3-D Printers Pick Up the Pace on Acquisitions

Interest in 3-D printing, the process of manufacturing by printing successive layers of material on top of each other to create a finished product, has surged recently, with technology blogs, business journalists, news radio, and even Taco Bell commercials touting the industry as a transformative step forward. Accordingly, the stock price of the two largest 3-D print companies, 3D Systems (NYSE: DDD  ) and Stratasys (NASDAQ: SSYS  ) , have soared, pushing valuations up to dizzying heights. What have the companies been doing with their high-flying stocks? So far, they've mostly been deploying them to rapidly consolidate their fragmented industry. News from the two big players this week shows they have no plans of slowing down.

Stratasys just completed its merger with the popular leader in desktop and personal 3-D printing, MakerBot, in August. On Tuesday, Stratasys announced that it will sell an additional 4 million shares with an option to sell 600,000 more to its underwriters, increasing the number of shares outstanding by more than 10%. The expected $400 million in new capital will be used to continue to pursue new acquisitions as well as to meet financial milestones associated with the MakerBot acquisition.

Let them decorate cake
Whatever acquisition target Stratasys had in mind, it won't be The Sugar Lab. 3D Systems, the oldest and largest developer and manufacturer of 3-D printers and print technology, announced Tuesday that it will acquire The Sugar Lab for an undisclosed amount. The husband-and-wife team behind The Sugar Lab took 3D Systems' Color Jet Printing technology and adapted it to work with a sugar and water solution, creating complex edible confections that can be used to top baked goods or simply admired as art.

While The Sugar Lab's products are beautiful, the company isn't likely to add much to 3D Systems. Unlike recent high-profile acquisitions such as the 3D Systems buyout of metals printer Phenix Systems, which owned around 50 patents related to printing with metals, The Sugar Lab has no intellectual property of its own, and indeed its platform was based on 3D Systems' intellectual property. I'd hazard that the undisclosed motivation for the acquisition may indeed have been as part of a settlement of a patent violation.

If The Sugar Lab adds appreciable value to 3D Systems, it would be largely through promotion and market-building, as the small company has received plenty of favorable press coverage and has worked with celebrity chefs such as Ace of Cakes star Duff Goldman. While printing with sugar is not a technically novel concept, creating 3-D printed foodstuffs will certainly spark the public imagination and drive continued interest in the technology.

At any rate, the acquisition won't put much of a dent in the $250 million in capital that 3D Systems raised through a new public offering back in May. 3D Systems stated at the time that the money raised would be used to fund acquisitions, and even after paying out around $20 million to acquire Phenix Systems, most of this cash is still ready to be deployed.

So who (and what) is next?
If Stratasys and 3D Systems have taught us anything, it's that no company is too big or too small to be bought up in their ongoing quest to consolidate the industry. The past year has seen everything from 3D Systems buying up what's almost literally a mom-and-pop shop to Stratasys completing a merger with Objet, an Israeli company that was at the time the third-largest 3D print company in the world. The only sure thing is that more acquisitions will follow, and soon.

So what does that mean for investors? Some analysts balk at the torrid pace of mergers and acquisitions, fretting that the parent companies will be unable to consolidate their operations successfully, that frequent public offerings dilute existing shareholder value, and that growth rates are kept artificially high by simply buying revenue through acquisition.

Certainly, this acquisition pace can't be kept up forever, but for now, I'm not worried: 3-D printing is still a relatively fragmented industry, and within that industry only 3D Systems and Stratasys are pure-play 3-D printers that have access to public capital markets. I think it's a smart move to take advantage of this access to capital to consolidate control over what is clearly a fast-growing industry. So far, the dramatic growth in free cash flow per share at these companies has easily outpaced the dilutive effects of new share offerings, and I believe today's frenzied pace of acquisitions is actually setting both companies up for longer-term success as they build up competitive moats by expanding their installed base of machines and acquiring more and more intellectual property.

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This will help both companies control the industry that The Economist compares to the steam engine and the printing press. Business Insider says it's "the next trillion dollar industry." And everyone from BMW to Nike to the U.S. Air Force is already using it every day. Watch The Motley Fool's shocking video presentation today to learn more about the 3-D print industry, and learn the investing strategy we've used to double our money on these three stocks. Click here to watch now!

Average 30-year mortgage rate dips to 4.3%

Average mortgage rates are falling again, a trend that could counteract signs of lower home sales in the next few months.

The average 30-year fixed-rate home loan rate dropped to 4.32% this week, according to data released by Freddie Mac on Thursday. That's down from 4.5% in last week's Freddie Mac survey, and below a peak of 4.58% last month.

The average 15-year fixed rate fell to 3.37% from 3.54% a week ago, Freddie Mac reported.

Interest rates have fallen since the Federal Reserve said Sept. 18 it would continue its $85 billion in monthly bond buying, which is aimed at keeping rates down for consumers and businesses.

Before that announcement, rates had risen more than a full percentage point since early May when markets began speculating on the Fed easing its bond purchases this fall.

Rates are likely to fall below 4%, said Chris Flanagan, head of mortgage research for Bank of America Merrill Lynch.

The higher interest rates in effect over the summer are believed to helped home sales, spurring buyers to close deals and beat further rate increases. August's existing home sales were the highest in six and a half years, the National Realtors Association says.

But newer data is mixed on whether those higher rates are holding some buyers back.

The National Association of Realtors reported Thursday that contracts to buy and sell existing homes dropped 1.6% in August, the third straight monthly decline in its pending home sales index. The index is designed as an indicator of future sales, which are typically finalized a month or two after contracts are signed.

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But the Mortgage Bankers Association weekly reports have noted a pickup in new applications for loans tied to home sales, which the trade group reports separately from refinancing loans.

The Mortgage Bankers Association on Wednesday reported a 7% increase in pu! rchase-money applications last week, following a 3% jump the week before.

So Bad It's Good: Furniture Brands International Ready to Rebound (FBN)

Have you ever looked back after a stock's rebounded and realized you missed the obvious hints that the bottom had been made (and you missed out)? Yeah, well, I suspect a bunch of traders are going to look back at Furniture Brands International, Inc. (NYSE:FBN) a few weeks from now and realize right now - as in today - is when FBN made a major bottom and began a bullish reversal.

That's my clever way of saying Furniture Brands International is a 'buy' now.

The clues leading me to that conclusion are two-fold. The first one is the blowout plunge from yesterday that unfurled on huge volume. FBN was already in a freefall, but things went from bad to worse on Tuesday with the stock's 38% plunge on massive volume. It's the pop in volume that really underscores the "blowout-ness" of the move. This looks like a final flushout of any weak-handed holders. In other words, it was a capitulation, leaving nobody behind but the buyers.

The second clue prodding my bullishness on Furniture Brands International, Inc. is today's bar. It's another high volume session, but this time, the stock's barely moved; both the open and the close (so far) are right in the middle of the day's high-low range. That's called a doji, and indicates indecision that's often seen at a major transition. In this case, the only transition possible is one from a bearish trend into a bullish one. The strong volume for FBN today along with the non-movement also says there's a lot of buying and selling here as the last of the sellers file out, but are matched by the same number of new buyers filing in.

Translation: The stock's at the pivot point between a net-bearish environment and a net-bullish one.

Great, but what caused the plunge in the first place, and is it going to be a problem going forward?

The killer was earnings, announced Tuesday morning. They weren't awful, but they were disappointing. The knee-jerk response was the expected bearish one; FBN took a hit. The thing is, the worst of the earnings news had likely already been baked in. Remember, Furniture Brands International, Inc. shares had been falling for several weeks leading up to Q2's earnings announcement. Traders saw it coming. A handful of observers jumped on the bearish bandwagon when the assumption became reality, but most of the selling that was going to happen based on earnings had already happened by that point. From here, only the buyers are left.

It admittedly feels awkward to try and catch a falling knife like Furniture Brands International has been of late. But, in trading, the spoils belong to the risk-takers.

