Bank of America Fighting to Keep Dividend Hike After $4 Billion Blunder

Bank of America Corp. (BAC) Chief Executive Officer Brian T. Moynihan won permission last month for the firm's first dividend increase since the financial crisis. Now he's under pressure to salvage the payout after the company mistakenly inflated capital levels by about $4 billion.

One leading option: scrapping a $4 billion share repurchase, said a person briefed on the deliberations. That could allow the Charlotte, North Carolina-based bank to resubmit its request to boost the quarterly dividend to 5 cents, said the person, asking not to be identified because the process is confidential.

Moynihan, 54, has a month to draw up plans that will win Federal Reserve approval after the regulator asked the bank to freeze buybacks and dividend increases. The boost approved in March was heralded as a symbolic victory for Moynihan and the bank, which has had a token penny-a-share payout since 2009.

“This is a step backwards for them, it raises credibility issues for management,” said Jonathan Finger, whose family-owned investment firm, Finger Interests Ltd., owns 900,000 shares of the lender and stands to lose about $144,000 in annual income if Moynihan fails to increase the dividend. “Shareholders have suffered a significant period with no dividends, so some respite from that would be welcomed.”

Bank of America, the nation’s second-largest bank, views the dividend as linked to the company’s ability to generate regular earnings, which was unaffected by the mistake, said the person. The firm isn’t yet certain what payout it will request and may refine the proposal until the due date, the person said.

Outside Review

The predicament arose after the bank found an error in how it valued structured notes inherited in its 2009 acquisition of Merrill Lynch. The Fed responded by asking the firm to resubmit parts of its stress-test capital plan, which is designed to prove that a bank is strong enough to survive an economic shock. Bank of America disclosed the situation yesterday, saying it was hiring an outside firm to review its processes before the resubmission.

The bank’s estimate of Tier 1 capital under coming rules fell to $130.1 billion from $134.2 billion because of the error, the firm said yesterday in a regulatory filing.

The resubmission probably will face closer Fed scrutiny and a higher risk of rejection, said Erik Gordon, a professor at the Ross School of Business at the University of Michigan in Ann Arbor.

Lower Payouts

The bank’s blunder doesn’t necessarily mean the Fed will reject a revised capital plan on qualitative grounds, as the regulator did with Citigroup Inc.’s proposal, said another person with knowledge of the process. Examiners can’t check all the data provided by banks, the person said.

The Fed regards the incident as bolstering the case for the stress tests because the discovery was handled swiftly, said Barbara Hagenbaugh, a spokeswoman for the central bank. Before the stress tests, finding and fixing the error probably would have been a drawn-out process, she said.

The bank said the revised proposal probably will include lower payouts than the earlier plan, which was already modified once to win Fed approval during the stress tests. At stake are $1.68 billion in annual dividend payments for a company that earned more than $10 billion last year. Before the financial crisis, stockholders were getting quarterly payments of 64 cents a share.

Bank of America shares swung to a loss for this year by tumbling 6.3 percent yesterday to $14.95, the biggest drop since November 2012. They were little changed today at 9:35 a.m. in New York.

Raising Doubts

The slide was overdone in light of the firm’s capital levels, wrote Betsy Graseck, a bank analyst at Morgan Stanley. Bank of America probably will forgo buybacks while keeping the dividend increase in the resubmission, Graseck predicted. Mike Mayo, who covers banks at CLSA Ltd., said the mistake raises doubt about controls and reiterated his sell recommendation.

Bank of America discovered the mistake late last week while preparing a quarterly regulatory report and immediately notified the Fed, said a person with direct knowledge of the process. The error had gone undetected since the firm’s acquisition of Merrill Lynch, said the person.

The bank, in its calculation of regulatory capital, erroneously included a credit for structured notes that had matured, said the person. The company had about $30 billion in the securities at the end of 2013, the person said.

Banks create structured notes by packaging debt with derivatives to offer customized bets to retail investors while earning fees and raising money. Derivatives are contracts with values derived from stocks, bonds, commodities and currencies, or events such as changes in interest rates or the weather.

Citigroup’s Rejection

Even after correcting the mistake, Bank of America has a 9% common equity Tier 1 capital ratio as of March 31, beyond the 8.5% required by 2019 under the latest international rules set by the Basel Committee on Banking Supervision.

The firm, led by Moynihan since 2010, has worked for years to resolve headaches inherited with his predecessor’s decision to buy Merrill Lynch and mortgage-lender Countrywide Financial Corp. during the financial crisis. The company reported a $276 million deficit for the three months ended March 31, its fourth quarterly loss under Moynihan.

Terry Laughlin, Bank of America’s former chief risk officer who last week was named president of strategic initiatives, will help manage the resubmission, according to one of the people. Laughlin will establish the scope of what must be resubmitted and work with Chief Financial Officer Bruce Thompson and Geoffrey Greener, Laughlin’s successor as risk officer.

The Fed rejected Citigroup’s plan last month by faulting the quality of the New York-based firm’s processes. Citigroup, the nation’s third-largest bank, also was seeking its first dividend increase since the crisis as well as a stock buyback.

 

Stocks close mostly higher as Dow, S&P 500 rise

Stocks closed mostly higher Monday in a rocky session as the tech sector cut earlier losses but continued to lag.

The Dow Jones industrial average rose 87.28 points, or 0.5%, to 16,448.74 and the Standard & Poor's 500 index gained 6.03 points, or 0.3%, to 1,869.43. The Nasdaq composite index, which lagged behind for much of the day, pared earlier losses and closed 1.16 points lower, or 0.04% to 4,074.40.

In a potential blockbuster pharmaceutical deal, shares of AstraZeneca soared 12.2% to $77.01 after Pfizer renewed its push to buy the British drug company for $100 billion. Pfizer rose 4.2% to $32.04.

Bank stocks took a hit as Bank of America fell 6.3% to $14.95 after the company said it would suspend its stock buyback program and dividend increase. The bank discovered an error in how it calculates its capital ratio, a crucial measure of its strength. The Federal Reserve asked the bank to put its buyback and dividend increase on hold until the error was fixed.

Other banks also fell: Shares of Goldman Sachs dropped 1.1% to $156.54; Citigroup fell 0.9% to $47.30 and JPMorgan Chase declined 0.4% to $54.49.

Bond prices fell. The yield on the 10-year Treasury note rose to 2.70%, up from 2.67% Friday.

Tech stocks continued to struggle after Friday's deep losses. On Friday, the Nasdaq composite was pounded, ending down 1.75%, while the Dow Jones industrial average lost 0.85% — a 140-point drop — and the Standard & Poor's 500 shed 0.8%.

"The froth is finally burning off in some of these sectors like technology," said Quincy Krosby, a market strategist at Prudential Financial. "Investors want to rely more on fundamentals, and it's hard to justify some of these valuations."

PENDING HOME SALES: Contracts rise for first time since June

FRIDAY: Dow closes down 140 on Ukraine tension

Escalating tensions between Ukraine and Russia combined with some disappointing corporate earnings for last week's unhappy ending. President Obama promised furth! er sanctions against Russia during a press conference in the Philippines, Monday. The economic uncertainty such sanctions carry is unlikely to ease investors' concerns regarding the tumult in Eastern Europe.

"The Ukrainian tensions are once again mounting and the word coming from Capitol Hill and also Europe is that sanctions on Russian officials will be harder, more direct and onerous on President Putin's inner circle; this will disrupt normal trading conditions," Melbourne, Australia-based, IG market strategist Evan Lucas wrote.

Such concerns helped drive down Asian markets, Monday. Japan's Nikkei 225 index lost 141.03 points, or 1%, to 14,288.23. Hong Kong's Hang Seng index dropped 91 points, or 0.4%, to 22,132.53 and the Shanghai composite index fell 33.03 points, or 1.6%, to 22,132.53.

But European benchmarks closed higher. Britain's FTSE 100 climbed 0.2% to 6,700.16, Germany's DAX finished up 0.5% to 9,446.36 and France's CAC-40 gained 0.4% to 4,460.53.

Contributing: The Associated Press.

Will Verizon Continue This Bull Run?

