XY Auto Car: February 2014

Thursday, February 20, 2014

Man in Home Depot fraud gets 2Â½ years in prison

FLINT, Mich. (AP) — A Michigan man who switched price stickers on Home Depot products and then returned the items for refunds was sentenced Thursday to 2 ½ years in prison in a multi-state scheme that cost the big retailer more than $300,000.

Larry D. Fields, Chris M. Smith and others executed the scam over two years at more than 100 Home Depot stores in 13 states, according to federal agents.

Fields appeared Thursday in federal court in Flint, a few months after Smith was sentenced to 3 ½ years in prison for his role.

The fraud was simple but lucrative: They took bar code stickers off inexpensive items and placed them on goods that cost more before paying at a self-checkout register. The items later were returned to Home Depot with the original higher price code.

Refunds were put on Home Depot store cards that were peddled to others. Some items that weren't immediately returned were put in storage in the Detroit area or resold for a profit.

After his arrest last May, Smith met with Home Depot officials and "offered suggestions as to how to improve store security measures in order to prevent similar schemes from occurring in the future," Assistant U.S. Attorney Anthony Vance said in a court filing.

During one of Smith's many visits to a store, he bought lights worth $530 for just $40. He got a bath drain costing $85 for $4.20 after switching bar codes. Other products included a chain saw, hand truck, shower drains and ceiling tiles.

In Atlanta, Home Depot spokesman Stephen Holmes said the company was grateful for the work of federal agents. He declined to say whether the case has influenced how the retailer puts prices on its products.

"I wouldn't be able to discuss any of our security measures, even in general," Holmes said.

Tuesday, February 18, 2014

Royale Energy is Now in Flight (ROYL)

Does the name Royale Energy, Inc. (NASDAQ:ROYL) ring a bell? If you're a regular reader of the Small Cap Network site or newsletter, it might. Back on February 3rd, yours truly penned some bullish thoughts on the way ROYL was acting at the time. Given what we had seen up until that time, though Royale Energy had not yet begun to rally, the stock was getting within reach of a monster-sized breakout. Well, that breakout may be underway as of today.

Just as a quick refresher, ROYL is a small cap stock from the oil and gas industry. Specifically, Royale Energy, Inc. is working to develop gas wells in California, and oil wells in Alaska. There's not a lot of production now; the company has only generated about $7 million in revenue over the past four quarters, versus a market cap of $42 million. But, there's a lot of potential production on the radar, which the market is now starting to see... in spades.

How do we know that? The chart. In fact, the chart is the bullish part of the ROYL story here.

When we last looked at Royale Energy, though shares weren't above $2.79, it was pretty clear that the $2.79 mark was a major technical line in the sand. That level had been bumped six different times, and hurdled once (the February 3rd surge), yet for some reason shares couldn't stay above that level. If they could get above that line, though, look out above, because that would indicate a major paradigm shift in the way the market was thinking about ROYL... a bullish shift. Well, we finally have that shift. As of today, the stock's above $2.79. From here, the bulls are free to roam about the cabin. Take a look.

What was the prompt? Nothing, which is actually a good thing. If a small cap stock moves on news, it's usually a short-lived move, as news-based hype fades pretty quickly. When a stock moves organically though, those moves are usually built to last. Translation: Time to wade into Royale Energy, Inc.

To put things in perspective, the weekly chart shows how methodical and well-reasoned the turnaround effort has been unfurling for this small cap stock. This is a V-shaped turnaround with a lot of technical support and plenty of technical bullish cues.

Point being, we should take the reversal effort at face value.

For more trading ideas and insights like these, be sure to sign up for the free SmallCap Network newsletter. You'll get stock picks, market calls, and more, every day. Here's what you've missed recently.

These 5 Asset Managers Will Be Big Winners in 2014

Popular Posts: Tobacco Companies Could Make Cannabis Big BusinessWill Vince Be the Next Michael Kors?3 CEOs Who Don’t Get Nearly Enough Credit Recent Posts: These 5 Asset Managers Will Be Big Winners in 2014 BBY Stock Still Has Upside, Despite Last Year’s Run BBBY Stock: Time to Dump After Earnings? View All Posts

Analysts believe investors will continue to move into stocks and rotate out of bonds, meaning another good year is on tap for asset managers.

asset-managers-BLK-WETF-APAM-WHG-WDR The top five publicly traded asset managers' stocks averaged a 46% return in 2013 — about 50% better than the S&P 500′s 30% gain. But after last year’s bull run, it’s going to be tough to find investments that provide such high returns. That’s why you need to stick to the best of the best when it comes to asset managers this year.

Who will be the big winners in 2014? Here are my top five asset managers to own.

BlackRock (BLK)

asset-managers-BLK-stock With more than $8 trillion under management, BlackRock (BLK) has become a gigantic asset manager thanks to its exchange-traded fund business, which accounts for 64% of its assets under management.

Since the announcement of its acquisition of Barclays’ (BCS) investment products division in June 2009, BLK stock has achieved a total return of 94%. That’s good, but it still trailed the SPDR S&P 500 (SPY) by 18 percentage points over the same period. Its performance should be stronger given its dominance.

With the future of asset managers clearly in the hands of ETFs, iShares' formidable market share suggests that Larry Fink and company have more good years ahead. When it comes to large-cap asset managers I see BLK stock as your best bet in 2014.

Waddell & Reed (WDR)

asset-managers-WDR-stock One of the oldest mutual fund companies in the U.S., Waddell & Reed (WDR) is still growing quarterly revenues and earnings by double digits. With $114 billion in assets under management, analysts expect WDR to report Q4 earnings of 78 cents on Feb. 4 — 28% higher year-over-year.

According to Investor's Business Daily, 55% of WDR’s growth over the past 10 years has been organic growth, rather than growth-by-acquisition. When it comes to asset managers, few do it better.

Why is this important? Because WDR has been able to save the money for dividends, which have increased 80% since 2010. Currently yielding 2.1%, WDR stock pays out the exact same amount as BlackRock's in terms of yield.

Income investors should know that WDR yield has stayed above 2% in 8 out of the last 10 years, with 2007 and 2013 being the exceptions. Combined with consistent capital appreciation, WDR has outperformed BLK in four out of the past five years. With the good times expected to last at least one more year, I expect the same outcome in 2014.

WisdomTree Investments (WETF)

asset-managers-WETF-stock Anyone who follows ETFs likely knows about WETF. That's because its WisdomTree Japan Hedged Equity Fund (DXJ) gathered $9.5 billion in 2013, making it the second-most-popular fund next to the SPY. I recently gave it kudos for being one of the best funds in 2013 and although the DXJ is responsible for a considerable amount of WisdomTree's growth in 2013, there are other reasons why I think this is one of the best asset managers anywhere.

WisdomTree, the fifth-largest ETF provider in the country, is also the fastest growing amongst asset managers. With $34.5 billion in AUM, its average ETF fee of 0.51% means it's netting approximately $176 million in revenue annually, with 38% pre-tax margins.

But WETF is also growing AUM by approximately 8% per quarter. If it continues at this pace for the next couple of years, it will generate approximately $124 million in pre-tax income, considerably higher than where it's at today. Earnings per share for WETF stock would be around 80 cents, and its forward 2015 P/E is around 23, which isn't half bad for a stock that's growing EPS by more than 50% annually.

WisdomTree's future appears bright. In the December ETF Deathwatch list, only five of its ETFs appeared out of the total 61. Like all asset managers, it's not perfect, but it is the only publicly traded ETF pure-play available. So if you believe in ETFs, as I do, this is the bet to make.

Artisan Partners Asset Management (APAM)

asset-managers-APAM-stock With approximately $97 billion in assets under management, Artisan Partners Asset Management (APAM) uses a decentralized and autonomous investment style that has made it very successful among asset managers. The stock went public in March 2013 at $30 per share, so investors who still held at the end of December were sitting on unrealized gains of 117% in just 10 months. That's good in anybody's book.

So what makes APAM stock so special? Quite simply, it has built its business upon a consistent philosophy and business model — those words are taken straight from the APAM Q3 investor presentation. While it might sound like hyperbole, the performance of APAM stock suggests otherwise.

Lipper ranks 93% of its assets under management in the first quartile, and Morningstar gives at least a four-star rating to 91% of its AUM. Anyone who has money with them probably isn't looking for other asset managers to handle their money. Shareholders aren't doing half bad either.

The key to all successful asset managers is asset gathering … or as they like to call it in the business, “net client cash flows.” In the third quarter, APAM grew its inflows by $2.1 billion, an annualized organic growth rate of 9.7%., right up there with WisdomTree.

Even though APAM stock has been hitting its 10-month high in recent days, its yield is still 2.6% — 50 basis points higher than BLK, WDR and WETF. If you like asset managers that handle big chunks of institutional money while still playing the retail mutual fund game, this is the smart choice.

