Two dividend paying stocks to consider today

Every week, I look at the list of weekly dividend increases, in order to uncover hidden opportunities. I also use it in order to review the dividend performance of the companies in my portfolio. In this article, I am going to highlight a couple companies, which raised dividends. I weeded out companies that has low current yields or had low streaks of dividend increases. I looked at the initial statistics such as earnings and dividend growth over the past decade, and I found them promising enough to put in focus, and place on my list for further research.

The two dividend paying companies in focus today include:

Lockheed Martin Corporation (LMT), a security and aerospace company, engages in the research, design, development, manufacture, integration, and sustainment of advanced technology systems and products for defense, civil, and commercial applications in the United States and internationally. The company raised its quarterly dividend by 15.60% to $1.33/share. This marked the eleventh consecutive annual dividend increase for this dividend achiever. Over the past decade, Lockheed Martin has managed to increase dividends at a rate of 24.70%/year. The company is projected to earn $9.46/share in 2013 and $9.64 by 2014.

Currently, Lockheed Martin trades at 13.60 times forward earnings and yields 4.10%. Values like this are hard to come by in the current environment. I analyzed the company back in 2010, and liked everything except for the fact it hadn't raised distributions for ten years in a row. I plan on reviewing the company in more detail in a future post, and make a decision on whether I should buy it or not.

Accenture plc (ACN) provides management consulting, technology, and business process outsourcing services worldwide. The company raised its semi-annual dividend by 15% to 93 cents/share. This marked the ninth consecutive annual dividend increase for Accenture. Over the past five years, Accenture has managed to increase dividends at a rate of 28.70%/year. The company ! is projected to earn $4.47/share in 2014 and $4.94 by 2014.

Currently, Accenture trades at 16.60 times forward earnings and yields 2.50%. I like how the company has managed to grow earnings and dividends over the past decade, and I also like the strong brand name that company has.

I am going to place these quality companies on top of my list for further research. I like the fact that I still can find value even in an overextended market like todays.

Full Disclosure: None

4 New Online Money Management Tools Worth A Try

I may have found some new ways to get you out of a personal finance funk.

This is the gnawing feeling many of us have that we're not managing our money well and are paying too much for 401(k)s, mutual funds, brokers and financial planners.

But four nascent websites and apps unveiled this week at the annual Finovate Fall 2013 conference in New York City could offer what you need to grow your wealth, reach your financial goals and save some money. I'd even call one of them fun. (I wrote about four others after last year's Finovate: Credit Sesame, Tuition.io, PayTap and My Virtual StrongBox; I'm glad to say these are all still around and expanding.)

My Gripes With Personal Financial Management Tools

Bear in mind that I approach this subject as someone who hasn't been a huge fan of these electronic helpers because, as I wrote in "Personal Financial Management Tools Flunk," many require a lot of effort and offer little payoff.

What's more, with so many of these products vying for your attention, it's easy to be overwhelmed by all the alternatives.

(MORE: The Key to Making Smart Money Decisions)

Says Ron Shevlin, a senior analyst at the financial services consultancy, the Aite Group: "I found six screens for apps to manage your financial life just beginning with the letter 'A' in the app store."

Here's my quick guide to four promising sites and apps from Finovate, along with my caveats:

Day-to-Day Money Management

I was intrigued by two free sites for consumers: FlexScore and Guide Financial.

(Two other helpful new tools, Yodlee's Tandem and MoneyDesktop's Guide Me, will be offered by financial institutions to their customers. Tandem is a collaborative money-management program that could be useful for people with financial responsibilities for their adult kids and their elderly parents. Guide Me provides a snazzy visual representation of your financial goals in bubbles whose size is based on how much money they'll require.)

FlexScore, my Finovite favorite, is fun to use and free. The site calculates a personal finance score for you based on how well you're managing your money (it takes about 15 minutes for you to enter your information). Then it shows you how to raise the number, with the goal of reaching a perfect 1,000.

Lower your mortgage rate through refinancing and you might raise your FlexScore 24 points; update your life insurance and it could go up 16 points.

Your score will drop if you make a dumb money move, such as taking the money you save from refinancing and putting it all into one stock. "You'll get dinged for a lack of diversification," says Jeff Burrow, FlexScore's president and co-founder, who is also a financial adviser.

Hot High Tech Stocks To Watch Right Now

I'm going to attempt something a little odd today, Fools. Even though�Apple (NASDAQ: AAPL  ) makes up 6.2% of my real-life holdings, and I�recently considered �buying shares of Apple stock, I'm going to be giving you two reasons to consider selling shares of the company today.

Why am I doing this?

Recently, Nobel Prize winner Daniel Kahneman visited Fool headquarters in Virginia. While visiting, he talked about how a number of different biases can lead us to believe we can predict the future with relative certainty. In reality, he argued, we're just deluding ourselves.

It got me to thinking about how I don't write enough about the�risks�of owning the stocks I own. So, although I don't plan on selling my Apple stock anytime soon, I think it's healthy for me to practice and model this behavior.

Hot High Tech Stocks To Watch Right Now: NewLead Holdings Ltd.(NEWL)

NewLead Holdings Ltd. operates as an international shipping company that owns and operates product tankers and dry bulk carriers. It operates in two segments, Wet Operations and Dry Operations. The Wet Operations segment transports various refined petroleum products simultaneously in segregated coated cargo tanks that include gasoline, jet fuel, kerosene, naphtha, and gas oil. The Dry Operations segment involves in transporting and handling bulk cargoes through ownership, operation, and trading of vessels. As of August 2, 2011, the company operated a fleet of 6 double-hull product tankers and 16 dry bulk vessels. The company was formerly known as Aries Maritime Transport Limited and changed its name to NewLead Holdings Ltd. in December 2009. NewLead Holdings Ltd. was incorporated in 2005 and is based in Athens, Greece.

Advisors' Opinion:

• [By Monica Gerson]

  NewLead Holdings (NASDAQ: NEWL) shares dipped 6.56% to touch a new 52-week low of $0.08 after the company completed the acquisition of titles in the Viking Mine located in Kentucky, USA.

Hot High Tech Stocks To Watch Right Now: Biosante Pharmaceuticals Inc.(BPAX)

BioSante Pharmaceuticals, Inc., a specialty pharmaceutical company, focuses on the development of various products for female sexual health and oncology. It provides LibiGel, a transdermal testosterone gel that is in Phase III clinical development for the treatment of female sexual dysfunction; and male testosterone gel for the treatment of hypogonadism in men, which is licensed to Teva Pharmaceuticals USA, Inc. The company also offers various cancer vaccines, which are in Phase I and Phase II clinical trials for the treatment of melanoma, leukemia, pancreatic, breast, and prostate cancer; The Pill-Plus, which is in Phase II clinical trials is a combination of estrogens, progestogens, and androgens to prevent testosterone deficiency; and Elestrin, a food and drug administration approved product for the treatment of hot flashes associated with menopause. BioSante Pharmaceuticals, Inc. was founded in 1996 and is headquartered in Lincolnshire, Illinois.

Hot Gold Stocks To Watch Right Now: Hmv Group(HMV.L)

HMV Group plc operates as a specialist retailer of filmed entertainment, games, music, and portable digital technology products under the HMV and Fopp brands. It operates entertainment stores and Web sites in the United Kingdom, Ireland, Hong Kong, and Singapore. In addition, the company owns and operates live music venues and summer music festivals, as well as involves in related ticketing activities. It operates approximately 273 retail stores, 14 entertainment venues, and 6 festivals. The company was founded in 1921 and is headquartered in Maidenhead, the United Kingdom.

Hot High Tech Stocks To Watch Right Now: Dendreon Corporation(DNDN)

Dendreon Corporation, a biotechnology company, engages in the discovery, development, and commercialization of therapeutics to enhance cancer treatment options for patients. The company offers active cellular immunotherapy and small molecule product candidates to treat various cancers. Its product candidates comprise Provenge (sipuleucel-T), an active cellular immunotherapy for the treatment of metastatic, castrate-resistant prostate cancer; DN24-02, an investigational active immunotherapy for the treatment of patients with bladder, breast, ovarian, and other solid tumors expressing HER2/neu; and TRPM8, a small molecule agonist to transient receptor potential ion channel, for multiple cancers. The company also has a range of products in preclinical studies, which include Carcinoembryonic antigen for the treatment of lung, colon, and breast cancer; and Carbonic AnhydraseIX for the treatment of kidney cancer. Dendreon Corporation was founded in 1992 and is headquartered in S eattle, Washington.

Advisors' Opinion:

• [By Jon C. Ogg]

  Dendreon Corp. (NASDAQ: DNDN) is hitting 52-week lows as Deutsche Bank has downgraded the maker of Provenge to Sell from Hold. Shares are down 5% at $3.03, against a prior 52-week range of $3.10 to $7.22.

• [By Bryan Murphy]

  There's no doubt about it - the "in" thing to do with Dendreon Corporation (NASDAQ:DNDN) lately has been to bash it. The company's one and only drug, Provenge, failed to meet its sales estimates last quarter. And worse, DNDN was forced to announce 2013's top line wouldn't be as strong as first expected. Between that lowered guidance and growing fears that Provenge may not be nearly as marketable as first assumed, the stock plunged 26% on Friday, and has since widened that loss to 30%.

• [By Johanna Bennett]

  Once, one of the hottest biotech stocks around, Dendreon (DNDN) has become a cautionary tale, warning investors what can happen when a cutting-edge�drug turns into a dud.

