Wednesday, October 31, 2012

Investopedia: The Fiscal Cliff - The Good, Bad, And Ugly

Looming over the stock market, the economy, and the upcoming election is the specter of the so-called "fiscal cliff" - a collection of tax increases and spending cuts that will go into effect on Jan. 1, 2013 if Congress is not able to pass some sort of compromise. As economists and analysts are forecasting an impact to GDP from 2% to 5% in 2013, it's clearly a significant event for investors to consider. What then is the bull/bear scenario as the fiscal cliff approaches?

Please follow the link for more:

Investopedia: At Plum Creek Timber, It's Still A Waiting Game

Certain stocks just stubbornly retain value through good times and bad times - even if that means occasional periods where results aren't so good and the valuation looks too high. That's great if you're a long-term holder who already owns shares, but it can be frustrating if you're on the outside waiting for a good time to buy shares. Conditions have yet to really improve for Plum Creek Timber (NYSE:PCL), but valuation still doesn't offer much of a bargain for new investors.

Please click here to continue:

Investopedia: Johnson Controls Still Reliable, In A Bad Way

When a company is described as "reliable," it's typically meant as a compliment. In the case of Johnson Controls (NYSE:JCI), however, reliability still means that you can usually expect this company to underwhelm. Although this remains a company that could be worth so much more with better financial results (and better management?), I find it difficult to argue for taking a chance on Johnson Controls absent a real path to better results.

Continue reading here:

Investopedia: Armstrong's Ready For The Rebound, But How Much Longer Will It Take?

If you believe that corporate managers should only be judged by the variables they can control, Armstrong Worldwide (NYSE:AWI) has done quite well. While the declines in the residential and commercial building and remodeling markets have hamstrung sales growth, the company's expense structure has been slimmed down and the company maintains strong share in many of its markets. The question now, however, is whether or not the market has already factored in a significant recovery ahead of real improvements in building and remodeling activity.

Please follow the link for more:

Investopedia: Disney Buys Lucasfilm, But Is it A Trap?

For many Star Wars fans, the news that came out Tuesday evening read more like something from The Onion or a Halloween prank. The American media megalith Disney (NYSE:DIS) announced that, not only did it reach an agreement to acquire Lucasfilm from George Lucas for about $4.1 billion, but that a new Star Wars movie would be in theaters by 2015, with many more following thereafter. While this deal looks a little riskier than those for Pixar and Marvel, Disney has a habit of monetizing media franchises more successfully than analysts usually predict.

Please continue here:

Tuesday, October 30, 2012

Investopedia: Clean Harbors Goes Back To Its Roots In A Big Way

Clean Harbors (NYSE:CLH) is an interesting company. Built around hazardous waste collection and disposal, the company remains a leader when it comes to these services, but perhaps not as many investors are aware of how it has also built a large oil and gas services business (largely through acquisitions). At the end of October, however, the company took a big step back to its roots in announcing the acquisition of Safety-Kleen.

Continue here:

Investopedia: ABB's Third Quarter Keeps The Uncertainty High

It seems like the analysis of ABB's (NYSE:ABB) third quarter has a lot to do with an analyst or investor's preconceived notions going into it. ABB fans and bulls found signs of increasing stability and deficits that were neither large nor likely to repeat. More skeptical analysts saw another miss, weakness in orders, and yet another less-than-perfect quarter. I am long these shares, and while I didn't see anything in the third quarter results that scared me, I can understand if other investors would want to wait before adding ABB to their portfolio.

To read more, please click below:

Investopedia: Riverbed Pays Up For Its Next Shot At Growth

The ideal for every business (and investor) is to seamlessly transition from one growth opportunity to another, harvesting cash flow from older businesses and reinvesting it into new opportunities that can continue to expand the business. Not many companies can do this completely on their own, however, and must rely upon acquisitions to improve their growth prospects. That would appear to be the case with Riverbed Technology (Nasdaq:RVBD), as it has agreed to spend approximately $1 billion in cash and stock to expand into the fast-growing application performance management market.

Please click here to continue:

Friday, October 26, 2012

Investopedia: Is Slowing Demand Just A Speed Bump For Old Dominion?

There are plenty of articles out there declaring the doom of trucking, as railroads and intermodal shipping take away the industry's lunch money (I should know, as I've written some of them). However it's important to remember at least two points. First, not all trucking is the same. Second, not all trucking companies are the same. Old Dominion (Nasdaq:ODFL) continues to demonstrate its credentials for "best trucking company in the biz," but investors could get another chance with this stock if economic uncertainties undermine demand in the fourth quarter.

Read the full article here:

Investopedia: Does Maxim Offer Something For Everybody?

Having a favorite semiconductor stock today is sort of an odd concept, as the entire sector has had a tough go of it this year and analysts are increasingly worried about prospects for a 2013 recovery. Nevertheless, Maxim (Nasdaq:MXIM) continues to pick up share with its integrated solutions, and the company offers an attractive dividend yield. While valuation and a high consumer concentration are causes for concern, this may yet turn out to be a very interesting stock in a highly-challenged sector.

To read more, please click here:

Investopedia: Not Even EMC Is Immune To Tech Headwinds

Data storage had been one of the strongest and most predictable segments of tech, but with EMC's (NYSE:EMC) earnings in hand, it's pretty clear that even this market has stalled in the face of more cautious IT spending. On a positive note, EMC continues to gain share in the market and refresh its offerings with new releases. I believe EMC remains one of the best-positioned tech companies today and a good stock to accumulate.

Please continue reading here:

Thursday, October 25, 2012

Investopedia: Fusion-io Grows When Others Can't

Sometimes being tiny helps. In a quarter where much larger storage players such as IBM (NYSE:IBM) and EMC (NYSE:EMC) struggled to grow, Fusion-io (NYSE:FIO) kept the growth momentum going. While being small and having a limited customer base is usually cited as a bad thing, it probably worked in Fusion-io's favor, as those customers continue to see demanding storage needs. Although there's a risk that this more expensive approach to storage will smack into an even tougher macro environment for 2013, the growth potential here remains considerable.