Westwood Holdings Group (WHG)

asset-managers-WHG-stock I first became aware of the Dallas-based asset manager Westwood Holdings Group (WHG) when I read about its founder, Susan Byrne, in an article that appeared in Fortune magazine several years ago. Her firm has been doing great things outside the bright lights of Manhattan ever since.

In the past 10 years, WHG stock has kept up with other publicly traded asset managers and then some, achieving an annualized total return of 15.4% — almost eight percentage points higher than its peers.

Westwood hit Canadian business news in April 2012 when it hired away Patricia Perez-Coutts. At the time, she was an emerging markets star manager for Toronto-based AGF Management (AGFMF), along with the rest of her team. WHG quickly set up Westwood International Advisers in Toronto with the mandate of attracting money from outside the U.S. as well as providing advice to global funds at WHG.

Its mutual fund assets under management are the smallest of three segments in the company, yet they grew by 49% year-over-year to $2.4 billion at the end of September. A key reason for that growth was securing Perez-Coutts and her team. Unfortunately, the move also has them in court, so expect legal wrangling sometime this year.

While WHG is the smallest of all five in terms of both market cap and assets under management, it definitely can hold its own when it comes to competing with other asset managers. I like its future even more so since WHG opened the international office in Toronto.

As of this writing, Will Ashworth did not own a position in any of the aforementioned securities.

Monday, February 17, 2014

Top 10 Recreation Companies To Own In Right Now

With just a quick glance at a chart of Easton Pharmaceuticals Inc. (OTCMKTS:EAPH), it may appear as if the stock was still spinning wheels, drifting listlessly between $0.005 and $0.012. The longer you look at a chart of EAPH, however, the more you have to wonder if a bullish paradigm shift is underway.

For those not familiar with the company, EAPH is a biopharma name. Its claim to fame is small but well-received library of topical treatments for everything from sexual dysfunction to stretch marks to varicose veins... creams and ointments created when the company was operating under the moniker LAM Industries. Its name was changed in 2010 to Easton Pharmaceuticals, though technically speaking, it doesn't have any actual FDA-approved, internally-administered drugs in its portfolio.... or didn't, anyway. The company is wading back into drug waters, taking the medical marijuana route.

Biotech trading veterans will know how big of a deal that could be for Easton Pharmaceuticals and EAPH shareholders. The advent of legalized marijuana - mostly for medicinal purposes, but also for recreational uses in some states - has put hemp and marijuana stocks at center stage for nearly a year now, and has been very good for those related stocks. EAPH didn't participate in most of that euphoria, as it only announced it was developing a medical marijuana product until early June, and didn't offer any real details of its plans until late August.

The timing and news are academic at this point, however. What matters most now, to us, are the bullish hints the chart is dropping... they're pointing to more upside.

Since early August when Easton Pharmaceuticals put itself back on the map by announcing it was getting into the medical marijuana race, we've seen a string of higher lows; we're also working higher highs (we've already made one higher high). At the same time, the volume the stock's been producing since the news made the company 'real' is noticeable better than the volume we were seeing before the news. Finally, Easton Pharmaceuticals is now finding support at its key long-term moving average lines like the 100-day line (gray) and the 200-day moving average line (green).

It admittedly doesn't seem like much to go on, but often, the subtle clues are the best ones. EAPH is slowly but surely on the mend. In fact, it's already mended - now it's just firming up its foundation from which it can stage an even bigger rally. It may not seem like much right now, but Easton Pharmaceuticals is setting itself up to be one of Q4's better Cinderella stories.

For more insights and ideas like this one, become a subscriber to the free SmallCap Network daily newsletter. It's chock full of stock picks, market calls, and more.

Top 10 Recreation Companies To Own In Right Now: Smith & Wesson Holding Corp (SWHC.O)

Smith & Wesson Holding Corporation (Smith & Wesson), incorporated on June 17, 1991, is a manufacturer of firearms. The Company manufactures a range of handguns, modern sporting rifles, hunting rifles, black powder firearms, handcuffs, and firearm-related products and accessories for sale to a range of customers, including gun enthusiasts, collectors, hunters, sportsmen, competitive shooters, individuals desiring home and personal protection, law enforcement and security agencies and officers, and military agencies in the United States and globally. It sell its products under the Smith & Wesson brand, the M&P brand, the Thompson/Center brand, and the Walther brand. The Company manufactures its firearm products at its facilities in Springfield, Massachusetts and Houlton, Maine. On July 26, 2012, it sold all of the assets of Smith & Wesson Security Solutions, Inc.

Firearms

During the fiscal year ended April 30, 2012 (fiscal 2012), the Company intr oduced multiple new handgun and modern sporting rifle models, and one new bolt action rifle platform. The Company's rifle introductions included the addition of the M&P15 300 Whisper to the Company's line of modern sporting rifles. As of April 30, 2012, the Company participated in three categories of the long-gun market and both core categories of the handgun market.

Handguns

The Company manufactures an variety of handgun models that include revolvers and pistols. A revolver is a handgun with a cylinder that holds the ammunition in a series of rotating chambers that are successively aligned with the barrel of the firearm during each firing cycle. There are two general types of revolvers: single-action and double-action. The Company's small-frame revolvers have been carried by law enforcement personnel and personal defense-minded citizens. The Company's revolvers are available in a variety of models and calibers, with applications in virtually all pr ofessional and personal markets.

The Company� �! s M&P15 Series of modern sporting rifles are designed to satisfy the functionality and reliability needs of global military, law enforcement, and security personnel. These rifles are also popular as sporting target rifles and are sold to consumers through the Company's sporting good distributors, retailers, and dealers. The Company has a range of product portfolio of modern sporting rifles, which includes a lower price-point, sport model, a .22 caliber model, and a fully automatic model designed for the exclusive use of military and law enforcement agencies throughout the world.

Hunting Firearms

The Company manufactures three lines of bolt-action rifles under its Thompson/Center brand consisting of several models in each line. The Company's hunting rifles are offered in 16 different calibers. Bolt-action rifles operate by the cycling of a bolt handle that allows for both the loading and unloading of rounds through a magazine fed system.

< p>During fiscal 2012, the Company introduced the Dimension bolt action rifle platform. Under the Company's Thompson/Center brand, the Company also offers seven models of American-made single shot black powder, or muzzle loader, firearms. The Company offers eight models of interchangeable, single shot firearm systems that deliver numerous gun, barrel, caliber configurations, and finishes. These systems can be configured as a center-fire rifle, rim-fire rifle, shotgun, black powder firearm, or single-shot handgun for use across the entire range of big- and small-game hunting.

Handcuffs

The Company manufactures handcuffs and restraints in the United States. The Company fabricates these products from the carbon or stainless steel.

Smith & Wesson Academy

Through the Smith & Wesson Academy, the Company offers instruction designed to meet the training needs of law enforcement and security customers worldwide. Classes are conduct ed at the Company's facility in Springfield, Massachus! etts o! r! on loca! tion around the world.

Specialty Services

The Company's services include forging, heat treating, finishing, and plating. It provides services to third-party customers.

The Company competes with Ruger,Taurus, Beretta, Glock, Heckler & Koch, Sig Sauer, Springfield Armory, Bushmaster, Rock River, Stag Arms, DPMS, Browning, Marlin, Remington, Ruger, Savage, Weatherby, CVA, Traditions, and Winchester.

Top 10 Recreation Companies To Own In Right Now: Accell Group NV (ACCG.AS)

Accell Group NV is a Netherlands-based holding company. The Company and its subsidiaries divides its business into two segments: Bicycle & Bicycle Parts, active in the design, development, production, marketing and sales of bicycles, bicycle parts and accessories; and Fitness, providing fitness equipment. It sells bicycles under the Batavus, Bremshey, Ghost, Haibike, Hercules, Koga, Lapierre, Loekie, Redline, Sparta, Staiger, Tunturi, Winora, XLC and Raleigh brands via specialist bicycle retailers as well as bicycle parts under the Juncker Bike Parts and Wiener Bike Parts brands and fitness equipment under the Bremshey Sport brand. The Company�� main markets are the Netherlands, Germany, France, and European countries. The Company has production facilities in the Netherlands, Germany, France, Hungary and Belgium. As of December 31, 2011, it operated through 21 wholly owned subsidiaries. On May 22, 2012, the Company acquired Raleigh Cycle Limited.

Best Companies To Watch For 2015: In Ovations Holdings Inc (INOH)

In Ovations Holdings Inc, formerly Marine Exploration, Inc., incorporated on June 27, 1996, is engaged in marine treasure hunting expeditions. Its operations are limited to providing funding to, and making approved capital expenditures for its joint venture partner, Hispaniola Ventures, LLC (Hispaniola). Hispaniola is engaged in the actual search for, diving to, and recovery of, the cargo and artifacts. In May 2012, the Company acquired Atmospheric Water Solutions, Inc. (AWS). The acquisition includes water making technology, inventory, and a distribution center. In January 2014, the Company announced the incorporation of of its Energy Services Company (ESCO), Electro Verde, Inc.

