Stocks to Watch: J.C. Penney, Deere, Lowe's

Among the companies with shares expected to actively trade in Wednesday’s session are J.C. Penney Co.(JCP), Deere(DE) & Co. and Lowe's Cos.(LOW)

J.C. Penney’s fiscal third-quarter loss widened as the department-store retailer’s sales and margins weakened and the bottom line took a hit from negative tax-valuation allowance impacts. However, shares climbed 5.9% to $9.22 in recent premarket trading as the company appeared to be turning a corner as same-store sales and margins improved each month in the quarter. Shares climbed 8.3% to $9.43 premarket.

Deere’s fiscal fourth-quarter earnings rose 17%, helped by higher prices and lower taxes and offsetting weaker farm-equipment sales in the U.S. and Canada. Results beat expectations, and shares edged up 3.7% to $85.91 premarket.

Lowe’s reported a 26% increase in fiscal third-quarter earnings and raised its year outlook as the home-improvement retailer continues to benefit from the recovering housing market. However, its bottom line narrowly missed estimates, and Wall Street was expecting a sharper increase to its outlook. Shares slipped 2.9% to $49 premarket.

ADT Corp.'s(ADT) fiscal fourth-quarter earnings rose 2.1% as the security-monitoring company’s recurring revenue improved thanks to customer growth. The top line beat views, pushing shares up 2.2% to $43.75 premarket.

La-Z-Boy Inc.'s(LZB) fiscal second-quarter profit more than doubled on higher upholstery sales and as the furniture company reported rising demand at its network of stores. Results for the quarter easily exceeded expectations, and La-Z-Boy also announced it raised its quarterly dividend payment by 50% to six cents a share. The news sent shares up 7.4% to $26.22 premarket.

Seaspan Corp.(SSW) said it plans to offer 3.5 million Class A common shares, and expects to use the proceeds from the offering for general corporate purposes, which may include funding vessel acquisitions. The containership owner recently had about 64.9 million shares outstanding, according to FactSet. Shares fell 8% to $21.55 premarket.

BioMarin Pharmaceutical Inc.(BMRN) said a U.S. Food and Drug Administration advisory panel recommended approval of the company’s enzyme-replacement therapy for patients with a rare inherited disorder that can hinder growth. In premarket trading, shares rose 5.7% to $70.75.

Hirzel Capital Management LLC unveiled a major stake in Aeropostale Inc.(ARO), calling the teen-apparel retailer’s shares undervalued. The Dallas-based private investment firm Tuesday reported a 6% stake in Aeropostale and said it plans to have discussions with management, according to a filing with the Securities and Exchange Commission.

J.M. Smucker Co.'s(SJM) fiscal second-quarter earnings rose 3.1% as the jam and coffee maker booked lower commodity and restructuring charges and volumes improved in several key segments. But price cuts offset some of those benefits, and results missed expectations. The company also lowered its sales guidance for the year.

National Health Investors Inc.(NHI) signed an agreement to acquire 25 independent-living facilities from Holiday Retirement Corp. affiliates for $491 million. The health-care focused real-estate investment trust also unveiled plans to offer 4.5 million shares of its stock to help fund the pending deal.

Oneok Partners L.P(OKS). on Tuesday said it planned to invest $650 million to $780 million on Bakken Shale projects in North Dakota, including a new natural-gas processing plant. The spending plan is set to run through the second quarter of 2016. Oneok has already announced $6 billion to $6.4 billion in total investments through 2016.

Top Safest Companies To Watch In Right Now

Private-equity firm Blackstone Group L.P(BX). plans to trim its ownership stake in SeaWorld Entertainment Inc.(SEAS) by 15 million shares, following the theme-park operator’s public listing in April. The stock sale would cut Blackstone’s ownership to 46%, not including an underwriter option, resulting in SeaWorld no longer being a “controlled company” under New York Stock Exchange governing standards.

Staples Inc.(SPLS) swung to a fiscal third-quarter profit as the office-supply company closed stores in Europe and North America, reaching cost-cutting targets ahead of schedule. However, the company’s revenue fell and narrowly missed estimates due to soft demand for its products.

Yahoo Inc.(YHOO) on Tuesday said it increased its authorization to buy back shares by $5 billion.

Where Will Boeing Go Next?

With shares of Boeing (NYSE:BA) trading around $129, is BA an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

Boeing is an aerospace company. It focuses primarily on engineering, information technology, research and development, test and evaluation, technology strategy development, environmental remediation management, and intellectual property management. The company operates in five segments: Commercial Airplanes, Boeing Military Aircraft, Network & Space Systems, Global Services & Support, and Boeing Capital Corp.

Top Safest Companies To Watch In Right Now

The Boeing Company reported fourth-quarter revenue of $23.8 billion and core earnings per share (non-GAAP) that increased 29 percent to $1.88, driven by strong performance across the company’s businesses and higher deliveries. Fourth-quarter core operating earnings (non-GAAP) of $1.8 billion includes a $406 million non-cash charge to settle A-12 litigation dating back to 1991, retiring a longstanding risk to the company. Excluding the A-12 charge, fourth-quarter 2013 core operating earnings increased 22 percent to $2.2 billion and core operating margin increased to 9.4 percent. Core and GAAP earnings per share includes a charge of $0.34 per share related to A-12 partially offset by a benefit of $0.28 per share for a tax regulation change. "Strong fourth-quarter results underscored an outstanding full year of core operating performance that drove record revenue and earnings and increased returns to shareholders," said Boeing Chair and Chief Executive Officer Jim McNerney.

T = Technicals on the Stock Chart Are Mixed

Boeing stock has been exploding to the upside over the last couple of quarters. However, the stock is currently pulling back and may need time to consolidate. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, Boeing is trading between its rising key averages which signal neutral price action in the near-term.

(Source: Thinkorswim)

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

	Implied Volatility (IV)	30-Day IV Percentile	90-Day IV Percentile
Boeing options	26.81%	83%	80%

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

	Put IV Skew	Call IV Skew
February Options	Average	Average
March Options	Average	Average

As of today, there is an average demand from call and put buyers or sellers, all neutral over the next two months. To summarize, investors are buying a very significant amount of call and put option contracts and are leaning neutral over the next two months.

On the next page, let’s take a look at the earnings and revenue growth rates and the conclusion.

E = Earnings Are Increasing Quarter-Over-Quarter

Rising stock prices are often strongly correlated with rising earnings and revenue growth rates. Also, the last four quarterly earnings announcement reactions help gauge investor sentiment on Boeing’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for Boeing look like and more importantly, how did the markets like these numbers?

	2013 Q4	2013 Q3	2013 Q2	2013 Q1
Earnings Growth (Y-O-Y)	28.77%	11.85%	11.02%	18.03%
Revenue Growth (Y-O-Y)	6.65%	10.61%	9.05%	-2.53%
Earnings Reaction	-4.91%*	5.33%	-0.77%	3.00%

Boeing has seen increasing earnings and revenue figures over the last four quarters. From these numbers, the markets have been pleased with Boeing’s recent earnings announcements.

* As of this writing

P = Weak Relative Performance Versus Peers and Sector

How has Boeing stock done relative to its peers, Lockheed Martin (NYSE:LMT), Spirit Aerosystems (NYSE:SPR), Northrop Grumman (NYSE:NOC), and sector?

	Boeing	Lockheed Martin	Spirit Aerosystems	Northrop Grumman	Sector
Year-to-Date Return	-4.47%	-0.76%	-0.26%	-1.87%	-2.84%

Boeing has been a poor relative performer, year-to-date.

Conclusion

Boeing is an aerospace company and provider of aircrafts and related products and services to corporations and governments worldwide. The company reported fourth-quarter earnings that left investors pleased. The stock has been surging higher but is currently pulling back. Over the last four quarters, earnings and revenue figures have increased. Relative to its peers and sector, Boeing has been a poor year-to-date performer. Look for Boeing to continue to OUTPERFORM.

An Introduction To Coverage Ratios

The ability to separate companies with a healthy amount of debt from those that are overextended is one of the most important skills an investor can develop. Most businesses use debt to help finance operations, whether it's buying new equipment or hiring additional workers. But relying too much on borrowing will catch up with any business. For example, when a company has difficulty paying creditors on time, it may have to sell off assets, which puts it at a competitive disadvantage. In extreme cases, it may have no choice but to file for bankruptcy.

Coverage ratios are a useful way to help gauge such risks. These relatively easy formulas determine the company's ability to service its existing debt, potentially sparing the investor from heartache down the road.

The most widely used coverage ratios include the interest, debt-service and asset coverage ratios.

Interest Coverage Ratio

The basic concept behind the interest coverage ratio is pretty straightforward. The more profit a company generates, the greater its ability to pay down interest. To arrive at the figure, simply divide the earnings before interest and taxes (EBIT) by the firm's interest expense for the same period.

Interest coverage ratio = EBIT / Interest expense

A ratio of 2 means the company earns twice as much as it has to pay out in interest. As a general rule, investors should lean toward companies with an interest coverage ratio – otherwise known as the "times interest earned ratio" – of at least 1.5. A lower ratio usually indicates a firm that's struggling to pay off bondholders, preferred stockholders and other creditors.

Debt-Service Coverage Ratio

While the interest coverage ratio is widely used, it has an important shortcoming. In addition to covering interest expenses, businesses usually have to pay down part of the principal amount each quarter, too.

The debt-service coverage ratio takes this into account. Here, investors divide net income by the total borrowing expense – that is, principal repayments plus interest costs.

Debt-service coverage ratio = Net income / (Principal repayments + Interest expense)

A figure under 1 means the business has a negative cash flow – it's actually paying more in borrowing expenses than it's bringing in through revenue. Therefore, investors should look for businesses with a debt-service coverage ratio of at least 1 and preferably a little higher to ensure an adequate level of cash flow to address future liabilities.

