Top Dividend Stocks To Buy For 2020: April 2014

Tuesday, April 29, 2014

Best Diversified Bank Companies To Buy Right Now

Want a simple way to tell which companies are likely to do better than the rest?

Despite how profitable a mechanical net net stock strategy is, I�� always looking for ways to stack the odds even further in my favor.

My most recent articles on Old School Value talk about the benefits of screening out companies with too much debt, and looking at the qualitative fundamentals. This helps to narrow it down to more promising investments.

At Net Net Hunter, I��e talked a lot about choosing stocks selling for a tiny fraction of what they��e worth.

The lowest price in relation to net current asset value (NCAV).

After years of studying the investment habits of great investors, it�� clear that there are a few simple and reliable ways to identify the best investment candidates.

These techniques involve assessing simple characteristics inherent in investment situations themselves.

Best Diversified Bank Companies To Buy Right Now: Solta Medical Inc(SLTM)

Solta Medical, Inc., together with its subsidiaries, engages in the design, development, manufacture, and marketing of energy-based medical device systems for aesthetic applications primarily in North America, the Asia Pacific, Europe, and the Middle East. It offers Fraxel re:pair system for use in dermatological procedures requiring ablation, coagulation, and resurfacing of soft tissue, as well as for rhytides, pigmentation, dyschromia, fine lines, acne, surgical scars, deeper lines, wrinkles, and actinic keratoses; and Clear + Brilliant system for patients who want to take control of their aging process. The company also provides Thermage CPT system that provides non-invasive treatment options for skin tightening; Liposonix system to destroy unwanted fat cells resulting in waist circumference reduction; Isolaz system for the treatment of inflammatory acne, comedonal acne, and mild to moderate inflammatory acne; and the CLARO device, a consumer handheld device for the tre atment of mild-to-moderate inflammatory acne, including pustular acne. Its customers principally include dermatologists, plastic surgeons, general and family practitioners, gynecologists, and ophthalmologists. The company sells its products primarily through a direct sales force, as well as through independent distributors; and CLARO device through retail and associated retailer?s Websites, and television retail networks, as well as through its own website in the United States. The company was formerly known as Thermage, Inc. and changed its name to Solta Medical, Inc. in January 2009. Solta Medical, Inc. was incorporated in 1996 and is headquartered in Hayward, California.

Advisors' Opinion:

[By John Udovich]
On Tuesday, small cap biotech stock Kythera Biopharmaceuticals Inc (NASDAQ: KYTH) surged around 25% after announcing that its ATX-101 REFINE-1 and REFINE-2 Phase III trials met all primary and secondary endpoints for the reduction of so-called double chins; but if investors missed out on that rally, small caps Zeltiq Aesthetics Inc (NASDAQ: ZLTQ), Solta Medical Inc (NASDAQ: SLTM) and Cynosure, Inc (NASDAQ: CYNO) each have a piece of the aesthetic market as well. In the case of Kythera Biopharmaceuticals, its ATX-101 can be injected to deal with double chins��meaning its less invasive than liposuction as the drug dissolves fat cells but leaves other tissue alone. JP Morgan has noted:

Best Diversified Bank Companies To Buy Right Now: Frontier Communications Company(FTR)

Frontier Communications Corporation, a communications company, provides regulated and unregulated voice, data, and video services to residential, business, and wholesale customers in the United States. It offers local and long distance voice services, including basic telephone wireline services to residential and business customers; switched access services that allow other carriers to use the facilities to originate and terminate their long distance voice and data traffic; and directory services that provide white and yellow page directories for residential and business listings. The company also provides data and Internet services, which include residential services comprising high-speed Internet, dial up Internet, portal and e-mail products, and hard drive back-up services; and commercial and carriers services, such as metro Ethernet; dedicated Internet; Internet protocol, optical, multiprotocol label switching, and TDM data transport services. In addition, it offers di rect broadcast satellite services and fiber optic video services, as well as provides online access to video content, entertainment, and news available on the worldwide Web through its Web site myfitv.com. The company was formerly known as Citizens Communications Company and changed its name to Frontier Communications Corporation in July 2008. Frontier Communications Corporation was founded in 1927 and is based in Stamford, Connecticut.

Advisors' Opinion:

[By David Dittman]
Question: How about Frontier Communications Corp (NYSE: FTR)?
Answer: I�� leery of the rural telecoms right now. I do recommend Consolidated Communications Holdings Inc (NSDQ: CNSL) in the UF Income Portfolio, but it benefits from a JV with Verizon Communications Inc (NYSE: VZ) that generates substantial cash flow and sets it apart from its peers, who are otherwise struggling against declines in traditional wireline businesses as well as intense competition from bigger, better-funded national players in broadband and business service.

Top 10 Paper Stocks To Invest In Right Now: Air Methods Corporation(AIRM)

Air Methods Corporation, together with its subsidiaries, provides air medical emergency transport services and systems in the United States. It transports persons requiring intensive medical care from either the scene of accident or general care hospitals to highly skilled trauma centers or tertiary care centers. The company operates through three segments: Community-Based Services, Hospital-Based Services, and United Rotorcraft. The Community-Based Services segment provides air medical transportation services, including aircraft operation and maintenance, medical care, dispatch and communications, and medical billing and collection services. This segment operates 201 helicopters and 15 fixed wing aircraft in 29 states. The Hospital-Based Services segment offers air medical transportation services, and medically equipped helicopters and airplanes for hospitals. It operates 212 helicopters and 6 fixed wing aircraft in 34 states. The United Rotorcraft segment designs, manufa ctures, installs, and certifies modular medical interiors, multi-mission interiors, and other aerospace and medical transport products for domestic and international customers, as well as provides quality assurance and certification services. Air Methods Corporation was founded in 1982 and is headquartered in Englewood, Colorado.

Advisors' Opinion:

[By Brian Pacampara]
What: Shares of air medical transportation company Air Methods (NASDAQ: AIRM ) sank 12% today after its preliminary quarterly results disappointed�Wall Street. �

Best Diversified Bank Companies To Buy Right Now: Equinix Inc.(EQIX)

Equinix, Inc. provides data center services for the protection and connection of information assets to enterprises, financial service companies, and content and network service providers worldwide. It connects businesses with partners and customers through a platform of high performance data centers, containing dynamic ecosystems and the broadest choice of networks. The company operates International Business Exchange (IBX) centers, or IBX data centers, across 38 markets in the Americas, Europe, the Middle East, Africa, and the Asia-Pacific. Equinix offers data center services, including premium data center co-location; interconnection and exchange services; network connectivity; business continuity; and outsourced IT infrastructure services. The company connects approximately 4,000 enterprises, cloud, digital content, and financial companies, including 680 network service providers to help them grow their businesses, improve application performance, and protect their vita l digital assets. It markets its products and services through direct sales force and channel marketing program. Equinix was founded in 1998 and is headquartered in Redwood City, California.

