CEO Gaffe of the Week: lululemon athletica

Last year, I introduced a weekly series called "CEO Gaffe of the Week." Having come across more than a handful of questionable executive decisions when compiling my list of the worst CEOs of 2011, I thought it could be a learning experience for all of us if I pointed out apparent gaffes as they occur. Trusting your investments begins with trusting the leadership at the top -- and with leaders like these on your side, sometimes you don't need enemies!

This week, we'll turn our attention to the lululemon athletica (NASDAQ: LULU  ) and its soon-to-be-outgoing CEO, Christine Day.

The dunce cap
To say that actions sportswear is a hot-selling item would be nothing short of an understatement. While most apparel retailers have languished with low single-digit growth as consumers struggle with less take-home income in direct relation to higher taxes, Lululemon and its action-sports peers have soared.

Under Armour (NYSE: UA  ) and Nike (NYSE: NKE  ) have been two exceptional beneficiaries of this trend. Under Armour's first-quarter results, for instance, delivered a 27% jump in footwear sales thanks to innovative new running shoe designs. Nike, best known for its shoes made specifically for active individuals, also saw footwear sales jump by double digits in North America and Western Europe in a challenging third quarter.

Lululemon delivered similarly impressive results in its latest quarter when it reported a 21% increase in sales to $346 million and a 9% increase in gross profit.

The quarter, though, could have been so much better if quality-control issues didn't still hang over Lululemon like a gray cloud. In March, some of the company's most loyal customers began to complain about the company's flagship Luon black yoga pants after the sheer fabric wound up being too revealing, eventually leading to a product recall. It's one thing for a company to have a foul-up in its production quality, but the stakes are considerably higher for Lululemon, which requires a pristine public image to sell yoga and exercise apparel that can in many cases go for more than $100 per piece. Consumers won't pay extra if they don't feel they're getting a higher-quality product. They could just as easily make a stop at Target to get something for 10% to 20% of the cost.

In the wake of this product boo-boo, Chief Product Officer Sheree Waterson left the company in April. We also witnessed same-store sales guidance for the second quarter coming in at a sequentially lower growth forecast of just 5% to 7%.

To the corner, Ms. Day...
It might seem a bit unfair to blame Christine Day for the sheer-pants issue when she, as a CEO, has multiple other tasks to worry about in addition to product quality in her stores. However, a CEO is ultimately the person responsible for the success and failure of a company.

Day has done a good job of expanding Lululemon's brick-and-mortar presence, taking the chain from 71 stores to 218 in just five-and-a-half years. However, same-store sales comparisons are beginning to slow and most growth is coming from store expansion rather than organic traffic and sales volume increases.

To add fuel to the fire, Christine Day also announced that she'd be stepping down as CEO of Lululemon as soon as a successor was named, causing Lululemon's share price to dive more than $10. Day's departure was cited as being for "personal reasons," but it can be taken a number of different ways.

First, it could be a signal that growth is in fact slowing and she's running out of answers as to how to reignite the Lululemon engine outside of merely opening new stores. Second, it could be another affirmation that the onus of fault for the Luon yoga pants product recall falls squarely on her shoulders. The timing couldn't be worse for her coming resignation, as investors were going to utilize the bullishness of this report (the company handily topped Wall Street's expectations) to put the product recall safely in the rearview mirror, but now have it back in the forefront again.

We've seen far more foolish acts from CEOs for sure in this series, but it's not often that a simple resignation can bring back bad memories for shareholders and wipe out in excess of $2.2 billion in market share in just three days.

Do you have a CEO you'd like to nominate for this dubious honor? Shoot me an email and a one- or two-sentence description of why your choice deserves next week's nomination, and you just may see your suggestion in the spotlight.

Did Lululemon's ship just set sail?
Lululemon has the potential to grow its sales by 10 times if it can penetrate its other markets like it has in Canada, but the competitive landscape is starting to increase. Can the company fight off larger retailers and ultimately deliver huge profits for savvy investors? The Motley Fool answers these questions and more in its most in-depth Lululemon research available. Thousands have already claimed their own premium ticker coverage; gain instant access to your own by clicking here now.

The Beginners' Portfolio: Should We Sell Vodafone Group Plc?

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

LONDON: The Beginners' Portfolio is based firmly on a "long-term buy and hold" ethos, or "LTBH." Now, some investors have done very well by taking that to mean "forget and hold forever," but that's really not my approach. No, for me, investments need to be reexamined at regular intervals, based on two key criteria:

Firstly, on price. If a share price has risen so that its valuation looks to be fully realised, and it's not a bargain any more, consider selling and looking for a better place for the money. I don't believe any of the Beginners' holdings are at that stage.

Secondly, if the fundamental nature of the company, including any of the factors that led to the original purchase decision, have changed, it's also time for a reevaluation. And Vodafone (LSE: VOD  ) (NASDAQ: VOD  )  has changed!

Verizon
There could be big changes in the pipeline based on Vodafone's relationship with Verizon Communications (NYSE: VZ  ) , with Vodafone owning 45% of Verizon Wireless. We recently had Verizon hinting that it might not pay a dividend this year, but that turned out to be a bit of brinkmanship -- Verizon wanted the cash as much as Vodafone, and the payment materialised as usual.

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Then we've heard all sorts of on-again, off-again stories about a possible takeover, or a merger of the two companies, or the sale of Vodafone's Verizon Wireless stake.

I'm convinced something will happen, but this is really not news, as these shenanigans were happening at the time of our purchase -- and I can only see an eventual deal being to the advantage of Vodafone shareholders. On this score, I'll revisit our Vodafone holding when something actually happens.

The dividend
But there has been another development, and something very important has changed -- Vodafone has announced a change in its dividend policy! The dividend was a key part of my original buy decision, and I was looking forward to yearly rises in the cash paid out.

And when final results were released on 21 May, the full-year dividend was hiked by 7% to provide a 5.1% yield on the share price at the time. Forecasts for next year suggest a 5.3% yield on the current share price of 194 pence ... so what's the problem?

Well, among the rest of the announcement, Vodafone told us that, in future, it "aims at least to maintain the ordinary dividend per share at current levels." That's no commitment to any future rises, and the company would satisfy its new policy even if it never again lifted its annual payout.

And that does concern me, as I see Vodafone as being mainly a mature dividend payer, with share price growth a bonus. It's certainly not enough to make me want to dump the shares yet -- not with the new policy effectively promising a yield at least close to that 5.3% for March 2014, and not with the shares on a modest forward P/E of 12.

No more rises?
But, if the dividend does stagnate, I'll be revisiting my decision -- and I'll be paying careful attention to dividend news at interim time.

Finally, my idea of the kind of shares that should make up the core of a beginner's portfolio is the same as my choice for an ISA, or a retirement portfolio -- or, in fact, any portfolio. I'd start with good strong companies that should stand the test of time, and potentially reward you for decades.

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

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Get Paid To Buy This Rebound Play, With A Shot At 80% Upside

The changes at Groupon (Nasdaq: GRPN) appear to be paying off. The departure of founder and CEO Andrew Mason in February marked an emotional low point. The stock has doubled since then, and it is now up nearly 250% from the extreme low in November.

 

The bottoming bounce from the $2.60 low to the $9.43 yearly high has support at the $6 midpoint of the range.

Looking at the bigger picture, the post-IPO high near $31 to the extreme lows has a recovery target of about $16, about 82% above the current price.

As of this writing, GRPN is trading around $8.80. If you are comfortable holding on to this inexpensive stock for a potential recovery, then selling put options could allow you to collect income while you wait to get into GRPN at a 14% discount.

Cash-Secured Put Selling Strategy
While the typical investor might use a limit order to buy a stock or ETF at a designated price or lower, the options trader can do one better by selling a cash-secured put.

This strategy has the same mathematical risk profile as a covered call. With put selling, there is an obligation to buy the stock at the strike price if it is assigned, allowing you to get into the stock at a discount. In fact, the true entry cost basis is even lower with the subtraction of the premium you earned from selling the puts.

And if the stock is not below the strike price at expiration, then the premium received is all profit. In other words, you're getting paid not to own the stock.

There are two rules traders must follow to be successful at selling put options.

Rule One: Sell puts only on stocks you want to own.
The intention of this strategy is to be assigned the stock as a long-term investment (each option contract represents 100 shares). So make sure you have the money ready to buy the stock at the options' strike price if a sell-off occurs. Paying in full ensures that no additional money is needed to hold the stock for potentially many months or even years until a price recovery.

Rule Two: Sell either of the front two option expiration months to take advantage of time decay.
Collect premium every month on put sales until you are assigned shares at a cost-reduced basis. Every month that you keep the premium is money subtracted from your entry price.

Action to Take --> Sell to open GRPN Aug 8 Puts at 40 cents or better. (This is a volatile stock, so I suggest using a limit order to get the desired price.)

