Hot Cheap Companies To Own For 2014

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 Alliance Fiber Optic Products (NASDAQ: AFOP  ) have surged nearly 13% today after the company bested the Street's earnings consensus and offered strong guidance for the upcoming quarter.

So what: Alliance's revenue rose 65% year over year to $19 million, narrowly missing the $19.1 million consensus but nevertheless posting marked improvement. Earnings per share came in at $0.49, $0.02 better than the lone estimate. For the in-progress third quarter, Alliance anticipates revenue in the $19.5 million to $20.5 million range, which is better than the flat $19.1 million revenue consensus.

Now what: Analysts weren't expecting much out of Alliance on a sequential basis, so any improvement was bound to get some attention. This also seems to be a strong refutation of the recent B. Riley downgrade to "hold" status, as analyst Dave Kang mentioned last week that he found it difficult to believe that a $19-million-plus revenue level could be sustainable. Alliance's current 27 P/E isn't particularly cheap, but with this kind of growth on the way (even the low-end projection would be a big boost over last year's Q3 revenue of $12.4 million), it's not exactly nose-bleed expensive, either.

Hot Cheap Companies To Own For 2014: SMTC Corporation(SMTX)

SMTC Corporation provides advanced electronics manufacturing services to original equipment manufacturers (OEMs) worldwide. The company?s services include product design and engineering services, printed circuit board assembly production, enclosure fabrication, systems integration, testing, and configuration services. It also provides enclosure and precision metal fabrication, cable assembly, interconnect, and engineering design services. The company offers its integrated contract manufacturing services to OEMs and technology companies primarily in the industrial, computing and networking, communications, consumer, and medical market segments. SMTC Corporation was founded in 1985 and is based in Markham, Canada.

Hot Cheap Companies To Own For 2014: Merck & Company Inc.(MRK)

Merck & Co., Inc. provides various health solutions through its prescription medicines, vaccines, biologic therapies, animal health, and consumer care products. The company?s Pharmaceutical segment provides human health pharmaceutical products, such as therapeutic and preventive agents for the treatment of human disorders in the areas of bone, respiratory, immunology, dermatology, cardiovascular, diabetes and obesity, infectious diseases, neurosciences and ophthalmology, oncology, vaccines, and women's health and endocrine. This segment also offers human health vaccines, such as preventive pediatric, adolescent, and adult vaccines. Its Animal Health segment discovers, develops, manufactures, and markets animal health products. This segment offers antibiotics, anti-inflammatory products, vaccines, products for the treatment of fertility disorders, and parasiticides for cattle, swine, horses, poultry, dogs, cats, salmons, and fish. The Consumer Care segment develops, manufac tures, and markets over-the-counter, foot care, and sun care products. Its over-the-counter product line includes non-drowsy antihistamines; treatment for occasional constipation; decongestant-free cold/flu medicine for people with high blood pressure; nasal decongestant spray; and treatment for frequent heartburn. This segment?s foot care products comprise topical antifungal, and foot and sneaker odor/wetness products; and sun care products include sun care lotions, sprays and dry oils; and sunburn relief products. The company serves drug wholesalers and retailers, hospitals, government agencies, physicians, physician distributors, veterinarians, animal producers, and managed health care providers, as well as food chain and mass merchandiser outlets in the United States and Canada. Merck & Co., Inc. was founded in 1891 and is headquartered in Whitehouse Station, New Jersey.

Advisors' Opinion:

• [By Dividend]

  Merck (MRK) has a market capitalization of $138.39 billion. The company employs 81,000 people, generates revenue of $47.267 billion and has a net income of $6.299 billion. Merck�� earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $22.343 billion. The EBITDA margin is 47.27 percent (the operating margin is 18.49 percent and the net profit margin 13.33 percent).

• [By Matt Thalman]

  Lastly, shares of Merck (NYSE: MRK  ) lost 0.28% today after it was announced that federal regulators will not approve high doses of an insomnia medication that Merck is currently experimenting with. The reason for denying the approval was related to concerns about patient safety. At higher levels of the medication, patients in the testing group experience daytime drowsiness, trouble staying alert when behind the wheel of a vehicle, and suicidal thoughts. These are all typical side effects from sleeping medications, but Merck had aimed at reducing the severity of the morning-after fatigue. �

Top Blue Chip Companies To Buy Right Now: Express-1 Expedited Solutions Inc.(XPO)

XPO Logistics, Inc. provides third-party logistics services using a network of relationships with ground, sea, and air carriers in the United States, Mexico, and Canada. It operates in three segments: Express-1, Concert Group Logistics, and Bounce Logistics. The Express-1 segment offers ground expedited surface transportation services for freight. It operates a fleet ranging from cargo vans to semi tractor trailer units. The Concert Group Logistics segment provides domestic and international freight forwarding services through a network of independently owned stations. Its domestic freight forwarding services include air charter, expedites, and time sensitive services, as well as cost sensitive services comprising deferred delivery, less than truckload, and full truck load services; and international freight forwarding services consist of on-board courier and air charters, time sensitive services, less-than-container and full-container-loads, and vessel charters. This segm ent also offers documentation on international shipments, customs clearance and banking, trade show shipment management, time definite and customized product distributions, reverse logistics and on site asset recovery projects, installation coordination, freight optimization, and diversity compliance support services. The Bounce Logistics segment provides premium freight brokerage services for truckload shipments. The company serves approximately 4,000 retail, commercial, manufacturing, and industrial customers through 6 U.S. operations centers and 22 agent locations. It offers its services to the automotive manufacturing, automotive components and supplies, commercial printing, durable goods manufacturing, pharmaceuticals, food and consumer products, and high tech sectors. The company was formerly known as Express-1 Expedited Solutions, Inc. and changed its name to XPO Logistics, Inc. in September 2011. XPO Logistics, Inc. was founded in 1989 and is based in Buchanan, Michi gan.

Advisors' Opinion:

• [By Travis Hoium]

  What: Shares of XPO Logistics (NYSE: XPO  ) jumped 13% today after announcing an acquisition.

  So what: The company will pay $365 million for logistics provider 3PD, consisting of $357 million in cash an $8 million in XPO restricted stock. Is will use its own cash and borrow $195 million from Credit Suisse Group for the remainder of the purchase. �

Hot Cheap Companies To Own For 2014: Alliance Holdings GP L.P.(AHGP)

Alliance Holdings GP, L.P., through its subsidiaries, produces and markets coal primarily to utilities and industrial users in the United States. It produces a range of steam coal with varying sulfur and heat contents. The company operates nine underground mining complexes in Illinois, Indiana, Kentucky, Maryland, and West Virginia. As of December 31, 2010, it had approximately 697.4 million tons of proven and probable coal reserves in Illinois, Indiana, Kentucky, Maryland, Pennsylvania, and West Virginia. In addition, the company leases land; and operates a coal loading terminal, with a capacity of 8.0 million tons with ground storage of approximately 60,000 to 70,000 tons, on the Ohio River at Mt. Vernon, Indiana. Further, it engages in purchasing and selling coal; and providing services, including ash and scrubber sludge removal, coal yard maintenance, and arranging alternate transportation services. Alliance GP, LLC, serves as the general partner of the company. Allian ce Holdings GP, L.P. is based in Tulsa, Oklahoma.

Advisors' Opinion:

• [By Seth Jayson]

  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 Alliance Holdings GP (Nasdaq: AHGP  ) , whose recent revenue and earnings are plotted below.

Hot Cheap Companies To Own For 2014: Global Payments Inc.(GPN)

Global Payments Inc. provides electronic transaction processing services for merchants, independent sales organizations (ISO), financial institutions, government agencies, and multi-national corporations located in the United States, Canada, Europe, and the Asia-Pacific region. It offers a comprehensive line of processing solutions for credit and debit cards; business-to-business purchasing cards; gift cards; and electronic check conversion and check guarantee, verification, and recovery, including electronic check services, as well as terminal management. The company also offers proprietary software products to establish revolving check cashing limits for the casinos? customers in the gaming industry. In addition, it sells, installs, and services automated teller machine and point of sale terminals; and provides card issuing services, including card management and card personalization. The company markets its products directly, as well as through ISOs, retail outlets, tra de associations, alliance bank relationships, and financial institutions. Global Payments Inc. has a joint venture with La Caixa Group to provide merchant acquiring services to merchants in Spain. Global Payments Inc. was founded in 2001 and is headquartered in Atlanta, Georgia.

Advisors' Opinion:

• [By Monica Gerson]

  Global Payments (NYSE: GPN) is expected to post its Q1 earnings at $0.95 per share on revenue of $623.79 million.

  Synergetics USA (NASDAQ: SURG) is projected to post its Q4 earnings at $0.06 per share on revenue of $17.01 million.

• [By Ben Levisohn]

  Global Payments�(GPN) has gained 6.8% to $54.12 in pre-open trading after the payment processing company reported a profit of $1 a share, beating analyst forecasts of 95 cents. It also said it would buy back stock.

Hot Cheap Companies To Own For 2014: Local.com Corporation(LOCM)

Local.com Corporation operates as an Internet search advertising company that enables businesses and consumers to find each other and connect locally. Its Owned and Operated business unit manages its flagship online property Local.com and a proprietary network of approximately 20,000 local Websites that reach approximately 15 million monthly unique visitors. The company places various display, performance, and subscription advertisement products on its Local.com and proprietary network. Its Network business unit operates a private label local syndication network of approximately 1,000 U.S. regional media Websites; 80,000 third-party local Websites; and its own organic feed of local businesses plus third-party advertising feeds that focus primarily on local consumers to a distribution network of hundreds of Websites. The company?s Sales and Ad Services business unit provides approximately 45,000 direct monthly subscribers with Web hosting or Web listing products. The compan y was formerly known as Interchange Corporation and changed its name to Local.com Corporation in November 2006. Local.com Corporation was founded in 1999 and is headquarters in Irvine, California.