Please continue reading here:

Investopedia: An Ill Wind Blows At F5 Networks

Sometimes the stocks that you don't buy shape your portfolio returns as much as the ones you do buy. That feels true for me right now, as holding off on buying F5 Networks (Nasdaq:FFIV) seems to have spared me a pretty negative reaction to these fiscal fourth quarter results. Although I still believe in the growth story at F5, it's hard to deny that there are more risks and challenges now than over the past year or two.

Continue reading here:

Investopedia: 3M Stuck In The Same Macro Mire

Industrial conglomerate 3M (NYSE:MMM) may be well-balanced in terms of market and regional exposure, and the company scores well on comparative margins and returns on capital, but it is not immune to the sluggishness that we're seeing across the board today amongst international industrial conglomerates. Although the company's organic growth and margins actually compare pretty well on balance, management's lower guidance and caution on 2013 may result in investors hitting the pause button on what has been one of the few big industrials to outperform the S&P this year.

Please follow this link to read the entire article:

Investopedia: Do Weak Bookings Prove Anything About VMware?

For investors bearish on VMware (NYSE:VMW), this was an interesting quarter. Plenty of other software companies (such as IBM (NYSE:IBM), Microsoft (Nasdaq:MSFT) and Oracle (Nasdaq:ORCL)) have talked about weak macro conditions, but VMware's stock was weak going into this report and the bookings number did look pretty soft. Although I happen to be more positive about the long-term fundamentals for VMware, the valuation still leaves plenty of risk for this once (and future?) growth darling.

Please follow this link for more:

Investopedia: Broadcom Stands Out In A Weak Crowd

Against the host of weak sisters that make up most of the semiconductor space today, Broadcom's (Nasdaq:BRCM) product cycle-driven strength really pops out. And yet, the stock really hasn't done all that well over the past year. While I do worry that going long on Broadcom is a crowded trade, it's tough to argue with one of the strongest chip stories available today.

Please read more here:

Investopedia: Illinois Tool Works Slowing More Gently Than Most

If Illinois Tool Works (NYSE:ITW) gets too much criticism for not really delivering dynamic growth in the good times, it's also true that the company doesn't get enough credit for avoiding the worst of the slowdowns. While growth is very definitely slowing at Illinois Tool Works, as it is for almost all industrial companies, the company's margin leverage is impressive nonetheless. As is typically the case, Illinois Tool Works is not especially cheap but it still scores well as a good option for patient investors.

Please click here for more:

Wednesday, October 24, 2012

Investopedia: Weak Volumes Knock The Wind Out Of DuPont

DuPont (NYSE:DD) gets plenty of well-deserved credit for continually remaking itself over the years, and maintaining a focus on markets where it can reap meaningful economic returns. Just because DuPont is well run, however, doesn't immunize it from the markets it serves, and the third quarter saw a big shortfall in volume, revenue and earnings. While I think DuPont remains a high-quality specialty chemicals company with a strong dividend, the value case is a little more challenging to make.

Please follow this link for more:

Investopedia: Hub Group Could Deliver Value, But Mind The Margins

Done right, asset-light transportation/logistics services can be quite lucrative even if the reported free cash flow margins are thin. As one of the larger players in intermodal (and the largest asset-light intermodal company), Hub Group (Nasdaq:HUBG) is taking advantage of the same intermodal growth trends that have been helping rival J.B. Hunt (Nasdaq:JBHT) and boosting the performances of Class 1 railroads such as Union Pacific (NYSE:UNP) and Norfolk Southern (NYSE:NSC). Although Hub Group is vulnerable to a further macroeconomic slowdown and a margin squeeze between rail carriers and customers, there could be worthwhile value in these shares.

Please continue here:

Investopedia: CAT's Slowdown No Long If Or When, But How Long?

The slowdown that has hit industrial companies ranging from Cummins (NYSE:CMI) to Dover (NYSE:DOV) to Honeywell (NYSE:HON) and Caterpillar (NYSE:CAT) has been long in coming and pretty well telegraphed. The economic malaise in Europe and slowdown in China has pressured demand for commodities and slowed the pace of construction - basically a one-two punch to Caterpillar's core businesses. Although the Street responded to CAT's third quarter earnings pretty calmly, I don't think today's valuation is close to washout levels and there could be further downside if the fiscal cliff bites into the U.S. economy and further slows the global economy.

Continue reading here:

Investopedia: Peabody Is The Best Of A Mangy Breed

As investors have come back around to the idea that maybe coal isn't forever doomed, shares of leading coal company Peabody Energy (NYSE:BTU) have rebounded over the past quarter. Better still, Peabody delivered the sort of quarter that ought to remind investors that it is indeed a high-quality operator in the sector. Although Peabody's recent stock market action has taken away a fair bit of the easy money, long-term investors could still have reason to own this name, albeit with some above-average risks.

Please follow this link for the full article:

Tuesday, October 23, 2012

Investopedia: How Many Cuts Does It Take To Reach TI's Center?

Watching Texas Instruments (Nasdaq:TXN) over the past two years reminds me of that candy commercial where a kid asks how many licks it takes to get to the center of the candy. Revisions continue to head lower and investors have to be asking themselves just how much worse things can get before the turnaround finally happens. While I do believe TI has solid margin leverage to a chip recovery, the stock isn't cheap enough to entice me to brave the risks that the recovery takes even longer to achieve.

Please click below to continue:

Investopedia: GE's Results Reflect An Industrial Slowdown, But Valuation Isn't Bad

It wasn't as though there was much doubt about whether industrial markets had slowed down; investors only had to look at the results from companies such as Danaher (NYSE:DHR) or Dover (NYSE:DOV). Nevertheless, the market didn't really like what General Electric (NYSE:GE) had to say, even though organic growth and orders weren't bad relative to peers. GE isn't the cheapest stock out there, but expectations are low and management seems to have cogent ideas about where the company can build value for the long-term.

Please click here for more:

Investopedia: Schlumberger's The Reliable Name In An Unreliable Sector

Given how volatile the energy sector can be, as investors have seen lately with major service providers such as Baker Hughes (NYSE:BHI) and Halliburton (NYSE:HAL), as well as smaller names such as Basic Energy (NYSE:BAS), it's no surprise that Schlumberger (NYSE:SLB) gets the premium that it does. Although it is not immune to the ups and downs of the cycle, this is a company that executes on a consistent basis. While Schlumberger's leading position in energy services offers good leverage, it is worth asking if the stock's premium mitigates the potential returns.

