Why Ford Is Poised to Zoom Higher

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, U.S. auto giant Ford Motor (NYSE: F  ) has earned a respected four-star ranking.

With that in mind, let's take a closer look at Ford and see what CAPS investors are saying about the stock right now.

Ford facts

Headquarters (founded)	Dearborn, Mich. (1903)
Market Cap	$51.9 billion
Industry	Automobile manufacturers
Trailing-12-Month Revenue	$134.3 billion
Management	President/CEO Alan Mulally (since 2006) CFO Robert Shanks (since 2012)
Return on Capital (average, past 3 years)	4.3%
Cash/Debt	$24.4 billion / $105.1 billion
Dividend Yield	3%
Competitors	General Motors Honda Motor Toyota Motor

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 80% of the 12,126 members who have rated Ford believe the stock will outperform the S&P 500 going forward.

Just last month, one of those Fools, lepera347, tapped the stock as a particularly tempting value opportunity:

Why the market hates Ford is beyond me. Their financials are solid and auto sales in the US keep booming. Ford has made a huge investment in China, the world's largest car market, and Europe can only get better. Price should be double.

If you're concerned that Ford's turnaround has run its course, relax -- there's good reason to think that the Blue Oval still has big growth opportunities ahead. We've outlined those opportunities in detail, in the Fool's premium Ford research service. If you're looking for some freshly updated guidance to Ford's prospects in coming years, you've come to the right place -- click here to get started now.

Want to see how well (or not so well) the stocks in this series are performing? Follow the TrackPoisedTo CAPS account.

Charter urges TWC shareholders to reject Comcast…

Charter Communications, which lost to Comcast in a bid to buy competitor Time Warner Cable, hasn't given up.

In a proxy statement filed with the Securities and Exchange Commission Friday, the Stamford, Conn.-based pay-TV provider urged TWC shareholders to vote against TWC's plans to merge with Comcast in a $45 billion deal. Charter said its bid was competitive and warned TWC shareholders that a merger review involving Comcast could be prolonged and contains financial and operational risks.

TWC and Comcast announced on Feb. 13 that they've signed an agreement, in which Comcast pays 2.875 of its shares to TWC shareholders to combine the nation's two largest cable companies. The companies' respective board of directors approved the all-stock agreement, which then valued TWC shares at a value of $158.82 per share. Current TWC shareholders will own about 23% of Comcast's common stock if the deal is approved and closed.

"We are fully committed to our merger with Comcast, which we believe is in the best interests of shareholders," TWC said in a statement Friday.

Prior to the merger announcement, Charter sent a letter to TWC on Jan. 13 to propose a cash-and-stock transaction valued "in the low $130s for each share of TWC common stock," Charter said. In the Friday filing, Charter said Comcast's offer amounts to $141.16 per TWC share based on the closing price of Comcast stock on March 27.

With consumers' TV viewing habits evolving rapidly, cable companies are seeking to get larger in size and resources to push into new technology, gain leverage against content providers and retain pricing powers. John Malone, chairman of Liberty Media, the largest shareholder of Charter, has been pushing for an acquisition for years and was the chief catalyst in Charter's pursuit of TWC.

"Post-merger, Comcast would control nearly 40 percent of the broadband market, around 33 million TV subscribers and a major programmer in NBC Universal," Charter wrote, acknowledging Comcast's willingness to di! vest 3 million subscribers if the merger is approved.

Given the likely thorough review by federal regulators, the merger approval process may drag on to 2015 and TWC stockholders "bear the risk of TWC's operating results under the effects of a pending transaction," Charter wrote.

TWC's review of Comcast's bid also was "flawed" because of "the failure of the TWC board of directors to consider and investigate alternatives," Charter wrote. "The TWC board simply refused to meaningfully engage with Charter regarding a potential business combination even after deciding to pursue a transaction with Comcast."

The Comcast agreement "does not even include a regulatory breakup fee provision in the face of a hazardous regulatory process, and at the same time removes TWC's ability to explore other potential business combinations," it said.

Charter also urged TWC shareholders to more closely assess Comcast's commitment to divest 3 million subscribers to appease regulators. Comcast may sell the asset at a discount to speed the merger review, and any savings the combined company may squeeze from the integration may be offset by the sell-off, Charter said.

Expanding the Roth IRA Opportunity

Roth IRAs remain one of the most neglected tax and financial planning opportunities. Even many of those who convert their traditional IRAs to Roths don't take advantage of all the strategies available to maximize tax-free wealth.

It's understandable that people are slow to convert their traditional IRAs to Roths. There are many factors to evaluate to determine whether converting is the right move. I've discussed these factors in past issues of Retirement Watch and in my books, Personal Finance for Seniors for Dummies and The New Rules of Retirement.

Many people don't do the analysis and don't want to pay an advisor to do it. Too many prefer the basic "gut check," rules of thumb, or simple, intuitive analysis, the approach criticized in Daniel Kahneman's book, Thinking Fast, And Slow.

To streamline the analysis, consider using the formula offered by William Baldwin of Forbes. Baldwin says to multiply your portfolio's estimated rate of return by the tax rate on your portfolio and then by the number of years that will pass before you withdraw money from your converted IRA. He calls it RTN. You shouldn't convert if you expect your ordinary income tax rate to decline by more than the result of that formula from working years to retirement. Otherwise, conversion probably is a good idea.

Suppose you expect to earn 6% a year and pay a 20% tax rate for 15 years. Multiplied together, your RTN is about 18%. If you think your ordinary tax rate will decline by more than 18% in retirement from your pre-retirement rate, then you might not want to convert.

Converting to a Roth is almost a no-brainer in at least one situation. When you plan to leave all or most of your traditional IRA to heirs and use it only as emergency cash during your lifetime, conversion is a good idea. Your beneficiary will have a steady stream of lifetime tax-free income. You'll also increase the after-tax value ! of that inheritance by paying the taxes on the conversion. If your heirs inherited a traditional IRA they'd pay ordinary income taxes on all their distributions. By paying the taxes on the conversion you're essentially making a tax-free gift of all the future income taxes they would pay.

Paying taxes earlier instead of later, as required by an IRA conversion, goes against the instincts and learning of most people. But in many cases its pays off.

Once converting to a Roth IRA is deemed to be a good idea, you can make it even better by considering several strategies.

Regularly re-evaluate the decision. Many people who consider IRA conversions undertake the analysis once. After that, if conversion didn't seem a good idea, they don't reconsider.

That's too bad, because things change. Your income might decline. Or you might have a large business loss or other deduction to offset all or part of the converted amount. If a conversion isn't for you, try to figure out why. Then, when there's a specific change in circumstances you'll know if it makes sense to review the decision.

Those who decided to convert also need to review their decision, which we discuss later.

Consider how it affects other taxes. The converted amount is included in your gross income. It will increase your adjusted gross income. That means it could increase taxes on Social Security benefits, increase your Medicare premiums in two years, reduce itemized deductions and personal exemptions, and have other effects. These are likely to be marginal, short-term effects. But you should know about them before the conversion and realize they will be additional costs of the conversion.

Don't forget RMDs. If you're over age 70½ and required to take annual distributions, don't forget to take an RMD from the traditional IRA in the year of the conversion. You are required to take the RMD regardless of when during the year you convert the traditional IRA. Avoid being hit with the penalty and i! nterest b! y taking your RMD before converting the IRA.

Prepay the conversion taxes. You're required to prepay your taxes during the year through withholding and estimated tax payments. If you don't prepay on time, you'll owe a penalty either with your tax return or that the IRS will assess after you file. To ensure you prepay the right amount, check IRS Publication 505 and the instructions to Form 1040-ES.

Combine with charitable strategies. When you're charitably inclined, that inclination could pay for your Roth conversion while generating a stream of income. A large gift to charity or a charitable trust likely will generate a tax deduction to offset the income included from the conversion. It's best to donate appreciated property most of the time, but cash contributions generate benefits, too.