Hot Cheap Companies To Own For 2014: Oracle Corporation(ORCL)

Oracle Corporation, an enterprise software company, develops, manufactures, markets, distributes, and services database and middleware software, applications software, and hardware systems worldwide. It licenses of database and middleware software, including database management software, application server software, service-oriented architecture and business process management software, data integration software, business intelligence software, identity and access management software, content management software, portals and user interaction software, development tools, and Java; and applications software comprising enterprise resource planning, customer relationship management, enterprise performance management, supply chain management, business intelligence applications, enterprise portfolio project management, Web commerce, and industry-specific applications software. The company also offers customers with rights to unspecified software product upgrades and maintenance releases; Internet access to technical content; and Internet and telephone access to technical support personnel. In addition, its hardware systems products consist of computer server and hardware-related software, including the Oracle Solaris Operating System; and storage products, such as tape, disk and networking solutions for open systems and mainframe server environments. Its hardware systems support solutions include software updates for the software components. Further, the company offers consulting solutions in business and IT strategy alignment, enterprise architecture planning and design, initial product implementation and integration, and ongoing product enhancements and upgrades; cloud services, including Oracle Cloud Services and Advanced Customer Services; and education solutions comprising instructor-led, media-based, and Internet-based training in the use of its software and hardware products. The company was founded in 1977 and is headquartered in Redwood Ci ty, California.

Advisors' Opinion:

• [By Steve Heller]

  The pudding
  Both International Business Machines (NYSE: IBM  ) and Oracle (NYSE: ORCL  ) continue to experience hemorrhaging within their hardware divisions. Last quarter, Oracle's hardware systems products revenue experienced a 23% year-over-year decline, which the company attributed to upcoming products hurting current demand and difficulty in closing deals with new sales reps.

• [By Dan Caplinger]

  Microsoft (NASDAQ: MSFT  ) climbed 1.4% on a pair of interesting announcements. One report involved Microsoft making its video games available for rival smartphone platforms, including those running the iOS and Android operating systems. But arguably the more important news involves Microsoft teaming up with fellow tech giant Oracle (NYSE: ORCL  ) to offer various Oracle software on cloud-based installations using Microsoft's Windows Azure or Server Hyper-V platforms. As even the biggest companies collaborate, it's clear that cloud computing has in some ways leveled the playing field among tech companies, with the largest companies still having to work hard to keep up with advances from smaller, nimbler rivals.

• [By Douglas A. McIntyre]

  Oracle (NASDAQ: ORCL) CEO Larry Ellison will use just about any excuse he can to brag about the company he founded. He discovered a new path, as Oracle used IBM’s (NYSE: IBM) earnings release to claim that the century old corporation had fallen to the No.3 spot in global software sales. �If so, that would mean Oracle now holds the No.2 spot behind Microsoft (NASDAQ: MSFT). The change in positions says a great deal about the power of Oracle’s enterprise customer base, and the erosion of some of IBM’s core businesses.

Hot Cheap Companies To Own For 2014: Wendy's/Arby's Group Inc.(WEN)

The Wendy's Company operates as a quick-service hamburger company in the United States. The company, through its subsidiary, Wendy's International, Inc., operates as a franchisor of the Wendy's restaurant system. As of December 26, 2011, the Wendy's system comprised approximately 6,500 franchise and company restaurants in the United States and the United States territories, as well as in 26 other countries worldwide. The company was formerly known as Wendy's/Arby's Group, Inc. and changed its name to The Wendy's Company in July 2011. The Wendy's Company was founded in 1884 and is headquartered in Dublin, Ohio.

Advisors' Opinion:

• [By Michael Flannelly]

  Argus Research upgraded fast food restaurant operator The Wendy’s Co (WEN) on Thursday, noting that the company’s store remodeling and new menus should help drive higher sales.

  The analysts upgraded WEN from “Hold” to “Buy” and see shares reaching $10. This price target suggests a 21% upside to the stock’s Wednesday closing price of $8.25.

  Wendy’s shares were up 24 cents, or 2.91%, during early morning trading on Thursday. The stock is up 54.19% year-to-date.

• [By Rich Smith]

  Hewing strictly to the dictates of the five-second rule for food companies, Kellogg (NYSE: K  ) dropped an executive officer Monday, and before he had time to be considered "dirty," Wendy's (NASDAQ: WEN  ) picked him up.

• [By Alyssa Oursler]

  Since Jan. 1, McDonald’s stock has climbed only 11% vs. 19% for the S&P 500 and 17% for the Dow. On top of that, fast-food rivals Wendy’s (WEN) and Burger King Worldwide (BKW) have climbed 54% and 20%, respectively, with only Yum Brands (YUM) falling behind.

Is Green Mountain Still an Outperform?

With shares of Green Mountain Coffee Roasters (NASDAQ:GMCR) trading at around $78.39, is GMCR an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

C = Catalyst for the Stock's Movement

Green Mountain was given an OUTPERFORM rating here on March, 26, 2013, at $54.96. But is it still an OUTPERFORM after its impressive run? This stock has a large short position of 37.90 percent, but shorts have been torched so far. However, many of them are maintaining their positions due to fundamentals. Then again, are the fundamentals really that bad?

Margins are solid, free cash flow is expected to increase, there are no debt issues, costs have decreased, revenue has been strong, and earnings have been steady. In addition to those factors, guidance is strong, the deal with Starbucks Corporation (NASDAQ:SBUX) has been extended for five years, and analysts like the stock: 9 Buy, 4 Hold, 1 Sell.

NEW! Discover a new stock idea each week for less than the cost of 1 trade. CLICK HERE for your Weekly Stock Cheat Sheets NOW!

From a bearish perspective, sales growth has been declining, sales guidance has declined to 11-14 percent from 15-20 percent, and Keurig brewer sales have declined 9 percent. On the surface, it would look as though there is a strong bear case due to slowing growth, but Green Mountain works in clever ways. For instance, if it looks as though the next quarter is going to be a disappointment, then the company may find a way to release positive news in order to overshadow the negatives. If it has been done once, then it's likely to happen again. Green Mountain doesn't have a ton of cash, so the options are somewhat limited, but Green Mountain's creativity shouldn't be underestimated.

A look at a company's culture can provide an important an inside look at the operation. According to Glassdoor.com, Green Mountain employees have rated their employer a 3.4 of 5, which is above average. Two other stats are also above average: 75 percent of employees would recommend the company to a friend, and 83 percent of employees approve of Lawrence J. Blanford.

The chart below compares fundamentals for Green Mountain, Farmer Brothers Co. (NASDAQ:FARM), and Starbucks.

	GMCR	FARM	SBUX
Trailing P/E	30.16	N/A	32.28
Forward P/E	21.96	17.36	24.24
Profit Margin	9.74%	-3.58%	10.80%
ROE	17.82%	-19.95%	28.97%
Operating Cash Flow	712.31M	24.94M	2.55B
Dividend Yield	N/A	N/A	1.30%
Short Position	37.90%	5.80%	1.20%

Let's take a look at some more important numbers prior to forming an opinion on this stock.

T = Technicals Are Strong

Green Mountain has outperformed its peers for every time frame listed below.

	1 Month	Year-To-Date	1 Year	3 Year
GMCR	36.47%	89.62%	211.9%	210.0%
FARM	-15.81%	-2.56%	101.1%	-25.02%
SBUX	7.86%	19.29%	20.16%	150.9%

At $78.39, Green Mountain is trading well above its averages.

50-Day SMA	58.80
200-Day SMA	45.64

 

NEW! Discover a new stock idea each week for less than the cost of 1 trade. CLICK HERE for your Weekly Stock Cheat Sheets NOW! E = Equity to Debt Ratio Is Strong

The debt-to-equity ratio for Green Mountain is stronger than the industry average of 0.80. Debt isn’t a concern at the moment.

	Debt-To-Equity	Cash	Long-Term Debt
GMCR	0.15	221.17M	350.75M
FARM	0.49	26.29M	32.93M
SBUX	0.10	1.70B	549.60M

 

E = Earnings Have Been Steady

Earnings and revenue have consistently improved on an annual basis.

Fiscal Year	2008	2009	2010	2011	2012
Revenue ($) in billions	0.500	0.786	1.36	2.65	3.86
Diluted EPS ($)	0.1933	0.45	0.58	1.31	2.28

5 Best Performing Stocks To Own Right Now

When we look at the last quarter on a year-over-year basis, we see an increase in revenue and earnings. Revenue and earnings have also improved on a sequential basis.

Quarter	Dec. 31, 2011	Mar. 31, 2012	Jun. 30, 2012	Sep. 30, 2012	Dec. 31, 2012
Revenue ($) in billions	1.16	0.885	0.869	0.947	1.34
Diluted EPS ($)	0.66	0.58	0.46	0.5808	0.70

Now let's take a look at the next page for the Conclusion. Is this stock an OUTPERFORM, a WAIT AND SEE, or a STAY AWAY?

NEW! Discover a new stock idea each week for less than the cost of 1 trade. CLICK HERE for your Weekly Stock Cheat Sheets NOW!

Conclusion

Green Mountain's growth might be slowing, but with a strong management team in place, innovation and finding creative ways to move the stock price are possibilities. Of course, long-term investors would prefer to see innovation for more sustainable results.