Continue reading here:

Monday, October 22, 2012

Investopedia: Kansas City Southern Has The Growth, But Maybe Not The Value

Kansas City Southern (NYSE:KSU) is an odd duck in the railroad space. Although a Class 1 railroad, it's quite a bit smaller than the likes of Union Pacific (NYSE:UNP) or CSX (NYSE:CSX). Likewise, it often seems to be overlooked - more than a couple of analysts who cover the major rails don't cover Kansas City Southern. On the other hand, this company has uncommonly strong growth prospects, but a valuation to match.

Please continue here:

Investopedia: Baker Hughes Shows That It Can Always Get Worse

Energy services giant Baker Hughes (NYSE:BHI) provides a good example of something I've often said about commodity-related companies - calling/playing a bottom in the cycle is always risky, because these companies have a way of finding new peaks and carving out new troughs that are higher/lower than you think they could be. While Baker Hughes does seem undervalued today, and should be well-positioned to benefit from a recovery in North America and ongoing growth outside, it takes a little faith and even more appetite for risk to buy today on that thesis. By the same token, if you wait for definitive proof of the turn, you'll leave a meaningful amount of capital gains on the table.

Please follow this link for more:

Investopedia: An Unusual Miss (And Sobering Guidance) From Danaher

For a company that rarely misses earning expectations and is typically viewed as a credible commentator on near-term economic conditions, Danaher's (NYSE:DHR) third quarter results can't leave investors feeling too great. Although the company's long-term strategy of growth-through-acquisition and fierce cost efficiency is very likely to continue, the near-term outlook has definitely worsened. Given that this stock has often sported a premium multiple, performance could continue to lag until investors feel more optimistic about the macro outlook.

Read more here:

Investopedia: Union Pacific Already Rewarded For Its Quality

As I mentioned the other day in discussing CSX's (NYSE:CSX) earnings, good companies show their qualities when times get a little tougher. With that in mind, there's little to suggest that Union Pacific (NYSE:UNP) ought to be dethroned as the best railroad at the moment. While the company's pricing and operating expense control is laudable, it's worth asking how much of a premium investors should pay for a best-in-class operator facing some near-term macroeconomic challenges.

Continue by clicking this link:

Friday, October 19, 2012

Investopedia: Has A Bad Year Put Chipotle In Value Territory?

Although the dining industry is not exactly a high-growth industry in the traditional sense, investors have seen repeatedly that the right concept, bought at the right time, can deliver substantial capital gains. Chains such as Red Robin (Nasdaq:RRGB), Cheesecake Factory (Nasdaq:CAKE), Buffalo Wild Wings (Nasdaq:BWLD) and Panera (Nasdaq:PNRA) (and before Panera, its predecessor Au Bon Pain) have all had their runs, but maybe none quite like Chipotle Mexican Grill (NYSE:CMG).

Unfortunately for investors, many seemed to fall into the common trap that valuations didn't matter and Chipotle would always outgrow such tiresome concerns as valuation. With same store sales slowing significantly this year, the stock has tumbled on worries about that growth-value trade-off. While the valuation at Chipotle is as reasonable as it has been in some time, it's still not exactly cheap unless investors believe this company can essentially break the rules when it comes to future growth.

Click below for more:

Investopedia: Can Win8 And Surface Change The Tone On Microsoft?

In some respects, Microsoft (Nasdaq:MSFT) is just like any and every other lower-growth tech story - nobody cares about the value of the cash flow, because the years of market-defining growth are long past. Perhaps it's even worse in the case of Microsoft, as moves towards mobile computing devices, software as service/cloud, and so on threaten the very core of that cash flow. Therefore, while the stock continues to look cheap on the basis of even vestigial growth, new products like Win8 and the Surface tablet really have to work if any of that potential value is going to become real.

Please read more here:

Investopedia: BB&T Takes A Disappointing Step Backwards

I've tried to make the case before that BB&T (NYSE:BBT) was an underappreciated regional bank that really wasn't getting its due from the sell-side community. Now that management missed numbers with higher expenses and revised guidance lower for the next quarter, it's harder to make that argument. Although I fully expect BB&T to spend at least a quarter or two in the penalty box now, I believe the company's loan growth, credit quality, and expansion potential all will pay off in time. As such, while third quarter results frustrate me as a shareholder, I'm not looking to sell at these prices.

Please read more here:

Thursday, October 18, 2012

Seeking Alpha: Boston Scientific Offers More Muddle-Through

It was never part of the plan for Boston Scientific (BSX) to have a sudden return to growth in the third quarter (or 2012, for that matter), so it's hard for me to be disappointed by the numbers that the company continues to post. The driving question for investors continues to be whether the company's seemingly endless restructuring moves and acquisitions will give it a better platform from which to grow, and/or whether the transition to new CEO Mike Mahoney will mark a turning point. Though I'm still skeptical, I have to point out that the rewards for success could be meaningful from today's level.

Please continue here:
Boston Scientific Offers More Muddle-Through

Seeking Alpha: Stagnant Performance, FDA Issues Thump St. Jude

There's a gray area between not overreacting to one or two quarters of underwhelming performance and willingly ignoring emerging bad news about a company. That seems particularly relevant now with St. Jude Medical (STJ), as the company has once again left investors wanting more after earnings. While I am inclined to attribute the sluggish financial performance to a broad weaker-than-expected recovery in med-tech, the greater FDA scrutiny from the company's lead issues is a more troubling development for the next year or so.

Please continue reading here:
Stagnant Performance, FDA Issues Thump St. Jude

Investopedia: Where Can U.S. Bancorp Go From Here?

I've long said that U.S. Bancorp (NYSE:USB) is one of the (if not the) best banks in the United States, and so far nothing in 2012 has led me to rethink that view. Not only has management served investors well with a balanced approach to lending and fee income generation, but the company's capital and credit positions are in excellent shape. At this point, the only real problem with U.S. Bancorp is that other investors are well aware of the bank's quality and the shares don't seem to offer much capital undervaluation at present.