For example, you could create a charitable remainder trust and donate appreciated mutual funds to it. The trust begins paying you an annual income and manages the investments. You receive a charitable contribution deduction for a portion of the donation's value. Perhaps the donation will be enough to make the Roth conversion tax-free. You also could create a charitable lead trust that will pay income to the charity for a period of years and then return the remaining principal to you or your heirs. We don't have space to provide all the details of these strategies here, but discuss them with your estate planner if they seem like good ideas.

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Create multiple Roth IRA accounts. You can change your mind about a conversion. Changing back to a traditional IRA is known as a recharacterization. We'll discuss the details shortly, but one reason to recharacterize is that the IRA's value declined after the conversion. The conversion tax is based on the value of the converted amount on the day of the conversion. You still owe the same amount even if the IRA loses value.

It makes se! nse to se! t up a separate IRA for each different type of investment that you convert. (You're allowed an unlimited number of Roth IRA accounts.) When you convert into only one Roth IRA, then you recharacterize only if the entire IRA declines in value. You'll have paid taxes to convert some assets that lost value. But when each asset is converted into a separate Roth IRA, you can recharacterize any that decline and keep those that didn't. You can reconvert the others later.

When you convert into one Roth IRA, you can choose to recharacterize only a portion of it instead of all of it. But you can't recharacterize only the portion that declined in value. Instead, you use a formula from IRS regulations that effectively pro rates gains and losses in the total account between the recharacterization and the Roth IRA. It's more effective to convert initially each type of asset into a separate Roth IRA.

Here's a simple example.

Max Profits has $500,000 of equities and $500,000 of fixed income in his traditional IRA and converts all of it on January 30, 2014. His tax rate is 35%. On April 14, 2015, the stocks in the Roth IRA are valued at $300,000, and the bonds are valued at $600,000. Max wants to recharacterize an amount equal to the $300,000 value of the stocks.

Because Max converted the traditional IRA into one Roth IRA, under the formula in the IRS regulations the partial recharacterization of $300,000 would be treated as though he initially converted $666,666. He would owe a total tax on the conversion after recharacterization of $233,333 (as opposed to $350,000 on the initial conversion.)

But if Max had converted the stocks and bonds into separate Roth IRAs and then chose to recharacterize only the stocks Roth IRA, he would owe only taxes on convert-ing the bonds Roth IRA. The total tax would be $175,000. Then, he soon would be able to reconvert the stocks into another Roth IRA at their lower value.

You might have to first separate your traditional IRA into different I! RAs befor! e the conversion in order to convert each asset into a separate Roth IRA.

Have a recharacterization strategy. The conversion of an IRA is one of the few strategies the tax law lets you change your mind about after the year ends. After a traditional IRA is converted, you can reverse that conversion (recharacterize) any time up until the tax return for the year of the conversion, including extensions, is due. That means for a conversion made in 2014 you have until Oct. 15, 2015, to change your mind.

But it's probably not a good idea to wait until the last minute to recharacterize. You want to keep in mind your option to reconvert the IRA again. I recommend timing your recharacterization so that you are allowed to reconvert a reasonable time afterward. The law allows a reconversion only after the later of 30 days and the next calendar year following the recharacterization.

If you wait until Oct. 15, 2015, to recharacterize, then you can't reconvert until January 1, 2016. But if you recharacterize on Dec. 31 2014, after first converting in 2014, then you can reconvert on January 31, 2015. The rule makes December of the year of the conversion the ideal time to recharacterize.

But you shouldn't ignore recharacterization opportunities before or after that. If a Roth IRA substantially declines in value before the recharacterization deadline, you should consider recharacterizing. Lock in the loss, reduce your tax bill on the conversion, and get set to reconvert in the future.

Once you convert, watch your converted IRAs. You don't want to recharacterize too quickly or after a value decline that is likely to be short-term or is small. But monitor the Roth IRAs' values and the reconversion rules. When an IRA's value is down a meaningful amount, consider recharacterizing. Try to time your recharacterization to maximize your reconversion opportunities. Ideally, events are timed so you can reconvert at the lower value, before the assets recover.

Consolidate converted Rot! h IRAs af! ter the deadlines. Once the deadlines for recharacterization pass, there's no longer a reason for the Roth IRAs to be separate. You should consolidate the Roth IRAs so that management of them will be easier.

American Launches an Emerging Markets Fund

The American funds are different. Most fund companies wouldn't consider unveiling a new emerging-markets stock fund today. Vladimir Putin invades Ukraine, annexes part of it and acts as if he couldn't care less about sanctions aimed at punishing Russia. A new rumor about economic trouble in China surfaces almost daily. There's trouble in Brazil, India and Turkey, too. All of this has been too much for investors to bear, and they've responding by selling emerging-markets stocks. So far this year, the MSCI Emerging Markets Stock index has sunk 4.5%. Since peaking on May 2, 2011, the index has lost 14.2%.

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In sum, this would seem to be an inauspicious time to launch an emerging-markets fund. But that's precisely what Capital Group, the sponsor of the American funds, did on February 3. American Funds Developing World Growth and Income Fund A (DWGAX) hunts for dividend-paying, high-quality companies. Almost all will be based in emerging markets; a handful will be headquartered in developed countries but do most of their business in emerging markets.

When most companies trot out new funds, chances are good that the fund invests in a sector that has been performing well. But American really does go against the grain. The last time the Los Angeles-based firm debuted a fund (it doesn't happen often) was October 1, 2008, when global stock markets were in freefall. That fund, American Funds International Growth & Income A (IGAAX) has returned an annualized 10.6% since its launch, an average of 3.9 percentage points per year better than its benchmark, the MSCI EAFE index, which tracks developed foreign stock markets. ([All returns are through March 24.)

From an investing standpoint, the firm's latest launch may also turn out to be well-timed. "We'll look back and say, 'What a great time to launch an emerging-markets fund,' " says Shaw Wagener, one of Developing World Growth's three managers. "Relative to other stocks, emerging markets look quite cheap."

The long-standing case for emerging markets has been all about growth. Here again, the American funds offering is unusual. It invests solely in dividend-paying stocks, aiming for a portfolio yield of about 3% before expenses in today's environment. Why? Because over the past ten years, says Wagener, dividend-paying stocks in emerging markets have beaten nonpayers by an average of ten percentage points per year—a staggering gap. In addition, "dividend-paying companies tend to be better managed and better overseen by boards of directors," he says. "It makes no sense to us to buy any stocks with no dividend yield."

Not that the fund will focus on high yields. High-yielding companies often lack growth prospects. Wagener calls them "sunset companies." What's more, enterprises that are partially state-owned, particularly in Russia, tend to boast high yields. Rather, the managers will look for well-managed companies that can sustain or raise their payouts.

I'm especially enthusiastic about the new fund because American has been investing internationally for years and it has a huge cadre of analysts based overseas. Wagener, 55, has been with the firm 33 years, including a lengthy stint in Singapore. The two other co-managers, Noriko Chen and Chapman Taylor, also worked many years in Asia. All three have spent years researching emerging-markets stocks for investment accounts aimed at institutions. What's more, the managers can avail themselves of the services of about 30 analysts who spend at least part of their time researching emerging-markets stocks. As is the case at all of American's stock and bond funds, each of Developing World's managers has sole responsibility for a slice of the fund's assets.

The American funds approach is almost entirely bottom-up—that is, the funds focus on picking good stocks rather than forecasting the big picture. That said, Wagener thinks many strategists are much too gloomy on emerging markets. He dismisses the notion that China is facing an economic or financial crisis. And he and his colleagues have even found some promising Russian stocks.

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Until now, American Funds New World A (NEWFX) has been the firm's only emerging-markets play. One of my longtime favorites, the fund is a fascinating hybrid. More than half of its assets are in multinational companies that do a lot of business in developing nations. The rest is in emerging-markets bonds and emerging-markets stocks. The fund's record is superb.

One big negative to the American funds is that individual investors can't buy them directly. You have to either go through an investment adviser or buy them through a workplace retirement plan. The class A shares levy a 5.75% sales charge; annual expenses on the new fund are 1.43%. Attractive emerging-markets stock funds available directly to individuals include Harding Loevner Emerging Markets (HLEMX), a member of the Kiplinger 25, and Vanguard Emerging Markets Stock Index (VEIEX).

