Twitter Earnings: One Huge Number Has Stock Up 30%

Updated July 30, 2014: Twitter stock (NYSE: TWTR) closed up 1.74% to trade at $38.59 per share ahead of second-quarter 2014 earnings scheduled for release after the bell on Tuesday. Only minutes after release, TWTR stock jumped 30.22% in after-hours trading. On Wednesday, shares traded at $46.97 (up 21.72%) as of 11:30 a.m. EDT.

Analysts surveyed by FactSet predicted Twitter would post a loss of $0.01 a share on $283.4 million in revenue in its Q2 2014, compared with a loss of $0.12 a share on sales of $139.3 million in the year-ago period.

Twitter beat estimates by $0.03 a share and also topped revenue estimates by $29.72 million (a 124.1% gain year over year).

These earnings were different from any other we've seen from Twitter since it went public in November 2013.

You see, on Feb. 5, the microblogging site announced its first-ever earnings as a publicly traded company. It topped Wall Street estimates by $0.03. Revenue of $243 million beat projections by $26.14 million and constituted a 116% increase compared to the same period the year before. Twitter's advertising revenue, which made up 90% of the company's total revenue, came in at $220 million, an increase of 121% year over year; mobile advertising revenue was more than 75% of total advertising revenue.

That day, TWTR stock fell more than 13% in after-hours trading, and opened the next day down 30.35%.

On April 29, Twitter posted another beat with Q1 earnings. Its revenue of $250.5 million beat projections by $9.6 million, and constituted a 116% increase compared to the same period a year before. Still, Twitter stock plunged 10.4% in after-hours trading that day. Shares dropped as low as 14.22% in pre-market trading the following morning. Ad revenue came in at $226 million for a 121% increase versus the prior quarter, and mobile ad revenue was up 5%.

That day, again, Twitter stock plunged more than 10% despite an earnings win. At market open the next day, shares opened down 11.78% - they'd dropped as low as 14.22% in pre-market trading.

On Tuesday, Twitter beat earnings, but instead of share prices plummeting, they were absolutely crushing, up more than 34% after hours.

That's because earnings and revenue haven't mattered in any of Twitter's earnings releases.

What does matter - and what's been lackluster for Twitter so far in 2014 until Tuesday's Q2 - is this number...

This Number Has Finally Changed, Sending Twitter Stock Soaring

It's all about Twitter's active user base, or MAU's (monthly active users).

In Q1, the company posted a quarterly gain of 5.8% to 255 million. This growth wasn't enough to inspire investor confidence - a big reason Twitter stock dropped after earnings in April. Mobile MAUs rose 8% that quarter, and only 3% the quarter prior. Unique mobile visitors in the U.S. grew 34% compared with the same period a year ago - a huge decline from the 50% growth seen the quarter prior, according to a report from RBC Capital Markets citing comScore data.

But Tuesday's earnings saw MAU's increase 24% year over year to 271 million. Mobile MAUs reached 211 million in Q2 2014, an increase of 29% year over year, and representing 78% of total MAUs.

Driving the huge user base growth this quarter was the FIFA World Cup. The popular sporting event alone brought about 652 million tweets. Twitter introduced new product experiences that were built around the World Cup, including real-time scoring, push notifications, event and match timelines, and a voting ballot feature. In addition, Twitter launched new web profiles and the ability to send private messages within Vine.

"Our strong financial and operating results for the second quarter show the continued momentum of our business," Twitter Chief Executive Officer Dick Costolo said with earnings release. "We remain focused on driving increased user growth and engagement, and by developing new product experiences, like the one we built around the World Cup, we believe we can extend Twitter's appeal to an even broader audience."

What's more, Costolo pointed out on a call with investors Tuesday evening that Twitter's reach is actually much greater than MAUs reflect. He said there are "hundreds of millions of additional visitors who come to Twitter each month but don't log in." Therefore, he stressed, "The size of our audience is two to three times that of just our monthly active user base."

Note, though, that if the World Cup was the primary driving force behind Twitter's second-quarter active user base growth, the boost could only be a temporary one.

As we move into late July - and find that August is right in our windshield - we're also hitting prime vacation season. And if you're like Money Morning Executive Editor William Patalon III, you want to use that time to catch up on your reading. That's why Patalon put together a list of his top 12 "investing classics" - the time spent reading these have a long-term payoff...

Mario Gabelli Comments on Rolls-Royce Holding PLC

Rolls-Royce Holding PLC (LSE:RR.) (1.0%) (RR - $18.29 - U.K.-LONDON) provides jet engines, power and propulsion systems, and services to commercial aviation, defense, marine, oil and gas, and other industries. RR has leading engine positions as the sole supplier on the Airbus A350 and one of two suppliers on the Boeing 787 Dreamliner, two new wide body programs with healthy backlogs to be delivered over the next decade. A re-engining of the A330 could extend one of Rolls' most profitable engine programs. Engine deliveries lead to recurring, higher margin parts and service revenues, which benefit the company more than twenty years after new engines are delivered. In year-end 2013 results, Rolls-Royce surprised investors with 2014 guidance that called for a marked falloff in defense revenues and slower than expected improvement in civil aerospace margins. Notwithstanding near-term headwinds, we believe that over the next decade RR will see substantial growth in its civil aerospace operations, accompanied by improved margins approaching the levels of its peers. Recent portfolio changes have been positive, including the announced two billion GBP acquisition of Daimler's 50% interest in Rolls-Royce Power Systems and the one billion sale of the energy aero-derivative gas turbine business to Siemens. The company's modest debt levels provide balance sheet optionality for additional investments.From Mario Gabelli (Trades, Portfolio)'s The Gabelli Asset Fund Second Quarter 2014 Shareholder Commentary.Also check out: Mario Gabelli Undervalued Stocks Mario Gabelli Top Growth Companies Mario Gabelli High Yield stocks, and Stocks that Mario Gabelli keeps buying