Practical Example: To see the potential difference between these two coverage ratios, let's look at fictional company Cedar Valley Brewing. The company generates a quarterly profit of $200,000 (EBIT is $300,000) and corresponding interest payments of $50,000. Because Cedar Valley did much of its borrowing during a period of low interest rates, its interest coverage ratio looks extremely favorable. Interest coverage ratio = 300,000 / 50,000 = 6

The debt-service coverage ratio, however, reflects a significant principal amount the company pays each quarter totaling $140,000. The resulting figure of 1.05 leaves little room for error if the company's sales take an unexpected hit.

Debt-service coverage ratio = 200,000 / 190,000 = 1.05

Even though the company is generating a positive cash flow, it looks more risky from a debt perspective once debt-service coverage is taken into account.

Asset Coverage Ratio

The aforementioned ratios compare a business' debt in relation to its earnings. Therefore, it's a good way to look at an organization's ability to cover liabilities today. But if you want to forecast a company's long-term profit potential, you have to look closely at the balance sheet. In general, the more assets the company has when compared to its total borrowings, the more likely it will be to make payments down the road.

The asset coverage ratio is based on this idea. Basically, it takes the company's tangible assets after accounting for near-term liabilities, and divides the remaining number by the outstanding debt.

Asset coverage ratio = [(Total assets – Intangible assets) – (Current liabilities – Short-term debt obligations)] / Total debt outstanding

Whether the resulting figure is acceptable depends on the industry. For example, utilities should typically have an asset coverage ratio of at least 1.5, while the traditional threshold for industrial companies is 2.

Practical Example: This time let's look at JXT Corp., which makes factory automation equipment. The company has assets of $3.6 million of which $300,000 are intangible items such as trademarks and patents. It also has current liabilities of $600,000, including short-term debt obligations of $400,000. The company's total debt equals $2.3 million. Asset coverage ratio = [(3,600,000 – 300,000) – (600,000 – 400,000)] / 2,300,000 = 1.3

At 1.3, the company's ratio is well below the typical threshold. By itself, this shows that JXT has insufficient assets to draw upon, given its substantial amount of debt.

One limitation of this formula is that it relies on the book value of a business's assets, which will often vary from its actual market value. To obtain the most reliable results, it usually helps to use multiple metrics to evaluate a corporation rather than relying on any single ratio.

Evaluating Businesses

Investors can use coverage ratios in one of two ways. First, you can track changes in the company's debt situation over time. In cases where the debt-service coverage ratio is barely within the acceptable range, it may be a good idea to look at the company's recent history. If the ratio has been gradually declining, it may only be a matter of time before it falls below the recommended figure.

Coverage ratios are also valuable when looking at a company in relation to its competitors. Evaluating similar businesses is imperative, because an interest coverage ratio that's acceptable in one industry may be considered risky in another field. If the business you're evaluating seems out of step with major competitors, it's often a red flag.

The Bottom Line

Over the long run, excessive reliance on debt can wreak havoc on a business. Tools such as the interest coverage ratio, debt-service coverage ratio and asset coverage ratio can help you determine up front whether a company can pay its creditors in a timely manner.

SEC Charges 23 Funds With Short-Selling Violations on Stock Offerings

NEW YORK (TheStreet) -- The Securities and Exchange Commission sanctioned 23 investment firms, including hedge funds D.E. Shaw and Deerfield Management and pension fund the Ontario Teachers' Pension Plan Board for short-selling violations as the agency says it works to curb a practice where investment firms participate in a company's public stock offering after short selling the stock.

Specifically, the sanctioned firms are alleged to have had violated the SEC's Rule 105 of Regulation M, which prohibits the short sale of an equity security during a restricted period -- generally five business days before a public offering -- and the purchase of that same security through the offering.

Firms charged in the SEC's enforcement action allegedly bought offered shares from an underwriter, broker, or dealer participating in a follow-on public offering after having sold short the same security during the restricted period.

The SEC said Rule 105 helps prevent short selling that can reduce offering proceeds received by companies as they seek capital from public stock investors.

The enforcement actions are being settled by 22 of the 23 firms charged, resulting in more than $14.4 million in monetary sanctions, the SEC said.

"Through this new program of streamlined investigations and resolutions of Rule 105 violations, we are sending the clear message that firms must pay the price for violations while also conserving agency resources," Andrew J. Ceresney, Co-Director of the SEC's Division of Enforcement, said in a statement.

In its complaint, the SEC alleged hedge funds as prominent as D.E. Shaw and Deerfield Management had agreed to pay monetary penalties.

Hot Performing Companies To Own For 2015

D.E. Shaw's alleged violations center on stock offerings from the likes of bond insurer Radian (RAD) and oil services specialist Hercules Offshore (HER). Deerfield's alleged violations center on biotech firms such as Sangamo Biosciences (SGMO) and Derma Sciences (DSCI). The Ontario Teachers Pension Plan, one of Canada's largest public pensions, is alleged to have improperly traded in firms as large as BlackRock (BLK).

The SEC said its crackdown was investigated with the assistance of Financial Industry Regulatory Authority and that it simultaneously has issued a risk alert to highlight risks to firms from non-compliance with Rule 105.

"This coordination between the enforcement and examination programs reaffirms that market participants must be in compliance with Rule 105 to preserve and protect the independent pricing mechanisms of the securities markets," Andrew Bowden, Director of the SEC's National Exam Program, said in a statement.

Hedge funds traditionally associated with short selling such as David Einhorn-run Greenlight Capital Management, William Ackman-run Pershing Square Capital Management and Jim Chanos-run Kynikos Associates weren't mentioned in the SEC's complaint.

-- Written by Antoine Gara in New York

Follow @antoinegara

5 Rocket Stocks to Buy as Mr. Market Climbs

BALTIMORE (Stockpickr) -- Ugh, I wouldn't want to be Larry Summers this morning. The former Treasury secretary set off a rally in stock futures yesterday, when he withdrew his name from the Fed Chairman job. The market has voted: Investors hate Larry Summers.

But don't worry too much about Larry. It's probably safe to say he's got a thick skin.

Instead, investors should be paying attention to the market's reaction. As I write just ahead of the open this morning, equities are pointed at some serious follow-through this Monday. That's a big deal after a technically-significant bounce that slingshotted stocks 1.98% higher last week.

And it's creating some buying opportunities this week. To make the most of them, we're turning to a new set of Rocket Stocks.

For the uninitiated, "Rocket Stocks" are our list of companies with short-term gain catalysts and longer-term growth potential. To find them, I run a weekly quantitative screen that seeks out stocks with a combination of analyst upgrades and positive earnings surprises to identify rising analyst expectations, a bullish signal for stocks in any market. After all, where analysts' expectations are increasing, institutional cash often follows. In the last 214 weeks, our weekly list of five plays has outperformed the S&P 500 by 88.85%.

Without further ado, here's a look at this week's Rocket Stocks.

Schlumberger

2013 has been a stellar year for shares of oil service giant Schlumberger (SLB). Since the calendar flipped over to January, SLB has rallied more than 25%, beating the broad market's impressive pace by double digits. As oil prices linger on the high end of their historic range, SLB is well positioned to keep ticking higher.

Schlumberger provides must-have services to national and supermajor oil firms as well as smaller E&Ps, offering up niche services like seismic surveys and well drilling and positioning. In a nutshell, SLB's job is to pull oil out of the ground as efficiently as possible. Oil firms turn to Schlumberger because the tasks they need to accomplish are too nuanced or proprietary to pull off in-house. So as long as the company continues to pour cash into R&D for drilling technology and software, the firm should continue to score lucrative contracts.

Some of Schlumberger's most attractive opportunities right now come from overseas. The firm is one of the largest oil servicers in Russia, a key growth market in the years ahead. It's also got an important presence in smaller oil markets, where it's a big fish in a small pond. A big scale and stellar reputation should guarantee Schlumberger an attractive piece of the oil pie for years to come.

Yahoo!

It's been a challenging year for Yahoo! (YHOO), but you wouldn't know it from this stock's price action. Yahoo! has rallied more than 47% year-to-date, buoyed by major changes in the firm's structure -- and conspicuous leadership from CEO Marissa Mayer. But Yahoo!'s new logo is a good metaphor for the transformation at the company: The new logo was announced with much excitement, but most users probably wouldn't have noticed it otherwise.

Arguably paying too much for Tumblr, and still lacking a real unique selling proposition the new Yahoo! looks way too much like the old Yahoo!.

But while this stock built a reputation for being a dot-com era dinosaur, investors neglected the fact that this stock has had a really attractive business all along. Despite some big missteps, Yahoo! remains one of the biggest destinations on the internet, and all those eyes on its Web sites contribute to hefty net profit margins from operations.

Yahoo!'s cash position has been a blessing and a curse for investors in the last few years. A brilliant investment in Alibaba has contributed to a cash and investment position of more than $7.6 billion at last count, covering more than a quarter of YHOO's market cap. While that does help to reduce risk, Yahoo! either needs to figure out internal investments that yield meaningful rates of return, or give the money back to shareholders.

Just don't underestimate this stock's potential in 2013; Yahoo! may be a dinosaur, but at least it's a T-Rex.

Kroger

$20 billion grocery store chain Kroger (KR) has seen some surprising upside of its own this year: shares have climbed 50% since the first trading day in January. That performance may seem surprising for a 130 year old large-cap grocer, but this stock's rally has been predicated on out-executing the competition for years now.

Kroger operates more than 2,400 supermarkets, 750 convenience stores, and 325 jewelry stores under a handful of popular brands. Those marquees include Ralphs, Fred Meyer, Kwik Shop and Turkey Hill in addition to the firm's namesake chain. An ongoing acquisition plan for Harris Teeter stands to add another powerhouse grocery chain to KR's portfolio this year, adding even more separation between Kroger and its most well known competitors.