Advisors' Opinion:

[By Lee Jackson]
Equinix Inc. (NASDAQ: EQIX) is expected to be one of the companies in the space looking to employ a merger or acquisition strategy in the near future. The company announced last Friday that it has opened its second International Business Exchange (:IBX) in Rio de Janeiro, based on the platform provided by ALOG Data Centers of Brazil. This new Rio de Janeiro data center, popularly known as RJ2, will enable Equinix to meet the growing demand for data center services in the region. The consensus price target for this top stock is $230.50. Equinix closed Thursday down almost 4% at $166.61.
[By Steve Sears]
New stocks in what Goldman calls the “Hedge Fund VIP list,”�include Actavis (ACT), Baidu (BIDU), Berkshire Hathaway (BRK.B), Crown Castle International (CCI), Entergy Louisiana (ELB), �Equinix (EQIX), Facebook (FB), Fleetcor Technologies (FLT), W.R. Grace (GRA), MetLife (MET), Macquarie Infrastructure (MIC), Micron (MU), Time Warner Cable (TWC), and Time Warner (TWX).
[By Paulo Santos]
Using Equinix (EQIX) and Rackspace Hosting (RAX) as comparables, I was pumped up. CONE was projecting $135 million in EBITDA for 2013 (at the midpoint of guidance). On a $445 million market capitalization with $277.7 million in net debt, it traded at an EV/EBITDA of just 5.4 times. Compare that to EQIX at 13 times or RAX at 15 times. This was a bargain and growing revenues at a 18% clip year-on-year, too, above EQIX's 10% or RAX's 15%.
[By Holly LaFon]
Equinix, Inc. (EQIX) is a leading Internet exchange service provider, serving communications, content and enterprise customers in state-of-the-art data centers. Equinix also offers interconnection services to customers seeking to connect directly with other Equinix customers. We believe that this "tethering" of customers in a network neutral environment creates important competitive barriers that distinguish Equinix from other data center business models. Last year, management indicated its intention to convert the company to a REIT. Shares were pressured this quarter, as the market grew concerned about the company's ability to make this REIT conversion. In addition, REIT shares themselves were under pressure on concerns that rising interest rates would depress their relative valuations in the stock market. We believe that Equinix remains an attractive investment, whether or not a REIT conversion eventually occurs.

Best Diversified Bank Companies To Buy Right Now: Build-A-Bear Workshop Inc. (BBW)

Build-A-Bear Workshop, Inc. operates as a specialty retailer of plush animals and related products. The company�s merchandise comprises various styles of animals to be stuffed; clothing, shoes, and accessories for the stuffed animals; and other brand appropriate toy and accessory items. It also licenses its Build-A-Bear Workshop brand to third parties to manufacture and sell merchandise to other retailers. As of January 31, 2013, the company operated approximately 400 Build-A-Bear Workshop stores worldwide, including the company-owned stores in the United States, Puerto Rico, Canada, the United Kingdom, and Ireland, as well as franchised stores in Europe, Asia, Australia, Africa, the Middle East, Mexico, and South America. The company also sells its products through a Web store. Build-A-Bear Workshop, Inc. was founded in 1997 and is headquartered in St. Louis, Missouri.

Advisors' Opinion:

[By Tabitha Jean Naylor]
Build-A-Bear Workshop (NYSE: BBW).��Unlike traditional toy manufacturers that make toys and games and distribute them to retailers, Build-A-Bear has flipped the toy-making concept on its ear. The idea of making a stuffed animal from scratch has taken the toy market by storm, and has carved out a nice little niche market for the company.
[By Lisa Levin]
Toy & Hobby Stores: This industry moved up 1.99% by 10:40 am. The top performer in this industry was Build-A-Bear Workshop (NYSE: BBW), which gained 2%. Build-A-Bear's trailing-twelve-month revenue is $389.17 million.
[By Ben Levisohn]
Hasbro’s strength hasn’t necessarily translated into gains for other toy makers. Mattel (MAT) has fallen 0.5% to $42.50, while Build-a-Bear Workshop (BBW) has dropped 2.1% to $7.03. LeapFrog Enterprises (LF), however, has gained 3.3% to $8.98.
[By Rich Smith]
After four months of looking, Build-A-Bear (NYSE: BBW ) has found-a-CEO.

After close of trading Monday, Build-A-Bear Workshop announced it has chosen Sharon Price John to become its new Chief Executive Officer and Chief President Bear. She will replace outgoing Chief Executive Bear�(the cute titles are undergoing a bit of a change) Maxine Clark, company founder, who announced her own intention to retire back in February.

Best Diversified Bank Companies To Buy Right Now: Charter Pacific Corporation Ltd (CHF)

Charter Pacific Corporation Limited is in the business of investments and the provision of corporate services. During the fiscal tear ended June 30, 2012 (fiscal 2012), the Company focused on development of its iron ore projects in Mauritania, maintained its holding in Monteray Mining Group Ltd to 30.36%, and maintained its investment in FarmWorks Australia Limited. The Company segments include corporate services, investments, share trading, and exploration and evaluation. Corporate services include provision of corporate services to other companies; Investments segment includes investment in listed and unlisted companies planned to deliver returns in through capital appreciation and/or interest on loan funds advanced. Share trading includes the purchase and sale of listed investment securities. Exploration and evaluation involves the exploration of iron ore permits. During the fiscal year ended June 30, 2012, the Company closed its Internet Protocol Television (IPTV) segment. Advisors' Opinion:

[By Chandan Dubey]
DatePrice/Share (CHF)SharesAmount08.08.20116.3812,57480,22208.08.20115.9715,00089,55010.08.20115.9945,00029,97218.08.20115.866,000383,10322.08.20115.410,00054,00022.08.20115.720,000114,500

Best Diversified Bank Companies To Buy Right Now: TMS International Corp.(TMS)

TMS International Corp., through its subsidiaries, provides outsourced industrial services to steel mills in North America and internationally. It principally offers scrap management and preparation; semi-finished and finished material handling; metal recovery and slag handling, processing, and sales; surface conditioning; raw materials procurement and logistics; and proprietary software-based raw materials cost optimization services. The company?s scrap management and preparation services include the provision of inspection, preparation, and delivery of raw materials, primarily scrap, as well as inventory control through logistics management services. Its semi-finished and finished material handling services comprise handling and transportation of semi-finished and finished steel products, such as steel slabs, billets, and plates; metal recovery and slag handling, processing, and sales services consist of recycling and processing the slag to recover metallic material; an d surface conditioning services include removing imperfections from semi-finished steel products to be used in applications that require unblemished finishes, such as household appliances and automobiles. The company?s raw materials procurement and logistics services comprise purchasing, on behalf of customers, raw material inputs, including ferrous scrap, scrap substitutes, coke, coal, ore, non-ferrous metals, ferro-alloys, and other raw materials used in steel making, as well as arranging point-to-point delivery logistics. Its proprietary software-based raw materials cost optimization services consist of development and marketing of Scrap OptiMiser and GenBlend software applications that aid mills in the planning, procurement, and utilization of ferrous scrap and scrap substitutes. The company was founded in 1926 and is headquartered in Glassport, Pennsylvania. TMS International Corp. is a subsidiary of Onex Corporation.

Advisors' Opinion:

[By Rich Duprey]
Outsourced industrial services provider�TMS International (NYSE: TMS ) announced on Friday its second-quarter dividend of $0.10 per share, the same rate it paid last quarter after initiating the payout.
[By Seth Jayson]
Calling all cash flows
When you are trying to buy the market's best stocks, it's worth checking up on your companies' free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That's what we do with this series. Today, we're checking in on TMS International (NYSE: TMS ) , whose recent revenue and earnings are plotted below.

Best Diversified Bank Companies To Buy Right Now: Poly Shield Technologies Inc (SHPR)

Poly Shield Technologies Inc. (Poly Shield), incorporated on March 2, 2000, is a research, development and marketing company providing environmental, energy saving and durability solutions. The Company's are designed and manufactured under the advanced bio-scrubber technology and includes a line of protective fluoropolymer coatings. Poly Shield�� fluoropolymer products are manufactured at a production facility in Florida. Poly Shield�� manufactured fluoropolymer coatings are used in a number of different industries including marine, aerospace, oilfield, industrial, commercial, and residential applications. In addition, Poly Shield offers a line of antimicrobial coatings for use in hospital or food industries. In December 2013, Poly Shield Technologies Inc sold New World Technologies Group, Inc. to Viveros.