Is Dish Network a Buy?

With shares of Dish Network (NASDAQ:DISH) trading around $41, is it an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let's analyze the stock with the relevant sections of our Cheat Sheet investing framework:

T = Trends for a Stock’s Movement

Dish Network is a pay-television provider that offers a range of local and national programming, featuring more national and local high-definition channels than most pay-TV providers. A rising number of consumers are opting for satellite services due to the reduced costs and increased coverage offered. Dish Network is poised to capitalize on this rise in consumer interest as entertainment takes center stage for consumers in the United States. Most notably, the company has pulled away from a bidding war over Clearwire (NASDAQ:CLWR), which may prove positive. As a television giant, look for Dish Network to provide the services that consumers and companies love.

T = Technicals on the Stock Chart are Strong

Dish Network stock has been on a powerful move higher in the past few years. The stock is now trading near highs for the year and looks ready to continue upward. Analyzing the price trend and its strength can be done using key simple moving averages: 50-day (pink), 100-day (blue), and 200-day (yellow). As seen in the daily price chart below (source: Thinkorswim), Dish Network is trading above its rising key averages, which signals neutral to bullish price action in the near term.

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

	Implied Volatility (IV)	30-Day IV Percentile	90-Day IV Percentile
Dish Network Options	37.38%	3%	0%

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

	10 Best Gold Stocks To Buy For 2014 Put IV Skew	Call IV Skew
July Options	Flat	Average
August Options	Flat	Average

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

 

E = Earnings Are Decreasing Quarter-Over-Quarter

Rising stock prices are often strongly correlated with rising earnings and revenue growth rates. The last four quarterly earnings announcement reactions also help gauge investor sentiment on Dish Network’s stock. What do the last four quarterly earnings and year-over-year revenue growth figures for Dish Network look like and, more importantly, how did the markets like these numbers?

	2013 Q1	2012 Q4	2012 Q3	2012 Q2
Earnings Growth (Y-O-Y)	-41.25%	-34.09%	-149.30%	-33.33%
Revenue Growth (Y-O-Y)	-0.74%	-1.15%	-2.20%	-0.51%
Earnings Reaction	-2.04%	-0.16%	3.35%	-0.22%

Dish Network has seen decreasing earnings and revenue figures in the past four quarters. From these numbers, the markets have not been too pleased with Dish Network’s recent earnings announcements.

P = Excellent Relative Performance Versus Peers and Sector

How has Dish Network stock done relative to its peers – Directv (NYSE:DTV), Time Warner Cable (NYSE:TWC), Comcast (NASDAQ:CMCSA) — and sector?

	Dish Network	Directv	Time Warner Cable	Comcast	Sector
Year-to-Date Return	13.52%	20.83%	9.21%	8.57%	11.49%

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

Conclusion

Dish Network provides in-demand national and local programming to consumers across the U.S. The stock has been on a powerful move higher and is now trading near highs for the year. In the past four quarters, investors in the company have not been too pleased, as earnings and revenue figures have been declining. Relative to its peers and sector, Dish Network has been a year-to-date performance leader. Look for Dish Network to OUTPERFORM.

Valley engineers want kids to program robots

SAN FRANCISCO -- Vikas Gupta lives and works among Silicon Valley's brightest engineers, but he worries about his 2-year-old daughter's chance for a decent education to thrive in a world run by technology.

The serial entrepreneur, who had better opportunities growing up with India's schools, sees a U.S. education system lacking to deliver programmers. He wants to change that.

Gupta and others formed Play-i, a startup focused on programmable robots aimed at children as young as five. Their idea is to make learning how to program robots easy.

"The question was, how can we make something that's fun, that's extremely inviting, and gets parents and kids into the magical world of programming at a young age?" says Gupta.

Mountain View, Calif.-based Playi 's two robots, named Bo and Yana, allow kids to manipulate their bright-colored orbs that make sounds, flash lights and move.

The robots are controllable by an iPad and are intended for kids to customize their functions and progressively learn building blocks of programming. Bo can play Twinkle Twinkle Little Star on a miniature xylophone and could offer infinite song possibilities if programmed. Yang can be programmed to make sounds such as a helicopter or ambulance and to flash.

Google Ventures injected $1 million in seed funding to get Gupta's team of seven started earlier this year. The start-up began a crowd-sourced funding campaign today at Play-i.com to finance the completion of its first small production to test the market.

Bo and Yana will cost $149 and $49, respectively. Play-i expects to deliver 1,500 of the robots if the company reaches the $250,000 goal of its funding campaign. Play-i plans to ship customers the completed robots by June.

"It's a tangible way for kids to get programming at a much younger age." says Google Ventures partner Andy Wheeler. "Hopefully, within a few years they are expanding into retail and expanding the software and hardware components ... to allow the toy to grow with the c! hild."

Top 10 Safest Stocks For 2014

Play-i wants its robots in the hands of kids for testing and feedback. The company is planning to put them into an after school program for girls called Techbridge, based in Oakland, Calif.

"They are playful in a way that kids would connect with and see this as more than looking at a screen. It would be fun for kids," says Linda Kekelis, executive director at Techbridge.

The Best and Worst Dow Stocks Today

Following some mixed reports on the economy and the housing market, as well as some hit-and-miss earnings reports, the Dow Jones Industrial Average (DJINDICES: ^DJI  ) is down 0.42% as of 1:25 p.m. EDT, while the S&P 500 (SNPINDEX: ^GSPC  ) is down 0.47%.

There were two U.S. economic releases today.

Report

Period

Result

Previous

Markit flash PMI	July	53.2	51.9
New-home sales	June	497,000	459,000

Markit's "flash" Purchasing Managers' Index came in higher than last month's 51.9, indicating that the economy expanded at a faster rate than in June. The "flash" PMI is an early estimate of the final PMI based on 85% of the responses used for Markit's PMI reading. The rise was driven by faster growth in output, new orders, employment, and backlogs. This is a good sign for the economy that economic growth will continue, but it's perhaps a bad sign for asset prices, as faster growth would mean the Federal Reserve could begin tapering its asset purchases.

New-home sales were also strong at a seasonally adjusted annual rate of 497,000, beating analyst expectations of 483,000 and last month's 459,000. New-home sales are nearly 40% above the year-ago rate.

Best Low Price Stocks To Own Right Now

US New Single Family Houses Sold data by YCharts.

The recent rise in mortgage rates has not yet slowed down new-home sales, but rates are still low by historical standards.

The other big news today has been earnings reports. Caterpillar (NYSE: CAT  ) is today's worst Dow stock, down 2.7% after it reported earnings per share of $1.45 -- a full 40% below the prior-year quarter's $2.54 and well short of analyst expectations of $1.71. Revenue came in at $14.6 billion, down 16% from a year ago and below analyst expectations of $14.9 billion. On top of the disappointing earnings, the company also cut its forecast for 2013 EPS from $7 to $6.50 and lowered its revenue guidance from $56 billion-$58 billion to $57 billion-$61 billion. Fool contributor Neha Chamaria recently discussed what investors should look for in Caterpillar's earnings release.

Today's Dow leader is American Express (NYSE: AXP  ) , up 1.2%. Last week American Express was the second-worst Dow component after news leaked that the European Commission was working on a proposal to cap transaction fees at 0.2% for credit card and debit card transactions. Yesterday the European Commission released its draft proposal to regulate card-based payment transactions in Europe. Today American Express issued a statement in response to the proposal to alleviate investors' fears. The company affirmed its belief that its merchant discount rate would not be affected, as it has its own network and does not operate on the basis of interbank agreements, as Visa and Mastercard do.

Millions of Americans have waited on the sidelines since the market meltdown in 2008 and 2009, too scared to invest and put their money at further risk. Yet those who have stayed out of the market have missed out on huge gains and put their financial futures in jeopardy. In our brand-new special report, "Your Essential Guide to Start Investing Today," The Motley Fool's personal-finance experts show you why investing is so important and what you need to do to get started. Click here to get your copy today -- it's absolutely free.

Is Twitter cheap or expensive?

Is Twitter (TWTR)  cheap or expensive? After the microblogging company announced this week the price range for its initial public offering, many analysts said it was lower than expected, a sign that Twitter wanted to ensure a successful start to its life as a public company.

Yet, even with its more cautious pricing, the company still will be overvalued, according to at least one common valuation model. Twitter is a good example of why cautious investors should steer clear of young and hot technology companies.

To be sure, determining a fair price for Twitter isn't easy, according to Malcolm Baker, a professor at Harvard Business School, as is the case for almost all young growth companies. "The long-run case for investing in Twitter has to be based on the expectation that it will experience a huge growth rate in revenues and profits," he says.

Getty Images

Google (GOOG)  comes to mind, of course. Its sales have risen from $1.5 billion in the year before its 2004 IPO to more than $40 billion in its most recent year, and its stock price has skyrocketed from an IPO of $85 to over $1,000. But most newly public companies don't expand as fast as the Internet search giant did, and there is no way of knowing whether Twitter will follow in Google's footsteps.

"Unless you have had a really clear sense that you can differentiate a Google from another company that won't experience the phenomenal growth necessary to support its stock price, then — given their potential for overvaluation — staying away from emerging-growth companies has been the best strategy," Baker says.

This potential for overvaluation is particularly elevated "when investor demand for IPOs is high, as reflected in a large number of IPOs coming to market," says Martin Kenney, a professor at the University of California, Davis, and an expert on IPOs. And now may be just such a time, he says: "There have been a lot of IPOs coming out over the last three to four months. Venture-capital firms appear to be just shoving them out the door."