The Company is focused on the recovery of two vessels, named as Operation Mystery Galleon and Operation Abrojos which includes, without limitation, an operation to the Serranilla and Bajo Nuevo Banks in the Caribbean Sea. It is undergoing preliminary operations off the coast of the Dominican Republic. On December 11, 2008, Marine Exploration Inc's 128 ft operations vessel, the M/V Hispaniola, was launched for its primary missions, Operation Mystery Galleon and Operation Abrojos.

The Company competes with Odyssey Marine Exploration, Subsea Resources Ltd., Sovereign Exploration Associates International Inc. and Admiralty Holding Company.

Top 10 Recreation Companies To Own In Right Now: Accell Group NV (ACCEL)

Top 10 Recreation Companies To Own In Right Now: Smith & Wesson Holding Corp (SWHC)

Firearms

During the fiscal year ended April 30, 2012 (fiscal 2012), the Company introduced multiple new handgun and modern sporting rifle models, and one new bolt action rifle platform. The Company's rifle introductions included the addition of the M&P15 300 Whisper to the Company's line of modern sporting rifles. As of April 30, 2012, the Company participated in three categories of the long-gun market and both core categories of the handgun market.

Handguns

The Company�� M! &P15 Series of modern sporting rifles are designed to satisfy the functionality and reliability needs of global military, law enforcement, and security personnel. These rifles are also popular as sporting target rifles and are sold to consumers through the Company's sporting good distributors, retailers, and dealers. The Company has a range of product portfolio of modern sporting rifles, which includes a lower price-point, sport model, a .22 caliber model, and a fully automatic model designed for the exclusive use of military and law enforcement agencies throughout the world.

Hunting Firearms

During fiscal 2012, the Company introduced the Dimension bolt action rifle platform. Under the Company's Thompson/Center brand, the Company also offers seven models of American-made single shot black powder, or muzzle loader, firearms. The Company offers eight models of interchangeable, single shot firearm systems that deliver numerous gun, barrel, caliber configurations, and finishes. These systems can be configured as a center-fire rifle, rim-fire rifle, shotgun, black powder firearm, or single-shot handgun for use across the entire range of big- and small-game hunting.

Handcuffs

The Company manufactures handcuffs and restraints in the United States. The Company fabricates these products from the carbon or stainless steel.

Smith & Wesson Academy

Through the Smith & Wesson Academy, the Company offers instruction designed to meet the training needs of law enforcement and security customers worldwide. Classes are conducted at the Company's facility in Springfield, Massachusetts or o! n locatio! n around the world.

Specialty Services

The Company's services include forging, heat treating, finishing, and plating. It provides services to third-party customers.

Advisors' Opinion:

[By Traders Reserve]
Smith & Wesson (SWHC) has seen stock appreciation of 56% in the last year and is optimistic about the near future, raising its fiscal year 2014 revenue guidance to $615 million and earnings per share between $1.30 and $1.35.

Saturday, February 15, 2014

Top 10 Restaurant Companies For 2015

Getty Images Whether you're talking about nutrition or taste, fish is hard to resist. High in protein and nutrients, low in cholesterol and saturated fats, it lends itself to dozens of different cuisines and thousands of different dishes. And, while there are some dangers associated with factory-farmed seafood, eating farm-raised fish is hardly the culinary Russian roulette of consumer beef, pork or chicken. On the surface, fish seems like the perfect food for concerned consumers. Unfortunately, however, environmental issues lurk below the surface. The biggest problem with fish is that its public relations have, arguably, been too good. A handful of well-known species -- including salmon, tuna, sea bass, and swordfish -- have captured the public attention, and its palate. Fishing fleets sail far and wide to collect these restaurant favorites; in the process, they have often overfished many of the classics, driving prices up and breeding populations down. Many of the popular fish are predators, but things are also pretty bad on the other end of the food chain. Some less-beloved forage fish, like sardines and anchovies, are also heavily fished, either for use as high-protein animal feed, or as the base ingredient in nutritional supplements. By intensively harvesting these fish, companies diminish the bottom of the food chain, further endangering salmon, tuna, swordfish, and all the other species that are higher up the ladder. So how can you satisfy your craving for finny friends without blowing all your money or destroying the ocean? The answer is simple: Eat weird fish. The species that you've heard of, that you grew up eating, are the same ones that are currently struggling to survive. On the other hand, there are dozens that you probably haven't heard of that are much less at risk and would taste great on your plate. Several resources, notably the Monterey Bay Aquarium's Seafood Watch, offer lists of sustainable fish. Monterey Bay, in fact, even offers a smartphone app that can make it easy to scan the menu for sustainable choices. In fact, while it might be overstating to claim that your fish-eating choices can actually help the environment, there are some invasive species that are crowding out more popular choices. If you can develop a taste for swamp eel, walking catfish or rusty crawfish, you could conceivably open up a little more space for other species. In the meantime, though, here are a few of our favorite less-common fish choices:

Top 10 Restaurant Companies For 2015: Arcos Dorados Holdings Inc (ARCO.N)

Arcos Dorados Holdings Inc., incorporated on December 9, 2010, is a McDonald�� franchisee. As of December 31, 2010, the Company operated or franchised 1,755 McDonald��-branded restaurants, which represented 6.7% of McDonald�� total franchised restaurants globally. It operates McDonald��-branded restaurants under two different operating formats, Company-operated restaurants and franchised restaurants. As of December 31, 2010, of its 1,755 McDonald��-branded restaurants in the territories, 1,292 (or 74%) were Company-operated restaurants and 463 (or 26%) were franchised restaurants. It generates revenues from two sources: sales by Company-operated restaurants and revenues from franchised restaurants, which consist of rental income, which is based on the greater of a flat fee or a percentage of sales reported by franchised restaurants. As of December 31, 2010, it owned the land for 510 of its restaurants (totaling approximately 1.2 million square meters) and the buildings for all but 12 of its restaurants. It divides its operations into four geographical divisions: Brazil; the Caribbean division, consisting of Aruba, Curacao, French Guiana, Guadeloupe, Martinique, Puerto Rico and the United States Virgin Islands of St. Croix and St. Thomas; North Latin America division (NOLAD), consisting of Costa Rica, Mexico and Panama, and South Latin America division (SLAD), consisting of Argentina, Chile, Colombia, Ecuador, Peru, Uruguay and Venezuela. As of December 31, 2010, 35.1% of its restaurants were located in Brazil, 29.7% in SLAD, 27.1% in NOLAD and 8.1% in the Caribbean division. The Company conducts its business through its indirect, wholly owned subsidiary Arcos Dorados B.V.

Company-Operated and Franchised Restaurants

The Company operates its McDonald��-branded restaurants under two basic structures: Company-operated restaurants operated by the Company and franchised restaurants operated by franchisees. Under both operating alternatives the real estate location m! ! ay either be owned or leased by the Company. It owns, fully manages and operates the Company-operated restaurants and retains any operating profits generated by such restaurants, after paying operating expenses and the franchise and other fees owed to McDonald�� under the Master Franchise Agreements (MFAs). In Company-operated restaurants, it assumes the capital expenditures for the building and equipment of the restaurant and, if it owns the real estate location, for the land as well. Under its franchise arrangements, franchisees provide a portion of the capital required by initially investing in the equipment, signs, seating and decor of their restaurants, and by reinvesting in the business over time. It is required by the MFAs to own the real estate or to secure long-term leases for franchised restaurant sites. It subsequently leases or subleases the property to franchisees.

In exchange for the lease and services, franchisees pay a monthly rent to the Comp any, based on the greater of a fixed rent or a certain percentage of gross sales. In addition to this monthly rent, it collects the monthly continuing franchise fee, which generally is 5% of the United States dollar equivalent of the restaurant�� gross sales, and pays these fees to McDonald�� pursuant to the MFAs. However, if a franchisee fails to pay its monthly continuing franchise fee, it remains liable for payment in full of these fees to McDonald��. As of December 31, 2010, it was engaged in several joint ventures, which collectively owned 24 restaurants, in Argentina, Chile and Colombia.

Restaurant Categories

The Company classifies its restaurants into one of four categories: freestanding, food court, in-store and mall stores. Freestanding restaurants are the type of restaurant, which have ample indoor seating and include a drive-through area. Food court restaurants are located in malls and consist of a front counter and kitchen and do not have their own seating area. In-store restaurants are! pa! rt o! f a l! arger building and resemble freestanding restaurants, except for the lack of a drive-through area. Mall stores are located in malls like food court restaurants, but have their own seating areas. As of December 31, 2010, 808 (or 46.2%) of its restaurants were freestanding, 359 (or 20.5%) were food court, 265 (or 15.1%) were in-stores and 319 (or 18.2%) were mall stores. In addition, it has four non-traditional stores, such as food carts.

