Thursday, December 27, 2012

Investing in Tablet Personal Computing


Tablet Computing Works and Is a Good Investment

Below I have some tablet component companies to consider investing in but first review some basic information on the this new tablet computing trend. I bought myself an Android tablet this Christmas, and am very impressed with it and the personal computing I can do on it. There are some financial market and some other programs I need to run in which I still need a desktop and or a laptop for, but for the most of the personal computing I need to do the tablet gets the job done now.

Desktop Computing History Soon?

It seems to me now as many have already said that bulky desktops and very possibly laptops running Windows may become a thing of the past sometime in the future unless you’re running special heavy duty software programs, or your kids are hardcore PC gaming addicts. The Android and I’m sure the Apple tablet operating systems run very well, as well as the third party applications for them that tablets and smartphones can now get the job done and with the great advantage of their much smaller size and lighter weight. As far as Windows 8 that can run on tablets and smartphones, I’ve seen good and bad reviews about it. I would think Microsoft will be working to improve it and get some market share.

AnTuTu Android Benchmark

Before buying my tablet, I researched my purchased for about one month. I prefer Android for its open source OS but I’m sure Apple is just as good also. I learned about AnTuTu Benchmark that rates Android phones and tablets. After seeing that AnTuTu ranked the Asus Transformer Pad Infinity TF700T as number one and with my other tablet research I bought it, along with the add-on keyboard and am very happy with it. Review AnTuTu to see the rankings for yourself along with recent articles on new Android tablets and smartphones. AnTuTu along with other tablet information sites can help you to determine which tablet and component companies may benefit with growing sales and potential increased earnings per share to be making future investments into.

Tablets versus Smartphones

Smartphone screens are too small, computers are too big, and tablets seem to be just right. At least 10 inch tablet screens seem to be for me. With 10 inch screens its easy to type but with the 7 inch screen it’s a bit to small at least for my fingers. Tablets are convenient, portable, more powerful now, and they meet the needs of those of us addicted to instant access, always available multimedia, and with a internet connection anytime anywhere. Tablets are now overtaking smartphones in sales.

Toy Sales Down and Tablet Sales Up this Christmas

Toy sales for the most part this holiday season have been flat to slightly down from last year sales according to recent reports, with tablet sales booming now overtaking smartphone sales. And why not with a tablet being a multi-function device that you can be productive with along with its educational capabilities. With a tablet or smartphone you can stay connected to family friends and also be entertained with along with many more benefits and features.

China Tablet Manufactures

China has many manufactures that are making low to high quality tablets lesser cost tablets and smartphones these days, although Apple Asus, and Samsung still currently dominate the top end quality of the tablet market. For those on a budget, review PandaWill assortment of Chinese tablet brands using high quality components from worlds leading manufactures. Rockchip Electronics China is a standout chip maker for tablets with their current 70% Chinese market share.

Investing and Profiting from the New Tablet Personal Computing Trends

So with the huge new trend in tablet personal computing how do we invest and profit from it? Start with reviewing the component manufactures that supply to all the different global tablet and smartphone brands. They have the potential to significantly grow sales and earnings per share in the overall tablet smartphone market. Below is a list of companies that are involved in providing the CPU’s, semiconductors, chipsets, hardware, software, and accessories for the tablet and smartphone markets.

Notable Tablet Component Stock Picks from Motif Investing

Here’s a short list of top component companies that Motif Investing thinks are poised to increase their earnings per share and stock price potential right now from continued tablet and smartphone sales. Below that is a list of other stocks that are involved in the tablet smartphone industry.

Arm Holdings (ARMH) – Worlds leading semiconductor intellectual property supplier.
OmniVision (OVTI) – Image sensor company.
Synaptics (SYNA) – Touch screen solution company.
Silicon Labs (SLAB) – Specialized semiconductor company.
Nvidia (NVDA) - Broad market semiconductor company.
Qualcomm (OCOM) - Broad market semiconductor company.

Semiconductors
ARM Holdings (ARMH)
Atmel (ATML)
Avago (AVGO)
Broadcom (BRCM)
Cirrus Logic (CRUS)
Fairchild Semiconductor (FCS)
Intel (INTC)
Invensense (INVN)
Marvell (MRVL)
MIPS Technologies (MIPS)
Nvidia (NVDA)
Omnivision (OVTI)
Qualcomm (OCOM)
Silicon Image (SIMG)
Skyworks (SWKS)
STMicroelectronics (STM)
Synaptics (SYNA)
Texas Instruments (TXN)
TriQuint (TQNT)
Xilinx (XLNX)

Memory and Storage
San Disk (SNDK)
Micron Technology (MU)

Display
LG Display (LPL)
Corning (GLW)

Tablet and Smartphone Manufactures
Apple (AAPL)
Asus (ASUUY)
Dell (DELL)
Google (GOOG)
HTC (2498.TW)
Hewlett Packard (HP)
Huawei (002502.SZ)
Lenovo(LNVGY)
LG (LPL)
Panasonic (PC)
Nokia (NOK)
Research in Motion (RIMM)
Sony (SNE)
Toshiba (TOSBF)

Click Here to Review Investing Trading Applications and Services for Tablets and Smartphones

Monday, December 17, 2012

Risk-On Risk-Off Risk Undecided


I’m hearing from lots of traders that they’re getting “chopped up” in the post QE3 markets. They’re not alone. The world of managed money is doing no better. Institutions and hedge funds are telling me and my colleagues that it’s all they can do to hold onto gains made earlier in the year.

The “sure things” like Apple and Google have taken hits recently. The lovely uptrend that lasted from the June lows until just before U.S. elections has given way to a choppy sideways market that is just enough volatile to take out stops on swing trades for both the long and the short sides. Basically, things have gotten ugly for those trying to find “outperformance” or alpha in this market.

What’s more striking is that the “risk on” vs. “risk off” paradigm has not been working. Back in May and June of this year, I wrote an article series on how this phenomenon had changed the way institutional traders look at the market. In essence, portfolios and trades were being swung from “risk on” (things that work well when markets are moving higher) to “risk off” (those instruments that are relatively better in down markets) in an almost binary or yes/no fashion.

Risk On / Risk Off becomes “Risk Undecided”

One of the pages that I keep in my charting package is labeled “Risk On – Risk Off”. It contains a series of charts that track the ratios of classic pairs of risk on vs. risk off assets. I thought it might be instructive to give you a glimpse of what I’m seeing when I looked at those charts as of the close of Monday (12/10). Let’s start with Small Cap stocks, represented by the Russell 2000 (risk on) vs. the large cap stocks of the S&P 500:


The chart is fairly self explanatory – risk on asset at the top, risk off asset in the middle, and the ratio of the two at the bottom. When the ratio heads up, that indicates risk on behavior. The ratio dropping equals risk off. For almost two weeks the ratio has been going sideways telling us “risk undecided”…

In the bond world, when we look at riskier (high yield) bonds vs. U.S. Treasuries, we see a similar picture:


Once again, we see that neither side can gain the advantage. How about on the currency side? The classic combo is the Australian dollar for the risk on side vs. the Japanese yen for risk off:


Let’s look at one last chart – silver (higher risk) vs. gold (lower risk):


We can see that after silver gained some ground on gold, the ratio has been flat since late November.

For the past several weeks, all of these charts indicate similar behavior: there has been no flight to quality, nor has there been any desire to jump into the riskier asset.

What Does It Mean?

We’re in a market that can’t decide which way to go. Perhaps a resolution for the much discussed fiscal cliff will give the market some directional movement. But until then, the market doesn’t want to pick sides between the various risk assets. Unless you have some keen insight into where the fiscal cliff debate will end up, this may be a good time to keep your powder dry.

