The Men Who Run Admiral Group

LONDON -- Management can make all the difference to a company's success, and thus its share price.

The best companies are those run by talented and experienced leaders with strong vested interests in the success of the business, held in check by a board with sound financial and business acumen. Some of the worst investments to hold are those run by executives collecting fat rewards as the underlying business goes to pot.

In this series, I'm assessing the boardrooms of companies within the FTSE 100. I hope to separate the management teams that are worth following from those that are not. Today I am looking at Admiral Group  (LSE: ADM  ) , the U.K.'s second-largest motor insurer.

Here are the key directors:

Director Position

Alistair Lyons	(non-exec) Chairman
Henry Engelhardt	Chief Executive
Kevin Chidwick	Finance Director
David Stephens	Chief Operating Officer

Alistair Lyons has been chairman since 2000, a period of time which might bring his independence into question. He became chairman of FTSE 100 outsourcer Serco in 2010 and is also chairman of unlisted insurance company Towergate and deputy chairman of FTSE 250 housebuilder Bovis. A chartered accountant, he undertook finance roles in HP Bulmer, Asda and National & Provincial Building Society, before moving up to be CEO of National & Provincial in 1994.

Founders
An American, Henry Engelhardt was a founder director of Admiral in 1993. He has led the company through its management buyout in 1999, listing in 2004, and entry into the FTSE 100 in 2007. Prior to establishing Admiral he worked in the team creating Churchill Insurance, one of the pioneers of direct insurance sales in the U.K..

Mr Engelhardt owns 14% of Admiral, which puts him into Forbes' list of billionaires.

David Stevens was brought in as a co-founder of Admiral, having been a fellow student at INSEAD. Previously he was a graduate trainee at Cadbury and a consultant with McKinsey. He owns 4% of the company despite having gifted, along with his wife who was also a co-founder of the company, £100m-worth of shares to establish a charitable trust.

Finance director
Kevin Chidwick joined Admiral in 2005 as deputy finance director, taking over the finance director role from one of the firm's founders in 2006. A chartered accountant, he had previously worked exclusively in the financial services sector, including roles at Engage Mutual, Cigna U.K., and National Australia Bank. Some operational responsibilities have led to suggestions that he is being groomed as a future CEO.

Admiral's eight-strong team of non-execs look capable of holding management to account. There is a fair proportion of insurance sector executives, including the former CEO of Direct Line insurance and a former insurance sector finance director.

Below market remuneration
The two founder directors have below-market remuneration and no pension contribution. Engelhardt's £374 thousand total remuneration in 2012 must be the lowest of any CEO in the FTSE 100.

I analyze management teams from five different angles to help work out a verdict. Here's my assessment:

1. Reputation. Management CVs and track record. Self-made.	Score 4/5
2. Performance. Success at the company. Excellent.	Score 5/5
3. Board Composition. Skills, experience, balance Strong. It might be time to change chairman.	Score 3/5
4. Remuneration. Fairness of pay, link to performance. Below-market.	Score 4/5
5. Directors' Holdings, compared to their pay. Non-founders have decent holdings too.	Score 4/5

Overall, Admiral scores 20 out of 25, a good result. Admiral's founder directors have made the company the success story it is, while a relatively newer FD and a strong non-exec team provide external perspective.

I've collated all my FTSE 100 boardroom verdicts on this summary page.

Buffett's favorite FTSE share
Legendary investor Warren Buffett has always looked for impressive management teams when picking stocks. His recent acquisition, Heinz, has long had a reputation for strong management. Indeed Buffett praised its "excellent management" alongside its high quality products and continuous innovation.

So I think it's important to tell you about the FTSE 100 company in which the billionaire stock-picker has a substantial stake. A special free report from The Motley Fool -- "The One U.K. Share Warren Buffett Loves" -- explains Buffett's purchase and investing logic in full.

And Buffett, don't forget, rarely invests outside his native United States, which to my mind makes this British blue chip -- and its management -- all the more attractive. So why not download the report today? It's totally free and comes with no further obligation.

Why Fusion-io Shares Got Destroyed

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Fusion-io (NYSE: FIO  ) got destroyed today, down by as much as 27% after the company announced a management shakeup.

So what: CEO and co-founder David Flynn has abruptly stepped down alongside his fellow co-founder Rick White in order to "pursue entrepreneurial investing activities." Both Flynn and White will remain on the board of directors as advisors for the next 12 months.

Now what: Shane Robison has been named CEO. Robison was previously a high level executive at Hewlett-Packard until November 2011. That experience will prove crucial as Fusion-io tries to further grow its presence in the enterprise storage market. Robison said the transition was not caused by any problems within the company or disagreements on strategy. The company reaffirmed its guidance, with fiscal 2013 revenue still expected to be about $435 million.

Interested in more info on Fusion-io? Add it to your watchlist by clicking here.

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Taubman Keeps Dividend Steady

Shopping-mall operator Taubman Centers  (NYSE: TCO  )  announced yesterday its second-quarter dividend of $0.50 per share, the same rate it paid last quarter after raising the payout 8%, from $0.4625 per share.

The board of directors said the quarterly dividend is payable on June 28 to the holders of record at the close of business on June 14. Taubman has paid a dividend every year since 1998, and it has steadily increased over that time period.

The board also declared quarterly dividends on two series of cumulative preferred shares, as follows:

$0.40625 per share on the 6.5% Series J, for the period April 1 through June 30 $0.46007 per share on the 6.25% Series K, for the period March 15 through June 30

The preferred dividends will be payable on June 28 to shareholders of record on June 14.

The regular dividend payment equates to a $2.00-per-share annual dividend, yielding 2.4% based on the closing price of Taubman Centers' stock on May 29.

TCO Dividend data by YCharts

Pentagon Splits Orders for Supply of Cisco, Related HD Equipment

Three firms split a $45 million U.S. Department of Defense contract to supply the Defense Media Activity department at Fort Meade, Md., with Cisco satellite decoders and HD encryption systems. Curiously, however, none of these companies was actually named Cisco (NASDAQ: CSCO  ) itself.

Instead, the winners who will compete among themselves to fulfill the $45 million firm-fixed-price, multiple-award, indefinite-delivery/indefinite-quantity contract include privately held Bluewater Communications Group LLC, small-cap Globecomm Systems (NASDAQ: GCOM  ) , and TVC Communications LLC, of Annville, Penn., a small subsidiary of larger electronics distributor WESCO International (NYSE: WCC  ) . All three will now be competing against each other to win the Pentagon's business on individual task orders for the Cisco and other HD equipment on order.

This contract exercises the "option" year on a pre-existing contract, and is expected to run through Aug. 31, 2014.

Why Boston Scientific Shares Surged

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of medical device specialist Boston Scientific (NYSE: BSX  ) climbed 12% today after its quarterly results and guidance topped Wall Street expectations. 

So what: Boston Scientific has been bruised in recent years on weak demand and market share losses, but today's second-quarter results -- adjusted EPS of $0.18 versus the consensus of $0.15 -- coupled with upbeat guidance for the full year reinforces optimism over a sustained turnaround. While sales of stents and defibrillators -- its two largest segments -- slipped yet again, the decline was much slower than in previous quarters, suggesting that top-line growth might be right around the corner.  

Now what: Management now expects 2013 EPS of $0.67 to $0.71, up from its prior view of $0.65 to $0.70, and revenue of $7.05 billion to $7.17 billion. "We are pleased with our improved performance during the quarter," said President and CEO Mike Mahoney. "As we continue to expand our portfolio, our team is inspired to deliver meaningful innovation to more patients globally." With the stock now up more than 100% over the past year, however, I'd wait for some of the turnaround excitement to fade before buying into that bullishness.  

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Albany International Passes This Key Test

There's no foolproof way to know the future for Albany International (NYSE: AIN  ) or any other company. However, certain clues may help you see potential stumbles before they happen -- and before your stock craters as a result.

A cloudy crystal ball
In this series, we use accounts receivable and days sales outstanding to judge a company's current health and future prospects. It's an important step in separating the pretenders from the market's best stocks. Alone, AR -- the amount of money owed the company -- and DSO -- the number of days' worth of sales owed to the company -- don't tell you much. However, by considering the trends in AR and DSO, you can sometimes get a window onto the future.

Sometimes, problems with AR or DSO simply indicate a change in the business (like an acquisition), or lax collections. However, AR that grows more quickly than revenue, or ballooning DSO, can, at times, suggest a desperate company that's trying to boost sales by giving its customers overly generous payment terms. Alternately, it can indicate that the company sprinted to book a load of sales at the end of the quarter, like used-car dealers on the 29th of the month. (Sometimes, companies do both.)

Why might an upstanding firm like Albany International do this? For the same reason any other company might: to make the numbers. Investors don't like revenue shortfalls, and employees don't like reporting them to their superiors.

Is Albany International sending any potential warning signs? Take a look at the chart below, which plots revenue growth against AR growth, and DSO:

Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. FQ = fiscal quarter.

The standard way to calculate DSO uses average accounts receivable. I prefer to look at end-of-quarter receivables, but I've plotted both above.

Watching the trends
When that red line (AR growth) crosses above the green line (revenue growth), I know I need to consult the filings. Similarly, a spike in the blue bars indicates a trend worth worrying about. Albany International's latest average DSO stands at 74.7 days, and the end-of-quarter figure is 74.6 days. Differences in business models can generate variations in DSO, and business needs can require occasional fluctuations, but all things being equal, I like to see this figure stay steady. So, let's get back to our original question: Based on DSO and sales, does Albany International look like it might miss its numbers in the next quarter or two?