Reimaging

As of December 31, 2010, the Company had completed the reimaging of 308 of 1,569 restaurants. Many of the reimaging projects include the addition of McCafe locations to the restaurant. It has developed system-wide guidelines for the interior and exterior design of reimaged restaurants.

McCafe Locations and Dessert Centers

McCafe locations are stylish, separate areas within restaurants where customers can purchase a range of customizable beverages, including lattes, cappuccinos, mochas, hot and iced premium coffees and hot chocolate. As of December 31, 2010, there were 267 McCafe locations in the Territories, of which 12% were operated by franchisees. Argentina, with 71 locations, has McCafe locations, followed by Brazil, with 67 locations. In addition to McCafe locations, it has Dessert Centers. Dessert Centers operate from existing restaurants, but depend on them for supplies and operational support. As of December 31, 2010, there were 1,306 Dessert Centers in the Territories.

Product Offerings

The Company�� menus feature three tiers of products: affordable entry-level options, such as its Big Pleasures, Small Prices or Combo del Dia (Daily Extra Value Meal) offerings, core menu options, such as the Big Mac, Happy Meal and Quarter Pounder, and premium options, such as Big Tasty or Angus premium hamburgers and chicken sandwiches and low-calorie or low-sodium products, which are marketed through common platforms rather t han as individual items. These platforms can be base! d on the!! type of ! products, such as beef, chicken, salads or desserts, or on the type of customer targeted, such as the children�� menu.

Top 10 Restaurant Companies For 2015: Arcos Dorados Holdings Inc (ARCO)

Company-Operated and Franchised Restaurants

The Company operates its McDonald��-branded restaurants under two basic structures: Company-operated restaurants operated by the Company and franchised restaurants operated by franchisees. Under both operating alternatives the real estate location may ! either be owned or leased by the Company. It owns, fully manages and operates the Company-operated restaurants and retains any operating profits generated by such restaurants, after paying operating expenses and the franchise and other fees owed to McDonald�� under the Master Franchise Agreements (MFAs). In Company-operated restaurants, it assumes the capital expenditures for the building and equipment of the restaurant and, if it owns the real estate location, for the land as well. Under its franchise arrangements, franchisees provide a portion of the capital required by initially investing in the equipment, signs, seating and decor of their restaurants, and by reinvesting in the business over time. It is required by the MFAs to own the real estate or to secure long-term leases for franchised restaurant sites. It subsequently leases or subleases the property to franchisees.

In exchange for the lease and services, franchisees pay a monthly rent to the Company, based on the greater of a fixed rent or a certain percentage of gross sales. In addition to this monthly rent, it collects the monthly continuing franchise fee, which generally is 5% of the United States dollar equivalent of the restaurant�� gross sales, and pays these fees to McDonald�� pursuant to the MFAs. However, if a franchisee fails to pay its monthly continuing franchise fee, it remains liable for payment in full of these fees to McDonald��. As of December 31, 2010, it was engaged in several joint ventures, which collectively owned 24 restaurants, in Argentina, Chile and Colombia.

Restaurant Categories

The Company classifies its restaurants into one of four categories: freestanding, food court, in-store and mall stores. Freestanding restaurants are the type of restaurant, which have ample indoor seating and include a drive-through area. Food court restaurants are located in malls and consist of a front counter and kitchen and do not have their own seating area. In-store restaurants are part ! of a larg! er building and resemble freestanding restaurants, except for the lack of a drive-through area. Mall stores are located in malls like food court restaurants, but have their own seating areas. As of December 31, 2010, 808 (or 46.2%) of its restaurants were freestanding, 359 (or 20.5%) were food court, 265 (or 15.1%) were in-stores and 319 (or 18.2%) were mall stores. In addition, it has four non-traditional stores, such as food carts.

Reimaging

McCafe Locations and Dessert Centers

Product Offerings

The Company�� menus feature three tiers of products: affordable entry-level options, such as its Big Pleasures, Small Prices or Combo del Dia (Daily Extra Value Meal) offerings, core menu options, such as the Big Mac, Happy Meal and Quarter Pounder, and premium options, such as Big Tasty or Angus premium hamburgers and chicken sandwiches and low-calorie or low-sodium products, which are marketed through common platforms rather than as individual items. These platforms can be based on the ty! pe of pro! ducts, such as beef, chicken, salads or desserts, or on the type of customer targeted, such as the children�� menu.

Advisors' Opinion:

[By Geoffrey Seiler]
Analyst John Ivankoe took Arcos Dorados (ARCO) from neutral to overweight and increased his target from $13 to $14. It is the first time the analyst has had a positive view on the stock since it IPO'd.

Top Communications Equipment Stocks To Buy Right Now: Noodles & Co (NDLS)

Noodles & Company, incorporated on December 19, 2002, is a casual restaurant concept offering lunch and dinner. The Company offers noodle and pasta dishes, staples of many cuisines, with the goal of delivering fresh ingredients and flavors globally under one roof from Pad Thai to Mac & Cheese. The Company�� globally inspired menu includes a variety of cooked-to-order dishes, including noodles and pasta, soups, salads and sandwiches, which are served on china by its friendly team members.

As of May 28, 2013, including the 16 Company owned restaurants and one franchise restaurant opened in 2013. The Company opened 39 new company owned restaurants and six franchise restaurants. In 2012, the Company began using Your World Kitchen to describe the breadth of its offering and its customers' dining experience.

Advisors' Opinion:

[By Alex Dumortier, CFA]
Noodles & Company (NASDAQ: NDLS )
Thursday evening, on the eve of the initial public offering of fast-casual dining chain Noodles & Company, I wrote:
[By Jon C. Ogg]
Before you consider this just to be a bit of IPO pondering, take a step back and understand that some of this list membership already has�filed to come public or actually has�made it public recently. Boise Cascade Co. (NYSE: BCC), CDW Corp. (NASDAQ: CDW), Coty Inc. (NYSE: COTY), Global Brass and Copper Holdings Inc. (NYSE: BRSS), Noodles & Company (NASDAQ: NDLS), Restoration Hardware Holdings Inc. (NYSE: RH), Sprouts Farmers Market Inc. (NASDAQ: SFM) and many others are on the list and have made it to the post-IPO stage in the stock market.
[By David Zeiler]
Sprouts Farmers Market Inc. (Nasdaq: SFM), which went public Aug. 1, popped 122.8%.
Fast-casual sandwich chain Potbelly Corp. (Nasdaq: PBPB), which had its IPO Oct. 4, shot up 119%. And Noodles & Co. (Nasdaq: NDLS) soared 102% on its first day of trading June 28.
[By Michael Lewis]
Fast and furious
Upon its IPO several business days ago, Noodles & Company (NASDAQ: NDLS ) stock rocketed up as if it were NASA reincarnated. The company, around since 1995, is 343 restaurants strong, with more on the way. Unsurprisingly, Noodles & Company sells mainly noodle-based dishes, but from different corners of the earth -- customers can opt for Chinese, Italian, Thai, Indonesian, and more. (Of course, all dishes are centered toward more Americanized versions of the ethnic foods.)

Top 10 Restaurant Companies For 2015: Burger King Worldwide Inc (BKW)

Burger King Worldwide, Inc., incorporated on April 2, 2012, is a fast food hamburger restaurant, under the Burger King brand. The Company generates revenues from three sources: franchise revenues, consisting primarily of royalties based on a percentage of sales reported by franchise restaurants and fees paid by franchisees; property income from properties that it leases or subleases to franchisees, and retail sales at Company restaurants. In September 2012, it sold 41 Company-owned BURGER KING restaurants in Singapore to Rancak Selera Sdn Bhd. As of December 31, 2012, it owned or franchised a total of 12,997 restaurants in 86 countries and United States territories. In April 2013, it announced the sale of Burger King Restaurants of Canada (BKRC), including 94 Company owned BURGER KING restaurants in the Canada market to Redberry Investments Corp.

The Company operates in the FFHR category of the quick service restaurant (QSR), segment of the restaurant industry. In the United States, the QSR segment is the segment of the restaurant industry and has demonstrated steady growth over a long period of time. The Company launched four new menu platforms (salads, wraps, smoothies and desserts) and expanded its chicken, coffee and ancillary menu platforms. It has established a data driven marketing process, which is focused on driving restaurant sales and traffic, while targeting a broader consumer base with more inclusive messaging to reach women, parties with children and seniors.

United States and Canada (U.S. and Canada)

As of December 31, 2012, the Company had 7,293 franchise restaurants and 183 Company restaurants in the U.S. and Canada. During the year ended December 31, 2012, the Company refranchised 752 restaurants in the U.S. and Canada, bringing the region to 98% franchised. During the year ended December 31, 2012, it also continued to implement its Four Pillars strategy to improve comparable sales growth and franchise profitability by enhancing its Menu, Marke! ting Communications, Image, and Operations.