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Bill Nussey Navigates Silverpop's Future With IBM

A Series of Forbes Insights Profiles of Thought Leaders Changing the Business Landscape: Bill Nussey, CEO Silverpop…

Bill Nussey started his first software company at age 15. Now, he's CEO of Silverpop, an Atlanta-based digital marketing company that was just acquired by IBM IBM.

Silverpop's cloud-based platform gives marketers insights into their customers and provides them with an automated system for tailoring their messages to individuals. The company started in 1999 as an automated email marketing company, which Nussey freely admits was popular with businesses but not consumers.

"The acid test was when you went to a cocktail party and someone says 'What do you do?,'" Nussey recalled recently. "You probably didn't want to describe in great specificity the job. And that's when we knew that there was really a gap between what business wanted and what their customers would ultimately demand."

 

Bill Nussey, CEO, Silverpop

Email marketing has evolved since then, and so has Silverpop.  Instead of mass mailings to millions of customers, the technology today allows marketers to customize their messages to individuals automatically based on their online profile and interests, evolving the company into a marketing automation software provider along the likes of Marketo, Eloqua or ExactTarget ExactTarget.

"We were thinking at the time what does the actual end customer want?" Nussey recalled. "Not necessarily just what does our customer—the marketing department want—but what does their customer want?"

Multiply that by millions, and the task becomes that much harder."How do you handle the hundreds of millions of behaviors and activities that are important?" Nussey said. "And the most challenging part is how do you do all this without having a human being in the middle to make sense of it?"

Nussey was already thinking of this issue when he joined Silverpop in 2000."I came in shortly after its founding to help take it to the next level," he says. "It was born with the idea that marketing interactions were going to become individualized."

The challenge, he said, was taking all the "raw, hard technology" and delivering it to marketers "in a way that they can digest and make use of."

"We were trying to figure out how to sell more effectively and deliver to our clients more quickly than the traditional model, which is where you ship them a CD or a disk and they install it and then you send them a new one every six or 12 months and hope they keep up."

The answer came with the rapid growth of the Internet. It allowed marketers to interact with customers in an entirely new way. And Silverpop was one of the early experimenters in this field.

"This was way before there was AJAX and interactive web experiences," Nussey said. "We built an application years ahead of most of the marketplace in terms of allowing marketers to log in over the Web and do very sophisticated marketing. Originally it was around email primarily, and by 2006, we cast a much broader vision than just email."

Today, interactive and automated marketing have become widely accepted. "It's amazing how important it's become," Nussey said. "And I would argue that it's really an early indicator of what's coming down the pike in the next couple of years. I think there's a sense that marketing as we know it—really customer experience as we know it—is beginning to transform."

"And it's interesting that the largest, most successful technology companies on the planet all think it's central to their long term success," he continued. "Those of us who have been doing it for a long time, we always had a feeling it'd be important."

The deal with IBM just confirms that view.  Silverpop felt like it had the right technology and products, but it didn't have the heft of a big company to get the kind of attention Nussey was looking for. "We felt like when people had the opportunity to hear our story, we did extremely well and had great long-term customer relationships with marketing departments," he said. "But we just didn't have the awareness."

3 Future Biotechnology Blockbusters?

The holy grail of drug development is launching a billion-dollar blockbuster therapy, but that isn't easy to do. It costs more than $1 billion to usher compounds through expensive clinical trials (including failures) and just 10% of drugs in pipelines ever make it to market.

The hit-and-miss nature of the industry suggests that only the most sophisticated (and risk-taking) investors should buy biotechnology stocks, but for those who invest in the space there are few things as profit-friendly as catching a billion-dollar blockbuster in the making.

That leads me to Medivation (NASDAQ: MDVN  ) , Ophthotech (NASDAQ: OPHT  ) , and Portola (NASDAQ: PTLA  ) , three companies with important therapies that may very well be destined to become top sellers.

MDVN data by YCharts.

Source: Medivation

Expanding the label
Medivation has the distinction of being the only one of these three companies to have a drug on the market.

The fast-growing Xtandi (a joint product with Astellas) has been nibbling at Johnson & Johnson's heels since winning approval as a treatment for post-chemotherapy metastatic-castration resistant prostate cancer, or mCRPC, in 2012.

Xtandi has already unseated J&J's Zytiga as the market share leader in this small indication, but a much larger payday is coming if the FDA approves Xtandi for use in pre-chemotherapy mCRPC patients.

In December 2012, the FDA approved a similar label expansion for Zytiga, which quickly became a blockbuster. Zytiga's sales totaled $1.7 billion in 2013 and climbed another 45% to $1.07 billion in the first six months of this year.

Xtandi is already being prescribed to pre-chemo patients off-label, and phase 3 trials show that patients using the drug were able to delay chemotherapy by 11.2 months, versus just 2.8 months with the placebo.