  Now at less than $3 a share, the stock had traded as high as $54 in 2010 as excitement buzzed over the�experimental prostate cancer vaccine Provenge. Initially, Wall Street expected peak sales of $3 billion to $4 billion. But insurers balked at the�hefty price tag for Provenge, and now, three years after it�won FDA approval, analysts see annual sales at roughly $300 million.

  Disappointing sales are just one reason Deutsche Bank has joined the�bearish�voices surrounding this drug maker.�Today, analyst Robyn Karnauskas downgraded Dendreon�to a Sell and cut the�price target to $1, warning that even if the company�can significantly reduce�costs and drastically restructures, its�spending may still outpace revenue growth in the short-term. Karnauskas believes Dendreon may have to refinance its debt, negatively impacting shareholders.

  Earlier this month, the company�posted a bigger-than-expected second-quarter loss as Provenge sales fell compared to last year. A restructuring plan was�unveiled in late July, though�analysts say it isn’t enough without revenue growth.�Today, Deutsche Bank’s Karnauskas writes:�

  …By our math, even with $165M in cost cuts, the co will have to grow current sales from $300M to $525M over next 7 years to support current share price. 2Q13 sales were $73M and DTC campaign does not seem to have a lot of effect to offset impact from competition so that the company could reach profitability in 4Q13. While they note that they plan to cut costs, we are concerned it may be too late. Revenue growth is not occurring quick enough; we note 1Q13 yoy growth was guided and in 2Q13 they noted this was unlikely to occur going fwd. The co�� inability to guide growth & provide visibility makes it difficult for us to see sales a

Hot High Tech Stocks To Watch Right Now: Britannica Resources Corp (BRR.V)

Britannica Resources Corp., an exploration stage company, engages in the acquisition, exploration, and development of mineral properties in Canada. It holds interests in the Chassignol, Deltador, Bluebird, and Kino projects located in the Abitibi Gold District of Quebec. The company is based in Toronto, Canada.

Six Stocks That Could Get An October Bump From The FDA

With the stock market struggling to make headway, investors might look for event-driven trades to find equities with pending news that could lead to a price pop. One of the biggest movers of stock prices is an FDA OK. Of course, a thumbs down from the regulatory agency typically leads to a crushing.

iStock has identified four drugs/products that are up for approval in October. If any of them get the OK, shares of the underlying companies could possibly rock.

On October 3rd, next Thursday, Pfizer Inc. (PFE) and Ligand Pharmaceuticals Incorporated (LGND) expect to hear from the FDA on bazedoxifene/conjugated estrogens (BZA/CE), a potential new medicine for non-hysterectomized women for the treatment of moderate-to-severe vasomotor symptoms (VMS) and vulvar and vaginal atrophy (VVA) associated with menopause, as well as the prevention of postmenopausal osteoporosis.

The FDA has assigned a Prescription Drug User Fee Act (PDUFA) date of October 14, 2013 for Antares Pharma Inc.'s (ATRS) OTREXUP, which is a potential new product for the subcutaneous delivery of methotrexate (MTX) using Medi-Jet™ technology, has been accepted by the U.S Food and Drug Administration (FDA) indicating that the application is sufficiently complete to permit a substantive review. OTREXUP is being developed for self-administration of MTX to enhance the treatment of rheumatoid arthritis (RA), poly-articular-course juvenile RA and psoriasis.

On October 17th, pSivida Corp. (PSDV) and Alimera Sciences, Inc. (ALIM) will be waiting anxiously for word from the FDA on the resubmission of the NDA and the new PDUFA for ILUVIEN. ILUVIEN (190 micrograms fluocinolone acetonide intravitreal implant in applicator) is a sustained release intravitreal micro-insert used to treat vision impairment associated with chronic diabetic macular edema (DME) considered insufficiently responsive to available therapies. Each ILUVIEN implant provides a therapeutic effect of up to 36 months by delivering sustained sub-microgram levels o! f fluocinolone acetonide (FAc). ILUVIEN is injected in the back of the patient's eye to a position that takes advantage of the eye's natural fluid dynamics.

Finally, October 21st will be FDA-day for AMAG Pharmaceuticals, Inc.'s (AMAG) for Feraheme® (ferumoxytol) Injection for Intravenous (IV) use. The company's supplemental new drug application (sNDA) for Feraheme requests FDA approval to expand the indication for ferumoxytol beyond the current indication for the treatment of iron deficiency anemia (IDA) in adult patients with chronic kidney disease (CKD) to adult patients with IDA who have failed or could not take oral iron treatment.

Investors with the stomach for high risk for potential substantial returns might consider adding the aforementioned names to their Google calendars. If any or all of them hit the FDA jackpot, so could shareholders.

Is There a Mother Lode in These Small Cap Mining Stocks? BRZG & TRLR

Small cap mining stocks Brazil Gold Corp (OTCMKTS: BRZG) and Trulan Resources (OTCMKTS: TRLR) were either active on the charts last week (in the case of the former) or recently the subject of paid promotions (in the case of the latter). However, mining is not exactly an easy business for a small and usually undercapitalized small cap mining stock given the amount it can cost to get a mine up and running. On the other hand, they could always be sitting on the next mother lode just waiting to come out of the ground. With that in mind, here is a quick reality check about these two small cap mining stocks:

Brazil Gold Corp (OTCMKTS: BRZG) Recently Announced a New Deal

Small cap Brazil Gold Corp owns a portfolio of road accessible, grass-roots to advance stage (São Jorge) gold projects in the Tapajós region of northern Brazil. On Friday, Brazil Gold Corp fell 7.14% to $0.0013 for a market cap of 154,427 plus BRZG is down 93.5% over the past year and down 99.3% since January 2011 according to Google Finance.

What's the Catch With Brazil Gold Corp? According to various disclosures, no transactions have occurred to mention Brazil Gold Corp in various investment newsletters. At the end of July, Brazil Gold Corp announced that it had acquired 20% of FAL Minerals LLC, a gold mining and exploration company. Under the deal, Brazil Gold Corp will receive 15% of all royalty payments received by FAL Minerals in connection to a Mineral Lease Agreement for the exploration, production, ownership, possession and transportation of discovered minerals on approximately 17 acres of land in Alabama. According to the Form 8-K, the purchase price for the Interests is $100,000, payable in twelve equal installments of $8,333 commencing August 1, 2013. However, Brazil Gold Corp has reported zero revenues; a net loss $502k (most recent reported quarter), net income of $124k, a net loss of $155k and net income of $11k; and no cash to cover $708k in current liabilities at the end of last March. So right now, its hard to see how Brazil Gold Corp is going to pay for the acquisition without diluting shareholders.

Trulan Resources (OTCMKTS: TRLR) Has Posted a Project Update

Small cap Trulan Resources is a Nevada based exploration and mining development company with a focus on gold, silver and platinum group metals (PGM) projects in North and South America. On Friday, Trulan Resources closed at $0.0055 for a market cap of $3,200 plus TRLR is up 243.7% over the past year and down 98.4% over the past five years according to Google Finance.

What's the Catch With Trulan Resources? According to various disclosures, transactions of $2k, $3k and $7k have or will occur to mention Trulan Resources in various investment newsletters. Last Tuesday, Trulan Resources posted an update about its IGP Iron-Gold-Platinum Project in Chile. It was noted that Trulan Resources had acquired a 100% interest in the iron-gold-platinum project last February and will be responsible for taking it to the next stage of development (including funding all further costs from additional exploration activities, permitting, environmental impact studies, engineering, metallurgy and site development to the construction, set up and initiation of mining and processing operations). A quick look at Trulan Resources' financials reveals revenues of zero (most recently reported quarter), zero, negative $1,405k and $1,396k along with a net losses of $59k and $67k, net income $110k and a net loss of $74k. At the end of June, Trulan Resources had no cash to cover $35k in current liabilities and $213k in other liabilities; but there was a March press release about a loan agreement with a private investment group for the provision of $1,000,000 at an annual interest rate of 6% – meaning investors might want to keep an eye on the company for progress on the project.

Mid-Afternoon Market Update: Carnival Sinks on Weak Guidance; Markets Go Into The Red

Toward the end of trading Tuesday, the Dow traded down 0.32 percent to 15,351.10 while the NASDAQ fell 0.12 percent to 3,780.30. The S&P was also down, dropping 0.18 percent to 1,698.55.

Top Headline
Lennar (NYSE: LEN) reported a 39% rise in its third-quarter net profit. Lennar's quarterly net profit surged to $120.7 million, or $0.54 per share, from $87.1 million, or $0.40 per share, in the year-ago period. Its revenue rose 46% to $1.6 billion from $1.1 billion, while new orders climbed 14%. However, analysts were estimating earnings of $0.45 per share on revenue of $1.55 billion.

Equities Trading UP
Greenway Medical Technologies (NYSE: GWAY) shot up 18.91 percent to $20.37 after the company agreed to be acquired by Vista Equity Partners for $20.35 per share.

Shares of Applied Materials (NASDAQ: AMAT) got a boost, shooting up 9.31 percent to $17.48 after the company announced its plans to acquire Tokyo Electron in an all-share deal.

EZchip Semiconductor (NASDAQ: EZCH) was also up, gaining 7.16 percent to $24.11 after a Cisco (NASDAQ: CSCO) announced a new product that would not threaten the company as previously thought. Equities Trading DOWN
Shares of Cypress Semiconductor (NASDAQ: CY) were down 16.05 percent to $9.91 after the company lowered its Q3 forecast.

Red Hat (NYSE: RHT) shares tumbled 11.51 percent to $46.84 after the company reported Q2 results. Piper Jaffray downgraded the stock from Overweight to Neutral.