Europe, the Middle East and Africa (EMEA)

As of December 31, 2012, the Company had 2,989 franchise restaurants and 132 Company restaurants in EMEA. While in Germany continues with 684 restaurants as of December 31, 2012, Turkey and Russia are two of its growing markets with net openings of 78 restaurants and 47 restaurants, respectively, during the year ended December 31, 2012.

Latin America and the Caribbean (LAC)

As of December 31, 2012, the Company had 1,290 franchise and 100 Company restaurants in LAC. In 2011, the Company entered into a joint venture agreement with Vinci Partners for Brazil and granted franchise and development rights to the joint venture. The Company received a minority stake and board seats in the joint venture without deploying its own capital.

Asia Pacific (APAC)

As of December 31, 2012, the Company had 1,007 franchise and 3 Company restaurants in APAC. As of December 31, 2012,the Company had 357 restaurants in Australia. It contributed 44 Company restaurants in China. In September 2012, the Company sold 38restaurants to Rancak Selera, the Burger King franchisee in Malaysia.

The Company competes with McDonald�� Corporation, Wendy�� Company, Carl�� Jr., Jack in the Box and Sonic.

Advisors' Opinion:

[By Rich Smith]
Burger King (NYSE: BKW ) shares are soaring today after the company announced a transition plan for its management. Current CEO Bernardo Hees will be heading over to Heinz soon to run Berkshire Hathaway's newest subsidiary. In preparation for his departure, BK announced that when Hees leaves the building on July 1, chief financial officer Daniel Schwartz will move one more rung up the ladder and become BK's new CEO.

Top 10 Restaurant Companies For 2015: Fiesta Restaurant Group Inc (FRGI)

Fiesta Restaurant Group, Inc. (Fiesta Restaurant Group), incorporated on April 27, 2011, owns, operates and franchises two fast-casual restaurant brands, Pollo Tropical and Taco Cabana. The Company's Pollo Tropical restaurants offer a range of tropical and Caribbean inspired food, while the Company's Taco Cabana restaurants offers a range of fresh, authentic Mexican food. As of December 30, 2012 , the Company owned and operated a total of 251 restaurants across four states, which included 91 Pollo Tropical and 160 Taco Cabana restaurants. The Company franchises its Pollo Tropical restaurants internationally. As of December 30, 2012 , the Company had 35 franchised Pollo Tropical restaurants located in Puerto Rico, Ecuador, Honduras, Trinidad, the Bahamas, Venezuela, Costa Rica, Panama and on several college campuses in Florida. As of December 30, 2012 , the Company had eight Taco Cabana franchised restaurants located in Georgia, New Mexico and Texas.

Pollo Tropical

The Company's Pollo Tropical restaurants offer tropical and Caribbean inspired menu items, featuring grilled chicken marinated in the Company's blend of tropical fruit juices and spices. The Company's diverse menu also includes a line of TropiChops (a casserole bowl of grilled chicken, roast pork or grilled vegetables served over white, brown or yellow rice and red or black beans and topped with a range of condiments and sauces), a range of chicken sandwiches, wraps, salads, roast pork, grilled ribs and wings offered with a range of salsas, sauces and Caribbean style made from scratch side dishes, including black beans and rice, Yucatan fries and sweet plantains, as well as menu items, such as french fries, corn and salads. The Company also offers Hispanic desserts, such as flan and tres leches, and at certain locations, the Company offers a range of sangria, wine and beer.

The Company's Pollo Tropical restaurants feature signature dining areas. In additiona, the Company's Pollo Tropical restaurants ! provide its guests the option of take-out, as well as the convenience of drive-thru windows. The Company's Pollo Tropical restaurants are open for lunch, dinner and late night orders seven days per week. As of December 30, 2012, its company-owned Pollo Tropical restaurants were freestanding buildings. The Company's typical free-standing Pollo Tropical restaurant ranges from 2,800 to 3,500 square feet and provide interior seating for approximately 70 guests. As of December 30, 2012 , the Company owned and operated a total of 91 Pollo Tropical restaurants, of which 89 were located in Florida and two were located in Georgia. The Company is franchising its Pollo Tropical restaurants internationally. As of December 30, 2012, the Company had 35 franchised Pollo Tropical restaurants located in Puerto Rico, Ecuador, Honduras, Trinidad, the Bahamas, Venezuela, Costa Rica, Panama and on college campuses in Florida. The Company also has agreements for the future development of franchised Pollo Tropical restaurants in Tobago, Aruba, Curacao, Bonaire, Guatemala and India.

Taco Cabana

The Company's Taco Cabana restaurants serve Mexican food, including flame-grilled beef and chicken fajitas served on sizzling iron skillets, quesadillas, hand-rolled flautas, enchiladas, burritos, tacos, fresh-made flour tortillas, a selection of made from scratch salsas and sauces, customizable salads served in a Cabana bowl, traditional Mexican and American breakfasts and other Mexican dishes. The Company's Taco Cabana restaurants also offer a range of beverage choices, including soft drinks, frozen margaritas and beer.

The Company's Taco Cabana restaurants feature interior dining areas, as well as semi-enclosed and outdoor patio areas. In addition, the Company's Taco Cabana restaurants provide its guests the option of take-out. The Company's freestanding Taco Cabana restaurants average approximately 3,500 square feet (exclusive of the exterior dining area) and provide seating for approximatel! y 80 gues! ts, with additional outside patio seating for approximately 50 guests. As of December 30, 2012, its company-owned Taco Cabana restaurants were freestanding buildings. As of December 30, 2012, the Company owned and operated 160 Taco Cabana restaurants, of which 156 are located in Texas and four in Oklahoma.

Advisors' Opinion:

[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 Fiesta Restaurant Group (Nasdaq: FRGI ) , whose recent revenue and earnings are plotted below.
[By Roberto Pedone]
Fiesta Restaurant Group (FRGI) owns, operates and franchises fast-casual restaurants under the Pollo Tropical and Taco Cabana brand names. This stock closed up 10.5% to $34.73 in Friday's trading session.

Friday's Volume: 552,000

Three-Month Average Volume: 220,525

Volume % Change: 140%

From a technical perspective, FRGI ripped sharply higher here right off some near-term support at $30.89 and back above its 50-day moving average of $34.23 with strong upside volume. This move pushed shares of FRGI into breakout territory, since the stock took out some near-term overhead resistance at $33.14. Shares of FRGI are now starting to move within range of triggering another key breakout trade. That trade will hit if FRGI manages to take out some near-term overhead resistance at $35.73 with high volume.

Traders should now look for long-biased trades in FRGI as long as it's trending above its 50-day at $34.23 or above $33 and then once it sustains a move or close above $35.75 with volume that hits near or above 220,525 shares. If that breakout hits soon, then FRGI will set up to re-test or possibly take out its all-time high at $38.84. Any high-volume move above that level will then give FRGI a chance to trend north of $40.
[By WWW.GURUFOCUS.COM]
Fiesta Restaurant Group (FRGI) was the Fund's best performing position in the fourth quarter and for all of 2013. Over the past year the stock g ained over 240 percent and added 212 basis points of return. The fast-food chain has con tinued to restructure after spinning off Burger King restaurants and is now successfully ach ieving organic growth. We continue to believe the stock is undervalued and expect further growth ahead.

Top 10 Restaurant Companies For 2015: Darden Restaurants Inc (DDN)

Darden Restaurants, Inc., incorporated on March 30, 1995, is a company owned and operated full service restaurant company. As of May 26, 2013, the Company operated through subsidiaries 2,138 restaurants in the United States and Canada. In the United States, it operated 2,105 restaurants in all 50 states, including 822 Olive Garden, 678 Red Lobster, 430 LongHorn Steakhouse, 49 The Capital Grille, 44 Yard House, 33 Bahama Breeze, 31 Seasons 52, nine Eddie V's Prime Seafood, six test synergy restaurants (which house both a Red Lobster and Olive Garden restaurant in the same building) and three Wildfish Seafood Grille restaurants. As of May 26, 2013, it operated 33 restaurants, including 27 Red Lobster and six Olive Garden restaurants in Canada.

Through subsidiaries, the Company owns and operates all of its restaurants in the United States and Canada, except for three restaurants located in Florida and three restaurants in California, which are owned jointly by the Company and third parties, and managed by the Company, and five franchised restaurants in Puerto Rico. As of May 26, 2013, it also had 37 restaurants operated by independent third parties pursuant to area development and franchise agreements, including 23 Red Lobster restaurants in Japan, five LongHorn Steakhouse restaurants in Puerto Rico, four Red Lobster restaurants and two Olive Garden restaurants in the Middle East region (a Red Lobster in Dubai, a Red Lobster in Qatar, a Red Lobster and an Olive Garden in Kuwait, a Red Lobster and an Olive Garden in Abu Dhabi), and two Olive Garden restaurants and one The Capital Grille restaurant in Mexico City.