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This cash-secured put sale would assign long shares at $7.60 ($8 strike minus 40-cent premium), which is about 14% below GRPN's current price, costing you $760 per option sold. If the options expire worthless, you keep the $40 premium, earning a potential 5.3% return in 23 days.

But remember, you should only sell this put if you want to own GRPN at a discount to the current price. If you are assigned the shares, a September covered call can be sold against the stock to lower your cost basis even further.

If the stock does not fall below the strike price before expiration, then you keep the premium you collected, essentially getting paid not to buy the stock.

For more analysis on GRPN, see the video below (starting at 3:10):

This article was originally published at ProfitableTrading.com:
Get Paid to Buy This Stock at a Discount for a Chance at an 80%-Plus Rally

Why Stocks Are Continuing to Tumble

Blue-chip stocks are continuing their descent today as investors and analysts fruitlessly insist on speculating about the Federal Reserve's next moves. With roughly an hour left in the trading session, the Dow Jones Industrial Average (DJINDICES: ^DJI  ) is off by 41 points, or 0.27%.

The original impetus for today's double-digit decline wasn't something that happened overnight -- though the steep decline in Asian markets certainly didn't help. Rather, it was comments made by Federal Reserve Chairman Ben Bernanke back on May 22 about the possibility that the central bank may reduce its support for the economy. If unemployment and economic growth continue to improve, Bernanke told Congress' Joint Economic Committee, then the bank could decide to reduce its monthly bond purchases at one of its upcoming monetary-policy meetings.

These comments were underscored last week. Following the most recent policy meeting, Bernanke noted, "If the incoming data are broadly consistent with this forecast, the Committee currently anticipates that it would be appropriate to moderate the monthly pace of purchases later this year." Not content to leave it at that, he went on to say, "If the subsequent data remain broadly aligned with our current expectations for the economy, we would continue to reduce the pace of purchases in measured steps through the first half of next year, ending purchases around mid-year."

As I've discussed before, this is big news. While investors should be primarily concerned with the fundamentals of their specific investments (valuation, earnings growth, etc.), the past month has shown that issues of liquidity are important, too. That being said, I continue to believe that investors would generally be best-served by focusingonly on fundamentals. By "liquidity," I mean the Fed's injection of money into the market through its monthly bond purchases. Because this drives down bond yields, investors hunting for income transitioned into stocks over the past year or so. But with these programs purportedly coming to a conclusion, the flow of funds appears to have reversed.

The front lines of this battle are in the housing and banking sectors. The KBW Bank Index (DJINDICES: ^BKX  ) , which tracks the banking sector, is down by 1% as I write. Banks are affected because they hold massive bond portfolios, the value of which will decline as the Fed draws back. At the same time, the resulting higher long-term interest rates (bond prices and yields are inversely correlated) will drive up profitability. At a recent industry conference, Bank of America's chief financial officer addressed the latter issue, saying that if longer-dated yields rose by a percentage point , it would bolster net interest income by about $1.6 billion, according to The Wall Street Journal. And a "parallel shift" -- in which both short- and long-term rates rise by comparable magnitudes -- could yield an additional $3.7 billion.

Meanwhile, housing is feeling the effects via higher mortgage rates. For portions of last year, a 30-year conventional mortgage carried an interest rate of less than 3.5%. Since the Fed's announcements, the same rate has climbed back to more than 4%. This is sending shivers through homebuilders' stocks, as the net effect is to make homes more expensive. The SPDR S&P Homebuilders (NYSEMKT: XHB  ) ETF, which tracks the housing sector, is down almost 9% since May 22.

Don't Get Too Worked Up Over Kelly Services's Earnings

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

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

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

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

Over the past 12 months, Kelly Services generated $33.3 million cash while it booked net income of $53.4 million. That means it turned 0.6% of its revenue into FCF. That doesn't sound so great. FCF is less than net income. Ideally, we'd like to see the opposite.

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

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

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

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

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

With 28.4% of operating cash flow coming from questionable sources, Kelly Services investors should take a closer look at the underlying numbers. Within the questionable cash flow figure plotted in the TTM period above, other operating activities (which can include deferred income taxes, pension charges, and other one-off items) provided the biggest boost, at 11.6% of cash flow from operations. Overall, the biggest drag on FCF came from changes in accounts receivable.

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

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

Add Kelly Services to My Watchlist.

The Biggest Insider Trade in History

By now you've probably at least heard of SAC Capital, the massive hedge fund founded and run by the eponymous Steven A. Cohen. It was indicted on Thursday for a decade-long insider trading scandal that the Justice Department has described as "substantial, pervasive and on a scale without known precedent in the hedge fund industry."

The facts of the case -- alleged by the government in multiple court filings, guilty pleas, and indictments -- are breathtaking. In short, it's alleged that the fund intentionally hired analysts and portfolio managers with reputations for insider trading, incentivized them to further cultivate inside information for the benefit of their respective portfolios, and obliged them to share the information with Cohen, who then used it to trade in a separate portfolio that he alone controlled. By doing so, SAC Capital is thought to have earned "hundreds of millions of dollars" in illegal profits and avoided losses.

As investors, there's a lesson we can learn from this. And, no, the lesson isn't that insider trading is bad. I mean, it is, but hopefully most of us already know that. Instead, as I read through the court filings describing SAC's insider contacts and the quality of information its traders had access to ahead of earnings announcements and other material events, it made me realize just how asymmetric the knowledge in the market truly is. In other words, any individual investor who thinks he can beat the market by speculating on things like earnings surprises is living in la-la-land.

Of the dozens of trades alleged in the various documents, the one that best demonstrates this is SAC's bet on the pharmaceutical giant Elan (NYSE: ELN  ) in anticipation of the latter's Phase II trial results for a drug to treat Alzheimer's disease. I've mapped out the trade in the chart below.

During the first half of 2008, and based upon the advice of the doctor in charge of announcing the results, an SAC portfolio manager by the name of Matthew Martoma began constructing a massive stake in Elan, eventually topping out at 10.5 million shares. The move began to look particularly prescient when shares rose more than 10% following the June 17th release of the trial's top-line results.

By July, however, though unbeknownst to the rest of the market, it began to appear as if a more in-depth presentation on the results, scheduled for July 29, wouldn't be as well received. Consequently, following the receipt of the confidential test results as well as multiple conversations with the doctor responsible for making the presentation, Martoma decided to unload the position and instructed Cohen to follow suit. Over the span of five days between July 21-25, SAC sold its entire position for a gross take of more than $500 million and, not satisfied at that, proceeded to go short.

Suffice it to say, come July 29, well, the chart is pretty clear on the rest of the story.

My point here is simple. Many people who call themselves investors are of the opinion that they can outsmart the market by betting on short-term catalysts like earnings announcements or, in this case, the results of a pharmaceutical trial. The problem is that we can't, or at least, that we're at an extreme disadvantage in trying to do so. Unlike SAC, most investors don't have the means to compensate corporate insiders who are willing to share information ahead of time. And unlike SAC, many investors aren't willing to sacrifice their integrity, not to mention their freedom, to do so anyway.

Does this mean we don't have a competitive advantage -- an "edge," as the traders at SAC would term it? No. In fact, we have a powerful one. As my colleague Morgan Housel recently discussed, "I'm a long-term investor. ... The fact that you and I don't have to play these insane short-term games is the last remaining edge we have over Wall Street. And frankly, it's enormous."

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Will Shell Build Another Gas-to-Liquids Plant?

With the surge in natural gas production in the U.S. and other countries around the world, companies are constantly finding new ways to put the cleaner-burning fuel to work. Some U.S.-based firms, for instance, are looking to export gas in liquefied form, known as LNG, to countries that don't have a free trade agreement with the U.S.

Thus far, however, only two LNG export ventures have been approved by U.S. lawmakers: Cheniere Energy's (NYSEMKT: LNG  ) Sabine Pass terminal, which was given the green light in 2011, and the Freeport LNG project, an $11 billion facility in Texas whose general partner, Freeport LNG-GP, is 50% owned by ConocoPhillips (NYSE: COP  ) , which was approved earlier this year.

Meanwhile, a select few other companies are thinking about using natural gas in a very different way – by turning it into higher-value petroleum distillates, including diesel, naphtha, and lubricant base oils through a technology known as gas-to-liquids refining, or GTL. Royal Dutch Shell (NYSE: RDS-A  ) is one of the leaders in the use of this technology and is currently thinking about building another GTL plant on the U.S. Gulf Coast. Let's take a closer look.

Shell and GTL
Shell is well versed in the intricacies of the GTL process. The Hague-based company has spent nearly four decades researching GTL technology and has extensive experience in operating GTL facilities, including the world's first commercial GTL plant in Bintulu, Malaysia, and the Pearl GTL facility in Qatar, currently the world's largest.

Since Pearl came on stream in 2011, Shell has improved its proprietary GTL technology further still. If the company were to construct another GTL plant similar in size to Pearl, technological improvements and efficiency gains could deliver a 50% improvement in throughput volumes over Pearl, according to Shell's top GTL scientists.