To read more, please follow this link:

Investopedia: PepsiCo Shows That Snacks And Sodas Aren't Bulletproof

As seems to be the case with Coca-Cola (NYSE:KO), PepsiCo (NYSE:PEP) is not presently delivering the sort of results that its premium valuation would seem to demand. Certainly some of this can be tied to investor confidence - Coca-Cola and PepsiCo may wobble from time to time, but they eventually get their affairs in order and get back to the business of wringing above-average profits from strong global brands. That said, while I do believe PepsiCo has some good things going for it, I see no reason to pay up for the stock today.

Please continue here:

Investopedia: ASML And The Obvious - Weak Trends And A Bid For Cymer

In contrast to Applied Materials (Nasdaq:AMAT), which has repeatedly made moves and comments that have left investors scratching their heads, ASML (Nasdaq:ASML) continues to operate and report along highly predictable lines. Although there's evidence that industry conditions are even weaker than previously supposed, ASML didn't really surprise with its third quarter earnings, nor its announcement that it's acquiring Cymer (Nasdaq:CYMI). What is frustratingly less obvious, is what constitutes a fair price to pay for ASML today.

Please continue here:

Investopedia: In Challenging Times, CSX Shows Its Qualities

It's no understatement to say that the earnings warning from Norfolk Southern (NYSE:NSC) spooked investors in the rail sector and focused a great deal more attention on fellow East Coast operator CSX (NYSE:CSX). And yet, a company that still carries historical baggage from below-peer operating performance managed to deliver a satisfactory quarter. Although this rail company is still vulnerable to weakness in coal volume, it may not be a bad pick for investors who want to make a leveraged play on a better economy.

Please click the link to continue:

Investopedia: IBM's Soft Sales Bring A Chill To Tech

Although investors had been lowering their expectations for tech sector growth/performance this quarter, IBM (NYSE:IBM) still managed to spook the Street with soft revenue in both hardware and software. The long-term picture for IBM hasn't changed all that much, though it is likely that tech investors are going to be chewing their nails for at least another quarter. In the meantime, while IBM remains a well-run and comprehensive play on technology, the stock still isn't a great bargain.

To read more, please click below:

Investopedia: Check Point Has To Restore Product Growth To Maintain Service Value

It's probably true that Wall Street predictably and consistently undervalues the service/maintenance revenue streams for tech companies - I thought it was true of Quest, which was recently acquired by Dell (Nasdaq:DELL), and I think it's true of both CA (Nasdaq:CA) and Check Point (Nasdaq:CHKP) today.

The problem for Check Point, though, is that the enterprise security market is changing and it's not clear that Check Point has invested enough R&D dollars to stay competitive. While it will be some time before rivals such as Palo Alto (NYSE:PANW), Fortinet (Nasdaq:FTNT), Sourcefire (Nasdaq:FIRE) or Dell's SonicWall can take their lunch money, better product growth is going to be an essential part of maintaining the value of this business.

Please read more here:

Wednesday, October 17, 2012

Investopedia: Drugs Have Moved J&J On To A New Phase

It took a while, but healthcare giant Johnson & Johnson (NYSE:JNJ) is once again delivering on its potential as a triple-threat in drugs, devices, and OTC consumer and health products. Strong growth in the drug and devices business is very much welcome, but now the question becomes whether management can lead a similar turnaround in OTC. Although J&J looks to be on the cusp of being a good buy, ongoing outperformance does seem predicated on a more well-rounded growth profile in the coming years.

Please continue reading here:

Investopedia: Growth Investors Turn Insecure About Fortinet's Growth

Fortinet (Nasdaq:FTNT) is one of the many growth tech stocks that I've damned with the praise of liking the company and the growth story, but finding the valuation to be too demanding and too vulnerable to disappointment. In the case of Fortinet, it looks like that particular bird came home to roost with third quarter results that weren't really that bad, but not nearly strong enough to keep a hope trade going.

Read more here:

Investopedia: Packaging Corp Shows The Risk Of Underestimating Good Companies

It's well worth remembering that good companies have a way of surpassing expectations and delivering strong results. I should have remembered that lesson last quarter when it came to Packaging Corp of America (NYSE:PKG).

While I have long liked Packaging Corp (aka "PCA") as one of the best-run paper/packaging companies in the country, I didn't see much slack left in the valuation. Yet, not only has the company continued to see good expense leverage, but it has continued to gain share in the market, while enjoying strong industry-wide pricing. That propelled the stock up more than 20% over the past three months.

Please continue here:

Tuesday, October 16, 2012

Investopedia: Coca-Cola Not So Bubbly, But Does It Matter?

It's just one of the realities of investment writing that nobody's ever going to thank you for writing anything negative about well-loved stocks like Coca-Cola (NYSE:KO), Nike (NYSE:NKE) and PepsiCo (NYSE:PEP). But as these stocks have shown over the past year, valuation always matters; all three remain high-quality companies with incredible brands, but all were expensive a year ago and they have underperformed in the market. Although I see nothing fundamentally disturbing about Coca-Cola from a long-term perspective, I wouldn't be in a rush to pay the going rate for its shares.

Please read more here:

Investopedia: There Are Always Clouds In Citigroup's Sky

It's probably too much to hope that money center banks like Bank Of America (NYSE:BAC) or Citigroup (NYSE:C) will ever report completely clean quarters (as there are just too many moving parts), but it seems like it's always something with Citi. While third quarter results looked OK on the surface, there still isn't much sustainable momentum behind the numbers and it's hard to feel great about the company with now-former CEO Vikram Pandit stepping down.

One quarter ago, I did think that Citi was a good pick for aggressive investors, and the stock has climbed nearly 40% since then. Given where valuation is now relative to others such as JPMorgan (NYSE:JPM), Wells Fargo (NYSE:WFC) and U.S. Bancorp (NYSE:USB), the potential disruptions from the leadership transition and the underlying momentum, I'd be less inclined to buy this stock over some of those other high-quality banks.

