Why Raven Industries' Shares Dropped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of industrial supplier Raven Industries (NASDAQ: RAVN  ) fell as much as 11% today after reporting first-quarter results.

So what: Revenue fell 12% to $103.7 million, missing the $112.6 million estimate. As a result, net income fell 26% to $14.0 million, or $0.38 per share, which was $0.06 below estimates.

Now what: Management expected headwinds, but they were a little stronger than anyone thought, which led to the big miss. The good news is that costs were controlled well, leading to a smaller miss on the bottom line than you might expect, with a 12% drop in revenue. Still, I don't see a reason to buy the discount until we see conditions improving on both the top and bottom line.

Interested in more info on Raven Industries? Add it to your watchlist by clicking here.

REITs: The Writing Is On The Wall

I have been following the markets (as an institutional investor and as an individual) for more than two decades, and there is one observation or pattern that is consistently repeated: When a sector or a market is fully valued or over-valued, you will see institutional exit strategies employed. Put differently, the "smart" money sells into an over-valued market to realize the highest potential profits.

As well, you will notice that when the low hanging growth fruit (we'll call this organic growth) has been picked, merger activity will increase in order to grow further. This can be accomplished through cost cutting and eliminating overlapping positions and taking out physical costs depending on the sector. We'll call this "synergies."

We are currently seeing that in the REIT sector.

Taking a look at the "exit strategy" indicator, we expect that when there are high multiples (rich valuations) more firms will bring properties and REITs to market. The REIT universe (as calculated by BMO) currently trades at an 18x FFO multiple (18.4x forward). To put this in context, it is the highest since the financial crisis, as you would expect and approximately two turns lower than the 2005-2006 time frame (20.7x and 19.8x, respectively). While lower, the current economic environment doesn't make me think it should be at the same level, or for that matter, the level it is at.

Taking a look at the "exit strategy" indicator, we see the big daddy of them all: Blackstone's (BX) proposed IPO of Brixmor (a large chunk of the old Centro Group). This is shaping up to be the biggest retail REIT IPO in decades.

A little background from the SEC S1 filing:

Brixmor is an internally-managed REIT that owns and operates the largest wholly-owned portfolio of grocery-anchored community and neighborhood shopping centers in the United States. Our IPO Portfolio is comprised of 522 shopping centers totaling approximately 87 million sq. ft. of GLA. 521 of ! these shopping centers are 100% owned. Our high quality national portfolio is well diversified by geography, tenancy and retail format, with more than 70% of our shopping centers anchored by market-leading grocers. Our four largest tenants by ABR are The Kroger Co. ("Kroger"), The TJX Companies, Inc. ("TJX Companies"), Publix Super Markets, Inc. ("Publix") and Wal-Mart Stores, Inc. ("Walmart").

As the retail sector trades at an 18x multiple currently with a mere 4.7% FFO growth estimate (versus a 19x and 7.5% growth estimate in the 2005-2006 "go go" years), one might infer -- as I have -- that Blackstone sees this as an opportune time to engage in risk transfer (prior to rising rates and multiple contraction).

Another indicator is the "exit strategy through merger" activity which is also a "growth through merger" strategy. This is one we have been seeing more of recently. Two top examples are American Realty Capital Properties, Inc.'s (ARCP) acquisition of the non-traded REIT American Realty Capital Trust IV ("ARCT IV") and W.P. Carey's (WPC) $2.4B acquisition of the non-traded REIT Corporate Property Associates 16-Global Inc.

Let's go to the tapes:

American Realty focuses on the effect of the transaction on its business more than the rationale from ARCT IV's perspective. Its perspective is stated as such:

Attractive Return to ARCT IV Stockholders: Minimum total return of 31% to ARCT IV stockholders, including a full return of gross invested capital, a 22.5% share premium (assuming the guaranteed floor stock consideration value) and dividends paid since inception, assuming 100% stock election.

As W. P. Carey's President and CEO Trevor Bond stated:

"We are pleased to announce a merger transaction that we believe is beneficial to both W. P. Carey and CPA®:16 - Global investors. In addition to providing liquidity to CPA®:16 - Global investors, it will significantly increase! W. P. Ca! rey's asset base..."

Going a little further back, we see Realty Income (O) becoming the exit strategy for American Realty Capital Trust (here):

Premium to Share Price and Asset Values This transaction enables the shareholders of American Realty Capital Trust to capitalize on the recent upward price movement of the shares of ARCT, and to achieve a premium valuation for their shares. Furthermore, ARCT's assets were acquired at an opportune time in the market. This transaction allows ARCT's shareholders to realize a premium over their purchase price.

In a low interest rate environment, we can also get a decent feel for a company's opinion of share prices. If you are buying a fully (over) priced asset, you want to use the cheapest capital you can. If the market is overvalued, a company's shares are cheap currency. Of the above referenced transactions, we see the following capital being used:

American Realty Capital Properties/American Realty Capital Trust IV:

American Realty Capital Properties offered 2.05 of its shares or $30 in cash for each share of the other REIT. The stock offer is worth about $31 per share.

This I found interesting as there is a cash component, but it is limited to 25% of the ARCT IV shares outstanding and has tax implications.

W.P. Carey/CPA 16:

Subject to the terms and conditions of the merger agreement, CPA®:16 - Global stockholders will receive shares of W. P. Carey common stock for their shares of CPA®:16

Realty Income/ARCT:

The acquisition will be financed by Realty Income directly issuing $1.9 billion of its common stock to American Realty Capital Trust shareholders

The REIT sector as a whole has seen decent returns over the last few years, but has slowed during 2013 and going forward, it should have a difficult time keeping up with the broader market due to a combination of valuation and the prospect of rising rates.

Bottom Line: The REIT sector as a whole appears fully valued given the econom! ic outloo! k as well as the prospect of rising rates. Sector and security selection will be the driving force behind outperformance.

Source: REITs: The Writing Is On The Wall

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. (More...)

Additional disclosure: This article is for informational purposes only, it is not a recommendation to buy or sell any security and is strictly the opinion of Rubicon Associates LLC. Every investor is strongly encouraged to do their own research prior to investing.

The Future of Solar Financing

Ten years ago, it seemed impossible that solar power on rooftops would become a widespread reality. Today, the question is why it's not growing faster. Companies such as Sunrun, Clean Power Finance, SolarCity (NASDAQ: SCTY  ) , and SunPower (NASDAQ: SPWR  ) are all leading the charge in growing solar leasing for rooftops, blowing to top off the traditional energy model. The biggest hindrance is consumer awareness at this point. 

Solar leasing has a big impact on utilities, customers, and financiers and today I'll focus on how installers, banks, and even utilities are looking at solar financing.

The utility scale boom
The current growth in residential solar wouldn't be possible without SunPower and First Solar (NASDAQ: FSLR  ) first proving the efficacy of solar on a large scale. The two companies have built hundreds of megawatts of projects over the past decade and have proved that you can model the output of solar power and turn it into an investable asset. Projects of 25 MW+ are still the biggest driver of installations in the U.S., and they're financed very much like mortgages or a depreciating assets. 

In utility-scale projects, the numbers get big very quickly. Berkshire Hathaway's subsidiary MidAmerican Energy just announced $1 billion in financing for the SunPower build Antelope Valley solar projects, now known as Solar Star 1 and 2. The notes are similar to a mortgage, paying 5.375% interest an amortizing semi-annually. 

Bonds or notes are an easy way to finance big projects like this, but for investors, the future is in residential and commercial solar. And that market has taken a lot more creativity to unlock. 

The solar lease is born

SunRun offered the first U.S. solar lease in 2007, revolutionizing the way we thought about energy. No longer was solar power an endeavor that cost tens of thousands of dollars; it was a possibility without a big investment from homeowners.

For consumers, the solar lease of today usually comes with zero down and a set rate for the energy sold to the utility through net metering or a power purchase agreement. This rate is usually lower than the cost of power from the utility, so for consumers it's a way to save cash with no money down.

The model installers use is different and varies from company to company, which means the lease risk is different for each company.

Boots on the ground
Outside of SolarCity, none of the major financers owns a solar installation business. Instead, they partner with local installers to do the heavy lifting and they provide the financing that makes an installer's business go.

SunPower has taken the approach that bigger is better. It has thousands of dealers worldwide and 400 in the U.S. offering its leases and sales to customers. SunPower provides the financing, monitoring equipment, and software, and then pays the dealer for their installation and other lease-related services.

Sunrun is very similar, except it has a smaller network of 35 installers and doesn't make its own modules. It, too, offers software and other back-office services to installers to assist in the sale process. Sunrun, SolarCity, and SunPower use primarily equity financing for projects, which means they take the risk that modules will go bad or underperform expectations 10, 15, or 20 years down the road. This is key for investors, because that's when the most value will be generated.

Clean Power Finance is a software and financing company that works for a fee and doesn't own the financing, lowering its operating risk. The company will offer white-label financing so installers can look like they're offering their own branded financing.

SolarCity is the only company to do all of the above. It doesn't manufacture modules but it designs systems, sells them, lines up financing, and services the installation. 

The big difference between the models is where the incentives lie. Clean Power Finance is about getting financing deals done, SolarCity and Sunrun have incentives to install quality installation but no module alliance, while SunPower provides modules as well, locking it into an upstream product. In the end, the leasing product they offer is very similar; it's just that the modules will be different. 

The money
The big change over the past six years in solar has been the involvement from financiers. Bank of America, Goldman Sachs, Wells Fargo, and many others are now lining up to offer hundreds of millions of dollars in equity financing for distributed solar. They get a quick payback with little risk and a tax writeoff to boot, and the leasing company is able to finance its product. Everyone wins. 

So, how will solar financing change in the future?