Improvements in catalysts and synthesis reactors – the core process unit of a GTL plant – will also allow the company to use fewer reactors in future projects.
 In fact, Shell's head GTL process engineer, Arend Hoek, told Platts that it would be possible to achieve the same throughput levels as Pearl but with a third fewer reactors.

Matthias Bichsel, Shell's projects and technology director, reckons that cost savings from these and other process efficiencies and technological improvements should be "in the 15% range, perhaps a bit more".

Massive capex for Gulf Coast plant
However, these savings may not be enough to offset the daunting costs of building such a massive GTL export plant on the U.S. Gulf Coast, despite the ample supply of cheap natural gas feedstock the plant would be able to access. Shell reckons the plant, which would be similar in size to Pearl, would cost more than $10 billion. 

That's because Shell would likely have to build much of the plant overseas, due to higher wages and a shortage of skilled workers in the U.S. Gulf region. According to Bichsel, parts of the plant would likely be built in places such as South Korea and then shipped to the U.S. to be reassembled on the Gulf Coast site.

The company said that it is assessing various locations in Louisiana and Texas to be the potential site for such a facility, but added that it doesn't expect to reach a decision on the project's feasibility until around 2015. One additional motivation for building the plant might be that, like Pearl, prices for some of its products, such as diesel, would be linked to Brent oil prices and thereby provide a hedge against the company's exposure to natural gas.  

What's next for GTL?
Even if Shell were to build the plant this year, it would be among just a handful of GTL plants around the world that are operated commercially. Besides Pearl in Qatar, commercial GTL plants can only be found in South Africa and Malaysia and number in the single digits globally.  

However, interest in GTL continues to grow. In December, South African energy firm Sasol (NYSE: SSL  ) said that it would build the first commercial GTL facility in the U.S. The Johannesburg-based company has pinpointed Louisiana as the plant's chosen location due to that state's copious reserves of natural gas, and said it expects production from the facility to begin in 2018.

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If natural gas prices remain low and Shell and others continue to improve on the economics of GTL facilities, we may see some more of them in the future. But that's a pretty big if.

What does the future hold for the petroleum distillate niche as worldwide oil and gas production continues at a healthy clip?  With crude oil prices having avoided the broader sell-off in commodities, now might be a good time to pay attention to some high-quality, oil-levered stocks. If you're on the lookout for some currently intriguing plays, check out The Motley Fool's "3 Stocks for $100 Oil". For FREE access to this special report, simply click here now.

Google Kicks Off Tablet Upgrade Season

The season that immediately succeeds tablet discount season is none other than tablet upgrade season. A handful of tablet vendors have been dropping prices ahead of new models, and Google (NASDAQ: GOOG  ) was one standing pat. At the search giant's special event this morning, it was the first to kick off the upgrade season among the major players.

Say hello to the second-generation Nexus 7.

Source: Google.

Google has tapped ASUS again as the manufacturer for its flagship 7-inch tablet, with some notable improvements all around. All the rumors were true. Google has opted for a sharper 1,920 x 1,200 panel, which packed into a 7-inch display translates into 323 pixels per inch. The device is thinner and lighter than the first-generation model and Google has added a 5-megapixel rear-facing camera, which was absent altogether last time around.

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The tablet will come with the newest version of Android, 4.3 Jelly Bean, that was also announced today.

Under the hood, Qualcomm (NASDAQ: QCOM  ) has indeed displaced NVIDIA (NASDAQ: NVDA  ) as the processor vendor, with the second-generation Nexus 7 sporting a Snapdragon S4 Pro instead of a Tegra. While NVIDIA had delayed its Tegra 4 in order to focus on its Tegra 4i, the new Nexus 7's later-than-expected launch puts it within reach of NVIDIA's Tegra 4 schedule (ramping this quarter).

That points to another possible reason why Google and ASUS may have switched to Qualcomm. The new Nexus 7 packs in LTE connectivity, which is being offered on a single model that will run unlocked, yet be compatible with multiple domestic carriers. That's surprising given the intense LTE frequency fragmentation that currently plagues the industry.

The processor inside is Qualcomm's APQ8064, which does not have an integrated baseband. In February, Qualcomm did announce a new RF360 Front End Solution that addresses LTE frequency fragmentation. Products with these chips were expected in the second half of 2013, so the new Nexus 7 is quite likely the first major consumer product sporting Qualcomm's new offering.

Google is increasing the pricing up to $229 for an entry-level 16 GB model, which jumps to $269 for double the storage. Adding in LTE connectivity boosts that price tag up to $349.

With the announcement, the ball bounces back into Amazon.com's court in September, which will then be followed by Apple in October. There haven't been many rumors about when Microsoft will update Surface. Tablet upgrade season just began, but it will last at least a couple more months.

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Enerplus Keeps Monthly August Dividend Steady

Canadian oil and gas producer Enerplus (NYSE: ERF  ) announced today its August monthly dividend of $0.09 Canadian per share, which is equivalent to $0.09 U.S. per share at an exchange rate of 0.9674.

The board of directors said the dividend is payable on August 20 to holders of record at the close of business on August 2. The dividend is considered an "eligible dividend" for Canadian tax purposes, and a "qualified dividend" for U.S. tax purposes.

Enerplus' dividends are paid from the cash flow generated from the sale of its oil and natural gas production and paid to shareholders of record on the fifth day of the month. Dividends have been paid to Canadian shareholders since 1990 while they've been paid to U.S. shareholders since 2001.

The regular dividend payment equates to a $1.08-per-share annual dividend, yielding 6.5% based on the closing price today of Enerplus' stock.

ERF Dividend data by YCharts.

Losses Expand for Troubled LDK Solar

The solar industry is doing fairly well around the world this year. Recent data shows that U.S. installations were up 33% in the first quarter, Japan is growing rapidly, and China is investing billions to grow domestic demand. 

But all of these positives couldn't help LDK Solar (NYSE: LDK  ) post decent numbers, and the company continues to slip closer and closer to bankruptcy. First-quarter sales were just $104.3 million, which isn't even double the quarterly interest expense of $58 million, and net loss was $187.1 million. 

Management also announced that it is in talks with lenders to refinance $2.9 billion worth of debt after partially defaulting on a $24 million bond earlier this year. If this were the U.S., debtors would have pushed the company into bankruptcy by now, but Chinese state-run banks hold most of the debt, so a solution is very difficult for investors to predict. 

What is known is that LDK Solar is nowhere near profitability and won't be for a long time. Debt has a stranglehold on the company, and without a bailout from China, there's no way the company survives. That means this stock is hands off to investors. 

Stick with quality
LDK Solar and Suntech Power (NYSE: STP  ) have already defaulted on debt, and the most leveraged Chinese manufacturers may follow others into full on bankruptcy (Suntech's subsidiary is already bankrupt, but the parent company isn't). Betting on leverage and hope for a recovery in China is a dangerous game, and investors should stick with high-quality manufacturers.

In China, Canadian Solar (NASDAQ: CSIQ  ) is doing a better job transitioning to Japan and project development than most, and it would be a much better pick than most. But still, there are risks, and this Fool's choice is to stick with high-quality U.S. companies for which you don't have to depend on government banks for survival. 

My top pick is still SunPower (NASDAQ: SPWR  ) , and another great company is SolarCity (NASDAQ: SCTY  ) . Residential solar grew 53% in the first quarter, and both companies have a major share of this growing market. Unlike utility-scale solar, the residential space is far more consistent, and we can expect more growth in the future. Both SunPower and SolarCity sign customers up to 20-year leases, ensuring revenue long-term. 

Another company with a solid balance sheet is First Solar, once the largest solar company in the world. The company has a great balance sheet and captive demand with massive solar projects. I don't like this market as much as solar leasing, but the company's project-development expertise can't be matched. 

I recently took a deep dive into First Solar's strengths and weaknesses in our premium report, found here. It comes free with updates when news breaks and will keep you on top of the solar market. 

Foolish bottom line
LDK Solar is on its last leg, and after China let Suntech's subsidiary go into bankruptcy, I don't see why it wouldn't do the same with LDK Solar. This is a stock I would stay far, far away from. 

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More Expert Advice from The Motley Fool

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Halliburton Raises Buyback Program to $5 Billion

Having repurchased 23 million shares, or $1 billion worth of company stock, in the second quarter, oil services giant Halliburton (NYSE: HAL  ) announced today it had approved an increase to $5 billion in its buyback program.

The board of directors said that with just $0.7 billion of repurchasing capacity remaining on the existing authorization that was initiated in 2006, it would increase by another $4.3 billion its ability to buy back shares. It also declared its third-quarter dividend of $0.125 per share, the same rate it's paid for the last two quarters after having increased the payout 39% from $0.09 per share.

Noting the first-quarter dividend hike reflected management's increased confidence in the strength of the company's outlook, Halliburton Chairman, President, and CEO Dave Lesar said, "We believe that our relentless focus on generating best-in-class returns and our commitment to shareholder distributions will deliver increased value to our shareholders going forward."