Please read the full article here:

Investopedia: JPMorgan Still Cheap, But Never Easy

By and large, it looks like investors continue to prefer the regional banks to the money center banks such as JPMorgan (NYSE:JPM), Citi (NYSE:C) and Bank Of America (NYSE:BAC). To a certain extent, this makes sense - the regional banks are simpler to understand, less volatile (due in part to less reliance on trading and investment banking), and less of a soft target for litigation. That said, while JPMorgan's trading losses earlier this year highlight the fact that no bank with a prop desk is ever completely safe, today's valuation seems to undervalue not only the company's balance sheet and array of businesses, but the quality of its management and growth opportunities.

Please read more here:

Investopedia: The Softbank-Sprint Tie-Up Seems Like Only The Beginning

Sprint Nextel (NYSE:S) has always seemed to be uncommonly controversial for a carrier. Not only has the company had its ups and downs with mergers and acquisitions, but the Street has never seemed entirely comfortable with the its plans vis-a-vis Clearwire (Nasdaq:CLWR). Even now, after the company has reached an agreement to sell a controlling stake to Japan's SoftBank, it doesn't look like there's any imminent end to the controversy and uncertainty.

Please continue here:

Investopedia: Is Infosys Losing Ground In IT Services?

IT services is a lucrative market, as investors in IBM (NYSE:IBM), Accenture (NYSE:ACN) and Cognizant Technology Solutions (Nasdaq:CTSH) know quite well. As one of the largest players, India's Infosys (Nasdaq:INFY) has enjoyed ample growth over the years, but the question is whether the company is still well-positioned to exploit ongoing growth in service outsourcing. Although the valuation does not look especially demanding today, it's worth asking whether management can stabilize its margins and hold (or gain) share in a still-growing market.

Please follow this link for more:

Investopedia: Ecolab Continues A Switch From Defense To Offense

It's not uncommon for companies to transition to defensive plays as established market share, economic moats and slowing end-market growth discourages its new entrants. What's more, there's nothing wrong with defensive companies - they can enjoy solid margins and cash flows, and they often pay healthy (and reliable) dividends.

It's not so common, however, to see defensive companies aggressively seek to become more offensive. This transition not only creates a large amount of execution risk, it also demands capital that more conservative investors usually prefer to see directed towards dividends and buybacks. Nevertheless, Ecolab (NYSE:ECL) continues to push on with an acquisition program that has meaningfully altered its business mix and given it greater long-term growth potential.

Please continue here:

Monday, October 15, 2012

Investopedia: Fastenal's Valuation Leaves No Room For A Slowdown

Make no mistake - Fastenal (Nasdaq:FAST) is a great company, and a good play on the consolidation of the industrial supply market. That said, Fastenal's stock carries a valuation more commonly seen in hot technology stocks than in the industrial sector. Consequently, while I do believe Fastenal has a runway to becoming one of the largest players in a market worth over $150 billion, the stock already seems to be assuming a great future.

Please click this link to continue:

Investopedia: A Wobbly Quarter Could Threaten Well Fargo's Premium

Wells Fargo (NYSE:WFC), along with other "super-regionals," such as U.S. Bancorp (NYSE:USB), PNC (NYSE:PNC) and BB&T (NYSE:BBT), occupies appealing real estate. The firms are big enough to secure cheap credit and massive operating scale, but they don't engage in the same level of volatility-inducing investment banking or proprietary trading as the big money center banks, nor do they carry quite the same regulatory burdens.

All of that said, performance still drives ultimate valuation, and Wells Fargo took a little stumble in the third quarter. One quarter is not enough data to make sweeping judgments about market share or management's strategy, but it may be enough to threaten what has been a premium-to-peers valuation.

Please click here to continue:

Friday, October 12, 2012

Seeking Alpha: Lexicon Pushes On To Phase III

Lexicon Pharmaceuticals (LXRX) still isn't what I'd call a household name in biotech, even though the company has over $1 billion in market capitalization and at least two solid drug product candidates. With Friday's news of a successful Phase II study in carcinoid syndrome and the launch of a Phase III study, Lexicon investors have good reason for a little cheer going into the weekend.

Please continue here:
Lexicon Pushes On To Phase III

Seeking Alpha: Will New Leadership Bring Evolution Or Revolution To Accuray?

Accuray (ARAY) has really never enjoyed smooth sailing. Not only has the company sought to break into the radiation oncology space (at the expense of strong incumbents Varian (VAR) and Elekta (EKTAY.PK), but it has done so at a time when hospital capital budgets are already under a great deal of strain. More recently, the company executed a controversial acquisition of TomoTherapy, and while the company has made good progress on margin improvements, order growth has been elusive.

Continue here:
Will New Leadership Bring Evolution Or Revolution To Accuray?

Investopedia: Investors Still Paying Up For J.B. Hunt's Uncommon Growth Prospects

Once again I find myself in a familiar place with J.B. Hunt (Nasdaq:JBHT). I like this growing intermodal services provider, and I do believe it's one of the most compelling organic growth stories in the transportation sector. On the other hand, I don't like how growth-starved investors have bid up the shares of this company to a level where I believe outperformance could prove difficult.

To read more, please click below:

Investopedia: Transformation Has Paid Off For Ashland

When investors consider why companies such as Albemarle (NYSE:ALB), PPG (NYSE:PPG) and Huntsman (NYSE:HUN) go about the process of remaking themselves, a quick look at Ashland (NYSE:ASH) may offer some explanation. Once largely a refining and marketing company, Ashland has remade itself into a diversified specialty chemicals company. Now the question is whether this transformation can lead a company with perpetually poor free cash flow conversion and returns on capital to better results over the long term.

To read more, please follow this link:

Investopedia: Should Oshkosh Investors Take Icahn's Money And Run?

Well-known investor Carl Icahn has been agitating for various changes at specialty commercial and defense truck manufacturer Oshkosh (NYSE:OSK) for some time now. On October 10, 2012 Mr. Icahn ratcheted things up a notch - making an offer to the company's board to take the company private for $32.50 per share in cash. Should investors push the board to cash out, or should they hope that the board rebuffs Icahn and continues on as an independent publicly-traded company?

Please click here for more:

Thursday, October 11, 2012

Investopedia: AptarGroup - When A Great Business Doesn't Mean A Great Stock

I wish I could like AptarGroup's (NYSE:ATR) stock as much as I like the business. After all, there's something to be said for a company that has leveraged its expertise in valves, pumps and closures to become a leading player in products like fine-mist spray pumps, lotion pumps, nasal spray pumps and a variety of innovative food and beverage packages. Unfortunately, it looks like the Street is already well acquainted with the good points of this company, and the stock sports a fairly demanding valuation.