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Tuesday, December 11, 2012

Advanced Emini Day Trading Strategies Free Webinar Event Dec 11


This Free Live Market Event Reveals The 3 Pillars of Profitable E-mini Trading

Fact: over seventy percent of overall market volume is now traded via computer algorithms.

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What's Your Strategy?

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The old-school approach of highly emotional and discretionary trading has become obsolete, thanks to computer algorithms.

To compete today, traders need a mechanical approach--a strategy that can provide a substantial upgrade to your current modus operandi for trading.

My colleague, Chris Dunn, is sharing a clear road map to day trading e-mini futures in his upcoming live market event, "The 3 Pillars of E-mini Trading."

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Chris is gaining a rapidly-growing, loyal following among E-mini traders, all thanks to his step-by-step, easy to understand strategy and live market training.

The response to his last webinar was very impressive, and I'm sure this one will be even bigger.

During this live market event, you'll see a strategy that aims to pick off small, calculated moves in about 60-90 minutes a day.

Chris wants to show you how this works in the live market, because it's easy to look like a genius in hindsight, but the only thing that matters in trading is trading off the "hard right edge", or what isn't on the chart yet.

If you're an active trader hoping to benefit from the massive opportunity of day trading e-mini futures in today's highly volatile market, then you need to see this strategy.

You have nothing to lose by checking out this webinar, so go ahead and register now before it's full.

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Click here to review more E-mini trading resources.

Monday, December 10, 2012

Investing in a International Digital Media Stock


Zacks Investment Research reports Gannett Co., Inc. (GCI) is diversifying its business model by adding new revenue streams in an effort to adapt to the changing face of the multiplatform media universe. These endeavors have helped this Zacks #1 Rank (Strong Buy) media conglomerate to gradually emerge as a true value pick, as is evident from its compelling valuation, including a price-to-earnings (P/E) multiple of 7.75.

What Makes Gannett a True Value Pick?

Gannett remains well positioned to harness the opportunities of a rapidly changing business model, such as digitalization, in order to keep itself on the growth path. The company recently provided an update of its growth initiatives and stated that its long-term objective is to attain annual revenue growth of 2% to 4%.

To achieve this, the company is focusing on its subscription-based model and Digital Marketing Services products. Management expects subscription revenue for the U.S. Community Publishing division to increase 25% by the end of 2013, which would translate into a contribution of approximately $100 million to operating profit.

For 2012, company-wide digital revenue is projected advance 19% year over year to $1.3 billion, whereas retransmission revenue is expected to jump 20% to $96 million. Retransmission consent fees for 2013 are expected between $135 million and $140 million, reflecting a more than 40% advance from the 2012 level.

Gannett now forecasts total revenue growth of over 5% and earnings at 87 cents to 88 cents per share for the fourth quarter of 2012. The company has surpassed the Zacks Consensus Estimate in 8 of the past 10 quarters. The average surprise for the period was 4.6%.

The company posted third quarter earnings of 56 cents per share on October 15, which beat the Zacks Consensus Estimate by nearly 4% and rose from the prior-year period by 27.3%. The upside reflected a surge in television advertising attributed to the Olympics and political spending, and the subscription-based model.

Gannett's total revenue climbed 3.4% year over year to $1,309.3 million, due to an increase in revenues across the Broadcasting and Digital segments, partially mitigated by a drop in the Publishing division. Total revenue also came ahead of the Zacks Consensus Estimate of $1,293 million.

Earnings Estimates on the Rise

The Zacks Consensus Estimate for 2012 rose 3.1% to $2.30 per share over the last 60 days, as 5 out of 7 estimates were revised upward. The current estimate implies year-over-year growth of 7.8%.

For 2013, the Zacks Consensus Estimate advanced 4.5% over the same timeframe to $2.30 per share, thanks to 7 upward revisions out of 9 total estimates. The current estimate suggests year-over-year growth of 0.2%.

Impressive Valuation

Gannett’s P/E multiple remains below 15.0, suggesting a value stock. Its price-to-book (P/B) ratio of 1.55 and price-to-sales (P/S) ratio of just 0.79 are lower than the industry averages of 2.20 and 1.60, respectively. Volume is fairly strong, averaging roughly 3,924K daily. It has a remarkable trailing 12-month ROE of 20.1%, compared with the peer group average of 16.6%. The company’s PEG ratio of 1.0 stands on par with the benchmark indicator and indicates that the stock is reasonably valued given the long-term earnings growth projection of 7.9%.

The company’s stock price remains below 2012 and 2013 earnings estimates, reflecting that the stock is still undervalued. Currently, shares are in the range of $15.00 to $20.00, and have a healthy year-to-date return of 36.7%, significantly higher than the S&P 500’s return of 10.7%.

Founded in 1906 and headquartered in McLean, Virginia, Gannett Co., Inc. operates as an international media and marketing solutions company. It has a well-established presence across various platforms, such as the Internet, mobile, newspapers, magazines and TV stations. The company reports operating results under three segments - Publishing, Broadcasting and Digital. Gannett, which primarily competes with The New York Times Company (NYT), has a market cap of $4.11 billion.

Tuesday, December 04, 2012

Forex ProfitCaster System Review


A retired industrial engineer sketched some unusual triangles on a napkin while at breakfast one morning at a local greasy diner & kind of stumbled upon a way to predict the direction of the 8 most profitable Forex markets with 79.6% accuracy.

Click here to watch what he teaches in a very entertaining video.

(Watch carefully to see the actual dirty napkin in his video, scribbled with his notes.)

Forex ProfitCaster is brand new forex trading product created by Bill & Greg Poulos of Profits Run, whom many people will know from their previous popular forex trading software and home study courses like the Forex Profit Multiplier.

This time around the they are taking Forex ProfitCaster up a few notches in terms of the software behind the product.

The Forex ProfitCaster uses the latest web techologies to bring about forex trading software that is run totally online, so that anyone with a full featured browser can run the software without the need to download and install anything.

This also means that it is platform independent, so that neither the operating system nor the device matters at all. It can be run on Windows, Mac, Ipad etc., as long as you have a full featured browser running on your computer or device you are good to go.

The basic Forex ProfitCaster package uses custom charts and runs on two time frames, hourly and end of day, with upgrades available for more.

Just keep in mind that there is a time factor with the Forex ProfitCaster.

Bill and Greg Poulos only keep the doors open to premium products like Forex ProfitCaster for a short time, so that they can focus on giving the best possible training and support to the people who come on board during the time when the doors are open. The Forex ProfitCaster comes with the following.

Web-Based Trade Alert Software

Custom web-based trade alert software based on breakthrough proprietary ‘triangle’ forecasting algorithms.

Ability to send alerts via email or text message

2 trading methods

1 hour and end-of-day charts

Physical Home Study Course

All new packaging

4 CD-ROM video tutorials & full-color reference manuals

2 trading blueprints

Quick start guide

Online Group Coaching Sessions

Weekly direct access to Bill Poulos and his trading team

Online Q&A sessions

Service & Support

One year of unlimited student email support

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Monday, December 03, 2012

Buying Into Stellar Energy Earnings


Zacks Investment Research reports a strong third-quarter performance for CVR Energy Inc. (CVI) sent all earnings estimates higher on the petroleum refiner in the past 30 days. This Zacks #1 Rank (Strong Buy) also hit its 52-week high on November 29. In addition, CVR Energy has a compelling valuation and is a true value pick with a price-to-book (P/B) ratio of 2.4, a price-to-sales (P/S) ratio of 0.5 and a price-to-earnings (P/E) ratio of 6.4.

Stellar Q3 Results

On November 5, CVR Energy reported stellar third quarter adjusted earnings of $2.95 per share that exceeded the Zacks Consensus Estimate by 29.4%. The result also surged 90.3% from last year. The outperformance was led by strong operating performances across all refineries.