The regular dividend payment equates to a $0.50-per-share annual dividend, yielding 1.1% based on the closing price of Halliburton's stock on July 19.

HAL Dividend data by YCharts.

linkHalliburton also reported second-quarter numbers today. For the quarter ended June 30, Halliburton's net income totaled $679 million, or $0.73 per share. Analysts expected $0.72 per share, according to FactSet. A year ago, earnings were $737 million, or $0.79 per share.

Overall revenue edged up 1% percent to $7.32 billion from $7.23 billion a year ago, also topping expectations despite an 8% revenue slide in North America. Total revenue, even with the decline in North America, was an all-time best for the second quarter, helped by international growth, especially in Asia.

-- Material from The Associated Press was used in this report.

link

Hot Cheap Companies To Own For 2014

Apple� (NASDAQ: AAPL  ) is cash rich. In fact, cash accounts for 40% of the company's�share price. Though Microsoft (NASDAQ: MSFT  ) comes close, with cash accounting for about 30% of its share price, Apple looks dirt cheap compared to Intel (NASDAQ: INTC  ) , Google (NASDAQ: GOOG  ) , and Amazon (NASDAQ: AMZN  ) when measured by cash per share.

Apple attempted to solve this problem with a boost to its dividend and share repurchase program. But is the world's largest share repurchase program large enough for Apple? If Apple continues to generate cash at today's levels, after its $100 billion program to return cash to shareholders through dividends and repurchases expires, the company could still have the same $144.7 billion it has today. Does this mean Apple should pay out even more cash? In the video below, Fool contributor Daniel Sparks shares his take on the matter.

Hot Cheap Companies To Own For 2014: Miyoshi Precision Limited (M03.SI)

Miyoshi Precision Limited, together with its subsidiaries, engages in designing and manufacturing mould and precision pressed parts; and trading in related products. It is also involved in trading of machines; metal stamping, and fabrication of parts and components of machine tools; plastic injection moulding; and assembly of electronic components. In addition, it provides system integration services, application and development solutions, and e-commerce Web development services. Further, the company engages in the fabrication of parts and components of industrial equipment and machine tools; manufacture of parts and assembly of mechanisms for electronic products; manufacture and sale of microshafts and other precision parts; and manufacture of precision parts used in computers and a range of electronic products. The company serves data storage, consumer electronics, medical, and automotive industries. It operates primarily in Singapore, Thailand, Malaysia, China, the Phil ippines, Indonesia, Japan, and Germany. Miyoshi Precision Limited was founded in 1987 and is headquartered in Singapore.

Hot Cheap Companies To Own For 2014: Fire River Gold Corp. (FAU.V)

Fire River Gold Corp., an exploration stage company, engages in the acquisition, exploration, and development of mineral properties, primarily gold, silver, and base metal properties in Canada and the United States. It principally owns a 100% interest in the Nixon Fork gold mine that covers an area of 11,000 acres located to the northeast of McGrath, Alaska. The company was incorporated in 1997 and is based in Vancouver, Canada.

Best Stocks To Watch For 2014: Dhx Media Ltd (DHX.TO)

DHX Media Ltd. produces, distributes, and exploits the rights for television and film programming in Canada and internationally. It focuses primarily on children, family, and youth productions. The company produces family and children�s programs, prime time comedy, and feature films; supplies television programming for children and youth; develops and builds licensing and merchandizing programs; and produces animation, as well as develops television, motion pictures, short-form programming, commercial content, and consumer products; It is also involved in the development, production, and distribution of interactive content in various digital platforms, including Websites, online video interfaces, online games, and other interactive applications. The company has approximately 15 children�s series comprising Yo Gabba Gabba!, Waybulloo, Super Why!, The Mighty Jungle, Bo on the Go!, Franny�s Feet, dirtgirlworld, How to be Indie, Animal Mechanicals, Kid vs Kat, Monster Math Squad, and Martha Speaks. It also maintains a content library of approximately 2,550 half-hours of programming and approximately 60 individual titles. DHX Media Ltd. primarily serves conventional and specialty terrestrial, and cable/satellite television broadcasters. The company was formerly known as The Halifax Film Company Limited and changed its name to DHX Media Ltd. in March 2006. DHX Media Ltd. was incorporated in 2004 and is based in Halifax, Canada.

Take Advantage of eBay's Earnings Dip

Despite eBay's (NASDAQ: EBAY  ) earnings results leaving investors wanting more in the form of guidance, the long-term story remains intact. As a result, this temporary setback has created a buying opportunity for those who are committed to long-term growth investing.

Breaking it down
For the second quarter, the e-commerce giant reported revenues of $3.9 billion, a 14% year-over-year increase, which translated to non-GAAP net income growth of 13%, to $822 million. Combined, the company enabled over $51 billion of commerce, representing an increase of 21% year over year. During the quarter, eBay's mobile engagement enjoyed 90% year-over-year growth by attracting 3 million new customers across its platforms, reinforcing the belief that the company is well positioned for the age of mobile computing and multiple screens.

During the quarter, eBay's core marketplaces business remained strong. It experienced revenue growth of 10% year over year, 3.5 million new accounts, and a gross merchandise volume increase of 13%, to $18 billion. PayPal was also no slouch, with its 20% year-over-year revenue growth, and 4.7 million new accounts added during the quarter, bringing the grand total to 132 million active PayPal accounts.

Where eBay went wrong was with its guidance. The Street was expecting eBay to earn $0.65 a share on revenue of $3.97 billion in the third quarter, slightly above eBay's forecast of earning $0.61 to $0.63 a share with sales of $3.85 billion to $3.95 billion. Because it's totally unacceptable for a company to miss on guidance, shares pulled back over 6% on the news.

Two 800-pound gorillas
Currently, there are about 2 billion Internet users in the world, a number that's expected to double in the next three to five years. With the majority of these users expected to experience the Internet for the first time on a mobile device, eBay has placed an emphasis on developing localized mobile e-commerce solutions as a way to reduce cultural friction. But what really sets eBay apart from the competition in mobile is the fact that its revenue is exactly the same regardless of medium. As a comparison, companies like Google and Facebook have faced revenue headwinds as they try to capitalize on mobile.

Now, just because eBay is a leader in facilitating worldwide online commerce doesn't mean that the company wouldn't mind becoming a powerful force in the offline world. To that end, the company has partnered with Discover Financial, allowing PayPal to be accepted at over 2 million U.S. brick-and-mortar locations by the year's end. The great part about this opportunity is that PayPal only needs to capture 1% of the offline point-of-sale market for PayPal's entire business to double. Granted, this may sound relatively easy to accomplish, but the competition is fierce, and the threat of Apple entering the mobile payments space may disrupt PayPal's plan. 

Don't miss out!
Long-term investors love short-term setbacks because it allows them to invest in an excellent business for an even better price. In the case of eBay, investors were hoping its short-term earnings guidance was more in-line with their seemingly lofty expectations, which has little to do with the long-term growth story. With the buying opportunity presenting itself, and the evidence backing the idea that eBay's core businesses remain strong, what else are you waiting for?

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

Hot Undervalued Stocks For 2014

When it comes to investing, it's all about valuation and timing. If you can find undervalued assets at the right time, you can make an absolute fortune.

Some assets are priceless because they are not easily replaced and offer few viable alternatives. Think about fine art, rare diamonds or vintage gold coins.

Now think about the irreplaceable roads, airports and railroads we use every day. How valuable are those assets?

One of the concerns the United States is currently facing is the growing need for improved infrastructure. It is a $2 trillion crisis no one is talking about. So when I think about long-term investments, infrastructure seems to be a safe bet.

 

Infrastructure businesses often generate consistent, growing long-term cash flows. This is because the demand for the everyday services they provide exists in virtually every economic cycle. Also, those companies are often in sectors where there are high barriers to entry. They often own high-value physical assets that are difficult to replicate.

Hot Undervalued Stocks For 2014: Tupperware Corporation(TUP)

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

Advisors' Opinion:

• [By Sam Collins]

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

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

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

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

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

Advisors' Opinion:

• [By Sam Collins]

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

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

5 Best Stocks To Invest In 2014: Schlumberger N.V.(SLB)

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

Advisors' Opinion:

• [By Michael]

  Schlumberger Limited (NYSE: SLB): Cramer also had more than $100,000 invested in SLB. As of Feb. 15, his charitable trust owns 1,300 shares for a total of about $100,724. SLB is also quite popular among hedge funds. At the end of last September, there were 42 hedge funds with SLB positions in their 13F portfolios. Ken Fisher was the most bullish hedge fund manager about SLB -- Fisher Asset Management had nearly $500 million invested in SLB at the end of the third quarter. Jim Simons’ Renaissance Technologies also invested nearly $200 million in this stock.