The FDA is expected to rule on the label expansion on Sept. 18. If approved, Xtandi revenue will likely jump significantly from the $172 million it notched globally in the first quarter.

Source: Regeneron.

Playing well with others
Ophthotech isn't your typical biotechnology company. Instead of developing a drug that can replace existing therapies, it's working on a drug that can be used alongside them.

The company's Fovista successfully boosted eyesight in patients with wet age-related macular degeneration, or AMD, by 10.6 letters when used alongside Novartis' blockbuster drug Lucentis, versus 6.5 letters for Lucentis alone.

Lucentis racked up $619 million in sales during the second quarter for Novartis, which owns foreign rights to the drug, and more than $4 billion for Novartis and Roche (its U.S. partner on the drug) in 2013. And it's not the only drug Fovista may help work better.

Ophthotech is also studying Fovista alongside Regeneron and Bayer's fast-growing wet-AMD treatment Eylea. Since gaining FDA approval in 2011, Eylea has quickly won away market share from Lucentis, with total global sales clocking in at more than $500 million in the first quarter of this year.

Ophthotech's gamble to position Fovista as an adjunctive treatment rather than a stand-alone drug is already paying off. Last month, Novartis, eager to defend its Lucentis franchise, paid $200 million up front and agreed to pay as much as $1 billion in milestones, plus royalties, to lock up international rights to market Fovista if and when it passes muster with regulators.

Counting on a competitor
It's not often that big drugmakers root for competitors, but that's exactly what's happening with Portola.

Portola is working on a factor Xa decoy, a drug that has the very unique (and important) ability to reverse the anticoagulant effects of the latest factor Xa clot-busting drugs from Johnson & Johnson, Bristol-Myers Squibb, and Daichi.

Johnson & Johnson, which is partnered with Bayer on Xarelto, and Bristol, which is partnered with Pfizer on Eliquis, are already making big money selling their factor Xa alternatives to the side effect-laden warfarin, but sales could truly soar if an effective antidote wins approval.

Johnson's Xarelto sales rose 91% to $361 million in the second quarter, while sales of Bristol and Pfizer's Eliquis jumped from $22 million in the first quarter of 2013 to $106 million in the first quarter of 2014 (the companies have yet to report second-quarter numbers).

Those big-selling drugs will likely soon be joined by another factor Xa anticoagulant made by Daichi, and all those approvals aim to dislodge warfarin's decades-long stranglehold on the market.

That means Portola's reversal drug will be relied upon heavily in hospital settings, but Portola isn't stopping there. It is ushering its own factor Xa drug, betrixaban, through phase 3 trials, positioning it to compete directly against these collaborators.

Source: Portola.

Fool-worthy final thoughts
All three of these companies have significant potential but come with risk.

Xtandi has the potential for label expansion in prostate cancer and may have potential as a breast cancer treatment, but it's Medivation's only drug. Johnson & Johnson in 2013 acquired a potential second-generation version of Xtandi, ARN-509, that was developed in the same lab at UCLA and could someday displace it. Ophthotech and Portola similarly have uninspiring pipeline depth. The only other drug under development at Ophthotech is Zimura, another treatment for AMD. Beyond its factor Xa decoy and factor Xa anticoagulant, Portola's pipeline includes just two other early stage compounds. That said, for aggressive investors willing to take risk, all three companies may deliver significant sales over time that could prove profit-friendly. 

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Diamond Hill Capital Comments on Whirlpool Corp

Household durables manufacturer Whirlpool Corp. (WHR) struggled in the quarter as the company made some cautious comments regarding volumes for the period pushing growth into the second half of the year.From Diamond Hill Capital (Trades, Portfolio)'s Select Fund Second Quarter 2014 Commentary.Also check out: Diamond Hill Capital Undervalued Stocks Diamond Hill Capital Top Growth Companies Diamond Hill Capital High Yield stocks, and Stocks that Diamond Hill Capital keeps buying

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10 Big-Name Stocks Going Ex-Dividend Next Week (July 28 – Aug 1)

Ex-dividend dates are very important to dividend investors, since you must purchase a stock prior to its ex-dividend date in order to receive its upcoming dividend payout. For more information, check out Everything Investors Need to Know About Ex-Dividend Dates.

Below we highlight 10 big-name stocks going ex-dividend for the week of July 28 – August 1 .

1. Pfizer

Pfizer (PFE) is set to trade ex-dividend on July 30. The drug company offers a dividend yield of 3.42% based on Wednesday's closing price of $30.39 and the company's quarterly dividend payout of 26 cents. The stock has been flat year-to-date. Dividend.com currently rates PFE as “Recommended” with a DARS™ rating of 3.5 stars out of 5 stars.

2. Hasbro

Hasbro (HAS) is set to trade ex-dividend on July 30. The toy maker offers a dividend yield of 3.36% based on Wednesday's closing price of $51.17 and the company's quarterly dividend payout of 43 cents. The stock is down 7% year-to-date. Dividend.com currently rates HAS as “Neutral” with a DARS™ rating of 3.4 stars out of 5 stars.