With shares of Verizon (NYSE:VZ) trading around $51, is VZ 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

Verizon is a provider of communications, information and entertainment products and services to consumers, businesses and governmental agencies. It operates in two primary segments: Verizon Wireless and Wireline. Verizon Wireless' communications products and services include wireless voice and data services and equipment sales, which are provided to consumer, business and government customers across the United States. Wireline's communications products and services include voice, Internet access, broadband video and data, Internet protocol network services, network access, long distance and other services. As consumers and companies strive to communicate at increasing rates, Verizon stands to see a rising profits as a main provider. Look for rising communications, information, and entertainment to drive profits for Verizon.

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T = Technicals on the Stock Chart are Strong

Verizon stock has been on an explosive run in recent years. In fact, the stock has saw a strong breakout just last year and looks to be getting ready to test previous all-time high prices. 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, Verizon is trading above its rising key averages which signal neutral to bullish price action in the near-term.

(Source: Thinkorswim)

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

	Implied Volatility (IV)	30-Day IV Percentile	90-Day IV Percentile
Verizon Options	16.53%	10%	9%

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

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

As of today, there is an average demand from call buyers or sellers and low demand by put buyers or high demand by put sellers, all neutral to bullish over the next two months. To summarize, investors are buying a small 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 Verizon’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for Verizon 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)	15.25%	-107.21%	14.29%	12.28%
Revenue Growth (Y-O-Y)	4.17%	5.66%	3.92%	3.69%
Earnings Reaction	2.76%	0.58%	2.37%	-2.94%

Verizon has seen increasing earnings and revenue figures over most of the last four quarters. From these figures, the markets have been pleased with Verizon’s recent earnings announcements.

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!

P = Average Relative Performance Versus Peers and Sector

How has Verizon stock done relative to its peers, AT&T (NYSE:T), Sprint Nextel (NYSE:S), T-Mobile (NASDAQ:TMUS), and sector?

	Verizon	AT&T	Sprint Nextel	T-Mobile	Sector
Year-to-Date Return	19.92%	8.99%	29.28%	25.42%	14.21%

Verizon has been an average performer, year-to-date.

Conclusion

Verizon provides essential communications products and services to a growing audience across the nation and around the world. The stock has recently broken above a multi-year range and may be getting ready to test previous all-time high prices. Over the last four quarters, earnings and revenue figures have increased with has kept investors pleased. Relative to its peers and sector, Verizon has been an average performer, year-to-date. Look for Verizon to OUTPERFORM.

Hot Sliver Companies To Buy For 2015

Amid signs that many technology and biotech stocks may have peaked ��the Nasdaq fell 3 percent last week ��markets will look to this coming Friday�� U.S. March employment report for support.

The rout in tech and biotech stocks last week has some investors worried that a bubble has indeed burst.

Candy Crush game company King Digital Entertainment saw its stock fall 20 percent in its first three days of trading, and Facebook fell 11 percent after it said it would buy virtual reality gaming company Oculus VR for $2 billion.

Other stocks to suffer significant falls last week included Twitter, Pandora Media Pandora Media, Yelp Yelp, BlackBerry and Netflix.

On Friday alone, Gilead Science fell about 4 percent and Biogen Idec fell 5 percent.

Chad Morganlander, a fund manager at Stifel Nicolaus & Co, told Bloomberg News that a ��hift from the high fliers of 2013 to more value-based investments,��was underway.

Friday�� jobs report could, however, provide a boost for markets. Most analysts are predicting that U.S. employers added up to 200,000 new jobs in March.

Hot Sliver Companies To Buy For 2015: Asta Funding Inc.(ASFI)

Asta Funding, Inc., together with its subsidiaries, engages in purchasing, managing, and servicing distressed consumer receivables in the United States. Its principal portfolio includes charged-off receivables consisting of accounts that have been written-off by the originators and might have been previously serviced by collection agencies; semi-performing receivables, including accounts where the debtor is currently making partial or irregular monthly payments, but the accounts might have been written-off by the originators; performing receivables comprising accounts where the debtor is making regular monthly payments that might or might not have been delinquent in the past; and distressed consumer receivables, such as the unpaid debts of individuals to banks, finance companies, and other credit and service providers. The company?s distressed consumer receivables consist of MasterCard, Visa, and other credit card accounts, which were charged-off by the issuers or provide rs for non-payment. Asta Funding, Inc. was founded in 1994 and is based in Englewood Cliffs, New Jersey.

Advisors' Opinion:

• [By Tim Melvin]

  There a lot of moving parts to Asta Funding (ASFI), but there appears to be a great deal of value that isn�� reflected in the current stock price. ASFI stock is trading at less than 65% of book value, but several of its debt collection assets are carried at zero cost basis and yet may have substantial value. The balance sheet is strong with more than $90 million in cash. ASFI has been moving into other businesses including disability claims to increase its growth opportunities over the next few years. It�� a fairly complex business, but it is very cheap — and the first sign of good news could send the shares a lot higher.

• [By John Udovich]

  Small cap debt collection stocks like�Asta Funding, Inc (NASDAQ: ASFI), Encore Capital Group, Inc (NASDAQ: ECPG) and Portfolio Recovery Associates, Inc (NASDAQ: PRAA) could be the latest target of a government shakedown or crackdown as the Consumer Financial Protection Bureau said this week that�before it formally proposes any rules for debt collection, it wants to hear how collectors verify borrowers' information and communicate with consumers. In other words, debt collectors could be restricted from using text messages, social media or other Internet-based tools in their pursuit to collect debts. With about one in 10 Americans coming out of the financial crisis with some debt in collection, investing in small cap�debt collection stocks has been profitable for investors. However, there is no timeline for when any new rules might be released for review or come into effect.

Hot Sliver Companies To Buy For 2015: Integrys Energy Group(TEG)

Integrys Energy Group, Inc., through its subsidiaries, operates as a regulated electric and natural gas utility company in the United States and Canada. It provides natural gas utility services in Chicago, Wisconsin, Michigan, and Minnesota. As of December 31, 2009, the company served approximately 1,669,000 residential, commercial and industrial, transportation, and other customers. It had approximately 22,000 miles of natural gas distribution mains; and approximately 1,010 miles of natural gas transmission mains. The company also generates and distributes electric energy form coal, natural gas, fuel oil, hydroelectric, and wind resources in Wisconsin and Michigan. It served approximately 489,000 residential, commercial and industrial, wholesale, and other customers. In addition, Integrys Energy offers nonregulated energy supply and services; and electric transmission services. The company was formerly known as WPS Resources Corporation and changed its name to Integrys En ergy Group, Inc. in February 2007. Integrys Energy Group, Inc. was founded in 1883 and is based in Chicago, Illinois.

Advisors' Opinion:

• [By Justin Loiseau]

  Subsidiary switch-up
  AGL Resources�announced Thursday that it has officially handed off subsidiary Compass Energy Services to Integrys Energy (NYSE: TEG  ) for an initial cash consideration of $12 million, with an additional $3 million to $8 million cash consideration. If the unregulated natural gas subsidiary fares well over the next five years, Integrys will fork over more finances for its purchase. If not, AGL could be left with $15 million total for the sale. For now, AGL will record a $9 million to $11 million pre-tax gain for Q2 2013.

• [By Justin Loiseau]

  Getting more from gas
  Integrys Energy's (NYSE: TEG  ) Michigan Gas Utilities subsidiary has filed a request for a 6% increase in natural gas rates beginning in 2014. The company has recently hit a rough spot because of falling sales, pricey upgrade costs, more expensive customer service functions, and inflation.

• [By Justin Loiseau]

  In the same week that TECO is applying for its foray into New Mexico natural gas, Illinois is solidifying its own reliance on the fuel source. Integrys (NYSE: TEG  ) released a statement this week commending Illinois politicians for their "swift signing" of the Natural Gas Consumer, Safety, & Reliability Act.

Top 5 Beverage Companies To Invest In Right Now: EPAM Systems Inc (EPAM)

EPAM Systems, Inc. (EPAM), incorporated on December 18, 2002, is a global information technology (IT) services provider focused on software product development services, software engineering and vertically-oriented custom development solutions. EPAM has been serving independent software vendors (ISVs), and technology companies. These companies produce advanced software and technology products that demand software engineering talent, tools, methodologies and infrastructure to deliver solutions. Its service offerings cover the full software development lifecycle from complex software development services through maintenance and support, custom application development, application testing, enterprise application platforms and infrastructure management. Its key service offerings include software product development services, custom application development services, application testing services, enterprise application platforms, application maintenance and support and infrastructure management services. In December 2012, the Company acquired Empathy Lab.