I don't think so. AR and DSO look healthy. For the last fully reported fiscal quarter, Albany International's year-over-year revenue grew 3.7%, and its AR grew 5.2%. That looks OK. End-of-quarter DSO increased 0.4% over the prior-year quarter. It was up 1.7% versus the prior quarter. Still, I'm no fortuneteller, and these are just numbers. Investors putting their money on the line always need to dig into the filings for the root causes and draw their own conclusions.

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Add Albany International to My Watchlist.

Top Casino Stocks For 2014

WikiMedia Commons.

The 2002 book Bringing Down the House told the true story of how six MIT math geniuses mastered blackjack card counting and took Las Vegas for millions. It had money, sex, drugs, and power. People loved it.

But part of the story often went misunderstood. The card-counters didn't win every hand of blackjack, or anything close to it. The casino normally has a slight edge over players. The MIT crew's strategy tipped those odds just barely in their favor. That meant they still lost a lot of bets. "Even the most complex systems seemed to aim at an overall edge of around 2 percent," author Ben Mezrich wrote.

But that tiny edge was all the crew needed to succeed, provided they played long enough.�When the odds are even slightly in your favor, you will win over time,�even if you lose often in between.�

Top Casino Stocks For 2014: Daimler AG (DDAIF.PK)

Daimler AG (Daimler), incorporated on May 6, 1998, develops, manufactures, distributes and sells a range of automotive products, mainly passenger cars, trucks, vans and buses. It also provides financial and other services relating to its automotive businesses. The Company offers its automotive products and related financial services primarily in Western Europe and in the North American Free Trade Agreement (NAFTA) region, which consists of the United States, Canada and Mexico. During the year ended December 31, 2009, the Company derived approximately 46% of its revenue from sales in Western Europe and 21% from sales in the United States. It operates in five segments: Mercedes-Benz Cars, Daimler Trucks, Mercedes-Benz Vans, Daimler Buses and Daimler Financial Services. Its other business interests consist primarily of its equity investments in the European Aeronautic Defence and Space Company EADS N.V. (EADS) and in Tognum AG. In October 2009, Deutsche Bank AG completed t he disposal of its interest in the Company. In June 2011, Daimler AG and Rolls-Royce Holdings PLC had secured around 94% interest in Tognum AG-DJ.

Mercedes-Benz Cars

Mercedes-Benz Cars designs, produces and sells Mercedes-Benz passenger cars, Maybach luxury sedans and smart micro compact passenger cars. During 2009, Mercedes-Benz Cars contributed approximately 51% of the Company�� revenue. The Company offers Mercedes-Benz passenger cars with a range of diesel and gasoline engines. Under the AMG brand, it offers versions of Mercedes-Benz vehicles with V8 or V12 engines in all classes, except in the A-, B-, R-, GL- and GLK-Classes. The Mercedes-Benz passenger car product range consists of S-Class, E-Class, C-Class, A-/B-Classes and ML-/R-/G-/GL-/GLK-Classes.

The S-Class is a line of luxury sedans, which are available in short and long wheelbase versions. In June 2009, the Company introduced a new generation of the S-Class sedans, includ ing a hybrid version, the new S 400 BlueHYBRID. The S-Clas! s ! sedans are complemented by the CL, a top-of-the-line two-door coupe, and the SL, a luxury roadster. The E-Class is a line of luxury sedans, coupes, convertibles and station wagons. It also offers the CLS, a four-door coupe based on the E-Class. The C-Class is a line of compact luxury sedans and station wagons. The CLC Sports Coupe and the SLK, a two-seat roadster, complement the C-Class product family.

The A-Class is a front wheel drive compact and the B-Class is a front wheel drive 4-door Compact Sports Tourer (CST). The Company does not offer the A- and B-Classes in the United States. The ML-Class is a line of sport utility vehicles with permanent all-wheel drive. The R-Class is a line of SUV Tourers, which is available in a short and a long wheelbase version. The GL-Class is a line of seven seat luxury sport utility vehicles. The GLK-Class is a line of compact sport utility vehicles. The G-Class is a line of cross country vehicles with permanent four-wheel d rive that come in a short and a long wheelbase version, and as a convertible. Under the Maybach brand, the Company offers a line of luxury sedans with outstanding luxury, comfort, and individuality. Maybach sedans are available in a short and a long wheelbase version, including the Maybach 57S and 62S as sportier variations. The smart brand represents a micro compact car concept. It offers two models, the smart fortwo coupe and the smart fortwo cabrio.

Daimler Trucks

Daimler Trucks manufactures and sells trucks and specialty vehicles under the brand names Mercedes-Benz, Freightliner, Western Star, Thomas Built Buses and Fuso. During 2009, Daimler Trucks contributed approximately 21% of its revenue. During 2009, the Company ceased production of trucks under the Sterling brand name. The Company�� European Mercedes-Benz truck lines consist of the Actros and the Axor in the heavy-duty category, the Atego in the medium-duty category, and the specialt y vehicles Econic and Zetros. The Unimog, a four-wheel! drive! v! ehicle ! for special purpose applications, complements the line-up. In Turkey and Brazil, it manufactures heavy-duty and medium-duty trucks for the respective local and certain export markets. Its Mercedes-Benz trucks range from 6 metric tons gross vehicle weight (GVW) to 41 metric tons GVW.

The Company�� United States subsidiary, Daimler Trucks North America LLC, manufactures trucks and buses (based on truck chassis) in Classes 3 through 8 (from 9,000 lbs. GVW to 160,000 lbs. GVW) and sells them under the Freightliner, Western Star, and Thomas Built Buses brand names, primarily in the NAFTA region. It also manufactures chassis for trucks, buses, walk-in vans and motor homes in Classes 3 through 7 (from 10,000 lbs. GVW to 33,000 lbs. GVW). During 2009, Freightliner introduced a new version of the Coronado, an on-highway truck. It Japan-based subsidiary, Mitsubishi Fuso Truck and Bus Corporation (MFTBC), offers a truck portfolio and several bus lines, primarily for the Japanese and other Asian markets. The line-up includes the Canter trucks (light-duty), the Fighter trucks (medium-duty) and the Super Great trucks (heavy-duty) and also certain bus models (Rosa and Aero). MFTBC also sells trucks in Africa, Australia, Europe, Latin America and the United States.

Mercedes-Benz Vans

Mercedes-Benz Vans designs, manufactures and sells vans under the brand names Mercedes-Benz and Freightliner. During 2009, Mercedes-Benz Vans contributed approximately 8% of its revenue. The Company offers three lines of Mercedes-Benz vans between 1.9 metric tons (t) and 7.5t gross vehicle weight (GVW): the Vario, the Vito/Viano and the Sprinter. In the NAFTA region it sells the Sprinter under the Freightliner brand name and, since January 1, 2010, also under the Mercedes-Benz brand name. As of December 31, 2009, subsidiaries of Chrysler Holding LLC sold the Sprinter in the United States under the Dodge and Freightliner brand names, and i n Canada under the Dodge brand name.

Daimler ! B! uses

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Daimler Buses is a global supplier in the worldwide bus market. During 2009, Daimler Buses contributed approximately 5% of the Company�� revenue. Its product portfolio includes city buses, coaches, intercity buses, midi buses and bus chassis. It sells complete buses under the Mercedes-Benz and Setra brands in Europe, under the Mercedes-Benz brand name in Mexico, and under the Setra and Orion brand names in the United States and Canada. In addition, Daimler Buses produces and sells worldwide a range of bus chassis under the brand name Mercedes-Benz.

Daimler Financial Services

The Company�� financial services activities contributed approximately 15% of its revenue during 2009. It consists principally of financing and leasing services supporting its Mercedes-Benz and other vehicle businesses. The financial services the Company offers consist mainly of customized financing and leasing packages for its retail and wholesale customers in the automotive sector. It also provides financing to its dealers for vehicle inventory and property, plant and equipment purchases, and it offers insurance brokerage and fleet management services, including dealer property and casualty insurance. In Germany, the Company operates a licensed bank, the Mercedes-Benz Bank. The Mercedes-Benz Bank offers financial services to its customers and employees in Germany. These services include leasing and sales financing services, car savings plans, credit cards and demand deposit accounts. In addition, the Mercedes-Benz Bank operates branches in Great Britain and Spain to refinance the local dealer portfolios.

The Company competes with BMW, Volkswagen, Fiat, Ford, General Motors, PSA, Renault, Tata Motors, Toyota, Honda, Nissan, Suzuki, Scania, Iveco, Volvo, DAF, Navistar International, Paccar, Hino, Isuzu, MAN Commercial Vehicles, Irisbus and Agrale.