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Here's How the 'Smart Money' Is Playing Gold Stocks

Part of the recent move up in gold prices to more than $1,400 an ounce and the uptick in gold stocks is a response to the crisis in Syria.

However, there is a lot more occurring just beneath the surface than geopolitics.

But investors would never get that sense from Wall Street, which is still in the midst of its perennial "hate gold" campaign.

Take, for instance, the hullabaloo over the liquidation by hedge fund manager John Paulson of a large part of his position in SPDR Gold Trust (NYSE: GLD).

In the second quarter of this year, Paulson cut his position in GLD from 21.8 million shares to 10.2 million shares. At first glance, he seemed to have lost faith in gold and was getting out.

But, there's more to that story...

The Financial Times reported that Paulson offset much of the sale of GLD by purchasing gold swaps on the over-the-counter (OTC) market.

Part of the reason may be cost. GLD has a management fee of 0.4%. The FT reported that with gold forward curve flattening, there's little cost to holding gold derivatives.

Another reason may be less transparency, making it easier to make a major move. In the OTC derivatives market, not everyone can figure out exactly what Paulson is doing with regard to investing in gold. 

Editor's Note: This chart, with a few simple lines, illustrates a major reason to be investing in gold now - take a look here.

The real underreported action, however, may not be in the gold market, but in gold stocks.

More Smart Money Investing in Gold Stocks

Li Ka-shing, 85, is one of Hong Kong's richest businessmen. Bloomberg estimates his net worth to be about $27 billion.

He is also known as one of the world's savviest investors, buying assets on the cheap.

And he recently made a major move into gold stocks.

One of his companies, Cheung Kong Holdings Limited (CHEUY), recently formed a 50/50 joint venture with Canadian Imperial Bank of Commerce (NYSE: CM) called CEF Holdings. They want to invest into beaten-down mining stocks and particularly gold equities.

The CEO of the joint venture, Warren Gilman, told Bloomberg, "Long term, gold is a good place to be."

He added that gold's drop in price this year "is great" because his firm can now make quality long-term investments into certain gold stocks on the cheap.

Gilman said to Bloomberg, "It's tougher and tougher to find economic gold deposits in safe jurisdictions. You [will] see mine supply struggling to keep up with demand long term. That's a great recipe for higher prices in the longer term."

The bullishness of Li Ka-shing and CIBC echoes thoughts expressed recently by Money Morning Chief Investment Strategist Keith Fitz-Gerald.

Fitz-Gerald said, "I could very easily make the argument that gold miners are unloved, undervalued and probably the worst investment of the year. But, we know from history that's precisely the best time to buy. History shows you want to buy when there's blood in the streets."

Gold Stocks Rebound

For individual investors who have fewer resources than Gilman to research specific gold-mining companies, an ETF such as the Market Vectors Gold Miners ETF (NYSEArca: GDX) is a good option for investing in gold stocks.

Since hitting bottom in early July, GDX has soared about 30%. This caught some investors' attention, and now inflows into the fund are up.

But it has more upside potential for investors - and if it dips again, that would be an even better time to follow Li Ka-shing and others into gold stocks.

More support for investing in gold stocks now is the gold-stocks-to-gold ratio flagged by Money Morning Global Resource Specialist Peter Krauth. Krauth said this indicator is flashing the best buy signal in a dozen years.

In fact, Krauth found four bullish gold-price indicators all flashing buy signals now. Take a look...

Related Articles:

Money Morning:
Why Gold Mining Stocks Are a Buy Now Money Morning:
Today's Gold Convergence Is Your Best Buy Signal Yet ETF Trends:
Paulson Slashes GLD Stake Financial Times:
Paulson's Faith in Gold Unshaken Despite ETF Sale Bloomberg:
Li Ka Shing -Backed CEF Seeking to Make Gold Investments ETF Trends:
A Double for Popular Gold Miners ETF? Maybe

Whither Japan Stocks: How Much Upside Is Left?

In the two business days following the September 7 announcement that Tokyo would host the 2020 Summer Olympics shares of Taisei Construction

A cartoon of the insides of a LNG carrier (Photo credit: Wikipedia)

(OTC:TISCY) on the Tokyo Stock Exchange (TSE) jumped 29%, while other large construction companies' shares also saw strong gains.

During the same period, shares of Taiheiyo Cement jumped 14%, Nippon Steel Sumitomo Metal (XOTC:NSSMY) rose 7%, while Mitsui Fudosan (OTC:MTSFY) rose 9%.

Advertising giant Dentsu's (OTC:DNTUY) shares rose 11%, while stocks in many other sectors expected to share in Olympics-related infrastructure building—including railroads and department stores—also advanced.

Was this stock buying just temporary Olympics euphoria? Will expectations of sharply higher earnings and profits from these companies and others be realized, or have buyers set themselves up for disappointment?

More long term, with the Nikkei 225 average at 14,742 yen, up 68% since last November (down only 6% from a May 22 high),  and with JPY/USD at 98.90, also some 30% lower than a year ago, how much appreciation may be left in Japanese stocks in general?

My sense is that for the Japanese market, measured by the Nikkei 225 and, particularly the broad market TOPIX, there is ample reason to be bullish. It is probably not too late to invest in companies, like Dentsu, that will benefit in what will surely be broadly impactful and profitable Olympics related spending.

Beside the Olympics, there is reason to be cautiously optimistic that the "third arrow" of Abenomics—reforms and new policies aimed at improving competitiveness and economic growth—will yield substantive and profit enhancing changes.

Finally, we continue to see in Japan's business sector bold restructurings and initiatives promising to improve competitiveness and profitability, and—critically—continuing world-leading technological innovations and applications.

An article in the September 20 Nihon Keizai Shimbun on the companies that cashed in on the 2012 London Olympics focused on the British advertising and communications agency, Chime PLC (OTC:CICPY). Just before the Olympics, Chime acquired the sports marketing and sponsorship boutique, iLUKA, that subsequently produced blow-out revenues from assisting sponsors to distribute tickets and coordinate advertising campaigns.

In the run-up to and during the 2020 Olympics Dentsu will be striving to emulate or surpass the stellar performance of Chime, even as we would expect Chime/iLUKA hope to repeat their London Olympics success in Tokyo. Dentsu's stock closed today in Tokyo at 3,815 yen, close to a YTD high of 3,920 set on May 14 and against a YTD low of 2,287 on January 9. The stock's ten year high was 4,360 yen set on April 3, 2006. At the current price, the stock offers a forward (forecast) dividend yield of 0.84% and forward EPS yield of 1.74%. The price-to-book (PBR) multiple is 1.88 times. The forward P/E is an eye-popping 57.6 times.

Taisei Construction closed in Tokyo at 488 yen, against a YTD high of 535 set on September 10 and YTD low of 247 set on April 2. The ten year high of 632 was set on January 31, 2006. PBR is 1.63 times and forward PER 31 times. Projected dividend yield is 1.02% and EPS yield 3.23%. Market value is some JPY 557 billion (USD 5.7 billion).

So far Abenomics' "third arrow" has been devoid of fundamental reforms and initiatives sufficient to move markets except by disappointing them.  This situation may be changing.  In a bit of grandstanding, Abe last week publicly sent back to its authors a corporate tax cutting proposal with a comment that it was "insufficient."  As Abe will surely decide to implement the first installment of a consumption tax increase (raising the rate from 5% to 8%) next year, he is under pressure and also wishes to provide some compensatory stimulus.  A substantial corporate income tax rate cut with a tacit quid pro quo from the business community to raise wages seems now possible.

Top Penny Companies For 2014

Major, bold restructurings and initiatives are being seen throughout Japanese corporate sector, in companies big and small.  One particularly noteworthy announcement has been from Kawasaki Heavy Industries (OTC:KWHIY). The September 8 Nihon Keizai Shimbun reported that Kawashi Heavy (KHI) will be moving its large LNG tanker building to China.