Olive Garden

Olive Garden is a full service dining Italian restaurant operator in the United States. Olive Garden�� menu includes a variety of authentic Italian foods featuring fresh ingredients and a wine list that includes a selection of wines imported from Italy. The menu includes flatbreads and other appetizers; soups, salad and garlic breadsticks; bak! ed pastas; sauteed specialties with chicken, seafood and fresh vegetables; grilled meats, and a variety of desserts. Olive Garden also uses coffee imported from Italy for its espresso and cappuccino.

Red Lobster

Red Lobster is a full service dining seafood specialty restaurant operator in the United States. It offers a menu featuring fresh fish, shrimp, crab, lobster, scallops and other seafood in a casual atmosphere. The menu includes a variety of specialty seafood and non-seafood entrees, appetizers and desserts. Red Lobster maintains different lunch and dinner menus and different menus across its trade areas.

LongHorn Steakhouse

LongHorn Steakhouse restaurants are full-service establishments serving both lunch and dinner. With locations in 38 states, primarily in the Eastern half of the United States, LongHorn Steakhouse restaurants feature a range of menu items, including signature fresh steaks and chicken, as well as salmon, shrimp, ribs, pork chops, burgers and prime rib.

The Capital Grille

The Capital Grille has locations in metropolitan cities in the United States. The Capital Grille offers seafood flown in daily and culinary specials created by its chefs. The restaurants feature a wine list offering over 350 selections, personalized service, and private dining rooms.

Bahama Breeze

Bahama Breeze restaurants bring guests the feeling of a Caribbean escape, offering the food, drinks and atmosphere found in the islands. The menu features fresh seafood, chicken and steaks, as well as signature specialty drinks.

Seasons 52

Seasons 52 is a grill and wine bar with menus offering a dining experience that celebrates living well. It offers an international wine list of more than 90 wines, with approximately 60 available by the glass. Its private dining rooms create the ideal environment for many social and business events, the Chef's Table provides a setting for chef-hosted cust! omizable ! food and wine pairing events, while the piano bar, featuring live music every night.

Eddie V's

Eddie V's opened in 2000 with an emphasis on prime seafood creations, USDA prime beef and chops, and fresh oyster bar selections. The ambiance is sophisticated and contemporary, with live nightly music in the V-Lounge.

Synergy Restaurants

Synergy restaurant houses both a Red Lobster and Olive Garden restaurant in the same building, but with separate front doors, dining rooms and brand-specific menus. It opened a second synergy test location during the fiscal year ended May 26, 2013.

Top 10 Restaurant Companies For 2015: Noodles & Co (NDLS.O)

Top 10 Restaurant Companies For 2015: Darden Restaurants Inc (DRI)

Darden Restaurants, Inc. (Darden), incorporated in March 1995, is a company owned and full-service restaurant company. As of May 27, 2012, the Company operated through subsidiaries 1,994 restaurants in the United States and Canada. In the United States, it operated 1,961 restaurants in all 50 states, including 677 Red Lobster, 786 Olive Garden, 386 LongHorn Steakhouse, 46 The Capital Grille, 30 Bahama Breeze, 23 Seasons 52, eight Eddie V's Prime Seafood and three Wildfish Seafood Grille restaurants, and two test synergy restaurants, which house both a Red Lobster and Olive Garden restaurant in the same building. In Canada, the Company operated 33 restaurants, including 27 Red Lobster and six Olive Garden restaurants. Through subsidiaries, it owns and operates all of its restaurants in the United States and Canada, except for three restaurants located in Central Florida that is owned by joint ventures it manages. On November 14, 2011, it acquired eight Eddie V's Prime Seafood restaurants and three Wildfish Seafood Grille restaurants.

As of May 27, 2012, the Company had 28 restaurants outside the United States and Canada operated by independent third parties pursuant to area development and franchise agreements, including five LongHorn Steakhouse restaurants in Puerto Rico, 22 Red Lobster restaurants in Japan, and one Red Lobster restaurant in Dubai. During fiscal year ended May 27, 2012, it opened 89 net new restaurants in the United States and Canada.

Red Lobster

Red Lobster is a full-service dining seafood specialty restaurant operator in the United States. It offers a menu featuring fresh fish, shrimp, crab, lobster, scallops and other seafood. The menu includes a variety of specialty seafood and non-seafood entrees, appetizers and desserts. Red Lobster maintains different lunch and dinner menus and different menus across its trade areas.

Olive Garden

Olive Garden is a full service dining Italian restaurant operator in the United Stat! es. Olive Garden�� menu includes a range of authentic Italian foods featuring fresh ingredients and a wine list that includes a selection of wines imported from Italy. The menu includes flatbreads and other appetizers, soups, salad and garlic bread sticks, baked pastas, sauted specialties with chicken, seafood and fresh vegetables, grilled meats, and a variety of desserts. Olive Garden also uses coffee imported from Italy for its espresso and cappuccino.

LongHorn Steakhouse

LongHorn Steakhouse restaurants are full-service establishments serving both lunch and dinner. With locations in 35 states, primarily in the Eastern half of the United States, LongHorn Steakhouse restaurants feature a range of menu items, including signature fresh steaks, as well as salmon, shrimp, chicken, ribs, pork chops, burgers and prime rib.

The Capital Grille

Bahama Breeze

Bahama Breeze restaurants bring guests the feeling of a Caribbean escape, offering the food, drinks and atmosphere found in the islands. The menu features Caribbean-inspired seafood, chicken and steaks, as well as signature specialty drinks. During fiscal 2012, it opened four Bahama Breeze restaurant.

Seasons 52

Seasons 52 is a grill and wine bar with seasonally inspired menus offering ingredients to meals that are lower in calories than comparable restaurant meals. It offers a wine list of more than 90 wines with approximately 60 available by the glass. As of May 27, 2012, there were 23 Seasons 52 restaurants in the United States.

Synergy restaurant

Synergy restaurant houses both a Red Lobster and Olive Garden restaurant in the same building, but ! with sepa! rate front doors, dining rooms and brand-specific menus. It opened a second synergy test location during fiscal 2012.

Advisors' Opinion:

[By Dan Caplinger]
The bigger potential impact on employees could come from employers that take more dramatic steps to avoid providing insurance at all. Darden Restaurants (NYSE: DRI ) is one of many restaurant chains that has looked at increasing the number of part-time employees they hire to avoid the 30-hour-a-week threshold that triggers Obamacare insurance requirements. Theater operator Regal Entertainment (NYSE: RGC ) reduced hours for many of its hourly employees back in April, citing the need to comply with the health-care law. Yet convenience-store operator Cumberland Gulf Group has said it plans to convert 1,500 of its employees to full-time status and provide health-insurance benefits in an attempt to attract higher-quality workers.
[By Kate Gibson]
Darden Restaurants Inc. (DRI) shares jumped 7.4%. The Wall Street Journal, citing people familiar with the matter, reported hedge fund Barington Capital LP had taken a 2.8% stake in the owner of the Olive Garden and Red Lobster restaurants, and was pushing for Darden to split in two.
[By WWW.DAILYFINANCE.COM]
Alan Diaz/AP NEW YORK -- The struggling parent company of Olive Garden and Red Lobster reported a sharply lower quarterly profit Friday and said that its president and chief operating officer will retire. Darden Restaurants (DRI) said Drew Madsen, 57, will be succeeded by the president of its specialty restaurant group, Gene Lee. The appointment is effective immediately. The company's specialty restaurant group, which includes chains such as The Capital Grille and Bahama Breeze, has performed better than the company's flagship chains. At Olive Garden, the company's biggest chain, sales fell 4 percent at restaurants open at least a year in the latest quarter. The figure fell 5.2 percent at Red Lobster. The declines came despite the company's ongoing efforts to revitalize menus and advertising to better reflect changing eating habits. In the specialty restaurant group, sales edged up 0.5 percent at restaurants open at least a year. The metric is a key gauge because it strips out the impact of newly opened and closed locations. To cut spending by about $50 million a year, the company is also reducing its workforce by between 80 to 85 positions, as well as making program cuts. A representative said the personnel cuts won't be at the restaurant level. For the three months ended Aug. 25, the company said it earned $70.2 million, or 53 cents a share. That's compared with $110.8 million, or 85 cents a share, in the year-ago period. Analysts expected a profit of 70 cents a share. Sales rose to $2.16 billion, helped by the opening of new locations. That was short of the $2.19 billion Wall Street expected, according to FactSet. Darden, based in Orlando, Fla., said Madsen will work with Lee and Darden's other executives on the transition until he retires. Madsen joined the company in 1998 as executive vice president of marketing for Olive Garden. He became COO in December 2004. Lee joined Darden in 2007. Kim Lopdrup will take over leadership of the company's speci

Wednesday, February 12, 2014

China's red hot phone market is cooling

HONG KONG (CNNMoney) After years of blockbuster growth, the world's biggest smartphone market is cooling.