The Company's products include bio-scrubber, supershield, superiorshield and microshield. Its products are used in aerospace, cruise ship lines, marine, military, oil, and energy production industries. The Company's bio-scrubber is designed to remove alkali metals from fuel in an effort to protect gas turbines from high temperature corrosion. The technology has been installed on active ships within the cruise line industry.

SuperShield is a fluoropolymer coating that is formulated to work with a variety of residential, commercial, industrial and marine applications. It is a fluoroplymer resin that offers weathering ability and the choice of temperature curing. Its flagship product, SuperShield 100, containing fluoropolymer resins provides up to a 50 year service life on a steel and metal surfaces. Its SuperShield S is superhydrophobic and superoleophobic, with characteristic complex micro and nanoscopic surface, which minimizes adhesion. SuperShield S100 is also superhydrophobic and superoleophobic. SuperShield S100 is provides 50 year service life. The ultimate anti-fouling coating for ship hulls, oilfield rigs, heavy equipment, airplanes, bridges, etc.

! SuperiorShield is protective and energy saving roof coatings. Its superiorShield coating reduces heat transfer through infrared radiation, conduction and convection. SuperiorShield has the capability to reflect 90% of the suns ultraviolet (UV) rays.

MicroShield is a anti-microbial coating. MicroShield is an active antibacterial destroying the cell membrane and inducing oxidative deoxyribonucleic acid (DNA) and protein damage of microbes. It also acts as a bacteriostat, virostat and fungistat, inhibiting bacterial, viral and fungal growth.

Advisors' Opinion:

[By Peter Graham]
Small cap stocks Soul and Vibe Interactive Inc (OTCBB: SOUL), Globalstar, Inc (OTCMKTS: GSAT) and Poly Shield Technologies Inc (OTCBB: SHPR) have been getting some attention lately in various investment newsletters or investor alerts with at least two of these stocks being the subject of some sort of paid stock promotional or investor relations type of activities. With that in mind, just how hot are these three small cap stocks for investors or traders? Here is a quick reality check:

Best Diversified Bank Companies To Buy Right Now: Gartner Inc (IT)

Gartner, Inc. (Gartner), incorporated on June 1, 1990, is an information technology (IT) research and advisory company. The Company operates in three business segments: Research, Consulting and Events.

Research provides objective insight on critical and timely technology and supply chain initiatives for chief information officers (CIO), other IT professionals, supply chain leaders, technology companies and the investment community through reports, briefings, tools, access to its analysts, peer networking services and membership programs that enables its clients to make better decisions about their IT and supply chain investments. Consulting provides customized solutions to client needs through on-site, day-to-day support, as well as tools for measuring and improving IT performance with a focus on cost, performance, efficiency, and quality. Events provide IT, supply chain and business professionals the opportunity to attend various symposia, conferences and exhibitions to learn, contribute and network with their peers.

Research

Gartner delivers independent, objective IT research and insight primarily through a subscription-based, digital media service. Gartner Research is the fundamental building block for all Gartner services and covers all technology-related markets, topics and industries, as well as supply chain topics. The Company combines its research methodologies with industry and academic relationships to create Gartner solutions that address each role within an IT organization.

The Company�� research agenda is defined by clients��needs, focusing on the critical issues, opportunities and challenges they face every day. Research analysts provide in-depth analysis on all aspects of technology, including hardware; software and systems; services; IT management; market data and forecasts; and vertical-industry issues. The Company�� research content is presented in the form of reports, briefings, updates and related tools, is delivered direc! tly to the client�� desktop via its Website and/or product-specific portals.

Consulting

Gartner Consulting deepens relationships with its research clients by extending the reach of its research through custom consulting engagements. Gartner Consulting brings together its research insight, benchmarking data, problem-solving methodologies and hands-on experience to improve the return on a client�� IT investment. Consulting solutions capitalize on Gartner assets that are invaluable to IT decision making, including: its research, which ensures that its consulting analyses and advice are based on a deep understanding of the IT environment and the business of IT; its market independence, which keeps its consultants focused on its client�� success.

Gartner Consulting provides solutions to CIOs and other IT executives, and to those professionals responsible for IT applications, enterprise architecture, go-to-market strategies, infrastructure and operations, programs and portfolio management, and sourcing and vendor relationships. Consulting also provides targeted consulting services to professionals in specific industries. Finally, the Company provides actionable solutions for IT cost optimization, technology modernization and IT sourcing optimization initiatives.

Events

Gartner Symposium/ITxpo events and Gartner Summit events are gatherings of technology�� senior IT professionals, business strategists and practitioners. Gartner Events offers relevant and actionable technology sessions led by Gartner analysts to clients and non-clients. These sessions are augmented with technology showcases, peer exchanges, analyst one-on-one meetings, workshops and keynotes by technology�� top leaders. They also provide attendees with an opportunity to interact with business executives from the technology companies.

Gartner Events attract high-level IT and business professionals who seek in-depth knowledge about technology products and serv! ices. Gar! tner Symposium/ITxpo events are strategic conferences held in various locations throughout the world for CIOs and other senior IT and business professionals. Gartner Summit events focus on specific topics, technologies and industries, providing IT professionals with the insight, solutions and networking opportunities to succeed in their job role. Finally, the Company offers targeted events for CIOs and IT executives, such as CIO Leadership Forum.

Advisors' Opinion:

[By Eric Volkman]
Alamy Late last month, Chinese hardware giant Lenovo (LNVGY) was the subject of many headlines -- not all of them complimentary -- when it signed a high-profile deal to buy the Motorola Mobility smartphone unit from Google (GOOG). The Asian firm is ponying up a cool $2.9 billion to acquire the business, which is monstrously unprofitable to the tune of a $645 million operating loss in the first nine months of 2013. The market didn't appreciate this. Disturbed by the idea of gallons of red ink spilling from Motorola Mobility onto Lenovo's results, investors traded down the firm's stock by as much as 14 percent after the deal was made public. This might have been compounded by the firm's previous announcement, made only days earlier, that it was spending $2.3 billion to purchase IBM's (IBM) x86 -- read: lower-end -- line of servers. Was such a sell-off, in reaction to either or both, justified? At Home Abroad Lenovo is one of those companies that likes to expand by acquisition. Few Westerners had ever heard of the IT manufacturer in 2005 when it closed its first big buy -- the personal computing division of IBM, for total consideration of around $1.75 billion. The purchase seemed a counterintuitive move when everyone knew that a future stuffed with wireless Internet and portable computing was just around the corner. But guess what? Lenovo not only sold plenty of notebooks and desktops, it managed to grow into the top PC manufacturer in the world. According to figures from Gartner (IT), in Q4 2013 the company was the clear market leader in terms of PC vendor unit shipments. It moved nearly 15 million PCs during the quarter, a figure 6.6 percent higher than in the same period the previous year. This was particularly impressive considering that total shipments for the industry dropped by almost 7 percent over that time frame. Lenovo was able to do this because, for most of its life, it's made big strides in less affluent markets and is continuing to do so. In
[By John Bonnanzio]
The fund�� top holdings are Telsa, Henry Schein (HSIC), United Rentals (URI), Gartner (IT) and Kansas City Southern (KSU).

The fund also has some exposure to pricey biotech. Even so, this is hardly a shoot-the-lights-out growth fund as volatility is below all his mid-cap peers. To that end, this trade actually tempers risk while increasing growth exposure.