Carnival (NYSE: CCL) was down, falling 7.91 percent to $34.44 after the company beat on the top and bottom line for Q3, but issued some disappointing guidance.

Commodities
In commodity news, oil traded down 0.23 percent to $103.35, while gold traded down 0.29 percent to $1,323.40. Silver traded up 0.29percent Tuesday to $21.72, while copper fell 1.00 percent to $3.26.

Eurozone
European shares were higher today. The Spanish Ibex Index surged 0.64 percent, while Italy's FTSE MIB Index rose 0.85 percent. Meanwhile, the German DAX gained 0.34 percent and the French CAC 40 rose 0.56 percent while U.K. shares climbed 0.21 percent.

Economics
The ICSC-Goldman Sachs store sales index dropped 1% in the week ended Saturday versus the earlier week. The S&P/Case-Shiller home price index rose 1.8% in July from June, while the index climbed 12.4% y/y in the month.

The FHFA house price index climbed 1% in July from June, while the index surged 8.8% y/y.

The Johnson Redbook Retail Sales Index fell 0.4% in the first three weeks of September from August. The Richmond manufacturing index declined to 0.00 in September, versus a prior reading of 14.00.

However, economists were expecting a reading of 12.00. The Conference Board's consumer confidence index fell to 79.70 in September from a revised reading of 81.80 in August. Economists were expecting a reading of 79.90. The Treasury is set to auction 2-year notes.

Apple vs. Pandora: The Music-Streaming Duopoly

NEW YORK (TheStreet) -- In only the first nine months of the year, shares of Pandora (P) have already tripled.

While the Internet radio giant has done well, overcoming tough odds and growing despite stiff competition from the likes of Spotify and Sirius XM (SIRI), Pandora has not shown that it can make enough money to justify investors' faith. With Apple's (AAPL) iPhones now available with iTunes Radio, which comes at a much cheaper cost than Pandora's subscription service, Pandora's already weak margins are suddenly under more pressure. Will the stock hold? [Read: The Beginning of the End for Facebook]

With listening hours up 16% year over year and subscription revenue surging up 143%, I can't deny that Pandora is an exceptional growth story. As with Facebook (FB), Pandora is also benefiting from a dominant showing in advertising revenue, which continues to outperform Street estimates, climbing up recently by 44%.

But eventually "the music stops." Given that content acquisition costs continue to rise, including a 35% increase in the recent quarter, Pandora will have to do better than the $8 million GAAP (generally accepted accounting principles) loss the company posted in the recent quarter. Realizing that Pandora's dealing with liquidity issues in looking for ways to finance its operations, last week management announced plans to sell 18.2 million shares in an expanded stock offering at $25 per share. The offering, which is expected to close on Tuesday, is an attempt to attract advertisers away from terrestrial radio stations. Given how the offering was structured, which includes a 30-day option for underwriters JPMorgan Chase (JPM) and Morgan Stanley (MS) to purchase 2.73 million additional shares, Pandora might be able to net a total estimated sum of $393 million, given that the underwriters exercised their option on Friday. Investors cheered the news, sending shares of Pandora to its highest level in more than two years. But I wouldn't get carried away just yet. Assuming the local U.S. advertising market is a $15 billion industry, this seems like a good strategy for Pandora. Unfortunately, management has not shown that it can effectively monetize the 7.5% market it already owns of the U.S. radio audience. Plus, without knowing how Apple, which also plans to attract advertisers with iTunes Radio, will attack this market, Pandora may end up just throwing good money after bad, and diluting its own stock by as much as 9%.

I'm not saying Apple is just going to come in and kill off what Pandora has built. Worst case, I believe there's room for both to strive. As I've said, Pandora's death has been proclaimed by many companies and several music apps. It hasn't happened yet.

The problem, though, is that with iTunes Radio, which comes free on iOS 7, Apple has essentially launched a competing service that is targeted at more than 50% of Pandora's listeners.

Again, it's too early to say with any degree of certainty how viable iTunes Radio will be. But how long did it take for Microsoft's (MSFT) Internet Explorer browser, which arrived free in every version of Windows, to kill off Netscape? This is where Apple's recent commercials, which have sent subtle messages to advertisers like "more people listen to their music on the iPhone than any other phone", becomes even more brilliant.

In other words, it doesn't matter what the radio market share for Pandora or anyone else is, Apple is still the brand of choice. No other company has been able to monetize music better. [Read: Time to Buy Solar Panels?] To the extent that Pandora's new stock offering can help capture the lion's share of the radio ad market as management hopes, I can see the stock going higher. But with Apple now fully into the game, investors should prepare for slower growth performances going forward from Pandora. That's not necessarily a bad thing though -- especially if margins begin to grow. Pandora's music genome feature, which gives the company the ability to customize music, is without a doubt revolutionary to the extent that it has helped Pandora become a very "sticky" service. From what I've seen so far from iTunes Radio, I will admit I have not experienced anything yet -- other than price -- that I believe would draw a Pandora faithful away. But the company's management has to figure out how to turn that popularity into profits. At the time of publication, the author was long AAPL. Follow @saintssense This article was written by an independent contributor, separate from TheStreet's regular news coverage.

Richard Saintvilus is a co-founder of StockSaints.com where he serves as CEO and editor-in-chief. After 20 years in the IT industry, including 5 years as a high school computer teacher, Saintvilus decided his second act would be as a stock analyst - bringing logic from an investor's point of view. His goal is to remove the complicated aspect of investing and present it to readers in a way that makes sense. His background in engineering has provided him with strong analytical skills. That, along with 15 years of trading and investing, has given him the tools needed to assess equities and appraise value. Richard is a Warren Buffett disciple who bases investment decisions on the quality of a company's management, growth aspects, return on equity, and price-to-earnings ratio. His work has been featured on CNBC, Yahoo! Finance, MSN Money, Forbes, Motley Fool and numerous other outlets.

Top Insider Trades: S GM NRGM HAFC

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By Jonathan Moreland, founder of Insider Insights and author of Profit From Legal Insider Trading.

NEW YORK (TheStreet) -- It is a victory for common sense. Tracking the trading behavior of company executives, directors and large shareholders in the stocks of firms they're registered in as "insiders" has proven to be profitable, according to both academic studies and (more importantly) the experience of professional investors.

Below are lists of the top 10 mainly open-market insider purchases and sales filed at the Securities and Exchange Commission Thursday, September 12, 2013, as ranked by dollar value. Please note, however, that these are only factual lists, not buy and sell recommendations. Dollar value is only one metric to assess the importance of an insider transaction, and, frankly, often not even the most important metric that determines if an insider transaction is significant. At InsiderInsights.com, we find new investment ideas just about every day using these and more intricate insider screens to determine where we should focus our subsequent fundamental and technical analysis. And while stocks don't (or shouldn't) move up or down based on insider activity alone, insiders tend to be good indicators of when real stock-moving events like earnings surprises, corporate actions, and new products may be in the offing. So use these regular Top Insider Trades columns as the initial research tools they are meant to be, and click the links in the tables to analyze a company's or insider's full insider history. Also feel free to contact us with any questions on our proprietary insider data, and how it is best analyzed.