Please follow this link for more:

Investopedia: Even With Continued International Deceleration, Yum! Still Popular

Sometimes it seems that Wall Street just wants to like a company/stock, and even decelerating growth doesn't end the love affair. Yum! Brands (NYSE:YUM) is indeed a well-run company, but whereas investors have sold off many stocks on worries about slowing emerging market economies, the multiples here have stayed robust. Shares of this global quick service restaurant (QSR) remain a quality hold, but demanding growth assumptions make the "buy now" case a bit more difficult.

Continue reading here:

Wednesday, October 10, 2012

Investopedia: Helen Of Troy Wilting Into The Fall

As a small, highly-leveraged company that must compete with brand-name goliaths such as Clorox (NYSE:CLX), Procter & Gamble (NYSE:PG) and Unilever (NYSE:UL) on a daily basis, it's not altogether surprising that Helen Of Troy (Nasdaq:HELE) shares can be very volatile. Today's poor growth numbers are certainly a concern, as are the company's long-term market position and cash flow leverage, but aggressive investors may see opportunity emerging in a company that has often been knocked down, only to rise once again.

Please read more here:

Investopedia: September Rail Data - Coal Still Weak, Are Industrials Next?

With another month in the books, U.S. railroad traffic still seems to fit and support a "cautiously optimistic" sort of outlook. Traffic growth is absolutely down relative to the post-recession recovery, but still continues to push in a positive direction. That said, data pointing to a slowing U.S. economy have started worrying investors in these stocks - while the Dow Jones U.S. Railroads Index is up more than 20% over the past year, September was a rough month.

Please read more here:

Investopedia: Alcoa Is A Potential Value Call

Alcoa (NYSE:AA) is looking like a pretty good example of a company that is doing a lot of the right things internally, but can't make much objective progress in the face of significant industry and economic headwinds. Alcoa seems better positioned than Noranda (NYSE:NOR), Century Aluminum (Nasdaq:CENX) or Rio Tinto (NYSE:RIO), and the stock is trading below historical forward multiples, but it seems hard to imagine the stock really moving until aluminum prices improve.

Continue reading here:

Tuesday, October 9, 2012

Investopedia: Stanley Black & Decker And Spectrum Brands Both Get What They Want

Stanley Black & Decker (NYSE:SWK) wants to be involved with businesses with global reach, as well as find a happy medium between consumer, construction and industrial market exposures. Spectrum Brands (NYSE:SPB) wants quality brands that can offset competition from Procter & Gamble (NYSE:PG) and Energizer (NYSE:ENR), while also producing good cash flow. These two wants came together on Tuesday morning with the announcement that Spectrum Brands is buying the Hardware and Home Improvement (HHI) business of Stanley Black & Decker for $1.4 billion in cash.

Continue here:

Investopedia: Is Telecom The Next Squabbling GRound For The U.S. And China?

It's unfortunate, but the reality of politics in America these days is that it's sometimes hard to tell the difference between political posturing for the benefit of the constituents who watch TV and legitimate issues of national importance. Take the recent report from the U.S. House Intelligence Committee that recommends U.S. companies and government agencies avoid doing business with Chinese firms Huawei and ZTE - is this a legitimate concern for U.S. security, or just an unnecessary pre-election kerfuffle?

Perhaps even more critical to investors, however, is the question of whether Congress intends to put any real force behind this recommendation, and whether there will be consequences for American hardware vendors such as Cisco (Nasdaq:CSCO) and Juniper (Nasdaq:JNPR).

Please click here for more:

Friday, October 5, 2012

Investopedia: Is There Hope For HP?

It's probably lucky for Hewlett-Packard (NYSE:HPQ) that Apple (Nasdaq:AAPL) and Facebook (Nasdaq:FB) capture so much market attention these days, as this tech company's decline from the spring of 2010 has been nothing short of brutal. Now with a sobering analyst day in the rear-view mirror and guidance for a multi-year turnaround in place, do investors still have reason to hang on in hopes of a turnaround at HP?

Please continue here:

Investopedia: A Much Better PPG, But Not Cheap

Many chemical companies, including Huntsman (NYSE:HUN), are trying hard to divest commodity businesses in favor of higher-margin and more consistent specialty or differentiated product lines. With an upcoming transaction with Georgia Gulf (NYSE:GGC) that will see it shed its commodity chlor-alkali business, PPG (NYSE:PPG) is taking another strong step in that direction. Although PPG's strong share in specialty coatings and growth potential in areas such as optical and specialty materials are quite attractive, the stock's strong performance this year seems to discount a lot of this already.

Please continue here:

Investopedia: Should Debt Matter At Virgin Media?

In some respects, cable TV/Internet businesses ought to work like utilities. It takes a lot of capital to build the infrastructure, but once it's in place customers send in monthly checks like clockwork. It's never quite worked out that way, however, as seemingly never-ending capital demands have prevented many of these companies from turning into steady dividend-generating machines.

Virgin Media (Nasdaq:VMED) is an interesting case study. On one hand, the company's high-quality network is valuable and the company has consistently delivered on ARPU. On the other hand, the company faces competition from conventional competitors such as British Sky (Nasdaq:BSYBY) and BT Group (NYSE:BT), as well as content rivals such as Netflix (Nasdaq:NFLX), Amazon (Nasdaq:AMZN), Google (Nasdaq:GOOG) and Apple (Nasdaq:AAPL). Worse still, the company's huge debt load crushes a discounted cash flow model - leading to the question of how much debt should matter to investors.

Please follow this link for more:

Investopedia: How Apple's Fortunes Affect Other Stocks

To a certain extent, financial media these days is "all Apple (Nasdaq:AAPL), all the time." When you consider the significance and impact of Apple's performance and health on the entire market ecosystem, that level of attention doesn't seem quite so outlandish. For better or worse, the health of Apple shapes the fortunes of a large number of stocks and to some extent, the markets themselves.