Best Diversified Bank Companies To Buy Right Now: Forbes Energy Services Ltd (FES)

Forbes Energy Services Ltd. (FES Ltd) is an independent oilfield services contractor that provides a range of well site services to oil and natural gas drilling and producing companies to help develop and enhance the production of oil and natural gas. These services include fluid hauling, fluid disposal, well maintenance, completion services, workovers and recompletions, plugging and abandonment, and tubing testing. FES Ltd operates in two segments: well servicing and fluid logistics and other. Its operations are concentrated in the onshore oil and natural gas producing regions of Texas, with additional locations in Mississippi, in Pennsylvania and, prior to the disposition of its Mexican assets in January 2012, which is discussed below, in Mexico. In January 2012, the Company sold its assets located in Mexico, as well as its equity interests in Forbes Energy Services Mexico Servicios de Personal, S. de R.L. de C.V. Advisors' Opinion:

[By CRWE]
Forbes Energy Services Ltd. (NASDAQ:FES), a leader in well servicing and fluid logistics management in the oilfield services industry, will participate in the GHS 100 Energy Conference being held June 25-26, 2012, at the Intercontinental Hotel in San Francisco.

Monday, April 28, 2014

Sponsors pulling support of Los Angeles Clippers

Hot Integrated Utility Companies To Own In Right Now

LOS ANGELES – Sponsors are pulling a fast break away from the Los Angeles Clippers and their embattled owner, Donald Sterling.

As the condemnation of Sterling and his racially insensitive comments spread Monday, major financial supporters of the NBA franchise announced they were severing ties with the Clippers.

In rapid succession, the mass exodus included used car seller CarMax, State Farm Insurance, Kia Motors America, airline Virgin America, P. Diddy's water brand, AQUAHydrate, Red Bull, Yokohama tires and Mercedes-Benz.

As AQUAHydrate said in a statement:

"In the wake of Donald Sterling's alleged defamatory and intolerable comments we have decided to suspend our sponsorship with the L.A. Clippers until the NBA completes its investigation. We fully support the players and fans of the L.A. Clippers and wish them the best in the remainder of the playoffs."

Staples Center, home to the Clippers, issued its own statement Monday:

"We are deeply troubled by these disturbing remarks which go against everything we believe in as an organization. We support the players, the coaches, the rest of the team and their fans and we are committed to providing a safe, secure and welcoming environment for everyone" at Tuesday's Game 5 of the Clippers' first-round playoff series against the visiting Golden State Warriors. The series is tied at 2-2.

Club finances aren't made public, so it is not known how much money the loss of sponsorships has cost the Clippers, or the NBA.

Clubs contribute an equal percentage of their revenue into the revenue-sharing system, and receive 1/30th back. Meaning, a club with low revenues will receive a greater amount than it puts in, and clubs with high revenues will pay in more than they receive.

Nonetheless, the Clippers are taking a hit.

VIDEO: NBA'S reputation being t! arnished by Sterling fallout

USA TODAY Sports columnist Nancy Armour weighs in on the controversy surrounding Donald Sterling's alleged racist remarks and says as public figures, there is a burden on Sterling and NBA owners to behave appropriately. USA TODAY Sports

Michael Gordon, principal and chief executive officer at Group Gordon, a corporate and crisis PR firm in New York, was pretty definite about the future for the Clippers with Sterling as owner.

"For Sterling himself, it's over. There's no crisis management in the world that will fix this, so he has to go," Gordon told USA TODAY Sports. "Not until he goes can both the Clippers and the NBA fix this.

"Of all the parties involved – Sterling, the Clippers and the NBA – the one primarily in crisis management right now is the NBA. They're the ones that need to move quickly to get rid of Sterling and get in a more responsible, thoughtful owner. As soon as that happens, assuming it's the right owner, everyone can begin to heal."

Until then, corporate sponsors are doing damage control. Amtrak, Anheuser-Busch and Corona beer have not totally cut ties but made it clear what direction they expect the NBA to go:

*An Amtrak spokesperson told USA TODAY Sports the company is working to remove any remnants of a sponsorship agreement it had with the Clippers that expired at the end of the regular season.

"Amtrak believes the language used is unacceptable and is inconsistent with our corporate belief to treat everyone with integrity and dignity," the company said in a statement. "As with any sponsorship advertising, some assets remain in market – to that end we are diligently working to remove all sponsorship assets.

"Moving forward, we will continue to monitor the situation as we look to make decisions about 2014-15 sports marketing sponsorships."

*Anheuser-Busch released this statement:

"As the official beer of the NBA, we are disappointed to hear the alleged recent comments attributed to L.A. Clippers owner Donald Sterling. While Anheuser-Busch and Bud Light are not team sponsors of the L.A. Clippers, we fully support the NBA's efforts to investigate quickly and trust that they will take appropriate action."

*Constellation Brands, paren! t company to Corona, emailed this statement to USA TODAY Sports:

"Like everyone else, Corona is appalled by the comments allegedly made by the owner of the Los Angeles Clippers. These comments run counter to the type of brand Corona aspires to be. Because of this, we are suspending our sponsorship agreement with the Clippers until the NBA completes its investigation."

MORE: NBA to hold news conference Tuesday on Sterling

Red Bull is pulling its Clippers support, while still sponsoring Griffin.

"We trust and respect the NBA's process to formally investigate the matter, and in the interim, are suspending all team-related marketing activities," the company said in a statement supplied to USA TODAY Sports. "We will continue to support our Red Bull athlete, Blake Griffin, his teammates and coaching staff in their pursuit of an NBA title."

In a statement by Yokohama marketing director Andrew Briggs: "Yokohama Tire Corporation does not tolerate discrimination in any fashion. The alleged remarks by Los Angeles Clippers owner Donald Sterling are completely unacceptable and we find it necessary to immediately suspend our sponsorship of the organization as a result. We will continue to assess the situation and weigh our options. Meanwhile, we wish to express our continued support to the Clippers players and fans."

Mercedes-Benz, in an email to USA TODAY Sports, said: "We're obviously concerned about the alleged comments attributed to the Clippers' owner. We find these comments to be deplorable and completely against the values we promote as an organization. Our dealer group shares our concern and has moved to cease its sponsorship of the Clippers effective immediately, despite their affinity for the Clippers and their fans."

But Mercedes-Benz and Kia are among companies that still showed up on the Clippers' official website, with advertising, promotions or support. Others include Ford, Miller Lite, Commerce Casino, Chumash Casino Resort and Mandalay Bay Resort and Casino.

WAT! CH: Sterling's racist comments not new in sports world

You can add Donald Sterling to a list of sports world figures whose insensitive and racist comments put their jobs in jeopardy. (USA TODAY, USA NOW)

"CarMax finds the statements attributed to the Clippers owner completely unacceptable," a company statement said. "These views conflict with CarMax's culture of respect for all individuals. While we have been a proud Clippers sponsor for nine years and support the team, fans and community, these statements necessitate that CarMax end its sponsorship."

State Farm also pulled its Clippers' sponsorship, although the company said it will continue its popular ad series featuring Clippers point guard Chris Paul and his fictitious nerdy brother, Cliff Paul.

"The remarks attributed to the Clippers owner are offensive," State Farm said in a statement. "While those involved sort out the facts, we will be taking a pause in our relationship with the organization. We are monitoring the situation and we'll continually assess our options. We have a great relationship with Chris Paul and will continue the Born to Assist advertising campaign involving Chris and now other NBA players."

MORE: NAACP exec gives explanation for award to Sterling

Kia Motors America, which has worked with Clippers All-Star forward Blake Griffin on a series of ads, released this statement: "The comments allegedly made by Clippers owner Donald Sterling are offensive and reprehensible, and they are inconsistent with our views and values. We are suspending our advertising and sponsorship activities with the Clippers. Meanwhile, as fans of the game of basketball, our support of the players and the sport is unwavering."

A Virgin America spokesperson said, "While we continue to support the fans and the players, Virgin America has made the decision to end its sponsorship of the L.A. Clippers."

Contributing: Nancy Armour, Jeff Zillgitt

PHOTOS: Donald Sterling through the years

FacebookTwitterGoogle+LinkedInClippers owner Donald Sterling through the years FullscreenPost to FacebookPosted!