Smartphone makers shipped 90.8 million units in China in the final three months of 2013, a 4% decline over the previous quarter, according to IDC.

It was the first quarterly decline since early 2011, and a sign that handset makers may have to look beyond the world's most populous country for growth.

The fall is even more remarkable as the quarter before Lunar New Year is usually strong as Chinese celebrate the holiday by picking up the latest models.

Chinese producers Xiaomi and Huawei performed well in the quarter, as did Apple. The worst of the decline was spread evenly among the rest of the pack.

"Companies have been looking at China like this big black hole that consumed all the phones you threw at it," said Melissa Chau, a senior research manager at IDC. "But that's not the case anymore."

The slowdown was helped along by a couple of factors. Suppliers held back phones as they waited for China's high-speed 4G network to come online. That happened in January, and should make for a rebound in the first quarter of this year.

And shipments could get another boost as Apple (AAPL, Fortune 500) is now selling phones through China Mobile, the world's largest carrier with almost 800 million subscribers.

Related story: 5 ways to fix the Samsung Galaxy S

But short term hiccups aside, Chau said the decline coincides with lower expectations for the Chinese market. There won't be a dramatic fall in shipments, but growth will trend lower.

"This burning pace of doubling and tripling market growth is what we're expecting to slow down," she said. "We forget it's not going to last indefinitely."

A personal trainer on your smartphone

Slower growth in China presents manufacturers with a major problem, mainly because there is no obvious way to replace those sales. Chau said that other emerging markets like India, Indonesia and Vietnam are a lot smaller.

"They are not going to immediately take up all the slack," she said.

Related story: Why Lenovo was hot for Motorola

The trend might drive consolidation in the industry as companies turn to acquisitions to pick up market share.

Already this year Lenovo (LNVGF) has plunked down $2.9 billion to buy Motorola Mobility from Google (GOOG, Fortune 500). That purchase will help Lenovo challenge Apple and Samsung.

Chau expects more deals to follow.

"It's the next phase," she said. "We are going to be hitting consolidation. It's who can get the best margins on the largest scale and the best distribution."

Monday, February 10, 2014

Confused about credit? Get answers here

Hey, Millennials, ever wondered what a credit score means and why it matters? Or how your significant other's finances could affect your future together? What about protecting yourself from fraud? And do we really need to worry about retirement in our twenties?

As part of a six-week partnership with the National Foundation for Credit Counseling, you'll have the opportunity to ask Certified Consumer Credit Counselors and Educators everything you've ever wanted to know about credit. USA TODAY will host weekly Twitter chats every Wednesday 3:00-3:30 p.m. ET, starting Feb. 12, with a dedicated credit counselor participating in each chat. The topics will be:

• Feb. 12: Basics of credit: What does having good credit mean and why should I care? With Jana Castanon of Apprisen, tweeting from @Apprisen.

• Feb. 19: Becoming a homeowner: How to prepare for buying your first house. With John Berry of Money Management International, tweeting from @MoneyManagement.

• Feb. 26: Finance in your relationship: How to handle debt and credit with your significant other. With Soneyet Muhammad of Clarifi, tweeting from @WeClarifi.

• March 5: Buying a car: How to negotiate and know whether you're getting a good deal. With David Flores of GreenPath Debt Solutions, tweeting from @greenpathdebt.

• March 12: Protecting yourself: Everything you need to know about giving your personal information away, identity theft, how to detect fraud and what to do about it. With Jonathan Gedeon of ClearPoint Credit Counseling Solutions, tweeting from @KnowYourMoneyUS.

• March 19: Retirement planning: What you should be doing in your twenties to prepare for your sixties and beyond. With Sheri Stuart of Springboard Nonprofit Consumer Credit Management Inc., tweeting from @CreditDotOrg.

You can submit questions ahead of time by e-mailing reporter Hadley Malcolm at hmalcolm@usatoday.com or connecting with her on Twitter at @hadleypdxdc. If you'd like your question to remain anonymous, pleas! e say so in your e-mail. We encourage you to log into Twitter at 3 p.m., each Wednesday to follow the chats live by using the #millennialmoney hashtag. You'll be able to ask questions directly to Hadley and the counselors during that time, and we will pull in the chats on this page.

Sunday, February 9, 2014

What Do Value Investing and the Giant Bamboo Have in Common?

There’s a type of bamboo that has an uncommon growth pattern – the Giant Timber bamboo.

If you water this bamboo in the first year, nothing happens. If you water it the second year, nothing happens. If you you water it in the third year nothing again happens. However, if you water it in the forth year, it will grow 90 feet in six weeks.

Value investing is similar to this bamboo tree in that it doesn’t constantly provide immediate gratification. Even if you keep working hard for years without having to worry about visible results, keep on keeping on because you're building solid as well as resistant roots which will pay off in the long term.

Many of you know that Walter Schloss smashed the market over a 47-year period. What people don’t know, however, is the fact that there was a 10-year period where he underpreformed the market. From 1989 to 1998, the S&P index crushed Schloss.

Stop and reflect on that. Can you identify one investor, friend or family member that would realistically stick with the same strategy that for 10 years lost to the market? How would you stay with a money manager if he underpreformed that many years in a row?

I know of some investors who would switch their own strategies if they underpreformed for six months, let alone 10 years.

However, not Schloss. He keep watering his bamboo, drought after drought. He stayed strong, he persisted and shazam! Not only did he have four astounding years that followed that decade of anguish, but those four years erased the losses from the previous 10 years combined!

No matter whether it's life, football or value investing, you have to keep watering the bamboo – eventually it will grow for you.

"Value investing works becau! se sometimes it doesn’t." – Joel Greenblatt

About the author:

Jonathan Webb

I am a private investor who happens to enjoy sports, movies, and art.

Visit Jonathan Webb's Website

Currently 5.00/512345

Rating: 5.0/5 (3 votes)

Subscribe via Email RSS Feeds

Subscribe RSS Comments Please leave your comment:
More GuruFocus Links

Latest Guru Picks	Value Strategies
Warren Buffett Portfolio	Ben Graham Net-Net
Real Time Picks	Buffett-Munger Screener
Aggregated Portfolio	Undervalued Predictable
ETFs, Options	Low P/S Companies
Insider Trends	10-Year Financials
52-Week Lows	Interactive Charts
Model Portfolios	DCF Calculator
RSS Feed	Monthly Newsletters
The All-In-One Screener	Portfolio Tracking Tool

Friday, February 7, 2014

Will Capstone Turbine Corporation Turn a Profit This Quarter?

Capstone Turbine (NASDAQ: CPST ) will release its quarterly report on Monday, and investors have been increasingly optimistic about the microturbine maker's immediate prospects. Yet, even though the company's stock rose recently to its best levels in almost three years, Capstone still has to demonstrate that its niche offerings give it a viable market that is too insignificant for larger rivals General Electric (NYSE: GE ) and Caterpillar (NYSE: CAT ) to go after.

Long-time Capstone Turbine shareholders have suffered more than their fair share of disappointments, as the stock has never come close to recovering from its 99% plunge between early 2000 and 2002. Lately, though, Capstone has managed to attract substantial orders that have led to dramatic revenue gains, with sales having quadrupled in the past five years. The question for Capstone, though, is whether it can start seeing enough of those revenues fall to the bottom line for the company to start posting profits. Let's take an early look at what's been happening with Capstone Turbine during the past quarter, and what we're likely to see in its report.

Source: Capstone Turbine.

Stats on Capstone Turbine

Analyst EPS Estimate	($0.01)
Year-Ago EPS	($0.01)
Revenue Estimate	$40.33 million
Change From Year-Ago Revenue	21%
Earnings Beats in Past 4 Quarters	1

Source: Yahoo! Finance.

Can Capstone earnings make it to breakeven this quarter?
In recent months, analysts have held their views on Capstone earnings steady, with expectations of a $0.05-per-share loss for the full fiscal 2014 and a $0.01-per-share profit in 2015. The stock has done well, jumping 24% since early November.

Capstone's most recent quarterly report showed just how much progress the microturbine maker has made recently. Revenue soared 17% from the year-ago quarter and by an even more substantial 45% sequentially compared to the previous quarter. Capstone's losses narrowed to just $0.01 per share. With a 6% jump in backlogs to almost $150 million, Capstone is in much better shape from a sales standpoint than at any other point in its history.

The biggest appeal of Capstone's systems is that they can provide power even in remote locations. For instance, in December, the company said it had sold several microturbines to customers on offshore oil and gas platforms, demonstrating the utility of having readily available electricity sources far from any established grid-based power. Those orders only add to Capstone's penetration of the energy industry, with many companies using Capstone products to get power to remote shale plays off the grid. Recent international orders from Russia and elsewhere also represent a small part of the global potential Capstone has.