Total revenue surged 78.2% to $2,409.6 million in the quarter from last year’s $1,352.0 million, which also surpassed the Zacks Consensus Estimate of $2,161.0.

Earnings Momentum Trending Higher

All 4 earnings estimates for 2012 have moved north over the past 30 days, lifting the Zacks Consensus Estimate by 13.2% to $7.14 per share. For 2013, the Zacks Consensus Estimate increased 15.2% to $5.77 over the same period as all 4 earnings estimates moved upward.

Impressive Valuation

The company has a price-to-book (P/B) ratio of 2.4 and a price-to-sales (P/S) ratio of just 0.5. In addition, its forward price-to-earnings (P/E) multiple of 6.4 is lower than the peer group average of 8.0. A P/E below 15.0, a P/S ratio less than 1.0 and a P/B ratio under 3.0 generally indicate value.

CVR Energy has a trailing 12-month ROE of 41.4%, compared with the peer group average of 20.9%. This suggests that the company invests its earnings better than industry rivals. The stock also looks attractive with respect to its trailing 12-month return on assets (ROA) of 17.6% and return on investment (ROI) of 25.8%, which are above the peer group averages of 7.3% and 15.1%, respectively.

A Look at Chart

Shares of CVR Energy have been trading above the 50-day and 200-days moving averages. In particular, the continuous uptrend in stock prices and the ever increasing gap between the share price and the moving average since mid November indicate a bullish trend. The year-to-date return for the stock is 144.1% compared with the S&P 500 return of just 12.6%.


Headquartered in Sugar Land, Texas, CVR Energy, Inc. is an independent refiner with more than 185,000 barrels per day of processing capacity in the Mid-continent United States. With its subsidiaries and affiliated businesses, the company operates independent refining assets in Coffeyville, Kansas, and Wynnewood, Oklahoma. CVR Energy also remains engaged in marketing high value transportation fuels to customers through tanker trucks and pipeline terminals, and a crude oil gathering system serving Kansas, Missouri, Oklahoma, Nebraska and Texas. Through a limited partnership - CVR Partners, L.P. (UAN), - it acts as a producer of ammonia and urea ammonium nitrate, or UAN, fertilizers.

Click Here to Review More Energy Company Stock Picks and Analysis

Buying Into Steller Energy Earnings


Zacks Investment Research reports a strong third-quarter performance for CVR Energy Inc. (CVI) sent all earnings estimates higher on the petroleum refiner in the past 30 days. This Zacks #1 Rank (Strong Buy) also hit its 52-week high on November 29. In addition, CVR Energy has a compelling valuation and is a true value pick with a price-to-book (P/B) ratio of 2.4, a price-to-sales (P/S) ratio of 0.5 and a price-to-earnings (P/E) ratio of 6.4.

Stellar Q3 Results

On November 5, CVR Energy reported stellar third quarter adjusted earnings of $2.95 per share that exceeded the Zacks Consensus Estimate by 29.4%. The result also surged 90.3% from last year. The outperformance was led by strong operating performances across all refineries.

Total revenue surged 78.2% to $2,409.6 million in the quarter from last year’s $1,352.0 million, which also surpassed the Zacks Consensus Estimate of $2,161.0.

Earnings Momentum Trending Higher

All 4 earnings estimates for 2012 have moved north over the past 30 days, lifting the Zacks Consensus Estimate by 13.2% to $7.14 per share. For 2013, the Zacks Consensus Estimate increased 15.2% to $5.77 over the same period as all 4 earnings estimates moved upward.

Impressive Valuation

The company has a price-to-book (P/B) ratio of 2.4 and a price-to-sales (P/S) ratio of just 0.5. In addition, its forward price-to-earnings (P/E) multiple of 6.4 is lower than the peer group average of 8.0. A P/E below 15.0, a P/S ratio less than 1.0 and a P/B ratio under 3.0 generally indicate value.

CVR Energy has a trailing 12-month ROE of 41.4%, compared with the peer group average of 20.9%. This suggests that the company invests its earnings better than industry rivals. The stock also looks attractive with respect to its trailing 12-month return on assets (ROA) of 17.6% and return on investment (ROI) of 25.8%, which are above the peer group averages of 7.3% and 15.1%, respectively.

A Look at Chart

Shares of CVR Energy have been trading above the 50-day and 200-days moving averages. In particular, the continuous uptrend in stock prices and the ever increasing gap between the share price and the moving average since mid November indicate a bullish trend. The year-to-date return for the stock is 144.1% compared with the S&P 500 return of just 12.6%.


Headquartered in Sugar Land, Texas, CVR Energy, Inc. is an independent refiner with more than 185,000 barrels per day of processing capacity in the Mid-continent United States. With its subsidiaries and affiliated businesses, the company operates independent refining assets in Coffeyville, Kansas, and Wynnewood, Oklahoma. CVR Energy also remains engaged in marketing high value transportation fuels to customers through tanker trucks and pipeline terminals, and a crude oil gathering system serving Kansas, Missouri, Oklahoma, Nebraska and Texas. Through a limited partnership - CVR Partners, L.P. (UAN), - it acts as a producer of ammonia and urea ammonium nitrate, or UAN, fertilizers.

Click Here to Review More Energy Company Stock Picks and Analysis

Friday, November 30, 2012

Holiday Season Stock Market Forecast Outlook


Top-Down S&P 500 End-Of-Year 2012 Target

Zacks in-House: In the Thanksgiving week of November, stocks rallied for five straight sessions, all the way up to 1409. After getting down to 1360, buyers stepped up en masse, with shares rallying up to 1409.

We won’t find it surprising that bears will want to test the lower bound 1390-1400 level of the S&P 500 range. For now, it is providing solid support. However, if we see any weak U.S. economic data or any Fiscal Cliff controversy, we will likely find ourselves below that mark for a while. That is only the short term picture.

Further out, we remain modestly bullish (with a Fiscal Cliff agreement in hand) on a year-end close above the 1470 high. Always be keenly aware of the primary trend of stocks. That has been firmly bullish since March 2009 and should not be easily tossed aside. Meaning the major U.S. indexes have a long-term upward bias. To bet against that is likely unwise.

NASDAQ

We like the IT sector on valuation. After a sell-off on broad Q3 IT earnings weakness, we raise the NASDAQ-100 back to an outperform rating on valuations and on an overly pessimistic outlook for fundamentals. Foreign IT revenue growth from the Asia-Pacific region, and domestic U.S. business spending on IT have good prospects. Europe’s IT budget outlook remains OK. We would add to a position here, among stronger growing IT companies who have recently met or beaten estimates. Apple keeps things interesting, and drives the index up or down.

Intertwining Current Fed Macro Outlook with November’s Zacks Industry Ranks

(1) With rising jobs numbers and improved consumer confidence, Consumer Staples and Consumer Discretionary are presently two key sector strengths. The Consumer Finance industry is also strong.

(2) Other High Zacks Ranked goods and services industries are arriving from the building momentum in the Housing Recovery.

A housing related industry that has a very strong Zacks Industry Rank is Home Furnishing - Appliances. Building momentum in U.S. housing also helps the Financials sector. We see a strong Zacks Industry Rank for Banks & Thrifts and Real Estate.

Interestingly, Building Products and Construction & Engineering ranks took a dive in November.

(3) Fiscal Cliff tax sunsets that raise U.S. personal income tax rates or sequestration that cuts spending appear to restrain the Industrials sector outlook. We have seen weakness in capital goods spending.

Industrials weakness is apparent in poor November Zacks Ranks for Industrial Conglomerates, Metal Fabricating, and Industrial Machinery.

(4) IT weakness is a notable feature of the weak global GDP growth environment. Growing revenues is difficult for the big global IT businesses. The shift to smaller screen tablets and mobile is not helping either.