The worldwide trend to natural gas, and Japan's own post-Fukushima increased reliance on gas-fueled electric power generation, ensure growing demand for large LNG tankers. Industry estimates are for 300 new vessels by 2030 with a contract value of JPY 6 trillion (USD 61 billion). The bid price of an average LNG tanker is some USD 200 million, double a regular tanker. Profit for the builder is high.

Safe Harbor 401(k) Deadline Fast Approaching

mall-business owners still weighing the pros and cons of a retirement plan might want to consider a Safe Harbor 401(k) plan.

But they shouldn’t wait too long, because the deadline to put one in place for 2013 is Oct. 1 and the paperwork to set one up can take one to two weeks — so time is of the essence. 

The Safe Harbor enables small-business owners and any highly compensated employees to make the maximum contribution ($17,500 for those under 50 years of age; $23,000 if over 50) either tax-deferred or after tax in the Roth 401(k) regardless of income in 2012 and on-going.

Craig Hoffman, general counsel and director of regulatory affairs for the American Society of Pension Professionals and Actuaries, said that while Safe Harbor plans have been around for a while, “the changes made in the 2001 EGTRRA (Economic Growth and Tax Relief Reconciliation Act) significantly improved on the design.”

“They’ve been very popular with plan sponsors because they know that, for the cost of a modest … contribution that can be made on a matching basis, first, they’re encouraging their employees to participate, and, second, they avoid the need to go through the testing process, which is administratively burdensome.

“It’s an easy-to-run plan, and the employees benefit (as well as the employer),” he said.

The Safe Harbor 401(k), which can be used by either large or small businesses, really shines for small-business owners.

It allows business owners to avoid IRS nondiscrimination testing requirements that apply to standard 401(k) plans — the so-called “top-heavy rules,” said Hoffman, that were “an anachronism from the early 1980s that only applied to plans that primarily benefit owners of businesses.”

Prior to the EGTRRA action, calculations were required to determine whether the total account value of owners, together with key, or highly compensated, employees exceeded 60 percent of the total account value of all the employees in the plan. If so, that determined the matching contribution level required of the employer.

There were three problems with this approach: first, an employer wouldn’t necessarily know whether a plan was top-heavy until the determination date — which, for new plans, is the last day of the current plan year; in other words, not until the first plan year was completed.

Second, a plan determined to be top-heavy requires the employer to make a contribution for all non-highly compensated employees that is equal to the lesser of 3 percent of compensation or a percentage equal to the highest contribution rate of any highly compensated employee.

And third, according to Christopher Hoyt, professor of law at the University of Missouri School of Law in Kansas City, highly compensated employees who “are owners of more than 5 percent of the business, and the top 20 percent of employees who earn over $115,000” aren’t free to contribute as much as they might like toward their retirement in a standard plan.

A standard plan, Hoyt explained, “is subject to ‘ADP’ (average deferral percentage) testing, which limits the amount that the highly compensated can put into their accounts. Their contribution is based on the percentage of pay that the non-highly compensated put into their accounts.

Hoyt gave an example: If a non-highly compensated employee contributed 1, 2, or 3 percent to the plan, a highly compensated employee (or the business owner) would be allowed only to contribute 2, 4, or 5 percent instead of the IRS-allowed max.

But EGTRRA “carved out an exception,” Hoffman pointed out. Not only do employers not have to go through discrimination testing, but employers and highly compensated employees can contribute more money for their own retirements. “Small employers love it. … The top-heavy exemption is a very strong selling point for small businesses,” Hoffman said.

There are actually “two different types of safe harbor plans,” said Rob Austin, director of retirement research at Aon Hewitt.

The EGTRRA carve-out is one, and the second “was just introduced with the 2006 Pension Protection Act and came into being in 2008. … From our data, we find a total of 35 percent of clients have a 401(k) safe harbor plan. Eleven percent of these use the pre-PPA formula, and 24 percent use the newer one.”

There are pros and cons to each, as Austin explained.

“The pre-PPA formula requires employers to do one of two things: give everybody at least a 3 percent (contribution) of (their) pay into (the) plan, or have a matching contribution: 100 percent of the first 3 percent that an employee defers, plus 50 percent of the next 2 percent," he said.

Those contributions are immediately vested, he added, which will be unpopular with companies experiencing high turnover.

Then there’s the PPA formula, which incorporates auto-enrollment. The employer contribution is lower, too. “That’s more appealing,” said Austin. “It allows at most a two-year vesting requirement. If there’s high turnover in the first couple of years, (the employer isn’t on the hook for all those small balances).”

Hot High Tech Companies To Own In Right Now

Of course, no plan is perfect. Austin pointed out that with the PPA formula’s auto-enrollment, everyone has to be included, even if they’ve been working for years without participating. “An employer might have had 60 percent participation and then might see participation go up to 90 percent; all of a sudden their costs have escalated quite a bit.”

Safe harbor has another advantage, Austin said. A non-safe harbor plan that fails discrimination testing will force refunds of employee contributions, which makes employees liable for additional taxes. Safe harbor eliminates that risk.

Best Energy Companies To Watch For 2014

The surge of natural gas production in the U.S. has opened several doors that many didn't think were previously economically feasible: Manufacturers are reconsidering a move back to the U.S. for cheap energy prices, using natural gas as a transportation fuel is not a joke, and we're even debating the merits of exporting natural gas.

One thing is certain: Our ability to extract shale gas has given the U.S. a competitive advantage that could potentially hold for a decade. According to panelists at the 2013 Energy Forward conference at the University of Chicago's Booth School of Business, only China has a shot at effectively producing from shale gas in the next 10 to 15 years. Let's look at how the U.S. will keep that position for that long and one policy that will prevent others from doing the same.

Best Energy Companies To Watch For 2014: China Petroleum & Chemical Corporation(SNP)

China Petroleum & Chemical Corporation engages in the exploration, development, production, and marketing of crude oil and natural gas properties primarily in China. It operates 16 oil and gas production fields in China. As of December 31, 2010, the company?s estimated proved reserves of crude oil and natural gas consisted of 3,963 million barrels-of-oil equivalent comprising 2,888 million barrels of crude oil and 6,447 billion cubic feet of natural gas. It also engages in the refining of crude oil; marketing and distribution of refined petroleum products; and production and sale of petrochemical products that consist of intermediate petrochemicals, synthetic resins, synthetic fiber monomers and polymers, synthetic fibers, synthetic rubber, and chemical fertilizers, as well as owns and operates oil depots and service stations. The company was founded in 2000 and is based in Beijing, the People?s Republic of China. China Petroleum & Chemical Corporation is a subsidiary of China Petrochemical Corporation.

Best Energy Companies To Watch For 2014: Alterra Power Corp (MGMXF.PK)

Alterra Power Corp., formerly Magma Energy Corp., is a global renewable power company. It operates six power plants totaling 570 megawatt of capacity, including two geothermal facilities in Iceland, a geothermal plant in Nevada, British Columbia�� run of river hydro facilities and the province�� wind farm. As of June 30, 2011, its share of this production capacity was 315 megawatt. The Company also has a portfolio of exploration and development projects. The Company owns two geothermal power generation plants (the Svartsengi and Reykjanes Plants) and two geothermal exploration projects in Iceland (Eldvorp and Krysuvik) through its interest in HS Orka. In addition, it owns one geothermal power generation plant in Nevada (the Soda Lake Operation). In May 2011, it acquired Plutonic Power Corp. During the fiscal year ended June 30, 2011 (fiscal 2011), it sold a 25% interest in HS Orka to Jardvarmi slhf (Jardvarmi), which is a company-owned by a group of Icelandic pension f unds.

Top Dividend Companies To Buy For 2014: Linn Energy LLC (LINE)

Linn Energy, LLC (LINN Energy) is an independent oil and natural gas company. The Company�� properties are located in the United States, primarily in the Mid-Continent, the Permian Basin, Michigan, California and the Williston Basin. Mid-Continent Deep includes the Texas Panhandle Deep Granite Wash formation and deep formations in Oklahoma and Kansas. Mid-Continent Shallow includes the Texas Panhandle Brown Dolomite formation and shallow formations in Oklahoma, Louisiana and Illinois. Permian Basin includes areas in West Texas and Southeast New Mexico. Michigan includes the Antrim Shale formation in the northern part of the state. California includes the Brea Olinda Field of the Los Angeles Basin. Williston Basin includes the Bakken formation in North Dakota. On December 15, 2011, the Company acquired certain oil and natural gas properties located primarily in the Granite Wash of Texas and Oklahoma from Plains Exploration & Production Company (Plains).