Top Casino Stocks For 2014: Foster Wheeler AG. (FWLT)

Foster Wheeler AG, through its subsidiaries, operates as an engineering and construction contractor; and power generating equipment supplier worldwide. Its Global Engineering and Construction division designs, engineers, and constructs onshore and offshore upstream oil and gas processing facilities; natural gas liquefaction facilities and receiving terminals; gas-to-liquids facilities; and oil refining, chemical and petrochemical, pharmaceutical, and biotechnology facilities, as well as related infrastructure, including power generation, distribution, gasification, and processing facilities for metals and mining sector. This division also designs carbon capture and storage, and solid fuel-fired integrated gasification combined-cycle power plants, as well as coal-to-liquids, coal-to-chemicals, and biofuels facilities; and operates power generation facilities, such as conventional and renewable source, and waste-to-energy facilities. In addition, it offers project and constr uction management services, including procurement of equipment, materials, and services from third-party suppliers and contractors; provides environmental remediation services; and designs and supplies direct-fired furnaces comprising fired heaters and waste heat recovery generators used in refinery, chemical, petrochemical, and oil and gas processes. The company�s Global Power division designs, manufactures, and erects steam generators and auxiliary equipment, including surface condensers, feedwater heaters, coal pulverizers, steam generator coils and panels, biomass gasifiers, and replacement parts; nitrogen-oxide reduction systems and components; and flue gas desulfurization equipment for steam generators. It also offers various site services; conducts research and development in combustion, fluid and gas dynamics, heat transfer, materials, and solid mechanics areas; and licenses technology to other steam generator suppliers. The company was founded in 1894 and is based in Geneva, Switzerland.

Top 10 Medical Stocks To Own Right Now: Pankl Racing Systems AG (PARS)

Pankl Racing Systems AG is an Austria-based holding company that develops, produces and distributes mechanical technology systems for the automotive and aviation industries, and specializes in the niche markets of motor racing, luxury vehicles and aerospace. The Company operates through two main segments: combined segment Racing/High Performance and Aerospace. The Racing segment supplies engine as well as drive train components and systems for the racing market. The High Performance segment is specialized in the production of engine and drive train components for luxury vehicles, engine parts for the aftermarket and aluminum forged parts. The Aerospace segment produces lightweight and flexible transmission components as well as systems for over 50 types of fixed and rotary wing aircraft. As of December 31, 2011, Pankl Racing Systems AG operated through 16 subsidiaries located in Austria, the United Kingdom, Slovakia and the United States. The Company is a subsidiary of the CROSS Group.

Abbott Buying OptiMedica for Up to $400 Million

Don't look now, but Abbott Labs (NYSE: ABT  ) is about to buy itself a bit more growth.

Simultaneous with its announcement of a $310 million acquisition in the vascular stent space Monday, Abbott also announced that it will be spending a further $250 million -- and perhaps as much as $400 million with subsequent milestone payments -- to acquire privately held cataract surgical equipment maker OptiMedica.

As Abbott explained in a statement, most cataracts today are treated by surgeons making incisions in the eye by hand. OptiMedica, however, has a Catalys Precision Laser System that allows surgeons to perform at least some incisions with computer-guided, "femtosecond" laser technology. Abbott notes that the system in question is cleared for sale in both Europe and the U.S. already.

Abbott puts the size of the global cataract surgery market at nearly 22 million operations in 2013. The company is already deeply involved in this market and says it gets 60% of its vision care revenues from cataract-related sales.

Even so, this market is small relative to the rest of Abbott's business -- small enough that it groups cataract surgery with several other of its business lines under the category "other products " in its financial statements. Management says that the deal is not likely to affect 2013 earnings guidance at all, even if it closes, as expected, before the end of the year.

The Beginners' Portfolio: We're Watching SSE, Barclays and Lloyds Banking

LONDON -- This article is the latest in a series that aims to help novice investors with the stock market. To enjoy past articles in the series, please visit our full archive.

While celebrating the Beginners' Portfolio's successful first year, and then re-examining Vodafone in the light of its changing dividend policy, I've been pretty much ignoring our watchlist for a while. It's a list of shares that I want to keep my eye on as possible purchases for when the time comes to replace any of our current holdings.

The current watchlist looks like this:

Company Market cap (pounds) Price (pence) Forward P/E Forward dividend

Daisy Group	340 million	126	9.8	2.4%
GKN	5.0 billion	303	11.2	2.6%
Ricardo	211 million	404	12.2	3.4%
Trinity Mirror	288 million	113	3.9	0%
TUI Travel	3.8 billion	341	11.9	3.8%
Unilever	34 billion	2,667	18.5	3.3%
United Utilities	5.0 billion	735	17.1	4.8%
WS Atkins	870 million	875	10.9	3.7%

The first thing to notice is that all of the watchlist members are up since we last looked in January, some quite impressively.

It really has been a buyer's market over the past year, and that's a sobering thought, really. Though the portfolio did well in its first year, there were a lot of good shares to choose from, and the real test will come when the pickings aren't quite so rich.

I come from a communications background, so I've always liked small telecoms companies. And Daisy Group has done exceptionally well -- the price is up a very nice 38%. Ruing past opportunities is not something I'll be doing here, but Daisy can certainly stay on the list.

Time for some pruning
But I'm going to get rid of our two engineering consultancy firms, WS Atkins and Ricardo. Both still look reasonably valued, but I prefer my exposure to such an out-of-favour sector to be more direct.

BAE Systems is already in the portfolio and doing well, and in aero- and car-components maker GKN, I think we have an attractive enough alternative to keep us going for now.

I'm also dumping Trinity Mirror -- not because I think the fundamentals aren't cheap, but because I don't really understand how to value the publisher.

And, as one of my key rules is "don't buy something you don't understand,"
out it goes. It might prove to be a super bargain, but it's one for someone else.

In with the new
I'm definitely not one for "diversification for its own sake," but I do think it's an important factor for a portfolio, and for me, there are two key sectors missing -- utilities and banks. Utility companies provide very steady income, and banks, well, they're a big part of the economy.

We already have United Utilities on the watchlist, and I'm adding SSE  (LSE: SSE  ) , too.

SSE has a very nice 5.8% dividend yield forecast, and it's on a forward P/E of 13, which is modest for the sector -- in fact, if there was an empty slot in the portfolio now, SSE would be a strong candidate.

I'm also adding Barclays  (LSE: BARC  ) and Lloyds Banking (LSE: LLOY  ) .

Barclays has been through some torrid times, but looks to have shaken out a lot of the rotten wood. And Lloyds, well, if we're looking at banks, it could pay to have one of the two bailed-out ones on board -- and the forthcoming TSB split should add some interest.

I'm also going to add Halfords to the list, because I think there's a decent chance of the retailer becoming a turnaround candidate in due course -- and I just kind of like the company!

The new list
So, here's what the new watchlist looks like:

Company Market cap (pounds) Price (pence) Forward P/E Forward dividend

Barclays	39.2 billion	302	8.6	2.4%
Daisy Group	340 million	126	9.8	2.4%
GKN	5.0 billion	303	11.2	2.6%
Halfords	628 million	312	13.5	4.8%
Lloyds Banking	43.5 billion	61	13.4	0.3%
SSE	14.5 billion	1,516	12.9	5.8%
TUI Travel	3.8 billion	341	11.9	3.8%
Unilever	34 billion	2,667	18.5	3.3%
United Utilities	5.0 billion	735	17.1	4.8%

Finally, my idea of the kind of shares that should make up the core of a beginner's portfolio is the same as my choice for an ISA, or a retirement portfolio -- or, in fact, any portfolio.

I'd start with good strong companies that should stand the test of time and potentially reward you for decades.

Not surprisingly, the Fool's top analysts think similarly, and they have put together a special report detailing five blue chip shares that I think would be ideal for anyone at the start of their investing career.

But this report will be available for a limited period only, so click here today to get your hands on these great ideas that could start you on the road to long-term riches.

link

Why Pulte Is Getting Pummeled

After the Commerce Department said yesterday that new-home sales soared by 35% last month, everything appeared to be lined up perfectly for homebuilders to have an excellent second quarter. Unfortunately, investors that had been lulled into a sense of complacency by the good news got a reality check today.

Shares of PulteGroup (NYSE: PHM  ) and other homebuilders are getting pummeled in early trading after the nation's second largest builder reported earnings that came up dramatically short of the consensus estimate. Analysts expected the company to record $0.30 in earnings per share over the three months ended June 30. When all was said and done, however, it earned only $0.09.

Pulte attributed the source of the shortfall to three nonoperational charges. It spent $30 million to resolve "a contractual dispute at a previously completed luxury community." It charged off $23 million "associated with the repurchase of $434 million of senior notes in the period." And $13 million for costs related to relocating the company's corporate headquarters.

Once you back these out, in turn, Pulte earned $0.26 per share.

The best news of the report concerned home prices, closings, and backlog. While the Commerce Department said yesterday that home prices fell in June, Pulte said its average selling price grew by 9% compared to the same period last year. In addition, the number of home closings grew by 9% as well -- to 4,152. And finally, the number of units in its backlog shot up by 13% to 8,558.

On top of this, the company sounded an upbeat tone about the economy. "The U.S. housing market continues to gain momentum and remains solidly on track toward a sustained, long-term recovery," said CEO Richard J. Dugas. "Even the recent rise in interest rates has had little effect on overall activity, as consumers continue to perceive good values, amid limited supply and generally rising sales prices, combined with the reality of high lease rates in the rental market. Given these market dynamics, consumers are continuing to exhibit a sense of urgency in their desire to purchase a new home."

Alternatively, far and away the worst news was the company's activity on the order front. Net new orders for the second quarter came in at 4,885 homes, which equated to a decrease of 12% from the prior year. Lest there be any doubt, aside from the woeful EPS performance, this is why investors are broadly selling Pulte's shares today.

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How Will Companies Fare Under New SEC Rules?

The U.S. District Court for the District of Columbia just dismissed a challenge from the Chamber of Commerce and the National Association of Manufacturers to the SEC's new requirement that companies disclose their use of conflict minerals from the Democratic Republic of Congo in their products. This is going to leave some companies in a pretty tough spot, while others are way ahead of the game.