The future of solar financing
For the time being, I think the current leasing model will remain as is. Banks are offering plenty of funding, and leasing companies are rapidly building out their business models. 

In utility solar, I think the current wave of giant utility-scale projects will be the last we see in the solar market for the next few years. Instead, the industry will focus on residential and commercial projects and potentially open up new financing options.

The first change will probably be securitization of solar assets. SolarCity, SunPower, Sunrun, and Clean Power Finance are all in the running to securitize solar, and we may see the first wave this year. Securitization could involve splitting off tax equity components, renewable-energy credits, monthly payments, and long-term assets. According to Sunrun CEO Edward Fenster, there are "lots of smart people" on Wall Street trying to figure out how to split solar assets in the most efficient way possible, and I think we'll see this sooner than later.

The next phase could involve opening up MLPs or REITs to the solar industry, something Congress has discussed in the past. If that happens, we may see solar developments traded publicly, and SolarCity or SunPower could push assets down to a REIT or MLP, the way oil and gas midstream companies do today.

Wall Street and Main Street are both opening up to solar, and with so much potential for the industry, investors will find lots of new ways to finance solar. That's good for upstream and downstream companies that count on low interest rates to make solar viable. 

Solar will continue to grow rapidly in coming years, and with the swelling of the global middle class, energy consumption will skyrocket over the next few decades as well. Investors need to balance both clean and traditional energy sources as a way to play these trends. We've picked one incredible energy company that presents a rare "double-play" investment opportunity today. We're calling it "The One Energy Stock You Must Own Before 2014," and you can uncover it today, totally free, in our premium research report. Click here to read more. 

Did Disney Just Kill 3-D TV?

With Walt Disney's (NYSE: DIS  ) ESPN unit announcing that it will shut down its 3-D production unit at the end of the year because of the cost and a lack of interest from customers, does this mean the 3-D TV business has failed?

Well, the answer is complicated.

Movie theaters that offer the 3-D experience have seen revenues decline since Avatar came out in 2010. While that movie brought the technology to the forefront and got a lot of people talking, a number of big-screen directors have since opted to not shoot their films in 3-D. As my colleague Travis Hoium pointed out earlier in the week, three out of the top four films last year weren't shot in 3-D. When customers aren't being fed the experience at the box office, they don't know how good it is and therefore don't know they should have it at home.

Furthermore, most Americans have probably upgraded their TVs in the past few years, with flat-screen TVs taking off around 2005 and 2006 and HDTVs following shortly after. So getting a few additional channels or movies in 3-D probably doesn't justify the expense of upgrading again. The recession certainly didn't help, either.

While I don't think 3-D is dead, I don't believe the technology is going to take the living room by storm anytime soon, and Disney apparently agrees. With live sports as a potential selling point for a lot of people who might have been thinking about going 3-D, Disney's decision to cut the cord will probably slow the growth of 3-D TVs even more.

As for Disney, this is probably a good move. Disney's stock has performed wonderfully year to date, up more than 28%, so some investors may be wondering why ESPN is cutting the 3-D unit, or why it recently announced that it's laying off employees in an effort to cut costs. After all, the stock has outperformed the Dow Jones Industrial Average (DJINDICES: ^DJI  ) by 13.34% this year.

But Disney's management knows that for the company to continue to perform at a high level, it must always be looking for ways grow revenue, save money, and add value. In other words, Disney's recent cuts may just be an example of why the stock has performed so well -- even if it means 3-D sports won't be coming to your living room anytime soon.

It's easy to forget that Walt Disney is more than just the House of Mouse. True, Disney amusement parks around the world hosted more than 121 million guests in 2011. But from its vast catalog of characters to its monster collection of media networks, much of Disney's allure for investors lies in its diversity, and The Motley Fool's premium research report lays out the case for investing in Disney today. This report includes the key items investors must watch as well as the opportunities and threats the company faces going forward. So don't miss out -- simply click here now to claim your copy today.

Top 5 Growth Stocks To Invest In Right Now

2 Huge Recent Developments for Oil and Natural Gas

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Top 5 Bank Stocks To Invest In Right Now

Earnings season has begun, and on Friday JPMorgan Chase (NYSE: JPM  ) will release its latest quarterly results. The key to making smart investment decisions on stocks reporting earnings is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way you'll be less likely to make an uninformed, knee-jerk decision.

As a key financial stock in the Dow Jones Industrial Average (DJINDICES: ^DJI  ) , JPMorgan has held up reasonably well in the aftermath of the financial crisis, but it has also suffered some high-profile problems, most notably the infamous "London Whale" trading debacle that cost the bank billions of dollars. Can the JPMorgan stay on the road to a full recovery? Let's take an early look at what's been happening with JPMorgan over the past quarter and what we're likely to see in its quarterly report.

Top 5 Bank Stocks To Invest In Right Now: Bank of Nova Scotia (BNS)

The Bank of Nova Scotia (the Bank) is a diversified financial institution. As of October 31, 2011, the Bank offered a range of products and services, including retail, commercial, corporate and investment banking to more than 18.6 million customers in more than 50 countries around the world. The Bank has four business lines: Canadian Banking, International Banking, Scotia Capital and Global Wealth Management. In January 2012, the Company closed its acquisition of 51% of Banco Colpatria. In April 2012, the Company through Scotia Capital Inc. acquired Howard Weil Incorporated. In April 2013, Bank of Nova Scotia acquired a 50% interest in Administradora de Fondos de Pensiones Horizonte SA.

Top 5 Bank Stocks To Invest In Right Now: Citigroup Inc.(C)

Citigroup, Inc., a global financial services company, provides consumers, corporations, governments, and institutions with a range of financial products and services. The company operates through two segments, Citicorp and Citi Holdings. The Citicorp segment operates as a global bank for businesses and consumers with two primary businesses, Regional Consumer Banking and Institutional Clients Group. The Regional Consumer Banking business provides traditional banking services, including retail banking, and branded cards in North America, Asia, Latin America, Europe, the Middle East, and Africa. The Institutional Clients Group business provides securities and banking services comprising investment banking and advisory services, lending, debt and equity sales and trading, institutional brokerage, foreign exchange, structured products, cash instruments and related derivatives, and private banking; and transaction services consisting of treasury and trade solutions, and securiti es and fund services. The Citi Holdings segment operates Brokerage and Asset Management, Local Consumer Lending, and Special Asset Pool businesses. The Brokerage and Asset Management Business, through its 49% stake in Morgan Stanley Smith Barney joint venture and Nikko Cordial Securities, offers retail brokerage and asset management services. The Local Consumer Lending business provides residential mortgage loans, retail partner card loans, personal loans, commercial real estate, and other consumer loans, as well as western European cards and retail banking services. The Special Asset Pool business is a portfolio of securities, loans, and other assets. Citigroup Inc. has approximately 200 million customer accounts and operates in approximately 160 countries. The company was founded in 1812 and is based in New York, New York.

Advisors' Opinion:

• [By Louis Navellier]

  Citigroup provides consumers, corporations, governments and institutions across the globe with a range of financial products and services. A year-to-date drop of 46% for C stock has left shareholders shaking their heads throughout 2011.

10 Best Stocks To Own Right Now: Commonwealth Bank of Australia (CBA)

Commonwealth Bank of Australia (the Bank) is engaged in the provision of a range of banking and financial products and services to retail, small business, corporate and institutional clients. The Bank is a provider of integrated financial services, including retail, business and institutional banking, superannuation, life insurance, general insurance, funds management, broking services and finance company activities. Its operating segments include Retail Banking Services, Business and Private Banking, Institutional Banking and Markets, Wealth Management, New Zealand, Bankwest and Other. Its retail banking services include home loans, consumer finance, retail deposits and distribution. Its business and private banking include corporate financial services, regional and agribusiness banking, local business banking, private bank and equities and margin lending. The Bank and its subsidiaries ceased to be a substantial holder in Ten Network Holdings Limited, as of September 12, 2012. Advisors' Opinion:

• [By Dale Gillham]

  CBA has held up better relative to the 2009 low and has been less volatile than ANZ. Also, the retracement in 2011 was just under 50 per cent ($42.02) of the range from the 2009 low to the high at $60.00, whereas the other banks broke this level.

  Over recent months CBA has rebounded and is currently close to strong resistance around $49.50. Like ANZ, the overhead resistance may hold the stock back in the short term. However, if CBA jumps the immediate hurdle it also has the potential to move up over the coming months by around 10 per cent to between $53.00 and $56.50.

Top 5 Bank Stocks To Invest In Right Now: Commonwealth Bank of Australia (CBA.AX)

Commonwealth Bank of Australia (the Bank) is engaged in the provision of a range of banking and financial products and services to retail, small business, corporate and institutional clients. The Bank is a provider of integrated financial services, including retail, business and institutional banking, superannuation, life insurance, general insurance, funds management, broking services and finance company activities. Its operating segments include Retail Banking Services, Business and Private Banking, Institutional Banking and Markets, Wealth Management, New Zealand, Bankwest and Other. Its retail banking services include home loans, consumer finance, retail deposits and distribution. Its business and private banking include corporate financial services, regional and agribusiness banking, local business banking, private bank and equities and margin lending. The Bank and its subsidiaries ceased to be a substantial holder in Ten Network Holdings Limited, as of September 12, 2012.