3. Ford

Ford Motor Company (F) is set to trade ex-dividend on July 30. The automobile company offers a dividend yield of 2.81% based on ednesday's closing price of $17.78 and the company's quarterly dividend payout of 12.5 cents. The stock is up 15% year-to-date. Dividend.com currently rates F as “Neutral” with a DARS™ rating of 3.4 stars out of 5 stars.

4. Texas Instruments

Texas Instruments (TXN) is set to trade ex-dividend on July 29. The semiconductor company offers a dividend yield of 2.48% based on Wednesday's closing price of $48.20 and the company's quarterly dividend payout of 30 cents. The stock is up 10% year-to-date. Dividend.com currently rates TXN as “Neutral” with a DARS™ rating of 3.4 stars out of 5 stars.

5. Bank of Montreal

Bank of Montreal (USA) (BMO) is set to trade ex-dividend on July 30. The financial services company offers a dividend yield of 2.49% based on Wednesday's closing price of $48.19 and the company's quarterly dividend payout of 78 cents. The stock is up 14% year-to-date. Dividend.com currently rates BMO as “Neutral” with a DARS™ rating of 3.4 stars out of 5 stars.

6. ADT

ADT Corp (ADT

Emerging markets at 17-month high: 5 things to know

NEW YORK (MarketWatch) — Emerging-markets stocks have jumped to their highest level in nearly 17 months.

The closely watched iShares MSCI Emerging Markets ETF (EEM)   finished Wednesday at $44.76, its best close since January 2013.

What's driving the rally? What's next? Here are five things to know.

1. Upbeat Chinese reports help: Better economic reports from the biggest emerging market, China, deserve a lot of credit, according to Russ Koesterich, BlackRock's global chief investment strategist.

"The recent improvement in Chinese economic data has provoked the beginning of a rotation back into emerging markets (EMs)," Koesterich wrote in his latest weekly investment commentary. "Last week was the sixth consecutive week of inflows into EMs, which suggests sentiment toward the asset class is starting to turn." Read more: China Q2 GDP beats, 'hard landing' seen as distant risk

Koesterich has said his team prefers Asian equities in particular, and they're neutral on the broad category of EM stocks.

2. Watch for more talk about looking outside the U.S.: Keep an eye out for chatter about how stock investors have begun to venture abroad — and how emerging-market equities are relatively cheap.

That's the prediction offered by Michael Batnick at his Irrelevant Investor blog. He notes the iShares MSCI Emerging Markets ETF, after underperforming the SPDR S&P 500 ETF (SPY)  for years, has advanced 20% from its February low.

Given that "stories tend to follow price, I am 100% certain that if this action continues, we are going to hear some very interesting theories," writes Batnick , who is Ritholtz Wealth Management's research director.

"I imagine it will go something like this: 'Attractive valuations coupled with severe under performance and fears over the end of the Taper, it's no wonder investors have started to look outside the United States.'"

Some market watchers already have been talking up the attractive valuations, from Aberdeen Asset Management in April to Jeff Reeves in June.

3. You might not want to buy EEM: The iShares MSCI Emerging Markets ETF — shown in the adjacent chart — gets lots of attention, but EEM isn't for everyone.

/quotes/zigman/322623/delayed/quotes/nls/eem EEM 44.76, +0.04, +0.09%

This ETF is "the choice for institutional investors and active traders thanks to its robust liquidity and deep options market," write analysts at ETF.com. The analysts' top pick for the EM segment, especially for long-term investors? It's the iShares Core MSCI Emerging Markets ETF (IEMG) , which has an expense ratio of just 0.18% versus EEM's 0.67%.

ETF.com also describes the Vanguard FTSE Emerging Markets ETF (VWO)  as a "very strong choice," noting that it excludes South Korea while EEM and IEMG include that nation. Keep in mind that there are also more-targeted EM ETFs , like one that promises exposure to the developing world via blue-chip companies based in the developed world.

4. Russia's retreat hasn't stopped the EM rally: Russia is a huge emerging market, but so far the slide by Russian equities on Ukraine-related worries hasn't been enough to hold back the broad EM ETFs.

It's worth noting that Russia accounts for only about 5% of EEM. Latin America and China each account for 18%, and the Middle East and Africa together make up 9%. Read more about Mideast investing: 5 things to know about Saudi Arabia's market.

While Vladimir Putin might sneer at weakness, EEM's exposure to the so-called "Fragile Five" actually has helped offset its exposure to Russia. That's the label given to the five emerging-market nations of Turkey, India, Indonesia, Brazil and South Africa. This year, the Fragile Five have become the Fantastic Five, as a DealBook post put it.

5. Chart watchers wary of the $45 level: The iShares MSCI Emerging Markets ETF peaked around the $45 mark in January 2013, and it also turned tail around that level in 2012.

The ETF is "hitting key resistance," said Dave Lutz of Jones Trading in his "What Traders Are Watching" note on Wednesday.

"Keep an eye on the EEM (Emerging Markets) here," he added. It's "gapped toward 45" after having "failed there in 2012 and 2013."

More from MarketWatch:

Why junk-bond ETFs could drop in the next 1 to 3 months

Map shows world's terrorist hot spots

5 reasons why Richard Bernstein thinks stocks aren't in a bubble

Dividend Preview: 5 Stocks Ready to Pay You More

BALTIMORE (Stockpickr) -- Yesterday's surprise event-driven selloff in stocks was an important reminder not to rely exclusively on capital gains in 2014, especially with stocks sitting on the high end of their historic price range. Put simply, with chances of a meaningful correction on the horizon, dividends still matter for your portfolio this summer.