Gold Miners Still Trying to Dig Out NEW YORK (TheStreet) -- Gold futures and shares of gold-mining companies took a sharp turn higher Wednesday after the Federal Reserve surprised the market by announcing a continuation of bond purchases, currently at $85 billion a month. The Market Vectors Gold Miners ETF (GDX), which tracks shares of gold miners, climbed almost 9%, while the widely followed SPDR Gold ETF (GLD), which is backed by physical gold, gained more than 4.3%, its largest one-day increase since 2012. Gold's rally may be too little too late for gold miners Newmont Mining (NEM), Anglogold Ashanti (AU), Barrick Gold (ABX) and Goldcorp (GG), which are stuck in a downward trend. Wednesday's spot gold prices provided miners a reprieve to catch their collective breaths after GDX, the ETF that tracks their stocks, neared the lows of 2008. The Fed announcement, however, is unlikely to boost the price of the yellow metal high enough to give the miners a sufficient spread between production costs and the price at which they can sell gold on the open market. One significant headwind facing gold bulls and miners is a one-two punch from India, one of the world's largest consumers of gold. First, India's currency, the rupee, is trading near its weakest levels against the dollar in more than 10 years. Thursday morning it took 61.93 rupees to buy a greenback. To put that into context, when gold hit its 2011 highs, it took only about 45 rupees to purchase a buck. This means that for Indian consumers, gold is still trading near all-time highs. The second punch comes from the Indian government, with a 50% tax increase for gold jewelry imports this week, as reported by Reuters. India in part raised the tax as a domestic protection measure, but it also wants to diminish the crippling balance of trade that has sent the rupee crashing. Imported jewelry is a relatively small percentage of the overall bullion India imports, but the tax increase is part of an overall government pattern of trying to decrease gold imports. Unlike investors in spot gold, investors in gold-mining stocks are not yet ready to enjoy Wednesday's spike. Andew Su, CEO at brokerage Compass Global Markets, said on CNBC that the average cost of producing an ounce of gold has jumped to more than $1,000, up $500 from 2007. The problem facing mining companies is that production costs are rising faster than selling costs. Gold investors are able to profit while the metal spikes higher, but concerns about when the Fed will start tapering will soon become front and center in the attention of investors. Investors in stocks of gold-mining companies should consider taking profits while the excitement about higher gold prices is still in the air and before news returns of renewed activism by mine workers demanding increased wages. With production costs increasing, it's no surprise that Barrick and other miners have laid off workers as some mines no longer can operate profitably. Absent a significant move higher in the price of gold, don't expect gold miners to reverse their bearish trend. At the time of publication, Weinstein held no positions in securities mentioned. Follow @RobertWeinstein This article is commentary by an independent contributor, separate from TheStreet's regular news coverage. Robert Weinstein is an active trader focusing on the psychological importance of risk mitigation, emotion and financial behavior of market participants. Robert co-founded the investing blog StockSaints, where he writes a journal about his trading activity and experiences. In addition to TheStreet, Robert also contributes to Real Money Pro, providing real-time trading ideas for stocks, options and futures. Friday, September 20, 2013 Hot Cheap Stocks To Watch For 2014 The StressTest column appears every Thursday on Fool.com. Check back weekly, and follow�@TMFStressTest�on Twitter. Stocks are cheap. No, really. They're very,�very�cheap. If you ask the right people, you'll hear that stocks are cheap because the equity risk premium has skyrocketed. Just check out this nifty chart from the New York Federal Reserve Bank's Liberty Street Economics blog. Source: Liberty Street Economics. "Now, back up a minute," you may be saying. "What is this equity risk premium you speak of?" I'm glad you asked. The equity risk premium measures the implied additional returns that investors get for investing in stocks as opposed to putting their money in an instrument that delivers the "risk-free rate" -- often assumed to be U.S. Treasuries. If, for example, the�S&P 500's (SNPINDEX: ^GSPC  ) price-to-earnings ratio (P/E) was 15 -- and, therefore, the earnings yield was 6.7% -- and the risk-free rate was 3%, then we could say that the equity risk premium was 3.7%. (That's not the primary or only way to calculate the equity risk premium; I just used it for ease of illustration.) Hot Cheap Stocks To Watch For 2014: TranSwitch Corporation(TXCC) Transwitch Corporation designs, develops, and supplies semiconductor and intellectual property solutions for voice, data, and video communications equipment. The company provides integrated multi-core network processor system-on-a-chip (SoC) and software solutions for fixed, 3G and 4G mobile, VoIP, and multimedia infrastructures. It offers converged network infrastructure products, including infrastructure VoIP processors comprising Entropia series of processors for wire-line and wireless carrier equipment; EoS/EoPDH mappers and framers for formats and data speeds in the access portion of the network; tributary switches that enable traffic to be switched or re-arranged; and carrier Ethernet solutions consisting of Ethernet controllers and switches, as well as circuit emulation and clock recovery devices. The company also provides FTTx protocol processors, such as mustang, a system-on-chip solution for EPON optical network unit equipment; COLT processor, a system-on-chip so lution for the optical line terminator equipment; and Diplomat-ONT product, an integrated SoC solution for GPON ONU applications, as well as access VoIP processors and access controllers. In addition, it offers broadband customer premises equipment, including multi-service communications processors comprising Atlanta processor, a multi-service SoC for customer premises equipment that supports toll-quality telephone voice, fax, and routing functionality; and HDMI, displayport, HDP, and Ethernet IP cores for consumer electronics, home network equipment, and industrial and automotive applications. The company serves public network systems OEMs, WAN and LAN equipment OEMs, Internet-oriented OEMs, and communications test and performance measurement equipment OEMs, as well as government, university, and private laboratories. It sells its products through direct sales force, independent distributors, and sales representatives. The company was founded in 1988 and is headquartered in Shelton, Connecticut. Hot Cheap Stocks To Watch For 2014: S&P Smallcap 600(PH) Parker Hannifin Corporation manufactures fluid power systems, electromechanical controls, and related components worldwide. Its Industrial segment offers pneumatic and electromechanical components, and systems; filters, systems, and instruments to monitor and remove contaminants from fuel, air, oil, water, and other liquids and gases; connectors that control, transmit, and contain fluid; hydraulic components and systems for builders and users of industrial and mobile machinery and equipment; critical flow components for process instrumentation, healthcare, and ultra-high-purity applications; and static and dynamic sealing devices. This segment sells its products to original equipment manufacturers (OEMs) and their replacement markets in the manufacturing, transportation, and processing industries. The company?s Aerospace segment provides flight control systems and components, including hydraulic, electrohydraulic, electric backup hydraulic, electrohydrostatic, and electro -mechanical components for precise control of aircraft rudders, elevators, ailerons, and other aerodynamic control surfaces. It also provides electronics thermal management heat rejection systems, and single-phase and two-phase heat collection systems for radar, ISAR, and power electronics. This segment markets its products primarily to OEMs in the commercial, military, and general aviation markets, as well as to end users. Its Climate and Industrial Controls segment offers systems and components primarily for use in the mobile and stationary refrigeration, and air conditioning industry; and in fluid control applications in various industries, such as processing, fuel dispensing, beverage dispensing, and mobile emissions. This segment serves OEMs and their replacement markets. Parker-Hannifin Corporation markets its products through direct-sales employees, independent distributors, wholesalers, and sales representatives. The company was founded in 1918 and is headquartered i n Cleveland, Ohio. Advisors' Opinion: [By Charles Mizrahi, President and CEO, Hampton Investors, Inc.] Parker Hannifin (PH) generates strong revenue from its aerospace division, while its primary industrial segment is lagging. Overall, we like the company's balanced portfolio. PH had solid order rates this past year with backlog of $3.6 billion between its industrial and aerospace segments. Top Insurance Companies To Invest In 2014: Gold Reserve Inc(GRZ) Gold Reserve Inc., an exploration stage company, engages in the acquisition, exploration, and development of mining projects. The company was founded in 1956 and is based in Spokane, Washington. Hot Cheap Stocks To Watch For 2014: First Busey Corporation(BUSE) First Busey Corporation operates as the bank holding company for Busey Bank that provides various retail and commercial banking products and services to individual, corporate, institutional, and governmental customers in the United States. It accepts noninterest-bearing demand, interest-bearing transaction, savings, money market, and time deposits. The company?s loan portfolio includes commercial, agricultural, and real estate loans; individual, consumer, installment, first mortgage, and second mortgage loans; and commercial real estate, residential real estate, and consumer loans. It also provides money transfer, safe deposit, fiduciary, automated banking, and automated fund transfer services. In addition, the company provides asset management, brokerage, and fiduciary services, including financial planning, investment management, retirement planning, brokerage, and trust and estate advisory services to individuals; investment management, business succession planning, an d employee retirement plan services to businesses; and investment management, investment strategy consulting, and fiduciary services to foundations. Further, it offers pay processing solutions, such as walk-in payments processing for payments delivered by customers to retail pay agents; online bill payment solutions for payments made by customers on a billing company?s Website; customer service payments for payments accepted over the telephone; direct debit services; electronic concentration of payments delivered by the automated clearing house network; money management software and credit card networks; and lockbox remittance processing of payments delivered by mail. The company has 33 locations in Illinois, 7 locations in southwest Florida, and 1 location in Indianapolis, Indiana. First Busey Corporation was founded in 1868 and is headquartered in Champaign, Illinois. Hot Cheap Stocks To Watch For 2014: Emerson Electric Company(EMR) Emerson Electric Co. operates as a diversified manufacturing and technology company. The company engages in appliance solutions, climate technologies, industrial automation, motor technology, network power, process management, professional tools, and storage solutions businesses. Its appliance solutions business provides appliance controls, appliance motors, heating products, and white-rodgers; climate technology business provides heating, ventilation, air conditioning, and refrigeration (HVACR) solutions for residential, industrial, and commercial applications; and industrial automation business offers bearings and power transmission products, electrical power generation products, electric motors, variable speed drives and servos, electrical products, material joining solutions, fluid automation products, and wind turbine systems. The company?s motor technology business provides appliance motors, HVACR motors, DC motors, fractional horsepower motors, integral horsepower a nd larger motors, and drives; network power business provides power, precision cooling, connectivity, and embedded solutions; and process management business provides various wireless related products from self-organizing field networks to wireless asset and people tracking. Its professional tools business offers pipe working and threading equipment, pressing technology, utility locating and visual diagnostics systems, drain maintenance tools, power tools, air tools, general purpose hand tools, wet/dry vacs, job site storage equipment, truck tool boxes and equipment, and van storage equipment; and storage solutions business provides shelving and storage products for residential, commercial, and foodservice needs, as well as offers specialized carts, mobile computer workstations, and cabinet fixtures. The company was founded in 1890 and is headquartered in St. Louis, Missouri. Hot Cheap Stocks To Watch For 2014: Global Payments Inc.