Software Product Development Services

EPAM provides a set of software product development services, including product research, design and prototyping, product development, component design and integration, full lifecycle software testing, product deployment and end-user customization, performance tuning, product support and maintenance, as well as porting and cross-platform migration. The Company focuses on development services for enterprise software products covering a range of business applications, as well as product development for multiple mobile platforms and embedded software product services.

Custom Application Development Services

EPAM offers custom application development services. The Company�� range of services includes business and technical requirements analysis, solution architecture creation and validation, development, component design and integration, quality assurance and testing, d! eployment, performance tuning, support and maintenance, legacy applications re-engineering/refactoring, porting and cross-platform migration and documentation.

Application Testing Services

The Company�� application testing services include software application testing, including test automation tools and frameworks, and testing for enterprise IT, including test management, automation, functional and non-functional testing, as well as defect management. It also includes and consulting services focused on helping clients improve their existing software testing and quality assurance practices.

Enterprise Application Platforms

As a provider of software product development services to ISVs, EPAM has developed industry standard technology and business application platforms and their components in such areas as customer relationship management and sales automation, enterprise resource planning, enterprise content management, business intelligence, e-commerce, mobile, Software-as-a-Service and cloud deployment. The Company offers services around Enterprise Application Platforms, which include requirements analysis and platform selection, deep and complex customization, cross-platform migration, implementation and integration, as well as support and maintenance.

Application Maintenance and Support

EPAM delivers application maintenance and support services. The Company�� application maintenance and support offerings meet rigorous CMMI and SAS 70 Type II requirements. Its services include incident management, fault investigation diagnosis, work-around provision, application bug fixes, release management, application enhancements and third-party maintenance.

Infrastructure Management Services

EPAM service offerings cover infrastructure management services. The Company has implemented large infrastructure monitoring solutions, providing real-time notification and control from the low-level infrastructure up! to and i! ncluding applications. Its solutions cover the lifecycle of infrastructure management, including application, database, network, server, storage and systems operations management, as well as incident notification and resolution.

Advisors' Opinion:

• [By Seth Jayson]

  EPAM Systems (NYSE: EPAM  ) reported earnings on May 9. Here are the numbers you need to know.

  The 10-second takeaway
  For the quarter ended March 31 (Q1), EPAM Systems met expectations on revenues and missed estimates on earnings per share.

Hot Sliver Companies To Buy For 2015: Affiliated Managers Group Inc. (AMG)

Affiliated Managers Group, Inc., through its affiliates, operates as an asset management company providing investment management services to mutual funds, institutional clients, and high net worth individuals in the United States. It provides advisory or subadvisory services to mutual funds. These funds are distributed to retail and institutional clients directly and through intermediaries, including independent investment advisors, retirement plan sponsors, broker-dealers, major fund marketplaces, and bank trust departments. The company also offers investment products in various investment styles in the institutional distribution channel, including small, small/mid, mid, and large capitalization value and growth equity, and emerging markets. In addition, it offers quantitative, alternative, and fixed income products, and manages assets for foundations and endowments, defined benefit, and defined contribution plans for corporations and municipalities. Affiliated Managers G roup provides investment management or customized investment counseling and fiduciary services. The company was formed as a corporation under the laws of Delaware in 1993. Affiliated Managers Group is based in Prides Crossing, Massachusetts.

Advisors' Opinion:

• [By John Udovich]

  While America�� middle class appears to be shrinking with little upward mobility, small cap wealth management stocks Noah Holdings Limited (NYSE: NOAH) and A.F.P Provida SA (NYSE: PVD)�plus larger cap Affiliated Managers Group, Inc (NYSE: AMG) are managing money in places where the ranks of the middle class and the wealthy are still growing strong. Specifically, Noah Holdings Limited is based in China, Chile based A.F.P Provida SA is spreading its footprint into other Latin American countries and the�Affiliated Managers Group is growing�a global footprint. For those reasons, you have probably not heard of these wealth management stocks, but here are some reasons why you might want to consider investing in one:

Hot Sliver Companies To Buy For 2015: Responsys Inc.(MKTG)

Responsys, Inc. provides on-demand software and professional services primarily in North America, the Asia Pacific, and Europe. The company offers Responsys Interact suite, a software-as-a-service platform that provides marketers with a set of integrated applications to create, execute, optimize, and automate marketing campaigns in various channels, including email, mobile, social, and the Web. Its platform also leverages third-party applications and data from real-time sources allowing customers to deliver targeted content to its customers and known prospects as part of their interactive marketing campaigns. In addition, it provides professional services, such as strategic, creative, deliverability, campaign, and education services. The company offers its on-demand software and professional services to retail and consumer, travel, financial services, and technology industries through a direct sales force. Responsys, Inc. was founded in 1998 and is headquartered in San Bru no, California.

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 Responsys (Nasdaq: MKTG  ) , whose recent revenue and earnings are plotted below.

• [By The GeoTeam]

  Our recent 2013 articles on SaaS companies Selectica (SLTC), E2open (EOPN), Responsys (MKTG), Vocus (VOCS), and ExactTarget (ET) highlighted such opportunities. The average return since the inception of our coverage currently stands at around 34% (55% at their highs).

Hot Sliver Companies To Buy For 2015: LTX-Credence Corporation(LTXC)

LTX-Credence Corporation designs, manufactures, markets, and services automated test equipment solutions for the wireless, computing, automotive, and consumer markets. The company?s product portfolio includes Diamond platform, a package for testing microcontrollers and cost sensitive consumer devices; X-Series platform that offers configurations for optimal testing of ASSP and ASIC, power, automotive, mixed signal, and RF applications; and ASL platform, which is used for testing linear, low-end mixed signal, precision analog, and power management devices. The company also provides various services, including installation and maintenance of test systems, servicing of spare parts, parts and labor warranties on test systems, and training on the maintenance and operation of test systems. LTX-Credence Corporation sells its products through direct sales organization and distributors in the United States, Taiwan, China, Japan, Korea, and southeast Asia. The company was founded i n 1976 and is headquartered in Norwood, Massachusetts.

Advisors' Opinion:

• [By CRWE]

  LTX-Credence Corporation (Nasdaq:LTXC), a global provider of market focused, cost-optimized ATE solutions, reported that it will present at the Barclays Capital Global Technology, Media and Telecommunications Conference on Wednesday, May 23, 2012 at 4:15 PM EDT. This event will be available over the Internet via live webcast.

Hot Sliver Companies To Buy For 2015: IMF (AUSTRALIA)

IMF (Australia) Ltd investigates, manages, and funds litigation and arbitration claims primarily in Australia and the United States. Its litigations include commercial claims, insolvency claims, and group actions. The company offers funding for litigation and investigations preliminary to litigation; payment of adverse costs orders; strategic planning, monitoring, and managing of litigation; factual investigation, including asset tracing; and assistance in facilitating settlements and maximizing the value of each claim. IMF (Australia) Ltd is based in Sydney, Australia.

Advisors' Opinion:

• [By Charles Mizrahi]

  Companies rely on third party contractors, such as Atwood Oceanics (ATW) to provide rigs in these deep-water environments. High utilization rates have resulted in rig shortages, creating upward pressure on prices. Atwood's largest customers include Chevron (Australia), Noble, and Kosmos Energy Ghana.

• [By GURUFOCUS]

  News Corp. (0.4%) (NWSA - $16.06 (0.3%) NWS - $16.43 (0.1%) - NASDAQ)(NWSA), based in New York, operates in five segments: 1) News and information services ��U.S., United Kingdom, and Australian publishing businesses, including The Wall Street Journal, the Times of London, and the New York Post, along with News America Marketing Corp., a leading provider of free standing inserts (FSIs or cents off coupons); 2) Cable network programming ��Fox Sports Australia; 3) Digital real estate services ��a 62% interest in publicly traded REA Group Ltd. (Australia); 4) Book publishing ��Harper Collins, one of the largest English language publishers in the world; and 5) Other ��primarily the company's K-12 education business ��Amplify. On June 28, 2013, 'old News' Corp. (now Twenty-First Century Fox Inc. (2.4%)) spun off most of its non entertainment assets ('new News') to holders on a one for four basis. We estimate that the company will generate about $800 million of EBITDA on $8.7 billion of revenues for the year ending June 30, 2014.�

Hot Sliver Companies To Buy For 2015: Targa Resources Inc.(TRGP)

Targa Resources Corp., through its general and limited partner interests in Targa Resources Partners LP, provides midstream natural gas and natural gas liquid (NGL) services in the United States. It engages in gathering, compressing, treating, processing, and selling natural gas, as well as storing, fractionating, treating, transporting, and selling NGLs and NGL products. The company owns interests in or operates approximately 11,372 miles of natural gas pipelines and approximately 800 miles of NGL pipelines, with natural gas gathering systems covering approximately 13,500 square miles and 22 natural gas processing plants with access to natural gas supplies in the Permian Basin, the Fort Worth Basin, the onshore region of the Louisiana Gulf Coast and the Gulf of Mexico. It owns and operates 39 storage wells with a net storage capacity of approximately 65 million barrels; and 16 storage, marine, and transport terminals with above ground storage capacity of approximately 1.4 million barrels. Targa Resources Corp. sells its services to refineries, petrochemical manufacturers, propane distributors, multi-state retailers, independent retailers, and other industrial end-users. The company was founded in 2003 and is based in Houston, Texas.