The American funds were wildly popular with advisers until the 2007-09 bear market, when the performance of the firm's balanced and bond funds disappointed many investors). Since then, the firm has experienced heavy withdrawals. I think the redemptions have been overdone. The records of the firm's foreign stock funds, in particular, are outstanding. I think the fund will be a winner, too.

Steve Goldberg is an investment adviser in the Washington, D.C., area.

Ahead of Earnings, Lululemon Is Still Not Cheap

Lululemon Athletica Inc. (NASDAQ: LULU) is due to report earnings this week, and the reality that investors need to face is that it is still not exactly a cheap stock. One report from Canaccord Genuity said that the sporting and yoga-themed apparel company’s 2014 guidance could be the last domino to fall.

The analyst lowered estimates to brace for another round of bad news, but it maintained its formal Buy rating while lowering its price target to $69 from $73 per share.

What 24/7 Wall St. wants to show is that Lululemon simply remains an expensive stock. The only good news is that it is not a wildly expensive one. Still, the damage done here seems severe enough that its chance to stage a snapback stock price rally and a snapback recovery in its image has likely come and gone.

What is interesting is that in the past 90 days, the earnings estimate for this quarter has only dropped by seven cents per share, or about 10%. Shares have fallen more than 16% in that time, but they are down 40% from the $82.50 peak of 2013.

On top of that, the $7.1 billion market cap is roughly 4.5 times its sales. Again, the company has offended some of its customers directly and other customers have decided to spend their money elsewhere.

Now, let’s go out a year to see where Lululemon is still expensive. The Thomson Reuters consensus earnings per share estimate is $2.16 (growth of 14%). Sales growth is expected to remain 15%. With all the problems that Lululemon has had, its stock still trades at almost 23 times earnings, based on a $49 share price.

The question is whether Lululemon can grow this much in the year ahead after posting only about 2% growth in the past year or so. Unfortunately, the retailer may have to get that sales growth from opening more stores rather than milking out higher and higher sales from its comparable stores, open a year or more.

Our question is what sort of growth shareholders really will see at Lululemon. A $7 billion value sounds high, but it was valued at more than $10 billion in market cap before its problems knocked it down.

Lululemon reports earnings on Thursday. We will follow up with a more detailed earnings preview ahead of the report.

Economists See Fed Ending Bond Purchases Soon

Andrew Harrer/Bloomberg via Getty ImagesFederal Reserve Chair Janet Yellen WASHINGTON, D.C. -- With the pace of U.S. economic growth seen speeding up later this year and next, many business economists expect the Federal Reserve to end its bond purchases this fall or even earlier. The consensus of the 48 economists surveyed by the National Association for Business Economics is that bad weather cut first-quarter growth to a weak annual rate of 1.9 percent, but that growth could exceed 3 percent by year's end. NABE's report, released Monday, covered a survey period from Feb. 19 through March 5. Their forecast for average U.S. economic growth of 2.8 percent this year is better than the 2.5 percent rate they predicted in NABE's December survey. Those surveyed expect consumer spending to now increase 2.6 percent in 2014, not 2.4 percent, as hourly wage growth is forecast to rise faster than inflation. GDP is expected to grow an average 3.1 percent in 2015. "Conditions in a variety of areas -- including labor, consumer and housing markets -- are expected to improve over the next two years, while inflation remains tame," NABE President Jack Kleinhenz, chief economist of the National Retail Federation, said in a statement. Given the stronger growth forecast, 57 percent of the economists surveyed believe the Federal Reserve will end its bond purchases in the fourth quarter, as the central bank has signaled it plans to do. Another quarter think it will happen even before that, though 17 percent think the Fed will keep buying bonds into 2015. The Fed has been buying bonds for the past several years with the aim of driving down long-term interest rates to stimulate spending and economic growth. Now that the economy is slowly but steadily improving, it has been tapering those purchases. At each of its last three policy meetings, including last week's, the Fed cut bond purchases by $10 billion to the current pace of $55 billion a month. There are six meetings left in 2014. One-third of respondents said the Fed could even raise short-term interest rates this year, though more than half think it won't happen until next year. Fed Chair Janet Yellen said Wednesday that with the job market still weak, the central bank intends to keep short-term rates near zero for a "considerable" time and would raise them only gradually. She also said the Fed wouldn't be dictated solely by the unemployment rate, which Yellen feels overstates the health of the job market and the economy. Yellen appeared to jolt investors last week when she tried to clarify the Fed's timetable for raising the short-term rate. She suggested that the Fed could start six months after it halts its monthly bond purchases. That would mean the rate could rise by mid-2015. A short-term rate increase would elevate borrowing costs and could hurt stock prices. Stocks fell after Yellen's mention of six months. The Dow Jones industrial average ended that day down more than 100 points.

Keurig Green Mountain Added to the S&P 500

After markets closed on Friday, Standard & Poors announced several changes in its indexes. The big news in the announcement was the addition of Keurig Green Mountain Inc. (NASDAQ: GMCR) to the S&P 500 Index effective after the close on March 21. Keurig replaces WPX Energy Inc. (NYSE: WPX). WPX will take Keurig's place on the S&P MidCap 400 Index.

Getting added to the S&P 500 is always good news for a stock because there is so much demand for index funds. Keurig shares rose 2.45% to $116.03 in after-hours trading on Friday. The shares are likely to add even a bit more during Monday's regular session. The shares were up

Keurig's been on something of roll in the last six weeks. First there was the deal with The Coca-Cola Co. (NYSE: KO). The beverage giant will acquire 10% of Keurig and enter an exclusive partnership with the smaller company for the production and sale of branded Coke products in Keurig's planned single-serve cold beverage dispenser.

On Friday, Keurig announced that it had killed its exclusive deal with Starbucks Corp. (NASDAQ: SBUX) for super-premium coffee packed in K-Cups. Keurig struck a new deal with Peet's Coffee, a division of privately held Joh. A Benckiser, a German firm that also owns coffee companies D.E. Master Blenders 1753 and Caribou Coffee. The deal will put Peet's-branded K-Cups in more than 12,000 U.S. stores.

When Keurig reported earnings results in early February, the company forecast sales growth in 2014 in the high single digits with more growth coming in the second half of the year. The company reached an all-time intraday high on February 20 at $124.42, and the current consensus price target on the stock is around $125.10, implying a potential gain of just 0.6%. That price target should go up some now that the company's stock is included in the S&P 500.

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Keurig's shares closed at $113.25 on Friday, up 6.7% on the day. They’ve risen nearly 50% this year and have a 52-week range of $52.58 to $124.42.

Whiplash: S&P Veers to All-Time High Before Crashing

NEW YORK (TheStreet) -- Was this stock market for real on Friday?

Not only did the S&P  set a new all-time high this morning and the DJIA was up over 100 points again, but the markets actually lost all those gains on Friday afternoon, with all the indexes turning red by the close. The DJIA closed at 16,298, down 33 points. The S&P 500 closed down 6.18 points at 1865.84, after setting a new all-time high at 1883.97 intraday.

How can that possibly be taken as a bullish trading day?

By not closing at a new all-time high in the S&P, this market is making the bulls pretty uncomfortable heading into next week. This was triple-witching options expiration Friday, and the volume was huge. As has been the norm, volume on the down red days has been huge compared to the green up days.