(GPN) Global Payments Inc. provides electronic transaction processing services for merchants, independent sales organizations (ISO), financial institutions, government agencies, and multi-national corporations located in the United States, Canada, Europe, and the Asia-Pacific region. It offers a comprehensive line of processing solutions for credit and debit cards; business-to-business purchasing cards; gift cards; and electronic check conversion and check guarantee, verification, and recovery, including electronic check services, as well as terminal management. The company also offers proprietary software products to establish revolving check cashing limits for the casinos? customers in the gaming industry. In addition, it sells, installs, and services automated teller machine and point of sale terminals; and provides card issuing services, including card management and card personalization. The company markets its products directly, as well as through ISOs, retail outlets, tra de associations, alliance bank relationships, and financial institutions. Global Payments Inc. has a joint venture with La Caixa Group to provide merchant acquiring services to merchants in Spain. Global Payments Inc. was founded in 2001 and is headquartered in Atlanta, Georgia. Thursday, September 19, 2013 Hot Warren Buffett Stocks To Own For 2014 The Motley Fool's health-care show Market Checkup focuses this week on obesity, one of America's largest health-care concerns. Recently classified as a disease, obesity leads to serious health problems, including diabetes, heart disease, and stroke. Currently 35% of adults in the U.S. are classified as obese, but more troubling, one out of three children is as well. All told, obesity adds $190 billion in medical costs to the system, but efforts to tackle this growing problem are increasing. In this video, health-care analysts David Williamson and Max Macaluso discuss the impact government-mandated changes may have on promoting a positive change on American lifestyles and whether investors in the affected companies should be concerned about these new regulations. Rising health-care costs continue to be a hotly debated topic, and even legendary investor Warren Buffett called this trend "the tapeworm that's eating at American competitiveness." To learn more about what's happening to the health-care system -- and how to potentially profit from this trend --�click here�for free, immediate access. Hot Warren Buffett Stocks To Own For 2014: Heartland Financial USA Inc. (HTLF) Heartland Financial USA, Inc., through its bank subsidiaries, provides commercial and retail banking services to businesses and individuals. Its deposit products include checking and other demand deposit, negotiable order of withdrawal, savings, money market, individual retirement, and health savings accounts, as well as certificates of deposit and other time deposits. The company�s loan products portfolio comprises commercial and industrial, agricultural, real estate mortgage, consumer, and home equity loans, as well as lines of credit. It also offers ancillary services, including trust and wealth management services, investment services, insurance services, and electronic banking services, as well as provides client access to account information through business and personal online banking, bill payment, remote deposit capture, treasury management services, VISA debit cards ,and automated teller machines. The company�s investment services include mutual funds, annuitie s, retirement products, education savings products, brokerage services, employer sponsored plans, and insurance products, including vehicle, property and casualty, and life and disability insurance. In addition, Heartland Financial, through its non-bank subsidiary, Citizens Finance Co., engages in consumer finance business. The company has a strategic alliance with LPL Financial Institution Services to operate independent securities offices at its bank subsidiaries. As of May 4, 2012, it had 61 banking locations in 42 communities in Iowa, Illinois, Wisconsin, New Mexico, Arizona, Montana, Colorado, and Minnesota; and mortgage loan production offices in California, Nevada, Texas, Wyoming, and Idaho. The company was founded in 1981 and is headquartered in Dubuque, Iowa. Hot Warren Buffett Stocks To Own For 2014: Crown Castle International Corporation (CCI) Crown Castle International Corp., through its subsidiaries, owns, operates, and leases towers and other wireless infrastructure primarily in the United States and Australia. Its infrastructure includes distributed antenna system (DAS) networks, as well as rooftop installations. The company involves in the rental of antenna space of its towers to wireless communications companies. It also provides network services relating to its towers, which primarily include antenna installations and subsequent augmentations, as well as additional services, such as site acquisition, architectural and engineering, zoning and permitting, other construction, and other services related network development. As of December 31, 2010, it owned, leased, or managed approximately 23,900 towers, including 43 completed DAS networks. The company was founded in 1994 and is headquartered in Houston, Texas. Top Dividend Stocks To Watch Right Now: Wave Systems Corp.(WAVX) Wave Systems Corp. develops, produces, and markets products for hardware-based digital security. Its products are based on the Trusted Platform Module (TPM), a hardware security chip that enables secure protection of files and other digital secrets, and performs critical security functions. The company offers EMBedded Application Security SYstem (EMBASSY) Trust Suite, a set of applications and services that are designed to bring functionality and user value to TPM enabled products. The EMBASSY Trust Suite includes the EMBASSY Security Center, Trusted Drive Manager, Document Manager, Private Information Manager, and Key Transfer Manager. It also offers middleware and tools, which include Trusted Computing Group (TCG) enabled toolkit that assists application developers in writing new applications or modifying existing ones to function on TCG-compliant platforms; and Wave TCG-Enabled Cryptographic Service Provider, which allows software developers to utilize the security of a TCG standards-based platform. In addition, the company offers EMBASSY Trust Server Applications comprising EMBASSY Key Management Server, a server application designed to provide corporate-level backup and transition of the TPM keys; EMBASSY Authentication Server that offers centralized management, provisioning, and enforcement of multifactor domain access policies; and EMBASSY Remote Administration Server, which provides centralized management and auditing of TPMs and self-encrypting drives. Further, it offers eSign Transaction Management Suite and broadband media distribution services. Wave Systems Corp. sells its products to chip original equipment manufacturers (OEMs), PC OEMs, enterprise customers, and systems integrators. The company was formerly known as Cryptologics International, Inc. and changed its name to Wave Systems Corp. in January 1993. Wave Systems Corp. was founded in 1988 and is based in Lee, Massachusetts. Hot Warren Buffett Stocks To Own For 2014: PVF Capital Corp.(PVFC) PVF Capital Corp. operates as the holding company for Park View Federal Savings Bank that provides various banking products and services in Ohio. Its deposit products include checking, money market, and regular savings accounts, as well as certificates of deposit. The company?s loan portfolio comprises commercial real estate and business loans, commercial non-real estate business loans, residential and commercial construction loans, consumer loans, land loans, and equity line of credit loans; fixed and adjustable-rate mortgage loans for the acquisition or refinancing of single-family residential homes; and permanent mortgage loans on condominiums, multi-family, and nonresidential properties. It also engages in land acquisition and real estate leasing activities. PVF Capital Corp. operates through 17 offices located in Cuyahoga, Summit, Medina, Lorain, Lake, Portage, and Geauga Counties in Ohio. The company was founded in 1920 and is headquartered in Solon, Ohio. Hot Warren Buffett Stocks To Own For 2014: NORCROS PLC ORD GBP0.10(NXR.L) Norcros plc, through its subsidiaries, engages in the design, manufacture, and sale of home consumer products in the United Kingdom, South Africa, and internationally. The company offers electric showers, mixer showers, power showers, and bathroom accessories; adhesives, grouts, surface preparation, and aftercare products for fixing ceramic and porcelain tiles, mosaics, natural stone, and marbles; and ceramic wall and floor tiles, and related products. The company engages in the retail sale of tiles and sanitaryware under Johnson, Tile Africa, and TAL brands. It operates 28 showrooms in South Africa and 1 in Namibia, as well as has 5 franchisees operating in South Africa and 1 in Mozambique. The company serves consumers, architects, designers, retailers, and wholesalers. Norcros plc is headquartered in Wilmslow, the United Kingdom. Hot Warren Buffett Stocks To Own For 2014: M B T Financial Corp(MBTF) MBT Financial Corp. operates as the holding company for Monroe Bank & Trust that provides customary retail and commercial banking, and trust services in Michigan. Its deposit products include checking and savings accounts, NOW accounts, money market deposits, certificates of deposit, non-interest bearing deposits, and individual retirement accounts. The company?s loan portfolio comprises commercial loans, personal loans, real estate mortgage loans, and installment loans. It also provides safe deposit facilities, automated teller machine and night depository facilities, treasury management services, telephone and Internet banking, personal trust, employee benefit, and investment management services. The company serves small and middle-market businesses and middle-income individuals. It operates 18 offices in Monroe County, Michigan; and 7 offices in Wayne County, Michigan. The company was founded in 1858 and is headquartered in Monroe, Michigan. Hot Warren Buffett Stocks To Own For 2014: Hot Topic Inc.