The grocery business is characterized by paper thin margins and zero competitive advantages. Kroger changed that by offering fuel as loss leader to pull in customers at around half of its locations. While many peers have copied that strategy, the existence of gas infrastructure at such a large percentage of its locations gives Kroger some built-in advantages. In many cases, rivals don't have the option to add fuel to as many of their own stores. From there, huge private label presence on Kroger's shelves help spur bigger margins than the rest of the industry.

With rising analyst sentiment in Kroger this week, we're betting on shares.

Green Mountain Coffee Roasters

As badly as short sellers want to hate on Green Mountain Coffee Roasters (GMCR), betting against the multiyear rally in this $12.7 billion beverage stock has been about as wise as eating from a box with a skull and crossbones on it. And as a bull market continues to lift all ships, Green Mountain's ship is going to keep floating above the others.

Green Mountain owns Keurig, the brand of beverage brewers that use self-contained K-Cups to make coffee, teas, and other drinks. While Keurig's "fad" status has certainly helped tip the deck against GMCR, the fact remains that the firm has done most of the hard work in getting Keurig machines accepted by consumers. With brewers essentially ubiquitous at this point, the firm is able to make money on its cash cow: the K-Cups.

Keurig's individual-serving cups have big margins and a big installed base. With huge convenience and the relatively large sunk cost that consumers have put into their Keurig machines, it's a sticky business with big switching costs. Consumers who buy a Keurig are much less likely to spend the money on a competing brand of proprietary coffee pods.

I've said before that GMCR is far from cheap right now. But its momentum trajectory is showing few signs of fizzling out, especially as direct competitors such as Starbucks (SBUX) continue to sell K-Cups of their own. Don't bet against GMCR in September – buy this Rocket Stock instead.

Polaris Industries

Last, but certainly not least, is Polaris Industries (PII), the power sports equipment manufacturer. In short, Polaris makes toys -- toys for grown ups. The firm's namesake brand manufactures ATVs and snowmobiles, and it also owns storied motorcycle brands Victory and Indian, and GEM light electric vehicles. With more than 1,650 dealers in North American alone, Polaris owns a significant chunk of the power sports industry, churning out more than $3.2 billion in sales last year, and net profit margins approaching 10%.

Economic recovery is fueling a boom market for Polaris' vehicles, especially now that rates continue to hover near their historic floor. Borrowing money is cheap, and that means that financing a motorcycle or ATV has become more affordable than ever before. With relatively low acquisition costs, buying one of Polaris' machines is a lot easier to stomach than many other recreation options, and so sales continue to look attractive this year.

Financially, Polaris is in solid shape. The firm carries nearly $280 million in cash and investments on its balance sheet, easily offsetting $107.6 million in total debt. PII is well positioned to run over any economic hiccups in the foreseeable future -- and with rising analyst sentiment in shares, we're betting on this name this week.

To see all of this week's Rocket Stocks in action, check out the Rocket Stocks portfolio at Stockpickr.

-- Written by Jonas Elmerraji in Baltimore.

The Worst Month for Stocks is Not October

Thanks to two major crashes, October usually is pegged as the worst month for stocks - but that's not the case.

It's actually the current month that has delivered the worst performance, leading to the question: Why do stocks fall in September?

Going back to 1929, the S&P 500 averages a 1.1% decline in September. It's the only month to drop more than 50% of the time, according to Standard & Poor's research. All other months have positive returns 60% of the time.

September performance for the Dow Jones Industrial Average is also dismal.

The Dow has lost an average 1.09% in September since the index started in 1896. That compares to the 0.75% gain in all other months.

So what is behind September's bad showing for the stock market?

Why September Is Bad for Stocks

Here are five reasons why stocks tend to fall in September:

In September, moods change as people again focus on portfolios instead of vacations. Investors are more inclined than in the previous summer months to take action and dump losers. "Psychologically, when the leaves turn in the fall, vacations end and the days are getting shorter, there is this kind of negative vibe out there that tends to accentuate any negative events," Dan Seiver, a finance professor at San Diego University, explained to the Associated Press. Tax refunds and bonuses are received in the first few months and often go into IRA accounts or toward maxing 401(k) contributions, so less capital flows into investments in the second half of the year. Mutual funds frequently do some "window dressing." Scores of funds end their fiscal year in September, and they sell their losers and buy the best-performing stocks ahead of presenting their year-end portfolios and fund performances to shareholders. Investors often do a reality check in September. Record stock market rallies have pushed the Dow up some 14.55%, the S&P 500 up 16.64%, and the Nasdaq up 23.74% year to date. Investors want to take a piece of the robust gains before volatility hits. September has seen the highest number of banking crisis events. According to an International Monetary Fund (IMF) working paper, 24 of the 147 global banking calamities since 1970 have occurred in September. Will This September Be Bad for Stocks?

Even without the historical trend, there are factors pointing to increased volatility this month, like these four developments:

Geopolitical risks in Syria and Egypt remain a threat. That means the following: crude oil prices are expected to move sharply higher (higher oil prices leave consumers with less disposable income), and money is shifting from equities into safe-haven assets like gold and silver. The Bank of Japan releases its interest rate decision on Sept. 5. Its benchmark interest rate was last recorded at 0%. The zero interest rate policy is part of a controversial move from Japan's government aimed at expanding the Asian nation's economy and end nearly two decades of deflation. From 1972 until 2013, the rate average was 3.22%. Any rate change from the world's third-largest economy could rattle global markets. The Federal Open Market Committee (FOMC) meets Sept. 17-18, and the big question on everyone's minds is will the central bank taper or not taper its $85 billion monthly bond-buying program. Minutes from the U.S. Federal Reserve's July meeting showed broad support for a scaling back, but a spate of weak economic data may give the Fed reason to pause. Ever since the first mention of a taper, stocks have sold off. Even if the Fed keeps the same course for now, fear of a QE taper could slam stocks before the meeting. We find out who will become Germany's next chancellor on Sept. 18. Analysts expect a victory for Angela Merkel and her ruling collation in September general elections. But there are some who would like to see more active engagement from the country and for the leading Eurozone nation to take on more global responsibility, which Chancellor Merkel has steered clear of. The latest polls have Merkel ahead by 41%. In order to garner the majority of votes, Merkel may have to take a tougher line on banks, push up spending, and raise taxes on high earners - moves that could rattle markets.

As investors, you should be prepared for a busy month. But no matter what happens to stocks, we have you covered with the info you need now.

Here are a couple of stories (in case you missed them the first time) that will prepare you for what's ahead:

As Money Morning Chief Investment Strategist Keith Fitz-Gerald has explained, this is the most unloved bull market in history - and it has gone on for 11 months longer than the average bull market run since 1953. That means you should know how to prepare for a correction; here are some options. With all the "crash talk" floating around markets, there's really only one indicator you should take seriously. Fitz-Gerald spells it out for investors - with four things to do now - in this analysis, "The Only "Crash Talk" Worth Trading." If we do have a volatile September, it will bring about great buying opportunities. Go here to learn from Fitz-Gerald what you should be shopping for: "How To Invest In Today's Volatile Market."

Related Articles:

Associated Press:
September Is Actually Worst Month for Stocks International Business Times:
Why September Is the Worst Month of the Year: Stocks Tank; Banks Fail U.S. News & World Report:
For the Market's Cruel September, a Surprise Ending?

Can Target Stock Rebound?

With shares of Target (NYSE:TGT) trading around $59, is TGT an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

Target operates general stores in the United States as well as online, where it sells merchandise at discounted prices. It operates in three segments: U.S. Retail, U.S. Credit Card, and Canadian. Target's online presence is designed to enable consumers to purchase products either online or by locating items in one of its stores with the aid of online research and location tools. Groceries, clothing, household items, and general merchandise can be found at Target, making it an efficient shopping experience for consumers throughout the nation.

Target will end health insurance for part-time employees in April, joining Trader Joe's Co., Home Depot Inc. (NYSE:HD) and other U.S. retailers that have scaled back benefits in response to changes from Obamacare. About 10 percent of part-time employees, defined as those working fewer than 30 hours a week, use Target's health plans now, according to a posting yesterday on the Minneapolis-based company's website.

Target is the second-largest U.S. discount retailer by sales and had about 361,000 total employees last fiscal year, according to data compiled by Bloomberg. The U.S. Patient Protection and Affordable Care Act is the largest regulatory overhaul of healthcare since the 1960s, creating a system of penalties and rewards to encourage people to obtain medical insurance. The law known as Obamacare doesn't require most companies to cover part-time workers, and offering them health plans may disqualify those people from subsidies in new government-run insurance exchanges that opened in October.

T = Technicals on the Stock Chart Are Weak

Target stock has been pulling back over the last couple of months. The stock is currently trading sideways and may need time to stabilize before heading higher. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, Target is trading below its rising key averages, which signal neutral to bearish price action in the near-term.

(Source: Thinkorswim)

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

	Implied Volatility (IV)	30-Day IV Percentile	90-Day IV Percentile
Target options	19.27%	36%	34%

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

	Put IV Skew	Call IV Skew
February Options	Steep	Average
March Options	Steep	Average

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

On the next page, let’s take a look at the earnings and revenue growth rates and the conclusion.

E = Earnings Are Mixed Quarter-Over-Quarter

Rising stock prices are often strongly correlated with rising earnings and revenue growth rates. Also, the last four quarterly earnings announcement reactions help gauge investor sentiment on Target’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for Target look like and more importantly, how did the markets like these numbers?