Volatility has been the theme of this stock market so far in 2014. Patience and opportunistic trading are of utmost importance. If you do not have a process that works, it will continue to be a difficult stock market to navigate. The dollar was down again on Friday and gold was up. There is a 90% inverse correlation between those two indicators. Growth-slowing sectors and inflation acceleration have been leading this market higher in 2014. Utilities and gold are the two sectors that have returned the most for 2014 so far. That is never a good sign for continued strength in the stock market. Some stocks that closed up on the day were Facebook (FB), and International Paper (IP). Those two stocks were mentioned in Thursday's column as oversold. Safeway (SWY) and Xylem (XYL) were also mentioned and closed down slightly on the day. They are still in oversold territory. What will happen next week is anyone's guess. The market close on Friday does not bode well on the edge for a bullish setup. Setting a new all-time high and not holding that level at the close has to be considered a bearish sign. However, It is to early to make predictions. "Bullish" and "Bearish" are talking points. Let the market be your guide. There is one more trading week left in the quarter before earnings season kicks in. The fact the indexes are virtually flat for the year means that there are not many gains to protect for the mutual fund or hedge fund community. So, it will be interesting to see how next week plays out. I did add two stocks to my trading account Friday. I bought CytRx (CYTR), a small-cap stock with a market cap of less than $4 billion, and iPath Pure Beta Coffee (CAFE), a commodity exchange-traded fund, as an inflation hedge. At the time of publication, the author held  positions in CYTR and CAFE. This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

Stock quotes in this article: ^DJI, FB, ^GSPC, IP, SWY, XYL, CYTR, CYTR 

5 Stocks Set to Soar on Bullish Earnings

DELAFIELD, Wis. (Stockpickr) -- Short-sellers hate being caught short a stock that reports a blowout quarter. When this happens, we often see a tradable short squeeze develop as the bears rush to cover their positions to avoid big losses. Even the best short-sellers know that it's never a great idea to stay short once a bullish earnings report sparks a big short-covering rally.

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This is why I scan the market for heavily shorted stocks that are about to report earnings. You only need to find a few of these stocks in a year to help enhance your portfolio returns -- the gains become so outsized in such a short time frame that your profits add up quickly.

That said, let's not forget that stocks are heavily shorted for a reason, so you have to use trading discipline and sound money management when playing earnings short-squeeze candidates. It's important that you don't go betting the farm on these plays and that you manage your risk accordingly. Sometimes the best play is to wait for the stock to break out following the report before you jump in to profit off a short squeeze. This way, you're letting the trend emerge after the market has digested all of the news.

Of course, sometimes the stock is going to be in such high demand that you risk missing a lot of the move by waiting. That's why it can be worth betting prior to the report -- but only if the stock is acting technically very bullish and you have a very strong conviction that it is going to rip higher. Just remember that even when you have that conviction and have done your due diligence, the stock can still get hammered if The Street doesn't like the numbers or guidance.

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If you do decide to bet ahead of a quarter, then you might want to use options to limit your capital exposure. Heavily shorted stocks are usually the names that make the biggest post-earnings moves and have the most volatility. I personally prefer to wait until all the earnings-related news is out for a heavily shorted stock and then jump in and trade the prevailing trend.

With that in mind, here's a look at several stocks that could experience big short squeezes when they report earnings this week.

Burlington Stores

My first earnings short-squeeze play is off-price branded apparel retailer Burlington Stores (BURL), which is set to release numbers on Thursday before the market open. Wall Street analysts, on average, expect Burlington Stores to report revenue of $1.34 billion on earnings of $1.03 per share.

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The current short interest as a percentage of the float for Burlington Stores is pretty high at 13.2%. That means that out of the 17.04 million shares in the tradable float, 2.24 million shares are sold short by the bears. This is a decent short interest on a stock with a relatively low float. Any bullish earnings news could easily spark a large short-squeeze for shares for BURL post-earnings.

From a technical perspective, BURL is currently trending below its 50-day moving average, which is bearish. This stock has been trending sideways for the last month and change, with shares moving between $23.88 on the downside and $28.20 on the upside. Any high-volume move above the upper-end of that range post-earnings could trigger a big breakout trade for shares of BURL.

If you're bullish on BURL, then I would wait until after its report and look for long-biased trades if this stock manages to break out above some key overhead resistance levels $26.94 to $28.20 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 359,205 shares. If that breakout triggers after earnings, then BURL will set up to re-test or possibly take out its next major overhead resistance level at its all-time high of $32.98 a share. Any high-volume move above that level will then give BURL a chance to tag $35 to $40 a share.

I would simply avoid BURL or look for short-biased trades if after earnings it fails to trigger that breakout and then drops back below some key near-term support levels at $25.45 to $24.87 a share and then below more support at $23.88 a share with high volume. If we get that move, then BURL will set up to re-test or possibly take out its 52-week low at $21.54 a share.

AAR

Another potential earnings short-squeeze idea is aviation services and technology products player AAR (AIR), which is set to release its numbers on Thursday after the market close. Wall Street analysts, on average, expect AAR to report revenue $525.63 million on earnings of 47 cents per share.

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The current short interest as a percentage of the float for AAR is notable at 8.5%. That means that out of the 36.50 million shares in the tradable float, 3.10 million shares are sold short by the bears. If the bulls get the earnings news they're looking for, then shares of AIR could easily explode higher post-earnings as the bears rush to cover some of their trades.

From a technical perspective, AIR is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending strong for the last two months, with shares moving higher from its low of $25.38 to its recent high of $31.13 a share. During that uptrend, shares of AIR have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of AIR within range of triggering a big breakout trade post-earnings.

If you're in the bull camp on AIR, then I would wait until after its report and look for long-biased trades if this stock manages to take out some near-term overhead resistance levels at $31.13 a share to its 52-week high at $31.55 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 377,882 shares. If that breakout kicks off after earnings, then AIR will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $40 to $45 a share.

I would simply avoid AIR or look for short-biased trades if after earnings it fails to trigger that breakout and then drops back below some key near-term support levels at $30 to $29.50 a share with high volume. If we get that move, then AIR will set up to re-test or possibly take out its next major support levels at its 50-day moving average of $27.94 a share to its 200-day moving average of $26.81 a share.

Scholastic

Another potential earnings short-squeeze candidate is Scholastic (SCHL), a children's publishing, education and media company, which is set to release numbers on Thursday before the market open. Wall Street analysts, on average, expect Scholastic to report revenue of $380 million on a loss of 37 cents per share.

>>5 Toxic Stocks to Watch Out For

The current short interest as a percentage of the float for Scholastic is very high at 14.1%. That means that out of the 26.76 million shares in the tradable float, 3.64 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 2.2%, or by about 78,000 shares. If the bears get caught pressing their bets into a strong quarter, then shares of SCHL could easily rip sharply higher post-earnings as the bears rush to cover some of their positions.

From a technical perspective, SCHL is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending strong for the last two months and change, with shares moving higher from its low of $27.57 to its recent high of $36.74 a share. During that uptrend, shares of SCHL have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of SCHL within range of triggering a big breakout trade post-earnings.

If you're bullish on SCHL, then I would wait until after its report and look for long-biased trades if this stock manages to break out above some near-term overhead resistance levels at $36 a share to its 52-week high at $36.74 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 273,180 shares. If that breakout hits, then SCHL will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $45 to $50 a share.

I would avoid SCHL or look for short-biased trades if after earnings it fails to trigger that breakout and then drops back below some key near-term support levels at $34.45 a share to its 50-day moving average of 34.08 a share with high volume. If we get that move, then SCHL will set up to re-test or possibly take out its next major support levels at its 200-day moving average of $30.72 a share to $28 a share.

Darden Restaurants

Another earnings short-squeeze prospect is full service restaurant player Darden Restaurants (DRI), which is set to release numbers on Friday before the market open. Wall Street analysts, on average, expect Darden Restaurants to report revenue of $2.26 billion on earnings of 82 cents per share.

>>5 Stock Charts Screaming "Buy" in March

The current short interest as a percentage of the float for Darden Restaurants is pretty high at 9.8%. That means that out of the 122.87 million shares in the tradable float, 12.09 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 3.5%, or by about 410,000 shares. If the bears get caught pressing their bets into a bullish quarter, then shares of DRI could easily trend sharply higher post-earnings as the bears jump to cover some of their trades.

From a technical perspective, DRI is currently trending above its 200-day moving average and just below its 50-day moving average, which is neutral trendwise. This stock has been making lower highs and higher lows over the last two months and change. That chart pattern is now setting up DRI for a breakout trade above a key downtrend line post-earnings if this company can deliver strong results that the bulls like.