According to investment bank Renaissance Capital, in fact, there were 60 deals in this year's third quarter, more than double the 26 in last year's third quarter. "The U.S. IPO market is on track to see record levels of post-tech-bubble issuance," the firm said.

Click to Play Twitter IPO: $11.1 Billion Valuation

Twitter set its price range for its initial public offering at $17 to $20 a share, in a deal that values the company at up to $11.1 billion. WSJ's IPO reporter Telis Demos reports. Photo: Getty Images.

Twitter's market capitalization at IPO will be $12.9 billion, assuming its shares will be priced at the midpoint of the $17 to $20 range contained in a filing this past Thursday. Note carefully that this total reflects, as it should, the number of shares from stock options and restricted shares.

We can't judge whether this $12.9 billion market cap is a fair valuation in terms of a price/earnings ratio, though, as the company is losing money. In fact, its losses are accelerating, with Twitter posting a $64.2 million loss in its September quarter versus a $42.2 million loss in the prior quarter.

It isn't particularly unusual for technology companies to be losing money when they come to market, since firms at early stages of their growth cycle often sacrifice earnings in order to invest in future growth. That is why, according to University of Florida finance professor Jay Ritter, many analysts focus on sales when valuing startups and IPOs — specifically, the ratio of a company's market cap to its total sales.

Since Twitter's sales over its most recent four quarters totaled $534 million, the company's price/sales ratio would be 24.1. That would be almost as high as Facebook's 25.8 ratio at its IPO.

In fact, according to data compiled by Ritter, a 24.1 price/sales ratio, or PSR, would be the third highest of any IPO since 1980 of any company that, like Twitter, had significant sales at the time it came to market. (Ritter determined which companies qualified for this comparison by calculating which ones had trailing four-quarter sales at IPO that were at least $500 million, in 2013 dollars.)

Besides Facebook, the only other new issue that had a higher ratio at IPO was Palm, the hand-held device maker, whose PSR at its March 2000 IPO was 29. Like Facebook, Palm's stock fell sharply over its first six months as a publicly traded company.

Palm's experience is more the rule than the exception for IPOs with high PSRs. The 15 with the highest PSRs when coming to market lost an average of 5% over their first six months, according to Ritter.

One reason that a high PSR creates such headwinds for a company's shares following its IPO is that the ratio almost always declines as the company matures, often markedly. The S&P 500's current PSR, for example, is 1.4. And as the PSR declines, revenue has to rise that much faster for the stock price to just stay even.

Consider, for example, what Twitter's market cap would be in five years' time should its revenue increase at the average pace of new companies that did IPOs between 1996 and 2005. That average five-year revenue growth is 212%, according to research conducted by Ritter and Kenney and Donald Patton, a research associate at the University of California, Davis. If Twitter's revenue were to grow at that rate, its revenue in the fall of 2018 would be $1.7 billion.

Internet companies tend to trade at higher PSRs than the broad market, so — to be generous — let's assume that Twitter's will be the same as other Internet companies on the fifth anniversary of their IPOs. According to FactSet, the median PSR of the companies in the Dow Jones U.S. Internet Index on their fifth birthday was 5.87.

Given these revenue-growth and PSR assumptions, Twitter's market cap in November 2018 would be $9.8 billion, or 24% below the $12.9 billion market cap the company will have assuming its IPO is priced at the midpoint of its indicated range.

If you really want exposure to the Internet, a better strategy might be to invest in more established companies. Several within the Dow Jones U.S. Internet Index (DJINET)  are currently recommended for purchase by at least two of the three dozen advisers on the Hulbert Financial Digest's monitored list who have beaten the Wilshire 5000 index (XX:W5000)  over the last 15 years.

On the list are Google and web portal Yahoo (YHOO)  . To be sure, since both companies' P/E ratios currently are at 20, versus 16.2 for the S&P 500, neither is especially cheap. But their PSRs are far lower than Twitter's is slated to be at its IPO: Google's is 6.0, according to FactSet, and Yahoo's is 7.3.

Also receiving at least two buy recommendations from these market-beating advisers are two non-U.S. companies: Yandex (YNDX)  , the Russian search engine, and Qihoo 360 Technology (QIHU)  , the Chinese Internet company. Both also sport P/Es that are well above the market: Yandex's is 28 and Qihoo's is 51. Yet their PSRs are also lower than Twitter's, at 12 and 15.9, respectively.

Could booze be a tonic for Ohio cities?

CINCINNATI -- Better known for loosening inhibitions, booze may soon be used to lubricate the wheels of economic development in some Ohio communities.

A growing number of cities nationwide, including Memphis, Louisville and Montgomery, Ala., allow people to openly drink on the streets, a la New Orleans, to encourage economic development.

Now, a bipartisan "open container" bill giving that option to Ohio cities is given a good chance of passage in coming months. Sponsoring Democratic state Sen. Eric Kearney is tweaking it after a committee hearing, with a committee vote likely late this year or when the General Assembly returns in March.

It has strong support from the Ohio Wholesale Wine and Beer Association, one of the most powerful lobbies in the state capital, said Republican state Sen. Bill Seitz, a bill co-sponsor and ardent supporter.

"It would be the first time in years that I can enjoy a drink and a cigarette at the same time," Seitz said.

Memphis' Beale Street is the ultimate success story. The hotbed of blues music died in the 1960s as businesses and residents left downtown for the suburbs, according to Leslie Gower, spokeswoman for the Downtown Memphis Commission – a scenario that also played out in Cincinnati. But in the 1980s a revitalization plan closed Beale Street to traffic and opened it to alcohol-carrying pedestrians, bringing it back to life as a destination for live music.

Top 10 Gold Companies To Invest In 2014

"Beale Street is Tennessee's top tourism destination, and that's largely because of the alcohol," Gower said. "It goes into creating a festive environment."

Ohio's three Cs – Cincinnati, Columbus and Cleveland – already have had some success with urban revitalization, but this would give them another tool, Kearney said.

"Over-the-Rhine (in Cincinnati) is vibrant, but it's not as crowded as it once was," he said, as an example. ! "Just think how the nightlife would feed into the residential areas, which would feed into the retail areas, which would cause the whole area to experience more success."

More than a dozen Ohio cities and townships would be able to create up to three open-container districts each, depending on their population. Cincinnati, just shy of the 300,000 population threshold for three districts, could have two.

Communities are just beginning to learn about the bill and what it could mean for them. So far, local leaders and bar owners seem supportive of the state giving communities the right to create open-container districts.

"There's no downside," said Julie Calvert, spokeswoman for the Cincinnati USA Convention and Visitors Bureau. "It allows cities to make their own determinations for how and where they want to do it."

Whether neighborhood business owners and residents actually want to be part of a district is less clear. Bar owners question how the flow of alcohol would be contained within the district and whether closed streets would jam traffic.

"The devil's in the details," said Jim Moehring, owner of Holy Grail at the Banks in Cincinnati. "It's going to be tricky to manage."

Members of the Downtown Residents Council have mixed views on Kearney's bill, according to President Craig Hudson.

"Anything that creates more activity we're in favor of, but from a trash and rowdiness standpoint there was some concern," he said.

Even bar patrons don't see open-container laws changing their entertainment plans.

"I could see it being kind of cool, but I don't think it would make me more likely to come to the Banks," said Brian Albrecht, 25, of Oxford. He works downtown and sometimes visits the riverfront entertainment district.

Picking just two open-container districts could become a challenge if neighborhoods warm up to the idea.

Cincinnati already has eight community entertainment districts, a designation that opens up more liquor licenses for about ! $1,500 ea! ch instead of $25,000 each

Still, some people aren't sure their neighborhood is ready for public drinking.

The $300 million-plus redevelopment of Over-the-Rhine might make it an obvious candidate for an open-container district, but Peter Hames, president of the community council, says not so fast.

Neighborhood development includes condos and apartments above many of the first-floor shops, restaurants and bars.

"We don't want to be an entertainment district, in my opinion," Hames said. "We want to be a really nice mixed-use neighborhood."

Beale Street has no residents to worry about, according to Gower. There are some offices above bars, but otherwise the 1.8-mile street is all about the music and entertainment.

The Alley was the first open-container district in Alabama, sought in 2010 to bring and keep people in downtown Montgomery after business hours.

Buildings on either side of the two-block stretch were bought by the city and resold for development as first-floor entertainment with housing above.

Developers are now working on building more apartments at one end of the Alley.

"We have seen increased attendance numbers for all downtown events," said Dawn Hathcock, vice president of the Montgomery Convention and Visitors Bureau. "We are also getting positive response from meeting planners."

Early results were positive enough that Alabama quickly passed legislation to allow other cities to create open-container districts.

The size of open-container districts varies widely, from Louisville's one-block Fourth Street Live to several cities in Montana that allow public drinking anywhere. Erie, Pa., has a 70-block downtown open-container district, and Savannah, Ga., allows open containers in its historic district.

Cities have settled on different approaches, as well. Louisville's Fourth Street Live, a private development of mostly chain restaurants and stores, has a detailed dress code banning "excessively torn clothing" and forbidding m! en from w! earing shirts that are either sleeveless or too long, among other restrictions.

Beale Street uses barriers and police cars to mark the boundaries of the entertainment area, and no one under 21 is allowed inside after dark. After several fights earlier this year, dozens of security cameras were added.

Most communities allow traffic through the district part of the time, becoming pedestrian-only on evenings or weekends. Many require drinks to be in plastic containers.

If Ohio lawmakers pass Kearney's bill allowing open-container districts, it likely won't take effect until late 2014 or early 2015, he said.