(HOTT) Hot Topic, Inc., together with its subsidiaries, operates as a mall- and Web-based specialty retailer in the United States. The company operates Hot Topic and Torrid store concepts, as well as an e-space music discovery concept, ShockHound. Its Hot Topic stores sell music/pop culture-licensed merchandise, including tee shirts, hats, posters, stickers, patches, postcards, books, novelty accessories, CDs, and DVDs; and music/pop culture-influenced merchandise comprising women?s and men?s apparel and accessories, such as woven and knit tops, skirts, pants, shorts, jackets, shoes, costume jewelry, body jewelry, sunglasses, cosmetics, leather accessories, and gift items for young men and women primarily between the ages of 12 and 22. The company?s Torrid stores sells casual and dressy jeans and pants, fashion and novelty tops, sweaters, skirts, jackets, dresses, hosiery, shoes, intimate apparel, and fashion accessories for various lifestyles for plus-size females primarily betw een the ages of 15 and 29. As of July 30, 2011, it operated 636 Hot Topic stores in 50 states, Puerto Rico, and Canada; 145 Torrid stores; and Internet stores, hottopic.com and torrid.com. The company was founded in 1988 and is headquartered in City of Industry, California. Hot Warren Buffett Stocks To Own For 2014: Golden Arrow Resources Corporat (GRG.V) Golden Arrow Resources Corporation, a junior mineral exploration company, engages in advancing, identifying, and acquiring precious and base metal projects in Argentina. It has interests in approximately 40 exploration properties. The company�s projects include Potrerillos gold-silver project, Pescado gold project, and Mogote copper-gold-silver porphyry/epithermal project in San Juan Province; Chinchillas silver project located in Jujuy Province; Purulla copper-moly project in Catamarca Province; Don Bosco Copper-Gold Project, Caballos copper-gold project, and Varitas Polymetallic project in La Rioja Province; and Costa Property, Las Bayas property, and Victoria property in Chubut Province. Golden Arrow Resources Corporation is based in Vancouver, Canada. Wednesday, September 18, 2013 Volaris Raises $346 Million in No. 3 Mexico Airline’s IPO Volaris, Mexico's third-largest airline, sold at least $346 million of shares in an initial public offering at the low end of its projected range. The airline sold 28.9 million American Depositary Receipts at $12 each in New York, according to data compiled by Bloomberg. The company had said in a Sept. 16 regulatory filing that it planned to sell the ADRs at a price of $12 to $14 each. The transaction also provides an option for underwriters to increase the size of the sale by 15 percent. The Mexico City-based airline, officially known as Controladora Vuela Cia. de Aviacion SAB, planned to raise as much as $460 million including the so-called greenshoe option. Volaris, whose shares are set to start trading today, becomes the second publicly-traded airline in Mexico. The other is Grupo Aeromexico SAB (AEROMEX*), the nation's biggest carrier. A Volaris press official declined to comment on the sale. The IPO, Mexico's first since July 23, extends a record pace of stock issuance in the country this year. Not including the Volaris offering, Mexican companies had raised a record $9.93 billion in equity markets in 2013, 10 percent more than the $9.02 in stock sold in all of 2012. Grupo Financiero Banorte SAB, Mexico's third-biggest bank, raised $2.53 billion in a follow-on stock offering in July. Mexico's airlines have expanded into a void left when Cia. Mexicana de Aviacion, then No. 1 based on passenger traffic, sought protection from creditors and ceased operations in 2010. The nation's air traffic expanded 7.4 percent through July, building on last year's growth that was the fastest since 2007. Evercore Partners Interjet, Mexico's No. 2 airline, is studying a share sale for 2014 or 2015, Executive President Miguel Aleman Magnani said last month. The country's fourth-largest airline, Aeroenlaces Nacionales SA, known as VivaAerobus, has hired Barclays Plc to help prepare a possible offering, according to three people familiar with the matter. Deutsche Bank AG, Morgan Stanley and UBS AG led the Volaris share sale, the data compiled by Bloomberg showed. The company began operations in 2006 and its fleet includes Airbus SAS single-aisle A319 and A320 jets. Owners include Indigo Partners LLC, Evercore Partners Inc. and Evercore Co-Chairman Pedro Aspe, a former Mexico finance minister, according to the pre-IPO filing. Volaris has said it has some of the lowest operating expenses among publicly-traded carriers in the Americas, with costs per available seat mile, an industry benchmark, at 9.4 cents. Sales for 2012 totaled $887 million, up from $397 million in 2008 based on average exchange rates during the respective years, according to the airline. Volaris flew 23 percent of passengers in Mexico this year through July compared with 20 percent a year earlier, according to government data. Monday, September 16, 2013 Morgan Stanley Turns into Extreme Stock Market Bull This year already has been a great one for stocks. The S&P 500 Index is up almost 16% after Wednesday’s gains to 1,654 as of mid-day, and the bull market may get another boost if Morgan Stanley is correct in its assessment. Morgan Stanley’s Adam Parker was one of gloomiest strategists out there but has recently changed into a stock market bull. Now Parker sees the S&P 500 Index rising to 1,840 over the next year or so. If Parker is correct, this is a call for gains of more than 11% from Wednesday’s gains. Parker previously predicted that the S&P 500 would end 2013 around 1,600. He raised the S&P 500 earnings estimates to $105.50 from $103.00 for 2013 and up to $112.00 from $110.00 for 2014. The SPDR S&P 500 (NYSEMKT: SPY) would have an implied valuation of up to over $184.00 in 2014 versus $165.80 as of Wednesday. The thesis is a lack of credibility for the bear case. Parker thinks that multiple expansion is coming, implying that the market will be more willing to put higher earnings (or sales and EBITDA) on stocks. If the stock market is valuing the S&P 500 at 15 times earnings, the implication is that the market is willing to value it at closer to 17 times earnings. Parker pointed out high CEO confidence and low deal flows having been seen so far. Capital spending and new hiring has also been kept low. Inventories building up has also been slow. Mr. Parker believes this could change, hence the multiple expansion. Another gain is coming from debt maturities being pushed way out and companies having near-record cash on the books. Parker’s new stock market valuations are putting the S&P 500 valuation currently at 15.7 times 2013 earnings and 14.75 times 2014 earnings. Neither valuation is deemed overly expensive based on historical valuations. We have seen another even more bullish call than this. One stock market technician recently went on record with us in an interview calling for the S&P 500 Index to be entering the next secular bull market. If that prediction comes true then the S&P 500 will rise north of 2,500 in the years ahead. That prediction of a 56% market gain implies a gain to the SPDR S&P 500 (NYSEMKT: SPY) of up to $258.60 before considering the management fees and any possible tracking errors for the ETF versus a share price of $165.80 mid-Wednesday. Monday, September 9, 2013 4 Stocks Triggering Breakouts on Big Volume DELAFIELD, Wis. (Stockpickr) -- Professional traders running mutual funds and hedge funds don't just look at a stock's price moves; they also track big changes in volume activity. Often when above-average volume moves into an equity, it precedes a large spike in volatility. >>5 Stocks Setting Up to Break Out Major moves in volume can signal unusual activity, such as insider buying or selling -- or buying or selling by "superinvestors." Unusual volume can also be a major signal that hedge funds and momentum traders are piling into a stock ahead of a catalyst. These types of traders like to get in well before a large spike, so it's always a smart move to monitor unusual volume. That said, remember to combine trend and price action with unusual volume. Put them all together to help you decipher the next big trend for any stock. >>4 Red-Flag Stocks to Sell This Fall With that in mind, let's take a look at several stocks rising on unusual volume today. Compania Cervecerias Unidas Compania Cervecerias Unidas (CCU) is a diversified beverage company operating principally in Chile and Argentina. This stock closed up 6.8% to $28.50 in Friday's trading session. Friday's Volume: 654,000 Three-Month Average Volume: 147,417 Volume % Change: 351% >>5 Stocks Under $10 Set to Soar From a technical perspective, CCU ripped higher here back above its 50-day moving average at $28.03 with strong upside volume. This move is quickly pushing shares of CCU within range of triggering a near-term breakout trade. That trade will hit if CCU manages to take out its 200-day moving average at $30.20 and then once it takes out more near-term overhead resistance at $30.23 with high volume. Traders should now look for long-biased trades in CCU as long as it's trending above Friday's low of $26.75 or above its 50-day at $28.03, and then once it sustains a move or close above those breakout levels with volume that hits near or above 147,417 shares. If that breakout hits soon, then CCU will set up to re-test or possibly take out its next major overhead resistance levels at $33 to its 52-week high at $34.95. EZchip Semiconductor EZchip Semiconductor (EZCH) is engaged in the development and marketing of solutions and Internet applications to improve the connectivity and performance of corporate LAN and WAN. This stock closed up 3.4% to $29.14 in Friday's trading session. Friday's Volume: 244,000 Three-Month Average Volume: 154,722 Volume % Change: 105% >>5 Stocks Insiders Love Right Now From a technical perspective, EZCH bounced higher here right above some near-term support at $28.04 and back above both its 200-day at $28.73 and its 50-day at $29.01 with above-average volume. This stock recently formed a double bottom chart pattern at $27.77 to $28.04, after pulling back from its August high of $32.79. Shares of EZCH are now quickly moving within range of triggering a near-term breakout trade. That trade will hit if EZCH manages to take out some near-term overhead resistance at $29.55 with high volume. Traders should now look for long-biased trades in EZCH as long as it's trending above those double bottom levels at $28.04 to $27.77and then once it sustains a move or close above $29.55 with volume that hits near or above 154,722 shares. If that breakout hits soon, then EZCH will set up to re-test or possibly take out its next major overhead resistance levels at $32 to $32.79. Any high-volume move above $32.79 will then give EZCH a chance to tag its next major overhead resistance level at $35.49. Gentex Gentex (GNTX) designs, develops, manufactures and markets proprietary electro-optic products, including automatic-dimming rearview mirrors for the automotive industry and fire protection products mainly for the commercial building industry. This stock closed up 3.3% to $24.93 in Friday's trading session. Friday's Volume: 2.93 million Three-Month Average Volume: 914,017 Volume % Change: 202% >>5 Big Trades for September Bounce From a technical perspective, GNTX ripped higher here and broke out above some near-term overhead resistance at $24.68 with heavy upside volume. This stock recently formed a double bottom chart pattern $22.34 to $22.33, and following that bottom, shares of GNTX have trended back above its 50-day moving average at $23.18. Shares of GNTX are now quickly moving within range of triggering another breakout trade. That trade will hit if GNTX manages to clear some near-term overhead resistance at $25.25 and then once it takes out its 52-week high at $25.40 with high volume. Traders should now look for long-biased trades in GNTX as long as it's trending above Friday's low of $23.86 or above some more near-term support at $23.50 and then once it sustains