There is no highly rated IT industry. In an important ongoing signal, November saw the weakest IT Zacks Rank for the Semiconductor industry.

(5) Europe slowdown issues play out with a Market Weight rating to Energy.

(6) In addition, the China Sluggishness has notable effects to Materials and Industrial sectors. The Steel and Metals-Non-Ferrous Industries are still struggling due to these China slowdown effects, along with the Coal industry. Another element to the China slowdown is fresh weakness in Transportation industries, as weak coal shipping and prices play out.

Click Here for a Free Trial of Zacks Investment Research

Thursday, November 29, 2012

Forecasting the USDJPY Last Winning Trade


Click Here to Download Your Free 14-page eBook: "Trading Forex: How the Elliott Wave Principle Can Boost Your Forex Success"

How Elliott wave analysis helps you as a forex trader with built-in, risk-defining safeguards.

Elliott wave analysis is not a crystal ball. (No market-forecasting method is.)

But here's what is remarkable: Even when your Elliott wave forecast doesn't pan out, you have built-in safeguards to alert you -- and help you manage risk. Here's a real-life example.

Going into the November 14 low, USD/JPY charts had been showing an impulsive downward Elliott wave pattern. Impulses are 5-wave moves, but on November 13-14, the pattern looked incomplete: the fifth wave down seemed to be missing.

Here's a chart our Currency Specialty Service subscribers saw early on November 13:


So, our analysis on November 13 suggested that USD/JPY would fall further. But USD/JPY just would not fall; instead, it went sideways.

That suggested to our Currency Specialty Service team that the wave (4) you see in the chart above was extending. Perhaps it was developing as another Elliott wave pattern -- maybe a contracting triangle? This chart and analysis described to subscribers that scenario:


"A bearish fourth-wave triangle is another idea that's in a position to yield new lows in wave (5). Resistance rests at 79.655/765."

Note that line: "Resistance rests at 79.655/765" -- it represents the very risk-defining safeguards I mentioned earlier.

How? Well, there are things that Elliott wave patterns just are not allowed to do. In a contracting triangle (an A-B-C-D-E formation), prices must stay within converging trendlines -- and they cannot overlap the start of wave A, the origin of the pattern. Resistance at 79.655/765 was exactly that: the price point where the contracting triangle interpretation would be invalidated.

Practical application: If you were bearish on USD/JPY on November 14, you could have used the price area of 79.655/765 to manage your position risk.

As you probably know, USD/JPY did not go sideways for long. Nor did it go down. Soon after, it went higher and breached that key resistance level:


When one Elliott wave pattern ends, another one begins. As soon as that key resistance in USD/JPY was breached, a new road map for the Japanese yen became clear.

Click Here to Download Your Free 14-page eBook: "Trading Forex: How the Elliott Wave Principle Can Boost Your Forex Success"

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Wednesday, November 28, 2012

Investing and Trading Around Stock Earnings Announcements


Did you know that we can use corporate earnings information as more or less a stock trading tip? Longer term investors are typically very concerned about what effect corporate earnings will have on currently open positions that they may have in a company that is about to announce earnings. Short term traders have similar concerns regarding short term trades they may be considering. If you are making a short term trade in a company that is just about to announce their earnings it may be a good idea to pass on that particular opportunity until the earnings announcement has been made. The reason for this of course is that analysts make their predictions about what corporate earnings will be for publicly traded companies so when those predictions are announced the market will immediately bake that information into the pricing of the company’s stock. When the earnings announcement takes place if the actual earnings that are reported by the company are significantly different from the predictions that the analysts made the market will immediately bake the new information in the price sometimes making the price of the stock move quickly and erratically.

In reality this is not a bad thing it is just the market correcting the price based on the new information but when you are a shareholder, especially if you are short term trader and the price drops quickly, it can have a devastating effect. Of course longer term investors are impacted by this to a much lesser degree because of the timeframe of their holding period but regardless of this both longer term and shorter term holders of the stock will be affected. It can go the other way too where there is a good surprise and the stock value increases but it seems that typically the surprise will be to the down side.

The most obvious way to combat this situation is to make sure that you do not trade a stock when an earnings announcement is imminent. To find out the earnings announcement schedule you can go to something like Yahoo Finance to get all of the information that you need.

Click here to review the current earnings reports that are scheduled to be released.

Just type in the information for the company you are interested in and everything you need to know will be presented.

A very commonly asked question around corporate earning and trading is how much emphasis should one place on earnings when making our trading decisions. I would not let earnings announcements handicap your trading but I do believe that they are something to pay close attention to. Longer term holders of stocks may be interested in corporate earnings if they are holding the stocks for their dividends but shorter term traders may want to avoid this situation altogether. Often times when dividends are paid the stock price adjusts by approximately the same amount as the dividend so in many cases there is no clear reason to intentionally trade a stock when an earnings announcement is close.

I believe that if you are watching a stock and a good setup occurs that meets all of your trading criterion you should check that specific company’s earnings schedule before making the trade. If the announcement is off into the future by a few weeks or at least out as far as your estimated trade horizon is make the trade. The main time that an earnings report hurts is when it is under the analysts expectations but regardless of if they meet expectations or not it can still work out to be a good trade. Allot of companies are very profitable but if their earnings fall short even by a little from what the market expectations are the stock price could get hurt in the short term however if it is a good and profitable company this should be of little consequence for longer term investors.

Click here to learn more about Profits Run

Tuesday, November 27, 2012

Copying Winning Trades Automatically


Click to review and register for more trading webinars, seminars, workshops and events.

Last week, Casey Stubbs finally allowed access to his Investment Copier, which is his tool that allows clients to automatically copy the trades that he places in his account into their own personal accounts.

He only left access available for a few days and then closed the doors on Friday, so a lot of people missed out on taking advantage of his incredible offer.

Well, after getting a lot of feedback from people who wanted to get in, but couldn't because of the Holiday, Casey let me know that he is going to open it back up for about 24 Hours (Tuesday night until Wednesday night) to give all of those people one more chance to get in.

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Monday, November 26, 2012

Global Entertainment Stock Pick


Zacks Investment Research reports Viacom Inc. (VIA), the media giant that controls Paramount Movie Studio and several leading cable TV channels, currently offers an attractive dividend yield of 2.2%. With a long-term earnings potential of 14.7%, this Zacks #2 Rank (Buy) also offers solid growth potential backed by an improving advertisement market, upcoming movies for the holiday season and a solid tie-up with pay-TV operators.

Solid Dividend Yield

Viacom has been paying dividends for 10 consecutive quarters. Last August, management raised its dividend rate by 10%. Currently, the company offers a lucrative dividend yield of 2.2%, significantly higher than the industry average of 1.8%.

A Mixed Quarter

On November 15, Viacom reported mixed financial results for its fiscal fourth quarter. Earnings per share of $1.21 surpassed the Zacks Consensus Estimate by 1.7% and the year-ago earnings by 14.2%. However, total revenue of $3,363 million dropped 17% year over year and fell short of the Zacks Consensus Estimate by 1.9%.

Affiliate fee (paid by pay-TV operators) revenue increased 12% in the U.S. and 11% in the international markets on a year-over-year basis. However, this strong performance was offset by a 6% decline in domestic advertising revenue and a 7% decline in international advertisement revenue. Nevertheless, operating income increased by a sharp 13% to $1,050 million from $929 million.

Earnings Estimates

Earnings estimates for Viacom have been static for the past several weeks. The Zacks Consensus Estimate for fiscal 2013 is unchanged at $4.76, while the Zacks Consensus Estimate for fiscal 2014 crept up by a penny to $5.46 in the past 7 days.

The current Zacks Consensus Estimates for 2013 and 2014 reflect estimated year-over-year gains of 13.1% and 14.7%, respectively.