Time for local communities to size up the possibilities and risks, and decide whether they want in.

Bearish or bullish on options; how can you tell?

USA TODAY markets reporter Matt Krantz answers a different reader question every weekday. To submit a question, e-mail Matt at mkrantz@usatoday.com.

Q: How do options tell if investors are bearish or bullish?

A: Getting a glimpse at how other investors feel about a stock requires knowledge of the options market.

Options are financial instruments that give their owners the right, but not the obligation to buy or sell an investment at a preset "expiration" date in the future at a preset "strike" price.

TRACK YOUR STOCKS: Get real-time quotes with our free Portfolio Tracker

Top 5 China Stocks To Buy For 2014

Typically, options are used by investors to hedge their bets and protect themselves against big losses if a stock goes south. Options can also be used to speculate and make massive bets on stock movements with little up front investment.

But savvy investors, who may not want to buy or sell options themselves, can use this financial instruments to get a glimpse at what investors are feeling about a particular stock. This data is available anywhere you can look up a so-called options chain, available at most brokers' Web sites and even many public Web sites that dispense stock quotes.

Getting an options chain is similar to how you'd look up a stock price. Simply enter the stock's symbol and then look at the chain, which is a list of all the prices of various options based on their strike prices and expiration dates. The chain also shows you how much trading volume there is at different strike prices and expiration dates. Investors can use this information to see where a bulk of other investors are betting a stock will rise or fall to by a certain date in the future.

Take Five with Chris Wallis of Vaughan Nelson

Chris Wallis

The federal government's last-minute budget deal just adds to the uncertainty in the financial markets, said Chris Wallis, chief executive and chief investment officer at asset management firm Vaughan Nelson.

InvestmentNews: How do you feel about the Washington budget deal reached last week?

Mr. Wallis: I think it is neutral right now because we haven't made any significant shifts from current policy, and we haven't come to a long-term or medium-term resolution. They only established parameters for the next stage of talks. The next discussion we have — and the resolution to the budget — could be more important. We just went through a circus.

Top 5 Warren Buffett Companies To Watch In Right Now

InvestmentNews: Does the budget deal open or close any investment opportunities?

Mr. Wallis: I don't think it does, only because the deal wasn't a material change from what already was in place, and we haven't seen any radical shifts in the regulatory environment.

As time passes and we go through the implementation of the Affordable Care Act, that will have an impact on certain markets for a number of years.

InvestmentNews: What is your fourth-quarter outlook for the markets?

Mr. Wallis: This has been the toughest quarter to call yet. When we look at the data, we're not seeing anything that would indicate the economy is getting ready to re-accelerate. The cycle is so muted. We would expect the fourth quarter to mimic what we've seen to date. Don't expect the Federal Reserve to begin to taper. So without that withdrawal of liquidity, we could be up or down 5%.

InvestmentNews: Where are the biggest risks in the markets?

Mr. Wallis: The single biggest risk is the Fed; that is, the systemic risk. It was a mistake to not taper the quantitative-easing program. We had already suffered the [implicit] impact of beginning to taper. The markets adjusted to it, but we needed to follow through and actually begin to taper. The private capital will not come back to the markets until the Fed gets out of the way.

If we started to taper today, the benefit 12 to 18 months forward would far outweigh the benefits of quantitative easing. It is going to be much more difficult to taper a year from now. Quantitative easing is a very poor tool for trying to achieve the objectives sought by the Federal Reserve.

InvestmentNews: What is your outlook for active versus passive management in this market environment?

Mr. Wallis: Clearly active management is going to do much better over next three years versus the past three years. We've been through a g! eneral recovery in economic activity, earnings and valuations.

Most of the monetary policy was designed to support that. All assets have risen generally across all segments of equity markets. The markets will begin this churning process where some will benefit and others won't, versus the past three years when everything benefited.

It will be very much a rifle shot in terms of generating the high-single-digit returns people are expecting out of the equity markets. I think we'll see advisers continue to narrow their use of [exchange-traded funds].

Top Clean Energy Companies To Invest In Right Now

The leaders in hydrogen fuel cell technology, General Motors Company (GM) and Honda Motor Co. (HMC), entered a long-term agreement to collaborate on development of next-generation fuel cell vehicles in order to meet the fuel economy standard set in the U.S.

Both GM and Honda have more than 1,200 fuel cell patents between them, filed between 2002 and 2012, and experimental vehicle fleets. They are the top two companies in terms of total fuel cell patents according to the Clean Energy Patent Growth Index.

Both companies aim to develop the vehicles by 2020. The alliance will bring down their costs in building this expensive technology by sharing each other�� expertise and suppliers.

Why Fuel Cell Vehicles?

The U.S. mandate requires corporate average fuel economy of 54.5 miles per gallon by 2020 and there is no better competent than fuel cell vehicles. Why? Fuel cells have highly fuel-efficient technology compared to gasoline and electric batteries. Secondly, it has a longer driving range (up to 400 miles) than electric cars but pollutes less than gasoline vehicles.

Top Clean Energy Companies To Invest In Right Now: Hardy Underwriting Group(HDU.L)

Hardy Underwriting Bermuda Limited, through its subsidiaries, engages in underwriting insurance and reinsurance products worldwide. It underwrites aviation, marine, and a range of non-marine risks on reinsurance and direct basis. The company underwrites airlines, space, and general aviation risks; marine risks specializing in fishing vessels, harbor craft, and loss of hire; and cargo and specie risks covering the transportation and storage of various products and commodities. It also insures jewellers block and fine art, as well as writes for small motor account specializing in classic cars and other niche areas. In addition, the company underwrites the reinsurance of property risks on a proportional and non-proportional basis; and non-marine property risks. Further, it underwrites a range of accounts comprising financial institutions, terrorism, political risks, conveyancing, and accident and health, as well as traditional medical products, kidnap and ransom, and PA catas trophe treaty. The company was founded in 1975 and is based in Hamilton, Bermuda.

Top Clean Energy Companies To Invest In Right Now: Ks Energy Limited (578.SI)

KS Energy Limited provides integrated oilfield supplies and services to oil and gas, marine, and petrochemical industries worldwide. The company engages in trading and dealing in hydraulic products, instrumentation, and equipment, including industrial materials, general hardware, welding and cutting equipment and related products, welding consumables, machinery, marine-related products, metal ware, valves, industrial products, spare parts, and corrosion-resistant alloy pipeline components. It is also involved in the engineering design, project management, procurement, and supply of custom-built system equipment for the marine, offshore oil and gas, petrochemical, refinery, and power generation industries; trade of tools and equipment for the marine, oil, and gas industries; and rigging and testing of wire ropes. In addition, it provides marine-related services and ship handling services, as well as testing and certification services for related marine, offshore, and constr uction products; and builds ships and tankers. Further, the company engages in the fabrication and sale of wire ropes; repair and supply of turbo chargers; engineering, manufacture, and distribution of welding automation and industrial equipment, systems, and industrial engineering products; development of business prospects in the onshore/offshore/marine industries and management of accommodation-platforms/rigs; chartering of vessels; provision of transportation and forwarding services; ownership and leasing of equipment, and provision of services to the oil and gas industry; ownership and leasing of jack up rigs; and provision of oilfield support and consultancy, rig rental, and rig management and support services to the oil and gas industry. KS Energy Limited was founded in 1974 and is based in Singapore. As of August 3, 2011, KS Energy Limited operates as a subsidiary of Pacific One Energy Limited.

Top 10 Dividend Companies To Buy For 2014: Intel Corporation(INTC)

Intel Corporation engages in the design, manufacture, and sale of integrated circuits for computing and communications industries worldwide. It offers microprocessor products used in notebooks, netbooks, desktops, servers, workstations, storage products, embedded applications, communications products, consumer electronics devices, and handhelds. The company also provides system on chip products that integrate its core processing functionalities with other system components, such as graphics, audio, and video, onto a single chip. In addition, it offers chipset products that send data between the microprocessor and input, display, and storage devices, including keyboard, mouse, monitor, hard drive, and CD, DVD, or Blu-ray drives; motherboards designed for desktop, server, and workstation platforms, and that has connectors for attaching devices to the bus; and wired and wireless connectivity products consisting of network adapters and embedded wireless cards used to translate and transmit data across networks. Further, the company provides NAND flash memory products primarily used in portable memory storage devices, digital camera memory cards, and solid-state drives; software products comprising operating systems, middleware, and tools used to develop, run, and manage various enterprise, consumer, embedded, and handheld devices; and software development tools that enable the creation of applications. Additionally, it develops computing platforms, which are integrated hardware and software computing technologies designed to offer an optimized solution. The company sells its products principally to original equipment manufacturers, original design manufacturers, PC components and other products users, and other manufacturers of industrial and communications equipment. It has a strategic alliance with Scientific Conservation Inc. Intel Corporation was founded in 1968 and is based in Santa Clara, California.

Advisors' Opinion:

• [By Steve Heller]

  Last week, Intel (NASDAQ: INTC  ) announced that its revenue declined by 5.1% year over year in its second quarter, which translated to net income decline of 29%. But what got investors spooked was that Chipzilla lowered its full-year revenue outlook, which it now expects will remain flat compared to last year. As you can imagine, Intel is in a similar predicament as Microsoft, but instead of licenses, its processor business is expected to face revenue pressure as it enters the tablet and lower end computing segment with its upcoming Bay Trail processor. Consequently, Intel's profitability will be lower on a per unit and total dollar basis even with constant profit margins.