Advisors' Opinion:

• [By Eric Volkman]

  The dividends are continuing to flow at the closely related companies Targa Resources (NYSE: TRGP  ) and Targa Resources Partners (NYSE: NGLS  ) . Q2 distributions for both have been declared; the former will hand out $0.5325 per share on Aug. 15 to shareholders of record as of July 29, while Targa Resources Partners is to dispense $0.7150 per unit on Aug. 14 to holders of record as of July 29.

• [By Robert Rapier]

  Some of our portfolio picks that are suitable for IRA accounts include Kinder Morgan (KMI), Williams (WMB), Targa Resources (TRGP) and Navios Maritime Partners (NMM).

Hot Sliver Companies To Buy For 2015: FMC Corporation (FMC)

FMC Corporation, a chemical company, provides solutions, applications, and products for agricultural, consumer, and industrial markets. The company operates in three segments: Agricultural Products, Specialty Chemicals, and Industrial Chemicals. The Agricultural Products segment develops, markets, and sells a portfolio of crop protection, pest control, and lawn and garden products. It produces insecticides, herbicides, and fungicides to protect crops, including cotton, sugarcane, rice, corn, soybeans, cereals, fruits, and vegetables from insects and weed growth; and for non-agricultural applications, including pest control for home, garden, and other specialty markets, as well as for turf and roadside applications. The Specialty Chemicals segment focuses on food ingredients, pharmaceutical excipients, biomedical technologies, and lithium products. It produces microcrystalline cellulose that is used as drug dry tablet binder and disintegrant, and food ingredient; carrageena n, which is used as food ingredient for thickening and stabilizing; encapsulant for pharmaceutical and nutraceutical applications; alginates that are used as food ingredients, and for pharmaceutical excipient, wound care, orthopedic uses, and industrial uses; and lithium that is used in pharmaceuticals, polymers, batteries, greases and lubricants, air conditioning, and other industrial applications. The Industrial Chemicals segment produces inorganic materials, such as soda ash for glass, chemicals, and detergents; specialty peroxygens for pulp and paper, chemical processing, detergents, antimicrobial disinfectants, environmental applications, electronics, and polymers; and zeolites and silicates for detergents, car tires, pulp, and paper. It has operations in North America, Latin America, the Asia Pacific, Europe, the Middle East, and Africa. The company was founded in 1884 and is headquartered in Philadelphia, Pennsylvania.

Advisors' Opinion:

• [By Ben Levisohn]

  Timing of the transaction completion is mid 2015, following final approval of the BoD, receipt of favorable opinion on tax free status from IRS, shareholder approval, & all regulatory approvals. As a point of interest we have seen several announcements recently where an announcement of the split drives the stocks up 10% and quickly fades as timing sets in and market risk still exists. recent examples [Hertz (HTZ), FMC Corp (FMC), Agilent (A), Noble (NE), CBS (CBS)]. I would expect the stock to fade hard from these levels

• [By Marc Courtenay]

  Some other names to consider as takeover targets would include FMC Technologies, Inc. (FTI), which provides technology solutions for the energy industry worldwide and hit a 52-week high on April 11th. Another less conspicuous target is the diversified chemical company FMC Corp. (FMC), which has a market cap of only $8 billion plus a forward PE of less than 13.

• [By Rich Duprey]

  Just as Monsanto is enjoying a surge in sales of Roundup, pesticide makers are witnessing greater sales of pesticides to combat these superbugs. Revenues at Sygenta (NYSE: SYT  ) rose 1.5% to $4.2 billion, FMC's (NYSE: FMC  ) sales were 5% higher, and American Vanguard's (NYSE: AVD  ) surged 39% last quarter. The three companies account for three-quarters of all ground pesticides sold in the United States.

Russia raises interest rate to 7.5%

Russia's central bank on Friday raised its benchmark interest rate half a percentage point to 7.5% to cope with rising inflation in another sign of widening economic fallout from the Ukraine crisis.

The increase follows a March 3 hike from 5.5% to 7% that bank had described as temporary.

The Bank of Russia's latest move came hours after Standard & Poor's cut Russia's credit rating to one notch above junk levels, citing the political tensions over Ukraine and the flight of investor capital.

"In our view, the tense geopolitical situation between Russia and Ukraine could see additional significant outflows of both foreign and domestic capital from the Russian economy and hence further undermine already weakening growth prospects," S&P said.

CRISIS BUILDS: U.S. allies threaten new sanctions

The Bank of Russia said that raising its key rate would slow inflation to no more than 6% by the end of the year. Consumer prices were up 7.2% in April from a year ago, the bank said, and it projected inflation would remain at that level until mid-year.

For comparison,annual inflation in the U.S. and in the 18 nations that use the euro is running well below 2%.

"The probability of inflation exceeding the 5.0% target at the end of 2014 has increased substantially," the Bank of Russia said.

The actions by S&P and the Bank of Russia follow a slowing of economic growth in Russia to 0.8% in the first quarter and capital flight of $70 billion by anxious investors. Russian officials have said more capital was taken out of the country in the first quarter of the year than in all of 2013.

Russia was facing deepening economic woes even before its actions in Ukraine. Its economy grew 1.3% in 2013, the lowest rate since 1999, excluding 2009 when the economy contracted amid the global financial crisis. S&P said its base forecast was for average annual growth of 2.3% a year in 2014 through 2017, but indicated that could prove too optimistic.

"In our view, if ! geopolitical tensions do not subside in 2014, there is significant downside risk that growth will fall well below 1%," S&P said.

Contributing: Associated Press

Consumer Optimism Slips on Taxes, Economic Concerns

Craig Warga/Bloomberg via Getty Images U.S. consumers felt less confident about their finances last month, attributable in part to the looming April 15 tax deadline, a new survey finds. The Consumer Bankers Association and AOL (AOL) monthly Finance Optimism Index fell 3.6 points to -6.2, the organizations said Thursday. An index value below zero indicates that greater number of those who responded to the poll felt pessimistic than optimistic about their personal finances. Results of the survey suggest April's impending federal income tax deadline combined with other factors, including sluggish job growth and swiftly rising food prices, meant more Americans overall were feeling their budgets squeezed in March. The CBA and AOL Finance Optimism Index tracks optimism through agreement with four statements in a survey: I am optimistic about my personal financial future. I am worried about my current financial situation. The news I've been hearing in the past few weeks about Americans' personal finances has been generally positive. I am worried that the current economic and political situation is going to affect my personal finances. The poll results were in line with another measure of consumer confidence in the U.S. economy -- the final March survey of consumer sentiment by the University of Michigan, which showed consumers trimming spending as their faith in a growing economy waned. Another measure, however, showed Americans felt more upbeat. The Conference Board last month said its index of consumer attitudes rose to its highest level since January 2008. Still, while the Conference Board survey found consumers were more upbeat about the overall economy and employment prospects, findings suggested that Americans were concerned about their ability to earn more money and rising prices.

Stocks to Watch: AT&T, Boeing, Delta

Among the companies with shares expected to actively trade in Wednesday’s session are AT&T Inc.(T), Boeing Co.(BA) and Delta Air Lines Inc.(DAL)

Amgen Inc.(AMGN) said its first-quarter earnings fell 25% on higher costs that masked the biopharmaceutical company’s revenue growth. Shares dropped 2.6%to $116.15 premarket.

AT&T sales rose to start the year, as the carrier added more subscribers and increasingly sold mobile devices like the iPhone at full price. But profit declined due to higher taxes. Shares declined 2.5% to $35.38 premarket.