On November 1, 2011, and November 18, 2011, it completed two acquisitions of certain oil and natural gas properties located in the Permian Basin. On June 1, 2011, it acquired certain oil and natural gas properties in the Cleveland play, located in the Texas Panhandle, from Panther Energy Company, LLC and Red Willow Mid-Continent, LLC (collectively Panther). On May 2, 2011, and May 11, 2011, it completed two acquisitions of certain oil and natural gas properties located in the Williston Basin. On April 1, 2011, and April 5, 2011, the Company completed two acquisitions of certain oil and natural gas properties located in the Permian Basin. On March 31, 2011, it acquired certain oil and natural gas properties located in the Williston Basin from an affiliate of Concho Resources Inc. (Concho). During the year ended December 31, 2011, the Company completed other smaller acquisitions of oil and natural gas properties located in its various operating regions. As of December 31, 2011, the Company operated 7,759 or 69% of its 11,230 gross productiv! e wells.

Mid-Continent Deep

The Mid-Continent Deep region includes properties in the Deep Granite Wash formation in the Texas Panhandle, which produces at depths ranging from 10,000 feet to 16,000 feet, as well as properties in Oklahoma and Kansas, which produce at depths of more than 8,000 feet. Mid-Continent Deep proved reserves represented approximately 47% of total proved reserves, as of December 31, 2011, of which 49% were classified as proved developed reserves. The Company owns and operates a network of natural gas gathering systems consisting of approximately 285 miles of pipeline and associated compression and metering facilities that connect to numerous sales outlets in the Texas Panhandle.

Mid-Continent Shallow

The Mid-Continent Shallow region includes properties producing from the Brown Dolomite formation in the Texas Panhandle, which produces at depths of approximately 3,200 feet, as well as properties in Oklahoma, Louisiana and Illinois, which produce at depths of less than 8,000 feet. Mid-Continent Shallow proved reserves represented approximately 20% of total proved reserves, as of December 31, 2011, of which 70% were classified as proved developed reserves. The Company owns and operates a network of natural gas gathering systems consisting of approximately 665 miles of pipeline and associated compression and metering facilities that connect to numerous sales outlets in the Texas Panhandle.

Permian Basin

The Permian Basin is an oil and natural gas basins in the United States. The Company�� properties are located in West Texas and Southeast New Mexico and produce at depths ranging from 2,000 feet to 12,000 feet. Permian Basin proved reserves represented approximately 16% of total proved reserves, as of December 31, 2011, of which 56% were classified as proved developed reserves.

Michigan

The Michigan region includes properties producing from the Antrim Shale formation in the northern ! part of t! he state, which produces at depths ranging from 600 feet to 2,200 feet. Michigan proved reserves represented approximately 9% of total proved reserves, as of December 31, 2011, of which 90% were classified as proved developed reserves.

California

The California region consists of the Brea Olinda Field of the Los Angeles Basin. California proved reserves represented approximately 6% of total proved reserves, as of December 31, 2011, of which 93% were classified as proved developed reserves.

Williston Basin

The Williston Basin is one of the premier oil basins in the United States. The Company�� properties are located in North Dakota and produce at depths ranging from 9,000 feet to 12,000 feet. Williston Basin proved reserves represented approximately 2% of total proved reserves, as of December 31, 2011, of which 48% were classified as proved developed reserves.

Best Energy Companies To Watch For 2014: Airgas Inc.(ARG)

Airgas, Inc., through its subsidiaries, distributes industrial, medical, and specialty gases, as well as hardgoods in the United States. The company offers various gases, including nitrogen, oxygen, argon, helium, and hydrogen; welding and fuel gases, such as acetylene, propylene, and propane; and carbon dioxide, nitrous oxide, ultra high purity grades, special application blends, and process chemicals. Its hardgoods products comprise welding consumables and equipment, safety products, and construction supplies, as well as maintenance, repair, and operating supplies. The company also engages in the rental of gas cylinders, cryogenic liquid containers, bulk storage tanks, tube trailers, and welding and welding related equipment. In addition, the company manufactures and distributes liquid carbon dioxide, dry ice, nitrous oxide, ammonia, refrigerant gases, and atmospheric merchant gases. It serves repair and maintenance, industrial manufacturing, energy and infrastructure co nstruction, medical, petrochemical, food and beverage, retail and wholesale, analytical, utilities, and transportation industries. The company operates an integrated network of approximately 1100 locations, including branches, retail stores, packaged gas fill plants, specialty gas labs, production facilities, and distribution centers. Additionally, it provides retail solutions to retail customers, such as florists, grocers, restaurants and bars, tire and automotive service centers, and others. The company markets its products through multiple sales channels, including branch-based sales representatives, retail stores, strategic customer account programs, telesales, catalogs, e-business, and independent distributors. Airgas, Inc. was founded in 1982 and is based in Radnor, Pennsylvania.

Best Energy Companies To Watch For 2014: Cliffs Natural Resources Inc.(CLF)

Cliffs Natural Resources Inc., a mining and natural resources company, produces iron ore pellets, lump and fines iron ore, and metallurgical coal products. The company operates six iron ore mines in Michigan, Minnesota, and eastern Canada; two iron ore mining complexes in Western Australia; five metallurgical coal mines located in West Virginia and Alabama; and one thermal coal mine located in West Virginia. It also owns a 45% economic interest in a coking and thermal coal mine located in Queensland, Australia; and a 30% interest in Amapa, a Brazilian iron ore project in Latin America, as well as chromite properties in Ontario, Canada. The company, formerly known as Cleveland-Cliffs Inc, was founded in 1847 and is headquartered in Cleveland, Ohio.

Advisors' Opinion:

• [By Robert Weinstein]

  Lawsuit after lawsuit, a billion dollars in cost overruns, taxpayer subsidies and the most expensive coal plant to operate causing electric rates to skyrocket, if this becomes the norm. The new project is called Plant Ratcliffe by Southern Co. Plant Ratcliffe is quite the boondoggle, but proponents say it always costs more to build the first one and costs will come down as the technology improves. More plants are in the planning stages and may bring a needed shot in the arm to mining stocks. Alpha Natural Resources (ANR), Walter Energy (WLT), Arch Coal (ACI), Cliffs Natural Resources (CLF), Peabody Energy (BTU), and James River Coal (JRCC) are companies that may benefit from increased demand for coal. Not all coal or coal companies are equal, so it's crucial to discriminate based on your investment time-horizon goals. With that said, the announcement should have been followed by a deep sell-off in coal and utility related stocks. But something happened. Or, rather, didn't happen. The above coal stocks didn't sell off tremendously and are largely moving along with the rest of the market today. This is noteworthy because stocks don't bottom on good news, they reach a bottom on awful news. Let me explain: When a stock chart continues trending lower, what you're witnessing is investors throwing in the towel and moving on. Leaving aside bankruptcies for a moment, almost all stocks have a core group of investors that are commonly known as the "strong hands." A stock is at the bottom when the weak hands are gone. At some point, distressing news (like an unfavorable EPA announcement regarding coal) hits the wire and the related stock or stocks react with little or no movement. This is what we are witnessing right now in coal-related companies.

Food Companies Scrutinized Amid GMO Controversy

Consumer preferences in terms of food seem to be shifting, many people now opting for 'organic' or 'natural' choices instead of our traditional chemically infused fare. Together with this development, a proposal has been introduced that requires the labeling of genetically modified foods, which opponents claim will drive up the price of groceries. In any case, companies producing packaged and prepared foods seem to be struggling lately, whereas the more natural offerings are booming.