Top 5 Bank Stocks To Invest In Right Now: U.S. Bancorp(USB)

U.S. Bancorp, a financial services holding company, provides various banking and financial services in the United States. It generates various deposit products, including checking accounts, savings accounts, money market savings, and time certificates of deposit accounts. The company originates a portfolio of loans comprising commercial loans and lease financing; commercial real estate; residential mortgage; and retail loans consisting of credit cards, retail leasing, home equity and second mortgages, and other retail loans. It also offers wholesale lending, equipment finance, small-ticket leasing, depository, treasury management, capital markets, foreign exchange, and international trade services to middle market, large corporate, commercial real estate, and public sector clients. In addition, U.S. Bancorp provides telebanking and automated teller machine (ATM) services, as well as cash management services. The company, through other subsidiaries, provides trust, private banking, financial advisory, investment management, retail brokerage services, insurance, and custody and fund services; and payment services, including consumer and business credit cards, stored-value cards, debit cards, corporate and purchasing card services, consumer lines of credit, and merchant processing. U.S. Bancorp primarily serves individuals, estates, foundations, business corporations, and charitable organizations. It operates a network of approximately 3,031 banking offices and 5,310 ATMs. The company was founded in 1863 and is headquartered in Minneapolis, Minnesota.

Advisors' Opinion:

• [By Philip van Doorn]

  U.S. Bancorp (USB_) of Minneapolis, for example, recorded a 2012 operating return on average assets (ROA) of 1.62%, according to Thomson Reuters Bank Insight, making it one of the best performers among large-cap banks. This performance was not an aberration, as the company was in the top five for return on average equity among actively traded U.S. bank stocks from the beginning of 2006 through the third quarter of 2012.

• [By Louis Navellier]

  U.S. Bancorp (NYSE:USB) provides its customers with lending and depository services, cash management, foreign exchange and trust and investment management services. Since this time last March, USB is up 19%. USB stock gets an “A” grade for operating margin growth, a “B” grade for earnings growth, a “B” grade for its ability to exceed the consensus earnings estimates on Wall Street, a “B” grade for the magnitude in which earnings projections have increased over the past months, an “A” grade for cash flow, and a “B” grade for return on equity. 

• [By Vodicka]

  Jerry W Levin, who is a Director at U.S. Bancorp (NYSE:USB), sold 1,133 shares on Sep 27 at $24.67 per share for a total value of $27,955. About the company: U.S. Bancorp is a diversified financial services company that provides lending and depository services, cash management, foreign exchange and trust and investment management services. The Company also provides credit card services, mortgage banking, insurance, brokerage, and leasing. U.S Bancorp operates in the Midwest and Western United States.

The Huge Mistake Millennials Are Making With Their Money

For decades, young adults have gotten themselves in trouble by maxing out their credit cards and digging themselves into a huge debt hole. Yet while millennials have developed what many believe is a healthy aversion to credit cards, their choice to give up on them entirely rather than using them prudently and responsibly will create its own problems.

A recent study from Fair Isaac's (NYSE: FICO  ) FICO took a look at the demographics of credit card use lately. What they found is that outstanding credit card debt among 18- to 29-year-olds dropped from just over $3,000 in late 2007 to a bit over $2,000 last October. That move comes as part of a broader reduction in overall indebtedness, with drops in outstanding mortgage, auto, and most other debt more than offsetting a substantial rise in student-loan debt. Even more surprisingly, the proportion of young adults going without credit cards entirely has risen to nearly one in six, almost double the level from late 2005.

Aren't millennials being smart about credit cards?
Many consumer-finance experts are applauding the decisions of young adults to avoid credit cards, noting the effectiveness of regulations like the CARD Act that limited access to credit cards for those under 21. Moreover, using alternatives like electronic payments and debit cards can help people avoid spending beyond their means, as such payment methods are usually tied to accounts that need to have money present for transactions to get approved.

President Obama signing the CARD Act. Source: White House.

The fact that more young people have chosen not to carry balances and pay high interest rates for unnecessary loans is an unqualifiedly positive result. Yet not having credit cards at all is one step too far, as it prevents young adults from enjoying many benefits that credit cards have over alternatives:

Credit cards offer built-in protection from fraudulent charges, with a dispute mechanism allowing you to question charges on your account. The law limits your liability for credit card losses at $50 even if you don't make a report until well after those charges are made. By contrast, the Electronic Fund Transfer Act sets a much higher liability limit of $500 if you don't report a loss promptly after you find out about it, and you could be responsible for all the losses if you wait more than 60 days after a statement is sent. That's at least one reason why major banks Prudent credit card use is the best way to establish a credit history that can help you improve your chances of qualifying for a mortgage, obtaining a car loan, or even seemingly unrelated things like getting a job. Certain transactions are a major hassle without a credit card. For car rentals, for instance, companies will often debit your checking account immediately for a deposit, yet a credit card authorization is sufficient without an immediate charge for credit card users. Many credit cards offer much more lucrative rewards like cash back or airline miles than you'll find with debit cards. The threat of future debit-card fees still exists. Even though Bank of America (NYSE: BAC  ) , Wells Fargo (NYSE: WFC  ) , and Citigroup (NYSE: C  ) all backed down from test programs or plans to start imposing fees for debit cards a couple years ago, there's nothing stopping them from potentially doing so in the future.

Many millennials answer these objections by arguing that they don't want to add to their debt levels. Yet there's no requirement that you misuse credit cards by carrying a balance. One strategy you can follow is to treat credit cards exactly as you would debit cards, entering every purchase in your checkbook and taking the money mentally out of your account. Then, all you have to do is make your payment in full every month to reconcile your account balance and get all the benefits of credit cards without any of the hassles.

Give credit a try
Not carrying a credit card balance is smart, but not having a credit card at all is a big mistake. If millennials are prudent enough to live without credit cards entirely, they should be able to avoid temptation once they have one -- while reaping the potential benefits that can come in handy from time to time.

Once you have debt under control, the smartest next step is to get your money to work harder for you. In our brand-new special report, "Your Essential Guide to Start Investing Today," The Motley Fool's personal finance experts show you why investing is so important and what you need to do to get started. Click here to get your copy today -- it's absolutely free.

Bad Earnings Distract the Dow From Housing's Boost

Ordinarily, you'd expect good news from the housing market to lift the stock markets to new record highs. That's certainly been a pattern that investors have counted on lately, and today's report that new-home sales jumped 8.3% to their highest level since mid-2008 only continued a three-month streak of sales gains. Moreover, new-home prices have also posted sharp gains, rising 7.4% from June 2012 as inventories fell below the four-month mark, reflecting tight supplies.

During earnings season, though, investors often ignore those macroeconomic positives and focus instead on individual companies, and earnings results are largely responsible for this morning's drop in the Dow Jones Industrials (DJINDICES: ^DJI  ) , which has fallen 23 points as of 10:55 a.m. EDT.

Contributing the most to the Dow's decline is Caterpillar (NYSE: CAT  ) , which is down 2.2%. The construction and mining equipment maker reported an even larger pullback in earnings and revenue than investors had expected, with earnings per share falling 43% on a nearly 16% decline in sales. Given the poor levels of global construction activity and the big declines in commodity prices during the second quarter, the news wasn't a huge surprise, but Caterpillar also cut its full-year 2013 earnings guidance by $0.50 per share to $6.50. Although the company will implement further cost-cutting measures throughout the rest of the year, Asia continues to weigh heavily on Caterpillar's sales, which dropped 21% in the region. Any recovery for Caterpillar will likely take longer than expected unless economies around the world rebound quickly.

Also falling is AT&T (NYSE: T  ) , down 1.8%. Even though the telecom giant managed to boost its revenue by 1.6%, earnings fell slightly as the company spent money on major promotional discounts to encourage trade-ins of old smartphones. Moreover, smartphone subsidies continue to weigh on near-term earnings, even though the company gradually recoups those subsidies with its higher-priced data plan. If the company can't start controlling its costs more effectively in the future, then further profit declines could prove inevitable for AT&T.

Finally, on a more positive note, American Express (NYSE: AXP  ) is the biggest winner in the Dow, rising 1.4% after it issued a statement responding to the recent European Commission proposal to implement caps on credit card and debit card transactions. The company noted that the proposal wouldn't regulate the discount rate it charges merchants and that caps wouldn't directly cover proprietary transactions and commercial payments. Given the hit that AmEx stock took when the proposals were first announced, investors appear to be breathing a sigh of relief that they won't have an even bigger impact on AmEx's business going forward.

5 Best Stocks To Watch For 2014

Earnings provide an interesting distraction as well as useful information, but the best investing approach is simply to choose great companies and stick with them for the long term. The Motley Fool's free report "3 Stocks That Will Help You Retire Rich" names stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of. Click here now to keep reading.

Best Biotech Stocks To Invest In Right Now

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, biotechnology company BioTime (NYSEMKT: BTX  ) has received the dreaded one-star ranking.