a move or close above those breakout levels with volume that hits near or above 914,017 shares. If that breakout hits soon, then GNTX will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $27.50 to $30. Oasis Petroleum Oasis Petroleum (OAS) is an exploration and production company. This stock closed up 3.6% at $43.42 in Friday's trading session. Friday's Volume: 4.25 million Three-Month Average Volume: 1.66 million Volume % Change: 184% >>3 Big Stocks on Traders' Radars From a technical perspective, OAS jumped sharply higher here right above its 50-day moving average of $40.80 with heavy upside volume. This move is quickly pushing shares of OAS within range of triggering a near-term breakout trade. That trade will hit if OAS manages to take out Friday's intraday high of $44 and then once it clears its 52-week high at $44.17 with high volume. Traders should now look for long-biased trades in OAS as long as it's trending above support at $42 or above its 50-day at $40.80, and then once it sustains a move or close above those breakout levels with volume that this near or above 1.66 million shares. If that breakout hits soon, then OAS will set up to enter new 52-week-high territory above $44.17, which is bullish technical price action. Some possible upside targets off that move are $47 to $50. To see more stocks rising on unusual volume, check out the Stocks Rising on Unusual Volume portfolio on Stockpickr. -- Written by Roberto Pedone in Delafield, Wis. RELATED LINKS: >>3 Stocks Rising on Big Volume >>4 Tech Stocks Under $10 Moving Higher >>5 Big Short-Squeeze Stocks Ready to Pop Follow Stockpickr on Twitter and become a fan on Facebook. At the time of publication, author had no positions in stocks mentioned. Roberto Pedone, based out of Delafield, Wis., is an independent trader who focuses on technical analysis for small- and large-cap stocks, options, futures, commodities and currencies. Roberto studied international business at the Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany. His work has appeared on financial outlets including CNBC.com and Forbes.com. You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zerosum24. Can General Mills Regain Its Momentum? With shares of General Mills (NYSE:GIS) trading at around $48.33, is GIS 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 You ate Cheerios as a baby. When you were a little older, you sifted through Lucky Charms in order to make sure all the marshmallows were saved for last. It was so delicious that you had to go for a second bowl. Maybe even a third bowl! A little later in life, you ate Wheaties because it was the breakfast of champions. For sweet treats, you dreamed of Pillsbury cake or Betty Crocker brownies. Salivating yet? There are two points here. One, General Mills has many quality brands to its name. Two, many of these brands are household names. When brand recognition is that strong, future prospects are good. But this is far from the only positive. NEW! Discover a new stock idea each week for less than the cost of 1 trade. CLICK HERE for your Weekly Stock Cheat Sheets NOW! Revenue has consistently improved on an annual basis, and 2012 was especially impressive. Looking at the last quarter on a year-over-year basis, revenue increased 12.20 percent. Earnings declined 11.40 percent, but there fluctuations should be expected. What's most important is that General Mills consistently delivers profits. General Mills has increased its dividend for 10 consecutive years and buybacks are commonplace. Actually, General Mills plans on returning more cash to shareholders in the near future. In regards to company culture, it's very strong. According to Glassdoor.com, employees have rated their employer a 4.0 of 5, and 88 percent of employees would recommend the company to a friend. The leadership is even more impressive as 95 percent of employees approve of CEO Ken Powell. There has to be a substantial negative somewhere! What about analysts? Nope, you won't find many negatives there. Analysts like the stock: 12 Buy, 7 Hold, 1 Underperform. But is the stock resilient in bear markets? Yes. General Mills dropped approximately 20 percent in 2008/2009, which was nothing compared to the drops most stocks throughout the broader market. Most investors would have popped open a bottle of champagne to celebrate if their top holding dropped 20 percent at that time. Kellogg Company (NYSE:K) also dropped approximately 20 percent at the time. However, ConAgra Foods dropped approximately 40 percent. Currently, General Mills is trading at 18 times earnings whereas Kellogg is trading at 25 times earnings, and ConAgra is trading at 28 times earnings. General Mills has the most impressive margins of the three. For example, General Mills has a profit margin of 10.41 percent whereas Kellogg has a profit margin of 6.30 percent, and ConAgra has a profit margin of 3.48 percent. General Mills is a winner another area, which is yield. General Mills currently yields 3.20 percent whereas Kellogg yields 2.80 percent, and ConAgra yields 3.00 percent. General Mills recently upped its FY 2013 adjusted EPS forecast to $2.68-$2.69 from $2.66-$2.68. Growth expectation for 2014 was also maintained at the high single-digit range. Believe it or not, there are negatives for General Mills. The listed negatives have been increased competition, high commodity prices, and volume pressures due to high prices. However, looking at those a little closer, there is really only one negative that's cause for concern, which is high prices. Many public and private companies have been laying off employees in order to improve their bottom lines. This has to be done because top-line growth is suffering in many cases. In some situations, employees are asked to take a pay cut. Either way, this leads to a weaker consumer. Some consumers will opt for more generic brands that will allow them to cut their own costs. That said, General Mills customers tend to be loyal. As far as increased competition goes, General Mills has proven it can handle all threats for many decades. And when it comes to commodity prices, they're only heading in one direction, which is down. This is good news because it will cut costs for General Mills, but it's also bad news because it signifies a decline in global demand in many areas. Let's take a look at some important numbers prior to forming an opinion on this stock. T = Technicals Are Mixed General Mills has been a solid performer over the past three years, but the past month has been subpar. Sprint (S) Softbank BO 6,581,652 42,188,388 Kodak (KODK) Karfunkel George DIR 3,434,922 1 Month Year-To-Date 1 Year 3 Year GIS -3.19% 21.32% 30.54% 39.93% K -1.14% 14.64% 33.85% 27.81% CAG -2.41% 17.04% 38.73% 50.55% Looking at the last quarter on a year-over-year basis, General Mills is trading below its 50-day SMA, but still above its 200-day SMA. 50-Day SMA 49.37 200-Day SMA 45.42 NEW! Discover a new stock idea each week for less than the cost of 1 trade. CLICK HERE for your Weekly Stock Cheat Sheets NOW! E = Equity to Debt Ratio Is Normal The debt-to-equity ratio for General Mills is close to the industry average of 0.80. It’s much stronger than the debt-to-equity ratio for the peers listed below. Debt-To-Equity Cash Long-Term Debt GIS 0.95 751.20M 8.06B K 2.66 252.00M 7.56B CAG 2.07 723.80M 10.68B E = Earnings Have Been Steady Earnings dropped in 2012, but that number was still an improvement over 2009 and 2010. As far as revenue goes, it has consistently improved on an annual basis. Fiscal Year 2009 2010 2011 2012 Revenue ($) in millions 14,691 14,797 14,880 16,658 Diluted EPS ($) 1.90 2.24 2.70 2.35 Looking at the last quarter on a year-over-year basis, revenue and earnings both improved. Quarter May. 31, 2012 Aug. 31, 2012 Nov. 30, 2012 Feb. 28, 2013 Revenue ($) in millions 4,066.40 4,051 4,881.80 4,430.60 Diluted EPS ($) 0.49 0.82 0.82 0.60 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 General Mills has proven that it can grow and deliver profits during good economic times, and that it can weather any storms during bad economic times. All the while, investors collect generous dividend payments. Sunday, September 8, 2013 Is Johnson & Johnson A Buy At These Prices? With shares of Johnson & Johnson (NYSE:JNJ) trading around $84, is JNJ 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 Johnson & Johnson engages in the research and development, manufacture, and sale of various products in the healthcare field worldwide. The company operates in three segments: Consumer, Pharmaceutical, and Medical Devices and Diagnostics. The company offers a range of products used in the general care, women’'s health fields, and nutritional and anti-infective, contraceptive, gastrointestinal, oncology, pain management, and vaccines. It also offers products to treat cardiovascular disease, orthopaedic and neurological products, blood glucose monitoring and insulin delivery products, and general surgery products. Through its wide variety of healthcare products, Johnson & Johnson is able to support consumers and medical businesses around the world who continue to demand improved products. As consumers become increasingly health aware, Johnson & Johnson stands to see profits well into the future. T = Technicals on the Stock Chart are Strong Johnson & Johnson stock has been on a powerful run towards higher prices. The stock is now consolidating near all-time high prices, so it may need time before continuing on its next leg. 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, Johnson & Johnson is trading around its rising key averages, which signal neutral to bullish price action in the near-term. NEW! Discover a new stock idea each week for less than the cost of 1 trade. CLICK HERE for your Weekly Stock Cheat Sheets NOW! (Source: Thinkorswim) Taking a look at the implied volatility (red) and implied volatility skew levels of Johnson & Johnson options may help determine if investors are bullish, neutral, or bearish. Implied Volatility (IV) 30-Day IV Percentile 90-Day IV Percentile Johnson & Johnson Options 18.4% 73% 71% What does this mean? This means that investors or traders are buying a very significant amount of call and put options contracts, as compared to the last 30 and 90 trading days. Put IV Skew Call IV Skew July Options Flat Average August 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 very 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. 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 Johnson & Johnson’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for Johnson & Johnson look like and more importantly, how did the markets like these numbers? 