Legislating labels
In recent times, consumers have become increasingly opposed to genetically modified foods. Monsanto especially has been under fire, with millions taking to the streets to protest against the company's questionable patenting policy and its genetically modified seeds and food. In total, people marched in 436 protests in 52 countries around the world.

Now, US state governments seem to be weighing in on the matter. Connecticut has already passed a bill that requires the labeling of genetically modified foods, and similar proposals are under consideration in Vermont, New Hampshire and Maine. Opponents say the law would negatively affect the image of genetically modified food, while it has not yet been proven beyond doubt to be unhealthy, as well as drive up the price of groceries. Supporters of the bill argue that the price increase would be negligible.

In any case, producers of packaged foods, many of which contain genetically modified substances, seem to be struggling lately. Packaged food giant ConAgra Foods (NYSE: CAG  ) recently came out with fairly disappointing numbers for first-quarter FY2014, missing quarterly earnings-per-share estimates by $0.04.

The consumer-foods segment reported a sizable decline in volume for the quarter, as a result of "difficult industry conditions." Presumably, this means the shift in consumer preferences toward more natural alternatives. The company lowered its full-year guidance to $2.34-$2.38 from $2.40.

General Mills (NYSE: GIS  ) , another staunch opponent of the proposed labeling law, seems to be faring a little better. First-quarter 2014 EPS met analyst expectations, with net sales up 8% to approximately $4.4 billion for the quarter. New products such as Yoplait Greek yogurt and the perhaps unfortunately named Nature Valley Oatmeal Squares contributed to the solid performance. The company reaffirmed its full-year guidance, expecting some decent growth, but investors will be very curious to see how the planned labeling legislation plays out. In any case, the three-to-five year expected growth rate of 7.6% is nothing to write home about.

So what's organic, anyway?
Booming, apparently. One could easily debate what 'organic' or 'natural' food actually is, and to what degree these products live up to their name, but it's hard to deny that the industry is growing like a weed. Whole Foods Market (NASDAQ: WFM  ) , a large natural-food supermarket chain, grew its full-year bottom line by nearly 30% between 2011 and 2012, with analysts expecting a three-to-five year growth rate of around 55%. In the most recent quarter, the company opened three new stores, reporting a 7.5% increase in comp sales as well as raising its outlook.

Producers of natural foods are also benefiting. Annie's (NYSE: BNNY  ) , which produces GM-free organic goods for health-conscious consumers, is growing revenue rapidly on the back of increased demand. For the latest report, net sales were up a healthy 13.8%, as the company reaffirmed its full-year guidance of adjusted net sales growth between 18% and 20%.

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Curiously enough, the sales increase was led by snacks, which supports the notion that Americans are snacking on healthier treats. Analysts are calling for full-year EPS of $0.99 in FY2014 for a 24% increase over 2013.

The bottom line
The packaged-food industry has recently been shaken up by a proposed law that requires the labeling of genetically modified foods or ingredients. Large companies such as General Mills and ConAgra have expressed their opposition to the bill, amid challenging industry conditions as a result of shifting consumer preferences. To me, it seems like natural and organic-food chains such as Whole Foods and Annie's may be the better bet for the coming years.

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Packaging Corp Of America to Acquire Boise for $1.995B (PKG,BZ)

Containerboard producer Packaging Corp Of America (PKG) announced on Monday that it has agreed to purchase all outstanding shares of Boise Inc. (BZ) for $1.995 billion.

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PKG will acquire the outstanding shares of the packaging and paper product company for $12.55 per share, totalling $1.995 billion. This amount includes $714 million of outstanding indebtedness of BZ.

Together the two companies have brought in $5.5 billion in sales and $879 million in EBITDA over the last year. PKG’s containerboard capacity is expected to grow from $2.6 million tons to $3.7 million tons with the purchase of BZ.

PKG’s Executive Chairman Paul Stecko commented: "The acquisition is an excellent fit, both geographically and strategically, with unique and substantial synergies. It provides the containerboard that PCA needs to support our strong corrugated products growth. The DeRidder containerboard mill is low cost, located in a very good wood basket and, after the D2 machine conversion, provides almost one million tons of primarily lightweight containerboard. The combined company is expected to generate strong financial results and strong cash flow which will be used to pay down debt as well as to continue to return value to our shareholders."

Packaging Corp Of America shares were up $5.96, or 10.93%, during pre-market trading Monday. The stock is up 42% YTD.

Boise shares were up $2.66, or 26.71% during premarket trading Monday. The stock is up 25% YTD.

Top Analyst Upgrades and Stocks to Buy: Avago, Melco Crown, PAA and More

It may be the last dog days of summer ahead of Labor Day, but analysts are still dribbling out research calls. Now that stocks have pulled back, investors and traders are looking for ideas of the stocks to buy and the stocks to sell. 24/7 Wall St. reviews many fresh research calls each morning to find great ideas in dividends, growth stocks and value stocks. These are some of this Wednesday’s top analyst upgrades, initiations and positive analyst research calls seen from Wall Street.

Avago Technologies Ltd. (NASDAQ: AVGO) is trading up 6% after earnings and guidance beat expectations. Sterne Agee reiterated its Buy rating and raised the price target from $44 to $46. Goldman Sachs also raised its target price to $48, and Credit Suisse raised its target price to $45.

Control4 Corp. (NASDAQ: CTRL) was started as Buy at Canaccord Genuity on a likely late Tuesday call. This one was started as Buy at BofA/Merrill Lynch on Tuesday as the broker quiet period ended.

Masco Corp. (NYSE: MAS) was reiterated as Buy with a $25 price target and maintained on the Focus List at Argus.

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Melco Crown Entertainment Ltd. (NASDAQ: MPEL) was started as Outperform in a positive Asian casino and resort group call by Credit Suisse.

Plains All American Pipeline L.P. (NYSE: PAA) was maintained as Outperform with a $64 price target (versus $51.44 current) after its announced acquisition of affiliated PAA Natural Gas Storage L.P. (NYSE: PNG) in an all-stock buyout.

Statoil ASA (NYSE: STO) was raised to Buy from Neutral at BofA/Merrill Lynch.

Workday Inc. (NYSE: WDAY) was reiterated as Buy with a price target raised to $85 from $75 at Canaccord Genuity.

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Unusual News Causes Unusual Results

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Shares of this energy sector company's stock reached a new high, partly as a result of some big news coming from the US Department of Energy, writes MoneyShow's Jim Jubak, also of Jubak's Picks.

Yesterday, September 12, shares of Cheniere Energy (LNG) hit a new 52-week high of $33.76. As of the close, they'd dropped back slightly to $33.10. That still puts the stock up 18.5% from its August 30 close.

A big part of that is Wednesday's news that the US Department of Energy had approved a permit for Dominion Resources (D) to export liquefied natural gas from an existing liquefied natural gas import terminal in Maryland.

It's unusual, I grant you, for a company's stock to rise on news that a competitor has received approval to enter the market. And it's even more unusual when that company's stock rises more on the approval than the competitor's does.

But it actually makes sense here. The permit for Dominion Resources is the fourth liquefied natural gas permit that the Department of Energy has approved (and the third this year). Cheniere's Sabine Pass export terminal, scheduled to begin exports in 2015, was the first plant to win Department of Energy approval. As the first company to begin exports from the United States, Cheniere will have the ability to secure a major portion of the price difference between cheap US natural gas ($3.34 per million BTUs) and the price of liquefied natural gas exports as landed in Japan ($15.50 per million BTUs), India ($13.32), or China ($14.95). Dominion's terminal isn't projected to begin exports until 2017, so it certainly won't cut into excess first-mover profits at Cheniere. (Alert for income investors: Dominion has said it will form a master limited partnership that hold its natural gas assets-the Maryland terminal and natural gas pipelines-next year.)