Conflict minerals
The Democratic Republic of Congo, or DRC, is a rough place to be these days. Armed militias use the country's mineral wealth to fund violence and insurrection. In the eastern part of the country, fighting has continued for nearly 15 years, enabled by the trade in these conflict minerals. Millions of people have died, many more have been displaced, and rape has been widely usedas a weapon of war. Folks, this is as brutal as it gets.

So how are we involved? By way of our electronics. There are four main minerals in question:

Cassiterite is the ore for tin, which is a circuit-board solder. Coltan is the ore for a rare metal called tantalum, which goes into capacitors. Wolframite is the ore for tungsten, which makes your mobile phone vibrate. Gold goes into electronics as a wire coating.

The illicit trade in these minerals provides fighting factions with tens of millions of dollars a year. 

Dodd-Frank
Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act addresses the ongoing DRC conflict and companies' conflict mineral ties, both directly and through their supply chains. It tasked the SEC with implementing a rule that would require companies to disclose annually whether they use minerals in their products that originated in the DRC or an adjoining country.

This latest court challenge had asked that companies be exempted from the SEC requirement if their products contain only small amounts of the metals in question. The argument, in part, was that the rule posed an unduly costly burden on companies. In dismissing the case, the Court has made it impossible for companies to skirt the reporting requirement that begins next year.

"As is typical in these cases, we don't really know which companies were pushing the challenge forward, because they essentially used the Chamber of Commerce and NAM to launder their considerable lobbying money into efforts to resist important human rights regulations while keeping their corporate hands clean. Their efforts failed," said Simon Billenness, President of CSR Strategy Group. He went on:

This decision keeps in place the SEC rule requiring companies to file reports on their use of conflict minerals. It defeats the final, last-ditch attempts by the Chamber of Commerce and NAM to block this rule. That's why it's so significant. Now the law and the rules will operate as Congress and the SEC intended. 

Company performance
Here's the thing: It will be expensive and difficult for companies to comply with this rule. Some are ready. Others are not.

Canon (NYSE: CAJ  ) ranks among the worst performers in an analysis from The Enough Project. Among other shortcomings, the company does not identify smelters in its supply chain, and does not participate in any programs to source conflict-free minerals from the DRC region. IBM (NYSE: IBM  ) falls in the middle of the pack when compared to other electronics companies. IBM also has not identified the smelters in its supply chain and has no policy requiring its suppliers to use conflict-free smelters. However, the company is working meaningfully to improve traceability in the region. Advanced Micro Devices (NYSE: AMD  ) is among the top performers in Enough's rankings. It was one of only six companies to pilot the Organization for Economic Cooperation and Development's due diligence guidance on conflict minerals. While it still has some work to do to comply with the SEC's rule, the company is well on its way. The gold standard, however, goes to Intel (NASDAQ: INTC  ) . The company is at the top of Enough's ranking, and has been working on dealing with the conflict mineral issue for some time now. Intel is one of the few companies to publish and audit its smelters, and was the first company to commit to making a fully conflict-free product from the DRC by 2013. Intel has demonstrated genuine leadership in this area.

It's worth noting that in some cases, shareholders move on this issue even if the regulatory environment is unsettled. Cisco Systems (NASDAQ: CSCO  ) had a shareholder resolution on its 2012 proxy ballot related to conflict minerals. While Cisco was far from the worst performer -- the company has a conflict minerals policy that includes a requirement for conflict-free smelters -- the proponents wanted Cisco to study the feasibility of completely eliminating conflict minerals from its supply chain. The resolution received less than 8% support in proxy voting, but it demonstrated that the issue is on investors' radars. 

The bottom line
Conflict minerals are a nasty, cruel business all around. The SEC and the courts have determined that the fact that the issue is difficult and expensive to address is no excuse to perpetuate the status quo. Companies will now be held to account, and those that are ready for this shift will enjoy an advantage. Sometimes, it actually pays to be the good guy.

Conflict minerals aren't the only force buffeting the modern technology industry. Really, it's incredible to think just how much of our digital and technological lives are almost entirely shaped by just a handful of companies. Find out "Who Will Win the War Between the 5 Biggest Tech Stocks?" in The Motley Fool's latest free report, which details the knock-down, drag-out battle being waged by the five kings of tech. Click here to keep reading.

Allegiant Travel Increases Sales but Misses Estimates on Earnings

Allegiant Travel (Nasdaq: ALGT  ) reported earnings on July 23. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended June 30 (Q2), Allegiant Travel met expectations on revenues and missed estimates on earnings per share.

Compared to the prior-year quarter, revenue grew. GAAP earnings per share increased.

Gross margins grew, operating margins dropped, net margins dropped.

Revenue details
Allegiant Travel reported revenue of $255.8 million. The eight analysts polled by S&P Capital IQ looked for sales of $256.8 million on the same basis. GAAP reported sales were 11% higher than the prior-year quarter's $231.2 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $1.34. The 12 earnings estimates compiled by S&P Capital IQ anticipated $1.37 per share. GAAP EPS of $1.34 for Q2 were 3.1% higher than the prior-year quarter's $1.30 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 30.2%, 30 basis points better than the prior-year quarter. Operating margin was 16.8%, 130 basis points worse than the prior-year quarter. Net margin was 10.1%, 80 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $226.0 million. On the bottom line, the average EPS estimate is $1.03.

Next year's average estimate for revenue is $997.6 million. The average EPS estimate is $5.12.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 172 members out of 215 rating the stock outperform, and 43 members rating it underperform. Among 67 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 56 give Allegiant Travel a green thumbs-up, and 11 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Allegiant Travel is hold, with an average price target of $97.89.

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Add Allegiant Travel to My Watchlist.

The Men Who Run Legal & General Group

LONDON -- Management can make all the difference to a company's success, and thus its share price.

The best companies are those run by talented and experienced leaders with strong vested interests in the success of the business, held in check by a board with sound financial and business acumen. Some of the worst investments to hold are those run by executives collecting fat rewards as the underlying business goes to pot.

In this series, I'm assessing the boardrooms of companies within the FTSE 100 (UKX). I hope to separate the management teams that are worth following from those that are not. Today, I am looking at Legal & General  (LSE: LGEN  ) , the U.K.'s second-largest life and pensions company.

Here are the key directors:

Director Position

John Stewart	(non-exec) Chairman
Nigel Wilson	Chief Executive
Mark Gregory	Executive Director (Savings)
John Pollock	Executive Director (Risk)
Mark Zinkula	Executive Director (LGIM)

Reeling
John Stewart became chairman in March 2010, when L&G was still reeling from the impact of the financial crisis. He started his career with Woolwich Building Society, working his way up to become CEO.

After selling Woolwich to Barclays he became Barclays' deputy CEO. He was credited with turning around National Australia Bank, which he ran from 2004 to 2008. He is a member of the Court of the Bank of England.

Step up
Nigel Wilson was appointed finance director in September 2009. Previously he was deputy CEO and finance director of UBM. His previous career included management roles at Dixons and Guinness Peat Aviation, and consultancy with McKinsey.

He stepped up to the CEO role in June last year, replacing Tim Breedon, who had been CEO for seven years and an employee for 25. Wilson plans to grow the business, which is in a mature industry, through bolt-on acquisitions and is interested in overseas expansion, especially in Asia.

Indicative of that, the interim CFO was appointed Group M&A director last January. The search for a new finance director is ongoing.

Executives
Mark Gregory held several divisional finance director roles before joining the board in 2009. He joined the group in 1998 after working for Kingfisher and ASDA. John Pollock is a longer-serving company man, joining L&G in 1980, and the board in 2003.

Mark Zinkula was appointed to the group board in 2012, but he had been CEO of L&G Investment Management since 2011. He joined LGIM's U.S. arm at its inception in 2006 and became head in 2008. He previously was head of fixed income at Aegon Asset Management. His appointment to the group board was explicit recognition of LGIM's importance in L&G's international expansion strategy.

L&G's seven non-execs almost exclusively have financial services or finance director backgrounds.

LGIM has become one of the most vocal fund managers opposed to excessive boardroom pay. Breedon's £9 million payoff last year seems to have been uncontroversial, however. Executives have substantial shareholdings, though the formal requirement for a "voluntary shareholding of 50% of base salary" is weak.

I analyze management teams from five different angles to help work out a verdict. Here's my assessment:

1. Reputation. Management CVs and track record. Strong.	Score 3/5
2. Performance. Success at the company. Too soon to judge CEO.	Score 3/5
3. Board Composition. Skills, experience, balance Logical.	Score 3/5
4. Remuneration. Fairness of pay, link to performance. Uncontroversial.	Score 3/5
5. Directors' Holdings, compared to their pay. See above.	Score 4/5

Overall, L&G scores 16 out of 25, a middling result. The company has recovered well from its distress in the financial crisis, and the new CEO's plans look credible, but it's too soon to tell how successful they may be.

I've collated all my FTSE 100 boardroom verdicts on this summary page.

Buffett's favorite FTSE share
Legendary investor Warren Buffett has always looked for impressive management teams when picking stocks. His latest acquisition, Heinz, has long had a reputation for strong management. Indeed, Buffett praised its "excellent management" alongside its high-quality products and continuous innovation.

So I think it's important to tell you about the FTSE 100 company in which the billionaire stock-picker has a substantial stake. A special free report from The Motley Fool -- "The One U.K. Share Warren Buffett Loves" -- explains Buffett's purchase and investing logic in full.