	2013 Q3	2013 Q2	2013 Q1	2012 Q4
Earnings Growth (Y-O-Y)	-43.75%	-10.38%	-25.96%	0.81%
Revenue Growth (Y-O-Y)	1.95%	2.01%	-0.95%	6.76%
Earnings Reaction	-3.45%	-3.60%	-4.01%	-1.45%

Target has seen decreasing earnings and increasing revenue figures over the last four quarters. From these numbers, the markets have had mixed feelings about Target’s recent earnings announcements.

P = Average Relative Performance Versus Peers and Sector

How has Target stock done relative to its peers, Wal-Mart (NYSE:WMT), Costco (NASDAQ:COST), Kohl’s (NYSE:KSS), and sector?

	Target	Wal-Mart	Costco	Kohl’s	Sector
Year-to-Date Return	-6.73%	-4.38%	-4.17%	-8.79%	-5.01%

Target has been an average relative performer, year-to-date.

Conclusion

Target operates discount general stores across North America where consumers continue to enjoy their shopping experience. The company will end health insurance for part-time employees in April. The stock has been pulling back over the last couple of months and is currently trading sideways. Over the last four quarters, investors in the company have had conflicting feelings, as earnings have been decreasing while revenues have been rising. Relative to its peers and sector, Target has been an average year-to-date performer. WAIT AND SEE what Target does the rest of this quarter.

Understanding The Consumer Confidence Index

Best Growth Companies To Own In Right Now

Imagine that you are talking with your neighbor in your backyard, and you mention that you and your wife are shopping for a new car, you are getting ready to refinance your house and your wife's brother recently lost his job. Your neighbor tells you he was recently promoted, his wife is starting a business and his daughter just bought a new computer. What kind of analysis about the health of the U.S. economy could an economist make based on your backyard conversation? Well, that depends on what the conversation suggests about consumer confidence.

The mention of recent or upcoming purchases of a computer and a car suggests strong consumer demand. Your plan to refinance your home is a positive sign for the future, implying that you are confident in your ability to meet future mortgage payments. The refinancing suggests also the possibility of lower mortgage payments, which could mean an increase in your discretionary income. Your neighbor's promotion and the start of his wife's new business are also positive economic signs. The only negative reference during the conversation was the mention of one person who recently lost a job. But from the other information exchanged between you and your neighbor, the economist might conclude that consumer confidence is high. That is good news for the economy because, on average, consumers are responsible for two-thirds of the nation's economic activity, or the gross domestic product (GDP).

Consumer Confidence
Consumer confidence, measured by the Consumer Confidence Index (CCI), is defined as the degree of optimism on the state of the economy that consumers (like you and me) are expressing through their activities of saving and spending. The CCI is prepared by the Conference Board and was first calculated in 1985. In that year, the result of the index was arbitrarily set to 100, representing the index's benchmark. This value is adjusted monthly based on results of a household survey of consumers' opinions on current conditions and future economic expectations. Opinions on current conditions make up 40% of the index, with expectations of future conditions comprising the remaining 60%.

In the glossary on its website, the Conference Board defines the Consumer Confidence Survey as "a monthly report detailing consumer attitudes and buying intentions, with data available by age, income and region." In the most simplistic terms, when their confidence is trending up, consumers spend money, indicating a healthy economy. When confidence is trending down, consumers are saving more than they are spending, indicating the economy is in trouble. The idea is that the more confident people feel about the stability of their incomes, the more likely they are to make purchases.

The Survey
Each month the Conference Board surveys 5,000 U.S. households. The survey consists of five questions that ask the respondents' opinions about the following:

Current business conditions. Business conditions for the next six months. Current employment conditions. Employment conditions for the next six months. Total family income for the next six months. Survey participants are asked to answer each question as "positive," "negative" or "neutral." The results from the Consumer Confidence Survey are released on the last Tuesday of each month at 10am EST.

The Calculations
Once the data has been gathered, a portion known as the "relative value" is separately calculated for each question; each question's positive responses are divided by the sum of its positive and negative responses. The relative value for each question is then compared against each relative value from 1985, which is set as the benchmark because 1985 is the first year the index was calculated. This comparison of the relative values results in an "index value" for each question.

The index values for all five questions are then averaged together to form the Consumer Confidence Index. The average of index values for questions one and three form the Present Situation Index; and the average of index values for questions two, four and five form the Expectations Index. The data is calculated for the United States as a whole and for each of the country's nine census regions.

How the Data is Used
Manufacturers, retailers, banks and the government monitor changes in the CCI to factor in the data in their decision-making processes. While index changes of less than 5% are often dismissed as inconsequential, moves of 5% or more often indicate a change in the economy's direction. A month-on-month decreasing trend suggests consumers have a negative outlook on their ability to secure and retain good jobs. Thus, manufacturers may expect consumers to avoid retail purchases, particularly large-ticket items that require financing. Manufacturers may pare down inventories to reduce overhead and/or delay investing in new projects and facilities. Likewise, banks can anticipate a decrease in lending activity, mortgage applications and credit card use.

When faced with a down-trending index, the government has a variety of options, such as issuing a tax rebate or taking other fiscal or monetary action to stimulate the economy. Conversely, a rising trend in consumer confidence indicates improvements in consumer buying patterns. Manufacturers can increase production and hiring. Banks can expect increased demand for credit. Builders can prepare for a rise in home construction and government can anticipate improved tax revenues based on the consumer spending increase.

Lagging Perspective
The next time you hear the results from the latest Consumer Confidence Survey, keep in mind that economists view consumer confidence as a lagging indicator, which responds only after the overall economy has already changed. The explanation for this delayed CCI reaction is that it takes time for consumers to recover from and respond to economic events. The importance of a lagging indicator is that it confirms that a pattern is occurring. So, an increase in spending today may reflect the results of an economy that recovered a few months ago. Conversely, a decrease in spending today may confirm an ongoing recession.

Conclusion
Since consumer spending is so important to the nation's financial health, the Consumer Confidence Index is one of the most accurate and closely watched economic indicators. The index is based on a survey of five questions posed to 5,000 households, measuring their optimism on the economy's health. The CCI, however, is a lagging indicator, so whatever the survey says, remember that it doesn't tell us what is going to happen, but what has happened and if it can be expected to continue.

Hot Financial Stocks To Invest In Right Now

CC Media Holdings, Inc. (CCMO)

Today, CCMO� remains (0.00%) +0.000 at $4.71 thus far (ref. google finance Delayed:�� 3:18PM EDT August 5, 2013).

CC Media Holdings, Inc. previously reported financial results for the second quarter ended June 30, 2013.

Revenue grew 1% to $1.6 billion, excluding foreign exchange and divestitures
OIBDAN1 declined 5% year over year to $505 million, excluding foreign exchange and divestitures; OIBDAN margin of 31%
Extended $5.0 billion of term loans to 2019 from 2016, and exchanged senior notes due 2016 for senior notes due 2021

CC Media Holdings, Inc. (CCMO) 5 day chart:

Crown Equity Holdings Inc. (CRWE)

Hot Financial Stocks To Invest In Right Now: Diamond Hill Investment Group Inc.(DHIL)

Diamond Hill Investment Group, Inc., through its subsidiaries, sponsors, markets, and provides investment advisory and related services to individual and institutional investors in the United States. The company also offers compliance, treasury, fund administration, underwriting, and distribution services to mutual fund companies. It serves mutual funds, separate accounts, and private investment funds. Diamond Hill wholesales its products to financial intermediaries, including independent registered investment advisors, brokers, financial planners, investment consultants, and third party marketing firms. The company was founded in 1990 and is based in Columbus, Ohio.

Hot Financial Stocks To Invest In Right Now: First M & F Corporation(FMFC)

First M&F Corporation operates as the holding company for Merchants and Farmers Bank that provides community banking services to middle market and professional businesses in Mississippi, Alabama, Tennessee, and Florida. It offers various deposit products, including interest and non-interest bearing NOW and money market, savings, and time deposits, as well as certificates of deposit. The company also provides loan products, such as commercial, financial, and agricultural loans; non-residential real estate loans; residential real estate loans; and consumer loans. In addition, it offers various services, such as business checking, treasury management, and secured and unsecured lines of credit; sweep accounts and letters of credit; debit cards, automated teller machine access, and overdraft protection plans. Further, the company provides credit life insurance and general insurance agency services; and real estate property management services, as well as involves in asset-based lending operations. First M&F Corporation operates through its main office and two branches in Kosciusko and its branches within central and north Mississippi. The company was founded in 1890 and is based in Kosciusko, Mississippi.

Top 5 Oil Companies To Own For 2014: Waterfront Capital Corporation(WFG.V)

Waterfront Capital Corporation provides merchant banking services to public and non-public companies. It offers a range of financial and communications services to companies in various industry sectors. The company serves as a strategic partner and provides various services in the areas of venture capital, initial public offerings, secondary financings, mergers and acquisitions, and public market administration, as well as media and investor relations. Waterfront Capital Corporation was founded in 1987 and is based in West Vancouver, Canada.

Hot Financial Stocks To Invest In Right Now: Virginia Commerce Bancorp(VCBI)

Virginia Commerce Bancorp, Inc. operates as the bank holding company for Virginia Commerce Bank that provides business and consumer banking services. The company accepts various deposit products comprising demand deposits, savings and money market accounts, and time deposits. It also originates commercial loans, commercial real estate loans, lines of credit, equipment financing, construction loans, letters of credit, residential mortgages, personal loans, auto loans, and home equity loans and lines of credit. In addition, the company offers merchant bankcard, electronic funds transfer, lock-box, remote deposit capture, online banking, investment, safe deposit boxes, and other customary banking services. It serves small-to-medium sized businesses, including firms that have contracts with the U.S. government, associations, retailers, industrial businesses, professionals and their firms, business executives, investors, and consumers. The company serves the Northern Virginia s uburbs of Washington, D.C. consisting of Arlington, Fairfax, Fauquier, Loudoun, Prince William, Spotsylvania, and Stafford Counties; the cities of Alexandria, Fairfax, Falls Church, Fredericksburg, Manassas, and Manassas Park; and the Washington, D.C., as well as the nearby Maryland counties of Montgomery and Prince Georges. It operates through 28 branch offices, 1 residential mortgage office, and 1 investment services office. The company was founded in 1988 and is headquartered in Arlington, Virginia.