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

BioTime facts

�	�
Headquarters (founded)	Alameda, Calif. (1990)
Market Cap	$249.6 million Best Biotech Stocks To Invest In Right Now: Broadwind Energy Inc.(BWEN) Broadwind Energy, Inc. provides products and services to the energy, mining, and infrastructure sector customers, primarily in the United States. The company?s Towers and Weldments segment manufactures towers designed for two megawatt and larger wind turbines. This segment also manufactures specialty fabrications and weldments for mining and other industrial customers. Its Gearing segment engineers, builds, and remanufactures precision gears and gearing systems for wind, oil and gas, mining, and other industrial applications. The company?s Services segment offers a range of services, including non-routine blade and gearbox maintenance services for both kilowatt and megawatt turbines primarily to wind farm developers and operators. It also provides field services to the wind industry; dedicated drivetrain services; and industrial gearboxes precision repair and testing services. The company provides its products and services to various wind energy customers that include wi nd turbine manufacturers, wind farm developers, and wind farm operators, as well as oil and gas, mining, and other industries. It sells its products through its sales force and manufacturers' representatives. The company was formerly known as Tower Tech Holdings Inc. and changed its name to Broadwind Energy, Inc. in 2008. Broadwind Energy, Inc. is headquartered in Naperville, Illinois. Best Biotech Stocks To Invest In Right Now: PAR Technology Corporation(PAR) PAR Technology Corporation provides technology solutions to organizations and businesses in the hospitality industry worldwide. The company operates in two segments, Hospitality and Government. The Hospitality segment provides integrated solutions, including hardware and software applications for restaurants, hotels, resorts, and spas to the hospitality industry. It also offers customer support, including field service, installation, 24 hour telephone support, and depot repair. The Government segment performs complex technical studies, analysis, and experiments; develops solutions, and provides on-site engineering in support of advanced defense, security, and aerospace systems. The company, through its subsidiary, PAR Springer-Miller Systems, Inc, provides guest-centric property management solutions to hotels, resorts, spas, casinos, and other hospitality properties. PAR Technology Corporation was founded in 1968 and is headquartered in New Hartford, New York. Best Stocks To Buy Right Now: South American Iron & Steel Corporation Ltd (SAY.AX) South American Iron & Steel Corporation Limited, together with its subsidiaries, engages in the exploration and development of mineral properties for iron sands in South America. The company primarily holds interest in three iron sands projects, including Put煤, Maullin, and Aguas Claras projects located in Chile. It also has interests of gold, copper, lead/zinc, and antimony concessions in Yunnan Province, China. South American Iron & Steel Corporation Limited is headquartered in Sydney, Australia. Monday, July 22, 2013 The Gory Details on Six Flags Entertainment's Double Miss Six Flags Entertainment (NYSE: SIX  ) reported earnings on July 22. Here are the numbers you need to know. The 10-second takeaway For the quarter ended June 30 (Q2), Six Flags Entertainment missed slightly on revenues and missed estimates on earnings per share. Compared to the prior-year quarter, revenue dropped slightly. GAAP earnings per share shrank significantly. Gross margins were steady, operating margins grew, net margins contracted. Revenue details Six Flags Entertainment logged revenue of $363.7 million. The seven analysts polled by S&P Capital IQ foresaw revenue of $370.0 million on the same basis. GAAP reported sales were the same as the prior-year quarter's. Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates. EPS details EPS came in at $0.47. The four earnings estimates compiled by S&P Capital IQ predicted $0.68 per share. GAAP EPS of $0.47 for Q2 were 25% lower than the prior-year quarter's $0.63 per share. Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates. Margin details For the quarter, gross margin was 57.8%, much about the same as the prior-year quarter. Operating margin was 32.7%, 460 basis points better than the prior-year quarter. Net margin was 13.0%, 630 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.) Looking ahead Next quarter's average estimate for revenue is $517.8 million. On the bottom line, the average EPS estimate is $2.01. Next year's average estimate for revenue is $1.12 billion. The average EPS estimate is $1.66. Investor sentiment The stock has a two-star rating (out of five) at Motley Fool CAPS, with 46 members out of 65 rating the stock outperform, and 19 members rating it underperform. Among 18 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 14 give Six Flags Entertainment a green thumbs-up, and four give it a red thumbs-down. Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Six Flags Entertainment is outperform, with an average price target of $44.45. Can your portfolio provide you with enough income to last through retirement? You'll need more than Six Flags Entertainment. Learn how to maximize your investment income and "Secure Your Future With 9 Rock-Solid Dividend Stocks." Click here for instant access to this free report. Add Six Flags Entertainment to My Watchlist. Sunday, July 21, 2013 What Are the Main Risks and Opportunities in Merck's Cholesterol Drug Franchise? The Motley Fool's health-care show Market Checkup focuses this week on cholesterol, one of America's most notable health-care concerns. According to the CDC, approximately 71 million Americans have high cholesterol, and less than 50% actually get treated. High levels of LDL cholesterol, commonly known as "bad" cholesterol, can lead to dangerous health problems, including heart disease and high blood pressure. In the following segment, health-care analysts David Williamson and Max Macaluso discuss Dow component Merck's (NYSE: MRK  ) portfolio of cholesterol-lowering drugs, and how an ongoing clinical study could lower sales of one of its most successful franchises. One of the best parts of owning big pharma stocks is their attractive dividends, but smart investors know the importance of diversifying -- seeking high-yielding stocks from multiple industries. The Motley Fool's special free report "Secure Your Future With 9 Rock-Solid Dividend Stocks" outlines the Fool's favorite dependable dividend-paying stocks across all sectors. Grab your free copy by clicking here. Saturday, July 20, 2013 Top 10 Financial Companies To Own For 2014 April 25 (Bloomberg) --Japanese shares rose, with the Nikkei 225 (NKY) Stock Average advancing for a second day to its highest since 2008, before a Bank of Japan (8301) meeting. Canon Inc. (7751) and Nintendo Co. fell on disappointing earnings. Mitsubishi UFJ Financial Group Inc., Japan�� biggest lender, advanced 2.2 percent. Nippon Electric Glass Co. jumped 7.1 percent after industry bellwether Corning Inc. forecast growth for a product used in smartphones. Canon tumbled the most on the Nikkei 225 after projecting net income lower than analyst estimates on slumping demand for compact cameras. Nintendo lost 5.9 percent after the world�� biggest maker of video-game consoles posted profit that missed analyst estimates. The Nikkei 225 gained 0.6 percent to close at 13,926.08 in Tokyo. Volume on the measure was about 15 percent above than the 30-day average. The Topix Index (TPX) rose 0.7 percent to 1,172.78, with twice the number of stocks gaining as falling on the 1,698- member gauge. Top 10 Financial Companies To Own For 2014: Quintain Estates & Dev(QED.L) Quintain Estates and Development plc invests in, develops, and manages real estate properties in the Great Britain and the Channel Islands. It undertakes urban regeneration projects for hotel, residential, office, retail, and commercial properties. The company also invests and manages various properties, which include health care properties, such as nursing and residential care homes for the elderly, specialist care homes for those with long term disabilities, private hospitals, and care villages; science parks; student accommodation properties; and commercial properties consisting of office properties, and industrial and retail assets. Further, it rents and leases properties, as well as engages in the property trading activities. The company was founded in 1992 and is based in London, the United Kingdom. Top 10 Financial Companies To Own For 2014: Capitamall Trust (C38U.SI) CapitaMall Trust (CMT) is a publicly owned real estate investment arm of CapitaLand Ltd. The firm invests in income producing retail properties. It invests in the real estate markets of Singapore. CapitaMall Trust was founded in October, 2001 and is based in Singapore. 5 Best Stocks To Own For 2014: Unity Bancorp Inc.(UNTY) Unity Bancorp, Inc. operates as the holding company for Unity Bank that provides various commercial banking services. It accepts various deposits, which include personal and business checking accounts, time deposits, money market accounts, and regular savings accounts. The company?s loan portfolio comprises commercial, small business administration, consumer, mortgage, home equity, and personal loans. It operated 14 branches in Clinton, Colonia, Edison, Flemington, Highland Park, Linden, Middlesex, North Plainfield, Phillipsburg, Scotch Plains, South Plainfield, Springfield, Union, and Whitehouse, New Jersey; and 2 branches in Forks Township and Easton, Pennsylvania. The company was founded in 1991 and is headquartered in Clinton, New Jersey. Top 10 Financial Companies To Own For 2014: Boston Properties Inc. (BXP) Boston Properties, Inc., a real estate investment trust (REIT), together with its subsidiaries, engages in the ownership and development of office properties. Its properties are located in Boston, Massachusetts; Washington, D.C.; midtown Manhattan, New York; San Francisco, California; and Princeton, New Jersey. As of December 31, 2008, the company owned interests in 147 properties, totaling approximately 49.8 million net rentable square feet and structured parking for vehicles containing approximately 11.2 million square feet. Its properties also included 143 office properties, 1 hotel, and 3 retail properties. In addition, the company owned or controlled an undeveloped land totaling approximately 509.3 acres. Boston Properties, Inc. has elected to be taxed as REIT under the Internal Revenue Code and would not be subject to federal income taxes, if it distributes approximately at least 90% of its taxable income to its shareholders. The company was founded in 1970 and is ba sed in Boston, Massachusetts. Top 10 Financial Companies To Own For 2014: Debao Property Development Ltd (K2M.SI) Debao Property Development Ltd., an investment holding company, engages in the property investment, development, and management in the People�s Republic of China. It develops residential and commercial properties; and leases properties. The company builds structural projects and provides interior works for third parties; provides public utility engineering services; and engages in sale and distribution of construction materials. Debao Property Development Ltd. was founded in 2000 and is based in Foshan City, the People�s Republic of China. Top 10 Financial Companies To Own For 2014: Athens Bancshares Corporation(AFCB) Athens Bancshares Corporation operates as the holding company for Athens Federal Community Bank that provides financial services to consumers and businesses primarily in McMinn, Monroe, and Bradley Counties, Tennessee. It accepts various deposit products that include non-interest-bearing demand deposits, such as checking accounts; interest-bearing demand accounts, such as NOW