And Buffett, don't forget, rarely invests outside his native United States, which, to my mind, makes this British blue chip -- and its management -- all the more attractive. So why not download the report today? It's totally free and comes with no further obligation.

Top 5 Canadian Companies To Own In Right Now

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Canadian Solar (NASDAQ: CSIQ  ) jumped as much as 16% today after announcing a major project development.

So what: The company has been hired by Samsung Renewable Energy to design and build a 130 MW utility-scale project called Grand Renewable Solar. The project will generate $301.1 million in revenue for Canadian Solar and will begin construction in the third quarter of this year. �

Now what: Canadian Solar has been slowly turning itself into a project developer, a good move considering the competition in the module business. What's surprising about this project is its cost of just $2.32 per watt, one of the lowest I've ever seen in solar. This project will create a source of demand for the company's products, but at that low cost per watt it won't generate much profit. This is one of the better stocks in Chinese solar but it's still not a stock this Fool is buying today.

Interested in more info on Canadian Solar? Add it to your watchlist by clicking here.

Top 5 Canadian Companies To Own In Right Now: Credit Suisse Group(CS)

Credit Suisse Group AG, together with its subsidiaries, operates as a financial services company. The company operates in three segments: Private Banking, Investment Banking, and Asset Management. The Private Banking segment offers advisory services and a range of wealth management solutions, including pension planning, life insurance products, tax planning, and wealth and inheritance advice for the high-net-worth and ultra-high-net-worth individuals. This segment also supplies banking products and services to affluent, high-net-worth and ultra-high-net-worth clients, and corporates and institutions. The Investment Banking segment provides investment banking and securities products and services to corporations, governments, pension funds, and institutions. Its products and services include debt and equity underwriting, sales and trading, mergers and acquisitions advice, divestitures, corporate sales, restructuring, and investment research. The Asset Management segment offe rs integrated investment solutions and services to institutions, governments, foundations and endowments, corporations, and individuals. It provides access to a range of investment classes across alternative investment, asset allocation, and traditional investment strategies. The company operates in Switzerland, Europe, the Middle East, Africa, the Americas, and the Asia Pacific. Credit Suisse Group AG was founded in 1856 and is headquartered in Zurich, Switzerland.

Advisors' Opinion:

• [By Louis Navellier]

  Credit Suisse (NYSE:CS) is known for providing advisory services, solutions and products to companies, institutional clients and private clients globally. CS stock’s yearly performance has been a sore spot for investors, having dropped more than 40%.

Top 5 Canadian Companies To Own In Right Now: Weatherford International Ltd(WFT)

Weatherford International Ltd. provides equipment and services used in the drilling, evaluation, completion, production, and intervention of oil and natural gas wells worldwide. It offers artificial lift systems, which include reciprocating rod lift systems, progressing cavity pumps, gas lift systems, hydraulic lift systems, plunger lift systems, hybrid lift systems, wellhead systems, and multiphase metering systems. The company also provides drilling services, including directional drilling, ?Secure Drilling? services, well testing, drilling-with-casing and drilling-with-liner systems, and surface logging systems; and well construction services, such as tubular running services, cementing products, liner systems, swellable products, solid tubular expandable technologies, and inflatable products and accessories. In addition, it designs and manufactures drilling jars, underreamers, rotating control devices, and other pressure-control equipment used in drilling oil and nat ural gas wells; and offers a selection of in-house or third-party manufactured equipment for the drilling, completion, and work over of oil and natural gas wells for operators and drilling contractors, as well as a line of completion tools and sand screens. Further, the company provides wireline and evaluation services; and re-entry, fishing, and thru-tubing services, as well as well abandonment and wellbore cleaning services; stimulation and chemicals, including fracturing and coiled tubing technologies, cement services, chemical systems, and drilling fluids; integrated drilling services; and pipeline and specialty services. It serves independent oil and natural gas producing companies. The company was founded in 1972 and is headquartered in Geneva, Switzerland.

Advisors' Opinion:

• [By Tom Bishop]

  Weatherford International (WFT) is trading around $14. Weatherford is a leading provider of equipment and services to the oil and gas industry, based in Switzerland. These shares have traded in a range betwe en $10.85 to $26.25 in the last 52 weeks. The 50-day moving average is $15.46 and the 200-day moving average is $19.62. WFT is estimated to earn about 88 cents per share in 2011 and $1.67 for 2012. Analysts at UBS set a $28 price target for WFT share.

Best Stocks To Invest In 2014: Grupo Televisa S.A.(TV)

Grupo Televisa, S.A.B., together with its subsidiaries, operates as a media company in Mexico and internationally. It operates in seven segments: Television Broadcasting, Pay Television Networks, Programming Exports, Publishing, Sky, Cable and Telecom, and Other Businesses. The Television Broadcasting segment engages in the production of television programming and broadcasting of channels 2, 4, 5, and 9; and production of television programming and broadcasting for local television stations in Mexico and the United States. The Pay Television Networks segment provides programming services for cable and pay-per-view television companies in Mexico, as well as other countries in Latin America, the United States, and Europe. The Programming Exports segment offers international licensing of television programming. The Publishing segment primarily publishes Spanish-language magazines in Mexico, the United States, and Latin America. The Sky segment provides direct-to-home broadcas t satellite pay television services in Mexico, Central America, and the Dominican Republic. The Cable and Telecom segment operates a cable and telecommunication system in the Mexico City metropolitan area. This segment provides data and long-distance services solutions to carriers and other telecommunications service providers through its fiber-optic network in Mexico and the United States; basic and premium television, pay-per-view, and telephone services. The Other Businesses segment engages in sports and show business promotion, soccer, feature film production and distribution, Internet, gaming, radio, and publishing distribution operations. The company was founded in 1990 and is headquartered in Mexico City, Mexico.

Top 5 Canadian Companies To Own In Right Now: Primerica Inc.(PRI)

Primerica, Inc., together with its subsidiaries, engages in the distribution of financial products on behalf of third parties to middle income households in the United States and Canada. The company operates in three segments: Term Life Insurance, Investment and Savings Products, and Corporate and Other Distributed Products. The Term Life Insurance segment underwrites term life insurance products. The Investment and Savings Products segment distributes mutual funds, variable annuities, fixed annuities, and segregated funds. The Corporate and Other Distributed Products segment provides mortgage loans, which include debt consolidation or refinance, and purchase money loans; unsecured loans; prepaid legal services that assist subscribers with legal matters, such as drafting wills, living wills and powers of attorney, trial defense, and motor vehicle-related matters; mail-order student life products; short-term disability benefit insurance; and auto and homeowners? insurance products. The company was founded in 1927 and is based in Duluth, Georgia.

Top 5 Canadian Companies To Own In Right Now: Tim Hortons Inc.(THI)

Tim Hortons Inc. develops, franchises, and operates quick service restaurants primarily in Canada and the United States. Its restaurants serve coffee and other hot and cold beverages, baked goods, sandwiches, soups, and other food products. As of April 03, 2011, the company and its restaurant owners operated 3,169 restaurants in Canada and 613 restaurants in the United States under the Tim Hortons name; and had 274 primarily self-serve licensed locations in the Republic of Ireland and the United Kingdom Tim Hortons Inc. was founded in 1964 and is based in Oakville, Canada.

Why Vail Resorts's Earnings Are Outstanding

Get Ready for More Advertising Inside Your Car

One trend you should be aware of as an investor is that of the "connected car." Your vehicle can connect with the outside world through a dedicated modem, or -- increasingly these days -- through your smartphone.

At the recent Connected Car Conference in New York City, Roger Lanctot of Strategy Analytics spoke about the role of smartphones and modems in the vehicle: Besides entertainment, they can help sell cars, route motorists, and facilitate commerce through various payment options for tolls, parking, and more. And -- done properly -- a connected car can save lives and make driving safer.

Ford (NYSE: F  ) , General Motors (NYSE: GM  ) and Tesla (NASDAQ: TSLA  ) each have different approaches to this technology. But as Roger explains to Motley Fool analyst Rex Moore in the following video. they all will eventually monetize the connected car in a similar fashion -- through advertising.

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

5 Drugmakers With a Lot on the Line Next Week

You may or may not have heard, but it's earnings season again. Contrary to popular belief, earnings season does actually take a break for a few weeks in between quarters; however, we're in the midst of a big ramp-up in earnings reports from some of America's largest companies.

Next week we can expect some of the largest companies in health care to report their earnings results. While all earnings reports are important, certain companies have a lot more on the line than others this earnings season. Consider the following five companies an absolute "must-watch" when they report their quarterly results next week.

Wednesday, July 24

Eli Lilly (NYSE: LLY  )
Dubbed the most perilous pipeline by me earlier this year, Eli Lilly is expected to report a 4% increase in revenue to $5.8 billion and a 20% increase in EPS to $1 on Wednesday. Call me a bit skeptical, though, considering that Lilly's pipeline is in pretty poor shape. Both Cymbalta and Humalog will soon be exposed to generic competition, and they represent about 30% of Eli Lilly's total revenue. With no drugs outside of the soon-to-be off-patent Cymbalta and Cialis demonstrating double-digit sales growth in the first quarter, Lilly is going to need to pull a rabbit out of its hat to appease shareholders.

InterMune (NASDAQ: ITMN  )
InterMune shares may have exploded higher by 30% over the past week, but there's certain to be a lot of nail-biting on the part of shareholders as we head into earnings season. The reason has been the slow acceptance of the company's idiopathic pulmonary fibrosis drug, Esbriet, based on its pricing in the EU. In previous quarters Esbriet sales have disappointed in a big way, but are expected to rise by 134% to nearly $13 million from last year, though losses are still anticipated to come in at $0.70 per share. Following its recent pop, Esbriet sales had better hit the mark, otherwise InterMune shareholders are probably going to be in for a long day.