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Donald Sterling, shown in 2010, bought the San Diego Clippers in 1981 and has been a presence in the Los Angeles sports scene since moving his team north in 1984. Flip through this gallery for more of Sterling. Mark J. Terrill, APFullscreen

Sterling and former Los Angeles mayor Tom Bradley pose for a photo in 1987. Andrew D. Bernstein, NBAE/Getty ImagesFullscreen

Sterling and LaLa Vazquez sit next to each other at a Clippers-Nuggets playoff game, where Vazquez's future husband, Carmelo Anthony, starred for Denver. Garrett Ellwood, NBAE/Getty ImagesFullscreen

Sterling and former GM Elgin Baylor pose after Baylor, who later sued the team for wrongful termination, won the 2005-06 NBA Executive of the Year Award. Andrew D. Bernstein, NBAE/Getty ImagesFullscreen

Sterling smiles during the first round of the 2012 playoffs, when the Clippers beat the Grizzlies. Jayne Kamin-Oncea, USA TODAY SportsFullscreen

Sterling and wife Shelly attend a game in November 2013. Kirby Lee, USA TODAY SportsFullscreen

Sterling sits courtside at a December 2012 game. Jayne Kamin-Oncea, USA TODAY SportsFullscreen

Sterling greets fans during December 2012. Jayne Kamin-Oncea, USA TODAY SportsFullscreen

Sterling takes in player introductions during the 1997 playoffs, when his team lost to the Jazz. Robert Hanashiro, USA TODAY SportsFullscreen

Sterling has a laugh with former Clippers star Elton Brand in 2001. Catherine Steenkeste, NBAE/Getty ImagesFullscreen

Sterling talks with former Clippers star Lamar Odom before a 2000 game. Robert Hanashiro, USA TODAY SportsFullscreen

Sterling and former NBA commissioner David Stern meet with officials before a Clippers 2012 second-round playoff game vs. the Spurs. Jayne Kamin-Oncea, USA TODAY SportsFullscreen

Sterling and wife Shelly pose for a photo before a 2012 playoff game. Andrew D. Bernstein NBAE/Getty ImagesFullscreen

Sterling during the 2012 NBA playoffs. Jayne Kamin-Oncea, USA TODAY SportsFullscreenLike this topic? You may also like these photo galleries:Replay

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Sunday, April 27, 2014

3 Reasons It Might Be a Good Idea to Ignore the Dow Today

This week is a big one for investors who have been looking for some economic data points to direct their investing. But with so much news coming later in the week, the Dow Jones Industrial Average (DJINDICES: ^DJI ) may not be a reliable guide today as traders wait for more substantial news throughout the remainder of the week. As of 11:45 a.m. EDT, the index is down slightly with a 71-point loss. With more substantial data points yet to come, there are plenty of reasons to just let today's Dow moves go by the wayside.

Reason 1: Pending home sales
This morning's report of signed contracts for existing homes during the month of June showed a 0.4% decline. Though analysts had anticipated a 1% drop, the actual results still mark a fall from May's six-year high and could signal the impact of rising interest rates on sales. One of the more likely culprits, however, is the continued lack of inventory for buyers to choose from. As last week's existing homes sales report noted, the current inventory of existing homes stands at a 5.2-month supply -- well below the level that economists view as a good balance between supply and demand.

Both of the Dow bank component stocks are down this morning, with Bank of America (NYSE: BAC ) and JPMorgan (NYSE: JPM ) down more than 1% so far in trading. Though the losses may not be tied directly to this morning's sales report, housing data has been extremely important for bank investors lately. JPMorgan is the second-largest mortgage originator in the country, and B of A has been fervently trying to gain more ground in the market, so a decline in potential sales (read: loans) is a problem for the banks, which rely on interest revenue heavily.

Reason 2: More from Bernanke
Tomorrow, the Federal Open Market Committee will begin its two-day meeting to discuss the current monetary policy and any changes that they will make. Since the markets pay very close attention to these meetings and Ben Bernanke's announcement on Wednesday afternoon, there's sure to be a lot of movement in the coming days. The current speculation features a cutback in the Fed's bond purchasing by $20 billion starting in September -- though investors will have to wait till Wednesday to see if there's any merit to that plan.

As the Fed's stimulus policy changes, there will be an impact on firms with large investments, particularly in bonds. For insurers, this could pose a problem going forward since investment income is an essential part of their business operations. During its first-quarter earnings call, Allstate (NYSE: ALL ) disclosed that it had altered its investing plan in order to acclimate to the current low-interest-rate environment, though it would be a sacrifice of higher returns later on. This type of change was not widely used, as insurers would have to make a series of adjustments should interest rates rise at a later time. Either way, investors should be aware of such adjustments as the environment transitions.

Reason 3: Employment data
Friday is the big day for labor market data, with the release of the Labor Department's Employment Situation report. Since labor market conditions are a huge part of the Fed's calculations for when to pull back on stimulus policies, Mr. Market has been keen to move dramatically when such reports are released.

Companies that are dependent on consumer spending also pay close attention to labor statistics, since more employed people could result in higher spending. Dow component American Express (NYSE: AXP ) has been highly successful in large part because it caters to spenders in the high-income demographics. But as people within all segments of the population begin spending at higher rates, the credit card company and its peers will benefit from a broader revenue stream.

Today's not the day
If there was ever a day to take a break from watching the Dow, it's today. With so much information to come later in the week, any big decisions today may be wasted once investors start reacting to the news items listed above. And as a long-term investor, you know that any single day isn't worth sweating over, so you might want to consider taking the day off!

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Saturday, April 26, 2014

If Ukraine Sent the Dow Plunging, Why Didn't Defense Stocks Rise?

The Dow Jones Industrials (DJINDICES: ^DJI ) finished the week on a losing note, falling 140 points on Friday and ending with a weekly loss of about a third of a percent. Along with the onslaught of earnings results announced today, many market commentators blamed the increasing chance of armed conflict between Ukraine and Russia as justifying the market's drop. But if that were the case, you'd expect to see defense stocks rise -- yet neither United Technologies (NYSE: UTX ) nor Boeing (NYSE: BA ) managed to gain ground on the day despite their defense-industry ties, and purer-play defense stocks also posted losses today. Why weren't defense stocks the right play for fears of war?

Photo: Wikimedia Commons

The peace dividend and your investments
The problem with this line of thinking is that investors want the best of both worlds. On one hand, when it became clear that defense spending would be on a downward trajectory over the long run, Boeing and United Technologies did an especially good job of diversifying their businesses and emphasizing the non-defense areas of their respective conglomerates. Boeing, in particular, reemphasized the importance of its commercial aircraft division, spending billions on research and development in order to come out with new models of aircraft that were more fuel-efficient and represented good value for airlines seeking to update and expand their fleets. United Technologies has not only grown its own aerospace exposure accordingly in order to accommodate the rising demand for aircraft, but it also has continued looking to its Otis elevator division and its UTC Building & Industrial Systems business for growth in the commercial economy.

That doesn't mean that United Technologies and Boeing get nothing from their military businesses. Boeing has worked hard on fighters that it hopes can supplant rival offerings and move forward as the state-of-the-art aircraft for U.S. armed forces in multiple branches of the military. United Technologies' Sikorsky helicopter business is poised to grow from sales from around the world. But defense no longer represents the top opportunity for either Boeing or United Technologies.