If you're bullish on DRI, then I would wait until after its report and look for long-biased trades if this stock manages to break out above some key near-term overhead resistance levels at $50.67 to $51.25 a share with high volume. Look for volume on that move that hits near or above its three-month average action 1.79 million shares. If that breakout materializes after earnings, then DRI will set up to re-test or possibly take out its 52-week high at $55.25 a share. Any high-volume move above that level will then give DRI a chance to tag $60 a share.

I would simply avoid DRI or look for short-biased trades if after earnings it fails to trigger that breakout and then drops back below some key near-term support levels at $49 to $47.90 a share and then below more support at $47.04 a share with high volume. If we get that move, then DRI will set up to re-test or possibly take out its next major support levels at $45 to $43.78 a share, or even $42 to $41 a share.

Guess

My final earnings short-squeeze play is apparel and accessories player Guess (GES), which is set to release numbers on Wednesday after the market close. Wall Street analysts, on average, expect Guess to report revenue of $764.99 million on earnings of 80 cents per share.

>>Invest Like a Hedge Fund With the Pros' Top 5 Stocks

The current short interest as a percentage of the float for Guess is pretty high at 10.2%. That means that out of the 64.68 million shares in the tradable float, 6.20 million shares are sold short by the bears. If Guess can deliver the earnings news the bulls are looking for, then this stock can easily spike sharply higher post-earnings as the bears rush to cover some of their bets.

From a technical perspective, GES is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has been downtrending over the last few weeks, with shares sliding lower from its high of $31.25 to its intraday low of $28.07 a share. During that move, shares of GES have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of GES are starting to rebound higher off its intraday low a share and this stock is starting to trend within range of triggering a near-term breakout trade.

If you're in the bull camp on GES, then I would wait until after its report and look for long-biased trades if this stock manages to break out above some near-term overhead resistance levels at its 50-day moving average of $29.18 a share to its 200-day moving average of $30.66 a share and then once it clears more key resistance at $31.71 a share with high volume. Look for volume on that move that hits near or above its three-month average volume of 819,502 shares. If that breakout triggers after earnings, then GES will set up to re-test or possibly take out its 52-week high at $34.94 a share to some more past resistance around $40 a share.

I would avoid GES or look for short-biased trades if after earnings it fails to trigger that breakout, and then drops back below some key near-term support at $26.76 a share with high volume. If we get that move, then GES will set up to re-test or possibly take out its next major support levels at $24 to $20.70 a share.

To see more potential earnings short squeeze plays, check out the Earnings Short-Squeeze Plays portfolio on Stockpickr.

-- Written by Roberto Pedone in Delafield, Wis.

RELATED LINKS:

>>5 Big Health Care Stocks to Trade for Gains

>>5 Stocks With Big Insider Buying

>>5 Stocks Under $10 Set to Soar

Follow Stockpickr on Twitter and become a fan on Facebook.

At the time of publication, author had no positions in stocks mentioned.

Roberto Pedone, based out of Delafield, Wis., is an independent trader who focuses on technical analysis for small- and large-cap stocks, options, futures, commodities and currencies. Roberto studied international business at the Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany. His work has appeared on financial outlets including

CNBC.com and Forbes.com.

You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zerosum24.

Top 5 Biotech Companies To Buy For 2014

Top 5 Biotech Companies To Buy For 2014: Enanta Pharmaceuticals Inc (ENTA)

Enanta Pharmaceuticals, Inc., incorporated on July 25, 1995, is a research and development-focused biotechnology company. The Company uses its chemistry-driven approach and drug discovery capabilities to create small molecule drugs in the infectious disease field. The Company is discovering and developing novel inhibitors designed for use against the hepatitis C virus (HCV). These inhibitors include members of the direct acting antiviral (DAA) inhibitor classes-protease (partnered with AbbVie, the former research-based pharmaceutical business of Abbott Laboratories), NS5A (partnered with Novartis) and nucleotide polymerase, as well as a host targeted antiviral (HTA) inhibitor class targeted against cyclophilin. ABT-450, discovered through its collaboration with AbbVie, is a protease inhibitor that has demonstrated in vitro potency against known resistant HCV mutants.

In Phase I studies, ABT-450 co-administered with ritonavir, a commonly used boosting agent to increase the blood concentrations of many protease inhibitors, was shown to be safe and well tolerated. Co-administration of ABT-450 with ritonavir, which it refers to together as ABT-450/r, has enabled once-daily dosing of ABT-450. Phase II studies have demonstrated the efficacy of ABT-450/r in patients with chronic HCV, and other interferon-free Phase II studies of ABT-450-containing regimens continue. AbbVie is developing a next-generation protease inhibitor discovered within the Enanta-AbbVie collaboration. EDP-239 is the NS5A inhibitor discovered by the Company. The Company also has a program to develop nucleotide inhibitors to HCV NS5B polymerase, which is another DAA mechanism considered to have a barrier to resistance. The Company's Bicyclolide antibiotic product candidate is EDP-788, which it is developing for use as an intravenous drug in the hospit! al setting and for oral dosing in the home setting. EDP-788 is a prodrug, which means that it is inactive until it is converted in the body into an active compound. EDP-788 is! a water-soluble molecule which, when administered in preclinical models, is cleanly and rapidly converted into the active compound.

Advisors' Opinion:

• [By Sean Williams]

  The next big thing in treating hepatitis-C
  The other currently experimental therapy very likely to make it onto the FDA's desk before the midpoint of 2014 is AbbVie's (NYSE: ABBV  ) direct-acting antiviral combo drug. In similar fashion to Sovaldi, this DAA-combo therapy, which includes ABT-450 from Enanta Pharmaceuticals (NASDAQ: ENTA  ) , is running six confirmatory late-stage trials on various genotypes. There are, however, two primary differences between AbbVie's DAA-combo therapy and Sovaldi.

• [By James Fink]

  And lastly I'll go into healthcare, which is kind of a growth cyclical type name. It's partially defensive, partially growth. I think the more growth-oriented section of healthcare would be biotech, and right now, a very promising biotech stock is Enanta Pharmaceuticals. That's a NASDAQ stock; ticker symbol (ENTA).

source from Top Stocks Blog:http://www.topstocksblog.com/top-5-biotech-companies-to-buy-for-2014.html

Why Tesla Is Overvalued

Tesla Motors (TSLA) has been one of the hottest stocks on the market. Shares of the company have appreciated roughly 575% in the past one year and the demand for Tesla's Model S has exceeded production. But are the company's prospects blown out of proportion?

Aswath Damodaran, a professor of finance at New York University, may not be a household name, but he's made some of the most accurate share valuations in the recent past, predicting Apple's peak and Facebook's low, to name a couple. And now, after doing his math on Tesla, Damodaran concluded that Tesla is worth $67.12. When he came up with this figure, Tesla was trading at $170.62, and after working out a comparative index, I believe he may be right.

Tesla is charging close to $950,952 per car, which translates into around 14 times the actual cost of the vehicle under the assumption that it is free to manufacture! Given real operating gross margins of 13% on its $70,000-priced Model S, Tesla is generating about $9,000 in gross profit from each car that it manufactures. Despite that, investors are placing an irrational valuation of around $950,952 on every car! Going by such calculations, Tesla will need to enhance its production by 20 times in order to be twice as expensive as Honda, which is the next big car maker, on a value-per-car basis.

A 20-fold jump may seem far-fetched, but that is exactly what Tesla bulls anticipate, and they expect it to happen before 2020. But even if the company somehow manages to multiply its production by a factor of 20, will it justify a market cap of $20 billion or will it have to sustain its growth for a longer period of time to justify today's share price? Let's take a look.

Luxury Models

Obviously, there's no assurance that Tesla will meet the towering goals set by investors. As the company continues to ramp up the production of vehicles, there are a few roadblocks which may harm its progress. One major concern for Tesla is inadequate supply of batteries. Nevertheless, let's give Tesla the benefit of the doubt and assume that the company does manage to overcome all technical hindrances so that demand becomes the only parameter.