• [By John Maxfield]

  In the latter case, one is left to conclude that it's the beneficiary of more fundamental economic trends. In Portland, for instance, both Nike (NYSE: NKE  ) and Intel (NASDAQ: INTC  ) have major headquarters. And both are in the process of expanding their Oregon-based operations. Nike is in the process of building 500,000 square feet of office space in the area and hiring 500 new employees. And at the end of last year, it was reported that Intel will add 3.6 million square feet of new construction to one of its manufacturing campuses there.

• [By Dan Caplinger]

  Tech companies Intel (NASDAQ: INTC  ) and Hewlett-Packard (NYSE: HPQ  ) both ended in the green. For Intel, CEO Brian Krzanich met with reporters to discuss the company's strategic vision, with guidance both on mobile and Internet-based television initiatives. By emphasizing the importance of its Atom processor for smartphones and tablets, Intel is trying to make its mark after finally getting a high-profile place for another of its chips in Samsung's Galaxy Tab line of tablets. How Krzanich does in his opening months leading Intel could define the direction the stock moves for the foreseeable future.

• [By Wall Street Sector Selector]

  So does "Big Ben" trump everything? Apparently so, as the S&P 500 repeatedly sets new record highs. What has kept stocks flying? NOT QUARTERLY Earnings as the list below clearly demonstrates:

  United Parcel Service (UPS) – On July 12, the company announced that it was lowering its profit forecast for the year and that it expects to report earnings of $1.13 per share on July 23. Although analysts were expecting annual EPS to reach $4.98, the company lowered its guidance to a range between $4.65 and $4.85.Yahoo (YHOO) – Although Yahoo's earnings of 35 cents per share beat estimates of 30 cents per share, the company fell short at the top line, reporting quarterly revenue of $1.07 billion, compared with estimates of $1.8 billion.Google – Google reported quarterly earnings of $9.56 per share on net revenue of $11.1 billion, falling short of estimates of $10.80 per share on net revenue of $11.4 billion.Intel (INTC) – Intel reported quarterly EPS of 39 cents on revenue of $12.8 billion, missing estimates of 40 cents per share on revenue of $12.9 billion.Coca-Cola (KO) – Coke reported quarterly EPS of 59 cents on revenue of $12.75 billion, compared with estimates of 63 cents per share on $12.96 billion in revenue.American Micro Devices – AMD reported a "less bad than expected" quarterly loss of 9 cents per share on revenue of $1.16 billion, beating estimates of a 12-cent-per-share loss on revenue of $1.11 billionMicrosoft – Microsoft reported quarterly EPS of 59 cents on revenue of $19.9 billion, missing estimates of 75 cents per share on revenue of $20.73 billion.IBM: Big Blue reported quarterly EPS of $3.91 on revenue of $24.9 billion. Although it beat the EPS estimate of $3.77, it missed the revenue estimate of $25.37 billion.FedEx (FDX) – FedEx beat quarterly EPS estimates of $1.96, reporting earnings of $2.13 per share. However, its quarterly revenue of $11.45 billion fell short of the estima

Top Clean Energy Companies To Invest In Right Now: Gentiva Health Services Inc.(GTIV)

Gentiva Health Services, Inc. provides home health services and hospice care in the United States. The company offers skilled nursing and therapy services, paraprofessional nursing services, and homemaker services primarily to adult and elderly patients through licensed and Medicare-certified agencies. It also provides its services through specialty programs comprising Gentiva Orthopedics, which offers individualized home orthopedic rehabilitation services to patients recovering from joint replacement or other major orthopedic surgery; Gentiva Safe Strides that provides therapies for patients with balance issues; and Gentiva Cardiopulmonary, which helps patients and their physicians manage heart and lung health in a home-based environment. In addition, the company offers services through Gentiva Neurorehabilitation, which helps patients who have experienced a neurological injury or condition by removing the obstacles to healing in the patient?s home; Gentiva Senior Health that addresses the needs of patients with age-related diseases and issues; and Rehab Without Walls unit, which provides neurorehabilitation therapies for patients with traumatic brain injury, cerebrovascular accident injury, and acquired brain injury. Further, it offers consulting services to home health agencies, which include operational support, billing and collection activities, and on-site agency support and consulting. Additionally, the company provides hospice services primarily in the patient?s home or other residence, such as an assisted living residence or nursing home, as well as in a hospital. Gentiva Health Services, Inc. was founded in 1999 and is headquartered in Atlanta, Georgia.

Advisors' Opinion:

• [By Sean Williams]

  What: Shares of home health providers Amedisys (NASDAQ: AMED  ) , Gentiva Health Services (NASDAQ: GTIV  ) , and�LHC Group (NASDAQ: LHCG  ) �swooned as much as 28%, 20%, and 15%, respectively, following a public proposal by the Centers for Medicare and Medicaid Services, or CMS, late yesterday that in-home health care reimbursements be cut by 1.5% in 2014.

Top Clean Energy Companies To Invest In Right Now: Rudolph Technologies Inc.(RTEC)

Rudolph Technologies, Inc. designs, develops, manufactures, and sells process control defect inspection, metrology, and process control software systems to microelectronics device manufacturers. The company provides yield management solutions for use in wafer processing and final manufacturing through a range of standalone systems for macro-defect inspection, test systems, and transparent and opaque thin film measurements. It also offers a range of process control software solutions for semiconductor, solar, and LED manufacturing. It provides products for various applications in the areas of macro-defect detection and classification, diffusion, etch, lithography, CVD, PVD, and CMP. The company sells its products and solutions to logic, memory, data storage, and application-specific integrated circuit device manufacturers. It sells its products in the United States, Taiwan, China, Singapore, South Korea, Japan, and Europe. The company was founded in 1940 and is based in Fla nders, New Jersey.

Advisors' Opinion:

• [By Ben Axler]

  In the table below, we've listed a sample of small-cap semiconductor capital equipment stocks such as Entegris (ENTG), Advanced Energy Industries (AEIS), ATMI Inc. (ATMI), MKS Instruments (MKSI), Photronics Inc. (PLAB), Rudolph Technologies (RTEC),FormFactor (FORM) and Mattson Technology (MTSN). The peers trade at approximately 1.0x and 15.5x 2014E revenues and EPS, respectively. Furthermore, the average peer trades at 2.1x tangible book value. However, these multiples are based on average 2014E industry revenue and earnings growth of 18% and 119%, respectively. Axcelis is poised to grow at a rate substantially above the industry average.

• [By Seth Jayson]

  When judging a company's prospects, how quickly it turns cash outflows into cash inflows can be just as important as how much profit it's booking in the accounting fantasy world we call "earnings." This is one of the first metrics I check when I'm hunting for the market's best stocks. Today, we'll see how it applies to Rudolph Technologies (Nasdaq: RTEC  ) .

• [By John Emerson]

  Orbotech (ORBK) and Rudolph Technologies (RTEC) Sizable Net-Nets in the AOI Sector

  As noted previously, I rode the elevator up and then back down on Camtek (CAMT), a tiny Israeli automated optical inspection (AOI) company. By late 2008 the company had fallen to below $1 per share. Both of Camtek�� larger rivals, RTEC and ORBK, had dropped to absurdly low levels by November 2008. I used the opportunity to switch out of CAMT and some of my other losing propositions in favor of these superior companies. In the process, I created a large amount of tax loss carry-forwards which would allow me to minimize my future taxation when I decided to sell these cyclical entities.

Top Clean Energy Companies To Invest In Right Now: Fossil Inc.(FOSL)

Fossil, Inc. designs, develops, markets, and distributes fashion accessories worldwide. It offers a line of fashion watches under its proprietary brands, such as FOSSIL, MICHELE, RELIC, and ZODIAC; and through licensed brands, including ADIDAS, BURBERRY, DIESEL, DKNY, EMPORIO ARMANI, MARC BY MARC JACOBS, and MICHAEL KORS. The company designs, markets, and arranges for the manufacture of watches and accessories on behalf of certain mass market retailers, companies, and organizations as private label products or as premium and incentive items for use in various corporate events. It also provides various fashion accessories for men and women, including handbags, belts, small leather goods, jewelry, and sunglasses through company owned retail stores, department stores, and specialty retail stores, as well as over the Internet and through catalogs. In addition, the company sells a line of soft accessories, such as hats, gloves, and scarves, as well as a handbag collection. Furt her, it offers apparel comprising jeans, outerwear, fashion tops and bottoms, and tee shirts for men and women through company-owned stores, as well as over the Internet and through catalogs. Additionally, the company provides footwear products, including sport court sneakers, authentic casuals, dress classics, and boots for men, as well as fashionable flats, heels, wedges, and boots for women. Fossil, Inc., through a license agreement with the Safilo Group, manufactures, markets, and sells optical frames under the FOSSIL and RELIC brand names in the United States and Canada. As of August 9, 2011, it had approximately 360 company-owned and operated retail stores. The company was founded in 1984 and is headquartered in Richardson, Texas.

Advisors' Opinion:

• [By Sean Williams]

  The most obvious selection in the space is Fossil (NASDAQ: FOSL  ) , which makes an array of electronic movement watches typically in the $40-$125 range. This reasonable range was a perfect trigger point for consumers who wanted to make a fashion statement with an easily recognizable brand name without causing them financial distress with the price tag.

• [By Andrew Marder]

  I can't remember exactly where designer watches come in Maslow's hierarchy of needs, but I'm sure they're in there somewhere. That might explain how Fossil (NASDAQ: FOSL  ) has managed to make such a strong and extended run. The stock is up 12% this year, and 50% over the last 12 months. All that growth has pushed Fossil's P/E to 18, but it's still substantially cheaper than many of the luxury brands it mingles with.