Moreover, investors appear skeptical that Russia will actually follow through on its threats to take further action in Ukraine. One can explain away the situation in Crimea as having been distinct from what's happening on the mainland, although the same mix of ethnic Russians living in Ukrainian territory give Russia the same excuse to exercise its power over the eastern part of Ukraine. Yet, with Europe economically dependent on Russia for energy, and with the U.S. weary of war, investors in defense stocks are trying to avoid getting head-faked by unrealistic expectations of how quickly the U.S. would come to Ukraine's aid if a Russian invasion took place.

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If the situation in Ukraine continues to worsen, there will come a time when investing in defense stocks will make sense. But we're not there yet, and that's why the components of the Dow Jones Industrials that have defense exposure aren't soaring today.

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Friday, April 25, 2014

Which Snack Maker Are You Looking For?

Food industry is one of the safest options to invest in since food can never be out of vogue. Moreover, even snack making industry is quite a lucrative one with some of the prominent players being Kellogg (K), Mondelez International (MDLZ) and J&J Snack Foods (JJSF). However, it is important to understand which among these will be the best pick for any investor.

Stock price comparison of industry players

When stock price performance is compared for all the three players, J&J Snack Foods proves to be the best performer, providing the highest return to its investors.

With a stock price appreciation of 28.6%, J&J has outpaced its peers. Mondelez, too, has performed well with a return of 10.2% in the last one year. The company has not been able to live up to investors' expectations in its last quarter, missing on the top line estimates. This is mainly because of decrease in coffee prices, which hampered the retailer's sales. Also, it has been witnessing lower demand for gum in the developing nations. However, coffee prices are expected to increase in the future, which should lead to higher revenue.

Mondelez has been taking measures to boost its results. For example, its new biscuit facility in Mexico is expected to lower costs and expand margins. Also, it plans to put up new manufacturing lines for its Oreo brand which will cut costs. Additionally, cocoa price is expected to decrease, which should prove to be beneficial.

Kellogg has been the worst performer with almost flat returns in the last one year. This is mainly because of its dependence on sale of cereals. Demand for cereals has been decreasing because of a number of new breakfast options such as Greek yogurts and smoothies.

Nonetheless, Kellogg is taking initiatives to attract customers. It plans to launch a number of new products in order to lure customers. New introductions include Pringles Tortilla chips in various flavours, Cheez it Grooves, and three new varieties of cereals. The retailer is also focused on breakfast items such as SpecialK breakfast sandwich, Kashi and Quinoa burger which are made with organic ingredients. It will be interesting to see how these new products help Kellogg provide stiff competition to other industry players.

Additionally, if we consider profit margin of these companies, on a trailing twelve month basis, Kellogg looks better. It has a profit margin of 12.2% whereas J&J Snack Foods and Mondelez have a profit margin of 7.6% and 11.1%, respectively. However, J&J Snack Foods has been expanding its margins by increasing product prices and keeping its costs under check at the same time. In fact, Kellogg also provides the highest return on equity of 59.4% as against the return of 13.2% and 7.2% of J&J Snack Foods and Mondelez, respectively. Although Kellogg's stock price performance has been dismal, it is providing highest returns to its equity investors.

Final thoughts

J&J Snack Foods has been able to put up a great show mainly because of its acquisition strategy. Acquisition of businesses such as New York Pretzel has strengthened J&J Snack's business, enabling it to outperform its peers. However, Mondelez and Kellogg too are making a number of efforts to perform better. In fact, they look better when profit margins are concerned, with Kellogg providing the highest margin. Therefore, investing in J&J will give better returns whereas Kellogg gives better margins. If returns are what you are looking for, do not look beyond J&J Snack Foods.

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Wednesday, April 23, 2014

Texas Instruments first-quarter profit rises

Texas Instruments Inc. posted a 35% increase in its first-quarter profit as the chip maker's revenue and margins improved.

Looking ahead, the company forecast second quarter per-share earnings of 55 cents to 63 cents on revenue of $3.14 billion to $3.40 billion. Analysts polled by Thomson Reuters projected per-share earnings of 52 cents on revenue of $3.15 billion.

The Dallas-based company (TXN) , whose chips are used for many kinds of devices purchased by consumers and businesses, has shifted its strategy to grapple with broad changes in the semiconductor market.

In January, the company announced plans to trim about 1,100 jobs, saying the reductions would affect employees in the U.S., Japan and India. TI said at the time it expected the moves to translate into about $130 million in annual savings by the end of 2014, and would trigger charges of about $80 million.

For the latest quarter, TI posted a profit of $487 million, or 44 cents a share, up from $362 million, or 32 cents a share, a year earlier. The latest results included a gain of $37 million, which benefited earnings by two cents a share and wasn't included in the company's prior guidance, related to sales of a site and other assets associated with previously announced restructuring actions, said TI.

Sales rose 3.4% to $2.98 billion.

The company in January had projected per-share earnings of 36 cents to 44 cents on revenue of $2.83 billion to $3.07 billion.

Gross margin widened to 53.9% from 47.6%.

In the latest quarter, sales of analog chips—the company's biggest top-line contributor—climbed 11%, while sales in the embedded processing business rose 17%.

Shares rose 1.7% to $47.25 in after-hours trading. Through Wednesday's close, the stock has risen 5.8% since the start of the year.

--Anna Prior

Tuesday, April 22, 2014

America's Favorite Doughnut

America's two favorite doughnut brands are without question Dunkin' Brands (NASDAQ: DNKN ) and Krispy Kreme Doughnuts (NYSE: KKD ) . But which brand does America love more? Let's take a look at three tasty stocks -- Krispy Kreme, Dunkin' Brands, and their kissing cousin Starbucks (NASDAQ: SBUX ) -- to decide.

Dunkin' Brands is by far the world's largest purveyor of doughnuts, but size doesn't mean favorite. The company operates more than 18,000 points of distribution in nearly 60 countries worldwide, including 11,000 Dunkin' Donuts and 7,300 Baskin-Robbins. Meanwhile, the Krispy Kreme hot Original Glazed doughnut can be found in 21 countries, and the company operates 773 stores.

Dunkin' may operate more stores than Krispy Kreme, but everyone knows that both brands sell doughnuts in more places than just their stores. Neither company reports the number of doughnuts sold, so investors will just have to judge the companies on the numbers like they would for any other brand (followed by a thoughtful taste test, of course).

Dunkin' Brands' most recent quarterly earnings per share increased 26.5%, and revenue rose 13.3%. The company enjoyed comparable-store sales growth of 3.5% in the United States. Operating income increased 11.8% to $89.2 million, as the company expanded its operating margin 110 basis points to 48.7%. During the fourth quarter of FY 2013, 309 new restaurants were opened worldwide, which included 149 net new Dunkin' Donuts locations in the United States.

Dunkin' has seen consistent growth in average revenue per store at domestic Dunkin' Donuts locations for the last five years. Investors were also quite happy to learn of a dividend increase of 21.1% from $0.19 to $0.23 and a share-repurchase authorization.

A doughnut in the hand is worth two in the box
There may be more Dunkin' Donuts out there, but Krispy Kreme Doughnuts has carried on an impressive 21 consecutive quarters of positive same-store growth. In the FY 2013 fourth quarter, revenue increased 3.3% to $112.7 million from $109.1 million as same-store sales rose 1.6% for the 21st consecutive quarterly increase.

For fiscal year 2013, Krispy Kreme brought in revenue of $460.3 million, which represents a 6% increase from the $435.8 million over the prior year.

The company's adjusted net income increased 37% to $8.3 million, or $0.12 per share. This compares to $6.1 million, or $0.09 per share, in the year-ago period. Krispy Kreme also repurchased $20.5 million worth of common stock in fiscal 2014, leaving $55.7 million in cash on hand.

In comparison, for the year-ago period, the quarter ended May 5, 2013 (Q1 FY 2014), Krispy Kreme Doughnuts beat expectations on revenue and met expectations on earnings per share. Profits increased 33% on 11% revenue growth. The company brought in revenue of $120.6 million, and generally accepted accounting principles reported sales were 11% higher than the prior-year quarter's $108.5 million.