Attractive Valuation

Viacom currently looks attractive with respect to several valuation metrics. The stock’s forward P/E of 10.50x indicates a huge discount of 23.2% from the peer group average of 13.67x. With respect to the forward P/S metric, the stock is currently trading at 1.9x, slightly higher than the peer group average of 1.68x. Viacom looks quite attractive given its trailing 12-month ROE of 29.5%, which is 85.5% higher than the peer group average of 15.9%.

Chart Looks Promising

Shares returned to a growth trajectory on November 15 (the day the company reported its fiscal fourth quarter results),. Going forward, there is an untapped potential locked in the stock, which is evidenced by its current long-term growth potential of 14.7%, significantly higher than the industry growth potential of 12.9%.


Based in New York, Viacom Inc. is a leading entertainment content company that operates primarily in the U.S. and Europe. The company is a global leader in the creation, promotion, and distribution of film entertainment, news, sports and music programs. Viacom offers many of the world’s best known entertainment brands. Prominent among them include MTV, MTV2, VH1, VH1 Classic, CMT, Nickelodeon, Logo, Nick at Nite, Nick Jr., Teenick, COMEDY CENTRAL, Spike TV, TV Land, BET, Rock Band, mtvU, MTV Tr3s, and Paramount Pictures. Viacom currently has a market cap of approximately $25.2 billion.

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Friday, November 23, 2012

Advice on Trading Forex During the Holiday Season


Well, the holiday season is here now starting with Thanksgiving. This is followed by a month of holiday fun ending with Christmas and New Years at the end of December. This is all good but how does it affect us as traders? There are various ways that this holiday time can impact our online trading including our emotions and our risk. These are two things I would like to discuss a bit today.

First, the holidays season seems to cause traders to leave. They like to spend time with their family and friends and take time to relax. This means that the markets can trade a bit light. With this light trading come heavy volatility in the form of the market reacting strongly to somewhat small news announcements. It can also do the opposite and cause the markets to remain a bit flat. In either situation we need to be cautious of our trading.

So how can we protect ourselves when the markets are more volatile? Well, we could simply not trade, although that is not what most traders would choose to do. We could trade as usual but that might not protect us from the increase or decrease in volatility. Most traders will choose to do something in between. One suggestion would be to simply decrease the amount you are risking. So if you normally risk 2% consider dropping it to 1%. Or if you risk 1% drop it to ½ %. This way you are still trading while adjusting for the added risk that you might encounter over the holidays.

The other issue that many traders have to deal with is there emotional side of things. The holidays can bring up emotions that don’t happen at other time during the year. It could be that we need more money to buy gifts so we become more aggressive than we should or we “check out” because we want to relax over the holiday. Whatever it may be, just make sure you check yourself before you begin trading to make sure you are emotionally read to deal with the holiday market.

So at the beginning of this holiday season, take some time to review how you will handle and trade a market that may be different than it has been the rest of the year. By being aware of these possible conditions we can take steps to avoid the negative impact the could otherwise have on your trading.

One last word of advice. With the markets trading with higher volatility and with emotions at higher levels take some time to relax and enjoy the things that are most important. This will recharge you energy and help you to prepare yourself to become a better and more focused trader.

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Wednesday, November 21, 2012

Screening Software to Pick Winning Stocks


Click Here to Review Different Stock Screening Software

I use stock screeners every day.

I cannot imagine investing in stocks without the assistance of a screener.

There are over 10,000 stocks out there and you need a quick and reliable way to sort through them all.

It's not enough to type familiar ticker symbols into a website and do a spot check on whatever items happen to be displayed.

For one, most people's universe of familiar stocks is relatively small. And that alone will limit one's investment opportunities. And two, even if your universe of familiar stocks is larger than most, nobody's is big enough to stay abreast of them all.

Nor would you want to. Many stocks should not even be considered as investments. So you don't want to clutter your mind with those tickers.

But many others are worthy of consideration, and you need a way to get those onto your radar screen.

This is important. Many investors are not seeing the kinds of returns they want in their portfolios because their universe of familiar stocks is limited.

What's interesting is that some of your best performing stocks right now were likely new to you at some point.

But there are plenty of others that could also be top performers for you if you only knew about them.

And the best way to discover new, potentially profitable stocks is to regularly scan for the best opportunities.

Wish List

Some people avoid screeners because they think it's complicated, or they don't think they know enough about stocks to look for the right things.

But you don't have to be an analyst to benefit from a screener.

For example, if you're interested in finding some new stocks for your portfolio, just ask yourself some simple questions.

Such as: Do I want stocks that will see both sales growth and earnings growth next year?

If so, plug those into the screener.

Now, only those with your desired growth rates will appear on your list. And those with negative sales growth or negative earnings growth will NOT be on that list, so you don't have to waste your time on them.

Would you prefer your stocks to have low debt levels or high debt levels?

(If you're thinking about traits you'd like your stocks to have, I'm assuming you said low debt levels.) And if that's the case, plug that into your screener as well.

Now, only stocks with your desired growth rates AND low debt will come through.

Would you want your stock to post a positive surprise or negative surprise?

If you're bullish, you probably said positive surprise.

There's no foolproof way to perfectly predict which stocks will positively surprise in the future. However, studies have shown that stocks that have surprised in the past have a tendency to surprise again in the future. So by screening for stocks that have recently posted positive surprises, you are increasing your chances that those stocks will positively surprise for you.

Just go down your wish list of characteristics you'd like your stocks to have.

Your criteria do not have to be fancy, and your screens do not have to be complex. Much of it is common sense. And the screener will help you sift through all of the garbage so you can spend your time on only those worth considering.

Inspiration

A good screener can also inspire you and introduce you to new ways to pick good stocks.

In the Research Wizard (the screener that I use daily), there are hundreds of different screening items to pick and choose from. (I can even create my own.)

And they are all organized in easy to understand categories like Growth, Valuations, Margins, etc.

But in addition to the most common and most popular screening items, there are other lesser known items available, but no less powerful.

A great example is the R-Squared Growth Rate item. I had seen that item in the screener over and over again. One day I decided to test it. I read the definition that came with it and decided to give it a try.

Long story short, I was amazed at its predictability. And I ended up creating a screen with that little known item. And I was so glad I did. Because that screen was actually UP in the bear market of 2008 while the market plunged nearly -40%!

They say when you play a sport with someone better than you, it raises your game. Or when you work with a talented person, you perform better. The same is true with the tools that you use.

By seeing what a tool is capable of, it allows you to think about what you could be capable of.

I never would have 'discovered' the R-Squared Growth Rate item (not to mention countless others) if those items hadn't been staring at me and made available in a tool that allowed me to test them.

A good stock screener can inspire you and help you pick better stocks on a consistent basis. And as traders and investors, that's what we all want.

Today's screen focuses on some of my current wish list items:

Top 50% of Zacks Ranked Industries
(The top half of Zacks Ranked Industries has outperformed the bottom half by a factor of more than 2 to 1.)

Zacks Rank equal to 1
(Over the last 26 years, the Zacks #1 Rank (Strong Buy) stocks have shown an average annual return of 26% a year.)

Positive Projected Sales and EPS Growth
(Simply put, I want my stocks to be growing on both the top and bottom lines.)

Positive Sales and EPS Surprises
(As mentioned earlier, stocks that have surprised in the past have a tendency to surprise again in the future. This increases our chances of getting into stocks that will positively surprise for us.)

Expanding Margins
(If margins are going up, that means management has a good grip on costs, which allows more of each sale to be counted as earnings.

Price to Sales Ratio less than or equal to 1
(In my testing I have found that stocks with a Price to Sales (P/S) ratio of less than 1, significantly outperforms stocks with a P/S ratio higher than that. (Over 4 demonstrated the worst average returns.)