Hot Financial Stocks To Invest In Right Now: Federal Home Loan Mortgage Corp (FMCC.OB)

Federal Home Loan Mortgage Corporation (Freddie Mac) conducts business in the United States residential mortgage market and the global securities market. The Company operates in three segments: Single-family Guarantee, Investments, and Multifamily. The Single-family Guarantee segment reflects results from the Company's single-family credit guarantee activities. The Investments segment reflects results from the Company's investment, funding and hedging activities. The Multifamily segment reflects results from the Company's investment (both purchases and sales), securitization, and guarantee activities in multifamily mortgage loans and securities. The Company conducts its operations in the United States and its territories.

Single-Family Guarantee Segment

In the Company�� Single-family Guarantee segment, it purchases single-family mortgage loans originated by the Company�� seller/servicers in the primary mortgage market. The Company uses the mortgage securitization process to package the purchased mortgage loans into guaranteed mortgage-related securities. The Company guarantees the payment of principal and interest on the mortgage-related security in exchange for management and guarantee fees. The Company�� customers are lenders in the primary mortgage market that originate mortgages for homeowners. These lenders include mortgage banking companies, commercial banks, savings banks, community banks, credit unions, Housing Finance Agency (HFAs), and savings and loan associations. The Company�� customers also service loans in its single-family credit guarantee portfolio.

Mortgage securitization is a process, by which the Company purchase mortgage loans that lenders originate, and pool these loans into mortgage securities that are sold in global capital markets. The United States residential mortgage market consists of a primary mortgage market that links homebuyers and lenders and a secondary mor tgage market that links lenders and investors. The Company ! p! articipates in the secondary mortgage market by purchasing mortgage loans and mortgage-related securities for investment and by issuing guaranteed mortgage-related securities. In the Single-family Guarantee segment, it purchase and securitize single-family mortgages, which are mortgages that are secured by one- to four-family properties. The types of mortgage-related securities it issue and guarantee include PCs, REMICs and Other Structured Securities and Other Guarantee Transactions. The Company also issue mortgage-related securities to third parties in exchange for non-Freddie Mac mortgage-related securities. The non-Freddie Mac mortgage-related securities are transferred to trusts that were specifically created for the purpose of issuing securities, or certificates, in the Other Guarantee Transactions.

Investments Segment

In the Company�� Investments segment, it invests principally in mortgage-related securities and single-family performing mor tgage loans, which are funded by other debt issuances and hedged using derivatives. In the Company�� Investments segment, it also provides funding and hedging management services to the Single-family Guarantee and Multifamily segments. The Company�� customers for its debt securities predominantly include insurance companies, money managers, central banks, depository institutions, and pension funds. The Company funds its investment activities by issuing short-term and long-term debt. The Company�� PCs are an integral part of its mortgage purchase program. The Company�� Single-family Guarantee segment purchases many of its mortgages by issuing PCs in exchange for those mortgage loans in guarantor swap transactions. The Company also issue PCs backed by mortgage loans that it purchased for cash.

Multifamily Segment

The Company�� multifamily segment issues Other Structured Securities, but does not issue REMIC securities. The Company multifamil y segment also enters into other guarantee commitments ! for m! ul! tifamil! y HFA bonds and housing revenue bonds held by third parties. The Company acquires a portion of its multifamily mortgage loans from several large seller/servicers.

The Company competes with Federal National Mortgage Association (Fannie Mae), Government National Mortgage Association (Ginnie Mae), Mae Federal Housing Administration/the United States Department of Veteran Affairs (FHA/VA) and Federal Home Loan Bank (FHLB).

Hot Financial Stocks To Invest In Right Now: Federal Home Loan Mortgage Corp (FMCC)

Federal Home Loan Mortgage Corporation (Freddie Mac) conducts business in the United States residential mortgage market and the global securities market. The Company operates in three segments: Single-family Guarantee, Investments, and Multifamily. The Single-family Guarantee segment reflects results from the Company's single-family credit guarantee activities. The Investments segment reflects results from the Company's investment, funding and hedging activities. The Multifamily segment reflects results from the Company's investment (both purchases and sales), securitization, and guarantee activities in multifamily mortgage loans and securities. The Company conducts its operations in the United States and its territories.

Single-Family Guarantee Segment

In the Company�� Single-family Guarantee segment, it purchases single-family mortgage loans originated by the Company�� seller/servicers in the primary mortgage market. The Company uses the mortgage securitization process to package the purchased mortgage loans into guaranteed mortgage-related securities. The Company guarantees the payment of principal and interest on the mortgage-related security in exchange for management and guarantee fees. The Company�� customers are lenders in the primary mortgage market that originate mortgages for homeowners. These lenders include mortgage banking companies, commercial banks, savings banks, community banks, credit unions, Housing Finance Agency (HFAs), and savings and loan associations. The Company�� customers also service loans in its single-family credit guarantee portfolio.

Mortgage securitization is a process, by which the Company purchase mortgage loans that lenders originate, and pool these loans into mortgage securities that are sold in global capital markets. The United States residential mortgage market consists of a primary mortgage market that links homebuyers and lenders and a secondary mortgage market that links lenders and investors. The Company part! icipates in the secondary mortgage market by purchasing mortgage loans and mortgage-related securities for investment and by issuing guaranteed mortgage-related securities. In the Single-family Guarantee segment, it purchase and securitize single-family mortgages, which are mortgages that are secured by one- to four-family properties. The types of mortgage-related securities it issue and guarantee include PCs, REMICs and Other Structured Securities and Other Guarantee Transactions. The Company also issue mortgage-related securities to third parties in exchange for non-Freddie Mac mortgage-related securities. The non-Freddie Mac mortgage-related securities are transferred to trusts that were specifically created for the purpose of issuing securities, or certificates, in the Other Guarantee Transactions.

Investments Segment

In the Company�� Investments segment, it invests principally in mortgage-related securities and single-family performing mortgage loans, which are funded by other debt issuances and hedged using derivatives. In the Company�� Investments segment, it also provides funding and hedging management services to the Single-family Guarantee and Multifamily segments. The Company�� customers for its debt securities predominantly include insurance companies, money managers, central banks, depository institutions, and pension funds. The Company funds its investment activities by issuing short-term and long-term debt. The Company�� PCs are an integral part of its mortgage purchase program. The Company�� Single-family Guarantee segment purchases many of its mortgages by issuing PCs in exchange for those mortgage loans in guarantor swap transactions. The Company also issue PCs backed by mortgage loans that it purchased for cash.

Multifamily Segment

The Company�� multifamily segment issues Other Structured Securities, but does not issue REMIC securities. The Company multifamily segment also enters into other guarantee commitments for mult! ifamily H! FA bonds and housing revenue bonds held by third parties. The Company acquires a portion of its multifamily mortgage loans from several large seller/servicers.

The Company competes with Federal National Mortgage Association (Fannie Mae), Government National Mortgage Association (Ginnie Mae), Mae Federal Housing Administration/the United States Department of Veteran Affairs (FHA/VA) and Federal Home Loan Bank (FHLB).

Advisors' Opinion:

• [By Lauren Pollock]

  Wells Fargo(WFC) & Co. settled with the Federal Housing Finance Agency for allegedly misleading disclosures on mortgage securities the bank sold to Fannie Mae(FNMA) (FNMA) and Freddie Mac(FMCC) (FMCC), according to people familiar with the matter.

• [By Shayndi Raice]

  The Department of Justice and Bank of America(BAC) will go head-to-head Tuesday morning as the government attempts to hold the bank liable for allegedly misrepresenting the quality of loans sold to mortgage-finance firms Fannie Mae(FNMA) and Freddie Mac(FMCC).

Hot Financial Stocks To Invest In Right Now: Indl Alliance Ins Com Npv(IAG.TO)

Industrial Alliance Insurance and Financial Services Inc., a life and health insurance company, engages in the provision of various insurance products, savings and retirement plans, and other financial products and services in the United States and Canada. The company offers various individual products and services, such as insurance products comprising life insurance, health insurance, disability insurance, and mortgage insurance products; and wealth management products, including registered retirement savings plans, non-registered retirement savings plans, registered education savings plans, tax free savings accounts, registered retirement income funds, life annuities, and fixed-term annuities, as well as segregated funds, mutual funds, and securities. It also provides various group insurance products consisting of employee plans, such as life and health insurance, accidental death and dismemberment, dental care insurance, short and long-term disability insurance, critic al illness insurance, home care insurance, and medical insurance; and creditor insurance products, such as life, disability, and critical illness insurance products to automobile and other motor vehicle dealers, and financial institutions. In addition, the company provides accidental death and dismemberment insurance, and other specialized insurance products to employers and associations, as well as travel and health insurance, and term life insurance to alumni associations and other affinity groups. Further, it offers mutual fund management, mutual fund brokerage, securities brokerage, trust services, investment management, and financial services brokerage. The company was formerly known as Industrial-Alliance Life Insurance Company and changed its name to Industrial Alliance Insurance and Financial Services Inc. in 2000. Industrial Alliance Insurance and Financial Services Inc. was founded in 1892 and is headquartered in Quebec City, Canada.