  Schlumberger has reasonable debt levels, growing net income and revenue, and healthy cash flow from operations. It is relatively expensive compared with its competitors though. SLB has a forward P/E ratio of 13.6. Its expected annual EPS growth rate is 21.82% on the average for the next five years, which means that its P/E ratio for 2014 will be around 9.2. This is quite low compared with the market, but not so versus its peers.

Hot Undervalued Stocks For 2014: Caterpillar Inc.(CAT)

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

Advisors' Opinion:

• [By Jim Cramer,TheStreet]

  Caterpillar (CAT) could be a monster in 2011, especially with the integration of Bucyrus International (BUCY), which I think will turn out to be a fantastic acquisition.

  Current earnings-per-share estimates of about $6 are, I think, way too low. I see this stock going to $120 in the next year. Too gutsy? Ask yourself what happens if the United States comes back as a growth nation? Right now almost all of the growth is overseas.

  Still a fantastic mineral play and a terrific call on world growth.

• [By Roberto Pedone]

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

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

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

Verizon Edges in on AT&T and T-Mobile

Better late than never. Following a leaked internal document earlier this week, Verizon (NYSE: VZ  ) Wireless has made its new Edge program official. Edge is Big Red's new early upgrade program that hopes to compete with T-Mobile (NYSE: TMUS  ) Jump and AT&T (NYSE: T  ) Next.

Verizon Edge is fairly straightforward. There are no contracts or fees, and Verizon is offering a payment plan to finance the device. Customers can upgrade after six months so long as they've paid for 50% of the retail price. There is no subsidy to speak of, and Edge is geared toward customers who shun service contracts. The new plans launch at the end of August.

Verizon doesn't explicitly mention trading in the used device, but this is a given. If you've only paid for half of the device, you can bet Verizon wants it back so it can resell it. Verizon's plan is more similar to AT&T's in that there's no monthly fee just to participate, and that the only requirement to upgrade is that you've paid a sizable portion of the device cost.

AT&T spreads out the device's price over 20 months, while Verizon splits it into 24 monthly payments. Neither program requires a down payment, undercutting T-Mobile in upfront costs. AT&T effectively requires customers to pay for 60% of the cost (12 months out of 20), while Verizon will accept 50%.

Verizon says you can upgrade after six months, but if you do so, you'll find yourself on the hook to pay the difference. After six months, you've only paid 25% of the price, so you'll need to pay the difference out of pocket if you want to upgrade. On a $600 smartphone, that'll cost you $150 if you want to upgrade immediately after six months.

The real kicker is the service plan. T-Mobile now unbundles the service cost from the device cost. AT&T and Verizon are hoping that customers stay on the pricier service tiers, which are priced to include a subsidy recovery. If customers choose the pricier plans, even on a month-to-month basis, AT&T and Verizon effectively get to charge higher prices without shelling out a subsidy.

On the prepaid front, excluding device costs, it's a little more even. Verizon and AT&T both offer unlimited talk and text plans with 2 GB of data for prepaid customers for $60 per month. T-Mobile's comparable $60 plan includes 2.5 GB of high-speed data, although it allows unlimited data beyond that at slower speeds.

Big Red's move signals the third carrier to adopt a new early upgrade program, and now Sprint is the only national carrier left to unveil a similar offering. With all other three rivals launching upgrade programs, Sprint will inevitably follow suit.

If you're an investor who prefers returns to rhetoric, you'll want to read The Motley Fool's new free report, "5 Dividend Myths... Busted!" In it, you'll learn which stocks provide premium growth, and whether bigger dividends are better. Click here to keep reading.

 

Top 10 Biotech Companies To Watch In Right Now

Arena Pharmaceuticals had a rough quarter, but the results don't really matter. The company is waiting on DEA scheduling before it can start selling its obesity drug, Belviq. However, there's one place Belviq isn't going on sale anytime soon: Europe. Arena is voluntarily pulling Belviq from the approval process, with no set timetable for resubmission.

VIVUS, meanwhile, has seen Qsymia get rejected in Europe, and in the following video, health-care analyst David Williamson looks at whether any of the new obesity drugs have an EU approval in their future. Watch and find out what it all means for investors.

Who will win the obesity drug market?
Can VIVUS pick up its lagging sales and fend off the competition, or will Arena Pharmaceuticals reign supreme in the obesity space? If you're in the dark, grab copies of The Motley Fool's premium research reports on VIVUS and Arena Pharmaceuticals to stay up to date. Senior biotech analyst Brian Orelli gives investors the must-know information, including an in-depth look at the obesity market and reasons to buy and sell both stocks. Click now for an exclusive look at�Arena�and�VIVUS -- complete with a full year of free updates -- today.

Top 10 Biotech Companies To Watch In Right Now: Galena Biopharma Inc (GALE.PH)

Galena Biopharma, Inc. (Galena), formerly RXi Pharmaceuticals Corporation, incorporated on April 3, 2006, is a biotechnology company focused on discovering, developing and commercializing therapies addressing unmet medical needs using targeted biotherapeutics. The Company is pursuing the development of cancer therapeutics using peptide-based immunotherapy products, including its main product candidate, NeuVaxTM (E75), for the treatment of breast cancer and other tumors. NeuVax is a peptide-based immunotherapy intended to reduce the recurrence of breast cancer in low-to-intermediate HER2-positive breast cancer patients not eligible for trastuzumab (Herceptin; Genentech/Roche). On January 19, 2012, the Company initiated enrollment in its Phase 3 PRESENT clinical trial for NeuVax (E75 peptide plus GM-CSF) vaccine in low-to-intermediate HER2 1+ and 2+ breast cancer patients in the adjuvant setting to prevent recurrence (Clinicaltrials.gov identifier NCT01479244). The Preven tion of Recurrence in Early-Stage, Node-Positive Breast Cancer with Low to Intermediate HER2 Expression with NeuVax Treatment study is a randomized, multicenter, multinational clinical trial that will enroll approximately 700 breast cancer patients. The Company�� Phase 2 trial of NeuVax achieved its primary endpoint of disease-free survival (DFS). On April 13, 2011, the Company completed its acquisition of Apthera, Inc.,(Apthera).

The Company focuses to start a Phase 2 trial comparing NeuVax in combination with trastuzumab (Herceptin) versus trastuzumab, alone, in a 300-patient, randomized study in the adjuvant breast cancer setting. The Company's second product candidate, Folate Binding Protein-E39 (FBP), is a vaccine, consisting of the peptides E39 and J65, aimed at preventing the recurrence of ovarian, endometrial, and breast cancers. On February 14, 2012, the Company announced the initiation of a Phase 1/2 clinical trial in two gynecological cancers: ovari an and endometrial adenocarcinomas. Folate binding protein! h! as very limited tissue distribution and expression in non-malignant tissue and is over-expressed in more than 90% of ovarian and endometrial cancers, as well as in 20% to 50% of breast, lung, colorectal and renal cell carcinomas.

In April 2011, the Company acquired Apthera Inc and its NeuVax product candidate. The Company focuses on developing a pipeline of immunotherapy product candidates for the treatment of various cancers based on the E75 peptide, the advanced of which is NeuVax, which is targeted at preventing the recurrence of breast cancer. NeuVax has had positive Phase 1/2 clinical trial results for the prevention of breast cancer recurrence in patients who have had breast cancer and received the standard of care treatment (surgery, chemotherapy, radiotherapy and hormonal therapy as indicated). The Company had also initiated its Phase 3 PRESENT clinical trial of NeuVax for the prevention of breast cancer recurrence in early-stage low-to-intermediate HER2 breast cancer patients. NeuVax directs killer T-cells to target and destroy cancer cells that express HER2/neu, a protein associated with epithelial tumors in breast, ovarian, pancreatic, colon, bladder and prostate cancers. NeuVax is comprised of a HER2/neu-derived peptide called E75. E75 is a nine-amino acid sequence that is immunogenic (produces an immune response) and GM-CSF is a commercially available protein that acts to stimulate and activate components of the immune system such as macrophages and dendritic cells.

The Company also develops novel applications for NeuVax based on preclinical studies and phases 2 clinical trials which suggest that combining NeuVax and trastuzumab (Herceptin; Genentech/Roche) can increase antigen presentation by tumor cells by promoting receptor internalization and subsequent proteosomal degradation of the HER2 protein. The Company also is pursuing additional therapeutic indications for NeuVax that are in Phase 1/2 clinical trials. RXI-109, is a dermal anti-scarring therapy that ! targ! ets! conne! ctive tissue growth factor (CTGF) and that may inhibit connective tissue formation in human fibrotic disease.