and money market accounts; regular savings accounts; and certificates of deposit. The company?s loan portfolio comprises one-to four-family residential loans; non-residential real estate loans; construction loans for one-to four-family homes, and commercial properties, including retail shops and office units, and multi-family properties; land and land development loans; multi-family real estate loans; consumer loans for home equity loans and lines of credit, automobile loans, and loans secured by deposits; and commercial business loans to small businesses. It also provides title insurance services. T he company operates through seven branches located in Athens, Sweetwater, Etowah, Madisonville, and Cleveland, Tennessee. The company is headquartered in Athens, Tennessee. Top 10 Financial Companies To Own For 2014: Scintronix Corporation Ltd. (T20.SI) Scintronix Corporation Ltd, an investment holding company, provides design and manufacturing services in mechanical components/sub-assemblies and electronics products/modules for the automotives, telecommunications, instructment, optical, and medical industries. The company's services include mechanical design, electronics hardware/ASIC design, software/firmware development, industrial design, mould design, mould fabrication, plastic injection molding, and printed circuit board assembly, as well as various finishing processes, sub-assembly/assembly, and final box build activities. It designs, develops, manufactures, and sells electronic products, plastic injection moulds, plastic products, stamping tools, and die casting tools, as well as digital audio related parts. Scintronix Corporation supplies its products primarily to multi national companies in Asia, Europe, and the United States. The company was formerly known as TTL Holdings Limited and changed its name to Scintro nix Corporation Ltd in May 2009. Scintronix Corporation is based in Singapore. Top 10 Financial Companies To Own For 2014: ProShares Ultra S&P500 (SSO) NA Top 10 Financial Companies To Own For 2014: Kingsway Arms Retirement Reside(KWA.V) Kingsway Arms Retirement Residences Inc. engages in the ownership of retirement home properties in Canada. It primarily owns the Aurora Retirement Centre, a seniors housing facility located in Aurora, Ontario. The company was founded in 1997 and is based in Vaughan, Canada. Top 10 Financial Companies To Own For 2014: PennyMac Mortgage Investment Trust(PMT) PennyMac Mortgage Investment Trust is based in the United States. Friday, July 19, 2013 Why Cubist Pharmaceuticals' Shares Shot Higher Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis. What: Shares of Cubist Pharmaceuticals (NASDAQ: CBST  ) , a biopharmaceutical company devoted to developing acute care therapies, added 12% following the announcement of its second-quarter earnings results. So what: For the quarter, Cubist reported 12.2% revenue growth over the year-ago period, to $258.8 million, as its lead product Cubicin saw revenue jump 13.5%, to $227.1 million. Profit for the quarter decreased to $0.42 per share, from $0.56 per share last year. Still, this was certainly more than enough to excite investors, because Wall Street had been expecting just $254 million in sales and a profit of $0.40 per share. Also fueling today's gains was an update on the advancement of ceftolozane/tazobactam (previously CXA-201) in late-stage trials. Now what: This was another solid quarter for Cubist. As always, I'm a bit leery when a biotech stock gets a massive chunk of revenue from just a single drug -- in this case, Cubicin is responsible for nearly 88% of total revenue -- as it leaves the company exposed should a sales or safety problem arise with that drug. However, I'm also seeing the beginnings of a diverse pipeline. Ceftolozane/tazobactam, should it be approved for all three tested indications, including the treatment of ventilator-associated bacterial pneumonia, could have peak sales potential of anywhere from $1 billion to $1.3 billion according to varying estimates. If I were you, I'd be adding Cubist Pharmaceuticals to your Watchlist. It's no secret that biotech stocks like Cubist have been soaring recently, but the best investment strategy is to pick great companies and stick with them for the long term. The Motley Fool's free report, "3 Stocks That Will Help You Retire Rich," not only shares stocks that could help you build long-term wealth, but also winning strategies that every investor should know. Click here to grab your free copy today. Thursday, July 18, 2013 Lockheed Martin Wins Contract for F-35A and F-35B Fighter Jets Wednesday, July 17, 2013 Bernanke Report Leaves Dow Back Where It Started Though it's had its ups and downs this morning, the Dow Jones Industrial Average (DJINDICES: ^DJI  ) is just maintaining its course with a modest gain of 11 points as of 11:35 a.m. EDT. Though all eyes may be focused on Capitol Hill, investors don't need to waste their time on speculation. Once again it's become clear that actions speak louder than words. Bernanke says more of the same  Starting off his two-day testimony in front of the House Financial Services Committee, Fed Chairman Ben Bernanke was once again in the spotlight as investors try to figure out the future of the Fed's tapering plan. But anyone trying to glean even the smallest nugget of new information will be sorely disappointed, because he's said all of this before. The Fed's tapering is conditional upon continued improvements in the overall economic recovery, based on measurements from economic data that will change in the future and is not yet available. So there's no point for the average investor to get swept up in the hysteria we've seen over the past two months. As Bernanke reiterated this morning, tapering will likely begin later this year, but the Fed is flexible and will continue to be accommodating as necessary. Earnings   As an alternative to the current Fed drama, investors have a perfect opportunity to judge their next steps based on businesses' latest earnings reports. This morning provided the much-anticipated report from Dow component Bank of America (NYSE: BAC  ) . Since it was preceded by earnings announcements from the other big four banks -- JPMorgan (NYSE: JPM  ) , Wells Fargo (NYSE: WFC  ) , and Citigroup (NYSE: C  ) -- which all outperformed expectations, B of A had a lot of pressure to perform. It didn't disappoint. With a massive reduction in expenses helping boost overall efficiency, the bank reported a 63% rise in earnings compared to last year. The expectations on Wall Street were blown away as B of A's EPS of $0.32 beat the $0.25 analysts anticipated. The cost-cutting at Bank of America has seriously boosted its chances of big success down the road as the economy continues to improve and revenues increase. Of course, the one big area of focus for the bank's earnings was the mortgage operations. But much like with Wells Fargo's and JPMorgan's earnings reports, there were signs of weakness in the mortgage market that caused the banks to struggle to gain better footing. There is optimism growing, however, as yesterday's homebuilder sentiment index indicated that homebuilders are seeing more sales and anticipate better conditions over the next six months. Finding a focal point It's really hard not to get swept up into the Fed fever that's been swarming the market over the past few months. And there are plenty of reasons that the speculation over stimulus tapering is relevant to market conditions. But for long-term investors, getting distracted by a short-term transition period can be a costly mistake for your portfolio. For the banks mentioned above, there are plenty of concerns about the inevitable rise in interest rates -- from a slowdown in new mortgage applications to losses in investments -- but management is well aware of the risks and ready to take on the challenge. If you follow the Foolish tenets of investing and have come to the conclusion that the company you've invested in has long-term viability, let that be your focus instead of the whirlwind ups and downs that come with speculation. Many investors are terrified about investing in big banking stocks after the crash, but the sector has one notable standout. In a sea of mismanaged and dangerous peers, it rises above the rest as "The Only Big Bank Built to Last." You can uncover the top pick that Warren Buffett loves in The Motley Fool's new report. It's free, so click here to access it now. Is Elon Musk Just Plain Hyperloopy? We should know by now that no matter how over the top the best-laid plans of Elon Musk seem... well, you just can't dismiss them as wild fantasies likely to slip twixt cup and lip. Seriously, if someone other than Elon Musk says he envisions a totally new mode of transportation that could move people between the downtowns of Los Angeles and San Francisco (380 miles) in 30 minutes, is not weather dependent, and would never crash, one would have to dismiss that as a Tom Swiftian pipe dream. But that's just what Elon Musk announced last summer, and today he tweeted that real plans – alpha though those plans may be – for what he calls a Hyperloop transportation system, will be revealed by Aug. 12. There is no doubt that Musk gets things done. Despite plenty of naysayers (myself included), his Tesla Motors (NASDAQ: TSLA  ) has managed to produce a luxury plug-in electric sedan approaching long-range viability that has been getting rave reviews from the likes of not only Car and Driver but also Consumer Reports. The company has also managed to pull a non-GAAP profit out of its hat in this year's first quarter that allowed it to pay off its U.S. government loan early. It also saw its stock price quadruple since the beginning of the year. If that's not enough, there's Musk's SpaceX, the private company that designs, builds, and successfully launches rockets to make deliveries to the International Space Station, missions that NASA's Space Shuttle used to perform. But what in the world is the Elon Musk Hyperloop? He described it at last May's D11 conference as a "cross between a Concorde, a railgun, and air hockey table," a system that would cost "one-tenth of the cost" the planned California high-speed rail project. He even said last year, when he talked to PandoDaily, that the Hyperloop could be made "self-powering if you put solar panels on it, you generate more power than you would consume in the system. There's a way to store the power so it would run 24/7 without using batteries. Yes, this is possible, absolutely." There's one thing we do know of the Hyperloop. It won't run in a vacuum tunnel. Musk has already ruled that out. Speculation from Gizmag has the Hyperloop using electromagnetic pulses to push a capsule through a closed pneumatic tube at high subsonic speeds, say around Mach 0.90. Elon Musk followers, mark Aug. 12 on your calendars as Hyperloop Day. I wouldn't bet on Musk's plans being just Hyperloop hype. The Hyperloop will have to be for the future, but there is a good investment available today, a home-run opportunity that has been slipping under Wall Street's radar for months but won't stay hidden much longer. Forward-thinking energy players like GE and Ford have already plowed sizable amounts of research capital into this little-known stock... because they know it holds the key to the explosive profit power of the coming "no choice fuel revolution." Luckily, there's still time for you to get on board if you act quickly. All the details are inside an exclusive report from The Motley Fool. Click here for the full story! Tuesday, July 16, 2013 Legal Insider Trading for $6,000 a Month If you've been on the hunt for the market's Holy Grail, then I have good news for you. Not only does it exist, but you can have access to it for a few thousand bucks a month. And no, this isn't a sales pitch, or, at least, it's not my pitch. At the beginning of last week, Thompson Reuters announced that it was suspending its practice of releasing data from a closely