>>5 Big Stocks to Trade for Gains This Summer

The good news is that now's a better time than ever to be a dividend investor.

As I write, U.S. corporations are paying out record dividends thanks to a record pile of cash on corporate balance sheets -- and the dividend yield of the S&P 500 is hovering in a range higher than we've seen in any sustained period since the mid-1990s. Adjusting for the incredibly low yields on treasuries, dividend payouts are massive right now.

But to find the biggest gains, it's not enough to simply buy names with big payouts today -- you've got to think about what they'll be paying tomorrow too.

So instead of chasing yield, we'll try to step in front of the next round of stock payout hikes.

>>5 Stocks With Big Insider Buying

For our purposes, that "crystal ball" is composed of a few factors: namely a solid balance sheet, low payout ratio and a history of dividend hikes. While those items don't guarantee dividend announcements in the next month or three, they do dramatically increase the odds that management will hike their cash payouts to shareholders.

Without further ado, here's a look at five stocks that could be about to increase their dividend payments in the next quarter.

Verizon Communications

Up first is Verizon Communications (VZ), a $208 billion telecom giant with an equally giant dividend payout. That dividend has added some material performance numbers to VZ's total returns in 2014; without them, this stock is only up 2.4% since the calendar flipped to January. For income-seekers, Verizon's 4.2% yield is one of the biggest on the S&P 500 -- and it looks like it's about to get boosted in the next quarter.

>>3 Big Tech Stocks on Traders' Radars

Verizon Communications the largest local phone and wireless company in the U.S., edging just ahead of top rival AT&T (T) in both categories. Verizon's wired network reaches 25% of the population, and Verizon Wireless boasts 103 million retail subscribers. Scale comes with some serious advantages in the wireless business, and Verizon's bigger-than-thou size means that it can spread network costs across more customers and upsell a larger rolodex of subscribers to margin-boosting services like "triple-play" packages.

Quite frankly, Verizon overpaid to buy the 45% of Verizon Wireless it didn't own from Vodafone (VOD) last year. But the market has already voted that it's happy to take the balance sheet leverage in exchange for full ownership of the nation's largest mobile carrier. It's important to note that the firm's unloading of non-core assets in the last several years unburdened the balance sheet enough to make the big price tag affordable -- and it leaves room for a dividend hike in the next quarter.

Right now, VZ pays a 53-cent quarterly check, but next week's earnings could come with a raise for investors.

Goldman Sachs

Investment bank Goldman Sachs (GS) is another large-cap name that looks ready to give shareholders a raise. Goldman doesn't need much of an introduction. For better or worse, the firm is basically the face of Wall Street. And that reputation gives the firm serious profit power in 2014.

>>5 Breakout Stocks for a Market Near All-Time Highs

Goldman is one of the biggest diversified financial firms in the world. Best known for its investment bank, the firm also operates institutional client services (such as prime brokerage and custody), investment management and retail services. Goldman's reputation alone holds a lot of cachet with many clients, particularly in the investment management side of the business, where wealthy retail clients want the Goldman Sachs name on their statements. In spite of lower deal premiums, increasing M&A and IPO volume in 2014 should help to propel Goldman's investment banking revenue this year.

The decision to convert into a bank holding company during the financial crisis is an important change for income investors: It means that the Fed gets veto approval over proposed dividend hikes for Goldman. It also means that the firm can't expose itself to the same levels of risk that it was permitted to in the past. Ultimately, the increased scrutiny is a good thing, even if it comes at the cost of short-term returns.

Right now, GS pays out a 55-cent quarterly dividend, but a hike looks likely to get rubber stamped by the Fed in the next quarter.

Mondelez International

2014 is driving some solid performance in shares of snack foods company Mondelez International (MDLZ). Since the start of the year, this food stock has climbed 7.6% higher thanks to better-than-expected sales growth numbers. Right now, the firm's 14-cent dividend payout adds up to a 1.47% yield, but the check that Mondelez cuts to investors is likely to get a boost in the next quarter.

>>5 Stocks Under $10 Set to Soar

The Mondelez name started appearing in your local grocery store back in 2012. That's when Kraft Foods Group's (KRFT) former parent spun off the snack and grocery divisions, renaming the former Mondelez. The new firm owns brands such as Oreo, Cadbury, Trident and Ritz. That break-apart decision makes sense for shareholders: Snacks typically carry higher margins, and that will mean higher corporate profits without the dilutive effects of the grocery arm.

Mondelez benefits from mature product lines here at home with relatively high consumer stickiness, but more than 80% of the firm's sales come from outside of North America. Much of that remaining exposure comes from emerging market economies, exactly the mix that investors should be targeting from this stock. While MDLZ took on considerable debt ($18.9 billion today) when it got spun off, but the firm's $2.4 billion cash position helps reduce any risk of liquidity issues.

This stock's short track record has included a big focus on returning value to shareholders. I'm expecting that to continue with a dividend hike next quarter...

Altera

Altera (ALTR) weighs in as the No. 2 player in the programmable logic device market, a subset of chips that can have their circuitry reprogrammed by the manufacturer's clients. PLDs have been growing in demand as the engineering flexibility they give device manufacturers outweighs their cost. Altera's customers include original equipment manufacturers of everything from communications devices to automobile components.