2013 Q1 2012 Q4 2012 Q3 2012 Q2 Earnings Growth (Y-O-Y) -13.48% 1050% -8.7% -50% Revenue Growth (Y-O-Y) 8.46% 8.02% 6.54% -0.74% Earnings Reaction 2.11% -0.51% 1.38% 0.8% Johnson & Johnson has seen decreasing earnings and increasing revenue figures over the last four quarters. From these numbers, the markets have generally been happy with Johnson & Johnson’s recent earnings announcements. P = Excellent Relative Performance Versus Peers and Sector How has Johnson & Johnson stock done relative to its peers, Pfizer (NYSE:PFE), Covidien (NYSE:COV), Novartis (NYSE:NVS), and sector? Johnson & Johnson Pfizer Covidien Novartis Sector Year-to-Date Return 21.11% 15.99% 12.56% 14.94% 15.08% Johnson & Johnson has been a relative performance leader, year-to-date. NEW! Discover a new stock idea each week for less than the cost of 1 trade. CLICK HERE for your Weekly Stock Cheat Sheets NOW! Conclusion Johnson & Johnson provides valuable and essential healthcare products and services to many consumers and companies operating worldwide. The stock has been on a powerful run towards all-time high prices where it is now consolidating. Over the last four quarters, earnings have decreased while revenue figures have increased, which have kept investors pretty happy. Relative to its peers and sector, Johnson & Johnson has been a year-to-date performance leader. Look for Johnson & Johnson to OUTPERFORM. Saturday, September 7, 2013 PharMerica's Structural Tailwinds And Margin Expansion Will Drive The Stock Higher Overview and Thesis PharMerica Corporation (PMC) is a pharmacy services company that operates in several segments in the US. The company offers services to healthcare facilities, pharmacy management services and specialty infusion to patients outside of hospitals. PMC's primary customers are assisted living centers, hospitals, and other long term care facilities. The company services just under 200 locations in 45 states in the US and produces about $1.7 billion in annual revenue. With shares near the bottom of their 52 week range following a nasty selloff, is there any value in PMC or is it a classic trap? I'll argue here that PMC's structural tailwinds for earnings including demographics and consumer preference shifts will increase PMC's ability to convert revenue into profit and drive the stock higher. Earnings Model Before we look at PMC's business I think it is instructive to understand what analysts think of the company's prospects. I'll use these and other inputs I my earnings model, which you can read about here in greater detail, in order to compute a fair value for shares. My inputs and sources are as follows: 1) reported earnings, 2) earnings growth rates, 3) current book value and 4) current dividend, all from Yahoo! Finance, 5) perpetual growth rate of 3% and 6) discount rate of 9%, both of which are my numbers. ! Assum! ed long-term growth rate   2012 2013 2014 2015 2016 2017 2018 Earnings Forecast               Reported earnings per share $1.27   $1.59 $1.36 $1.50 $1.64 $1.81 x(1+Forecasted earnings growth)   25.20% -14.50% ! 10.00% 10.00% 10.00% 10.00% =Forecasted earnings per share   $1.59 $1.36 $1.50 $1.64 $1.81 $1.99                 Equity Book Value Forecasts               Equity book value at beginning of year   $15.63 $17.22 $18.58 $20.07 $21.72 $23.53 Earnings per share   $1.59 $1.36 $1.50 $1.64 $1.81 $1.99 -Dividends per share   $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 =Equity book value at end of year $15.63 $17.22 $18.58 $20.07 $21.72 $23.53 $25.52                 Abnormal earnings               Equity book value at begin of year   $15.63 $17.22 $18.58 $20.07 $21.72 $23.53 x Equity cost of capital 9.00% 9.00% 9.00% 9.00% 9.00% 9.00% 9.00%! =Normal earnings   $1.41 $1.55 $1.67 $1.81 $1.95 $2.12                 Forecasted EPS   $1.59 $1.36 $1.50 $1.64 $1.81 $1.99 -Normal earnings   $1.41 $1.55 $1.67 $1.81 $1.95 $2.12 =Abnormal earnings   $0.18 -$0.19 -$0.18 -$0.16 -$0.15 -$0.13                 Valuation               Future abnormal earnings   $0.18 -$0.19 -$0.18 -$0.16 -$0.15 -$0.13 x discount factor(0.09)   0.917 0.842 0.772 0.708 0.650 0.596 =Abnormal earnings disc to present   $0.17 -$0.16 -$0.14 -$0.11 -$0.09 -$0.08                 Abnormal earnings in year +6             -$0.13             3.00% Value of terminal year             -$2.12                 Estimated share price               Sum of discounted AE over horizon   -$0.34           +PV of terminal year AE   -$1.26           =PV of all AE   -$1.60           +Current equity book value   $15.63           =Estimated current share price   $14.03           With the stock trading at about $12.50 as of this writing my model suggests there is moderate upside at present. With the stock trading at the $14 just weeks ago it seems a fair assessment of the company's potential fair value. However, I believe there is even greater potential upside to this fair value in the future based upon some structural tailwinds and PMC's ability to execute on those tailwinds effectively. The Business PharMerica's management has made it a general policy to be geographically diversified, as you can see below. Note: the following slides are from the recent investor presentation a! t the BAM! L Health Care Conference this past May. (click to enlarge) While I like the idea of diversification for obvious reasons it also has some drawbacks. For instance, the supply chain is more stretched with such diversification and it may be more difficult for management to support each customer with them so far apart from each other. However, it seems to be working for PMC and there is no indication of it slowing down. The way the company has grown its footprint, and geographic diversity, is seen below. (click to enlarge) While I'm generally not a fan of the growth-by-acquisition strategy, PMC has made it work. The reasons I dislike this strategy are: it is expensive, it is difficult to integrate new companies into yours and it is usually the strategy of an otherwise stagnant business. As for the cost of acquiring to grow, the hundreds of millions of dollars of premiums PMC has paid to acquire its targets over their intrinsic values are still are on the balance sheet as intangible assets. This is why I'm generally not a big fan of acquisitions; the price that is necessary is often so high that it can take a decade or more for the acquirer to get a return on its investment. Of course this varies significantly by deal but the enormous amount of goodwill and intangible assets on PMC's balance sheet, good for 45% of total assets as of the end of June, would suggest that PMC is paying significant premiums for its targets. These acquisitions aren't just intangible asset events, of course, as acquirers generally require cash for payment. PMC's significant acquiring activity cannot be paid for from the operating cash of the business so it has done the logical thing and borrowed heavily to finance these transactions. The company now has $245 million of long term debt on its balance ! sheet, wh! ich represents roughly eleven years' worth of net income. This is an enormous amount of debt but PMC has shown consistently the ability to service it without significant adverse effects. Earnings Growth Drivers The most basic, and perhaps most powerful, reason I believe PMC is well-positioned for future earnings growth is the simple fact that its core customer, seniors, is going to see its demographics explode over the long term in the US. (click to enlarge) As you can see, the population of 65+ Americans is set to double over the next 45 years. Now, while I don't expect PMC will even exist in its current form in 45 years, that doesn't mean it will take that long for benefits to accrue. Even looking out five to 10 years we can see that PMC's customer base is going to experience rapid growth of three to four percent per year. This means that even if PMC doesn't execute anything properly at all for the next few years, its revenue base should still continue to grow at 3%+ per year. Assuming that it can, that is simply additional leverage to the upside on any successes PMC experiences. This is a very simple, but very powerful, earnings growth driver over the medium and longer terms for PMC. Having built-in organic growth like this is something most businesses can't even imagine having and PMC doesn't have to do anything for it. Next, PMC, along with other pharmacy businesses, has been distributing more and more generics in relation to branded pharmaceuticals in response to cost pressures and commensurate consumer preferences. While these generics offer PMC markedly lower revenue they also have much better margins. Thus, even though PMC's top line numbers are dropping I'd suggest that it should largely be taken with a grain of salt. Nobody likes declining revenue but if it comes with greater margins, investors should love it. (click to enlarge) This chart depicts the meteoric rise in gross margins for the pharmacy business at PMC over five recent quarters. As you can see, in just five quarters, the pharmacy business increased its gross margins by 460 basis points. A major driver of this, as the orange line depicts, has been the increasing rate at which generics are being filled instead of branded drugs. This has allowed PMC to drastically increase its operating leverage and profit margins, as we will see later. Since generics are a large driver of increased profitability, how likely is the trend to continue? If the slide below is to be believed, the trend is here to stay. If we look at the drugs that are coming off patent over the next five years, we see many blockbusters. Cymbalta, Celebrex, Nexium, Abilify, Crestor and others are all huge revenue drivers for their respective owners. However, as those come off of patent it will mean that, ostensibly, more people may use them due to lower cost, and when they do, PMC will be there to collect higher and higher margin rates on their generic forms. (click to enlarge) I don't think the importance of this trend can be overstated in terms of its impact on PMC's business. This chart is certainly not all-inclusive so when you couple the blockbusters that are coming off patent along with all the other medications that aren't on the list PMC has built-in margin growth going forward. It's not specific to PMC's business but it is no less important or powerful as a result. Finally, the dynamics we've touched on already, built-in revenue base growth and higher generic dispensing rates, are helping to increase operating leverage. For the most recent four quarters, PMC produced gross margins of 17.1%, 17.5%, 19.1% and 19.2%. As you can see, margins are increasing in a hurry and this is allowing PMC to pay down its sub! stantial ! debt load along with increasing profitability in general. In addition, this extra margin allows additional operating leverage to enter the model as PMC isn't having to hire additional staff or build additional facilities for this margin; since the margin tailwinds are structural PMC is producing extra profits with little incremental effort. If that doesn't get shareholders excited about the prospects of this company I'm not sure what would. The Bottom Line PharMerica is in a tough business. It operates on thin margins, as is traditional in its line of work, and shares have been punished in the past for management's transgressions in the eyes of shareholders. However, I believe PMC has a business model that will allow it to capitalize on the trends we discussed above in a big way. Management has been working to take cost out of the model through improved purchasing practices and technology improvements. Demographic trends favor PMC in a big way over the medium and long terms through the general trend of the US population aging. Expensive or not, PMC will likely continue to make acquisitions and grow market share, achieving some scale in the process and building its brand for the future. All of these things will factor into PMC's earnings capability in a positive way. In terms of a value for the shares, if we assume demographic trends contribute three to four percent growth each year, management can find 50 basis points of efficiencies each year and that gross margins continue to increase even 50 basis points per year (which is very conservative), PMC could be earning 3%+ on sales next year and perhaps closer to 4 percent in 2015 - 2017. With analysts expecting 2.7% return on sales that would equate to large earnings beats and would undoubtedly send the stock much higher. An earnings growth rate of 12% to 15%, under the scenario I've highlighted, would mean that PMC's shares are grossly underpriced at less than 10 times next year's earnings and if I'm right, the earnings multiple should ! expand to! 12 or 13, offering additional upside to the $20+ area next year and beyond. I think analysts are underestimating PMC's ability to expand margins and I believe that is where the opportunity lies. If you want for them to catch up, however, you'll miss the move. Source: PharMerica's Structural Tailwinds And Margin Expansion Will Drive The Stock Higher Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in PMC over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. (More...) 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