The company believes that there is adequate demand in the market for it to boost the production of the Model S to 40,000 units annually within a span of one year. The addition of a new crossover — Model X — in 2014 will augment the total demand, but on the flip side, the launch of the Model X might also reduce the demand of Model S to some extent. Whatever the case may be, it looks like Tesla will struggle to sell more than 100,000 luxury cars yearly anytime soon.

Economical Models

The real key to Tesla's success lies in the company's ability to innovate a lower-priced model without deteriorating its quality. Over the previous conference call, Elon Musk stated that he saw a "clear path" for starting the production of a $35,000 vehicle with a range of 200 miles, which could go into production by as soon as 2016.

Such an economical vehicle will have a lesser margin than the lavish Model X or Model S. Even though Musk is of the opinion that Tesla could probably provide competition to Porsche with gross margins of around 50%, it would only be likely if Tesla is able to maintain its Porsche-like average selling price of around $100,000.

A $35,000 car would have a lower gross margin of say 15%. But Tesla cannot afford to cut down quality, hence it must begin at a quality level consistent with other cars in the $100,000-price range, such as BMW's 3-Series, Daimler's Mercedes C-Class, or General Motors' Cadillac ATS. The cost of batteries and an electric Powertrain (when stacked up against a standard internal combustion engine) are added costs for Tesla. Also, if Tesla grows as per expectations, its vehicles will not be eligible for the $7,500 federal tax credit in the U.S., since the credit begins to phase out after a car maker manufactures 200,000 plug-in or all-electric vehicles.

What Next?

Assuming Tesla can sell 400,000 "reasonably priced" cars in 2018 for $35,000 a piece at a 15% gross margin, it would earn just over $2 billion in gross profit. In comparison, Tesla's operating expenses currently clock an annual run rate of $450 million. However, with Tesla expanding its portfolio from one vehicle today to three to four different models in 2018, and growing sales by more than 20 times, operating expenses could easily jump to $2 billion, or higher, by then.

Simply said, while a cheaper car will help Tesla hit the mass market and sell higher volumes, most of the additional revenue will be negatively compensated by an accompanying increase in operating expenses. To generate billions of dollars in free cash flow — which is what investors expect from Tesla going by its valuation — Tesla will need to generate Porsche-like gross margins.

Hence, Damodaran's view that Tesla is highly overvalued certainly holds weight. Also, institutional investors have been reducing their stake in the company. Tesla has some real challenges ahead of it and that's why investors should stay away from it until and unless there is more clarity as to how it plans to generate positive cash flow and scale up its business to achieve a highly inflated valuation.

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Top 10 Safest Companies To Buy Right Now

Top 10 Safest Companies To Buy Right Now: BioDelivery Sciences International Inc.(BDSI)

BioDelivery Sciences International, Inc., a specialty pharmaceutical company, focuses on developing and commercializing products in the areas of pain management and oncology supportive care. The company uses its patented BioErodible MucoAdhesive (BEMA) and Bioral cochleate drug delivery technologies in the development of its products. The BEMA technology is a small erodible polymer film for application to the buccal mucosa; and the Bioral cochleate drug delivery technology encapsulates a selected drug or therapeutic in a cochleate cylinder. Its pain franchise consists of products utilizing the patented BEMA technology, including ONSOLIS, a fentanyl buccal soluble film for the management of pain in opioid tolerant adult patients with cancer; and BEMA Buprenorphine, which is in the development stage for the treatment of moderate to severe chronic pain, as well as for the treatment of opioid dependence. The company also engages in developing product candidates utilizing the B EMA technology for conditions, such as nausea/vomiting. BioDelivery Sciences International, Inc. was founded in 1997 and is headquartered in Raleigh, North Carolina.

Advisors' Opinion:

• [By John Kell]

  Shares of BioDelivery Sciences International Inc.(BDSI) jumped after the company disclosed favorable results for a Phase 3 study of a treatment for severe chronic pain. BioDelivery shares surged 45% to $9.04 premarket.

source from Top Stocks Blog:http://www.topstocksblog.com/top-10-safest-companies-to-buy-right-now.html

Hot Sliver Stocks To Buy For 2014

Hot Sliver Stocks To Buy For 2014: Crumbs Bake Shop Inc (CRMB)

Crumbs Bake Shop, Inc., formerly 57th Street General Acquisition Corp., incorporated on October 29, 2009, is owner of Crumbs Holdings LLC (Crumbs), a neighborhood bakery and a retailer of cupcakes. As of November 1, 2011, Crumbs had 43 locations, including 29 locations in the New York Metro area, nine locations on the West Coast, three locations in Washington, D.C., one location in Virginia and one location in Chicago. The specialty of the house is cupcakes; however, the menu also includes a blend of baked goods. On May 5, 2011, the Company merged with Crumbs.

The Company offers a range of Signature and Taste size cupcakes. Signature cupcakes are ordered in increments of six. One can create its own individual six packs or choose a pre-selected assortment. Its Taste size cupcakes are offered by the dozen in pre-selected favorites assortments. There are more than 60 varieties of cupcakes baked fresh daily with a new cupcake of the week debuting each Monday.

Advisors' Opinion:

• [By John Kell and Tess Stynes var popups = dojo.query(".socialByline .popC"); p]

  Crumbs Bake Shop Inc.(CRMB) said interim Chief Executive Edward M. Slezak has been named permanently to post, while also announcing that its board has appointed Frederick G. Kraegel as chairman.

• [By Kyle Woodley]

  I love cupcakes. More specifically, I love Crumbs Bake Shop (CRMB) cupcakes. I absolutely do.

  That's why it pains me to say that CRMB stock is dead money.

source from Top Stocks Blog:http://www.topstocksblog.com/hot-sliver-stocks-to-buy-for-2014.html

Best Warren Buffett Stocks To Watch For 2014

Best Warren Buffett Stocks To Watch For 2014: Swedish Export Credit publ Corp (FUE)

Swedish Export Credit publ Corp (SEK) is a Sweden-based company engaged in the provision of financial solutions for the private and public sectors with the aim of promoting the development and international competitiveness of the Swedish industry and trade. The Company's business activities are structured into three segments: the Financing segment includes corporate banking, export finance, trade finance, project finance, customer finance, structured products and Cirr-rates; the Advisory segment provides financial advice to International Financial Institutions, governments and corporations, in a range of areas, such as power and energy, utilities, environment, transport, telecoms, and pulp and paper, and the Small and medium-sized enterprises (SMEs) segment offers finance services to small and medium-sized enterprises. Advisors' Opinion:

• [By John Udovich]

  On Tuesday, lightly traded small cap biodiesel stock Methes Energies International Ltd (NASDAQ: MEIL) soared 53.78% on record production figures, meaning its worth taking a closer look at whether that surge was actually warranted plus look at the performance of potential peers like biodiesel stock Renewable Energy Group Inc (NASDAQ: REGI) and biofuel ETF the ELEMENTS MLCX Biofuels Index TR ETN (NYSEArca: FUE).

source from Top Stocks Blog:http://www.topstocksblog.com/best-warren-buffett-stocks-to-watch-for-2014.html

Top 5 China Stocks To Buy For 2014

Top 5 China Stocks To Buy For 2014: China Mobile(Hong Kong)

China Mobile Limited, an investment holding company, provides mobile telecommunications and related services primarily in the Mainland China. It offers various services comprising local calls, domestic long distance calls, international long distance calls, domestic roaming, and international roaming. The company also provides voice value-added services, including caller identity display, caller restrictions, call waiting, call forwarding, call holding, voice mail, and conference calls; customer-to-customer messages and corporate short message services; and mobile Internet access services. In addition, it engages in other data businesses, which primarily include multimedia messaging services; color ring services that enable users to customize the answer ring tone from various selection of songs, melodies, sound effects, or voice recordings; and mobile reading, mobile gaming, mobile video, mobile payment/wallet, mobile TV, mobile market, and Internet data center services. F urther, the company offers telecommunications network planning, design, and consulting services; roaming clearance services; technology platform development and maintenance services; and mobile data solutions, and system integration and development services, as well as operates a network and business coordination center. Additionally, China Mobile Limited sells mobile phone handsets and devices. As of March 31, 2011, it served approximately 600.8 million customers. The company was formerly known as China Mobile (Hong Kong) Limited and changed its name to China Mobile Limited in May 2006. China Mobile was founded in 1997. The company is based in Central, Hong Kong, and is considered a Red Chip company due to its listing on the Hong Kong Stock Exchange. China Mobile Limited is a subsidiary of China Mobile Hong Kong (BVI) Limited.