>>Beat the S&P With 5 Stocks Everyone Else Hates

Altera's PLDs open the doors to lower-production product runs, making them perfect for the industrial, communications, and automotive sectors. Since manufacturers don't need to develop application-specific integrated circuits, which have large fixed-costs and cannot be reconfigured. A production deal with Intel (INTC) gives Altera access to the most advanced manufacturing facilities in the world, enabling the firm to compete with cutting edge purpose-built chips.

From a financial standpoint, Altera is in stellar shape. The firm carries $3.26 billion in net cash and investments on its balance sheet, enough to cover more than 30% of ALTR's total market capitalization today. That's a huge amount of risk reduction, and investors should expect management to deploy some of that dry powder to hike its 1.74% dividend yield.

Right now, Altera pays out a 15-cent quarterly check to investors, but next week's earnings release could come with a raise.

Republic Services

Calling Republic Services (RSG) a huge garbage stock isn't a detractor -- it's a compliment. That's because the $13 billion name is the second-largest provider of waste management services in the U.S. Republic operates more than 338 individual trash collection companies, with nearly 200 transfer stations, 70 recycling centers and 190 landfills in its network.

Republic's business is largely recession-resistant. Because individuals and companies need to dispose of trash regardless of economic conditions, customer stickiness is high during all phases of the economic cycle. Likewise, because of RSG's large scale, it's able to vie for large national accounts that regional players can't bid for. While competition is tough with larger peer Waste Management (WM), the market is big enough for both firms to see growth in the next few years.

While the waste disposal business is capital intense (a single new garbage truck can cost more than $250,000 for example), the firm's operations throw off plenty of cash to cover interest payments and dividend hikes. Look for a boost to RSG's 26-cent dividend payout in the next quarter. Right now, Republic's dividend adds up to a 2.82% yield.

To see these dividend plays in action, check out the at Dividend Stocks for the Week portfolio on Stockpickr. 



-- Written by Jonas Elmerraji in Baltimore.

RELATED LINKS:

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Follow Stockpickr on Twitter and become a fan on Facebook.

At the time of publication, author had no positions in stocks mentioned.

Jonas Elmerraji, CMT, is a senior market analyst at Agora Financial in Baltimore and a contributor to

TheStreet. Before that, he managed a portfolio of stocks for an investment advisory returned 15% in 2008. He has been featured in Forbes , Investor's Business Daily, and on CNBC.com. Jonas holds a degree in financial economics from UMBC and the Chartered Market Technician designation.

Follow Jonas on Twitter @JonasElmerraji

Jeremy Grantham: Market Decline ‘Not Imminent’

Jeremy Grantham, famous for growling gloomy forecasts is surprisingly sanguine in the face of a stock market that keeps on testing new highs and hasn’t seen a 10% correction since 2011.

The Grantham, Mayo, Van Otterloo & Co. hedge fund manager refers to himself as a “value-driven bear,” most likely as part of his general personality, but he musters little but the case for bullishness in his new quarterly investment letter.

The widely followed GMO manager notes the apparent strangeness of the market’s unrelenting rise despite a shocking -2.9% Q1 GDP growth (“forecast by no one,” he adds), a decline in corporate earnings and “very low” market volatility despite “Middle Eastern problems.”

Adding that the rise comes despite a January rule market effect that would predict a negative market and another Wall Street rule—the dread of a presidential third year—just three months away reinforces his recent forecast that the S&P 500 must wend its way up to 2,250, minimally, before the bubble is fully blown.

A further contrarian indicator of bullishness is the voluminous surge in financial deals—“a veritable explosion, to levels never seen gefore,” Grantham writes.

Corporations are engaged in M&A because the cost of debt is lower than in previous deal frenzies and profit margins remain “at very high levels and are widely expected to stay there.”

Compelling as that may be, the hedge fund manager is even more impressed with the fact that the economic recovery, to him, appears quite young.

Grantham draws that conclusion based on the room he sees for a growing economy to draw discouraged workers back to jobs, foreseeing the possibility of a 2% increase in the labor participation rate; he similarly envisions space for a robust increase in capital spending, which he bases a pace of capital spending that has “never, ever” been so slow.

All this points to an economic recovery “that seems to have enough slack to keep going for a few years,” Grantham writes.

The money manager forecasts the next year or two will see all previous deal records broken.

“This of course will help push the market up to to true bubble levels, where it will once again become very dangerous indeed,” he writes.

But market bears be warned: “Perhaps the single best reason to suspect that a severe market decline is not imminent is the early-cycle look that the economy has,” Grantham writes.

Based on Friday’s S&P 500 close of 1,978, stocks can gain another 14% before passing Grantham’s minimum threshold for a fully formed bubble.

In that forecast, released May 1, Grantham was expecting the market to reach that lofty level some time around the fourth quarter of 2016. He did not say in his current letter whether he expects the market peak to come any sooner based on the stock market’s surge over the past quarter.

Fueling market speculation until the bubble gets fully blown is Fed Chairman Janet Yellen’s easy money policy, which Grantham says, critically, follows the pattern of her predecessors Alan Greenspan and Ben Bernanke.

Grantham calls that policy an “affirmation of moral hazard,” which he characterizes as “we will not move to stop bubbles, dear investors, but will help you out when things go badly wrong.”