watched consumer confidence survey to a subset of subscribers before the rest of the market had access to the information. For a mere $6,000 a month, a number of high-frequency traders had a two-second jump on the market. How big of an advantage was this? As James Stewart of The New York Times reported, it was "arresting." In the first 10 milliseconds of the two-second window this past Friday -- that is, the first time the report was issued without a head start -- only 500 shares of a leading S&P 500 (SNPINDEX: ^GSPC  ) exchange-traded fund changed hands. In the same 10 milliseconds last year, a staggering 200,000 shares were traded. The "news-feed" trade Known as the "news-feed" trade, this has been one of Wall Street's best-kept non-secrets over the past few years. A veritable cottage industry of data aggregators and providers has sprung up. According to The Wall Street Journal, "the delivery of machine-readable news will generate $75 million in revenue for financial-news providers this year, up almost 50% in five years." In addition to the Thompson Reuters/University of Michigan consumer sentiment survey, there's the Chicago Business Barometer distributed by the German financial exchange Deutsche Borse, the monthly manufacturing index supplied by the Institute of Supply Management, data about monthly shipments of appliances by the Association of Home Appliance Manufacturers, the Bedding Barometer which gauges the monthly sales of mattresses, and on and on. All told, there are dozens of such reports that paying customers can get access to before the rest of the market. But while it seems like this burgeoning trend must be bad for individual investors who don't have the means to compete on a level playing field, the evidence doesn't necessarily support that assumption. An appearance of impropriety It's impossible to deny that this practice appears, at least on its face, to be both unfair and bad for the markets. "It sends a really bad message to people, that markets aren't fair, transparent," my colleague Ilan Moscovitz observed. "The reason America's markets are the best and strongest markets in the world, is that individuals always believed they could get a fair trade," New York Attorney General Eric Schneiderman told the Times' Stewart last week. "If you did your research well, you weren't at a disadvantage because of information you couldn't possibly access. It wasn't a rigged casino." The practice also seems to fly in the face of the securities laws that govern the dissemination of information from publically traded corporations. The rules against insider trading are obviously paramount here. But even beyond these, there's Regulation Fair Disclosure, which mandates that all publically traded companies must disclose material information to investors at the same time. To be clear, the sale of information like this isn't illegal. "The activity is widespread and legal," Michael Rothfeld of The Wall Street Journal noted. "Federal securities law doesn't prevent investors from trading based on nonpublic information they have legally bought from other private entities." In addition, viewed from the perspective of economic theory, it might very well foster inefficiency. One of the fundamental predicates of a competitive market is that there is "perfect information," which means that all consumers and producers are assumed to have the same (and thereby simultaneous) knowledge of things like price, quality, and production methods. Clearly, this isn't the case when a subset of market participants gets access to critical data before others. Thinking beyond the headlines The idea that high-frequency traders exploit their preferential access to data in order to turn a quick and often generous profit makes for salacious and clickable headlines. But whether or not the practice is actually bad for individual investors is more nuanced. If you dig a bit further into it, in fact, there's reason to believe that all of the hoopla is much ado about nothing. Nobody would deny the fact that economic reports such as those discussed here are important. What fewer people appreciate, however, is that it's expensive to collect and disseminate the underlying data. "People need financial incentives to dig up information, and the marketplace benefits," former SEC Chairman Harvey Pitt told the Times. Richard Curtin, the economist who runs the consumer confidence survey at the University of Michigan, agreed. "Hardly anyone would pay for it if they didn't see a profit motive," Curtin told the Journal's Brody Mullins at the beginning of last month. "This research is totally funded by private sources for the benefit of scientific analysis, to assess public policy, and to advance business interests. Without a source of revenue, the project would cease to exist and the benefits would disappear." Beyond that, if you take a step back, you can't help but wonder: What's the difference between the market surging or tanking at 9:57 a.m. versus 10:00 a.m.? None, quite frankly, or at least not from the perspective of a long-term investor. "Ordinary investors aren't betting on consumer confidence numbers within two seconds of their release," Moscovitz said in the same conversation. Does it erode confidence in the market? Now, there is an argument that allowing high-frequency traders to game the system, if you will, is bad in a more general sense, by discouraging people from investing in stocks in the same way that they don't gamble at a casino. The results of a recent Gallop poll are instructive on this point. According to its estimate, only 52% of Americans own stock outright or as part of a mutual fund or self-directed retirement account. This was the lowest level since Gallop began monitoring the metric nearly 15 years ago. Charles Schwab, the founder and chairman of the eponymous The Charles Schwab Corp. (NYSE: SCHW  ) , touched on this in a recent op-ed piece. "[L]ooking at our capital markets today, we should all be concerned. It's becoming increasingly difficult for individual investors to compete on a level playing field. The system seems rigged against them. And they are responding by walking away." In response, I would say: Consider the source. Stockbrokers like Schwab, Morgan Stanley (NYSE: MS  ) , E*TRADE  (NASDAQ: ETFC  ) , and to a lesser extent, Bank of America's (NYSE: BAC  ) Merrill Lynch make money on trading commissions. And as day traders, their bread and butter customers, come to terms with their complete competitive disadvantage, they will presumably trade less. Beyond this, while individual investors may be abandoning individual stock ownership, as Schwab points out, the explanation behind the trend isn't clear-cut. The Gallop poll cited above, and quoted by Schwab to bolster his point, concludes that it's probably a function of Americans' ability to buy stocks more than anything else. Meanwhile, its 2011 survey had this to say: "The financial crisis and the losses it produced for many investors have combined with government bailouts and Wall Street scandals to turn many Americans away from investing in stocks." Our last remaining edge on Wall Street The point is, we really don't know whether or not high-frequency trading is bad for the market. To cite my colleague Ilan again, "There's a larger point about what markets have turned into, but public policy-wise, you often want to think of [high frequency trading] as an alternative to other forms of market making, not to investing." At the same time, we can say with greater certainty that there's little to no harm done to long-term investors. Activity like this may even play into our favor. "I'm a long-term investor," fellow Fool Morgan Housel recently wrote. "The fact that you and I don't have to play these insane short-term games is the last remaining edge we have over Wall Street. And frankly, it's enormous." The best investing approach is to choose great companies and stick with them for the long term. The Motley Fool's free report "3 Stocks That Will Help You Retire Rich" names stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of. Click here now to keep reading. Monday, July 15, 2013 How Bank of America Stock Pulled Even With the Market in the First Half of 2013 These days, there is perhaps no company people love to hate more than Bank of America (NYSE: BAC  ) . But despite all of the ill will, the first six months of 2013 have been far kinder to those who hold Bank of America stock that you might expect. Though we Fools know that six months doesn't make or break an investing thesis, it's always good to periodically check in on your holdings.  BAC Total Return Price data by YCharts. With Bank of America eeking out a small advantage over the S&P 500 so far this year, I think three major themes have dominated the storylines for Bank of America stock. A healthy balance sheet Source: YCharts. One of the key effects of the Great Recession was that banks had to undergo stress tests to make sure they had healthy enough balance sheets to survive trying times within the industry. On March 7th, it was revealed that Bank of America, along with 16 of the nation's 18 other largest banks, fared quite well in the stress test. One week later, the bank heard back from the Federal Reserve on its second round of major announcements: the Comprehensive Capital Analysis and Review. In plain English, this is when the Fed tells Bank of America whether or not it can return excess capital to shareholders. While shareholders may have been disappointed that it was revealed there would be no dividend bump on commons shares of Bank of America stock, they had to gain some solace from the bank's massive $10.5 billion share buyback. Earnings releases Source: YCharts. Though the stress test and CCAR releases certainly helped buoy Bank of America stock, the same cannot be said for the company's earnings releases so far this year. In mid-January, the bank announced results for the fourth quarter of 2012 that showed earnings of $0.03 per share on revenue of $21.7 billion. Though some investors were discouraged by the release, there were some golden nuggets: the company's mortgage business was booming as it started to catch up to peers JPMorgan Chase (NYSE: JPM  ) and Wells Fargo (NYSE: WFC  ) , Merrill Lynch was finally starting to show some strength, and its capital position was more than healthy. But when the time came to announce earnings once again in mid-April, these nuggets weren't enough to meet expectations. The company reported earnings of $0.10 -- analysts were expecting $0.22 -- on revenue of $23.5 billion. From the report, it was clear that the mortgage business wasn't bringing in as much profit as hoped for, that margins were shrinking and -- most notably -- that legal troubles wouldn't be going away anytime soon. Speaking of legal troubles... Source: YCharts. In 2011, Bank of America came to an agreement with AIG (NYSE: AIG  ) , as well as a host of others, to payout $8.5 billion over soured mortgages from Countrywide. Recently, however, AIG has challenged that settlement and wants to see a bigger payout from Bank of America. The issue went to trial in June, and while its too early to tell how that might play out, a loss could mean that the payout settlement could balloon to much more than the previous $8.5 billion. Given that information, its clear why the stock may have suffered when the trial started. Rosier times ahead? Last week, JPMorgan Chase and Wells Fargo both announced earnings figures for the second quarter that were a pleasant surprise to investors. Adding to the optimism was the fact that the CEOs for each bank were bullish on the economy's continued recovery.  Bank of America is set to announce earnings this Wednesday. While it may be tempting to dive in and buy shares before then, some folks here at the Motley Fool believe that there's only one Big Bank Built to Last. You can uncover the top pick that Warren Buffett loves -- and see if its Bank of America or one of its peers -- in The Motley Fool's new report. It's free, so click here to access it now. Sunday, July 14, 2013 5 Best Cheap Stocks To Invest In Right Now  The U.S. Federal Reserve's "E-Z Credit" policies are showing up in a place you might not expect...   