There were 21 stocks that made it through this week's screen. Here are 5 of them:

CALM - Cal-Maine Foods
(Industry: Foods-Mics. Diversified, ranked 73 out of 265, or top 28% of Zacks Ranked Industries)

CVI - CVR Energy
(Industry: Oil Refining & Marketing, ranked 55 out of 265, or top 21% of Zacks Ranked Industries)

EEFT - Euronet Worldwide
(Industry: Financial-Misc. Services, ranked 41 out of 265, or top 15% of Zacks Ranked Industries)

LBY - Libbey
(Industry: Appliance-Household, ranked 1 out of 265, or top 1% of Zacks Ranked Industries)

THO - Thor Industries
(Industry: Building-Mobile Homes/Rec. Vehicles, ranked 41 out of 265, or top 15% of Zacks Ranked Industries)

All of these stocks meet every single one of my current wish list items, which means you can focus your time on only the top selections.

A good screener can help you save time, discover new stocks, consistently find winners and inspire you to become a better trader.

Be sure to get the rest of the stocks on this list. And make sure you sign up for a free trial to our powerful, yet easy to use, screening and backtesting program for your own stock picking inspiration.

Click Here for a Free Trial of Zacks Investment Research

Tuesday, November 20, 2012

eCommerce Stocks Forecast Outlook


The Electronic Commerce, or e-commerce, industry is one of the most progressive sectors of the economy. The industry is evolving very rapidly, so data collection and evaluation are particularly difficult. Consequently, one has to rely largely on surveys by both government and private agencies.

According to the U.S. Census Bureau, the manufacturing sector is the largest contributor to e-commerce sales (46.4% of their total shipments), followed by merchant wholesalers (24.6% of their total sales). These two segments make up the business-to-business category.

Retailers and service providers generated just 4.4% and 2.3%, respectively of their revenues online, a slightly higher percentage than they were in the prior year. The Bureau categorizes these two segments as business-to-consumer.

This places the business-to-business category at 90% of total ecommerce sales, with the balance coming from the business-to-consumer category. The latest numbers from the Bureau suggest that the fastest-growing segments were manufacturing and retail. [All the above data from the U.S. Census Bureau relate to 2010, as published in May 2012]

A. Retail

Total retail e-commerce was 5.1% of total retail sales in the second quarter of 2012, up slightly from 4.9% in the first quarter, according to the quarterly retail trade survey by the U.S. Census Bureau. Forrester Research estimates that this share will go up to 11% by 2015.

Recent data from comScore (as compiled in the table below) indicates that this segment recovered much faster from the economic downturn and continued to grow at an accelerated rate over the last few years.


Key Drivers

Since the industry is in evolution, the drivers are changing. For instance, the initial push came from the time savings and convenience of online transactions. To this were added the benefits of comparison shopping and personal recommendations. As technology required for personalized recommendations developed, became more available and its benefits more evident, most e-tailers started adding the feature until it is now considered a must-have.

Today, the biggest driver of growth in the industry is the adoption of smartphones, tablets and other mobile Internet devices.

In fact, trends indicate that consumers prefer mobile browsers when shopping, searching and entertaining themselves, while preferring apps for navigation and acquiring information.

comScore sees global mobile Internet users increasing very rapidly and surpassing desktop Internet users by 2014. A June 2012 study by comScore on behalf of Paypal revealed that mobile ecommerce tripled from 3% in the fourth quarter of 2010 to 9% in the fourth quarter of 2011. The trend is likely to continue since 4 out of 5 smartphone owners used the devices for shopping and related activities in July (September 2012 study by comScore). Men and women in the 25 to 44-year age group are doing most of the shopping on both Android and iOS devices.

While smartphones are extremely convenient when on the move, tablets have several advantages of their own. In fact they are a boon to the ecommerce industry, since the larger screens offer better visibility of online stores and merchandise, thus facilitating purchases. This is the reason that tablets remain the device of choice for making online purchases while smartphones are the preferred devices for store location, coupon redemption and such other “ön-the-go” activities. Given the unique advantages of smartphones and tablets, it appears that they are working in conjunction to boost total online retail sales.

Around 37% of customers in the third quarter were comparison shopping on their mobile devices while in retail stores, something the industry now calls “showrooming.” Because of the resultant cost savings and convenience, this trend is likely to continue (comScore, November 2012).

Continued advancements in technology are improving navigation and customer experience on ecommerce sites, which is improving reviews and thus drawing more traffic to the sites.

The digital consumption of books, music, video and games all over the world is extending the reach of these goods and thereby boosting sales. Therefore, previously unconnected electronic goods, such as TVs and game consoles are now being modified to enable connectivity. On the other side of the fence, online versions of books, music, video and games that can be downloaded and consumed on a traditional computer or any other connected device are becoming available.

Since the shift in consumption patterns is resulting in multi-functional electronic gadgets that are no longer optimized for a particular activity, there is a great drive to develop technologies that could improve the quality of each experience.

Free shipping remains a major lure, as seen from the recent e-tailing group survey, where 85% of surveyed consumers said they intended to make use of it this holiday season.

Top-selling items

A July 2012 study by Forrester Research points to the most popular products being sold online. The 10 hottest individual product categories are women’s apparel, books, computer hardware, computer software, apparel, toys/video games, video DVDs, health and beauty, consumer electronics and music.


Apparel is a huge market and although online sales are currently under 10% of total apparel sales, the category already generates the most dollars. Selling tools, such as zoom, color swatching and configurators are helping the process. Even primarily brick-and-mortar outfits like Macy’s (M) sees that consumers purchasing through multiple channels (online and offline stores) tend to spend more. This is encouraging traditional retailers to offer an online store to supplement sales. Online sales also show better conversions since searches usually draw consumers with a prior intention to purchase.

The increase in technology purchases over the Internet is driven by not only individual consumers, but also companies and governments. The efficient and timely processing of orders, choice of payment options, subscription-selling and sales under the SaaS model are all facilitators.

The Association of American Publishers says that ebook sales in the U.S. continue at a steady rate and are likely to touch $1.5 billion this year. What is more encouraging is however the growth U.S. players are seeing in international markets (sales up 333% in 2011). Amazon (AMZN) and Apple (AAPL) are the primary channels facilitating international expansion, although Barnes & Noble (BKS), other smaller players and local companies in international markets are also playing a part.

Google’s (GOOG) Youtube remains the forerunner facilitating online video consumption, with significantly higher unique viewers (UVs) and unique streams. VEVO and AOL Media Network are in second and fourth positions, respectively in both respects. While Yahoo! (YHOO) managed to steal the third position in terms of UVs, Hulu took its place with respect to the number of streams. Highest hours of viewership however went to Netflix (NFLX), which pushed Youtube and Hulu to numbers two and three, respectively. [Nielsen estimates, September 2012]

The digital consumption of music has grown greatly since Apple announced its first iPod. Amazon and others are also seeing their business grow. Nielsen estimates that in the first three quarters of 2012, U.S. digital album sales increased 15% from the comparable period last year, with shipments on track to set a new record in 2012.

The gaming segment has suffered over the last few quarters, impacted by the economic slowdown that affected consumer spending. However, while this affected total gaming spend, it did not affect the online segment, which gained from the increasing digitization of games, the desire to play across multiple platforms and the availability of free-to-play games to draw customers. As a result, sales through online channels continue to grow at the expense of traditional retail.

Since video, games and music are often social activities, they are increasingly being marketed on social platforms such as Facebook (FB) and Pinterest.

Facebook’s SocialStore, as it is called uses MarketLive's Intelligent Commerce Platform that enables marketers to display product information, promotions/discounts, shopping carts and check-out options. Both comparative shopping and comparative pricing are possible. The basic advantages of the system that are currently being touted are that it allows easy brand building, creates meaningful commercial relationships and makes use of account-holders’ social connections to attract new buyers.