Boeing said its first-quarter earnings fell 13% as costs tied to changes to its retirement plans masked the continued strong demand for its jetliners. Shares edged up 2.3% to $130.50 premarket as the results beat expectations and the company raised its earnings guidance.

Cree Inc.(CREE) said its fiscal third-quarter earnings climbed 27% on higher sales of its lighting bulbs. Shares declined 7.4% to $53.75 premarket as the company’s outlook was mostly below views.

Delta said first-quarter earnings surged, with higher revenue and passenger demand. The big U.S. airline’s financial improvement came despite the fact it cancelled more than 17,000 flights due to severe weather in January and February. Earnings beat expectations, pushing shares up 5.6% to $36.89 premarket.

Dow Chemical Co.(DOW) said first-quarter earnings rose 65% on modest revenue growth and a boost from lower costs. Earnings beat expectations, and shares edged up 2% to $49.90 premarket.

Gilead Sciences Inc.(GILD) reported nearly $2.3 billion in first-quarter sales for its new hepatitis C treatment Sovaldi in what is believed to be the best-selling prescription drug launch in history. Shares climbed 3.6% to $75.45 premarket.

Illumina Inc.(ILMN) swung to a first-quarter profit, as the gene-sequencing company recorded a sharp increase in revenue. The company also raised its outlook for the year, pushing shares up 7.4% to $158.93 premarket.

Intuitive Surgical Inc.(ISRG) said its first-quarter earnings fell 77% on a steep decline in sales of its da Vinci robotic-surgery systems. Shares dropped 8.9% to $384.69 premarket.

Shares of Sanmina Corp.(SANM) jumped in after-hours trading Tuesday as the electronics manufacturer posted better-than-expected results for the fiscal second quarter. Sanmina also issued rosy outlook targets for the current quarter, pushing shares up 9.5% to $20 premarket.

Skechers USA Inc.'s(SKX) first-quarter profit soared as the footwear company reported broad sales growth in the U.S. and abroad, while also striking a bullish tone about demand later this year. The latest period’s results easily topped Wall Street’s expectations. Shares climbed 12% to $41.38 premarket.

Skyworks Solutions Inc.'s(SWKS) shares rose Tuesday after the wireless-chip supplier reported better-than-expected fiscal second-quarter profit and revenue growth. Shares climbed 8.8% to $41.30 premarket.

Shares of Super Micro Computer Inc.(SMCI) jumped 17% to $22.09 premarket after the servers maker reported better-than-expected profit and sales growth for the fiscal third-quarter. Super Micro also issued a rosy outlook for the fiscal fourth quarter.

Yum Brands Inc.'s(YUM) first-quarter profit rose 18%, as the parent company of KFC, Taco Bell and Pizza Hut recorded improved sales in China. Yum’s earnings topped Wall Street’s expectations, pushing shares up 2.9% to $79.72 premarket.

Frank Sands Picks Up RS Investment Management’s Drop

As conventional oil and gas reserves continue to dwindle in the U.S., the industry continues to increase the exploration and production of unconventional reserves. The trend is expected to deepen in response to a rising demand for fossil fuels by the North American market, as the consequences of the last economic crisis fade away and industrial activities return to normal.

In order for the exploration and production to remain environmentally safe, companies need to integrate technology developments, management practices and regulatory policies. Nonetheless, strategic planning by both companies and regulatory agencies will be key to unlocking potential growth. In this sense, Southwestern Energy (SWN) will be analyzed as a prospect long-term investment.

Solid Performance Backs Long-Term Investment

Frank Sands (Trades, Portfolio) purchased stock of Southwestern Energy since early on 2011. When looking at market performance, the timing was not the most appropriate, and the guru recognized better opportunities later. Hence, position increments repeated ever since throughout the following two years. The decision was confirmed as correct since performance during the first quarter of 2014 was above the market average. Most important, overall performance by the company during the last four years showed noticeable improvements.

For fiscal year 2013, Southwestern Energy reported gas and oil production of 656.8 billion cubic feet equivalent, up 16%, and total proved reserves of approximately 7.0 trillion cubic feet, up 74%, compared to 2012 levels. Also, adjusted net income was up 45%, or $703.9 million, or $2.00 per diluted share, and net cash provided by operating activities before changes in operating assets and liabilities reached $2.0 billion, up 24% compared to 2012 levels. Most important, the reserve replacement ratio climbed to 550%, including reserve revisions.

Backed by the successful performance registered for fiscal year 2013, Southwestern Energy announced the acquisition of approximately 312,000 net acres in northwest Colorado targeting crude oil, natural gas liquids and natural gas contained in the Niobrara formation from Quicksilver Resources (KWK) and SWEPI LP, a wholly owned subsidiary of Royal Dutch Shell (RDS.A) for approximately $180 million. The transaction is expected to close in the second quarter of 2014.

Preparing to Exploit Rumors

Analysts have recently raised the target price for Southwestern Energy as the company is expected to benefit from a favorable natural gas environment. Between Cowen and Co., Deutsche Bank, Sterne Agee, Sandford C. Bernstein, and Stifel Nicolaus target price averages slightly above the $50 mark. Additionally, Sandford C. Bernstein, Stifel Nicolaus, and ISI Group gave the stock a "Buy" rating. The remaining financial institutions — Zacks, Citigroup, and FBR Capital Markets — are less optimistic and settled on a "Neutral" rating.

Southwestern Energy's future prospects are backed by lower operating expenses and higher production, primarily at its Fayetteville shale operations. An important position is also held at the Marcellus shale and a new asset is under construction at New Ventures. While the hidden asset, expected to unleash growth catalysts is Brown Dense. Most important, the company is one of the largest producers of natural gas in the U.S., and is expected to spend approximately $705 million to drill 86 to 88 gross wells in Marcellus.

Currently, Southwestern Energy trades at 24.3 times its trailing earnings, and carries a 24% discount to the industry average. In addition, the company has a strong balance sheet with significant liquidity and financial flexibility. Most important, the recent strong performance allowed for a full recovery of revenues and net income, while at the same time recovering the high operating margin.

Given Frank Sands (Trades, Portfolio) behavior, a split 2:1 quarterly dividend payment, and below industry average debt, Southwestern is an interesting stock for a long-term investment. The stock is not cheap, but responsible management and solid growth, backed by strong finances, make the stock a great option for any investment.

Disclosure: Vanina Egea holds no position in any of the mentioned stocks.

About the author:Vanina EgeaA fundamental analyst at Lone Tree Analytics

Visit Vanina Egea's Website

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Fast Access to Cash is Still King for Chance to Earn Big

Aslysun/Shutterstock This is part four in a series on the Six Circles of Wealth. The first three circles are income, investments and guaranteed income. The next is cash, also known as liquidity. Cash is an essential part of a solid financial fortress. Even the sound of the word evokes an all-over body tingling to most people. The adage that "cash is king" is true, and this is especially true if that cash is used to buy distressed assets at a huge discount. The longer the sales cycle for an asset, the more valuable cash becomes. When you sell stocks, the money usually clears the next day. There is no costly waiting time, as there is when you sell a property or even a business. When you sell long-sales-cycle assets, then cash can become an invaluable negotiating tool, depending on the sales situation of the seller. Many people will tell you not to keep much money in cash because you will make no money on the cash (or at least very little). This is a shortsighted view. Having cash in a bank, in cash-value life insurance and even a safe deposit box is invaluable because you can access the money immediately without having to sell an asset at a loss. A $200,000 House for $100,000 -- Today Only

Report: Ford to name Fields CEO Mulally's…

Ford Motor within the next month will make it official that heir-apparent Mark Fields succeed retiring Alan Mulally as CEO, according to multiple reports on Monday.

The announcement will come by May 1, according to Bloomberg News, citing two unnamed sources. CNBC, meanwhile, reported that the switch would be announced within a month and pointed out that the automaker's annual meeting is set for May 8 in Delaware.

In December 2012, the Ford board, as part of a succession plan, created the No. 2 position of chief operating officer and named Fields, 53, to it, making him the presumed heir. Mulally, meanwhile, said and has continued to say, that he would retire by the end of 2014.

FORD'S FUTURE: Five things new Ford CEO must do

PROFILE: Waiting almost over for Ford CEO heir Fields

Ford's Mark Fields delivers his keynote address at the 2014 New York International Auto Show at the Javits Convention Center in New York, April 16, 2014.(Photo: Richard Drew, AP)

Ford officials refused to confirm the reports that an announcement is imminent.