Thursday, July 25

Gilead Sciences (NASDAQ: GILD  )
Gilead shares have been on a tear over the past year, thanks to the promise of oral hepatitis-C drug sofosbuvir, which is currently under review by the FDA. However, the company will now need to meet the extremely high hopes of investors in the second-quarter if it has any chance of heading higher. Estimates for the quarter call for nearly 11% sales growth to $2.66 billion with flat year-over-year EPS of $0.50. Although the markets will be waiting for an update on sofosbuvir, don't discount the importance of Stribild sales which represents the cornerstone of HIV treatments. As an educated guess, with $92.1 million in Stribild sales in Q1, and $30 million in Q4, anything less than $150 million this quarter will be viewed as a disappointment in my books.

Alexion Pharmaceuticals (NASDAQ: ALXN  )
If there's one company that certainly has big shoes to fill this earnings season its orphan drug developer Alexion whose lone drug, Soliris, is anticipated to bring in about $1.5 billion in sales this year. For the quarter, Alexion is forecast to grow revenue by 33% to $365 million with EPS rising 45% to $0.68. Given that Alexion has topped Wall Street's EPS estimates by an average of 19% in each of the past four quarters, I'd certainly be expecting an earnings beat if I were a shareholder. My worry here is that with Roche demonstrating potential interest in Alexion, even a big boost in its bottom line may not be enough to sustain Alexion at 34 times forward earnings.

BioMarin Pharmaceuticals (NASDAQ: BMRN  )
BioMarin might as well be considered a long lost sibling of Alexion, since they are both focused on developing rare orphan drugs which have practically no competition and hefty annual price tags, often in six-figures. However, whereas Alexion is profitable, BioMarin has some "'splaining to do," as Desi Arnaz used to say. Estimates in the upcoming quarter call for sales growth of just 8% to $134 million with losses expected to widen to $0.29 per share. Naglazyme's 1% sales increase last quarter didn't impress at all, so it'll need Aldurazyme to really step up if it hopes to maintain its frothy valuation.

It's no secret that biotech stocks have been soaring recently -- just look at the above five examples for proof -- but the best investment strategy is to pick great companies and stick with them for the long term. The Motley Fool's free report "3 Stocks That Will Help You Retire Rich" not only shares stocks that could help you build long-term wealth, but also winning strategies that every investor should know. Click here to grab your free copy today.

Who’s Doing It Right in the Energy Sector?

The Motley Fool recently hosted a climate change summit, at which speakers showed little love for big oil and fossil fuel companies. In a world where carbon intensity presents increasing risk, panel experts urged attendees to consider cleaner energy sources. So it raised the question: Where would they recommend we put our money?

John Vechey of PopCap Games moderated the summit. His first panel guests were Dr. Rachel Cleetus and Dr. Joe Casola. Cleetus is a climate economist with the Union of Concerned Scientists, and Casola is the program director for science and impacts at the Center for Climate and Energy Solutions (C2ES). In the video below, they offer their ideas for where our energy system is headed.

Cleetus discusses a new breed of energy companies that are working to incorporate and promote renewables. She specifically praises Xcel Energy (NYSE: XEL  ) for its investment in wind power. Just today, Xcel announced a new 200 megawatt wind farm project in Minnesota.

Casola, for his part, offers several examples of new technologies to look for in the sector. He addresses the strong potential of combined heat and power (CHP) technology. General Electric (NYSE: GE  ) is a leader in this area. The company's Jenbacher CHP systems convert waste heat accrued during an engine's operation into energy, achieving energy savings of around 40%.

Forward-thinking utilities are increasingly incentivizing CHP technology. National Grid (NYSE: NGG  ) offers dedicated gas rates, rebates, and incentives for CHP projects. The company has also designed, built, and maintained CHP plants. Watch the video below to learn more.

Speaking of less carbon-intensive energy sources, one home-run investing opportunity has been slipping under Wall Street's radar for months, but it won't stay hidden much longer. Forward-thinking energy players like GE and Ford have already plowed sizable amounts of research capital into this little-known stock... because they know it holds the key to the explosive profit power of the coming "no choice fuel revolution." Luckily, there's still time for you to get on board if you act quickly. All the details are inside an exclusive report from The Motley Fool. Click here for the full story!

AcelRx Prices Stock Issue

Texas Instruments' Earnings Will Be a Turning Point

Texas Instruments (NASDAQ: TXN  ) will release its quarterly report next Monday, but shareholders already have seen the stock soar to levels it hasn't seen in years. The question for investors, though, is whether Texas Instruments earnings can finally start growing at a fast-enough pace to justify further share-price gains in the future.

Texas Instruments has made a huge gamble with its business model, choosing to shy away from the highly competitive mobile-chip market in favor of its analog semiconductors and embedded processors. Can those less-sexy areas produce the gains in revenue and earnings that shareholders want to see? Let's take an early look at what's been happening with Texas Instruments over the past quarter and what we're likely to see in its report.

Stats on Texas Instruments

Analyst EPS Estimate	$0.41
Change From Year-Ago EPS	(6.8%)
Revenue Estimate	$3.06 billion
Change From Year-Ago Revenue	(8.3%)
Earnings Beats in Past 4 Quarters	4

Source: Yahoo! Finance.

Where will Texas Instruments' earnings end up this quarter?
Analysts have raised their earnings views in recent months on Texas Instruments, with a $0.03 per share rise in estimates for the June quarter and triple that increase for the full 2013 year. The stock has also reacted favorably, rising 8% since mid-April.

TI carried considerable momentum into the second quarter from a business perspective, as its first-quarter results were extremely impressive. Even though the company saw revenue drop 8%, Texas Instruments' earnings climbed 37%. Moreover, favorable guidance for the second quarter helped lead analysts to make their positive revisions.

Much of that momentum comes from TI's relentless efforts at innovating. Earlier this month, the company came out with a lower-power radio-frequency transceiver that should help improve efficiency for applications including alarm and security, home and building automation, and smart-grid operations. It also developed a new high-powered LED driver-controller that could be used for vehicle headlamps and other lighting needs.

Yet last month, TI issued a forecast that disappointed some investors, narrowing its previous earnings range and projecting $0.39 to $0.43 in earnings for the June quarter. The company cited weakness in PC and game-console demand as holding back its chips. We saw much the same problems in Intel's (NASDAQ: INTC  ) earnings report last night, as the PC-chip giant reduced its revenue forecast for the year amid a 5% drop in overall sales and an almost-30% decline in net income. Unlike TI, Intel is aiming to shift its model toward the mobile market.

The real key for TI will be whether its analog chips can gain greater application. General Electric's Industrial Internet project continues to move forward, and connecting networks of machines in order to improve communication and gather data should require plenty of sensor-chips of the type in which TI specializes. Moreover, Cisco Systems and its Internet of Things initiative also have promise both for TI and for Freescale Semiconductor (NYSE: FSL  ) , which came out with a new microcontroller chip earlier this year that could potentially work together with TI-made Wi-Fi transmitted chips to facilitate communication. Freescale is tiny compared to TI, but a partnership there could help both companies make more from the opportunity than they could separately.

In Texas Instruments' earnings report, look closely for which strategic direction TI chooses to take in trying to bolster its growth. Investors aren't going to wait forever for the company's strategy to play out, and the stock's best chance at further gains is for TI to identify growth markets that won't be overly sensitive to the industry's usual cyclical trends.

It's incredible to think just how much of our digital and technological lives are almost entirely shaped and molded by just a handful of companies. Find out "Who Will Win the War Between the 5 Biggest Tech Stocks?" in The Motley Fool's latest free report, which details the knock-down, drag-out battle being waged by the five kings of tech. Click here to keep reading.

Click here to add Texas Instruments to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.

Don't Get Too Worked Up Over Agilysys's Earnings

Although business headlines still tout earnings numbers, many investors have moved past net earnings as a measure of a company's economic output. That's because earnings are very often less trustworthy than cash flow, since earnings are more open to manipulation based on dubious judgment calls.

Earnings' unreliability is one of the reasons Foolish investors often flip straight past the income statement to check the cash flow statement. In general, by taking a close look at the cash moving in and out of the business, you can better understand whether the last batch of earnings brought money into the company, or merely disguised a cash gusher with a pretty headline.

Calling all cash flows
When you are trying to buy the market's best stocks, it's worth checking up on your companies' free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That's what we do with this series. Today, we're checking in on Agilysys (Nasdaq: AGYS  ) , whose recent revenue and earnings are plotted below.

Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. Dollar values in millions. FCF = free cash flow. FY = fiscal year. TTM = trailing 12 months.

Over the past 12 months, Agilysys burned $13.6 million cash while it booked a net loss of $1.3 million. That means it burned through all its revenue and more. That doesn't sound so great. FCF is less than net income. Ideally, we'd like to see the opposite.

All cash is not equal
Unfortunately, the cash flow statement isn't immune from nonsense, either. That's why it pays to take a close look at the components of cash flow from operations, to make sure that the cash flows are of high quality. What does that mean? To me, it means they need to be real and replicable in the upcoming quarters, rather than being offset by continual cash outflows that don't appear on the income statement (such as major capital expenditures).