Krispy Kreme also added 80 new locations around the world in 2013, a 6.7% increase in comparable-store sales over 2012.

...And a coffee to go
What's a doughnut without a cup of coffee to dunk it in?

Starbucks also continues to perform well. In the most recent quarter, reported in January, earnings per share increased 24.6%, and revenue increased 11.8% year over year. Global comparable-store sales grew by an impressive 5%. Starbucks' operating margin increased 260 basis points to 19.2%.

Starbucks reported fiscal first quarter EPS of $0.71, up from $0.57 in the year-ago period and beating analysts' expectations of $0.69 in EPS. Revenue hit $4.2 billion, up from $3.8 billion a year ago.

The real evidence of the company's growth and strength was seen with the expansion of 417 new locations during the quarter. There are now 4,000 locations in Asia, 2,000 locations in Europe, the Middle East, and Africa, and 20,000 total locations worldwide to get a caffeine fix. Starbucks currently has 13,279 U.S. stores.

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Starbucks continues its plans for global domination by tailoring its menu to appeal to regional tastes. For instance, the Chinese menu includes more green tea-flavored drinks, while younger demographics in the U.S. are courted by mobile- payment devices. Mobile payments now account for up to 10% of the company's in-store purchases in the U.S.

No company is perfect, although each of these companies is a very attractive buy. Each chain has an area it could improve in. For instance, Dunkin' Brands could expand the number of drive-thru units and increase customer service time.

Starbucks could continue to improve its food offerings (can you imagine what would happen if it offered hot, fresh doughnuts?). And it needs to be cautious with price increases. Krispy Kreme has improved from a rough beginning on the stock exchange to becoming a truly formidable stock. The company has strong earnings and impressive management but could do better when it comes to comparable-store growth.

Dunkin' Brands saw comparable-store growth of 3.5%, Starbucks had global growth of 5%, but Krispy Kreme only showed 1.6%. Normally in the restaurant business 1.6% would be considered decent or passable, even strong. But when the competition is at nearly twice that rate, it indicates a great deal of room for improvement.

And that ultimately answers the question of who makes America's favorite doughnut. It's the company that is building the most new stores and growing sales within existing stores. All three companies are good, strong stocks, but it's Dunkin' Brands that currently wins for the title of America's Favorite Doughnut.

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Monday, April 21, 2014

Should Freeport-McMoRan Copper & Gold Inc. Investors Be Prepared for the Worst?

Photo credit: Flickr/benketaro

Freeport-McMoRan (NYSE: FCX ) is expected to report first quarter earnings on April 24 before markets open. On average, analysts estimated the company will earn $0.49 per share on revenue of $5.18 billion. For the past four quarters, however, analysts have been surprised each time as the company reported higher earnings per share than estimates. This time, however, the company could instead surprise to the downside.

Copper's tarnish
While Freeport-McMoRan has diversified its revenue into oil and gas, the company's cash flow is still anchored by copper. This year the company is banking on copper prices sticking around $3.25 per pound in order to deliver its expected $9 billion in operating cash flow. The issue is that every $0.10 per pound change in the price of copper will impact cash flow by $370 million. As the copper price chart to the right shows, prices plunged toward the end of the quarter, which could have a noticeable impact on Freeport-McMoRan's earnings in this quarter and on its future guidance.

Source: Metal Prices.com

If there is some good news for Freeport-McMoRan investors it's the fact that the prices of its other key commodities were strong in the quarter. Gold prices, for example, surged as much as 14% on the quarter to $1,379 per ounce. While prices weakened toward the end of the quarter, gold prices still remained well above Freeport-McMoRan's guidance. In fact, its operating cash flow is based on $1,200 gold so there is some upside to its earnings thanks to rising gold prices.

Rising gold prices have provided a nice boost to gold miners this year. Goldcorp (NYSE: GG ) , for example, is up more than 11% so far this year while the market is roughly flat. Goldcorp has also crushed the return of Freeport-McMoRan, which is down more than 12% this year. That underperformance could have been much worse if it wasn't for Freeport's diversification away from copper and into other commodities like gold.

Will oil and gas save the quarter?
Freeport-McMoRan's is also focused on growing oil and gas production to help it offset copper volatility in the future. This year 27% of its EBITDA is expected to come from oil and gas, however, that's expected to grow over time. In fact, over the next five years the company expects double energy production, with its next boost coming from first production from the Anadarko Petroleum (NYSE: APC ) led Lucius development that is expected to deliver first oil in the second half of this year. Freeport-McMoRan owns 23.33% of Lucius while Anadarko owns 27.8% and a whole host of other operators own smaller stakes. Lucius is expected to produce about 80,000 barrels of oil per day along with 450 million cubic feet of natural gas per day. It's an important project for Freeport-McMoRan as it will provide a nice boost to its Gulf of Mexico production which averaged 60,000 barrels of oil equivalent per day last quarter.

Photo credit: Anadarko Petroleum

Lucius of course won't help Feeport-McMoRan this quarter. It's also unlikely that the company will see as much upside from its other areas like the Eagle Ford shale, which helped fuel gains in past quarters. This is because Freeport is specifically managing its Eagle Ford shale assets for cash flow as opposed to growth. The problem with that is that shale production declines rapidly, making it tough to keep profits flowing. That's why I'm not sure oil and gas will be able to save Freeport this quarter, though it will still help provide a cushion from copper's fall.

Investor takeaway
Slumping copper prices will certainly have a negative impact on Freeport-McMoRan's first quarter results as well as its guidance for the rest of the year. That being said its product diversification in gold and energy should help take away some of the sting of falling copper prices. So, while investors don't need to prepare for the worst, I wouldn't expect this to be a great quarter for the company.

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Sunday, April 20, 2014

Maria Bartiromo talks to BlackBerry CEO Chen

Privacy has become the luxury of the day, in a world ripe with hacking, NSA spying, and information overload. But it is a place BlackBerry sees as its biggest opportunity. The firm, which has lost 90% of its value, and half of its staff, is fighting to stay alive, with what it calls the most secure technology in the industry. The company hired industry veteran and former Sybase CEO John Chen last November to turn things around. And even though consumers have left in droves for Apple and Android smartphones, Chen is counting on business and governments to capitalize on the one thing everyone wants: privacy. And don't call him a smartphone maker, because he says BlackBerry's secure technology is a lot more than handsets. Don't count BlackBerry out just yet. I caught up with Chen to talk turnaround. Our interview follows, edited for clarity and length.

Q: You have been leading a recovery at BlackBerry. How is it going?

A: It is a six- to eight-quarter journey. The first thing I have to do is to get into profitability, as well as cash flow breaking even. So, we have made two very specific milestones, One, by the end of this fiscal year, I expect us to be cash-flow positive from operations. And then, within the next fiscal year, I expect to start being profitable. So, those are the two milestones.

Q: People love their BlackBerrys. You have a whole host of people who really want you to succeed because they love the product. How important is this loyalty?

A: I very much appreciate of that. It's a big part of where we're going to go. When you look at our loyal customer base, it's very much concentrated in the government space, in enterprises like banks, insurance companies and various extremely productive oriented industries that need to be very secure. They need to have high security and trusting of the products, both in the handset as well as the software. That's a big part of my "road map" and strategy.

I'll give you a couple of examples: We're going to return the famili! ar user experience in the handsets business. There's a new product called the BlackBerry Classic that's coming out. It's an updated and enhanced version of one of our most popular and successful products called the Bold. It will include a keyboard and a good touch-screen, very fast Internet, Web-browsing capability and multimedia capability. But also it will be very productive and very secure. So, all the familiar things that people love, with some new technology updated. That will come out in November along with the server that helps companies manage devices. Not only the BlackBerry device, but every device, the iPhone and androids and Windows and everything else.