The Company competes with Roche Laboratories, Inc., Pfizer Inc., Bayer HealthCare AG, Sanofi-Aventis, US, LLC, Amgen, Inc., GlaxoSmithKline plc, Renovo Group plc, CoDa Therapeutics, Inc., Sirnaomics, Inc., FirstString Research, Inc., Merz Pharmaceuticals, LLC, Capstone Therapeutics, Halscion, Inc., Garnet Bio Therapeutics, Inc., AkPharma Inc., Promedior, Inc., Kissei Pharmaceutical Co., Ltd., Eyegene, Derma Sciences, Inc., Healthpoint Biotherapeutics, Pharmaxon, Excaliard Pharmaceuticals, Inc., Alnylam Pharmaceuticals, Inc., Marina Biotech, Inc., Tacere Therapeutics, Inc., Benitec Limited, OPKO Health, Inc., Silence Therapeutics plc, Quark Pharmaceuticals, Inc., Rosetta Genomics Ltd., Lorus Therapeutics, Inc., Tekmira Pharmaceuticals Corporation, Arrowhead Research Corporation, Regulus Therapeutics Inc. and Santaris.

Top 10 Biotech Companies To Watch In Right Now: Telik Inc (TELK)

Telik, Inc. (Telik), incorporated in 1988, is a clinical-stage drug development company focused on discovering and developing small molecule drugs to treat cancer. The Company discovers its product candidates using the Company�� drug discovery technology, Target-Related Affinity Profiling (TRAP). TELINTRA, its principal drug product candidate in clinical development, is a small molecule glutathione analog inhibitor of the enzyme glutathione S-transferase P1-1 (GST P1-1). TELCYTA, its other product candidate, is a small molecule cancer drug product candidate designed to be activated in cancer cells.

Clinical Product Development

TELINTRA is the Company�� lead small molecule product candidate in clinical development for the treatment of blood disorders, including cancer. It has a mechanism of action and acts by inhibiting GST P1-1, an enzyme that is involved in the control of cellular growth and differentiation. Inhibition of GST P1-1 results in the activation of the signaling molecule Jun kinase, a regulator of the function of blood precursor cells. Preclinical tests show that TELINTRA is capable of causing the death or apoptosis of leukemic or malignant blood cells, while stimulating the growth and development of normal blood precursor cells. TELINTRA has been studied in Myelodysplastic Syndrome (MDS) using two formulations. A liposomal formulation was developed for intravenous administration of TELINTRA and was used in Phase I and Phase II studies in MDS patients. The results from the Phase II intravenous liposomal TELINTRA clinical trials demonstrated that TELINTRA treatment was associated with improvement in all three types of blood cell levels in patients with all types of MDS, including those in intermediate and high-risk groups. An oral dosage formulation (tablet) was subsequently developed and results from a Phase I study with TELINTRA tablets showed clinical activity and the formulation to be well tolerated. In June 2011, the Company initiated a Phase II clinical ! trial to evaluate TELINTRA tablets. In October 2011, the Company initiated an additional Phase IIb clinical trial to evaluate TELINTRA tablets. '

The activity and safety profile of tablet formulation allowed the Company to complete a Phase II trial of TELINTRA tablets in MDS. The primary objective of the Phase II TELINTRA tablet study was to determine the efficacy of TELINTRA. A multivariate logistic regression analysis was conducted to identify MDS disease prognostic factors associated with erythroid improvement response rates, including prior MDS treatment, age, gender, the international prognostic scoring system (IPSS), risk, Eastern Cooperative Group performance status, years from MDS diagnosis, MDS World Health Organization subtypes, anemia only versus anemia plus other cytopenias, dose schedule and starting dose. Results from this study show that TELINTRA is the first GSTP1-1 enzyme inhibitor shown to cause clinically reductions in red blood cell transfusions, including transfusion independence in low to intermediate-1 risk MDS patients, as well as improvement in platelet count and white blood cell levels in certain patients. TELINTRA, administered orally twice daily, appeared to be convenient and flexible for chronic treatment administration.

TELCYTA is a small molecule drug product candidate that the Company is developed for the treatment of cancer. TELCYTA binds to GST. TELCYTA has been evaluated in multiple Phase II and Phase III clinical trials, including trials using TELCYTA as monotherapy and in combination regimens in ovarian, non-small cell lung, breast and colorectal cancer. Results from these clinical trials indicate that TELCYTA monotherapy was generally well-tolerated, with mostly mild to moderate side effects, particularly when compared to the side effects and toxicities of standard chemotherapeutic drugs. When TELCYTA was evaluated in combination with standard chemotherapeutic drugs, the tolerability of the combinations was similar to that expected of each! drug alo! ne.

Clinical activity including objective tumor responses and/or disease stabilization was reported in the TELCYTA Phase II trials; however, TELCYTA did not meet its primary endpoints in the Phase III studies. Positive results from a Phase I-IIa multicenter, dose-ranging study of TELCYTA in combination with carboplatin and paclitaxel as first-line therapy for patients with non-small cell lung cancer, or NSCLC, were published in a peer reviewed publication. Clinical data demonstrated positive results of TELCYTA in combination with carboplatin and paclitaxel in the treatment of first-line lung cancer followed by TELCYTA maintenance therapy. As of December 31, 2011, the Company had an on-going investigator-led study at a single site of TELCYTA in patients with refractory or relapsed mantle cell lymphoma, diffuse B cell lymphoma, and multiple myeloma.

Preclinical Drug Product Development

The Company has a small molecule compound, TLK60404, in preclinical development that inhibits both Aurora kinase and VEGFR kinase. Aurora kinase is a signaling enzyme whose function is required for cancer cell division, while VEGF plays a key role in tumor blood vessel formation, ensuring an adequate supply of nutrients to support tumor growth. These lead compounds prevented tumor growth in preclinical models of human colon cancer and human leukemia by inhibiting both Aurora kinase and VEGFR kinase. A development drug product candidate, TLK60404, has been selected.

The Company, using its TRAP technology has discovered TLK60357, a novel, potent small molecule inhibitor of cell division. TLK60357 inhibits the formation of microtubules that are necessary for cancer cell growth leading to persistent G2/M cancer cell cycle block and subsequent cell death. This compound demonstrates potent broad-spectrum anticancer activity against a number of human cancer cells. This compound also displays oral efficacy in multiple, standard preclinical models of cancer. TLK60596, a potent VG! FR kinase! inhibitor, blocks the formation of new blood vessels in tumors. Oral administration of TLK60596 to animal models of human colon cancer reduced tumor growth.

Best Stocks For 2014: Fuse Science Inc (DROP)

Fuse Science, Inc. ( Fuse Science), incorporated on September 21, 1988, is a consumer products holding company. The Company maintains the rights to sublingual and transdermal delivery systems for bioactive agents that can effectively encapsulate and charge many varying molecules in order to produce complete product formulations which can be consumed orally, applied topically or delivered otherwise sublingually or transdermally, thereby bypassing the gastrointestinal tract and entering the blood stream directly. The Fuse Science technology is designed to accelerate conveyance of medicines or nutrients relative to traditional pills and liquids and can enhance how consumers receive these products. In December 2012, the Company launched its initial DROP products, PowerFuse, an energy formulation in a concentrated drop and ElectroFuse, an electrolyte formula in a concentrated drop, online, with the expansion into targeted retail distribution channels.

The Company is developing formulations and devices, which are compatible with alternative delivery systems for energy, medicines, vitamins and minerals, among other bioactives. These alternative systems include, but are not limited to, sublingual, transdermal and buccal drug delivery methods. use Science has developed and continues to advance, in conjunction with its scientific team, sublingual and transdermal delivery systems for bioactives that can effectively encapsulate and charge varying molecules in order to produce product formulations which can be consumed orally, applied topically or otherwise delivered sublingually or transdermally, thereby bypassing the gastrointestinal tract and entering the blood stream directly. The delivery technology is consists of encapsulation vesicles and ion exchange permeation enhancers. This technology utilizes a gradient across the mucosa membrane to help deliver the bioactive more efficiently through the mucosa.

The Company�� products consist of EnerJel, PowerFuse and ElectroFuse. Ene! rJel is a topical product leveraging some of its technology, which is designed to address muscle fatigue and soreness, before, during and after physical activity. The product contains a natural anti-inflammatory and energy source which is directly applied to the problem area. PowerFuse contains natural ingredients, causes no sugar crash with zero calories and less than half the caffeine of an eight ounce cup of premium coffee. It is available in a great tasting Berry Blast Flavor. ElectroFuse contains natural ingredients, causes no sugar crash with zero calories, is easily portable and is available in a great tasting Salty-Sweet flavor.