"There is no change from our previous announcements and we do not comment on speculation. We take succession planning very seriously, and we have succession plans in place for each of our key leadership positions. For competitive reasons, we do not discuss our succession plans externally. If something were to change, we would let everyone know," spokeswoman Susan Krusel said in a statement.

Unlike the surprisingly quick announcement and promotion of Mary Barra to CEO of General Motors, Fields has been running the daily operations at Ford for 15 months and taken Mulally's spot in key planning meetings in what is viewed as a thorough and lengthy transition.

Mulally,! meanwhile, has said he is concentrating on longer-term strategy and he has already taken a lower profile, such as, for example skipping public appearances at last week's press preview of the New York Auto Show where the redone 2015 Ford Mustang and the 50th anniversary of the Mustang were featured.

Fields, 53, is credited with restructuring operations in North America prior to his promotion in 2012 to the COO.

At the time of Fields' promotion, Mulally, 68, confirmed plans to remain with the automaker through the end of this year, but the board of directors is said to be open to an earlier date.

The board next meets ahead of the May 8 shareholder meeting when they are up for re-election to their positions.

The timing of Mulally's retirement became an issue last year when he was on a list of candidates to become the next CEO of Microsoft. The publicity became a distraction at Ford and there were concerns it diverted attention from the big product push Ford has this year.

One offshoot of the speculation is the market remained stable in a signal it is not jittery about the transition from Mulally to Fields.

Mulally left Boeing in 2006 to take over as CEO of Ford. He is credited with uniting a fractious leadership, creating a global product development strategy and leading the automaker through the 2008 financial crisis with savvy decisions that made it possible to avoid filing for bankruptcy in 2009 and avoid using government assistance.

Why Chipotle Investors Should Be Proud Today

Increasing numbers of consumers are concerned about genetically modified organisms, or GMOs, in their food. Forget about California's highly watched and narrow defeat of a GMO right-to-know proposition last fall, a defeat bankrolled by major companies like Monsanto as well as large consumer brands. Momentum is increasing at the state level, and even the biggest companies don't have endless resources to fight it.

Connecticut and Maine both recently passed labeling laws after California's well-known defeat on the contentious GMOs issue. Massachusetts is now contemplating a similar mandate. This is a major, growing problem for many consumer goods companies that are too busy wasting time and money fighting than on making an actual action plan.

Companies that get ahead of these issues and voluntarily acknowledge consumers' right to know deserve extra kudos. That's why Chipotle (NYSE: CMG  ) investors should be proud of the company today. As a shareholder who also bought shares of Chipotle for the Prosocial Portfolio I'm managing for Fool.com, I know I am.

No secret sauce here
Chipotle announced that it's disclosing which menu items contain genetically modified organisms on its website. Note that it didn't have to do this on an across-the-board basis, but it's voluntarily making that choice. Now consumers who want to know can know, and make their own decisions.

The unvarnished truth is that most of Chipotle's ingredients do contain GMOs. That's why its move is even more impressive. This could be easily misinterpreted, but it's not a sign of any inherent evil on Chipotle's part -- it simply underlines a fact about the American food supply that many might consider alarming. Unless a consumer is buying all organic, the cupboard is chock-full of GMOs.

The majority of crucial ingredients for so many foods, such as corn and soybeans, currently are genetically modified to resist pests and otherwise boost yields. The FDA does not deem these crops to be any different from the ones that are not genetically modified, and therefore, it never mandated labeling when GMOs started infiltrating American consumers' meals.

Although Chipotle's Food With Integrity plan is already admirable given the naturally raised, humane, local, and antibiotic-free ingredients it includes in its lineup as often as it can, those terms aren't defined as lacking genetic modification. The only guarantee of non-GMO consumption is the term "organic," and a full, immediate shift to such ingredients on such a large scale would be impossible for big companies at this point in time.

Honesty is the best policy
Chipotle is following in other highly evolved, customer-centric companies' footsteps. Earlier this year, Whole Foods Market (NASDAQ: WFM  ) made a huge stand by requiring its suppliers to disclose GMO ingredients by 2018. Needless to say, some of its biggest rivals would shudder at the thought of such an undertaking. Given the nature of Whole Foods' suppliers to begin with, though, the company was already way ahead of this curve, part of why management's vision continues to make the stock a stellar investment.

Another well-known consumer favorite, Unilever's (NYSE: UL  ) Ben & Jerry's, discloses GMO information on its website. Although most of its flavors lack GMOs, it is working to make its ice cream supply GMO-free. (Apparently, some of the chunks and swirls may have small traces.)

In my opinion, the beauty of these disclosures isn't about the science of GMOs. Investors can argue until the cows come home about whether they're safe or not. Many investors bring up some good points, including food scarcity and costs. The idea of more starving people in the world is not a pleasant one.

Beauty is truth; truth, beauty
The real point here is putting honesty and transparency first, in any area. The best thing corporations can do is make truth the priority, even if it's scary, threatening, or difficult to do. We need a lot more honesty and a lot less spin these days. If consumers demand information, it's wrong to basically say they don't need or deserve it.

It's time to demand the truth in all areas, not just business. I'm personally no fan of Monsanto, but tolerating or even encouraging outright disinformation is wrong. Some organizations and individuals clearly don't care as long as they get what they want. A recent meme about companies "owned" by Monsanto was ridiculous and irresponsible, and I simply had to debunk it. We should never put any agendas above the truth. Machiavellianism is an extremely negative trait, if we want to have conversations about evil.

Anyone who views Chipotle's decision as a business negative is dead wrong. The burrito slinger is choosing transparency when it could have gone with too many companies' usual response: sweeping reality under the rug and hoping nobody notices the alarming bulge beneath the Berber. It's letting the (tortilla) chips fall as they may, but that's actually a good business decision.

Chipotle's stock has been on an absolute tear since the company went public in 2006. Unfortunately, 2012 hasn't been kind to Chipotle's stock, as investors question whether its growth has come to an end. Fool analyst Jason Moser's premium research report analyzes the burrito maker's situation and answers the question investors are asking: Can Chipotle still grow? If you own or are considering owning shares in Chipotle, you'll want to click here now and get started! 

Weibo Debut Clouds Outlook For Tech IPOs

Everyone's buzzing today about the trading debut of Weibo, following a performance by the Sina microblogging unit that was filled with mixed signals. Potential investors in the company will inevitably have many questions about Weibo's future, as it seeks to carve out a secure and profitable place for itself in China's competitive social networking (SNS) space. But from the bigger perspective, this mixed performance is the latest sign that the window of positive sentiment towards Chinese Internet IPOs is closing fast in New York, though it could remain open for perhaps another few weeks.

The exact amount of remaining time in that window is quickly becoming a key focus point, as a number of companies line up to make major offerings before sentiment falls into squarely negative territory. Major e-commerce companies JD.com and Jumei.com have both filed for offerings to raise up to $1.5 billion and $400 million, respectively; and media reported this week that e-commerce leader Alibaba could make its first filing next week for a mega New York IPO that is likely to be the world's largest Internet offering since Facebook listed in 2012.

I'll return shortly to the prospects for these major IPOs, as well as many smaller ones, but first let's start with a look at the details that are leading most observers to call Weibo's IPO decidedly mixed. The fact that the company was able to salvage even a mixed IPO is actually a positive result, since all of the signs before its trading debut were quite negative.

The company had originally planned to raise up to $500 million, but had to keep scaling back the number due to flagging demand. In the end it raised less than 60 percent of that target, taking in $286 million. (English article; Chinese article) The offering also priced at the bottom of its original range at a final price of $17 per American Depositary Share (ADS). That gave Weibo a relatively disappointing valuation of just under $3.5 billion, only slightly higher than the figure when Alibaba signed a landmark deal a year ago to buy 18 percent of the company.

All those negative signs certainly didn't point to a promising debut. But Weibo defied the trends and saw its shares climb as high as 44 percent before finally closing up a healthy 19 percent. The debut isn't quite as spectacular as previous recent ones for other Chinese Internet firms, but it does indicate there's still demand out there for these companies.

From a broader perspective, this kind of debut indicates that interest in Weibo from large institutional investors was probably weak, but that smaller retail and hedge fund investors looking to make a quick profit is still strong. That's not really the kind of market that listing candidates want to see, since longer-term institutional investors are an important stabilizing factor that helps to support a company's stock and act as a draw for smaller investors who like to follow the big money.