So, the new products will have a lot to do with the architecture . And we made some announcements of those at the Mobile World Congress.

Q: Why has it been so difficult to make money in the handset business?

A: It's a volume-driven business. And the handset business for the entire industry does not carry very high margin. So, when the volume is up, you can make some money. When the volumes are down, it's going to be difficult to make money. And then, there was also the way we designed some of our products in the past. It's not as efficient as it should be. I have done a little bit more on the supply chain to make it state of the art and very efficient. So, everything adds up. It's big volume, small margin. But that's true for everybody in the industry.

Q: You have said you're going to look at this business over six to eight quarters to see if you can make money in it and then decide whether or not other sell it. But is there a buyer out there? I mean, if you can't make the handset business work, will anybody be able to make handset business work?

A: Well, I don't expect to sell the business at all, the handset business. I actually do expect to make money out of it. Making money in the handset business starts with your material costs and the supply chain. The design is very important, the targeted ma! rket's ve! ry important; the distribution efficiency is very important. All of this comes into consideration. I personally believe that I can make a go of the business and be comfortable.

Q: Talk to us about the other parts of the business, the government business, the security, and some of the gems of the business, the B.B.M. messaging. What is the value of these businesses?

A: There's an overarching architecture that I'd like the company to be known for in three to five years, which is in a whole market which is called a machine-to-machine. Some people like to describe this as the Internet of Things or All Things Internet. The device doesn't necessarily have to be a handset. But the devices could be anything out there. It could be your car, things in your house, and so forth. Everything gets connected. And we like to become a major hub of that.

So, if you look at that vision, you can see where we're going to be a number of years down the road, and there is a device side of business, as well. The handset is the major driver of that. Security is a major driver of that. And then, there is this whole server and network operating system behind it. We are the most secure and the most reliable messaging systems, both e-mail and B.B.M., which is the BlackBerry Messenger. So, those are another part of the anchor of the Internet — All Things Internet.

And then, we have the most successful and quite dominant in the connected world, the operating system. It's called a QNX. So you could see the components, both the handset components, the network operating system components, the server component, the BlackBerry Messenger component, and the embedded operating system in QNX. If you look at all of the components to build a basic architecture from what we want to be, All Things Internet. Each and every one of these components could grow. But it will grow a lot better together.

Q: When you're talking about machine to machine, how does that work? I'm trying to understand the strength o! f BlackBe! rry away from the handset business. Is that the security or guts of the Internet?

A: It's the guts of everything that's connected through the Internet. The overall security future. You will have the analytics of all the messaging that is going on. And then, we'll have more and more intelligence. And, so, that's how I think about it. I always say that the best thing that BlackBerry has to offer is its security, productivity and communications. And then, going forward, when we connect everything and manage the traffic between everything, then I could add the analytics and intelligence onto it.

Q: Are you saying that the security at BlackBerry is better than security at other companies?

A: Oh, no doubt. First of all, we have a lot of technology that was built up over time. We have acquired a lot of different companies in the past that have created a really great security company. There's a lot of encryption technology. We have a lot of certificates, that governments around the world truly trust it. So, it's really both on experience and technology. We have no doubts, we are the No. 1 security technology provider, especially when in mobile and the wireless world.

Q: This is at a time that so many people are worried about their security, worried that their information is getting into the wrong people's hands.

A: Yes, government's already there, and enterprise just started to worry about security on data, and security on identity, which we do a lot of work on. There's going to be a new product coming out that works with our server, the best server. It's called the BlackBerry Enterprise Server. It will have identity-management software. And that identity management, data security and voice security are all part of our value-added. And if you think about that for enterprises, whether it's in commerce, or in managing the risk, they will need our technology. We have a lot of that technology. Some of it we're building. But certainly we have good voice-security technology. We! have gre! at data-security technology, which we're known for. But by putting everything together, it will create an environment that is the most secure for all the enterprises. This is where I get a lot of excitement, and why I believe BlackBerry could do very well in the market.

Q: And you do get a good response from government? Tell me about the government business and what you're expecting there.

A: Yes. We work with the most developed countries' governments. The U.S., U.K., Canada, Germany, France, Australia, New Zealand and now, India. A lot of governments are using our technology, as they do business with each other, inside of government and outside of government. It's a big part of our installed base.

Q: One of your fans is President Obama.

A: (LAUGH) Yes. A lot of heads of states, it's not only President Obama. For example, Chancellor Merkel. There are a number of heads of states and other people in the government in very high levels: They're all using BlackBerry.

Q: Speaking of Angela Merkel, and the U.S. spying on her cellphone, how damaging do you think the whole Edward Snowden thing was to people's confidence in the telecom and technology companies that they're securing their information?

A: I don't know, but I know a number of countries around the world, governments, are looking at how secure voice and data are. And they're taking steps to make it very secure. So, these are opportunities for us. We already have seen the impact. but over time, people will have a higher level of awareness and visibility.

Q: In terms of the BlackBerry Messenger business. We've seen a fair amount of M&A in this area, with Facebook buying WhatsApp and IBM for Fiberlink, VMware with AirWatch. Are there opportunities to monetize BlackBerry Messenger better?

A: Yes, in the sense that we are using this technology to generate future revenue. I focus on it a little bit differently because of the security of our messenger units. We are focused on the enterpris! e side us! ing it as a secure portal for their own internal messaging, whether it's governments, banks or in a health care world, where messages between doctors have to be secure. BlackBerry Messenger for some countries out there, is a very dominant player, like Indonesia for example.

Q: But BlackBerry has lost a lot of market share. How will you get that back? The smartphone market share dropped 3.5% to 2.9% in just the last quarter of last year. And we're seeing further deterioration. How are you going to stop this falling knife?

A: Well, I don't know if these numbers are actually correct. But let's not just debate the source. It is true that our share is dropping. I just don't know whether it's dropping as much as you point out. On the other hand, I am going to focus very much on the enterprise space. If you look at the enterprise users of smartphone, we have a much bigger share. That's not to say I gave up on the consumer market, but at this point in the recovery, we're going to focus on the enterprise side of the handset business, make that profitable, and then we're going to grow from there. Then go into other parts of the market, including the consumer side of the equation.

Q: Are you expecting Amazon to come out with a phone, too?

A: I heard a rumor of that. So, a lot of people are going to cloud the space, I'm sure.

Q: You've seen this industry evolve for years, having led and grown Sybase. What is your opinion of valuations today? WhatsApp being acquired for $19 billion, you see things like Twitter and Tesla trading where they are. Are we in another period of a bubble-like mania the way we were in the 1990s?

A: I worry a little bit about the valuation of the market also. A lot of people are starting to worry about that. Its good news that there's a lot of excitement about the future. And there's excitement about technology. There will be winners. If you go back to the early 2000s, when the Internet craze and e-commerce were all people talked about, there we! re also h! igh, big valuations for a company that went public through an IPO, and high valuations for acquisitions. And then the market broke down. But the good news is 10 years later, there are a number of really strong players out there, like the Amazons of the world, that came through that period and became one of the leaders in the technology world. So, we might see a bubble or correction, but I wouldn't give up the market dynamics, the excitement of the future. This is going to be sorting itself out — the strong vs. the weaker players. And some are going to be more fortunate than others.

Q: Will BlackBerry be in that set?

A: I'm planning to be.

Maria Bartiromo is anchor and Global Markets Editor at Fox Business Network and can be seen every day on Opening Bell at 9 a.m. on FBN and every Sunday at 10 a.m. ET, on Sunday Morning Futures on The Fox News Channel.