The approval for Dominion Resources also moved Cheniere's proposed Corpus Christi terminal closer to approval. After this decision, that project is now fifth in line at the Department of Energy-and it may even be higher in reality, since there's doubt that two West Coast terminal projects ahead of it on the list will be approved, given strong opposition from environmentalists in Oregon and from Oregon's Ron Wyden, the chairman of the Senate Energy Committee. Approval of the Corpus Christi terminal would add about $14.50 a share to Cheniere's share price, Credit Suisse calculates. So anything that moves that terminal closer to permitting, is a big plus for Cheniere's stock.

On the news I'm moving my target price for Cheniere Energy to $38 from the current $34. (Cheniere is a member of my Jubak's Picks portfolio.) Other members of that portfolio that benefit from this news, and the acceleration of construction and potential liquefied natural gas exports, include Chicago Bridge & Iron (CBI) and Chesapeake Energy (CHK).

Full disclosure: I don't own shares of any of the companies mentioned in this post in my personal portfolio. When in 2010 I started the mutual fund I manage, Jubak Global Equity Fund, I liquidated all my individual stock holdings and put the money into the fund. The fund did own shares of Cheniere Energy and Chesapeake Energy as of the end of June. For a complete list of the fund's holdings as of the end of June see the fund's portfolio here.

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LONDON -- Stock index futures at 7 a.m. EDT indicate that the Dow Jones Industrial Average (DJINDICES: ^DJI  ) may open down by 0.5% this morning, while the S&P 500 (SNPINDEX: ^GSPC  ) may open 0.53% lower.

European markets dropped this morning, and the FTSE 100 was down almost 1% at 7 a.m. EDT. The falls are likely to be caused by profit-taking ahead of today's U.S. economic reports as European markets come to the end of what will almost certainly be a 12th consecutive month of gains. There were also concerns that May's official China purchasing managers' index, due tomorrow, will show that Chinese manufacturing growth has stalled.

Analysts' consensus forecasts for today's U.S. economic reports indicate that personal income may have risen by 0.2% in April, repeating its 0.2% rise in March. Consumer spending is seen having fallen by 0.1% in April after gaining 0.2% in March. Both reports are due at 8:30 a.m. EDT and will be followed at 9:45 a.m. EDT by the Chicago purchasing managers' index, which is expected to have risen to 49.9 in May, up from 49 in April. Finally, at 9:55 a.m. EDT, May's consumer sentiment report is expected to show a nominal rise to 83.8 from 83.7 in April.

Top Growth Companies To Buy Right Now: CNO Financial Group Inc. (CNO)

CNO Financial Group, Inc., through its subsidiaries, engages in the development, marketing, and administration of health insurance, annuity, individual life insurance, and other insurance products for senior and middle-income markets in the United States. The company markets and distributes Medicare supplement insurance, interest-sensitive and traditional life insurance, fixed annuities, and long-term care insurance products; Medicare advantage plans through a distribution arrangement with Humana Inc.; and Medicare Part D prescription drug plans through a distribution and reinsurance arrangement with Coventry Health Care. It also markets and distributes supplemental health, including specified disease, accident, and hospital indemnity insurance products; and life insurance to middle-income consumers at home and the worksite through independent marketing organizations and insurance agencies. In addition, the company markets primarily graded benefit and simplified issue life insurance products directly to customers through television advertising, direct mail, Internet, and telemarketing. It sells its products through career agents, independent producers, direct marketing, and sales managers. CNO Financial Group, Inc. has strategic alliances with Coventry and Humana. The company was formerly known as Conseco, Inc. and changed its name to CNO Financial Group, Inc. in May 2010. CNO Financial Group, Inc. was founded in 1979 and is headquartered in Carmel, Indiana.

Top Growth Companies To Buy Right Now: Buffalo Wild Wings Inc.(BWLD)

Buffalo Wild Wings, Inc. engages in the ownership, operation, and franchise of restaurants in the United States. The company provides quick casual and casual dining services, as well as serves bottled beers, wines, and liquor. As of July 26, 2011, it had 773 Buffalo Wild Wings locations in 45 states in the United States, as well as in Canada. The company was founded in 1982 and is headquartered in Minneapolis, Minnesota.

Advisors' Opinion:

• [By Roberto Pedone]

  Buffalo Wild Wings (BWLD) is an owner, operator and franchiser of restaurants featuring a variety of boldly-flavored, craveable menu items. This stock closed up 6% to $103.58 in Wednesday's trading session.

  Wednesday's Volume: 1.55 million
  
  Three-Month Average Volume: 402,120
  
  Volume % Change: 319%

  From a technical perspective, BWLD ripped higher here back above its 50-day moving average of $98.38 with heavy upside volume. This move is quickly pushing shares of BWLD within range of triggering major breakout trade. That trade will hit if BWLD manages to take out its intraday high on Wednesday of $105.32 and then once it clears is 52-week high at $106.03 with high volume.

  Traders should now look for long-biased trades in BWLD as long as it's trending above its 50-day at $98.38 and then once it sustains a move or close above those breakout levels with volume that hits near or above 402,120 shares. If that breakout triggers soon, then BWLD will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $110 to $120.

• [By Fabian]  

  While Chipotle has captured most of the attention among the restaurant stocks, Buffalo Wild Wings (BWLD: 56.62 0.00%) could be 2011’s big winner. Wall Street is expecting 19% earnings growth from Buffalo Wild Wings in 2011 which is only slightly lower than Chipotle’s 20% growth rate. However, BWLD trades at only 18x consensus 2011 estimates while CMG trades at a pricey 40x. On an EBITDA basis, Chipotle trades at over 20x, while Buffalo Wild Wings trades at less than 9x.

Top Stocks To Invest In: TrueBlue Inc.(TBI)

TrueBlue, Inc. provides temporary blue-collar staffing services in the United States. It supplies on demand general labor to various industries under the Labor Ready brand; skilled labor to manufacturing and logistics industries under the Spartan Staffing brand; and trades people for commercial, industrial, and residential construction, and building and plant maintenance industries under the CLP Resources brand. The company also provides mechanics and technicians to the aviation maintenance, repair and overhaul, aerospace manufacturing, and assembly industries, as well as to other transportation industries under the Plane Techs brand; and temporary drivers to the transportation and distribution industries under the Centerline brand. It primarily serves small and medium-size businesses. The company was formerly known as Labor Ready, Inc. and changed its name to TrueBlue, Inc. in December 2007. TrueBlue, Inc. was founded in 1985 and is headquartered in Tacoma, Washington.

Advisors' Opinion:

• [By McWillams]

  TrueBlue, Inc. is a provider of temporary blue-collar staffing. Its EPS forecast for the current year is 0.69 and next year is 1.1. According to consensus estimates, its topline is expected to grow 8.96% current year and 10.03% next year. It is trading at a forward P/E of 15.76. Out of 10 analysts covering the company, six are positive and have buy recommendations and four have hold ratings.

Top Growth Companies To Buy Right Now: MEDIFAST INC(MED)

Medifast, Inc., through its subsidiaries, engages in the production, distribution, and sale of weight management and disease management products, and other consumable health and diet products in the United States. The company?s product lines include weight and disease management, meal replacement, and vitamins. It also operates weight control centers that offer Medifast programs for weight loss and maintenance, customized patient counseling, and inbody composition analysis. The company markets its products under the Medifast and Essential brand names, including shakes, appetite suppression shakes, women?s health shakes, diabetics shakes, joint health shakes, coronary health shakes, calorie burn drinks, calorie burn flavor infusers, antioxidant shakes, antioxidant flavor infusers, bars, crunch bars, soups, chili, oatmeal, pudding, scrambled eggs, hot cocoa, cappuccino, chai latte, iced teas, fruit drinks, pretzels, puffs, brownie, pancakes, soy crisps, crackers, and omega 3 and digestive health products. Medifast Inc. sells its products through various channels of distribution comprising Web, call center, independent health advisors, medical professionals, weight loss clinics, and direct consumer marketing supported via the phone and the Web; Take Shape for Life, a physician led network of independent health coaches; and weight control centers. The company was founded in 1980 and is headquartered in Owings Mills, Maryland.