So what does all this mean for the current pipeline of Chinese IPOs? I do think that smaller companies looking to raise $100 million or less should be able to move forward and list in the next 3 weeks. Such amounts are relatively small, and many investors who like these firms tend to be shorter-term buyers I described above. Among the bigger offerings, I do think that Jumei might have to scale back its offering, and either JD.com or Alibaba might be forced to delay and wait to see if sentiment improves by the end of this year.

Bottom line: The mixed performance for Weibo's IPO shows that big institutional buyers have lost interest in Chinese Internet firms, which could delay mega listing plans for JD.com or Alibaba.

Doug Young is a former China company news chief for Reuters who teaches financial journalism at Fudan University in Shanghai. To read more of his commentaries on China tech news, click on www.youngchinabiz.com.

Pandora Media Inc's Growth Moderates as Apple Still Looms Large

As tech giant Apple (NASDAQ: AAPL  ) continues to threaten it and its key growth metrics remain tepid, I'm back to my Pandora Media (NYSE: P  ) stalking ways.

Assuming most of you aren't familiar with my admittedly odd infatuation with Pandora Media, I've been following the company's soaring share price and still-unfolding economics for some time now, especially as new competition from the likes of Apple's iTunes Radio poses a new kind of threat to upend Pandora Media's early lead in online streaming radio.

A March to remember for Pandora Media?
One of the most helpful ways to monitor Pandora Media's business progress are the monthly user metrics updates it regularly provides for investors.

Source: Pandora.

And in the case of Pandora's March user metrics, there were arguably equal parts good and bad. Broadly speaking, Pandora users are utilizing the service more, which increases the number of total hours to which Pandora can serve ads. However, the pace at which it's acquiring new users is slowing, bringing Pandora Media alternatives like iTunes Radio into the discussion once again.

So just how big a deal is slowing user growth for Pandora Media and its investors? In the video below, tech and telecom specialist Andrew Tonner breaks down his thoughts on Pandora Media's current state of affairs plus some of the threats that now-rival Apple poses in the months ahead.

Investing in more incredible growth stocks like Pandora
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Delamaide: SEC catching minnows, not sharks

WASHINGTON — Few fishermen would take as much pride displaying the catch of a minnow as the Securities and Exchange Commission did last month when a federal judge imposed an $825,000 fine on a Goldman Sachs junior executive for misleading customers about a dubious investment.

A good six years after wildly speculative trading by Wall Street banks delivered hundreds of millions in bonuses to top executives while bringing the global financial system to its knees and billions in losses to investors, the best the SEC can manage against these big banks and their executives is this single judgment of a bit player who was only 28 at the time.

Fabrice Tourre, who styled himself "Fabulous Fab" in an e-mail, may well have misled investors, but he has long been seen as a fall guy for widespread abuse by executives at Goldman and other Wall Street firms who are much more highly placed.

And yet Andrew Ceresney, chief of enforcement at the SEC, congratulated himself and his agency for this court victory. "The ruling reflects the SEC's intent of pursuing meaningful sanctions to punish individuals responsible for misconduct and deter others from violating the federal securities laws," he said in a statement last month.

Another SEC lawyer was much less congratulatory in remarks he made at his retirement party later in the month.

The SEC has become "an agency that polices the broken windows on the street level and rarely goes to the penthouse floors," James Kidney said at his goodbye party, according to a report by Bloomberg News, drawing applause from the 70-some people in attendance. "On the rare occasions when enforcement does go to the penthouse, good manners are paramount. Tough enforcement, risky enforcement, is subject to extensive negotiation and weakening."

The union representing SEC employees has since posted Kidney's retirement speech online. The trial lawyer said his bosses at the agency were "tentative and fearful" and were more concerned about getting high-paying jobs af! ter they left the SEC than tackling tough cases against top executives.

Goldman Sachs did pay a settlement of $550 million last year for misinforming investors on that same synthetic security that Tourre was brought to trial for. But no other executives, including Tourre's supervisors, were charged or fined. SEC enforcers, Kidney said at his retirement party, are "at most a tollbooth on the bankster turnpike."

A separate report in American Lawyer last week provided more details about the internal struggle at the SEC to hold higher-ups at Goldman personally accountable.

The publication sued under the Freedom of Information Act for transcripts of an investigation by former SEC inspector general David Kotz into the agency's handling of the Goldman Sachs case.

Lawyer Kidney was speaking out then, too, according to the American Lawyer report by Susan Beck.

"My experience in this case still bothers me a lot," Kidney said during 80 minutes of sworn testimony in the summer of 2010. "We take extraordinary inferences and apply them to common little people," he said. "It still bothers me that we had a lot more than inference here, and we didn't do anything with it."

Kidney felt there was enough indication of involvement by Tourre's supervisor, Goldman managing director Jonathan Egol, to warrant interrogation, though other SEC lawyers working on the case felt it was not sufficient. When, at Kidney's insistence, Egol was questioned, there was no follow up.

For the record, both Bloomberg reporter Robert Schmidt and American Lawyer's Beck harvested the usual "no comment" from spokesmen for the SEC and Goldman regarding Kidney's remarks.

The American Lawyer report notes that nearly a dozen other collateralized debt obligations similar to the one Tourre was found guilty of civil fraud for were never subject to SEC allegations or settlement.

At issue with all the CDOs was the fact that the hedge fund Paulson & Co. helped Goldman construct these synthetic securit! ies and t! hen sold them short in the confidence they would implode — which they did, reaping the hedge fund a handsome profit at the expense of the investors Goldman sold the securities to.

It's easy to understand why Kidney might be upset by all this.

The SEC chief enforcement officer at the time, Robert Khuzami, who was general counsel at Deutsche Bank before taking the SEC post, is now a partner at the corporate law giant Kirkland & Ellis.

Khuzami, like his successor Ceresney, would regularly trot out a blizzard of statistics about enforcement actions undertaken and disgorgements of profits and penalties levied, all to preserve the appearance that the SEC is a tough cop on the job.

In his retirement speech, Kidney criticized the use of misleading statistics to tout its enforcement efforts. "It is a cancer," he said of the practice. "It should be changed."

The SEC is spending too much time "picking on the little guys," he said. For the big fish on Wall Street, however, "we are a cost, not a serious expense." His conclusion: "The system is broken."

Darrell Delamaide has reported on business and economics from New York, Paris, Berlin and Washington for Dow Jones news service, Barron's, Institutional Investor and Bloomberg News service, among others. He is the author of four books, including the financial thriller Gold.

Preventive Care Without Cost-Sharing

Do all health insurance policies have to provide preventive care without a deductible? What is covered?

SEE ALSO: 10 Surprising Things Insurance Covers

All health insurance policies that were issued after March 23, 2010, when the health-care law was signed, must provide certain preventive care without being subject to the policy's deductible or copayments. That requirement applies even for high-deductible policies. Policies issued before that date that haven't changed significantly (so-called grandfathered policies) are not required to provide preventive care without cost-sharing, although many of them do.

The preventive coverage includes screenings for high blood pressure, high cholesterol for adults with a history of the condition, colorectal cancer for adults over age 50, and Type 2 diabetes for adults with high blood pressure. Women over 40 can get fully covered mammograms every one or two years, depending on their risk factors. You are also entitled to several immunizations, depending on your age, as well as other tests and services, depending on your age and health. Children can receive routine vaccinations, well-baby and well-child visits, and other preventive services. See the preventive-care page at Healthcare.gov for a list of services and eligibility requirements.

You may still end up with some out-of-pocket expenses for these services if you get follow-up tests or cover other medical issues while at the doctor's office. You may also have to pay extra if you go to an out-of-network provider.

Medicare must now provide certain preventive-care benefits without cost-sharing, too. You can get a "Welcome to Medicare" physical exam within the first year after you sign up for Medicare Part B, and you can get a personalized prevention plan and annual wellness visit. You may also be able to receive screenings for colorectal cancer and high cholesterol without cost sharing, as well as flu shots, pneumonia shots and hepatitis B shots. Women can get mammograms and cervical cancer screening, and men can get certain kinds of prostate screenings. The screenings are fully covered, but you may have to pay for the doctor's visit. The frequency of the screenings often depends on your age and risk.

See Your Guide to Medicare's Preventive Services at Medicare.gov for more information.

Got a question? Ask Kim at askkim@kiplinger.com.