• [By Jeremy Bowman]

  What: Shares of Fossil (NASDAQ: FOSL  ) were ticking higher today, climbing as much as 10% after a strong earnings report.

  So what: The watch-and-accessories maker saw earnings jump 24%, up to $1.21 per share, cruising past estimates of just $0.97 a share. Revenue rose 15.5% to $680.9 million, also well ahead of expectations of just $651.9 million. Third-party sales growth was strong in all regions, jumping at least 13% in North America, Europe, and Asia. Direct sales through the company's own stores and websites, which bring in a higher margin, were up 22.7%. Fossil's outlook for the current quarter, however, was below analyst projections. �

• [By Andrew Marder]

  In addition to its normal line of fashion, Burch has recently entered into an agreement with Fossil (NASDAQ: FOSL  ) for the sale of Burch-branded watches. Fossil is the maker behind Kors timepieces, and the company has said that the high-end designers are both big drivers of future growth. Basically, I see Burch as a way to re-create the magic of Kors -- and that hasn't been a bad thing.

Top Clean Energy Companies To Invest In Right Now: Rugby Mining Limited(RUG.V)

Rugby Mining Limited engages in the identification, acquisition, exploration, and development of mineral resource properties. The company primarily explores for porphyry gold-copper, silver, and iron ores. It has options to acquire a 90% interest in the Hawkwood project located in Queensland, Australia; an 80% interest in the Mabuhay project situated in the Philippines; a 60% interest in the Comita project located in the western cordillera of Colombia; and a 100% interest in the Interceptor project situated in Catamarca Province, Argentina. The company was formerly known as Carlyle Mining Corp. and changed its name to Rugby Mining Limited in March 2009. Rugby Mining Limited is headquartered in Vancouver, Canada.

Top Clean Energy Companies To Invest In Right Now: Liuyang Fireworks Limited (FWK.V)

Liuyang Fireworks Limited engages in the development, manufacture, and distribution of fireworks and related products in the People's Republic of China and internationally. The company is based in Liuyang City, the People's Republic of China.

Tesla, Outerwall, Alcoa are stocks to watch Monday

SAN FRANCISCO (MarketWatch) — Among the companies whose shares are expected to see active trade in Monday's session are Tesla Motors Inc., Outerwall Inc. and Alcoa Inc.

YouTube via Bloomberg Front end of Tesla Model S catches fire after an accident.

Investors are likely to closely watch Tesla (TSLA)  shares after the stock lost over 5% in value after an incident in which a Model S caught fire after an accident in Washington state earlier in the week. The stock recovered 4.4% on Friday and extended gains in after-hours after Chief Executive Elon Musk released a statement, essentially touting the safety of his vehicles.

Musk explained that a part from a semitrailer went under the Model S and impaled the underside of the vehicle with a peak force of 25 tons. "Only a force of this magnitude would be strong enough to punch a 3-inch-diameter hole through the quarter-inch armor plate protecting the base of the vehicle," he said. The impact caused a fire which began in the front battery module, but it did not enter the passenger compartment.

On the whole, analysts have maintained their upbeat outlook on the electric-car maker. "Although this incident will likely weigh on near-term sentiment, we do not expect this to derail near-term Model S orders and delivery momentum," Craig Irwin at Wedbush said in a note on Thursday.

/quotes/zigman/18949186/quotes/nls/outr OUTR 57.10, +4.92, +9.43% Outewrwall Inc.

Outerwall (OUTR)  shares rose almost 8% in after-hours trading after Jana Partners LLC, an activist investment fund, disclosed a stake in the company previously known as Coinstar. Jana now owns a 13.5% stake in Outerwall and will pursue strategic alternatives, including a sale, The Wall Street Journal reported. Outerwall operates a network of DVD rental kiosks at malls and grocery stores.

Late Friday, J.P. Morgan lowered its third-quarter earnings outlook for Alcoa (AA)  to 5 cents a share from 12 cents a share due to weaker-than-expected aluminum prices. Alcoa, whose quarterly reports once use to signal the symbolic start of the earnings season, was recently replaced on the Dow Jones Industrial Average by Nike Inc. (NKE) . The aluminum maker is scheduled to release third-quarter results on Tuesday. Shares of Alcoa were up 0.1% in after hours.

Top Dividend Companies To Own In Right Now

In Power Hedge's article, "Pacific Drilling: Strong Growth Potential And Undervalued Relative To Peers", you can read about Pacific Drilling's (PACD) bull case. It summarizes something along the lines:

Including its existing modern rigs plus new rigs and contracts concentrated in ultra-deepwater, Pacific Drilling should be on course to have $600 million in EBITDA during 2015, which compares favorably to other drilling companies in the same timeframe. There are also two other catalysts, including the chance of PACD paying a dividend and it building a further 4 rigs.

That's the bull case. What I will present in this article, is the very risky bear case which might also develop.

The bear case

The whole purpose of developing ultra-deepwater crude wells is based on the need for unconventional sources of crude to replace the depleting conventional wells, both located inshore and in shallow offshore waters. Drilling these ultra-deepwater wells is much more expensive than drilling inshore or in shallow waters offshore. It's not hard to see that, when the bull case rests on day rates for those rigs of as much as $660,000 per day.

Top Dividend Companies To Own In Right Now: Cedar Shopping Centers Inc (CDR)

Cedar Shopping Centers, Inc., real estate investment trust, engages in the ownership, operation, development and redevelopment of supermarket-anchored community shopping centers and drug store-anchored convenience centers in the United States. As of December 31, 2007, it owned 118 properties, aggregating approximately 12.0 million square feet of gross leasable area primarily in Pennsylvania, Massachusetts, Virginia, Ohio, Connecticut, New Jersey, Maryland, Michigan, and New York. Cedar Shopping has elected to be treated as a REIT for federal income tax purposes and would not be subject to federal income tax, if it distributes at least 90% of its REIT taxable income to its stockholders. The company was founded in 1984 and is based in Port Washington, New York.

Advisors' Opinion:

• [By Bill Smith]

  Valuation
  Lastly, because of the negative perception the entire industry has received, prices in this sector have been absolutely pummeled. ESI now trades at the lower end of all of its historical valuation bands: P/E, P/B, and P/S.
  
  Bullish Points
  Guru ownership and avg price: ESI owned by Hussman ($76.15), Weitz ($75.32), and Greenblatt ($73.29)Over 35% of shares are short, potential short squeezeStock buyback plan: ESI reduced outstanding shares by 19% yoy at the end of the 4th quarter. They repurchased 370K shares in 3Q11.The business model is scalable; the incremental cost to educate each additional student is low, leading to high marginsESI acquired Daniel Webster College, giving them a regional accreditation which they can use to broaden their reach in online classes
  Bearish Points
  High costs of education, in general, rightly or wrongly attract government intervention and could squeeze margins over time. Total student debt surpassed credit card balances, and sits at $1 Trillion as of the end of 2011.Subject to compliance with Dept of Education's 90/10 rules, which states a college can't collect more than 90% of revenue from students participating in federal loan programs.Cohort Default Rate (CDR): for-profit colleges must monitor the federal loan default rates of students who graduate or leave the school. If a school's CDR exceeds 25% for 3 consecutive years, or 40% in any one year, its students won't be eligible for federal financial aid.ESI competes on quality of product which is measured by graduation rates and ability to secure employment. For 2010, 70% of ESI graduates got employment in positions using skills taught in their program of study within 1 year. As of Oct 2011, this rate was 600 bp higher. The average annual salary reported by employed 2011 grads was $32K, compared to $32.4K for 2010 grads.With an improving economy, there's a potential ESI would see declining new student enrollmentsOver 35% of shares are short
  Summary

Top Dividend Companies To Own In Right Now: Lorillard Inc(LO)

Lorillard, Inc., through its subsidiaries, engages in the manufacture and sale of cigarettes in the United States. The company offers 43 different product offerings under the Newport, Kent, True, Maverick, and Old Gold brand names. Lorillard, Inc. sells its products primarily to wholesale distributors, who in turn service retail outlets, chain store organizations, and government agencies, including the United States? Armed Forces. The company was founded in 1760 and is headquartered in Greensboro, North Carolina.

Advisors' Opinion:

• [By Dan Caplinger]

  Reynolds American has been under attack from regulators, health agencies, and other government bodies for a long time, but tobacco opponents have redoubled their efforts. After Reynolds and peer Lorillard (NYSE: LO  ) fought back against an FDA attempt to force them to modify their cigarette packaging to include warnings with graphic images, the Centers for Disease Control have launched ad campaigns highlighting the health risks of smoking. New York City Mayor Michael Bloomberg made a proposal last month to force stores to get rid of tobacco displays, as a follow-up with the 10th anniversary of his then-controversial smoking ban.

• [By Tim Brugger]

  For the first time, the FDA has authorized the marketing of a new tobacco product via its substantial equivalence (SE) pathway, opening the door for Lorillard (NYSE: LO  ) to begin selling its new Newport Non-Menthol Gold Box and Gold Box 100 products, the company announced this week.