For instance, cash flow based on cash net income and adjustments for non-cash income-statement expenses (like depreciation) is generally favorable. An increase in cash flow based on stiffing your suppliers (by increasing accounts payable for the short term) or shortchanging Uncle Sam on taxes will come back to bite investors later. The same goes for decreasing accounts receivable; this is good to see, but it's ordinary in recessionary times, and you can only increase collections so much. Finally, adding stock-based compensation expense back to cash flows is questionable when a company hands out a lot of equity to employees and uses cash in later periods to buy back those shares.

So how does the cash flow at Agilysys look? Take a peek at the chart below, which flags questionable cash flow sources with a red bar.

Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. Dollar values in millions. TTM = trailing 12 months.

When I say "questionable cash flow sources," I mean items such as changes in taxes payable, tax benefits from stock options, and asset sales, among others. That's not to say that companies booking these as sources of cash flow are weak, or are engaging in any sort of wrongdoing, or that everything that comes up questionable in my graph is automatically bad news. But whenever a company is getting more than, say, 10% of its cash from operations from these dubious sources, investors ought to make sure to refer to the filings and dig in.

Agilysys's issue isn't questionable cash flow boosts, but items in that suspect group that reduced cash flow. Within the questionable cash flow figure -- here a negative-- plotted in the TTM period above, changes in taxes payable constituted the biggest reversal. Overall, the biggest drag on FCF came from changes in accounts receivable.

A Foolish final thought
Most investors don't keep tabs on their companies' cash flow. I think that's a mistake. If you take the time to read past the headlines and crack a filing now and then, you're in a much better position to spot potential trouble early. Better yet, you'll improve your odds of finding the underappreciated home-run stocks that provide the market's best returns.

Looking for alternatives to Agilysys? It takes more than great companies to build a fortune for the future. Learn the basic financial habits of millionaires next door and get focused stock ideas in our free report, "3 Stocks That Will Help You Retire Rich." Click here for instant access to this free report.

We can help you keep tabs on your companies with My Watchlist, our free, personalized stock tracking service.

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Top 10 Clean Energy Stocks To Watch For 2014

NV Energy (NYSE: NVE  ) � is a selection for the real-money Inflation-Protected Income Growth portfolio. Like any investment, it needs to be reviewed from time to time to see if it's still worth owning. In the brief video below, portfolio manager Chuck Saletta reviews its valuation, balance sheet, and dividends, and decides whether to hold on to the stock or let it go.

To follow the iPIG portfolio as buy and sell decisions are made, watch Chuck's article feed by clicking here. To join The Motley Fool's free discussion board dedicated to the iPIG portfolio, simply click here.

Will Exelon's troubles soon be over?
As the nation moves increasingly toward clean energy, Exelon is perfectly positioned to capitalize on having the largest nuclear fleet in North America. This strength, combined with an increased focus on balance sheet health and its recent merger with Constellation, places Exelon and its resized dividend on a short list of the top utilities. To determine if Exelon is a good long-term fit for your portfolio, you're invited to check out The Motley Fool's premium research report on the company. Simply click here now for instant access.

Top 10 Clean Energy Stocks To Watch For 2014: Prime Minerals Ltd(PIM.AX)

Prime Minerals Limited engages in the exploration and evaluation of mineral resources. It primarily explores for uranium. The company owns 100% interest in the Lake Mason project consisting of four exploration licenses and the Bolitho Bore uranium prospect. The company operates in Australia, Greenland, Africa, Canada, Bulgaria, and the United States. Prime Minerals Limited is based in West Perth, Australia.

Top 10 Clean Energy Stocks To Watch For 2014: Chicago Rivet & Machine Co.(CVR)

Chicago Rivet & Machine Co. operates in the fastener industry in North America. It operates in two segments, Fasteners and Assembly Equipment. The Fasteners segment involves in the manufacture and sale of rivets, cold-formed fasteners and parts, and screw machine products. The Assembly Equipment segment engages in the manufacture of automatic rivet setting machines, automatic assembly equipment, and parts and tools. The company primarily sells its products to manufactures of automobiles and automotive components. Chicago Rivet & Machine Co. was founded in 1920 and is headquartered in Naperville, Illinois.

10 Best Stocks To Invest In 2014: Microgen Hdg(MCGN.L)

Microgen plc, together with its subsidiaries, provides information technology services and solutions to the business community primarily in the financial sector in the United Kingdom, Ireland, and internationally. The company?s Microgen Aptitude Solutions division offers enterprise level application products and solutions to financial and digital media organizations. This division?s products include Microgen Aptitude, an enterprise application platform that is used by enterprises to automate complex business processes, manage dynamic calculations and rules, and integrate data across existing infrastructure; Microgen Accounting Hub, which provides a single point of control for financial and accounting data for wholesale and retail banks, asset and wealth managers, and insurance providers, as well as for the finance function in the telecom, digital media, and commercial sectors; and Microgen DBClarity Developer that offers an approach to graphically design, implement, and control SQL logic. Its Microgen?s Financial Systems provides software products and services for the financial market. It delivers wealth management software and solutions, banking software and solutions, asset management software and solutions, and energy software and application management services. This segment provides solutions for front and back office administration, performance measurement/analytics, and fund and product design to trust administrators, and fund and asset management organizations. The company also offers consultancy, software support, and maintenance services. Microgen plc was founded in 1974 and is headquartered in London, the United Kingdom.

Top 10 Clean Energy Stocks To Watch For 2014: MaxiTRA Industries Ltd (MXI.AX)

MaxiTRANS Industries Limited, together with its subsidiaries, engages in the design, manufacture, sale, service, and repair of transport equipment, and related components and spare parts in Australia. It manufactures various trailer brands, and urethane foam and body panels; supplies and distributes parts; provides service and repair support; and sells and finances new and used trailing equipment. The company�s products include curtain sided trailers, flat top semis, and skeletal trailers; dry freight and temperature controlled vans; steel and aluminum semi tippers, B-doubles, side opening tippers, walking floors, and flat top trailers; rigid truck bodies; brakes, axles, suspensions, and other parts and components; and fiberglass panels, body kits, doors, and insulation foam products. It is also involved in the retail of truck and trailer parts. The company sells its products under the Freighter, Maxi-CUBE, Hamelex White, Lusty EMS, Azmeb, Peki, Colrain, QDS, Maxus, and P anelMasta brand names. It serves transport and logistics, fresh produce, food and beverage, building and construction, agriculture, and natural resources industries. The company was founded in 1946 and is headquartered in Derrimut, Australia.

Top 10 Clean Energy Stocks To Watch For 2014: Proam Exploration Corporation (PMX.V)

ProAm Explorations Corporation engages in the exploration and development of mineral, and oil and natural gas properties in Canada and the United States. It holds interests in the Samuel Lake mineral project, located to the west of the town of Atikokan, Ontario. The company also has working interests in various oil and gas wells located in Pennsylvania, Arkansas, Oklahoma, Ohio, and West Virginia, the United States; and Alberta, Canada. ProAm Explorations Corporation was founded in 1997 and is based in North Vancouver, Canada.

Top 10 Clean Energy Stocks To Watch For 2014: Helen of Troy Limited(HELE)

Helen of Troy Limited, together with its subsidiaries, engages in the design, development, import, marketing, and distribution of brand-name consumer products primarily in the United States and Canada, as well as in Europe, Asia, and Latin America. It operates in three segments: Personal Care, Housewares, and Healthcare/Home Environment. The Personal Care segment offers hair dryers, straighteners, curling irons, hair setters, shavers, mirrors, hot air brushes, home hair clippers and trimmers, paraffin baths, massage cushions, footbaths, body massagers, brushes, combs, hair accessories, liquid and aerosol hair styling products, men?s fragrances, men?s and women?s antiperspirants and deodorants, liquid and bar soaps, shampoos, conditioners, hair treatments, foot powder, body powder, and skin care products. The Housewares segment provides kitchen tools, cutlery, bar and wine accessories, household cleaning tools, food storage containers, tea kettles, trash cans, storage an d organization products, hand tools, gardening tools, kitchen mitts and trivets, barbeque tools, and rechargeable lighting products, as well as baby and toddler care products, including convertible high chair. The Healthcare/Home Environment segment offers humidifiers, de-humidifiers, vaporizers, thermometers, air purifiers, fans, portable heaters, heating pads, and electronic mosquito traps. The company sells its products primarily through mass merchandisers, drugstore chains, warehouse clubs, home improvement stores, catalogs, grocery stores, specialty stores, beauty supply retailers, e-commerce retailers, wholesalers, and various types of distributors, as well as directly online to end user consumers. Helen of Troy Limited was founded in 1968 and is based in Hamilton, Bermuda.

Top 10 Clean Energy Stocks To Watch For 2014: SMURFIT KAPPA GROUP PLC ORD EUR0.001(SKG.L)

Smurfit Kappa Group Plc, together with its subsidiaries, manufactures, distributes, and sells paper-based packaging products in Europe and Latin America. It offers paper and board products comprising containerboards, solid and packaging boards, and specialty boards; base materials graphic and printing products; and packaging intermediates, including pre-printed liners, corrugated boards, sheet feedings, Fanfold, and single face corrugated products. The company also provides packaging products, including boxes, trays, cases, and wraps for fresh food packaging, and food and groceries packaging, as well as for the transport of fast-moving consumer goods; retail ready packaging products, such as shelf ready and promotional packaging products, displays, and merchandising units; bag-in-box packaging products; and primary packaging products for food, non-food, and domestic appliances. In addition, it offers postage and mail order, media and books packaging products, relocation pa ckaging, home storage products, and archive boxes; and industrial packaging products for electronic goods and components, durable goods, furniture, medical products, hazardous goods, and heavy duty goods packaging. The company serves customers in packaging concepts, development and design, supply chain management, and eBusiness solutions fields. Smurfit Kappa Group Plc was founded in 1934 and is headquartered in Dublin, Ireland.