Stock Tip: Avoid Facebook

Facebook  (NASDAQ: FB  ) is a profitable company with a large competitive advantage of network effects and healthy margins. It has more than a billion users -- probably the first company in the world to claim such a feat. The company has changed the way society interacts, and it knows more about you than your own mother.

But ...

It is not yet a $50 billion-plus company, even though that's its current market capitalization. And it shows no signs of becoming one in the near future. There's still great potential for the company, but there are better places to put your money right now.

A lack of a catalyst
Those billion-plus users each pay exactly $0 to be a member. Facebook earned only $1.35 in average revenue per user last quarter from advertising and payments. Unfortunately for Facebook, there are no royalty payments for changing global culture, and it has yet to come up with a system to charge mothers for access to their children's information. 

The company sits on vast resources, but the monetization of such resources outside of advertising remains elusive. Additionally, companies are hesitant to commit advertising dollars to unproven platforms. The amount of money spent on Internet and mobile advertising lags the percentage of time Americans spend consuming that given media.

Meanwhile, spending in the established print advertising industry greatly outpaces the amount of time Americans actually consume it. The momentum toward online advertising, and especially mobile advertising, must pick up to match consumption. While this could mean a future windfall for Facebook and other online ad networks, they still need to prove the efficacy of their respective online and mobile advertising offerings.

And so Facebook remains expensive
With an undefined future, attempting to value Facebook is nearly impossible. There are still too many questions about monetization, just as there were a year ago. And in the meantime, Facebook will trade based on hype alone. There are better places to put your money while Facebook sorts out its future.

If a catalyst does come along, there will be plenty of time to pick up shares. If Facebook truly finds its monetization formula, paying a few percentage points more for the stock won't hurt the enormous returns that could come. For now, keep your eyes on Facebook, but your wallet closed.

For things every investor needs to know about this revolutionary company, check out The Motley Fool's newest premium research report on Facebook. Read up on whether there is anything more to "like" about it today to determine if Facebook deserves a place in your portfolio. Access your report by clicking here.

The War for Online Video Is Heating Up

Amazon (NASDAQ: AMZN  ) , Yahoo!  (NASDAQ: YHOO  ) , AOL  (NYSE: AOL  ) have made key moves to build a video arsenal-moves that will surely lead to a showdown with everyone, including Netflix (NASDAQ: NFLX  ) and Google's (NASDAQ: GOOG  ) YouTube.

Will Netflix and YouTube survive this onslaught?

For some time now, Amazon and Yahoo! have partnered with content creators to create a hub of online video. But, in just the past few months, both companies have struck deals to become the exclusive streaming partner for certain TV shows. Now, Amazon is the only one that has access to shows like Downton Abbey and Justified online, meanwhile Yahoo! will soon become the place for Saturday Night Live.

Additionally, each company is creating original shows. Last month, Amazon piloted 15 new pilots, AOL announced it would create a studio to help shoot 15 shows as well, and Yahoo! has been creating its own web series for a while.

So, it looks like Netflix and YouTube have their work cut out for them. Luckily, Netflix and YouTube seem well-positioned to weather any battles for the next couple of years. In the following video, Motley Fool contributor Kevin Chen compares Netflix and YouTube's prospects to their ever-growing competitors. To learn more, click on the video below.

It's incredible to think just how much of our digital and technological lives are almost entirely shaped and molded by just a handful of companies. Find out "Who Will Win the War Between the 5 Biggest Tech Stocks?" in The Motley Fool's latest free report, which details the knock-down, drag-out battle being waged by the five kings of tech. Click here to keep reading.

Graham Holdings Taking Care of the Business

Graham Holdings (GHC), formerly the Washington Post Company, is a diversified media and education company which operates chiefly in two areas of the media business: television broadcasting and cable television.

The company owns Kaplan, a leading global provider of educational services to individuals, schools and businesses, across more than 30 countries, Post-Newsweek Stations in Detroit (NBC), Houston (NBC), Miami (ABC), Orlando (CBS), San Antonio (ABC) and Jacksonville, Cable ONE, digital video, Internet and phone services provider to homes and businesses, the Slate Group, a daily online magazine, Trove, a digital team focused on innovation and experimentation with new technologies, Social Code, leading social marketing solutions partner, Celtic Healthcare, and Forney Corporation. The company has recently sold most of its newspaper operations.

The company works through different segments. The education segment provides products and services, mostly through the company s wholly-owned subsidiary Kaplan, Inc. The cable television segment is operated through Cable One, the company owns cable systems offering basic cable, digital cable, pay television, cable modem, and other services to subscribers. The TV Broadcasting segment includes company's broadcast operations through Post-Newsweek Stations. Other Businesses segment includes Trove and WaPo Labs, Slate Group, Social Code, Celtic Healthcare, Inc., and Forney Corporation.

Recent Performance

Results for third-quarter 2013were behind expectations, with a 5.6% fall in the bottom-line, but a top-line rise of 3%. The Broadcasting division perceived a strong decline due to lower political advertising revenue and no special events-related advertising. The drop in student enrollment also affected the Education segment. As of October 1, 2013, the company completed the divestment of its newspaper publishing businesses to Amazon.com Inc. (AMZN) founder, Jeffrey P. Bezos, for $250 million. The sell included The Washington Post, Express newspaper, The Gazette Newspapers, Southern Maryland Newspapers, Fairfax County Times, El Tiempo Latino and Greater Washington Publishing. Analysts think this transaction will have positive outcomes for Graham Holdings, given the unclear profitability these papers had presented for some time.

Historically, Kaplan Higher Education has been its largest profit driver, representing 40% of revenue in 2010. But Kaplan has been struggling with structural obstacles regarding the education sector such enrollment declines, affecting margins and revenues, and it is still uncertain that the industry will be soon stabilized. Lately, most profit has been generated by the company's cable and television broadcasting businesses, which operate in relatively mature categories. However, these businesses are subscale and pay higher content fees (in cable) and receive lower retransmission consent fees (in broadcasting) than peers. Still, the combination of the firm's numerous FCC licenses and content partnerships puts this division in an oligopolistic position in most of the company's local markets.

Growth and Acquisitions

The company has focused on generating a rapid internal growth through acquisition from Kaplan. Acquisitions included education businesses in overseas markets (Canada, Ireland, Australia and China), and have increase profitability while rising revenue 4% in the third quarter of 2013. As of Cable Television segment, revenue rose 1% to $202.4 million for the same period, growth driven by higher rates, increased commercial sales and lower promotional discounts. In addition, the divestment of the newspaper publishing businesses allowed Graham Holdings to clear a troubled area of its business and improve overall performance, being able to focus more on its other core business activities. The purchase of Forney Corporation, a supplier of products and systems for power and industrial boilers, is part of the company's current intention to diversify its revenue through the creation of venues in order to endure economic uncertainties. In the same line, trying to invest in companies with a solid long term earnings future, Graham Holdings has acquired Celtic Healthcare Inc. a company engaged in home healthcare and hospice services in the northeastern and mid-Atlantic regions.

Final Thoughts

Donald Graham, after serving as publisher of The Washington Post newspaper for 21 years, took over as chairman and CEO in 1991. After the company sold its namesake newspaper operations to Jeff Bezos, the executive team has proven to be strong enough to avoid poor acquisition decisions, typical of conglomerates. Still, the company faces some hard time regarding its education segment. As Kaplan Higher Education relies on federal student financial aid programs, the Title IV funds, for a significant portion of its revenue, any future changes in Title IV fund allocation may reduce access to these funds, affecting profitability. Moreover, competition from other traditional colleges and other for-profit schools is increasing while better funding for community colleges could substantially decrease demand for technical degrees, troubling sternly Graham's margins.

The company's other businesses face as well long-term secular headwinds and will have to adjust its structure in order to adapt. Strong rivals amid the television market along with new competition from other forms of video program delivery systems, including DBS services, telephone companies and the Internet could depress the firm's top and bottom lines performance. Still, through a series of good investments, the firm has more than $1 billion of overfunded pension assets, surplus which could help subsidize future business ventures. Some analysts think that even without any further asset sales or spinoffs, Graham Holdings looks appealing based on its asset value and the turnaround potential at Kaplan.

Disclosure: Damian Illia holds no position in any of the stocks mentioned.

About the author:Damian IlliaA fundamental analyst at Lonetreeanalytics.com constantly looking for value and income investments.

Visit Damian Illia's Website

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