Top 10 Biotech Companies To Watch In Right Now: Johnson & Johnson(JNJ)

Johnson & Johnson engages in the research and development, manufacture, and sale of various products in the health care field worldwide. The company operates in three segments: Consumer, Pharmaceutical, and Medical Devices and Diagnostics. The Consumer segment provides products used in baby care, skin care, oral care, wound care, and women?s health care fields, as well as nutritional, over-the-counter pharmaceutical products, and wellness and prevention platforms under the brands of JOHNSON?S, AVEENO, CLEAN & CLEAR, JOHNSON?S Adult, NEUTROGENA, RoC, LUBRIDERM, DABAO, LISTERINE, REACH, BAND-AID, CAREFREE, STAYFREE, SPLENDA, TYLENOL, SUDAFED, ZYRTEC, MOTRIN IB, and PEPCID AC. The Pharmaceutical segment offers products in various therapeutic areas, such as anti-infective, antipsychotic, contraceptive, dermatology, gastrointestinal, hematology, immunology, neurology, oncology, pain management, and virology. Its principal products include REMICADE for the treatment of immune me diated inflammatory diseases; STELARA for the treatment of moderate to severe plaque psoriasis; SIMPONI, a treatment for adults with moderate to severe rheumatoid arthritis, psoriatic arthritis, and ankylosing spondylitis; VELCADE for the treatment of multiple myeloma; PREZISTA and INTELENCE for treating HIV/AIDS patients; NUCYNTA for moderate to severe acute pain; INVEGA SUSTENNAtm for the acute and maintenance treatment of schizophrenia in adults; RISPERDAL CONSTA for the management of bipolar I disorder and schizophrenia; and PROCRIT to stimulate red blood cell production. The Medical Devices and Diagnostics segment primarily offers circulatory disease management products; orthopaedic joint reconstruction, spinal care, and sports medicine products; surgical care, aesthetics, and women?s health products; blood glucose monitoring and insulin delivery products; professional diagnostic products; and disposable contact lenses. The company was founded in 1886 and is based in Ne w Brunswick, New Jersey.

Advisors' Opinion:

• [By Michael Brush]

  Johnson & Johnson has a dividend yield of 3.4%.

  The world's largest health care company provides investors with exposure (similar to that of a mutual fund) to the health care sector. The company has three main divisions: pharmaceuticals, medical devices and consumer products.

  Johnson & Johnson has had its share of quality control issues, but that's no reason to avoid this stock. The company's strong research pipeline, broad product lines and abundant cash flow mean it will continue to grow -- and keep increasing dividends.

Top 10 Biotech Companies To Watch In Right Now: CEL-SCI Corp (CVM)

CEL-SCI Corporation (CEL-SCI), incorporated on March 22, 1983, is engaged in the business of Multikine cancer therapy; New cold fill manufacturing service to the pharmaceutical industry, and ligand epitope antigen presentation System (LEAPS) technology, with two products, hemagglutinin type 1 and neuraminidase type 1 (H1N1) swine flu treatment for H1N1 hospitalized patients and CEL-2000, a rheumatoid arthritis treatment vaccine.

Multikine

CEL-SCI's Multikine, is being developed for the treatment of cancer. It is a cancer immunotherapy drugs called Combination Immunotherapy because it combines active and passive immunity in one product. It is the only cancer immunotherapy that both kills cancer cells and activates the general immune system to destroy the cancer. Multikine target the tumor micro-metastases for treatment failure. Multikine is also applicable in many other solid tumors.

New Manufacturing Facility

CEL-SCI's facility manufactures Multikine for CEL-SCI's Phase III clinical trial. CEL-SCI offers the use of the facility as a service to pharmaceutical companies and others, particularly those that need to fill and finish their drugs in a cold environment. Fill and finish is the process of filling injectable drugs in a sterile manner.

LEAPS

CEL-SCI's patented T-cell Modulation Process uses heteroconjugates to direct the body to choose a specific immune response. The heteroconjugate technology, referred to as LEAPS, is intended to stimulate the human immune system to fight bacterial, viral and parasitic infections, as well as autoimmune, allergies, transplantation rejection and cancer. Administered like vaccines, LEAPS combines T-cell binding ligands with small, disease associated and peptide antigens.

Using the LEAPS technology, CEL-SCI has created a peptide treatment for H1N1 (swine flu) hospitalized patients. This LEAPS flu treatment is designed to focus on the conserved, non-changing epitopes of the di! fferent strains of Type A Influenza viruses, including swine, avian or bird, and Spanish Influenza. CEL-SCI's LEAPS flu treatment contains epitopes.

Top 10 Biotech Companies To Watch In Right Now: Vertex Pharmaceuticals Incorporated(VRTX)

Vertex Pharmaceuticals Incorporated engages in discovering, developing, manufacturing, and commercializing small molecule drugs for the treatment of serious diseases worldwide. Its products include telaprevir, a prescription medicine used for the treatment of patients with genotype 1 hepatitis C virus (HCV) infection; and Ivacaftor, a prescription medicine used for the treatment of cystic fibrosis. The company markets its products under the INCIVEK brand name in the United States and Canada; INCIVO brand in the United Kingdom, Germany, France, Sweden, Austria, Finland, Denmark, Switzerland, and Norway; KALYDECO brand in the United States; and TELAVIC brand in Japan. Its drug candidates comprise VX-222, a Phase II clinical trial drug candidate, and ALS-2200 and ALS-2158, a Phase I clinical trial drug candidates that are designed to inhibit the replication of HCV; VX-809 and VX-661, a Phase II clinical trial drug candidates that improve the function of defective cystic fibro sis; VX-509, a Phase II clinical trial drug candidate for the treatment of patients with rheumatoid arthritis and other immune-mediated inflammatory diseases; VX-765, a Phase II clinical trial drug for the treatment of epilepsy; and VX-787, an investigational drug candidate for the treatment of influenza A. The company was founded in 1989 and is headquartered in Cambridge, Massachusetts.

Advisors' Opinion:

• [By Melly Alazraki]

  Vertex Pharmaceuticals (VRTX)topped the list with a 38.4% return as of Wednesday's close of $48.48. This $9.8 billion market capnon-profitablecompany is all promise. It is itspipelinethat's drawing investors, especially thehepatitis C treatment telaprevirandpotential cystic fibrosis drug VX-770.
  
  Both diseases present large market opportunities: Liver disease caused by the hepatitis C virusaffects 3.2 million individualsin the U.S. and as many as 100 million people worldwide. Cystic fibrosis is an inherited genetic disease that affects about 30,000 people in the U.S. and has few treatment options.
  
  Analysts ! have favored the stock, with aconsensus buy recommendation. However, just on Thursday, Vertex announcedtwomore telaprevir studyresultsthat did not impress investors and the stock declined 2% to $47.50. Also, Vertex is not without competitors and is in a race with Merck (MRK) and its experime ntal Hep C drug boceprevir to be the first to reach the market.
  
  The stock's 52-week high of $52.13 was set on March 7, up from a low of $31.25 set on July 1, 2011.

Top 10 Biotech Companies To Watch In Right Now: Galena Biopharma Inc (GALE)

Galena Biopharma, Inc. (Galena), formerly RXi Pharmaceuticals Corporation, incorporated on April 3, 2006, is a biotechnology company focused on discovering, developing and commercializing therapies addressing unmet medical needs using targeted biotherapeutics. The Company is pursuing the development of cancer therapeutics using peptide-based immunotherapy products, including its main product candidate, NeuVaxTM (E75), for the treatment of breast cancer and other tumors. NeuVax is a peptide-based immunotherapy intended to reduce the recurrence of breast cancer in low-to-intermediate HER2-positive breast cancer patients not eligible for trastuzumab (Herceptin; Genentech/Roche). On January 19, 2012, the Company initiated enrollment in its Phase 3 PRESENT clinical trial for NeuVax (E75 peptide plus GM-CSF) vaccine in low-to-intermediate HER2 1+ and 2+ breast cancer patients in the adjuvant setting to prevent recurrence (Clinicaltrials.gov identifier NCT01479244). The Prevention of Recurrence in Early-Stage, Node-Positive Breast Cancer with Low to Intermediate HER2 Expression with NeuVax Treatment study is a randomized, multicenter, multinational clinical trial that will enroll approximately 700 breast cancer patients. The Company�� Phase 2 trial of NeuVax achieved its primary endpoint of disease-free survival (DFS). On April 13, 2011, the Company completed its acquisition of Apthera, Inc.,(Apthera).

The Company focuses to start a Phase 2 trial comparing NeuVax in combination with trastuzumab (Herceptin) versus trastuzumab, alone, in a 300-patient, randomized study in the adjuvant breast cancer setting. The Company's second product candidate, Folate Binding Protein-E39 (FBP), is a vaccine, consisting of the peptides E39 and J65, aimed at preventing the recurrence of ovarian, endometrial, and breast cancers. On February 14, 2012, the Company announced the initiation of a Phase 1/2 clinical trial in two gynecological cancers: ovarian and endometrial adenocarcinomas. Folate binding protein has ! very limited tissue distribution and expression in non-malignant tissue and is over-expressed in more than 90% of ovarian and endometrial cancers, as well as in 20% to 50% of breast, lung, colorectal and renal cell carcinomas.