Top 10 Clean Energy Stocks To Watch For 2014: Richelieu Hardware Com Npv (RCH.TO)

Richelieu Hardware Ltd. engages in the manufacture, distribution, and import of specialty hardware and complementary products in North America. The company offers functional cabinet hardware and assembly products, such as traditional and concealed cabinet door hinges, drawer slides, screws, fittings, swivels, lighting products, brackets, and other related cabinet hardware products and specialized tools for manufacturing kitchen cabinets and furniture; and decorative hardware products, including handles, knobs, and mouldings in various finishes and sizes. It also provides high-pressure laminates comprising decorative high-pressure laminates; craft wood veneers; solid surfaces for countertops; decorative tambours; adhesives; and related mouldings and panels in various colors. In addition, the company offers decorative and functional panels, such as particle boards, melamine panels, and medium density fiberboard panels; veneer sheets and edge banding products in wood, melamin e, or polyester, as well as in a range of finishes and sizes; kitchen accessories comprising storage systems, cutlery trays, sinks, Lazy Susans, towel racks, pull-out storage and pantry systems, decorative kitchen accessories, waste bins, and working surfaces; and finishing products, such as lacquers, stains, and varnishes. Further, it provides protection products for hardwood floors; ergonomic workstation components; bulletin boards and scoreboards; and door and window components. The company serves kitchen and bathroom cabinet, furniture, and window and door manufacturers; residential and commercial woodworking industry; and hardware retailers, including renovation product superstores. Richelieu Hardware Ltd. was founded in 1968 and is headquartered in Montreal, Canada.

Top 10 Clean Energy Stocks To Watch For 2014: Mittel(MTTI.MI)

Mittel S.p.A, together with its subsidiaries, provides various financial services in Italy and internationally. It operates in five segments: Operating Finance, Real Estate, Private Equity, Corporate Finance, and Investment Management Advisory. The Operating Finance segment, through Mittel Generale Investimenti S.p.A., provides corporate lending and proprietary trading services. The Real Estate segment, through Mittel Investimenti Immobiliari S.p.A., manages property investments. The Private Equity segment invests in Italian companies through the means of stake acquisitions or closed investment funds. The Investment Management Advisory segment, through ECPI S.r.l., offers various consultancy services, including the production, maintenance, and release of financial indexes, primarily portfolio rating and screening, risk scores, and financial researching. The Corporate Finance segment, through Mittel Corporate Finance S.p.A., offers investment advisory services. The company, formerly known as Mittel ?Societa Industriale Meditarrea S.p.A., was founded in 1895 and is headquartered in Milan, Italy.

Top 10 Clean Energy Stocks To Watch For 2014: Spectris(SXS.L)

Spectris plc designs, develops, and markets productivity-enhancing instrumentation and controls worldwide. It operates in four segments: Materials Analysis, Test and Measurement, In-line Instrumentation, and Industrial Controls. The Materials Analysis segment provides a range of analytical instrumentation and systems for particle and material characterization. These products have applications in pharma/life sciences, metals/mining, semiconductor/electronics, and research industries. The Test and Measurement segment supplies test, measurement, and analysis equipment and software for product design optimization, manufacturing control, and environmental monitoring. The In-line Instrumentation segment provides process analytical measurement, asset monitoring, and on-line controls for primary processing and the converting industries. The Industrial Controls segment supplies automation and control products for the discrete manufacturing industries. The company was formerly known as Fairey Aviation Company Ltd. and changed its name to Spectris plc in May 2001. Spectris plc was founded in 1915 and is based in Egham, the United Kingdom.

Will Abbott's Earnings Wow Wall Street?

Shares of Abbott Laboratories (NYSE: ABT  ) may be up 10.7% since the start of 2013, but this stock has lagged behind the S&P 500 index and many of its health care peers, including Boston Scientific (NYSE: BSX  ) and Johnson & Johnson. Abbott's next big catalyst will be its second-quarter results, which are set to be revealed tomorrow morning, but will earnings wow investors, or will they miss estimates and disappoint?

In the following video, health care analyst Max Macaluso explains the three main sections in tomorrow's report that investors should watch. Special attention should be paid to medical device sales, which weighed heavily on Abbott and other companies in this sector last quarter.

One of the most attractive parts of owning a health care stock like Abbott Labs is its dividend, but smart investors know the importance of diversifying -- seeking high-yielding stocks from multiple industries. The Motley Fool's special free report "Secure Your Future With 9 Rock-Solid Dividend Stocks" outlines the Fool's favorite dependable dividend-paying stocks across all sectors. Grab your free copy by clicking here.

Hot Undervalued Stocks To Watch For 2014

The following video is from Wednesday's MarketFoolery podcast, in which host Chris Hill, along with analysts Jason Moser and Charly Travers, discuss the top business and investing stories of the day.

Yahoo's (NASDAQ: YHOO  ) first-quarter revenue was flat, but display advertising dropped 11%. Bank of America upgraded Yahoo! based on the company's Alibaba stake. But Yahoo! continues to lose ground to Google (NASDAQ: GOOG  ) and Facebook (NASDAQ: FB  ) . In this installment of MarketFoolery, our analysts talk about the future of Yahoo! and explain why CEO Marissa Mayer's leadership may be undervalued.

As one of the most dominant Internet companies ever, Google has made a habit of driving strong returns for its shareholders. However, like many other Web companies, it's also struggling to adapt to an increasingly mobile world. Despite gaining an enviable lead with its Android operating system, the market isn't sold. That's why it's more important than ever to understand each piece of Google's sprawling empire. In The Motley Fool's new premium research report on Google, we break down the risks and potential rewards for Google investors. Simply click here now to unlock your copy of this invaluable resource.

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

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

Advisors' Opinion:

• [By Dug]

  Schlumberger(SLB) continues to lead the sector, particularly outside the U.S. in the growing markets for vertical drilling. Schlumberger remains my favorite. Another smaller company to look at with growing work in complex procedures is Helmerich & Payne(HP).

Hot Undervalued Stocks To Watch 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 Roberto Pedone]

  Caterpillar (CAT) is staging a textbook breakout in May. Shares of heavy equipment maker haven't exactly been kind to investors year-to-date; CAT has barely broken even during a time when the broad market has been in a historic rally. But a textbook breakout should change that.

  CAT started forming an inverse head and shoulders pattern back in early April. The inverse head and shoulders is formed by two swing lows that bottom out around the same level (the shoulders), separated by a lower low called the head; the buy signal comes on the breakout above the pattern's "neckline" level, which was just below $86 for CAT. That puts this stock's upside target right around $92.

  Even though CAT has nearly hit its upside target already (the post-breakout buying has been very quick), the longer-term implication for investors is a break of the downtrend that had been haranguing shares this year. Now, with that downtrend broken, CAT should have more room to move higher. I'd just expect some consolidation first.

• [By Sam Collins]

  Caterpillar (NYSE:CAT) is the world’s largest producer of construction and mining equipment, diesel and natural gas engines, and industrial gas turbines. The stock has been in a bull market since the market bottomed in March 2009. CAT was one of our Top Stocks to Buy for December because of its position as a major supplier to the third world and China. The company should also be a beneficiary of orders from Japan due to the damage from earthquakes and the tsunami.

  Revenues in 2011 are expected to increase by 36%, according to S&P, and margins are expected to increase, as well. Earnings for 2012 are forecast at $9.10, up from $7.50 this year, and S&P has a target of $142 over the next 12 months.

  Technically CAT has strong support at $95 and currently appears to be oversold, according to Moving Average Convergence/Divergence (MACD). If it is able to hold at the support line, look for a rally to $110 within 30 days. Longer term the stock could trade north of $125.

Top Cheapest Stocks To Own 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 Sam Collins]

  Household name Tupperware Brands Corp. (NYSE:TUP) is a global direct seller of products with multiple brands through an independent sales force of 2.4 million people. Its product line focuses on kitchen storage and serving solutions, as well as personal-care products. Over 60% of sales in 2011 are expected to come from Europe and Asia, and the stock has appeal as an emerging markets story.

  S&P estimates that 2011 earnings will increase to $4.54 versus $3.53 in 2010, and it increased its rating to a “five-star strong buy” with a recently revised 12-month target of $81, up from $73. The 2005 purchase of Sara Lee’s (NYSE:SLE) direct-sales business, which has a high growth rate, should be a long-term benefit. TUP’s annual dividend yield is 1.92%.

  Technically TUP had a pullback following a new high at over $70 and is currently oversold. Buy TUP at the current market price with a trading target of $70, but longer term a much higher target will likely be attained.

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

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

Advisors' Opinion:

• [By Sam Collins]

  Dollar Tree (NASDAQ:DLTR) is a leading operator of discount variety stores. The stock has hugged its 50-day moving average since mid-February. But a recent minor revision of earnings for this year by several analysts and the recent market sell-off have resulted in a fall from its high of the year at over $70 to under $66. However, Goldman Sachs (NYSE:GS) increased its price target to $73 from $69.

  Technically DLTR is oversold, according to MACD. A break below its 50-day moving average could result in a pullback to $64, but positions could be taken at the current market price. The trading target for DLTR is $72.