Advisors' Opinion:

• [By Gur! uFocus]

  China Mobile Ltd. was incorporated under the laws of Hong Kong on Sept. 3, 1997, as a limited liability company under the name China Telecom (Hong Kong) Limited. China Mobile Ltd. has a market cap of $194.9 billion; its shares were traded at around $48.48 with a P/E ratio of 9.70 and P/S ratio of 2.20. The dividend yield of China Mobile Ltd. stocks is 4.20%. China Mobile Ltd. had an annual average earnings growth of 16.60% over the past 10 years. GuruFocus rated China Mobile Ltd. the business predictability rank of 3.5-star.

source from Top Stocks Blog:http://www.topstocksblog.com/top-5-china-stocks-to-buy-for-2014.html

Top Rising Stocks To Watch For 2014

Top Rising Stocks To Watch For 2014: Farmer Brothers Company(FARM)

Farmer Bros. Co. engages in the manufacture, wholesale, and distribution of coffee, tea, and culinary products. Its product line includes roasted coffee; liquid coffee; and coffee related products, such as coffee filters, sugar and creamers, assorted teas, cappuccino, cocoa, spices, gelatins and puddings, soup, gravy and sauce mixes, pancake and biscuit mixes, and jellies and preserves. The company distributes its products through direct and brokered sales to institutional foodservice establishments, including restaurants, hotels, casinos, hospitals, and foodservice providers, as well as retailers, such as convenience stores, coffee houses, general merchandisers, private label retailers, and grocery stores in the United States. Farmer Bros. Co. was founded in 1912 and is headquartered in Torrance, California.

Advisors' Opinion:

• [By Eric Volkman]

  Farmer Brothers (NASDAQ: FARM  ) has a new top financial executive. The company has appointed Mark Nelson to its CFO and treasurer positions, effective April 15. He will initially be assisted by, then replace, interim Treasurer and CFO Jeffrey Wahba. 

• [By Laura Brodbeck]

  Monday

  Earnings Releases Expected: Diamond Foods, Inc. (NASDAQ: DMND), Farmer Brothers Company (NASDAQ: FARM) Economic Releases Expected: US Chicago PMI

  Tuesday

source from Top Stocks Blog:http://www.topstocksblog.com/top-rising-stocks-to-watch-for-2014.html

Defense lawyer: Madoff was villain, not client

NEW YORK — The defense lawyer for former Bernard Madoff aide Annette Bongiorno displayed a familiar photo of the Ponzi scheme mastermind on courtroom video monitors Tuesday during his closing arguments in her fraud trial.

That's how Bongiorno viewed her boss before the world learned Madoff ran a scam that stole an estimated $20 billion from thousands of investors, said attorney Roland Riopelle. Then he displayed a New York Magazine image that depicted Madoff as the malevolent Joker character from a recent Batman movie.

"That's how he really was," Riopelle told jurors.

The dramatic illustration summed up the central defense argument of Bongiorno and four former co-workers accused of knowingly participating in and profiting from the massive fraud.

"Mrs. Bongiorno relied on Mr. Madoff, and she was fooled by him," said Riopelle, who characterized the longtime aide who helped oversee accounts for her boss' most senior clients as another "victim of the fraud."

The argument came in the closing days of a trial that began in early October and represents the first Madoff-related criminal proceeding to be heard by a jury. Madoff pleaded guilty after his scam collapsed in December 2008. He's now serving a 150-year prison term.

The former co-workers similarly face potential sentences of decades behind bars if convicted following jury deliberations expected to start as soon as Friday. Along with Bongiorno, they include ex-Madoff operations manager Daniel Bonventre, JoAnn Crupi, who oversaw the bank account for the investment business, and former Madoff computer programmers Jerome O'Hara and George Perez.

The March 2, 2009 New York magazine cover's representation of Bernard Madoff as the Joker from Batman.(Photo: New Yo! rk Magazine)

Riopelle focused part of his closing argument questioning prosecution evidence that showed Bongiorno collected a six-figure salary and owned a Madoff investment account that purportedly held $50 million.

"What matters is what she knew," not her finances, argued Riopelle.

He noted that Frank DiPascali, the former Madoff financial lieutenant who pleaded guilty and testified against his former co-workers drained his investment account and had a $5 million negative balance when the scam collapsed.

"That, ladies and gentlemen, is the act of a man who knew it was a fraud," Riopelle told jurors.

In contrast, Bongiorno left what seemed to be a fortune in her account, said Riopelle, who argued that behavior supported her innocent plea. The purported riches "went up in smoke" after Madoff's arrest and confession, he said.

Earlier Tuesday, O'Hara defense attorney Gordon Mehler challenged the significance of a 2006 note the former Madoff computer programmer wrote in his personal notebook. Prosecutors argued the note, in which O'Hara wrote "I will not lie anymore," appeared to show he knew about the fraud.

But Mehler showed that the statement appeared to refer to lies O'Hara told to Madoff when asked about progress on a computer programs the financier needed to doctor financial records. Trial evidence showed O'Hara and Perez had deleted the programs from the office computer system without Madoff's knowledge.

Mehler described the programmers' action as a "courageous" decision that helped prove their innocence.

Hilton Worldwide (HLT): Putting Your Money to Sleep? Goldman Sachs says No

Earlier today, Goldman Sachs upgraded Hilton Worldwide (NYSE: HLT) to a "Buy" from a "Neutral" recommendation. Analyst, Steven Kent says HLT is not much different from competitors, but Kent prefers the way HLT spends its money.

The analyst tells clients, "In our view, there are not a lot of operational differences between HLT and its lodging peers, so to us stock selection is primarily based on other factors, notably capital allocation."

Hilton Worldwide is engaged in the ownership, leasing, management, development, and franchising of hotels, resorts, and timeshare properties worldwide. The company operates hotels under the brand names of Waldorf Astoria Hotels & Resorts, Conrad Hotels & Resorts, Hilton Hotels & Resorts, DoubleTree by Hilton, Embassy Suites Hotels, Hilton Garden Inn, Hampton Inn, Homewood Suites by Hilton, and Home2 Suites by Hilton; and timeshare properties under the Hilton Grand Vacations brand.

[Related -Give Starwood a Premium Valuation]

As of February 26, 2014, it had approximately 4,000 managed, franchised, owned, and leased hotels and timeshare properties with approximately 665,000 rooms in 90 countries and territories.

Although Goldman considers Hilton the top investment in the lodging space, the stock is barely in the green as we type; however, Kent cites four reasons HLT shares should not lag too much longer. The analyst believes the stock could hit his price-target of $26 because, "Four reasons to buy HLT: (1) clarity of capital allocation: all of HLT's free cash flow is going toward debt pay down, (2) timeshare strategy is underappreciated: HLT has moved asset light while increasing the number of markets it is going timeshare, (3) HLT shares have lagged the past few months: since its first day of trading, shares have increased only 4%, while MAR, HOT, and H have increased 18%, 13%, and 11% respectively over the same period, and (4) buying HLT is a relatively contrarian call: HLT has only 46% Buy ratings while Starwood has 70% Buy/overweight ratings."

[Related -Barron's Summary (CCK, LDK, PAYX, CAH, GEO, CXW, CRN, CREE)]

Since Goldman names HLT versus the industry case as the reason for the change of opinion, let's look at Hilton Worldwide's sales and earnings estimates for 2014 and 2015 to see where HLT shares would price out at the peer group averages.