Yet, Capstone has a couple of threats. One is that if microturbine solutions become popular enough, General Electric and Caterpillar might well start modifying their larger-scale high-efficiency power-generation offerings toward the smaller-customer market. The other could come from the solar industry. With the rise in residential and small-commercial solar installations thanks to the success of SolarCity (NASDAQ: SCTY ) and SunPower (NASDAQ: SPWR ) in providing easy financing, demand for Capstone's microturbines could come under pressure as solar costs continue to decline.

In the Capstone earnings report, watch to see whether the company is able to keep its gross margins moving higher. With enough sales, Capstone could well reach profitability in the next year, marking an important milestone as it tries to overcome more than a decade of disappointment for loyal long-term shareholders.

Can Capstone keep profiting from the energy boom?
Record oil and natural gas production has been great news for Capstone, but it's important to find the right plays to maximize your profits from the energy boom. For this reason, the Motley Fool is offering a comprehensive look at three energy companies set to soar during this transformation in the energy industry. To find out which three companies are spreading their wings, check out the special free report, "3 Stocks for the American Energy Bonanza." Don't miss out on this timely opportunity; click here to access your report -- it's absolutely free.

Click here to add Capstone Turbine to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.

Thursday, February 6, 2014

5 Ways to Invest Like a Pension Fund

BALTIMORE (Stockpickr) -- Do you have an employer-sponsored pension account paying for your retirement? Chances are that the answer is "no." Pensions have gone the way of the dodo in recent years, as U.S. employers looked to cut costs by cutting retirement benefits.

>>5 Rocket Stocks to Buy in February

Indeed, only a small minority of jobs -- such as airline employees and state and Federal workers -- still offer pensions as part of the perks. And as we've seen in recent years, those pensions can go under the knife if an airline or automaker goes belly up.

But even if you don't have a pension, pension funds could help to fund your retirement. And you don't risk getting your nest egg smashed if the plan sponsor goes belly up.

How? Despite the decline of the pension plan, the ones that remain still manage a huge amount of money. Today, pensions big enough to report to the SEC managed almost $400 billion of combined cash. That's a big number, especially when you consider that it's made up of fewer than 40 individual pension funds.

>>Where's the S&P Headed From Here? Higher!

With those kinds of cash concentrations, pension funds employ talented investment teams with serious institutional investing resources. And by taking a look at the investments pensions are piling up for their own retirees, we can take advantage of some of that research muscle for ourselves. To do that, we've got to crack some 13F filings.

Institutional investors with more than $100 million in assets are required to file a 13F, a form that breaks down their stock positions for public consumption. From hedge funds to mutual funds to insurance companies, any professional investors who manage more than that $100 million watermark are required to file a 13F. That includes pension funds.

By comparing one quarter's filing to another, we can see how any single manager is moving their portfolio around -- and which investments are faring the best for them. More important, we can figure out which names pension fund investors are buying as a group.

>>5 Stocks Set to Soar on Bullish Earnings

Today, we'll focus on pension funds' five favorite stocks for the most recent quarter.

Actavis

$32 billion pharmaceutical name Actavis (ACT) is first up on the list. Actavis has undergone some significant changes in the last year, after a combination with Watson Pharmaceuticals and the acquisition of Warner Chilcott, both of which dramatically increase the firm's scale.

>>4 Big Stocks on Traders' Radars

Pension funds like what they see. They picked up 768,780 shares of the stock, essentially doubling their stake in Actavis.

While patent expirations have been a major black cloud for most pharmaceutical firms, they've actually been a positive thing for Actavis. The firm's positioning as the third-largest generic drug maker in the world means that it benefits when lucrative drugs lose patent protection. The Watson deal also gave ACT considerable exposure to attractive emerging markets, such that international sales now make up around 40% of generic drug revenues.

Actavis isn't relegated to generics, however. The Warner Chilcott acquisition expands the branded drug business considerably, and it gives the firm claim to bigger margins. The decision to make the Warner Chilcott deal stock-for-stock also means that ACT is left with a better-looking balance sheet than if it used debt to finance the deal. As investors start to squirm under the pressure of a broad market correction in 2014, that balanace sheet strength should come in handy.

Walt Disney

The last year has brought strong returns for shareholders in Walt Disney (DIS). Shares of DIS have rallied almost 32% in the trailing 12 months, nearly doubling the performance of the S&P 500 over that same period. Pension funds have gotten in on the act too; they added 191,420 shares of Disney to retirees' portfolios in the most recent quarter.

>>3 Huge Stocks to Trade (or Not)

Disney may be best known for Mickey Mouse and Donald Duck, but it earns more than half of its operating profits from TV networks such as The Disney Channel and ESPN. ESPN, in particular, is a cash cow for Disney -- it's the most valuable cable network in the world, and it generates around three-quarters of the segment's revenues.

That said, the firm's legacy businesses are no slouch either. While films tend to drive lumpy revenues, the intellectual property they create throws off a mountain of cross-selling opportunities that benefit the greater Disney organization, from theme parks to lunch boxes.

With an intellectual property portfolio that includes some of the most valuable characters in film and TV, Disney is well-positioned to take advantage of upticks in consumer spending in 2014. That extends to theme parks, a unit of Disney that got hit the hardest during the recession and then took the longest to recover.

With consumers buying again, Disney should extend its rally this year.

Facebook

Pension fund managers "friended" Facebook (FB) in a big way last quarter, adding 1.11 million shares of the social network to their portfolios. That's proved to be some good timing: The $159 billion firm has climbed almost 30% higher in the last three months thanks to key improvements in its mobile advertising business. So does it still make sense to own in 2014?

>>3 Tech Stocks Under $10 to Watch

Facebook owns one of the most valuable properties on the Internet; users spend more time on Facebook that on any other Web site today. Better, the firm has access to deep-reaching information about its members, information that can be leveraged to serve highly targeted advertising to a demographic that's more challenging than ever to sell to.

But the fact remains that users don't log onto Facebook in order to find business opportunities or buy scented candles -- they log on to connect with their friends. Until Facebook can bridge that gap, it deserves to trade at a discount to online ad rivals like Google (GOOG), which have much more direct sales funnel.

The leaps and bounds made in mobile last quarter do provide a glimmer of hope for Facebook's shareholders. Mobile devices are undeniably the most important medium for logging onto social networks today, so the fact that FB is engaging mobile users is promising. So is the lofty valuation put on rival Twitter (TWTR).

Facebook is worth owning right now, if only for the fact that it's been one of the few names that's avoided the last month's correction.

Boeing

Boeing (BA) has had a stellar year in large part because its customers are having stellar years. The airline industry has been on fire for the last 12 months, gaining steam as it comes off of a cyclical low. That, coupled with a critical product launch in Boeing's new 787 Dreamliner platform, has spurred a 63% rally in shares in the last year. Pension funds picked up 131,810 shares of Boeing in the last quarter.

>>5 Stocks Ready to Break Out

Boeing operates in a duopoly with Airbus, manufacturing large commercial airliners for major air carriers across the globe. With oil prices sitting on the high end of their historic range, Boeing's introduction of next-gen more efficient aircraft creates a relatively simple cost-benefit analysis for operators. That's particularly true of the re-engined 737, which combines a proven, familiar airframe with dramatically more efficient power plants.

While Boeing jets are most familiar to consumers, more than 40% of sales come from a less familiar sector: national defense. With a number of large, long-term, defense-critical contracts under its belt, Boeing provides all of the benefits of a typical defense contractor without the crises every time Congress drops the ball on the budget. Boeing's $440 billion backlog does a good job of tamping out earnings concerns -- and shares remain momentum winners as we get deeper into 2014.

Hain Celestial Group

Mid-cap organic foods and personal care product maker Hain Celestial Group (HAIN) is another name that's had some stiff tailwinds pushing at its back in the last year. Since February 2013, HAIN has rallied more than 57%. Pension funds add 477,170 shares to their portfolios in the last quarter, adding up to a total investment of $51 million at current price levels.

>>3 Stocks Rising on Unusual Volume

Hain's portfolio of brands includes Arrowhead Mills, Celestial Seasonings, Soy Dream and Terra -- names that have gone from obscure to grocery store staples in recent years. Consumers have been spending more on organic products for the last decade, and as shoppers allocate more of their budgets to health, Hain should continue to see double-digit growth rates. Even though selling prices are higher than conventional foods, higher-than-average input costs typically offset the margin gains -- but because HAIN owns a large collection of organic brands, it's able to keep distribution costs lower. As the firm invests in its distribution network, margins should have room for improvement.

International sales are another important growth opportunity for Hain. Today, around 28% of the firm's sales come from overseas, but that number should increase thanks to investments in European organic foods brands. This stock is far from cheap right now, but the valuation premium looks justified by HAIN's growth pace.

Upside has been orderly in HAIN for the last few months. I'd recommend waiting for shares to find support before jumping into this name.

To see these stocks in action, check out the Q4 2013 Pension Fund Buys portfolio on Stockpickr.  

-- Written by Jonas Elmerraji in Baltimore.