Advisors' Opinion:

• [By Holly LaFon] Medifast produces, distributes and sells weight and health management products with the brand names Medifast, Take Shape for Life, Hi-Energy Weight Control Centers and Woman�� Wellbeing.
  
  Its return on assets in the third quarter of 2011 was 19.6%, which has been increasing in the past several years. The average return on assets for the specialty retail industry is 10.48% for the trailing 12 months.
  
  
  
  The company�� total assets amounted to $94 million in 2010, which increased from $62.8 million in 2009. Net income also increased to $19.6 million in 2010 from $12 million in 2009.
• [By Mark]

  Revenues are expected to grow 27% next year and yet MEDIFAST (MED: 15.68 0.00%) trades at only 16x consensus 2011 earnings. The company continues to gain market share in the competitive weight management sector and provides investors with the double benefit of both a growth stock and a potential acquisition target.

Pandora’s Perfect Storm

With shares of Pandora Media (NYSE:P) trading at around $15.22, is P an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

C = Catalyst for the Stock's Movement

Pandora Media has made two highly strategic moves recently. It has allowed listeners to link to Pandora through their Facebook (NASDAQ:FB) accounts, and it has implemented a 40-hour limit of free listening per month. The former should increase exposure, and the latter should aid monetization. However, these moves still might not be enough to save Pandora.

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The stock has appreciated more than 65 percent year-to-date, but there are several red flags that investors seem to be ignoring. These red flags include a lack of profitability, fierce competition, and a subpar company culture.

Lack of Profitability

Pandora went public in 2011, but it launched in 2000. If a company is unable to deliver consistent profits after more than a decade, then there should be cause for concern. Of course, Pandora's popularity increased after it went public, which led to more users and paid subscribers, but providing excuses for a company isn't a wise investing strategy.

Management has been somewhat effective with increasing paid subscribers, and mobile ad revenue doubled last quarter. These are clear positives, but while revenue growth is always exciting, it doesn't mean much if costs – content acquisition costs being the biggest factor in this case – prevent consistent profits.

Fierce Competition

As of right now, Spotify is the biggest competitor. Pandora is bigger, but Spotify is growing faster. This has a lot to do with the "cool factor" among the 18-35 demographic.

According to Alexa.com, Pandora is ranked #282 in the world and #54 in the United States. In other words, only 281 websites in the world receive more traffic than Pandora. Spotfiy is ranked #1085 in the world and #519 in the United States.

Over the past three months for Pandora, pageviews-per-user has increased 4.7 percent, time-on-site has increased 4.0 percent, and the bounce rate (only one pageview per visit) has declined 2.0 percent. These are all impressive numbers. Over the past three months for Spotify, pageviews-per-user has increased 1.1 percent, time-on-site has increased 8.0 percent, and the bounce rate has declined 2.0 percent. These are also impressive numbers.

In this instance, the numbers don't reveal the whole truth. If you're only looking at traffic numbers over the past three months, then it would seem as though it's close to even. And if you're including overall ranking, then Pandora looks like the dominating force. However, Spotify was launched in 2008. Therefore, despite eight fewer years of operation, it's already a significant threat to Pandora.

As if Pandora didn't already have enough to worry about on the competitive front, Google Inc. (NASDAQ:GOOG) and Apple Inc. (NASDAQ:AAPL) are also looking to jump into the game. This is similar to playing a game of one-on-one basketball against a neighborhood foe and winning by a point or two, and then the game changes when Michael Jordan and Kobe Bryant show up. Ambitions might be high, but reality is going to play a serious role.

Google Play Music All Access is up and running, and it's supposedly coming to iOS within a matter of weeks. For $9.99 per month, subscribers have unlimited listening access to millions of songs, radio customization capability, a skipping feature, and more. For those who start the trial prior to June 30, the cost will only be $7.99 per month. Google also offers more content than Pandora and Spotify.

Pandora One offers no external ads and unlimited listening hours on all devices for only $3.99 per month (or $36 per year), and Spotify Unlimited offers unlimited music on desktops and laptops for $4.99 per month. Spotify also offers Spotify Premium, where listeners can enjoy ad-free music on any device for $9.99 per month. The latter option doesn't seem so appealing with Google entering the fray.

And let's not forget about Apple's iRadio. Apple has reached an agreement with Warner Music Group, and it's attempting to iron out a deal with Sony Music. There are many rumors that Apple is offering a much sweeter deal to Warner Music Group than Pandora. Apparently, this will come in the form of 10 percent of ad revenue opposed to the 4 percent of ad revenue Warner Music Group currently receives from Pandora.

Company Culture

According to Glassdoor.com, Pandora's employees rate their employer a 3.4 of 5. This is decent, but if you read the actual employee reviews on Glassdoor, you will notice a few recurring themes, which include "no long-term game plan," "needless spending," "insecurity," and "paranoia." For comparative purposes, Spotify employees have rated their employer a 4.7 out of 5.

The chart below compares basic fundamentals for Pandora, Google, and Apple.

	P	GOOG	AAPL
Trailing P/E	N/A	25.96	10.76
Forward P/E	56.37	16.24	10.31
Profit Margin	-9.86%	20.92%	23.46%
ROE	-53.68%	16.36%	33.34%
Operating Cash Flow	-2.28M	16.56B	55.26B
Dividend Yield	N/A	N/A	2.70%
Short Position	31.60%	1.80%	2.80%

Let's take a look at some more important numbers prior to forming an opinion on this stock.

T = Technicals Are Mixed

Pandora has performed exceptionally well over the past year and year-to-date, but yesterday’s drop was a memorable one.

	1 Month	Year-To-Date	1 Year	3 Year
P	3.82%	65.80%	52.81%	0.00%
GOOG	2.59%	22.65%	51.95%	71.60%
AAPL	1.54%	-13.64%	-17.35%	76.21%

At $15.22, Pandora is still trading above its averages, but this might not last much longer.

50-Day SMA	15.06
200-Day SMA	12.14

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E = Equity to Debt Ratio Is Strong

The debt-to-equity ratio for Pandora is much stronger than the industry average of 4.20.

	Debt-To-Equity	Cash	Long-Term Debt
P	0.00	75.42M	0.00
GOOG	0.10	50.10B	7.38B
AAPL	0.00	39.14B	0.00

E = Earnings Are Weak

While revenue has been impressive, any company that consistently loses money is a risky investment.

Fiscal Year	2009	2010	2011	2012	2013
Revenue ($) in millions	19	55	138	274	427
Diluted EPS ($)	NA	NA	-1.03	-0.19	-0.23

Looking at the last quarter on a year-over-year basis, revenue improved but the loss widened.

Quarter	Apr. 30, 2012	Jul. 31, 2012	Oct. 31, 2012	Jan. 31, 2013	Apr. 30, 2013
Revenue ($) in millions	80.78	101.27	120	125.09	125.51
Diluted EPS ($)	-0.12	-0.03	0.01	-0.09	-0.16

Now let's take a look at the next page for the Conclusion. Is this stock an OUTPERFORM, a WAIT AND SEE, or a STAY AWAY?

Conclusion

Pandora has paved the way for the industry. Therefore, in a perfect world, it should be rewarded. Unfortunately, this is far from a perfect world. Pandora is a company that cannot turn consistent profits, and with competition increasing, it's highly unlikely that this will change. A few profitable quarters are possible, but it would be difficult to see Pandora fighting off all threats over the long haul. Even if competition isn't factored into the equation, margins are poor, cash flow is weak, and nobody knows how the stock would perform in a bear market.

Is Target the Next Wal-Mart?

With shares of Target (NYSE:TGT) trading around $71, is TGT an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

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

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T = Technicals on the Stock Chart are Strong

Target stock has just recently broken above a long-term resistance level. The stock is now trading at all-time high prices and sees no signs of slowing ahead. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, Target is trading above its rising key averages which signal neutral to bullish price action in the near-term.