The money manager and environmental activist devotes most of his letter, as he frequently does, to sundry other topics including Malthusian economics, the Keystone Pipeline and to the story of an early financial wipe-out that forever turned him away from speculation and formed him as a “patient, long-term value investor.”

Schwab Charitable DAF Contributions Increase by 38%

Schwab Charitable, a donor-advised-fund organization, reported Tuesday that individual account holders had granted $822 million to some 34,500 charities in the 2014 fiscal year, ended June 30.

This was an increase of 38% from the previous fiscal year.

“Our donors have absorbed the new tax policies that took effect in 2013 and they are encouraged by an improving economy and a strong stock market,” Schwab Charitable’s president Kim Laughton said in a statement.

“As a result, they are increasing their giving and supporting a wide range of causes.”

The firm also reported assets under management of $6.4 billion as of June 30. More than 45% of contributions to Schwab Charitable accounts have been granted out to charities since inception.

The number of new DAF accounts grew by 17% in the last fiscal year, Schwab said.

It noted that registered investment advisors have responded to investors’ increased interest in tax-efficient giving by making charitable planning an important part of financial planning and wealth management.

Charles Schwab’s 2014 Independent Advisor Outlook showed charitable planning was one of the top three services offered by RIAs to supplement their core investment advisory business.

It outranked estate planning and fell just behind long-term financial planning and advice on employee-sponsored retirement accounts in the survey of 720 independent advisors representing an estimated $180 billion in assets under management.

“Charitable planning is becoming a natural part of the financial planning and wealth management discussion between independent investment advisors and their clients,” Laughton said.

“Advisors strengthen their relationships with clients by taking part in such decisions because charitable causes and organizations matter a great deal to their clients.”

Expanded Investment Options

Schwab Charitable also announced that it would expand the investment options available to donors by adding a new Income Index Pool in August.

That will bring the number of pools to 14.Ten pools are dedicated to a single asset class, while four are allocated across multiple asset classes.

The underlying mutual fund for the new Income Index Pool is the Dreyfus Bond Market Index Basic (DBIRX), chosen for its strong historical performance and low operating expenses, according to Schwab.

---

Check out Cheerfully Charitable at Schwab on ThinkAdvisor.

Market Has Not Yet Noticed Potential in Thompson Creek Metals Company (TC); Have You? - Tale of the Tape

It commonly happens in stock investing that investors miss the chance of buying winning stocks that they knew would stand out. Before they take the plunge, others get to know the hidden potential and enter into these stocks, pushing them out of reach.

So, instead of repenting, spotting the off-the-radar potential winners and immediately investing in them could be a smart decision.

One such company that looks well positioned for a solid gain, but has been overlooked by investors lately, is Thompson Creek Metals Company Inc. (NYSE: TC). This Mining – Non Ferrous stock has actually seen estimates rise over the past month for the current fiscal year by about 50%. But that is not yet reflected in its price, as the stock gained only 1.07% over the same time frame.

You should not be concerned about the price remaining muted going forward. This year's expected earnings growth over the prior year is significant, which should ultimately translate into price appreciation.

And if this isn't enough, TC currently carries a Zacks Rank #2 (Buy) which further underscores the potential for its outperformance (See the performance of Zacks' portfolios and strategies here: About Zacks Performance).

So if you are looking for a stock flying under-the-radar that is well-equipped to bounce down the road, make sure to consider Thompson Creek Metals Company. Solid estimate revisions and an impressive Zacks Rank suggest that better days may be ahead for TC and that now might be an interesting buying opportunity.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>

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THOMPSON CREEK (NYSE: TC): Free Stock Analysis Report
 
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The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

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Goldman Goes From Bear to Bull on U.S. Stocks

Goldman Sachs (GS)just went from a bear to a bull on the S&P 500, becoming one of the more optimistic firms on Wall Street.

The firm–which earlier this year said stock valuations were “lofty by almost any measure“–boosted its S&P 500 year-end price target to 2050 from 1900. Such a rally would represent a 4.2% gain from Friday’s close on top of  the 6.5% gain the S&P 500 has already achieved this year–and would mark an above-average year for the index if it came to pass.

Still, Goldman didn’t sound too excited about it’s latest forecast.

“We expect the equity rally will continue, but the trajectory will be shallow,” Goldman strategist David Kostin wrote to clients. “Domestic economic growth is accelerating, and earnings will continue to rise, but further P/E multiple expansion is unlikely given our and the market's expectation for a Fed hike within 12 months.”

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The S&P 500 jumped 0.5% to 1978 and sits less than 1% from its all-time high.

Goldman Sachs started the year with a cautious view on U.S. stocks. The firm was concerned about pricey valuations and the fact that earnings growth would need to support a continued rally. Mr. Kostin maintained a 1900 price target on the S&P 500, a level that was surpassed last month for the first time.

Companies in the S&P 500 trade at a price-to-earnings ratio of 19.4, based on the past 12 months’ earnings. That trailing ratio, which was 18.4 a year ago, is above its historical average of about 17.

“US equities soared 42% during the past 18 months but the stellar return borrowed heavily from the future,” Mr. Kostin said. “History shows S&P 500 rallies and the P/E multiple expands during the year prior to the start of a tightening cycle. But after tightening begins, the multiple contracts and the index typically delivers only modest returns.”