A recent study by the E-tailing Group reveals that of 100 U.S. consumer product merchants with e-commerce websites surveyed, 98 had a Facebook account. Around 90% of these redirected the user to the merchant’s own page, 96% had loaded brand-building videos, 56% had product-oriented videos, 44% had store locators and 38% had promotions.

According to comScore, Pinterest is currently the third largest social networking site. While the company is yet to get into the advertising business, its users are already making money and engagement compares favorably with Facebook.

Selling discount coupons is also helping retail. Groupon (GRPN) is the leader here, which along with its closest rival LivingSocial offer discount coupons with a very low shelf life from local players looking for sales. The company offers huge discounts to attract buyers and collects a percentage of the sales thus generated. This kind of business is very competitive, since it has very low barriers to entry.

As a result, not just Amazon and Google, but also a host of other much smaller parties have started doing some business in this format. Technology investments are also required in order to serve customer needs effectively. Considering the prospects, we don’t see the platform as a major contributor to e-commerce sales in the near term.

Market Position

comScore estimates that Amazon remains the leading Internet retailer based unique visitors (UVs), followed by eBay (EBAY), Apple, Wal-Mart Stores (WMT), Target Corp. (TGT) and Best Buy (BBY), in that order. The top 3 have a much higher penetration on both Android and iOS platforms.

B. Travel

The U.S. Commerce Department expects international travel to the U.S. to continue over the next few years. Visitor volume is currently expected to increase 6-8% a year from 2012 to 2016 leading to a 49% increase in the number of users during the period. Visitors from the Middle East are expected to be the slowest-growing (29%). South America, Asia and Oceania growth rates are expected to be comparable at 83%, 82% and 82%, respectively.

The fastest growth is expected to come from China (232%), South Korea (200%), Brazil (150%), Russian Federation (139%) and India (94%). Travel and tourism is one of the country’s strongest industries, contributing a trade surplus in each of the last 20 years.

According to research from eTrack, eMarketer and Alexa.com compiled in September 2012, Internet-based travel booking revenue has grown 73% over the last five years, with 57% of all travel reservations being made online. The bookings and revenue generated by source and category (latest estimates) are represented in the following graphs.




The top travel booking sites are Booking.com, Expedia.com, Hotels.com, Priceline.com, Kayak.com (recently acquired by Priceline), Travelocity.com, Orbitz.com and Hotwire.com. Since Booking.com and now Kayak are part of Priceline (PCLN) and both Hotels.com and Hotwire.com part of Expedia (EXPE), this narrows down the top companies in the segment to Priceline, Expedia, Orbitz Worldwide (OWW) and Travelocity.

According to a report by PricewaterhouseCoopers, the improving economy will result in a 1.8% increase in demand for hotel reservations this year, which along with a 0.5% increase in hotel supply will lead to higher occupancy rates (60.9% expected in 2012 compared to 60.1% in 2011). This will also raise hotel rates by 5.1%.

Smartphones are playing a key role in travel purchases, especially for last minute purchases. eMarketer expects smartphone travel researchers to grow from 23.7% of total online travel researchers in 2011 to 53.9% in 2016. Similarly, smartphone travel purchasers are expected to grow from 12.6% in 2011 to 32.5% in 2016.

Another report by PhocusWright mentioned that when online penetration of the travel market reached 35% in any country, growth rates were likely to slow down to single-digits. The research firm mentioned that only the U.S., U.K. and Scandinavia had reached this level of penetration and most other markets across Europe, Asia and Latin America would continue to show good growth rates.

C. Payment Systems

With practically all market research indicating solid growth in ecommerce sales over the next few years, online players are vying with each other to come out with convenient and secure payment solutions. The FIS Mobile Wallet from Fidelity National Information Services Inc. (FIS) is basically a bar code reader that feeds information related to the purchase into the user’s smartphone and uses it as a medium to transfer the information to the cloud. Online purchase of merchandise is also possible. The solution provides maximum security, since the transaction is carried out entirely in the cloud through the retailer’s and banker’s applications and personal information is not shared at the time of purchase.

While QR code payments (as the technology is called) have already been made by half the smartphone users in the U.S. (report compiled by eMarketer), the usage was mainly out of curiosity. It appears that the safety of the system comes at a price, which is the time it takes to complete a transaction. This is the reason that Google is still betting on its digital wallet.

Google’s digital wallet allows a customer to make a payment by waving his mobile phone over a POS terminal. While the near field communication (NFC) technology used in the system is already in use in some parts of Europe, the concept is relatively new to the U.S. Other than the convenience of the whole thing, the main attraction being highlighted is the security of the payment channel, since neither the customer nor the retailer would be recording the personal information related to the customer. Adoption of the device, although it is some way off, will have a remarkable effect on the volume and value of mobile transactions, since it should increase the percentage of higher-value sales.

However, the cost of POS terminals is a downside to the system that could easily turn away retail partners. This is an evolving area and much could change over the next few years.

The greatest success however is currently being enjoyed by eBay’s Paypal, which has seen some success at traditional retailers such as The Home Depot (HD) and Office Depot (ODP). One drawback that remains is that although the system is itself secure, there is always a security risk for a buyer not used to dealing with Paypal, since it requires personal information.

According to an Emphatica study, mobile banking has not picked up sufficiently in either the U.S. or Canada, due to security-related concerns. However, an analysis by Deloitte shows that mobile banking could become the most-preferred banking method by 2020. The study estimates that 20-25 million gen Y consumers will become new banking customers by 2015.

A study on banking.com shows that 48% of "Generation Y" (gen Y) consumers are already using online banking services. Moreover, their preference for online banking is so high that around 30% said they would consider switching financial institutions if they did not provide the service. Both online and mobile banking by gen Y largely consists of checking account balances and transferring funds, although they also like to pay bills on the platform.

It is believed that high smartphone penetration, higher income within this group and greater digital sophistication will drive increased demand for mobile banking services. Since mobile banking is expected to be the most cost efficient for banks, investment in technology to improve and expand mobile banking services is likely to increase.

D. Security

With online transactions expected to boom over the next few years, the topmost concern remains security. While banks will spend significantly on secure payment systems, hackers are expected to have a field day, largely targeting the flood of customers going online. Last year saw a huge increase in security breaches, something that may be expected to continue.

Alternative payment systems will continue to gain popularity. While some of these payment systems, such as eBay’s PayPal have been around for a while, other systems, such as Google’s digital wallet and the FIS Mobile Wallet are still in the making. Alternative payment systems never really gained momentum in the past because of the low volume of transactions. However, as online transactions continue to increase, many more such systems could suddenly become more available.

We expect mobile security to become a major focus area for technology companies, since this is the stumbling block to payments through the mobile platform (currently just 2% of U.S. online spending). Additionally, hackers continue to multiply and data breaching has become commonplace.

E. Online Advertising

The U.S. online advertising market has seen some very strong growth in the past few years, despite the recession that impacted the entire economy. 2012 numbers will benefit from the national election and the summer Olympics. eMarketer estimates that the market will grow 23.3% in 2012 to $33.8 billion, compared to the 23.0% growth in 2011.

However, growth rates are expected to drop over the next few years: 17.7% in 2013, 13.5% in 2014, 8.9% in 2015 and 7.8% in 2015. Falling growth rates notwithstanding, the share of online ad spending in total ad spending is expected to increase from 20% in 2011 to 31% in 2016. By contrast, TV ad spending is expected to drop slightly from around 38% of total ad spending in 2011 to less than 37% in 2016. Print is expected to decline even more significantly from 22.6% in 2011 to 16.4% in 2016.