Hot Financial Stocks To Invest In Right Now: Nuveen Tax-Advantaged Total Return Strategy Fund (JTA)

Nuveen Tax-Advantaged Total Return Strategy Fund operates as a diversified and closed-end management investment company. The fund primarily invests in dividend-paying common stocks. It also invests in senior loans, U.S corporate bonds, notes and debentures, convertible debt securities, as well as high yield debt securities. Its portfolio primarily includes investments in oil and gas, diversified telecommunication, services, diversified financial services, tobacco, insurance, aerospace and defense, metals and mining, commercial banks, electric utilities, thrifts and mortagage finance, and paper and forest product sectors. Nuveen Tax-Advantaged Total Return Strategy Fund was organized in 2003 and is based in Chicago, Illinois.

Advisors' Opinion:

• [By Dividends4Life]

  According to a Gabelli Funds report, managed distribution policies offer several advantages, including:1. Lower difference between the fund�� market price and its NAV per share.2. Provides support during periods when the stock market is in a decline.3. Provides a measurable performance target for the investment adviser.Below are several high-yield funds from CEFA that have a managed distribution policy (yields as of December 16):Aberdeen Australia Eqty (IAF)- Distribution Yield: 10.4%- Income Yield: 3.46%Bexil Advisers LLC� (DNI)- Distribution Yield: 11.1%- Income Yield: 3.56%BlackRock En Capital&Inc (CII)- Distribution Yield: 8.78%- Income Yield: 2.34%Cornerstone Strat Value (CLM)- Distribution Yield: 18.77%- Income Yield: 1.83%Cornerstone Total Return (CRF)- Distribution Yield: 19.10%- Income Yield: 0.85%Delaware Inv Div & Inc (DDF)- Distribution Yield: 6.70%- Income Yield: 5.26%Gabelli Equity Trust (GAB)- Distribution Yield: 7.58%- Income Yield: 1.54%Gabelli Utility Trust (GUT)- Distribution Yield: 9.45%- Income Yield: 2.84%MFS Special Value Trust (MFV)- Distribution Yield: 9.60%- Income Yield: 5.73%Nuveen Tx-Adv TR Strat (JTA)- Distribution Yield: 6.70%- Income Yield: 3.12%TCW Strategic Income (TSI)- Distribution Yield: 10.54%- Income Yield: 7.88%Zweig Total Return (ZTR)- Distribution Yield: 7.27%- Income Yield: 1.95%As noted in the Gabelli report, a managed distribution policy may create confusion regarding the true current yield since the reported yield includes the return of capital portion. You can see the disparity above between the income yield and the distribution (reported) yield.If you are looking for a sustainable and growing dividend, you may want to consider some blue-chip dividend stocks such as these with a Free Cash Flow Payout less than 50%, 50+ years of consecutive dividend increases and a 2%+ yield:3M Co. (MMM) is a diversified global company provides enhanced product functionality in electronics, health care, industrial, consumer

Andy Friedman on How to Handle Health Care Reform

President Barack Obama’s health care reform law, which takes effect Jan. 1, 2014, does not include a new government-run health plan–as most Americans erroneously believe–rather it seeks to ensure that virtually every American has health care coverage, and businesses and individuals have decisions to make, says analyst Andy Friedman of The Washington Update in his latest white paper, “Health Care Reform Takes Effect: What Choices do Businesses and Individuals Have?”

The latest research by the Congressional Budget Office estimates that the ACA will shrink the number of uninsureds by about half, from 60 million to 30 million, Friedman notes.

This reduction, he says, “will come at a cost to both the government and to affluent Americans,” as “a portion of the cost is funded by a new 3.8% tax on investment income received by families with adjusted gross income above $250,000.” The remaining cost “must be recouped through spending cuts–the law seeks to implement cuts in Medicare reimbursement amounts–additional taxes, or new government borrowing.”

In his paper, Friedman warns that, first and foremost, the Affordable Care Act–commonly referred to as Obamacare–is “complex,” and that businesses and individuals should consult with a financial advisor or qualified attorney to determine how the law impacts their specific circumstances.

But Friedman says that while the health care reform law is “massive,” at its core are five major initiatives that seek to ensure Americans have health care coverage:

Friedman notes that whether the mandates work to ensure that Americans have health insurance “will depend on the extent to which employers and individuals comply.”

For example, he says, an employer can avoid the mandate in three ways:

Because time is of the essence, Friedman says that businesses must decide whether to provide employee insurance coverage in 2014, and, if so, whether also to provide family coverage.

Businesses, he says, “should also consider whether to scale back (or not increase) number of employees or hours for part time employees before the employer mandate becomes enforceable in 2015.”

For individuals, Freidman says that those who are not eligible to receive coverage from employers or under Medicare or Medicaid must decide by Jan. 1 whether to purchase coverage on the exchanges (perhaps with benefit of a subsidy) or allow the IRS to reduce tax refunds they would otherwise receive by the amount of the penalty for failing to do so.

“But young and healthy workers might choose to pay the penalty rather than purchase insurance,” he adds, as the maximum penalty is $2085 per family or 2.5% of taxable income, whichever is greater.”

Moreover, he says, “the IRS, which is charged with collecting the penalty, can do so only by a reducing a tax refund otherwise due. Thus, the penalty cannot be collected from people who pay no income tax (or who do not overpay their tax through estimated payments).”

Astrology-Based Investment Ponzi Scheme Lands Man in Prison

Education Images/UIG via Getty Images Divining market movement on moon motion might not work. Gurudeo "Buddy" Persaud of Orlando gave it a go and is now facing three years in federal prison. Last year, the Securities and Exchange Commission charged the ex-broker with defrauding investors through an astrology-based Ponzi scheme that bilked clients out of nearly $1 million. In a plea agreement, Persaud was sentenced to prison this week for mail fraud and ordered to pay $948,340.00 in restitution. According to the plea agreement and the SEC's complaint, Persaud was working as a registered representative at a Florida-based broker-dealer but separately formed White Elephant Trading Company LLC in 2007. Persaud pitched investors a "safe" and guaranteed return of between 6% and 18% by investing in stocks, futures, real estate markets and notes. He apparently failed to mention to clients that his trading strategy was based on lunar cycles and the gravitational pull between the moon and the Earth. According to the SEC, Persaud believed that the gravitational pull between the moon and Earth affects human behavior, which in turn impacts the stock markets. For example, Persaud believed that when the moon is positioned in a manner that exerts a greater gravitational pull on human beings, they feel down and are therefore more inclined to sell securities in the markets.

Hot Performing Stocks To Watch Right Now

The S&P 500 Index (SNPINDEX: ^GSPC  ) ended the day and the week on a higher note, logging its third straight week of gains, as the bull market in equities continues. The index added seven points, or 0.4%, to end at 1,633. Still, a few S&P companies managed to disappoint the market, and their shortcomings were reflected in their outsized losses today.�

Just a few days after Cognizant Technology Solutions� (NASDAQ: CTSH  ) �reported earnings that sent shares in�the IT and consulting company�up�5%, the stock slipped 5%. To be fair to Cognizant, the stumble may be more due to political happenings than anything it's done wrong. An immigration reform bill in the Senate, considered a potential boon to the technology sector, is very unlikely to make it through the House of Representatives. As Cognizant President Gordon Coburn remarked in the earnings call, this is according to the very Senator who authored the bill.

Oil refiner Tesoro (NYSE: TSO  ) lost 2.9% today, on a day when the oil and gas sector, as a whole, was the worst performing of the 10 major sectors. Tesoro is reeling from a recent shutdown in a Washington state refinery earlier this week after a leak was discovered. Thankfully, the issue has been resolved, but the 125,000-barrel-per-day refinery lost some meaningful business in the process.

Hot Performing Stocks To Watch Right Now: FutureFuel Corp. (FF)

FutureFuel Corp., through its subsidiary, FutureFuel Chemical Company, engages in the manufacture and sale of specialty chemicals and bio-based products primarily in the United States. The company operates in two segments, Chemicals and Biofuels. The Chemicals segment provides custom chemical manufacturing services for specific customers, such as bleach activators for detergent and consumer products manufacturers; proprietary herbicide and intermediates for life sciences companies; agrochemicals; and industrial and consumer products, such as cosmetics and personal care products, ink colorants, adhesion promoters, polymer additives, polymer and specialty dyes, specialty polymers, photographic and imaging chemicals, and food additives. This segment also manufactures and sells a range of performance chemicals, including a family of polymer (nylon) modifiers and small-volume specialty chemicals for various applications; a family of acetal-based solvents, consisting of diethoxy methane, dimethoxymethane, dibutoxymethane, and glycerol formal; and phenol sulfonic acid that build on sulfonations technology. Its chemical products are used in various markets and end uses, including detergents, agrochemicals, automotive, photographic imaging, coatings, nutrition, and polymer additives. The Biofuels segment produces and sells biodiesel, as well as petrodiesel in blends with or without biodiesel. This segment also operates a granary in central Arkansas that involves in the purchase and sale of agricultural commodities, primarily soybeans, rice, and corn. This segment markets its biodiesel products by truck and rail directly to customers. FutureFuel Corp. was formerly known as Viceroy Acquisition Corporation and changed its name to FutureFuel Corp. in 2006. FutureFuel Corp. was incorporated in 2005 and is based in St. Louis, Missouri.

