.

Francesca’s fiscal third-quarter earnings fell 20% as same-store sales decline amid weak demand for apparel tops and jewelry. The retailer said the holiday selling season is off to a weak start and lowered its outlook for the fiscal year, sending shares down 12% to $16.00 premarket.

Aeropostale swung to a fiscal third-quarter loss as the youth-focused apparel retailer continued to struggle with falling sales and teens’ lackluster response to new style offerings. Shares fell 6% to $8.80 premarket as the company guided for a wider-than-expected fiscal fourth-quarter loss and the latest period’s results missed the company’s and Wall Street’s expectations.

Korn/Ferry International's(KFY) fiscal second-quarter profit surged due in large part to a big revenue boost in the company’s leadership and talent consulting business, as well as a favorable comparison to the year-ago period. Shares rose 5.3% to $23.70 premarket as the company’s earnings beat its expectations.

S&P Dow Jones Indices said General Growth Properties Inc.(GGP) will join the S&P 500 index, replacing Molex Inc.(MOLXA), a move that sent the real-estate investment trusts’ shares 4.3% higher to $21.15 premarket.

Barrick Gold Corp.(ABX.T), the world’s largest gold miner, announced a raft of boardroom changes Wednesday and the exit date of founder and chairman Peter Munk, as it looks to ease investors’ concerns over corporate governance at the gold-mining giant. The Toronto-based company said Mr. Munk will step down from the board at the 2014 annual meeting, which is expected around April.

Church & Dwight Co.(CHD) unveiled plans to boost its gummy vitamin production capacity by 75% by adding a new production line at its Pennsylvania facility, which is expected to be operational by early 2015.

Guess Inc.’s fiscal third-quarter earnings fell 7.2% as the apparel retailer was hurt by weaker sales, led by declines in its North America retail segment. The company also raised the lower end of its per-share earnings estimate for the year, but lowered its revenue view.

Jos. A. Bank Clothiers Inc.’s fiscal third-quarter profit grew 2.3% as the men’s clothing retailer posted stronger direct marketing sales, though same-store sales were down slightly. For the start of the fourth quarter, Chief Executive R. Neal Black said total sales, same-store sales and direct sales all increased during November, leading into the critical December sales time.

Mattress Firm Holding Corp.'s(MFRM) fiscal third-quarter earnings rose 46% as increased advertising helped drive customer traffic and sales growth. The company’s adjusted profit and revenue beat expectations.

New York & Co(NWY).’s fiscal third-quarter loss narrowed as the women’s apparel retailer recorded comparable-store-sales growth and benefited from lower costs.

Activist investor Carl C. Icahn on Wednesday disclosed he increased his stake in Nuance Communications Inc.(NUAN) by 6.5 million shares. Mr. Icahn now owns a total of 58.9 million shares in the company, or a stake of nearly 19%, according to a filing with the Securities and Exchange Commission.

Omnicare Inc.(OCR) raised its quarterly dividend by 43% and boosted its stock buyback program by $500 million in a bid to increase shareholder value.

Puma Biotechnology Inc.(PBYI) reported positive top-line data from the Phase II clinical trial of the biopharmaceutical company’s investigational drug PB272 for the neoadjuvant treatment of breast cancer.

Synopsys Inc.'s(SNPS) fiscal fourth-quarter profit nearly doubled on a top-line increase driven by growth in the company’s time-based license revenue. However, the company’s guidance for the current quarter came in below Wall Street expectations.

UTi Worldwide Inc.(UTIW) swung to a fiscal third-quarter loss as higher expenses related to its transformation efforts and other items more than offset improved freight-forwarding volume and strength in the logistics and distribution business.

Lamborghini shows off supercar on aircraft carrier

Lamborghini chose an unusual place to unveil its latest $4.5-million supercar.

The Veneno Roadster was the centerpiece of a big party on the deck of an Italian aircraft carrier in Abu Dhabi, home to many of the world's millionaires who can afford such an extravagant car.

The "Italian evening" celebration took place on the flight deck of the Italian naval aircraft carrier Nave Cavour on Sunday.

"We are honored that Lamborghini was chosen to represent the Italian car industry in the (United Arab Emirates) as a perfect example of iconic Italian super sports cars, and that we have the opportunity to show the Veneno Roadster for the first time in Abu Dhabi," says Stephan Winkelmann, CEO of Lamborghini, in a statement. "The Middle East (is) one of our largest markets in the world."

Top 5 Heal Care Stocks To Watch Right Now

Only nine of the Veneno Roadsters will be made. With a 750-horsepower, V-12 engine, it can bolt from zero to 62 miles per hour in 2.9 seconds.

So what was the party like?

The chef from Italy's Hotel Splendido in Portofino was flown in. Singer Elena Bonelli crooned the Italian national anthem. There was an Italian fashion show. And guests, which included the Italian ambassador and an admiral, took turns sitting in the car.

Tommy Belesis still faces Finra fraud complaint

Anastasios “Tommy” Belesis, who was barred Thursday from the brokerage business by the SEC on negligence charges, is still on the hot seat with Finra.

The storied chief executive of the now-defunct Wall Street brokerage John Thomas Financial Inc. continues to face an open Financial Industry Regulatory Authority Inc. fraud complaint that he bullied brokers, lied to senior staff and intimidated colleagues in his pursuit of penny stock riches. Mr. Belesis is no longer registered as a broker with Finra.

“Finra's action is ongoing,” said spokeswoman Michelle Ong, adding that the regulator's complaint against him is unchanged by the SEC's cease-and-desist order barring Mr. Belesis from conducting securities business.

The Securities and Exchange Commission on Thursday charged the high-profile chief executive, noted for his appearances on Fox Business News and a bit part in film director Oliver Stone's sequel to the movie “Wall Street,” with negligent activity.

The SEC said that Mr. Belesis' firm placed customers in two John Thomas Financial hedge funds while the funds' adviser and manager fraudulently elevated the firm's interests over those of the funds. In addition, the SEC charged him with influencing the funds' manager and adviser, forcing them to breach their fiduciary duty.

The manager “kept an appreciative Belesis apprised of his efforts” to negotiate fees for the firm, thus depriving the funds "of a material amount of money that went instead to placement fees, loans to small companies that then used the money to pay fees to JTF and for unearned bridge loan fees JTF received for performing little or no services,” the SEC said in its order.

“For example, the manager giddily wrote to Belesis in March 2010: 'We are all going to make so much f---ing money this year, the clients of John Thomas are going to have a banner year … Write yourself a check and get ready to cash it for $45 million,'” the SEC order said.

Mr. Belesis' lawyer, Ira Sorkin, on Thursday said that his client neither admitted nor denied the SEC allegations.

“There is no reference in the order that he engaged in fraudulent conduct. The fraudulent behavior was attributed to the manager of the fund, who was not named,” Mr. Sorkin said.

The Finra complaint filed in April against John Thomas Financial alleged that Mr. Belesis bullied brokers and lied to senior staff as part of a fraudulent plan to profit from a penny stock.