Top Gold Companies To Own In Right Now: Chevron Corporation(CVX)

Chevron Corporation, through its subsidiaries, engages in petroleum, chemicals, mining, power generation, and energy operations worldwide. It operates in two segments, Upstream and Downstream. The Upstream segment involves in the exploration, development, and production of crude oil and natural gas; processing, liquefaction, transportation, and regasification associated with liquefied natural gas; transportation of crude oil through pipelines; and transportation, storage, and marketing of natural gas, as well as holds interest in a gas-to-liquids project. The Downstream segment engages in the refining of crude oil into petroleum products; marketing of crude oil and refined products primarily under the Chevron, Texaco, and Caltex brand names; transportation of crude oil and refined products by pipeline, marine vessel, motor equipment, and rail car; and manufacture and marketing of commodity petrochemicals, plastics for industrial uses, and fuel and lubricant additives. It a lso produces and markets coal and molybdenum; and holds interests in 13 power assets with a total operating capacity of approximately 3,100 megawatts, as well as involves in cash management and debt financing activities, insurance operations, real estate activities, energy services, and alternative fuels and technology business. Chevron Corporation has a joint venture agreement with China National Petroleum Corporation. The company was formerly known as ChevronTexaco Corp. and changed its name to Chevron Corporation in May 2005. Chevron Corporation was founded in 1879 and is based in San Ramon, California.

Advisors' Opinion:

• [By Tyler Crowe]

  What a Fool believes
  Could a move like this squeeze the profitability of natural gas exports for the U.S.? Potentially, yes, but there are other places around the world that are more likely to suffer from a move like this. Countries like Australia, which has struggled to keep costs under control and doesn't have feedstock as cheap as in the U.S., are more likely to suffer from this. Chevron's (NYSE: CVX  ) massive Gorgon LNG project is more than $15 billion over budget, so cost overruns could make the return on investment for these kinds of projects less lucrative.

• [By Travis Hoium]

  If you thought stocks were getting hit hard today, you need to take a look at the commodities market. Gold is down 9.6% as I write, silver has fallen 12.9%, and oil is down 2.7% to less than $89 per barrel. This drop has hit oil giants Chevron (NYSE: CVX  ) and ExxonMobil (NYSE: XOM  ) , who are down 2.5% and 2.3%, respectively. You can see in the chart below that a drop in oil's price may impact earnings at both companies, but it'll have to be a lot more severe than $2 per barrel.

• [By Matt DiLallo]

  One of the best assets that Buckeye has acquired recently is the Perth Amboy marine terminal in the New York Harbor, which it purchased from Chevron (NYSE: CVX  ) for $260 million. In conjunction with the sale, Chevron entered into a multi-year storage and services agreement. Buckeye plans to spend more than $100 million to transform the terminal into one that can store multiple products as well as link it by pipeline to its nearby Linden complex and to upgrade it to handle Bakken-sourced crude oil coming in by rail and ship. This is an area where Buckeye really excels as it can take an underutilized asset from a large integrated company like Chevron and turn it into something of even greater value.�

Top Dividend Companies To Own In Right Now: Colgate-Palmolive Company(CL)

Colgate-Palmolive Company, together with its subsidiaries, manufactures and markets consumer products worldwide. It offers oral care products, including toothpaste, toothbrushes, and mouth rinses, as well as dental floss and pharmaceutical products for dentists and other oral health professionals; personal care products, such as liquid hand soap, shower gels, bar soaps, deodorants, antiperspirants, shampoos, and conditioners; and home care products comprising laundry and dishwashing detergents, fabric conditioners, household cleaners, bleaches, dishwashing liquids, and oil soaps. The company offers its oral, personal, and home care products under the Colgate Total, Colgate Max Fresh, Colgate 360 Advisors' Opinion:

• [By Dan Caplinger]

  Investors have always been interested in stocks that pay dividends, but lately, low interest rates on bonds and other fixed-income investments have made solid dividend payers even more valuable. Among the most promising dividend stocks in the market is Colgate-Palmolive (NYSE: CL  ) , and one big reason is that it is one of the few exclusive companies to make the list of Dividend Aristocrats. In order to become a member of this elite group, a company must have raised its dividend payouts to shareholders every single year for at least a quarter-century. Only a few dozen stocks manage to make the cut, and those that do tend to stay there for a long time.

• [By Demitrios Kalogeropoulos]

  Colgate-Palmolive (NYSE: CL  )
  Colgate's shares are trading well below the $62 high they hit just last month. The consumer goods company is heavily levered to international sales, with more than 80% of its business coming from outside the U.S. and more than half coming from emerging markets.

• [By Dan Caplinger]

  Moreover, it's starting to appear that Clorox has weathered a tough part of its business cycle. Throughout the industry, Procter & Gamble (NYSE: PG  ) , Colgate-Palmolive (NYSE: CL  ) , and Clorox all had to deal with rising costs for the inputs they needed to make their respective products. The companies responded by implementing price-cutting measures and passing on part of their higher costs to their customers. For its part, Clorox was able to expand its gross margins by a full percentage point, with a worse-than-normal flu season contributing to sales. Now that input-cost inflation is easing, P&G and Clorox expect to see better profitability, with growth starting to approach the faster rates that Colgate has enjoyed.

Top Dividend Companies To Own In Right Now: Sempra Energy(SRE)

Sempra Energy, together with its subsidiaries, develops new energy infrastructure, operates utilities, and provides energy-related products and services worldwide. It operates in six segments: SDG&E, SoCalGas, Sempra Generation, Sempra Pipelines & Storage, Sempra LNG (liquefied natural gas), and Sempra Commodities. The SDG&E segment has electric and natural gas franchises that locate, operate, and maintain facilities for the transmission and distribution of electricity and natural gas to residential, commercial, industrial, street and highway lighting, and direct access customers. The SoCalGas segment has natural gas franchises that locate, operate, and maintain facilities for the transmission and distribution of natural gas to electric generation, wholesale, large commercial, industrial, and enhanced oil recovery customers. The Sempra Generation segment involves in the generation and wholesale distribution of electricity through a fleet of natural gas-fired power generati on facilities in Arizona, Nevada, and Indiana, as well as Mexico with a total capacity of 2,513 megawatts. The Sempra Pipelines & Storage segment operates 1,883 miles of distribution pipelines, 224 miles of transmission pipelines, and 3 compressor stations in Mexico; operates Mobile Gas, a natural gas distribution utility located in Mobile and Baldwin counties in Alabama; and operates natural gas storage facilities in Washington County of Alabama and Simpson County of Mississippi. The Sempra LNG segment involves in the receipt, storage, and vaporization of LNG, as well as the purchase and sale of natural gas. It operates Energia Costa Azul LNG receipt terminal in Baja California, Mexico, as well as Cameron LNG receipt terminal in Hackberry, Louisiana. The Sempra Commodities segment engages in the commodities-marketing business. Sempra Energy has operations in the United States, Canada, Mexico, Argentina, Chile, and Peru. The company was founded in 1998 and is headquartered i n San Diego, California.

Advisors' Opinion:

• [By Richard Stavros]

  The Top Low-Carbon Utilities

  PG&E Corp (NYSE: PCG) Exelon Corp (NYSE: EXC) Entergy Corp (NYSE: ETR) Public Service Enterprise Group Inc (NYSE: PEG) NextEra Energy Inc (NYSE: NEE) Dominion Resources Inc (NYSE: D) Sempra Energy (NYSE: SRE)

  But that is not to say that, over the long term, high-carbon utilities might not be able to crack the technology and cost issues that would make “clean coal” competitive with other low-carbon energy sources. Secretary of Energy Ernest Moniz has said, “No discussion of US energy security and reducing global CO2 emissions is complete without talking about coal and the technologies that will allow us to use this resource more efficiently and with fewer greenhouse gas emissions.”

Top Dividend Companies To Own In Right Now: PPL Corporation(PPL)

PPL Corporation, an energy and utility holding company, generates and sells electricity; and delivers natural gas to approximately 5.3 million utility customers primarily in the northeastern and northwestern U.S. The company operates in four segments: Kentucky Regulated, International Regulated, Pennsylvania Regulated, and Supply. The Kentucky Regulated segment engages in the generation, transmission, distribution, and sale of electricity; and the distribution and sale of natural gas to approximately 1.3 million customers in Kentucky, Virginia, and Tennessee. The International Regulated segment owns and operates electricity distribution businesses in the United Kingdom that deliver electricity to 7.7 million customers. The Pennsylvania Regulated segment delivers electricity to approximately 1.4 million customers in eastern and central Pennsylvania. The Supply segment owns and operates power plants to generate electricity using coal, uranium, natural gas, oil, and water res ources; markets and trades electricity and other purchased power to wholesale and retail markets; and acquires and develops domestic generation projects. It controls or owns a portfolio of generation assets of approximately 11,000 megawatts in Montana and Pennsylvania. As of December 31, 2010, the company?s distribution system included 649 substations with a capacity of 25 million kVA, 28,838 circuit miles of overhead lines, and 24,131 cable miles of underground conductors in the United Kingdom. It also operated 377 substations with a capacity of 31 million kVA, 33,122 circuit miles of overhead lines, and 7,368 cable miles of underground conductors in Pennsylvania. The company was founded in 1920 and is headquartered in Allentown, Pennsylvania.

Advisors' Opinion:

• [By Dan Caplinger]

  Pennsylvania-based electric utility PPL (NYSE: PPL  ) found itself in the path of one of the most devastating storms in history last year, as Hurricane Sandy barreled into the mid-Atlantic and left billions of dollars in damage in its wake. Although PPL stock didn't suffer a long-term hit from the storm, the utility now faces a much different threat from rising interest rates that could eventually have a major impact on its financing costs. Let's take a look at what's been happening with PPL in the recent past and how it's responding to this new threat.

• [By Justin Loiseau]

  Across the pond, Britain-based PPL's (NYSE: PPL  ) Western Power Distribution is piloting a project to incentivize "smart" electricity use for 15 businesses. As part of the trial, businesses will receive financial compensation for reducing overall electricity use and for shifting use away from peak hours.