The current strength in online advertising is coming primarily from the growing popularity of the display format. Of all the forms of online advertising, display (including video, banner ads, rich media and sponsorships) is expected to see the strongest growth over the next few years. Also, of all the forms of display advertising, video and banner ads are expected to grow the strongest from 2011 to 2016.

Contrary to previous expectations, it now appears that search will remain supreme throughout, although its share will give way slightly to video ad spending which will nearly double. The lower pricing of video and banner ads has made them popular with brand advertisers, so ad inventories are solid. Another factor favoring display ads is the proliferation of smartphones, where the smaller screens make display ads more effective than text ads.

Facebook was the largest player in the display ad segment with a 14% share in 2011. Google was close on its heels with 13.8%. eMarketer estimates that Facebook and Google will remain neck-to-neck this year, with Google pulling ahead in 2013 and widening the gap in 2014. Yahoo, which was in third position with 10.8% share in 2011, is expected to see a steady decline in sales and market position. Microsoft (MSFT) and AOL (AOL), while growing revenues are expected to maintain market share.

The underlying drivers of growth of the display format are the continued increase in the number of users, greater propensity of users to consume online, a growing inventory of advertisements that serve to lower advertisement prices and the push into display advertising.

Search advertising is expected to remain popular, because results are measurable, and therefore, more predictable than other media. This also makes the market more resilient in recessionary conditions, since advertisers are more confident about the results of their spending.

Investment Opportunities


As evident from the above table, online travel companies are the picks for the sector, particularly Priceline and Expedia. International expansion is a key factor driving growth for these companies and collaborative agreements with local players are helping. The ADR is something to watch here, as lower-value inventories are on the rise.

Of the retail companies, we recommend eBay (EBAY), which has an attractive growth rate and has shown solid execution over the last few quarters. Moreover, eBay’s turnaround story continues and its many initiatives to drive growth are likely to pay off. Another stock that looks attractive for longer-term investors is Zynga (ZNGA), which has a history of beating estimates and is also seeing upward revision in estimates.

Weakness

Amazon (AMZN) is currently in the investment phase and there is a great deal of uncertainty as to how long it will continue in this phase. The uncertainty is leading to repeated downward revisions to estimates, which in turn is pushing down the Zacks Rank. The largest online retailer is by no means a write-off, but short-term investors would gain little from its solid revenue growth and international investments.

We also have reservations about Groupon (GRPN), which operates in a highly competitive segment with low barriers to entry.



Monday, November 19, 2012

Lifestyle Investment Stock Pick


Zacks Investment Research reports Dillard’s Inc. (DDS) has gained significant momentum following its fiscal third-quarter results on November 8, which included an earnings surprise of 28%. Shares of this fashion, cosmetics and home furnishings retailer hit a 52-week high of $86.71 on the day of the announcement, and have now amassed a year-to-date return of 87.6%. Earnings estimates for fiscal 2012 and 2013 have been trending upward over the past week, helping DDS achieve a Zacks #1 Rank (Strong Buy) on November 13.

Fabulous Q3

Dillard’s reported fiscal third-quarter earnings of 96 cents per share last week, surpassing the Zacks Consensus Estimate of 75 cents and doubling last year’s earnings of 48 cents. This marked the ninth straight quarter with a positive earnings surprise. The performance was aided by healthy sales performances, gross margin improvement and prudent cost control measures.

Net sales (including CDI Contractors LLC or CDI) increased 4.8% year over year to $1,449.6 million from $1,382.6 million. Merchandise sales, excluding CDI, came in at $1,425 million, compared with $1,366 million. The company’s total revenue (including other income) of $1,486.3 million climbed 4.8%. Comparable store sales (comps) were up 5%. The Zacks Consensus Estimate for the quarter was $1,450 million.

Men’s apparel and accessories were the outperforming categories, followed by women’s accessories, lingerie and shoes. The category that witnessed the lowest sales was home and furniture. Dillard’s gross margin from retail operations (excluding CDI) expanded 40 basis points (bps) to 37.1%, while consolidated gross margin (including CDI) rose 30 bps to 36.6%.

Earnings Estimates Advancing

The Zacks Consensus Estimate for fiscal 2012 jumped 4.6% to $6.33 per share in the last 7 days, reflecting year-over-year growth of 50.4%. For fiscal 2013, the Zacks Consensus Estimate climbed 9.9% to $7.20 per share over the same time frame, representing a year-over-year increase of 13.7%.

Chart Echoing Strength

Barring a few occasional pull backs, shares of Dillard's have been trending upward since the beginning of the year, and are now hovering close to its 52-week high, reflecting bullish growth momentum for the rest of 2012. The stock has been consistently trading above its 200-day moving average since February 17, 2012. It has also remained above the 50-day moving average since October 31, 2012.

Volume is fairly strong, averaging roughly 443K daily. The year-to-date return for the stock is 87.6% compared with the S&P 500’s return of 6.1%.



Founded in 1938 and headquartered in Little Rock, Arkansas, Dillard's is a large department store chain, featuring fashion apparel and home furnishings. The company’s primary product categories are: women’s and junior’s apparel; shoes; accessories and lingerie; men’s clothing and accessories; cosmetics; home; and children’s clothing. Its merchandise mix consists of both branded and private-label items. As of October 27, the company operates 284 outlets and 18 clearance centers and one Internet store across 29 states. Dillard's, which primarily competes with Kohl's Corp. (KSS) and Macy's, Inc. (M), has a market cap of $3.89 billion.

Friday, November 16, 2012

Top Reasons Not to Sell Stocks


Let's change it up. Let me give you the top five reasons NOT to sell everything.

Just trying to be more constructive here.

One: We are very, very oversold and people are getting very negative. We all accept that we are going down and many are taking action.

Two: Many stocks will be impacted when we go over the fiscal cliff. Notice I said "when" because unless politicians rise above, we are going over it. But other stocks, international stocks with bases here that sell soft goods that make them buyers of commodities, will do well and they need to be bought into the weakness.

Three: Everything in the end gets discounted, meaning that we can adjust to anything and when we get there any new negatives won't mean much. But a new positive or a deal will send us soaring.

Four: The new taxes and spending cuts, while draconian, will not be the end of the world for the big secular growth stories out there, including health and wellness, as well the desire for a bargain.

Five: Plenty of companies have the power to raise dividends to where even the after-tax the returns are far superior to bonds.

Am I being a Pollyanna about this with these five positives? History says that to be solely destructive is to miss an important move in the market, although we don't know where it might begin.

We also know that EVERY SINGLE TIME in every single downturn, no matter how big or small, we've had stocks that bottom before others, usually in thirds, depending upon the circumstances. Sometimes industrials bottom first because the shock that brought them down is one-time only. Sometimes it is the soft goods that hit bottom and begin to bounce because the proximate cause of the decline is a downturn in the economy. Other times it is the higher-yielding stocks that bottom because they are fixed-income alternatives.

These are givens.

In virtually no cases could you wait until the big, bad event occurred to do buying. Things always bottomed before that. In no cases did you not initially suffer losses if you stayed the course. In every case, when you blew out of everything you did poorly, especially after you look longer term. Remember that if you bought the ten most-actively-traded major-capitalization stocks the day before the 1987 crash, where we lost 508 points off a 2,260-point Dow Jones basis (arguably the dumbest day ever to buy stocks) you were up, in some cases up nicely, on all of them.

So being constructive is actually being rigorous.

But trying to time or game the cliff has become something that's somewhat hopeless. Unless you see the leaders together in a room, publicly or at a Camp David hideaway, you know they aren't feeling the pressure from their constituents to do a deal. So many don't pay much in income tax, so many don't own stocks, that the pain isn't visible for the majority of the voters. That can only change if the politicians come together out of good, which is unlikely, or out of panic because the stock market's fallen so dramatically. It is the latter that makes being constructive just so very difficult in these uncertain times.

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