Continue here to the full article:

Thursday, October 4, 2012

Seeking Alpha: Ingersoll-Rand And The Power Of Change

When I last wrote on Ingersoll-Rand (IR) in February, I thought that this industrial conglomerate was the sort of perennial underachiever that could do well if and when management started delivering better results and the market really bought into the idea of reliable improvement. Although it's still early, it looks like Nelson Peltz's involvement with the company has improved sentiment, and it does look like management has credible plans for healing what has been a long record of underperformance.

To read more, please follow this link:
Ingersoll-Rand And The Power Of Change

Seeking Alpha: Back To Square One For NuVasive?

Just when it seemed like small-cap orthopedic company NuVasive (NUVA) had significantly quelled worries about competition (and/or market share), overall market growth, and its business model, an earnings warning for the third quarter has thrown it all back into doubt. Although the magnitude of the company's miss doesn't seem enormous, I already had my concerns about the valuation on these shares and it looks like NuVasive is going to have to sit in the penalty box for at least a little while.

Please read more here:
Back To Square One For NuVasive?

Investopedia: WABCO's Quality Already Reflected In The Stock

Investors have gotten pretty skittish about vehicle part/component suppliers, even if quality companies overweighted towards commercial and/or emerging markets are getting an incremental premium. With good cash flow and solid (albeit erratic) returns on capital, WABCO (NYSE:WBC) stands out as a quality commercial vehicle original equipment manufacturers (OEM) supplier and unfortunately the stock reflects that.

Continue reading here:

Investopedia: Ubiquiti Networks - Definitely Different, But With Uncertain Prospects

Every so often, an investor will come across a company that flummoxes them, and Ubiquiti Networks (Nasdaq:UBNT) is one such company. I love the idea of providing attractively priced wireless equipment to developing countries and exploiting the gap between broadband demand and capacity. On the other hand, the company's model is unconventional, to say the least, and recent issues with counterfeiting may well highlight some of the serious risks of that model. Overall, Ubiquiti ends up looking like a classic high-risk/high-reward story - if it works, it will work very well, but if it doesn't, there won't be many places to hide.

Please follow this link for more:

Wednesday, October 3, 2012

Seeking Alpha: Don't Judge Monsanto By A Slow Quarter

While the market's reaction to Monsanto's (MON) earnings has calmed a bit as of this writing, investors were initially quite unimpressed with the results. While missing a quarterly number and/or lowering guidance relative to consensus is never a good thing, it would be a mistake to assume that Monsanto's seasonally weak fourth quarter gives a good read on near-term results. Given this company's technical leadership and management's "under-promise, over-deliver" inclinations, I'm in no hurry to cash out of these shares.

Please read the full article here:
Don't Judge Monsanto By A Slow Quarter

Investopedia: Post-Robbery, Repsol Still Has Promise

This has been Repsol's (OTC:REPYY) annus horribilis, as the Argentine government's decision to steal YPF (or "nationalize"/"expropriate", if you prefer) walloped the stock and forced Repsol's management to re-evaluate the company's core operating priorities and capital structure. While I would never suggest that losing a business as large as YPF is a long-term positive for the company, this restructuring was arguably overdue and Repsol has a lot of appealing production/reserve growth potential.

Please click below for more:

Investopedia: Does A Shake Up At Seadrill Really Change Anything?

Ordinarily, a sudden change in management during a highly valued growth/momentum story would be expected to shake up the stock. But then Seadrill (NYSE:SDRL) has never been an ordinary story and it looks like the markets aren't too troubled by news of a new CEO and a possible corporate relocation. While I'd be inclined to agree that Wednesday's news really doesn't change a lot for the company, valuation is still pretty robust on this name.

Please read more here:

Investopedia: Should Huntsman Really Be Trading At Such A Discount?

Relative performance can be a tricky metric to use when assessing whether a particular company's stock is getting its due in the market; significant factors like debt, margins and management's competence all make a difference. Nevertheless, the valuation on Huntsman (NYSE:HUN) puzzles me a bit, especially in relation to other chemical companies such as Albemarle (NYSE:ALB), Ashland (NSYE:ASH), Dow (NYSE:DOW) and BASF (OTC:BASFY). Although Huntsman has not fully executed a transition to a specialty chemicals company and there is a lot of debt here, this could be an interesting name to watch.

Please click on this link for more:

Tuesday, October 2, 2012 Everything You Need To Know About The Apple Dividend

As Apple (AAPL) piled up billion after billion of dollars of excess cash in the bank, questions swirled about how the company would use that cash. Of course, we now know at least part of the answer — Apple re-initiated a dividend and will begin returning some of that cash to its shareholders through quarterly dividends and a multi-year, multi-billion dollar buyback program. Here are some essential facts to consider with the Apple dividend.

Click here to continue: Profiling 7 Companies That Have Raised Dividends For 25 Years

There is more to successful dividend investing than simply spotting high yields. Rather, the most successful dividend stock investments are those where the company’s underlying fundamentals continue to improve and where ongoing free cash flow growth can continue to support higher payouts. The following, then, are seven companies that have been uncommonly strong dividend growth stories over the past 25 years.

Please read the full article here:

Seeking Alpha: Is ImmunoGen More Than T-DM1?

One of the crueler aspects of biotech is that investors can be right about a technology or drug, but still not make much money from it. Bad deals, bad management, and mismanaged expectations can sometimes do harm that even blockbuster drugs can't fix. While I don't think any of that applies to ImmunoGen (IMGN), I do wonder how much value lies in this company's Targeted Antibody Payload (TAP) technology (basically the company's own antibody drug conjugate approach).

Please read more here:
Is ImmunoGen More Than T-DM1?

Investopedia: Cabot - Higher Risk, But Greater Opportunities

Not many North American companies want to be in the commodity chemicals business anymore, and more and more of that business has migrated to countries such as China, India and Brazil. So, like many other chemical companies, Cabot (NYSE:CBT) has worked hard to remake itself into more of a specialty chemical company with differentiated products. Global sluggishness isn't helping the business at the moment, and the combination of elevated debt and historically unimpressive margins are risk factors, but changes in how the company does business could lead to better long-term results.