Advisors' Opinion:

• [By Maxx Chatsko]

  3. Focus on efficiency
  A combination of factors plays a role in efficiently producing biodiesel. FutureFuel (NYSE: FF  ) , which owns an annual capacity of 59 million gallons to complement its niche chemical business, relies heavily on location. The company's two biorefineries don't have a nationwide infrastructure to aid in getting product to the market and are dependent on rail and barge access. Despite the FutureFuel's amazing progress is improving its process -- annual capacity jumped from just 35 million gallons in 2011 to 59 million gallons today -- the company admits that its relatively small operations may cease to exist given changes in feedstock prices, government mandates, and tax credits. �

Hot Performing Stocks To Watch Right Now: Teekay Corporation(TK)

Teekay Corporation engages in the marine transportation of crude oil and gas in Bermuda and internationally. Its Shuttle Tanker and FSO segment operates shuttle tankers, and floating storage and off-take (FSO) units for offloading and transportation of cargo from oil field installations to onshore terminals; and provides floating storage services for oil field installations. The company?s FPSO segment provides floating production, processing, and storage services through floating production, storage, and offloading (FPSO) units. Its Liquefied Gas segment comprises liquefied natural gas (LNG) and liquefied petroleum gas carriers. The company?s Conventional Tanker segment operates conventional crude oil and product tankers that are employed on long-term fixed-rate time-charter contracts. As of December 31, 2010, its fleet consisted of 151 vessels, including 11 vessels under construction. The company serves energy and utility companies, oil traders, oil and LNG consumers, p etroleum product producers, government agencies, and various other entities that depend upon marine transportation. Teekay Corporation was founded in 1973 and is headquartered in Vancouver, Canada.

Top Tech Companies To Invest In 2014: Kilo Goldmines Ltd (KGL.V)

Kilo Goldmines Ltd., a development stage company, engages in the exploration and development of gold properties in the Democratic Republic of Congo. The company holds interests in 3 joint ventures in a land package totaling approximately 7,000 square kilometers located in the Archaean Kabalian greenstone geological formation primarily in the Orientale province. It also explores for iron ores. The company is headquartered in Toronto, Canada.

Hot Performing Stocks To Watch Right Now: Ocean Wilson Hdg(OCN.L)

Ocean Wilsons Holdings Limited, through its subsidiaries, provides maritime and logistics services in Brazil. The company offers maritime services, which include harbor and ocean towage, container terminal operation, offshore support, logistics, small vessel construction, and ship agency services. It operates port terminals, which offer assistance in port operations for loading and unloading of vessels, storage, and auxiliary services, as well as provides platform supply vessels to transport equipment and supplies to and from offshore oil and gas installations. The company also provides harbor and ocean towage, salvage support, and maritime support to the offshore oil and gas industry, as well as various logistics services, such as storage, customs storage, distribution, highway transportation, multimodal transportation, and non vessel operating common carrier services. In addition, it operates a ship agency that provides commercial representation, cargo documentation, con tainer control, and vessel support services for ship owners; and holds a portfolio of international investments. The company has operations in Bermuda, Brazil, and the United Kingdom. Ocean Wilsons Holdings Limited is based in Hamilton, Bermuda.

Hot Performing Stocks To Watch Right Now: LightPath Technologies Inc.(LPTH)

LightPath Technologies, Inc. engages in the design, development, manufacture, and distribution of optical components and assemblies in the United States and internationally. It offers precision molded glass aspheric optics, precision molded infrared molder optics, isolators, proprietary fiber-optic collimators, GRADIUM glass lenses, and other optical materials used to produce products that manipulate light. The company?s products are used for various applications in industries comprising defense products, medical devices, laser aided industrial tools, automotive safety applications, barcode scanners, optical data storage, hybrid fiber coax datacom, telecom, machine vision, and sensors. It sells its products through direct sales force, distributors and channel partners, catalog distributors, and own catalog and Internet site. The company was founded in 1985 and is headquartered in Orlando, Florida.

Hot Performing Stocks To Watch Right Now: Newstrike Resources Ltd. (NR.V)

Newstrike Resources Ltd., an early stage exploration company, engages in the acquisition and exploration of precious and base metal properties in Canada. It principally explores for gold ores. The company holds interests in the Amalgamated Commodore property located in the Kirkland Lake region of Ontario; and the Swansea property situated in the Larder Lake area of Ontario. It also has interest in an oil and gas exploration project consisting of approximately 1,600 acres of crown and freehold mineral leases near the town of Camrose, Alberta. The company was formerly known as Newbliss Resources Ltd. and changed its name to Newstrike Resources Ltd. in January 2005. Newstrike Resources Ltd. was founded in 2004 and is based in Toronto, Canada.

Hot Performing Stocks To Watch Right Now: Sonic Foundry Inc.(SOFO)

Sonic Foundry, Inc., a Web communications technology company, provides Webcasting, lecture capture, and knowledge management solutions for higher education institutions, businesses, and government agencies worldwide. The company offers Mediasite, a Web communication and content management system that automates and Webcasts lectures and presentations. Its solutions include Mediasite Recorders for capturing multimedia presentations; Mediasite EX Server platform for streaming, archiving, and managing online presentation content; Mediasite Events for turnkey meeting, conference, and event Webcasting services based on the Mediasite platform; Mediasite Services for hosting, installation, training, and custom development; Mediasite Customer Assurance for annual hardware and software maintenance, and technical support. The company sells and markets its products through a sales force that manages a channel of value-added resellers, system integrators, consultants, and distributors. Sonic Foundry, Inc. was founded in 1991 and is headquartered in Madison, Wisconsin.

Hot Performing Stocks To Watch Right Now: LyondellBasell Industries NV(LYB)

LyondellBasell Industries N.V. manufacturers and sells chemicals and polymers, refines crude oil, produces gasoline blending components, and develops and licenses technologies for production of polymers. The company?s Olefins and Polyolefins segment offers olefins, including ethylene, propylene, and butadiene; aromatics, such as benzene and toluene; polyolefins, which comprise polypropylene (PP), high-density polyethylene, low-density polyethylene, and linear low-density polyethylene; specialty polyolefins, including catalloy process resins, PP compounds, and polybutene-1 resins; and ethylene derivatives, which comprise ethanol. Its Intermediates and Derivatives segment provides propylene oxide (PO); PO co-products, including styrene monomers and TBA derivative isobutylene; PO derivatives, such as propylene glycol, propylene glycol ethers, and butanediol; acetyls, such as methanol, acetic acid, and vinyl acetate monomers; ethylene derivatives, which comprise ethylene oxide , ethylene glycol, and ethylene glycol ethers; and flavor and fragrance chemicals. The company?s Refining and Oxyfuels segment offers gasoline and components, ultra low sulfur diesel, jet fuel, and lube oils; diesel, feedstock, fuel oil, gasoline, and bitumen; and gasoline blending components, including methyl tertiary butyl ether, ethyl tertiary butyl ether, and alkylate. Its Technology segment develops and licenses polyolefin and other process technologies. This segment also develops, manufactures, and sells polyolefin catalysts, as well as provides technology services, which comprise safety reviews, training and start-up assistance, engineering services for process and product improvements, and manufacturing troubleshooting. LyondellBasell Industries N.V. has operations in the Americas, Europe, Asia, and internationally. The company was founded in 2005 and is based in Rotterdam, Netherlands. LyondellBasell Industries N.V. is a subsidiary of Prochemie GmbH.

Advisors' Opinion:

• [By Lu Wang]

  Bulls say stocks such as Freeport-McMoRan Copper & Gold Inc., DuPont Co. (DD) and LyondellBasell Industries NV (LYB) will continue to rebound as manufacturing expands in China, Europe and the U.S., spurring the fastest profit growth in three years for raw-material producers. Bears says the gains will be short-lived because the commodities super cycle is over and demand for metals and chemicals isn�� growing fast enough at a time when everything from copper to nickel and corn head into surpluses in the next year.

• [By Taylor Muckerman]

  Along with Dow, DuPont (NYSE: DD  ) and LyondellBasell (NYSE: LYB  ) are two companies that have used this access to their advantage. All three will be reporting earnings this week. Motley Fool analyst Taylor Muckerman expects margins to remain relatively high, but the growth we have seen over the past few years might begin to slow. In addition, he touches on some of the future market dynamics that will likely roll out as the available infrastructure continues to increase. Details can be found in the video below.

• [By Tyler Crowe]

  This cheap feedstock has sent production up over one-third in the past five years, and has given a nice pad to chemical company earnings. LyondellBassell (NYSE: LYB  ) reported that 2012 was a record year in terms of earnings despite a 6% drop in revenue. These kinds of results have resulted in a mad rush to increase�capacity. The entire industry has plans to spend about $30 billion in new plants to take advantage of cheap feedstock. Dow personally is looking to invest $1.7 billion to build what would be the company's largest ethylene facility and would increase the company's ethylene capacity by 1.5 million tons per year. With so much invested in cheap natural gas, it should come as no surprise that the company will look to protect that position for as long as possible.�

DOL Fiduciary Plan Raises Concern of Democratic Coalition

Members of the New Democratic Coalition told Labor Secretary Thomas Perez Monday that they would like to “establish a dialogue” with him to discuss their concerns about DOL’s re-release later this year of its rule to amend the definition of fiduciary under ERISA.

In the Monday letter to Perez, signed by 30 House Democrats, the coalition noted Perez’s “commitment to the work with the Hill” on DOL’s fiduciary project during this confirmation hearing, and said that given the Coalition’s “history with respect to the Dodd-Frank Act and the fiduciary issue,” the members would like to discuss “two core concerns” they have about the DOL’s fiduciary redraft.

First, they said, “we continue to believe that any new definition should not limit access to investment education and information.” While the original rule released in 2010 would have “had little effect on wealthy investors or large businesses, it inadvertently could have significantly restricted the availability of investment advice to low- and middle-income individuals and small businesses.”

The original rule could have also “created problems under existing prohibited transaction rules and limited plan participants’ access to investment advice even when it was in their best interest,” the coalition members wrote. “We ask you to work with us to ensure that any reproposal does not have similar effects."

DOL is expected to release its revised plan in August.

The coalition also pointed to the need for “coordination with other regulators to ensure that all regulatory efforts with respect to the fiduciary standards work together in a way that serves retirement savers effectively.”

A "key objective" of Dodd-Frank with respect to fiduciary standards, the coalition said, "was to protect investors while reducing confusion." This "should be an important consideration in the department's coordination with other regulators."