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(Source: Thinkorswim)

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

	Implied Volatility (IV)	30-Day IV Percentile	90-Day IV Percentile
Target Options	20.46%	56%	52%

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

	Put IV Skew	Call IV Skew
June Options	Flat	Average
July Options	Flat	Average

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

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

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E = Earnings Are Increasing Quarter-Over-Quarter

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

	2012 Q4	2012 Q3	2012 Q2	2012 Q1
Earnings Growth (Y-O-Y)	1.39%	17.07%	2.91%	5.05%
Revenue Growth (Y-O-Y)	6.76%	3.23%	3.33%	5.83%
Earnings Reaction	-1.45%	1.72%	1.76%	0.43%

Target has seen increasing earnings and revenue figures over the last four quarters. From these figures, the markets have been upbeat about Target’s recent earnings announcements.

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P = Excellent Relative Performance Versus Peers and Sector

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

	Target	Wal-Mart	Kohl’s	Costco	Sector
Year-to-Date Return	18.22%	14.33%	21.22%	13.06%	13.21%

Target has been a relative performance leader, year-to-date.

Conclusion

Target provides a variety of discounted general merchandise through its popular retail stores. The stock has recently broken above a long-term resistance level and is now consolidating at all-time high price levels. Earnings and revenue have been growing steadily which has generated positive buzz among investors. Relative to its peers and sector, Target has been a year-to-date performance leader. Look for Target to OUTPERFORM.

When a President is in Trouble Markets Can Also Be In Trouble

President Obama is in deep trouble with respect to his geopolitical strategy. He faces launching a symbolic attack on Syria that won't accomplish any real political goal in terms of stopping the chaotic bloodbath there. Launching the cruise missiles will only intensify a sense of danger in the Middle Eastern oil producing nations and drive the price of oil to a level that will negatively impact the US economy's rate of growth. And if Obama doesn't act, there will be a sense  of American power receding in the world.

This is not similar to the invasion of Iraq by NATO  forces in a speedy destruction of Sada Hussein's armed forces for a proclaimed military victory  that actually spiked the stock market averages for a while. This is a time of danger that threatens the stability of the Middle East. Should the price of oil skyrocket back to its 2008 peak of $148 a barrel, which some bears are predicting, and should gold rise to the ridiculous price of $3500 an ounce as Citigroup Citigroup just predicted there  will  be  less conviction about equity prices.

Best Stocks To Invest In Right Now

Another major uncertainty is the identity and policy of the next Chairman of the Federal Reserve. The whole muddle over the proposed taper, its uncertain timing and extent has caused "market action to be tepid and without conviction," says David Kotok, chief investment officer of Cumberland Advisors in his market commentary today. As well, I was chagrined to see that most of the equity income mutual funds and ETFs are yielding less than the return on the 10 years Treasury note. Could Syria be the Achilles heel of the 4 year bull market? Kotok reports that  Cumberland's ETF Equity managed accounts entered "Labor Day weekend in the highest cash position we have seen in years."

President Obama is in trouble on many other grounds. His healthcare program is under attack at the same time he has made no progress on other legislative programs dealing with immigration and gun control. Despite the positive news of 2.5% growth major corporations don't seem to be hiring full-time workers.

President Obama is in trouble because the cost of servicing a mortgage has jumped 150 basis points in a matter  of several weeks and home sales seem to be slowing.

5 Best Clean Energy Stocks To Watch For 2014

There are many countries across the globe that utilize natural gas as transportation fuel. Argentina and Iran are among the world leaders. It is a trend that hasn't really picked up in the U.S. -- until now.

Natural gas is too cheap and too useful to ignore, and it is making inroads in the world of long-distance trucking. In this video, Fool.com contributor Aimee Duffy talks about the efforts of UPS (NYSE: UPS  ) and Wal-Mart (NYSE: WMT  ) �to take advantage of this growing movement.

The movement toward alternative energy is gaining momentum. One potential opportunity in this field is Clean Energy Fuels, which focuses its natural gas efforts primarily on trucking and fleets. It's poised to make a big impact on an essential industry. Learn everything you need to know about Clean Energy Fuels in The Motley Fool's premium research report on the company. Just click here now to claim your copy today.

5 Best Clean Energy Stocks To Watch For 2014: AXT Inc(AXTI)

AXT, Inc., together with its subsidiaries, designs, develops, manufactures, and distributes compound and single element semiconductor substrates for use in wireless communications, lighting display applications, fiber optic communications, and solar cell. It offers semi-insulating substrates made from gallium arsenide, which are used in power amplifiers and radio frequency integrated circuits of wireless handsets, direct broadcast televisions, high-performance transistors, and satellite communications applications. The company also provides semi-conducting substrates made from gallium arsenide that are used for applications in light emitting diodes, lasers, and optical couplers; substrates made from indium phosphide used in broadband and fiber optic communications; and substrates made from germanium used in satellite and terrestrial solar cells, and for optical applications. It manufactures its semiconductor substrates using its proprietary vertical gradient freeze technol ogy. In addition, the company, through its joint venture agreements, manufactures and sells gallium, arsenic, germanium, germanium dioxide, paralytic boron nitride crucibles, and boron oxide. AXT, Inc. sells its products through direct sales force in the United States, as well as through independent sales representatives in France, Germany, Japan, South Korea, Taiwan, and the United Kingdom. The company was formerly known as American Xtal Technology, Inc. and changed its name to AXT, Inc. in July 2000. AXT, Inc. was founded in 1986 and is headquartered in Fremont, California.

5 Best Clean Energy Stocks To Watch For 2014: Trio Gold Corp (TGK.V)

Trio Gold Corp., a junior mining company, engages in the acquisition, maintenance, exploration, and development of mineral properties in the United States. It primarily focuses on gold, silver, and copper mining properties. The company holds a 100% interest Rodeo Creek property that consists of 29 contiguous mineral claims covering an area of approximately 547 acres located in Elko County, Nevada. Trio Gold Corp. was founded in 1977 and is based in Calgary, Canada.

Top Small Cap Stocks To Invest In 2014: Bluefly Inc.(BFLY)

Bluefly, Inc. operates as an Internet retailer. The company, through its e-commerce Web site, Bluefly.com, sells approximately 350 brands of men?s and women?s designer apparel, and accessories at discount prices in the United States. It also focuses on selling fashionable prescription eyewear through an e-commerce Web site. The company was formerly known as Pivot Rules Inc. and changed its name to Bluefly, Inc. in October 1998. Bluefly, Inc. was founded in 1991 and is based in New York, New York.

5 Best Clean Energy Stocks To Watch For 2014: Seven Group Holdings Limited(SVW.AX)

Seven Group Holdings Limited, through its subsidiaries, engages in the media and broadcasting, newspaper and magazine publishing, heavy equipment sales and service, equipment hire, and online businesses in Australia and China. The company operates as a Caterpillar dealer, which provides heavy equipment sales and support services to customers in Western Australia, New South Wales, and the Australian Capital Territory. It is also involved in the manufacture, assembly, sale, and support of lighting, power generation, and dewatering equipment; and rental of equipment, as well as distribution of Perkins engines. In addition, it engages in the operations of broadband, telephony, and other listed investments and properties. The company was formerly known as Seven Network Limited and changed its name to Seven Group Holdings Limited in April 2010, as a result of merger with WesTrac Holdings Pty Limited. Seven Group Holdings Limited is headquartered in Pyrmont, Australia.

5 Best Clean Energy Stocks To Watch For 2014: Olympus Pacific Minerals Inc(OYM.TO)

Olympus Pacific Minerals Inc. engages in the acquisition, exploration, development, mining, and reinstatement of gold bearing properties in southeast Asia. The company produces and sells primarily gold and by-products, such as silver. Its principal properties include the Bong Mieu Gold property and the Phuoc Son Gold property located in central Vietnam; the Bau Gold property located in central Malaysia; and the Capcapo Gold Property located in the northern Philippines. The company was formerly known as Olympus Holdings Ltd. and changed its name to Olympus Pacific Minerals Inc. in November 1996. Olympus Pacific Minerals Inc. was incorporated in 1951 and is based in Toronto, Canada.