The 13 Wall Street strategists tracked by Birinyi Associates predict the S&P 500 will finish the year at about 1950, on average. Last month Citigroup (C) lifted its year-end target to 2000 from 1975. After a weather-induced contraction in first-quarter economic growth, Citi strategist Tobias Levkovich predicted "a stronger economy for the balance of the year,” including a strong pickup in the current quarter, which should bode well for earnings growth.

Goldman also lifted its 12-month price target to 2075 and maintained year-end 2015 and 2016 targets at 2100 and 2200, respectively.

“Viewed in relation to bond yields, the U.S. equity market still appears attractively valued,” Goldman strategist David Kostin wrote to clients. Goldman recently lowered its year-end forecast for the benchmark 10-year yield to 3.0% from 3.25%. The 10-year note currently yields 2.537%.

2.5 Billion People Threatened by This Disease: How We're Fighting Back

According to the WHO, 2.5 billion people are at risk for dengue fever, between 50 million and 100 million people contract the disease each year, and over a million people die from it each year.

For such a big health risk, you'd expect big plans to fight back. And science looks ready to deliver, with multiple approaches being used to help turn the tide.

In Brazil, where dengue fever is depressingly common (the highest incidence in the world), an intriguing pilot program has begun. In the lab, a gene is inserted into male mosquitoes that will kill them (although they are fed a temporary antidote that will keep them alive until their mission is complete); they're released into the world, mate, and pass on the gene to their offspring. The offspring die before adulthood, hopefully helping winnow down the mosquito population.

There's also another option: a dengue vaccine. Several companies are developing vaccines, chief among them best-in-class European big pharma Sanofi  (NYSE: SNY  ) . Sanofi has already completed a late-stage trial for its dengue vaccine, and the data look good (although we're still waiting to receive more data from another late-stage trial). And helping defeat this scourge could be big money for Sanofi, with its vaccine having the potential (if approved) to be a blockbuster drug.

In the video below, from Where The Money Is, the Motley Fool's investing show, health care analysts Michael Douglass and David Williamson discuss dengue, how we're fighting back, and Sanofi's exciting opportunity to do well by doing good.

Another huge opportunity to do well by doing good
The best investors consistently reap gigantic profits by recognizing true potential earlier and more accurately than anyone else. Let me cut right to the chase. There is a product in development that will revolutionize not just how we treat a common chronic illness, but potentially the entire health industry. In order to outsmart Wall Street and realize multi-bagger returns you will need The Motley Fool's new free report on the dream-team responsible for this game-changing blockbuster. CLICK HERE NOW.

Don’t Make a Monkey Out of Me: S&P 500 Weathers Storm, Small Caps Fall Most Since 2011

The Planet of the Apes is back–and better than ever, if the critics are too be believed. The new Dawn of the Planet of the Apes is set 10 years after the events of Rise of the Planet of the Apes, where a search for the cure to Alzheimer’s killed much of the human population. Apes are ascendant, humans struggling for survival. And of course they fight. A lot. But it’s more than that. Slate’s Dana Stevens calls it “one of the most intelligent and entertaining big-studio releases of the summer so far.” The Christian Science Monitor’s Peter Rainer touts it as “a thinking person’s fantasy film” that “doesn’t seem like a fantasy at all.” The Globe and Mail’s Dave McGinn simply writes, “It’s incredible.” That might not be enough to make Dawn of the Planet of the Apes a blockbuster–Box Office Mojo projects it will earn more than $50 million but less than $75 million–but it certainly sounds like a film worth seeing.

WETA

Will the stock market make a monkey out of investors? That was the worry earlier this week, when the market slid on Fed fears and European bank concerns. But for all the Sturm und Drang the S&P 500 fell just 0.9% to 1,967.57. Sure, that was the worst weekly drop since April, but in the grand scheme of things, not much to get worried about.

The Dow Jones Industrial Average, meanwhile, fell 0.7% to 16,943.81, and the Nasdaq Composite dropped 1.6% to 4,415.49. The only worrisome decline came in the small-company Russell 2000, which plunged 4% to 1,159.93, its biggest weekly decline since November 2011. Ouch.

The folks at Bespoke Investment Group point out the one “clear trend” has been the one that sees jumps in sentiment followed by market declines:

This trend where investors begrudgingly become more bullish only to see the market sell-off moderately once they do has been a clear trend during this bull market. If the trend continues, we would expect sentiment to take a turn for the worse next week as investors have been slow to embrace rallies and quick to jump to the sidelines. It is a pattern that we have seen throughout this bull market. As we have stated time and time again throughout this bull, as long as the investor class remains skeptical of equities as an asset class, the rally should remain on firm footing. If we start to see bullish sentiment remain high even on pullbacks like the one we've experienced this week, then it might be time to raise some cash and look for a more extended correction.

Strategas Research’s Chris Verrone and Todd Sohn state the obvious: Stick with large-caps:

While price action has been modestly distributive this week, the good news is that internal trends remain supportive with 81% of the S&P still in an uptrend. The leadership backdrop also remains decent with the MS Cyclical Index continuing to chart fresh relative highs as credit conditions remain benign (BBB spreads are sitting near cycle lows). Now as we've been highlighting most of the year, things do certainly get more selective down the cap scale (small-caps are still underperforming this year), so we would continue to favor a large vs. small bias.

You’d be wise to do the same.