Hong Kong has one of the world's freest economies. And even though it's technically part of China, it has a separate currency system... with a unique link to the U.S.   You see, Hong Kong has "pegged" its dollar to the U.S. dollar. If Fed Chairman Ben Bernanke makes dollars cheap to "goose" our stock and housing markets, Hong Kong's stock and housing markets get "goosed," even if they don't need it.   You can see this policy at work in the iShares Hong Kong Fund (NYSE: EWH)... The fund is up 50% in about 18 months. And last week, it broke out to close at a five-year high... 5 Best Cheap Stocks To Invest In Right Now: The Travelers Companies Inc.(TRV) The Travelers Companies, Inc., through its subsidiaries, provides various commercial and personal property and casualty insurance products and services to businesses, government units, associations, and individuals primarily in the United States. The company operates in three segments: Business Insurance; Financial, Professional, and International Insurance; and Personal Insurance. The Business Insurance segment offers property and casualty products and services, such as commercial multi-peril, property, general liability, commercial auto, and workers? compensation insurance. It operates in six groups: Select Accounts, which serves small businesses; Commercial Accounts that serves mid-sized businesses; National Accounts, which serves large companies; Industry-Focused Underwriting that serves targeted industries; Target Risk Underwriting, which serves commercial businesses requiring specialized product underwriting, claims handling, and risk management services; and Special ized Distribution that offers products to customers through licensed wholesale, general, and program agents. The Financial, Professional, and International Insurance segment provides surety and financial liability coverage, which uses a credit-based underwriting process; and property and casualty products primarily in the United States., the United Kingdom, Ireland, and Canada. The Personal Insurance segment offers property and casualty insurance covering personal risks, primarily automobile and homeowners insurance to individuals. It distributes its products through independent agents, sponsoring organizations, joint marketing arrangements with other insurers, and direct marketing. The company was founded in 1853 and is based in New York, New York. Advisors' Opinion: [By Jim Cramer] This insurer never ran into trouble like so many of its cohorts and yet somehow hasn't received the kudos its management deserves for steering the ship through the shoals of bad investments. Jay Fishman, the CEO, is easily the best executive in the insurance industry and Travelers will get its due in 2011, which will make it so that its 12% return in 2010 will seem quite small. I think it can trade to $68 and not be expensive, particularly when people begin to give the well-run insurers a nice premium to the ne'er-do-wells. [By Jon C. Ogg] The Travelers Companies Inc. (NYSE: TRV) is expected to rise by only 7.6% to $77.26 in 2013. That would represent a 52-week high but this one also has a yield of 2.6%. We would note that the street high target is actually all the way up at $87.00 and shares are currently very close to all-time highs. This insurance provider and financial services giant is not tied into healthcare so it has been immune to some of the ongoing risks. Travelers held up rather well in the recession but many investors do not even know it i one of the 30 DJIA components. [By Vodicka] Shares are trading around $51.50 at the time of writing, as against their 52-week trading range of $45.97 to $64.17. At the current market price, the company is capitalized at $21.64 billion. Earnings per share for the last year were $5.29, placing the shares on a price to earnings ratio of 9.77. It paid a dividend of $1.64 (a yield of 3.20%). Still in the memory is the financial crisis of 2008, and the mess that insurance companies like AIG managed to get themselves into. Travelers avoided that, but investors are fickle creatures and sometimes look at the short term rather than the long term. Travelers are well managed with good prospects going forward. Operating margins of nearly 13% hold well against rivals Hartford Financial Services Group (HIG) at around 10% and W.R. Berkley Corporation (WRB) at a shade under 14%. Good management should keep gross margins healthy (currently 26.5% versus Hartford’s 30% and W.R. Berkely’s 18%), and the company’s ongoing policy of share repurchases and dividend payout should continue to add value to shareholders. A good buy. 5 Best Cheap Stocks To Invest In Right Now: Freeport-McMoran Copper & Gold Inc.(FCX) Freeport-McMoRan Copper & Gold Inc. engages in the exploration, mining, and production of mineral resources. The company primarily explores for copper, gold, molybdenum, silver, and cobalt. It holds interests in various properties, located in North and South America; the Grasberg minerals district in Indonesia; and the Tenke Fungurume minerals district in the Democratic Republic of Congo. As of December 31, 2010, the company?s consolidated recoverable proven and probable reserves totaled 120.5 billion pounds of copper, 35.5 million ounces of gold, 3.39 billion pounds of molybdenum, 325.0 million ounces of silver, and 0.75 billion pounds of cobalt. The company was founded in 1987 and is headquartered in Phoenix, Arizona. Advisors' Opinion: [By Income Hunter] Freeport-McMoRan is down to about 40% of its 2011 high. Just like the entire gold market, the company based out and by early September began to make bullish moves. I suspect Freeport-McMoRan will grow as much as 70% when the 50-day moving average moves above the 200-day moving average. Jefferies downgraded Alcoa (AA) and has expressed preference for Freeport-McMoRan demonstrating some of the benefits of the QE3. Along with this, operating activities are up and there was a vast improvement in accounts receivables from Q1 to Q2. I like Freeport-McMoRan because it is an industry leader, drawing investments most likely from QE3, and an improvement of assets will lead to a substantial growth both as a short- and long-term investment. Top 5 Energy Companies To Own For 2014: Uranium Resources Inc.(URRE) Uranium Resources, Inc. engages in the acquisition, exploration, development, and mining of uranium properties, using the in situ recovery or solution mining process. It owns developed and undeveloped uranium properties in South Texas; and undeveloped uranium properties in New Mexico. The company?s primary customers include utilities who utilize nuclear power to generate electricity. Uranium Resources, Inc. was founded in 1977 and is based in Lewisville, Texas. Advisors' Opinion: [By Louis] Uranium exploration, mine development and production company Uranium Resources Inc.(URRE) has watched its stock value skyrocket 179% in the past 12 months -- and it is still trading for less than $2 per share! This is even more impressive when you consider that investors fled the sector in March after the nuclear power plant crisis in Japan, causing URRE to lose close to 50%. Since its March 16 low, shares have climbed 38% to $1.92. With a 52-week trading range of 38 cents to $3.98, look for shares to make their way higher as the sector continues to rebound. 5 Best Cheap Stocks To Invest In Right Now: Cardero Resource Corporation(CDY) Cardero Resource Corp., together with its subsidiaries, engages in the acquisition, exploration, and development of mineral properties in Mexico, Peru, Argentina, the United States, and Canada. The company holds a 75% interest in the Carbon Creek deposit, a metallurgical coal development project located in the Peace River Coal Field of northeast British Columbia, Canada. It also has an option to acquire 100% interest in the Pampa El Toro project, an iron sands deposit, located in southern Peru; option to acquire up to an 85% interest in the Longnose property in St. Louis county, northeastern Minnesota; and 100% leasehold interest in the Titac property, located in St. Louis county, northeastern Minnesota. The company was formerly known as Sun Devil Gold Corp. and changed its name to Cardero Resource Corp. in May 1999. Cardero Resource Corp. was founded in 1985 and is headquartered in Vancouver, Canada. Advisors' Opinion: [By Louis] Cardero Resource Corp.(CDY) is down about 18% since the start of 2011, but shares are still up 50% in the past six months. Currently at $1.80, this mineral exploration company is a penny stock worth buying with a 52-week range of $1 to $2.37. 5 Best Cheap Stocks To Invest In Right Now: Lattice Semiconductor Corporation(LSCC) Lattice Semiconductor Corporation designs, develops, manufactures, and markets programmable logic products and related software. The company offers field programmable gate array (FPGA) products, including LatticeECP family for deployment in wireless infrastructure and wireline access equipment, as well as in video and imaging applications; and LatticeXP for the security, surveillance, and display markets. It also provides programmable logic device (PLD) products comprising various versions of ispMACH4000 in-system programmable complex programmable logic device family; MachXO family that is designed for a range of low density applications; platform manager, power manager, and ispClock programmable mixed signal devices; and software development tools and intellectual property cores. The company sells its products directly to end customers through a network of independent manufacturers? representatives and indirectly through a network of independent sell-in and sell-through distributors. It primarily serves original equipment manufacturers in the communications, computing, consumer, industrial, military, automotive, and medical end markets. The company was founded in 1983 and is headquartered in Hillsboro, Oregon. Advisors' Opinion: [By Nancy Zambell] A survivor of the tech boom and bust cycle, Lattice Semiconductor Corp. (NASDAQ: LSCC) has managed to consistently grow its new product revenue by 28% per quarter since 2006. And that astounding figure includes one of the worst recessions in our history, as well as a downturn in the semiconductor market. The company’s primary customers are original equipment manufacturers (OEMs) in the communications, computing, consumer, industrial, automotive, medical and military end markets. Its strongest markets include the fastest-growing segments in our economy today. LSCC intends to focus on aggressively expanding its mid-range markets, as well as its products for lower-power, lower-cost applications. It also plans to continue targeting customized solutions for its customers, all the while, continuing to increase its flow of new product growth and entry into new markets. Saturday, July 13, 2013 Top 5 Cheap Companies To Invest In Right Now Over the past week, shares of natural gas engine designer Westport Innovations's (NASDAQ: WPRT  ) have jumped by more than 20%. This small, forward-thinking company is known to be a very volatile stock: It's still in high-growth mode and hasn't yet turned a profit, so the stock price is based more on expectations and emotions than earnings. The company's future depends on more widespread adoption of the engines it designs and builds critical components and systems for, most of which are powered primarily by natural gas, a cleaner, cheaper substitute for gasoline or diesel. So what happened over the past week that got investors so bullish on Westport Innovation's future? One critical factor behind Westport's rising stock price has been the depressed price of natural gas. The single most important advantage Westport has is the dramatic price difference between gasoline or diesel and natural gas, making it