According to yahoo finance, the consensus earnings estimate for 2014 is $0.62 and $0.78 for 2014. Meanwhile, the aver competitor trades at 25 times EPS. Applying that price multiple to Hilton's projected bottom line gives us potential target of $15.50 for 2014 and $19.50. To hit Kent's $26 target requires a P/E of 33.33 on next year's consensus.

Sliding up the income statement to revenue, the street sees average sales projections of $10.23 billion for this year and $10.93 billion for next year. The typical hotel chain trades at 2.13 times sales. Again, we break out the trusty calculator to determine potential targets of $22.13 and $23.65 for 2014 and 2015, respectively.

Overall: Hilton Worldwide (NYSE: HLT) will have to trade above industry norms for the services company to hit Steven Kent's $26 price-target. Although it is possible, it's also likely that upside will be capped for the same reason Kent mentions, HLT's operations don't differ much from its peers; therefore, neither should its valuation.

Winklevoss twins launch the bitcoin 'Winkdex'

NEW YORK (CNNMoney) Say hello to the Winkdex, yet another Bitcoin price tracker -- this time brought to you by the Winklevoss twins.

It is the latest foray into the world of Bitcoin for Cameron and Tyler Winklevoss, twin investors known for their legal battle over the creation of Facebook.

Winkdex "blends" the going price of a Bitcoin at the three largest exchanges. It's something you can already find on websites like Preev and Coindesk, but those don't have the Winklevii brand name behind them.

The point of the Winkdex? It will provide the price for the twins' planned Bitcoin-related investment fund, according to a Tuesday filing with the Securities and Exchange Commission.

The brothers are launching their own exchange-traded fund, called the Winklevoss Bitcoin Trust, to provide everyday investors a way to dip their feet into Bitcoin investing.

The price of a single Bitcoin is anything but stable. Since December, it's been as high as $1,163 and as low as $382. It's now at about $595. Lots of things weigh heavily on its value, because it's a new currency that's under close review by regulators, sometimes tied to online black markets like Silk Road and often the target of hackers looking for flaws in the digital network.

The Winklevoss brothers did not respond to requests for comment.

Winkdex got hounded for having a ludicrous sounding name that reminds everyone of Windex or Pokédex.

But those who hope to see the digital currency flourish welcomed its creation. The prevailing view is that having legitimate investors gives the currency some more credibility.

Where Baby Hedge Funds Come From

A recent study finds that a significant number of hedge funds launched last year received seed capital, but no new fund sought investments through advertising.

The study by Seward & Kissel, a law firm, found that some 40% of 2013 hedge fund rollouts greater than $75 million (about 15% of all fund launches) obtained seed capital.

In addition, 43% of funds in the study had some form of founders' capital.

The study said prominent new firms entered the seeding arena in 2013, joined by several smaller opportunistic one-off investors, such as family offices and high-net-worth individuals.

Seed investments in many of the bigger deals tended to be in the $75 million to $150 million range, typically with a two- to three-year lockup. Smaller deals, usually with less well-known managers, generally attracted seed capital in the $10 million to $50 million range.

No fund in the study engaged in general solicitations and advertising, which is now permitted under the JOBS Act by Securities Act Rule 506(c).

Seward & Kissel said its study covered the 2013 hedge fund launches sponsored by U.S.-based managers that were its clients. It said the number of funds was “large enough to extract a representative sample of important data points that are relevant to the hedge fund industry.”

Other Findings

The study found that 65% of new funds examined deployed equity or equity-related strategies, about the same as in the firm’s 2012 study.

Of the remaining non-equity funds, about 12% were multistrategy/macro offerings, approximately 8% were credit or CTA strategies and the rest consisted of other strategies.

Management fees were on average higher for non-equity strategies than for equity ones: 1.825% versus 1.58% (down from 1.95% and 1.67% in the 2012 study). This rate differential, Seward & Kissel said, was due primarily to the higher overhead typically needed to implement many non-equity strategies.

Incentive allocation rates continued to be pegged at 20% of net profits across all strategies, according to the data.

The study found that 89% of funds permitted quarterly or even less frequent redemptions, while only 11% allowed monthly redemptions in 2013 — down from 36% of funds in 2012. Moreover, 85% of all funds had some form of lock-up, up from 58% in 2012.

Sponsors of both U.S. and offshore funds set up master-feeder structures more than 90% of the time, generally utilizing the Section 3(c)(7) exemption.

Most offshore funds were established in the Cayman Islands, although other jurisdictions, such as Bermuda and the Bahamas, sought to reestablish their respective presences in the industry, according to the study.

In addition, the stated minimum initial investment was set at $1 million in approximately 70% of the funds. Ten percent of the funds had a $250,000 minimum, and 20% of the funds required a hefty $5 million or more.

Nu Skin: On Second Thought…

Nu Skin’s shares plunged yesterday after the company released strong fourth-quarter earnings but said 2014 would be impacted by China’s investigation into its selling practices. It also postponed the release of its 10-K

Bloomberg

Today, however, investors are reconsidering, as Nu Skin’s shares head higher thanks to supportive analysts. JPMorgan’s John Faucher and team, for instance, are “encouraged by the language in the press release.” They explain why:

The company did not really provide any additional color on recent events on the conference call. However, in the press release they indicated that they “are diligently preparing to resume normal business activities [in China] as soon as possible, subject to resolution of the China regulatory review". Management is already improving their sales leader training processes and we expect more changes in the model in China, as the situation evolves. Once a resolution is reached, we do
expect the company's China business to be largely intact.

Deutsche Bank’s Bill Schmitz and team call Nu Skin’s valuation compelling:

While China overhang persists, company is working closely with government to find a speedy resolution, which likely includes changes to training and recruiting policies. In the interim, growth will clearly slow as company stops recruiting in this core market but we believe this is already more than priced into the stock at these levels and continue to see a product and channel driven growth stock priced like a broken value story.

Top Financial Companies To Buy Right Now

Valuation supports Buy rating and $110 target…DCF yields $110 target price, assuming 4.6% sales growth and 0.3 pts of annual margin expansion through 2021 (8% WACC based on CAPM). Downside risks include continued headline risk, developing markets slowdown, geopolitical challenges, legal, regulatory and corruption issues, stronger dollar and disappointing new product results.

Shares of Nu Skin have gained 5.4% to $78.63, while Herblife (HLF) has risen 1.5% to $66 and Usana Health Sciences (USNA) has advanced 5% to $75.53.

U.S. Home Prices Fall Amid Brutal Winter Cold

Gene J. Puskar/AP WASHINGTON -- U.S. home prices fell for the second straight month in December as brutally cold weather, tight supply and higher costs slowed sales. The Standard & Poor's/Case-Shiller 20-city home price index declined 0.1 percent from November to December, matching the previous month's decline. The index isn't adjusted for seasonal variations, so the dip partly reflects slower buying as winter weather set in. For all of 2013, however, prices rose by a healthy 13.4 percent, mostly because of big gains earlier in the year. That was the largest gain in eight years. Yet that increase may be putting some homes out of reach for many buyers. The Case-Shiller index covers roughly half of U.S. homes. The index measures prices compared with those in January 2000 and creates a three-month moving average. The December figures are the latest available. "Gains are slowing ... and the strongest part of the recovery in home values may be over," said David Blitzer, chairman of the S&P's index committee. "Higher home prices and mortgage rates are taking a toll on affordability." Even some cities in warmer areas saw declines. Home prices in Phoenix fell 0.3 percent, the first drop after 26 months of big increases. Only six cities recorded higher prices in December: Dallas; Las Vegas; Miami; San Francisco; Tampa, Fla.; and Washington, D.C. Home prices in all 20 cities rose compared with a year ago. The housing market has weakened in recent months after a healthy recovery in 2013. Sales of existing homes plunged in January to the slowest pace in 18 months. And builders broke ground on 16 percent fewer homes in January compared with December, the Commerce Department said this week. That was the second straight decline. Builders also requested fewer permits in January for the third straight month, suggesting construction remained weak this month. The declines came after existing home sales reached 5.1 million in 2013, the best showing in seven years. And builders started work on 976,000 houses and apartments last year, the most in six years.