In April 2011, the Company acquired Apthera Inc and its NeuVax product candidate. The Company focuses on developing a pipeline of immunotherapy product candidates for the treatment of various cancers based on the E75 peptide, the advanced of which is NeuVax, which is targeted at preventing the recurrence of breast cancer. NeuVax has had positive Phase 1/2 clinical trial results for the prevention of breast cancer recurrence in patients who have had breast cancer and received the standard of care treatment (surgery, chemotherapy, radiotherapy and hormonal therapy as indicated). The Company had also initiated its Phase 3 PRESENT clinical trial of NeuVax for the prevention of breast cancer recurrence in early-stage low-to-intermediate HER2 breast cancer patients. NeuVax directs killer T-cells to target and destroy cancer cells that express HER2/neu, a protein associated with epithelial tumors in breast, ovarian, pancreatic, colon, bladder and prostate cancers. NeuVax is comprised of a HER2/neu-derived peptide called E75. E75 is a nine-amino acid sequence that is immunogenic (produces an immune response) and GM-CSF is a commercially available protein that acts to stimulate and activate components of the immune system such as macrophages and dendritic cells.

The Company also develops novel applications for NeuVax based on preclinical studies and phases 2 clinical trials which suggest that combining NeuVax and trastuzumab (Herceptin; Genentech/Roche) can increase antigen presentation by tumor cells by promoting receptor internalization and subsequent proteosomal degradation of the HER2 protein. The Company also is pursuing additional therapeutic indications for NeuVax that are in Phase 1/2 clinical trials. RXI-109, is a dermal anti-scarring therapy that targets! connecti! ve tissue growth factor (CTGF) and that may inhibit connective tissue formation in human fibrotic disease.

The Company competes with Roche Laboratories, Inc., Pfizer Inc., Bayer HealthCare AG, Sanofi-Aventis, US, LLC, Amgen, Inc., GlaxoSmithKline plc, Renovo Group plc, CoDa Therapeutics, Inc., Sirnaomics, Inc., FirstString Research, Inc., Merz Pharmaceuticals, LLC, Capstone Therapeutics, Halscion, Inc., Garnet Bio Therapeutics, Inc., AkPharma Inc., Promedior, Inc., Kissei Pharmaceutical Co., Ltd., Eyegene, Derma Sciences, Inc., Healthpoint Biotherapeutics, Pharmaxon, Excaliard Pharmaceuticals, Inc., Alnylam Pharmaceuticals, Inc., Marina Biotech, Inc., Tacere Therapeutics, Inc., Benitec Limited, OPKO Health, Inc., Silence Therapeutics plc, Quark Pharmaceuticals, Inc., Rosetta Genomics Ltd., Lorus Therapeutics, Inc., Tekmira Pharmaceuticals Corporation, Arrowhead Research Corporation, Regulus Therapeutics Inc. and Santaris.

Top 10 Biotech Companies To Watch In Right Now: Cubist Pharmaceuticals Inc.(CBST)

Cubist Pharmaceuticals, Inc., a biopharmaceutical company, focuses on the research, development, and commercialization of pharmaceutical products that address unmet medical needs in the acute care environment. The company markets CUBICIN (daptomycin for injection), a once-daily, bactericidal, intravenous, antibiotic with activity against gram-positive organisms, including methicillin-resistant staphylococcus aureus. Its clinical development product pipeline consists of CXA-201, which is in the phase III clinical trial for patients with complicated urinary tract infections; and in phase II clinical trial for patients with complicated abdominal infections. The company is also developing CXA-201 for the treatment of hospital acquired pneumonia. In addition, its product under development comprises CB-183,315, an oral, bactericidal lipopeptide with in vitro bactericidal activity against C. difficile, for the treatment of clostridium difficile-associated diarrhea (CDAD). Further , the company?s pre-clinical programs include therapies to treat various bacterial infections and agents to treat acute pain. Additionally, it promotes MERREM I.V. (meropenem for injection), a carbapenem class intravenous antibiotic, in the United States under a commercial services agreement with AstraZeneca Pharmaceuticals, LP; and DIFICID as the treatment for CDAD in adults under the co-promotion agreement with Optimer Pharmaceuticals, Inc. The company also has collaborations with Forma Therapeutics, Inc. to discover and develop antibacterial compounds; an agreement with the Broad Institute to transform natural products discovery; a collaboration with Hydra Biosciences, Inc., to develop ion channel drugs; and a collaboration agreement with Alnylam Pharmaceuticals, Inc., for the development and commercialization of Alnylam's RNAi therapeutics as a therapy for the treatment of respiratory syncytial virus. The company was founded in 1992 and is headquartered in Lexington, Mas sachusetts.

Advisors' Opinion:

• [By Dug]

  Cubist Pharmaceuticals(CBST) is a major player in anti-infectives, which prevent and treat diseases, specifically those caused by drug-resistant pathogens. For example, Cubist's major product, Cubicin, is used to treat complicated skin and skin structure infections as well as bacterimia.

  The company has two anti-biotics that are in stage two of FDA approval. Since 2008, Cubist has grown sales and earnings per share 29% and 24% annually, on average. Its stock delivered annualized gains of 8.9% over that period. Recent deterioration of growth has led to a sell-off in Cubist, disconcerting investors.

  Its stock is down 4% over the past three months. Fourth-quarter adjusted earnings decreased 28% year-over-year, but did beat the consensus estimate by 38%. The top-line, down 3%, missed consensus by 1.1%. The operating margin strengthened during the quarter, from 28% to 29%, indicating pricing strength. Jefferies is optimistic about the outcome of a patent litigation lawsuit, which has a trial date in April, and considers the small-cap undervalued, at just 13-times forward earnings, a 39% peer discount. But, it considers reliance on Cubicin a concentrated risk.

  Bullish Scenario: Jefferies expects Varian to rise 39% to $31.

  Bearish Scenario: ThinkEquity foresees a drop of 10% to $20.

• [By Melly Alazraki]

  Cubist Pharmaceuticals (CBST)rounds out the top five best biotech performers in the S&P 1500, according to Capital IQ, with a 16.3% return year-to-date. The smaller company ($1.48 billion market cap) relies on its anti-bacterial drugCubicin, used in hospitals for difficult-to-treat infections, including MRSA, formost of its revenue.
  
  While the company'spipelineconsists of otherantibiotic potentialsto address this unmet need area of severe infections, its revenue source is in jeopardy: Generic drugmaker Teva Phamaceutical (TEVA) istrying to enter the market.

Top 10 Biotech Companies To Watch In Right Now: InterMune Inc.(ITMN)

InterMune, Inc., a biopharmaceutical company, engages in the research, development, and commercialization of therapies in pulmonology and fibrotic diseases. In pulmonology, the company focuses on therapies for the treatment of idiopathic pulmonary fibrosis (IPF), a progressive and fatal lung disease. It markets pirfenidone, an orally active drug that inhibits the synthesis of TGF-beta under the Esbriet name in the European Union, as well as in a Phase III clinical trial in the United States. Pirfenidone is also approved for the treatment of IPF in Japan, where it is marketed by Shionogi & Co. Ltd. under the Pirespa trade name. The company?s research programs focus on the discovery of small-molecule therapeutics and biomarkers to treat and monitor serious pulmonary and fibrotic diseases. InterMune, Inc. was founded in 1998 and is headquartered in Brisbane, California.

Top 10 Biotech Companies To Watch In Right Now: Neurocrine Biosciences Inc.(NBIX)

Neurocrine Biosciences, Inc. engages in the discovery, development, and commercialization of drugs for the treatment of neurological and endocrine-related diseases and disorders in the United States. It develops drugs for endometriosis, stress-related disorders, pain, tardive dyskinesia, uterine fibroids, diabetes, insomnia, and other neurological and endocrine-related diseases and disorders. The company?s products in clinical development include Elagolix, a Phase II drug for endometriosis; Vesicular Monoamine Transporter 2 Inhibitor (VMAT2), a Phase II drug for movement disorders; CRF2 Peptide Agonist, a Phase II drug for cardiovascular diseases; CRF1 Antagonist, a Phase II drug for stress-related disorders; and Elagolix, a Phase II drug for uterine fibroids. Its research programs comprise G Protein-Coupled Receptor 119 (GPR119) for type II diabetes; VMAT2 for schizophrenia; GnRH Antagonists for men?s and women?s health, and oncology; Antiepileptic Drugs for epilepsy, essential tremor, and pain; and G Protein-Coupled Receptors for other conditions. The company has collaborations with GlaxoSmithKline to develop and commercialize CRF antagonists for psychiatric, neurological, and gastrointestinal diseases; Dainippon Sumitomo Pharma Co. Ltd. to develop and commercialize Indiplon in Japan; Abbott International Luxembourg S.�r.l. to develop and commercialize elagolix and GnRH antagonists for women?s and men?s health indications; and Boehringer Ingelheim International GmbH to research, develop, and commercialize small molecule GPR119 agonists for the treatment of type II diabetes and other indications. Neurocrine Biosciences, Inc. was founded in 1992 and is headquartered in San Diego, California.

Advisors' Opinion:

• [By Kevin1977]

  One of the top biotechnology stocks, Neurocrine Biosciences, Inc. has shown outstanding performance and trading activity lately.