much more economic to fuel your vehicle with natural gas. While a natural gas engine can add $40,000 or more to the sticker price of a new Class 8 truck, Westport customers have been finding that the fuel savings pay for the up-front investment in as little as 14 months. The cheaper natural gas is compared to diesel, the more attractive Westport's value proposition becomes. So when the U.S. Energy Information Administration announced Thursday that natural gas inventories grew 8% faster than expected, natural gas prices tumbled by 4%. That continues a trend of expanding supply and lower prices that just keeps making Westport's engines more attractive. Top 5 Cheap Companies To Invest In Right Now: S&P Smallcap 600(PH) Parker Hannifin Corporation manufactures fluid power systems, electromechanical controls, and related components worldwide. Its Industrial segment offers pneumatic and electromechanical components, and systems; filters, systems, and instruments to monitor and remove contaminants from fuel, air, oil, water, and other liquids and gases; connectors that control, transmit, and contain fluid; hydraulic components and systems for builders and users of industrial and mobile machinery and equipment; critical flow components for process instrumentation, healthcare, and ultra-high-purity applications; and static and dynamic sealing devices. This segment sells its products to original equipment manufacturers (OEMs) and their replacement markets in the manufacturing, transportation, and processing industries. The company?s Aerospace segment provides flight control systems and components, including hydraulic, electrohydraulic, electric backup hydraulic, electrohydrostatic, and electro -mechanical components for precise control of aircraft rudders, elevators, ailerons, and other aerodynamic control surfaces. It also provides electronics thermal management heat rejection systems, and single-phase and two-phase heat collection systems for radar, ISAR, and power electronics. This segment markets its products primarily to OEMs in the commercial, military, and general aviation markets, as well as to end users. Its Climate and Industrial Controls segment offers systems and components primarily for use in the mobile and stationary refrigeration, and air conditioning industry; and in fluid control applications in various industries, such as processing, fuel dispensing, beverage dispensing, and mobile emissions. This segment serves OEMs and their replacement markets. Parker-Hannifin Corporation markets its products through direct-sales employees, independent distributors, wholesalers, and sales representatives. The company was founded in 1918 and is headquartered i n Cleveland, Ohio. Advisors' Opinion: [By Putnam] Parker Hannifin (PH) operates in a broadly diversified engineering industry with peers such as General Electric (GE) and 3M Company (MMM). Its products serve aerospace, commercial, mobile and industrial markets. The 2011 fiscal year was stellar for Parker. An all time record of $12.3 billion in sales was reached, a 23.5% increase. Net income increased a whopping 90%. The common stock currently trades at a price to earnings ratio of 10.5, below the industry average of 14.8 and historical average of 14. Price to book ratio is 2.02 with price to cash flow being 7.3. Making comparisons in a broadly diversified industry is difficult, since products and service offerings vary greatly between businesses. Therefore, the peer company’s business lines and products were used as the main selection criteria for peer analysis. Top 5 Cheap Companies To Invest In Right Now: Kohl's Corporation(KSS) Kohl?s Corporation operates department stores in the United States. The company?s stores offer private and exclusive, as well as national branded apparel, footwear, and accessories for women, men, and children; soft home products, such as sheets and pillows; and housewares primarily to middle-income customers. As of January 29, 2011, it operated 1,089 stores in 49 states. The company also offers on-line shopping on its Web site at Kohls.com. Kohl?s Corporation was founded in 1962 and is headquartered in Menomonee Falls, Wisconsin. Advisors' Opinion: [By Kevin1977]   Kohl’s Corporation operates department stores in the United States. KSS recently traded at $45.1 and has a 2.2% dividend yield. KSS lost 1.7% during the past 12 months. The stock has a market cap of $12.7 billion, P/E ratio of 11.3 and forward P/E ratio of 8.9. The stock has total debt/equity ratio of 0.24 and Beta of 0.93. Hot Net Payout Yield Companies To Invest In 2014: Progress Software Corporation(PRGS) Progress Software Corporation operates as an enterprise software company worldwide. Its products include Progress OpenEdge platform, which offers development tools, application servers, application management tools, and an embedded database; Progress Orbix to address enterprise integration problems with standards-based solutions; and Progress ObjectStore, an object data management system to store data faster than relational database management system or file-based storage system. The company?s products also comprise Progress Responsiveness Process Management suite for business users; Progress Control Tower, an interactive business control panel; Progress Sonic, which comprises an enterprise messaging system and the enterprise service buses; Progress Actional that provides operational and business visibility, root cause analysis, and policy-based security and control of services; Progress Apama, which offers tools for creating, testing, and deploying strategies for applicat ions, including algorithmic trading, market aggregation, smart order routing, market surveillance and monitoring, and risk management; Progress Savvion BusinessManager, a business process management software; and Fuse products that provide customers with access to professional open source integration and messaging software. In addition, it offers Progress DataDirect Connect products, which provide data connectivity components; Progress DataDirect Shadow to provide foundation architecture for standards-based mainframe integration; and Progress Data Services product set that offers data integration for distributed applications. Further, the company provides maintenance, consulting, training, and customer support services. Progress Software Corporation sells its products to independent software vendors, original equipment manufacturers, and system integrators through direct sales force and independent distributors. The company was founded in 1981 and is based in Bedford, Massac husetts. Advisors' Opinion: [By Chris Stuart] Progress Software(PRGS) recently cut its outlook for the fiscal second quarter ended in May, saying execution problems at its EDS (enterprise data solutions) segment would lead to a shortfall. Mark Schappel from Benchmark Securities (which rates Progress a "buy" with a $31 target) says the shortfall is a speed bump in the company's ongoing transformation, and not a sign of a slump in infrastructure spending. TheStreet Ratings has a $34 price target on Progress Software. Top 5 Cheap Companies To Invest In Right Now: Horizon Lines Inc.(HRZ) Horizon Lines, Inc., through its subsidiaries, provides container shipping and integrated logistics services. It ships a range of consumer and industrial items, such as refrigerated and non-refrigerated foodstuffs, household goods, auto parts, building materials, and other materials used in manufacturing. The company offers container shipping services to ports within the continental United States, Puerto Rico, Alaska, Hawaii, Guam, the U.S. Virgin Islands, and Micronesia. Its integrated logistics services comprise rail, truck brokerage, warehousing, distribution, expedited logistics, and non-vessel operating common carrier operations. Horizon Lines, Inc. also offers terminal services. The company operates terminals in Alaska, Hawaii, and Puerto Rico; contracts for terminal services in seven ports in the continental United States; and the ports in Guam, Yantian, and Xiamen, China, as well as Kaohsiung, Taiwan. In addition, it offers inland transportation services. As of Dec ember 20, 2009, the company owned or leased approximately 20 vessels and 18,500 cargo containers. Horizon Lines, Inc. serves consumer and industrial products companies, as well as various agencies of the U.S. government, including the Department of Defense and the U.S. Postal Service. The company was founded in 1956 and is based in Charlotte, North Carolina. Advisors' Opinion: [By Hutchinson] Horizon Lines (NYSE: HRZ) is the largest oceangoing shipping company in the United States with a dominant market position along protected shipping lanes. One look at the steady resurgence in shipping demand, coupled with the company’s improving financials, and it seems the worst is behind them — making now the perfect time to scoop up this stock at a discount. HRZ is up almost 30% since September, and I expect it to continue moving higher. Recent data show more goods are being manufactured, and they need to be shipped. Horizon will be one of the biggest beneficiaries. Buy HRZ on pullbacks under $5. Top 5 Cheap Companies To Invest In Right Now: Whole Foods Market Inc.(WFM) Whole Foods Market, Inc. engages in the ownership and operation of natural and organic food supermarkets. The company offers produce, seafood, grocery, meat and poultry, bakery, prepared foods and catering, coffee and tea, nutritional supplements, and vitamins. It also provides specialty products, such as beer, wine, and cheese; body care and educational products, such as books; and floral, pet, and household products. As of February 9, 2011, the company operated 302 stores in the United States, Canada, and the United Kingdom. Whole Foods Market, Inc. was founded in 1978 and is headquartered in Austin, Texas. Advisors' Opinion: [By Chris Stuart] Whole Foods Market(WFM) has turned in a lackluster performance over the past three months, with the shares down 6%, trailing the food-and-staples industry by over 7%. Investors, concerned about the sluggish economy, have avoided the company. But the news has been good, as the company issued a bright outlook for the remainder of 2011. At first glance, the shares don't look cheap. Based on the expectations from management for $1.87-$1.90 EPS for 2011, the stock trades at a P/E multiple of roughly 32 times 2011 earnings. But Bank of America-Merrill Lynch analysts argue the stock looks attractive and maintain a $68 price target. "We believe WFM's valuation is attractive given its strategy to improve its competitive price position and enhance its cost discipline, which broadens its growth prospects and supports an outlook for improving returns while lowering the company's operating risk profile," Merrill analysts say. TheStreet Ratings has a slightly more optimistic $77 price target on shares of Whole Foods Markets. Note that the shares jumped $4 on Tuesday, based on upbeat comments from the company's CEO, who said the natural-foods grocer is gaining market share and he is "feeling pretty bullish" about Whole Foods' future. Despite the gain, I would still consider an investment. [By James K. Glassman]  Executives at Whole Foods seem to have learned from their past money mistakes. After pushing too fast for growth and acquiring Wild Oats for a pricey $565 million in 2007, the company needed to pull out of its debt with an infusion of cash from private equity firm Leonard Green.  Now, the company's keeping its powder dry and its cash cushion stuffed. The high-end grocer is ramping up growth again, but this time, without depleting its cash hoard; it plans to open 25 new stores in this fiscal year that ends in October and 28 to 32 the following year. The company raised its dividend in January by 4 cents, to 14 cents per share. The stock, at $94.46, yields 0.6%.  Whole Foods had a cash flow of $755 million last year, with capital expenditures of $167 million. 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