Please click this link for more:

Investopedia: At The Right Price, Albemarle Would Be A Great Idea

There's a big difference between commodity chemical companies and specialty chemical companies - both can make you money, but companies with more of a commodity orientation have to be sold more nimbly. That's not to say, however, that investors can just buy a company like Albemarle (NYSE:ALB) whenever they may like. While this is a very interesting and well-run chemical company, today's valuation doesn't offer much discount despite multiple challenges to the business.

Please read more here:

Investopedia: McCormick - Great Company, Not-So-Great Price

When a company has paid dividends for the better part of a century, clearly it is doing something right. McCormick (NYSE:MKC) has a great business and management runs it well, but investor expectations run pretty hot for this leading spice company. While I can understand how investors may feel that overpaying for McCormick is preferable to taking a risk on a lesser company, I'd be cautious about paying so much relative to its growth potential.

Please read more here:

Monday, October 1, 2012

Financial Edge: What About Canada's Housing Bubble?

There's a line from Tolstoy's "Anna Karenina" that says, "Happy families are all alike; every unhappy family is unhappy in its own way." I'm inclined to say that that's also broadly true of bubbles. Apart from some superficial differences that may convince participants that it's somehow different this time, bubbles seem to follow some familiar patterns. With that in mind, Canadians may want to take a closer look at their own housing market, lest it go through the same spasms that have knocked the wind out of the U.S. housing market and the broader economy.

Please read the full column here:

Seeking Alpha: AstraZeneca Suspends The Buyback: Let The M&A Speculation Commence

With new CEO Pascal Soriot just getting comfy in the CEO chair at AstraZeneca (AZN), he lost little time in making a mark on the company. On Monday, the large (but struggling) but British drug company announced that it would suspend its buyback pending a "review of the company's strategy". While it certainly makes sense that the new CEO may just as soon keep $2 billion on hand (the company has completed $2.3 billion of an approved $4.5 billion buyback) for the time being, there are widespread assumptions that this is prelude to a larger deal.

Please continue here:
AstraZeneca Suspends The Buyback: Let The M&A Speculation Commence

Commodity HQ: 5 Best-Performing Commodities Of 2012

Through the end of September, 2012 has by and large been another solid year for commodities. Measuring commodity performance can be a little tricky though, as many commodity ETFs and ETNs hold various contracts throughout the year and roll those contracts according to their investment mandate. What that means is that ETF/ETN performance can vary from the underlying commodities [for more commodity ETF news and analysis subscribe to our free newsletter].

While many regular investors do find that commodity futures offer certain advantages as investment options, a large number look to get their exposure through ETFs and ETNs, and it is the performance of these vehicles that we will use as proxies for this article.

Please continue here:

Commodity HQ: 5 Commodity ETFs With Active Options

Options are, and please pardon the obvious pun, an invaluable option when it comes to crafting trading and investment strategies. At the simplest level, options offer a relatively simple and straightforward form of leverage for investors who want more to pursue more aggressive strategies. Options can also be very useful in hedging risk, creating income from securities that do not otherwise pay dividends, and executing strategies that exploit mispricings tied to volatility, timing and other factors.

While there are a host of stocks with active (liquid) options contracts, and likewise many liquid index options, that’s not always the case with options on ETFs. It’s also very important to note that while index options are European-style, ETF options are American-style options. All of that said, here are some of the commodity-related ETFs with the most active options [for more commodity ETF news and analysis subscribe to our free newsletter].

Please read more here:

Commodity HQ: 5 Highest-Yielding Commodity ETFs

Earning income from commodity investments typically requires some work and creativity on the part of investors. After all, gold bars and barrels of oil don’t pay out any income in and of themselves. That means that investors who want yield from their commodity investments need to either periodically sell part of their position to replicate income, or they need to invest in shares of commodity-related companies that do pay dividends.

As is often the case, ETFs can offer many advantages to investors (like enhanced diversification). When looking at high-yield ETFs, though, investors need to exercise some caution. Like mutual funds, ETFs will sometimes include capital gains distributions and/or returns of capital in addition to ordinary income dividends. In the case of commodity ETFs, investors also need to realize that the dividend payout of many foreign companies can vary significantly from year to year and may include special dividend payments that boost the backward-looking yield numbers [for more commodity ETF news and analysis subscribe to our free newsletter].

Please continue here:

Investopedia: 3M Takes On A Little Risk For A Potentially Great Deal

Although I've owned 3M (NYSE:MMM) for years and have great respect for the company's consistently excellent returns, I nevertheless was not too impressed with the acquisitions announced under former CEO Buckley's tenure. By and large, I thought the company was too cautious and too focused on uninspiring tuck-in deals. It looks, though, like current CEO Thulin is much more willing to push the envelope, and the company's acquisition of Ceradyne (Nasdaq:CRDN) looks like the sort of deal that could quietly pay off very well in the years to come.

Please read more here:

Investopedia: China Still A Pebble In Nike's Shoe

The investment community seems to have locked on to Nike's (NYSE:NKE) "China problem," and this quarter's results aren't going to help. The good news is that investors can still take advantage of this situation to build a position in a stock that very rarely ever gets down to a fair price, let alone cheap. The bad news, however, is that results could slow in the interim and Wall Street is very much a "what have you done for me lately?" sort of business.

To read more, please follow this link:

Seeking Alpha: Is Moody's Late To The Drug Party?

Ratings agencies received a lot of criticism for their handling of debt ratings during the waning days of the housing bubble and the resulting crash-crunch. If Moody's (MCO) recent upgrade of the pharmaceutical sector is any indication, it looks like they may not have improved their timeliness all that much. In fact, investors approaching the Big Pharma sector today aren't likely to find many bargains and may in fact be buying into a somewhat overheated market.

Please click here for more:
Is Moody's Late To The Drug Party?

Seeking Alpha: Is Biotech Getting Too Frothy? Investor Sentiment Suggests Irrational Exuberance

Investors with many years of experience in biotech know there's something to the idea that the best time to prepare for war is during peace (and vice versa). With the biotech sector heading for its second straight year of strong returns, it's worth asking whether investors are getting a little too cavalier about risk and whether investors in the sector are getting set up for a sizable correction.

Please continue here:
Is Biotech Getting Too Frothy? Investor Sentiment Suggests Irrational Exuberance