---

Check out Biggest Uncertainty for Retirement Advisors: What Will Fiduciary Look Like? on ThinkAdvisor.

Hot Small Cap Companies To Own For 2014

Small cap Sodastream International Ltd (NASDAQ: SODA), an Israeli based developer, manufacturer and marketer of�home beverage carbonation systems, has attracted its share of hype over both its products and its stock, but could other small cap water stocks like Primo Water Corporation (NASDAQ: PRMW), Puresafe Water Systems Inc (OTCMKTS: PSWS) and Alkaline Water Company Inc (OTCBB: WTER) attract a similar following? After all, Sodastream International has managed to create a significant amount of buzz from consumers, investors and even short sellers because it�� the�world's largest manufacturer, distributor and marketer of home carbonation systems as its�brands are sold in over 60,000 retail stores in 45 countries. Sodastream International is also up 45.7% since the start of the year, up 70.2% over the past year and up 99.3% since November 2010, but shares did spike up to the $75 level in the middle of 2011 and now trade at the $63 level.

Hot Small Cap Companies To Own For 2014: FuelCell Energy Inc.(FCEL)

FuelCell Energy, Inc., together with its subsidiaries, engages in the development, manufacturing, and sale of high temperature fuel cells for clean electric power generation primarily in South Korea, the United States, Germany, Canada, and Japan. The company offers proprietary carbonate Direct FuelCell Power Plants that electrochemically produce electricity from hydrocarbon fuels, such as natural gas and biogas. Its fuel cells operate on a range of hydrocarbon fuels, including natural gas, renewable biogas, propane, methanol, coal gas, and coal mine methane. The company also develops carbonate fuel cells, planar solid oxide fuel cell technology, and other fuel cell technologies. It provides its products to universities; manufacturers; mission critical institutions, such as correction facilities and government installations; hotels; and natural gas letdown stations, as well as to customers who use renewable biogas for fuel, including municipal water treatment facilities, br eweries, and food processors. The company was founded in 1969 and is headquartered in Danbury, Connecticut.

Advisors' Opinion:

• [By Bryan Murphy]

  Had shares of its peers and competitors performed as well, it may not even be worth bringing up. But, Plug Power Inc. (NASDAQ:PLUG) shares have done significantly better than FuelCell Energy Inc. (NASDAQ:FCEL) and Ballard Power Systems Inc. (NASDAQ:BLDP) since the end of March. And, PLUG has performed considerably better than FCEL and BLDP have since mid-August. This is more than "just a little volatility." This is a leader breaking away from the pack after a very long lull. Thing is, there's plenty more room for Plug Power to keep running.

Hot Small Cap Companies To Own For 2014: Panera Bread Company(PNRA)

Panera Bread Company, together with its subsidiaries, owns, operates, and franchises retail bakery-cafes in the United States and Canada. Its bakery-cafes offer fresh baked goods, sandwiches, soups, salads, custom roasted coffees, and other complementary products, as well as provide catering services. The company also manufactures and supplies dough and other products to company-owned and franchise-operated bakery-cafes. As of March 29, 2011, it owned and franchised 1,467 bakery-cafes under the Panera Bread, Saint Louis Bread Co., and Paradise Bakery & Cafe names. The company was founded in 1981 and is based in St. Louis, Missouri.

Advisors' Opinion:

• [By BubbleBustInvesting]

  Three popular franchises, Panera Bread (PNRA), Dunkin' Brands (DNKN), and Starbucks (SBUX) are reporting Q1 earnings this week. Analysts expect Panera Bread to report earnings in the range of $1.68 to $1.58; Dunkin Brands in the range of 0.32 50 0.28; and Starbucks in the range of 0.52 to 0.47.

• [By WALLSTCHEATSHEET.COM]

  Now that Panera has become a mainstream American brand with millions of loyal customers that enjoy one of the most casual and comfortable atmospheres available,��it�� a long-term OUTPERFORM. However, a tentative consumer, a somewhat poor valuation, and an artificially-inflated stock market are reasons�for caution.

• [By Dan Caplinger]

  Perhaps most importantly, Chipotle's healthy-eating concept is easily duplicable. Already, Panera Bread (NASDAQ: PNRA  ) has made its own inroads into providing healthier fare, using the opportunity to bolster its own growth and expand beyond its initial food offerings. Yum! Brands' Taco Bell division may never be the competitor that David Einhorn thinks it will be, but as less bargain-conscious restaurants see that the healthy trend will continue, Chipotle won't have the burrito market to itself forever.

Top Oil Stocks To Watch Right Now: Achillion Pharmaceuticals Inc.(ACHN)

Achillion Pharmaceuticals, Inc., a biopharmaceutical company, engages in the discovery, development, and commercialization of treatments for infectious diseases. The company focuses on the development of antivirals for the treatment of chronic hepatitis C; and the development of antibacterials for the treatment of resistant bacterial infections. Its drug candidates for the treatment of chronic HCV include ACH-1625, a protease inhibitor, which is in phase IIa clinical trial for the treatment of chronic HCV; ACH-2684, a pangenotypic protease inhibitor, which is in phase I clinical trial for the treatment of chronic HCV infection; and NS5A inhibitors for the treatment of chronic HCV infection, including ACH-2928, which is to enter a phase I clinical trial, as well as various additional NS5A inhibitors in preclinical development. Its pipeline of product candidates also includes ACH-702 and ACH-2881 for drug resistant bacterial infections; elvucitabine for HIV infection; and AC H-1095 for HCV infection. The company was founded in 1998 and is based in New Haven, Connecticut.

Advisors' Opinion:

• [By Keith Speights]

  Liver quivers
  Achillion Pharmaceuticals (NASDAQ: ACHN  ) ranks as the top drop of the week. Shares plunged 24% on news that the Food and Drug Administration placed a clinical hold on experimental hepatitis C drug�sovaprevir.

Hot Small Cap Companies To Own For 2014: KongZhong Corporation(KONG)

KongZhong Corporation, together with its subsidiaries, provides wireless interactive entertainment, media, and community services to mobile phone users in the People's Republic of China. It also involves in the development, distribution, and marketing of consumer wireless value-added services, including wireless application protocol, multimedia messaging services, short messaging services, interactive voice response services, and color ring back tones. In addition, it offers interactive entertainment services, such as mobile games, pictures, karaoke, electronic books, mobile phone personalization features, entertainment news, chat, and message boards; and through Kong.net offer news, community services, games, and other interactive media and entertainment services; and sells advertising space in the form of text-link, banner, and button advertisements. Further, the company develops and publishes mobile games, including downloadable mobile games and online mobile games cons isting of action, role-playing, and leisure games. As of December 31, 2009, it had a library of approximately 300 internally developed mobile games. Additionally, it develops online games; and provides consulting and technology services, as well as media and net book services. The company was formerly known as Communication Over The Air Inc. and changed its name to KongZhong Corporation in March 2004. KongZhong Corporation was founded in 2002 and is headquartered in Beijing, the People?s Republic of China

Advisors' Opinion:

• [By Seth Jayson]

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

• [By Roberto Pedone]

  One under-$10 wireless services player that looks poised for a big spike higher is KongZhong (KONG), which is a provider of WVAS and mobile games to mobile phone users and a wireless media company providing news, content, community and mobile advertising services through its wireless Internet sites in the PRC. This stock is off to a hot start in 2013, with shares up sharply by 53%.

  If you take a look at the chart for KongZhong, you'll notice that this stock has been downtrending badly for the last two months, with shares plunging lower from its high of $14.92 to its recent low of $7.78 a share. During that downtrend, shares of KONG have been consistently making lower highs and lower lows, which is bearish technical price action. That move has now pushed shares of KONG into oversold territory, since its current relative strength index reading is 30.21. Shares of KONG are now starting to spike higher off its recent low of $7.78 a share and off its 200-day moving average of $7.95 a share. This spike could be signaling that the downside volatility for KONG is over in the short-term and the stock is ready to trend higher.

  Traders should now look for long-biased trades in KONG if it manages to break out above some near-term overhead resistance at $8.50 a share with high volume. Look for a sustained move or close above that level with volume that hits near or above its three-month average action of 519,857 shares. If that breakout triggers soon, then KONG will set up to re-test or possibly take out its next major overhead resistance levels at $10 to its 50-day moving average at $11.33 a share.

  Traders can look to buy KONG off any weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support at $7.78 a share. One can also buy KONG off strength once it takes out $8.50 a share with volume and then simply use a stop that sits a comfortable percentage from your entry point.

Hot Small Cap Companies To Own For 2014: OCZ Technology Group Inc(OCZ)

OCZ Technology Group, Inc. designs, develops, manufactures, and distributes computer components for computing devices and systems worldwide. It primarily offers solid state drives, flash memory storage, memory modules, thermal management solutions, AC/DC switching power supply units, and computer gaming solutions. The company?s products are used in industrial equipment and computer systems; computer and computer gaming solutions; mission critical servers and high end workstations; personal computer (PC) upgrades to extend the useable life of existing PCs; high performance computing and scientific computing; video and music editing; home theatre PCs and digital home convergence products; and digital photography and digital image manipulation computers. OCZ Technology Group, Inc. offers its products to retailers, on-line retailers, original equipment manufacturers, systems integrators, and distributors. The company was founded in 2002 and is headquartered in San Jose, Califo rnia.

Advisors' Opinion:

• [By Rich Duprey]

  The not-so-great and wonderful OCZ
  There was no company-specific news that caused solid-state-drive maker OCZ Technology (NASDAQ: OCZ  ) to fall almost 8% Wednesday. But an article that appeared on Seeking Alpha �questioning whether the company had six months or less to live before it filed for bankruptcy seemed to coincide with its fall.